LIONS GATE ENTERTAINMENT CORP. (USA) SANTA MONICA, Calif. and VANCOUVER, British Columbia, May 25, 2016 /PRNewswire/ -- Lionsgate (NYSE: LGF) today reported revenue of $2.35 billion, adjusted EBITDA of $162.3 million, adjusted net income attributable to Lionsgate shareholders of $127.4 million or adjusted EPS of $0.86, and net income attributable to Lionsgate shareholders of $50.2 million or EPS of $0.34 for fiscal 2016.
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"Our television business had a record year with all categories contributing great results, and we expect its strong growth to continue this year," said Lionsgate Chief Executive Officer Jon Feltheimer. "Although last year's film slate didn't match the performance of previous years, this year's slate is bigger, more balanced and is expected to generate greater profitability. We also expect to continue creating long-term value by deepening our portfolio of brands and franchises and solidifying our status as a preferred partner to owners of intellectual property, 3(rd)-party distributors and digital platforms worldwide."
Full year review: Revenue of $2.35 billion for the year compared to revenue of $2.40 billion in the prior year. Net income attributable to Lionsgate shareholders for the year was $50.2 million or EPS of $0.34 on 148.5 million weighted average number of common shares outstanding compared to net income attributable to Lionsgate shareholders of $181.8 million or EPS of $1.31 on 139.0 million weighted average number of common shares outstanding during the prior year. Adjusted EBITDA of $162.3 million compared to adjusted EBITDA of $384.9 million in the prior year. Adjusted net income attributable to Lionsgate shareholders of $127.4 million or adjusted EPS of $0.86 for the year compared to adjusted net income attributable to Lionsgate shareholders of $257.5 million or adjusted EPS of $1.85 in the prior year. Declines in full year adjusted EBITDA and EPS from the prior year were attributable to lower film performance that offset gains in television revenue and margins.
Fourth quarter review: Revenue in the quarter reached $791.2 million compared to $646.1 million last year. Net income attributable to Lionsgate shareholders for the quarter was $10.9 million or EPS of $0.07 on 148.5 million weighted average number of common shares outstanding compared to net income attributable to Lionsgate shareholders of $19.6 million or EPS of $0.14 on 140.4 million weighted average number of common shares outstanding during the prior year quarter. Adjusted EBITDA declined to $45.8 million from $90.4 million last year. Adjusted net income attributable to Lionsgate shareholders of $39.5 million or adjusted EPS of $0.27 for the quarter compared to adjusted net income attributable to Lionsgate shareholders of $57.8 million or adjusted EPS of $0.41 in the prior year. Revenue in the quarter increased 22% from the prior year quarter due to record television revenue and increased theatrical box office from five wide releases compared to three wide releases in the prior year quarter. Adjusted EBITDA and EPS declined in the quarter due to softer performance of the film slate.
For the full year overall Motion Picture segment revenue was $1.68 billion compared to $1.82 billion in the prior year. Theatrical revenue declined to $314.1 million from $354.0 million. Lionsgate's home entertainment revenue from motion picture and television production for the year was $640.1 million compared to $707.5 million in the prior year, reflecting the composition and performance of the slates of wide release theatrical titles. International Motion Picture segment revenue of $548.2 million for the year increased from $495.0 million in the prior year driven by increased number of titles distributed.
Record Television production segment revenue of $669.9 million increased from $579.5 million in the prior year quarter. Gross Segment contribution margins in the Company's television business continued their growth trajectory in the year improving to 15.5% from 9.5%. Domestic television revenues were comparable to the prior year while International revenues increased to $190.2 million from $112.4 million. Key drivers to overall revenue included a new global deal for Orange is the New Black and the Pilgrim Studios acquisition from November 2015.
Lionsgate's filmed entertainment backlog, or already contracted future revenue not yet recorded, achieved record levels of approximately $1.5 billion at March 31, 2016, increasing from $1.3 billion at December 31, 2015.
During the quarter, the Company declared a quarterly cash dividend of $0.09 per common share payable on May 27, 2016 to shareholders of record as of March 31, 2016.
Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2016 financial results at 9:00 A.M. ET/6:00 A.M. PT tomorrow, Thursday, May 26. Interested parties may participate live in the conference call by calling 1-800-230-1951 (651-291-5254 outside the U.S. and Canada). A full digital replay will be available from Thursday morning, May 26, through Thursday, June 2, by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada) and using access code 392523.
