• Townsquare Announces Third Quarter Results

    المصدر: Nasdaq GlobeNewswire / 09 نوفمبر 2023 06:00:01   America/New_York

    September YTD Net Revenue Excluding Political Flat Year-Over-Year
    Digital Represents 52% of September YTD 2023 Total Net Revenue and
    57% of September YTD 2023 Total Adjusted Operating Income

    PURCHASE, N.Y., Nov. 09, 2023 (GLOBE NEWSWIRE) -- Townsquare Media, Inc. (NYSE: TSQ) (“Townsquare”, the "Company," "we," "us," or "our") announced today its financial results for the third quarter ended September 30, 2023.

    “I am pleased to share that Townsquare’s third quarter results met our previously issued guidance. In the third quarter, net revenue excluding political revenue declined -4% year-over-year (and decreased -5% year-over-year in total), and Adjusted EBITDA decreased -12% year-over-year. Our Digital Advertising segment delivered revenue and profit growth once again in the third quarter, as September year-to-date revenue and Adjusted Operating Income increased +10% and +19%, respectively, each as compared to the prior year. In total, Digital now represents 52% of Townsquare’s total September year-to-date net revenue and 57% of our total September year-to-date Adjusted Operating Income,” commented Bill Wilson, Chief Executive Officer of Townsquare Media, Inc. “Our performance this year, and particularly the growth of our Digital Advertising segment, has reinforced our confidence in our Digital First Local Media Strategy, our deliberate focus on markets outside of the Top 50, and the long-term, profitable growth potential of our digital platform.”

    Mr. Wilson continued, “The strong cash generation characteristics of our assets allowed us to produce $39 million of cash flow from operations in the first nine months of 2023, an increase of $7 million 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 $14 million of our Unsecured Senior Notes at a discount during the third quarter, bringing our year-to-date total bond repurchases to $27 million. In addition, we repurchased approximately 94,000 Class A shares in the third quarter (in total, we’ve repurchased 1.7 million shares in 2023), and continue to pay a high-yielding dividend while also investing in our business. We also ended the quarter with a strong cash balance of $38 million and net leverage of 4.49x, retaining financial flexibility moving forward.”

    The Company announced today that its Board of Directors approved a quarterly cash dividend of $0.1875 per share. The dividend will be payable on February 1, 2024 to shareholders of record as of the close of business on January 2, 2024.

    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.

    Third Quarter Highlights*

    • As compared to the third quarter of 2022:
      • Net revenue decreased 4.6%, and 3.8% excluding political
      • Net income decreased $39.3 million
      • Adjusted EBITDA decreased 12.1%
      • Total Digital net revenue decreased 1.5%
        • Subscription Digital Marketing Solutions (“Townsquare Interactive”) net revenue decreased 12.6%
        • Digital Advertising net revenue increased 5.5%
      • Total Digital Adjusted Operating Income increased 0.1%
        • Subscription Digital Marketing Solutions Adjusted Operating Income decreased 10.6%
        • Digital Advertising Adjusted Operating Income increased 6.3%
      • Broadcast Advertising net revenue decreased 8.6%, and 7.2% excluding political
    • Diluted loss per share was $2.27, and Adjusted Net Income per diluted share was $0.46
    • Repurchased $14.2 million of our 2026 Secured Senior Notes below par
    • Repurchased 0.1 million shares of the Company’s common stock

    Year-to-Date Highlights*

    • As compared to the nine months ended September 30, 2022:
      • Net revenue decreased 1.0%, and 0.3% excluding political
      • Net income decreased $51.6 million
      • Adjusted EBITDA decreased 11.8%
      • Total Digital net revenue increased 3.2%
        • Subscription Digital Marketing Solutions net revenue decreased 7.3%
        • Digital Advertising net revenue increased 10.1%
      • Total Digital Adjusted Operating Income increased 7.5%
        • Subscription Digital Marketing Solutions Adjusted Operating Income decreased 10.9%
        • Digital Advertising Adjusted Operating Income increased 19.3%
      • Broadcast Advertising net revenue decreased 6.5%, and 5.3% 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 fourth quarter of 2023, net revenue is expected to be between $110.6 million and $112.6 million, and Adjusted EBITDA is expected to be between $24.8 million and $25.8 million.

