Lionsgate Reports Revenues of $290.9 Million and Net Profit of $2.0 Million for Third Quarter of Fiscal 2008

Lionsgate Reports Revenues of $290.9 Million and Net Profit of $2.0 Million for Third Quarter of Fiscal 2008

Company Reports Best Third Quarter Revenue In Its History

SANTA MONICA, Calif., and VANCOUVER, British Columbia, Feb. 11
/PRNewswire-FirstCall/ -- Lionsgate (NYSE:LGF), the leading independent filmed entertainment studio, continued its growth momentum, reporting revenues of $290.9 million and net income of $2.0 million for its fiscal quarter ended December 31, 2007, the Company announced today. The Company noted that revenue growth of 14% from the prior year third quarter was driven by strong theatrical box office, international revenue growth and continued strength in television production revenues. The Company achieved its best revenue performance ever for a fiscal third quarter.

Lionsgate reported net income for the three months ended December 31, 2007, of $2.0 million. Diluted net income per common share was $0.02 on 120.3 million adjusted weighted average common shares outstanding.

"Our theatrical, television, home entertainment, library, international and digital businesses all achieved continued solid performance in the quarter," said Lionsgate Co-Chairman and Chief Executive Officer Jon Feltheimer. "With an anticipated record-breaking revenue and free cash flow quarter ending March 31, we are on track to meet our full year guidance."

The Company reported that its filmed entertainment backlog grew to a record $416.6 million in the quarter. Filmed entertainment backlog represents the amount of future revenue not yet recorded from the licensing of films and television product for television exhibition and in international markets.

Overall motion picture revenue for the quarter was $254.1 million. Lionsgate had two hit theatrical releases in the quarter, Saw IV and Tyler Perry's Why Did I Get Married?, and the Company has now had seven hit releases in a row -- The Eye, Rambo, Saw IV, Why Did I Get Married?, 3:10 To Yuma, Good Luck, Chuck and War.

Lionsgate's home entertainment revenue was $105.1 million in the third quarter, reflecting strong sales of Bratz, Skinwalkers and Captivity and continued sales of Delta Farce, Saw III and The Condemned. After the close of the quarter, Lionsgate had the best DVD month in its history in January 2008 as War, 3:10 To Yuma, Good Luck, Chuck and Saw IV all debuted at #1 or #2 on the North American DVD and BluRay charts.

Television revenue included in the motion picture segment was $28.9 million in the third quarter, led by titles such as Crash, Daddy's Little Girls, Happily N'Ever After and Pride.

Lionsgate also had the strongest international revenue quarter in its history, reporting $53.8 million in international revenue in the third quarter from such titles as Saw IV, Saw III, Good Luck, Chuck, War, Catacombs, the special edition DVD release of Dirty Dancing by Lionsgate U.K. and Mandate International's 30 Days of Night. Lionsgate U.K. contributed $22.4 million in revenue in the quarter.

Television production revenue was $36.8 million in the third quarter, driven by deliveries of episodes of Golden Globe (R)-winning drama series Mad Men (AMC), Weeds Season 3 (Showtime) and Wildfire Season 4 (ABC Family), and domestic series licensing of Tyler Perry's House of Payne, South Park and Family Feud from the Company's Debmar-Mercury syndication arm.

Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2008 third quarter financial results at 9:00 A.M. ET/6:00 A.M. PT, Tuesday, February 12, 2008. Interested parties may participate live in the conference call by calling 1-888-639-6205 (1-703-925-2608 outside the U.S. and Canada). A full digital replay will be available from Tuesday afternoon, February 12, through Tuesday, February 19, by dialing 1-800-475-6701 (1-320-365-3844 outside the U.S. and Canada) and using access code 907460.

Lionsgate is the leading independent filmed entertainment studio and is a premier producer and distributor of motion pictures, television programming, home entertainment, family entertainment, video-on-demand and digitally delivered content. Its prestigious and prolific library of nearly 12,000 motion picture titles and television episodes is a valuable source of recurring revenue and a foundation for the growth of the Company's core businesses. The Lionsgate brand is synonymous with original, daring, quality entertainment in markets around the globe.

http://www.lionsgate.com/

For further information, contact:
Peter D. Wilkes
Lionsgate
310-255-3726
pwilkes@lionsgate.com

Kelli Easterling
Lionsgate
310-255-4929
keasterling@lionsgate.com

The matters discussed in this press release include forward-looking statements, including those regarding the timing of our upcoming film slate, the expansion of our television business and the success of our fiscal 2008. Such statements are subject to a number of risks and uncertainties. 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 the substantial investment of capital required to produce and market films and television series, increased costs for producing and marketing feature films, budget overruns, limitations imposed by our credit facilities, unpredictability of the commercial success of our motion pictures and television programming, the cost of defending our intellectual property, difficulties in integrating acquired businesses, technological changes and other trends affecting the entertainment industry, and the risk factors as set forth in Lionsgate's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on May 30, 2007. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, March 31,
2007 2007
(Unaudited)
(Amounts in thousands,
except share amounts)
ASSETS
Cash and cash equivalents $182,654 $51,497
Restricted cash 32,396 4,915
Investments - auction rate
securities - 237,379
Investments - equity securities - 125
Accounts receivable, net of reserve
for video returns and allowances of
$69,978 (March 31, 2007 - $77,691)
and provision for doubtful accounts
of $5,448 (March 31, 2007 - $6,345) 163,376 130,496
Investment in films and television
programs 710,680 493,140
Property and equipment 13,877 13,095
Goodwill 227,063 187,491
Other assets 50,831 18,957
$1,380,877 $1,137,095

