BENGALURU: DreamWorks Animation SKG, Inc. (DWA) reported revenue decrease of 3.2 per cent to US$ 684.62 million for the year ended 31 December, 2014 (FY-2014, current year) as compared to the revenue of US$ 705.92 million in FY-2013. DWA says that increases in the New Media segment were more than offset by lower year-over-year performance in the Feature Film Segment says the company.
The company reported operating loss for FY-2014 at US$ 300.04 million as compared to a loss of US$ 76.34 million in the previous year. The decrease was largely due to film and other impairments, restructuring-related charges and increased investments in support of brand and new business initiatives, says DWA.
“Although 2014 was a challenging year for our Company, I am confident that our recent announcement to restructure our feature film business will enable us to deliver great films and better box office results, while improving the overall financial performance of our business,” said DWA chief executive officer Jeffrey Katzenberg. “And while 2015 will be a transitional year for us, I couldn’t be more confident for the future. We have a set of strategic imperatives in place designed to ensure sustainable and profitable growth over the long term.”
Segment revenue for FY-2014
Film segment
FY-2014 revenues for the Feature Film Segment decreased to US$ 453.5 million from US$ 500.2 million in FY-2013, as increases from current year theatrical releases were more than offset by lower contributions from prior year theatrical releases and lower library revenues relative to the prior year period. The segment reported a loss of US$ 89.4 million, primarily due to restructuring-related charges totalling US$ 163.0 million, as well as impairment charges totalling US$ 96.7 million, primarily related to the performance of ‘The Penguins of Madagascar’ and ‘Mr. Peabody and Sherman’. As mentioned earlier in the Q4-2014 results report, the film segment also disappointed as far Q4-2014 results are concerned.
‘The Penguins of Madagascar’ contributed feature film revenue of US$ 6.9 million in 2014, primarily earned in markets outside Fox distribution territories. During the year ended 31 December 2014, Fox did not report any revenue to DWA for ‘The Penguins of Madagascar’ as it had not yet recouped their marketing and distribution costs.
‘How to Train Your Dragon 2’ contributed feature film revenue of US$ 142.8 million in 2014, mostly from theatrical and home entertainment.
‘Mr. Peabody and Sherman’ contributed feature film revenue of US$ 4.5 million in 2014, primarily earned in markets outside of Fox distribution territories. During FY-2014 Fox did not report any revenue to DWA for the film as it had not yet recouped their marketing and distribution costs.
‘Turbo’ contributed revenue of US$ 51.8 million in 2014, primarily related to SVOD distribution, as well as revenues earned in the worldwide television and home entertainment markets.
‘The Croods’ contributed film revenue of US$ 75.5 million in 2014, primarily related to SVOD distribution, as well as revenues earned in the worldwide television and home entertainment markets.
Library titles contributed feature film revenue of US$ 161.3 million in FY-2014, slightly lower than the US$ 162.4 million reported for last year.
Television Series and Specials Segment
FY-2014 revenues from the Television Series and Specials Segment declined 2.7 per cent to US$ 103.0 million from US$ 105.9 in the previous year, mostly due to a decline in revenues generated by holiday television specials and Classic Media properties, partially offset by an increase in revenues generated by ‘How to Train Your Dragon’ and other television series. Segment gross profit declined 71 per cent to US$ 6.7 million, primarily due to write-downs of capitalised films costs totalling US$ 13.3 million, as well as higher up front marketing costs related to the new content delivered to various partners throughout the year.
Consumer Products
Revenues from the Consumer Products Segment decreased 3.9 per cent to US$ 64.8 million in FY-2014 from US$ 67.3 million in FT-2013. Impacting the comparison was US$ 13.8 million in the prior-year period associated with the sale of the 1960s live-action ‘Batman’ television series to Fox, as well as the licensing of ‘Kung Fu Panda’ and the DreamWorks brand to Oriental DreamWorks. Excluding this, the Consumer Products segment grew revenues by 21.0 percent and gross profit increased to US$ 23.7 million, largely driven by location-based entertainment and merchandise sales.
New Media Segment
DWA’s New Media segment consists of revenues and expenses attributable to Awesomeness TV (ATV) and related businesses. FY-2014 revenues from the New Media Segment increased from US$ 11.4 million to US$ 49.0 million and segment gross profit margin improved from 20.2 per cent to 36.5 per cent. The timing of the Awesomeness TV acquisition in May 2013 has an impact on the year-over-year revenue comparison. In addition, this segment benefitted from the production and delivery of original programming, as well as sponsorship arrangements.
All Other segment
Revenues from the Company’s All Other Segment declined drastically to US$ 14.3 million in the current year as compared to the US$ 33.5 million in FY-2013, primarily because DWA is no longer self-producing any live performance productions. In the prior year period, the company earned revenues of US$ 11.0 million from the SVOD release of the filmed version of ‘Shrek the Musical’. Segment gross profit decreased to US$ (5.0) million largely due to lower revenues and the write-off of capitalized costs in the amount of US$ 5.4 million.
