WWE Q1 Financials: Revenue Down vs. Last Year, Vince McMahon Comments

– WWE released their first quarter financial report this morning, here are the key highlights and comments from Vince McMahon…

* Revenues: were $182.4 million as compared to $187.7 million from the prior year quarter as the increased monetization of content as reflected in the Media segment was more than offset by a reduction in live event ticket revenue and lower merchandise sales.

* Operating Income: was a loss of $6.8 million as compared to income of $21.8 million in the prior year quarter, reflecting a decline in revenue and increased fixed costs, including strategic investments, as well as higher stock compensation costs driven by the increase in the Company’s stock price. The Company’s Operating income margin declined to (4%) from 12% in the prior year quarter.

* Adjusted OIBDA: (which excludes stock compensation) was $12.4 million as compared to $35.2 million. The results reflected an anticipated decline and were within the range of the Company’s guidance ($9 million to $14 million). The Company’s Adjusted OIBDA margin decreased to 7% from 19%.

* Net Income: reflected a loss of $8.4 million, or a loss of $0.11 per diluted share, as compared to net income of $14.8 million, or earnings of $0.18 per diluted share, in the first quarter of 2018. This decrease was primarily driven by the change in operating performance.

* Effective Tax Rate: was 26%, consistent with that of the prior year quarter.

* Cash flows: generated by operating activities reached $6.7 million as compared to $2.6 million in the prior year quarter as favorable changes in working capital more than offset lower operating performance.

* Free Cash Flow: demonstrated a $10.1 million use of cash as compared to a $1.8 million use of cash in the first quarter of 2018 as the change in operating cash flow was offset by a $12.4 million increase in capital expenditures primarily associated with the Company’s workspace plan.

* Cash, cash equivalents and short-term investments: were $338 million as of March 31, 2019, and the Company estimates debt capacity under its revolving line of credit of approximately $100 million.

Vince McMahon: “During the quarter, we continued to execute our strategy and achieved targeted financial results. While engagement metrics over the past two quarters were impacted by Superstar absences, we believe they will improve as our talent return and we launch our new season following a successful WrestleMania. We remain excited about the future, particularly with our debut on Fox in October.”