EMMIS COMMUNICATIONS CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 7, 2015

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For Immediate Release
Thursday, January 8, 2015
Contacts: Ryan Hornaday, SVP/Finance & Treasurer
rhornaday@emmis.com
Patrick Walsh, CFO/COO, pwalsh@emmis.com
317.266.0100

Emmis Announces Third Quarter Earnings
Emmis Radio Stations Up 6% Against Markets Down 2%

Emmis’ radio net revenues for the third fiscal quarter were up 29%, from $34.8 million to $44.9 million. This includes reported revenue from New York’s WBLS 107.5 FM and WLIB 1190 AM, which Emmis began operating pursuant to a Local Marketing Agreement (“LMA”) on March 1, 2014. On a pro forma basis, assuming results for WBLS and WLIB were included in the same quarter of the prior year and consistent with Miller Kaplan reporting, which excludes barter revenues and syndication revenues, Emmis’ radio net revenues would have been up 6%. This compares favorably to Emmis’ local radio market revenues, which were down 1.6% during the fiscal quarter on the same basis.

Consistent with Miller Kaplan reporting, which excludes barter revenues and syndication revenues, Emmis’ pro forma radio net revenues are pacing up mid-single digits for its fourth fiscal quarter.

For the third fiscal quarter, operating income was $13.1 million, compared to $8.7 million for the same quarter of the prior year. Emmis’ station operating income for the third fiscal quarter was $18.1 million, compared to $14.1 million for the same quarter of the prior year.
“It is a credit to our employees that Emmis’ stations again dramatically outperformed our markets, marking the 12th consecutive month of share gains. Power 106 in LA was up 18% in a flat market, and our New York cluster was up for the quarter and is now significantly outperforming the NY market,” Jeff Smulyan, President & CEO of Emmis said. “With an improving labor market and lower energy prices helping to put more money into the consumer’s hands, we are excited about the economic backdrop as we head into 2015.”

“NextRadio, the Emmis-led industry initiative to make FM broadcast radio available on smartphones and tablets, launched a new version in October with LiveGuideTM that has been extremely well received by consumers,” Smulyan added. “NextRadio is pre-loaded in 33 smartphone models, with more coming in 2015, and we’ve had more than 1.4 million activations. All major radio companies support the effort, and our integrated auto platform, with our strategic partner, iBiquity, is being unveiled at CES in Las Vegas this week. I couldn’t be more pleased with the effort and the momentum we have coming into the new year.”
    
A conference call regarding earnings will be hosted today at 9 a.m. Eastern by dialing 517-623-4891. Questions may be submitted via email to ir@emmis.com. A replay of the call will be available until 6 p.m. on Thursday, January 22 by dialing 203-369-4012.

Emmis has included supplemental 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®
About Emmis Communications
Emmis Communications Corporation is a diversified media company, principally focused on radio broadcasting. Emmis operates the 9th largest radio portfolio in the United States based on total listeners. 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. 

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,
 
 
 
 
 
 
 
 
 
 
 
2014
 
2013
 
2014
 
2013
OPERATING DATA:
 
 
 
 
 
 
 
 
  Net revenues:
 
 
 
 
 
 
 
 
    Radio
 
$
44,905

 
$
34,811

 
$
137,493

 
$
112,967

    Publishing
 
17,906

 
17,767

 
46,697

 
45,135

    Emerging Technologies
 
149

 
43

 
318

 
72

      Total net revenues
 
62,960

 
52,621

 
184,508

 
158,174

Station operating expenses excluding depreciation and amortization expense and LMA fees:
 
 
 
 
 
 
 
 
    Radio
 
28,683

 
22,540

 
87,213

 
72,733

    Publishing
 
15,005

 
15,031

 
44,458

 
43,770

    Emerging Technologies
 
1,252

 
977

 
2,488

 
1,695

Total station operating expenses excluding depreciation and amortization expense and LMA fees
 
44,940

 
38,548

 
134,159

 
118,198

Corporate expenses excluding depreciation and amortization expense
 
3,241

 
3,653

 
11,472

 
13,123

  LMA fees
 
—

 
—

 
4,208

 
—

  Hungary license litigation and related expenses
 
188

 
500

 
472

 
1,795

  Depreciation and amortization
 
1,482

 
1,218

 
4,426

 
3,607

  Gain on contract settlement
 
—

 
—

 
(2,500
)
 
