Lionsgate Entertainment pared its net losses by about $5 million to $25 million last quarter on an $11 million gain from selling Maple Pictures and ramped up contributions from pay TV partnership Epix, which earned it $6 million after losing it $20 million the year before.
But the studio swung to a $19 million operating loss from a $22 million profit a year ago on a string of box office disappointments including “Conan the Barbarian,” “Abduction” and “Warrior.”
Theatrical revenue plunged 71% to $22 million. Overall motion picture revenue fell 36% to $219 million.
Company noted that only two major theatrical titles were released on DVD vs. three the prior year that included top-grossing “The Expendables.”
Still, Lionsgate said the operating loss was narrower than it had anticipated back in September due to an uptick in digitally delivered content and VOD and higher-than-expected packaged media revenue from last year’s theatrical slate. It cited material savings in distribution and manufacturing and lower costs “related to shareholder activism,” i.e., the company’s pitched battle with investor Carl Icahn. That simmering dispute has run its course at last as Icahn recently sold all his Lionsgate stock.
Total revenue for the fiscal second quarter fell 22% to $358 million.
“Although we were disappointed by the performance of our films in the quarter, we were pleased with the strong and growing contributions of all of our other core businesses,” said co-chairman and CEO Jon Feltheimer.
“We believe that our film performance will improve significantly and become more consistent as we release some of the potential franchise films on our upcoming slate, and our television and digital businesses and Epix channel partnership will continue their strong and profitable growth trajectory,” he added.
Revenue from Lionsgate’s digital business increased 123% in the quarter to $65 million.
Home entertainment revenue from both films and television jumped 15% to $175 million on syndication of the first four seasons of “Mad Men” on Netflix’s digital platform.
Television revenue included in motion picture revenue was $28 million in the quarter, down from the prior year due to timing, as the slate of two new wide-release theatrical titles licensed to pay TV in the quarter compared with five new wide-release titles the prior year.
Television production revenue was up 21% to a record $139 million.
Domestic series licensing decreased 27% to $72 million in the quarter, with revenue from deliveries of the television series “Weeds” (season seven), “Blue Mountain State” (season three), the first season of “Boss,” “Meet the Browns” and “The Wendy Williams Show.”
Home entertainment releases of television production reached a record $55 million, driven by electronic media revenue from the syndication of “Mad Men” and the distribution of Debmar-Mercury’s “Hell’s Kitchen” as well as packaged media revenue from the release of “Weeds” season six on DVD.
International television revenue increased 51% from the prior year’s second quarter, led by deliveries of “Mad Men” (seasons one through four) and “Weeds” (seasons six and seven).
Lionsgate U.K. revenue of $22.0 million increased 41% from the prior year’s second quarter due to strong revenue contributions from the Lionsgate U.K.-produced film “Blitz.” Excluding the U.K. biz, international theatrical fell to $22.4 million.
Lionsgate’s filmed entertainment backlog reached a record $550 million as of Sept. 30. Backlog represents the amount of future revenue not yet recorded from contracts for the licensing of films and television product for TV and in international markets.