EX-99.1 2 d651467dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

For Immediate Release

November 6, 2018

  

Contacts:

Joseph Jaffoni, Jennifer Neuman,

Norberto Aja

JCIR

(212) 835-8500

etm@jcir.com

ENTERCOM COMMUNICATIONS CORP.

REPORTS THIRD QUARTER RESULTS

Philadelphia, PA—Entercom Communications (NYSE: ETM) today reported financial results for the quarter ended September 30, 2018.

Third Quarter Highlights

 

   

Net revenues for the quarter were $378.5 million, compared to $122.3 million in the third quarter of 2017. On a same-station basis, net revenues for the quarter were $378.5 million compared to $395.2 million in the third quarter of 2017

 

   

Total operating expense for the quarter was $299.8 million, compared to $108.8 million in the third quarter of 2017

 

   

Total same-station cash expense for the quarter was $291.8 million, a decrease of 4.5% compared to $305.5 million in the third quarter of 2017

 

   

Operating income for the quarter was $78.7 million, compared to $13.5 million in the third quarter of 2017

 

   

Net income per diluted share for the quarter was $0.26, compared to $0.09 in the third quarter of 2017

 

   

Pro Forma Adjusted EBITDA for the quarter was $86.7 million, compared to $89.7 million in the third quarter of 2017

David J. Field, President and Chief Executive Officer, stated: “As we close in on the one year anniversary of our transformational merger with CBS Radio, we are very pleased with our progress and excited about the momentum we are building across multiple growth initiatives. Revenues have improved significantly since the first half of the year and the fourth quarter is on track for significant growth, currently pacing up 4%. Expenses are down significantly, driven by synergies, and we anticipate solid double digit EBITDA growth in the fourth quarter. In addition, we have now completed all of our previously announced divestitures and land sales, generating roughly $200 million in cash proceeds.”

Additional Information

During the 3rd quarter, the Company completed its sale of four radio stations in San Francisco and four radio stations in Sacramento to Bonneville International Corporation (“Bonneville”) for $141 million. These stations had been held separate from the Company through an FCC divestiture trust and were being operated by Bonneville under a time brokerage agreement.

The Company closed the sale of a tower site adjacent to O’Hare Airport in Chicago for $46 million and the sale of an office building on Venice Boulevard in Los Angeles for $26 million during the 3rd quarter. The Company plans to use a portion of these proceeds to fund facilities consolidation projects in two of its markets and to purchase this property through a tax-free 1031 exchange. As a result, the sale proceeds are held in a qualified intermediary for tax purposes and are classified on the Company’s balance sheet as restricted cash.


In September, the Company completed its acquisition of Philadelphia station 101.1 MORE FM (WBEB-FM) for $56.4 million in cash. At the same time, the Company completed the sale of 92.5 XTU (WXTU-FM) in Philadelphia, PA to Beasley Broadcast Group, Inc. for $38.0 million in cash. The Company used the WXTU-FM sale proceeds and cash on hand to fund the WBEB-FM acquisition. The transactions are immediately accretive to Entercom and are leverage neutral.

As of September 30, 2018, the Company had outstanding $1,525 million of senior debt under its credit facilities and $400 million in senior notes (both amounts exclude unamortized premium from purchase price accounting). In addition, the Company had $270 million in cash on hand, including $70 million in restricted cash.

Earnings Conference Call and Company Information

Entercom will hold a conference call and simultaneous webcast regarding the quarterly earnings release on Tuesday November 6, 2018 at 9:00 AM Eastern Time. The public may access the conference call by dialing Toll Free: 888-889-0278 and Toll: 312-470-7365, passcode: Entercom (domestic and international callers). Participants may also listen to a live webcast of the call by visiting the “Investor Relations” section of Entercom’s website at www.entercom.com. A replay of the conference call will be available for one week by dialing 800-846-1910. A webcast replay of the conference call will be available beginning six hours after the call on the Company’s website for a period of two weeks. Additional information is available on the Company’s website at 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.

