Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May 31, 2016 | Jul. 01, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 31, 2016 | |
Document Fiscal Year Focus | 2,017 | |
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 | Smaller Reporting Company | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 44,142,662 | |
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, 2016 | May 31, 2015 | |
NET REVENUES | $ 56,002 | $ 58,453 |
OPERATING EXPENSES: | ||
Station operating expenses excluding depreciation and amortization expense of $1,132 and $1,110, respectively | 42,989 | 45,543 |
Corporate expenses excluding depreciation and amortization expense of $318 and $222, respectively | 3,044 | 3,819 |
Depreciation and amortization | 1,332 | 1,450 |
Total operating expenses | 47,365 | 50,812 |
Operating income (loss) | 8,637 | 7,641 |
OTHER EXPENSE: | ||
Interest expense | (4,690) | (4,546) |
Other income, net | 43 | 10 |
Total other expense | (4,647) | (4,536) |
INCOME BEFORE INCOME TAXES | 3,990 | 3,105 |
PROVISION FOR INCOME TAXES | 675 | 947 |
CONSOLIDATED NET INCOME | 3,315 | 2,158 |
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 629 | 633 |
NET INCOME ATTRIBUTABLE TO THE COMPANY | $ 2,686 | $ 1,525 |
NET INCOME PER SHARE - BASIC | $ 0.06 | $ 0.04 |
NET INCOME PER SHARE - DILUTED | $ 0.06 | $ 0.03 |
Basic weighted average common shares outstanding | 47,070 | 43,217 |
Diluted weighted average common shares outstanding | 47,295 | 47,373 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Depreciation and amortization expense excluded from station operating expenses | $ 1,110 | $ 1,132 |
Depreciation and amortization expenses excluded from corporate expenses | $ 222 | $ 318 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2016 | May 31, 2015 | |
CONSOLIDATED NET INCOME | $ 3,315 | $ 2,158 |
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAXES: | ||
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 629 | 633 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 2,686 | $ 1,525 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | May 31, 2016 | Feb. 29, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 4,284 | $ 4,456 |
Restricted cash | 1,747 | 1,464 |
Accounts receivable, net | 36,962 | 34,906 |
Prepaid expenses | 9,309 | 7,413 |
Other current assets | 2,129 | 3,452 |
Total current assets | 54,431 | 51,691 |
PROPERTY AND EQUIPMENT, NET | 33,136 | 33,843 |
INTANGIBLE ASSETS (NOTE 3): | ||
Indefinite-lived intangibles | 205,129 | 205,129 |
Goodwill | 14,697 | 14,697 |
Other intangibles, net | 3,074 | 3,299 |
Total intangible assets | 222,900 | 223,125 |
OTHER ASSETS, NET | 8,182 | 7,947 |
Total assets | 318,649 | 316,606 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 7,846 | 8,127 |
Current maturities of long-term debt (Note 4) | 14,832 | 17,573 |
Accrued salaries and commissions | 6,123 | 8,375 |
Deferred revenue | 12,912 | 11,435 |
Other current liabilities | 5,679 | 5,775 |
Total current liabilities | 47,392 | 51,285 |
LONG-TERM DEBT, NET OF CURRENT MATURITIES (NOTE 4) | 230,891 | 228,027 |
OTHER NONCURRENT LIABILITIES | 7,367 | 7,728 |
DEFERRED INCOME TAXES | 44,349 | 43,715 |
Total liabilities | 329,999 | 330,755 |
COMMITMENTS AND CONTINGENCIES | ||
DEFICIT: | ||
Additional paid-in capital | 590,138 | 589,483 |
Accumulated deficit | (639,814) | (642,500) |
Total shareholders’ deficit | (49,189) | (52,546) |
NONCONTROLLING INTERESTS | 37,839 | 38,397 |
Total deficit | (11,350) | (14,149) |
Total liabilities and deficit | 318,649 | 316,606 |
Class A common stock, $.01 par value; authorized 170,000,000 shares; issued and outstanding 41,609,601 shares at February 29, 2016 and 44,142,662 shares at May 31, 2016 | ||
DEFICIT: | ||
Common Stock | 441 | 416 |
Class B common stock, $.01 par value; authorized 30,000,000 shares; issued and outstanding 4,569,464 shares at February 29, 2016 and May 31, 2016 | ||
DEFICIT: | ||
Common Stock | 46 | 46 |
Series A Preferred Stock | ||
DEFICIT: | ||
Preferred Stock | $ 0 | $ 9 |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | May 31, 2016 | Feb. 29, 2016 |
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 | 44,142,662 | 41,609,601 |
Common stock, shares outstanding | 44,142,662 | 41,609,601 |
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 | $ 0 | $ 43,316 |
Series A non-cumulative convertible preferred stock, shares authorized | 2,875,000 | 2,875,000 |
Series A non-cumulative convertible preferred stock, shares issued | 0 | 866,319 |
Series A non-cumulative convertible preferred stock, shares outstanding | 0 | 866,319 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 3 months ended May 31, 2016 - 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. 29, 2016 | $ (14,149) | $ 416 | $ 46 | $ 9 | $ 589,483 | $ (642,500) | $ 38,397 |
Beginning Balance (in shares) at Feb. 29, 2016 | 41,609,601 | 4,569,464 | 866,319 | ||||
Net income | 3,315 | 2,686 | 629 | ||||
Issuance of common stock to employees and officers | 656 | $ 1 | 655 | ||||
Issuance of common stock to employees and officers (in shares) | 107,369 | ||||||
Distributions to noncontrolling interests | (1,187) | (1,187) | |||||
Conversion of Series A Preferred Stock to Class A Common Stock | 15 | $ 24 | $ (9) | ||||
Conversion of Series A Preferred Stock to Class A Common Stock (in shares) | 2,425,692 | (866,319) | |||||
Ending Balance at May. 31, 2016 | $ (11,350) | $ 441 | $ 46 | $ 0 | $ 590,138 | $ (639,814) | $ 37,839 |
Ending Balance (in shares) at May. 31, 2016 | 44,142,662 | 4,569,464 | 0 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2016 | May 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Consolidated net income | $ 3,315 | $ 2,158 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities - | ||
Depreciation and amortization | 1,332 | 1,450 |
Amortization of debt discount | 427 | 395 |
Noncash accretion of debt | 186 | 186 |
Provision for (recovery of) bad debts | (36) | 60 |
Provision for deferred income taxes | 634 | 841 |
Noncash compensation | 856 | 2,104 |
Loss on disposal of assets | (2) | 0 |
Changes in assets and liabilities - | ||
Restricted cash | 283 | (454) |
Accounts receivable | (2,020) | (1,924) |
Prepaid expenses and other current assets | (573) | (228) |
Other assets | (258) | (202) |
Accounts payable and accrued liabilities | (2,533) | (3,259) |
Deferred revenue | 1,477 | 1,171 |
Income taxes | (124) | (97) |
Other liabilities | (333) | (1,420) |
Net cash provided by operating activities | 2,069 | 1,689 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (402) | (421) |
Other | 23 | 23 |
Net cash used in investing activities | (379) | (398) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on long-term debt | (7,490) | (1,656) |
Proceeds from long-term debt | 7,000 | 3,000 |
Debt-related costs | 0 | (1,134) |
Distributions to noncontrolling interests | (1,187) | (1,636) |
Proceeds from the exercise of stock options | 0 | 54 |
Settlement of tax withholding obligations on stock issued to employees | (185) | (318) |
Net cash used in financing activities | (1,862) | (1,690) |
DECREASE IN CASH AND CASH EQUIVALENTS | (172) | (399) |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 4,456 | 3,669 |
End of period | 4,284 | 3,270 |
SUPPLEMENTAL DISCLOSURES: | ||
Cash paid for interest | 3,866 | 4,321 |
Cash paid for income taxes, net | 116 | 216 |
Noncash financing transactions - | ||
