AMC Networks Inc. ("AMC Networks" or the "Company") (NASDAQ: AMCX)
today reported financial results for the first quarter ended
March 31, 2023.
Chief Executive Officer Kristin
Dolan said: "AMC Networks has always been known for great
content that breaks through in popular culture, receives critical
acclaim and engages fans. In an environment of shifting
consumption, we are committed to making our content available
across the entire distribution ecosystem. While we reevaluate the
pathways to content monetization, we are strategically reducing
costs and streamlining our organization. These efforts contributed
to a first quarter with strong margins and increased streaming
revenue as we prioritized higher-value subscribers for our
streaming portfolio. We remain focused on the overall profitability
of the company as we continue to maintain a strong balance sheet,
drive free cash flow and maximize shareholder value."
Operational Highlights:
- Announced plans to
launch ad-supported version of AMC+ later this year.
- Unveiled Audience+,
a powerful new insights and data targeting platform that allows
advertising partners to identify and reach viewers across
ad-supported distribution platforms.
- Premiered second
series in an expanding Anne Rice Immortal Universe, Anne Rice’s
Mayfair Witches, which became the #1 freshman basic cable drama for
the 22/23 season, the most successful premiere in the history of
AMC+ and the most watched single season of any show on the
platform. With second seasons of Mayfair Witches and Anne Rice's
Interview with the Vampire on the way, announced development of a
third series set in the world of the Talamasca.
- Completed
production of the first season of TWD: Daryl Dixon and are
finishing production on a new The Walking Dead Universe series,
which reunites stars Andrew Lincoln and Danai Gurira in an epic
story of faith, struggle, love, and reunion.
- Strengthened WE
tv’s #1 position on ad-supported cable on Friday nights among
A25-54 and strong return to scripted content with the commission of
Bev is Boss, a new scripted drama based on the life of prolific
career-making hip-hop manager, Deb Antney.
- Debuted [OSHI
NO KO] on HIDIVE in April, the #1 series launch in HIDIVE's
history.
- Expanded
SundanceTV's successful True Crime Story franchise with the renewal
of It Couldn’t Happen Here, and the greenlight of two new series –
True Crime Story: Citizen Detective and Crimes of Entitlement.
Financial Highlights – First Quarter
Ended March 31, 2023:
- Net revenues
increased 1% from the prior year to $717 million, largely driven by
increased distribution and other revenues partly offset by lower
advertising revenues.
- Operating income
decreased 1% from the prior year to $173 million; Adjusted
Operating Income(1) increased 2% to $216 million, representing a
margin of 30%. Adjusted Operating Income benefited from significant
cost reduction measures including lower levels of marketing and
subscriber acquisition investment.
- Diluted EPS of
$2.36; Adjusted EPS(1) of $2.62.
-
Streaming subscribers grew 22% from the prior year to 11.5 million
subscribers as of March 31, 2023.
Dollars in thousands, except per share amounts |
Three Months Ended March 31, |
|
2023 |
|
|
|
2022 |
|
|
Change |
Net Revenues |
$ |
717,447 |
|
|
$ |
712,157 |
|
|
0.7 |
% |
Operating Income |
$ |
173,304 |
|
|
$ |
174,677 |
|
|
(0.8 |
)% |
Adjusted Operating Income |
$ |
215,763 |
|
|
$ |
211,184 |
|
|
2.2 |
% |
|
|
|
|
|
|
Diluted Earnings Per Share |
$ |
2.36 |
|
|
$ |
2.38 |
|
|
(0.8 |
)% |
Adjusted Earnings Per Share |
$ |
2.62 |
|
|
$ |
2.54 |
|
|
3.1 |
% |
|
|
|
|
|
|
Net cash used in operating activities |
$ |
(132,519 |
) |
|
$ |
(23,555 |
) |
|
n/m |
Free Cash Flow |
$ |
(144,017 |
) |
|
$ |
(35,083 |
) |
|
n/m |
(1) See page 4 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 March 31, |
|
2023 |
|
|
|
2022 |
|
|
Change |
Net Revenues: |
|
|
|
|
|
Domestic Operations |
$ |
611,854 |
|
|
$ |
605,543 |
|
|
1.0 |
% |
International and Other |
|
108,072 |
|
|
|
109,851 |
|
|
(1.6 |
)% |
Inter-segment Eliminations |
|
(2,479 |
) |
|
|
(3,237 |
) |
|
23.4 |
% |
Total Net Revenues |
$ |
717,447 |
|
|
$ |
712,157 |
|
|
0.7 |
% |
|
|
|
|
|
|
Operating Income (Loss): |
|
|
|
|
|
Domestic Operations |
$ |
199,488 |
|
|
$ |
198,522 |
|
|
0.5 |
% |
International and Other |
|
14,142 |
|
|
|
17,355 |
|
|
(18.5 |
)% |
Corporate / Inter-segment Eliminations |
|
(40,326 |
) |
|
|
(41,200 |
) |
|
2.1 |
% |
Total Operating Income |
$ |
173,304 |
|
|
$ |
174,677 |
|
|
(0.8 |
)% |
|
|
|
|
|
|
Adjusted Operating Income (Loss): |
|
|
|
|
|
Domestic Operations |
$ |
219,388 |
|
|
$ |
219,219 |
|
|
0.1 |
% |
International and Other |
|
21,137 |
|
|
|
23,012 |
|
|
(8.1 |
)% |
Corporate / Inter-segment Eliminations |
|
(24,762 |
) |
|
|
(31,047 |
) |
|
20.2 |
% |
Total Adjusted Operating Income |
$ |
215,763 |
|
|
$ |
211,184 |
|
|
2.2 |
% |
Domestic Operations
First Quarter Results:
- Domestic
Operations' revenues increased 1% from the prior year to $612
million.
