Exhibit 99.1
[logo]
FOR IMMEDIATE RELEASE
WORLD WRESTLING ENTERTAINMENT(TM) ISSUES Q1 RESULTS,
RAISES EXPECTATIONS FOR FISCAL 2004
Media contact: Gary Davis, 203-353-5066
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Investor contact: Michele Goldstein, 203-352-8642
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STAMFORD, CONN., AUGUST 25, 2003 - World Wrestling Entertainment, Inc.
(NYSE:WWE) today announced financial results for its first quarter ended July
25, 2003. The Company reported income from continuing operations of $2.8
million, or $0.04 per share, versus $3.9 million, or $0.05 per share in the
prior year. Significantly, the Company noted that for the first time in its
recent history, the quarterly results include only two monthly pay-per-view
events. The Company's July event, Vengeance(TM), occurred after the close of the
fiscal first quarter and will result in four events in the fiscal second
quarter. Other than the shift in timing of revenue and profit reporting, there
are no business implications to this occurrence; the Company's schedule of 12
monthly pay- per-view events is unchanged.
"We had a good quarter and exceeded our expectations. Our pay-per-view buys for
the quarter were better than anticipated and our cost-cutting measures initiated
in 2003 produced better profitability than we planned," said Linda McMahon,
WWE(TM) CEO. "I am also excited that our first RAW(R) and SmackDown!(TM)
separately branded pay-per-view events were well received. This is significant
and adds to the strength of the WWE brand. As our results show, the strategy
enhanced our pay-per-view product and international growth. We now expect EBITDA
for fiscal 2004 to be between $42.5 million and $47.5 million, an increase of
$2.5 million."
Total revenues were $74.7 million as compared to $85.4 million in the prior year
quarter. Revenues for the prior year quarter included approximately $5.5 million
related to our July 2002 pay-per-view event.
EBITDA was $5.7 million in the current quarter as compared to $7.0 million in
the prior year quarter. EBITDA for the prior year quarter included $3.1 million
related to the July 2002 pay-per-view event and a $3.5 million favorable
settlement of litigation. Operating income for the quarter was $3.0 million
versus $5.1 million in the prior year quarter. Net income was $2.7 million, or
$0.04 per share, as compared to $2.5 million, or $0.04 per share, in the prior
year quarter.
RESULTS BY BUSINESS SEGMENT
LIVE AND TELEVISED ENTERTAINMENT
Revenues from the Company's Live and Televised businesses were $62.7 million as
compared to $67.8 million in the prior year quarter.
o PAY-PER-VIEW REVENUES were $13.8 million versus $19.0 million in the prior
year quarter. In the first quarter of fiscal 2004, only two pay-per-view
events were produced as compared to three in the prior year quarter, due to
the timing of our quarter end as compared to the air date. The Company will
produce 12 pay-per-view events in fiscal 2004, with 4 events taking place
in its second fiscal quarter.
o Total domestic pay-per-view buys for the quarter were 0.9 million as
compared to 1.1 million in the prior year quarter.
o Overall buys for the two pay-per-view events that aired in the quarter
were equal to the number of buys recorded for the corresponding events
in the prior year quarter.
o Total buys for the Company's July 2003 event, Vengeance, were 275,000.
The event is expected to contribute EBITDA of $2.6 million to the
Company's second fiscal quarter.
o LIVE EVENT REVENUES were $18.1 million as compared to $19.1 million in the
first quarter of last year.
o There were 84 events, including 10 international events, during the
quarter as compared to 87 events, including 4 international events,
during the same period last year.
o The average attendance at the Company's live events was approximately
5,200 as compared to approximately 5,750 in the prior year quarter.
o The average ticket price increased $2.50 to $40.42 for the quarter due
to the increased number of international events, which have higher
average ticket prices.
o TELEVISION ADVERTISING REVENUES were $16.1 million as compared to $16.7
million in the prior year quarter. This decline was principally due to the
impact of lower sponsorship revenues.
o Average household ratings for the quarter for the Company's RAW and
SmackDown! programs were even when compared to the prior year quarter.
