Emmis Announces Fourth Quarter and Full Year Results

Emmis' stations continue to take market share by growing faster than peer group

08 May, 2013, 06:00 ET from Emmis Communications Corporation

INDIANAPOLIS, May 8, 2013 /PRNewswire/ -- Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its fourth fiscal quarter and full-year ending February 28, 2013. Pro forma for station divestitures, Emmis' radio net revenues (consisting solely of our domestic stations) for the fourth fiscal quarter were up 3%.  Revenues reported to Miller Kaplan in the markets where Emmis competes, excluding barter revenue, grew 2.8% during the quarter.  Emmis pro forma radio revenues reported on the same basis grew 4.2%, exclusive of revenue associated with 98.7FM in New York, which is being programmed by ESPN pursuant to an LMA.  On a reported basis, net radio revenues for the quarter were up 2%.

For the full year, pro forma radio revenues were $128.0 million, compared to $123.9 million in the prior year, an increase of 3 percent.  Market revenues for the full year reported to Miller Kaplan in markets where Emmis competes, excluding barter revenues, grew 0.7% and Emmis pro forma radio revenues reported on the same basis were up 3.4% during the same period.

"Emmis is known for operational excellence, and I'm pleased to say this year was no different," Jeff Smulyan, President & CEO of Emmis said.  "For the second year in a row we have significantly outperformed our radio markets and the radio industry.  Emmis finished the year as one of the least-levered and most financially sound radio operators in the country."

Station operating income during the quarter, pro forma for station divestitures, was $7.1 million, compared to $4.0 million for the same quarter of the prior year.

Emmis has included supplemental pro forma net revenues, station operating expenses, and certain other financial data on its website, www.emmis.com under the "Investors" tab. The following table reconciles reported results to pro forma results (dollars in thousands):

Three Months ended February 28 (29),

%

Twelve Months ended February 28 (29),

%

2013

2012

Change

2013

2012

Change

Radio:

Reported net revenues

$ 29,080

$ 28,388

2%

$ 138,630

$ 144,826

-4%

Less:  Net revenues from Merlin stations and WRKS (98.7FM)

(2,583)

(2,562)

(10,623)

(20,929)

Pro forma net revenues

$ 26,497

$ 25,826

3%

$ 128,007

$ 123,897

3%

Total Company:

Reported net revenues

$ 43,301

$ 42,358

2%

$ 196,084

$ 202,218

-3%

Less:  Net revenues from Merlin stations and WRKS (98.7FM)

(2,583)

(2,562)

(10,623)

(20,929)

Pro forma net revenues

$ 40,718

$ 39,796

2%

$ 185,461

$ 181,289

2%

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 10th largest publicly traded radio portfolio in the United States based on total listeners. Emmis operates 18 FM and three AM radio stations in New York, Los Angeles, St. Louis, Austin, Indianapolis and Terre Haute, IN.

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 the Company 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; 
  • increased competition in our markets and the broadcasting industry;
  • 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;
  • competition from new or different technologies;
  • 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

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL DATA

(Unaudited, dollars in thousands, except per share data)

Three months ended February 28 (29),

Year ended February 28 (29),

2013

2012

2013

2012

OPERATING DATA:

  Net revenues:

    Radio

$ 29,080

$    28,388

$ 138,630

$ 144,826

    Publishing

14,221

13,970

57,454

57,392

      Total net revenues

43,301

42,358

196,084

202,218

  Station operating expenses excluding

   depreciation and amortization expense:

    Radio

20,458

23,957

95,830

110,772

    Publishing

15,864

14,391

58,241

56,522

      Total station operating expenses excluding 

          depreciation and amortization expense 

36,322

38,348

154,071

167,294

  Corporate expenses excluding depreciation 

       and amortization expense

4,969

3,820

17,819

19,096

  Hungary litigation expense and related costs

596

201

1,381

871

  Depreciation and amortization

1,210

1,135

4,722

4,725

  Impairment loss

448

-

11,419

-

  Loss (gain) on sale of assets

106

6

(9,877)

798

  Operating (loss) income 

(350)

(1,152)

16,549

9,434

  Interest expense

(2,893)

(4,302)

(20,899)

