Adjusted EBITDA Increases 42%
Entercom Communications Corp. (NYSE: ETM) today reported
financial results for the quarter ended March 31, 2019.
First Quarter Highlights
- Net revenues for the quarter were
$309.0 million, up 3% compared to $300.6 million in the first
quarter of 2018
- Total operating expense for the quarter
was $278.6 million compared to $294.9 million in the first quarter
of 2018
- Net income per diluted share for the
quarter was $0.02, compared to a net loss per diluted share of
($0.10) in the first quarter of 2018
- Adjusted EBITDA for the quarter was
$42.7 million, up 42% compared to $30.1 million in the first
quarter of 2018
David J. Field, President and Chief Executive Officer, stated:
“I am pleased to report that Entercom delivered another strong
quarter of performance as revenues increased 3% and Adjusted EBITDA
surged 42%. Our transformational investments in new products and
capabilities and the hard work of our team are beginning to pay off
as we capitalize on our scale and the abundant growth opportunities
in Audio. Second quarter revenues are pacing up by more than 4% and
we are excited about our progress across multiple areas of the
business and by the dynamic future ahead.”
Additional Information
In February, the Company announced a definitive agreement to
acquire NASH FM 94.7 in New York City, and two stations in
Springfield, MA from Cumulus Media Inc. (Nasdaq: CMLS) in exchange
for Entercom’s three-station cluster in Indianapolis. The
transaction is immediately accretive to Entercom. Entercom and
Cumulus began programming the respective stations being acquired
under Local Marketing Agreements on March 1, 2019. The
exchange transaction is expected to close in the second quarter of
2019.
During the first quarter, the Company completed the sale of
surplus land, buildings and towers to a third party for $25 million
in cash and used this cash and cash on hand to fully pay off the
$180 million outstanding balance on its revolving credit
facility.
Later today, the Company expects to issue $325 million in 6.50%
senior secured second-lien notes due 2027. The Company plans to use
the proceeds of the issuance, as well as cash on its balance sheet
and borrowings under its revolver, to repay $425 million of its
senior secured Term Loan and to pay fees and expenses related to
the issuance. In addition, later today the Company expects to amend
the financial covenant in its senior secured credit agreement such
that the calculation of Consolidated Secured Net Leverage Ratio
only includes first lien secured debt.
As of March 31, 2019, the Company had outstanding $1,292 million
of senior debt under its credit facilities and $400 million in
senior notes (both amounts exclude unamortized premium from
purchase price accounting). In addition, the Company had $68
million in cash on hand.
Earnings Conference Call and Company
Information
Entercom will hold a conference call and simultaneous webcast
regarding the quarterly earnings release on Tuesday April 30, 2019
at 10:00 AM Eastern Time. The public may access the conference call
by dialing Toll Free: (888) 889-0278 and Toll: (312) 470-7365,
passcode: Entercom (domestic and international callers).
Participants may also listen to a live webcast of the call by
visiting the “Investor Relations” section of Entercom’s website
at www.entercom.com. A replay of the conference call will be
available for one week by dialing (888) 568-0425. A webcast replay
of the conference call will be available beginning six hours after
the call on the Company’s website for a period of two weeks.
Additional information is available on the Company’s website at
www.entercom.com.
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, other expenses related to the refinancing;
non-recurring expenses recognized for restructuring charges or
similar costs, including transition and integration costs; and gain
or loss on sale or disposition of assets.
Adjusted EBITDA consists of net income (loss) available to
common shareholders, adjusted to exclude: income taxes (benefit);
income from discontinued operations, net of income taxes or
benefit; total other income or expense; net interest 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); other expenses related to the refinancing; impairment
loss, merger and acquisition costs, preferred stock dividends;
non-recurring expense recognized for restructuring charges or
similar costs, including transition and integration costs, and gain
or loss on sale or disposition of assets.
Adjusted 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; other income and non-recurring expenses
recognized for restructuring charges or similar costs, including
transition and integration costs; income from discontinued
operations (excluding income taxes or tax benefit); and (ii) less
net interest expense (excluding amortization of deferred financing
costs or debt premium), Adjusted Income Taxes Paid, capital
expenditures and amortizable intangibles.
Adjusted Income Taxes Paid consist of income tax paid, adjusted
to exclude taxes paid related to the gain/loss on sale or exchange
of radio station assets; and taxes paid related to the gain/loss on
sale of redundant property.