ABOUT LIONSGATE
Lionsgate is a premier next generation global content leader with a diversified presence in motion picture production and distribution, television programming and syndication, home entertainment, international distribution and sales, branded channel platforms, interactive ventures and games, and location-based entertainment. The Company has nearly 80 television shows on 40 different networks spanning its primetime production, distribution and syndication businesses. These include the critically-acclaimed hit series Orange is the New Black, the syndication successes The Wendy Williams Show and Celebrity Name Game (with FremantleMedia), the breakout series The Royals and the Golden Globe-nominated dramedy Casual.
The Company's feature film business spans eight labels and includes the blockbuster Hunger Games franchise, the Now You See Me, Divergent and John Wick series, Sicario, The Age of Adaline, Roadside Attractions' Love & Mercy and Mr. Holmes, Codeblack Films' Addicted and breakout concert film Kevin Hart: Let Me Explain and Pantelion Films' Instructions Not Included, the highest-grossing Spanish-language film ever released in the U.S.
Lionsgate's home entertainment business is an industry leader in box office-to-DVD and box office-to-VOD revenue conversion rates. Lionsgate handles a prestigious and prolific library of approximately 16,000 motion picture and television titles that is an important source of recurring revenue and serves as a foundation for the growth of the Company's core businesses. The Lionsgate and Summit brands remain synonymous with original, daring, quality entertainment in markets around the world. www.lionsgate.com
For further information, Investors should contact:
James Marsh
310-255-3651
jmarsh@lionsgate.com
For Media inquiries, please contact:
Peter Wilkes
310-255-3726
pwilkes@lionsgate.com
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 facility and notes, unpredictability of the commercial success of our motion pictures and television programming, the cost of defending our intellectual property, difficulties in integrating acquired businesses, risks related to our acquisition strategy and integration of acquired businesses, the effects of disposition of businesses or assets, technological changes and other trends affecting the entertainment industry, and the risk factors as set forth in Lionsgate's Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on May 25, 2016, 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.
LIONS GATE ENTERTAINMENT CORP.
CONSOLIDATED BALANCE SHEETS
March 31, March 31,
2016 2015
---- ----
(Amounts in thousands,
except share amounts)
ASSETS
Cash and cash equivalents $57,742 $102,697
Restricted cash 2,906 2,508
Accounts receivable, net of
reserves for returns and
allowances of $51,809
(March 31, 2015 -$64,362)
and provision for doubtful
accounts of $6,014 (March
31, 2015 -$4,120) 1,049,289 891,880
Investment in films and
television programs, net 1,478,296 1,381,829
Property and equipment, net 43,384 26,651
Investments 464,346 438,298
Goodwill 534,780 323,328
Other assets 90,344 74,784
Deferred tax assets 134,421 50,114
------- ------
Total assets $3,855,508 $3,292,089
========== ==========
LIABILITIES
Senior revolving credit
facility $161,000 $ -
5.25% Senior Notes 225,000 225,000
Term Loan 400,000 375,000
Accounts payable and
accrued liabilities 377,698 332,473
Participations and
residuals 607,358 471,661
Film obligations and
production loans 715,360 656,755
Convertible senior
subordinated notes 100,050 114,126
Deferred revenue 328,244 274,787
------- -------
Total liabilities 2,914,710 2,449,802
--------- ---------
Commitments and contingencies
Redeemable noncontrolling
interests 90,525 -
SHAREHOLDERS' EQUITY
Common shares, no par
value, 500,000,000 shares
authorized, 146,785,940
shares issued (March 31,
2015 -145,532,978 shares) 885,800 830,786
Retained earnings 7,584 13,720
Accumulated other
comprehensive loss (43,111) (2,219)
------- ------
Total shareholders' equity 850,273 842,287
------- -------
Total liabilities and
shareholders' equity $3,855,508 $3,292,089
========== ==========
LIONS GATE ENTERTAINMENT CORP.
