Company incurs IPO-related charges, revenues up.
Warner Music Group Corp. reported today (Aug. 4) that despite a rise in revenues its net loss reached $179 million for its financial results covering the three-month period ended June 30, 2005.
It compares with a net loss of $91 million, or 85 cents, for the same period last year.
The New York-listed company said that of the loss, $135 million were non-recurring after-tax expenses linked to the May 5 initial public offering.
In a statement, the company said the charges relate to “specific IPO-related one-time events and do not reflect on-going operations of the business.” Adjusted net losses reached $35 million.
The company said that among the non-recurring, IPO-related items were a $73 million fee "to terminate a management contract in connection with the IPO" understood to be Warner Music's private-equity shareholders. Cash payments of $29 million were made to employees.
"Warner Music Group's solid performance in the quarter reaffirms the strength of our strategic plan and the efficacy with which it is being executed by our outstanding management team,” said WMG chairman/CEO Edgar Bronfman Jr.
Group revenues grew 2% to $742 million compared to the same quarter in 2004, with reported growth in both WMG's Recorded Music and Music Publishing divisions.
Revenues from Recorded Music grew by 2% to $588 million, pushed by sales of albums from Rob Thomas, Green Day, Michael Buble, Mike Jones and James Blunt, the company said. Warner Music added that digital sales were robust during the period. “In the most advanced digital market place -- the U.S. -- we are encouraged to see digital gains outpacing the physical business,” Bronfman said.
Music Publishing revenue grew by 5% to $161 million, compared to the same period of last year.
Digital revenue represented 6% of total sales at $44 million in the third quarter. This represents 26% growth from the second quarter and a 76% rise from the first quarter of fiscal 2005.