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The Documentary Channel has reached a multiyear pact with Image Entertainment for 16 acclaimed library films.
Image Entertainment Inc. (DISK)F2Q10 Earnings CallNovember 12, 2009; 4:30 pm ET<a
CHATSWORTH, Calif.--(BUSINESS WIRE)--Image Entertainment, Inc. (NASDAQ: DISK - News), a leading independent licensee and distributor of entertainment programming in
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CHATSWORTH, Calif., Nov 16, 2009 (BUSINESS WIRE) --
Image Entertainment, Inc. (NASDAQ: DISK), a leading independent licensee and distributor of entertainment programming in North America, announced today that on November 15, 2009 it entered into a Second Amendment Agreement (the "Amendment Agreement") with the holder (the "Holder") of its 8.875% senior convertible note due August 30, 2011 in the principal amount of $15,700,792.60 (the "Note"). On November 12, 2009, the Holder provided notice of its election to require the Company to make an installment payment of principal and accrued interest under the Note on November 15, 2009 in the amount of $4,043,767.
The Second Amendment Agreement amends the Note to further change the dates on which the Holder may request the next installment payment under the Note. Upon delivery of appropriate notice, the Holder may now require a $4 million principal payment (plus accrued interest) on December 11, 2009 rather than November 15, 2009. The $4 million principal payment may be further deferred until January 30, 2010 if the Company enters into a written agreement for the sale of all or substantially all of its assets on or prior to December 11, 2009, that, upon consummation of the transaction contemplated by the agreement, would result in a change of control of the Company. The January 30, 2010 installment payment date noted in the prior sentence may be accelerated to any date after December 11, 2009, but before January 30, 2010, if the written agreement has been terminated or otherwise ceases to be in full force and effect. The Second Amendment Agreement rescinded the November 12, 2009 payment notice provided by the Holder thereby avoiding a default under the Note. Pursuant to the Second Amendment Agreement, the Company agreed to reimburse the Holder for the actual and anticipated legal fees and expenses of its counsel and any third party advisors incurred through December 11, 2009, such fees not to exceed an aggregate of $150,000. The reimbursement includes, without limitation, those fees and expenses incurred in connection with the review and negotiation of the Second Amendment Agreement and in connection with potential financing or sales transactions that may grow out of the Company's evaluation of strategic alternatives. The Company paid the first $100,000 installment on November 16, 2009. The remaining $50,000 must be paid immediately upon the Company's receipt of a request from the Holder accompanied by a reasonably detailed description as to how the first installment was applied. The Company's failure to pay the remaining $50,000 will constitute an event of default under the Note. Any unused portion of the fees must be returned to the Company.
The Holder may require additional $4 million principal payments (plus accrued interest) on January 30, 2010, January 30, 2011 and July 30, 2011. Accordingly, if the Holder makes the appropriate notice with respect to the next installment payment and the Company is entitled to defer the payment until January 30, 2010 as permitted by the Second Amendment Agreement and the Holder makes the appropriate notice with respect to the January 30, 2010 installment payment, the Company could have two $4 million principal payments (plus accrued interest) due on January 30, 2010.
About Image Entertainment:
Image Entertainment, Inc. is a leading independent licensee and distributor of entertainment programming in North America, with approximately 3,200 exclusive DVD titles and approximately 340 exclusive CD titles in domestic release and approximately 400 programs internationally via sublicense agreements. For many of its titles, the Company has exclusive audio and broadcast rights and, through its subsidiary, Egami Media, Inc. has digital download rights to approximately 2,000 video programs and over 300 audio titles containing more than 5,100 individual tracks. The Company is headquartered in Chatsworth, California. For more information about Image Entertainment, Inc., please go to www.image-entertainment.com.
Forward-Looking Statements:
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to, among other things, the Company's goals, plans and projections regarding the Company's financial position, results of operations, market position, product development and business strategy. These statements may be identified by the use of words such as "will," "may," "estimate," "expect," "intend," "plan," "believe," and other terms of similar meaning in connection with any discussion of future operating or financial performance or other events or developments. All forward-looking statements are based on management's current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations.
