IMMEDIATE RELEASE
TOWNSQUARE ANNOUNCES STRONG SECOND QUARTER NET REVENUE
GROWTH OF 7% AND ADJUSTED EBITDA GROWTH OF 19%
Raising 2019 Adjusted EBITDA Guidance
Digital Revenue Over 33% of Total Net Revenue
Purchase, NY - August 6, 2019 - Townsquare Media, Inc. (NYSE: TSQ) (“Townsquare,” the “Company,” “we,” “us,” or “our”) announced today financial results for the second quarter ended June 30, 2019.
“Townsquare’s strong momentum continued into the second quarter, with net revenue, net income from continuing operations, and Adjusted EBITDA increasing 7.4%, 23.5%, and 19.0%, respectively, over the second quarter of the prior year,” commented Bill Wilson, Chief Executive Officer of Townsquare. “Our second quarter growth rates were fueled by an acceleration in Advertising net revenue growth, which increased 7.1% excluding political revenue over the prior year, and the strong net revenue growth of Townsquare Interactive, which increased 30.8% over the prior year. Townsquare Interactive added approximately 1,100 net subscribers in the second quarter, a significant increase in quarterly net additions over prior quarters, while maintaining strong profit margins in excess of 30%. The ongoing strong performance of Townsquare Interactive and Townsquare Ignite, our proprietary digital programmatic advertising platform, reinforce our belief that each of those divisions will generate $100 million in annual net revenue within the next three to five years.”
Mr. Wilson added, “Our broad product suite of high quality, locally focused broadcast, digital and live event offerings has allowed us to provide complete, end-to-end marketing solutions for our customers while simultaneously driving net revenue and Adjusted EBITDA growth. With greater than one-third of our total net revenue originating from digital sources, Townsquare is not your average radio company. As a result of the ongoing strength of Townsquare Interactive and Townsquare Ignite, we believe that Townsquare is best described as a premier local and digital marketing solutions company, bringing large market solutions to small and mid-sized markets.”
The Company also announced today that its Board of Directors approved a quarterly cash dividend of $0.075 per share. The dividend will be payable on November 15, 2019 to shareholders of record as of the close of business on September 26, 2019.
Second Quarter Highlights*
• | As compared to the second quarter of 2018 on a GAAP basis: |
•Net revenue increased 7.4%, and 8.3% excluding political revenue
•Advertising net revenue increased 6.0%, and 7.1% excluding political revenue
•Townsquare Interactive net revenue increased 30.8%
•Live Events net revenue decreased 13.8%
•Net income improved 554.6%, and net income from continuing operations increased 23.5%
•Adjusted EBITDA increased 19.0%
• | As compared to the second quarter of 2018 on a pro forma basis: |
•Net revenue increased 5.3%, and 6.2% excluding political revenue
•Net income improved 348.7%
•Adjusted EBITDA increased 15.6%
• | Diluted net income per share from continuing operations was $0.37 |
• | Townsquare Interactive added 1,100 net subscribers, ending the quarter with approximately 17,300 subscribers |
Year to Date Highlights*
• | As compared to the six months ended June 30, 2018 on a GAAP basis: |
•Net revenue increased 7.0%, and 7.7% excluding political revenue
•Advertising net revenue increased 5.0%, and 5.9% excluding political revenue
•Townsquare Interactive net revenue increased 31.2%
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•Live Events net revenue decreased 11.5%
•Net income improved 123.7%, and net income from continuing operations increased 7.7%
•Adjusted EBITDA increased 14.6%
• | As compared to the six months ended June 30, 2018 on a pro forma basis: |
•Net revenue increased 5.0%, and 5.7% excluding political revenue
•Net income improved 124.7%
•Adjusted EBITDA increased 11.9%
* See below for discussion of non-GAAP measures and reconciliations to GAAP measures.
Guidance
Based on the Company’s second quarter results and its outlook for the remainder of 2019, Townsquare is updating its net revenue and Adjusted EBITDA guidance for the third quarter of 2019 and full year 2019 as follows:
• | For the third quarter of 2019, net revenue is expected to be between $109 million and $111 million and Adjusted EBITDA is expected to be between $27 million and $28 million. |
• | For the full year 2019, net revenue is expected to be between $424 million and $430 million and Adjusted EBITDA is expected to be between $98 million and $100 million. |
Segment Reporting
We have three reportable operating segments, Advertising, which includes broadcast and digital advertising products and solutions, Townsquare Interactive, our digital marketing solutions business and Live Events, which is comprised of the Company's live events, including concerts, expositions and other experiential events.
Quarter Ended June 30, 2019 Compared to the Quarter Ended June 30, 2018
Net Revenue
Net revenue for the quarter ended June 30, 2019 increased $7.8 million, or 7.4%, to $113.1 million, as compared to $105.3 million in the same period last year. Advertising net revenue increased $5.2 million, or 6.0% to $91.5 million, Townsquare Interactive net revenue increased $3.6 million, or 30.8%, to $15.3 million, and Live Events net revenue decreased $1.0 million, or 13.8%, to $6.3 million, each as compared to the same period last year. Excluding political revenue, net revenue increased $8.6 million, or 8.3%, to $112.6 million, and Advertising net revenue increased $6.0 million, or 7.1%, to $91.0 million.
