TORONTO – “We are very pleased with the operating accomplishments for the first three months of 2005," said Michael MacMillan, chairman and CEO of Alliance Atlantis upon the company’s release of first quarter results this morning.
"Broadcasting delivered strong results and we are particularly pleased with the results from Entertainment, where the CSI franchise continues to deliver as expected."
For the three months ended March 31, 2005, consolidated revenue increased to $264.8 million, a 25% increase over the same period last year. Broadcasting contributed $62.5 million – up 12%; Motion Picture Distribution generated $100.3 million, representing an increase of 5%; and Entertainment’s revenue contribution (mostly CSI) was $101.7 million – up a strong 70% compared to the prior year’s quarter.
The CSI franchise accounted for 88% of Entertainment’s first quarter revenue (2004 – 63%) and all of first quarter gross profit (2004 – 82%).
Consolidated EBITDA for the three months ended March 31, 2005 was $38.7 million compared to $33.1 million in the prior year’s period. Broadcasting recorded $16.1 million compared to $17.5 million in the prior year’s quarter; Motion Picture Distribution recorded a loss of $1.7 million compared to a positive contribution of $16.3 million in the prior year’s quarter; and on the strength of the CSI franchise, Entertainment’s EBITDA contribution was $31.2 million compared to $6.9 million in the prior year’s quarter.
Operating earnings (which exclude income taxes, discontinued operations – net of tax, investment gains and losses and foreign exchange gains and losses) were $31.2 million for the three months ended March 31, 2005 – compared to $4.2 million in the prior year’s period. Net operating earnings were $24.2 million in the quarter, representing the previously described operating earnings (net of $7 million of taxes), compared to net operating earnings of $600,000 recorded in the same period last year (net of $3.6 million of taxes). On a diluted per share basis, net operating earnings were $0.55 compared to $0.01 in the prior year’s period.
Net earnings in Q1, were $23.2 million – compared to Net losses of $2.0 million in the same period last year. Diluted earnings per share were $0.52 based on a weighted average 44.2 million shares outstanding compared to diluted loss per share of $0.05 based on a weighted average 42.9 million shares outstanding in the prior year’s period.
"In each of our businesses we continue to maintain our strategic direction, execute innovative campaigns and capture audiences in record numbers," said MacMillan. "Our core Broadcast business continues its record of sustained growth. As well, the CSI franchise is achieving outstanding results as we expected. Results from Motion Picture Distribution reflect an underperforming first quarter release slate and the fact that certain print and advertising expenses were required to be booked in the first quarter with corresponding revenue to be recorded in the second quarter and beyond. Motion Picture Distribution management remains confident in their outlook and has reconfirmed their 2005 financial guidance."
For the quarter ended March 31, 2005, both advertising and subscriber revenues were up over the prior year’s period among the company’s specialty channels (which includes full ownership or majority stakes in Showcase and its digital spin-offs Action and Diva, History Television, Life, HGTV, Food Network Canada, National Geographic Channel, BBC Canada, BBC Kids, Discovery Health, Fine Living, Independent Film Channel Canada, plus minority ownership positions in Historia, Series+, One: Body Mind & Spirit, and Scream).
In the first quarter of 2005, subscriber revenues increased by 10% over the prior year’s period and total advertising revenue was up 15%. Advertising revenue for our English channels (excluding contra and web sales) was up 21%. EBITDA for the first quarter was modestly impacted due to the timing of advertising revenues within the year compared to the amortization of program rights. For the full year, Broadcasting expects to meet its EBITDA guidance that was released on March 31, 2005.
“Our channels led the television industry in audience growth for the first three months of 2005, with a combined audience growth of 17% among adults 25-54 – almost three times faster than the specialty industry average of 6%.[2] During winter 2005, Showcase Action had the largest Adult 25-54 audiences of all Canadian New Specialty networks,” says today’s release.
“The strong audience numbers in the first quarter were also driven in part by our participation in the industry-wide initiative, 31 Days of Great TV, which ran during the month of January. Our digital channels attracted record audiences during this period, and during the 31 Days Of Great TV, Showcase Action had the third highest audience of all Canadian Specialty Networks in digital homes.”
“The Canadian broadcast premiere of The Real Da Vinci Code on History Television attracted 628,000 viewers (2+), making it the highest-rated program to air in the network’s history.[5] In addition, the phenomenal success of The Million Pound Property Experiment Marathon, which aired on HGTV in March, set new records for HGTV including the highest-rated single day (6a-6a) of programming in the network’s history,” added the release.
