Starz Entertainment Corp(US:STRZ)2024-02-08 21:11Financial Performance - Revenues for the three months ended December 31, 2023, were $975.1 million, a decrease of 2.5% from $1,000.1 million in the same period of 2022[17]. - Net loss attributable to Lions Gate Entertainment Corp. shareholders for the three months ended December 31, 2023, was $106.6 million, compared to a net income of $16.6 million in the same period of 2022[17]. - Operating loss for the three months ended December 31, 2023, was $43.5 million, compared to an operating income of $7.8 million in the same period of 2022[17]. - The company reported total expenses of $1,018.6 million for the three months ended December 31, 2023, an increase from $992.3 million in the same period of 2022[17]. - Comprehensive loss attributable to Lions Gate Entertainment Corp. shareholders for the three months ended December 31, 2023, was $126.6 million, compared to a comprehensive income of $28.7 million in the same period of 2022[20]. - For the nine months ended December 31, 2023, the net loss was $1,063.5 million, significantly higher than the loss of $369.7 million for the same period in the previous year[25]. - The company reported a net loss of $106.6 million for the three months ended December 31, 2023, compared to a net income of $16.6 million for the same period in the previous year[22]. - For the nine months ended December 31, 2023, Lions Gate reported a net loss of $1,066.8 million, an improvement from a net loss of $1,920.8 million in the same period of 2022, reflecting a decrease of approximately 44.5%[28]. Assets and Liabilities - Total current assets increased to $1,525.6 million as of December 31, 2023, from $1,118.4 million as of March 31, 2023, reflecting a growth of 36.5%[16]. - Total liabilities rose to $7,069.3 million as of December 31, 2023, compared to $6,296.6 million as of March 31, 2023, marking an increase of 12.3%[16]. - As of December 31, 2023, Lions Gate Entertainment Corp. reported a total equity deficit of $323.7 million, an increase from $218.8 million at September 30, 2023[22]. - The accumulated deficit increased to $3,574.6 million as of December 31, 2023, up from $3,467.5 million at September 30, 2023[22]. - Total shareholders' equity was reported at $2,459.3 million as of December 31, 2023, compared to $2,437.0 million at September 30, 2023[22]. - Cash and cash equivalents increased to $283.0 million as of December 31, 2023, from $272.1 million as of March 31, 2023[16]. - The company's total assets as of December 31, 2023, amounted to $7,154.7 million, a decrease from $7,426.2 million as of March 31, 2023, reflecting a decline of 3.7%[195]. Shareholder Information - The weighted average number of common shares outstanding for the three months ended December 31, 2023, was 235.1 million, compared to 228.8 million in the same period of 2022[17]. - The total number of Class A Voting Common Shares increased to 83.6 million as of December 31, 2023, from 83.5 million at September 30, 2023[22]. - The total number of Class B Non-Voting Common Shares increased to 151.5 million as of December 31, 2023, from 151.4 million at September 30, 2023[22]. - The company had 500 million authorized Class A voting shares and 500 million authorized Class B non-voting shares as of December 31, 2023[148]. - The company had approximately $179.9 million of authorized potential repurchases remaining, with a total of $288.1 million common shares repurchased to date[157]. Impairments and Charges - The company reported a significant impairment of goodwill and intangible assets totaling $663.9 million for the nine months ended December 31, 2023[17]. - The Company recorded an impairment of goodwill and trade name of $296.2 million for the nine months ended December 31, 2023[52]. - The Company recorded total impairment charges of $696.7 million from the inception of the restructuring plan through December 31, 2023[166]. - The Company incurred a goodwill impairment charge of $663.9 million for the nine months ended December 31, 2023, compared to $1,475.0 million in the same period of 2022[191]. - Content impairment charges for the Media Networks segment were $77.8 million for the three months ended December 31, 2023, slightly down from $80.8 million in the same period of 2022[166]. Cash Flow and Investments - The company generated net cash flows of $401.4 million from operating activities, compared to a cash outflow of $128.0 million in the prior year, indicating a significant turnaround[28]. - Lions Gate's investment in films and television programs and program rights for the nine months was $926.2 million, a decrease from $1,573.4 million in the previous year[28]. - The Company’s total investment in films and television programs includes $804.9 