Same Station Net Revenues consist of net revenues adjusted for material station acquisitions and dispositions as if these acquisitions and dispositions had occurred as of the beginning of the comparable prior period.

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 general and administrative expenses; non-cash compensation expense (which is otherwise included in station operating expenses); impairment loss; merger and acquisition costs, other expenses related to the refinancing; non-recurring expenses recognized for restructuring charges or similar costs, including transition and integration costs; and gain or loss on sale or disposition of assets.


Adjusted EBITDA consists of net income (loss) available to common shareholders, adjusted to exclude: income taxes (benefit); income from discontinued operations, net of income taxes or benefit; total other income or expense; net interest expense; depreciation and amortization; time brokerage agreement fees (income); non-cash compensation expense (which is otherwise included in station operating expenses and corporate G&A expenses); other expenses related to the refinancing; impairment loss, merger and acquisition costs, preferred stock dividends; non-recurring expense recognized for restructuring charges or similar costs, including transition and integration costs, and gain or loss on sale or disposition of assets.

Pro Forma Adjusted EBITDA consists of Adjusted EBITDA to exclude those costs incurred by the prior owner that were not assumed by the Company or were unusual in nature and adjustments for material acquisitions and divestitures as if these acquisitions and divestitures had occurred as of the beginning of the period presented.

Adjusted Free Cash Flow consists of operating income (loss): (i) plus depreciation and amortization; net (gain) loss on sale or disposal of assets; non-cash compensation expense (which is otherwise included in station operating expenses and corporate general and administrative expenses); impairment loss; merger and acquisition costs; other expenses related to the refinancing; other income and non-recurring expenses recognized for restructuring charges or similar costs, including transition and integration costs; income from discontinued operations (excluding income taxes or tax benefit); and (ii) less net interest expense (excluding amortization of deferred financing costs or debt premium), preferred stock dividends, taxes paid, capital expenditures and amortizable intangibles.

Adjusted Net Income (Loss) consists of net income (loss) available to common shareholders adjusted to exclude: (i) income taxes (benefit) as reported, including income taxes otherwise included in income from discontinued operations; (ii) gain/loss on sale of assets, derivative instruments and investments; (iii) non-cash compensation expense; (iv) other income; (v) impairment loss; (vi) merger and acquisition costs, other expenses related to the refinancing, loss on extinguishment of debt and non-recurring expenses recognized for restructuring charges or similar costs, including transition and integration costs; and (vii) gain/loss on early extinguishment of debt. For purposes of comparability, income taxes are reflected at the expected statutory federal and state income tax rate of 30% and 40% without discrete items of tax for the years 2018 and 2017, respectively.

Adjusted Net Income (Loss) Per Share—Diluted includes any dilutive equivalent shares when not anti-dilutive. Convertible Preferred Stock is treated as if it never converted for the purposes of Adjusted Net Income (Loss) Per Share—Diluted.

Non-GAAP Financial Measures

It is important to note that station operating income, station expense, corporate expense, same station net revenues, Adjusted EBITDA, Pro Forma Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income (Loss) Per Share—Diluted and Adjusted 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 (Loss) and Adjusted Net Income (Loss) Per Share—Diluted). The adjustments exclude gain/loss on sale of assets, derivative instruments, and investments; non-cash compensation expense, other income, impairment loss, merger and acquisition costs, other expenses related to the refinancing, and gain/loss on early extinguishment of debt and non-recurring expenses recognized for restructuring charges or similar costs, including transition and integration costs. For purposes of comparability, income taxes for 2018 and 2017 are reflected at the expected federal and state income tax rate of 30% and 40%, respectively, without adjustment for discrete tax adjustments.

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 S-4, 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.


About Entercom Communications Corp.

Entercom Communications Corp. (NYSE: ETM) is a leading American media and entertainment company reaching and engaging over 100 million people each week through its premier collection of highly rated, award winning radio stations, digital platforms and live events. As one of the country’s two largest radio broadcasters, Entercom offers integrated marketing solutions and delivers the power of local connection on a national scale with coverage of close to 90% of persons 12+ in the top 50 markets. Entercom is the #1 creator of live, original, local audio content and the nation’s unrivaled leader in news and sports radio. Learn more about Philadelphia-based Entercom at www.entercom.com, Facebook and Twitter (@Entercom). For further information, or to receive future Entercom Communications news announcements via e-mail, please contact JCIR at 212/835-8500 or etm@jcir.com.