—

  Loss (gain) on disposal of assets
 
3

 
(9
)
 
—

 
(10
)
  Operating income
 
13,106

 
8,711

 
32,271

 
21,461

  Interest expense
 
(5,395
)
 
(1,712
)
 
(11,873
)
 
(5,441
)
  Loss on debt extinguishment
 
—

 
(653
)
 
(1,455
)
 
(653
)
  Other income, net
 
51

 
54

 
230

 
94

  Income before income taxes
 
7,762

 
6,400

 
19,173

 
15,461

  Provision for income taxes
 
4,528

 
732

 
9,080

 
911

  Consolidated net income
 
3,234

 
5,668

 
10,093

 
14,550

  Net income attributable to noncontrolling interests
 
411

 
1,395

 
3,554

 
4,230

  Net income attributable to the Company
 
2,823

 
4,273

 
6,539

 
10,320

  Gain on extinguishment of preferred stock
 
—

 
—

 
—

 
325

  Net income attributable to common shareholders
 
$
2,823

 
$
4,273

 
$
6,539

 
$
10,645

 
 
 
 
 
 
 
 
 
     Basic net income per common share
 
$
0.07

 
$
0.11

 
$
0.15

 
$
0.26

     Diluted net income per common share
 
$
0.06

 
$
0.09

 
$
0.14

 
$
0.23

 
 
 
 
 
 
 
 
 
     Basic weighted average shares outstanding
 
42,702

 
40,477

 
42,451

 
40,343

     Diluted weighted average shares outstanding
 
47,376

 
46,212

 
47,455

 
45,657

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
 
 
 
 
 
 
 
 
Three months ended November 30,
 
Nine months ended November 30,
 
 
 
 
 
 
 
 
 
 
 
2014
 
2013
 
2014
 
2013
OTHER DATA:
 
 
 
 
 
 
 
 
  Station operating income (See below)
 
$
18,103

 
$
14,077

 
$
46,694

 
$
41,446

  (Refund from) cash paid for income taxes, net
 
—

 
(211
)
 
243

 
(1,015
)
  Cash paid for interest
 
3,664

 
1,536

 
6,059

 
4,821

  Capital expenditures
 
890

 
420

 
2,565

 
2,277

 
 
 
 
 
 
 
 
 
 Noncash compensation by segment:
 
 
 
 
 
 
 
 
           Radio
 
$
60

 
$
—

 
$
375

 
$
980

           Publishing
 
23

 
4

 
178

 
490

           Corporate & Emerging Technologies
 
514

 
467

 
1,575

 
2,083

                  Total
 
$
597

 
$
471

 
$
2,128

 
$
3,553

 
 
 
 
 
 
 
 
 
COMPUTATION OF STATION OPERATING INCOME:
 
 
 
 
 
 
 
 
  Operating income
 
$
13,106

 
$
8,711

 
$
32,271

 
$
21,461

  Plus: Depreciation and amortization
 
1,482

 
1,218

 
4,426

 
3,607

  Plus: Hungary litigation expense and related costs
 
188

 
500

 
472

 
1,795

  Plus: Corporate expenses
 
3,241

 
3,653

 
11,472

 
13,123

  Plus: Station noncash compensation
 
83

 
4

 
553

 
1,470

  Less: Gain on contract settlement
 
—

 
—

 
(2,500
)
 
—

  Less: Loss (gain) on sale of assets
 
3

 
(9
)
 
—

 
(10
)
  Station operating income
 
$
18,103

 
$
14,077

 
$
46,694

 
$
41,446

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET INFORMATION:
 
November 30, 2014
 
February 28, 2014
 
 
 
 
Total Cash and Cash Equivalents
 
$
4,223

 
$
5,304

 
 
 
 
Credit Agreement Debt
 
$
195,000

 
$
54,000

 
 
 
 
98.7FM Nonrecourse Debt
 
$
71,567

 
$
74,942

 
 
 
 
 
 
 
 
 
 
 
 
 



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