THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, November 14, 1995 TAG: 9511140090
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: Medium: 69 lines
The successful syndication of ``America's Funniest Home Videos'' helped drive up third-quarter earnings for International Family Entertainment Inc., the Virginia Beach-based company said Monday.
IFE, parent of The Family Channel, said it posted net income of $6.23 million, or 17 cents a share, in the period ended Sept. 30 - up 13 percent from net income of $5.51 million, or 15 cents a share, in the same period last year.
Excluding an extraordinary gain of $3.45 million, or 6 cents a share, from the 1994 third quarter, IFE's earnings for the latest quarter would have jumped 67 percent. Last year's special gain was related to final accounting adjustments from the 1993 acquisition of MTM Entertainment and its parent company.
IFE's total revenues increased to $78 million in the third quarter, up 35 percent from $57.7 million in the same period of 1994.
The company's cash cow, the U.S. version of The Family Channel, continued to roll up higher profits. Double-digit percentage increases in ad and subscriber-fee revenues for the cable-TV network helped push it to an operating profit of $11.65 million in the latest period. That was up 1.7 percent from the year before.
The Family Channel's British and Latin American versions - launched in September 1993 and July 1995 - performed less well. They had operating losses of $2.98 million and $688,000, respectively, in the latest period.
Fit TV, formerly the Cable Health Club, posted a slightly higher operating loss of $1.33 million in the latest period. But its loss margin greatly narrowed as the health and fitness network's cable subscribership doubled over the past year to about 9.2 million households and revenues nearly quintupled to $660,000 in the latest quarter.
Larry W. Dantzler, IFE senior vice president and chief financial officer, said merchandise sales account for a majority of Fit TV's revenues.
IFE's live entertainment division - including a chain of music theaters and the Ice Capades - performed poorly. It posted an operating loss of $1.44 million in the latest period, up from a loss of $71,000 a year earlier. The prior year's results didn't include operations of the ice show, which IFE purchased earlier this year. It has since agreed to sell the show, but will retain the right to repurchase it and the acquiring company at a later date.
The brightest spot in the earnings report was IFE's MTM Entertainment division, which produces and syndicates TV shows. MTM's securing of the rights to syndicate reruns of the hit TV show ``America's Funniest Home Videos'' paid off in a big way in the latest quarter. It helped push MTM's operating income to $6.48 million in the third quarter from $2.49 million a year earlier. The show accounted for $17 million of MTM's $26 million in revenues for the latest period.
IFE President Timothy B. Robertson said in a statement, ``Our growth strategies will continue to revolve around using the financial strength of The Family Channel to nurture the development of businesses that will drive IFE's future growth.''
Also on Monday, IFE disclosed that it:
Has completed with Cinergi Pictures Entertainment Inc. co-production of the first feature film of its newly formed Family Channel Pictures. The movie, ``Amanda,'' about a young boy and a horse, is tentatively scheduled to be released in theaters next spring.
Has repurchased 1.13 million shares of its own Class B common stock in 1995 under a stock-buyback program. The average price for most of the stock was $12.56 a share, IFE said. On the New York Stock Exchange, IFE's Class B stock closed unchanged Monday at $19.37 a share. by CNB