Quarterly Report (10-q)

Date : 07/25/2019 @ 1:13PM
Source : Edgar (US Regulatory)
Stock : World Wrestling Entertainment (WWE)
Quote : 55.9  1.18 (2.16%) @ 10:14PM
After Hours
Last Trade
Last $ 55.84 ▼ -0.06 (-0.11%)

Quarterly Report (10-q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________

FORM  10-Q

____________________

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-16131

Commission Company Name: WORLD WRESTLING ENTERTAINMENTINC

WORLD WRESTLING ENTERTAINMENT, INC.

(Exact name of Registrant as specified in its charter)

Delaware

04-2693383

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.01 per share

WWE

New York Stock Exchange

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.   Yes     No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes     No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer x

Accelerated Filer   ¨

Non-Accelerated Filer   ¨

Smaller Reporting Company   ¨

Emerging Growth Company   ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes     No 

At July 23, 2019, the number of shares outstanding of the Registrant’s Class A common stock, par value $.01 per share, was 47,561,262 and the number of shares outstanding of the Registrant’s Class B common stock, par value $.01 per share, was 31,099,011 .

 

TABL E OF CONTENTS

Page #

Part I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (unaudited)

2

Consolidated Statements of Operations for the three a nd six months ended June 30, 2019 and 2018

2

Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018

3

Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018

4

Consolidated Statement of Stockholders’ Equity for the three and six months ended June 30, 2 019 and 2018

5

Consolidated Statements of Cash Flows for the three and six months ended June 30, 2019 and 2018

7

Notes to Consolidated Financial Statements

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

31

Item 3. Quantitative and Qualitative Disclosures about Market Risk

45

Item 4. Controls and Procedures

45

Part II – OTHER INFORMATION

Item 1. Legal Proceedings

45

Item 1A. Risk Factors

47

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

47

Item 6. Exhibits

47

Signatures

48

 

WO RLD WRESTLING ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2019

2018

2019

2018

Net revenues

$

268,809

$

281,542

$

451,257

$

469,263

Operating expenses

197,363

198,891

332,813

318,952

Marketing and selling expenses

24,876

29,697

48,020

49,593

General and administrative expenses

23,622

24,925

47,915

44,600

Depreciation and amortization

5,838

6,815

12,258

13,154

Operating income

17,110

21,214

10,251

42,964

Interest expense

4,009

4,734

10,348

8,247

Other income (expense), net

781

( 1,976 )

2,630

( 161 )

Income before income taxes

13,882

14,504

2,533

34,556

Provision for income taxes

3,468

4,559

515

9,776

Net income

$

10,414

$

9,945

$

2,018

$

24,780

Earnings per share: basic

$

0.13

$

0.13

$

0.03

$

0.32

Earnings per share: diluted

$

0.11

$

0.11

$

0.02

$

0.29

Weighted average common shares outstanding:

Basic

78,047

77,158

78,044

77,150

Diluted

91,100

87,100

91,107

85,227

Dividends declared per common share (Class A and B)

$

0.12

$

0.12

$

0.24

$

0.24


See accompanying notes to consolidated financial statements.

2


WO RLD WRESTLING ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2019

2018

2019

2018

Net income

$

10,414

$

9,945

$

2,018

$

24,780

Other comprehensive income (loss):

Foreign currency translation adjustments

( 110 )

( 159 )

( 77 )

( 364 )

Unrealized holding gains (losses) on available-for-sale debt securities (net of tax expense (benefit) of $ 128 and $( 13 ), and $ 358 and $( 201 ), respectively)

407

( 43 )

1,134

( 638 )

Total other comprehensive income (loss)

297

( 202 )

1,057

( 1,002 )

Comprehensive income

$

10,711

$

9,743

$

3,075

$

23,778


See accompanying notes to consolidated financial statements.

3


WOR LD WRESTLING ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

As of

June 30,

December 31,

2019

2018

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

98,237

$

167,457

Short-term investments, net

197,814

191,686

Accounts receivable (net of allowance for doubtful accounts and returns
   of $ 1,082 and $ 1,009 , respectively)

132,052

78,925

Inventory, net

7,611

7,753

Prepaid expenses and other current assets

26,350

28,187

Total current assets

462,064

474,008

PROPERTY AND EQUIPMENT, NET

173,193

148,089

FINANCE LEASE RIGHT-OF-USE ASSETS, NET

12,629

OPERATING LEASE RIGHT-OF-USE ASSETS, NET

21,345

FEATURE FILM PRODUCTION ASSETS, NET

15,339

13,558

TELEVISION PRODUCTION ASSETS, NET

6,836

7,473

INVESTMENT SECURITIES

28,564

30,196

DEFERRED INCOME TAX ASSETS, NET

16,633

17,138

OTHER ASSETS, NET

6,280

9,837

TOTAL ASSETS

$

742,883

$

700,299

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Current portion of long-term debt