These factors include, but are not limited to, (a) the Company's ability to continue as a going concern; (b) the Company's ability to service its principal and interest obligations on its outstanding debt or otherwise renegotiate or refinance such outstanding debt, including the potential December 11, 2009 and January 30, 2010 principal and interest payments on its convertible note, which renegotiation may not be successful and refinancing may not be available on acceptable terms, if at all, which may trigger defaults under its other debt agreements, create liquidity issues, potentially force the Company to file for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code and prevent the Company from continuing as a going concern; (c) the Company's limited funds and the Company's inability to raise additional funds on acceptable terms or at all; (d) the Company's ability to borrow against the Company's revolving line of credit; (e) the Company's ability to secure media content on acceptable terms; (f) the Company's DVD manufacturer continuing to manufacture and fulfill orders to Company customers while the Company is past due on its payables to such manufacturer; (g) the ability of the Company's common stock to continue trading on The NASDAQ Stock Market; (h) the performance of business partners upon whom the Company depends upon; (i) changes in the retail DVD and digital media and entertainment industries; (j) changing public and consumer taste and changes in customer spending patterns; (k) decreasing retail shelf space for the Company's industry; (l) further sales or dilution of the Company's equity, which may adversely affect the market price of the Company's common stock; (m) changes in the Company's business plan; (n) heightened competition, including with respect to pricing, entry of new competitors, the development of new products by new and existing competitors; (o) changes in general economic conditions, including the performance of financial markets and interest rates; (p) difficult, adverse and volatile conditions in the global and domestic capital and credit markets; (q) claims that the Company infringed other parties' intellectual property; (r) changes in accounting standards, practices or policies; and (s) adverse results or other consequences from litigation, arbitration or regulatory investigations.
For further details and a discussion of these and other risks and uncertainties, see "Forward-Looking Statements" and "Risk Factors" in the Company's most recent Annual Report on Form 10-K, and the Company's most recent Quarterly Reports on Form 10-Q. Many of the factors that will determine the outcome of the subject matter of this press release are beyond Image Entertainment's ability to control or predict. Actual results for the periods identified may differ materially from management's expectations. Unless otherwise required by law, the Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE: Image Entertainment, Inc.
The Honig Company, Inc. Steve Honig, 818-986-4300 press@honigcompany.com
Tags: accounting annual report bankruptcy business california consumer debt distributor dvd election entertainment equity grants interest rates law legal manufacturer market media nasdaq north america note product development programming property refinancing retail sales securities standards video
Companies: Image Entertainment, Inc. (DISK)
Nov 13, 2009 (Wall Street Horizon via COMTEX) --
Image Entertainment (DISK)
Expected next earnings release: Announcement date: 2/11/2010 - After Market Earnings Quarter: Q3 Announcement Status: Unconfirmed
Expected next investor conference call information: Conference Call Date: 11/12/2009 Conference Call Time (ET): 4:30 PM Conference Call URL: http://www.image-entertainment.com
Tags: conference corporate earnings entertainment market
Companies: Image Entertainment, Inc. (DISK)
CHATSWORTH, Calif., Nov 12, 2009 (BUSINESS WIRE) --
Image Entertainment, Inc. (NASDAQ: DISK), a leading independent licensee and distributor of entertainment programming in North America, today reported financial results for its second fiscal quarter ended September 30, 2009.
"We are pleased to have delivered operating income in spite of the economic slow down and Image's capital challenges. Our efforts to reduce costs have contributed stronger results while robust demand for our exclusive Criterion programming and the success of our feature film Management drove revenues." said Jeff M. Framer, President and Chief Financial Officer of Image Entertainment. "We continue to work with our financial advisors to explore our strategic alternatives. However, the holder of our Senior Secured Convertible Note in the principal amount of $15.7 million has exercised its right to demand a payment of $4,043,767 on November 15, 2009. We do not have the funds necessary to make the payment. Failure to make the payment would constitute an event of default under the Note and entitle the holder to accelerate the Note. It would also constitute default under our other debt agreements, including a Loan and Security Agreement with Wachovia Capital Finance Corporation (Western). We are in discussion with the holder of the Note but cannot predict whether we will be successful in avoiding a default under the Note."
Financial Summary - Second Quarter of Fiscal 2010, Ended September 30, 2009
-- Net revenues decreased 7.9% to $29,840,000, from net revenues of $32,389,000 for the three months ended September 30, 2008. The reduction in revenues was due to a weaker new release schedule and what we believe to a continuing negative impact on the Company's revenues from the current economic slowdown. -- Domestic DVD revenues decreased 12.6% to $24,393,000, from $27,909,000 for the three months ended September 30, 2008.
