'Flushed' drains DreamWorks - Variety 2/28/07

[ALIASd]

'Flushed' drains DreamWorks

Dud forces studio to take write down


By Ben Fritz
Variety
February 28, 2007

"Flushed Away" was a big drain on DreamWorks Animation last quarter, as Jeffrey Katzenberg's toon studio took a $109 million writedown on its unsuccessful CGI collaboration with Aardman.

As a result, though revenue rose 18% from last year to $204.3 million, the company swung from a $63.2 million profit to a $21.3 million loss.

Studio beat Wall Street expectations, however, thanks in large part to a strong perf by its library titles, and its stock was stable in after-hours trading.

DreamWorks previously announced it would be taking a write-down on "Flushed," though at the time, it didn't specify the amount (Daily Variety, Nov. 16). Pic, which is estimated to have cost more than $140 million, grossed just $64 million in the U.S. and $113 million overseas.

Though it hasn't even hit homevideo yet, DreamWorks doesn't expect "Flushed" to ever overcome its writedown and contribute revenue.

Last year's Aardman-produced pic "Wallace & Gromit: Curse of the Were-Rabbit," also did poorly. However, the stop-motion toon was cheaper, and DreamWorks' write-down was a comparatively small $25 million.

After two consecutive disappointments, DreamWorks Animation and Aardman recently ended their multipic pact early (Daily Variety, Jan. 31).
"It's difficult, because we're proud of the work they've done, but this is just not a good business financially for our company," Katzenberg told Daily Variety.

"Over the Hedge," the studio's May release, did relatively well, selling 9.8 million DVDs by Dec. 31 and contributing $104.1 million in revenue for the quarter. Worldwide gross was $336 million.

In the same quarter last year, the studio's May release, "Madagascar" sold 14.2 million homevid units and generated $152.3 million. Its total gross was $533 million, which explains why "Madagascar 2" is in production for 2008, while "Hedge" likely won't have a sequel.

Katzenberg told investors on a conference call that the studio has been changing development processes in hopes that future pics will stand out more clearly against other CGI toons.

Studio made nearly half its revenue in the quarter from homevid and pay TV windows for older pics. "Madagascar" contributed $36.2 million, "Shrek 2" made $31.1 million, "Shark Tale" earned $9.5 million" and "Wallace & Gromit" added $8.6 million.

For the full year, the company made $15.1 million on $395 million in revenue, down 86% and 15%, respectively.

With no money coming in from "Flushed Away," DreamWorks is counting almost entirely on May's "Shrek the Third" as its 2007 revenue driver. Pic will be released between two other huge franchise sequels -- two weeks after "Spider-Man 3" and a week before "Pirates of the Caribbean: At World's End."

full article at http://www.variety.com/article/VR111...goryid=18&cs=1

[ALIASd]

DreamWorks Ani Q4 isn't looking so flush

Swings to $21.3 mi losss; expects 'Shrek' to drive '07

By Paul Bond
The Hollywood Reporter
Feb 28, 2007

Profits were "Flushed Away" by DreamWorks Animation during its fourth quarter, but the company's financial results managed to float by the best expectations of Wall Street.

The company took a $109 million charge in the quarter because of the less-than-stellar performance of "Flushed," which has earned a disappointing $175 million at the worldwide boxoffice.

A year ago, DWA took a $29 million charge for "Wallace & Gromit: The Curse of the Were-Rabbit." That movie and "Flushed" were made with Aardman Animations, and DWA has since severed its relationship with the studio.

DWA reported a $21.3 million loss in the fourth quarter compared with a $63.2 million profit in the same frame a year ago, when "Madagascar" DVD sales were strong and a one-time tax benefit hit the books.

Revenue for the quarter was $204.3 million, compared with $172.9 million a year ago. Analysts expected about $159 million. On a per-share basis, DWA lost 20 cents compared with the 42 cents that analysts were expecting, a monstrous overperformance that enthused some analysts.

Despite the strong financial performance, DWA shares fell 3% on Tuesday to $26.80, perhaps the fault of a worldwide swoon in stock prices triggered by a meltdown in China's markets.

Executives were optimistic during a conference call with analysts, suggesting that the weak market for DVDs a few years ago that sent DWA shares reeling has now recovered.

CEO Jeffrey Katzenberg said he expects about 10 CG-animated films to be released on DVD from his company and its competitors this year and about the same number in 2008. "That's a significant thinning of the market," he added.

full article at http://www.hollywoodreporter.com/hr/...ab8b05a2943c85

[Alice's Wonderland]

The third installment of three movies in three weeks. That's interesting.

[disneytim]

I'll give you 3-1 odds that POTC beats them all.

[clairebear]

I think that one just came out at a bad time of year, but, I don't doubt that if it'd been a Pixar film it'd have done much better.

[FrumiousBoojum]

I'm rather disappointed that Flushed Away didn't do better... loved the movie. Maybe biased because I'm an Aardman fan.

[tasman]

Strange how movies work...I knew Flushed was a decent pic, but was never sufficiently motivated to go to a theater to see it. On the other hand Pirates # 2 had no problem pulling me into a theather, though I thought it was a pretty crappy film, especially compared to the first installment.