ANNUAL CONSOLIDATED STATEMENTS OF INCOME
Year Ended March 31,
--------------------
2016 2015 2014
---- ---- ----
(Amounts in thousands, except per share amounts)
Revenues $2,347,419 $2,399,640 $2,630,254
Expenses:
Direct operating 1,415,344 1,315,775 1,369,381
Distribution and marketing 661,789 591,491 739,461
General and administration 282,232 263,507 254,925
Depreciation and amortization 13,084 6,586 6,539
------ ----- -----
Total expenses 2,372,449 2,177,359 2,370,306
--------- --------- ---------
Operating income (loss) (25,030) 222,281 259,948
------- ------- -------
Other expenses (income):
Interest expense
Cash interest 45,695 39,657 48,960
Amortization of debt discount and
deferred financing costs 9,184 12,819 17,210
----- ------ ------
Total interest expense 54,879 52,476 66,170
Interest and other income (1,851) (2,790) (6,030)
Loss on extinguishment of debt - 11,664 39,572
--- ------ ------
Total other expenses, net 53,028 61,350 99,712
------ ------ ------
Income (loss) before equity interests
and income taxes (78,058) 160,931 160,236
Equity interests income 44,231 52,477 24,724
------ ------ ------
Income (loss) before income taxes (33,827) 213,408 184,960
Income tax provision (benefit) (76,527) 31,627 32,923
------- ------ ------
Net income 42,700 181,781 152,037
Less: Net loss attributable to
noncontrolling interest 7,509 - -
Net income attributable to Lions Gate
Entertainment Corp. shareholders $50,209 $181,781 $152,037
======= ======== ========
Per share information attributable to Lions Gate
Entertainment Corp. shareholders:
Basic net income per common share $0.34 $1.31 $1.11
===== ===== =====
Diluted net income per common share $0.33 $1.23 $1.04
===== ===== =====
Weighted average number of common shares outstanding:
Basic 148,480 139,048 137,468
Diluted 154,088 151,778 154,415
Dividends declared per common share $0.34 $0.26 $0.10
LIONS GATE ENTERTAINMENT CORP.
FOURTH QUARTER CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
March 31,
---------
2016 2015
---- ----
(Amounts in thousands,
except per share amounts)
Revenues $791,197 $646,082
Expenses:
Direct operating 488,156 369,935
Distribution and marketing 233,604 169,854
General and administration 83,860 76,532
Depreciation and amortization 5,764 1,901
----- -----
Total expenses 811,384 618,222
------- -------
Operating income (loss) (20,187) 27,860
------- ------
Other expenses (income):
Interest expense
Cash interest 13,134 10,111
Amortization of debt discount and
deferred financing costs 2,321 2,771
----- -----
Total interest expense 15,455 12,882
Interest and other income (175) (602)
Loss on extinguishment of debt - 10,388
--- ------
Total other expenses, net 15,280 22,668
------ ------
Income (loss) before equity interests
and income taxes (35,467) 5,192
Equity interests income 14,868 15,124
------ ------
Income (loss) before income taxes (20,599) 20,316
Income tax provision (benefit) (32,086) 762
------- ---
Net income 11,487 19,554
Less: Net loss attributable to
noncontrolling interest (610) -
---- ---
Net income attributable to Lions Gate
Entertainment Corp. shareholders $10,877 $19,554
======= =======
Per share information attributable to Lions Gate
Entertainment Corp. shareholders:
Basic net income per common share $0.07 $0.14
===== =====
Diluted net income per common share $0.07 $0.14
===== =====
Weighted average number of common shares outstanding:
Basic 148,469 140,364
Diluted 153,110 145,649
Dividends declared per common share $0.09 $0.07
LIONS GATE ENTERTAINMENT CORP.
ANNUAL CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended March 31,
--------------------
2016 2015 2014
---- ---- ----
Operating Activities: (Amounts in thousands)
Net income $42,700 $181,781 $152,037
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 13,084 6,586 6,539
Amortization of films and
television programs 1,029,077 899,951 921,289
Amortization of debt discount
and deferred financing costs 9,184 12,819 17,210
Non-cash share-based
compensation 77,906 79,938 60,492
Other non-cash items 2,031 - -
Distribution from equity
method investee - 7,788 16,079
Loss on extinguishment of debt - 11,664 39,572
Equity interests income (44,231) (52,477) (24,724)
Deferred income taxes
(benefit) (85,069) 13,934 15,913
Changes in operating assets and liabilities:
Restricted cash (398) 6,417 1,775
Accounts receivable, net (144,910) (13,968) (93,503)
Investment in films and
television programs (1,066,403) (1,012,294) (948,082)
Other assets (13,413) (5,331) (3,768)
Accounts payable and accrued
liabilities 28,916 (5,086) 17,628
Participations and residuals 134,884 2,704 59,207
Film obligations (30,711) (24,977) (19,187)
Deferred revenue 28,347 (12,940) 34,035
Net Cash Flows Provided By
(Used In) Operating
