NEW YORK, Feb. 09, 2024 (GLOBE NEWSWIRE) — AMC Networks Inc. (“AMC Networks” or the “Company”) (NASDAQ:AMCX) today reported financial results for the fourth quarter and full year ended December 31, 2023.
AMC Networks Chief Executive Officer Kristin Dolan said: “In the fourth quarter and across 2023, we continued to see success in the areas that will drive this company forward – programming, partnerships and profitability. I’m encouraged that this year we were able to grow streaming revenue and strengthen our subscriber base, expand our consolidated AOI(1) margin to 25%, and meaningfully grow our free cash flow. Nearly a year since joining AMC Networks as CEO, I am proud of the progress we have made in a fast-changing environment, and the new and innovative ways we are engaging with viewers and our commercial and creative partners.”
Operational Highlights:
Significant affiliate renewal activity in 2023 including major domestic partners Charter and Dish/Sling, among others.
Renewed majority of our footprint across Canada and executed deals with Canadian video distributors to carry AMC+ and our streaming services.
Collaborated with Philo on an innovative new packaging arrangement that will include AMC+ ad-supported in Philo’s base video offering for all new and returning customers, at no additional cost to the customer.
Expanded the addressable market of AMC+ through the launch of an ad-supported tier in the third quarter, with strong new sign-up activity on available platforms since launch.
Continued expansion of our growing FAST channels business, now with 17 FAST channels, representing 100 channel feeds across 11 distinct distribution platforms.
Delighted fans in 2023 with a deep slate of original programming across our networks and services including Anne Rice’s Mayfair Witches, Dark Winds, The Walking Dead: Dead City, The Walking Dead: Daryl Dixon, Acorn TV’s Harry Wild, WE tv’s Love After Lockup and Toya & Reginae, anime hit OSHI NO KO on HIDIVE, and indie film success Blackberry, among many others.
Kicking off 2024 with highly anticipated new original programming including:
Monsieur Spade, starring Clive Owen, on AMC, AMC+ and Acorn TV, which premiered in January.
The Walking Dead: The Ones Who Live, starring Andrew Lincoln and Danai Gurira as their iconic characters, Rick and Michonne, premiering February 25th.
Parish, starring Giancarlo Esposito, which debuts on AMC and AMC+ in March.
Orphan Black: Echoes, starring Krysten Ritter, set in the world of Orphan Black, to launch on AMC, AMC+ and BBC AMERICA.
Dollars in thousands, except per share amounts
Three Months Ended December 31,
Twelve Months Ended December 31,
2023
2022
Change
2023
2022
Change
Net Revenues
$
678,848
$
964,520
(29.6
)%
$
2,711,877
$
3,096,545
(12.4
)%
Operating Income (Loss)
$
(11,443
)
$
(391,641
)
97.1
%
$
388,412
$
86,916
n/m
Adjusted Operating Income(1)
$
100,296
$
137,371
(27.0
)%
$
670,104
$
738,402
(9.2
)%
Diluted Earnings (Loss) Per Share
$
(0.50
)
$
(6.11
)
91.8
%
$
4.90
$
0.17
n/m
Adjusted Earnings Per Share(1)
$
0.72
$
2.52
(71.4
)%
$
7.20
$
9.21
(21.8
)%
Net cash provided by operating activities
$
72,780
$
145,243
(49.9
)%
$
203,919
$
181,834
12.1
%
Free Cash Flow(1)
$
65,965
$
134,481
(50.9
)%
$
168,712
$
137,562
22.6
%
(1) See page 6 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.
Full Year Financial Highlights:
Net cash provided by operating activities of $204 million; Free Cash Flow of $169 million, year-over-year growth of 23%.
Free Cash Flow for the full year included $113 million of one-time cash restructuring payments, excluding these payments, Free Cash Flow would have been $281 million.
Net revenues of $2,712 million.
Streaming revenues increased 13% to $566 million; ended 2023 with 11.4 million streaming subscribers.
Operating income of $388 million; Adjusted Operating Income of $670 million, with a margin of 25%.
Diluted EPS of $4.90; Adjusted EPS of $7.20.
Fourth Quarter Financial Highlights:
Net cash provided by operating activities of $73 million; Free Cash Flow of $66 million.
