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 Townsquare Reports Fourth Quarter and Full Year 2015 Results
   Friday, February 26, 2016 7:00:01 AM ET

Townsquare Media, Inc. (TSQ ) ("Townsquare," the "Company," "we," "us," or "our") announced today financial results for the fourth quarter and year ended December 31, 2015.

"In 2015, we delivered net revenue growth of 18%, driven by growth across all segments and the acquisition of North American Midway Entertainment ("NAME"). We believe our diversified strategy remains sound, demonstrated by the stability of our Local Advertising business and the outsized growth in our other businesses," commented Steven Price, Chairman and Chief Executive Officer of Townsquare. "In addition, we further diversified our business, with approximately half of revenue now derived from sources other than the sale of terrestrial radio advertising."

Mr. Price continued, "2015 was an exciting year for Townsquare. We completed two strategic transactions, refinanced our capital structure, locking in long-term, favorable interest rates, and voluntarily repaid a portion of our term loan debt. On a pro forma basis, net revenue grew 5.4% in 2015 and both revenue and EBITDA were in line with the guidance that we provided at the start of 2015."

Fourth Quarter Highlights

As compared to the fourth quarter of 2014:

-- Net revenue increased 20.6%

-- Local Advertising net revenue excluding political increased 3.5%

-- Live Events net revenue increased 298.7%

-- Other Media and Entertainment net revenue increased 44.1%

Full Year Highlights

As compared to 2014:

-- Net revenue increased 18.0%

-- Local Advertising net revenue excluding political increased 1.9%

-- Live Events net revenue increased 138.5%

-- Other Media and Entertainment net revenue increased 33.4%

-- Excluding NAME, net revenue and Adjusted EBITDA were $412.5 million and $93.7 million, respectively

-- Nearly 50% of pro forma net revenue was derived from sources other than the sale of terrestrial radio station advertising

Quarter Ended December 31, 2015 Compared to the Quarter Ended December 31, 2014

Net Revenue

Net revenue for the quarter ended December 31, 2015 increased $19.3 million, or 20.6%, to $113.0 million, as compared to $93.7 million in the same period last year. This was primarily due to a $16.1 million increase in Live Events net revenue, which was partially due to an increase in net revenue from the acquisition of NAME on September 1, 2015. Local Advertising net revenue decreased $0.4 million, or 0.4%, to $80.0 million, Live Events net revenue increased $16.1 million, or 298.7%, to $21.6 million and Other Media and Entertainment net revenue increased $3.5 million, or 44.1%, to $11.5 million. Excluding political revenue, net revenue increased $22.3 million, or 25.1%, to $111.2 million and Local Advertising net revenue increased $2.7 million, or 3.5%, to $78.1 million.

Adjusted EBITDA

Adjusted EBITDA for the quarter ended December 31, 2015 decreased $2.9 million, or 12.2%, to $21.1 million, as compared to $24.0 million in the same period last year. The decrease was primarily related to a reduction in political revenue.

Year Ended December 31, 2015 Compared to the Year Ended December 31, 2014

Net Revenue

Net revenue for the year ended December 31, 2015 increased $67.3 million, or 18.0%, to $441.2 million, as compared to $373.9 million last year. This was primarily due to a $56.7 million increase in Live Events net revenue, partially due to an increase in net revenue from the acquisition of NAME on September 1, 2015 and the acquisition of WE Fest on October 31, 2014. Local Advertising net revenue increased $0.5 million, or 0.2%, to $303.1 million, Live Events net revenue increased $56.7 million, or 138.5%, to $97.7 million and Other Media and Entertainment net revenue increased $10.1 million, or 33.4%, to $40.4 million. Excluding political revenue, net revenue increased $72.6 million, or 19.8%, to $438.3 million and Local Advertising net revenue increased $5.7 million, or 1.9%, to $300.2 million.

Adjusted EBITDA

Adjusted EBITDA for the year ended December 31, 2015 increased $2.5 million, or 2.6%, to $98.0 million, as compared to $95.5 million last year. The increase was primarily due to the acquisitions of NAME on September 1, 2015 and WE Fest on October 31, 2014.

