Film down, but digital and specialty TV up
MONTREAL — Alliance Atlantis Communications net earnings increased to C$10.8 million ($7.9 million) for the first quarter, up from $6.4 million in the same period last year.
The Toronto-based company had strong results from its broadcast group, thanks to a boost in advertising revenue, while “CSI: Crime Scene Investigation” and “CSI: Miami” bumped up entertainment group revenues. Film revenue was down due to a lack of hits in the quarter.
In the frame ended June 30, revenue was $120 million, up from $119 million, with cash flow at $19 million, down from $24 million in the first quarter last year.
However, the results included a foreign exchange gain of $13 million in the quarter, reflecting shifts in the value of the company’s U.S. dollar debt.
Alliance Atlantis benefited as the Canadian dollar rallied against the greenback in the quarter. Excluding the gain, the company would have reported a loss.
Alliance had net debt of about $417 million at the end of the quarter.
“The company is continuing to deliver against its three key strategies of reducing debt, executing against our targets with discipline and being selective in our growth,” said CEO Michael MacMillan. “Our three operating groups — broadcast, motion picture distribution and entertainment — each contributed positively to our financial results.”
In the first quarter, revenue from Alliance’s established specialty channels increased 20% from the first quarter last year, from $28 million last year to $34 million this year, mainly thanks to a 46% jump in advertising revenue. Cash flow was $16 million, compared to $12 million a year earlier, a 26% increase.
Revenue from Alliance’s newer digital channels was $4 million, up from $3 million in the previous year’s first quarter. They posted a cash flow loss of $1.3 million, compared to a loss of $2.4 million a year earlier.
Revenue from the motion picture distribution group was $43 million for the quarter, down from $53 million. Execs attributed the dip to the timing of theatrical and video/DVD releases, which are more heavily weighted to the end of the fiscal year.
The motion picture distribution group contributed $8.2 million to overall cash flow, compared to $10 million in the same period last year. Alliance Atlantis theatrical releases in Canada during the quarter included Montreal helmer Denys Arcand’s pic “The Barbarian Invasions,” a hit in Quebec with box office of $3.6 million, and “Whale Rider.”
Hopes for ‘Kill’
Alliance Atlantis expects its distribution results to be stronger later this year, with an upcoming slate in Canada that includes Quentin Tarantino’s “Kill Bill” and “The Lord of the Rings: Return of the King.”
Revenue for the entertainment group for the first quarter was $38 million, up from $34 million a year earlier. The increase is due to the delivery of five hours of “CSI: Miami” and the miniseries “Hitler: The Rise of Evil,” while there were no deliveries in the same period last year.
The two “CSI” series accounted for 47% of the entertainment group’s first-quarter revenue and contributed virtually all of the group’s first-quarter cash flow.
(Reuters contributed to this report.)