Market Overview

Entercom Communications Corp. Reports Second Quarter Results

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Entercom Communications (NYSE:ETM) today reported financial results for
the quarter ended June 30, 2018.

Second Quarter Highlights

  • Net revenues for the quarter were $372.1 million, compared to $125.0
    million in the second quarter of 2017. On a same-station basis, net
    revenues for the quarter were $372.1 million compared to $405.7
    million in the second quarter of 2017
  • Operating income for the quarter was $27.6 million, after a non-cash
    impairment charge of $29 million that is primarily due to our pending
    divestitures, compared to $16.4 million in the second quarter of 2017
  • Net income per diluted share for the quarter was $0.01, compared to
    $0.15 in the second quarter of 2017
  • Pro Forma Adjusted EBITDA for the quarter was $82.1 million, compared
    to $101.7 million in the second quarter of 2017

David J. Field, President and Chief Executive Officer, stated: "I am
pleased to report that we have made great progress across multiple
fronts as we continue our work to capitalize on our transformational
merger. We have signed a definitive agreement with Bonneville to
complete our last required station divestitures, successfully launched
the new Entercom Audio Network with strong early revenues, terminated
our painful relationship with United States Traffic Network, achieved
rapid growth on our burgeoning Radio.com platform, and delivered a 5%
reduction in Q2 expenses as we realize our merger-related synergies.
Second quarter revenues were soft, down 8% exacerbated by the loss of
$12 million in revenues from USTN. But revenue performance is improving
and we are currently pacing down 2% in the third quarter excluding the
impact of USTN. For the fourth quarter, we are pacing up 3% on an
unadjusted basis. I am proud of the outstanding team we have built and
the terrific work they are doing to capitalize on our abundant
scale-driven opportunities."

Additional Information

On August 2, the Company reached a definitive agreement with Bonneville
International Corporation ("Bonneville") in which Bonneville will
acquire four radio stations in San Francisco and four radio stations in
Sacramento for $141 million. These stations are currently being held
separate from the Company through an FCC divestiture trust and are
operated by Bonneville under a time brokerage agreement ("TBA"). The
Company expects the transaction to close either late in the third
quarter or early in the fourth quarter, depending on the timing of
regulatory approvals, and expects to realize approximately $122 million
in after-tax proceeds. Based on this final sales price, we determined
that the carrying value of these assets was greater than their fair
value and recorded a non-cash impairment charge of $25.6 million.

The Company expects to close on the sale of a tower site adjacent to
O'Hare Airport in Chicago today and to realize $46 million of gross
proceeds. In addition, the Company expects to close on the sale of an
office building on Venice Boulevard in Los Angeles in September and
realize $26 million of gross proceeds. The Company has also entered into
agreements to sell: land and buildings in Dallas, TX; land and buildings
in San Diego, CA; land and buildings in Sacramento, CA; and land in
Austin, TX. For the full year, the Company now expects that gross
proceeds from such redundant assets sales will total about $95 million
and expects to realize after-tax proceeds from such sales of close to
$80 million versus the $50 million the Company anticipated earlier this
year.

In July, the Company terminated its agreement with United States Traffic
Network ("USTN") which had provided traffic advertising sales services
and limited traffic reporting services to the Company. As a result, the
Company has taken back all of the inventory that USTN previously
utilized and now will be able to sell that inventory using its local,
national and network sales teams. The Company is also a secured creditor
of USTN and hopes to recover additional amounts to the extent USTN is
able to make further payments to us or we realize a recovery through the
legal process.

In July, the Company announced a definitive agreement to acquire 101.1
MORE FM (WBEB-FM) from Jerry Lee Radio, LLC in Philadelphia, PA for
$57.5 million in cash. The Company also announced that it had entered
into an agreement to divest 92.5 XTU (WXTU-FM) in Philadelphia, PA to
Beasley Broadcast Group, Inc. for $38.0 million in cash. The
transactions are immediately accretive to Entercom and are leverage
neutral.

In July, the Company launched the Entercom Audio Network. This new
national network allows advertisers to leverage Entercom's scale with
targeted offerings across its portfolio of 235 top-rated radio stations
reaching over 112 million listeners monthly.

