Generated Monthly Sequential Revenue
Improvements Every Month Since April with Third Quarter Business on
Books Already 30% Greater than Second Quarter Revenue
Entercom Communications Corp. (NYSE: ETM) today reported
financial results for the quarter ended June 30, 2020.
Second Quarter Summary
- Reflecting the impact of the COVID-19 pandemic on the economy
at large, the broadcasting sector and Entercom’s business, net
revenues for the quarter were $175.9 million, down 54%, compared to
$380.7 million in the second quarter of 2019
- Spot revenue declined 65% on a year-over-year basis while
digital revenue rose 19%
- Reflecting the Company’s cost management initiatives
implemented to address the pandemic and lower levels of advertising
spending, station expenses for the quarter declined 32% to $188.9
million, compared to $277.9 million in the second quarter of 2019
while corporate expenses for the quarter declined 45% to $8.4
million, compared to $15.2 million in the second quarter of
2019
- Operating loss for the quarter was $45.3 million, which
included a non-cash impairment charge of $4.2 million, compared to
operating income of $64.8 million in the second quarter of 2019.
Adjusted EBITDA for the quarter was a loss of $20.0 million,
compared to income of $87.6 million in the second quarter of
2019
- Net loss per diluted share for the quarter was $0.40, compared
to net income of $0.19 per diluted share in the second quarter of
2019
- Adjusted net loss per diluted share for the quarter was $0.28,
compared to adjusted net income of $0.26 per diluted share in the
second quarter of 2019
David J. Field, President and Chief Executive Officer, stated:
“While Entercom generated significant revenue and EBITDA growth
prior to the pandemic, second quarter results reflect the impact of
the national economic challenges that quickly emerged as many
advertisers closed businesses and significantly reduced their ad
spend. Given our national leadership position in sports, second
quarter top-line results were also significantly impacted by the
cancellation of virtually all scheduled sporting events during the
quarter. Excluding the impact of cancelled sports play-by-play,
second quarter revenues declined 47%. However, after bottoming out
in April, we have achieved significant sequential improvement every
month through the Summer with third quarter business on books
already 30% greater than where the second quarter finished.”
“The pandemic challenges accelerated our on-going transformation
initiatives with a heightened focus on enhancing our business
model, accelerating our growth opportunities, more fully
integrating our powerful product offerings, and improving our
service to both listeners and customers. In this regard, we
implemented a range of company-wide initiatives, which lowered
second quarter total cash operating expense by approximately $97
million, which exceeded our budget. In addition, we secured our
strong liquidity position through an amendment to our credit
facility and ended the second quarter with $208 million of cash, up
from $189 million at the end of March.”
“Looking ahead, as the country’s #1 creator of original, premium
audio content with robust data, analytics and attribution
capabilities, scaled audience reach and a leadership position in
virtually every segment of the dynamic and growing audio market,
including broadcasting, podcasting, digital, events, network,
sports and news, Entercom is strategically well-positioned for
future growth and performance. Improving revenue trends combined
with enhancements to our business model and active management of
our balance sheet will enable Entercom to emerge as an even
stronger company and build meaningful shareholder value. I want to
thank our team for their resilience, dedication, and exceptional
work as they have gone above and beyond to serve our listeners,
advertisers and communities under the most challenging of
circumstances over the past several months.”
Additional Information
In July, the Company amended the financial maintenance covenant
and other provisions under its credit agreement. Among other
things, the amendment provides for a covenant testing holiday for
the quarters ending September 30, 2020 and December 31, 2020.
Testing of its financial maintenance covenant will resume on March
31, 2021 with the Company using fixed amounts for Consolidated
EBITDA for the quarters ending June 30, 2020, September 30, 2020
and December 31, 2020. Those amounts represent the amounts reported
to the Company’s lenders for the corresponding quarters in
2019.
As of June 30, 2020, the Company had $1,000 million of senior
debt under its credit facilities outstanding, $425 million in
second-lien notes and $400 million in senior notes (the amounts of
senior debt and senior notes both exclude unamortized premium). At
June 30, 2020, the Company had $208 million in cash.
Earnings Conference Call and Company
Information
Entercom will hold a conference call and simultaneous webcast
regarding the quarterly earnings release on Friday, August 7, 2020,
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).
Due to COVID-19, there may be a delay in
joining the call, and so participants should consider dialing in 15
minutes early to ensure access to the entire call.
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) 562-7244. 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, restructuring and integration costs, other
expenses related to the refinancing; 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, restructuring and integration
costs, preferred stock dividends; COVID-19 related expenses,
non-recurring expenses otherwise included in corporate or station
expenses, 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; restructuring and integration costs, COVID-19
related expenses, other income and non-recurring expenses otherwise
included in corporate or station expenses; 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, and Net Capital
Expenditures.
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, restructuring and integration costs, COVID-19
related expenses, and non-recurring expenses otherwise included in
corporate or station expenses; (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 audio and
entertainment company engaging over 170 million consumers each
month through its iconic broadcast brands, expansive digital
platform, premium podcast network and live events and experiences.
