Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May 31, 2019 | Jul. 02, 2019 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 31, 2019 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | EMMS | |
Entity Registrant Name | EMMIS COMMUNICATIONS CORP | |
Entity Central Index Key | 0000783005 | |
Current Fiscal Year End Date | --02-28 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Address, State or Province | INDIANA | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 11,893,828 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,242,366 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Statement [Abstract] | ||
NET REVENUES | $ 27,771 | $ 28,006 |
OPERATING EXPENSES: | ||
Station operating expenses excluding depreciation and amortization expense | 19,777 | 21,531 |
Corporate expenses excluding depreciation and amortization expense | 2,558 | 2,508 |
Depreciation and amortization | 750 | 799 |
Gain on sale of assets, net of disposition costs | (32,067) | |
Total operating expenses | 23,085 | (7,229) |
OPERATING INCOME | 4,686 | 35,235 |
OTHER EXPENSE: | ||
Interest expense | (1,481) | (2,641) |
Loss on debt extinguishment | (771) | |
Other income, net | 12 | 16 |
Total other expense | (1,469) | (3,396) |
INCOME BEFORE INCOME TAXES | 3,217 | 31,839 |
PROVISION FOR INCOME TAXES | 701 | 7,600 |
CONSOLIDATED NET INCOME | 2,516 | 24,239 |
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 846 | 754 |
NET INCOME ATTRIBUTABLE TO THE COMPANY | $ 1,670 | $ 23,485 |
NET INCOME PER SHARE - BASIC | $ 0.13 | $ 1.88 |
NET INCOME PER SHARE - DILUTED | $ 0.13 | $ 1.75 |
Basic weighted average common shares outstanding | 12,773 | 12,483 |
Diluted weighted average common shares outstanding | 13,293 | 13,411 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Statement [Abstract] | ||
Depreciation and amortization expense excluded from station operating expenses | $ 553 | $ 600 |
Depreciation and amortization expenses excluded from corporate expenses | $ 197 | $ 199 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
CONSOLIDATED NET INCOME | $ 2,516 | $ 24,239 |
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 846 | 754 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 1,670 | $ 23,485 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | May 31, 2019 | Feb. 28, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 2,760 | $ 5,438 |
Restricted cash | 1,374 | 2,504 |
Accounts receivable, net | 18,212 | 16,775 |
Prepaid expenses | 4,968 | 3,831 |
Other current assets | 1,428 | 1,446 |
Total current assets | 28,742 | 29,994 |
PROPERTY AND EQUIPMENT, NET | 23,043 | 23,477 |
INTANGIBLE ASSETS (NOTE 3): | ||
Indefinite-lived intangibles | 170,547 | 170,547 |
Goodwill | 4,338 | 4,338 |
Other intangibles, net | 686 | 758 |
Total intangible assets | 175,571 | 175,643 |
OPERATING LEASE RIGHT-OF-USE ASSETS | 23,820 | |
OTHER ASSETS, NET | 8,696 | 8,632 |
Total assets | 259,872 | 237,746 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 5,323 | 4,451 |
Current maturities of long-term debt | 8,922 | 32,150 |
Accrued salaries and commissions | 2,218 | 2,570 |
Deferred revenue | 5,027 | 4,055 |
Income taxes payable | 7,339 | 11,218 |
Operating lease liabilities | 3,688 | |
Other current liabilities | 1,637 | 2,922 |
Total current liabilities | 34,154 | 57,366 |
LONG-TERM DEBT, NET OF CURRENT MATURITIES AND UNAMORTIZED DISCOUNT (NOTE 4) | 71,478 | 48,757 |
OPERATING LEASE LIABILITIES, NET OF CURRENT | 24,077 | |
OTHER NONCURRENT LIABILITIES | 2,437 | 6,024 |
DEFERRED INCOME TAXES | 25,628 | 25,232 |
Total liabilities | 157,774 | 137,379 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY: | ||
Additional paid-in capital | 596,319 | 595,984 |
Accumulated deficit | (522,230) | (523,900) |
Total shareholders’ equity | 74,220 | 72,214 |
NONCONTROLLING INTERESTS | 27,878 | 28,153 |
Total equity | 102,098 | 100,367 |
Total liabilities and equity | 259,872 | 237,746 |
Class A Common Stock | ||
EQUITY: | ||
Common Stock | 119 | 118 |
Class B Common Stock | ||
EQUITY: | ||
Common Stock | $ 12 | $ 12 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | May 31, 2019 | Feb. 28, 2019 |
Class A Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 42,500,000 | 42,500,000 |
Common stock, shares issued | 11,882,578 | 11,809,291 |
Common stock, shares outstanding | 11,882,578 | 11,809,291 |
Class B Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock, shares issued | 1,242,366 | 1,242,366 |
Common stock, shares outstanding | 1,242,366 | 1,242,366 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interests | Class A Common StockCommon Stock | Class B Common StockCommon Stock |
Beginning Balance at Feb. 28, 2018 | $ 78,263 | $ 594,708 | $ (547,252) | $ 30,680 | $ 116 | $ 11 |
Beginning Balance (in shares) at Feb. 28, 2018 | 11,649,440 | 1,142,366 | ||||
Net income | 24,239 | 23,485 | 754 | |||
Issuance of common stock to employees and officers, net | 390 | 389 | $ 1 | |||
Issuance of common stock to employees and officers, net (in shares) | (4,097) | 1,000,000 | ||||
Exercise of stock options | 120 | 119 | $ 1 | |||
Exercise of stock options (In shares) | 45,834 | |||||
Distributions to noncontrolling interests | (1,721) | (1,721) | ||||
Ending Balance at May. 31, 2018 | 101,291 | 595,216 | (523,767) | 29,713 | $ 117 | $ 12 |
Ending Balance (in shares) at May. 31, 2018 | 11,691,177 | 2,142,366 | ||||
Beginning Balance at Feb. 28, 2019 | 100,367 | 595,984 | (523,900) | 28,153 | $ 118 | $ 12 |
Beginning Balance (in shares) at Feb. 28, 2019 | 11,809,291 | 1,242,366 | ||||
Net income | 2,516 | 1,670 | 846 | |||
Issuance of common stock to employees and officers, net | 313 | 312 | $ 1 | |||
Issuance of common stock to employees and officers, net (in shares) | 56,458 | |||||
Exercise of stock options | $ 23 | 23 | ||||
Exercise of stock options (In shares) | 16,829 | 16,829 | ||||
Distributions to noncontrolling interests | $ (1,121) | (1,121) | ||||
Ending Balance at May. 31, 2019 | $ 102,098 | $ 596,319 | $ (522,230) | $ 27,878 | $ 119 | $ 12 |
Ending Balance (in shares) at May. 31, 2019 | 11,882,578 | 1,242,366 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
CONSOLIDATED NET INCOME | $ 2,516 | $ 24,239 |
Gain on sale of assets, net of disposition costs | (32,067) | |
Depreciation and amortization | 750 | 799 |
Amortization of debt discount | 139 | 465 |
Noncash accretion of debt | 21 | 21 |
Loss on debt extinguishment | 771 | |
Provision for bad debts | 64 | 698 |
Deferred income taxes | 396 | (4,181) |
Noncash compensation | 395 | 463 |
Changes in assets and liabilities - | ||
Accounts receivable | (1,501) | 2,518 |
Prepaid expenses and other current assets | (1,119) | (387) |
Other assets | 884 | (22) |
Accounts payable and accrued liabilities | 507 | (5,146) |
Deferred revenue | 972 | 1,534 |
Income taxes | (3,891) | 9,245 |
Other liabilities | (1,863) | 239 |
Net cash used in operating activities | (1,730) | (811) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (244) | (20) |
Proceeds from the sale of assets | 60,000 | |
Net cash provided by (used in) investing activities | (244) | 59,980 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on long-term debt | (27,050) | (54,533) |
Proceeds from long-term debt | 27,000 | 2,500 |
Debt-related costs | (617) | |
Distributions to noncontrolling interests | (1,121) | (1,721) |
Proceeds from the exercise of stock options | 23 | 119 |
Settlement of tax withholding obligations on stock issued to employees | (69) | (73) |
Net cash used in financing activities | (1,834) | (53,708) |
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (3,808) | 5,461 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | ||
Beginning of period | 7,942 | 6,115 |
End of period | 4,134 | 11,576 |
SUPPLEMENTAL DISCLOSURES: | ||
Cash paid for interest | 1,246 | 2,043 |
Cash paid for income taxes, net | 4,195 | 369 |
Noncash financing transactions- | ||
Stock issued to employees and directors | $ 382 | $ 463 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Preparation of Interim Financial Statements Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), the condensed consolidated interim financial statements included herein have been prepared, without audit, by Emmis Communications Corporation (“ECC”) and its subsidiaries (collectively, “our,” “us,” “we,” “Emmis” or the “Company”). As permitted under the applicable rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, Emmis believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report for Emmis filed on Form 10-K for the year ended February 28, 2019. The Company’s results are subject to seasonal fluctuations. Therefore, results shown on an interim basis are not necessarily indicative of results for a full year. In the opinion of Emmis, the accompanying condensed consolidated interim financial statements contain all material adjustments (consisting only of normal recurring adjustments, except as otherwise noted) necessary to present fairly the consolidated financial position of Emmis at May 31, 2019, the results of its operations for the three-month periods ended May 31, 2018 and 2019, and cash flows for the three-month periods ended May 31, 2018 and 2019. There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended February 28, 2019 that have had a material impact on our condensed consolidated financial statements and related notes. Basic and Diluted Net Income Per Common Share Basic net income per common share is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Potentially dilutive securities at May 31, 2018 and 2019 consisted of stock options and restricted stock awards. The following table sets forth the calculation of basic and diluted net income per share: For the Three Months Ended May 31, 2018 2019 Net Income Shares Net Income Per Share Net Income Shares Net Income Per Share (amounts in 000’s, except per share data) Basic net income per common share: Net income available to common shareholders $ 23,485 12,483 $ 1.88 $ 1,670 12,773 $ 0.13 Impact of equity awards — 928 — — 520 — Diluted net income per common share: Net income available to common shareholders $ 23,485 13,411 $ 1.75 $ 1,670 13,293 $ 0.13 Shares excluded from the calculation as the effect of their conversion into shares of our common stock would be antidilutive were as follows: For the Three Months Ended May 31, 2018 2019 (shares in 000’s ) Equity awards 849 1,588 Antidilutive common share equivalents 849 1,588 Local Programming and Marketing Agreement Fees The Company from time to time enters into local programming and marketing agreements (“LMAs”), often pending regulatory approval of transfer of the Federal Communications Commission ("FCC") licenses in connection with acquisitions or dispositions of radio stations. Under the terms of these agreements, the acquiring company makes specified periodic payments to the holder of the FCC license in exchange for the right to program and sell advertising for a specified portion of the station’s inventory of broadcast time. The acquiring company records revenues and expenses associated with the portion of the station’s inventory of broadcast time it manages. Nevertheless, as the holder of the FCC license, the owner-operator retains control and responsibility for the operation of the station, including responsibility over all programming broadcast on the station. On April 30, 2018, Emmis closed on the sale of substantially all of its radio station assets in St. Louis. The St. Louis stations were operated pursuant to LMAs from March 1, 2018 through April 30, 2018. The buyers of the stations paid LMA fees totaling $0.7 million during the period, which was recognized as a component of net revenues in the accompanying condensed consolidated statements of operations for the three-month period ending May 31, 2018. On April 26, 2012, Emmis entered into an LMA with a subsidiary of Disney Enterprises, Inc. for 98.7FM in New York (formerly WRKS-FM and now WEPN-FM, hereinafter referred to as “98.7FM”). The LMA for this station started on April 30, 2012 and will continue until August 31, 2024. Emmis retains ownership and control of the station, including the related FCC license during the term of the LMA and is scheduled to receive an annual fee until the LMA’s termination. LMA fee revenue is recorded on a straight-line basis over the term of the LMA as a component of net revenues in our accompanying condensed consolidated statements of operations. The following table summarizes certain operating results of 98.7FM for all periods presented. Net revenues for 98.7FM are solely related to LMA fees. 98.7FM is a part of our radio segment. For the Three Months Ended May 31, 2018 2019 Net revenues $ 2,583 $ 2,583 Station operating expenses, excluding depreciation and amortization expense 297 350 Interest expense 609 540 Assets and liabilities of 98.7FM as of February 28, 2019 and May 31, 2019 were as follows: As of February 28, 2019 As of May 31, 2019 Current assets: Restricted cash $ 1,504 $ 1,149 Prepaid expenses 394 380 Other current assets 340 432 Total current assets 2,238 1,961 Noncurrent assets: Property and equipment, net 188 183 Indefinite lived intangibles 