Q1 Digital Advertising Net Revenue Increased
15.4% YOY
Digital Revenue Represents 54% of Q1 Total Net
Revenue
PURCHASE, N.Y., May 10, 2023
/PRNewswire/ -- Townsquare Media, Inc. (NYSE: TSQ) ("Townsquare",
the "Company," "we," "us," or "our") announced today its financial
results for the first quarter ended March 31, 2023.
"I am pleased to share that Townsquare's first quarter results
exceeded our previously issued guidance for both net revenue and
Adjusted EBITDA, due primarily to the continued strength of our
digital and local advertising platform and solutions. In the first
quarter, net revenue increased +3% year-over-year to $103 million, and Adjusted EBITDA decreased -12%
year-over-year to $19 million.
Although we faced the same headwinds that have impacted the entire
media sector, our first quarter results validate our Digital First
Local Media strategy, with a focus exclusively on local markets
outside of the Top 50. Digital Advertising was once again our
largest driver of growth, increasing net revenue by +15%
year-over-year in the first quarter. In total, first quarter
Digital net revenue increased +8% year-over-year (representing 54%
of our total Q1 net revenue) and total Digital Adjusted Operating
Income increased +8% year-over year (representing 63% of our total
Q1 Adjusted Operating Income)," commented Bill Wilson, Chief Executive Officer of
Townsquare Media, Inc. "In the first quarter, we grew cash flow
from operations to $9 million, due to
the strong cash generation of many of our assets, and
opportunistically repurchased more than $12
million of our Unsecured Senior Notes at a discount. We
ended the quarter with a strong cash balance of $42 million, and maintained our all-time low net
leverage multiple of 4.29x."
Mr. Wilson continued, "Our growth engine has been and will
continue to be our digital solutions. We believe that our Digital
First business model and strategy position us to navigate the
current macro-economic environment better than most, and that our
revenue, profit and cash flow results will be among the best in the
local media industry, particularly when compared to 2019 pre-COVID
financials given our growth in revenue and profit since 2019. Our
confidence is directly tied to the Townsquare team's efforts and
talent, as well as our large, growing, and profitable digital
platform which contributes more than half of Townsquare's total net
revenue and profit."
The Company announced today that its Board of Directors approved
a quarterly cash dividend of $0.1875
per share. The dividend will be payable on August 1, 2023 to shareholders of record as of
the close of business on June 30,
2023.
Segment Reporting
We have three reportable operating
segments, Subscription Digital Marketing Solutions, Digital
Advertising and Broadcast Advertising. The Subscription Digital
Marketing Solutions segment includes our subscription digital
marketing solutions business, Townsquare Interactive. The Digital
Advertising segment, marketed externally as Townsquare Ignite,
includes digital advertising on our owned and operated digital
properties, our first party data digital management platform and
our digital programmatic advertising platform. The Broadcast
Advertising segment includes our local, regional, and national
advertising products and solutions delivered via terrestrial radio
broadcast, and other miscellaneous revenue that is associated with
our broadcast advertising platform. The remainder of our business
is reported in the Other category, which includes our live events
business.
First Quarter Highlights*
- As compared to the first quarter of 2022:
-
- Net revenue increased 2.9%
- Net income decreased $4.7
million
- Adjusted EBITDA decreased 11.9%
- Total Digital net revenue increased 8.2%
-
- Subscription Digital Marketing Solutions ("Townsquare
Interactive") net revenue decreased 1.3%
- Digital Advertising net revenue increased 15.4%
- Total Digital Adjusted Operating Income increased 7.6%
-
- Subscription Digital Marketing Solutions Adjusted Operating
Income decreased 12.2%
- Digital Advertising Adjusted Operating Income increased
22.9%
- Broadcast Advertising net revenue decreased 4.8%
- Diluted loss per share was $(0.14), and Adjusted Net Income per diluted
share was $0.08
- Repurchased aggregate $12.2
million of our 2026 Secured Senior Notes below par
*See below for discussion of non-GAAP measures.
Guidance
For the second quarter of 2023, net revenue
is expected to be between $120
million and $122 million
(-1.6% to +0.1% as compared to the prior year), and Adjusted EBITDA
is expected to be between $28 million
and $29 million.
For the full year 2023, net revenue guidance is reaffirmed to be
between approximately $450 million
and $470 million (-2.8% to +1.5% as
compared to the prior year), and Adjusted EBITDA guidance is
reaffirmed to be between approximately $100
million and $110 million.
Quarter Ended March 31, 2023 Compared to the Quarter
Ended March 31, 2022
Net Revenue
Net revenue for the three months ended
March 31, 2023 increased $2.9 million, or 2.9%, to $103.1 million as compared to $100.2 million in the same period in 2022.
