Lionsgate Reports Record Revenues of $1.47 Billion for Fiscal 2009, up 8% From Previous Year; Net Loss is $163.0 Million

Lionsgate Reports Record Revenues of $1.47 Billion for Fiscal 2009, up 8% From Previous Year; Net Loss is $163.0 Million

Company Reports $463.2 Million In Fourth Quarter Revenues

SANTA MONICA, Calif., and VANCOUVER, British Columbia, June 1 /PRNewswire-FirstCall/ -- Lionsgate (NYSE:LGF) , the leading next generation studio, continued its growth momentum for fiscal 2009, reporting revenues of $1.47 billion and a net loss of $163.0 million for its fiscal year ended March 31, 2009, the Company announced today. The Company noted that revenue growth of 8% from the prior year was driven by increased home entertainment sales, growth in library revenues, continued strength in television production revenues and burgeoning digital revenues throughout the fiscal year. The Company reported $463.2 million in fourth quarter revenues, its second best quarterly revenue performance, driven by record theatrical box office in the quarter and strong home entertainment and library sales.

Lionsgate reported a net loss for the fiscal year ended March 31, 2009 of $163.0 million. Diluted net loss per common share was $1.40 on 116.8 million weighted average common shares outstanding compared to diluted net loss of $0.62 on 118.4 million weighted average common shares outstanding the prior year. The loss was primarily attributable to the underperformance of theatrical releases in the second and third fiscal quarters and a charge of $36.1 million taken on the Company's North American DVD distribution of HIT Entertainment's family entertainment titles. Theatrical distribution and marketing expenses of $330.5 million increased 1.3% from $326.3 million in the previous year. The Company anticipates that theatrical marketing and distribution expenses will decrease by more than $100 million in fiscal 2010.

Lionsgate reported EBITDA for the year of negative $133.6 million compared to EBITDA of negative $54.6 million in the prior year. EBITDA is defined as earnings before interest, income tax provision, depreciation and amortization, equity interests and gains on extinguishment of debt and the sale of equity securities.

"We ended our fiscal year on a strong note with record box office in the first calendar quarter," said Lionsgate Co-Chairman and Chief Executive Officer Jon Feltheimer. "We are also pleased that we could drive library, home entertainment and television revenues to record levels in such a challenging market environment. We believe that continued strength in our core businesses coupled with meaningful contributions from many of our recent investments and lower theatrical marketing costs position us for strong positive metrics in fiscal 2010."

The Company reported that cash and cash equivalents were $138.5 million at March 31, 2009. This is prior to the sale of a 49% equity interest in TV Guide Network and TV Guide.com to global private equity investment fund One Equity Partners for $123 million in cash on May 28, 2009. The Company's filmed entertainment backlog grew to a record $499.5 million at fiscal year-end. Filmed entertainment backlog represents the amount of future revenue not yet recorded from the licensing of films and television product for television exhibition and in international markets.

Overall motion picture revenue for the year grew to a record $1.23 billion, an increase of 7% from $1.15 billion in the prior year, reflecting gains in theatrical, home entertainment and television from motion pictures that more than offset declines in international and Mandate Pictures. Within the motion picture segment, theatrical revenue was $223.3 million, an increase of 17% from $191.7 million the previous year, propelled by record fourth quarter box office from titles such as Tyler Perry's Madea Goes To Jail, My Bloody Valentine 3-D and The Haunting In Connecticut as well as successes earlier in the year that included Saw V, Tyler Perry's The Family That Preys and The Forbidden Kingdom. However, margins during the fiscal year decreased, primarily attributable to underperforming theatrical releases in the second and third quarter, contributing to the net loss for the year.

Lionsgate's home entertainment revenue was a record $675.6 million in the fiscal year, a 5% increase from $645.1 million in the prior year, reflecting strong sales of titles such as Saw V, Tyler Perry's The Family That Preys, The Forbidden Kingdom, The Bank Job, The Eye, Rambo, Tyler Perry's Meet The Browns, Punisher: War Zone, Transporter 3, Bangkok Dangerous and My Best Friend's Girl. This includes $34.9 million from television programming on DVD, including the third season of Weeds and the first season of Mad Men, a 62% increase from $21.6 million in the prior year. Lionsgate achieved a record $279 million in library revenues in the fiscal year, the majority of which is included in Home Entertainment.

Television revenue included in the motion picture segment was $170.3 million in the fiscal year, a 47% increase from $115.5 million in the prior year, reflecting a strong pay television slate that included titles such as 3:10 To Yuma, Forbidden Kingdom, Good Luck Chuck, Tyler Perry's Meet The Browns, Rambo, Saw IV, The Bank Job, The Eye and Tyler Perry's Why Did I Get Married?

