- 09/07/2005 (1:34:35 pm)
- Press Release
….
WWE(R) Reports Fiscal 2006 First Quarter Results
Wednesday September 7,
During the quarter, the Company aired five pay-per-view events as compared to four events in the prior year quarter. The additional event, Backlash®, contributed approximately $4.3 million in revenues, or $2.1 million in profit contribution.
Linda McMahon, CEO, stated that she was pleased with the Company's financial results and the upward trends in key performance metrics in the first quarter. "One of the more significant items in our Live and Televised businesses for the quarter was the increase in pay-per-view buys. Each of the pay-per-view events produced in the quarter either met or exceeded the buys from the prior year," she said. "Another significant item was an increase in average attendance at our live events as the average attendance at both our North American and International live events was better than anticipated and surpassed last year's average by more than 18%."
Mrs. McMahon continued, "Regarding the Branded Merchandise businesses, our licensing programs continue to expand internationally with significantly better than anticipated sales in the toy and novelty categories. Our Home Video business also out-performed our estimates due in part to the success of our WrestleMania® 21 title, which sold approximately 202,000 DVD units to date in the U.S. alone, making it one of our all-time best sellers. These results show that our continued investment in areas such as global expansion and talent development are beginning to yield positive returns."
Results By Business Segment
Live and Televised Entertainment
Revenues from the Company's Live and Televised businesses were $68.6 million as compared to $65.2 million in the prior year quarter.
· Pay-Per-View revenues were $21.6 million versus $16.9 million in the prior year quarter. In the first quarter of fiscal 2006, five pay-per-view events were produced as compared to four events in the prior year quarter. The Company will produce 16 pay-per-view events in fiscal 2006, as compared to 14 events in fiscal 2005. The details for the number of buys (in 000's) are as follows:
Event Q1 FY06 Q1 FY05 ----- -------- --------- Backlash(R) 273 - Judgment Day(R) 236 220ECW One Night Stand(R) / Bad Blood(R) 268 264 Great American Bash(R) 233 233 Vengeance(R) 320 232 Prior period events 115 173 -------- --------- Total 1,445 1,122- Live Event revenues were $16.5 million as compared to $17.9 million in the first quarter of last year.
- There were 70 events during the quarter as compared to 89 events during the same period last year, including 7 international events held in fiscal 2006 as compared to 10 international events held in the prior year.
- The average attendance at the Company's North American live events was approximately 4,600 as compared to approximately 3,800 in the prior year quarter, while the average international attendance was 10,700 as compared to 9,300 in the prior year quarter.
- International events averaged approximately $809,000 in net revenues and approximately $228,000 in profit contribution during the current quarter. This is compared to domestic event net revenues that averaged approximately $172,000 and approximately $33,000 in profit contribution during this same period.
- Television Advertising revenues were $10.4 million as compared to $10.6 million in the prior year quarter. As previously announced, under our new agreement with USA Network, which will be effective October 2005, we will no longer participate in domestic advertising sales.
- Average household ratings for the Company's RAW® program were 3.8 as compared to 3.7 in the prior year quarter and SmackDown® ratings were 3.1 for both the current and the prior year quarter.
- Television Rights Fees revenues were $20.0 million as compared to $19.8 million in the prior year quarter.
Branded Merchandise
Revenues from the Company's Branded Merchandise businesses were $25.2 million versus $16.4 million in the prior year quarter.
- Merchandise revenues were $5.2 million as compared to $3.7 million in the prior year quarter. This increase in revenues is primarily driven by our WWE Shop website with the number of orders more than doubling from the prior year quarter from approximately 15,000 orders to approximately 41,000 orders.
- Home Video revenues were $8.5 million as compared to $5.7 million in the prior year quarter, with 722,000 units sold as compared to 495,000 units sold in the prior year quarter. The increase was due primarily to the release of WrestleMania 21, which sold approximately 202,000 units in the current quarter as compared to WrestleMania XX, which was released in Q4 of fiscal 2004 and sold 60,000 units in the year ago quarter. Other titles released in the quarter included Greatest Wrestling Stars of the 80's, which sold approximately 95,000 units, and The Road Warriors, which sold approximately 84,000 units.
