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Friday, Jun 9, 2023

Image Woes Add Up to Q3 Loss

Expenses from a proxy fight with Lions Gate Entertainment, the closure of an overseas office and weak home entertainment content sakes contributed to Image Entertainment Inc. reporting a $3.4 million net loss for its third quarter. The Chatsworth-based producer and distributor of DVDs and CDs was going through a “difficult period” but is positioning itself to return to growth and profitability, said President and CEO Martin Greenwald, in a statement. The $3.4 million net loss, or $0.16 loss per diluted share, came on $24.3 million in revenue for the quarter ending Dec. 31. That is a reverse of the strong third quarter in 2005 when the company reported a net income of $2.3 million, or $0.11 per diluted share, on revenues of $39 million. The third quarter of 2005 was “a stellar” one for the company and it is difficult to pinpoint the reason for the sales slump, Greenwald said. “What I do believe is that, just as Q3 last year was unusual, this past quarter was unusual as well,” Greenwald said. Among the increased expenses for the company was $216,000 for evaluating strategic alternatives, including possible sale of the company, and Lion Gate’s contested vote for members of Image’s board of directors. Santa Monica-based Lions Gate put up its own slate of candidates for the board during the company’s annual meeting in October. Lions Gate holds 19.8 percent of Image stock. Shareholders re-elected the sitting board members. Image also had $267,000 in expenses for shuttering its office in Great Britain and letting the employees go. The layoffs were part of a restructuring that saw 30 total positions eliminated in November and that contributes to a $3.8 million savings.

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