WWE released their third quarter financial results today, here are some notes from that release…
* Home Video net revenues were $6.4 million as compared to $8.3 million in the prior year quarter. The 23% decline in revenue reflected a reduction in average unit price and an adjustment to our allowance for returns that were partially offset by an increase in shipments. Although shipments increased 36% to 933,100 units, a majority of this growth was derived from lower priced new release and catalog titles; the resulting change in product mix contributed to a 16% reduction in average price to $11.01. A $1.7 million adjustment to our allowance for returns was made to reflect lower sell-through rates, primarily from our prior period releases, and increased our reserve for returns to 50% of gross retail revenue as compared to 21% in the third quarter last year.
* Licensing revenues were $7.1 million as compared to $9.0 million in the prior year quarter. The 21% decline was primarily due to reduced sales of video game and novelty products. Royalties earned from the sale of video games declined by $1.2 million primarily from one fewer release, WWE All Stars, in the period. WWE All Stars was released in March 2011 and will not be refreshed in the current year. Shipments of our franchise video game, WWE’ 12, also declined 5% in the quarter to 127,000 units, resulting in a 22% decline year-to-date. Royalties from the sale of toys, however, increased 16%, or $0.5 million, reflecting the introduction of our Brawlin’ Buddies toy by Mattel with strong domestic retail support.
* Magazine publishing net revenues were $1.6 million as compared to $1.9 million in the prior year quarter, reflecting lower newsstand sales in the current year quarter.