In a challenging year for smaller movie companies, Lionsgate did something impossible for visitors to its de facto icon Jigsaw's chamber of horrors -- it survived.
The plucky studio that has slowly climbed the Hollywood ranks on the backs of genre fare and Tyler Perry's corpus will probably be glad to see the door shut on 2009.
Earnings dipped as the studio dialed down the number of movies it produced and was hit-hard by a hemorrhaging DVD market. While the major studios padded their theatrical revenues with the nearly $1 billion boost in domestic box office grosses for the year, Lionsgate failed to capitalize on the ticket sales bonanza.
But despite a taxing 2009, Lionsgate executives told TheWrap that the studio's core philosophy is starting to reap dividends.
"It was a rough year, but at the same time we're feeling bullish," Joe Drake, president of the studio's motion picture group and co-chief operating officer, said. "We're finally seeing fruits of two years worth of work after a year and half of being beat on.
"Our mantra is the same. It's that we're staying where we think we can win, with a financial model we can stomach, and making films for an audience we talk to regularly."
True, Drake may be seeing green shoots where others see gathering clouds, but there are in fact a number of rubrics in which the studio has been successful.
Domestic box office for the year was down slightly from the previous year, $403 million in 2009 as opposed to $436.8 million in 2008 -- but the studio's scaled-back release schedule helped cut costs.
Marketing expenses, for example, decreased 66 percent over the last quarter.
The studio also has inched back to profitability. After operating at a loss in 2008, it reported a $31.7 million profit in its most recent quarterly report, compared to a loss of $52 million in the year-ago quarter.
Overall revenue rose 3 percent from the same point last year in the second quarter to $394 million, while net income grew to 27 cents per share, up from a net loss of 44 cents per share last year. Those stronger figures were helped in part by hit television properties like "Mad Men" and "Weeds."
Drake also points to higher per-movie grosses as a sign that the studio is beginning to feel the wind at its back. On average, Lionsgate releases pulled in $31 million this year, compared to $22.9 million in 2008.
Ensuring that the company would have enough in its coffers to field a slate of movies g
oing forward, Lionsgate successfully issued debt to generate cash. In a tight credit market, for example, the company managed to raise over $200 million in October.
Lionsgate remains the moviemaking equivalent of Ichiro Suzuki -- they hit for average instead of going after the long ball. The studio leans on a slate of mid-budget horror and action films that appeal to a niche audience.