ENTERCOM COMMUNICATIONS CORP.

FINANCIAL DATA

(amounts in thousands, except per share data)

(unaudited)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2018     2017     2018     2017  

STATEMENTS OF OPERATIONS

        

Net Revenues

   $ 378,508     $ 122,299     $ 1,051,192     $ 346,270  
  

 

 

   

 

 

   

 

 

   

 

 

 

Station Expenses

     277,998       87,492       805,919       255,085  

Station Expense—Non-Cash Compensation

     1,653       361       5,295       937  

Corporate Expenses

     13,781       8,137       47,472       25,084  

Corporate Expenses—Non-Cash Compensation

     2,116       1,198       6,126       3,692  

Depreciation And Amortization

     10,608       2,904       29,745       8,068  

Time Brokerage Agreement Expense (Income)

     (150     —         (1,242     34  

Merger And Acquisition Costs

     697       8,825       2,768       24,925  

Impairment Loss

     —         —         28,988       441  

Restructuring Charges

     852       —         3,019       —    

Integration Costs

     2,761       —         21,984       —    

Net (Gain) Loss On Sale Or Disposition of Assets

     (10,541     (103     (10,856     13,155  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Expenses

     299,775       108,814       939,218       331,421  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income

     78,733       13,485       111,974       14,849  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Interest Expense

     25,923       6,476       75,033       18,586  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (Loss) Before Income Taxes

     52,810       7,009       36,941       (3,737

Income Taxes (Benefit)

     16,220       2,909       12,960       (4,921
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income (Loss) Available To The Company—Continuing Operations

     36,590       4,100       23,981       1,184  

Preferred Stock Dividend

     —         663       —         1,763  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income (Loss) Available To Common Shareholders—Continuing Operations

     36,590       3,437       23,981       (579

Income From Discontinued Operations, Net Of Income Taxes

     358       —         1,530       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income (Loss) Available To Common Shareholders

   $ 36,948     $ 3,437     $ 25,511     $ (579
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income (Loss) From Continuing Operations Available To Common Shareholders—Basic

   $ 0.26     $ 0.09     $ 0.17     $ (0.01
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income (Loss) From Continuing Operations Available To Common Shareholders—Diluted

   $ 0.26     $ 0.09     $ 0.17     $ (0.01
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividends Declared And Paid Per Common Share

   $ 0.09     $ 0.275     $ 0.27     $ 0.425  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted Common Shares Outstanding—Basic

     138,740       38,955       138,901       38,948  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted Common Shares Outstanding—Diluted

     139,103       39,728       139,685       38,948  
  

 

 

   

 

 

   

 

 

   

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

        

Capital Expenditures, Including Amortizable Intangibles

   $ 6,969     $ 5,675     $ 25,955     $ 12,719  

Income Taxes Paid

   $ (15   $ 175     $ 18,821     $ 352  

Cash Dividends On Common Stock Declared And Paid

   $ 12,487     $ 10,713     $ 37,403     $ 16,550  

Cash Dividends On Preferred Stock Declared And Paid

   $ —       $ 550     $ —       $ 1,650  


SELECTED BALANCE SHEET DATA

        
     September 30,
2018
    December 31,
2017
             

Cash and Cash Equivalents

   $ 200,190     $ 34,167      

Restricted Cash

   $ 70,217     $ —        

Senior Debt—Term B-1 Loan (Includes Current Portion)

   $ 1,320,025     $ 1,330,000      

Senior Debt— Revolver (Includes Current Portion)

   $ 205,000     $ 143,000      

Senior Notes

   $ 400,000     $ 400,000      

Total Shareholders’ Equity

   $ 1,739,390     $ 1,764,360      

OTHER FINANCIAL DATA

        
     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2018     2017     2018     2017  

