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Lionsgate fiscal revenue, profit falls

MUMBAI: US media and entertainment company Lionsgate reported revenue of $2.63 billion for the fiscal compared to $2.71 billion in the prior year, reflecting a domestic theatrical slate of 13 wide releases compared to 19 in the prior year.

This was partially offset by revenue gains in the company’s television production and international businesses.

Revenue contributors during the year included the global blockbuster ‘The Hunger Games: Catching Fire’, which grossed $865 million at the worldwide box office on its way to becoming the 10th highest-grossing domestic release of all time. ‘Now You See Me’, which grossed more than $350 million at the worldwide box office, and ‘Divergent’, which launched only 10 days before the end of the fiscal year, also made strong revenue contributions.

Lionsgate’s television production operations achieved record revenue of $447.4 million in the fiscal year, international operations set an all-time revenue high of $397.1 million and the company’s filmed entertainment library reached an all-time revenue best of $496 million.

Adjusted net income was $217.9 million compared to adjusted net income of $136.5 million. Net income for the fiscal was $152.0 million compared to $232.1 million in the prior year.

Net income in the fiscal reflected $39.6 million in pre-tax costs associated with the early extinguishment of debt (compared to $24.1 million in the prior year) and net income in the prior year included an income tax benefit of $141.1 million from changes in the valuation allowance.
Adjusted EBITDA of $370.8 million for the fiscal year compared to adjusted EBITDA of $329.7 million in the prior year.

Revenue for the television production segment increased by 18 per cent to a record $447.4 million in the fiscal with strong gains in both domestic and international television. Domestic television deliveries in the fiscal year totaled 176 episodes and 122 hours of television content, including the first two seasons of ‘Orange is the New Black’, the first two seasons of ‘Nashville’, the sixth amd seventh seasons of ‘Mad Men’, the sixth season of ‘Nurse Jackie’ and ‘Anger Management’.

Revenue for the fourth quarter ended 31 March 2014 was $721.9 million with adjusted EBITDA of $92 million, adjusted net income of $63.5 million and net income of $49.2 million.

The company set all-time highs in adjusted EBITDA and adjusted net income in the fiscal year, with adjusted EBITDA gains driven by record margins, the global box office performance of a theatrical slate led by ‘The Hunger Games: Catching Fire’ and ‘Now You See Me’ as well as strong results from the film library and lower theatrical marketing costs.

The company’s share of income from equity investments also increased due to continued gains at Epix, its partnership with Viacom and MGM, and improved performance at TVGN, its 50/50 partnership with CBS. Adjusted net income benefitted further from decreased interest expense and a lower effective tax rate compared to the prior year.

Lionsgate CEO Jon Feltheimer said, “Our strong operating momentum, the diversity of our portfolio of businesses and the continued enhancement of our capital structure all contributed to another year of outstanding financial results. The trajectory of our business, the depth of our content pipelines and the ongoing generation of predictable income from our film franchises, television properties and filmed entertainment library continue to give us excellent long-term visibility.”

Lionsgate’s film backlog, or already contracted future revenue not yet recorded, rose to $1.2 billion on 31 March 2014, compared to $1.1 billion a year ago.

Overall, Motion Picture segment revenue for the fiscal year was $2.1 billion compared to $2.3 billion in the prior fiscal year. Within the Motion Picture segment, theatrical revenue declined marginally by two per cent to $524.7 million due to fewer releases.

Lionsgate’s home entertainment revenue from both motion pictures and television was $863.9 million for the fiscal year compared to $964.1 million for the prior year due primarily to fewer releases, partially offset by 20 per cent growth in home entertainment revenue from Managed Brands.

Television revenue included in the Motion Picture segment was $225.3 million in the fiscal year compared to $277.9 million in the prior year. The prior year included the pay TV window for the first Hunger Games film and television revenue from three Twilight Saga titles released prior to Lionsgate’s January 2012 acquisition of Summit Entertainment.

International Motion Picture segment revenue (excluding Lionsgate U.K.) increased by seven per cent to a record $397.1 million in the fiscal year driven by the stellar international box office performances of ‘The Hunger Games: Catching Fire’, ‘Now You See Me’, ‘Red 2’ and ‘Escape Plan’ and strong carryover performance from the prior year release of ‘The Twilight Saga: Breaking Dawn – Part II’.

Lionsgate U.K. posted revenue of $146.3 million for the fiscal year compared to $147.7 million in the prior year.