Lions Gate Entertainment Corp. (LGF) recently delivered fourth-quarter and fiscal 2010 results. Total revenue for the year climbed to $1,583.7 million, up 8% from the prior-year, driven by robust performance of its television production segment and revenue contribution of $113.6 million from TV Guide Network and TVGuide.com.
Higher revenue aided by a fall in theatrical and home entertainment marketing and distribution costs helped Lions Gate, the independent TV and film studio, to post a smaller loss. The company reported a net loss of 17 cents a share for fiscal 2010 versus a loss of $1.53 in the prior-year.
Revenue for the quarter under review dropped 7% to $430.6 million. Lions Gate posted a net loss of 19 cents a share for the quarter that fared better than the Zacks Consensus Estimate loss of 28 cents.
Lions Gate delivered an adjusted EBITDA of $128.5 million for fiscal 2010 compared to an EBITDA loss of $122.9 million in the year-ago quarter.
By segment, Motion Pictures revenue for fiscal 2010 fell 9% to $1,119.2 million. Revenue declined across Theatrical (down 38% to $139.4 million), Home Entertainment (down 16% to $540.4 million) and International (down 10% to $73.4 million) segments. However, the decrease was offset by gains in Television (up 10% to $186.7 million), Mandate Pictures (up 118% to $99.1 million) and Lions Gate UK (up 22% to $74.3 million).
Television Production revenue jumped 58% to $350.9 million driven by a 48% increase in domestic series licensing revenue to $240 million. Home entertainment revenue from television production soared 94% to $67.8 million.
Lions Gate ended fiscal 2010 with cash and cash equivalents of $91.4 million with film obligations and production loans of $369.5 million and shareholders’ equity of $83.9 million. Although the company generated negative free cash flow of $92.1 million in fiscal 2010, but it improved substantially from a negative free cash flow of $142.8 million reported in the previous year.
Lions Gate is a film studio, which produces and distributes motion pictures for theater and straight-to-video release, and television programming for the cable and broadcast networks. With a strong track record of producing small and mid-budget specialty films, we think, Lions Gate is well positioned to increase market share, maximize return and build a diversified portfolio, through strategic acquisitions and alliances.
However, the company is currently the subject of a hostile takeover bid from billionaire investor Carl Icahn. The investor recently extended the deadline for acquiring all the outstanding shares of Lions Gate at $7.00 per share in cash, due to the non-acceptance of the offer by the shareholders, to Jun 16, 2010 from Jun 1.
Carl Icahn currently owns an 18.9% interest in the company. The investor had raised his offer to $7.00 per share in cash, up from the previous offer of $6.00.
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