Sound Source Posts Hefty Loss Despite Sales Boost

Despite a 72% increase in product sales for fiscal 1996, Sound Source Interactive in Westlake Village reported a net loss for the year.

In line with its expectations, the company reported a loss of $4.47 million, or $2.44 per share, for the fiscal year ended June 30. The results include a charge of $1.4 million associated with loan costs and interest expense related to debt financing, plus a charge of $663,421 for bad debts from the company’s former distributor.

Product sales increased to $2.16 million, from $1.25 million in fiscal 1995, while overall revenues increased 5% to $2.26 million.

Sound Source develops and markets educational and entertainment software. The products are based on the content of motion pictures and longstanding television series under agreement with major entertainment studios.

Company officials said the increase in sales was attributable to the release of seven new products, including Interactive MovieBooks for “Free Willy 2,” “Babe: A Little Pig Goes a Long Way” and “The Adventures of Batman and Robin.”

Contributing to the current-year loss were costs associated with the development and marketing of the new products.

“Although fiscal 1996 was a difficult year for the company, we have made significant progress in attaining our long-term goals, including funding, securing distribution and diversifying our product line,” said Vincent J. Bitetti, chairman of the board and chief executive officer.

“Our first step was signing a distribution agreement with Simon & Schuster Interactive Distribution Services and bringing a software-industry sales veteran in-house to supplement the efforts,” Bitetti said. “The second step was to effect our initial public offering on July 2. Finally, the last step was building an interactive video-game division, which was put into place in July.”

Sound Source recently announced the hiring of Steven Kleckner as vice president of sales. He will be responsible for sales and distribution in North America and will manage the company’s relationship with Simon & Schuster.