Adjusted EBITDA Increases 7%
Entercom Communications Corp. (NYSE: ETM) today
reported financial results for the quarter ended June 30, 2019.
Second Quarter
Highlights
- Net revenues for the quarter were $380.7 million, up 2.3%
compared to $372.1 million in the second quarter of 2018
- Total operating expense for the quarter was $315.9 million,
which included $4.9 million in merger, restructuring and
integration costs and $1.9 million in expense related to the
Company’s issuance of 6.5% senior secured second-lien notes. This
compared to $344.6 million in the second quarter of 2018, which
included $10.9 million in merger, restructuring and integration
costs and a $29.0 million impairment charge.
- Operating income for the quarter was $64.8 million, compared to
$27.6 million in the second quarter of 2018
- Net income per diluted share for the quarter was $0.19,
compared to $0.01 per diluted share in the second quarter of
2018
- Adjusted EBITDA for the quarter was $87.6 million, up 7%
compared to $82.1 million in the second quarter of 2018
David J. Field, President and Chief Executive Officer, stated:
“Second quarter revenues and EBITDA were up 2.3% and 7%,
respectively, driven by strong growth in national, network and
digital, partially offset by declines in political and events. This
morning, we announced the acquisition of Pineapple Street Media,
and an agreement in principle to acquire Cadence13, which combined
will make Entercom one of the country’s three largest podcast
enterprises. We also announced the launch of the RADIO.COM Sports
Digital Network, which will debut later this month with a
compelling lineup of daily radio shows and weekly podcasts
available exclusively on RADIO.COM. These moves highlight a series
of strategic investments that are positioning Entercom to
capitalize on the exciting growth opportunities in the audio space
fueled by rapidly emerging catalysts, including podcasting, smart
speakers, audio search, enhanced analytics and attribution.”
Additional Information
Today, the Company announced it has acquired leading podcast
creator Pineapple Street Media for $18 million. In addition, the
Company announced that it has an agreement in principle with its
podcast partner Cadence13 to acquire the remaining shares in
Cadence13 that it does not already own.
At the end of April, the Company issued $325 million in 6.5%
senior secured second-lien notes due 2027. The Company used 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, the Company amended the financial covenant
in its senior secured credit agreement such that the calculation of
Consolidated Net Secured Leverage Ratio only includes first lien
secured debt.
During the second quarter, the Company executed a $560 million
notional interest rate collar that limits the Company’s exposure to
floating interest rate risk. This collar has a one month LIBOR cap
of 2.75% and a floor of 0.40% and the notional amount declines over
time in line with the Company’s projected debt repayments. As a
result of the issuance of the second-lien notes and executing this
interest rate collar, only about 24% of the Company’s debt was
subject to floating rate risk outside of the collar at the end of
the second quarter.
As of June 30, 2019, the Company had outstanding $976 million of
senior debt under its credit facilities, $325 million in
second-lien notes and $400 million in senior notes (the amounts of
senior debt and senior notes both exclude unamortized premium). In
addition, the Company had $30 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 Wednesday August 7,
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 (800) 925-0258. 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, loss on
early extinguishment of debt, 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.
Net Capital Expenditures consists of capital expenditures,
including amortizable intangibles, adjusted to subtract reimbursed
tenant improvement allowances.
