The Madison Square Garden Company Reports Fiscal 2014 First Quarter Results

The Madison Square Garden Company Reports Fiscal 2014 First Quarter Results

First quarter revenues of $215.6 million, a 6% increase compared to prior year
                                first quarter

  First quarter AOCF of $65.5 million, a 3% increase compared to prior year
                                first quarter

  First quarter operating income of $39.9 million, comparable to prior year
                                first quarter

  Fully transformed Madison Square Garden Arena debuted on October 25, 2013

NEW YORK, Nov. 1, 2013 (GLOBE NEWSWIRE) -- The Madison Square Garden Company
(Nasdaq:MSG) today reported financial results for the fiscal 2014 first
quarter ended September 30, 2013.

Fiscal 2014 first quarter revenues of $215.6 million grew 6%, as compared to
the prior year first quarter, primarily due to an increase in revenues in the
MSG Media and MSG Sports segments, partially offset by a decrease in revenues
in the MSG Entertainment segment.

Fiscal 2014 first quarter adjusted operating cash flow ("AOCF")^(1) of $65.5
million increased 3%, as compared to the prior year first quarter, primarily
due to an AOCF increase in the MSG Media and MSG Sports segments, mostly
offset by lower results in the MSG Entertainment segment and, to a lesser
extent, an increase in unallocated corporate expenses ("Other")^(2). Fiscal
2014 first quarter operating income of $39.9 million was comparable to the
prior year first quarter and net income of $23.9 million ($0.31 per diluted
share) increased 16%, as compared to the prior year first quarter.

President and CEO Hank Ratner said: "Fiscal 2014 is an important year for our
Company as we near the successful conclusion of a significant capital
investment cycle and position our Company for its next chapter. In this
regard, we recently celebrated the first of two important milestones, with
last week's debut of a fully transformed Madison Square Garden Arena. With the
completion of our third and final phase, our customers are now experiencing
all of the amenities provided as a result of this unprecedented project, which
was designed to benefit everyone who walks through our doors. A second
important milestone is just around the corner, as we prepare for the January
2014 re-opening of the reinvented Forum in Inglewood, California. With the
successful completion of these historic projects close at hand, we believe our
Company is well-positioned to pursue additional opportunities to drive
continued growth over the long-term."

Results from Operations

Segment results for the quarters ended September 30, 2013 and 2012 are as
follows:

                                                       
               Revenues             AOCF                 Operating Income
                                                          (Loss)
$ millions      F'Q1   F'Q1   %      F'Q1   F'Q1  %      F'Q1   F'Q1   %
                2014   2013   Change 2014   2013   Change 2014   2013   Change
MSG Media       $166.6 $159.5 4%    $81.5  $76.7  6%    $76.7  $71.0  8%
MSG             28.6   30.8   (7) %  (15.0) (12.6) (20) % (18.4) (16.0) (15) %
Entertainment
MSG Sports      38.2   31.6   21%   2.9    1.5    100 % (0.4)  (2.1)  80 %
Other (includes (17.8) (17.7) (1) %  (3.9)  (2.3)  (68) % (18.0) (12.7) (42) %
eliminations)
Total Company   $215.6 $204.2 6%    $65.5  $63.3  3%    $39.9  $40.2  (1) %

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 below.

2. On an AOCF basis, Other consists principally of unallocated
corporate general and administrative costs. On an operating income basis,
Other also includes unallocated depreciation and amortization expense.

MSG Media

For the fiscal 2014 first quarter as compared to the prior year period, MSG
Media revenues of $166.6 million grew 4%.Affiliation fee revenue increased
$8.7 million, primarily attributable to higher affiliation rates and, to a
lesser extent, a favorable affiliate adjustment that is not expected to
recur.Advertising revenue increased $2.5 million, due to higher advertising
sales at Fuse and, to a lesser extent, at MSG Networks.Other revenues
decreased $4.2 million, primarily due to the expiration in April 2013 of a
short-term programming licensing agreement.First quarter AOCF of $81.5
million increased 6% and operating income of $76.7 million increased 8%, both
primarily due to the increase in revenues, partially offset by an increase in
direct operating and selling, general and administrative expenses.

MSG Entertainment

For the fiscal 2014 first quarter as compared to the prior year period, MSG
Entertainment revenues of $28.6 million decreased 7%.The decrease was
primarily due to lower event-related revenues at Radio City Music Hall and, to
a lesser extent, at the Beacon Theatre, partially offset by an increase in
venue-related sponsorship and signage and suite rental fee revenues, as well
as other net increases.The decrease in event-related revenues at Radio City
Music Hall was primarily due to the impact of the absence of an extended run
theatrical production and, to a lesser extent, fewer other events, largely
offset by the impact of a highly rated live television show, which utilized
the venue throughout most of the fiscal 2014 first quarter.First quarter AOCF
loss of $15.0 million increased $2.5 million and operating loss of $18.4
million increased $2.4 million, both primarily due to the decrease in revenues
and, to a lesser extent, higher selling, general and administrative expenses,
partially offset by lower direct operating expenses. 

MSG Sports

For the fiscal 2014 first quarter as compared to the prior year period, MSG
Sports revenues of $38.2 million increased 21%. The increase in revenues was
primarily due to higher suite rental fee revenue, league distributions and
other net increases.First quarter AOCF of $2.9 million increased by $1.5
million and operating loss of $0.4 million improved by $1.7 million, both
primarily due to the increase in revenues and, to a lesser extent, a decrease
in selling, general and administrative expenses, largely offset by higher
direct operating expenses.The increase in direct operating expenses was
primarily due to higher other team operating expenses (which includes the
impact of the absence of a league expense recoupment recorded during the prior
year first quarter), an increase in net provisions for certain team personnel
transactions and other net increases.

