The Madison Square Garden Company Reports Fiscal 2014 Third Quarter Results

The Madison Square Garden Company Reports Fiscal 2014 Third Quarter Results

NEW YORK, May 2, 2014 (GLOBE NEWSWIRE) -- The Madison Square Garden Company
(Nasdaq:MSG) today reported financial results for the fiscal 2014 third
quarter ended March 31, 2014.

Fiscal 2014 third quarter revenues of $459 million grew 11%, as compared to
the prior year period, with increases in all three of the Company's business
segments. Fiscal 2014 third quarter adjusted operating cash flow ("AOCF")^(1)
of $65.7 million decreased 28%, as compared to the prior year period, due to
an increase in unallocated corporate expenses ("Other"), as well as lower AOCF
results in all three of the Company's business segments. Fiscal 2014 third
quarter operating income of $27.4 million decreased 57% and net income of
$19.1 million ($0.24 per diluted share) decreased 50%, both as compared to the
prior year third quarter.

Fiscal 2014 third quarter reported results were impacted by certain items.
This includes executive management transition costs, which are included in
unallocated corporate expenses ("Other") on an AOCF and operating income
basis. MSG Entertainment results reflect increased direct operating expenses
related to a planned 2014 limited engagement run of a new large-scale
theatrical production, which was subsequently postponed until 2015. Excluding
the impact of the above items, fiscal 2014 third quarter total company AOCF
would have been approximately $88 million. In addition, unallocated
share-based compensation expense, which is included in "Other" on an operating
income basis, but not on an AOCF basis, reflects additional executive
management transition costs. Excluding the impact of all of the above items,
fiscal 2014 third quarter operating income would have been approximately $54
million.

President and CEO Tad Smith said: "This fiscal year will bring a successful
end to MSG's first chapter as a public company, as we are now concluding a
significant, multi-year capital investment cycle. As we look ahead, our
priority is to generate attractive long-term growth for our shareholders. To
achieve this, we plan to maximize the growth and profitability of our current
businesses, while exploring new strategic opportunities with attractive rates
of return. We look forward to our Company's next chapter as one of the
country's leading media, entertainment and sports companies."

Results from Operations

Segment results for the quarters ended March 31, 2014 and 2013 are as follows:

             Revenues             AOCF                     Operating Income
                                                            (Loss)
$ millions    F'Q3   F'Q3   %      F'Q3   F'Q32013 %      F'Q3   F'Q3   %
              2014   2013   Change 2014              Change 2014   2013  Change
MSG Media     $190.8 $184.7 3%     $92.0  $95.4      (4)%   $87.1  $89.8  (3)%
MSG           52.8   35.5   49%    (20.2) (13.1)     (54)%  (24.2) (17.1) (41)%
Entertainment
MSG Sports    233.7  208.1  12%    9.8    11.6       (15)%  5.9    8.1    (28)%
Other
(includes     (18.4) (15.8) (16)%  (15.9) (2.2)      --     (41.3) (17.0) (142)%
eliminations)
Total Company $459.0 $412.4 11%    $65.7  $91.7      (28)%  $27.4  $63.8  (57)%

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.

MSG Media

For the fiscal 2014 third quarter as compared to the prior year period, MSG
Media revenues of $190.8 million increased 3%. Affiliation fee revenue
increased $10 million, primarily due to higher affiliation rates, partially
offset by the impact of a small decrease in subscribers at MSG Networks.
Advertising revenue increased $0.3 million, primarily due to higher sales
generated from the telecast of NHL games and, to a lesser extent, original
programming on MSG Networks, partially offset by lower Knicks-related
advertising sales. Other revenues decreased $4.1 million, primarily due to the
expiration in April 2013 of a short-term programming licensing agreement.
Third quarter AOCF of $92 million decreased 4% and operating income of $87.1
million decreased 3%, both primarily due to an increase in direct operating
expenses, largely offset by the increase in revenues.The increase in direct
operating expenses was mainly due to the return to a full NHL regular season
schedule.

