Emmis Delivers Strong Fourth Quarter and Full Year Revenue Growth

Emmis Delivers Strong Fourth Quarter and Full Year Revenue Growth

Radio Revenues up Double Digits in Fourth Quarter and 5% for Full Year

INDIANAPOLIS, April 3, 2014 /PRNewswire/ -- Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its fourth fiscal quarter and full-year ending February 28, 2014.

Emmis' radio net revenues for the fourth fiscal quarter were up 11%, from $29.1 million to $32.4 million. Excluding 98.7FM in New York, which is being programmed by ESPN pursuant to an LMA, radio net revenues were up 12%. These results outperformed Emmis' local radio markets in which revenue growth improved 4% during the quarter.

For the full year, radio net revenues were $145.4 million, compared to $138.6 million in the prior year, an increase of 5%. These results also outperformed Emmis' local radio markets in which revenue growth improved 3% for the year.

Publishing net revenues were up 3% in the fourth fiscal quarter and 4% for the full year.

"Fiscal 2014 marked the fourth consecutive year we have outperformed our local radio markets and the radio industry as a whole. Our strong operating performance is the result of sound strategy and its execution by a phenomenal workforce that makes me so proud. We are very excited about the addition of WBLS and WLIB in New York and the momentum behind NextRadio as we head into fiscal 2015," Jeff Smulyan, President & CEO of Emmis said.

For the fourth fiscal quarter, operating income was $0.7 million, compared to a loss of $0.4 million for the same quarter of the prior year. Emmis' station operating income for the fourth fiscal quarter was $6.9 million, compared to $7.1 million for the same quarter of the prior year. The decrease in station operating income in the fourth fiscal quarter was due in part to recognition of incentive compensation expense based on full-year operating results that were achieved based on strong fourth quarter results, as well as several non-recurring items, including $0.7 million in severance associated with the integration of WBLS and WLIB.

For the full year, operating income was $22.2 million, compared to $16.5 million in the prior year. Emmis' station operating income in fiscal 2014 was $48.4 million, compared to $42.9 million in fiscal 2013.

During the fourth fiscal quarter, Emmis reversed substantially all of the valuation allowance previously recorded against its deferred tax assets. As a result, Emmis recorded a benefit for income taxes of approximately $35 million in the quarter.

At year-end, Emmis' leverage ratio under its senior secured credit agreement was 2.5x, marking Emmis' lowest leverage ratio since 2000.

Emmis commenced providing programming and selling advertising at WBLS and WLIB in New York pursuant to a Local Programming and Marketing Agreement ("LMA") on March 1, 2014. Because this LMA commenced on the first day of Emmis' fiscal 2015, no actual or pro forma results for these stations are included in this release. The $0.7 million severance charge recorded in Emmis' fourth fiscal quarter relates to Emmis employees in New York that were notified in February 2014 that their employment was being terminated.

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


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. Operating Income is the most directly comparable financial measure in accordance with 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 depreciation, amortization and non-cash compensation. A reconciliation of station operating income to operating income is attached to this press release.


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

Emmis Communications - Great Media, Great People, Great Service®

About Emmis Communications

Emmis Communications Corporation is a diversified media company, principally focused on radio broadcasting. Emmis operates the 9th largest radio portfolio in the United States based on total listeners. Emmis owns 18 FM and 3 AM radio stations in New York, Los Angeles, St. Louis, Austin (Emmis has a 50.1% controlling interest in Emmis' radio stations located there), Indianapolis and Terre Haute, IN and operates two additional stations in New York (1 FM and 1 AM) pursuant to a Local Marketing Agreement ("LMA") whereby Emmis provides the programming for these stations and sells all advertising within that programming pending its acquisition of the stations. In addition, one of the FM radio stations Emmis currently owns in New York is operated pursuant to a LMA by a third party.

Note: Certain statements included in this press release 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 or to consummate
dispositions;
-- changes in audience measurement systems
-- 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, amounts in thousands, except per share data)




Three months ended February 28, Year ended February 28,
------------------------------- -----------------------


2014 2013 2014 2013
---- ---- ---- ----

OPERATING DATA:

Net revenues:

Radio $32,360 $29,080 $145,399 $138,630

Publishing 14,612 14,221 59,747 57,454
------ ------ ------ ------

Total net revenues 46,972 43,301 205,146 196,084

Station operating expenses excluding

depreciation and amortization expense:

