0000783005-17-000020.txt : 20170511 0000783005-17-000020.hdr.sgml : 20170511 20170510173514 ACCESSION NUMBER: 0000783005-17-000020 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20170511 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20170511 DATE AS OF CHANGE: 20170510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000783005 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351542018 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23264 FILM NUMBER: 17831704 BUSINESS ADDRESS: STREET 1: ONE EMMIS PLAZA STREET 2: 40 MONUMENT CIRCLE SUITE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3172660100 MAIL ADDRESS: STREET 1: ONE EMMIS PLAZA STREET 2: 40 MONUMENT CIRCLE #700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 FORMER COMPANY: FORMER CONFORMED NAME: EMMIS BROADCASTING CORPORATION DATE OF NAME CHANGE: 19920703 8-K 1 emms8k05112017.htm 8-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): May 11, 2017

EMMIS COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its
charter)

INDIANA
(State of incorporation or organization)

0-23264
(Commission file number)

35‑1542018
(I.R.S. Employer
Identification No.)

ONE EMMIS PLAZA
40 MONUMENT CIRCLE
SUITE 700
INDIANAPOLIS, INDIANA 46204
(Address of principal executive offices)

(317) 266-0100
(Registrant’s Telephone Number,
Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02
Results of Operations and Financial Condition
On May 11, 2017, Emmis Communications Corporation (the “Company”) issued a press release discussing its results of operations and financial condition as of and for the fiscal year ended February 28, 2017.

A copy of the press release is attached as Exhibit 99.1 and incorporated in this item by reference. The information in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed to be incorporated by reference in any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.


Note to this Form 8-K: Certain statements included in this report which are not statements of historical fact, including but not limited to those identified with the words “expect,” “will” or “look” are intended to be, and are, by this Note, identified as “forward-looking statements,” as defined in the Securities and Exchange Act of 1934, as amended. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others:

•general economic and business conditions;
•fluctuations in the demand for advertising and demand for different types of advertising media;
•our ability to service our outstanding debt;
•competition from new or different media and technologies;
•loss of key personnel;
•increased competition in our markets and the broadcasting industry, including our competitors changing the format of a station they operate
to more directly compete with a station we operate in the same market;
•our ability to attract and secure programming, on-air talent, writers and photographers;
•inability to obtain (or to obtain timely) necessary approvals for purchase or sale transactions or to complete the transactions for other reasons
generally beyond our control;
•increases in the costs of programming, including on-air talent;
•fluctuations in the market price of publicly traded or other securities;
•new or changing regulations of the Federal Communications Commission or other governmental agencies;
•enforcement of rules and regulations of governmental and other entities to which the Company is subject;
•changes in radio audience measurement methodologies;
•war, terrorist acts or political instability; and
•other factors mentioned in documents filed by the Company with the Securities and Exchange Commission.

Emmis does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.




Item 9.01
Financial Statements and Exhibits.
(c)     Exhibits.
Exhibit No.
Description
Press Release dated May 11, 2017

Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
 
 
 
EMMIS COMMUNICATIONS CORPORATION
Date: May 11, 2017
 
 
 
 
 
By:
/s/ J. Scott Enright
 
 
 
  J. Scott Enright, Executive Vice President,
 
 
 
  General Counsel and Secretary



 EX-99.1 2 ex99105112017.htm EXHIBIT 99.1 Exhibit


For Immediate Release
Thursday, May 11, 2017
Contact: Ryan Hornaday, EVP/CFO & Treasurer
rhornaday@emmis.com
317.266.0100

Emmis Announces Fourth Quarter and Full-Year Earnings

Indianapolis... Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its fourth fiscal quarter and full-year ending February 28, 2017. After the end of the quarter, on May 8, 2017, Emmis entered into an agreement to sell KPWR-FM in Los Angeles to an affiliate of the Mereulo Group for $82.75 million. This transaction is expected to close later this year and proceeds will be used to repay more than 50% of the Company’s credit facility debt outstanding.

Emmis’ radio net revenues for the fourth fiscal quarter were $34.0 million, down from $36.4 million from the prior year, a decrease of 6.6%. Per Miller Kaplan reporting, which excludes barter revenues and syndication revenues, and excluding results from Los Angeles, Emmis’ fourth quarter radio revenues were down 4.8% in markets that were down 0.2%. Austin and St. Louis outperformed their markets, with St. Louis up 10% in a market that was up 1%.

For the full year, radio revenues were $165.1 million, compared to $169.2 million in the prior year, a decrease of 2.4%. For the full year, Emmis radio revenues per Miller Kaplan reporting, excluding results from Los Angeles, were down 0.3%, narrowly missing the performance of its markets, which were up 0.5%.