MSG Entertainment

For the fiscal 2014 third quarter as compared to the prior year period, MSG
Entertainment revenues of $52.8 million increased 49%. The increase was
primarily due to higher event-related revenues at The Garden (primarily due to
more events, mainly additional MSG Entertainment-promoted events),
event-related revenues at the Forum (which re-opened on January 15, 2014) and
higher venue-related sponsorship and signage and suite rental fee
revenues.This was partially offset by lower event-related revenues at Radio
City Music Hall, which was unavailable for events for the majority of the
quarter due to the load-in and rehearsal of the Company's new, large-scale
theatrical production, which was subsequently postponed until 2015.Third
quarter AOCF loss of $20.2 million increased $7.1 million and operating loss
of $24.2 million increased $7.1 million, both due to an increase in direct
operating expenses and, to a lesser extent, an increase in selling, general
and administrative expenses, largely offset by the increase in revenues.The
increase in direct operating expenses includes a $9.5 million increase related
to the Company's new, large-scale theatrical production.Excluding the $9.5
million increase in expenses, MSG Entertainment AOCF would have improved by
$2.4 million versus the prior year third quarter.

MSG Sports

For the fiscal 2014 third quarter as compared to the prior year period, MSG
Sports revenues of $233.7 million increased 12%.The increase in revenues was
primarily due to higher event-related revenues from other live sporting
events, professional sports team regular season ticket-related revenue,
professional sports team sponsorship and signage revenues, inter-segment
broadcast rights fees and suite rental fee revenue.Third quarter AOCF of $9.8
million decreased by $1.8 million and operating income of $5.9 million
decreased by $2.3 million, both primarily due to an increase in direct
operating expenses and, to a lesser extent, higher selling, general and
administrative expenses, largely offset by the increase in revenues.The
increase in direct operating expenses was primarily due to higher net
provisions for NBA luxury tax and NBA and NHL revenue sharing expense, team
personnel compensation expense and other team operating costs.

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), the Hartford Wolf Pack (AHL) and an NBA Development
League franchise.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
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 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 31587884

Conference call replay number is 855-859-2056 / Conference ID Number 31587884
until May 9, 2014



THE MADISON SQUARE GARDEN COMPANY
CONSOLIDATED OPERATIONS DATA AND RECONCILIATION
(In thousands, except per share data)
(Unaudited)

                                 Three Months Ended   Nine Months Ended
                                  March 31,            March 31,
                                 2014      2013       2014        2013
                                                               
Revenues                        $458,956 $ 412,406 $1,183,920 $1,004,458
Adjusted operating cash flow     $ 65,713  $ 91,739   $257,785   $263,336
Share-based compensation expense (8,590)   (4,958)    (17,057)    (13,898)
Operating income before           57,123    86,781     240,728     249,438
depreciation and amortization
Depreciation and amortization    (29,674)  (22,995)   (76,869)    (64,439)
Operating income                 27,449    63,786     163,859     184,999
Other income (expense):                                         
Equity in earnings (loss) of      663       --         (75)        --
nonconsolidated affiliates
Interest expense, net            (1,135)   (1,193)    (3,636)     (3,607)
Miscellaneous                    72        3,373      95          3,475
Income from operations before     27,049    65,966     160,243     184,867
income taxes
Income tax expense               (7,995)   (27,517)   (56,812)    (78,902)
Net income                       $19,054  $38,449   $103,431   $105,965
Basic earnings per common share  $0.25   $0.50    $1.34     $1.39
Diluted earnings per common       $0.24   $0.49    $1.32     $1.36
share
                                                               
Basic weighted-average number of  77,162    76,537     77,069      76,022
common shares outstanding
Diluted weighted-average number   78,211    78,041     78,142      77,900
of common shares 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      
                                             March 31,               
                                                                   %
                                             2014        2013        Change
                                                                   
MSG Media                                    $ 190,825   $ 184,666   3%
MSG Entertainment                            52,785      35,491      49%
MSG Sports                                    233,739     208,080     12%
Other (including Inter-segment eliminations) (18,393)    (15,831)    (16)%
Total Madison Square Garden Company           $ 458,956   $ 412,406   11%
                                                                   
                                                                   
                                             Nine Months Ended       
                                             March 31,
                                                                   %
                                             2014        2013        Change
MSG Media                                    $ 538,149   $ 500,974   7%
MSG Entertainment                            244,510     217,390     12%
MSG Sports                                    455,293     329,547     38%
Other (including Inter-segment eliminations) (54,032)    (43,453)    (24)%
Total Madison Square Garden Company           $ 1,183,920 $ 1,004,458 18%
                                                                   