million for released films, $296.1 million for completed but not released films, and $467.6 million for films in progress as of December 31, 2023[59]. - The company reported a depreciation and amortization expense of $138.9 million for the nine months ended December 31, 2023, compared to $133.9 million in the prior year[28]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $333.2 million, down from $471.0 million at the end of the previous year[28]. Debt and Financing - The company’s debt borrowings for the nine months were $2,270.5 million, an increase from $1,238.0 million in the same period of 2022[28]. - As of December 31, 2023, total corporate debt was $2,319.4 million, with a net debt of $2,288.5 million after accounting for unamortized debt issuance costs[85]. - The Revolving Credit Facility has an availability of $875.0 million as of December 31, 2023, with a total commitment of $1.25 billion[86]. - The effective interest rate for Term Loan A was 7.20% and for Term Loan B was 7.70% as of December 31, 2023[94]. - The Company repurchased $85.0 million principal amount of the 5.500% Senior Notes for $61.4 million in the nine months ended December 31, 2023[101]. Strategic Decisions and Acquisitions - Lions Gate's acquisition of eOne was completed on December 27, 2023, for a total cash purchase price of approximately $375.0 million, with $331.0 million paid net of cash acquired[38]. - The preliminary fair value of net assets acquired from eOne was estimated at $379.3 million, with goodwill recorded at $5.8 million[43]. - The Company closed on the acquisition of an additional 25% of 3 Arts Entertainment for approximately $194 million on January 2, 2024, which represents about half of the noncontrolling interest[124]. - The Business Combination Agreement with Screaming Eagle Acquisition Corp. is expected to deliver approximately $350.0 million in gross proceeds, including $175.0 million in PIPE financing, and is anticipated to close in spring 2024[54]. Restructuring and Costs - For the three months ended December 31, 2023, the total restructuring and other costs amounted to $116.9 million, compared to $75.3 million for the same period in 2022, reflecting a year-over-year increase of 55%[169]. - The total severance costs for the nine months ended December 31, 2023, reached $41.3 million, significantly higher than $16.9 million for the same period in 2022[169]. - The Company expects to incur additional charges ranging from approximately $30 million to $55 million related to contractual content commitments and programming content impairment charges[169]. - The net future cash outlay related to the restructuring plan is estimated to range from approximately $145 million to $170 million[169]. - The remaining severance liability as of December 31, 2023, is approximately $29.5 million, expected to be paid within the next 12 months[174]. Revenue Breakdown - Motion Picture revenues for the three months ended December 31, 2023, totaled $443.2 million, a significant increase from $288.8 million in 2022, while total revenues for the nine months reached $1,245.6 million compared to $791.6 million in 2022[134]. - Theatrical revenue for the three months ended December 31, 2023, was $100.1 million, compared to $11.7 million in the same period of 2022, indicating a substantial recovery in theatrical releases[134]. - Digital media revenue for the nine months ended December 31, 2023, was $495.3 million, up from $378.5 million in 2022, reflecting strong performance in home entertainment[134]. - The Company’s international revenue for the three months ended December 31, 2023, was $94.7 million, compared to $55.3 million in 2022, showcasing growth in international markets[134]. Other Financial Metrics - The Company recognized total revenues of $975.1 million for the three months ended December 31, 2023, compared to $1,000.1 million in the same period of 2022, and $2,899.1 million for the nine months ended December 31, 2023, compared to $2,769.1 million in 2022[134]. - The Company reported a provision for doubtful accounts of $7.1 million as of December 31, 2023, down from $9.2 million at the end of March 2023[140]. - The Company recorded a gain on extinguishment of debt of $38.2 million for the three months ended December 31, 2023, compared to a gain of $21.2 million for the same period in 2022[105]. - The Company recognized a loss of $4.3 million in accumulated other comprehensive income (loss) from forward exchange contracts for the three months ended December 31, 2023, compared to a gain of $2.7 million in the same period of 2022[211]. - Interest expense for the three months ended December 31, 2023, was $67.1 million, an increase from $59.6 million in the same period of 2022, indicating a rise of 2.5%[211].