IMMEDIATE RELEASE
TOWNSQUARE REPORTS STRONG START TO 2021 WITH DIGITAL REVENUE, GROWING +13% YEAR OVER YEAR (+32% vs. 2019) AND ADJUSTED EBITDA GROWING +30% YEAR OVER YEAR (+7% vs. 2019)
Digital Revenue Nearly 49% of Total Net Revenue
Purchase, NY – May 10, 2021 - Townsquare Media, Inc. (NYSE: TSQ) (“Townsquare”, the "Company," "we," "us," or "our") announced today financial results for the first quarter ended March 31, 2021.
“We are extremely proud to report that Townsquare’s first quarter 2021 results approached, and in some cases exceeded, levels achieved in the pre-COVID first quarter of 2019, which surpassed our expectations and previously stated guidance. In the first quarter of 2021, net revenue declined -5% year over year, and -1.6% excluding political and Live Events net revenue. When excluding Live Events net revenue, first quarter net revenue increased +0.3% as compared to the first quarter of 2019. Total digital revenue growth accelerated to +13% year over year (+32% vs. Q1 2019), contributing nearly 49% of Townsquare’s total first quarter net revenue. Our digital revenue growth was fueled by Townsquare Interactive (TSI), our digital marketing solutions subscription business, Townsquare Ignite, our digital programming advertising platform, and Townsquare Amped, digital advertising on our owned and operated brands, which increased revenue year over year by +15%, +12%, and +11%, respectively. Impressively, TSI, Ignite, and Amped's first quarter net revenue exceeded Q1 2019 revenue levels by +34%, +45%, and +15%, respectively. Over the next three years, we expect to grow our digital net revenue from $167 million (on a trailing twelve-month basis as of March 31, 2021) to $250 million,” commented Bill Wilson, Chief Executive Officer of Townsquare Media, Inc. "The strong growth of our digital revenue, together with our strong expense management, led to Adjusted EBITDA increasing nearly +30% over the prior year. I am especially proud to share that first quarter Adjusted EBITDA of $20.1 million is +$1.3 million, or +7%, higher than Q1 2019’s pro forma Adjusted EBITDA, and +$2.1 million, or +12%, higher when excluding profit from Live Events."
First Quarter Highlights*
•As compared to the first quarter of 2020:
•Net revenue decreased 5.0%, and 4.1% excluding political revenue
•Net revenue decreased 1.6% excluding political and Live Events net revenue
•Net loss decreased $53.5 million to a net loss of $6.1 million
•Adjusted EBITDA increased 29.7% to $20.1 million
•Townsquare Interactive net subscription revenue increased 14.9% to $19.0 million
•Townsquare Interactive Adjusted Operating Income increased 30.4% to $5.9 million
•Advertising net revenue decreased 6.4% and 5.3% excluding political revenue
•Live Events net revenue decreased 99.7%
•Diluted income per share was $(0.35), and Adjusted Net Income per diluted share was $0.17
•Generated Cash Flow from Operations of $19.4 million
•Issued $550.0 million of 6.875% senior secured notes due 2026
•Completed the repurchase of 100% of Oaktree Capital’s equity interest in the Company for $6.40 per security, representing a 19% discount to the pre-announcement share price (39% as of the March 9, 2021 closing date)
•Townsquare Interactive added approximately 850 net subscribers, the 12th consecutive quarter of 850 or more net subscriber additions
*See below for discussion of non-GAAP measures. As used in this release, the term “pro forma” means pro forma for the divestiture of our Arizona Bridal Shows business (consisting of two expositions) on March 18, 2019, giving effect to such divestitures as if they had occurred on January 1, 2019.
Segment Reporting
We have three reportable operating segments, Townsquare Interactive, our digital marketing solutions subscription business, Advertising, which includes broadcast and digital advertising products and solutions, and Live Events, which is comprised of the Company’s live events, including concerts, expositions and other experiential events.