Pro forma net revenue for the quarter ended June 30, 2019 increased $5.7 million, or 5.3%, to $113.1 million, as compared to $107.4 million in the same period last year. As used in this release, the term “pro forma” means pro forma for our acquisition of three radio stations in Princeton, NJ on July 2, 2018. Pro forma Advertising net revenue increased $3.2 million, or 3.6%, to $91.5 million, pro forma Townsquare Interactive net revenue increased $3.6 million, or 30.8%, to $15.3 million, and pro forma Live Events net revenue decreased $1.1 million, or 14.9%, to $6.3 million, each as compared to the same period last year. Excluding political revenue, pro forma net revenue increased $6.5 million, or 6.2%, to $112.6 million, and pro forma Advertising net revenue increased $4.0 million, or 4.6%, to $91.0 million.
Net Income
Net income for the quarter ended June 30, 2019 increased $9.1 million, or 554.6%, to $10.7 million, as compared to $1.6 million in the same period last year. Net income from continuing operations increased $2.0 million or 23.5%, to $10.6 million, as compared to $8.6 million in the same period last year.
Pro forma net income for the quarter ended June 30, 2019 improved $8.3 million, or 348.7%, to $10.7 million, as compared to $2.4 million in the same period last year.
Adjusted EBITDA
Adjusted EBITDA for the quarter ended June 30, 2019 increased $4.8 million, or 19.0%, to $30.1 million, as compared to $25.3 million in the same period last year.
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Pro forma Adjusted EBITDA for the quarter ended June 30, 2019 increased $4.1 million, or 15.6%, to $30.1 million as compared to $26.1 million in the same period last year.
Six Months Ended June 30, 2019 Compared to the Six Months Ended June 30, 2018
Net Revenue
Net revenue for the six months ended June 30, 2019 increased $13.5 million, or 7.0%, to $206.8 million, as compared to $193.3 million in the same period last year. Advertising net revenue increased $8.0 million, or 5.0% to $165.8 million, Townsquare Interactive net revenue increased $7.0 million, or 31.2%, to $29.5 million, and Live Events net revenue decreased $1.5 million, or 11.5%, to $11.5 million, each as compared to the same period last year. Excluding political revenue, net revenue increased $14.7 million, or 7.7%, to $206.0 million, and Advertising net revenue increased $9.2 million, or 5.9%, to $165.0 million.
Pro forma net revenue for the six months ended June 30, 2019 increased $9.9 million, or 5.0%, to $206.8 million, as compared to $196.9 million in the same period last year. Pro forma Advertising net revenue increased $4.5 million, or 2.8%, to $165.8 million, pro forma Townsquare Interactive net revenue increased $7.0 million, or 31.2%, to $29.5 million, and pro forma Live Events net revenue decreased $1.6 million, or 12.4%, to $11.5 million, each as compared to the same period last year. Excluding political revenue, pro forma net revenue increased $11.1 million, or 5.7%, to $206.0 million, and pro forma Advertising net revenue increased $5.7 million, or 3.6%, to $165.0 million.
Net Income
Net income for the six months ended June 30, 2019 increased $30.9 million to $5.9 million, as compared to a net loss of $25.0 million in the same period last year. Net income from continuing operations increased $0.9 million or 7.7%, to $13.0 million, as compared to $12.1 million in the same period last year.
Pro forma net income for the six months ended June 30, 2019 increased $29.8 million to $5.9 million, as compared to a net loss of $23.9 million in the same period last year.
Adjusted EBITDA
Adjusted EBITDA for the six months ended June 30, 2019 increased $6.3 million, or 14.6%, to $49.6 million, as compared to $43.3 million in the same period last year.
Pro forma Adjusted EBITDA for the six months ended June 30, 2019 increased $5.3 million, or 11.9%, to $49.6 million as compared to $44.3 million in the same period last year.
Liquidity and Capital Resources
As of June 30, 2019, we had a total of $62.8 million of cash on hand and $50.0 million of available borrowing capacity under our revolving credit facility. As of June 30, 2019, we had $560.5 million of outstanding indebtedness, representing 5.5x and 4.9x gross and net leverage, respectively, based on pro forma Adjusted EBITDA for the twelve months ended June 30, 2019 of $101.3 million.
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The table below presents a summary, as of August 5, 2019, of our outstanding common stock and securities convertible into common stock, excluding options issued under our 2014 Omnibus Incentive Plan.
Security | Number Outstanding1 | Description | ||
Class A common stock | 14,313,844 | One vote per share. | ||
Class B common stock | 3,011,634 | 10 votes per share.2 | ||
Class C common stock | 1,636,341 | No votes.2 | ||
Warrants | 8,977,676 | Each warrant is exercisable for one share of Class A common stock, at an exercise price of $0.0001 per share. The aggregate exercise price for all warrants currently outstanding is $898.3 | ||
Total | 27,939,495 | |||
1 Each of the shares of common stock listed below, including the shares of Class A common stock issuable upon exercise of the warrants, has equal economic rights. | ||||
2 Each share converts into 1 share of Class A common stock upon transfer or at the option of the holder, subject to certain conditions, including compliance with FCC rules. | ||||
3 The warrants are fully vested and exercisable for shares of Class A common stock, subject to certain conditions, including compliance with FCC rules. | ||||
We are not providing basic earnings per share information at this time as we continue to work through technical issues revolving around the accounting for our outstanding warrants with our newly appointed independent auditors, BDO USA, LLP. We will provide this data when we file the Company’s Quarterly Report on Form 10-Q for the second quarter of 2019.
