DreamWorks Animation Reports Strong Q2
Press Release from DreamWorks Animation
GLENDALE, Calif., July 27, 2010 -- DreamWorks Animation SKG, Inc. (DWA 31.84, -0.25, -0.76%) today announced financial results for its second quarter ended June 30, 2010. In the quarter, the Company reported total revenue of $158.1 million and net income of $24.0 million, or $0.27 per share on a fully diluted basis.
"Our strong second quarter was driven primarily by the blockbuster performances of Shrek Forever After and How to Train Your Dragon, two of the top 10 films of 2010 on both a domestic and a worldwide basis," said Jeffrey Katzenberg, DreamWorks Animation's CEO. "We have once again surpassed $1 billion in worldwide box office and with Megamind still to be released on November 5th, we are on track to make 2010 not only DreamWorks Animation's single biggest year at the box office, but also the biggest year ever for any CG animation studio."
Shrek Forever After, which was released on May 21, 2010, contributed $51.8 million of revenue in the quarter, generated by its domestic box office performance as well as merchandising and licensing activities. It has reached approximately $235 million in domestic box office and approximately $368 million in international box office for a worldwide box office total of approximately $603 million to date.
How to Train Your Dragon, which was released on March 26, 2010, contributed $33.4 million of revenue to the quarter, driven primarily by its domestic and international box office performance. It has reached approximately $480 million in worldwide box office to date.
The Company's 2009 release, Monsters vs. Aliens, contributed $17.2 million of revenue to the quarter, driven primarily by international pay television. The film reached an estimated 7.7 million home entertainment units sold, net of actual and estimated future returns, by the end of the second quarter.
The Company's 2008 releases, Madagascar: Escape 2 Africa and Kung Fu Panda, contributed $4.4 million and $2.5 million of revenue to the quarter, respectively.
Library and other items contributed approximately $48.8 million of revenue to the quarter.
Costs of revenue for the quarter equaled $98.7 million. Selling, general and administrative expenses totaled $27.8 million, including approximately $7.9 million of stock compensation expense and approximately $2.0 million of marketing expense related to the launch of the Company's online virtual world, Kung Fu Panda World.
Additionally, the Company recorded an expense of approximately $8.7 million related to its tax sharing agreement with a former stockholder. Combining the amount due to the former stockholder with the Company's income tax expense of approximately $0.7 million, the result is an overall equivalent tax rate of 28.1% for the second quarter.
The Company also announced today that its Board of Directors has approved a new $150 million share repurchase program. For the six months ended June 30, 2010, the Company has repurchased approximately 3.1 million shares for approximately $111 million.
The Company's third quarter results are expected to be driven primarily by the continued international box office performance of Shrek Forever After. The Company expects its full year 2010 results, which will likely be heavily weighted toward the second half of the year, to be driven by the continued box office performance of Shrek Forever After as well as the home entertainment performance of How to Train Your Dragon and Shrek Forever After, both of which are expected to be released on DVD and Blu-ray in the fourth quarter.
Items related to the earnings press release for the second quarter of 2010 will be discussed in more detail on the Company's second quarter 2010 earnings conference call later today.
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