MADISON SQUARE GARDEN SPORTS CORP. REPORTS FISCAL 2023 FOURTH QUARTER AND FULL-YEAR RESULTS
- None.
- None.
Record Revenues of
Fiscal 2023 Operating Income of
Returned Approximately
The fiscal 2023 fourth quarter was highlighted by both the New York Knicks (the "Knicks") and New York Rangers (the "Rangers") participating in the playoffs following the conclusion of the 2022-23 regular seasons. This included a combined eight home playoff games at the Madison Square Garden Arena ("The Garden"), with the Knicks advancing to the Eastern Conference Semifinals. Throughout the fiscal fourth quarter and year, the Company continued to benefit from robust consumer and corporate demand for both its teams, with every key revenue category – tickets, media rights, suites and sponsorships, as well as food, beverage and merchandise – exceeding fiscal 2022's record full-year results.
For fiscal 2023, the Company reported revenues of
For the fiscal 2023 fourth quarter, the Company reported revenues of
Madison Square Garden Sports Corp. Executive Chairman James L. Dolan said, "Our strong financial results in fiscal 2023 reflect the robust ongoing demand from our fans and corporate partners for the Knicks and Rangers. We believe we are well positioned to build on this momentum in the coming year and remain confident in our ability to generate long-term shareholder value."
Results from Operations
Results for the quarter and year ended June 30, 2023 and 2022 are as follows:
Three Months Ended | Twelve Months Ended | |||||||||||||||
June 30, | Change | June 30, | Change | |||||||||||||
$ millions | 2023 | 2022 | $ | % | 2023 | 2022 | $ | % | ||||||||
Revenues | $ 126.9 | $ 175.2 | $ (48.3) | (28) % | $ 887.4 | $ 821.4 | $ 66.1 | 8 % | ||||||||
Operating income (loss) | $ (12.2) | $ 23.7 | $ (35.9) | NM | $ 85.2 | $ 86.1 | $ (0.9) | (1) % | ||||||||
Adjusted operating | $ (7.8) | $ 29.5 | $ (37.3) | NM | $ 115.0 | $ 114.9 | $ 0.1 | — % |
Note: Does not foot due to rounding | |
1. | See page 3 of this earnings release for the definition of adjusted operating income (loss) included in the discussion of financial measures not calculated in accordance with generally accepted accounting principles ("GAAP"). The Company has amended this definition so that the non-cash portion of operating lease costs (which was |
2. | The return of capital consisted of a special cash dividend of |
Summary of Reported Results from Operations
For the fiscal 2023 fourth quarter, the Company generated revenues of
Pre/regular season ticket-related revenues decreased
Playoff-related revenues decreased
Suite revenues decreased
Sponsorship and signage revenues decreased
League distributions decreased
Local media rights fees decreased
Direct operating expenses of
Selling, general and administrative expenses of
Operating income decreased
About Madison Square Garden Sports Corp.
Madison Square Garden Sports Corp. (MSG Sports) is a leading professional sports company, with a collection of assets that includes the New York Knicks (NBA) and the New York Rangers (NHL), as well as two development league teams – the Westchester Knicks (NBAGL) and the Hartford Wolf Pack (AHL). MSG Sports also operates a professional sports team performance center – the MSG Training Center in Greenburgh, NY. More information is available at www.msgsports.com.
Non-GAAP Financial Measures
The Company has amended its definition of adjusted operating income (loss) so that the non-cash portion of operating lease costs related to the Company's arena license agreements with MSG Entertainment is no longer excluded in all periods presented.
We define adjusted operating income (loss), which is a non-GAAP financial measure, as operating income (loss) excluding (i) depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits, (iv) gains or losses on sales or dispositions of businesses, (v) the impact of purchase accounting adjustments related to business acquisitions, and (vi) gains and losses related to the remeasurement of liabilities under the Company's Executive Deferred Compensation Plan. Because it is based upon operating income (loss), adjusted operating income (loss) 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 our business without regard to the settlement of an obligation that is not expected to be made in cash. In addition, we believe that the exclusion of gains and losses related to the remeasurement of liabilities under the Company's Executive Deferred Compensation Plan provides investors with a clearer picture of the Company's operating performance given that, in accordance with
We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of our Company. 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 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 5 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 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.
