While I'm posting - Here's MGM Earnings

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The Chip Board Archive 06

Oct 22, 2002 08:30 ET

MGM Announces Better Than Expected Third Quarter Earnings

- All Four Core Businesses Contributed to Excellent Results -

SANTA MONICA, Calif., Oct. 22 /PRNewswire-FirstCall/ -- Metro-Goldwyn-Mayer Inc. (NYSE: MGM) today reported significantly improved earnings for the third quarter ended September 30th. EBITDA tripled to $28.7 million from $9.2 million in last year's third quarter. Net income surged to $11.7 million in this year's third quarter compared to a net loss of $16.0 million in the prior year quarter. Earnings per share increased to $0.05 from a loss of $0.07 over the same period.

(Photo: http://www.newscom.com/cgi-bin/prnh/20011119/MGMLOGO )

Commenting on these results, Alex Yemenidjian, Chairman and CEO, said: "MGM's third quarter results come at an important inflection point for our Company. As we approach 2003, our investments in film and television production over the past three years will generate significant free cash flow. These improved fundamentals, combined with the strongest balance sheet that MGM has ever had, allow us to look to the balance of this year and to 2003 with great confidence."

Chris McGurk, Vice Chairman and COO added: "Better feature film performance, expanded television programming, the ongoing strong contribution of our film and television library and the rapid expansion at MGM Networks all contributed to our successful third quarter and are largely responsible for our greatly improved near-term outlook."

FINANCIAL HIGHLIGHTS

-- Third quarter revenues were $381.2 million compared to $393.3 million

in last year's third quarter.

-- Consolidated EBITDA increased to $28.7 million from $9.2 million in

the prior year period.

-- Net income improved to $11.7 million from a net loss of $16.0 million

in last year's third quarter.

-- Earnings per share were $0.05 compared to a loss of $0.07 over the

same period.

OPERATING HIGHLIGHTS

-- "Barbershop" opened in first place at the U.S. box office on

September 13th, positioning it to be one of the most profitable MGM

movies.

-- MGM Home Entertainment Group's library market share rose to

17 percent, almost a 50 percent increase from the start of the year.

-- "She Spies," a new syndicated television program co-produced with NBC,

premiered in September in over 98 percent of U.S. households.

-- The Company launched two new international channels in Africa. One is

a 100 percent-owned channel for English-speaking subscribers. The

second extends MGM Latin America's Portuguese channel feed from

Brazil.

-- On October 15th, MGM announced plans to launch an MGM-branded channel

in Germany and Austria in the second quarter of 2003.

Metro-Goldwyn-Mayer Inc. (NYSE: MGM) , through its Metro-Goldwyn-Mayer Studios Inc. subsidiary, is actively engaged in the worldwide production and distribution of entertainment product, including motion pictures, television programming, home video, interactive media, music, and licensed merchandise. The Company owns the largest modern film library in the world, consisting of approximately 4,000 titles. Its operating units include MGM Pictures, United Artists, MGM Television Entertainment, MGM Networks, MGM Distribution Co., MGM Worldwide Television Distribution, MGM Home Entertainment, MGM On Stage, MGM Consumer Products, MGM Music, MGM Interactive, and MGM Online.

In addition, MGM owns a 20 percent equity interest in four of Rainbow Media's successful national cable networks -- American Movie Classics (AMC), Bravo, The Independent Film Channel (IFC) and WE: Women's Entertainment -- and internationally has ownership interests in television channels reaching more than 90 countries around the globe. For more information on MGM, visit MGM Online at http://www.mgm.com/ .

This news release contains forward-looking statements that are based upon the Company's estimates and expectations concerning future events and are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. These risks and uncertainties include, among other things, future competitive and market conditions, whether the Company's products achieve customer acceptance, future business decisions, and other factors, including those described in the Company's filings with the Securities and Exchange Commission, all of which are difficult or impossible to predict accurately and many of which are beyond the control of MGM. In light of the significant uncertainties inherent in the forward-looking information herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company's objectives or plans will be realized. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities of the Company.

For further information, please contact Joseph Fitzgerald of Metro-Goldwyn-Mayer Inc., +1-310-449-3660.

Metro-Goldwyn-Mayer Inc.

