Townsquare Reports First Quarter 2017 Results

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May 9, 2017 7:00 AM UTC

GREENWICH, Conn., May 9, 2017 /PRNewswire/ -- Townsquare Media, Inc. (NYSE: TSQ) ("Townsquare," the "Company," "we," "us," or "our") announced today financial results for the first quarter ended March 31, 2017.

"2017 has started off well, with first quarter net revenue of $88.4 million, net loss of $3.0 million and Adjusted EBITDA of $10.1 million, in line with our expectations," commented Steven Price, Chairman and Chief Executive Officer of Townsquare.  "Our Local Marketing Solutions segment, which increased 1.2% over the prior year period, and 2.5% excluding the impact of political revenue, continues to show consistent, organic growth demonstrating the strength of our local products and services. Our local digital offerings have been especially strong, and we believe we will see continued strength as we begin to utilize our first party data capabilities in combination with our digital platform."

First Quarter Highlights*

  • As compared to the first quarter of 2016:
    • Net revenue decreased 6.4%, consistent with previously issued guidance
    • Local Marketing Solutions net revenue increased 1.2%
    • Entertainment net revenue decreased 35.8%
    • Net loss increased 117.5%
    • Adjusted EBITDA decreased 16.0%, consistent with previously issued guidance
  • Repaid $6.7 million of long-term debt

* See below for discussion of non-GAAP measures and reconciliations to GAAP measures.

Segment ReportingWe have two reportable segments, Local Marketing Solutions, which provides broadcast and digital products and solutions to advertisers and businesses within our local markets, and Entertainment, which provides live event experiences and music and lifestyle content directly to consumers, and promotion, advertising and product activations to local and national advertisers. Prior to the second quarter of 2016, the Company reported its results in two reportable segments, Local Advertising and Live Events, and reported the remainder of its business in its Other Media and Entertainment category. The prior Local Advertising segment, together with the Company's digital marketing and e-commerce solutions, which were previously part of the Other Media and Entertainment category, are now reported within Local Marketing Solutions. The Live Events segment, together with the Company's national digital assets which were previously part of the Other Media and Entertainment category, are now reported within Entertainment.

Quarter Ended March 31, 2017 Compared to the Quarter Ended March 31, 2016

Net RevenueNet revenue for the quarter ended March 31, 2017 decreased $6.0 million, or 6.4%, to $88.4 million, as compared to $94.4 million in the same period last year.  Local Marketing Solutions net revenue increased $0.9 million, or 1.2%, to $76.1 million and Entertainment net revenue decreased $6.9 million, or 35.8%, to $12.3 million, largely due to the timing of a live event and the sale of certain live events.  Excluding political revenue, net revenue decreased $5.1 million, or 5.4%, to $88.0 million and Local Marketing Solutions net revenue increased $1.8 million, or 2.5%, to $75.6 million.

Net LossNet loss for the quarter ended March 31, 2017 increased $1.6 million, or 117.5%, to $3.0 million, as compared to $1.4 million in the same period last year.

Adjusted EBITDAAdjusted EBITDA for the quarter ended March 31, 2017 decreased $1.9 million, or 16.0%, to $10.1 million, as compared to $12.0 million in the same period last year, largely due to the timing of a live event and the sale of certain live events.

Liquidity and Capital ResourcesAs of March 31, 2017, we had a total of $40.6 million of cash on hand and $50.0 million of available borrowing capacity under our revolving credit facility. As of March 31, 2017, we had $572.0 million of outstanding indebtedness, representing 5.5x and 5.1x gross and net leverage, respectively, based on Adjusted EBITDA for the twelve months ended March 31, 2017 of $104.9 million.

The table below presents a summary, as of May 8, 2017, of our outstanding common stock and securities convertible into common stock, excluding options issued under our 2014 Omnibus Incentive Plan.

Security

Number Outstanding1

Description

Class A common stock

13,810,113

One vote per share.

Class B common stock

3,022,484

10 votes per share.2

Class C common stock

1,636,341

No votes.2

Warrants

8,977,676

Each warrant is exercisable for one share of Class A common stock, at an exercise price of $0.0001 per share. The aggregate exercise price for all warrants currently outstanding is $898.3

Total

27,446,614

1 Each of the shares of common stock listed below, including the shares of Class A common stock issuable upon exercise of the warrants, has equal economic rights.

2 Each share converts into 1 share of Class A common stock upon transfer or at the option of the holder, subject to certain conditions, including compliance with FCC rules.

3 The warrants are fully vested and exercisable for shares of Class A common stock, subject to certain conditions, including compliance with FCC rules.

