Emmis Communications Reports 4th Quarter and Full-Year Results

Emmis Communications Reports 4th Quarter and Full-Year Results

INDIANAPOLIS, May 12 /PRNewswire-FirstCall/ -- Emmis Communications Corporation (NASDAQ:EMMS) today announced results for its fourth fiscal quarter and full year ended Feb. 29, 2008.

"Our Emmis team delivered great results during our fiscal fourth quarter under very difficult operating conditions," Emmis Chairman and CEO Jeff Smulyan said. "Each of our businesses showed remarkable progress. Pro forma net revenues were up 3% in domestic radio, 4% in publishing, 9% at our discontinued operation WVUE-TV in New Orleans, and an astounding 31% in international radio. The people of Emmis continue to demonstrate the spirit and commitment to lead the next leg of media growth. Through innovative efforts to architect media's digital future, such as our leadership in forming the Broadcasters Traffic Consortium or the launch of a standalone Emmis Interactive to serve other media clients, Emmis is continually investing in new ways to reinvent media. These initiatives demonstrate that Emmis not only delivered great results this quarter but stands poised to grow in the quarters and years to come."

For the fourth fiscal quarter, reported net revenues were $85.8 million, compared to $78.6 million for the same quarter of the prior year, an increase of 9%. On a pro forma basis, net revenues increased 7%.

Diluted net loss per common share from continuing operations for the quarter was $0.53, compared to a loss of $0.23 for the same quarter of the prior year. During the fourth quarter, the Company recorded an impairment loss related to its broadcast licenses of $21.2 million, or $0.35 per share.

For the fourth quarter, Emmis' operating loss was $13.0 million, inclusive of the impairment loss, compared to operating income of $3.9 million for the same quarter of the prior year. Emmis' station operating income for the fourth quarter was $18.6 million, compared to $15.0 million for the same quarter of the prior year.

Emmis has included supplemental pro forma information and certain other financial data on its website, www.emmis.com under the "Investors" tab.

International radio net revenues and station operating expenses, excluding depreciation and amortization, for the quarter ended Feb. 29, 2008, were $13.3 million (up 36%) and $7.7 million (up 11%). On Dec. 17, the company announced that it had acquired Inforadio, a national radio chain broadcasting in 13 Bulgarian cities.

On Feb. 6, Emmis announced it had changed the format of its New York City radio station, formerly known as WQCD (smooth jazz), to 101.9 WRXP, The New York Rock Experience, a new Adult Rock station in the New York tri-state market which merges New Music, Classic Rock, Alternative and Local Rock into a new adult blend called "The New York Rock Experience."

Subsequent to quarter end, the company announced its role in the launch of the Broadcaster Traffic Consortium, LLC (BTC), which will build a first-of-its-kind nationwide network to distribute traffic data via radio technology. Led by eight leading radio companies, BTC is working with NAVTEQ, a leading global provider of digital maps and traffic for vehicle navigation and location-based solutions. BTC will use HD Radio(R) technology to broadcast real-time NAVTEQ Traffic and other location-based information to portable navigation devices and automobile in-dash systems. The high bandwidth capacity provided via HD Radio technology will enable consumers to obtain high-quality, up-to-date information including traffic flow and points of interest when and where they need it most.

Also subsequent to quarter end, the company announced an agreement to sell its remaining television station, WVUE-TV in New Orleans, to Louisiana Media Company, LLC, which is principally owned by Tom Benson, owner of the New Orleans Saints. The purchase price is $41 million, with after-tax proceeds expected to be approximately $35.5 million. In addition, Emmis will retain net working capital, which is expected to be approximately $4 million. The transaction, subject to customary conditions (including approval from the Federal Communications Commission) is expected to close in the second half of the calendar year.

