Townsquare Media(TSQ) - 2025 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The unaudited consolidated financial statements for the quarter ended March 31, 2025, show a slight decrease in total revenue compared to the prior year's quarter, with a net loss primarily due to debt refinancing costs Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $544.5 million from $580.4 million, mainly due to reduced cash, while total liabilities decreased to $571.3 million from $608.9 million due to debt refinancing Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $5,528 | $32,990 | | Total current assets | $70,869 | $105,447 | | Total assets | $544,516 | $580,414 | | Liabilities & Equity | | | | Current portion of long-term debt | $11,750 | $0 | | Total current liabilities | $72,610 | $76,256 | | Long-term debt, net | $436,659 | $465,756 | | Total liabilities | $571,342 | $608,856 | | Total stockholders' deficit | ($26,826) | ($28,442) | Consolidated Statements of Operations For Q1 2025, net revenue decreased by 1.0% to $98.7 million, resulting in a net loss of $1.5 million, or ($0.12) per share, primarily due to a loss on debt extinguishment and increased interest expense Q1 Financial Performance (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net revenue | $98,675 | $99,633 | (1.0)% | | Operating income | $7,133 | $6,640 | 7.4% | | Interest expense, net | $10,239 | $9,031 | 13.4% | | Loss on extinguishment of debt | $1,452 | $0 | N/A | | Net (loss) income | ($1,511) | $1,553 | N/A | | Diluted (loss) income per share | ($0.12) | $0.06 | N/A | Consolidated Statements of Cash Flows In Q1 2025, cash and cash equivalents decreased by $27.1 million, with net cash used in operating activities at $0.1 million and significant financing activities related to debt refinancing Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($66) | $1,671 | | Net cash used in investing activities | ($4,344) | ($281) | | Net cash used in financing activities | ($22,729) | ($5,834) | | Net decrease in cash | ($27,139) | ($4,444) | Notes to Unaudited Consolidated Financial Statements The notes detail revenue disaggregation, a major debt refinancing in February 2025, the absence of goodwill impairment in Q1 2025, and specifics on stock-based compensation and dividend payments - Digital Advertising revenue grew 7.6% YoY to $36.8 million, and Subscription Digital Marketing Solutions revenue grew 4.2% to $19.0 million[27][121] - In February 2025, the company refinanced its debt, entering a new $470 million Term Loan and $20 million Revolver to redeem its outstanding 2026 Notes, resulting in a $1.5 million loss on debt extinguishment[59][60][61] - The company declared a quarterly dividend of $0.20 per share in March 2025, an increase from the prior dividend[85] - No impairment charges were recorded for intangible assets in Q1 2025, compared to a $1.6 million impairment charge in Q1 2024[47][126] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 1.0% YoY revenue decline to Broadcast Advertising softness, offset by digital growth, and highlights the successful February 2025 debt refinancing that provides financial stability and sufficient liquidity for the next twelve months Consolidated and Segment Results of Operations Net revenue for Q1 2025 decreased by $1.0 million (1.0%) YoY, driven by a decline in Broadcast Advertising, partially offset by growth in Digital Advertising and Subscription Digital Marketing Solutions, resulting in flat overall segment profit Segment Revenue and Profit (Q1 2025 vs Q1 2024, in thousands) | Segment | Net Revenue (2025) | Net Revenue (2024) | % Change | Segment Profit (2025) | Segment Profit (2024) | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Digital Advertising | $36,751 | $34,156 | 7.6% | $7,900 | $7,056 | 12.0% | | Subscription Digital Marketing Solutions | $19,022 | $18,253 | 4.2% | $6,176 | $5,056 | 22.2% | | Broadcast Advertising | $41,315 | $45,455 | (9.1)% | $8,372 | $10,185 | (17.8)% | | Total | $98,675 | $99,633 | (1.0)% | $22,859 | $22,738 | 0.5% | - Stock-based compensation expense increased by 45.9% to $4.2 million, primarily due to a stock bonus program and new grants[120][125] Liquidity and Capital Resources The company ended Q1 2025 with $5.5 million in cash, having completed a major debt refinancing that resulted in $448.4 million of net outstanding indebtedness, and expects sufficient liquidity for the next year - The company completed a major debt refinancing, repaying $467.4 million of its 2026 Notes and entering a new credit agreement for a $470 million Term Loan and a $20 million Revolver[115][116][136] - As of March 31, 2025, the company had $5.5 million in cash and cash equivalents and expects debt service requirements of approximately $55.8 million over the next twelve months[138][139] - The board of directors approved a quarterly cash dividend of $0.20 per share, payable on August 1, 2025[140] Item 4. Controls and Procedures The company's CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[148] - No changes in internal controls over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[150] PART II OTHER INFORMATION Item 1. Legal Proceedings The company reports no current material pending litigation and no material legal proceedings were resolved during the first quarter of 2025 - The company is not a party to any material pending litigation and does not believe the resolution of any current matters will have a material adverse effect on its financial position[153] Item 1A. Risk Factors This section refers readers to the company's 2024 Annual Report on Form 10-K for a comprehensive discussion of risk factors, as no new material risks were identified in this quarterly report - For information on material risks, the company refers to its 2024 Annual Report on Form 10-K[154] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities and no open market share repurchases during the quarter, with only a small number of shares acquired from employees for tax withholding - No shares of common stock were repurchased on the open market during the three months ended March 31, 2025[90] Share Purchases in Q1 2025 | Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 1 - Jan 31, 2025 | 3,136 | $9.14 | | Feb 1 - Feb 28, 2025 | 0 | $0 | | Mar 1 - Mar 31, 2025 | 0 | $0 | | Total | 3,136 | $9.14 | (1) Shares transferred from employees to satisfy tax withholding obligations Item 3, 4, 5, 6. Other Disclosures and Exhibits The company confirms no defaults on senior securities, no mine safety disclosures, and no adoption or termination of Rule 10b5-1 trading arrangements by directors or executive officers during the quarter, concluding with an index of exhibits filed - The company reported no defaults on senior securities, no mine safety disclosures, and no new or terminated executive trading plans under Rule 10b5-1[156][157][158]