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Quarter Ended March 31, 2021 Compared to the Quarter Ended March 31, 2020
Net Revenue
Net revenue for the quarter ended March 31, 2021 decreased $4.7 million, or 5.0%, to $88.8 million, as compared to $93.4 million in the same period last year. Townsquare Interactive net subscription revenue increased $2.5 million, or 14.9%, to $19.0 million, Advertising net revenue decreased $4.8 million, or 6.4%, to $69.8 million, and Live Events net revenue decreased $2.4 million, or 99.7%, to $7.0 thousand, each as compared to the same period last year. Excluding political revenue, net revenue decreased $3.8 million, or 4.1%, to $88.3 million, and Advertising net revenue decreased $3.9 million, or 5.3%, to $69.3 million.
Adjusted EBITDA
Adjusted EBITDA for the quarter ended March 31, 2021 increased $4.6 million, or 29.7% to $20.1 million, as compared to $15.5 million in the same period last year. Adjusted EBITDA (Excluding Political) increased $5.4 million, or 37.3%, to $19.7 million, as compared to $14.4 million in the same period last year.
Net Loss
Net loss for the quarter ended March 31, 2021 decreased $53.5 million to $6.1 million, as compared to net loss of $59.6 million in the same period last year.
Liquidity and Capital Resources
As of March 31, 2021, we had a total of $20.1 million of cash and cash equivalents and $550.0 million of outstanding indebtedness, representing 8.2x and 7.9x gross and net leverage, respectively, based on Adjusted EBITDA for the twelve months ended March 31, 2021 of $66.7 million.
On January 6, 2021, the Company completed the private offering and sale of $550.0 million aggregate principal amount of 6.875% senior secured notes due 2026 (the “2026 Notes”) at an issue price of 100.0%. The net proceeds from the 2026 Notes, together with cash on hand, were used to repay: (i) borrowings under the 2015 senior secured credit facility, including $272.4 million principal amount of term loans and $2.1 million in accrued interest, (ii) $273.4 million of principal amount of the 6.5% Unsecured Senior Notes due in 2023, a prepayment premium of $4.4 million and $5.1 million in accrued interest, and (iii), fees and expenses related thereto.
Oaktree Stock Repurchase
On March 9, 2021, the Company repurchased all of the outstanding securities held by Oaktree Capital Management L.P. and its affiliates (“Oaktree”), including 1,595,224 shares of Class A Common Stock, 2,151,373 shares of Class B Common Stock and 8,814,980 warrants for an aggregate purchase price of $80.4 million, or $6.40 per security, and incurred fees related to the repurchase of the securities in the amount of $1.6 million.
The table below presents a summary, as of May 5, 2021, of our outstanding common stock, and securities convertible into common stock, excluding options issued under our 2014 Omnibus Incentive Plan.
Security | Number Outstanding | Description | ||||||||||||
| Class A common stock | 14,674,552 | One vote per share. | ||||||||||||
| Class B common stock | 815,296 | 10 votes per share.1 | ||||||||||||
| Class C common stock | 836,341 | No votes.1 | ||||||||||||
| Warrants | 162,696 | Each warrant is exercisable for one share of Class A common stock, at an exercise price of $0.0001 per share. The aggregate exercise price for all warrants currently outstanding is $16.2 | ||||||||||||
| Total | 16,488,885 | |||||||||||||
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. | ||||||||||||||
2 The warrants are fully vested and exercisable for shares of Class A common stock, subject to certain conditions, including compliance with FCC rules. | ||||||||||||||
Conference Call
Townsquare Media, Inc. will host a conference call to discuss certain first quarter 2021 financial results on Monday, May 10, 2021 at 8:00 a.m. Eastern Time. The conference call dial-in number is 1-877-407-0784 (U.S. & Canada) or 1-201-689-8560
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(International) and the confirmation code is 13719031. A live webcast of the conference call will also be available on the equity investor relations page of the Company’s website at www.townsquaremedia.com.