Conference Call
Townsquare Media, Inc. will host a conference call to discuss certain second quarter 2019 financial results and 2019 guidance on Tuesday, August 6, 2019 at 8:00 a.m. Eastern Time. The conference call dial-in number is 1-877-407-0784 (U.S. & Canada) or 1-201-689-8560 (International) and the confirmation code is 13692656. A live webcast of the conference call will also be available on the equity investor relations page of the Company’s website at www.townsquaremedia.com.
A replay of the conference call will be available through August 13, 2019. To access the replay, please dial 1-844-512-2921 (U.S. & Canada) or 1-412-317-6671 (International) and enter confirmation code 13692656. A web-based archive of the conference call will also be available at the above website.
About Townsquare Media, Inc.
Townsquare is a radio, digital media, entertainment and digital marketing solutions company principally focused on being the premier local advertising and marketing solutions platform in small and mid-sized markets across the U.S. Our assets include 321 radio stations and more than 330 local websites in 67 U.S. markets, a digital marketing solutions company (Townsquare Interactive) serving approximately 17,300 small to medium sized businesses, a proprietary digital programmatic advertising platform (Townsquare Ignite) and approximately 200 local live events each year. Our brands include local media assets such as WYRK, KLAQ, K2 and NJ101.5; iconic local and regional events such as WYRK’s Taste of Country, the Boise Music Festival, the Red Dirt BBQ & Music Festival and Taste of Fort Collins; and leading tastemaker music and entertainment websites such as XXLmag.com, TasteofCountry.com and Loudwire.com. For more information, please visit www.townsquaremedia.com, www.townsquareinteractive.com, and www.townsquareignite.com.
Forward-Looking Statements
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Except for the historical information contained in this press release, the matters addressed are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “aim,” “anticipate,” “estimate,” “expect,” “forecast,” “outlook,” “potential,” “project,” “projection,” “plan,” “intend,” “seek,” “believe,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other words and terms. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statement. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof or as of the date specified herein. See “Risk Factors” and “Forward-Looking Statements” included in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on March 12, 2019, for a discussion of factors that could cause our actual results to differ from those expressed or implied by forward-looking statements. Townsquare Media, Inc. assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise, except as required by law.
Non-GAAP Financial Measures and Definitions
In this press release, we refer to Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Less Interest, Capex and Taxes, Adjusted Net Income and Adjusted Net Income Per Share which are financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).
We define Adjusted Operating Income as operating income before the deduction of depreciation and amortization, stock-based compensation, corporate expenses, transaction costs, business realignment costs, impairment loss of long-lived and intangible assets, impairment loss on investment and net loss (gain) on sale and retirement of assets. We define Adjusted EBITDA as net income (loss) before the deduction of income taxes, interest expense, net, repurchase of debt, transaction costs, depreciation and amortization, stock-based compensation, business realignment costs, impairment of goodwill and intangible assets, impairment loss on investment, net (income) loss from discontinued operations, net of income taxes, net (loss) gain on sale and retirement of assets and other expense (income) net. Adjusted EBITDA Less Interest, Capex and Taxes is defined as Adjusted EBITDA less net cash interest expense, capital expenditures and cash paid for taxes. Adjusted Net Income is defined as net income (loss) before the deduction of transaction costs, business realignment costs, net loss from discontinued operations, net of income taxes, and net loss (gain) on sale and retirement of assets. Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the weighted average shares outstanding. These measures do not represent, and should not be considered as alternatives to, net income (loss), or cash flows from operations, as determined under GAAP. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. You should be aware that in the future we may incur expenses or charges that are the same as or similar to some of the adjustments in the presentation, and we do not infer that our future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP measures may not be comparable to similarly-named measures reported by other companies. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are set forth in the tables below. We do not provide reconciliations on forward-looking statements due to the inability to estimate certain components of forward-looking statements that are not available without unreasonable efforts. Where we use the term “pro forma”, it refers to pro forma financial information for our acquisition of three radio stations in Princeton, NJ on July 2, 2018. as if the acquisition had occurred on January 1, 2018.
We use Adjusted Operating Income to evaluate the operating performance of our business segments. We use Adjusted EBITDA to facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting interest expense), taxation and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. We use Adjusted Net Income and Adjusted Net Income Per Share to assess total company operating performance on a consistent basis. We believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of transaction costs, net (loss) gain on sale and retirement of assets, business realignment costs, certain impairments, and net income (loss) from discontinued operations. Further, while discretionary bonuses for members of management are not determined with reference to specific targets, our Board of Directors may consider Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Less Interest, Capex and Taxes, Adjusted Net Income, and Adjusted Net Income Per Share when determining discretionary bonuses.