    For the full year 2023, net revenue guidance is expected to be between $450 million and $452 million, and Adjusted EBITDA guidance is expected to be between $100 million and $101 million.

    Quarter Ended September 30, 2023 Compared to the Quarter Ended September 30, 2022

    Net Revenue
    Net revenue for the three months ended September 30, 2023 decreased $5.5 million, or 4.6%, to $115.1 million as compared to $120.6 million in the same period in 2022. Broadcast Advertising net revenue decreased $5.1 million, or 8.6%, and Subscription Digital Marketing Solutions net revenue decreased $2.9 million, or 12.6%, as compared to the same period in 2022. These revenue declines were partially offset by Digital Advertising net revenue which increased $2.0 million, or 5.5%, and Other net revenue which increased $0.5 million, or 42.4%, as compared to the same period in 2022. Excluding political revenue of $0.6 million and $1.6 million for the three months ended September 30, 2023 and 2022, respectively, net revenue decreased $4.6 million, or 3.8%, to $114.5 million, Digital Advertising net revenue increased $2.1 million, or 5.6%, to $38.9 million, and Broadcast Advertising net revenue decreased $4.2 million, or 7.2%, to $53.6 million.

    Net (Loss) Income
    For the quarter ended September 30, 2023, we reported a net loss of $36.5 million, as compared to net income of $2.8 million in the same period last year, primarily due to a $20.7 million increase in non-cash impairment charges, a $15.2 million increase in the provision for income taxes and a $5.5 million decrease in net revenue, partially offset by a $2.7 million decrease in direct operating expenses, due in part to lower compensation. Adjusted Net Income was approximately flat as compared to the prior year.

    Adjusted EBITDA
    Adjusted EBITDA for the three months ended September 30, 2023 decreased $3.7 million, or 12.1%, to $27.2 million, as compared to $30.9 million in the same period last year. Adjusted EBITDA (Excluding Political) decreased $2.9 million, or 9.9%, to $26.6 million, as compared to $29.6 million in the same period last year.

    Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022

    Net Revenue
    Net revenue for the nine months ended September 30, 2023, decreased $3.4 million, or 1.0%, to $339.4 million as compared to $342.8 million in the same period in 2022. Broadcast Advertising net revenue decreased $10.7 million, or 6.5%, and Subscription Digital Marketing Solutions net revenue decreased $4.9 million, or 7.3%. These declines were partially offset by Digital Advertising net revenue which increased $10.5 million, or 10.1%, and Other net revenue which increased $1.8 million, or 26.4%, as compared to the same period in 2022. Excluding political revenue of $1.2 million and $3.5 million for the nine months ended September 30, 2023 and 2022, respectively, net revenue decreased $1.1 million, or 0.3% to $338.2 million, Digital Advertising net revenue increased $10.6 million, or 10.3%, to $113.7 million, and Broadcast Advertising net revenue decreased $8.6 million, or 5.3%, to $152.7 million.

    Net (Loss) Income
    Net income for the nine months ended September 30, 2023 decreased $51.6 million, or 493.4%, to a net loss of $41.1 million, as compared to net income of $10.5 million in the same period last year, primarily driven by a $45.5 million increase in non-cash impairment charges, a $4.4 million increase in the provision for income taxes, a $3.7 million increase in direct operating expenses and a decrease in net revenue of $3.4 million. Adjusted Net Income decreased $6.7 million, primarily driven by higher direct operating expenses and the decrease in net revenue, partially offset by a lower provision for income taxes.

    Adjusted EBITDA
    Adjusted EBITDA for the nine months ended September 30, 2023 decreased $10.1 million, or 11.8% to $75.2 million, as compared to $85.3 million in the same period last year. Adjusted EBITDA (Excluding Political) decreased $8.1 million, or 9.9%, to $74.2 million, as compared to $82.3 million in the same period last year.

    Liquidity and Capital Resources
    As of September 30, 2023, we had a total of $38.0 million of cash and cash equivalents and $503.6 million of outstanding indebtedness, representing 4.86x and 4.49x gross and net leverage, respectively, based on Adjusted EBITDA for the twelve months ended September 30, 2023, of $103.6 million.

    The table below presents a summary, as of November 3, 2023, of our outstanding common stock.

    Security Number Outstanding Description
    Class A common stock 13,680,703 One vote per share.
    Class B common stock 815,296 10 votes per share.1
    Class C common stock 1,961,341 No votes.1
    Total 16,457,340  
    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.


