Debt Swap For Entercom Comes With Tantalizing Q1 Tease


In exactly one week, all will be officially known regarding Entercom Communications’ Q1 2019 financial results. They are expected to be positive.

Why wait a week to let those shiny, happy numbers catapult a languishing stock forward? The company late Monday took a moment to share its preliminary Q1 results in an SEC filing confirming the launch of a $300 million debt offering.

It worked. Entercom stock was on the rise in midday trading on NYSE, moving ahead by 1.1% to $6.21 as of 11:30am Eastern. At the Closing Bell, ETM was up $0.19, to $6.33.

With a 1-year target estimate of $8.75, ETM may still be viewed as a bargain investment by many. Should Entercom’s positive financial results for Q1 ring true and Q2 pacings prove accurate, ETM could very well reach that year-end target ahead of schedule.

Entercom told the SEC that it expects its Q1 revenue to fall between $308 million and $310 million, while net income will fall between $1.3 million and $5.3 million—a $4 million range that Entercom’s numbers crunchers are still fine-tuning.

Adjusted EBITDA is expected to be between $41.7 million and $43.7 million.

Meanwhile, Entercom during Q1 earned $24.5 million from asset sales that went toward repaying $180 million in borrowings under its revolving credit facility.

The good news: As of March 31, there was no balance on Entercom’s revolving credit facility, excluding undrawn letters of credit, and the company had $68.3 million in cash on hand.

PriceWaterhouseCoopers LLP now needs to verify Entercom’s bookkeeping before it releases its official Q1 numbers.

Meanwhile, Entercom tells the SEC that Q2 pacings are up by more than 4% as of April 18, compared to the same period in 2018.

The financial news, however, overshadows a plan by Entercom to refinance its debt with a $300 million offering of senior secured second-lien notes due 2027.

Moody’s assigned a “B2” rating to the new senior secured second lien notes, and noted that its outlook on Entercom is stable.