Investor Relations
Claire Yenicay
(203) 900-5555
investors@townsquaremedia.com
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
(in Thousands, Except Share and Per Share Data)
(unaudited)
June 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 62,764 | $ | 61,396 | |||
Accounts receivable, net of allowance of $3,285 and $3,454, respectively | 67,354 | 62,459 | |||||
Prepaid expenses and other current assets | 10,801 | 8,939 | |||||
Current assets of discontinued operations | 22 | 19,763 | |||||
Total current assets | 140,941 | 152,557 | |||||
Property and equipment, net | 112,923 | 112,377 | |||||
Intangible assets, net | 478,024 | 478,938 | |||||
Goodwill | 226,981 | 226,981 | |||||
Investments | 11,775 | 9,505 | |||||
Operating lease right-of-use assets | 41,785 | — | |||||
Other assets | 294 | 6,909 | |||||
Total assets | $ | 1,012,723 | $ | 987,267 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 11,527 | $ | 13,393 | |||
Current portion of long-term debt | 5 | 5 | |||||
Deferred revenue | 7,992 | 7,922 | |||||
Accrued expenses and other current liabilities | 19,874 | 32,749 | |||||
Short-term operating lease liabilities | 8,021 | — | |||||
Accrued interest | 4,647 | 4,563 | |||||
Current liabilities of discontinued operations | 3,968 | 7,138 | |||||
Total current liabilities | 56,034 | 65,770 | |||||
Long-term debt, less current portion (net of deferred finance costs of $4,930 and $5,155, respectively) | 555,552 | 555,330 | |||||
Deferred tax liability | 18,513 | 16,031 | |||||
Long-term operating lease liabilities | 36,765 | — | |||||
Other long-term liabilities | 1,633 | 8,559 | |||||
Total liabilities | 668,497 | 645,690 | |||||
Stockholders’ equity: | |||||||
Class A common stock, par value $0.01 per share; 300,000,000 shares authorized; 14,313,844 and 14,297,066 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | 143 | 143 | |||||
Class B common stock, par value $0.01 per share; 50,000,000 shares authorized; 3,011,634 shares issued and outstanding | 30 | 30 | |||||
Class C common stock, par value $0.01 per share; 50,000,000 shares authorized; 1,636,341 shares issued and outstanding | 17 | 17 | |||||
Total common stock | 190 | 190 | |||||
Additional paid-in capital | 366,954 | 365,835 | |||||
Accumulated deficit | (25,775 | ) | (25,735 | ) | |||
Non-controlling interest | 2,857 | 1,287 | |||||
Total stockholders’ equity | 344,226 | 341,577 | |||||
Total liabilities and stockholders’ equity | $ | 1,012,723 | $ | 987,267 | |||
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in Thousands, Except Per Share Data)
(unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net revenue | $ | 113,088 | $ | 105,319 | $ | 206,770 | $ | 193,302 | |||||||
Operating costs and expenses: | |||||||||||||||
Direct operating expenses | 75,590 | 72,722 | 144,219 | 137,078 | |||||||||||
Depreciation and amortization | 5,897 | 4,409 | 12,405 | 8,792 | |||||||||||
Corporate expenses | 7,370 | 7,290 | 12,957 | 12,939 | |||||||||||
Stock-based compensation | 660 | 246 | 1,536 | 436 | |||||||||||
Transaction costs | 128 | 678 | 276 | 837 | |||||||||||
Business realignment costs | — | — | 4 | — | |||||||||||
Impairment of long lived and intangible assets | 231 | — | 231 | — | |||||||||||
Net gain on sale and retirement of assets | (21 | ) | (388 | ) | (2 | ) | (398 | ) | |||||||
Total operating costs and expenses | 89,855 | 84,957 | 171,626 | 159,684 | |||||||||||
Operating income | 23,233 | 20,362 | 35,144 | 33,618 | |||||||||||
Other expense: | |||||||||||||||
Interest expense, net | 8,526 | 8,533 | 17,121 | 16,960 | |||||||||||
Other expense, net | 36 | 48 | 70 | 80 | |||||||||||
Income from continuing operations before income taxes | 14,671 | 11,781 | 17,953 | 16,578 | |||||||||||
Provision for income taxes | 4,059 | 3,188 | 4,967 | 4,519 | |||||||||||
Net income from continuing operations | 10,612 | 8,593 | 12,986 | 12,059 | |||||||||||
Net income (loss) from discontinued operations, net of income taxes | 84 | (6,959 | ) | (7,080 | ) | (37,015 | ) | ||||||||
Net income (loss) | $ | 10,696 | $ | 1,634 | $ | 5,906 | $ | (24,956 | ) | ||||||
Net income (loss) attributable to: | |||||||||||||||
Controlling interests | $ | 10,203 | $ | 1,335 | $ | 4,966 | $ | (25,473 | ) | ||||||
Non-controlling interests | 493 | 299 | 940 | 517 | |||||||||||
Diluted income (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.37 | $ | 0.30 | $ | 0.44 | $ | 0.42 | |||||||
