Townsquare Reports Strong Third Quarter Net Revenue (99% Of Q3 2019) And Adjusted EBITDA (104% Of Q3 2019)

Rhea-AI Summary

Townsquare Media, Inc. (TSQ) reported Q3 2021 results showing significant growth in net revenue, Adjusted EBITDA, and net income. Net revenue increased 16.7% year-over-year to $111.3 million, while Adjusted EBITDA rose 66.5% to $29.2 million. Digital revenue accounted for about 47% of total net revenue, growing 20.2% year-over-year. Year-to-date, net revenue grew 16.9% to $307.4 million. Townsquare is projecting full-year net revenue of at least $415 million and Adjusted EBITDA of $104-$105 million, indicating strong recovery and performance compared to 2019 levels.

Positive

• Net revenue increased 16.7% year-over-year in Q3 2021, reaching $111.3 million.
• Adjusted EBITDA rose 66.5% year-over-year to $29.2 million.
• Net income increased to $12.9 million, up from $1.3 million in Q3 2020.
• Digital net revenue surged 20.2% year-over-year.
• Year-to-date net revenue for 2021 is up 16.9% to $307.4 million.
• Full-year 2021 net revenue expected to be at least $415 million.

Negative

• Net revenue was only at 98.9% of Q3 2019 levels, indicating ongoing challenges compared to pre-pandemic performance.

PURCHASE, N.Y., Nov. 2, 2021 /PRNewswire/ -- Townsquare Media, Inc. (NYSE: TSQ) ("Townsquare", the "Company," "we," "us," or "our") announced today financial results for the third quarter ended September 30, 2021.

"Townsquare's strong performance continued in the third quarter of 2021, highlighted by robust year-over-year net revenue, Adjusted EBITDA, and net income growth.  Adjusted EBITDA surpassed 2019 levels for the fourth consecutive quarter, and net revenue was at 99% of 2019 levels.  In the third quarter of 2021, net revenue increased +17% year over year (-1% vs. Q3 2019),  Adjusted EBITDA increased +67% year over year (+4% vs. Q3 2019), and net income increased $11.6 million year over year (+77% vs. Q3 2019)," commented Bill Wilson, Chief Executive Officer of Townsquare Media, Inc. "As a Digital First Company with approximately 47% of total net revenue (excluding political) coming from our digital platform and solutions, we continue to separate ourselves from the local competition.  In the third quarter, total digital revenue increased +20% year over year (+29% vs. Q3 2019), and we expect double-digit digital net revenue growth to continue, fueling the growth of our digital platform from $188 million of revenue (on a trailing twelve-month basis as of September 30, 2021) to $250 million in just three short years.  Our digital revenue growth, combined with strong profit growth, allowed us to reduce net leverage to 4.9x as of September 30th, a meaningful reduction of 2.9x year over year."

Mr. Wilson added, "I am incredibly proud of the Townsquare Team and the results we have delivered to date, which sets us up to noticeably exceed 2019's Adjusted EBITDA in FY 2021, marking a record profit level for our Company.  Although COVID is far from over, we have been able to achieve our revenue and EBITDA targets faster than we had initially planned for while gaining market share. As such, we are quickly moving towards our ultimate goal of being the number one local media company in each of our 67 markets."

Third Quarter Highlights*

• As compared to the third quarter of 2020:
• Net revenue increased 16.7%, and 21.8% excluding political revenue
• Net income increased $11.6 million to $12.9 million
• Adjusted EBITDA increased 66.5%
• Digital net revenue increased 20.2%
• Townsquare Interactive net subscription revenue increased 16.2% to $21.1 million
• Townsquare Interactive Adjusted Operating Income increased 12.6% to $6.2 million
• Advertising net revenue increased 13.3%, and 19.5% excluding political revenue
• Live Events net revenue increased $2.7 million
• Net revenue achieved 98.9% of Q3 2019 levels, and 99.6% excluding Live Events
• Diluted income per share was $0.64, and Adjusted Net Income per diluted share was $0.54
• Townsquare Interactive added approximately 1,000 net subscribers

Year to Date Highlights*

• As compared to the nine months ended September 30, 2020:
• Net revenue increased 16.9%, and 19.3% excluding political revenue
• Net income increased $101.9 million to $16.9 million
• Adjusted EBITDA increased 126.8%
• Digital net revenue increased 22.7%
• Townsquare Interactive net subscription revenue increased 17.0% to $60.3 million
• Townsquare Interactive Adjusted Operating Income increased 19.9% to $18.2 million
• Advertising net revenue increased 16.4%, and 19.4% excluding political revenue
• Live Events net revenue increased 59.9%
• Net revenue achieved 96.3% of September YTD 2019 levels, and 99.7% excluding Live Events
• Generated Cash Flows from Operations of $38.2 million
• Issued $550.0 million of 6.875% senior secured notes due 2026
• Completed the repurchase of 100% of Oaktree Capital's equity interest in the Company for $6.40 per security, representing a 19% discount to the pre-announcement share price (39% as of the March 9, 2021 closing date)
• Townsquare Interactive added approximately 3,200 net subscribers

*See below for discussion of non-GAAP measures.

