TOWNSQUARE ANNOUNCES FIRST QUARTER 2020 RESULTS
9th Consecutive Quarter of Pro Forma Net Revenue Growth
Digital Revenue over 40% of Total Net Revenue
Purchase, NY - June 15, 2020 - Townsquare Media, Inc. (NYSE: TSQ) (“Townsquare,” the “Company,” “we,” “us,” or “our”) announced today selected results for the first quarter ended March 31, 2020.
“While our first quarter started strong with high single digit net revenue and Adjusted EBITDA growth in January and February, beginning in March we experienced a significant negative business impact to our Advertising and Live Events segments related to the COVID-19 pandemic, offsetting the momentum we established in 2019 and early 2020. First quarter net revenue increased 0.5% on a pro forma basis resulting in our 9th consecutive quarter of pro forma net revenue growth. In addition, Q1 2020 marked the first time our digital revenue exceeded 40% of our total net revenue, up from 35% in 2019, powered by Townsquare Interactive and Townsquare Ignite,” commented Bill Wilson, Chief Executive Officer of Townsquare. “As a result of the COVID-19 pandemic, we experienced a significant decline in our Advertising revenue in March, but we were still able to generate positive first quarter year over year Advertising net revenue growth. Our Advertising net revenue declined further in April, but has shown sequential improvement in both May and June to date. We also cancelled or postponed our live events scheduled in March, April, May and June, which negatively impacted our net revenue. Thankfully, our Live Events segment is a much smaller component of our Company today after we had the foresight to sell our large, out of market live event assets, including North American Midway Entertainment and several multi-day music festivals over the past two years. We have taken a number of steps to reduce our cost base in an effort to help mitigate the decline in revenue caused by the COVID-19 pandemic. In total, we have enacted approximately $1.7 million of monthly fixed cost savings, and anticipate the reduction of variable costs related to the decline in revenue. In addition, we have reduced our planned capital expenditures, and our board of directors has elected to cease paying our quarterly dividend moving forward. All of these actions have strongly bolstered our liquidity position.”
Mr. Wilson added, “Townsquare Interactive was a very bright spot in the first quarter, with net revenue increasing more than 16%, ending the quarter with approximately 19,850 net subscribers, an addition of 850 net subscribers during Q1. Especially now, small and medium sized businesses need to strengthen and maintain their online presence, and Townsquare Interactive’s marketing solutions are able to do that at a highly competitive price point. I’m very proud of how our sales teams were able to pivot their marketing strategies to help small and mid-sized businesses digitalize and adapt during these challenging times. We believe, and our thesis has always been, that Townsquare Interactive is a recession-resistant business and will continue to grow its revenue and subscriber base throughout the year."
“I am so proud of our talented Townsquare Team and their focus, strength and perseverance during the pandemic. Our Team’s commitment and obligation has never been greater to do our job, to do our best, and to fulfill our responsibility to super-serve our listeners, our clients and our local communities. Because of our team’s dedication and performance, combined with the diversification of our revenue, with Q1 digital revenue contributing over 40% of our total net revenue, we believe that we will not only prevail, but we will be able to rebound more quickly than others. Our goal has been to balance cost reductions with our opportunity for long-term growth. 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,” concluded Wilson.
Due to the economic circumstances and uncertainty created by the COVID-19 pandemic, the Company’s board of directors has decided to cease paying quarterly dividends moving forward, and therefore did not declare a dividend for this quarter.
As disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on May 11, 2020, we filed to extend the due date of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 due to circumstances related to the COVID-19 pandemic. We presently intend to file our Quarterly Report on or before June 25, 2020, which will be deemed timely filed by the SEC. We expect to record a material non-cash impairment charge to our intangible assets for the three months ending March 31, 2020 as a result of the effects of the COVID-19 pandemic.