Townsquare Media, Inc. (NYSE: TSQ) (“Townsquare”, the “Company,” “we,” “us,” or “our”) announced today its financial results for the fourth quarter and year ended December 31, 2023.
“I am pleased to share that Townsquare’s fourth quarter results met or exceeded our previously issued guidance, and our full year results met the guidance that we issued at the start of 2023. 2023 net revenue (excluding political) decreased -0.9% year- over-year, and -1.9% in total, to $454.2 million, the second highest revenue amount in Townsquare’s history. 2023 Adjusted EBITDA (excluding political) decreased -9.1% year-over-year, and -12.1% in total, to $100.0 million. Our Digital Advertising segment delivered net revenue and Adjusted Operating Income growth this year (each +7% year-over-year), offsetting weakness in the national and network marketplace, and first-time hurdles in our Subscription Digital Marketing Solutions segment. In total, Digital now represents 51% of Townsquare’s 2023 net revenue and 55% of our 2023 Adjusted Operating Income, and maintained a 30% Adjusted Operating Income margin, consistent with 2022’s margin,” commented Bill Wilson, Chief Executive Officer of Townsquare Media, Inc. “The strong cash generation characteristics of our assets allowed us to produce $68 million of cash flow from operations in 2023, an increase of $18 million, or +35%, as compared to the prior year. We could not be more pleased to share that given our strong cash position, we were able to repurchase and retire approximately $27 million of our Unsecured Senior Notes at a discount during the year. In addition, we repurchased $17 million of our common stock, and paid a high-yielding dividend while also investing in our business. We also ended the year with a strong cash balance of $61 million and net leverage of 4.43x, retaining financial flexibility moving forward.”
Mr. Wilson continued, “Despite the lack of tailwinds at our back in 2023, I am very pleased with how the Townsquare team navigated the progressively challenging economic landscape. We outperformed competitors and gained market share due to our local focus and our digital platform. I believe that our performance over the past several years has demonstrated the efficacy of our Digital First Local Media strategy, and validated our focus on local markets outside of the Top 50 U.S. cities, reinvigorating my confidence in our business model and our path moving forward.”
The Company announced today that its Board of Directors approved a quarterly cash dividend of $0.1975 per share. The dividend will be payable on May 1, 2024 to shareholders of record as of the close of business on April 5, 2024. As of yesterday’s closing price that reflects a dividend yield of approximately 8%.
“The Board’s decision to increase the dividend reflects their ongoing confidence in our current capitalization, the strength of our balance sheet, our free cash flow generation, and our business strategy. Our quarterly cash dividend of $0.1975 per share, or $0.79 per share on an annual basis, reflects a +5.3% increase from the prior dividend,” concluded Mr. Wilson.
Segment Reporting
We have three reportable operating segments, Subscription Digital Marketing Solutions, Digital Advertising and Broadcast Advertising. The Subscription Digital Marketing Solutions segment includes our subscription digital marketing solutions business, Townsquare Interactive. The Digital Advertising segment, marketed externally as Townsquare Ignite, includes digital advertising on our owned and operated digital properties, our first party data digital management platform and our digital programmatic advertising platform. The Broadcast Advertising segment includes our local, regional, and national advertising products and solutions delivered via terrestrial radio broadcast, and other miscellaneous revenue that is associated with our broadcast advertising platform. The remainder of our business is reported in the Other category, which includes our live events business.
Fourth Quarter Results*
- As compared to the fourth quarter of 2022:
- Net revenue decreased 4.6%, and 2.7% excluding political
- Net income decreased $5.8 million
- Adjusted EBITDA decreased 12.7%
- Total Digital net revenue decreased 6.4%
- Subscription Digital Marketing Solutions (“Townsquare Interactive”) net revenue decreased 14.5%
- Digital Advertising net revenue decreased 1.5%
- Total Digital Adjusted Operating Income decreased 17.9%
- Subscription Digital Marketing Solutions Adjusted Operating Income decreased 11.3%
- Digital Advertising Adjusted Operating Income decreased 21.4%
- Broadcast Advertising net revenue decreased 2.5%, and increased 1.3% excluding political
- Diluted loss per share was $0.14, and Adjusted Net Income per diluted share was $0.34
Full Year Results*
- As compared to the year ended December 31, 2022:
- Net revenue decreased 1.9%, and 0.9% excluding political
- Net income decreased $57.4 million
- Adjusted EBITDA decreased 12.1%
- Total Digital net revenue increased 0.8%
- Subscription Digital Marketing Solutions net revenue decreased 9.1%
- Digital Advertising net revenue increased 7.1%
- Total Digital Adjusted Operating Income increased 0.5%
- Subscription Digital Marketing Solutions Adjusted Operating Income decreased 11.0%
- Digital Advertising Adjusted Operating Income increased 7.5%
- Broadcast Advertising net revenue decreased 5.4%, and 3.6% excluding political
- Repurchased an aggregate $27.1 million of our 2026 Secured Senior Notes below par
- Repurchased 1.7 million shares of the Company’s common stock *See below for discussion of non-GAAP measures.
