“We reaped the benefits of a diversified platform.”
That’s the key assessment of how 2016 fared for Townsquare Media from its Chairman/CEO Steven Price, and a strong Q4 is a big reason why this owner of AM and FM stations in small- and medium-sized markets maintains an upbeat outlook for what lies ahead in 2017.
“We feel we are well-positioned across our local market footprint,” Price said in a pre-Opening Bell conference call with financial analysts on Monday (3/13).
In Q4, Townsquare Media saw its net revenue climb to $119.5 million, from $113 million. Net income moved ahead to $3.2 million, from $2.4 million. Adjusted EBITDA climbed to $24.9 million, from $21.1 million.
For the full year, net revenue grew to $516.87 million, from $441.2 million — driven by the company’s Local Marketing Solutions segment. While operating income slipped to $77.43 million, from $84.73 million and total operating costs and expenses climbed to $439.44 million, from $356.5 million, net income soared to $23.3 million (85 cents per diluted share), from $10.2 million (37 cents).
“This year we focused on strengthening our balance sheet,” Price said. “Through EBITDA growth and debt repayment we reduced net leverage from 5.5x at the start of the year, to 4.9x at year end.”
Harming Townsquare in fiscal 2016 were poor weather conditions in Q3, which hurt the company’s Entertainment segment.
Looking ahead, the company expects revenue to grow between 3% and 5% in 2017, excluding political, to between $525 million and $535 million.
Asked by an analyst during its conference call about a potential ad tax, Price said his company has not spent a lot of time looking at the issue, state by state. He also noted that Townsquare is not actively looking to add more radio stations right now. Why? “They want high prices,” Price said.
Another analyst asked specifically about opportunities that may involve iHeartMedia or Cumulus Media, Price said any potential deals would not create much equity value and a deleveraging opportunity for them.