With presence in every major U.S. market, and accessible on every
device, Entercom delivers the industry’s most compelling live and
on-demand content and experiences from voices and influencers its
communities trust and love. The company’s robust portfolio of
assets and integrated solutions offer advertisers today’s most
engaged audiences through targeted reach, brand amplification and
local activation—all at national scale. Entercom is the unrivaled
leader in local radio sports and news and the #1 creator of live,
original local audio content in the U.S. Learn more at
www.entercom.com, Facebook and Twitter (@Entercom).
ENTERCOM
COMMUNICATIONS CORP.
FINANCIAL
DATA
(amounts in
thousands, except per share data)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
STATEMENTS OF
OPERATIONS
Net Revenues
$
175,868
$
380,665
$
472,898
$
689,670
Station Expenses
188,946
277,927
438,496
525,497
Station Expense - Non-Cash
Compensation
527
1,243
1,028
2,658
Corporate Expenses
8,359
15,185
24,318
33,963
Corporate Expenses - Non-Cash
Compensation
1,917
2,130
3,195
4,287
Depreciation And Amortization
12,620
10,964
25,118
22,069
Time Brokerage Agreement Expense
(Income)
-
53
-
93
Merger And Acquisition Costs
61
33
61
42
Impairment Loss
4,157
-
5,207
-
Restructuring Charges
4,895
3,362
9,104
4,376
Integration Costs
(132)
1,456
490
2,591
Other Expenses Related To Refinancing
-
1,864
-
1,864
Net (Gain) Loss On Sale Or Disposition of
Assets
(228)
1,686
(228)
(2,914)
Total Operating Expenses
221,122
315,903
506,789
594,526
Operating Income
(45,254)
64,762
(33,891)
95,144
Net Interest Expense
21,642
24,944
45,263
50,164
Loss on Early Extinguishment of Debt
-
1,781
-
1,781
Income (Loss) Before Income Taxes
(66,896)
38,037
(79,154)
43,199
Income Taxes (Benefit)
(13,085)
12,045
(16,205)
14,083
Net Income (Loss)
$
(53,811)
$
25,992
$
(62,949)
$
29,116
Net Income (Loss) Per Share - Basic
$
(0.40)
$
0.19
$
(0.47)
$
0.21
Net Income (Loss) Per Share - Diluted
$
(0.40)
$
0.19
$
(0.47)
$
0.21
Dividends Declared And Paid Per Common
Share
$
0.00
$
0.09
$
0.02
$
0.18
Weighted Common Shares Outstanding -
Basic
134,805
138,760
134,786
138,685
Weighted Common Shares Outstanding -
Diluted
134,805
139,074
134,786
139,222
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
Net Capital Expenditures
$
6,349
$
16,900
$
15,248
$
37,410
Adjusted Income Taxes Paid
$
-
$
7,764
$
1,297
$
8,461
Cash Dividends On Common Stock Declared
And Paid
$
-
$
12,487
$
2,692
$
24,917
SELECTED BALANCE
SHEET DATA
June 30,
December 31,
2020
2019
Cash and Cash Equivalents
$
208,222
$
20,393
Senior Debt - Term B-1 Loan (Includes
Current Portion)
$
756,750
$
770,000
Senior Debt - Revolver (Includes Current
Portion)
$
243,749
$
117,000
Senior Secured Notes
$
425,000
$
425,000
Senior Notes
$
400,000
$
400,000
Total Shareholders' Equity
$
818,310
$
881,443
OTHER FINANCIAL DATA
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Reconciliation Of
GAAP Operating Income To Station Operating Income
Operating Income
$
(45,254)
$
64,762
$
(33,891)
$
95,144
Corporate Expenses
8,359
15,185
24,318
33,963
Corporate Expenses - Non-Cash
Compensation
1,917
2,130
3,195
4,287
Station Expenses - Non-Cash
Compensation
527
1,243
1,028
2,658
Depreciation And Amortization
12,620
10,964
25,118
22,069
Merger And Acquisition Costs
61
33
61
42
Restructuring Charges
4,895
3,362
9,104
4,376
Impairment Loss
4,157
-
5,207
-
Integration Costs
(132)
1,456
490
2,591
Other Expenses Related To Refinancing
-
1,864
-
1,864
Net Time Brokerage Agreement Expense
(Income)
-
53
-
93
Net Gain (Loss) On Sale Or Disposition of
Assets
(228)
1,686
(228)
(2,914)
Station Operating Income
$
(13,078)
$
102,738
$
34,402
$
164,173
Reconciliation Of
GAAP Net Income (Loss) To Adjusted EBITDA
Net (Income) Loss
$
(53,811)
$
25,992
$
(62,949)
$
29,116
Income Taxes (Benefit)
(13,085)
12,045
(16,205)
14,083
Net Interest Expense
