Tuesday, February 24, 2015

The Bad News

Now with Add On.

DreamWorks Animation is not in a happy, peaceful place.

The studio had already told the Street to expect bad news including a big writedown. It included a $57.1 million impairment charge tied to Penguins Of Madagascar and Mr. Peabody And Sherman. In addition DreamWorks Animation wrote off $54.6 million for layoffs, and $155.5 million from unreleased projects including B.O.O. and Monkeys Of Mumbai.

All together, DWA had a Q4 net loss of $$263.2 million, down from a $17.2 million profit at the end of 2013, on revenues of $234.2 million, +14.7%.Aanalysts expected revenues of $246.2 million. The net loss at $3.08 a share was lower than predictions for a $3.01 loss.

“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,” CEO Jeffrey Katzenberg says. ...

It has certainly been challenging for Dreamworks in the recent past. However, Jeffrey K. and his studio are following a well-worn path of peaks and troughs that mark the history of the biggest companies in the entertainment business. None of our fine conglomerates has a perfect streak and each has had to endure its own "challenging times".

DreamWorks has addressed their stumbles, girded their loins and now forges ahead with renewed conviction. We look forward to seeing them succeed and grow as their peers did after facing the same tribulations.

Add On>: And the company announces new moves as DWA's stock falls in after-hours trading:

DreamWorks Animation added $10 million to its debt with a new $215 million revolving credit facility. Total debt now comes to $515 million while DWA’s cash balance fell 30% to $34.2 million. But execs said they will see a jolt of cash from a $185 million deal to sell and then lease back DWA’s studio in Glendale. ,,,

Jeffrey K.'s high-wire act, thrilling the general public for years now, looks increasingly wobbly.

Add On: At least some stock analysts are positive about DreamWorks Animation's future.

... “They [DWA] needed to get things back on the right path,” B. Riley analyst Eric Wold told TheWrap. “Major layoffs. Switch out of creative staff. The future is still unknown but much brighter than it was a few months ago. We upgraded the stock from neutral to buy the Monday after the restructuring.” ...

Here's hoping the restructuring is a major success.


Dan Siciliano said...

I hope "Home" will bring DreamWorks Animation back to it's feet.

Steve Hulett said...

Don't we all.

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