DreamWorks Animation Reports First Quarter 2013 Financial Results

      DreamWorks Animation Reports First Quarter 2013 Financial Results

PR Newswire

GLENDALE, Calif., April 30, 2013

GLENDALE, Calif., April 30, 2013 /PRNewswire/ -- DreamWorks Animation SKG,
Inc. (Nasdaq: DWA) today announced financial results for its first quarter
ended March 31, 2013. For the quarter, the Company reported total revenue of
$134.6 million and net income of $5.6 million, or $0.07 per share on a fully
diluted basis. 

"This year is off to anoutstandingstart for DreamWorks
Animation.TheCroodshas reachedablockbuster level of nearly $480
millionat theworldwide box office and is well on its way to becoming
thenumber onemovie released during the first four months of 2013,"said
Jeffrey Katzenberg, Chief Executive Officer of DreamWorks Animation."I'd like
to congratulate and thank our new distribution partners at Twentieth Century
Fox for helping to propelTheCroodsto global success and we now look forward
to launching our summer tentpole,Turbo, in theaterson July 17th."

"The strength of our worldwidebox office results from
TheCroodsandover-performance in home video frombothof our 2012
titlesdemonstrate success in DreamWorks Animation's core business so far this
year," added Ann Daly, Chief Operating Officer of DreamWorks Animation. "As
importantly, we made great strides to advance a number of key growth
initiatives in the areas of franchise-building, consumer products, television
and location-based entertainment."

The Croods, released theatrically on March 22, 2013, has reached $163.5
million at the domestic box office and $315.5 million at the international box
office for a worldwide gross of $479.0 million to date. The Croods contributed
$4.0 million of revenue to the quarter.

Rise of the Guardians contributed $9.6 million of revenue to the quarter,
primarily from home entertainment. The film reached an estimated 3.2 million
home entertainment units sold worldwide through the end of the first quarter,
net of actual and estimated future returns.

Madagascar 3: Europe's Most Wanted contributed $22.8 million of revenue to the
quarter, primarily from home entertainment. The film reached an estimated 7.2
million home entertainment units sold worldwide through the end of the first
quarter, net of actual and estimated future returns.

Puss In Boots contributed $7.5 million of revenue to the quarter, primarily
from home entertainment. The film reached an estimated 6.8 million home
entertainment units sold worldwide through the end of the first quarter, net
of actual and estimated future returns.

Library contributed $41.4 million of revenue to the quarter. Other items,
including television series and live theatrical properties, contributed $20.9
million of revenue to the quarter. Classic Media contributed $27.9 million of
revenue to the quarter.

Costs of revenue for the quarter equaled $85.5 million. Selling, general and
administrative expenses totaled $42.8 million, including $3.9 million of
stock-based compensation expense.

The Company's income tax expense for the first quarter was $418 thousand. The
Company's combined effective tax rate – its actual tax rate coupled with the
effect of its tax sharing agreement with a former stockholder – was
approximately 15% for the first quarter. The Company currently expects that
its full-year 2013 combined effective tax rate will be in the mid-to-high 20%
range.

The Company also provided an update to its share repurchase program. Year to
date, the Company has repurchased 1.3 million shares for $25 million. The
Company has $100 million remaining under its current authorization.

The Company's second quarter results are expected to be driven by the
performance of The Croods at the worldwide box office. Television revenue from
Madagascar 3: Europe's Most Wanted is also expected to contribute revenue to
the Company's second quarter results.

Items related to the earnings press release for the first quarter of 2013 will
be discussed in more detail on the Company's earnings conference call later
today.

Conference Call Information
DreamWorks Animation will host a conference call and webcast to discuss the
results onTuesday, April 30, 2013, at4:30 p.m. (ET). Investors can access
the call by dialing (800) 230-1059 in the U.S. and (612) 234-9959
internationally and identifying "DreamWorks Animation Earnings" to the
operator. The call will also be available via live webcast
atwww.dreamworksanimation.com.

