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Emmis reports smaller annual loss on higher revenue

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Indianapolis-based Emmis Communications Corp. on Tuesday reported a smaller loss and higher revenue in its latest fiscal year, attributing its improving financial condition to a recovering economy.

For its fiscal year ended Feb. 28, Emmis suffered a loss of $25.2 million, or 67 cents per share, compared with a loss of $131.7 million, or $3.56 per share, in the previous fiscal year.

Revenue from the company’s radio operations grew 4.3 percent, to $185.2 million, helping overall revenue rise 3.6 percent from the previous year, to $251.3 million.

Emmis owns 23 radio stations in seven U.S. markets and publishes seven U.S. magazines, in addition to operating radio networks in Bulgaria and Slovakia.

“Radio net revenues increased principally as a result of general economic growth in our domestic radio markets as the economy recovers from the recent recession,” the company said in its annual report.

Still, Emmis continues to contend with a heavy debt load that totaled $331 million as of Feb. 28. The company received a bit of relief in late March, when it reached an agreement with one of its largest lenders, Canyon Capital Advisors LLC in Los Angeles, to extend the maturity date on $182.9 million in senior bank debt for an additional year—from November 2013 to November 2014.

In a letter to employees at the time, Emmis CEO Jeff Smulyan said the move gave the company additional flexibility to operate more effectively. “It means that Emmis is on more solid footing than we were just a few days ago,” he said. “We need you to continue focusing on working hard and bringing our business back. We’ve seen remarkable trends in the last few months, and I know we can continue the momentum.”

The company, however, acknowledged in its annual report that it could default on the loans if it cannot comply with the financial agreements. The large amount of debt continues to weigh on Emmis following Smulyan’s attempt last year to take the company private.

Emmis announced in May 2010 a $90 million buyout bid by JS Acquisition LLC, a private company formed by Smulyan. A group of preferred shareholders blocked the deal, and Smulyan’s financial backer, New York-based Alden Global Capital, backed out of an “agreement in principle” to sweeten the terms for the preferred shareholders.

The failed attempt to take Emmis private has resulted in three lawsuits, the latest filed in March by Emmis in a federal court in New York.

Emmis shares rose 2 cents in early trading Tuesday, to $1.06 each.

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