Q2 (their Q1 Fiscal 2017) – Lionsgate Earnings Call Summary

Below are my key takeaways from the Lionsgate Q2 2016 (their First Quarter Fiscal 2017) Earnings Call on Aug 4:

Summary:

Jon Feltherimer, CEO, said in his opening remarks, “During the quarter, we took significant steps to scale our content portfolio, and expand its access to world class distribution.  Upon closing, our acquisition of Starz will be the largest and most transformative transaction in our history.”

Lionsgate agreed to buy premium channel Starz for $4,400MM and is expected to close by year end.  The deal will have savings in production, manufacturing and marketing spend, with incremental tax savings of $150mm per year through 2021.

Revenue in the quarter was up 35% YoY to $553.6MM, due to strong gains in television production revenue.

In the theaters, Now You See Me 2 brought in just over $300MM globally (source: BoxOfficeMojo) and Criminal, starring Kevin Costner, disappointed with a $15MM domestic haul (source: BoxOfficeMojo).

Expect 3 films a year that could be franchise pictures.

In TV, made deals with non traditional players such as selling the dance series Step Up to YouTube Red and the Ben Affleck and Matt Damon backed Runner, which premiered on Verizon’s Go90 platform.

Found a new home for the ABC show Nashville, which will now be on CMT.

The final Divergent movie will be a tv series instead, due to the disappointing results of the last film.  They have over 13 potential buyers.

In the UK, acquired a stake in the nonscripted production company called Primal Media

Financial Metrics:

  • Total Revenue: $553.6MM
    • Q2 2015: $408.9MM
    • Motion Pictures: $362.5MM
    • Theatrical: $47.2MM
    • TV: $53.3MM
  • Operating Income/Loss: -$22.0MM
    • Q2 2015: $44.2MM
  • Net Income: $0.840MM
    • Q2 2015: $41MM
  • Net Income Attributable to Shareholders: $1.3MM
    • Q2 2015: $40.7MM
  • Adj Net Income Attributable to Shareholders: $29.5MM
    • Q2 2015: $49.3MM
  • EBITDA: -$5.6MM
    • Q2 2015: $57.4MM
  • Adjusted EBITDA: $40.7MM
    • Q2 2015: $71.0MM
  • Free Cash Flow: -$19.3MM
    • Q2 2015: $94.7MM
  • Basic EPS: $0.01
    • Q2 2015: $0.28

List of Key Properties:

Forward Thinking:

Links to Company Website:

Please comment below if there are data points from Lionsgate you’d like me to include in their next Earnings Call Summary.

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