Discontinued operations | $ | — | $ | (0.25 | ) | $ | (0.26 | ) | $ | (1.34 | ) | ||||
Weighted average shares outstanding: | |||||||||||||||
Diluted | 27,490 | 27,611 | 27,473 | 27,541 | |||||||||||
Cash dividend declared per share | $ | 0.075 | $ | 0.075 | $ | 0.150 | $ | 0.150 | |||||||
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in Thousands)
(unaudited)
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 5,906 | $ | (24,956 | ) | ||
Loss from discontinued operations | (7,080 | ) | (37,015 | ) | |||
Income from continuing operations | 12,986 | 12,059 | |||||
Adjustments to reconcile income from continuing operations to net cash flows from operating activities | |||||||
Depreciation and amortization | 12,405 | 8,792 | |||||
Amortization of deferred financing costs | 639 | 761 | |||||
Net deferred taxes and other | 4,967 | 4,519 | |||||
Provision for doubtful accounts | 824 | 1,514 | |||||
Stock-based compensation expense | 1,536 | 436 | |||||
Trade activity, net | (5,506 | ) | (7,281 | ) | |||
Non-cash interest expense | — | (10 | ) | ||||
Write-off of deferred financing costs | 7 | 97 | |||||
Impairment of long lived and intangible assets | 231 | — | |||||
Net gain on sale of assets | (2 | ) | (398 | ) | |||
Changes in assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (4,021 | ) | (2,947 | ) | |||
Prepaid expenses and other assets | (1,154 | ) | (1,294 | ) | |||
Accounts payable | (1,860 | ) | 495 | ||||
Accrued expenses | (14,025 | ) | (3,090 | ) | |||
Accrued interest | 84 | (1,037 | ) | ||||
Other long-term liabilities | (244 | ) | (416 | ) | |||
Net cash provided by operating activities - continuing operations | 6,867 | 12,200 | |||||
Net cash used in operating activities - discontinued operations | (3,464 | ) | (11,787 | ) | |||
Net cash provided by operating activities | 3,403 | 413 | |||||
Cash flows from investing activities: | |||||||
Purchase of property and equipment | (8,928 | ) | (8,756 | ) | |||
Payments for acquisitions, net of cash acquired | (6 | ) | (3,724 | ) | |||
Proceeds from sale of assets | 171 | 723 | |||||
Net cash used in investing activities - continuing operations | (8,763 | ) | (11,757 | ) | |||
Net cash provided by investing activities - discontinued operations | 11,093 | 23,792 | |||||
Net cash provided by investing activities | 2,330 | 12,035 | |||||
Cash flows from financing activities: | |||||||
Repayment of bank debt | — | (9,519 | ) | ||||
Dividend payments | (4,141 | ) | (2,061 | ) | |||
Sale of non-controlling interest | 1,500 | — | |||||
Cash distribution to non-controlling interests | (1,300 | ) | (514 | ) | |||
Deferred financing costs | (421 | ) | (2 | ) | |||
Repayments of capitalized obligations | (3 | ) | (3 | ) | |||
Net cash used in financing activities - continuing operations | (4,365 | ) | (12,099 | ) | |||
Net cash used in financing activities - discontinued operations | — | (19 | ) | ||||
Net cash used in financing activities | (4,365 | ) | (12,118 | ) | |||
Effect of exchange rate changes | — | 92 | |||||
Net increase in cash and cash equivalents | 1,368 | 422 | |||||
Cash and cash equivalents: | |||||||
Beginning of period | 61,396 | 62,041 | |||||
End of period | $ | 62,764 | $ | 62,463 | |||
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in Thousands)
(unaudited)
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Supplemental Disclosure of Cash Flow Information: | |||||||
Cash payments: | |||||||
Interest | $ | 16,928 | $ | 17,176 | |||
Income taxes | 570 | 1,449 | |||||
Supplemental Disclosure of Non-cash Activities: | |||||||
Dividends declared during the period | $ | 2,124 | $ | 2,123 | |||
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT
(in Thousands, Except Per Share Data)
(unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Advertising net revenue | $ | 91,483 | $ | 86,306 | $ | 165,799 | $ | 157,849 | |||||||
Townsquare Interactive net revenue | 15,288 | 11,685 | 29,495 | 22,480 | |||||||||||
Live Events net revenue | 6,317 | 7,328 | 11,476 | 12,973 | |||||||||||
Net revenue | 113,088 | 105,319 | 206,770 | 193,302 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Advertising operating expenses | 60,621 | 58,582 | 115,508 | 111,234 | |||||||||||
Townsquare Interactive operating expenses | 10,274 | 8,269 | 20,101 | 15,813 | |||||||||||
Live Events operating expenses | 4,695 | 5,871 | 8,610 | 10,031 | |||||||||||
