PR Newswire
SANTA MONICA, Calif. and VANCOUVER, BC, Aug. 9, 2023
First Quarter Revenue of $909 million was Up 2% Year-over-Year
Operating Loss was $16.8 Million; Net Loss Attributable to Lionsgate Shareholders was $70.7 Million or $0.31 Diluted Net Loss Per Share
Adjusted OIBDA of $85.7 Million was Up Significantly Year-over-Year
Trailing Twelve Month Film & Television Library Revenue was a Record $896 Million
Adjusted Net Loss Attributable to Lionsgate Shareholders was $9.8 Million or $0.04 Adjusted Diluted Net Loss Per Share
STARZ Focuses Operations on U.S., U.K. and Canada; Announces Exit of Latin America by December 31st
SANTA MONICA, Calif. and VANCOUVER, BC, Aug. 9, 2023 /PRNewswire/ -- Lionsgate (NYSE: LGF.A, LGF.B) today reported first quarter (quarter ended June 30, 2023) revenue of $908.6 million, operating loss of $16.8 million and net loss attributable to Lionsgate shareholders of $70.7 million or $0.31 diluted net loss per share on 230.2 million diluted weighted average common shares outstanding. Adjusted net loss attributable to Lionsgate shareholders in the quarter was $9.8 million or $0.04 adjusted diluted net earnings per share on 230.2 million diluted weighted average common shares outstanding, with Adjusted OIBDA of $85.7 million.
"I'm pleased to report a strong financial quarter with another record library performance," said Lionsgate CEO Jon Feltheimer. "We continued to execute our strategic agenda culminating in our signing a definitive agreement with Hasbro last week to acquire global entertainment platform eOne. The acquisition checks off all the boxes by adding thousands of titles to our library, growing our portfolio of brands and strengthening our scripted and unscripted television business."
Revenue from Lionsgate's film and television library increased to a record $896 million for the trailing 12 months. Lionsgate ended the quarter with $323 million in available cash and an undrawn revolving credit facility of $1.25 billion. During the quarter, the Company purchased $85 million of its bonds for $61 million, driving a $24 million reduction in its net debt and future cash interest savings.
Studio backlog from the Motion Picture and Television Production segments was $1.5 billion at June 30, 2023.
Subsequent to the end of the quarter, STARZ made a strategic decision to exit Latin America by December 31st and focus its operations on the U.S., U.K. and Canada.
First Quarter Results
Segment Results
Media Networks segment revenue was $381.1 million compared to $381.2 million in the prior year quarter. Segment revenue was driven by growth in domestic streaming revenue and international revenue, offset by lower domestic linear revenue. Segment profit grew to $31.9 million compared to segment losses of $37.0 million in the prior year quarter, driven by growth in international revenue, lower content and operating expenses due to international market closures, and lower operating expenses domestically. Total STARZ global OTT subscribers increased by 100K sequentially on a pro forma basis.
The Studio Business, comprised of the Motion Picture and Television Production segments, reported revenue of $625.0 million, a decrease of 12% from $711.1 million in the prior year quarter. Segment profit of $92.1 million increased by 31% from $70.1 million in the prior year quarter.
Motion Picture segment revenue increased by 46% to $406.5 million compared to $278.8 million in the prior year quarter. Segment profit increased by 37% to $69.2 million compared to $50.5 million in the prior year quarter. Motion Picture revenue and segment profit growth were driven by strength in box office and home entertainment performance of John Wick: Chapter 4, successful multiplatform releases and strong library sales.
Television Production segment revenue decreased to $218.5 million compared to $432.3 million in the prior year quarter. Segment profit increased 17% to $22.9 million compared to $19.6 million in the prior year quarter. Revenue reflects an unfavorable comparison with last year's higher-than-normal content deliveries, while the segment profit growth was driven by favorable year-over-year comparisons in television syndication.
Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2024 first quarter results today, August 9th, at 6:00 PM ET/3:00 PM PT. Interested parties may listen to the live webcast by visiting the events page on the Lionsgate Investor Relations website or via the following link. A full replay will become available this evening by clicking the same link.
