DreamWorks Animation posts net income of $51.6 million

MUMBAI: DreamWorks Animation SKG, Inc. announced financial results for its fourth quarter and full year ended 31 December, 2008. In the fourth quarter, the Company reported total revenue of $199.8 million and net income of $51.6 million, or $0.58 per share on a fully diluted basis. These results bring the full year reported revenue for 2008 to a total of $650.1 million and net income of $142.5 million, or $1.57 per share on a fully diluted basis.

"Box office receipts from Kung Fu Panda and Madagascar: Escape 2 Africa – the two highest-grossing family films of the year – together exceeded $1.2 billion, making 2008 one of DreamWorks Animation’s most successful years ever," said DreamWorks Animation CEO Jeffrey Katzenberg.

Kung Fu Panda was the third highest-grossing film of the year, with over $630 million in worldwide box office. For the quarter, the title contributed $101.8 million of revenue, driven primarily by its release into the home video market. Through the end of 2008, Kung Fu Panda reached approximately 11.2 million units sold on a worldwide basis, net of actual and estimated future returns.

Madagascar: Escape 2 Africa was the seventh highest-grossing film of the year and has reached approximately $180 million in domestic box office and over $400 million internationally to date. The film contributed $24.0 million of revenue for the quarter, primarily from consumer products and revenue from the Company’s distributor.

The company’s 2006 summer release, Over the Hedge, contributed $23.2 million of revenue for the quarter, primarily from domestic network and international free television.

The company’s 2007 releases, Bee Movie and Shrek the Third, delivered $9.7 million and $9.3 million, respectively, of revenue to the quarter, primarily from home entertainment. Through the end of 2008, the titles reached 8.4 and 21.4 million units, respectively, net of actual and estimated future returns.

Flushed Away contributed $2.8 million of revenue for the quarter, primarily from catalogue home video performance. Library and other revenue, including Shrek The Musical and Shrek the Halls, contributed $29.0 million to the quarter, driven by continued catalogue home entertainment performance. Through the end of 2008, Shrek the Halls reached approximately 1.8 million units sold on a worldwide basis, net of actual and estimated future returns.

Costs of revenue for the quarter equaled $117.4 million. Selling, general and administrative expenses totaled $27.8 million (including approximately $8.6 million of stock compensation expense) as compared to $26.5 million (including approximately $8.6 million of stock compensation expense) for the comparable period of 2007.

Results for the quarter also included a tax benefit of $0.12 per share on a fully diluted basis, attributable to the resolution of a prior year tax reserve related to FIN 48.

Looking to 2009, the Company expects full year results to be driven primarily by Madagascar: Escape 2 Africa and Monsters vs. Aliens, which opens domestically on 27 March, 2009.

"We believe that Monsters vs. Aliens will reset the bar for what moviegoers should expect from a CG animated film and are confident that it will offer our audiences a premium viewing opportunity," Katzenberg continued. "We look forward to sharing DreamWorks Animation’s first 3D release with the world beginning on 27 March ."

The company also provided an update to its share repurchase program. For the full year 2008, the Company purchased $185 million, or 6.8 million shares, and currently has approximately $50 million remaining under its current authorization.

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