Lionsgate Reports Revenues of $298.5 Million for First Quarter of Fiscal 2009, Up 50% From Prior Year's First Quarter; Net Income of $7.1 Million Compared to Net Loss of $53.1 Million in Prior Year First Quarter

Lionsgate Reports Revenues of $298.5 Million for First Quarter of Fiscal 2009, Up 50% From Prior Year's First Quarter; Net Income of $7.1 Million Compared to Net Loss of $53.1 Million in Prior Year First Quarter

Company Reports Positive EBITDA Before Equity Interests Of $13.2 Million In Q1 Compared To Negative $50.7 Million In Prior Year First Quarter

SANTA MONICA, Calif. and VANCOUVER, British Columbia, Aug. 8 /PRNewswire-FirstCall/ -- Lionsgate (NYSE:LGF) , the leading next generation filmed entertainment studio, continued its strong growth momentum, reporting revenues of $298.5 million, net income of $7.1 million and EBITDA of positive $13.2 million for the first quarter of fiscal 2009 (period ended June 30, 2008), the Company announced today. EBITDA is defined as earnings before interest, income tax provision, depreciation and equity interests. Lionsgate senior management noted that the 50% revenue growth was driven by double-digit revenue increases in all of its core businesses, including motion pictures, television programming, home entertainment, library, international and digital.

Net income of $7.1 million in the quarter translated into basic net income per common share of $0.06 based on 118.4 million weighted average common shares outstanding compared to a net loss of $53.1 million or basic loss per common share of $0.45 based on 117.1 million weighted average common shares outstanding in the prior year's first quarter. The $60 million improvement in profitability over the prior year's first quarter was primarily attributable to lower theatrical P&A costs expensed in the quarter in addition to strong revenue gains throughout the Company's core businesses.

"Our robust operations, coupled with the recent close of our $340 million five-year revolving credit facility with JP Morgan and our strong balance sheet, positions us to continue growing our business despite the current difficult market environment," said Lionsgate Co-Chairman and Chief Executive Officer Jon Feltheimer. "As a result, we expect to continue our double-digit revenue growth this year, with a view toward generating significant positive EBITDA and continued double-digit revenue growth in fiscal 2010."

The Company's filmed entertainment backlog also grew to a record $441.2 million at June 30, 2008. Filmed entertainment backlog represents the amount of future revenue contracted but not yet recorded from the licensing of films and television product for television exhibition and in international markets.

Overall motion picture revenue for the quarter was $257.4 million, an increase of 51.1% from $170.3 million in the prior year's first quarter, due to growth throughout the theatrical, DVD, television from motion pictures, international and Mandate Pictures segments of the business.

Theatrical revenue was $30.5 million, an increase of 61% from $19.0 million in the prior year's first quarter, driven by the success of THE FORBIDDEN KINGDOM and continued box office revenues from MEET THE BROWNS and THE BANK JOB, both released in the fourth quarter of fiscal 2008.

Lionsgate's home entertainment revenue grew to $152.2 million in the quarter, a 47% increase from $103.8 million in the prior year first quarter. The results reflected strength throughout the Company's home entertainment portfolio of packaged media, VOD and digital businesses, including the best first quarter library revenues that the Company has ever reported. Top DVD titles in the quarter such as RAMBO, THE EYE, WITLESS PROTECTION, 3:10 TO YUMA (released in January 2008) and BELLA (from Roadside Attractions) reflected significant and growing contributions from strong BluRay high-definition disc sales.

Television revenue included in the motion picture segment was $28.9 million in the first quarter, a 29% increase from $22.4 million in the prior year first quarter, led by titles such as 3:10 TO YUMA, BRATZ: THE MOVIE, GOOD LUCK CHUCK, SAW IV and WAR.

Lionsgate's international revenue grew 51% to $34.3 million in the first quarter compared to $22.7 million in the first quarter of the prior year, attributable primarily to the international performance of Saw IV and The Eye. The Company had its best foreign sales market at the Cannes Film Festival in May.

Mandate Pictures reported first quarter revenues of $8.5 million, reflecting contributions from 30 DAYS OF NIGHT, HAROLD AND KUMAR ESCAPE FROM GUANTANAMO BAY, JUNO, MESSENGERS and PASSENGERS.

Television production revenue in the quarter was $41.1 million, up 45% from $28.4 million in the prior year first quarter as WEEDS SEASON 4 (Showtime), MAD MEN SEASON 2 (AMC), FEAR ITSELF (NBC), DEBMAR-MERCURY'S TYLER PERRY'S HOUSE OF PAYNE (TBS) and FAMILY FEUD, and the WEEDS SEASON 3 DVD all made strong contributions. Weeds has been picked up for its fifth and sixth seasons by Showtime, positioning the Emmy-nominated series for future syndication, and MAD MEN earned 16 Emmy (R) nominations, a record for a basic cable drama series.

Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2009 first quarter financial results at 9:00 A.M. ET/6:00 A.M. PT, Monday, August 11, 2008. Interested parties may participate live in the conference call by calling 1-800-230-1092 (612-288-0329 outside the U.S. and Canada). A full digital replay will be available from Monday morning, August 11, through Monday, August 18, by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada) and using access code 956017.