Reconciliation Of GAAP Net Revenues To Same Station Net Revenues

        

Net Revenues

   $ 378,508     $ 122,299     $ 1,051,192     $ 346,270  

Net Acquisitions And Divestitures Of Radio Stations

     —         272,889       —         779,569  
  

 

 

   

 

 

   

 

 

   

 

 

 

Same Station Net Revenues

   $ 378,508     $ 395,188     $ 1,051,192     $ 1,125,839  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation Of GAAP Station Operating Expenses To Station Expenses

        

Station Operating Expenses

   $ 279,651     $ 87,853     $ 811,214     $ 256,022  

Station Expenses—Non-Cash Compensation

     (1,653     (361     (5,295     (937
  

 

 

   

 

 

   

 

 

   

 

 

 

Station Expenses

   $ 277,998     $ 87,492     $ 805,919     $ 255,085  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation Of GAAP Corporate General & Administrative Expenses To Corporate Expenses

        

Corporate General & Administrative Expenses

   $ 15,897     $ 9,335     $ 53,598     $ 28,776  

Corporate Expenses—Non-Cash Compensation

     (2,116     (1,198     (6,126     (3,692
  

 

 

   

 

 

   

 

 

   

 

 

 

Corporate Expenses

   $ 13,781     $ 8,137     $ 47,472     $ 25,084  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation Of GAAP Operating Income To Station Operating Income

        

Operating Income

   $ 78,733     $ 13,485     $ 111,974     $ 14,849  

Corporate Expenses

     13,781       8,137       47,472       25,084  

Corporate Expenses—Non-Cash Compensation

     2,116       1,198       6,126       3,692  

Station Expenses—Non-Cash Compensation

     1,653       361       5,295       937  

Depreciation And Amortization

     10,608       2,904       29,745       8,068  

Merger And Acquisition Costs

     697       8,825       2,768       24,925  

Restructuring Charges

     852       —         3,019       —    

Impairment Loss

     —         —         28,988       441  

Integration Costs

     2,761       —         21,984       —    

Net Time Brokerage Agreement Expense (Income)

     (150     —         (1,242     34  

Net Gain (Loss) On Sale Or Disposition of Assets

     (10,541     (103     (10,856     13,155  
  

 

 

   

 

 

   

 

 

   

 

 

 

Station Operating Income

   $ 100,510     $ 34,807     $ 245,273     $ 91,185  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation Of GAAP Net Income (Loss) Available To Common Shareholders To Adjusted EBITDA To Pro Forma Adjusted EBITDA

        

Net (Income) Loss Available To Common Shareholders

   $ 36,948     $ 3,437     $ 25,511     $ (579

Income Taxes (Benefit)

     16,220       2,909       12,960       (4,921

Income From Discontinued Operations, Net Of Income Taxes

     (358     —         (1,530     —    

Net Interest Expense

     25,923       6,476       75,033       18,586  

Corporate Expenses—Non-Cash Compensation

     2,116       1,198       6,126       3,692  

Station Expenses—Non-Cash Compensation

     1,653       361       5,295       937  

Depreciation And Amortization

     10,608       2,904       29,745       8,068  

Time Brokerage Agreement Expense (Income)

     (150     —         (1,242     34  

Preferred Stock Dividend

     —         663       —         1,763  

Merger And Acquisition Costs

     697       8,825       2,768       24,925  

Restructuring Charges

     852       —         3,019       —    

Integration Costs

     2,761       —         21,984       —    

Transition Costs And Non-Recurring Expenses Otherwise Included In Corporate Expenses

     —         —         1,100       1,419  

Impairment Loss

     —         —         28,988       441  

Net Gain (Loss) On Sale Or Disposition of Assets

     (10,541     (103     (10,856     13,155  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     86,729       26,670       198,901       67,520  

Net Of Acquisitions And Divestitures

     —         62,932         183,536  

CBS Radio Costs Incurred To Separate From Its Parent

     —         102         1,388  
  

 

 

   

 

 

   

 

 

