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The Madison Square Garden Company Reports Fourth Quarter And Fiscal 2012 Results

For the fiscal fourth quarter, MSG Sports revenues of $131.2 million grew 74%, as compared to the prior year period. The increase in revenues was primarily due to an increase in the aggregate number of New York Rangers and New York Knicks home playoff games versus the prior year quarter, 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 timing of the compressed NBA season. The overall revenue increase included higher playoff-related revenues, professional sports team ticket-related revenue, suite rental fee revenue, sponsorship and signage revenues, and food, beverage and merchandise revenues. AOCF increased by $21.1 million to $19.8 million and operating income increased by $21.0 million to $16.0 million, both as compared to the prior year quarter. The increase in AOCF and operating income primarily reflects higher revenues, partially offset by an increase in direct operating expenses and, to a lesser extent, an increase in selling, general and administrative 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 owns and operates the following sports franchises: 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 the Company's venues. MSG Media's television networks consist of regional sports networks, MSG Network and MSG+, collectively referred to as MSG Networks; and Fuse, a national television network dedicated to music. MSG Networks also include high-definition channels, MSG HD and MSG+ HD, and Fuse includes its high-definition channel, Fuse HD. 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 the Company's diverse collection of venues. These venues consist of Madison Square Garden, Radio City Music Hall, The Theater at Madison Square Garden, the Beacon Theatre, The Chicago Theatre, the Forum in Inglewood, CA, and the Wang Theatre in Boston, MA. 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 5 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 97223678

Conference call replay number is 855-859-2056 / Conference ID Number 97223678 until August 31, 2012

THE MADISON SQUARE GARDEN COMPANY
         
CONSOLIDATED OPERATIONS DATA AND RECONCILIATION
(In thousands, except per share data)
(Unaudited)
         
  Three Months Ended June 30, Twelve Months Ended June 30,
  2012 2011 2012 2011
         
Revenues  $ 332,919 $ 233,874 $ 1,284,016 $ 1,187,791
         
Adjusted operating cash flow  $ 77,782 $ 40,858 $ 283,235 $ 207,545
Share-based compensation expense  (3,388) (2,625) (18,205) (11,398)
Operating income before depreciation and amortization  74,394 38,233 265,030 196,147
Depreciation and amortization (incl. impairments)  (24,509) (23,756) (87,503) (72,573)
Operating income  49,885 14,477 177,527 123,574
Other income (expense):        
Interest expense, net  (1,151) (1,157) (4,752) (4,567)
Miscellaneous  482 -- 7,072 7,485
Income from operations before income taxes  49,216 13,320 179,847 126,492
Income tax expense  (20,653) (4,793) (73,302) (46,892)
Net income  $ 28,563 $ 8,527 $ 106,545 $ 79,600
Basic earnings per common share  $ 0.38 $ 0.11 $ 1.42 $ 1.07
Diluted earnings per common share  $ 0.37 $ 0.11 $ 1.38 $ 1.03
         
Basic weighted-average number of common shares outstanding  75,606 74,506 74,938 74,184
Diluted weighted-average number of common shares outstanding 77,664 77,186 77,459 77,058

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 June 30,  
  2012 2011  % Change
       
MSG Media  $ 166,950 $ 139,550 20 %
MSG Entertainment  50,808 35,965 41 %
MSG Sports 131,159 75,381 74 %
Other (including Inter-segment eliminations)  (15,998) (17,022) 6 %
Total Madison Square Garden Company $ 332,919 $ 233,874 42 %
       
  Twelve Months Ended June 30,  
  2012 2011  % Change
       
MSG Media  $ 614,168 $ 564,653 9 %
MSG Entertainment  263,976 294,484 (10) %
MSG Sports 464,726 398,757 17 %
Other (including Inter-segment eliminations)  (58,854) (70,103) 16 %
Total Madison Square Garden Company $ 1,284,016 $ 1,187,791 8 %
         