Conference CallTownsquare Media, Inc. will host a conference call to discuss certain first quarter 2017 financial results on Tuesday, May 9, 2017 at 8:00 a.m. Eastern Time. The conference call dial-in number is 1-877-407-0784 (U.S. & Canada) or 1-201-689-8560 (International) and the confirmation code is 13659635. A live webcast of the conference call will also be available on the equity investor relations page of the Company's website at www.townsquaremedia.com.

A replay of the conference call will be available through May 16, 2017. To access the replay, please dial 1-844-512-2921 (U.S. & Canada) or 1-412-317-6671 (International) and enter confirmation code 13659635. A web-based archive of the conference call will also be available at the above website for thirty days after the call.

About Townsquare Media, Inc.Townsquare is a media, entertainment and digital marketing solutions company principally focused on small and mid-sized markets across the U.S. Our assets include 312 radio stations and more than 325 local websites in 66 U.S. markets, a digital marketing solutions company serving approximately 11,200 small to medium sized businesses, approximately 550 live events with nearly 18 million attendees each year in the U.S. and Canada, and one of the largest digital advertising networks focused on music and entertainment reaching more than 50 million unique visitors each month. Our brands include iconic local media assets such as WYRK, KLAQ, K2 and NJ101.5; acclaimed music festivals such as Mountain Jam, WE Fest and the Taste of Country Music Festival;  unique touring lifestyle and entertainment events such as the America on Tap craft beer festival series, the Insane Inflatable 5K obstacle race series and North American Midway Entertainment, North America's largest mobile amusement company; and leading tastemaker music and entertainment owned and affiliated websites such as XXLmag.com, TasteofCountry.com, Loudwire.com and BrooklynVegan.com. For more information, please visit www.townsquaremedia.com.

Forward-Looking StatementsExcept for the historical information contained in this press release, the matters addressed are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "aim," "anticipate," "estimate," "expect," "forecast," "outlook," "potential," "project," "projection," "plan," "intend," "seek," "believe," "may," "could," "would," "will," "should," "can," "can have," "likely," the negatives thereof and other words and terms. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statement. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof. See "Risk Factors" and "Forward-Looking Statements" included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission on or about the date hereof, for a discussion of factors that could cause our actual results to differ from those expressed or implied by forward-looking statements. Townsquare Media, Inc. assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures and DefinitionsIn this press release, we refer to Adjusted EBITDA, Adjusted EBITDA Less Interest, Capex and Taxes, Adjusted Net Income and Adjusted Net Income Per Share, which are financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP").

We define Adjusted EBITDA as net income (loss) before the deduction of income taxes, other (income) expense (net), interest expense, cancellation and (repurchase) of debt, transaction costs, stock-based compensation, net (gain) loss on sale of assets, impairment of FCC licenses, impairment on investment and depreciation and amortization. Adjusted EBITDA Less Interest, Capex and Taxes is defined as Adjusted EBITDA less net cash interest expense, capital expenditures and cash paid for taxes. Adjusted Net Income is defined as net income (loss) before the deduction of income taxes, transaction costs, net (gain) loss on sale of assets and cancellation and (repurchase) of debt.  Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the weighted average shares outstanding. These measures do not represent, and should not be considered as alternatives to, net income (loss) or cash flows from operations, as determined under GAAP.  In addition, these non-GAAP measures may not be comparable to similarly-named measures reported by other companies.  Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are set forth in the tables below.

We use Adjusted EBITDA to facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting interest expense), taxation and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. We use Adjusted Net Income and Adjusted Net Income Per Share to assess total company operating performance on a consistent basis.  We believe that this measure, when considered together with our GAAP financial results, provides management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of transaction costs, net (gain) loss on sale of assets and cancellation and (repurchase) of debt.  Further, while discretionary bonuses for members of management are not determined with reference to specific targets, our Board of Directors may consider Adjusted EBITDA, Adjusted EBITDA Less Interest, Capex and Taxes, Adjusted Net Income and Adjusted Net Income Per Share when determining discretionary bonuses.

Investor RelationsClaire Yenicay(203) 900-5555[email protected]

 

TOWNSQUARE MEDIA, INC.