(19,904)

  Loss on debt extinguishment 

(3,367)

(3)

(4,508)

(2,006)

  Gain on sale of controlling interest in Merlin Media LLC

-

60

-

31,865

  Other expense, net

(157)

(15,739)

(10)

(15,951)

  (Loss) income before income taxes and

   discontinued operations

(6,767)

(21,136)

(8,868)

3,438

  Benefit for income taxes

(2,091)

(624)

(7,039)

(32,287)

  Income (loss) from continuing operations

(4,676)

(20,512)

(1,829)

35,725

  Income (loss) from discontinued operations, net of tax

9,956

(2,147)

50,080

(4,997)

  Consolidated net income (loss)

5,280

(22,659)

48,251

30,728

  Net income attributable to noncontrolling interests

964

722

4,479

4,535

  Net income (loss) attributable to the Company

4,316

(23,381)

43,772

26,193

  Gain on extinguishment of preferred stock

-

6,057

-

61,892

  Preferred stock dividends

-

(902)

(1,806)

(8,591)

  Net income (loss) attributable to common shareholders

$   4,316

$ (18,226)

$  41,966

$   79,494

  Amounts attributable to common shareholders for basic earnings per share:

    Continuing operations

(5,640)

(16,070)

(8,114)

84,443

    Discontinued operations

9,956

(2,156)

50,080

(4,949)

      Net income (loss) attributable to common shareholders

4,316

(18,226)

41,966

79,494

  Amounts attributable to common shareholders for diluted earnings per share:

    Continuing operations

(5,640)

(16,070)

(8,114)

31,142

    Discontinued operations

9,956

(2,156)

50,080

(4,949)

      Net income (loss) attributable to common shareholders

4,316

(18,226)

41,966

26,193

  Basic net income (loss) per common share:

    Continuing operations

$    (0.14)

$      (0.42)

$     (0.21)

$       2.21

    Discontinued operations

0.25

(0.05)

1.29

(0.13)

      Net income (loss) attributable to common shareholders

$      0.11

$      (0.47)

$       1.08

$       2.08

  Diluted net income (loss) per common share:

    Continuing operations

$    (0.14)

$      (0.42)

$     (0.21)

$       0.69

    Discontinued operations

0.25

(0.05)

1.29

(0.11)

      Net income (loss) attributable to common shareholders

$      0.11

$      (0.47)

$       1.08

$       0.58

  Weighted average shares outstanding:

      Basic

39,532

38,542

39,034

38,293

      Diluted

39,532

38,542

39,034

44,953

OTHER DATA:

  Station operating income (See below)

7,838

4,709

42,865

35,070

  Cash paid for taxes, net of refunds

827

(270)

2,175

1,007

  Cash paid for interest

3,973

4,626

21,811

25,368

  Capital expenditures

1,071

2,271

3,364

5,122

 Noncash compensation by segment:

           Radio

$         90

$           23

$       575

$        120

           Publishing

(16)

6

277

26

           Corporate

544

342

2,090

946

                  Total

$       618

$         371

$    2,942

$     1,092

COMPUTATION OF STATION OPERATING INCOME:

  Operating income 

$     (350)

$    (1,152)

$  16,549

$     9,434

  Plus:  Depreciation and amortization

1,210

1,135

4,722

4,725

  Plus:  Hungary litigation expenses and related costs

596

201

1,381

871

  Plus:  Corporate expenses

4,969

3,820

17,819

19,096

  Plus:  Station noncash compensation

74

29

852

146

  Plus:  Impairment loss

448

-

11,419

-

  Less:  (Gain) loss on disposal of assets

106

6

(9,877)

798

  Station operating income

$    7,053

$      4,039

$  42,865

$   35,070

SELECTED BALANCE SHEET INFORMATION:

February 28, 2013

February 29, 2012

Total Cash and Cash Equivalents

$    8,735

$     5,619

Credit Agreement Debt excluding unamortized discount

$  67,000

$ 203,843

98.7FM Nonrecourse Debt

$  79,068

$             -

Senior Unsecured Notes

$           -

$   33,860

 

SOURCE Emmis Communications Corporation



RELATED LINKS

http://www.emmis.com