World Wrestling Entertainment, Inc. Reports Fiscal 2003 Third Quarter Results.Business Editors STAMFORD Stamford, town, England Stamford, town (1991 pop. 18,127), in the Parts of Kesteven, Lincolnshire, E central England, on the Welland River. It is a market town. Products include diesel engines, electrical equipment, bricks, and tiles. , Conn.--(BUSINESS WIRE)--Feb. 25, 2003 World Wrestling Entertainment World Wrestling Entertainment, Inc. (WWE) is a publicly traded, privately controlled integrated media (focusing in television, Internet, and live events), and sports entertainment company dealing primarily in the professional wrestling industry, with major revenue sources , Inc. (NYSE NYSE See: New York Stock Exchange :WWE WWE World Wrestling Entertainment, Inc. (formerly World Wrestling Federation) WWE Witwe (German: Widow) WWE William Webb Ellis (inventor of rugby) WWE World Wide Education WWE Well Woman Exam ) today announced financial results for its third fiscal quarter ended January January: see month. 24, 2003. Total revenues were $95.6 million as compared to $100.2 million in the prior year. The operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the quarter was $26.7 million versus operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $8.5 million last year. Included in the operating loss was a charge of $32.9 million ($20.4 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. or $0.29 per common share) related to the revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of goodwill and other long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. assets at The World(TM), arising from continuing operating losses at that facility. Additionally, included in the operating loss for the quarter was a $1.5 million charge reflecting an offer extended to settle a legal dispute and a $1.0 million charge for the early termination of a lease agreement for office space. Excluding these charges, operating income would have been $8.8 million as compared to an operating loss of $26.7 million for the quarter on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis. The Company reported EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (1) of $11.9 million for the quarter as compared to $11.3 million last year. The loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was $16.0 million versus income from continuing operations of $4.8 million in the third fiscal quarter last year. The loss per common share from continuing operations was $0.23 as compared to earnings per common share of $0.07 last year. Subsequent to the end of the quarter, the Company evaluated several business models relative to The World(TM), all of which projected continued operating losses and negative cash flows for the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future. Cumulative operating losses for the period May 3, 2000 through January 24, 2003 totaled approximately $18.3 million. As a result, the Company will cease the restaurant operation effective today and will close the retail store effective April 27, 2003. Based on preliminary information, the Company expects to record an after-tax charge of approximately $8.0 million to $14.0 million in its fourth fiscal quarter. This amount includes, in addition to other costs, rental payments required under the lease, net of management's current estimate of potential sub-rental income. This charge is subject to revision as additional information becomes available. This lease expires on October October: see month. 31, 2017. "We are reallocating resources to the continued growth of our global business, rather than focusing on a single, site-specific Site-specific is used in a range of contexts: In art Site-specific art In molecular biology Site-specific recombination and local project," said Linda McMahon Linda Marie Edwards-McMahon (born October 4 1948 in New Bern, North Carolina) is the CEO of World Wrestling Entertainment, Inc. and is the wife of World Wrestling Entertainment Chairman Vince McMahon. , Chief Executive Officer. "We will build shareholder value by continuing to create WWE branded products and programming which we can distribute on a worldwide basis. Moreover, we will immediately eliminate operating losses which have continued to grow since the acquisition of the facility and which are estimated to be approximately $9.5 million for this fiscal year." Third Quarter Results Total revenues for the quarter were $95.6 million versus $100.2 million in the prior year quarter. Live and Televised Entertainment Total revenues for Live and Televised businesses were $71.0 million as compared to $73.4 million last year. -- Live Event revenues were $16.2 million as compared to $15.3 million in the third quarter last year. -- There were 79 events, including 7 international events, during the quarter as compared to 61 events, including 1 international event, during the same period last year. -- Attendance for the quarter was approximately 373,900 as compared to 446,500 in the prior year quarter. The current quarter includes attendance of approximately 63,700 from our international live event tours as compared to 15,000 in the prior year quarter. -- The average ticket price increased approximately 20% to $40.90. -- The average international ticket price was approximately $50.50 for the quarter. -- Pay-Per-View revenues were $21.1 million versus $23.8 million in the prior year quarter. -- Total domestic pay-per-view buys for the quarter were 1.3 million as compared to 1.6 million last year. -- The retail price of our domestic pay-per-views increased 17% from $29.95 to $34.95 effective April 2002. -- Television Rights Fees revenues increased 25% to $16.2 million due to rights fees for two television specials that aired on TNN and UPN, an executive producer fee that we earned from the upcoming feature film, Heldorado, starring The Rock(TM), rights fees for our Tough Enough(TM) series, and increased international rights fees. -- Television Advertising revenues were $17.5 million as compared to $21.3 million last year. This decline was principally due to the impact of lower television ratings and a decrease in sponsorship revenues. Branded Merchandise Total revenues were $24.6 million versus $26.8 million last year. -- Licensing revenues increased 9% to $8.4 million due to higher revenues from our book publishing book publishing. The term publishing means, in the broadest sense, making something publicly known. Usually it refers to the issuing of printed materials, such as books, magazines, periodicals, and the like. and video game businesses. -- Hollywood Hollywood. 