WWE Entertainment Announces First Quarter Results: Revenues Up 34%, Attributable EBITDA Up 19%, Pro Forma Net Income Up 22%
"We are pleased with the results of the quarter,'' said Linda McMahon, CEO, "and the key drivers of our businesses remain strong. During the quarter we continued to make great strides in our goal to create and build the XFL. We intend to unveil the names and logos of each of the teams shortly. We are also happy to report that in the first quarter of operations for WWE New York, we earned $0.2 million in EBITDA.''
During the quarter the company was able to register solid revenue increases in each of its business segments:
• Revenues in the Live and Televised segment increased 46% to $75.2 million compared to the year ago quarter reflecting double digit growth in Live Events, Pay-Per-View, TV Advertising and Television Rights Fees. Strong TV ratings and increases in pay-per-view buys were the principal drivers together with further expansion in international markets and the continued success of SmackDown! and Raw is War. The average rating for Raw is War was 6.4, retaining its leadership position as the No. 1 regularly scheduled show on cable TV. SmackDown! continued to deliver impressive results with an average broadcast rating of 4.6 for the quarter and remained the No. 1 regularly scheduled show on UPN.
• Branded Merchandise revenues were $26.7 million, an increase of 7% compared to the same period last year. The growth was largely due to increases in Licensing and New Media coupled with the addition of WWE New York, our entertainment complex in New York's Times Square. This was partially offset by lower revenues in Home Video which were impacted by titles that were originally scheduled to be released in the first quarter but which have recently been moved to the second quarter.
The Company continues to build infrastructure in support of its growth and expansion and new business ventures which has led to an increase in SG&A costs on a comparative basis.
1st Quarter Highlights
• WWE closed on a $30 million investment from NBC in conjunction with the previously announced partnership to launch the XFL. As a result, NBC (GE) now owns 3% of WWE.
• WWE and Viacom closed on a previously announced transaction in which Viacom purchased a 3% equity interest in WWE.
• Business Week named WWE as the No. 3 ranked company on its annual list of the 100 best small companies in the United States.
• WWE was added to the Russell 3000 Index which not only increases the visibility of the company but it also provides an opportunity to expand institutional ownership.
• The XFL announced the 8 cities that will host an XFL franchise: New York, Chicago, Los Angeles, Las Vegas, Orlando, San Jose, Memphis, and Birmingham. Key management and coaching positions have been filled and the opening kickoff is slated for February 3, 2001 on NBC.
• WWE launched "Smackdown Your Vote!'' a non-partisan voter registration aimed at the more than 14 million eligible voters in its fan base to inform and encourage participation in the political process. In the first three weeks, approximately 40,000 people have registered to vote. New public service announcements will appear next week on CBS, UPN, and TNN and it marks the first time that WWE superstars have appeared in public service announcements outside of WWE television programming. The campaign is being undertaken in partnership with MTV's Choose or Lose, Youth Vote 2000 and Project Vote Smart.
Forward-Looking Statements: This news release contains forward-looking statements 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, food and beverage, entertainment, professional sports, and licensed merchandise; acceptance of the Company's brands, media and merchandise within those markets; and other risks and factors identified in the Company's Prospectus dated October 18,1999 and other documents filed with the Securities and Exchange Commission. Actual results could differ materially from those currently anticipated.
WWE Entertainment, Inc.
Consolidated Statements of Income
(dollars in thousands, except per share data)
Three Months Ended
July 28, July 30,
Net Revenues 101, 861 76,222
Cost of Revenues 55,069 41,045
Selling, general and
administrative expenses 21,421 14,397 (a)
XFL Start up costs 1,472 -
Depreciation and amortizatio 1,864 659
Operating income 22,035 20,121
Interest income, net and
other income, net 2,335 442
Income before income
taxes and minority interest 24,370 20,563
Provision for income taxes (b) 9,867 8,064 (b)
Income before minority interest 14,503 12,499
Minority interest 736(c) -
Net income $ 15,239 $ 12,499
Earnings per share -
basic and diluted $ 0.22 $ 0.22
Weighted average common and
common equivalent shares
Basic 69,370,189 56,667,000
Diluted 70,362,240 56,667,000
(a) Reflects pro forma adjustments to Selling, General
and Administrative expenses of $427 for the first
quarter ended July 30, 1999 related to compensation to
the Chairman and Chief Executive Officer.
(b) Reflects the company's pro forma provision for
income taxes as if the Company was a C Corporation for
the period presented.
(c) Reflects NBC's minority interest in the XFL.