-- Domestic Blu-ray revenues increased 150.6% to $2,561,000, from $1,022,000 for the three months ended September 30, 2008.
-- Digital distribution revenues increased 8.7% to $1,060,000, from $975,000 for the three months ended September 30, 2008.
-- Broadcast revenues decreased 47.9% to $612,000, from $1,174,000 for the three months ended September 30, 2008.
-- Gross profit margins were 25.5%, up from 24.8% for the three months ended September 30, 2008.
-- Selling expenses were 8.3% of net revenues, down from 12.5% of net revenues for the three months ended September 30, 2008, primarily due to reduced advertising and promotional expenditures as well as reduced personnel costs.
-- General and administrative expenses decreased 1.7% to $3,533,000, from $3,594,000, for the three months ended September 30, 2008. Costs incurred evaluating strategic alternatives during the September 2009 quarter totaled $346,000.
-- Earnings from operations were $1,582,000, up from $396,000 for the three months ended September 30, 2008.
-- Net interest expense was $606,000, down from $863,000 for the three months ended September 30, 2008.
-- Loss on extinguishment of debt was $2,181,000. Results from the July 30, 2009 amendment of the Company's senior secured convertible note, which, among other things, increased the outstanding principal under the convertible note to $15,701,000, from $13,000,000, increased the interest rate to 8.875%, from 7.875% and provided for a minimum 90-day extension to the $4 million bi-annual principal payment originally due on July 30, 2009.
-- Other expense of $405,000 represents a noncash expense resulting from the change in fair value of a warrant and embedded derivatives.
-- Net loss was $1,614,000 ($.07 per diluted share), compared to net loss of $465,000 ($.02 per diluted share), for the three months ended September 30, 2008.
-- On October 28, 2009, the Company further amended its debt senior secured convertible note with Portside extending the next $4 million principal installment from October 30, 2009 to November 15, 2009 or, in certain circumstances, November 30, 2009.
Best-selling DVD releases for the quarter included Management, Terry Fator: Live from Las Vegas, Edge of Love, and Shark Week: The Great Bites Collection.
Financial Summary -Fiscal 2010 Six Months Ended September 30, 2009
-- Net revenues decreased 17.6% to $53.5 million, compared to $65.0 million for the first six months of fiscal 2009.
-- Gross margins were 23.1%, compared to 23.6% for the first six months of fiscal 2009.
-- Selling expenses were $6.9 million, or 12.9% of net revenues, compared to $7.8 million, or 12.0% of net revenues, for first six months of fiscal 2009.
-- General and administrative expenses increased 2.8% to $7.8 million, from $7.6 million for the first six months of fiscal 2009.
-- Loss from operations was ($2.3 million), compared to earnings from operations of $15,000 for the first six months of fiscal 2009.
-- Net interest expense decreased to $1.2 million, compared to $1.7 million for the first six months of fiscal 2009.
-- Other income was $1.1 million, compared to $3.0 million for the first six months of fiscal 2009. -- $1.5 million in business interruption fees received in accordance with a merger agreement that was terminated in April 2009; and
-- $333,000 in noncash expense resulting from the change in fair value of a warrant and embedded derivatives for the six months ended September 30, 2009.
-- Net loss was ($4.6 million), or ($0.21) per diluted share, compared to net earnings of $1.2 million, or $0.06 per diluted share for the first six months of fiscal 2009.
Fiscal Year 2010 Guidance
At this time, the Company is not providing quarterly or annual revenue guidance for fiscal 2010.
Corporate Conference Call
Image Entertainment's management will host a conference call today, November 12, at 4:30 p.m. ET to review the fiscal 2010 second quarter financial results. Image executive management will be on the call to discuss these results and take part in a Q & A session. The call can be accessed by dialing (877) 718-5092 and requesting to join the conference call by stating the passcode 6834409, or by webcast at www.image-entertainment.com. Dial-ins begin at approximately 4:20 p.m. Eastern time, or at any time during the conference call. International participants please dial (719) 325-4817.
A replay of the conference call will be available until November 25, 2009 by dialing (888) 203-1112 and entering the following passcode: 6834409. International participants please dial (719) 457-0820 using the same passcode.
