Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May. 31, 2015 | Jul. 03, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 31, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | EMMS | |
Entity Registrant Name | EMMIS COMMUNICATIONS CORP | |
Entity Central Index Key | 783,005 | |
Current Fiscal Year End Date | --02-28 | |
Entity Filer Category | Accelerated Filer | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 39,762,765 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 4,569,464 | |
Class C Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
NET REVENUES | $ 58,453 | $ 59,724 |
OPERATING EXPENSES: | ||
Station operating expenses excluding LMA fees of $3,825 and $0, and depreciation and amortization expense of $727 and $859, respectively | 45,543 | 42,926 |
Corporate expenses excluding depreciation and amortization expense of $626 and $591, respectively | 3,819 | 4,890 |
LMA fee expense | 0 | 3,825 |
Hungary license litigation and related expenses | 0 | 92 |
Depreciation and amortization | 1,450 | 1,353 |
Gain on sale of assets | 0 | (3) |
Total operating expenses | 50,812 | 53,083 |
OPERATING INCOME | 7,641 | 6,641 |
OTHER EXPENSE: | ||
Interest expense | (4,546) | (1,600) |
Other income, net | 10 | 11 |
Total other expense | (4,536) | (1,589) |
(LOSS) INCOME BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS | 3,105 | 5,052 |
(BENEFIT) PROVISION FOR INCOME TAXES | 947 | 2,385 |
CONSOLIDATED NET INCOME | 2,158 | 2,667 |
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 633 | 1,711 |
NET INCOME ATTRIBUTABLE TO THE COMPANY | 1,525 | 956 |
Amounts attributable to common shareholders for diluted earnings per share: | ||
Continuing operations | $ 1,525 | $ 956 |
Basic net (loss) income per share attributable to common shareholders: | ||
Continuing operations | $ 0.04 | $ 0.02 |
Net income per share attributable to common shareholders | $ 0.04 | $ 0.02 |
Basic weighted average common shares outstanding | 43,217 | 42,093 |
Diluted net (loss) income per share attributable to common shareholders: | ||
Continuing operations | $ 0.03 | $ 0.02 |
Net income per share attributable to common shareholders | $ 0.03 | $ 0.02 |
Diluted weighted average common shares outstanding | 47,373 | 47,347 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Depreciation and amortization expense excluded from station operating expenses | $ 859 | $ 727 |
Depreciation and amortization expenses excluded from corporate expenses | $ 591 | $ 626 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
CONSOLIDATED NET INCOME | $ 2,158 | $ 2,667 |
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAXES: | ||
Change in value of derivative instrument and related income tax effects | 0 | 9 |
COMPREHENSIVE INCOME | 2,158 | 2,676 |
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 633 | 1,711 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 1,525 | $ 965 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | May. 31, 2015 | Feb. 28, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 3,270 | $ 3,669 |
Restricted cash | 2,286 | 2,740 |
Accounts receivable, net | 39,192 | 37,328 |
Prepaid expenses | 9,435 | 8,640 |
Other current assets | 2,947 | 3,514 |
Total current assets | 57,130 | 55,891 |
PROPERTY AND EQUIPMENT, NET | 34,144 | 34,794 |
INTANGIBLE ASSETS (Note 3): | ||
Indefinite-lived intangibles | 210,057 | 210,057 |
Goodwill | 15,392 | 15,392 |
Other intangibles, net | 7,799 | 8,178 |
Total intangible assets | 233,248 | 233,627 |
OTHER ASSETS, NET | 10,492 | 10,420 |
Total assets | 335,014 | 334,732 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 8,248 | 9,497 |
Less: Current maturities | 10,192 | 6,840 |
Accrued salaries and commissions | 6,231 | 8,241 |
Deferred revenue | 12,739 | 11,568 |
Other current liabilities | 5,790 | 6,620 |
Total current liabilities | 43,200 | 42,766 |
LONG-TERM DEBT, NET OF CURRENT MATURITIES (NOTE 4) | 251,482 | 254,150 |
OTHER NONCURRENT LIABILITIES | 8,330 | 8,351 |
DEFERRED INCOME TAXES | 42,455 | 41,614 |
Total liabilities | $ 345,467 | $ 346,881 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY: | ||
Additional paid-in capital | $ 586,526 | $ 585,358 |
Accumulated deficit | (643,089) | (644,614) |
Total shareholders' deficit | (56,111) | (58,810) |
NONCONTROLLING INTERESTS | 45,658 | 46,661 |
Total equity | (10,453) | (12,149) |
Total liabilities and equity | 335,014 | 334,732 |
Class A common stock, $.01 par value; authorized 170,000,000 shares; issued and outstanding 39,054,719 shares at February 28, 2015 and 39,674,793 shares at May 31, 2015 | ||
EQUITY: | ||
Common Stock | 397 | 391 |
Class B common stock, $.01 par value; authorized 30,000,000 shares; issued and outstanding 4,569,464 shares at February 28, 2015 and May 31, 2015 | ||
EQUITY: | ||
Common Stock | 46 | 46 |
Series A preferred stock | ||
EQUITY: | ||
Series A non-cumulative convertible preferred stock, $.01 par value; $50.00 liquidation preference per share, aggregate liquidation preference and redemption amount of $46,450 at February 28, 2015 and May 31, 2015; authorized 2,875,000 shares; issued and outstanding 928,991 shares at February 28, 2015 and May 31, 2015 | $ 9 | $ 9 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | May. 31, 2015 | Feb. 28, 2015 |
Class A Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 170,000,000 | 170,000,000 |
Common stock, shares issued | 39,674,793 | 39,054,719 |
Common stock, shares outstanding | 39,674,793 | 39,054,719 |
Class B Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 4,569,464 | 4,569,464 |
Common stock, shares outstanding | 4,569,464 | 4,569,464 |
Series A preferred stock | ||
Series A non-cumulative convertible preferred stock, par value | $ 0.01 | $ 0.01 |
Series A non-cumulative convertible preferred stock, liquidation preference | $ 50 | $ 50 |
Series A non-cumulative convertible preferred stock, aggregate liquidation preference and redemption amount | $ 46,450 | $ 46,450 |
Series A non-cumulative convertible preferred stock, shares authorized | 2,875,000 | 2,875,000 |
Series A non-cumulative convertible preferred stock, shares issued | 928,991 | 928,991 |
Series A non-cumulative convertible preferred stock, shares outstanding | 928,991 | 928,991 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 3 months ended May. 31, 2015 - USD ($) $ in Thousands | Total | Class A Common Stock | Class B Common Stock | Series A preferred stock | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interests | |
Beginning Balance at Feb. 28, 2015 | $ (12,149) | $ 391 | $ 46 | $ 9 | $ 585,358 | $ (644,614) | $ 46,661 | |
Beginning Balance (In shares) at Feb. 28, 2015 | 39,054,719 | 4,569,464 | 928,991 | |||||
Net income | 2,158 | 1,525 | 633 | |||||
Issuance of Common Stock to employees and officers | 1,119 | $ 5 | 1,114 | |||||
Issuance of Common Stock to employees and officers (In shares) | 542,574 | |||||||
Exercise of stock options | $ 55 | $ 1 | 54 | |||||
Exercise of stock options (In shares) | 77,500 | [1] | 77,500 | |||||
Payments of dividends and distributions to noncontrolling interests | $ (1,636) | (1,636) | ||||||
Ending Balance at May. 31, 2015 | $ (10,453) | $ 397 | $ 46 | $ 9 | $ 586,526 | $ (643,089) | $ 45,658 | |
Ending Balance (In Shares) at May. 31, 2015 | 39,674,793 | 4,569,464 | 928,991 | |||||
[1] | Cash received from option exercises for the three months ended May 31, 2014 and 2015 was $0.2 million and $0.1 million, respectively. The Company recorded an income tax benefit relating to the options exercised during the three months ended May 31, 2014 of $0.2 million. The Company did not record an income tax benefit relating to the options exercised during the three months ended May 31, 2015. |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Consolidated net income | $ 2,158 | $ 2,667 |
Adjustments to reconcile consolidated net income to net cash (used in) provided by operating activities - | ||
Depreciation and amortization | 1,450 | 1,353 |
Amortization of Financing Costs and Discounts | 395 | 191 |
Provision for bad debts | 60 | 262 |
(Benefit) provision for deferred income taxes | 841 | 2,344 |
Noncash compensation | 2,104 | 948 |
Gain on sale of assets | 0 | (3) |
Changes in assets and liabilities - | ||
Increase (Decrease) in Restricted Cash for Operating Activities | (454) | 676 |
Accounts receivable | (1,924) | (9,197) |
Prepaid expenses and other current assets | (228) | (1,453) |
Other assets | (202) | (324) |
Accounts payable and accrued liabilities | (3,259) | 2,996 |
Deferred revenue | 1,171 | 1,334 |
Income taxes | (97) | (207) |
Other liabilities | (1,420) | (1,089) |
Net cash (used in) provided by operating activities | 1,689 | (854) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (421) | (625) |
Payments for (Proceeds from) Other Investing Activities | 23 | (192) |
Net cash used in investing activities | (398) | (817) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on long-term debt | (1,656) | (6,085) |
Proceeds from long-term debt | 3,000 | 9,000 |
Debt-related costs | (1,134) | (843) |
Payments of dividends and distributions to noncontrolling interests | (1,636) | (1,649) |
Proceeds from the exercise of stock options | 54 | 237 |
Settlement of tax withholding obligations on stock issued to employees | (318) | (1,424) |
Net cash used in financing activities | (1,690) | (764) |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (399) | (2,435) |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 3,669 | 5,304 |
End of period | 3,270 | 2,869 |
SUPPLEMENTAL DISCLOSURES: | ||
Cash paid for interest | 4,321 | 1,370 |
Cash paid (refund from) income taxes, net | 216 | 278 |
Noncash financing transactions - | ||
Value of stock issued to employees under stock compensation program and to satisfy accrued incentives | 1,432 | 3,862 |
Noncash Accretion Of Debt Instruments | $ 186 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
May. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Preparation of Interim Financial Statements Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), the condensed consolidated interim financial statements included herein have been prepared, without audit, by Emmis Communications Corporation (“ECC”) and its subsidiaries (collectively, “our,” “us,” “we,” “Emmis” or the “Company”). As permitted under the applicable rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, Emmis believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report for Emmis filed on Form 10-K for the year ended February 28, 2015 . The Company’s results are subject to seasonal fluctuations. Therefore, results shown on an interim basis are not necessarily indicative of results for a full year. In the opinion of Emmis, the accompanying condensed consolidated interim financial statements contain all material adjustments (consisting only of normal recurring adjustments, except as otherwise noted) necessary to present fairly the consolidated financial position of Emmis at May 31, 2015 , and the results of its operations and cash flows for the three-month periods ended May 31, 2014 and 2015 . There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended February 28, 2015 that have had a material impact on our condensed consolidated financial statements and related notes. Basic and Diluted Net Income Per Common Share Basic net income per common share is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Potentially dilutive securities at May 31, 2014 and 2015 consisted of stock options, restricted stock awards and the 6.25% Series A convertible preferred stock (the “Preferred Stock”). The following table sets forth the calculation of basic and diluted net income per share: For the three months ended May 31, 2014 May 31, 2015 Net Income Shares Net Income Per Share Net Income Shares Net Income Per Share (amounts in 000’s, except per share data) Basic net income per common share: Net income available to common shareholders $ 956 42,093 $ 0.02 $ 1,525 43,217 $ 0.04 Impact of equity awards — 2,988 — — 1,890 — Impact of conversion of preferred stock into common stock — 2,266 — — 2,266 — Diluted net income per common share: Net income available to common shareholders $ 956 47,347 $ 0.02 $ 1,525 47,373 $ 0.03 Shares excluded from the calculation as the effect of their conversion into shares of our common stock would be antidilutive were as follows: For the three months ended May 31, 2014 2015 (shares in 000’s ) Equity awards 974 3,592 Antidilutive common share equivalents 974 3,592 Local Programming and Marketing Agreement Fees The Company from time to time enters into local programming and marketing agreements (“LMAs”) in connection with acquisitions or dispositions of radio stations, typically pending regulatory approval of transfer of the Federal Communications Commission ("FCC") licenses. Under the terms of these agreements, the acquiring company