Contacts: | |
Ari Danes, CFA Investor Relations and Financial Communications (212) 465-6072 | Justin Blaber Financial Communications (212) 465-6109 |
Grace Kaminer Investor Relations (212) 631-5076 |
Conference Call Information:
The conference call will be Webcast live today at 10:00 a.m. ET at investor.msgsports.com
Conference call dial-in number is 888-660-6386 / Conference ID Number 6996895
Conference call replay number is 800-770-2030 / Conference ID Number 6996895 until August 24, 2023
MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) | ||||||||
Three Months Ended | Twelve Months Ended | |||||||
June 30, | June 30, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Revenues | $ 126,920 | $ 175,205 | $ 887,447 | $ 821,354 | ||||
Direct operating expenses | 80,377 | 92,866 | 548,811 | 500,564 | ||||
Selling, general and administrative expenses | 57,866 | 57,438 | 249,885 | 229,668 | ||||
Depreciation and amortization | 874 | 1,195 | 3,577 | 5,042 | ||||
Operating income (loss) | (12,197) | 23,706 | 85,174 | 86,080 | ||||
Other income (expense): | ||||||||
Interest income | 765 | 168 | 2,392 | 313 | ||||
Interest expense | (6,489) | (2,577) | (22,884) | (11,735) | ||||
Miscellaneous income (expense), net | 5,696 | (536) | 25,239 | (726) | ||||
Income (loss) before income taxes | (12,225) | 20,761 | 89,921 | 73,932 | ||||
Income tax (expense) benefit | 2,731 | 5,887 | (44,293) | (25,052) | ||||
Net income (loss) | (9,494) | 26,648 | 45,628 | 48,880 | ||||
Less: Net loss attributable to nonredeemable noncontrolling | (237) | (540) | (2,165) | (2,251) | ||||
Net income (loss) attributable to Madison Square Garden Sports | $ (9,257) | $ 27,188 | $ 47,793 | $ 51,131 | ||||
Basic earnings (loss) per common share attributable to Madison | $ (0.39) | $ 1.12 | $ 1.90 | $ 2.11 | ||||
Diluted earnings (loss) per common share attributable to Madison | $ (0.39) | $ 1.11 | $ 1.89 | $ 2.10 | ||||
Basic weighted-average number of common shares outstanding | 23,961 | 24,277 | 24,090 | 24,246 | ||||
Diluted weighted-average number of common shares outstanding | 23,961 | 24,487 | 24,194 | 24,405 |
MADISON SQUARE GARDEN SPORTS CORP.
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO
ADJUSTED OPERATING INCOME (LOSS)
(In thousands)
The following is a description of the adjustments to operating income (loss) to arrive at adjusted operating income (loss) as described in this earnings release:
- Depreciation and amortization. This adjustment eliminates depreciation, amortization and impairments of property and equipment, goodwill and other intangible assets in all periods.
- Share-based compensation. This adjustment eliminates the compensation expense related to restricted stock units and stock options granted under the Company's employee stock plan and non-employee director plan in all periods.
- Remeasurement of deferred compensation plan liabilities. This adjustment eliminates the impact of gains and losses related to the remeasurement of liabilities under the Company's executive deferred compensation plan.
