‘Difficult But Necessary Decisions’ Mark Of Emmis’ Fiscal Q1


Emmis Communications made “decisions that give us additional flexibility to address market challenges and opportunities,” Chairman and CEO Jeff Smulyan said this morning as the radio company that owns TagStation and NextRadio reported its fiscal 2018 Q1 results.

How did Emmis do? The title of a Marian Hill hit record comes to mind.

Emmis was down in the first three months of fiscal 2018, with total net revenue of $40.2 million, compared to $56 million in fiscal Q1 of 2017.

As a result, Emmis swung from net income of $2.69 million (23 cents per basic and diluted share) to a net loss of $267,000 (-2 cents).

Station Operating Income was off, too, coming in at $9.1 million, compared to $13.4 million in fiscal Q1 of 2017.

Furthermore, total cash and equivalents for Emmis as of May 31 was just $2.19 million. This compares to $11.35 million as of Feb. 28, 2017.

Commenting on the results, Smulyan said Emmis “made difficult but necessary decisions” in its fiscal Q1. But, the good news is that the company’s fiscal Q2 looks great.

“Our second fiscal quarter started strong, with June up 5% as record-setting ticket sales for our largest concert, Summer Jam in New York, provided a nice boost. While early, both July and August are showing that our performance is improving.”

How are investors reacting on Wall Street? As of 10:30am Eastern EMMS shares were off 1.4%, to $2.78.

Emmis’ radio net revenues for the first fiscal quarter comprise the bulk of the company’s income, and they came in at $38.7 million—down from $42.7 million in fiscal Q1 2017.

Excluding KPWR-FM “Power 106” in Los Angeles, which has been sold to Meruelo Group for $82.75 million, Emmis’ radio revenues per Miller Kaplan (which excludes barter and syndication revenues as well as the radio stations in Terre Haute, Ind.,sold in the prior fiscal year), were down 6.7% in markets that were down 1.4% overall.

Meruelo began operating Power 106 via an LMA on July 1; initial FCC approval of the license transfer to the Meruelo Group has been received, with closing expected to occur in the next 30-60 days.

Once the sale of Power 106 closes, the company’s senior credit facility debt will be reduced by approximately 50%.

Meanwhile, Emmis notes that its Austin and St. Louis clusters outperformed their markets.