makes specified periodic payments to the holder of the FCC license in exchange for the right to program and sell advertising for a specified portion of the station’s inventory of broadcast time. The acquiring company records revenues and expenses associated with the portion of the station’s inventory of broadcast time it manages. Nevertheless, as the holder of the FCC license, the owner-operator retains control and responsibility for the operation of the station, including responsibility over all programming broadcast on the station. On February 11, 2014, the Company entered into an LMA in connection with its agreement to purchase WBLS-FM and WLIB-AM in New York City from YMF Media New York LLC and YMF Media New York License LLC (collectively, "YMF"). The LMA, which commenced on March 1, 2014, gave Emmis the right to program and sell advertising for the two New York stations. Emmis paid YMF $1.3 million per month and reimbursed YMF for certain monthly expenses through the first closing of the acquisition, which occurred on June 10, 2014. After the first closing, the LMA continued in effect until the second and final closing of the transaction, which occurred on February 13, 2015 at a reduced monthly fee of approximately $0.7 million . During the three-month period ended May 31, 2014, Emmis recorded $3.8 million of LMA fee expense. On April 26, 2012, Emmis entered into an LMA with a subsidiary of Disney Enterprises, Inc. for 98.7FM in New York (formerly WRKS-FM and now WEPN-FM, hereinafter referred to as “98.7FM”). The LMA for this station started on April 30, 2012 and will continue until August 31, 2024. Emmis retains ownership and control of the Station, including the related FCC license during the term of the LMA and is scheduled to receive an annual fee until the LMA’s termination. LMA fee revenue is recorded on a straight-line basis over the term of the LMA as a component of net revenues in our accompanying condensed consolidated statements of operations. The following table summarizes certain operating results of 98.7FM for all periods presented. Net revenues for 98.7FM are solely related to LMA fees. 98.7FM is a part of our radio segment. For the three months ended May 31, 2014 2015 (amounts in 000's) Net revenues $ 2,583 $ 2,583 Station operating expenses, excluding depreciation and amortization expense 224 257 Interest expense 828 780 Assets and liabilities of 98.7FM as of February 28, 2015 and May 31, 2015 were as follows: As of February 28, As of May 31, 2015 2015 (amounts in 000's) Current assets: Restricted cash $ 1,467 $ 1,264 Prepaid expenses 603 589 Total current assets 2,070 1,853 Noncurrent assets: Property and equipment, net — 269 Indefinite lived intangibles 51,063 51,063 Deferred debt issuance costs, net 2,495 2,428 Deposits and other 4,428 4,726 Total noncurrent assets 57,986 58,486 Total assets $ 60,056 $ 60,339 Current liabilities: Accounts payable and accrued expenses $ 22 $ 22 Current maturities of long-term debt 4,990 5,105 Deferred revenue 753 779 Other current liabilities 241 236 Total current liabilities 6,006 6,142 Noncurrent liabilities: Long-term debt, net of current portion 65,411 64,103 Other noncurrent liabilities 27 27 Total noncurrent liabilities 65,438 64,130 Total liabilities $ 71,444 $ 70,272 Restricted Cash The Company's restricted cash, included in current assets in the accompanying condensed consolidated balance sheets, totaled $2.7 million and $2.3 million as of February 28, 2015 and May 31, 2015 , respectively. The terms of our 98.7FM non-recourse notes and related agreements discussed in Note 4 restrict a portion of our cash on deposit for specific operating and financing purposes. Restricted cash related to the 98.7FM non-recourse notes and related agreements totaled $1.5 million and $1.3 million as of February 28, 2015 and May 31, 2015 , respectively. In connection with the Company's agreement with Sprint/United Management Company (“Sprint”), the Company collects cash from other participating companies in the radio industry and remits cash collected to Sprint. The entirety of cash collected but not yet remitted to Sprint classified as restricted cash as of February 28, 2015 and May 31, 2015 was $1.3 million and $1.0 million , respectively. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. In April 2015, the FASB voted to defer the effective date of this Accounting Standards Update for one year. This guidance will be effective for the Company in the first quarter of its fiscal year ending February 28, 2019. The Company is currently evaluating the method of adoption and impact, if any, the adoption of this guidance will have on its financial position and results of operations. In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this update is not expected to have an impact on the Company’s consolidated financial statements. On April 7, 2015, the FASB issued Accounting Standards Update 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. Entities that have historically presented debt issuance costs as an asset, related to a recognized debt liability, will be required to present those costs as a direct deduction from the carrying amount of that debt liability. This presentation will result in debt issuance costs being presented the same way debt discounts have historically been handled. The ASU does not change the recognition, measurement, or subsequent measurement guidance for debt issuance costs. This guidance is effective for the Company as of March 1, 2016 and may be adopted early. The Company expects this new guidance will reduce total assets and total long-term debt on its consolidated balance sheets by amounts classified as deferred debt issuance costs, but does not expect this update to have any other effect on its consolidated financial statements. |
Share Based Payments
Share Based Payments | 3 Months Ended |
May. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share Based Payments | Share Based Payments The amounts recorded as share based compensation expense consist of stock option and restricted stock grants, common stock issued to employees and directors in lieu of cash payments, and Preferred Stock contributed to the 2012 Retention Plan. Stock Option Awards The Company has granted options to purchase its common stock to employees and directors of the Company under various stock option plans at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding 10 years and are forfeited, except in certain circumstances, in the event the employee or director terminates his or her employment or relationship with the Company. Generally, these options either vest annually over 3 years ( one-third each year for 3 years ), or cliff vest at the end of 3 years . The Company issues new shares upon the exercise of stock options. The fair value of each option awarded is estimated on the date of grant using a Black-Scholes option-pricing model and expensed on a straight-line basis over the vesting period. Expected volatilities are based on historical volatility of the Company’s stock. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. The Company includes estimated forfeitures in its compensation cost and updates the estimated forfeiture rate through the final vesting date of awards. The risk-free interest rate for periods within the life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The following assumptions were used to calculate the fair value of the Company’s options on the date of grant during the three months ended May 31, 2014 and 2015 : Three Months Ended May 31, 2014 2015 Risk-Free Interest Rate: 1.2% - 1.3% 1.3% - 1.4% Expected Dividend Yield: 0% 0% Expected Life (Years): 4.3 4.3 Expected Volatility: 72.5% - 73.9% 63.6% - 64.6% The following table presents a summary of the Company’s stock options outstanding at May 31, 2015 , and stock option activity during the three months ended May 31, 2015 (“Price” reflects the weighted average exercise price per share; "Aggregate Intrinsic Value" dollars in thousands): Options Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, beginning of period 5,724,446 $ 1.76 Granted 1,452,500 2.07 Exercised (1) 77,500 0.70 Forfeited 35,000 2.67 Expired 69,463 12.81 Outstanding, end of period 6,994,983 1.72 7.1 $ 1,443 Exercisable, end of period 4,173,396 1.36 5.8 $ 1,376 (1) Cash received from option exercises for the three months ended May 31, 2014 and 2015 was $0.2 million and $0.1 million , respectively. The Company recorded an income tax benefit relating to the options exercised during the three months ended May 31, 2014 of $0.2 million . The Company did not record an income tax benefit relating to the options exercised during the three months ended May 31, 2015. The weighted average per share grant date fair value of options granted during the three months ended May 31, 2014 and 2015 , was $1.84 and $1.05 , respectively. A summary of the Company’s nonvested options at May 31, 2015 , and changes during the three months ended May 31, 2015 , is presented below: Options Weighted Average Grant Date Fair Value Nonvested, beginning of period 3,167,083 $ 1.08 Granted 1,452,500 1.05 Vested 1,762,996 0.70 Forfeited 35,000 1.50 Nonvested, end of period 2,821,587 1.30 There were 0.9 million shares available for future grants under the Company’s various equity plans at May 31, 2015 . The vesting dates of outstanding options at May 31, 2015 range from July 2015 to March 2018, and expiration dates range from March 2016 to March 2025. Restricted Stock Awards The Company grants restricted stock awards to directors annually, and periodically grants restricted stock to employees in connection with employment agreements. Awards to directors are granted on the date of our annual meeting of shareholders and vest on the earlier of (i) the completion of the director’s 3 -year term or (ii) the third anniversary of the date of grant. Restricted stock award grants are granted out of the Company’s 2012 Equity Compensation Plan. The Company may also award, out of the Company’s 2012 Equity Compensation Plan, stock to settle certain bonuses and other compensation that otherwise would be paid in cash. Any restrictions on these shares may be immediately lapsed on the grant date. The following table presents a summary of the Company’s restricted stock grants outstanding at May 31, 2015 , and restricted stock activity during the three months ended May 31, 2015 (“Price” reflects the weighted average share price at the date of grant): Awards Price Grants outstanding, beginning of period 677,634 $ 2.26 Granted 751,570 1.49 Vested (restriction lapsed) 674,070 1.41 Grants outstanding, end of period 755,134 2.25 The total grant date fair value of shares vested during the three months ended May 31, 2014 and 2015 , was $3.6 million and $1.0 million , respectively. Preferred Stock and the 2012 Retention Plan On April 2, 2012, the shareholders of the Company approved the 2012 Retention Plan and Trust Agreement (the “Trust” or the “2012 Retention Plan”) at a special meeting of shareholders. The Company contributed 400,000 shares of its Preferred Stock to the Trust in connection with the approval of the 2012 Retention Plan. Awards granted under the 2012 Retention Plan entitled the participants to receive a distribution two years from the date of shareholder approval of the plan, provided the participant was an employee upon inception of the plan and remained an employee through the vesting date. The Trustee of the plan was Jeffrey H. Smulyan, our Chairman of the Board, President and Chief Executive Officer. On March 5, 2014, the Board of Directors of the Company approved the exercise of the Company's repurchase option under the Voting and Transfer Restriction Agreement with the Trustee of the 2012 Retention Plan and Trust. Pursuant to the exercise of that option, the Company repurchased 400,000 shares of Preferred Stock from the trustee in exchange for 975,848 shares of the Company's Class A Common Stock. On April 2, 2014, 975,848 shares of Class A Common Stock were distributed to employees who met the vesting requirements of the plan. The Company recognized approximately $0.4 million of compensation expense related to the 2012 Retention Plan during the three months ended May 31, 2014 . Recognized Non-Cash Compensation Expense The following table summarizes stock-based compensation expense and related tax benefits recognized by the Company during the three months ended May 31, 2014 and 2015 : Three Months Ended May 31, 2014 2015 Station operating expenses $ 402 $ 724 Corporate expenses 546 1,380 Stock-based compensation expense included in operating expenses 948 2,104 Tax benefit 331 — Recognized stock-based compensation expense, net of tax $ 617 $ 2,104 As of May 31, 2015 , there was $3.2 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested share-based compensation arrangements. The cost is expected to be recognized over a weighted average period of approximately 2.0 years. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
May. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Valuation of Indefinite-lived Broadcasting Licenses In accordance with ASC Topic 350, Intangibles—Goodwill and Other, the Company’s Federal Communications Commission (“FCC”) licenses are considered indefinite-lived intangibles. These assets, which the Company determined were its only indefinite-lived intangibles, are not subject to amortization, but are tested for impairment at least annually as discussed below. The carrying amounts of the Company’s FCC licenses were $210.1 million as of February 28, 2015 and May 31, 2015 . Pursuant to Emmis’ accounting policy, stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA by another broadcaster. The Company generally performs its annual impairment test of indefinite-lived intangibles as of December 1 of each year. When indicators of impairment are present, the Company will perform an interim impairment test. During the quarter ended May 31, 2015 , no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. These impairment tests may result in impairment charges in future periods. Fair value of our FCC licenses is estimated to be the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. To determine the fair value of our FCC licenses, the Company uses an income valuation method when it performs its impairment tests. Under this method, the Company projects cash flows that would be generated by each of its units of accounting assuming the unit of accounting was commencing operations in its respective market at the beginning of the valuation period. This cash flow stream is discounted to arrive at a value for the FCC license. The Company assumes the competitive situation that exists in each market remains unchanged, with the exception that its unit of accounting commenced operations at the beginning of the valuation period. In doing so, the Company extracts the value of going concern and any other assets acquired, and strictly values the FCC license. Major assumptions involved in this analysis include market revenue, market revenue growth rates, unit of accounting audience share, unit of accounting revenue share and discount rate. Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control. When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by ASC Topic 350-30-35. In our case, radio stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA. Valuation of Goodwill ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. The Company conducts the two-step impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. During the quarter ended May 31, 2015 , no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. When assessing its goodwill for impairment, the Company uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units (radio stations grouped by market and magazines on an individual basis). Management determines enterprise value for each of its reporting units by multiplying the two-year average station operating income generated by each reporting unit (current year based on actual results and the next year based on budgeted results) by an estimated market multiple. The Company uses a blended station operating income trading multiple of publicly traded radio operators as a benchmark for the multiple it applies to its radio reporting units. There are no publicly traded publishing companies that are focused predominantly on city and regional magazines as is our publishing segment. Therefore, the market multiple used as a benchmark for our publishing reporting units has been based on recently completed transactions within the city and regional magazine industry or analyst reports that include valuations of magazine divisions within publicly traded media conglomerates. Management believes this methodology for valuing radio and publishing properties is a common approach and believes that the multiples used in the valuation are reasonable given our peer comparisons and recent market transactions. To corroborate the step-one reporting unit fair values determined using the market approach described above, management also uses an income approach, which is a discounted cash flow method to determine the fair value of the reporting unit. This enterprise valuation is compared to the carrying value of the reporting unit for the first step of the goodwill impairment test. If the reporting unit exhibits impairment, the Company proceeds to the second step of the goodwill impairment test. For its step-two testing, the enterprise value is allocated among the tangible assets, indefinite-lived intangible assets (FCC licenses valued using a direct-method valuation approach) and unrecognized intangible assets, such as customer lists, with the residual amount representing the implied fair value of the goodwill. To the extent the carrying amount of the goodwill exceeds the implied fair value of the goodwill, the difference is recorded as an impairment charge in the statement of operations. The following table summarizes the Company's goodwill by segment as of February 28, 2015 and May 31, 2015 . As of February 28, As of May 31, 2015 2015 Radio $ 4,603 $ 4,603 Publishing 8,036 8,036 Corporate & Emerging Technologies 2,753 2,753 Total Goodwill $ 15,392 $ 15,392 Definite-lived intangibles The Company’s definite-lived intangible assets consist of patents, customer lists, trademarks and a syndicated programming contract, all of which are amortized over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. The following table presents the weighted-average useful life, gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at February 28, 2015 and May 31, 2015 : As of February 28, 2015 As of May 31, 2015 (in 000's) Weighted Average Remaining Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks 7.0 $ 1,240 $ 585 $ 655 $ 1,240 $ 620 $ 620 Patents 6.2 5,180 401 4,779 5,180 586 4,594 Customer lists 2.1 1,015 205 810 1,015 290 725 Programming agreement 6.3 2,154 220 1,934 2,154 294 1,860 TOTAL $ 9,589 $ 1,411 $ 8,178 $ 9,589 $ 1,790 $ 7,799 Total amortization expense from definite-lived intangibles for the three-month periods ended May 31, 2014 and 2015 was less than $0.1 million and $0.4 million , respectively. The following table presents the Company's estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangibles: Year ended February 28 (29), Expected Amortization Expense (in 000's) 2016 1,514 2017 1,514 2018 1,255 2019 1,076 2020 1,076 |
Long-term Debt
Long-term Debt | 3 Months Ended |
May. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Long-term debt was comprised of the following at February 28, 2015 and May 31, 2015 : February 28, May 31, 2014 Credit Agreement debt : Revolver $ 8,000 $ 11,000 Term Loan 185,000 184,537 Total 2014 Credit Agreement debt 193,000 195,537 98.7FM non-recourse debt 70,401 69,208 Digonex non-recourse debt (1) 3,971 4,157 Less: Current maturities (6,840 ) (10,192 ) Less: Unamortized original issue discount of Credit Agreement debt (6,382 ) (7,228 ) Total long-term debt $ 254,150 $ 251,482 (1) The face value of Digonex non-recourse debt is $6.2 million 2014 Credit Agreement On June 10, 2014, Emmis entered into the 2014 Credit Agreement, by and among the Company, EOC, as borrower (the “Borrower”), certain other subsidiaries of the Company, as guarantors (the “Subsidiary Guarantors”), the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Fifth Third Bank, as syndication agent. The 2014 Credit Agreement includes a senior secured term loan facility (the “Term Loan”) of $ 185.0 million and a senior secured revolving credit facility of $20.0 million , and contains provisions for an uncommitted increase of up to $20.0 million principal amount (plus additional amounts so long as a pro forma total net senior secured leverage ratio condition is met) of the revolving credit facility and/or the Term Loan subject to the satisfaction of certain conditions. The revolving credit facility includes a sub-facility for the issuance of up to $5.0 million of letters of credit. Pursuant to the 2014 Credit Agreement, the Borrower borrowed $185.0 million of the Term Loan on June 10, 2014; $109.0 million was disbursed to the Borrower (the “Initial Proceeds”) and the remaining $76.0 million was funded into escrow (the “Subsequent Acquisition Proceeds”). The Initial Proceeds, coupled with $13.0 million of revolving credit facility borrowings, were used by the Borrower on June 10, 2014 to repay all amounts outstanding under the 2012 Credit Agreement, to make a $55.0 million initial payment associated with our acquisition of WBLS-FM and WLIB-AM, and to pay fees and expenses. The Subsequent Acquisition Proceeds were used to make the final $76.0 million payment related to the acquisition of WBLS-FM and WLIB-AM on February 13, 2015. The Term Loan is due not later than June 10, 2021 and originally amortized in an amount equal to 1% per annum (subsequently amended, see below) of the total principal amount outstanding, payable in quarterly installments commencing April 1, 2015, with the balance payable on the maturity date. The revolving credit facility expires not later than June 10, 2019. An unused commitment fee of 50 basis points per annum will be payable quarterly on the average unused amount of the revolving credit facility. Prior to the amendments to the 2014 Credit Agreement discussed below, the Term Loan and amounts borrowed under the revolving credit facility bore interest, at the Borrower’s option, at either (i) the Alternate Base Rate (as defined in the 2014 Credit Agreement) (but not less than 2.00% ) plus 3.75% or (ii) the Adjusted LIBO Rate (as defined in the 2014 Credit Agreement) (but not less than 1.00% ) plus 4.75% . Approximately $1.0 million of transaction fees related to the 2014 Credit Agreement were capitalized and are being amortized over the life of the 2014 Credit Agreement. These deferred debt costs are included in other assets, net in the condensed consolidated balance sheets. The 2014 Credit Agreement is carried on our condensed consolidated balance sheets net of an original issue discount. The original issue discount, which was $6.1 million as of the issuance of the debt on June 10, 2014 and $6.6 million as of May 31, 2015 (inclusive of the $1.0 million and $1.1 million of transaction fees associated with our First Amendment to the 2014 Credit Agreement and Second Amendment to the 2014 Credit Agreement, respectively, discussed below), is being amortized as additional interest expense over the life of the 2014 Credit Agreement. The obligations under the 2014 Credit Agreement are secured by a perfected first priority security interest in substantially all of the assets of the Company, the Borrower and the Subsidiary Guarantors. On November 7, 2014, Emmis entered into the First Amendment to the 2014 Credit Agreement. The First Amendment (i) increases the maximum Total Leverage Ratio to 6.00 :1.00 for the period February 28, 2015 through February 29, 2016, (ii) adjusts the definition of Consolidated EBITDA to exclude during the term of the 2014 Credit Agreement up to $5 million in severance and/or contract termination expenses and up to $2.5 million in losses attributable to the reformatting of the Company’s radio stations, (iii) extends the requirement for the Borrower to pay a 1.00% fee on certain prepayments of the Term Loan to November 7, 2015, (iv) increases the Applicable Margin by 0.25% for at least six months from the date of the First Amendment and until the Total Leverage Ratio is less than 5.00 :1.00, and (v) makes certain technical adjustments to the definition of Consolidated Excess Cash Flow and to address the Foreign Account Tax Compliance Act. Emmis paid a total of approximately $1.0 million of transaction fees to the Lenders that consented to the First Amendment, which were recorded as original issue discount and are being amortized over the remaining life of the 2014 Credit Agreement. On April 30, 2015, Emmis entered into the Second Amendment to the 2014 Credit Agreement. The Second Amendment (i) increases the maximum Total Leverage Ratio to (A) 6.75 :1.00 during the period from May 31, 2015 through February 29, 2016, (B) 6.50 :1.00 for the quarter ended May 31, 2016, (C) 6.25 :1.00 for the quarter ended August 31, 2016, (D) 6.00 :1.00 for the quarter ended November 30, 2016, and (E) 5.75 :1.00 for the quarter ended February 28, 2017, after which it reverts to the original ratio of 4.00 :1.00 for the quarters ended May 31, 2017 and thereafter, (ii) requires Emmis to pay a 2.00% fee on certain prepayments of the Term Loan prior to the first anniversary of the Second Amendment and requires Emmis to pay a 1.00% fee on certain prepayments of the Term Loan from the first anniversary of the Second Amendment until the second anniversary of the Second Amendment, (iii) increases the Applicable Margin throughout the remainder of the term of the Credit Agreement to 5.00% for ABR Loans (as defined in the Credit Agreement) and 6.00% for Eurodollar Loans (as defined in the 2014 Credit Agreement), and (iv) increases the amortization to 0.50% per calendar quarter through January 1, 2016 and to 1.25% per calendar quarter thereafter commencing April 1, 2016. Emmis paid a total of approximately $1.1 million of transaction fees to the Lenders that consented to the Second Amendment, which were recorded as original issue discount and are being amortized over the remaining life of the 2014 Credit Agreement. We were in compliance with all financial and non-financial covenants as of May 31, 2015. Our Total Leverage Ratio and Interest Coverage Ratio (each as defined in the 2014 Credit Agreement) requirements and actual amounts as of May 31, 2015 were as follows: As of May 31, 2015 Covenant Requirement Actual Results Maximum Total Leverage Ratio 6.75 : 1.00 5.56 : 1.00 Minimum Interest Coverage Ratio 2.00 : 1.00 2.96 : 1.00 98.7FM Non-recourse Debt On May 30, 2012, the Company, through wholly-owned, newly-created subsidiaries, issued $82.2 million of non-recourse notes. Teachers Insurance and Annuity Association of America, through a participation agreement with Wells Fargo Bank Northwest, National Association, is entitled to receive payments made on the notes. The notes are obligations only of the newly-created subsidiaries, are non-recourse to the rest of the Company and its subsidiaries, and are secured by the assets of the newly-created subsidiaries, including the payments made to the newly-created subsidiary related to the 98.7FM LMA, which are guaranteed by Disney Enterprises, Inc. The notes bear interest at 4.1% . Digonex Non-recourse Debt Digonex non-recourse notes payable consist of notes payable issued by Digonex, which were recorded at fair value on June 16, 2014, the date that Emmis acquired a controlling interest in Digonex. The notes payable, some of which are secured by the assets of Digonex, are non-recourse to the rest of the Company and its subsidiaries. The notes payable mature on December 31, 2017 and accrue interest at 5.0% per annum. Interest is due at maturity. The face value of the notes payable is $6.2 million . The Company is accreting the difference between this face value and the $3.6 million fair value of the notes payable recorded in the acquisition of its controlling interest of the business as interest expense over the remaining term of the notes payable. Based on amounts outstanding at May 31, 2015, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below: Year Ended 2014 Credit Agreement Digonex Total February 28 (29), Revolver Term Loan 98.7FM Debt Notes payable Payments 2016 $ — $ 2,775 $ 3,797 $ — $ 6,572 2017 — 9,250 5,453 — 14,703 2018 — 9,250 6,039 6,199 21,488 2019 — 9,250 6,587 — 15,837 2020 11,000 9,250 7,150 — 27,400 Thereafter — 144,762 40,182 — 184,944 Total $ 11,000 $ 184,537 $ 69,208 $ 6,199 $ 270,944 |
Liquidity
Liquidity | 3 Months Ended |
May. 31, 2015 | |
Debt Disclosure [Abstract] | |
Liquidity | Liquidity The Company continually projects its anticipated cash needs, which include its operating needs, capital needs, and principal and interest payments on its indebtedness. As of the filing of this Form 10-Q, management believes the Company can meet its liquidity needs through the end of fiscal year 2016 with cash and cash equivalents on hand and projected cash flows from operations. Based on these projections, management also believes the Company will be in compliance with its debt covenants through the end of fiscal year 2016. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
May. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Recurring Fair Value Measurements The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of February 28, 2015 and May 31, 2015 . The financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. As of May 31, 2015 Level 1 Level 2 Level 3 Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total (in 000's) Available for sale securities $ — $ — $ 500 $ 500 Total assets measured at fair value on a recurring basis $ — $ — $ 500 $ 500 As of February 28, 2015 Level 1 Level 2 Level 3 Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total (in 000's) Available for sale securities $ — $ — $ 500 $ 500 Total assets measured at fair value on a recurring basis $ — $ — $ 500 $ 500 Available for sale securities — Emmis’ available for sale securities are investments in preferred stock of private companies that are not traded in active markets and are included in other current assets in the accompanying condensed consolidated balance sheets. The investments are recorded at fair value, which was generally estimated using significant unobservable market parameters, resulting in a level 3 categorization. The carrying value of our preferred stock investments was determined by using implied valuations of recent rounds of financing and by other corroborating evidence, which may include the application of various valuation methodologies including option-pricing and discounted cash flow based models. The following table shows a reconciliation of the beginning and ending balances for fair value measurements using significant unobservable inputs: For the Three Months Ended May 31, 2014 2015 Available For Sale Securities Available For Sale Securities Beginning Balance $ 6,750 $ 500 Purchases — — Ending Balance $ 6,750 $ 500 Non-Recurring Fair Value Measurements The Company has certain assets that are measured at fair value on a non-recurring basis under circumstances and events that include those described in Note 3, Intangible Assets and Goodwill, and are adjusted to fair value only when the carrying values are more than the fair values. The categorization of the framework used to price the assets is considered a Level 3 measurement due to the subjective nature of the unobservable inputs used to determine the fair value (see Note 3 for more discussion). Fair Value of Other Financial Instruments Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. Assets and liabilities acquired in business combinations are recorded at their fair value as of the date of acquisition. The estimated fair value of financial instruments is determined using the best available market information and appropriate valuation methodologies. Considerable judgment is necessary, however, in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange, or the value that ultimately will be realized upon maturity or disposition. The use of different market assumptions may have a material effect on the estimated fair value amounts. The following methods and assumptions were used to estimate the fair value of financial instruments: - Cash and cash equivalents : The carrying amount of these assets approximates fair value because of the short maturity of these instruments. - 2014 Credit Agreement debt : As of May 31, 2015 , the fair value and carrying value, excluding original issue discount, of the Company's 2014 Credit Agreement debt was $189.7 million and $195.5 million , respectively. The Company's estimate of fair value was based on quoted prices of this instrument and is considered a Level 2 measurement. - Other long-term debt : The Company’s 98.7FM non-recourse debt and Digonex non-recourse debt is not actively traded and is considered a level 3 measurement. The Company believes the current carrying value of its other long-term debt approximates its fair value. |
Segment Information
Segment Information | 3 Months Ended |
May. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s operations are aligned into three business segments: (i) Radio, (ii) Publishing and (iii) Corporate & Emerging Technologies. Emerging Technologies includes our TagStation, NextRadio and Digonex businesses. These business segments are consistent with the Company’s management of these businesses and its financial reporting structure. Corporate expenses are not allocated to reportable segments. The Company’s segments operate exclusively in the United States. Beginning in the quarter ended August 31, 2014, the Company reports results of its Emerging Technologies activities with its Corporate activities. Results from Emerging Technologies were reclassified from the Radio segment in the prior periods presented below and are not material. The accounting policies as described in the summary of significant accounting policies included in the Company’s Annual Report filed on Form 10-K, for the year ended February 28, 2015 , and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments. Three Months Ended May 31, 2015 Radio Publishing Corporate & Emerging Technologies Consolidated Net revenues 42,593 15,525 335 $ 58,453 Station operating expenses excluding depreciation and amortization expense 28,693 15,209 1,641 45,543 Corporate expenses excluding depreciation and amortization expense — — 3,819 3,819 Depreciation and amortization 798 61 591 1,450 Operating income (loss) $ 13,102 $ 255 $ (5,716 ) $ 7,641 Three Months Ended May 31, 2014 Radio Publishing Corporate & Emerging Technologies Consolidated Net revenues 44,990 14,678 56 $ 59,724 Station operating expenses excluding depreciation and amortization expense 27,360 14,940 626 42,926 Corporate expenses excluding depreciation and amortization expense — — 4,890 4,890 LMA fees 3,825 — — 3,825 Hungary license litigation and related expenses 92 — — 92 Depreciation and amortization 670 57 626 1,353 Gain on sale of fixed assets (3 ) — — (3 ) Operating income (loss) $ 13,046 $ (319 ) $ (6,086 ) $ 6,641 Total Assets Radio Publishing Corporate & Emerging Technologies Consolidated As of February 28, 2015 $ 282,653 $ 21,622 $ 30,457 $ 334,732 As of May 31, 2015 $ 284,041 $ 21,457 $ 29,516 $ 335,014 |
Regulatory, Legal and Other Mat
Regulatory, Legal and Other Matters | 3 Months Ended |
May. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Regulatory, Legal and Other Matters | Regulatory, Legal and Other Matters Emmis is a party to various legal proceedings arising in the ordinary course of business. In the opinion of management of the company, however, there are no legal proceedings pending against the company that we believe are likely to have a material adverse effect on the company. Emmis and certain of its officers and directors were named as defendants in a lawsuit filed April 16, 2012 by certain holders of Preferred Stock (the “Lock-Up Group”) in the United States District Court for the Southern District of Indiana entitled Corre Opportunities Fund, LP, et al. v. Emmis Communications Corporation, et al . The plaintiffs alleged, among other things, that Emmis and the other defendants violated various provisions of the federal securities laws and breached fiduciary duties in connection with Emmis’ entry into total return swap agreements and voting agreements with certain holders of Emmis Preferred Stock, as well as by issuing shares of Preferred Stock to Emmis’ 2012 Retention Plan and Trust (the “Trust”) and entering into a voting agreement with the trustee of the Trust. The plaintiffs also alleged that Emmis violated certain provisions of Indiana corporate law by directing the voting of the shares of Preferred Stock subject to the total return swap agreements (the “Swap Shares”) and the shares of Preferred Stock held by the Trust (the “Trust Shares”) in favor of certain amendments to Emmis’ Articles of Incorporation. Emmis filed an answer denying the material allegations of the complaint, and filed a counterclaim seeking a declaratory judgment that Emmis could legally direct the voting of the Swap Shares and the Trust Shares in favor of the proposed amendments. On August 31, 2012, the U.S. District Court denied the plaintiffs' request for a preliminary injunction. Plaintiffs subsequently filed an amended complaint seeking monetary damages and dismissing all claims against the individual officer and director defendants. On February 28, 2014, the U.S. District Court issued a ruling in favor of Emmis on all counts. In March 2014, the Plaintiffs filed with the U.S. Court of Appeals for the Seventh Circuit an appeal of the U.S. District Court's decision. The U.S. Court of Appeals for the Seventh Circuit heard oral arguments in this case on December 5, 2014 and on July 2, 2015 unanimously affirmed the U.S. District Court's ruling. On July 7, 2014, individuals who had been seeking to overturn the FCC’s approval of the transfer of the broadcast licenses for WBLS-FM and WLIB-AM from entities associated with Inner City Broadcasting to YMF (the entities that subsequently sold the two stations to Emmis) filed with the U.S. Court of Appeals for the District of Columbia Circuit a Notice of Appeal of the FCC’s approval of the transfer. Additionally, in March 2015, an individual filed a lawsuit in the Federal District Court of New York challenging the transfer of the assets of WBLS-FM and WLIB-AM from Inner City to YMF, and claimed that Emmis had exerted undue influence in securing the FCC's consent to the transfer of the FCC licenses of WBLS-FM and WLIB-AM from YMF to Emmis. Based upon the facts alleged in the cases and the extensive precedent of courts not overturning FCC approvals of transfers of broadcast licenses except in exceedingly rare circumstances, Emmis believes the appeal and the claims in the lawsuit are without merit. Certain groups and individuals have challenged an application for renewal of one of Company's FCC licenses. This challenge is currently pending before the FCC. Emmis does not expect the challenge to result in the denial of our license renewal. |
