Lions Gate Entertainment (NYSE: LGF) Toronto, the premier independent North American filmed entertainment production and distribution studio, today announced that it is updating its financial guidance for the fiscal year ending March 31, 2006.
The Company today reaffirmed its November 10, 2005 free cash flow guidance of over $100 million for fiscal 2006 as well as its guidance of more than $850 million in revenue.
The Company is updating its full-year EBITDA guidance (earnings before interest expense, interest income, income tax provision, depreciation and gain on anticipated sale of assets) to $35 million for Fiscal 2006, and it is updating its full-year net income guidance to $15 million. The net income guidance includes offsetting unusual items such as a benefit from the anticipated sale of certain non-core assets and non-cash tax charges due to the use of pre-acquisition net operating loss (NOL) carryforwards. The Company earlier projected $63 million in EBITDA and over $35 million in net income.
"As discussed on the November 10 analyst call, we are providing updated guidance due to increased visibility of fiscal 2006's projected financial results," said Lions Gate Chief Executive Officer Jon Feltheimer. "The disappointing performance of the theatrical release IN THE MIX, coupled with recent softness of family home entertainment product, direct-to-video releases and decreasing library margins due to catalog product mix, has put pressure on this year's EBITDA. Going forward, we expect our profitability to benefit from the investment we have made in the marketing and advertising of our current product and to continue to generate significant free cash flow as a strong and growing company."
Lions Gate's upcoming theatrical release slate includes Eli Roth's horror film HOSTEL, presented by Quentin Tarantino and released in partnership with Sony Pictures (January 6), Tyler Perry's next film for Lions Gate, MADEA'S FAMILY REUNION (February 24) and AKEELAH AND THE BEE, starring Laurence Fishburne, Angela Bassett and newcomer Keke Palmer (April 28).
Lions Gate's senior management will hold an analyst and investor conference call to discuss the Company's fiscal 2006 financial guidance today, Monday, December 5, at 9:00 AM EST/6:00 AM PST. Interested parties may participate live in the conference call by calling 1-800-553-0272 (1-612-288-0318 outside the U.S. and Canada). A full digital replay will be available from Monday morning, December 5, through Monday, December 12, by dialing 1-800-475-6701 (1-320-365-3844 outside the U.S. and Canada) and using access code #806617.
Lions Gate is the premier independent producer and distributor of motion pictures, television programming, home entertainment, family entertainment and video-on-demand content. Its prestigious and prolific library is a valuable source of stable, recurring revenue and is a foundation for the growth of the Company's core businesses. The Lions Gate brand name is synonymous with original, daring, quality entertainment in markets around the globe.
www.lgf.com
For further information, contact:
Peter D. Wilkes
310-255-3726
[email protected]
The matters discussed in this press release contain forward-looking statements, including the Company's projections for revenue, free cash flow, EBITDA and net income. In some cases, forward-looking statements can be identified by terms such as "guidance," "projected," "visibility," "upcoming," "expect," "continue," "will," "may," "forecast" and the negative of these terms. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including but not limited to the possibility of budget overruns, the potential lack of commercial success of the motion pictures, home videos and television programming we distribute, high costs associated with negotiating acquisitions and integrating new businesses, substantial competition, changes in release dates, further decreases in library margins, possible further softness in the DVD market and other risk factors set forth in Lions Gate's Form 8-K filed with the Securities and Exchange Commission on June 29, 2005. These statements are made on the basis of management's views and assumptions regarding future events and business performance as of the time the statements are made, and management does not undertake any obligation to update these statements.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FORECAST EBITDA TO FORECAST NET INCOME
Year Ended
March 31,
2006
(Amounts in
thousands)
Forecast EBITDA, as defined $35,000
Depreciation (2,500)
Interest expense (20,000)
Interest income 3,500
Gain on anticipated sale of assets 4,000
Income tax provision * (5,000)
Forecast Net Income $15,000
Forecast EBITDA is defined as earnings before interest expense, interest
income, income tax provision, depreciation and gain on anticipated sale
of assets.
* Income tax provision includes approximately $4 million of non-cash tax
charges due to the use of pre-acquisition net operating loss
carryforwards.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FORECAST NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
TO FORECAST FREE CASH FLOW FROM OPERATIONS
Year Ended
March 31,
2006
(Amounts in
thousands)
Forecast Net Cash Flows Provided By Operating
Activities $103,000
Purchases of property and equipment (3,000)
Forecast Free Cash Flow From Operations (after
debt service), as defined $100,000
Forecast free cash flow is defined as net cash flows provided by
operating activities less purchases of property and equipment.
SOURCE: Lions Gate Entertainment
CONTACT: Peter D. Wilkes of Lions Gate Entertainment, +1-310-255-3726,
[email protected]
Web site: http://www.lgf.com/