Press Release from DreamWorks Animation
GLENDALE, Calif., April 28 /PRNewswire-FirstCall/ -- DreamWorks Animation SKG, Inc. (Nasdaq: DWA) today announced financial results for its first quarter ended March 31, 2009. In the quarter, the Company reported total revenue of $263.5 million and net income of $62.3 million, or $0.71 per share on a fully diluted basis. This compares to revenue of $157.2 million and net income of $26.1 million, or $0.28 per share on a fully diluted basis, for the same period in 2008.
"This marks the Company's strongest first quarter ever, attributable primarily to the blockbuster performance of MADAGASCAR: ESCAPE 2 AFRICA, both at the international box office and in the domestic home video market," said Jeffrey Katzenberg, CEO of DreamWorks Animation. "Adding to our recent theatrical achievements, MONSTERS VS. ALIENS is the highest-grossing film of the year to date and DreamWorks Animation's third consecutive domestic blockbuster in 10 months."
For the quarter, MADAGASCAR: ESCAPE 2 AFRICA contributed $147.5 million of revenue, driven by international box office and its release into the domestic home entertainment market. The film has now reached approximately $595 million in worldwide box office and an estimated 6.7 million home entertainment units sold worldwide, net of actual and estimated future returns.
"Having two of the top home video releases in back-to-back quarters demonstrates the continued strength of our product in the home entertainment market," stated Ann Daly, Chief Operating Officer of DreamWorks Animation. "Just as it does in theaters, family content -- and CG animated hits in particular -- continues to outperform the industry as a whole."
KUNG FU PANDA, DreamWorks Animation's most successful original film ever, contributed approximately $34.1 million of revenue during the first quarter of 2009, primarily from international home entertainment. Through the end of the first quarter, KUNG FU PANDA reached an estimated 14.3 million home entertainment units sold worldwide, net of actual and estimated future returns.
The Company's 2007 and 2006 fall releases, BEE MOVIE and FLUSHED AWAY, delivered $21.2 million and $12.2 million of revenue to the quarter, respectively. The former was driven by international pay television and the latter by worldwide free television. Through the end of the first quarter, BEE MOVIE reached an estimated 9.1 million home entertainment units sold worldwide, net of actual and estimated future returns.
MONSTERS VS. ALIENS, the Company's 2009 release, contributed $10.5 million of revenue during the first quarter of 2009, primarily from consumer products. The film was released domestically on March 27th and has now reached approximately $320 million in worldwide box office.
The Company's 2006 and 2007 summer releases, OVER THE HEDGE and SHREK THE THIRD, delivered $8.8 million and $5.3 million of revenue to the quarter, respectively. Both titles were driven primarily by international free television. Library and other revenue contributed $23.9 million of revenue to the quarter, including $9.8 million from SHREK THE MUSICAL.
Costs of revenue for the quarter equaled $156.4 million. Selling, general and administrative expenses totaled $20.7 million (including approximately $5.9 million of stock compensation expense) as compared to $26.7 million (including approximately $9.7 million of stock compensation expense) for the comparable period of 2008.
Results for the quarter also included a tax benefit of approximately $18.8 million related to the Company's tax sharing agreement with a former stockholder, which resulted in a lower effective tax rate. This benefit was partially offset by a $16.0 million increase in cost for the income tax benefit payable to the former stockholder (as shown on the consolidated statement of income before the line item, "income before income taxes"), resulting in an overall net increase to net income of $2.8 million, or an estimated $0.03 per share on a fully diluted basis.
The Company also provided an update to its share repurchase program. Year to date, it has purchased $46 million, or 2.3 million shares, at an average price of approximately $20.20. Finally, the Company announced that its Board of Directors has authorized future share repurchases of up to $150 million. These repurchases may be made in the open market, in block trades or in privately negotiated transactions.