Digital Advertising net revenue increased $4.5 million, or 15.4%, and Subscription Digital
Marketing Solutions net revenue decreased $0.3 million, or 1.3%, as compared to the same
period in 2022. Broadcast Advertising net revenue decreased
$2.3 million, or 4.8%, as compared to
the same period in 2022. Other net revenue increased $1.0 million due to an increase in the number of
live events. Excluding political revenue of $0.2 million and $0.4
million for the three months ended March 31, 2023 and 2022, respectively, net
revenue increased $3.1 million, or
3.1%, to $102.9 million, Digital
Advertising net revenue increased $4.5
million, or 15.5%, to $33.7
million, and Broadcast Advertising net revenue decreased
$2.1 million, or 4.4%, to
$45.7 million.
Net Loss
For the quarter ended March 31, 2023, we
reported a net loss of $1.9 million, as compared to net income of
$2.7 million in the same period
last year, primarily due to non-cash impairment charges to our FCC
licenses. Adjusted Net Income decreased $2.3 million, primarily due to a
$4.6 million increase in direct
operating expenses to support the growth of our digital segments
and higher compensation, partially offset by a $2.9 million increase in net revenue.
Adjusted EBITDA
Adjusted EBITDA for the three months
ended March 31, 2023 decreased
$2.6 million, or 11.9%, to
$19.4 million, as compared to
$22.1 million in the same period last
year. Adjusted EBITDA (Excluding Political) decreased $2.4 million, or 11.3%, to $19.3 million, as compared to $21.7 million in the same period last year.
Liquidity and Capital Resources
As of March 31,
2023, we had a total of $41.8 million of cash and cash equivalents
and $518.6 million of
outstanding indebtedness, representing 4.67x and 4.29x gross and
net leverage, respectively, based on Adjusted EBITDA for the twelve
months ended March 31, 2023, of $111.1
million.
The table below presents a summary, as of May 5, 2023, of
our outstanding common stock.
Security
|
|
Number
Outstanding
|
|
Description
|
Class A common
stock
|
|
13,224,007
|
|
One vote per
share.
|
Class B common
stock
|
|
815,296
|
|
10 votes per
share.1
|
Class C common
stock
|
|
3,461,341
|
|
No
votes.1
|
Total
|
|
17,500,644
|
|
|
1 Each share
converts into one share of Class A common stock upon transfer or at
the option of the holder, subject to certain conditions, including
compliance with FCC rules.
|
Conference Call
Townsquare Media, Inc. will host a
conference call to discuss certain first quarter 2023 financial
results and 2023 guidance on Wednesday, May 10, 2023 at
8:00 a.m. Eastern Time. The
conference call dial-in number is 1-888-886-7786 (U.S. &
Canada) or 1-416-764-8658
(International) and the confirmation code is 63395425. A live
webcast of the conference call will also be available on the
investor relations page of the Company's website at
www.townsquaremedia.com.
A replay of the conference call will be available through
May 17, 2023. To access the replay,
please dial 1-844-512-2921 (U.S. and Canada) or 1-412-317-6671 (International) and
enter confirmation code 63395425. A web-based archive of the
conference call will also be available at the above website.
About Townsquare Media, Inc.
Townsquare is a
community-focused digital media and digital marketing solutions
company with market leading local radio stations, principally
focused outside the top 50 markets in the U.S. Our assets include a
subscription digital marketing services business, Townsquare
Interactive, providing website design, creation and hosting,
search engine optimization, social media and online reputation
management as well as other digital monthly services for
approximately 30,400 SMBs; a robust digital advertising division,
Townsquare Ignite, a powerful combination of a) an owned and
operated portfolio of more than 400 local news and entertainment
websites and mobile apps along with a network of leading national
music and entertainment brands, collecting valuable first party
data and b) a proprietary digital programmatic advertising
technology stack with an in-house demand and data management
platform; and a portfolio of 356 local terrestrial radio
stations in 74 U.S. markets strategically situated outside the Top
50 markets in the United States.
Our portfolio includes local media brands such as WYRK.com,
WJON.com and NJ101.5.com, and premier national music
brands such as XXLmag.com, TasteofCountry.com,
UltimateClassicRock.com, and Loudwire.com. For more
information, please visit www.townsquaremedia.com,
www.townsquareinteractive.com and www.townsquareignite.com.
Forward-Looking Statements
Except for the historical
information contained in this press release, the matters addressed
are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements often discuss our current expectations and projections
relating to our financial condition, results of operations, plans,
objectives, future performance and business. You can identify
forward-looking statements by the fact that they do not relate
strictly to historical or current facts. These statements may
include words such as "aim," "anticipate," "estimate," "expect,"
"forecast," "outlook," "potential," "project," "projection,"
"plan," "intend," "seek," "believe," "may," "could," "would,"
"will," "should," "can," "can have," "likely," the negatives
thereof and other words and terms. Actual events or results may
differ materially from the results anticipated in these
forward-looking statements as a result of a variety of factors.
