MADISON SQUARE GARDEN ENTERTAINMENT CORP. REPORTS FISCAL 2024 SECOND QUARTER RESULTS
FY24 Revenue Range Increased to
FY24 Operating Income Range Increased to
Record-Setting Revenues for Christmas Spectacular Production, With Over One Million Tickets Sold
Bookings Business Remains On Track to Deliver Low Double-Digit Percentage Increase in Events in FY2024
The fiscal 2024 second quarter was highlighted by the Christmas Spectacular production's record-setting holiday season run and robust growth across the Company's bookings business. After extending its run by 8 performances due to strong demand, the Christmas Spectacular concluded its 90th holiday season in early January with over one million tickets sold across 193 shows, marking a return to pre-pandemic attendance levels. In addition, the Company hosted a busy schedule of events across its portfolio of venues and remains well-positioned to achieve a low double-digit percentage increase in the number of bookings events in fiscal 2024.
Financial results for the three and six months ended
For the fiscal 2024 second quarter, the Company reported revenues of
Executive Chairman and CEO
Results for the Three and Six Months Ended |
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Three Months Ended |
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Six Months Ended |
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Change |
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Change |
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$ millions |
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2023 |
|
2022 |
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$ |
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% |
|
2023 |
|
2022 |
|
$ |
|
% |
Revenues |
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$ 402.7 |
|
$ 355.9 |
|
$ 46.8 |
|
13 % |
|
$ 544.9 |
|
$ 502.3 |
|
$ 42.5 |
|
8 % |
Operating income |
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$ 137.4 |
|
$ 113.4 |
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$ 24.0 |
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21 % |
|
$ 104.0 |
|
$ 102.1 |
|
$ 1.9 |
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2 % |
Adjusted Operating Income(1) |
|
$ 151.0 |
|
$ 126.3 |
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$ 24.7 |
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20 % |
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$ 150.2 |
|
$ 137.8 |
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$ 12.4 |
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9 % |
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Note: Amounts may not foot due to rounding. NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful. |
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(1) |
See page 3 of this earnings release for the definition of adjusted operating income (loss) ("AOI") included in the discussion of non-GAAP financial measures. |
Summary of Reported Results of Operations for the Fiscal 2024 Second Quarter
For the fiscal 2024 second quarter, the Company reported revenues of
The increase in revenues was partially offset by a decrease in advertising sales commissions of
Fiscal 2024 second quarter direct operating expenses of
Fiscal 2024 second quarter selling, general and administrative expenses of
Fiscal 2024 second quarter operating income of
Financial Guidance
As a result of the positive momentum across its operations, the Company is increasing its fiscal 2024 guidance for revenues, operating income and adjusted operating income. The Company currently expects the following:
- Revenues of
$930 million to$950 million . - Operating income of
$95 million to$105 million . - Adjusted operating income of
$170 million to$180 million (2).
An updated version of the
(2) See appendix for a reconciliation of operating income to adjusted operating income for fiscal 2024 financial guidance.