- Licensing revenues were $7.5 million as compared to $3.0 million in the prior year quarter. The increase was due in part to increases in the Toy and Novelties categories, particularly in territories outside
Profit Contribution (revenues less cost of revenues)
Profit contribution for the quarter was $41.3 million as compared to $33.1 million in the prior year quarter. Profit contribution margin was approximately 44% as compared to 41% in the prior year quarter. The profit contribution margin increased in part due to the merchandise and licensing businesses.
Selling, general and administrative expenses
SG&A expenses were $22.2 million as compared to $17.9 million in the prior year quarter. Included in the prior year quarter was a $2.1 million reduction of sales tax expense due to a tax refund. Additionally, the current quarter reflects approximately $1.4 million in severance pay related to certain restructuring plans implemented by the Company.
Fiscal 2006 Outlook
Based on the first quarter results, which exceeded our plan, we have increased our full year forecast as follows: revenues for fiscal 2006 of between $360.0 and $375.0 million, EBI
Note: World Wrestling Entertainment, Inc. will host a conference call on
World Wrestling Entertainment, Inc. (NYSE: WWE - News) 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.
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. All other trademarks are the property of their respective owners.
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; risks relating to maintaining and renewing key agreements, including television distribution agreements; 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 Income Statements (dollars and shares in thousands, except per share data) (Unaudited) Three Months Ended July July 29, 30, 2005 2004
----------------- Net revenues $93,812 $81,551 Cost of revenues 52,501 48,416Selling, general and administrative expenses 22,236 17,875Depreciation and amortization 2,696
2,920Stock compensation costs 579 1,111 -------- -------- Operating income 15,800 11,229 Investment income, net 1,872 1,232Interest expense 152 167Other (expense) income (73) 217 -------- --------Income from continuing operations before income taxes 17,447 12,511 Provision for income taxes 6,269 4,754 -------- -------- Income from continuing operations 11,178 7,757 -------- -------- Income (loss) from discontinued operations, net of taxes 2 (111) -------- -------- Net income $11,180 $7,646 ======== ======== Earnings per share - basic and diluted: Continuing operations $0.16 $0.11 Discontinued operations - - -------- -------- Net income
$0.16 $0.11 ======== ======== Shares used in per share calculations: Basic 68,899 68,691 Diluted 69,627 69,574 World Wrestling Entertainment, Inc. Consolidated Balance Sheets (dollars in thousands) (Unaudited) As of As of July 29, April 30, 2005 2005 ------------------- ASSETS CURRENT ASSETS: Cash and cash
equivalents $74,480 $56,568 Short-term investments 196,837 201,487 Accounts receivable, net 54,352 61,901 Inventory, net 1,285 1,057 Prepaid expenses and other current assets 10,879 15,191 Assets of discontinued operations 415 544 --------- --------- Total current assets 338,248 336,748 PROPERTY AND EQUIPMENT - NET 64,703 66,638 FEATURE FILM PRODUCTION ASSETS 30,723 28,771 INTANGIBLE ASSETS - NET 2,101 2,608 OTHER ASSETS 7,276 6,640 --------- ---------TOTAL ASSETS $443,051 $441,405 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $771 $756 Accounts payable 15,913 15,669 Accrued expenses and other liabilities 21,418 21,151 Deferred income 18,132 20,843 Liabilities of discontinued operations 259 254 --------- --------- Total current liabilities 56,493 58,673 LONG-TERM DEBT 7,000 7,198 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Class A common stock 211 210 Class B common stock 479 479 Additional paid-in capital 256,066 254,716 Accumulated other comprehensive loss (1,083) (908) Retained earnings 123,885 121,037 --------- --------- Total stockholders' equity 379,558 375,534 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $443,051 $441,405 ========= ========= World Wrestling Entertainment, Inc. Consolidated Statements of Cash Flows (dollars in thousands) (Unaudited) Three Months Ended July 29, July 30, 2005 2004 -----------------OPERATING
ACTIVITIES: Net income $11,180 $7,646 Adjustments to reconcile net income to net cash provided by operating activities: (Income) loss from discontinued operations,
net of taxes (2) 111 Revaluation of warrants (639) (212) Depreciation and amortization 2,696 2,920 Realized loss on sales of investments - 338
Amortization of investment income (263) (32) Stock compensation costs &nbs Tags: 
