Vidmark aims to broaden its movie industry involvement with first public stock offering.

Vidmark aims to broaden its movie industry involvement with first public stock offering

Vidmark Inc., a Santa Monica-based film distribution company, filed with the Securities and Exchange Commission late last month to go public. Vidmark, its directors and two major stockholders registered with the SEC to sell 1.5 million shares of Vidmark for between $11 and $12.50 a share.

Underwritten by San Francisco-based Sutro & Co. Inc. and St. Petersburg, Fla.-based Raymond James & Associates Inc., the initial public offering is pending SEC approval. According to its preliminary prospectus dated May 24, a total of 1.3 million shares will be offered by the company and 200,000 shares will be offered to its officers, directors and major stockholders.

"The management at Vidmark has demonstrated since 1985 an ability to run an impressive little film distribution company," said Lloyd Greif, 34, vice chairman and managing director of corporate finance at Sutro. Greif is also a director nominee at Vidmark. "Their strategy has been to emphasize a strong position in domestic home video and foreign distribution."

The company's roadshow for the offering will end this week. It hopes to receive final SEC approval later this month or early in July, a spokesman for Sutro said. If successfully completed, the initial public offering is expected to raise an estimated $14.3 million to $16.25 million.

Mark Amin, 40, Vidmark founder and chairman, has registered to sell 96,000 of his shares of the company, reducing his stake from 48 percent to 34 percent.

Vidmark is an international distributor of motion pictures, primarily engaged in distributing videocassettes domestically and licensing films to international markets. Since its inception in August, 1985, Vidmark has marketed 122 films, concentrating on quirky low-budget titles that the major studios cannot normally make money marketing. Included in the Vidmark portfolio are such titles as "Scandal," starring Raquel Welch, "Backstreet Dreams," starring Brooke Shields and "Hawken's," starring Peter Fonda. Earlier this year, Vidmark changed direction slightly, purchasing the rights to some major critical successes, including "Romero," starring Raul Julia, and "Rosalie Goes Shopping," starring Marianne Sagebrecht.

According to the prospectus, Vidmark plans to use most of the money raised through the offering to "acquire a broader range of rights to motion pictures with greater commercial appeal." The money would also be used for general working capital purposes and to reduce the $1.7 million outstanding balance of Vidmark's $5 million revolving credit facility, according to the prospectus.

For the nine months ended March 31, 1990, Vidmark reported revenues of $29.5 million and net income of $3.8 million ($1 a share), compared with revenues of $14.4 million and net income of $1.8 million (47 cents a share) for the first nine months of 1989. The company lists no long-term debt.

With the rights to 165 low-budget movies locked up, 43 of which have yet to be released, Vidmark lists shareholders equity at $9.2 million.

The company has loads of competition in the movie distribution business, according to the prospectus, including the home video divisions of Paramount Communications Co., MCA Inc., The Walt Disney Co. and Time Warner Inc. - all have natural access to the distribution rights of feature films produced by their parent companies.

Independent distributors Media Home Entertainment, International Video Entertainment (IVE), MCEG/Virgin and Prism Entertainment also compete for distribution deals in the $3.4 billion home video market.

Earlier this year, Vidmark named Roger A. Burlage, 47, as director, president and chief executive officer. The former president and chief operating officer of Los Angeles-based New World Pictures Ltd., Burlage is named as a defendant in Los Angeles Superior Court, alleging that he and other officers of New World violated disclosure and anti-fraud provisions of federal securities laws.

Vidmark executives are in their SEC quiet period and could not comment on the offering.