Image back in home entertainment market

Blu-ray and digital revenue boosts company's recovery

After narrowly averting bankruptcy in January through a pennies-on-the-dollar sale of the Chatsworth, Calif.-based distributor to San Francisco-based investment company JH Holdings, Image is once again acquiring, releasing and distributing product to the home entertainment market.

The company has a new team in place, headed by chairman and CEO Ted Green, COO John Hyde and CFO John Avagliano. It recently hired industry veteran Mark Ward as VP of acquisitions, working on chief acquisitions officer Bill Bromiley's team; senior sales executive Ray Gagnon; and Alan Fergurson, formerly VP of consumer products and home entertainment with MTV Networks.

Image also named Marshall Heinberg, senior managing director at Oppenheimer & Co., and Mary George, vice chairman of Bell Automotive Products, to its seven-member board.

Recent financials indicate recovery may come sooner than later. Citing ongoing restructuring and cost-cutting measures, Image last week reported a first quarter (ended June 30) loss of $41,000, compared with a loss of more than $3 million during the previous-year period.

Even better, Image's ability to continue as a "going concern," language typically attributed to a company in financial straits, was lifted by its independent auditors partially due to the extension of a loan maturity date and the improvement in gross margin, which improved to 26.8%, compared with 20.2% last year.

Image posted a 41.7% increase in Blu-ray Disc revenue, to $1.8 million from $1.3 million last year. Digital revenue, including transactional video-on-demand (VOD), streaming and electronic sellthrough, increased 150% to $1.7 million from $670,000.

"We believe we've made significant progress in a mere seven months," Green said. "Our continued expansion into additional ancillary markets will position Image well against its competition."

Indeed, Image acquired the physical and digital distribution rights to more than 30 movies from Handmade Library, the studio formed in 1978 by late Beatle George Harrison.

The titles, which will be released at undisclosed times on DVD/Blu-ray Disc and electronically, include "Time Bandits," "The Long Good Friday," Oscar-nominated film noir "Mona Lisa, "A Private Function," black comedy "Withnail & I" and "How to Get Ahead in Advertising," among others.

Last month, Image inked a distribution agreement with New Films International and New Films Cinema for North America multichannel rights to all of the independent producer's theatrical releases.

The deal includes horror film "Chain Letter," starring Nikki Reed ("Twilight") and Betsy Russell ("Saw III," "Saw IV"). New Films Cinema will release "Letter" in the United States theatrically in October on more than 400 screens. Its previous theatrical release, "The Lightkeepers," starring Oscar winner Richard Dreyfuss and Golden Globe nominee Blythe Danner, opened in Los Angeles May 7 and played in 15 U.S. markets.

And just in time for Halloween, Image acquired the rights to horror film "Damned by Dawn," which is said to pay homage to the "Evil Dead" franchise and Hammer Horror films.
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