Condensed Consolidated Results of Operations

Quarter and Nine Months Ended September 30, 2002 and 2001

Quarter Ended Nine Months Ended
In thousands, except share September 30, September 30,

and per share data 2002 2001 2002 2001

(unaudited)
Revenues:

Feature films $305,716 $350,672 $883,727 $881,813

Television

programming 67,331 34,997 122,507 108,187

Other 8,109 7,641 26,973 22,065

Total revenues $381,156 $393,310 $1,033,207 $1,012,065
EBITDA:

Feature films $29,168 $29,178 $(89,225) $18,746

Television

programming 16,410 2,996 8,079 13,962

Other 3,875 4,321 13,326 9,562

General and

administrative

expenses (20,793) (27,277) (59,694) (70,318)

EBITDA 28,660 9,218 (127,514) (28,048)
Depreciation and

non-film amortization (4,928) (8,249) (14,405) (24,250)
Operating income (loss) 23,732 969 (141,919) (52,298)
Equity in net earnings

(losses) of investees 7,140 (2,169) 6,325 (3,428)
Interest expense, net

of amounts capitalized (18,107) (14,287) (60,732) (37,215)
Interest and other

income, net 2,339 1,769 3,964 8,906
Income (loss) before

provision for

income taxes 15,104 (13,718) (192,362) (84,035)
Income tax provision (3,409) (2,257) (8,544) (10,766)
Net income (loss)

before cumulative

effect of accounting

change 11,695 (15,975) (200,906) (94,801)
Cumulative effect of

accounting change -- -- -- (382,318)

Net income (loss) $11,695 $(15,975) $(200,906) $(477,119)

Income (loss) per share:

Basic and diluted

Net income (loss)

before cumulative

effect of

accounting change $0.05 $(0.07) $(0.81) $(0.41)

Cumulative effect

of accounting

change -- -- -- (1.67)

Net income (loss) $0.05 $(0.07) $(0.81) $(2.08)

Weighted average

number of common

shares outstanding:

Basic 250,708,242 239,429,116 248,099,306 229,554,230

Diluted 250,714,711 239,429,116 248,099,306 229,554,230

Metro-Goldwyn-Mayer Inc.

Condensed Consolidated Balance Sheets

September 30, 2002 and December 31, 2001

(In thousands, except share data)

ASSETS September 30, December 31,

2002 2001

(unaudited)

Cash and cash equivalents $346,837 $2,698
Accounts and contracts receivable

(net of allowance for doubtful

accounts of $38,045 and $26,173,

respectively) 424,504 458,010
Film and television costs, net 1,990,545 2,035,277
Investments in and advances

to affiliates 863,389 845,042
Property and equipment, net 36,418 38,837
Goodwill 516,706 516,706
Other assets 25,765 26,594

$4,204,164 $3,923,164

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Bank and other debt $1,243,190 $836,186

Accounts payable and accrued liabilities 140,589 198,520

Accrued participants' share 227,877 243,836

Income taxes payable 29,696 31,865

Advances and deferred revenues 73,331 82,156

Other liabilities 30,930 41,119

Total liabilities 1,745,613 1,433,682

Commitments and contingencies

Stockholders' equity:

Preferred stock, $.01 par value,

25,000,000 shares authorized,

none issued -- --

Common stock, $.01 par value,

500,000,000 shares authorized,

251,960,505 and 239,629,500

shares issued 2,520 2,396
Additional paid-in capital 3,914,243 3,717,767
Deficit (1,404,471) (1,203,565)
Accumulated other comprehensive loss (20,448) (27,116)
Treasury stock, at cost (33,293) --

Total stockholders' equity 2,458,551 2,489,482

$4,204,164 $3,923,164

Metro-Goldwyn-Mayer Inc. Supplemental Financial Information: Consolidated and Unconsolidated Companies

Quarter and Nine Months Ended September 30, 2002 and 2001

Quarter Ended Nine Months Ended

September 30, September 30,

In thousands (unaudited) 2002 2001 2002 2001
Revenues:

Consolidated companies

Feature films $305,716 $350,672 $883,727 $881,813

Television programming 67,331 34,997 122,507 108,187

Other 8,109 7,641 26,973 22,065

Total consolidated