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.
"We have been building toward 2010 for several years and are looking ahead with excitement to accomplishing what no other studio in history has ever done by releasing three computer-generated animated films in a single year - all in 3D: How to Train Your Dragon, Shrek Forever After and Megamind," added Katzenberg.
Finally, the Company provided an update to its share repurchase program. For the full year 2009, the Company purchased $45.7 million, or 2.3 million shares. The Company has $150 million remaining under its current authorization.
Items related to the earnings press release for the fourth quarter of 2009 will be discussed in more detail on the Company's fourth quarter 2009 earnings conference call later today.
Conference Call Information
DreamWorks Animation will host a conference call and webcast to discuss the results on Tuesday, February 23, 2010, at 4:30 p.m. (ET). Investors can access the call by dialing (800) 230-1059 in the U.S. and (612) 288-0337 internationally and identifying "DreamWorks Animation Earnings" to the operator. The call will also be available via live webcast at www.dreamworksanimation.com .
A replay of the conference call will be available shortly after the call ends on Tuesday, February 23, 2010. To access the replay, dial (800) 475-6701 in the U.S. and (320) 365-3844 internationally and enter 142718 as the conference ID number. Both the earnings release and archived webcast will be available on the Company's website at www.dreamworksanimation.com .
About DreamWorks Animation SKG
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) Magazine for 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 18 animated feature films, including the franchise properties, Shrek, Madagascar and Kung Fu Panda. DreamWorks Animation's three feature film releases in 2010 are How to Train Your Dragon, Shrek Forever After and Megamind.