Genius Products turns its first profit
EmptyGenius Products LLC has turned a profit for the first time in company history and expects to sharply increase its direct-to-video output thanks to a $70 million credit facility from one of the world's largest financial services groups.
The home entertainment supplier, 70% owned by The Weinstein Co., has bulked up since ex-Warner Home Video executive Trevor Drinkwater came aboard two years ago as president and CEO with 16 distribution deals. Profitability came earlier than expected, with the announcement Monday that Genius posted net income of $2.1 million on record revenue of $145 million in the second quarter, which ended June 30.
Genius on Friday announced it has secured a new credit facility arranged by Societe Generale, one of the largest financial services groups in the world, that provides the company with an initial commitment of $30 million and a total of up to $70 million for non-Weinstein Co. product. The three-year, senior secured revolving credit facility will be used exclusively to acquire, produce and co-produce, with current branded partners, content that will be released directly to the home entertainment market.
"This financing facility will enhance Genius's ability to effectively leverage its distribution platform and expand its margins through productions and content acquisitions," Drinkwater said. In particular, "we will be investing heavily in direct-to-video coproductions" with partners in the sports, family and faith, lifestyle and independent film categories," he added.
"For example we coproduced 'Casper's Scare School' with Classic Media, and we are coproducing films that will air on Ion on Friday, Saturday and Sunday and then come out on home video the following Tuesday," Drinkwater said.
Genius chairman Stephen Bannon said the new credit facility "validates the strength of our expanding relationships with content partners and provides us with the additional financial capacity to drive sustainable, long-term growth in a cost-effective manner."
In addition to co-productions with branded partners, Genius also remains "focused on expanding relationships with our existing content partners through traditional and non-traditional distribution and marketing in the areas of interactive, digital and licensing," Bannon said.
For the second quarter, Genius reported total gross revenue of $145 million, up $30 million from the previous quarter, and net income of $2.1 million. Based on these results, the company adjusted upwards its full-year 2007 gross revenue guidance range to $750 million to $800 million from $700 million to $800 million.
"The profitable growth we achieved in the second quarter was driven by solid retail strategies, tight controls on shipments and a diversified content offering through traditional and non-traditional channels," Drinkwater said. "In the second half of 2007, we will be offering a strong video release schedule of theatrical titles from The Weinstein Co. We also will have a full season of the well established Classic Media holiday titles, revenue from new content partners, RHI, Sesame Street the Discovery Channel and revenue from newly launched titles under our Animal Planet and TLC brands.
"We are expecting a record third quarter and a fourth quarter with gross revenue approximating the gross revenue of our full year 2006. In addition, we believe we will begin to see our revenue and margins increase from our new co-production business and our expanded relationships with anchor partners in interactive, digital and licensing."