Jeff Smulyan Gets Staff Upbeat About Q1 Financials
July 10, 2009 at 6:50 AM (PT)
We’re releasing our financial results for the first fiscal quarter, covering MARCH, APRIL and MAY.
The headline, I suppose, is what you would expect: We continue to fight against the impact of a remarkably difficult economy. While I believe we have seen the bottom of this downturn, what no one can say is how long it will take to climb out of the trough. Therefore, we continue to do what’s necessary to survive and prepare for better times.
The good news is that our strategy is working. By focusing on debt reduction, maintaining compliance with our banking agreements and reducing expenses, EMMIS is protecting itself from the financial failure that threatens so many others these days.
Specifically, in the first quarter we hit our budget, or, rather, you hit our budget. You did what we asked, aggressively managing costs and hustling for every available revenue dollar. At the same time, we reduced our debt by nearly 20%, continued making interest payments, sold our unprofitable BELGIUM radio operation and made the difficult decisions to cut positions and reduce salaries. While I can’t point to any big shifts in the outlook, I do see encouraging, incremental improvements in pacings and ratings in radio.
One point I would like to make emphatically: While some of you have voiced concern over EMMIS’ being downgraded by rating agencies, or by talk of bankruptcies in our sectors, I can tell you this: We are putting ourselves in a position to survive. Even in these difficult times, for example, our cash flow is considerably greater than our interest payments and we are meeting all of our debt obligations -- a key variable in times like these.
The fight isn’t over, so I ask you to focus on what EMMIS will be when this downturn passes: an organization with the resources to regain its position as a world-class media company. I thank you for the work you do every day to make that possible, and for your patience in these hard times.
Radio Revenues Down 27%
EMMIS did report that radio revenues fell 27% in the second quarter of 2009 compared to the same period in 2008 -- from $63.6 million to $46.2 million.
This contributed to an operating lose of $6 million, versus income of $13.9 million in the second quarter of 2008. Station operating income in particular plunged 67% to $8.1 million.