Adjusted Net Income (Loss) consists of net income (loss)
available to common shareholders adjusted to exclude: (i) income
taxes (benefit) as reported, including income taxes otherwise
included in income from discontinued operations; (ii) gain/loss on
sale of assets, derivative instruments and investments; (iii)
non-cash compensation expense; (iv) impairment loss; (v) merger and
acquisition costs, and non-recurring expenses recognized for
restructuring charges or similar costs, including transition and
integration costs; and (vi) 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 30%
without discrete items of tax.
Adjusted Net Income (Loss) Per Share - Diluted includes any
dilutive equivalent shares when not anti-dilutive. Convertible
Preferred Stock is treated as if it never converted for the
purposes of Adjusted Net Income (Loss) Per Share - Diluted.
Non-GAAP Financial
Measures
It is important to note that station operating income, station
expense, corporate expense, Adjusted EBITDA, Adjusted Net Income,
Adjusted Net Income (Loss) Per Share – Diluted, Adjusted Free Cash
Flow and Adjusted Income Taxes Paid 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 (Loss) and Adjusted Net
Income (Loss) Per Share - Diluted). The adjustments exclude
gain/loss on sale of assets, derivative instruments, and
investments; non-cash compensation expense, other income,
impairment loss, merger and acquisition costs, other expenses
related to the refinancing, and gain/loss on early extinguishment
of debt and non-recurring expenses recognized for restructuring
charges or similar costs, including transition and integration
costs. For purposes of comparability, income taxes are reflected at
the expected federal and state income tax rate of 30%, without
adjustment for discrete tax adjustments.
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.
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 S-4, 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.
About Entercom Communications Corp.
Entercom Communications Corp. (NYSE: ETM) is a leading American
media and entertainment company reaching and engaging over 170
million people monthly through its premier collection of highly
rated, award winning radio stations, digital platforms and live
events. As one of the country’s two largest radio broadcasters,
Entercom offers integrated marketing solutions and delivers the
power of local connection on a national scale with coverage of
close to 90% of persons 12+ in the top 50 markets. Entercom is the
#1 creator of live, original, local audio content and the nation’s
unrivaled leader in news and sports radio. Learn more about
Philadelphia-based Entercom at www.entercom.com, Facebook and
Twitter (@Entercom).For further information, or to receive future
Entercom Communications news announcements via e-mail, please
contact JCIR at 212/835-8500 or etm@jcir.com.
ENTERCOM
COMMUNICATIONS CORP.
FINANCIAL
DATA
(amounts in
thousands, except per share data)
(unaudited)
Three Months Ended March 31,
2019 2018
STATEMENTS OF
OPERATIONS
Net Revenues $ 309,005 $ 300,560 Station Expenses
247,570 253,767 Station Expense - Non-Cash Compensation 1,415 1,958
Corporate Expenses 18,778 16,714 Corporate Expenses - Non-Cash
Compensation 2,157 1,955 Depreciation And Amortization 11,104 8,471
Time Brokerage Agreement Expense (Income) 40 (426) Merger And
Acquisition Costs 9 1,383 Restructuring Costs 1,014 1,481
Integration Costs 1,135 9,729 Net (Gain) Loss On Sale Or
Disposition of Assets (4,600) (161) Total Operating
Expenses 278,622 294,871 Operating Income
30,383 5,689 Net Interest Expense 25,220
23,404 Income (Loss) Before Income Taxes 5,163
(17,715) Income Tax (Benefit) 2,038 (3,509) Net
Income (Loss) Available To Common Shareholders - Continuing
Operations 3,125 (14,206) Income From Discontinued Operations, Net
Of Income Taxes - 328 Net Income (Loss) Available To
Common Shareholders $ 3,125 $ (13,878)
Net Loss From Continuing Operations
Available To Common Shareholders - Basic & Diluted
$ 0.02 $ (0.10) Dividends Declared And Paid Per Common Share
$ 0.09 $ 0.09 Weighted Common Shares Outstanding - Basic
138,099 138,939 Weighted Common Shares Outstanding -
Diluted 138,523 138,939
