EMMIS COMMUNICATIONS CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 11, 2017

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Exhibit 99.1

For Immediate Release
Thursday, October 12, 2017

Contact: Ryan Hornaday, CFO
rhornaday@emmis.com
317-266-0100

Emmis Announces Second Quarter Earnings; Pro Forma Radio Revenues Up 2%

Indianapolis... Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its second fiscal quarter ending August 31, 2017. 

Emmis’ radio net revenues for the second fiscal quarter were $41.8 million, compared to $46.0 million in the prior year. Due to the sale of our Terre Haute radio stations in January 2017 and KPWR-FM in Los Angeles in August 2017, our reported results are not comparable year-over year. Pro forma for these station divestitures, radio revenues for our second fiscal quarter would have been up 2%. Emmis’ New York, Austin and St. Louis clusters gained market share in the quarter.

The sale of KPWR closed on August 1, 2017. Net proceeds of $73.6 million were used to reduce credit facility term loans outstanding by nearly one-half. The balance of term loans outstanding as of quarter-end was $74.4 million.

“There were bright spots this quarter, especially in New York, as our second quarter results were buoyed by record-setting ticket sales for Hot 97’s marquee event, Summer Jam, and Hot 97 has been the #1 rated station in the 18-34 demo for each of the last three months,” said Jeff Smulyan, CEO & Chairman of the Board of Emmis.

“Rapid progress continues on multiple fronts with NextRadio. Streaming versions for Android and Apple devices launched in July, making the NextRadio app available on every smartphone,” Smulyan continued. “Usage has jumped sharply following this product enhancement. We recently introduced the revamped Dial Report, which provides unique data insights and attribution measurement for radio users. In August, NextRadio announced an agreement with LG for FM-enablement across North and South America. Look for other major announcements on this front in the coming months.
“And in the wake of the destruction caused by Hurricanes Harvey, Irma and Maria, Federal Communications Chairman Ajit Pai and other industry leaders have publicly called upon Apple to activate the FM chips inside iPhones. Apple is the only major device manufacturer yet to do so. We remain optimistic they will see the public safety necessity of this step,” Smulyan concluded.

A conference call regarding earnings will be hosted today at 9 a.m. Eastern today by dialing 1-517-623-4891. Questions may be submitted via email to ir@emmis.com. A digital playback of the call will be available until Thursday, October 19 by dialing 1-203-369-1448.

Emmis has included supplemental pro forma net revenues, 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.



Exhibit 99.1

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®
Emmis Communications Corporation is a diversified media company, principally focused on radio broadcasting. Emmis owns 15 FM and 3 AM radio stations in New York, St. Louis, Austin (Emmis has a 50.1% controlling interest in Emmis’ radio stations located there) and Indianapolis. Emmis also developed and licenses TagStation®, a cloud-based software platform that allows a broadcaster to manage album art, metadata and enhanced advertising on its various broadcasts, and developed NextRadio®, a smartphone application that marries over-the-air FM radio broadcasts with visual and interactive features on smartphones.




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 including our competitors changing the format of a station they operate to more directly compete with a station we operate in the same market;
•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



Exhibit 99.1

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,
 
 
2017
 
2016
 
2017
 
2016
OPERATING DATA:
 
 
 
 
 
 
 
 
Net revenues:
 
 
 
 
 
 
 
 
  Radio
 
$
41,764

 
$
45,972

 
$
80,470

 
$
88,671

  Publishing
 
846

 
12,619

 
1,990

 
25,711

  Emerging Technologies
 
238

 
183

 
552

 
394

     Total net revenues
 
42,848

 
58,774

 
83,012

 
114,776

Station operating expenses excluding depreciation and amortization expense:
 
 
 
 
 
 
 
 
  Radio
 
29,881

 
31,661

 
56,015

 
58,936

  Publishing
 
1,104

 
12,959

 
2,459

 
26,437

  Emerging Technologies
 
2,919

 
2,371

 
6,660

 
4,607

     Total station operating expenses excluding depreciation and amortization expense
 
33,904

 
46,991

 
65,134

 
89,980

Corporate expenses excluding depreciation and amortization expense
 
2,538

 
2,453

 
5,281

 
5,497

Depreciation and amortization
 
881

 
1,282

 
1,859

 
2,614

Impairment loss on intangible assets
 
—

 
2,988

 
—

 
2,988

Gain on sale of assets, net of disposition costs
 
(76,706
)
 
