|By Raj Giri||February 28, 2013 | Comments|
WWE (NYSE:WWE) today announced financial results for its fourth quarter ended December 31, 2012. Revenues totaled $115.1 million as compared to $112.9 million in the prior-year quarter. Operating income was $2.6 million as compared to a loss of $13.1 million in the prior-year quarter. Net income was $0.6 million, or $0.01 per share, as compared to a loss of $8.6 million, or $(0.12) per share, in the prior-year quarter. Excluding items that impacted comparability on a year-over-year basis, Adjusted Operating income was $5.4 million as compared to $3.1 million in the prior-year quarter, and Adjusted Net income was $1.3 million, or $0.02 per share, as compared to $1.8 million, or $0.02 per share, in the prior-year quarter. On an "As Reported" basis, the results of WWE's movie portfolio, including reduced film impairment charges, were a significant component of the rise in fourth-quarter earnings. Excluding the impact of these impairment charges and network-related expenses, the growth in "Adjusted" Operating income was predominantly from the licensing of new television programs and digital content, which more than offset ongoing investment to support the company's long-term growth objectives. Adjusted earnings, however, declined due to an increase in the effective tax-rate.
"In the fourth quarter, we continued to make important progress on our key strategic initiatives, expanding the production and licensing of new programs and enhancing our brands," stated Vince McMahon, Chairman and Chief Executive Officer. "Although we did not announce the launch of a domestic television network during the year, we believe, now more than ever, that we can realize the full value of our intellectual property using a variety of approaches in our global markets. Our confidence is based on the rising value of content and the tremendous global appeal of our brands."
"In 2012, our traditional core businesses (excluding the results of WWE Studios and network-related expenses) delivered EBITDA of $77 million, in line with our performance over the preceding four years, which has ranged from $76 million to $96 million. Based on the anticipated expiration of key commercial agreements and other opportunities to maximize our content value, we believe we have the potential to achieve a significant increase in earnings," added George Barrios, Chief Financial Officer. "In order to achieve this growth, it is critical that we invest in our production and creative capabilities. We expect that 2013 EBITDA performance will approximate our 2012 results, plus or minus 10%. In addition, we anticipate that net income will be impacted by incremental expenses from the return to a more normalized tax rate (30%-35% as compared to 26% in 2012) and increased depreciation of approximately $2 million to $3 million that derives from our ongoing capital investments to support our long-term growth initiatives.
Comparability of Results
Our results for the current-year quarter included $2.3 million in network-related operating expenses and a $0.5 million film impairment charge. Results for the prior-year quarter included $4.0 million in network-related operating expenses and $12.2 million in film impairment charges. 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.
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