Lionsgate Reports Q3 Loss

SANTA MONICA: For the third quarter, Lionsgate reported a net loss of $93.4 million, as compared with the year-ago profit of $7.3 million, despite an 8-percent increase in revenues to $324 million.

The independent studio attributed the loss to the underperformance of theatrical-wide releases in the period, along with a reserve taken for its North American DVD distribution deal with HIT Entertainment, based on what Lionsgate called a "softness" in the preschool non-theatrical retail market.

"During the quarter, we were negatively impacted by some of the same broad economic factors reported by other companies in the media and entertainment sector," said Jon Feltheimer, the co-chairman and CEO of the studio. "However, the primary factor contributing to this quarter’s loss was the underperformance of our feature film slate. This will have a significant negative impact on our EBITDA and free cash flow for the whole year. Looking forward to fiscal 2010, with the solid performance of our television, home entertainment, international and library businesses, coupled with a smaller film slate and lower associated marketing costs, we anticipate significant positive EBITDA next year."

Motion picture revenues overall fell 2 percent to $254.9 million as declines in home entertainment, international and Mandate Pictures offset growth in theatrical and television from motion pictures. Theatrical revenues gained 9 percent to $69.3 million. Home-entertainment revenue from all segments was $101.5 million, an 11-percent decline. Television revenue included in the motion-picture segment was $39 million, a 25-percent rise, led by titles such as Tyler Perry’s Meet The Browns, Rambo and The Bank Job. International revenue fell 8 percent to $41.1 million.

Television production revenue in the quarter was $69.2 million, an increase of 82 percent, thanks to more deliveries of TV episodes to U.S. broadcasters, $14.5 million from the joint venture with Ish Entertainment and revenue increases from Debmar-Mercury.