Madison Square Garden Entertainment Corp. Reports Fourth Quarter and Fiscal 2021 Results
Madison Square Garden Entertainment Corp. (MSGE) reported financial results for Q4 and fiscal year ended June 30, 2021. Revenues were $99.8 million for Q4, a significant increase from $9.0 million the previous year, but annual revenues fell to $180.4 million from $762.9 million. The company faced an operating loss of $450.2 million for FY 2021. The return of live events and easing restrictions helped drive Q4 revenue increases. MSGE's unrestricted cash balance stood at $1.17 billion, with total combined cash of $1.52 billion. The acquisition of MSG Networks was completed on July 9, 2021.
- Q4 revenues increased to $99.8 million from $9.0 million year-over-year.
- Return of live events boosted revenue; major events occurred at Madison Square Garden.
- Unrestricted cash balance reached $1.17 billion.
- Annual revenues down 76% to $180.4 million compared to $762.9 million the previous year.
- Operating loss of $450.2 million for fiscal 2021, a significant increase from $59.8 million loss the previous year.
Madison Square Garden Entertainment Corp. (NYSE: MSGE) (“MSG Entertainment”) today reported financial results for the fourth quarter and fiscal year ended June 30, 2021.
The fiscal 2021 fourth quarter reflected the return of live events to the Company’s performance venues, following an easing of restrictions during the period. This included Madison Square Garden (“The Garden”) hosting three sold-out New York Knicks home playoff games in May and June, welcoming what was, at that time, the largest indoor crowds to gather in New York State since the start of the pandemic. This was followed by the Foo Fighters, which marked the first sold-out,
Capacity restrictions were also lifted in several U.S. markets for entertainment dining and nightlife venues in the fiscal fourth quarter, permitting Tao Group Hospitality’s U.S. portfolio – which expanded following its acquisition of Hakkasan Group in April – to operate at
Executive Chairman and CEO James L. Dolan said, “Our Company successfully navigated the challenges of this past fiscal year. And while we continue to operate in a fluid environment, we remain cautiously optimistic as we prepare to meet the pent-up demand for live experiences and, after the MSG Networks acquisition, move forward with greater scale and enhanced financial flexibility to pursue growth opportunities and deliver long-term value for shareholders.”
Results from Operations
Results for the fiscal year ended June 30, 2021 reflect the impact of the COVID-19 pandemic. For fiscal 2021, the Company reported revenues of
For the fiscal 2021 fourth quarter, the Company reported revenues of
(1) |
Financial results for the fiscal 2020 period from July 1, 2019 to April 17, 2020 are presented in accordance with accounting requirements for the preparation of carve-out financial statements, reflecting the results of the entertainment businesses previously owned and operated by Madison Square Garden Sports Corp. (“MSG Sports”) through its MSG Entertainment business segment, as well as the sports bookings business previously owned and operated by MSG Sports through its MSG Sports business segment. These results reflect the impact of intercompany agreements between the Company and MSG Sports from the date of the spin-off (April 17, 2020) through June 30, 2020 and may not reflect the level of expenses that would have been incurred by the Company had it been a stand-alone company for the period presented. |
|
(2) |
Fiscal 2020 operating results include the Forum’s results through May 1, 2020. |
|
(3) |
See page 5 of this earnings release for the definition of adjusted operating income (loss) included in the discussion of non-GAAP financial measures. |
|
(4) |
Fiscal 2020 and fiscal 2020 fourth quarter operating loss results include |
Segment Results for the Quarters and Years Ended June 30, 2021 and 2020:
(In millions) |
Three Months Ended |
|
|
|
Twelve Months Ended |
|
|
|||||||||||||||
|
June 30, |
|
|
|
June 30, |
|
|
|||||||||||||||
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
|||||||||||
Revenues: |
|
|
|
|
|
|
||||||||||||||||
Entertainment |
$ |
31.1 |
|
$ |
8.6 |
|
264 |
% |
$ |
82.3 |
|
$ |
585.2 |
|
(86 |
)% |
||||||
Tao Group Hospitality |
69.7 |
|
1.3 |
|
NM |
|
100.2 |
|
180.2 |
|
(44 |
)% |
||||||||||
Other(5) |
(1.0 |
) |
(0.9 |
) |
(10 |
)% |
(2.0 |
) |
(2.5 |
) |
17 |
% |
||||||||||
Total Revenues |
$ |
99.8 |
|
$ |
9.0 |
|
NM |
|
$ |
180.4 |
|
$ |
762.9 |
|
(76 |
)% |
||||||
Operating Income (Loss): |
|
|
|
|
|
|
||||||||||||||||
Entertainment |
$ |
(103.2 |
) |
$ |
118.2 |
|
NM |
|
$ |
(391.0 |
) |
$ |
71.0 |
|
NM |
|
||||||
Tao Group Hospitality |
2.9 |
|
(20.6 |
) |
NM |
|
(29.4 |
) |
(102.6 |
) |
71 |
% |
||||||||||
Other(5) |
(2.1 |
) |
(3.3 |
) |
34 |
% |
(29.8 |
) |
(28.2 |
) |
(6 |
)% |
||||||||||
Total Operating Income (Loss) |
$ |
(102.4 |
) |
$ |
94.4 |
|
NM |
|
$ |
(450.2 |
) |
$ |
(59.8 |
) |
(653 |
)% |
||||||