Lionsgate is the leading next generation filmed entertainment studio with a major presence in the production and distribution of motion pictures, television programming, home entertainment, family entertainment, video-on-demand and digitally delivered content. The Company is leveraging its content leadership and marketing expertise through a series of partnerships that include the operation of the highly successful FEARNet branded VOD and Internet horror channel with Sony and Comcast, the recent announcement of the fall 2009 launch of a new premium entertainment channel with partners Viacom, Paramount Pictures and MGM, investment in the leading young men's digital distribution platform Break.com, ownership of the premier independent television syndication company Debmar-Mercury and an alliance with independent filmed entertainment production and distribution company Roadside Attractions. Lionsgate also has forged partnerships with leading content creators, owners and distributors in key territories around the world, including Televisa in the U.S. and Latin America, StudioCanal in the UK, Hoyts and Sony in Australia and Eros International in India.

The Company has generated more than $450 million at the North American theatrical box office in the past year and has released a string of hits including THE FORBIDDEN KINGDOM, TYLER PERRY'S MEET THE BROWNS, THE BANK JOB, RAMBO, THE EYE, SAW IV, TYLER PERRY'S WHY DID I GET MARRIED?, GOOD LUCK CHUCK, 3:10 TO YUMA and WAR, most of which have opened at #1 or #2 at the box office. The Company has also forged leadership positions in television and home entertainment with the production of such critically-acclaimed television series as WEEDS and MAD MEN, the distribution of TYLER PERRY'S HOUSE OF PAYNE, FAMILY FEUD, SOUTH PARK, TRIVIAL PURSUIT and THE DEAD ZONE, among others, and approximately 8% market share and the industry's leading box office-to-DVD conversion rate in home entertainment. Lionsgate handles a prestigious and prolific library of approximately 12,000 motion picture and television titles that is an important source of recurring revenue and serves as the foundation for the growth of the Company's core businesses. The Lionsgate brand is synonymous with entrepreneurial innovation and original, daring, quality entertainment in markets around the globe. http://www.lionsgate.com/