Income Taxes
Income Taxes | 3 Months Ended |
May. 31, 2015 | |
Income Taxes [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes The effective income tax rate was 47% for the three months ended May 31, 2014. Our effective tax rate was higher than our estimated annual effective tax rate as a discrete expense of $0.9 million was recorded during the quarter. This expense related to the effect of increasing our statutory rate by 1% on existing deferred tax liabilities due to changes in state tax laws and the effect of the WBLS-FM and WLIB-AM LMA on our income apportionments. The effective income tax rate was 30% for the three months ended May 31, 2015. During the three months ended May 31, 2015, the Company recorded a valuation allowance for its net deferred tax assets generated during the quarter, including its net operating loss carryforwards, but excluding deferred tax liabilities related to indefinite-lived intangibles. |
Significant Events
Significant Events | 3 Months Ended |
May. 31, 2015 | |
Significant Events [Abstract] | |
Other Significant Transactions [Text Block] | Other Significant Events On April 21, 2015, Emmis invested an additional $1.0 million in Digonex Technologies, Inc. in the form of convertible debt, which resulted in Emmis owning rights that are convertible into approximately 73% of the common equity of Digonex. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
May. 31, 2015 | |
Accounting Policies [Abstract] | |
Preparation of Interim Financial Statements | Preparation of Interim Financial Statements Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), the condensed consolidated interim financial statements included herein have been prepared, without audit, by Emmis Communications Corporation (“ECC”) and its subsidiaries (collectively, “our,” “us,” “we,” “Emmis” or the “Company”). As permitted under the applicable rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, Emmis believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report for Emmis filed on Form 10-K for the year ended February 28, 2015 . The Company’s results are subject to seasonal fluctuations. Therefore, results shown on an interim basis are not necessarily indicative of results for a full year. In the opinion of Emmis, the accompanying condensed consolidated interim financial statements contain all material adjustments (consisting only of normal recurring adjustments, except as otherwise noted) necessary to present fairly the consolidated financial position of Emmis at May 31, 2015 , and the results of its operations and cash flows for the three-month periods ended May 31, 2014 and 2015 . There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended February 28, 2015 that have had a material impact on our condensed consolidated financial statements and related notes. |
Basic and Diluted Net (Loss) Income Per Common Share | Basic and Diluted Net Income Per Common Share Basic net income per common share is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Potentially dilutive securities at May 31, 2014 and 2015 consisted of stock options, restricted stock awards and the 6.25% Series A convertible preferred stock (the “Preferred Stock”). |
Local Programming and Marketing Agreement Fees | Local Programming and Marketing Agreement Fees The Company from time to time enters into local programming and marketing agreements (“LMAs”) in connection with acquisitions or dispositions of radio stations, typically pending regulatory approval of transfer of the Federal Communications Commission ("FCC") licenses. Under the terms of these agreements, the acquiring company makes specified periodic payments to the holder of the FCC license in exchange for the right to program and sell advertising for a specified portion of the station’s inventory of broadcast time. The acquiring company records revenues and expenses associated with the portion of the station’s inventory of broadcast time it manages. Nevertheless, as the holder of the FCC license, the owner-operator retains control and responsibility for the operation of the station, including responsibility over all programming broadcast on the station. On February 11, 2014, the Company entered into an LMA in connection with its agreement to purchase WBLS-FM and WLIB-AM in New York City from YMF Media New York LLC and YMF Media New York License LLC (collectively, "YMF"). The LMA, which commenced on March 1, 2014, gave Emmis the right to program and sell advertising for the two New York stations. Emmis paid YMF $1.3 million per month and reimbursed YMF for certain monthly expenses through the first closing of the acquisition, which occurred on June 10, 2014. After the first closing, the LMA continued in effect until the second and final closing of the transaction, which occurred on February 13, 2015 at a reduced monthly fee of approximately $0.7 million . During the three-month period ended May 31, 2014, Emmis recorded $3.8 million of LMA fee expense. On April 26, 2012, Emmis entered into an LMA with a subsidiary of Disney Enterprises, Inc. for 98.7FM in New York (formerly WRKS-FM and now WEPN-FM, hereinafter referred to as “98.7FM”). The LMA for this station started on April 30, 2012 and will continue until August 31, 2024. Emmis retains ownership and control of the Station, including the related FCC license during the term of the LMA and is scheduled to receive an annual fee until the LMA’s termination. LMA fee revenue is recorded on a straight-line basis over the term of the LMA |
Restricted Cash | Restricted Cash The Company's restricted cash, included in current assets in the accompanying condensed consolidated balance sheets, totaled $2.7 million and $2.3 million as of February 28, 2015 and May 31, 2015 , respectively. The terms of our 98.7FM non-recourse notes and related agreements discussed in Note 4 restrict a portion of our cash on deposit for specific operating and financing purposes. Restricted cash related to the 98.7FM non-recourse notes and related agreements totaled $1.5 million and $1.3 million as of February 28, 2015 and May 31, 2015 , respectively. In connection with the Company's agreement with Sprint/United Management Company (“Sprint”), the Company collects cash from other participating companies in the radio industry and remits cash collected to Sprint. The entirety of cash collected but not yet remitted to Sprint classified as restricted cash as of February 28, 2015 and May 31, 2015 was $1.3 million and $1.0 million , respectively. |
Valuation of Indefinite-lived Broadcasting Licenses | Valuation of Indefinite-lived Broadcasting Licenses In accordance with ASC Topic 350, Intangibles—Goodwill and Other, the Company’s Federal Communications Commission (“FCC”) licenses are considered indefinite-lived intangibles. These assets, which the Company determined were its only indefinite-lived intangibles, are not subject to amortization, but are tested for impairment at least annually as discussed below. The carrying amounts of the Company’s FCC licenses were $210.1 million as of February 28, 2015 and May 31, 2015 . Pursuant to Emmis’ accounting policy, stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA by another broadcaster. The Company generally performs its annual impairment test of indefinite-lived intangibles as of December 1 of each year. When indicators of impairment are present, the Company will perform an interim impairment test. During the quarter ended May 31, 2015 , no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. These impairment tests may result in impairment charges in future periods. Fair value of our FCC licenses is estimated to be the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. To determine the fair value of our FCC licenses, the Company uses an income valuation method when it performs its impairment tests. Under this method, the Company projects cash flows that would be generated by each of its units of accounting assuming the unit of accounting was commencing operations in its respective market at the beginning of the valuation period. This cash flow stream is discounted to arrive at a value for the FCC license. The Company assumes the competitive situation that exists in each market remains unchanged, with the exception that its unit of accounting commenced operations at the beginning of the valuation period. In doing so, the Company extracts the value of going concern and any other assets acquired, and strictly values the FCC license. Major assumptions involved in this analysis include market revenue, market revenue growth rates, unit of accounting audience share, unit of accounting revenue share and discount rate. Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control. When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by ASC Topic 350-30-35. In our case, radio stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA. |
Valuation of Goodwill | Valuation of Goodwill ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. The Company conducts the two-step impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. During the quarter ended May 31, 2015 , no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. When assessing its goodwill for impairment, the Company uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units (radio stations grouped by market and magazines on an individual basis). Management determines enterprise value for each of its reporting units by multiplying the two-year average station operating income generated by each reporting unit (current year based on actual results and the next year based on budgeted results) by an estimated market multiple. The Company uses a blended station operating income trading multiple of publicly traded radio operators as a benchmark for the multiple it applies to its radio reporting units. There are no publicly traded publishing companies that are focused predominantly on city and regional magazines as is our publishing segment. Therefore, the market multiple used as a benchmark for our publishing reporting units has been based on recently completed transactions within the city and regional magazine industry or analyst reports that include valuations of magazine divisions within publicly traded media conglomerates. Management believes this methodology for valuing radio and publishing properties is a common approach and believes that the multiples used in the valuation are reasonable given our peer comparisons and recent market transactions. To corroborate the step-one reporting unit fair values determined using the market approach described above, management also uses an income approach, which is a discounted cash flow method to determine the fair value of the reporting unit. This enterprise valuation is compared to the carrying value of the reporting unit for the first step of the goodwill impairment test. If the reporting unit exhibits impairment, the Company proceeds to the second step of the goodwill impairment test. For its step-two testing, the enterprise value is allocated among the tangible assets, indefinite-lived intangible assets (FCC licenses valued using a direct-method valuation approach) and unrecognized intangible assets, such as customer lists, with the residual amount representing the implied fair value of the goodwill. To the extent the carrying amount of the goodwill exceeds the implied fair value of the goodwill, the difference is recorded as an impairment charge in the statement of operations. |
Definite-lived intangibles | Definite-lived intangibles The Company’s definite-lived intangible assets consist of patents, customer lists, trademarks and a syndicated programming contract, all of which are amortized over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. |
