Lionsgate Reports Record Revenues of $343.5 Million and Net Loss of $56.2 Million for Second Quarter of Fiscal 2008

Lionsgate Reports Record Revenues of $343.5 Million and Net Loss of $56.2 Million for Second Quarter of Fiscal 2008

Company Reports Positive Free Cash Flow of $21.5 Million for the Second Quarter

SANTA MONICA, Calif. and VANCOUVER, BC, Nov. 9 /PRNewswire-FirstCall/ -- Lionsgate (NYSE:LGF) , the leading independent filmed entertainment studio, reported record high quarterly revenues of $343.5 million and a net loss of $56.2 million for its fiscal quarter ended September 30, 2007, the Company announced today. The Company noted that revenue growth was driven by strong theatrical box office results and television production revenue gains in the quarter.

Lionsgate reported basic and diluted net loss per common share of $0.47 on 119.2 million weighted average common shares outstanding. The Company noted that its loss in the quarter was driven by $122.5 million in theatrical marketing spend expensed in the quarter.

"This was a very strong quarter for all of our businesses, most notably our theatrical business, whose positive contributions will be more fully reflected in future quarters," said Lionsgate Co-Chairman and Chief Executive Officer Jon Feltheimer. "We were pleased not only with our strong performance at the North American box office, but with our robust library and home entertainment revenues and continued momentum in our television production and international businesses as well. Our record revenues for the quarter show that we're doing exactly what we should be doing as a growth company."

The Company's filmed entertainment backlog of $315.8 million exceeded $300 million for the fifth consecutive quarter.

Overall motion picture revenue for the quarter was $234.4 million. Within this segment, theatrical revenue was $42.4 million. Lionsgate had three consecutive significant theatrical releases in the quarter with War, 3:10 To Yuma and Good Luck, Chuck. The Company's successful releases continued with Tyler Perry's Why Did I Get Married? and Saw 4 after the close of the quarter.

Lionsgate's home entertainment revenue was $122.3 million in the second quarter as several Lionsgate releases, including The Condemned and Delta Farce, significantly overindexed their theatrical box office performance. Other significant DVD releases in the quarter included Bug, continuing sales of Pride, Bratz Kidz: Sleepover Adventure and Dr. Strange, the fourth release in Lionsgate's direct-to-video partnership with Marvel.

Television revenue included in the motion picture segment was $37.3 million in the second quarter, primarily attributable to several strong theatrical titles with television windows opening recently, including Tyler Perry's Diary of A Mad Black Woman, Crank, Saw 3 and Employee of The Month.

International revenue was $31.1 million in the second quarter, driven by strong foreign sales and overages of Saw 3, Saw 2 and War as well as strong revenue performances by the Company's motion pictures and third-party product distributed by Lionsgate U.K., including 3:10 To Yuma, Saw 3, Academy Award(R) Best Foreign Language winner The Lives of Others and The Hamiltons.

Television production revenue was $109.1 million in the second quarter, driven by deliveries of episodes of the sixth broadcast season of The Dead Zone (USA), the fourth season of Wildfire (ABC Family), the third season of Weeds (Showtime), the first season of Mad Men (AMC) and domestic series licensing of Tyler Perry's House of Payne, South Park and other television programming from the Company's wholly-owned television syndication subsidiary Debmar-Mercury LLC.

Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2008 second quarter financial results at 9:00 A.M. ET/6:00 A.M. PT, Monday, November 12, 2007. Interested parties may participate live in the conference call by calling 1-800-230-1059 (1-612-234-9959 outside the U.S. and Canada). A full digital replay will be available from Monday afternoon, November 12, through Monday, November 19, by dialing 1-800-475-6701 (1-320-365-3844 outside the U.S. and Canada) and using access code 891844.

Lionsgate is the leading independent filmed entertainment studio, winning the 2006 Best Picture Academy Award(R) for Crash, and the Company is a premier producer and distributor of motion pictures, television programming, home entertainment, family entertainment and video-on-demand content. Its prestigious and prolific library of nearly 12,000 motion picture titles and television episodes is a valuable source of recurring revenue and a foundation for the growth of the Company's core businesses. The Lionsgate brand is synonymous with original, daring, quality entertainment in markets around the globe.