While it is impossible to identify all such factors, factors that
could cause actual results to differ materially from those
estimated by us include the impact of general economic conditions
in the United States, or in the
specific markets in which we currently do business including
supply chain disruptions, inflation, labor shortages and the effect
on advertising activity, industry conditions, including existing
competition and future competitive technologies, the popularity of
radio as a broadcasting and advertising medium, cancellations,
disruptions or postponements of advertising schedules in response
to national or world events, including the COVID-19 pandemic,
our ability to develop and maintain digital technologies and hire
and retain technical and sales talent, our dependence on key
personnel, our capital expenditure requirements, our continued
ability to identify suitable acquisition targets, and consummate
and integrate any future acquisitions, legislative or
regulatory requirements, risks and uncertainties relating to our
leverage and changes in interest rates, our ability to obtain
financing at times, in amounts and at rates considered appropriate
by us, our ability to access the capital markets as and when needed
and on terms that we consider favorable to us and other
factors discussed in this section entitled "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in
this report and under "Risk Factors" in our 2022 Annual Report on
Form 10-K, for the year ended December 31,
2022, filed with the SEC on March 16,
2023, as well as other risks discussed from time to time in
our filings with the SEC. Many of these factors are beyond our
ability to predict or control. In addition, as a result of these
and other factors, our past financial performance should not be
relied on as an indication of future performance. The cautionary
statements referred to in this section also should be considered in
connection with any subsequent written or oral forward-looking
statements that may be issued by us or persons acting on our
behalf. The forward-looking statements included in this report are
made only as of the date hereof or as of the date specified herein.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Non-GAAP Financial Measures and Definitions
In this
press release, we refer to Adjusted Operating Income, Adjusted
EBITDA, Adjusted EBITDA (Excluding Political), Adjusted Net (Loss)
Income and Adjusted Net Income Per Share which are financial
measures that have not been prepared in accordance with generally
accepted accounting principles in the
United States ("GAAP").
We define Adjusted Operating Income as operating income before
the deduction of depreciation and amortization, stock-based
compensation, corporate expenses, transaction costs, business
realignment costs, impairment of intangibles and long-lived assets,
and net (gain) loss on sale and retirement of assets. We define
Adjusted EBITDA as net income before the deduction of income taxes,
interest expense, net, gain on repurchases of debt, transaction and
business realignment costs, depreciation and amortization,
stock-based compensation, impairment of intangible and long-lived
assets, net loss (gain) on sale and retirement of assets and other
expense (income) net. We define Adjusted EBITDA (Excluding
Political) as Adjusted EBITDA less political net revenue, net of a
fifteen percent deduction to account for estimated national
representative firm fees, music licensing fees and sales
commissions expense. Adjusted Net Income is defined as net income
before the deduction of transaction and business realignment costs,
impairment of intangible and long-lived assets, change in fair
value of investment, net (gain) loss on sale and retirement of
assets, gain on repurchases of debt, gain on sale of digital
assets, gain on insurance recoveries and net income attributable to
non-controlling interest, net of income taxes. Adjusted Net Income
Per Share is defined as Adjusted Net Income divided by the weighted
average shares outstanding. We define Net Leverage as our total
outstanding indebtedness, net of our total cash balance as of
March 31, 2023, divided by our Adjusted EBITDA for the twelve
months ended March 31, 2023. These measures do not represent,
and should not be considered as alternatives to or superior to,
financial results and measures determined or calculated in
accordance with GAAP. In addition, these non-GAAP measures are not
based on any comprehensive set of accounting rules or principles.
You should be aware that in the future we may incur expenses or
charges that are the same as or similar to some of the adjustments
in the presentation, and we do not infer that our future results
will be unaffected by unusual or non-recurring items. In addition,
these non-GAAP measures may not be comparable to similarly-named
measures reported by other companies.
We use Adjusted Operating Income to evaluate the operating
performance of our business segments. We use Adjusted EBITDA and
Adjusted EBITDA (Excluding Political) to facilitate
company-to-company operating performance comparisons by backing out
potential differences caused by variations in capital structures
(affecting interest expense), taxation and the age and book
depreciation of facilities and equipment (affecting relative
depreciation expense), which may vary for different companies for
reasons unrelated to operating performance, and to facilitate year
over year comparisons, by backing out the impact of political
revenue which varies depending on the election cycle and may be
unrelated to operating performance. We use Adjusted Net Income and
Adjusted Net Income Per Share to assess total company operating
performance on a consistent basis. We use Net Leverage to measure
the Company's ability to handle its debt burden. We believe that
these measures, when considered together with our GAAP financial
results, provide management and investors with a more complete
understanding of our business operating results, including
underlying trends, by excluding the effects of transaction costs,
net (gain) loss on sale and retirement of assets, business
realignment costs and certain impairments. Further, while
discretionary bonuses for members of management are not determined
with reference to specific targets, our board of directors may
consider Adjusted Operating Income, Adjusted EBITDA, Adjusted
EBITDA (Excluding Political), Adjusted Net Income, Adjusted Net
Income Per Share, and Net Leverage when determining discretionary
bonuses.
