July 31, 2012

DreamWorks Animation Reports Second Quarter 2012 Financial Results

GLENDALE, Calif., July 31, 2012 /PRNewswire/ -- DreamWorks Animation SKG, Inc. (NASDAQ: DWA) today announced financial results for its second quarter ended June 30, 2012. For the quarter, the Company reported total revenue of $162.8 million and net income of $12.8 million, or $0.15 per share on a fully diluted basis.

"DreamWorks Animation's second quarter of 2012 was driven primarily by the box office performance of Madagascar 3: Europe's Most Wanted, the seventh highest-grossing film of the year," said Jeffrey Katzenberg, Chief Executive Officer of DreamWorks Animation. "The third and biggest film in our blockbuster Madagascar franchise has surpassed $500 million at the worldwide box office to date, with a large number of key international territories yet to come."

Madagascar 3: Europe's Most Wanted contributed approximately $54.8 million of revenue to the quarter, driven primarily by its performance at the worldwide box office. The film was released on June 8, 2012 and has grossed approximately $210 million at the domestic box office and $293 million at the international box office to date.

Puss In Boots contributed $22.8 million of revenue to the quarter, driven primarily by home entertainment. The film reached an estimated 5.2 million home entertainment units sold worldwide through the end of the second quarter, net of actual and estimated future returns.

Kung Fu Panda 2 contributed $46.4 million of revenue to the quarter, driven primarily by domestic pay television. The film reached an estimated 5.7 million home entertainment units sold worldwide through the end of the second quarter, net of actual and estimated future returns.

Megamind contributed $1.4 million of revenue to the quarter, driven primarily by home entertainment. The film reached an estimated 5.5 million home entertainment units sold worldwide through the end of the second quarter, net of actual and estimated future returns.

Library, which now includes Shrek Forever After, contributed approximately $27.4 million of revenue to the quarter. All Other items, including non-feature film businesses, contributed $10.0 million of revenue to the quarter, of which Shrek The Musical in London was the single largest contributor.

Costs of revenue for the quarter equaled $114.2 million. Selling, general and administrative expenses totaled $30.8 million, including approximately $5.2 million of stock-based compensation expense.

The Company's income tax expense for the second quarter was $5.9 million. Its combined effective tax rate — the actual tax rate coupled with the effect of the Company's tax sharing agreement with a former stockholder — was approximately 30% for the second quarter.

DreamWorks Animation's third quarter results are expected to be driven primarily by the continued theatrical performance of Madagascar 3: Europe's Most Wanted. Television revenue for Puss In Boots is also expected to contribute to the Company's third quarter results. 

Items related to the earnings press release for the second quarter of 2012 will be discussed in more detail on the Company's earnings conference call later today.

Conference Call Information

DreamWorks Animation will host a conference call and webcast to discuss the results on Tuesday, July 31, 2012, at 4:30 p.m. (ET). Investors can access the call by dialing (800) 230-1059 in the U.S. and (612) 234-9959 internationally and identifying "DreamWorks Animation Earnings" to the operator. The call will also be available via live webcast at www.dreamworksanimation.com

A replay of the conference call will be available shortly after the call ends on Tuesday, July 31, 2012. To access the replay, dial (800) 475-6701 in the U.S. and (320) 365-3844 internationally and enter 251569 as the conference ID number. Both the earnings release and archived webcast will be available on the Company's website at www.dreamworksanimation.com.

About DreamWorks Animation

DreamWorks Animation creates high-quality entertainment, including CG animated feature films, television specials and series and live entertainment properties, meant for audiences around the world. The Company has world-class creative talent, a strong and experienced management team and advanced filmmaking technology and techniques. DreamWorks Animation has been named one of the "100 Best Companies to Work For" by FORTUNE® Magazine for four consecutive years. In 2012, DreamWorks Animation ranks #14 on the list. All of DreamWorks Animation's feature films are now being produced in 3D. The Company has theatrically released a total of 24 animated feature films, including the franchise properties of Shrek, Madagascar, Kung Fu Panda and How to Train Your Dragon. The Company's theatrical releases for the current year are Madagascar 3: Europe's Most Wanted on June 8, 2012 and Rise of the Guardians on November 21, 2012.

dwa-e

Caution Concerning Forward-Looking Statements

This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company's plans, prospects, strategies, proposals and our beliefs and expectations concerning performance of our current and future releases and anticipated talent, directors and storyline for our upcoming films and other projects, constitute forward-looking statements. These statements are based on current expectations, estimates, forecasts and projections about the industry in which we operate and management's beliefs and assumptions. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict.  Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological and/or regulatory factors, and other risks and uncertainties affecting the operation of the business of DreamWorks Animation SKG, Inc. These risks and uncertainties include: audience acceptance of our films, our dependence on the success of a limited number of releases each year, the increasing cost of producing and marketing feature films, piracy of motion pictures, the effect of rapid technological change or alternative forms of entertainment and our need to protect our proprietary technology and enhance or develop new technology. In addition, due to the uncertainties and risks involved in the development and production of animated feature projects, the release dates for the projects described in this document may be delayed. For a further list and description of such risks and uncertainties, see the reports filed by us with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and our most recent quarterly reports on Form 10-Q. DreamWorks Animation is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

 

** FINANCIAL TABLES ATTACHED**

 

DREAMWORKS ANIMATION SKG, INC.