Guidance
Based on the Company's third quarter results and its outlook for the remainder of 2021, Townsquare is updating its net revenue and Adjusted EBITDA guidance for the full year 2021 as follows:

• For the full year 2021, net revenue is expected to be at least $415 million (96% of 2019 net revenue, and 99% excluding Live Events net revenue), which is an increase of $5 million from previous guidance
• For the full year 2021, Adjusted EBITDA is expected to be between $104 million and $105 million (102% to 103% of 2019 Adjusted EBITDA), which is an increase of $2 million to $3 million from previous guidance

Segment Reporting
We have three reportable operating segments, Townsquare Interactive, our digital marketing solutions subscription business, Advertising, which includes broadcast and digital advertising products and solutions, and Live Events, which is comprised of the Company's live events, including concerts, expositions and other experiential events.

Quarter Ended September 30, 2021 Compared to the Quarter Ended September 30, 2020

Net Revenue
Net revenue for the quarter ended September 30, 2021 increased $15.9 million, or 16.7%, to $111.3 million, as compared to $95.4 million in the same period last year. Townsquare Interactive net subscription revenue increased $2.9 million, or 16.2%, to $21.1 million, Advertising net revenue increased $10.3 million, or 13.3%, to $87.4 million, and Live Events net revenue increased $2.7 million to $2.7 million, each as compared to the same period last year. Excluding political revenue, net revenue increased $19.8 million, or 21.8%, to $110.7 million, and Advertising net revenue increased $14.2 million, or 19.5%, to $86.8 million.

Adjusted EBITDA
Adjusted EBITDA for the quarter ended September 30, 2021 increased $11.6 million, or 66.5%, to $29.2 million, as compared to $17.5 million in the same period last year. Adjusted EBITDA (Excluding Political) increased $14.9 million, or 108.9%, to $28.7 million, as compared to $13.7 million in the same period last year.

Net Income
Net income for the quarter ended September 30, 2021 increased $11.6 million to $12.9 million, as compared to $1.3 million in the same period last year.

Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Net Revenue
Net revenue for the nine months ended September 30, 2021, increased $44.5 million or 16.9%, to $307.4 million, as compared to $262.8 million in the same period last year. Townsquare Interactive net subscription revenue increased $8.8 million, or 17.0%, to $60.3 million, Advertising net revenue increased $34.3 million, or 16.4%, to $243.1 million, and Live Events net revenue increased $1.5 million, or 59.9%, to $3.9 million, each as compared to the same period last year. Excluding political revenue, net revenue increased $49.4 million, or 19.3%, to $305.6 million, and Advertising net revenue increased $39.2 million, or 19.4%, to $241.3 million.

Adjusted EBITDA
Adjusted EBITDA for the nine months ended September 30, 2021, increased $44.5 million, or 126.8%, to $79.5 million, as compared to $35.1 million in the same period last year. Adjusted EBITDA (Excluding Political) increased $48.6 million, or 165.3%, to $78.0 million, as compared to $29.4 million in the same period last year.

Net Income (Loss)
Net income for the nine months ended September 30, 2021, increased $101.9 million to $16.9 million, as compared to a net loss of $85.1 million in the same period last year. Net loss in 2020 was primarily driven by approximately $109.1 million of non-cash impairment charges, primarily related to our FCC licenses.

Liquidity and Capital Resources
As of September 30, 2021, we had a total of $31.3 million of cash and cash equivalents and $550.0 million of outstanding indebtedness, representing 5.2x and 4.9x gross and net leverage, respectively, based on Adjusted EBITDA for the twelve months ended September 30, 2021 of $106.6 million.

The table below presents a summary, as of October 29, 2021, of our outstanding common stock, and securities convertible into common stock, excluding options issued under our 2014 Omnibus Incentive Plan.

Security		Number Outstanding			Description
Class A common stock		12,463,545			One vote per share.
Class B common stock		815,296			10 votes per share.1
Class C common stock		3,461,341			No votes.1
Warrants		10,622			Each warrant is exercisable for one share of Class A common stock, at an exercise price of $0.0001 per share. The aggregate exercise price for all warrants currently outstanding is $1.2
Total		16,750,804
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.
2 The warrants are fully vested and exercisable for shares of Class A common stock, subject to certain conditions, including compliance with FCC rules.