A replay of the conference call will be available through May 17, 2021. To access the replay, please dial 1-844-512-2921 (U.S. and Canada) or 1-412-317-6671 (International) and enter confirmation code 13719031. 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, digital marketing solutions and radio company focused outside the Top 50 markets in the U.S. Our assets include Townsquare Interactive, a digital marketing services subscription business providing websites, search engine optimization, social platforms and online reputation management for approximately 23,600 SMBs; Townsquare IGNITE, a proprietary digital programmatic advertising technology with an in-house demand and data management platform; and Townsquare Media, our portfolio of 322 local terrestrial radio stations in 67 cities with corresponding local news and entertainment websites and apps including legendary brands such as WYRK.com, WJON.com, and NJ101.5.com along with a network of national music brands including 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. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statement. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof or as of the date specified herein. Risks and uncertainties that could have a material impact on our business and financial results include, but are not limited to, general economic conditions in the United States, or in the specific markets in which we currently do business, industry conditions, legislative or regulatory requirements, the continuation or worsening of the effects from the COVID-19 pandemic, its scope, duration and impact on our business, financial results, cash flows and liquidity, as well as the impact on our clients and customers, the success of our mitigation efforts in response to the COVID-19 pandemic, our performance in any recovery from the COVID-19 pandemic, the performance of financial and credit markets, our ability to comply with the covenants and obligations under our outstanding debt, including meeting required payments of principal and interest, our ability to access debt or equity capital on attractive terms or at all, potential downgrades to our credit ratings, and certain other events, including future disease outbreaks and pandemics. See “Risk Factors” and “Forward-Looking Statements” included in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 16, 2021, for a discussion of additional factors that could cause our actual results to differ from those expressed or implied by forward-looking statements. Townsquare Media, Inc. assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise.
Non-GAAP Financial Measures and Definitions
In this press release, we refer to Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA (Excluding Political), Adjusted Net 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 goodwill, long-lived and intangible assets and net loss (gain) on sale and retirement of assets. We define Adjusted EBITDA as net income (loss) before the deduction of income taxes, interest expense, net, repurchase of debt, transaction costs, depreciation and amortization, stock-based compensation, business realignment costs, impairment of goodwill, impairment of long-lived and intangible assets, impairment of investments, net (income) loss from discontinued operations, net of income taxes, 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 (loss) before the deduction of transaction costs, business realignment costs, impairment goodwill, impairment of long-lived
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and intangible assets, impairment of investments, net loss (gain) on sale and retirement of assets, gain on repurchase of debt and insurance recoveries, net income attributable to non-controlling interest, net of income taxes, and net loss from discontinued operations, 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, 2021, divided by our Adjusted EBITDA for the twelve months ended March 31, 2021. 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. Where we use the term “pro forma”, it refers to pro forma financial information for our disposal of our Arizona Bridal Show business, as if the sale occurred on January 1, 2019.
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 (loss) gain on sale and retirement of assets, business realignment costs, certain impairments, and net income (loss) from discontinued operations. 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
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
(in Thousands, except share and per share data)
(unaudited)
| March 31, 2021 | December 31, 2020 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 20,118 | $ | 83,229 | |||||||
Accounts receivable, net of allowance of $6,894 and $7,051, respectively | 45,730 | 58,634 | |||||||||
