Lionsgate Studios Corp.(US:LION)2024-11-07 21:20Financial Performance - Lionsgate reported second quarter revenue of $948.6 million, with a net loss attributable to shareholders of $163.3 million or $0.68 diluted net loss per share[1][2]. - Adjusted net loss attributable to Lionsgate shareholders was $102.5 million or $0.43 adjusted diluted net loss per share, with an adjusted OIBDA loss of $17.7 million[2][3]. - Revenues for the three months ended September 30, 2024, were $948.6 million, a decrease of 6.6% compared to $1,015.5 million for the same period in 2023[17]. - Net loss attributable to Lions Gate Entertainment Corp. shareholders for the three months ended September 30, 2024, was $163.3 million, compared to a net loss of $886.2 million for the same period in 2023[17]. - Total segment revenues for the three months ended September 30, 2024, were $948.6 million, a decrease of 6.5% compared to $1,015.5 million in the same period of 2023[27]. - Total segment profit for the three months ended September 30, 2024, was $15.6 million, a significant decline from $173.5 million in the same quarter of 2023[27]. - The company reported an operating loss of $88.6 million for the three months ended September 30, 2024, compared to an operating loss of $817.5 million for the same period in 2023[17]. - Adjusted OIBDA for the three months ended September 30, 2024, was $(17.7) million, a decrease from $140.7 million in the same period of 2023[27]. - The company reported a net loss attributable to Lionsgate Studios Corp. shareholders of $113.4 million for the three months ended September 30, 2024, compared to a net income of $15.2 million in the prior year[81]. Segment Performance - The Studio Business generated revenue of $823.7 million, a 4% increase from the prior year quarter, but reported an operating loss of $34.8 million[5]. - Motion Picture segment revenue increased by 3% to $407.1 million, while segment profit decreased to $2.6 million due to underperformance of certain releases[6]. - Television Production segment revenue rose 6% to $416.6 million, but segment profit decreased to $24.4 million due to the impact of last year's strikes[7]. - Media Networks North American revenue was $343.0 million, with a 2.6% decline in OTT subscribers to 12.4 million compared to the prior year quarter[8]. - The Motion Picture segment reported a profit of $2.6 million for the three months ended September 30, 2024, compared to $67.5 million in the same period of 2023, indicating a decrease of 96.2%[27]. - Media Networks segment revenues decreased to $346.9 million for the three months ended September 30, 2024, down 16.7% from $416.5 million in the same period of 2023[27]. - The Media Networks segment profit for the three months ended September 30, 2024, was $27.2 million, down from $66.6 million in the same period of 2023, reflecting a decline of 59.1%[30]. Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash at the end of the period were $289.3 million, an increase from $269.2 million at the end of the same period in 2023[20]. - The company experienced a net cash outflow from operating activities of $82.0 million for the three months ended September 30, 2024, compared to a net cash inflow of $301.1 million for the same period in 2023[20]. - Net cash flows provided by operating activities for the three months ended September 30, 2024, were $(82.0) million, compared to $235.8 million in the prior year[106]. - Cash flows from financing activities included borrowings of $629.9 million and repayments of $786.0 million, resulting in a net cash outflow of $156.1 million[114]. Restructuring and Cost Management - Approximately 8% of eligible U.S. employees opted for voluntary severance and early retirement packages as part of business streamlining efforts[4]. - The company recorded restructuring and other charges of $6.1 million for the three months ended September 30, 2024, compared to $222.1 million in the same period of 2023, showing a substantial reduction in costs[40]. - Corporate general and administrative expenses for the three months ended September 30, 2024, were $28.1 million, compared to $32.8 million in the same period of 2023, indicating a decrease in overhead costs[38]. - The company plans to continue evaluating its Media Networks business and may expand its restructuring plan, potentially leading to further impairments and restructuring charges[42]. Debt and Obligations - The company’s debt borrowings net of issuance and redemption costs amounted to $1,765.7 million for the three months ended September 30, 2024, compared to $594.5 million for the same period in 2023[20]. - Film-related obligations at the end of the period (current and non-current) were $1,931.0 million as of September 30, 2024[53]. - Film-related obligations at the beginning of the period totaled $2,023.6 million[58]. - Film-related obligations at the end of the period decreased to $1,801.8 million[58]. Non-GAAP Measures - The company utilizes non-GAAP financial measures to evaluate operating performance, including Adjusted OIBDA and Adjusted Free Cash Flow[60]. - Adjusted Free Cash Flow is defined as net cash flows from operating activities minus capital expenditures, adjusted for production loans and unusual items[65]. - Adjusted Net Income attributable to shareholders is adjusted for various items including share-based compensation and COVID-19 related charges[72]. - The company believes these non-GAAP measures provide useful information regarding results of operations and cash flows[75]. - These measures are commonly used in the entertainment industry but may not be comparable to similar measures presented by other companies[76]. Forward-Looking Statements - Forward-looking statements indicate potential risks including budget overruns and unpredictability of commercial success in the entertainment industry[134]. - The company acknowledges that individual items related to restructuring, COVID-19 charges, and share-based compensation are not reasonably estimable due to their unpredictable nature[140]. - The company has no obligation to update or revise forward-looking statements unless required by law[142]. - The forecast should be read in conjunction with the company's Annual Report on Form 10-K for the year ended March 31, 2024, which includes identified risks[143].