Adjusted Operating Income (Loss): |
|
|
|
|
|
|
||||||||||||||||
Entertainment |
$ |
(79.6 |
) |
$ |
(90.2 |
) |
12 |
% |
$ |
(254.9 |
) |
$ |
(44.3 |
) |
(476 |
)% |
||||||
Tao Group Hospitality |
9.8 |
|
(13.0 |
) |
NM |
|
(15.2 |
) |
1.5 |
|
NM |
|
||||||||||
Other(5) |
(0.1 |
) |
(0.3 |
) |
50 |
% |
(0.9 |
) |
(0.5 |
) |
(89 |
)% |
||||||||||
Total Adjusted Operating Income (Loss) |
$ |
(70.0 |
) |
$ |
(103.5 |
) |
32 |
% |
$ |
(271.0 |
) |
$ |
(43.3 |
) |
(526 |
)% |
||||||
Note: Does not foot due to rounding |
||
(5) |
Includes inter-segment eliminations and, for operating income (loss), purchase accounting adjustments. |
|
Entertainment
For the fiscal 2021 fourth quarter, the Entertainment segment generated revenues of
Fiscal 2021 fourth quarter direct operating expenses of
Fiscal 2021 fourth quarter selling, general and administrative expenses of
Fiscal 2021 fourth quarter operating income decreased by
Tao Group Hospitality
For the fiscal 2021 fourth quarter, the Tao Group Hospitality segment generated revenues of
Fiscal 2021 fourth quarter direct operating expenses of
Fiscal 2021 fourth quarter selling, general and administrative expenses of
Fiscal 2021 fourth quarter operating income increased by
Liquidity
As of June 30, 2021, MSG Entertainment’s unrestricted cash balance was
On a combined basis, the Company’s total debt outstanding as of June 30, 2021 was
MSG Entertainment’s cash balance at quarter-end included
MSG Networks
The Company completed its acquisition of MSG Networks on July 9, 2021. The below is a summary of MSG Networks’ financial results for the fourth quarter and fiscal year ended June 30, 2021 on a standalone basis. MSG Networks’ financial information (along with a reconciliation of operating income to adjusted operating income) for the fourth quarter and fiscal year ended June 30, 2021 can be found starting on page 13 of this press release.
(In millions) |
Three Months Ended |
Twelve Months Ended |
|||||
|
June 30, |
June 30, |
|||||
|
2021 |
2021 |
|||||
Revenues |
$ |
166.1 |
|
$ |
647.5 |
|
|
Operating income |
58.4 |
|
262.0 |
|
|||
Adjusted operating income |
63.8 |
|
287.0 |
|
|||
For fiscal 2021, MSG Networks generated total revenues of
(6) |
MSG Entertainment completed its acquisition of MSG Networks on July 9, 2021. The combined cash and debt position of MSG Entertainment and MSG Networks as of June 30, 2021 is presented for illustrative purposes. |
For the fiscal 2021 fourth quarter, MSG Networks generated total revenues of
Advertising revenue increased
Direct operating expenses of
Selling, general and administrative expenses of
Operating income of
(7) |
The approximately |
About Madison Square Garden Entertainment Corp.
Madison Square Garden Entertainment Corp. (MSG Entertainment) is a leader in live entertainment. The Company presents or hosts a broad array of events in its diverse collection of venues: New York’s Madison Square Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre; and The Chicago Theatre. MSG Entertainment is also building a new state-of-the-art venue in Las Vegas, MSG Sphere at The Venetian. In addition, the Company features the original production – the Christmas Spectacular Starring the Radio City Rockettes – and through Boston Calling Events, produces the Boston Calling Music Festival. The Company’s two regional sports and entertainment networks, MSG Network and MSG+, deliver a wide range of live sports content and other programming. Also under the MSG Entertainment umbrella is Tao Group Hospitality, with entertainment dining and nightlife brands including: Tao, Marquee, Lavo, Beauty & Essex, Cathédrale, Hakkasan and Omnia. More information is available at www.msgentertainment.com.
Non-GAAP Financial Measures
We define adjusted operating income (loss), which is a non-GAAP financial measure, as operating income (loss) before (i) adjustments to remove the impact of non-cash straight-line leasing revenue associated with the Arena License Agreements with Madison Square Garden Sports Corp., (ii) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (iii) amortization for capitalized cloud computing arrangement costs, (iv) share-based compensation expense or benefit, (v) restructuring charges or credits, and (vi) gains or losses on sales or dispositions of businesses and associated settlements, which is referred to as adjusted operating income (loss), a non-GAAP measure. In addition to excluding the impact of the items discussed above, the impact of purchase accounting adjustments related to business acquisitions is also excluded in evaluating the Company’s consolidated adjusted operating income (loss). 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 settlement of an obligation that is not expected to be made in cash. We believe that given the length of the Arena License Agreements and resulting magnitude of the difference in leasing revenue recognized and cash revenue received, the exclusion of non-cash leasing revenue provides investors with a clearer picture of the Company's operating performance.