Net revenues of $679 million.
Operating loss of $11 million; Adjusted Operating Income of $100 million.
Diluted EPS of $(0.50); Adjusted EPS of $0.72.
Segment Results:
(dollars in thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2023
2022
Change
2023
2022
Change
Net Revenues:
Domestic Operations
$
581,716
$
861,108
(32.4
)%
$
2,316,587
$
2,675,142
(13.4
)%
International and Other
99,502
107,633
(7.6
)%
404,476
442,525
(8.6
)%
Inter-segment Eliminations
(2,370
)
(4,221
)
43.9
%
(9,186
)
(21,122
)
56.5
%
Total Net Revenues
$
678,848
$
964,520
(29.6
)%
$
2,711,877
$
3,096,545
(12.4
)%
Operating Income (Loss):
Domestic Operations
$
59,897
$
(287,426
)
n/m
$
583,542
$
286,517
103.7
%
International and Other
(20,046
)
(36,702
)
45.4
%
(9,624
)
3,031
n/m
Corporate / Inter-segment Eliminations
(51,294
)
(67,513
)
24.0
%
(185,506
)
(202,632
)
8.5
%
Total Operating Income (Loss)
$
(11,443
)
$
(391,641
)
97.1
%
$
388,412
$
86,916
n/m
Adjusted Operating Income (Loss):
Domestic Operations
$
123,539
$
153,987
(19.8
)%
$
712,744
$
789,396
(9.7
)%
International and Other
7,158
13,480
(46.9
)%
60,548
68,989
(12.2
)%
Corporate / Inter-segment Eliminations
(30,401
)
(30,096
)
(1.0
)%
(103,188
)
(119,983
)
14.0
%
Total Adjusted Operating Income
$
100,296
$
137,371
(27.0
)%
$
670,104
$
738,402
(9.2
)%
Domestic Operations
Full Year Results:
Domestic Operations’ revenues decreased 13% from the prior year to $2,317 million.
Distribution and other revenues decreased 11% to $1,683 million.
Content licensing revenues decreased 30% to $343 million due to the timing and availability of deliveries in the period. The prior year period included deliveries of Silo, an AMC Studios produced series for a third party, and the early delivery of certain episodes of The Walking Dead and Fear the Walking Dead. Revenues related to deliveries of Silo were $56 million in 2023 and $126 million in 2022.
Subscription revenues decreased 4% to $1,340 million due to declines in the linear subscriber universe, partially offset by streaming revenue growth.
Streaming revenues increased 13% to $566 million due to the strengthening of our subscriber base, year-over-year streaming subscriber growth and price increases.
Affiliate revenues declined 13% due to basic subscriber declines including the 3% revenue impact of a strategic non-renewal that occurred at the end of 2022.
Advertising revenues decreased 20% to $634 million due to anticipated linear ratings declines, a challenging ad market and fewer original programming episodes within the year, partly offset by digital and advanced advertising revenue growth.
Operating income of $584 million included an impairment charge related to our BBCA joint venture of $42 million.
Adjusted Operating Income decreased 10% to $713 million, with a margin of 31%. The decrease in Adjusted Operating Income was primarily driven by a decrease in revenues, partly offset by continued cost management measures, including programming and marketing efficiencies.
Fourth Quarter Results:
Domestic Operations’ revenues decreased 32% from the prior year to $582 million.
Distribution and other revenues decreased 35% to $423 million.
Content licensing revenues decreased 68% to $96 million due to the timing and availability of deliveries in the period. The prior year period included deliveries of Silo, an AMC Studios produced series for a third party, and the early delivery of certain episodes of The Walking Dead and Fear the Walking Dead. Revenues related to deliveries of Silo in the prior year period were $126 million.
Subscription revenues decreased 8% to $327 million due to declines in the linear subscriber universe, partially offset by streaming revenue growth.
Streaming revenues increased 4% to $145 million, primarily driven by the strengthening of our subscriber base and partially driven by year-over-year streaming subscriber growth.
Streaming subscribers increased 1% to 11.4 million as compared to the prior year period. As compared to 3Q’23 subscribers of 11.1 million, fourth quarter subscribers sequentially increased 3%.