Stock issued to employees and directors | $ 840 | $ 1,432 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
May 31, 2016 | |
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 29, 2016 . 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, 2016 , and the results of its operations and cash flows for the three -month periods ended May 31, 2015 and 2016 . 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 29, 2016 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, 2015 and 2016 consisted of stock options and restricted stock awards. Potentially dilutive securities at May 31, 2015 also included Series A non-cumulative convertible preferred stock (the “Preferred Stock”). All shares of Preferred Stock were converted into Class A common stock during the three months ended May 31, 2016. See Note 10 for more discussion of the conversion of Preferred Stock. The following table sets forth the calculation of basic and diluted net income per share: For the three months ended May 31, 2015 May 31, 2016 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 $ 1,525 43,217 $ 0.04 $ 2,686 47,070 $ 0.06 Impact of equity awards — 1,890 — — 225 — Impact of conversion of preferred stock into common stock — 2,266 — — — — Diluted net income per common share: Net income available to common shareholders $ 1,525 47,373 $ 0.03 $ 2,686 47,295 $ 0.06 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, 2015 2016 (shares in 000’s ) Equity awards 3,592 8,208 Antidilutive common share equivalents 3,592 8,208 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, often 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 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, 2015 2016 (amounts in 000's) Net revenues $ 2,583 $ 2,583 Station operating expenses, excluding depreciation and amortization expense 257 251 Interest expense 780 728 Assets and liabilities of 98.7FM as of February 29, 2016 and May 31, 2016 were as follows: As of February 29, As of May 31, 2016 2016 (amounts in 000's) Current assets: Restricted cash $ 1,464 $ 1,022 Prepaid expenses 545 530 Total current assets 2,009 1,552 Noncurrent assets: Property and equipment, net 253 244 Indefinite lived intangibles 49,297 49,297 Deposits and other 5,460 5,678 Total noncurrent assets 55,010 55,219 Total assets $ 57,019 $ 56,771 Current liabilities: Accounts payable and accrued expenses $ 14 $ 17 Current maturities of long-term debt 5,453 5,582 Deferred revenue 779 807 Other current liabilities 223 219 Total current liabilities 6,469 6,625 Noncurrent liabilities: Long-term debt, net of current portion and unamortized debt discount 57,728 56,359 Total noncurrent liabilities 57,728 56,359 Total liabilities $ 64,197 $ 62,984 Restricted Cash The Company's restricted cash, included in current assets in the accompanying condensed consolidated balance sheets, totaled $1.5 million and $1.7 million as of February 29, 2016 and May 31, 2016 , 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 $1.0 million as of February 29, 2016 and May 31, 2016 , 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 May 31, 2016 was $0.7 million . The Company had remitted to Sprint all collected cash related to its agreement as of February 29, 2016. Noncontrolling Interests The Company follows Accounting Standards Codification paragraph 810-10-65-1 to report the noncontrolling interests related to our Austin radio partnership and Digonex. We have a 50.1% controlling interest in our Austin radio partnership. We do not own any of the common equity of Digonex, but we consolidate the entity because we control its board of directors via rights granted in convertible preferred stock and convertible debt that we own. Noncontrolling interests represents the noncontrolling interest holders' proportionate share of the equity of the Austin radio partnership and Digonex. Noncontrolling interests are adjusted for the noncontrolling interest holders' proportionate share of the earnings or losses of the applicable entity. The noncontrolling interest continues to be attributed its share of losses even if that attribution results in a deficit noncontrolling interest balance. Below is a summary of the noncontrolling interest activity for the three months ended May 31, 2015 and 2016: Austin radio partnership Digonex Total noncontrolling interests Balance, February 28, 2015 $ 47,883 $ (1,222 ) $ 46,661 Net income (loss) 1,614 (981 ) 633 Distributions to noncontrolling interests (1,636 ) — (1,636 ) Balance, May 31, 2015 $ 47,861 $ (2,203 ) $ 45,658 Balance, February 29, 2016 $ 47,556 $ (9,159 ) $ 38,397 Net income (loss) 1,527 (898 ) 629 Distributions to noncontrolling interests (1,187 ) — (1,187 ) Balance, May 31, 2016 $ 47,896 $ (10,057 ) $ 37,839 Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. The FASB deferred implementation of this guidance by one year with the issuance of Accounting Standards Update 2015-14. As such, 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 - 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 the fiscal year ending February 28, 2017, 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. In April 2015, the FASB issued Accounting Standards Update 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This update provides guidance as to when a company using a cloud computing service that includes a software license should capitalize and depreciate the software license. This guidance was effective for the Company as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows. In September 2015, the FASB issued Accounting Standards Update 2015-16, Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments. This update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in the provisional amount as if the accounting had been completed at the acquisition date. This guidance was effective for the Company as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842). This update requires lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases of greater than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance will be effective for the Company as of March 1, 2019. A modified retrospective transition method is required. The Company is currently evaluating the impact the adoption of this guidance will have on its consolidated financial statements. In March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09) to simplify the accounting for share-based payment transactions, including the income tax consequences, and standardize certain classifications on the statement of cash flows. As permitted by ASU 2016-09, the Company chose to early adopt the provisions of this update as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows. |
Share Based Payments
Share Based Payments | 3 Months Ended |
May 31, 2016 | |
