Emmis Announces Third Quarter Earnings
Emmis' radio net revenues for the third fiscal quarter were down slightly, from $42.6 million to $42.5 million. Per Miller Kaplan reporting, which excludes barter and syndication revenues, Emmis radio revenues were down 1.8% in markets up 2.5%.
For the third fiscal quarter, operating income rose to $23.8 million from $11.6 million in the same quarter of the prior year, due to a gain on the sale of Texas Monthly, which closed during the third quarter.
Reported publishing net revenues were down 18% in the third fiscal quarter, from $16.6 million to $13.6 million. Pro forma for the sale of Texas Monthly, publishing net revenues were down 6%.
On August 18, the Company announced that it was exploring strategic alternatives for its publishing division, excluding Indianapolis Monthly magazine. The Company also announced it was exploring strategic alternatives for its Terre Haute radio stations and WLIB-AM in New York. Emmis expects to close on the sale of its Terre Haute radio stations at the end of January, and is working to close additional asset sales before the end of its fiscal year in February.
“Emmis Radio is not accustomed to underperforming its markets,” said Jeff Smulyan, Chairman & CEO of Emmis. “I was disappointed in our performance, but remain hopeful that recent ratings gains in Los Angeles and Austin, coupled with continued stellar performance in St. Louis, will lead to better performance in fiscal 2018.
“The general sluggishness in the radio industry makes the need for NextRadio all the more important,” Smulyan continued. “NextRadio, the smartphone app that provides free, portable FM radio listening, recently surpassed 10 million downloads and 25 million listening hours. The Samsung Galaxy S7 and S7 Edge are now FM-enabled across all major wireless carriers in the United States and we reached an agreement with Sprint that keeps NextRadio preloaded on their Android devices.
“If NextRadio succeeds, as I believe it will, it will help solve major challenges for every radio station, including ours: establishing a one-to-one relationship with our listeners, regaining our portability, and making us relevant to a generation that thinks terrestrial radio is uncool. NextRadio gives us new, interactive revenue opportunities with current and potential advertisers – and it takes the compelling content created every day and provides a new platform for it,” Smulyan said.
Smulyan also noted that Digonex, the dynamic pricing service that Emmis began operating in June 2014, has begun integrating with several ticketing platforms, helping to accelerate client adoption. Booked business heading into calendar 2017 is nearly triple that of calendar 2016.
A conference call regarding earnings will be hosted today at 9 a.m. Eastern by dialing 1-517-623-4891. Questions may be submitted via email to [email protected]. A playback of the call will be available until 6 p.m. Eastern on Thursday, January 19 by dialing 1-203-369-3180.
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 19 FM and 4 AM radio stations in New York, Los Angeles, St. Louis, Austin (Emmis has a 50.1% controlling interest in Emmis' radio stations located there), Indianapolis and Terre Haute, IN. 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.