    Conference Call

    Townsquare Media, Inc. will host a conference call to discuss certain third quarter 2023 financial results and 2023 guidance on Thursday, November 9, 2023 at 8:00 a.m. Eastern Time. The conference call dial-in number is 1-888-999-5318 (U.S. & Canada) or 1-848-280-6460 (International) and the confirmation code is 11153822. 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 16, 2023. To access the replay, please dial 1-844-512-2921 (U.S. and Canada) or 1-412-317-6671 (International) and enter confirmation code 11153822. 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 and digital marketing solutions company with market leading local radio stations, principally focused outside the top 50 markets in the U.S. Our assets include a subscription digital marketing services business, Townsquare Interactive, providing website design, creation and hosting, search engine optimization, social media and online reputation management as well as other digital monthly services for approximately 25,750 SMBs; a robust digital advertising division, Townsquare Ignite, a powerful combination of a) an owned and operated portfolio of more than 400 local news and entertainment websites and mobile apps along with a network of leading national music and entertainment brands, collecting valuable first party data and b) a proprietary digital programmatic advertising technology stack with an in-house demand and data management platform; and a portfolio of 354 local terrestrial radio stations in 74 U.S. markets strategically situated outside the Top 50 markets in the United States. Our portfolio includes local media brands such as WYRK.com, WJON.com and NJ101.5.com, and premier national music brands such as 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. Actual events or results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors that could cause actual results to differ materially from those estimated by us include the impact of general economic conditions in the United States, or in the specific markets in which we currently do business including supply chain disruptions, inflation, labor shortages and the effect on advertising activity, industry conditions, including existing competition and future competitive technologies, the popularity of radio as a broadcasting and advertising medium, cancellations, disruptions or postponements of advertising schedules in response to national or world events, our ability to develop and maintain digital technologies and hire and retain technical and sales talent, our dependence on key personnel, our capital expenditure requirements, our continued ability to identify suitable acquisition targets, and consummate and integrate any future acquisitions, legislative or regulatory requirements, risks and uncertainties relating to our leverage and changes in interest rates, our ability to obtain financing at times, in amounts and at rates considered appropriate by us, our ability to access the capital markets as and when needed and on terms that we consider favorable to us and other factors discussed in this section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and under “Risk Factors” in our 2022 Annual Report on Form 10-K, for the year ended December 31, 2022, filed with the SEC on March 16, 2023, as well as other risks discussed from time to time in our filings with the SEC. Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. The cautionary statements referred to in this section also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. The forward-looking statements included in this report are made only as of the date hereof or as of the date specified herein. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

    Non-GAAP Financial Measures and Definitions
    In this press release, we refer to Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA (Excluding Political), Adjusted Net (Loss) 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, impairments and net (gain) loss on sale and retirement of assets. We define Adjusted EBITDA as net income before the deduction of income taxes, interest expense, net, gain on repurchases of debt, transaction and business realignment costs, depreciation and amortization, stock-based compensation, impairments, 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 before the deduction of transaction and business realignment costs, impairments, change in fair value of investment, net (gain) loss on sale and retirement of assets, gain on repurchases of debt, gain on sale of digital assets, 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, 2023, divided by our Adjusted EBITDA for the twelve months ended September 30, 2023. 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 (gain) loss on sale and retirement of assets, business realignment costs and certain impairments. 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,
    2023
     December 31,
    2022
    ASSETS   
    Current assets:   
    Cash and cash equivalents$37,955  $43,417 
    Accounts receivable, net of allowance for credit losses of $4,544 and $5,946, respectively 63,527   61,234 
    Prepaid expenses and other current assets 11,860   16,037 
    Total current assets  113,342   120,688 
    Property and equipment, net 111,301   113,846 
    Intangible assets, net 220,755   276,838 
    Goodwill 158,670   161,385 
    Investments 4,209   19,106 
    Operating lease right-of-use assets 47,719   50,962 
    Other assets 828   1,197 
    Restricted cash 501   496 
    Total assets $657,325  $744,518 
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    Current liabilities:   
    Accounts payable$4,844  $4,127 
    Deferred revenue 8,845   10,669 
    Accrued compensation and benefits 11,227   14,831 
    Accrued expenses and other current liabilities 24,326   17,876 
    Operating lease liabilities, current 9,039   9,008 
    Accrued interest 5,760   15,203 
    Total current liabilities 64,041   71,714 
    Long-term debt, net of deferred finance costs of $4,480 and $6,324, respectively 499,138   524,442 
    Deferred tax liability 27,565   18,748 
    Operating lease liability, net of current portion 42,281   45,107 
    Other long-term liabilities 11,866   15,428 
    Total liabilities  644,891   675,439 
    Stockholders’ equity:   
    Class A common stock, par value $0.01 per share; 300,000,000 shares authorized; 13,864,471 and 12,964,312 shares issued and outstanding, respectively 139   130 
    Class B common stock, par value $0.01 per share; 50,000,000 shares authorized; 815,296 and 815,296 shares issued and outstanding, respectively 8   8 
    Class C common stock, par value $0.01 per share; 50,000,000 shares authorized; 1,961,341 and 3,461,341 shares issued and outstanding, respectively 20   35 
    Total common stock 167   173 
    Treasury stock, at cost; 183,768 and 0 shares of Class A common stock, respectively (2,194)   
    Additional paid-in capital 307,498   309,645 
    Accumulated deficit (296,573)  (244,298)
    Non-controlling interest 3,536   3,559 
    Total stockholders’ equity 12,434   69,079 
    Total liabilities and stockholders’ equity $657,325  $744,518 



