Adjusted EBITDA Increases 13% and Adjusted
Net Income Per Share Increases 23%
Entercom Communications Corp. (NYSE: ETM) today reported
financial results for the quarter ended September 30, 2019.
Third Quarter Highlights
- Net revenues for the quarter were $386.1 million, up 2.0%
compared to $378.5 million in the third quarter of 2018
- Operating income for the quarter was $79.5 million, compared to
$78.7 million in the third quarter of 2018
- Adjusted EBITDA for the quarter was $98.0 million, up 13%
compared to $86.7 million in the third quarter of 2018
- Net income per diluted share for the quarter was $0.28,
compared to $0.26 per diluted share in the third quarter of
2018
- Adjusted net income per diluted share for the quarter was
$0.32, up 23% compared to $0.26 per diluted share in the third
quarter of 2018
“I am pleased to report that Entercom delivered strong organic
growth in the third quarter with Adjusted EBITDA up 13% and
Adjusted Net Income Per Share up 23%. Revenues increased 2% (just
under 3% ex-political) driven by digital, national and network,”
stated David Field, Chairman, President and Chief Executive
Officer, Entercom. “In October, we announced the launch of DVR-like
functionality for live radio on our RADIO.COM app, becoming the
first company to offer that important product feature. This new
feature and our recent acquisitions of podcasters Cadence 13 and
Pineapple Street Studios highlight the multiple ways we are working
to enhance our product line and grow our relationships with our
listeners and customers.”
Additional Information
In October, the Company completed its acquisition of leading
podcaster Cadence 13, Inc. (“Cadence 13”) by purchasing the
remaining shares in Cadence 13 that it did not already own for
$24.3 million in cash. The Company initially acquired a 45%
interest in Cadence 13 in July 2017 for $9.7 million. The total
investment by Entercom to acquire Cadence 13, including both its
initial investment and the October 2019 transaction, was $34
million.
As of September 30, 2019, the Company had outstanding $1.0
billion 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 $45 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 Friday November 8, 2019
at 10:00 AM Eastern Time. The public may access the conference call
by dialing Toll Free: (888) 889-0278 and Toll: (773) 799-3659,
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) 685-0912. 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
the 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
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
STATEMENTS OF
OPERATIONS
Net Revenues
$
386,141
$
378,508
$
1,075,811
$
1,051,192
Station Expenses
272,005
277,998
797,502
805,919
Station Expense - Non-Cash
Compensation
1,107
1,653
3,765
5,295
Corporate Expenses
17,178
13,781
51,141
47,472
Corporate Expenses - Non-Cash
Compensation
2,234
2,116
6,521
6,126
Depreciation And Amortization
11,183
10,608
33,252
29,745
Time Brokerage Agreement Expense
(Income)
13
(150
)
106
(1,242
)
Merger And Acquisition Costs
434
697
476
2,768
Impairment Loss
-
-
-
28,988
Restructuring Charges
1,577
852
5,953
3,019
Integration Costs
689
2,761
3,280
21,984
Other Expenses Related To Refinancing
-
-
1,864
-
Net (Gain) Loss On Sale Or Disposition of
Assets
231
(10,541
)
(2,683
)
(10,856
)
Total Operating Expenses
306,651
299,775
901,177
939,218
Operating Income
79,490
78,733
174,634
111,974
