Third quarter revenue of $400.5 million,
a 21% increase compared to prior year period Third
quarter AOCF of $80.2 million, a 46% increase compared to prior
year period Third quarter operating income of
$53.3 million, up 75% versus prior year period
The Madison Square Garden Company (Nasdaq:MSG) today reported
financial results for the fiscal third quarter ended March 31,
2012.
Fiscal 2012 third quarter revenues of $400.5 million increased
21%, as compared to the prior year period, primarily reflecting an
increase in revenues in the MSG Sports and MSG Media segments,
partially offset by a decrease in revenues in the MSG Entertainment
segment.
Fiscal 2012 third quarter adjusted operating cash flow
("AOCF")(1) of $80.2 million increased 46%, as compared to the
prior year period, driven primarily by an AOCF increase in the MSG
Sports segment. Operating income of $53.3 million increased 75% and
net income of $31.1 million ($0.40 per diluted share) increased
63%, both as compared to the prior year period.
President and CEO Hank Ratner said: "We generated significant
AOCF during our fiscal third quarter, a reflection of the strength
of our assets and brands, as well as the value we provide to
customers and partners. In particular, MSG Sports delivered its
most profitable quarter in our two year history as a public
company. The segment is realizing financial benefits as a result of
the new products and amenities we are providing as part of the
first phase of the Transformation project. Once the playoffs
conclude, we will begin the second phase of the Transformation and
look forward to the debut of the transformed upper bowl of the
Arena this fall."
Results from Operations
Segment results for the quarters ended March 31, 2012 and 2011
are as follows:
|
|
|
|
|
Revenue |
AOCF |
Operating Income
(Loss) |
$ millions |
Q3
2012 |
Q3 2011 |
% Change |
Q3
2012 |
Q3 2011 |
% Change |
Q3
2012 |
Q3 2011 |
% Change |
MSG Media |
$166.2 |
$147.6 |
13 % |
$65.3 |
$62.6 |
4 % |
$58.5 |
$56.2 |
4 % |
MSG Entertainment |
34.3 |
42.8 |
(20) % |
(12.8) |
(6.8) |
(88) % |
(16.4) |
(10.0) |
(64) % |
MSG Sports |
216.1 |
157.7 |
37 % |
29.3 |
3.5 |
NM |
25.4 |
0.1 |
NM |
Other (including
eliminations) |
(16.2) |
(17.7) |
8 % |
(1.7) |
(4.5) |
63 % |
(14.2) |
(15.9) |
11 % |
Total Company |
$400.5 |
$330.4 |
21 % |
$80.2 |
$54.9 |
46 % |
$53.3 |
$30.4 |
75 % |
|
|
|
|
|
|
|
|
|
|
Note: Does not foot due to
rounding |
|
|
|
|
|
|
|
|
|
1. See
definition of adjusted operating cash flow ("AOCF") included in the
discussion of non-GAAP financial measures on page 3 of this
earnings release. |
|
|
|
|
|
|
|
|
|
MSG Media
For the fiscal third quarter, MSG Media revenues of $166.2
million increased 13%, as compared to the prior year
period. Affiliate fee revenue increased $10.4 million, as
compared to the prior year period, primarily attributable to higher
affiliation rates, significantly offset by the impact of the
Company's networks not being carried for approximately half of the
quarter by a key affiliate, net of recognizing revenue for prior
periods from that affiliate. During the quarter, a new
multi-year agreement for carriage of the Company's networks was
reached with this affiliate. Advertising revenue increased
$4.3 million, as compared to the prior year quarter. Other
revenue increased $3.9 million, as compared to the prior year
period, primarily attributable to a short-term programming
licensing agreement. AOCF of $65.3 million increased 4% and
operating income of $58.5 million increased 4%, both as compared to
the prior year period. The increase in AOCF and operating
income primarily reflects higher revenues, largely offset by an
increase in selling, general and administrative and direct
operating expenses.
MSG Entertainment
For the fiscal third quarter, MSG Entertainment revenues of
$34.3 million decreased 20%, as compared to the prior year
period. The decrease in revenues was primarily attributable to
lower event-related revenues at The Garden, as the ability to
schedule events was impacted by the uncertainty surrounding the NBA
work stoppage and the increased number of New York Knicks and
Rangers home games versus the prior year quarter, as well as lower
event-related revenues at the Company's other venues. This
overall decrease was partially offset by higher revenues from the
Radio City Christmas Spectacular franchise, primarily due to
scheduled performances of the New York production in January 2012
versus no performances in the prior year period. AOCF loss of
$12.8 million increased 88% and operating loss of $16.4 million
increased 64%, both as compared to the prior year quarter, due to
lower event-related results at the Company's venues.