Activities (19,006) 96,509 252,512
------- ------ -------
Investing Activities:
Proceeds from the sale of
equity method investees - 14,575 9,000
Investment in equity method
investees (15,989) (22,730) (17,250)
Distributions from equity
method investee in excess of
earnings - - 4,169
Purchase of Pilgrim Studios,
net of cash acquired of
$15,816 (126,892) - -
Purchases of other investments (750) (30,000) -
Repayment of loans receivable - - 4,275
Purchases of property and
equipment (18,433) (17,013) (8,799)
Net Cash Flows Used In
Investing Activities (162,064) (55,168) (8,605)
-------- ------- ------
Financing Activities:
Senior revolving credit
facility -borrowings 605,500 778,500 872,220
Senior revolving credit
facility -repayments (444,500) (876,119) (1,113,075)
Term Loans and 5.25% Senior
Notes -borrowings, net of
deferred financing costs of
$964, $4,315 and $6,860 for
the years ended March 31,
2016, 2015 and 2014,
respectively 24,036 370,685 440,640
Term Loans - repayments - (229,500) -
10.25% Senior Notes -
repurchases and redemptions - - (470,584)
Convertible senior
subordinated notes -
borrowings - - 60,000
Convertible senior
subordinated notes -
repurchases (5) (16) -
Production loans - borrowings 572,572 631,709 532,416
Production loans - repayments (483,145) (449,648) (517,874)
Pennsylvania Regional Center
credit facility -repayments - - (65,000)
Repurchase of common shares (73,180) (144,840) -
Dividends paid (47,447) (33,353) (6,900)
Exercise of stock options 6,097 6,839 11,972
Tax withholding required on
equity awards (24,205) (20,062) (23,077)
Net Cash Flows Provided By
(Used In) Financing
Activities 135,723 34,195 (279,262)
------- ------ --------
Net Change In Cash And Cash
Equivalents (45,347) 75,536 (35,355)
Foreign Exchange Effects on
Cash 392 1,469 (1,316)
Cash and Cash Equivalents -
Beginning Of Period 102,697 25,692 62,363
Cash and Cash Equivalents -
End Of Period $57,742 $102,697 $25,692
======= ======== =======
LIONS GATE ENTERTAINMENT CORP.
FOURTH QUARTER CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
---------
2016 2015
---- ----
Operating
Activities: (Amounts in thousands)
Net income $11,487 $19,554
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation
and
amortization 5,764 1,901
Amortization
of films
and
television
programs 373,789 260,479
Amortization
of debt
discount
and
deferred
financing
costs 2,321 2,771
Non-cash
share-
based
compensation 30,507 31,247
Other non-
cash items 1,350 -
Loss on
extinguishment
of debt - 10,388
Equity
interests
income (14,868) (15,124)
Deferred
income
taxes (30,336) 2,691
Changes in operating assets
and liabilities:
Restricted
cash (256) 5,000
Accounts
receivable,
net (108,247) 80,835
Investment
in films
and
television
programs (295,148) (196,825)
Other
assets (11,159) (3,915)
Accounts
payable
and
accrued
liabilities 36,934 47,614
Participations
and
residuals 57,456 8,774
Film
obligations (535) 8,976
Deferred
revenue 32,486 (4,816)
------ ------
Net Cash
Flows
Provided
By
Operating
Activities 91,545 259,550
------ -------
Investing Activities:
Investment
in equity
method
investees (12,035) (7,980)
Purchases
of other
investments - (28,000)
Purchases
of
property
and
equipment (4,753) (5,720)
------ ------
Net Cash
Flows Used
In
Investing
Activities (16,788) (41,700)
------- -------
Financing Activities:
Senior
revolving
credit
facility -
borrowings 367,500 97,000
Senior
revolving
credit
facility -
repayments (206,500) (257,500)
Term Loans
and 5.25%
Senior
Notes -
borrowings,
net of
deferred
financing
costs of
$4,315 in
2015 - 370,685
Term Loans
-
repayments - (229,500)
Production
loans -
borrowings 63,003 97,928
Production
loans -
repayments (242,580) (187,780)
Repurchase
of common
shares (73,180) (14,981)
Dividends
paid (13,520) (9,817)
Excess tax
benefits
on equity-
based
compensation
awards - (6,767)
Exercise of
stock
options 90 2,435
Tax
withholding
required
on equity
awards (1,334) (5,123)
------ ------
Net Cash
Flows Used
In
Financing
Activities (106,521) (143,420)
-------- --------
Net Change
In Cash
And Cash
Equivalents (31,764) 74,430
Foreign
Exchange
Effects on
Cash 1,214 (619)
Cash and
Cash
Equivalents
-
Beginning
Of Period 88,292 28,886
Cash and
Cash
Equivalents
-End Of
Period $57,742 $102,697
======= ========
LIONS GATE ENTERTAINMENT CORP.
USE OF NON-GAAP FINANCIAL MEASURES
This earnings release presents EBITDA,
Adjusted EBITDA, free cash flow, adjusted
net income (loss) attributable to Lions
Gate Entertainment Corp. (the "Company,"
"we," "us" or "our") shareholders, and
adjusted earnings (loss) per share, all of
which are important financial measures for
the Company but are not financial measures
defined by generally accepted accounting
principles ("GAAP").
