Golden Cross
6 years ago
Emmis Announces Agreements to Sell its St. Louis Radio Stations for $60 Million
Date : 02/23/2018 @ 8:00AM
Source : PR Newswire (US)
Stock : Emmis Communications Corp. (EMMS)
Quote : 4.4686 0.1787 (4.17%) @ 4:29PM
Emmis Announces Agreements to Sell its St. Louis Radio Stations for $60 Million
Emmis Communications (NASDAQ:EMMS)
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1 Month : From Feb 2018 to Mar 2018
Click Here for more Emmis Communications Charts.
INDIANAPOLIS, Feb. 23, 2018 /PRNewswire/ -- As part of its previously announced agreements in principle to sell its St. Louis stations, Emmis Communications Corporation (Nasdaq: EMMS) announced today that it has entered into definitive agreements to sell its St. Louis stations KSHE (94.7 FM) and The Point (KPNT, 105.7 FM) to Hubbard Radio for $45 million, and St. Louis stations KFTK (FM News Talk 97.1 FM) and NOW (KNOU, 96.3 FM) to Entercom Communications Corp for $15 million. The transactions are subject to FCC approval as well as closing adjustments and prorations.
Local Marketing Agreements (LMAs) of the stations will start March 1. The final transactions are expected to close in Emmis' first fiscal quarter.
Emmis said net proceeds, after deducting transaction-related costs and estimated tax payments, will be used to repay term loans outstanding.
"The St. Louis team has been an integral part of our Emmis family since 1984. We love our people in St. Louis and the team's performance has been nothing short of remarkable," said Jeff Smulyan, Chairman and CEO of Emmis. "Hubbard and Entercom are both tremendous radio operators and they are adding great people and great brands to their St. Louis clusters."
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 Emmis 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 technologies;
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;
inability to grow through suitable acquisitions or to consummate dispositions;
changes in audience measurement systems;
new or changing regulations of the Federal Communications Commission or other governmental agencies;
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.
Cision View original content:http://www.prnewswire.com/news-releases/emmis-announces-agreements-to-sell-its-st-louis-radio-stations-for-60-million-300603304.html
SOURCE Emmis Communications
Copyright 2018 PR Newswire
Enterprising Investor
8 years ago
Emmis Communications Corporation Settles Preferred Holder Lawsuit (12/04/15)
On December 4, 2015, Emmis Communications Corporation (the “Company”) entered into a Settlement and Release Agreement (the “Settlement Agreement”) with Corre Opportunities Fund, LP, Zazove Associates LLC, DJD Group LLLP, First Derivative Traders LP and Kevan A. Fight (collectively, the “Preferred Group”) to settle any and all remaining issues with respect to the lawsuit captioned in the United States District Court for the Southern District of Indiana as Corre Opportunities Fund, LP, et al v. Emmis Communications Corporation, Cause No. 1:12-cv-00491-SEB-TAB, and in the United States Court of Appeals for the Seventh Circuit as Corre Opportunities Fund, LP, et al v. Emmis Communications Corporation, Cause No. 14-1647 (the “Lawsuit”). Under the terms of the Settlement Agreement, (i) the Company is withdrawing its bill of costs with respect to certain reimbursable expenses in the Lawsuit; (ii) the Company agrees to submit to a vote of its shareholders, and the Preferred Group and Jeffrey H. Smulyan agree to vote in favor of, an amendment to Exhibit A to the Company’s Second Amended and Restated Articles of Incorporation (the “Terms”) to amend the terms of the Company’s Series A Non-Cumulative Convertible Preferred Stock (the “Preferred Stock”) to (A) change the voluntary conversion ratio to permit holders of Preferred Stock to convert their shares of Preferred Stock into Class A Common Stock at a ratio of 2.80 shares of the Company’s Class A Common Stock for each share of Preferred Stock, and (B) provide that all shares of Preferred Stock shall automatically convert into shares of Class A Common Stock at a ratio of 2.80 shares of Class A Common Stock for each share of Preferred Stock on the fifth business day after the delisting of the Preferred Stock by Nasdaq; and (iii) both the Company and the Preferred Group will release each other from claims related to the Lawsuit. Under the current Terms, the Preferred Stock is voluntarily convertible into shares of Class A Common Stock at a ratio of 2.44 shares of Class A Common Stock for each class of Preferred Stock, and there is no provision of mandatory conversion. As disclosed in the Company’s Current Report on Form 8-K filed on August 24, 2015, the Preferred Stock is currently subject to a Deficiency Notice from Nasdaq stating that the Company has until February 17, 2016 to cure its failure to meet Nasdaq’s Continued Listing Standards with respect to the Preferred Stock. The Company does not anticipate that such failure will be timely cured and the Preferred Stock will subsequently be delisted by Nasdaq.
