DreamWorks Animation Delivers Solid Second Quarter 2015 Results With Revenues Increasing 40% To $171 Million And Total Segment Gross Profit Improving 74% To $61 Million Versus Last Year

- The profitable performance of Home helps drive the revenues in DWA's Feature Film segment 26% higher to $88 million

(PRNewswire) —  DreamWorks Animation SKG, Inc. (Nasdaq: DWA) today reported revenues for the quarter ended June 30, 2015 of $170.8 million, representing an increase of 39.7% from the same period in 2014. In addition, DWA reported an adjusted(b) operating loss of ($1.0) million and adjusted(b) net loss attributable to DWA of ($11.6) million or an adjusted(b) loss of ($0.13) per share. Adjusted financial results exclude a $20.9 million pre-tax charge associated with Company's Restructuring Plan announced on January 22, 2015.

Including the impact of the Restructuring Plan, DWA reported an operating loss of ($21.8) million and reported net loss attributable to DWA of ($38.6) million, or ($0.45) per share for the quarter ended June 30, 2015. Of the restructuring-related charges totaling $20.9 million or a loss of ($0.25) per share, $2.4 million was due to employee termination and other employee-related costs, $10.9 million was related to accelerated depreciation and amortization charges associated with the closure of our Redwood City facility, and $7.6 million was primarily related to excess staffing and other costs associated with previously announced changes in the feature film slate. 

"Our second quarter financial results were solid, highlighted by the theatrical success of Home and the rapid expansion of our Television and New Media businesses," said Jeffrey Katzenberg, Chief Executive Officer of DreamWorks Animation.  "The appetite for premium content across platforms continues to grow both domestically and internationally, and it's clear DreamWorks Animation is well-positioned to capitalize on the growing demand."

Home, which was released theatrically on March 27, 2015 has reached $177 million at the domestic box office and $207 million at the international box office to date. 

Second Quarter Review:

DWA's second quarter revenues of $170.8 million increased 39.7% versus the prior-year period primarily driven by the performance of the Feature Film, Television Series and Specials and New Media segments.

Revenues for the quarter ended June 30, 2015 from the Feature Film Segment increased to $87.8 million, up from $69.7 million in the prior-year period.  Segment gross profit also increased to $31.7 million compared to $23.9 million in the same period last year.

Home contributed feature film revenue of $23.9 million in the quarter, primarily earned in the worldwide theatrical market.  In addition, the film was released in the digital market on June 26, 2015 and reached an estimated 0.1 million home entertainment transactions sold worldwide, as of the end of the quarter.  Subsequent to the end of the quarter, on July 28, 2015 the film was released on physical DVD and Blu-ray.

The Penguins of Madagascar contributed feature film revenue of $8.3 million in the current quarter, primarily from the worldwide home entertainment market.  Through the end of the second quarter, the film reached an estimated 3.5 million home entertainment units sold worldwide, net of actual and estimated future returns.

How to Train Your Dragon 2 contributed feature film revenue of $17.9 million in the quarter, primarily from the international pay television market.  Through the end of the second quarter, the film reached an estimated 8.6 million home entertainment units sold worldwide, net of actual and estimated future returns.

Mr. Peabody and Sherman contributed feature film revenue of $8.4 million in the quarter, primarily from the international pay television market. The film reached an estimated 4.0 million home entertainment units sold worldwide at the end of the second quarter, net of actual and estimated future returns.

Turbo contributed feature film revenue of $1.0 million in the current quarter.  The film reached an estimated 7.2 million home entertainment units sold worldwide at the end of the second quarter, net of actual and estimated future returns. 

Library titles contributed feature film revenue of $28.3 million to the quarter. Library revenues in the current quarter were driven by worldwide television and home entertainment revenues for a number of titles including The Croods, Rise of the Guardians, Madagascar 3, How to Train Your Dragon, Madagascar: Escape 2 Africa and Madagascar.

Revenues for the quarter ended June 30, 2015 from the Television Series and Specials Segment increased to $54.5 million, compared to $20.0 million during the prior-year period.  The increase in revenues was attributable to a significantly higher number of episodes delivered under our episodic content licensing arrangements.  Segment gross profit increased to $19.2 million in the current quarter, from $1.2 million in the same period of the prior year. The increase was primarily driven by favorable amortization rates associated with our episodic series, partially offset by higher up-front marketing costs associated with the release of our new television series.  In addition, for the three months ended June 30, 2014 segment gross profit was negatively impacted by higher than expected returns of seasonal and newly-released home entertainment product, as well as increased selling costs, related to our Classic Media properties.

Revenues from the Consumer Products Segment decreased to $12.7 million in the second quarter, compared to $18.5 million in the same period last year.  The prior year period benefitted from merchandise and licensing revenue associated with How to Train Your Dragon 2, which was released theatrically in June 2014.  Segment revenues in the current quarter were primarily generated by licensing arrangements related to a variety of our intellectual property rights associated with the characters from our feature films.  Segment gross profit decreased to $1.8 million from $7.3 million in the prior year period, largely due to higher costs incurred across a variety of segment activities.   

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