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Lionsgate Posts $22.7M Fourth-Quarter Loss

30 May, 2012 By: Erik Gruenwedel

Lionsgate May 30 reported a fourth-quarter (ended March 31) net loss of $22.7 million, compared with net income of $48.7 million during the previous-year period. Revenue for the quarter topped $645 million, compared with revenue of nearly $377 million last year.

The Santa Monica, Calif.-based minimajor attributed the loss to $38 million in transaction and purchase accounting costs associated with the January acquisition of Summit Entertainment, including $12 million in severance costs associated with departing executives.

Lionsgate also reported a $26 million negative impact on the home entertainment profit of The Twilight Saga: Breaking Dawn — Part 1 due to purchase accounting rules. The studio also reported $16 million in upfront marketing costs for the theatrical release of The Hunger Games and three other theatrical releases, including One For the Money and Tyler Perry's Good Deeds. Lionsgate had no theatrical releases in the previous-year period.

Lionsgate's home entertainment revenue from both motion pictures and television was $683.5 million for the fiscal year, compared with $690 million in the prior year. Revenue from home entertainment releases of television programming increased 87% from the prior year and, coupled with the February home entertainment release of The Twilight Saga: Breaking Dawn — Part 1, offset declines attributable to a smaller film slate.

Digital media revenue, which is included in home entertainment revenue and includes electronic sellthrough, video-on-demand and revenue from other digital media platforms, increased 38% in the fiscal year to $193 million.

Lionsgate did not disclose quarterly home entertainment revenue.

“Fiscal 2012 was a milestone year with the acquisition of Summit Entertainment, the rollout of our record-breaking film The Hunger Games, continued growth in library revenues and the increasing profitability of our diversified television business,” Lionsgate CEO Jon Feltheimer said in a statement. “With substantially all of the profitability of the first Hunger Games film and this November’s release of The Twilight Saga: Breaking Dawn — Part 2 still ahead of us, we have great visibility and have set the stage for anticipated strong [pre-tax earnings], free cash flow and earnings in the years ahead.”

Lionsgate management, including Steve Beeks, co-COO and president of the motion picture group, will hold a call with analysts May 31.

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