The following table reconciles reported results to pro forma results (dollars in thousands):

3 months ended 12 months ended
Feb. 28 (29), % Feb. 28 (29), %
2008 2007 Change 2008 2007 Change

Radio
Reported net
revenues $62,140 $57,299 8% $266,120 $271,929 -2%
Plus: Net
revenues
from assets
acquired 160 537 604 1,806
Pro forma
net revenues $62,300 $57,836 8% $266,724 $273,735 -3%

Publishing
Reported net
revenues $23,697 $21,335 11% $95,092 $87,606 9%
Plus: Net
revenues
from assets
acquired - 1,558 2,774 5,540
Pro forma net
revenues $23,697 $22,893 4% $97,866 $93,146 5%

Total Company
Reported net
revenues $85,837 $78,634 9% $361,212 $359,535 0%
Plus: Net
revenues
from assets
acquired 160 2,095 3,378 7,346
Pro forma net
revenues $85,997 $80,729 7% $364,590 $366,881 -1%

Beginning in its quarter ending May 31, 2008, Emmis will record the direct overhead expenses of our domestic and international radio operations as a component of radio station operating expenses excluding depreciation and amortization. Previously, these costs were a component of corporate expenses excluding depreciation and amortization. The amount that Emmis recorded in the quarter ended May 31, 2007 and the year ended February 29, 2008 for these expenses was $0.6 million and $2.2 million, respectively.

Emmis will host a call regarding this information on Monday, May 12, at 9 a.m. Eastern at 1.517.623.4891, with a replay available through Monday, May 19, at 1.203.369.1082. Listen online at www.emmis.com.

Emmis generally evaluates the performance of its operating entities based on station operating income. Management believes that station operating income is useful to investors because it provides a meaningful comparison of operating performance between companies in the industry and serves as an indicator of the market value of a group of stations or publishing entities. Station operating income is generally recognized by the broadcast and publishing industries as a measure of performance and is used by analysts who report on the performance of broadcasting and publishing groups. Station operating income does not take into account Emmis' debt service requirements and other commitments, and, accordingly, station operating income is not necessarily indicative of amounts that may be available for dividends, reinvestment in Emmis' business or other discretionary uses.

Station operating income is not a measure of liquidity or of performance in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on the basis of accounting principles generally accepted in the United States. Moreover, station operating income is not a standardized measure and may be calculated in a number of ways. Emmis defines station operating income as revenues net of agency commissions and station operating expenses, excluding non-cash compensation.

Emmis Communications -- Great Media, Great People, Great Service(R)

Emmis is an Indianapolis-based diversified media firm with radio broadcasting and magazine publishing operations. Emmis owns 21 FM and 2 AM domestic radio stations serving the nation's largest markets of New York, Los Angeles and Chicago, as well as St. Louis, Austin, Indianapolis and Terre Haute, Ind. Emmis also owns a radio network, international radio stations, regional and specialty magazines, an interactive business and ancillary businesses in broadcast sales.

The information in this news release is being widely disseminated in accordance with the Securities & Exchange Commission's Regulation FD.

Note: Certain statements included in this release or in the attached financial data which are not statements of historical fact, including but not limited to those identified with the words "expect," "will" or "look" are intended to be, and are, by this Note, identified as "forward-looking statements," as defined in the Securities and Exchange Act of 1934, as amended. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others:

-- general economic and business conditions;
-- fluctuations in the demand for advertising and demand for different
types of advertising media;
-- our ability to service our outstanding debt;
-- increased competition in our markets and the broadcasting industry;
-- our ability to attract and secure programming, on-air talent, writers
and photographers;
-- inability to obtain (or to obtain timely) necessary approvals for
purchase or sale transactions or to complete the transactions for other
reasons generally beyond our control;
-- increases in the costs of programming, including on-air talent;
-- inability to grow through suitable acquisitions;
-- new or changing regulations of the Federal Communications Commission or
other governmental agencies;
-- competition from new or different technologies;
-- war, terrorist acts or political instability; and
-- other factors mentioned in documents filed by the company with the
Securities and Exchange Commission.