About Lionsgate
Lionsgate (NYSE: LGF.A, LGF.B) encompasses world-class motion picture and television studio operations aligned with the STARZ premium global subscription platform to bring a unique and varied portfolio of entertainment to consumers around the world. The Company's film, television, subscription and location-based entertainment businesses are backed by a 18,000-title library and a valuable collection of iconic film and television franchises. A digital age company driven by its entrepreneurial culture and commitment to innovation, the Lionsgate brand is synonymous with bold, original, relatable entertainment for audiences worldwide.
For further information, investors should contact:
Nilay Shah
310-255-3651
[email protected]
For media inquiries, please contact:
Peter Wilkes
310-255-3726
[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, but not limited to: changes in our business strategy including the plan to potentially spin-off our studio business; the substantial investment of capital required to produce and market 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; potential adverse reactions or changes to business or employee relationships; the impact of global pandemics on our business; weakness in the global economy and financial markets, including a recession and bank failures; wars, such as Russia's invasion of Ukraine, terrorism, and international conflicts that could cause significant economic disruption and political and social instability; labor disruptions or strikes, such as the impact of the strikes by the Writers' Guild of America and the from the Screen Actors Guild – American Federation of Television and Radio Artists; and the other risk factors set forth in Lionsgate's Form 10-Q filed with the Securities and Exchange Commission on August 9, 2023. 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 June 30, 2023, which has been posted on the Company's website at http://investors.lionsgate.com/financial-reports/sec-filings. Trending schedules containing certain financial information will also be available at https://investors.lionsgate.com/financial-reports/quarterly-results/2024.
LIONS GATE ENTERTAINMENT CORP. CONSOLIDATED BALANCE SHEETS | |||
June 30, | March 31, | ||
(Unaudited, amounts in millions) | |||
ASSETS | |||
Cash and cash equivalents | $ 322.7 | $ 272.1 | |
Accounts receivable, net | 516.3 | 582.1 | |
Other current assets | 277.7 | 264.2 | |
Total current assets | 1,116.7 | 1,118.4 | |
Investment in films and television programs and program rights, net | 3,008.1 | 2,947.9 | |
Property and equipment, net | 88.5 | 89.5 | |
Investments | 64.5 | 64.7 | |
Intangible assets | 1,265.6 | 1,300.1 | |
Goodwill | 1,289.5 | 1,289.5 | |
Other assets | 629.3 | 616.1 | |
Total assets | $ 7,462.2 | $ 7,426.2 | |
LIABILITIES | |||
Accounts payable | $ 350.3 | $ 368.1 | |
Content related payables | 203.1 | 184.1 | |
Other accrued liabilities | 280.2 | 273.4 | |
Participations and residuals | 526.6 | 549.3 | |
Film related obligations | 1,314.0 | 1,007.2 | |
Debt - short term portion | 43.6 | 41.4 | |
Deferred revenue | 187.7 | 147.2 | |
Total current liabilities | 2,905.5 | 2,570.7 | |
Debt | 1,887.1 | 1,978.2 | |
Participations and residuals | 347.4 | 329.6 | |
Film related obligations | 858.8 | 1,016.4 | |
Other liabilities | 304.7 | 317.9 | |
Deferred revenue | 51.3 | 52.0 | |
Deferred tax liabilities | 32.0 | 31.8 | |
Total liabilities | 6,386.8 | 6,296.6 | |
Commitments and contingencies | |||
Redeemable noncontrolling interest | 347.2 | 343.6 | |
EQUITY | |||
Class A voting common shares, no par value, 500.0 shares authorized, 83.5 shares issued | 672.9 | 672.3 | |
Class B non-voting common shares, no par value, 500.0 shares authorized, 148.0 shares | 2,431.2 | 2,430.9 | |
Accumulated deficit | (2,516.3) | (2,439.6) | |
Accumulated other comprehensive income | 138.6 | 120.9 | |
Total Lions Gate Entertainment Corp. shareholders' equity | 726.4 | 784.5 | |
Noncontrolling interests | 1.8 | 1.5 | |
Total equity | 728.2 | 786.0 | |