| Prepaid expenses and other current assets | 10,793 | 12,428 | |||||||||
Total current assets | 76,641 | 154,291 | |||||||||
| Property and equipment, net | 109,500 | 111,871 | |||||||||
| Intangible assets, net | 280,881 | 281,160 | |||||||||
| Goodwill | 157,947 | 157,947 | |||||||||
| Investments | 16,729 | 11,501 | |||||||||
| Operating lease right-of-use-assets | 47,569 | 48,290 | |||||||||
| Other assets | 1,315 | 2,948 | |||||||||
| Restricted cash | 494 | 494 | |||||||||
Total assets | $ | 691,076 | $ | 768,502 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 15,733 | $ | 9,056 | |||||||
| Deferred revenue | 8,636 | 8,847 | |||||||||
| Accrued compensation and benefits | 7,890 | 12,462 | |||||||||
| Accrued expenses and other current liabilities | 24,706 | 21,427 | |||||||||
| Operating lease liabilities, current | 7,289 | 7,517 | |||||||||
| Financing lease liabilities, current | 65 | 64 | |||||||||
| Accrued interest | 9,031 | 6,350 | |||||||||
| Liabilities of discontinued operations | — | 33 | |||||||||
| Total current liabilities | 73,350 | 65,756 | |||||||||
Long-term debt, less current portion (net of deferred finance costs of $9,881 and $2,369, respectively) | 540,119 | 543,428 | |||||||||
| Deferred tax liability | 9,310 | 10,326 | |||||||||
| Operating lease liability, net of current portion | 43,225 | 44,661 | |||||||||
| Financing lease liabilities, net of current portion | 114 | 130 | |||||||||
| Other long-term liabilities | 3,254 | 3,446 | |||||||||
Total liabilities | 669,372 | 667,747 | |||||||||
| Stockholders’ equity: | |||||||||||
Class A common stock, par value $0.01 per share; 300,000,000 shares authorized; 14,674,552 and 14,436,065 shares issued and outstanding, respectively | 147 | 144 | |||||||||
Class B common stock, par value $0.01 per share; 50,000,000 shares authorized; 815,296 and 2,966,669 shares issued and outstanding, respectively | 8 | 30 | |||||||||
Class C common stock, par value $0.01 per share; 50,000,000 shares authorized; 836,341 and 1,636,341 shares issued and outstanding, respectively | 8 | 17 | |||||||||
| Total common stock | 163 | 191 | |||||||||
| Additional paid-in capital | 296,758 | 369,672 | |||||||||
| Accumulated deficit | (279,151) | (272,602) | |||||||||
| Non-controlling interest | 3,934 | 3,494 | |||||||||
Total stockholders’ equity | 21,704 | 100,755 | |||||||||
Total liabilities and stockholders’ equity | $ | 691,076 | $ | 768,502 | |||||||
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in Thousands, Except Per Share Data)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Net revenue | $ | 88,761 | $ | 93,433 | |||||||
| Operating costs and expenses: | |||||||||||
| Direct operating expenses, excluding depreciation, amortization, and stock-based compensation | 64,527 | 71,550 | |||||||||
| Depreciation and amortization | 4,729 | 5,284 | |||||||||
| Corporate expenses | 4,134 | 6,390 | |||||||||
| Stock-based compensation | 1,062 | 524 | |||||||||
| Transaction costs | 4,715 | 1,027 | |||||||||
| Business realignment costs | 190 | 1,711 | |||||||||
| Impairment of long-lived and intangible assets | — | 79,060 | |||||||||
| Net loss (gain) on sale and retirement of assets | 593 | (2) | |||||||||
| Total operating costs and expenses | 79,950 | 165,544 | |||||||||
| Operating income (loss) | 8,811 | (72,111) | |||||||||
| Other expense (income): | |||||||||||
| Interest expense, net | 10,155 | 8,129 | |||||||||
| Loss on extinguishment and modification of debt | 5,997 | — | |||||||||
| Other (income) expense, net | (337) | 227 | |||||||||
| Loss from operations before income taxes | (7,004) | (80,467) | |||||||||
| Income tax benefit | (895) | (20,890) | |||||||||
| Net loss | $ | (6,109) | $ | (59,577) | |||||||
| Net (loss) income attributable to: | |||||||||||
| Controlling interests | $ | (6,549) | $ | (60,154) | |||||||
| Non-controlling interests | $ | 440 | $ | 577 | |||||||
| Basic (loss) income per share: | |||||||||||
| Attributable to common shares | $ | (0.35) | $ | (3.27) | |||||||
| Attributable to participating shares | $ | — | $ | 0.08 | |||||||
| Diluted loss per share: | $ | (0.35) | $ | (3.27) | |||||||
| Weighted average shares outstanding: | |||||||||||
| Basic attributable to common shares | 18,602 | 18,582 | |||||||||
| Basic attributable to participating shares | 6,823 | 8,978 | |||||||||
| Diluted | 18,602 | 18,582 | |||||||||
| Cash dividend declared per share | $ | — | $ | 0.075 | |||||||
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in Thousands)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | (6,109) | $ | (59,577) | |||||||
| Adjustments to reconcile loss from continuing operations to net cash flows from operating activities: | |||||||||||
