10-Q 1 wwe-20220331x10q.htm 10-Q wwe-20220331x10q
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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 March 31, 2022

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

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 May 3, 2022, the number of shares outstanding of the Registrant’s Class A common stock, par value $.01 per share, was 43,246,147 and the number of shares outstanding of the Registrant’s Class B common stock, par value $.01 per share, was 31,099,011.

TABLE OF CONTENTS

Page #

Part I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (unaudited)

2

Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021

2

Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021

3

Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021

4

Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2022 and 2021

5

Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021

6

Notes to Consolidated Financial Statements

7

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

26

Item 3. Quantitative and Qualitative Disclosures about Market Risk

34

Item 4. Controls and Procedures

34

Part II – OTHER INFORMATION

35

Item 1. Legal Proceedings

35

Item 1A. Risk Factors

35

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

35

Item 6. Exhibits

36

Signatures

37

 

WORLD WRESTLING ENTERTAINMENT, INC.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

Three Months Ended

March 31,

2022

2021

Net revenues

$

333,448

$

263,524

Operating expenses

180,685

142,154

Marketing and selling expenses

18,420

18,912

General and administrative expenses

32,227

26,560

Depreciation and amortization

9,707

10,842

Operating income

92,409

65,056

Interest expense

6,345

8,508

Other income, net

321

556

Income before income taxes

86,385

57,104

Provision for income taxes

20,344

13,272

Net income

$

66,041

$

43,832

Earnings per share: basic

$

0.88

$

0.57

Earnings per share: diluted

$

0.77

$

0.51

Weighted average common shares outstanding:

Basic

74,781

77,376

Diluted

87,575

85,686

Dividends declared per common share (Class A and B)

$

0.12

$

0.12


See accompanying notes to consolidated financial statements.

2


WORLD WRESTLING ENTERTAINMENT, INC.

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

Three Months Ended

March 31,

2022

2021

Net income

$

66,041

$

43,832

Other comprehensive loss:

Foreign currency translation adjustments

(60)

(46)

Net unrealized holding losses on available-for-sale debt securities (net of tax benefit of $525 and $7, respectively)

(1,663)

(21)

Total other comprehensive loss

(1,723)

(67)

Comprehensive income

$

64,318

$

43,765


See accompanying notes to consolidated financial statements.

3


WORLD WRESTLING ENTERTAINMENT, INC.

Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

As of

March 31,

December 31,

2022

2021

Assets

Current assets:

Cash and cash equivalents

$

105,594

$

134,828

Short-term investments, net

342,219

280,957

Accounts receivable (net of allowance for doubtful accounts and returns
   of $5,157 and $5,155, respectively)

163,192

171,196

Inventory, net

9,200

8,033

Prepaid expenses and other current assets

30,716

32,242

Total current assets

650,921

627,256

Property and equipment, net

183,793

172,677

Finance lease right-of-use assets, net

308,549

313,360

Operating lease right-of-use assets, net

14,723

8,973

Content production assets, net

15,798

13,781

Investment securities

11,618

11,618

Deferred income tax assets, net

16,745

13,100

Other assets, net

43,201

43,302

Total assets

$

1,245,348

$

1,204,067

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt

$

435

$

430

Finance lease liabilities

12,465

12,190

Operating lease liabilities

3,783

4,755

Convertible debt

213,396

201,093

Accounts payable and accrued expenses

111,121

120,516

Deferred revenues

83,947

74,633

Total current liabilities

425,147

413,617

Long-term debt

21,173

21,284

Finance lease liabilities

370,948

374,681

Operating lease liabilities

11,547

5,063

Other non-current liabilities

10,689

8,162

Total liabilities

839,504

822,807

Commitments and contingencies

 

 

Stockholders' equity:

Class A common stock: ($0.01 par value; 180,000,000 shares authorized;
   43,242,334 and 43,732,977 shares issued and outstanding as of
   March 31, 2022 and December 31, 2021, respectively)

433

438

Class B convertible common stock: ($0.01 par value; 60,000,000 shares authorized;

   31,099,011 shares issued and outstanding)

311

311

Additional paid-in capital

386,562

409,884

Accumulated other comprehensive income

697

2,420

Retained earnings (accumulated deficit)

17,841

(31,793)

Total stockholders’ equity

405,844

381,260

Total liabilities and stockholders' equity

$

1,245,348

$

1,204,067


See accompanying notes to consolidated financial statements.

4


WORLD WRESTLING ENTERTAINMENT, INC.

Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)

Three Months Ended March 31, 2022

Accumulated

Retained

Common Stock

Additional

Other

Earnings

Class A

Class B

Paid - in

Comprehensive

(Accumulated

Shares

Amount

Shares

Amount

Capital

Income

Deficit)

Total

Balance, December 31, 2021

43,733 

$

438 

31,099 

$

311 

$

409,884 

$

2,420 

$

(31,793)

$

381,260 

Cumulative effect of adopting ASU 2020-06

(26,383)

17,609 

(8,774)

Net income

66,041 

66,041 

Other comprehensive loss

(1,723)

(1,723)

Repurchases and retirements of common stock

(525)

(5)

(4,916)

(25,085)

(30,006)

Stock issuances, net

34 

1,239 

1,239 

Taxes paid related to net settlement upon vesting of equity awards

(32)

(32)

Cash dividends declared

(8,931)

(8,931)

Stock-based compensation

6,770 

6,770 

Balance, March 31, 2022

43,242 

$

433 

31,099 

$

311 

$

386,562 

$

697 

$

17,841 

$

405,844 

Three Months Ended March 31, 2021

Accumulated

Retained

Common Stock

Additional

Other

Earnings

Class A

Class B

Paid - in

Comprehensive

(Accumulated

Shares

Amount

Shares

Amount

Capital

Income

Deficit)

Total

Balance, December 31, 2020

46,695 

$

467 

31,099 

$

311 

$

424,758 

$

2,985 

$

(39,727)

$

388,794 

Net income

43,832 

43,832 

Other comprehensive loss

(67)

(67)

Repurchases and retirements of common stock

(1,498)

(15)

(13,625)

(61,360)

(75,000)

Stock issuances and other, net

60 

1 

1,962 

1,963 

Taxes paid related to net settlement upon vesting of equity awards

(629)

(629)

Cash dividends declared

(9,160)

(9,160)

Stock-based compensation

7,548 

7,548 

Balance, March 31, 2021

45,257 

$

453 

31,099 

$

311 

$

420,014 

$

2,918 

$

(66,415)

$

357,281 


See accompanying notes to consolidated financial statements.

5


WORLD WRESTLING ENTERTAINMENT, INC.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three Months Ended

March 31,

2022

2021

OPERATING ACTIVITIES:

Net income

$

66,041

$

43,832

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization and impairments of content production assets

9,820

5,823

Depreciation and amortization

11,980

12,643

Other amortization

3,516

4,222

Stock-based compensation

9,618

7,980

Provision for (benefit from) deferred income taxes

297

(453)

Other non-cash adjustments

345

817

Cash provided by (used in) changes in operating assets and liabilities:

Accounts receivable

7,799

(32,864)