Emmis Communications Corp. (EMMS, Financial) filed Quarterly Report for the period ended 2009-11-30.
Emmis Communications Corp. has a market cap of $47.7 million; its shares were traded at around $1.29 with a P/E ratio of 4.2 and P/S ratio of 0.1.
No customer represents more than 10% of our consolidated net revenues. Our top ten categories for radio represent approximately 60% of the total advertising net revenues. Although the automotive industry, representing approximately 9% of our radio net revenues, is the largest category for our radio division for the nine-month period ended November 30, 2009, our radio net revenues for this category are down 36% versus the same period of the prior year.
On April 3, 2009, Emmis entered into an LMA and a Put and Call Agreement for KMVN-FM in Los Angeles with a subsidiary of Grupo Radio Centro, S.A.B. de C.V (GRC), a Mexican broadcasting company. The LMA for KMVN-FM commenced on April 15, 2009 and will continue for up to seven years. The LMA requires $7 million in annual payments plus reimbursement of certain expenses. GRC paid the first two years of LMA payments in advance at closing. At any time during the LMA, GRC has the right to purchase the station for $110 million. At the end of the term, Emmis has the right to require GRC to purchase the station for the same amount. Under the LMA, Emmis continues to own and operate the station, with GRC providing Emmis with broadcast programming. The performance of Emmis other Los Angeles radio station, KPWR-FM, trailed the performance of the overall market. For the nine-month period ended November 30, 2009, KPWR-FMs gross revenues were down 32.6% whereas the independent accounting firm Miller, Kaplan, Arase & Co. (Miller Kaplan) reported that the Los Angeles market total gross revenues were down 21.8% versus the same period of the prior year.
Our radio cluster in New York trailed the performance of the overall New York radio market during the nine-month period ended November 30, 2009. For the nine-month period ended November 30, 2009, our New York radio stations gross revenues were down 23.1%, whereas Miller Kaplan reported that New York radio market total gross revenues were down 16.8% versus the same period of the prior year.
Radio net revenues decreased in both the three-month and nine-month periods ended November 30, 2009, principally as a result of a precipitous decline of advertising spending in our domestic and international radio markets due to the global economic slowdown. We typically monitor the performance of our domestic stations against the aggregate performance of the markets in which we operate based on reports for the periods prepared by Miller Kaplan. Miller Kaplan reports are generally prepared on a gross revenues basis and exclude revenues from barter arrangements. For the nine-month period ended November 30, 2009, revenues of our domestic radio stations excluding KMVN, which has been operating under an LMA since April 15, 2009, were down 21.4%, whereas Miller Kaplan reported that revenues of our domestic radio markets were down 18.3%. The relative underperformance of our domestic radio stations is principally due to our lack of scale in the New York and Los Angeles markets and the introduction of PPMTM to those markets in October 2008. The Companys national representation firm guaranteed a minimum amount of national sales for the year ended February 28, 2009. For the nine-month period ended November 30, 2008, a $6.2 million reduction of national agency commissions was recorded related to the national representation firms guarantee. No such guarantee exists subsequent to February 28, 2009. Market weakness and our stations weaknesses have led us to discount our rates charged to advertisers. For the nine-month period ended November 30, 2009, our average unit rate for our domestic radio stations was down 26.7% and our number of units sold was down 0.4%.
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Emmis Communications Corp. has a market cap of $47.7 million; its shares were traded at around $1.29 with a P/E ratio of 4.2 and P/S ratio of 0.1.
Highlight of Business Operations:
As previously mentioned, we derive approximately 80% of our net revenues from advertising sales. Our radio stations derive a higher percentage of their advertising revenues from local sales than our publishing entities. In the nine-month period ended November 30, 2009, local sales, excluding political revenues, represented approximately 84% and 70% of our advertising revenues for our radio and publishing divisions, respectively. In the nine-month period ended November 30, 2008, local sales, excluding political revenues, represented approximately 80% and 61% of our advertising revenues for our radio and publishing divisions, respectively. Our net revenues decreased principally as a result of a precipitous decline of advertising spending due to the global economic slowdown. Local sales have been more resilient than national sales. For the nine months ended November 30, 2009 as compared to the same period of the prior year, local sales are down approximately 24%, while national sales are down approximately 46%.No customer represents more than 10% of our consolidated net revenues. Our top ten categories for radio represent approximately 60% of the total advertising net revenues. Although the automotive industry, representing approximately 9% of our radio net revenues, is the largest category for our radio division for the nine-month period ended November 30, 2009, our radio net revenues for this category are down 36% versus the same period of the prior year.
On April 3, 2009, Emmis entered into an LMA and a Put and Call Agreement for KMVN-FM in Los Angeles with a subsidiary of Grupo Radio Centro, S.A.B. de C.V (GRC), a Mexican broadcasting company. The LMA for KMVN-FM commenced on April 15, 2009 and will continue for up to seven years. The LMA requires $7 million in annual payments plus reimbursement of certain expenses. GRC paid the first two years of LMA payments in advance at closing. At any time during the LMA, GRC has the right to purchase the station for $110 million. At the end of the term, Emmis has the right to require GRC to purchase the station for the same amount. Under the LMA, Emmis continues to own and operate the station, with GRC providing Emmis with broadcast programming. The performance of Emmis other Los Angeles radio station, KPWR-FM, trailed the performance of the overall market. For the nine-month period ended November 30, 2009, KPWR-FMs gross revenues were down 32.6% whereas the independent accounting firm Miller, Kaplan, Arase & Co. (Miller Kaplan) reported that the Los Angeles market total gross revenues were down 21.8% versus the same period of the prior year.
Our radio cluster in New York trailed the performance of the overall New York radio market during the nine-month period ended November 30, 2009. For the nine-month period ended November 30, 2009, our New York radio stations gross revenues were down 23.1%, whereas Miller Kaplan reported that New York radio market total gross revenues were down 16.8% versus the same period of the prior year.
Radio net revenues decreased in both the three-month and nine-month periods ended November 30, 2009, principally as a result of a precipitous decline of advertising spending in our domestic and international radio markets due to the global economic slowdown. We typically monitor the performance of our domestic stations against the aggregate performance of the markets in which we operate based on reports for the periods prepared by Miller Kaplan. Miller Kaplan reports are generally prepared on a gross revenues basis and exclude revenues from barter arrangements. For the nine-month period ended November 30, 2009, revenues of our domestic radio stations excluding KMVN, which has been operating under an LMA since April 15, 2009, were down 21.4%, whereas Miller Kaplan reported that revenues of our domestic radio markets were down 18.3%. The relative underperformance of our domestic radio stations is principally due to our lack of scale in the New York and Los Angeles markets and the introduction of PPMTM to those markets in October 2008. The Companys national representation firm guaranteed a minimum amount of national sales for the year ended February 28, 2009. For the nine-month period ended November 30, 2008, a $6.2 million reduction of national agency commissions was recorded related to the national representation firms guarantee. No such guarantee exists subsequent to February 28, 2009. Market weakness and our stations weaknesses have led us to discount our rates charged to advertisers. For the nine-month period ended November 30, 2009, our average unit rate for our domestic radio stations was down 26.7% and our number of units sold was down 0.4%.
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