LIONSGATE REPORTS FIRST QUARTER FISCAL 2014 REVENUE OF $569.7 MILLION, ADJUSTED EBITDA OF $60.8 MILLION, NET INCOME OF $13.6 MILLION OR $0.10 BASIC EPS AND ADJUSTED NET INCOME OF $25.1 MILLION OR $0.18 ADJUSTED BASIC EPS

LIONSGATE REPORTS FIRST QUARTER FISCAL 2014 REVENUE OF $569.7 MILLION, ADJUSTED EBITDA OF $60.8 MILLION, NET INCOME OF $13.6 MILLION OR $0.10 BASIC EPS AND ADJUSTED NET INCOME OF $25.1 MILLION OR $0.18 ADJUSTED BASIC EPS





SANTA MONICA, Calif. and VANCOUVER, British Columbia, Aug. 8, 2013 /PRNewswire/ -- Lionsgate (NYSE: LGF) today reported revenue of $569.7 million, adjusted EBITDA of $60.8 million, net income of $13.6 million or $0.10 basic net income per share and adjusted net income of $25.1 million or $0.18 adjusted basic net income per share for the first quarter of Fiscal 2014 (fiscal quarter ended June 30, 2013).

Revenue of $569.7 million for the first quarter increased by 21% compared to $471.8 million in the prior year quarter, reflecting strong performances in the Company's television production, home entertainment and international operations which more than offset a decline in theatrical revenue compared to the prior year quarter. The prior year quarter included all but the first nine days of the domestic theatrical release of the first Hunger Games film. The next film in the blockbuster Hunger Games franchise, The Hunger Games: Catching Fire, will be released worldwide on November 22, 2013.

Adjusted EBITDA of $60.8 million for the first quarter compared to adjusted EBITDA of $17.1 million in the prior year quarter.

Net income for the first quarter was $13.6 million or $0.10 basic net income per share on 136.2 million weighted average number of common shares outstanding compared to a $(44.2) million net loss or $(0.33) basic net loss per share on 133.2 million weighted average number of common shares outstanding during the prior year quarter. Adjusted net income of $25.1 million or $0.18 adjusted basic net income per share, excluding stock-based compensation and early extinguishment of debt costs in the quarter, compared to adjusted net loss of $(26.3) million or $(0.20) adjusted basic net loss per share in the prior year quarter.

Growth in adjusted EBITDA, net income and adjusted net income in the quarter reflected increased digital revenue and the strong performances in the Company's television production, home entertainment and international operations noted above. Net income and adjusted net income also benefited from lower interest expense.

Lionsgate's filmed entertainment backlog, or already contracted future revenue not yet recorded, was $1.1 billion at June 30, 2013.

"We're pleased with our first quarter results, with particularly strong contributions from our diversified television slate, packaged and digital media and our robust international performance," said Lionsgate Chief Executive Officer Jon Feltheimer. "The fact that our quarter compared favorably to a first quarter last year that included most of the domestic release of the first Hunger Games film illustrates the diversity of our business. The appetite for content is growing, domestically and internationally, across multiple platforms and, as a pure content company, we are well positioned to capitalize on this demand."

Overall Motion Picture segment revenue for the first quarter was $438.6 million, an increase of 8% from the prior year quarter as gains in home entertainment and international operations more than offset a decline in theatrical revenue.

Lionsgate's home entertainment revenue from both motion pictures and television was $169.4 million for the first quarter, a 16% increase compared to $145.5 million in the prior year quarter, driven by a diversified slate that included Warm Bodies, The Impossible and Texas Chainsaw 3D as well as continued revenue from The Twilight Saga: Breaking Dawn - Part 2, Sinister, The Perks Of Being A Wallflower and The Expendables 2. Digital media revenue increased by 21% to $63.2 million in the quarter.

Television revenue included in the Motion Picture segment was $36.8 million in the first quarter compared to $37.1 million in the prior year quarter.

International Motion Picture segment revenue (excluding Lionsgate U.K.) increased 63% to $79.1 million for the first quarter driven by the strong international performance of Now You See Me, one of the sleeper hits of the summer worldwide, The Twilight Saga: Breaking Dawn - Part 2, The Impossible, Warm Bodies and The Last Stand.

Lionsgate U.K. revenue was $32.4 million in the first quarter compared to $32.6 million in the prior year quarter.