Conference Call
Townsquare Media, Inc. will host a conference call to discuss certain third quarter 2021 financial results on Tuesday, November 2, 2021 at 8:00 a.m. Eastern Time. The conference call dial-in number is 1-877-407-0784 (U.S. & Canada) or 1-201-689-8560 (International) and the confirmation code is 13723560. A live webcast of the conference call will also be available on the investor relations page of the Company's website at www.townsquaremedia.com. 

A replay of the conference call will be available through November 9, 2021. To access the replay, please dial 1-844-512-2921 (U.S. and Canada) or 1-412-317-6671 (International) and enter confirmation code 13723560. A web-based archive of the conference call will also be available at the above website.

About Townsquare Media, Inc. 
Townsquare is a community-focused digital media, digital marketing solutions and radio company focused outside the Top 50 markets in the U.S. Our assets include Townsquare Interactive, a digital marketing services subscription business providing websites, search engine optimization, social platforms and online reputation management for approximately 25,950 SMBs; Townsquare IGNITE, a proprietary digital programmatic advertising technology with an in-house demand and data management platform; and Townsquare Media, our portfolio of 322 local terrestrial radio stations in 67 cities with corresponding local news and entertainment websites and apps including legendary brands such as WYRK.com, WJON.com, and NJ101.5.com along with a network of national music brands including XXLmag.com, TasteofCountry.com, UltimateClassicRock.com and Loudwire.com. For more information, please visit www.townsquaremedia.com, www.townsquareinteractive.com, and www.townsquareignite.com.

Forward-Looking Statements
Except for the historical information contained in this press release, the matters addressed are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "aim," "anticipate," "estimate," "expect," "forecast," "outlook," "potential," "project," "projection," "plan," "intend," "seek," "believe," "may," "could," "would," "will," "should," "can," "can have," "likely," the negatives thereof and other words and terms. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statement. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof or as of the date specified herein. Risks and uncertainties that could have a material impact on our business and financial results include, but are not limited to, general economic conditions in the United States, or in the specific markets in which we currently do business, industry conditions, legislative or regulatory requirements, the continuation or worsening of the effects from the COVID-19 pandemic, its scope, duration and impact on our business, financial results, cash flows and liquidity, as well as the impact on our clients and customers, the success of our mitigation efforts in response to the COVID-19 pandemic, our performance in any recovery from the COVID-19 pandemic, the performance of financial and credit markets, our ability to comply with the covenants and obligations under our outstanding debt, including meeting required payments of principal and interest, our ability to access debt or equity capital on attractive terms or at all, potential downgrades to our credit ratings, and certain other events, including future disease outbreaks and pandemics. See "Risk Factors" and "Forward-Looking Statements" included in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 16, 2021, for a discussion of additional factors that could cause our actual results to differ from those expressed or implied by forward-looking statements. Townsquare Media, Inc. assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise.

Non-GAAP Financial Measures and Definitions
In this press release, we refer to Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA (Excluding Political), Adjusted Net Income and Adjusted Net Income Per Share which are financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP").

We define Adjusted Operating Income as operating income before the deduction of depreciation and amortization, stock-based compensation, corporate expenses, transaction costs, business realignment costs, impairment of goodwill, long-lived and intangible assets and net loss (gain) on sale and retirement of assets. We define Adjusted EBITDA as net income (loss) before the deduction of income taxes, interest expense, net, loss (gain) on extinguishment and modification of debt, transaction costs, depreciation and amortization, stock-based compensation, business realignment costs, impairment of long-lived and intangible assets, change in fair value of investment, net (loss) gain on sale and retirement of assets and other expense (income) net. We define Adjusted EBITDA (Excluding Political) as Adjusted EBITDA less political net revenue, net of a fifteen percent deduction to account for estimated national representative firm fees, music licensing fees and sales commissions expense. Adjusted Net Income is defined as net income (loss) before the deduction of transaction costs, business realignment costs, impairment of long-lived and intangible assets, change in fair value of investment, net loss (gain) on sale and retirement of assets, loss (gain) on extinguishment and modification of debt, gain on insurance recoveries and net income attributable to non-controlling interest, net of income taxes.  Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the weighted average shares outstanding. We define Net Leverage as our total outstanding indebtedness, net of our total cash balance as of September 30, 2021, divided by our Adjusted EBITDA for the twelve months ended September 30, 2021. These measures do not represent, and should not be considered as alternatives to or superior to, financial results and measures determined or calculated in accordance with GAAP. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. You should be aware that in the future we may incur expenses or charges that are the same as or similar to some of the adjustments in the presentation, and we do not infer that our future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP measures may not be comparable to similarly-named measures reported by other companies.

