Entercom Communications Corp. (ETM)

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Entercom Communications Reports Third Quarter Results, Revenues Up 53% Sequentially from 2Q to 3Q
Fri November 6, 2020 8:00 AM|Business Wire|About: ETM

PHILADELPHIA--(BUSINESS WIRE)-- Entercom Communications Corp. (ETM) today reported financial results for the quarter ended September 30, 2020.

Third Quarter Summary

Net revenues for the quarter were $268.5 million, up 53% compared to the second quarter of 2020 and down 30% compared to the third quarter of 2019
Net revenues improved each month during the third quarter compared to the prior year: July was down 36%, August was down 32% and September was down 25%
Digital revenues were $47.3 million, up 41% compared to the third quarter of 2019 and were propelled by continued strong audience and revenue growth in podcasting and digital audio advertising
Station expenses for the quarter declined 16% to $228.1 million compared to the prior year and corporate expenses declined 24% to $13.1 million
Operating loss for the quarter was $0.3 million, which included a non-cash impairment charge of $11.8 million, compared to operating income of $79.5 million in the third quarter of 2019
Adjusted EBITDA for the quarter was $31.1 million, compared to $98.0 million in the third quarter of 2019
During the third quarter, the Company used cash on-hand to pay down its outstanding revolver from $243.7 million at June 30th to $77.7 million at September 30th
Liquidity at September 30th was $198 million comprised of $165.6 million of available revolver capacity and $32.4 million of cash on-hand

CEO Comment

David J. Field, President and Chief Executive Officer, stated: “I am pleased to report that Entercom continued to make significant organizational improvements in the third quarter in the face of the deeply challenging pandemic. Third quarter net revenues were up 53% from the second quarter while our continuing work on enhancing our business model yielded an 18% reduction in operating expenses versus the prior year enabling us to rebound to positive Adjusted EBITDA of $31 million. We expect further improvement in both revenues and Adjusted EBITDA in the fourth quarter.

We continue to suffer from the deep impact of the pandemic which has caused many of our advertisers in businesses such as concerts and live events, tourism, gyms, nightclubs, museums, movies, theme parks, public transportation, airlines, restaurants, and others to temporarily cease or significantly curtail their operations and advertising. We look forward to welcoming them back once we emerge from the pandemic.

We continue to build and transform Entercom into a leading multi-platform audio content and entertainment company with scaled audience reach, robust data, analytics and attribution capabilities, and a leadership position in virtually every segment of the dynamic and growing audio market, including broadcasting, podcasting, digital, events, network, music, sports and news. Entercom is strategically well positioned for future performance as our enhanced capabilities enable us to expand our customer relationships and accelerate growth.

As an illustration of the appeal of our evolving capabilities, we recently announced a landmark six-year partnership with FanDuel which we believe is the largest advertising deal in the history of the radio business. This partnership is a powerful testament to the importance of our unrivaled audio sports business which includes most of the country’s leading sports talk stations and personalities with their deep fan engagement.”

Recent Company Developments

Landmark strategic partnership with FanDuel. We announced a six-year partnership designating FanDuel as the official sportsbook partner of Entercom. The agreement, which we believe is the largest advertising deal in radio history, brings FanDuel’s sports betting content, products, and risk and trading expertise to our listeners via integration across our entire sports portfolio.
Station Exchange with Urban One. We announced a broadcast exchange agreement in which we will transfer ownership of our four stations in Charlotte in exchange for Urban One’s WTEM-AM, Washington, DC (Sports); WHHL-FM, St. Louis (Urban/R&B/Hip Hop); and WPHI 103.9 FM, Philadelphia. In addition, in the St. Louis market, we will also acquire the Urban AC format and brand assets of WFUN-FM which we will transition to and use to replace the format on our 96.3 FM signal.
Continuing Robust Slate of Podcast Launches. Our podcast business – including Cadence13 and Pineapple Street Studios – continued to deliver more top-rated hits than virtually any other Podcast network, with six shows in the top-ten on the Apple Podcast charts during the third quarter. Recent launches include hit podcasts with Kevin Durant, Jon Meacham, Charli and Dixie D’Amelio, two of the world’s biggest social media influencers, and new collaborations with HBO, Netflix, Buzzfeed News, Audible and LeBron James’ Springhill Studios.
Credit Agreement Amendment. In July, the Company amended the financial maintenance covenant and other provisions under its Credit Agreement. Among other things, the amendment provides for a covenant testing holiday for the quarters ending September 30, 2020 and December 31, 2020. Testing of the financial maintenance covenant will resume on March 31, 2021 with the Company using fixed amounts for Consolidated EBITDA for the quarters ending June 30, 2020, September 30, 2020 and December 31, 2020. Those amounts represent the amounts reported to the Company’s lenders for the corresponding quarters in 2019.

Earnings Conference Call and Company Information

Entercom will hold a conference call and simultaneous webcast regarding the quarterly earnings release on Friday, November 6, 2020, at 10:00 AM Eastern Time. The public may access the conference call by dialing Toll Free: [phone] and Toll: [phone], passcode: Entercom (domestic and international callers). Participants may also listen to a live webcast of the call by visiting the “Investor Relations” section of Entercom’s website at www.entercom.com. A replay of the conference call will be available for one week by dialing [phone]. A webcast replay of the conference call will be available beginning six hours after the call on the Company’s website for a period of two weeks. Additional information is available on the Company’s website at www.entercom.com.