46,390 46,390 Deposits and other 6,255 6,124 Total noncurrent assets 52,833 52,697 Total assets $ 55,071 $ 54,658 Current liabilities: Accounts payable and accrued expenses $ 15 $ 15 Current maturities of long-term debt 7,150 7,297 Deferred revenue 864 894 Other current liabilities 162 156 Total current liabilities 8,191 8,362 Noncurrent liabilities: Long-term debt, net of current portion and unamortized debt discount 38,747 36,947 Total noncurrent liabilities 38,747 36,947 Total liabilities $ 46,938 $ 45,309 Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the same amounts shown in the condensed consolidated statements of cash flows. As of February 28, 2019 As of May 31, 2019 Cash and cash equivalents $ 5,438 $ 2,760 Restricted cash: 98.7FM LMA restricted cash 1,504 1,149 Cash used to secure the Company's purchasing card and travel and expense program 1,000 225 Total cash, cash equivalents and restricted cash $ 7,942 $ 4,134 As of February 28, 2019 and May 31, 2019, restricted cash relates to cash on deposit in trust accounts related to our 98.7FM LMA in New York City that services long-term debt and cash held by JPMorgan Chase as collateral to secure the Company’s corporate purchasing card and travel and expense program. Noncontrolling Interests The Company follows Accounting Standards Codification paragraph 810-10-65-1 to report the noncontrolling interests related to our Austin radio partnership and Digonex Technologies Inc., a dynamic pricing business (hereinafter "Digonex"). We have a 50.1% controlling interest in our Austin radio partnership. We do not own any of the common equity of Digonex, but we consolidate the entity because we control its board of directors via rights granted in convertible preferred stock and convertible debt that we own. As of May 31, 2019, Emmis owns rights that are convertible into approximately 84% of Digonex's common equity. Noncontrolling interests represent the noncontrolling interest holders' proportionate share of the equity of the Austin radio partnership and Digonex. Noncontrolling interests are adjusted for the noncontrolling interest holders' proportionate share of the earnings or losses of the applicable entity. The noncontrolling interest continues to be attributed its share of losses even if that attribution results in a deficit noncontrolling interest balance. Below is a summary of the noncontrolling interest activity for the three months ended May 31, 2018 and 2019: Austin radio partnership Digonex Total noncontrolling interests Balance, February 28, 2018 $ 47,424 $ (16,744 ) $ 30,680 Net income (loss) 1,372 (618 ) 754 Distributions to noncontrolling interests (1,721 ) — (1,721 ) Balance, May 31, 2018 $ 47,075 $ (17,362 ) $ 29,713 Balance, February 28, 2019 $ 47,146 $ (18,993 ) $ 28,153 Net income (loss) 1,347 (501 ) 846 Distributions to noncontrolling interests (1,121 ) — (1,121 ) Balance, May 31, 2019 $ 47,372 $ (19,494 ) $ 27,878 Implementation of Recent Accounting Pronouncements On March 1, 2019, we adopted Accounting Standard Update 2016-02, Leases Recent Accounting Pronouncements Not Yet Implemented In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses |
Share Based Payments
Share Based Payments | 3 Months Ended |
May 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share Based Payments | Note 2. Share Based Payments The amounts recorded as share based compensation expense consist of stock option grants, restricted stock grants, and common stock issued to employees and directors in lieu of cash payments. Stock Option Awards The Company has granted options to purchase its common stock to employees and directors of the Company under various stock option plans at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding 10 years and are forfeited, except in certain circumstances, in the event the employee or director terminates his or her employment or relationship with the Company. Generally, these options either vest annually over 3 years (one-third each year for 3 years), or cliff vest at the end of 3 years. The Company issues new shares upon the exercise of stock options. The fair value of each option awarded is estimated on the date of grant using a Black-Scholes option-pricing model and expensed on a straight-line basis over the vesting period. Expected volatilities are based on historical volatility of the Company’s stock. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. The Company includes estimated forfeitures in its compensation cost and updates the estimated forfeiture rate through the final vesting date of awards. The risk-free interest rate for periods within the life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The following assumptions were used to calculate the fair value of the Company’s options on the date of grant during the three months ended May 31, 2018 and 2019: Three Months Ended May 31, 2018 2019 Risk-Free Interest Rate: 2.6% 2.5% - 2.6% Expected Dividend Yield: 0% 0% Expected Life (Years): 4.8 4.6 Expected Volatility: 53.2% 50.3% - 50.4% The following table presents a summary of the Company’s stock options outstanding at May 31, 2019, and stock option activity during the three months ended May 31, 2019 (“Price” reflects the weighted average exercise price per share; "Aggregate Intrinsic Value" dollars in thousands): Options Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, beginning of period 2,738,087 $ 4.72 Granted 224,500 3.71 Exercised 16,829 1.39 Forfeited — — Expired 10,375 3.75 Outstanding, end of period 2,935,383 4.67 6.1 $ 1,371 Exercisable, end of period 2,248,708 4.97 5.2 $ 1,165 Cash received from option exercises for the three months ended May 31, 2018 and 2019 was $0.1 million and less than $0.1 million, respectively. The Company did not record an income tax benefit relating to the options exercised during the three months ended May 31, 2018 or 2019. The weighted average per share grant date fair value of options granted during the three months ended May 31, 2018 and 2019, was $2.03 and $1.65, respectively. A summary of the Company’s nonvested options at May 31, 2019, and changes during the three months ended May 31, 2019, is presented below: Options Weighted Average Grant Date Fair Value Nonvested, beginning of period 608,175 $ 1.64 Granted 224,500 1.65 Vested 146,000 1.32 Forfeited — — Nonvested, end of period 686,675 1.71 There were 1.7 million shares available for future grants under the Company’s various equity plans (1.4 million shares under the 2017 Equity Compensation Plan and 0.3 million shares under other plans) at May 31, 2019, not including shares that may become available for future grants upon forfeiture, lapse or surrender for taxes. The vesting dates of outstanding options at May 31, 2019 range from July 2019 to March 2022, and expiration dates range from July 2019 to March 2029. Restricted Stock Awards The Company periodically grants restricted stock awards to directors and employees. Awards to directors were historically granted on the date of our annual meeting of shareholders and vested on the earlier of (i) the completion of the director’s 3-year term or (ii) the third anniversary of the date of grant. No such awards were made to directors at our last annual meeting of shareholders. Awards to employees are typically made pursuant to employment agreements. Restricted stock awards are granted out of the Company’s 2017 Equity Compensation Plan. The Company also awards, out of the Company’s 2017 Equity Compensation Plan, stock to settle certain bonuses and other compensation that otherwise would be paid in cash. Any restrictions on these shares may be immediately lapsed on the grant date. The following table presents a summary of the Company’s restricted stock grants outstanding at May 31, 2019, and restricted stock activity during the three months ended May 31, 2019 (“Price” reflects the weighted average share price at the date of grant): Awards Price Grants outstanding, beginning of period 265,107 $ 3.43 Granted 113,548 3.68 Vested (restriction lapsed) 44,548 3.34 Grants outstanding, end of period 334,107 3.53 The total grant date fair value of shares vested during the three months ended May 31, 2018 and 2019, was $0.2 million and $0.1 million, respectively. Recognized Non-Cash Compensation Expense The following table summarizes stock-based compensation expense recognized by the Company during the three months ended May 31, 2018 and 2019. The Company did not recognize any tax benefits related to stock-based compensation during the periods presented below. Three Months Ended May 31, 2018 2019 Station operating expenses $ 71 $ 65 Corporate expenses 392 330 Stock-based compensation expense included in operating expenses $ 463 $ 395 As of May 31, 2019, there was $1.3 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested share-based compensation arrangements. The cost is expected to be recognized over a weighted average period of approximately 1.7 years. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
May 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Note 3. Intangible Assets and Goodwill Valuation of Indefinite-lived Broadcasting Licenses In accordance with Accounting Standards Codification ("ASC") Topic 350, Intangibles—Goodwill and Other, The carrying amounts of the Company’s FCC licenses were $170.5 million as of February 28, 2019 and May 31, 2019. Pursuant to Emmis’ accounting policy, stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA with another broadcaster. The Company generally performs its annual impairment test of indefinite-lived intangibles as of December 1 of each year. When indicators of impairment are present, the Company will perform an interim impairment test. During the three months ended May 31, 2019, no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. These impairment tests may result in additional impairment charges in future periods. Fair value of our FCC licenses is estimated to be the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. To determine the fair value of our FCC licenses, the Company uses an income valuation method when it performs its impairment tests. Under this method, the Company projects cash flows that would be generated by each of its units of accounting assuming the unit of accounting was commencing operations in its respective market at the beginning of the valuation period. This cash flow stream is discounted to arrive at a value for the FCC license. The Company assumes the competitive situation that exists in each market remains unchanged, with the exception that its unit of accounting commenced operations at the beginning of the valuation period. In doing so, the Company extracts the value of going concern and any other assets acquired, and strictly values the FCC license. Major assumptions involved in this analysis include market revenue, market revenue growth rates, unit of accounting audience share, unit of accounting revenue share and discount rate. Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control. When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by ASC Topic 350-30-35. In our case, radio stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA. Valuation of Goodwill The carrying amounts of the Company's goodwill, all of which were attributable to our radio division, were $4.3 million as of February 28, 2019 and May 31, 2019. ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually. The Company conducts its impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. When assessing its goodwill for impairment, the Company generally uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units, with radio stations grouped by market. Management determines enterprise value for each of its reporting units by multiplying the two-year average station operating income generated by each reporting unit (current year based on actual results and the next year based on budgeted results) by an estimated market multiple. The Company uses a blended station operating income trading multiple of publicly traded radio operators as a benchmark for the multiple it applies to its radio reporting units. Management believes this methodology for valuing radio properties is a common approach and believes that the multiples used in the valuation are Definite-lived intangibles The following table presents the weighted-average useful life at May 31, 2019, and the gross carrying amount and accumulated amortization for our sole definite-lived intangible asset at February 28, 2019 and May 31, 2019: As of February 28, 2019 As of May 31, 2019 (in 000's, except years) Weighted Average Remaining Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Programming agreement 2.3 $ 2,154 $ 1,396 $ 758 $ 2,154 $ 1,468 $ 686 In accordance with Accounting Standards Codification paragraph 360-10, the Company performs an analysis to (i) determine if indicators of impairment of a long-lived asset are present, (ii) test the long-lived asset for recoverability by comparing undiscounted cash flows of the long-lived asset to its carrying value and (iii) measure any potential impairment by comparing the long-lived asset's fair value to its current carrying value. Total amortization expense from definite-lived intangibles for the three-month periods ended May 31, 2018 and 2019 was $0.1 million in both periods. The following table presents the Company's estimate of future amortization expense for definite-lived intangibles: Year ended February 28 (29), Expected Amortization Expense Remainder of 2020 $ 221 2021 294 2022 171 |
