Mad Men, digital bright spots as Lionsgate suffers Q2 loss

Michelle Clancy ©RapidTVNews | 10-11-2011
Despite upticks in the company’s TV and digital business, content studio Lionsgate has reported a net loss of $24.6 million for its second quarter, based on revenue of $358.1 million. Recording an overall EBITDA of negative $19.3 million, the owner of TV's Mad Men suffered from the underperformance of its theatrical films in the quarter, it said, as well as the timing of DVD releases. However, it reaped benefits from digitally delivered content and video-on-demand (VOD), and higher-than-expected packaged media revenue from last year’s theatrical slate, which included of one of the company’s highest-grossing films, The Expendables. Revenue from Lionsgate’s digital business increased 123% in the quarter to a record $65 million. Lionsgate’s home entertainment revenue saw a 15% increase year over year, mainly because of the syndication of the first four seasons of Mad Men on the Netflix digital platform more than offset the timing of theatrical titles on the home entertainment release slate discussed previously. Lionsgate also saw savings in distribution and manufacturing expenses that had a direct impact on the quarter’s results. While still a net loss of $24.6 million, it was a better result than one year ago, when Lionsgate reported a net loss of $29.7 million. The improvement was attributable in part to the gain on the sale of Maple Pictures for $11.0 million and a significant increase in equity interest income. Revenue in the second quarter decreased by $98.2 million from the prior year’s second quarter, attributable primarily to underperformance of films in the quarter in comparison to a prior year quarter that included the strong theatrical performance of The Expendables, timing of wide release theatrical titles on DVD and decreased Canadian revenue due to the sale of Maple Pictures. “Although we were disappointed by the performance of our films in the quarter, we were pleased with the strong and growing contributions of all of our other core businesses,” said Lionsgate Co-Chairman and Chief Executive Officer Jon Feltheimer, in a statement. “We believe that our film performance will improve significantly and become more consistent as we release some of the potential franchise films on our upcoming slate, and our television and digital businesses and EPIX channel partnership will continue their strong and profitable growth trajectory.” Overall motion picture revenue for the second quarter was $218.9 million, a decline of 36% from the prior year. Theatrical revenue was $22.3 million in the quarter, a 71% decrease from the prior year’s second quarter.