Falling Ad Revenue Leaves Audacy On The Ropes

When Audacy reported more sagging revenue and tepid ad sales in its fourth quarter 2022 earnings in March, analyst Craig Huber of Huber Research Partners set the tone for the year that was to come for the Philadelphia-based audio content provider. Huber said the company might not survive the new year unless it was much more aggressive in cutting costs.

Audacy executives attributed the financial woes to decreased advertising demand and macroeconomic issues created by inflation, but the nation’s second-largest radio station owner was also grappling with almost $2 billion in debt and a stock price below the $1 listing requirement from the New York Stock Exchange.

The Philadelphia Business Journal reports that while Audacy  has a massive national presence in the radio industry, it also is important to the Philadelphia region, employing hundreds of workers at its corporate headquarters at 2400 Market St.

The company did get to work on cost cutting by selling two of its 220 radio stations for $15.5 million in April. But it soon ran afoul of the NYSE, which began delisting proceedings in May and officially delisted the company in October after a failed appeal.

During the delisting proceedings, Audacy tried to regain compliance with NYSE requirements by implementing a 1-for-30 reverse stock split of the company’s Class A and Class B common stock in an effort to boost its share price — which was at just 8 cents when the stock split occurred in June. The split sent Audacy’s stock to as high as $2.15 per share. But that was short lived, as it spiraled below $1 in early August and fell to 20 cents per share in mid-December.

In July, Audacy began negotiations with creditors to refinance its $1.9 billion in debt. It skipped a debt payment in late September and sought and received several extensions, the latest delaying the repayment of $18.9 million in debt from December into early 2024.

As of the end of its fiscal third quarter on Sept. 30, Audacy said it had $57.4 million in cash or cash equivalents. While Audacy has enough cash to cover the debt due in the coming months, it still has more debt to pay down — including $926.4 million of debt set to mature next year.

If talks with its creditors fail, the company said that a bankruptcy filing could be on the horizon. It noted last summer that things are “to a large extent, outside our control” since lenders hold most of the cards with any potential restructuring..