Three Months Ended | Twelve Months Ended | |||||||
June 30, | June 30, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Operating income (loss) | $ (12,197) | $ 23,706 | $ 85,174 | $ 86,080 | ||||
Depreciation and amortization | 874 | 1,195 | 3,577 | 5,042 | ||||
Share-based compensation | 3,144 | 5,067 | 25,203 | 24,245 | ||||
Remeasurement of deferred compensation plan liabilities | 377 | (461) | 1,091 | (461) | ||||
Adjusted operating income (loss)(1) | $ (7,802) | $ 29,507 | $ 115,045 | $ 114,906 |
____________________ | |
(1) | The Company has amended its definition of adjusted operating income so that the impact of the non-cash portion of operating lease costs related to the Company's arena license agreements with MSG Entertainment is no longer excluded. Pursuant to GAAP, recognition of operating lease costs is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement. As a result, operating lease costs is comprised of a contractual cash component plus or minus a non-cash component for each period presented. Operating expense includes operating lease costs of (i) |
MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) | ||||
June 30, | ||||
2023 | 2022 | |||
ASSETS | ||||
Current Assets: | ||||
Cash and cash equivalents | $ 40,398 | $ 91,018 | ||
Restricted cash | 61 | — | ||
Accounts receivable, net | 40,139 | 47,240 | ||
Net related party receivables | 15,969 | 28,333 | ||
Prepaid expenses | 24,768 | 18,810 | ||
Other current assets | 27,898 | 19,868 | ||
Total current assets | 149,233 | 205,269 | ||
Property and equipment, net | 30,501 | 32,892 | ||
Right-of-use lease assets | 715,283 | 686,782 | ||
Amortizable intangible assets, net | — | 636 | ||
Indefinite-lived intangible assets | 103,644 | 112,144 | ||
Goodwill | 226,523 | 226,955 | ||
Investments | 67,374 | 4,736 | ||
Other assets | 22,459 | 32,552 | ||
Total assets | $ 1,315,017 | $ 1,301,966 |
MADISON SQUARE GARDEN SPORTS CORP. CONSOLIDATED BALANCE SHEETS (continued) (In thousands, except per share data) | ||||
June 30, | ||||
2023 | 2022 | |||
LIABILITIES AND EQUITY | ||||
Current Liabilities: | ||||
Accounts payable | $ 9,093 | $ 11,263 | ||
Net related party payables | 5,842 | 19,624 | ||
Debt | 30,000 | 30,000 | ||
Accrued liabilities: | ||||
Employee related costs | 144,310 | 119,279 | ||
League-related accruals | 106,926 | 75,269 | ||
Other accrued liabilities | 17,561 | 6,796 | ||
Operating lease liabilities, current | 49,745 | 43,699 | ||
Deferred revenue | 157,051 | 132,369 | ||
Total current liabilities | 520,528 | 438,299 | ||
Long-term debt | 295,000 | 220,000 | ||
Operating lease liabilities, noncurrent | 746,437 | 699,587 | ||
Defined benefit obligations | 4,526 | 5,005 | ||
Other employee related costs | 49,070 | 43,411 | ||
Deferred tax liabilities, net | 24,024 | 8,917 | ||
Deferred revenue, noncurrent | 12,666 | 31,122 | ||
Other liabilities | — | 1,002 | ||
Total liabilities | 1,652,251 | 1,447,343 | ||
Commitments and contingencies | ||||
Madison Square Garden Sports Corp. Stockholders' Equity: | ||||
Class A Common stock, par value | 204 | 204 | ||
Class B Common stock, par value | 45 | 45 | ||
Preferred stock, par value | — | — | ||
Additional paid-in capital | 16,846 | 17,573 | ||
Treasury stock, at cost, 1,084 and 751 shares as of June 30, 2023 and 2022, | (179,410) | (128,026) | ||
Accumulated deficit | (173,910) | (35,699) | ||
Accumulated other comprehensive loss | (1,009) | (1,186) | ||
Total Madison Square Garden Sports Corp. stockholders' equity | (337,234) | (147,089) | ||
Nonredeemable noncontrolling interests | — | 1,712 | ||
Total equity | (337,234) | (145,377) | ||
Total liabilities and equity | $ 1,315,017 | $ 1,301,966 |
MADISON SQUARE GARDEN SPORTS CORP. SELECTED CASH FLOW INFORMATION (In thousands) (Unaudited) | ||||
Twelve Months Ended | ||||
June 30, | ||||
2023 | 2022 | |||
Net cash provided by operating activities | $ 152,473 | $ 178,056 | ||
Net cash used in investing activities | (17,759) | (2,932) | ||
Net cash used in financing activities | (185,273) | (156,142) | ||
Net (decrease) increase in cash, cash equivalents and restricted cash | (50,559) | 18,982 | ||
Cash, cash equivalents and restricted cash from beginning of period | 91,018 | 72,036 | ||
Cash, cash equivalents and restricted cash at end of period | $ 40,459 | $ 91,018 |
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SOURCE Madison Square Garden Sports Corp.
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