Loss Widens at RHI

NEW YORK: With its revenues plummeting from $53.5 million a year ago to $9.5 million in the third quarter, RHI Entertainment saw its net loss widen from $3.5 million to $16.7 million.

“The third quarter was a difficult one for our business as our financial results were once again impacted by a challenging advertising environment,” said Robert Halmi, Jr., the president and CEO of RHI Entertainment. “Last quarter we noted that we were seeing incremental improvement of market conditions and this continues to be the case. However, despite the signs of stabilization, we continue to experience weakness in market prices and sales volume. While customers remain cautious and are opting to defer some of their programming decisions, we do expect to deliver approximately 27 original films for the full year, the majority of which will be delivered in November and December.”

Halmi continued, “Against this backdrop of soft market conditions, we are focused on tight management of our operations and cost structure. We are continuing to look at ways to improve the profitability of our production business, monetize our film library and reduce our SG&A. We remain committed to generating free cash flow which we intend to use to de-lever our business, albeit at a significantly slower rate than we had originally forecast. Looking ahead, we remain confident in RHI’s business model and believe our efforts to improve performance will pay dividends for our business in the quarters ahead.”

Library revenue at the company fell by 78 percent to $6.9 million, as a result of slower sales activity, pressure on prices and delayed transactions, as well as a reduction in revenues from the distribution of RHI content on ION Television—that agreement ended at the end of June. Production revenue decreased to $2.6 million from $21.8 million as a result of a smaller slate. The company delivered 35 films in 2008; that will be down to 27 this year.