WWE Reports 2013 Second Quarter Results: Vince McMahon Comments On Earnings Declining

WWE Reports 2013 Second Quarter Results: Vince McMahon Comments On Earnings Declining Photo: AllCityImages.com
The following press release was sent this morning regarding WWE announcing financial results for its second quarter ended June 30, 2013:

WWE® Reports 2013 Second Quarter Results

STAMFORD, Conn.-- WWE today announced financial results for its second quarter ended June 30, 2013. Revenues increased $10.7 million or 8%, to $152.3 million from $141.6 million in the prior year quarter driven by the increased production and licensing of television content as well as increased ticket revenue from the Company's premiere event, WrestleMania, partially offset by the timing of one less pay-per-view event in the quarter. Operating income, however, declined to $8.8 million as compared to $19.6 million in the prior year quarter reflecting increased staffing expenses to support our various strategic initiatives. Net income was $5.2 million, or $0.07 per share, as compared to $11.9 million, or $0.16 per share, in the prior year quarter.

"In the second quarter, we continued to make investments in both staffing and talent to support our long-term growth objectives. These initiatives, including the recent opening of a world-class performance training facility, and the highest grossing WrestleMania in our Company's history, demonstrate our commitment to develop our talent, build our brands, and provide a solid foundation for future growth," stated Vince McMahon, Chairman and Chief Executive Officer. "We continue to believe that these investments will enhance our ability to create new programs and to distribute all of our content in a way that optimizes its value, through the renewal of key television contracts and the potential launch of a WWE network."

"Although our earnings declined in the quarter, we believe that the investments we are making will maximize the return to shareholders over time," added George Barrios, Chief Financial Officer. "We believe that our 2013 results, excluding the impact of film impairments, will fall within the lower end of the range previously communicated, which was 'plus or minus 10 percent' from our 2012 OIBDA results of $63 million."

Comparability of Results

For the second quarter of both 2013 and 2012, our OIBDA results did not include any significant items that impacted the comparability of results on a year-over-year basis. Our OIBDA results for the six months ended June 30, 2013 included a $4.7 million film impairment charge and an approximate $3.4 million positive impact from the transition of our video game to a new licensee in 2013. Results for the six months ended June 30, 2012 included a $0.8 million film impairment charge and an approximate $4 million benefit due to the recognition of previously unrecognized tax benefits. In order to facilitate an analysis of our financial results on a comparable basis, where noted, we have adjusted our year-to-date results to exclude these items. (See Schedule of Adjustments in Supplemental Information).

Three Months Ended June 30, 2013 - Results by Region and Business Segment

Revenues of $152.3 million grew 8% versus the prior year quarter as growth from North America was partially offset by declines across WWE's international markets. North American revenues increased 13% from the prior year quarter predominantly due to the licensing of new television programs, the performance of WrestleMania, and an increase in the number of North American live events, which more than offset lower revenues from the pay-per-view business, which had one less event in the current year quarter. Revenues from outside North America declined 8% primarily due to an anticipated reduction in the number of live events. Excluding revenue from Live Events, revenues from outside North America were essentially unchanged from the prior year quarter. There was no significant impact from changes in foreign exchange rates in the current year quarter.

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