We use Adjusted Operating Income to evaluate the operating performance of our business segments. We use Adjusted EBITDA and Adjusted EBITDA (Excluding Political) to facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting interest expense), taxation and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance, and to facilitate year over year comparisons, by backing out the impact of political revenue which varies depending on the election cycle and may be unrelated to operating performance. We use Adjusted Net Income and Adjusted Net Income Per Share to assess total company operating performance on a consistent basis. We use Net Leverage to measure the Company's ability to handle its debt burden. We believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of transaction costs, net loss (gain) on sale and retirement of assets, business realignment costs, certain impairments, and net income (loss) from discontinued operations. Further, while discretionary bonuses for members of management are not determined with reference to specific targets, our board of directors may consider Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA (Excluding Political), Adjusted Net Income, Adjusted Net Income Per Share and Net Leverage when determining discretionary bonuses.

Investor Relations
Claire Yenicay
(203) 900-5555
investors@townsquaremedia.com

 

TOWNSQUARE MEDIA, INC. CONSOLIDATED BALANCE SHEETS (in Thousands, except share and per share data) (unaudited)
	September 30, 2021				December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	31,289			$	83,229
Accounts receivable, net of allowance of $7,296 and $7,051, respectively	57,918				58,634
Prepaid expenses and other current assets	10,601				12,428
Total current assets	99,808				154,291
Property and equipment, net	106,117				111,871
Intangible assets, net	280,211				281,160
Goodwill	157,947				157,947
Investments	20,871				11,501
Operating lease right-of-use-assets	44,646				48,290
Other assets	1,502				2,948
Restricted cash	494				494
Total assets	$	711,596			$	768,502
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	10,517			$	9,056
Deferred revenue	8,824				8,847
Accrued compensation and benefits	11,304				12,462
Accrued expenses and other current liabilities	20,392				21,524
Operating lease liabilities, current	7,405				7,517
Accrued interest	6,301				6,350
Total current liabilities	64,743				65,756
Long-term debt, net of deferred finance costs of $9,081 and $2,369, respectively	540,919				543,428
Deferred tax liability	16,396				10,326
Operating lease liability, net of current portion	40,369				44,661
Other long-term liabilities	3,357				3,576
Total liabilities	665,784				667,747
Stockholders' equity:
Class A common stock, par value $0.01 per share; 300,000,000 shares authorized; 12,440,045 and 14,436,065 shares issued and outstanding, respectively	124				144
Class B common stock, par value $0.01 per share; 50,000,000 shares authorized; 815,296 and 2,966,669 shares issued and outstanding, respectively	8				30
Class C common stock, par value $0.01 per share; 50,000,000 shares authorized; 3,461,341 and 1,636,341 shares issued and outstanding, respectively	35				17
Total common stock	167				191
Additional paid-in capital	300,879				369,672
Accumulated deficit	(258,083)				(272,602)
Non-controlling interest	2,849				3,494
Total stockholders' equity	45,812				100,755
Total liabilities and stockholders' equity	$	711,596			$	768,502

 

TOWNSQUARE MEDIA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in Thousands, Except Per Share Data) (unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
Net revenue	$	111,280			$	95,356			$	307,379			$	262,844
Operating costs and expenses:
Direct operating expenses, excluding depreciation, amortization, and stock-based compensation	75,719				71,088				211,837				207,046
Depreciation and amortization	4,821				5,248				14,546				15,293
Corporate expenses	6,410				6,764				15,996				20,724
Stock-based compensation	877				430				2,833				1,611
Transaction costs	2				384				5,107				2,624
Business realignment costs	484				472				740				2,639
Impairment of long-lived and intangible assets	—				1,343				95				109,058
Net (gain) loss on sale and retirement of assets	(14)				92				613				80
Total operating costs and expenses	88,299				85,821				251,767				359,075
Operating income (loss)	22,981				9,535				55,612				(96,231)
Other expense (income):
Interest expense, net	9,816				7,692				29,780				23,713
Loss (gain) on extinguishment and modification of debt	—				—				5,997				(1,159)
Other (income) expense, net	(3,078)				81				(3,455)				(653)
Income (loss) from operations before tax	16,243				1,762				23,290				(118,132)
Income tax provision (benefit)	3,349				451				6,431				(33,044)
Net income (loss)	$	12,894			$	1,311			$	16,859			$	(85,088)
Net income (loss) attributable to:
Controlling interests	$	12,405			$	795			$	15,288			$	(86,537)
Non-controlling interests	$	489			$	516			$	1,571			$	1,449
Basic income (loss) per share:
Attributable to common shares	$	0.75			$	0.03			$	0.79			$	(4.68)
Attributable to participating shares	$	0.75			$	0.03			$	0.79			$	0.08
Diluted income (loss) per share:	$	0.64			$	0.03			$	0.71			$	(4.68)
Weighted average shares outstanding:
Basic attributable to common shares	16,386				18,683				16,917				18,627
Basic attributable to participating shares	88				8,978				2,333				8,978
Diluted	19,384				27,688				21,657				27,605
Cash dividend declared per share	$	—			$	—			$	—			$	0.075

