Lionsgate reports lower Q4 earnings

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TORONTO -- Despite higher revenue, particularly from TV and home entertainment windows for its theatrical titles, Canadian mini-major Lionsgate posted lower fourth-quarter earnings Wednesday.

The Vancouver company said earnings for the three months ending March 31 came to $25 million, down 36% from $38.6 million a year ago. Revenue during the latest quarter came to $331.6 million, up 6% from a year-earlier $312.3 million and above the estimate of $322 million.

For the full year, Lionsgate posted revenue of $976.7 million, compared with $945.3 million in 2006, with earnings jumping to $27.5 million, compared with $6.1 million a year ago.

TV revenue from past theatrical titles helped drive earnings for the indie producer. Total motion picture revenue for Lionsgate's fiscal year rose 6% to $858.2 million as gains in TV and home entertainment revenue offset a decline in theatrical revenue.

TV revenue stood at $109.3 million last year, up 50% from $72.9 million in fiscal 2006, driven by TV windows for such theatrical titles as "Hostel," "Saw II," Tyler Perry's "Madea's Family Reunion" and "Lord of War."

By contrast, Lionsgate's theatrical revenue last year stood at $107.9 million, off 26% from $145.5 million in 2006. The main contributors here were the theatrical releases of "Saw III," "Crank," "Employee of the Month" and Tyler Perry's "Daddy's Little Girls."

Library revenue also performed for Lionsgate, rising 21% to $256 million in fiscal 2007, compared with 2006.

By contrast, TV production revenue of $118.5 million was off 11% from $132.9 million in 2006 as fewer episodes were delivered compared with the most recent year because of timing, the company said.

"We are pleased that our entire diversified portfolio of businesses contributed to our strong financial performance in fiscal 2007," Lionsgate CEO Jon Feltheimer said ahead of a planned analyst call Thursday.

"With a healthy cash position, strong free-cash-flow from our library, a large filmed entertainment backlog and a new theatrical slate financing agreement in place, we are well-positioned to continue to build asset value for our shareholders," he said.

Lionsgate said it had cash and auction rate securities totaling $289 million on its balance sheet at the end of fiscal 2007, as well as a filmed entertainment backlog of $320.2 million.

The company said Tuesday that it has closed a 23-picture film-financing deal worth $400 million with a consortium, dubbed Pride Pictures, that includes JPMorgan Securities, Goldman Sachs, Jefferies and a group of private investors who participated in a $35 million private-equity component of the financing (HR 5/30).
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