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 Hartford Wolf Pack (AHL). MSG Sports also
features the presentation of a wide variety of live sporting events including
professional boxing, college basketball, bull riding 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, The Theater at Madison Square Garden,
Radio City Music Hall, the Beacon Theatre, the Forum in Inglewood, CA, The
Chicago Theatre, 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=15647

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 below.

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 84216339

Conference call replay number is 855-859-2056 / Conference ID Number 84216339
until November 8, 2013

THE MADISON SQUARE GARDEN COMPANY
CONSOLIDATED OPERATIONS DATA AND RECONCILIATION
(In thousands, except per share data)
(Unaudited)
                                                          
                                                          Three Months Ended
                                                           September 30,
                                                          2013      2012
                                                                   
Revenues                                                  $ 215,585 $ 204,166
Adjusted operating cash flow                               $65,500  $63,309
Share-based compensation expense                           (2,830)   (3,419)
Operating income before depreciation and amortization      62,670    59,890
Depreciation and amortization (incl. impairments)          (22,807)  (19,700)
Operating income                                           39,863    40,190
Other income (expense):                                             
Interest expense, net                                      (1,288)   (1,130)
Miscellaneous                                              6         36
Income from operations before income taxes                 38,581    39,096
Income tax expense                                         (14,713)  (18,491)
Net income                                                 $23,868  $20,605
Basic earnings per common share                            $0.31   $0.27
Diluted earnings per common share                          $0.31   $0.26
                                                                   
Basic weighted-average number of common shares outstanding 77,014    75,627
Diluted weighted-average number of common shares           78,101    77,767
outstanding

           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  
                                             September 30,
                                            2013      2012      %
                                                                 Change
                                                              
MSG Media                                   $166,615 $159,538 4%
MSG Entertainment                            28,625    30,777    (7) %
MSG Sports                                   38,165    31,564    21%
Other (including Inter-segment eliminations) (17,820)  (17,713)  (1) %
Total Madison Square Garden Company.         $215,585 $204,166 6%

ADJUSTED OPERATING CASH FLOW AND OPERATING INCOME (LOSS)

                       Adjusted Operating         Operating Income   
                        Cash Flow                   (Loss)
                       Three Months Ended  %       Three Months Ended %
                        September 30,               September 30,
                       2013      2012      Change  2013      2012     Change
                                                                 
MSG Media               $81,450  $76,704  6%     $76,703  $71,013 8 %
MSG Entertainment      (15,010) (12,559) (20) %  (18,409)  (16,030) (15) %
MSG Sports              2,923     1,461     100%   (410)     (2,100)  80%
All other               (3,863)   (2,297)   (68)% (18,021)  (12,693) (42) %
Total Madison Square    $65,500  $63,309  3%     $39,863  $40,190 (1) %
Garden Company

                                      

THE MADISON SQUARE GARDEN COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)

                                                  September 30, June 30,
                                                   2013            2013
ASSETS                                             
Current Assets:                                                   
Cash and cash equivalents                          $119,131       $277,913
Restricted cash                                    8,414           8,413
Accounts receivable, net                           130,360         145,728
Net related party receivables                      29,122          18,565
Prepaid expenses                                   58,385          41,215
Other current assets                               24,904          20,339
Total current assets                               370,316         512,173
Investments in nonconsolidated affiliates          147,793         --
Property and equipment, net                        1,230,728       1,135,180
Amortizable intangible assets, net                 88,105          90,705
Indefinite-lived intangible assets                 158,636         158,636
Goodwill                                           742,492         742,492
Other assets                                       96,926          93,028
                                                  $ 2,834,996     $ 2,732,214

                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:                                              
Accounts payable                                   $20,755       $16,006
Net related party payables                         308           283
Accrued liabilities:                                              
Employee related costs                             47,549         70,663
Other accrued liabilities                          178,982         221,405
Deferred revenue                                   371,088         237,537
Total current liabilities                         618,682         545,894
Defined benefit and other postretirement           56,696          59,726
obligations
Other employee related costs                       38,647          45,370
Other liabilities                                  58,456          58,536
Deferred tax liability                             555,506         543,753
Total liabilities                                  1,327,987       1,253,279
Commitments and contingencies                                     
Stockholders' Equity:                                             
Class A Common stock, par value $0.01, 360,000
shares authorized; 63,272 and 63,268 shares        639             639
outstanding.
Class B Common stock, par value $0.01, 90,000      136             136
shares authorized; 13,589 shares outstanding
Preferred stock, par value $0.01, 45,000 shares    --              --
authorized; none outstanding
Additional paid-in capital                         1,074,781       1,070,764
Treasury stock, at cost, 596 shares                (14,179)        (14,179)
Retained earnings                                  461,662         437,794
Accumulated other comprehensive loss               (16,030)        (16,219)
Total stockholders' equity                         1,507,009       1,478,935
                                                  $ 2,834,996     $ 2,732,214

THE MADISON SQUARE GARDEN COMPANY
SELECTED CASH FLOW INFORMATION
(Dollars in thousands)
(Unaudited)

                                                Three Months Ended 
                                                 September 30,
                                                2013      2012
Net cash provided by operating activities        $79,995  $68,978
Net cash used in investing activities            (239,884)  (70,348)
Net cash provided by financing activities        1,107      148
Net decrease in cash and cash equivalents        (158,782)  (1,222)
Cash and cash equivalents at beginning of period 277,913    206,500
Cash and cash equivalents at end of period       $119,131  $205,278

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
 
Press spacebar to pause and continue. Press esc to stop.