Wednesday, February 22, 2017

Entercom Reports 5 Percent Revenue Increase For Q4

Entercom Communications today reported financial results for the quarter ended December 31, 2016.

Fourth Quarter Highlights
  • Net revenues for the quarter increased 5% to $123.2 million
  • Station expenses increased 6% to $81.1 million
  • Station operating income increased 3% to $42.1 million
  • Adjusted EBITDA was flat at $35.2 million
  • Adjusted net income per share was $0.34, down $0.02
Full Year Highlights
  • Net revenues for the year increased 12% to $460.2 million
  • Station expenses increased 11% to $317.4 million
  • Station operating income increased 14% to $142.9 million
  • Adjusted EBITDA increased 12% to $114.7 million
  • Adjusted net income per share increased 13% to $0.98
David J. Field, President and Chief Executive Officer, stated: “Entercom posted another solid quarter of organic growth, completing an excellent year during which same-station revenues increased 4%, adjusted net income grew 13% and free cash flow improved 16%. And since the start of Q4, we have acquired a great new cluster of stations in Charlotte and successfully refinanced our credit facility to drive our interest expense down by roughly $10 million annually. Of course, our biggest news is our recently announced plan to merge with CBS Radio, a transformational event that will create scale-driven opportunities to compete more effectively with other media to accelerate growth. The combined company will be exceedingly well positioned to serve its listeners, advertisers, communities, shareholders, and employees and we are very excited about the opportunities that lie ahead."

David Field
On February 2, 2017, the Company announced an agreement to combine with CBS Radio in a tax-free, all stock Reverse Morris Trust transaction. The merger will make Entercom a leading local media and entertainment company with a nationwide footprint of stations including positions in all of the top 10 markets and 23 of the top 25 markets. Based on Entercom’s current stock price, the combined company will have a pro forma equity value of approximately $2 billion and the strongest balance sheet of any of the major radio groups. Upon closing of the transaction, the combined company will be led by David J. Field, Entercom’s President and Chief Executive Officer.

On January 6, 2017, the Company completed an acquisition of four stations in Charlotte, NC from Beasley Broadcast Group, Inc. for $24 million in cash. The Company commenced operations for three of the stations, The Link (WLNK-FM) and news/talk leader WBT AM/FM, on November 1, 2016 under a time brokerage agreement and the fourth station, The Fan (WFNZ-AM), upon closing. Operating results for the three stations operated under the TBA from November 1, 2016 through year end were included in the Company’s fourth quarter results as well as a $0.4 million TBA fee that the Company paid to Beasley.

In November, the Company entered into a new $540 million credit facility, including a $60 million revolver and $480 million term loan. The proceeds of the refinancing were used to repay the Company’s prior credit facility and to call its $220 million of outstanding 10.5% Senior Notes. The refinancing will generate approximately $10 million in pro forma annual interest expense savings.

The Company’s interest expense for the quarter was $9.1 million and first quarter 2017 interest expense is expected to be approximately $6 million, reflecting the savings from the new financing. The interest expense for the fourth quarter included interest on both the Senior Notes and the new term loan for a period of time.

Fourth quarter results include a $10.9 million loss on extinguishment of debt which includes the call premium paid to retire the Senior Notes and the write-off of deferred financing costs. In addition, the Company incurred $0.6 million in other expenses related to the refinancing.

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