Emmis Pro Forma Domestic Radio Revenues up 5% in Third Quarter

Emmis' stations continue to outperform radio peers

Jan 10, 2013, 06:00 ET from Emmis Communications Corporation

INDIANAPOLIS, Jan. 10, 2013 /PRNewswire/ -- Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its third fiscal quarter ending November 30, 2012.

Pro forma for station divestitures, Emmis' domestic radio net revenues for the third fiscal quarter were up 5%.  On a reported basis, total radio net revenues were up 1% and total net revenues were down slightly.

"I couldn't be more pleased with the company's outstanding operating performance," Jeff Smulyan, Emmis Chairman & CEO, said. "Emmis radio station's revenue growth continues to outpace its markets.  While our markets were up 1 percent this quarter, Emmis stations saw an increase of 5 percent."

"With the refinancing of our entire capital structure that was completed after our quarter-end, we have dramatically reduced our interest expense and increased our ability to generate free cash flow going forward, completing the transformation of Emmis," Smulyan concluded.

Station operating income during the period was $13.8 million, compared to $10.0 million for the same quarter of the prior year.  Diluted net income per common share from continuing operations was $0.02, compared to $1.26 for the same quarter of the prior year. The decline is due primarily to the gain on the sale of stations WKQX-FM (101.1 MHz, Chicago, IL), WLUP-FM (97.9 MHz, Chicago, IL) and WRXP-FM (101.9 MHz, New York, NY) to Merlin Media coupled with related tax benefits recognized in 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 November 30,

%

Nine Months ended November 30,

%

2012

2011

Change

2012

2011

Change

Radio:

Reported net revenues

$            37,238

$            36,718

1%

$              118,085

$              126,292

-6%

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

(2,577)

(2,822)

(8,040)

(18,367)

Pro forma net revenues

$            34,661

$            33,896

2%

$              110,045

$              107,925

2%

Total Company:

Reported net revenues

$            53,414

$            53,568

0%

$              161,318

$              169,714

-5%

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

(2,577)

(2,822)

(8,040)

(18,367)

Pro forma net revenues

$            50,837

$            50,746

0%

$              153,278

$              151,347

1%

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 publicly traded radio portfolio in the United States based on total listeners. Emmis operates 19 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 November 30,

Nine months ended November 30,

2012

2011

2012

2011

OPERATING DATA:

  Net revenues:

    Radio

$                     37,238

$                    36,718

$                   118,085

$                 126,292

    Publishing

16,176

16,850

43,233

43,422

      Total net revenues

53,414

53,568

161,318

169,714

  Station operating expenses excluding

   depreciation and amortization expense:

    Radio

25,639

28,878

82,760

95,249

    Publishing

14,335

14,748

42,377

42,131

      Total station operating expenses excluding

          depreciation and amortization expense

39,974

43,626

125,137

137,380

  Corporate expenses excluding depreciation 

       and amortization expense

3,717

4,972

12,850

15,276

  Depreciation and amortization

1,416

1,410

4,201

4,871

  Impairment loss

-

-

10,971

-

  (Gain) loss on sale of assets

(221)

-

(10,227)

792

  Operating income 

8,528

3,560

18,386

11,395

  Interest expense

(5,754)

(4,341)

(19,198)

(16,194)

  Loss on debt extinguishment 

(56)

(525)

(1,141)

(2,003)

  Gain on sale of controlling interest in Merlin Media LLC

-

31,805

-

31,805

  Other (expense) income, net

236

(394)

211

(52)

  Income (loss) before income taxes and

   discontinued operations

2,954

30,105

(1,742)

24,951

  Provision (benefit) for income taxes

1,112

(28,702)

(4,447)

(29,332)

  Income from continuing operations

1,842

58,807

2,705

54,283

  Gain (loss) from discontinued operations, net of tax

3,794

(105)

40,266

(896)

  Consolidated net income

5,636

58,702

42,971

53,387

  Net income attributable to noncontrolling interests

1,036

1,069

3,515

3,813

  Net income attributable to the Company

4,600

57,633

39,456

49,574

  Gain on extinguishment of preferred stock

-

55,835

-

55,835

  Preferred stock dividends

-

(2,603)

(1,806)

(7,689)

  Net income attributable to common shareholders

$                       4,600

$                 110,865

$                     37,650

$                    97,720

  Amounts attributable to common shareholders for basic earnings per share:

    Continuing operations

806

110,962

(2,616)

98,559

    Discontinued operations

3,794

(97)

40,266

(839)

      Net income attributable to common shareholders

4,600

110,865

37,650

97,720

  Amounts attributable to common shareholders for diluted earnings per share:

    Continuing operations

806

57,730

(2,616)

50,413

    Discontinued operations

3,794

(97)

40,266

(839)

      Net income attributable to common shareholders

4,600

57,633

37,650

49,574

  Basic net income (loss) per common share:

    Continuing operations

$                          0.02

$                        2.90

$                        (0.07)

$                        2.58

    Discontinued operations

0.10

-

1.04

(0.02)

      Net income attributable to common shareholders

$                          0.12

$                        2.90

$                          0.97

$                        2.56

  Diluted net income (loss) per common share:

    Continuing operations

$                          0.02

$                        1.26

$                        (0.07)

$                        1.10

    Discontinued operations

0.08

 

-

1.04

(0.02)

      Net income attributable to common shareholders

$                          0.10

$                        1.26

$                          0.97

$                        1.08

  Weighted average shares outstanding:

      Basic

38,976

38,219

38,871

38,210

      Diluted

45,728

45,647

38,871

45,950

OTHER DATA:

  Station operating income (See below)

13,771

9,987

36,959

32,505

  Cash paid for taxes, net of refunds

617

354

1,348

1,277

  Cash paid for interest

2,461

8,765

17,838

20,742

  Capital expenditures

1,425

810

2,393

2,875

 Noncash compensation by segment:

           Radio

$                           195

$                           37

$                           485

$                         149

           Publishing

136

8

293

22

           Corporate

1,039

217

1,546

604

                  Total

$                       1,370

$                         262

$                       2,324

$                         775

COMPUTATION OF STATION OPERATING INCOME:

  Operating income 

$                       8,528

$                      3,560

$                     18,386

$                    11,395

  Plus:  Depreciation and amortization

1,416

1,410

4,201

4,871

  Plus:  Corporate expenses

3,717

4,972

12,850

15,276

  Plus:  Station noncash compensation

331

45

778

171

  Plus:  Impairment loss

-

-

10,971

-

  Less:  Gain (loss) on disposal of assets

(221)

-

(10,227)

792

  Station operating income

$                     13,771

$                      9,987

$                     36,959

$                    32,505

SELECTED BALANCE SHEET INFORMATION:

November 30, 2012

February 29, 2012

Total Cash and Cash Equivalents

$                     11,175

$                      5,619

Credit Agreement Debt

$                     40,503

$                  203,843

Senior Unsecured Notes

$                     40,029

$                    33,860

98.7FM Nonrecourse Debt

$                     80,028

$                              -

SOURCE Emmis Communications Corporation



RELATED LINKS

http://www.emmis.com