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WWE issued the following ahead of their earnings call at 11 am ET.
STAMFORD, Conn., February 6, 2020 – WWE (NYSE: WWE) today announced financial results for its fourth quarter and year ended December 31, 2019.
“During the fourth quarter, we expanded the reach of WWE’s live programming and further engaged with diverse audiences across platforms and formats,” said Vince McMahon, WWE Chairman & Chief Executive Officer. “We believe the value of live sports will continue to increase, particularly in today’s evolving media landscape, and we are well positioned to take advantage of this trend to maximize the value of our content.”
“For the year, we achieved record revenue and Adjusted OIBDA. However, with the delay in completing a Middle East distribution agreement as well as lower business performance than anticipated, our results were at the low-end of guidance,” added Frank Riddick, interim Chief Financial Officer. “As we work to strengthen engagement in 2020, we are pursuing several strategic initiatives that could increase the monetization of our content, including the distribution of content in the Middle East and India as well as strategic alternatives for our direct-to-consumer service, WWE Network. Excluding the potential impact of these initiatives, we expect significant revenue growth based on the full year impact of our new content distribution agreements in the U.S. and anticipate Adjusted OIBDA of $250 to $300 million. Management believes it has the potential to exceed this range, but is unable to provide additional guidance at this time.”
Fourth-Quarter Consolidated Results
Revenues increased 18% to $322.8 million from the prior year quarter as increased revenue in the Media segment, primarily driven by the monetization of core content, was partially offset by lower revenue from the Company’s Live Events segment.
Operating Income increased 87% to $99.8 million driven by increased profits from the Media segment. The Company’s Operating income margin increased to 31% from 20% in the prior year quarter.
Adjusted OIBDA (which excludes stock compensation) increased 67% to $107.6 million as compared to $64.4 million in the prior year quarter. The Company’s Adjusted OIBDA margin increased to 33% from 24% in the prior year quarter.
Net Income was $69.3 million, or $0.78 per diluted share, as compared to $41.2 million, or $0.46 per diluted share, in the fourth quarter of 2018. This increase was primarily driven by improved operating performance, partially offset by the impact of the finance lease related to the Company’s new headquarters.5
Effective Tax Rate increased to 26% from 23% in the prior year quarter.
Cash flows generated by operating activities increased to $119.4 million as compared to $65.2 million in the prior year quarter driven by improved operating performance and the favorable timing of working capital.
Free Cash Flow totaled $106.6 million as compared to $54.3 million in the fourth quarter of 2018 primarily driven by the change in operating cash flow.
The Company returned $84.2 million to shareholders in the fourth quarter 2019, including $75.0 million in share repurchases and $9.2 million in dividends paid. Under the Company’s existing stock repurchase program nearly 1.3 million shares were repurchased at an average price of $58.78 per share.
Fourth Quarter 2019 Highlights
• Revenues increased 18% to $322.8 million, which was the highest quarterly revenue in WWE history • Operating income increased 87% to $99.8 million
• Adjusted OIBDA1 increased 67% to a quarterly record of $107.6 million
Full Year 2019 Highlights
- Revenues reached $960.4 million, the highest in the Company’s history
- Operating income was $116.5 million
- Adjusted OIBDA of $180.0 million represented record performance for the third consecutive year
- SmackDown successfully transitioned to FOX Broadcast, where viewership increased by 20% over the prior year fourth quarter,2 and NXT extended its reach, airing live on USA Network for the first time
- WWE completed content distribution agreements with BT Sport and ViacomCBS’ Channel 5 in the U.K., Fox Sports in Latin America, PP Sports in China and SuperSport in Africa, providing strong platforms for reaching WWE audiences in these regions
- Digital engagement continued to grow with video views up 10% to 34.5 billion and hours consumed up 7% to nearly 1.3 billion across digital and social media platforms3
- Return of capital to shareholders totaled a record $120.8 million in 2019
Full Year 2020 Business Outlook
Management believes that WWE is well positioned to take advantage of significant growth opportunities. The Company is pursuing several strategic initiatives that could increase the monetization of its content in 2020 and/ or subsequent years. These include distribution of content in the Middle East and India as well as the evaluation of strategic alternatives for the Company’s direct-to-consumer service, WWE Network. At this time, the outcome of these initiatives is subject to considerable uncertainty. Excluding the potential impact of these initiatives, the Company estimates it can achieve 2020 Adjusted OIBDA of $250 – $300 million.4 Management believes it has the potential to exceed this range, but is unable to provide additional guidance at this time.