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8-K - FORM 8-K - AUDACY, INC.d623040d8k.htm

Exhibit 99.1

 

LOGO

Entercom Communications Corp.

Reports Third Quarter Results

(Bala Cynwyd, Pa. November 5, 2013) Entercom Communications Corp. (NYSE: ETM) today reported financial results for the quarter ended September 30, 2013.

Third Quarter Highlights

 

    Net revenues for the quarter decreased 4% to $98.4 million

 

    Station expenses increased 5% to $66.9 million due to a large prior year expense credit

 

    Station operating income decreased 19% to $31.5 million

 

    Adjusted EBITDA decreased 22% to $26.2 million

 

    Adjusted net income per share decreased 26% to $0.20

 

    Free cash flow decreased 26% to $15.1 million

David J. Field, President and Chief Executive Officer, stated: “Sales execution issues hindered our third quarter performance causing a 4% decline in revenues. We are steadily putting these issues behind us and working to capitalize on our excellent competitive position featuring highly-rated brands and strong customer marketing capabilities. Core pacings for the fourth quarter have improved significantly over the past couple months and we are well positioned for solid top line and free cash flow performance in 2014.”

Additional Information

Station operating expenses increased 5% during the quarter as the prior year results included a $2.0 million non-recurring expense credit from radio industry’s music licensing settlement with Broadcast Music, Inc.

The Company reduced its outstanding net senior debt and senior notes by $20 million during the quarter. As of September 30, 2013, the Company had $6.6 million in cash and $525.6 million of senior debt and senior notes.

Earnings Conference Call and Company Information

Entercom will hold a conference call regarding the quarterly earnings release on Tuesday, November 5, 2013 at 5:00 PM Eastern Time. Investors will have the opportunity to submit questions to the Company regarding the third quarter earnings release by emailing their inquiries to questions@entercom.com. Questions should be sent at least 10 minutes prior to the call. The Company will only discuss inquiries made by email prior to the conference call. The public may access the conference call by dialing 888-889-0278 (passcode: Entercom). A replay of the conference call will be available and can be accessed either by dialing 866-431-5851 or by visiting the Company’s website: www.entercom.com. Additional information and reconciliation of same station results are available on the Company’s website at www.entercom.com.

 

Exhibit 99.1 - Page 1


About Entercom

Entercom Communications Corp. (NYSE: ETM), led by President and CEO David Field, is one of the largest radio broadcasting companies in the United States, with a nationwide portfolio of over 100 stations in 23 markets, including San Francisco, Boston, Seattle, Denver, Portland, Sacramento and Kansas City.

Known for developing unique and highly successful locally programmed stations, Entercom is home to some of radio’s most distinguished brands and compelling personalities. The company also is the radio broadcast partner of the Boston Red Sox, Buffalo Bills, Buffalo Sabres, Kansas City Royals, Memphis Grizzlies, New Orleans Saints, New Orleans Pelicans, Oakland Athletics, Oakland Raiders and San Jose Sharks.

Entercom focuses on creating effective multi-platform marketing solutions for its customers, incorporating the company’s audio, digital and experiential assets. Additionally, the company has a long-standing commitment to responsible corporate citizenship and environmental stewardship. Entercom stations play a vital, hands-on role in improving their communities, providing over $100 million in annual support for local charitable organizations.

The company’s radio stations have received numerous awards, including multiple Edward R. Murrow Awards for excellence in broadcast journalism, as well as the National Association of Broadcasters (NAB) Marconi Award for excellence in radio broadcasting. In 2012, Entercom was named by Information Week as one of the Top 500 Technology Innovators in the United States.

Certain Definitions

All references to per share data, unless stated otherwise, are presented as per diluted share. All references to shares outstanding, unless stated otherwise, are presented to exclude unvested restricted stock units. All references to net debt are outstanding debt net of cash on hand.

Station expenses consist of station operating expenses excluding non-cash compensation expense.

Corporate expenses consist of corporate general and administrative expenses excluding non-cash compensation expense.

Station operating income consists of operating income (loss) before: depreciation and amortization; time brokerage agreement fees (income); corporate general and administrative expenses; non-cash compensation expense (which is otherwise included in station operating expenses); impairment loss; merger and acquisition costs; and gain or loss on sale or disposition of assets.

Adjusted EBITDA consists of net income (loss), adjusted to exclude: income taxes (benefit); total other expense; depreciation and amortization; time brokerage agreement fees (income); non-cash compensation expense (which is otherwise included in station operating expenses and corporate G&A expenses); impairment loss; merger and acquisition costs; and gain or loss on sale or disposition of assets.

 

Exhibit 99.1 - Page 2


Free cash flow consists of operating income (loss): (i) plus depreciation and amortization, net (gain) loss on sale or disposal of assets; non-cash compensation expense (which is otherwise included in station operating expenses and corporate general and administrative expenses), impairment loss; merger and acquisition costs; and (ii) less net interest expense (excluding amortization of deferred financing costs), taxes paid and capital expenditures.

Adjusted net income consists of net income (loss) adjusted to exclude: (i) income taxes (benefit) as reported; (ii) gain/loss on sale of assets, derivative instruments and investments; (iii) non-cash compensation expense; (iv) other income; (v) impairment loss; (vi) merger and acquisition costs; and (vii) gain/loss on early extinguishment of debt. For purposes of comparability, income taxes are reflected at the expected statutory federal and state income tax rate of 42% without discrete items of tax.

Adjusted net income per share includes any dilutive equivalent shares when not anti-dilutive.

Same station is computed by comparing the performance of stations operated by the Company throughout the relevant period to the comparable performance in the prior year’s corresponding period (excluding non-cash compensation expense). Any acquisition or disposition of radio stations not deemed to be material by management are ignored for the purpose of computing this data. There were no material acquisitions during the periods presented in the above tables.

Non-GAAP Financial Measures

It is important to note that station operating income, station expense, corporate expense, same station net revenues, same station expenses, same station operating income, adjusted EBITDA, adjusted net income, adjusted net income per share and free cash flow are not measures of performance or liquidity calculated in accordance with generally accepted accounting principles (“GAAP”). Management believes that these measures are useful as a way to evaluate the Company and the means for management to evaluate our radio stations’ performance and operations. Management believes that these measures are useful to an investor in evaluating our performance because they are widely used in the broadcast industry as a measure of a radio company’s operating performance.

Certain adjusted non-GAAP financial measures are presented in this release (e.g., adjusted net income and adjusted net income per share). The adjustments exclude gain/loss on sale of assets, derivative instruments, and investments; non-cash compensation expense, other income, impairment loss and gain/loss on early extinguishment of debt. Management believes these adjusted non-GAAP measures provide useful information to Management and investors by excluding certain income, expenses and gains and losses that may not be indicative of the Company’s core operating and financial results. Similarly, Management believes these adjusted measures are a useful performance measure because certain items included in the calculation of net income (loss) may either mask or exaggerate trends in the Company’s ongoing operating performance. Further, the reconciliations corresponding to these adjusted measures, by identifying the individual adjustments, provide a useful mechanism for investors to consider these adjusted measures with some or all of the identified adjustments.

 

Exhibit 99.1 - Page 3


Management uses these non-GAAP financial measures on an ongoing basis to help track and assess the Company’s financial performance. You, however, should not consider non-GAAP measures in isolation or as substitutes for net income (loss), operating income, or any other measure for determining our operating performance that is calculated in accordance with generally accepted accounting principles. These non-GAAP measures are not necessarily comparable to similarly titled measures employed by other companies. The accompanying financial tables provide reconciliations to the nearest GAAP measure of all non-GAAP measures provided in this release.

Note Regarding Forward-Looking Statements

The information in this news release is being widely disseminated in accordance with the Securities and Exchange Commission’s Regulation FD.

This news announcement contains certain forward-looking statements that are based upon current expectations and certain unaudited pro forma information that is presented for illustrative purposes only and involves certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Additional information and key risks are described in the Company’s filings on Forms 8-K, 10-Q and 10-K with the Securities and Exchange Commission. Readers should note that these statements might be impacted by several factors including changes in the economic and regulatory climate and the business of radio broadcasting, in general. The unaudited pro forma information and same station operating data reflect adjustments and are presented for comparative purposes only and do not purport to be indicative of what has occurred or indicative of future operating results or financial position. Accordingly, the Company’s actual performance may differ materially from those stated or implied herein. The Company assumes no obligation to publicly update or revise any unaudited pro forma or forward-looking statements.

Contact:

Steve Fisher

Executive Vice President and Chief Financial Officer

610-660-5647

 

Exhibit 99.1 - Page 4


Third Quarter 2013

Earnings Release

ENTERCOM COMMUNICATIONS CORP.

FINANCIAL DATA

(amounts in thousands, except per share data)

(unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2013     2012     2013     2012  

STATEMENTS OF OPERATIONS

        

Net Revenues

   $ 98,436      $ 102,295      $ 278,035      $ 286,832   
  

 

 

   

 

 

   

 

 

   

 

 

 

Station Expenses

     66,917        63,550        190,518        190,687   

Station Expense - Non-Cash Compensation

     187        169        522        433   

Corporate Expenses

     5,344        5,232        15,429        15,608   

Corporate Expenses - Non-Cash Compensation

     695        1,097        2,458        3,551   

Depreciation And Amortization

     2,041        2,746        6,557        8,242   

Impairment Loss

     —          —          850        22,307   

Net Time Brokerage Agreement Fees (Income)

     —          (4     —          238   

Net (Gain) Loss On Sale Or Disposition of Assets

     (34     120        (1,625     123   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Expenses

     75,150        72,910        214,709        241,189   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income

     23,286        29,385        63,326        45,643   
  

 

 

   

 

 

   

 

 

   

 

 

 

Other Expense (Income) Items:

        

Net Interest Expense

     11,038        13,285        33,822        40,854   

Net Gain On Derivative Instruments

     —          —          —          (1,346

Net Loss On Investments

     —          50        —          50   

Other Income

     —          (35     (93     (81
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Other Expense

     11,038        13,300        33,729        39,477   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income Before Income Taxes

     12,248        16,085        29,597        6,166   

Income Taxes

     5,373        7,908        13,080        2,245   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

   $ 6,875      $ 8,177      $ 16,517      $ 3,921   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income Per Share - Basic

   $ 0.18      $ 0.22      $ 0.44      $ 0.11   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income Per Share - Diluted

   $ 0.18      $ 0.22      $ 0.43      $ 0.10   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted Common Shares Outstanding - Basic

     37,386        36,735        37,335        36,704   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted Common Shares Outstanding - Diluted

     38,153        37,548        38,209        37,662   
  

 

 

   

 

 

   

 

 

   

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

        

Capital Expenditures

   $ 1,074      $ 825      $ 3,502      $ 1,787   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income Taxes Paid

   $ —        $ —        $ 69      $ 99   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash Interest

   $ 4,453      $ 3,105      $ 26,378      $ 29,068   
  

 

 

   

 

 

   

 

 

   

 

 

 
SELECTED BALANCE SHEET DATA    September 30,              
     2013     2012              

Cash And Cash Equivalents

   $ 6,569      $ 6,603       
  

 

 

   

 

 

     

Total Assets

   $ 907,158      $ 924,259       
  

 

 

   

 

 

     

Current Portion Of Senior Debt

   $ 31      $ 13,589       
  

 

 

   

 

 

     

Senior Debt (including Current Debt)

   $ 308,070      $ 369,600       
  

 

 

   

 

 

     

Senior Notes

   $ 217,552      $ 217,285       
  

 

 

   

 

 

     

Total Shareholders’ Equity

   $ 283,266      $ 258,648       
  

 

 

   

 

 

     

 

Exhibit 99.1 - Page 5


OTHER FINANCIAL DATA

 

     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2013     2012     2013     2012  

Reconciliation Of GAAP Station Operating Expenses To Station Expenses

        

Station Operating Expenses

   $ 67,104      $ 63,719      $ 191,040      $ 191,120   

Station Expenses - Non-Cash Compensation

     (187     (169     (522     (433
  

 

 

   

 

 

   

 

 

   

 

 

 

Station Expenses

   $ 66,917      $ 63,550      $ 190,518      $ 190,687   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation Of GAAP Corporate General & Administrative Expenses To Corporate Expenses

        

Corporate General & Administrative Expenses

   $ 6,039      $ 6,329      $ 17,887      $ 19,159   

Corporate Expenses - Non-Cash Compensation

     (695     (1,097     (2,458     (3,551
  

 

 

   

 

 

   

 

 

   

 

 

 

Corporate Expenses

   $ 5,344      $ 5,232      $ 15,429      $ 15,608   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation Of GAAP Operating Income To Station Operating Income

        

Operating Income

   $ 23,286      $ 29,385      $ 63,326      $ 45,643   

Corporate Expenses

     5,344        5,232        15,429        15,608   

Corporate Expenses - Non-Cash Compensation

     695        1,097        2,458        3,551   

Station Expenses - Non-Cash Compensation

     187        169        522        433   

Depreciation And Amortization

     2,041        2,746        6,557        8,242   

Impairment Loss

     —          —          850        22,307   

Net Time Brokerage Agreement Fees (Income)

     —          (4     —          238   

Net (Gain) Loss On Sale Or Disposition of Assets

     (34     120        (1,625     123   
  

 

 

   

 

 

   

 

 

   

 

 

 

Station Operating Income

   $ 31,519      $ 38,745      $ 87,517      $ 96,145   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation Of GAAP Net Income To Adjusted EBITDA

        

Net Income

   $ 6,875      $ 8,177      $ 16,517      $ 3,921   

Income Taxes

     5,373        7,908        13,080        2,245   

Total Other Expense

     11,038        13,300        33,729        39,477   

Corporate Expenses - Non-Cash Compensation

     695        1,097        2,458        3,551   

Station Expenses - Non-Cash Compensation

     187        169        522        433   

Depreciation And Amortization

     2,041        2,746        6,557        8,242   

Impairment Loss

     —          —          850        22,307   

Net Time Brokerage Agreement Fees (Income)

     —          (4     —          238   

Net (Gain) Loss On Sale Or Disposition of Assets

     (34     120        (1,625     123   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 26,175      $ 33,513      $ 72,088      $ 80,537   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

Exhibit 99.1 - Page 6


     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2013     2012     2013     2012  

Reconciliation Of GAAP Net Income To Free Cash Flow

        

Net Income

   $ 6,875      $ 8,177      $ 16,517      $ 3,921   

Depreciation And Amortization

     2,041        2,746        6,557        8,242   

Impairment Loss

     —          —          850        22,307   

Deferred Financing Costs Included In Interest Expense

     1,005        1,111        3,058        3,283   

Amortization Of Original Issue Discount Included In Interest Expense

     69        62        203        182   

Non-Cash Compensation Expense

     882        1,266        2,980        3,984   

Net (Gain) Loss On Sale Or Disposition of Assets

     (34     120        (1,625     123   

Net Gain On Derivative Instruments

     —          —          —          (1,346

Net Loss On Investments

     —          50        —          50   

Other Income

     —          (35     (93     (81

Income Taxes

     5,373        7,908        13,080        2,245   

Capital Expenditures

     (1,074     (825     (3,502     (1,787

Income Taxes Paid

     —          —          (69     (99
  

 

 

   

 

 

   

 

 

   

 

 

 

Free Cash Flow

   $ 15,137      $ 20,580      $ 37,956      $ 41,024   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation Of GAAP Operating Income To Free Cash Flow:

        

Operating Income

   $ 23,286      $ 29,385      $ 63,326      $ 45,643   

Depreciation and Amortization

     2,041        2,746        6,557        8,242   

Non-Cash Compensation Expense

     882        1,266        2,980        3,984   

Impairment Loss

     —          —          850        22,307   

Interest Expense, Net of Interest Income, Deferred Financing Costs & OID

     (9,964     (12,112     (30,561     (37,389

Capital Expenditures

     (1,074     (825     (3,502     (1,787

Net (Gain) Loss On Sale Or Disposition of Assets

     (34     120        (1,625     123   

Income Taxes Paid

     —          —          (69     (99
  

 

 

   

 

 

   

 

 

   

 

 

 

Free Cash Flow

   $ 15,137      $ 20,580      $ 37,956      $ 41,024   
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation Of GAAP Net Income To Adjusted Net Income

        

Net Income

   $ 6,875      $ 8,177      $ 16,517      $ 3,921   

Income Taxes

     5,373        7,908        13,080        2,245   

Net (Gain) Loss On Sale Or Disposition of Assets

     (34     120        (1,625     123   

Impairment Loss

     —          —          850        22,307   

Net Gain On Derivative Instruments

     —          —          —          (1,346

Net Loss On Investments

     —          50        —          50   

Other Income

     —          (35     (93     (81

Non-Cash Compensation Expense

     882        1,266        2,980        3,984   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Income (Loss) Before Income Taxes (Benefit)

     13,096        17,486        31,709        31,203   

Income Taxes

     5,500        7,344        13,318        13,105   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income

   $ 7,596      $ 10,142      $ 18,391      $ 18,098   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted Average Diluted Shares Outstanding

     38,153        37,548        38,209        37,662   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income Per Share - Diluted

   $ 0.20      $ 0.27      $ 0.48      $ 0.48   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

Exhibit 99.1 - Page 7