SANTA MONICA, Calif. and VANCOUVER, British Columbia, Aug. 8
/PRNewswire-FirstCall/ -- Lionsgate (NYSE: LGF), the leading next generation
filmed entertainment studio, continued its strong growth momentum, reporting
revenues of $298.5 million, net income of $7.1 million and EBITDA of positive
$13.2 million for the first quarter of fiscal 2009 (period ended June 30,
2008), the Company announced today. EBITDA is defined as earnings before
interest, income tax provision, depreciation and equity interests. Lionsgate
senior management noted that the 50% revenue growth was driven by double-digit
revenue increases in all of its core businesses, including motion pictures,
television programming, home entertainment, library, international and
digital.
Net income of $7.1 million in the quarter translated into basic net income
per common share of $0.06 based on 118.4 million weighted average common
shares outstanding compared to a net loss of $53.1 million or basic loss per
common share of $0.45 based on 117.1 million weighted average common shares
outstanding in the prior year's first quarter. The $60 million improvement in
profitability over the prior year's first quarter was primarily attributable
to lower theatrical P&A costs expensed in the quarter in addition to strong
revenue gains throughout the Company's core businesses.
"Our robust operations, coupled with the recent close of our $340 million
five-year revolving credit facility with JP Morgan and our strong balance
sheet, positions us to continue growing our business despite the current
difficult market environment," said Lionsgate Co-Chairman and Chief Executive
Officer Jon Feltheimer. "As a result, we expect to continue our double-digit
revenue growth this year, with a view toward generating significant positive
EBITDA and continued double-digit revenue growth in fiscal 2010."
The Company's filmed entertainment backlog also grew to a record $441.2
million at June 30, 2008. Filmed entertainment backlog represents the amount
of future revenue contracted but not yet recorded from the licensing of films
and television product for television exhibition and in international markets.
Overall motion picture revenue for the quarter was $257.4 million, an
increase of 51.1% from $170.3 million in the prior year's first quarter, due
to growth throughout the theatrical, DVD, television from motion pictures,
international and Mandate Pictures segments of the business.
Theatrical revenue was $30.5 million, an increase of 61% from $19.0
million in the prior year's first quarter, driven by the success of THE
FORBIDDEN KINGDOM and continued box office revenues from MEET THE BROWNS and
THE BANK JOB, both released in the fourth quarter of fiscal 2008.
Lionsgate's home entertainment revenue grew to $152.2 million in the
quarter, a 47% increase from $103.8 million in the prior year first quarter.
The results reflected strength throughout the Company's home entertainment
portfolio of packaged media, VOD and digital businesses, including the best
first quarter library revenues that the Company has ever reported. Top DVD
titles in the quarter such as RAMBO, THE EYE, WITLESS PROTECTION, 3:10 TO YUMA
(released in January 2008) and BELLA (from Roadside Attractions) reflected
significant and growing contributions from strong BluRay high-definition disc
sales.
Television revenue included in the motion picture segment was $28.9
million in the first quarter, a 29% increase from $22.4 million in the prior
year first quarter, led by titles such as 3:10 TO YUMA, BRATZ: THE MOVIE, GOOD
LUCK CHUCK, SAW IV and WAR.
Lionsgate's international revenue grew 51% to $34.3 million in the first
quarter compared to $22.7 million in the first quarter of the prior year,
attributable primarily to the international performance of Saw IV and The Eye.
The Company had its best foreign sales market at the Cannes Film Festival in
May.
Mandate Pictures reported first quarter revenues of $8.5 million,
reflecting contributions from 30 DAYS OF NIGHT, HAROLD AND KUMAR ESCAPE FROM
GUANTANAMO BAY, JUNO, MESSENGERS and PASSENGERS.
