Townsquare Reports First Quarter 2018 Results

GREENWICH, Conn., May 8, 2018 /PRNewswire/ -- Townsquare Media, Inc. (NYSE: TSQ) ("Townsquare," the "Company," "we," "us," or "our") announced today financial results for the first quarter ended March 31, 2018.

"We are pleased with our strong start to 2018.  In the first quarter, net revenue increased 6.6% and Adjusted EBITDA increased 12.7% over the prior year period," commented Dhruv Prasad, Co-Chief Executive Officer of Townsquare.  "In addition to our strong operating results, we announced two strategic, tuck-in acquisitions of radio stations in New Jersey and in upstate New York; repaid $9.5 million of first lien debt, ending the quarter with net leverage of 5.2x; and initiated our first quarterly dividend, which will be paid on May 15, 2018."

"Once again, our Local Marketing Solutions segment drove the Company's growth, with net revenue growth of 5.9%, or 5.6% excluding political revenue," commented Bill Wilson, Co-Chief Executive Officer of Townsquare. "Our first quarter growth in this segment was driven by continued strength across our local broadcast and digital product offerings, which culminated in our 17^th consecutive quarter of positive, organic revenue growth."

The Company also announced today that its Board of Directors approved a quarterly cash dividend of $0.075 per share. The dividend will be payable on August 15, 2018 to shareholders of record as of the close of business on June 28, 2018.

First Quarter Highlights*

• As compared to the first quarter of 2017:
• Local Marketing Solutions net revenue increased 5.9%, or 5.6% excluding political revenue
• Entertainment net revenue increased 10.8%
• Net revenue increased 6.6%, or 6.3% excluding political revenue
• Net loss increased $23.6 million, and net loss from continuing operations increased $23.7 million
• Adjusted EBITDA increased 12.7%
• Diluted net loss per share and diluted Adjusted Net Loss Per Share were $1.44 and $0.12, respectively
• Repaid $9.5 million of long-term debt

* See below for discussion of non-GAAP measures and reconciliations to GAAP measures.

Segment Reporting 
We have two reportable segments, Local Marketing Solutions, which provides broadcast and digital products and solutions to advertisers and businesses within our local markets, and Entertainment, which provides live event experiences and music and lifestyle content directly to consumers, and promotion, advertising and product activations to local and national advertisers.

Quarter Ended March 31, 2018 Compared to the Quarter Ended March 31, 2017

Net Revenue 
Net revenue for the quarter ended March 31, 2018 increased $5.8 million, or 6.6%, to $94.2 million, as compared to $88.4 million in the same period last year.  Local Marketing Solutions net revenue increased $4.5 million, or 5.9%, to $80.6 million and Entertainment net revenue increased $1.3 million, or 10.8%, to $13.7 million, largely due to the timing of a live event.  Excluding political revenue, net revenue increased $5.6 million, or 6.3%, to $93.5 million and Local Marketing Solutions net revenue increased $4.2 million, or 5.6%, to $79.9 million.

Net Loss 
Net loss for the quarter ended March 31, 2018 increased $23.6 million to $26.6 million, as compared to $3.0 million in the same period last year.  Net loss from continuing operations increased $23.7 million to $26.6 million, as compared to $2.9 million in the same period last year.  Net loss and net loss from continuing operations increased primarily due to a $38.0 million impairment charge recorded in the quarter ended March 31, 2018, partially offset by an increase in benefit from income tax of $12.8 million.

Adjusted EBITDA 
Adjusted EBITDA for the quarter ended March 31, 2018 increased $1.3 million, or 12.7%, to $11.5 million, as compared to $10.2 million in the same period last year.

Liquidity and Capital Resources 
As of March 31, 2018, we had a total of $49.1 million of cash on hand and $50.0 million of available borrowing capacity under our revolving credit facility. As of March 31, 2018, we had $562.4 million of outstanding indebtedness, representing 5.7x and 5.2x gross and net leverage, respectively, based on Adjusted EBITDA for the twelve months ended March 31, 2018 of $98.5 million.

The table below presents a summary, as of May 7, 2018, of our outstanding common stock and securities convertible into common stock, excluding options issued under our 2014 Omnibus Incentive Plan.

Conference Call 
Townsquare Media, Inc. will host a conference call to discuss certain first quarter 2018 financial results on Tuesday, May 8, 2018 at 8:00 a.m. Eastern Time. The conference call dial-in number is 1-855-327-6837 (U.S. & Canada) or 1-631-891-4304 (International) and the confirmation code is 10004702.  A live webcast of the conference call will also be available on the equity investor relations page of the Company's website at www.townsquaremedia.com.

A replay of the conference call will be available through May 15, 2018. To access the replay, please dial 1-844-512-2921 (U.S. & Canada) or 1-412-317-6671 (International) and enter confirmation code 10004702. A web-based archive of the conference call will also be available at the above website for thirty days after the call.

