NEW YORK, Aug 6, 2010 (GlobeNewswire via COMTEX News Network) -- Madison Square Garden, Inc. (Nasdaq:MSG) today reported financial results for the second quarter ended June 30, 2010.
Madison Square Garden's second quarter 2010 revenues increased 9.5% to $227.1 million compared to the prior year period, primarily reflecting an increase in revenue in the company's MSG Media and MSG Entertainment segments. Adjusted operating cash flow ("AOCF")(1) increased 303.7% to $42.4 million and operating income increased $34.5 million to $25.7 million, as compared to the second quarter of 2009. On an overall basis, AOCF and operating income growth were primarily driven by higher MSG Media revenue and lower operating expenses in the MSG Sports segment.
Second quarter net income of $14.0 million ($0.18 per diluted share) increased $17.9 million compared to a loss of $3.9 million (loss
of $0.05 per diluted share) in the prior year period. The increase
in net income primarily reflects the growth in operating income discussed above.
Madison Square Garden President and CEO Hank Ratner said: "Madison Square Garden's strong second quarter growth is a continued reflection of the integrated approach to our dynamic content, iconic venues and programming distribution platforms. We are enthusiastic about the strategy we have in place and continue to see all three of our business segments as meaningful contributors to our profitability over the long term. In addition, the transformation of Madison Square Garden into a state-of-the-art facility is now underway and we remain confident that the transformed Arena will further enhance our growth profile in the years ahead."
Results from Operations
Segment results for the quarters ended June 30, 2010 and 2009 are as follows:
Revenue AOCF Operating Income (Loss)
------------------------ ----------------------- --------------------------
Q2 % Q2 Q2 % Q2 %
$ millions Q2 2010 2009 Change 2010 2009 Change Q2 2010 2009 Change
------- ------ ------- ------ ------ ------- --------- ------ -------
MSG Media $134.5 $113.8 18.2 % $62.1 $39.9 55.7 % $56.7 $33.3 69.9 %
MSG Entertainment 46.8 41.0 14.0 % (20.0) (11.8) (70.5)% (22.8) (16.1) (41.6)%
MSG Sports 63.9 68.6 (6.9)% 3.5 (15.8) -- 0.6 (19.3) --
Other (including
eliminations) (18.0) (16.0) (12.2)% (3.2) (1.8) (76.5)% (8.7) (6.6) (31.2)%
------- ------ ------- ------ ------ ------- --------- ------ -------
Total Company $227.1 $207.3 9.5 % $42.4 $10.5 303.7 % $25.7 ($8.8) --
------- ------ ------- ------ ------ ------- --------- ------ -------
Note: Does not foot due to rounding
-- 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
MSG Media revenues for the second quarter 2010 rose 18.2% to $134.5 million, primarily driven by affiliate fee revenue growth, and by an increase in advertising revenue. Affiliate fee revenue increased $19.7 million compared to the year ago period, largely attributable to higher contractual affiliation rates, including the impact of a new long-term affiliation agreement with Cablevision, which was effective January 1, 2010. Advertising revenue increased $1.0 million compared to the year ago quarter. AOCF increased 55.7% to $62.1 million and operating income rose 69.9% to $56.7 million, both as compared to the year ago period. These results primarily reflect the growth in affiliate and advertising revenue, as well as lower direct operating expense and lower selling, general and administrative expense.
MSG Entertainment
MSG Entertainment revenues for
the second quarter 2010 rose 14.0% to $46.8 million, primarily led by an increase in the number of live entertainment events held at Radio City Music Hall. The segment's AOCF loss increased by $8.3 million to a loss of $20.0 million and operating loss increased by $6.7 million to a loss of $22.8 million, both as compared to the prior year. MSG Entertainment AOCF and operating income results in the second quarter of 2010 include a $9.9 million impairment charge and operating losses related to a live entertainment production, slightly offset by improved net results at our owned and operated venues, and lower selling, general and administrative expense.
MSG Sports
MSG Sports revenues for the second quarter 2010 decreased 6.9% to $63.9 million. The decrease in revenues was primarily attributable to a decline in sports team playoff revenues and the absence of a marquee arena
boxing event such as the one held in the second quarter of 2009, partially offset by higher broadcast rights revenue and regular season sports team ticket revenue. AOCF improved by $19.4 million to $3.5 million while the segment's operating income improved by $19.9 million to $0.6 million. The improvement in AOCF and operating income mainly reflects lower sports team operating costs and lower selling, general and administrative expense.