o TELEVISION RIGHTS FEES REVENUES increased $1.8 million to $14.7 million due
primarily to the benefit from new contracts and executive producer fees
related to an upcoming feature film starring The Rock(R).
o TELEVISION ADVERTISING REVENUES were $16.1 million as compared to $16.7
million in the prior year quarter. This decline was principally due to the
impact of lower sponsorship revenues.
o Average household ratings for the quarter for the Company's RAW and
SmackDown! programs were even when compared to the prior year quarter.
o TELEVISION RIGHTS FEES REVENUES increased $1.8 million to $14.7 million due
primarily to the benefit from new contracts and executive producer fees
related to an upcoming feature film starring The Rock(R).
BRANDED MERCHANDISE
Revenues from the Company's Branded Merchandise businesses were $12.0 million
versus $17.6 million in the prior year quarter.
o MERCHANDISE REVENUES were $4.3 million as compared to $6.3 million in the
prior year quarter, the decrease due primarily to a 29% reduction in
revenues derived at the Company's live events due to lower attendance and
lower per capita spending.
o PUBLISHING REVENUES decreased $1.8 million to $1.7 million due to a
decrease in newsstand units sold and one less special magazine published in
the quarter as compared to the prior year quarter.
o HOME VIDEO REVENUES were $2.5 million as compared to $3.5 million in the
prior year quarter, the decrease due primarily to a decrease in units sold.
Sales of catalog titles released in the prior year were down 69% while new
title releases were 21% ahead of the year ago quarter. The reduction in
catalog units was related to a court ordered injunction prohibiting the
sale of such titles containing the Company's former logo.
o LICENSING REVENUES decreased $0.9 million to $2.2 million due to a decrease
in video game and toy sales reflecting heightened competition for licensed
products and a contraction in the number of retail outlets.
PROFIT CONTRIBUTION (NET REVENUES LESS COST OF REVENUES)
Profit contribution for the quarter was $25.4 million as compared to $28.8
million in the prior year quarter. Total profit contribution margin was
approximately 34% for both periods.
The profit contribution margin for the Live and Televised businesses was
approximately 34% for both periods. The impact of airing one less pay-per-view
event was offset by increased television rights fees and decreased television
production costs.
The profit contribution margin for the Branded Merchandise businesses was
approximately 34% for both periods.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses decreased by $2.1 million for the quarter to $19.7 million as
compared to $21.8 million in the prior year quarter. Included in the prior year
was a favorable litigation settlement of $3.5 million. Reflected in the current
quarter was a reduction in bad debt expense of $2.0 million as a result of a
payment received from a pay-per-view service that was fully reserved for in the
prior year. Excluding these items, SG&A expenses decreased by $3.6
million as compared to the prior year quarter due primarily to lower advertising
and promotion expenses and the impact of the cost cutting measures taken
during fiscal 2003.
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 $42.5 and $47.5
million and Income from continuing operations will be between $23.0 and $26.0
million, or between $0.34 and $0.38 per share.
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.
EDITOR'S NOTE: World Wrestling Entertainment, Inc. will host a conference call
on Tuesday, August 26, 2003, at 11:00 a.m. ET to discuss the Company's first
quarter earnings results for fiscal year 2004. All interested parties can access
the conference call by dialing 800-362-0574 (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.
