First Quarter 2023
Highlights
- Revenue was $297.6 million; Operating income was $53.1 million;
and Adjusted OIBDA1 was $84.2 million
- Returned $8.9 million of capital to shareholders through
dividend payments
- Each WWE premium live event (Royal Rumble and Elimination
Chamber) set domestic unique viewership records with year-over-year
increases of 52% and 54%, respectively
- Viewership for WWE’s weekly flagship programs, Raw and
SmackDown, both increased 7%, significantly outperforming overall
cable and broadcast television, which declined 15% and 6%,
respectively
- North American Live Events ticket sales revenue increased 52%
over the prior year period, reflecting a 37% increase in average
attendance
- In April, WWE announced an expansion of its partnership with
Fanatics, with Fanatics assuming management of WWE’s on-site event
merchandise business as of May 1, 2023
WrestleMania Highlights (April 1-2, 2023)
- WrestleMania was held at SoFi Stadium in Los Angeles over two
consecutive nights in front of a combined 161,892 fans and
generating a gate of $21.6 million. WrestleMania was WWE’s
highest-grossing and most-attended event in company history
- WrestleMania was the most viewed WWE premium live event of all
time. Global unique viewership increased 29% and domestic unique
viewership increased 31% year-over-year
- WrestleMania sponsorship revenue exceeded $20 million, more
than double the previous record set in the prior year
- WrestleMania was the most social WWE event of all-time,
generating over 500 million views and 11 million hours of video
consumed over the two days, a 42% increase over the prior year
- WrestleMania merchandise sales increased 20% versus the
previous record set in the prior year
WWE and Endeavor Transaction
Highlights
- As previously disclosed, on April 3, 2023, WWE and Endeavor
announced an agreement to combine WWE and UFC to form a new,
publicly listed company. Upon close, Endeavor will hold a 51%
controlling interest and existing WWE shareholders will hold a 49%
interest in the new company
- The transaction values UFC at an enterprise value of $12.1
billion and WWE at an enterprise value of $9.3 billion. The
transaction represents a contribution price of WWE of approximately
$106 per share (before any post-closing dividend)
- Following the closing, the new public company, in which WWE
shareholders will initially hold 100% of the economic interest, is
expected to issue a post-closing dividend consisting of excess cash
at WWE
- The transaction is expected to close in the second half of
2023. The transaction is subject to the satisfaction of customary
closing conditions, including receipt of required regulatory
approvals
2023 Business Outlook2
- The Company reaffirms its expectations for 2023, which target
record revenue and an Adjusted OIBDA range of $395 to $410 million,
which would be an all-time record
WWE (NYSE: WWE) today announced financial results for its first
quarter ended March 31, 2023.
“We are off to a strong start in 2023. Operationally, we
continue to effectively execute our strategy, including staging the
most successful WrestleMania of all time in early April.
WrestleMania, as well as our other successful premium live events
such as Royal Rumble and Elimination Chamber, and strong viewership
for our weekly flagship programs, Raw and SmackDown, further
expanded the reach of our brands and enhanced the value of our
content,” said Nick Khan, WWE Chief Executive Officer.
“Strategically, we entered into a historic agreement with Endeavor
to create a one-of-a-kind company. With WWE and UFC we intend to
form a global sports and entertainment business that has the
potential to unlock vast growth opportunities for both businesses.
We believe that bringing these two iconic and highly complementary
brands together will allow us to increasingly capitalize on the
rapidly expanding, global appetite for live sports events and
premium entertainment content, with the goal being to maximize
value for our shareholders.”
Frank Riddick, WWE President & Chief Financial Officer,
added “In the quarter, we exceeded the high end of our guidance.
Adjusted OIBDA was $84 million on revenue of $298 million. Our
financial performance was primarily driven by the contractual
escalation of media rights fees for our flagship weekly programming
and strong consumer demand for our live events. Our results in the
quarter were also impacted by a shift in the timing of the staging
of a large-scale international event.”
First-Quarter Consolidated
Results
Revenue decreased 11%, or $35.8 million, to $297.6
million, primarily due to a shift in the timing of the staging of a
large-scale international event, which occurred in the first
quarter of 2022 but is expected to occur in the second quarter of
2023. This decrease was partially offset by an increase in revenue
related to the contractual escalation of media rights fees for the
Company’s flagship weekly programming, Raw and SmackDown, and
higher North American ticket sales.
