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‘CSI’ franchise buoy Alliance Atlantis’ Q3

Skeins account for 96% of entertainment division's revenue

MONTREAL — Canuck entertainment company Alliance Atlantis Communications reported boffo results for its third quarter, mainly due to the continuing success of its “CSI” franchises.

The “CSI” skeins accounted for 96% of the Alliance Atlantis entertainment division’s revenue in the quarter ended Sept. 30 and 91% of the entertainment division’s gross profit.

The results for the Toronto-based company were also up big time from the previous year. Alliance Atlantis posted major losses in 2003 because it was restructuring and laying off staff as it dumped virtually all its film and TV production activities (with the significant exception of the three “CSI” series).

Company reported Tuesday that revenue for the quarter was up to C$214 million ($178 million), compared with $177 million in the third quarter of last year. Broadcasting operations (Canuck specialty channels) kicked in $46 million in revenue, up 12%. Motion picture distribution contributed $95 million, a decrease of 6%. Entertainment unit’s revenue was up $2.3 million to $38 million.

From red to black

Net earnings for the third quarter were $16 million, compared with a net loss of $9 million in the same quarter last year.

Revenue for the nine-month period was $578 million vs. $498 million in the same period last year. Broadcasting contributed $144 million, up 15%; motion picture distribution generated revenue of $304 million, a 37% increase; and the entertainment division contribution was $129 million, down from $151 million. The dip in entertainment revenue for the nine-month period was due to the company’s decision to reduce the volume of its production outside of “CSI.”

The “CSI” skeins accounted for 72% of the entertainment division’s nine-month revenue and 72% of the entertainment group’s year-to-date gross profit.

Net earnings for the nine months ended Sept. 30 were $17 million, compared with a net loss of $25 million in 2003.

For the third quarter, advertising and subscriber revenues were up for Alliance Atlantis’ specialty channels, which include Showcase and Life Network. Advertising sales were up 27% and subscriber revenues rose 5%.

For the nine-month period, advertising sales were up 28% and subscriber revenue climbed 7%.

During the third quarter, Alliance Atlantis launched a specialty channel, Fine Living, across Canada.

In September, “CSI: Crime Scene Investigation” began its Monday-to- Friday strip on Spike TV and also a U.S. weekend syndication window.

Alliance Atlantis announced that it is reducing its second-quarter entertainment division results because it discovered that certain costs related to “CSI: Crime Scene Investigation” had been underaccrued. The result is the company has reduced its second-quarter entertainment division cash flow by $10 million to $3.4 million and reduced consolidated after-tax earnings by $6 million to $6 million.

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