About
Non-GAAP Financial Measures
We define adjusted operating income (loss), which is a non-GAAP financial measure, as operating income (loss) excluding (i) the impact of non-cash straight-line leasing revenue associated with the arena license agreements with
We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of the Company on a consolidated and combined 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 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 or events may differ materially from those in the forward-looking statements as a result of various factors, including financial community perceptions of the Company and its business, operations, financial condition and the industries in which it operates and the factors described in the Company's filings with the
Contacts:
Senior Vice President, Investor Relations,
(212) 465-6072
Vice President,
(212) 465-6109
Vice President, Investor Relations &
(212) 631-5076
Conference Call Information:
The conference call will be Webcast live today at
Conference call dial-in number is 888-660-6386 / Conference ID Number 8020251
Conference call replay number is 800-770-2030 / Conference ID Number 8020251 until
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (in thousands, except per share data) (Unaudited) |
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Three Months |
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Six Months |
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|
2023 |
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2022 |
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2023 |
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2022 |
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Revenues |
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$ 402,666 |
|
$ 355,880 |
|
$ 544,878 |
|
$ 502,332 |
Direct operating expenses |
|
(202,761) |
|
(180,603) |
|
(304,438) |
|
(282,265) |
Selling, general, and administrative expenses |
|
(48,389) |
|
(43,301) |
|
(97,211) |
|
(83,415) |
Depreciation and amortization |
|
(13,205) |
|
(15,586) |
|
(26,789) |
|
(31,571) |
Gains, net on dispositions |
|
— |
|
4,412 |
|
— |
|
4,412 |
Restructuring charges |
|
(888) |
|
(7,359) |
|
(12,441) |
|
(7,359) |
Operating income |
|
137,423 |
|
113,443 |
|
103,999 |
|
102,134 |
Interest income |
|
1,083 |
|
1,812 |
|
1,935 |
|
3,322 |
Interest expense |
|
(15,049) |
|
(13,205) |
|
(29,336) |
|
(24,632) |
Other income (expense), net |
|
2,846 |
|
(2,172) |
|
(1,625) |
|
(1,286) |
Income from operations before income taxes |
|
126,303 |
|
99,878 |
|
74,973 |
|
79,538 |
Income tax expense |
|
(1,054) |
|
(2,797) |
|
(395) |
|
(731) |
Net income |
|
125,249 |
|
97,081 |
|
74,578 |
|
78,807 |
Less: Net loss attributable to nonredeemable noncontrolling interest |
|
— |
|
(181) |
|
— |
|
(553) |
Net income attributable to |
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$ 125,249 |
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$ 97,262 |
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$ 74,578 |
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$ 79,360 |
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Income per share attributable to |
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Basic |
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$ 2.61 |
|
$ 1.88 |
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$ 1.52 |
|
$ 1.53 |
Diluted |
|
$ 2.59 |
|
$ 1.88 |
|
$ 1.52 |
|
$ 1.53 |
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Weighted-average number of shares of common stock: |
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|
|
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|
|
|
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Basic |
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48,029 |
|
51,768 |
|
48,955 |
|
51,768 |
Diluted |
|
48,293 |
|
51,768 |
|
49,168 |
|
51,768 |
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO
ADJUSTED OPERATING INCOME (LOSS)
(in thousands)
(Unaudited)
The following is a description of the adjustments to operating income in arriving at adjusted operating income 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 withMSG Sports . - Depreciation and amortization. This adjustment eliminates depreciation and amortization of property and equipment and intangible assets in all periods.
-
Share-based compensation. This adjustment eliminates the compensation expense relating to restricted stock units and stock options granted under the Company's Employee Stock Plan, Sphere Entertainment's Employee Stock Plan, the Company's
Non-Employee Director Plan and Sphere Entertainment's Non-Employee Director Plan in all periods. - Restructuring charges. This adjustment eliminates costs related to termination benefits provided to certain corporate executives and employees.
- Merger, spin-off , and acquisition-related costs. This adjustment eliminates costs related to mergers, spin-offs and acquisitions, including merger-related litigation expenses, in all periods.
- Amortization for capitalized cloud computing arrangement costs. This adjustment eliminates amortization of capitalized cloud computing arrangement costs.
- Remeasurement of deferred compensation plan liabilities. This adjustment eliminates the impact of gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan.