Lionsgate's international revenues of $142.3 million decreased 10% from $158.7 million the prior year as this year's international theatrical slate of My Best Friend's Girl, Punisher: War Zone, Saw V and The Eye compared unfavorably to last year's theatrical slate of Good Luck Chuck, Saw IV, War and The Condemned, exacerbated by softness in the international sales market.

Mandate Pictures' revenue of $45.5 million decreased 13% from $52.3 million in the prior year. Revenue drivers in the fiscal year were Juno and Nick & Norah's Infinite Playlist.

Television production revenue increased to $222.2 million in the fiscal year, a 6% gain from $210.5 million in the prior year, as domestic series licensing and home entertainment releases of television programming reported strong gains. International television revenues and revenues from domestic television movies and miniseries declined. In fiscal 2009, Lionsgate delivered 62 episodes and 54.5 hours of such television series as the Emmy Award-winning Mad Men (AMC), Weeds (Showtime), Crash (Starz), Fear Itself (NBC and FEARnet) and Scream Queens (VH1) compared to 57 episodes and 48.5 hours of television series and pilots the prior year. Lionsgate anticipates continued growth of its television business in fiscal 2010 with the addition of new series such as Nurse Jackie (Showtime), which debuts on June 8th, Blue Mountain State (Spike), new reality shows from the Company's joint venture with ISH Entertainment and a Debmar-Mercury portfolio of syndicated programming that includes Tyler Perry's House of Payne, the House of Payne spinoff Meet The Browns, The Wendy Williams Show, E! True Hollywood Stories, Family Feud and South Park.

Also reflecting growth of the Company's television business is $10.3 million in Media Networks revenue, representing one month of revenue from TV Guide Network and TV Guide.com subsequent to their February 28, 2009 acquisition by Lionsgate.

Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2009 financial results at 9:00 A.M. ET/6:00 A.M. PT, Tuesday, June 2, 2009. Interested parties may participate live in the conference call by calling 1-800-230-1059 (612-332-0418 outside the U.S. and Canada). A full digital replay will be available from Tuesday afternoon, June 2, through Tuesday, June 9, by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada) and using access code 102099.

Lionsgate is the leading next generation studio with a diversified 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 to create a multiplatform global industry leader in entertainment through the recent acquisition of TV Guide Network, one of the 25 most widely distributed cable networks, the recent acquisition of TV Guide.com, a premier content and navigation portal, partnerships that include the FEARnet branded VOD and Internet horror channel with Sony and Comcast, the expected fall 2009 launch of EPIX, a new premium entertainment channel with partners Viacom and MGM, investment in the leading young men's digital distribution platform Break Media, ownership of the premier independent television syndication company Debmar-Mercury and an alliance with independent filmed entertainment production and distribution company Roadside Attractions.

The Company is a market share leader at the North American theatrical box office for calendar 2009 due to recent theatrical box office successes such as TYLER PERRY'S MADEA GOES TO JAIL, the second highest-grossing film in Lionsgate history, MY BLOODY VALENTINE 3D and THE HAUNTING IN CONNECTICUT. Other recent successes include SAW V, RELIGULOUS, FORBIDDEN KINGDOM, RAMBO and THE BANK JOB. Lionsgate has forged a strong position in television with the production of such critically-acclaimed series as "Mad Men," "Weeds" and "Crash," the distribution of Tyler Perry's "House of Payne," "Family Feud" and "South Park," and upcoming shows including Tyler Perry's "Meet The Browns" and "The Wendy Williams Show." In addition, the Company's home entertainment business, propelled by such recent DVD successes as TRANSPORTER 3, SAW V and TYLER PERRY'S THE FAMILY THAT PREYS, is the industry leader in box office-to-DVD conversion rate and has market share of nearly 8%. 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 remains synonymous with original, daring, quality entertainment in markets around the world.

   More information on Lionsgate can be found at www.lionsgate.com.                                   www.lionsgate.com    For further information, please contact:    Peter D. Wilkes   310-255-3726   pwilkes@lionsgate.com   

The matters discussed in this press release include forward-looking statements, including those regarding the timing of our upcoming film slate and the performance of our 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 June 1, 2009. 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

