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Audacy Reports Third Quarter Results

Audacy, Inc. (OTC: AUDA) today reported financial results for the quarter ended September 30, 2023.

Third Quarter Summary

  • Net revenues for the quarter were $299.2 million, down 5.6% compared to $317.0 million in the third quarter of 2022
  • Local spot revenues were down 3%, national spot revenues were down 15% and network advertising revenues were down 5%
  • Digital revenues were $64.8 million, up 3% compared to the third quarter of 2022
  • Total operating expenses for the quarter were $580.8 million, which includes a non-cash impairment loss of $272.7 million, compared to $468.8 million in the third quarter of 2022, which included a gain on sale of $10.7 million and a non-cash impairment loss of $176.8 million
  • Cash operating expenses for the quarter were $276.1 million, down 2% compared to $280.6 million in the third quarter of 2022
  • Operating loss for the quarter was $281.7 million, compared to $151.9 million in the third quarter of 2022
  • Adjusted EBITDA for the quarter was $23.0 million, compared to $36.3 million in the third quarter of 2022
  • As of September 30, 2023, the Company’s liquidity, which includes restricted cash, was $57.5 million

David J. Field, Chairman, President and Chief Executive Officer, stated: “Audacy’s third quarter net revenues declined 5.6%, in-line with our quarterly guidance as ad market conditions have remained challenging, particularly on national business. Cash operating expenses were down 2%.

We gained revenue share in the quarter, most significantly in radio in which we have achieved accelerating share growth since the start of the year. We also delivered solid gains in radio ratings share and digital audience metrics while making important progress on our tech roadmap and meaningful expense savings to improve our current and future business model.

Fourth quarter is currently pacing down 9% on an as reported basis and down 4% on a same-station, ex-political basis. We expect Q4 total revenues to decline by high single digits and costs to decline by high single digits.

As noted in our recent public filings, we remain in constructive conversations with our lenders to recapitalize the company’s balance sheet to establish a strong financial footing and position the company to capitalize effectively on our growth opportunities. Notwithstanding current challenges, Audacy has established a strong position as a scaled, leading multi-platform audio content and entertainment company distinguished by our exclusive premium content and top positions across the country’s largest markets. We salute our team for their strong work delivering solid growth against our key performance metrics and serving our listeners and customers with excellence."

Recent Company Developments

  • Market share gains. The Company posted solid market share gains during the quarter as its local spot market share increased by 1.1% and network market share increased 1.6%. Overall, Audacy’s total revenue share increased 0.4%.
  • Strong Ratings Performance. Our radio stations continue to gain ratings share from our competitors as Audacy brands in PPM markets had their sixth consecutive quarter of year over year share growth in the key A25-54 demographic. Our gains came across many markets with 70% (24 of 34) of our PPM markets seeing ratings improvement.
  • Major Fall/Holiday Events Calendar. Our annual We Can Survive concert moved from LA to New York on October 14 and celebrated its 10th anniversary with performances by Maroon 5, ONEREPUBLIC, Kelly Clarkson and others. The sold-out show raised over $600,000 for the American Foundation for Suicide Prevention as part of Audacy’s I’m Listening mental health initiative. Last week, some of the biggest names in country music took the stage at the Hard Rock South Florida for Audacy’s Stars & Strings, raising funds for the Wounded Warrior Project. The Red Hot Chili Peppers will headline the wildly popular KROQ Almost Acoustic Christmas at the Forum in Los Angeles in December. In addition the Riptide Music Festival returns to the beach in Fort Lauderdale and our Alice in Winterland and Deck The Hall Ball concert tour will take place in eight of our markets.
  • Industry Leading Podcasts. This quarter studio launches include Say More with Dr? Sheila, the first in a three-season original comedy podcast franchise from Amy Poehler’s Paper Kite Podcasts. The show hit #1 on Apple’s comedy chart and #4 overall. Audacy had a #1 hit with parenting influencers Big Little Feelings hosted by real-life best friends and preeminent toddler/preschool experts Kristin Gallant and Deena Margolin. Audacy signed a multi-year contract extension for Glennon Doyle’s chart-topping podcast We Can Do Hard Things. As part of the new agreement, select episodes will drop early exclusively on the Audacy app.
  • Podcast of the Year Award. In partnership with HBO, Pineapple Street Studios won Adweek’s coveted “2023 Podcast of the Year” Award for the Succession podcast, the official companion to HBO’s iconic series in its final season, hosted by journalist Kara Swisher and featuring behind-the-scenes interviews with show’s writers, producers, directors and cast members. The show also won in Adweek's Best TV/Streaming Podcast category, and hit #1 on Apple’s TV & Film chart.

