March 7 (Bloomberg) -- Cinedigm Digital Cinema Corp., a provider of theater projection equipment, forecast operating profit of as much as $50 million from its software, services and content businesses during the next four to five years.
The company also is shopping for small film and television libraries it can distribute through agreements with Apple Inc.’s iTunes and streaming services such as Amazon.com Inc., Chief Executive Officer Chris McGurk said today on a conference call.
Cinedigm is focusing on the newer businesses as cinema operators complete their conversion to digital projection systems. The switch to digital from film will let New York-based Cinedigm provide live entertainment to theaters and give small production companies an inexpensive way to distribute their movies to cinemas and home-entertainment systems, McGurk said.
The company plans to build its independent-movie distribution business to 20 to 25 films a year, he said. Cinedigm has acquired about 15 films since it entered the market last year. One of those, “The Invisible War,” about sexual assault within the U.S. military, received an Oscar nomination for best documentary.
The forecast McGurk gave analysts and investors today is $40 million to $50 million in earnings before interest, taxes, depreciation and amortization, or Ebitda, for the units. For its fiscal year that ended in March 2012, Cinedigm reported adjusted Ebitda of $5.7 million for the so-called non-deployment units, and forecast $6.7 million to $7.7 million for the current year.
Cinedigm fell 4.4 percent to $1.52 at the close in New York. The shares have gained 8.6 percent this year, as the Nasdaq Composite Index has risen 7 percent.
Last week, the company announced a $195 million refinancing that lowered interest expenses, saving about $6 million in the first year. The new debt is secured by fees cinema operators pay Cinedigm for helping arrange loans to pay for installing digital equipment, McGurk said.
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