WWE Releases 2009 First Quarter Numbers - Full Report

WWE released the following information today. Take note that WrestleMania XXV in not included in these figures:

WWE(R) Reports 2009 First Quarter Results

STAMFORD, Conn., May 07, 2009 (BUSINESS WIRE) — World Wrestling Entertainment, Inc. (NYSE:WWE) today announced financial results for its first quarter ended March 31, 2009. Revenues totaled $107.8 million as compared to $162.6 million in the comparable prior year quarter. Operating income was $16.7 million as compared to $27.1 million in the prior year quarter. Net income was $10.3 million, or $0.14 per share, as compared to $19.5 million, or $0.27 per share, in the prior year quarter.
"During the quarter, our core businesses performed relatively well, delivering operating income essentially flat with the prior year on an adjusted basis," stated Linda McMahon, Chief Executive Officer. "Our first quarter results reflected our successful efforts to improve operating efficiency. Our work to transform the Company in this way resulted in a significant reduction in operating expenses and a marked increase in profit margins. We believe the changes we have made position us to leverage the power of our global brands and to deliver even stronger financial performance in a challenging economic environment."

"Subsequent to the quarter, our 25th anniversary production of WrestleMania(R) set a record as the highest grossing live event in WWE history, attracting more than 70,000 fans and recording approximately 1 million pay-per-view buys for WWE."

Comparability of Results
WrestleManiaXXV occurred on April 5, 2009, and consequently will be included in our second fiscal quarter financial results. However, WrestleManiaXXIV occurred on March 31, 2008 and was included as part of our first quarter results in 2008. WrestleManiaXXIV contributed approximately $31.3 million of revenues, $7.1 million of profit contribution ($4.6 million, net of tax) and $0.06 of EPS from across our various business lines in the first quarter of 2008. For comparative purposes, pro forma schedules excluding the impact of WrestleMania XXIV have been provided in the supplemental information included in this release.

Results By Business Segment
The following tables reflect net revenues by segment and by region for the three months ended March 31, 2009 and March 31, 2008. (Dollars in millions)

Net Revenues:

Live and Televised entertainment: $64.1 in 2009, $99.8 in 2008
Consumer products: 33.1, 43.4
Digital media: 6.9, 8.1
WWE Studios: 3.7, 11.3
Total: 107.8, 162.06

North America: 83.8 in 2009, 128.7 in 2008
Europe, Middle East, and Africa: 16.1, 23.2
Asia Pacific: 6.2, 9.0
Latin America: 1.7, 1.7
Total: 107.8, 162.6

Live and Televised Entertainment
Revenues from our Live and Televised Entertainment businesses were $64.1 million for the current quarter as compared to $99.8 million in the prior year quarter. The 36% decline in revenues primarily reflects the $31.3 million timing difference for WrestleMania previously discussed.

Live Event revenues were $18.0 million as compared to $24.6 million in the prior year quarter, primarily due to the timing of WrestleMania XXIV. WrestleMania XXIV generated approximately $5.9 million in revenue in the prior year quarter.

There were 87 events, including four international events, during the current quarter as compared to 74 events, including eight international events, in the prior year quarter.

North American events generated $17.0 million of revenues from 83 events as compared to $21.8 million from 66 events in the prior year quarter. North American average attendance was approximately 6,100 in the current quarter as compared to 7,200 in the prior year, a decrease of approximately 15%. The average ticket price for North American events was $33.54 in the current quarter as compared to $45.39 in the prior year. Excluding the impact of WrestleMania XXIV in the prior year quarter, revenues were $18.7 million, North American average attendance was 6,300 and average ticket price was $38.08.

International events generated approximately $1.0 million of revenues as compared to $2.8 million in the prior year quarter. All 4 international events in the current period were structured as buy-out deals with guaranteed fixed revenues as compared to 6 of the 8 international events being structured as buy-out deals in the prior year quarter. Average international attendance in the current quarter increased by approximately 3% to 9,300.

Pay-Per-View revenues were $13.6 million as compared to $41.2 million in the prior year quarter. There were two Pay-Per-View events produced in the current year quarter as compared to three in the prior year quarter. As discussed above, WrestleMania XXIV generated approximately $23.8 million in the first quarter of fiscal 2008.

Royal Rumble: 50,000 buys, down from last year's 533,000
No Way Out: 272,000 buys, down from last year's 329,000 buys
WrestleMania XXIV was on the first quarter last year, doing 1,058,000 buys

Venue Merchandiserevenues were $4.6 million as compared to $5.6 million in the prior year quarter. The decrease is due to lower per capita spending of $9.29 in the current quarter as compared to $11.20 in the prior year quarter. Excluding the impact of WrestleMania XXIV, revenues were $4.3 million and per capita spending was $9.87 in the prior year quarter.

Television Rights Fees revenues were $24.9 million as compared to $24.0 million in the prior year quarter.

WWE 24/7 Classics on Demand(TM) revenues were$1.5 million as compared to $1.6 million in the prior year quarter.

Consumer Products
Revenues from our Consumer Products businesses were $33.1 million versus $43.4 million in the prior year quarter, representing a 24% decrease.