Long-term Debt
Long-term Debt | 3 Months Ended |
May 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Note 4. Long-term Debt Long-term debt was comprised of the following at February 28, 2019 and May 31, 2019: February 28, 2019 May 31, 2019 2014 Credit Agreement Term Loan $ 25,000 $ — Mortgage — 22,891 Term Loan — 3,778 98.7FM non-recourse debt 47,332 45,613 Other non-recourse debt (1) 10,074 10,095 Less: Current maturities (32,150 ) (8,922 ) Less: Unamortized original issue discount (1,499 ) (1,977 ) Total long-term debt, net of current portion and debt discount $ 48,757 $ 71,478 (1) The face value of other non-recourse debt was $10.2 million at February 28, 2019 and May 31, 2019 On April 12, 2019, Emmis and certain of its subsidiaries entered into three loan agreements, consisting of: 1. $12 million revolving credit agreement by and among Wells Fargo Bank, National Association, as lender, the Company, Emmis Operating Company, a wholly owned subsidiary of the Company, and certain other subsidiaries as borrowers (the “Credit Agreement”). As of May 31, 2019, no amounts were outstanding under the Credit Agreement. 2. $23 million mortgage by and between Emmis Operating Company and Emmis Indiana Broadcasting, L.P., as borrowers, and Star Financial Bank, as lender (the “Mortgage”). 3. $4 million term loan, by and between Emmis Operating Company, as borrower, and Barrett Investment Partners, LLC, as lender (the “Term Loan”). The Credit Agreement expires April 12, 2024, provided the Term Loan is repaid, replaced, or extended by October 12, 2021. Amounts borrowed under the Credit Agreement bear interest at daily three-month LIBOR plus 2.50%. A commitment fee of 0.50% per annum is charged for unused amounts under the Credit Agreement. Pursuant to a Guaranty and Security Agreement, dated as of April 12, 2019, by and among Wells Fargo Bank, National Association, as lender, the Company, Emmis Operating Company, and certain other subsidiaries as borrowers (the “GSA”), the obligations under the Credit Agreement are secured by a perfected first priority security interest in certain of the Company’s accounts receivable and fixed assets, as well as security interests in certain other assets of the Company. Borrowing under the Credit Agreement depends upon continued compliance with certain operating covenants and financial covenants, including maintaining a fixed charge coverage ratio, as specifically defined in the Credit Agreement, of at least 1.10:1.00. No amounts may be borrowed under the Credit Agreement unless and until (i) remaining income tax obligations, of approximately $7 million, are paid in full, or (ii) the borrowing is used to pay such income tax obligations. The operating and other restrictions with which the Company must comply include, among others, restrictions on additional indebtedness, incurrence of liens, engaging in businesses other than our primary business, paying certain dividends, redeeming or repurchasing capital stock, acquisitions and asset sales. The Mortgage expires April 12, 2029, and is secured by a perfected first priority security interest in the Company’s headquarters building in Indianapolis, Indiana, and approximately 70 acres of land owned by the Company in Whitestown, Indiana, which currently is used as a tower site for one of the Company’s radio stations. The Mortgage bears interest at 5.48% per annum and requires monthly principal and interest payments using a 25 year amortization period, with a balloon payment due at expiration. The Mortgage requires continued compliance with certain operating covenants and financial covenants, including maintaining a fixed charge coverage ratio, as specifically defined, of at least 1.10:1.00, and requires certain proceeds from asset sales to be used to repay the Mortgage indebtedness. The Mortgage is carried net of an unamortized original issue discount of $0.2 million as of May 31, 2019. The original issue discount is being amortized as additional interest expense over the life of the Mortgage using the effective interest method. The Term Loan expires April 12, 2022, and is secured by a pledge of the Company’s controlling ownership interest in a partnership that owns and operates six radio stations in Austin, Texas. The Term Loan bears interest at 10% per annum the first year, with the rate increasing to 12% in the second year and to 14% in the third year. The Term Loan requires monthly principal and interest payments and is prepayable at par at any time, provided that interest of at least $125 thousand must be paid to the lender. The Term Loan is carried net of an unamortized original issue discount of less than $0.1 million as of May 31, 2019. The original issue discount is being amortized as additional interest expense over the life of the Term Loan using the effective interest method. In connection with the execution of the Revolving Credit Agreement, Mortgage and Term Loan, the 2014 Credit Agreement, by and among the Company, Emmis Operating Company, as borrower and certain other subsidiaries and the lenders party thereto, was terminated effective April 12, 2019 and all amounts outstanding under that agreement were paid in full. The Company did not record a loss on debt extinguishment as the debt discount related to the 2014 Credit Agreement was fully amortized. The Revolving Credit Agreement and Mortgage require the Company to comply with certain financial and non-financial covenants. The Company is required to comply with a fixed charge coverage ratio covenant of 1.10:1.00. We were in compliance with all financial and non-financial covenants as of May 31, 2019. 98.7FM Non-recourse Debt On May 30, 2012, the Company, through wholly-owned, newly-created subsidiaries, issued $82.2 million of non-recourse notes. Teachers Insurance and Annuity Association of America, through a participation agreement with Wells Fargo Bank Northwest, National Association, is entitled to receive payments made on the notes. The notes are obligations only of the newly-created subsidiaries, are non-recourse to the rest of the Company and its subsidiaries, and are secured by the assets of the newly-created subsidiaries, including the payments made to the newly-created subsidiary related to the 98.7FM LMA, which are guaranteed by Disney Enterprises, Inc. The notes bear interest at 4.1%. The 98.7FM non-recourse notes are carried on our condensed consolidated balance sheets net of an original issue discount. The original issue discount, which was $1.4 million as of February 28, 2019 and May 31, 2019, is being amortized as additional interest expense over the life of the notes. Other Non-recourse Debt Digonex non-recourse notes payable consist of notes payable issued by Digonex, which were recorded at fair value on June 16, 2014, the date that Emmis acquired a controlling interest in Digonex. The notes payable, some of which are secured by the assets of Digonex, are non-recourse to the rest of the Company and its subsidiaries. During the quarter ended August 31, 2017, Digonex noteholders agreed to extend the maturity date of the notes from December 31, 2017 to December 31, 2020. The notes accrue interest at 5.0% per annum with interest due at maturity. The face value of the notes payable is $6.2 million. The Company is accreting the difference between this face value and the original $3.6 million fair value of the notes payable recorded in the acquisition of its controlling interest of the business as interest expense over the remaining term of the notes payable. NextRadio, LLC has issued $4.0 million of notes payable. As of May 31, 2019, the notes accrue interest at 2.0%. The first interest payment on these notes was due on August 15, 2018. As of July 11, 2019, NextRadio, LLC has not made any interest payments to the lender. Although there are no penalties for nonpayment of interest, the lender, at its election, may convert the notes and all unpaid interest to senior preferred equity of NextRadio, LLC's parent entity, TagStation, LLC. The lender has given notice of its intent to convert the notes to senior preferred equity of TagStation, LLC, but the steps required to effect this conversion as defined in the loan agreement have not yet been completed. These notes are obligations of NextRadio, LLC and TagStation, LLC and are non-recourse to the rest of Emmis' subsidiaries. TagStation, LLC and Next Radio, LLC have never achieved profitability, with their losses having expanded in recent years as a result of investments in data attribution capabilities. During the year ended February 28, 2019, Emmis decided to cease further investments in TagStation, LLC and NextRadio, LLC. As a result, these businesses have reduced the scale of their operations to absolute minimum functionality, terminated the employment of all of their employees and are exploring strategic alternatives. Based on amounts outstanding at May 31, 2019, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below: 98.7FM Non-recourse Other Non-recourse Year ended February 28 (29), Mortgage Term Loan Debt Debt Total Payments Remainder of 2020 $ 286 $ 889 $ 5,431 $ — $ 6,606 2021 454 1,333 7,755 6,239 15,781 2022 484 1,333 8,394 4,000 14,211 2023 512 223 9,069 — 9,804 2024 541 — 9,783 — 10,324 Thereafter 20,614 — 5,181 — 25,795 Total $ 22,891 $ 3,778 $ 45,613 $ 10,239 $ 82,521 |
Liquidity and Going Concern
Liquidity and Going Concern | 3 Months Ended |
May 31, 2019 | |
Debt Disclosure [Abstract] | |
Liquidity and Going Concern |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
May 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 5. Fair Value Measurements As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Recurring Fair Value Measurements The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of February 28, 2019 and May 31, 2019. The financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. As of February 28, 2019 and May 31, 2019 Level 1 Level 2 Level 3 Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total (in 000's) Available for sale securities $ — $ — $ 800 $ 800 Total assets measured at fair value on a recurring basis $ — $ — $ 800 $ 800 Available for sale securities — Emmis’ available for sale securities are comprised of preferred stock of a private company that is not traded in active markets and is included in other assets, net in the accompanying condensed consolidated balance sheets. The investment is recorded at fair value, which was generally estimated using significant unobservable market parameters, resulting in a Level 3 categorization. The carrying value of our preferred stock investment was determined by using implied valuations of recent rounds of financing and by other corroborating evidence, which may include the application of various valuation methodologies including option-pricing and discounted cash flow based models. Non-Recurring Fair Value Measurements The Company has certain assets that are measured at fair value on a non-recurring basis under circumstances and events that include those described in Note 3, Intangible Assets and Goodwill, and are adjusted to fair value only when the carrying values are more than the fair values. The categorization of the framework used to price the assets is considered a Level 3 measurement due to the subjective nature of the unobservable inputs used to determine the fair value (see Note 3 for more discussion). Fair Value of Other Financial Instruments Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. Assets and liabilities acquired in business combinations are recorded at their fair value as of the date of acquisition. The estimated fair value of financial instruments is determined using the best available market information and appropriate valuation methodologies. Considerable judgment is necessary, however, in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange, or the value that ultimately will be realized upon maturity or disposition. The use of different market assumptions may have a material effect on the estimated fair value amounts. The following methods and assumptions were used to estimate the fair value of financial instruments: - Cash and cash equivalents - Long-term debt |
Revenue
Revenue | 3 Months Ended |
May 31, 2019 | |
Revenue [Abstract] | |