On April 30, the Company completed its acquisition of two stations in
St. Louis, MO from Emmis Communications. The Company began operating
these stations under a TBA on March 1, 2018.

As of June 30, 2018, the Company had outstanding $1,528 million of
senior debt under its credit facilities and $400 million in senior notes
(both amounts exclude unamortized premium from purchase price
accounting). In addition, the Company had $40 million in cash on hand.

Our senior secured net leverage as of June 30, 2018, computed in
accordance with the terms of our Credit Agreement and in accordance with
the terms of our Indenture for our Senior Notes, was 3.8x as compared to
our covenant of 4x and our total net leverage was 4.8x. On a pro forma
basis as if all of the Company's pending asset sales had closed by June
30th, and subtracting the EBITDA being sold to Bonneville and
the related time brokerage fees, our senior secured net leverage would
have been 3.4x and our total net leverage would have been 4.5x.

Given the benefit of the expected asset sales and the Company's
improving revenue outlook, we expect to remain compliant with our senior
secured net leverage covenant as of September 30, 2018 whether or not
the Bonneville divestitures close in the third quarter or the fourth
quarter. In addition, we expect to be able to reduce our leverage from
our as reported leverage as of June 30, 2018 by about ½ turn by the end
of this year.

Earnings Conference Call and Company Information

Entercom will hold a conference call and simultaneous webcast regarding
the quarterly earnings release on Wednesday August 8, 2018 at 8:30 AM
Eastern Time. The public may access the conference call by dialing Toll
Free: 888-889-0278 and Toll: 312-470-7365, passcode: Entercom (domestic
and international callers). Participants may also listen to a live
webcast of the call by visiting the "Investor Relations" section of
Entercom's website at www.entercom.com.
A replay of the conference call will be available for one week by
dialing 866-463-2180. A webcast replay of the conference call will be
available beginning six hours after the call on the Company's website
for a period of two weeks. Additional information is available on the
Company's website at www.entercom.com.

Certain Definitions

All references to per share data, unless stated otherwise, are presented
as per diluted share. All references to shares outstanding, unless
stated otherwise, are presented to exclude unvested restricted stock
units. All references to net debt are outstanding debt net of cash on
hand.

Same Station Net Revenues consist of net revenues adjusted for
material station acquisitions and dispositions as if these acquisitions
and dispositions had occurred as of the beginning of the comparable
prior period.

Station Expenses consist of station operating expenses excluding
non-cash compensation expense.

Corporate Expenses consist of corporate general and
administrative expenses excluding non-cash compensation expense.

Station Operating Income consists of operating income (loss)
before: depreciation and amortization; time brokerage agreement fees
(income); corporate general and administrative expenses; non-cash
compensation expense (which is otherwise included in station operating
expenses); impairment loss; merger and acquisition costs, other expenses
related to the refinancing; non-recurring expenses recognized for
restructuring charges or similar costs, including transition and
integration costs; and gain or loss on sale or disposition of assets.

Adjusted EBITDA consists of net income (loss) available to common
shareholders, adjusted to exclude: income taxes (benefit); income from
discontinued operations, net of income taxes or benefit; total other
income or expense; net interest expense; depreciation and amortization;
time brokerage agreement fees (income); non-cash compensation expense
(which is otherwise included in station operating expenses and corporate
G&A expenses); other expenses related to the refinancing; impairment
loss, merger and acquisition costs, preferred stock dividends;
non-recurring expense recognized for restructuring charges or similar
costs, including transition and integration costs, and gain or loss on
sale or disposition of assets.

Pro Forma Adjusted EBITDA consists of Adjusted EBITDA to exclude
those costs incurred by the prior owner that were not assumed by the
Company or were unusual in nature and adjustments for material
acquisitions and divestitures as if these acquisitions and divestitures
had occurred as of the beginning of the period presented.