On July 9, 2021, we completed our acquisition of MSG Networks Inc. The financial results of MSG Networks will be incorporated in our financial results retrospectively for all periods presented. Certain financial metrics are included in this release, such as adjusted operating income, which is a non-GAAP financial measure. MSG Networks defines adjusted operating income as operating income before (i) depreciation, amortization and impairments of property and equipment and intangible assets, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits and (iv) gains or losses on sales or dispositions of businesses. Because it is based upon operating income, adjusted operating income 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 MSG Networks without regard to the settlement of an obligation that is not expected to be made in cash.
We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of our business segments, including MSG Networks, and the Company on a consolidated basis. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and adjusted operating income (loss) as the most important indicators of our business performance, and evaluate management’s effectiveness with specific reference to these indicators. Adjusted operating income (loss) 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 adjusted operating income (loss) 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 operating income (loss) to adjusted operating income (loss), please see page 7 of this release.
Forward-Looking Statements
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, developments and events 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 industries in which it operates, the impact of the COVID-19 pandemic 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 investor.msgentertainment.com
Conference call dial-in number is 888-421-7163 / Conference ID Number 2256668
Conference call replay number is 855-859-2056 / Conference ID Number 2256668 until August 30, 2021
MADISON SQUARE GARDEN ENTERTAINMENT CORP. |
||||||||||||||||
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS |
||||||||||||||||
(In thousands, except per share data) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenues |
|
$ |
99,784 |
|
|
$ |
8,999 |
|
|
$ |
180,401 |
|
|
$ |
762,936 |
|
Direct operating expenses |
|
66,671 |
|
|
41,729 |
|
|
171,924 |
|
|
508,122 |
|
||||
Selling, general and administrative expenses |
|
109,120 |
|
|
84,981 |
|
|
322,714 |
|
|
344,637 |
|
||||
Depreciation and amortization |
|
26,429 |
|
|
25,100 |
|
|
114,664 |
|
|
104,899 |
|
||||
Impairment for intangibles, long-lived assets, and goodwill |
|
— |
|
|
3,606 |
|
|
— |
|
|
105,817 |
|
||||
Gain on disposal of assets held for sale and associated settlements |
|
— |
|
|
(240,783 |
) |
|
— |
|
|
(240,783 |
) |
||||
Restructuring charges |
|
— |
|
|
— |
|
|
21,299 |
|
|
— |
|
||||
Operating income (loss) |
|
(102,436 |
) |
|
94,366 |
|
|
(450,200 |
) |
|
(59,756 |
) |
||||
Other income (expense): |
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) in equity method investments |
|
(1,280 |
) |
|
(694 |
) |
|
(6,858 |
) |
|
(4,433 |
) |
||||
Interest income |
|
318 |
|
|
751 |
|
|
1,273 |
|
|
17,993 |
|
||||
Interest expense |
|
(12,157 |
) |
|
(446 |
) |
|
(35,098 |
) |
|
(2,300 |
) |
||||
Miscellaneous expense, net |
|
(2,238 |
) |
|
39,850 |
|
|
51,062 |
|
|
38,855 |
|
||||
Income (loss) from operations before income taxes |
|
(117,793 |
) |
|
133,827 |
|
|
(439,821 |
) |
|
(9,641 |
) |
||||
Income tax benefit (expense) |
|
(2,002 |
) |
|
(13,732 |
) |
|
9,371 |
|
|
(5,046 |
) |
||||
Net income (loss) |
|
(119,795 |
) |
|
120,095 |
|
|
(430,450 |
) |
|
(14,687 |
) |
||||
Less: Net loss attributable to redeemable noncontrolling interests |
|
(2,178 |
) |
|
(5,238 |
) |
|
(16,269 |
) |
|
(30,387 |
) |
||||
Less: Net loss attributable to nonredeemable noncontrolling interests |
|
151 |
|
|
(1,293 |
) |
|
(2,099 |
) |
|
(1,534 |
) |
||||
Net income (loss) attributable to Madison Square Garden Entertainment Corp.’s stockholders |
|
$ |
(117,768 |
) |
|
$ |
126,626 |
|
|
$ |
(412,082 |
) |
|
$ |
17,234 |
|
Basic earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders |
|
$ |
(4.87 |
) |
|
$ |
5.27 |
|
|
$ |
(17.39 |
) |
|
$ |
0.72 |
|
Diluted earnings (loss) per common share attributable to Madison Square Garden Entertainment Corp.’s stockholders |
|
$ |
(4.87 |
) |
|
$ |
5.27 |
|
|
$ |
(17.39 |
) |
|
$ |
0.72 |
|
Basic weighted-average number of common shares outstanding |
|
24,171 |
|
|
24,019 |
|
|
24,205 |
|
|
23,998 |
|
||||
Diluted weighted-average number of common shares outstanding |
|
24,171 |
|
|
24,095 |
|
|
24,205 |
|
|
24,017 |
|
||||
MADISON SQUARE GARDEN ENTERTAINMENT CORP. ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS) (Unaudited) |
The following is a description of the adjustments to operating income (loss) in arriving at adjusted operating income (loss) as described in this earnings release:
- Non-cash portion of arena license fees from MSG Sports. This adjustment removes the impact of non-cash straight-line leasing revenue associated with the Arena License Agreements with MSG Sports.