Investor Relations
Claire Yenicay
(203) 900-5555
investors@townsquaremedia.com
TOWNSQUARE MEDIA, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(in Thousands,
Except Share and Per Share Data)
|
(unaudited)
|
|
|
March
31,
2023
|
|
December
31,
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$
41,768
|
|
$
43,417
|
Accounts receivable,
net of allowance of $5,469 and $5,946, respectively
|
55,288
|
|
61,234
|
Prepaid
expenses and other current assets
|
12,476
|
|
16,037
|
Total current
assets
|
109,532
|
|
120,688
|
Property and equipment,
net
|
111,873
|
|
113,846
|
Intangible assets,
net
|
264,629
|
|
276,838
|
Goodwill
|
161,481
|
|
161,385
|
Investments
|
18,971
|
|
19,106
|
Operating lease
right-of-use assets
|
50,032
|
|
50,962
|
Other assets
|
1,038
|
|
1,197
|
Restricted
cash
|
497
|
|
496
|
Total
assets
|
$
718,053
|
|
$
744,518
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
4,035
|
|
$
4,127
|
Deferred
revenue
|
11,933
|
|
10,669
|
Accrued
compensation and benefits
|
8,335
|
|
14,831
|
Accrued expenses
and other current liabilities
|
24,464
|
|
17,876
|
Operating lease
liabilities, current
|
8,932
|
|
9,008
|
Accrued
interest
|
5,945
|
|
15,203
|
Total current
liabilities
|
63,644
|
|
71,714
|
Long-term debt, net of
deferred finance costs of $5,761 and $6,324,
respectively
|
512,844
|
|
524,442
|
Deferred tax
liability
|
16,982
|
|
18,748
|
Operating lease
liability, net of current portion
|
44,214
|
|
45,107
|
Other long-term
liabilities
|
14,341
|
|
15,428
|
Total
liabilities
|
652,025
|
|
675,439
|
Stockholders'
equity:
|
|
|
|
Class A common stock,
par value $0.01 per share; 300,000,000 shares authorized;
13,117,307 and 12,964,312
shares issued and outstanding, respectively
|
131
|
|
130
|
Class B common stock,
par value $0.01 per share; 50,000,000 shares authorized; 815,296
and 815,296 shares
issued and outstanding, respectively
|
8
|
|
8
|
Class C common stock,
par value $0.01 per share; 50,000,000 shares authorized; 3,461,341
and 3,461,341
shares issued and outstanding, respectively
|
35
|
|
35
|
Total
common stock
|
174
|
|
173
|
Additional
paid-in capital
|
311,877
|
|
309,645
|
Accumulated deficit
|
(250,062)
|
|
(244,298)
|
Non-controlling interest
|
4,039
|
|
3,559
|
Total stockholders'
equity
|
66,028
|
|
69,079
|
Total liabilities
and stockholders' equity
|
$
718,053
|
|
$
744,518
|
TOWNSQUARE MEDIA, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(in Thousands,
Except Per Share Data)
|
(unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2023
|
|
2022
|
Net revenue
|
$
103,110
|
|
$
100,242
|
Operating costs and
expenses:
|
|
|
|
Direct operating
expenses, excluding depreciation, amortization, and stock-based
compensation
|
78,324
|
|
73,763
|
Depreciation and
amortization
|
4,944
|
|
4,765
|
Corporate
expenses
|
5,345
|
|
4,409
|
Stock-based
compensation
|
1,772
|
|
869
|
Transaction and
business realignment costs
|
292
|
|
452
|
Impairment of
intangible and long-lived assets
|
8,487
|
|
478
|
Net gain on sale and
retirement of assets
|
(292)
|
|
(308)
|
Total operating costs and expenses
|
98,872
|
|
84,428
|
Operating income
|
4,238
|
|
15,814
|
Other expense
(income):
|
|
|
|
Interest expense,
net
|
9,558
|
|
10,027
|
Gain on repurchases of
debt
|
(775)
|
|
—
|
Other (income) expense,
net
|
(1,026)
|
|
1,588
|
(Loss)
income from operations before tax
|
(3,519)
|
|
4,199
|
Income tax (benefit)
provision
|
(1,578)
|
|
1,458
|
Net (loss)
income
|
$
(1,941)
|
|
$
2,741
|
|
|
|
|
Net (loss) income
attributable to:
|
|
|
|
Controlling
interests
|
$
(2,421)
|
|
$
2,224
|
Non-controlling
interests
|
$
480
|
|
$
517
|
|
|
|
|
Basic (loss) income
per share
|
$
(0.14)
|
|
$
0.13
|
|
|
|
|
Diluted (loss)
income per share
|
$
(0.14)
|
|
$
0.11
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
Basic
