NEW YORK, May 05, 2022 (GLOBE NEWSWIRE) -- AMC Networks Inc. (“AMC Networks” or the “Company”) (NASDAQ: AMCX) today reported financial results for the first quarter ended March 31, 2022.
Interim Chief Executive Officer Matt Blanksaid: "AMC Networks had solid first quarter performance, highlighted by 3% total company revenue growth and continued growth of our streaming portfolio to end the quarter with 9.5 million total subscribers. We continue to advance our differentiated strategy of offering streaming services that appeal to audiences with distinct affinities and passions, which is leading to strong consumer loyalty and low churn. 2022 is the biggest year of original programming in AMC Networks’ history and our content continues to break through, including the recent final season premiere of Better Call Saul, which drove record levels of subscriber acquisition for AMC+. With our content cost advantages, our ability to super serve audiences, and our clear path to profitability by virtue of our unique strategy, we are reaffirming our full year 2022 financial outlook and our target of achieving 20 million to 25 million streaming subscribers in 2025, as we continue to reconstitute our revenue mix and as we remain focused on profitability.”
First Quarter Financial Highlights:
Dollars in thousands, except per share amounts | Three Months Ended March 31, | ||||||||
2022 | 2021 | Change | |||||||
Net Revenues | $ | 712,157 | $ | 691,741 | 3.0 | % | |||
Operating Income | $ | 174,677 | $ | 169,708 | 2.9 | % | |||
Adjusted Operating Income | $ | 211,184 | $ | 237,979 | (11.3 | )% | |||
Diluted Earnings Per Share | $ | 2.38 | $ | 2.02 | 17.8 | % | |||
Adjusted Diluted Earnings Per Share | $ | 2.54 | $ | 2.98 | (14.8 | )% | |||
Net cash (used in) provided by operating activities | $ | (23,555 | ) | $ | 107,563 | (121.9 | )% | ||
Free Cash Flow(1) | $ | (36,648 | ) | $ | 96,562 | (138.0 | )% |
Operational Highlights:
Segment Results(dollars in thousands)
Three Months Ended March 31, | ||||||||||
2022 | 2021 | Change | ||||||||
Net Revenues: | ||||||||||
Domestic Operations | $ | 605,543 | $ | 573,969 | 5.5 | % | ||||
International and Other | 109,851 | 121,167 | (9.3 | )% | ||||||
Inter-segment Eliminations | (3,237 | ) | (3,395 | ) | 4.7 | % | ||||
Total Net Revenues | $ | 712,157 | $ | 691,741 | 3.0 | % | ||||
Operating Income (Loss): | ||||||||||
Domestic Operations | $ | 198,522 | $ | 216,459 | (8.3 | )% | ||||
International and Other | 17,355 | (3,162 | ) | 648.9 | % | |||||
Corporate / Inter-segment Eliminations | (41,200 | ) | (43,589 | ) | 5.5 | % | ||||
Total Operating Income | $ | 174,677 | $ | 169,708 | 2.9 | % | ||||
Adjusted Operating Income (Loss): | ||||||||||
Domestic Operations | $ | 219,219 | $ | 242,533 | (9.6 | )% | ||||
International and Other | 23,012 | 23,563 | (2.3 | )% | ||||||
Corporate / Inter-segment Eliminations | (31,047 | ) | (28,117 | ) | (10.4 | )% | ||||
Total Adjusted Operating Income | $ | 211,184 | $ | 237,979 | (11.3 | )% |
Domestic Operations
First Quarter Results:
International and Other
First Quarter Results:
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, 2022, the Company did not repurchase any shares. As of March 31, 2022, the Company had $135 million of authorization remaining for repurchase under the Stock Repurchase Program.
As of April 29, 2022 the Company had 31,434,451 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, 2022, 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 and cash distributions to noncontrolling interests, 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 8 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 10:30 a.m. ET to discuss its first quarter 2022 results. To listen to the call, visit http://www.amcnetworks.com or dial 833-714-3268, using the following conference ID: 4761098.
