DreamWorks Animation SKG Inc. plans to sell and lease back its Glendale campus as the struggling studio continues to deal with the fallout from a string of box office bombs.
Chief Executive Jeffrey Katzenberg disclosed the plan on Tuesday during a conference call to dicuss the company's fourth-quarter earnings, which missed analysts' estimates due to restructuring costs and write-downs on two money-losing films.
Katzenberg did not provide further details about the sale, though trade publication Variety pegged the price at $185 million. The Flower Street campus totals 400,000 square feet and was built in 1997.
The company reported a net loss of $263 million ($3.08 a share) for the quarter ended Dec. 31, compared with net income of $17.2 million (20 cents) in the same period a year earlier. Revenue increased 14.7 percent to $234 million.
Analysts on average expected a net loss of $3.01 on revenue of $246 million, according to Thomson Financial Network.
DreamWorks has been hard hit financially in recent months following the release of several films that have failed to perform at the box office, forcing lay-offs and scuttling two merger opportunities.
In January, the studio announced a restructuring of its feature film division, including the layoffs of up to 500 employees and the closure of its Redwood City facility. It also is reducing its annual output from three to two films. Additionally, two top executives left – the chief operating office and chief marketing officer.
In the fourth quarter, the studio took $210 million in restructuring charges to account for employee termination costs and write-offs related to unreleased projects, “B.O.O.” and “Monkeys of Mumbai.”
It also took a $57 million write-down related to “Penguins of Madagascar,” its latest film, and “Peabody and Sherman,” released last spring. That brings it total write-downs to $215 million on four films over the last two years, including “Turbo” and “Rise of the Guardians.”
The studio did have a breakout hit with “How to Train Your Dragon 2,” which was released in June and has generated more than $600 million in worldwide ticket sales.
Chief Executive Jeffrey Katzenberg said he was confident the restructuring will enable DreamWorks to deliver better box office results and improve its financial performance.
“And while 2015 will be a transitional year for us, I couldn’t be more confident for the future,” Katzenberg said in a prepared release. “We have a set of strategic imperatives in place designed to ensure sustainable and profitable growth over the long term.
Shares closed up 51 cents, or 2.5 percent, to $21.13 on the Nasdaq, but fell $1.92 in after-hours trading following the earnings release.
For reprint and licensing requests for this article, CLICK HERE.