Revenue in the Television Production segment was $131.1 million in the first quarter, more than doubling revenue in the prior year quarter and reflecting strong gains in licensing of domestic television series and international sales. Deliveries in the quarter included Anger Management, Season 6 of Mad Men, Season 1 of Nashville, the debut season of Orange Is The New Black and several shows in syndication, including Season 4 of The Wendy Williams Show, which has been renewed by the Fox station group for three more seasons.

Lionsgate senior management will hold its analyst and investor conference call to discuss its first quarter fiscal 2014 results at 9:00 A.M. ET/6:00 A.M. PT on Friday, August 9, 2013. Interested parties may participate live in the conference call by calling 1-800-230-1059 (612-288-0329 outside the U.S. and Canada). A full digital replay will be available from Friday morning, August 9, through Friday, August 16, by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada) and using access code 298340.

ABOUT LIONSGATE

Lionsgate is a leading global entertainment company with a strong and diversified presence in motion picture production and distribution, television programming and syndication, home entertainment, family entertainment, digital distribution, new channel platforms and international distribution and sales. Lionsgate currently has 28 television shows on 20 networks spanning its primetime production, distribution and syndication businesses, including such critically-acclaimed hits as the multiple Emmy Award-winning Mad Men and Nurse Jackie, the comedy Anger Management, the network series Nashville, the syndication successes Tyler Perry's House of Payne, its spinoff Meet the Browns, The Wendy Williams Show, Are We There Yet? and the new series Orange Is The New Black.

Its feature film business has been fueled by such recent successes as the blockbuster first installment of The Hunger Games franchise, The Twilight Saga Breaking Dawn - Part 2, Now You See Me, Kevin Hart: Let Me Explain, Warm Bodies, Snitch, Texas Chainsaw 3D, The Expendables 2, The Possession, Sinister, The Cabin in the Woods and Arbitrage. Lionsgate's home entertainment business is an industry leader in box office-to-DVD and box office-to-VOD revenue conversion rate. Lionsgate handles a prestigious and prolific library of approximately 15,000 motion picture and television titles that is an important source of recurring revenue and serves as the foundation for the growth of the Company's core businesses. The Lionsgate and Summit brands remain synonymous with original, daring, quality entertainment in markets around the world.

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

The matters discussed in this press release include forward-looking statements, including those regarding the performance of future fiscal years. 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 and television series, budget overruns, limitations imposed by our credit facility and notes, unpredictability of the commercial success of our motion pictures and television programming, the cost of defending our intellectual property, difficulties in integrating acquired businesses, risks related to our acquisition strategy and integration of acquired businesses, the effects of disposition of businesses or assets, 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 (the "SEC") on May 30, 2013, as amended in Lionsgate's Quarterly Report on Form 10-Q filed with the SEC on August 8, 2013, which risk factors are incorporated herein by reference. 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


June 30, March 31,

2013 2013
---- ----

(Amounts in thousands,

except share amounts)

ASSETS

Cash and cash equivalents $51,019 $62,363

Restricted cash 9,010 10,664

Accounts receivable, net of reserve for returns and allowances of $80,424 (March 31, 2013 -

$103,418) and provision for doubtful accounts of $4,358 (March 31, 2013 - $4,494) 819,438 787,150

Investment in films and television programs, net 1,185,650 1,244,075

Property and equipment, net 9,266 8,530

Equity method investments 158,161 169,450

Goodwill 323,328 323,328

Other assets 72,594 72,619

Deferred tax assets 80,626 82,690

Total
assets $2,709,092 $2,760,869



LIABILITIES

Senior revolving credit facility $339,474 $338,474

Senior secured second-priority notes 428,517 432,277

Accounts payable and accrued liabilities 277,534 313,620

Participations and residuals 392,239 409,763

Film obligations and production loans 509,015 569,019

Convertible senior subordinated notes 149,080 87,167

Deferred revenue 233,440 254,023

Total
liabilities 2,329,299 2,404,343



Commitments and contingencies


SHAREHOLDERS' EQUITY


Common shares, no par value, 500,000,000 shares authorized, 136,365,493 shares

issued (March 31, 2013 -
135,882,899 shares) 682,352 672,915

Accumulated deficit (296,295) (309,912)

Accumulated other comprehensive loss (6,264) (6,477)
------ ------

Total shareholders' equity 379,793 356,526

Total liabilities and
shareholders' equity $2,709,092 $2,760,869
==========




LIONS GATE ENTERTAINMENT CORP.


