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Entercom Communications Third Quarter Net Revenues Increase 2%

Entercom Communications Corp. (NYSE: ETM) today reported financial results for the quarter ended September 30, 2019.

Third Quarter Highlights

  • Net revenues for the quarter were $386.1 million, up 2.0% compared to $378.5 million in the third quarter of 2018
  • Operating income for the quarter was $79.5 million, compared to $78.7 million in the third quarter of 2018
  • Adjusted EBITDA for the quarter was $98.0 million, up 13% compared to $86.7 million in the third quarter of 2018
  • Net income per diluted share for the quarter was $0.28, compared to $0.26 per diluted share in the third quarter of 2018
  • Adjusted net income per diluted share for the quarter was $0.32, up 23% compared to $0.26 per diluted share in the third quarter of 2018

“I am pleased to report that Entercom delivered strong organic growth in the third quarter with Adjusted EBITDA up 13% and Adjusted Net Income Per Share up 23%. Revenues increased 2% (just under 3% ex-political) driven by digital, national and network,” stated David Field, Chairman, President and Chief Executive Officer, Entercom. “In October, we announced the launch of DVR-like functionality for live radio on our RADIO.COM app, becoming the first company to offer that important product feature. This new feature and our recent acquisitions of podcasters Cadence 13 and Pineapple Street Studios highlight the multiple ways we are working to enhance our product line and grow our relationships with our listeners and customers.”

Additional Information

In October, the Company completed its acquisition of leading podcaster Cadence 13, Inc. (“Cadence 13”) by purchasing the remaining shares in Cadence 13 that it did not already own for $24.3 million in cash. The Company initially acquired a 45% interest in Cadence 13 in July 2017 for $9.7 million. The total investment by Entercom to acquire Cadence 13, including both its initial investment and the October 2019 transaction, was $34 million.

As of September 30, 2019, the Company had outstanding $1.0 billion of senior debt under its credit facilities, $325 million in second-lien notes and $400 million in senior notes (the amounts of senior debt and senior notes both exclude unamortized premium). In addition, the Company had $45 million in cash on hand.

Earnings Conference Call and Company Information

Entercom will hold a conference call and simultaneous webcast regarding the quarterly earnings release on Friday November 8, 2019 at 10:00 AM Eastern Time. The public may access the conference call by dialing Toll Free: (888) 889-0278 and Toll: (773) 799-3659, 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) 685-0912. 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.

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, loss on early extinguishment of debt, and gain or loss on sale or disposition of assets.

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 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), Adjusted Income Taxes Paid, capital expenditures and amortizable intangibles.

Net Capital Expenditures consists of capital expenditures, including amortizable intangibles, adjusted to subtract reimbursed tenant improvement allowances.

Adjusted Income Taxes Paid consist of income tax paid, adjusted to exclude taxes paid related to the gain/loss on sale or exchange of radio station assets; and taxes paid related to the gain/loss on the sale of redundant property.

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) impairment loss; (v) merger and acquisition costs, and non-recurring expenses recognized for restructuring charges or similar costs, including transition and integration costs; (vi) other expenses related to refinancing 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% without discrete items of tax.

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, Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income (Loss) Per Share – Diluted, Adjusted Free Cash Flow, Net Capital Expenditures and Adjusted Income Taxes Paid 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 are reflected at the expected federal and state income tax rate of 30%, 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 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 170 million people monthly 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

Nine Months Ended

September 30,

September 30,

2019

2018

2019

2018

STATEMENTS OF OPERATIONS

Net Revenues

$

386,141

$

378,508

$

1,075,811

$

1,051,192

Station Expenses

272,005

277,998

797,502

805,919

Station Expense - Non-Cash Compensation

1,107

1,653

3,765

5,295

Corporate Expenses

17,178

13,781

51,141

47,472

Corporate Expenses - Non-Cash Compensation

2,234

2,116

6,521

6,126

Depreciation And Amortization

11,183

10,608

33,252

29,745

Time Brokerage Agreement Expense (Income)

13

(150

)

106

(1,242

)

Merger And Acquisition Costs

434

697

476

2,768

Impairment Loss

-

-

-

28,988

Restructuring Charges

1,577

852

5,953

3,019

Integration Costs

689

2,761

3,280

21,984

Other Expenses Related To Refinancing

-

-

1,864

-

Net (Gain) Loss On Sale Or Disposition of Assets

231

(10,541

)

