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Feb. 26, 2020, 7:00 a.m. EST

AMC Networks Inc. Reports Full Year and Fourth Quarter 2019 Results

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NEW YORK, Feb 26, 2020 (GLOBE NEWSWIRE via COMTEX) -- Full Year Financial Highlights:

-- Revenues of $3.1 billion

-- Operating income of $625 million; Adjusted Operating Income of $944 million

-- Diluted EPS of $6.67; Adjusted EPS of $9.27

-- Cash Provided by Operating Activities of $484 million; Free Cash Flow of $377 million

Fourth Quarter Financial Highlights:

-- Revenues of $785 million

-- Operating income of $42 million; Adjusted Operating Income of $200 million

-- Diluted EPS of ($0.15); Adjusted EPS of $1.69

Full Year Operational Highlights:

-- The Company further strengthened the distribution of both its linear channels as well as its suite of targeted SVOD services by entering into comprehensive long-term distribution agreements with two of its largest distribution partners, DISH Network and Charter Communications

-- The Company continued to make significant progress on its key strategic initiative of becoming the leading targeted SVOD provider by passing the 2 million paid subscriber threshold for its four services: Acorn TV, Shudder, Sundance Now, and UMC (Urban Movie Channel)

-- The Company aired 5 of the top 20 dramas on ad-supported cable in 2019 (The Walking Dead, Fear the Walking Dead, Killing Eve, NOS4A2, Into the Badlands)

-- WE tv ranked #1 amongst African American women in the 18-49 & 25-54 key demos on both Thursday and Friday night in 2019

AMC Networks Inc. ("AMC Networks" or the "Company") /zigman2/quotes/202022116/composite AMCX -1.22% today reported financial results for the full year and fourth quarter ended December 31, 2019.

President and Chief Executive Officer Josh Sapan said: "AMC Networks achieved its key financial targets for the year, against a backdrop of a rapidly shifting media ecosystem. We continue to move our organization in a new strategic direction, from what has been a cable channels company into a premier targeted content company that is now inhabiting the traditional pay-TV ecosystem, the advanced advertising world, as well as the emerging targeted SVOD marketplace. A new agreement with one of our biggest MVPD partners - DISH Network - includes the launch of our full suite of targeted SVOD services and demonstrates that our distribution partners are increasingly recognizing the value of our SVOD offerings. We are seeing momentum for our targeted SVOD services, which passed two million paid subscribers in the fourth quarter, as we continue to invest in strong, desirable content and valuable IP, diversify through new areas of content monetization and maximize the long-term value of our core networks and brands."

-- See page 5 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 (Loss), Adjusted EPS and Free Cash Flow.

-- Source: Nielsen, 2019 CY (12/31/18 - 12/29/19), A25-54, Prime Start (8p-11p), Ad-supported scripted dramas, excl specials. Live+3

-- Source: Nielsen, 2019 CY (12/31/18 - 12/29/19), AA W18-49 & W25-54, Prime Start (8p-11p), Ad-supported Cable. Live+3

Fourth Quarter Results

Fourth quarter net revenues increased 1.6%, or $12 million, to $785 million over the fourth quarter of 2018. The increase in net revenues reflected a decrease of 0.6% at National Networks and an increase of 6.5% at International and Other. Operating income was $42 million, a decrease of 69.6%, or $95 million, versus the prior year period. The operating income decrease reflected a decrease of 12.1% at National Networks and an increase of $69 million in operating loss at International and Other. Adjusted Operating Income was $200 million, a decrease of 8.7%, or $19 million, versus the prior year period. National Networks adjusted operating income decreased 13.1% and International and Other adjusted operating income increased $6 million versus the prior year period. As discussed in the "Other Matters" section of the release, results included the impact of $107 million of impairment and related charges as well as $11 million of restructuring and other related charges.

Fourth quarter net loss was $9 million ($0.15 per diluted share), compared with net income of $72 million ($1.24 per diluted share) in the prior year period. The decrease in EPS was primarily related to a decrease in operating income. Fourth quarter Adjusted EPS was $96 million ($1.69 per diluted share), compared with $111 million ($1.92 per diluted share) in the prior year period. The decrease in adjusted EPS was primarily related to a decrease in adjusted operating income and an increase in income tax expense partially offset by an increase in miscellaneous, net.

Full Year Results

Full year 2019 net revenues increased 3.0%, or $88 million, to $3.060 billion over full year 2018, reflecting a decrease of 1.8% at National Networks and an increase of 22.7% at International and Other. Operating income was $625 million, a decrease of 14.0%, or $102 million, versus the prior year period. National Networks operating income decreased 2.6% and International and Other operating loss increased $77 million versus the prior year period. Adjusted Operating Income was $944 million, an increase of 1.2%, or $11 million, versus the prior year period. National Networks adjusted operating income decreased 2.4% and International and Other adjusted operating income increased $31 million versus the prior year period.

Full year net income was $380 million ($6.67 per diluted share), compared with $446 million ($7.57 per diluted share) in the prior year period. The decrease in EPS was primarily related to a decrease in operating income. Full year adjusted EPS was $529 million ($9.27 per diluted share), compared with $512 million ($8.69 per diluted share) in the prior year period. The increase in adjusted EPS was primarily related to a decrease in income tax expense partially offset by a decrease in miscellaneous, net.