    TOWNSQUARE MEDIA, INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (in Thousands, Except Per Share Data)
    (unaudited)
     
     Three Months Ended 
    September 30,
     Nine Months Ended 
    September 30,
      2023   2022   2023   2022 
    Net revenue$115,104  $120,635  $339,445  $342,801 
    Operating costs and expenses:       
    Direct operating expenses, excluding depreciation, amortization, and stock-based compensation 81,323   83,985   245,301   241,581 
    Depreciation and amortization 4,717   4,467   14,496   13,546 
    Corporate expenses 6,604   5,744   18,911   15,892 
    Stock-based compensation 2,350   722   6,228   2,430 
    Transaction and business realignment costs 161   1,004   764   2,280 
    Impairment of intangible assets, investments, goodwill and long-lived assets 30,970   10,300   65,697   20,197 
    Net gain on sale and retirement of assets (362)  (119)  (703)  (338)
    Total operating costs and expenses 125,763   106,103   350,694   295,588 
    Operating (loss) income (10,659)  14,532   (11,249)  47,213 
    Other expense (income):       
    Interest expense, net 9,343   9,967   28,215   30,038 
    Gain on repurchases of debt (430)     (1,249)  (108)
    Other (income) expense, net (547)  (508)  (6,451)  1,886 
    (Loss) income from operations before tax (19,025)  5,073   (31,764)  15,397 
    Income tax provision 17,478   2,275   9,380   4,939 
    Net (loss) income$(36,503) $2,798  $(41,144) $10,458 
            
    Net (loss) income attributable to:       
    Controlling interests$(36,999) $2,260  $(42,620) $8,878 
    Non-controlling interests$496  $538  $1,476  $1,580 
            
    Basic (loss) income per share$(2.27) $0.13  $(2.52) $0.52 
            
    Diluted (loss) income per share$(2.27) $0.13  $(2.52) $0.48 
            
    Weighted average shares outstanding:       
    Basic 16,277   17,037   16,897   16,941 
    Diluted 16,277   17,482   16,897   18,645 
            
    Cash dividend declared per share$0.1875  $  $0.563  $ 



    TOWNSQUARE MEDIA, INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in Thousands)
    (unaudited)
     
