Emmis Communications Reports 1st Quarter Results

Emmis Communications Reports 1st Quarter Results

INDIANAPOLIS, July 10 /PRNewswire-FirstCall/ -- Emmis Communications Corporation (NASDAQ:EMMS) today announced results for its first fiscal quarter ended May 31, 2007.

"Our results were in line with guidance for the quarter," Emmis Chairman and CEO Jeff Smulyan said. "As expected, weakness in our radio division persisted, and we will continue to face challenges as we look for the changes we've implemented in our largest markets to gain momentum."

For the first fiscal quarter, net revenue was $87.3 million, compared to $89.8 million for the same quarter of the prior year, a decrease of 3 percent. The decrease related primarily to revenue declines at Emmis' New York and Los Angeles radio stations.

Diluted net loss per common share from continuing operations for the quarter was $0.07, representing no change from the same quarter of the prior year.

For the first quarter, radio net revenues decreased 5.5 percent, while publishing net revenues increased 6.0 percent.

For the first quarter, operating income was $12.1 million, compared to $16.1 million for the same quarter of the prior year. Emmis' station operating income for the first quarter was $23.1 million, compared to $27.3 million for the same quarter of the prior year.

Emmis has included supplemental financial data on its Web site, www.emmis.com, under the "Investors" tab.

International radio net revenues for the quarter ended May 31, 2007, were $8.2 million, up 28 percent compared to the same quarter of the prior year. International radio station operating expenses were $5.4 million, up 23 percent.

During the quarter, the Company completed its sale of KMTV-TV in Omaha to Journal Communications and received $10.0 million in cash. KMTV-TV had been operated by Journal Communications under a local programming and marketing agreement since December 5, 2005.

Subsequent to the quarter end, Emmis completed its sale of KGMB-TV in Honolulu to HITV Operating Co., Inc., a wholly-owned portfolio company of MCG Capital Corporation, for $40.0 million in cash. Emmis used the proceeds to repay outstanding debt obligations. In connection with the sale, Emmis plans to record a gain on sale of approximately $10.4 million, net of tax, in its quarter ended August 31, 2007, which will be reflected in discontinued operations.

The company expects its radio net revenues for the quarter ending Aug. 31, 2007, to decrease from the prior year in the mid- to high single digit range on a percentage basis. The company expects its radio station operating expenses for the quarter ending Aug. 31, 2007, to increase from the prior year in the mid- to high single digit range on a percentage basis. International radio operations continue to perform well, offsetting to some degree continued weakness in domestic radio operations.

Emmis will host a call regarding this information on Tuesday, July 10, at 9 a.m. Eastern at 1.517.623.4891, with a replay available through 6 p.m. Eastern on Tuesday, July 17, at 1.203.369.3744. Listen online at www.emmis.com.

Emmis generally evaluates the performance of its operating entities based on station operating income. Management believes that station operating income is useful to investors because it provides a meaningful comparison of operating performance between companies in the industry and serves as an indicator of the market value of a group of stations or publishing entities. Station operating income is generally recognized by the broadcast and publishing industries as a measure of performance and is used by analysts who report on the performance of broadcasting and publishing groups. Station operating income does not take into account Emmis' debt service requirements and other commitments, and, accordingly, station operating income is not necessarily indicative of amounts that may be available for dividends, reinvestment in Emmis' business or other discretionary uses.

Station operating income is not a measure of liquidity or of performance in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on the basis of accounting principles generally accepted in the United States. Moreover, station operating income is not a standardized measure and may be calculated in a number of ways. Emmis defines station operating income as revenues net of agency commissions and station operating expenses, excluding non-cash compensation.

Emmis Communications - Great Media, Great People, Great Service(R) Emmis is an Indianapolis-based diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations. Emmis owns 21 FM and 2 AM domestic radio stations serving the nation's largest markets of New York, Los Angeles and Chicago, as well as St. Louis, Austin, Indianapolis and Terre Haute, Ind. In May 2005, Emmis announced its intent to seek strategic alternatives for its 16 television stations, and has since sold 15 of them. Emmis also owns a radio network, international radio stations, regional and specialty magazines, an interactive business and ancillary businesses in broadcast sales.