Affiliate revenues declined 16% due to basic subscriber declines including the 4% revenue impact of a strategic non-renewal that occurred at the end of 2022.
Advertising revenues decreased 23% to $158 million due to anticipated linear ratings declines, a challenging ad market and fewer original programming episodes within the quarter, partly offset by digital and advanced advertising revenue growth.
Operating income of $60 million included an impairment charge related to our BBCA joint venture of $42 million.
Adjusted Operating Income decreased 20% to $124 million, with a margin of 21%. The decrease in Adjusted Operating Income was primarily driven by a decrease in revenues, partly offset by continued cost management measures, including programming and marketing efficiencies.
International and Other
Full Year Results:
International and Other revenues decreased 9% from the prior year to $404 million.
Distribution and other revenues decreased 10% to $323 million, primarily due to lower production volumes at 25/7 Media.
Subscription revenues decreased 1% to $221 million due to the non-renewal of an AMCNI distribution agreement in the U.K. that occurred in the fourth quarter of 2023.
Content licensing revenues decreased 25% to $102 million due to a reduction in the volume of productions at 25/7 Media.
Advertising revenues decreased 2% to $82 million due to marketplace declines in the U.K., partially offset by digital and advanced advertising growth in the U.K.
Operating loss of $10 million included impairment charges of $45 million related to 25/7 Media.
Adjusted Operating Income decreased 12% to $61 million. The decrease in Adjusted Operating Income was driven by a decrease in revenues and an increase in selling, general and administrative expenses, partly offset by a decrease in technical and operating expenses.
Fourth Quarter Results:
International and Other revenues decreased 8% from the prior year to $100 million.
Distribution and other revenues decreased 11% to $76 million, primarily due to lower production volumes at 25/7 Media.
Subscription revenues decreased 5% to $51 million due to the non-renewal of an AMCNI distribution agreement in the U.K. that occurred in the fourth quarter of 2023.
Content licensing revenues decreased 21% to $25 million due to a reduction in the volume of productions at 25/7 Media.
Advertising revenues increased 7% to $24 million due to the beneficial impact of foreign currency translation and higher sales in Central and Eastern Europe.
Operating loss of $20 million included an impairment charge of $20 million related to 25/7 Media.
Adjusted Operating Income decreased 47% to $7 million. The decrease in Adjusted Operating Income was driven by a decrease in revenues and an increase in selling, general and administrative expenses, partly offset by a decrease in technical and operating expenses.
Other Matters
Open Market Repurchase of 4.75% Senior Notes due 2025
In December 2023, the Company repurchased $25.3 million principal amount of our 4.75% senior notes due 2025 on the open market, at a discount, and retired the repurchased notes.
Redemption of 5.00% Senior Notes due 2024
In December 2023, the Company redeemed the remaining $400 million principal amount of our 5.00% senior notes due 2024. The 2024 senior notes were redeemed at a redemption price of 100.000% of the principal amount plus accrued and unpaid interest.
25/7 Media Sale
On December 29, 2023, the Company sold its remaining interest in 25/7 Media to the noncontrolling interest holders.
The results of operations of 25/7 Media are included in the consolidated financial statements through the date of sale. In 2023, 25/7 Media represented $91 million of revenue and $4 million of Adjusted Operating Income in our International and Other segment.
Impairment and other charges
Impairment and other charges of $96.7 million for the year ended December 31, 2023 primarily consisted of $65.4 million of long-lived assets impairment charges at BBCA and 25/7 Media, and $21.7 million of goodwill impairment charges at 25/7 Media.
In June 2023, given the impact of market challenges at 25/7 Media, specifically as it relates to reduced demand for new content and series cancellations from third parties, we determined that sufficient indicators of potential impairment of long-lived assets and goodwill existed at 25/7 Media and an impairment charge of $24.9 million was recorded.
In December 2023, we recognized an additional impairment charge of $19.8 million, reflecting a write-down of substantially all of the goodwill associated with the 25/7 Media reporting unit.
During the fourth quarter of 2023, given continued market challenges and linear declines, we determined that the carrying amount of the BBCA asset group exceeded its fair value, therefore an impairment charge of $42.4 million was recorded.
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 …
Leave a Reply