- Distribution and
other revenues increased 11% to $451 million.
- Content
licensing revenues increased 69% to $103 million due to the timing
and availability of deliveries in the period, including the
delivery of the remaining episodes of an AMC Studios produced
series to a third party.
- Subscription
revenues grew 1% due to increased streaming revenues, partially
offset by declines in the linear subscriber universe.
- Streaming
revenues increased 29%, primarily driven by year-over-year
streaming subscriber growth and 2022 price increases. Quarter end
total streaming subscribers were 11.5 million.
- Affiliate
revenues declined 11.7% due to basic subscriber declines and the 3%
impact of a strategic non-renewal that occurred at the end of 2022,
partly offset by contractual rate increases.
- Advertising
revenues decreased 20% to $161 million due to anticipated linear
ratings declines, softness in the advertising market and fewer
original programming episodes within the quarter, partly offset by
digital and advanced advertising revenue growth.
- Operating income
of $199 million was consistent with the prior year.
- Adjusted
Operating Income of $219 million, with a margin of 36%, was
consistent with the prior year, reflecting increased streaming
revenues and lower levels of content and subscriber acquisition
investment, partly offset by lower advertising and affiliate
revenues.
International and Other
First Quarter Results:
- International
and Other revenues decreased 2% from the prior year to $108
million; or an increase of 3% excluding the impact of foreign
currency translation.
- Distribution and
other revenues increased 2% to $90 million, primarily due to the
timing and nature of productions at 25/7 Media; or an increase of
6% excluding the impact of foreign currency translation.
- Advertising
revenues decreased 17% to $19 million, primarily due to the
wind-down of two channels in 2022 and marketplace declines in the
U.K.; or a decrease of 10% excluding the impact of foreign currency
translation.
- Operating income
decreased 19% to $14 million.
- Adjusted
Operating Income decreased 8% to $21 million, primarily due to
lower revenues at AMCNI and an increase in technical and operating
expenses, partly offset by a decrease in selling, general and
administrative expenses; or a decrease of 9% excluding the impact
of foreign currency translation.
Other Matters
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 closing date and may be
suspended or discontinued at any time. During the quarter ended
March 31, 2023, the Company did not repurchase any shares. As
of March 31, 2023, the Company had $135 million of
authorization remaining for repurchase under the Stock Repurchase
Program.
As of May 2, 2023, the Company had 32,019,659
shares of Class A Common Stock and 11,484,408 shares of Class B
Common Stock outstanding.
Please see the Company’s Form 10-Q for the
period ended March 31, 2023, which will be filed later today,
for further details regarding the above matters.
Description of Non-GAAP
Measures
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.
Internally, the Company uses net revenues and
Adjusted Operating Income (Loss) measures as the most important
indicators of its business performance and evaluates management’s
effectiveness with specific reference to these indicators. 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 page 7 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 9 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 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 page 9 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 first quarter 2023 results. To
listen to the call, please visit investors.amcnetworks.com.
About AMC Networks Inc.
AMC Networks (Nasdaq: AMCX) is a global
entertainment company known for its popular and critically
acclaimed content. Its brands include targeted streaming services
AMC+, Acorn TV, Shudder, Sundance Now, ALLBLK and the anime-focused
HIDIVE streaming service, in addition to AMC, BBC AMERICA (operated
through a joint venture with BBC Studios), IFC, SundanceTV, WE tv,
IFC Films and RLJE Films. AMC Studios, the Company’s in-house
studio, production and distribution operation, is behind some of
the biggest titles and brands known to a global audience, including
The Walking Dead, the Anne Rice catalog and the Agatha Christie
library. The Company also operates AMC Networks International, its
international programming business, and 25/7 Media, its production
services business.