Total liabilities, redeemable noncontrolling interest and equity | $ 7,462.2 | $ 7,426.2 | |
LIONS GATE ENTERTAINMENT CORP. CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Three Months Ended | |||
June 30, | |||
2023 | 2022 | ||
(Unaudited, amounts in millions, | |||
Revenues | $ 908.6 | $ 893.9 | |
Expenses | |||
Direct operating | 481.2 | 596.5 | |
Distribution and marketing | 244.2 | 211.5 | |
General and administration | 123.6 | 103.7 | |
Depreciation and amortization | 44.4 | 42.4 | |
Restructuring and other | 32.0 | 8.0 | |
Total expenses | 925.4 | 962.1 | |
Operating loss | (16.8) | (68.2) | |
Interest expense | (62.0) | (46.1) | |
Interest and other income | 1.9 | 1.3 | |
Other expense | (5.7) | (5.0) | |
Gain (loss) on extinguishment of debt | 21.2 | (1.3) | |
Gain on investments | — | 1.8 | |
Equity interests income (loss) | (0.3) | 0.9 | |
Loss before income taxes | (61.7) | (116.6) | |
Income tax provision | (9.8) | (6.0) | |
Net loss | (71.5) | (122.6) | |
Less: Net loss attributable to noncontrolling interests | 0.8 | 3.6 | |
Net loss attributable to Lions Gate Entertainment Corp. shareholders | $ (70.7) | $ (119.0) | |
Per share information attributable to Lions Gate Entertainment Corp. | |||
Basic net loss per common share | $ (0.31) | $ (0.53) | |
Diluted net loss per common share | $ (0.31) | $ (0.53) | |
Weighted average number of common shares outstanding: | |||
Basic | 230.2 | 225.6 | |
Diluted | 230.2 | 225.6 | |
LIONS GATE ENTERTAINMENT CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
Three Months Ended | |||
June 30, | |||
2023 | 2022 | ||
(Unaudited, amounts in millions) | |||
Operating Activities: | |||
Net loss | $ (71.5) | $ (122.6) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 44.4 | 42.4 | |
Amortization of films and television programs and program rights | 359.9 | 472.0 | |
Amortization of debt financing costs and other non-cash interest | 6.8 | 7.2 | |
Non-cash share-based compensation | 16.5 | 8.4 | |
Other amortization | 11.8 | 23.1 | |
Content impairments | 28.0 | — | |
(Gain) loss on extinguishment of debt | (21.2) | 1.3 | |
Equity interests (income) loss | 0.3 | (0.9) | |
Gain on investments | — | (1.8) | |
Deferred income taxes | 0.2 | 0.2 | |
Changes in operating assets and liabilities: | |||
Proceeds from the termination of interest rate swaps | — | 188.7 | |
Accounts receivable, net | 76.7 | 12.0 | |
Investment in films and television programs and program rights, net | (445.4) | (608.4) | |
Other assets | (1.5) | (6.6) | |
Accounts payable and accrued liabilities | (20.3) | (51.8) | |
Participations and residuals | (7.4) | (26.4) | |
Content related payables | 12.2 | 49.3 | |
Deferred revenue | 39.7 | 13.7 | |
Net Cash Flows Provided By (Used In) Operating Activities | 29.2 | (0.2) | |
Investing Activities: | |||
Proceeds from the sale of other investments | — | 2.3 | |
Investment in equity method investees and other | — | (7.5) | |
Increase in loans receivable | (0.9) | — | |
Capital expenditures | (8.9) | (9.6) | |
Net Cash Flows Used In Investing Activities | (9.8) | (14.8) | |
Financing Activities: | |||
Debt - borrowings, net of debt issuance and redemption costs | 490.0 | 518.5 | |
Debt - repurchases and repayments | (560.1) | (715.2) | |
Film related obligations - borrowings | 569.9 | 522.9 | |
Film related obligations - repayments | (423.7) | (152.6) | |
Settlement of financing component of interest rate swaps | — | (134.5) | |
Purchase of noncontrolling interest | (0.6) | — | |
Distributions to noncontrolling interest | — | (1.7) | |
Exercise of stock options | 0.1 | 3.5 | |
Tax withholding required on equity awards | (15.1) | (1.1) | |
Net Cash Flows Provided By Financing Activities | 60.5 | 39.8 | |
Net Change In Cash, Cash Equivalents and Restricted Cash | 79.9 | 24.8 | |
Foreign Exchange Effects on Cash, Cash Equivalents and Restricted Cash | 1.2 | (3.5) | |
Cash, Cash Equivalents and Restricted Cash - Beginning Of Period | 313.0 | 384.6 | |
Cash, Cash Equivalents and Restricted Cash - End Of Period | $ 394.1 | $ 405.9 | |
LIONS GATE ENTERTAINMENT CORP.
