Townsquare Media, Inc. (NYSE: TSQ) (“Townsquare”, the “Company,” “we,” “us,” or “our”) announced today financial results for the first quarter ended March 31, 2021.
“We are extremely proud to report that Townsquare’s first quarter 2021 results approached, and in some cases exceeded, levels achieved in the pre-COVID first quarter of 2019, which surpassed our expectations and previously stated guidance. In the first quarter of 2021, net revenue declined -5% year over year, and -1.6% excluding political and Live Events net revenue. When excluding Live Events net revenue, first quarter net revenue increased +0.3% as compared to the first quarter of 2019. Total digital revenue growth accelerated to +13% year over year (+32% vs. Q1 2019), contributing nearly 49% of Townsquare’s total first quarter net revenue. Our digital revenue growth was fueled by Townsquare Interactive (TSI), our digital marketing solutions subscription business, Townsquare Ignite, our digital programming advertising platform, and Townsquare Amped, digital advertising on our owned and operated brands, which increased revenue year over year by +15%, +12%, and +11%, respectively. Impressively, TSI, Ignite, and Amped’s first quarter net revenue exceeded Q1 2019 revenue levels by +34%, +45%, and +15%, respectively. Over the next three years, we expect to grow our digital net revenue from $167 million (on a trailing twelve-month basis as of March 31, 2021) to $250 million,” commented Bill Wilson, Chief Executive Officer of Townsquare Media, Inc. “The strong growth of our digital revenue, together with our strong expense management, led to Adjusted EBITDA increasing nearly +30% over the prior year. I am especially proud to share that first quarter Adjusted EBITDA of $20.1 million is +$1.3 million, or +7%, higher than Q1 2019’s pro forma Adjusted EBITDA, and +$2.1 million, or +12%, higher when excluding profit from Live Events.”
First Quarter Highlights*
- As compared to the first quarter of 2020:
- Net revenue decreased 5.0%, and 4.1% excluding political revenue
- Net revenue decreased 1.6% excluding political and Live Events net revenue
- Net loss decreased $53.5 million to a net loss of $6.1 million
- Adjusted EBITDA increased 29.7% to $20.1 million
- Townsquare Interactive net subscription revenue increased 14.9% to $19.0 million
- Townsquare Interactive Adjusted Operating Income increased 30.4% to $5.9 million
- Advertising net revenue decreased 6.4% and 5.3% excluding political revenue
- Live Events net revenue decreased 99.7%
- Diluted income per share was $(0.35), and Adjusted Net Income per diluted share was $0.17
- Generated Cash Flow from Operations of $19.4 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 850 net subscribers, the 12th consecutive quarter of 850 or more net subscriber additions
*See below for discussion of non-GAAP measures. As used in this release, the term “pro forma” means pro forma for the divestiture of our Arizona Bridal Shows business (consisting of two expositions) on March 18, 2019, giving effect to such divestitures as if they had occurred on January 1, 2019.
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 March 31, 2021 Compared to the Quarter Ended March 31, 2020
Net Revenue
Net revenue for the quarter ended March 31, 2021 decreased $4.7 million, or 5.0%, to $88.8 million, as compared to $93.4 million in the same period last year. Townsquare Interactive net subscription revenue increased $2.5 million, or 14.9%, to $19.0 million, Advertising net revenue decreased $4.8 million, or 6.4%, to $69.8 million, and Live Events net revenue decreased $2.4 million, or 99.7%, to $7.0 thousand, each as compared to the same period last year. Excluding political revenue, net revenue decreased $3.8 million, or 4.1%, to $88.3 million, and Advertising net revenue decreased $3.9 million, or 5.3%, to $69.3 million.
Adjusted EBITDA
Adjusted EBITDA for the quarter ended March 31, 2021 increased $4.6 million, or 29.7% to $20.1 million, as compared to $15.5 million in the same period last year. Adjusted EBITDA (Excluding Political) increased $5.4 million, or 37.3%, to $19.7 million, as compared to $14.4 million in the same period last year.
Net Loss
Net loss for the quarter ended March 31, 2021 decreased $53.5 million to $6.1 million, as compared to net loss of $59.6 million in the same period last year.
Liquidity and Capital Resources
As of March 31, 2021, we had a total of $20.1 million of cash and cash equivalents and $550.0 million of outstanding indebtedness, representing 8.2x and 7.9x gross and net leverage, respectively, based on Adjusted EBITDA for the twelve months ended March 31, 2021 of $66.7 million.
On January 6, 2021, the Company completed the private offering and sale of $550.0 million aggregate principal amount of 6.875% senior secured notes due 2026 (the “2026 Notes”) at an issue price of 100.0%. The net proceeds from the 2026 Notes, together with cash on hand, were used to repay: (i) borrowings under the 2015 senior secured credit facility, including $272.4 million principal amount of term loans and $2.1 million in accrued interest, (ii) $273.4 million of principal amount of the 6.5% Unsecured Senior Notes due in 2023, a prepayment premium of $4.4 million and $5.1 million in accrued interest, and (iii), fees and expenses related thereto.
Oaktree Stock Repurchase
On March 9, 2021, the Company repurchased all of the outstanding securities held by Oaktree Capital Management L.P. and its affiliates (“Oaktree”), including 1,595,224 shares of Class A Common Stock, 2,151,373 shares of Class B Common Stock and 8,814,980 warrants for an aggregate purchase price of $80.4 million, or $6.40 per security, and incurred fees related to the repurchase of the securities in the amount of $1.6 million.
The table below presents a summary, as of May 5, 2021, of our outstanding common stock, and securities convertible into common stock, excluding options issued under our 2014 Omnibus Incentive Plan.
|
Security |
Number Outstanding |
Description |
|||
|
Class A common stock |
14,674,552 |
One vote per share. |
|||
|
Class B common stock |
815,296 |
10 votes per share.1 |
|||
|
Class C common stock |
836,341 |
No votes.1 |
|||
|
Warrants |
162,696 |
Each warrant is exercisable for one share of Class A common stock, at an exercise price of $0.0001 per share. The aggregate exercise price for all warrants currently outstanding is $16.2 |
|||
|
Total |
16,488,885 |
||||
|
1 Each share converts into one share of Class A common stock upon transfer or at the option of the holder, subject to certain conditions, including compliance with FCC rules. |
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|
2 The warrants are fully vested and exercisable for shares of Class A common stock, subject to certain conditions, including compliance with FCC rules. |
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Conference Call
Townsquare Media, Inc. will host a conference call to discuss certain first quarter 2021 financial results on Monday, May 10, 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 13719031. 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 May 17, 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 13719031. A web-based archive of the conference call will also be available at the above website.
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