LIABILITIES
Accounts payable and accrued
liabilities $224,933 $155,617
Participation and residuals 286,494 171,156
Film obligations 269,375 167,884
Subordinated notes and other
financing obligations 328,718 325,000
Deferred revenue 120,841 69,548
1,230,361 889,205

Commitments and contingencies

SHAREHOLDERS' EQUITY
Common shares, no par value,
500,000,000 shares authorized,
120,401,688 and 116,970,280 shares
issued at December 31, 2007 and
March 31, 2007, respectively 427,069 398,836
Series B preferred shares (10 shares
issued and outstanding) - -
Accumulated deficit (257,025) (149,651)
Accumulated other comprehensive
income (loss) 809 (1,295)
170,853 247,890
Treasury shares, no par value, 2,196,899
shares at December 31, 2007 (20,337) -
150,516 247,890
$1,380,877 $1,137,095

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
December December December December
31, 2007 31, 2006 31, 2007 31, 2006
(Amounts in thousands, except
per share amounts)

Revenues $290,866 $254,531 $833,113 $645,156
Expenses:
Direct operating 137,381 110,921 406,926 274,189
Distribution and marketing 120,429 95,803 444,942 296,194
General and administration 27,093 23,347 79,802 64,307
Depreciation 933 824 2,830 1,949
Total expenses 285,836 230,895 934,500 636,639
Operating income (loss) 5,030 23,636 (101,387) 8,517
Other expenses (income):
Interest expense 4,090 4,601 12,163 14,181
Interest and other income (2,511) (2,906) (8,960) (7,753)
Gain on sale of equity
securities (83) - (2,868) -
Total other income, net 1,496 1,695 335 6,428
Income (loss) before equity
interests and income taxes 3,534 21,941 (101,722) 2,089
Equity interests loss (1,248) (425) (3,242) (802)
Income (loss) before income
taxes 2,286 21,516 (104,964) 1,287
Income tax provision
(benefit) 328 1,061 2,410 (1,172)
Net income (loss) $1,958 $20,455 $(107,374) $2,459

Basic Net Income (Loss) Per
Common Share $0.02 $0.19 $(0.91) $0.02
Diluted Net Income (Loss) Per
Common Share $0.02 $0.17 $(0.91) $0.02

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Series B Restric-
Common Shares Preferred Shares ted Unearned
Share Compen-
Number Amount Number Amount Units sation
(Amounts in thousands, except share amounts)
Balance at
March 31, 2006 104,422,765 $328,771 10 $- $5,178 $(4,032)
Reclassification of
unearned
compensation
and restricted
share common units
upon adoption of
SFAS No. 123(R) 1,146 (5,178) 4,032
Exercise of stock
options 1,297,144 4,277
Stock based
compensation,
net of share units
withholding tax
obligations of $504 113,695 6,517
Issuance of common
shares to directors
for services 25,568 238
Conversion of 4.875%
notes, net of
unamortized issuance
costs 11,111,108 57,887
Comprehensive income
(loss)
Net income
Foreign currency
translation
adjustments
Net unrealized gain
on foreign
exchange contracts
Unrealized gain on
investments --
available for sale
Comprehensive income
Balance at March 31,
2007 116,970,280 398,836 10 - - -
Exercise of
stock options 933,855 (2,879)
Stock based
compensation, net
of share units
withholding tax
obligations of $980 486,457 9,084
Issuance of common
shares to directors
for services 25,970 277
Issuance of common
shares for investment
in NextPoint, Inc 1,890,189 20,851
Issuance of common
shares related to
the Redbus
acquisition 94,937 900
Repurchase of common
shares, no par value
Comprehensive loss
Net loss
Foreign currency
translation
adjustments
Net unrealized loss
on foreign
exchange contracts
Comprehensive loss
Balance at December 31,
2007 120,401,688 $427,069 10 $- $- $-

Accumulated
Compre- Other
hensive Compre-
Accumulated Income hensive Treasury Shares
Deficit (Loss) Income Number Amount Total
(Loss)
(Amounts in thousands, except share amounts)