During the fourth quarter, Emmis closed on the sale of its Terre Haute radio cluster on January 30, 2017 and closed on the sale of Los Angeles, Atlanta, Cincinnati, and Orange Coast magazines on February 28, 2017. Emmis’ sole remaining magazine is Indianapolis Monthly.

“The decision to sell KPWR was an extremely difficult one to make, but it allows us to dramatically reduce our indebtedness, leading to much needed financial flexibility during challenging times for the U.S. radio business,” said Jeff Smulyan, CEO & Chairman of the Board of Emmis. “Our industry needs a catalyst, and we remain convinced we have it in NextRadio®. The NextRadio-developed Dial ReportTM, which provides robust data measurement and big data analytics for radio campaigns, has been a huge hit with advertisers and agencies since its introduction in January of this year.”

Smulyan added that the cash commitment to Sprint had been satisfied and the business relationship between NextRadio and Sprint was extended for an additional three years.
 
A conference call regarding earnings will be hosted today at 9 a.m. Eastern today by dialing 1-517-623-4891.  Questions may be submitted via email to ir@emmis.com. A digital playback of the call will be available until Thursday, May 25 by dialing 1-402-998-1514.

Emmis has included supplemental pro forma net revenues, station operating expenses, and certain other financial data on its website, www.emmis.com under the “Investors” tab.

Emmis generally evaluates the performance of its operating entities based on station operating income. Management believes that station operating income is useful to investors because it provides a meaningful comparison of operating performance between companies in the industry and serves as an indicator of the market value of a group of stations or publishing entities. Station operating income is generally recognized by the broadcast and publishing industries as a measure of performance and is used by analysts who report on the performance of broadcasting and publishing groups. Station operating income does not take into account Emmis' debt service requirements and other commitments, and, accordingly, station operating income is not necessarily indicative of amounts that may be available for dividends, reinvestment in Emmis' business or other discretionary uses.





Station operating income is not a measure of liquidity or of performance, in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on the basis of accounting principles generally accepted in the United States. Operating Income is the most directly comparable financial measure in accordance with accounting principles generally accepted in the United States.

Moreover, station operating income is not a standardized measure and may be calculated in a number of ways. Emmis defines station operating income as revenues net of agency commissions and station operating expenses, excluding depreciation, amortization and non-cash compensation. A reconciliation of station operating income to operating income is attached to this press release.

The information in this news release is being widely disseminated in accordance with the Securities & Exchange Commission's Regulation FD.

Emmis Communications - Great Media, Great People, Great Service®
Emmis Communications Corporation is a diversified media company, principally focused on radio broadcasting. Emmis owns 16 FM and 3 AM radio stations in New York, Los Angeles, St. Louis, Austin (Emmis has a 50.1% controlling interest in Emmis’ radio stations located there) and Indianapolis. Emmis also developed and licenses TagStation®, a cloud-based software platform that allows a broadcaster to manage album art, metadata and enhanced advertising on its various broadcasts, and developed NextRadio®, a smartphone application that marries over-the-air FM radio broadcasts with visual and interactive features on smartphones.

Note: Certain statements included in this press release which are not statements of historical fact, including but not limited to those identified with the words “expect,” “will” or “look” are intended to be, and are, by this Note, identified as “forward-looking statements,” as defined in the Securities and Exchange Act of 1934, as amended. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others:
•general economic and business conditions;
•fluctuations in the demand for advertising and demand for different types of advertising media;
•our ability to service our outstanding debt;
•competition from new or different technologies;
•
increased competition in our markets and the broadcasting industry including our competitors changing the format of a station they operate to more directly compete with a station we operate in the same market;
•our ability to attract and secure programming, on-air talent, writers and photographers;
•inability to obtain (or to obtain timely) necessary approvals for purchase or sale transactions or to complete the transactions for other reasons
generally beyond our control;
•increases in the costs of programming, including on-air talent;
•inability to grow through suitable acquisitions or to consummate dispositions;
•changes in audience measurement systems
• new or changing regulations of the Federal Communications Commission or other governmental agencies;
• war, terrorist acts or political instability; and
• other factors mentioned in documents filed by the Company with the Securities and Exchange Commission.

