Hallmark Breaks Into The Black
Crown Reports First Ever Positive Cash Flow
Mike Farrell -- Multichannel News, 3/4/2009 5:10:40 PM
Crown Media Holdings, parent company of The Hallmark Channel, recorded its first quarter ever of positive cash flow, fueled primarily by increased carriage fees and lower operating expenses.
Adjusted earnings before interest, taxes, depreciation and amortization, a measure of cash flow, was $23.3 million in the fourth quarter 2008, compared to a loss of $744,000 in the same period the prior year. For the full year, adjusted EBITDA was $66.2 million, versus a loss of $11.3 million in 2007.
Revenue at the company rose 8% to $75.2 million, due in part to increased carriage fees from renewed distribution agreements. For the full year revenue increased 20% to $281.8 million, due to increases in both advertising revenue and subscriber fees, the company said.
Programming expenses dropped 17% to $33 million in the quarter, primarily due to the expiration of a programming agreement with the National Interfaith Cable Coalition and Crown's own efforts to manage costs.
Selling, general and administrative expenses plunged 60% from $21.6 million in the fourth quarter of 2007 to $8.6 million in the most recent period, due to a $2.1 million decrease in compensation expense related to share-based obligations, a decrease in bonus expenses and a $7.7 million decrease in legal expenses.
Crown Media also said carriage for its Hallmark Movie Channel rose to 14 million homes in the period. The company expects HMC to reach 25 million homes by the end of 2009.
"Our company delivered an extremely successful year for 2008 - in terms of operating as well as financial results," said Crown CEO Henry Schleiff in a statement. "Despite the challenges we encountered, our impressive revenue and EBITDA growth reflect the strong foundation we have built to help us withstand and even operate successfully in an economic downturn."
Crown Media shares closed at $1.71 each on Wednesday, up 10 cents (6.2%) per share.
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