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 grants, restricted stock grants, and common stock issued to employees and directors in lieu of cash payments. 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, 2015 and 2016 : Three Months Ended May 31, 2015 2016 Risk-Free Interest Rate: 1.3% - 1.4% 1.2% Expected Dividend Yield: 0% 0% Expected Life (Years): 4.3 4.3 Expected Volatility: 63.6% - 64.6% 58.6% - 59.6% The following table presents a summary of the Company’s stock options outstanding at May 31, 2016 , and stock option activity during the three months ended May 31, 2016 (“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 7,793,702 $ 1.59 Granted 582,500 0.54 Expired 73,754 11.17 Outstanding, end of period 8,302,448 1.43 6.8 $ 98 Exercisable, end of period 4,846,694 1.41 5.3 $ 90 Cash received from option exercises for the three months ended May 31, 2015 was $0.1 million . The Company did not record an income tax benefit relating to the options exercised during the three months ended May 31, 2015 . No options were exercised during the three months ended May 31, 2016. The weighted average per share grant date fair value of options granted during the three months ended May 31, 2015 and 2016 , was $1.05 and $0.26 , respectively. A summary of the Company’s nonvested options at May 31, 2016 , and changes during the three months ended May 31, 2016 , is presented below: Options Weighted Average Grant Date Fair Value Nonvested, beginning of period 3,323,253 $ 0.93 Granted 582,500 0.26 Vested 449,999 1.25 Nonvested, end of period 3,455,754 0.77 There were 1.9 million shares available for future grants under the Company’s various equity plans ( 0.6 million shares under the 2015 Equity Compensation Plan and 1.3 million shares under other plans) at May 31, 2016, not including shares that may become available for future grants upon forfeiture, lapse or surrender for taxes. Additionally, the board of directors approved the 2016 Equity Compensation Plan on January 29, 2016. Under the 2016 Equity Compensation Plan, awards equivalent to 6.0 million shares of common stock may be granted. The 2016 Equity Compensation Plan won't become effective until it is approved by Emmis' shareholders at the annual meeting in July 2016. However, Emmis' Chairman and Chief Executive Officer, Jeffrey H. Smulyan, controls more than 50% of the vote on this matter and has informed the board of directors that he intends to vote in favor of approving the 2016 Plan. The vesting dates of outstanding options at May 31, 2016 range from July 2016 to March 2019, and expiration dates range from March 2017 to April 2026. 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 2015 Equity Compensation Plan. The Company may also award, out of the Company’s 2015 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, 2016 , and restricted stock activity during the three months ended May 31, 2016 (“Price” reflects the weighted average share price at the date of grant): Awards Price Grants outstanding, beginning of period 852,028 $ 1.78 Granted 456,367 0.52 Vested (restriction lapsed) 718,867 1.05 Grants outstanding, end of period 589,528 1.69 The total grant date fair value of shares vested during the three months ended May 31, 2015 and 2016 , was $1.0 million and $0.8 million , respectively. Recognized Non-Cash Compensation Expense The following table summarizes stock-based compensation expense recognized by the Company during the three months ended May 31, 2015 and 2016 . The company did not recognize any tax benefits related to stock-based compensation during the periods presented below. Three Months Ended May 31, 2015 2016 Station operating expenses $ 724 $ 337 Corporate expenses 1,380 519 Stock-based compensation expense included in operating expenses 2,104 856 As of May 31, 2016 , there was $1.9 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 1.6 years. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
May 31, 2016 | |
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 $205.1 million as of February 29, 2016 and May 31, 2016 . 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 with 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, 2016 , 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, 2016 , 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 29, 2016 and May 31, 2016 . As of February 29, As of May 31, 2016 2016 Radio $ 4,603 $ 4,603 Publishing 8,036 8,036 Corporate & Emerging Technologies 2,058 2,058 Total Goodwill $ 14,697 $ 14,697 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 29, 2016 and May 31, 2016 : As of February 29, 2016 As of May 31, 2016 (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 6.7 $ 1,240 $ 727 $ 513 $ 1,240 $ 762 $ 478 Patents 5.3 1,815 1,141 674 1,815 1,172 643 Customer lists 1.2 1,015 543 472 1,015 629 386 Programming agreement 5.3 2,154 514 1,640 2,154 587 1,567 TOTAL $ 6,224 $ 2,925 $ 3,299 $ 6,224 $ 3,150 $ 3,074 Total amortization expense from definite-lived intangibles for the three-month periods ended May 31, 2015 and 2016 was $0.4 million and $0.2 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) 2017 896 2018 636 2019 457 2020 457 2021 457 |
Long-term Debt
Long-term Debt | 3 Months Ended |
May 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Long-term debt was comprised of the following at February 29, 2016 and May 31, 2016 : February 29, May 31, 2014 Credit Agreement debt : Revolver $ 3,000 $ 9,000 Term Loan 181,762 176,580 Total 2014 Credit Agreement debt 184,762 185,580 98.7FM non-recourse debt 65,411 64,103 Digonex non-recourse debt (1) 4,714 4,900 Less: Current maturities (17,573 ) (14,832 ) Less: Unamortized original issue discount (9,287 ) (8,860 ) Total long-term debt $ 228,027 $ 230,891 (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 initially amortized in an amount equal to 1% per annum (subsequently amended, see below) of the original principal amount of the Term Loan, 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% . The 2014 Credit Agreement is carried on our condensed consolidated balance sheets net of an original issue discount. The original issue discount, which was $9.3 million and $8.9 million as of February 29, 2016 and May 31, 2016 , respectively, 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) increased the maximum Total Leverage Ratio to 6.00 :1.00 for the period February 28, 2015 through February 29, 2016, (ii) adjusted 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) extended the requirement for the Borrower to pay a 1.00% fee on certain prepayments of the Term Loan to November 7, 2015, (iv) increased 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) made 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, 2016 . Our Total Leverage Ratio and Interest Coverage Ratio (each as defined in the 2014 Credit Agreement) requirements and actual amounts as of May 31, 2016 were as follows: As of May 31, 2016 Covenant Requirement Actual Results Maximum Total Leverage Ratio 6.50 : 1.00 5.43 : 1.00 Minimum Interest Coverage Ratio 2.00 : 1.00 2.46 : 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 original $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, 2016 , 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 2017 $ — $ 6,938 $ 4,146 $ — $ 11,084 2018 — 9,250 6,039 6,199 21,488 2019 — 9,250 6,587 — 15,837 2020 9,000 9,250 7,150 — 25,400 2021 — 9,250 7,756 — 17,006 Thereafter — 132,642 32,425 — 165,067 Total $ 9,000 $ 176,580 $ 64,103 $ 6,199 $ 255,882 |
Liquidity
Liquidity | 3 Months Ended |
May 31, 2016 | |
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 2017 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 2017. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
May 31, 2016 | |
