E, Blockbuster is owned by Viacom. Usually, one hears about VIA.B shares. Here's their Q2 announcement:
Viacom Reports Second Quarter Results
BusinessWire, Wednesday, July 29, 1998 at 08:44
NEW YORK--(BUSINESS WIRE)--July 29, 1998--Viacom Inc. (AMEX:VIA
and VIAB) today reported results for the second quarter and first half
ended June 30, 1998.
For the 1998 second quarter, excluding the previously announced
non-cash charges at Blockbuster and results from all publishing
operations for each period, Viacom's revenues increased 11% to $2.78
billion, EBITDA rose 23% to $393 million and operating income
increased 43% to $200 million, paced by growth in every segment,
including double-digit gains at MTV Networks, Paramount and
Blockbuster Video. As previously announced, the Company has signed an
agreement to sell its Educational, Professional and Reference
publishing operations and retain its Consumer publishing operation.
Excluding a Blockbuster charge in the second quarter last year and
publishing results for that period, Viacom posted 1997 second quarter
revenues of $2.50 billion, EBITDA of $318 million and operating income
of $140 million.
Viacom's reported 1998 second quarter revenues of $3.32 billion
increased 10% over the comparable 1997 period. The Blockbuster charge
of $437 million in the second quarter resulted in a loss before
interest, taxes, depreciation and amortization of $9 million and an
operating loss of $244 million. For the second quarter of 1997, Viacom
reported revenues of $3.03 billion, EBITDA of $127 million and an
operating loss of $137 million.
Sumner M. Redstone, Chairman and Chief Executive Officer of
Viacom, said, "Viacom benefited from outstanding operational
performances by nearly every segment in the second quarter, including
Blockbuster, which has fundamentally changed its business model and is
generating significant increases. The availability of more new release
tapes made possible by revenue sharing agreements with Hollywood
studios led to a 13.3% increase in Blockbuster's worldwide same-store
rental revenues, a 16% rise in domestic same-store rental transactions
and a 12% increase in total revenues to $1.01 billion. In fact,
excluding the charges, Blockbuster's second quarter EBITDA was up 67%
to $77 million. Paramount Pictures continued its remarkable run of box
office hits in the second quarter with Deep Impact and The Truman Show
and led the Entertainment Group to a 7% increase in revenue and a 16%
increase in EBITDA. MTV Networks posted a 25% gain in revenue and a
16% increase in EBITDA, paced by continued strong growth in
advertising sales.
"In addition to these operational highlights," Mr. Redstone added,
"the recently announced agreement to sell our non-consumer publishing
businesses for $4.6 billion will enable us to dramatically reduce our
overall debt, giving Viacom one of the strongest balance sheets in the
media industry."
For the second quarter of 1998, excluding the Blockbuster charges
from each period, Viacom posted a net loss from continuing operations
of $3 million, or a loss of $.05 per basic and diluted common share,
compared with a net loss from continuing operations of $14 million, or
$.08 per basic and diluted common share, for the same period last
year. Viacom's reported net loss from continuing operations of $281
million, or a loss of $.83 per basic and diluted common share, was due
to the impact of the Blockbuster charge in the second quarter of 1998.
Viacom reported a net loss from continuing operations of $217 million,
or a loss of $.66 per basic and diluted common share, for the second
quarter of 1997.
For the first six months of 1998, excluding the Blockbuster
charges and results for all publishing units from each period,
Viacom's total revenues, EBITDA and operating income increased 9%, 16%
and 25%, respectively, to $5.49 billion, $846 million and $465 million
for the first six months of 1998. This compares with revenues of $5.01
billion, EBITDA of $729 million and operating income of $372 million
for the first half of 1997. Viacom's reported 1998 first half revenues
of $6.41 billion were up 8% over the comparable 1997 revenues of $5.95
billion. The second quarter Blockbuster charge reduced Viacom's 1998
first half EBITDA to $397 million and resulted in an operating loss of
$68 million, compared with EBITDA of $519 million and operating income
of $37 million for the same period last year.
For the first half of 1998, excluding the Blockbuster charges
from each period, the net loss from continuing operations was $2
million, or a loss of $.09 per basic and diluted common share, versus
a net loss from continuing operations of $38 million, or $.19 per
basic and diluted common share, for the same six-month period last
year. Viacom's reported net loss from continuing operations was $280
million, or a loss of $.87 per basic and diluted common share for the
first half of 1998, compared with a net loss from continuing
operations of $241 million, or a loss of $.77 per basic and diluted
common share, for the same period last year.
