NEW YORK — Overseas Film Group reported a $1.2 million net loss equal to 21¢ a share in the second quarter following writedowns on its films “The Designated Mourner,” “johns” and “Jerusalem.”
The worldwide independent distributor, which releases domestically through its First Look Pictures unit, also said that it would be shifting its strategy.
The net loss in the latest quarter compares with pro forma net income of $619,217 or 15¢ a share in the comparable 1996 period. The existing publicly traded corporation did not come into being until October 1996.
Revenue fell 56% in the latest quarter to $4 million from $9.2 million.
In response to the disappointing financial results, Overseas said that it intends to move away from providing minimum guarantees and other financing when it represents the majority of a film’s final production costs.
Instead, the company plans to step up its involvement in the “gap” financing market, where financial institutions provide financing to producers based on Overseas’ estimates of the value of unsold territory rights. It also plans to seek more co-financing ventures.
In announcing its second-quarter results, Overseas disclosed that it reached an agreement with its lenders, Coutts & Co. and Berlin Bank’s London branch, to extend the expiration date of the company’s credit facility to Sept. 30 from May 9.
As part of this restructuring, Overseas co-chairmen and co-CEOs Robert and Ellen Little — the company’s majority stockholders — are expected to defer receipt of payments under a $2 million promissory note they received in the October 1996 merger that created the currently publicly traded corporation.