Panavision Stock Falls Again; Off 52% for ’98

Shares of struggling movie camera provider Panavision Inc. plunged again Thursday, but the Woodland Hills-based company declined to comment on what, if anything, triggered the 12% drop.

The stock tumbled $1.63 a share to $12.38 in New York Stock Exchange composite trading, giving the shares a 52% drubbing for all of 1998.

Trading was exceptionally heavy. Panavision ordinarily is thinly traded because only 9% of its stock is publicly held, and only a few hundred shares trade on many days. But more than 77,000 shares changed hands Thursday.

The “unusual market activity” even prompted the NYSE to ask Panavision whether there were any developments that might explain the move. But Panavision doesn’t comment on “market activity or rumors,” the Big Board reported. The company likewise declined to comment to The Times.

Though still the top brand in professional movie cameras, Panavision is hobbling badly from operating losses and a heavy debt load that it’s been carrying for years.

The company also has gone through a series of owners during the last decade. It’s currently controlled by billionaire Ronald Perelman, who also controls Revlon Inc. and several other companies.

Through his Mafco Holdings Inc. unit, Perelman acquired 72% of Panavision last year from investment firm Warburg Pincus Capital Co.--which still retains 19% of the company--in a transaction valued at $600 million.

Panavision and some analysts say the company’s problems were compounded in 1998 when the major movie studios began filming fewer big-budget action or “event” pictures, such as “Titanic.” Those movies require additional and more complex equipment than more conventional movies, and the equipment is typically leased from Panavision for longer periods.

“There’s also been softness in television advertising production” that nicked Panavision’s results, said Bob Kricheff, a debt analyst with Credit Suisse First Boston in New York.

As a result, Panavision lost $55 million in the first nine months of 1998, contrasted with a $14-million profit a year earlier, while its revenue rose to $139.8 million from $124.7 million.

But Perelman expects to turn Panavision around with new senior management. In changes that took effect today, Panavision President John Farrand became chief executive, succeeding the retiring William C. Scott, who had led Panavision for the last decade. Perelman himself became Panavision’s chairman.

And despite Panavision’s debt, the company still has cash available to invest in new projects that might spur additional growth, Kricheff said. Perelman has recapitalized Panavision so that $159 million of its $465 million of long-term debt carries deferred interest payments, giving the company financial room to expand.

Panavision hopes to boost its results by developing new cameras and accessories so its overall camera “packages” carry higher profit margins, and to increase its inventory of gear so its growth isn’t inhibited by equipment shortages. It also wants to expand into more overseas markets.

But it remains an open question whether Panavision will be able to invest in the right areas that provide growth, which “is going to be the key to turning this thing around,” Kricheff said.

Panavision designs, builds and rents its equipment and says its gear is used in more than 80% of feature films and TV series shot on film. Movies such as “Titanic,” “Men in Black” and “Jerry Maguire” are but a few that used Panavision’s cameras.

The company was founded in 1954 by Robert Gottschalk, a camera technician who designed wide-angle lenses in the 1950s. He then started making movie cameras as well, and Panavision grew rapidly after it produced a standardized line of gear so that cinematographers didn’t have to mix and match various components.