Lionsgate Reports Net Income of $36.3 Million and Adjusted EBITDA of $53.0 Million for First Quarter of Fiscal 2010



    
    Net Income Compares To $3.5 Million In Prior Year's First Quarter;
Adjusted
    EBITDA Grows From $17.4 Million In Prior Year's First Quarter

    Company Reports First Quarter Revenues of $387.7 Million, 30% Increase
    Compared To $298.5 Million In Prior Year's First Quarter





    
    SANTA MONICA, Calif. and VANCOUVER, British Columbia, Aug. 10 /CNW/ --
Lionsgate (NYSE:   LGF), the leading next generation studio, continued its
strong growth momentum, reporting revenues of $387.7 million and net income of
$36.3 million for the fiscal 2010 first quarter ended June 30, 2009, the
Company announced today. Basic net income per common share was $0.31 on 117.1
million weighted average common shares outstanding, compared to basic net
income of $0.03 on 118.4 million weighted average common shares outstanding in
the prior year's first quarter.

    The Company reported adjusted EBITDA of $53.0 million in the first
quarter compared to adjusted EBITDA of $17.4 million for the prior year's
first quarter. Adjustments in the quarter were made for non-cash stock
options, stock appreciation rights (SARs) and restricted stock units, certain
non-recurring charges and the deduction of Lionsgate's partners' share of
EBITDA attributed to TV Guide.  EBITDA is defined as earnings before interest,
income tax provision, depreciation and amortization, equity interests and
gains on extinguishment of debt and the sale of equity securities.

    First quarter revenues were $387.7 million, an increase of 30% compared
to $298.5 million in the prior year's first quarter, reflecting strong growth
in television production revenues, growth in overall Motion Picture Group
revenues, highlighted by a strong performance from Mandate Pictures, and new
revenue of $27.8 million reflecting the first full quarter of revenue from TV
Guide Network and TV Guide.com.

    "As anticipated, we had a strong and profitable growth quarter that puts
us on track to meet our financial targets for the year," said Lionsgate
Co-Chairman and Chief Executive Officer Jon Feltheimer. "We are particularly
pleased that, beyond the solid financial story, we saw significant positive
developments across nearly all of our businesses, including new distribution
and syndication orders for Debmar-Mercury shows, new television series
entering the production pipeline, important programming acquisitions for TV
Guide Network, the first in a series of anticipated carriage deals for Epix
and new branded channel launches in Asia.  The real story this quarter was the
continued strong growth of our diversified asset base."

    The Company's filmed entertainment backlog grew to a record $517.0
million in the first quarter.  Filmed entertainment backlog represents the
amount of future revenue from films, television programming and video product
already licensed but not yet recorded.  It does not include unsold rights to
this product, typically referred to as library value.  General and
administrative expenses, including the addition of TV Guide Network and TV
Guide.com, were $41.1 million in the first quarter compared to $38.3 million
in the prior year's first quarter.  Excluding TV Guide Network and TV
Guide.com, general and administrative expenses in the quarter were $30.4
million, a decrease of 21% from $38.3 million in the prior year's first
quarter.

    Overall motion picture revenue for the quarter of $272.7 million
increased $15.3 million, or 6%, compared to $257.4 million in the prior year's
first quarter.  Within the motion picture segment, theatrical revenue was
$22.7 million, a decrease of 26% compared to the prior year first quarter, as
the Company released only Crank: High Voltage in the quarter, with continued
revenue from Fiscal 2009 fourth quarter hits Tyler Perry's Madea Goes To Jail
and The Haunting In Connecticut.

    Lionsgate's home entertainment revenue was $151.0 million in the quarter,
a decline of 6% from the prior year's first quarter.  Solid revenues from a
slate that included Madea Goes To Jail, My Bloody Valentine 3-D, New In Town,
The Spirit and Transporter 3 compared to a slate in the prior year's first
quarter that included an exceptional revenue performance from Rambo along with
titles such as 3:10 To Yuma, The Eye and Witless Protection.  DVD sales of The
Spirit and New In Town overconverted their theatrical box office performance
in the quarter, giving Lionsgate five of the industry's six overconverting DVD
titles in the first six months of calendar 2009.

    Television revenue included in motion pictures revenue was $20.6 million
in the first quarter, a decline of 29% from the prior year's first quarter,
with a slate of Bangkok Dangerous, Disaster Movie, My Best Friend's Girl, Saw
V, Tyler Perry's The Family That Preys and "W." comparing to a slate of 3:10
To Yuma, Bratz: The Movie, Good Luck Chuck, Saw IV and War in the prior year's
first quarter.

    International revenues of $32.5 million in the first quarter declined 5%
from the prior year's first quarter.  Principal revenue contributors in the
quarter were My Best Friend's Girl, My Bloody Valentine 3-D and Saw V.