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


Three Months Three Months

Ended Ended

June 30, June 30,

2013 2012
---- ----


(Amounts in thousands,
except per share amounts)



Revenues $569,728 $471,820

Expenses:

Direct
operating 306,445 245,818

Distribution
and
marketing 171,460 178,709

General and
administration 56,770 52,344

Depreciation
and
amortization 1,625 2,105
----- -----

Total
expenses 536,300 478,976
------- -------

Operating income (loss) 33,428 (7,156)
------ ------

Other expenses (income):

Interest
expense

Contractual
cash based
interest 16,273 22,728

Amortization
of debt
discount
(premium)
and deferred
financing
costs 4,541 4,762

Total interest expense 20,814 27,490

Interest and
other
income (1,496) (950)

Loss on
extinguishment
of debt 466 8,159

Total other
expenses,
net 19,784 34,699
------ ------

Income (loss) before equity
interests and income taxes 13,644 (41,855)

Equity interests income (loss) 7,977 (145)
----- ----

Income (loss) before income
taxes 21,621 (42,000)

Income tax provision 8,004 2,200
----- -----

Net income (loss) $13,617 $(44,200)
======= ========



Basic Net Income (Loss) Per
Common Share $0.10 $(0.33)
===== ======


Diluted Net Income (Loss) Per
Common Share $0.10 $(0.33)
===== ======


Weighted average number of
common shares outstanding:

Basic 136,189 133,234

Diluted 140,745 133,234



LIONS GATE ENTERTAINMENT CORP.


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


Three Months Three Months

Ended Ended

June 30, June 30,

2013 2012
---- ----



Operating Activities:

Net income (loss) $13,617 $(44,200)

Adjustments to reconcile net income (loss) to

net cash provided by (used in) operating activities:

Depreciation
of property
and
equipment 693 758

Amortization
of
intangible
assets 932 1,347

Amortization
of films and
television
programs 219,364 167,097

Amortization
of debt
discount
(premium)
and deferred
financing
costs 4,541 4,762

Non-cash
stock-
based
compensation 13,220 6,173

Dividend
payment
from equity
method
investee 9,849 -

Loss on
extinguishment
of debt 466 8,159

Equity
interests
(income)
loss (7,977) 145

Deferred
income
taxes 2,063 -

Changes in operating assets and liabilities:

Restricted
cash 1,662 2,956

Accounts
receivable,
net (32,516) 196,134

Investment
in films
and
television
programs (160,933) (161,005)

Other
assets (1,222) (616)

Accounts
payable and
accrued
liabilities (33,584) (44,193)

Participations
and
residuals (17,512) (12,906)

Film
obligations (21,370) (20,233)

Deferred
revenue (20,582) 46,637

Net Cash Flows Provided By (Used
In) Operating Activities (29,289) 151,015
------- -------

Investing Activities:

Proceeds from the sale of a portion
of equity method investee 9,000 -

Investment in equity method
investees (3,750) -

Dividends from equity method
investee in excess of earnings 4,169 -

Purchases of property and equipment (1,428) (386)

Net Cash Flows Provided By (Used
In) Investing Activities 7,991 (386)
----- ----

Financing Activities:

Senior revolving credit facility -
borrowings 173,000 274,700

Senior revolving credit facility -
repayments (172,000) (85,000)

Senior secured second-priority
notes - repurchases (4,280) -

Term Loan - repayments - (185,504)

Convertible senior subordinated
notes -borrowings 60,000 -

Production loans - borrowings 108,605 36,969

Production loans - repayments (82,292) (174,519)

Pennsylvania Regional Center credit
facility -repayments (65,000) -

Change in restricted cash
collateral associated with
financing activities - (7,467)

Exercise of stock options 543 52

Tax withholding required on equity
awards (9,019) (2,745)

Other financing obligations -
repayments - (3,710)

Net Cash Flows Provided By (Used
In) Financing Activities 9,557 (147,224)
----- --------

Net Change In Cash And Cash
Equivalents (11,741) 3,405

Foreign Exchange Effects on Cash 397 (120)

Cash and Cash Equivalents -
Beginning Of Period 62,363 64,298

Cash and Cash Equivalents -End Of
Period $51,019 $67,583
======= =======




LIONS GATE ENTERTAINMENT CORP.