The company will not be holding a conference call regarding the third quarter earnings release.

About Audacy

Audacy, Inc. (OTC: AUDA) is a leading multi-platform audio content and entertainment company with the country’s best collection of local music, news and sports brands, a premium podcast creator, major event producer, and digital innovator. Audacy engages 200 million consumers each month, bringing people together around content that matters to them. Learn more at www.audacyinc.com, Facebook (Audacy Corp), Twitter (@AudacyCorp), LinkedIn (@Audacy-Inc), Instagram (@lifeataudacy) and Threads (@AudacyCorp).

Certain Definitions

All references to per share data, unless stated otherwise, are presented as per diluted share. All references to shares outstanding, unless stated otherwise, are presented to exclude unvested restricted stock units. All references to net debt are outstanding debt net of cash on hand.

Core Spot Revenues consist of local spot plus national spot advertising revenues less political spot advertising revenues.

Station Expenses consist of station operating expenses excluding non-cash compensation expense.

Corporate Expenses consist of corporate general and administrative expenses excluding non-cash compensation expense.

Adjusted EBITDA consists of net income (loss) available to common shareholders, adjusted to exclude: income taxes (benefit); income from discontinued operations, net of income taxes or benefit; total other income or expense; net interest expense; depreciation and amortization; time brokerage agreement fees (income); non-cash compensation expense (which is otherwise included in station operating expenses and corporate G&A expenses); refinancing expenses; impairment loss, merger and acquisition costs, restructuring and integration costs, preferred stock dividends; COVID-19 related expenses/(recoveries); non-recurring expenses/recoveries otherwise included in corporate or station expenses; change in fair value of contingent consideration; deferred compensation expense/(income); (gain) loss on early extinguishment of debt; and (gain) loss on sale or disposal.

Adjusted Free Cash Flow consists of net income (loss): (i) plus depreciation and amortization; (gain) loss on sale or disposal; non-cash compensation expense (which is otherwise included in station operating expenses and corporate general and administrative expenses); impairment loss; merger and acquisition costs; restructuring and integration costs, (gain) loss on early extinguishment of debt; COVID-19 related expenses/(recoveries); other expense/(income); non-recurring expenses/recoveries otherwise included in corporate or station expenses; change in fair value of contingent consideration; deferred compensation expense/(income); income from discontinued operations (excluding income taxes or tax benefit); amortization of deferred financing costs and debt premium included in interest expense; refinancing expenses; income taxes (benefit); Adjusted Income Taxes Paid; and Net Capital Expenditures.

Net Capital Expenditures consists of capital expenditures, including amortizable intangibles, adjusted to subtract reimbursed tenant improvement allowances.

Adjusted Income Taxes Paid consist of income tax paid, adjusted to exclude taxes paid related to the gain/loss on sale or exchange of radio station assets; and taxes paid related to the gain/loss on the sale of redundant property.

Non-GAAP Financial Measures

It is important to note that Adjusted EBITDA, Adjusted Free Cash Flow, Net Capital Expenditures and Adjusted Income Taxes Paid are not measures of performance or liquidity calculated in accordance with generally accepted accounting principles (“GAAP”). Management believes that these measures are useful as a way to evaluate the Company and the means for Management to evaluate our performance and operations. Management believes that these measures are useful to an investor in evaluating our performance because they are widely used in the broadcast industry.

Certain adjusted non-GAAP financial measures are presented in this release. The adjustments include, among other items as defined above, gain/loss on sale of assets, derivative instruments, and investments; non-cash compensation expense, other income, impairment loss, merger and acquisition costs, other expenses related to refinancing, and gain/loss on early extinguishment of debt and non-recurring expenses recognized for restructuring charges or similar costs, including transition and integration costs. Management believes these adjusted non-GAAP measures provide useful information to Management and investors by excluding certain income, expenses and gains and losses that may not be indicative of the Company’s core operating and financial results. Similarly, Management believes these adjusted measures are a useful performance measure because certain items included in the calculation of net income (loss) may either mask or exaggerate trends in the Company’s ongoing operating performance. Further, the reconciliations corresponding to these adjusted measures, by identifying the individual adjustments, provide a useful mechanism for investors to consider these adjusted measures with some or all of the identified adjustments.

