DreamWorks Animation SKG, Inc. , today announced financial results for its third quarter ended September 30, 2005.

Revenue for the third quarter 2005 totaled $87.1 million resulting in a net loss of $0.7 million or ($0.01) per share on a fully diluted basis. This compares to revenue of $241.3 million and a net income of $20.3 million, or $0.26 per diluted share for the same period in 2004. The third quarter 2004 results do not reflect the distribution agreement with DreamWorks Studios, which became effective on October 1, 2004. The Company ended the period with $433.6 million of cash, cash equivalents and short-term investments.

The Company recorded several charges which reduced earnings in the quarter, including a charge related to taxes which had a net impact of approximately $8.0 million or $0.08 per share, as well as a $3.9 million or $0.04 per share charge for the partial write off of film inventory for Wallace & Gromit: The Curse of the Were-Rabbit.

""This quarter's results, driven largely by the strong performance of Madagascar, demonstrate our continued ability to deliver highly successful CG animated movies,"" said Jeffrey Katzenberg, DreamWorks Animation's CEO. ""Madagascar has generated over $525 million in worldwide box office, making it our highest grossing non-sequel to date. Now with the plan for a sequel underway, we believe Madagascar has the potential to become our next great franchise.""

For the third quarter, Madagascar contributed approximately $64.6 million of revenue. Shark Tale contributed $10.3 million in revenue driven primarily from pay television licensing. Shrek 2 produced $2.6 million in the quarter resulting from consumer products. Library and other films contributed approximately $9.6 million in revenue for the quarter.

Looking at the remainder of the year, the Company expects results for the fourth quarter to be primarily driven by the performance of the Madagascar home video, which is set for domestic release on November 15, 2005.

The Company's latest release, Wallace & Gromit: The Curse of the Were-Rabbit, a stop motion picture produced in conjunction with Aardman Animation, hit theatres on October 7, 2005. The film has reached over $160 million in worldwide box office to date. ""Wallace & Gromit has been one of the best reviewed films of the year and, as anticipated, has done exceptionally well with its fan base overseas,"" commented Katzenberg. ""That said, the movie has yet to draw the same level of attention in the domestic market. While we are hopeful that the film will continue its strong international run, given its overall performance to date we were required to make the adjustments we have reported today.""

Items related to the third quarter, as well as certain estimates and the on-going business performance, will be discussed in more detail on the Company's third quarter 2005 earnings conference call later today.

Source: DreamWorks Animation"