Jeff Smulyan noted the painful loss of assets over the recent past, and proudly announced the retirement of a great big pile of debt. He said, “We face the future with assets that we think are very good.” He believes Emmis has weathered the storm.
Smulyan expects the company to improve with the economy. He said April has been good, as is May.
He also touted his pet project, FM radio on cell phones. He said the process has proceeded to the point where discussions with wireless carriers are taking place. He thinks a successful outcome will be “transformative” for the entire radio industry.
Smulyan said that the current form of Emmis may be smaller, but it is based on long and hard thought and strategic planning. He said it’s kept its strongest brands and core assets, and will have the opportunity for market and develop them. He believes the company is poised well for the future, and will proceed with conservatively managed balance sheets now that they have been fixed.
The fiscal year and Q1 results ending 2/28/12 were impacted by the sale of controlling rights in Chicago stations to Merlin. Q4 revenues experienced a drop of 11%, but if the Chicago situation is excluded, the loss was only 3%. The plus side of the change in the company’s Chicago situation is a decrease in operating expense.
For the fiscal year, radio revenue was down 7.9% and publishing was down 0.4%, resulting in a total drop of -5.9% to $236M.
The company outperformed the competition in Los Angeles, Indianapolis and lagged behind in New York, St. Louis and Austin for the year. In total, results were just about flat with overall market performance.
Emmis is expecting to bring in $75M via its LMA of WRKS-FM to ESPN, which will be used to pay down debt, including zeroing out its revolver. In addition, it is selling the WRKS intellectual property to YMF Media for $10M.