- Share-based compensation. This adjustment eliminates the compensation expense relating to restricted stock units and stock options granted under the MSG Entertainment Employee Stock Plan, MSG Sports Employee Stock Plan and Non-Employee Director Plan in all periods.
- Depreciation and amortization. This adjustment eliminates depreciation and amortization of property and equipment and intangible assets in all periods.
- Restructuring charges. This adjustment eliminates costs related to termination benefits provided to employees as part of the Company's full-time workforce reductions.
- Gains or losses on disposal of assets. This adjustment eliminates the impact of gains or losses from the disposition of assets or businesses.
- Purchase accounting adjustments. This adjustment eliminates the impact of various purchase accounting adjustments related to business acquisitions, primarily favorable / unfavorable lease agreements of the acquiree.
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Operating income (loss) |
|
$ |
(102,436 |
) |
|
$ |
94,366 |
|
|
$ |
(450,200 |
) |
|
$ |
(59,756 |
) |
Non-cash portion of arena license fees from MSG Sports |
|
(4,286 |
) |
|
— |
|
|
(13,026 |
) |
|
— |
|
||||
Share-based compensation |
|
9,713 |
|
|
12,896 |
|
|
52,917 |
|
|
42,190 |
|
||||
Depreciation and amortization (1) |
|
26,429 |
|
|
25,100 |
|
|
114,664 |
|
|
104,899 |
|
||||
Impairment of intangibles, long-lived assets, and goodwill (2) |
|
— |
|
|
3,606 |
|
|
— |
|
|
105,817 |
|
||||
Restructuring charges |
|
— |
|
|
— |
|
|
21,299 |
|
|
— |
|
||||
Gain on disposal of assets held for sale, including associated settlements |
|
— |
|
|
(240,783 |
) |
|
— |
|
|
(240,783 |
) |
||||
Purchase accounting adjustments |
|
599 |
|
|
1,338 |
|
|
3,334 |
|
|
4,367 |
|
||||
Adjusted operating loss |
|
$ |
(69,981 |
) |
|
$ |
(103,477 |
) |
|
$ |
(271,012 |
) |
|
$ |
(43,266 |
) |
_________________ |
||
(1) |
Includes depreciation and amortization related to purchase accounting adjustments. |
|
(2) |
As a result of operating disruptions due to COVID-19, the Company was required to assess the carrying value of Tao Group Hospitality’s intangible assets, long-lived assets and goodwill. As a result, the Company recorded a non-cash impairment charge of |
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP. |
||||||||||||||||
SEGMENT RESULTS |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
BUSINESS SEGMENT RESULTS |
||||||||||||||||
|
|
Three Months Ended June 30, 2021 |
||||||||||||||
|
|
Entertainment |
|
Tao Group
|
|
Other(2) |
|
Total |
||||||||
Revenues |
|
$ |
31,100 |
|
|
$ |
69,664 |
|
|
$ |
(980 |
) |
|
$ |
99,784 |
|
Direct operating expenses |
|
31,421 |
|
|
35,303 |
|
|
(53 |
) |
|
66,671 |
|
||||
Selling, general and administrative expenses |
|
83,039 |
|
|
26,275 |
|
|
(194 |
) |
|
109,120 |
|
||||
Depreciation and amortization |
|
19,801 |
|
|
5,216 |
|
|
1,412 |
|
|
26,429 |
|
||||
Operating loss |
|
$ |
(103,161 |
) |
|
$ |
2,870 |
|
|
$ |
(2,145 |
) |
|
$ |
(102,436 |
) |
Reconciliation to adjusted operating loss: |
|
|
|
|
|
|
|
|
||||||||
Non-cash portion of arena license fees from MSG Sports |
|
(4,286 |
) |
|
— |
|
|
— |
|
|
(4,286 |
) |
||||
Share-based compensation |
|
8,027 |
|
|
1,686 |
|
|
— |
|
|
9,713 |
|
||||
Depreciation and amortization(1) |
|
19,801 |
|
|
5,216 |
|
|
2,011 |
|
|
27,028 |
|
||||
Adjusted operating loss |
|
$ |
(79,619 |
) |
|
$ |
9,772 |
|
|
$ |
(134 |
) |
|
$ |
(69,981 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended June 30, 2020 |
||||||||||||||
|
|
Entertainment |
|
Tao Group
|
|
Other(2) |
|
Total |
||||||||
Revenues |
|
$ |
8,550 |
|
|
$ |
1,337 |
|
|
$ |
(888 |
) |
|
$ |
8,999 |
|
Direct operating expenses |