Direct operating expenses | 75,590 | 72,722 | 144,219 | 137,078 | |||||||||||
Depreciation and amortization | 5,897 | 4,409 | 12,405 | 8,792 | |||||||||||
Corporate expenses | 7,370 | 7,290 | 12,957 | 12,939 | |||||||||||
Stock-based compensation | 660 | 246 | 1,536 | 436 | |||||||||||
Transaction costs | 128 | 678 | 276 | 837 | |||||||||||
Business realignment costs | — | — | 4 | — | |||||||||||
Impairment of long lived and intangible assets | 231 | — | 231 | — | |||||||||||
Net gain on sale and retirement of assets | (21 | ) | (388 | ) | (2 | ) | (398 | ) | |||||||
Total operating costs and expenses | 89,855 | 84,957 | 171,626 | 159,684 | |||||||||||
Operating income | 23,233 | 20,362 | 35,144 | 33,618 | |||||||||||
Other expense: | |||||||||||||||
Interest expense, net | 8,526 | 8,533 | 17,121 | 16,960 | |||||||||||
Other expense, net | 36 | 48 | 70 | 80 | |||||||||||
Income from continuing operations before income taxes | 14,671 | 11,781 | 17,953 | 16,578 | |||||||||||
Provision for income taxes | 4,059 | 3,188 | 4,967 | 4,519 | |||||||||||
Net income from continuing operations | 10,612 | 8,593 | 12,986 | 12,059 | |||||||||||
Net income (loss) from discontinued operations, net of income taxes | 84 | (6,959 | ) | (7,080 | ) | (37,015 | ) | ||||||||
Net income (loss) | $ | 10,696 | $ | 1,634 | $ | 5,906 | $ | (24,956 | ) | ||||||
10
The following table presents net revenue and Adjusted Operating Income by segment, for the three and six months ended June 30, 2019, and 2018, respectively (in thousands):
Actual | |||||||||||||||
Three Months Ended June 30, 2019 | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Advertising net revenue | $ | 91,483 | $ | 86,306 | $ | 165,799 | $ | 157,849 | |||||||
Townsquare Interactive net revenue | 15,288 | 11,685 | 29,495 | 22,480 | |||||||||||
Live Events net revenue | 6,317 | 7,328 | 11,476 | 12,973 | |||||||||||
Net revenue | $ | 113,088 | $ | 105,319 | $ | 206,770 | $ | 193,302 | |||||||
Advertising Adjusted Operating Income | 30,862 | 27,724 | 50,291 | 46,615 | |||||||||||
Townsquare Interactive Adjusted Operating Income | 5,014 | 3,416 | 9,394 | 6,667 | |||||||||||
Live Events Adjusted Operating Income | 1,622 | 1,457 | 2,866 | 2,942 | |||||||||||
Adjusted Operating Income | $ | 37,498 | $ | 32,597 | $ | 62,551 | $ | 56,224 | |||||||
The following table presents on a pro forma basis, net revenue and Adjusted Operating Income by segment, for the three and six months ended June 30, 2019, and 2018, respectively (in thousands):
Pro Forma | |||||||||||||||
Three Months Ended June 30, 2019 | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Advertising net revenue | $ | 91,483 | $ | 88,284 | $ | 165,799 | $ | 161,325 | |||||||
Townsquare Interactive net revenue | 15,288 | 11,685 | 29,495 | 22,480 | |||||||||||
Live Events net revenue | 6,317 | 7,426 | 11,476 | 13,106 | |||||||||||
Net revenue | $ | 113,088 | $ | 107,395 | $ | 206,770 | $ | 196,911 | |||||||
Advertising Adjusted Operating Income | 30,862 | 28,452 | 50,291 | 47,617 | |||||||||||
Townsquare Interactive Adjusted Operating Income | 5,014 | 3,416 | 9,394 | 6,667 | |||||||||||
Live Events Adjusted Operating Income | 1,622 | 1,476 | 2,866 | 2,958 | |||||||||||
Adjusted Operating Income | $ | 37,498 | $ | 33,344 | $ | 62,551 | $ | 57,242 | |||||||
11
The following table reconciles on a GAAP basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Income for the three and six months ended June 30, 2019, and 2018, respectively (in thousands, except per share data):
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income (loss) | $ | 10,696 | $ | 1,634 | $ | 5,906 | $ | (24,956 | ) | ||||||
Net income (loss) from discontinued operations, net of income taxes | 84 | (6,959 | ) | (7,080 | ) | (37,015 | ) | ||||||||
Net income from continuing operations | 10,612 | 8,593 | 12,986 | 12,059 | |||||||||||
Provision for income taxes | 4,059 | 3,188 | 4,967 | 4,519 | |||||||||||
Net income from continuing operations before income taxes | 14,671 | 11,781 | 17,953 | 16,578 | |||||||||||
Transaction costs | 128 | 678 | 276 | 837 | |||||||||||
Business realignment costs | — | — | 4 | — | |||||||||||
Impairment of long lived and intangible assets | 231 | — | 231 | — | |||||||||||
Net gain on sale and retirement of assets | (21 | ) | (388 | ) | (2 | ) | (398 | ) | |||||||