CONSOLIDATED BALANCE SHEETS

(in Thousands, Except Share and Per Share Data)

(unaudited)

March 31, 2017

December 31, 2016

ASSETS

Current assets:

Cash

$

40,632

$

51,540

Accounts receivable, net of allowance of $1,491 and $1,433, respectively

52,363

59,642

Prepaid expenses and other current assets

13,170

11,445

Total current assets

106,165

122,627

Property and equipment, net

140,863

139,607

Intangible assets, net

513,312

513,915

Goodwill

295,266

292,953

Investments

4,313

4,313

Other assets

10,444

7,290

Total assets

$

1,070,363

$

1,080,705

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

8,189

$

10,602

Current portion of long-term debt

48

6,901

Deferred revenue

23,360

17,213

Accrued expenses and other current liabilities

18,571

25,813

Accrued interest

9,135

4,622

Total current liabilities

59,303

65,151

Long-term debt, less current portion (net of deferred financing costs of $7,884 and $8,006, respectively)

564,060

564,315

Deferred tax liability

48,976

50,967

Other long-term liabilities

10,014

10,221

Total liabilities

682,353

690,654

Stockholders' equity:

Class A common stock, par value $0.01 per share; 300,000,000 shares authorized; 13,810,113 and 13,735,690 shares issued and outstanding, respectively

138

137

Class B common stock, par value $0.01 per share; 50,000,000 shares authorized; 3,022,484 shares issued and outstanding, respectively

30

30

Class C common stock, par value $0.01 per share; 50,000,000 shares authorized; 1,636,341 shares issued and outstanding, respectively

17

17

Total common stock

185

184

Additional paid-in capital

366,388

365,434

Retained earnings

21,386

24,450

Accumulated other comprehensive loss

(665)

(722)

Non-controlling interest

716

705

Total stockholders' equity

388,010

390,051

Total liabilities and stockholders' equity

$

1,070,363

$

1,080,705

 

 

TOWNSQUARE MEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in Thousands, Except Per Share Data)

(unaudited)

Three Months Ended March 31,

2017

2016

Net revenue

$

88,417

$

94,432

Operating costs and expenses:

Direct operating expenses, excluding depreciation, amortization and stock-based compensation

73,011

76,905

Depreciation and amortization

6,390

6,123

Corporate expenses

5,349

5,557

Stock-based compensation

188

252

Transaction costs

199

169

Net gain on sale of assets

(2)

(366)

    Total operating costs and expenses

85,135

88,640

    Operating income

3,282

5,792

Other expense (income):

Interest expense, net

8,254

8,565

Repurchase of debt

—

(34)

Other expense (income), net

33

(449)

    Loss before income taxes

(5,005)

(2,290)

Benefit for income taxes

(1,997)

(907)

Net loss

$

(3,008)

$

(1,383)

Net (loss) income attributable to:

     Controlling interests

$

(3,064)

$

(1,461)

     Non-controlling interests

56

78

Net loss per share:

     Basic

$

(0.16)

$

(0.08)

     Diluted

$

(0.16)

$

(0.08)

Weighted average shares outstanding:

     Basic

18,429

17,863

     Diluted

18,429

17,863

 

 

TOWNSQUARE MEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in Thousands)

(unaudited)

Three Months Ended March 31,

2017

2016

Cash flows from operating activities:

Net (loss) income attributable to:

Controlling interests

$

(3,064)

$

(1,461)

Non-controlling interests

56

78

Net loss

$

(3,008)

$

(1,383)

Adjustments to reconcile net loss to net cash from operating activities:

Depreciation and amortization

6,390

6,123

Amortization of deferred financing costs

471

380

Deferred income tax benefit

(1,997)

(907)

Provision for doubtful accounts

491

610

Stock-based compensation expense

188

252

Repurchase of debt

—

(34)

Write-off of deferred financing costs

83

—

Net gain on sale of assets

(2)

(366)

Changes in assets and liabilities, net of acquisitions:

Accounts receivable

5,602

6,353

Prepaid expenses and other assets

(4,903)

(7,332)

Accounts payable

(2,416)

(2,871)

Accrued expenses

(1,277)

(1,460)

Accrued interest

4,543

4,853

Other long-term liabilities

(208)

(277)

Net cash provided by operating activities

3,957

3,941

Cash flows from investing activities:

   Purchase of property and equipment

(5,653)

(6,496)

   Payments for acquisitions, net of cash received

(1,803)

—

   Acquisition of intangibles

(150)

—

   Proceeds from insurance settlement

—

451

   Proceeds from sale of assets

161

842

Net cash used in investing activities

(7,445)

(5,203)

Cash flows from financing activities:

   Repayment of long-term debt

(6,662)

(646)

   Debt financing costs

(432)

—

   Proceeds from exercise of employee stock options

254

—

Cash distributions to non-controlling interests

(45)

(29)

   Repayments of capitalized obligations

(568)

(42)

Net cash used in financing activities

(7,453)

(717)

Net effect of foreign currency exchange rate changes

33

(499)

Net decrease in cash and restricted cash

(10,908)

(2,478)

Cash and restricted cash:

Beginning of period

51,540

33,298

End of period

$

40,632

$

30,820

 

 