Television production revenue in the quarter was $41.1 million, up 45%
from $28.4 million in the prior year first quarter as WEEDS SEASON 4
(Showtime), MAD MEN SEASON 2 (AMC), FEAR ITSELF (NBC), DEBMAR-MERCURY'S TYLER
PERRY'S HOUSE OF PAYNE (TBS) and FAMILY FEUD, and the WEEDS SEASON 3 DVD all
made strong contributions. Weeds has been picked up for its fifth and sixth
seasons by Showtime, positioning the Emmy-nominated series for future
syndication, and MAD MEN earned 16 Emmy (R) nominations, a record for a basic
cable drama series.
Lionsgate senior management will hold its analyst and investor conference
call to discuss its fiscal 2009 first quarter financial results at 9:00 A.M.
ET/6:00 A.M. PT, Monday, August 11, 2008. Interested parties may participate
live in the conference call by calling 1-800-230-1092 (612-288-0329 outside
the U.S. and Canada). A full digital replay will be available from Monday
morning, August 11, through Monday, August 18, by dialing 1-800-475-6701
(320-365-3844 outside the U.S. and Canada) and using access code 956017.
Lionsgate is the leading next generation filmed entertainment studio with
a major presence in the production and distribution of motion pictures,
television programming, home entertainment, family entertainment,
video-on-demand and digitally delivered content. The Company is leveraging its
content leadership and marketing expertise through a series of partnerships
that include the operation of the highly successful FEARNet branded VOD and
Internet horror channel with Sony and Comcast, the recent announcement of the
fall 2009 launch of a new premium entertainment channel with partners Viacom,
Paramount Pictures and MGM, investment in the leading young men's digital
distribution platform Break.com, ownership of the premier independent
television syndication company Debmar-Mercury and an alliance with independent
filmed entertainment production and distribution company Roadside Attractions.
Lionsgate also has forged partnerships with leading content creators, owners
and distributors in key territories around the world, including Televisa in
the U.S. and Latin America, StudioCanal in the UK, Hoyts and Sony in Australia
and Eros International in India.
The Company has generated more than $450 million at the North American
theatrical box office in the past year and has released a string of hits
including THE FORBIDDEN KINGDOM, TYLER PERRY'S MEET THE BROWNS, THE BANK JOB,
RAMBO, THE EYE, SAW IV, TYLER PERRY'S WHY DID I GET MARRIED?, GOOD LUCK CHUCK,
3:10 TO YUMA and WAR, most of which have opened at #1 or #2 at the box office.
The Company has also forged leadership positions in television and home
entertainment with the production of such critically-acclaimed television
series as WEEDS and MAD MEN, the distribution of TYLER PERRY'S HOUSE OF PAYNE,
FAMILY FEUD, SOUTH PARK, TRIVIAL PURSUIT and THE DEAD ZONE, among others, and
approximately 8% market share and the industry's leading box office-to-DVD
conversion rate in home entertainment. Lionsgate handles a prestigious and
prolific library of approximately 12,000 motion picture and television titles
that is an important source of recurring revenue and serves as the foundation
for the growth of the Company's core businesses. The Lionsgate brand is
synonymous with entrepreneurial innovation and original, daring, quality
entertainment in markets around the globe.
http://www.lionsgate.com
For further information, contact:
Peter D. Wilkes
Lionsgate
310-255-3726
pwilkes@lionsgate.com
Kristin Robinson
Lionsgate
310-255-5114
krobinson@lionsgate.com
The matters discussed in this press release include forward-looking
statements, including those regarding the timing of our upcoming film slate,
the expansion of our television business and the success of our fiscal 2009
and fiscal 2010. Such statements are subject to a number of risks and
uncertainties. Actual results in the future could differ materially and
adversely from those described in the forward-looking statements as a result
of various important factors, including the substantial investment of capital
required to produce and market films and television series, increased costs
for producing and marketing feature films, budget overruns, limitations
imposed by our credit facilities, unpredictability of the commercial success
of our motion pictures and television programming, the cost of defending our
intellectual property, difficulties in integrating acquired businesses,
technological changes and other trends affecting the entertainment industry,
and the risk factors as set forth in Lionsgate's Annual Report on Form 10-K,
filed with the Securities and Exchange Commission on May 30, 2008. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements that may be made to reflect any future events
or circumstances.
