Entercom Communications Reports First Quarter Results

Nachrichtenquelle: Business Wire (engl.)
14.05.2020, 14:00  |  119   |   |   

Entercom Communications Corp. (NYSE: ETM) today reported financial results for the quarter ended March 31, 2020.

Key Highlights

  • After being up over 7% February YTD, net revenues for the quarter were down 4% to $297 million due to the impact of COVID-19
  • Digital revenues were up 41% YoY for the quarter, propelled by strong audience and revenue growth in podcasting and digital audio advertising
  • To mitigate the impact of the downturn in revenues and to preserve liquidity, the Company rapidly executed the following actions:
    • Reduced fixed costs by $150 million during the remainder of 2020. The Company will also realize reduced variable expenses tied to revenues.
    • Cut planned capital expenditures by over 40% to a revised range of between $25 -$30 million for 2020.
    • Due to benefits provided by the CARES Act, cash income tax payments now expected to be less than $10 million for 2020.
    • Realized $10.8 million of proceeds from the sale of WAAF-FM in Boston in April.
  • Strong liquidity position and no near term maturities
    • $189 million of cash on-hand at March 31st
    • 98% of outstanding debt matures November 2024 or later

David J. Field, President and Chief Executive Officer, stated: “I want to salute the outstanding work and dedication of the Entercom team, which has risen to the unique challenges of these unprecedented times to serve the American public, our customers and our communities. Entercom began the year on a strong note driving revenues up over 7% through February before facing the impact of the COVID-19 pandemic. We have taken important actions to mitigate the impact of the pandemic and are well positioned financially to operate effectively through the crisis. Strategically, we are well positioned to fully participate in the recovery and the attractive growth opportunities in the audio space, with strong leadership positions in broadcast radio and podcasting, the fastest growing digital audio platform, unparalleled leadership in news and sports, and strong data and analytics capabilities.”

First Quarter Summary

  • Net revenues for the quarter were $297.0 million, down 4% compared to $309.0 million in the first quarter of 2019
  • Operating income for the quarter was $11.4 million, which included a non-cash impairment charge of $1.1 million, compared to $30.4 million in the first quarter of 2019
  • Adjusted EBITDA for the quarter was $34.5 million, down 19% compared to $42.7 million in the first quarter of 2019
  • Net loss per diluted share for the quarter was $0.07 compared to net income of $0.02 per diluted share in the first quarter of 2019
  • Adjusted net loss per diluted share for the quarter was $0.01 compared to adjusted net income of $0.03 per diluted share in the first quarter of 2019

Additional Information

In April, the Company completed its sale of Boston station WAAF-FM to Educational Media Foundation (“EMF”) for $10.8 million in cash. EMF began programming the station on February 22, 2020 under a network affiliation agreement.

In response to the negative impact of COVID-19 on the economy and advertising market, the Company fully drew its revolving credit facility to increase the amount of cash on its balance sheet. As of March 31, 2020, the Company had outstanding $1,002 million of senior debt under its credit facilities, $425 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 $189 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 Thursday, May 14, 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 hearing 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) 566-0689. 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; non-recurring expenses otherwise included in corporate or station expenses; 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; 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, 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, 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 American media and entertainment company reaching and engaging 170 million people each month 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).

(amounts in thousands, except per share data)

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

2020

 

2019

STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Revenues

 

$

297,030

 

$

309,005

 

 

 

 

 

 

 

Station Expenses

 

 

249,549

 

 

247,570

Station Expense - Non-Cash Compensation

 

 

502

 

 

1,415

Corporate Expenses

 

 

15,959

 

 

18,778

Corporate Expenses - Non-Cash Compensation

 

 

1,278

 

 

2,157

Depreciation And Amortization

 

 

12,498

 

 

11,104

Time Brokerage Agreement Expense (Income)

 

 

-

 

 

40

Merger And Acquisition Costs

 

 

-

 

 

9

Impairment Loss

 

 

1,050

 

 

-

Restructuring Charges

 

 

4,209

 

 

1,014

Integration Costs

 

