DreamWorks Animation reported for its first quarter 2014 results total revenue of $147.2 million, a net loss of $42.9 million, or $0.51 per share.
The results included an impairment charge of $57 million related to the performance of Mr. Peabody & Sherman in the worldwide theatrical market.
“The box office shortfall of Mr. Peabody & Sherman is evidence of the current challenges we face within our feature film segment, and restoring the strength in our core business is my No. 1 priority today,” said Jeffrey Katzenberg, CEO of DreamWorks Animation. “Our next film is How to Train Your Dragon 2 on June 13, 2014, and I am confident that its performance will put us back on-track to once again reach the levels of box office success that we’ve achieved historically.”
The feature film segment contributed revenue of $110.1 million and a gross loss of $25.4 million to the first quarter.
Mr. Peabody & Sherman, which was released theatrically on March 7, has grossed $261 million at the worldwide box office to date. It contributed feature film revenue of $3 million to the first quarter and remains in an un-recouped position with the company’s main distributor.
Turbo contributed feature film revenue of $22.3 million to the first quarter, primarily from domestic pay television. The film reached an estimated 4.8 million home entertainment units sold worldwide through the end of the first quarter, net of actual and estimated future returns.
The Croods contributed feature film revenue of $41.7 million to the first quarter, primarily from domestic pay television and home entertainment. The film reached an estimated 7.1 million home entertainment units sold worldwide through the end of the first quarter, net of actual and estimated future returns.
Rise of the Guardians and Madagascar 3: Europe’s Most Wanted contributed feature film revenue of $3.4 million and $1.8 million to the first quarter, respectively, primarily from home entertainment. Rise of the Guardians reached an estimated 5.5 million and Madagascar 3: Europe’s Most Wanted reached an estimated 9.1 million home entertainment units sold worldwide through the end of the first quarter, net of actual and estimated future returns.
Library titles contributed feature film revenue of $37.9 million to the first quarter.
The Television segment contributed revenue of $17.9 million and gross profit of $5.8 million to the first quarter, primarily from Classic Media content and DreamWorks Dragons: Riders of Berk on Cartoon Network.
The Consumer Products segment contributed revenue of $12.1 million and gross profit of $6.0 million to the first quarter.
The segment consisting of all other items contributed revenue of $7.1 million and gross profit of approximately $200 thousand to the first quarter. As a part of the segment, AwesomenessTV contributed revenue of $4.1 million and a gross loss of $80 thousand to the first quarter.
Costs of revenue for the first quarter equaled $160.7 million. Selling, general and administrative expenses totaled $49.7 million, including $5.1 million of stock-based compensation expense.
The Company’s income tax benefit for the first quarter was $22.5 million. The Company’s combined effective tax rate, its actual tax rate coupled with the effect of a tax sharing agreement with a former stockholder, was approximately 35.5% for the first quarter.
Significant second quarter 2014 events include the theatrical release of How to Train Your Dragon 2 and the release of The Croods into international pay television markets.
Items related to the earnings press release for the first quarter of 2014 will be discussed in more detail on the Company’s earnings conference call later today.
