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 July 30, 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 |
WORLD WRESTLING ENTERTAINMENT, INC.
(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 |
1241 East Main Street
Stamford, CT 06902
(203) 352-8600
(Address, including zip code, and telephone number, including area code,
of Registrant’s principal executive offices)
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 August 27, 2004, the number of shares outstanding of the Registrant’s Class A common stock, par value $.01 per share, was 20,841,434 and the number of shares outstanding of the Registrant’s Class B common stock, par value $.01 per share, was 47,713,563.
World Wrestling Entertainment, Inc.
Table of Contents
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Page # |
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Part I – FINANCIAL INFORMATION |
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Item 1. |
Consolidated Financial Statements (unaudited) |
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Consolidated Income Statements for the three months ended July 30, 2004 and July 25, 2003 |
2 |
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Consolidated Balance Sheets as of July 30, 2004 and April 30, 2003 |
3 |
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Consolidated Statements of Cash Flows for the three months ended July 30, 2004 and July 25, 2003 |
4 |
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5 |
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6 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
13 |
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Item 3. |
19 |
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Item 4. |
19 |
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Item 1. |
20 |
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Item 6. |
20 |
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21 |
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1
World Wrestling Entertainment, Inc.
Consolidated Income Statements
(in thousands, except per share data)
(unaudited)
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Three Months Ended |
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July 30, |
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July 25, |
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Net revenues |
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$ |
81,551 |
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$ |
74,675 |
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Cost of revenues |
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48,416 |
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49,261 |
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Selling, general and administrative expenses |
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17,875 |
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19,561 |
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Depreciation and amortization |
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2,920 |
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2,829 |
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Stock compensation costs |
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1,111 |
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158 |
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Operating income |
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11,229 |
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2,866 |
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Interest and investment income |
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1,232 |
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1,650 |
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Interest expense |
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167 |
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185 |
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Other income, net |
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217 |
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55 |
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Income from continuing operations before income taxes |
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12,511 |
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4,386 |
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Provision for income taxes |
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4,754 |
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1,643 |
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Income from continuing operations |
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7,757 |
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2,743 |
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Loss from discontinued operations, net of income taxes |
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(111 |
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(158 |
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Net income |
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$ |
7,646 |
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$ |
2,585 |
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Earnings per common share - basic and diluted: |
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Continuing operations |
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$ |
0.11 |
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$ |
0.04 |
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Discontinued operations |
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— |
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— |
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Net income |
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$ |
0.11 |
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$ |
0.04 |
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Shares used in per share calculations: |
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Basic |
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68,691 |
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69,046 |
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Diluted |
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69,574 |
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69,154 |
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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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CURRENT ASSETS: |
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Cash and equivalents |
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$ |
72,486 |
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$ |
48,467 |
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Short-term investments |
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205,269 |
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224,824 |
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Accounts receivable, net |
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51,290 |
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62,703 |
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Inventory, net |
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822 |
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856 |
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Prepaid expenses and other current assets |
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12,705 |
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14,027 |
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Assets of discontinued operations |
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489 |
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691 |
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Total current assets |
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343,061 |
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351,568 |
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PROPERTY AND EQUIPMENT, NET |
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69,863 |
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71,369 |
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INTANGIBLE ASSETS, NET |
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3,995 |
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4,492 |
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OTHER ASSETS |
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6,423 |
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6,212 |
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ASSETS OF DISCONTINUED OPERATIONS |
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20,764 |
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20,703 |
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TOTAL ASSETS |
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$ |
444,106 |
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$ |
454,344 |
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CURRENT LIABILITIES: |
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Current portion of long-term debt |
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$ |
714 |
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$ |
700 |
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Accounts payable |
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10,574 |
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13,118 |
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Dividends payable |
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— |
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4,106 |
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Accrued expenses and other liabilities |
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30,361 |
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42,131 |
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Deferred income |
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24,467 |
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23,512 |
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Liabilities of discontinued operations |
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2,007 |
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2,401 |
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Total current liabilities |
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68,123 |
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85,968 |
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LONG-TERM DEBT |
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7,771 |
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7,955 |
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LIABILITIES OF DISCONTINUED OPERATIONS |
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6,884 |
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7,316 |
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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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137 |
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136 |
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Class B common stock |
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548 |
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548 |
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Additional paid-in capital |
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251,409 |
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250,775 |
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Accumulated other comprehensive loss |
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(1,171 |
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(1,120 |
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Retained earnings |
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110,405 |
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102,766 |
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Total stockholders’ equity |
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361,328 |
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353,105 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
444,106 |
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$ |
454,344 |
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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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Three Months Ended |
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July 30, |
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July 25, |
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OPERATING ACTIVITIES: |
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Net income |
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$ |
7,646 |
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$ |
2,585 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Loss from discontinued operations, net of taxes |
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111 |
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158 |
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Revaluation of warrants |
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(212 |
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— |
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Depreciation and amortization |
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2,920 |
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2,829 |
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Amortization of deferred income |
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(123 |
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(335 |
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Stock compensation costs |
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1,111 |
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158 |
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Provision for doubtful accounts |
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225 |
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(1,976 |
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Provision for inventory obsolescence |
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46 |
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(128 |
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Provision for deferred income taxes |
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581 |
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— |
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Changes in assets and liabilities: |
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Accounts receivable |
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11,188 |
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16,141 |
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Inventory |
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(11 |
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64 |
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Prepaid expenses and other assets |
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1,302 |
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993 |
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Film production assets |
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(386 |
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— |
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Accounts payable |
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(2,544 |
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(1,420 |
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Accrued expenses and other liabilities |
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(12,300 |
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3,475 |
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Deferred income |
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1,078 |
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(4,097 |
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Net cash provided by continuing operations |
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10,632 |
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18,447 |
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Net cash used in discontinued operations |
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(794 |
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(1,236 |
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Net cash provided by operating activities |
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9,838 |
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17,211 |
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INVESTING ACTIVITIES: |
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Additions to property and equipment |
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(916 |
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(980 |
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Purchase of other assets |
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— |
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(1,487 |
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Sale (purchase) of short-term investments, net |
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19,172 |
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(3,811 |
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Net cash provided by (used in) investing activities |
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18,256 |
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(6,278 |
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FINANCING ACTIVITIES: |
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Repayments of long-term debt |
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(171 |
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(179 |
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Purchase of Company common stock |
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— |
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(19,246 |
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Dividends paid |
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(4,112 |
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(2,744 |
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Issuance of stock |
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171 |
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— |
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Proceeds from exercise of stock options |
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37 |
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— |
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Net cash used in financing activities |
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(4,075 |
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(22,169 |
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NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS |
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24,019 |
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(11,236 |
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CASH AND EQUIVALENTS, BEGINNING OF PERIOD |
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48,467 |
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128,473 |
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CASH AND EQUIVALENTS, END OF PERIOD |
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$ |
72,486 |
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$ |
117,237 |
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See Notes to Consolidated Financial Statements.
4
World Wrestling Entertainment, Inc.
Consolidated Statement of Stockholders’ Equity and Comprehensive (Loss) Income
(dollars and shares in thousands)
(unaudited)
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