Exhibit 99.1
Entercom Communications Corp.
Reports Record First Quarter 2004 Results
Net Income Per Share Increases 28%
(Bala Cynwyd, Pa. April 27, 2004) Entercom Communications Corp. (NYSE: ETM) today reported record financial results for the quarter ended March 31, 2004. Net income per share increased 28% to $0.23 per share from $0.18 per share in the prior year.
For the first quarter as compared to the prior year:
• Net revenues increased 7% to $87.0 million.
• Same station net revenues increased 6% to $87.0 million.
• Same station operating expenses increased 3% to $54.5 million.
• Same station operating income increased 10% to $32.5 million.
• Free cash flow increased 40% to $21.5 million.
• Net income per share increased 28% to $0.23.
The Company’s net revenues, station operating income, net income per share and free cash flow represent record highs for first quarter results.
David J. Field, President and Chief Executive Officer stated, “We are very pleased with our record-breaking results as we delivered strong growth in net revenues and station operating income, and grew our net income per share and free cash flow by 28% and 40%, respectively. In addition, our future prospects continue to improve, driven by a number of recent positive developments, including our newly announced acquisitions in Indianapolis, Providence and Buffalo, encouraging progress with our sales and brand initiatives, and improving business conditions.”
During the first quarter the Company announced two acquisitions: WNSA-FM in Buffalo, which will expand the Company’s market-leading Buffalo cluster and WWRX-FM in Providence, RI, which the Company began operating on April 16th with a sports talk format utilizing selected programming of WEEI-AM in Boston, one of the nation’s leading sports talk stations. Entercom has filed with the FCC for a change in call letters from WWRX-FM to WEEI-FM. Both of these transactions, which are subject to appropriate approvals, are expected to close late in the second quarter.
On April 22, 2004, Entercom announced the signing of a definitive agreement to purchase the assets of three radio stations, WZPL-FM, WTPI-FM and WXNT-AM, in Indianapolis for $73.5 million from Indianapolis-based MyStar Communications Corporation. Indianapolis is the nation’s 31st largest market ranked by radio revenues and the 41st largest by Arbitron population size. Entercom expects to commence operations of these stations under a time brokerage agreement in June. The transaction is subject to regulatory approvals and final closing is expected in the third quarter.
As of March 31, 2004, the Company had $28 million in cash and cash equivalents. The Company had outstanding $228 million of Senior Debt and $150 million of Senior Subordinated Notes due in 2014.
Second Quarter Guidance
For the second quarter of 2004, based on the current business outlook, the Company expects to report an increase in same station net revenues of 6% to approximately $114 million and an increase
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in same station operating expenses of 5% to approximately $62.5 million. This guidance would result in second quarter net income per share of $0.44 - $0.45 vs. $0.37 in the prior year. The second quarter’s expense growth rate is higher than past quarters due to timing of certain projects and brand investments. The Company expects to report same station operating expense growth of 4% or less in the second half of the year.
For purposes of same station comparisons, last year’s same station second quarter net revenues were $107.6 million and station operating expenses were $59.3 million. Prior year same station results are available on the Company’s website.
Earnings Conference Call and Company Information
Entercom will hold a conference call regarding the quarterly earnings release on April 27, 2004 at 10:00 AM Eastern Time. The public may access the conference call by dialing 888-323-2711. A replay of the conference call will be available through May 3, 2004 by dialing 800-947-6436. A webcast of the conference call will be available beginning 48 hours after the call on the Company’s website for a period of one week. The Company’s website is located at www.entercom.com.
The Company is the nation’s fourth largest radio broadcaster, operating in Boston, Seattle, Denver, Portland, Sacramento, Kansas City, Milwaukee, New Orleans, Norfolk, Buffalo, Memphis, Providence, Greensboro, Greenville/Spartanburg, Rochester, Madison, Wichita, Wilkes Barre/Scranton, Gainesville-Ocala, and Longview/Kelso, WA.
Certain Definitions
All references to per share data, unless stated otherwise, are presented as per diluted share.
With the adoption of Regulation G by the SEC, Station Operating Income replaces Broadcast Cash Flow as the metric used by management to assess the performance of our stations. The Company calculates Station Operating Income in the same manner as Broadcast Cash Flow.
