Entercom Communications Corp. Reports Second Quarter Results
Entercom Communications Corp. Reports Second Quarter Results
Second Quarter Highlights
- Net revenues for the quarter decreased 3% to $101.2 million
- Station expenses decreased 3% to $65.7 million
- Station operating income decreased 4% to $35.5 million
- Adjusted EBITDA decreased 4% to $30.7 million
- Adjusted net income per share increased 8% to $0.26
- Free cash flow decreased 2% to $18.9 million
David J. Field, President and Chief Executive Officer stated: "Strong expense management and reduced interest expense enabled Entercom to grow Adjusted Earnings per Share despite a decline in Revenues for the quarter. Notwithstanding our disappointing Revenues, we believe that we are well positioned to accelerate our performance later in the year based on our excellent ratings and our strong competitive position that has been further bolstered by a number of recent operational and strategic enhancements."
The Company reduced its outstanding net senior debt and senior notes by $3.5 million during the quarter. As of June 30, 2013, the Company had $6.3 million in cash and $545.6 million of senior debt and senior notes.
During the quarter, the Company took a $0.9 million impairment related to the anticipated sale of non-core real estate in one of its markets. This land is now classified as assets held for sale on the Company's balance sheet.
During the quarter, the Company recognized a $1.6 million gain related to the completion of its 2009 tower sale transaction.
Earnings Conference Call and Company Information
Entercom will hold a conference call regarding the quarterly earnings release on Monday, August 5, 2013 at 5:00 PM Eastern Time. Investors will have the opportunity to submit questions to the Company regarding the Second quarter earnings release by emailing their inquiries to email@example.com. Questions should be sent at least 10 minutes prior to the call. The Company will only discuss inquiries made by email prior to the conference call. The public may access the conference call by dialing 888-889-0278 (passcode: Entercom). A replay of the conference call will be available and can be accessed either by dialing 800-510-0118 or by visiting the Company's website: www.entercom.com. Additional information and reconciliation of same station results are available on the Company's website at www.entercom.com.
Entercom Communications Corp.
Known for developing unique and highly successful locally programmed stations, Entercom is home to some of radio's most distinguished brands and compelling personalities. The company is also the radio broadcast partner of the Boston Red Sox, Boston Celtics, Buffalo Bills, Buffalo Sabres, Kansas City Royals, Memphis Grizzlies, New Orleans Saints, New Orleans Pelicans, Oakland Athletics, Oakland Raiders and San Jose Sharks.
Entercom focuses on creating effective multi-platform marketing solutions for its customers, incorporating the company's audio, digital and experiential assets. Additionally, the company has a long-standing commitment to responsible corporate citizenship and environmental stewardship. Entercom stations play a vital, hands-on role in improving their communities, providing over $100 million in annual support for local charitable organizations.
The company's radio stations have received numerous awards, including multiple Edward R. Murrow Awards for excellence in broadcast journalism, as well as the National Association of Broadcasters (NAB) Marconi Award for excellence in radio broadcasting. In 2012, Entercom was named by Information Week as one of the Top 500 Technology Innovators in the United States.
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; and gain or loss on sale or disposition of assets.
Adjusted EBITDA consists of net income (loss), adjusted to exclude: income taxes (benefit); total other 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); impairment loss; merger and acquisition costs; and gain or loss on sale or disposition of assets.
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; and (ii) less net interest expense (excluding amortization of deferred financing costs), taxes paid and capital expenditures.
Adjusted net income consists of net income (loss) adjusted to exclude: (i) income taxes (benefit) as reported; (ii) gain/loss on sale of assets, derivative instruments and investments; (iii) non-cash compensation expense; (iv) other income; (v) impairment loss; (vi) merger and acquisition costs; 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 42% without discrete items of tax.
Adjusted net income per share includes any dilutive equivalent shares when not anti-dilutive.
Same station is computed by comparing the performance of stations operated by the Company throughout the relevant period to the comparable performance in the prior year's corresponding period (excluding non-cash compensation expense). Any acquisition or disposition of radio stations not deemed to be material by management are ignored for the purpose of computing this data. There were no material acquisitions during the periods presented in the above tables.
Non-GAAP Financial Measures
It is important to note that station operating income, station expense, corporate expense, same station net revenues, same station expenses, same station operating income, adjusted EBITDA, adjusted net income, adjusted net income per share and free cash flow 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 and adjusted net income per share). The adjustments exclude gain/loss on sale of assets, derivative instruments, and investments; non-cash compensation expense, other income, impairment loss and gain/loss on early extinguishment of debt. 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 pro forma 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 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.
|Second Quarter 2013|
ENTERCOM COMMUNICATIONS CORP.
(amounts in thousands, except per share data)
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
STATEMENTS OF OPERATIONS
|Station Expense - Non-Cash Compensation||180||158||335||264|
|Corporate Expenses - Non-Cash Compensation||776||1,163||1,763||2,454|
|Depreciation And Amortization||2,192||2,737||4,516||5,496|
|Net Time Brokerage Agreement Fees||-||242||-||242|
|Net (Gain) Loss On Sale Or Disposition of Assets||(1,613||)||(13||)||(1,591||)||3|
|Total Operating Expenses||72,971||99,203||139,559||168,279|
|Other Expense (Income) Items:|
|Net Interest Expense||11,310||13,496||22,784||27,569|
|Net Gain On Derivative Instruments||-||(558||)||-||(1,346||)|
|Total Other Expense||11,248||12,905||22,691||26,177|
|Income (Loss) Before Income Taxes (Benefit)||17,020||(7,537||)||17,349||(9,919||)|
|Income Taxes (Benefit)||7,127||(4,330||)||7,707||(5,663||)|
|Net Income (Loss)||$||9,893||$||(3,207||)||$||9,642||$||(4,256||)|
|Net Income (Loss) Per Share - Basic||$||0.26||$||(0.09||)||$||0.26||$||(0.12||)|
|Net Income (Loss) Per Share - Diluted||$||0.26||$||(0.09||)||$||0.25||$||(0.12||)|
|Weighted Common Shares Outstanding - Basic||37,344||36,686||37,308||36,668|
|Weighted Common Shares Outstanding - Diluted||38,103||36,686||38,201||36,668|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|Income Taxes Paid||$||68||$||-||$||69||99|
SELECTED BALANCE SHEET DATA
|Cash And Cash Equivalents||$||6,339||$||6,741|
|Current Portion Of Senior Debt||$||18,027||$||15,738|
|Senior Debt (including Current Debt)||$||328,077||$||393,607|
|Total Shareholders' Equity||$||275,497||$||249,230|
|OTHER FINANCIAL DATA|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
Reconciliation Of GAAP Station Operating Expenses To Station Expenses
|Station Operating Expenses||$||65,921||$||67,728||$||123,936||$||127,401|
|Station Expenses - Non-Cash Compensation||(180||)||(158||)||(335||)||(264||)|
Reconciliation Of GAAP Corporate General & Administrative Expenses To Corporate Expenses
|Corporate General & Administrative Expenses||$||5,621||$||6,202||$||11,848||$||12,830|
|Corporate Expenses - Non-Cash Compensation||(776||)||(1,163||)||(1,763||)||(2,454||)|