Operating Income decreased 43%, or $39.3 million, to
$53.1 million, reflecting the decrease in revenue and relatively
flat operating expenses. Operating expenses primarily reflected a
decrease in production costs related to the timing of the Company’s
premium live events essentially offset by the impact of certain
costs related to the Company’s strategic alternatives review and
recently announced agreement with Endeavor. (See the “WWE and
Endeavor Transaction” discussion for further details.) The
Company’s operating income margin decreased to 18% from 28%.
Adjusted OIBDA decreased 25%, or $27.5 million, to $84.2
million. The Company’s Adjusted OIBDA margin decreased to 28% from
34%.
Net Income was $36.7 million, or $0.43 per diluted share,
a decrease from $66.1 million, or $0.77 per diluted share,
primarily reflecting the decrease in operating performance and an
increase in the Company’s effective tax rate.
Cash flows generated by operating activities were $12.6
million, a decrease from $93.8 million, primarily due to lower net
income and higher working capital requirements.
Free Cash Flow3 was an outflow of $20.6 million, a
decrease of $90.3 million from an inflow of $69.7 million,
primarily due to the decline in cash flows generated by operating
activities and higher capital expenditures. For the three months
ended March 31, 2023, the Company incurred $29.6 million of capital
expenditures related to its new headquarter facility. Excluding the
capital expenditures related to the new headquarter facility, Free
Cash Flow for the three months ended March 31, 2023 was $9.0
million.
Cash, cash equivalents and short-term investments were
$465.3 million as of March 31, 2023. The Company currently
estimates debt capacity under its revolving line of credit
of $200 million.
Results by Operating
Segment
The schedule below reflects WWE’s performance by operating
segment (in millions):
Three Months Ended
March 31,
2023
2022
Net Revenue:
Media
$
225.7
$
278.1
Live Events
32.6
23.1
Consumer Products
39.3
32.2
Total Net Revenue
$
297.6
$
333.4
Operating Income (Loss):
Media
$
73.6
$
117.4
Live Events
6.1
2.0
Consumer Products
21.4
11.2
Corporate
(48.0
)
(38.2
)
Total Operating Income
$
53.1
$
92.4
Adjusted OIBDA:
Media
$
87.8
$
128.2
Live Events
7.0
2.8
Consumer Products
22.2
11.9
Corporate
(32.8
)
(31.2
)
Total Adjusted OIBDA
$
84.2
$
111.7
Media
First-Quarter 2023
Revenue decreased 19%, or $52.4 million, to $225.7
million, primarily due to a shift in the timing of the staging of a
large-scale international event, which occurred in the first
quarter of 2022 but is expected to occur in the second quarter of
2023. Results also reflected an increase in revenue related to the
contractual escalation of media rights fees for the Company’s
flagship weekly programming, Raw and SmackDown, and a decrease in
Network revenue related to the timing of premium live events.
Three Months Ended
March 31,
2023
2022
Media Revenue:
Network (a)
$
51.4
$
58.7
Core content rights fees (b)
153.9
139.1
Advertising and sponsorship (c)
15.6
19.8
Other (d)
4.8
60.5
Total Revenue
$
225.7
$
278.1
(a)
Network revenue consists primarily of
license fees from the global distribution of WWE Network content
associated with our licensed partner agreements.
(b)
Core content rights fees consist primarily of licensing
revenue from the distribution of our flagship programs, Raw and
SmackDown, as well as NXT programming, through global broadcast,
pay television and digital platforms.
(c)
Advertising and sponsorship revenue within the Media segment
consists primarily of advertising revenue from the Company’s
content on third-party social media platforms and sponsorship fees
from sponsors who promote products utilizing the Company’s media
platforms, including promotion on the Company’s digital websites
and on-air promotional media spots.
(d)
Other revenue within the Media segment reflects revenue from
the distribution of other WWE content, including, but not limited
to, certain live in-ring programming content in international
markets, scripted, reality and other programming.
Operating income decreased 37%, or $43.8 million, to
$73.6 million, as the decrease in revenue (as described above) was
partially offset by a decrease in operating expenses. The decrease
in operating expenses primarily reflected a decrease in production
costs related to the timing of the Company’s premium live
events.
Adjusted OIBDA decreased 32%, or $40.4 million, to $87.8
million.
