AMC Networks Inc. ("AMC Networks" or the "Company") (NASDAQ: AMCX)
today reported financial results for the second quarter ended
June 30, 2024.
Chief Executive Officer Kristin
Dolan said: "AMC Networks continues to find opportunities
in a strategic plan built around programming, partnerships and
profitability. Key to our plan is the creation and curation of
celebrated films and series, and making them available to audiences
everywhere, including through an exciting new branded content
licensing agreement with Netflix. In the first half of 2024, we’ve
made significant progress against our strategic priority of
generating strong free cash flow, and we’re well on our way to
achieving our free cash flow guidance for the full year."
Operational Highlights:
-
Expanded our longstanding relationship with Netflix by striking an
innovative deal to strategically curate and window prior seasons of
15 AMC branded shows on their platform, launching on August
19th.
-
Entered into a new licensing partnership with Sky, making Sky the
new home of The Walking Dead Universe in the UK.
-
Continued participation in new and innovative internet-delivered
skinny bundles including the inclusion of our AMC, We TV, BBCA, BBC
News, Sundance and IFC networks in Optimum's new Entertainment TV
package available on Optimum Stream.
-
Successfully implemented price increases for two of our targeted
streaming services: Acorn TV and HIDIVE with an insignificant
impact to churn due to highly-engaged, brand-loyal subscriber
bases.
-
AMC Reality, a branded offering on ITVX, the UK’s largest AVOD
platform, launched May 30th joining AMC Stories which launched on
ITVX on April 8th.
-
Greenlit the third series in the expanding Anne Rice Immortal
Universe, a drama for AMC and AMC+ focused on a secretive society
called The Talamasca, slated for a 2025 premiere.
-
Announced a new series from AMC Studios for AMC and AMC+, set
inside the bubble of Silicon Valley, from writer and showrunner
Jonathan Glatzer of Succession, Bad Sisters, and Better Call Saul
fame.
Financial Highlights – Second Quarter
Ended June 30, 2024:
-
Net cash provided by operating activities of $104 million; Free
Cash Flow(1) of $95 million.
-
Operating income of $11 million included impairment and other
charges of $97 million in the second quarter; Adjusted Operating
Income(1) of $153 million, with a margin of 24%.
-
Net revenues of $626 million decreased 8% from the prior year.
Excluding $20 million of revenues in the prior year related to the
return of rights from Hulu, $19 million of revenues in the prior
year related to 25/7 Media (which we divested on December 29, 2023)
and $13 million of revenues in the current period related to a
one-time adjustment payment at AMCNI, net revenues decreased 4%.
-
Streaming revenues of $150 million increased 9% from the prior
year.
-
Diluted EPS of $(0.66); Adjusted EPS(1) of $1.24.
Dollars in thousands, except per share amounts |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
Change |
|
|
|
2024 |
|
|
2023 |
|
Change |
|
Net Revenues |
|
$ |
625,934 |
|
|
$ |
678,628 |
|
(7.8 |
)% |
|
$ |
1,222,395 |
|
$ |
1,396,075 |
|
(12.4 |
)% |
Operating Income |
|
$ |
10,788 |
|
|
$ |
105,701 |
|
(89.8 |
)% |
|
$ |
120,966 |
|
$ |
279,005 |
|
(56.6 |
)% |
Adjusted Operating Income |
|
$ |
152,807 |
|
|
$ |
176,777 |
|
(13.6 |
)% |
|
$ |
301,931 |
|
$ |
392,540 |
|
(23.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings (Loss) Per Share |
|
$ |
(0.66 |
) |
|
$ |
1.60 |
|
n/m |
|
$ |
0.37 |
|
$ |
3.97 |
|
n/m |
Adjusted Earnings Per Share |
|
$ |
1.24 |
|
|
$ |
2.02 |
|
(38.6 |
)% |
|
$ |
2.40 |
|
$ |
4.64 |
|
(48.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
104,403 |
|
|
$ |
157,566 |
|
(33.7 |
)% |
|
$ |
255,272 |
|
$ |
25,047 |
|
n/m |
Free Cash Flow |
|
$ |
95,165 |
|
|
$ |
147,614 |
|
(35.5 |
)% |
|
$ |
239,314 |
|
$ |
3,597 |
|
n/m |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See page 5 of this earnings release for a
discussion of non-GAAP financial measures used in this release.
This discussion includes the definition of Adjusted Operating
Income, Adjusted EPS and Free Cash Flow.