A replay of the conference call will be available shortly after the call ends
onTuesday, April 30, 2013. To access the replay, dial (800) 475-6701 in the
U.S. and (320) 365-3844 internationally and enter 287438 as the conference ID
number. Both the earnings release and archived webcast will be available on
the Company's website at www.dreamworksanimation.com.

About DreamWorks Animation
DreamWorks Animation creates high-quality entertainment, including CG animated
feature films, television specials and series and live entertainment
properties, meant for audiences around the world. The Company has world-class
creative talent, a strong and experienced management team and advanced
filmmaking technology and techniques. DreamWorks Animation has been named one
of the "100 Best Companies to Work For" by FORTUNE® Magazine for five
consecutive years. In 2013, DreamWorks Animation ranks #12 on the list. All
of DreamWorks Animation's feature films are produced in 3D. The Company has
theatrically released a total of 26 animated feature films, including the
franchise properties of Shrek, Madagascar, Kung Fu Panda, How to Train Your
Dragon and Puss In Boots.

dwa-e

Caution Concerning Forward-Looking Statements
This document includes certain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. The Company's plans,
prospects, strategies, proposals and our beliefs and expectations concerning
performance of our current and future releases and anticipated talent,
directors and storyline for our upcoming films and other projects, constitute
forward-looking statements. These statements are based on current
expectations, estimates, forecasts and projections about the industry in which
we operate and management's beliefs and assumptions. These statements are not
guarantees of future performance and involve risks, uncertainties and
assumptions which are difficult to predict. Actual results may vary
materially from those expressed or implied by the statements herein due to
changes in economic, business, competitive, technological and/or regulatory
factors, and other risks and uncertainties affecting the operation of the
business of DreamWorks Animation SKG, Inc. These risks and uncertainties
include: audience acceptance of our films, our dependence on the success of a
limited number of releases each year, the increasing cost of producing and
marketing feature films, piracy of motion pictures, the effect of rapid
technological change or alternative forms of entertainment and our need to
protect our proprietary technology and enhance or develop new technology. In
addition, due to the uncertainties and risks involved in the development and
production of animated feature projects, the release dates for the projects
described in this document may be delayed. For a further list and description
of such risks and uncertainties, see the reports filed by us with the
Securities and Exchange Commission, including our most recent annual report on
Form 10-K and our most recent quarterly reports on Form 10-Q. DreamWorks
Animation is under no obligation to, and expressly disclaims any obligation
to, update or alter its forward-looking statements, whether as a result of new
information, future events, changes in assumptions or otherwise.



DREAMWORKS ANIMATION SKG, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                           March 31,     December 31,
                                           2013            2012
                                           (in thousands, except par value
                                           and share amounts)
Assets
Cash and cash equivalents                 $   76,235   $      
                                                           59,246
Trade accounts receivable, net of          99,951          109,102
allowance for doubtful accounts
Receivable from distributors, net of       213,955         266,185
allowance for doubtful accounts
Film and other inventory costs, net       880,575         820,482
Prepaid expenses                           22,839          18,593
Other assets                               24,442          24,651
Property, plant and equipment, net of      187,662         188,986
accumulated depreciation and amortization
Deferred taxes, net                       237,778         238,007
Intangible assets, net of accumulated      143,226         148,234
amortization
Goodwill                                   71,406          71,406
Total assets                              $ 1,958,069     $     1,944,892
Liabilities and Equity
Liabilities:
Accounts payable                          $    9,383  $       
                                                           6,611
Accrued liabilities                       127,888         123,886
Payable to former stockholder             251,932         277,632
Deferred revenue and other advances       62,128          25,517
Revolving credit facility                  165,000         165,000
Total liabilities                         616,331         598,646
Commitments and contingencies
Equity:
DreamWorks Animation SKG, Inc.
Stockholders' Equity:
ClassA common stock, par value $0.01 per
share, 350,000,000 shares authorized,
102,740,847 and 102,687,323 shares issued, 1,028           1,027
as of March 31, 2013 and December31,
2012, respectively
Class B common stock, par value $0.01 per
share, 150,000,000 shares authorized,
7,838,731 and 7,838,731 shares issued and  78              78
outstanding, as of March 31, 2013 and
December31, 2012, respectively
Additional paid-in capital                1,065,818       1,057,452
Accumulated other comprehensive (loss)     (2,179)         313
income
Retained earnings                         1,022,891       1,017,314
Less: ClassA Treasury common stock, at
cost, 26,538,509 and 25,661,817 shares, as
of                                         (747,065)       (730,568)
March 31, 2013 and December31, 2012,
respectively
Total DreamWorks Animation SKG, Inc.       1,340,571       1,345,616
stockholders' equity
Non-controlling interests                  1,167           630
Total equity                               1,341,738       1,346,246
Total liabilities and equity              $ 1,958,069     $     1,944,892