Liquidity and Capital Resources

As of December 31, 2015, we had a total of $33.3 million of cash on hand and the total amount of revolving credit capacity available to us was $50.0 million under our credit facility. As of December 31, 2015, we had $598.8 million of outstanding indebtedness and $565.5 million of outstanding indebtedness net of cash, representing 5.8x and 5.5x gross and net leverage, respectively, based on the year ended December 31, 2015 pro forma Adjusted EBITDA of $102.6 million.

The table below presents a summary, as of December 31, 2015, of our outstanding common stock and securities convertible into common stock, excluding options issued under our 2014 Omnibus Incentive Plan.

                                           
Security                                                           Number                                               Description
                                                               Outstanding(1)
--------------------                                           --------------                                           ------------------------------------------------------------------
Class A common stock                                              9,946,354                                             One vote per share.
Class B common stock                                              3,022,484                                             10 votes per share.(2)
Class C common stock                                              4,894,480                                             No votes.(2)
Warrants                                                          9,508,878                                             Each warrant is exercisable for one share of Class A common stock,
                                                                                                                        at
                                                                                                                        an exercise price of $0.0001 per share. The aggregate
                                                                                                                        exercise price for
                                                                                                                        all warrants currently outstanding is $951.(3)
--------------------                                           --------------
Total                                                            27,372,196
 
--------------------
(1) Each of the shares of common stock listed below,
including the shares of Class A common stock issuable upon
exercise
of the warrants, have equal economic rights.
(2) Each share converts into 1 share of Class A common
stock upon transfer or at the option of the holder, subject to
certain
conditions, including compliance with FCC rules.
(3) The warrants are fully vested and exercisable for
shares of Class A common stock, subject to certain conditions,
including
compliance with FCC rules.
 

Segment Reporting

We have two reportable operating segments, which are Local Advertising and Live Events, and report the remainder of our business in an Other Media and Entertainment category. Our Local Advertising segment is composed of broadcast, digital and mobile advertising on our stations, streams, websites and mobile application. Our Live Events segment is composed of a diverse range of live events, which we create, promote and produce, including musical concerts, multi-day music festivals, fairs, consumer expositions and trade shows, athletic events, lifestyle events and other forms of entertainment. The Other Media and Entertainment business principally includes digital marketing services, national digital assets and other revenue.

Conference Call

Townsquare Media, Inc. will host a conference call to discuss certain fourth quarter and full year 2015 financial results on Friday, February 26, 2016 at 8:00 a.m. Eastern Time. The conference call dial-in number is 1-877-407-0784 (U.S. & Canada) or 1-201-689-8560 (International) and the confirmation code is 13628127. A live webcast of the conference call will also be available on the equity investor relations page of the Company’s website at www.townsquaremedia.com.

A replay of the conference call will be available through March 4, 2016. To access the replay, please dial 1-877-870-5176 (U.S. & Canada) or 1-858-384-5517 (International) and enter confirmation code 13628127. A web-based archive of the conference call will also be available at the above website for thirty days after the call.

About Townsquare Media, Inc.

Townsquare is a media, entertainment and digital marketing solutions company principally focused on small and mid-sized markets across the U.S. Our assets include 309 radio stations and more than 325 local websites in 66 U.S. markets, approximately 550 live events with nearly 18 million attendees each year in the U.S. and Canada, a digital marketing solutions company serving approximately 8,000 small to medium sized businesses, and one of the largest digital advertising networks focused on music and entertainment reaching more than 60 million unique visitors each month. Our brands include iconic local media assets such as WYRK, KLAQ, K2 and NJ101.5; acclaimed music festivals such as Mountain Jam, WE Fest and the Taste of Country Music Festival; unique touring lifestyle and entertainment events such as the America on Tap craft beer festival series, the Insane Inflatable 5K obstacle race series and North American Midway Entertainment, North America’s largest mobile amusement company; and leading tastemaker music and entertainment owned and affiliated websites such as XXL.com, TasteofCountry.com, Loudwire.com, JustJared.com and BrooklynVegan.com. For more information, please visit www.townsquaremedia.com.

