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| 8-K - 8-K - Townsquare Media, Inc. | form8-k123117pressrelease.htm |
IMMEDIATE RELEASE
TOWNSQUARE REPORTS FOURTH QUARTER AND FULL YEAR 2017 RESULTS
ANNOUNCES $0.075 DIVIDEND PER SHARE
Greenwich, CT - March 13, 2018 - Townsquare Media, Inc. (NYSE: TSQ) (“Townsquare,” the “Company,” “we,” “us,” or “our”) announced today financial results for the fourth quarter and year ended December 31, 2017.
“We are pleased to announce another strong result in our Local Marketing Solutions segment, which delivered net revenue growth of 0.4% in the fourth quarter of 2017, and 1.9% for the full year, despite the loss of political revenue. This was the 16th consecutive quarter of positive, organic net revenue growth for this segment of our Company. Excluding political revenue, Local Marketing Solutions net revenue increased 5.2% in the fourth quarter of 2017, our strongest quarter of the year, and 3.9% for the full year,” commented Bill Wilson, Co-Chief Executive Officer of Townsquare.
The Company also announced today that its Board of Directors approved the initiation of a quarterly cash dividend of $0.075 per share. The dividend will be payable on May 15, 2018 to shareholders of record as of the close of business on April 2, 2018.
“The Board’s decision to approve a dividend reflects confidence in our current capitalization, the strength of our balance sheet, our free cash flow generation, and our outlook for 2018,” commented Dhruv Prasad, Co-Chief Executive Officer of Townsquare. “Our quarterly cash dividend of $0.075 per share, or $0.30 per share on an annual basis, commences in May 2018.”
Fourth Quarter Highlights*
• | As compared to the fourth quarter of 2016 on an actual basis: |
◦Local Marketing Solutions net revenue increased 0.4%, and 5.2% excluding political revenue
◦Entertainment net revenue decreased 17.4%
◦ | Net revenue decreased 3.7%, and 0.2% excluding political revenue |
◦Net income from continuing operations decreased 941.5%
◦Adjusted EBITDA decreased 12.7%, to $21.6 million, consistent with previously issued guidance
• | Diluted net loss per share from continuing operations and diluted Adjusted Net Income Per Share were $(1.42) and $0.14, respectively |
Full Year Highlights*
• | As compared to the year ended December 31, 2016 on an actual basis: |
◦Local Marketing Solutions net revenue increased 1.9%, and 3.9% excluding political revenue
◦Entertainment net revenue decreased 8.6%
◦Net revenue decreased 1.7%, and 0.4% excluding political revenue
◦Net income from continuing operations decreased 138.3%
◦ | Adjusted EBITDA decreased 8.8%, to $97.2 million, consistent with previously issued guidance |
• | Diluted net loss per share from continuing operations and diluted Adjusted Net Income Per Share were $(0.48) and $0.74, respectively |
• | Repaid $6.7 million of long-term debt |
* See below for discussion of non-GAAP measures and reconciliations to GAAP measures.
1
Segment Reporting
We 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.
Quarter Ended December 31, 2017 Compared to the Quarter Ended December 31, 2016
Net Revenue
Net revenue for the quarter ended December 31, 2017 decreased $4.4 million, or 3.7%, to $114.3 million, as compared to $118.7 million in the same period last year. Local Marketing Solutions net revenue increased $0.4 million, or 0.4%, to $91.6 million and Entertainment net revenue decreased $4.8 million, or 17.4%, to $22.6 million, due to revenue declines in certain of our live events and in our national digital business. Excluding political revenue, net revenue decreased $0.3 million, or 0.2%, to $113.1 million and Local Marketing Solutions net revenue increased $4.5 million, or 5.2%, to $90.5 million.
Net (Loss) Income
Net (loss) income for the quarter ended December 31, 2017 decreased $30.3 million, or 944.1%, to a net loss of $27.1 million, as compared to net income of $3.2 million in the same period last year. Net (loss) income from continuing operations for the quarter ended December 31, 2017 decreased $29.4 million, or 941.5%, to a net loss of $26.3 million, as compared to net income of $3.1 million in the same period last year. Net (loss) income and net (loss) income from continuing operations declined primarily due to a $51.8 million impairment charge recorded in the quarter ended December 31, 2017.
Adjusted EBITDA
Adjusted EBITDA for the quarter ended December 31, 2017 decreased $3.1 million, or 12.7%, to $21.6 million, as compared to $24.8 million in the same period last year.