     Nine Months Ended September 30,
      2023   2022 
    Cash flows from operating activities:   
    Net (loss) income$(41,144) $10,458 
    Adjustments to reconcile net (loss) income to net cash provided by operating activities:   
    Depreciation and amortization 14,496   13,546 
    Amortization of deferred financing costs 1,567   1,359 
    Non-cash lease expense (income) 69   (298)
    Net deferred taxes and other 8,817   4,413 
    Provision for doubtful accounts 2,817   1,429 
    Stock-based compensation expense 6,228   2,430 
    Gain on repurchases of debt (1,249)  (108)
    Trade activity, net (1,352)  (3,496)
    Impairment of intangible assets, investments, goodwill and long-lived assets 65,697   20,197 
    Realized gain on sale of digital assets (839)   
    Gain on sale of investment (5,210)   
    Unrealized loss on investment 493   1,934 
    Content rights acquired    (19,320)
    Amortization of content rights 3,645   3,124 
    Change in content rights liabilities (1,819)  17,397 
    Reimbursement of equipment modification costs (1,487)   
    Other (1,276)  (815)
    Changes in assets and liabilities, net of acquisitions:   
    Accounts receivable (3,037)  (4,900)
    Prepaid expenses and other assets 5,130   (1,253)
    Accounts payable 646   (123)
    Accrued expenses (3,845)  (3,916)
    Accrued interest (9,443)  (9,674)
    Other long-term liabilities 60   (278)
    Net cash provided by operating activities 38,964   32,106 
    Cash flows from investing activities:   
    Payment for acquisition    (18,419)
    Purchase of property and equipment (11,373)  (13,100)
    Purchase of investments    (100)
    Purchase of digital assets    (4,997)
    Proceeds from sale of digital assets 2,975    
    Proceeds from insurance recoveries 721   452 
    Proceeds from sale of assets and investment related transactions 7,277   810 
    Net cash used in investing activities (400)  (35,354)
    Cash flows from financing activities:   
    Repurchases of 2026 Notes (25,621)  (18,850)
    Dividend payments (6,285)   
    Proceeds from stock options exercised 5,440   790 
    Withholdings for shares issued under the ESPP 729    
    Repurchases of stock (16,645)  (225)
    Cash distribution to non-controlling interests (1,499)  (1,820)
    Repayments of capitalized obligations (140)  (105)
    Net cash used in financing activities (44,021)  (20,210)
    Cash and cash equivalents and restricted cash:   
    Net decrease in cash, cash equivalents and restricted cash (5,457)  (23,458)
    Beginning of period 43,913   50,999 
    End of period$38,456  $27,541 



    TOWNSQUARE MEDIA, INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
    (in Thousands)
    (unaudited)
     
     Nine Months Ended 
    September 30,
     2023
     2022
    Supplemental Disclosure of Cash Flow Information:   
    Cash payments:   
    Interest$37,273  $38,284 
    Income taxes 1,122   1,049 
        
    Supplemental Disclosure of Non-cash Activities:   
    Dividends declared, but not paid during the period$3,164  $ 
    Investments acquired in exchange for advertising(1)    2,750 
    Property and equipment acquired in exchange for advertising(1) 550   726 
    Accrued capital expenditures 229   45 
        
    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$8,850  $7,982 
    Right-of-use assets obtained in exchange for operating lease obligations 4,035   8,923 
        
    Reconciliation of cash, cash equivalents and restricted cash   
    Cash and cash equivalents$37,955  $27,046 
    Restricted cash 501   495 
     $38,456  $27,541 
    (1) Represents total advertising services provided by the Company in exchange for property and equipment and equity interests acquired during each of the nine months ended September 30, 2023 and 2022, respectively.



    TOWNSQUARE MEDIA, INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS BY SEGMENT
    (in Thousands)
    (unaudited)
     
     Three Months Ended 
    September 30,
       Nine Months Ended 
    September 30,
      
