Company promises 2004 will be profitable
TORONTO — Lions Gate Entertainment will be cash-flow-positive in the third quarter, which ends Sept. 30, and will post fiscals at year’s end that will make 2004 “strongly profitable,” CEO Jon Feltheimer pledged at its annual general meeting Tuesday in Toronto.
Although things look good operationally with the purchase of Artisan and a distribution slate highlighted by “Fahrenheit 9/11,” Lions Gate has been mired in red ink for some time.
Buying Artisan and writing down underperforming animation assets forced the company to post a loss last year of $94.2 million as well as a loss in the first quarter of this year, ended June 30.
Chief financial officer Jim Keegan noted Lions Gate plans to pay down $150 million in debt in the next 26 to 28 months. “And we’re going to stick with that.”
Feltheimer noted five years had passed since he and Michael Burns embarked on an expansion that included the purchase of Landscape and Trimark, targets in part for their profit-generating film libraries.
“Now with the new plan, we know that we have to demonstrate the ability to pay down debt and create quarter-to-quarter earnings and be profitable.”
15-18 pix yearly
The Vancouver-based independent film and TV producer and distributor intends to release 15 to 18 films per year, half of them acquired and half produced by Lions Gate.
Lions Gate has Bobby Darrin biopic “Beyond the Sea” and “Stage Beauty” at the Toronto Film Festival, and last weekend picked up “Crash.” “We’re looking at a couple of other pictures,” Feltheimer said, “but I think we’ve acquired the best picture that was available.”
Looking to the next five years, he said, “We’re not going to compete with the majors. We’re going to continue to be provocative, looking at edgy material.”
He pointed to films such as “The Punisher” and “The Cookout” none of which has been a huge success at the domestic B.O., but all of which promise to be profitable on the strength of DVD sales down the line.
Flexibility and speed is key for Lions Gate, said Feltheimer, noting the deal to distribute docbuster “Fahrenheit 9/11” was negotiated over a single weekend.