|
34,382 |
|
|
6,642 |
|
|
705 |
|
|
41,729 |
|
||||
Selling, general and administrative expenses |
|
76,352 |
|
|
8,617 |
|
|
12 |
|
|
84,981 |
|
||||
Depreciation and amortization |
|
20,396 |
|
|
1,869 |
|
|
2,835 |
|
|
25,100 |
|
||||
Impairment for intangibles, long-lived assets, and goodwill |
|
— |
|
|
4,792 |
|
|
(1,186 |
) |
|
3,606 |
|
||||
Gain on disposal of assets held for sale |
|
(240,783 |
) |
|
— |
|
|
— |
|
|
(240,783 |
) |
||||
Operating income (loss) |
|
$ |
118,203 |
|
|
$ |
(20,583 |
) |
|
$ |
(3,254 |
) |
|
$ |
94,366 |
|
Reconciliation to adjusted operating income (loss): |
|
|
|
|
|
|
|
|
||||||||
Share-based compensation |
|
11,961 |
|
|
935 |
|
|
— |
|
|
12,896 |
|
||||
Depreciation and amortization(1) |
|
20,396 |
|
|
1,869 |
|
|
4,173 |
|
|
26,438 |
|
||||
Impairment for intangibles, long-lived assets, and goodwill |
|
— |
|
|
4,792 |
|
|
(1,186 |
) |
|
3,606 |
|
||||
Gain on disposal of assets held for sale |
|
(240,783 |
) |
|
— |
|
|
— |
|
|
(240,783 |
) |
||||
Adjusted operating income (loss) |
|
$ |
(90,223 |
) |
|
$ |
(12,987 |
) |
|
$ |
(267 |
) |
|
$ |
(103,477 |
) |
_________________ |
||
(1) |
Depreciation and amortization includes other purchase accounting adjustments of |
|
(2) |
Includes inter-segment eliminations and, for operating income (loss), purchase accounting adjustments. |
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP. |
||||||||||||||||
SEGMENT RESULTS (Continued) |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Year ended June 30, 2021 |
||||||||||||||
|
|
Entertainment |
|
Tao Group
|
|
Other(2) |
|
Total |
||||||||
Revenues |
|
$ |
82,281 |
|
|
$ |
100,166 |
|
|
$ |
(2,046 |
) |
|
$ |
180,401 |
|
Direct operating expenses |
|
103,089 |
|
|
66,591 |
|
|
2,244 |
|
|
171,924 |
|
||||
Selling, general and administrative expenses |
|
268,705 |
|
|
54,034 |
|
|
(25 |
) |
|
322,714 |
|
||||
Depreciation and amortization |
|
80,142 |
|
|
8,955 |
|
|
25,567 |
|
|
114,664 |
|
||||
Restructuring charges |
|
21,299 |
|
|
— |
|
|
— |
|
|
21,299 |
|
||||
Operating loss |
|
$ |
(390,954 |
) |
|
$ |
(29,414 |
) |
|
$ |
(29,832 |
) |
|
$ |
(450,200 |
) |
Reconciliation to adjusted operating loss: |
|
|
|
|
|
|
|
|
||||||||
Non-cash portion of arena license fees from MSG Sports |
|
(13,026 |
) |
|
— |
|
|
— |
|
|
(13,026 |
) |
||||
Share-based compensation |
|
47,633 |
|
|
5,284 |
|
|
— |
|
|
52,917 |
|
||||
Depreciation and amortization(1) |
|
80,142 |
|
|
8,955 |
|
|
28,901 |
|
|
117,998 |
|
||||
Restructuring charges |
|
21,299 |
|
|
— |
|
|
— |
|
|
21,299 |
|
||||
Adjusted operating loss |
|
$ |
(254,906 |
) |
|
$ |
(15,175 |
) |
|
$ |
(931 |
) |
|
$ |
(271,012 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
|
Year ended June 30, 2020 |
||||||||||||||
|
|
Entertainment |
|
Tao Group
|
|
Other(2) |
|
Total |
||||||||
Revenues |
|
$ |
585,208 |
|
|
$ |
180,201 |
|
|
$ |
(2,473 |
) |
|
$ |
762,936 |
|
Direct operating expenses |
|
388,643 |
|
|
116,638 |
|
|
2,841 |
|
|
508,122 |
|
||||
Selling, general and administrative expenses |
|
282,043 |
|
|
63,049 |
|
|
(455 |
) |
|
344,637 |
|
||||
Depreciation and amortization |
|
84,289 |
|
|
8,156 |
|
|
12,454 |
|
|
104,899 |
|
||||
Impairment for intangibles, long-lived assets, and goodwill |
|
— |
|
|
94,946 |
|
|
10,871 |
|
|
105,817 |
|
||||
Gain on disposal of assets held for sale |
|
(240,783 |
) |
|
— |
|
|
— |
|
|
(240,783 |
) |
||||
Operating income (loss) |
|
$ |
71,016 |
|
|
$ |
(102,588 |
) |
|
$ |
(28,184 |
) |
|
$ |
(59,756 |
) |
Reconciliation to adjusted operating income (loss): |
|
|
|
|
|
|
|
|
||||||||
Share-based compensation |
|
41,227 |
|
|
963 |
|
|
— |
|
|
42,190 |
|
||||
Depreciation and amortization(1) |
|
84,289 |
|
|
8,156 |
|
|