Management uses these non-GAAP financial measures on an ongoing basis to help track and assess the Company's financial performance. You, however, should not consider non-GAAP measures in isolation or as substitutes for net income (loss), operating income, or any other measure for determining our operating performance that is calculated in accordance with generally accepted accounting principles. These non-GAAP measures are not necessarily comparable to similarly titled measures employed by other companies. The accompanying financial tables provide reconciliations to the nearest GAAP measure of all non-GAAP measures provided in this release.

Note Regarding Forward-Looking Statements

This news announcement contains certain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including statements about market conditions, the Company’s revenue guidance, and the Company’s ability to capitalize on its growth opportunities, develop digital demand, enhance its balance sheet and regain compliance with the NYSE’s minimum price condition, are based upon current expectations and involve certain risks and uncertainties.. Additional information and key risks applicable to these statements are described in the Company’s reports on Forms 8-K, 10-Q and 10-K and other filings the Company makes with the Securities and Exchange Commission. All of the forward-looking statements in this press release are qualified by these cautionary statements, and actual results or developments may differ materially from those in these forward-looking statements. The Company assumes no obligation to publicly update or revise any forward-looking statements.

AUDACY, INC.

FINANCIAL DATA

(amounts in thousands, except per share data)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2023

 

2022

 

2023

 

2022

STATEMENTS OF OPERATIONS

Net Revenues

$

299,166

 

$

316,969

 

$

857,314

 

$

911,703

 

Station Expenses

255,686

 

259,203

 

754,589

 

743,947

 

Station Expenses - Non-Cash Compensation

303

 

828

 

1,449

 

2,989

 

Corporate Expenses

32,110

 

21,136

 

81,436

 

68,818

 

Corporate Expenses - Non-Cash Compensation

446

 

24

 

2,298

 

3,956

 

Depreciation And Amortization

18,310

 

18,345

 

53,327

 

47,455

 

Other Expenses

74

 

72

 

426

 

474

 

Impairment Loss

272,656

 

176,784

 

403,061

 

180,075

 

Restructuring Charges

1,272

 

4,216

 

12,204

 

6,118

 

Net Gain On Sale Or Disposal

(24

)

(10,665

)

(22,305

)

(13,228

)

Change In Fair Value of Contingent Consideration

-

 

(1,098

)

-

 

(8,802

)

Total Operating Expenses

 

580,833

 

468,845

 

1,286,485

 

1,031,802

 

Operating Loss

 

(281,667

)

(151,876

)

(429,171

)

(120,099

)

Net Interest Expense

36,011

 

28,113

 

102,940

 

76,113

 

Other Income

 

-

 

-

 

-

 

(238

)

Loss Before Income Taxes

(317,678

)

(179,989

)

(532,111

)

(195,974

)

Income Tax Benefit

 

(83,345

)

(39,014

)

(136,075

)

(43,153

)

Net Loss

$

(234,333

)

$

(140,975

)

$

(396,036

)

$

(152,821

)

Net Loss Per Share - Basic

$

(49.64

)

$

(30.35

)

$

(84.29

)

$

(32.92

)

Net Loss Per Share - Diluted

$

(49.64

)

$

(30.35

)

$

(84.29

)

$

(32.92

)

 

Weighted Common Shares Outstanding - Basic*

 

4,720

 

4,645

 

4,698

 

4,642

 

Weighted Common Shares Outstanding - Diluted*

 

4,720

 

4,645

 

4,698

 

4,642

 

*Stock split applied

 

SUPPLEMENTAL BREAKDOWN OF REVENUE BY TYPE

Spot (local and national)

$

185,646

 

$

204,742

 

$

532,069

 

$

584,363

 

Digital (including podcasting)

64,792

 

62,685

 

188,373

 

190,024

 

Network

22,516

 

23,663

 

63,208

 

66,592

 

Sponsorships and Events

13,825

 

13,760

 

38,207

 

35,724

 

Other

12,387

 