    Mandate Pictures' revenue of $53.1 million in the first quarter increased
sharply from $8.5 million in the prior year's first quarter as Drag Me To
Hell, Juno and Passengers all made strong contributions.  Lionsgate acquired
Mandate Pictures in August 2007.

    Television production revenue increased to $87.2 million in the first
quarter, a gain of 112% compared to $41.1 million in the prior year's first
quarter, reflecting strong contributions in domestic series licensing from
Lionsgate Television and Debmar-Mercury, along with new revenue from the
Company's joint venture with ISH Entertainment.  Within the television
production segment, international revenue and revenue from the home
entertainment releases of television programming also increased.  Revenue
reflected the delivery of six episodes of Weeds Season 5 (Showtime) and 12
episodes of Nurse Jackie Season 1 (Showtime) in the quarter, increased revenue
from Debmar-Mercury's distribution of Tyler Perry's House of Payne, its
spinoff Meet The Browns and South Park, production of the ISH Entertainment
series Paris Hilton's My New BFF and My Antonio, strong international revenues
from Crash TV Series Season 1, Dead Zone, Paris Hilton's My New BFF and Scream
Queens, and a powerful performance of Weeds Seasons 3 and 4 on DVD.

    Lionsgate senior management will hold its analyst and investor conference
call to discuss its fiscal 2010 first quarter financial results at 9:00 A.M.
ET/6:00 A.M. PT, Tuesday, August 11, 2009.  Interested parties may participate
live in the conference call by calling 1-800-230-1074 (612-234-9960 outside
the U.S. and Canada).  A full digital replay will be available from Tuesday
afternoon, August 11, through Tuesday, August 18, by dialing 1-800-475-6701
(320-365-3844 outside the U.S. and Canada) and using access code 108177.
    

    About Lionsgate
    
    Lionsgate (NYSE:   LGF) is the leading next generation studio with a strong
and diversified presence in the production and distribution of motion
pictures, television programming, home entertainment, family entertainment,
video-on-demand and digitally delivered content. The Company has built a
strong television presence in production of prime time cable and broadcast
network series, production, distribution and syndication of programming
through Debmar-Mercury, reality programming through its joint venture with ISH
Entertainment and an array of channel platforms, including its partnership
with One Equity Partners and Allen Shapiro in TV Guide Network and TV
Guide.com, its partnership with Viacom and MGM in the multiplatform premium
channel Epix, its partnership with Sony and Comcast in the branded horror
channel FEARnet and its recent launch of the KIX action channel and the Thrill
horror/suspense channel in Asia.  Its feature film business achieved a record
box office performance in the January-March 2009 quarter, driven by the
success of "Tyler Perry's Madea Goes To Jail," "My Bloody Valentine 3-D" and
"The Haunting In Connecticut." The Company's home entertainment business has
grown to more than 7% market share and leads the industry in its box
office-to-DVD revenue conversion rate.  Lionsgate handles a prestigious and
prolific library of approximately 12,000 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 brand remains
synonymous with original, daring, quality entertainment in markets around the
world.
    

    More information on Lionsgate can be found at www.lionsgate.com.


    www.lionsgate.com

    

    For further information, please contact:

    
    Peter D. Wilkes
    310-255-3726
    pwilkes@lionsgate.com


    
    The matters discussed in this press release include forward-looking
statements, including those regarding the timing of our upcoming film slate
and the performance of our fiscal 2010.  Such statements are subject to a
number of risks and uncertainties. Actual results in the future could differ
materially and adversely from those described in the forward-looking
statements as a result of various important factors, including the substantial
investment of capital required to produce and market films and television
series, increased costs for producing and marketing feature films, budget
overruns, limitations imposed by our credit facilities, unpredictability of
the commercial success of our motion pictures and television programming, the
cost of defending our intellectual property, difficulties in integrating
acquired businesses, technological changes and other trends affecting the
entertainment industry, and the risk factors as set forth in Lionsgate's
Annual Report on Form 10-K, filed with the Securities and Exchange Commission
on June 1, 2009. The Company undertakes no obligation to publicly release the
result of any revisions to these forward-looking statements that may be made
to reflect any future events or circumstances
    


    


    LIONS GATE ENTERTAINMENT CORP.