DREAMWORKS ANIMATION SKG, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
                                                    Three Months Ended
                                                    March 31,
                                                    2013          2012
                                                    (in thousands, except per
                                                    share amounts)
Revenues                                           $ 134,648     $ 136,084
Costs of revenues                                  85,521        96,500
Gross profit                                       49,127        39,584
Product development                                963           1,134
Selling, general and administrative expenses       42,789        27,465
Operating income                                   5,375         10,985
Interest income, net                               863           568
Other income, net                                  992           2,516
(Increase) decrease in income tax benefit payable   (698)         109
to former stockholder
Income before income taxes                         6,532         14,178
Provision for income taxes                         418           5,104
Net income                                          6,114         9,074
Less: Net income attributable to non-controlling    537           -
interests
Net income attributable to DreamWorks Animation     $   5,577   $   9,074
SKG, Inc.
Net income per share of common stock attributable
to DreamWorks Animation SKG, Inc.
Basic net income per share                         $    0.07  $    0.11
Diluted net income per share                       $    0.07  $    0.11
Shares used in computing net income per share
Basic                                              84,671        83,953
Diluted                                            85,265        84,842



DREAMWORKS ANIMATION SKG, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                                      Three Months Ended
                                                      March 31,
                                                      2013         2012
                                                      (in thousands)
Operating activities
Net income                                           $  6,114   $  9,074
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Amortization and write-off of film and other          60,042       81,593
inventory costs
Amortization of intangible assets                     1,686        -
Stock-based compensation expense                     4,075        5,136
Provision for doubtful accounts and returns reserves  (8,175)      (175)
Amortization of deferred financing costs              -            85
Depreciation and amortization                        983          842
Revenue earned against deferred revenue and other     (11,153)     (2,320)
advances
Deferred taxes, net                                  231          4,961
Changes in operating assets and liabilities:
Trade accounts receivable                            12,294       5,574
Receivable from distributors                          52,231       (12,397)
Film and other inventory costs                       (109,346)    (116,711)
Intangible assets                                     1,015        -
Prepaid expenses and other assets                    (6,367)      (12,357)
Accounts payable and accrued liabilities             6,590        (6,258)
Payable to former stockholder                        (25,700)     (14,309)
Income taxes payable/receivable, net                 2,521        502
Deferred revenue and other advances                  54,641       42,110
Net cash provided by (used in) operating activities  41,682       (14,650)
Investing activities
Investment in unconsolidated affiliate                (500)        -
Purchases of property, plant and equipment           (8,088)      (11,823)
Net cash used in investing activities                (8,588)      (11,823)
Financing Activities
Purchase of treasury stock                           (16,552)     (255)
Net cash used in financing activities                (16,552)     (255)
Effect of exchange rate changes on cash and cash      447          73
equivalents
Increase (decrease) in cash and cash equivalents     16,989       (26,655)
Cash and cash equivalents at beginning of period      59,246       116,093
Cash and cash equivalents at end of period            $ 76,235    $ 89,438
Supplemental disclosure of cash flow information:
Cash (refunded) paid during the period for income     $  (2,278)  $    180
taxes, net
Cash paid during the period for interest, net of      $    217  $    278
amounts capitalized

SOURCE DreamWorks Animation SKG, Inc.

Website: http://www.dreamworksanimation.com
Contact: Shannon Olivas, DreamWorks Animation Investor Relations,
+1-818-695-3658, shannon.olivas@dreamworks.com
 
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