DreamWorks Animation Reports 7 Percent Profit Dip
Created 07/27/2009 - 23:00
Press Release from DreamWorks Animation SKG, Inc.
GLENDALE, Calif., July 28 /PRNewswire-FirstCall/ -- DreamWorks Animation SKG, Inc. (Nasdaq: DWA) today announced financial results for its second quarter ended June 30, 2009. In the quarter, the Company reported total revenue of $132.0 million and net income of $25.6 million, or $0.30 per share on a fully diluted basis. This compares to revenue of $141.5 million and net income of $27.5 million, or $0.30 per share on a fully diluted basis, for the same period in 2008.
"Our solid second quarter results were driven primarily by the continued performance of our 2008 films, KUNG FU PANDA and MADAGASCAR: ESCAPE 2 AFRICA," said Jeffrey Katzenberg, CEO of DreamWorks Animation. "Our third consecutive hit, MONSTERS VS. ALIENS, has also reached blockbuster status in the U.S. at nearly $200 million. Additionally, we continue to make great progress on a number of our growth initiatives at DreamWorks Animation."
KUNG FU PANDA, the Company's 2008 summer release, contributed approximately $32.7 million of revenue to the quarter, primarily driven by domestic pay television. Through the end of the second quarter, it reached an estimated 15.2 million home entertainment units sold worldwide, net of actual and estimated future returns.
The Company's fall 2008 release, MADAGASCAR: ESCAPE 2 AFRICA, contributed $26.1 million of revenue to the quarter, primarily driven by international home entertainment. Through the end of the second quarter, it reached an estimated 10.2 million home entertainment units sold worldwide, net of actual and estimated future returns.
During the second quarter the Company amended its video game agreement with Activision, which resulted in a financial impact to the quarter of $24.0 million of revenue and approximately $0.10 of net income per share on a fully diluted basis. Among other things, the amendment led to the recognition of certain guaranteed payments for several of the Company's previously released video game titles, including MONSTERS VS. ALIENS.
MONSTERS VS. ALIENS, which was released on March 27, 2009, contributed $10.3 million of revenue to the quarter, primarily as a result of the aforementioned amendment to the Company's video game agreement. MONSTERS VS. ALIENS has grossed approximately $198 million at the domestic box office, bringing its worldwide box office total to over $377 million to date.
The Company's 2007 releases, BEE MOVIE and SHREK THE THIRD, delivered $9.7 million and $2.4 million of revenue to the quarter, respectively, primarily from consumer products and home entertainment. Through the end of the second quarter, the titles reached an estimated 9.5 and 22.4 million home entertainment units sold worldwide, respectively, net of actual and estimated future returns.
Library and other titles contributed $50.8 million of revenue to the quarter, including $10.1 million of revenue from SHREK THE MUSICAL as well as continued catalogue home entertainment performance and international free television for feature films.
Costs of revenue for the quarter equaled $74.0 million. Selling, general and administrative expenses totaled $24.8 million (including approximately $8.4 million of stock compensation expense) as compared to $27.0 million (including approximately $8.3 million of stock compensation expense) for the comparable period of 2008.
Looking ahead, the Company's third quarter results are expected to be driven primarily by the home entertainment performance of MONSTERS VS. ALIENS, which will be released on DVD and Blu-ray domestically on September 29, 2009, as well as MADAGASCAR: ESCAPE 2 AFRICA's domestic pay television.
The Company also provided an update to its share repurchase program. Year to date, the Company has purchased approximately $46.0 million, or 2.3 million shares, at an average per-share price of approximately $20.15. The Company has $150.0 million remaining under its current program.