21,642
24,944
45,263
50,164
Corporate Expenses - Non-Cash
Compensation
1,917
2,130
3,195
4,287
Station Expenses - Non-Cash
Compensation
527
1,243
1,028
2,658
Depreciation And Amortization
12,620
10,964
25,118
22,069
Time Brokerage Agreement Expense
(Income)
-
53
-
93
Merger And Acquisition Costs
61
33
61
42
Restructuring Charges
4,895
3,362
9,104
4,376
Integration Costs
(132)
1,456
490
2,591
COVID-19 Related Expenses
5,411
-
8,411
-
Non-Recurring (Recoveries) Otherwise
Included in Corporate Expenses
(4,000)
-
(4,000)
-
Impairment Loss
4,157
-
5,207
-
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
(228)
1,686
(228)
(2,914)
Adjusted EBITDA
$
(20,026)
$
87,553
$
14,495
$
130,210
Reconciliation of
GAAP Net Income (Loss) To Adjusted Free Cash Flow
Net Income (Loss)
$
(53,811)
$
25,992
$
(62,949)
$
29,116
Depreciation And Amortization
12,620
10,964
25,118
22,069
Deferred Financing Costs Included In
Interest Expense
998
671
1,943
1,472
Amortization Debt Premium Included In
Interest Expense
(849)
(855)
(1,698)
(1,570)
Non-Cash Compensation Expense
2,444
3,373
4,223
6,945
Merger And Acquisition Costs
61
33
61
42
Integration Costs
(132)
1,456
490
2,591
Restructuring Charges
4,895
3,362
9,104
4,376
COVID-19 Related Expenses
5,411
-
8,411
-
Non-Recurring (Recoveries) Otherwise
Included in Corporate Expenses
(4,000)
-
(4,000)
-
Impairment Loss
4,157
-
5,207
-
Net (Gain) Loss On Sale Or Disposition of
Assets
(228)
1,686
(228)
(2,914)
Other Expenses Related To Refinancing
-
1,864
-
1,864
Loss On Early Extinguishment Of Debt
-
1,781
-
1,781
Income Taxes (Benefit)
(13,085)
12,045
(16,205)
14,083
Net Capital Expenditures, Including
Amortizable Intangibles
(6,349)
(16,900)
(15,248)
(37,410)
Adjusted Income Taxes Paid
-
(7,764)
(1,297)
(8,461)
Adjusted Free Cash Flow
$
(47,868)
$
37,708
$
(47,068)
$
33,984
Reconciliation Of
Capital Expenditures, Including Amortizable
Intangibles, To Net Capital
Expenditures
Capital Expenditures, Including
Amortizable Intangibles
$
(6,349)
$
(20,203)
$
(16,093)
$
(40,713)
Reimbursed Tenant Improvement
Allowance
-
3,303
845
3,303
Net Capital Expenditures
$
(6,349)
$
(16,900)
$
(15,248)
$
(37,410)
Reconciliation Of
Income Taxes Paid To Adjusted
Income Taxes Paid
Income Taxes Paid
$
-
$
(12,756)
$
(1,297)
$
(14,546)
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
-
4,992
-
5,191
Adjusted Income Taxes Paid
$
-
$
(7,764)
$
(1,297)
$
(8,461)
Reconciliation of
GAAP Net Income (Loss) To Adjusted Net Income
Net Income (Loss)
$
(53,811)
$
25,992
$
(62,949)
$
29,116
Income Taxes (Benefit)
(13,085)
12,045
(16,205)
14,083
Merger And Acquisition Costs
61
33
61
42
COVID-19 Related Expenses
5,411
-
8,411
-
Non-Recurring (Recoveries) Otherwise
Included in Corporate Expenses
(4,000)
-
(4,000)
-
Other Expenses Related To Refinancing
-
1,864
-
1,864
Impairment Loss
4,157
-
5,207
-
Integration Costs
(132)
1,456
490
2,591
Restructuring Charges
4,895
3,362
9,104
4,376
Loss On Early Extinguishment Of Debt
-
1,781
-
1,781
Net (Gain) Loss On Sale Or Disposition of
Assets
(228)
1,686
(228)
(2,914)
Non-Cash Compensation Expense
2,444
3,373
4,223
6,945
Adjusted Net Income Before Income
Taxes
(54,288)
51,592
(55,886)
57,884
Income Taxes
(16,286)
15,478
(16,766)
17,365
Adjusted Net Income
$
(38,002)
$
36,114
$
(39,120)
$
40,519
Weighted Average
Diluted Shares Outstanding For Purposes Of Computing Adjusted Net Income Per Share -
Diluted
Weighted Common Shares Outstanding -
Diluted As Reported
134,805
139,074
134,786
139,222
Adjusted Net Income (Loss) Per Share -
Diluted
$
(0.28)
$
0.26
$
(0.29)
$
0.29
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200807005032/en/
Joseph Jaffoni, Jennifer Neuman, Norberto Aja
JCIR (212) 835-8500 etm@jcir.com
Entercom Communications (NYSE:ETM)
Historical Stock Chart
From Mar 2024 to Apr 2024
Entercom Communications (NYSE:ETM)
Historical Stock Chart
From Apr 2023 to Apr 2024