For the full year 2019, net cash provided by operating activities was $484 million, a decrease of $123 million versus the prior year period. The decrease was primarily the result of a decrease in working capital partially offset by an increase in adjusted operating income. Free Cash Flow for the full year 2019 was $377 million, a decrease of $126 million versus the prior year period. The decrease primarily reflected the decrease in net cash provided by operating activities.

4. See page 5 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 (Loss), Adjusted EPS and Free Cash Flow.







        Segment Results
        (dollars in thousands)                      Three Months Ended December 31,              Twelve Months Ended December 31,
                                                        2019              2018         Change       2019              2018          Change
        Net Revenues:
                        National Networks           $   589,195       $   592,687      (0.6%)    $  2,369,044      $  2,413,325     (1.8 %)
                        International and Other         200,687           188,432      6.5%         734,143           598,306       22.7%
                        Inter-segment eliminations      (4,678   )        (8,273  )    n/m          (42,866   )       (39,702   )   n/m
        Total Net Revenues                          $   785,204       $   772,846      1.6%      $  3,060,321      $  2,971,929     3.0%
        Operating Income (Loss):
                        National Networks           $   156,242       $   177,805      (12.1%)   $  804,422        $  825,770       (2.6%)
                        International and Other         (117,510 )        (48,428 )    (142.7%)     (170,039  )       (93,326   )   (82.2%)
                        Inter-segment eliminations      2,987             7,747        n/m          (9,106    )       (5,535    )   n/m
        Total Operating Income (Loss)               $   41,719        $   137,124      (69.6%)   $  625,277        $  726,909       (14.0%)
        Adjusted Operating Income:
                        National Networks           $   181,957       $   209,309      (13.1%)   $  903,526        $  925,279       (2.4%)
                        International and Other         14,955            8,541        75.1%        50,193            19,303        160.0%
                        Inter-segment eliminations      3,059             1,245        n/m          (9,729    )       (12,037   )   n/m
        Total Adjusted Operating Income             $   199,971       $   219,095      (8.7%)    $  943,990        $  932,545       1.2%
        


National Networks

National Networks principally consists of the Company's five nationally distributed programming networks, AMC, WE tv, BBC AMERICA, IFC and SundanceTV; and AMC Studios, the Company's television production business.

Fourth Quarter Results

National Networks revenues for the fourth quarter 2019 decreased 0.6% to $589 million, operating income decreased 12.1% to $156 million, and adjusted operating income decreased 13.1% to $182 million, all compared to the prior year period.

Fourth quarter revenues reflected a 5.5% increase in distribution revenues to $338 million. The increase in distribution revenues was attributable to an increase in content licensing revenues partially offset by a decrease in subscription revenues. Advertising revenues decreased 7.8% to $251 million. The decrease in advertising revenues principally related to lower delivery partially offset by higher pricing.

Fourth quarter operating income and adjusted operating income reflected the decrease in revenues as well as an increase in operating expenses. The increase in operating expenses was primarily attributable to higher programming expenses. Programming expenses included charges of $23 million in the current year period related to the write-off of programming assets, as compared to charges of $29 million in the prior year period. Operating income also reflected a decrease in restructuring and other related charges.

Full Year Results

National Networks revenues for the full year 2019 decreased 1.8% to $2.369 billion, operating income decreased 2.6% to $804 million, and adjusted operating income decreased 2.4% to $904 million, all compared to the prior year period.

Full year revenues reflected a 0.3% decrease in distribution revenues to $1.465 billion. The decrease in distribution revenues was attributable to a decrease in subscription revenues partially offset by an increase in content licensing revenues. Advertising revenues decreased 4.3% to $904 million. The decrease in advertising revenues principally related to lower delivery partially offset by higher pricing.

Full year operating income and adjusted operating income reflected the decrease in revenues partially offset by a decrease in operating expenses. The decrease in operating expenses was primarily attributable to lower marketing and personnel expenses partially offset by higher programming expenses. Programming expenses included charges of $38 million in the current year period related to the write-off of programming assets, as compared to charges of $49 million in the prior year period. Operating income also reflected an increase in share-based compensation expense and a decrease in restructuring and other related charges.

International and Other

International and Other principally consists of AMC Networks International, the Company's international programming business; AMC Networks SVOD, the Company's targeted subscription streaming services, Acorn TV, Shudder, Sundance Now and UMC (Urban Movie Channel); Levity Entertainment Group, the Company's production services and comedy venues business; and IFC Films, the Company's independent film distribution business.

Fourth Quarter Results

International and Other revenues for the fourth quarter of 2019 increased 6.5% to $201 million, operating loss increased $69 million to a loss of $118 million, and adjusted operating income increased 75.1% to $15 million, all compared to the prior year period.

/zigman2/quotes/202022116/composite
US : U.S.: Nasdaq
$ 25.02
-0.31 -1.22%
Volume: 972,125
Aug. 12, 2020 4:00p
P/E Ratio
7.32
Dividend Yield
N/A
Market Cap
$1.32 billion
Rev. per Employee
$924,682
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