Live Events
First-Quarter 2023
Revenue increased 41%, or $9.5 million, to $32.6 million,
primarily due to an increase in North American ticket sales as a
result of increases in both average attendance and average ticket
price. There were 50 total ticketed live events in the current
quarter, consisting of 50 events in North America and no events in
international markets. Average attendance at the Company’s North
America events was approximately 7,850. In the prior year period,
the Company staged 53 total ticketed live events, consisting of 52
events in North America and one event in an international market.
Average attendance at the Company’s North America events was
approximately 5,710.
Three Months Ended
March 31,
2023
2022
Live Events Revenue:
North American ticket sales
$
30.2
$
19.9
International ticket sales
—
—
Advertising and sponsorship (e)
1.0
1.1
Other (f)
1.4
2.1
Total Revenue
$
32.6
$
23.1
(a)
Advertising and sponsorship revenue within
the Live Events segment consists primarily of fees from advertisers
and sponsors that promote products utilizing the Company’s live
events (i.e., presenting sponsor of fan engagement events and
advertising signage at events).
(b)
Other revenue within the Live Events
segment reflects revenue from the sale of travel packages
associated with the Company’s global live events, commissions
earned through secondary ticketing, and revenue from events for
which the Company receives a fixed fee.
Operating income increased $4.1 million, to $6.1 million,
as the increase in revenues (as described above) was partially
offset by an increase in event-related expenses.
Adjusted OIBDA increased 150%, or $4.2 million, to $7.0
million.
Consumer Products
First-Quarter 2023
Revenue increased 22%, or $7.1 million, to $39.3 million,
reflecting an increase in licensing and venue merchandise revenue
partially offset by a decrease in eCommerce revenue. Licensing
revenue primarily reflected an increase in collectibles revenue and
relatively flat video gaming revenue. During the quarter,
approximately $6 million in revenue was recorded as a result of the
early termination of an agreement for our licensed collectibles.
Venue merchandise revenue increased due to both an increase in
average attendance and average per capita sales. The year-over-year
change in eCommerce revenue reflected the previously disclosed
transition of our digital retail platform to Fanatics.
Three Months Ended
March 31,
2023
2022
Consumer Products Revenue:
Consumer product licensing
$
26.8
$
20.0
eCommerce
3.8
7.7
Venue merchandise
8.7
4.5
Total Revenue
$
39.3
$
32.2
Operating income increased 91%, or $10.2 million, to
$21.4 million, primarily reflecting the increase in revenue (as
described above) and a decrease in operating expenses. The decrease
in operating expenses was primarily due to lower expenses related
to the transition of eCommerce operations to Fanatics.
Adjusted OIBDA increased 87%, or $10.3 million, to $22.2
million.
2023 Business Outlook2 In
February, the Company issued its outlook for 2023 Adjusted OIBDA.
The Company reaffirms its expectations for 2023 Adjusted OIBDA in
the range of $395 - $410 million, which would be an all-time record
result. The Company also reaffirms its expectation to generate
record revenue in 2023. This anticipated performance reflects an
expected increase in media rights fees for the Company’s flagship
weekly programming and premium live events, as well as a full live
events touring schedule, including two large-scale international
events, and an increase in advertising and sponsorship revenues.
The Company anticipates that 2023 operating expenses will be
relatively flat as an increase in costs to support the creation of
content are substantially offset by a decline in eCommerce and
venue merchandise expenses, as a result of the transition of the
Company’s digital retail platform and venue merchandise business to
Fanatics, as well as a decline in third-party original programming
expenses, due to the timing of the production of premium WWE-themed
series and specials.
Second Quarter 2023 Business
Outlook2 The Company estimates second quarter 2023
Adjusted OIBDA of $125 - $135 million, which represents an increase
of approximately 37% - 48% from the prior year quarter. The
estimate reflects the favorable impact of a shift in the timing of
the staging of a large-scale international event and the
contractual escalation of domestic media rights fees for the
Company’s flagship programs and premium live events. The Company
also anticipates that second quarter results will reflect an
increase in operating expenses, including certain costs to support
the creation of content.
Return of Capital to
Shareholders The Company returned $8.9 million of
capital to shareholders in dividends in the first quarter of 2023.
