Madison Square Garden Entertainment Corp. Reports Fiscal 2021 First Quarter Results

NEW YORK–(BUSINESS WIRE)–Madison Sq. Backyard Leisure Corp. (NYSE: MSGE) (“MSG Leisure”) in the present day reported monetary outcomes for the fiscal first quarter ended September 30, 2020.

Because of the COVID-19 pandemic, the Firm’s efficiency venues and Tao Group Hospitality’s leisure eating and nightlife venues had been closed in mid-March and, apart from sure Tao Group Hospitality venues, remained closed in the course of the fiscal 2021 first quarter, materially impacting the Firm’s monetary outcomes. For the fiscal 2021 first quarter, the Firm reported revenues of $14.4 million, a lower of 92% as in contrast with the prior yr quarter.⁽¹⁾⁽²⁾ As well as, the Firm had an working lack of $126.6 million and an adjusted working lack of $67.7 million, in comparison with an working lack of $68.1 million and an adjusted working lack of $30.1 million within the prior yr quarter.⁽³⁾⁽⁴⁾

The Firm not too long ago accomplished a $650 million debt financing within the type of a five-year senior secured time period mortgage, considerably strengthening the Firm’s liquidity place. As well as, Madison Sq. Backyard Sports activities Corp. (“MSG Sports activities”) not too long ago terminated its $200 million delayed draw time period loans with MSG Leisure, which eliminated a possible near-term obligation for the Firm.

Government Chairman and CEO James L. Dolan stated, “Our enterprise continues to be impacted by COVID-19; nonetheless, we stay assured that our Firm is well-positioned to navigate these unprecedented instances. Our focus is on preserving our robust stability sheet and defending our core leisure enterprise, whereas we additionally make vital progress on MSG Sphere. We stay inspired by the continued engagement from artists and followers, and count on our enterprise to return rapidly once we are in a position to safely re-open our venues.”

Phase Outcomes for the Quarter Ended September 30, 2020 and 2019:

Leisure

For the fiscal 2021 first quarter, Leisure section revenues of $7.6 million decreased 94%, or $112.1 million, as in contrast with the prior yr quarter, primarily reflecting the affect of COVID-19. The closure of the Firm’s venues led to decreases of $70.4 million in event-related revenues, $19.6 million in suite license payment revenues, and $11.6 million in venue-related signage and sponsorship revenues. As well as, the prior yr quarter included $11.8 million in revenues from the Discussion board, which was offered in Could 2020.

Fiscal 2021 first quarter direct working bills of $23.6 million decreased 75%, or $71.3 million, as in contrast with the prior yr quarter, primarily reflecting the affect of COVID-19. The absence of occasions within the quarter led to decreases of $42.7 million in event-related bills on the Firm’s venues, $13.4 million in suite license bills, and $6.2 million in venue-related signage and sponsorship bills. As well as, the prior yr quarter included $6.9 million in direct working bills from the Discussion board.

Fiscal 2021 first quarter promoting, normal and administrative bills of $52.7 million decreased 25%, or $17.7 million, as in contrast with the prior yr quarter. This primarily displays an $11.4 million lower in skilled charges primarily associated to litigation, company improvement, and MSG Sphere content material improvement and a $3.9 million lower in worker compensation and associated advantages.

Fiscal 2021 first quarter working lack of $110.7 million elevated 64%, or $43.2 million, and adjusted working lack of $58.3 million elevated 64%, or $22.7 million, each as in comparison with the prior yr quarter. This primarily displays the lower in revenues, partially offset by decrease direct working bills and, to a lesser extent, decrease promoting, normal and administrative bills. With respect to working loss, the rise was additionally pushed by $19.9 million of restructuring prices associated to the Firm’s full-time workforce discount in August 2020.

Tao Group Hospitality

For the fiscal 2021 first quarter, Tao Group Hospitality section revenues of $7.2 million decreased 88%, or $51.4 million, as in comparison with the prior yr quarter, primarily reflecting the affect of COVID-19. The closure of sure leisure eating and nightlife venues lowered revenues by $25.7 million, whereas capability restrictions at re-opened venues lowered revenues by $20.9 million.

Fiscal 2021 first quarter direct working bills of $9.8 million decreased 72%, or $25.8 million, as in comparison with the prior yr quarter, primarily on account of the COVID-19 pandemic. Worker compensation and associated advantages decreased $11.6 million, primarily on account of a big discount in Tao Group Hospitality’s venue workers. As well as, the price of meals and beverage and venue leisure decreased $10.8 million primarily ensuing from the closure of sure venues and capability restrictions at re-opened venues.

Fiscal 2021 first quarter promoting, normal and administrative bills of $7.6 million decreased 56%, or $9.8 million, as in comparison with the prior yr quarter. This primarily displays a $3.5 million lower in advertising prices and a $1.4 million lower in worker compensation and associated advantages, in addition to different internet decreases.

Fiscal 2021 first quarter working revenue decreased by $14.6 million to a lack of $11.3 million and adjusted working revenue decreased by $14.7 million to a lack of $9.1 million, each as in comparison with the prior yr quarter. This primarily displays the lower in revenues, partially offset by decrease direct working bills and, to a lesser extent, decrease promoting, normal and administrative bills.

Different Issues

Throughout this era of uncertainty, the Firm has taken a lot of steps to scale back bills and preserve its liquidity. In August, the Firm carried out a workforce discount and vital spending cuts, leading to roughly $100 million in estimated working expense financial savings on an annual foundation. The continued results of the pandemic additionally drove the Firm’s determination to elongate its development timetable for MSG Sphere in Las Vegas, which the Firm expects to open in calendar 2023.

This month, the Firm accomplished a $650 million debt financing within the type of a five-year senior secured time period mortgage at a subsidiary of MSG Leisure that owns and operates the Firm’s core dwell leisure enterprise. The time period mortgage collateral package deal contains fairness pursuits in sure of the Firm’s venues and the Christmas Spectacular Starring the Radio Metropolis Rockettes manufacturing, however excludes the Madison Sq. Backyard Enviornment. MSG Sphere and Tao Group Hospitality aren’t within the time period mortgage borrower group. The financing bolsters the Firm’s already robust liquidity place, additional strengthening MSG Leisure’s skill to help its core companies by way of this shutdown of its venues.

Additionally in November, MSG Sports activities terminated its $110 million New York Knicks delayed draw time period mortgage and its $90 million New York Rangers delayed draw time period mortgage, each with MSG Leisure. These amenities, which had been undrawn, had been scheduled to mature in October 2021. The termination of those amenities removes a possible near-term obligation for the Firm.

As of September 30, 2020, professional forma for the debt financing, the Firm’s money stability and whole debt excellent had been almost $1.6 billion and $682.5 million, respectively.

The Firm’s money stability at quarter-end included roughly $191 million in deferred income and collections on account of promoters, as in comparison with roughly $200 million as of June 30, 2020. The general stability as of September 30, 2020 was primarily associated to suites and tickets, which might be addressed, to the extent obligatory, by way of credit, make-goods, refunds and/or rescheduled dates. Of the quantity associated to tickets, the numerous majority was for occasions which have been or are anticipated to be rescheduled into calendar 2021. A majority of ticket holders for rescheduled occasions have opted to retain their tickets and, in consequence, the Firm paid out lower than $10 million in ticket-related refunds within the fiscal 2021 first quarter.

About Madison Sq. Backyard Leisure Corp.

Madison Sq. Backyard Leisure Corp. (MSG Leisure) is a frontrunner in dwell leisure experiences. The Firm presents or hosts a broad array of occasions in its various assortment of venues: New York’s Madison Sq. Backyard, Hulu Theater at Madison Sq. Backyard, Radio Metropolis Music Corridor and Beacon Theatre; and The Chicago Theatre. MSG Leisure can also be constructing a brand new state-of-the-art venue in Las Vegas, MSG Sphere at The Venetian, and has introduced plans to construct a second MSG Sphere in London, pending obligatory approvals. As well as, the Firm options the unique manufacturing – the Christmas Spectacular Starring the Radio Metropolis Rockettes – and thru Boston Calling Occasions, produces the Boston Calling Music Pageant. Additionally underneath the MSG Leisure umbrella is Tao Group Hospitality, with leisure eating and nightlife manufacturers together with Tao, Marquee, Lavo, Avenue, Magnificence & Essex and Cathédrale. Extra data is accessible at www.msgentertainment.com.

Non-GAAP Monetary Measures

We outline adjusted working revenue (loss), which is a non-GAAP monetary measure, as working revenue (loss) earlier than (i) changes to take away the affect of non-cash straight-line leasing income related to the Enviornment License Agreements with MSG Sports activities, (ii) depreciation, amortization and impairments of property and gear, goodwill and different intangible property, (iii) amortization for capitalized cloud computing association prices, (iv) share-based compensation expense or profit, (v) restructuring prices or credit, and (vi) positive factors or losses on gross sales or tendencies of companies and related settlements, which is known as adjusted working revenue (loss), a non-GAAP measure. Along with excluding the affect of the gadgets mentioned above, the affect of buy accounting changes associated to enterprise acquisitions can also be excluded in evaluating the Firm’s consolidated adjusted working revenue (loss). We imagine that the exclusion of share-based compensation expense or profit permits traders to higher observe the efficiency of the varied working models of our enterprise with out regard to the settlement of an obligation that’s not anticipated to be made in money. We imagine that given the size of the Enviornment License Agreements and ensuing magnitude of the distinction in leasing income acknowledged and money income acquired, the exclusion of non-cash leasing income offers traders with a clearer image of the Firm’s working efficiency.

We imagine adjusted working revenue (loss) is an acceptable measure for evaluating the working efficiency of our enterprise segments and the Firm on a consolidated foundation. Adjusted working revenue (loss) and related measures with related titles are frequent efficiency measures utilized by traders and analysts to research our efficiency. Internally, we use revenues and adjusted working revenue (loss) as an important indicators of our enterprise efficiency, and consider administration’s effectiveness with particular reference to those indicators. Adjusted working revenue (loss) must be seen as a complement to and never an alternative to working revenue (loss), internet revenue (loss), money flows from working actions, and different measures of efficiency and/or liquidity introduced in accordance with U.S. typically accepted accounting rules (“GAAP”). Since adjusted working revenue (loss) isn’t a measure of efficiency calculated in accordance with GAAP, this measure will not be corresponding to related measures with related titles utilized by different firms. For a reconciliation of working revenue (loss) to adjusted working revenue (loss), please see web page 6 of this launch.

Ahead-Wanting Statements

This press launch could comprise statements that represent forward-looking statements inside the that means of the Non-public Securities Litigation Reform Act of 1995. Buyers are cautioned that any such forward-looking statements aren’t ensures of future efficiency or outcomes and contain dangers and uncertainties, and that precise outcomes, developments and occasions could differ materially from these within the forward-looking statements on account of numerous elements, together with monetary neighborhood and ranking company perceptions of the Firm and its enterprise, operations, monetary situation and the industries during which it operates, the affect of the COVID-19 pandemic and the elements described within the Firm’s filings with the Securities and Alternate Fee, together with the sections titled “Danger Elements” and “Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations” contained therein. The Firm disclaims any obligation to replace any forward-looking statements contained herein.

Convention Name Data:

The convention name might be Webcast dwell in the present day at 4:30 p.m. ET at investor.msgentertainment.com

Convention name dial-in quantity is 888-421-7163 / Convention ID Quantity 8046795

Convention name replay quantity is 855-859-2056 / Convention ID Quantity 8046795 till November 22, 2020

MADISON SQUARE GARDEN ENTERTAINMENT CORP.

ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO

ADJUSTED OPERATING INCOME (LOSS)

(Unaudited)

The next is an outline of the changes to working revenue (loss) in arriving at adjusted working revenue (loss) as described on this earnings launch:

• Share-based compensation. This adjustment eliminates the compensation expense regarding restricted inventory models and inventory choices granted underneath the MSG Leisure Worker Inventory Plan, MSG Sports activities Worker Inventory Plan and Non-Worker Director Plan in all intervals.
• Depreciation and amortization. This adjustment eliminates depreciation and amortization of property and gear and intangible property in all intervals.
• Restructuring prices. This adjustment eliminates prices associated to termination advantages supplied to workers as a part of the Firm’s full-time workforce discount in August 2020.
• Buy accounting changes. This adjustment eliminates the affect of assorted buy accounting changes associated to enterprise acquisitions, primarily favorable / unfavorable lease agreements of the acquiree.