About Townsquare Media, Inc. 
Townsquare is a radio, digital media, entertainment and digital marketing solutions company principally focused on being the premier local advertising and marketing solutions platform in small and mid-sized markets across the U.S. Our assets include 317 radio stations and more than 325 local websites in 67 U.S. markets, a digital marketing solutions company (Townsquare Interactive) serving approximately 12,800 small to medium sized businesses, a proprietary digital programmatic advertising platform (Townsquare Ignite) and approximately 350 live events with nearly 18 million attendees each year in the U.S. and Canada. Our brands include local media assets such as WYRK, KLAQ, K2 and NJ101.5; music festivals such as Mountain Jam, WE Fest and the Taste of Country Music Festival; touring lifestyle and entertainment events such as the America on Tap craft beer festival series and North American Midway Entertainment, North America's largest mobile amusement company; and leading tastemaker music and entertainment websites such as XXLmag.com, TasteofCountry.com and Loudwire.com. For more information, please visit www.townsquaremedia.com, www.townsquareinteractive.com, and www.townsquareignite.com.

Forward-Looking Statements 
Except for the historical information contained in this press release, the matters addressed are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "aim," "anticipate," "estimate," "expect," "forecast," "outlook," "potential," "project," "projection," "plan," "intend," "seek," "believe," "may," "could," "would," "will," "should," "can," "can have," "likely," the negatives thereof and other words and terms. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statement. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof. See "Risk Factors" and "Forward-Looking Statements" included in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on or about the date hereof, for a discussion of factors that could cause our actual results to differ from those expressed or implied by forward-looking statements. Townsquare Media, Inc. assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures and Definitions 
In this press release, we refer to Adjusted EBITDA, Adjusted EBITDA Less Interest, Capex and Taxes, Adjusted Net Loss, Adjusted Net Loss Per Share and Adjusted Segment Operating Income which are financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP").

We define Adjusted EBITDA as net (loss) income before the deduction of income taxes, other expense (income) net, interest expense, net, transaction costs, stock-based compensation, net loss (gain) on sale and retirement of assets, business realignment costs, goodwill and other intangible impairment charges, net (loss) income on discontinued operations, net of income taxes, impairment of long lived and intangible assets and depreciation and amortization. Adjusted EBITDA Less Interest, Capex and Taxes is defined as Adjusted EBITDA less net cash interest expense, capital expenditures and cash paid for taxes. Adjusted Net Loss is defined as net (loss) income before the deduction of income taxes, transaction costs, business realignment costs, impairment of long lived and intangible assets, goodwill and other intangible impairment charges, net loss (gain) on sale and retirement of assets, and net (loss) income from discontinued operations, net of income taxes.  Adjusted Net Loss Per Share is defined as Adjusted Net Loss divided by the weighted average shares outstanding. Adjusted Segment Operating Income is defined as segment operating income before the deduction of depreciation and amortization, stock-based compensation, impairment of long lived and intangible assets, business realignment costs and goodwill and other intangible impairment charges. These measures do not represent, and should not be considered as alternatives to, net income (loss), segment operating income or cash flows from operations, as determined under GAAP.  In addition, these non-GAAP measures may not be comparable to similarly-named measures reported by other companies.  Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are set forth in the tables below.

We use Adjusted EBITDA to facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting interest expense), taxation and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. We use Adjusted Net Loss and Adjusted Net Loss Per Share to assess total company operating performance on a consistent basis.  We use Adjusted Segment Operating Income to evaluate the operating performance of our business segments. We believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of transaction costs, net loss (gain) on sale and retirement of assets, business realignment costs, certain impairments, and net (loss) income from discontinued operations.  Further, while discretionary bonuses for members of management are not determined with reference to specific targets, our Board of Directors may consider Adjusted EBITDA, Adjusted EBITDA Less Interest, Capex and Taxes, Adjusted Net Loss, Adjusted Net Loss Per Share and Adjusted Segment Operating Income when determining discretionary bonuses.

Investor Relations 
Claire Yenicay 
(203) 900-5555 
investors@townsquaremedia.com

The following table reconciles on a GAAP basis net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Loss for the three months ended March 31, 2018 and 2017, respectively (dollars in thousands):

The following table reconciles on a GAAP basis net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA and Adjusted EBITDA Less Interest, Capex and Taxes for the three months ended March 31, 2018 and 2017, respectively (dollars in thousands):

The following table reconciles net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA on a quarterly basis for the twelve months ended March 31, 2018 (dollars in thousands):

The following tables reconcile segment operating income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Segment Operating Income (Loss) for the three months ended March 31, 2018 and 2017, respectively (dollars in thousands):

Reconciliation of Net revenue to Net revenue, excluding political revenue for the three months ended March 31, 2018 and 2017, respectively (dollars in thousands):

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SOURCE Townsquare Media, Inc.