Segment Results:(dollars in
thousands)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
Net Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Operations |
|
$ |
538,291 |
|
|
$ |
581,819 |
|
|
(7.5 |
)% |
|
$ |
1,062,517 |
|
|
$ |
1,193,673 |
|
|
(11.0 |
)% |
International |
|
|
90,095 |
|
|
|
99,304 |
|
|
(9.3 |
)% |
|
|
165,700 |
|
|
|
207,376 |
|
|
(20.1 |
)% |
Inter-segment Eliminations |
|
|
(2,452 |
) |
|
|
(2,495 |
) |
|
1.7 |
% |
|
|
(5,822 |
) |
|
|
(4,974 |
) |
|
(17.0 |
)% |
Total Net Revenues |
|
$ |
625,934 |
|
|
$ |
678,628 |
|
|
(7.8 |
)% |
|
$ |
1,222,395 |
|
|
$ |
1,396,075 |
|
|
(12.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Operations |
|
$ |
102,735 |
|
|
$ |
162,530 |
|
|
(36.8 |
)% |
|
$ |
244,752 |
|
|
$ |
362,018 |
|
|
(32.4 |
)% |
International |
|
|
(43,795 |
) |
|
|
(11,705 |
) |
|
(274.2 |
)% |
|
|
(35,186 |
) |
|
|
2,437 |
|
|
n/m |
Corporate / Inter-segment Eliminations |
|
|
(48,152 |
) |
|
|
(45,124 |
) |
|
(6.7 |
)% |
|
|
(88,600 |
) |
|
|
(85,450 |
) |
|
(3.7 |
)% |
Total Operating Income |
|
$ |
10,788 |
|
|
$ |
105,701 |
|
|
(89.8 |
)% |
|
$ |
120,966 |
|
|
$ |
279,005 |
|
|
(56.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic Operations |
|
$ |
155,348 |
|
|
$ |
184,806 |
|
|
(15.9 |
)% |
|
$ |
317,667 |
|
|
$ |
404,194 |
|
|
(21.4 |
)% |
International |
|
|
29,265 |
|
|
|
19,186 |
|
|
52.5 |
% |
|
|
42,665 |
|
|
|
40,323 |
|
|
5.8 |
% |
Corporate / Inter-segment Eliminations |
|
|
(31,806 |
) |
|
|
(27,215 |
) |
|
(16.9 |
)% |
|
|
(58,401 |
) |
|
|
(51,977 |
) |
|
(12.4 |
)% |
Total Adjusted Operating Income |
|
$ |
152,807 |
|
|
$ |
176,777 |
|
|
(13.6 |
)% |
|
$ |
301,931 |
|
|
$ |
392,540 |
|
|
(23.1 |
)% |
|
Domestic Operations
Second Quarter Results:
-
Domestic Operations revenues decreased 7% from the prior year to
$538 million.
-
Subscription revenues decreased 3% to $323 million, primarily due
to declines in the linear subscriber universe, partially offset by
an increase in streaming revenues.
-
Streaming revenues increased 9% to $150 million driven by
year-over-year subscriber growth and price increases.
-
Streaming subscribers increased 5% to 11.6 million as compared to
11.0 million subscribers as of June 30, 2023.
-
Affiliate revenues decreased 12% to $172 million, primarily due to
basic subscriber declines.
-
Content licensing revenues decreased 18% to $67 million due to the
availability of deliveries in the period. The prior period included
$20 million of revenues related to the return of rights from Hulu
that resulted in the acceleration of revenue previously anticipated
to be recognized in 2024. Excluding prior period revenues
associated with the return of rights from Hulu, content licensing
revenues increased 10%.
-
Advertising revenues decreased 11% to $149 million due to linear
ratings declines and a challenging ad market, partly offset by
digital and advanced advertising revenue growth.
-
Operating income of $103 million included a long-lived asset
impairment charge related to our BBCA joint venture of $29
million.
-
Adjusted Operating Income decreased 16% to $155 million, with a
margin of 29%. The decrease in Adjusted Operating Income was
primarily driven by a decrease in revenues, partly offset by
continued cost management measures.
International
In 2024, the Company updated the name of its
previously titled "International and Other" operating segment to
"International" following the divestiture of the 25/7 Media
business on December 29, 2023, which was the sole component of the
operating segment that comprised “Other.” This update does not
constitute a change in segment reporting, but rather an update in
name only. Prior period segment information contained in this
release includes the results of the 25/7 Media business through the
date of divestiture.
Second Quarter Results:
-
International revenues decreased 9% from the prior year to $90
million. The prior period included $19 million of content licensing
and other revenues related to 25/7 Media, which we divested on
December 29, 2023. Additionally, current period advertising revenue
included $13 million of revenue related to a one-time adjustment
payment. Excluding revenues related to 25/7 Media and the one-time
adjustment payment, International revenues decreased 4%.
-
Subscription revenues decreased 13% to $50 million, primarily due
to the non-renewal of an AMCNI distribution agreement in the UK
that occurred in the fourth quarter of 2023.
