BENGALURU: DreamWorks Animation SKG, Inc. (DWA) reported 13.1 per cent higher revenue for the quarter ended 31 March, 2015 (Q1-2015, current quarter) of US$ 166.53 million, as compared to the US$ 147.21 million in the same period in 2014. DWA attributes revenue growth to due to increases across each of the company’s operating segments.
The company reported an adjusted operating loss of US$ 3.43 million, and adjusted net loss attributable to DWA of US$ 25.1 million. Including the impact of the restructuring plan, DWA reported an operating loss of US$ 35.3 million and reported net loss attributable to DWA of US$ 54.8 million, or US$ 0.64 per share for Q1-2015.
On 22 January, 2015, DWA had announced its restructuring initiatives that were intended to refocus the company’s core feature animation business. As a part of the restructuring, US$ 6.1 million was due to employee termination and other employee-related costs, US$ 9.3 million was related to accelerated depreciation and amortization charges associated with the closure of DWA’s Redwood City facility, and US$ 16.5 million was primarily related to excess staffing and other costs associated with the previously announced changes in the feature film slate says the company.
“While 2015 is a transitional year for us, the worldwide box office performance of ‘Home’ serves as early evidence that the changes we’re making in the core feature animation business are working,” said DWA CEO Jeffrey Katzenberg. “In addition, last Friday, our television series ‘All Hail King Julien’ won the Emmy Award for Outstanding Children’s Animated Program.” Katzenberg added, “This recognition highlights the extraordinary talent and high quality of their work being done at the studio today and we couldn’t be prouder.”
‘Home’ released theatrically on 27 March, 2015 and has reached US$ 154 million at the global box office. It contributed feature film revenue of US $2.9 million in Q1-2015, primarily from ancillary revenues.
Segment Revenue
Feature Film Segment
Revenues for Q1-2015 from the Feature Film Segment increased to US$ 128.0 million, up from US$ 110.1 million in the prior year period. Segment gross profit also increased to US$ 41.0 million compared to a loss of US$ 25.4 million in the same period last year. In the first quarter of 2014, DWA recorded an impairment charge of US$ 57.1 million for the theatrical release of ‘Mr. Peabody and Sherman’ reveals the company.
Distribution and pay television windows brought in revenues of US$ 41.4 million for ‘How to Train Your Dragon 2’ and US$ 31.5 million for ‘Mr. Peabody and Sherman’ while the International Home entertainment window brought in revenue of US$ 12.3 million in Q1-2015 for ‘Turbo’.
Library revenues driven by ‘Rise of the Guardians’ and ‘How to Train Your Dragon’ contributed to Feature Film revenue by US$ 37.9 million from worldwide television. Recoveries of US$ 6.3 million also added to the segment’s revenues.
The ‘Penguins of Madagascar’ contributed Feature Film revenue of US$ 2 million, primarily from distribution outside of Fox territories. DWA anticipates that Fox will recoup its marketing and distribution costs and begin reporting revenue to DWA in Q2-2015 for this property.
Television Serials and Specials Segment
Revenues for Q1-2015 from the Television Series and Specials Segment were relatively in line with the prior year period at US$ 18 million and were comprised of revenues generated from the delivery of episodic series.
Segment gross profit declined to US$ 3.5 million in the current period from US$ 5.8 million in the same period of the prior year, primarily due to higher up-front marketing costs attributable to the initial launch of new series.
Consumer Products Segment
Revenues from the Consumer Products Segment increased to US$ 15.1 million in the first quarter, compared to US$ 12.1 million in the same period last year. The increase was primarily driven by revenues generated in location-based entertainment initiatives as well as from increased merchandise sales.
Segment gross profit increased to US$ 6.5 million from US$ 6.0 million in the prior year period as higher revenues were partially offset by the timing of creative development expenses and investments in new initiatives.
New Media Segment
Revenues from the New Media Segment were US$ 4.6 million compared to US$ 4.1 million during Q1-2014. This increase was primarily attributable to revenues generated by channels and Big Frame, which was acquired in April 2014 reveals DWA. Segment gross profit increased to US$ 2.1 million from a loss of US$ 0.1 million in the prior-year period primarily attributable to the incremental contribution from channels, Big Frame and the successful release of ‘Expelled’.