| Depreciation and amortization | 4,729 | 5,284 | |||||||||
| Amortization of deferred financing costs | 328 | 379 | |||||||||
| Lease related amortization | 2,502 | 2,759 | |||||||||
| Net deferred taxes and other | (1,016) | (21,010) | |||||||||
| Provision for doubtful accounts | 350 | 802 | |||||||||
| Stock-based compensation expense | 1,062 | 524 | |||||||||
| Loss on extinguishment and modification of debt | 5,997 | — | |||||||||
| Trade activity, net | (3,652) | (2,410) | |||||||||
| Impairment of long-lived and intangible assets | — | 79,060 | |||||||||
| Net loss on sale and retirement of assets | 593 | (2) | |||||||||
| Gain on insurance recoveries | (225) | — | |||||||||
| Gain on lease settlement | (233) | — | |||||||||
| Other | 3 | — | |||||||||
| Changes in assets and liabilities, net of acquisitions: | |||||||||||
| Accounts receivable | 12,212 | 8,732 | |||||||||
| Prepaid expenses and other assets | 3,115 | (481) | |||||||||
| Accounts payable | 6,461 | (1,238) | |||||||||
| Accrued expenses | (5,992) | (5,009) | |||||||||
| Accrued interest | 2,681 | 4,572 | |||||||||
| Other long-term liabilities | (3,356) | (2,875) | |||||||||
Net cash provided by operating activities - continuing operations | 19,450 | 9,510 | |||||||||
Net cash used in operating activities - discontinued operations | (33) | (175) | |||||||||
Net cash provided by operating activities | 19,417 | 9,335 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of investments | (128) | (400) | |||||||||
| Purchase of property and equipment | (1,860) | (5,626) | |||||||||
| Proceeds from insurance recoveries | 225 | — | |||||||||
| Proceeds from sale of assets | 316 | 2 | |||||||||
Net cash used in investing activities | (1,447) | (6,024) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Repayment of term loans | (272,381) | — | |||||||||
| Repurchase of 2023 Notes | (273,416) | — | |||||||||
| Proceeds from the issuance of 2026 Notes | 550,000 | — | |||||||||
| Prepayment fee on 2023 Notes | (4,443) | — | |||||||||
| Deferred financing cost | (8,133) | — | |||||||||
| Repurchase of Oaktree securities | (80,394) | — | |||||||||
| Borrowings under the revolving credit facility | — | 50,000 | |||||||||
| Proceeds from stock options exercised | 7,946 | 49 | |||||||||
| Dividend payments | — | (2,067) | |||||||||
| Transaction costs related to securities repurchase | (242) | — | |||||||||
| Cash distribution to non-controlling interests | — | (1) | |||||||||
| Repayments of capitalized obligations | (18) | (10) | |||||||||
| Net cash (used in) provided by financing activities | (81,081) | 47,971 | |||||||||
| Cash and cash equivalents and restricted cash: | |||||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (63,111) | 51,282 | |||||||||
| Beginning of period | 83,723 | 85,161 | |||||||||
| End of period | $ | 20,612 | $ | 136,443 | |||||||
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in Thousands)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Supplemental Disclosure of Cash Flow Information: | |||||||||||
Cash payments: | |||||||||||
Interest | $ | 7,150 | $ | 3,437 | |||||||
Income taxes | 70 | — | |||||||||
| Supplemental Disclosure of Non-cash Activities: | |||||||||||
Investments acquired in exchange for advertising(1) | $ | 5,100 | $ | 1,400 | |||||||
Property and equipment acquired in exchange for advertising(1) | 912 | — | |||||||||
| Accrued capital expenditures | 283 | 892 | |||||||||
| Accrued financing fees | 1,043 | — | |||||||||
| Accrued transaction costs | 1,312 | — | |||||||||
| Dividends declared, but not paid during the period | — | 2,098 | |||||||||
| Supplemental Disclosure of Cash Flow Information relating to Leases: | |||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | 2,773 | $ | 2,701 | |||||||
| Right-of-use assets obtained in exchange for lease obligations: | |||||||||||
Operating leases | $ | 1,067 | $ | 1,156 | |||||||
| Reconciliation of cash, cash equivalents and restricted cash | |||||||||||
| Cash and cash equivalents | $ | 20,118 | $ | 135,949 | |||||||
| Restricted cash | 494 | 494 | |||||||||
| $ | 20,612 | $ | 136,443 | ||||||||
(1) Represents total advertising services to be provided by the Company in exchange for equity interests and property and equipment acquired during the three months ended March 31, 2021. As the advertising services are performed, revenue related to the services provided is reflected as a component of Trade activity, net within net cash provided by operating activities. As of March 31, 2021, $3.0 million in advertising services remain to be provided in future periods in exchange for equity interests acquired during the three months ended March 31, 2021.
