Pixar Reports Third Quarter Financial Results

Pixar Reports Third Quarter Financial Results

EMERYVILLE, Calif., Nov. 8 /PRNewswire-FirstCall/ -- Pixar Animation Studios (NASDAQ:PIXR) today announced financial results for its fiscal third quarter ended October 1, 2005. For the quarter, Pixar earned $27.4 million, or $0.22 per diluted share on revenues of $45.8 million. These results compare to earnings of $22.4 million, or $0.19 per diluted share on revenues of $44.5 million, achieved in the year-ago quarter.

For the nine months ended October 1, 2005, Pixar earned $122.0 million, or $0.99 per fully diluted share on revenues of $233.5 million. This compares to earnings of $86.5 million, or $0.73 per fully diluted share on revenues of $164.6 million for the nine months ended October 2, 2004.

"Our performance this quarter highlights the ongoing value of our growing film library," said Pixar CEO Steve Jobs. "Looking forward, the marketing campaign for Cars, our studio's seventh feature film, is revving up as we prepare for its release next June. It is going to take your breath away."

The company will discuss its third quarter 2005 earnings results and fiscal year 2005 business outlook during the conference call to be held today, Tuesday, November 8, 2005, at 5:00 p.m. Eastern Time, 2:00 p.m. Pacific Time. The call, hosted by Pixar's Chairman and Chief Executive Officer, Steve Jobs, and Executive Vice President and Chief Financial Officer, Simon Bax, can be accessed by dialing 800-230-1059 (U.S.) or 612-288-0337 (Int'l) approximately 10 minutes prior to the start time. Additionally, a replay of the call will be provided through Tuesday, November 15, 2005 until midnight EST. To access the replay, please call 800-475-6701 (U.S.) or 320-365-3844 (Int'l) and reference the reservation code: 800076.

Pixar will also provide live audio streaming of its third quarter 2005 results conference call. The webcast will be accessible through Pixar's web site at http://www.pixar.com/investor/index.html.

About Pixar Animation Studios

Pixar Animation Studios combines creative and technical artistry to create original stories in the medium of computer animation. Pixar has created six of the most successful and beloved animated films of all time: Toy Story, A Bug's Life, Toy Story 2, Monsters, Inc., Finding Nemo and The Incredibles. Pixar has won 18 Academy Awards(R) and its six films have grossed more than $3.2 billion at the worldwide box office to date. The Northern California studio will release its next film, Cars, on June 9, 2006.

This release contains forward-looking information regarding Pixar's targeted release date for Pixar's next film and actual results may differ materially. Factors that could cause delays in the release of the film include, but are not limited to: (1) the uncertainties related to production delays; (2) financing requirements or other marketing or distribution factors; (3) personnel availability; (4) external socioeconomic and political events; and (5) the release dates of competitive films. Please refer to Pixar's 2004 Form 10-K, 2005 Second Quarter Form 10-Q and other filings with the Securities and Exchange Commission, particularly the sections on risks, for important factors that could cause actual results to differ.

Pixar Animation Studios
Condensed Statements of Income
(Unaudited, in thousands, except per share data)

Quarter Ended Nine Months Ended

October 1, October 2, October 1, October 2,
2005 2004 2005 2004

Revenue:
Film $41,528 $40,416 $222,886 $155,221
Software 4,284 4,047 10,607 9,355

Total revenue 45,812 44,463 233,493 164,576

Cost of revenue: 3,587 4,204 35,318 16,545
Gross profit 42,225 40,259 198,175 148,031

Operating expenses:
Research and development 2,575 4,218 8,504 11,770
Sales and marketing 1,460 737 2,974 1,744
General and administrative 4,453 3,828 12,748 9,921

Total operating expenses 8,488 8,783 24,226 23,435

Income from operations 33,737 31,476 173,949 124,596
Interest income and other 7,395 3,088 17,954 8,473
Income before income taxes 41,132 34,564 191,903 133,069
Income tax expense 13,724 12,143 69,906 46,521

Net income $27,408 $22,421 $121,997 $86,548

Basic net income per share $ 0.23 $ 0.20 $ 1.03 $ 0.77

Diluted net income per share $ 0.22 $ 0.19 $ 0.99 $ 0.73

Shares used in computing basic
net income per share 118,594 113,802 118,087 112,652

Shares used in computing diluted
net income per share 123,091 119,344 123,054 118,228

Pixar Animation Studios
Condensed Balance Sheets
(Unaudited, in thousands)

October 1, January 1,
2005 2005

ASSETS

Cash and investments $1,043,664 $854,784
Receivables, net 31,511 81,962
Prepaid expenses and other assets 2,955 2,227
Deferred income taxes 75,277 70,424
Property and equipment, net 126,293 125,602
Capitalized film production costs, net 163,762 140,038

Total assets $1,443,462 $1,275,037

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
Accounts payable $1,746 $5,392
Income taxes payable 26,197 14,077
Other accrued liabilities 14,811 26,971
Unearned revenue 13,223 8,502

Total liabilities 55,977 54,942

Shareholders' equity:
Common stock 734,522 687,387
Accumulated other comprehensive loss (3,953) (2,211)
Retained earnings 656,916 534,919

Total shareholders' equity 1,387,485 1,220,095

Total liabilities and
shareholders' equity $1,443,462 $1,275,037

Source: Pixar Animation Studios

CONTACT: Nils Erdmann, Investor Relations of Pixar Animation Studios,
+1-510-752-3374, or John Buckley of Brainerd Communicators for Pixar Animation
Studios, +1-212-986-6667

Web site: http://www.pixar.com/
http://www.pixar.com/investor/index.html

NOTE TO EDITORS: Condensed Statements of Income and Balance Sheets to follow.

-------
Profile: intent