-
Content licensing and other revenues decreased 86% to $3 million
due to the sale of our interest in 25/7 Media in December
2023.
-
Advertising revenues increased 84% to $38 million due to a $13
million one-time adjustment payment and new streaming offerings in
the UK. Excluding the one-time adjustment payment, advertising
revenues increased 18%.
-
Operating loss of $44 million included a goodwill impairment change
of $68 million related to AMCNI.
-
Adjusted Operating Income increased 53% to $29 million. The
increase in Adjusted Operating Income was primarily driven by the
one-time adjustment payment. 25/7 Media generated $1 million of AOI
in the second quarter of 2023. Excluding AOI related to the
one-time adjustment payment, International AOI was $16 million,
with a margin of 21%.
Other Matters
Open Market Repurchases of 4.25% Senior Notes
due 2029
In June 2024, the Company repurchased $15
million principal amount of its 4.25% senior notes due 2029 on the
open market, at a discount of $4.9 million, and retired the
repurchased notes.
4.25% Convertible Senior Notes due 2029
On June 21, 2024, the Company completed an
offering of $143.75 million principal amount of its 4.25%
convertible senior notes due 2029 (the "Convertible Notes"). The
Convertible Notes may be converted at an initial conversion rate of
78.5083 shares of Class A Common Stock per $1,000 principal amount
of Convertible Notes (equivalent to an initial conversion price of
approximately $12.74 per share).
Impairment and Other Charges
Impairment and other charges of $97 million for
the quarter ended June 30, 2024 primarily consisted of a $68
million goodwill impairment charge at AMCNI and $29 million of
long-lived asset impairment charges at BBCA.
During the second quarter of 2024, we determined
that the decline in our stock price was an indicator of potential
impairment of goodwill. Accordingly, we performed quantitative
assessments for all of our reporting units and concluded that the
fair value of the AMCNI reporting unit declined to less than its
carrying amount. As a result, we recognized an impairment charge of
$68 million, which is included in Impairment and other charges in
the condensed consolidated statements of income (loss).
Additionally, the Company performed a recoverability test and
determined that the carrying amount of the BBCA asset group
exceeded its fair value, therefore an impairment charge of $29
million was recorded for identifiable intangible assets and other
long-lived assets, which is included in Impairment and other
charges in the condensed consolidated statement of income (loss)
within the Domestic Operations operating segment.
Stock Repurchase Program & Outstanding
Shares
As previously disclosed, the Company's Board of
Directors has authorized a program to repurchase up to $1.5 billion
of the Company’s outstanding shares of common stock. The Stock
Repurchase Program has no pre-established end date and may be
suspended or discontinued at any time. During the quarter ended
June 30, 2024, the Company did not repurchase any shares. As
of June 30, 2024, the Company had $135 million of
authorization remaining for repurchase under the Stock Repurchase
Program.
As of August 2, 2024, the Company had
32,613,713 shares of Class A Common Stock and 11,484,408 shares of
Class B Common Stock outstanding.
Please see the Company’s Quarterly Report on
Form 10-Q for the period ended June 30, 2024, which will be
filed later today, for further details regarding the above
matters.
Description of Non-GAAP
Measures
Internally, the Company uses net revenues,
Adjusted Operating Income (Loss), and Free Cash Flow measures as
the most important indicators of its business performance and
evaluates management’s effectiveness with specific reference to
these indicators.
The Company defines Adjusted Operating Income
(Loss), which is a non-GAAP financial measure, as operating income
(loss) before share-based compensation expense or benefit,
depreciation and amortization, impairment and other charges
(including gains or losses on sales or dispositions of businesses),
restructuring and other related charges, cloud computing
amortization, and including the Company’s proportionate share of
adjusted operating income (loss) from majority-owned equity method
investees. From time to time, we may exclude the impact of certain
events, gains, losses, or other charges (such as significant legal
settlements) from AOI that affect our operating performance.
Because it is based upon operating income (loss), Adjusted
Operating Income (Loss) also excludes interest expense (including
cash interest expense) and other non-operating income and expense
items. The Company believes that the exclusion of share-based
compensation expense or benefit allows investors to better track
the performance of the various operating units of the business
without regard to the effect of the settlement of an obligation
that is not expected to be made in cash.
