The studio posted a narrowing quarterly loss of $44.9 million against a year-earlier loss of $155.2 million.
Lionsgate on Thursday shrunk its fiscal fourth-quarter loss as the Hollywood studio in the streaming space saw its global OTT subscriber base for Starz, Starzplay Arabia and Pantaya grow to 10.6 million, with the domestic OTT paid subscriber base standing at 6.8 million.
Lionsgate reported adjusted earnings of 21 cents per share for the three months ending March 31 against a year-earlier loss of 72 cents, which met a Wall Street estimate for 21 cents in a per-share loss during the latest quarter.
The studio posted a narrowing quarterly loss of $44.9 million against a year-earlier loss of $155.2 million.
Fourth-quarter revenue came to $944 million, compared with a year-earlier $913.7 million, which beat an analyst estimate of $933.5 million in overall revenue.
The studio's media network revenue at $358 million was virtually unchanged from a year-earlier $362 million. Lionsgate's motion picture revenue rose 10 percent to $393 million on strong home entertainment sales for Knives Out. Television production revenue was $258 million, down from $272.8 million last year.
Lionsgate like other Hollywood studios has been impacted by delayed production of movies and TV shows and its theatrical releases after major cinemas chains shut down amid the coronavirus pandemic.
Said Lionsgate CEO Jon Feltheimer in a statement: “We reported a strong quarter to end a solid fiscal year despite the disruption posed by the COVID-19 global pandemic. Our Lionsgate family has risen to the challenge of these unprecedented times with resilience, dedication and collaboration. Thanks to their efforts, Starz is continuing to deliver great entertainment to our audiences in the current at-home environment, and we’re working closely with all of our content partners to ensure that when production resumes and theaters reopen, we will be ready.”
The studio said it recorded $50.5 million in COVID-19-related charges during the fourth quarter. The one-time items include $46 million in direct operating expenses for movie and TV series impairments and development charges “associated with changes in performance expectations or the feasibility of completing the project,” expenses from delaying productions, including cast and crew costs and charges around bad debt reserves.
Lionsgate also incurred a $4.2 million charge for distribution and marketing expenses from early marketing expenditures for film releases and events subsequently canceled or delayed and another $300,000 in restructuring and other costs from transitioning staff to working remotely in their homes amid the pandemic.
Added the studio: “We expect to incur additional incremental costs in future periods. We are in the process of seeking insurance recovery for some of these costs, which cannot be estimated at this time, and therefore have not been recorded in our consolidated financial statements.”
The COVID-19 impact came near the end of Lionsgate's fiscal fourth quarter but included the commercial release of I Still Believe go early to VOD after only two days in theaters and other movie titles like John Wick 4, Chaos Walking and the Saw spinoff Spiral see their theatrical runs delayed domestically and internationally.
“Our partners have also closed several location-based entertainment attractions based on our film and television properties. We may not be able to accurately predict when theaters reopen, production resumes or if and when certain of our content will be released. The full extent of the impact of the COVID-19 global pandemic on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict,” the studio added in its commentary that accompanied its latest financial results.
Lionsgate is moving forward with development on a long-anticipated Hunger Games prequel movie as trilogy writer Suzanne Collins this week released her latest novel, The Ballad of Songbirds and Snakes.