1 Community within the city of Los Angeles, S Calif., on the slopes of the Santa Monica Mts.; inc. 1903, consolidated with Los Angeles 1910. Hulk Hogan Terrence Gene Bollea (born August 11, 1953), better known by his ring name Hulk Hogan, is an American actor, former rock bassist and professional wrestler. He currently stars on the VH1 reality show Hogan Knows Best and will be the new host of reached #13 on The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times Best Sellers List. -- WWE SmackDown! Shut Your Mouth WWE SmackDown! Shut Your Mouth (Exciting Pro Wrestling 4 in Japan) is a professional wrestling video game released on the PlayStation 2 console by THQ and developed by YUKE's Future Media Creators. for Playstation A video game console from Sony that was introduced in the U.S. in 1995. CD-ROM based and using a 32-bit MIPS CPU, the original PlayStation was the first of a family of desktop and handheld units. 2 was among the top ten best selling Playstation 2 games This is a list of about 1700 games for the Sony PlayStation 2 video game system, both released and unreleased, organized alphabetically by name. This list is based on the English titles of the games. See Lists of video games for related lists. for the month of December December: see month. . -- Merchandise revenues were $5.0 million as compared to $7.0 million last year due to decreased revenues from WWEShopzone.com and our catalogs and lower attendance at our live events in the current quarter. -- Publishing revenues remained flat at $4.2 million. -- Home video revenues increased 3% to $2.7 million from $2.6 million in the prior year quarter. -- According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Billboard Magazine, 8 of our home videos ranked among the 10 best selling home videos in the "Recreational Sports" category as of February February: see month. 15, 2003. -- The World(TM) revenues declined 28% to $2.8 million due to decreased traffic in the restaurant and bar at the venue. Profit Contribution Total profit contribution for the quarter was $36.8 million as compared to $37.5 million in the prior year quarter. Total profit contribution margin was 39% as compared to 37% in the prior year quarter. The profit contribution margin for the Live and Televised businesses was approximately 37% versus 40% in the third quarter last year principally reflecting the decline in pay-per-view pay-per-view n. A service offered by cable television companies that allows subscribers to view special programs for an additional charge. pay and advertising revenues. The profit contribution margin for the Branded Merchandise businesses was 44% as compared to 30% during the same period last year primarily due to higher returns provisions and inventory write-offs recorded in the merchandise and home video categories in the prior year and the absence of NHRA NHRA National Hot Rod Association NHRA Northland Human Resource Association NHRA National Human Resources Association NHRA Nursing Home Reform Act NHRA National Hospice Regatta Alliance NHRA National Heritage Resources Act (South Africa) expenses in the current year, partially offset by a decline in revenues at The World(TM). Selling, General and Administrative Expenses SG&A expenses for the quarter were $27.1 million as compared to $26.2 million last year. Excluding the offer extended to settle a legal dispute and the early termination of a lease agreement for office space, S,G&A expenses decreased approximately 5%. Nine Months ended January 24, 2003 Total revenues for the nine-month period ended January 24, 2003 were $276.5 million versus $289.1 million last year. Loss from continuing operations was $15.1 million, or a loss of $0.21 per common share compared to income from continuing operations of $21.6 million, or earnings per common share of $0.30 in the prior fiscal year. The prior year results included a $5.8 million after-tax gain, or $0.08 per common share, associated with the revaluation and sale of certain equity instruments. Live and Televised Entertainment Total revenues for the Live and Televised businesses were $209.5 million as compared to $218.5 million in the same period last year. -- Live Event revenues increased 15% to $53.2 million. -- There were 253 events, including 14 international events for the first nine months. This compares to 159 events during the same period last year, including 2 international events. -- Attendance remained flat at 1.3 million. This includes attendance of 172,600 from our international live event tours in the current year as compared to 30,800 in the prior year. -- The average ticket price increased approximately 14% to $39.35. -- The average ticket price for international events in the current year was approximately $56.10. -- Pay-Per-View revenues declined 17% to $59.3 million from $71.3 million in the prior year. -- Total domestic pay-per-view buys were 3.6 million as compared to 4.7 million in the prior year. -- Television Rights Fees revenues increased 10% to $42.9 million primarily due to rights fees for three of our television specials and increased international rights fees. -- Television Advertising revenues were $53.9 million as compared to $61.8 million last year. This decrease was principally due to the impact of lower television ratings Television ratings may refer to:
sponsorship revenues in the current year. Branded Merchandise Total revenues for our Branded Merchandise businesses were $67.1 million versus $70.6 million last year. -- Licensing revenues were $16.7 million as compared to $18.1 million in the prior year. Increases from revenues in the video game software category and the release of WWE Forceable Entry by SmackDown! Records were more than offset by declines in our toy and apparel categories. -- Merchandise revenues decreased 5% to $16.6 million. Declines in WWEShopzone.com and catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. revenues were partially offset by an increase in merchandise sold at our live events. -- Publishing revenues increased 2% to $12.0 million primarily due to the increase in the cover price of Raw Magazine and an extra special magazine on sale in the current year. -- Home video revenues increased 23% to $10.7 million from $8.7 million due to an 8% increase in the number of units sold. The number of units sold in DVD format See VOB and DVD. accounted for about 66% of total units sold versus approximately 31% in the prior year. -- The World revenues declined 30% to $7.2 million due to decreased traffic in the restaurant and bar at the venue. Profit Contribution Total profit contribution for the nine months ended January 24, 2003 was $95.0 million as compared to $105.3 million in the prior year. Total profit contribution margin decreased to 34% from 36%. The profit contribution margin for the Live and Televised businesses was approximately 33% versus 38% in the prior year primarily reflecting the impact of William Morris Agency Founded in 1898, the William Morris Agency is the largest diversified talent and literary agency in the world, with offices in New York City, Beverly Hills, Nashville, Miami, London, and Shanghai. , Inc. settlement and declines in pay-per-view and advertising revenues in the current year. The profit contribution margin for the Branded Merchandise businesses was 37% versus 31% in the prior year due to the absence of NHRA expenses and lower expenses associated with maintaining our web site in the current year and higher inventory write-offs in the home video category in the prior year, partially offset by a decline in revenues at The World(TM). Selling, General and Administrative Expenses SG&A expenses were consistent with last year at $78.3 million. Balance Sheet Total assets as of quarter end were $435.6 million which included $270.0 million in cash, cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments and $52.1 million in receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed . Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , including the current portion, as of quarter end was $9.5 million and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. totaled $345.3 million. Capital expenditures for the nine-month period were approximately $11.0 million. Guidance for Fiscal Year 2003 As part of its ongoing business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets , the Company has provided the following revised guidance for fiscal year 2003. Based on our decision to cease operations at The World(TM), our annual results from The World(TM) will be treated as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and have been excluded from the guidance below. This guidance is subject to various risks and uncertainties outlined in the forward-looking statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. included in this release. -- Based upon the actual results for the first nine months of the year, the Company expects that full year revenues will be approximately $370 million to $375 million. -- Operating income from continuing operations is forecast to be approximately $27 million to $30 million. -- EBITDA (1) is forecast to be approximately $42 million to $45 million. -- Selling, general, and administrative expenses are forecast to be approximately $90 million to $95 million. -- Depreciation and amortization is forecast to be approximately $10 million for the year. -- The Company expects to perform approximately 330 live events with attendance projected to be 1.8 million for the year. Total pay-per-view buys are projected to be approximately 5.4 million. (1) EBITDA is defined as earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP"), we believe it is useful to investors because it is a widely used financial measure that provides relevant and useful information for evaluating financial performance. EBITDA should not be considered an alternative to measures of operating performance under GAAP. World Wrestling Entertainment, Inc. (NYSE: WWE) is an integrated media and entertainment company headquartered in Stamford, Conn., with offices in New York, Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , Toronto and London. Additional information on the company can be found at wwe.com and corporate.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 wrestling, sport in which two unarmed opponents grapple with one another. The object is to secure a fall, i.e., cause the opponent to lose balance and fall to the floor, and ultimately to pin the supine opponent's shoulders to the floor, through the use of body 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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 Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , entertainment, professional sports The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , and licensed merchandise; acceptance of the Company's brands, media and merchandise within those markets; uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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.
