Emmis Announces Third Quarter Earnings

07 Jan, 2016, 06:00 ET from Emmis Communications Corporation

INDIANAPOLIS, Jan. 7, 2016 /PRNewswire/ -- Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its third fiscal quarter ending November 30, 2015.

Emmis' radio net revenues for the third fiscal quarter were down 5.1%. Per Miller Kaplan reporting, which excludes barter revenues and syndication revenues, Emmis' third quarter radio revenues were down 5.2% compared to local radio market revenues up 0.2%.  Our Indianapolis, St. Louis, and Austin clusters all beat their markets for the quarter. Our radio station in Los Angeles, KPWR-FM, was substantially all of our radio division's shortfall against its markets due to the launch of a new direct competitor earlier this year.

Emmis' Publishing division revenues were down 7% for the quarter, and are flat year to date.

Station operating income for the third fiscal quarter was $16.3 million, compared to $18.1 million for the same quarter of the prior year.  For the third fiscal quarter, operating income was $11.6 million, compared to $13.1 million for the same quarter of the prior year. 

"Radio industry growth has been disappointing in 2015," said Jeff Smulyan, CEO of Emmis.  "Our markets are down 2.4% through the first eleven months of 2015.  This general decline, coupled with the competitive situation in Los Angeles, led us to take a series of steps yesterday, including staff reductions and pay cuts for senior executives, to restructure our expenses to better align them with the current operating environment. We remain confident that we have the best team in media and the solution, in NextRadio, to return the radio industry to growth.  Our ratings are quite strong in most of our markets, and our investments in content, sales hiring and training, and NextRadio and Digonex will begin to yield stronger results in 2016." 

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, January 21 by dialing 1-402-220-9730.

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. 

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;
  • competition from new or different media and technologies;
  • loss of key personnel;
  • 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;
  • fluctuations in the market price of publicly traded or other securities;
  • new or changing regulations of the Federal Communications Commission or other governmental agencies;
  • changes in radio audience measurement methodologies;
  • 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, amounts in thousands, except per share data)

Three months ended November 30,

Nine months ended November 30,

2015

2014

2015

2014

OPERATING DATA:

  Net revenues:

    Radio

$                     42,634

$                    44,905

$                   132,789

$                 137,493

    Publishing

16,658

17,906

46,775

46,697

    Emerging Technologies

322

149

985

318

      Total net revenues

59,614

62,960

180,549

184,508

  Station operating expenses excluding

   depreciation and amortization expense and LMA fees:

    Radio

27,352

28,683

87,925

87,213

    Publishing

14,310

15,005

43,557

44,458

    Emerging Technologies

1,992

1,252

5,449

2,488

      Total station operating expenses excluding 

          depreciation and amortization expense and LMA fees 

43,654

44,940

136,931

134,159

  Corporate expenses excluding depreciation 

       and amortization expense

2,810

3,241

10,116

11,472

  LMA fees

-

-

-

4,208

  Hungary license litigation and related expenses

-

188

-

472

  Depreciation and amortization

1,532

1,482

4,385

4,426

  Gain on contract settlement

-

-

-

(2,500)

  Loss on disposal of assets

-

3

-

-

  Operating income

11,618

13,106

29,117

32,271

  Interest expense

(4,768)

(5,395)

(14,259)

(11,873)

  Loss on debt extinguishment 

-

-

-

(1,455)

  Other income, net

7

51

845

230

  Income before income taxes

6,857

7,762

15,703

19,173

  Provision for income taxes

889

4,528

2,662

9,080

  Consolidated net income

5,968

3,234

13,041

10,093

  Net income attributable to noncontrolling interests

420

411

1,574

3,554

  Net income attributable to the Company

5,548

2,823

11,467

6,539

     Basic net income per common share

$                          0.12

$                        0.07

$                          0.26

$                        0.15

     Diluted net income per common share

$                          0.12

$                        0.06

$                          0.24

$                        0.14

     Basic weighted average shares outstanding

44,400

42,702

43,844

42,451

     Diluted weighted average shares outstanding

47,504

47,376

47,451

47,455

OTHER DATA:

  Station operating income (See below)

$                     16,325

$                    18,103

$                     45,228

$                    46,694

  Cash paid for income taxes, net

-

-

216

243

  Cash paid for interest

4,154

3,664

12,567

6,059

  Capital expenditures

662

890

1,943

2,565

 Noncash compensation by segment:

           Radio

$                           284

$                           60

$                       1,125

$                         375

           Publishing

28

23

385

178

           Emerging Technologies

53

-

100

-

           Corporate

539

514

3,059

1,575

                  Total

$                           904

$                         597

$                       4,669

$                      2,128

COMPUTATION OF STATION OPERATING INCOME:

  Operating income

$                     11,618

$                    13,106

$                     29,117

$                    32,271

  Plus:  Depreciation and amortization

1,532

1,482

4,385

4,426

  Plus:  Hungary litigation expense and related costs

-

188

-

472

  Plus:  Corporate expenses

2,810

3,241

10,116

11,472

  Plus:  Station noncash compensation

365

83

1,610

553

  Less:  Gain on contract settlement

-

-

-

(2,500)

  Less:  Loss on disposal of assets

-

3

-

-

  Station operating income

$                     16,325

$                    18,103

$                     45,228

$                    46,694

SELECTED BALANCE SHEET INFORMATION:

November 30, 2015

February 28, 2015

Total Cash and Cash Equivalents

$                       4,316

$                      3,669

Credit Agreement Debt

$                   188,687

$                  193,000

98.7FM Nonrecourse Debt

$                     66,692

$                    70,401

 

SOURCE Emmis Communications Corporation



RELATED LINKS

http://www.emmis.com