These measures are non-GAAP financial
measures as defined in Regulation G
promulgated by the Securities and Exchange
Commission (the "SEC") and are in addition
to, not a substitute for, or superior to,
measures of financial performance prepared
in accordance with United States ("U.S.")
GAAP.
We believe these non-GAAP measures to be
meaningful indicators of our performance
that provide useful information to
investors regarding our financial
condition and results of operations and
cash flows before non-operating items.
These non-GAAP measures are commonly used
in the entertainment industry and by
financial analysts and others who follow
the industry to measure operating
performance. However, not all companies
calculate these measures in the same
manner and the measures as presented may
not be comparable to similarly titled
measures presented by other companies.
These measures should be reviewed in
conjunction with the relevant GAAP
financial measures and are not presented
as alternative measures of operating
income, cash flow, net income, or earnings
(loss) per share as determined in
accordance with GAAP. Definitions and
reconciliations of the adjusted metrics
utilized to their corresponding GAAP
metrics are provided below.
EBITDA and Adjusted EBITDA
EBITDA is defined as earnings before
interest, income tax provision or benefit,
and depreciation and amortization.
Adjusted EBITDA represents EBITDA as
defined above adjusted for stock-based
compensation, purchase accounting and
related adjustments, restructuring and
other items, non-cash imputed interest
charge, start-up losses of new business
initiatives, loss on extinguishment of
debt, and backstopped prints and
advertising expense.
Free Cash Flow
Free cash flow is defined as net cash flows
provided by (used in) operating
activities, less purchases of property and
equipment, plus or minus the net increase
or decrease in production loans, plus or
minus excess tax benefits on equity-based
compensation awards if applicable and
excluding the cash used by our new
business initiatives and the one-time
transactional costs of Pilgrim Studios
attributable to the noncontrolling
shareholder. The adjustment for the
production loans is made because the GAAP
based cash flows from operations reflects
a non-cash reduction of cash flows for
the cost of films and television programs
associated with production loans prior to
the time the Company actually pays for the
film or television program. The Company
believes that it is more meaningful to
reflect the impact of the payment for
these films and television programs in its
free cash flow when the payments are
actually made. Cash used by our new
business initiatives includes the cash
used in operating activities plus the cash
used in the purchase of property and
equipment related to our consolidated
subscription video-on-demand platforms.
Adjusted Net Income (Loss) Attributable to
Lions Gate Entertainment Corp.
Shareholders, and Adjusted Earnings (Loss)
Per Share
Adjusted net income (loss) attributable to
Lions Gate Entertainment Corp.
shareholders is defined as net income
(loss) attributable to Lions Gate
Entertainment Corp. shareholders, adjusted
for stock-based compensation, purchase
accounting and related ad2justments,
restructuring and other items, non-cash
imputed interest charge, start-up losses
of new business initiatives, loss on
extinguishment of debt, and backstopped
prints and advertising expense, net of
taxes at the applicable statutory rate and
net of the amounts attributable to
noncontrolling interest.
Adjusted earnings (loss) per share is
defined as adjusted net income (loss)
attributable to Lions Gate Entertainment
Corp. shareholders per weighted average
shares outstanding.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF ANNUAL NET INCOME TO EBITDA AND ADJUSTED EBITDA
Year Ended March 31,
--------------------
2016 2015 2014
---- ---- ----
(Amounts in thousands)
Net income $42,700 $181,781 $152,037
Depreciation and
amortization 13,084 6,586 6,539
Interest, net 53,028 49,686 60,140
Income tax provision
(benefit) (76,527) 31,627 32,923
------- ------ ------
EBITDA $32,285 $269,680 $251,639
======= ======== ========
Stock-based compensation 78,465 80,310 72,119
Restructuring and other
items(1) 19,834 10,725 7,500
Non-cash imputed interest
charge(2) 5,270 - -
Purchase accounting and
related adjustments(3) 8,430 - -
Start-up losses of new
business initiatives(4) 17,066 - -
Loss on extinguishment of
debt - 11,664 39,572
Backstopped prints and
advertising expense(5) 997 12,509 -
--- ------ ---
Adjusted EBITDA $162,347 $384,888 $370,830
======== ======== ========
________________________________
(1) Restructuring and other items
includes restructuring and
severance charges, certain
transaction related costs, the
settlement of an administrative
order, and certain unusual items
when applicable.