16,821 |
|
|
109,266 |
|
||||
Impairment for intangibles, long-lived assets, and goodwill |
|
— |
|
|
94,946 |
|
|
10,871 |
|
|
105,817 |
|
||||
Gain on disposal of assets held for sale |
|
(240,783 |
) |
|
— |
|
|
— |
|
|
(240,783 |
) |
||||
Adjusted operating income (loss) |
|
$ |
(44,251 |
) |
|
$ |
1,477 |
|
|
$ |
(492 |
) |
|
$ |
(43,266 |
) |
_________________ |
||
(1) |
Depreciation and amortization includes other purchase accounting adjustments of |
|
(2) |
Includes inter-segment eliminations and, for operating income (loss), purchase accounting adjustments. |
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP. |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands, except per share data) |
||||||||
(Unaudited) |
||||||||
|
|
June 30, |
||||||
|
|
2021 |
|
2020 |
||||
ASSETS |
|
|
|
|
||||
Current Assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
1,168,760 |
|
|
$ |
906,555 |
|
Restricted cash |
|
22,984 |
|
|
17,749 |
|
||
Short-term investments |
|
— |
|
|
337,192 |
|
||
Accounts receivable, net |
|
85,955 |
|
|
57,184 |
|
||
Net related party receivables |
|
36,378 |
|
|
23,062 |
|
||
Prepaid expenses |
|
60,493 |
|
|
62,127 |
|
||
Other current assets |
|
37,779 |
|
|
22,633 |
|
||
Total current assets |
|
1,412,349 |
|
|
1,426,502 |
|
||
Investments in nonconsolidated affiliates |
|
45,969 |
|
|
52,622 |
|
||
Property and equipment, net |
|
2,099,347 |
|
|
1,646,115 |
|
||
Right-of-use lease assets |
|
268,568 |
|
|
220,328 |
|
||
Amortizable intangible assets, net |
|
171,451 |
|
|
150,426 |
|
||
Indefinite-lived intangible assets |
|
63,801 |
|
|
63,801 |
|
||
Goodwill |
|
77,687 |
|
|
74,309 |
|
||
Other assets |
|
128,169 |
|
|
85,103 |
|
||
Total assets |
|
$ |
4,267,341 |
|
|
$ |
3,719,206 |
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP. |
||||||||
CONSOLIDATED BALANCE SHEETS (Continued) |
||||||||
(In thousands, except per share data) |
||||||||
(Unaudited) |
||||||||
|
|
June 30, |
||||||
|
|
2021 |
|
2020 |
||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY |
|
|
|
|
||||
Current Liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
23,933 |
|
|
$ |
17,258 |
|
Net related party payables, current |
|
57,616 |
|
|
18,418 |
|
||
Current portion of long-term debt, net of deferred financing costs |
|
5,728 |
|
|
5,429 |
|
||
Accrued liabilities: |
|
|
|
|
||||
Employee related costs |
|
68,242 |
|
|
68,837 |
|
||
Other accrued liabilities |
|
181,636 |
|
|
125,452 |
|
||
Operating lease liabilities, current |
|
68,544 |
|
|
53,388 |
|
||
Collections due to promoters |
|
37,877 |
|
|
31,879 |
|
||
Deferred revenue |
|
209,501 |
|
|
189,308 |
|
||
Total current liabilities |
|
653,077 |
|
|
509,969 |
|
||
Long-term debt, net of deferred financing costs |
|
655,093 |
|
|
28,126 |
|
||
Operating lease liabilities, noncurrent |
|
224,729 |
|
|
174,219 |
|
||
Defined benefit and other postretirement obligations |
|
28,847 |
|
|
26,132 |
|
||
Other employee related costs |
|
15,629 |
|
|
15,591 |
|
||
Collections due to promoters, noncurrent |
|
6,625 |
|
|
— |
|
||
Deferred tax liabilities, net |
|
11,972 |
|
|
12,450 |
|
||
Other liabilities |
|
73,790 |
|
|
78,279 |
|
||
Total liabilities |
|
1,669,762 |
|
|
844,766 |
|
||
Commitments and contingencies |
|
|
|
|
||||
Redeemable noncontrolling interests |
|
137,834 |
|
|
20,600 |
|
||
Madison Square Garden Entertainment Corp. Stockholders’ Equity: |
|
|
|
|
||||
Class A common stock, par value |
|
196 |
|
|
195 |
|
||
Class B common stock, par value |
|
45 |
|
|
45 |
|
||
Preferred stock, par value |
|
— |
|
|
— |
|
||
Additional paid-in capital |
|
2,744,866 |
|
|
2,751,318 |
|
||
Retained earnings (accumulated deficit) |
|
(270,146 |
) |
|
141,936 |
|
||