There were no share repurchases under the Company’s existing stock
repurchase program in the first quarter of 2023. Under the
Company’s existing stock repurchase program, approximately 5.3
million shares have been repurchased to-date at an average price of
$54.09 per share. As of March 31, 2023, the Company had $211
million available under its existing $500 million stock repurchase
authorization. As a result of the transaction with Endeavor (see
the “WWE and Endeavor Transaction” discussion for further details),
the Company currently has no plans to resume the program.
WWE and Endeavor Transaction
As previously disclosed, in January, Vincent K. McMahon, the
Company’s Executive Chairman and shareholder with a controlling
interest, in cooperation with WWE’s management team and Board of
Directors, announced the intent to undertake a review of strategic
alternatives with the goal of maximizing value for all WWE
shareholders. On April 3, 2023, WWE and Endeavor Group Holdings,
Inc. (“Endeavor”) announced an agreement to combine WWE and
Ultimate Fighting Championship (“UFC”) to form a new, publicly
listed company. Upon close, Endeavor will hold a 51% controlling
interest and existing WWE shareholders will hold a 49% interest in
the new company. The transaction values UFC at an enterprise value
of $12.1 billion and WWE at an enterprise value of $9.3 billion.
The transaction represents a contribution price of WWE of
approximately $106 per share (before any post-closing dividend).
Pursuant to the transaction agreement, at closing, WWE will
distribute its excess cash to the new public company. Following the
closing, the new public company may determine to dividend such
excess cash to its shareholders. The transaction is expected to
close in the second half of 2023. The transaction is subject to the
satisfaction of customary closing conditions, including receipt of
required regulatory approvals. As a result of the agreement with
Endeavor, the review of strategic alternatives has been concluded.
For the three-month period ended March 31, 2023, the Company’s
consolidated pre-tax results included $6.7 million of expenses
related to the strategic alternatives review and agreement with
Endeavor.
Principal Stockholder
Transactions During the three months ended March 31,
2023, the Company incurred $1.7 million of expenses paid by Mr.
McMahon for plaintiffs’ attorneys’ fees in connection with a
shareholder lawsuit that was mooted. Other shareholder litigation
remains ongoing as described in footnote 18 Commitments and
Contingencies of the Company’s Form 10-Q. Additionally, during the
three months ended March 31, 2023, Mr. McMahon made a payment of
$17.4 million to reimburse the Company for the costs that have been
incurred and paid by the Company, through January 31, 2023, in
connection with and/or arising from the investigation conducted by
the Special Committee, related revisions to the Company’s financial
statements and other related matters. Please see the Company’s SEC
filings, including, but not limited to, its annual report on Form
10-K and quarterly reports on Form 10-Q for further details and
ongoing risks regarding this matter.
Notes
- The definition of Adjusted OIBDA can be found in the Non-GAAP
Measures section of the release on page 8. A reconciliation of
Operating Income to Adjusted OIBDA for the three-month periods
ended March 31, 2023 and 2022 can be found in the Supplemental
Information in this release on page 15.
- The Company’s business model and expected results will continue
to be subject to significant execution and other risks, including
risks related to the consummation of the pending business
combination with UFC in the expected timeline or at all; risks
relating to the Special Committee investigation and related matters
noted above; the impact of COVID-19 on WWE’s business, results of
operations and financial condition; entering, maintaining and
renewing major distribution agreements; WWE Network; uncertainties
associated with international markets and risks inherent in large
live events, and other risk factors disclosed in our annual report
on Form 10-K for the year ended December 31, 2022. In addition, WWE
is unable to provide a reconciliation of second quarter or full
year 2023 guidance to GAAP measures as, at this time, WWE cannot
accurately determine all of the adjustments that would be required.
See Supplemental Information in this release on page 16.
- A reconciliation of three-month periods ended March 31, 2023
and 2022 Net cash provided by operating activities to Free Cash
Flow can be found in the Supplemental Information in this release
on page 17.
Non-GAAP Measures
The Company defines Adjusted OIBDA as operating income
excluding depreciation and amortization, stock-based compensation
expense, certain impairment charges and other non-recurring items
that management deems would impact the comparability of results
between periods. Adjusted OIBDA includes amortization and
depreciation expenses directly related to supporting the operations
of our segments, including content production asset amortization,
depreciation and amortization of costs related to content delivery
and technology assets utilized for the WWE Network, as well as
amortization of right-of-use assets related to finance leases of
equipment used to produce and broadcast our live events. The
Company believes the presentation of Adjusted OIBDA is relevant and
useful for investors because it allows them to view the Company’s
segment performance in the same manner as the primary method used
by management to evaluate segment performance and to make decisions
regarding the allocation of resources. Additionally, the Company
believes that Adjusted OIBDA is a primary measure used by media
investors, analysts and peers for comparative purposes.