$

5,179

$

5,118

Finance lease liabilities

8,494

Operating lease liabilities

6,937

Convertible debt

185,830

183,090

Accounts payable and accrued expenses

112,230

120,158

Deferred income

55,463

49,173

Total current liabilities

374,133

357,539

LONG-TERM DEBT

23,097

25,696

FINANCE LEASE LIABILITIES

5,210

OPERATING LEASE LIABILITIES

14,566

OTHER NON-CURRENT LIABILITIES

591

827

Total liabilities

417,597

384,062

COMMITMENTS AND CONTINGENCIES

 

 

STOCKHOLDERS’ EQUITY:

Class A common stock: ($ 0.01 par value; 180,000,000 shares authorized;
    46,937,834 and 43,721,411 shares issued and outstanding as of
   June 30, 2019 and December 31, 2018, respectively)

469

437

Class B convertible common stock: ($ 0.01 par value; 60,000,000 shares authorized;
    31,099,011 and 34,303,438 shares issued and outstanding as of
   June 30, 2019 and December 31, 2018, respectively)

311

343

Additional paid-in capital

440,796

415,281

Accumulated other comprehensive income

2,559

1,502

Accumulated deficit

( 118,849 )

( 101,326 )

Total stockholders’ equity

325,286

316,237

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

742,883

$

700,299

See accompanying notes to consolidated financial statements.

4


W ORLD WRESTLING ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

Three Months Ended June 30, 2019

Accumulated

Common Stock

Additional

Other

Class A

Class B

Paid - in

Comprehensive

Accumulated

Shares

Amount

Shares

Amount

Capital

Income

Deficit

Total

Balance, March 31, 2019

43,739  

$

437  

34,303  

$

343  

$

429,217  

$

2,262  

$

( 119,090 )

$

313,169  

Net income

10,414

10,414

Other comprehensive income

297

297

Repurchase and retirement of common stock

( 12 )

( 122 )

( 799 )

( 921 )

Stock issuances, net

7  

220

220

Conversion of Class B common stock by shareholder

3,204  

32  

( 3,204 )

( 32 )

Taxes paid related to net settlement upon vesting of equity awards

( 191 )

( 191 )

Cash dividends declared

8

( 9,374 )

( 9,366 )

Stock-based compensation

11,664

11,664

Balance, June 30, 2019

46,938  

$

469  

31,099  

$

311  

$

440,796

$

2,559

$

( 118,849 )

$

325,286

Six Months Ended June 30, 2019

Accumulated

Common Stock

Additional

Other

Class A

Class B

Paid - in

Comprehensive

Accumulated

Shares

Amount

Shares

Amount

Capital

Income

Deficit

Total

Balance, December 31, 2018

43,721  

$

437  

34,303  

$

343  

$

415,281  

$

1,502  

$

( 101,326 )

$

316,237  

Net income

2,018

2,018

Other comprehensive income

1,057

1,057

Repurchase and retirement of common stock

( 12 )

( 122 )

( 799 )

( 921 )

Stock issuances, net

25  

1,377

1,377

Conversion of Class B common stock by shareholder

3,204  

32  

( 3,204 )

( 32 )

Taxes paid related to net settlement upon vesting of equity awards

( 242 )

( 242 )

Cash dividends declared

10

( 18,742 )

( 18,732 )

Stock-based compensation

24,492

24,492

Balance, June 30, 2019

46,938  

$

469  

31,099  

$

311  

$

440,796

$

2,559

$

( 118,849 )

$

325,286


See accompanying notes to consolidated financial statements.

5


WORLD WRESTLING ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

Three Months Ended June 30, 2018

Accumulated

Common Stock

Additional

Other

Class A

Class B

Paid - in

Comprehensive

Accumulated

Shares

Amount

Shares

Amount

Capital

Income

Deficit

Total

Balance, March 31, 2018

42,540  

$

426  

34,609  

$

346  

$

430,008  

$

1,571  

$

( 156,730 )

$

275,621  

Net income

9,945  

9,945  

Other comprehensive loss

( 202 )

( 202 )

Stock issuances, net

10  

140  

140  

Taxes paid related to net settlement upon vesting of equity awards

( 107 )

( 107 )

Cash dividends declared

9  

( 9,268 )

( 9,259 )

Stock-based compensation

15,459  

15,459  

Other

1,262  

1,262  

Balance, June 30, 2018

42,550  

$

426  

34,609  

$

346  

$

446,771  

$

1,369  

$

( 156,053 )

$

292,859  

Six Months Ended June 30, 2018

Accumulated

Common Stock

Additional

Other

Class A

Class B

Paid - in

Comprehensive

Accumulated

Shares

Amount

Shares

Amount

Capital

Income

Deficit

Total

Balance, December 31, 2017

42,498  

$

425  

34,609  

$

346  

$

422,208  

$

2,371  

$

( 172,391 )

$

252,959  

Cumulative effect of adopting ASC 606

10,086  

10,086  

Net income

24,780  

24,780  

Other comprehensive loss

( 1,002 )

( 1,002 )

Stock issuances, net

52  

1  

889  

890  

Taxes paid related to net settlement upon vesting of equity awards

( 131 )

( 131 )

Cash dividends declared