Forward-Looking Statements

Except for the historical information contained in this press release, the matters addressed are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, written, oral or otherwise made, represent the Company’s expectation or belief concerning future events. Without limiting the foregoing, the words "believes," "expects," "may," "will," "should," "seeks," "intends," "plans," "strives," "goal," "estimates," "forecasts," "projects" or "anticipates" and similar expressions are intended to identify forward-looking statements. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statement. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof. See "Risk Factors" and "Forward-Looking Statements" included in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on or about the date hereof, for a discussion of factors that could cause our actual results to differ from those expressed or implied by forward-looking statements. Townsquare Media, Inc. assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise.

                                                                                                                      
                                                                                                         TOWNSQUARE MEDIA, INC.
                                                                                                       CONSOLIDATED BALANCE SHEETS
                                                                                                    (in Thousands, Except Share Data)
                                                                                                                                                                                                    
                                                                                                              December 31,                                                                  December 31,
                                                                                                                                     2015                                                                          2014
                                                                                                                     ---------------------------------                                             ----------------------------------
ASSETS
Current assets:
 Cash                                                                                                                   $    33,298                                                                      $  24,462
 Accounts receivable, net of allowance of $2,114 and $3,350,                                                                 60,143                                                                         61,151
 respectively
 Prepaid expenses and other current assets                                                                                    9,766                                                       6,416  
                                                                                                                     -----------------------------------                                           ------------------------------------
     Total current assets                                                                                                   103,207                                                                         92,029
                                                                                                                                                                                                    
Property and equipment, net                                                                                                 133,943                                                                         96,247
Intangible assets, net                                                                                                      517,979                                                                        505,839
Goodwill                                                                                                                    292,953                                                                        242,300
Investments                                                                                                                   5,049                                                                            484
Other assets                                                                                                                  7,580                                                         413  
                                                                                                                     -----------------------------------                                           ------------------------------------
     Total assets                                                                                                       $ 1,060,711                                                   $ 937,312  
                                                                                                                     ==== ========= ====================                                           ======= ======= ====================
                                                                                                                                                                                                    
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 Accounts payable                                                                                                       $     9,549                                                                      $   6,747
 Current portion of long-term debt                                                                                              171                                                                          1,293
 Deferred revenue                                                                                                            17,496                                                                         14,299
 Accrued expenses and other current liabilities                                                                              29,958                                                                         21,339
 Accrued interest                                                                                                             4,910                                                       9,245  
                                                                                                                     -----------------------------------                                           ------------------------------------
     Total current liabilities                                                                                               62,084                                                                         52,923
Long-term debt, less current portion, (net of deferred financing                                                            588,657                                                                        528,747
costs of $9,962 and $9,636, respectively, and inclusive of
bond
premium of $0 and $7,203, respectively)
Deferred tax liabilities                                                                                                     35,233                                                                         10,507
Other long-term liabilities                                                                                                  11,297                                                         973  
                                                                                                                     -----------------------------------                                           ------------------------------------
     Total liabilities                                                                                                      697,271                                                                        593,150
                                                                                                                                                                                                    
Stockholders’ equity:
                                                                                                                                100                                                                             95
 Class A common stock, par value $0.01 per share; 300,000,000
 shares authorized, 9,946,354 and 9,457,242 shares
 issued and
 outstanding at December 31, 2015 and 2014, respectively
                                                                                                                                 30                                                                             30
    Class B common stock, par value $0.01 per share; 50,000,000 shares
    authorized, 3,022,484 shares issued and
    outstanding at
    December 31, 2015 and 2014, respectively
                                                                                                                                 49                                                          49  
    Class C common stock, par value $0.01 per share; 50,000,000 shares
    authorized, 4,894,480 shares issued and
    outstanding at
    December 31, 2015 and 2014, respectively
                                                                                                                     -------------  --------------------                                           --------------  --------------------
    Total common stock                                                                                                          179                                                                            174
    Additional paid-in capital                                                                                              361,186                                                                        351,984
    Retained (deficit) earnings                                                                                               1,391                                                                         (8,439 )
    Accumulated other comprehensive income                                                                                       44                                                                 --
    Non-controlling interest                                                                                                    640                                                         443  
                                                                                                                     -----------------------------------                                           ------------------------------------
     Total liabilities and stockholders’ equity                                              $ 1,060,711                                                   $ 937,312  
                                                                                                                     ==== ========= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                    
                                                                   
