Emmis Radio Revenue Drops, KPWR Proceeds To Lower Debt

Emmis Communications Corporation today announced results for its fourth fiscal quarter and full-year ending February 28, 2017.  After the end of the quarter, on May 8, 2017, Emmis entered into an agreement to sell KPWR-FM in Los Angeles to an affiliate of the Mereulo Group for $82.75 million.  This transaction is expected to close later this year and proceeds will be used to repay more than 50% of the Company's credit facility debt outstanding.

Emmis' radio net revenues for the fourth fiscal quarter were $34.0 million, down from $36.4 million from the prior year, a decrease of 6.6%. Per Miller Kaplan reporting, which excludes barter revenues and syndication revenues, and excluding results from Los Angeles, Emmis' fourth quarter radio revenues were down 4.8% in markets that were down 0.2%. Austin and St. Louis outperformed their markets, with St. Louis up 10% in a market that was up 1%.

For the full year, radio revenues were $165.1 million, compared to $169.2 million in the prior year, a decrease of 2.4%.   For the full year, Emmis radio revenues per Miller Kaplan reporting, excluding results from Los Angeles, were down 0.3%, narrowly missing the performance of its markets, which were up 0.5%.

During the fourth quarter, Emmis closed on the sale of its Terre Haute radio cluster on January 30, 2017 and closed on the sale of Los Angeles, Atlanta, Cincinnati, and Orange Coast magazines on February 28, 2017.  Emmis' sole remaining magazine is Indianapolis Monthly.

"The decision to sell KPWR was an extremely difficult one to make, but it allows us to dramatically reduce our indebtedness, leading to much needed financial flexibility during challenging times for the U.S. radio business," said Jeff Smulyan, CEO & Chairman of the Board of Emmis. "Our industry needs a catalyst, and we remain convinced we have it in NextRadio®.  The NextRadio-developed Dial Report™, which provides robust data measurement and big data analytics for radio campaigns, has been a huge hit with advertisers and agencies since its introduction in January of this year."

Smulyan added that the cash commitment to Sprint had been satisfied and the business relationship between NextRadio and Sprint was extended for an additional three years.