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Form 8-K EMMIS COMMUNICATIONS For: May 07

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May 7, 2015 6:02 AM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): May 7, 2015

EMMIS COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its
charter)

INDIANA
(State of incorporation or organization)

0-23264
(Commission file number)

35‑1542018
(I.R.S. Employer
Identification No.)

ONE EMMIS PLAZA
40 MONUMENT CIRCLE
SUITE 700
INDIANAPOLIS, INDIANA 46204
(Address of principal executive offices)

(317) 266-0100
(Registrant’s Telephone Number,
Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02
Results of Operations and Financial Condition

On May 7, 2015, Emmis Communications Corporation (the “Company”) issued a press release discussing its results of operations and financial condition as of and for the fiscal year ended February 28, 2015.
 
A copy of the press release is attached as Exhibit 99.1 and incorporated in this item by reference. The information in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed to be incorporated by reference in any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01
Financial Statements and Exhibits.
(c)     Exhibits.
Exhibit No.
Document Description
99.1
Press Release dated May 7, 2015



Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
 
 
 
EMMIS COMMUNICATIONS CORPORATION
Date: May 7, 2015
 
 
 
 
 
By:
/s/ J. Scott Enright
 
 
 
   J. Scott Enright, Executive Vice President,
 
 
 
  General Counsel and Secretary

                            






For Immediate Release
Thursday, May 7, 2015
Contacts: Ryan Hornaday, SVP/Finance & Treasurer
Patrick Walsh, CFO/COO, [email protected]
317.266.0100

Emmis Announces Fourth Quarter and Full-Year Earnings
Emmis Radio Stations Up 1% against Markets Down 3%

Indianapolis... Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its fourth fiscal quarter and full-year ending February 28, 2015.

Emmis’ radio net revenues for the fourth fiscal quarter were $38.8 million, up from $32.3 million from the prior year, an increase of 20%. On a pro forma basis, Emmis’ revenues reported to Miller Kaplan in the markets where Emmis competes (excluding barter and syndication revenue) were up 0.8% in markets down 2.5%.

For the full year, radio revenues were $176.3 million, compared to $145.3 million in the prior year, an increase of 21%. On a pro forma basis, Emmis’ revenues reported to Miller Kaplan in the markets where Emmis competes (excluding barter and syndication revenue) were up 1.6% in markets down 3.7%.

February marked the 15th consecutive month in which Emmis outperformed the markets in which it competes. Every measured Emmis market outperformed for full year fiscal 2015. Emmis stations in New York, Los Angeles and Austin all outperformed their markets in the fourth fiscal quarter.

“Despite weakened markets and a challenged industry, Emmis once again outperformed. The radio industry needs a catalyst for growth, and we are convinced we have it with NextRadio, the Emmis-developed free smartphone app that marries over-the-air local FM broadcasts with visual and interactive features,” Jeff Smulyan, President & CEO of Emmis said.

The radio industry’s consumer awareness campaign for NextRadio has had remarkable results, further validating the promotional power of radio.

“Consumers exposed to NextRadio overwhelmingly love it,” Smulyan said. “Average Time Spent Listing (ATSL) per session on NextRadio is nearly double traditional listening, all major radio companies are supporting the effort, and we are adding 350,000 activations each month. The momentum is tremendous.”

Station operating income (SOI) during the quarter was $6.7 million, compared to $6.9 million for the same quarter of the prior year. For the full year, SOI was $53.4 million, compared to $48.3 million in the prior year.

During the fourth fiscal quarter, Emmis recorded noncash impairment losses totaling $74.6 million ($6.7 million of which is reflected in other (expense), income, net) and recorded a full valuation allowance against its deferred tax assets. These noncash impairment charges and the valuation allowance have no impact on Emmis’ cash flows, debt compliance, or ongoing operations.

A conference call regarding earnings will be hosted today at 9 a.m. Eastern by dialing 1-517-623-4891.  Questions may be submitted via email to [email protected]. A digital playback of the call will be available until 6 p.m. on Thursday, May 21 by dialing 203-369-0390.

Emmis has included supplemental pro forma net revenues, station operating expenses, and certain other financial data on its website, www.emmis.com under the “Investors” tab.