Accumulated other comprehensive loss |
|
(27,120 |
) |
|
(51,857 |
) |
||
Total Madison Square Garden Entertainment Corp. stockholders’ equity |
|
2,447,841 |
|
|
2,841,637 |
|
||
Nonredeemable noncontrolling interests |
|
11,904 |
|
|
12,203 |
|
||
Total equity |
|
2,459,745 |
|
|
2,853,840 |
|
||
Total liabilities, redeemable noncontrolling interests and equity |
|
$ |
4,267,341 |
|
|
$ |
3,719,206 |
|
MADISON SQUARE GARDEN ENTERTAINMENT CORP. |
||||||||
SELECTED CASH FLOW INFORMATION |
||||||||
(Dollars in thousands) |
||||||||
(Unaudited) |
||||||||
|
|
Twelve Months Ended |
||||||
|
|
June 30, |
||||||
|
|
2021 |
|
2020 |
||||
Net cash provided by operating activities |
|
$ |
(289,480 |
) |
|
$ |
96,031 |
|
Net cash used in investing activities |
|
(84,440 |
) |
|
(389,657 |
) |
||
Net cash provided by (used in) financing activities |
|
633,333 |
|
|
122,938 |
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash |
|
8,027 |
|
|
2,927 |
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
267,440 |
|
|
(167,761 |
) |
||
Cash, cash equivalents and restricted cash at beginning of period |
|
924,304 |
|
|
1,092,065 |
|
||
Cash, cash equivalents and restricted cash at end of period |
|
$ |
1,191,744 |
|
|
$ |
924,304 |
|
APPENDIX |
||||||||||||||||
MSG NETWORKS INC. |
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(In thousands, except per share data) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenues |
|
$ |
166,055 |
|
|
$ |
152,114 |
|
|
$ |
647,510 |
|
|
$ |
685,797 |
|
Direct operating expenses |
|
66,362 |
|
|
46,350 |
|
|
262,859 |
|
|
282,837 |
|
||||
Selling, general and administrative expenses |
|
39,377 |
|
|
20,656 |
|
|
115,339 |
|
|
100,829 |
|
||||
Depreciation and amortization |
|
1,872 |
|
|
2,040 |
|
|
7,335 |
|
|
7,163 |
|
||||
Operating income |
|
58,444 |
|
|
83,068 |
|
|
261,977 |
|
|
$ |
294,968 |
|
|||
Other income (expense): |
|
|
|
|
|
|
|
|
||||||||
Interest income |
|
503 |
|
|
500 |
|
|
1,949 |
|
|
4,234 |
|
||||
Interest expense |
|
(4,895 |
) |
|
(6,156 |
) |
|
(20,215 |
) |
|
(36,324 |
) |
||||
Debt refinancing expense |
|
— |
|
|
— |
|
|
— |
|
|
(2,764 |
) |
||||
Other components of net periodic benefit cost |
|
(206 |
) |
|
(256 |
) |
|
(826 |
) |
|
(1,030 |
) |
||||
Miscellaneous income |
|
— |
|
|
— |
|
|
1,252 |
|
|
— |
|
||||
|
|
(4,598 |
) |
|
(5,912 |
) |
|
(17,840 |
) |
|
(35,884 |
) |
||||
Income from operations before income taxes |
|
53,846 |
|
|
77,156 |
|
|
244,137 |
|
|
259,084 |
|
||||
Income tax expense |
|
(19,692 |
) |
|
(21,236 |
) |
|
(87,866 |
) |
|
(73,863 |
) |
||||
Net income |
|
$ |
34,154 |
|
|
$ |
55,920 |
|
|
$ |
156,271 |
|
|
$ |
185,221 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
0.59 |
|
|
$ |
0.98 |
|
|
$ |
2.72 |
|
|
$ |
2.93 |
|
Diluted |
|
$ |
0.59 |
|
|
$ |
0.97 |
|
|
$ |
2.70 |
|
|
$ |
2.92 |
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
57,505 |
|
|
57,062 |
|
|
57,394 |
|
|
63,172 |
|
||||
Diluted |
|
58,283 |
|
|
57,357 |
|
|
57,901 |
|
|
63,515 |
|
||||
APPENDIX MSG NETWORKS INC. ADJUSTMENTS TO RECONCILE OPERATING INCOME TO ADJUSTED OPERATING INCOME (In thousands) |
The following is a description of the adjustments to operating income in arriving at adjusted operating income as described in this earnings release with respect to MSG Networks Inc.'s financial results:
- Share-based compensation expense. This adjustment eliminates the compensation expense relating to restricted stock units and stock options granted under MSG Networks Inc.'s employee stock plan and non-employee director stock plan in all periods.
- Depreciation and amortization. This adjustment eliminates depreciation, amortization and impairments of property and equipment and intangible assets in all periods.