Year Ended December 31, 2017 Compared to the Year Ended December 31, 2016
Net Revenue
Net revenue for the year ended December 31, 2017 decreased $8.6 million, or 1.7%, to $507.4 million, as compared to $516.0 million in the same period last year. Local Marketing Solutions net revenue increased $6.5 million or 1.9%, to $348.7 million and Entertainment net revenue decreased $15.0 million or 8.6%, to $158.8 million, due to revenue declines in certain of our live events and in our national digital business. Excluding political revenue, net revenue decreased $2.0 million, or 0.4%, to $505.0 million and Local Marketing Solutions net revenue increased $13.1 million, or 3.9%, to $346.2 million.
Net (Loss) Income
Net (loss) income for the year ended December 31, 2017 decreased $33.6 million, or 144.1%, to a net loss of $10.3 million, as compared to net income of $23.3 million in the same period last year. Net (loss) income from continuing operations for the year ended December 31, 2017 decreased $32.1 million, or 138.3%, to a net loss of $8.9 million, as compared to net income of $23.2 million in the same period last year. Net (loss) income and net (loss) income from continuing operations declined primarily due to a $51.8 million impairment charge recorded in the quarter ended December 31, 2017.
Adjusted EBITDA
Adjusted EBITDA for the year ended December 31, 2017 decreased $9.4 million, or 8.8%, to $97.2 million, as compared to $106.6 million in the same period last year.
2
Liquidity and Capital Resources
As of December 31, 2017, we had a total of $65.3 million of cash on hand and $50.0 million of available borrowing capacity under our revolving credit facility. As of December 31, 2017, we had $571.9 million of outstanding indebtedness, representing 5.9x and 5.2x gross and net leverage, respectively, based on Adjusted EBITDA for the year ended December 31, 2017 of $97.2 million.
The table below presents a summary, as of March 10, 2018, 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 | 13,837,676 | 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 | 27,474,177 | ||
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 Call
Townsquare Media, Inc. will host a conference call to discuss certain fourth quarter and full year 2017 financial results on Tuesday, March 13, 2018 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 13675865. 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 March 20, 2018. To access the replay, please dial 1-844-512-2921 (U.S. & Canada) or 1-412-317-6671 (International) and enter confirmation code 13675865. 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 radio, digital media, entertainment and digital marketing solutions company principally focused on being the premier local advertising and marketing solutions platform in small and mid-sized markets across the U.S. Our assets include 317 radio stations and more than 325 local websites in 67 U.S. markets, a digital marketing solutions company (Townsquare Interactive) serving approximately 12,400 small to medium sized businesses, a proprietary digital programmatic advertising platform (Townsquare Ignite) and approximately 350 live events with nearly 18 million attendees each year in the U.S. and Canada. Our brands include local media assets such as WYRK, KLAQ, K2 and NJ101.5; music festivals such as Mountain Jam, WE Fest and the Taste of Country Music Festival; touring lifestyle and entertainment events such as the America on Tap craft beer festival 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 and Loudwire.com. For more information, please visit www.townsquaremedia.com, www.townsquareinteractive.com, and www.townsquareignite.com.
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Forward-Looking Statements
Except 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, 2017, 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 Definitions
In this press release, we refer to Adjusted EBITDA, Adjusted EBITDA Less Interest, Capex and Taxes, Adjusted Net Income, Adjusted Net Income Per Share and Adjusted Segment Operating Income 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 (loss) income before the deduction of income taxes, other expense (income) net, interest expense, net, repurchase of debt, transaction costs, stock-based compensation, net loss (gain) on sale and retirement of assets, business realignment costs, goodwill and other intangible impairment charges, net (loss) income on discontinued operations, net of income taxes, impairment of 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 (loss) income before the deduction of income taxes, transaction costs, business realignment costs, impairment of investment, goodwill and other intangible impairment charges, one-time stock option repricing, net loss (gain) on sale and retirement of assets, repurchase of debt and net (loss) income from discontinued operations, net of income taxes. Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the weighted average shares outstanding. Adjusted Segment Operating Income is defined as segment operating income before the deduction of depreciation and amortization, stock-based compensation, business realignment costs and goodwill and other intangible impairment charges. These measures do not represent, and should not be considered as alternatives to, net income (loss), segment operating income 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 use Adjusted Segment Operating Income to evaluate the operating performance of our business segments. We believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of transaction costs, net loss (gain) on sale and retirement of assets, repurchase of debt, business realignment costs, certain impairments, a one-time stock option repricing and net (loss) income from discontinued operations. 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, Adjusted Net Income Per Share and Adjusted Segment Operating Income when determining discretionary bonuses.
