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Lorimar Reports $19.2-Million Loss

February 13, 1988|From Reuters

Lorimar-Telepictures an entertainment company best-known for producing such prime time favorites as "Dallas" and "Falcon Crest," said Friday that it lost $19.2 million in its third quarter due largely to problems at its beleaguered home video division.

Excluding the home video loss, it would have earned about $10.7 million from its other two main operations--television and film--in the third quarter ended Dec. 31.

The Culver City-based company is investigating its home video division and last year replaced the division's three principal officers, including former president Stuart Karl. It also sued them for allegedly breaching their fiduciary duties while operating the Karl-Lorimar Home Video division.

The company set aside about $22 million in the third fiscal quarter for the home video division, aimed at covering uncollectable receivables and writing down inventory.

The home video division sells videocassettes to distribution companies.

"It is extremely frustrating to have the strengths of our television and movie operations, as well as the progress we are making with our restructuring program, overshadowed by this problem," said Merv Adelson, chairman and chief executive.

Revenue for the quarter rose 30% to $255.1 million from $196.8 million.

The company lost $21.7 million in the year-ago third quarter.

A Lorimar spokeswoman said the company anticipates a profit in the fourth quarter.

The quarter will include a pretax profit of $16 million from the sale of its advertising agencies, Bozell, Jacobs, Kenyon & Eckhardt Inc. and Poppe Tyson Inc. The agencies are being sold to a management-led group.

Lorimar was established in 1969, and in February, 1986 it merged with Telepictures, a distribution and syndication company.

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