Log in
  

Loss, Revenue Drop Punctuate Image Entertainment's Fiscal Second Quarter 2002

12 Nov, 2001 By: Hive News


DVD label Image Entertainment on Monday reported results for its fiscal year 2002 second quarter and six months ended Sept. 30, 2001.

According to a company press release, net revenues for the second quarter ended Sept. 30, 2001 decreased 17.6% to $21,070,000 from $25,580,000 for the second quarter of the prior year. Image management believes its revenue performance continues to be negatively impacted by economic weakness in the retail sector and the loss of exclusive revenues from its license agreements with Orion Home Entertainment Corp. and Universal Studios Home Video, Inc., which expired at the end of the last fiscal year.

Gross profit margin for the three months ended Sept. 30, 2001 was 28.2% compared to 30.1% for the three months ended Sept. 30, 2000. The company's loss from operations was $777,000 for the September 2001 quarter compared to earnings from operations of $1,748,000 for the September 2000 quarter. The net loss for the September 2001 quarter was $856,000, or $.05 per share-diluted, versus net earnings of $1,753,000, or $.10 per share-diluted, for the September 2000 quarter. The net loss for the September 2001 quarter included a one-time charge associated with the settlement of litigation with Universal Studios Home Video, Inc. of $198,000, or $.01 per share-diluted, net of related income tax benefit.

Net earnings for the September 2000 quarter included a net gain on sale of land of $484,000, or $.03 per share-diluted, net of related income taxes. EBITDA, for the September 2001 quarter was $114,000, compared to $2.4 million for the September 2000 quarter.

Net revenues for the six months ended September 30, 2001 decreased 16.1% to $41,550,000 from $49,547,000 for the six months ended September 30, 2000. Gross profit margin for the September 2001 period was 28.4% compared to 29.9% for the September 2000 period.

The company's loss from operations was $1,139,000 for the September 2001 period compared to earnings from operations of $3,548,000 for the September 2000 period. The net loss for the September 2001 period was $1,349,000, or $.09 per share-diluted, versus net earnings of $3,068,000, or $.18 per share-diluted, for the September 2000 period. The net loss for the September 2001 period included a one-time charge associated with the Universal litigation settlement of $198,000, or $.01 per share-diluted, net of related income tax benefit.

Net earnings for the September 2000 period included a net gain on sale of land of $484,000, or $.03 per share-diluted, net of related income taxes. EBITDA, for the September 2001 period was $574,000, compared to $4,913,000 for the September 2000 period.

Martin W. Greenwald, Image's president and c.e.o., said in a prepared statement, "Our September 2001 quarter was a continuation of our June 2001 quarter's doldrums. Revenues continued to be negatively impacted by a slowing economy and retail's curtailed appetite for software. When looking at the loss for the September quarter, it is important to note that our comparative quarterly increase in depreciation expense and the one-time charge for the Universal lawsuit settlement contributed approximately 39% of our reported loss for the quarter. It is never easy to report a loss; however, I am not overly disappointed given the current climate of the retail market.

"I am pleased to report that October was a banner month in terms of revenue performance as compared to previous months in our current fiscal year. It is obviously much too early to forecast the remaining six months of our fiscal 2002 with any degree of accuracy; however, I feel confident that for the remaining six months of the fiscal year we will see improvement over the last six months' operating performance. Although the retail market has slowed considerably, DVDPlanet.com is enjoying modest, yet real growth. Our joint-venture, Aviva International, has continued to increase revenues each quarter from international home video and broadcast sales," Greenwald said.

Continued Greenwald, "I believe that consumer demand for entertainment software will increase during the coming holiday season, and I am therefore optimistic that we will realize revenue growth from current levels and related earnings in the second half of our fiscal year. Our product line remains strong and compelling and the ramp-up of our audio business bodes well for our future revenue growth. It is my belief that, as the retail sector begins to improve, our core businesses will be well positioned to benefit."


Add Comment