MUMBAI: Lionsgate has reported a net loss of $93.4 million in the third quarter compared to net income of $7.3 million in the prior year’s third quarter. The loss was primarily attributable to the under-performance of theatrical wide releases in the quarter along with a reserve taken for the company’s HIT Entertainment North American DVD distribution deal due to several factors, including softness in the preschool non-theatrical retail market and unusually high returns from the field when Lionsgate took over distribution of the line. These losses more than offset gains in Lionsgate’s television business.
The company reported revenues of $324 million for the third fiscal quarter (period ended 31 December, 2008), an 8.4 per cent increase from $299 million for the prior year’s third quarter. However, EBITDA for the third quarter was negative $88.9 million compared to EBITDA of positive $11.7 million in the prior year’s third quarter.
"During the quarter, we were negatively impacted by some of the same broad economic factors reported by other companies in the media and entertainment sector. However, the primary factor contributing to this quarter’s loss was the under-performance of our feature film slate. This will have a significant negative impact on our EBITDA and free cash flow for the whole year. Looking forward to fiscal 2010, with the solid performance of our television, home entertainment, international and library businesses, coupled with a smaller film slate and lower associated marketing costs, we anticipate significant positive EBITDA next year," said Lionsgate co-chairman and CEO Jon Feltheimer.
The company’s filmed entertainment backlog was $442.4 million at 31 December, 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 $254.9 million, a decrease of two per cent from $261 million in the prior year’s third quarter, as declines in home entertainment, international and Mandate Pictures offset growth in theatrical and television from motion pictures.
Theatrical revenue of $69.3 million increased nine per cent from $63.8 million in the prior year’s third quarter. Saw V continued the strength of the Saw horror franchise and the documentary Religulous also performed well in platform release. The wide releases The Spirit, Punisher: War Zone and Transporter 3 compared unfavourably to releases in the prior year’s third quarter.
Lionsgate’s home entertainment revenue from all segments was $101.5 million, an 11 per cent decline compared to $114.6 million in the prior year’s third quarter. There were no high-profile new theatrical releases on DVD in the quarter.
Significant home entertainment titles in the quarter were Beer For My Horses and continued sales of Rambo, The Bank Job, Forbidden Kingdom and War, which were released in previous quarters. The company has slated the releases of theatrical titles as Saw V, Tyler Perry’s The Family That Preys, Bangkok Dangerous, My Best Friend’s Girl and Transporter 3 for the fiscal fourth quarter to avoid the glut of major studio releases before the holidays, as it has done in the past.
Television revenue included in the motion picture segment was $39 million in the third quarter, a 25 per cent increase from $31.3 million in the prior year third quarter, led by titles such as Tyler Perry’s Meet The Browns, Rambo, The Bank Job and The Eye. Lionsgate’s international revenue declined eight per cent to $41.1 million in the third quarter compared to $44.6 million in the third quarter of the prior year.
Mandate Pictures reported third quarter revenues of $8.3 million, a decline of 34 per cent from $12.5 million in the prior year third quarter.
Television production revenue in the quarter was $69.2 million, an increase of 82 per cent from $38.0 million in the prior year’s third quarter due to increases in domestic television series episodes delivered, $14.5 million of revenue generated from the company’s joint venture with Ish Entertainment LLC and revenue increases from the company’s Debmar-Mercury television syndication business.
After the end of the quarter, Turner Broadcasting ordered a total of 80 episodes of the House of Payne spin-off, Tyler Perry’s Meet The Browns, to air on TBS this summer and in syndication in fall 2010. The television division remains on track to approach $250 million in revenues this year.
