TORONTO - A toned up Alliance Atlantis, after three aborted release dates, finally announced its quarterly and year-end earnings, which showed a narrower loss, continued solid performance in the broadcast group and flowing income from its CSI franchise.
Some of the highlights show: net debt decreased to $370 million compared to $373 million in previous quarter and $538 million in the prior year's quarter; revenue of $212 million compared to $226 million in prior year's quarter; EBITDA of $33 million compared to $27 million; advertising revenue up 23%; and CSI: NY ordered by CBS. That series will air during 2004/2005 broadcast season and follows the wildly popular original CSI and CSI Miami.
The company's broadcasting group, which includes specialty channels such as Showcase, History Television and National Geographic Channel recorded a 13% revenue increase and the motion picture distribution sector recorded a 12% increase. And, as expected, given the company is winding down the production arm, entertainment's revenue contribution decreased by 34% due to reduced production volumes and timing of international sales.
Broadcasting contributed $17.5 million to EBITDA, representing a 51% increase.
Operating earnings (which exclude income taxes, discontinued operations, net of tax, investment gains and losses, foreign exchange gains and losses) were $4.2 million for the three months ended March 31, 2004 - compared to an $18 million loss in the prior year's period. Net operating earnings were $600,000 in the quarter, representing the previously described operating earnings (net of $3.6 million of taxes), compared to net operating losses of $19.2 million recorded in the same period last year (net of $1.2 million of taxes).
Net loss for the three months ended March 31, 2004, was $2 million -compared to a $12.5 million loss in the same period last year.
"Now that we have largely exited the production business and restructured the company to align with our broadcast-driven orientation, we are poised to capitalize on strategic growth opportunities in broadcasting and motion picture distribution while continuing to maximize the value of the CSI franchise," said Michael MacMillan, chairman and CEO.
"Our broadcast channels continued to deliver very strong results in the first quarter," he added. "In advertising revenues, our specialty channels continued to go from strength to strength, up from the prior year's period by 23%. At the same time, our subscriber base and associated revenue stream continued to grow as part of our ongoing marketing efforts with our cable and satellite partners."
The strong performance of Broadcasting in the first quarter was driven in part by the launch of several successful series including the premiere of season four of Trailer Park Boys which drew a cumulative audience of over 1 million viewers, a 45% audience increase versus the season three premiere. (Neilsen Media Research: Cumulative audience for Sunday April 11, 2004, based on four plays, V2+)
Since it is changing its fiscal year to the calendar year � as well as winding down its entertainment division (save CSI and some other in-house production), Alliance Atlantis also reported its year-end and third quarter results yesterday.
As announced on March 17, 2003, these results include the financial impact of an extensive operating and detailed financial review of the entertainment group's production and distribution business. As a result, the company recorded approximately $321 million of pre-tax charges as follows: $276 million of pre-tax charges in the nine months ended December 31, 2003 (comprised of $14 million of cash charges and $244 million of non-cash charges in the three months ended December 31, 2003 and $18 million of non-cash charges in prior quarters of the nine month fiscal period ended December 31, 2003); and $45 million of pre-tax charges in prior fiscal years.
The total cost of the Entertainment Group restructuring plan expensed during the nine months ended December 31, 2003 was $224 million of the $276 million charges recorded in the nine months and the balance, $52 million is classified as charges arising from ordinary operations.
"While it has been a much longer and more difficult effort than we originally contemplated, we have completed the comprehensive review process of our Entertainment Group balance sheet accounts. This work has been necessary to ensure closure on our past production activities. We will continue to move ahead with our financial and operating strategy as a broadcast-driven company," said Judson Martin, senior executive vice-president and chief financial officer, in yesterday's press release.
For the full release, go to www.allianceatlantis.com.
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