http://www.sec.gov/Archives/edgar/data/783005/000078300515000048/emms8k12042015.htm
stocktrademan
9 years ago
$EMMS recent news/filings
bullish divergence
should breakout soon
## source: finance.yahoo.com
Fri, 10 Jul 2015 05:37:02 GMT ~ Edited Transcript of EMMS earnings conference call or presentation 9-Jul-15 1:00pm GMT
read full: http://finance.yahoo.com/news/edited-transcript-emms-earnings-conference-163440825.html
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Thu, 09 Jul 2015 11:07:04 GMT ~ Q1 2016 Emmis Communications Corp Earnings Release - Before Market Open
read full: http://biz.yahoo.com/research/earncal/20150709.html?t=emms
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Thu, 09 Jul 2015 10:01:37 GMT ~ EMMIS COMMUNICATIONS CORP Files SEC form 8-K, Results of Operations and Financial Condition, Regulation FD Disclosure
read full: http://biz.yahoo.com/e/150709/emms8-k.html
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Thu, 09 Jul 2015 10:00:00 GMT ~ Emmis Announces First Quarter Earnings
[PR Newswire] - INDIANAPOLIS, July 9, 2015 /PRNewswire/ -- Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its first fiscal quarter ending May 31, 2015. Emmis' radio net revenues for the first ...
read full: http://finance.yahoo.com/news/emmis-announces-first-quarter-earnings-100000230.html
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Mon, 06 Jul 2015 23:03:00 GMT ~ Alliance Fiber Connects With Investors -- Telecom Winners and Losers
read full: http://www.thestreet.com/story/13209295/1/alliance-fiber-connects-with-investors--telecom-winners-and-losers.html?puc=yahoo&cm_ven=YAHOO
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$EMMS charts
basic chart ## source: stockcharts.com
basic chart ## source: stockscores.com
big daily chart ## source: stockcharts.com
big weekly chart ## source: stockcharts.com
$EMMS company information
## source: otcmarkets.com
Link: http://www.otcmarkets.com/stock/EMMS/company-info
Ticker: $EMMS
OTC Market Place: Not Available
CIK code: 0000783005
Company name: Emmis Communications Corp.
Incorporated In: IN, USA
Business Description:
$EMMS share structure
## source: otcmarkets.com
Market Value: $47,202,728 a/o Jul 09, 2015
Shares Outstanding: 39,335,607 a/o May 01, 2015
Float: Not Available
Authorized Shares: Not Available
Par Value: 0.01
$EMMS extra dd links
Company name: Emmis Communications Corp.
## STOCK DETAILS ##
After Hours Quote (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/after-hours
Option Chain (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/option-chain
Historical Prices (yahoo.com): http://finance.yahoo.com/q/hp?s=EMMS+Historical+Prices
Company Profile (yahoo.com): http://finance.yahoo.com/q/pr?s=EMMS+Profile
Industry (yahoo.com): http://finance.yahoo.com/q/in?s=EMMS+Industry
## COMPANY NEWS ##
Market Stream (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/stream
Latest news (otcmarkets.com): http://www.otcmarkets.com/stock/EMMS/news - http://finance.yahoo.com/q/h?s=EMMS+Headlines
## STOCK ANALYSIS ##
Analyst Research (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/analyst-research
Guru Analysis (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/guru-analysis
Stock Report (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/stock-report
Competitors (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/competitors
Stock Consultant (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/stock-consultant
Stock Comparison (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/stock-comparison
Investopedia (investopedia.com): http://www.investopedia.com/markets/stocks/EMMS/?wa=0
Research Reports (otcmarkets.com): http://www.otcmarkets.com/stock/EMMS/research
Basic Tech. Analysis (yahoo.com): http://finance.yahoo.com/q/ta?s=EMMS+Basic+Tech.+Analysis
Barchart (barchart.com): http://www.barchart.com/quotes/stocks/EMMS
DTCC (dtcc.com): http://search2.dtcc.com/?q=Emmis+Communications+Corp.&x=10&y=8&sp_p=all&sp_f=ISO-8859-1
Spoke company information (spoke.com): http://www.spoke.com/search?utf8=%E2%9C%93&q=Emmis+Communications+Corp.
