DreamWorks Animation posted a massive fourth quarter loss of $247.7 million due to the company's recent restructuring plans, which resulted in layoffs, the closure of its Northern California studio and changes in its film release strategy.
Continue Reading Below
The company posted sales of $234.2 million, a gain of 14.7% over the same frame in 2013, that wrapped Dec. 31. The company's adjusted operating loss came in at $37.6 million, while its net loss was $64.1 million.
The adjusted financial results exclude a $210.1 million pre-tax charge associated with the company's restructuring plan announced on Jan. 22, 2015.
No matter how you look at the results, DWA took a major hit during the final three months of 2014, capping off a more than disappointing year.
The quarter included impairment charges of $57.1 million from the performance of "The Penguins of Madagascar" and "Mr. Peabody and Sherman."
Around $54.6 million was related to employee termination costs and other contractual obligations and $155.5 million was primarily related to film write-offs for unreleased projects that include "B.O.O.: Bureau of Otherworldly Operations" and "Monkeys of Mumbai."
Continue Reading Below
For the full year, DWA's 2014 revenues decreased 3.2% to $684.6 million, and an operating loss of $300 million. When adjusted the loss was $90 million.
"Although 2014 was a challenging year for our company, I am confident that our recent announcement to restructure our feature film business will enable us to deliver great films and better box office results, while improving the overall financial performance of our business," said DWA CEO Jeffrey Katzenberg. "And while 2015 will be a transitional year for us, I couldn't be more confident for the future. We have a set of strategic imperatives in place designed to ensure sustainable and profitable growth over the long term."
During the quarter, films generated $131.3 million. Write-offs, however, forced the studio to post a $152.2 million loss.
"The Penguins of Madagascar," which was released Nov. 26, 2014, earned $358 million worldwide.
Twentieth Century Fox, which distributes DWA's films, did not report any revenue to DWA in the quarter for the film since it has not yet recouped its marketing and distribution costs, the studio said.
"How to Train Your Dragon 2," which was nominated in the best animated feature category at the Academy Awards but lost to Disney's "Big Hero 6," contributed $66 million to DWA's coffers during the quarter, on the back of its homevideo sales. The film's sold an estimated 7.5 million units worldwide.
"Mr. Peabody & Sherman" has moved 3.4 million units on homevideo. The film became another title that Fox has yet to recoup its marketing and distribution costs.
"Turbo" generated $5.8 million in the quarter, primarily from home entertainment. It's sold around 6.3 million home entertainment units sold worldwide.
Meanwhile, "The Croods" generated $6.5 million in the quarter from homevideo platforms.
Overall, DWA's library contributed feature film revenue of $46.1 million to the quarter.
DWA's TV operations saw revenue gains of 7.7% to $50.7 million, however, profits declined from $7.3 million to a loss of $2.6 million, due to film costs, revisions in estimated future revenues for TV specials and marketing costs.
Consumer products was a bright spot, with sales up 77.5% to $22.1 million, and gross profits coming in at $6.1 million, driven by merchandise, location-based entertainment and retail development businesses.
New media, fueled by AwesomenessTV, posted $24.9 million in revenue and gross profits of $13.2 million.
During the quarter, DWA sold a 25% stake in AwesomenessTV to Hearst Corp for $81.25 million. The company also paid out $80 million to the digital network, as part of a earn-out consideration.
All other segments saw declines of $5.2 million, primarily because DWA is no longer self-producing any live performance productions.