It is important to note that Station Operating Income, Same Station Net Revenues, Same Station Operating Expenses, Same Station Operating Income and Free Cash Flow are not measures of performance or liquidity calculated in accordance with generally accepted accounting principles (“GAAP”). Management believes that these measures are useful as a way to evaluate the Company and the means for management to evaluate our radio stations’ performance and operations. Management believes that these measures are useful to an investor in evaluating our performance because they are widely used in the broadcast industry to measure a radio company’s operating performance. You should not consider these non-GAAP measures in isolation or as substitutes for net income, operating income, or any other measure for determining our operating performance that is calculated in accordance with generally accepted accounting principles. These non-GAAP measures are not necessarily comparable to similarly titled measures employed by other companies.
Station Operating Income consists of operating income before depreciation and amortization, time brokerage agreement fees, corporate general and administrative expenses and gain or loss on sale of assets.
Free Cash Flow consists of operating income (i) plus depreciation and amortization, non-cash compensation expense (which is otherwise included in corporate general and administrative expenses) and (ii) less net interest expense (excluding amortization of deferred financing costs), gains (loss) on sale of assets, taxes paid (refunded) and capital expenditures.
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Same Station operating data is computed by comparing the performance of stations operated by the Company throughout the relevant period to the comparable performance in the prior year’s corresponding period. The Company includes in the Same Station operating data the effects of changes in status of significant contracts that: (i) relate to operations; (ii) have a significant effect on the net revenues and or station operating expenses of a particular market; and (iii) are accounted for as a separate business unit.
Note Regarding Forward-Looking Statements
The information in this news release is being widely disseminated in accordance with the Securities and Exchange Commission’s Regulation FD.
This news announcement contains certain forward-looking statements that are based upon current expectations and certain unaudited pro forma information that is presented for illustrative purposes only and involves certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Additional information and key risks are described in the Company’s filings on Forms 8-K, 10-Q and 10-K with the Securities and Exchange Commission. Readers should note that these statements might be impacted by several factors including changes in the economic and regulatory climate and the business of radio broadcasting, in general. The unaudited pro forma information and same station operating data reflects adjustments and is presented for comparative purposes only and does not purport to be indicative of what has occurred or indicative of future operating results or financial position. Accordingly, the Company’s actual performance may differ materially from those stated or implied herein. The Company assumes no obligation to publicly update or revise any unaudited pro forma or forward-looking statements.
Contact:
Steve Fisher
Executive Vice President and Chief Financial Officer
610-660-5647
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Entercom First Quarter 2004
Earnings Release
| | Three Months Ended March 31, | |
| | 2004 | | 2003 | |
CONDENSED STATEMENTS OF OPERATIONS | | | | | |
| | | | | |
Net Revenues | | $ | 87,038 | | $ | 80,995 | |
| | | | | |
Station Operating Expenses | | 54,523 | | 51,380 | |
Corporate General and Administrative Expenses, Including Non-Cash Compensation Expense of $145 and $93 for the Three Months Ended March 31, 2004 and 2003, respectively | | 3,708 | | 3,537 | |
Depreciation and Amortization | | 4,002 | | 3,457 | |
Time Brokerage Agreement Fees | | — | | 602 | |
Net Loss on Sale of Assets | | 31 | | 76 | |
| | | | | |
Operating Income | | 24,774 | | 21,943 | |
| | | | | |
Other Expense (Income) Items: | | | | | |
Interest Expense, Including Amortization of Deferred Financing Costs of $244 and $320 for the Three Months Ended March 31, 2004 and 2003, respectively | | 4,818 | | 5,337 | |