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 29, 2016 and May 31, 2016 . 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, 2016 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 $ — $ — $ 800 $ 800 Total assets measured at fair value on a recurring basis $ — $ — $ 800 $ 800 As of February 29, 2016 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 $ — $ — $ 800 $ 800 Total assets measured at fair value on a recurring basis $ — $ — $ 800 $ 800 Available for sale securities — Emmis’ available for sale securities are comprised of preferred stock of a private company that is not traded in active markets and is included in other assets, net in the accompanying condensed consolidated balance sheets. The investment is 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 investment 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, 2015 2016 Available For Sale Securities Available For Sale Securities Beginning Balance $ 500 $ 800 Purchases — — Ending Balance $ 500 $ 800 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, 2016 , the fair value and carrying value, excluding original issue discount, of the Company's 2014 Credit Agreement debt was $160.5 million and $185.6 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, 2016 | |
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. 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 29, 2016 , and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments. Three Months Ended May 31, 2016 Radio Publishing Corporate & Emerging Technologies Consolidated Net revenues 42,699 13,092 211 $ 56,002 Station operating expenses excluding depreciation and amortization expense 27,275 13,478 2,236 42,989 Corporate expenses excluding depreciation and amortization expense — — 3,044 3,044 Depreciation and amortization 907 73 352 1,332 Operating income (loss) $ 14,517 $ (459 ) $ (5,421 ) $ 8,637 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 Total Assets Radio Publishing Corporate & Emerging Technologies Consolidated As of February 29, 2016 $ 271,336 $ 22,060 $ 23,210 $ 316,606 As of May 31, 2016 $ 275,300 $ 20,241 $ 23,108 $ 318,649 |
Regulatory, Legal and Other Mat
Regulatory, Legal and Other Matters | 3 Months Ended |
May 31, 2016 | |
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. 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. The U.S. Court of Appeals for the District of Columbia upheld the license 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. |
Income Taxes
Income Taxes | 3 Months Ended |
May 31, 2016 | |
Income Taxes [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes Our effective income tax rate was 17% for the three-month period ended May 31, 2016. The Company recorded a valuation allowance for its net deferred tax assets generated during the period, including its net operating loss carryforwards, but excluding deferred tax liabilities related to indefinite-lived intangibles. The provision associated with deferred tax liabilities related to indefinite-lived intangibles is estimated to be approximately $2.5 million for the year ending February 28, 2017. |
Significant Events
Significant Events | 3 Months Ended |
May 31, 2016 | |
Significant Events [Abstract] | |
Other Significant Transactions [Text Block] | Other Significant Events On March 17, 2016, The Nasdaq Stock Market LLC ("Nasdaq") filed with the United States Securities and Exchange Commission Form 25-NSE to formally delist the Company's Preferred Stock from the Nasdaq Global Select Market (formerly listed under the symbol "EMMSP"). The delisting occurred on March 28, 2016. Pursuant to the Company's articles of incorporation, each outstanding share of Preferred Stock was automatically converted on April 4, 2016, into the Company's Class A common stock at a ratio of 2.80 shares of Class A common stock for each share of Preferred Stock. On both March 1, 2016 and June 7, 2016, Emmis contributed an additional $0.5 million to Digonex in the form of convertible debt. Emmis currently owns rights that are convertible into at least 78% of the common equity of Digonex. |
Subsequent Events
Subsequent Events | 3 Months Ended |
May 31, 2016 | |
Subsequent Event [Abstract] | |
Subsequent Events [Text Block] | Subsequent Event On December 7, 2015, the Company received a notification from the Listing Qualifications Department of Nasdaq indicating that the Company's Class A common stock was not in compliance with Markeplace Rule 5450(a)(1) (the “Minimum Bid Price Rule”) because the minimum bid price of the Company's Class A common stock on the Nasdaq Global Select Market closed below $1.00 per share for 30 consecutive business days. In accordance with Marketplace Rules 5810(c)(3)(A), the Company had 180 calendar days, or until June 6, 2016, for our Class A common stock to regain compliance with the Minimum Bid Price Rule. During the 180 day period, the Company’s Class A common stock continued to trade on the Nasdaq Global Select Market. On June 7, 2016, the Company received a written notification (the "Staff Determination")from Nasdaq stating that because the Company had not regained compliance with the $1.00 minimum bid price requirement for continued listing, the Company’s Class A common stock (listed on The Nasdaq Global Select Market under the symbol “EMMS”) would be subject to delisting unless the Company requested a hearing before a Nasdaq Hearings Panel (the "Panel") on or before June 14, 2016. The Company requested a hearing before the Panel, which stayed any delisting action in connection with the Staff Determination and allowed the continued listing of the Company’s Class A common stock on The Nasdaq Global Select Market until the Panel renders a decision subsequent to the hearing. At the hearing, the Company intends to present a plan to regain compliance with Rule 5450(a)(1) and request that the Panel allow the Company additional time within which to regain compliance. The Company believes that it will be able to present a viable plan to regain compliance because our shareholders are scheduled to vote upon a proposed amendment to our articles of incorporation to permit a one-for-four reverse stock split at our annual meeting on July 7, 2016 and we have already received sufficient votes for the proposal’s adoption. Upon receipt of formal shareholder approval, the reverse stock split is expected to be implemented effective upon the commencement of trading on July 8, 2016. Thus, the Company expects that our Class A common stock will have been trading above $1.00 for ten consecutive trading days on July 21, 2016, the date of our Nasdaq hearing. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
May 31, 2016 | |
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 29, 2016 . 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, 2016 , and the results of its operations and cash flows for the three -month periods ended May 31, 2015 and 2016 . 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 29, 2016 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, 2015 and 2016 consisted of stock options and restricted stock awards. Potentially dilutive securities at May 31, 2015 also included Series A non-cumulative 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, often 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 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 $1.5 million and $1.7 million as of February 29, 2016 and May 31, 2016 , 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 $1.0 million as of February 29, 2016 and May 31, 2016 , 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 May 31, 2016 was $0.7 million . The Company had remitted to Sprint all collected cash related to its agreement as of February 29, 2016. |