Fair Value Measurements and Disclosure | Non-Recurring Fair Value Measurements The Company has certain assets that are measured at fair value on a non-recurring basis under circumstances and events that include those described in Note 3, Intangible Assets and Goodwill, and are adjusted to fair value only when the carrying values are more than the fair values. The categorization of the framework used to price the assets is considered a Level 3 measurement due to the subjective nature of the unobservable inputs used to determine the fair value (see Note 3 for more discussion). Fair Value of Other Financial Instruments Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. Assets and liabilities acquired in business combinations are recorded at their fair value as of the date of acquisition. The estimated fair value of financial instruments is determined using the best available market information and appropriate valuation methodologies. Considerable judgment is necessary, however, in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange, or the value that ultimately will be realized upon maturity or disposition. The use of different market assumptions may have a material effect on the estimated fair value amounts. The following methods and assumptions were used to estimate the fair value of financial instruments: - Cash and cash equivalents : The carrying amount of these assets approximates fair value because of the short maturity of these instruments. - 2014 Credit Agreement debt : As of May 31, 2015 , the fair value and carrying value, excluding original issue discount, of the Company's 2014 Credit Agreement debt was $189.7 million and $195.5 million , respectively. The Company's estimate of fair value was based on quoted prices of this instrument and is considered a Level 2 measurement. - Other long-term debt : The Company’s 98.7FM non-recourse debt and Digonex non-recourse debt is not actively traded and is considered a level 3 measurement. The Company believes the current carrying value of its other long-term debt approximates its fair value. As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Recurring Fair Value Measurements The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of February 28, 2015 and May 31, 2015 . The financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. Available for sale securities — Emmis’ available for sale securities are investments in preferred stock of private companies that are not traded in active markets and are included in other current assets in the accompanying condensed consolidated balance sheets. The investments are recorded at fair value, which was generally estimated using significant unobservable market parameters, resulting in a level 3 categorization. The carrying value of our preferred stock investments was determined by using implied valuations of recent rounds of financing and by other corroborating evidence, which may include the application of various valuation methodologies including option-pricing and discounted cash flow based models. |
New Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. In April 2015, the FASB voted to defer the effective date of this Accounting Standards Update for one year. This guidance will be effective for the Company in the first quarter of its fiscal year ending February 28, 2019. The Company is currently evaluating the method of adoption and impact, if any, the adoption of this guidance will have on its financial position and results of operations. In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this update is not expected to have an impact on the Company’s consolidated financial statements. On April 7, 2015, the FASB issued Accounting Standards Update 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. Entities that have historically presented debt issuance costs as an asset, related to a recognized debt liability, will be required to present those costs as a direct deduction from the carrying amount of that debt liability. This presentation will result in debt issuance costs being presented the same way debt discounts have historically been handled. The ASU does not change the recognition, measurement, or subsequent measurement guidance for debt issuance costs. This guidance is effective for the Company as of March 1, 2016 and may be adopted early. The Company expects this new guidance will reduce total assets and total long-term debt on its consolidated balance sheets by amounts classified as deferred debt issuance costs, but does not expect this update to have any other effect on its consolidated financial statements. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
May. 31, 2015 | |
Accounting Policies [Abstract] | |
Calculation of Basic and Diluted Net (loss) Income Per Share from Continuing Operations | The following table sets forth the calculation of basic and diluted net income per share: For the three months ended May 31, 2014 May 31, 2015 Net Income Shares Net Income Per Share Net Income Shares Net Income Per Share (amounts in 000’s, except per share data) Basic net income per common share: Net income available to common shareholders $ 956 42,093 $ 0.02 $ 1,525 43,217 $ 0.04 Impact of equity awards — 2,988 — — 1,890 — Impact of conversion of preferred stock into common stock — 2,266 — — 2,266 — Diluted net income per common share: Net income available to common shareholders $ 956 47,347 $ 0.02 $ 1,525 47,373 $ 0.03 |
Shares Excluded from Calculation as Effect of Conversion into Shares of Common Stock would be Antidilutive | Shares excluded from the calculation as the effect of their conversion into shares of our common stock would be antidilutive were as follows: For the three months ended May 31, 2014 2015 (shares in 000’s ) Equity awards 974 3,592 Antidilutive common share equivalents 974 3,592 |
Schedule Of Operating Results From Local Programming and Marketing Agreements | The following table summarizes certain operating results of 98.7FM for all periods presented. Net revenues for 98.7FM are solely related to LMA fees. 98.7FM is a part of our radio segment. For the three months ended May 31, 2014 2015 (amounts in 000's) Net revenues $ 2,583 $ 2,583 Station operating expenses, excluding depreciation and amortization expense 224 257 Interest expense 828 780 |
Schedule Of Assets And Liabilities Of Local Programming and Marketing Agreements | Assets and liabilities of 98.7FM as of February 28, 2015 and May 31, 2015 were as follows: As of February 28, As of May 31, 2015 2015 (amounts in 000's) Current assets: Restricted cash $ 1,467 $ 1,264 Prepaid expenses 603 589 Total current assets 2,070 1,853 Noncurrent assets: Property and equipment, net — 269 Indefinite lived intangibles 51,063 51,063 Deferred debt issuance costs, net 2,495 2,428 Deposits and other 4,428 4,726 Total noncurrent assets 57,986 58,486 Total assets $ 60,056 $ 60,339 Current liabilities: Accounts payable and accrued expenses $ 22 $ 22 Current maturities of long-term debt 4,990 5,105 Deferred revenue 753 779 Other current liabilities 241 236 Total current liabilities 6,006 6,142 Noncurrent liabilities: Long-term debt, net of current portion 65,411 64,103 Other noncurrent liabilities 27 27 Total noncurrent liabilities 65,438 64,130 Total liabilities $ 71,444 $ 70,272 |
Share Based Payments (Tables)
Share Based Payments (Tables) | 3 Months Ended |
May. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Assumptions used to Calculate Fair Value of Options on Date of Grant | The following assumptions were used to calculate the fair value of the Company’s options on the date of grant during the three months ended May 31, 2014 and 2015 : Three Months Ended May 31, 2014 2015 Risk-Free Interest Rate: 1.2% - 1.3% 1.3% - 1.4% Expected Dividend Yield: 0% 0% Expected Life (Years): 4.3 4.3 Expected Volatility: 72.5% - 73.9% 63.6% - 64.6% |
Summary of Stock Options Outstanding and Activity | The following table presents a summary of the Company’s stock options outstanding at May 31, 2015 , and stock option activity during the three months ended May 31, 2015 (“Price” reflects the weighted average exercise price per share; "Aggregate Intrinsic Value" dollars in thousands): Options Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, beginning of period 5,724,446 $ 1.76 Granted 1,452,500 2.07 Exercised (1) 77,500 0.70 Forfeited 35,000 2.67 Expired 69,463 12.81 Outstanding, end of period 6,994,983 1.72 7.1 $ 1,443 Exercisable, end of period 4,173,396 1.36 5.8 $ 1,376 (1) |
Summary of Nonvested Options and Changes | A summary of the Company’s nonvested options at May 31, 2015 , and changes during the three months ended May 31, 2015 , is presented below: Options Weighted Average Grant Date Fair Value Nonvested, beginning of period 3,167,083 $ 1.08 Granted 1,452,500 1.05 Vested 1,762,996 0.70 Forfeited 35,000 1.50 Nonvested, end of period 2,821,587 1.30 |
Summary of Restricted Stock Grants Outstanding and Activity | The following table presents a summary of the Company’s restricted stock grants outstanding at May 31, 2015 , and restricted stock activity during the three months ended May 31, 2015 (“Price” reflects the weighted average share price at the date of grant): Awards Price Grants outstanding, beginning of period 677,634 $ 2.26 Granted 751,570 1.49 Vested (restriction lapsed) 674,070 1.41 Grants outstanding, end of period 755,134 2.25 |
Stock-Based Compensation Expense and Related Tax Benefits Recognized | The following table summarizes stock-based compensation expense and related tax benefits recognized by the Company during the three months ended May 31, 2014 and 2015 : Three Months Ended May 31, 2014 2015 Station operating expenses $ 402 $ 724 Corporate expenses 546 1,380 Stock-based compensation expense included in operating expenses 948 2,104 Tax benefit 331 — Recognized stock-based compensation expense, net of tax $ 617 $ 2,104 |
Goodwill by Segment (Tables)
Goodwill by Segment (Tables) | 3 Months Ended |
May. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | The following table summarizes the Company's goodwill by segment as of February 28, 2015 and May 31, 2015 . As of February 28, As of May 31, 2015 2015 Radio $ 4,603 $ 4,603 Publishing 8,036 8,036 Corporate & Emerging Technologies 2,753 2,753 Total Goodwill $ 15,392 $ 15,392 |
Definite-lived Intangibles (Tab
Definite-lived Intangibles (Tables) | 3 Months Ended |
May. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The following table presents the weighted-average useful life, gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at February 28, 2015 and May 31, 2015 : As of February 28, 2015 As of May 31, 2015 (in 000's) Weighted Average Remaining Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks 7.0 $ 1,240 $ 585 $ 655 $ 1,240 $ 620 $ 620 Patents 6.2 5,180 401 4,779 5,180 586 4,594 Customer lists 2.1 1,015 205 810 1,015 290 725 Programming agreement 6.3 2,154 220 1,934 2,154 294 1,860 TOTAL $ 9,589 $ 1,411 $ 8,178 $ 9,589 $ 1,790 $ 7,799 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The following table presents the Company's estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangibles: Year ended February 28 (29), Expected Amortization Expense (in 000's) 2016 1,514 2017 1,514 2018 1,255 2019 1,076 2020 1,076 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
May. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt was comprised of the following at February 28, 2015 and May 31, 2015 : February 28, May 31, 2014 Credit Agreement debt : Revolver $ 8,000 $ 11,000 Term Loan 185,000 184,537 Total 2014 Credit Agreement debt 193,000 195,537 98.7FM non-recourse debt 70,401 69,208 Digonex non-recourse debt (1) 3,971 4,157 Less: Current maturities (6,840 ) (10,192 ) Less: Unamortized original issue discount of Credit Agreement debt (6,382 ) (7,228 ) Total long-term debt $ 254,150 $ 251,482 |
Schedule Of Maximum Leverage Ratio | Our Total Leverage Ratio and Interest Coverage Ratio (each as defined in the 2014 Credit Agreement) requirements and actual amounts as of May 31, 2015 were as follows: As of May 31, 2015 Covenant Requirement Actual Results Maximum Total Leverage Ratio 6.75 : 1.00 5.56 : 1.00 Minimum Interest Coverage Ratio 2.00 : 1.00 2.96 : 1.00 |
Schedule of Maturities of Long-term Debt | Based on amounts outstanding at May 31, 2015, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below: Year Ended 2014 Credit Agreement Digonex Total February 28 (29), Revolver Term Loan 98.7FM Debt Notes payable Payments 2016 $ — $ 2,775 $ 3,797 $ — $ 6,572 2017 — 9,250 5,453 — 14,703 2018 — 9,250 6,039 6,199 21,488 2019 — 9,250 6,587 — 15,837 2020 11,000 9,250 7,150 — 27,400 Thereafter — 144,762 40,182 — 184,944 Total $ 11,000 $ 184,537 $ 69,208 $ 6,199 $ 270,944 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
May. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Accounted for at Fair Value on Recurring Basis | The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. As of May 31, 2015 Level 1 Level 2 Level 3 Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total (in 000's) Available for sale securities $ — $ — $ 500 $ 500 Total assets measured at fair value on a recurring basis $ — $ — $ 500 $ 500 As of February 28, 2015 Level 1 Level 2 Level 3 Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total (in 000's) Available for sale securities $ — $ — $ 500 $ 500 Total assets measured at fair value on a recurring basis $ — $ — $ 500 $ 500 |
