Are They Really Blaming Usher?

TORONTO (Hollywood Reporter) - Canadian independent producer Lions Gate Entertainment on Monday slashed its earnings forecast for fiscal 2006 after getting whacked at the box office by the gangland drama "In the Mix."

The news caused the company's stock to hit 52-week lows and close down more than 12% on the Toronto Stock Exchange.

Revising its guidance for the year ending March 31, Vancouver-based Lions Gate cut its projected net income to $15 million from $35 million. The film producer also forecast full-year earnings before interest, tax, depreciation and amortization, or operating cash flow, at $35 million, compared with a previous guidance of $63 million.

Lions Gate CEO Jon Feltheimer told financial analysts that disappointing sales for the Usher vehicle "In the Mix" had produced a $15 million swing in his company's bottom line. The film has earned just $8.6 million after 10 days.

Despite recent success with "Saw 2," the latest film miss with "Mix" follows previous costly flops with "High Tension," "Happy Endings" and "Rize."

Lions Gate also said home video "softness" had produced an additional operating cash flow loss of $8 million-$9 million -- a hit that had more to do with product mix than the catalog sales business overall.

Such other film studios as DreamWorks Animation and Pixar Animation Studios also have been hit by home video financial momentum.

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