LIONS GATE ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, March 31,
2008 2008
(Unaudited)
(Amounts in thousands,
except share amounts)
ASSETS
Cash and cash equivalents $230,590 $371,589
Restricted cash 15,850 10,300
Investments 6,909 6,927
Accounts receivable, net of reserve for
video returns and allowances of $98,024
(March 31, 2008 - $95,515) and provision
for doubtful accounts of $6,302 (March 31,
2008 - $5,978) 198,440 260,284
Investment in films and television programs 740,480 608,942
Property and equipment 14,836 13,613
Goodwill 224,213 224,531
Other assets 55,429 41,572
$1,486,747 $1,537,758
LIABILITIES
Accounts payable and accrued
liabilities $182,985 $245,430
Participation and residuals 350,952 385,846
Film and production obligations 312,616 278,016
Subordinated notes and other
financing obligations 328,718 328,718
Deferred revenue 129,063 111,510
1,304,334 1,349,520
Commitments and contingencies
SHAREHOLDERS' EQUITY
Common shares, no par value,
500,000,000 shares authorized,
121,445,965 and 121,081,311
shares issued at June 30, 2008
and March 31, 2008, respectively 437,990 434,650
Series B preferred shares (10 shares
issued and outstanding) - -
Accumulated deficit (216,524) (223,619)
Accumulated other comprehensive loss (373) (533)
221,093 210,498
Treasury shares, no par value,
4,072,499 and 2,410,499 shares at
June 30, 2008 and March 31, 2008,
respectively (38,680) (22,260)
182,413 188,238
$1,486,747 $1,537,758
LIONS GATE ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Three Months
Ended Ended
June 30, June 30,
2008 2007
(Amounts in thousands,
except per share amounts)
Revenues $298,459 $198,742
Expenses:
Direct operating 148,008 87,058
Distribution and marketing 98,975 135,501
General and administration 38,308 26,840
Depreciation 1,062 908
Total expenses 286,353 250,307
Operating income (loss) 12,106 (51,565)
Other expenses (income):
Interest expense 4,311 3,860
Interest and other income (2,155) (3,803)
Total other expenses, net 2,156 57
Income (loss) before equity interests
and income taxes 9,950 (51,622)
Equity interests loss (2,186) (807)
Income (loss) before income taxes 7,764 (52,429)
Income tax provision 669 689
Net income (loss) $7,095 $(53,118)
Basic Net Income (Loss) Per Common Share $0.06 $(0.45)
Diluted Net Income (Loss) Per Common Share $0.06 $(0.45)
LIONS GATE ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Three Months
Ended Ended
June 30, June 30,
2008 2007
(Amounts in thousands)
Operating Activities:
Net income (loss) $7,095 $(53,118)
Adjustments to reconcile net income
(loss) to
net cash used in operating activities:
Depreciation of property and equipment 1,062 908
Amortization of deferred financing costs 933 884
Amortization of films and television
programs 69,047 49,862
Amortization of intangible assets 324 162
Non-cash stock-based compensation 3,419 2,846
Equity interests loss 2,186 807
Changes in operating assets and liabilities:
Restricted cash (5,550) 271
Accounts receivable, net 61,961 9,439
Investment in films and television programs (200,897) (136,139)
Other assets (2,571) (3,061)
Accounts payable and accrued liabilities (62,039) 20,185
Participation and residuals (34,893) 15,527
Film obligations (7,445) 4,361
Deferred revenue 17,551 31,486
Net Cash Flows Used In Operating Activities (149,817) (55,580)
Investing Activities:
Purchases of investments - auction rate
securities - (172,442)
Proceeds from the sale of investments -
auction rate securities - 243,491
Purchases of investments - equity
securities - (3,432)
Proceeds from the sale of investments -
equity securities - 16,343
Investment in equity method investees (11,094) -
Loan to equity method investee (3,100)
Purchases of property and equipment (2,279) (2,017)
Net Cash Flows Provided By (Used In)
Investing Activities (16,473) 81,943
Financing Activities:
Exercise of stock options 825 390
Amounts paid to satisfy tax withholding
requirements on equity awards (1,113) -
Repurchases of common shares (16,420) -
Borrowings under financing arrangements - 3,718