Emmis does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited, dollars in thousands, except per share data)

Three months ended Twelve months ended
February 28 (29), February 28 (29),

2008 2007 2008 2007
OPERATING DATA:
Net revenues:
Radio $62,140 $57,299 $266,120 $271,929
Publishing 23,697 21,335 95,092 87,606
Total net revenues 85,837 78,634 361,212 359,535
Operating expenses excluding
depreciation and amortization
expense:
Radio 45,833 43,440 186,250 176,686
Publishing 21,934 20,706 83,501 79,333
Total station operating
expenses excluding
depreciation and
amortization expense 67,767 64,146 269,751 256,019
Noncash contract termination fee - - 15,252 -
Corporate expenses excluding
depreciation
and amortization expense 6,152 7,122 23,073 30,430
Depreciation and amortization 3,650 3,423 14,451 13,338
Impairment loss 21,225 - 21,225 -

(Gain) loss on disposal of
assets - (1) (104) 4

Operating income (12,957) 3,944 17,564 59,744
Interest expense (8,159) (9,539) (34,837) (43,160)
Loss on debt extinguishment (a) - (32) - (13,435)
Other income, net (442) (2,692) - (22)

Income (loss) before income
taxes, minority interest and
discontinued operations (21,558) (8,319) (17,273) 3,127
Provision (benefit) for income
taxes (6,450) (3,132) (3,324) 2,016
Minority interest expense, net
of tax 1,456 1,201 5,230 4,577

Loss from continuing operations (16,564) (6,388) (19,179) (3,466)
Income from discontinued
operations, net of tax 743 (4,282) 17,829 117,048
Net income (15,821) (10,670) (1,350) 113,582
Preferred stock dividends 2,246 2,246 8,984 8,984
Net income (loss) available
to common shareholders $(18,067) $(12,916) $(10,334) $104,598

Basic net income (loss) per
common share:
Continuing operations $(0.53) $(0.23) $(0.77) $(0.33)
Discontinued operations,
net of tax 0.02 (0.12) 0.49 3.14
Net income available to
common shareholders $(0.51) $(0.35) $(0.28) $2.81

Diluted net income (loss) per
common share:
Continuing operations $(0.53) $(0.23) $(0.77) $(0.33)
Discontinued operations, net
of tax 0.02 (0.12) 0.49 3.14
Net income available to
common shareholders $(0.51) $(0.35) $(0.28) $2.81

Weighted average shares
outstanding:
Basic 35,565 37,368 36,551 37,265
Diluted 35,565 37,368 36,551 37,265

(a) Reflects costs of our senior floating rate notes and senior discount
notes redemptions and costs associated with permanent paydowns of our
senior credit facility.

OTHER DATA:
Station operating income
(See below) 18,641 15,002 94,361 106,799
Cash paid for taxes 1,502 878 4,010 6,866
Cash paid for interest 8,232 11,936 29,008 51,259
Capital expenditures 2,881 2,995 6,783 5,301

Noncash compensation by segment:
Radio $433 $437 $2,019 $2,383
Publishing 138 77 881 900
Corporate 1,110 750 4,326 4,465
Total $1,681 $1,264 $7,226 $7,748

COMPUTATION OF STATION
OPERATING INCOME:
Operating income (loss) $(12,957) $3,944 $17,564 $59,744
Plus: Depreciation and
amortization 3,650 3,423 14,451 13,338
Plus: Corporate expenses 6,152 7,122 23,073 30,430
Plus: Station noncash
compensation 571 514 2,900 3,283
Plus: Noncash contract
termination fee - - 15,252 -

Plus: (Gain) loss on
disposal of assets - (1) (104) 4
Plus: Impairment loss 21,225 - 21,225 -

Station operating income $18,641 $15,002 $94,361 $106,799

SELECTED BALANCE SHEET
INFORMATION: February 29, February 28,
2008 2007

Total Cash and Cash
Equivalents $19,498 $20,747
Senior Debt $438,693 $498,000

First Call Analyst:
FCMN Contact:

Source: Emmis Communications Corporation

CONTACT: Patrick Walsh, CFO, or Kate Snedeker, Media & Investor
Relations, +1-317-266-0100, both of Emmis Communications Corporation

Web site:

http://www.emmis.com/

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