The information in this news release is being widely disseminated in accordance with the Securities & Exchange Commission's Regulation FD.

Note: Certain statements included in this release or in the attached financial data which are not statements of historical fact, including but not limited to those identified with the words "expect," "will" or "look" are intended to be, and are, by this Note, identified as "forward-looking statements," as defined in the Securities and Exchange Act of 1934, as amended. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others:

   -- general economic and business conditions;   -- fluctuations in the demands for advertising and demand for different      types of advertising media;   -- our ability to service our outstanding debt;   -- increased competition in our markets and the broadcasting industry;   -- our ability to attract and secure programming, on-air talent, writers      and photographers;   -- inability to obtain (or to obtain timely) necessary      approvals for purchase or sale transactions or to complete the      transactions for other reasons generally beyond our control;   -- changes in radio audience measurement methodologies;   -- increases in the costs of programming, including on-air talent;   -- inability to grow through suitable acquisitions;   -- new or changing regulations of the Federal Communications Commission      or other governmental agencies;   -- competition from new or different technologies;   -- war, terrorist acts or political instability; and   -- other factors mentioned in documents filed by the company with the      Securities and Exchange Commission.   

Emmis does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

             EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES                    CONDENSED CONSOLIDATED FINANCIAL DATA          (Unaudited, dollars in thousands, except per share data)                                            Three months ended May 31, 2007                                                2007            2006    OPERATING DATA:   Net revenues:   Radio                                     $ 65,000         $ 68,794   Publishing                                  22,263           20,993     Total net revenues                        87,263           89,787   Operating expenses:   Radio                                       45,720           43,751   Publishing                                  19,687           19,885     Total station operating expenses          65,407           63,636   Corporate expenses                           6,326            6,782   Depreciation and amortization                3,458            3,275    Operating income                            12,072           16,094   Interest expense                            (9,332)         (12,562)   Loss on debt extinguishment (a)                  -           (2,843)   Other income (expense), net                    (64)             343    Income before income taxes, minority    interest and discontinued operations        2,676            1,032   Provision for income taxes                   1,992               68   Minority interest expense, net of tax        1,193            1,171    Loss from continuing operations               (509)            (207)   Income from discontinued operations,    net of tax                                    820            8,923   Net income                                     311            8,716   Preferred stock dividends                    2,246            2,246   Net income (loss) available to common    shareholders                             $ (1,935)         $ 6,470    Basic net income (loss) per common share:   Continuing operations                      $ (0.07)         $ (0.07)   Discontinued operations, net of tax           0.02             0.24   Net income available to common    shareholders                              $ (0.05)          $ 0.17    Diluted net income (loss) per common share:   Continuing operations                      $ (0.07)         $ (0.07)   Discontinued operations, net of tax           0.02             0.24   Net income available to common    shareholders                              $ (0.05)          $ 0.17    Weighted average shares outstanding:     Basic                                     37,526           37,129     Diluted                                   37,526           37,129    (a) Three months ended May 31, 2006 reflects the costs of our senior       floating rate notes and senior discount notes redemptions.    OTHER DATA:   Station operating income (See below)         23,127           27,273   Cash paid for taxes                           1,583              201   Cash paid for interest                        3,381           19,493   Capital expenditures                            974              594    Noncash compensation by segment:      Radio                                      $ 775            $ 757      Publishing                                   496              365      Corporate                                  1,102            1,350         Total                                 $ 2,373          $ 2,472    COMPUTATION OF STATION OPERATING INCOME:    Operating income (loss)                   $ 12,072         $ 16,094    Plus: Depreciation and amortization          3,458            3,275    Plus: Corporate expenses                     6,326            6,782    Plus: Station noncash compensation           1,271            1,122    Station operating income                  $ 23,127         $ 27,273    SELECTED BALANCE SHEET INFORMATION:      May 31, 2007    February 28, 2007    Total Cash and Cash Equivalents            $ 13,873          $ 20,747   Senior Debt                               $ 480,000         $ 498,000  

First Call Analyst:
FCMN Contact:

Source: Emmis Communications

CONTACT: Patrick Walsh, CFO or Jodi Wright, Media & Investor Relations,
+1-317-266-0100, both of Emmis Communications

Web site: http://www.emmis.com/

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Profile: International Entertainment