Lionsgate dogged by b.o. underperformers

Mini-major posts loss of $163 mil for year ending March 31

TORONTO -- Lionsgate reported record full-year revenue on higher home entertainment and TV revenue Monday, but tumbled deeper into the red for fiscal 2009 thanks to a string of boxoffice disappointments.

The mini-major posted a loss of $163 million on revenue of $1.46 billion for the year ending March 31, compared with a loss of $74 million in 2008 on revenue of $1.36 billion.

Lionsgate, which will hold an analyst call Tuesday morning, has previously forecast a return to profitability in 2010. The 2009 loss, however, exceeded the $135 million loss forecast by the company last February after disappointing third-quarter boxoffice for "The Spirit," "Punisher: War Zone" and "Transporter 3."

In addition to higher operating expenses, Lionsgate recorded a $36.1 million charge due to the number of returned DVDs from its distribution of HIT Entertainment's family entertainment titles.

Full-year motion picture revenue rose 7% to $1.23 billion, compared with a year-earlier $1.15 billion, as higher theatrical, home entertainment and TV revenue from the motion picture segment offset declines in international revenue and at Mandate Pictures.

At the same time, full-year theatrical distribution and marketing expenses rose 1.3% to $330.5 million. Lionsgate said theatrical marketing and distribution expenses will fall by more than $100 million in fiscal 2010.

Within the motion picture segment for 2009, theatrical revenue rose 17% to $223.3 million, compared with $191.7 million in 2008, as fourth-quarter boxoffice from Tyler Perry's "Madea Goes to Jail," "My Bloody Valentine 3-D" and "The Haunting in Connecticut" offset earlier theatrical underperformers.

Lionsgate's home entertainment revenue jumped 5% to $675.6 million for the full year, which included $34.9 million from DVD sales for TV programming including "Weeds" and "Mad Men."

The studio also posted a record $279 million in library revenue in 2009.

TV revenue in the motion picture segment rose 47% to $170.3 million due to a strong pay TV slate, the company reported.

Lionsgate's international revenue, however, fell 10% to $142.3 million, and Mandate Pictures' revenue of $45.5 million was off 13% from the prior year.

And while TV production revenue rose 6% to $222.2 million for the full-year, it fell short of a company forecast last February of $250 million.

Lionsgate said it had cash and cash equivalents of $138.5 million on hand March 31. That comes before last week's sale of a 49% stake in its TV Guide property to One Equity Partners, JPMorgan Chase's global private equity investment arm, for $123 million in cash.

Those proceeds could yet be put to use if activist shareholder Carl Icahn, who has a 14.5% stake in Lionsgate, carries through on a threat to wage a proxy war with the company's management.
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