 

TOWNSQUARE MEDIA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in Thousands) (unaudited)
	Nine Months Ended September 30,
	2021				2020
Cash flows from operating activities:
Net income (loss)	$	16,859			$	(85,088)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	14,546				15,293
Amortization of deferred financing costs	1,129				1,173
Non-cash lease income	(106)				(178)
Net deferred taxes and other	6,070				(33,403)
Provision for doubtful accounts	1,718				3,470
Stock-based compensation expense	2,833				1,611
Loss (gain) on extinguishment and modification of debt	5,997				(1,159)
Write-off of deferred financing costs	—				79
Trade activity, net	(9,994)				(6,550)
Impairment of long-lived and intangible assets	95				109,058
Net loss on sale and retirement of assets	613				80
Gain on insurance recoveries	(362)				(1,206)
Gain on lease settlement	(233)				—
Gain on sale of investments	(446)
Gain on sale of investment and investment related transaction	(2,924)				—
Other	289				6
Changes in assets and liabilities, net of acquisitions:
Accounts receivable	(1,148)				9,397
Prepaid expenses and other assets	3,259				(2,032)
Accounts payable	1,409				(3,103)
Accrued expenses	(569)				10,538
Accrued interest	(49)				6,204
Other long-term liabilities	(789)				(352)
Net cash provided by operating activities - continuing operations	38,197				23,838
Net cash used in operating activities - discontinued operations	(33)				(390)
Net cash provided by operating activities	38,164				23,448
Cash flows from investing activities:
Purchase of property and equipment	(7,840)				(11,254)
Purchase of investments	(278)				(400)
Proceeds from insurance recoveries	362				1,313
Proceeds from sale of investments and investment related transactions	716				—
Proceeds from sale of assets	955				212
Net cash used in investing activities	(6,085)				(10,129)
Cash flows from financing activities:
Repayment of term loans	(272,381)				(9,951)
Repurchase of 2023 Notes	(273,416)				(3,573)
Proceeds from the issuance of 2026 Notes	550,000				—
Prepayment fee on 2023 Notes	(4,443)				—
Deferred financing cost	(9,027)				—
Repurchase of Oaktree securities	(80,394)				—
Transaction costs related to Oaktree securities repurchase	(1,556)				—
Borrowings under the revolving credit facility	—				50,000
Repayment of borrowings under the revolving credit facility	—				(50,000)
Dividend payments	(60)				(4,201)
Proceeds from stock options exercised	10,931				49
Repurchase of stock	(1,400)				—
Cash distribution to non-controlling interests	(2,216)				(1,164)
Repayments of capitalized obligations	(57)				(34)
Net cash used in financing activities	(84,019)				(18,874)
Cash and cash equivalents and restricted cash:
Net decrease in cash, cash equivalents and restricted cash	(51,940)				(5,555)
Beginning of period	83,723				85,161
End of period	$	31,783			$	79,606

 

TOWNSQUARE MEDIA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in Thousands) (unaudited)
	Nine Months Ended September 30,
	2021				2020
Supplemental Disclosure of Cash Flow Information:
Cash payments:
Interest	$	28,693			$	16,780
Income taxes	634				1,311
Supplemental Disclosure of Non-cash Activities:
Dividends declared, but not paid during the period	$	—			$	22
Investments acquired in exchange for advertising(1)	6,438				2,300
Property and equipment acquired in exchange for advertising(1)	1,945				3,648
Accrued capital expenditures	120				826
Accrued transaction cost	150				—
Deferred payment for software licenses	—				853
Supplemental Disclosure of Cash Flow Information relating to Leases:
Cash paid for amounts included in the measurement of operating lease liabilities, included in operating cash flows	$	7,695			$	8,236
Right-of-use assets obtained in exchange for operating lease obligations	$	2,246			$	9,416
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	$	31,289			$	79,112
Restricted cash	494				494
	$	31,783			$	79,606

(1)  Represents total advertising services to be provided by the Company in exchange for equity interests and property and equipment acquired during each of the nine months ended September 30, 2021 and 2020, respectively. As the advertising services are performed, revenue related to the services provided is reflected as a component of Trade activity, net within net cash provided by operating activities. As of September 30, 2021 and September 30, 2020, $0.1 million and $1.2 million, respectively, in advertising services remained to be provided in future periods in exchange for equity interests that were acquired during each of the nine months ended September 30, 2021 and 2020. Refer to Note 6, Investments, in the accompanying Notes to Consolidated Financial Statements for additional information related to our investments.