      2023   2022  % Change  2023   2022  % Change
    Subscription Digital Marketing Solutions$20,257  $23,188  (12.6)% $63,086  $68,021  (7.3)%
    Digital Advertising 39,009   36,989  5.5 %  113,842   103,379  10.1 %
    Broadcast Advertising 54,179   59,293  (8.6)%  153,822   164,520  (6.5)%
    Other 1,659   1,165  42.4 %  8,695   6,881  26.4 %
    Net revenue 115,104   120,635  (4.6)%  339,445   342,801  (1.0)%
    Subscription Digital Marketing Solutions Expenses 14,498   16,744  (13.4)%  45,703   48,513  (5.8)%
    Digital Advertising expenses 27,271   25,949  5.1 %  77,666   73,058  6.3 %
    Broadcast Advertising expenses 37,510   39,889  (6.0)%  113,858   113,875   %
    Other expenses 2,044   1,403  45.7 %  8,074   6,135  31.6 %
    Direct operating expenses 81,323   83,985  (3.2)%  245,301   241,581  1.5 %
    Depreciation and amortization 4,717   4,467  5.6 %  14,496   13,546  7.0 %
    Corporate expenses 6,604   5,744  15.0 %  18,911   15,892  19.0 %
    Stock-based compensation 2,350   722  225.5 %  6,228   2,430  156.3 %
    Transaction and business realignment costs 161   1,004  (84.0)%  764   2,280  (66.5)%
    Impairment of intangible assets, investments, goodwill and long-lived assets 30,970   10,300  200.7 %  65,697   20,197  225.3 %
    Net gain on sale and retirement of assets (362)  (119) 204.2 %  (703)  (338) 108.0 %
    Total operating costs and expenses 125,763   106,103  18.5 %  350,694   295,588  18.6 %
    Operating (loss) income (10,659)  14,532  (173.3)%  (11,249)  47,213  (123.8)%
    Other expense (income):             
    Interest expense, net 9,343   9,967  (6.3)%  28,215   30,038  (6.1)%
    Gain on repurchases of debt (430)      **  (1,249)  (108)   **
    Other (income) expense, net (547)  (508) 7.7 %  (6,451)  1,886    **
    (Loss) income from operations before tax (19,025)  5,073  (475.0)%  (31,764)  15,397  (306.3)%
    Income tax provision 17,478   2,275  668.3 %  9,380   4,939  89.9 %
    Net (loss) income$(36,503) $2,798    ** $(41,144) $10,458  (493.4)%
    ** not meaningful



    The following table presents Net revenue and Adjusted Operating Income by segment, for the three and nine months ended September 30, 2023, and 2022, respectively (in thousands):

     Three Months Ended 
    September 30,
       Nine Months Ended 
    September 30,
      
     (Unaudited)   (Unaudited)  
      2023   2022  % Change  2023   2022  % Change
    Subscription Digital Marketing Solutions$20,257  $23,188  (12.6)% $63,086  $68,021  (7.3)%
    Digital Advertising 39,009   36,989  5.5 %  113,842   103,379  10.1 %
    Digital 59,266   60,177  (1.5)%  176,928   171,400  3.2 %
    Broadcast Advertising 54,179   59,293  (8.6)%  153,822   164,520  (6.5)%
    Other 1,659   1,165  42.4 %  8,695   6,881  26.4 %
    Net revenue$115,104  $120,635  (4.6)% $339,445  $342,801  (1.0)%
    Subscription Digital Marketing Solutions$5,759  $6,444  (10.6)% $17,383  $19,508  (10.9)%
    Digital Advertising 11,738   11,040  6.3 %  36,176   30,321  19.3 %
    Digital 17,497   17,484  0.1 %  53,559   49,829  7.5 %
    Broadcast Advertising 16,669   19,404  (14.1)%  39,964   50,645  (21.1)%
    Other (385)  (238) 61.8 %  621   746  (16.8)%
    Adjusted Operating Income$33,781  $36,650  (7.8)% $94,144  $101,220  (7.0)%



    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, 2023, and 2022, respectively (in thousands):

     Three Months Ended 
    September 30,
       Nine Months Ended 
    September 30,
      
     (Unaudited)   (Unaudited)  
      2023   2022  % Change  2023   2022  % Change
    Subscription Digital Marketing Solutions$20,257  $23,188  (12.6)% $63,086  $68,021  (7.3)%
    Digital Advertising 39,009   36,989  5.5%  113,842   103,379  10.1%
    Digital 59,266   60,177  (1.5)%  176,928   171,400  3.2%
    Broadcast Advertising 54,179   59,293  (8.6)%  153,822   164,520  (6.5)%
    Other 1,659   1,165  42.4%  8,695   6,881  26.4%
    Net revenue$115,104  $120,635  (4.6)% $339,445  $342,801  (1.0)%
    Subscription Digital Marketing Solutions political revenue               
    Digital Advertising political revenue 66   100  (34.0)%  127   297  (57.2)%
    Broadcast Advertising political revenue 561   1,487  (62.3)%  1,118   3,238  (65.5)%
    Other political revenue               
    Political revenue$627  $1,587  (60.5)% $1,245  $3,535  (64.8)%
    Subscription Digital Marketing Solutions net revenue (ex. political)$20,257  $23,188  (12.6)% $63,086  $68,021  (7.3)%
    Digital Advertising net revenue (ex. political) 38,943   36,889  5.6%  113,715   103,082  10.3%
    Digital net revenue (ex. political) 59,200   60,077  (1.5)%  176,801   171,103  3.3%
    Broadcast Advertising political net revenue (ex. political) 53,618   57,806  (7.2)%  152,704   161,282  (5.3)%
    Other net revenue (ex. political) 1,659   1,165  42.4%  8,695   6,881  26.4%
    Net revenue (ex. political)$114,477  $119,048  (3.8)% $338,200  $339,266  (0.3)%
    ** not meaningful



