Fueled by strong gains in its television division, a record library performance, new revenue from TV Guide Network and TV Guide.com and a decline in theatrical and home entertainment marketing and distribution costs, Lionsgate (NYSE: LGF), the leading next generation studio, today reported record revenue, adjusted EBITDA and EBITDA for the fiscal year ended March 31, 2010.
The Company reported revenue of $1.584 billion and net loss attributable to Lionsgate shareholders of $19.5 million for the fiscal year ended March 31, 2010. Revenue increased 8% from the prior year due primarily to increases in television production revenue and new revenue of $113.6 million from TV Guide Network and TVGuide.com which offset declines in the motion picture business driven by fewer theatrical releases.
The Company’s net loss attributable to shareholders of $19.5 million for fiscal year 2010 compared to a net loss attributable to shareholders of $178.5 million in the prior year. The net loss included a $28.1 million loss for equity interests, primarily relating to Epix’s $26.6 million loss, including approximately $7.9 million of intercompany profit elimination.
Basic net loss per common share for the fiscal year was $0.17 on 117.5 million weighted average common shares outstanding, compared to basic net loss of $1.53 on 116.8 million weighted average common shares outstanding in the prior year.
The Company reported record adjusted EBITDA of $128.5 million for fiscal year 2010 compared to adjusted EBITDA of negative $122.9 million for the prior year, a positive swing of more than $250 million. The Company also reported EBITDA of $80.1 million for fiscal year 2010 compared to EBITDA of negative $133.6 million in the prior year.
The gains were primarily attributable to strong performances in its television business, positive EBITDA contribution from TV Guide Network and a significant decline in marketing and distribution costs due to fewer theatrical releases. In addition, the prior year’s results included the writedown in HIT Entertainment. Marketing and distribution costs of $515.8 million in fiscal year 2010 declined 23% from $669.6 million in the prior year.
EBITDA is defined as earnings before interest, income tax provision, depreciation and amortization, equity interests and gains or loss on extinguishment of debt and the sale of equity securities.
“We had a very strong year with contributions from all of our businesses. We are particularly pleased by the continued rapid growth of our television business, the ongoing progress of our channel investments and a record library performance despite a challenging industry environment,” said Lionsgate Co-Chairman and Chief Executive Officer Jon Feltheimer. “We are well positioned to continue the positive trend toward topline revenue growth, strong EBITDA and a return to positive free cash flow as we continue to build the longterm value of our business.”
Overall motion picture revenue for fiscal year 2010 of $1.12 billion decreased 9% from $1.23 billion in the prior year. Within the motion picture segment, theatrical revenue was $139.4 million, a decrease of 38% compared to the prior year, because the Company’s smaller slate of 10 releases (nine wide releases), including PRECIOUS, winner of two Academy Awards(R), DAYBREAKERS, I CAN DO BAD ALL BY MYSELF, SAW VI and FROM PARIS WITH LOVE, among others, compared to 16 releases (14 wide releases), including MADEA GOES TO JAIL, MY BLOODY VALENTINE 3-D, THE HAUNTING IN CONNECTICUT and SAW V, among others, in the prior year.
Lionsgate’s home entertainment revenue from both motion pictures and television was $608.2 million in fiscal 2010, a 10% decline from the prior year as theatrical titles such as PRECIOUS, SAW VI, I CAN DO BAD ALL BY MYSELF and THE HAUNTING IN CONNECTICUT, among others, had lower underlying box office than the prior year’s slate, which included titles such as SAW V, THE FAMILY THAT PREYS and THE FORBIDDEN KINGDOM, among others.
Television included in motion pictures revenue (primarily pay television) rose to $186.7 million in fiscal year 2010, an increase of 10% from the prior year with a slate of MADEA GOES TO JAIL, THE HAUNTING IN CONNECTICUT and MY BLOODY VALENTINE 3-D, among others, comparing favorably to a slate of 3:10 TO YUMA, THE FORBIDDEN KINGDOM and MEET THE BROWNS, among others, in the prior year.
International motion picture revenue of $73.4 million (excluding Lionsgate U.K.) in fiscal year 2010 declined 10% from the prior year. The slate of BROTHERS, MY BLOODY VALENTINE 3-D, SAW V and SAW VI compared to SAW V, SAW IV, THE EYE, MY BEST FRIEND’S GIRL and PUNISHER: WAR ZONE in the prior year.
Lionsgate U.K. revenue of $74.3 million in fiscal year 2010 increased 22% from the prior year as the slate of the third party film THE HURT LOCKER, winner of the Best Picture and Best Director Academy Awards(R) and distributed by Lionsgate in the U.K. and Maple Pictures in Canada, DRAG ME TO HELL, MY BLOODY VALENTINE 3-D, SAW VI and HARRY BROWN compared favorably to the prior year’s slate of SAW IV, SAW V, THE BANK JOB and RIGHTEOUS KILL.
Mandate Pictures’ revenue of $99.1 million for fiscal year 2010 increased 118% from the prior year on the films JUNO, DRAG ME TO HELL, HORSEMEN, PASSENGERS and WHIP IT compared to the films 30 DAYS OF NIGHT, HAROLD & KUMAR 2, JUNO, NICK AND NORAH’S INFINITE PLAYLIST and PASSENGERS in the prior year.
Lionsgate’s television business reported record revenue of $350.9 million in fiscal year 2010, up 58% from the prior year, and recorded strong gains in all segments. Revenue from television domestic series licensing was $240.0 million in the fiscal year, a gain of 48% from the prior year.
This reflected a 63% increase in revenues for Lionsgate Television deliveries of programming such as 13 episodes of the Emmy Award-winning drama “Mad Men Season 3” (AMC), 13 episodes of the comedy “Weeds Season 5” (Showtime), 13 episodes of the drama “Crash Season 2” (Starz) and 24 episodes of the dark comedy “Nurse Jackie Seasons 1 and 2” (Showtime), among others, along with a 56% increase in revenue from Debmar-Mercury licensing of such shows as “Tyler Perry‘s House of Payne,” its spinoff “Meet The Browns,” ”The Wendy Williams Show” and “Family Feud.”
International television segment revenue of $42.3 million in fiscal year 2010 increased 70% from the prior year reflecting sales of “Mad Men Season 3,” “Crash Season 1,” the drama “Dead Zone Season 1” and the horror anthology “Fear Itself.”
Home entertainment revenue from television production was $67.8 million in the fiscal year, a 94% increase from the prior year driven primarily by sales of “Weeds Seasons 4 & 5” and “Mad Men Seasons 2 & 3.”
The strong performance of Lionsgate’s television business also helped catalyze a record performance by the Company’s 12,000-title filmed entertainment library, which generated $323 million in revenue in fiscal year 2010, a 16% increase from the prior year.
Lionsgate’s general and administrative (G&A) expenses in fiscal year 2010 were $117.6 million in the Company’s core business (excluding stock-based compensation expense and TV Guide Network), a decline of 4% from the prior year. G&A as a percentage of revenue in the Company’s core business declined from 8.4% to 8.0% in fiscal year 2010 (excluding stock-based compensation expense and TV Guide Network).
Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal year 2010 full year and fourth quarter financial results at 9:00 A.M. ET/6:00 A.M. PT on Wednesday, June 2, 2010. Interested parties may participate live in the conference call by calling 1-800-230-1074 (612-288-0329 outside the U.S. and Canada). A full digital replay will be available from Wednesday morning, June 2, through Wednesday, June 9, by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada) and using access code 158614.