Balance at March 31,
2006 $(177,130) $(3,517) - $- $149,270
Reclassification of
unearned
compensation and
restricted share
common units
upon adoption of SFAS
No. 123(R) -
Exercise of stock
options 4,277
Stock based
compensation,
net of share units
withholding tax
obligations of $504 6,517
Issuance of common
shares to directors
for services 238
Conversion of 4.875%
notes, net of
unamortized issuance
costs 57,887
Comprehensive income
(loss)
Net income 27,479 $27,479 27,479
Foreign currency
translation
adjustments 1,876 1,876 1,876
Net unrealized gain
on foreign
exchange contracts 259 259 259
Unrealized gain on
investments --
available for sale 87 87 87
Comprehensive income $29,701 -
Balance at March 31,
2007 (149,651) (1,295) - - 247,890
Exercise of stock
options (2,879)
Stock based
compensation, net
of share units
withholding tax
obligations of $980 9,084
Issuance of common
shares to directors
for services 277
Issuance of common
shares for investment
in NextPoint, Inc 20,851
Issuance of common
shares related to
the Redbus acquisition 900
Repurchase of common
shares, no par value (2,196,899)(20,337) (20,337)
Comprehensive loss
Net loss (107,374)$(107,374) (107,374)
Foreign currency
translation
adjustments 2,322 2,322 2,322
Net unrealized loss
on foreign
exchange contracts (218) (218) (218)
Comprehensive loss $(105,270)
Balance at December 31,
2007 $(257,025) $809 (2,196,899)$(20,337)$150,516

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Nine Months
Ended Ended
December 31, December 31,
2007 2006
(Amounts in thousands)
Operating Activities:
Net income (loss) $(107,374) $2,459
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities
Depreciation of property and
equipment 2,830 1,949
Amortization of deferred
financing costs 2,659 2,915
Amortization of films and
television programs 252,907 142,982
Amortization of intangible assets 698 702
Non-cash stock-based compensation 10,207 4,795
Gain on sale of equity securities (2,794) -
Equity interests loss 3,242 802
Changes in operating assets and
liabilities:
Restricted cash (19,674) (9,150)
Accounts receivable, net (32,704) 76,829
Investment in films and
television programs (397,844) (246,567)
Other assets (5,882) 5,079
Accounts payable and accrued
liabilities 41,111 (23,733)
Unpresented bank drafts - (14,772)
Participation and residuals 110,397 1,048
Film obligations 50,790 70,134
Deferred revenue 39,568 50,233
Net Cash Flows Provided By (Used
In) Operating Activities (51,863) 65,705
Investing Activities:
Purchases of investments - auction
rate securities (207,262) (575,789)
Proceeds from the sale of
investments - auction rate
securities 444,641 536,226
Purchases of investments - equity
securities (4,765) -
Proceeds from the sale of
investments - equity securities 24,035 -
Acquisition of Mandate, net of
unrestricted cash acquired (41,205) -
Loan to Mandate - preacquisition (2,895) -
Acquisition of Maple, net of
unrestricted cash acquired 1,737 -
Acquisition of Debmar, net of
unrestricted cash acquired - (24,137)
Investment in equity method
investees (6,464) (5,000)
Loan to equity method investee (3,000) -
Purchases of property and equipment (2,718) (7,737)
Net Cash Flows Provided By (Used
In) Investing Activities 202,104 (76,437)
Financing Activities:
Exercise of stock options 864 3,280
Amounts paid to satisfy tax
withholding requirements on
options exercised (4,723) -
Repurchases of common shares (20,337) -
Borrowings under financing
arrangements 3,718 -
Net Cash Flows Provided By (Used
In) Financing Activities (20,478) 3,280
Net Change In Cash And Cash
Equivalents 129,763 (7,452)
Foreign Exchange Effects on Cash 1,394 (53)
Cash and Cash Equivalents -
Beginning Of Period 51,497 46,978
Cash and Cash Equivalents - End Of
Period $182,654 $39,473

LIONS GATE ENTERTAINMENT CORP.

RECONCILIATION OF NET CASH FLOWS USED IN
OPERATING ACTIVITIES TO FREE CASH FLOW

Three Months Ended Nine Months Ended
December 31, December 31,
2007 2006 2007 2006
(Amounts in thousands)
Net Cash Flows Provided By (Used In)
Operating Activities $6,690 $54,923 $(51,863) $65,705
Purchases of property and equipment (333) (4,200) (2,718) (7,737)
Decrease in Unpresented Bank Drafts - - - 14,772
Free Cash Flow, as defined $6,357 $50,723 $(54,581) $72,740

Free cash flow is defined as net cash flows provided by or used in operating activities less purchases of property and equipment and unpresented bank drafts. Unpresented bank drafts represent checks issued and not yet presented for payment in excess of the cash balances at custodial banks. The applicable bank accounts are funded at the time the checks are presented for payment.

Free cash flow is a non-GAAP financial measure as defined in Regulation G promulgated by the Securities and Exchange Commission. This non-GAAP financial measure is in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with Generally Accepted Accounting Principles.

Management believes this non-GAAP measure provides useful information to investors regarding cash that our operating businesses generate before taking into account cash movements that are non-operational. Free cash flow is a non- GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry. Not all companies calculate free cash flow in the same manner and the measure as presented may not be comparable to similarly titled measures presented by other companies.

First Call Analyst:
FCMN Contact: keasterling@lionsgate.com

Source: Lionsgate

CONTACT: Peter D. Wilkes, +1-310-255-3726, pwilkes@lionsgate.com; or
Kelli Easterling, +1-310-255-4929, keasterling@lionsgate.com, both of
Lionsgate

Web site:

http://www.lionsgate.com/

-------
Profile: intent