Pro-Wrestling WWE Financials Page
Last updated 3 July 2004
STAMFORD, Conn.--(BUSINESS WIRE)--11/17/2003--World Wrestling Entertainment, Inc. (NYSE:WWE) today announced financial results for its second quarter ended October 24, 2003. The Company reported income from continuing operations of $16.9 million, or $0.25 per share, versus $0.3 million, or zero cents per share in the prior year. Revenues totaled $94.4 million as compared to $90.3 million in the prior year quarter.
"I am pleased with our strong results for the quarter. As a result of improved operating results across almost all lines of business, we were able to exceed our expectations. In particular, increased overall pay-per-view buys, coupled with strong ad sales revenues and the continued benefits from the cost-cutting measures initiated in fiscal 2003, all contributed to the strong quarter. Management is focused on execution and continuing to improve our profitability," said Linda McMahon, WWE CEO. "I am excited by our results and momentum as we gear up for WrestleMania XX at Madison Square Garden in March 2004".
EBITDA was $28.8 million in the current quarter as compared to $3.5 million in the prior year quarter. The increase in EBITDA was attributable to continued growth in our international business, increased pay-per-view buys for the quarter, a reduction in our overhead and a number of unusual factors which are more fully described below. Results for our international business reflect an increased number of events held and new distribution agreements for our programming.
The current quarter included two unusual factors that positively contributed to EBITDA. Due solely to timing, this quarter reflects four pay-per-view events as compared to three in the prior year quarter. Revenues for the current quarter included approximately $5.3 million related to our July 2003 pay-per-view event and EBITDA for the quarter included $3.3 million for that event. In addition, the Company's EBITDA benefited from a $5.9 million favorable settlement of litigation. The settlement payment was from an equipment manufacturer and related to the tragic death of Owen Hart in May 1999. EBITDA for the prior year quarter included a $5.9 million unfavorable settlement of litigation.
Operating income for the quarter was $26.0 million versus $1.4 million in the prior year quarter. Net income was $17.2 million, or $0.25 per share, as compared to a net loss of $1.6 million, or a net loss of $0.02 per share, in the prior year quarter. Included in the net loss for the prior year quarter was a $1.9 million loss, after tax, from discontinued operations related to our entertainment complex.
Total revenues through the first six months of fiscal 2004 were $169.1 million as compared to $175.8 million in the prior year period. EBITDA was $34.5 million for the current six months period as compared to $10.6 million in the prior year period. EBITDA for the current year period included $5.9 million related to the favorable settlement of litigation. EBITDA for the prior year period included $2.4 million in net unfavorable settlements of litigation. Operating income for the current period was $28.9 million versus $6.5 million in the prior year period. Net income was $19.8 million, or $0.29 per share, as compared to $0.9 million, or $0.01 per share, in the prior year period. Included in net income for the prior year was a $3.2 million loss after tax from discontinued operations related to our entertainment complex.
Results By Business Segment
Live and Televised Entertainment
Revenues from the Company's Live and Televised businesses were $76.7 million for the current quarter as compared to $70.7 million in the prior year quarter.
Branded Merchandise
Revenues from the Company's Branded Merchandise businesses were $17.7 million versus $19.7 million in the prior year quarter.
Profit Contribution (Net revenues less cost of revenues)
Profit contribution for the quarter was $42.2 million as compared to $28.2 million in the prior year quarter. Total profit contribution margin was approximately 45% for the current quarter as compared to 31% for the prior year quarter.
The profit contribution margin for the Live and Televised businesses was approximately 44% for the current quarter as compared to 30% in the prior year quarter. The profit margin for the current period was favorably impacted by the airing of one additional pay-per-view event, the change in our UPN agreement and decreased television production costs. Additionally, the prior year profit contribution margin was negatively impacted by a $3.5 million charge related to a litigation settlement.
The profit contribution margin for the Branded Merchandise businesses was approximately 47% for the current quarter as compared to 36% in the prior year quarter. The increase is due primarily to improved merchandise, publishing and home video margins.
Selling, general and administrative expenses
SG&A expenses decreased by $11.2 million for the quarter to $13.4 million as compared to $24.6 million in the prior year quarter. Included in the current quarter was the favorable settlement of litigation of $5.9 million while the prior year quarter included an unfavorable litigation settlement of $2.4 million. Excluding these items, SG&A expenses decreased by $2.9 million as compared to the prior year quarter due primarily to lower professional fees and to a lesser extent, a decrease in advertising and promotion expenses and the impact of the cost cutting measures taken during fiscal 2003.