Corporation WIKI (corporationwiki.com): http://www.corporationwiki.com/search/results?term=Emmis+Communications+Corp.&x=0&y=0
## FUNDAMENTALS ##
Call Transcripts (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/call-transcripts
Annual Report (companyspotlight.com): http://www.companyspotlight.com/library/companies/keyword/EMMS
Income Statement (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/financials?query=income-statement
Revenue/EPS (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/revenue-eps
SEC Filings (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/sec-filings
Edgar filings (sec.gov): http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000783005&owner=exclude&count=40
Latest filings (otcmarkets.com): http://www.otcmarkets.com/stock/EMMS/filings
Latest financials (otcmarkets.com): http://www.otcmarkets.com/stock/EMMS/financials
Short Interest (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/short-interest
Dividend History (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/dividend-history
RegSho (regsho.com): http://www.regsho.com/tools/symbol_stats.php?sym=EMMS&search=search
OTC Short Report (otcshortreport.com): http://otcshortreport.com/index.php?index=EMMS
Short Sales (otcmarkets.com): http://www.otcmarkets.com/stock/EMMS/short-sales
Key Statistics (yahoo.com): http://finance.yahoo.com/q/ks?s=EMMS+Key+Statistics
Insider Roster (yahoo.com): http://finance.yahoo.com/q/ir?s=EMMS+Insider+Roster
Income Statement (yahoo.com): http://finance.yahoo.com/q/is?s=EMMS
Balance Sheet (yahoo.com): http://finance.yahoo.com/q/bs?s=EMMS
Cash Flow (yahoo.com): http://finance.yahoo.com/q/cf?s=EMMS+Cash+Flow&annual
## HOLDINGS ##
Major holdings (cnbc.com): http://data.cnbc.com/quotes/EMMS/tab/8.1
Insider transactions (yahoo.com): http://finance.yahoo.com/q/it?s=EMMS+Insider+Transactions
Insider transactions (secform4.com): http://www.secform4.com/insider-trading/EMMS.htm
Insider transactions (insidercrow.com): http://www.insidercow.com/history/company.jsp?company=EMMS
Ownership Summary (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/ownership-summary
Institutional Holdings (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/institutional-holdings
Insiders (SEC Form 4) (nasdaq.com): http://www.nasdaq.com/symbol/EMMS/insider-trades
Insider Disclosure (otcmarkets.com): http://www.otcmarkets.com/stock/EMMS/insider-transactions
## SOCIAL MEDIA AND OTHER VARIOUS SOURCES ##
PST (pennystocktweets.com): http://www.pennystocktweets.com/stocks/profile/EMMS
Market Watch (marketwatch.com): http://www.marketwatch.com/investing/stock/EMMS
Bloomberg (bloomberg.com): http://www.bloomberg.com/quote/EMMS:US
Morningstar (morningstar.com): http://quotes.morningstar.com/stock/s?t=EMMS
Bussinessweek (businessweek.com): http://investing.businessweek.com/research/stocks/snapshot/snapshot_article.asp?ticker=EMMS
$EMMS DD Notes ~ http://www.ddnotesmaker.com/EMMS
Enterprising Investor
9 years ago
Emmis Announces First Quarter Earnings (7/09/15)
INDIANAPOLIS, July 9, 2015 /PRNewswire/ -- Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its first fiscal quarter ending May 31, 2015.
Emmis' radio net revenues for the first fiscal quarter were down 5.3%, from $45.0 million to $42.6 million. Per Miller Kaplan reporting, which excludes barter revenues and syndication revenues, Emmis' stations were down 6.0% compared to local radio market revenues down 4.9% during the fiscal quarter.
Publishing net revenues were up 5.8% in the first fiscal quarter, driven by strong growth at Los Angeles, Texas Monthly and Atlanta.
For the first fiscal quarter, operating income was $7.6 million, compared to $6.6 million for the same quarter of the prior year. Emmis' station operating income for the first fiscal quarter was $13.6 million, compared to $13.3 million for the same quarter of the prior year.
"While this was a challenging quarter, we are encouraged by what we see looking forward," said Jeff Smulyan, President & CEO of Emmis. "Our Q2 radio revenues are pacing up low single digits, we had a record-setting Summer Jam concert in New York, and ratings are bouncing back in Los Angeles after some expected turbulence.