 

TOWNSQUARE MEDIA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT (in Thousands) (unaudited)
	Three Months Ended  September 30,											Nine Months Ended  September 30,
	2021				2020				% Change			2021				2020				% Change
Advertising net revenue	$	87,402			$	77,109			13.3	%		$	243,083			$	208,780			16.4	%
Townsquare Interactive net revenue	21,130				18,181				16.2	%		60,347				51,595				17.0	%
Live Events net revenue	2,748				66				**			3,949				2,469				59.9	%
Net revenue	111,280				95,356				16.7	%		307,379				262,844				16.9	%
Advertising direct operating expenses	58,381				58,235				0.3	%		166,551				168,527				(1.2)	%
Townsquare Interactive direct operating expenses	14,954				12,694				17.8	%		42,144				36,414				15.7	%
Live Events direct operating expenses	2,384				159				**			3,142				2,105				49.3	%
Direct operating expenses	75,719				71,088				6.5	%		211,837				207,046				2.3	%
Depreciation and amortization	4,821				5,248				(8.1)	%		14,546				15,293				(4.9)	%
Corporate expenses	6,410				6,764				(5.2)	%		15,996				20,724				(22.8)	%
Stock-based compensation	877				430				104.0	%		2,833				1,611				75.9	%
Transaction costs	2				384				(99.5)	%		5,107				2,624				94.6	%
Business realignment costs	484				472				2.5	%		740				2,639				(72.0)	%
Impairment of long-lived and intangible assets	—				1,343				(100.0)	%		95				109,058				**
Net (gain) loss on sale and retirement of assets	(14)				92				**			613				80				**
Total operating costs and expenses	88,299				85,821				2.9	%		251,767				359,075				(29.9)	%
Operating income (loss)	22,981				9,535				141.0	%		55,612				(96,231)				**
Other expense (income):
Interest expense, net	9,816				7,692				27.6	%		29,780				23,713				25.6	%
Loss (gain) on extinguishment and modification of debt	—				—				**			5,997				(1,159)				**
Other (income) expense, net	(3,078)				81				**			(3,455)				(653)				429.1	%
Income (loss) from operations before tax	16,243				1,762				**			23,290				(118,132)				**
Income tax provision (benefit)	3,349				451				**			6,431				(33,044)				**
Net income (loss)	$	12,894			$	1,311			**			$	16,859			$	(85,088)			**
** not meaningful

The following table presents Net revenue and Adjusted Operating Income by segment, for the three and nine months ended September 30, 2021, and 2020, respectively (in thousands):

	Three Months Ended  September 30,											Nine Months Ended  September 30,
	(Unaudited)
	2021				2020				%Change			2021				2020				%Change
Advertising net revenue	$	87,402			$	77,109			13.3	%		$	243,083			$	208,780			16.4	%
Townsquare Interactive net revenue	21,130				18,181				16.2	%		60,347				51,595				17.0	%
Live Events net revenue	2,748				66				**			3,949				2,469				59.9	%
Net revenue	$	111,280			$	95,356			16.7	%		$	307,379			$	262,844			16.9	%
Advertising Adjusted Operating Income	29,021				18,874				53.8	%		76,532				40,253				90.1	%
Townsquare Interactive Adjusted Operating Income	6,176				5,487				12.6	%		18,203				15,181				19.9	%
Live Events Adjusted Operating Income (Loss)	364				(93)				**			807				364				121.7	%
Adjusted Operating Income	$	35,561			$	24,268			46.5	%		$	95,542			$	55,798			71.2	%
** not meaningful

The following table reconciles Net revenue to Net revenue, excluding political revenue on a GAAP basis by segment for the three and nine months ended September 30, 2021, and 2020, respectively (in thousands):

	Three Months Ended  September 30,											Nine Months Ended  September 30,
	(Unaudited)
	2021				2020				%Change			2021				2020				%Change
Advertising net revenue	$	87,402			$	77,109			13.3	%		$	243,083			$	208,780			16.4	%
Townsquare Interactive net revenue	21,130				18,181				16.2	%		60,347				51,595				17.0	%
Live Events net revenue	2,748				66				**			3,949				2,469				59.9	%
Net revenue	$	111,280			$	95,356			16.7	%		$	307,379			$	262,844			16.9	%
Advertising political revenue	575				4,450				(87.1)	%		1,778				6,664				(73.3)	%
Townsquare Interactive political revenue	—				—				—			—				—				—
Live Events political revenue	—				—				—			—				—				—
Political revenue	$	575			$	4,450			(87.1)	%		$	1,778			$	6,664			(73.3)	%
Advertising net revenue (ex. political)	86,827				72,659				19.5	%		$	241,305			$	202,116			19.4	%
Townsquare Interactive net revenue (ex. political)	21,130				18,181				16.2	%		60,347				51,595				17.0	%
Live Events net revenue (ex. political)	2,748				66				**			3,949				2,469				59.9	%
Net revenue (ex. political)	$	110,705			$	90,906			21.8	%		$	305,601			$	256,180			19.3	%
** not meaningful