SEGMENT INFORMATION
The Company's reportable segments have been determined based on the distinct nature of their operations, the Company's internal management structure, and the financial information that is evaluated regularly by the Company's chief operating decision maker.
The Company has three reportable business segments: (1) Motion Picture, (2) Television Production and (3) Media Networks. We refer to our Motion Picture and Television Production segments collectively as our Studio Business.
Studio Business:
Motion Picture. Motion Picture consists of the development and production of feature films, acquisition of North American and worldwide distribution rights, North American theatrical, home entertainment and television distribution of feature films produced and acquired, and worldwide licensing of distribution rights to feature films produced and acquired.
Television Production. Television Production consists of the development, production and worldwide distribution of television productions including television series, television movies and mini-series, and non-fiction programming. Television Production includes the licensing of Starz original series productions to Starz Networks and LIONSGATE+, and the ancillary market distribution of Starz original productions and licensed product. Additionally, the Television Production segment includes the results of operations of 3 Arts Entertainment.
Media Networks Business:
Media Networks. Media Networks consists of the following product lines (i) Starz Networks, which includes the domestic distribution of STARZ branded premium subscription video services through over-the-top ("OTT") platforms, on a direct-to-consumer basis through the Starz App, and through U.S. multichannel video programming distributors ("MVPDs") including cable operators, satellite television providers and telecommunication companies (collectively, "Distributors") (in the aggregate, the "Starz Domestic Platform"); and (ii) LIONSGATE+, which represents revenues primarily from the OTT distribution of the Company's STARZ branded premium subscription video services outside of the U.S. The Starz Domestic Platform together with the LIONSGATE+ platforms are referred to as the "Starz Platforms".
In the ordinary course of business, the Company's reportable segments enter into transactions with one another. The most common types of intersegment transactions include licensing motion pictures or television programming (including Starz original productions) from the Motion Picture and Television Production segments to the Media Networks segment. While intersegment transactions are treated like third-party transactions to determine segment performance, the revenues (and corresponding expenses, assets, or liabilities recognized by the segment that is the counterparty to the transaction) are eliminated in consolidation and, therefore, do not affect consolidated results.
LIONS GATE ENTERTAINMENT CORP. SEGMENT INFORMATION (Continued) | |||
Segment information is presented in the table below: | |||
Three Months Ended | |||
June 30, | |||
2023 | 2022 | ||
(Unaudited, amounts in millions) | |||
Segment revenues | |||
Studio Business: | |||
Motion Picture | $ 406.5 | $ 278.8 | |
Television Production | 218.5 | 432.3 | |
Total Studio Business | 625.0 | 711.1 | |
Media Networks | 381.1 | 381.2 | |
Intersegment eliminations | (97.5) | (198.4) | |
$ 908.6 | $ 893.9 | ||
Segment profit | |||
Studio Business: | |||
Motion Picture | $ 69.2 | $ 50.5 | |
Television Production | 22.9 | 19.6 | |
Total Studio Business(1) | 92.1 | 70.1 | |
Media Networks | 31.9 | (37.0) | |
Intersegment eliminations | (7.9) | (5.1) | |
Total segment profit(1) | $ 116.1 | $ 28.0 | |