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TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT
(in Thousands)
(unaudited)
| Three Months Ended March 31, | |||||||||||||||||
| 2021 | 2020 | % Change | |||||||||||||||
| Advertising net revenue | $ | 69,757 | $ | 74,536 | (6.4) | % | |||||||||||
| Townsquare Interactive net revenue | 18,997 | 16,527 | 14.9 | % | |||||||||||||
| Live Events net revenue | 7 | 2,370 | (99.7) | % | |||||||||||||
| Net revenue | 88,761 | 93,433 | (5.0) | % | |||||||||||||
| Advertising direct operating expenses | 51,395 | 57,719 | (11.0) | % | |||||||||||||
| Townsquare Interactive direct operating expenses | 13,065 | 11,979 | 9.1 | % | |||||||||||||
| Live Events direct operating expenses | 67 | 1,852 | (96.4) | % | |||||||||||||
| Direct operating expenses | 64,527 | 71,550 | (9.8) | % | |||||||||||||
| Depreciation and amortization | 4,729 | 5,284 | (10.5) | % | |||||||||||||
| Corporate expenses | 4,134 | 6,390 | (35.3) | % | |||||||||||||
| Stock-based compensation | 1,062 | 524 | 102.7 | % | |||||||||||||
| Transaction costs | 4,715 | 1,027 | ** | ||||||||||||||
| Business realignment costs | 190 | 1,711 | (88.9) | % | |||||||||||||
| Impairment of long-lived and intangible assets | — | 79,060 | ** | ||||||||||||||
| Net loss (gain) on sale and retirement of assets | 593 | (2) | ** | ||||||||||||||
| Total operating costs and expenses | 79,950 | 165,544 | (51.7) | % | |||||||||||||
| Operating income (loss) | 8,811 | (72,111) | ** | ||||||||||||||
| Other expense: | |||||||||||||||||
| Interest expense, net | 10,155 | 8,129 | 24.9 | % | |||||||||||||
| Loss on extinguishment and modification of debt | 5,997 | — | ** | ||||||||||||||
| Other (income) expense, net | (337) | 227 | ** | ||||||||||||||
| Loss from operations before income taxes | (7,004) | (80,467) | ** | ||||||||||||||
| Income tax benefit | (895) | (20,890) | ** | ||||||||||||||
| Net loss | $ | (6,109) | $ | (59,577) | ** | ||||||||||||
** not meaningful
9
The following table presents net revenue and Adjusted Operating Income by segment, for the three months ended March 31, 2021, and 2020, respectively (in thousands):
| Three Months Ended March 31, | |||||||||||||||||
| 2021 | 2020 | %Change | |||||||||||||||
| Advertising net revenue | $ | 69,757 | $ | 74,536 | (6.4) | % | |||||||||||
| Townsquare Interactive net revenue | 18,997 | 16,527 | 14.9 | % | |||||||||||||
| Live Events net revenue | 7 | 2,370 | (99.7) | % | |||||||||||||
| Net revenue | $ | 88,761 | $ | 93,433 | (5.0) | % | |||||||||||
| Advertising Adjusted Operating Income | 18,362 | 16,817 | 9.2 | % | |||||||||||||
| Townsquare Interactive Adjusted Operating Income | 5,932 | 4,548 | 30.4 | % | |||||||||||||
| Live Events Adjusted Operating (Loss) Income | (60) | 518 | ** | ||||||||||||||
| Adjusted Operating Income | $ | 24,234 | $ | 21,883 | 10.7 | % | |||||||||||
** not meaningful
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, 2021, and 2020, respectively (in thousands):
| Three Months Ended March 31, | |||||||||||||||||
| 2021 | 2020 | %Change | |||||||||||||||
| Advertising net revenue | $ | 69,757 | $ | 74,536 | (6.4) | % | |||||||||||
| Townsquare Interactive net revenue | 18,997 | 16,527 | 14.9 | % | |||||||||||||
| Live Events net revenue | 7 | 2,370 | (99.7) | % | |||||||||||||