    For further information, contact:    Peter D. Wilkes    Lionsgate    310-255-3726    pwilkes@lionsgate.com     Kristin Robinson    Lionsgate    310-255-5114    krobinson@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 2009 and fiscal 2010. 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 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on May 30, 2008. 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                                                 June 30,          March 31,                                                  2008               2008                                               (Unaudited)                                                     (Amounts in thousands,                                                      except share amounts)                                     ASSETS   Cash and cash equivalents                     $230,590           $371,589   Restricted cash                                 15,850             10,300   Investments                                      6,909              6,927   Accounts receivable, net of reserve for    video returns and allowances of $98,024    (March 31, 2008 - $95,515) and provision    for doubtful accounts of $6,302 (March 31,    2008 - $5,978)                                198,440            260,284   Investment in films and television programs    740,480            608,942   Property and equipment                          14,836             13,613   Goodwill                                       224,213            224,531   Other assets                                    55,429             41,572                                               $1,486,747         $1,537,758                                 LIABILITIES   Accounts payable and accrued    liabilities                                  $182,985           $245,430   Participation and residuals                    350,952            385,846   Film and production obligations                312,616            278,016   Subordinated notes and other    financing obligations                         328,718            328,718   Deferred revenue                               129,063            111,510                                                1,304,334          1,349,520    Commitments and contingencies                             SHAREHOLDERS' EQUITY   Common shares, no par value,    500,000,000 shares authorized,    121,445,965 and 121,081,311    shares issued at June 30, 2008    and March 31, 2008, respectively              437,990            434,650   Series B preferred shares (10 shares    issued and outstanding)                           -                  -   Accumulated deficit                           (216,524)          (223,619)   Accumulated other comprehensive loss              (373)              (533)                                                  221,093            210,498   Treasury shares, no par value,    4,072,499 and 2,410,499 shares at    June 30, 2008 and March 31, 2008,    respectively                                  (38,680)           (22,260)                                                  182,413            188,238                                               $1,486,747         $1,537,758                          LIONS GATE ENTERTAINMENT CORP.          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                                 Three Months     Three Months                                                   Ended             Ended                                                  June 30,          June 30,                                                    2008              2007                                                  (Amounts in thousands,                                                  except per share amounts)    Revenues                                       $298,459          $198,742   Expenses:     Direct operating                              148,008            87,058     Distribution and marketing                     98,975           135,501     General and administration                     38,308            26,840     Depreciation                                    1,062               908       Total expenses                              286,353           250,307   Operating income (loss)                          12,106           (51,565)   Other expenses (income):     Interest expense                                4,311             3,860     Interest and other income                      (2,155)           (3,803)       Total other expenses, net                     2,156                57   Income (loss) before equity interests    and income taxes                                 9,950           (51,622)   Equity interests loss                            (2,186)             (807)   Income (loss) before income taxes                 7,764           (52,429)   Income tax provision                                669               689   Net income (loss)                                $7,095          $(53,118)   Basic Net Income (Loss) Per Common Share          $0.06            $(0.45)   Diluted Net Income (Loss) Per Common Share        $0.06            $(0.45)                          LIONS GATE ENTERTAINMENT CORP.          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                                  Three Months    Three Months                                                    Ended            Ended                                                   June 30,         June 30,                                                     2008             2007                                                     (Amounts in thousands)   Operating Activities:   Net income (loss)                                $7,095         $(53,118)   Adjustments to reconcile net income    (loss) to      net cash  used in operating activities:      Depreciation of property and equipment         1,062              908      Amortization of deferred financing costs         933              884      Amortization of films and television       programs                                     69,047           49,862      Amortization of intangible assets                324              162      Non-cash stock-based compensation              3,419            2,846      Equity interests loss                          2,186              807   Changes in operating assets and liabilities:      Restricted cash                               (5,550)             271      Accounts receivable, net                      61,961            9,439      Investment in films and television programs (200,897)        (136,139)      Other assets                                  (2,571)          (3,061)      Accounts payable and accrued liabilities     (62,039)          20,185      Participation and residuals                  (34,893)          15,527      Film obligations                              (7,445)           4,361      Deferred revenue                              17,551           31,486   Net Cash Flows Used In Operating Activities    (149,817)         (55,580)   Investing Activities:   Purchases of investments - auction rate    securities                                         -           (172,442)   Proceeds from the sale of investments -    auction rate securities                            -            243,491   Purchases of investments - equity    securities                                         -             (3,432)   Proceeds from the sale of investments -    equity securities                                  -             16,343   Investment in equity method investees           (11,094)             -   Loan to equity method investee                   (3,100)   Purchases of property and equipment              (2,279)          (2,017)   Net Cash Flows Provided By (Used In)    Investing Activities                           (16,473)          81,943   Financing Activities:   Exercise of stock options                           825              390   Amounts paid to satisfy tax withholding    requirements on equity awards                   (1,113)             -   Repurchases of common shares                    (16,420)             -   Borrowings under financing arrangements             -              3,718   Increase in production obligations               70,545           22,869   Payment of production obligations               (28,505)         (47,660)   Net Cash Flows Provided By (Used In)    Financing Activities                            25,332          (20,683)   Net Change In Cash And Cash Equivalents        (140,958)           5,680   Foreign Exchange Effects on Cash                    (41)           1,403   Cash and Cash Equivalents - Beginning    Of Period                                      371,589           51,497   Cash and Cash Equivalents - End Of Period      $230,590          $58,580                          LIONS GATE ENTERTAINMENT CORP.                 RECONCILIATION OF FREE CASH FLOW, AS DEFINED               TO NET CASH FLOWS USED IN OPERATING ACTIVITIES                                                 Three Months      Three Months                                                  Ended              Ended                                                 June 30,           June 30,                                                   2008               2007                                                   (Amounts in thousands)   Free Cash Flow, as defined                   $(110,056)         $(82,388)      Purchases of property and equipment          (2,279)           (2,017)      Net borrowings under and repayment       of production obligations                   42,040           (24,791)   Net Cash Flows Used In Operating    Activities                                  $(149,817)         $(55,580)    

Free cash flow is defined as net cash flows used in operating activities, less purchases of property and equipment and plus or minus the net increase or decrease in production obligations. The adjustment for the production obligations is made because the GAAP based cash flows from operations reflects a non-cash reduction of cash flows for the cost of films associated with production obligations prior to the time the Company actually pays for the film. The Company believes that it is more meaningful to reflect the impact of the payment for these films in its free cash flow when the payments are actually made.

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 whether classified as operating or financing activity (related to the production of our films) within our GAAP based statement of cash flows, 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.

                       LIONS GATE ENTERTAINMENT CORP.          RECONCILIATION OF EBITDA, AS DEFINED TO NET INCOME (LOSS)                                                Three Months      Three Months                                                   Ended            Ended                                                  June 30,          June 30,                                                    2008              2007                                                     (Amounts in thousands)   EBITDA, as defined                             $13,168          $(50,657)      Depreciation                                 (1,062)             (908)      Interest expense                             (4,311)           (3,860)      Interest and other income                     2,155             3,803      Equity interests loss                        (2,186)             (807)      Income tax provision                           (669)             (689)   Net income (loss)                               $7,095          $(53,118)    

EBITDA is defined as earnings before interest, income tax provision, depreciation and equity interests losses. EBITDA as defined, is a non-GAAP financial measure. Management believes EBITDA as defined, to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operations. Presentation of EBITDA as defined, is a non-GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance. While management considers EBITDA as defined, to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with Generally Accepted Accounting Principles. EBITDA as defined, does not reflect cash available to fund cash requirements. Not all companies calculate EBITDA as defined, 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: KRobinson@LIONSGATE.com

Source: Lionsgate

CONTACT: Peter D. Wilkes, +1-310-255-3726, pwilkes@lionsgate.com, or
Kristin Robinson, +1-310-255-5114, krobinson@lionsgate.com, both of Lionsgate

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

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Profile: International Entertainment