Townsquare Interactive Q2 Net Revenue Increased 10.5%
9th Consecutive Quarter of 850 (or more) Net Subscriber Additions at Townsquare Interactive
Digital Revenue over 48% of Total Net Revenue
Purchase, NY – August 10, 2020 – Townsquare Media, Inc. (NYSE: TSQ) announced today selected results for the second quarter ended June 30, 2020.
“As expected, our second quarter financial results were significantly impacted by the COVID-19 pandemic, with net revenue and Adjusted EBITDA declining 34.5% and 93.1%, respectively, as compared to the prior year. However, we experienced sequential improvement in our Advertising net revenue throughout the quarter, which together with our Live Events net revenue has experienced the brunt of the negative business impact. By the end of the second quarter, Advertising net revenue had materially improved, from -42.1% in April to -29.6% in June, and continued to show improvement through July and early August. In addition, in Q2 2020 our digital revenue exceeded 48% of our total net revenue, powered by our digital solutions, which have proven more resilient than our broadcast solutions during the pandemic, and in particular Townsquare Interactive, which is our digital marketing solutions subscription business,” commented Bill Wilson, Chief Executive Officer of Townsquare. “Despite the material decline in second quarter revenue, we generated positive Adjusted EBITDA and cash flow from operations in the second quarter, due in part to our cost reduction efforts as well as the strong cash generation of many of our assets. In total, we enacted approximately $1.7 million of monthly fixed cost savings during the second quarter, in addition to the reduction of variable costs related to the decline in revenue, which led to total direct operating expenses declining 14.8% as compared to the prior year. In addition, we have reduced our planned capital expenditures, which declined 30% in the second quarter compared to the prior year, and our board of directors elected to cease paying our quarterly dividend moving forward. We also repaid the entire amount outstanding on our Revolving Credit Facility, repaid $9.9 million of our Term Loans, opportunistically repurchased $4.7 million of our Unsecured Senior Notes at a significant discount, and still ended the quarter with $70.0 million of cash on hand.”
Mr. Wilson added, “Townsquare Interactive’s growth continued in the second quarter, with net revenue increasing 10.5%, at an Adjusted Operating Income margin in excess of 30%, and approximately 900 net subscriber additions, marking the 9th consecutive quarter of 850 (or more) net subscriber additions. During this pandemic, the Townsquare Interactive team became a tremendous resource for their local clients by strengthening their online presence and capabilities and powering their online communication strategy. We believe, and our thesis has always been, that Townsquare Interactive is a recession-resistant subscription business and will continue to grow its revenue and subscriber base throughout the year. We remain confident that Townsquare Interactive (as well as Townsquare Ignite, our digital programmatic advertising solution) will each generate $100 million of annual net revenue in two to four years.”
Mr. Wilson concluded, “One of the things we take great pride in is that even with all of the challenges and unknowns during this pandemic, we have not had to alter our core strategy. Instead, the pandemic placed a spotlight on the need to double down on executing our existing long term strategy. We believe that our Local First strategy, together with our talented team and diversified and differentiated product offering, ensures that Townsquare will emerge from this crisis well positioned for the future, and will return to our market leading performance as soon as this crisis abates. Although a very tough Q2, we believe our revenue, profit and cash flow results will be among the best in the radio as well as in the local media industry, which is directly tied to the team’s efforts and perseverance during this pandemic, as well as our large percentage of digital revenue and a strong and growing digital marketing subscription business.”
About Townsquare Media, Inc.
Townsquare is a radio, digital media, entertainment and digital marketing solutions company principally focused on being the premier local advertising and marketing solutions platform in small and mid-sized markets across the U.S. Our assets include 321 radio stations and more than 330 local websites in 67 U.S. markets, a digital marketing solutions company (Townsquare Interactive) serving approximately 20,750 small to medium sized businesses, a proprietary digital programmatic advertising platform (Townsquare Ignite) and numerous local live events each year. Our brands include local media assets such as WYRK, KLAQ, K2 and NJ101.5; iconic local and regional events such as WYRK’s Taste of Country, the Boise Music Festival, the Red Dirt BBQ & Music Festival and Taste of Fort Collins; and leading tastemaker music and entertainment websites such as XXLmag.com, TasteofCountry.com and Loudwire.com. For more information, please visit www.townsquaremedia.com, www.townsquareinteractive.com, and www.townsquareignite.com.