Starz Entertainment Corp(STRZ) - 2025 Q1 - Quarterly Report

Financial Performance - Revenues for the three months ended June 30, 2024, were $834.7 million, a decrease of 8.1% compared to $908.6 million for the same period in 2023[17] - Total expenses for the same period were $815.9 million, down 11.8% from $925.4 million year-over-year[17] - Operating income for the quarter was $18.8 million, compared to an operating loss of $16.8 million in the prior year[17] - The net loss attributable to Lions Gate Entertainment Corp. shareholders was $59.4 million, an improvement from a net loss of $70.7 million in the same quarter of 2023[17] - Basic net loss per common share was $0.25, compared to $0.31 for the same period last year[17] - For the three months ended June 30, 2024, Lions Gate reported a net loss of $63.1 million, an improvement from a net loss of $71.5 million in the same period of 2023[25] - The company reported a net loss attributable to shareholders of $361.3 million for the three months ended June 30, 2023[62] - The company reported a net loss of $63.1 million and an accumulated deficit of $3,242.7 million as of June 30, 2024[96] Assets and Liabilities - Total assets increased to $7,222.2 million as of June 30, 2024, from $7,092.7 million at the end of March 2024[16] - Total liabilities decreased to $7,148.2 million from $7,279.9 million in the previous quarter[16] - Cash and cash equivalents decreased to $192.5 million from $314.0 million at the end of March 2024[16] - Cash, cash equivalents, and restricted cash at the end of the period were $241.9 million, down from $394.1 million at the end of the previous year[25] - As of June 30, 2024, total corporate debt was $2,219.5 million, down from $2,508.5 million as of March 31, 2024, reflecting a decrease of approximately 11.5%[80] - The company had tax credits receivable of $218.4 million as of June 30, 2024, an increase from $199.1 million as of March 31, 2024[214] Investments - Investment in films and television programs and program rights increased to $3,215.6 million, up from $2,762.2 million in the previous quarter[16] - Investment in films and television programs and program rights saw a net outflow of $694.3 million, up from $445.4 million in the previous year[25] - The acquisition of eOne was completed for an aggregate cash purchase price of approximately $385.1 million, subject to adjustments, with a final purchase price reduction of $12.0 million determined after June 30, 2024[47] - The preliminary fair value of net assets acquired from eOne was estimated at $368.5 million, with goodwill recognized at $16.6 million[52] - The company acquired a library of 46 films for approximately $68.6 million, with $35.0 million invested for a 51% interest in CP LG Library Holdings, LLC[34] Cash Flow - Cash flows provided by operating activities were negative at $(158.9) million, contrasting with positive cash flows of $29.2 million in the same quarter last year[25] - The company reported a net cash flow from financing activities of $75.9 million, compared to $60.5 million in the same period last year[25] Segment Performance - Motion Picture revenues totaled $347.3 million, down 14.5% from $406.5 million in the prior year, with theatrical revenue at $36.0 million compared to $65.9 million[133] - Television Production revenues increased to $241.1 million, up 10.3% from $218.5 million in the previous year, driven by a rise in domestic television revenue[133] - Media Networks programming revenues decreased to $350.1 million, down 8.1% from $381.1 million, with domestic revenues slightly increasing to $345.3 million[133] - Segment profit increased to $143.0 million for the three months ended June 30, 2024, compared to $116.1 million in the same period of 2023, reflecting a growth of 23.1%[186] - Media Networks segment profit rose to $57.5 million, up from $31.9 million, indicating an increase of 80.4% year-over-year[186] Restructuring and Impairments - The company recorded content impairment charges of $19.9 million in Q2 2024, down from $28.0 million in Q2 2023, as part of its restructuring initiatives[163] - The estimated future cash outlay for the current restructuring plan is projected to be between $50 million and $55 million, depending on strategic content review outcomes[165] - The company incurred $24.6 million in total restructuring and other unusual charges in Q2 2024, compared to $32.2 million in Q2 2023[163] - The company recorded impairments of $18.0 million related to operating lease assets in the Television Production segment due to facility integration[167] Shareholder Information - The company has repurchased approximately $288.1 million in common shares to date, with $179.9 million remaining for potential repurchases[157] - The company did not repurchase any common shares during Q2 2024, maintaining its focus on strategic initiatives[157] Debt and Financing - The company issued $389.9 million of 5.5% senior notes due 2029 in exchange for existing notes, with an interest rate increase to 6.0% upon separation of the Starz Business[98] - The company recorded a loss on extinguishment of debt of $5.9 million for the three months ended June 30, 2024[100] - The Revolving Credit Facility had $665.0 million available as of June 30, 2024, with a total commitment of $1.25 billion[81] - The company was in compliance with all applicable covenants as of June 30, 2024[88] - The company expects to repay and/or refinance Term Loan B before December 23, 2024, to avoid acceleration of maturity[84] Other Financial Metrics - The total interest expense for the three months ended June 30, 2024, was $68.8 million, an increase from $62.0 million in the same period of 2023[205] - The company recorded total direct operating expenses of $429.2 million for the three months ended June 30, 2024, compared to $481.2 million in the same period of 2023[205] - The provision for doubtful accounts increased to $9.0 million as of June 30, 2024, up from $7.2 million at the end of the previous quarter[142] - Share-based compensation expense for the three months ended June 30, 2024, was $18.1 million, compared to $16.4 million in the same period of 2023[152] - Corporate general and administrative expenses were $33.3 million, compared to $30.4 million in the prior year, reflecting an increase of 9.5%[186]