Emmis generally evaluates the performance of its operating entities based on station operating income. Management believes that station operating income is useful to investors because it provides a meaningful comparison of operating performance between companies in the industry and serves as an indicator of the market




value of a group of stations or publishing entities. Station operating income is generally recognized by the broadcast and publishing industries as a measure of performance and is used by analysts who report on the performance of broadcasting and publishing groups. Station operating income does not take into account Emmis' debt service requirements and other commitments, and, accordingly, station operating income is not necessarily indicative of amounts that may be available for dividends, reinvestment in Emmis' business or other discretionary uses.

Station operating income is not a measure of liquidity or of performance, in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on the basis of accounting principles generally accepted in the United States. Operating Income is the most directly comparable financial measure in accordance with accounting principles generally accepted in the United States.

Moreover, station operating income is not a standardized measure and may be calculated in a number of ways. Emmis defines station operating income as revenues net of agency commissions and station operating expenses, excluding depreciation, amortization and non-cash compensation. A reconciliation of station operating income to operating income is attached to this press release.

The information in this news release is being widely disseminated in accordance with the Securities & Exchange Commission's Regulation FD.

Emmis Communications - Great Media, Great People, Great Service®
About Emmis Communications
Emmis Communications Corporation is a diversified media company, principally focused on radio broadcasting. Emmis operates the 9th largest radio portfolio in the United States based on total listeners. Emmis owns 19 FM and 4 AM radio stations in New York, Los Angeles, St. Louis, Austin (Emmis has a 50.1% controlling interest in Emmis’ radio stations located there), Indianapolis and Terre Haute, IN. 

Note: Certain statements included in this press release which are not statements of historical fact, including but not limited to those identified with the words “expect,” “will” or “look” are intended to be, and are, by this Note, identified as “forward-looking statements,” as defined in the Securities and Exchange Act of 1934, as amended. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others:
• general economic and business conditions;
• fluctuations in the demand for advertising and demand for different types of advertising media;
•our ability to service our outstanding debt;
• competition from new or different technologies;
• increased competition in our markets and the broadcasting industry including our competitors changing the format of a station they operate
•to more directly compete with a station we operate in the same market;
•our ability to attract and secure programming, on-air talent, writers and photographers;
•inability to obtain (or to obtain timely) necessary approvals for purchase or sale transactions or to complete the transactions for other reasons
•generally beyond our control;
• increases in the costs of programming, including on-air talent;
•inability to grow through suitable acquisitions or to consummate dispositions;
• changes in audience measurement systems
• new or changing regulations of the Federal Communications Commission or other governmental agencies;
• war, terrorist acts or political instability; and
• other factors mentioned in documents filed by the Company with the Securities and Exchange Commission.

Emmis does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise





EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited, amounts in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
Three months ended February 28,
 
Year ended February 28,
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
OPERATING DATA:
 
 
 
 
 
 
 
 
  Net revenues:
 
 
 
 
 
 
 
 
    Radio
 
$
38,757

 
$
32,309

 
$
176,250

 
$
145,276

    Publishing
 
14,445

 
14,612

 
61,142

 
59,747

    Emerging Technologies
 
228

 
51

 
546

 
123

      Total net revenues
 
53,430

 
46,972

 
237,938

 
205,146

Station operating expenses excluding depreciation and amortization expense and LMA fees:
 
 
 
 
 
 
 
 
    Radio
 
29,954

 
24,831

 
117,167

 
97,564

    Publishing
 
15,625

 
15,315

 
60,083

 
59,085

    Emerging Technologies
 
1,271

 
665

 
3,759

 
2,360

Total station operating expenses excluding depreciation and amortization expense and LMA fees
 
46,850

 
40,811

 
181,009

 
159,009

Corporate expenses excluding depreciation and amortization expense
 
3,450

 
3,901

 
14,922

 
17,024

  LMA fees
 
—

 
—

 
4,208

 
—

  Hungary license litigation and related expenses
 
49

 
263

 
521

 
2,058

  Depreciation and amortization
 
1,500

 
1,259

 
5,926

 
4,866

  Impairment loss
 
67,915

 
—

 
67,915

 
—

  Gain on contract settlement
 
—

 
—

 
(2,500
)
 