    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

    
                                                  June 30,    March 31,
                                                    2009        2009
                                                    ----        ----
    

    
                                                 (Amounts in thousands,
                                                  except share amounts)
                                  ASSETS
    Cash and cash equivalents                    $114,669    $138,475
    Restricted cash                                 9,895      10,056
    Restricted investments                          6,987       6,987
    Accounts receivable, net of reserve for
     returns and allowances of $98,641 (March 31,
     2009 - $98,947) and provision for doubtful
     accounts of $10,132 (March 31, 2009 -
     $9,847)                                      201,078     227,010
    Investment in films and television
     programs, net                                764,856     702,767
    Property and equipment, net                    40,960      42,415
    Finite-lived intangible assets, net            77,981      78,904
    Goodwill                                      379,457     379,402
    Other assets                                   85,937      81,234
                                                   ------      ------
      Total assets                             $1,681,820  $1,667,250
                                               ==========  ==========
    

    
                                LIABILITIES
    Bank loans                                   $255,000    $255,000
    Accounts payable and accrued liabilities      173,125     270,561
    Participations and residuals                  337,259     371,857
    Film and production obligations               301,107     304,525
    Subordinated notes and other financing
     obligations                                  262,237     281,521
    Mandatorily redeemable preferred stock
     units held by noncontrolling interest         85,508           -
    Deferred revenue                              129,922     142,093
                                                  -------     -------
      Total liabilities                         1,544,158   1,625,557
                                                ---------   ---------
    

    Commitments and contingencies

    
                SHAREHOLDERS' EQUITY
    Lions Gate Entertainment Corp. shareholders'
     equity:
      Common shares, no par value, 500,000,000
       shares authorized, 117,165,122 and
       116,950,512 shares issued at June 30,
       2009 and March 31, 2009, respectively      513,019     494,724
      Accumulated deficit                        (404,804)   (441,153)
      Accumulated other comprehensive loss         (6,898)    (11,878)
                                                   ------     -------
        Total Lions Gate Entertainment Corp.
         shareholders' equity                     101,317      41,693
    Noncontrolling interest                        36,345           -
                                                   ------         ---
      Total equity                                137,662      41,693
                                                  -------      ------
        Total liabilities and equity           $1,681,820  $1,667,250
                                               ==========  ==========


    

    LIONS GATE ENTERTAINMENT CORP.

    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

    
                                                    Three Months  Three Months
                                                        Ended         Ended
                                                       June 30,      June 30,
                                                         2009          2008
                                                         ----          ----
    

    
                                                       (Amounts in thousands,
                                                          except per share
                                                              amounts)
    


    
    Revenues                                           $387,707      $298,459
    Expenses:
      Direct operating                                  213,059       147,684
      Distribution and marketing                         84,983        98,975
      General and administration                         41,119        38,308
      Depreciation and amortization                       8,195         1,386
                                                          -----         -----
        Total expenses                                  347,356       286,353
                                                        -------       -------
    Operating income                                     40,351        12,106
                                                         ------        ------
    Other expenses (income):
      Interest expense
        Contractual cash based interest                   5,040         3,378
        Amortization of debt discount and deferred
         financing costs and accretion of redeemable
         preferred stock units                            5,669         4,509
                                                          -----         -----
            Total interest expense                       10,709         7,887
      Interest and other income                            (426)       (2,155)
      Gain on extinguishment of debt                     (7,458)            -
                                                         ------           ---
        Total other expenses, net                         2,825         5,732
                                                          -----         -----
    Income before equity interests and income
     taxes                                               37,526         6,374
    Equity interests loss                                (1,717)       (2,186)
                                                         ------        ------
    Income before income taxes                           35,809         4,188
    Income tax provision                                  1,337           669
                                                          -----           ---
    Net Income                                           34,472         3,519
      Add: Net loss attributable to
       noncontrolling interest                            1,877             -
                                                          -----           ---
    Net Income attributable to Lions Gate
     Entertainment Corp. Shareholders                   $36,349        $3,519
                                                        =======        ======
    

    
    Basic Net Income Per Common Share                     $0.31         $0.03
                                                          =====         =====
    Diluted Net Income Per Common Share                   $0.30         $0.03
                                                          =====         =====
    Weighted average number of common shares outstanding:
      Basic                                             117,073       118,443
      Diluted                                           136,595       121,076


    

    LIONS GATE ENTERTAINMENT CORP.