Revenue | Note 6. Revenue The Company generates revenue from the sale of services and products including, but not limited to: (i) on-air commercial broadcast time, (ii) magazine-related display advertising, (iii) magazine circulation and newsstand revenues, (iv) non-traditional revenues including event-related revenues and event sponsorship revenues, (v) revenues generated from LMAs and (vi) digital advertising. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue. Substantially all deferred revenue is recognized within twelve months of the payment date. We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Advertising On-air broadcast revenue and magazine display revenue are recognized when or as performance obligations under the terms of a contract with a customer are satisfied. This typically occurs over the period of time that advertisements are provided, or as an event occurs. Revenues are reported at the amount the Company expects to be entitled to receive under the contract. Payments received by advertisers before the performance obligation is satisfied are recorded as deferred revenue in the condensed consolidated balance sheet. Substantially all deferred revenue is recognized within twelve months of the payment date. Circulation Circulation revenue includes revenues for Indianapolis Monthly Nontraditional Nontraditional revenues principally consist of ticket sales and sponsorship of events our stations and magazine conduct in their local markets. These revenues are recognized when our performance obligations are fulfilled, which generally coincides with the occurrence of the related event. LMA Fees LMA fee revenue relates to fees that the Company collects from third parties in exchange for the right to program and sell advertising for a specified portion of a radio station's inventory of broadcast time. These revenues are generally recognized ratably over the duration that the third party programs the radio station. Digital Digital revenue relates to revenue generated from the sale of digital marketing services (including display advertisements and video sponsorships) to advertisers. Digital revenues are generally recognized as the digital advertising is delivered. Disaggregation of revenue The following table presents the Company's revenues disaggregated by revenue source: For the Three Months Ended May 31, 2018 2019 Revenue by Source: Advertising $ 18,775 $ 19,026 Circulation 102 97 Nontraditional 1,968 1,699 LMA Fees 3,302 2,583 Digital 1,200 2,026 Other 2,659 2,340 Total net revenues $ 28,006 $ 27,771 |
Segment Information
Segment Information | 3 Months Ended |
May 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Note 7. Segment Information T he Company’s operations are currently aligned into two business segments, Radio and Publishing. The Company combines the results of all other immaterial business activities in the “all other” category. Revenues of the “all other” category generally consist of revenues associated with dynamic pricing consulting services provided by Digonex. Our determination of reportable segments is consistent with the financial information regularly reviewed by the chief operating decision maker for purposes of evaluating performance, allocating resources, and planning and forecasting future periods. Corporate expenses are not allocated to reportable segments and are included in the “all other” category. The Company’s segments operate exclusively in the United States. The accounting policies as described in the summary of significant accounting policies included in the Company’s Annual Report filed on Form 10-K for the year ended February 28, 2019, and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments. Three Months Ended May 31, 2019 Radio Publishing All Other Consolidated Net revenues $ 26,385 $ 1,138 $ 248 $ 27,771 Station operating expenses excluding depreciation and amortization expense 18,148 1,126 503 19,777 Corporate expenses excluding depreciation and amortization expense — — 2,558 2,558 Depreciation and amortization 548 3 199 750 Operating income (loss) $ 7,689 $ 9 $ (3,012 ) $ 4,686 Three Months Ended May 31, 2018 Radio Publishing All Other Consolidated Net revenues $ 26,384 $ 1,273 $ 349 $ 28,006 Station operating expenses excluding depreciation and amortization expense 17,693 1,199 2,639 21,531 Corporate expenses excluding depreciation and amortization expense — — 2,508 2,508 Depreciation and amortization 570 5 224 799 (Gain) loss on sale of assets, net of disposition costs (32,398 ) 331 — (32,067 ) Operating income (loss) $ 40,519 $ (262 ) $ (5,022 ) $ 35,235 Total Assets Radio Publishing All Other Consolidated As of February 28, 2019 $ 216,473 $ 728 $ 20,545 $ 237,746 As of May 31, 2019 $ 242,460 $ 679 $ 16,733 $ 259,872 The increase in radio assets is mostly due to the operating lease right-of-use assets recorded in connection with the implementation of Accounting Standard Update 2016-02, Leases |
Regulatory, Legal and Other Mat
Regulatory, Legal and Other Matters | 3 Months Ended |
May 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Regulatory, Legal and Other Matters | Note 8. Regulatory, Legal and Other Matters Emmis is a party to various legal proceedings arising in the ordinary course of business. In the opinion of management of the Company, however, there are no legal proceedings pending against the Company that we believe are likely to have a material adverse effect on the Company. Emmis filed suit against Illinois National Insurance Company (“INIC”) in 2015 related to INIC’s decision to not cover Emmis’ defense costs under Emmis’ directors and officers insurance policy in a lawsuit related to the Company’s preferred stock in which Emmis was the defendant (the “Prior Litigation”). On March 21, 2018, Emmis was granted summary judgment entitling it to coverage of its defense costs in the Prior Litigation. On October 10, 2018, Emmis and INIC agreed that the amount of Emmis' damages are $3.5 million. On November 7, 2018, INIC appealed the District Court's summary judgment determination that the insurance policy covers Emmis' defense costs. On July 2, 2019, the United States Court of Appeals for the Seventh Circuit reversed the District Court’s decision. Emmis intends to seek a rehearing on the decision. Accordingly, Emmis cannot estimate the amount or timing of a recovery, if any. |
Income Taxes
Income Taxes | 3 Months Ended |
May 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9. Income Taxes Our effective income tax rate was 24% and 22% for the three-month periods ended May 31, 2018 and 2019, respectively. The Company estimates its effective tax rate for the year, which incorporates the reversal of a portion of the valuation allowance, and applies that rate to pre-tax income for the applicable period. This methodology is primarily responsible for the difference between the effective rate and statutory rate. |
Restructuring Reserve
Restructuring Reserve | 3 Months Ended |
May 31, 2019 | |
Restructuring Reserve [Abstract] | |
Restructuring Reserve | Note 10. Restructuring Reserve In connection with the sale of our St. Louis stations in April 2018, the Company originally recorded $1.2 million of restructuring charges related to the involuntary termination of employees and estimated cease-use costs related to our leased St. Louis office facility, net of estimated sublease rentals. This charge is included in the gain on sale of assets, net of disposition costs in the accompanying condensed consolidated financial statements for the three months ended May 31, 2018. During the three months ended November 30, 2018, the Company revised its estimate of cease-use costs related to our leased St. Louis office facility, which resulted in an additional charge of $0.2 million. The table below summarizes the activity related to our restructuring charge for the three-month periods ended May 31, 2018 and 2019. For the Three Months Ended May 31, 2018 2019 Restructuring charges and estimated lease cease-use costs, beginning balance $ — $ 1,099 Restructuring charges and estimated lease cease-use costs- St. Louis radio stations sale 1,178 — Payments, net of accretion (47 ) (66 ) Restructuring charges and estimated lease cease-use costs unpaid and outstanding $ 1,131 $ 1,033 . |
Leases
Leases | 3 Months Ended |
May 31, 2019 | |
Leases [Abstract] | |
Leases | Note 11. Leases We determine if an arrangement is a lease at inception. We have operating leases for office space, tower space, equipment and automobiles expiring at various dates through March 2032. Some leases have options to extend and some have options to terminate. Beginning March 1, 2019 operating leases are included in operating lease right-of-use assets, current operating lease liabilities, and noncurrent operating lease liabilities in our condensed consolidated balance sheet. Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate if it is readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain and there is a significant economic incentive to exercise that option. Operating lease expense for operating lease assets is recognized on a straight-line basis over the lease term. Variable lease payments, which represent lease payments that vary due to changes in facts or circumstances occurring after the commencement date other than the passage of time, are expensed in the period in which the obligation for these payments was incurred. Variable lease expense recognized in the three months ended May 31, 2019 was not material. We elected not to apply the recognition requirements of Accounting Standards Codification 842, Leases The impact of operating leases to our condensed consolidated financial statements was as follows: Three Months Ended May 31, 2019 Lease Cost Operating lease cost $ 1,198 Other Information Operating cash flows from operating leases 1,319 Right-of-use assets obtained in exchange for new operating lease liabilities 28,821 Weighted average remaining lease term - operating leases (in years) 8.6 Weighted average discount rate - operating leases 5.6 % As of May 31, 2019, the annual minimum lease payments of our operating lease liabilities were as follows: Year ending February 28 (29), Remainder of 2020 $ 3,878 2021 4,990 2022 4,921 2023 4,839 2024 3,449 After 2024 13,705 Total lease payments 35,782 Less imputed interest 8,018 Total recorded lease liabilities $ 27,764 |
Subsequent Events
Subsequent Events | 3 Months Ended |
May 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12. Subsequent Event Sale of Controlling Interest in Austin Radio Partnership On June 7, 2019, a subsidiary of Emmis entered into a Purchased Interest Agreement to sell its 50.1% ownership interest in Emmis Austin Radio Broadcasting Company, L.P. (the “Austin Partnership”) to our minority partner, Sinclair Telecable, Inc., for $39.3 million, subject to customary prorations and adjustments. Closing of the transaction is subject to customary closing conditions, as well as the consent of the FCC of the transfer of control of the Austin Partnership’s FCC licenses. The Austin Partnership exceeds the maximum number of FM stations one entity may own in the Austin market by one, which has been grandfathered by the FCC. For closing to occur, the FCC must grant a waiver for the Austin Partnership’s grandfathered status to pass to Sinclair Telecable, Inc. The Purchased Interest Agreement contains customary representations, warranties, covenants and indemnities. Proceeds, net of transaction-related expenses and estimated tax liabilities, are expected to be approximately $28 million, and will be used to repay debt outstanding and for general corporate purposes. Upon the closing of the sale, Emmis expects to recognize a gain on disposal in excess of $35 million. The Austin Partnership has historically been included in our Radio segment. The following table summarizes certain operating results of the Austin Partnership for all periods presented. Interest expense has not been allocated to the Austin Partnership in the table below as the Company cannot yet estimate the amount of required long-term debt repayments associated with the eventual sale of our partnership interest. For the Three Months Ended May 31, 2018 2019 Net revenues $ 8,009 $ 8,287 Station operating expenses, excluding depreciation and amortization expense 5,149 5,527 Depreciation and amortization 141 120 Operating income 2,719 2,640 Emmis determined that the Austin Partnership did not meet the requirements for held for sale classification as of May 31, 2019. As such, the assets and liabilities of the Austin Partnership have not been reclassified to held for sale as of any period presented in the accompanying condensed consolidated balance sheets. Major classes of assets, liabilities and equity of the Austin Partnership as of February 28, 2019 and May 31, 2019 are presented below: February 28, May 31, 2019 2019 Noncurrent assets: Property and equipment, net $ 5,060 $ 5,115 Intangible assets 39,058 39,058 Operating lease right-of use assets — 2,495 Total noncurrent assets $ 44,118 $ 46,668 Liabilities: Operating lease liabilities $ — $ 538 Operating lease liabilities, net of current portion — 2,265 Total liabilities $ — $ 2,803 Equity: Noncontrolling interest $ 47,147 $ 47,372 In addition, pursuant to the terms of the Purchased Interest Agreement, $4.3 million of the Austin Partnership’s net working capital, as defined in the Purchased interest Agreement, is included in the purchase price. Sale of WQHT-FM and WBLS-FM and Creation of Mediaco On June 28, 2019, Emmis entered into a Contribution and Distribution Agreement (the “Contribution Agreement”) with Mediaco Holding Inc., an Indiana corporation (“Mediaco”) and SG Broadcasting LLC, an