Crown Media Holdings, Inc. (NASDAQ:CRWN) today reported its operating results for the three months and year ended December 31, 2010.
- Successful Holiday season. With the launch of “Countdown” holiday campaigns on Hallmark Channel and the introduction of holiday themed programming on Hallmark Movie Channel, we reached over 75 million viewers from mid-November through year-end. This success was in large part due to the popularity of our themed original holiday movies on Hallmark Channel, which was once again the number one destination for Prime Time on Saturday nights during the holiday period according to Nielsen.
- Improvement for Hallmark Channel Home programming block. The Martha Stewart Show and the entire Hallmark Channel Home programming block showed significant ratings improvement during the holiday period, increasing 40% and 80%, respectively, for households and women 25-54 as compared to the first half of the quarter. Subsequent to the end of the quarter, we introduced Martha Bakes, Martha Stewart’s first original series devoted entirely to baking, and Petkeeping with Marc Morrone, featuring engaging advice on all aspects of pet care.
- Continued growth for Hallmark Movie Channel. Hallmark Movie Channel continues its steady increase in ratings, with December up 70% in terms of Nielsen household ratings as compared to the fourth quarter-to-date. We added 25% more subscribers during 2010 and had the largest year-to-year percentage increase among all 102 Nielsen-measured channels. Subsequent to the end of the year, we announced that Hallmark Movie Channel has 40 million subscribers.
- Increase in advertising revenue. Advertising revenue increased by 13% for the fourth quarter as compared to 2009, signaling a solid quarter of gains attributable to the popularity of our Holiday season, the airing of 12 original movie premieres, the appeal of our new lifestyle programming block and The Martha Stewart Show, and the introduction this year of Hallmark Movie Channel as a Nielsen-rated network.
- Growth in subscriber license fees. We have maintained strong negotiating positions with our distributors resulting in favorable terms in our agreements. As a result, subscriber license fees increased 34% for the quarter and 8% for the year as compared to 2009.
- Positive financial results. Our success on the revenue side combined with diligent cost management enabled us to generate a 50% increase for the quarter and 14% for the year in Adjusted EBITDA as compared to the prior year periods. The recapitalization we completed earlier in the year also contributed to our ability to generate significant positive net income for the quarter, and for the first time, for the full year.
“Our solid quarter of results, with strong holiday seasons on Hallmark Channel and Hallmark Movie Channel, and continued development of the Hallmark Channel Home programming block, fueled advertising revenue gains and increased subscriber license fees,” noted Bill Abbott, President and CEO of Crown Media. “These revenue gains and careful cost management have enabled us to realize our bottom-line financial objectives for both the quarter and the year.
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