                                                                                                                                           TOWNSQUARE MEDIA, INC.
                                                                                                                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                                                    (in Thousands, Except Per Share Data)
                                                                                                           
                                                                                                                                                                            Years Ended December 31,
                                                                                                                          2015                                     2014                                     2013
                                                                                                          -------------------------------------                                          -------------------------------------                                          -------------------------------------
                                                                                                                                                                                                                                                                         
Net revenue                                                                                                     $ 441,222                                                                      $ 373,892                                                                      $ 268,578
Operating costs and expenses:
Direct operating expenses, excluding depreciation, amortization                                                   317,835                                                                        253,440                                                                        187,148
and stock-based
compensation
Depreciation and amortization                                                                                      17,577                                                                         16,878                                                                         15,189
Corporate expenses                                                                                                 25,411                                                                         24,996                                                                         19,190
Stock-based compensation                                                                                            4,278                                                                         37,739                                                                 --
Transaction costs                                                                                                   1,739                                                                            217                                                                          2,001
Change in fair value of contingent consideration                                                           --                                                                 --                                                                         (1,100 )
Impairment FCC licenses                                                                                             1,680                                                                 --                                                                 --
Net (gain) loss on sale of assets                                                                                 (12,029 )                                                                           90                                                         (36 )
                                                                                                          ------------------------------------                                           ------------------------------------                                           ------------------------------------
    Total operating costs and expenses                                                                            356,491                                                     333,360                                                     222,392  
                                                                                                          ------------------------------------                                           ------------------------------------                                           ------------------------------------
    Operating income                                                                                               84,731                                                      40,532                                                      46,186  
                                                                                                          ------------------------------------                                           ------------------------------------                                           ------------------------------------
                                                                                                                                                                                                                                                                         
Other expenses:
Interest expense, net                                                                                              35,979                                                                         46,502                                                                         35,620
Loss on extinguishment of debt                                                                                     30,305                                                                 --                                                                 --
Other expense, net                                                                                                    277                                                         111                                                         115  
                                                                                                          ------------------------------------                                           ------------------------------------                                           ------------------------------------
     Income (loss) before income taxes                                                                             18,170                                                                         (6,081 )                                                                       10,451
Provision for income taxes                                                                                          7,924                                                      10,872                                                         340  
                                                                                                          ------------------------------------                                           ------------------------------------                                           ------------------------------------
     Net income (loss)                                                                                          $  10,246                                                   $ (16,953 )                                                                    $  10,111  
                                                                                                          ======= ======= ====================                                           ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                         
Net income (loss) attributable to:
     Controlling interests                                                                                      $   9,830                                                                      $ (17,372 )                                                                    $  10,061
     Non-controlling interests                                                                                        416                                                                            419                                                                             50
                                                                                                                                                                                                                                                                         
Net income (loss) per share:
     Basic                                                                                                      $    0.58                                                   $   (1.41 )
                                                                                                          ------- ------- --------------------                                           ------- ------- --------------------
     Diluted                                                                                                    $    0.37                                                   $   (1.41 )
                                                                                                          ------- ------- --------------------                                           ------- ------- --------------------
                                                                                                                                                                                                                                                                         