                             www.lionsgate.com                      For further information, contact:     Peter D. Wilkes    Lionsgate    310-255-3726    pwilkes@lionsgate.com     Kelli Easterling    Lionsgate    310-255-4929    keasterling@lionsgate.com   

The matters discussed in this press release include forward-looking statements, including those regarding the timing of our upcoming film slate, the expansion of our television business and the success of our fiscal 2008. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including the substantial investment of capital required to produce and market films and television series, increased costs for producing and marketing feature films, budget overruns, limitations imposed by our credit facilities, unpredictability of the commercial success of our motion pictures and television programming, the cost of defending our intellectual property, difficulties in integrating acquired businesses, technological changes and other trends affecting the entertainment industry, and the risk factors as set forth in Lionsgate's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 9, 2007, and Lionsgate's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on May 30, 2007. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.

                       LIONS GATE ENTERTAINMENT CORP.               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS                                                September 30,        March 31,                                                   2007               2007                                               (Unaudited)                                                    (Amounts in thousands,                                                     except share amounts)                                     ASSETS   Cash and cash equivalents                     $158,865            $51,497   Restricted cash                                 12,363              4,915   Investments - auction rate securities           30,000            237,379   Investments - equity securities                    104                125   Accounts receivable, net of reserve    for video returns and allowances of    $70,017 (March 31, 2007 - $77,691) and    provision for doubtful accounts of    $5,757 (March 31, 2007 - $6,345)              209,457            130,496   Investment in films and television programs    633,024            493,140   Property and equipment                          14,120             13,095   Goodwill                                       224,567            187,491   Other assets                                    52,725             18,957                                               $1,335,225         $1,137,095                                   LIABILITIES   Accounts payable and accrued liabilities       $253,368          $155,617   Participation and residuals                     293,622           171,156   Film obligations                                211,652           167,884   Subordinated notes and other    financing obligations                          328,718           325,000   Deferred revenue                                 92,283            69,548                                                 1,179,643           889,205    Commitments and contingencies                               SHAREHOLDERS' EQUITY   Common shares, no par value, 500,000,000 shares    authorized, 120,317,891 and 116,970,280 shares    issued and outstanding at September 30, 2007    and March 31, 2007, respectively              423,841            398,836   Series B preferred shares (10 shares    issued and outstanding)                           -                  -   Accumulated deficit                           (258,983)          (149,651)   Accumulated other comprehensive income (loss)    1,460             (1,295)                                                  166,318            247,890   Treasury shares, no par value,    1,169,835 shares at September 30, 2007        (10,736)               -                                                  155,582            247,890                                               $1,335,225         $1,137,095                          LIONS GATE ENTERTAINMENT CORP.          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                       Three     Three                                      Months    Months  Six Months Six Months                                      Ended     Ended      Ended     Ended                                    September September  September September                                       30,       30,        30,       30,                                       2007      2006      2007       2006                                         (Amounts in thousands, except                                               per share amounts)    Revenues                          $343,505  $218,169   $542,247  $390,625   Expenses:     Direct operating                 182,487    94,723    269,545   163,268     Distribution and marketing       189,012   113,345    324,513   200,391     General and administration        25,869    21,727     52,709    40,960     Depreciation                         989       581      1,897     1,125       Total expenses                 398,357   230,376    648,664   405,744   Operating loss                     (54,852)  (12,207)  (106,417)  (15,119)   Other expenses (income):     Interest expense                   4,213     4,904      8,073     9,580     Interest and other income         (2,646)   (2,286)    (6,449)   (4,847)     Gain on sale on equity      securities                       (2,785)      -       (2,785)      -       Total other expenses        (income), net                  (1,218)    2,618     (1,161)    4,733   Loss before equity interests and    income taxes                      (53,634)  (14,825)  (105,256)  (19,852)   Equity interests loss               (1,187)     (435)    (1,994)     (377)   Loss before income taxes           (54,821)  (15,260)  (107,250)  (20,229)   Income tax provision (benefit)       1,393      (868)     2,082    (2,233)   Net loss                          $(56,214) $(14,392) $(109,332) $(17,996)    Basic and Diluted Net Loss Per    Common Share                       $(0.47)   $(0.14)    $(0.93)   $(0.17)                          LIONS GATE ENTERTAINMENT CORP.          