Pandemic Pounds Entercom In Second Quarter

Q2 Down

ENTERCOM COMMUNICATIONS CORP. second quarter 2020 net revenues took a solid hit from the COVID-19 pandemic, falling 54% year-to-year to $175.9 million, with spot revenue off 65% while digital revenue rose 19%. The bad news was tempered somewhat by improvement since the APRIL nadir, continuing through the SUMMER and into third quarter billing.

The company cut station expenses by 32% (including furloughs and job cuts) to $188.9 million and reduced corporate expenses by 45% to $8.4 million. Net income went from a gain of $26 million to a loss of $54 million (19 to -40 cents/basic and diluted share). Operating income fell from a gain of $64.8 million to a loss of $45.3 million, which included a non-cash impairment charge of $4.2 million. Adjusted EBITDA dropped from a positive $87.6 million to negative $20 million.

Pres./CEO DAVID J. FIELD said, “While ENTERCOM generated significant revenue and EBITDA growth prior to the pandemic, second quarter results reflect the impact of the national economic challenges that quickly emerged as many advertisers closed businesses and significantly reduced their ad spend. Given our national leadership position in sports, second quarter top-line results were also significantly impacted by the cancellation of virtually all scheduled sporting events during the quarter. Excluding the impact of cancelled sports play-by-play, second quarter revenues declined 47%. However, after bottoming out in APRIL, we have achieved significant sequential improvement every month through the SUMMER with third quarter business on books already 30% greater than where the second quarter finished.

“The pandemic challenges accelerated our on-going transformation initiatives with a heightened focus on enhancing our business model, accelerating our growth opportunities, more fully integrating our powerful product offerings, and improving our service to both listeners and customers. In this regard, we implemented a range of company-wide initiatives, which lowered second quarter total cash operating expense by approximately $97 million, which exceeded our budget. In addition, we secured our strong liquidity position through an amendment to our credit facility and ended the second quarter with $208 million of cash, up from $189 million at the end of MARCH.

“Looking ahead, as the country’s #1 creator of original, premium audio content with robust data, analytics and attribution capabilities, scaled audience reach and a leadership position in virtually every segment of the dynamic and growing audio market, including broadcasting, podcasting, digital, events, network, sports and news, ENTERCOM is strategically well-positioned for future growth and performance. Improving revenue trends combined with enhancements to our business model and active management of our balance sheet will enable ENTERCOM to emerge as an even stronger company and build meaningful shareholder value. I want to thank our team for their resilience, dedication, and exceptional work as they have gone above and beyond to serve our listeners, advertisers and communities under the most challenging of circumstances over the past several months.”

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