The Company believes that Adjusted Operating
Income (Loss) is an appropriate measure for evaluating the
operating performance of the business segments and the Company on a
consolidated basis. Adjusted Operating Income (Loss) and similar
measures with similar titles are common performance measures used
by investors, analysts, and peers to compare performance in the
industry. Adjusted Operating Income (Loss) should be viewed as a
supplement to and not a substitute for operating income (loss), net
income (loss), and other measures of performance presented in
accordance with U.S. generally accepted accounting principles
("GAAP"). Since Adjusted Operating Income (Loss) is not a measure
of performance calculated in accordance with GAAP, this measure may
not be comparable to similar measures with similar titles used by
other companies. For a reconciliation of operating income (loss) to
Adjusted Operating Income (Loss), please see pages 8-9 of this
release.
The Company defines Free Cash Flow, which is a
non-GAAP financial measure, as net cash provided by operating
activities less capital expenditures, all of which are reported in
our Consolidated Statement of Cash Flows. The Company believes the
most comparable GAAP financial measure of its liquidity is net cash
provided by operating activities. The Company believes that Free
Cash Flow is useful as an indicator of its overall liquidity, as
the amount of Free Cash Flow generated in any period is
representative of cash that is available for debt repayment,
investment, and other discretionary and non-discretionary cash
uses. The Company also believes that Free Cash Flow is one of
several benchmarks used by analysts and investors who follow the
industry for comparison of its liquidity with other companies in
the industry, although the Company’s measure of Free Cash Flow may
not be directly comparable to similar measures reported by other
companies. For a reconciliation of net cash provided by operating
activities to Free Cash Flow, please see page 11 of this
release.
The Company defines Adjusted Earnings per
Diluted Share (“Adjusted EPS”), which is a non-GAAP financial
measure, as earnings per diluted share excluding the following
items: amortization of acquisition-related intangible assets;
impairment and other charges (including gains or losses on sales or
dispositions of businesses); non-cash impairments of goodwill,
intangible and fixed assets; restructuring and other related
charges; and the impact associated with the modification of debt
arrangements, including gains and losses related to the
extinguishment of debt; as well as the impact of taxes on the
aforementioned items. The Company believes the most comparable GAAP
financial measure is earnings per diluted share. The Company
believes that Adjusted EPS is one of several benchmarks used by
analysts and investors who follow the industry for comparison of
its performance with other companies in the industry, although the
Company’s measure of Adjusted EPS may not be directly comparable to
similar measures reported by other companies. For a reconciliation
of earnings per diluted share to Adjusted EPS, please see pages
12-13 of this release.
Forward-Looking Statements
This earnings release may contain statements
that constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are
subject to uncertainty and changes in circumstances. Investors are
cautioned that any such forward-looking statements are not
guarantees of future performance or results and involve risks and
uncertainties and that actual results or developments may differ
materially from those in the forward-looking statements as a result
of various factors, including financial community and rating agency
perceptions of the Company and its business, operations, financial
condition and the industries in which it operates and the factors
described in the Company’s filings with the Securities and Exchange
Commission, including the sections entitled "Risk Factors" and
"Management’s Discussion and Analysis of Financial Condition and
Results of Operations" contained therein. The Company disclaims any
obligation to update any forward-looking statements contained
herein.
Conference Call Information
AMC Networks will host a conference call today
at 8:30 a.m. ET to discuss its second quarter 2024 results. To
listen to the call, please visit investors.amcnetworks.com.
About AMC Networks Inc.
AMC Networks (Nasdaq: AMCX) is home to many of
the greatest stories and characters in TV and film and the premier
destination for passionate and engaged fan communities around the
world. The company creates and curates celebrated series and films
across distinct brands and makes them available to audiences
everywhere. Its portfolio includes targeted streaming services
AMC+, Acorn TV, Shudder, Sundance Now, ALLBLK and HIDIVE; cable
networks AMC, BBC AMERICA (operated through a joint venture with
BBC Studios, which includes U.S. distribution and sales
responsibilities for BBC News), IFC, SundanceTV and We TV; and film
distribution labels IFC Films and RLJE Films. The company also
operates AMC Studios, its in-house studio, production and
distribution operation behind acclaimed and fan-favorite original
franchises including The Walking Dead Universe and the Anne Rice
Immortal Universe; and AMC Networks International, its
international programming business.