Reconciliation of Beginning and Ending Balances for Fair Value Measurements using Significant Unobservable Inputs | The following table shows a reconciliation of the beginning and ending balances for fair value measurements using significant unobservable inputs: For the Three Months Ended May 31, 2014 2015 Available For Sale Securities Available For Sale Securities Beginning Balance $ 6,750 $ 500 Purchases — — Ending Balance $ 6,750 $ 500 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
May. 31, 2015 | |
Segment Reporting [Abstract] | |
Results of Operations of Business Segments | Three Months Ended May 31, 2015 Radio Publishing Corporate & Emerging Technologies Consolidated Net revenues 42,593 15,525 335 $ 58,453 Station operating expenses excluding depreciation and amortization expense 28,693 15,209 1,641 45,543 Corporate expenses excluding depreciation and amortization expense — — 3,819 3,819 Depreciation and amortization 798 61 591 1,450 Operating income (loss) $ 13,102 $ 255 $ (5,716 ) $ 7,641 Three Months Ended May 31, 2014 Radio Publishing Corporate & Emerging Technologies Consolidated Net revenues 44,990 14,678 56 $ 59,724 Station operating expenses excluding depreciation and amortization expense 27,360 14,940 626 42,926 Corporate expenses excluding depreciation and amortization expense — — 4,890 4,890 LMA fees 3,825 — — 3,825 Hungary license litigation and related expenses 92 — — 92 Depreciation and amortization 670 57 626 1,353 Gain on sale of fixed assets (3 ) — — (3 ) Operating income (loss) $ 13,046 $ (319 ) $ (6,086 ) $ 6,641 Total Assets Radio Publishing Corporate & Emerging Technologies Consolidated As of February 28, 2015 $ 282,653 $ 21,622 $ 30,457 $ 334,732 As of May 31, 2015 $ 284,041 $ 21,457 $ 29,516 $ 335,014 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies Calculation of Basic and Diluted Net Income Per Share from Continuing Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Basic net (loss) income per common share: | ||
Net (loss) income available to common shareholders from continuing operations | $ 1,525 | $ 956 |
Impact of conversion of preferred stock into common stock | 0 | |
Diluted net (loss) income per common share: | ||
Net income available to common shareholders from continuing operations | $ 1,525 | $ 956 |
Basic shares: | ||
Basic weighted average common shares outstanding (in shares) | 43,217 | 42,093 |
Impact of equity awards (in shares) | 1,890 | 2,988 |
Impact of conversion of preferred stock into common stock (in shares) | 2,266 | 2,266 |
Diluted shares: | ||
Diluted weighted average common shares outstanding (in shares) | 47,373 | 47,347 |
Basic net income per common share: | ||
Net income available to common shareholders from continuing operations, per basic shares (in dollars per share) | $ 0.04 | $ 0.02 |
Impact of equity awards (in dollars per share) | ||
Impact of conversion of preferred stock into common stock (in dollars per share) | ||
Diluted net income per common share: | ||
Net income available to common shareholders from continuing operations, per dilutive shares (in dollars per share) | $ 0.03 | $ 0.02 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies Shares Excluded from Calculation as Effect of Conversion into Shares of Common Stock (Details) - shares shares in Thousands | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive common share equivalents (in shares) | 3,592 | 974 |
Stock options and restricted stock awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive common share equivalents (in shares) | 3,592 | 974 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies Shares Excluded from Calculation as Effect of Conversion into Shares of Common Stock (Parenthetical) (Details) | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Series A preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Series A convertible preferred stock, dividend rate | 6.25% | 6.25% |
Summary of Significant Accoun30
Summary of Significant Accounting Policies Summary of Restricted Cash (Details) - USD ($) $ in Thousands | May. 31, 2015 | Feb. 28, 2015 |
Cash and Cash Equivalents [Line Items] | ||
Restricted cash | $ 2,286 | $ 2,740 |
Nonrecourse Notes | ||
Cash and Cash Equivalents [Line Items] | ||
Restricted cash | 1,300 | 1,500 |
Sprint/NextRadio Agreement | ||
Cash and Cash Equivalents [Line Items] | ||
Restricted cash | $ 1,000 | $ 1,300 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies Local Programming and Marketing Agreement Fees (Parenthetical) (Details) $ in Thousands | Feb. 11, 2014USD ($)Station | May. 31, 2015USD ($) | May. 31, 2014USD ($) |
Principal Transaction Revenue [Line Items] | |||
Number Of Stations To Be Purchased | Station | 2 | ||
LMA fee expense | $ 0 | $ 3,825 | |
YMF | |||
Principal Transaction Revenue [Line Items] | |||
LMA monthly expense | $ 1,275 | ||
LMA monthly expense future reduction | $ 740 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies Operating Results of Local Programming and Marketing Agreement Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Segment Reporting Information [Line Items] | ||
Net revenues | $ 58,453 | $ 59,724 |
Station operating expenses, excluding depreciation and amortization expense | 45,543 | 42,926 |
Interest expense | 4,546 | 1,600 |
98.7 FM | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 2,583 | 2,583 |
Station operating expenses, excluding depreciation and amortization expense | 257 | 224 |
Interest expense | $ 780 | $ 828 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies Assets and Liabilities of Local Programming and Marketing Agreement Fees (Details) - USD ($) $ in Thousands | May. 31, 2015 | Feb. 28, 2015 |
Segment Reporting Information [Line Items] | ||
Prepaid expenses | $ 9,435 | $ 8,640 |
Total current assets | 57,130 | 55,891 |
PROPERTY AND EQUIPMENT, NET | 34,144 | 34,794 |
Indefinite-lived intangibles | 210,057 | 210,057 |
Total assets | 335,014 | 334,732 |
Other current liabilities | 5,790 | 6,620 |
Total current liabilities | 43,200 | 42,766 |
Long-term Debt, net of current portion | 251,482 | 254,150 |
Other noncurrent liabilities | 8,330 | 8,351 |
Total liabilities | 345,467 | 346,881 |
98.7 FM | ||
Segment Reporting Information [Line Items] | ||
Restricted cash | 1,264 | 1,467 |
Prepaid expenses | 589 | 603 |
Total current assets | 1,853 | 2,070 |
PROPERTY AND EQUIPMENT, NET | 269 | |
Indefinite-lived intangibles | 51,063 | 51,063 |
Deferred debt issuance costs, net | 2,428 | 2,495 |
Deposits and other | 4,726 | 4,428 |
Total noncurrent assets | 58,486 | 57,986 |
Total assets | 60,339 | 60,056 |
Accounts payable and accrued expenses | 22 | 22 |
current maturities of long-term debt | 5,105 | 4,990 |
Deferred revenue | 779 | 753 |
Other current liabilities | 236 | 241 |
Total current liabilities | 6,142 | 6,006 |
Long-term Debt, net of current portion | 64,103 | 65,411 |
Other noncurrent liabilities | 27 | 27 |
Total noncurrent liabilities | 64,130 | 65,438 |
Total liabilities | $ 70,272 | $ 71,444 |
Share Based Payments Assumption
Share Based Payments Assumptions used to Calculate Fair Value of Options on Date of Grant (Detail) | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Dividend Yield: | 0.00% | 0.00% |
Expected Life (Years): | 4 years 3 months 12 days | 4 years 3 months 12 days |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-Free Interest Rate: | 1.30% | 1.20% |
Expected Volatility: | 63.60% | 72.50% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-Free Interest Rate: | 1.40% | 1.30% |
Expected Volatility: | 64.60% | 73.90% |
Share Based Payments - Addition
Share Based Payments - Additional Information (Detail) - USD ($) | Apr. 02, 2012 | May. 31, 2015 | May. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Proceeds from Stock Options Exercised | $ 100,000 | $ 200,000 | |
Employee Service Share-based Compensation, Tax Benefit Realized from Exercise of Stock Options | $ 200,000 | $ 0 | |
Stock options granted, term | 10 years | ||
Stock options vesting period | 3 years | ||
Annual percentage over three years | 33.33% | ||
Stock options weighted average grant date fair value | $ 1.05 | $ 1.84 | |
Shares available for future grants | 900,000 | ||
Restricted stock awards requisite service period | 3 years | ||
Grant date fair value of shares vested | $ 1,000,000 | $ 3,600,000 | |
Compensation expenses | 2,104,000 | $ 948,000 | |
Unrecognized compensation cost | $ 3,200,000 | ||
Compensation cost of weighted average period | 2 years | ||
2012 Retention Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awards requisite service period | 2 years | ||
Preferred stock contributed by company | 400,000 | ||
Compensation expenses | $ 400,000 | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-Free Interest Rate: | 1.30% | 1.20% | |
Vesting dates of outstanding options | 2015-07 | ||
Expiration dates of options | 2016-03 | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-Free Interest Rate: | 1.40% | 1.30% | |
Vesting dates of outstanding options | 2018-03 | ||
Expiration dates of options | 2025-09 |
Share Based Payments Summary of
Share Based Payments Summary of Stock Options Outstanding and Activity (Detail) - May. 31, 2015 - USD ($) $ / shares in Units, $ in Thousands | Total | |
Options | ||
Outstanding, beginning of period | 5,724,446 | |
Granted | 1,452,500 | |
Exercised | [1] | 77,500 |
Forfeited | 35,000 | |
Expired | 69,463 | |
Outstanding, end of period | 6,994,983 | |
Exercisable, end of period | 4,173,396 | |
Price | ||
Outstanding, beginning of period | $ 1.76 | |
Granted | 2.07 | |
Exercised | [1] | 0.70 |
Forfeited | 2.67 | |
Expired or exchanged | 12.81 | |
Outstanding, end of period | 1.72 | |
Exercisable, end of period | $ 1.36 | |
Outstanding | 7 years 1 month 8 days | |
Exercisable, end of period | 5 years 9 months 5 days | |
Outstanding, end of period | $ 1,443 | |
Exercisable, end of period | $ 1,376 | |
[1] | Cash received from option exercises for the three months ended May 31, 2014 and 2015 was $0.2 million and $0.1 million, respectively. The Company recorded an income tax benefit relating to the options exercised during the three months ended May 31, 2014 of $0.2 million. The Company did not record an income tax benefit relating to the options exercised during the three months ended May 31, 2015. |
Share Based Payments Summary 37
Share Based Payments Summary of Nonvested Options and Changes (Detail) - 3 months ended May. 31, 2015 - $ / shares | Total |
Options | |
Nonvested, beginning of period | 3,167,083 |
Granted | 1,452,500 |
Vested | 1,762,996 |
Forfeited | 35,000 |
Nonvested, end of period | 2,821,587 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning of period | $ 1.08 |
Granted | 1.05 |
Vested | 0.70 |
Forfeited | 1.50 |
Nonvested, end of period | $ 1.30 |
Share Based Payments Summary 38
Share Based Payments Summary of Restricted Stock Grants Outstanding and Activity (Detail) - 3 months ended May. 31, 2015 - Restricted Stock - $ / shares | Total |
Awards | |
Grants outstanding, beginning of year | 677,634 |
Granted | 751,570 |
Vested (restriction lapsed) | 674,070 |
Grants outstanding, end of year | 755,134 |
Price | |
Grants outstanding, beginning of year | $ 2.26 |
Granted | 1.49 |
Vested (restriction lapsed) | 1.41 |
Grants outstanding, end of year | $ 2.25 |
Share Based Payments Stock-Base
Share Based Payments Stock-Based Compensation Expense and Related Tax Benefits Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 2,104 | $ 948 |
Tax benefit | 0 | (331) |
Recognized stock-based compensation expense, net of tax | 2,104 | 617 |
Station operating expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | 724 | 402 |
Corporate expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 1,380 | $ 546 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | Feb. 28, 2015 | |
Intangible Assets And Goodwill [Line Items] | |||
Carrying amount of indefinite-lived intangibles | $ 210,057 | $ 210,057 | |
Goodwill | 15,392 | 15,392 | |
Amortization of intangible assets | 400 | $ 100 | |
Radio | |||
Intangible Assets And Goodwill [Line Items] | |||
Goodwill | 4,603 | 4,603 | |
Publishing | |||
Intangible Assets And Goodwill [Line Items] | |||
Goodwill | $ 8,036 | $ 8,036 |
Intangible Assets and Goodwil41
Intangible Assets and Goodwill Goodwill by Segment (Details) - USD ($) $ in Thousands | May. 31, 2015 | Feb. 28, 2015 |
Goodwill | $ 15,392 | $ 15,392 |
Radio | ||
Goodwill | 4,603 | 4,603 |
Publishing | ||
Goodwill | 8,036 | 8,036 |
Corporate and Emerging Technologies [Member] | ||
Goodwill | $ 2,753 | $ 2,753 |
Intangible Assets and Goodwil42