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 $205.1 million as of February 29, 2016 and May 31, 2016 . 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 with 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, 2016 , 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, 2016 , 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, 2016 , the fair value and carrying value, excluding original issue discount, of the Company's 2014 Credit Agreement debt was $160.5 million and $185.6 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 29, 2016 and May 31, 2016 . 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 comprised of preferred stock of a private company that is not traded in active markets and is included in other assets, net in the accompanying condensed consolidated balance sheets. The investment is 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 investment 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 Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. The FASB deferred implementation of this guidance by one year with the issuance of Accounting Standards Update 2015-14. As such, 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 - 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 the fiscal year ending February 28, 2017, 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. In April 2015, the FASB issued Accounting Standards Update 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This update provides guidance as to when a company using a cloud computing service that includes a software license should capitalize and depreciate the software license. This guidance was effective for the Company as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows. In September 2015, the FASB issued Accounting Standards Update 2015-16, Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments. This update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in the provisional amount as if the accounting had been completed at the acquisition date. This guidance was effective for the Company as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows. In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842). This update requires lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases of greater than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance will be effective for the Company as of March 1, 2019. A modified retrospective transition method is required. The Company is currently evaluating the impact the adoption of this guidance will have on its consolidated financial statements. In March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09) to simplify the accounting for share-based payment transactions, including the income tax consequences, and standardize certain classifications on the statement of cash flows. As permitted by ASU 2016-09, the Company chose to early adopt the provisions of this update as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
May 31, 2016 | |
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, 2015 May 31, 2016 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 $ 1,525 43,217 $ 0.04 $ 2,686 47,070 $ 0.06 Impact of equity awards — 1,890 — — 225 — Impact of conversion of preferred stock into common stock — 2,266 — — — — Diluted net income per common share: Net income available to common shareholders $ 1,525 47,373 $ 0.03 $ 2,686 47,295 $ 0.06 |
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, 2015 2016 (shares in 000’s ) Equity awards 3,592 8,208 Antidilutive common share equivalents 3,592 8,208 |
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, 2015 2016 (amounts in 000's) Net revenues $ 2,583 $ 2,583 Station operating expenses, excluding depreciation and amortization expense 257 251 Interest expense 780 728 |
Schedule Of Assets And Liabilities Of Local Programming and Marketing Agreements | Assets and liabilities of 98.7FM as of February 29, 2016 and May 31, 2016 were as follows: As of February 29, As of May 31, 2016 2016 (amounts in 000's) Current assets: Restricted cash $ 1,464 $ 1,022 Prepaid expenses 545 530 Total current assets 2,009 1,552 Noncurrent assets: Property and equipment, net 253 244 Indefinite lived intangibles 49,297 49,297 Deposits and other 5,460 5,678 Total noncurrent assets 55,010 55,219 Total assets $ 57,019 $ 56,771 Current liabilities: Accounts payable and accrued expenses $ 14 $ 17 Current maturities of long-term debt 5,453 5,582 Deferred revenue 779 807 Other current liabilities 223 219 Total current liabilities 6,469 6,625 Noncurrent liabilities: Long-term debt, net of current portion and unamortized debt discount 57,728 56,359 Total noncurrent liabilities 57,728 56,359 Total liabilities $ 64,197 $ 62,984 |
Noncontrolling Interest | Below is a summary of the noncontrolling interest activity for the three months ended May 31, 2015 and 2016: Austin radio partnership Digonex Total noncontrolling interests Balance, February 28, 2015 $ 47,883 $ (1,222 ) $ 46,661 Net income (loss) 1,614 (981 ) 633 Distributions to noncontrolling interests (1,636 ) — (1,636 ) Balance, May 31, 2015 $ 47,861 $ (2,203 ) $ 45,658 Balance, February 29, 2016 $ 47,556 $ (9,159 ) $ 38,397 Net income (loss) 1,527 (898 ) 629 Distributions to noncontrolling interests (1,187 ) — (1,187 ) Balance, May 31, 2016 $ 47,896 $ (10,057 ) $ 37,839 |
Share Based Payments (Tables)
Share Based Payments (Tables) | 3 Months Ended |
May 31, 2016 | |
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, 2015 and 2016 : Three Months Ended May 31, 2015 2016 Risk-Free Interest Rate: 1.3% - 1.4% 1.2% Expected Dividend Yield: 0% 0% Expected Life (Years): 4.3 4.3 Expected Volatility: 63.6% - 64.6% 58.6% - 59.6% |
Summary of Stock Options Outstanding and Activity | The following table presents a summary of the Company’s stock options outstanding at May 31, 2016 , and stock option activity during the three months ended May 31, 2016 (“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 7,793,702 $ 1.59 Granted 582,500 0.54 Expired 73,754 11.17 Outstanding, end of period 8,302,448 1.43 6.8 $ 98 Exercisable, end of period 4,846,694 1.41 5.3 $ 90 |
Summary of Nonvested Options and Changes | A summary of the Company’s nonvested options at May 31, 2016 , and changes during the three months ended May 31, 2016 , is presented below: Options Weighted Average Grant Date Fair Value Nonvested, beginning of period 3,323,253 $ 0.93 Granted 582,500 0.26 Vested 449,999 1.25 Nonvested, end of period 3,455,754 0.77 |
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, 2016 , and restricted stock activity during the three months ended May 31, 2016 (“Price” reflects the weighted average share price at the date of grant): Awards Price Grants outstanding, beginning of period 852,028 $ 1.78 Granted 456,367 0.52 Vested (restriction lapsed) 718,867 1.05 Grants outstanding, end of period 589,528 1.69 |
Stock-Based Compensation Expense and Related Tax Benefits Recognized | The following table summarizes stock-based compensation expense recognized by the Company during the three months ended May 31, 2015 and 2016 . The company did not recognize any tax benefits related to stock-based compensation during the periods presented below. Three Months Ended May 31, 2015 2016 Station operating expenses $ 724 $ 337 Corporate expenses 1,380 519 Stock-based compensation expense included in operating expenses 2,104 856 |
Goodwill by Segment (Tables)
Goodwill by Segment (Tables) | 3 Months Ended |
May 31, 2016 | |
