Lions Gate Entertainment Corp. (LGF-A) Tops Q3 EPS by 25c

LIONSGATE REPORTS RESULTS FOR THIRD QUARTER 2018

February 8, 2018 4:05 PM EST

Third Quarter Revenue is $1.14 Billion, Net Income Attributable to Lionsgate Shareholders is $193 Million or Basic EPS of $0.92; Adjusted OIBDA is $178 Million

Company Reports $140 Million in Free Cash Flow in the Quarter

Company Resumes Quarterly Cash Dividend of $0.09 per Common Share

SANTA MONICA, Calif. and VANCOUVER, British Columbia, Feb. 8, 2018 /PRNewswire/ -- Global content leader Lionsgate (NYSE: LGF.A, LGF.B) today reported revenue of $1.14 billion, net income attributable to Lionsgate shareholders of $193 million, or basic EPS of $0.92 on 208.8 million weighted average common shares outstanding, and adjusted net income attributable to Lionsgate shareholders of $107 million, or adjusted basic EPS of $0.51, for the third quarter of fiscal 2018 (quarter ended December 31, 2017).  The Company also reported operating income of $80 million, adjusted OIBDA of $178 million, and free cash flow of $140 million in the quarter, while paying down $113 million of corporate debt. 

Net income and basic EPS include a one-time income tax benefit of $165 million reflecting the impact of the lower U.S. income tax rate under the new tax laws on our net deferred tax liabilities.

"Our strong performance in the quarter, with robust contributions from our Motion Picture Group and Starz, keeps us on track for our fiscal year expectations," said Lionsgate Chief Executive Officer Jon Feltheimer.  "With this financial strength, we're pleased to announce that our Board has approved the resumption of our quarterly cash dividend, returning value to our shareholders as we continue to grow our Company.  Despite a disruptive operating environment, the quarter shows our success in creating premium content that cuts through the clutter of a crowded marketplace and our ability to supply it to a diverse array of media companies."

Revenue in the quarter of $1.14 billion increased 52% from $752 million in the prior year quarter.  Net income attributable to Lionsgate shareholders of $193 million, or basic EPS of $0.92 per share, compared to a net loss of $31 million, or basic loss of $0.19 per share, in the prior year quarter.  Adjusted OIBDA of $178 million and operating income of $80 million in the quarter compared to adjusted OIBDA of $86 million and operating loss of $7 million in the prior year quarter, respectively.

The Company announced that it has resumed its quarterly cash dividend of $0.09 per each class of common shares payable on May 1, 2018, to shareholders of record as of March 31, 2018.

Third Quarter Results

With Lionsgate's acquisition of Starz, fiscal 2018 third quarter results are not directly comparable to prior reporting periods, so the following quarterly segment results will be discussed as compared to the prior year quarter on a combined pro forma basis.

The Media Networks segment revenues increased 6% to $382.9 million driven by higher over-the-top (OTT) revenue growth and revenues from worldwide digital media licensing arrangements, offset in part by subscriber losses at certain MVPD's.  Ratings for Starz original series grew for the third year in a row.   Segment profits increased 6% in the quarter to $128.3 million.

Motion Picture segment revenues increased 14% to $539.1 million due to the strong domestic theatrical box office performance of the breakout hit Wonder and the continued strong international performances of La La Land and American Assassin.  Segment profits of $54.3 million compared to $55.9 million in the prior year quarter. 

Television Production segment revenues of $227.3 million compared to $231.0 million in the prior year quarter.    Television production revenue was comparable to the prior year quarter as increased revenues from deliveries of television series were partially offset by a decrease in syndicated licensing revenues.  Segment profits of $22.7 million compared to $27.5 million in the prior year quarter.

Lionsgate's backlog, or already contracted future revenue on the licensing of film and television product not yet recorded, was $1.2 billion at December 31, 2017.

Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2018 third quarter financial results at 5:00 PM ET/2:00 PM PT this afternoon, February 8. Interested parties may listen to the live webcast by visiting the events page on the Lionsgate corporate website or via https://services.choruscall.com/links/lgf180208ldOgQ2Fz.html. A full replay will become available this afternoon, February 8, by clicking the same link. 

ABOUT LIONSGATE

The first major new studio in decades, Lionsgate is a global content platform whose films, television series, digital products and linear and over-the-top platforms reach next generation audiences around the world.  In addition to its filmed entertainment leadership, Lionsgate content drives a growing presence in interactive and location-based entertainment, gaming, virtual reality and other new entertainment technologies.  Lionsgate's content initiatives are backed by a 16,000-title film and television library and delivered through a global licensing infrastructure.  The Lionsgate brand is synonymous with original, daring and ground-breaking content created with special emphasis on the evolving patterns and diverse composition of the Company's worldwide consumer base.  

For further information, investors should contact:James Marsh310-255-3651[email protected]

For media inquiries, please contact:Peter Wilkes310-255-3726[email protected]

The matters discussed in this press release include forward-looking statements, including those regarding the performance of future fiscal years.  Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including the substantial investment of capital required to produce and market films and television series, increased costs for producing and marketing feature films and television series; budget overruns; limitations imposed by our credit facilities and notes; unpredictability of the commercial success of our motion pictures and television programming; risks related to acquisition and integration of acquired businesses; the effects of dispositions of businesses or assets, including individual films or libraries; the cost of defending our intellectual property; technological changes and other trends affecting the entertainment industry; litigation relating to the acquisition of Starz; impact of the Tax Cuts and Jobs Act; other trends affecting the entertainment industry; and the other risk factors as set forth in Lionsgate's Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 25, 2017, as amended in Lionsgate's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on February 8, 2018, which risk factors are incorporated herein by reference.  The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.

Additional Information Available on Website

The information in this press release should be read in conjunction with the financial statements and footnotes contained in the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2017, which will be posted on the Company's website at www.lionsgate.com/corporate/reports/sec-filings, when filed with the Securities and Exchange Commission.  Trending schedules containing certain financial information will also be available at www.lionsgate.com/corporate/reports.

 

LIONS GATE ENTERTAINMENT CORP.

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