Independent Exhibitors Film Bulletin (1962)

FINANCIAL REPORT (Continued from Page 4) , 3%) and receipts (up 7% to $1.5 billion — highest since 1948)." As for 1962 earnings, the Bregman researcher believes they should be "relatively unchanged" from the $1.02 per share reported last year (excluding $2.86 per share from the sale of WMGM in January, '62). This, despite expenses of the largescale hotel-building program. "When this program is completed," notes the report, "management expects its 96 theatres and 6 hotels to provide an annual gross income of $90 to $100 million as compared to $35 to $40 million a year for the last three years." The concluding recommendation: "Short term (1-3 months) buy under 26 with objective of 30-35. Long term (2-year hold) accumulate position under 30 with objective 60 + ." Astor Borrows $2 Million Faced with the necessity of meeting producer royalties, Astor Pictures recently arranged for $2,000,000 in financing, and, buoyed by plans for streamlining and decentralizing the organization, now looks to a far smoother operational course. In announcing the financing, with Inland Credit Corp., president George Foley revealed that half of the $2,000,000 will be used for new product. The firm already has received $500,000 for operations, and another similar amount will be forthcoming in 60 to 90 days. The remaining $1,000,000 will be made available at a later date. '61 Net Down, but Magna Maps Films Magna Pictures Corp.'s net income for 1961 was sliced to one-quarter its size of a year earlier, chiefly because of lack of product, but president George P. Skouras told the annual stockholders meeting that the firm is planning more films in the Todd-AO process, and will place its next production before the cameras in the spring. In addition, the topper predicted that royalties for the use of the Todd-AO system in "Cleopatra" will exceed $1,000,000. He called the upcoming 20th-Fox blockbuster "the greatest attraction in the history of the motion picture business." Magna reported a net income of $275,553 for fiscal 1961, a steep decline from the $1,106,457 earned in I960. Gross income amounted to $2,714,297, compared to $5,925,732. Earnings of $900,000 were chalked up for the first half of this year, with most of the income attributable to "South Pacific." But, said Skouras, the picture is beginning to taper off, and more product is needed. The proposed new Todd -AO entry is a Biblical story, tentatively titled "In This Sign," and is budgeted between $3,500,000 and $4,000,000. Handicapping the company thus far in the production of new Todd-AO films, it was noted, has been the original indebtedness for the development and promotion of the process and the costs involved in making "Oklahoma." Pledged assets, therefore, have not been free to back up new loans. But revenue from "South Pacific" this year is expected to help erase the remaining debt of $1,300,000. In answer to a stockholder's question as to why Magna was not yet listed on the American Stock Exchange, it was explained that the company's prospectus had been turned down without sufficient hearing or reason on the day the exchange replaced its president and secretary. Neither "the climate nor the time was right," it was added. Cinerama on Upswing — Reuben Rose An "extremely volatile stock" with a "substantial, long-term upside potential" is the way Reuben Rose & Co.'s director of research Jerome R. Allen describes Cinerama in an exhaustive, five-page report on the growing film company. Allen makes an interesting point while pursuing his title, "Investor Skepticism." "Study the dossiers of many stocks that became Wall Street legends," he suggests, "consider them during their embryonic stoge . . . They all had one common denominator, investor skepticism. Is Cinerama understood?" As Ed Kean, of the Reuben Rose New York office, pointed out earlier in the year, when Cinerama rested at $18 (five years ago, it traded at $1.50, today, at about $15.50), "Though earnings are the crux of any stock analysis, the profit or loss potential of Cinerama is impossible (at this time) for me to estimate . . . Reason: They are in the Idea business." In detailing the history of the firm, Allen quotes from "The Widening World of Cinerama" (Film BULLETIN, Feb. 5, 1962): "Such was the tangled skein of interlocking and associated companies and groups in those days that no one was getting more than a tiny portion of the pie." According to the report, the turning point in Cinerama affairs came in March, 1961, when the company signed a co-production agreement with M-G-M (out of which, thus far, has come "The Wonderful World of the Brothers Grimm" and "How the West Was Won," the first two story features in the wide-screen process). Now, with those two big attractions ready to begin reaping really large revenue, and another (distribution) arrangement with United Artists on the books for two more important productions ("It's a Mad, Mad, Mad, Mad World" and "The Greatest Story Ever Told"), Cinerama is in a more easily "understood," and certainly more enviable position. Add to these assets the promising traveling theatre idea known as Itinerama, which is tentatively slated for a test in the U. S. (California) in a few months, and this roseate conclusion drawn from Reuben Rose's technical analyst Sylvan Epstein seems appropriate: "Over the past one-and-a-half years Cinerama has been an extremely volatile stock, characterized mainly by an unusual number of wide swings in both directions. The over-all pattern has been out of the ordinary, encompassing both higher highs and lower lows in what, oh the surface, may appear to be a lack of direction. However, the extreme low in the May decline was 9%, and after a thorough testing of this area in June, the subsequent rally carried as far as l9Yg before running out of steam. Considering that this was a $5 stock in February, 1961, this can hardly be construed as a bearish performance ... In my opinion, the current phase of consolidation will result in an upside move with a near-term objective of about $23. The long-term upside potential is substantial." MCA Continues to Buy Decca Continued purchases of Decca shares by new parent firm MCA and individual deals involving Cinerama president Nicolas Reisini (buy) and Warner Bros, executive vice president Bej. Kalmenson (sell) highlighted security transactions of officers and directors of film and theatre companies for the period Auiust 11 to September 10, 1962, as reported by the SEC. MCA acquired 10,000 shares of Decca Records capital stock to raise its total thus held to 1,278,315. Robin International, headed by Cinerama chief Reisini, bought 10,800 shares of the latter firm's common, raising its total to 326,850 . . . Kalmenson, in five separate transactions, disposed of 8,800 shares of Warner Bros., while Herman Starr, an officer, sold 2,000 shares. Leaving 17,000. Louis Lober, an officer of United Artists, sold 600 shares to leave 400 . . . Roger W. Hurlock, a director, continued to buy into Allied Artists, picking up 400 shares to give him a total of 34.000 . . . Stanley Warner officer and director Harry M. Kalmine bought 100 shares, raising his holdings to 800 . . . Allan Fromme, a director of Trans-Lux, acquired 500 shares, lifti lg his total to 2,50^. Raymond G. Pugh, an officer, purchased his first 100 shares of T-L. film BULLETIN October I, 1942 Page 15