Lionsgate Swings to Fourth Quarter Profit

Lions Gate/Everett Collection

Lionsgate posts a profitable fourth quarter on lower film releasing costs, even as the full-year 2011 loss widened on one-time charges.

TORONTO – Lionsgate Entertainment on Tuesday reported a widened loss for fiscal 2011, even as it swung to a fourth quarter profit on lower movie P&A expenses and an EPIX investment gain.

Despite higher theatrical, home entertainment and international film revenue, Vancouver-based Lionsgate recorded a loss of $53.6 million for the year to March 31, 2011, compared to a loss of $19.5 million in 2010.

Full-year revenue was $1.58 billion, up 6 per cent on a year-earlier $1.49 billion.

The full-year loss came mainly from increased interest expenses, a $14.5 million non-cash loss on removing debt related to a July, 2010 deleveraging transaction to fend off a hostile takeover bid from activist shareholder Carl Icahn, and an increased equity interest loss due mainly from Lionsgate's interest in EPIX.

The raised interest charges came as Lionsgate looks to sell off non-core assets to in part pay down debt.

The mini-studio is understood to be close to selling off a minority stake in Maple Pictures, the Canadian indie distributor.

The fourth quarter, by contrast, saw Lionsgate swing to a profit of $46.1 million, against a year-earlier loss of $22.3 million, on revenue of $377 million, down from revenue of $401 million in the fourth quarter of 2010.

The fourth quarter earnings came from lower theatrical P&A expenses, record digital revenue and a boost in equity interest income from its stake in EPIX.

“Strong performances from our television business and our filmed entertainment library contributed to financial results that exceeded our preliminary estimates,” Lionsgate CEO Jon Feltheimer said in a statement Tuesday after his company earlier in May warned on its full-year 2011 results.

“We were particularly pleased by near record international sales, reflecting the demand for content in the world marketplace, and rapid growth of high margin digital and on demand revenue,” he added.

In full-year 2011, overall full-year motion picture revenue at Lionsgate was up 10 per cent to $1.23 billion.

Theatrical revenue rose 48% to $205.9 million, due to box office from movies like The Expendables, Kick Ass and Tyler Perry’s Why Did I Get Married Too?

Lionsgate’s home entertainment revenue from both motion pictures and TV rose 5 per cent to $690 million in 2011.

And TV revenue iin the motion picture segement rose 3 per cent to $139.8 million.

Elsewhere, international motion picture revenue was up 72 per cent to $126.5 million, excluding Lionsgate U.K. where full year revenue rose 7 per cent to $79.2 million.

Mandate Pictures’ revenue fell 61 per cent to $38.7 million, due to a smaller slate.

And TV  production revenue rose by only 1 per cent to $353.2 million, while domestic series licensing from Lionsgate’s TV distribution and syndication business increased 48% to $136.5 million.

Lionsgate executives will hold an analyst call on Wednesday morning to discuss their full-year and fourth quarter results.