Townsquare Reports Fourth Quarter And Full Year 2016 Results

GREENWICH, Conn., March 13, 2017 /PRNewswire/ -- Townsquare Media, Inc. (NYSE: TSQ) ("Townsquare," the "Company," "we," "us," or "our") announced today financial results for the fourth quarter and year ended December 31, 2016.

"In 2016, we delivered net revenue, net income and Adjusted EBITDA growth of 17%, 127% and 9%, respectively.  On a pro forma basis, net revenue growth of 3.0% was driven by the strong performance of our local products and offerings within our Local Marketing Solutions segment, where pro forma net revenue increased 5.1% over the prior year," commented Steven Price, Chairman and Chief Executive Officer of Townsquare.  "This year we focused on strengthening our balance sheet; through EBITDA growth and debt repayment we reduced net leverage from 5.5x at the start of the year, to 4.9x at year end."

Fourth Quarter Highlights*

As compared to the fourth quarter of 2015 on an actual basis:

• Net revenue increased 5.8%
• Local Marketing Solutions net revenue increased 5.1%
• Entertainment net revenue increased 8.0%
• Net income increased 34.1%
• Adjusted EBITDA increased 18.1%

Diluted net income and diluted Adjusted Net Income Per Share were $0.12 and $0.19, respectively

Full Year Highlights*

As compared to the year ended December 31, 2015 on an actual basis:

• Net revenue increased 17.1%
• Net income increased 127.3%
• Adjusted EBITDA increased 9.0%

As compared to the year ended December 31, 2015 on a pro forma basis:

• Net revenue increased 3.0%
• Local Marketing Solutions net revenue increased 5.1%
• Entertainment net revenue decreased 0.9%
• Net income increased 145.5%
• Adjusted EBITDA increased 4.1%

Diluted net income and diluted Adjusted Net Income Per Share were $0.85 and $1.03, respectively

* 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. Prior to the second quarter of 2016, the Company reported its results in two reportable segments, Local Advertising and Live Events, and reported the remainder of its business in its Other Media and Entertainment category. The prior Local Advertising segment, together with the Company's digital marketing and e-commerce solutions, which were previously part of the Other Media and Entertainment category, are now reported within Local Marketing Solutions. The Live Events segment, together with the Company's national digital assets which were previously part of the Other Media and Entertainment category, are now reported within Entertainment.

Quarter Ended December 31, 2016 Compared to the Quarter Ended December 31, 2015

Net Revenue
Net revenue for the quarter ended December 31, 2016 increased $6.5 million, or 5.8%, to $119.5 million, as compared to $113.0 million in the same period last year.  Local Marketing Solutions net revenue increased $4.4 million, or 5.1%, to $91.3 million and Entertainment net revenue increased $2.1 million, or 8.0%, to $28.2 million.  Excluding political revenue, net revenue increased $3.0 million, or 2.7%, to $114.2 million and Local Marketing Solutions net revenue increased $0.9 million, or 1.1%, to $86.0 million.

Net Income
Net income for the quarter ended December 31, 2016 increased $0.8 million, or 34.1%, to $3.2 million, as compared to $2.4 million million in the same period last year.

Adjusted EBITDA
Adjusted EBITDA for the quarter ended December 31, 2016 increased $3.8 million, or 18.1%, to $24.9 million, as compared to $21.1 million in the same period last year.

Year Ended December 31, 2016 Compared to the Year Ended December 31, 2015

Net Revenue
Net revenue for the year ended December 31, 2016 increased $75.6 million, or 17.1%, to $516.9 million, as compared to $441.2 million last year. This was driven primarily by the net revenue contribution of North American Midway Entertainment ("NAME"), which was acquired on September 1, 2015.  Local Marketing Solutions net revenue increased $15.5 million or 4.8%, to $342.2 million and Entertainment net revenue increased $60.1 million or 52.5%, to $174.7 million.

Pro forma net revenue increased $14.9 million, or 3.0%, to $516.9 million, as compared to $501.9 million in the same period last year.  As used in this release, the term "pro forma" means pro forma for the acquisition of NAME and the divestiture of 43 of our towers on September 1, 2015.  Local Marketing Solutions pro forma net revenue increased $16.5 million, or 5.1%, to $342.2 million and Entertainment pro forma net revenue decreased $1.6 million, or 0.9%, to $174.7 million.  Excluding political revenue, pro forma net revenue increased $8.8 million, or 1.8%, to $507.8 million and Local Marketing Solutions pro forma net revenue increased $10.4 million, or 3.2%, to $333.2 million.