The 1998 second quarter Blockbuster charge is associated with the
implementation of a new business model, including revenue sharing
agreements with Hollywood studios, which has dramatically increased
the number of video tapes and is satisfying consumer demand over a
shorter period of time. As a result, the Company is revising its
accounting for video rental transactions effective in the second
quarter. Previously, Blockbuster purchased tapes for a fixed price,
which was amortized over a period of six to 36 months. Under the new
method, the nominal up-front amount Blockbuster now pays to the
studios will be amortized on an accelerated basis over three months,
and the studios' share of revenue will be expensed by Blockbuster as
revenue is recognized. The non-cash charge totals $437 million, of
which approximately $425 million represents the adjustment to the
carrying value of the rental tapes due to the new method of accounting
and approximately $12 million represents a revaluation of retail
inventory. In the second quarter of 1997, Blockbuster recorded a
pre-tax charge of $323 million, which principally reflected the impact
of reducing the carrying value of excess retail inventory and
reorganizing and closing underperforming Blockbuster stores in certain
international markets.
Segment Results of Operations (Second quarter 1998 versus
Second quarter 1997)
Networks and Broadcasting (Basic cable and premium subscription
television program services and television stations)
Networks and Broadcasting revenues increased 15% to $721
million and EBITDA increased 9% to $218 million. MTV Networks
("MTVN") revenues of $416 million increased 25% and EBITDA of
$147 million increased 16%, principally reflecting higher
advertising and affiliate revenues. Excluding the loss of MTV
Asia, which was accounted for under the equity method in 1997,
MTVN revenues and EBITDA increased 24% and 20%, respectively.
Showtime Networks Inc.'s revenues and EBITDA increased 6% and
14%, respectively, due largely to continued DBS growth
partially offset by increased advertising associated with the
successful new No Limits branding campaign. Showtime Networks'
subscriptions increased over the prior year by approximately
1.7 million to 18.8 million at June 30, 1998. Paramount
Stations Group revenues increased 3% while EBITDA declined 12%,
stemming principally from a change in station mix due to the
swapping of network affiliated television stations for current
and future UPN affiliates.
Entertainment (Motion Pictures, Television Programming and
Movie Theaters)
Entertainment revenues increased 7% to $922 million and EBITDA
increased 16% to $110 million. The results were led by the box
office success of Deep Impact and The Truman Show along with
continuing contributions from Titanic and Frasier. Spelling's
EBITDA of $4 million increased by $7 million. The improvements
at both Paramount and Spelling were partially offset by higher
deficits due to increases in the number of network pilots
produced.
Video and Music/Parks (Home Video and Music Retailing/Parks)
Video and Music/Parks revenues increased 12% to $1.16 billion
driven by the increase in worldwide same store revenues.
Excluding the Blockbuster charges from each period presented,
Blockbuster EBITDA increased 67% to $77 million. Video and
Music/Parks loss before interest, taxes, depreciation and
amortization of $332 million includes the Blockbuster charge.
Blockbuster Video ended the quarter with 6,153 stores, a net
increase of 333 stores over the second quarter of 1997. Music
stores posted a small EBITDA loss. Parks' revenues and EBITDA
increased 12% and 23%, respectively, stemming largely from
increased per capita spending and the new attraction Star Trek:
The Experience, as well as other new attractions including the
Rugrats Tour and the exhibit Titanic, The Movie on Tour.
Publishing (Consumer, Educational and International/Reference)
Publishing revenues increased 2% to $545 million while EBITDA
decreased 37% to $35 million as improved performance of the
Educational and Consumer groups was offset by decreased
International sales due mainly to the Asian economic downturn
and lower sales at Macmillan Computer Publishing reflecting, in
part, the timing of software releases. The Consumer Group's
best selling titles in the second quarter included You Belong
To Me by Mary Higgins Clark, and In The Meantime by Iyanla
Vanzant.
Other Matters
The Company's interactive game operations (which are being
disposed of), including Spelling Entertainment Group's Virgin
Interactive Entertainment, and the Viacom Radio Stations (which
were sold on July 1, 1997) have been accounted for as
discontinued operations. Revenue, EBITDA, operating income and
net earnings from continuing operations for each period
presented exclude contributions from these units.
The Company reported "Equity in loss of affiliated companies,
net of tax" of $11 million and $39 million for the second
quarter of 1998 and 1997, respectively.
Viacom Inc. is one of the world's largest entertainment and
publishing companies and is a leading force in nearly every segment of
the international media marketplace. The operations of Viacom include
Blockbuster, MTV Networks, Paramount Pictures, Paramount Television,
Paramount Parks, Showtime Networks, Simon & Schuster, 18 television
stations, and movie screens in 12 countries. Viacom also owns
approximately 80% of Spelling Entertainment Group, as well as a
half-interest in Comedy Central and UPN. National Amusements, Inc., a
closely held corporation which operates approximately 1,200 screens in
the U.S., the U.K. and South America, is the parent company of Viacom.
More information about Viacom is available at the Company's Web site
located at viacom.com.