MSG Sports
For the fiscal third quarter, MSG Sports revenues of $216.1
million increased 37%, as compared to the prior year
period. The increase in revenues was primarily attributable to
the financial benefits of the first phase of the Arena
Transformation project and, to a lesser extent, a higher percentage
of New York Knicks-related revenues being recognized during the
quarter versus the prior year period as a result of the delayed
start to the NBA season and the compressed New York Knicks regular
season schedule. The overall revenue increase included higher
professional sports team ticket-related revenue, league
distributions, food, beverage and merchandise sales, suite rental
fee revenue, event-related revenues from other live sporting events
and sponsorship and signage revenues. AOCF increased by $25.8
million to $29.3 million and operating income increased by $25.3
million to $25.4 million, both as compared to the prior year
quarter, primarily reflecting the increase in revenues, partially
offset by higher direct operating expenses.
About The Madison Square Garden Company
The Madison Square Garden Company is a fully-integrated sports,
media and entertainment business. The Company is comprised of three
business segments: MSG Sports, MSG Media and MSG Entertainment,
which are strategically aligned to work together to drive the
Company's overall business, which is built on a foundation of
iconic venues and compelling content that the company creates,
produces, presents and/or distributes through its programming
networks and other media assets. MSG Sports consists of owning and
operating sports franchises, including the New York Knicks (NBA),
the New York Rangers (NHL), the New York Liberty (WNBA), and the
Connecticut Whale (AHL). MSG Sports also features the presentation
of a wide variety of live sporting events including professional
boxing, college basketball, track and field and tennis. MSG
Media is a leader in production and content development for
multiple distribution platforms, including content originating from
MSG's venues. MSG Media consists of the MSG Networks (MSG, MSG
Plus, MSG HD and MSG Plus HD) regional sports networks and the Fuse
Networks (Fuse and Fuse HD), a national television network
dedicated to music. MSG Entertainment is one of the country's
leaders in live entertainment. MSG Entertainment creates, produces
and/or presents a variety of live productions, including the Radio
City Christmas Spectacular featuring the Radio City Rockettes. MSG
Entertainment also presents or hosts other live entertainment
events such as concerts, family shows and special events in MSG's
diverse collection of venues. These venues include Madison Square
Garden, Radio City Music Hall, the Theater at Madison Square
Garden, the Beacon Theatre, the Chicago Theatre and the Wang
Theatre. More information is available at
www.themadisonsquaregardencompany.com.
The Madison Square Garden Company logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=7079
Non-GAAP Financial Measures
We define adjusted operating cash flow ("AOCF"), which is a
non-GAAP financial measure, as operating income (loss) before 1)
depreciation, amortization and impairments of property and
equipment and intangible assets, 2) share-based compensation
expense or benefit, and 3) restructuring charges or credits.
Because it is based upon operating income (loss), AOCF also
excludes interest expense (including cash interest expense) and
other non-operating income and expense items. We believe that the
exclusion of share-based compensation expense or benefit allows
investors to better track the performance of the various operating
units of our business without regard to either the distortive
effects of fluctuating stock prices or the settlement of an
obligation that is not expected to be made in cash.
We believe AOCF is an appropriate measure for evaluating the
operating performance of our business segments and the company on a
consolidated basis. AOCF and similar measures with similar titles
are common performance measures used by investors and analysts to
analyze our performance. Internally, we use revenues and AOCF
measures as the most important indicators of our business
performance, and evaluate management's effectiveness with specific
reference to these indicators. AOCF should be viewed as a
supplement to and not a substitute for operating income (loss), net
income (loss), cash flows from operating activities, and other
measures of performance and/or liquidity presented in accordance
with U.S. generally accepted accounting principles ("GAAP"). Since
AOCF 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
AOCF to operating income (loss), please see page 4 of this
release.