Contacts
Investor Relations |
|
|
Corporate Communications |
Nicholas Seibert |
|
|
Jim Maiella |
nicholas.seibert@amcnetworks.com |
|
|
jim.maiella@amcnetworks.com |
|
|
|
|
|
AMC NETWORKS INC.CONSOLIDATED STATEMENTS
OF INCOME (LOSS) (Dollars in thousands, except per
share amounts)(unaudited) |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues, net |
|
$ |
625,934 |
|
|
$ |
678,628 |
|
|
$ |
1,222,395 |
|
|
$ |
1,396,075 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Technical and operating (excluding depreciation and
amortization) |
|
|
280,727 |
|
|
|
321,961 |
|
|
|
552,303 |
|
|
|
648,690 |
|
Selling, general and administrative |
|
|
208,176 |
|
|
|
194,298 |
|
|
|
397,057 |
|
|
|
379,904 |
|
Depreciation and amortization |
|
|
26,493 |
|
|
|
25,745 |
|
|
|
52,319 |
|
|
|
51,620 |
|
Impairment and other charges |
|
|
96,819 |
|
|
|
24,882 |
|
|
|
96,819 |
|
|
|
24,882 |
|
Restructuring and other related charges |
|
|
2,931 |
|
|
|
6,041 |
|
|
|
2,931 |
|
|
|
11,974 |
|
Total operating expenses |
|
|
615,146 |
|
|
|
572,927 |
|
|
|
1,101,429 |
|
|
|
1,117,070 |
|
Operating income |
|
|
10,788 |
|
|
|
105,701 |
|
|
|
120,966 |
|
|
|
279,005 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(43,216 |
) |
|
|
(38,930 |
) |
|
|
(76,057 |
) |
|
|
(76,547 |
) |
Interest income |
|
|
9,292 |
|
|
|
7,342 |
|
|
|
18,177 |
|
|
|
15,258 |
|
Gain on extinguishment of debt, net |
|
|
247 |
|
|
|
— |
|
|
|
247 |
|
|
|
— |
|
Miscellaneous, net |
|
|
1,493 |
|
|
|
10,140 |
|
|
|
(3,697 |
) |
|
|
14,729 |
|
Total other expense |
|
|
(32,184 |
) |
|
|
(21,448 |
) |
|
|
(61,330 |
) |
|
|
(46,560 |
) |
Income (loss) from operations before income taxes |
|
|
(21,396 |
) |
|
|
84,253 |
|
|
|
59,636 |
|
|
|
232,445 |
|
Income tax expense |
|
|
(10,893 |
) |
|
|
(22,155 |
) |
|
|
(34,542 |
) |
|
|
(59,054 |
) |
Net income (loss) including noncontrolling interests |
|
|
(32,289 |
) |
|
|
62,098 |
|
|
|
25,094 |
|
|
|
173,391 |
|
Net (income) loss attributable to noncontrolling interests |
|
|
3,055 |
|
|
|
8,141 |
|
|
|
(8,525 |
) |
|
|
458 |
|
Net income (loss) attributable to AMC Networks' stockholders |
|
$ |
(29,234 |
) |
|
$ |
70,239 |
|
|
$ |
16,569 |
|
|
$ |
173,849 |
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per share attributable to AMC Networks' stockholders: |
|
|
|
|
Basic |
|
$ |
(0.66 |
) |
|
$ |
1.60 |
|
|
$ |
0.37 |
|
|
$ |
3.98 |
|
Diluted |
|
$ |
(0.66 |
) |
|
$ |
1.60 |
|
|
$ |
0.37 |
|
|
$ |
3.97 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares: |
|
|
|
|
|
|
|
|
Basic |
|
|
44,466 |
|
|
|
43,842 |
|
|
|
44,267 |
|
|
|
43,702 |
|
Diluted |
|
|
44,466 |
|
|
|
43,900 |
|
|
|
45,443 |
|
|
|
43,835 |
|
|
AMC NETWORKS INC.SUPPLEMENTAL FINANCIAL
DATA (Dollars in
thousands)(Unaudited) |
|
|
|
Three Months Ended June 30, 2024 |
|
|
Domestic Operations |
|
International |
|
Corporate / Inter-segment Eliminations |
|
Consolidated |
Operating income (loss) |
|
$ |
102,735 |
|
$ |
(43,795 |
) |
|
$ |
(48,152 |
) |
|
$ |
10,788 |
Share-based compensation expenses |
|
|
2,748 |
|
|
905 |
|
|
|
4,804 |
|
|
|
8,457 |
Depreciation and amortization |
|
|
10,800 |
|
|
4,151 |
|
|
|
11,542 |
|
|
|
26,493 |
Restructuring and other related charges |
|
|
2,931 |
|
|
— |
|
|
|
— |
|
|
|
2,931 |
Impairment and other charges |
|
|
28,815 |
|
|
68,004 |
|
|
|
— |
|
|
|
96,819 |
Cloud computing amortization |
|
|
3,283 |
|
|
— |
|
|
|
— |
|
|
|
3,283 |
Majority owned equity investees AOI |
|
|
4,036 |
|
|
— |
|
|
|
— |
|
|
|
4,036 |
Adjusted operating
income (loss) |
|
$ |
155,348 |
|
$ |
29,265 |
|
|
$ |
(31,806 |
) |
|
$ |
152,807 |
|
|
Three Months Ended June 30, 2023 |
|
|
Domestic Operations |
|
International |
|
Corporate / Inter-segment Eliminations |
