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 January 23, 2004 |
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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 |
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WORLD WRESTLING ENTERTAINMENT, INC. |
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(Exact name of Registrant as specified in its charter) |
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Delaware |
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04-2693383 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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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, |
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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 March 1, 2004, the number of shares outstanding of the Registrant’s Class A common stock, par value $.01 per share, was 13,628,839 and the number of shares outstanding of the Registrant’s Class B common stock, par value $.01 per share, was 54,780,207.
World Wrestling Entertainment, Inc.
TABLE OF CONTENTS
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Page # |
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Part I – FINANCIAL INFORMATION |
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Item 1. Financial Statements (Unaudited) |
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2 |
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Consolidated Balance Sheets as of January 23, 2004 and April 30, 2003 |
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4 |
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5 |
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6 |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15 |
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Item 3. Quantitative and Qualitative Disclosures about Market Risk |
25 |
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25 |
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27 |
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27 |
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28 |
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World Wrestling Entertainment, Inc.
Consolidated Statements of Operations
(dollars in thousands, except per share data)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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January 23, |
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January 24, |
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January 23, |
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January 24, |
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Net revenues |
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$ |
79,070 |
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$ |
92,565 |
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$ |
248,176 |
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$ |
268,337 |
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Cost of revenues |
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44,055 |
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56,711 |
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145,543 |
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175,501 |
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Selling, general and administrative expenses |
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18,873 |
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24,409 |
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51,635 |
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70,831 |
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Stock compensation costs |
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1,011 |
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— |
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1,327 |
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— |
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Depreciation and amortization |
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2,942 |
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2,641 |
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8,538 |
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6,731 |
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Operating income |
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12,189 |
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8,804 |
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41,133 |
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15,274 |
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Interest expense |
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192 |
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195 |
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585 |
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574 |
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Interest income |
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1,581 |
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833 |
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4,470 |
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1,266 |
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Other income (expense), net |
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722 |
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30 |
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1,013 |
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(12 |
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Income before income taxes |
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14,300 |
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9,472 |
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46,031 |
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15,954 |
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Provision for income taxes |
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5,372 |
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3,484 |
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17,411 |
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5,851 |
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Income from continuing operations |
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8,928 |
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5,988 |
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28,620 |
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10,103 |
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(Loss) income from discontinued operations |
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(76 |
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(21,988 |
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32 |
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(25,178 |
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Net income (loss) |
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$ |
8,852 |
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$ |
(16,000 |
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$ |
28,652 |
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(15,075 |
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Earnings (loss) per share - Basic and Diluted: |
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Continuing operations |
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$ |
0.13 |
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$ |
0.09 |
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$ |
0.42 |
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$ |
0.14 |
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Discontinued operations |
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— |
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$ |
(0.31 |
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— |
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$ |
(0.36 |
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Net income (loss) |
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$ |
0.13 |
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$ |
(0.23 |
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$ |
0.42 |
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$ |
(0.21 |
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Weighted average common and common equivalent shares: |
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Basic |
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68,394,341 |
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70,407,085 |
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68,602,818 |
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70,633,799 |
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Diluted |
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68,767,927 |
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70,407,085 |
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68,822,331 |
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70,633,799 |
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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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$ |
64,136 |
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$ |
128,473 |
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Short-term investments |
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202,552 |
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142,641 |
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Accounts receivable, net |
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39,048 |
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49,729 |
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Inventory, net |
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999 |
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839 |
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Prepaid expenses and other current assets |
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19,065 |
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18,443 |
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Assets of discontinued operations |
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20,844 |
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21,129 |
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Total current assets |
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346,644 |
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361,254 |
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PROPERTY AND EQUIPMENT - NET |
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74,895 |
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59,325 |
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INTANGIBLE ASSETS - NET |
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12,735 |
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12,055 |
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OTHER ASSETS |
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4,890 |
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4,623 |
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TOTAL ASSETS |
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$ |
439,164 |
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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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$ |
821 |
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$ |
777 |
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Accounts payable |
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15,771 |
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14,188 |
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Accrued expenses and other liabilities |
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41,232 |
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34,991 |
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Deferred income |
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20,496 |
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24,662 |
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Liabilities of discontinued operations |
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8,867 |
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11,554 |
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Total current liabilities |
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87,187 |
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86,172 |
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LONG-TERM DEBT |
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8,506 |
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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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248,143 |
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297,315 |
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Accumulated other comprehensive (loss) income |
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(30 |
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243 |
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Retained earnings |
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94,674 |
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74,240 |
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Total stockholders’ equity |
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343,471 |
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341,959 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
439,164 |
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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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Nine Months Ended |
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January 23, |
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January 24, |
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OPERATING ACTIVITIES: |
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NET INCOME (LOSS) |
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$ |
28,652 |
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$ |
(15,075 |
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Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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(Income) loss from discontinued operations, net of tax |
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(32 |
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25,178 |
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Depreciation and amortization |
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8,538 |
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6,731 |
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Amortization of warrants |
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(836 |
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(952 |
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Non-cash stock compensation costs |
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469 |
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Unrealized gain on value of warrants |
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(422 |
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— |
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Net (recoveries) provision for doubtful accounts |
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(1,994 |
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1,353 |
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Provision for inventory obsolescence |
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19 |
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618 |
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Changes in assets and liabilities: |
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Accounts receivable |
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12,675 |
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10,806 |
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Inventory |
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(179 |
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(314 |
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Prepaid expenses and other assets |
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1,628 |
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(2,688 |
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Accounts payable |
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1,583 |
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(4,562 |
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Accrued expenses and other liabilities |
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6,530 |
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200 |
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Deferred income |
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(4,969 |
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2,732 |
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Net cash provided by continuing operations |
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51,662 |
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24,027 |
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Net cash used in discontinued operations |
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(2,370 |
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(7,842 |
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Net cash provided by operating activities |
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49,292 |
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16,185 |
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INVESTING ACTIVITIES: |
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Purchase of property and equipment |
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(3,485 |
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(8,885 |
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Buyout of corporate aircraft lease |
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(20,122 |
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