Radio 25,496 20,458 99,924 95,830

Publishing 15,315 15,864 59,085 58,241
------ ------ ------ ------

Total station operating expenses excluding

depreciation and amortization expense 40,811 36,322 159,009 154,071

Corporate expenses excluding depreciation

and amortization expense 3,901 4,969 17,024 17,819

Hungary license litigation and related expenses 263 596 2,058 1,381

Depreciation and amortization 1,259 1,210 4,866 4,722

Impairment loss - 448 - 11,419

Loss (gain) on sale of assets 2 106 (8) (9,877)
--- --- --- ------


Operating income (loss) 736 (350) 22,197 16,549

Interest expense (1,627) (2,893) (7,068) (20,899)

Loss on debt extinguishment - (3,367) (653) (4,508)

Other income (expense), net 22 (157) 116 (10)
--- ---- --- ---


Income (loss) before income taxes and

discontinued operations (869) (6,767) 14,592 (8,868)

Benefit for income taxes (34,974) (2,091) (34,063) (7,039)
------- ------ ------- ------


Income (loss) from continuing operations 34,105 (4,676) 48,655 (1,829)

Income from discontinued operations, net of tax - 9,956 - 50,080
--- ----- --- ------


Consolidated net income 34,105 5,280 48,655 48,251

Net income attributable to noncontrolling interests 944 964 5,174 4,479
--- --- ----- -----


Net income attributable to the Company 33,161 4,316 43,481 43,772

Gain on extinguishment of preferred stock - - 325 -

Preferred stock dividends - - - (1,806)

Net income attributable to common shareholders $33,161 $4,316 $43,806 $41,966
======= ====== ======= =======


Amounts attributable to common shareholders for basic earnings per share:

Continuing operations 33,161 (5,640) 43,806 (8,114)

Discontinued operations - 9,956 - 50,080

Net income attributable to common shareholders 33,161 4,316 43,806 41,966
====== ===== ====== ======


Amounts attributable to common shareholders for diluted earnings per share:

Continuing operations 33,161 (5,640) 43,481 (8,114)

Discontinued operations - 9,956 - 50,080

Net income attributable to common shareholders 33,161 4,316 43,481 41,966
====== ===== ====== ======


Basic net income (loss) per common share:

Continuing operations $0.82 $(0.14) $1.08 $(0.21)

Discontinued operations - 0.25 - 1.29

Net income attributable to common shareholders $0.82 $0.11 $1.08 $1.08
===== ===== ===== =====


Diluted net income (loss) per common share:

Continuing operations $0.71 $(0.14) $0.94 $(0.21)

Discontinued operations - 0.25 - 1.29

Net income attributable to common shareholders $0.71 $0.11 $0.94 $1.08
===== ===== ===== =====


Weighted average shares outstanding:

Basic 40,682 39,532 40,506 39,034

Diluted 46,606 39,532 46,042 39,034



OTHER DATA:

Station operating income (See below) 6,927 7,053 48,373 42,865

Cash paid for (refund from) income taxes, net 112 827 (903) 2,175

Cash paid for interest 1,468 3,973 6,289 21,811

Capital expenditures 780 1,213 3,057 3,364


Noncash compensation by segment:

Radio $497 $90 $1,477 $575

Publishing 269 (16) 759 277

Corporate 565 544 2,648 2,090

Total $1,331 $618 $4,884 $2,942
====== ==== ====== ======


COMPUTATION OF STATION OPERATING INCOME:

Operating income (loss) $736 $(350) $22,197 $16,549

Plus: Depreciation and amortization 1,259 1,210 4,866 4,722

Plus: Hungary litigation expense and related costs 263 596 2,058 1,381

Plus: Corporate expenses 3,901 4,969 17,024 17,819

Plus: Station noncash compensation 766 74 2,236 852

Plus: Impairment loss - 448 - 11,419

Less: Loss (gain) on sale of assets 2 106 (8) (9,877)

Station operating income $6,927 $7,053 $48,373 $42,865
====== ====== ======= =======



SELECTED BALANCE SHEET INFORMATION: February 28, 2014 February 28, 2013
----------------- -----------------


Total Cash and Cash Equivalents $5,304 $8,735

Credit Agreement Debt $54,000 $67,000

98.7FM Nonrecourse Debt $74,942 $79,068


SOURCE Emmis Communications Corporation

Emmis Communications Corporation

CONTACT: Ryan Hornaday, SVP/Finance & Treasurer, rhornaday@emmis.com; or Patrick Walsh, CFO/COO, pwalsh@emmis.com, 317.266.0100

Web Site: http://www.emmis.com


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