    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

    
                                                   Three Months  Three Months
                                                       Ended         Ended
                                                     June 30,      June 30,
                                                       2009          2008
                                                       ----          ----
                                                     (Amounts in thousands)
    Operating Activities:
    Net Income attributable to Lions Gate
     Entertainment Corp. shareholders                 $36,349        $3,519
    Net loss attributable to noncontrolling
     interest                                          (1,877)            -
                                                       ------           ---
    Net income                                         34,472         3,519
    Adjustments to reconcile net income to
     net cash used in operating activities:
      Depreciation of property and equipment            4,337         1,062
      Amortization of films and television
       programs                                       153,942        69,047
      Amortization of debt discount and deferred
       financing costs and accretion of redeemable
       preferred stock units                            5,669         4,509
      Amortization of intangible assets                 3,858           324
      Non-cash stock-based compensation                 3,729         3,419
      Gain on extinguishment of debt                   (7,458)            -
      Equity interests loss                             1,717         2,186
    Changes in operating assets and liabilities:
      Restricted cash                                     161        (5,550)
      Accounts receivable, net                         29,835        61,961
      Investment in films and television
       programs                                      (216,292)     (200,897)
      Other assets                                     (1,491)       (2,571)
      Accounts payable and accrued liabilities        (98,614)      (62,039)
      Participations and residuals                    (34,969)      (34,893)
      Film obligations                                (19,130)       (7,445)
      Deferred revenue                                (12,585)       17,551
                                                      -------        ------
    Net Cash Flows Used In Operating Activities      (152,819)     (149,817)
                                                     --------      --------
    Investing Activities:
    Investment in equity method investees             (14,924)      (11,094)
    (Increase) decrease in loans receivable             8,333        (3,100)
    Purchases of property and equipment                (3,028)       (2,279)
                                                       ------        ------
    Net Cash Flows Used In Investing Activities        (9,619)      (16,473)
                                                       ------       -------
    Financing Activities:
    Exercise of stock options                               -           825
    Tax withholding requirements on equity
     awards                                              (417)       (1,113)
    Repurchase and cancellation of common shares            -       (16,420)
    Proceeds from the sale of 49% interest in
     TV Guide                                         122,355             -
    Increase in production obligations                 83,226        70,545
    Repayment of production obligations               (68,031)      (28,505)
    Repayment of other financing obligations             (201)            -
                                                         ----           ---
    Net Cash Flows Provided By Financing
     Activities                                       136,932        25,332
                                                      -------        ------
    Net Change In Cash And Cash Equivalents           (25,506)     (140,958)
    Foreign Exchange Effects on Cash                    1,700           (41)
    Cash and Cash Equivalents - Beginning Of
     Period                                           138,475       371,589
                                                      -------       -------
    Cash and Cash Equivalents - End Of Period        $114,669      $230,590
                                                     ========      ========


    


    LIONS GATE ENTERTAINMENT CORP.

    RECONCILIATION OF NET INCOME TO EBITDA, AS DEFINED AND EBITDA, AS
ADJUSTED

    
                                            Three Months  Three Months
                                               Ended         Ended
                                              June 30,      June 30,
                                                2009          2008
                                                ----          ----
                                               (Amounts in thousands)
    Net income                                 $34,472        $3,519
      Depreciation and amortization              8,195         1,386
      Interest expense                          10,709         7,887
      Interest and other income                   (426)       (2,155)
      Income tax provision                       1,337           669
      Equity interests loss                      1,717         2,186
      Gain on extinguishment of debt            (7,458)            -
                                                ------           ---
    EBITDA                                     $48,546       $13,492
      Stock based compensation                   3,995         3,885
      EBITDA attributable to
       noncontrolling interest                    (512)            -
      Non-recurring charges                      1,012             -
                                                 -----           ---
    EBITDA, as adjusted                        $53,041       $17,377
                                               =======       =======


    
    EBITDA is defined as earnings before interest, income tax provision,
depreciation and amortization, equity interests, and gains on extinguishment
of debt and the sale of equity securities.  EBITDA as defined, is a non-GAAP
financial measure.

    EBITDA as adjusted represents EBITDA as defined above adjusted for stock
based compensation, EBITDA attributable to noncontrolling interest, and
certain non-recurring charges. Stock based compensation represents
compensation expenses associated with stock options, restricted share units
and stock appreciation rights. Non-recurring charges represent legal and other
professional fees associated with a shareholder activist matter.

    Management believes EBITDA as defined, and EBITDA as adjusted to be a
meaningful indicator of our performance that provides useful information to
investors regarding our financial condition and results of operations.
Presentation of EBITDA as defined, and EBITDA as adjusted, is a non-GAAP
financial measure commonly used in the entertainment industry and by financial
analysts and others who follow the industry to measure operating performance.
While management considers EBITDA as defined, and EBITDA as adjusted, to be an
important measure of comparative operating performance, it should be
considered in addition to, but not as a substitute for, net income and other
measures of financial performance reported in accordance with Generally
Accepted Accounting Principles. EBITDA as defined and EBITDA as adjusted, do
not reflect cash available to fund cash requirements. Not all companies
calculate EBITDA as defined or EBITDA as adjusted, in the same manner and the
measure as presented may not be comparable to similarly-titled measures
presented by other companies.
    






    




For further information:

For further information: Peter D. Wilkes of Lionsgate, +1-310-255-3726,
pwilkes@lionsgate.com Web Site: http://www.lionsgate.com


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