WWE Releases Second Quarter Financials
STAMFORD, Conn.--(BUSINESS WIRE)-- WWE (NYSE:WWE - News) today announced financial results for its second quarter ended June 30, 2011. Revenues totaled $142.6 million as compared to $106.8 million in the prior year quarter. Operating income was $21.0 million as compared to $10.3 million in the prior year quarter. Net income was $14.3 million, or $0.19 per share, as compared to $6.3 million, or $0.08 per share, in the prior year quarter. There were several items that impacted the comparability of our year-over-year results, primarily the timing of our annual WrestleMania® event and a $3.3 million film impairment charge in the current year quarter. Adjusting for these items in both the current and prior year quarters (as described below), adjusted revenues increased 5% to $142.6 million from $135.6 million in the prior year quarter. Adjusted Operating income declined 2% to $22.9 million from $23.4 million in the prior year quarter. Adjusted Net income was $15.5 million, or $0.21 per share, as compared to $15.1 million, or $0.20 per share, in the prior year quarter.
"Through the second quarter, WWE has generated top-line growth across our four business segments led by the strength of WrestleMania. WrestleMania XXVII? achieved more than 1 million pay-per-view buys worldwide and reached record levels of both revenue and profit," stated Vince McMahon?, Chairman and Chief Executive Officer. "Our earnings, however, were constrained by the performance of our movie business, adverse home video sales trends, and the status of our talent development. Key operating metrics, such as average live event attendance and pay-per-view buys showed declines in the second quarter when evaluated on a comparable basis to last year (excluding WrestleMania). But, while our key metrics were down, the gap to our prior year performance continued to diminish. We believe this trend demonstrates that we are making important progress on our talent development and creative initiatives. As we continue to evaluate the potential of different forms of distribution, such as a WWE Network, we are more confident than ever that we can create and monetize content in a variety of existing and new media, and thereby create meaningful incremental value for our shareholders."
Comparability of Results
WrestleMania XXVII occurred on April 3, 2011 and contributed $35.9 million of revenues, $16.7 million of profit contribution ($11.4 million, net of tax) and $0.15 of EPS from across various business lines to our current year second quarter results. In conjunction with the promotion of this event, $1.4 million in marketing expenses were recognized in the first quarter of 2011. WrestleMania XXVI occurred on March 28, 2010, and contributed $28.8 million of revenues, $13.1 million of profit contribution ($8.8 million, net of tax) and $0.12 of EPS to our first quarter of 2010 results. In order to facilitate an analysis of our financial results on a more comparable basis, where noted, we have adjusted our results to include the promotional costs (discussed above) in our second quarter of 2011 results and added the impact of WrestleMania XXVI to the second quarter of 2010 results. In addition, the current year quarter included a $3.3 million impairment charge related to our film, That's What I Am. We have also adjusted our second quarter of 2011 results to exclude the impact of this charge. (See Schedules of Adjustments in Supplemental Information). Please note that our revised film strategy utilizing a self-distribution model may also impact the comparability of results but is not adjusted in the aforementioned schedules.