Net income attributable to non-controlling interest, net of income taxes | (357 | ) | (218 | ) | (680 | ) | (374 | ) | |||||||
Adjusted net income before income taxes | 14,652 | 11,853 | 17,782 | 16,643 | |||||||||||
Provision for income taxes | 4,054 | 3,207 | 4,920 | 4,605 | |||||||||||
Adjusted Net Income | $ | 10,598 | $ | 8,646 | $ | 12,862 | $ | 12,038 | |||||||
Adjusted Net Income Per Share | |||||||||||||||
Diluted | $ | 0.37 | $ | 0.30 | $ | 0.43 | $ | 0.42 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Diluted | 27,490 | 27,611 | 27,473 | 27,541 | |||||||||||
12
The following table reconciles on a GAAP basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA and Adjusted EBITDA Less Interest, Capex and Taxes for the three and six months ended June 30, 2019, and 2018, respectively (dollars in thousands):
Actual | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income from continuing operations | $ | 10,612 | $ | 8,593 | $ | 12,986 | $ | 12,059 | |||||||
Net income (loss) from discontinued operations, net of income taxes | 84 | (6,959 | ) | (7,080 | ) | (37,015 | ) | ||||||||
Net income (loss) | 10,696 | 1,634 | 5,906 | (24,956 | ) | ||||||||||
Provision for income taxes | 4,059 | 3,188 | 4,967 | 4,519 | |||||||||||
Interest expense, net | 8,526 | 8,533 | 17,121 | 16,960 | |||||||||||
Depreciation and amortization | 5,897 | 4,409 | 12,405 | 8,792 | |||||||||||
Stock-based compensation | 660 | 246 | 1,536 | 436 | |||||||||||
Transaction costs | 128 | 678 | 276 | 837 | |||||||||||
Business realignment costs | — | — | 4 | — | |||||||||||
Impairment of long lived and intangible assets | 231 | — | 231 | — | |||||||||||
Net (income) loss from discontinued operations, net of income taxes | (84 | ) | 6,959 | 7,080 | 37,015 | ||||||||||
Other (a) | 15 | (340 | ) | 68 | (318 | ) | |||||||||
Adjusted EBITDA | $ | 30,128 | $ | 25,307 | $ | 49,594 | $ | 43,285 | |||||||
Net cash paid for interest | (13,039 | ) | (12,742 | ) | (16,928 | ) | (17,176 | ) | |||||||
Capital expenditures | (3,895 | ) | (4,336 | ) | (8,928 | ) | (8,756 | ) | |||||||
Cash paid for taxes | (502 | ) | (1,417 | ) | (570 | ) | (1,449 | ) | |||||||
Adjusted EBITDA Less Interest, Capex and Taxes | $ | 12,692 | $ | 6,812 | $ | 23,168 | $ | 15,904 | |||||||
(a) Other includes net loss (gain) on sale and retirement of assets, (gain) loss on foreign exchange and other (income) expense, net.
13
The following table reconciles on a pro forma basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to pro forma Adjusted EBITDA and pro forma Adjusted EBITDA Less Interest, Capex and Taxes for the three and six months ended June 30, 2019, and 2018, respectively (dollars in thousands):
Pro forma | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income from continuing operations | $ | 10,612 | $ | 8,593 | $ | 12,986 | $ | 12,059 | |||||||
Net income (loss) from discontinued operations, net of income taxes | 84 | (6,959 | ) | (7,080 | ) | (37,015 | ) | ||||||||
Net income (loss) | 10,696 | 1,634 | 5,906 | (24,956 | ) | ||||||||||
Net income from acquisition | — | 747 | — | 1,018 | |||||||||||
Pro forma net income (loss) | 10,696 | 2,381 | 5,906 | (23,938 | ) | ||||||||||
Provision for income taxes | 4,059 | 3,188 | 4,967 | 4,519 | |||||||||||
Interest expense, net | 8,526 | 8,533 | 17,121 | 16,960 | |||||||||||
Depreciation and amortization | 5,897 | 4,409 | 12,405 | 8,792 | |||||||||||
Stock-based compensation | 660 | 246 | 1,536 | 436 | |||||||||||
Transaction costs | 128 | 678 | 276 | 837 | |||||||||||
Business realignment costs | — | — | 4 | — | |||||||||||
Impairment of long lived and intangible assets | 231 | — | 231 | — | |||||||||||
Net (income) loss from discontinued operations, net of income taxes | (84 | ) | 6,959 | 7,080 | 37,015 | ||||||||||
Other (a) | 15 | (340 | ) | 68 | (318 | ) | |||||||||
Pro forma Adjusted EBITDA | $ | 30,128 | $ | 26,054 | $ | 49,594 | $ | 44,303 | |||||||
Net cash paid for interest | (13,039 | ) | (12,742 | ) | (16,928 | ) | (17,176 | ) | |||||||
Capital expenditures | (3,895 | ) | (4,350 | ) | (8,928 | ) | (8,786 | ) | |||||||
Cash paid for taxes | (502 | ) | (1,417 | ) | (570 | ) | (1,449 | ) | |||||||
Pro forma Adjusted EBITDA Less Interest, Capex and Taxes | $ | 12,692 | $ | 7,545 | $ | 23,168 | $ | 16,892 | |||||||
(a) Other includes net loss (gain) on sale and retirement of assets, (gain) loss on foreign exchange and other (income) expense, net.