Adjusted Free Cash Flow consists of operating income (loss): (i)
plus depreciation and amortization; net (gain) loss on sale or disposal
of assets; non-cash compensation expense (which is otherwise included in
station operating expenses and corporate general and administrative
expenses); impairment loss; merger and acquisition costs; other expenses
related to the refinancing; other income and non-recurring expenses
recognized for restructuring charges or similar costs, including
transition and integration costs; income from discontinued operations
(excluding income taxes or tax benefit); and (ii) less net interest
expense (excluding amortization of deferred financing costs or debt
premium), preferred stock dividends, taxes paid, capital expenditures
and amortizable intangibles.

Adjusted Net Income (Loss) consists of net income (loss)
available to common shareholders adjusted to exclude: (i) income taxes
(benefit) as reported, including income taxes otherwise included in
income from discontinued operations; (ii) gain/loss on sale of assets,
derivative instruments and investments; (iii) non-cash compensation
expense; (iv) other income; (v) impairment loss; (vi) merger and
acquisition costs, other expenses related to the refinancing, loss on
extinguishment of debt and non-recurring expenses recognized for
restructuring charges or similar costs, including transition and
integration costs; and (vii) gain/loss on early extinguishment of debt.
For purposes of comparability, income taxes are reflected at the
expected statutory federal and state income tax rate of 30% and 40%
without discrete items of tax for the years 2018 and 2017, respectively.

Adjusted Net Income (Loss) Per Share - Diluted includes any
dilutive equivalent shares when not anti-dilutive. Convertible Preferred
Stock is treated as if it never converted for the purposes of Adjusted
Net Income (Loss) Per Share - Diluted.

Non-GAAP Financial Measures

It is important to note that station operating income, station
expense, corporate expense, same station net revenues
, Adjusted
EBITDA, Pro Forma Adjusted EBITDA, Adjusted Net Income
, Adjusted
Net Income (Loss) Per Share - Diluted
and Adjusted Free
Cash Flow
are not measures of performance or liquidity calculated in
accordance with generally accepted accounting principles ("GAAP").
Management believes that these measures are useful as a way to evaluate
the Company and the means for management to evaluate our radio stations'
performance and operations. Management believes that these measures are
useful to an investor in evaluating our performance because they are
widely used in the broadcast industry as a measure of a radio company's
operating performance.

Certain adjusted non-GAAP financial measures are presented in this
release (e.g., Adjusted Net Income (Loss) and Adjusted Net Income (Loss)
Per Share - Diluted). The adjustments exclude gain/loss on sale of
assets, derivative instruments, and investments; non-cash compensation
expense, other income, impairment loss, merger and acquisition costs,
other expenses related to the refinancing, and gain/loss on early
extinguishment of debt and non-recurring expenses recognized for
restructuring charges or similar costs, including transition and
integration costs. For purposes of comparability, income taxes for 2018
and 2017 are reflected at the expected federal and state income tax rate
of 30% and 40%, respectively, without adjustment for discrete tax
adjustments.

Management believes these adjusted non-GAAP measures provide useful
information to Management and investors by excluding certain income,
expenses and gains and losses that may not be indicative of the
Company's core operating and financial results. Similarly, Management
believes these adjusted measures are a useful performance measure
because certain items included in the calculation of net income (loss)
may either mask or exaggerate trends in the Company's ongoing operating
performance. Further, the reconciliations corresponding to these
adjusted measures, by identifying the individual adjustments, provide a
useful mechanism for investors to consider these adjusted measures with
some or all of the identified adjustments.

Management uses these non-GAAP financial measures on an ongoing basis to
help track and assess the Company's financial performance. You, however,
should not consider non-GAAP measures in isolation or as substitutes for
net income (loss), operating income, or any other measure for
determining our operating performance that is calculated in accordance
with generally accepted accounting principles. These non-GAAP measures
are not necessarily comparable to similarly titled measures employed by
other companies. The accompanying financial tables provide
reconciliations to the nearest GAAP measure of all non-GAAP measures
provided in this release.

Note Regarding Forward-Looking Statements

The information in this news release is being widely disseminated in
accordance with the Securities and Exchange Commission's Regulation FD.

