Emmis smacked with quarterly loss of $135M

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Emmis Communications Corp. suffered a whopping loss of $135.6 million in its most recent fiscal quarter, the Indianapolis-based media company reported Friday morning.

Much of the loss was attributed to a $160.9 million impairment charge the company took related to the declining value of its Federal Communications Commission radio licenses.

The overall loss for the quarter ended Aug. 31 translated to $3.67 per share. The company had a gain of $1.2 million, or 3 cents per share, in the same quarter a year earlier.

Quarterly revenue of $68 million was down 27 percent from $93.7 million in the same period last year.

Radio revenue fell 26.5 percent to $53.4 million, and publishing revenue fell 30.6 percent to $20.9 million.

Financial woes are nothing new to Emmis as the media industry struggles amid a poor advertising environment. In the latest fiscal year ended Feb. 28, Emmis lost $283.9 million, or $7.81 per share.

The company did manage to report a profit in its first fiscal quarter in July, but only after buying back a big chunk of its own debt on the cheap. Revenue, however, dropped from $85.3 million to $62.4 million.

Emmis stock closed yesterday at 97 cents per share, below the $1-per-share threshold it needs to meet in order to avoid delisting on the NASDAQ exchange.

NASDAQ notified Emmis in late September that it is in danger of being delisted if the company’s stock doesn’t rise above the minimum bid price for 10 consecutive business days before March 15.

In addition to filing its quarterly results Friday, Emmis amended its most recent annual report for the fiscal year 2009, which ended Feb. 28, and its first quarter 2010 report for the period ended May 31. The company said it did so because it overstated the benefit for income taxes and understated deferred tax liabilities for those periods.

The revision changed Emmis’ 2009 annual loss from $283.9 million, or $7.81 per share, to $309.2 million, or $8.50 per share. The amended first-quarter report raised profit from $7.5 million to $12 million.

Emmis Chairman Jeff Smulyan said in a memo released to employees today that the company will survive the current economic challenges. He expects Emmis to avoid delisting by NASDAQ.

“I understand that merely being put on notice is unsettling, but I am confident that we have the time and means to avoid delisting,” Smulyan said in the memo. “Because the trigger for delisting is months away, we believe improvements in our business could drive our stock price up in time to prevent delisting.”

Emmis shares were down 5 cents in late afternoon trading, to 92 cents each.

Smulyan added that he sees “nothing to worry about” concerning the restatement of earnings.

“Certainly, restating our earnings sounds ominous, but our restatement solely relates to a non-cash technical tax issue that has no impact on our operations,” Smulyan said in the memo.

Smulyan cited “sequential improvements in [Emmis’] domestic radio performance,” as a bright spot during the most recently ended quarter.

“In Q1, we were down 27 percent from the previous year; in Q2, we were down 22 percent,” Smulyan said. “Still negative, but an improvement. And we see continued improvements ahead. In fact, we think that, within a few months, we could see our first positive numbers since April of 2008.”

Smulyan credited gains in Chicago, St, Louis, Indianapolis and Austin, where Emmis stations outperformed the market, as a reason for optimism. He singled out Indianapolis station WIBC-FM 93.1 as a strong performer.


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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim