QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of Principal Executive Offices, including Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated filer | ☐ | ☒ | |||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||||||||
Emerging growth company | |||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
September 30, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance of $ | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Intangible assets, net | |||||||||||
Goodwill | |||||||||||
Investments | |||||||||||
Operating lease right-of-use assets | |||||||||||
Other assets | |||||||||||
Restricted cash | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Deferred revenue | |||||||||||
Accrued compensation and benefits | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Operating lease liabilities, current | |||||||||||
Accrued interest | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net of deferred finance costs of $ | |||||||||||
Deferred tax liability | |||||||||||
Operating lease liability, net of current portion | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders’ equity: | |||||||||||
Class A common stock, par value $ | |||||||||||
Class B common stock, par value $ | |||||||||||
Class C common stock, par value $ | |||||||||||
Total common stock | |||||||||||
Treasury stock, at cost; | ( | ||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Non-controlling interest | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net revenue | $ | $ | $ | $ | |||||||||||||||||||
Operating costs and expenses: | |||||||||||||||||||||||
Direct operating expenses, excluding depreciation, amortization, and stock-based compensation | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Corporate expenses | |||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||
Transaction and business realignment costs | |||||||||||||||||||||||
Impairment of long-lived assets, intangible assets and investments | |||||||||||||||||||||||
Net (gain) loss on sale and retirement of assets | ( | ( | ( | ||||||||||||||||||||
Total operating costs and expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Other expense (income): | |||||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
(Gain) loss on repurchases, extinguishment and modification of debt | ( | ||||||||||||||||||||||
Other (income) expense, net | ( | ( | ( | ||||||||||||||||||||
Income from operations before tax | |||||||||||||||||||||||
Income tax provision | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Net income attributable to: | |||||||||||||||||||||||
Controlling interests | $ | $ | $ | $ | |||||||||||||||||||
Non-controlling interests | $ | $ | $ | $ | |||||||||||||||||||
Basic income per share: | |||||||||||||||||||||||
Attributable to common shares | $ | $ | $ | $ | |||||||||||||||||||
Attributable to participating shares | $ | $ | $ | $ | |||||||||||||||||||
Diluted income per share | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic attributable to common shares | |||||||||||||||||||||||
Basic attributable to participating shares | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Shares of Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Class C | Class A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Shares | Shares | Shares | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Non- Controlling Interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued under exercise of stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock (1) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued under exercise of stock options | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury stock acquired at cost (2) | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash distributions to non-controlling interests | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued under exercise of stock options | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | ( | $ | $ | ( | $ | $ |
Shares of Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Class C | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Shares | Shares | Warrants | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Non- Controlling Interest | Total | |||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Repurchase of securities (1) | ( | ( | — | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued under exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Conversion of common shares | — | ( | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued under exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Share repurchase (2) | ( | — | — | — | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Conversion of common shares (3) | ( | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Cash distributions to non-controlling interests | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued under exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Warrants exercised (4) | — | — | ( | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | ( | $ | $ |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of deferred financing costs | |||||||||||
Non-cash lease income | ( | ( | |||||||||
Net deferred taxes and other | |||||||||||
Provision for doubtful accounts | |||||||||||
Stock-based compensation expense | |||||||||||
(Gain) loss on repurchases, extinguishment and modification of debt | ( | ||||||||||
Trade activity, net | ( | ( | |||||||||
Impairment of long-lived assets, intangible assets and investments | |||||||||||
Unrealized loss (gain) on investment | ( | ||||||||||
Content rights acquired | ( | ||||||||||
Amortization of content rights | |||||||||||
Change in content rights liabilities | |||||||||||
Other | ( | ( | |||||||||
Changes in assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Prepaid expenses and other assets | ( | ||||||||||
Accounts payable | ( | ||||||||||
Accrued expenses | ( | ( | |||||||||
Accrued interest | ( | ( | |||||||||
Other long-term liabilities | ( | ( | |||||||||
Net cash provided by operating activities - continuing operations | |||||||||||
Net cash used in operating activities - discontinued operations | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Payment for acquisition | ( | ||||||||||
Purchase of property and equipment | ( | ( | |||||||||
Purchase of investments | ( | ( | |||||||||
Purchase of digital assets | ( | ||||||||||
Proceeds from insurance recoveries | |||||||||||
Proceeds from sale of assets and investment related transactions | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Repurchase of 2026 Notes | ( | ||||||||||
Repayment of term loans | ( | ||||||||||
Repurchase of 2023 Notes | ( | ||||||||||
Proceeds from the issuance of 2026 Notes | |||||||||||
Prepayment fee on 2023 Notes | ( | ||||||||||
Deferred financing costs | ( | ||||||||||
Repurchase of Oaktree securities | ( | ||||||||||
Transaction costs related to Oaktree securities repurchase | ( | ||||||||||
Proceeds from stock options exercised | |||||||||||
Repurchase of stock | ( | ( | |||||||||
Cash distribution to non-controlling interests | ( | ( | |||||||||
Repayments of capitalized obligations | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Cash and cash equivalents and restricted cash: | |||||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Beginning of period | |||||||||||
End of period | $ | $ |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Supplemental Disclosure of Cash Flow Information: | |||||||||||
Cash payments: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes | |||||||||||
Supplemental Disclosure of Non-cash Activities: | |||||||||||
Investments acquired in exchange for advertising (1) | $ | $ | |||||||||
Property and equipment acquired in exchange for advertising (1) | |||||||||||
Accrued capital expenditures | |||||||||||
Accrued financing fees | |||||||||||
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 | $ | $ | |||||||||
Right-of-use assets obtained in exchange for operating lease obligations | |||||||||||
Reconciliation of cash, cash equivalents and restricted cash | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
$ | $ |
Three Months Ended September 30, 2022 | Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subscription Digital Marketing Solutions | Digital Advertising | Broadcast Advertising | Other | Total | Subscription Digital Marketing Solutions | Digital Advertising | Broadcast Advertising | Other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net Revenue (ex Political) | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Political | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Revenue | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subscription Digital Marketing Solutions | Digital Advertising | Broadcast Advertising | Other | Total | Subscription Digital Marketing Solutions | Digital Advertising | Broadcast Advertising | Other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net Revenue (ex Political) | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Political | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Revenue | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
September 30, 2022 | December 31, 2021 | |||||||||||||
Contract receivables (accounts receivable) | $ | $ | ||||||||||||
Short-term contract liabilities (deferred revenue) | $ | $ | ||||||||||||
Contract Acquisition Costs | $ | $ |
Preliminary Acquisition Date Fair Value | |||||
Net tangible assets acquired | $ | ||||
Intangible assets, net (1) | |||||
Goodwill | |||||
Total Purchase Price | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
Land and improvements | $ | $ | |||||||||
Buildings and leasehold improvements | |||||||||||
Broadcast equipment | |||||||||||
Computer and office equipment | |||||||||||
Furniture and fixtures | |||||||||||
Transportation equipment | |||||||||||
Software development costs | |||||||||||
Total property and equipment, gross | |||||||||||
Less accumulated depreciation and amortization | ( | ( | |||||||||
Total property and equipment, net | $ | $ |
September 30, 2022 | ||||||||
Discount Rate | ||||||||
Long-term Revenue Growth Rate | ||||||||
Low | High | |||||||
Mature Market Share* | ||||||||
Operating Profit Margin | ||||||||
June 30, 2022 | ||||||||
Discount Rate | ||||||||
Long-term Revenue Growth Rate | ||||||||
Low | High | |||||||
Mature Market Share* | ||||||||
Operating Profit Margin | ||||||||
March 31, 2022 | ||||||||
Discount Rate | ||||||||
Long-term Revenue Growth Rate | ||||||||
Low | High | |||||||
Mature Market Share* | ||||||||
Operating Profit Margin |
Subscription Digital Marketing Solutions | Digital Advertising | Broadcast Advertising | Other | Total | |||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Cherry Creek acquisition (1) | |||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | $ | $ |
September 30, 2022 | |||||||||||||||||||||||
Weighted Average Useful Life (in Years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||
Intangible Assets: | |||||||||||||||||||||||
FCC licenses | Indefinite | $ | $ | — | $ | ||||||||||||||||||
Digital assets | Indefinite | — | |||||||||||||||||||||
Content rights and other intangible assets | ( | ||||||||||||||||||||||
Total | $ | $ | ( | $ |
December 31, 2021 | |||||||||||||||||||||||
Weighted Average Useful Life (in Years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||
Intangible Assets: | |||||||||||||||||||||||
FCC licenses | Indefinite | $ | $ | — | $ | ||||||||||||||||||
Other intangible assets | ( | ||||||||||||||||||||||
Total | $ | $ | ( | $ |
2022 (remainder) | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
$ |
September 30, 2022 | December 31, 2021 | ||||||||||
2026 Notes | $ | $ | |||||||||
Deferred financing costs | ( | ( | |||||||||
Total long-term debt | $ | $ |
2022 (remainder) | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
$ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Net income from non-controlling interest | |||||||||||||||||||||||
Net income attributable to controlling interest | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average shares of common stock outstanding | |||||||||||||||||||||||
Weighted average shares of participating securities outstanding | |||||||||||||||||||||||
Total weighted average basic shares outstanding | |||||||||||||||||||||||
Effect of dilutive common stock equivalents | |||||||||||||||||||||||
Weighted average diluted common shares outstanding | |||||||||||||||||||||||
Basic income per share: | |||||||||||||||||||||||
Attributable to common shares | $ | $ | $ | $ | |||||||||||||||||||
Attributable to participating shares (1) | $ | $ | $ | $ | |||||||||||||||||||
Diluted income per share | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Stock options | |||||||||||||||||||||||
Restricted Stock | |||||||||||||||||||||||
Subscription Digital Marketing Solutions | Digital Advertising | Broadcast Advertising | Other | Corporate and Other Reconciling Items | Total | ||||||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||||||||||||||
Corporate expenses | |||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||
Transaction and business realignment costs (1) | |||||||||||||||||||||||||||||||||||
Impairment of long-lived assets, intangible assets and investments | |||||||||||||||||||||||||||||||||||
Net gain on sale and retirement of assets | ( | ( | ( | ||||||||||||||||||||||||||||||||
Operating income (loss) | $ | $ | $ | $ | ( | $ | ( | $ |
Subscription Digital Marketing Solutions | Digital Advertising | Broadcast Advertising | Other | Corporate and Other Reconciling Items | Total | ||||||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||||||||||||||
Corporate expenses | |||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||
Transaction and business realignment costs | |||||||||||||||||||||||||||||||||||
Net gain on sale and retirement of assets | ( | ( | |||||||||||||||||||||||||||||||||
Operating income (loss) | $ | $ | $ | $ | ( | $ | ( | $ |
Subscription Digital Marketing Solutions | Digital Advertising | Broadcast Advertising | Other | Corporate and Other Reconciling Items | Total | ||||||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||||||||||||||
Corporate expenses | |||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||
Transaction and business realignment costs (1) | |||||||||||||||||||||||||||||||||||
Impairment of long-lived assets, intangible assets and investments | |||||||||||||||||||||||||||||||||||
Net gain on sale and retirement of assets | ( | ( | ( | ||||||||||||||||||||||||||||||||
Operating income (loss) | $ | $ | $ | $ | $ | ( | $ |
Subscription Digital Marketing Solutions | Digital Advertising | Broadcast Advertising | Other | Corporate and Other Reconciling Items | Total | ||||||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||||||||||||||
Corporate expenses | |||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||
Transaction and business realignment costs | |||||||||||||||||||||||||||||||||||
Impairment of long-lived and intangible assets | |||||||||||||||||||||||||||||||||||
Net loss on sale and retirement of assets | |||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | $ | $ | $ | $ | ( | $ |
($ in thousands) | Three Months Ended September 30, | ||||||||||||||||||||||
Statement of Operations Data: | 2022 | 2021 | $ Change | % Change | |||||||||||||||||||
Net revenue | $ | 120,635 | $ | 111,280 | $ | 9,355 | 8.4 | % | |||||||||||||||
Operating costs and expenses: | |||||||||||||||||||||||
Direct operating expenses, excluding depreciation, amortization, and stock-based compensation | 83,985 | 75,719 | 8,266 | 10.9 | % | ||||||||||||||||||
Depreciation and amortization | 4,467 | 4,821 | (354) | (7.3) | % | ||||||||||||||||||
Corporate expenses | 5,744 | 6,410 | (666) | (10.4) | % | ||||||||||||||||||
Stock-based compensation | 722 | 877 | (155) | (17.7) | % | ||||||||||||||||||
Transaction and business realignment costs | 1,004 | 486 | 518 | 106.6 | % | ||||||||||||||||||
Impairment of long-lived assets, intangible assets and investments | 10,300 | — | 10,300 | ** | |||||||||||||||||||
Net gain on sale and retirement of assets | (119) | (14) | (105) | ** | |||||||||||||||||||
Total operating costs and expenses | 106,103 | 88,299 | 17,804 | 20.2 | % | ||||||||||||||||||
Operating income | 14,532 | 22,981 | (8,449) | (36.8) | % | ||||||||||||||||||
Other expense (income): | |||||||||||||||||||||||
Interest expense, net | 9,967 | 9,816 | 151 | 1.5 | % | ||||||||||||||||||
Other income, net | (508) | (3,078) | 2,570 | (83.5) | % | ||||||||||||||||||
Income from operations before tax | 5,073 | 16,243 | (11,170) | (68.8) | % | ||||||||||||||||||
Income tax provision | 2,275 | 3,349 | (1,074) | (32.1) | % | ||||||||||||||||||
Net income | $ | 2,798 | $ | 12,894 | $ | (10,096) | (78.3) | % |
Net Revenue | Direct Operating Expenses | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | $ Change | % Change | 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Subscription Digital Marketing Solutions | $ | 23,188 | $ | 21,130 | $ | 2,058 | 9.7 | % | $ | 16,744 | $ | 14,954 | $ | 1,790 | 12.0 | % | |||||||||||||||||||||||||||||||
Digital Advertising | 37,015 | 30,521 | 6,494 | 21.3 | % | 25,949 | 20,341 | 5,608 | 27.6 | % | |||||||||||||||||||||||||||||||||||||
Broadcast Advertising | 59,267 | 57,314 | 1,953 | 3.4 | % | 39,889 | 38,040 | 1,849 | 4.9 | % | |||||||||||||||||||||||||||||||||||||
Other | 1,165 | 2,315 | (1,150) | (49.7) | % | 1,403 | 2,384 | (981) | (41.1) | % | |||||||||||||||||||||||||||||||||||||
Total | $ | 120,635 | $ | 111,280 | $ | 9,355 | 8.4 | % | $ | 83,985 | $ | 75,719 | $ | 8,266 | 10.9 | % |
Three Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
2026 Notes | $ | 9,127 | $ | 9,348 | |||||||
Term Loans | — | 8 | |||||||||
Capital leases and other | 337 | 5 | |||||||||
Deferred financing costs | 504 | 455 | |||||||||
Interest income | (1) | — | |||||||||
Interest expense, net | $ | 9,967 | $ | 9,816 |
($ in thousands) | Nine Months Ended September 30, | ||||||||||||||||||||||
Statement of Operations Data: | 2022 | 2021 | $ Change | % Change | |||||||||||||||||||
Net revenue | $ | 342,801 | $ | 307,379 | $ | 35,422 | 11.5 | % | |||||||||||||||
Direct operating expenses, excluding depreciation, amortization, and stock-based compensation | 241,581 | 211,837 | 29,744 | 14.0 | % | ||||||||||||||||||
Depreciation and amortization | 13,546 | 14,546 | (1,000) | (6.9) | % | ||||||||||||||||||
Corporate expenses | 15,892 | 15,996 | (104) | (0.7) | % | ||||||||||||||||||
Stock-based compensation | 2,430 | 2,833 | (403) | (14.2) | % | ||||||||||||||||||
Transaction and business realignment costs | 2,280 | 5,847 | (3,567) | (61.0) | % | ||||||||||||||||||
Impairment of long-lived assets, intangible assets and investments | 20,197 | 95 | 20,102 | ** | |||||||||||||||||||
Net (gain) loss on sale and retirement of assets | (338) | 613 | (951) | ** | |||||||||||||||||||
Total operating costs and expenses | 295,588 | 251,767 | 43,821 | 17.4 | % | ||||||||||||||||||
Operating income | 47,213 | 55,612 | (8,399) | (15.1) | % | ||||||||||||||||||
Other expense (income): | |||||||||||||||||||||||
Interest expense, net | 30,038 | 29,780 | 258 | 0.9 | % | ||||||||||||||||||
(Gain) loss on repurchases, extinguishment and modification of debt | (108) | 5,997 | (6,105) | ** | |||||||||||||||||||
Other expense (income), net | 1,886 | (3,455) | 5,341 | ** | |||||||||||||||||||
Income from operations before income taxes | 15,397 | 23,290 | (7,893) | (33.9) | % | ||||||||||||||||||
Income tax provision | 4,939 | 6,431 | (1,492) | (23.2) | % | ||||||||||||||||||
Net income | $ | 10,458 | $ | 16,859 | $ | (6,401) | (38.0) | % |
Net Revenue | Direct Operating Expenses | ||||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | $ Change | % Change | 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
Subscription Digital Marketing Solutions | $ | 68,021 | $ | 60,347 | $ | 7,674 | 12.7 | % | $ | 48,513 | $ | 42,144 | $ | 6,369 | 15.1 | % | |||||||||||||||||||||||||||||||
Digital Advertising | 103,452 | 85,252 | 18,200 | 21.3 | % | 73,064 | 57,884 | 15,180 | 26.2 | % | |||||||||||||||||||||||||||||||||||||
Broadcast Advertising | 164,447 | 158,422 | 6,025 | 3.8 | % | 113,869 | 108,667 | 5,202 | 4.8 | % | |||||||||||||||||||||||||||||||||||||
Other | 6,881 | 3,358 | 3,523 | 104.9 | % | 6,135 | 3,142 | 2,993 | 95.3 | % | |||||||||||||||||||||||||||||||||||||
Total | $ | 342,801 | $ | 307,379 | $ | 35,422 | 11.5 | % | $ | 241,581 | $ | 211,837 | $ | 29,744 | 14.0 | % |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
2026 Notes | $ | 27,877 | $ | 27,834 | |||||||
2023 Notes | — | 642 | |||||||||
Term Loans | — | 161 | |||||||||
Capital leases and other | 803 | 33 | |||||||||
Deferred financing costs | 1,359 | 1,129 | |||||||||
Interest income | (1) | (19) | |||||||||
Interest expense, net | $ | 30,038 | $ | 29,780 |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash and cash equivalents | $ | 27,046 | $ | 31,289 | |||||||
Restricted cash | 495 | 494 | |||||||||
Cash provided by operating activities | 32,106 | 38,104 | |||||||||
Cash used in investing activities | (35,354) | (6,085) | |||||||||
Cash used in financing activities | (20,210) | (83,959) | |||||||||
Net decrease in cash and cash equivalents and restricted cash | $ | (23,458) | $ | (51,940) |
Exhibit | Description | |||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
TOWNSQUARE MEDIA, INC. | |||||
Date: November 9, 2022 | |||||
By: | /s/ Stuart Rosenstein | ||||
Name: Stuart Rosenstein | |||||
Title: Executive Vice President & Chief Financial Officer | |||||
By: | /s/ Robert Worshek | ||||
Name: Robert Worshek | |||||
Title: Senior Vice President, Chief Accounting Officer |
Dated: November 9, 2022 | By: | /s/ Stuart Rosenstein | |||||||||
Name: Stuart Rosenstein | |||||||||||
Title: Executive Vice President and Chief Financial Officer |
Dated: November 9, 2022 | By: | /s/ Bill Wilson | |||||||||
Name: Bill Wilson | |||||||||||
Title: Chief Executive Officer |
Dated: November 9, 2022 | /s/ Stuart Rosenstein | |||||||
Name: Stuart Rosenstein | ||||||||
Title: Executive Vice President and Chief Financial Officer |
Dated: November 9, 2022 | /s/ Bill Wilson | |||||||
Name: Bill Wilson | ||||||||
Title: Chief Executive Officer |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Accounts receivable allowance | $ 5,581 | $ 6,743 |
Deferred financing costs | $ 6,844 | $ 8,479 |
Class A common stock | ||
Common par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common shares issued (in shares) | 12,881,711 | 12,573,654 |
Common shares outstanding (in shares) | 12,881,711 | 12,573,654 |
Treasury shares outstanding (in shares) | 25,623 | 0 |
Class B common stock | ||
Common par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common shares issued (in shares) | 815,296 | 815,296 |
Common shares outstanding (in shares) | 815,296 | 815,296 |
Class C common stock | ||
Common par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common shares issued (in shares) | 3,461,341 | 3,461,341 |
Common shares outstanding (in shares) | 3,461,341 | 3,461,341 |
Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Dec. 16, 2021
USD ($)
|
May 13, 2021
shares
|
Mar. 09, 2021
shares
|
Mar. 31, 2022
shares
|
|
Issuance of stock (in shares) | 150,000 | |||
Warrants | Oaktree | ||||
Securities repurchased (in shares) | 8,814,980 | |||
Class A | Repurchase Plan | ||||
Repurchase amount | $ | $ 50 | |||
Period in force | 3 years | |||
Class A | Oaktree | ||||
Securities repurchased (in shares) | 1,595,224 | |||
Class B | Oaktree | ||||
Securities repurchased (in shares) | 2,151,373 | |||
Class C | ||||
Conversion of convertible securities (in shares) | 2,625,000 | |||
Conversion ratio | 1 |
Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|||
Cash flows from operating activities: | ||||
Net income | $ 10,458 | $ 16,859 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 13,546 | 14,546 | ||
Amortization of deferred financing costs | 1,359 | 1,129 | ||
Non-cash lease income | (298) | (106) | ||
Net deferred taxes and other | 4,413 | 6,070 | ||
Provision for doubtful accounts | 1,429 | 1,718 | ||
Stock-based compensation expense | 2,430 | 2,833 | ||
(Gain) loss on repurchases, extinguishment and modification of debt | (108) | 5,997 | ||
Trade activity, net | (3,496) | (9,994) | ||
Impairment of long-lived assets, intangible assets and investments | 20,197 | 95 | ||
Unrealized loss (gain) on investment | 1,934 | (2,924) | ||
Content rights acquired | (19,320) | 0 | ||
Amortization of content rights | 3,124 | 0 | ||
Change in content rights liabilities | 17,397 | 0 | ||
Other | (815) | (199) | ||
Changes in assets and liabilities, net of acquisitions: | ||||
Accounts receivable | (4,900) | (1,148) | ||
Prepaid expenses and other assets | (1,253) | 3,259 | ||
Accounts payable | (123) | 1,409 | ||
Accrued expenses | (3,916) | (569) | ||
Accrued interest | (9,674) | (49) | ||
Other long-term liabilities | (278) | (789) | ||
Net cash provided by operating activities - continuing operations | 32,106 | 38,137 | ||
Net cash used in operating activities - discontinued operations | 0 | (33) | ||
Net cash provided by operating activities | 32,106 | 38,104 | ||
Cash flows from investing activities: | ||||
Payment for acquisition | (18,419) | 0 | ||
Purchase of property and equipment | (13,100) | (7,840) | ||
Purchase of investments | (100) | (278) | ||
Purchase of digital assets | (4,997) | 0 | ||
Proceeds from insurance recoveries | 452 | 362 | ||
Proceeds from sale of assets and investment related transactions | 810 | 1,671 | ||
Net cash used in investing activities | (35,354) | (6,085) | ||
Cash flows from financing activities: | ||||
Repayment of term loans | 0 | (272,381) | ||
Proceeds from the issuance of 2026 Notes | 0 | 550,000 | ||
Prepayment fee on 2023 Notes | 0 | (4,443) | ||
Deferred financing costs | 0 | (9,027) | ||
Repurchase of Oaktree securities | 0 | (80,394) | ||
Transaction costs related to Oaktree securities repurchase | 0 | (1,556) | ||
Proceeds from stock options exercised | 790 | 10,931 | ||
Repurchase of stock | (225) | (1,400) | ||
Cash distribution to non-controlling interests | (1,820) | (2,216) | ||
Repayments of capitalized obligations | (105) | (57) | ||
Net cash used in financing activities | (20,210) | (83,959) | ||
Cash and cash equivalents and restricted cash: | ||||
Net decrease in cash, cash equivalents and restricted cash | (23,458) | (51,940) | ||
Beginning of period | 50,999 | 83,723 | ||
End of period | 27,541 | 31,783 | ||
Cash payments: | ||||
Interest | 38,284 | 28,693 | ||
Income taxes | 1,049 | 634 | ||
Supplemental Disclosure of Non-cash Activities: | ||||
Investments acquired in exchange for advertising | [1] | 2,750 | 6,438 | |
Property and equipment acquired in exchange for advertising | [1] | 726 | 1,945 | |
Accrued capital expenditures | 45 | 120 | ||
Accrued financing fees | 0 | 150 | ||
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 | 7,982 | 7,695 | ||
Right-of-use assets obtained in exchange for operating lease obligations | 8,923 | 2,246 | ||
Reconciliation of cash, cash equivalents and restricted cash | ||||
Cash and cash equivalents | 27,046 | 31,289 | ||
Restricted cash | 495 | 494 | ||
Cash, cash equivalents, and restricted cash | 27,541 | 31,783 | ||
2026 Notes | ||||
Cash flows from financing activities: | ||||
Repurchase of Notes | (18,850) | 0 | ||
2023 Notes | ||||
Cash flows from financing activities: | ||||
Repurchase of Notes | $ 0 | $ (273,416) | ||
|
Organization and Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Description of the Business 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 integrated and diversified products and solutions enable local, regional and national advertisers to target audiences across multiple platforms, including digital, mobile, social, video, streaming, e-commerce, radio and events. Our assets include a subscription digital marketing services business (“Townsquare Interactive”), providing website design, creation and hosting, search engine optimization, social platforms and online reputation management for approximately 29,850 small to medium sized businesses; a robust digital advertising division (“Townsquare Ignite,” or “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 357 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. Basis of Presentation The accompanying Unaudited Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes thereto included in the Company's Annual Report on Form 10-K (the "2021 Annual Report on Form 10-K"), as well as the Company's Form 10-K/A, for the year ended December 31, 2021. The accompanying unaudited interim Consolidated Financial Statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, with all significant intercompany balances and transactions eliminated in consolidation. These financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. All adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of results of operations and financial condition as of the end of the interim periods have been included. The results of operations for the three and nine months ended September 30, 2022, cash flows for the nine months ended September 30, 2022, and the Company’s financial condition as of such date are not necessarily indicative of the results of operations or cash flows that can be expected for, or the Company’s financial condition as of, any other interim period or for the fiscal year ending December 31, 2022. The Consolidated Balance Sheet as of December 31, 2021 is derived from the audited Consolidated Financial Statements at that date. Segment Reporting The Company’s operations are organized internally by the types of products and services provided. In December of 2021, the Company changed its reporting segments in order to reflect its strategic focus, organizational structure and the information reviewed by its Chief Operating Decision Maker ("CODM") as a digital media and digital marketing solutions company with market leading radio stations, represented by three segments: Subscription Digital Marketing Solutions, which includes the results of the Company’s subscription digital marketing solutions business, Townsquare Interactive; Digital Advertising, which includes digital advertising on its owned and operated digital properties and its digital programmatic advertising platform; and Broadcast Advertising, which includes our local, regional and national advertising products and solutions delivered via terrestrial radio broadcast, and other miscellaneous revenue that is associated with its broadcast advertising platform. The remainder of the Company’s business is reported in the Other category, which includes owned and operated live events. The Company has presented segment information for the three and nine months ended September 30, 2021 in conformity with the current period’s segment information. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, the Company evaluates its significant estimates, including those related to assumptions used in determining the fair value of assets and liabilities acquired in a business combination, impairment testing of intangible assets, valuation and impairment testing of long-lived tangible assets and investments, the present value of leasing arrangements, share-based payment expense and the calculation of allowance for doubtful accounts and income taxes. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the result of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual amounts and results may differ materially from these estimates under different assumptions or conditions.
|
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies There have been no significant changes in the Company’s accounting policies since December 31, 2021. For the Company's detailed accounting policies please refer to the Consolidated Financial Statements and related notes thereto included in the Company's 2021 Annual Report on Form 10-K and 10-K/A. Recently Issued Standards That Have Not Yet Been Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which adds a new Topic 326 to the Codification and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. The guidance will remove all recognition thresholds and will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument's contractual life. The new guidance is effective for smaller reporting companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption, either of the entire standard or only the provisions that eliminate or modify requirements, is permitted. The Company expects to adopt the new guidance in the first quarter of 2023. The Company is evaluating the impacts of the adoption of this ASU and does not anticipate the impact on its Consolidated Financial Statements to be significant. On August 16, 2022, the Inflation Reduction Act (the "IRA") was signed into law in the U.S. Among other changes, the IRA introduced an excise tax on certain stock repurchases by certain covered corporations for taxable years beginning after December 31, 2022 and several tax incentives to promote clean energy. Based on the Company's current analysis and pending future guidance to be issued by the U.S. Treasury, the Company does not anticipate that these provisions will have a significant impact on its Consolidated Financial Statements.
|
Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition The following tables present a disaggregation of our revenue by reporting segment and revenue from political sources and all other sources (in thousands) for the three and nine months ended September 30, 2022 and 2021:
Revenue from contracts with customers is recognized as an obligation until the terms of a customer contract are satisfied; generally this occurs with the transfer of control as we satisfy contractual performance obligations over time. Our contractual performance obligations include the performance of digital marketing solutions, placement of internet-based advertising campaigns, broadcast of commercials on our owned and operated radio stations, and the operation of live events. Revenue is measured at contract inception as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Our contracts are at a fixed price at inception and do not include any variable consideration or financing components by normal course of business practice. Sales, value add, and other taxes that are collected concurrently with revenue producing activities, are excluded from revenue. The primary sources of net revenue are the sale of digital and broadcast advertising solutions on our owned and operated websites, radio stations’ online streams, and mobile applications, radio stations, and on third-party websites through our in-house digital programmatic advertising platform. Through our digital programmatic advertising platform, we are able to hyper-target audiences for our local, regional and national advertisers by combining first and third-party audience and geographic location data, providing them the ability to reach a high percentage of their online audience. We deliver these solutions across desktop, mobile, connected TV, email, paid search and social media platforms utilizing display, video and native executions. We also offer subscription digital marketing solutions under the brand name Townsquare Interactive to small and mid-sized local and regional businesses in markets outside the top 50 across the United States, including the markets in which we operate radio stations. Townsquare Interactive offers traditional and mobile-enabled website development and hosting services, e-commerce platforms, search engine and online directory optimization services, online reputation monitoring, social media management, and website retargeting. Political net revenue includes the sale of advertising for political advertisers. Contracted performance obligations under political contracts consist of the broadcast and placement of digital advertisements. Management views political revenue separately based on the episodic nature of election cycles and local issues calendars. Net revenue for digital and broadcast advertisements are recognized as the contractual performance obligations for Townsquare services are satisfied. We measure progress towards the satisfaction of our contractual performance obligations in accordance with the contractual arrangement. We recognize the associated contractual revenue as delivery takes place and the right to invoice for services performed is met. Our advertising contracts are short-term (less than one year) and payment terms are generally net 30-60 days for traditional customer contracts and net 60-90 days for national agency customer contracts. Our billing practice is to invoice customers on a monthly basis for services delivered to date (representing the right to invoice). Our contractual arrangements do not include rights of return and do not include any significant judgments by nature of the products and services. Net revenue from digital subscription-based contractual performance obligations is recognized ratably over time as our performance obligations are satisfied. Subscription-based service fees are typically billed in advance of the month of service at a fixed monthly fee that is contractually agreed upon at contract inception. The measure of progress in such arrangements is the number of days of successful delivery of the contracted service. For all customer contracts, we evaluate whether we are the principal (i.e., report revenue on a gross basis) or the agent (i.e., report revenue on a net basis). Generally, we report revenue for advertising placed on Townsquare properties on a gross basis (the amount billed to our customers is recorded as revenue, and the amount paid to our publishers is recorded as a cost of revenue). We are the principal because we control the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to monetize the advertising inventory, being primarily responsible to our customers, having discretion in establishing pricing, or a combination of these factors. We also generate revenue through agency relationships in which revenue is reported net of agency commissions. Agency commissions are calculated based on a stated percentage applied to gross billing revenue for advertisers that use agencies. The following tables provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands):
We receive payments from customers based upon contractual billing schedules; contract receivables are recognized in the period the Company provides services when the Company’s right to consideration is unconditional. Payment terms vary by the type and location of our customer and the products or services offered. Payment terms for amounts invoiced are typically net 30-60 days. Our contract liabilities include cash payments received or due in advance of satisfying our performance obligations and digital subscriptions in which payment is received in advance of the service and month. These contract liabilities are recognized as revenue as the related performance obligations are satisfied. As of September 30, 2022, and December 31, 2021, the balance in the contract liabilities was $10.7 million and $10.2 million, respectively. The increase in the contract liabilities balance at September 30, 2022 is primarily driven by cash payments received or due in advance of satisfying our performance obligations, offset by $0.6 million and $8.2 million of recognized revenue for the three and nine months ended September 30, 2022, respectively. For the three and nine months ended September 30, 2021, respectively, we recognized $0.9 million and $7.4 million of revenue that was previously included in our deferred revenue balance. No significant changes in the time frame of the satisfaction of contract liabilities have occurred during the three and nine months ended September 30, 2022. Our capitalized contract acquisition costs include amounts related to sales commissions paid for signed contracts with perceived durations exceeding one year. We defer the related sales commission costs and amortize such costs to expense in a manner that is consistent with how the related revenue is recognized over the duration of the related contracts. We have evaluated the average customer contract duration (initial term and any renewals) to determine the appropriate amortization period for these contractual arrangements. Capitalized contract acquisition costs are recognized in prepaid expenses and other current assets in the accompanying consolidated balance sheets. As of September 30, 2022 and December 31, 2021, we had a balance of $6.4 million and $5.4 million, respectively, in capitalized contract acquisition costs and recognized $1.3 million and $3.7 million of amortization for the three and nine months ended September 30, 2022, respectively. For the three and nine months ended September 30, 2021, we recognized $1.1 million and $3.2 million of amortization, respectively. No impairment losses have been recognized or changes made to the time frame for performance of the obligations related to deferred contract assets during the three and nine months ended September 30, 2022 and 2021. Arrangements with Multiple Performance Obligations In contracts with multiple performance obligations, we identify each performance obligation and evaluate whether the performance obligations are distinct within the context of the contract at contract inception. When multiple performance obligations are identified, we identify how control transfers to the customer for each distinct contract obligation and determine the period when the obligations are satisfied. If obligations are satisfied in the same period, no allocation of revenue is deemed to be necessary. In the event performance obligations within a bundled contract do not run concurrently, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or by using expected cost-plus margins. Performance obligations that are not distinct at contract inception are combined. Performance Obligations We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Amounts related to performance obligations with expected durations of greater than one year are at a fixed price per unit and do not include any upfront or minimum payments requiring any estimation or allocation of revenue.
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Acquisitions and Divestitures |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions and Divestitures On March 24, 2022, the Company executed an asset purchase agreement to acquire Cherry Creek Broadcasting LLC (“Cherry Creek”). Following regulatory approval, the acquisition was completed on June 17, 2022 for a cash purchase price of $18.4 million, net of closing adjustments. The purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. The Company expects to finalize the allocation of the purchase price for Cherry Creek as soon as possible, but in any event, no later than one year from the acquisition date. The preliminary purchase price allocation is subject to change pending a final valuation of the assets and liabilities acquired. We require additional time specifically related to obtaining information regarding acquired FCC licenses and property and equipment. The preliminary acquisition date fair values of major classes of net assets acquired are as follows (in thousands):
(1) Intangible assets include FCC licenses and content rights in the amount of $8.0 million and $0.7 million, respectively. Goodwill totaling $8.4 million represents the excess of the Cherry Creek purchase price over the fair value of net assets acquired, representing future economic benefits that are expected to be achieved as a result of the acquisition, and is included in the Broadcast Advertising segment. Goodwill generated from the Cherry Creek acquisition is deductible for income tax purposes. The Company believes the acquisition of Cherry Creek, which includes a portfolio of local media brands, will further its goal of becoming the number one local media company in markets outside of the Top 50 in the United States. In addition, the acquisition provides an opportunity to bring our digital assets and solutions to the Cherry Creek markets and accelerate their digital growth with our Digital First strategy. The results of Cherry Creek's operations have been included in our Unaudited Consolidated Financial Statements, following the closing of the acquisition on June 17, 2022. Pro forma information has not been presented because the effect of the acquisition is not material. Simultaneously, due to FCC ownership limitations, the Company sold six radio stations in Missoula, MT for an immaterial amount and has placed one radio station in Tri-Cities, WA in a divestiture trust. On July 19, 2022, the Company acquired a radio station in Tri-Cities, WA for an immaterial amount.
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Property and Equipment, net | Property and Equipment, net Property and equipment, net consisted of the following (in thousands):
Depreciation and amortization expense for property and equipment was $4.2 million and $4.5 million for the three months ended September 30, 2022 and 2021, respectively $12.7 million and $13.7 million for the nine months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022, the Company sold land and a building in Quincy-Hannibal, IL. The Company recognized $0.8 million in impairment charges related to the sale. There were no impairment charges related to long-lived assets for the three and nine months ended September 30, 2021. On June 24, 2022, the Company executed a lease for office space of approximately 11,900 square feet in Phoenix, AZ, in order to support the growth of the Subscription Digital Marketing Solutions segment. The lease commenced in the third quarter of 2022 and has an eleven-year term, with the option to extend the lease for two consecutive five-year periods. The Company had no material right of use assets related to its finance leases as of September 30, 2022 and December 31, 2021.
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Indefinite-lived intangible assets Indefinite-lived assets consist of FCC broadcast licenses, goodwill and investment in digital assets. FCC Broadcast Licenses FCC licenses represent a substantial portion of the Company’s total assets. The FCC licenses are renewable in the ordinary course of business, generally for a maximum of eight years. The fair value of FCC licenses is primarily dependent on the future cash flows of the radio markets and other assumptions, including, but not limited to, forecasted revenue growth rates, profit margins and a risk-adjusted discount rate. The Company has selected December 31st as the annual testing date. The Company evaluates its FCC licenses for impairment annually or more frequently if events or changes in circumstances indicate that the assets might be impaired. Due to changes in forecasted traditional broadcast revenue in the markets in which we operate in and increases in the weighted average cost of capital, the Company quantitatively evaluated the fair value of its FCC licenses at September 30, June 30, and March 31, 2022, respectively. The key assumptions used in applying the direct valuation method are summarized as follows:
* Market share assumption used when reliable third-party data is available. Otherwise, Company results and forecasts are utilized. Based on the results of interim impairment assessments of our FCC licenses, as of September 30, 2022 we incurred impairment charges of $10.3 million and $15.5 million for FCC licenses in eight of our 74 local markets for the three and nine months ended September 30, 2022, respectively. The impairment charges were primarily driven by increases in the discount rate applied in the valuation of our FCC licenses due to an increase in the weighted average cost of capital and the estimate of initial capital costs due to rising prices. The Company recorded no impairment charges on its FCC licenses for the three and nine months ended September 30, 2021. Unfavorable changes in key assumptions utilized in the impairment assessment of our FCC licenses may affect future testing results. For example, keeping all other assumptions constant, a 100-basis point increase in the weighted average cost of capital as of the date of our last quantitative assessment would cause the estimated fair values of our FCC licenses to decrease by $51.8 million, which would have resulted in an impairment charge of $25.6 million. Assumptions used to estimate the fair value of our FCC licenses are also dependent upon the expected performance and growth of our traditional broadcast operations. In the event our broadcast revenue experiences actual or anticipated declines, such declines will have a negative impact on the estimated fair value of our FCC licenses, and the Company could recognize additional impairment charges, which could be material. Goodwill For goodwill impairment testing, the Company has selected December 31st as the annual testing date. In addition to the annual impairment test, the Company regularly assesses whether a triggering event has occurred, which would require interim impairment testing. As of December 31, 2021, the fair values of our National Digital, Townsquare Ignite, Analytical Services, Townsquare Interactive and Live Events reporting units were in excess of their respective carrying values by approximately 703%, 164%, 281%, 497% and 117%, respectively. The local advertising businesses reporting unit had no goodwill as of December 31, 2021. The Company considered whether any events have occurred or circumstances have changed from the last quantitative analysis performed as of December 31, 2021 that would indicate that the fair value of the Company's reporting units may be below their carrying amounts. Based on such analysis, the Company determined that there have been no indicators that the fair value of its reporting units may be below their carrying amounts as of September 30, 2022. Changes in the carrying value of the Company's goodwill by segment during the nine months ended September 30, 2022 are summarized as follows (in thousands):
(1) Based on the preliminary purchase price allocation. For further information see Note 4, Acquisitions and Divestitures. Digital Assets During the first quarter of 2022, the Company invested an aggregate of $5.0 million in digital assets. They are accounted for as indefinite-lived intangible assets in accordance with ASC 350, Intangibles - Goodwill and Other, included as a component of intangible assets, net on the Consolidated Balance Sheet. We have ownership of and control over our digital assets and we use third-party custodial services to secure it. Any decrease in the digital assets' fair values below our carrying values at any time subsequent to acquisition requires the Company to recognize impairment charges. No upward revisions for any market price increases are recognized until a sale of the digital assets occurs. The fair value of the digital assets was based upon quoted prices (unadjusted) on the active exchange that the Company determined was the principal market for our digital assets, Level 1 measurements under the fair value measurement hierarchy established under Fair Value Measurement (Topic 820). The Company performed an analysis to identify whether events or changes in circumstances, principally decreases in the quoted prices on the active exchange, indicated that it was more likely than not that our digital assets were impaired. In determining if an impairment had occurred, the Company considered the lowest market price of one unit of digital asset quoted on the active exchange since the date the Company acquired the digital assets. Any observed declines in the market values of our digital assets below their current carrying values results in an impairment loss equal to the difference between the digital assets carrying values and the lowest observed market price, even if the overall market values of these assets subsequently increase. The Company recorded no impairment losses due to changes in the fair value of the Company's digital assets during three months ended September 30, 2022. During the nine months ended September 30, 2022, the Company recorded $2.6 million in impairment losses due to changes in the fair value of the Company's digital assets observed during the period. As of September 30, 2022, the carrying value of the Company's digital assets is $2.4 million. The Company views its investment in digital assets as liquid due to the ability to readily convert the investment to cash through sale on an active exchange. The Company may decrease its holdings of digital assets at any time based on our view of market conditions. Definite-lived intangible assets The Company’s definite-lived intangible assets were acquired primarily in various acquisitions as well as in connection with the acquisition of software and music licenses. Content Rights The Company enters into multi-year content licensing agreements pursuant to which the Company is required to make payments over the term of the license agreement. These licensing agreements are accounted for as a license of program material in accordance with ASC 920-350, Broadcasters - Intangibles - Goodwill and Other. The Company capitalizes the content licenses and records a related liability at fair value, which includes a discount, on the effective date of the respective license agreement. Amortization of capitalized content licenses is included as a component of direct operating expenses in the Consolidated Statement of Operations. The difference between the gross and net liability is amortized over the term of the license agreements and reflected as a component of interest expense. The following tables present details of our intangible assets as of September 30, 2022 and December 31, 2021, respectively (in thousands):
Amortization for definite-lived intangible assets was $1.5 million and $0.3 million for the three months ended September 30, 2022 and 2021, respectively and $4.0 million and $0.8 million for the nine months ended September 30, 2022 and 2021, respectively. Estimated future amortization expense for each of the five succeeding fiscal years and thereafter as of September 30, 2022 is as follows (in thousands):
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Investments |
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Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Long-term investments consists of minority holdings in various companies. As management does not exercise significant control over operating and financial policies of the investees, the investments are not consolidated or accounted for under the equity method of accounting. The initial valuation of equity securities is based upon an estimate of market value at the time of investment, or upon a combination of valuation analyses using both observable and unobservable inputs categorized as Level 2 and Level 3 within the ASC 820 framework, respectively. In accordance with ASC 321, Investments - Equity Securities, the Company measures its equity securities at cost minus impairment, as their fair values are not readily determinable and the investments do not qualify for the net asset value per share practical expedient. The Company monitors its investments for any subsequent observable price changes in orderly transactions for the identical or a similar investment of the same investee, at which time the Company would adjust the then current carrying values of the related investment. Additionally, the Company evaluates its investments for any indicators of impairment. Equity securities measured at cost minus impairment During the nine months ended September 30, 2022, the Company acquired a $2.1 million interest in three new investees and an additional $0.8 million interest in an existing investee. There were no impairment charges recorded for the three months ended September 30, 2022. The Company recorded a $1.2 million impairment charge for an investee during the nine months ended September 30, 2022, based on the implied fair value of the investee as a result of a private transaction. There were no impairment charges recorded for the three and nine months ended September 30, 2021, respectively. Equity securities measured at fair value On July 2, 2021, one of the Company's investees completed its registration with the SEC and became a publicly traded company. Based on the market price of the investee's common stock as of September 30, 2022, the fair value of the Company's investment in the common stock of the investee was approximately $1.4 million. As a result, the Company recorded an unrealized gain of $0.2 million during the three months ended September 30, 2022. During the nine months ended September 30, 2022, the Company recorded a total net unrealized loss of $1.9 million as a result of changes in the fair value of the investee's common stock during the period. During the three and nine months ended September 30, 2021, the Company recorded an unrealized net gain of $2.9 million. Unrealized gains and losses are included as a component of other expense (income) on the Unaudited Consolidated Financial Statements. The market price of the investee's common stock is categorized as Level 1 within the ASC 820 framework.
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Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Total debt outstanding is summarized as follows (in thousands):
During the nine months ended September 30, 2022, the Company voluntarily repurchased an aggregate $19.2 million principal amount of its 2026 Notes at or below par, plus accrued interest. The Company wrote-off approximately $0.3 million of unamortized deferred financing costs, recognizing a total net gain of $0.1 million in connection with the voluntary repurchases of its 2026 Notes. The repurchased notes were canceled by the Company. The 2026 Notes indenture contains certain covenants that may limit, among other things, our ability to; incur additional indebtedness, declare or pay dividends, redeem stock, transfer or sell assets, make investments or agree to certain restrictions on the ability of restricted subsidiaries to make payments to the Company. Certain of these covenants will be suspended if the 2026 Notes are assigned an investment grade rating by Standard & Poor’s Investors Ratings Services, Moody’s Investors Service, Inc. or Fitch Ratings, Inc. and no event of default has occurred and is continuing. The Company was in compliance with its covenants under the 2026 Notes indenture as of September 30, 2022. As of September 30, 2022, based on available market information, the estimated fair value of the 2026 Notes was $481.7 million. The Company used Level 2 measurements under the fair value measurement hierarchy established under Fair Value Measurement (Topic 820). Annual maturities of the Company's long-term debt as of September 30, 2022 are as follows (in thousands):
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Income Taxes |
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Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective tax rate for the three months ended September 30, 2022 and 2021 was approximately 44.8% and 20.6%, respectively. The Company's effective tax rate for the nine months ended September 30, 2022 and 2021 was approximately 32.1% and 27.6%, respectively. The increase in the effective tax rate for the three and nine months ended September 30, 2022 is primarily driven by discrete items for the period, as well as non deductible expenses and increases in the valuation allowance for certain interest expense carryforwards. The effective tax rate may vary significantly from period to period, and can be influenced by many factors. These factors include, but are not limited to, changes to the statutory rates in the jurisdictions where the Company has operations and changes in the valuation of deferred tax assets and liabilities. The difference between the effective tax rate and the federal statutory rate of 21% primarily relates to certain non-deductible items, state and local income taxes and the valuation allowance for deferred tax assets.
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Net Income Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | Net Income Per Share Basic earnings per common share (“EPS”) is generally calculated as income available to common shareholders divided by the weighted average number of common shares outstanding. Diluted EPS is generally calculated as income available to common shareholders divided by the weighted average number of common shares outstanding plus the dilutive effect of common share equivalents. The following table sets forth the computations of basic and diluted net income per share for the three and nine months ended September 30, 2022 and 2021 (in thousands, except per share data):
(1) On March 9, 2021, the Company repurchased 8,814,980 warrants outstanding from Oaktree. On August 16, 2021, a warrant holder exercised 152,074 warrants, and on December 14, 2021, a warrant holder exercised 10,622 warrants, each as more fully discussed in Note 11, Stockholders' Equity, included in the Company's 2021 Annual Report on Form 10-K and 10-K/A. For the three and nine months ended September 30, 2022, there were no warrants outstanding. Income (loss) attributable to participating shares and diluted income (loss) per share for 2021 was calculated utilizing the weighted-average method, as applicable. The Company had the following dilutive securities that were not included in the computation of diluted net income per share as they were considered anti-dilutive (in thousands):
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Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting Operating segments are organized internally by type of products and services provided. Based on the information reviewed by the Company's CEO in his capacity as CODM, the Company has identified three segments: Subscription Digital Marketing Solutions, Digital Advertising and Broadcast Advertising. The remainder of our business is reported in the Other category. The Company operates in one geographic area. The Company's assets and liabilities are managed within markets outside the top 50 across the United States where the Company conducts its business and are reported internally in the same manner as the Consolidated Financial Statements; thus, no additional information regarding assets and liabilities of the Company’s reportable segments is produced for the Company's CEO or included in these Consolidated Financial Statements. Intangible assets consist principally of FCC broadcast licenses and other definite-lived intangible assets and primarily support the Company’s Broadcast Advertising segment. For further information see Note 6, Goodwill and Other Intangible Assets, Net. The Company does not have any material inter-segment sales. The Company's management evaluates segment operating income, which excludes unallocated corporate expenses and the impact of certain items that are not directly attributable to the reportable segments' underlying operating performance, and primarily includes expenses related to corporate stewardship and administration activities, transaction related costs and non-cash impairment charges. The following tables present the Company's reportable segment results for the three months ended September 30, 2022 (in thousands):
(1) Includes integration costs of $0.9 million related to the acquisition of Cherry Creek. These costs were predominantly for travel and compensation. The following table presents the Company's reportable segment results for the three months ended September 30, 2021 (in thousands):
The following tables present the Company's reportable segment results for the nine months ended September 30, 2022 (in thousands):
(1) Includes integration costs of $1.2 million related to the acquisition of Cherry Creek. These costs were predominantly for travel and compensation. The following tables present the Company's reportable segment results for the nine months ended September 30, 2021 (in thousands):
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Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Unaudited Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes thereto included in the Company's Annual Report on Form 10-K (the "2021 Annual Report on Form 10-K"), as well as the Company's Form 10-K/A, for the year ended December 31, 2021. The accompanying unaudited interim Consolidated Financial Statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, with all significant intercompany balances and transactions eliminated in consolidation. These financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. All adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of results of operations and financial condition as of the end of the interim periods have been included. The results of operations for the three and nine months ended September 30, 2022, cash flows for the nine months ended September 30, 2022, and the Company’s financial condition as of such date are not necessarily indicative of the results of operations or cash flows that can be expected for, or the Company’s financial condition as of, any other interim period or for the fiscal year ending December 31, 2022. The Consolidated Balance Sheet as of December 31, 2021 is derived from the audited Consolidated Financial Statements at that date.
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Segment Reporting | Segment Reporting The Company’s operations are organized internally by the types of products and services provided. In December of 2021, the Company changed its reporting segments in order to reflect its strategic focus, organizational structure and the information reviewed by its Chief Operating Decision Maker ("CODM") as a digital media and digital marketing solutions company with market leading radio stations, represented by three segments: Subscription Digital Marketing Solutions, which includes the results of the Company’s subscription digital marketing solutions business, Townsquare Interactive; Digital Advertising, which includes digital advertising on its owned and operated digital properties and its digital programmatic advertising platform; and Broadcast Advertising, which includes our local, regional and national advertising products and solutions delivered via terrestrial radio broadcast, and other miscellaneous revenue that is associated with its broadcast advertising platform. The remainder of the Company’s business is reported in the Other category, which includes owned and operated live events. The Company has presented segment information for the three and nine months ended September 30, 2021 in conformity with the current period’s segment information.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, the Company evaluates its significant estimates, including those related to assumptions used in determining the fair value of assets and liabilities acquired in a business combination, impairment testing of intangible assets, valuation and impairment testing of long-lived tangible assets and investments, the present value of leasing arrangements, share-based payment expense and the calculation of allowance for doubtful accounts and income taxes. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the result of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual amounts and results may differ materially from these estimates under different assumptions or conditions.
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Recently Issued Standards That Have Not Yet Been Adopted | Recently Issued Standards That Have Not Yet Been Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which adds a new Topic 326 to the Codification and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. The guidance will remove all recognition thresholds and will require companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument's contractual life. The new guidance is effective for smaller reporting companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption, either of the entire standard or only the provisions that eliminate or modify requirements, is permitted. The Company expects to adopt the new guidance in the first quarter of 2023. The Company is evaluating the impacts of the adoption of this ASU and does not anticipate the impact on its Consolidated Financial Statements to be significant. On August 16, 2022, the Inflation Reduction Act (the "IRA") was signed into law in the U.S. Among other changes, the IRA introduced an excise tax on certain stock repurchases by certain covered corporations for taxable years beginning after December 31, 2022 and several tax incentives to promote clean energy. Based on the Company's current analysis and pending future guidance to be issued by the U.S. Treasury, the Company does not anticipate that these provisions will have a significant impact on its Consolidated Financial Statements.
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Revenue Recognition | The primary sources of net revenue are the sale of digital and broadcast advertising solutions on our owned and operated websites, radio stations’ online streams, and mobile applications, radio stations, and on third-party websites through our in-house digital programmatic advertising platform. Through our digital programmatic advertising platform, we are able to hyper-target audiences for our local, regional and national advertisers by combining first and third-party audience and geographic location data, providing them the ability to reach a high percentage of their online audience. We deliver these solutions across desktop, mobile, connected TV, email, paid search and social media platforms utilizing display, video and native executions. We also offer subscription digital marketing solutions under the brand name Townsquare Interactive to small and mid-sized local and regional businesses in markets outside the top 50 across the United States, including the markets in which we operate radio stations. Townsquare Interactive offers traditional and mobile-enabled website development and hosting services, e-commerce platforms, search engine and online directory optimization services, online reputation monitoring, social media management, and website retargeting. Political net revenue includes the sale of advertising for political advertisers. Contracted performance obligations under political contracts consist of the broadcast and placement of digital advertisements. Management views political revenue separately based on the episodic nature of election cycles and local issues calendars. Net revenue for digital and broadcast advertisements are recognized as the contractual performance obligations for Townsquare services are satisfied. We measure progress towards the satisfaction of our contractual performance obligations in accordance with the contractual arrangement. We recognize the associated contractual revenue as delivery takes place and the right to invoice for services performed is met. Our advertising contracts are short-term (less than one year) and payment terms are generally net 30-60 days for traditional customer contracts and net 60-90 days for national agency customer contracts. Our billing practice is to invoice customers on a monthly basis for services delivered to date (representing the right to invoice). Our contractual arrangements do not include rights of return and do not include any significant judgments by nature of the products and services. Net revenue from digital subscription-based contractual performance obligations is recognized ratably over time as our performance obligations are satisfied. Subscription-based service fees are typically billed in advance of the month of service at a fixed monthly fee that is contractually agreed upon at contract inception. The measure of progress in such arrangements is the number of days of successful delivery of the contracted service. For all customer contracts, we evaluate whether we are the principal (i.e., report revenue on a gross basis) or the agent (i.e., report revenue on a net basis). Generally, we report revenue for advertising placed on Townsquare properties on a gross basis (the amount billed to our customers is recorded as revenue, and the amount paid to our publishers is recorded as a cost of revenue). We are the principal because we control the advertising inventory before it is transferred to our customers. Our control is evidenced by our sole ability to monetize the advertising inventory, being primarily responsible to our customers, having discretion in establishing pricing, or a combination of these factors. We also generate revenue through agency relationships in which revenue is reported net of agency commissions. Agency commissions are calculated based on a stated percentage applied to gross billing revenue for advertisers that use agencies. Arrangements with Multiple Performance Obligations In contracts with multiple performance obligations, we identify each performance obligation and evaluate whether the performance obligations are distinct within the context of the contract at contract inception. When multiple performance obligations are identified, we identify how control transfers to the customer for each distinct contract obligation and determine the period when the obligations are satisfied. If obligations are satisfied in the same period, no allocation of revenue is deemed to be necessary. In the event performance obligations within a bundled contract do not run concurrently, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers or by using expected cost-plus margins. Performance obligations that are not distinct at contract inception are combined. Performance Obligations We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Amounts related to performance obligations with expected durations of greater than one year are at a fixed price per unit and do not include any upfront or minimum payments requiring any estimation or allocation of revenue.
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following tables present a disaggregation of our revenue by reporting segment and revenue from political sources and all other sources (in thousands) for the three and nine months ended September 30, 2022 and 2021:
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Schedule of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers | The following tables provides information about receivables, contract assets and contract liabilities from contracts with customers (in thousands):
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Acquisitions and Divestitures (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation | The preliminary acquisition date fair values of major classes of net assets acquired are as follows (in thousands):
(1) Intangible assets include FCC licenses and content rights in the amount of $8.0 million and $0.7 million, respectively.
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Property and Equipment, net (Tables) |
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Schedule of Property and Equipment | Property and equipment, net consisted of the following (in thousands):
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assumptions Used in Annual Impairment Assessments | The key assumptions used in applying the direct valuation method are summarized as follows:
* Market share assumption used when reliable third-party data is available. Otherwise, Company results and forecasts are utilized.
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Schedule of Goodwill | Changes in the carrying value of the Company's goodwill by segment during the nine months ended September 30, 2022 are summarized as follows (in thousands):
(1) Based on the preliminary purchase price allocation. For further information see Note 4, Acquisitions and Divestitures.
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Schedule of Finite-Lived Intangible Assets | The following tables present details of our intangible assets as of September 30, 2022 and December 31, 2021, respectively (in thousands):
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Schedule of Indefinite-Lived Intangible Assets | The following tables present details of our intangible assets as of September 30, 2022 and December 31, 2021, respectively (in thousands):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization expense for each of the five succeeding fiscal years and thereafter as of September 30, 2022 is as follows (in thousands):
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Total debt outstanding is summarized as follows (in thousands):
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Schedule of Annual Maturities of Long-term Debt | Annual maturities of the Company's long-term debt as of September 30, 2022 are as follows (in thousands):
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Net Income Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings (Loss) Per Share, Basic and Diluted | The following table sets forth the computations of basic and diluted net income per share for the three and nine months ended September 30, 2022 and 2021 (in thousands, except per share data):
(1) On March 9, 2021, the Company repurchased 8,814,980 warrants outstanding from Oaktree. On August 16, 2021, a warrant holder exercised 152,074 warrants, and on December 14, 2021, a warrant holder exercised 10,622 warrants, each as more fully discussed in Note 11, Stockholders' Equity, included in the Company's 2021 Annual Report on Form 10-K and 10-K/A. For the three and nine months ended September 30, 2022, there were no warrants outstanding. Income (loss) attributable to participating shares and diluted income (loss) per share for 2021 was calculated utilizing the weighted-average method, as applicable. The Company had the following dilutive securities that were not included in the computation of diluted net income per share as they were considered anti-dilutive (in thousands):
|
Segment Reporting (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following tables present the Company's reportable segment results for the three months ended September 30, 2022 (in thousands):
(1) Includes integration costs of $0.9 million related to the acquisition of Cherry Creek. These costs were predominantly for travel and compensation. The following table presents the Company's reportable segment results for the three months ended September 30, 2021 (in thousands):
The following tables present the Company's reportable segment results for the nine months ended September 30, 2022 (in thousands):
(1) Includes integration costs of $1.2 million related to the acquisition of Cherry Creek. These costs were predominantly for travel and compensation. The following tables present the Company's reportable segment results for the nine months ended September 30, 2021 (in thousands):
|
Organization and Basis of Presentation (Details) |
9 Months Ended |
---|---|
Sep. 30, 2022
segment
business
radio_station
market
website
| |
Organization and Basis of Presentation [Line Items] | |
Number of small and medium sized markets in which entity operates | business | 29,850 |
Number of local websites (more than) | website | 400 |
Number of radio stations | radio_station | 357 |
Number of operating segments | segment | 3 |
United States | |
Organization and Basis of Presentation [Line Items] | |
Number of markets | market | 74 |
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 120,635 | $ 111,280 | $ 342,801 | $ 307,379 |
Subscription Digital Marketing Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 23,188 | 21,130 | 68,021 | 60,347 |
Digital Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 37,015 | 30,521 | 103,452 | 85,252 |
Broadcast Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 59,267 | 57,314 | 164,447 | 158,422 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 1,165 | 2,315 | 6,881 | 3,358 |
Net Revenue (ex Political) | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 119,048 | 110,705 | 339,266 | 305,601 |
Net Revenue (ex Political) | Subscription Digital Marketing Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 23,188 | 21,130 | 68,021 | 60,347 |
Net Revenue (ex Political) | Digital Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 36,915 | 30,521 | 103,155 | 85,252 |
Net Revenue (ex Political) | Broadcast Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 57,780 | 56,739 | 161,209 | 156,644 |
Net Revenue (ex Political) | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 1,165 | 2,315 | 6,881 | 3,358 |
Political | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 1,587 | 575 | 3,535 | 1,778 |
Political | Subscription Digital Marketing Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Political | Digital Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 100 | 0 | 297 | 0 |
Political | Broadcast Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 1,487 | 575 | 3,238 | 1,778 |
Political | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue Recognition - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Disaggregation of Revenue [Line Items] | |||||
Short-term contract liabilities (deferred revenue) | $ 10,702,000 | $ 10,702,000 | $ 10,208,000 | ||
Revenue recognized | 600,000 | $ 900,000 | 8,200,000 | $ 7,400,000 | |
Deferred costs | 6,426,000 | 6,426,000 | $ 5,428,000 | ||
Recognized amortization | 1,300,000 | 1,100,000 | 3,700,000 | 3,200,000 | |
Impairment loss | $ 0 | $ 0 | $ 0 | $ 0 | |
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Payment terms (in days) | 30 days | ||||
Minimum | Short-term contracts | |||||
Disaggregation of Revenue [Line Items] | |||||
Payment terms for local advertising contracts (in days) | 30 days | ||||
Payment terms for national agency advertising contracts (in days) | 60 days | ||||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Payment terms (in days) | 60 days | ||||
Maximum | Short-term contracts | |||||
Disaggregation of Revenue [Line Items] | |||||
Payment terms for local advertising contracts (in days) | 60 days | ||||
Payment terms for national agency advertising contracts (in days) | 90 days |
Revenue Recognition - Summary of Receivables, Contract Assets and Contract Liabilities from Contracts (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Contract receivables (accounts receivable) | $ 61,677 | $ 57,647 |
Short-term contract liabilities (deferred revenue) | 10,702 | 10,208 |
Contract Acquisition Costs | $ 6,426 | $ 5,428 |
Acquisitions and Divestitures - Narrative (Details) $ in Thousands |
Mar. 24, 2022
USD ($)
radio_station
|
---|---|
FCC Broadcast | Disposal Group, Disposed of by Sale, Not Discontinued Operations | MONTANA | |
Asset Acquisition, Contingent Consideration [Line Items] | |
Number of radio station disposed | radio_station | 6 |
FCC Broadcast | Disposal Group, Disposed of by Sale, Not Discontinued Operations | WASHINGTON | |
Asset Acquisition, Contingent Consideration [Line Items] | |
Number of radio station disposed | radio_station | 1 |
Cherry Creek Broadcasting LLC | |
Asset Acquisition, Contingent Consideration [Line Items] | |
Asset acquisition consideration transferred | $ | $ 18,419 |
Goodwill | $ | $ 8,377 |
Acquisitions and Divestitures - Schedule of Purchase Price Allocation (Details) - Cherry Creek Broadcasting LLC $ in Thousands |
Mar. 24, 2022
USD ($)
|
---|---|
Asset Acquisition [Line Items] | |
Net tangible assets acquired | $ 1,366 |
Intangible assets, net | 8,676 |
Goodwill | 8,377 |
Total Purchase Price | 18,419 |
FCC licenses | |
Asset Acquisition [Line Items] | |
Intangible assets, net | 8,000 |
Content Rights | |
Asset Acquisition [Line Items] | |
Intangible assets, net | $ 700 |
Property and Equipment, net - Schedule of Physical Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 285,767 | $ 270,864 |
Less accumulated depreciation and amortization | (175,749) | (164,147) |
Total property and equipment, net | 110,018 | 106,717 |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 19,919 | 20,558 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 56,817 | 55,192 |
Broadcast equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 103,666 | 95,962 |
Computer and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 24,006 | 21,819 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 22,537 | 22,130 |
Transportation equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 20,614 | 20,427 |
Software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 38,208 | $ 34,776 |
Property and Equipment, net - Narrative (Details) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2021
USD ($)
|
Jun. 24, 2022
ft²
renewal_option
|
Dec. 31, 2021
USD ($)
|
|
Property, Plant and Equipment [Abstract] | ||||||
Depreciation and amortization expense | $ 4,200,000 | $ 4,500,000 | $ 12,700,000 | $ 13,700,000 | ||
Impairment charges to long-lived assets | $ 0 | 800,000 | $ 0 | |||
Finance lease, right-of-use asset | $ 0 | $ 0 | $ 0 | |||
Arizona | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Area of office space | ft² | 11,900 | |||||
Term of lease | 11 years | |||||
Number of option to renew | renewal_option | 2 | |||||
Renewal term | 5 years |
Goodwill and Other Intangible Assets - Narrative (Details) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2022
USD ($)
market
|
Mar. 31, 2022
USD ($)
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2022
USD ($)
market
|
Sep. 30, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Indefinite-lived Intangible Assets [Line Items] | ||||||
Number of local markets with impairment charge incurred | market | 8 | 8 | ||||
Point increase weighted average cost | 1.00% | 1.00% | ||||
Goodwill | $ 166,324,000 | $ 166,324,000 | $ 157,947,000 | |||
Digital assets, impairment charges | 0 | 2,600,000 | ||||
Digital assets | 2,400,000 | 2,400,000 | ||||
Amortization of intangible assets | 1,500,000 | $ 300,000 | $ 4,000,000 | $ 800,000 | ||
National Digital | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Fair value in excess of carrying amount percentage | 703.00% | |||||
Townsquare Ignite | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Fair value in excess of carrying amount percentage | 164.00% | |||||
Analytical Services | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Fair value in excess of carrying amount percentage | 281.00% | |||||
Broadcast Advertising | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Fair value in excess of carrying amount percentage | 497.00% | |||||
Other | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Fair value in excess of carrying amount percentage | 117.00% | |||||
Local Advertising Businesses | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Goodwill | $ 0 | |||||
FCC licenses | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Maximum FCC license renewal period | 8 years | |||||
Impairment charge | $ 10,300,000 | $ 15,500,000 | ||||
Decrease in intangible assets | 51,800,000 | |||||
Forecasted impairment charge | $ 25,600,000 | |||||
Digital assets | ||||||
Indefinite-lived Intangible Assets [Line Items] | ||||||
Payments to acquire investments | $ 5,000,000 |
Goodwill and Other Intangible Assets - Schedule of Assumptions Used in Annual Impairment Assessments (Details) |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
---|---|---|---|
Discount Rate | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, measurement input | 0.116 | 0.109 | 0.102 |
Long-term Revenue Growth Rate | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, measurement input | 0.000 | 0.000 | 0.000 |
Mature Market Share | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, measurement input | 0.193 | 0.193 | 0.193 |
Mature Market Share | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, measurement input | 0.947 | 0.947 | 0.947 |
Operating Profit Margin | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, measurement input | 0.200 | 0.200 | 0.200 |
Operating Profit Margin | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, measurement input | 0.470 | 0.470 | 0.470 |
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
| |
Goodwill [Line Items] | |
Goodwill, beginning balance | $ 157,947 |
Cherry Creek acquisition | 8,377 |
Goodwill, ending balance | 166,324 |
Operating segments | Subscription Digital Marketing Solutions | |
Goodwill [Line Items] | |
Goodwill, beginning balance | 77,000 |
Cherry Creek acquisition | 0 |
Goodwill, ending balance | 77,000 |
Operating segments | Digital Advertising | |
Goodwill [Line Items] | |
Goodwill, beginning balance | 76,964 |
Cherry Creek acquisition | 0 |
Goodwill, ending balance | 76,964 |
Operating segments | Broadcast Advertising | |
Goodwill [Line Items] | |
Goodwill, beginning balance | 0 |
Cherry Creek acquisition | 8,377 |
Goodwill, ending balance | 8,377 |
Operating segments | Other | |
Goodwill [Line Items] | |
Goodwill, beginning balance | 3,983 |
Cherry Creek acquisition | 0 |
Goodwill, ending balance | $ 3,983 |
Goodwill and Other Intangible Assets - Schedule of Finite Lived and Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (12,563) | $ (8,586) |
Net Carrying Amount | 19,059 | |
Intangible assets, Gross carrying amount total | 301,855 | 286,851 |
Intangible assets, Net carrying amount total | 289,292 | 278,265 |
FCC licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite intangible asset | 267,855 | 275,321 |
Digital assets | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite intangible asset | 2,378 | |
Content rights and other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 31,622 | |
Accumulated Amortization | (12,563) | |
Net Carrying Amount | $ 19,059 | |
Content rights and other intangible assets | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in Years) | 1 year | |
Content rights and other intangible assets | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in Years) | 10 years | |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 11,530 | |
Accumulated Amortization | (8,586) | |
Net Carrying Amount | $ 2,944 | |
Other intangible assets | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in Years) | 2 years | |
Other intangible assets | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Useful Life (in Years) | 10 years |
Goodwill and Other Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization (Details) $ in Thousands |
Sep. 30, 2022
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 (remainder) | $ 1,474 |
2023 | 5,615 |
2024 | 4,865 |
2025 | 1,653 |
2026 | 1,653 |
Thereafter | 3,799 |
Net Carrying Amount | $ 19,059 |
Investments (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Schedule of Equity Method Investments [Line Items] | ||||
Investments | $ 800,000 | $ 800,000 | ||
Impairment on investments | 0 | $ 0 | 1,200,000 | $ 0 |
Fair value of investment | 1,400,000 | 1,400,000 | ||
Unrealized gain | 200,000 | $ 2,900,000 | $ 2,900,000 | |
Unrealized loss | 1,900,000 | |||
Three New Investments | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investments | $ 2,100,000 | $ 2,100,000 |
Long-Term Debt - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Disclosure [Abstract] | ||
Long-term debt, gross | $ 530,766 | $ 550,000 |
Deferred financing costs | (6,844) | (8,479) |
Total long-term debt | $ 523,922 | $ 541,521 |
Long-Term Debt - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Jun. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Debt Instrument [Line Items] | |||||
Gain on repurchase of notes | $ 0 | $ 0 | $ 108 | $ (5,997) | |
2026 Notes | |||||
Debt Instrument [Line Items] | |||||
Repurchased of 2026 notes | $ 19,200 | ||||
Write-off of deferred financing costs | 300 | ||||
Gain on repurchase of notes | $ 100 | ||||
Fair value of debt | $ 481,700 | $ 481,700 |
Long-Term Debt - Schedule of Maturities of Long Term Debt (Details) $ in Thousands |
Sep. 30, 2022
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2022 (remainder) | $ 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 | 530,766 |
Long-term debt | $ 530,766 |
Income Taxes (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 44.80% | 20.60% | 32.10% | 27.60% |
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 14, 2021 |
Aug. 16, 2021 |
Mar. 09, 2021 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|||
Numerator: | |||||||||||||
Net income | $ 2,798 | $ 4,919 | $ 2,741 | $ 12,894 | $ 10,074 | $ (6,109) | $ 10,458 | $ 16,859 | |||||
Net income from non-controlling interest | 538 | 489 | 1,580 | 1,571 | |||||||||
Net income attributable to controlling interest | $ 2,260 | $ 12,405 | $ 8,878 | $ 15,288 | |||||||||
Denominator: | |||||||||||||
Weighted average shares outstanding, basic (in shares) | 17,037,000 | 16,474,000 | 16,941,000 | 19,250,000 | |||||||||
Effect of dilutive common stock equivalents (in shares) | 445,000 | 2,910,000 | 1,704,000 | 2,407,000 | |||||||||
Weighted average diluted common shares outstanding (in shares) | 17,482,000 | 19,384,000 | 18,645,000 | 21,657,000 | |||||||||
Diluted income per share | |||||||||||||
Diluted income per share (in dollars per share) | $ 0.13 | $ 0.64 | $ 0.48 | $ 0.71 | |||||||||
Conversion of warrants (in shares) | 10,622 | 152,074 | |||||||||||
Stock options | |||||||||||||
Diluted income per share | |||||||||||||
Antidilutive securities (in shares) | 5,036,000 | 45,000 | 45,000 | 26,000 | |||||||||
Restricted Stock | |||||||||||||
Diluted income per share | |||||||||||||
Antidilutive securities (in shares) | 8,000 | 0 | 8,000 | 0 | |||||||||
Warrants | |||||||||||||
Diluted income per share | |||||||||||||
Conversion of warrants (in shares) | [1] | (152,074) | |||||||||||
Warrants | Oaktree | |||||||||||||
Diluted income per share | |||||||||||||
Securities repurchased (in shares) | 8,814,980 | ||||||||||||
Common shares | |||||||||||||
Denominator: | |||||||||||||
Weighted average shares outstanding, basic (in shares) | 17,037,000 | 16,386,000 | 16,941,000 | 16,917,000 | |||||||||
Basic income per share: | |||||||||||||
Attributable to shares (in dollars per share) | $ 0.13 | $ 0.75 | $ 0.52 | $ 0.79 | |||||||||
Warrants | |||||||||||||
Denominator: | |||||||||||||
Weighted average shares outstanding, basic (in shares) | 0 | 88,000 | 0 | 2,333,000 | |||||||||
Basic income per share: | |||||||||||||
Attributable to shares (in dollars per share) | $ 0 | $ 0.75 | $ 0 | $ 0.79 | |||||||||
|
Segment Reporting - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2022
area
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Number of operating segments | 3 |
Number of geographic areas | area | 1 |
Segment Reporting - Schedule of Reportable Segment Results (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Segment Reporting Information [Line Items] | ||||
Net revenue | $ 120,635 | $ 111,280 | $ 342,801 | $ 307,379 |
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | 83,985 | 75,719 | 241,581 | 211,837 |
Depreciation and amortization | 4,467 | 4,821 | 13,546 | 14,546 |
Corporate expenses | 5,744 | 6,410 | 15,892 | 15,996 |
Stock-based compensation | 722 | 877 | 2,430 | 2,833 |
Transaction and business realignment costs | 1,004 | 486 | 2,280 | 5,847 |
Impairment of long-lived assets, intangible assets and investments | 10,300 | 0 | 20,197 | 95 |
Net (gain) loss on sale and retirement of assets | (119) | (14) | (338) | 613 |
Operating income | 14,532 | 22,981 | 47,213 | 55,612 |
Travel and Compensation Costs | Cherry Creek Broadcasting LLC | ||||
Segment Reporting Information [Line Items] | ||||
Transaction and business realignment costs | 900 | 1,200 | ||
Corporate and Other Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | 0 | 0 | 0 | 0 |
Depreciation and amortization | 669 | 1,331 | 2,559 | 3,409 |
Corporate expenses | 5,744 | 6,410 | 15,892 | 15,996 |
Stock-based compensation | 454 | 672 | 1,690 | 2,114 |
Transaction and business realignment costs | 998 | 479 | 2,262 | 5,822 |
Impairment of long-lived assets, intangible assets and investments | 0 | 3,819 | 95 | |
Net (gain) loss on sale and retirement of assets | (20) | (14) | (56) | 613 |
Operating income | (7,845) | (8,878) | (26,166) | (28,049) |
Subscription Digital Marketing Solutions | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 23,188 | 21,130 | 68,021 | 60,347 |
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | 16,744 | 14,954 | 48,513 | 42,144 |
Depreciation and amortization | 321 | 143 | 911 | 840 |
Corporate expenses | 0 | 0 | 0 | 0 |
Stock-based compensation | 137 | 128 | 402 | 411 |
Transaction and business realignment costs | 0 | 0 | 0 | 0 |
Impairment of long-lived assets, intangible assets and investments | 0 | 0 | 0 | |
Net (gain) loss on sale and retirement of assets | 0 | 0 | 0 | 0 |
Operating income | 5,986 | 5,905 | 18,195 | 16,952 |
Digital Advertising | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 37,015 | 30,521 | 103,452 | 85,252 |
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | 25,949 | 20,341 | 73,064 | 57,884 |
Depreciation and amortization | 150 | 82 | 360 | 417 |
Corporate expenses | 0 | 0 | 0 | 0 |
Stock-based compensation | 20 | 11 | 50 | 43 |
Transaction and business realignment costs | 0 | 0 | 0 | 0 |
Impairment of long-lived assets, intangible assets and investments | 0 | 0 | 0 | |
Net (gain) loss on sale and retirement of assets | 0 | 0 | 0 | 0 |
Operating income | 10,896 | 10,087 | 29,978 | 26,908 |
Broadcast Advertising | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 59,267 | 57,314 | 164,447 | 158,422 |
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | 39,889 | 38,040 | 113,869 | 108,667 |
Depreciation and amortization | 3,301 | 3,224 | 9,603 | 9,753 |
Corporate expenses | 0 | 0 | 0 | 0 |
Stock-based compensation | 109 | 64 | 280 | 254 |
Transaction and business realignment costs | 0 | 0 | 0 | 0 |
Impairment of long-lived assets, intangible assets and investments | 10,300 | 16,258 | 0 | |
Net (gain) loss on sale and retirement of assets | (99) | 0 | (282) | 0 |
Operating income | 5,767 | 15,986 | 24,719 | 39,748 |
Other | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Net revenue | 1,165 | 2,315 | 6,881 | 3,358 |
Direct operating expenses, excluding depreciation, amortization and stock-based compensation | 1,403 | 2,384 | 6,135 | 3,142 |
Depreciation and amortization | 26 | 41 | 113 | 127 |
Corporate expenses | 0 | 0 | 0 | 0 |
Stock-based compensation | 2 | 2 | 8 | 11 |
Transaction and business realignment costs | 6 | 7 | 18 | 25 |
Impairment of long-lived assets, intangible assets and investments | 0 | 120 | 0 | |
Net (gain) loss on sale and retirement of assets | 0 | 0 | 0 | 0 |
Operating income | $ (272) | $ (119) | $ 487 | $ 53 |
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