| Net revenue | $ | 88,761 | $ | 93,433 | (5.0) | % | |||||||||||
| Advertising political revenue | 439 | 1,328 | (66.9) | % | |||||||||||||
| Townsquare Interactive political revenue | — | — | ** | ||||||||||||||
| Live Events political revenue | — | — | ** | ||||||||||||||
| Political revenue | $ | 439 | $ | 1,328 | (66.9) | % | |||||||||||
| Advertising net revenue (ex. political) | 69,318 | 73,208 | (5.3) | % | |||||||||||||
| Townsquare Interactive net revenue (ex. political) | 18,997 | 16,527 | 14.9 | % | |||||||||||||
| Live Events net revenue (ex. political) | 7 | 2,370 | ** | ||||||||||||||
| Net revenue (ex. political) | $ | 88,322 | $ | 92,105 | (4.1) | % | |||||||||||
** not meaningful
10
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, 2021, and 2020, respectively (in thousands, except per share data):
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Net loss | $ | (6,109) | $ | (59,577) | |||||||
| Income tax benefit | (895) | (20,890) | |||||||||
| Net loss from operations before income taxes | (7,004) | (80,467) | |||||||||
| Transaction costs | 4,715 | 1,027 | |||||||||
| Business realignment costs | 190 | 1,711 | |||||||||
| Impairment of long-lived and intangible assets | — | 79,060 | |||||||||
| Net loss (gain) on sale and retirement of assets | 593 | (2) | |||||||||
| Loss on extinguishment and modification of debt | 5,997 | — | |||||||||
| Net income attributable to non-controlling interest, net of income taxes | 440 | 577 | |||||||||
| Adjusted net income before income taxes | 4,931 | 1,906 | |||||||||
| Provision for income taxes | 630 | 495 | |||||||||
| Adjusted Net Income | $ | 4,301 | $ | 1,411 | |||||||
| Adjusted Net Income Per Share: | |||||||||||
| Basic | $ | 0.23 | $ | 0.08 | |||||||
| Diluted | $ | 0.17 | $ | 0.05 | |||||||
| Weighted average shares outstanding: | |||||||||||
| Basic | 18,602 | 18,582 | |||||||||
| Diluted | 25,425 | 27,560 | |||||||||
11
The following table reconciles on a GAAP basis net loss, 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, 2021, and 2020, respectively (dollars in thousands):
| Three Months Ended March 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Net loss | $ | (6,109) | $ | (59,577) | |||||||
| Income tax benefit | (895) | (20,890) | |||||||||
| Interest expense, net | 10,155 | 8,129 | |||||||||
| Loss on extinguishment and modification of debt | 5,997 | — | |||||||||
| Depreciation and amortization | 4,729 | 5,284 | |||||||||
| Stock-based compensation | 1,062 | 524 | |||||||||
| Transaction costs | 4,715 | 1,027 | |||||||||
| Business realignment costs | 190 | 1,711 | |||||||||
| Impairment of long-lived and intangible assets | — | 79,060 | |||||||||
Other (a) | 256 | 225 | |||||||||
| Adjusted EBITDA | $ | 20,100 | $ | 15,493 | |||||||
| Political Adjusted EBITDA | (373) | (1,129) | |||||||||
| Adjusted EBITDA (Excluding Political) | $ | 19,727 | $ | 14,364 | |||||||
| Political Adjusted EBITDA | 373 | 1,129 | |||||||||
| Net cash paid for interest | (7,150) | (3,437) | |||||||||
| Capital expenditures | (1,860) | (5,626) | |||||||||
| Cash paid for taxes | (70) | — | |||||||||
| Adjusted EBITDA Less Interest, Capex and Taxes | $ | 11,020 | $ | 6,430 | |||||||
(a) Other includes net loss (gain) on sale and retirement of assets and other (income) expense, net.