Emmis does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise







EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited, amounts in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
February 28 (29),
 
Year ended
February 28 (29),
 
 
 
 
 
 
 
2017
2016
 
2017
2016
OPERATING DATA:
 
 
 
 
 
  Net revenues:
 
 
 
 
 
    Radio
$
34,015

$
36,439

 
$
165,148

$
169,228

    Publishing
9,215

14,217

 
48,559

60,992

    Emerging Technologies
263

228

 
861

1,213

      Total net revenues
43,493

50,884

 
214,568

231,433

Station operating expenses excluding depreciation and amortization expense:
 
 
 
 
 
    Radio
27,451

28,937

 
115,366

116,862

    Publishing
10,798

15,334

 
51,063

58,891

    Emerging Technologies
6,430

2,192

 
13,656

7,641

Total station operating expenses excluding depreciation and amortization expense
44,679

46,463

 
180,085

183,394

Corporate expenses excluding depreciation and amortization expense
2,465

2,907

 
11,359

13,023

  Depreciation and amortization
1,060

1,412

 
4,806

5,797

  Impairment loss on intangible assets
6,855

9,499

 
9,843

9,499

Gain on sale of radio and publishing assets, net of disposition costs
(6,066
)
—

 
(23,557
)
—

  Loss on disposal of property and equipment
(1
)
56

 
124

56

  Operating (loss) income
(5,499
)
(9,453
)
 
31,908

19,664

  Interest expense
(4,089
)
(4,697
)
 
(18,018
)
(18,956
)
  Loss on debt extinguishment
(142
)
—

 
(620
)
—

  Other (loss) income, net
(302
)
212

 
(160
)
1,057

  (Loss) income before income taxes
(10,032
)
(13,938
)
 
13,110

1,765

  (Benefit) provision for income taxes
(2,078
)
(593
)
 
(110
)
2,069

  Consolidated net (loss) income
(7,954
)
(13,345
)
 
13,220

(304
)
Net (loss) income attributable to noncontrolling interests
(376
)
(3,992
)
 
101

(2,418
)
  Net (loss) income attributable to the Company
(7,578
)
(9,353
)
 
13,119

2,114

  Loss on modification of Preferred Stock
—

(162
)
 
—

(162
)
Net (loss) income attributable to common shareholders
$
(7,578
)
$
(9,515
)
 
$
13,119

$
1,952

 
 
 
 
 
 
     Basic net income per common share
$
(0.62
)
$
(0.85
)
 
$
1.09

$
0.18

     Diluted net income per common share
$
(0.62
)
$
(0.85
)
 
$
1.07

$
0.17

 
 
 
 
 
 
     Basic weighted average shares outstanding
12,180

11,257

 
12,040

11,034

     Diluted weighted average shares outstanding
12,180

11,257

 
12,229

11,316





 
Three months ended
February 28 (29),
 
Year ended
February 28 (29),
 
 
 
 
 
 
 
2017
2016
 
2017
2016
OTHER DATA:
 
 
 
 
 
  Station operating (loss) income (See below)
$
(929
)
$
4,571

 
$
35,495

$
49,799

  Cash paid for income taxes, net
—

—

 
112

216

  Cash paid for interest
3,536

4,175

 
15,618

16,742

  Capital expenditures
1,447

1,445

 
2,850

3,388

 
 
 
 
 
 
 Noncash compensation by segment:
 
 
 
 
 
           Radio
$
138

$
94

 
$
671

$
1,219

           Publishing
97

62

 
263

447

           Emerging Technologies
22

(6
)
 
78

94

           Corporate
446

85

 
1,908

3,144

                  Total
$
703

$
235

 
$
2,920

$
4,904

 
 
 
 
 
 
COMPUTATION OF STATION OPERATING INCOME:
 
 
 
 
 
  Operating (loss) income
$
(5,499
)
$
(9,453
)
 
$
31,908

$
19,664

  Plus: Depreciation and amortization
1,060

1,412

 
4,806

5,797

  Plus: Corporate expenses
2,465

2,907

 
11,359

13,023

  Plus: Station noncash compensation
257

150

 
1,012

1,760

  Plus: Impairment loss on intangible assets
6,855

9,499

 
9,843

9,499

Less: Gain on sale of publishing assets, net of disposition costs
(6,066
)
—

 
(23,557
)
—

Plus: Loss on disposal of property and equipment
(1
)
56

 
124

56

  Station operating (loss) income
$
(929
)
$
4,571

 
$
35,495

$
49,799

 
 
 
 
 
 
SELECTED BALANCE SHEET INFORMATION:
February 28, 2017
February 29, 2016
 
 
 
Total Cash and Cash Equivalents
$
11,349

$
4,456

 
 
 
Credit Agreement Debt
$
152,245

$
184,762

 
 
 
98.7FM Nonrecourse Debt
$
59,958

$
65,411