Townsquare Media(US:TSQ)2024-11-07 11:05Revenue Performance - Net revenue for the three months ended September 30, 2024, increased by $0.2 million, or 0.2%, driven by a $1.9 million increase in Digital Advertising net revenue[120]. - Net revenue for the nine months ended September 30, 2024, decreased by $6.3 million, or 1.8%, primarily due to a $7.2 million decrease in Subscription Digital Marketing Solutions net revenue[123]. - Net revenue for the three months ended September 30, 2024, increased by $0.2 million, or 0.2%, compared to the same period in 2023, driven by a $1.9 million increase in Digital Advertising revenue[128]. - Subscription Digital Marketing Solutions net revenue decreased by $1.2 million, or 5.8%, due to a reduction in net subscribers compared to the same period in 2023[128]. - Digital Advertising net revenue increased by $2.7 million, or 2.4%, during the nine months ended September 30, 2024, due to purchases of new advertising[140]. - Net revenue for the nine months ended September 30, 2024, decreased by $6.3 million, or 1.8%, compared to the same period in 2023[140]. Operating Income and Expenses - Operating income for the three months ended September 30, 2024, increased by $25.8 million, primarily due to a $29.0 million decrease in non-cash impairment charges[121]. - Operating income for the nine months ended September 30, 2024, increased by $11.6 million, primarily due to a $29.4 million decrease in non-cash impairment charges[124]. - Total operating costs and expenses for the three months ended September 30, 2024, decreased by $25.5 million, or 20.3%, compared to the same period in 2023[126]. - Total operating costs and expenses for the nine months ended September 30, 2024, decreased by $17.9 million, or 5.1%, compared to the same period in 2023[138]. - Direct operating expenses for the three months ended September 30, 2024, increased by $2.5 million, or 3.0%, primarily due to higher costs in Digital Advertising[129]. - Direct operating expenses for the nine months ended September 30, 2024, increased by $0.9 million, or 0.4%, compared to the same period in 2023[141]. - Digital Advertising direct operating expenses increased by $10.0 million, or 12.9%, due to higher inventory and compensation costs[141]. Segment Performance - Broadcast Advertising reported operating income of $12.7 million for the three months ended September 30, 2024, compared to an operating loss of $13.1 million for the same period in 2023[122]. - Subscription Digital Marketing Solutions reported operating income of $4.4 million, a decrease of $0.9 million from the same period in 2023[122]. - Digital Advertising segment reported operating income of $10.4 million for the three months ended September 30, 2024, a decrease of $1.0 million compared to the same period in 2023[122]. Impairment Charges - The Company recognized a non-cash goodwill impairment charge of $1.7 million for the Live Events reporting unit due to continuing declines in revenue and profit[134]. - Total impairment charges related to FCC licenses were $29.7 million in 2024, down from $48.4 million in 2023[144]. Cash Flow and Debt - Net cash provided by operating activities was $20.6 million for the nine months ended September 30, 2024, down from $39.0 million in 2023[158]. - Net cash used in investing activities was $7.6 million for the nine months ended September 30, 2024, compared to $0.4 million in 2023[159]. - Net cash used in financing activities increased to $52.2 million in 2024 from $44.0 million in 2023, driven by higher stock repurchases and dividend payments[160]. - As of September 30, 2024, the company had $476.7 million of outstanding indebtedness[162]. - The company repurchased an aggregate $24.7 million principal amount of its 2026 Notes below par during the nine months ended September 30, 2024[167]. Accounting and Estimates - Management evaluates significant estimates related to fair value of assets and liabilities, impairment testing, and share-based payment expense[172]. - There have been no material changes to critical accounting policies and estimates as filed in the 2023 Annual Report on Form 10-K[174]. - Actual results may differ from estimates, which could be material to the financial statements[173]. Tax Rate - The effective tax rate for the three months ended September 30, 2024, was approximately 82.6%, compared to 91.9% for the same period in 2023[136]. Stock-Based Compensation - Stock-based compensation expense increased by $0.5 million, or 22.0%, primarily due to expenses recognized for the stock bonus program[130]. - Stock-based compensation expense increased by $7.8 million, or 125.8%, due to cash settlement of options and stock bonus programs[143]. Company Operations - The company operates 349 local terrestrial radio stations in 74 U.S. markets, primarily outside the top 50 markets[107]. - The company’s diversified product offering helps mitigate risks associated with advertising revenue dependency[108].