Contacts
Investor Relations |
|
Corporate Communications |
Nicholas Seibert (646) 740-5749 |
|
Georgia Juvelis (917) 542-6390 |
nicholas.seibert@amcnetworks.com |
|
georgia.juvelis@amcnetworks.com |
|
|
|
AMC NETWORKS INC.CONSOLIDATED STATEMENTS
OF INCOME (Dollars in thousands, except per share
amounts)(unaudited) |
|
|
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Revenues, net |
$ |
717,447 |
|
|
$ |
712,157 |
|
Operating expenses: |
|
|
|
Technical and operating (excluding depreciation and
amortization) |
|
326,729 |
|
|
|
284,237 |
|
Selling, general and administrative |
|
185,606 |
|
|
|
230,653 |
|
Depreciation and amortization |
|
25,875 |
|
|
|
22,590 |
|
Restructuring and other related charges |
|
5,933 |
|
|
|
— |
|
Total operating expenses |
|
544,143 |
|
|
|
537,480 |
|
Operating income |
|
173,304 |
|
|
|
174,677 |
|
Other income (expense): |
|
|
|
Interest expense |
|
(37,617 |
) |
|
|
(30,797 |
) |
Interest income |
|
7,916 |
|
|
|
2,460 |
|
Miscellaneous, net |
|
4,589 |
|
|
|
5,828 |
|
Total other expense |
|
(25,112 |
) |
|
|
(22,509 |
) |
Income from operations before income taxes |
|
148,192 |
|
|
|
152,168 |
|
Income tax expense |
|
(36,899 |
) |
|
|
(41,634 |
) |
Net income including noncontrolling interests |
|
111,293 |
|
|
|
110,534 |
|
Net income attributable to noncontrolling interests |
|
(7,683 |
) |
|
|
(6,346 |
) |
Net income attributable to AMC Networks’ stockholders |
$ |
103,610 |
|
|
$ |
104,188 |
|
|
|
|
|
Net income per share
attributable to AMC Networks’ stockholders: |
|
|
|
Basic |
$ |
2.37 |
|
|
$ |
2.44 |
|
Diluted |
$ |
2.36 |
|
|
$ |
2.38 |
|
|
|
|
|
Weighted average common shares: |
|
|
|
Basic |
|
43,628 |
|
|
|
42,780 |
|
Diluted |
|
43,837 |
|
|
|
43,715 |
|
|
AMC NETWORKS INC. SUPPLEMENTAL FINANCIAL
DATA (Dollars in thousands)
(Unaudited) |
|
|
Three Months Ended March 31, 2023 |
|
DomesticOperations |
|
Internationaland Other |
|
Corporate /Inter-segmentEliminations |
|
Consolidated |
Operating income (loss) |
$ |
199,488 |
|
|
$ |
14,142 |
|
|
$ |
(40,326 |
) |
|
$ |
173,304 |
|
Share-based compensation expenses |
|
4,447 |
|
|
|
839 |
|
|
|
359 |
|
|
|
5,645 |
|
Depreciation and amortization |
|
11,854 |
|
|
|
4,771 |
|
|
|
9,250 |
|
|
|
25,875 |
|
Restructuring and other related charges |
|
818 |
|
|
|
1,385 |
|
|
|
3,730 |
|
|
|
5,933 |
|
Cloud computing amortization |
|
5 |
|
|
|
— |
|
|
|
2,225 |
|
|
|
2,230 |
|
Majority owned equity investees AOI |
|
2,776 |
|
|
|
— |
|
|
|
— |
|
|
|
2,776 |
|
Adjusted operating income (loss) |
$ |
219,388 |
|
|
$ |
21,137 |
|
|
$ |
(24,762 |
) |
|
$ |
215,763 |
|
|
Three Months Ended March 31, 2022 |
|
DomesticOperations |
|
Internationaland Other |
|
Corporate /Inter-segmentEliminations |
|
Consolidated |
Operating income
(loss) |
$ |
198,522 |
|
|
$ |
17,355 |
|
|
$ |
(41,200 |
) |
|
$ |
174,677 |
|
Share-based compensation expenses |
|
3,673 |
|
|
|
754 |
|
|
|
3,702 |
|
|
|
8,129 |
|
Depreciation and amortization |
|
12,136 |
|
|
|
4,903 |
|
|
|
5,551 |
|
|
|
22,590 |
|
Cloud computing amortization |
|
7 |
|
|
|
— |
|
|
|
900 |
|
|
|
907 |
|
Majority owned equity investees AOI |
|
4,881 |
|
|
|
— |
|
|
|
— |
|
|
|
4,881 |
|
Adjusted operating
income (loss) |
$ |
219,219 |
|
|
$ |
23,012 |
|
|
$ |
(31,047 |
) |
|
$ |
211,184 |
|
|
|
AMC NETWORKS INC.SUPPLEMENTAL FINANCIAL
DATA (Dollars in thousands, except per share
amounts)(Unaudited) |
|
|
|
Capitalization |
March 31, 2023 |
|
Cash and cash equivalents |
$ |
763,932 |
|
|
|
|
|
Credit facility debt (a) |
$ |
632,813 |
|
|
Senior notes (a) |
|
2,200,000 |
|
|
Total debt |
$ |
2,832,813 |