|
Consolidated |
Operating income (loss) |
|
$ |
162,530 |
|
$ |
(11,705 |
) |
|
$ |
(45,124 |
) |
|
$ |
105,701 |
Share-based compensation expenses |
|
|
2,192 |
|
|
846 |
|
|
|
4,610 |
|
|
|
7,648 |
Depreciation and amortization |
|
|
11,663 |
|
|
4,902 |
|
|
|
9,180 |
|
|
|
25,745 |
Restructuring and other related charges |
|
|
3,905 |
|
|
261 |
|
|
|
1,875 |
|
|
|
6,041 |
Impairment and other charges |
|
|
— |
|
|
24,882 |
|
|
|
— |
|
|
|
24,882 |
Cloud computing amortization |
|
|
5 |
|
|
— |
|
|
|
2,244 |
|
|
|
2,249 |
Majority owned equity investees AOI |
|
|
4,511 |
|
|
— |
|
|
|
— |
|
|
|
4,511 |
Adjusted operating
income (loss) |
|
$ |
184,806 |
|
$ |
19,186 |
|
|
$ |
(27,215 |
) |
|
$ |
176,777 |
|
AMC NETWORKS INC.SUPPLEMENTAL FINANCIAL
DATA (Dollars in
thousands)(Unaudited) |
|
|
|
Six Months Ended June 30, 2024 |
|
|
Domestic Operations |
|
International |
|
Corporate / Inter-segment Eliminations |
|
Consolidated |
Operating income (loss) |
|
$ |
244,752 |
|
$ |
(35,186 |
) |
|
$ |
(88,600 |
) |
|
$ |
120,966 |
Share-based compensation expenses |
|
|
5,978 |
|
|
1,671 |
|
|
|
6,883 |
|
|
|
14,532 |
Depreciation and amortization |
|
|
20,827 |
|
|
8,176 |
|
|
|
23,316 |
|
|
|
52,319 |
Restructuring and other related charges |
|
|
2,931 |
|
|
— |
|
|
|
— |
|
|
|
2,931 |
Impairment and other charges |
|
|
28,815 |
|
|
68,004 |
|
|
|
— |
|
|
|
96,819 |
Cloud computing amortization |
|
|
6,831 |
|
|
— |
|
|
|
— |
|
|
|
6,831 |
Majority owned equity investees AOI |
|
|
7,533 |
|
|
— |
|
|
|
— |
|
|
|
7,533 |
Adjusted operating
income (loss) |
|
$ |
317,667 |
|
$ |
42,665 |
|
|
$ |
(58,401 |
) |
|
$ |
301,931 |
|
|
Six Months Ended June 30, 2023 |
|
|
Domestic Operations |
|
International |
|
Corporate / Inter-segment Eliminations |
|
Consolidated |
Operating income (loss) |
|
$ |
362,018 |
|
$ |
2,437 |
|
$ |
(85,450 |
) |
|
$ |
279,005 |
Share-based compensation expenses |
|
|
6,639 |
|
|
1,685 |
|
|
4,969 |
|
|
|
13,293 |
Depreciation and amortization |
|
|
23,517 |
|
|
9,673 |
|
|
18,430 |
|
|
|
51,620 |
Restructuring and other related charges |
|
|
4,723 |
|
|
1,646 |
|
|
5,605 |
|
|
|
11,974 |
Impairment and other charges |
|
|
— |
|
|
24,882 |
|
|
— |
|
|
|
24,882 |
Cloud computing amortization |
|
|
10 |
|
|
— |
|
|
4,469 |
|
|
|
4,479 |
Majority owned equity investees AOI |
|
|
7,287 |
|
|
— |
|
|
— |
|
|
|
7,287 |
Adjusted operating
income (loss) |
|
$ |
404,194 |
|
$ |
40,323 |
|
$ |
(51,977 |
) |
|
$ |
392,540 |
|
AMC NETWORKS INC.SUPPLEMENTAL FINANCIAL
DATA (Dollars in
thousands)(Unaudited) |
|
Capitalization |
June 30, 2024 |
|
Cash and cash equivalents |
$ |
802,553 |
|
|
|
|
Credit facility debt (a) |
$ |
416,875 |
|
Senior notes (a) |
|
2,003,760 |
|
Total debt |
$ |
2,420,635 |
|
|
|
|
Net debt |
$ |
1,618,082 |
|
|
|
|
Finance leases |
|
16,766 |
|
Net debt and finance leases |
$ |
1,634,848 |
|
|
|
|
|
Twelve Months Ended June 30, 2024 |
|
Operating Income (GAAP) |
$ |
230,373 |
|
Share-based compensation expense |
|
26,904 |
|
Depreciation and amortization |
|
108,101 |
|
Restructuring and other related charges |
|
18,744 |
|
Impairment and other charges |
|
168,626 |
|
Cloud computing amortization |
|
12,895 |
|
Majority owned equity investees |
|
13,852 |
|
Adjusted Operating Income
(Non-GAAP) |
$ |
579,495 |
|
|
|
|
Leverage ratio (b) |
|
2.8 |
x |
|
|
|
|
(a) Represents the
aggregate principal amount of the debt.(b) Represents net debt and
finance leases divided by Adjusted Operating Income for the twelve
months ended June 30, 2024. This ratio differs from the
calculation contained in the Company's credit facility. No
adjustments have been made for consolidated entities that are not
100% owned.