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Operating income |
|
$ |
58,444 |
|
|
$ |
83,068 |
|
|
$ |
261,977 |
|
|
$ |
294,968 |
|
Share-based compensation expense |
|
3,450 |
|
|
5,383 |
|
|
17,667 |
|
|
19,235 |
|
||||
Depreciation and amortization |
|
1,872 |
|
|
2,040 |
|
|
7,335 |
|
|
7,163 |
|
||||
Adjusted operating income |
|
$ |
63,766 |
|
|
$ |
90,491 |
|
|
$ |
286,979 |
|
|
$ |
321,366 |
|
APPENDIX |
||||||||
MSG NETWORKS INC. |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands, except per share data) |
||||||||
|
|
June 30, |
||||||
|
|
2021 |
|
2020 |
||||
ASSETS |
|
|
|
|
||||
Current Assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
348,232 |
|
|
$ |
196,837 |
|
Accounts receivable, net |
|
98,658 |
|
|
105,549 |
|
||
Related party receivables, net |
|
35,297 |
|
|
14,190 |
|
||
Prepaid income taxes |
|
2,813 |
|
|
461 |
|
||
Prepaid expenses |
|
6,952 |
|
|
11,063 |
|
||
Other current assets |
|
8,194 |
|
|
4,541 |
|
||
Total current assets |
|
500,146 |
|
|
332,641 |
|
||
Property and equipment, net |
|
7,717 |
|
|
8,758 |
|
||
Amortizable intangible assets, net |
|
26,823 |
|
|
30,283 |
|
||
Goodwill |
|
424,508 |
|
|
424,508 |
|
||
Operating lease right-of-use assets |
|
12,011 |
|
|
17,153 |
|
||
Other assets |
|
41,864 |
|
|
37,460 |
|
||
Total assets |
|
$ |
1,013,069 |
|
|
$ |
850,803 |
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' DEFICIENCY |
|
|
|
|
||||
Current Liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
2,711 |
|
|
$ |
2,115 |
|
Related party payables |
|
5,294 |
|
|
1,472 |
|
||
Current portion of long-term debt |
|
48,245 |
|
|
37,229 |
|
||
Current portion of operating lease liabilities |
|
4,879 |
|
|
5,492 |
|
||
Income taxes payable |
|
2,527 |
|
|
641 |
|
||
Accrued liabilities: |
|
|
|
|
||||
Employee related costs |
|
23,611 |
|
|
14,187 |
|
||
Other accrued liabilities |
|
29,135 |
|
|
10,116 |
|
||
Deferred revenue |
|
150 |
|
|
2,753 |
|
||
Total current liabilities |
|
116,552 |
|
|
74,005 |
|
||
Long-term debt, net of current portion |
|
995,535 |
|
|
1,043,780 |
|
||
Long-term operating lease liabilities |
|
8,827 |
|
|
13,780 |
|
||
Defined benefit and other postretirement obligations |
|
25,332 |
|
|
25,860 |
|
||
Other employee related costs |
|
5,564 |
|
|
5,149 |
|
||
Other liabilities |
|
1,473 |
|
|
1,536 |
|
||
Deferred tax liability |
|
241,253 |
|
|
239,542 |
|
||
Total liabilities |
|
1,394,536 |
|
|
1,403,652 |
|
||
Commitments and contingencies |
|
|
|
|
||||
Stockholders' Deficiency: |
|
|
|
|
||||
Class A Common Stock, par value |
|
643 |
|
|
643 |
|
||
Class B Common Stock, par value |
|
136 |
|
|
136 |
|
||
Preferred stock, par value |
|
— |
|
|
— |
|
||
Additional paid-in capital |
|
20,940 |
|
|
12,731 |
|
||
Treasury stock, at cost, 20,799 and 21,137 shares as of June 30, 2021 and 2020, respectively |
|
(450,053 |
) |
|
(457,363 |
) |
||
Retained earnings (accumulated deficit) |
|
54,999 |
|
|
(100,792 |
) |
||
Accumulated other comprehensive loss |
|
(8,132 |
) |
|
(8,204 |
) |
||
Total stockholders' deficiency |
|
(381,467 |
) |
|
(552,849 |
) |
||
Total liabilities and stockholders' deficiency |
|
$ |
1,013,069 |
|
|
$ |
850,803 |
|
APPENDIX |
||||||||
MSG NETWORKS INC. |
||||||||
SUPPLEMENTAL FINANCIAL INFORMATION |
||||||||
(Dollars in thousands) |
||||||||
(Unaudited) |
||||||||
Summary Data from the Statements of Cash Flows |
||||||||
|
|
Twelve Months Ended |
||||||
|
|
June 30, |
||||||
|
|
2021 |
|
2020 |
||||
Net cash provided by operating activities |
|
$ |
195,896 |
|
|
$ |
210,032 |
|
Net cash used in investing activities |
|
(3,853 |
) |
|
(2,814 |
) |
||
Net cash used in financing activities |
|
(40,648 |
) |
|
(236,804 |
) |
||
Net increase (decrease) in cash and cash equivalents |
|
151,395 |
|
|
(29,586 |
) |
||
Cash and cash equivalents at beginning of period |
|
196,837 |
|
|
226,423 |
|
||
Cash and cash equivalents at end of period |
|
$ |
348,232 |
|
|
$ |
196,837 |
|
Capitalization |
|
June 30, |
||
|
|
2021 |
||
Cash and cash equivalents |
|
$ |
348,232 |
|
Credit facility debt(a) |
|
1,047,750 |
|
|
Net debt |
|
$ |
699,518 |
|
|
|
|
||
Reconciliation of operating income to AOI for the trailing twelve-month period(b) |
|
|
||
Operating income |
|
$ |
261,977 |
|
Share-based compensation expense |
|
17,667 |
|
|
Depreciation and amortization |
|
7,335 |
|
|
Adjusted operating income |
|
$ |
286,979 |
|
|
|
|
||
Leverage ratio(c) |
|
2.4x |
||
(a) Represents aggregate principal amount of the debt outstanding. |
(b) Represents reported adjusted operating income for the trailing twelve-month period. |
(c) Represents net debt divided by adjusted operating income for the trailing twelve-month period, which differs from the covenant calculation contained in MSG Networks Inc.'s credit facility. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210823005185/en/
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