Pro forma C Corporation data (unaudited):
Historical (loss) income before income taxes                                                                                                                                                   $  (6,081 )                                                                    $  10,451
Pro forma income tax (benefit) expense                                                                                                                                                            (2,396 )                                                                        4,118  
                                                                                                                                                                                         ------------------------------------                                           ------------------------------------
Pro forma net (loss) income                                                                                                                                                                    $  (3,685 )                                                                    $   6,333  
                                                                                                                                                                                         ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                         
Pro forma net (loss) income per share:
     Basic                                                                                                                                                                                     $   (0.31 )                                                                    $    0.84
     Diluted                                                                                                                                                                                   $   (0.31 )                                                                    $    0.37
                                                                                                                                                                                                                                                                         
Weighted average shares outstanding:                                                                                     Actual                                                                        Pro Forma                                                                      Pro Forma
                                                                                                          -------------------------------------                                          -------------------------------------                                          -------------------------------------
     Basic                                                                                                         17,537                                                      12,013                                                       7,569  
                                                                                                          ------------------------------------                                           ------------------------------------                                           ------------------------------------
     Diluted                                                                                                       27,724                                                      12,013                                                      17,078  
                                                                                                          ------------------------------------                                           ------------------------------------                                           ------------------------------------
                                                                                                                                                                                                                                                                                         
                                                                     
                                                                                                                                            TOWNSQUARE MEDIA, INC.
                                                                                                                                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                                                (in Thousands)
                                                                                                             
                                                                                                                                                                                                  Year Ended December 31,
                                                                                                            ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            2015                                     2014                                     2013
                                                                                                            -------------------------------------                                          -------------------------------------                                          -------------------------------------
 Cash flows from operating activities:
 Net income (loss) attributable to:
   Controlling interests                                                                                          $   9,830                                                                      $ (17,372 )                                                                    $  10,061
   Non-controlling interests                                                                                            416                                                         419                                                          50  
                                                                                                            ------------------------------------                                           ------------------------------------                                           ------------------------------------
   Net income (loss)                                                                                              $  10,246                                                                      $ (16,953 )                                                                    $  10,111
 Adjustments to reconcile net income (loss) to net cash from
 operating activities:
   Depreciation and amortization                                                                                     17,577                                                                         16,878                                                                         15,189
   Amortization of deferred financing costs                                                                           1,720                                                                          3,161                                                                          2,111
   Deferred income tax expense                                                                                        7,737                                                                         10,507                                                                 --
   Provision for doubtful accounts                                                                                    1,170                                                                          1,903                                                                              8
   Stock-based compensation expense                                                                                   4,278                                                                         37,739                                                                 --
   Non-cash interest expense                                                                                 --                                                                          1,796                                                                            392
   Amortization of bond premium                                                                                        (424 )                                                                       (1,695 )                                                                         (221 )
   Write-off deferred financing costs                                                                                 9,348                                                                 --                                                                 --
   Write-off of bond premium                                                                                         (6,779 )                                                               --                                                                 --
   Impairment FCC licenses                                                                                            1,680                                                                 --                                                                 --
   Net (gain) loss on sale of assets                                                                                (12,029 )                                                                           90                                                                            (36 )
Changes in assets and liabilities, net of acquisitions:
   Accounts receivable                                                                                               (2,015 )                                                                       (6,757 )                                                                       (4,202 )