Adjusted OIBDA is a non-GAAP financial measure and may be
different from similarly titled non-GAAP financial measures used by
other companies. WWE views operating income as the most directly
comparable GAAP measure. Adjusted OIBDA (and other non-GAAP
measures such as Adjusted Operating Income, Adjusted Net
Income and Adjusted EPS which are defined as the GAAP
measures excluding certain nonrecurring, material items that impact
the comparability between periods) should not be considered in
isolation from, or as a substitute for, operating income, net
income, EPS or other GAAP measures, such as operating cash flow, as
an indicator of operating performance or liquidity.
The Company defines Free Cash Flow as net cash provided
by operating activities less cash used for capital expenditures.
WWE views net cash provided by operating activities as the most
directly comparable GAAP measure. Although it is not a recognized
measure of liquidity under U.S. GAAP, Free Cash Flow provides
useful information regarding the amount of cash WWE’s continuing
business generates after capital expenditures and is available for
reinvesting in the business, debt service, share repurchases and
payment of dividends.
Additional Information As
previously announced WWE will host a conference call at 8:30 a.m.
ET on May 3, 2023, to discuss its first quarter 2023 results. All
interested parties are welcome to listen to a live webcast that
will be hosted through the Company’s website at corporate.wwe.com/investors. Participants can
access the conference call by dialing 1-855-200-4993 (toll free) or
1-323-794-2092 from outside the U.S. (conference ID for both lines:
7356182). Please reserve a line 5-10 minutes prior to the start
time of the conference call.
The earnings presentation referenced during the call will be
made available on May 3, 2023, at corporate.wwe.com/investors. A replay of the call
will be available approximately two hours after the conference call
concludes and can be accessed on the Company’s website.
Additional business metrics are made available to investors on
the corporate website - corporate.wwe.com/investors.
About WWE WWE, a publicly
traded company (NYSE: WWE), is an integrated media organization and
recognized leader in global entertainment. The Company consists of
a portfolio of businesses that create and deliver original content
52 weeks a year to a global audience. WWE is committed to
family-friendly entertainment on its television programming,
premium live events, digital media, and publishing platforms. WWE’s
TV-PG programming can be seen in more than 1 billion homes
worldwide in 25 languages through world-class distribution partners
including NBCUniversal, FOX Sports, BT Sport, Sony India and
Rogers. The award-winning WWE Network includes all premium live
events, scheduled programming and a massive video-on-demand library
and is currently available in more than 180 countries. In the
United States, NBCUniversal’s streaming service, Peacock, is the
exclusive home to WWE Network.
Additional information on WWE can be found at wwe.com and corporate.wwe.com.
Trademarks: All WWE programming,
talent names, images, likenesses, slogans, wrestling moves,
trademarks, logos and copyrights are the exclusive property of WWE
and its subsidiaries. All other trademarks, logos and copyrights
are the property of their respective owners.
Forward-Looking Statements: This
press release contains, and oral statements made from time to time
by our representatives may contain, forward-looking statements
pursuant to the safe harbor provisions of the Securities Litigation
Reform Act of 1995. Forward looking statements include statements
regarding our outlook regarding future financial results, the
impact of recent changes to management and our board of directors
(the “Board”); the timing and outcome of the Company’s media and
other rights negotiations including major domestic programming
licenses expected to be negotiated in 2023; the Company’s pending
business combination with UFC; our plans to remediate identified
material weaknesses in our disclosure control and procedures and
our internal control over financial reporting; and regulatory,
investigative or enforcement inquiries, subpoenas or demands
arising from, related to, or in connection with these matters. The
words “may,” “will,” “could,” “anticipate,” “plan,” “continue,”
“project,” “intend,” “estimate,” “believe,” “expect,” “outlook,”
“target,” “goal,” “guidance” and similar expressions are intended
to identify forward-looking statements, although not all
forward-looking statements contain such words. These statements
relate to future possible events, as well as our plans, objectives,
expectations and intentions and are not historical facts and
accordingly involve known and unknown risks and uncertainties and
other factors that may cause the actual results or the performance
by us to be materially different from expected future results or
performance expressed or implied by any forward-looking
statements.
