Audacy Reports 'Strong, Uneven Ad Recovery'

Audacy, Inc. today reported financial results for the quarter ended March 31, 2021

From David J. Field, President and Chief Executive Officer, Audacy:

“The year has gotten off to an active start as we successfully completed the rebranding of the company to Audacy, reflecting our transformational progress into a leading, multi-platform audio content and entertainment company with scaled audience reach and a leadership position in virtually every key segment of the dynamic and growing audio market.”

David Field

“We are in the midst of a strong, albeit uneven, advertising recovery reflecting the nature of our business mix. First quarter digital revenues grew 17% and national revenues rebounded to prior year levels, but local ad revenues remained behind as many of our customers continue to be impacted by the pandemic. Because the local radio advertiser base is weighted toward later-stage recovery categories including restaurants, concerts and entertainment, movies, travel, and theme parks, we anticipate a strong recovery of local advertising across these businesses during the third and fourth quarters.”

“Our second quarter pacings are up more than 60% over 2020 reflecting massive improvements across all segments of our business from the depressed levels of the prior year. In another strong sign of recovery, our average local customer spending levels are now exceeding their average 2019 spending levels. Total local ad spending is down because of a decline in the number of customers with a significant majority of those inactive accounts concentrated in later-stage recovery business categories.”

“During the quarter, we announced and completed the acquisition of Podcorn, the country’s #1 podcast influencer marketplace hosting over 44,000 podcast creators, substantially bolstering our customer product offerings. We also announced a multi-year agreement with BetMGM making them a preferred sports betting partner of the Company.”

“We are emerging from the pandemic as a meaningfully stronger and better positioned company with significantly enhanced growth potential and are excited by the opportunities ahead as we continue to drive innovation and development of new products, content, and capabilities.”

First Quarter Summary

• Net revenues for the quarter were $240.8 million, down 19% compared to $297.0 million in the first quarter of 2020
• Digital revenues were $49.8 million, up 17% compared to the first quarter of 2020
• Our events business, which pre-COVID contributed 3% of our first quarter revenues, continued to be significantly disrupted and our event revenues for the quarter were down 98% compared to the first quarter of 2020
• Total operating expenses for the quarter were $249.0 million, down 13% compared to $285.7 million in the first quarter of 2020
• Operating loss for the quarter was $8.2 million, which included a non-cash impairment charge of $0.6 million, compared to operating income of $11.4 million in the first quarter of 2020
• Adjusted EBITDA for the quarter was $10.3 million, compared to $34.5 million in the first quarter of 2020
• In March, we issued $540 million of 6.75% senior secured second-lien notes and refinanced our 7.25% senior unsecured notes and paid down $117 million of our first-lien debt
• Liquidity at the end of the first quarter was $220.8 million, up from $160.2 million at year end, comprised of $169.3 million of available revolver capacity and $51.5 million of cash on-hand

Recent Company Developments

• Entercom Rebrands as Audacy. On March 30th, we announced the transition to a new brand name, Audacy, reflecting our transformation into a scaled, multi-platform audio content and entertainment company with a leadership position in virtually every segment of the growing audio market. Audacy’s stock ticker officially changed from ETM to AUD on April 9th.
• Podcasting Star Power. Our Cadence13 studio entered into an exclusive podcast partnership with global superstar Demi Lovato, renowned singer, actress, and activist. C13Originals expanded its partnership with Pulitzer Prize-winning historian and author Jon Meacham to launch Shining City Audio, a history-focused podcast studio co-venture. C13Features, Cadence13’s pioneering scripted studio, unveiled the first three feature-length fictionalized audio “movies for your ears,” slated to launch within the next year, with more to follow. Cadence13 is working closely with Endeavor Content on its initial C13Features slate, leveraging their relationships, and working jointly to develop film and television projects based on the IP. Pineapple Street Studios launched two original docuseries, My Fugitive and Stay Away from Matthew MaGill, with exclusive binge windows on Audacy. Pineapple Street Studios also created the hit original docuseries Welcome to Your Fantasy, launched Netflix’ Behind the Scenes: Shadow and Bone, and Hulu’s Your Attention Please companion podcasts. Finally, Audacy announced a distribution partnership with “The Rich Eisen Show.”
• Acquisition in Podcasting. We acquired Podcorn, the nation’s #1 podcast influencer marketplace, for $14.6 million in cash and a performance-based earn out over the next three years. Podcorn’s marketplace includes over 44,000 creators and has facilitated thousands of podcast ad campaigns. Podcorn creates an infrastructure for enabling direct podcaster and advertiser relationships, surfacing the most relevant matches to scale native branded content, drive higher ROI for brands, and enhance how podcast creators monetize their content. The acquisition fills an industry-wide gap in helping brands of all sizes tap into the hard-to-access micro-influencer community.
• Partnership with BetMGM. We reached a multi-year, multi-platform agreement with BetMGM, a leader in the mobile sports betting space. The deal provides BetMGM with priority access to Audacy assets and will showcase their expansive digital offerings to the millions of sports fans across the country who tune in daily to Audacy’s portfolio of broadcast stations, podcasts and shows. This alliance comes only months after the announcement of a landmark, multi-year partnership with Fan Duel designating them as the “Official Sportsbook of Audacy”. That non-exclusive transaction remains the single largest advertising deal in the history of the radio industry and provides Fan Duel with the dominant position across the spectrum of Audacy’s distribution channels.