   Prepaid expenses and other assets                                                                                 (6,805 )                                                                        1,747                                                                         (5,183 )
   Accounts payable                                                                                                      33                                                                         (2,086 )                                                                          385
   Accrued expenses                                                                                                   1,657                                                                           (941 )                                                                        5,140
   Accrued interest                                                                                                  (4,335 )                                                                         (166 )                                                                        3,449
   Other long-term liabilities                                                                                        2,884                                                          39                                                        (939 )
                                                                                                            ------------------------------------                                           ------------------------------------                                           ------------------------------------
       Net cash provided by operating activities                                                                     25,943                                                      45,262                                                      26,204  
                                                                                                            ------------------------------------                                           ------------------------------------                                           ------------------------------------
 Cash flows from investing activities:
    Payments for acquisitions, net of cash received                                                                 (76,213 )                                                                      (26,076 )                                                                     (276,799 )
    Acquisition of intangibles                                                                                         (377 )                                                                         (510 )                                                               --
    Purchase of property and equipment                                                                              (14,724 )                                                                      (13,531 )                                                                       (9,526 )
    Proceeds from sale of assets                                                                                     19,087                                                                            408                                                                            155
    Proceeds from insurance settlement                                                                                  450                                              --                                              --  
                                                                                                            ------------------------------------                                           ------------------------------------                                           ------------------------------------
       Net cash used in investing activities                                                                        (71,777 )                                                   (39,709 )                                                  (286,170 )
                                                                                                            ------------------------------------ --------------------                      ------------------------------------ --------------------                      ------------------------------------
 Cash flows from financing activities:
    Proceeds from stock initial public offering and underwriters’                                            --                                                                         98,157                                                                 --
    overallotment shares
    Offering costs                                                                                                      (92 )                                                                       (3,219 )                                                               --
    Underwriters’ fees                                                                                       --                                                                         (6,871 )                                                               --
   Proceeds from option exercises                                                                                        72                                                                 --                                                                 --
    Repayment of long-term debt                                                                                    (553,552 )                                                                     (123,746 )                                                                       (1,020 )
    Proceeds from issuance of long-term debt                                                                        620,000                                                                         10,000                                                                        287,019
    Debt financing costs                                                                                            (11,394 )                                                                         (440 )                                                                       (2,388 )
    Units repurchased                                                                                        --                                                                 --                                                                           (159 )
 Cash distributions to non-controlling interest                                                                        (444 )                                                                         (468 )                                                               --
    Repayments of capitalized obligations                                                                              (159 )                                                                         (151 )                                                                         (144 )
                                                                                                            ------------------------------------                                           ------------------------------------                                           ------------------------------------
       Net cash provided by (used in) financing activities                                                           54,431                                  (26,738 )                                                   283,308  
                                                                                                            ------------------------------------ --------------------                      ------------------------------------ --------------------                      ------------------------------------
       Net effect of foreign currency exchange rate changes                                                             239                           --                           --  
                                                                                                            ------------------------------------ --------------------                      ------------------------------------ --------------------                      ------------------------------------
       Net increase (decrease) in cash                                                                                8,836                                                                        (21,185 )                                                                       23,342
       Cash:
       Beginning of period                                                                                           24,462                                                      45,647                                                      22,305  
                                                                                                            ------------------------------------                                           ------------------------------------                                           ------------------------------------
       End of period                                                                                              $  33,298                                                   $  24,462                                                   $  45,647  
                                                                                                            ======= ======= ====================                                           ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                           
                                                                    
