Entercom Communications Corp. Reports Third Quarter Results
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BALA CYNWYD, Pa.--(BUSINESS WIRE)-- Entercom Communications Corp. (NYSE: ETM) today reported financial results for the quarter ended September 30, 2009.
Third Quarter Highlights
-- Net revenues for the quarter decreased 14% to $99.8 million and station
expenses decreased 8% to $65.6 million
-- Station operating income decreased 23% to $34.2 million
-- EBITDA decreased 25% to $29.7 million
-- Net income per share increased from $0.12 to $0.50
-- Adjusted net income per share decreased 28% to $0.28
-- Free cash flow decreased 22% to $21.7 million
David J. Field, President and Chief Executive Officer stated: "Entercom's third quarter results improved sequentially from the second quarter as business conditions stabilized and the company's cost cutting measures continued to drive expenses lower. We are increasingly optimistic about 2010 based upon a number of indications of improving demand for advertising in the year ahead, particularly in light of easy comparative results after two years of cyclical decline across virtually all ad sectors. Furthermore, we believe that radio's strong audience listening trends and outstanding value proposition for advertisers position the industry to grow at the expense of certain competitive media experiencing significant audience erosion."
Additional Third Quarter Information
During the quarter, the Company entered into an agreement to sell certain of its tower facilities. The Company received $4.5 million of sale proceeds in the third quarter and expects to receive additional proceeds in the fourth quarter. In addition, the transaction provides for an earn-out based on the financial performance of the divested towers.
During the quarter, the Company reduced its outstanding net Senior and Senior Subordinated debt by $25.4 million. As of September 30, 2009, the Company had $20.1 million in cash and cash equivalents, $758.2 million of Senior Debt and $23.9 million of Senior Subordinated Notes. The Company repurchased $20.2 million of its Senior Subordinated Notes during the quarter.
Entercom's leverage ratio, as defined in its senior credit agreement, was 5.6x at the end of the period. Additional information regarding the Company's calculation of its leverage ratio under its senior credit agreement can be found on the Company's website: www.entercom.com.
Earnings Conference Call and Company Information
Entercom will hold a conference call regarding the quarterly earnings release on November 2, 2009 at 4:30 PM Eastern Time. Investors will have the opportunity to submit questions to the Company regarding the third quarter earnings release by emailing their inquiries to questions@Entercom.com. Questions should be sent at least 15 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 888-562-4914 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. is one of the five largest radio broadcasting companies in the United States, with a nationwide portfolio in excess of 100 stations in 23 markets, including San Francisco, Boston, Seattle, Denver, Portland, Sacramento and Kansas City. 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, Kansas City Royals, New Orleans Saints and Buffalo Sabres.
Entercom focuses on creating effective integrated marketing solutions for its customers that incorporate 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 and National Association of Broadcasters (NAB) Marconi Awards for excellence in radio broadcasting. In 2007, Forbes magazine named Entercom one of America's "Most Trustworthy Companies."
For more information, please visit www.entercom.com.
Certain Definitions
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 expenses, corporate non-cash compensation expense, station non-cash compensation expense, impairment loss and gain or loss on sale or disposition of assets.
EBITDA consists of income (loss) from continuing operations, adjusted to exclude: income taxes (benefit), total other expense (income), depreciation and amortization, time brokerage agreement fees (income), corporate and station non-cash compensation expense, impairment loss and gain or loss on sale or disposition of assets.
Free cash flow consists of operating income (loss): (i) plus depreciation and amortization, non-cash compensation expense, impairment loss and income (loss) from discontinued operations before income taxes (benefit), depreciation and amortization expense and impairment loss; and (ii) less net interest expense (excluding amortization of deferred financing costs), gains (loss) on sale of assets, taxes paid and capital expenditures.
Adjusted net income consists of net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations before income taxes (benefit); (ii) reported taxes; (iii) gain/loss on sale of assets, derivative instruments and investments; (iv) non-cash compensation expense; (v) other income; (vi) impairment loss; and (vii) gain/loss on early extinguishment of debt. For purposes of comparison, income taxes are reflected at the expected statutory federal and state tax rate of 42% without discrete items of tax and valuation allowances.
Adjusted net income per share includes any dilutive equivalent shares when not anti-dilutive.
Same station data 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.
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, 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.
Third Quarter 2009
Earnings Release
ENTERCOM COMMUNICATIONS CORP.