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; (vi) other expenses related to refinancing 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 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, Net Capital Expenditures 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 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
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
STATEMENTS OF
OPERATIONS
Net Revenues
$
380,665
$
372,124
$
689,670
$
672,684
Station Expenses
277,927
274,159
525,497
527,920
Station Expense - Non-Cash
Compensation
1,243
1,680
2,658
3,643
Corporate Expenses
15,185
16,982
33,963
33,691
Corporate Expenses - Non-Cash
Compensation
2,130
2,050
4,287
4,010
Depreciation And Amortization
10,964
10,666
22,069
19,137
Time Brokerage Agreement Expense
(Income)
53
(666
)
93
(1,092
)
Merger And Acquisition Costs
33
687
42
2,071
Impairment Loss
-
28,988
-
28,988
Restructuring Charges
3,362
686
4,376
2,167
Integration Costs
1,456
9,494
2,591
19,223
Other Expenses Related To Refinancing
1,864
-
1,864
-
Net (Gain) Loss On Sale Or Disposition of
Assets
1,686
(154
)
(2,914
)
(315
)
Total Operating Expenses
315,903
344,572
594,526
639,443
Operating Income
64,762
27,552
95,144
33,241
Net Interest Expense
24,944
25,706
50,164
49,110
Loss On Early Extinguishment Of Debt
1,781
-
1,781
-
Income (Loss) Before Income Taxes
38,037
1,846
43,199
(15,869
)
Income Taxes (Benefit)
12,045
249
14,083
(3,260
)
Net Income (Loss) Available To The Company
- Continuing Operations
25,992
1,597
29,116
(12,609
)
Income From Discontinued Operations, Net
Of Income Taxes
-
844
-
1,172
Net Income (Loss) Available To Common
Shareholders
$
25,992
$
2,441
$
29,116
$
(11,437
)
Net Income (Loss) From Continuing
Operations Available To Common Shareholders - Basic
$
0.19
$
0.01
$
0.21
$
(0.09
)
Net Income (Loss) From Continuing
Operations Available To Common Shareholders - Diluted
$
0.19
$
0.01
$
0.21
$
(0.09
)
Dividends Declared And Paid Per Common
Share
$
0.09
$
0.09
$
0.18
$
0.18
Weighted Common Shares Outstanding -
Basic
138,760
138,639
138,685
138,962
Weighted Common Shares Outstanding -
Diluted
139,074
139,263
139,222
138,962
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
Net Capital Expenditures
$
16,900
$
10,950
$
37,410
$
17,941
Adjusted Income Taxes Paid
$
7,764
$
18,142
$
8,461
$
18,187
Cash Dividends On Common Stock Declared
And Paid
$
12,487
$
12,475
$
24,917
$
24,916
SELECTED BALANCE
SHEET DATA
June 30,
December 31,
2019
2018
Cash and Cash Equivalents
$
30,331
$
122,893
Restricted Cash
$
-
$
69,365
Senior Debt - Term B-1 Loan (Includes
Current Portion)
$
866,700
$
1,291,700
Senior Debt - Revolver (Includes Current
Portion)
$
109,000
$
180,000
Senior Secured Notes
$
325,000
$
-
Senior Notes
$
400,000
$
400,000
Total Shareholders' Equity
$
1,347,641
$
1,334,260
OTHER FINANCIAL DATA
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Reconciliation Of
GAAP Operating Income To Station Operating Income
Operating Income
$
64,762
$
27,552
$
95,144
$
33,241
Corporate Expenses
15,185
16,982
33,963
33,691
Corporate Expenses - Non-Cash
Compensation
2,130
2,050
4,287
4,010
Station Expenses - Non-Cash
Compensation
1,243
1,680
2,658
3,643
Depreciation And Amortization
10,964
10,666
22,069
19,137
Merger And Acquisition Costs
33
687
42
2,071
Restructuring Charges
3,362
686
4,376
2,167
Impairment Loss
-
28,988
-
28,988
Integration Costs
1,456
9,494
2,591
19,223
Other Expenses Related To Refinancing
1,864
-
1,864
-
Net Time Brokerage Agreement Expense
(Income)
53
(666
)
93
(1,092
)
Net Gain (Loss) On Sale Or Disposition of
Assets
1,686
(154
)
(2,914
)
(315
)
Station Operating Income
$
102,738
$
97,965
$
164,173
$
144,764
Reconciliation Of
GAAP Net Income (Loss) Available To Common Shareholders To Adjusted
EBITDA
Net (Income) Loss Available To Common
Shareholders
$
25,992
$
2,441
$
29,116
$
(11,437
)
Income Taxes (Benefit)
12,045
249
14,083
(3,260
)
Income From Discontinued Operations, Net
Of Income Taxes
-
(844
)
-
(1,172
)
Net Interest Expense
24,944
25,706
50,164
49,110
Corporate Expenses - Non-Cash
Compensation
2,130
2,050
4,287
4,010
Station Expenses - Non-Cash
Compensation
1,243
1,680
2,658