                        LIONSGATE ENTERTAINMENT CORP.                        CONSOLIDATED BALANCE SHEETS                                                    March 31,   March 31,                                                      2009        2008                                                      ----        ----                                                  (Amounts in thousands,                                                   except share amounts)                                   ASSETS   Cash and cash equivalents                        $138,475    $371,589   Restricted cash                                    10,056      10,300   Restricted investments                              6,987       6,927   Accounts receivable, net of reserve for returns    and allowances of $98,947 (March 31, 2008 -    $95,515) and provision for doubtful    accounts of $9,847 (March 31, 2008 -    $5,978)                                          227,010     260,284   Investment in films and television programs,    net                                              702,767     608,942   Property and equipment, net                        42,415      13,613   Finite-lived intangible assets, net                78,904       2,317   Goodwill                                          379,402     224,531   Other assets                                       81,554      39,255                                                      ------      ------                                                  $1,667,570  $1,537,758                                                  ==========  ==========                                  LIABILITIES   Bank loans                                       $255,000          $-   Accounts payable and accrued    liabilities                                      270,561     245,430   Participations and residuals                      371,857     385,846   Film and production obligations                   304,525     278,016   Subordinated notes and other financing    obligations                                      331,716     328,718   Deferred revenue                                  142,093     111,510                                                     -------     -------                                                   1,675,752   1,349,520                                                   ---------   ---------    Commitments and contingencies                       SHAREHOLDERS' EQUITY (DEFICIENCY)   Common shares, no par value, 500,000,000 shares    authorized, 116,950,512 and    121,081,311 shares issued at March 31, 2009    and March 31, 2008, respectively                 390,295     434,650   Series B preferred shares (nil and 10 shares    issued and outstanding    at March 31, 2009 and March 31, 2008,    respectively)                                          -           -   Accumulated deficit                              (386,599)   (223,619)   Accumulated other comprehensive loss              (11,878)       (533)                                                     -------        ----                                                      (8,182)    210,498   Treasury shares, no par value, 2,410,499    shares at March 31, 2008                               -     (22,260)                                                         ---     -------                                                      (8,182)    188,238                                                      ------     -------                                                  $1,667,570  $1,537,758                                                  ==========  ==========                          LIONSGATE ENTERTAINMENT CORP.                  CONSOLIDATED STATEMENTS OF OPERATIONS                                       Year        Year        Year                                      Ended       Ended      Ended                                    March 31,   March 31,  March 31,                                       2009        2008       2007                                       ----        ----       ----                                      (Amounts in thousands, except                                           per share amounts)     Revenues                        $1,466,374  $1,361,039   $976,740   Expenses:     Direct operating                 793,816     660,924    435,934     Distribution and marketing       669,557     635,666    404,410     General and administration       136,563     119,080     90,782     Depreciation and amortization      7,657       5,500      3,670                                        -----       -----      -----       Total expenses               1,607,593   1,421,170    934,796                                    ---------   ---------    -------   Operating income (loss)           (141,219)    (60,131)    41,944                                     --------     -------     ------   Other expenses (income):     Interest expense                  19,327      16,432     17,832     Interest and other income         (5,785)    (11,276)   (11,930)     Gain on sale of equity      securities                            -      (2,909)    (1,722)     Gain on extinguishment of      debt                             (3,549)          -          -                                       ------         ---        ---       Total other expenses, net        9,993       2,247      4,180                                        -----       -----      -----   Income (loss) before equity    interests and income taxes       (151,212)    (62,378)    37,764   Equity interests loss               (9,044)     (7,559)    (2,605)                                       ------      ------     ------   Income (loss) before income    taxes                            (160,256)    (69,937)    35,159   Income tax provision                 2,724       4,031      7,680                                        -----       -----      -----   Net income (loss)                $(162,980)   $(73,968)   $27,479                                    =========    ========    =======   Basic Net Income (Loss) Per    Common Share                       $(1.40)     $(0.62)     $0.25                                       ======      ======      =====   Diluted Net Income (Loss) Per    Common Share                       $(1.40)     $(0.62)     $0.25                                       ======      ======      =====   Weighted average number of    common shares outstanding:     Basic                            116,795     118,427    108,398     Diluted                          116,795     118,427    111,164                           LIONSGATE ENTERTAINMENT CORP.                  