ADJUSTED OPERATING CASH FLOW AND OPERATING INCOME (LOSS)        
             
  Adjusted Operating Cash Flow   Operating Income (Loss)  
  Three Months Ended June 30,   Three Months Ended June 30,  
  2012 2011 % Change 2012 2011 % Change
             
MSG Media  $ 65,881 $ 58,228 13 % $ 59,509 $ 51,560 15 %
MSG Entertainment  (5,322) (11,915) 55 % (8,658) (14,541) 40 %
MSG Sports 19,784 (1,294) -- 16,018 (5,023) --
All other  (2,561) (4,161) 38 % (16,984) (17,519) 3 %
Total Madison Square Garden Company  $ 77,782 $ 40,858 90 % $ 49,885 $ 14,477 245 %
             
  Adjusted Operating Cash Flow   Operating Income (Loss)  
  Twelve Months Ended June 30,   Twelve Months Ended June 30,  
  2012 2011 % Change 2012 2011 % Change
             
MSG Media  $ 258,599 $ 228,180 13 % $ 228,346 $ 204,659 12 %
MSG Entertainment  5,295 (11,479) -- (9,302) (23,982) 61 %
MSG Sports 28,717 7,003 310 % 13,069 (7,199) --
All other  (9,376) (16,159) 42 % (54,586) (49,904) (9) %
Total Madison Square Garden Company  $ 283,235 $ 207,545 36 % $ 177,527 $ 123,574 44 %
 
THE MADISON SQUARE GARDEN COMPANY
     
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
     
   June 30, 2012 June 30, 2011
ASSETS  
Current Assets:    
Cash and cash equivalents  $ 206,500 $ 304,876
Restricted cash  5,789 8,051
Accounts receivable, net of allowance for doubtful accounts of $2,434 and $2,292  126,565 118,013
Net related party receivables  27,277 22,587
Prepaid expenses  29,700 34,512
Other current assets  19,980 21,379
Total current assets  415,811 509,418
Property and equipment, net of accumulated depreciation and amortization of $435,696 and $407,190  969,528 607,792
Amortizable intangible assets, net of accumulated amortization of $122,210 and $122,093  101,814 121,794
Indefinite-lived intangible assets  158,636 158,096
Goodwill  742,492 742,492
Other assets  136,403 140,664
  $ 2,524,684 $ 2,280,256
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current Liabilities:    
Accounts payable  $ 33,048 $ 31,769
Net related party payables  362 --
Accrued liabilities:    
Employee related costs  82,886 55,007
Other accrued liabilities  188,410 167,784
Deferred revenue  211,639 156,047
Total current liabilities  516,345 410,607
Defined benefit and other postretirement obligations  58,817 52,865
Other employee related costs  36,689 39,700
Other liabilities  60,438 53,995
Deferred tax liability  532,382 517,204
Total liabilities  1,204,671 1,074,371
Commitments and contingencies     
Stockholders' Equity:    
Class A Common stock, par value $0.01, 360,000 shares authorized; 62,016 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  1,070,046 1,041,769
Treasury stock, at cost, 927 and 500 shares  (22,047) (10,279)
Retained earnings  295,412 188,867
Accumulated other comprehensive loss  (24,162) (15,233)
Total stockholders' equity  1,320,013 1,205,885
  $ 2,524,684 $ 2,280,256
THE MADISON SQUARE GARDEN COMPANY
     
SELECTED CASH FLOW INFORMATION
(Dollars in thousands)
(Unaudited)
     
  Twelve Months Ended  June 30,
  2012 2011
Net cash provided by operating activities  $ 333,373 $ 180,523
Net cash used in investing activities  (429,081) (191,899)
Net cash used in financing activities  (2,668) (3,493)
Net decrease in cash and cash equivalents  (98,376) (14,869)
Cash and cash equivalents at beginning of period  304,876 319,745
Cash and cash equivalents at end of period  $ 206,500 $ 304,876
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

The Madison Square Garden Company Logo

Stock quotes in this article: MSG 

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