Genius Products LLC reports first profitable quarter
Supplier co-owner still in the red
By Susanne Ault -- Video Business, 8/13/2007
AUG. 13 | Genius Products LLC, the video distributor controlled by The Weinstein Co., posted its first profit during the quarter ended June 30, showing $2.1 million in net income.
That stemmed the red ink that had been flowing since July 2006, when TWC finalized its 70% ownership of Genius LLC. Seven-year-old specialty video distributor Genius Products Inc. owns the remaining 30% of the venture.
No year-to-year comparisons are available, but Genius LLC generated a $2.4 million net loss in first-quarter 2007.
Boosted primarily by such TWC feature DVD releases as Hannibal Rising, Bobby and Arthur and the Invisibles, Genius LLC scored record revenue of $113 million for the period, a 36% rise from the prior quarter. Sales of World Wrestling Entertainment, Sesame Street, Discovery Kids and VeggieTales branded DVDs were other highlights.
“The big influence for the quarter is that we are now fully releasing titles from WWE, Sesame Street and Classic Media [home to popular faith-based line VeggieTales], where this is the first quarter we have all of these deals fully operating,” said Trevor Drinkwater, Genius CEO. “The rights to these branded titles were all acquired last year.”
Based on its upbeat performance, Genius has adjusted upward its full-year revenue range to $750 million to $800 million.
Genius Products Inc., meanwhile, continued to tally a quarterly loss, posting a $1.3 million net loss for the second quarter. But strengthening returns from its stake in Genius LLC narrowed that loss from $17.9 million in red ink recorded during the comparable 2006 period.
Genius LLC is currently releasing about 75 to 80 DVDs a quarter, representing a mix of non-Weinstein brands and TWC films and properties.
Genius management is touting a great back half of the year, eyeing such high-profile TWC theatricals in the DVD pipeline as 1408, Sicko, The Nanny Diaries and Last Legion.
Also, Genius confirmed the May 18 dismissal of a lawsuit brought by indie retailers against the company and TWC. The retailers accused the companies of unfair business practices as it related to Genius’ exclusive distribution of TWC titles at Blockbuster in the rental channel.
“We are very pleased with the performance of the exclusivity of our titles at Blockbuster, and how our relationship with Blockbuster is developing,” said Drinkwater.
Additionally, Genius secured a three-year, $70 million credit facility, provided from a consortium of banks including Société Générale. This facility will help diversify Genius’ portfolio and will be used to provide working capital to finance content acquisition, production and distribution of non-TWC properties.