Net Income
Net income for the year ended December 31, 2016 increased $13.0 million, or 127.3%, to $23.3 million, as compared to $10.2 million in the same period last year.

Pro forma net income for the year ended December 31, 2016 increased $13.8 million, or 145.5%, to $23.3 million, compared to $9.5 million in the same period last year.

Adjusted EBITDA
Adjusted EBITDA for the year ended December 31, 2016 increased $8.8 million, or 9.0%, to $106.8 million, as compared to $98.0 million in the same period last year.

Pro forma Adjusted EBITDA for the year ended December 31, 2016 increased $4.2 million, or 4.1%, to $106.8 million, compared to $102.6 million in the same period last year.

Liquidity and Capital Resources
As of December 31, 2016, we had a total of $51.5 million of cash on hand and $50.0 million of available borrowing capacity under our revolving credit facility. As of December 31, 2016, we had $579.2 million of outstanding indebtedness, representing 5.4x and 4.9x gross and net leverage, respectively, based on Adjusted EBITDA for the year ended December 31, 2016 of $106.8 million.

The table below presents a summary, as of March 10, 2017, 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 fourth quarter and full year 2016 financial results on Monday, March 13, 2017 at 8:00 a.m. Eastern Time. The conference call dial-in number is 1-877-407-0784 (U.S. & Canada) or 1-201-689-8560 (International) and the confirmation code is 13653480. 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 March 20, 2017. To access the replay, please dial 1-844-512-2921 (U.S. & Canada) or 1-412-317-6671 (International) and enter confirmation code 13653480. 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 media, entertainment and digital marketing solutions company principally focused on small and mid-sized markets across the U.S. Our assets include 312 radio stations and more than 325 local websites in 66 U.S. markets, a digital marketing solutions company serving approximately 10,700 small to medium sized businesses, approximately 550 live events with nearly 18 million attendees each year in the U.S. and Canada, and one of the largest digital advertising networks focused on music and entertainment reaching more than 50 million unique visitors each month. Our brands include iconic local media assets such as WYRK, KLAQ, K2 and NJ101.5; acclaimed music festivals such as Mountain Jam, WE Fest and the Taste of Country Music Festival;  unique touring lifestyle and entertainment events such as the America on Tap craft beer festival series, the Insane Inflatable 5K obstacle race series and North American Midway Entertainment, North America's largest mobile amusement company; and leading tastemaker music and entertainment owned and affiliated websites such as XXLmag.com, TasteofCountry.com, Loudwire.com and BrooklynVegan.com. For more information, please visit www.townsquaremedia.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, 2016, 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 Income and Adjusted Net Income Per Share, 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 income (loss) before the deduction of income taxes, other (income) expense (net), interest expense, cancellation and (repurchase) of debt, transaction costs, stock-based compensation, net (gain) loss on sale of assets, impairment of FCC licenses, impairment on investment 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 Income is defined as net income (loss) before the deduction of income taxes, transaction costs, impairment on investment, impairment of FCC licenses, one-time stock option repricing, net (gain) loss on sale of assets and cancellation and (repurchase) of debt.  Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the weighted average shares outstanding. These measures do not represent, and should not be considered as alternatives to, net income (loss) 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 Income and Adjusted Net Income Per Share to assess total company operating performance on a consistent basis.  We believe that this measure, when considered together with our GAAP financial results, provides management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of transaction costs, net (gain) loss on sale of assets, cancellation and (repurchase) of debt, certain impairments and a one-time stock option repricing.  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 Income and Adjusted Net Income Per Share when determining discretionary bonuses.

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

The following table summarizes pro forma net revenue and direct operating expenses broken out by segment for the years ended December 31, 2016, 2015 and 2014, respectively (dollars in thousands):

The following table reconciles on a GAAP basis net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Income (Loss) for the years ended December 31, 2016, 2015 and 2014, respectively (dollars in thousands):

The following table reconciles on a GAAP basis net income (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 years ended December 31, 2016, 2015 and 2014, respectively (dollars in thousands):

The following table reconciles on a pro forma basis net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA for the years ended December 31, 2016, 2015 and 2014, respectively (dollars in thousands):

The following table reconciles net (loss) income, 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 December 31, 2016 (dollars in thousands):

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SOURCE Townsquare Media, Inc.