CONSOLIDATED BALANCE SHEETS 

(Unaudited)





June 30,

 2012

December 31,

 2011


(in thousands, except par

value and share amounts)

Assets



Cash and cash equivalents

$      81,176

$            116,093

Trade accounts receivable, net of allowance for doubtful accounts

69,977

72,456

Income taxes receivable

4,471

3,960

Receivable from Paramount, net of allowance for doubtful accounts

203,869

214,647

Film and other inventory costs, net

960,505

882,646

Prepaid expenses

30,941

20,842

Other assets

12,052

13,023

Property, plant and equipment, net of accumulated depreciation and amortization

193,209

172,511

Deferred taxes, net

237,266

248,519

Goodwill

34,216

34,216

Total assets 

$ 1,827,682

$        1,778,913




Liabilities and Stockholders' Equity



Liabilities:



Accounts payable 

$        5,557

$              3,283

Accrued liabilities 

112,996

105,505

Payable to former stockholder 

279,804

294,397

Deferred revenue and other advances 

35,333

19,032

Total liabilities 

433,690

422,217

Commitments and contingencies



Stockholders' equity:



Class A common stock, par value $.01 per share, 350,000,000 shares authorized, 98,841,174 and 98,333,454 shares issued, as of June 30, 2012 and December 31, 2011, respectively

988

983

Class B common stock, par value $.01 per share, 150,000,000 shares authorized, 10,838,731 and 10,838,731 shares issued and outstanding, as of June 30, 2012 and December 31, 2011, respectively

108

108

Additional paid-in capital 

1,042,938

1,023,405

Accumulated other comprehensive loss

(918)

(1,041)

Retained earnings 

1,075,582

1,053,736

Less: Class A Treasury common stock, at cost, 25,369,756 and 25,139,548 shares, as of June 30, 2012 and December 31, 2011, respectively

(724,706)

(720,495)

Total stockholders' equity 

1,393,992

1,356,696

Total liabilities and stockholders' equity 

$ 1,827,682

$      1,778,913

 

 

DREAMWORKS ANIMATION SKG, INC.

CONSOLIDATED STATEMENTS OF INCOME 

(Unaudited)

















 Three Months Ended 

 Six Months Ended 


 June 30,  

 June 30,  


2012

2011

2012

2011


 (in thousands, except per share amounts) 

Revenues 

$ 162,803

$ 218,255

$ 298,887

$ 326,292

Costs of revenues 

114,247

141,311

210,747

213,338

Gross profit 

48,556

76,944

88,140

112,954

Product development 

1,340

255

2,474

423

Selling, general and administrative expenses 

30,816

29,554

58,281

59,683

Operating income 

16,400

47,135

27,385

52,848

Interest income, net 

616

44

1,184

260

Other income, net 

1,326

2,060

3,842

4,060

Decrease in income tax benefit payable to former stockholder

283

175

392

4,764

Income before income taxes 

18,625

49,414

32,803

61,932

Provision for income taxes

5,853

15,341

10,957

19,065

Net income 

$   12,772

$   34,073

$   21,846

$   42,867






Basic net income per share 

$       0.15

$       0.41

$       0.26

$       0.51

Diluted net income per share 

$       0.15

$       0.40

$       0.26

$       0.51

Shares used in computing net income per share





Basic 

84,125

83,384

84,031

83,759

Diluted 

84,893

84,565

84,807

84,854

 

DREAMWORKS ANIMATION SKG, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(Unaudited)






 Six Months Ended 



 June 30, 



2012

2011



 (in thousands) 


Operating activities




Net income 

$  21,846

$   42,867


Adjustments to reconcile net income to net cash provided by (used in) operating activities:




Amortization and write-off of film and other inventory costs

176,990

172,568


Stock-based compensation expense

10,515

15,546


Depreciation and amortization

2,054

1,689


Revenue earned against deferred revenue and other advances

(32,544)

(49,360)


Deferred taxes, net

11,253

26,702


Changes in operating assets and liabilities:




Trade accounts receivable

3,571

15,524


Receivable from Paramount

10,790

12,449


Film and other inventory costs

(233,496)

(233,897)


Prepaid expenses and other assets

(10,749)

(1,374)


Accounts payable and accrued liabilities

4,805

(35,455)


Payable to former stockholder

(14,593)

(32,665)


Income taxes payable/receivable, net

(276)

(8,739)


Deferred revenue and other advances

58,501

71,166


Net cash provided by (used in) operating activities 

8,667

(2,979)






Investing activities




Purchases of non-marketable securities

(150)

-


Purchases of property, plant and equipment 

(39,348)

(21,347)


Net cash used in investing activities 

(39,498)

(21,347)






Financing Activities




Deferred financing costs

-

(338)


Purchase of treasury stock

(4,165)

(25,660)


Net cash used in financing activities 

(4,165)

(25,998)


Effect of exchange rate changes on cash and cash equivalents

79

(331)


Decrease in cash and cash equivalents

(34,917)

(50,655)


Cash and cash equivalents at beginning of period 

116,093

163,819


Cash and cash equivalents at end of period 

$  81,176

$ 113,164






Supplemental disclosure of cash flow information:




Cash paid during the period for income taxes, net of amounts refunded

$       610

$     1,384


Cash paid during the period for interest, net of amounts capitalized

$       395

$        290


SOURCE DreamWorks Animation SKG, Inc.

News Provided by Acquire Media


Close window | Back to top

Copyright 2014 Dreamworks Animation