About Madison Square Garden
Madison Square Garden is a fully-integrated sports, entertainment and media business. The company is comprised of three business segments: MSG Sports, MSG Entertainment and MSG Media, which are strategically aligned to work together to drive MSG's overall business, which is built on a foundation of iconic venues and compelling content that MSG 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 Hartford Wolf Pack (AHL). MSG Sports also features other sports properties, including the presentation of a wide variety of live sporting events including professional boxing, college basketball, track and field and tennis. 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, throughout the country. 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. 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 Media is also responsible for managing interactive initiatives across all business segments. More information is available at www.msg.com.
The Madison Square Garden, Inc. 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 depreciation and
amortization, excluding share-based compensation expense or benefit and 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 the expense or benefit of awards under our equity plans (including restricted shares, restricted stock units, stock options and stock appreciation rights) 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 and/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. EDT at www.msg.com
Conference call dial-in number is 877-347-9170 / Conference ID Number 90227143
Conference call replay number is 800-642-1687 / Conference ID Number 90227143 until August 13, 2010
MADISON SQUARE GARDEN, INC.
CONSOLIDATED OPERATIONS DATA AND RECONCILIATION
(Dollars in thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- --------------------
2010 2009 2010 2009
--------- ---------- --------- ---------
Revenues $ 227,131 $ 207,336 $ 533,632 $488,654
--------- ---------- --------- ---------
Adjusted operating cash flow $ 42,442 $ 10,512 $ 90,945 $ 26,496
Share-based compensation expense (2,548) (4,512) (5,859) (6,850)
--------- ---------- --------- ---------
Operating income before
depreciation and amortization 39,894 6,000 85,086 19,646
Depreciation and amortization (14,199) (14,768) (29,260) (30,496)
--------- ---------- --------- ---------
Operating income (loss) 25,695 (8,768) 55,826 (10,850)
Other income (expense):
Interest income (expense), net (988) (397) (1,106) (668)
Miscellaneous, net -- 2,000 2,000 2,000
--------- ---------- --------- ---------
Income (loss) from operations
before income taxes 24,707 (7,165) 56,720 (9,518)
Income tax benefit (expense) (10,694) 3,266 (25,326) 3,678
--------- ---------- --------- ---------
Net income (loss) $ 14,013 $ (3,899) $ 31,394 $ (5,840)
--------- ---------- --------- ---------
Basic net earnings (loss) per
common share $ 0.19 $ (0.05) $ 0.43 $ (0.08)
--------- ---------- --------- ---------
Diluted net earnings (loss) per
common share $ 0.18 $ (0.05) $ 0.41 $ (0.08)
--------- ---------- --------- ---------
Basic weighted average common
shares (000s) 73,957 73,309 73,705 73,309
Diluted weighted average common
shares (000s) 76,773 73,309 76,488 73,309
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
and amortization in all periods.
-- Share-based compensation benefit (expense). This adjustment eliminates
the compensation benefit (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.
MADISON SQUARE GARDEN, INC.
CONSOLIDATED OPERATIONS DATA AND RECONCILIATION
(Dollars in thousands)
(Unaudited)
REVENUES
Three Months Ended
June 30,
--------------------
%
2010 2009 Change
--------- --------- -------
MSG Media $ 134,482 $ 113,767 18.2%
MSG Entertainment 46,765 41,024 14.0%
MSG Sports 63,874 68,575 (6.9)%
Inter-segment eliminations (17,990) (16,030)
--------- --------- (12.2)%
Total Madison Square
Garden, Inc. $ 227,131 $ 207,336
========= ========= 9.5%
Six Months Ended
June 30,
--------------------
%
2010 2009 Change
--------- --------- -------
MSG Media $ 273,987 $ 232,058 18.1%
MSG Entertainment 88,238 79,032 11.6%
MSG Sports 206,537 210,162 (1.7)%
Inter-segment eliminations (35,130) (32,598)
--------- --------- (7.8)%
Total Madison Square
Garden, Inc. $ 533,632 $ 488,654
========= ========= 9.2%
ADJUSTED OPERATING CASH FLOW AND OPERATING INCOME (LOSS)
Adjusted Operating Operating Income
Cash Flow (Loss)
------------------- --------------------
Three Months Ended Three Months Ended