12,119

 

35,457

 

35,000

 

$

299,166

 

$

316,969

 

$

857,314

 

$

911,703

 

Political

$

952

 

$

6,900

 

$

3,062

 

$

12,188

 

 

 

 

 

 

 

SUPPLEMENTAL BREAKDOWN OF REVENUE BY FORMAT

Music

$

145,657

 

$

156,793

 

$

419,095

 

$

455,838

 

Sports

72,015

 

72,595

 

190,768

 

190,493

 

News/Talk

43,250

 

48,503

 

129,706

 

148,617

 

Non-format specific

38,244

 

39,078

 

117,745

 

116,755

 

$

299,166

 

$

316,969

 

$

857,314

 

$

911,703

 

 
 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW

INFORMATION

Net Capital Expenditures

$

9,618

 

$

25,637

 

$

34,642

 

$

72,541

 

Adjusted Income Taxes Paid (Refunded)

$

307

 

$

13

 

$

2,233

 

$

(14,779

)

 

September 30,

December 31,

SELECTED BALANCE SHEET DATA

2023

2022

Cash, Cash Equivalents and Restricted Cash

$

57,380

 

$

103,344

 

Senior Debt - Term B-2 Loan (Includes Current Portion)

$

632,415

 

$

632,415

 

Senior Debt - Revolver (Includes Current Portion)

$

219,000

 

$

180,000

 

Senior Secured Notes - 2027

$

460,000

 

$

460,000

 

Senior Secured Notes - 2029

$

540,000

 

$

540,000

 

Accounts Receivable Facility (Includes Current Portion)

$

75,000

 

$

75,000

 

Total Shareholders' Equity

$

126,623

 

$

520,619

 

 

OTHER FINANCIAL DATA

Three Months Ended

Nine Months Ended

September 30,

September 30,

2023

 

2022

2023

 

2022

 

 

 

 

 

 

 

 

Reconciliation Of GAAP Net Loss To Adjusted EBITDA

and To Adjusted Free Cash Flow

Net Loss

$

(234,333

)

$

(140,975

)

$

(396,036

)

$

(152,821

)

Income Tax Benefit

(83,345

)

(39,014

)

(136,075

)

(43,153

)

Net Interest Expense

36,011

 

28,113

 

102,940

 

76,113

 

Corporate Expenses - Non-Cash Compensation

446

 

24

 

2,298

 

3,956

 

Station Expenses - Non-Cash Compensation

303

 

828

 

1,449

 

2,989

 

Depreciation And Amortization

18,310

 

18,345

 

53,327

 

47,455

 

Other Expenses

72

 

125

 

341

 

622

 

Restructuring Charges

1,272

 

4,216

 

12,204

 

6,118

 

COVID-19 Related Expenses

2

 

127

 

93

 

480

 

Non-Recurring Expenses Otherwise Included in

Corporate Expenses

-

 

(470

)

42

 

1,217

 

Liability Management Expenses

12,181

 

-

 

19,152

 

-

 

Impairment Loss

272,656

 

176,784

 

403,061

 

180,075

 

Contingent Consideration Accretion and

Remeasurements

-

 

(1,098

)

-

 

(8,802

)

Deferred Compensation Expense

(506

)

-

 

459

 

-

 

Other Income

-

-

-

(238

)

Net Gain On Sale Or Disposal of Assets

(24

)

(10,665

)

(22,305

)

(13,228

)

Adjusted EBITDA

23,045

36,340

40,949

100,783

Net Interest Expense

(36,011

)

(28,113

)

(102,940

)

(76,113

)

Deferred Financing Costs Included In Interest Expense

1,397

1,292

4,838

3,832

Amortization Debt Premium Included In

Interest Expense

(256

)

(256

)

(766

)

(768

)

Net Capital Expenditures

(9,618

)

(25,637

)

(34,642

)

(72,541

)

Other

Adjusted Income Taxes (Paid) Refunded

(307

)

(13

)

(2,233

)

14,779

Adjusted Free Cash Flow

$

(21,750

)

$

(16,387

)

$

(94,794

)

$

(30,028

)

 

Contacts

Investor Contacts:

Joseph Jaffoni, Jennifer Neuman, Norberto Aja


JCIR

(212) 835-2500

AUD@jcir.com

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