Townsquare Reports Strong Third Quarter Net Revenue (99% Of Q3 2019) And Adjusted EBITDA (104% Of Q3 2019)

PURCHASE, N.Y., Nov. 2, 2021 /PRNewswire/ -- Townsquare Media, Inc. (NYSE: TSQ) ("Townsquare", the "Company," "we," "us," or "our") announced today financial results for the third quarter ended September 30, 2021.

"Townsquare's strong performance continued in the third quarter of 2021, highlighted by robust year-over-year net revenue, Adjusted EBITDA, and net income growth.  Adjusted EBITDA surpassed 2019 levels for the fourth consecutive quarter, and net revenue was at 99% of 2019 levels.  In the third quarter of 2021, net revenue increased +17% year over year (-1% vs. Q3 2019),  Adjusted EBITDA increased +67% year over year (+4% vs. Q3 2019), and net income increased $11.6 million year over year (+77% vs. Q3 2019)," commented Bill Wilson, Chief Executive Officer of Townsquare Media, Inc. "As a Digital First Company with approximately 47% of total net revenue (excluding political) coming from our digital platform and solutions, we continue to separate ourselves from the local competition.  In the third quarter, total digital revenue increased +20% year over year (+29% vs. Q3 2019), and we expect double-digit digital net revenue growth to continue, fueling the growth of our digital platform from $188 million of revenue (on a trailing twelve-month basis as of September 30, 2021) to $250 million in just three short years.  Our digital revenue growth, combined with strong profit growth, allowed us to reduce net leverage to 4.9x as of September 30th, a meaningful reduction of 2.9x year over year."

Mr. Wilson added, "I am incredibly proud of the Townsquare Team and the results we have delivered to date, which sets us up to noticeably exceed 2019's Adjusted EBITDA in FY 2021, marking a record profit level for our Company.  Although COVID is far from over, we have been able to achieve our revenue and EBITDA targets faster than we had initially planned for while gaining market share. As such, we are quickly moving towards our ultimate goal of being the number one local media company in each of our 67 markets."

Third Quarter Highlights*

• As compared to the third quarter of 2020:
• Net revenue increased 16.7%, and 21.8% excluding political revenue
• Net income increased $11.6 million to $12.9 million
• Adjusted EBITDA increased 66.5%
• Digital net revenue increased 20.2%
• Townsquare Interactive net subscription revenue increased 16.2% to $21.1 million
• Townsquare Interactive Adjusted Operating Income increased 12.6% to $6.2 million
• Advertising net revenue increased 13.3%, and 19.5% excluding political revenue
• Live Events net revenue increased $2.7 million
• Net revenue achieved 98.9% of Q3 2019 levels, and 99.6% excluding Live Events
• Diluted income per share was $0.64, and Adjusted Net Income per diluted share was $0.54
• Townsquare Interactive added approximately 1,000 net subscribers

Year to Date Highlights*

• As compared to the nine months ended September 30, 2020:
• Net revenue increased 16.9%, and 19.3% excluding political revenue
• Net income increased $101.9 million to $16.9 million
• Adjusted EBITDA increased 126.8%
• Digital net revenue increased 22.7%
• Townsquare Interactive net subscription revenue increased 17.0% to $60.3 million
• Townsquare Interactive Adjusted Operating Income increased 19.9% to $18.2 million
• Advertising net revenue increased 16.4%, and 19.4% excluding political revenue
• Live Events net revenue increased 59.9%
• Net revenue achieved 96.3% of September YTD 2019 levels, and 99.7% excluding Live Events
• Generated Cash Flows from Operations of $38.2 million
• Issued $550.0 million of 6.875% senior secured notes due 2026
• Completed the repurchase of 100% of Oaktree Capital's equity interest in the Company for $6.40 per security, representing a 19% discount to the pre-announcement share price (39% as of the March 9, 2021 closing date)
• Townsquare Interactive added approximately 3,200 net subscribers

*See below for discussion of non-GAAP measures.