—

 
(76,706
)
 
—

Loss on disposal of property and equipment
 
12

 
125

 
12

 
125

Operating income
 
82,219

 
4,935

 
87,432

 
13,572

Interest expense
 
(4,548
)
 
(4,758
)
 
(9,214
)
 
(9,448
)
Loss on debt extinguishment
 
(2,523
)
 
—

 
(2,523
)
 
—

Other income, net
 
11

 
89

 
14

 
132

Income before income taxes
 
75,159

 
266

 
75,709

 
4,256

Provision for income taxes
 
4,394

 
664

 
4,372

 
1,339

Consolidated net income (loss)
 
70,765

 
(398
)
 
71,337

 
2,917

Net income (loss) attributable to noncontrolling interests
 
808

 
(733
)
 
1,647

 
(104
)
Net income attributable to the Company
 
$
69,957

 
$
335

 
$
69,690

 
$
3,021

 
 
 
 
 
 
 
 
 
  Basic net income per common share
 
$
5.69

 
$
0.03

 
$
5.67

 
$
0.25

  Diluted net income per common share
 
$
5.59

 
$
0.03

 
$
5.59

 
$
0.25

  Basic weighted average shares outstanding
 
12,292

 
12,047

 
12,287

 
11,922

  Diluted weighted average shares outstanding
 
12,513

 
12,299

 
12,463

 
12,043

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Exhibit 99.1

 
 
Three months ended
August 31,
 
Six months ended
August 31,
 
 
2017
 
2016
 
2017
 
2016
OTHER DATA:
 
 
 
 
 
 
 
 
  Station operating income (See below)
 
$
9,121

 
$
11,980

 
$
18,204

 
$
25,330

  Cash (refund from) paid for income taxes, net
 
(172
)
 
(4
)
 
(19
)
 
112

  Cash paid for interest
 
4,922

 
4,077

 
8,321

 
7,943

  Capital expenditures
 
441

 
309

 
838

 
711

 
 
 
 
 
 
 
 
 
 Noncash compensation by segment:
 
 
 
 
 
 
 
 
           Radio
 
$
153

 
$
133

 
$
278

 
$
400

           Publishing
 
1

 
45

 
3

 
99

           Emerging Technologies
 
23

 
19

 
45

 
35

           Corporate
 
530

 
463

 
1,070

 
982

                  Total
 
$
707

 
$
660

 
$
1,396

 
$
1,516

 
 
 
 
 
 
 
 
 
COMPUTATION OF STATION OPERATING INCOME:
 
 
 
 
 
 
 
 
  Operating income
 
$
82,219

 
$
4,935

 
$
87,432

 
$
13,572

  Plus: Depreciation and amortization
 
881

 
1,282

 
1,859

 
2,614

  Plus: Corporate expenses
 
2,538

 
2,453

 
5,281

 
5,497

  Plus: Station noncash compensation
 
177

 
197

 
326

 
534

  Plus: Impairment loss on intangible assets
 
—

 
2,988

 
—

 
2,988

  Less: Gain on sale of assets, net of disposition costs
 
(76,706
)
 
—

 
(76,706
)
 
—

  Plus: Loss on disposal of property and equipment
 
12

 
125

 
12

 
125

  Station operating income
 
$
9,121

 
$
11,980

 
$
18,204

 
$
25,330

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET INFORMATION:
 
August 31, 2017
 
February 28, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Cash and Cash Equivalents
 
$
4,718

 
$
11,349

 
 
 
 
Credit Agreement Debt
 
$
79,421

 
$
152,245

 
 
 
 
98.7FM Nonrecourse Debt
 
$
57,008

 
$
59,958

 
 
 
 
Other Nonrecourse Debt
 
$
9,868

 
$
8,807

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



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