Net Interest Expense
25,256
25,923
75,420
75,033
Loss On Early Extinguishment Of Debt
-
-
1,781
-
Income (Loss) Before Income Taxes
54,234
52,810
97,433
36,941
Income Taxes (Benefit)
16,026
16,220
30,110
12,960
Net Income (Loss) Available To The Company
- Continuing Operations
38,208
36,590
67,323
23,981
Income From Discontinued Operations, Net
Of Income Taxes
-
358
-
1,530
Net Income (Loss) Available To Common
Shareholders
$
38,208
$
36,948
$
67,323
$
25,511
Net Income (Loss) From Continuing
Operations Available To Common Shareholders – Basic
$
0.28
$
0.26
$
0.49
$
0.17
Net Income (Loss) From Continuing
Operations Available To Common Shareholders – Diluted
$
0.28
$
0.26
$
0.49
$
0.17
Dividends Declared And Paid Per Common
Share
$
0.02
$
0.09
$
0.20
$
0.27
Weighted Common Shares Outstanding –
Basic
136,449
138,740
137,944
138,901
Weighted Common Shares Outstanding –
Diluted
136,453
139,103
138,295
139,685
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
Net Capital Expenditures
$
20,658
$
5,680
$
58,067
$
23,621
Adjusted Income Taxes Paid
$
-
$
-
$
8,461
$
18,187
Cash Dividends On Common Stock Declared
And Paid
$
2,677
$
12,487
$
27,594
$
37,403
SELECTED BALANCE
SHEET DATA
September 30,
December 31,
2019
2018
Cash and Cash Equivalents
$
45,335
$
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)
$
134,000
$
180,000
Senior Secured Notes
$
325,000
$
-
Senior Notes
$
400,000
$
400,000
Total Shareholders' Equity
$
1,367,870
$
1,334,260
OTHER FINANCIAL DATA
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Reconciliation Of
GAAP Operating Income To Station Operating Income
Operating Income
$
79,490
$
78,733
$
174,634
$
111,974
Corporate Expenses
17,178
13,781
51,141
47,472
Corporate Expenses - Non-Cash
Compensation
2,234
2,116
6,521
6,126
Station Expenses - Non-Cash
Compensation
1,107
1,653
3,765
5,295
Depreciation And Amortization
11,183
10,608
33,252
29,745
Merger And Acquisition Costs
434
697
476
2,768
Restructuring Charges
1,577
852
5,953
3,019
Impairment Loss
-
-
-
28,988
Other Expenses Related To Refinancing
-
-
1,864
-
Integration Costs
689
2,761
3,280
21,984
Net Time Brokerage Agreement Expense
(Income)
13
(150
)
106
(1,242
)
Net Gain (Loss) On Sale Or Disposition of
Assets
231
(10,541
)
(2,683
)
(10,856
)
Station Operating Income
$
114,136
$
100,510
$
278,309
$
245,273
Reconciliation Of
GAAP Net Income (Loss) Available To Common Shareholders To Adjusted
EBITDA
Net (Income) Loss Available To Common
Shareholders
$
38,208
$
36,948
$
67,323
$
25,511
Income Taxes (Benefit)
16,026
16,220
30,110
12,960
Income From Discontinued Operations, Net
Of Income Taxes
-
(358
)
-
(1,530
)
Net Interest Expense
25,256
25,923
75,420
75,033
Corporate Expenses - Non-Cash
Compensation
2,234
2,116
6,521
6,126
Station Expenses - Non-Cash
Compensation
1,107
1,653
3,765
5,295
Depreciation And Amortization
11,183
10,608
33,252
29,745
Time Brokerage Agreement Expense
(Income)
13
(150
)
106
(1,242
)
Merger And Acquisition Costs
434
697
476
2,768
Restructuring Charges
1,577
852
5,953
3,019
Integration Costs
689
2,761
3,280
21,984
Transition Costs And Non-Recurring
Expenses Otherwise Included In Corporate Expenses
1,000
-
1,000
1,100
Impairment Loss
-
-
-
28,988
Other Expenses Related To Refinancing
-
-
1,864
-
Loss On Early Extinguishment Of Debt
-
-
1,781
-
Net Gain (Loss) On Sale Or Disposition of
Assets
231
(10,541
)
(2,683
)
(10,856
)
Adjusted EBITDA
$
97,958
$
86,729