TOWNSQUARE MEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in Thousands)

(unaudited)

Three Months Ended March 31,

2017

2016

Supplemental Disclosure of Cash Flow Information:

Cash payments:

Interest

$

3,157

$

3,323

Income taxes

313

435

   Barter transactions:

Barter revenue – included in net revenue

$

4,869

$

5,076

Barter expense – included in direct operating expenses

2,725

3,080

Equity issued in respect of acquisitions:

    Common stock, joint venture acquisition

513

—

 

 

TOWNSQUARE MEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT

(in Thousands)

(unaudited)

Three Months Ended March 31,

2017

2016

Statement of Operations Data:

  Local Marketing Solutions net revenue

$

76,076

$

75,207

  Entertainment net revenue

12,341

19,225

Net revenue

88,417

94,432

Operating Costs and Expenses:

  Local Marketing Solutions direct operating expenses

55,332

54,165

  Entertainment direct operating expenses

17,679

22,740

Direct operating expenses, excluding depreciation, amortization and stock-based compensation

73,011

76,905

Depreciation and amortization

6,390

6,123

Corporate expenses

5,349

5,557

Stock-based compensation

188

252

Transaction costs

199

169

Net gain on sale of assets

(2)

(366)

Total operating costs and expenses

85,135

88,640

Operating income

3,282

5,792

Other expense (income):

Interest expense, net

8,254

8,565

Repurchase of debt

—

(34)

Other expense (income), net

33

(449)

Total other expense

8,287

8,082

    Loss before income taxes

(5,005)

(2,290)

Benefit for income taxes

(1,997)

(907)

Net loss

$

(3,008)

$

(1,383)

 

 

The following table reconciles on a GAAP basis net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Loss for the three months ended March 31, 2017 and 2016, respectively (dollars in thousands):

Three Months Ended March 31,

2017

2016

Net loss

$

(3,008)

$

(1,383)

  Benefit for income taxes

(1,997)

(907)

Income loss before taxes

(5,005)

(2,290)

Transaction costs

199

169

Net gain on sale of assets

(2)

(366)

Repurchase of debt

—

(34)

Adjusted loss before taxes

(4,808)

(2,521)

  Benefit for income taxes

(1,918)

(999)

Adjusted Net Loss

$

(2,890)

$

(1,522)

Adjusted Net Loss Per Share:

     Basic

$

(0.16)

$

(0.09)

     Diluted

$

(0.16)

$

(0.09)

Weighted average shares outstanding:

     Basic

18,429

17,863

     Diluted

18,429

17,863

 

 

The following table reconciles on a GAAP basis net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA and Adjusted EBITDA Less Interest, Capex and Taxes for the three months ended March 31, 2017 and 2016, respectively (dollars in thousands):

Three Months Ended March 31,

2017

2016

Net loss

$

(3,008)

$

(1,383)

  Benefit for income taxes

(1,997)

(907)

  Interest expense, net

8,254

8,565

  Transaction costs

199

169

  Depreciation and amortization

6,390

6,123

  Stock-based compensation

188

252

  Repurchase of debt

—

(34)

  Other(a)

31

(815)

Adjusted EBITDA

10,057

11,970

  Net cash interest expense

(3,157)

(3,323)

  Capital expenditures

(5,653)

(6,496)

  Cash paid for taxes

(313)

(435)

Adjusted EBITDA Less Interest, Capex and Taxes

$

934

$

1,716

(a) Other includes net gain on sale of assets and other expense (income), net.

 

 

The following table reconciles net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA on a quarterly basis for the twelve months ended March 31, 2017 (dollars in thousands):

Quarter Ended

TwelveMonthsEnded

June 30,2016

September 30,2016

December 31,2016

March 31,2017

March 31,2017

Net income (loss)

$

5,602

$

15,863

$

3,211

$

(3,008)

$

21,668

  Provision (benefit) for income taxes

3,683

10,493

3,771

(1,997)

15,950

  Interest expense, net

8,881

8,294

8,332

8,254

33,761

  Transaction costs

181

256

238

199

874

  Depreciation and amortization

6,003

5,686

6,164

6,390

24,243

  Stock-based compensation

204

206

3,591

188

4,189

  Impairment on investment

—

4,236

—

—

4,236

  Repurchase of debt

(427)

—

(85)

—

(512)

  Other(a)

1,123

(374)

(317)

31

463

Adjusted EBITDA

$

25,250

$

44,660

$

24,905

$

10,057

$

104,872

(a) Other includes net gain (loss) on sale of assets and other expense (income), net.

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/townsquare-reports-first-quarter-2017-results-300453705.html

SOURCE Townsquare Media, Inc.


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