—

  Loss (gain) on disposal of assets
 
—

 
2

 
—

 
(8
)
  Operating (loss) income
 
(66,334
)
 
736

 
(34,063
)
 
22,197

  Interest expense
 
(5,228
)
 
(1,627
)
 
(17,101
)
 
(7,068
)
  Loss on debt extinguishment
 
—

 
—

 
(1,455
)
 
(653
)
  Other (expense) income, net
 
(6,648
)
 
22

 
(6,418
)
 
116

  (Loss) Income before income taxes
 
(78,210
)
 
(869
)
 
(59,037
)
 
14,592

  Provision (benefit) for income taxes
 
27,868

 
(34,974
)
 
36,948

 
(34,063
)
  Consolidated net (loss) income
 
(106,078
)
 
34,105

 
(95,985
)
 
48,655

Net (loss) income attributable to noncontrolling interests
 
(280
)
 
944

 
3,274

 
5,174

  Net (loss) income attributable to the Company
 
(105,798
)
 
33,161

 
(99,259
)
 
43,481

  Gain on extinguishment of preferred stock
 
—

 
—

 
—

 
325

Net (loss) income attributable to common shareholders
 
$
(105,798
)
 
$
33,161

 
$
(99,259
)
 
$
43,806

 
 
 
 
 
 
 
 
 
     Basic net income per common share
 
$
(2.47
)
 
$
0.82

 
$
(2.33
)
 
$
1.08

     Diluted net income per common share
 
$
(2.47
)
 
$
0.71

 
$
(2.33
)
 
$
0.94

 
 
 
 
 
 
 
 
 
     Basic weighted average shares outstanding
 
42,818

 
40,682

 
42,537

 
40,506

     Diluted weighted average shares outstanding
 
42,818

 
46,606

 
42,537

 
46,042

 
 
 
 
 
 
 
 
 




 
 
Three months ended February 28,
 
Year ended February 28,
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
OTHER DATA:
 
 
 
 
 
 
 
 
  Station operating income (See below)
 
$
6,747

 
$
6,927

 
$
53,441

 
$
48,373

  Cash paid for (refund from) income taxes, net
 
—

 
112

 
243

 
(903
)
  Cash paid for interest
 
3,722

 
1,468

 
9,781

 
6,289

  Capital expenditures
 
949

 
780

 
3,514

 
3,057

 
 
 
 
 
 
 
 
 
 Noncash compensation by segment:
 
 
 
 
 
 
 
 
           Radio
 
$
59

 
$
497

 
$
434

 
$
1,477

           Publishing
 
108

 
269

 
286

 
759

           Corporate & Emerging Technologies
 
518

 
565

 
2,093

 
2,648

                  Total
 
$
685

 
$
1,331

 
$
2,813

 
$
4,884

 
 
 
 
 
 
 
 
 
COMPUTATION OF STATION OPERATING INCOME:
 
 
 
 
 
 
 
 
  Operating (loss) income
 
$
(66,334
)
 
$
736

 
$
(34,063
)
 
$
22,197

  Plus: Depreciation and amortization
 
1,500

 
1,259

 
5,926

 
4,866

  Plus: Hungary litigation expense and related costs
 
49

 
263

 
521

 
2,058

  Plus: Corporate expenses
 
3,450

 
3,901

 
14,922

 
17,024

  Plus: Station noncash compensation
 
167

 
766

 
720

 
2,236

  Plus: Impairment loss
 
67,915

 
—

 
67,915

 
—

  Less: Gain on contract settlement
 
—

 
—

 
(2,500
)
 
—

  Less: Loss (gain) on sale of assets
 
—

 
2

 
—

 
(8
)
  Station operating income
 
$
6,747

 
$
6,927

 
$
53,441

 
$
48,373

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET INFORMATION:
 
February 28, 2015
 
February 28, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Cash and Cash Equivalents
 
$
3,669

 
$
5,304

 
 
 
 
Credit Agreement Debt
 
$
193,000

 
$
54,000

 
 
 
 
98.7FM Nonrecourse Debt
 
$
70,401

 
$
74,942

 
 
 
 




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