|
17,204
|
|
16,796
|
Diluted
|
17,204
|
|
19,509
|
|
|
|
|
Cash dividend declared
per share
|
$
0.1875
|
|
$
—
|
TOWNSQUARE MEDIA, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
Thousands)
|
(unaudited)
|
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
Net (loss)
income
|
$
(1,941)
|
|
$
2,741
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
4,944
|
|
4,765
|
Amortization of deferred
financing costs
|
425
|
|
418
|
Non-cash lease expense
(income)
|
41
|
|
(155)
|
Net deferred taxes and
other
|
(1,766)
|
|
1,284
|
Provision (benefit) for
doubtful accounts
|
1,323
|
|
(287)
|
Stock-based compensation
expense
|
1,772
|
|
869
|
Gain on repurchases of
debt
|
(775)
|
|
—
|
Trade activity,
net
|
(454)
|
|
(654)
|
Impairment of intangible and
long-lived assets
|
8,487
|
|
478
|
Realized gain on
sale of digital assets
|
(839)
|
|
—
|
Unrealized loss on
investment
|
134
|
|
1,508
|
Content rights
acquired
|
70
|
|
(9,635)
|
Amortization of content
rights
|
1,200
|
|
803
|
Change in content rights
liabilities
|
258
|
|
9,635
|
Other
|
(625)
|
|
(311)
|
Changes in assets and
liabilities, net of acquisitions:
|
|
|
|
Accounts
receivable
|
5,058
|
|
7,049
|
Prepaid expenses and
other assets
|
4,465
|
|
735
|
Accounts
payable
|
(22)
|
|
2,861
|
Accrued
expenses
|
(3,134)
|
|
(4,056)
|
Accrued
interest
|
(9,258)
|
|
(9,453)
|
Other long-term
liabilities
|
(8)
|
|
(29)
|
Net cash provided
by operating activities
|
9,355
|
|
8,566
|
Cash flows from
investing activities:
|
|
|
|
Payment for
acquisition
|
—
|
|
(1,650)
|
Purchase of property
and equipment
|
(3,639)
|
|
(2,765)
|
Purchase of digital
assets
|
—
|
|
(4,997)
|
Proceeds
from sale of digital assets
|
2,975
|
|
—
|
Proceeds from insurance
recoveries
|
—
|
|
11
|
Proceeds from sale of
assets and investment related transactions
|
493
|
|
593
|
Net cash used in
investing activities
|
(171)
|
|
(8,808)
|
Cash flows from
financing activities:
|
|
|
|
Repurchases of 2026
Notes
|
(11,248)
|
|
—
|
Proceeds from stock
options exercised
|
31
|
|
647
|
Withholdings for shares issued under the ESPP
|
430
|
|
—
|
Repayments of
capitalized obligations
|
(45)
|
|
(24)
|
Net cash (used in)
provided by financing activities
|
(10,832)
|
|
623
|
Cash and cash
equivalents and restricted cash:
|
|
|
|
Net (decrease)
increase in cash, cash equivalents and restricted
cash
|
(1,648)
|
|
381
|
Beginning of
period
|
43,913
|
|
50,999
|
End of
period
|
$
42,265
|
|
$
51,380
|
TOWNSQUARE MEDIA, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (continued)
|
(in
Thousands)
|
(unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2023
|
|
2022
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
Cash
payments:
|
|
|
|
Interest
|
$
18,728
|
|
$
18,909
|
Income
taxes
|
4
|
|
48
|
|
|
|
|
Supplemental
Disclosure of Non-cash Activities:
|
|
|
|
Dividends declared,
but not paid during the period
|
$
3,343
|
|
$
—
|
Investments acquired in exchange for
advertising(1)
|
—
|
|
250
|
Property
and equipment acquired in exchange for
advertising(1)
|
98
|
|
211
|
Accrued
capital expenditures
|
89
|
|
384
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information relating to
Leases:
|
|
|
|
Cash paid for amounts
included in the measurement of operating lease liabilities,
included in operating cash flows
|
$
3,029
|
|
$
2,546
|
Right-of-use assets
obtained in exchange for operating lease obligations
|
1,309
|
|
1,177
|
|
|
|
|
Reconciliation of
cash, cash equivalents and restricted cash
|
|
|
|
Cash and cash
equivalents
|
$
41,768
|
|
$
50,886
|
Restricted
cash
|
497
|
|
494
|
|
$
42,265
|
|
$
51,380
|
(1)
|
Represents total
advertising services provided by the Company in exchange for
property and equipment and equity interests acquired during each of
the three months ended March 31, 2023 and 2022,
respectively.