Investor Relations
Claire Yenicay
(203) 900-5555
investors@townsquaremedia.com
4
TOWNSQUARE MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
(in Thousands, Except Share and Per Share Data)
December 31, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 65,295 | $ | 51,540 | |||
Accounts receivable, net of allowance of $1,079 and $1,433, respectively | 61,659 | 59,580 | |||||
Prepaid expenses and other current assets | 10,471 | 11,253 | |||||
Current assets held for sale | 879 | — | |||||
Current assets of discontinued operations | 100 | 254 | |||||
Total current assets | 138,404 | 122,627 | |||||
Property and equipment, net | 146,992 | 139,408 | |||||
Intangible assets, net | 508,399 | 513,915 | |||||
Goodwill | 243,042 | 292,953 | |||||
Investments | 8,092 | 4,313 | |||||
Other assets | 10,998 | 7,290 | |||||
Long-term assets of discontinued operations | 431 | — | |||||
Long-term assets held for sale | — | 199 | |||||
Total assets | $ | 1,056,358 | $ | 1,080,705 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 14,559 | $ | 10,602 | |||
Current portion of long-term debt | 9,524 | 6,901 | |||||
Deferred revenue | 17,683 | 17,208 | |||||
Accrued expenses and other current liabilities | 25,160 | 25,748 | |||||
Accrued interest | 5,699 | 4,622 | |||||
Current liabilities of discontinued operations | 680 | 71 | |||||
Total current liabilities | 73,305 | 65,152 | |||||
Long-term debt, less current portion (net of deferred financing costs of $6,803 and $8,006, respectively) | 555,618 | 564,315 | |||||
Deferred tax liability | 36,965 | 50,907 | |||||
Other long-term liabilities | 9,390 | 10,221 | |||||
Long-term liabilities of discontinued operations | — | 59 | |||||
Total liabilities | 675,278 | 690,654 | |||||
Stockholders’ equity: | |||||||
Class A common stock, par value $0.01 per share; 300,000,000 shares authorized; 13,819,639 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 | 30 | 30 | |||||
Class C common stock, par value $0.01 per share; 50,000,000 shares authorized; 1,636,341 shares issued and outstanding | 17 | 17 | |||||
Total common stock | 185 | 184 | |||||
Additional paid-in capital | 367,041 | 365,434 | |||||
Retained earnings | 13,265 | 24,450 | |||||
Accumulated other comprehensive loss | (532 | ) | (722 | ) | |||
Noncontrolling interest | 1,121 | 705 | |||||
Total stockholders’ equity | 381,080 | 390,051 | |||||
Total liabilities and stockholders’ equity | $ | 1,056,358 | $ | 1,080,705 | |||
5
TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in Thousands, Except Per Share Data)
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net revenue | $ | 114,255 | $ | 118,650 | $ | 507,434 | $ | 515,995 | |||||||
Operating costs and expenses: | |||||||||||||||
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | 85,183 | 86,850 | 384,412 | 383,994 | |||||||||||
Depreciation and amortization | 5,935 | 6,159 | 25,683 | 23,971 | |||||||||||
Corporate expenses | 7,453 | 7,050 | 25,828 | 25,370 | |||||||||||
Stock-based compensation | 177 | 3,590 | 748 | 4,253 | |||||||||||
Transaction costs | 569 | 238 | 1,175 | 844 | |||||||||||
Business realignment costs | 6,204 | — | 6,204 | — | |||||||||||
Goodwill and other intangible impairment charges | 51,848 | — | 51,848 | — | |||||||||||
Net (gain) loss on sale and retirement of assets | (265 | ) | (5 | ) | 397 | 282 | |||||||||
Total operating costs and expenses | 157,104 | 103,882 | 496,295 | 438,714 | |||||||||||
Operating (loss) income | (42,849 | ) | 14,768 | 11,139 | 77,281 | ||||||||||
Other expense (income): | |||||||||||||||
Interest expense, net | 8,279 | 8,332 | 32,753 | 34,072 | |||||||||||
Impairment on investment | — | — | — | 4,236 | |||||||||||