 

622

 

 

1,135

Net (Gain) Loss On Sale Or Disposition of Assets

 

 

-

 

 

(4,600)

Total Operating Expenses

 

 

285,667

 

 

278,622

Operating Income

 

 

11,363

 

 

30,383

 

 

 

 

 

 

 

Net Interest Expense

 

 

23,621

 

 

25,220

 

 

 

 

 

 

 

Income (Loss) Before Income Taxes

 

 

(12,258)

 

 

5,163

Income Taxes (Benefit)

 

 

(3,120)

 

 

2,038

Net Income (Loss)

 

$

(9,138)

 

$

3,125

 

 

 

 

 

 

 

Net Income (Loss) Per Share – Basic

 

$

(0.07)

 

$

0.02

 

 

 

 

 

 

 

Net Income (Loss) Per Share – Diluted

 

$

(0.07)

 

$

0.02

 

 

 

 

 

 

 

Dividends Declared And Paid Per Common Share

 

$

0.02

 

$

0.09

 

 

 

 

 

 

 

Weighted Common Shares Outstanding – Basic

 

 

134,890

 

 

138,099

Weighted Common Shares Outstanding – Diluted

 

 

134,890

 

 

138,523

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

 

 

 

 

 

 

Net Capital Expenditures

 

$

8,899

 

$

20,510

Adjusted Income Taxes Paid

 

$

1,297

 

$

697

Cash Dividends On Common Stock Declared And Paid

 

$

2,692

 

$

12,430

 

 

 

 

 

 

 

SELECTED BALANCE SHEET DATA

 

March 31,

 

December 31,

 

 

2020

 

2019

Cash and Cash Equivalents

 

$

189,238

 

$

20,393

Senior Debt - Term B-1 Loan (Includes Current Portion)

 

$

758,122

 

$

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

 

$

870,187

 

$

881,443

OTHER FINANCIAL DATA

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

2020

 

2019

Reconciliation Of GAAP Operating Income To Station

 

 

 

 

 

 

Operating Income

 

 

 

 

 

 

Operating Income

 

$

11,363

 

$

30,383

Corporate Expenses

 

 

15,959

 

 

18,778

Corporate Expenses - Non-Cash Compensation

 

 

1,278

 

 

2,157

Station Expenses - Non-Cash Compensation

 

 

502

 

 

1,415

Depreciation And Amortization

 

 

12,498

 

 

11,104

Merger And Acquisition Costs

 

 

-

 

 

9

Restructuring Charges

 

 

4,209

 

 

1,014

Impairment Loss

 

 

1,050

 

 

-

Integration Costs

 

 

622

 

 

1,135

Net Time Brokerage Agreement Expense (Income)

 

 

-

 

 

40

Net Gain (Loss) On Sale Or Disposition of Assets

 

 

-

 

 

(4,600)

Station Operating Income

 

$

47,481

 

$

61,435

 

 

 

 

 

 

 

Reconciliation Of GAAP Net Income (Loss) To Adjusted EBITDA

 

 

 

 

 

 

Net (Income) Loss

 

$

(9,138)

 

$

3,125

Income Taxes (Benefit)

 

 

(3,120)

 

 

2,038

Net Interest Expense

 

 

23,621

 

 

25,220

Corporate Expenses - Non-Cash Compensation

 

 

1,278

 

 

2,157

Station Expenses - Non-Cash Compensation

 

 

502

 

 

1,415

Depreciation And Amortization

 

 

12,498

 

 

11,104

Time Brokerage Agreement Expense (Income)

 

 

-

 

 

40

Merger And Acquisition Costs

 

 

-

 

 

9

Restructuring Charges

 

 

4,209

 

 

1,014

Integration Costs

 

 

622

 

 

1,135

Non-Recurring Expenses Otherwise Included in Station Expenses

 

 

3,000

 

 

-

Impairment Loss

 

 

1,050

 

 

-

Net Gain (Loss) On Sale Or Disposition of Assets

 

 

-

 

 

(4,600)

Adjusted EBITDA

 

