Emmis Communications Corporation today announced results for its fourth fiscal quarter and full-year ending February 28, 2014. Emmis’ radio net revenues for the fourth fiscal quarter were up 11%, from $29. 1 million to $32.4 million. Excluding 98. 7FM in New York, which is being programmed by espn pursuant to an LMA, radio net revenues were up 12%.
These results outperformed Emmis’ local radio markets in which revenue growth improved 4% during the quarter. For the full year, radio net revenues were $145. 4 million, compared to $138.6 million in the prior year, an increase of 5%. These results also outperformed Emmis’ local radio markets in which revenue growth improved 3% for the year. Publishing net revenues were up 3% in the fourth fiscal quarter and 4% for the full year.
“Fiscal 2014 marked the fourth consecutive year we have outperformed our local radio markets and the radio industry as a whole. Our strong operating performance is the result of sound strategy and its execution by a phenomenal workforce that makes me so proud. We are very excited about the addition of WBLS and wlib in New York and the momentum behind NextRadio as we head into fiscal 2015,” Jeff Smulyan, President & CEO of Emmis said.
For the fourth fiscal quarter, operating income was $0. 7 million, compared to a loss of $0. 4 million for the same quarter of the prior year. Emmis’ Radio Station operating income for the fourth fiscal quarter was $6. 9 million, compared to $7. 1 million for the same quarter of the prior year.
The decrease in Radio Station operating income in the fourth fiscal quarter was due in part to recognition of incentive compensation expense based on full-year operating results that were achieved based on strong fourth quarter results, as well as several non-recurring items, including $0. 7 million in severance associated with the integration of WBLS and wlib.
For the full year, operating income was $22.2 million, compared to $16. 5 million in the prior year. Emmis’ Radio Station operating income in fiscal 2014 was $48.4 million, compared to $42. 9 million in fiscal 2013. During the fourth fiscal quarter, Emmis reversed substantially all of the valuation allowance previously recorded against its deferred tax assets.
As a result, Emmis recorded a benefit for income taxes of approximately $35 million in the quarter. At year-end, Emmis’ leverage ratio under its senior secured credit agreement was 2. 5x, marking Emmis’ lowest leverage ratio since 2000.
Emmis commenced providing programming and selling advertising at WBLS and wlib in New York pursuant to a Local Programming and Marketing Agreement (“LMA”) on March 1, 2014. Because this LMA commenced on the first day of Emmis’ fiscal 2015, no actual or pro forma results for these Radio Stations are included in this release.
The $0.7 million severance charge recorded in Emmis’ fourth fiscal quarter relates to Emmis employees in New York that were notified in February 2014 that their employment was being terminated.