Intangible Assets and Goodwill Finite-lived Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May. 31, 2015 | Feb. 28, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Trademarks, Gross | $ 9,589 | $ 9,589 |
Finite-Lived Intangible Assets, Accumulated Amortization | 1,790 | 1,411 |
Other intangibles, net | $ 7,799 | 8,178 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 7 years | |
Finite-Lived Trademarks, Gross | $ 1,240 | 1,240 |
Finite-Lived Intangible Assets, Accumulated Amortization | 620 | 585 |
Other intangibles, net | $ 620 | 655 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 6 years 2 months 12 days | |
Finite-Lived Trademarks, Gross | $ 5,180 | 5,180 |
Finite-Lived Intangible Assets, Accumulated Amortization | 586 | 401 |
Other intangibles, net | $ 4,594 | 4,779 |
Customer-Related Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 2 years 1 month 6 days | |
Finite-Lived Trademarks, Gross | $ 1,015 | 1,015 |
Finite-Lived Intangible Assets, Accumulated Amortization | 290 | 205 |
Other intangibles, net | $ 725 | 810 |
Contract-Based Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 6 years 3 months 18 days | |
Finite-Lived Trademarks, Gross | $ 2,154 | 2,154 |
Finite-Lived Intangible Assets, Accumulated Amortization | 294 | 220 |
Other intangibles, net | $ 1,860 | $ 1,934 |
Intangible Assets and Goodwil43
Intangible Assets and Goodwill Expected Amortization of Finite-lived Intangible Assets (Details) $ in Thousands | May. 31, 2015USD ($) |
Expected Amortization of Finite-lived Intangible Assets [Abstract] | |
2,015 | $ 1,514 |
2,016 | 1,514 |
2,017 | 1,255 |
2,018 | 1,076 |
2,019 | $ 1,076 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Detail) | Apr. 30, 2015USD ($) | Jun. 10, 2014USD ($) | May. 31, 2015USD ($) | Feb. 28, 2015USD ($) | Jun. 16, 2014USD ($) | May. 30, 2012USD ($) |
Debt Instrument | ||||||
Unamortized discount on issuance of debt | $ 7,228,000 | $ 6,382,000 | ||||
98.7FM Non-recourse debt | ||||||
Debt Instrument | ||||||
Face amount of debt | $ 82,200,000 | |||||
Interest rate during period | 4.10% | |||||
Non-recourse debt | 69,208,000 | 70,401,000 | ||||
Digonex Non-recourse debt | ||||||
Debt Instrument | ||||||
Face amount of debt | $ 6,200,000 | |||||
Interest rate during period | 5.00% | |||||
Non-recourse debt | 4,157,000 | $ 3,971,000 | $ 3,600,000 | |||
Digonex Non-recourse debt | Non-recourse debt | ||||||
Debt Instrument | ||||||
Face amount of debt | $ 6,200,000 | |||||
Two Thousand Fourteen Credit Agreement | ||||||
Debt Instrument | ||||||
Provision for credit facility increase | $ 20,000,000 | |||||
Borrowings on revolving credit facility | 13,000,000 | |||||
Percentage of principal due in quarterly installments | 1.00% | |||||
Commitment fee | 5000.00% | |||||
Amortization of financing costs | $ 1,000,000 | |||||
Unamortized discount on issuance of debt | 6,100,000 | 6,600,000 | ||||
Two Thousand Fourteen Credit Agreement | Term Loan | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | 185,000,000 | |||||
Face amount of debt | 185,000,000 | |||||
Proceeds from issuance of debt | 109,000,000 | |||||
Long-term debt held in escrow | 76,000,000 | |||||
Two Thousand Fourteen Credit Agreement | Revolver | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | 20,000,000 | |||||
Two Thousand Fourteen Credit Agreement | Letter of Credit | ||||||
Debt Instrument | ||||||
Maximum borrowing capacity | 5,000,000 | |||||
First Amendment to Two Thousand Twelve Credit Agreement [Member] | ||||||
Debt Instrument | ||||||
Amortization of financing costs | 0 | |||||
First Amendment to Two Thousand Fourteen Credit Agreement | ||||||
Debt Instrument | ||||||
Amortization of financing costs | $ 1,000,000 | |||||
Debt covenant increased leverage ratio amount | 6 | |||||
Debt covenant maximum severance expense excluded from consolidated EBITDA | $ 5,000,000 | |||||
Debt covenant, maximum losses attributable to reformatting of radio stations included in consolidated EBITDA | $ 2,500,000 | |||||
Prepayment fee, percentage | 1.00% | |||||
Increase in basis spread on variable rate | 0.25% | |||||
Debt covenant, leverage ratio threshold for applicable margin | 5 | |||||
Second Amendment to Two Thousand Fourteen Credit Agreement [Member] | ||||||
Debt Instrument | ||||||
Debt Instrument, Periodic Payment, Percentage of Principal Due in Quarterly Installments, Period One | 0.50% | |||||
Debt Instrument, Periodic Payment, Percentage of Principal Due in Quarterly Installments, Period Two | 1.25% | |||||
Amortization of financing costs | $ 1,100,000 | |||||
Debt Instrument, Debt Covenant, Leverage Ratio, Period One, Maximum | 6.75 | |||||
Debt Instrument, Debt Covenant, Leverage Ratio, Period Two, Maximum | 6.50 | |||||
Debt Instrument, Debt Covenant, Leverage Ratio, Period Three, Maximum | 6.25 | |||||
Debt Instrument, Debt Covenant, Leverage Ratio, Period Four, Maximum | 6 | |||||
Debt Instrument, Debt Covenant, Leverage Ratio, Period Five, Maximum | 5.75 | |||||
Debt Instrument, Debt Covenant, Leverage Ratio, Period Six, Maximum | 4 | |||||
Debt Instrument, Prepayment Fee, Period One, Percentage | 2.00% | |||||
Debt Instrument, Prepayment Fee, Period Two, Percentage | 1.00% | |||||
Base Rate | Two Thousand Fourteen Credit Agreement | ||||||
Debt Instrument | ||||||
Minimum interest rate as a percentage | 2.00% | |||||
Basis spread on interest rate | 3.75% | |||||
Base Rate | Second Amendment to Two Thousand Fourteen Credit Agreement [Member] | ||||||
Debt Instrument | ||||||
Basis spread on interest rate | 5.00% | |||||
London Interbank Offered Rate (LIBOR) | Two Thousand Fourteen Credit Agreement | ||||||
Debt Instrument | ||||||
Minimum interest rate as a percentage | 1.00% | |||||
Basis spread on interest rate | 4.75% | |||||
London Interbank Offered Rate (LIBOR) | Second Amendment to Two Thousand Fourteen Credit Agreement [Member] | ||||||
Debt Instrument | ||||||
Basis spread on interest rate | 6.00% | |||||
WBLS-FM and WLIB-AM | ||||||
Debt Instrument | ||||||
Cash paid at first closing | 55,000,000 | |||||
Cash payable at second closing | $ 76,000,000 |
Long-term Debt - Schedule of Lo
Long-term Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands | May. 31, 2015 | Feb. 28, 2015 | Jun. 16, 2014 | Jun. 10, 2014 |
Debt Instrument | ||||
Less: Current maturities | $ 10,192 | $ 6,840 | ||
Less: Unamortized original issue discount of Credit Agreement debt | 7,228 | 6,382 | ||
Total long-term debt | 251,482 | 254,150 | ||
98.7FM Non-recourse debt | ||||
Debt Instrument | ||||
Non-recourse debt | 69,208 | 70,401 | ||
Digonex Non-recourse debt | ||||
Debt Instrument | ||||
Non-recourse debt | 4,157 | 3,971 | $ 3,600 | |
Two Thousand Fourteen Credit Agreement | ||||
Debt Instrument | ||||
Total Credit Agreement debt | 195,537 | 193,000 | ||
Less: Unamortized original issue discount of Credit Agreement debt | 6,600 | $ 6,100 | ||
Revolver | Two Thousand Fourteen Credit Agreement | ||||
Debt Instrument | ||||
Total Credit Agreement debt | 11,000 | 8,000 | ||
Term Loan | Two Thousand Fourteen Credit Agreement | ||||
Debt Instrument | ||||
Total Credit Agreement debt | $ 184,537 | $ 185,000 |
Long-term Debt - Schedule of Ma
Long-term Debt - Schedule of Maximum Leverage Ratio (Detail) - Two Thousand Fourteen Credit Agreement | May. 31, 2015 |
Covenant Requirement | |
Line of Credit Facility | |
Maximum Total Leverage Ratio | 6.75 |
Minimum Interest Coverage Ratio | 2 |
Actual Results | |
Line of Credit Facility | |
Maximum Total Leverage Ratio | 5.56 |
Minimum Interest Coverage Ratio | 2.96 |
Long-term Debt - Schedule of 47
Long-term Debt - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | May. 31, 2015USD ($) |
Debt Instrument | |
2,015 | $ 6,572 |
2,016 | 14,703 |
2,017 | 21,488 |
2,018 | 15,837 |
2,019 | 27,400 |
Thereafter | 184,944 |
Total long-term debt | 270,944 |
98.7FM Non-recourse debt | Two Thousand Fourteen Credit Agreement | |
Debt Instrument | |
2,015 | 3,797 |
2,016 | 5,453 |
2,017 | 6,039 |
2,018 | 6,587 |
2,019 | 7,150 |
Thereafter | 40,182 |
Total long-term debt | 69,208 |
Digonex Non-recourse debt | |
Debt Instrument | |
2,015 | 0 |
2,016 | 0 |
2,017 | 6,199 |
2,018 | 0 |
2,019 | 0 |
Thereafter | 0 |
Total long-term debt | 6,199 |
Revolver | Two Thousand Fourteen Credit Agreement | |
Debt Instrument | |
2,015 | 0 |
2,016 | 0 |
2,017 | 0 |
2,018 | 0 |
2,019 | 11,000 |
Thereafter | 0 |
Total long-term debt | 11,000 |
Term Loan | Two Thousand Fourteen Credit Agreement | |
Debt Instrument | |
2,015 | 2,775 |
2,016 | 9,250 |
2,017 | 9,250 |
2,018 | 9,250 |
2,019 | 9,250 |
Thereafter | 144,762 |
Total long-term debt | $ 184,537 |
Fair Value Measurements Assets
Fair Value Measurements Assets and Liabilities Accounted for at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | May. 31, 2015 | Feb. 28, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | $ 500 | $ 500 |
Total assets measured at fair value on a recurring basis | 500 | 500 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 500 | 500 |
Total assets measured at fair value on a recurring basis | $ 500 | $ 500 |
Fair Value Measurements Reconci
Fair Value Measurements Reconciliation of Beginning and Ending Balances for Fair Value Measurements using Significant Unobservable Inputs (Detail) - Available For Sale Securities $ in Thousands | 3 Months Ended |
May. 31, 2015USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning Balance | $ 500 |
Purchases | 0 |
Ending Balance | $ 500 |
Fair Value Measurements Fair Va
Fair Value Measurements Fair Value Measurements Additional Information (Details) $ in Millions | May. 31, 2015USD ($) |
Fair Value Measurements Additional Detail [Abstract] | |
Long-term Debt, Fair Value | $ 189.7 |
Segment Information Results of
Segment Information Results of Operations of Business Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | Feb. 28, 2015 | |
Segment Reporting Information [Line Items] | |||
Net revenues | $ 58,453 | $ 59,724 | |
Station operating expenses, excluding depreciation and amortization expense | 45,543 | 42,926 | |
Corporate expenses excluding depreciation and amortization expense | 3,819 | 4,890 | |
LMA fee expense | 0 | 3,825 | |
Hungary license litigation and related expenses | 92 | ||
Depreciation and amortization | 1,450 | 1,353 | |
Gain on sale of fixed assets | 0 | (3) | |
OPERATING INCOME | 7,641 | 6,641 | |
Total Assets | 335,014 | $ 334,732 | |
Radio | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 42,593 | 44,990 | |
Station operating expenses, excluding depreciation and amortization expense | 28,693 | 27,360 | |
Corporate expenses excluding depreciation and amortization expense | 0 | 0 | |
LMA fee expense | 3,825 | ||
Hungary license litigation and related expenses | 92 | ||
Depreciation and amortization | 798 | 670 | |
Gain on sale of fixed assets | (3) | ||
OPERATING INCOME | 13,102 | 13,046 | |
Total Assets | 284,041 | 282,653 | |
Publishing | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 15,525 | 14,678 | |
Station operating expenses, excluding depreciation and amortization expense | 15,209 | 14,940 | |
Corporate expenses excluding depreciation and amortization expense | 0 | 0 | |
LMA fee expense | 0 | ||
Hungary license litigation and related expenses | 0 | ||
Depreciation and amortization | 61 | 57 | |
Gain on sale of fixed assets | 0 | ||
OPERATING INCOME | 255 | (319) | |
Total Assets | 21,457 | 21,622 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 335 | 56 | |
Station operating expenses, excluding depreciation and amortization expense | 1,641 | 626 | |
Corporate expenses excluding depreciation and amortization expense | 3,819 | 4,890 | |
LMA fee expense | 0 | ||
Hungary license litigation and related expenses | 0 | ||
Depreciation and amortization | 591 | 626 | |
Gain on sale of fixed assets | 0 | ||
OPERATING INCOME | (5,716) | $ (6,086) | |
Total Assets | $ 29,516 | $ 30,457 |
Income Taxes Additional Informa
Income Taxes Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Income Taxes [Abstract] | ||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 1.00% | |
Effective Income Tax Rate Reconciliation, Percent | 30.00% | 47.00% |
Other Tax Expense (Benefit) | $ 0.9 |
Significant Events Additional I
Significant Events Additional Information (Detail) - Apr. 21, 2015 - USD ($) $ in Millions | Total |
Significant Events [Abstract] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Changes, Purchase of Interest by Parent | $ 1 |
Business Combination, Additional Convertible Rights Acquired, Total Equity Interest in Acquiree, Percentage | 73.00% |
Uncategorized Items - emms-2015
Label | Element | Value |
Available-for-sale Securities [Member] | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisAssetValue | $ 6,750 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value | us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationRecurringBasisAssetValue | $ 6,750 |