(2,683

)

(10,856

)

Total Operating Expenses

306,651

299,775

901,177

939,218

Operating Income

79,490

78,733

174,634

111,974

Net Interest Expense

25,256

25,923

75,420

75,033

Loss On Early Extinguishment Of Debt

-

-

1,781

-

Income (Loss) Before Income Taxes

54,234

52,810

97,433

36,941

Income Taxes (Benefit)

16,026

16,220

30,110

12,960

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

38,208

36,590

67,323

23,981

Income From Discontinued Operations, Net Of Income Taxes

-

358

-

1,530

Net Income (Loss) Available To Common Shareholders

$

38,208

$

36,948

$

67,323

$

25,511

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

$

0.28

$

0.26

$

0.49

$

0.17

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

$

0.28

$

0.26

$

0.49

$

0.17

Dividends Declared And Paid Per Common Share

$

0.02

$

0.09

$

0.20

$

0.27

Weighted Common Shares Outstanding – Basic

136,449

138,740

137,944

138,901

Weighted Common Shares Outstanding – Diluted

136,453

139,103

138,295

139,685

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Net Capital Expenditures

$

20,658

$

5,680

$

58,067

$

23,621

Adjusted Income Taxes Paid

$

-

$

-

$

8,461

$

18,187

Cash Dividends On Common Stock Declared And Paid

$

2,677

$

12,487

$

27,594

$

37,403

SELECTED BALANCE SHEET DATA

September 30,

December 31,

2019

2018

Cash and Cash Equivalents

$

45,335

$

122,893

Restricted Cash

$

-

$

69,365

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

$

866,700

$

1,291,700

Senior Debt - Revolver (Includes Current Portion)

$

134,000

$

180,000

Senior Secured Notes

$

325,000

$

-

Senior Notes

$

400,000

$

400,000

Total Shareholders' Equity

$

1,367,870

$

1,334,260

OTHER FINANCIAL DATA

Three Months Ended

Nine Months Ended

September 30,

September 30,

2019

2018

2019

2018

Reconciliation Of GAAP Operating Income To Station Operating Income

Operating Income

$

79,490

$

78,733

$

174,634

$

111,974

Corporate Expenses

17,178

13,781

51,141

47,472

Corporate Expenses - Non-Cash Compensation

2,234

2,116

6,521

6,126

Station Expenses - Non-Cash Compensation

1,107

1,653

3,765

5,295

Depreciation And Amortization

11,183

10,608

33,252

29,745

Merger And Acquisition Costs

434

697

476

2,768

Restructuring Charges

1,577

852

5,953

3,019

Impairment Loss

-

-

-

28,988

Other Expenses Related To Refinancing

-

-

1,864

-

Integration Costs

689

2,761

3,280

21,984

Net Time Brokerage Agreement Expense (Income)

13

(150

)

106

(1,242

)

Net Gain (Loss) On Sale Or Disposition of Assets

231

(10,541

)

(2,683

)

(10,856

)

Station Operating Income

$

114,136

$

100,510

$

278,309

$

245,273

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

Net (Income) Loss Available To Common Shareholders

$

38,208

$

36,948

$

67,323

$

25,511

Income Taxes (Benefit)

16,026

16,220

30,110

12,960

Income From Discontinued Operations, Net Of Income Taxes

-

(358

)

-

(1,530

)

Net Interest Expense

25,256

25,923

75,420

75,033

Corporate Expenses - Non-Cash Compensation

2,234

2,116

6,521

6,126

Station Expenses - Non-Cash Compensation

1,107

1,653

3,765

5,295

Depreciation And Amortization

11,183

10,608

33,252

29,745

Time Brokerage Agreement Expense (Income)

13

(150

)

106

(1,242

)

Merger And Acquisition Costs

434

697

476

2,768

Restructuring Charges

1,577

852

5,953

3,019

Integration Costs

689

2,761

3,280

21,984

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

1,000

-

1,000

1,100

Impairment Loss

-

-

-

28,988

Other Expenses Related To Refinancing

-

-

1,864

-

Loss On Early Extinguishment Of Debt

-

-

1,781

-

Net Gain (Loss) On Sale Or Disposition of Assets

231

(10,541

)

