DreamWorks Animation Profits Drop
Press Release from DreamWorks Animation SKG
GLENDALE, Calif., Feb 23, 2010 -- DreamWorks Animation SKG, Inc. today announced financial results for its fourth quarter and full year ended December 31, 2009. In the quarter, the Company reported total revenue of $194.2 million and net income of $43.6 million, or $0.50 per share on a fully diluted basis. For the twelve months ended December 31, 2009, the Company reported total revenue of $725.2 million and net income of $151.0 million, or $1.73 per share on a fully diluted basis. This compares to total revenue of $650.1 million and net income of $142.5 million, or $1.57 per share for the twelve months ended December 31, 2008. On a year-over-year basis, revenue for 2009 increased nearly 12%, resulting in an over 10% increase in earnings per share.
"Thanks both to the success of our core business and the performance of our TV initiatives, DreamWorks Animation had a very strong fourth quarter," said Jeffrey Katzenberg, CEO of DreamWorks Animation. "Additionally, we are thrilled to have delivered double-digit year-over-year growth in 2009 not only amid one of the most challenging economic environments, but also during a year in which we had only one feature film release."
The Company's 2009 release, Monsters vs. Aliens, contributed $29.1 million of revenue to the quarter, driven primarily by home entertainment and pay-per-view. The film reached an estimated 6.6 million home entertainment units sold, net of actual and estimated future returns, by the end of the fourth quarter.
The Company's 2008 releases, Madagascar: Escape 2 Africa and Kung Fu Panda, contributed $23.3 million and $17.5 million of revenue to the quarter, respectively, driven primarily by home entertainment and international pay television. Through the end of the fourth quarter, Madagascar: Escape 2 Africa reached 12.9 million and Kung Fu Panda reached 17.4 million home entertainment units sold worldwide, net of actual and estimated future returns.
Shrek the Third, the Company's spring 2007 release, contributed $38.6 million of revenue to the quarter, driven primarily by domestic network and international free television. The Company's fall 2007 release, Bee Movie, contributed $2.3 million of revenue in the quarter, driven primarily by home entertainment.
Library and other titles contributed $33.0 million of revenue to the quarter, including $10.3 million of revenue from Shrek The Musical.
The Company's television specials and series contributed $50.4 million of revenue to the quarter, led by its two new 2009 holiday television specials, Monsters vs. Aliens: Mutant Pumpkins from Outer Space and Merry Madagascar.
Costs of revenue for the quarter equaled $113.9 million. Selling, general and administrative expenses totaled $25.6 million (including approximately $7.2 million of stock compensation expense) as compared to $27.8 million (including approximately $8.6 million of stock compensation expense) for the comparable period of 2008.
The Company reported a lower effective tax rate resulting from its tax sharing arrangement with a former stockholder. The Company is required to remit 85% of any tax savings received pursuant to the tax sharing arrangement to the former stockholder. Combining the amount due to the former stockholder with the effective tax, results in an overall equivalent rate for the quarter of 23.3%. The net positive contribution to the Company is approximately $0.03 per diluted share.
The Company's full year 2010 results are expected to be driven primarily by the performance of How to Train Your Dragon, which is scheduled to be released on March 26, 2010 and Shrek Forever After, which is scheduled to be released on May 21, 2010. The Company's first quarter results are expected to be driven primarily by the merchandising and consumer products programs associated with the release of How to Train Your Dragon as well as by Monsters vs. Aliens domestic pay television, Madagascar: Escape 2 Africa international pay television, and Shrek the Third and Bee Movie international free television.