CIDM Cinedigm Corp
Sector financial performance:
This company, which primarily markets, sources, and distributes movie and TV content through digital, physical, and online platform, has been grouped into movie distributors sector in admission to amusement industry.
Generally, changes in technology and consumers’ preference/habits have resulted in quick reduction in demand for physical movie and TV content products.
Changes in theatre movie distribution system/technology have resulted in total loss of customers for some of companies in this sector.
It seems that the demand for film distribution system (phase I system) of this company has ended as 10 years’ agreement of this company ended with its client of theatres. There is downward trend seen in demand for its phase II deployment system. The demand for physical form of content packed by this company has been weak and continuingly declined in large pace in the past several years.
The first nine months fiscal 2018 compared with the same period of 2017
Net revenue decreased 29% including:
Phase I development revenue decreased 51% primarily due to expired deployment agreements.
Phase II development revenue decreased 6%
Content distribution revenue decreased 17% due to decrease in distribution volume.
The fiscal 2017 compared with 2016 (ended Mar 31 2017)
Net revenue decreased 13.5% including:
Phase I development revenue decreased 12% primarily due to expired deployment agreements.
Phase II development revenue increased 2.3%
Content distribution revenue decreased 22.2% due to decrease in distribution volume.
Fiscal 2016 compared with fiscal 2015
Net revenue decreased 1% including:
Phase I development revenue increased 0.9% primarily due to more wide titles released.
Phase II development revenue decreased 0.7%
Content distribution revenue decreased 2.6% due to decrease in distribution volume.
Its gross margin (including depreciation) has been up from about 29% to 37% of 2017 due to faster decrease in depreciation and direct deployment related costs. However, its SG&A as percentage of sales increased quickly as a result of decreased revenue and increased management costs, its operating margin was kept not changes at about -3% in 2017.
This company is having price/sales ratio of 0.8. We think that its stock is being relatively overvalued.
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