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Townsquare Reports Second Quarter 2018 Results

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Townsquare Reports Second Quarter 2018 Results

PR Newswire

GREENWICH, Conn., Aug. 8, 2018 /PRNewswire/ -- Townsquare Media, Inc. (NYSE:TSQ) ("Townsquare," the "Company," "we," "us," or "our") today announced its financial results for the second quarter ended June 30, 2018.

Townsquare Media, Inc.

"We are pleased to announce that our second quarter financial results exceeded our previously issued guidance, continuing the momentum we experienced in the first quarter of the year.  In the first six months of 2018, net revenue increased 2.6%, and 2.2% excluding political revenue, and Adjusted EBITDA increased 6.6%," commented Bill Wilson, Co-Chief Executive Officer of Townsquare. "Our second quarter and year to date revenue growth was primarily the result of the continued stability in our broadcast products and the strong revenue growth of our digital solutions."

"Through internal reorganization and the divestiture of North American Midway Entertainment, we have concluded the strategic reset that we initiated in late 2017 and have largely reoriented the Company towards the stability, profitable growth, and cash generation of the advertising, marketing solutions, and live events businesses in our local market footprint," commented Dhruv Prasad, Co-Chief Executive Officer of Townsquare.  "Our strong performance in the first half of this year reinforces that this was the right strategy, and we remain committed to this plan moving forward."

The Company also announced today that its Board of Directors approved a quarterly cash dividend of $0.075 per share. The dividend will be payable on November 15, 2018 to shareholders of record as of the close of business on September 27, 2018.

Second Quarter Highlights*

  • As compared to the second quarter of 2017:
    • Net revenue increased 1.9%, or 1.3% excluding political revenue
    • Net income decreased 70.6%, and net income from continuing operations increased 29.2%
    • Adjusted EBITDA increased 1.3%
    • Townsquare Interactive net revenue increased 17.3%
  • Diluted net income per share from continuing operations and diluted Adjusted Net Income Per Share were $0.36 and $0.38, respectively
  • Townsquare Interactive added 850 net subscribers, ending the quarter with approximately 13,650 subscribers
  • Record breaking, sellout audience of nearly 70,000 at the 6th Annual Taste of Country Music Festival in Hunter, NY

Year to Date Highlights*

  • As compared to the six months ended June 30, 2017:
    • Net revenue increased 2.6%, and 2.2% excluding political revenue
    • Adjusted EBITDA increased 6.6%
    • Townsquare Interactive net revenue increased 16.6%
  • Repaid $9.5 million of long-term debt

* See below for discussion of non-GAAP measures and reconciliations to GAAP measures.

Quarter Ended June 30, 2018 Compared to the Quarter Ended June 30, 2017

Net Revenue
Net revenue for the quarter ended June 30, 2018 increased $2.3 million, or 1.9%, to $119.6 million, as compared to $117.3 million in the same period last year.  Excluding political revenue, net revenue increased $1.5 million, or 1.3%, to $118.3 million, as compared to $116.7 million in the same period last year.

Net Income
Net income for the quarter ended June 30, 2018 decreased $3.9 million, or 70.6%, to $1.6 million, as compared to $5.6 million in the same period last year.  Net income from continuing operations for the quarter ended June 30, 2018 increased $2.3 million or 29.2%, to $10.1 million, as compared to $7.8 million in the same period last year.

Adjusted EBITDA
Adjusted EBITDA for the quarter ended June 30, 2018 increased $0.4 million, or 1.3%, to $27.9 million as compared to $27.5 million in the same period last year.

Six Months Ended June 30, 2018 Compared to the Six Months Ended June 30, 2017

Net Revenue
Net revenue for the six months ended June 30, 2018 increased $5.3 million, or 2.6%, to $207.6 million, as compared to $202.2 million in the same period last year.  Excluding political revenue, net revenue increased $4.3 million, or 2.2%, to $205.5 million, as compared to $201.2 million in the same period last year.

Net (Loss) Income
Net (loss) income for the six months ended June 30, 2018 decreased $27.5 million, to a net loss of $25.0 million, as compared to net income of $2.6 million in the same period last year.  Net income from continuing operations increased $4.4 million, or 52.4%, to $12.9 million, as compared to $8.5 million in the same period last year.

Adjusted EBITDA
Adjusted EBITDA for the six months ended June 30, 2018 increased $2.8 million, or 6.6%, to $44.8 million, as compared to $42.1 million in the same period last year.