Repurchase of debt | — | (85 | ) | — | (546 | ) | |||||||||
Other expense (income), net | 99 | (312 | ) | 288 | (665 | ) | |||||||||
(Loss) income from continuing operations before income taxes | (51,227 | ) | 6,833 | (21,902 | ) | 40,184 | |||||||||
(Benefit) provision for income taxes | (24,956 | ) | 3,713 | (13,027 | ) | 16,982 | |||||||||
Net (loss) income from continuing operations | (26,271 | ) | 3,120 | (8,875 | ) | 23,202 | |||||||||
Net (loss) income from discontinued operations, net of income taxes | (850 | ) | 91 | (1,398 | ) | 91 | |||||||||
Net (loss) income | $ | (27,121 | ) | $ | 3,211 | $ | (10,273 | ) | $ | 23,293 | |||||
Net (loss) income attributable to: | |||||||||||||||
Controlling interests | $ | (27,494 | ) | $ | 3,234 | $ | (11,185 | ) | $ | 23,059 | |||||
Non-controlling interests | 373 | (23 | ) | 912 | 234 | ||||||||||
Basic (loss) income per share: | |||||||||||||||
Continuing operations | $ | (1.42 | ) | $ | 0.17 | $ | (0.48 | ) | $ | 1.28 | |||||
Discontinued operations | (0.05 | ) | — | (0.08 | ) | — | |||||||||
$ | (1.47 | ) | $ | 0.17 | $ | (0.56 | ) | $ | 1.28 | ||||||
Diluted (loss) income per share: | |||||||||||||||
Continuing operations | $ | (1.42 | ) | $ | 0.12 | $ | (0.48 | ) | $ | 0.85 | |||||
Discontinued operations | (0.05) | — | (0.08 | ) | — | ||||||||||
$ | (1.47 | ) | $ | 0.12 | $ | (0.56 | ) | $ | 0.85 | ||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 18,478 | 18,395 | 18,459 | 18,255 | |||||||||||
Diluted | 18,478 | 27,419 | 18,459 | 27,313 | |||||||||||
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in Thousands)
Year Ended December 31, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net (loss) income attributable to: | |||||||
Controlling interests | $ | (11,185 | ) | $ | 23,059 | ||
Noncontrolling interests | 912 | 234 | |||||
Net (loss) income | $ | (10,273 | ) | $ | 23,293 | ||
Adjustments to reconcile net (loss) income to net cash from operating activities: | |||||||
Depreciation and amortization | 25,683 | 23,971 | |||||
Amortization of deferred financing costs | 1,646 | 1,579 | |||||
Deferred income tax (benefit) expense | (13,806 | ) | 15,831 | ||||
Provision for doubtful accounts | 2,186 | 1,921 | |||||
Stock-based compensation expense | 748 | 4,253 | |||||
Trade activity, net | (11,754 | ) | (9,731 | ) | |||
Repurchase of debt | — | (546 | ) | ||||
Write-off deferred financing costs | 83 | 376 | |||||
Impairment of goodwill | 48,933 | — | |||||
Impairment of FCC licenses | 2,915 | — | |||||
Write-off of goodwill | 4,105 | — | |||||
Write-off of trademark | 771 | — | |||||
Impairment on investment | — | 4,236 | |||||
Net loss on sale and retirement of assets | 397 | 282 | |||||
Changes in assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (864 | ) | 3,987 | ||||
Prepaid expenses and other assets | (676 | ) | (704 | ) | |||
Accounts payable | 669 | (2,463 | ) | ||||
Accrued expenses | (625 | ) | (5,002 | ) | |||
Accrued interest | 1,107 | (288 | ) | ||||
Other long-term liabilities | (835 | ) | (1,074 | ) | |||
Net cash provided by operating activities - continuing operations | 50,410 | 59,921 | |||||
Net cash provided by (used in) operating activities - discontinued operations | 274 | (124 | ) | ||||
Net cash provided by operating activities | 50,684 | 59,797 | |||||
Cash flows from investing activities: | |||||||
Payments for acquisitions, net of cash received | (5,511 | ) | (2,160 | ) | |||
Payment for investment | (857 | ) | — | ||||
Acquisition of intangibles | (150 | ) | (11 | ) | |||
Purchase of property and equipment | (22,824 | ) | (20,722 | ) | |||
Proceeds from insurance settlement | — | 451 | |||||
Proceeds from sale of assets | 1,092 | 1,678 | |||||
