Emmis Quarterly Revenues Drop
Smulyan Sends Positive E-mail To Employees
October 9, 2009 at 7:34 AM (PT)
EMMIS COMMUNICATIONS CORP. fiscal second-quarter revenues fell 27.4% to $67,970 million, sending the company from a profit of $1.236 million to a loss of $135.561 million (3 cents/share gain to $3.67/share loss). Radio revenues fell 26.5% to $53.432 million.
"Our net revenues decreased principally as a result of a precipitous decline of advertising spending due to the global economic slowdown," the company said in its SEC filing. "Local sales have been slightly more resilient than national sales."
In the filing, EMMIS noted that its NEW YORK and LOS ANGELES stations are "trailing the performance of their respective markets" due to "lack of scale" in those markets and due to the PPM. In addition, the company claimed that its stations in those markets "principally target demographics that suffer a disproportionate decline in ratings when measured by the PPM as compared to the previously used diary methodology. Management expects the impact we have experienced from the adoption of the PPM to begin to abate in our fiscal fourth quarter of this year."
EMMIS says that its Top 40/Rhythmic KPWR (POWER 105.9)/LOS ANGELES gross revenues for the first six months of the fiscal year were down 38.9% as opposed to the market being off 26%.
In NEW YORK, the company's cluster was off 28% versus the market's 21% for the same period.
For the entire company, radio revenue (excluding the former KMVN/LOS ANGELES, now LMA'd) was off 25.8% as opposed to the markets overall being off 22.1%.
Smulyan Addresses The Troops
CEO JEFF SMULYAN wrote to the staff of EMMIS, explaining, "There's the issue of NASDAQ delisting. I understand that merely being put on notice is unsettling, but I am confident that we have the time and means to avoid delisting. Because the trigger for delisting is months away, we believe improvements in our business could drive our stock price up in time to prevent delisting. However, if the market does not respond to our progress as we expect, we can address the problem through other means over which we have more direct control. EMMIS will remain a NASDAQ firm."
He continued, "Second, TODAY we're filing SEC documents restating our earnings from our last fiscal year and from the first quarter of this fiscal year. Certainly, "restating our earnings" sounds ominous, but our restatement solely relates to a noncash technical tax issue that has no impact on our operations. While there might be big numbers involved and a lot of paperwork being filed, I don't see anything to worry about."