Oct. 27, 2009 (PR Newswire) --
GLENDALE, Calif., Oct. 27 /PRNewswire-FirstCall/ -- DreamWorks Animation SKG, Inc. (Nasdaq: DWA) today announced financial results for its third quarter ended September 30, 2009. In the quarter, the Company reported total revenue of $135.4 million and net income of $19.6 million, or $0.23 per share on a fully diluted basis. This compares to revenue of $151.5 million and net income of $37.4 million, or $0.41 per share on a fully diluted basis, for the same period in 2008. For the nine months ended September 30, 2009, the Company reported total revenue of $531.0 million and net income of $107.5 million, or $1.23 per share on a fully diluted basis. This compares to total revenue of $450.2 million and net income of $90.9 million, or $0.99 per share on a fully diluted basis, for the nine months ended September 30, 2008.
"Monsters vs. Aliens is off to a strong start in its initial home video release and we continue to see very good performance in home entertainment from our two 2008 titles and our catalogue," said Jeffrey Katzenberg, CEO of DreamWorks Animation. "We had a solid third quarter, making progress toward DreamWorks Animation's goals of growth and diversification. We look forward to building on our success in the fourth quarter and next year."
Monsters vs. Aliens, the Company's 2009 release, contributed $33.4 million of revenue to the quarter, driven by its continued performance at the worldwide box office as well as its initial release into the domestic home entertainment market on September 29, 2009. The film has now reached approximately $380 million in worldwide box office and an estimated 4.6 million home entertainment units sold, net of actual and estimated future returns.
The Company's fall 2008 release, Madagascar: Escape 2 Africa, contributed $35.4 million of revenue to the quarter, primarily driven by international home entertainment and domestic pay television. Through the end of the third quarter, it reached an estimated 11.3 million home entertainment units sold worldwide, net of actual and estimated future returns.
Kung Fu Panda, the Company's 2008 summer release, contributed approximately $21.9 million of revenue to the quarter, primarily driven by international pay television. Through the end of the third quarter, it reached an estimated 16.0 million home entertainment units sold worldwide, net of actual and estimated future returns.
The Company's 2007 releases, Shrek the Third and Bee Movie, delivered $8.0 million and $3.4 million of revenue to the quarter, respectively, primarily driven by television and home entertainment. Flushed Away, the Company's fall 2006 release, delivered $7.3 million of revenue to the quarter, primarily driven by international free television.
Library and other titles contributed $26.0 million of revenue to the quarter, including $10.0 million of revenue from Shrek The Musical. The Company recently announced that Shrek The Musical will play its final performance on Broadway on January 3, 2010. The earlier-than-anticipated closing resulted in approximately $0.03 per share of accelerated amortization expense for the production in the third quarter. In total, Shrek The Musical resulted in a $0.05 per share reduction in earnings for the third quarter.
"We plan to monetize Shrek The Musical in a number of ways going forward," said Lew Coleman, Chief Financial Officer of DreamWorks Animation. "We are confident today that these will be profitable activities for DreamWorks Animation and look forward to launching the touring company in Chicago next summer."
Costs of revenue for the quarter equaled $89.1 million. Selling, general and administrative expenses and product development totaled $24.8 million (including approximately $7.4 million of stock compensation expense) as compared to $29.9 million (including approximately $10.0 million of stock compensation expense) for the comparable period of 2008.
Results for the quarter include a tax benefit of approximately $2.5 million related to the Company's tax sharing agreement with a former stockholder, which resulted in a lower effective tax rate. This benefit was partially offset by a $2.1 million increase in cost for the income tax benefit payable to the former stockholder (as shown on the consolidated statement of income before the line item, "income before income taxes"). The net benefit of $0.4 million, when combined with our research and development tax credit related to the prior year of approximately $1.8 million, resulted in an overall net increase to net income of $2.2 million, or an estimated $0.03 per share on a fully diluted basis.
Looking ahead to the remainder of the year, the Company's fourth quarter results are expected to be driven primarily by its two new holiday television specials: Monsters vs. Aliens: Mutant Pumpkins from Outer Space and Merry Madagascar, both of which will air in primetime on NBC and the second of which will also be released into the home entertainment market in the fourth quarter. Monsters vs.