Liquidity and Capital Resources
As of June 30, 2018, we had a total of $62.4 million of cash on hand and $50.0 million of available borrowing capacity under our revolving credit facility. As of June 30, 2018, we had $562.4 million of outstanding indebtedness, representing 5.7x and 5.4x gross and net leverage, respectively, based on Adjusted EBITDA for the twelve months ended June 30, 2018 of $92.7 million.

The table below presents a summary, as of August 7, 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


14,248,526


One vote per share.

Class B common stock


3,011,634


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


27,874,177







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 second quarter 2018 financial results on Wednesday, August 8, 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 13681353. 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 August 15, 2018. To access the replay, please dial 1-844-512-2921 (U.S. & Canada) or 1-412-317-6671 (International) and enter confirmation code 13681353. 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 320 radio stations and more than 330 local websites in 67 U.S. markets, a digital marketing solutions company (Townsquare Interactive) serving approximately 13,650 small to medium sized businesses, a proprietary digital programmatic advertising platform (Townsquare Ignite) and approximately 200 live events with over one million attendees each year.  Our brands include local media assets such as WYRK, KLAQ, K2 and NJ101.5; iconic regional and national events such as the Taste of Country Music Festival, WE Fest, Country Jam, the Boise Music Festival, the Red Dirt BBQ & Music Festival and Taste of Fort Collins; and leading tastemaker music and entertainment 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.

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, and Adjusted Net Income Per Share 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 income (loss) before the deduction of income taxes, interest expense, net, transaction costs, depreciation and amortization, stock-based compensation, business realignment costs, goodwill and other intangible impairment charges, net (loss) income from discontinued operations, net of income taxes, net gain (loss) on sale and retirement of assets, and other expense (income) net. 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 income (loss) before the deduction of income taxes, transaction costs, business realignment costs, goodwill and other intangible impairment charges, net (loss) income from discontinued operations, net of income taxes, and net (gain) loss on sale and retirement of assets.  Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the weighted average shares outstanding. These measures do not represent, and should not be considered as alternatives to, net income (loss), 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 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, business realignment costs, certain impairments, and net income (loss) 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, and Adjusted Net Income Per Share when determining discretionary bonuses.

Investor Relations
Claire Yenicay
(203) 900-5555
investors@townsquaremedia.com

 

TOWNSQUARE MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
(in Thousands, Except Share and Per Share Data)
(unaudited)



June 30,
 2018


December 31,
 2017

ASSETS




Current assets:




Cash

$

62,444



$

61,205


Accounts receivable, net of allowance of $1,735 and $1,079, respectively

67,122



61,558


Prepaid expenses and other current assets

10,670



7,540


Current assets held for sale



879


Current assets of discontinued operations

256



7,222


Total current assets

140,492



138,404


Property and equipment, net

107,892



104,030


Intangible assets, net

494,723



495,501


Goodwill

241,888



241,888


Investments

11,292



8,092


Other assets

11,258



8,965


Long-term assets of discontinued operations



59,478


Total assets

$

1,007,545



$

1,056,358


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

19,478



$

13,442


Current portion of long-term debt

5



9,524


Deferred revenue

12,248



17,281


Accrued expenses and other current liabilities

25,472



24,919


Accrued interest

4,631



5,699


Current liabilities of discontinued operations

3,038



2,440


Total current liabilities

64,872



73,305


Long-term debt, less current portion (net of deferred finance costs of $5,948 and $6,803, respectively)

556,470



555,618


Deferred tax liability

26,887



26,283


Other long-term liabilities

8,975



9,390


Long-term liabilities of discontinued operations



10,682


Total liabilities

657,204



675,278


Stockholders' equity:




    Class A common stock, par value $0.01 per share; 300,000,000 shares authorized; 14,248,526
       and 13,819,639 shares issued and outstanding, respectively

138



138


    Class B common stock, par value $0.01 per share; 50,000,000 shares authorized; 3,011,634 and
    3,022,484 shares issued and outstanding, respectively

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



185


    Additional paid-in capital

363,817



367,041


    Retained earnings (deficit)

(14,158)



13,265


    Accumulated other comprehensive loss



(532)


    Non-controlling interest

497



1,121


Total stockholders' equity

350,341



381,080


Total liabilities and stockholders' equity

$

1,007,545



$

1,056,358



 

 

TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in Thousands, Except Per Share Data)
(unaudited)



Three Months Ended
 June 30,


Six Months Ended
June 30,


2018


2017


2018


2017









Net revenue

$

119,577



$

117,303



$

207,568



$

202,232










Operating costs and expenses:








Direct operating expenses, excluding depreciation, amortization and stock-based
compensation

84,434



83,186



149,790



148,167


Depreciation and amortization

4,628



5,158



9,229



9,946


Corporate expenses

7,290



6,635



12,939



11,984


Stock-based compensation

246



175



436



356


Transaction costs

677



189



837



389


Net (gain) loss on sale and retirement of assets

(76)



716



(398)



715


    Total operating costs and expenses

97,199



96,059



172,833



171,557


    Operating income

22,378



21,244



34,735



30,675


Other expense:








Interest expense, net

8,532



7,990



16,960



16,243


Other expense, net

48



40



80



75


    Income from continuing operations before income taxes

13,798



13,214



17,695



14,357


Provision from income taxes

3,723



5,414



4,818



5,906


Net income from continuing operations

10,075



7,800



12,877



8,451


Net loss from discontinued operations, net of income taxes

(8,441)



(2,237)



(37,833)



(5,895)


Net income (loss)

$

1,634



$

5,563



$

(24,956)



$

2,556










Net (loss) income attributable to:








     Controlling interests

$

1,335



$

5,137



$

(25,510)



$

2,106


     Non-controlling interests

299



426



554



450










Basic income (loss) per share:








    Continuing operations

$

0.54



$

0.42



$

0.69



$

0.46


    Discontinued operations

$

(0.45)



$

(0.12)



$

(2.04)



$

(0.32)










Diluted income (loss) per share:








    Continuing operations

$

0.36



$

0.27



$

0.47



$

0.30


    Discontinued operations

$

(0.31)



$

(0.08)



$

(1.37)



$

(0.21)










Weighted average shares outstanding:








     Basic

18,633



18,470



18,563



18,450


     Diluted

27,611



28,445



27,541



28,498










Cash dividend declared per share

$

0.075



$



$

0.150



$


 

 

TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in Thousands)
(unaudited)




Six Months Ended
June 30,


2018


2017

Cash flows from operating activities:




Net income (loss)

$

(24,956)



$

2,556


Loss from discontinued operations

(37,833)



(5,895)


Income from continuing operations

12,877



8,451


Adjustments to reconcile income from continuing operations to net cash flows from operating activities:




Depreciation and amortization

9,229



9,946


Amortization of deferred financing costs

761



851


Deferred income tax benefit

4,818



5,906


Provision for doubtful accounts

1,518



1,112


Stock-based compensation expense

436



356


Trade activity, net

(7,341)



(5,009)


Non-cash interest expense

(10)




Write-off of deferred financing costs

97



83


Net (gain) loss on sale and retirements of assets

(398)



715


Changes in assets and liabilities, net of acquisitions:




Accounts receivable

(3,845)



(5,905)


Prepaid expenses and other assets

(2,891)



(2,294)


Accounts payable

2,244



(2,658)


Accrued expenses

(6,600)



1,484


Accrued interest

(1,037)



(5)


Other long-term liabilities

(416)



(416)


Net cash provided by operating activities - continuing operations

9,442



12,617


Net cash used in operating activities - discontinued operations

(8,208)



(11,190)


Net cash provided by operating activities

1,234



1,427


Cash flows from investing activities:




   Purchase of property and equipment

(8,760)



(8,415)


   Payments for acquisitions, net of cash received

(3,724)



(2,157)


   Acquisition of intangibles



(150)


   Proceeds from insurance settlement




   Proceeds from sale of assets

1,923



172


   Net cash used in investing activities - continuing operations

(10,561)



(10,550)


   Net cash provided by (used in) investing activities - discontinued operations

22,592



(3,919)


Net cash provided by (used) in investing activities

12,031



(14,469)


Cash flows from financing activities:




   Repayment of long-term debt

(9,519)



(6,662)


   Dividend payments

(2,061)




   Deferred financing costs

(2)



(432)


   Proceeds from exercise of employee stock options



346


   Cash distributions to non-controlling interests

(514)



(49)


   Repayments of capitalized obligations

(3)



(88)


   Net cash used in financing activities - continuing operations

(12,099)



(6,885)


   Net cash used in financing activities - discontinued operations

(19)



(563)


Net cash used in financing activities

(12,118)



(7,448)


Net effect of foreign currency exchange rate changes from discontinued operations

92



22


Net increase (decrease)  in cash and restricted cash

1,239



(20,468)


Cash and restricted cash:




Beginning of period

61,205



51,540


End of period

$

62,444



$

31,072


 

 

TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in Thousands)
(unaudited)



Six Months Ended
 June 30,


2018


2017

Supplemental Disclosure of Cash Flow Information from continuing operations:




   Cash payments:




Interest

$

17,176



$

15,314


Income taxes

1,449



552






Supplemental Disclosure of Non-cash Activities:




Dividends declared during the period

$

2,123



$


 

The following table reconciles on a GAAP basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Income for the three and six months ended June 30, 2018 and 2017, respectively (dollars in thousands):


Three Months Ended
 June 30,


Six Months Ended
June 30,


2018


2017


2018


2017

Income from continuing operations

$

10,075



$

7,800



$

12,877



$

8,451


Loss from discontinued operations

(8,441)



(2,237)



(37,833)



(5,895)


Net income (loss)

1,634



5,563



(24,956)



2,556


  Provision for income taxes

3,723



5,414



4,818



5,906


Income (loss) before taxes

5,357



10,977



(20,138)



8,462


  Transaction costs

677



189



837



389


  Net (gain) loss on sale and retirement of assets

(76)



716



(398)



715


  Net loss from discontinued operations, net of income taxes

8,441



2,237



37,833



5,895


Adjusted income before taxes

14,399



14,119



18,134



15,461


   Provision for income taxes

3,922



5,769



4,940



6,317


Adjusted Net Income

$

10,477



$

8,350



$

13,194



$

9,144










Adjusted Net Income Per Share








   Basic

$

0.56



$

0.45



$

0.71



$

0.50


   Diluted

$

0.38



$

0.29



$

0.48



$

0.32










Weighted average shares outstanding








   Basic

18,633



18,470



18,563



18,450


   Diluted

27,611



28,445



27,541



28,498


 

The following table reconciles on a GAAP basis net income (loss), 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 and six months ended June 30, 2018 and 2017, respectively (dollars in thousands):


Three Months Ended
 June 30,


Six Months Ended
 June 30,


2018


2017


2018


2017

Income from continuing operations

$

10,075



$

7,800



$

12,877



$

8,451


Loss from discontinued operations

(8,441)



(2,237)



(37,833)



(5,895)


Net income (loss)

1,634



5,563



(24,956)



2,556


  Provision for income taxes

3,723



5,414



4,818



5,906


  Interest expense, net

8,532



7,990



16,960



16,243


  Transaction costs

677



189



837



389


  Depreciation and amortization

4,628



5,158



9,229



9,946


  Stock-based compensation

246



175



436



356


  Net loss from discontinued operations, net of income taxes

8,441



2,237



37,833



5,895


  Other (a)

(28)



756



(318)



790


Adjusted EBITDA

$

27,853



$

27,482



$

44,839



$

42,081


  Net cash paid for interest

(12,742)



(12,157)



(17,176)



(15,314)


  Capital expenditures

(4,340)



(4,522)



(8,760)



(8,415)


  Cash paid for taxes

(695)



(411)



(1,449)



(552)


Adjusted EBITDA Less Interest, Capex and Taxes

$

10,076



$

10,392



$

17,454



$

17,800




(a)

Other includes net (gain) loss on sale and retirement of assets and other (income) expense, net.

 

The following table reconciles net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA on a quarterly basis and for the twelve months ended June 30, 2018 (dollars in thousands):


Quarter Ended


Twelve
Months
Ended


September 30,
2017


December 31,
2017


March 31,
2018


June 30, 2018


June 30,
2018

Net income (loss)

$

14,292



$

12,746



$

(26,590)



$

1,634



$

2,082


Provision for income taxes

5,074



(18,331)



1,095



3,723



(8,439)


Interest expense, net

8,230



8,279



8,428



8,532



33,469


Transaction costs

218



569



160



677



1,624


Depreciation and amortization

4,833



4,220



4,601



4,628



18,282


Stock-based compensation

200



177



190



246



813


Business realignment costs



1,328







1,328


Goodwill and other intangible impairment charges



16,858







16,858


Net (income) loss from discontinued
operations, net of income taxes

(7,001)



(3,743)



29,392



8,441



27,089


Other (a)

187



(227)



(290)



(28)



(358)


Adjusted EBITDA

$

26,033



$

21,876



$

16,986



$

27,853



$

92,748




(a)

Other includes net (gain) loss on sale of assets and other expense (income), net.

 

 

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SOURCE Townsquare Media, Inc.

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