Lionsgate Posts Loss, Despite 'Hunger Games' Fattening Revenue Line

Lionsgate Official Logo - H 2012

Lionsgate Official Logo - H 2012

UPDATED: Releasing its financial results for the year ending March 31, the indie studio used earnings from the teen blockbuster to aggressively take balance sheet write-downs.

TORONTO – Lionsgate’s global The Hunger Games blockbuster drove fourth quarter revenue up sharply, even as the indie studio posted a loss on one-time write-downs related to its Summit Entertainment takeover.  

Missing the street consensus, Vancouver-based Lionsgate reported a loss of $22.7 million for the three months to March 31, compared to a profit of $48.6 million in the same period of 2011.

Q4 revenue rose sharply to $645.2 million, from a year-earlier $376.9 million.

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Lionsgate used momentum from The Hunger Games to take opportune write-downs, including $51 million for Summit Entertainment acquisition costs.

These included $12 million in transaction and severance costs, $26 million for stepped-up purchase accounting, and $13 million for stock appreciation rights after a sharp rise in the company’s stock price ahead of the release of the teen tentpole.

Lionsgate also pointed to the impact of theatrical marketing costs during the latest quarter, and an additional $16 million in advance theatrical marketing costs for fiscal 2013 film releases.

For full year 2012, Lionsgate recorded a loss of $39.1 million, compared to a loss of $30.3 million in 2011, on revenue virtually unchanged at $1.58 billion.

“With substantially all of the profitability of the first Hunger Games film and this November's release of The Twilight Saga: Breaking Dawn – Part 2 still ahead of us, we have great visibility and have set the stage for anticipated strong EBITDA, free cash flow and earnings in the years ahead,” Lionsgate CEO Jon Feltheimer, as the Q4 write-downs set the table for the indie studio’s post-Summit takeover strategy.

Lionsgate also posted record TV revenues of $397 million for 2012, and theatrical revenue growth offsetting declines in home entertainment, international film and pay TV revenue, owing to a smaller theatrical slate.  

During fiscal 2012, filmed entertainment library revenues rose 11 percent to $416 million, while overall motion picture revenue was off 3 percent to $1.19 billion.

Within the motion picture segment, theatrical revenue was $208.9 million, up 2 percent from 2011, due to the strength of the first eight days of release for The Hunger Games from March 23 to 31.        

Lionsgate's home entertainment revenue from both motion pictures and television was $683.5 million for 2012, against $690.0 million in the prior year.  

The indie studio will hold an analyst call to discuss its latest results on Thursday morning.