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 newest addition to its targeted streaming portfolio, the anime-focused HIDIVE streaming service, in addition to AMC, BBC AMERICA (operated through a joint venture with BBC Studios), IFC, SundanceTV, WE tv and IFC 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, | |||||||
2022 | 2021 | ||||||
Revenues, net | $ | 712,157 | $ | 691,741 | |||
Operating expenses: | |||||||
Technical and operating (excluding depreciation and amortization) | 284,237 | 280,572 | |||||
Selling, general and administrative | 230,653 | 191,535 | |||||
Depreciation and amortization | 22,590 | 25,246 | |||||
Impairment and other charges | — | 16,055 | |||||
Restructuring and other related charges | — | 8,625 | |||||
Total operating expenses | 537,480 | 522,033 | |||||
Operating income | 174,677 | 169,708 | |||||
Other income (expense): | |||||||
Interest expense | (30,797 | ) | (34,742 | ) | |||
Interest income | 2,460 | 2,342 | |||||
Loss on extinguishment of debt | — | (22,074 | ) | ||||
Miscellaneous, net | 5,828 | 5,406 | |||||
Total other expense | (22,509 | ) | (49,068 | ) | |||
Income from operations before income taxes | 152,168 | 120,640 | |||||
Income tax expense | (41,634 | ) | (25,915 | ) | |||
Net income including noncontrolling interests | 110,534 | 94,725 | |||||
Net income attributable to noncontrolling interests | (6,346 | ) | (7,704 | ) | |||
Net income attributable to AMC Networks’ stockholders | $ | 104,188 | $ | 87,021 | |||
Net income per share attributable to AMC Networks’ stockholders: | |||||||
Basic | $ | 2.44 | $ | 2.08 | |||
Diluted | $ | 2.38 | $ | 2.02 | |||
Weighted average common shares: | |||||||
Basic | 42,780 | 41,930 | |||||
Diluted | 43,715 | 43,171 |
AMC NETWORKS INC.SUPPLEMENTAL FINANCIAL DATA(Dollars in thousands)(Unaudited)
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 | ||||||||
Restructuring and other related charges | — | — | — | — | ||||||||
Impairment and other charges | — | — | — | — | ||||||||
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 |
Three Months Ended March 31, 2021 | |||||||||||||
DomesticOperations | Internationaland Other | Corporate /Inter-segmentEliminations | Consolidated | ||||||||||
Operating income (loss) | $ | 216,459 | $ | (3,162 | ) | $ | (43,589 | ) | $ | 169,708 | |||
Share-based compensation expenses | 5,639 | 1,231 | 6,576 | 13,446 | |||||||||
Depreciation and amortization | 13,373 | 4,949 | 6,924 | 25,246 | |||||||||
Restructuring and other related charges | 2,427 | 4,490 | 1,708 | 8,625 | |||||||||
Impairment and other charges | — | 16,055 | — | 16,055 | |||||||||
Cloud computing amortization | — | — | 264 | 264 | |||||||||
Majority owned equity investees AOI | 4,635 | — | — | 4,635 | |||||||||
Adjusted operating income (loss) | $ | 242,533 | $ | 23,563 | $ | (28,117 | ) | $ | 237,979 |
AMC NETWORKS INC.SUPPLEMENTAL FINANCIAL DATA(Dollars in thousands, except per share amounts)(Unaudited)
Capitalization | March 31, 2022 | ||
Cash and cash equivalents | $ | 821,626 | |
Credit facility debt (a) | $ | 666,563 | |
Senior notes (a) | 2,200,000 | ||
Total debt | $ | 2,866,563 | |
Net debt | $ | 2,044,937 | |
Finance leases | 26,320 | ||
Net debt and finance leases | $ | 2,071,257 | |
Twelve Months EndedMarch 31, 2022 | |||
Operating Income (GAAP) | $ | 494,891 | |
Share-based compensation expense | 42,608 | ||
Depreciation and amortization | 91,225 | ||
Impairment and other charges | 143,555 | ||
Restructuring and other related charges | 1,753 | ||
Cloud computing amortization | 3,049 | ||
Majority owned equity investees | 12,194 | ||
Adjusted Operating Income (Non-GAAP) | $ | 789,275 | |
Leverage ratio (b) | 2.6 | x |
Free Cash Flow | Three Months Ended March 31, | ||||||
2022 | 2021 | ||||||
Net cash (used in) provided by operating activities | $ | (23,555 | ) | $ | 107,563 | ||
Less: capital expenditures | (11,528 | ) | (8,537 | ) | |||
Less: distributions to noncontrolling interests | (1,565 | ) | (2,464 | ) | |||
Free cash flow | $ | (36,648 | ) | $ | 96,562 |
Adjusted Diluted Earnings Per Share | ||||||||||||||||
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 | |||||||||
Impairment and other charges | — | — | — | — | — | |||||||||||
Restructuring and other related charges | — | — | — | — | — | |||||||||||
Loss on extinguishment of debt | — | — | — | — | — | |||||||||||
Adjusted Results (Non-GAAP) | $ | 162,732 | $ | (43,721 | ) | $ | (8,026 | ) | $ | 110,985 | $ | 2.54 |
Three Months Ended March 31, 2021 | ||||||||||||||||
Income fromoperationsbefore incometaxes | Income taxexpense | Net incomeattributable tononcontrollinginterests | Net incomeattributable toAMC Networks'stockholders | Diluted EPSattributable toAMC Networks'stockholders | ||||||||||||
Reported Results (GAAP) | $ | 120,640 | $ | (25,915 | ) | $ | (7,704 | ) | $ | 87,021 | $ | 2.02 | ||||
Adjustments: | ||||||||||||||||
Amortization of acquisition-related intangible assets | 9,541 | (1,496 | ) | (3,027 | ) | 5,018 | 0.11 | |||||||||
Impairment and other charges | 16,055 | (3,824 | ) | — | 12,231 | 0.28 | ||||||||||
Restructuring and other related charges | 8,625 | (986 | ) | (29 | ) | 7,610 | 0.18 | |||||||||
Loss on extinguishment of debt | 22,074 | (5,257 | ) | — | 16,817 | 0.39 | ||||||||||
Adjusted Results (Non-GAAP) | $ | 176,935 | $ | (37,478 | ) | $ | (10,760 | ) | $ | 128,697 | $ | 2.98 |