EMMIS COMMUNICATIONS CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 5, 2016

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For Immediate Release
Thursday, October 6, 2016
Contact: Ryan Hornaday, EVP/CFO & Treasurer
rhornaday@emmis.com
317.266.0100

Emmis Announces Second Quarter Earnings

Indianapolis... Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its second fiscal quarter, ending August 31, 2016.

Emmis’ radio net revenues for the second fiscal quarter were down 3.3%, from $47.6 million to $46.0 million. Per Miller Kaplan reporting, which excludes barter and syndication revenues, Emmis radio revenues were down 3.8% in markets up 1%.
For the second fiscal quarter, operating income declined to $4.9 million from $9.9 million in the same quarter of the prior year, partially due to a $3.0 million noncash impairment charge related to Digonex intangibles. 
Publishing net revenues were down 13.5% in the second fiscal quarter, from $14.6 million to $12.6 million.
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.
“Across the board, this was a difficult quarter,” said Jeff Smulyan, Chairman & CEO of Emmis. “Third quarter radio revenues are currently pacing flat to the prior year. We are hopeful that we will see political advertising tailwinds strengthen as we move through October. We are increasing marketing spend at some of our largest brands to boost ratings and to give us a competitive advantage.”

“NextRadio continues to make progress on multiple fronts,” Smulyan continued. “NextRadio-compatible Samsung Galaxy S7, S7 Edge and Note 7 smartphones are now available across all carriers, and an industry marketing campaign has begun to promote this to consumers. NextRadio continues to grow its geographic footprint and is now available in Mexico, Canada and Peru.

“Lastly, there is marked and deserved interest in our magazines, and while it is early in the process, I’m optimistic about the reaction to these marquee brands,” Smulyan concluded.
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 ir@emmis.com. A playback of the call will be available until 6 p.m. Eastern on Thursday, October 20 by dialing 1-402-998-1734.

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 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






EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited, amounts in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
Three months ended
August 31,
 
Six months ended
August 31,
 
 
2016
 
2015
 
2016
 
2015
OPERATING DATA:
 
 
 
 
 
 
 
 
  Net revenues:
 
 
 
 
 
 
 
 
    Radio
 
$
45,972

 
$
47,562

 
$
88,671

 
$
90,155

    Publishing
 
12,619

 
14,592

 
25,711

 
30,117

    Emerging Technologies
 
183

 
328

 
394

 
663

Total net revenues
 
58,774

 
62,482

 
114,776

 
120,935

Station operating expenses excluding depreciation and amortization expense:
 
 
 
 
 
 
 
 
    Radio
 
31,661

 
31,880

 
58,936

 
60,573

    Publishing
 
12,959

 
14,038

 
26,437

 
29,247

    Emerging Technologies
 
2,371

 
1,816

 
4,607

 
3,457

Total station operating expenses excluding depreciation and amortization expense
 
46,991

 
47,734

 
89,980

 
93,277

Corporate expenses excluding depreciation and amortization expense
 
2,453

 
3,487

 
5,497

 
7,306

Depreciation and amortization
 
1,282

 
1,403

 
2,614

 
2,853

Impairment loss on intangible assets
 
2,988

 
—

 
2,988

 
—

Loss on disposal of assets
 
125

 
—

 
125

 
—

Operating income
 
4,935

 
9,858

 
13,572

 
17,499

Interest expense
 
(4,758
)
 
(4,945
)
 
(9,448
)
 
(9,491
)
Other income, net
 
89

 
828

 
132

 
838

Income before income taxes
 
266

 
5,741

 
4,256

 
8,846

Provision for income taxes
 
664

 
826

 
1,339

 
1,773

Consolidated net (loss) income
 
(398
)
 
4,915

 
2,917

 
7,073

Net (loss) income attributable to noncontrolling interests
 
(733
)
 
521

 
(104
)
 
1,154

  Net income attributable to the Company
 
$
335

 
$
4,394

 
$
3,021

 
$
5,919

 
 
 
 
 
 
 
 
 
Basic net income per common share
 
$
0.03

 
$
0.40

 
$
0.25

 
$
0.54

Diluted net income per common share
 
$
0.03

 
$
0.37

 
$
0.25

 
$
0.50

 
 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
 
12,047

 
10,950

 
11,922

 
10,884

Diluted weighted average shares outstanding
 
12,299

 
11,813

 
12,043

 
11,847

 
 
 
 
 
 
 
 
 
OTHER DATA:
 
 
 
 
 
 
 
 
  Station operating income (See below)
 
$
11,980

 
$
15,269

 
$
25,330

 
$
28,903

  Cash (refund from) paid for income taxes, net
 
(4
)
 
—

 
112

 
216

  Cash paid for interest
 
4,077

 
4,092

 
7,943

 
8,413

  Capital expenditures
 
309

 
860

 
711

 
1,281

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
Three months ended
August 31,
 
Six months ended
August 31,
 
 
2016
 
2015
 
2016
 
2015
 Noncash compensation by segment:
 
 
 
 
 
 
 
 
           Radio
 
$
133

 
$
371

 
$
400

 
$
841

           Publishing
 
45

 
129

 
99

 
357

           Emerging Technologies
 
19

 
21

 
35

 
47

           Corporate
 
463

 
1,140

 
982

 
2,520

                  Total
 
$
660

 
$
1,661

 
$
1,516

 
$
3,765

 
 
 
 
 
 
 
 
 
COMPUTATION OF STATION OPERATING INCOME:
 
 
 
 
 
 
 
 
  Operating income
 
$
4,935

 
$
9,858

 
$
13,572

 
$
17,499

  Plus: Depreciation and amortization
 
1,282

 
1,403

 
2,614

 
2,853

  Plus: Corporate expenses
 
2,453

 
3,487

 
5,497

 
7,306

  Plus: Station noncash compensation
 
197

 
521

 
534

 
1,245

  Plus: Impairment loss on intangible assets
 
2,988

 
—

 
2,988

 
—

  Plus: Loss on disposal of assets
 
125

 
—

 
125

 
—

  Station operating income
 
$
11,980

 
$
15,269

 
$
25,330

 
$
28,903

 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET INFORMATION:
 
August 31, 2016
 
February 29, 2016
 
 
 
 
Total Cash and Cash Equivalents
 
$
5,694

 
$
4,456

 
 
 
 
Credit Agreement Debt
 
$
185,268

 
$
184,762

 
 
 
 
98.7FM Nonrecourse Debt
 
$
62,740

 
$
65,411

 
 
 
 



EMMIS COMMUNICATIONS CORP Reports