Entercom Communications did some major format flips in 2011, betting that putting established AM Sports formats on FM signals would pay off in the long run. But in the short run that meant the company said goodbye to some ad buys. Couple that with the lack of political advertising and Entercom is expected to report Tuesday (2/28) that revenues were down in Q4.
When he reported Q3 results in November, CEO David Field told analysts that Q4 was pacing down 5%. But he also noted that excluding the format flips in Boston and San Francisco and the impact of political advertising in all markets, the quarter was pacing up 3%. Now we’ll find out how the quarter came out.
Here’s what Wells Fargo Securities high yield bond analysts Bishop Cheen and Davis Hebert are expecting to hear from Field:
“We are looking for Entercom to report Q4 revenue of $97.5 million, down 4.5% year-over-year, and EBITDA of $30.2 million, 11.6% lower than the prior year. On the company’s Q3 earnings call, management said the quarter was pacing down 5%, reflecting both the loss of political and format changes in San Francisco and Boston, two of Entercom’s largest market clusters; excluding those two items, pacings were up 3%, reflecting a modestly positive core advertising environment,” the analysts said.
And being bond analysts, they added some insights on leverage: “As shown in our relative value sheets and capital structure tables, Entercom recapitalized its balance sheet in November 2011 with a slightly higher debt load; therefore, we think leverage could be slightly higher at 6.2x.”