DreamWorks To Focus Its Feature Production From 3 Films Per Year Down To 2

(RTTNews) - DreamWorks Animation SKG Inc. (DWA) said Thursday that it is implementing a new strategic plan to restructure its core feature animation business to ensure the consistent and profitable delivery of the high quality films.

Following a full review of the business, the company said it will focus its feature production from three films per year down to two, maximize its creative talent and resources, reduce costs, and drive profitability.

Under the leadership of newly appointed Co-Presidents of Feature Animation Bonnie Arnold and Mireille Soria, the studio's core feature animation production will now focus on six specific movies for the next three years - one original film and one sequel each year - including Kung Fu Panda 3 (March 18, 2016), Trolls (Nov. 4, 2016), Boss Baby (Jan. 13, 2017), The Croods 2 (Dec. 22, 2017), Larrikins (Feb. 16, 2018) and How to Train Your Dragon 3 (June 29, 2018). Captain Underpants, which will be produced outside of the studio's pipeline at a significantly lower cost, is scheduled for release in 2017. The company's 2015 release, Home, will premiere domestically on March 27.

The overall reduction of DreamWorks Animation's feature production output will result in a loss of about 500 jobs across all locations and all divisions of the studio.

DreamWorks said it expects to incur a pre-tax charge of about $290 million in connection with the restructuring and related items. The costs are expected to be incurred mainly in the quarter ended December 31, 2014, with the remainder in 2015 and 2016. The plan will result in total cash payments of about $110 million incurred mainly in 2015.

The restructuring plan is expected to be substantially complete by the end of 2015 and expected to result in annualized pre-tax cost savings of about $30 million in 2015, growing to roughly $60 million by 2017, the company said.