June 30, June 30,
------------------- --------------------
% %
2010 2009 Change 2010 2009 Change
--------- -------- ------- --------- --------- -------
MSG Media $62,113 $39,880 55.7% $56,660 $33,340 69.9%
MSG Entertainment (20,037) (11,752) (70.5)% (22,844) (16,132) (41.6)%
MSG Sports 3,545 (15,815) -- 587 (19,337) --
All other (3,179) (1,801) (8,708) (6,639)
--------- -------- (76.5)% --------- --------- (31.2)%
Total Madison Square
Garden, Inc. $42,442 $10,512 $25,695 $(8,768)
========= ======== 303.7% ========= ========= --
Adjusted Operating Operating Income
Cash Flow (Loss)
------------------- --------------------
Six Months Ended Six Months Ended
June 30, June 30,
------------------- --------------------
% %
2010 2009 Change 2010 2009 Change
--------- -------- ------- --------- --------- -------
MSG Media $123,892 $83,574 48.2% $112,437 $70,260 60.0%
MSG Entertainment (32,750) (26,059) (25.7)% (39,129) (33,711) (16.1)%
MSG Sports 6,952 (27,022) -- 521 (33,606) --
All other (7,149) (3,997) (18,003) (13,793)
--------- -------- (78.9)% --------- --------- (30.5)%
Total Madison Square
Garden, Inc. $90,945 $26,496 $55,826 $(10,850)
========= ======== 243.2% ========= ========= --
MADISON SQUARE GARDEN, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
December
(In thousands, except par June 30, 31,
value) 2010 2009
--------------------------- ----------- -----------
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $ 319,745 $ 109,716
Restricted cash 11,414 7,139
Accounts receivable (less
allowance for doubtful
accounts of $2,386 and
$2,337) 108,983 130,460
Net receivable due from
Cablevision 23,351 7,845
Prepaid expenses 33,038 36,849
Advances due from a
subsidiary of
Cablevision -- 190,000
Other current assets 29,578 37,049
----------- -----------
Total current assets 526,109 519,058
Property and equipment,
net of accumulated
depreciation of $395,466
and $375,223 363,061 342,005
Other assets 129,543 131,820
Amortizable intangible
assets, net of accum.
amortization of $104,874
and $105,351 139,013 148,028
Indefinite-lived
intangible assets 158,096 158,096
Goodwill 742,492 742,492
----------- -----------
$ 2,058,314 $ 2,041,499
----------- -----------
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable $ 1,506 $ 7,104
Accrued liabilities:
Employee related costs 57,791 71,646
Other expenses 86,252 85,815
Deferred revenue 128,549 133,584
----------- -----------
Total current
liabilities 274,098 298,149
Defined benefit and other
postretirement
obligations 55,947 45,165
Other employee related
costs 37,801 44,407
Other liabilities 62,816 63,568
Deferred tax liability 513,907 484,107
----------- -----------
Total liabilities 944,569 935,396
----------- -----------
Commitments and
contingencies
Stockholders' Equity:
Class A Common stock, par
value $0.01, 360,000
authorized; 62,247
outstanding 624 --
Class B Common stock, par
value $0.01, 90,000
authorized; 13,589
outstanding 136 --
Preferred stock, par
value $0.01, 45,000
authorized; none
outstanding -- --
Additional paid-in
capital (paid-in
capital, for the period
prior to the
Distribution) 1,023,081 1,042,283
Treasury stock (3,723) --
Retained earnings 109,267 77,873
Accumulated other
comprehensive loss (15,640) (14,053)
Total stockholders'
equity 1,113,745 1,106,103
----------- -----------
$ 2,058,314 $ 2,041,499
=========== ===========
MADISON SQUARE GARDEN, INC.
SELECTED CASH FLOW INFORMATION
(Dollars in thousands)
(Unaudited)
Six Months Ended
(In thousands) June 30,
---------------------------------------------- -------------------
2010 2009
--------- --------
Net cash provided by operating activities $ 70,798 $ 15,529
--------- --------
Net cash used in investing activities (41,766) (23,810)
--------- --------
Net cash provided by (used in) financing
activities 180,997 (461)
--------- --------
Net increase (decrease) in cash and cash
equivalents 210,029 (8,742)
Cash and cash equivalents at beginning of
period 109,716 70,726
--------- --------
Cash and cash equivalents at end of period $ 319,745 $ 61,984
========= ========
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SOURCE: Madison Square Garden, Inc.
CONTACT: Madison Square Garden, Inc.
Barry Watkins, Executive Vice President, Communications
(212) 465-5920
Alysia Lew, Vice President, Financial Communications
(212) 465-5925
Ari Danes, CFA, Vice President, Investor Relations
(212) 465-6072
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