These forward-looking statements are subject to uncertainties
relating to, without limitation, the impact of actions by Mr.
McMahon (who has a controlling interest in the Company due to his
ownership of a substantial majority of our Class B common stock and
whose interests could conflict with those of our Class A common
stockholders), as well as the consummation of the pending business
combination with UFC in the expected timeline or at all, in each
case which could have adverse financial and operational
impacts.
The following additional factors, among others, could cause
actual results to differ materially from those contained in
forward-looking statements: diversion of management’s time and
attention due to the pending business combination with UFC; the
possibility that neither WWE nor Endeavor will have sufficient cash
at close to distribute to shareholders of the new public company
(or that the amount of cash available for distribution will be less
than what the parties expect); COVID-19, which may continue to
affect negatively world economies as well as our industry, business
and results of operations; a rapidly evolving and highly
competitive media landscape; WWE Network; computer systems, content
delivery and online operations of our Company and our business
partners; privacy norms and regulations; our need to continue to
develop creative and entertaining programs and events; our need to
retain and continue to recruit key performers; the possibility of a
decline in the popularity of our brand of sports entertainment;
possible adverse changes in the regulatory atmosphere and related
private sector initiatives; the highly competitive, rapidly
changing and increasingly fragmented nature of the markets in which
we operate and/or our inability to compete effectively, especially
against competitors with greater financial resources or marketplace
presence; uncertainties associated with international markets
including possible disruptions and reputational risks; our
difficulty or inability to promote and conduct our live events
and/or other businesses if we do not comply with applicable
regulations; our dependence on our intellectual property rights,
our need to protect those rights, and the risks of our infringement
of others’ intellectual property rights; potential substantial
liability in the event of accidents or injuries occurring during
our physically demanding events; large public events as well as
travel to and from such events; our expansion into new or
complementary businesses, strategic investments and/or
acquisitions; our accounts receivable; the construction and move to
our new leased corporate and media production headquarters;
litigation and other actions, investigations or proceedings; a
change in the tax laws of key jurisdictions; inflationary pressures
and interest rate changes; our indebtedness including our
convertible notes; our potential failure to meet market
expectations for our financial performance; our share repurchase
program; a substantial number of shares are eligible for sale by
the McMahons and the sale, or the perception of possible sales, of
those shares could cause our stock price to decline; and the
volatility in trading prices of our Class A common stock. In
addition, our dividend and share repurchases are dependent on a
number of factors, including, among other things, our liquidity and
historical and projected cash flow, strategic plan (including
alternative uses of capital), our financial results and condition,
contractual and legal restrictions, general economic and
competitive conditions and such other factors as our Board may
consider relevant.
Forward-looking statements made by the Company speak only as of
the date made and are subject to change without any obligation on
the part of the Company to update or revise them. Undue reliance
should not be placed on these statements. For more information
about risks and uncertainties associated with the Company’s
business, please refer to any documents filed, or to be filed, by
the Company with the SEC, including, but not limited to, the
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and “Risk Factors” sections of our annual
reports on Form 10-K and 10-K/A and quarterly reports on Form
10-Q/A and Form 10-Q.
World Wrestling Entertainment,
Inc.
Consolidated Income
Statements
(In millions, except per share
data)
(Unaudited)
Three Months Ended
March 31,
2023
2022
Net revenues
$
297.6
$
333.4
Operating expenses
175.6
180.7
Marketing and selling expenses
16.4
18.4
General and administrative expenses
43.5
32.2
Depreciation and amortization
9.0
9.7
Operating income
53.1
92.4
Interest expense
4.3
6.3
Other income, net
2.5
0.3
Income before income taxes
51.3
86.4
Provision for income taxes
14.6
20.3
Net income
$
36.7
$
66.1
Earnings per share:
Basic
$
0.49
$
0.88
Diluted
$
0.43
$
0.77
Weighted average common shares
outstanding:
Basic
74.4
74.8
Diluted
89.3
87.6
Dividends declared per common share (Class
A and B)
$
0.12
$
0.12
World Wrestling Entertainment,
Inc.