(2,683

)

(10,856

)

Adjusted EBITDA

$

97,958

$

86,729

$

228,168

$

198,901

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

Net Income (Loss) Available To Common Shareholders

$

38,208

$

36,948

$

67,323

$

25,511

Depreciation And Amortization

11,183

10,608

33,252

29,745

Deferred Financing Costs Included In Interest Expense

755

798

2,227

2,389

Amortization Debt Premium Included In Interest Expense

(678

)

(715

)

(2,248

)

(2,147

)

Non-Cash Compensation Expense

3,341

3,769

10,286

11,421

Merger And Acquisition Costs

434

697

476

2,768

Integration Costs

689

2,761

3,280

21,984

Restructuring Charges

1,577

852

5,953

3,019

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

1,000

-

1,000

1,100

Impairment Loss

-

-

-

28,988

Net (Gain) Loss On Sale Or Disposition of Assets

231

(10,541

)

(2,683

)

(10,856

)

Other Expenses Related To Refinancing

-

-

1,864

-

Loss On Early Extinguishment Of Debt

-

-

1,781

-

Income Taxes (Benefit)

16,026

16,220

30,110

12,960

Income Taxes Otherwise Included In Income From Discontinued Operations

-

286

-

709

Net Capital Expenditures, Including Amortizable Intangibles

(20,658

)

(5,680

)

(58,067

)

(23,621

)

Adjusted Income Taxes Paid

-

-

(8,461

)

(18,187

)

Adjusted Free Cash Flow

$

52,108

$

56,003

$

86,093

$

85,783

Reconciliation Of Capital Expenditures, Including Amortizable Intangibles, To Net Capital Expenditures

Capital Expenditures, Including Amortizable Intangibles

$

(22,862

)

$

(6,969

)

$

(63,575

)

$

(25,955

)

Reimbursed Tenant Improvement Allowance

2,204

1,289

5,508

2,334

Net Capital Expenditures

$

(20,658

)

$

(5,680

)

$

(58,067

)

$

(23,621

)

Reconciliation Of Income Taxes Paid To Adjusted Income Taxes Paid

Income Taxes Paid

$

(3,935

)

$

-

$

(18,481

)

$

(18,836

)

Income Taxes Paid Related to Gain/Loss On Sale Or Exchange Of Radio Station Assets

-

-

894

649

Income Taxes Paid Related to Gain/Loss On Sale Of Redundant Properties

3,935

-

9,126

-

Adjusted Income Taxes Paid

$

-

$

-

$

(8,461

)

$

(18,187

)

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

Net Income (Loss) Available To Common Shareholders

$

38,208

$

36,948

$

67,323

$

25,511

Income Taxes (Benefit)

16,026

16,220

30,110

12,960

Income Taxes Otherwise Included In Income From Discontinued Operations

-

286

-

709

Merger And Acquisition Costs

434

697

476

2,768

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

1,000

-

1,000

1,100

Other Expenses Related To Refinancing

-

-

1,864

-

Impairment Loss

-

-

-

28,988

Integration Costs

689

2,761

3,280

21,984

Restructuring Charges

1,577

852

5,953

3,019

Loss On Early Extinguishment Of Debt

-

-

1,781

-

Net (Gain) Loss On Sale Or Disposition of Assets

231

(10,541

)

(2,683

)

(10,856

)

Non-Cash Compensation Expense

3,341

3,769

10,286

11,421

Adjusted Income Before Income Taxes

61,506

50,992

119,390

97,604

Income Taxes

18,452

15,298

35,817

29,281

Adjusted Net Income

$

43,054

$

35,694

$

83,573

$

68,323

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

Weighted Common Shares Outstanding - Diluted As Reported

136,453

139,103

138,295

139,685

Diluted Shares Excluded When Reporting A Net Loss

-

-

-

-

136,453

139,103

138,295

139,685

Adjusted Net Income (Loss) Per Share – Diluted

$

0.32

$

0.26

$

0.60

$

0.49

Contacts:

Joseph Jaffoni, Jennifer Neuman, Norberto Aja
JCIR
(212) 835-8500
etm@jcir.com

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