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 29, 2016 and May 31, 2016 . As of February 29, As of May 31, 2016 2016 Radio $ 4,603 $ 4,603 Publishing 8,036 8,036 Corporate & Emerging Technologies 2,058 2,058 Total Goodwill $ 14,697 $ 14,697 |
Definite-lived Intangibles (Tab
Definite-lived Intangibles (Tables) | 3 Months Ended |
May 31, 2016 | |
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 29, 2016 and May 31, 2016 : As of February 29, 2016 As of May 31, 2016 (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 6.7 $ 1,240 $ 727 $ 513 $ 1,240 $ 762 $ 478 Patents 5.3 1,815 1,141 674 1,815 1,172 643 Customer lists 1.2 1,015 543 472 1,015 629 386 Programming agreement 5.3 2,154 514 1,640 2,154 587 1,567 TOTAL $ 6,224 $ 2,925 $ 3,299 $ 6,224 $ 3,150 $ 3,074 |
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) 2017 896 2018 636 2019 457 2020 457 2021 457 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
May 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt was comprised of the following at February 29, 2016 and May 31, 2016 : February 29, May 31, 2014 Credit Agreement debt : Revolver $ 3,000 $ 9,000 Term Loan 181,762 176,580 Total 2014 Credit Agreement debt 184,762 185,580 98.7FM non-recourse debt 65,411 64,103 Digonex non-recourse debt (1) 4,714 4,900 Less: Current maturities (17,573 ) (14,832 ) Less: Unamortized original issue discount (9,287 ) (8,860 ) Total long-term debt $ 228,027 $ 230,891 |
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, 2016 were as follows: As of May 31, 2016 Covenant Requirement Actual Results Maximum Total Leverage Ratio 6.50 : 1.00 5.43 : 1.00 Minimum Interest Coverage Ratio 2.00 : 1.00 2.46 : 1.00 |
Schedule of Maturities of Long-term Debt | Based on amounts outstanding at May 31, 2016 , 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 2017 $ — $ 6,938 $ 4,146 $ — $ 11,084 2018 — 9,250 6,039 6,199 21,488 2019 — 9,250 6,587 — 15,837 2020 9,000 9,250 7,150 — 25,400 2021 — 9,250 7,756 — 17,006 Thereafter — 132,642 32,425 — 165,067 Total $ 9,000 $ 176,580 $ 64,103 $ 6,199 $ 255,882 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
May 31, 2016 | |
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, 2016 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 $ — $ — $ 800 $ 800 Total assets measured at fair value on a recurring basis $ — $ — $ 800 $ 800 As of February 29, 2016 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 $ — $ — $ 800 $ 800 Total assets measured at fair value on a recurring basis $ — $ — $ 800 $ 800 |
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, 2015 2016 Available For Sale Securities Available For Sale Securities Beginning Balance $ 500 $ 800 Purchases — — Ending Balance $ 500 $ 800 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
May 31, 2016 | |
Segment Reporting [Abstract] | |
Results of Operations of Business Segments | Three Months Ended May 31, 2016 Radio Publishing Corporate & Emerging Technologies Consolidated Net revenues 42,699 13,092 211 $ 56,002 Station operating expenses excluding depreciation and amortization expense 27,275 13,478 2,236 42,989 Corporate expenses excluding depreciation and amortization expense — — 3,044 3,044 Depreciation and amortization 907 73 352 1,332 Operating income (loss) $ 14,517 $ (459 ) $ (5,421 ) $ 8,637 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 Total Assets Radio Publishing Corporate & Emerging Technologies Consolidated As of February 29, 2016 $ 271,336 $ 22,060 $ 23,210 $ 316,606 As of May 31, 2016 $ 275,300 $ 20,241 $ 23,108 $ 318,649 |
Summary of Significant Accoun28
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, 2016 | May 31, 2015 | |
Basic net income per common share: | ||
Net income available to common shareholders | $ 2,686 | $ 1,525 |
Impact of conversion of preferred stock into common stock | $ 0 | |
Basic shares: | ||
Basic weighted average common shares outstanding (in shares) | 47,070 | 43,217 |
Impact of equity awards (in shares) | 225 | 1,890 |
Impact of conversion of preferred stock into common stock (in shares) | 0 | 2,266 |
Diluted shares: | ||
Diluted weighted average common shares outstanding (in shares) | 47,295 | 47,373 |
Basic net income per common share: | ||
Net income available to common shareholders from continuing operations, per basic shares (in dollars per share) | $ 0.06 | $ 0.04 |
Diluted net income per common share: | ||
Net income available to common shareholders from continuing operations, per dilutive shares (in dollars per share) | $ 0.06 | $ 0.03 |
Summary of Significant Accoun29
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, 2016 | May 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive common share equivalents | 8,208 | 3,592 |
Equity awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive common share equivalents | 8,208 | 3,592 |
Summary of Significant Accoun30
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, 2016 | May 31, 2015 | |
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 Accoun31
Summary of Significant Accounting Policies Summary of Restricted Cash (Details) - USD ($) $ in Thousands | May 31, 2016 | Feb. 29, 2016 |
Cash and Cash Equivalents [Line Items] | ||
Restricted cash | $ 1,747 | $ 1,464 |
Nonrecourse Notes | ||
Cash and Cash Equivalents [Line Items] | ||
Restricted cash | 1,000 | $ 1,500 |
Sprint/NextRadio Agreement | ||
Cash and Cash Equivalents [Line Items] | ||
Restricted cash | $ 700 |
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, 2016 | May 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Net revenues | $ 56,002 | $ 58,453 |
Station operating expenses excluding LMA fees and depreciation and amortization expense | 42,989 | 45,543 |
Interest expense | 4,690 | 4,546 |
98.7 FM | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 2,583 | 2,583 |
Station operating expenses excluding LMA fees and depreciation and amortization expense | 251 | 257 |
Interest expense | $ 728 | $ 780 |
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, 2016 | Feb. 29, 2016 |
Segment Reporting Information [Line Items] | ||
Prepaid expenses | $ 9,309 | $ 7,413 |
Total current assets | 54,431 | 51,691 |
Property and equipment, net | 33,136 | 33,843 |
Indefinite-lived intangibles | 205,129 | 205,129 |
Total assets | 318,649 | 316,606 |
Other current liabilities | 5,679 | 5,775 |
Total current liabilities | 47,392 | 51,285 |
Long-term debt, net of current portion | 230,891 | 228,027 |
Other noncurrent liabilities | 7,367 | 7,728 |
Total liabilities | 329,999 | 330,755 |
98.7 FM | ||
Segment Reporting Information [Line Items] | ||
Restricted cash | 1,022 | 1,464 |
Prepaid expenses | 530 | 545 |
Total current assets | 1,552 | 2,009 |
Property and equipment, net | 244 | 253 |
Indefinite-lived intangibles | 49,297 | 49,297 |
Deposits and other | 5,678 | 5,460 |
Total noncurrent assets | 55,219 | 55,010 |
Total assets | 56,771 | 57,019 |
Accounts payable and accrued expenses | 17 | 14 |
Current maturities of long-term debt | 5,582 | 5,453 |
Deferred revenue | 807 | 779 |
Other current liabilities | 219 | 223 |
Total current liabilities | 6,625 | 6,469 |
Long-term debt, net of current portion | 56,359 | 57,728 |
Total noncurrent liabilities | 56,359 | 57,728 |
Total liabilities | $ 62,984 | $ 64,197 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Noncontrolling Interest [Line Items] | ||
Beginning balance | $ 38,397 | $ 46,661 |
