Company Release – 05/05/2011 08:30
STAMFORD, Conn.–(BUSINESS WIRE)– WWE (NYSE:WWE) today announced financial results for its first quarter ended March 31, 2011. Revenues totaled $119.9 million as compared to $138.7 million in the prior year quarter. Operating income was $13.2 million as compared to $37.3 million in the prior year quarter. Net income was $8.6 million, or $0.11 per share, as compared to $24.7 million, or $0.33 per share in the prior year quarter. There were several items that impacted comparability, primarily the timing of our annual WrestleMania® event and a $2.8 million film impairment charge. Excluding these items, revenues in the current quarter totaled $119.9 million, adjusted operating income was $17.4 million and adjusted net income was $11.2 million, or $0.15 per share. In the prior year quarter, revenues totaled $109.9 million, adjusted operating income was $22.6 million and adjusted net income was $14.7 million, or $0.20 per share.
“Our first quarter adjusted EBITDA declined 20% reflecting mixed performance from our business lines, including the impact of the ongoing transition in our talent base, and an increase in SG&A expenses. While we understand the lead time required to develop new characters with broad appeal, we were disappointed with our financial performance and our management team is working on addressing these challenges,” stated Vince McMahon, Chairman and Chief Executive Officer. “Looking ahead, we are optimistic about our longer-term opportunities to leverage our strength as the ‘New WWE’. We are pleased with the strong performance of WrestleMania, which is expected to deliver a 30% increase in domestic pay-per-view buys and reach more than one million buys globally. Further, the successful launch of our new program, Tough Enough showcases the power of our branded programming. We believe the recent adjustment in our dividend will enhance our flexibility to create and monetize new content, to distribute that content on a variety of existing and emerging media platforms and to execute our ‘New WWE’ initiative.”
Comparability of Results
The current quarter results reflected $1.4 million in marketing expense to promote WrestleMania XXVII, which occurred within our second quarter on April 3, 2011. In addition, the current quarter included a $2.8 million impairment charge related to our film, 12 Rounds. WrestleManiaXXVI occurred on March 28, 2010 and was included as part of our first quarter results in 2010. WrestleManiaXXVI contributed approximately $28.8 million of revenues, $13.1 million of profit contribution ($8.8 million, net of tax) and $0.12 of EPS from across our various business lines in the prior year quarter. The Q1 2010 results also reflected an infrastructure tax incentive which reduced depreciation and amortization expense by $1.6 million.
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