Supplemental Information - EBITDA
(dollars in thousands)
(Unaudited) Three Months Ended Nine Months Ended
January 24, January 15, January 24, January 25,
2003 2002 2003 2002
--------- --------- --------- --------
Net (loss) income reported
on GAAP basis $(16,000) $9,430 $(15,076) $26,263
Less: Income from
discontinued
operations - 4,638 - 4,638
Add: (Benefit) provision
for income taxes (9,993) 2,846 (9,583) 13,276
Less: Interest (expense)
income, net and
other income
(loss), net 668 (828) 679 15,817
--------- --------- --------- --------
Operating (loss) income
reported on GAAP basis $(26,661) $8,466 $(25,338) $19,084
Add: Depreciation and
amortization 3,473 2,810 9,202 7,695
Goodwill and other
impairment charges 32,925 - 32,925 -
Legal settlements
and other charges -
net 2,207(a) - 4,607(b) -
--------- --------- --------- --------
EBITDA $11,944 $11,276 $21,396 $26,779
========= ========= ========= ========
(a) Reflects charges relating to the offer extended to settle a legal
dispute of $1.5 million and an early termination of a lease
agreement for office space of $0.7 million (the balance of $0.3
million is included in depreciation and amortization above).
(b) Reflects net charges relating to the William Morris Agency, Inc.
and Parents Television Council Settlements of $2.4 million, an
offer extended to settle a legal dispute of $1.5 million, and an
early termination of a lease agreement for office space of $0.7
million (the balance of $0.3 million is included in depreciation
and amortization above).
World Wrestling Entertainment, Inc.
Consolidated Balance Sheets
(dollars in millions)
(Unaudited)
As of
----------------------
January 24, April 30,
2003 2002
------------- --------
Assets
Cash, cash equivalents and short-term investments (a) $270.0 $294.1
Other current assets 71.3 81.5
Property, plant, equipment and other assets (b) 94.3 111.8
-------- --------
Total Assets $435.6 $487.4
======== ========
Liabilities and Stockholders' Equity
Current liabilities $80.8 $88.1
Long-term debt, including short-term portion 9.5 9.9
-------- --------
Total Liabilities 90.3 98.0
Stockholders' Equity (a), (b) 345.3 389.4
-------- --------
Total Liabilities and Stockholders' Equity $435.6 $487.4
======== ========
(a) - Reflects the repurchase of shares of the Company's common stock,
primarily 2.3 million shares that Company repurchased from NBC in
May 2002 at a price of $12 per share, or $27.7 million.
(b) - Includes the goodwill and other impairment charges of $32.9
million relating to The World recorded in Fiscal 2003 ($20.4
million, net of tax).
World Wrestling Entertainment, Inc.
Consolidated Statements of Operations
(dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
January 24, January 25, January 24, January 25,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net revenues $95,629 $100,232 $276,544 $289,109
Cost of revenues 58,789 62,748 181,497 183,849
Selling, general
and
administrative
expenses 27,103 26,208 78,258 78,481
Depreciation and
amortization 3,473 2,810 9,202 7,695
Goodwill and
other impairment
charges (a) 32,925 - 32,925 -
----------- ----------- ----------- -----------
Operating (loss)
income (26,661) 8,466 (25,338) 19,084
Interest
(expense)
income, net and
other income
(loss), net (b) 668 (828) 679 15,817
----------- ----------- ----------- -----------
(Loss) income
before income
taxes (25,993) 7,638 (24,659) 34,901
(Benefit)
provision for
income taxes (9,993) 2,846 (9,583) 13,276
----------- ----------- ----------- -----------
(Loss) income
from continuing
operations (16,000) 4,792 (15,076) 21,625
----------- ----------- ----------- -----------
Income from
discontinued
operations, net
of tax benefit
and minority
interest (c) - 4,638 - 4,638
----------- ----------- ----------- -----------
Net (loss) income $(16,000) $9,430 $(15,076) $26,263
=========== =========== =========== ===========
(Loss) earnings
per share -
Basic and
Diluted:
Continuing
operations $(0.23) $0.07 $(0.21) $0.30
=========== =========== =========== ===========
Discontinued
operations $ - $0.06 $ - $0.06
=========== =========== =========== ===========
Net (loss)
income $(0.23) $0.13 $(0.21) $0.36
=========== =========== =========== ===========
Weighted average common and
common equivalent shares:
Basic 70,407,085 72,832,384 70,633,799 72,866,458
=========== =========== =========== ===========
Diluted 70,407,085 72,832,434 70,633,799 72,866,658
=========== =========== =========== ===========
(a) Reflects a charge related to the revaluation of goodwill ($2.5
million) and other long-lived assets ($30.4 million) at its
entertainment complex, The World for the three and nine months
ended January 24, 2003.
(b) Included in the results for the nine months ended January 25, 2002
was a $9.3 million gain ($5.8 million, net of tax) associated with
the revaluation and sale of certain equity instruments.
(c) Includes the results of the Company's discontinued business, XFL.
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