|
|
|
|
|
Net debt |
$ |
2,068,881 |
|
|
|
|
|
Finance leases |
|
22,273 |
|
|
Net debt and finance leases |
$ |
2,091,154 |
|
|
|
|
|
|
Twelve Months EndedMarch 31, 2023 |
|
Operating Income (GAAP) |
$ |
85,543 |
|
|
Share-based compensation expense |
|
27,502 |
|
|
Depreciation and amortization |
|
110,512 |
|
|
Restructuring and other related charges |
|
454,899 |
|
|
Impairment and other charges |
|
40,717 |
|
|
Cloud computing amortization |
|
8,665 |
|
|
Majority owned equity investees |
|
15,143 |
|
|
Adjusted Operating Income (Non-GAAP) |
$ |
742,981 |
|
|
|
|
|
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 March 31, 2023. 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, except per share
amounts) (Unaudited) |
|
Free Cash Flow (1)
(2) |
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Net cash used in operating activities |
$ |
(132,519 |
) |
|
$ |
(23,555 |
) |
Less: capital expenditures |
|
(11,498 |
) |
|
|
(11,528 |
) |
Free Cash Flow |
$ |
(144,017 |
) |
|
$ |
(35,083 |
) |
Supplemental Cash Flow Information |
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Restructuring initiatives (3) |
$ |
(56,886 |
) |
|
$ |
— |
|
Distributions to noncontrolling interests |
|
(11,502 |
) |
|
|
(1,565 |
) |
(1) Beginning with the first quarter of 2023, we adjusted our free
cash flow definition to exclude distributions to non-controlling
interests which are discretionary in nature. Prior period amounts
have been adjusted to conform to the current period
presentation. |
(2) 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. |
(3) Restructuring initiatives includes cash payments of $41.0
million for content impairments and other exit costs and $15.9
million for severance and employee-related costs. |
Adjusted Earnings Per Share |
|
Three Months Ended March 31, 2023 |
|
Income fromoperationsbefore incometaxes |
|
Income taxexpense |
|
Net incomeattributable tononcontrollinginterests |
|
Net incomeattributable toAMC Networks'stockholders |
|
Diluted EPSattributable toAMC Networks'stockholders |
Reported Results (GAAP) |
$ |
148,192 |
|
|
$ |
(36,899 |
) |
|
$ |
(7,683 |
) |
|
$ |
103,610 |
|
|
$ |
2.36 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangible assets |
|
10,418 |
|
|
|
(2,071 |
) |
|
|
(1,705 |
) |
|
|
6,642 |
|
|
|
0.15 |
|
Restructuring and other related charges |
|
5,933 |
|
|
|
(1,344 |
) |
|
|
(114 |
) |
|
|
4,475 |
|
|
|
0.11 |
|
Impairment and other charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted Results (Non-GAAP) |
$ |
164,543 |
|
|
$ |
(40,314 |
) |
|
$ |
(9,502 |
) |
|
$ |
114,727 |
|
|
$ |
2.62 |
|
|
Three Months Ended March 31, 2022 |
|
Income fromoperationsbefore incometaxes |
|
Income taxexpense |
|
Net incomeattributable tononcontrollinginterests |
|
Net incomeattributable toAMC Networks'stockholders |
|
Diluted EPSattributable toAMC Networks'stockholders |
Reported Results (GAAP) |
$ |
152,168 |
|
|
$ |
(41,634 |
) |
|
$ |
(6,346 |
) |
|
$ |
104,188 |
|
|
$ |
2.38 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Amortization of acquisition-related intangible assets |
|
10,564 |
|
|
|
(2,087 |
) |
|
|
(1,680 |
) |
|
|
6,797 |
|
|
|
0.16 |
|
Restructuring and other related charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Impairment and other charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted Results (Non-GAAP) |
$ |
162,732 |
|
|
$ |
(43,721 |
) |
|
$ |
(8,026 |
) |
|
$ |
110,985 |
|
|
$ |
2.54 |
|
Grafico Azioni AMC Networks (NASDAQ:AMCX)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni AMC Networks (NASDAQ:AMCX)
Storico
Da Mag 2023 a Mag 2024