"The Emmis-created, industry-led initiative to make FM broadcast radio available on smartphones and tablets, NextRadio®, has incredible momentum," Smulyan continued. "The announcement last week that NextRadio is now available for download in the Amazon App Store is the first in what we hope will be a series of positive announcements. I couldn't be more thrilled with the way our industry has come together to support NextRadio.
"Last Friday's decision by the Seventh Circuit Court of Appeals in our preferred stock case was particularly gratifying," added Smulyan. "We always knew that we had complied with Indiana's unique corporate law, and were very pleased that the court agreed."
A conference call regarding earnings will be hosted today at 9 a.m. Eastern by dialing 1-517-623-4891. Questions may be submitted via email to ir@emmis.com. A replay of the call will be available until 6 p.m. on Thursday, July 23 by dialing 1-203-369-0276.
Emmis will host its Annual Shareholders' Meeting today at 11 am at Emmis Headquarters on Monument Circle in Indianapolis.
Emmis has included supplemental 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.
Emmis Communications – Great Media, Great People, Great Service®
About Emmis Communications
Emmis Communications Corporation is a diversified media company, principally focused on radio broadcasting. Emmis operates the 9th largest radio portfolio in the United States based on total listeners. Emmis owns 19 FM and 4 AM radio stations in New York, Los Angeles, St. Louis, Austin (Emmis has a 50.1% controlling interest in Emmis' radio stations located there), Indianapolis and Terre Haute, IN.
http://www.prnewswire.com/news-releases/emmis-announces-first-quarter-earnings-300110748.html
10452km2
12 years ago
insiders keep buying
EMMS: Insider Buys/Sells (?)
Click Here for All Insider Trades.
Insider Position Date Trades Shares Trade Price ($) Change (%) Details
SMULYAN JEFFREY H member of 10% 13(d) group 2012-07-20 Buy 116,866 $1.97 2.03 view
HSJS, LLC Member of 10% owner 13d group 2012-07-18 Buy 141,023 $1.88 6.91 view
SIMON HERBERT Member of 10% owner 13d group 2012-07-18 Buy 141,023 $1.88 6.91 view
SMULYAN JEFFREY H member of 10% 13(d) group 2012-07-17 Buy 268,100 $1.87 7.49 view
HSJS, LLC Member of 10% owner 13d group 2012-07-16 Buy 173,600 $1.88 6.91 view
SIMON HERBERT Member of 10% owner 13d group 2012-07-16 Buy 173,600 $1.88 6.91 view
Walsh Patrick M Executive VP, COO/CFO 2012-07-16 Buy 1,630 $1.79 12.29 view
SMULYAN JEFFREY H member of 10% 13(d) group 2012-05-22 Buy 105,600 $1.7 18.24 view
HSJS, LLC Member of 10% owner 13d group 2012-05-22 Buy 105,600 $1.7 18.24 view
SIMON HERBERT Member of 10% owner 13d group 2012-05-22 Buy 105,600 $1.7 18.24 view
10452km2
12 years ago
It's in the latest SEC filings, look it up partner. Also you can see the form 4's filed.
EMMS: Insider Buys/Sells (?)
Click Here for All Insider Trades.
Insider Position Date Trades Shares Trade Price ($) Change (%) Details
SIMON HERBERT Member of 10% owner 13d group 2012-07-18 Buy 141,023 $1.88 5.85 view
HSJS, LLC Member of 10% owner 13d group 2012-07-18 Buy 141,023 $1.88 5.85 view
SMULYAN JEFFREY H member of 10% 13(d) group 2012-07-17 Buy 268,100 $1.87 6.41 view
SIMON HERBERT Member of 10% owner 13d group 2012-07-16 Buy 173,600 $1.88 5.85 view
Walsh Patrick M Executive VP, COO/CFO 2012-07-16 Buy 1,630 $1.79 11.17 view
HSJS, LLC Member of 10% owner 13d group 2012-07-16 Buy 173,600 $1.88 5.85 view
SIMON HERBERT Member of 10% owner 13d group 2012-05-22 Buy 105,600 $1.7 17.05 view
SMULYAN JEFFREY H member of 10% 13(d) group 2012-05-22 Buy 105,600 $1.7 17.05 view
HSJS, LLC Member of 10% owner 13d group 2012-05-22 Buy 105,600 $1.7 17.05 view
SMULYAN JEFFREY H member of 10% 13(d) group 2012-05-17 Buy 684,080 $0.21 847.57 view
http://www.gurufocus.com/StockBuy.php?symbol=EMMS
10452km2
12 years ago
WOW MUST READ ON EMMS...INSIDERS KNOW SOMETHING.