Guidance
For the first quarter of 2024, net revenue is expected to be between $98.5 million and $100 million, and Adjusted EBITDA is expected to be between $17.5 million and $18.5 million.
For the full year 2024, net revenue guidance is expected to be between $440 million and $460 million, and Adjusted EBITDA guidance is expected to be between $100 million and $110 million.
Quarter Ended December 31, 2023 Compared to the Quarter Ended December 31, 2022
Net Revenue
Net revenue for the three months ended December 31, 2023 decreased $5.5 million, or 4.6%, to $114.8 million as compared to $120.3 million in the same period in 2022. Subscription Digital Marketing Solutions net revenue decreased $3.2 million, or 14.5%, and Broadcast Advertising net revenue decreased $1.5 million, or 2.5%, as compared to the same period in 2022. Digital Advertising net revenue decreased $0.5 million, or 1.5% and Other net revenue decreased $0.2 million, or 15.7%, as compared to the same period in 2022. Excluding political revenue of $1.7 million and $4.0 million for the three months ended December 31, 2023 and 2022, respectively, net revenue decreased $3.2 million, or 2.7%, to $113.1 million, Digital Advertising net revenue decreased $0.4 million, or 1.1%, to $36.4 million, and Broadcast Advertising net revenue increased $0.7 million, or 1.3%, to $56.3 million.
Net (Loss) Income
For the quarter ended December 31, 2023, we reported net loss of $1.9 million, as compared net income of $3.9 million in the same period last year, primarily due to a $14.0 million increase in non-cash impairment charges, and a $5.5 million decrease in net revenue, partially offset by a $10.0 million increase in income tax benefits, a $2.4 million decrease in corporate expenses due to lower compensation and a $1.8 million decrease in transaction and business realignment costs. Adjusted Net Income decreased $2.2 million, primarily driven by the decrease in net revenue and a lower provision for income taxes.
Adjusted EBITDA
Adjusted EBITDA for the three months ended December 31, 2023 decreased $3.6 million, or 12.7%, to $24.8 million, as compared to $28.4 million in the same period last year. Adjusted EBITDA (Excluding Political) decreased $1.6 million, or 6.5%, to $23.4 million, as compared to $25.0 million in the same period last year.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022
Net Revenue
Net revenue for the year ended December 31, 2023, decreased $8.8 million, or 1.9%, to $454.2 million as compared to $463.1 million in the same period in 2022. Broadcast Advertising net revenue decreased $12.2 million, or 5.4%, and Subscription Digital Marketing Solutions net revenue decreased $8.2 million, or 9.1%. These declines were partially offset by Digital Advertising net revenue which increased $9.9 million, or 7.1%, and Other net revenue which increased $1.6 million, or 18.6%, as compared to the same period in 2022. Excluding political revenue of $2.9 million and $7.5 million for the year ended December 31, 2023 and 2022, respectively, net revenue decreased $4.2 million, or 0.9% to $451.3 million, Digital Advertising net revenue increased $10.2 million, or 7.3%, to $150.1 million, and Broadcast Advertising net revenue decreased $7.8 million, or 3.6%, to $209.0 million.
Net (Loss) Income
For the year ended December 31, 2023, we reported a net loss of $43.0 million, as compared to net income of $14.4 million in the same period last year, primarily driven by a $59.5 million increase in non-cash impairment charges, a decrease in net revenue of $8.8 million, a $4.3 million increase in direct operating expenses and a $4.2 million increase in stock-based compensation, partially offset by an $8.0 million increase in other income (expense) due to sales of investments and digital assets in 2023 and a $3.3 million decrease in transaction and business realignment costs. Adjusted Net Income decreased $11.4 million, primarily driven by the decrease in net revenue and an increase of $4.3 million in direct operating expenses, partially offset by a lower provision for income taxes.
Adjusted EBITDA
Adjusted EBITDA for the year ended December 31, 2023 decreased $13.7 million, or 12.1% to $100.0 million, as compared to $113.7 million in the same period last year. Adjusted EBITDA (Excluding Political) decreased $9.8 million, or 9.1%, to $97.5 million, as compared to $107.3 million in the same period last year.
Liquidity and Capital Resources
As of December 31, 2023, we had a total of $61.0 million of cash and cash equivalents and $503.6 million of outstanding indebtedness, representing 5.04x and 4.43x gross and net leverage, respectively, based on Adjusted EBITDA for the year ended December 31, 2023, of $100.0 million.
The table below presents a summary, as of March 12, 2024, of our outstanding common stock.
Number
Security Outstanding DescriptionClass A common stock 15,818,046 One vote per share.
Class B common stock 815,296 10 votes per share.1
Total 16,633,342
1 Each share converts into one share of Class A common stock upon transfer or at the option of the holder, subject to certain conditions, including compliance with FCC rules.