Net income (loss) | (629) | (633) |
Distributions to noncontrolling interests | (1,187) | (1,636) |
Ending balance | 37,839 | 45,658 |
Austin Radio Partnership [Member] | ||
Noncontrolling Interest [Line Items] | ||
Beginning balance | 47,556 | 47,883 |
Net income (loss) | (1,527) | 1,614 |
Distributions to noncontrolling interests | (1,187) | (1,636) |
Ending balance | 47,896 | 47,861 |
Digonex [Member] | ||
Noncontrolling Interest [Line Items] | ||
Beginning balance | (9,159) | (1,222) |
Net income (loss) | 898 | 981 |
Distributions to noncontrolling interests | 0 | |
Ending balance | $ (10,057) | $ (2,203) |
Share Based Payments Assumption
Share Based Payments Assumptions used to Calculate Fair Value of Options on Date of Grant (Details) | 3 Months Ended | |
May 31, 2016 | May 31, 2015 | |
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: | 1.20% | 1.30% |
Expected Volatility: | 58.60% | 63.60% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-Free Interest Rate: | 1.20% | 1.40% |
Expected Volatility: | 59.60% | 64.60% |
Share Based Payments - Addition
Share Based Payments - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | Feb. 29, 2016 | Jan. 28, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Proceeds from Stock Options Exercised | $ 100,000 | |||
Employee Service Share-based Compensation, Tax Benefit Realized from Exercise of Stock Options | $ 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 | $ 0.26 | $ 1.05 | ||
Shares available for future grants | 1.9 | |||
Restricted stock awards requisite service period | 3 years | |||
Grant date fair value of shares vested | $ 800,000 | $ 1,000,000 | ||
Compensation expenses | 856,000 | $ 2,104,000 | ||
Unrecognized compensation cost | $ 1,900,000 | |||
Compensation cost of weighted average period | 1 year 7 months | |||
2015 Equity Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future grants | 0.6 | |||
Other Compensation Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for future grants | 1.3 | |||
Two Thousand Sixteen Equity Compensation Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 6 | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-Free Interest Rate: | 1.20% | 1.30% | ||
Percentage Of Controlling Interest | 50.00% | |||
Vesting dates of outstanding options | 2016-07 | |||
Expiration dates of options | 2017-03 | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-Free Interest Rate: | 1.20% | 1.40% | ||
Vesting dates of outstanding options | 2019-03 | |||
Expiration dates of options | 2026-04 |
Share Based Payments Summary of
Share Based Payments Summary of Stock Options Outstanding and Activity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
May 31, 2016USD ($)$ / sharesshares | |
Options | |
Outstanding, beginning of period | shares | 7,793,702 |
Granted | shares | 582,500 |
Expired | shares | 73,754 |
Outstanding, end of period | shares | 8,302,448 |
Exercisable, end of period | shares | 4,846,694 |
Price | |
Outstanding, beginning of period | $ / shares | $ 1.59 |
Granted | $ / shares | 0.54 |
Expired or exchanged | $ / shares | 11.17 |
Outstanding, end of period | $ / shares | 1.43 |
Exercisable, end of period | $ / shares | $ 1.41 |
Outstanding | 6 years 9 months 20 days |
Exercisable, end of period | 5 years 3 months 7 days |
Outstanding, end of period | $ | $ 98 |
Exercisable, end of period | $ | $ 90 |
Share Based Payments Summary 38
Share Based Payments Summary of Nonvested Options and Changes (Details) | 3 Months Ended |
May 31, 2016$ / sharesshares | |
Options | |
Nonvested, beginning of period | shares | 3,323,253 |
Granted | shares | 582,500 |
Vested | shares | 449,999 |
Nonvested, end of period | shares | 3,455,754 |
Weighted Average Grant Date Fair Value | |
Nonvested, beginning of period | $ / shares | $ 0.93 |
Granted | $ / shares | 0.26 |
Vested | $ / shares | 1.25 |
Nonvested, end of period | $ / shares | $ 0.77 |
Share Based Payments Summary 39
Share Based Payments Summary of Restricted Stock Grants Outstanding and Activity (Details) - Restricted Stock | 3 Months Ended |
May 31, 2016$ / sharesshares | |
Awards | |
Grants outstanding, beginning of period | shares | 852,028 |
Granted | shares | 456,367 |
Vested (restriction lapsed) | shares | 718,867 |
Grants outstanding, end of period | shares | 589,528 |
Price | |
Grants outstanding, beginning of period | $ / shares | $ 1.78 |
Granted | $ / shares | 0.52 |
Vested (restriction lapsed) | $ / shares | 1.05 |
Grants outstanding, end of period | $ / shares | $ 1.69 |
Share Based Payments Stock-Base
Share Based Payments Stock-Based Compensation Expense and Related Tax Benefits Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 856 | $ 2,104 |
Station operating expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | 337 | 724 |
Corporate expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 519 | $ 1,380 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Thousands | May 31, 2016 | Feb. 29, 2016 |
Intangible Assets And Goodwill [Line Items] | ||
Carrying amount of indefinite-lived intangibles | $ 205,129 | $ 205,129 |
Goodwill | 14,697 | 14,697 |
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 Goodwil42
Intangible Assets and Goodwill Goodwill by Segment (Details) - USD ($) $ in Thousands | May 31, 2016 | Feb. 29, 2016 |
Goodwill | $ 14,697 | $ 14,697 |
Radio | ||
Goodwill | 4,603 | 4,603 |
Publishing | ||
Goodwill | 8,036 | 8,036 |
Corporate and Emerging Technologies [Member] | ||
Goodwill | $ 2,058 | $ 2,058 |
Intangible Assets and Goodwil43
Intangible Assets and Goodwill Definite-lived Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2016 | Feb. 29, 2016 | |
Definite-Lived Intangible Assets [Line Items] | ||
Definite-Lived Trademarks, Gross | $ 6,224 | $ 6,224 |
Definite-Lived Intangible Assets, Accumulated Amortization | 3,150 | 2,925 |
Other intangibles, net | $ 3,074 | 3,299 |
Trademarks | ||
Definite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 6 years 253 days | |
Definite-Lived Trademarks, Gross | $ 1,240 | 1,240 |
Definite-Lived Intangible Assets, Accumulated Amortization | 762 | 727 |
Other intangibles, net | $ 478 | 513 |
Patents | ||
Definite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 5 years 103 days | |
Definite-Lived Trademarks, Gross | $ 1,815 | 1,815 |
Definite-Lived Intangible Assets, Accumulated Amortization | 1,172 | 1,141 |
Other intangibles, net | $ 643 | 674 |
Customer-Related Intangible Assets | ||
Definite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 1 year 55 days | |
Definite-Lived Trademarks, Gross | $ 1,015 | 1,015 |
Definite-Lived Intangible Assets, Accumulated Amortization | 629 | 543 |
Other intangibles, net | $ 386 | 472 |
Contract-Based Intangible Assets | ||
Definite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 5 years 122 days | |
Definite-Lived Trademarks, Gross | $ 2,154 | 2,154 |
Definite-Lived Intangible Assets, Accumulated Amortization | 587 | 514 |
Other intangibles, net | $ 1,567 | $ 1,640 |
Intangible Assets and Goodwil44
Intangible Assets and Goodwill Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 200 | $ 400 |
Estimate of amortization expense related to intangible assets: | ||
2,016 | 896 | |
2,017 | 636 | |
2,018 | 457 | |
2,019 | 457 | |
2,020 | $ 457 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Detail) | Apr. 30, 2015USD ($) | Jun. 10, 2014USD ($) | May 31, 2016USD ($) | Feb. 29, 2016USD ($) | Jun. 16, 2014USD ($) | May 30, 2012USD ($) |