Amounts in the year ended March 31,
2016 represent professional fees
associated with certain strategic
transactions including, among
others, the acquisition of Pilgrim
Studios and certain shareholder
transactions, and certain
transactional costs of $7.7
million of Pilgrim Studios
attributable to the noncontrolling
interest shareholder. Pursuant to
the profit sharing provisions in
the Pilgrim Studios operating
agreement, the transactional costs
of $7.7 million are included in
net loss attributable to
noncontrolling interest in the
consolidated statement of income
and thus does not impact earnings
per share attributable to Lions
Gate Entertainment Corp.
shareholders. In addition, amounts
in the year ended March 31, 2016
include pension withdrawal costs
of $2.7 million related to an
underfunded multi-employer
pension plan in which the Company
is no longer participating.
Amounts in the year ended March 31,
2015 primarily represent costs
related to the move of our
international sales and
distribution organization to the
United Kingdom, and severance
costs associated with the
integration of the marketing
operations of the Company's
Lionsgate and Summit film labels,
of which approximately $1.2
million are non-cash charges
resulting from the acceleration of
vesting of stock awards. In
addition, the year ended March 31,
2015 includes transaction costs
related to a certain shareholder
transaction and costs related to
the Starz Exchange transaction.
Amounts in the year ended March 31,
2014 represent the settlement of
an administrative order.
(2) Non-cash imputed interest charge
represents a charge associated
with the interest cost of long-
term accounts receivable for
Television Production licensed
product that become due beyond
one-year.
(3) Purchase accounting and related
adjustments represent the
incremental amortization expense
associated with the non-cash fair
value adjustments on television
assets of $6.5 million included in
direct operating expense resulting
from the application of purchase
accounting and the charge of $1.9
million included in general and
administrative expense related to
the accretion of the
noncontrolling interest discount.
(4) Start-up losses of new business
initiatives represent losses
associated with the Company's
direct to consumer initiatives
including its subscription video-
on-demand platforms and Atom
Tickets, the first-of-its-kind
theatrical mobile ticketing
platform and app. For the fiscal
year ended March 31, 2016, $5.2
million represents the gross
contribution (i.e., revenue less
direct operating and distribution
and marketing expenses) of the
consolidated business, $4.8
million is included in the
Company's consolidated general and
administrative expense and $7.1
million is included in equity
interests income.
(5) Backstopped prints and advertising
expense ("P&A") represents the
amount of theatrical marketing
expense for third party titles
that the Company funded and
expensed for which a third party
provides a first dollar loss
guarantee (subject to a cap) that
such expense will be recouped from
the performance of the film (which
results in minimal risk of loss to
the Company). The amount
represents the P&A expense
incurred net of the impact of
expensing the P&A cost over the
revenue streams similar to a
participation expense (i.e., the
P&A under these arrangements are
being expensed similar to a
participation cost for purposes of
the adjusted measure).
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FOURTH QUARTER NET INCOME TO
EBITDA AND ADJUSTED EBITDA
Three Months Ended
March 31,
---------
2016 2015
---- ----
(Amounts in thousands)
Net income $11,487 $19,554
Depreciation
and
amortization 5,764 1,901
Interest, net 15,280 12,280
Income tax
provision (32,086) 762
------- ---
EBITDA $445 $34,497
==== =======
Stock-based
compensation 30,959 31,435
Restructuring
and other
items(1) 2,230 3,717
Non-cash
imputed
interest
charge(2) 5,270 -
Purchase
accounting and
related
adjustments(3) 4,189 -
Start-up
losses of new
business
initiatives(4) 6,679 -
Loss on
extinguishment
of debt - 10,388
Backstopped
prints and
advertising
expense(5) (3,945) 10,409
------ ------
Adjusted EBITDA $45,827 $90,446
======= =======
________________________________
(1) Restructuring and other items
includes restructuring and
severance charges, certain
transaction related costs, the
settlement of an administrative
order, and certain unusual items
when applicable.
Amounts in the three months ended
March 31, 2016 represent
professional fees associated with
certain strategic transactions
and restructuring and integration
costs primarily related to the
acquisition of Pilgrim Studios.
Amounts in the three months ended
March 31, 2015 primarily
represent costs related to the
move of our international sales
and distribution organization to
the United Kingdom amounting to
an aggregate of $2.0 million. In
addition, the three months ended
March 31, 2015 includes
transaction costs related to a
certain shareholder transaction
and costs related to the Starz
Exchange transaction.
(2) Non-cash imputed interest charge
represents a charge associated
with the interest cost of long-
term accounts receivable for
Television Production licensed
product that become due beyond
one-year.