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
Capital Expenditures, Including Amortizable Intangibles $ 20,510 $
6,991 Income Taxes Paid $ 1,790 $ 45 Cash Dividends On Common Stock
Declared And Paid $ 12,430 $ 12,441
SELECTED BALANCE
SHEET DATA
March 31, December 31, 2019 2018 Cash
and Cash Equivalents $ 68,266 $ 122,893 Restricted Cash $ - $
69,365 Senior Debt - Term B-1 Loan (Includes Current Portion) $
1,291,700 $ 1,291,700 Senior Debt - Revolver (Includes Current
Portion) $ - $ 180,000 Senior Notes $ 400,000 $ 400,000 Total
Shareholders' Equity $ 1,331,498 $ 1,334,260
OTHER
FINANCIAL DATA Three Months Ended March 31,
2019 2018
Reconciliation Of
GAAP Operating Income To Station Operating Income
Operating Income $ 30,383 $ 5,689 Corporate Expenses 18,778 16,714
Corporate Expenses - Non-Cash Compensation 2,157 1,955 Station
Expenses - Non-Cash Compensation 1,415 1,958 Depreciation And
Amortization 11,104 8,471 Merger And Acquisition Costs 9 1,383
Restructuring Costs 1,014 1,481 Integration Costs 1,135 9,729 Net
Time Brokerage Agreement Expense (Income) 40 (426) Net Gain (Loss)
On Sale Or Disposition of Assets (4,600) (161)
Station Operating Income $ 61,435 $ 46,793
Reconciliation Of
GAAP Net Income (Loss) Available To Common Shareholders To Adjusted
EBITDA
Net Income (Loss) Available To Common Shareholders $ 3,125 $
(13,878) Income Taxes (Benefit) 2,038 (3,509) Income From
Discontinued Operations, Net Of Income Taxes - (328) Net Interest
Expense 25,220 23,404 Corporate Expenses - Non-Cash Compensation
2,157 1,955 Station Expenses - Non-Cash Compensation 1,415 1,958
Depreciation And Amortization 11,104 8,471 Time Brokerage Agreement
Expense (Income) 40 (426) Merger And Acquisition Costs 9 1,383
Restructuring Costs 1,014 1,481 Integration Costs 1,135 9,729 Net
Gain (Loss) On Sale Or Disposition of Assets (4,600)
(161) Adjusted EBITDA $ 42,657 $ 30,079
Reconciliation Of
GAAP Net Income (Loss) Available To Common Shareholders To Adjusted
Free Cash Flow
Net Income (Loss) Available To Common Shareholders $ 3,125 $
(13,878) Depreciation And Amortization 11,104 8,471 Deferred
Financing Costs Included In Interest Expense 801 795 Amortization
Debt Discount Or (Debt Premium) Included In Interest Expense (715)
(716) Non-Cash Compensation Expense 3,572 3,913 Merger And
Acquisition Costs 9 1,383 Integration Costs 1,135 9,729
Restructuring Costs 1,014 1,481 Net (Gain) Loss On Sale Or
Disposition of Assets (4,600) (161) Income Taxes (Benefit) 2,038
(3,509) Income Taxes Otherwise Included In Income From Discontinued
Operations - 86 Capital Expenditures, Including Amortizable
Intangibles (20,510) (6,991) Adjusted Income Taxes Paid
(697) (45) Adjusted Free Cash Flow $ (3,724) $ 558
Reconciliation Of
Income Taxes Paid To Adjusted Income Taxes Paid
Income Taxes Paid $ (1,790) $ (45)
Income Taxes Paid Related to Gain/Loss On
Sale Or Exchange Of Radio Station Assets
894 - Income Taxes Paid Related to Gain/Loss On Sale Of Redundant
Properties 199 - Adjusted Income Taxes Paid $ (697) $
(45)
Reconciliation Of
GAAP Net Income (Loss) Available To Common Shareholders To Adjusted
Net Income (Loss)
Net Income (Loss) Available To Common Shareholders $ 3,125 $
(13,878) Income Taxes (Benefit) 2,038 (3,509)
Income Taxes Otherwise Included In Income
From Discontinued Operations
- 86 Merger And Acquisition Costs 9 1,383 Integration Costs 1,135
9,729 Restructuring Costs 1,014 1,481 Net (Gain) Loss On Sale Or
Disposition of Assets (4,600) (161) Non-Cash Compensation Expense
3,572 3,913 Adjusted Income (Loss) Before Income
Taxes 6,293 (956) Income Taxes (Benefit) 1,888 (287)
Adjusted Net Income (Loss) $ 4,405 $ (669)
Weighted Average
Diluted Shares Outstanding For Purposes Of Computing Adjusted Net
Income Per Share - Diluted
Weighted Common Shares Outstanding - Diluted As Reported 138,523
138,939 Diluted Shares Excluded When Reporting A Net Loss -
- 138,523 138,939 Adjusted Net Income
(Loss) Per Share - Diluted $ 0.03 $ (0.00)
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version on businesswire.com: https://www.businesswire.com/news/home/20190430005231/en/
Joseph Jaffoni, JenniferNeuman, Norberto
AjaJCIR(212) 835-8500etm@jcir.com
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