Net Income Drops at Lionsgate

SANTA MONICA/VANCOUVER, June 15: Independent studio
Lionsgate has reported a fiscal 2006 net profit of $6.1 million, down some 70
percent from the previous year’s $20.3 million, despite a 13-percent gain in
revenues to $951.2 million.

Free cash flow was also up, 11 percent, to $102.8
million, but EBITDA more than halved from $52.9 million to $20.6 million.
Commenting on the results, CEO Jon
Feltheimer noted, "We achieved strong growth throughout our core
businesses in fiscal 2006, generating more than $100 million in free cash flow
and over $950 million in revenues while continuing to invest in our businesses,
add value to our library and strengthen our balance sheet. We currently have
the strongest cash position and one of the strongest filmed entertainment
backlogs in our history. We plan to continue to invest in our business
organically and through acquisitions while adding value to our content through
exploitation of fresh distribution platforms and new and incremental digital
revenue streams."

Television production revenues showed the strongest
gains, rising 60 percent to $82.8 million, led by deliveries of 82 hours of
one-hour drama series, 10 half-hours of 30-minute drama series, international
sales of one-hour series and television movies. Principal revenue drivers were
the U.S. deliveries of Wildfire, The Dead Zone, Missing, The
Cut and Weeds. Lionsgate has nine prime-time series—eight
cable and one broadcast—scheduled to air in fiscal 2007.

Television revenues, primarily derived from pay-TV
license fees and pay per view, were up 18 percent to $72.9 million, driven by Saw, Diary
of a Mad Black Woman, Crash and The Cookout.

Theatrical revenues were up just 2 percent to $145.5
million, with highlights including Saw II, Madea's
Family Reunion and Hostel, as well as the Academy
Award-winning Crash. Video revenues fared better, up 13 percent to
$465.3 million, thanks to Crash, Saw II and Diary
of a Mad Black Woman, among others, plus the family-friendly releases Barbie
and the Magic of Pegasus and Barbie Mermaidia.
International revenues, however, dropped 23 percent to $61.2 million.