DrainYou42 0 Report post Posted November 17, 2003 (From 411Mania.com) World Wrestling Entertainment, Inc., Reports Q2 Results, Profitability Up, Expectations Raised STAMFORD, Conn., Nov. 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. - Pay-Per-View revenues were $24.7 million versus $19.0 million in the prior year quarter. In the second quarter of fiscal 2004, four pay-per-view events were produced as compared to three in the prior year quarter. Our first quarter of 2004 included only two pay-per-view events due to the timing of our first quarter end as compared to the air date of our calendar July program. The Company will produce 12 pay-per-view events in fiscal 2004. - Total domestic pay-per-view buys for the quarter were 1.5 million as compared to 1.1 million in the prior year quarter. - Total buys for the Company's July 2003 event, Vengeance, were 322,000. The event contributed EBITDA of approximately $3.3 million to our second fiscal quarter. - Live Event revenues were $17.7 million as compared to $18.1 million in the second quarter of last year. - There were 84 events, including 7 international events, during the quarter as compared to 87 events, including 3 international events, during the same period last year. - The average attendance at our live events was approximately 5,100 as compared to approximately 5,300 in the prior year quarter. - The average ticket price increased $2.29 to $40.70 for the quarter due to the increased number of international events, which have higher average ticket prices. - Television Advertising revenues were $18.1 million as compared to $19.7 million in the prior year quarter. Commencing with the new television season, which began September 29, 2003, UPN began to sell the inventory related to our SmackDown! program and pay us a rights fee. The decline in advertising revenues was due to this new arrangement, offset partially by increased advertising revenues from our Spike TV programming. These increased revenues were a result of the strong upfront we enjoyed. - Average household ratings for the quarter for our RAW program and Smackdown! program were in line when compared to the prior year quarter. - Television Rights Fees revenues were $16.3 million as compared to $13.8 million in the prior year quarter. The increase was due primarily to new international distribution contracts as well as rights fees received under the new UPN contract. Branded Merchandise Revenues from the Company's Branded Merchandise businesses were $17.7 million versus $19.7 million in the prior year quarter. - Merchandise revenues were $4.1 million as compared to $5.3 million in the prior year quarter. The decrease was due primarily to a change that occurred in fiscal 2004 from the direct sale of our merchandise to a licensing arrangement for merchandise sold at our Canadian and International events. - Publishing revenues were $2.8 million as compared to $3.4 million in the prior year quarter. The decrease was due to one less special magazine published in the quarter as compared to the prior year quarter. - Home Video revenues were $4.1 million as compared to $4.5 million in the prior year quarter, the decrease due primarily to a decrease in units sold. Sales of catalog titles were down 67% from the year ago quarter. The reduction in catalog units was related to a court ordered injunction prohibiting the sale of such titles containing our former logo. - Licensing revenues were $4.9 million as compared to $5.2 million in the prior year quarter. The decrease was due primarily to lower toy sales and lower record sales, partially offset by an increase in video game sales. 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. Share this post Link to post Share on other sites
Guest Coffey Report post Posted November 17, 2003 What? Share this post Link to post Share on other sites
Guest Choken One Report post Posted November 17, 2003 Basically...in Layman's terms... They are staying afloat and things marginally improved. Share this post Link to post Share on other sites
Lightning Flik 0 Report post Posted November 17, 2003 THEY MADE MONEY??? ON THE PPVS??? WHEN THEY GOT LESS BUYS??? WTF?! Share this post Link to post Share on other sites
Guest Choken One Report post Posted November 17, 2003 Price increase my friend. Adding 5 bucks paid off here. Share this post Link to post Share on other sites
Lightning Flik 0 Report post Posted November 17, 2003 Edit: Just read the post above mine. Makes sense adding more money. If I had gotten a PPV, I might've noticed. Share this post Link to post Share on other sites
Fökai 0 Report post Posted November 17, 2003 Basically...in Layman's terms... They are staying afloat and things marginally improved. I wanna know how the hell it is that they actually IMPROVED on last year when everything was pointing at they hadn't. The 2002 fiscal year involved the bankruptcy and ensuing closure of The World. People would point at the fact that they "might" have a bad year, but that wasn't factoring in the millions of dollars that Vince lost on the closing of the restaurant. Share this post Link to post Share on other sites
razazteca 0 Report post Posted November 17, 2003 More PPVs with less buys still equals profits? Ticket prices up even though paying customers is down? Profit was made because the projected losses from the restuarant was not counted? Did the video sales included DVD sales or only VHS? Making international fans pay for PPVs instead of free views? Share this post Link to post Share on other sites
Guest Salacious Crumb Report post Posted November 17, 2003 Ah but see it's not totally honest to say they're doing good. In a lot of areas they made less money and it seems the added price to PPVs is the only thing that made a difference. They are getting less advertisers, making less off of their magazines and selling less merchandise. So they're really not doing any better. Share this post Link to post Share on other sites
Fökai 0 Report post Posted November 17, 2003 Profit was made because the projected losses from the restuarant was not counted? I believe that counted towards last year's numbers. Same reason why the XFL made 2000-2001 (the best financial year for the WWE EVER, wrestling-wise) only a tad above-average. Did the video sales included DVD sales or only VHS? Both were counted under "Home Video Revenue". Share this post Link to post Share on other sites
Jobber of the Week 0 Report post Posted November 18, 2003 Making international fans pay for PPVs instead of free views? I don't understand how letting people watch PPV for free makes them money, sorry. Share this post Link to post Share on other sites
razazteca 0 Report post Posted November 18, 2003 Making international fans pay for PPVs instead of free views? I don't understand how letting people watch PPV for free makes them money, sorry. To make them go to the UK PPVs that do not exist anymore? Its kind of like a crack dealer giving away free samples at first. Once the fan knows of the WWE brand they will go out and buy the merchandise whether it be an old copy of a video game or a DVD. SKY TV or satillite used to give the shows for free. Share this post Link to post Share on other sites
