Non-feature film revenue up 24% year-over-year as DreamWorks invests in growth areas.
GLENDALE, CA -- DreamWorks Animation announced financial results for its fourth quarter ended December 31, 2013. For the quarter, the Company reported total revenue of $204.3 million and net income attributable to DWA of $17.2 million, or earnings per share of $0.20 cents on a fully diluted basis, which includes the impacts of impairment charges and a gain on the sale of technology in the quarter. For the 12 months ended December 31, 2013, the Company reported total revenue of $706.9 million and net income attributable to DWA of $55.1 million, or earnings per share of $0.65 cents on a fully diluted basis.
The Company's fourth quarter 2013 results included an impairment charge of $13.5 million, or a loss of approximately $0.12 cents of earnings per share on a fully diluted basis, related to the Turbo feature film, as a result of its performance during the last two months of the quarter. The Company also recorded an impairment charge of $6.7 million, or a loss of approximately $0.06 cents of earnings per share on a fully diluted basis, related to other content. Additionally, Other Operating Income of $6.4 million, or a gain of approximately $0.05 cents of earnings per share on a fully diluted basis, was recorded in the quarter related to the sale of a consumer social app that was in development.
"We made significant progress in 2013, transforming and positioning DreamWorks Animation for long-term success as a diversified family entertainment Company," said Jeffrey Katzenberg, Chief Executive Officer of DreamWorks Animation. "In 2014, we have three great feature film releases, led by Mr. Peabody & Sherman on March 7th, followed by the sequel to one of our most beloved films, How to Train Your Dragon 2 in June, and Home in November, which has an incredible voice cast led by Rihanna and Jim Parsons. Beyond our feature films we plan to continue to invest in our television, consumer products, digital and location-based entertainment businesses, where we believe there are significant growth opportunities for our Company going forward."
The feature film segment contributed revenue of $127.9 million and gross profit of $53.4 million to the fourth quarter.
Turbo, which was released theatrically on July 17, 2013, reached $282.6 million at the worldwide box office. The film contributed feature film revenue of $1.6 million in the quarter. Turbo was released into the domestic home entertainment market on November 12, 2013. The film reached an estimated 3.3 million home entertainment units sold worldwide through the end of the fourth quarter, net of actual and estimated future returns.
The Croods contributed feature film revenue of $59.7 million in the quarter, primarily from home entertainment. The film was released into the domestic home entertainment market on October 1, 2013 and reached an estimated 6.7 million home entertainment units sold worldwide through the end of the fourth quarter, net of actual and estimated future returns.
Rise of the Guardians contributed feature film revenue of $8.5 million to the quarter, primarily from television and home entertainment. The film reached an estimated 5.2 million home entertainment units sold worldwide through the end of the fourth quarter, net of actual and estimated future returns.
Madagascar 3: Europe's Most Wanted contributed feature film revenue of $11.4 million to the quarter, primarily from home entertainment. The film reached an estimated 8.8 million home entertainment units sold worldwide through the end of the fourth quarter, net of actual and estimated future returns.
Library titles contributed feature film revenue of $46.8 million to the quarter.
The Television segment contributed revenue of $47.1 million and gross profit of $7.3 million to the fourth quarter, primarily from Classic Media and DreamWorks specials holiday content, as well as DreamWorks Dragons: Riders of Berk on Cartoon Network.
The Consumer Products segment contributed revenue of $12.4 million and gross profit of $2.0 million to the fourth quarter, primarily from Classic Media.
The segment consisting of all Other items contributed revenue of $16.8 million and gross profit of $2.3 million to the fourth quarter, primarily from streaming rights related to Shrek The Musical.
Costs of revenue for the quarter equaled $139.3 million. Selling, general and administrative expenses totaled $51.9 million, including $3.8 million of stock-based compensation expense.
The Company's income tax expense for the fourth quarter was $1.7 million. The Company's combined effective tax rate, its actual tax rate coupled with the effect of a tax sharing agreement with a former stockholder, was 5.7% for the fourth quarter. The Company currently expects that its full-year 2014 combined effective tax rate will be in the mid-30% range.
Significant first quarter 2014 events include the theatrical release of Mr. Peabody & Sherman as well as the release of The Croods and Turbo into the domestic pay television market.
The Company's full-year 2014 results are expected to be driven primarily by the performance of Mr. Peabody & Sherman and How to Train Your Dragon 2.
Source: DreamWorks SKG
Formerly Editor-in-Chief of Animation World Network, Jennifer Wolfe has worked in the Media & Entertainment industry as a writer and PR professional since 2003.