This press release may contain statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. 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 industry in which it operates and the factors
described in the Company's filings with the Securities and Exchange
Commission, including the sections titled "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:
The conference call will be Webcast live today at 10:00 a.m. ET
at www.themadisonsquaregardencompany.com
Conference call dial-in number is 877-347-9170 / Conference ID
Number 66103485
Conference call replay number is 855-859-2056 / Conference ID
Number 66103485 until May 11, 2012
THE MADISON
SQUARE GARDEN COMPANY CONSOLIDATED OPERATIONS DATA AND
RECONCILIATION (In thousands, except per share data)
(Unaudited) |
|
|
|
|
|
|
Three Months Ended March
31, |
Nine Months Ended March
31, |
|
2012 |
2011 |
2012 |
2011 |
|
|
|
|
|
|
|
|
|
Revenues |
$ 400,451 |
$ 330,413 |
$ 951,097 |
$ 953,917 |
|
|
|
|
|
Adjusted operating cash flow |
$ 80,230 |
$ 54,868 |
$ 205,453 |
$ 166,687 |
Share-based compensation
expense |
(4,371) |
(3,299) |
(14,817) |
(8,773) |
Operating income before depreciation and
amortization |
75,859 |
51,569 |
190,636 |
157,914 |
Depreciation and amortization
(incl. impairments) |
(22,536) |
(21,170) |
(62,994) |
(48,817) |
Operating income |
53,323 |
30,399 |
127,642 |
109,097 |
Other income (expense): |
|
|
|
|
Interest expense, net |
(1,088) |
(1,059) |
(3,601) |
(3,410) |
Miscellaneous |
6,590 |
5,561 |
6,590 |
7,485 |
Income from operations before
income taxes |
58,825 |
34,901 |
130,631 |
113,172 |
Income tax expense |
(27,750) |
(15,814) |
(52,649) |
(42,099) |
Net income |
$ 31,075 |
$ 19,087 |
$ 77,982 |
$ 71,073 |
Basic earnings per common share |
$ 0.41 |
$ 0.26 |
$ 1.04 |
$ 0.96 |
Diluted earnings per common share |
$ 0.40 |
$ 0.25 |
$ 1.01 |
$ 0.92 |
|
|
|
|
|
Basic weighted-average number of common
shares outstanding |
75,007 |
74,193 |
74,717 |
74,078 |
Diluted weighted-average number of common
shares outstanding |
77,612 |
77,200 |
77,392 |
77,016 |
ADJUSTMENTS TO RECONCILE ADJUSTED
OPERATING CASH FLOW TO OPERATING INCOME
(LOSS)
The following is a description of the adjustments to operating
income (loss) in arriving at adjusted operating cash flow as
described in this earnings release:
- Depreciation and amortization. This adjustment eliminates
depreciation, amortization and impairments of property and
equipment and intangible assets in all periods.
- Share-based compensation expense. This adjustment eliminates
the compensation expense relating to restricted stock, restricted
stock units, stock options and stock appreciation rights granted
under our employee stock plans and non-employee director plans in
all periods.
|
|
|
THE MADISON SQUARE
GARDEN COMPANY |
|
|
|
|
|
CONSOLIDATED OPERATIONS
DATA |
|
|
(Dollars in
thousands) |
|
|
(Unaudited) |
|
|
|
|
|
REVENUES |
|
|
|
Three Months Ended March
31, |
|
|
2012 |
2011 |
% Change |
|
|
|
MSG Media |
$ 166,180 |
$ 147,564 |
13 % |
MSG Entertainment |
34,342 |
42,805 |
(20) % |
MSG Sports |
216,131 |
157,739 |
37 % |
Other (including Inter-segment
eliminations) |
(16,202) |
(17,695) |
8 % |
Total Madison Square
Garden Company |
$ 400,451 |
$ 330,413 |
21 % |
|
Nine Months Ended March
31, |
|
|
2012 |
2011 |
% Change |
|
|
|
MSG Media |
$ 447,218 |
$ 425,103 |
5 % |
MSG Entertainment |
213,168 |
258,519 |
(18) % |
MSG Sports |
333,567 |
323,376 |
3 % |
Other (including Inter-segment
eliminations) |
(42,856) |
(53,081) |
19 % |
Total Madison Square Garden
Company |
$ 951,097 |
$ 953,917 |
(0) % |
|
|
|
|
ADJUSTED OPERATING CASH
FLOW AND OPERATING INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Cash
Flow |
|
Operating Income
(Loss) |
|
|
Three Months Ended March
31, |
|
Three Months Ended March
31, |
|
|
2012 |
2011 |
% Change |
2012 |
2011 |
% Change |
|
|
|
|
|
|
|
MSG Media |
$ 65,347 |
$ 62,577 |
4 % |
$ 58,545 |
$ 56,164 |
4 % |
MSG Entertainment |