Below is a reader submitted investment idea for Emmis Communications (EMMS), drawing attention to important events that have occurred subsequent to the end of the most recent financial statements.
Disclosure: No position (Frank)
******
OVERVIEW
On an LTM basis, Emmis Communications Corp. (“EMMS”) appears to be an overvalued, overlevered company. However, after the quarter ended, the company closed (or is in the process of closing) several transactions that are significantly accretive and massively deleveraging. Pro forma for these transactions (and an unannounced but inevitable refinancing of debt, including 12.25% and 23.0% debt), EMMS is trading at only 5.9x equity cap/LTM free cash flow. The valuation drops to 4.8x equity cap/free cash flow if EMMS wins a lawsuit regarding its outstanding preferred stock. This is a complicated (and somewhat illiquid) situation that for a variety of reasons has not appeared on many investors’ radar screens. However, insiders believe the stock is undervalued and instituted a 10b5 plan to buy up to 1million shares at prices up to $2.00 per share (up 33% from current levels). In an unusual situation, the 10b5 was abruptly terminated after only two days due to an error by the broker, and could not be reinstated due to blackout issues. We believe that had this termination not occurred, EMMS’ stock price would be significantly higher today.
Emms operates the 8th largest publicly traded radio portfolio in the United States based on total listeners. Emmis owns 18 FM and two AM radio stations in New York, Los Angeles, St. Louis, Austin, Indianapolis and Terre Haute, IN.
DEBT AS OF LATEST 10-Q
At Feb. 29, 2012, the company had the following debt ($mm):
OPCO:
Revolver $6.0
Term @ L+4: $87.9
Term @ 12.25%: $110.0
Total OPCO debt: $203.8
Holdco:
Notes @ 23.0%: $33.9
Consolidated:
Total Debt $237.7
For the LTM ended Feb. 29, 2012, EMMS generated reported EBITDA of $26.3 mm (or $23.4mm as per Bloomberg and Yahoo), which implies a Debt to Ebitda of 9.0x. However, this reported EBITDA figure includes certain non-recurring items and, as illustrated by the company’s analysis (http://www.emmis.com/investors/quarterly-earnings.aspx then under Quarter 4 click Non-GAAP Leverage Disclosure, 2.29.12 ), a more appropriate LTM EBITDA is $30.8 mm, which implies a still high leverage ratio of 7.7x. However, this ratio comes down significantly when the below asset sales are considered.
ASSET SALES
After the quarter ended, EMMS closed or will soon close 3 transactions that combined should generate $169 million of after tax and fees proceeds that will be used to repay debt.
1) ESPN transaction which has already closed and generated $75 million of cash proceeds.
2) KISS transaction which should generate $10 million of cash proceeds when it closes this summer.
3) Grupo Radio Centro Put/call which should generate $84 million of cash proceeds when it closes this summer.
For more details on these sales, see the earnings call transcript and SEC filings.
REFINANCING OPPORTUNITY
After closing the above asset sales, the company will be much less levered, so the company can refi its debt at significantly lower rates. All of the company’s debt is prepayable with the following caveats. The 12.25% debt is subject to a 6% prepayment fee and due to a make whole provision, its not economically feasible to repay the 23% debt until next May, although we imagine the company could negotiate a prepayment.
A refinancing post-closing of all the asset sales might look like:
Sources:
Asset Sale Proceeds 169.0
New Debt at 6.5% 88.3
Total Sources 257.3
Uses:
Repay Revolver 6.0
Repay Term 87.9
Prepayment fee on 12.25% 6.6
Repay 12.25% Term 110.0
Repay 23% Holdco 41.6 (assumes 1 year of accretion from current balance)
Other Fees 5.0
Total Uses 257.3
Note: on May 30 the company refinanced over $70 million of its debt with a new 4.1% facility, but this isn’t reflected in our analysis.
VALUATION
Pro forma this refinancing, EMMS would have Debt/EBITDA of 3.7x (down significantly from the current levels). Importantly, the company has large NOLs, so it pays no cash taxes and thus delevers more quickly than the debt/ebitda ratio may suggest.