Home Video net revenues were $9.2 million as compared to $14.0 million in the prior year quarter. The decrease in Home Video revenues primarily reflects the release of two fewer titles than the prior year and a reduction in the sale of titles from our catalog. DVD shipments declined 23% to approximately 912,000 units in the current period.

Licensing revenues were $19.8 million as compared to $26.2 million in the prior year quarter, primarily reflecting lower video game and toy sales. Video game revenues declined by $5.7 million, while revenues related to toys declined by approximately $0.6 million in the current quarter.

Magazine publishing net revenues were $3.5 million as compared to $2.9 million in the prior year quarter, reflecting $0.5 million associated with our WWE Kids Magazine in the current year quarter. WWE Kids Magazine's first issue was distributed in the second quarter of the prior year.

Digital Media
Revenues from our Digital Media related businesses were $6.9 million as compared to $8.1 million in the prior year, representing a 15% decrease.

WWE.com revenues were $3.9 million as compared to $4.5 million in the prior year quarter, reflecting a decline in online advertising revenues.

WWEShop revenues were $3.0 million as compared to $3.6 million in the prior year quarter. The average revenue per order decreased slightly to $49.63, as compared to $51.17 in the prior year quarter, while the number of orders declined by 12% to approximately 60,000.

WWE Studios
We recorded revenue of $3.7 million in the current quarter related to our three theatrical releases, See No Evil, The Marine, and The Condemned, as compared to $11.3 million in the prior year quarter. During the first quarter we released our fourth feature film, 12 Rounds, which generated approximately $11.8 million in domestic box office receipts through May 3, 2009. During the current quarter we also released one Direct-to-DVD film, Behind Enemy Lines: Colombia.

Profit Contribution (Net revenues less cost of revenues)
Profit contribution decreased to $51.4 million in the current quarter as compared to $62.6 million in the prior year quarter, reflecting the absence of approximately $7.1 million in WrestleManiaXXIV related profit, which was reported in the prior year quarter. Total profit contribution margin increased to approximately 48% as compared to 39% in the prior year quarter, reflecting improved margins in our Live and Televised Entertainment and WWE Studios segments. Excluding the impact of WrestleMania, the profit contribution margin in the prior year quarter was 42%.

Selling, general and administrative expenses
SG&A expenses were $30.9 million for the current quarter as compared to $33.0 million in the prior year quarter, reflecting decreases in advertising and travel expenses, offset in part by approximately $2.2 million of restructuring related expenses associated with our headcount reduction that occurred in January 2009.

EBITDA
EBITDA was approximately $20.5 million in the current quarter as compared to $29.6 million in the prior year quarter. Excluding the impact of WrestleMania and restructuring charge, adjusted EBITDA was $22.8 million as compared to $22.5 million in the prior year quarter.

Investment and Other (Expense) Income
The decline in investment income in the current quarter reflects lower average investment balances and interest rates. Other expenses reflect realized translation losses and the revaluation of warrants held with licensees.

Effective tax rate
In the current quarter, the effective tax rate was 35% as compared to 30% in the prior year quarter. The prior year quarter reflected the recognition of certain state tax benefits.

Cash Flows
Net cash provided by operating activities was $47.3 million for the three months ended March 31, 2009 as compared to $15.0 million in the prior year period. This increase was driven by the timing of WrestleMania, feature film investments and changes in working capital, including changes in the Company's tax position. Capital expenditures were $1.5 million for the current period as compared to $9.7 million in the prior year period.

Additional Information
Additional business metrics are made available to investors on a monthly basis on our corporate website – corporate.wwe.com.

Note: World Wrestling Entertainment, Inc. will host a conference call on May 7, 2009 at 11:00 a.m. ET to discuss the Company's earnings results for first quarter of 2009. All interested parties can access the conference call by dialing 800-895-0198 (conference ID: WWE). Please reserve a line 15 minutes prior to the start time of the conference call. A presentation that will be referenced during the call can be found at the Company web site at corporate.wwe.com. A replay of the call will be available approximately three hours after the conference call concludes, and can be accessed at corporate.wwe.com.

World Wrestling Entertainment, Inc. (NYSE:WWE) is an integrated media and entertainment company headquartered in Stamford, Conn. Additional information on the Company can be found at wwe.com and corporate.wwe.com.

Trademarks: All WWE programming, talent names, images, likenesses, slogans, wrestling moves, trademarks, copyrights and logos are the exclusive property of World Wrestling Entertainment, Inc. and its subsidiaries. All other trademarks, logos and copyrights are the property of their respective owners.

Forward-Looking Statements: This news release contains forward-looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties. These risks and uncertainties include the conditions of the markets for live events, broadcast television, cable television, pay-per-view, Internet, feature films, entertainment, professional sports, and licensed merchandise; acceptance of the Company's brands, media and merchandise within those markets; uncertainties relating to litigation; risks associated with producing live events both domestically and internationally; uncertainties associated with international markets; risks relating to maintaining and renewing key agreements, including television distribution agreements; and other risks and factors set forth from time to time in Company filings with the Securities and Exchange Commission. Actual results could differ materially from those currently expected or anticipated. In addition to these risks and uncertainties, our dividend is based on a number of factors, including our liquidity and historical and projected cash flow, strategic plan, our financial results and condition, contractual and legal restrictions on the payment of dividends and such other factors as our board of directors may consider relevant.