14
The following table reconciles net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA on a quarterly basis for the twelve months ended June 30, 2019 (dollars in thousands):
Actual | Twelve Months Ended | ||||||||||||||||||
September 30, 2018 | December 31, 2018 | March 31, 2019 | June 30, 2019 | June 30, 2019 | |||||||||||||||
Net income (loss) | $ | 9,691 | $ | (16,309 | ) | $ | (4,790 | ) | $ | 10,696 | $ | (712 | ) | ||||||
Provision (benefit) for income taxes | 3,699 | (6,928 | ) | 908 | 4,059 | 1,738 | |||||||||||||
Interest expense, net | 8,640 | 8,667 | 8,595 | 8,526 | 34,428 | ||||||||||||||
Repurchase of debt | — | (140 | ) | — | — | (140 | ) | ||||||||||||
Depreciation and amortization | 4,644 | 4,672 | 6,508 | 5,897 | 21,721 | ||||||||||||||
Stock-based compensation | 597 | 600 | 876 | 660 | 2,733 | ||||||||||||||
Transaction costs | 167 | 462 | 148 | 128 | 905 | ||||||||||||||
Business realignment costs | — | 2,128 | 4 | — | 2,132 | ||||||||||||||
Impairment of goodwill and intangible assets | — | 19,888 | — | — | 19,888 | ||||||||||||||
Impairment loss on investment | — | 5,007 | — | — | 5,007 | ||||||||||||||
Impairment of long lived and intangible assets | — | — | — | 231 | 231 | ||||||||||||||
Net (income) loss from discontinued operations, net of income taxes | (501 | ) | 6,683 | 7,164 | (84 | ) | 13,262 | ||||||||||||
Other (a) | 38 | 32 | 53 | 15 | 138 | ||||||||||||||
Adjusted EBITDA | $ | 26,975 | $ | 24,762 | $ | 19,466 | $ | 30,128 | $ | 101,331 | |||||||||
15
The following tables reconcile Operating Income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Operating Income by segment (in thousands):
Three Months Ended June 30, 2019 | |||||||||||||||||||||||||||
Operating Income | Depreciation and amortization | Stock-based compensation | Corporate expenses | Transaction costs | Business realignment costs | Impairment of long lived and intangible assets | Net gain on sale and retirement of assets | Adjusted Operating Income | |||||||||||||||||||
Advertising | $ | 27,431 | $ | 3,159 | 41 | $ | — | $ | — | $ | — | $ | 231 | $ | — | $ | 30,862 | ||||||||||
Townsquare Interactive | 4,866 | 125 | 23 | — | — | — | — | — | 5,014 | ||||||||||||||||||
Live Events | 1,487 | 133 | 2 | — | — | — | — | — | 1,622 | ||||||||||||||||||
Corporate and Other Reconciling Items | (10,551 | ) | 2,480 | 594 | 7,370 | 128 | — | — | (21 | ) | — | ||||||||||||||||
Consolidated | $ | 23,233 | $ | 5,897 | $ | 660 | $ | 7,370 | $ | 128 | $ | — | $ | 231 | $ | (21 | ) | $ | 37,498 | ||||||||
Three Months Ended June 30, 2018 | |||||||||||||||||||||||||||
Operating Income | Depreciation and amortization | Stock-based compensation | Corporate expenses | Transaction costs | Business realignment costs | Impairment of long lived and intangible assets | Net gain on sale and retirement of assets | Adjusted Operating Income | |||||||||||||||||||
Advertising | $ | 24,981 | $ | 2,704 | $ | 39 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 27,724 | |||||||||
Townsquare Interactive | 3,299 | 109 | 8 | — | — | — | — | — | 3,416 | ||||||||||||||||||
Live Events | 1,315 | 135 | 7 | — | — | — | — | — | 1,457 | ||||||||||||||||||
Corporate and Other Reconciling Items | (9,233 | ) | 1,461 | 192 | 7,290 | 678 | — | — | (388 | ) | — | ||||||||||||||||
Consolidated | $ | 20,362 | $ | 4,409 | $ | 246 | $ | 7,290 | $ | 678 | $ | — | $ | — | $ | (388 | ) | $ | 32,597 | ||||||||
Six Months Ended June 30, 2019 | |||||||||||||||||||||||||||
Operating Income | Depreciation and amortization | Stock-based compensation | Corporate expenses | Transaction costs | Business realignment costs | Impairment of long lived and intangible assets | Net gain on sale and retirement of assets | Adjusted Operating Income | |||||||||||||||||||
Advertising | $ | 43,670 | $ | 6,257 | 133 | $ | — | $ | — | $ | — | $ | 231 | $ | — | $ | 50,291 | ||||||||||
Townsquare Interactive | 9,089 | 246 | 59 | — | — | — | — | — | 9,394 | ||||||||||||||||||
Live Events | 2,563 | 278 | 25 | — | — | — | — | — | 2,866 | ||||||||||||||||||
Corporate and Other Reconciling Items | (20,178 | ) | 5,624 | 1,319 | 12,957 | 276 | 4 | — | (2 | ) | — | ||||||||||||||||
Consolidated | $ | 35,144 | $ | 12,405 | $ | 1,536 | $ | 12,957 | $ | 276 | $ | 4 | $ | 231 | $ | (2 | ) | $ | 62,551 | ||||||||
Six Months Ended June 30, 2018 | |||||||||||||||||||||||||||
Operating Income | Depreciation and amortization | Stock-based compensation | Corporate expenses | Transaction costs | Business realignment costs | Impairment of long lived and intangible assets | Net gain on sale and retirement of assets | Adjusted Operating Income | |||||||||||||||||||
Advertising | $ | 41,174 | $ | 5,374 | $ | 67 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 46,615 | |||||||||
Townsquare Interactive | 6,428 | 224 | 15 | — | — | — | — | — | 6,667 | ||||||||||||||||||
Live Events | 2,662 | 271 | 9 | — | — | — | — | — | 2,942 | ||||||||||||||||||
Corporate and Other Reconciling Items | (16,646 | ) | 2,923 | 345 | 12,939 | 837 | — | — | (398 | ) | — | ||||||||||||||||
Consolidated | $ | 33,618 | $ | 8,792 | $ | 436 | $ | 12,939 | $ | 837 | $ | — | $ | — | $ | (398 | ) | $ | 56,224 | ||||||||
16