Increase in production obligations 70,545 22,869
Payment of production obligations (28,505) (47,660)
Net Cash Flows Provided By (Used In)
Financing Activities 25,332 (20,683)
Net Change In Cash And Cash Equivalents (140,958) 5,680
Foreign Exchange Effects on Cash (41) 1,403
Cash and Cash Equivalents - Beginning
Of Period 371,589 51,497
Cash and Cash Equivalents - End Of Period $230,590 $58,580
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FREE CASH FLOW, AS DEFINED
TO NET CASH FLOWS USED IN OPERATING ACTIVITIES
Three Months Three Months
Ended Ended
June 30, June 30,
2008 2007
(Amounts in thousands)
Free Cash Flow, as defined $(110,056) $(82,388)
Purchases of property and equipment (2,279) (2,017)
Net borrowings under and repayment
of production obligations 42,040 (24,791)
Net Cash Flows Used In Operating
Activities $(149,817) $(55,580)
Free cash flow is defined as net cash flows used in operating activities,
less purchases of property and equipment and plus or minus the net increase or
decrease in production obligations. The adjustment for the production
obligations is made because the GAAP based cash flows from operations reflects
a non-cash reduction of cash flows for the cost of films associated with
production obligations prior to the time the Company actually pays for the
film. The Company believes that it is more meaningful to reflect the impact of
the payment for these films in its free cash flow when the payments are
actually made.
Free cash flow is a non-GAAP financial measure as defined in Regulation G
promulgated by the Securities and Exchange Commission. This non-GAAP financial
measure is in addition to, not a substitute for, or superior to, measures of
financial performance prepared in accordance with Generally Accepted
Accounting Principles.
Management believes this non-GAAP measure provides useful information to
investors regarding cash that our operating businesses generate whether
classified as operating or financing activity (related to the production of
our films) within our GAAP based statement of cash flows, before taking into
account cash movements that are non-operational. Free cash flow is a non-GAAP
financial measure commonly used in the entertainment industry and by financial
analysts and others who follow the industry. Not all companies calculate free
cash flow in the same manner and the measure as presented may not be
comparable to similarly titled measures presented by other companies.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF EBITDA, AS DEFINED TO NET INCOME (LOSS)
Three Months Three Months
Ended Ended
June 30, June 30,
2008 2007
(Amounts in thousands)
EBITDA, as defined $13,168 $(50,657)
Depreciation (1,062) (908)
Interest expense (4,311) (3,860)
Interest and other income 2,155 3,803
Equity interests loss (2,186) (807)
Income tax provision (669) (689)
Net income (loss) $7,095 $(53,118)
EBITDA is defined as earnings before interest, income tax provision,
depreciation and equity interests losses. EBITDA as defined, is a non-GAAP
financial measure. Management believes EBITDA as defined, to be a meaningful
indicator of our performance that provides useful information to investors
regarding our financial condition and results of operations. Presentation of
EBITDA as defined, is a non-GAAP financial measure commonly used in the
entertainment industry and by financial analysts and others who follow the
industry to measure operating performance. While management considers EBITDA
as defined, to be an important measure of comparative operating performance,
it should be considered in addition to, but not as a substitute for, net
income and other measures of financial performance reported in accordance with
Generally Accepted Accounting Principles. EBITDA as defined, does not reflect
cash available to fund cash requirements. Not all companies calculate EBITDA
as defined, in the same manner and the measure as presented may not be
comparable to similarly-titled measures presented by other companies.
SOURCE Lionsgate
