Image Entertainment losses shrink

Firm says it's committed to cutting operating costs

TORONTO -- Indie distributor Image Entertainment on Thursday reported a narrowed full-year 2009 loss, but no progress in securing new financing or a buyer in a worsening market.

Chatsworth, Calif.-based Image said it lost $1.8 million for the year to March 31 on revenue up 36% to $130.7 million, compared to a loss of $23 million on revenue of $95.8 million in 2008.

"Our industry continues to face numerous challenges," Image president Jeff Framer told an analyst call, as big box retailers reduce orders and return unsold stock during the current economic downturn.

Framer also said financial adviser Houlihan Lokey Howard & Zukin Capital continues to explore a range of strategic alternatives, including new liquidity or a sale transaction, after Image earlier this year failed to consummate merger talks with Nyx Acquisitions.

In the meantime, Image has had to amend its loan agreement with senior lender Wachovia Capital Finance Corp. to allow its auditors to include a qualified opinion in its upcoming annual report and regulatory filings to indicate substantial doubt about the company's ability to continue as a going concern.

Image will also continue to cut operating costs as it pursues a distribution strategy that focuses on cast-driven feature film product.
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