The following table reconciles on a GAAP basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Income (Loss) for the three and nine months ended September 30, 2021, and 2020, respectively (in thousands, except per share data):

	Three Months Ended  September 30,								Nine Months Ended  September 30,
	(Unaudited)
	2021				2020				2021				2020
Net income (loss)	$	12,894			$	1,311			$	16,859			$	(85,088)
Income tax provision (benefit)	3,349				451				6,431				(33,044)
Income (loss) from operations before income taxes	16,243				1,762				23,290				(118,132)
Transaction costs	2				384				5,107				2,624
Business realignment costs	484				472				740				2,639
Impairment of long-lived and intangible assets	—				1,343				95				109,058
Net (gain) loss on sale and retirement of assets	(14)				92				613				80
Loss (gain) on extinguishment and modification of debt	—				—				5,997				(1,159)
Change in fair value of investment	(2,924)				—				(2,924)				—
Gain on insurance recoveries	(137)				(141)				(362)				(1,206)
Net income attributable to non-controlling interest, net of income taxes	(489)				(516)				(1,571)				(1,449)
Adjusted net income (loss) before income taxes	13,165				3,396				30,985				(7,545)
Income tax provision (benefit)	2,714				869				8,556				(2,110)
Adjusted Net Income (Loss)	$	10,451			$	2,527			$	22,429			$	(5,435)
Adjusted Net Income (Loss) Per Share:
Basic	$	0.64			$	0.14			$	1.33			$	(0.29)
Diluted	$	0.54			$	0.09			$	1.04			$	(0.29)
Weighted average shares outstanding:
Basic	16,386				18,683				16,917				18,627
Diluted	19,384				27,668				21,657				27,605

The following table reconciles on a GAAP basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA, Adjusted EBITDA (Excluding Political), and Adjusted EBITDA Less Interest, Capex and Taxes for the three and nine months ended September 30, 2021, and 2020, respectively (dollars in thousands):

	Three Months Ended  September 30,								Nine Months Ended  September 30,
	(Unaudited)
	2021				2020				2021				2020
Net income (loss)	$	12,894			$	1,311			$	16,859			$	(85,088)
Income tax provision (benefit)	3,349				451				6,431				(33,044)
Interest expense, net	9,816				7,692				29,780				23,713
Loss (gain) on extinguishment and modification of debt	—				—				5,997				(1,159)
Depreciation and amortization	4,821				5,248				14,546				15,293
Stock-based compensation	877				430				2,833				1,611
Transaction costs	2				384				5,107				2,624
Business realignment costs	484				472				740				2,639
Impairment of long-lived and intangible assets	—				1,343				95				109,058
Change in fair value of investment	(2,924)				—				(2,924)				—
Other (a)	(168)				173				82				(573)
Adjusted EBITDA	$	29,151			$	17,504			$	79,546			$	35,074
Political Adjusted EBITDA	(489)				(3,783)				(1,511)				(5,664)
Adjusted EBITDA (Excluding Political)	$	28,662			$	13,721			$	78,035			$	29,410
Political Adjusted EBITDA	489				3,783				1,511				5,664
Net cash paid for interest	(21,542)				(1,034)				(28,693)				(16,780)
Capital expenditures	(3,001)				(2,911)				(7,840)				(11,254)
Cash paid for taxes	(150)				(867)				(634)				(1,311)
Adjusted EBITDA Less Interest, Capex and Taxes	$	4,458			$	12,692			$	42,379			$	5,729
(a) Other includes net loss (gain) on sale and retirement of assets and other income, net.

The following table reconciles net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA on a quarterly basis for the twelve months ended September 30, 2021 (dollars in thousands):

	Three Months Ended																Twelve Months Ended
	(Unaudited)
	December 31, 2020				March 31, 2 021				June 30, 2021				September 30, 2021				September 30, 2021
Net income (loss)	$	4,537			$	(6,109)			$	10,074			$	12,894			$	21,396
Income tax provision (benefit)	9,186				(895)				3,977				3,349				15,617
Interest expense, net	7,707				10,155				9,809				9,816				37,487
Loss on extinguishment and modification of debt	—				5,997				—				—				5,997
Depreciation and amortization	4,814				4,729				4,996				4,821				19,360
Stock-based compensation	473				1,062				894				877				3,306
Transaction costs	29				4,715				390				2				5,136
Business realignment costs	450				190				66				484				1,190
Impairment of long-lived and intangible assets	—				—				95				—				95
Change in fair value of investment	—				—				—				(2,924)				(2,924)
Other (a)	(164)				256				(6)				(168)				(82)
Adjusted EBITDA	$	27,032			$	20,100			$	30,295			$	29,151			$	106,578
(a) Other includes net loss (gain) on sale and retirement of assets and other income, net.