Guidance
Based on the Company's third quarter results and its outlook for the remainder of 2021, Townsquare is updating its net revenue and Adjusted EBITDA guidance for the full year 2021 as follows:

• For the full year 2021, net revenue is expected to be at least $415 million (96% of 2019 net revenue, and 99% excluding Live Events net revenue), which is an increase of $5 million from previous guidance
• For the full year 2021, Adjusted EBITDA is expected to be between $104 million and $105 million (102% to 103% of 2019 Adjusted EBITDA), which is an increase of $2 million to $3 million from previous guidance

Segment Reporting
We have three reportable operating segments, Townsquare Interactive, our digital marketing solutions subscription business, Advertising, which includes broadcast and digital advertising products and solutions, and Live Events, which is comprised of the Company's live events, including concerts, expositions and other experiential events.

Quarter Ended September 30, 2021 Compared to the Quarter Ended September 30, 2020

Net Revenue
Net revenue for the quarter ended September 30, 2021 increased $15.9 million, or 16.7%, to $111.3 million, as compared to $95.4 million in the same period last year. Townsquare Interactive net subscription revenue increased $2.9 million, or 16.2%, to $21.1 million, Advertising net revenue increased $10.3 million, or 13.3%, to $87.4 million, and Live Events net revenue increased $2.7 million to $2.7 million, each as compared to the same period last year. Excluding political revenue, net revenue increased $19.8 million, or 21.8%, to $110.7 million, and Advertising net revenue increased $14.2 million, or 19.5%, to $86.8 million.

Adjusted EBITDA
Adjusted EBITDA for the quarter ended September 30, 2021 increased $11.6 million, or 66.5%, to $29.2 million, as compared to $17.5 million in the same period last year. Adjusted EBITDA (Excluding Political) increased $14.9 million, or 108.9%, to $28.7 million, as compared to $13.7 million in the same period last year.

Net Income
Net income for the quarter ended September 30, 2021 increased $11.6 million to $12.9 million, as compared to $1.3 million in the same period last year.

Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Net Revenue
Net revenue for the nine months ended September 30, 2021, increased $44.5 million or 16.9%, to $307.4 million, as compared to $262.8 million in the same period last year. Townsquare Interactive net subscription revenue increased $8.8 million, or 17.0%, to $60.3 million, Advertising net revenue increased $34.3 million, or 16.4%, to $243.1 million, and Live Events net revenue increased $1.5 million, or 59.9%, to $3.9 million, each as compared to the same period last year. Excluding political revenue, net revenue increased $49.4 million, or 19.3%, to $305.6 million, and Advertising net revenue increased $39.2 million, or 19.4%, to $241.3 million.

Adjusted EBITDA
Adjusted EBITDA for the nine months ended September 30, 2021, increased $44.5 million, or 126.8%, to $79.5 million, as compared to $35.1 million in the same period last year. Adjusted EBITDA (Excluding Political) increased $48.6 million, or 165.3%, to $78.0 million, as compared to $29.4 million in the same period last year.

Net Income (Loss)
Net income for the nine months ended September 30, 2021, increased $101.9 million to $16.9 million, as compared to a net loss of $85.1 million in the same period last year. Net loss in 2020 was primarily driven by approximately $109.1 million of non-cash impairment charges, primarily related to our FCC licenses.

Liquidity and Capital Resources
As of September 30, 2021, we had a total of $31.3 million of cash and cash equivalents and $550.0 million of outstanding indebtedness, representing 5.2x and 4.9x gross and net leverage, respectively, based on Adjusted EBITDA for the twelve months ended September 30, 2021 of $106.6 million.

The table below presents a summary, as of October 29, 2021, 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 third quarter 2021 financial results on Tuesday, November 2, 2021 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 13723560. A live webcast of the conference call will also be available on the investor relations page of the Company's website at www.townsquaremedia.com. 

A replay of the conference call will be available through November 9, 2021. To access the replay, please dial 1-844-512-2921 (U.S. and Canada) or 1-412-317-6671 (International) and enter confirmation code 13723560. A web-based archive of the conference call will also be available at the above website.