Consolidated Balance
Sheets
(In millions)
(Unaudited)
As of
March 31,
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
197.6
$
220.2
Short-term investments, net
267.7
258.5
Accounts receivable, net
103.3
112.4
Inventory
4.0
2.9
Prepaid expenses and other current
assets
66.7
33.2
Total current assets
639.3
627.2
Property and equipment, net
352.7
329.1
Finance lease right-of-use assets, net
296.4
296.6
Operating lease right-of-use assets,
net
15.3
16.3
Content production assets, net
17.1
16.5
Investment securities
11.8
11.8
Deferred income tax assets, net
42.6
45.6
Other assets, net
11.5
12.5
Total assets
$
1,386.7
$
1,355.6
Liabilities and Stockholders'
Equity
Current liabilities:
Current portion of long-term debt
$
0.5
$
0.4
Finance lease liabilities
11.6
11.7
Operating lease liabilities
3.3
3.6
Convertible debt
214.3
214.1
Accounts payable and accrued expenses
98.8
122.9
Deferred revenues
67.4
79.8
Total current liabilities
395.9
432.5
Long-term debt
20.7
20.8
Finance lease liabilities
365.9
364.9
Operating lease liabilities
12.5
13.2
Other non-current liabilities
5.0
7.0
Total liabilities
800.0
838.4
Commitments and contingencies
Stockholders' equity:
Class A common stock
0.4
0.4
Class B convertible common stock
0.3
0.3
Additional paid-in capital
464.7
424.0
Accumulated other comprehensive income
1.2
0.2
Retained earnings
120.1
92.3
Total stockholders’ equity
586.7
517.2
Total liabilities and stockholders'
equity
$
1,386.7
$
1,355.6
World Wrestling Entertainment,
Inc.
Consolidated Statements of
Cash Flows
(In millions)
(Unaudited)
Three Months Ended
March 31,
2023
2022
OPERATING ACTIVITIES:
Net income
$
36.7
$
66.1
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization and impairments of content
production assets
2.5
9.8
Depreciation and amortization
10.7
12.0
Other amortization
2.7
3.5
Stock-based compensation
13.7
9.6
Benefit from deferred income taxes
2.8
0.3
Other non-cash adjustments
2.1
0.3
Cash provided by (used in) changes in
operating assets and liabilities:
Accounts receivable
8.8
3.4
Inventory
(1.0)
(0.9)
Prepaid expenses and other assets
(30.5)
1.3
Content production assets
(3.1)
(11.7)
Accounts payable, accrued expenses and
other liabilities
(20.5)
(9.2)
Deferred revenues
(12.3)
9.3
Net cash provided by operating
activities
12.6
93.8
INVESTING ACTIVITIES:
Purchases of property and equipment and
other assets
(33.2)
(24.1)
Purchases of short-term investments
(81.2)
(111.6)
Proceeds from sales and maturities of
investments
73.0
47.4
Purchase of investment securities
—
—
Other
—
4.3
Net cash used in investing activities
(41.4)
(84.0)
FINANCING ACTIVITIES:
Repayment of debt
(0.1)
(0.1)
Repayment of finance leases
(3.9)
(3.4)
Dividends paid
(8.9)
(8.9)
Proceeds from tenant improvement
allowances
0.4
2.3
Proceeds from controlling stockholder
contributions
17.4
—
Taxes paid related to net settlement upon
vesting of equity awards
(0.1)
(0.1)
Proceeds from issuance of stock
1.4
1.2
Repurchase and retirement of common
stock
—
(30.0)
Net cash provided by (used in) financing
activities
6.2
(39.0)
NET DECREASE IN CASH AND CASH
EQUIVALENTS
(22.6)
(29.2)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
220.2
134.8
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
197.6
$
105.6
NON-CASH INVESTING TRANSACTIONS:
Purchases of property and equipment
recorded in accounts payable and accrued expenses
$
19.7
$
21.4
Principal stockholder contributions
$
8.3
$
2.2
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Adjusted Net Income
(In millions, except per share
data)
(Unaudited
Three Months Ended March
31,
2023
2022
As Reported
Other Adjustments (1)
Adjusted
As Reported
Other Adjustments (1)
Adjusted
Operating income
$
53.1
$
8.4
$
61.5
$
92.4
$
—
$
92.4
Interest expense
4.3
—
4.3
6.3
—
6.3
Other income, net
2.5
—
2.5
0.3
—
0.3
Income before taxes
51.3
8.4
59.7
86.4
—
86.4
Provision for income taxes
14.6
2.4
17.0
20.3
—
20.3
Net income
$
36.7
$
6.0
$
42.7
$
66.1
$
—
$
66.1
Earnings per share - diluted
$
0.43
$
0.07
$
0.50
$
0.77
$
—
$
0.77
(1)
During the three months ended March 31,
2023, the Company’s consolidated pre-tax results included $6.7
million of legal and professional fees associated with the
Company’s strategic alternatives review and recently announced
agreement with Endeavor, as well as $1.7 million of expenses
related to a legal settlement and other costs associated with the
investigation by the Special Committee of members of the Company’s
Board of Directors.
