UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended October 24, 2003 |
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or |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from ________ to __________ |
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Commission file number 0-27639 |
WORLD WRESTLING ENTERTAINMENT, INC.
(Exact name of Registrant as specified in its charter)
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Delaware |
04-2693383 |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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1241 East Main Street |
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Stamford, CT 06902 |
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(203) 352-8600 |
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(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices) |
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
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Yes x |
No o |
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
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Yes x |
No o |
At November 7, 2003, the number of shares outstanding of the Registrant’s Class A common stock, par value $.01 per share, was 13,608,997 and the number of shares outstanding of the Registrant’s Class B common stock, par value $.01 per share, was 54,780,207.
World Wrestling Entertainment, Inc.
Table of Contents
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Page # |
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Part I – FINANCIAL INFORMATION |
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Item 1. Financial Statements (Unaudited) |
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2 |
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Consolidated Balance Sheets as of October 24, 2003 and April 30, 2003 |
3 |
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Consolidated Statements of Cash Flows for the six months ended October 24, 2003 and October 25, 2002 |
4 |
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5 |
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6 |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
13 |
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Item 3. Quantitative and Qualitative Disclosures about Market Risk |
21 |
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Item 4. Controls and Procedures |
21 |
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Part II – OTHER INFORMATION |
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Item 1. Legal Proceedings |
22 |
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22 |
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Item 6. Exhibits and Reports on Form 8-K |
22 |
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23 |
World Wrestling Entertainment, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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October 24,
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October 25,
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October 24,
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October 25,
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Net revenues |
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$ |
94,431 |
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$ |
90,323 |
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$ |
169,106 |
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$ |
175,772 |
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Cost of revenues |
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52,227 |
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62,172 |
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101,488 |
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118,790 |
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Selling, general and administrative expenses |
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13,359 |
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24,635 |
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33,078 |
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46,422 |
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Depreciation and amortization |
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2,872 |
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2,098 |
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5,596 |
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4,090 |
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Operating income |
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25,973 |
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1,418 |
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28,944 |
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6,470 |
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Interest income and other, net |
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1,267 |
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(917 |
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2,787 |
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12 |
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Income before income taxes |
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27,240 |
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501 |
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31,731 |
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6,482 |
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Provision for income taxes |
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10,356 |
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241 |
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12,039 |
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2,367 |
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Income from continuing operations |
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16,884 |
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260 |
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19,692 |
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4,115 |
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Discontinued operations: |
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Income (loss) from discontinued operations, net of tax |
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266 |
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(1,863 |
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108 |
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(3,190 |
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Net income (loss) |
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$ |
17,150 |
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$ |
(1,603 |
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$ |
19,800 |
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$ |
925 |
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Earnings (loss) per common share - Basic and Diluted: |
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Continuing operations |
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$ |
0.25 |
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$ |
0.00 |
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$ |
0.29 |
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$ |
0.06 |
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Discontinued operations |
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$ |
0.00 |
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$ |
(0.03 |
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$ |
0.00 |
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$ |
(0.05 |
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Net income (loss) |
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$ |
0.25 |
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$ |
(0.02 |
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$ |
0.29 |
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$ |
0.01 |
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Weighted average common shares outstanding: |
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Basic |
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68,392 |
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70,407 |
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68,710 |
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70,750 |
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Diluted |
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68,586 |
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70,407 |
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68,860 |
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70,750 |
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See Notes to Consolidated Financial Statements
2
World Wrestling Entertainment, Inc.
Consolidated Balance Sheets
(dollars in thousands)
(Unaudited)
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As of |
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As of |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
82,449 |
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$ |
128,473 |
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Short-term investments |
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190,992 |
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142,641 |
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Accounts receivable (less allowance for doubtful accounts of $3,015 as of October 24, 2003 and $5,284 as of April 30, 2003) |
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42,731 |
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49,729 |
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Inventory, net |
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1,024 |
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839 |
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Prepaid expenses and other current assets |
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20,029 |
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18,443 |
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Assets of discontinued operations |
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20,761 |
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21,129 |
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Total current assets |
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357,986 |
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361,254 |
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PROPERTY AND EQUIPMENT - NET |
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56,827 |
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59,325 |
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INTANGIBLE ASSETS - NET |
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13,127 |
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12,055 |
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OTHER ASSETS |
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6,200 |
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4,623 |
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TOTAL ASSETS |
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$ |
434,140 |
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$ |
437,257 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Current portion of long-term debt |
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$ |
806 |
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$ |
777 |
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Accounts payable |
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15,087 |
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14,188 |
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Accrued expenses and other liabilities |
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43,540 |
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34,991 |
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Deferred income |
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19,414 |
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24,662 |
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Liabilities of discontinued operations |
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9,531 |
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11,554 |
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Total current liabilities |
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88,378 |
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86,172 |
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LONG-TERM DEBT |
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8,716 |
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9,126 |
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COMMITMENTS AND CONTINGENCIES |
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STOCKHOLDERS’ EQUITY: |
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Class A common stock |
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136 |
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182 |
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Class B common stock |
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548 |
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548 |
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Treasury stock |
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— |
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(30,569 |
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Additional paid-in capital |
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247,926 |
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297,315 |
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Accumulated other comprehensive (loss) income |
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(122 |
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243 |
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Retained earnings |
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88,558 |
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74,240 |
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Total stockholders’ equity |
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337,046 |
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341,959 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
434,140 |
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$ |
437,257 |
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See Notes to Consolidated Financial Statements
3
World Wrestling Entertainment, Inc.
Consolidated Statements of Cash Flows
(dollars in thousands)
(Unaudited)
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Six Months Ended |
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October 24, |
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October 25, |
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OPERATING ACTIVITIES: |
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Net income |
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$ |
19,800 |
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$ |
925 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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(Income) loss from discontinued operations, net of tax |
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(108 |
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3,190 |
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Depreciation and amortization |
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5,596 |
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4,090 |
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Amortization of warrants |
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(670 |
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(635 |
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Stock compensation costs |
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316 |
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— |
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Provision for doubtful accounts |
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(1,976 |
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603 |
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Provision for inventory obsolescence |
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(52 |
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513 |
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Changes in assets and liabilities: |
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Accounts receivable |
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8,976 |
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14,958 |
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Inventory |
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(133 |
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(158 |
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Prepaid expenses and other assets |
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(1,592 |
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(3,114 |
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Accounts payable |
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899 |
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(4,394 |
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Accrued expenses and other liabilities |
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8,998 |
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(5,374 |
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Deferred income |
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(6,217 |
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685 |
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Net cash provided by continuing operations |
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33,837 |
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11,289 |
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Net cash used in discontinued operations |
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(1,545 |
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(644 |
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Net cash provided by operating activities |
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32,292 |
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10,645 |
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INVESTING ACTIVITIES: |
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Purchase of property and equipment |
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(2,458 |
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(5,173 |
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Purchase of other assets |
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(1,641 |
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— |
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(Purchase) sale of short-term investments, net |
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(49,172 |
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116 |
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Net cash used in continuing operations |
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(53,271 |
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(5,057 |
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