|
|
AMC NETWORKS INC.SUPPLEMENTAL FINANCIAL
DATA (Dollars in thousands)
(Unaudited) |
|
Free Cash Flow (1) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
|
$ |
104,403 |
|
|
$ |
157,566 |
|
|
$ |
255,272 |
|
|
$ |
25,047 |
|
Less: capital expenditures |
|
|
(9,238 |
) |
|
|
(9,952 |
) |
|
|
(15,958 |
) |
|
|
(21,450 |
) |
Free Cash Flow |
|
$ |
95,165 |
|
|
$ |
147,614 |
|
|
$ |
239,314 |
|
|
$ |
3,597 |
|
Supplemental Cash Flow Information |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Restructuring initiatives (2) |
|
$ |
(3,282 |
) |
|
$ |
(31,620 |
) |
|
$ |
(8,103 |
) |
|
$ |
(88,506 |
) |
Distributions to noncontrolling interests |
|
|
(15,352 |
) |
|
|
(15,585 |
) |
|
|
(16,520 |
) |
|
|
(27,087 |
) |
|
|
|
|
|
|
|
|
|
(1) Free Cash Flow
includes the impact of certain cash receipts or payments (such as
restructuring initiatives, significant legal settlements, and
programming write-offs) that affect period-to-period
comparability.
2) Restructuring
initiatives includes cash payments of $0.9 million and $2.2 million
for content impairments and other exit costs for the three and six
months ended June 30, 2024, respectively, and $2.4 million and $5.9
million for severance and employee-related costs for the three and
six months ended June 30, 2024, respectively. Restructuring
initiatives includes cash payments of $11.2 million and $52.2
million for content impairments and other exit costs for the three
and six months ended June 30, 2023, respectively, and $20.4 million
and $36.3 million for severance and employee-related costs for the
three and six months ended June 30, 2023, respectively.
|
AMC NETWORKS INC.SUPPLEMENTAL FINANCIAL DATA
(Dollars in thousands, except per share amounts)
(Unaudited) |
Adjusted Earnings Per Share |
|
|
Three Months Ended June 30, 2024 |
|
|
Income (loss) from operations before income taxes |
|
Income tax (expense) benefit |
|
Net (income) loss attributable to noncontrolling interests |
|
Net income (loss) attributable to AMC Networks' stockholders |
|
Diluted EPS attributable to AMC Networks' stockholders |
Reported Results (GAAP) |
|
$ |
(21,396 |
) |
|
$ |
(10,893 |
) |
|
$ |
3,055 |
|
|
$ |
(29,234 |
) |
|
$ |
(0.66 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangible assets |
|
|
9,608 |
|
|
|
(2,460 |
) |
|
|
(962 |
) |
|
|
6,186 |
|
|
|
0.14 |
|
Restructuring and other related charges |
|
|
2,931 |
|
|
|
(784 |
) |
|
|
— |
|
|
|
2,147 |
|
|
|
0.05 |
|
Impairment and other charges |
|
|
96,819 |
|
|
|
(3,801 |
) |
|
|
(14,616 |
) |
|
|
78,402 |
|
|
|
1.76 |
|
Gain on extinguishment of debt, net |
|
|
(247 |
) |
|
|
66 |
|
|
|
— |
|
|
|
(181 |
) |
|
|
— |
|
Dilutive income and share basis difference - GAAP vs.