Discontinued Operations
The discontinued operations of The World generated income of $0.3 million, after tax, as compared to a loss of $1.9 million, after tax, in the prior year quarter.
Fiscal 2004 Outlook
The Company anticipates that its net revenue results for fiscal 2004 will be between $325.0 and $350.0 million, EBITDA will be between $55.0 and $60.0 million and Income from Continuing operations will be between $31.0 and $33.0 million, or between $0.45 and $0.48 per share. The increase in the EBITDA range reflects overall improved operating results principally due to the strength of our pay-per-view business and the settlement of litigation.
Note: World Wrestling Entertainment, Inc. will host a conference call on Monday, November 17, 2003, at 11:00 a.m. ET to discuss the Company's second quarter earnings results for fiscal year 2004. All interested parties can access the conference call by dialing 800-795-1259 (conference ID: WWE). Please reserve a line 15 minutes prior to the start time of the conference call. A presentation that will be referenced during the call can be found at the Company web site at corporate.wwe.com. A replay of the call will be available approximately three hours after the conference call concludes, and can be accessed at corporate.wwe.com.
World Wrestling Entertainment, Inc. (NYSE:WWE) is an integrated media and entertainment company headquartered in Stamford, Conn. Additional information on the Company can be found at wwe.com and corporate.wwe.com. For additional information on WrestleMania XX, to be broadcast live on pay-per-view from Madison Square Garden in New York City on March 14, 2004, go to wrestlemania.wwe.com. Information on television ratings and community activities can be found at parents.wwe.com.
Trademarks: The names of all World Wrestling Entertainment televised and live programming, talent names, images, likenesses, slogans and wrestling moves and all World Wrestling Entertainment logos are trademarks, which are the exclusive property of World Wrestling Entertainment, Inc.
Forward-Looking Statements: This news release contains forward-looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties. These risks and uncertainties include the conditions of the markets for live events, broadcast television, cable television, pay-per-view, Internet, entertainment, professional sports, and licensed merchandise; acceptance of the Company's brands, media and merchandise within those markets; uncertainties relating to litigation; risks associated with producing live events both domestically and internationally; uncertainties associated with international markets; and other risks and factors set forth from time to time in Company filings with the Securities and Exchange Commission. Actual results could differ materially from those currently expected or anticipated.
World Wrestling Entertainment, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Six Months
Ended Ended
October 24, October 25, October 24, October 25,
2003 2002 2003 2002
---------------------------------------------------
Net revenues $ 94,431 $ 90,323 $ 169,106 $ 175,772
Cost of revenues 52,227 62,172 101,488 118,790
Selling, general
and administrative
expenses 13,359 24,635 33,078 46,422
Depreciation and
amortization 2,872 2,098 5,596 4,090
----------- ------------ ------------ -------------
Operating income 25,973 1,418 28,944 6,470
Interest income
and other, net 1,267 (917) 2,787 12
----------- ------------ ------------ -------------
Income before
income taxes 27,240 501 31,731 6,482
Provision for
income taxes 10,356 241 12,039 2,367
----------- ------------ ------------ -------------
Income from
continuing
operations 16,884 260 19,692 4,115
----------- ------------ ------------ -------------
Discontinued
operations:
Income (loss)
from discontinued
operations,
net of tax 266 (1,863) 108 (3,190)
----------- ------------ ------------ -------------
Net income (loss) $ 17,150 $ (1,603) $ 19,800 $ 925
=========== ============ ============ =============
Earnings (loss) per common share
- Basic and Diluted:
Continuing
operations $ 0.25 $ 0.00 $ 0.29 $ 0.06
=========== ============ ============ =============
Discontinued
operations $ - $ (0.03) $ - $ (0.05)
=========== ============ ============ =============
Net income
(loss) $ 0.25 $ (0.02) $ 0.29 $ 0.01
=========== ============ ============ =============
Weighted average common shares
outstanding:
Basic 68,392 70,407 68,710 70,750
=========== ============ ============ =============
Diluted 68,586 70,407 68,860 70,750
=========== ============ ============ =============
World Wrestling Entertainment, Inc.
