Lionsgate Says Pre-Tax Earnings Top $115 Million29 Apr, 2010 By: Erik Gruenwedel
Citing strong DVD/Blu-ray Disc catalog sales and digital distribution, including video-on-demand (VOD), Lionsgate April 29 said preliminary pre-tax earnings for the fiscal year (ended March 31) would exceed $115 million.
Santa Monica, Calif.-based Lionsgate had previously projected pre-tax earnings of more than $75 million.
“Our preliminary fiscal 2010 financial results show that our strong product pipelines, coupled with the continued recovery of the retail and advertising markets, are helping our home entertainment and television businesses to outperform our previous expectations,” said Lionsgate co-chairman and CEO Jon Feltheimer, in a statement.
"We crushed the numbers," Lionsgate vice chairman Michael Burns told CNBC.
Feltheimer added that he expects Lionsgate to return to positive free cash flow in fiscal 2011.
The mini-major announced the results in part to underscore support for Feltheimer’s management team, which has come under repeated attack by activist shareholder Carl Icahn.
The New York-based investor, who has tendered a $7 per share offer to buy all outstanding common shares of Lionsgate stock, said he would implement new senior executives, in addition to board members, in order to reign in alleged cost overruns.
The studio suffered a setback earlier this week when the British Columbia Securities Commission voted against Lionsgate (which is also registered in Canada) adopting a shareholder rights plan designed to thwart Icahn’s attempted hostile takeover.
Without the so-called “poison pill” provision, the studio believes some shareholders would be coerced into accepting Icahn’s offer, which Lionsgate considers financially inadequate.
Lionsgate reports fourth-quarter and full-year results June 1.