FINANCIAL DATA
(amounts in thousands, except per
share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
STATEMENTS OF OPERATIONS
Net Revenues $99,765 $115,555 $276,436 $334,725
Station Expenses 65,575 71,341 190,546 208,843
Station Expenses - Non-Cash 698 739 1,460 1,852
Compensation
Corporate Expenses 4,502 4,821 13,149 15,571
Corporate Expenses - Non-Cash 1,300 1,354 4,237 5,959
Compensation
Depreciation And Amortization 4,120 4,474 12,660 16,009
Impairment Loss - - 67,676 184,587
Net Time Brokerage Agreement Income - (45) (2) (188)
Net (Gain) Loss On Sale Or Disposition 149 62 149 (9,937)
of Assets
Total Operating Expenses 76,344 82,746 289,875 422,696
Operating Income (Loss) 23,421 32,809 (13,439) (87,971)
Other Expense (Income) Items:
Interest Expense 7,856 10,421 23,828 34,831
Net Gain On Early Extinguishment Of (3,132) (1,633) (19,260) (4,017)
Debt
Interest And Dividend Income (18) (32) (35) (299)
Other Income - - (380) (3,256)
Net Gain On Derivative Instruments - - - (34)
Net Loss On Investments - 250 - 461
Total Other Expense (Income) 4,706 9,006 4,153 27,686
Income (Loss) From Continuing
Operations Before Income Taxes 18,715 23,803 (17,592) (115,657)
(Benefit)
Income Taxes (Benefit) 440 8,549 710 (44,006)
Income Taxes From Change In Valuation - 11,480 - 11,699
Allowance Reserve
Total Income Tax Provision (Benefit) 440 20,029 710 (32,307)
Income (Loss) From Continuing 18,275 3,774 (18,302) (83,350)
Operations
Income (Loss) From Discontinued
Operations, Net Of Income Taxes - 480 - (3,497)
(Benefit)
Net Income (Loss) $18,275 $4,254 $(18,302) $(86,847)
Net Income (Loss) Per Share - Basic
Income (Loss) From Continuing $0.52 $0.11 $(0.52) $(2.25)
Operations
Income (Loss) From Discontinued
Operations, Net Of Income Taxes - 0.01 - (0.10)
(Benefit)
Net Income (Loss) Per Share - Basic $0.52 $0.12 $(0.52) $(2.35)
Net Income (Loss) Per Share - Diluted
Income (Loss) From Continuing $0.50 $0.11 $(0.52) $(2.25)
Operations
Income (Loss) From Discontinued
Operations, Net Of Income Taxes - 0.01 - (0.10)
(Benefit)
Net Income (Loss) Per Share - Diluted $0.50 $0.12 $(0.52) $(2.35)
Weighted Common Shares Outstanding - 35,292 36,367 35,327 36,990
Basic
Weighted Common Shares Outstanding - 36,621 36,375 35,327 36,990
Diluted
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Capital Expenditures $474 $1,484 $1,714 $5,982
Income Taxes Paid $- $- $192 $22
SELECTED BALANCE SHEET DATA September 30,
2009 2008
Cash And Cash Equivalents $20,109 $1,912
Working Capital 2,489 52,962
Total Assets 931,382 1,667,973
Senior Debt 758,179 783,202
7.625% Senior Subordinated Notes 23,867 92,004
Finance Method Lease Obligations 4,531 -
Total Shareholders' Equity 86,928 546,892
OTHER FINANCIAL DATA Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Dividends Paid Per Common Share $- $0.10 $- $0.58
Reconciliation Of GAAP Station
Operating Expenses To Station Expenses
Station Operating Expenses $66,273 $72,080 $192,006 $210,695
Station Expenses - Non-Cash (698) (739) (1,460) (1,852)
Compensation
Station Expenses 65,575 71,341 190,546 208,843
Reconciliation Of GAAP Corporate
General & Administrative Expenses To
Corporate Expenses
Corporate General & Administrative $5,802 $6,175 $17,386 $21,530
Expenses
Corporate Expenses - Non-Cash (1,300) (1,354) (4,237) (5,959)
Compensation
Corporate Expenses 4,502 4,821 13,149 15,571
Reconciliation Of GAAP Operating
Income (Loss) To Station Operating
Income
Operating Income (Loss) $23,421 $32,809 $(13,439) $(87,971)
Corporate Expenses 4,502 4,821 13,149 15,571
Corporate Expenses - Non-Cash 1,300 1,354 4,237 5,959
Compensation
Station Expenses - Non-Cash 698 739 1,460 1,852
Compensation
Depreciation And Amortization 4,120 4,474 12,660 16,009
Impairment Loss - - 67,676 184,587
Net Time Brokerage Agreement Income - (45) (2) (188)
Net (Gain) Loss On Sale Or Disposition 149 62 149 (9,937)
