EMMIS COMMUNICATIONS CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 9, 2019

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For Immediate Release
Thursday, January 10, 2019
Contact: Ryan Hornaday, EVP/CFO & Treasurer
rhornaday@emmis.com
317.266.0100
Emmis Announces Third Quarter Earnings
Outperforms markets both quarter and year-to-date

Indianapolis...Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its third fiscal quarter ending November 30, 2018.

Emmis’ radio net revenues for the third fiscal quarter were $28.7 million, down from $34.0 million in the prior year. Sales of radio stations (KPWR in LA in August 2017 and four radio stations in St. Louis on April 30, 2018) make Emmis’ reported results not comparable year-over-year.
Pro forma for all radio station sales, Emmis’ third quarter radio revenues, as reported to Miller Kaplan, which excludes barter and certain other revenues, were up 5% in markets that were up 2%.

“With this quarter’s strong performance, Emmis is now outperforming its markets through the first nine months of this fiscal year- quite an achievement,” said Emmis Chairman and CEO Jeff Smulyan. “Political revenues certainly helped, but we also saw growth in our core advertising categories, all of which contributed to Emmis having its strongest quarter in four years. New York and Indianapolis both outperformed their markets and continue to produce strong ratings, which should help sustain Emmis’ revenue growth. That certainly appears to be the case in January and February, where both months are pacing up mid-to-high single digits.”

A conference call regarding earnings will be hosted today at 9 a.m. Eastern today by dialing 1-517-623-4891 with passcode Emmis.  Questions may be submitted via email to ir@emmis.com. A digital playback of the call will be available until Thursday, January 17 by dialing 203-369-1930.

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.

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.





About Emmis Communications
Emmis Communications Corporation (Nasdaq: EMMS) owns 11 FM and 3 AM radio stations in New York, Austin (Emmis has a 50.1% controlling interest in Emmis’ 6 radio stations located there) and Indianapolis. Emmis owns a controlling interest in Digonex, which provides dynamic pricing solutions across multiple industries, as well as Indianapolis Monthly magazine. 


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 media and technologies;
•
loss of key personnel;
•
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;
•
fluctuations in the market price of publicly traded or other securities;
•
new or changing regulations of the Federal Communications Commission or other governmental agencies;
•
enforcement of rules and regulations of governmental and other entities to which the Company is subject;
•
changes in radio audience measurement methodologies;
•
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








EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited, amounts in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
Three months ended
 November 30,
 
Nine months ended
 November 30,
 
 
 
 
 
 
 
 
 
 
 
2018
 
2017
 
2018
 
2017
OPERATING DATA:
 
 
 
 
 
 
 
 
  Net revenues:
 
 
 
 
 
 
 
 
    Radio
 
$
28,728

 
$
33,980

 
$
85,843

 
$
114,450

    Publishing
 
1,177

 
1,129

 
3,347

 
3,119

    Emerging Technologies
 
418

 
236

 
1,195

 
788

      Total net revenues
 
30,323

 
35,345

 
90,385

 
118,357

Station operating expenses excluding depreciation and amortization expense:
 
 
 
 
 
 
 
 
    Radio
 
19,015

 
23,933

 
59,368

 
79,948

    Publishing
 
1,176

 
1,131

 
3,384

 
3,590

    Emerging Technologies
 
3,780

 
2,922

 
8,753

 
9,582

Total station operating expenses excluding depreciation and amortization expense
 
23,971

 
27,986

 
71,505

 
93,120

Corporate expenses excluding depreciation and amortization expense
 
2,297

 
2,500

 
7,607

 
7,781

  Depreciation and amortization
 
806

 
880

 
2,384

 
2,739

  Loss (gain) on sale of assets, net of disposition costs
 
235

 
46

 
(31,817
)
 
(76,660
)
  Loss on disposal of property and equipment
 
57

 
1

 
57

 
13

  Operating income
 
2,957

 
3,932

 
40,649

 
91,364

  Interest expense
 
(1,546
)
 
(3,000
)
 
(5,902
)
 
(12,214
)
  Loss on debt extinguishment
 
—

 
(139
)
 
(771
)
 
(2,662
)
  Other income, net
 
40

 
10

 
92

 
24

  Income before income taxes
 
1,451

 
803

 
34,068

 
76,512

  (Benefit) provision for income taxes
 
(98
)
 
371

 
7,848

 
4,743

  Consolidated net income
 
1,549

 
432

 
26,220

 
71,769

  Net income attributable to noncontrolling interests
 
837

 
711

 
2,396

 
2,358

  Net income (loss) attributable to the Company
 
$
712

 
$
(279
)
 
$
23,824

 
$
69,411

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     Basic net income (loss) per common share
 
$
0.06

 
$
(0.02
)
 
$
1.90

 
$
5.63

     Diluted net income (loss) per common share
 
$
0.05

 
$
(0.02
)
 
$
1.77

 
$
5.53

 
 
 
 
 
 
 
 
 
     Basic weighted average shares outstanding
 
12,609

 
12,347

 
12,565

 
12,321

     Diluted weighted average shares outstanding
 
13,425

 
12,347

 
13,486

 
12,554

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
 
 
 
 
 
 
 
 
Three months ended
 November 30,
 
Nine months ended
 November 30,
 
 
 
 
 
 
 
 
 
OTHER DATA:
 
 
 
 
 
 
 
 
  Station operating income (See below)
 
$
6,421

 
$
7,453

 
$
19,092

 
$
25,657

  Cash paid for (refund from) income taxes, net
 
(816
)
 
2,197

 
(467
)
 
2,178

  Cash paid for interest
 
1,184

 
2,237

 
4,464

 
10,558

  Capital expenditures
 
51

 
353

 
155

 
1,191

 
 
 
 
 
 
 
 
 
 Noncash compensation by segment:
 
 
 
 
 
 
 
 
           Radio
 
$
47

 
$
68

 
$
142

 
$
346

           Publishing
 
—

 
3

 
2

 
6

           Emerging Technologies
 
22

 
23

 
68

 
68

           Corporate
 
318

 
526

 
1,076

 
1,596

                  Total
 
$
387

 
$
620

 
$
1,288

 
$
2,016

 
 
 
 
 
 
 
 
 
COMPUTATION OF STATION OPERATING INCOME:
 
 
 
 
 
 
 
 
  Operating income
 
$
2,957

 
$
3,932

 
$
40,649

 
$
91,364

  Plus: Depreciation and amortization
 
806

 
880

 
2,384

 
2,739

  Plus: Corporate expenses
 
2,297

 
2,500

 
7,607

 
7,781

  Plus: Station noncash compensation
 
69

 
94

 
212

 
420

  Less: Loss (gain) on sale of assets, net of disposition costs
 
235

 
46

 
(31,817
)
 
(76,660
)
  Plus: Loss on disposal of property and equipment
 
57

 
1

 
57

 
13

  Station operating income
 
$
6,421

 
$
7,453

 
$
19,092

 
$
25,657

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET INFORMATION:
 
November 30, 2018
 
February 28, 2018
 
 
 
 
Total Cash and Cash Equivalents
 
$
8,616

 
$
4,107

 
 
 
 
Credit Agreement Debt
 
$
28,000

 
$
78,451

 
 
 
 
98.7FM Nonrecourse Debt
 
$
49,020

 
$
53,919

 
 
 
 
Other Nonrecourse Debt
 
$
10,054

 
$
9,992

 
 
 
 



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