Emmis revenue up, but lower station valuation causes loss

Emmis Communications Corp. reported an big increase in fourth-quarter and full-year radio station revenue, but took a sizable loss due to a one-time, non-cash charge to reflect reductions in the value of station licenses it owns.

Indianapolis-based Emmis recorded non-cash impairment losses totaling $74.6 million in the period ended Feb. 28, the company said Thursday moring in its earnings report. The charges and the valuation allowance have no impact on Emmis’ cash flows, debt compliance, or ongoing operations, company officials noted.

The impairment loss led to a $105.8 million loss for the quarter, compared with a $33.2 million profit for the same period a year ago, and a $99.3 million loss for the year compared with a $43.8 million profit a year ago.

Emmis’ radio revenue for the fourth fiscal quarter was $38.8 million, up from $32.3 million from the prior year, an increase of 20 percent.

On a pro-forma basis, Emmis revenue reported to Miller Kaplan in the markets where the company competes (excluding barter and syndication revenue) was up 0.8 percent even though those markets were down 2.5 percent overall.  

For the full year, radio revenues were $176.3 million, compared to $145.3 million in the prior year, an increase of 21 percent.  On a pro-forma basis, Emmis revenues reported in the markets where it competes were up 1.6 percent for the year, while the markets were down 3.7 percent overall.

“February is the 15th consecutive month we have outperformed our markets, which we think is exceptional,” Emmis Chairman Jeff Smulyansaid in a written statement.

Advertising sales in the health care, retail, media, education and financial services sectors were up for the quarter, Emmis officials said.

Advertising revenue from quick-service restaurants, entertainment, automotive and wireless sectors were down. Especially concerning, Emmis officials said during Thursday’s conference call, is that automotive advertising—which accounts for 13 percent of its advertising revenue—was down 1 percent. Wireless advertising—its third largest advertising category—was down 35 percent for the quarter.

Emmis’ publishing revenue was down 1 percent for the quarter, but up 2 percent for the year.

Overall revenue was $53.4 million for the quarter, compared with $46.9 million a year ago, and $237.9 million for the fiscal year, up from $205.1 million.

Emmis shares were up 6 percent Thursday afternoon, to $1.31 each, but have fallen nearly 30 percent since the beginning of the year.