About Townsquare Media, Inc. 
Townsquare is a community-focused digital media, digital marketing solutions and radio company focused outside the Top 50 markets in the U.S. Our assets include Townsquare Interactive, a digital marketing services subscription business providing websites, search engine optimization, social platforms and online reputation management for approximately 25,950 SMBs; Townsquare IGNITE, a proprietary digital programmatic advertising technology with an in-house demand and data management platform; and Townsquare Media, our portfolio of 322 local terrestrial radio stations in 67 cities with corresponding local news and entertainment websites and apps including legendary brands such as WYRK.com, WJON.com, and NJ101.5.com along with a network of national music brands including XXLmag.com, TasteofCountry.com, UltimateClassicRock.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 or as of the date specified herein. Risks and uncertainties that could have a material impact on our business and financial results include, but are not limited to, general economic conditions in the United States, or in the specific markets in which we currently do business, industry conditions, legislative or regulatory requirements, the continuation or worsening of the effects from the COVID-19 pandemic, its scope, duration and impact on our business, financial results, cash flows and liquidity, as well as the impact on our clients and customers, the success of our mitigation efforts in response to the COVID-19 pandemic, our performance in any recovery from the COVID-19 pandemic, the performance of financial and credit markets, our ability to comply with the covenants and obligations under our outstanding debt, including meeting required payments of principal and interest, our ability to access debt or equity capital on attractive terms or at all, potential downgrades to our credit ratings, and certain other events, including future disease outbreaks and pandemics. See "Risk Factors" and "Forward-Looking Statements" included in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 16, 2021, for a discussion of additional 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.

Non-GAAP Financial Measures and Definitions
In this press release, we refer to Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA (Excluding Political), 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 Operating Income as operating income before the deduction of depreciation and amortization, stock-based compensation, corporate expenses, transaction costs, business realignment costs, impairment of goodwill, long-lived and intangible assets and net loss (gain) on sale and retirement of assets. We define Adjusted EBITDA as net income (loss) before the deduction of income taxes, interest expense, net, loss (gain) on extinguishment and modification of debt, transaction costs, depreciation and amortization, stock-based compensation, business realignment costs, impairment of long-lived and intangible assets, change in fair value of investment, net (loss) gain on sale and retirement of assets and other expense (income) net. We define Adjusted EBITDA (Excluding Political) as Adjusted EBITDA less political net revenue, net of a fifteen percent deduction to account for estimated national representative firm fees, music licensing fees and sales commissions expense. Adjusted Net Income is defined as net income (loss) before the deduction of transaction costs, business realignment costs, impairment of long-lived and intangible assets, change in fair value of investment, net loss (gain) on sale and retirement of assets, loss (gain) on extinguishment and modification of debt, gain on insurance recoveries and net income attributable to non-controlling interest, net of income taxes.  Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the weighted average shares outstanding. We define Net Leverage as our total outstanding indebtedness, net of our total cash balance as of September 30, 2021, divided by our Adjusted EBITDA for the twelve months ended September 30, 2021. These measures do not represent, and should not be considered as alternatives to or superior to, financial results and measures determined or calculated in accordance with GAAP. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. You should be aware that in the future we may incur expenses or charges that are the same as or similar to some of the adjustments in the presentation, and we do not infer that our future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP measures may not be comparable to similarly-named measures reported by other companies.

We use Adjusted Operating Income to evaluate the operating performance of our business segments. We use Adjusted EBITDA and Adjusted EBITDA (Excluding Political) 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, and to facilitate year over year comparisons, by backing out the impact of political revenue which varies depending on the election cycle and may be 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 use Net Leverage to measure the Company's ability to handle its debt burden. 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 income (loss) 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 Operating Income, Adjusted EBITDA, Adjusted EBITDA (Excluding Political), Adjusted Net Income, Adjusted Net Income Per Share and Net Leverage when determining discretionary bonuses.

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

The following table presents Net revenue and Adjusted Operating Income by segment, for the three and nine months ended September 30, 2021, and 2020, respectively (in thousands):

The following table reconciles Net revenue to Net revenue, excluding political revenue on a GAAP basis by segment for the three and nine months ended September 30, 2021, and 2020, respectively (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 Net Income (Loss) for the three and nine months ended September 30, 2021, and 2020, respectively (in thousands, except per share data):

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, Adjusted EBITDA (Excluding Political), and Adjusted EBITDA Less Interest, Capex and Taxes for the three and nine months ended September 30, 2021, and 2020, 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 September 30, 2021 (dollars in thousands):