Adjusted(1) |
|
|
153 |
|
|
|
(37 |
) |
|
|
— |
|
|
|
116 |
|
|
|
(0.05 |
) |
Adjusted Results (Non-GAAP) |
|
$ |
87,868 |
|
|
$ |
(17,909 |
) |
|
$ |
(12,523 |
) |
|
$ |
57,436 |
|
|
$ |
1.24 |
|
|
(1) For the
reconciliation of Adjusted EPS to GAAP EPS, the item “Dilutive
income and share basis difference - GAAP vs. Adjusted” represents
the impact of the adjustments from a net loss to net income
position, which required an adjustment for the interest expense
associated with the convertible debt and a change in the dilutive
shares outstanding to reflect additional dilutive shares associated
with restricted stock units and convertible debt that were
considered anti-dilutive on a GAAP basis.
|
|
|
Three Months Ended June 30, 2023 |
|
|
Income from operations before income taxes |
|
Income tax expense |
|
Net (income) loss attributable to noncontrolling interests |
|
Net income attributable to AMC Networks' stockholders |
|
Diluted EPS attributable to AMC Networks' stockholders |
Reported Results (GAAP) |
|
$ |
84,253 |
|
$ |
(22,155 |
) |
|
$ |
8,141 |
|
|
$ |
70,239 |
|
$ |
1.60 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangible assets |
|
|
10,469 |
|
|
(2,104 |
) |
|
|
(1,704 |
) |
|
|
6,661 |
|
|
0.15 |
Restructuring and other related charges |
|
|
6,041 |
|
|
(1,433 |
) |
|
|
(90 |
) |
|
|
4,518 |
|
|
0.11 |
Impairment and other charges |
|
|
24,882 |
|
|
(2,175 |
) |
|
|
(15,949 |
) |
|
|
6,758 |
|
|
0.15 |
Gain on extinguishment of debt, net |
|
|
605 |
|
|
(147 |
) |
|
|
— |
|
|
|
458 |
|
|
0.01 |
Adjusted Results (Non-GAAP) |
|
$ |
126,250 |
|
$ |
(28,014 |
) |
|
$ |
(9,602 |
) |
|
$ |
88,634 |
|
$ |
2.02 |
|
AMC NETWORKS INC.SUPPLEMENTAL FINANCIAL
DATA (Dollars in thousands, except per share
amounts) (Unaudited) |
|
Adjusted Earnings Per Share |
|
|
Six Months Ended June 30, 2024 |
|
|
Income (loss) from operations before income taxes |
|
Income tax (expense) benefit |
|
Net (income) loss attributable to noncontrolling interests |
|
Net income (loss) attributable to AMC Networks' stockholders |
|
Diluted EPS attributable to AMC Networks' stockholders |
Reported Results (GAAP) (1) |
|
$ |
59,789 |
|
|
$ |
(34,579 |
) |
|
$ |
(8,525 |
) |
|
$ |
16,685 |
|
|
$ |
0.37 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangible assets |
|
|
18,164 |
|
|
|
(4,333 |
) |
|
|
(1,924 |
) |
|
|
11,907 |
|
|
|
0.26 |
Restructuring and other related charges |
|
|
2,931 |
|
|
|
(784 |
) |
|
|
— |
|
|
|
2,147 |
|
|
|
0.05 |
Impairment and other charges |
|
|
96,819 |
|
|
|
(3,801 |
) |
|
|
(14,616 |
) |
|
|
78,402 |
|
|
|
1.72 |
Gain on extinguishment of debt, net |
|
|
(247 |
) |
|
|
66 |
|
|
|
— |
|
|
|
(181 |
) |
|
|
— |
Adjusted Results (Non-GAAP) |
|
$ |
177,456 |
|
|
$ |
(43,431 |
) |
|
$ |
(25,065 |
) |
|
$ |
108,960 |
|
|
$ |
2.40 |
|
(1) Includes the required adjustment for
interest expense associated with the convertible debt.
|
|
Six Months Ended June 30, 2023 |
|
|
Income from operations before income taxes |
|
Income tax expense |
|
Net (income) loss attributable to noncontrolling interests |
|
Net income attributable to AMC Networks' stockholders |
|
Diluted EPS attributable to AMC Networks' stockholders |
Reported Results (GAAP) |
|
$ |
232,445 |
|
$ |
(59,054 |
) |
|
$ |
458 |
|
|
$ |
173,849 |
|
$ |
3.97 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangible assets |
|
|
20,887 |
|
|
(4,175 |
) |
|
|
(3,409 |
) |
|
|
13,303 |
|
|
0.30 |
Restructuring and other related charges |
|
|
11,974 |
|
|
(2,777 |
) |
|
|
(204 |
) |
|
|
8,993 |
|
|
0.21 |
Impairment and other charges |
|
|
24,882 |
|
|
(2,175 |
) |
|
|
(15,949 |
) |
|
|
6,758 |
|
|
0.15 |
Gain on extinguishment of debt, net |
|
|
605 |
|
|
(147 |
) |
|
|
— |
|
|
|
458 |
|
|
0.01 |
Adjusted Results (Non-GAAP) |
|
$ |
290,793 |
|
$ |
(68,328 |
) |
|
$ |
(19,104 |
) |
|
$ |
203,361 |
|
$ |
4.64 |
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