|
TOWNSQUARE MEDIA, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS BY SEGMENT
|
(in
Thousands)
|
(unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
|
|
2023
|
|
2022
|
|
%
Change
|
Subscription Digital
Marketing Solutions
|
$
21,561
|
|
$
21,850
|
|
(1.3) %
|
Digital
Advertising
|
33,707
|
|
29,218
|
|
15.4 %
|
Broadcast
Advertising
|
45,923
|
|
48,226
|
|
(4.8) %
|
Other
|
1,919
|
|
948
|
|
102.4 %
|
Net
revenue
|
103,110
|
|
100,242
|
|
2.9 %
|
Subscription Digital
Marketing Solutions Expenses
|
15,962
|
|
15,476
|
|
3.1 %
|
Digital Advertising
expenses
|
23,613
|
|
21,007
|
|
12.4 %
|
Broadcast Advertising
expenses
|
37,365
|
|
36,442
|
|
2.5 %
|
Other
expenses
|
1,384
|
|
838
|
|
65.2 %
|
Direct operating
expenses
|
78,324
|
|
73,763
|
|
6.2 %
|
Depreciation and
amortization
|
4,944
|
|
4,765
|
|
3.8 %
|
Corporate
expenses
|
5,345
|
|
4,409
|
|
21.2 %
|
Stock-based
compensation
|
1,772
|
|
869
|
|
103.9 %
|
Transaction and
business realignment costs
|
292
|
|
452
|
|
(35.4) %
|
Impairment of
intangible and long-lived assets
|
8,487
|
|
478
|
|
**
|
Net gain on sale and
retirement of assets
|
(292)
|
|
(308)
|
|
(5.2) %
|
Total operating costs and expenses
|
98,872
|
|
84,428
|
|
17.1 %
|
Operating income
|
4,238
|
|
15,814
|
|
(73.2) %
|
Other expense
(income):
|
|
|
|
|
|
Interest expense,
net
|
9,558
|
|
10,027
|
|
(4.7) %
|
Gain on repurchases of
debt
|
(775)
|
|
—
|
|
**
|
Other (income) expense,
net
|
(1,026)
|
|
1,588
|
|
(164.6) %
|
(Loss)
income from operations before tax
|
(3,519)
|
|
4,199
|
|
(183.8) %
|
Income tax (benefit)
provision
|
(1,578)
|
|
1,458
|
|
(208.2) %
|
Net (loss)
income
|
$
(1,941)
|
|
$
2,741
|
|
(170.8) %
|
The following table presents Net revenue and Adjusted Operating
Income by segment, for the three months ended March 31, 2023, and 2022, respectively (in
thousands):
|
Three Months
Ended
March
31,
|
|
|
|
(Unaudited)
|
|
|
|
2023
|
|
2022
|
|
%
Change
|
Subscription Digital
Marketing Solutions
|
$
21,561
|
|
$
21,850
|
|
(1.3) %
|
Digital
Advertising
|
33,707
|
|
29,218
|
|
15.4 %
|
Digital
|
55,268
|
|
51,068
|
|
8.2 %
|
Broadcast
Advertising
|
45,923
|
|
48,226
|
|
(4.8) %
|
Other
|
1,919
|
|
948
|
|
102.4 %
|
Net
revenue
|
$ 103,110
|
|
$ 100,242
|
|
2.9 %
|
Subscription Digital
Marketing Solutions
|
$
5,599
|
|
$
6,374
|
|
(12.2) %
|
Digital
Advertising
|
10,094
|
|
8,211
|
|
22.9 %
|
Digital
|
15,693
|
|
14,585
|
|
7.6 %
|
Broadcast
Advertising
|
8,558
|
|
11,784
|
|
(27.4) %
|
Other
|
535
|
|
110
|
|
386.4 %
|
Adjusted Operating
Income
|
$
24,786
|
|
$
26,479
|
|
(6.4) %
|
The following table reconciles Net revenue to Net revenue,
excluding political revenue on a GAAP basis by segment for the
three months ended March 31, 2023,
and 2022, respectively (in thousands):
|
Three Months
Ended
March
31,
|
|
|
|
(Unaudited)
|
|
|
|
2023
|
|
2022
|
|
%
Change
|
Subscription Digital
Marketing Solutions
|
$
21,561
|
|
$
21,850
|
|
(1.3) %
|
Digital
Advertising
|
33,707
|
|
29,218
|
|
15.4 %
|
Digital
|
55,268
|
|
51,068
|
|
8.2 %
|
Broadcast
Advertising
|
45,923
|
|
48,226
|
|
(4.8) %
|
Other
|
1,919
|
|
948
|
|
102.4 %
|
Net
revenue
|
$ 103,110
|
|
$ 100,242
|
|
2.9 %
|
Subscription Digital
Marketing Solutions political revenue
|
—
|
|
—
|
|
**
|
Digital Advertising
political revenue
|
15
|
|
46
|
|
(67.4) %
|
Broadcast Advertising
political revenue
|
198
|
|
386
|
|
(48.7) %
|
Other political
revenue
|
—
|
|
—
|
|
**
|
Political
revenue
|
$
213
|
|
$
432
|
|
(50.7) %
|
Subscription Digital
Marketing Solutions net revenue (ex. political)
|
$
21,561
|
|
$
21,850
|
|
(1.3) %
|
Digital Advertising net
revenue (ex. political)
|
33,692
|
|
29,172
|
|
15.5 %
|
Digital net revenue
(ex. political)
|
55,253
|
|
51,022
|
|
8.3 %
|
Broadcast Advertising
political net revenue (ex. political)
|
45,725
|
|
47,840
|
|
(4.4) %
|
Other net revenue (ex.