12
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, 2021 (dollars in thousands):
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
| June 30, 2020 | September 30, 2020 | December 31, 2020 | March 31, 2021 | March 31, 2021 | |||||||||||||||||||||||||
| Net (loss) income | $ | (26,822) | $ | 1,311 | $ | 4,537 | $ | (6,109) | $ | (27,083) | |||||||||||||||||||
| (Benefit) provision for income taxes | (12,605) | 451 | 9,186 | (895) | (3,863) | ||||||||||||||||||||||||
| Interest expense, net | 7,892 | 7,692 | 7,707 | 10,155 | 33,446 | ||||||||||||||||||||||||
| Gain on repurchase of debt | (1,159) | — | — | — | (1,159) | ||||||||||||||||||||||||
| Loss on extinguishment and modification of debt | — | — | — | 5,997 | 5,997 | ||||||||||||||||||||||||
| Depreciation and amortization | 4,761 | 5,248 | 4,814 | 4,729 | 19,552 | ||||||||||||||||||||||||
| Stock-based compensation | 657 | 430 | 473 | 1,062 | 2,622 | ||||||||||||||||||||||||
| Transaction costs | 1,213 | 384 | 29 | 4,715 | 6,341 | ||||||||||||||||||||||||
| Business realignment costs | 456 | 472 | 450 | 190 | 1,568 | ||||||||||||||||||||||||
| Impairment of long-lived and intangible assets | 28,655 | 1,343 | — | — | 29,998 | ||||||||||||||||||||||||
Other (a) | (971) | 173 | (164) | 256 | (706) | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 2,077 | $ | 17,504 | $ | 27,032 | $ | 20,100 | $ | 66,713 | |||||||||||||||||||
(a) Other includes net loss (gain) on sale and retirement of assets and other (income) expense, net.
13
The following tables reconcile Operating Income (Loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Operating Income (Loss) by segment for the three months ended March 31, 2021 and 2020 (in thousands):
Three Months ended March 31, 2021 | |||||||||||||||||||||||||||||
| Advertising | Townsquare Interactive | Live Events | Corporate and Other Reconciling Items | Total | |||||||||||||||||||||||||
| Operating income (loss) | $ | 14,720 | $ | 5,361 | $ | (125) | $ | (11,145) | $ | 8,811 | |||||||||||||||||||
| Depreciation and amortization | 3,494 | 416 | 45 | 774 | 4,729 | ||||||||||||||||||||||||
| Corporate expenses | — | — | — | 4,134 | 4,134 | ||||||||||||||||||||||||
| Stock-based compensation | 148 | 155 | 6 | 753 | 1,062 | ||||||||||||||||||||||||
| Transaction costs | — | — | — | 4,715 | 4,715 | ||||||||||||||||||||||||
| Business realignment costs | — | — | 14 | 176 | 190 | ||||||||||||||||||||||||
| Net loss on sale and retirement of assets | — | — | — | 593 | 593 | ||||||||||||||||||||||||
| Adjusted Operating Income (Loss) | $ | 18,362 | $ | 5,932 | $ | (60) | $ | — | $ | 24,234 | |||||||||||||||||||
Three Months ended March 31, 2020 | |||||||||||||||||||||||||||||
| Advertising | Townsquare Interactive | Live Events | Corporate and Other Reconciling Items | Total | |||||||||||||||||||||||||
| Operating income (loss) | $ | (65,495) | $ | 4,390 | $ | 381 | $ | (11,387) | $ | (72,111) | |||||||||||||||||||
| Depreciation and amortization | 3,200 | 134 | 135 | 1,815 | 5,284 | ||||||||||||||||||||||||
| Corporate expenses | — | — | — | 6,390 | 6,390 | ||||||||||||||||||||||||
| Stock-based compensation | 52 | 24 | 2 | 446 | 524 | ||||||||||||||||||||||||
| Transaction costs | — | — | — | 1,027 | 1,027 | ||||||||||||||||||||||||
| Business realignment costs | — | — | — | 1,711 | 1,711 | ||||||||||||||||||||||||
| Impairment of long-lived and intangible assets | 79,060 | — | — | — | 79,060 | ||||||||||||||||||||||||
| Net gain on sale and retirement of assets | — | — | — | (2) | (2) | ||||||||||||||||||||||||
| Adjusted Operating Income | $ | 16,817 | $ | 4,548 | $ | 518 | $ | — | $ | 21,883 | |||||||||||||||||||
14