GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Lions Gate Entertainment Corp. Reports Operating Results (10-Q)

August 09, 2012 | About:
10qk

10qk

18 followers
Lions Gate Entertainment Corp. (LGF) filed Quarterly Report for the period ended 2012-06-30.

Lions Gate Entertainment Corp. (usa) has a market cap of $1.91 billion; its shares were traded at around $13.4195 with a P/E ratio of 660.5 and P/S ratio of 1.2.

Highlight of Business Operations:

Television revenue included in motion pictures revenue of $37.1 million decreased $6.2 million, or 14.3%, in the three months ended June 30, 2012, as compared to the three months ended June 30, 2011. The decrease in television revenue in the three months ended June 30, 2012 compared to the three months ended June 30, 2011, is mainly due to the titles listed above. The contribution of television revenue from the titles listed above was $24.7 million in three months ended June 30, 2012, compared to $37.2 million in the three months ended June 30, 2011, and the contribution of television revenue from titles not listed above was $12.4 million in the three months ended June 30, 2012, compared to $6.1 million in the three months ended June 30, 2011.

Direct operating expenses of the motion pictures segment of $193.7 million for the three months ended June 30, 2012 were 47.7% of motion pictures revenue, compared to $86.2 million, or 44.8% of motion pictures revenue for the three months ended June 30, 2011. The increase in direct operating expense of the motion pictures segment as a percent of revenue in the three months ended June 30, 2012 is primarily due to the aggregate increase in the film cost of the Summit film assets as a result of recording the film rights of Summit at their estimated fair values due to the application of purchase accounting under generally accepted accounting principles, which results in higher amortization cost in relation to revenue. Investment in film write-downs of the motion pictures segment during the three months ended June 30, 2012 totaled approximately $1.5 million, compared to $0.1 million for the three months ended June 30, 2011. In the three months ended June 30, 2012, there were no write-downs that individually exceeded $1.0 million. Due to the January 2012 acquisition of Summit, we currently expect that direct operating expenses of the motion pictures segment for fiscal 2013 will increase as compared to fiscal 2012.

Direct operating expenses of the television production segment of $52.1 million for the three months ended June 30, 2012 were 79.8% of television revenue, compared to $53.2 million, or 77.4%, of television revenue for the three months ended June 30, 2011. The direct operating expenses as a percent of television revenue were comparable to the three months ended June 30, 2011. In the three months ended June 30, 2012, $2.1 million of charges for write-downs of television film costs were included in the amortization of television programs, compared to charges of $1.6 million in the three months ended June 30, 2011. There were no write-downs that individually exceeded $1.0 million for the three months ended June 30, 2012 and 2011.

The majority of distribution and marketing expenses relate to the motion pictures segment. Theatrical prints and advertising (“P&A”) in the motion pictures segment in the three months ended June 30, 2012 of $116.1 million increased $89.7 million, compared to $26.4 million in the three months ended June 30, 2011, largely due to four wide theatrical releases in the three months ended June 30, 2012, as compared to only one wide theatrical release in the three months ended June 30, 2011. Domestic theatrical P&A from the motion pictures segment in the three months ended June 30, 2012 included P&A incurred on the release of Cabin In The Woods, Madea's Witness Protection, Safe, The Hunger Games, and What to Expect When You're Expecting. Approximately $38.0 million of P&A was incurred on titles that generated less than 5% of theatrical revenue in the three months ended June 30, 2012, of which approximately $18.0 million was P&A incurred in advance for films to be released in subsequent quarters, such as Step Up Revolution, The Expendables 2 and The Twilight Saga: Breaking Dawn - Part 2. Domestic theatrical P&A from the motion pictures segment in the three months ended June 30, 2011 included P&A incurred on the release of Madea's Big Happy Family. In addition, approximately $13.1 million of P&A was incurred on titles that did not contribute significant revenue in the three months ended June 30, 2011, of which $11.0 million was P&A incurred in advance for films released subsequent to that quarter, such as Conan the Barbarian, Warrior, and Abduction. We currently expect that distribution and marketing expenses of the motion pictures segment for fiscal 2013 will increase as compared to fiscal 2012 due to an increase in the number of theatrical releases anticipated in our fiscal 2013 theatrical slate as compared to our fiscal 2012 slate.

Home entertainment distribution and marketing costs on motion pictures and television product in the three months ended June 30, 2012 of $35.6 million increased $9.4 million, or 35.9%, compared to $26.2 million in the three months ended June 30, 2011, primarily due to higher distribution and marketing costs associated with higher motion pictures home entertainment revenues. Home entertainment distribution and marketing costs as a percentage of home entertainment revenues was 24.5% and 28.2% in the three months ended June 30, 2012 and the three months ended June 30, 2011, respectively. The decrease in home entertainment distribution and marketing costs as a percentage of home entertainment revenues was primarily due to an increase in home entertainment revenue from digital media, which requires substantially lower distribution and marketing costs as compared to packaged media.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 1.0/5 (1 vote)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide