EMMIS COMMUNICATIONS CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 8, 2014

Attached files

file filename
8-K - 8-K - EMMIS COMMUNICATIONS CORPa8-kocotber92014.htm


For Immediate Release
Thursday, October 9, 2014
Contacts: Ryan Hornaday, SVP/Finance & Treasurer
rhornaday@emmis.com
Patrick Walsh, CFO/COO, pwalsh@emmis.com
317.266.0100

Emmis Announces Second Quarter Earnings
Reported Revenues up 12.5%; Emmis Radio Stations Continue Share Gains

Indianapolis... Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its second fiscal quarter ending August 31, 2014.

Emmis’ radio net revenues for the second fiscal quarter were up 15%, from $41.2 million to $47.6 million. This includes reported revenue from New York’s WBLS 107.5 FM and WLIB 1190 AM, which Emmis began operating pursuant to a Local Marketing Agreement (“LMA”) on March 1, 2014. On a pro forma basis, assuming results for WBLS and WLIB were included in the same quarter of the prior year and consistent with Miller Kaplan reporting, which excludes barter revenues and syndication revenues, Emmis’ radio net revenues would have been down 1.7%. This compares favorably to our local radio market revenues, which were down 5.1% during the fiscal quarter on the same basis.  

Consistent with Miller Kaplan reporting, which excludes barter revenues and syndication revenues, Emmis’ pro forma radio net revenues are pacing up mid to high single digits for its third fiscal quarter.

Publishing net revenues were up 3% in the second fiscal quarter, driven by higher advertising rates and an increase in custom publishing business.
For the second fiscal quarter, operating income was $12.5 million, compared to $5.7 million for the same quarter of the prior year. Emmis’ station operating income for the second fiscal quarter was $15.2 million, compared to $14.2 million for the same quarter of the prior year.
“While the summer months were challenging for the radio industry, our employees once again delivered revenue share gains. In addition, our most recent ratings significantly outperformed during September, highlighted by Power 106 holding the top spot in LA with both 18-34 and 18-49 audiences,” Jeff Smulyan, President & CEO of Emmis said. “Pacings have improved, looking much stronger for the fall than the summer. Momentum is continuing to build for NextRadio, the Emmis-led industry initiative to make FM broadcast radio available on smartphones and tablets, as we approach 1 million downloads. Average time spent listening per NextRadio session is 50% higher than the radio broadcasting industry average, and as we have gained significant broadcaster involvement and increased listener satisfaction, we are seeing increased interest from other carriers, handset makers and automakers.”

A conference call regarding earnings will be hosted today at 9 a.m. Eastern by dialing 1-517-623-4891. Questions may be submitted via email to ir@emmis.com. A replay of the call will be available until 6 p.m. on Thursday, October 23 by dialing 1-203-369-1922.

Emmis has included supplemental station operating expenses and certain other financial data on its website, www.emmis.com under the “Investors” tab.

Emmis generally evaluates the performance of its operating entities based on station operating income. Management believes that station operating income is useful to investors because it provides a meaningful comparison of operating performance between companies in the industry and serves as an indicator of the market value of a group of stations or publishing entities. Station operating income is generally recognized by the broadcast and publishing industries as a measure of performance and is used by analysts who report on the performance of broadcasting and publishing groups. Station operating income does not take into account Emmis' debt service




requirements and other commitments, and, accordingly, station operating income is not necessarily indicative of amounts that may be available for dividends, reinvestment in Emmis' business or other discretionary uses.

Station operating income is not a measure of liquidity or of performance, in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on the basis of accounting principles generally accepted in the United States. Operating Income is the most directly comparable financial measure in accordance with accounting principles generally accepted in the United States.

Moreover, station operating income is not a standardized measure and may be calculated in a number of ways. Emmis defines station operating income as revenues net of agency commissions and station operating expenses, excluding depreciation, amortization and non-cash compensation. A reconciliation of station operating income to operating income is attached to this press release.

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

Emmis Communications - Great Media, Great People, Great Service®
About Emmis Communications
Emmis Communications Corporation is a diversified media company, principally focused on radio broadcasting. Emmis operates the 9th largest radio portfolio in the United States based on total listeners. Emmis owns 19 FM and 4 AM radio stations in New York, Los Angeles, St. Louis, Austin (Emmis has a 50.1% controlling interest in Emmis’ radio stations located there), Indianapolis and Terre Haute, IN. 

Note: Certain statements included in this press release which are not statements of historical fact, including but not limited to those identified with the words “expect,” “will” or “look” are intended to be, and are, by this Note, identified as “forward-looking statements,” as defined in the Securities and Exchange Act of 1934, as amended. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others:
•general economic and business conditions;
•fluctuations in the demand for advertising and demand for different types of advertising media;
•our ability to service our outstanding debt;
•competition from new or different technologies;
•increased competition in our markets and the broadcasting industry;
•our ability to attract and secure programming, on-air talent, writers and photographers;
•
inability to obtain (or to obtain timely) necessary approvals for purchase or sale transactions or to complete the transactions for other reasons generally beyond our control;
•increases in the costs of programming, including on-air talent;
•inability to grow through suitable acquisitions or to consummate dispositions;
•changes in audience measurement systems
•new or changing regulations of the Federal Communications Commission or other governmental agencies;
•war, terrorist acts or political instability; and
•other factors mentioned in documents filed by the Company with the Securities and Exchange Commission.

Emmis does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise

-30-





EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited, amounts in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended August 31,
 
Six months ended August 31,
 
 
 
 
 
 
 
 
 
 
 
2014
 
2013
 
2014
 
2013
OPERATING DATA:
 
 
 
 
 
 
 
 
  Net revenues:
 
 
 
 
 
 
 
 
    Radio
 
$
47,598

 
$
41,237

 
$
92,588

 
$
78,156

    Publishing
 
14,113

 
13,708

 
28,791

 
27,368

    Emerging Technologies
 
113

 
22

 
169

 
29

      Total net revenues
 
61,824

 
54,967

 
121,548

 
105,553

   Station operating expenses excluding depreciation and amortization expense and LMA fees:
 
 
 
 
 
 
 
 
    Radio
 
31,170

 
27,449

 
58,530

 
50,193

    Publishing
 
14,513

 
13,938

 
29,453

 
28,739

    Emerging Technologies
 
610

 
551

 
1,236

 
718

Total station operating expenses excluding depreciation and amortization expense and LMA fees
 
46,293

 
41,938

 
89,219

 
79,650

Corporate expenses excluding depreciation and amortization expense
 
3,341

 
5,070

 
8,231

 
9,470

  LMA fees
 
383

 
—

 
4,208

 
—

  Hungary license litigation and related expenses
 
192

 
1,043

 
284

 
1,295

  Depreciation and amortization
 
1,591

 
1,213

 
2,944

 
2,389

  Gain on contract settlement
 
(2,500
)
 
—

 
(2,500
)
 
—

  Gain on sale of assets
 
—

 
(1
)
 
(3
)
 
(1
)
  Operating income
 
12,524

 
5,704

 
19,165

 
12,750

  Interest expense
 
(4,878
)
 
(1,808
)
 
(6,478
)
 
(3,729
)
  Loss on debt extinguishment
 
(1,455
)
 
—

 
(1,455
)
 
—

  Other income, net
 
168

 
33

 
179

 
40

  Income before income taxes
 
6,359

 
3,929

 
11,411

 
9,061

  Provision for income taxes
 
2,167

 
4

 
4,552

 
179

  Consolidated net income
 
4,192

 
3,925

 
6,859

 
8,882

  Net income attributable to noncontrolling interests
 
1,432

 
1,354

 
3,143

 
2,835

  Net income attributable to the Company
 
2,760

 
2,571

 
3,716

 
6,047

  Gain on extinguishment of preferred stock
 
—

 
76

 
—

 
325

  Net income attributable to common shareholders
 
$
2,760

 
$
2,647

 
$
3,716

 
$
6,372

 
 
 
 
 
 
 
 
 
     Basic net income per common share
 
$
0.06

 
$
0.06

 
$
0.09

 
$
0.15

     Diluted net income per common share
 
$
0.06

 
$
0.05

 
$
0.08

 
$
0.13

 
 
 
 
 
 
 
 
 
     Basic weighted average shares outstanding
 
42,525

 
41,151

 
42,337

 
41,313

     Diluted weighted average shares outstanding
 
47,544

 
46,937

 
47,479

 
46,361

 
 
 
 
 
 
 
 
 




 
 
Three months ended August 31,
 
Six months ended August 31,
 
 
 
 
 
 
 
 
 
 
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
 
OTHER DATA:
 
 
 
 
 
 
 
 
  Station operating income (See below)
 
$
15,216

 
$
14,242

 
$
28,591

 
$
27,369

  (Refund from) cash paid for income taxes, net
 
(35
)
 
(138
)
 
243

 
(804)

  Cash paid for interest
 
1,025

 
1,586

 
2,395

 
3,285

  Capital expenditures
 
1,050

 
841

 
1,675

 
1,857

 
 
 
 
 
 
 
 
 
 Noncash compensation by segment:
 
 
 
 
 
 
 
 
           Radio
 
$
45

 
$
811

 
$
315

 
$
980

           Publishing
 
23

 
402

 
155

 
486

           Corporate & Emerging Technologies
 
515

 
1,206

 
1,061

 
1,616

                  Total
 
$
583

 
$
2,419

 
$
1,531

 
$
3,082

 
 
 
 
 
 
 
 
 
COMPUTATION OF STATION OPERATING INCOME:
 
 
 
 
 
 
 
 
  Operating income
 
$
12,524

 
$
5,704

 
$
19,165

 
$
12,750

  Plus: Depreciation and amortization
 
1,591

 
1,213

 
2,944

 
2,389

  Plus: Hungary litigation expense and related costs
 
192

 
1,043

 
284

 
1,295

  Plus: Corporate expenses
 
3,341

 
5,070

 
8,231

 
9,470

  Plus: Station noncash compensation
 
68

 
1,213

 
470

 
1,466

  Less: Gain on contract settlement
 
(2,500
)
 
—

 
(2,500
)
 
—

  Less: Gain on sale of assets
 
—

 
(1
)
 
(3
)
 
(1
)
  Station operating income
 
$
15,216

 
$
14,242

 
$
28,591

 
$
27,369

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET INFORMATION:
 
August 31, 2014
 
February 28, 2014
 
 
 
 
Total Cash and Cash Equivalents
 
$
6,398

 
$
5,304

 
 
 
 
Credit Agreement Debt
 
$
199,500

 
$
54,000

 
 
 
 
98.7FM Nonrecourse Debt
 
$
72,722

 
$
74,942

 
 
 
 



EMMIS COMMUNICATIONS CORP Reports