Net cash used in investing activities - continuing operations | (28,250 | ) | (20,764 | ) | |||
Net cash used in investing activities - discontinued operations | (680 | ) | (199 | ) | |||
Net cash used in investing activities | (28,930 | ) | (20,963 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from exercise of employee stock options | 346 | — | |||||
Repayment of long-term debt | (6,662 | ) | (19,375 | ) | |||
Debt financing costs | (526 | ) | — | ||||
Proceeds from sale of noncontrolling interest in subsidiary | — | 50 | |||||
Cash distributions to noncontrolling interests | (496 | ) | (219 | ) | |||
Repayments of capitalized obligations | (616 | ) | (171 | ) | |||
Net cash used in financing activities | (7,954 | ) | (19,715 | ) | |||
Net effect of foreign currency exchange rate changes | (45 | ) | (877 | ) | |||
Net increase in cash and restricted cash | 13,755 | 18,242 | |||||
Cash and restricted cash: | |||||||
Beginning of period | 51,540 | 33,298 | |||||
End of period | $ | 65,295 | $ | 51,540 | |||
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in Thousands)
Year Ended December 31, | |||||||
2017 | 2016 | ||||||
Supplemental Disclosure of Cash Flow Information: | |||||||
Cash payments: | |||||||
Interest | $ | 29,917 | $ | 32,371 | |||
Income taxes | 3,170 | 1,878 | |||||
Purchase obligations: | |||||||
Capital lease | $ | — | $ | 525 | |||
Equity issued in respect of acquisitions: | |||||||
Common stock, joint venture acquisition | $ | 513 | $ | — | |||
Non-cash investment: | |||||||
Investments | $ | 2,972 | $ | 3,500 | |||
8
TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT
(in Thousands)
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Statement of Operations Data: | |||||||||||||||
Local Marketing Solutions net revenue | $ | 91,648 | $ | 91,277 | $ | 348,660 | $ | 342,191 | |||||||
Entertainment net revenue | 22,607 | 27,373 | 158,774 | 173,804 | |||||||||||
Net revenue | 114,255 | 118,650 | 507,434 | 515,995 | |||||||||||
Operating Costs and Expenses: | |||||||||||||||
Local Marketing Solutions direct operating expenses | 61,783 | 58,460 | 234,524 | 223,286 | |||||||||||
Entertainment direct operating expenses | 23,400 | 28,390 | 149,888 | 160,708 | |||||||||||
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | 85,183 | 86,850 | 384,412 | 383,994 | |||||||||||
Depreciation and amortization | 5,935 | 6,159 | 25,683 | 23,971 | |||||||||||
Corporate expenses | 7,453 | 7,050 | 25,828 | 25,370 | |||||||||||
Stock-based compensation | 177 | 3,590 | 748 | 4,253 | |||||||||||
Transaction costs | 569 | 238 | 1,175 | 844 | |||||||||||
Business realignment costs | 6,204 | — | 6,204 | — | |||||||||||
Goodwill and other intangible impairment charges | 51,848 | — | 51,848 | — | |||||||||||
Net (gain) loss on sale and retirement of assets | (265 | ) | (5 | ) | 397 | 282 | |||||||||
Total operating costs and expenses | 157,104 | 103,882 | 496,295 | 438,714 | |||||||||||
Operating (loss) income | (42,849 | ) | 14,768 | 11,139 | 77,281 | ||||||||||
Other expense (income): | |||||||||||||||
Interest expense, net | 8,279 | 8,332 | 32,753 | 34,072 | |||||||||||
Impairment on investment | — | — | — | 4,236 | |||||||||||
Repurchase of debt | — | (85 | ) | — | (546 | ) | |||||||||
Other expense (income), net | 99 | (312 | ) | 288 | (665 | ) | |||||||||
(Loss) income from continuing operations before income taxes | (51,227 | ) | 6,833 | (21,902 | ) | 40,184 | |||||||||
(Benefit) provision for income taxes | (24,956 | ) | 3,713 | (13,027 | ) | 16,982 | |||||||||
Net (loss) income from continuing operations | (26,271 | ) | 3,120 | (8,875 | ) | 23,202 | |||||||||
Net (loss) income from discontinued operations, net of income taxes | (850 | ) | 91 | (1,398 | ) | 91 | |||||||||
Net (loss) income | $ | (27,121 | ) | $ | 3,211 | $ | (10,273 | ) | $ | 23,293 | |||||
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The following table reconciles on a GAAP basis net (loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Income for the three months and years ended December 31, 2017 and 2016, respectively (in thousands, except per share data):
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net (loss) income | $ | (27,121 | ) | $ | 3,211 | $ | (10,273 | ) | $ | 23,293 | |||||
(Benefit) provision for income taxes | (24,956 | ) | 3,713 | (13,027 | ) | 16,982 | |||||||||
(Loss) income before income taxes | (52,077 | ) | 6,924 | (23,300 | ) | 40,275 | |||||||||
Transaction costs | 569 | 238 | 1,175 | 844 | |||||||||||
Business realignment costs | 6,204 | — | 6,204 | — | |||||||||||
Goodwill and other intangible impairment charges | 51,848 | — | 51,848 | — | |||||||||||
Impairment on investment | — | — | — | 4,236 | |||||||||||
Stock option repricing | — | 3,435 | — | 3,435 | |||||||||||
Net (gain) loss on sale and retirement of assets | (265 | ) | (5 | ) | 397 | 282 | |||||||||
Repurchase of debt | — | (85 | ) | — | (546 | ) | |||||||||
Net loss (income) from discontinued operations, net of income taxes | 850 | (91 | ) | 1,398 | (91 | ) | |||||||||
Adjusted income before income taxes | 7,129 | 10,416 | 37,722 | 48,435 | |||||||||||
Adjusted provision for income taxes | 3,243 | 5,586 | 17,160 | 20,423 | |||||||||||
Adjusted Net Income | $ | 3,886 | $ | 4,830 | $ | 20,562 | $ | 28,012 | |||||||
Adjusted Net Income Per Share: | |||||||||||||||
Basic | $ | 0.21 | $ | 0.26 | $ | 1.11 | $ | 1.53 | |||||||
Diluted | $ | 0.14 | $ | 0.18 | $ | 0.74 | $ | 1.03 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 18,478 | 18,395 | 18,459 | 18,255 | |||||||||||
Diluted | 27,457 | 27,419 | 27,855 | 27,313 | |||||||||||
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The following table reconciles on a GAAP basis net (loss) income, 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 and years ended December 31, 2017 and 2016, respectively (dollars in thousands):
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net (loss) income | $ | (27,121 | ) | $ | 3,211 | $ | (10,273 | ) | $ | 23,293 | |||||
(Benefit) provision for income taxes | (24,956 | ) | 3,713 | (13,027 | ) | 16,982 | |||||||||
Interest expense, net | 8,279 | 8,332 | 32,753 | 34,072 | |||||||||||
Transaction costs | 569 | 238 | 1,175 | 844 | |||||||||||
Depreciation and amortization | 5,935 | 6,159 | 25,683 | 23,971 | |||||||||||
Stock-based compensation | 177 | 3,590 | 748 | 4,253 | |||||||||||
Business realignment costs | 6,204 | — | 6,204 | — | |||||||||||
Goodwill and other intangible impairment charges | 51,848 | — | 51,848 | — | |||||||||||
Impairment on investment | — | — | — | 4,236 | |||||||||||
Repurchase of debt | — | (85 | ) | — | (546 | ) | |||||||||
Net loss (income) from discontinued operations, net of income taxes | 850 | (91 | ) | 1,398 | (91 | ) | |||||||||
Other(a) | (166 | ) | (317 | ) | 684 | (383 | ) | ||||||||
Adjusted EBITDA | 21,619 | 24,750 | 97,193 | 106,631 | |||||||||||
Net Cash paid for interest | (11,342 | ) | (12,490 | ) | (29,917 | ) | (32,371 | ) | |||||||
Capital expenditures | (4,655 | ) | (3,896 | ) | (22,824 | ) | (20,722 | ) | |||||||
Cash paid for taxes | (1,246 | ) | 32 | (3,170 | ) | (1,878 | ) | ||||||||
Adjusted EBITDA Less Interest, Capex and Taxes | $ | 4,376 | $ | 8,396 | $ | 41,282 | $ | 51,660 | |||||||
(a) Other includes net (gain) loss on sale and retirement of assets, (gain) loss on foreign exchange and other (income) expense, net.