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Three Months Ended |
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Six Months Ended |
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$ thousands |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Operating income |
|
$ 137,423 |
|
$ 113,443 |
|
$ 103,999 |
|
$ 102,134 |
Non-cash portion of arena license fees from |
|
(9,120) |
|
(12,410) |
|
(9,615) |
|
(12,929) |
Depreciation and amortization |
|
13,205 |
|
15,586 |
|
26,790 |
|
31,571 |
Share-based compensation (excluding share-based compensation in restructuring charges) |
|
7,773 |
|
6,555 |
|
13,950 |
|
13,965 |
Gains, net on dispositions |
|
— |
|
(4,412) |
|
— |
|
(4,412) |
Restructuring charges |
|
888 |
|
7,359 |
|
12,441 |
|
7,359 |
Merger, spin-off, and acquisition-related costs(2) |
|
— |
|
— |
|
2,035 |
|
— |
Amortization for capitalized cloud computing arrangement costs |
|
448 |
|
29 |
|
448 |
|
104 |
Remeasurement of deferred compensation plan liabilities |
|
343 |
|
160 |
|
198 |
|
6 |
Adjusted operating income |
|
$ 150,960 |
|
$ 126,310 |
|
$ 150,246 |
|
$ 137,798 |
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(1) |
This adjustment represents the non-cash portion of operating lease revenue related to the Company's Arena License Agreements with |
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(2) |
This adjustment represents non-recurring costs incurred and paid by the Company for the sale of the retained interest by Sphere Entertainment Co. |
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(in thousands) |
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ASSETS |
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Current Assets: |
|
|
|
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Cash, cash equivalents, and restricted cash |
|
$ 37,572 |
|
$ 84,355 |
Accounts receivable, net |
|
101,955 |
|
63,898 |
Related party receivables, current |
|
41,318 |
|
69,466 |
Prepaid expenses and other current assets |
|
69,408 |
|
77,562 |
Total current assets |
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250,253 |
|
295,281 |
Non-Current Assets: |
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|
|
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Property and equipment, net |
|
626,172 |
|
628,888 |
Right-of-use lease assets |
|
310,219 |
|
235,790 |
|
|
69,041 |
|
69,041 |
Intangible assets, net |
|
63,801 |
|
63,801 |
Other non-current assets |
|
100,789 |
|
108,356 |
Total assets |
|
$ 1,420,275 |
|
$ 1,401,157 |
LIABILITIES AND RETAINED EARNINGS (DEFICIT) |
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|
|
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Current Liabilities: |
|
|
|
|
Accounts payable, accrued and other current liabilities |
|
$ 197,256 |
|
$ 214,725 |
Related party payables, current |
|
52,677 |
|
47,281 |
Long-term debt, current |
|
16,250 |
|
16,250 |
Operating lease liabilities, current |
|
35,539 |
|
36,529 |
Deferred revenue |
|
236,349 |
|
225,855 |
Total current liabilities |
|
538,071 |
|
540,640 |
Non-Current Liabilities: |
|
|
|
|
Long-term debt, net of deferred financing costs |
|
605,685 |
|
630,184 |
Operating lease liabilities, non-current |
|
310,952 |
|
219,955 |
Deferred tax liabilities, net |
|
24,070 |
|
23,518 |
Other non-current liabilities |
|
43,544 |
|
56,332 |
Total liabilities |
|
1,522,322 |
|
1,470,629 |
Commitments and contingencies |
|
|
|
|
Deficit: |
|
|
|
|
Class A Common Stock (a) |
|
455 |
|
450 |
Class B Common Stock (b) |
|
69 |
|
69 |
Additional paid-in-capital |
|
25,339 |
|
17,727 |
|
|
(140,512) |
|
(25,000) |
Retained earnings (deficit) |
|
45,881 |
|
(28,697) |
Accumulated other comprehensive loss |
|
(33,279) |
|
(34,021) |
Total deficit |
|
(102,047) |
|
(69,472) |
Total liabilities and deficit |
|
$ 1,420,275 |
|
$ 1,401,157 |
|
|
|
|
|
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|
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(a) |
Class A Common Stock, |
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(b) |
Class B Common Stock, |
(in thousands) (Unaudited) |
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Six Months Ended |
||
|
|
|
||
|
|
2023 |
|
2022 |
Net cash provided by operating activities |
|
$ 105,232 |
|
$ 69,336 |
Net cash (used in) provided by investing activities |
|
(62,731) |
|
22,390 |
Net cash used in financing activities |
|
(89,284) |
|
(553) |
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
(46,783) |
|
91,173 |
Cash, cash equivalents, and restricted cash, beginning of period |
|
84,355 |
|
62,573 |
Cash, cash equivalents, and restricted cash, end of period |
|
$ 37,572 |
|
$ 153,746 |
FISCAL 2024 FINANCIAL GUIDANCE ADJUSTMENTS TO RECONCILE OPERATING INCOME TO ADJUSTED OPERATING INCOME (in millions) |
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Fiscal Year 2024 |
Operating income |
|
|
Non-cash portion of arena license fees from |
|
(25) |
Depreciation and amortization |
|
55 |
Share-based compensation |
|
30 |
Restructuring charges |
|
13 |
Merger, spin-off and acquisition-related costs |
|
2 |
Adjusted operating income |
|
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