The black ink was flowing freely at Emmis Communications during its first fiscal quarter ended 5/31/13 – including a massive percentage gain in operating income. President/CEO Jeff Smulyan said the company outperformed an industry that performed well in its own right. He said the FM on cell project could be a game-changer and summed up, “I could not be prouder of where this company is. I could not be prouder of where this industry is. Better days are ahead.”
The basic numbers were these: Net revenues up 6% from $34.9M to $36.9M, and were up 7% if you exclude LMA’d 98.7 FM New York; operating income up 536% from $1.1M to $7M; and diluted income per common share up $0.08, last year it was down $0.07.
The company’s publishing division was said to have flat results.
President/CEO Jeff Smulyan commented, “Results like these are the reason that Emmis is known as one of the best operators of radio stations in the country. In addition to our improving financial performance, our stations and magazines received a number of awards in our first fiscal quarter for community service and content excellence. I’m so proud of our Emmis team for its consistent track record of creativity, innovation and operating excellence.
Smulyan said this was a “really fun” earnings conference. He noted that Emmis’s gains came in markets that were up 5%, and said the company is pacing up 6% in its Q2. He said he was thrilled to be outperforming an improving industry, and said the key was to create “…content that matters to people.”
Smulyan also touted a strong balance sheet, featuring leverage down to 3.2x and an interest rate of only 5%. The healthy balance sheet clears a path for the company to do “exciting things.”
One of those things is the pursuit of the FM chip on cell phone initiative. Smulyan said there has been a a “remarkable outpouring of support” from the radio industry from large to small companies on FM chip in cell project. He believes this will be a game-changer for radio.
Discussing the intrusion of streaming services onto the car dashboard, Smulyan said intruders are nothing new, and went as far back as the eight-track tape as an example. He said he believes radio is going to be a strong contender for in-vehicle listening.
On the FM chip, he noted that he’s met with innumerable players. He noted that streaming any content over a cell phone builds up data charges, which he said were exploding. The FM chip, on the other hand, comes from a broadcast tower and can be heard over a cell phone for free.
He does not believe marketing will be very much more difficult than pushing that price point.
He said that Emmis’s cell phone application, built at the request of NAB, has been by all standards a ‘homerun.” He said it’s interactive, engaging, in short, a game-changer.
It will come with a display on the mobile device being used, which can be used to promote the station being listened to, as a place for advertising, or whatever.
As for future plans, Smulyan listed a number of things the company might do, but did not cite any particular course of action. He said the company now has a lot of options, and that’s a good thing.
