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Metro Goldwyn Mayer announced strong results for the first quarter of 2014, although the revenue and earnings are down from the same period one year ago, when the results of the Bond movie Skyfall were blowing up their bottom line.
The studio also announced that Ken Schapiro is departing as chief strategic officer after playing a key role in restructuring the company following its exit from bankruptcy nearly three years ago.
Shapiro said he was leaving by his own choice for family reasons.
MGM CEO Gary Barber said, “I will miss his counsel and daily friendship. Having known Ken for 25 years and worked with him for 12 years, I know he will be successful in whatever endeavor he chooses, and we wish him nothing but the best.”
?Schapiro said in a statement: “Being part of the restructuring of MGM has been an amazing challenge and an opportunity of a lifetime. With MGM in its best financial position ever, I have decided to spend more time with my family and will then look for my next challenge. I am very grateful for the opportunity that I have had at MGM, and I will always remain close to Gary and the entire MGM Management team.”
MGM Holdings had first quarter 2014 revenue of $336.5 million, which was down about 30 percent from the first quarter of 2013.
Net income for the quarter was $44.6 million, which was down about 22 percent from the same quarter a year earlier.
Still there was much to celebrate, starting with bank debt, which was zero at the end of the quarter compared to $105 million a year earlier.
Television licensing revenue was $116.4 million for the quarter, up from $109 million for the same quarter last year. The company said that was mostly from Vikings and Teen Wolf, as well as library content.
Revenue from branded TV channels, interactive gaming, consumer products, music performance and other ancillary businesses was up to $47 million compared to $19 million in the same quarter of 2013.
Meanwhile operating expenses were down to $198.9 million, a decrease of $83.9 million from the $282.8 million in 2013. That was due to lower film and TV costs and expenses related to the release of The Hobbit: The Desolation of Smaug, Vikings and Teen Wolf.
Distribution and marketing expenses were also down to $40 million, compared to $80 million a year earlier. That was due to lower costs for the home-video marketing of the Bond movies.
Investors were cheered by the EBITDA (a form of cash flow) of $98 million, even though it was lower than the same quarter last year. It included higher TV revenues.
“They smoked everyone’s expectations, including MGM’s expectations off the back of The Hobbit and TV licensing revenue,” said Steven Azarbad, chief investment officer of Maglan Capital, which owns a small stake in MGM Holdings.
The privately traded MGM stock is now at about $76 a share, well above where it was trading a year ago. There has been no new indications that the company plans a larger public offering.
MGM also appears to have a strong slate of films coming up including the imminent release of 22 Jump Street, a third Hobbit movie, Hercules, If I Stay, Hot Tub Time Machine 2 and Poltergeist. The next James Bond movie is expected to be released in November 2015.
MGM’s overall liquidity increased by $110 million. The cash on hand grew from $42 million at the end of last year to $49 million at the end of the quarter.
MGM got a contribution form its 19 percent stake in the Epix pay TV channel of $5.3 million compared to $5.1 million a year earlier.
MGM has now bought back $60 million of its own stock and has about $90 million more available for additional stock buybacks.
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