WWE (NYSE:WWE) today announced financial results for its fourth quarter ended December 31, 2011. Revenues totaled $112.9 million as compared to $122.5 million in the prior year quarter. Operating loss was ($13.1) million as compared to Operating income of $14.4 million in the prior year quarter. Net loss was ($8.6) million, or ($0.12) per share, as compared to Net income of $8.1 million, or $0.11 per share, in the prior year quarter. Excluding the impact of film impairments and network related expenses in the current year quarter, Adjusted Operating income was $3.1 million as compared to $14.4 million in the prior year quarter. Adjusted Net income was $1.8 million, or $0.02 per share, as compared to $8.1 million, or $0.11 per share, in the prior year quarter.
"In 2011, we evaluated several paths for creating new programs and distributing all of our content in a way that optimizes its value. Executing this strategy effectively, including the potential creation of a WWE Network, has the power to transform our business," stated Vince McMahon, Chairman and Chief Executive Officer. "While we made significant progress toward this objective, our fourth quarter and full year results were impacted primarily by three items: significant non-cash film impairment charges stemming from the weak performance of our movie releases, strategic decisions to withhold several hours of previously licensed television content for distribution on other platforms, and initial start-up operating expenses associated with our emerging content and distribution strategy. Regarding the first item, we have taken several measures to improve the profitability of our movie business. And, regarding the other items, we believe that our ongoing investment to expand and maximize the value of our content is the most potent approach for driving our future earnings."
Comparability of Results
The current year quarter results included $12.2 million in film impairment charges related to our films The Reunion, Bending the Rules, Barricade, See No Evil, Knucklehead and The Chaperone. In addition, the current year quarter results included approximately $4.0 million in network related expenses. In order to facilitate an analysis of our financial results on a more comparable basis, where noted, we have adjusted our results to exclude these items from our fourth quarter of 2011 results. Excluding the impact of these items, Adjusted Operating income decreased to $3.1 million and Adjusted EBITDA decreased to $7.2 million. (See Supplemental Information – Schedule of Adjustments).
Three Months Ended December 31, 2011 – Results by Business Segment
Total revenues decreased 8% to $112.9 million driven by declines across all of our operating segments. Revenues from North America decreased by 9%, led by declines in our WWE Studios, Television, and WWE.com businesses. Revenues outside North America decreased 5%, primarily due to a decline in our Licensing business, which was partially offset by increased revenue in Live Events. Revenue from Asia Pacific and Latin America benefited from an increase in the number and the timing of our live events. Additionally, revenue growth in the Asia Pacific region reflected higher sales of licensed and home video products. There was no significant impact from changes in foreign exchange rates in the current year quarter.
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