political)
|
1,919
|
|
948
|
|
102.4 %
|
Net revenue (ex.
political)
|
$ 102,897
|
|
$
99,810
|
|
3.1 %
|
The following table reconciles on a GAAP basis net (loss)
income, the most directly comparable financial measure calculated
and presented in accordance with GAAP, to Adjusted Net Income for
the three months ended March 31,
2023, and 2022, respectively (in thousands, except per share
data):
|
Three Months
Ended
March
31,
|
|
(Unaudited)
|
|
2023
|
|
2022
|
Net (loss)
income
|
$
(1,941)
|
|
$
2,741
|
Income tax (benefit)
provision
|
(1,578)
|
|
1,458
|
(Loss) Income from
operations before taxes
|
(3,519)
|
|
4,199
|
Transaction and
business realignment costs
|
292
|
|
452
|
Impairment of
intangible and long-lived assets
|
8,487
|
|
478
|
Net gain on sale and
retirement of assets
|
(292)
|
|
(308)
|
Gain on repurchases of
debt
|
(775)
|
|
—
|
Gain on sale of
digital assets
|
(839)
|
|
—
|
Change in fair value
of investment
|
134
|
|
1,508
|
Gain on insurance
recoveries
|
(372)
|
|
(11)
|
Net income
attributable to non-controlling interest, net of income
taxes
|
(480)
|
|
(517)
|
Adjusted net income
before income taxes
|
2,636
|
|
5,801
|
Income tax
provision
|
1,182
|
|
2,014
|
Adjusted Net
Income
|
$
1,454
|
|
$
3,787
|
|
|
|
|
Adjusted Net Income Per
Share:
|
|
|
|
Basic
|
$
0.08
|
|
$
0.23
|
Diluted
|
$
0.08
|
|
$
0.19
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
Basic
|
17,204
|
|
16,796
|
Diluted
|
17,483
|
|
19,509
|
The following table reconciles on a GAAP basis net (loss)
income, the most directly comparable financial measure calculated
and presented in accordance with GAAP, to Adjusted EBITDA, Adjusted
EBITDA (Excluding Political), and Adjusted EBITDA Less Interest,
Capex and Taxes for the three months ended March 31, 2023, and 2022, respectively (dollars
in thousands):
|
Three Months
Ended
March
31,
|
|
(Unaudited)
|
|
2023
|
|
2022
|
Net (loss)
income
|
$
(1,941)
|
|
$
2,741
|
Income tax (benefit)
provision
|
(1,578)
|
|
1,458
|
Interest expense,
net
|
9,558
|
|
10,027
|
Gain on repurchases of
debt
|
(775)
|
|
—
|
Depreciation and
amortization
|
4,944
|
|
4,765
|
Stock-based
compensation
|
1,772
|
|
869
|
Transaction and
business realignment costs
|
292
|
|
452
|
Impairment of
intangible and long-lived assets
|
8,487
|
|
478
|
Other
(a)
|
(1,318)
|
|
1,280
|
Adjusted
EBITDA
|
$
19,441
|
|
$
22,070
|
Political Adjusted
EBITDA
|
(181)
|
|
(367)
|
Adjusted EBITDA
(Excluding Political)
|
$
19,260
|
|
$
21,703
|
Political Adjusted
EBITDA
|
181
|
|
367
|
Net cash paid for
interest
|
(18,728)
|
|
(18,909)
|
Capital
expenditures
|
(3,639)
|
|
(2,765)
|
Cash paid for
taxes
|
(4)
|
|
(48)
|
Adjusted EBITDA Less
Interest, Capex and Taxes
|
$
(2,930)
|
|
$
348
|
(a)
|
Other includes net
(gain) on sale and retirement of assets and other (income) expense,
net.
