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WWE LOWERS FINANCIAL OUTLOOK FOR THE REST OF 2013

By Dave Scherer on 2013-09-13 18:03:26

No wonder they want to do what is "best for business".  WWE released the following today, after the stock market closed. Suffice it to say, this is not positive news and I would expect the stock to be impacted on Monday.

WWE® Revises 2013 Outlook

 

STAMFORD, Conn.--(BUSINESS WIRE)--WWE (WWE) today announced a revised financial outlook for the full year ending December 31, 2013. The Company expects 2013 OIBDA results, excluding the impact of film impairments, to range between $40 million and $50 million.1,2 The revision is primarily due to several recent developments that caused an approximate 5% reduction in second half revenue expectations. This, coupled with the Company’s high operating leverage, was the primary driver of the change in expected earnings. (See Exhibit: 2013 Outlook below)
"Our revised 2013 Outlook reflects a relatively moderate change in our second half revenue expectations and our continued investment in the WWE brand and our content,” said George Barrios, Chief Financial Officer. “Given the rising value of content in the market place, we believe these investments will maximize WWE’s future earnings as we renegotiate our four largest television distribution agreements and potentially launch a WWE Network.”
            

       

Exhibit: 2013 Outlook 2,3

       
$ in millions  2012  2013 Outlook
   Actual   
       

OIBDA

  

$63.2

  

$40 to $50, excluding 2013 film impairments and any revenues or additional

 

  

 

  

expenses directly associated with the launch of a WWE Network

       
       
Depreciation  $20.0  Approximately $22 to $24
       
       
Operating Income  $43.2  $16 to $28, excluding 2013 film impairments
       
       
Net Income  $31.4  

2013 affected by:

      

‚óŹ After tax impact of change in Operating Income

      

‚óŹ Normalization of tax rate (34%-37%)

      

‚óŹ Any changes in "Other expense, net" 4

       
Capital  $33.9  Approximately $55 to $60, of which 60% is a one-time
Expenditures     expenditure to replace the corporate jet
       
       
Film Spending  $8.7  Approximately $15 to $20
(net of tax credits)      
       

Notes:

 

1

  The revised guidance compares to previous expectations that the Company’s results, excluding the impact of film impairments, would fall within the lower end of the range defined by plus or minus 10 percent from the Company’s 2012 OIBDA results (or within the lower end of the range from $56.9 million to $69.5 million). WWE results for the six months ended June 30, 2013 reflect a $4.7 million film impairment charge.
    

2

  The Company is presenting its revised outlook in terms of OIBDA rather than EBITDA because the Company changed its measure of segment profit (loss) from EBITDA to OIBDA in the first quarter of 2013. OIBDA excludes certain material items, which otherwise would impact the comparability of results between periods. It should not be considered as an alternative to net income, cash flows from operations or any other indicator of WWE's performance or liquidity, determined in accordance with U.S. GAAP.
    
   We define OIBDA as operating income before depreciation and amortization, excluding feature film amortization and film impairments. OIBDA is a non-GAAP financial measure and may be different than similarly-titled non-GAAP financial measures used by other companies. A limitation of OIBDA is that it excludes depreciation and amortization, which represents the periodic charge for certain fixed assets and intangible assets used in generating revenues for our business. OIBDA should not be regarded as an alternative to operating income or net income as an indicator of operating performance, or to the statement of cash flows as a measure of liquidity, nor should it be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. We believe that operating income is the most directly comparable GAAP financial measure to OIBDA.
    

3

  

WWE is currently developing its 2014 business plan and the Company’s 2014 outlook will be communicated with the completion of that plan.

    

4

  

“Other expense, net” includes investment income, interest and other expense, net.