DreamWorks Animation SKG, Inc. (Nasdaq: DWA) today announced financial results for its third quarter ended September 30, 2010.
Press Release from DreamWorks Animation SKG, Inc.
GLENDALE, Calif., Oct 26, 2010 /PRNewswire via COMTEX/ -- DreamWorks Animation SKG, Inc. (Nasdaq: DWA) today announced financial results for its third quarter ended September 30, 2010. In the quarter, the Company reported total revenue of $188.9 million and net income of $39.8 million, or $0.47 per share on a fully diluted basis. This compares to revenue of $135.4 million and net income of $19.6 million, or $0.23 per share on a fully diluted basis, for the same period in 2009.
"Our strong third quarter was driven primarily by the international box office success of Shrek Forever After, which has become DreamWorks Animation's highest grossing international release of all time," said Jeffrey Katzenberg, Chief Executive Officer of DreamWorks Animation. "2010 has already been a historic year for the Company and we are still looking forward to the theatrical release of Megamind on November 5th as well as home entertainment results from both How to Train Your Dragon and Shrek Forever After yet to come this year."
Shrek Forever After, which was released on May 21, 2010, contributed $120.4 million of revenue in the quarter, driven by its continued performance at the worldwide box office. The film has reached $238 million in domestic box office and $497 million in international box office for a worldwide total of $735 million to date.
How to Train Your Dragon, which was released on March 26, 2010, contributed $0.8 million of revenue to the quarter. It has reached approximately $493 million in worldwide box office and was released into the home entertainment market on October 15, 2010.
The Company's 2009 release, Monsters vs. Aliens, contributed $11.0 million of revenue to the quarter, driven by international pay television and home entertainment. Through the end of the third quarter, it reached an estimated 8.4 million home entertainment units sold, net of actual and estimated future returns.
The Company's 2008 releases, Madagascar: Escape 2 Africa and Kung Fu Panda, contributed $2.6 million and $9.8 million of revenue to the quarter, respectively.
Library and other items contributed approximately $44.3 million of revenue to the quarter.
Costs of revenue for the quarter equaled $107.7 million. Selling, general and administrative expenses totaled $26.5 million, including approximately $6.4 million of stock compensation expense.
Additionally, the Company recorded an expense of approximately $18.0 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 benefit of approximately $2.0 million resulted in an overall equivalent tax rate of 28.8% for the third quarter.
Looking ahead to the remainder of the year, the Company's fourth quarter results are expected to be driven primarily by the home entertainment performance of How To Train Your Dragon and Shrek Forever After. Shrek Forever After and Shrek: The Whole Story will be released into the home entertainment market on December 7, 2010. Consumer product revenue associated with the theatrical release of Megamind and domestic network television revenue for Kung Fu Panda are also expected to contribute revenue to the Company in the fourth quarter.
Items related to the earnings press release for the third quarter of 2010 will be discussed in more detail on the Company's third quarter 2010 earnings conference call later today.
About DreamWorks Animation
DreamWorks Animation creates high-quality entertainment, including CG animated feature films, television specials and series, live entertainment properties and online virtual worlds, meant for audiences around the world. The Company has world-class creative talent, a strong and experienced management team and advanced filmmaking technology and techniques. DreamWorks Animation has been named one of the "100 Best Companies to Work For" by FORTUNE(R)Magazinefor two consecutive years. In 2010, DreamWorks Animation ranks #6 on the list. All of DreamWorks Animation's feature films are now being produced in 3D. The Company has theatrically released a total of 20 animated feature films, including the franchise properties of Shrek, Madagascar, Kung Fu Panda and How to Train Your Dragon.DreamWorks Animation's next feature film is Megamind, scheduled to be released in 3D on November 5, 2010.