Lionsgate posts fourth quarter loss
The Vancouver-based studio used success of Hunger Games release to take write-downs associated with its Summit Entertainment purchase and other costs.
Lionsgate may have struck pay dirt with The Hunger Games blockbuster release.
But that didn’t stop the Vancouver-based studio posting a fourth-quarter loss after accounting for Summit Entertainment acquisition and Hunger Games releasing costs.
Revenue for the three months to March 31 jumped 71% to $645.2 million, which included the first eight days of release for The Hunger Games from March 23.
At the same time, the Q4 loss was $22.7 million, against a profit of $48.7 million in the same period of 2011.
The swing to a loss followed Lionsgate using the halo effect of its teen tentpole release, which is still in cinemas worldwide, to take some hefty writedowns.
These included $51 million in one-time items related to its takeover of Summit Entertainment, including $12 million in transaction and severance costs, $26 million for purchase accounting, and $13 million for stock appreciation rights following a spike in Lionsgate’s share price.
The indie studio also accounted during the latest quarter for steep theatrical marketing costs to promote its Hunger Games release.
Those upfront marketing costs will be offset by earnings from ticket sales for The Hunger Games recorded during the current fiscal quarter, which ends June 30.
For full year 2012, Lionsgate recorded a loss of $39.1 million, compared to a loss of $30.3 million in 2011, on revenue virtually unchanged at $1.58 billion.