Lionsgate Swings to Q2 Loss Due to Carl Icahn Fight Costs

2:00 PM PST 11/09/2010 by Etan Vlessing

Vancouver-based studio was down $29.7 million compared to earnings of $31.7 million in same period in 2009.

The cost of fending off Carl Icahn continues to weigh down the bottom line at Lionsgate Entertainment.

Vancouver-based Lionsgate on Tuesday reported a second quarter loss of $29.7 million, compared to earnings of $31.7 million in the same period of 2009, as overall revenue jumped 25% to $456.3 million.

The swing to a loss during the three months to Sept. 30 came as the mini-studio swallowed higher theatrical distribution and marketing costs from four wide releases during the latest quarter, including The Expendables and The Last Exorcism, against two releases in the second quarter of 2009.

But the latest frame for Lionsgate also included equity interest losses of $20.7 million and a $14.5 million non-cash charge associated a July 20 debt-to-equity conversion that raised the ire of Icahn, Lionsgate’s largest shareholder, and reduced his overall holding.

The mini-major also recorded $4 million in legal defense and other costs from fighting off Icahn’s long and bitter battle to seize control of
Lionsgate.

Overall motion picture revenue during the second quarter came to $341 million, up 23% year-over-year.

Impressive boxoffice from The Expendables helped push theatrical revenue up 151% to $76 million.

That helped offset a 5% dip in Lionsgate's home entertainment revenue to $132.1 million.

And television in the motion picture segment contributed revenue of $78.3 million in the second quarter, up 15% from 2009 levels, while international motion picture revenue rose 161% to $37.5 million.

Elsewhere, Lionsgate U.K. revenue grew 16% to $15.6 million, while Mandate Pictures' revenue fell 67% to $8.5 million due to a smaller slate.

And TV production revenue, a key driver for Lionsgate as it diversifies away from theatrical film, rose 30% to $115.3 million.

Lionsgate senior management will hold an analyst call Wednesday morning to discuss their latest financial results.

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