updated 5/6/2011 12:45:48 PM ET 2011-05-06T16:45:48

First quarter revenue of $330.4 million, a 7.8% increase compared to 2010 first quarter  
First quarter AOCF of $54.9 million, a 13.1% increase compared to 2010 first quarter  
First quarter operating income of $30.4 million, up 0.9% versus prior year period  
Earnings per share of $0.25, up 9% versus prior year period

NEW YORK, May 6, 2011 (GLOBE NEWSWIRE) -- The Madison Square Garden Company (Nasdaq:MSG) today reported financial results for the first quarter ended March 31, 2011.

First quarter 2011 revenues of $330.4 million increased 7.8%, as compared to the first quarter of 2010, reflecting an increase in revenues in the company's MSG Media, MSG Entertainment and MSG Sports segments. Adjusted operating cash flow ("AOCF")(1) of $54.9 million increased 13.1% and operating income of $30.4 million increased 0.9%, both as compared to the first quarter of 2010. AOCF growth was primarily driven by improved results in the MSG Entertainment segment. Operating income growth was largely attributable to the MSG Entertainment segment's improved results, mostly offset by an increase in depreciation expense, primarily associated with certain assets that will be removed as a result of the ongoing Arena Transformation project.

First quarter net income of $19.1 million ($0.25 per diluted share) increased 9.8% versus $17.4 million ($0.23 per diluted share) in the prior year period. Net income growth primarily reflects an increase in other income due to a gain on the exchange of an investment. Cash and cash equivalents as of March 31, 2011 totaled $310.8 million versus $354.5 million at 2010 year-end.

President and CEO Hank Ratner said: "We are pleased with our start to 2011, as we continued to deliver solid revenue and AOCF growth, reflecting the operating momentum of our unique sports franchises, world renowned venues and valuable programming networks. We have begun the first phase of the Arena Transformation project and look forward to debuting the transformed lower bowl of the Madison Square Garden Arena in the fall. As our sales initiatives are progressing, we remain confident that the Arena Transformation project will generate meaningful incremental revenues and AOCF for our company."   

Results from Operations

Segment results for the quarters ended March 31, 2011 and 2010 are as follows:
 

       
  Revenue AOCF Operating Income (Loss)
$ millions Q1 2011 Q1 2010 % Change Q1 2011 Q1 2010 % Change Q1 2011 Q1 2010 % Change
MSG Media $147.6 $139.5 5.8 % $62.6 $61.8 1.3 % $56.2 $55.8 0.7 %
MSG Entertainment 42.8 41.5 3.2 % (6.8) (12.7) 46.7 % (10.0) (16.3) 38.6 %
MSG Sports 157.7 142.7 10.6 % 3.5 3.4 3.9 % 0.1 (0.1)  --
Other ( including eliminations ) (17.7) (17.1) (3.2) % (4.5) (4.0) (12.5) % (15.9) (9.3) (71.0)%
Total Company $330.4 $306.5 7.8 % $54.9 $48.5 13.1 % $30.4 $30.1 0.9 %


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 2011 first quarter, MSG Media revenues of $147.6 million rose 5.8%, as compared to the prior year period. Advertising revenues increased $5.0 million, as compared to the first quarter of 2010. Affiliate fee revenues increased $3.3 million, as compared to the year-ago period, primarily attributable to higher affiliation rates, with the overall increase being substantially offset by the impact of the expiration of certain affiliation agreements. AOCF of $62.6 million increased 1.3% and operating income of $56.2 million increased 0.7%, both as compared to the first quarter of 2010. The increase in AOCF and operating income primarily reflects the increase in advertising and affiliate fee revenues, mostly offset by higher direct operating expenses and, to a lesser extent, selling, general and administrative expenses.

MSG Entertainment

For the 2011 first quarter, MSG Entertainment revenues of $42.8 million rose 3.2%, as compared to the prior year period. An increase in event-related revenues (excluding live productions), led by the company's New York venues, and sponsorship and signage revenues, was mostly offset by lower live productions revenues, primarily due to fewer scheduled performances of the Radio City Christmas Spectacular franchise and Wintuk versus the prior year quarter. The segment's AOCF loss of $6.8 million improved by 46.7% and operating loss of $10.0 million improved by 38.6%, both as compared to the first quarter of 2010. The improvement in AOCF and operating income primarily reflects favorable event-related results and a decrease in direct operating expenses attributable to our 2010 live productions.       

MSG Sports

For the 2011 first quarter, MSG Sports revenues of $157.7 million increased 10.6%, as compared to the prior year period.  The increase in revenues was primarily attributable to higher professional sports team food, beverage and merchandise sales and regular season ticket-related revenues, event-related revenues from other live sporting events, sponsorship and signage revenues, and suite rental fees. AOCF of $3.5 million increased 3.9% and operating income improved from a loss of $0.1 million to positive $0.1 million, both as compared to the prior year quarter. The increase in AOCF and operating income reflects the increase in revenues, mostly offset by higher direct operating expenses and, to a lesser extent, selling, general and administrative expenses. The increase in direct operating expenses was largely attributable to higher sports team player and other operating costs, including a $3.5 million increase in expenses for certain team personnel transactions.

