Nov. 6, 2014, 1 p.m.
Revenue Increases 11% to $552.9 Million
Basic Net Income per Share is $0.15 Compared to $0.00 in Prior Year Quarter
Television Production Revenue Grows 141% in the Quarter
SANTA MONICA, Calif. and VANCOUVER, British Columbia, Nov. 6, 2014 /PRNewswire/ — Lionsgate (NYSE: LGF), a premier next generation global content leader, today reported revenue of $552.9 million, adjusted EBITDA of $59.0 million, adjusted net income of $33.0 million or $0.24 adjusted basic net income per share and net income of $20.8 million or $0.15 basic net income per share for the second quarter of fiscal 2015 (quarter ended September 30, 2014).
Courtesy of Lionsgate.
“We’re pleased that our entire portfolio of businesses contributed to our solid results in the quarter, driven by a particularly strong performance from our television operations,” said Lionsgate Chief Executive Officer Jon Feltheimer. “It was a quarter in which we extended our franchises into new lines of business, continued to assemble a strong pipeline of new properties with great commercial potential and developed online platforms that will enhance our ability to deliver our content directly to the consumer.”
Revenue of $552.9 million for the quarter increased 11% from $498.7 million in the prior year quarter, driven by strong gains in television production as well as increases in motion picture revenue from pay and free television windows which more than offset declines in theatrical and home entertainment revenue in the quarter. Lionsgate UK also recorded a 38% revenue increase in the quarter.
Adjusted EBITDA of $59.0 million for the quarter increased 4% from adjusted EBITDA of $56.5 million in the prior year quarter. Adjusted EBITDA excluded $17.3 million in stock-based compensation, a $1.4 million restructuring charge associated with costs of the Company’s relocation of its international sales operations to London, England and a $0.6 million loss related to conversion of subordinated debentures in the quarter.
Adjusted net income of $33.0 million or $0.24 adjusted basic net income per share for the quarter increased 30% from adjusted net income of $25.4 million or $0.19 adjusted basic net income per share in the prior year quarter. Adjusted net income for the quarter benefitted from decreased interest expense and a lower effective tax rate compared to the prior year quarter.
Net income of $20.8 million or $0.15 basic net income per share on 137.4 million weighted average number of common shares outstanding increased from $0.5 million or $0.00 basic net income per share on 137.1 million weighted average number of common shares outstanding in the prior year quarter. The prior year quarter included a $36.2 million loss on extinguishment of debt.
During the quarter, the Company increased its quarterly dividend from $0.05 to $0.07 per common share payable on November 7, 2014 to shareholders of record as of September 30, 2014.
Lionsgate’s filmed entertainment backlog, or already contracted future revenue not yet recorded, was $1.3 billion at September 30, 2014 compared to $1.2 billion at March 31, 2014.
Overall Motion Picture segment revenue for the quarter was $398.0 million compared to $434.4 million in the prior year quarter. Within the Motion Picture segment, theatrical revenue declined to $44.9 million with only two wide theatrical releases in the quarter, The Expendables 3 and Step Up All In, compared to a prior year quarter that included two wide releases, continuing revenue from the May 2013 release of Now You See Me and the record-setting Spanish-language release Instructions Not Included from Pantelion Films.
Lionsgate’s home entertainment revenue for the quarter was $164.4 million compared to $209.9 million in the prior year quarter due to strong performances from Managed Brands and Now You SeeMe in the prior year quarter partially offset by the outstanding home entertainment performance of Divergent in the current quarter. Home entertainment revenue from television production increased in the quarter due to gains in digital media revenue.
Bolstered by the pay television window opening for The Hunger Games: Catching Fire and the free television window opening for The Twilight Saga: Breaking Dawn – Part 1, television revenue included in the Motion Picture segment more than doubled to $69.4 million in the quarter compared to $34.6 million in the prior year quarter. The next installment of the global blockbuster Hunger Games franchise, The Hunger Games: Mockingjay Part 1, will open on nearly 10,000 screens in North America in two weeks on November 21.
International Motion Picture segment revenue (excluding Lionsgate U.K.) for the quarter was $75.6 million compared to $88.7 million in the prior year quarter with three wide release titles in worldwide release compared to five in the prior year quarter.
As noted earlier, Lionsgate U.K. revenue of $37.3 million in the quarter increased 38% compared to the prior year quarter.
Revenue for the Television Production segment rose to $154.9 million in the quarter, an increase of more than 140% compared to $64.3 million in the prior year quarter, with strong gains in both domestic and international television as well as home entertainment revenue from television production.
Fifty-five episodes and 38.5 hours of domestic television series were delivered in the quarter, including episodes of Manhattan, Anger Management, Orange is the New Black, Houdini, Nashville and Mad Men, compared to 20 episodes and 11.0 hours in the prior year quarter. Strong international sales of Orange is the NewBlack, Nashville and Anger Management were also reported in the quarter.
Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2015 second quarter financial results at 9:00 A.M. ET/6:00 A.M. PT on Friday, November 7, 2014. Interested parties may participate live in the conference call by calling outside the U.S. and Canada). A full digital replay will be available from Friday morning, November 7, through Friday, November 14, by dialing outside the U.S. and Canada) and using access code 339764.
ABOUT LIONSGATE
Lionsgate, home to The Hunger Games, Twilight and Divergent franchises, is a premier next generation global content leader with a strong and diversified presence in motion picture production and distribution, television programming and syndication, home entertainment, digital distribution, new channel platforms and international distribution and sales. Lionsgate currently has more than 30 television shows on over 20 different networks spanning its primetime production, distribution and syndication businesses, including such critically-acclaimed hits as the multiple Emmy Award-winning Mad Men and Nurse Jackie, the comedy Anger Management, the broadcast network series Nashville, the syndication success The Wendy Williams Show and the critically-acclaimed hit series Orange is the New Black.
Its feature film business has been fueled by such recent successes as the blockbuster first two installments of The Hunger Games franchise, The Hunger Games and The Hunger Games: Catching Fire, the first installment of the Divergent franchise, Now You See Me, John Wick, Warm Bodies, The Possession, Sinister, Roadside Attractions’ A Most Wanted Man, Lionsgate/Codeblack Films’ Addicted and Pantelion Films’ Instructions Not Included, the highest-grossing Spanish-language film ever released in the U.S.
Lionsgate’s home entertainment business is an industry leader in box office-to-DVD and box office-to-VOD revenue conversion rates. Lionsgate handles a prestigious and prolific library of approximately 16,000 motion picture and television titles that is an important source of recurring revenue and serves as the foundation for the growth of the Company’s core businesses. The Lionsgate and Summit brands remain synonymous with original, daring, quality entertainment in markets around the world. www.lionsgate.com
***
For further information, please contact:
Peter D. Wilkes
pwilkes.com