Genius revenue up, but catalog DVD sales slowed in Q4
Distributor reports lower than expected earnings
By Susanne Ault -- Video Business, 3/17/2008
MARCH 17 | Blaming some weakening in its DVD sales, Genius Products LLC posted lower than expected earnings in its 2007 fourth quarter and full year.
For the three months ended Dec. 31, Genius recorded a net loss of $12.2 million.
Quarterly net revenue totaled $185 million, a 144% lift from last year’s comparable frame.
For the year, Genius incurred a $17.7 million net loss. Total 2007 net revenue jumped 72%, to $474 million.
The distributor, majority-owned by The Weinstein Co., did not provide year-to-year comparisons for its quarterly or full-year net income results.
Trevor Drinkwater, president and CEO for Genius Products Inc., which holds a minority stake in TWC’s Genius Products LLC, said earnings were hurt by slowing December catalog sales, as well as a postponement of straight-to-DVD releases originally intended for 2007. Genius Products LLC additionally canceled an unspecified major retail program, likely curbing the performance of certain DVDs.
For the year, Genius shipped more than 60 million DVD units, spanning 350 titles.
Going forward, the company is optimistic that its recent expansion into the videogames business, among other initiatives, will improve business in 2008.
Moving into higher-margin videogames, direct-response and service agreements should represent 6% of 2008 revenue, according to Genius.
At the same time, the company has shifted away from non-branded DVD distribution, which includes some of its budget product. These releases generated only 2% of its 2007 net revenue.
The company also is planning to break into Canadian distribution.
“While not discounting the miss in guidance, we had an extremely successful fourth quarter and full year on a number of measures,” said Drinkwater. “We have now completed the build-out of our platform and can focus on driving efficiencies, cost savings and margin improvement. Third, we began the expansion into new businesses such as videogames and digital commerce.”
The Weinstein Co. predicts a strong slate of catalog and direct-to-DVD titles this year, which will be distributed by Genius. TWC expects 10% revenue growth in 2008 over the prior year.
Genius projects to deliver net revenue in the range of $600 million and $700 million in 2008.
