Entercom: 1Q 2017 Revenue Increased 1.4 Percent

Entercom Communications today reported financial results for the quarter ended March 31, 2017.

First Quarter Highlights

• Net revenues for the quarter increased 1.4% to $97.5 million
• Station expenses increased 5% to $75.4 million
• Station operating income decreased 10% to $22.0 million
• Adjusted EBITDA decreased 23% to $14.1 million
• Adjusted net income per share was $0.07, down $0.02

David Field

David J. Field, President and Chief Executive Officer, stated: “I am very pleased with our progress on all fronts as we continue to plan and prepare for our transformational merger with CBS Radio. This will truly be a game-changing event for Entercom as we will achieve a number of scale-related benefits, including the ability to compete far more effectively against other media for a larger share of advertising spending.

"First quarter revenues increased 1.4%, down about 1% on a same-station basis ex-political. We experienced a highly unusual degree of large one-time only expenses during the quarter (including the return of a station license in Sacramento, CBS transaction costs and our CFO transition), that drove expenses significantly higher. Looking ahead to the completion of the merger with CBS, we expect synergies that will drive margin expansion.”

Company Highlights:

• On February 2, 2017, the Company announced an agreement to combine with CBS Radio in a tax-free, all stock 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 $1.6 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. Additional information concerning the proposed CBS merger can be found in the Company’s SEC Form S-4 filing on April 12, 2017.
• First quarter results include a non-cash $13.5 write-down related to the relinquishment of an FM license in Sacramento to the FCC in order to facilitate the CBS transaction and $10.3 million in merger and acquisition costs related to the CBS transaction, which were primarily for legal and financial advisory services. In addition, the Company’s first quarter GAAP tax rate was higher than normal due to the non-deductibility of certain M&A related expenses.
• 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 (“TBA”) and the fourth station, The Fan (WFNZ-AM), upon the closing on January 6, 2017. Operating results for the three stations operated under the TBA were included in the Company’s results for the full quarter and results for The Fan beginning January 7th.