The following tables reconcile Operating income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Operating Income (Loss) by segment for the three months ended September 30, 2021 and 2020 (in thousands):

	Three Months Ended September 30, 2021
	(Unaudited)
	Advertising				Townsquare Interactive				Live Events				Corporate and Other Reconciling Items				Total
Operating income (loss)	$	25,640			$	5,905			$	314			$	(8,878)			$	22,981
Depreciation and amortization	3,306				143				41				1,331				4,821
Corporate expenses	—				—				—				6,410				6,410
Stock-based compensation	75				128				2				672				877
Transaction costs	—				—				—				2				2
Business realignment costs	—				—				7				477				484
Net gain on sale and retirement of assets	—				—				—				(14)				(14)
Adjusted Operating Income	$	29,021			$	6,176			$	364			$	—			$	35,561
	Three Months Ended September 30, 2020
	(Unaudited)
	Advertising				Townsquare Interactive				Live Events				Corporate and Other Reconciling Items				Total
Operating income (loss)	$	14,213			$	5,340			$	(1,082)			$	(8,936)			$	9,535
Depreciation and amortization	3,856				131				128				1,133				5,248
Corporate expenses	—				—				—				6,764				6,764
Stock-based compensation	37				16				2				375				430
Transaction costs	—				—				—				384				384
Business realignment costs	—				—				284				188				472
Impairment of long-lived and intangible assets	768				—				575				—				1,343
Net loss on sale and retirement of assets	—				—				—				92				92
Adjusted Operating Income (Loss)	$	18,874			$	5,487			$	(93)			$	—			$	24,268

The following tables reconcile Operating income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Operating Income by segment for the nine months ended September 30, 2021, and 2020 (in thousands):

	Nine Months Ended September 30, 2021
	(Unaudited)
	Advertising				Townsquare Interactive				Live Events				Corporate and Other Reconciling Items				Total
Operating income (loss)	$	66,065			$	16,952			$	644			$	(28,049)			$	55,612
Depreciation and amortization	10,170				840				127				3,409				14,546
Corporate expenses	—				—				—				15,996				15,996
Stock-based compensation	297				411				11				2,114				2,833
Transaction costs	—				—				—				5,107				5,107
Business realignment costs	—				—				25				715				740
Impairment of long-lived and intangible assets	—				—				—				95				95
Net loss on sale and retirement of assets	—				—				—				613				613
Adjusted Operating Income	$	76,532			$	18,203			$	807			$	—			$	95,542
	Nine Months Ended September 30, 2020
	(Unaudited)
	Advertising				Townsquare Interactive				Live Events				Corporate and Other Reconciling Items				Total
Operating (loss) income	$	(79,086)			$	14,720			$	(895)			$	(30,970)			$	(96,231)
Depreciation and amortization	10,740				398				393				3,762				15,293
Corporate expenses	—				—				—				20,724				20,724
Stock-based compensation	116				63				7				1,425				1,611
Transaction costs	—				—				—				2,624				2,624
Business realignment costs	—				—				284				2,355				2,639
Impairment of long-lived and intangible assets	108,483				—				575				—				109,058
Net loss on sale and retirement of assets	—				—				—				80				80
Adjusted Operating Income	$	40,253			$	15,181			$	364			$	—			$	55,798

 

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SOURCE Townsquare Media, Inc.

FAQ

What are Townsquare Media's Q3 2021 financial highlights?

Townsquare Media reported a 16.7% increase in net revenue to $111.3 million and a 66.5% rise in Adjusted EBITDA to $29.2 million for Q3 2021.

How did Townsquare Media's net income change in Q3 2021?

Net income for Q3 2021 increased to $12.9 million, significantly up from $1.3 million in Q3 2020.

What is Townsquare Media's digital revenue growth?

Digital net revenue increased by 20.2% year-over-year in Q3 2021, contributing approximately 47% of total net revenue.

What are the full-year revenue expectations for Townsquare Media in 2021?

Townsquare Media expects full-year 2021 net revenue to be at least $415 million.

How does Townsquare Media's Q3 2021 revenue compare to 2019?

Townsquare's Q3 2021 net revenue was 98.9% of Q3 2019 levels.