RECONCILIATION OF NET INCOME (LOSS) TO

EBITDA AND EBITDA, AS ADJUSTED


Three Months Three Months

Ended Ended

June 30, June 30,

2013 2012
---- ----


(Amounts in
thousands)



Net income (loss) $13,617 $(44,200)

Depreciation
and
amortization 1,625 2,105

Contractual
cash based
interest 16,273 22,728

Noncash
interest
expense 4,541 4,762

Interest
and
other
income (1,496) (950)

Income
tax
provision 8,004 2,200

EBITDA $42,564 $(13,355)
======= ========


Loss on
extinguishment
of debt 466 8,159

Stock-based
compensation
(1) 17,747 9,749

Acquisition
related
charges - 1,727

Non-risk
prints and
advertising
expense - 10,821

EBITDA, as adjusted $60,777 $17,101
======= =======



(1) The three months ended
June 30, 2013 and 2012
include cash settled SARs
expense

of $3.3
million and
$0.7
million,
respectively.


EBITDA is defined as earnings before interest, income tax provision or benefit, and depreciation and amortization. EBITDA is a non-GAAP financial measure.

EBITDA, as adjusted represents EBITDA as defined above adjusted for loss on extinguishment of debt, stock-based compensation and acquisition related charges. Stock-based compensation represents compensation expenses associated with stock options, restricted share units and cash settled stock appreciation rights ("SARs") and equity settled SARs. Acquisition related charges represent severance and transaction costs associated with the acquisition of Summit. Non-risk prints and advertising expense represents the amount of theatrical marketing expense for third party titles that the Company funded and expensed for which a third party provides a guarantee that such expense will be recouped from the performance of the film (i.e. there is no risk of loss to the company) net of an amount of the estimated amortization of participation expense that would have been recorded if such amount had not been expensed. EBITDA, as adjusted is a non-GAAP financial measure.

Management believes EBITDA and EBITDA, as adjusted to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operations. Presentation of EBITDA and EBITDA, as adjusted is a non-GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance. While management considers EBITDA and EBITDA, as adjusted to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with Generally Accepted Accounting Principles. EBITDA and EBITDA, as adjusted do not reflect cash available to fund cash requirements. Not all companies calculate EBITDA and EBITDA, as adjusted in the same manner and the measure as presented may not be comparable to similarly-titled measures presented by other companies.




LIONS GATE ENTERTAINMENT CORP.


RECONCILIATION OF FREE CASH FLOW TO NET CASH

FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES


Three Months Three Months

Ended Ended

June 30, June 30,

2013 2012
---- ----

(Amounts in thousands)


Net Cash Flows Provided By
(Used In) Operating
Activities $(29,289) $151,015

Purchases of
property and
equipment (1,428) (386)

Net
borrowings
under and
(repayment)
of
production
loans 26,313 (137,550)

Free Cash Flow, as defined $(4,404) $13,079
======= =======



Free cash flow is defined as net cash flows provided by (used in) operating activities, less purchases of property and equipment, plus or minus the net increase or decrease in production loans. The adjustment for the production loans is made because the GAAP based cash flows from operations reflects a non-cash reduction of cash flows for the cost of films associated with production loans prior to the time the Company actually pays for the film. The Company believes that it is more meaningful to reflect the impact of the payment for these films in its free cash flow when the payments are actually made.

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 whether classified as operating or financing activity (related to the production of our films) within our GAAP based statement of cash flows, 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.






LIONS GATE ENTERTAINMENT CORP.


RECONCILIATION OF EBITDA TO FREE CASH FLOW


Three Months Three Months

Ended Ended

June 30, June 30,

2013 2012
---- ----


(Amounts in thousands)


EBITDA $42,564 $(13,355)


Plus:
Amortization of
film and
television
programs 219,364 167,097

Less: Cash paid
for film and
television
programs (1) (155,990) (318,788)
----------------

Amortization of
(cash paid for)
film and
television
programs

in excess
of cash
paid
(amortization) 63,374 (151,691)


Plus: Non-cash
stock-based
compensation 13,220 6,173

Plus: Dividend
payment from
equity method
investee 9,849 -

Plus: Equity
interests
(income) loss (7,977) 145

Plus: Loss on
extinguishment
of debt 466 8,159
--------------


EBITDA adjusted for net investment in film and television programs,

non-cash stock-based
compensation, equity interests
(income) loss, and

loss on
extinguishment
of debt 121,496 (150,569)


