Revenue at Cinedigm Digital Cinema Company jumped 23 percent to $19.8 million for its third quarter, but its losses more than doubled due to restructuring.
The company, headed by Chairman and CEO Chris McGurk, has been busy selling off non-core assets and repositioning itself as a film distributor.
McGurk told TheWrap on Friday that the revenue jump was largely attributable to strong sales in the company’s software business and an increase in the number of theaters tapping the company for digital screen conversions.
However, net loss for the period deepened to $10.7 million, from a $4.2 million deficit in the same period last year. Cinedigm attributed the worsening red ink to one-time costs attributable to the sale of its physical and electronic distribution business to Technicolor.
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McGurk said that the moves are making Cinedigm stronger.
“When you look under the hood, the company is in a much stronger position today,” McGurk said. “When I took over, the company was trying to be all things to all people. Now we’re focused like a laser beam on a couple of core businesses and that is really a great recipe for growth and value creation.”
In particular, the company is bullish about a new deal with New Video that will allow it to buy and distribute independent films.
Cinedigm has been offering alternative content to theaters such as a 3D Dave Matthews Band concert and the Sarah Palin documentary "Undefeated,” but the pact with New Video will allow the company to offer soup to nuts distribution, from theatrical release to home entertainment, for moviemakers. The companies plan to release a film a month through the joint venture.
On the digital screen front, the company installed 768 new screens, representing the second highest installation quarter in its history.
The company’s stock fell 16.5 percent in trading on Friday to $1.72. Despite the dip, some analysts were impressed with Cinedigm’s focus on distribution and digital conversion.
“Cinedigm is positioned to benefit from the various revenue streams generated by a fully-digital world as exhibitors increasingly look to monetize their fixed assets through software and alternative content,” Eric Wold an analyst from B. Riley wrote following the company’s earnings call.