(3) Purchase accounting and related
adjustments represent the
incremental amortization expense
associated with the non-cash
fair value adjustments on
television assets of $2.9 million
included in direct operating
expense resulting from the
application of purchase
accounting and the charge of $1.3
million included in general and
administrative expense related to
the accretion of the
noncontrolling interest discount.
(4) Start-up losses of new business
initiatives represent losses
associated with the Company's
direct to consumer initiatives
including its subscription video-
on-demand platforms and Atom
Tickets, the first-of-its-kind
theatrical mobile ticketing
platform and app. For the three
months ended March 31, 2016, $3.9
million represents the gross
contribution (i.e., revenue less
direct operating and distribution
and marketing expenses) of the
consolidated business, $1.7
million is included in the
Company's consolidated general
and administrative expense and
$1.0 million is included in
equity interests income.
(5) Backstopped P&A represents the
amount of theatrical marketing
expense for third party titles
that the Company funded and
expensed for which a third party
provides a first dollar loss
guarantee (subject to a cap) that
such expense will be recouped
from the performance of the film
(which results in minimal risk of
loss to the Company). The amount
represents the P&A expense
incurred net of the impact of
expensing the P&A cost over the
revenue streams similar to a
participation expense (i.e., the
P&A under these arrangements are
being expensed similar to a
participation cost for purposes
of the adjusted measure).
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF ANNUAL FREE CASH FLOW
TO NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
Year Ended March 31,
--------------------
2016 2015 2014
---- ---- ----
(Amounts in thousands)
Net Cash Flows Provided
By (Used In) Operating
Activities $(19,006) $96,509 $252,512
Purchases of property
and equipment (18,433) (17,013) (8,799)
Net borrowings under and
(repayment) of
production loans 89,427 182,061 14,542
Cash used by new
business initiatives 10,754 - -
One-time transactional
costs of Pilgrim
Studios attributable to
the noncontrolling
interest shareholder 7,689 - -
----- --- ---
Free Cash Flow, as
defined $70,431 $261,557 $258,255
======= ======== ========
Three Months Ended
March 31,
---------
2016 2015
---- ----
(Amounts in thousands)
Net Cash Flows
Provided By
Operating
Activities $91,545 $259,550
Purchases of
property and
equipment (4,753) (5,720)
Net borrowings
under and
(repayment) of
production
loans (179,577) (89,852)
Cash used by
new business
initiatives 6,140 -
Excess tax
benefits on
equity-based
compensation
awards - (6,767)
--- ------
Free Cash Flow,
as defined $(86,645) $157,211
======== ========
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF NET
INCOME ATTRIBUTABLE TO LIONS GATE ENTERTAINMENT CORP. SHAREHOLDERS, AND BASIC AND DILUTED EPS TO ADJUSTED NET INCOME ATTRIBUTABLE TO LIONS GATE ENTERTAINMENT CORP. SHAREHOLDERS, AND ADJUSTED BASIC AND DILUTED EPS
Year Ended March 31, 2016
-------------------------
Income (loss) Net income
before income attributable to
taxes Lions Gate
Entertainment
Corp.
Net income(1) shareholders(2) Basic Diluted EPS*
EPS*
---
(Amounts in thousands, except per share amounts)
As reported $(33,827) $42,700 $50,209 $0.34 $0.33
Stock-based compensation 78,465 49,833 49,833 0.34 0.33
Restructuring and other items(3) 19,834 15,886 8,197 0.06 0.05
Non-cash imputed interest charge 5,270 3,347 3,347 0.02 0.02
Purchase accounting and related adjustments(4) 9,663 7,459 3,835 0.03 0.02
Start-up losses of new business initiatives(5) 17,913 11,377 11,377 0.08 0.07
Backstopped prints and advertising expense 997 633 633 - -
As adjusted for items above $98,315 $131,235 $127,431 $0.86 $0.82
======= ======== ======== ===== =====
Year Ended March 31, 2015
-------------------------
Income before Net income
income taxes attributable to
Lions Gate
Entertainment
Corp.
Net income(1) shareholders(2) Basic Diluted EPS*
EPS*
---
(Amounts in thousands, except per share amounts)
As reported $213,408 $181,781 $181,781 $1.31 $1.23
Stock-based compensation 80,310 51,398 51,398 0.37 0.34
Restructuring and other items(3) 10,725 7,437 7,437 0.05 0.05
Loss on extinguishment of debt 11,664 8,889 8,889 0.06 0.06
Backstopped prints and advertising expense 12,509 8,006 8,006 0.06 0.05
As adjusted for items above $328,616 $257,511 $257,511 $1.85 $1.73
======== ======== ======== ===== =====
Year Ended March 31, 2014
-------------------------
Income before Net income
income taxes attributable to
Lions Gate
Entertainment
Corp.