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                               Six Months         Six Months                                                Ended               Ended                                             September 30,      September 30,                                                 2007               2006                                                 (Amounts in thousands)   Operating Activities:   Net loss                                     $(109,332)          $(17,996)   Adjustments to reconcile net loss    to net cash provided by (used in)    operating activities     Depreciation of property and equipment         1,897              1,125     Amortization of deferred financing costs       1,771              1,957     Amortization of films and television      programs                                    175,619             81,998     Amortization of intangible assets                325                488     Non-cash stock-based compensation              6,677              2,490     Gain on sale of equity securities             (2,711)               -     Equity interests loss                          1,994                377   Changes in operating assets and liabilities:     Restricted cash                                  359             (1,724)     Accounts receivable, net                     (81,272)            99,804     Investment in films and television programs (247,216)          (164,071)     Other assets                                  (2,736)             5,543     Accounts payable and accrued liabilities      69,164            (34,039)     Unpresented bank drafts                          -              (14,772)     Participation and residuals                  115,726            (16,075)     Film obligations                              (6,846)            43,361     Deferred revenue                              18,028             22,316   Net Cash Flows Provided By (Used    In) Operating Activities                      (58,553)            10,782   Investing Activities:   Purchases of investments - auction    rate securities                              (207,266)          (296,043)   Proceeds from the sale of    investments - auction rate securities         414,641            316,375   Purchases of investments - equity securities    (4,672)               -   Proceeds from the sale of    investments - equity securities                23,782                -   Acquisition of Mandate, net of unrestricted    cash acquired                                 (40,850)               -   Acquisition of Debmar, net of unrestricted    cash acquired                                     -              (24,112)   Investment in equity method investees           (6,465)               -   Loan to equity method investee                  (3,059)               -   Purchases of property and equipment             (2,385)            (3,537)   Net Cash Flows Provided By (Used    In) Investing Activities                      173,726             (7,317)   Financing Activities:   Exercise of stock options                          745              2,429   Repurchases of common shares                   (10,736)               -   Borrowings under financing arrangements          3,718                -   Net Cash Flows Provided By (Used    In) Financing Activities                       (6,273)             2,429   Net Change In Cash And Cash Equivalents        108,900              5,894   Foreign Exchange Effects on Cash                (1,532)              (110)   Cash and Cash Equivalents -    Beginning Of Period                            51,497             46,978   Cash and Cash Equivalents - End Of Period     $158,865            $52,762                          LIONS GATE ENTERTAINMENT CORP.                   RECONCILIATION OF NET CASH FLOWS USED IN                   OPERATING ACTIVITIES TO FREE CASH FLOW                                         Three Months Ended  Six Months Ended                                          September 30,      September 30,                                          2007     2006      2007     2006                                               (Amounts in thousands)   Net Cash Flows Provided By (Used In)    Operating Activities                 $21,818  $25,806  $(58,553) $10,782     Purchases of property and equipment    (368)  (1,706)   (2,385)  (3,537)     Decrease in Unpresented Bank Drafts     -        -         -     14,772   Free Cash Flow, as defined            $21,450  $24,100  $(60,938) $22,017     

Free cash flow is defined as net cash flows provided by or used in operating activities less purchases of property and equipment and unpresented bank drafts. Unpresented bank drafts represent checks issued and not yet presented for payment in excess of the cash balances at custodial banks. The applicable bank accounts are funded at the time the checks are presented for payment.

Free cash flow is a non-GAAP financial measure as defined in Regulation G promulgated by the Securities and Exchange Commission. This non-GAAP financial measure is in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with Generally Accepted Accounting Principles.

Management believes this non-GAAP measure provides useful information to investors regarding cash that our operating businesses generate before taking into account cash movements that are non-operational. Free cash flow is a non- GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry. Not all companies calculate free cash flow in the same manner and the measure as presented may not be comparable to similarly titled measures presented by other companies.

First Call Analyst:
FCMN Contact: keasterling@lionsgate.com

Source: Lionsgate

CONTACT: Peter D. Wilkes, +1-310-255-3726, pwilkes@lionsgate.com, or
Kelli Easterling, +1-310-255-4929, keasterling@lionsgate.com, both of
Lionsgate

Web site: http://www.lionsgate.com/

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Profile: International Entertainment