Emmis Announces First Quarter Earnings

Emmis Grows Operating Income; Sees Improved Q2

Jul 09, 2015, 06:00 ET from Emmis Communications Corporation

INDIANAPOLIS, July 9, 2015 /PRNewswire/ -- Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its first fiscal quarter ending May 31, 2015.

Emmis' radio net revenues for the first fiscal quarter were down 5.3%, from $45.0 million to $42.6 million. Per Miller Kaplan reporting, which excludes barter revenues and syndication revenues, Emmis' stations were down 6.0% compared to local radio market revenues down 4.9% during the fiscal quarter.  

Publishing net revenues were up 5.8% in the first fiscal quarter, driven by strong growth at Los Angeles, Texas Monthly and Atlanta.

For the first fiscal quarter, operating income was $7.6 million, compared to $6.6 million for the same quarter of the prior year.  Emmis' station operating income for the first fiscal quarter was $13.6 million, compared to $13.3 million for the same quarter of the prior year.

"While this was a challenging quarter, we are encouraged by what we see looking forward," said Jeff Smulyan, President & CEO of Emmis.  "Our Q2 radio revenues are pacing up low single digits, we had a record-setting Summer Jam concert in New York, and ratings are bouncing back in Los Angeles after some expected turbulence.

"The Emmis-created, industry-led initiative to make FM broadcast radio available on smartphones and tablets, NextRadio®, has incredible momentum," Smulyan continued. "The announcement last week that NextRadio is now available for download in the Amazon App Store is the first in what we hope will be a series of positive announcements.  I couldn't be more thrilled with the way our industry has come together to support NextRadio.

"Last Friday's decision by the Seventh Circuit Court of Appeals in our preferred stock case was particularly gratifying," added Smulyan. "We always knew that we had complied with Indiana's unique corporate law, and were very pleased that the court agreed."

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, July 23 by dialing 1-203-369-0276.

Emmis will host its Annual Shareholders' Meeting today at 11 am at Emmis Headquarters on Monument Circle in Indianapolis.

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 reasonsgenerally beyond our control;
  • increases in the costs of programming, including on-air talent;
  • 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 May 31,

2015

2014

OPERATING DATA:

  Net revenues:

    Radio

$                     42,593

$                    44,990

    Publishing

15,525

14,678

    Emerging Technologies

335

56

      Total net revenues

58,453

59,724

  Station operating expenses excluding

   depreciation and amortization expense and LMA fees:

    Radio

28,693

27,360

    Publishing

15,209

14,940

    Emerging Technologies

1,641

626

      Total station operating expenses excluding 

          depreciation and amortization expense and LMA fees 

45,543

42,926

  Corporate expenses excluding depreciation 

       and amortization expense

3,819

4,890

  LMA fees

-

3,825

  Hungary license litigation and related expenses

-

92

  Depreciation and amortization

1,450

1,353

  Gain on disposal of assets

-

(3)

  Operating income

7,641

6,641

  Interest expense

(4,546)

(1,600)

  Other income, net

10

11

  Income before income taxes

3,105

5,052

  Provision for income taxes

947

2,385

  Consolidated net income

2,158

2,667

  Net income attributable to noncontrolling interests

633

1,711

  Net income attributable to the Company

1,525

956

     Basic net income per common share

$                          0.04

$                        0.02

     Diluted net income per common share

$                          0.03

$                        0.02

     Basic weighted average shares outstanding

43,217

42,093

     Diluted weighted average shares outstanding

47,373

47,347

OTHER DATA:

  Station operating income (See below)

$                     13,634

$                    13,375

  Cash paid for income taxes, net

216

278

  Cash paid for interest

4,321

1,370

  Capital expenditures

421

625

 Noncash compensation by segment:

           Radio

$                           470

$                         270

           Publishing

228

132

           Emerging Technologies

26

-

           Corporate

1,380

546

                  Total

$                       2,104

$                         948

COMPUTATION OF STATION OPERATING INCOME:

  Operating income

$                       7,641

$                      6,641

  Plus:  Depreciation and amortization

1,450

1,353

  Plus:  Hungary litigation expense and related costs

-

92

  Plus:  Corporate expenses

3,819

4,890

  Plus:  Station noncash compensation

724

402

  Less:  Gain on sale of assets

-

(3)

  Station operating income

$                     13,634

$                    13,375

SELECTED BALANCE SHEET INFORMATION:

May 31, 2015

February 28, 2015

Total Cash and Cash Equivalents

$                       3,270

$                      3,669

Credit Agreement Debt

$                   195,537

$                  193,000

98.7FM Nonrecourse Debt

$                     69,208

$                    70,401

SOURCE Emmis Communications Corporation



RELATED LINKS

http://www.emmis.com