$
228,168
$
198,901
Reconciliation Of
GAAP Net Income (Loss) Available To Common Shareholders To Adjusted
Free Cash Flow
Net Income (Loss) Available To Common
Shareholders
$
38,208
$
36,948
$
67,323
$
25,511
Depreciation And Amortization
11,183
10,608
33,252
29,745
Deferred Financing Costs Included In
Interest Expense
755
798
2,227
2,389
Amortization Debt Premium Included In
Interest Expense
(678
)
(715
)
(2,248
)
(2,147
)
Non-Cash Compensation Expense
3,341
3,769
10,286
11,421
Merger And Acquisition Costs
434
697
476
2,768
Integration Costs
689
2,761
3,280
21,984
Restructuring Charges
1,577
852
5,953
3,019
Transition Costs And Non-Recurring
Expenses Otherwise Included In Corporate Expenses
1,000
-
1,000
1,100
Impairment Loss
-
-
-
28,988
Net (Gain) Loss On Sale Or Disposition of
Assets
231
(10,541
)
(2,683
)
(10,856
)
Other Expenses Related To Refinancing
-
-
1,864
-
Loss On Early Extinguishment Of Debt
-
-
1,781
-
Income Taxes (Benefit)
16,026
16,220
30,110
12,960
Income Taxes Otherwise Included In Income
From Discontinued Operations
-
286
-
709
Net Capital Expenditures, Including
Amortizable Intangibles
(20,658
)
(5,680
)
(58,067
)
(23,621
)
Adjusted Income Taxes Paid
-
-
(8,461
)
(18,187
)
Adjusted Free Cash Flow
$
52,108
$
56,003
$
86,093
$
85,783
Reconciliation Of
Capital Expenditures, Including Amortizable Intangibles, To Net
Capital Expenditures
Capital Expenditures, Including
Amortizable Intangibles
$
(22,862
)
$
(6,969
)
$
(63,575
)
$
(25,955
)
Reimbursed Tenant Improvement
Allowance
2,204
1,289
5,508
2,334
Net Capital Expenditures
$
(20,658
)
$
(5,680
)
$
(58,067
)
$
(23,621
)
Reconciliation Of
Income Taxes Paid To Adjusted Income Taxes Paid
Income Taxes Paid
$
(3,935
)
$
-
$
(18,481
)
$
(18,836
)
Income Taxes Paid Related to Gain/Loss On
Sale Or Exchange Of Radio Station Assets
-
-
894
649
Income Taxes Paid Related to Gain/Loss On
Sale Of Redundant Properties
3,935
-
9,126
-
Adjusted Income Taxes Paid
$
-
$
-
$
(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
$
38,208
$
36,948
$
67,323
$
25,511
Income Taxes (Benefit)
16,026
16,220
30,110
12,960
Income Taxes Otherwise Included In Income
From Discontinued Operations
-
286
-
709
Merger And Acquisition Costs
434
697
476
2,768
Transition Costs And Non-Recurring
Expenses Otherwise Included In Corporate Expenses
1,000
-
1,000
1,100
Other Expenses Related To Refinancing
-
-
1,864
-
Impairment Loss
-
-
-
28,988
Integration Costs
689
2,761
3,280
21,984
Restructuring Charges
1,577
852
5,953
3,019
Loss On Early Extinguishment Of Debt
-
-
1,781
-
Net (Gain) Loss On Sale Or Disposition of
Assets
231
(10,541
)
(2,683
)
(10,856
)
Non-Cash Compensation Expense
3,341
3,769
10,286
11,421
Adjusted Income Before Income Taxes
61,506
50,992
119,390
97,604
Income Taxes
18,452
15,298
35,817
29,281
Adjusted Net Income
$
43,054
$
35,694
$
83,573
$
68,323
Weighted Average
Diluted Shares Outstanding For Purposes Of Computing Adjusted Net
Income Per Share – Diluted
Weighted Common Shares Outstanding -
Diluted As Reported
136,453
139,103
138,295
139,685
Diluted Shares Excluded When Reporting A
Net Loss
-
-
-
-
136,453
139,103
138,295
139,685
Adjusted Net Income (Loss) Per Share –
Diluted
$
0.32
$
0.26
$
0.60
$
0.49
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191108005073/en/
Joseph Jaffoni, Jennifer Neuman, Norberto Aja
JCIR (212) 835-8500 etm@jcir.com
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