affiliate of Standard General L.P., a New York-based investment firm that manages event-driven opportunity funds (“Standard General”), pursuant to which (i) Emmis will contribute the assets of its radio stations WQHT-FM and WBLS-FM, both in New York, NY (the “Stations”), in exchange for $91.5 million in cash, a $5.0 million note and 23.72% of the common stock of Mediaco, (ii) Standard General will purchase 76.28% of the common stock of Mediaco, and (iii) the common stock of Mediaco received by Emmis will be distributed pro rata in a taxable dividend to Emmis’ shareholders, making Mediaco a public company expected to be listed on Nasdaq. The common stock of Mediaco acquired by Standard General will be entitled to ten votes per share and the common stock acquired by Emmis and distributed to Emmis’ shareholders will be entitled to one vote per share. After closing, Emmis will continue to provide management services to the Stations under a Management Agreement, subject to the direction of the Mediaco board of directors which will initially consist of four directors appointed by Standard General and three directors appointed by Emmis. Emmis will receive an annual management fee of $1.25 million, plus reimbursement of certain expenses directly related to the operation of Mediaco’s business. Closing of the transaction is subject to customary closing conditions, including the consent of the FCC to the transfer of control of the Stations’ FCC licenses and the completion by the Securities and Exchange Commission of a review of the Form 10 to be filed for the distribution of the Mediaco common stock to Emmis shareholders. The Contribution Agreement contains customary representations, warranties, covenants and indemnities. Cash proceeds (includes working capital but excludes the $5.0 million note), net of transaction-related expenses and estimated tax liabilities, are expected to be approximately $90 million, and will be used by Emmis to repay debt outstanding and for general corporate purposes. Upon the closing of the transaction, Emmis expects to recognize a gain in excess of $40 million. The Stations have historically been included in our Radio segment. The following table summarizes certain operating results of the Stations for all periods presented. Interest expense has not been allocated to the Stations in the table below as the Company cannot yet estimate the amount of required long-term debt repayments associated with the eventual sale of the Stations. For the Three Months Ended May 31, 2018 2019 Net revenues $ 9,315 $ 9,838 Station operating expenses, excluding depreciation and amortization expense 5,705 6,568 Depreciation and amortization 292 323 Operating income 3,318 2,947 Emmis determined that Stations did not meet the requirements for held for sale classification as of May 31, 2019. As such, the assets and liabilities of the Stations have not been reclassified to held for sale as of any period presented in the accompanying condensed consolidated balance sheets. Major classes of assets and liabilities of the Stations as of February 28, 2019 and May 31, 2019 are presented below: February 28, May 31, 2019 2019 Noncurrent assets: Property and equipment, net $ 2,460 $ 2,238 Intangible assets 64,025 63,951 Operating lease right-of use assets — 12,267 Total noncurrent assets $ 66,485 $ 78,456 Liabilities: Operating lease liabilities $ — $ 2,271 Operating lease liabilities, net of current portion — 12,053 Total liabilities $ — $ 14,324 Amendment to Credit Agreement On June 28, 2019, Emmis entered into Consent and Amendment No. 1 to Credit Agreement and Amendment No. 1 to Guaranty and Security Agreement with Wells Fargo Bank, National Association, which allowed Emmis to enter into the Contribution Agreement and removed certain bank accounts from a schedule to the Guaranty and Security Agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Preparation of Interim Financial Statements | Preparation of Interim Financial Statements Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), the condensed consolidated interim financial statements included herein have been prepared, without audit, by Emmis Communications Corporation (“ECC”) and its subsidiaries (collectively, “our,” “us,” “we,” “Emmis” or the “Company”). As permitted under the applicable rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, Emmis believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report for Emmis filed on Form 10-K for the year ended February 28, 2019. The Company’s results are subject to seasonal fluctuations. Therefore, results shown on an interim basis are not necessarily indicative of results for a full year. In the opinion of Emmis, the accompanying condensed consolidated interim financial statements contain all material adjustments (consisting only of normal recurring adjustments, except as otherwise noted) necessary to present fairly the consolidated financial position of Emmis at May 31, 2019, the results of its operations for the three-month periods ended May 31, 2018 and 2019, and cash flows for the three-month periods ended May 31, 2018 and 2019. There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended February 28, 2019 that have had a material impact on our condensed consolidated financial statements and related notes. |
Basic and Diluted Net Income (Loss) Per Common Share | Basic and Diluted Net Income Per Common Share Basic net income per common share is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Potentially dilutive securities at May 31, 2018 and 2019 consisted of stock options and restricted stock awards. The following table sets forth the calculation of basic and diluted net income per share: For the Three Months Ended May 31, 2018 2019 Net Income Shares Net Income Per Share Net Income Shares Net Income Per Share (amounts in 000’s, except per share data) Basic net income per common share: Net income available to common shareholders $ 23,485 12,483 $ 1.88 $ 1,670 12,773 $ 0.13 Impact of equity awards — 928 — — 520 — Diluted net income per common share: Net income available to common shareholders $ 23,485 13,411 $ 1.75 $ 1,670 13,293 $ 0.13 Shares excluded from the calculation as the effect of their conversion into shares of our common stock would be antidilutive were as follows: For the Three Months Ended May 31, 2018 2019 (shares in 000’s ) Equity awards 849 1,588 Antidilutive common share equivalents 849 1,588 |
Local Programming and Marketing Agreement Fees | Local Programming and Marketing Agreement Fees The Company from time to time enters into local programming and marketing agreements (“LMAs”), often pending regulatory approval of transfer of the Federal Communications Commission ("FCC") licenses in connection with acquisitions or dispositions of radio stations. Under the terms of these agreements, the acquiring company makes specified periodic payments to the holder of the FCC license in exchange for the right to program and sell advertising for a specified portion of the station’s inventory of broadcast time. The acquiring company records revenues and expenses associated with the portion of the station’s inventory of broadcast time it manages. Nevertheless, as the holder of the FCC license, the owner-operator retains control and responsibility for the operation of the station, including responsibility over all programming broadcast on the station. On April 30, 2018, Emmis closed on the sale of substantially all of its radio station assets in St. Louis. The St. Louis stations were operated pursuant to LMAs from March 1, 2018 through April 30, 2018. The buyers of the stations paid LMA fees totaling $0.7 million during the period, which was recognized as a component of net revenues in the accompanying condensed consolidated statements of operations for the three-month period ending May 31, 2018. On April 26, 2012, Emmis entered into an LMA with a subsidiary of Disney Enterprises, Inc. for 98.7FM in New York (formerly WRKS-FM and now WEPN-FM, hereinafter referred to as “98.7FM”). The LMA for this station started on April 30, 2012 and will continue until August 31, 2024. Emmis retains ownership and control of the station, including the related FCC license during the term of the LMA and is scheduled to receive an annual fee until the LMA’s termination. LMA fee revenue is recorded on a straight-line basis over the term of the LMA as a component of net revenues in our accompanying condensed consolidated statements of operations. The following table summarizes certain operating results of 98.7FM for all periods presented. Net revenues for 98.7FM are solely related to LMA fees. 98.7FM is a part of our radio segment. For the Three Months Ended May 31, 2018 2019 Net revenues $ 2,583 $ 2,583 Station operating expenses, excluding depreciation and amortization expense 297 350 Interest expense 609 540 Assets and liabilities of 98.7FM as of February 28, 2019 and May 31, 2019 were as follows: As of February 28, 2019 As of May 31, 2019 Current assets: Restricted cash $ 1,504 $ 1,149 Prepaid expenses 394 380 Other current assets 340 432 Total current assets 2,238 1,961 Noncurrent assets: Property and equipment, net 188 183 Indefinite lived intangibles 46,390 46,390 Deposits and other 6,255 6,124 Total noncurrent assets 52,833 52,697 Total assets $ 55,071 $ 54,658 Current liabilities: Accounts payable and accrued expenses $ 15 $ 15 Current maturities of long-term debt 7,150 7,297 Deferred revenue 864 894 Other current liabilities 162 156 Total current liabilities 8,191 8,362 Noncurrent liabilities: Long-term debt, net of current portion and unamortized debt discount 38,747 36,947 Total noncurrent liabilities 38,747 36,947 Total liabilities $ 46,938 $ 45,309 |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the same amounts shown in the condensed consolidated statements of cash flows. As of February 28, 2019 As of May 31, 2019 Cash and cash equivalents $ 5,438 $ 2,760 Restricted cash: 98.7FM LMA restricted cash 1,504 1,149 Cash used to secure the Company's purchasing card and travel and expense program 1,000 225 Total cash, cash equivalents and restricted cash $ 7,942 $ 4,134 As of February 28, 2019 and May 31, 2019, restricted cash relates to cash on deposit in trust accounts related to our 98.7FM LMA in New York City that services long-term debt and cash held by JPMorgan Chase as collateral to secure the Company’s corporate purchasing card and travel and expense program. |
Noncontrolling Interests | Noncontrolling Interests The Company follows Accounting Standards Codification paragraph 810-10-65-1 to report the noncontrolling interests related to our Austin radio partnership and Digonex Technologies Inc., a dynamic pricing business (hereinafter "Digonex"). We have a 50.1% controlling interest in our Austin radio partnership. We do not own any of the common equity of Digonex, but we consolidate the entity because we control its board of directors via rights granted in convertible preferred stock and convertible debt that we own. As of May 31, 2019, Emmis owns rights that are convertible into approximately 84% of Digonex's common equity. Noncontrolling interests represent the noncontrolling interest holders' proportionate share of the equity of the Austin radio partnership and Digonex. Noncontrolling interests are adjusted for the noncontrolling interest holders' proportionate share of the earnings or losses of the applicable entity. The noncontrolling interest continues to be attributed its share of losses even if that attribution results in a deficit noncontrolling interest balance. Below is a summary of the noncontrolling interest activity for the three months ended May 31, 2018 and 2019: Austin radio partnership Digonex Total noncontrolling interests Balance, February 28, 2018 $ 47,424 $ (16,744 ) $ 30,680 Net income (loss) 1,372 (618 ) 754 Distributions to noncontrolling interests (1,721 ) — (1,721 ) Balance, May 31, 2018 $ 47,075 $ (17,362 ) $ 29,713 Balance, February 28, 2019 $ 47,146 $ (18,993 ) $ 28,153 Net income (loss) 1,347 (501 ) 846 Distributions to noncontrolling interests (1,121 ) — (1,121 ) Balance, May 31, 2019 $ 47,372 $ (19,494 ) $ 27,878 |
Implementation of Recent Accounting Pronouncements | Implementation of Recent Accounting Pronouncements On March 1, 2019, we adopted Accounting Standard Update 2016-02, Leases |
Recent Accounting Pronouncements Not Yet Implemented | Recent Accounting Pronouncements Not Yet Implemented In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Calculation of Basic and Diluted Net Income (loss) Per Share from Continuing Operations | The following table sets forth the calculation of basic and diluted net income per share: For the Three Months Ended May 31, 2018 2019 Net Income Shares Net Income Per Share Net Income Shares Net Income Per Share (amounts in 000’s, except per share data) Basic net income per common share: Net income available to common shareholders $ 23,485 12,483 $ 1.88 $ 1,670 12,773 $ 0.13 Impact of equity awards — 928 — — 520 — Diluted net income per common share: Net income available to common shareholders $ 23,485 13,411 $ 1.75 $ 1,670 13,293 $ 0.13 |
