Entercom 2Q Revenue Reported As 'Soft'

Entercom Communications 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.

David Field

"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.”

On August 2, the Company reached a definitive agreement with Bonneville International Corporation 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. 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.

In July, the Company terminated its agreement with United States Traffic Network 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 WBEB 101.1 MoreFM 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 WXTU 92.5 in Philadelphia, PA to Beasley Broadcast Group, Inc. for $38.0 million in cash.