(12,764) |
(6,782) |
(88) % |
(16,415) |
(9,998) |
(64) % |
MSG Sports |
29,316 |
3,540 |
-- |
25,381 |
129 |
-- |
All other |
(1,669) |
(4,467) |
63 % |
(14,188) |
(15,896) |
11 % |
Total Madison Square
Garden Company |
$ 80,230 |
$ 54,868 |
46 % |
$ 53,323 |
$ 30,399 |
75 % |
|
|
|
|
|
|
|
|
Adjusted Operating Cash
Flow |
|
Operating Income
(Loss) |
|
|
Nine Months Ended March
31, |
|
Nine Months Ended March
31, |
|
|
2012 |
2011 |
% Change |
2012 |
2011 |
% Change |
|
|
|
|
|
|
|
MSG Media |
$ 192,718 |
$ 169,952 |
13 % |
$ 168,837 |
$ 153,099 |
10 % |
MSG Entertainment |
10,617 |
436 |
-- |
(644) |
(9,441) |
93 % |
MSG Sports |
8,933 |
8,297 |
8 % |
(2,949) |
(2,176) |
(36) % |
All other |
(6,815) |
(11,998) |
43 % |
(37,602) |
(32,385) |
(16) % |
Total Madison Square
Garden Company |
$ 205,453 |
$ 166,687 |
23 % |
$ 127,642 |
$ 109,097 |
17 % |
|
THE MADISON SQUARE
GARDEN COMPANY |
|
|
|
CONSOLIDATED BALANCE
SHEETS |
(In thousands, except
per share data) |
(Unaudited) |
|
|
|
|
March 31, 2012 |
June 30, 2011 |
ASSETS |
|
|
Current Assets: |
|
|
Cash and cash
equivalents |
$ 181,096 |
$ 304,876 |
Restricted cash |
5,253 |
8,051 |
Accounts receivable, net of
allowance for doubtful accounts of $2,288 and $2,292 |
162,591 |
118,013 |
Net related party
receivables |
27,722 |
22,587 |
Prepaid expenses |
33,416 |
34,512 |
Other current assets |
23,132 |
21,379 |
Total current assets |
433,210 |
509,418 |
Property and equipment, net of accumulated
depreciation and amortization of $427,718 and $407,190 |
908,742 |
607,792 |
Amortizable intangible assets, net of
accumulated amortization of $132,541 and $122,093 |
105,967 |
121,794 |
Indefinite-lived intangible assets |
158,096 |
158,096 |
Goodwill |
742,492 |
742,492 |
Other assets |
145,988 |
140,664 |
|
$ 2,494,495 |
$ 2,280,256 |
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current Liabilities: |
|
|
Accounts payable |
$ 16,245 |
$ 31,769 |
Net related party
payables |
498 |
-- |
Accrued liabilities: |
|
|
Employee related
costs |
71,226 |
55,007 |
Other accrued
liabilities |
207,499 |
167,784 |
Deferred revenue |
211,760 |
156,047 |
Total current
liabilities |
507,228 |
410,607 |
Defined benefit and other postretirement
obligations |
49,577 |
52,865 |
Other employee related costs |
43,886 |
39,700 |
Other liabilities |
63,903 |
53,995 |
Deferred tax liability |
537,044 |
517,204 |
Total liabilities |
1,201,638 |
1,074,371 |
Commitments and contingencies |
|
|
Stockholders' Equity: |
|
|
Class A Common stock, par value
$0.01, 360,000 shares authorized; 61,999 and 62,094 shares
outstanding. |
628 |
625 |
Class B Common stock, par value
$0.01, 90,000 shares authorized; 13,589 shares
outstanding |
136 |
136 |
Preferred stock, par value
$0.01, 45,000 shares authorized; none outstanding |
-- |
-- |
Additional paid-in
capital |
1,066,375 |
1,041,769 |
Treasury stock, at cost, 927
and 500 shares |
(22,047) |
(10,279) |
Retained earnings |
266,849 |
188,867 |
Accumulated other comprehensive
loss |
(19,084) |
(15,233) |
Total stockholders'
equity |
1,292,857 |
1,205,885 |
|
$ 2,494,495 |
$ 2,280,256 |
THE MADISON SQUARE
GARDEN COMPANY |
|
|
|
SELECTED CASH FLOW
INFORMATION |
(Dollars in
thousands) |
(Unaudited) |
|
|
|
|
Nine Months Ended
March 31, |
|
2012 |
2011 |
Net cash provided by operating
activities |
$ 235,567 |
$ 131,725 |
Net cash used in investing
activities |
(356,473) |
(137,066) |
Net cash used in financing
activities |
(2,874) |
(3,587) |
Net increase (decrease) in cash and cash
equivalents |
(123,780) |
(8,928) |
Cash and cash equivalents at beginning of
period |
304,876 |
319,745 |
Cash and cash equivalents at end of
period |
$ 181,096 |
$ 310,817 |
CONTACT: Kimberly Kerns
Senior Vice President
Communications
The Madison Square Garden Company
(212) 465-6442
Ari Danes, CFA
Vice President
Investor Relations
The Madison Square Garden Company
(212) 465-6072
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