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 Income
(dollars in thousands, except per share data)
(Unaudited)
THREE MONTHS ENDED
JULY 25, JULY 26,
2003 2002
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Net revenues $ 74,675 $ 85,449
Cost of revenues 49,261 56,618
Selling, general and administrative expenses 19,719 21,787
Depreciation and amortization 2,724 1,992
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Operating income 2,971 5,052
Interest income and other, net 1,520 929
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Income before income taxes 4,491 5,981
Provision for income taxes 1,683 2,126
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Income from continuing operations 2,808 3,855
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Discontinued operations:
Loss from discontinued operations, net of tax (158) (1,327)
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Net income $ 2,650 $ 2,528
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Earnings (loss) per common share - Basic and Diluted:
Continuing operations $ 0.04 $ 0.05
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Discontinued operations $ -- $ (0.02)
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Net income $ 0.04 $ 0.04
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Weighted average common and common equivalent shares outstanding:
Basic 69,045,995 71,110,001
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Diluted 69,154,113 71,129,655
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WORLD WRESTLING ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(Unaudited)
AS OF AS OF
JULY 25, APRIL 30,
2003 2003
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 117,237 $ 128,473
Short-term investments 145,760 142,641
Accounts receivable, net 35,565 49,729
Inventory, net 903 839
Prepaid expenses and other current assets 17,438 18,443
Assets of discontinued operations 20,953 21,129
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Total current assets 337,856 361,254
PROPERTY AND EQUIPMENT - NET 57,842 59,325
INTANGIBLE ASSETS - NET 13,373 12,055
OTHER ASSETS 4,547 4,623
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TOTAL ASSETS $ 413,618 $ 437,257
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 791 $ 777
Accounts payable 12,767 14,188
Accrued expenses and other liabilities 38,185 34,991
Deferred income 20,230 24,662
Liabilities of discontinued operations 10,299 11,554
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TOTAL CURRENT LIABILITIES 82,272 86,172
LONG-TERM DEBT 8,933 9,126
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Class A common stock 182 182
Class B common stock 548 548
Treasury stock (49,815) (30,569)
Additional paid-in capital 297,473 297,315
Accumulated other comprehensive (loss) income (121) 243
Retained earnings 74,146 74,240
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Total stockholders' equity 322,413 341,959
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 413,618 $ 437,257
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WORLD WRESTLING ENTERTAINMENT, INC.
Consolidated Statements of Cash Flows
(dollars in thousands)
(Unaudited)
THREE MONTHS ENDED
JULY 25, JULY 26,
2003 2002
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OPERATING ACTIVITIES:
Net income $ 2,650 $ 2,528
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Loss from discontinued operations 158 1,327
Depreciation and amortization 2,724 1,992
Amortization of deferred income (335) (318)
Amortization of deferred compensation costs 158 --
Provision for doubtful accounts (1,976) 463
Provision for inventory obsolescence (128) 314
Changes in assets and liabilities:
Accounts receivable 16,141 12,498
Inventory 64 162
Prepaid expenses and other assets 993 382
Accounts payable (1,420) (4,882)
Accrued expenses and other liabilities 3,515 2,630
Deferred income (4,097) (961)
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Net cash provided by continuing operations 18,447 16,135
Net cash used in discontinued operations (1,236) (3,977)
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Net cash provided by operating activities 17,211 12,158
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INVESTING ACTIVITIES:
Purchase of property and equipment (980) (1,266)
Purchase of other assets (1,487) --
Purchase of short-term investments, net (3,811) (828)
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Net cash used in continuing operations (6,278) (2,094)
Net cash used in discontinued operations -- (895)
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Net cash used in investing activities (6,278) (2,989)
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FINANCING ACTIVITIES:
Repayment of long-term debt (158) (147)
Obligation under capital lease agreement (21) --
Purchase of treasury stock, net of treasury stock reissued (19,246) (27,693)
Dividends paid (2,744) --
Net proceeds from exercise of stock options -- 404
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Net cash used in continuing operations (22,169) (27,436)
Net cash provided by discontinued operations -- 322
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Net cash used in financing activities (22,169) (27,114)
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NET DECREASE IN CASH AND CASH EQUIVALENTS (11,236) (17,945)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 128,473 86,396
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 117,237 $ 68,451
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WORLD WRESTLING ENTERTAINMENT, INC.
Supplemental Information - EBITDA
(dollars in thousands)
(Unaudited)
THREE MONTHS ENDED
JULY 25, JULY 26,
2003 2002
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Net income reported on GAAP basis $ 2,650 $ 2,528
Loss from discontinued operations 158 1,327
Provision for income taxes 1,683 2,126
Interest income and other, net (1,520) (929)
Depreciation and amortization 2,724 1,992
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EBITDA $ 5,695 $ 7,044
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