The following table reconciles net (loss) income, 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 December 31, 2017 (dollars in thousands):
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
March 31, 2017 | June 30, 2017 | September 30, 2017 | December 31, 2017 | December 31, 2017 | |||||||||||||||
Net (loss) income | $ | (3,008 | ) | $ | 5,563 | $ | 14,293 | $ | (27,121 | ) | $ | (10,273 | ) | ||||||
(Benefit) provision for income taxes | (1,997 | ) | 3,810 | 10,116 | (24,956 | ) | (13,027 | ) | |||||||||||
Interest expense, net | 8,254 | 7,990 | 8,230 | 8,279 | 32,753 | ||||||||||||||
Transaction costs | 199 | 189 | 218 | 569 | 1,175 | ||||||||||||||
Depreciation and amortization | 6,383 | 6,828 | 6,537 | 5,935 | 25,683 | ||||||||||||||
Stock-based compensation | 188 | 183 | 200 | 177 | 748 | ||||||||||||||
Business realignment costs | — | — | — | 6,204 | 6,204 | ||||||||||||||
Goodwill and other intangible impairment charges | — | — | — | 51,848 | 51,848 | ||||||||||||||
Net loss from discontinued operations, net of income taxes | 165 | 181 | 202 | 850 | 1,398 | ||||||||||||||
Other(a) | 31 | 732 | 87 | (166 | ) | 684 | |||||||||||||
Adjusted EBITDA | $ | 10,215 | $ | 25,476 | $ | 39,883 | $ | 21,619 | $ | 97,193 | |||||||||
(a) Other includes net (gain) loss on sale and retirement of assets, (gain) loss on foreign exchange and other (income) expense, net.
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The following tables reconcile segment operating income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Segment Operating Income (Loss) for the three months and years ended December 31, 2017 and 2016, respectively (dollars in thousands):
Three Months Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Local Marketing Solutions | Entertainment | ||||||||||||||
Segment operating income (loss) | $ | 23,788 | $ | 28,961 | $ | (58,211 | ) | $ | (3,473 | ) | |||||
Depreciation and amortization | 3,127 | 3,088 | 2,269 | 2,086 | |||||||||||
Stock-based compensation | 35 | 768 | 11 | 369 | |||||||||||
Business realignment costs | — | — | 6,204 | — | |||||||||||
Goodwill and other intangible impairment charges | 2,915 | — | 48,933 | — | |||||||||||
Adjusted Segment Operating Income (Loss) | $ | 29,865 | $ | 32,817 | $ | (794 | ) | $ | (1,018 | ) | |||||
Years Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Local Marketing Solutions | Entertainment | ||||||||||||||
Segment operating income (loss) | $ | 96,631 | $ | 105,430 | $ | (55,395 | ) | $ | 4,106 | ||||||
Depreciation and amortization | 14,458 | 12,612 | 9,043 | 8,545 | |||||||||||
Stock-based compensation | 132 | 863 | 101 | 445 | |||||||||||
Business realignment costs | — | — | 6,204 | — | |||||||||||
Goodwill and other intangible impairment charges | 2,915 | — | 48,933 | — | |||||||||||
Adjusted Segment Operating Income | $ | 114,136 | $ | 118,905 | $ | 8,886 | $ | 13,096 | |||||||
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Reconciliation of Net revenue to Net revenue, excluding political revenue for the three months and years ended December 31, 2017 and 2016, respectively (dollars in thousands):
Three Months Ended December 31, | % | Years Ended December 31, | % | ||||||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||
Consolidated: | |||||||||||||||||||||
Net revenue | $ | 114,255 | $ | 118,650 | (3.7 | )% | $ | 507,434 | $ | 515,995 | (1.7 | )% | |||||||||
Less: Political revenue | 1,187 | 5,320 | (77.7 | )% | 2,428 | 9,017 | (73.1 | )% | |||||||||||||
Net revenue, excluding political revenue | $ | 113,068 | $ | 113,330 | (0.2 | )% | $ | 505,006 | $ | 506,978 | (0.4 | )% | |||||||||
Local Marketing Solutions Segment: | |||||||||||||||||||||
Net revenue | $ | 91,648 | $ | 91,277 | 0.4 | % | $ | 348,660 | $ | 342,191 | 1.9 | % | |||||||||
Less: Political revenue | 1,187 | 5,320 | (77.7 | )% | 2,428 | 9,017 | (73.1 | )% | |||||||||||||
Net revenue, excluding political revenue | $ | 90,461 | $ | 85,957 | 5.2 | % | $ | 346,232 | $ | 333,174 | 3.9 | % | |||||||||
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