|
The following table reconciles net income (loss), the most
directly comparable financial measure calculated and presented in
accordance with GAAP, to Adjusted EBITDA on a quarterly basis for
the twelve months ended March 31,
2023 (dollars in thousands):
|
Three Months
Ended
|
|
Twelve
Months
Ended
|
|
(Unaudited)
|
|
June 30,
2022
|
|
September
30, 2022
|
|
December
31, 2022
|
|
March 31,
2023
|
|
March 31,
2023
|
Net income
(loss)
|
$
4,919
|
|
$
2,798
|
|
$
3,932
|
|
$
(1,941)
|
|
$
9,708
|
Income tax provision
(benefit)
|
1,206
|
|
2,275
|
|
(5,503)
|
|
(1,578)
|
|
(3,600)
|
Interest expense,
net
|
10,044
|
|
9,967
|
|
9,790
|
|
9,558
|
|
39,359
|
Gain on repurchases of
debt
|
(108)
|
|
—
|
|
—
|
|
(775)
|
|
(883)
|
Depreciation and
amortization
|
4,314
|
|
4,467
|
|
5,498
|
|
4,944
|
|
19,223
|
Stock-based
compensation
|
839
|
|
722
|
|
1,367
|
|
1,772
|
|
4,700
|
Transaction and
business realignment costs
|
824
|
|
1,004
|
|
2,168
|
|
292
|
|
4,288
|
Impairment of
intangible and long-lived assets
|
9,419
|
|
10,300
|
|
10,917
|
|
8,487
|
|
39,123
|
Other
(a)
|
895
|
|
(627)
|
|
221
|
|
(1,318)
|
|
(829)
|
Adjusted
EBITDA
|
$
32,352
|
|
$
30,906
|
|
$
28,390
|
|
$
19,441
|
|
$
111,089
|
(a)
|
Other includes net
(gain) on sale and retirement of assets and other (income) expense,
net.
|
The following tables reconcile Operating income (loss), the most
directly comparable financial measure calculated and presented in
accordance with GAAP, to Adjusted Operating Income by segment for
the three months ended March 31,
2023, and 2022 (in thousands):
|
Three Months Ended
March 31, 2023
|
|
(Unaudited)
|
|
Subscription
Digital
Marketing
Solutions
|
|
Digital
Advertising
|
|
Broadcast
Advertising
|
|
Other
|
|
Corporate
and Other
Reconciling
Items
|
|
Total
|
Operating income
(loss)
|
$
5,143
|
|
$
9,885
|
|
$
(3,594)
|
|
$
486
|
|
$
(7,682)
|
|
$
4,238
|
Depreciation and
amortization
|
328
|
|
164
|
|
3,600
|
|
36
|
|
816
|
|
4,944
|
Corporate
expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
5,345
|
|
5,345
|
Stock-based
compensation
|
128
|
|
45
|
|
164
|
|
2
|
|
1,433
|
|
1,772
|
Transaction and
business realignment costs
|
—
|
|
—
|
|
193
|
|
11
|
|
88
|
|
292
|
Impairment of
intangible and long-lived assets
|
—
|
|
—
|
|
8,487
|
|
—
|
|
—
|
|
8,487
|
Net gain on sale and
retirement of assets
|
—
|
|
—
|
|
(292)
|
|
—
|
|
—
|
|
(292)
|
Adjusted Operating
Income
|
$
5,599
|
|
$
10,094
|
|
$
8,558
|
|
$
535
|
|
$
—
|
|
$
24,786
|
|
Three Months Ended
March 31, 2022
|
|
(Unaudited)
|
|
Subscription
Digital
Marketing
Solutions
|
|
Digital
Advertising
|
|
Broadcast
Advertising
|
|
Other
|
|
Corporate
and Other
Reconciling
Items
|
|
Total
|
Operating income
(loss)
|
$
5,965
|
|
$
8,131
|
|
$
8,817
|
|
$
(57)
|
|
$
(7,042)
|
|
$
15,814
|
Depreciation and
amortization
|
277
|
|
65
|
|
3,145
|
|
38
|
|
1,240
|
|
4,765
|
Corporate
expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
4,409
|
|
4,409
|
Stock-based
compensation
|
132
|
|
15
|
|
87
|
|
3
|
|
632
|
|
869
|
Transaction and
business realignment costs
|
—
|
|
—
|
|
—
|
|
6
|
|
446
|
|
452
|
Impairment of
intangible and long-lived assets
|
—
|
|
—
|
|
7
|
|
120
|
|
351
|
|
478
|
Net gain on sale and
retirement of assets
|
—
|
|
—
|
|
(272)
|
|
—
|
|
(36)
|
|
(308)
|
Adjusted Operating
Income
|
$
6,374
|
|
$
8,211
|
|
$
11,784
|
|
$
110
|
|
$
—
|
|
$
26,479
|
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SOURCE Townsquare Media, Inc.