As Expected, Entercom Delivers A Strong Q1

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No matter how you look at the numbers, investors and industry executives should be very pleased with how the first quarter of 2019 is shaping up for the radio industry’s biggest players. On Monday (4/29), Beasley Media Group delivered a Q1 earnings report that was largely positive.


Entercom Communications has just done the same thing, signaling that its integration of former CBS Radio stations is finally starting to reap dividends for the company.

Adjusted net income of $4.41 million was seen, swinging from an adjusted net loss of $669,000 in Q1 2018.

On a per-share basis, Entercom’s adjusted net income was 3 cents, compared to flat income a year ago.

This reflects adjustments for restructuring costs and pretax expenses, and that’s what Wall Street analysts will be fixated on as Entercom’s stock is expected to rise across Tuesday’s trading.

In pre-market trading, ETM was up 1.9% to $6.89.

With net revenue climbing to $309 million from $300.6 million, and operating income jumping to $30.4 million from $5.69 million thanks to the addition of the former CBS Radio stations, Entercom is now delivering what many industry observers believed could be seen within weeks, rather than months.

“Our transformational investments in new products and capabilities and the hard work of our team are beginning to pay off as we capitalize on our scale and the abundant growth opportunities in audio,” Entercom President/CEO David Field said ahead of a 10am Eastern conference call with analysts.

Adjusted EBITDA increased to $42.66 million from $30.08 million.

Importantly, total operating expenses were down to $278.6 million, from $294.9 million. Also down: Station Expenses, moving to $247.57 million from $253.77 million.

If that weren’t enough, Field is already pumped up about Entercom’s projections for the second quarter of 2019.

“Second quarter revenues are pacing up by more than 4%, and we are excited about our progress across multiple areas of the business and by the dynamic future ahead,” Field said.

In Q1, Entercom engaged in an asset swap with Cumulus Media that brings Field & Co. Country WNSH-FM 94.7 in New York, as well as two stations in Springfield, Ma., in exchange of three stations in Indianapolis.

But, it also completed the sale of “surplus land,” buildings and towers associated with the CBS Radio merger. Redunancy was turned into revenue, with $25 million in cash earned from the real estate deals. This was immediately applied to Entercom’s $180 million outstanding balance on its revolving credit facility.

As of March 31, Entercom had outstanding $1.292 billion of senior debt under its credit
facilities and $400 million in senior notes (both amounts exclude unamortized premium from purchase price accounting).

Entercom has $68 million in cash at the ready.

On a non-adjusted basis, Entercom saw net income of $3.125 billion (2 cents per diluted share), compared to a Q1 2018 net loss of $13.88 million (10 cents).

The EPS beat Wall Street estimates by a penny, while revenue was in line with analyst predictions.

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