Emmis Corporation

Emmis did not provide consolidated revenue or EPS figures on this call. Pro forma radio revenues, as reported to Miller Kaplan and excluding certain barter and other revenues, increased 3% year over year in Q1, or 4% excluding nonrecurring political revenues in the prior year. Pro forma radio station operating expenses excluding D&A rose 9% year over year. Automotive was 9% of revenue and up 3%. Capital expenditures were $244,000 in Q1, and full-year capex is expected to be approximately $0.7 million. Looking ahead, Q2 is currently pacing up double digits, helped by record Summer Jam ticket sales and sustained advertising strength. Emmis said it expects to have approximately $88 million of cash after the Austin and New York sales close and all taxes/fees are settled.

Jeff Smulyan framed the quarter as a turning point, saying Emmis is moving from a legacy radio-focused business toward a broader, higher-growth company. He said the company is casting a wide net for businesses with $10 million to $25 million of cash flow, not startups, and hopes to identify targets this year. His tone was upbeat and confident, emphasizing that Emmis has a culture and management team capable of transforming businesses.

Ryan Hornaday highlighted that Q1 pro forma radio revenue was up 3%, or 4% excluding prior-year political revenue, while radio operating expenses excluding depreciation and amortization were up 9%. He attributed higher costs to unusually high healthcare claims, the absence of prior-year bad debt recoveries, and spending to support digital revenue growth, but said expense growth should moderate in Q2. He also walked through the refinancing: a $23 million mortgage, a $12 million revolver, and a $4 million term loan, bringing the weighted average cost of capital for secured debt down from 10.5% to 5.8%.

Management said nothing is imminent on the acquisition front, but it is actively ramping up discussions and hopes to have identified some deals this year. Jeff Smulyan said Emmis is likely to pursue a couple of relatively smaller businesses, with target size around $10 million to $25 million of cash flow, and that the company may bring in partners. On the New York transaction, he said the structure preserves local management, creates a working relationship with Soo Kim and Mediaco, and keeps Emmis involved in oversight. He also said discussions continue around WLIB and that the Indianapolis land sale is still under consideration, with nothing done until it is done.