of Assets
Station Operating Income 34,190 44,214 85,890 125,882
Reconciliation Of GAAP Income (Loss)
From Continuing Operations To EBITDA:
Income (Loss) From Continuing $18,275 $3,774 $(18,302) $(83,350)
Operations
Income Taxes (Benefit) 440 20,029 710 (32,307)
Total Other Expense 4,706 9,006 4,153 27,686
Corporate Expenses - Non-Cash 1,300 1,354 4,237 5,959
Compensation
Station Expenses - Non-Cash 698 739 1,460 1,852
Compensation
Depreciation And Amortization 4,120 4,474 12,660 16,009
Impairment Loss - - 67,676 184,587
Net Time Brokerage Agreement Income - (45) (2) (188)
Net (Gain) Loss On Sale Or Disposition 149 62 149 (9,937)
of Assets
EBITDA $29,688 $39,393 $72,741 $110,311
Reconciliation Of GAAP Income (Loss)
From Continuing Operations To Free
Cash Flow:
Income (Loss) From Continuing $18,275 $3,774 $(18,302) $(83,350)
Operations
Depreciation And Amortization 4,120 4,474 12,660 16,009
Impairment Loss - - 67,676 184,587
Deferred Financing Costs Included In 371 407 1,147 1,249
Interest Expense
Non-Cash Compensation Expense 1,998 2,093 5,697 7,811
Net (Gain) Loss On Sale Or Disposition 149 62 149 (9,937)
Of Assets
Net Gain On Derivative Instruments - - - (34)
Net Loss On Investments - 250 - 461
Net Gain On Early Extinguishment Of (3,132) (1,633) (19,260) (4,017)
Debt
Other Income - - (380) (3,256)
Income Taxes (Benefit) 440 20,029 710 (32,307)
Capital Expenditures (474) (1,484) (1,714) (5,982)
Income Taxes Paid - - (192) (22)
Income From Discontinued Operations,
Before Income Taxes, D&A Expense And - 66 29
Impairment Loss
Free Cash Flow $21,747 $28,038 $48,191 $71,241
Reconciliation Of GAAP Operating
Income (Loss) To Free Cash Flow:
Operating Income (Loss) $23,421 $32,809 $(13,439) $(87,971)
Depreciation and Amortization 4,120 4,474 12,660 16,009
Impairment Loss - - 67,676 184,587
Non-Cash Compensation Expense 1,998 2,093 5,697 7,811
Interest Expense, Net of Interest And
Dividend Income And Deferred Financing (7,467) (9,982) (22,646) (33,283)
Costs
Capital Expenditures (474) (1,484) (1,714) (5,982)
Net (Gain) Loss On Sale Or Disposition 149 62 149 (9,937)
Of Assets
Income Taxes Paid - - (192) (22)
Income From Discontinued Operations,
Before Income Taxes, D &A Expense And - 66 - 29
Impairment Loss
Free Cash Flow $21,747 $28,038 $48,191 $71,241
Reconciliation Of GAAP Net Income
(Loss) To Adjusted Net Income
Net Income (Loss) $18,275 $4,254 $(18,302) $(86,847)
Income (Loss) From Discontinued
Operations, Net Of Income Taxes - 480 - (3,497)
(Benefit)
Income Taxes (Benefit) 440 20,029 710 (32,307)
Income (Loss) From Continuing
Operations Before Income Taxes 18,715 23,803 (17,592) (115,657)
(Benefit)
Net (Gain) Loss on Sale Or Disposal Of 149 62 149 (9,937)
Assets
Net Gain On Derivative Instruments - - - (34)
Impairment Loss - - 67,676 184,587
Net Loss On Investments - 250 - 461
Net Gain On Extinguishment Of Debt (3,132) (1,633) (19,260) (4,017)
Other Income - - (380) (3,256)
Non-Cash Compensation Expense 1,998 2,093 5,697 7,811
Adjusted Income Before Income Taxes 17,730 24,575 36,290 59,958
Income Taxes 7,447 10,322 15,242 25,182
Adjusted Net Income $10,283 $14,253 $21,048 $34,776
Weighted Common Shares Outstanding - 36,621 36,375 35,327 36,990
Diluted, As Reported
Weighted Common Shares Outstanding -
Dilutive Adjustment Required As Not - - 651 34
Anti-Dilutive
Weighted Common Shares Outstanding - 36,621 36,375 35,978 37,024
Diluted
Adjusted Net Income Per Share - $0.28 $0.39 $0.59 $0.94
Diluted
PRIOR YEAR'S DATA
Fourth Quarter 2008
Three Months
Ended
December 31, 2008
Net Revenues $104,097
Reconciliation Of GAAP Station Operating Expenses To Station
Expenses:
Station Operating Expenses $65,492
Station Expenses - Non-Cash Compensation (700)
Station Expenses $64,792
Source: Entercom Communications Corp.
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