*T
VIACOM INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited; all amounts, except per share amounts, are in millions)
Three months ended Six months ended
June 30, June 30,
1998 1997 1998 1997
Revenues $3,323.9 $3,030.9 $6,411.4 $5,948.6
Operating income (loss) $(244.1) $(136.8) $ (67.7) $ 37.0
Other income (expense):
Interest expense, net (160.4) (205.0) (316.9) (401.8)
Other items, net (14.1) 64.7 (12.1) 65.0
Loss from continuing
operations before
income taxes (418.6) (277.1) (396.7) (299.8)
Benefit for income taxes 147.8 99.8 134.8 113.8
Equity in loss of
affiliated companies,
net of tax (10.6) (39.4) (18.3) (54.6)
Minority interest .4 -- .6 .1
Net loss from continuing
operations (281.0) (216.7) (279.6) (240.5)
Discontinued operations,
net of tax .3 21.7 .3 26.8
Net loss (280.7) (195.0) (279.3) (213.7)
Cumulative convertible
preferred stock dividend
requirement (15.0) (15.0) (30.0) (30.0)
Net loss attributable to
common stock $(295.7) $(210.0) $(309.3) $(243.7)
Basic and diluted loss
per common share:
Net loss from continuing
operations $ (.83) $ (.66) $ (.87) $ (.77)
Net loss $ (.83) $ (.60) $ (.87) $ (.69)
Basic and diluted weighted
average number of
common shares 356.6 352.7 355.9 352.6
Viacom Inc. and Subsidiaries
Business Segment Information
(Unaudited; all amounts are in millions)
Three months Percent Six months Percent
ended B/(W) ended B/(W)
June 30, June 30,
1998 1997 1998 1997
Revenues:
Networks and
Broadcasting $ 721.2 $ 625.5 15% $1,367.6 $1,202.3 14%
Entertainment 921.7 862.3 7 1,941.1 1,863.2 4
Video and Music/
Parks 1,163.8 1,039.4 12 2,241.1 2,012.6 11
Intercompany (27.3) (31.8) 14 (59.9) (63.7) 6
Total Revenues
Excluding
Publishing(1) 2,779.4 2,495.4 11 5,489.9 5,014.4 9
Publishing 544.5 535.5 2 921.5 934.2 (1)
Total Revenues $3,323.9 $3,030.9 10 $6,411.4 $5,948.6 8
EBITDA:
Networks and
Broadcasting $ 218.2 $ 200.1 9% $ 389.4 $360.1 8%
Entertainment 110.2 94.9 16 263.6 222.1 19
Video and Music/
Parks (332.4) (179.3) (85) (170.5) (19.0) NM
Corporate (39.8) (44.9) 11 (73.7) (81.4) 9
Total EBITDA
Excluding
Publishing(1) (43.8) 70.8 (162) 408.8 481.8 (15)
Publishing 35.3 55.9 (37) (11.6) 36.9 (131)
Total EBITDA $ (8.5) $ 126.7 (107) $ 397.2 $518.7 (23)
Total EBITDA
Excluding
Publishing and
Blockbuster
Charges(1) $ 392.9 $ 318.3 23 $ 845.5 $729.3 16
Operating Income
(Loss):
Networks and
Broadcasting $ 178.3 $ 169.9 5% $ 314.6 $292.2 8%
Entertainment 75.4 62.3 21 194.4 157.2 24
Video and Music/
Parks (444.4) (334.9) (33) (395.5) (279.9) (41)
Corporate (45.6) (50.7) 10 (84.9) (91.3) 7
Total Operating
Income (Loss)
Excluding
Publishing(1) (236.3) (153.4) (54) 28.6 78.2 (63)
Publishing (7.8) 16.6 (147) (96.3) (41.2)(134)
Total Operating
Income(Loss) $(244.1) $(136.8) (78) $ (67.7) $ 37.0 (283)
Total Operating
Income Excluding
Publishing and
Blockbuster
Charges(1) $ 200.4 $ 140.0 43 $ 465.3 $371.6 25
(1)The Company has signed an agreement to sell its Educational,
Professional and Reference publishing operations, while retaining
its consumer operations. Operating results for the publishing
businesses to be sold or retained are presented in the aggregate.
NM - Not meaningful.
*T
CONTACT: Press: Analysts:
Carl D. Folta Martin Shea
Senior Vice President, Senior Vice President,
Corporate Relations Investor Relations
(212) 258-6352 (212) 258-6515
KEYWORD: NEW YORK
INDUSTRY KEYWORD: ENTERTAINMENT PUBLISHING EARNINGS
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Copyright 1998, Business Wire
Companies or Securities discussed in this article:
Symbol Name
AMEX:VIA Viacom Inc Cl A
AMEX:VIA.B Viacom Inc Cl B |