Debt Instrument | ||||||
Unamortized discount on issuance of debt | $ 8,860,000 | $ 9,287,000 | ||||
98.7FM Non-recourse debt | ||||||
Debt Instrument | ||||||
Face amount of debt | $ 82,200,000 | |||||
Interest rate during period | 4.10% | |||||
Non-recourse debt | 64,103,000 | 65,411,000 | ||||
Digonex Non-recourse debt | ||||||
Debt Instrument | ||||||
Face amount of debt | $ 6,200,000 | |||||
Interest rate during period | 5.00% | |||||
Non-recourse debt | 4,900,000 | 4,714,000 | $ 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 | ||||||
Total Credit Agreement debt | $ 185,580,000 | 184,762,000 | ||||
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% | |||||
Unamortized discount on issuance of debt | 9,300,000 | $ 8,900,000 | ||||
Two Thousand Fourteen Credit Agreement | Term Loan | ||||||
Debt Instrument | ||||||
Total Credit Agreement debt | 176,580,000 | 181,762,000 | ||||
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 | ||||||
Total Credit Agreement debt | 9,000,000 | $ 3,000,000 | ||||
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 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, 2016 | Feb. 29, 2016 | Jun. 16, 2014 | Jun. 10, 2014 |
Debt Instrument | ||||
Less: Current maturities | $ 14,832 | $ 17,573 | ||
Less: Unamortized original issue discount | 8,860 | 9,287 | ||
Total long-term debt | 230,891 | 228,027 | ||
98.7FM Non-recourse debt | ||||
Debt Instrument | ||||
Non-recourse debt | 64,103 | 65,411 | ||
Digonex Non-recourse debt | ||||
Debt Instrument | ||||
Non-recourse debt | 4,900 | 4,714 | $ 3,600 | |
Two Thousand Fourteen Credit Agreement | ||||
Debt Instrument | ||||
Total Credit Agreement debt | 185,580 | 184,762 | ||
Less: Unamortized original issue discount | 8,900 | $ 9,300 | ||
Revolver | Two Thousand Fourteen Credit Agreement | ||||
Debt Instrument | ||||
Total Credit Agreement debt | 9,000 | 3,000 | ||
Term Loan | Two Thousand Fourteen Credit Agreement | ||||
Debt Instrument | ||||
Total Credit Agreement debt | $ 176,580 | $ 181,762 |
Long-term Debt - Schedule of Ma
Long-term Debt - Schedule of Maximum Leverage Ratio (Details) - Two Thousand Fourteen Credit Agreement | May 31, 2016 |
Covenant Requirement | |
Line of Credit Facility | |
Maximum Total Leverage Ratio | 6.50 |
Minimum Interest Coverage Ratio | 2 |
Actual Results | |
Line of Credit Facility | |
Maximum Total Leverage Ratio | 5.43 |
Minimum Interest Coverage Ratio | 2.46 |
Long-term Debt - Schedule of 48
Long-term Debt - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | May 31, 2016USD ($) |
Debt Instrument | |
2,015 | $ 11,084 |
2,016 | 21,488 |
2,017 | 15,837 |
2,018 | 25,400 |
2,019 | 17,006 |
Thereafter | 165,067 |
Total long-term debt | 255,882 |
98.7FM Non-recourse debt | Two Thousand Fourteen Credit Agreement | |
Debt Instrument | |
2,015 | 4,146 |
2,016 | 6,039 |
2,017 | 6,587 |
2,018 | 7,150 |
2,019 | 7,756 |
Thereafter | 32,425 |
Total long-term debt | 64,103 |
Digonex Non-recourse debt | |
Debt Instrument | |
2,015 | 0 |
2,016 | 6,199 |
2,017 | 0 |
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 | 9,000 |
2,019 | 0 |
Thereafter | 0 |
Total long-term debt | 9,000 |
Term Loan | Two Thousand Fourteen Credit Agreement | |
Debt Instrument | |
2,015 | 6,938 |
2,016 | 9,250 |
2,017 | 9,250 |
2,018 | 9,250 |
2,019 | 9,250 |
Thereafter | 132,642 |
Total long-term debt | $ 176,580 |
Fair Value Measurements Assets
Fair Value Measurements Assets and Liabilities Accounted for at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | May 31, 2016 | Feb. 29, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | $ 800 | $ 800 |
Total assets measured at fair value on a recurring basis | 800 | 800 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 800 | 800 |
Total assets measured at fair value on a recurring basis | $ 800 | $ 800 |
Fair Value Measurements Reconci
Fair Value Measurements Reconciliation of Beginning and Ending Balances for Fair Value Measurements using Significant Unobservable Inputs (Details) - Available For Sale Securities - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 800 | $ 500 |
Purchases | 0 | 0 |
Ending Balance | $ 800 | $ 500 |
Fair Value Measurements Additio
Fair Value Measurements Additional Information (Details) $ in Millions | May 31, 2016USD ($) |
Fair Value Measurements Additional Detail [Abstract] | |
Long-term Debt, Fair Value | $ 160.5 |
Segment Information Results of
Segment Information Results of Operations of Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 31, 2016 | May 31, 2015 | Feb. 29, 2016 | |
Segment Reporting Information [Line Items] | |||
Net revenues | $ 56,002 | $ 58,453 | |
Station operating expenses excluding LMA fees and depreciation and amortization expense | 42,989 | 45,543 | |
Corporate expenses excluding depreciation and amortization expense | 3,044 | 3,819 | |
Depreciation and amortization | 1,332 | 1,450 | |
Operating income (loss) | 8,637 | 7,641 | |
Total Assets | 318,649 | $ 316,606 | |
Radio | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 42,699 | 42,593 | |
Station operating expenses excluding LMA fees and depreciation and amortization expense | 27,275 | 28,693 | |
Corporate expenses excluding depreciation and amortization expense | 0 | 0 | |
Depreciation and amortization | 907 | 798 | |
Operating income (loss) | 14,517 | 13,102 | |
Total Assets | 275,300 | 271,336 | |
Publishing | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 13,092 | 15,525 | |
Station operating expenses excluding LMA fees and depreciation and amortization expense | 13,478 | 15,209 | |
Corporate expenses excluding depreciation and amortization expense | 0 | 0 | |
Depreciation and amortization | 73 | 61 | |
Operating income (loss) | (459) | 255 | |
Total Assets | 20,241 | 22,060 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 211 | 335 | |
Station operating expenses excluding LMA fees and depreciation and amortization expense | 2,236 | 1,641 | |
Corporate expenses excluding depreciation and amortization expense | 3,044 | 3,819 | |
Depreciation and amortization | 352 | 591 | |
Operating income (loss) | (5,421) | $ (5,716) | |
Total Assets | $ 23,108 | $ 23,210 |
Income Taxes Additional Informa
Income Taxes Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | Feb. 28, 2017 | |
Deferred Tax Provision [Line Items] | |||
Provision for deferred income taxes | $ 634 | $ 841 | |
Effective Income Tax Rate | 17.00% | ||
Scenario, Forecast [Member] | |||
Deferred Tax Provision [Line Items] | |||
Provision for deferred income taxes | $ 2,500 |
Significant Events Additional I
Significant Events Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
May 31, 2016 | Jun. 07, 2016 | Apr. 04, 2016 | Mar. 01, 2016 | |
Business Acquisition [Line Items] | ||||
Number Of Preferred Stock Converted Into Common Stock | 2.80 | |||
Digonex [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Additional Convertible Rights Acquired, Total Equity Interest in Acquiree, Percentage | 78.00% | |||
Convertible Debt | $ 5 | $ 0.5 | ||
Subsequent Event [Member] | Digonex [Member] | ||||
Business Acquisition [Line Items] | ||||
Convertible Debt | $ 0.5 |
Subsequent Events (Details)
Subsequent Events (Details) - Class A Common Stock - Subsequent Event [Member] | Jul. 07, 2016 | Jun. 07, 2016$ / shares |
Subsequent Event [Line Items] | ||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 0.25 | |
Stock Exchange Minimum Bid Price Per Share | $ 1 |