Shares Excluded from Calculation as Effect of Conversion into Shares of Common Stock would be Antidilutive | Shares excluded from the calculation as the effect of their conversion into shares of our common stock would be antidilutive were as follows: For the Three Months Ended May 31, 2018 2019 (shares in 000’s ) Equity awards 849 1,588 Antidilutive common share equivalents 849 1,588 |
Schedule of Operating Results From Local Programming and Marketing Agreements | The following table summarizes certain operating results of 98.7FM for all periods presented. Net revenues for 98.7FM are solely related to LMA fees. 98.7FM is a part of our radio segment. For the Three Months Ended May 31, 2018 2019 Net revenues $ 2,583 $ 2,583 Station operating expenses, excluding depreciation and amortization expense 297 350 Interest expense 609 540 |
Schedule of Assets and Liabilities of Local Programming and Marketing Agreements | Assets and liabilities of 98.7FM as of February 28, 2019 and May 31, 2019 were as follows: As of February 28, 2019 As of May 31, 2019 Current assets: Restricted cash $ 1,504 $ 1,149 Prepaid expenses 394 380 Other current assets 340 432 Total current assets 2,238 1,961 Noncurrent assets: Property and equipment, net 188 183 Indefinite lived intangibles 46,390 46,390 Deposits and other 6,255 6,124 Total noncurrent assets 52,833 52,697 Total assets $ 55,071 $ 54,658 Current liabilities: Accounts payable and accrued expenses $ 15 $ 15 Current maturities of long-term debt 7,150 7,297 Deferred revenue 864 894 Other current liabilities 162 156 Total current liabilities 8,191 8,362 Noncurrent liabilities: Long-term debt, net of current portion and unamortized debt discount 38,747 36,947 Total noncurrent liabilities 38,747 36,947 Total liabilities $ 46,938 $ 45,309 |
Summary of Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the same amounts shown in the condensed consolidated statements of cash flows. As of February 28, 2019 As of May 31, 2019 Cash and cash equivalents $ 5,438 $ 2,760 Restricted cash: 98.7FM LMA restricted cash 1,504 1,149 Cash used to secure the Company's purchasing card and travel and expense program 1,000 225 Total cash, cash equivalents and restricted cash $ 7,942 $ 4,134 |
Summary of Noncontrolling Interest Activity | Below is a summary of the noncontrolling interest activity for the three months ended May 31, 2018 and 2019: Austin radio partnership Digonex Total noncontrolling interests Balance, February 28, 2018 $ 47,424 $ (16,744 ) $ 30,680 Net income (loss) 1,372 (618 ) 754 Distributions to noncontrolling interests (1,721 ) — (1,721 ) Balance, May 31, 2018 $ 47,075 $ (17,362 ) $ 29,713 Balance, February 28, 2019 $ 47,146 $ (18,993 ) $ 28,153 Net income (loss) 1,347 (501 ) 846 Distributions to noncontrolling interests (1,121 ) — (1,121 ) Balance, May 31, 2019 $ 47,372 $ (19,494 ) $ 27,878 |
Share Based Payments (Tables)
Share Based Payments (Tables) | 3 Months Ended |
May 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Assumptions used to Calculate Fair Value of Options on Date of Grant | The following assumptions were used to calculate the fair value of the Company’s options on the date of grant during the three months ended May 31, 2018 and 2019: Three Months Ended May 31, 2018 2019 Risk-Free Interest Rate: 2.6% 2.5% - 2.6% Expected Dividend Yield: 0% 0% Expected Life (Years): 4.8 4.6 Expected Volatility: 53.2% 50.3% - 50.4% |
Summary of Stock Options Outstanding and Activity | The following table presents a summary of the Company’s stock options outstanding at May 31, 2019, and stock option activity during the three months ended May 31, 2019 (“Price” reflects the weighted average exercise price per share; "Aggregate Intrinsic Value" dollars in thousands): Options Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding, beginning of period 2,738,087 $ 4.72 Granted 224,500 3.71 Exercised 16,829 1.39 Forfeited — — Expired 10,375 3.75 Outstanding, end of period 2,935,383 4.67 6.1 $ 1,371 Exercisable, end of period 2,248,708 4.97 5.2 $ 1,165 |
Summary of Nonvested Options and Changes | A summary of the Company’s nonvested options at May 31, 2019, and changes during the three months ended May 31, 2019, is presented below: Options Weighted Average Grant Date Fair Value Nonvested, beginning of period 608,175 $ 1.64 Granted 224,500 1.65 Vested 146,000 1.32 Forfeited — — Nonvested, end of period 686,675 1.71 |
Summary of Restricted Stock Grants Outstanding and Activity | The following table presents a summary of the Company’s restricted stock grants outstanding at May 31, 2019, and restricted stock activity during the three months ended May 31, 2019 (“Price” reflects the weighted average share price at the date of grant): Awards Price Grants outstanding, beginning of period 265,107 $ 3.43 Granted 113,548 3.68 Vested (restriction lapsed) 44,548 3.34 Grants outstanding, end of period 334,107 3.53 |
Stock-Based Compensation Expense and Related Tax Benefits Recognized | The following table summarizes stock-based compensation expense recognized by the Company during the three months ended May 31, 2018 and 2019. The Company did not recognize any tax benefits related to stock-based compensation during the periods presented below. Three Months Ended May 31, 2018 2019 Station operating expenses $ 71 $ 65 Corporate expenses 392 330 Stock-based compensation expense included in operating expenses $ 463 $ 395 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 3 Months Ended |
May 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following table presents the weighted-average useful life at May 31, 2019, and the gross carrying amount and accumulated amortization for our sole definite-lived intangible asset at February 28, 2019 and May 31, 2019: As of February 28, 2019 As of May 31, 2019 (in 000's, except years) Weighted Average Remaining Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Programming agreement 2.3 $ 2,154 $ 1,396 $ 758 $ 2,154 $ 1,468 $ 686 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table presents the Company's estimate of future amortization expense for definite-lived intangibles: Year ended February 28 (29), Expected Amortization Expense Remainder of 2020 $ 221 2021 294 2022 171 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
May 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt was comprised of the following at February 28, 2019 and May 31, 2019: February 28, 2019 May 31, 2019 2014 Credit Agreement Term Loan $ 25,000 $ — Mortgage — 22,891 Term Loan — 3,778 98.7FM non-recourse debt 47,332 45,613 Other non-recourse debt (1) 10,074 10,095 Less: Current maturities (32,150 ) (8,922 ) Less: Unamortized original issue discount (1,499 ) (1,977 ) Total long-term debt, net of current portion and debt discount $ 48,757 $ 71,478 (1) The face value of other non-recourse debt was $10.2 million at February 28, 2019 and May 31, 2019 |
Schedule of Maturities of Long-term Debt | Based on amounts outstanding at May 31, 2019, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below: 98.7FM Non-recourse Other Non-recourse Year ended February 28 (29), Mortgage Term Loan Debt Debt Total Payments Remainder of 2020 $ 286 $ 889 $ 5,431 $ — $ 6,606 2021 454 1,333 7,755 6,239 15,781 2022 484 1,333 8,394 4,000 14,211 2023 512 223 9,069 — 9,804 2024 541 — 9,783 — 10,324 Thereafter 20,614 — 5,181 — 25,795 Total $ 22,891 $ 3,778 $ 45,613 $ 10,239 $ 82,521 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
May 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Accounted for at Fair Value on Recurring Basis | The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. As of February 28, 2019 and May 31, 2019 Level 1 Level 2 Level 3 Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs Total (in 000's) Available for sale securities $ — $ — $ 800 $ 800 Total assets measured at fair value on a recurring basis $ — $ — $ 800 $ 800 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
May 31, 2019 | |
Revenue [Abstract] | |
Disaggregation of Revenue | The following table presents the Company's revenues disaggregated by revenue source: For the Three Months Ended May 31, 2018 2019 Revenue by Source: Advertising $ 18,775 $ 19,026 Circulation 102 97 Nontraditional 1,968 1,699 LMA Fees 3,302 2,583 Digital 1,200 2,026 Other 2,659 2,340 Total net revenues $ 28,006 $ 27,771 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
May 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Results of Operations of Business Segments | The accounting policies as described in the summary of significant accounting policies included in the Company’s Annual Report filed on Form 10-K for the year ended February 28, 2019, and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments. Three Months Ended May 31, 2019 Radio Publishing All Other Consolidated Net revenues $ 26,385 $ 1,138 $ 248 $ 27,771 Station operating expenses excluding depreciation and amortization expense 18,148 1,126 503 19,777 Corporate expenses excluding depreciation and amortization expense — — 2,558 2,558 Depreciation and amortization 548 3 199 750 Operating income (loss) $ 7,689 $ 9 $ (3,012 ) $ 4,686 Three Months Ended May 31, 2018 Radio Publishing All Other Consolidated Net revenues $ 26,384 $ 1,273 $ 349 $ 28,006 Station operating expenses excluding depreciation and amortization expense 17,693 1,199 2,639 21,531 Corporate expenses excluding depreciation and amortization expense — — 2,508 2,508 Depreciation and amortization 570 5 224 799 (Gain) loss on sale of assets, net of disposition costs (32,398 ) 331 — (32,067 ) Operating income (loss) $ 40,519 $ (262 ) $ (5,022 ) $ 35,235 Total Assets Radio Publishing All Other Consolidated As of February 28, 2019 $ 216,473 $ 728 $ 20,545 $ 237,746 As of May 31, 2019 $ 242,460 $ 679 $ 16,733 $ 259,872 |
Restructuring Reserve (Tables)
Restructuring Reserve (Tables) | 3 Months Ended |
May 31, 2019 | |
Restructuring Reserve [Abstract] | |
Schedule Of Restructuring Reserve By Type Of Cost | The table below summarizes the activity related to our restructuring charge for the three-month periods ended May 31, 2018 and 2019. For the Three Months Ended May 31, 2018 2019 Restructuring charges and estimated lease cease-use costs, beginning balance $ — $ 1,099 Restructuring charges and estimated lease cease-use costs- St. Louis radio stations sale 1,178 — Payments, net of accretion (47 ) (66 ) Restructuring charges and estimated lease cease-use costs unpaid and outstanding $ 1,131 $ 1,033 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
May 31, 2019 | |
Leases [Abstract] | |
Summary of Impact of Operating Lease | The impact of operating leases to our condensed consolidated financial statements was as follows: Three Months Ended May 31, 2019 Lease Cost Operating lease cost $ 1,198 Other Information Operating cash flows from operating leases 1,319 Right-of-use assets obtained in exchange for new operating lease liabilities 28,821 Weighted average remaining lease term - operating leases (in years) 8.6 Weighted average discount rate - operating leases 5.6 % |
Summary of Annual Minimum Lease Payments of Operating Lease Liabilities | As of May 31, 2019, the annual minimum lease payments of our operating lease liabilities were as follows: Year ending February 28 (29), Remainder of 2020 $ 3,878 2021 4,990 2022 4,921 2023 4,839 2024 3,449 After 2024 13,705 Total lease payments 35,782 Less imputed interest 8,018 Total recorded lease liabilities $ 27,764 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 3 Months Ended |
May 31, 2019 | |
Austin Partnership | |
Subsequent Event [Line Items] | |
Results of Operations of Disposal Groups | The following table summarizes certain operating results of the Austin Partnership for all periods presented. Interest expense has not been allocated to the Austin Partnership in the table below as the Company cannot yet estimate the amount of required long-term debt repayments associated with the eventual sale of our partnership interest. For the Three Months Ended May 31, 2018 2019 Net revenues $ 8,009 $ 8,287 Station operating expenses, excluding depreciation and amortization expense 5,149 5,527 Depreciation and amortization 141 120 Operating income 2,719 2,640 |
Schedule of Major Classes of Assets, Liabilities and Equity | Emmis determined that the Austin Partnership did not meet the requirements for held for sale classification as of May 31, 2019. As such, the assets and liabilities of the Austin Partnership have not been reclassified to held for sale as of any period presented in the accompanying condensed consolidated balance sheets. Major classes of assets, liabilities and equity of the Austin Partnership as of February 28, 2019 and May 31, 2019 are presented below: February 28, May 31, 2019 2019 Noncurrent assets: Property and equipment, net $ 5,060 $ 5,115 Intangible assets 39,058 39,058 Operating lease right-of use assets — 2,495 Total noncurrent assets $ 44,118 $ 46,668 Liabilities: Operating lease liabilities $ — $ 538 Operating lease liabilities, net of current portion — 2,265 Total liabilities $ — $ 2,803 Equity: Noncontrolling interest $ 47,147 $ 47,372 |
Stations | |
Subsequent Event [Line Items] | |