3,643
Depreciation And Amortization
10,964
10,666
22,069
19,137
Time Brokerage Agreement Expense
(Income)
53
(666
)
93
(1,092
)
Merger And Acquisition Costs
33
687
42
2,071
Restructuring Charges
3,362
686
4,376
2,167
Integration Costs
1,456
9,494
2,591
19,223
Transition Costs And Non-Recurring
Expenses Otherwise Included In Corporate Expenses
-
1,100
-
1,100
Impairment Loss
-
28,988
-
28,988
Other Expenses Related To Refinancing
1,864
-
1,864
-
Loss On Early Extinguishment Of Debt
1,781
-
1,781
-
Net Gain (Loss) On Sale Or Disposition of
Assets
1,686
(154
)
(2,914
)
(315
)
Adjusted EBITDA
$
87,553
$
82,083
$
130,210
$
112,173
Reconciliation Of
GAAP Net Income (Loss) Available To Common Shareholders To Adjusted
Free Cash Flow
Net Income (Loss) Available To Common
Shareholders
$
25,992
$
2,441
$
29,116
$
(11,437
)
Depreciation And Amortization
10,964
10,666
22,069
19,137
Deferred Financing Costs Included In
Interest Expense
671
796
1,472
1,591
Amortization Debt Premium Included In
Interest Expense
(855
)
(716
)
(1,570
)
(1,432
)
Non-Cash Compensation Expense
3,373
3,730
6,945
7,653
Merger And Acquisition Costs
33
688
42
2,071
Integration Costs
1,456
9,494
2,591
19,223
Restructuring Charges
3,362
686
4,376
2,167
Transition Costs And Non-Recurring
Expenses Otherwise Included In Corporate Expenses
-
1,100
-
1,100
Impairment Loss
-
28,988
-
28,988
Net (Gain) Loss On Sale Or Disposition of
Assets
1,686
(154
)
(2,914
)
(315
)
Other Expenses Related To Refinancing
1,864
-
1,864
-
Loss On Early Extinguishment Of Debt
1,781
-
1,781
-
Income Taxes (Benefit)
12,045
249
14,083
(3,260
)
Income Taxes Otherwise Included In Income
From Discontinued Operations
-
337
-
423
Net Capital Expenditures
(16,900
)
(10,950
)
(37,410
)
(17,941
)
Adjusted Income Taxes Paid
(7,764
)
(18,142
)
(8,461
)
(18,187
)
Adjusted Free Cash Flow
$
37,708
$
29,213
$
33,984
$
29,781
Reconciliation Of
Capital Expenditures, Including Amortizable Intangibles, To Net
Capital Expenditures
Capital Expenditures, Including
Amortizable Intangibles
$
(20,203
)
$
(11,995
)
$
(40,713
)
$
(18,986
)
Reimbursed Tenant Improvement
Allowances
3,303
1,045
3,303
1,045
Net Capital Expenditures
$
(16,900
)
$
(10,950
)
$
(37,410
)
$
(17,941
)
Reconciliation Of
Income Taxes Paid To Adjusted Income Taxes Paid
Income Taxes Paid
$
(12,756
)
$
(18,791
)
$
(14,546
)
$
(18,836
)
Income Taxes Paid Related to Gain/Loss On
Sale Or Exchange Of Radio Station Assets
-
649
894
649
Income Taxes Paid Related to Gain/Loss On
Sale Of Redundant Properties
4,992
-
5,191
-
Adjusted Income Taxes Paid
$
(7,764
)
$
(18,142
)
$
(8,461
)
$
(18,187
)
Reconciliation Of
GAAP Net Income (Loss) Available To Common Shareholders To Adjusted
Net Income
Net Income (Loss) Available To Common
Shareholders
$
25,992
$
2,441
$
29,116
$
(11,437
)
Income Taxes (Benefit)
12,045
249
14,083
(3,260
)
Income Taxes Otherwise Included In Income
From Discontinued Operations
-
336
-
423
Merger And Acquisition Costs
33
687
42
2,071
Transition Costs And Non-Recurring
Expenses Otherwise Included In Corporate Expenses
-
1,100
-
1,100
Other Expenses Related To Refinancing
1,864
-
1,864
-
Impairment Loss
-
28,988
-
28,988
Integration Costs
1,456
9,494
2,591
19,223
Restructuring Charges
3,362
686
4,376
2,167
Loss On Early Extinguishment Of Debt
1,781
-
1,781
-
Net (Gain) Loss On Sale Or Disposition of
Assets
1,686
(154
)
(2,914
)
(315
)
Non-Cash Compensation Expense
3,373
3,730
6,945
7,653
Adjusted Income Before Income Taxes
51,592
47,557
57,884
46,613
Income Taxes
15,478
14,267
17,365
13,984
Adjusted Net Income
$
36,114
$
33,290
$
40,519
$
32,629
Weighted Average
Diluted Shares Outstanding For Purposes Of Computing Adjusted Net
Income Per Share - Diluted
Weighted Common Shares Outstanding -
Diluted As Reported
139,074
139,263
139,222
138,962
Diluted Shares Excluded When Reporting A
Net Loss
-
-
-
1,059
139,074
139,263
139,222
140,021
Adjusted Net Income (Loss) Per Share -
Diluted
$
0.26
$
0.24
$
0.29
$
0.23
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190807005162/en/
Joseph Jaffoni, Jennifer Neuman, Norberto Aja JCIR
(212) 835-8500 etm@jcir.com
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