ADJUSTED OPERATING CASH FLOW AND OPERATING INCOME (LOSS)

                         Adjusted Operating        Operating Income   
                          Cash Flow                  (Loss)
                         Three Months Ended  %      Three Months Ended %
                          March 31,                  March 31,
                         2014      2013      Change 2014      2013     Change
                                                                  
MSG Media                $91,950  $95,390  (4)%   $87,071  $89,786 (3)%
MSG Entertainment       (20,200) (13,078) (54)%  (24,186)  (17,102) (41)%
MSG Sports                9,846     11,649    (15)%  5,872     8,143    (28)%
All other                (15,883)  (2,222)   -      (41,308)  (17,041) (142)%
Total Madison Square     $65,713  $91,739  (28) % $27,449  $63,786 (57)%
Garden Company

                                                                    
                        Adjusted Operating        Operating Income    
                         Cash Flow                  (Loss)
                        Nine Months Ended   %      Nine Months Ended   %
                         March 31,                  March 31,
                        2014      2013      Change 2014      2013      Change
                                                                  
MSG Media               $259,194 $267,712 (3)%   $244,438 $250,982 (3)%
MSG Entertainment       7,110    4,399     62%    (4,412)  (6,904)  36%
MSG Sports               13,871    (1,374)   -      2,551     (12,279)  -
All other               (22,390)  (7,401)   (203)% (78,718)  (46,800)  (68)%
Total Madison Square     $257,785 $263,336 (2)%   $163,859 $184,999 (11)%
Garden Company

                                      

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


                                               March 31,2014 June 30,2013
ASSETS                                          
Current Assets:                                                
Cash and cash equivalents                      $76,545        $277,913
Restricted cash                                16,663          8,413
Accounts receivable, net                       200,107         145,728
Net related party receivables                  25,968          18,565
Prepaid expenses                               39,877          41,215
Other current assets                           28,038          20,339
Total current assets                           387,198         512,173
Investments in and loans to nonconsolidated     186,927         --
affiliates
Property and equipment, net                    1,273,760       1,135,180
Amortizable intangible assets, net             82,906          90,705
Indefinite-lived intangible assets             163,839         158,636
Goodwill                                       742,492         742,492
Other assets                                   101,997         93,028
Total assets                                   $ 2,939,119     $ 2,732,214

                                                              
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:                                           
Accounts payable                               $20,075       $16,006
Net related party payables                     862           283
Accrued liabilities:                                           
Employee related costs                         82,149         70,663
Other accrued liabilities                      246,656         221,405
Deferred revenue                               274,275         237,537
Total current liabilities                      624,017         545,894
Defined benefit and other postretirement        61,091          59,726
obligations
Other employee related costs                   46,315          45,370
Other liabilities                              63,069          58,536
Deferred tax liability                         549,725         543,753
Total liabilities                              1,344,217       1,253,279
Commitments and contingencies                                  
Stockholders' Equity:                                          
Class A Common stock, par value $0.01, 360,000
shares authorized; 63,589 and 63,268 shares     639             639
outstanding as of March 31, 2014 and June 30,
2013, respectively
Class B Common stock, par value $0.01, 90,000
shares authorized; 13,589 shares outstanding as 136             136
of March 31, 2014 and June 30, 2013
Preferred stock, par value $0.01, 45,000 shares --              --
authorized; none outstanding
Additional paid-in capital                      1,076,097       1,070,764
Treasury stock, at cost, 317 and 596 shares as
of March 31, 2014 and June 30, 2013,            (7,537)         (14,179)
respectively
Retained earnings                               541,225         437,794
Accumulated other comprehensive loss            (15,658)        (16,219)
Total stockholders' equity                      1,594,902       1,478,935
Total liabilities and stockholders' equity      $ 2,939,119     $ 2,732,214



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

                                                 Nine Months Ended March 31,
                                                 2014          2013
Net cash provided by operating activities        $217,048     $180,762
Net cash used in investing activities            (413,126)      (152,551)
Net cash used in financing activities            (5,290)        (6,294)
Net increase (decrease) in cash and cash          (201,368)      21,917
equivalents
Cash and cash equivalents at beginning of period 277,913        206,500
Cash and cash equivalents at end of period       $76,545       $228,417

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
 
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