Results of Operations of Disposal Groups | The following table summarizes certain operating results of the Stations for all periods presented. Interest expense has not been allocated to the Stations in the table below as the Company cannot yet estimate the amount of required long-term debt repayments associated with the eventual sale of the Stations. For the Three Months Ended May 31, 2018 2019 Net revenues $ 9,315 $ 9,838 Station operating expenses, excluding depreciation and amortization expense 5,705 6,568 Depreciation and amortization 292 323 Operating income 3,318 2,947 |
Schedule of Major Classes of Assets and Liabilities | Emmis determined that Stations did not meet the requirements for held for sale classification as of May 31, 2019. As such, the assets and liabilities of the Stations have not been reclassified to held for sale as of any period presented in the accompanying condensed consolidated balance sheets. Major classes of assets and liabilities of the Stations as of February 28, 2019 and May 31, 2019 are presented below: February 28, May 31, 2019 2019 Noncurrent assets: Property and equipment, net $ 2,460 $ 2,238 Intangible assets 64,025 63,951 Operating lease right-of use assets — 12,267 Total noncurrent assets $ 66,485 $ 78,456 Liabilities: Operating lease liabilities $ — $ 2,271 Operating lease liabilities, net of current portion — 12,053 Total liabilities $ — $ 14,324 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Calculation of Basic and Diluted Net Income (loss) Per Share from Continuing Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Basic net income (loss) per common share: | ||
Net income (loss) available to common shareholders | $ 1,670 | $ 23,485 |
Impact of equity awards (in shares) | 520 | 928 |
Diluted net income (loss) per common share: | ||
Net income (loss) available to common shareholders | $ 1,670 | $ 23,485 |
Basic shares: | ||
Basic weighted average common shares outstanding (in shares) | 12,773 | 12,483 |
Diluted shares: | ||
Diluted weighted average common shares outstanding (in shares) | 13,293 | 13,411 |
Basic net income (loss) per common share: | ||
Basic net income (loss) per common share (in dollars per share) | $ 0.13 | $ 1.88 |
Diluted net income (loss) per common share: | ||
Diluted net income (loss) per common share (in dollars per share) | $ 0.13 | $ 1.75 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Shares Excluded from Calculation as Effect of Conversion into Shares of Common Stock would be Antidilutive (Details) - shares | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive common share equivalents | 1,588 | 849 |
Equity awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive common share equivalents | 1,588 | 849 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 31, 2019 | May 31, 2018 | Mar. 01, 2019 | |
Noncontrolling Interest [Line Items] | |||
LMA fees | $ 700 | ||
Operating lease liabilities | $ 24,077 | $ 28,800 | |
Austin Radio Partnership | |||
Noncontrolling Interest [Line Items] | |||
Percentage Of Controlling Interest | 50.10% | ||
Digonex Technologies Inc | |||
Noncontrolling Interest [Line Items] | |||
Percentage Of Controlling Interest | 84.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Operating Results From Local Programming and Marketing Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Segment Reporting Information [Line Items] | ||
NET REVENUES | $ 27,771 | $ 28,006 |
Station operating expenses excluding depreciation and amortization expense | 19,777 | 21,531 |
Interest expense | 1,481 | 2,641 |
98.7 FM | ||
Segment Reporting Information [Line Items] | ||
NET REVENUES | 2,583 | 2,583 |
Station operating expenses excluding depreciation and amortization expense | 350 | 297 |
Interest expense | $ 540 | $ 609 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Assets and Liabilities of Local Programming and Marketing Agreement Fees (Details) - USD ($) $ in Thousands | May 31, 2019 | Feb. 28, 2019 |
Segment Reporting Information [Line Items] | ||
Prepaid expenses | $ 4,968 | $ 3,831 |
Other current assets | 1,428 | 1,446 |
Total current assets | 28,742 | 29,994 |
Property and equipment, net | 23,043 | 23,477 |
Indefinite-lived intangibles | 170,547 | 170,547 |
Total assets | 259,872 | 237,746 |
Other current liabilities | 1,637 | 2,922 |
Total current liabilities | 34,154 | 57,366 |
Long-term debt, net of current portion and unamortized debt discount | 71,478 | 48,757 |
Total liabilities | 157,774 | 137,379 |
98.7 FM | ||
Segment Reporting Information [Line Items] | ||
Restricted cash | 1,149 | 1,504 |
Prepaid expenses | 380 | 394 |
Other current assets | 432 | 340 |
Total current assets | 1,961 | 2,238 |
Property and equipment, net | 183 | 188 |
Indefinite-lived intangibles | 46,390 | 46,390 |
Deposits and other | 6,124 | 6,255 |
Total noncurrent assets | 52,697 | 52,833 |
Total assets | 54,658 | 55,071 |
Accounts payable and accrued expenses | 15 | 15 |
Current maturities of long-term debt | 7,297 | 7,150 |
Deferred revenue | 894 | 864 |
Other current liabilities | 156 | 162 |
Total current liabilities | 8,362 | 8,191 |
Long-term debt, net of current portion and unamortized debt discount | 36,947 | 38,747 |
Total noncurrent liabilities | 36,947 | 38,747 |
Total liabilities | $ 45,309 | $ 46,938 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Summary of Restricted Cash (Details) - USD ($) $ in Thousands | May 31, 2019 | Feb. 28, 2019 | May 31, 2018 | Feb. 28, 2018 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | $ 2,760 | $ 5,438 | ||
Total cash, cash equivalents and restricted cash | 4,134 | 7,942 | $ 11,576 | $ 6,115 |
98.7FM LMA Restricted Cash | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Total restricted cash | 1,149 | 1,504 | ||
Cash Used To Secure The Company's Purchasing Card And Travel And Expense Programs | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Total restricted cash | $ 225 | $ 1,000 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Noncontrolling Interest [Line Items] | ||
Beginning balance | $ 28,153 | $ 30,680 |
Net Income (Loss) Attributable to Noncontrolling Interest | 846 | 754 |
Distributions to noncontrolling interests | (1,121) | (1,721) |
Ending balance | 27,878 | 29,713 |
Austin Radio Partnership | ||
Noncontrolling Interest [Line Items] | ||
Beginning balance | 47,146 | 47,424 |
Net Income (Loss) Attributable to Noncontrolling Interest | 1,347 | 1,372 |
Distributions to noncontrolling interests | (1,121) | (1,721) |
Ending balance | 47,372 | 47,075 |
Digonex [Member] | ||
Noncontrolling Interest [Line Items] | ||
Beginning balance | (18,993) | (16,744) |
Net Income (Loss) Attributable to Noncontrolling Interest | (501) | (618) |
Ending balance | $ (19,494) | $ (17,362) |
Share Based Payments - Addition
Share Based Payments - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options granted, term | 10 years | |
Stock options vesting period | 3 years | |
Annual percentage over three years | 33.33% | |
Proceeds from the exercise of stock options | $ 23 | $ 119 |
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options | $ 0 | $ 0 |
Stock options weighted average grant date fair value | $ 1.65 | $ 2.03 |
Shares available for future grants | 1.7 | |
Restricted stock awards requisite service period | 3 years | |
Grant date fair value of shares vested | $ 100 | $ 200 |
Unrecognized compensation cost | $ 1,300 | |
Compensation cost of weighted average period | 1 year 8 months 12 days | |
Two Thousand Sixteen Equity Compensation Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for future grants | 1.4 | |
Other Compensation Plans | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for future grants | 0.3 | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Proceeds from the exercise of stock options | $ 100 | |
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options | $ 0 | |
Vesting dates of outstanding options | 2022-03 | |
Expiration dates of options | 2029-03 | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting dates of outstanding options | 2019-07 | |
Expiration dates of options | 2019-07 |
Share Based Payments Assumption
Share Based Payments Assumptions Used to Calculate Fair Value of Options on Date of Grant (Details) | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Dividend Yield: | 0.00% | 0.00% |
Expected Life (Years): | 4 years 10 months 24 days | 4 years 4 months 24 days |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-Free Interest Rate: | 2.50% | 2.60% |
Expected Volatility: | 50.30% | 53.20% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-Free Interest Rate: | 2.60% | |
Expected Volatility: | 50.40% |
Share Based Payments Summary of
Share Based Payments Summary of Stock Options Outstanding and Activity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
May 31, 2019USD ($)$ / sharesshares | |
Options | |
Outstanding, beginning of period | shares | 2,738,087 |
Granted | shares | 224,500 |
Exercised | shares | 16,829 |
Expired | shares | 10,375 |
Outstanding, end of period | shares | 2,935,383 |
Exercisable, end of period | shares | 2,248,708 |
Price | |
Outstanding, beginning of period | $ / shares | $ 4.72 |
Granted | $ / shares | 3.71 |
Exercised | $ / shares | 1.39 |
Expired | $ / shares | 3.75 |
Outstanding, end of period | $ / shares | 4.67 |
Exercisable, end of period | $ / shares | $ 4.97 |
Outstanding, end of period | $ | $ 1,371 |
Exercisable, end of period | $ | $ 1,165 |
Outstanding, end of period | 6 years 2 months 12 days |
Exercisable, end of period | 5 years 4 months 24 days |
Share Based Payments Summary _2
Share Based Payments Summary of Nonvested Options and Changes (Details) - $ / shares | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Options | ||
Nonvested, beginning of period | 608,175 | |
Granted | 224,500 | |
Vested | 146,000 | |
Nonvested, end of period | 686,675 | |
Weighted Average Grant Date Fair Value | ||
Nonvested, beginning of period | $ 1.64 | |
Granted | $ 1.65 | $ 2.03 |
Vested | 1.32 | |
Nonvested, end of period | $ 1.71 |
Share Based Payments Summary _3
Share Based Payments Summary of Restricted Stock Grants Outstanding and Activity (Details) - Restricted Stock | 3 Months Ended |
May 31, 2019$ / sharesshares | |
Awards | |
Grants outstanding, beginning of period | shares | 265,107 |
Granted | shares | 113,548 |
Vested (restriction lapsed) | shares | 44,548 |
Grants outstanding, end of period | shares | 334,107 |
Price | |
Grants outstanding, beginning of period | $ / shares | $ 3.43 |
Granted | $ / shares | 3.68 |
Vested (restriction lapsed) | $ / shares | 3.34 |
Grants outstanding, end of period | $ / shares | $ 3.53 |
Share Based Payments Stock-Base
Share Based Payments Stock-Based Compensation Expense and Related Tax Benefits Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 395 | $ 463 |
Station operating expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | 65 | 71 |
Corporate expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 330 | $ 392 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 31, 2019 | May 31, 2018 | Feb. 28, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Indefinite-lived intangible assets | $ 170,547 | $ 170,547 | |
Goodwill | 4,338 | $ 4,338 | |
Amortization of intangible assets | $ 100 | $ 100 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2019 | Feb. 28, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Amount | $ 686 | $ 758 |
Contract-Based Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 2 years 3 months 18 days | |
Gross Carrying Amount | $ 2,154 | 2,154 |
Accumulated Amortization | 1,468 | 1,396 |
Net Carrying Amount | $ 686 | $ 758 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands | Feb. 28, 2019USD ($) |
Estimate of amortization expense related to intangible assets: | |
Remainder of 2020 | $ 221 |
2021 | 294 |
2022 | $ 171 |
Long-term Debt - Schedule of Lo
Long-term Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands | May 31, 2019 | Feb. 28, 2019 |
Debt Instrument | ||
Less: Current maturities | $ (8,922) | $ (32,150) |
Less: Unamortized original issue discount | (1,977) | (1,499) |
Total long-term debt, net of current portion and debt discount | 71,478 | 48,757 |
Mortgage | ||
Debt Instrument | ||
Secured debt | 22,891 | |
Two Thousand Fourteen Credit Agreement | ||
Debt Instrument | ||
Secured debt | 25,000 | |
98.7FM Non-recourse Debt | ||
Debt Instrument | ||
Non-recourse debt | 45,613 | 47,332 |
Other Non-recourse Debt | ||
Debt Instrument | ||
Non-recourse debt | 10,095 | $ 10,074 |
Term Loan | ||
Debt Instrument | ||
Secured debt | $ 3,778 |
Long-term Debt - Schedule of _2
Long-term Debt - Schedule of Long-term Debt Instruments (Parenthetical) (Details) - USD ($) | May 31, 2019 | Feb. 28, 2019 |
Debt Disclosure [Abstract] | ||
Face amount of debt | $ 10,200,000 | $ 10,200,000 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Details) | Apr. 12, 2019USD ($)aAgreementStation | May 31, 2019USD ($) | May 31, 2018USD ($) | Feb. 28, 2019USD ($) | Jun. 16, 2014USD ($) | May 30, 2012USD ($) |
Debt Instrument | ||||||
Number of loan agreement | Agreement | 3 | |||||
Face amount of debt | $ 10,200,000 | $ 10,200,000 | ||||
Payment of income tax obligation | $ 7,000,000 | |||||