Financing Cost of Convertible Preferred Securities | | — | | 1,953 | |
Interest Income | | (66 | ) | (290 | ) |
Net Loss (Gain) on Derivative Instruments | | 330 | | (65 | ) |
Total Other Expense | | 5,082 | | 6,935 | |
| | | | | |
Income Before Income Taxes | | 19,692 | | 15,008 | |
Income Taxes | | 7,728 | | 5,684 | |
Net Income | | $ | 11,964 | | $ | 9,324 | |
Net Income Per Share - Basic | | $ | 0.23 | | $ | 0.19 | |
Net Income Per Share - Diluted | | $ | 0.23 | | $ | 0.18 | |
| | | | | |
Weighted Common Shares Outstanding - Basic | | 51,489 | | 49,870 | |
Weighted Common Shares Outstanding - Diluted | | 52,082 | | 50,478 | |
| | | | | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | | | | | |
Capital Expenditures | | $ | 1,726 | | $ | 3,465 | |
Income Taxes Paid | | $ | 1,185 | | $ | 10 | |
SELECTED BALANCE SHEET DATA
| | March 31, | |
| | 2004 | | 2003 | |
Cash and Cash Equivalents | | $ | 27,911 | | $ | 51,254 | |
Working Capital | | 21,118 | | 65,657 | |
Total Assets | | 1,581,367 | | 1,564,751 | |
Senior Debt | | 227,790 | | 272,493 | |
7.625% Senior Subordinated Notes | | 150,000 | | 150,000 | |
Total Shareholders’ Equity | | 1,045,681 | | 899,350 | |
| | | | | | | |
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OTHER FINANCIAL DATA
| | Three Months Ended
March 31, | |
| | 2004 | | 2003 | |
Same Station Computations: | | | | | |
Net Revenues - Reconciliation of Same Station Net Revenues to GAAP: | | | | | |
Net Revenues as Reported | | $ | 87,038 | | $ | 80,995 | |
Net Acquisitions and Divestitures of Radio Stations and Significant Contracts | | — | | 1,360 | |
Same Station Net Revenues | | $ | 87,038 | | $ | 82,355 | |
| | | | | |
Station Operating Expenses - Reconciliation of Same Station Operating Expenses to GAAP: | | | | | |
Station Operating Expenses as Reported | | $ | 54,523 | | $ | 51,380 | |
Net Acquisitions and Divestitures of Radio Stations and Significant Contracts | | — | | 1,376 | |
Same Station Operating Expenses | | $ | 54,523 | | $ | 52,756 | |
| | | | | |
Reconciliation of Station Operating Income and Same Station Operating Income to GAAP (Operating Income): | | | | | |
Operating Income as Reported | | $ | 24,774 | | $ | 21,943 | |
Corporate General and Administrative Expenses | | 3,708 | | 3,537 | |
Depreciation and Amortization | | 4,002 | | 3,457 | |
Time Brokerage Agreement Fees | | — | | 602 | |
Net Loss on Sale of Assets | | 31 | | 76 | |
Station Operating Income | | 32,515 | | 29,615 | |
Net Acquisitions and Divestitures of Radio Stations and Significant Contracts | | — | | (16 | ) |
Same Station Operating Income | | $ | 32,515 | | $ | 29,599 | |
| | | | | |
Reconciliation of Free Cash Flow to GAAP (Net Income): | | | | | |
Net Income as Reported | | $ | 11,964 | | $ | 9,324 | |
Depreciation and Amortization | | 4,002 | | 3,457 | |
Deferred Financing Costs Included in Interest Expense | | 244 | | 320 | |
Non-Cash Compensation Expense | | 145 | | 93 | |
Net Loss on Sale of Assets | | 31 | | 76 | |
Net Loss (Gain) on Derivative Instruments | | 330 | | (65 | ) |
Income Taxes | | 7,728 | | 5,684 | |
Capital Expenditures | | (1,726 | ) | (3,465 | ) |
Taxes Paid | | (1,185 | ) | (10 | ) |
Free Cash Flow | | $ | 21,533 | | $ | 15,414 | |
| | | | | |
Reconciliation of Free Cash Flow to GAAP (Operating Income): | | | | | |
Operating Income as Reported | | $ | 24,774 | | $ | 21,943 | |
Depreciation and Amortization | | 4,002 | | 3,457 | |
Non-Cash Compensation Expense | | 145 | | 93 | |
Interest Expense, Net of Interest Income and Deferred Financing Costs | | (4,508 | ) | (6,680 | ) |
Capital Expenditures | | (1,726 | ) | (3,465 | ) |
Net Loss on Sale of Assets | | 31 | | 76 | |
Taxes Paid | | (1,185 | ) | (10 | ) |
Free Cash Flow | | $ | 21,533 | | $ | 15,414 | |
| | | | | |
Prior Year’s Data For Second Quarter Reconciliation of Prior Year’s Same Station Net Revenues to GAAP (Net Revenues): | | | | | |
Net Revenues as Reported | | | | $ | 107,632 | |
Net Acquisitions and Divestitures of Radio Stations and Significant Contracts | | | | 15 | |
Same Station Net Revenues | | | | $ | 107,647 | |
| | | | | |
Reconciliation of Prior Year’s Same Station Operating Expenses to GAAP (Station Operating Expenses): | | | | | |
Station Operating Expenses as Reported | | | | $ | 59,748 | |
Net Acquisitions and Divestitures of Radio Stations and Significant Contracts | | | | (456 | ) |
Same Station Operating Expenses | | | | $ | 59,292 | |
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