Net income(1) shareholders(2) Basic Diluted EPS*
EPS*
---
(Amounts in thousands, except per share amounts)
As reported $184,960 $152,037 $152,037 $1.11 $1.04
Stock-based compensation 72,119 45,435 45,435 0.33 0.29
Restructuring and other items(3) 7,500 7,500 7,500 0.05 0.05
Loss on extinguishment of debt 39,572 24,930 24,930 0.18 0.16
Tax valuation allowance(6) - (12,030) (12,030) (0.09) (0.08)
--- ------- ------- ----- -----
As adjusted for items above $304,151 $217,872 $217,872 $1.58 $1.47
======== ======== ======== ===== =====
_________________________
* Basic and Diluted EPS amounts may not add precisely due to rounding
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FOURTH QUARTER NET
INCOME ATTRIBUTABLE TO LIONS GATE ENTERTAINMENT CORP. SHAREHOLDERS, AND BASIC AND DILUTED EPS TO ADJUSTED NET INCOME ATTRIBUTABLE TO LIONS GATE ENTERTAINMENT CORP. SHAREHOLDERS, AND ADJUSTED BASIC AND DILUTED EPS
Three Months Ended March 31, 2016
---------------------------------
Income (loss) Net income
before income attributable to
taxes Lions Gate
Entertainment
Corp.
Net income(1) shareholders(2) Basic Diluted EPS*
EPS*
---
(Amounts in thousands, except per share amounts)
As reported $(20,599) $11,487 $10,877 $0.07 $0.07
Stock-based compensation 30,959 19,662 19,662 0.13 0.13
Restructuring and other items(3) 2,230 1,466 1,466 0.01 0.01
Non-cash imputed interest charge 5,270 3,347 3,347 0.02 0.02
Purchase accounting and related adjustments(4) 5,059 3,905 2,008 0.01 0.01
Start-up losses of new business initiatives(5) 7,386 4,691 4,691 0.03 0.03
Backstopped prints and advertising expense (3,945) (2,505) (2,505) (0.02) (0.02)
As adjusted for items above $26,360 $42,053 $39,546 $0.27 $0.26
======= ======= ======= ===== =====
Three Months Ended March 31, 2015
---------------------------------
Income before Net income
income taxes attributable to
Lions Gate
Entertainment
Corp.
Net income(1) shareholders(2) Basic Diluted EPS*
EPS*
---
(Amounts in thousands, except per share amounts)
As reported $20,316 $19,554 $19,554 $0.14 $0.14
Stock-based compensation 31,435 20,441 20,441 0.15 0.14
Restructuring and other items(3) 3,717 2,998 2,998 0.02 0.02
Loss on extinguishment of debt 10,388 8,081 8,081 0.06 0.05
Backstopped prints and advertising expense 10,409 6,676 6,676 0.05 0.04
------ ----- ----- ---- ----
As adjusted for items above $76,265 $57,750 $57,750 $0.41 $0.39
======= ======= ======= ===== =====
_________________________
* Basic and Diluted EPS amounts may not add precisely due to rounding
(1) Represents amounts net of the tax
impact calculated using the
statutory tax rate applicable to
each adjustment.
(2) Represents the net income amount
adjusted for the portion
attributable to noncontrolling
interest, if any.
(3) Restructuring and other items
include amounts presented in
Adjusted EBITDA. Pursuant to the
profit sharing provisions in the
Pilgrim Studios operating
agreement, the transactional
costs of $7.7 million of Pilgrim
Studios are included in net loss
attributable to noncontrolling
interest in the consolidated
statement of income and thus do
not impact earnings per share
attributable to Lions Gate
Entertainment Corp. shareholders.
(4) Purchase accounting and related
adjustments include amounts
presented in Adjusted EBITDA,
plus $0.9 million and $1.2
million, respectively, for the
three months and year ended March
31, 2016 of incremental
depreciation and amortization
expense associated with the non-
cash fair value adjustments to
property and equipment and
intangible assets resulting from
the application of purchase
accounting related to the
acquisition of Pilgrim Studios.
(5) Start-up losses of new business
initiatives include amounts
presented in Adjusted EBITDA,
plus $0.7 million and $0.8
million, respectively, for the
three months and year ended March
31, 2016 for the depreciation
expense associated with these
entities.
(6) Represents an adjustment to net
income to eliminate the discrete
tax benefit recognized for
financial reporting purposes upon
the reduction of the Company's
valuation allowance related to
the Company's Canadian net
deferred tax assets which was
reversed in the year ended March
31, 2014.
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SOURCE Lionsgate