Unamortized discount on issuance of debt | 1,977,000 | 1,499,000 | ||||
Interest expense | 1,481,000 | $ 2,641,000 | ||||
98.7FM Non-recourse Debt | ||||||
Debt Instrument | ||||||
Face amount of debt | $ 82,200,000 | |||||
Unamortized discount on issuance of debt | $ 1,400,000 | $ 1,400,000 | ||||
Interest rate during period | 4.10% | |||||
NextRadio Notes Payable | ||||||
Debt Instrument | ||||||
Interest rate during period | 2.00% | |||||
Non-recourse debt | $ 4,000,000 | |||||
Mortgage | ||||||
Debt Instrument | ||||||
Fixed charge coverage ratio | 1.10 | |||||
Unamortized discount on issuance of debt | 200,000 | |||||
Debt instrument expiration date | Apr. 12, 2029 | |||||
Debt instrument, interest rate, stated percentage | 5.48% | |||||
Amortization period | 25 years | |||||
Mortgage | Whitestown, Indiana | ||||||
Debt Instrument | ||||||
Area of land | a | 70 | |||||
Wells Fargo Bank, National Association | Mortgage | ||||||
Debt Instrument | ||||||
Face amount of debt | $ 23,000,000 | |||||
Revolving Credit Agreement | ||||||
Debt Instrument | ||||||
Letters of credit outstanding amount | 0 | |||||
Credit agreement expiration date | Apr. 12, 2024 | |||||
Commitment fee percentage | 0.50% | |||||
Fixed charge coverage ratio | 1.10 | |||||
Unamortized discount on issuance of debt | $ 400,000 | |||||
Revolving Credit Agreement | 3 Month LIBOR Member | ||||||
Debt Instrument | ||||||
Debt instrument, basis spread on variable rate | 2.50% | |||||
Revolving Credit Agreement | Mortgage | ||||||
Debt Instrument | ||||||
Fixed charge coverage ratio | 1.10 | |||||
Revolving Credit Agreement | Wells Fargo Bank, National Association | ||||||
Debt Instrument | ||||||
Face amount of debt | $ 12,000,000 | |||||
Term Loan | ||||||
Debt Instrument | ||||||
Debt instrument, date to be repaid, replaced, or extended | Oct. 12, 2021 | |||||
Unamortized discount on issuance of debt | $ 100,000 | |||||
Debt instrument expiration date | Apr. 12, 2022 | |||||
Debt instrument, interest rate, stated percentage | 10.00% | |||||
Term Loan | Minimum [Member] | ||||||
Debt Instrument | ||||||
Interest expense | $ 125,000 | |||||
Term Loan | Austin, Texas | ||||||
Debt Instrument | ||||||
Number of ownership interest on mortgage property | Station | 6 | |||||
Term Loan | Barrett Investment Partners, LLC | ||||||
Debt Instrument | ||||||
Face amount of debt | $ 4,000,000 | |||||
Term Loan | Interest Rate Period Two | ||||||
Debt Instrument | ||||||
Debt instrument, interest rate, stated percentage | 12.00% | |||||
Term Loan | Interest Rate Period Three | ||||||
Debt Instrument | ||||||
Debt instrument, interest rate, stated percentage | 14.00% | |||||
Digonex Non-recourse Debt | ||||||
Debt Instrument | ||||||
Face amount of debt | $ 6,200,000 | |||||
Interest rate during period | 5.00% | |||||
Non-recourse debt | $ 3,600,000 |
Long-term Debt - Schedule of Ma
Long-term Debt - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | May 31, 2019USD ($) |
Debt Instrument | |
Remainder of 2020 | $ 6,606 |
2021 | 15,781 |
2022 | 14,211 |
2023 | 9,804 |
2024 | 10,324 |
Thereafter | 25,795 |
Total | 82,521 |
Mortgage | |
Debt Instrument | |
Remainder of 2020 | 286 |
2021 | 454 |
2022 | 484 |
2023 | 512 |
2024 | 541 |
Thereafter | 20,614 |
Total | 22,891 |
98.7 FM Debt | |
Debt Instrument | |
Remainder of 2020 | 5,431 |
2021 | 7,755 |
2022 | 8,394 |
2023 | 9,069 |
2024 | 9,783 |
Thereafter | 5,181 |
Total | 45,613 |
Digonex Non-recourse Debt | |
Debt Instrument | |
Remainder of 2020 | 0 |
2021 | 6,239 |
2022 | 4,000 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total | 10,239 |
Term Loan | |
Debt Instrument | |
Remainder of 2020 | 889 |
2021 | 1,333 |
2022 | 1,333 |
2023 | 223 |
2024 | 0 |
Thereafter | 0 |
Total | $ 3,778 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Accounted for at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | May 31, 2019 | Feb. 28, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | $ 800 | $ 800 |
Total assets measured at fair value on a recurring basis | 800 | 800 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities | 800 | 800 |
Total assets measured at fair value on a recurring basis | $ 800 | $ 800 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Disaggregation Of Revenue [Line Items] | ||
NET REVENUES | $ 27,771 | $ 28,006 |
Advertising | ||
Disaggregation Of Revenue [Line Items] | ||
NET REVENUES | 19,026 | 18,775 |
Circulation | ||
Disaggregation Of Revenue [Line Items] | ||
NET REVENUES | 97 | 102 |
Non Traditional | ||
Disaggregation Of Revenue [Line Items] | ||
NET REVENUES | 1,699 | 1,968 |
LMA Fees | ||
Disaggregation Of Revenue [Line Items] | ||
NET REVENUES | 2,583 | 3,302 |
Digital | ||
Disaggregation Of Revenue [Line Items] | ||
NET REVENUES | 2,026 | 1,200 |
Other | ||
Disaggregation Of Revenue [Line Items] | ||
NET REVENUES | $ 2,340 | $ 2,659 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
May 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Results of Operations of Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
May 31, 2019 | May 31, 2018 | Feb. 28, 2019 | |
Segment Reporting Information [Line Items] | |||
NET REVENUES | $ 27,771 | $ 28,006 | |
Station operating expenses excluding depreciation and amortization expense | 19,777 | 21,531 | |
Corporate expenses excluding depreciation and amortization expense | 2,558 | 2,508 | |
Depreciation and amortization | 750 | 799 | |
OPERATING INCOME | 4,686 | 35,235 | |
(Gain) loss on sale of assets, net of disposition costs | (32,067) | ||
Total Assets | 259,872 | $ 237,746 | |
Radio | |||
Segment Reporting Information [Line Items] | |||
NET REVENUES | 26,385 | 26,384 | |
Station operating expenses excluding depreciation and amortization expense | 18,148 | 17,693 | |
Depreciation and amortization | 548 | 570 | |
OPERATING INCOME | 7,689 | 40,519 | |
(Gain) loss on sale of assets, net of disposition costs | (32,398) | ||
Total Assets | 242,460 | 216,473 | |
Publishing | |||
Segment Reporting Information [Line Items] | |||
NET REVENUES | 1,138 | 1,273 | |
Station operating expenses excluding depreciation and amortization expense | 1,126 | 1,199 | |
Depreciation and amortization | 3 | 5 | |
OPERATING INCOME | 9 | (262) | |
(Gain) loss on sale of assets, net of disposition costs | 331 | ||
Total Assets | 679 | 728 | |
All Other | |||
Segment Reporting Information [Line Items] | |||
NET REVENUES | 248 | 349 | |
Station operating expenses excluding depreciation and amortization expense | 503 | 2,639 | |
Corporate expenses excluding depreciation and amortization expense | 2,558 | 2,508 | |
Depreciation and amortization | 199 | 224 | |
OPERATING INCOME | (3,012) | $ (5,022) | |
Total Assets | $ 16,733 | $ 20,545 |
Regulatory, Legal and Other M_2
Regulatory, Legal and Other Matters - Additional Information (Details) $ in Millions | Oct. 10, 2018USD ($) | May 31, 2019LegalProceeding |
Loss Contingencies [Line Items] | ||
Number of legal proceedings pending | LegalProceeding | 0 | |
INIC Suit | ||
Loss Contingencies [Line Items] | ||
Litigation award subject to appeal | $ | $ 3.5 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate | 22.00% | 24.00% |
Restructuring Reserve - Additio
Restructuring Reserve - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2018 | Nov. 30, 2018 | May 31, 2018 | |
Restructuring Reserve [Line Items] | |||
Restructuring Charges | $ 1,178 | ||
St Louis | |||
Restructuring Reserve [Line Items] | |||
Restructuring Charges | $ 1,200 | $ 200 |
Restrucuring Reserve (Details)
Restrucuring Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Restructuring Reserve [Abstract] | ||
Restructuring charges and estimated lease cease-use costs, beginning balance | $ 1,099 | |
Restructuring charges and estimated lease cease-use costs- St. Louis radio stations sale | 1,178 | |
Payments, net of accretion | (66) | (47) |
Restructuring charges and estimated lease cease-use costs unpaid and outstanding | $ 1,033 | $ 1,131 |
Leases - Summary of Impact of O
Leases - Summary of Impact of Operating Lease (Details) $ in Thousands | 3 Months Ended |
May 31, 2019USD ($) | |
Lease Cost | |
Operating lease cost | $ 1,198 |
Other Information | |
Operating cash flows from operating leases | 1,319 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 28,821 |
Weighted average remaining lease term - operating leases (in years) | 8 years 7 months 6 days |
Weighted average discount rate - operating leases | 5.60% |
Leases - Summary of Annual Mini
Leases - Summary of Annual Minimum Lease Payments of Operating Lease Liabilities (Details) $ in Thousands | May 31, 2019USD ($) |
Year ending February 28 (29), | |
Remainder of 2020 | $ 3,878 |
2021 | 4,990 |
2022 | 4,921 |
2023 | 4,839 |
2024 | 3,449 |
After 2024 | 13,705 |
Total lease payments | 35,782 |
Less imputed interest | 8,018 |
Total recorded lease liabilities | $ 27,764 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event $ in Thousands | Jun. 28, 2019USD ($)voteDirector | Jun. 07, 2019USD ($) |
Subsequent Event [Line Items] | ||
Estimated net proceeds from sale of property plant and intangible assets held for sale | $ 28,000 | |
Contribution Agreement | ||
Subsequent Event [Line Items] | ||
Note acquired in exchange of assets | $ 5,000 | |
Cash proceeds, net of transaction-related expenses and estimated tax liabilities | 90,000 | |
Recognize gain | 40,000 | |
Contribution Agreement | Mediaco Holding Inc | ||
Subsequent Event [Line Items] | ||
Cash acquired in exchange of assets | 91,500 | |
Note acquired in exchange of assets | $ 5,000 | |
Percentage of common stock acquired in exchange of assets | 23.72% | |
Vote per share | vote | 1 | |
Board of directors appointed | Director | 3 | |
Management fee | $ 1,250 | |
Contribution Agreement | Mediaco Holding Inc | Standard General L.P | ||
Subsequent Event [Line Items] | ||
Percentage of common stock purchased | 76.28% | |
Vote per share | vote | 10 | |
Board of directors appointed | Director | 4 | |
Maximum | ||
Subsequent Event [Line Items] | ||
Gain (loss) on disposition of assets | 35,000 | |
Austin Partnership | ||
Subsequent Event [Line Items] | ||
Net working capital included in purchase price | $ 4,300 | |
Sinclair Telecable Inc | Austin Partnership | ||
Subsequent Event [Line Items] | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 50.10% | |
Estimated gross proceeds from sale of property plant and intangible assets held for sale | $ 39,300 |
Subsequent Events - Results of
Subsequent Events - Results of Operations of Disposal Groups (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Station operating expenses excluding depreciation and amortization expense | $ 19,777 | $ 21,531 |
Depreciation and amortization | 750 | 799 |
Operating income | 4,686 | 35,235 |
Austin Partnership | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Net revenues | 8,287 | 8,009 |
Station operating expenses excluding depreciation and amortization expense | 5,527 | 5,149 |
Depreciation and amortization | 120 | 141 |
Operating income | 2,640 | 2,719 |
Stations | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Net revenues | 9,838 | 9,315 |
Station operating expenses excluding depreciation and amortization expense | 6,568 | 5,705 |
Depreciation and amortization | 323 | 292 |
Operating income | $ 2,947 | $ 3,318 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Major Classes of Assets, Liabilities and Equity (Details) - USD ($) $ in Thousands | May 31, 2019 | Mar. 01, 2019 | Feb. 28, 2019 | May 31, 2018 | Feb. 28, 2018 |
Noncurrent assets: | |||||
Property and equipment, net | $ 23,043 | $ 23,477 | |||
Operating lease right-of use assets | 23,820 | ||||
Liabilities: | |||||
Operating lease liabilities | 3,688 | ||||
Operating lease liabilities | 24,077 | $ 28,800 | |||
Total liabilities | 157,774 | 137,379 | |||
Equity: | |||||
Noncontrolling interest | 27,878 | 28,153 | $ 29,713 | $ 30,680 | |
Austin Partnership | |||||
Noncurrent assets: | |||||
Property and equipment, net | 5,115 | 5,060 | |||
Intangible assets | 39,058 | 39,058 | |||
Operating lease right-of use assets | 2,495 | ||||
Total noncurrent assets | 46,668 | 44,118 | |||
Liabilities: | |||||
Operating lease liabilities | 538 | ||||
Operating lease liabilities | 2,265 | ||||
Total liabilities | 2,803 | ||||
Equity: | |||||
Noncontrolling interest | $ 47,372 | $ 47,147 |
Subsequent Events - Schedule _2
Subsequent Events - Schedule of Major Classes of Assets and Liabilities (Details) - USD ($) $ in Thousands | May 31, 2019 | Mar. 01, 2019 | Feb. 28, 2019 |
Noncurrent assets: | |||
Property and equipment, net | $ 23,043 | $ 23,477 | |
Operating lease right-of use assets | 23,820 | ||
Liabilities: | |||
Operating lease liabilities | 3,688 | ||
Operating lease liabilities | 24,077 | $ 28,800 | |
Total liabilities | 157,774 | 137,379 | |
Stations | |||
Noncurrent assets: | |||
Property and equipment, net | 2,238 | 2,460 | |
Intangible assets | 63,951 | 64,025 | |
Operating lease right-of use assets | 12,267 | ||
Total noncurrent assets | 78,456 | $ 66,485 | |
Liabilities: | |||
Operating lease liabilities | 2,271 | ||
Operating lease liabilities | 12,053 | ||
Total liabilities | $ 14,324 |