WWF Financial Reports
WWF Release Third Quarter Results:
World Wrestling Federation Entertainment, Inc. Reports Third Quarter Results: Revenues of $100.2 Million and Earnings Per Common Share of $0.13
Stamford, Conn. February 21, 2002 – World Wrestling Federation Entertainment, Inc. (NYSE:WWF) today announced financial results for its third fiscal quarter ended January 25, 2002. Total revenues for the quarter were $100.2 million versus $111.2 million in the prior year’s quarter. Net income was $9.4 million compared to $11.7 million in the third quarter last year. Included in net income was the favorable impact of approximately $4.6 million related to the reversal of provisions which were no longer required and the recording of tax benefits, both of which were associated with the discontinuance of the XFL. Net income also reflected the impact of lower interest and other income arising from a decrease in average interest rates as well as changes in the carrying values of warrants from certain of our licensing and television partners. Earnings per common share from continuing operations were $0.07 and earnings from discontinued operations were $0.06 per common share.
For the quarter, earnings before interest, taxes, depreciation
and amortization (EBITDA) were $11.3 million versus $22.7 million last year.
The decline in EBITDA was due to lower revenues, lower margins in branded merchandise
businesses, and increased selling, general and administrative expenses.
"During the quarter we made significant progress on a number of key strategic
fronts," said Linda E. McMahon, Chief Executive Officer. "We increased
the number of live events and introduced new talent. Both of these initiatives
were well received by our fans. We are now playing markets that heretofore we
could not visit given the size of our talent pool and logistical constraints
on our television shoots. We are encouraged by the early signs of success as
we lay the foundation to support the creation of multiple story lines and the
introduction of new talent under the WWFE umbrella," added Mrs. McMahon.
"The number of sellouts and the enthusiastic response by our fans, clearly
indicate that demand for additional live events exists in many more markets.
Our goal is to establish competing brands and engage our business model to meet
this demand. As part of our strategy, we will introduce more live events and
bring to market our branded merchandise. This will pave the way for additional
pay-per-views and television programming opportunities. The combination of our
inherent creativity and the depth of our talent roster has provided the momentum
for a successful extension of our brands," added Mrs. McMahon.
"In the international arena, we are moving forward with the first of our
four tours in 2002. Our first event scheduled for March 1, 2002 at the Yokohama
Arena in Tokyo, Japan is already sold out. The tour will continue on to Singapore
and Malaysia which represent two strong television markets for us and are markets
that we have not previously visited. In May, we will move on to Europe where
we have four live events scheduled. In August, we will travel to Australia and
in October we will return to Europe. We have also signed several licensing agreements
in Europe and have opened our international office in the Hammersmith section
of London. We are confident that we can fully monetize the potential that exists
in international markets and the results thus far are very encouraging,"
concluded Mrs. McMahon.Quarterly Results by Business Segment
Total revenues were $100.2 million compared to $111.2 million in the prior year
quarter.
Live and Televised Entertainment
Total revenues for our Live and Televised businesses were $73.4 million for the quarter compared to $79.5 million in the prior year quarter.
Live Event revenues – Live Event revenues were $15.3 million for the quarter.
There were 61 events during the quarter versus 48 last year.
Attendance was 446,600 compared to 512,800 in the third quarter last year.
The average ticket price increased approximately 3% to $34.21.
Pay-Per-View revenues – Pay-Per-View revenues for the quarter were $23.8 million.
In period domestic pay-per-view buys for the quarter were 1.4 million as compared to 1.7 million last year.
There were approximately 0.2 million out-of-period buys versus 0.1 million last year.
DirecTV resumed the airing of WWFE pay-per-views, beginning with the No Way Out pay-per-view that aired on February 17, 2002.
Television Rights Fees revenues increased 14% to $13.0 million and were driven by our improved international and domestic agreements.
Television Advertising revenues held up well in a depressed
advertising market. Advertising revenues were $21.3 million for the quarter
versus $22.4 million during the same period last year.
Branded Merchandise
Total revenues were $26.8 million for the quarter versus $31.7 million last year.
Licensing revenues decreased 22% to $8.1 million primarily due to the timing of the introduction of new video game titles in the current quarter as compared to the same period last year. As the installed base for new game consoles (i.e., Xbox, PlayStation 2 and Nintendo Gamecube) takes hold, we expect to benefit given the demonstrated popularity of our video games.
Merchandise revenues for the quarter were $7.0 million, a decrease of 3% versus last year, principally due to the decline in attendance. However, per capita spending increased from $7.80 to approximately $8.15 for the current quarter.
Publishing revenues decreased 10% to $4.2 million principally due to a decline in newsstand units sold.
Home video revenues decreased 18% to $2.6 million due to lower sell through rates and the attendant increase in return reserves.
New Media advertising revenues increased 20% during the quarter to $1.3 million.
WWF New York revenues declined 15% to $3.9 million as
the impact of the drop off in tourism in the Times Square area since September
11th, 2001 continues to have a negative effect on revenues.
Profit Contribution
Total profit contribution for the quarter was $37.5 million as compared to $46.2
million last year. The decline in profit contribution was principally due to
an $11.0 million decrease in revenues and the inclusion of additional inventory
reserves recorded in the quarter. The total profit contribution margin was 37%
for the quarter as compared to 42% last year.
The profit contribution margin for the Live and Televised
businesses was approximately 40% versus 43% in the third quarter last year.
The decrease in revenues due to lower pay-per-view buys accounted for the majority
of the margin decline in this category.
The profit contribution margin for the Branded Merchandise businesses was 30%
as compared to 37% during the same period last year due to the aforementioned
reserves booked in the quarter.
Selling, General and Administrative Expenses
Selling, General and Administrative expenses for the quarter were $26.2 million as compared to $22.7 million last year. Increased advertising and promotion expenses, legal fees, overhead expenses at WWF New York, and some staff-related expenses which included a $2.0 million charge for a reduction in the work force, were partially offset by reductions in consulting fees and relocation and recruitment expenses.
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, food
and beverage, entertainment, professional sports, and licensed merchandise;
acceptance of the Company's brands, media and merchandise within those markets;
uncertainties relating to litigation and other risks and factors set forth from
time to time in Company filings with the SEC. Actual results could differ materially
from those currently anticipated.
Contacts:
Investors: Thomas Gibbons, Vice President Investor Relations,
World Wrestling Federation Entertainment, Inc.
(203) 328-2576 c.
(203) 353-5066
Media : Gary Davis, Vice President Corporate Communications, World Wrestling Federation Entertainment, In
Source : WWFEcorpbiz.com
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