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Emmis Announces Third Quarter Earnings

  (January 11, 2018)

INDIANAPOLIS, Jan. 11, 2018 /PRNewswire/ -- Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its third fiscal quarter ending November 30, 2017. 

Emmis' radio net revenues for the third fiscal quarter were $34.0 million, compared to $42.5 million in the prior year.  Due to the sale of the company's Terre Haute radio stations in January 2017, KPWR-FM in Los Angeles in August 2017, and magazine sales last fiscal year, reported results are not comparable year-over year.  Emmis pro forma radio revenues per Miller Kaplan (which excludes barter and syndication revenues), were down 4% in markets that were down 2%.  Excluding political advertising, Emmis pro forma radio revenues in the third quarter would have been down 3%.

"Overall it was a disappointing quarter, but I am encouraged going forward by the ratings trends at our radio stations.  This fiscal year, our radio stations have been growing their ratings vis-à-vis our competitors, which should manifest itself in better revenue performance in Q4 and into the next fiscal year," said Jeff Smulyan, CEO & Chairman of the Board of Emmis.



"Another bright spot is the continuing progress of NextRadio, the Emmis-developed app embraced by the radio industry that provides a unique, measurable platform for radio content," Smulyan added. "This week at the Consumer Electronics Show in Las Vegas, NextRadio announced a first-to-market connected car solution: JVCKENWOOD has adopted NextRadio's technology to provide an enhanced local FM radio listening experience. Samsung, the largest Android handset maker in the world, is the latest device OEM to continue its support for NextRadio by unlocking the FM chip in upcoming smartphone models in the U.S. and Canada. In addition, NextRadio recently had a significant win when a major prepaid wireless carrier in the United States agreed to begin preloading NextRadio on its devices starting in early 2018.  These are terrific wins and sustain our momentum."

A conference call regarding earnings will be hosted today at 9 a.m. Eastern today by dialing 1-517-623-4891. Questions may be submitted via email to [email protected]. A digital playback of the call will be available until Thursday, January 18 by dialing 1-203-369-0773.

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.

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®

Emmis Communications Corporation is a diversified media company, principally focused on radio broadcasting. Emmis owns 15 FM and 3 AM radio stations in New York, St. Louis, Austin (Emmis has a 50.1% controlling interest in Emmis' radio stations located there) and Indianapolis. Emmis also developed and licenses TagStation®, a cloud-based software platform that allows a broadcaster to manage album art, metadata and enhanced advertising on its various broadcasts, and developed NextRadio®, a smartphone application that marries over-the-air FM radio broadcasts with visual and interactive features on smartphones.

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 technologies;
  • 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;
  • 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;
  • 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,












2017


2016


2017


2016

OPERATING DATA:









  Net revenues:









    Radio


$                     33,980


$                    42,462


$                   114,450


$                 131,133

    Publishing


1,129


13,633


3,119


39,344

    Emerging Technologies


236


204


788


598

      Total net revenues


35,345


56,299


118,357


171,075

  Station operating expenses excluding









   depreciation and amortization expense:









    Radio


23,933


28,979


79,948


87,915

    Publishing


1,131


13,828


3,590


40,265

    Emerging Technologies


2,922


2,619


9,582


7,226

      Total station operating expenses excluding 









          depreciation and amortization expense 


27,986


45,426


93,120


135,406

  Corporate expenses excluding depreciation 









       and amortization expense


2,500


3,397


7,781


8,894

  Depreciation and amortization


880


1,132


2,739


3,746

  Impairment loss on intangible assets


-


-


-


2,988

  Loss (gain) on sale of assets, net of disposition costs


46


(17,491)


(76,660)


(17,491)

  Loss on disposal of property and equipment


1


-


13


125










  Operating income


3,932


23,835


91,364


37,407

  Interest expense


(3,000)


(4,481)


(12,214)


(13,929)

  Loss on debt extinguishment 


(139)


(478)


(2,662)


(478)

  Other income, net


10


10


24


142










  Income before income taxes


803


18,886


76,512


23,142

  Provision for income taxes


371


629


4,743


1,968










  Consolidated net income


432


18,257


71,769


21,174

  Net income attributable to noncontrolling interests


711


581


2,358


477










  Net (loss) income attributable to the Company


(279)


17,676


69,411


20,697



















     Basic net (loss) income per common share


$                        (0.02)


$                        1.46


$                          5.63


$                        1.73

     Diluted net (loss) income per common share


$                        (0.02)


$                        1.43


$                          5.53


$                        1.70










     Basic weighted average shares outstanding


12,347


12,114


12,321


11,989

     Diluted weighted average shares outstanding


12,347


12,387


12,554


12,163



















OTHER DATA:









  Station operating income (See below)


$                       7,453


$                    11,094


$                     25,657


$                    36,424

  Cash paid for income taxes, net


2,197


-


2,178


112

  Cash paid for interest


2,237


4,139


10,558


12,082

  Capital expenditures


353


692


1,191


1,403










 Noncash compensation by segment:









           Radio


$                             68


$                         133


$                          346


$                         533

           Publishing


3


67


6


166

           Emerging Technologies


23


21


68


56

           Corporate


526


480


1,596


1,462

                  Total


$                           620


$                         701


$                       2,016


$                      2,217










COMPUTATION OF STATION OPERATING INCOME:









  Operating income


$                        3,932


$                    23,835


$                     91,364


$                    37,407

  Plus:  Depreciation and amortization


880


1,132


2,739


3,746

  Plus:  Corporate expenses


2,500


3,397


7,781


8,894

  Plus:  Station noncash compensation


94


221


420


755

  Plus:  Impairment loss on intangible assets


-


-


-


2,988

  Plus/Less:  Loss/Gain on sale of assets, net of disposition costs

46


(17,491)


(76,660)


(17,491)

  Plus:  Loss on disposal of property and equipment


1


-


13


125

  Station operating income


$                       7,453


$                    11,094


$                     25,657


$                    36,424



















SELECTED BALANCE SHEET INFORMATION:


November 30, 2017


February 28, 2017














Total Cash and Cash Equivalents


$                       3,897


$                    11,349





Credit Agreement Debt


$                     78,451


$                  152,245





98.7FM Nonrecourse Debt


$                     55,471


$                    59,958





Other Nonrecourse Debt


$                       9,971


$                      8,807





 

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SOURCE Emmis Communications Corporation

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