CONSOLIDATED STATEMENTS OF CASH FLOWS                                           Year        Year        Year                                         Ended       Ended       Ended                                        March 31,   March 31,   March 31,                                          2009        2008        2007                                          ----        ----        ----                                             (Amounts in thousands)   Operating Activities:   Net income (loss)                    $(162,980)  $(73,968)   $27,479   Adjustments to reconcile net income    (loss) to net cash provided    by (used in) operating activities:     Depreciation of property and      equipment                             5,925      3,974      2,786     Amortization of deferred      financing costs                       4,196      3,581      3,756     Amortization of films and      television programs                 458,757    403,319    241,640     Amortization of intangible assets      1,732      1,526        884     Non-cash stock-based compensation     13,438     13,934      7,259     Gain on sale of equity securities          -     (2,909)    (1,722)     Gain on extinguishment of debt        (3,549)         -          -     Deferred income taxes                      -     (1,087)     6,780     Equity interests loss                  9,044      7,559      2,605   Changes in operating assets and    liabilities:     Restricted cash                          244       (228)    (4,095)     Accounts receivable, net              37,304   (128,876)    79,704     Investment in films and      television programs                (558,277)  (445,714)  (297,149)     Other assets                          (7,363)    (2,985)     7,448     Accounts payable and accrued      liabilities                          30,323     67,791    (38,509)     Unpresented bank drafts                    -          -    (14,772)     Participations and residuals         (12,781)   209,806      3,261     Film obligations                      59,376      1,387     (6,079)     Deferred revenue                      22,705     32,040     38,451                                           ------     ------     ------   Net Cash Flows Provided By (Used In)    Operating Activities                 (101,906)    89,150     59,727                                         --------     ------     ------   Investing Activities:   Purchases of investments - auction    rate securities                       (13,989)  (229,262)  (865,750)   Proceeds from the sale of    investments - auction    rate securities                        14,000    466,641    795,448   Purchases of investments - equity    securities                                  -     (4,836)      (122)   Proceeds from the sale of    investments -    equity securities                           -     24,155        390   Acquisition of TV Guide Network,    net of    unrestricted cash acquired           (243,158)         -          -   Acquisition of Mandate Pictures,    net of    unrestricted cash acquired                  -    (41,205)         -   Acquisition of Maple Pictures, net    of    unrestricted cash acquired                  -      1,753          -   Acquisition of Debmar, net of    unrestricted    cash acquired                               -          -    (24,119)   Investment in equity method    investees                             (18,031)    (6,460)    (5,116)   Increase in loan receivables           (28,767)    (5,895)         -   Purchases of property and equipment     (8,674)    (3,608)    (8,348)                                           ------     ------     ------   Net Cash Flows Provided By (Used In)    Investing Activities                 (298,619)   201,283   (107,617)                                         --------    -------   --------   Financing Activities:   Exercise of stock options                2,894      1,251      4,277   Tax withholding requirements on    equity awards                          (3,734)    (5,319)         -   Repurchase and cancellation of    common shares                         (44,968)   (22,260)         -   Borrowings under bank loan             255,000   Borrowings under financing    arrangements                                -      3,718          -   Increase in production obligations     189,858    162,400     97,083   Repayment of production obligations   (222,034)  (111,357)   (48,993)   Repayment of subordinated notes and    other    financing obligations                  (5,377)         -          -                                           ------        ---        ---   Net Cash Flows Provided By    Financing Activities                  171,639     28,433     52,367                                          -------     ------     ------   Net Change In Cash And Cash    Equivalents                          (228,886)   318,866      4,477   Foreign Exchange Effects on Cash        (4,228)     1,226         42   Cash and Cash Equivalents -    Beginning Of Period                   371,589     51,497     46,978                                          -------     ------     ------   Cash and Cash Equivalents - End Of    Period                               $138,475   $371,589    $51,497                                         ========   ========    =======                          LIONSGATE ENTERTAINMENT CORP.               RECONCILIATION OF FREE CASH FLOW, AS DEFINED        TO NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                    Year       Year                                                  Ended      Ended                                                March 31,   March 31,                                                   2009       2008                                                   ----       ----                                               (Amounts in thousands)   Net Cash Flows Provided By (Used In)    Operating Activities                        $(101,906)   $89,150     Purchases of property and equipment           (8,674)    (3,608)     Net borrowings under and (repayment) of      production obligations                      (32,176)    51,043                                                  -------     ------   Free Cash Flow, as defined                   $(142,756)  $136,585                                                =========   ========      Free cash flow is defined as net cash flows provided by (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.                        LIONSGATE ENTERTAINMENT CORP.        RECONCILIATION OF EBITDA, AS DEFINED TO NET INCOME (LOSS)                                 Year       Year       Year                               Ended      Ended      Ended                             March 31,  March 31,  March 31,                                2009       2008       2007                                ----       ----       ----                                  (Amounts in thousands)   EBITDA, as defined        $(133,562)  $(54,631)   $45,614     Depreciation and      amortization              (7,657)    (5,500)    (3,670)     Interest expense          (19,327)   (16,432)   (17,832)     Interest and other      income                     5,785     11,276     11,930     Equity interests loss      (9,044)    (7,559)    (2,605)     Gain on sale of equity      securities                     -      2,909      1,722     Gain on extinguishment      of debt                    3,549          -          -     Income tax provision       (2,724)    (4,031)    (7,680)                                ------     ------     ------   Net income (loss)         $(162,980)  $(73,968)   $27,479                             =========   ========    =======      EBITDA is defined as earnings before interest, income tax provision,   depreciation and amortization, equity interests, and gains on   extinguishment of debt and the sale of equity securities.  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: court0917@aol.com

Source: Lionsgate

CONTACT: Peter D. Wilkes of Lionsgate, +1-310-255-3726,
pwilkes@lionsgate.com

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

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Profile: International Entertainment