Changes in other operating assets and liabilities:

Restricted cash 1,662 2,956

Accounts
receivable, net (32,516) 196,134

Other assets (1,222) (616)

Accounts payable
and accrued
liabilities (33,584) (44,193)

Participations
and residuals (17,512) (12,906)

Deferred revenue (20,582) 46,637

(103,754) 188,012


Purchases of
property and
equipment (1,428) (386)

Interest, taxes
and other (2) (20,718) (23,978)


Free Cash Flow, as defined $(4,404) $13,079
======= =======




(1) Cash paid for film and television programs is calculated using the following
amounts

as presented in
our
consolidated
statement of
cash flows:


Change in
investment in
film and
television
programs $(160,933) $(161,005)

Change in film
obligations (21,370) (20,233)

Production loans
-borrowings 108,605 36,969

Production loans
-repayments (82,292) (174,519)

Total cash
paid for
film and
television
programs $(155,990) $(318,788)
========= =========



(2 )Interest, taxes and other consists of the following:


Contractual cash
based interest $(16,273) $(22,728)

Interest and
other income 1,496 950

Current income
tax provision (5,941) (2,200)

Total
interest,
taxes and
other $(20,718) $(23,978)
======== ========

This reconciliation is provided to illustrate the difference between our EBITDA and free cash flow which are both separately reconciled to their corresponding GAAP metrics.






LIONS GATE ENTERTAINMENT CORP.


RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES, NET

INCOME (LOSS), BASIC AND DILUTED EPS TO ADJUSTED INCOME (LOSS) BEFORE

INCOME TAXES, NET INCOME (LOSS), BASIC AND DILUTED EPS



Three Months Ended June 30, 2013
--------------------------------

(Amounts in thousands, except per share amounts)


Income before

income taxes Net income Basic EPS Diluted EPS
------------ ---------- --------- -----------


As reported $21,621 $13,617 $0.10 $0.10

Loss on
extinguishment
of debt (1) 466 294 - -

Stock-based
compensation
(2) 17,747 11,181 0.08 0.08


As adjusted for loss on extinguishment
of debt

and stock-
based
compensation $39,834 $25,091 $0.18 $0.18




Three Months Ended June 30, 2012
--------------------------------

(Amounts in thousands, except per share amounts)


Loss before

income taxes Net loss Basic EPS Diluted EPS
------------ -------- --------- -----------


As reported $(42,000) $(44,200) $(0.33) $(0.33)

Loss on
extinguishment
of debt (1) 8,159 8,159 0.06 0.06

Stock-based
compensation
(2) 9,749 9,749 0.07 0.07


As adjusted for loss on extinguishment
of debt

and stock-
based
compensation $(24,092) $(26,292) $(0.20) $(0.20)


Income (loss) before income taxes, net income (loss) and basic and diluted EPS, as adjusted are adjusted for the following items:



<blockquote>
(1) Loss on early extinguishment of debt: This adjusts income (loss) before income taxes and net income (loss) to eliminate the loss on early extinguishment of debt. The adjustment to net income (loss) is net of the tax impact calculated using the tax rate applicable to each adjustment.


</blockquote>




<blockquote>
(2) Stock based compensation: Adjustments for stock-based compensation represents compensation expenses associated with stock options, restricted share units, cash settled SARs and equity settled SARs. The adjustment to net income (loss) is net of the tax impact calculated using the tax rate applicable to each adjustment.


</blockquote>


Management believes that these non-GAAP measures provide useful information to investors regarding the Company's results as compared to historical periods. The Company uses these measures, among other measures, to evaluate the operating performance of the Company. The Company believes that the adjusted results provide relevant and useful information for investors because they clarify the Company's actual operating performance and allow investors to review our operating performance in the same way as our management. Since these measures are not calculated in accordance with generally accepted accounting principles, they should not be considered in isolation of, or as a substitute for income (loss) before income taxes, net income (loss), basic and diluted EPS. Not all companies calculate income (loss) before income taxes, net income (loss), basic and diluted EPS as adjusted in the same manner and the measures as presented may not be comparable to similarly titled measures presented by other companies.



SOURCE Lionsgate

Lionsgate

Web Site: http://www.lionsgate.com


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