Lionsgate (NYSE: LGF), the leading next generation filmed entertainment studio, continued to demonstrate strong revenue growth and to narrow its EBITDA loss from the previous year, reporting revenues of $380.7 million and EBITDA of negative $39.2 million for the second fiscal quarter (period ended September 30, 2008) compared to $351.7 million in revenues and EBITDA of negative $56.2 million for the prior year's second quarter, the Company announced today.
The Company noted that the 8% revenue gain in the quarter was driven primarily by growth in its home entertainment and television from motion picture businesses as well as fresh contributions from Mandate Pictures, partially offset by a decline in theatrical revenues and a decline in television production revenues due to the timing of series deliveries. The Company also noted that, for the first six months of fiscal 2009, it narrowed its EBITDA loss by $80.8 million, from negative $106.8 million to negative $26.0 million. EBITDA is defined as earnings before interest, income tax provision, depreciation and equity interests.
Net loss of $48.1 million in the second quarter translated into basic net loss per common share of $0.41, based on 116.9 million weighted average common shares outstanding, compared to a net loss of $58.0 million, or basic net loss per common share of $0.49, based on 119.2 million weighted average common shares outstanding in the prior year's second quarter. Despite the underperformance of three films in the quarter, the net loss narrowed in the quarter because theatrical marketing costs declined and home entertainment performed strongly.
"We enter the second half of the year with continued robust top line growth, a narrowing EBITDA loss, good momentum throughout our core businesses and a strong balance sheet," said Lionsgate Co-Chairman and Chief Executive Officer Jon Feltheimer. "We are also beginning to see the kind of performance from many of our recent investments such as Mandate and Debmar-Mercury that will help elevate us to the next level of financial results in the future. Given the current environment, we are tasking our senior managers to be even more disciplined in their operations and even more innovative in their thinking."
The Company's filmed entertainment backlog grew to a record $456.5 million at September 30, 2008. Filmed entertainment backlog represents the amount of future revenue contracted but not yet recorded from the licensing of films and television product for television exhibition and in international markets. The Company also ended the second quarter with $249 million in cash and cash equivalents and a new and undrawn $340 million JPMorgan credit facility that closed in July.
Overall motion picture revenue for the quarter was $312.2 million, an increase of 29% from $242.1 million in the prior year's second quarter, as strong growth in home entertainment, television from motion pictures and Mandate Pictures offset declines in theatrical and international.
Theatrical revenue of $34.0 million decreased 25% from $45.3 million in the prior year's second quarter, as the disappointing box office performances of BANGKOK DANGEROUS, DISASTER MOVIE and MY BEST FRIEND'S GIRL compared unfavorably with the slate of 3:10 TO YUMA, GOOD LUCK CHUCK and WAR released in the prior year's second quarter. TYLER PERRY'S THE FAMILY THAT PREYS, the sixth film in the Tyler Perry franchise, performed solidly and in line with expectations. Successful releases such as SAW V and RELIGULOUS were released after the quarter close.
Lionsgate's home entertainment revenue from all segments grew to $178.3 million in the quarter, the strongest second quarter performance in the Company's history and a 32% increase from $135.2 million in the prior year's second quarter. The results reflected strength throughout the Company's home entertainment portfolio of packaged media, VOD and digital businesses, including continued strong library revenues. Top home entertainment titles in the quarter included THE BANK JOB, THE FORBIDDEN KINGDOM, MEET THE BROWNS and RAMBO.
Television revenue included in the motion picture segment was $61.9 million in the second quarter, a 65% increase from $37.6 million in the prior year second quarter, led by titles such as 3:10 TO YUMA, GOOD LUCK CHUCK, SAW IV, WAR and TYLER PERRY'S WHY DID I GET MARRIED?
Lionsgate's international revenue declined 8% to $28.5 million in the second quarter compared to $31.0 million in the second quarter of the prior year. Principal revenue contributors in the quarter were 3:10 TO YUMA, EMPLOYEE OF THE MONTH, MY BEST FRIEND'S GIRL, SAW IV and WAR.
Mandate Pictures reported second quarter revenues of $21.2 million, reflecting a strong slate of JUNO, 30 DAYS OF NIGHT and NICK AND NORAH'S INFINITE PLAYLIST. Lionsgate acquired Mandate in September 2007, so it had no significant contributions to the prior year's second quarter.
Television production revenue in the quarter was $68.5 million, a decline of 38% from $109.6 million in the prior year's second quarter due to the timing of series deliveries. Primary contributors were deliveries of the Emmy Award-winning MAD MEN SEASON 2 (AMC) and deliveries of WEEDS SEASON 4 (Showtime), and FEAR ITSELF (NBC), along with Debmar-Mercury's TYLER PERRY'S HOUSE OF PAYNE (TBS), FAMILY FEUD and SOUTH PARK. Continued strong sales from the third season DVD of WEEDS and the first season DVD of MAD MEN also contributed to the quarter. The television division remains on track to approach $250 million in revenues this year. -- www.cnxmarketlink.com
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