About Image Entertainment:
Image Entertainment, Inc. is a leading independent licensee and distributor of entertainment programming in North America, with approximately 3,200 exclusive DVD titles and approximately 340 exclusive CD titles in domestic release and approximately 400 programs internationally via sublicense agreements. For many of its titles, the Company has exclusive audio and broadcast rights and, through its subsidiary, Egami Media, Inc. has digital download rights to approximately 2,000 video programs and over 300 audio titles containing more than 5,100 individual tracks. The Company is headquartered in Chatsworth, California. For more information about Image Entertainment, Inc., please go to www.image-entertainment.com.
Forward-Looking Statements:
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to, among other things, the Company's goals, plans and projections regarding the Company's financial position, results of operations, market position, product development and business strategy. These statements may be identified by the use of words such as "will," "may," "estimate," "expect," "intend," "plan," "believe," and other terms of similar meaning in connection with any discussion of future operating or financial performance or other events or developments. All forward-looking statements are based on management's current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations.
These factors include, but are not limited to, (a) the Company's ability to continue as a going concern, (b) the Company's ability to service its principal and interest obligations on its outstanding debt or otherwise renegotiate or refinance such outstanding debt, including the November 15, 2009 principal and interest payment on its convertible note, which renegotiation may not be successful and refinancing may not be available on acceptable terms, if at all, which may trigger defaults under our other debt agreements, create liquidity issues, potentially force the Company to file for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code and prevent the Company from continuing as a going concern, (c) the Company's limited funds and the Company's inability to raise additional funds on acceptable terms or at all, (d) the Company's ability to borrow against the Company's revolving line of credit, (e) the Company's ability to secure media content on acceptable terms, (f) the Company's DVD manufacturer continuing to manufacture and fulfill orders to Company customers while the Company is past due on its payables to such manufacturer, (g) the ability of the Company's common stock to continue trading on The NASDAQ Stock Market, (h) the performance of business partners upon whom the Company depends upon, (i) changes in the retail DVD and digital media and entertainment industries, (j) changing public and consumer taste and changes in customer spending patterns, (k) decreasing retail shelf space for the Company's industry, (l) further sales or dilution of the Company's equity, which may adversely affect the market price of the Company's common stock, (m) changes in the Company's business plan, (n) heightened competition, including with respect to pricing, entry of new competitors, the development of new products by new and existing competitors, (o) changes in general economic conditions, including the performance of financial markets and interest rates, (p) difficult, adverse and volatile conditions in the global and domestic capital and credit markets, (q) claims that the Company infringed other parties' intellectual property, (r) changes in accounting standards, practices or policies, and (s) adverse results or other consequences from litigation, arbitration or regulatory investigations.
For further details and a discussion of these and other risks and uncertainties, see "Forward-Looking Statements" and "Risk Factors" in the Company's most recent Annual Report on Form 10-K, and the Company's most recent Quarterly Reports on Form 10-Q. Many of the factors that will determine the outcome of the subject matter of this press release are beyond Image Entertainment's ability to control or predict. Actual results for the periods identified may differ materially from management's expectations. Unless otherwise required by law, the Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
[Tables Follow]
IMAGE ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 2009 and March 31, 2009
ASSETS
(In thousands) September 30, 2009 March 31, 2009
Current assets: (unaudited) (audited)
Cash and cash equivalents $ 273 $ 802
Accounts receivable, net of allowances of 26,968 19,376
$8,701 - September
30, 2009;
$10,217 - March 31, 2009
Inventories 13,417 14,629
Royalty and distribution fee advances 12,785 16,570
Prepaid expenses and other assets 1,068 1,545
Total current assets 54,511 52,922