This news announcement contains certain forward-looking statements that
are based upon current expectations and certain unaudited pro forma
information that is presented for illustrative purposes only and
involves certain risks and uncertainties within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. Additional information
and key risks are described in the Company's filings on Forms S-4, 8-K,
10-Q and 10-K with the Securities and Exchange Commission. Readers
should note that these statements might be impacted by several factors
including changes in the economic and regulatory climate and the
business of radio broadcasting, in general. The unaudited pro forma
information and same station operating data reflect adjustments and are
presented for comparative purposes only and do not purport to be
indicative of what has occurred or indicative of future operating
results or financial position. Accordingly, the Company's actual
performance may differ materially from those stated or implied herein.
The Company assumes no obligation to publicly update or revise any
unaudited pro forma or forward-looking statements.

About Entercom Communications Corp.

Entercom Communications Corp. (NYSE:ETM) is a leading American media
and entertainment company reaching and engaging over 100 million people
each week through its premier collection of highly rated, award winning
radio stations, digital platforms and live events. As one of the
country's two largest radio broadcasters, Entercom offers integrated
marketing solutions and delivers the power of local connection on a
national scale with coverage of close to 90% of persons 12+ in the top
50 markets. Entercom is the #1 creator of live, original, local audio
content and the nation's unrivaled leader in news and sports radio.
Learn more about Philadelphia-based Entercom at www.entercom.com,
Facebook
and Twitter (@Entercom).

For further information, or to receive future Entercom Communications
news announcements via e-mail, please contact JCIR at 212/835-8500 or etm@jcir.com.

       

ENTERCOM COMMUNICATIONS CORP.

FINANCIAL DATA

(amounts in thousands, except per share
data)

(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017

STATEMENTS OF OPERATIONS

 
Net Revenues $ 372,124 $ 124,970 $ 672,684 $ 223,971
 
Station Expenses 274,159 90,632 527,920 167,593
Station Expense - Non-Cash Compensation 1,680 372 3,643 577
Corporate Expenses 16,982 7,771 33,691 16,947
Corporate Expenses - Non-Cash Compensation 2,050 1,105 4,010 2,494
Depreciation And Amortization 10,666 2,517 19,137 5,164
Time Brokerage Agreement Expense (Income) (666) - (1,092) 34
Merger And Acquisition Costs 687 5,829 2,071 16,100
Impairment Loss 28,988 441 28,988 441
Restructuring Charges 686 - 2,167 -
Integration Costs 9,494 - 19,223 -
Net (Gain) Loss On Sale Or Disposition of Assets   (154)   (76)   (315)   13,258
Total Operating Expenses   344,572   108,591   639,443   222,608
Operating Income   27,552   16,379   33,241   1,363
 
Net Interest Expense   25,706   6,133   49,110   12,110
 
Income (Loss) Before Income Taxes 1,846 10,246 (15,869) (10,747)
Income Taxes (Benefit)   249   3,832   (3,260)   (7,830)
Net Income (Loss) Available To The Company - Continuing Operations 1,597 6,414 (12,609) (2,917)
Preferred Stock Dividend   -   550   -   1,100
Net Income (Loss) Available To Common Shareholders - Continuing
Operations
1,597 5,864 (12,609) (4,017)
Income From Discontinued Operations, Net Of Income Taxes   844   -   1,172   -
Net Income (Loss) Available To Common Shareholders $ 2,441 $ 5,864 $ (11,437) $ (4,017)
 

Net Income (Loss) From Continuing Operations Available To Common
Shareholders - Basic

$ 0.01 $ 0.15 $ (0.09) $ (0.10)
 

Net Income (Loss) From Continuing Operations Available To Common
Shareholders - Diluted

$ 0.01 $ 0.15 $ (0.09) $ (0.10)
 
Dividends Declared And Paid Per Common Share $ 0.09 $ 0.075 $ 0.18 $ 0.15
 
Weighted Common Shares Outstanding - Basic   138,639   38,945   138,962   38,935
Weighted Common Shares Outstanding - Diluted   139,263   39,656   138,962   38,935
 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION