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Adjusted OIBDA
(In millions, except per share
data)
(Unaudited)
Three Months Ended March 31,
2023
Operating Income
(Loss)
Depreciation &
Amortization
Stock-based
Compensation
Other Adjustments (1)
Adjusted OIBDA
Media
$
73.6
$
4.4
$
9.8
$
—
$
87.8
Live Events
6.1
—
0.9
—
7.0
Consumer Products
21.4
0.1
0.7
—
22.2
Corporate
(48.0
)
4.5
2.3
8.4
(32.8
)
Total
$
53.1
$
9.0
$
13.7
$
8.4
$
84.2
Three Months Ended March 31,
2022
Operating Income
(Loss)
Depreciation &
Amortization
Stock-based
Compensation
Other Adjustments
Adjusted OIBDA
Media
$
117.4
$
3.6
$
7.2
$
—
$
128.2
Live Events
2.0
—
0.8
—
2.8
Consumer Products
11.2
0.1
0.6
—
11.9
Corporate
(38.2
)
6.0
1.0
—
(31.2
)
Total
$
92.4
$
9.7
$
9.6
$
—
$
111.7
(1)
During the three months ended March 31,
2023, the Company’s consolidated pre-tax results included $6.7
million of legal and professional fees associated with the
Company’s strategic alternatives review and recently announced
agreement with Endeavor, as well as $1.7 million of expenses
related to a legal settlement and other costs associated with the
investigation by the Special Committee of members of the Company’s
Board of Directors.
World Wrestling Entertainment,
Inc.
Supplemental Information –
Reconciliation of Business Outlook
(In millions, except per share
data)
(Unaudited)
Reconciliation of Adjusted OIBDA to
Operating Income
Q1 2023
Q2 2023
FY 2023
Adjusted OIBDA
$
84.2
$125 - $135
$395 - $410
Depreciation & amortization (1)
(9.0
)
—
—
Stock-based compensation (1)
(13.7
)
—
—
Other operating income items (1)
(8.4
)
—
—
Operating income (U.S. GAAP
Basis)
$
53.1
Not estimable
Not estimable
(1)
Because of the nature of these items, WWE
is unable to estimate the amounts of any adjustments for these
items for periods after March 31, 2023 due to its inability to
forecast if or when such items will occur. These items are
inherently unpredictable and may not be reliably quantified.
World Wrestling Entertainment,
Inc.
Supplemental Information -
Free Cash Flow
(In millions)
(Unaudited)
Three Months Ended
March 31,
2023
2022
Net cash provided by operating
activities
$
12.6
$
93.8
Less cash used for capital
expenditures:
Purchases of property and equipment and
other assets (1)
(33.2
)
(24.1
)
Free Cash Flow (1)
$
(20.6
)
$
69.7
(1)
Purchases of property and equipment and other assets includes
$29.6 million and $13.1 million of capital expenditures related to
the Company’s new headquarter facility for the three months ended
March 31, 2023 and 2022, respectively. Excluding the capital
expenditures related to the Company’s new headquarter facility,
Free Cash Flow was $9.0 million and $82.8 million for the three
months ended March 31, 2023 and 2022, respectively. The Company
received $2.3 million related to tenant improvement allowances
associated with construction of its new headquarter facility for
the three months ended March 31, 2022. These tenant improvement
allowances are included as a component of Net Cash Used in
Financing Activities within our Consolidated Statements of Cash
Flows and therefore excluded from Free Cash Flow.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230503005211/en/
Investors: Seth Zaslow 203-352-1026
Media: Chris Legentil 203-352-8793
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