    The following table reconciles on a GAAP basis net (loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Income for the three and nine months ended September 30, 2023, and 2022, respectively (in thousands, except per share data):

     Three Months Ended 
    September 30,
     Nine Months Ended 
    September 30,
     (Unaudited)
      2023   2022   2023   2022 
    Net (loss) income$(36,503) $2,798  $(41,144) $10,458 
    Income tax provision 17,478   2,275   9,380   4,939 
    (Loss) Income from operations before taxes (19,025)  5,073   (31,764)  15,397 
    Transaction and business realignment costs 161   1,004   764   2,280 
    Impairment of intangible assets, investments, goodwill and long-lived assets 30,970   10,300   65,697   20,197 
    Net gain on sale and retirement of assets (362)  (119)  (703)  (338)
    Gain on repurchases of debt (430)     (1,249)  (108)
    Gain on sale of digital assets       (839)   
    Gain on sale of investments       (5,210)   
    Change in fair value of investment 605   (239)  493   1,934 
    Gain on insurance recoveries (349)  (441)  (721)  (452)
    Net income attributable to non-controlling interest, net of income taxes (496)  (538)  (1,476)  (1,580)
    Adjusted net income before income taxes 11,074   15,040   24,992   37,330 
    Income tax provision (1) 2,824   6,745   6,373   11,975 
    Adjusted Net Income$8,250  $8,295  $18,619  $25,355 
            
    Adjusted Net Income Per Share:       
    Basic$0.51  $0.49  $1.10  $1.50 
    Diluted$0.46  $0.47  $1.05  $1.36 
            
    Weighted average shares outstanding:       
    Basic 16,277   17,037   16,897   16,941 
    Diluted 18,073   17,482   17,726   18,645 
    (1) Income tax provision for the three and nine months ended September 30, 2023 was calculated using the Company's statutory effective tax rate.



    The following table reconciles on a GAAP basis net (loss) income, 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, 2023, and 2022, respectively (dollars in thousands):

     Three Months Ended 
    September 30,
     Nine Months Ended 
    September 30,
     (Unaudited)
      2023   2022   2023   2022 
    Net (loss) income$(36,503) $2,798  $(41,144) $10,458 
    Income tax provision 17,478   2,275   9,380   4,939 
    Interest expense, net 9,343   9,967   28,215   30,038 
    Gain on repurchases of debt (430)     (1,249)  (108)
    Depreciation and amortization 4,717   4,467   14,496   13,546 
    Stock-based compensation 2,350   722   6,228   2,430 
    Transaction and business realignment costs 161   1,004   764   2,280 
    Impairment of intangible assets, investments, goodwill and long-lived assets 30,970   10,300   65,697   20,197 
    Other (a) (909)  (627)  (7,154)  1,548 
    Adjusted EBITDA$27,177  $30,906  $75,233  $85,328 
    Political Adjusted EBITDA (533)  (1,349)  (1,058)  (3,005)
    Adjusted EBITDA (Excluding Political)$26,644  $29,557  $74,175  $82,323 
    Political Adjusted EBITDA 533   1,349   1,058   3,005 
    Net cash paid for interest (18,219)  (18,776)  (37,273)  (38,284)
    Capital expenditures (4,237)  (5,473)  (11,373)  (13,100)
    Cash paid for taxes (305)  (190)  (1,122)  (1,049)
    Adjusted EBITDA Less Interest, Capex and Taxes$4,416  $6,467  $25,465  $32,895 
    (a) Other includes net gain on sale and retirement of assets and other (income) expense, 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, 2023 (dollars in thousands):

     Three Months Ended Twelve
    Months
    Ended
     (Unaudited)
     December 31,
    2022
     March 31,
    2023
     June 30,
    2023
     September
    30, 