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 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 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 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 share-based compensation expense or benefit allows investors to better track the performance of the various operating units of our business without regard to the distortive effects of fluctuating stock prices in the case of stock appreciation rights and, in the case of restricted shares, restricted stock units and stock options, 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 35057621 
Conference call replay number is 800-642-1687 / Conference ID Number 35057621 until May 13, 2011

 

     
THE MADISON SQUARE GARDEN COMPANY
     
CONSOLIDATED OPERATIONS DATA AND RECONCILIATION
(In thousands, except per share data)
(Unaudited)
     
  Three Months Ended
  March 31,
  2011 2010
     
Revenues  $330,413 $306,501
Adjusted operating cash flow $54,868 $48,503
Share-based compensation expense (3,299) (3,311)
Operating income before depreciation and amortization 51,569 45,192
Depreciation and amortization (21,170) (15,061)
Operating income 30,399 30,131
Other income (expense):    
Interest expense, net (1,059) (118)
Miscellaneous 5,561 2,000
Income from operations before income taxes 34,901 32,013
Income tax expense (15,814) (14,632)
Net income $19,087 $17,381
Basic earnings per common share $0.26 $0.24
Diluted earnings per common share $0.25 $0.23
     
Basic weighted-average number of common shares outstanding  74,193 73,450
Diluted weighted-average number of common shares outstanding 77,200 76,200

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 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,
 
   

2011
 

2010
 %

 Change
       
MSG Media $ 147,564 $ 139,505 5.8 %
MSG Entertainment 42,805 41,473 3.2 %
MSG Sports 157,739 142,663 10.6 %
Inter-segment eliminations (17,695) (17,140) (3.2) %
 Total Madison Square Garden Company $ 330,413 $ 306,501 7.8 %
 
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,


%
  2011 2010 Change 2011 2010 Change
             
MSG Media $ 62,577 $ 61,779 1.3 % $ 56,164 $ 55,777 0.7 %
MSG Entertainment (6,782) (12,713) 46.7 % (9,998) (16,285) 38.6 %
MSG Sports 3,540 3,407 3.9 % 129 (66) --
All other (4,467) (3,970)  (12.5) % (15,896) (9,295) (71.0) %
 Total Madison Square Garden Company $   54,868 $   48,503 13.1 % $ 30,399 $ 30,131 0.9 %

 

 
THE MADISON SQUARE GARDEN COMPANY
 
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
     
   March 31,

 2011
December 31,

2010
ASSETS  
Current Assets:    
Cash and cash equivalents $ 310,817 $ 354,498
Restricted cash 7,464 4,215
Accounts receivable, net of allowance for doubtful accounts of $2,375 and $2,410 133,234 127,897
Net receivable due from Cablevision 25,210 22,907
Prepaid expenses 33,741 40,411
Other current assets 24,551 25,638
Total current assets 535,017 575,566
Property and equipment, net of accumulated depreciation and amortization of $425,426 and $408,561 515,438 472,821
Other assets 125,936 118,429
Amortizable intangible assets, net of accumulated amortization of $117,789 and $113,484 126,098 130,403
Indefinite-lived intangible assets 158,096 158,096
Goodwill 742,492 742,492
  $ 2,203,077 $ 2,197,807
 

 

LIABILITIES AND EQUITY
   
Current Liabilities:    
Accounts payable  $ 14,887  $ 8,118
Accrued liabilities:    
Employee related costs  56,798  71,859
Other accrued liabilities 142,873 117,509
Deferred revenue 126,650 148,819
Total current liabilities 341,208 346,305
Defined benefit and other postretirement obligations 54,125 55,700
Other employee related costs 36,403 40,079
Other liabilities 62,659 57,272
Deferred tax liability 519,332 527,527
Total liabilities 1,013,727 1,026,883
Commitments and contingencies    
Stockholders' Equity:    
Class A Common stock, par value $0.01, 360,000 shares authorized; 62,103 and 62,265 shares outstanding 625 624
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 1,038,730 1,032,121
Treasury stock, at cost, 479 and 234 shares (10,279) (3,723)
Retained earnings 180,340 161,253
Accumulated other comprehensive loss (20,202) (19,487)
Total stockholders' equity 1,189,350 1,170,924
  $ 2,203,077 $ 2,197,807
 
THE MADISON SQUARE GARDEN COMPANY
 
SELECTED CASH FLOW INFORMATION
(Dollars in thousands)
(Unaudited)
 
  Three Months Ended

March 31,
   2011  2010
Net cash provided by (used in) operating activities $ 3,100  $ (1,074) 
Net cash used in investing activities (43,215) (21,346)
Net cash provided by (used in) financing activities (3,566) 180,251
Net increase (decrease) in cash and cash equivalents (43,681) 157,831
Cash and cash equivalents at beginning of period 354,498 109,716
Cash and cash equivalents at end of period $ 310,817 $ 267,547 
CONTACT:  Barry Watkins
          Executive Vice President
          Communications
          Madison Square Garden
          (212) 465-5920
         
          Justin Edelman
          Vice President
          Communications
          Madison Square Garden
          (212) 465-6442
         
          Ari Danes, CFA
          Vice President
          Investor Relations
          Madison Square Garden
          (212) 465-6072

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.93%
$30K home equity loan FICO 5.20%
$75K home equity loan FICO 4.58%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.40%
Cash Back Cards 17.92%
17.91%
Rewards Cards 17.13%
17.11%
Source: Bankrate.com