Noncurrent inventories, principally production costs 2,726 2,506
Noncurrent royalty and distribution advances 16,348 21,188
Property, equipment and improvements, net 1,633 2,161
Goodwill 5,715 5,715
Other assets 188 221
$ 81,121 $ 84,713
IMAGE ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 2009 and March 31, 2009
LIABILITIES AND SHAREHOLDERS' EQUITY
(In thousands, except share data) September 30, 2009 March 31, 2009
Current liabilities: (unaudited) (audited)
Accounts payable $ 12,662 $ 12,761
Accrued liabilities 4,914 5,626
Accrued royalties and distribution fees 17,860 20,777
Accrued music publishing fees 6,242 6,222
Deferred revenue 6,654 5,035
Revolving credit facility 12,709 10,933
Current portion of long-term debt, net of debt discount 10,026 10,094
Total current liabilities 71,067 71,448
Long-term debt, net of current portion 7,701 5,663
Other long-term liabilities, less current portion 1,420 2,105
Total liabilities 80,188 79,216
Commitments and Contingencies
Stockholders' equity:
Preferred stock, $.0001 par value, 25 million shares authorized; -- --
none issued and outstanding
Common stock, $.0001 par value, 100 million shares authorized; 2 2
21,856,000 issued and outstanding at September 30, 2009 and March
31, 2009, respectively
Additional paid-in capital 52,773 52,693
Accumulated deficit (51,842 ) (47,198 )
Net stockholders' equity 933 5,497
$ 81,121 $ 84,713
IMAGE ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the Three Months Ended September 30, 2009 and 2008
Three Months Ended
(In thousands, except per share data) September 30, 2009 September 30, 2008
NET REVENUES $ 29,840 100.0 % $ 32,389 100.0 %
OPERATING COSTS AND EXPENSES:
Cost of sales 22,245 74.5 24,356 75.2
Selling expenses 2,480 8.3 4,043 12.5
General and administrative expenses 3,533 11.8 3,594 11.1
28,258 94.7 31,993 98.8
EARNINGS FROM OPERATIONS 1,582 5.3 396 1.2
OTHER EXPENSES (INCOME):
Interest expense, net 606 2.0 863 2.7
Loss on extinguishment of debt 2,181 7.3 --
Other expense (income) 405 1.4 (46 ) (0.1 )
3,192 10.7 817 2.5
LOSS BEFORE PROVISION FOR INCOME TAXES (1,610 ) (5.4 ) (421 ) (1.3 )
PROVISION FOR INCOME TAXES 4 0.0 44 0.1
NET LOSS $ (1,614 ) (5.4 )% $ (465 ) (1.4 )%
NET LOSS PER SHARE:
Net loss - basic and diluted $ (.07 ) $ (.02 )
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted 21,856 21,856
IMAGE ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the Six Months Ended September 30, 2009 and 2008
Six Months Ended
(In thousands, except per share data) September 30, 2009 September 30, 2008
NET REVENUES $ 53,524 100.0 % $ 64,966 100.0 %
OPERATING COSTS AND EXPENSES:
Cost of sales 41,146 76.9 49,604 76.4
Selling expenses 6,917 12.9 7,765 12.0
General and administrative expenses 7,796 14.6 7,582 11.7
55,859 104.4 64,951 100.0
EARNINGS (LOSS) FROM OPERATIONS (2,335 ) (4.4 ) 15 0.0
OTHER EXPENSES (INCOME):
Interest expense, net 1,235 2.3 1,738 2.7
Loss on extinguishment of debt 2,181 4.1 --
Other income (1,136 ) (2.1 ) (3,016 ) (4.6 )
2,280 4.3 (1,278 ) (2.0 )
EARNINGS (LOSS) BEFORE PROVISION FOR INCOME TAXES (4,615 ) (8.6 ) 1,293 2.0
PROVISION FOR INCOME TAXES 29 0.1 62 0.1
NET EARNINGS (LOSS) $ (4,644 ) (8.7 )% $ 1,231 1.9 %
NET EARNINGS (LOSS) PER SHARE:
Net earnings (loss) - basic and diluted $ (.21 ) $ .06
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted 21,856 21,856
SOURCE: Image Entertainment, Inc.
The Honig Company, Inc. Steve Honig, 818-986-4300 press@honigcompany.com
Tags: accounting advertising annual report bankruptcy business california conference consumer corporate debt deficit distributor dvd earnings entertainment equity executive film financial results financial summary interest rates law manufacturer market media merger music nasdaq north america note president product development programming property publishing refinancing retail revenue sales schedule securities security standards taxes video
Companies: Image Entertainment, Inc. (DISK)
Nov 12, 2009 (Wall Street Horizon via COMTEX) --
Image Entertainment (DISK)
Expected next earnings release: Announcement date: 11/12/2009 - After Market Earnings Quarter: Q2 Announcement Status: Verified
Expected next investor conference call information: Conference Call Date: 11/12/2009 Conference Call Time (ET): 4:30 PM Conference Call URL: http://www.image-entertainment.com
Tags: conference corporate earnings entertainment market
Companies: Image Entertainment, Inc. (DISK)
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Abstract: The Scientology critic known as Wise Beard Man returned to YouTube this week after successfully filing counter-notifications to copyright claims that had earlier been made against his account.
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Image Entertainment - Theatrical Film/Movie Distribution Company based in Los Angeles, CA
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