Consolidated Balance Sheets
(dollars in thousands)
(Unaudited)
As of As of
October 24, April 30,
2003 2003
-------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents. $82,449 $128,473
Short-term investments. 190,992 142,641
Accounts receivable, net. 42,731 49,729
Inventory, net 1,024 839
Prepaid expenses and other current
assets 20,029 18,443
Assets of discontinued operations 20,761 21,129
------------ ------------
Total current assets 357,986 361,254
PROPERTY AND EQUIPMENT - NET 56,827 59,325
INTANGIBLE ASSETS - NET 13,127 12,055
OTHER ASSETS 6,200 4,623
------------ ------------
TOTAL ASSETS $434,140 $437,257
============ ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $806 $777
Accounts payable 15,087 14,188
Accrued expenses and other liabilities 43,540 34,991
Deferred income 19,414 24,662
Liabilities of discontinued operations 9,531 11,554
------------ ------------
Total current liabilities 88,378 86,172
LONG-TERM DEBT 8,716 9,126
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Class A common stock 136 182
Class B common stock 548 548
Treasury stock - (30,569)
Additional paid-in capital 247,926 297,315
Accumulated other comprehensive (loss)
income (122) 243
Retained earnings 88,558 74,240
------------ ------------
Total stockholders' equity 337,046 341,959
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $434,140 $437,257
============ ============
World Wrestling Entertainment, Inc.
Consolidated Statements of Cash Flows
(dollars in thousands)
(Unaudited)
Six Months Ended
October 24, October 25,
2003 2002
--------------------------
OPERATING ACTIVITIES:
Net income $ 19,800 $ 925
Adjustments to reconcile net income to net
cash provided by operating activities:
(Income) loss from discontinued
operations, net of tax (108) 3,190
Depreciation and amortization. 5,596 4,090
Amortization of warrants. (670) (635)
Stock compensation costs 316 -
Provision for doubtful accounts (1,976) 603
Provision for inventory obsolescence (52) 513
Changes in assets and liabilities:
Accounts receivable 8,976 14,958
Inventory (133) (158)
Prepaid expenses and other assets (1,592) (3,114)
Accounts payable 899 (4,394)
Accrued expenses and other
liabilities 8,998 (5,374)
Deferred income (6,217) 685
------------- ------------
Net cash provided by
continuing operations 33,837 11,289
Net cash used in
discontinued operations (1,545) (644)
------------- ------------
Net cash provided by
operating activities 32,292 10,645
------------- ------------
INVESTING ACTIVITIES:
Purchase of property and equipment (2,458) (5,173)
Purchase of other assets (1,641) -
(Purchase) sale of short-term investments,
net (49,172) 116
------------- ------------
Net cash used in continuing
operations (53,271) (5,057)
Net cash used in
discontinued operations - (6,830)
------------- ------------
Net cash used in investing
activities (53,271) (11,887)
------------- ------------
FINANCING ACTIVITIES:
Repayment of long-term debt (381) (294)
Purchase of treasury stock (19,182) (29,554)
Dividends paid (5,482) -
Net proceeds from exercise of stock options - 404
------------- ------------
Net cash used in continuing
operations (25,045) (29,444)
Net cash provided by
discontinued operations - 322
------------- ------------
Net cash used in financing
activities (25,045) (29,122)
------------- ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (46,024) (30,364)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 128,473 86,396
------------- ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 82,449 $ 56,032
============= ============
World Wrestling Entertainment, Inc.
Supplemental Information - EBITDA
(dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
October 24, October 25, October 24, October 25,
2003 2002 2003 2002
-----------------------------------------------
Net income (loss)
reported on GAAP
basis $17,150 $(1,603) $19,800 $925
(Income) loss from
discontinued
operations (266) 1,863 (108) 3,190
Provision for income
taxes 10,356 241 12,039 2,367
Interest income and
other, net (1,267) 917 (2,787) (12)
Depreciation and
amortization 2,872 2,098 5,596 4,090
-----------------------------------------------
EBITDA $28,845 $3,516 $34,540 $10,560
=========== =========== =========== ===========
CONTACT:World Wrestling Entertainment, Inc. Media: Gary Davis, 203-353-5066 or Investors: Michele Goldstein, 203-352-8642
SOURCE: World Wrestling Entertainment, Inc.
11/17/2003 07:07 EASTERN