We are assuming the new debt can be obtained at 6.5%.
So, pro forma the refinancing the company will have LTM free cash flow of:
23.8 – Adjusted EBITDA (as per May 10 eps call)
(5.7) -6.5% interest on new debt
(0.0) -Cash taxes (~100mm NOL)
(5.4) – Capex
(2.9) – Preferred dividends
9.7 Free cash flow
Stock Price $1.50
Shares outstanding 38.2
Equity cap 57.3
Equity Cap/Free cash flow 5.9x
But it may be even cheaper than that.
PREFERRED STOCK
On its balance sheet, EMMS has 6.5% preferred stock with a liquidation value of $47 million. In a complicated and controversial transaction, the company repurchased (for ~ $17 per preferred share compared to its $50 per share liquidation value) significant amounts of preferred and is now attempting to strip the remaining preferred stock of its dividends and essentially force each preferred to convert into 2.4 shares of common. There is currently a lawsuit regarding this matter and the next court date is later this summer. We believe EMMS has a good chance of prevailing. However, in order to be conservative, our analysis assumes EMMS loses this issue. However, if EMMS wins, and the preferred convert into 2.3 million common shares and there will be no more dividend payments, the pro forma equity cap would be increase to $60.7 million, pro forma free cash flow would be $12.7 mm (9.7+2.9) and the equity cap/fcf multiple would be 4.8x. The preferred are publicly listed (EMMSP) and last traded at $15 (much less than the $50 liquidation value), but on very light volume.
INSIDER BUYING / 10B5-1
When the window was briefly open after the last earnings release, insiders bought stock. Perhaps most interesting was the activity by Herb Simon (of Simon Property Group). After some earlier purchases at lower prices, on May 16 he bought 98k shares at $1.50. The following day he formed a “partnership” with EMMS’ Chairman/CEO and that entity entered into a 10b5-1 plan that would enable it to buy up to 1.0 million shares at no more than $2.00 per share. On May 17 the partnership bought 98k shares at $1.48 and on May 22nd it bought 106k shares at $1.70 (15% above current price). On May 23 the 10b5 plan was terminated because the broker apparently screwed up by not buying any shares. We believe that since the company was in a blackout period, the 10b5 plan could not be reinitiated. However, the company reports earnings in mid-July at which time the insider buying window would reopen and the 10b5 could be restarted. We believe the $2.00 limit and $1.70 last purchase price give a good sense for what insiders think EMMS is worth. We also believe that had the 10b5 plan not been terminated, EMMS’ stock price would currently be significantly higher not only because of buying by the plan, but also because the frequent insider buying filings would put this (complicated) idea on more investors’ radar screen.
Since the 10b5 plan situation is unusual, below is the announcement from the original 13d.
HSJS, LLC has entered into a Rule 10b5-1 Purchase Plan with Stifel, Nicolaus & Company, Incorporated (“Stifel”) which provides for the purchase of up to 1,000,000 shares of Class A Common Stock, including shares of Class A Common Stock purchased on or after May 17, 2012 by HSJS, LLC. Under the plan, Stifel is not permitted to purchase any shares of Class A Common Stock at a price greater than $2.00 per share. The plan can be terminated at any time subject to the Issuer’s insider trading policy and pre-clearance by the Issuer.
Below is the disclosure in a later 13d announcing the termination of the plan.
Although the Rule 10b5-1 Purchase Plan entered into by HSJS, LLC provided for daily purchases of the Issuer’s Class A Common Stock, subject to certain conditions and limitations, the broker implementing the Purchase Plan failed to purchase any Class A Common Stock on May 23, 2012. The decision not to purchase shares was made without the approval or knowledge of the Reporting Persons. Because the Purchase Plan had been deviated from, HSJS, LLC terminated the Purchase Plan on May 24, 2012.
OTHER
1) This idea has several moving parts so we suggest you read the transcript of the last earning call and view SEC filings and the financial information on the Investors section of the website.
2) While the company does not give guidance, comments from the earning call seem to indicate that this quarter (which will be announced in July) is doing well.
3) Reported results are very deceiving because they do not reflect the asset sales mentioned above. As discussed in the earning call, pro forma these transactions, the business is doing much better than the “reported” results may indicate.
4) Management essentially controls the company thru a dual class of stock and in the past has attempted to take it private. On the last earnings call they indicated they will not try to take it private again.
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