    2023
     September
    30, 

    2023
    Net income (loss)$3,932  $(1,941) $(2,700) $(36,503) $(37,212)
    Income tax benefit (5,503)  (1,578)  (6,520)  17,478   3,877 
    Interest expense, net 9,790   9,558   9,314   9,343   38,005 
    Gain on repurchases of debt    (775)  (44)  (430)  (1,249)
    Depreciation and amortization 5,498   4,944   4,835   4,717   19,994 
    Stock-based compensation 1,367   1,772   2,106   2,350   7,595 
    Transaction and business realignment costs 2,168   292   311   161   2,932 
    Impairment of intangible assets, investments, goodwill and long-lived assets 10,917   8,487   26,240   30,970   76,614 
    Other (a) 221   (1,318)  (4,927)  (909)  (6,933)
    Adjusted EBITDA$28,390  $19,441  $28,615  $27,177  $103,623 
    (a) Other includes net gain on sale and retirement of assets and other (income) expense, 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, 2023, and 2022 (in thousands):

     Three Months Ended September 30, 2023
     (Unaudited)
     Subscription Digital
    Marketing Solutions
     Digital Advertising Broadcast Advertising Other Corporate
    and Other
    Reconciling
    Items
     Total
    Operating income (loss)$5,282 $11,448 $(13,081) $(427) $(13,881) $(10,659)
    Depreciation and amortization 325  147  3,263   35   947   4,717 
    Corporate expenses           6,604   6,604 
    Stock-based compensation 152  143  240   4   1,811   2,350 
    Transaction and business realignment costs     6   3   152   161 
    Impairment of intangible assets, investments, goodwill and long-lived assets     26,603      4,367   30,970 
    Net gain on sale and retirement of assets     (362)        (362)
    Adjusted Operating Income (loss)$5,759 $11,738 $16,669  $(385) $  $33,781 


     Three Months Ended September 30, 2022
     (Unaudited)
     Subscription
    Digital
    Marketing Solutions
     Digital Advertising Broadcast Advertising Other Corporate
    and Other
    Reconciling
    Items
     Total
    Operating income (loss)$5,986 $10,870 $5,793  $(272) $(7,845) $14,532 
    Depreciation and amortization 321  150  3,301   26   669   4,467 
    Corporate expenses           5,744   5,744 
    Stock-based compensation 137  20  109   2   454   722 
    Transaction and business realignment costs        6   998   1,004 
    Impairment of long-lived assets, intangible assets and investments     10,300         10,300 
    Net gain on sale and retirement of assets     (99)     (20)  (119)
    Adjusted Operating Income (loss)$6,444 $11,040 $19,404  $(238) $  $36,650 



    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, 2023, and 2022 (in thousands):

     Nine Months Ended September 30, 2023
     (Unaudited)
     Subscription
    Digital
    Marketing Solutions
     Digital Advertising Broadcast Advertising Other Corporate
    and Other
    Reconciling
    Items
     Total
    Operating income (loss)$15,972 $35,439 $(22,399) $493  $(40,754) $(11,249)
    Depreciation and amortization 980  479  10,245   104   2,688   14,496 
    Corporate expenses           18,911   18,911 
    Stock-based compensation 431  258  622   10   4,907   6,228 
    Transaction and business realignment costs     366   14   384   764 
    Impairment of intangible assets, investments, goodwill and long-lived assets     51,833      13,864   65,697 
    Net gain on sale and retirement of assets     (703)        (703)
    Adjusted Operating Income$17,383 $36,176 $39,964  $621  $  $94,144 


     Nine Months Ended September 30, 2022
     (Unaudited)
     Subscription
    Digital
    Marketing Solutions
     Digital Advertising Broadcast Advertising Other Corporate
    and Other Reconciling
    Items
     Total
    Operating income (loss)$18,195 $29,911 $24,786  $487  $(26,166) $47,213 
    Depreciation and amortization 911  360  9,603   113   2,559   13,546 
    Corporate expenses           15,892   15,892 
    Stock-based compensation 402  50  280   8   1,690   2,430 
    Transaction and business realignment costs        18   2,262   2,280 
    Impairment of long-lived assets, intangible assets and investments     16,258   120   3,819   20,197 
    Net gain on sale and retirement of assets     (282)     (56)  (338)
    Adjusted Operating Income$19,508 $30,321 $50,645  $746  $  $101,220 

     


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