Capital Expenditures, Including Amortizable Intangibles $ 11,995 $ 4,350 $ 18,986 $ 7,044
Income Taxes Paid $ 18,791 $ 122 $ 18,836 $ 177
Cash Dividends On Common Stock Declared And Paid $ 12,475 $ 2,921 $ 24,916 $ 5,837
Cash Dividends On Preferred Stock Declared And Paid $ - $ 550 $ - $ 1,100
 

SELECTED BALANCE SHEET DATA

June 30, December 31,
2018 2017
Cash and Cash Equivalents $ 39,926 $ 34,167
Senior Debt - Term B-1 Loan (Includes Current Portion) $ 1,323,350 $ 1,330,000
Senior Debt - Revolver (Includes Current Portion) $ 205,000 $ 143,000
Senior Notes $ 400,000 $ 400,000
Total Shareholders' Equity $ 1,711,486 $ 1,764,360
 
OTHER FINANCIAL DATA
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017   2018   2017

Reconciliation Of GAAP Net Revenues To
Same Station Net Revenues

Net Revenues $ 372,124 $ 124,970 $ 672,684 $ 223,971
Net Acquisitions And Divestitures Of Radio Stations   -   280,750   -   506,680
Same Station Net Revenues $ 372,124 $ 405,720 $ 672,684 $ 730,651
 

Reconciliation Of GAAP Station Operating
Expenses To Station Expenses

Station Operating Expenses $ 275,839 $ 91,004 $ 531,563 $ 168,170
Station Expenses - Non-Cash Compensation   (1,680)   (372)   (3,643)   (577)
Station Expenses $ 274,159 $ 90,632 $ 527,920 $ 167,593
 

Reconciliation Of GAAP Corporate General
& Administrative Expenses To Corporate Expenses

Corporate General & Administrative Expenses $ 19,032 $ 8,876 $ 37,701 $ 19,441
Corporate Expenses - Non-Cash Compensation   (2,050)   (1,105)   (4,010)   (2,494)
Corporate Expenses $ 16,982 $ 7,771 $ 33,691 $ 16,947
 

Reconciliation Of GAAP Operating Income
To Station Operating Income

Operating Income $ 27,552 $ 16,379 $ 33,241 $ 1,363
Corporate Expenses 16,982 7,771 33,691 16,947
Corporate Expenses - Non-Cash Compensation 2,050 1,105 4,010 2,494
Station Expenses - Non-Cash Compensation 1,680 372 3,643 577
Depreciation And Amortization 10,666 2,517 19,137 5,164
Merger And Acquisition Costs 687 5,829 2,071 16,100
Restructuring Charges 686 - 2,167 -
Impairment Loss 28,988 441 28,988 441
Integration Costs 9,494 - 19,223 -
Net Time Brokerage Agreement Expense (Income) (666) - (1,092) 34
Net Gain (Loss) On Sale Or Disposition of Assets   (154)   (76)   (315)   13,258
Station Operating Income $ 97,965 $ 34,338 $ 144,764 $ 56,378
 

Reconciliation Of GAAP Net Income (Loss)
Available To Common Shareholders To Adjusted EBITDA To Pro Forma
Adjusted EBITDA

Net (Income) Loss Available To Common Shareholders $ 2,441 $ 5,864 $ (11,437) $ (4,017)
Income Taxes (Benefit) 249 3,832 (3,260) (7,830)
Income From Discontinued Operations, Net Of Income Taxes (844) - (1,172) -
Net Interest Expense 25,706 6,133 49,110 12,110
Corporate Expenses - Non-Cash Compensation 2,050 1,105 4,010 2,494
Station Expenses - Non-Cash Compensation 1,680 372 3,643 576
Depreciation And Amortization 10,666 2,517 19,137 5,164
Time Brokerage Agreement Expense (Income) (666) - (1,092) 34
Preferred Stock Dividend - 550 - 1,100
Merger And Acquisition Costs 687 5,829 2,071 16,100
Restructuring Charges 686 - 2,167 -
Integration Costs 9,494 - 19,223 -
Transition Costs And Non-Recurring Expenses Otherwise
Included In Corporate Expenses 1,100 166 1,100 1,419
Impairment Loss 28,988 441 28,988 441
Net Gain (Loss) On Sale Or Disposition of Assets   (154)   (76)   (315)   13,258
Adjusted EBITDA 82,083 26,733 112,173 40,849
Net Of Acquisitions And Divestitures - 74,828 120,604
CBS Radio Costs Incurred To Separate From Its Parent   -   149       1,286
Pro Forma Adjusted EBITDA $ 82,083 $ 101,710 $ 112,173 $ 162,739
 