   

 

 

 

Pro Forma Adjusted EBITDA

   $ 86,729     $ 89,704     $ 198,901     $ 252,444  
  

 

 

   

 

 

   

 

 

   

 

 

 


Reconciliation Of GAAP Net Income (Loss) Available To Common Shareholders To Adjusted Free Cash Flow

        

Net Income (Loss) Available To Common Shareholders

   $ 36,948     $ 3,437     $ 25,511     $ (579

Depreciation And Amortization

     10,608       2,904       29,745       8,068  

Deferred Financing Costs Included In Interest Expense

     798       586       2,389       1,752  

Amortization Debt Premium Included In Interest Expense

     (715     —         (2,147     —    

Non-Cash Compensation Expense

     3,769       1,559       11,421       4,629  

Merger And Acquisition Costs

     697       8,825       2,768       24,925  

Integration Costs

     2,761       —         21,984       —    

Restructuring Charges

     852       —         3,019       —    

Transition Costs And Non-Recurring Expenses Otherwise Included In Corporate Expenses

     —         —         1,100       1,419  

Impairment Loss

     —         —         28,988       441  

Net (Gain) Loss On Sale Or Disposition of Assets

     (10,541     (103     (10,856     13,155  

Income Taxes (Benefit)

     16,220       2,909       12,960       (4,921

Income Taxes Otherwise Included In Income From Discontinued Operations

     286       —         709       —    

Capital Expenditures, Including Amortizable Intangibles

     (6,969     (5,675     (25,955     (12,719

Income Taxes Paid

     15       (175     (18,821     (352
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Free Cash Flow

   $ 54,729     $ 14,267     $ 82,815     $ 35,818  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation Of GAAP Net Income (Loss) Available To Common Shareholders To Adjusted Net Income

        

Net Income (Loss) Available To Common Shareholders

   $ 36,948     $ 3,437     $ 25,511     $ (579

Preferred Stock Dividend

     —         663       —         1,763  

Income Taxes (Benefit)

     16,220       2,909       12,960       (4,921

Income Taxes Included In Income From Discontinued Operations

     286       —         709       —    

Merger And Acquisition Costs

     697       8,825       2,768       24,925  

Transition Costs And Non-Recurring Expenses Otherwise Included In Corporate Expenses

     —         —         1,100       1,419  

Impairment Loss

     —         —         28,988       441  

Integration Costs

     2,761       —         21,984       —    

Restructuring Charges

     852       —         3,019       —    

Net (Gain) Loss On Sale Or Disposition of Assets

     (10,541     (103     (10,856     13,155  

Non-Cash Compensation Expense

     3,769       1,559       11,421       4,629  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Income Before Income Taxes

     50,992       17,290       97,604       40,832  

Income Taxes

     15,298       6,916       29,281       16,333  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income Available To The Company

     35,694       10,374       68,323       24,499  

Preferred Stock Dividend

     —         663       —         1,763  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income

   $ 35,694     $ 9,711     $ 68,323     $ 22,736  
  

 

 

   

 

 

   

 

 

   

 

 

 

Numerator For Purposes Of Computing Adjusted Net Income (Loss) Per Share—Diluted

        

Adjusted Net Income (Loss)

   $ 35,694     $ 9,711     $ 68,323     $ 22,736  

Preferred Stock Dividend, Treated As If Preferred Never Converted

     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 35,694     $ 9,711     $ 68,323     $ 22,736  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted Average Diluted Shares Outstanding For Purposes Of Computing Adjusted Net Income Per Share—Diluted

        

Weighted Common Shares Outstanding—Diluted As Reported

     139,103       39,728       139,685       38,948  

Preferred Stock Dividend, Treated As If Preferred Never Converted

     —         —         —         —    

Diluted Shares Excluded When Reporting A Net Loss

     —         —           974  
  

 

 

   

 

 

   

 

 

   

 

 

 
     139,103       39,728       139,685       39,922  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted Net Income (Loss) Per Share—Diluted

   $ 0.26     $ 0.24     $ 0.49     $ 0.57