$

34,522

 

$

42,657

 

 

 

 

 

 

 

Reconciliation of GAAP Net Income (Loss) To Adjusted Free Cash Flow

 

 

 

 

 

 

Net Income (Loss)

 

$

(9,138)

 

$

3,125

Depreciation And Amortization

 

 

12,498

 

 

11,104

Deferred Financing Costs Included In Interest Expense

 

 

946

 

 

801

Amortization Debt Premium Included In Interest Expense

 

 

(849)

 

 

(715)

Non-Cash Compensation Expense

 

 

1,780

 

 

3,572

Merger And Acquisition Costs

 

 

-

 

 

9

Integration Costs

 

 

622

 

 

1,135

Restructuring Charges

 

 

4,209

 

 

1,014

Non-Recurring Expenses Otherwise Included in Station Expenses

 

 

3,000

 

 

-

Impairment Loss

 

 

1,050

 

 

-

Net (Gain) Loss On Sale Or Disposition of Assets

 

 

-

 

 

(4,600)

Income Taxes (Benefit)

 

 

(3,120)

 

 

2,038

Net Capital Expenditures, Including Amortizable Intangibles

 

 

(8,899)

 

 

(20,510)

Adjusted Income Taxes Paid

 

 

(1,297)

 

 

(697)

Adjusted Free Cash Flow

 

$

802

 

$

(3,724)

Reconciliation Of Capital Expenditures, Including Amortizable

 

 

 

 

 

 

Intangibles, To Net Capital Expenditures

 

 

 

 

 

 

Capital Expenditures, Including Amortizable Intangibles

 

$

(9,744)

 

$

(20,510)

Reimbursed Tenant Improvement Allowance

 

 

845

 

 

-

Net Capital Expenditures

 

$

(8,899)

 

$

(20,510)

 

 

 

 

 

 

 

Reconciliation Of Income Taxes Paid To

 

 

 

 

 

 

Adjusted Income Taxes Paid

 

 

 

 

 

 

Income Taxes Paid

 

$

(1,297)

 

$

(1,790)

Income Taxes Paid Related to Gain/Loss On Sale Or Exchange

 

 

 

 

 

 

Of Radio Station Assets

 

 

-

 

 

894

Income Taxes Paid Related to Gain/Loss On Sale Of Redundant Properties

 

 

-

 

 

199

Adjusted Income Taxes Paid

 

$

(1,297)

 

$

(697)

 

 

 

 

 

 

 

Reconciliation of GAAP Net Income (Loss) To Adjusted Net Income

 

 

 

 

 

 

Net Income (Loss)

 

$

(9,138)

 

$

3,125

Income Taxes (Benefit)

 

 

(3,120)

 

 

2,038

Merger And Acquisition Costs

 

 

-

 

 

9

Non-Recurring Expenses Otherwise Included in Station Expenses

 

 

3,000

 

 

-

Impairment Loss

 

 

1,050

 

 

-

Integration Costs

 

 

622

 

 

1,135

Restructuring Charges

 

 

4,209

 

 

1,014

Net (Gain) Loss On Sale Or Disposition of Assets

 

 

-

 

 

(4,600)

Non-Cash Compensation Expense

 

 

1,780

 

 

3,572

Adjusted Net Income Before Income Taxes

 

 

(1,597)

 

 

6,293

Income Taxes

 

 

(479)

 

 

1,888

Adjusted Net Income

 

$

(1,118)

 

$

4,405

 

 

 

 

 

 

 

Weighted Average Diluted Shares Outstanding For Purposes

 

 

 

 

 

 

Of Computing Adjusted Net Income Per Share - Diluted

 

 

 

 

 

 

Weighted Common Shares Outstanding - Diluted As Reported

 

 

134,890

 

 

138,523

Diluted Shares Excluded When Reporting A Net Loss

 

 

-

 

 

-

 

 

 

134,890

 

 

138,523

 

 

 

 

 

 

 

Adjusted Net Income (Loss) Per Share - Diluted

 

$

(0.01)

 

$

0.03

 

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