Success of 'Saw,' 'Open Water' drive profits

Indie distrib Lions Gate stayed in the black, if just barely, for its second quarter in a row thanks to sleeper hit “Saw” and DVD release of “Open Water” as well as continued strength from its homevid library.

Revenue last quarter, third on Lions Gate’s fiscal calendar, was $190.4 million, up 170% from a year ago, primarily because of the integration of Artisan, which it acquired in late 2003.

Net income was $3.3 million, up from a $35.7 million loss in the same quarter last year. Excluding certain one-time expenses, Lions Gate made a profit of $9.9 million.

Company pointed to “Saw,” which cost $1.2 million and grossed more than $55 million in theaters, as a primary growth driver. Besides “Open Water,” it benefited from homevid release of “The Punisher” and a variety of kidvids and other direct-to-video titles.

In a statement, CEO Jon Feltheimer said Lions Gate may look to make strategic acquisitions as well as expand into “complementary businesses.” Company will host a conference call for investors this morning, in which it may provide more details on such plans.

Lions Gate also made a substantial dent in its short-term debt last quarter, reducing its bank loans from $262 million to just $75 million, funded in large part by a $150 million offering of subordinated notes.

Studio’s sked for 2005 includes Robin Williams starrer “House of D,” Sundance opener “Happy Endings” and quickie horror sequel “Saw 2.”

Shares in Lions Gate closed roughly flat Wednesday at $10.65 but were down 5% in after-hours trading.

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