Reconciliation Of GAAP Net Income (Loss)
Available To Common Shareholders To Adjusted Free Cash Flow

Net Income (Loss) Available To Common Shareholders $ 2,441 $ 5,864 $ (11,437) $ (4,017)
Depreciation And Amortization 10,666 2,517 19,137 5,164
Deferred Financing Costs Included In Interest Expense 796 580 1,591 1,166
Amortization Debt Premium Included In Interest Expense (716) - (1,432) -
Non-Cash Compensation Expense 3,730 1,477 7,653 3,071
Merger And Acquisition Costs 688 5,829 2,071 16,100
Integration Costs 9,494 - 19,223 -
Restructuring Charges 686 - 2,167 -
Transition Costs And Non-Recurring Expenses Otherwise
Included In Corporate Expenses 1,100 166 1,100 1,419
Impairment Loss 28,988 441 28,988 441
Net (Gain) Loss On Sale Or Disposition of Assets (154) (76) (315) 13,258
Income Taxes (Benefit) 249 3,832 (3,260) (7,830)
Income Taxes Otherwise Included In Income From Discontinued
Operations
337 - 423 -
Capital Expenditures, Including Amortizable Intangibles (11,995) (4,350) (18,986) (7,044)
Income Taxes Paid   (18,791)   (122)   (18,836)   (177)
Adjusted Free Cash Flow $ 27,519 $ 16,158 $ 28,087 $ 21,551
 
 

Reconciliation Of GAAP Net Income (Loss)
Available To Common Shareholders To Adjusted Net Income

Net Income (Loss) Available To Common Shareholders $ 2,441 $ 5,864 $ (11,437) $ (4,017)
Preferred Stock Dividend - 550 - 1,100
Income Taxes (Benefit) 249 3,832 (3,260) (7,830)
Income Taxes Included In Income From Discontinued Operations 336 - 423 -
Merger And Acquisition Costs 687 5,829 2,071 16,100
Transition Costs And Non-Recurring Expenses Otherwise
Included In Corporate Expenses 1,100 166 1,100 1,419
Impairment Loss 28,988 441 28,988 441
Integration Costs 9,494 - 19,223 -
Restructuring Charges 686 - 2,167 -
Net (Gain) Loss On Sale Or Disposition of Assets (154) (76) (315) 13,258
Non-Cash Compensation Expense   3,730   1,477   7,653   3,071
Adjusted Income Before Income Taxes 47,557 18,083 46,613 23,542
Income Taxes   14,267   7,233   13,984   9,417
Adjusted Net Income Available To The Company 33,290 10,850 32,629 14,125
Preferred Stock Dividend   -   550   -   1,100
Adjusted Net Income $ 33,290 $ 10,300 $ 32,629 $ 13,025
 

Numerator For Purposes Of Computing
Adjusted Net Income (Loss) Per Share - Diluted

Adjusted Net Income (Loss) $ 33,290 $ 10,300 $ 32,629 $ 13,025
Preferred Stock Dividend, Treated As If Preferred Never Converted   -   -   -   -
$ 33,290 $ 10,300 $ 32,629 $ 13,025

Weighted Average Diluted Shares
Outstanding For Purposes Of Computing Adjusted Net Income Per
Share - Diluted

Weighted Common Shares Outstanding - Diluted As Reported 139,263 39,656 138,962 38,935
Preferred Stock Dividend, Treated As If Preferred Never Converted - - - -
Diluted Shares Excluded When Reporting A Net Loss   -   -   1,059   1,026
  139,263   39,656   140,021   39,961
 
Adjusted Net Income (Loss) Per Share - Diluted $ 0.24 $ 0.26 $ 0.23 $ 0.33
 

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