Core biz strong at AAC
Net earnings down as sales slump
But the Canuck film and television company's net earnings were lower, as the success of its hit program "CSI: Crime Scenes Investigation" was offset by lower sales and C$3.6 million ($2.32 million) in charges and unusual items.
These included no earnings for AAC's formerly profitable entertainment finance joint venture in the quarter ended June 30 after the federal government shut its tax-shelter program for film producers.
It also reported one-time items, including $376,000 for laying off 37 staff and $1.9 million paid to Robert Lantos' Serendipity Point Films for not investing in an unnamed project. This cut net earnings to $6.1 million, down from $8.9 million in the first quarter last year.
But operating earnings -- which exclude investment gains, foreign-exchange gains, unusual items and income taxes -- were $2.7 million, up from an operating loss of $502,000 a year earlier.
Alliance had no investment gains to report in the quarter, against a one-time investment gain of $4 million last year due to a share issue by Headline Media, one-third owned by Alliance Atlantis.
"The actual machinery of this company, the day-to-day operations, have generated far superior results than from the same quarter last year," Alliance Atlantis CEO Michael MacMillan said.
"The driving factors there are that broadcast revenue is way up, the most important part is that ad dollars went up 46%, and the motion-picture distribution group was also up thanks to a great slate of titles. Overall, revenue was down a little bit because we have consciously cut back our primetime drama production."
Revenue for the first quarter was $107 million, down from $116 million in the same period the previous year. This is due to management's plan to cut production of higher-cost, lower-margin TV fare.
Revenue for the motion picture distribution group was up 8% to $45.7 million, thanks in part to strong video/DVD releases, including "The Others," "I Am Sam" and "Serendipity" in Canada and "Amelie" in the U.K.
The company expects theatrical revenue to be stronger after the first quarter due to "Austin Powers in Goldmember" and "Spy Kids 2," which have done boffo box office in Canada. The upcoming slate includes "The Lord of the Rings: The Two Towers," "Gangs of New York" and "Chicago," all due for release in December.
