World Wrestling Entertainmentinc (WWE) has reported a 93.53 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $0.90 million, or $0.01 a share in the quarter, compared with $13.90 million, or $0.18 a share for the same period last year. On an adjusted basis, the company has earned $5.90 million, or $0.08 a share for the quarter. Revenue during the quarter grew 10.11 percent to $188.40 million from $171.10 million in the previous year period. Gross margin for the quarter contracted 338 basis points over the previous year period to 42.09 percent. Total expenses were 97.88 percent of quarterly revenues, up from 87.14 percent for the same period last year. That has resulted in a contraction of 1073 basis points in operating margin to 2.12 percent.
Operating income for the quarter was $4 million, compared with $22 million in the previous year period.
However, the adjusted operating profit for the quarter stood at $11.70 million.
"We are pleased with the continued growth of WWE Network, which is a critical building block of our content strategy," said WWE Chairman & CEO Vince McMahon. "The recent production of WrestleMania set records for network viewership as well as digital and social engagement. As we leverage continuing innovation to extend our reach in India, China and around the world, we are confident that the enduring and increasing global power of our brands will provide a solid foundation for long-term growth."
Operating cash flow improves significantly
World Wrestling Entertainmentinc has generated cash of $3 million from operating activities during the quarter, up 100 percent or $1.50 million, when compared with the last year period. The company has spent $54.60 million cash to meet investing activities during the quarter as against cash outgo of $6.70 million in the last year period.
Cash flow from financing activities was $5.20 million for the quarter as against cash outgo of $9.60 million in the last year period.
Cash and cash equivalents stood at $165.60 million as on Mar. 31, 2017, up 613.76 percent or $142.40 million from $23.20 million on Mar. 31, 2016.
Working capital increases sharply
World Wrestling Entertainmentinc has recorded an increase in the working capital over the last year. It stood at $230.60 million as at Mar. 31, 2017, up 370.77 percent or $181.62 million from $48.98 million on Mar. 31, 2016. Current ratio was at 2.75 as on Mar. 31, 2017, up from 1.42 on Mar. 31, 2016.
Days sales outstanding went down to 27 days for the quarter compared with 29 days for the same period last year.
Days inventory outstanding has decreased to 3 days for the quarter compared with 7 days for the previous year period.
Debt increases substantially
World Wrestling Entertainmentinc has witnessed an increase in total debt over the last one year. It stood at $216.10 million as on Mar. 31, 2017, up 955.49 percent or $195.63 million from $20.47 million on Mar. 31, 2016. Total debt was 35.54 percent of total assets as on Mar. 31, 2017, compared with 5.19 percent on Mar. 31, 2016. Debt to equity ratio was at 0.90 as on Mar. 31, 2017, up from 0.09 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 1.14 for the quarter from 36.67 for the same period last year.
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