                                                                                                                                            TOWNSQUARE MEDIA, INC.
                                                                                                                               CONSOLIDATED STATEMENTS OF OEPRATIONS BY SEGMENT
                                                                                                                                                (in Thousands)
                                                                                                            
                                                                                                                                                                                                       Year Ended
                                                                                                                                                                                                      December 31,
                                                                                                           --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
($ in thousands)                                                                                                           2015                                     2014                                     2013
                                                                                                           -------------------------------------                                          -------------------------------------                                          -------------------------------------
Statement of Operations Data:
  Local Advertising net revenue                                                                                  $ 303,130                                                                      $ 302,648                                                                      $ 229,653
  Live Events net revenue                                                                                           97,681                                                                         40,954                                                                         20,851
  Other Media and Entertainment net revenue                                                                         40,411                                                      30,290                                                      18,074  
                                                                                                           ------------------------------------                                           ------------------------------------                                           ------------------------------------
Net revenue                                                                                                        441,222                                                                        373,892                                                                        268,578
Operating Costs and Expenses:
  Local Advertising direct operating expenses                                                                      194,020                                                                        189,975                                                                        147,720
  Live Events direct operating expenses                                                                             88,994                                                                         35,087                                                                         18,287
                                                                                                                    34,821                                                      28,378                                                      21,141  
  Other Media and Entertainment direct operating expenses
                                                                                                           --------------  --------------------                                           --------------  --------------------                                           --------------  --------------------
Station operating expenses, excluding depreciation, amortization                                                   317,835                                                                        253,440                                                                        187,148
and
stock-based compensation
Depreciation and amortization                                                                                       17,577                                                                         16,878                                                                         15,189
Corporate expenses                                                                                                  25,411                                                                         24,996                                                                         19,190
Stock-based compensation                                                                                             4,278                                                                         37,739                                                                 --
Transaction costs                                                                                                    1,739                                                                            217                                                                          2,001
Change in fair value of contingent consideration                                                            --                                                                 --                                                                         (1,100 )
Impairment FCC licenses                                                                                              1,680                                                                 --                                                                 --
Net (gain) loss on sale of assets                                                                                  (12,029 )                                                                           90                                                         (36 )
                                                                                                           ------------------------------------                                           ------------------------------------                                           ------------------------------------
Total operating costs and expenses                                                                                 356,491                                                                        333,360                                                                        222,392
Operating income                                                                                                    84,731                                                                         40,532                                                                         46,186
Other expense:
Interest expense, net                                                                                               35,979                                                                         46,502                                                                         35,620
Loss on extinguishment of debt                                                                                      30,305                                                                 --                                                                 --
Other expense, net                                                                                                     277                                                         111                                                         115  
                                                                                                           ------------------------------------                                           ------------------------------------                                           ------------------------------------
Total other expense                                                                                                 66,561                                                      46,613                                                      35,735  
                                                                                                           ------------------------------------                                           ------------------------------------                                           ------------------------------------
Income (loss) before income taxes                                                                                   18,170                                                      (6,081 )                                                                       10,451  
                                                                                                           ------------------------------------                                           ------------------------------------                                           ------------------------------------
Provision for income taxes                                                                                           7,924                                                      10,872                                                         340  
                                                                                                           ------------------------------------                                           ------------------------------------                                           ------------------------------------
Net income (loss)                                                                                                $  10,246                                                   $ (16,953 )                                                                    $  10,111  
                                                                                                           ======= ======= ====================                                           ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                          

The following table summarizes pro forma net revenue and direct operating expenses broken out by segment for the years ended December 31, 2015, 2014 and 2013, respectively (dollars in thousands):

                                                           
                                                                                                                                                                             Years Ended December 31,
                                                                                                  -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                2015                                 2014                             2013
                                                                                                  ---------------------------------                                          ---------------------------------                                          -------------------------
Statement of Operations Data:
Local Advertising net revenue                                                                       $ 303,130                                                                  $ 302,648                                                                  $              295,061
Live Events net revenue                                                                               159,342                                                                    144,735                                                                                 129,172
Other Media and Entertainment net revenue                                                              39,450                                                  28,948                                                               19,482
                                                                                                  --------------------------------                                           --------------------------------                                           -------------------------
Net revenue                                                                                           501,922                                                                    476,331                                                                                 443,715
Operating Costs and Expenses:
Local Advertising direct operating expenses                                                           193,794                                                                    189,677                                                                                 184,600
Live Events direct operating expenses                                                                 145,335                                                                    125,019                                                                                 111,675
Other Media and Entertainment direct operating expenses                                                34,821                                                  28,378                                                               21,768
                                                                                                  --------------------------------                                           --------------------------------                                           -------------------------
Direct operating expenses, excluding depreciation,                                                    373,950                                                 343,074                                                              318,043
amortization
and stock-based compensation
                                                                                                  ----------  --------------------                                           ----------  --------------------                                           -----------------------
Direct Profit                                                                                       $ 127,972                                               $ 133,257                                               $              125,672
                                                                                                  === ======= ====================                                           === ======= ====================                                           === ====================
                                                                                                                                                                                                                                                             

The following table summarizes pro forma net revenue and direct operating expenses on a constant currency basis broken out by segment for the years ended December 31, 2015, 2014 and 2013, respectively (dollars in thousands):

                                                           
                                                                                                                                                                             Years Ended December 31,
                                                                                                  -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                2015                                 2014                             2013
                                                                                                  ---------------------------------                                          ---------------------------------                                          -------------------------
Statement of Operations Data:
Local Advertising net revenue                                                                       $ 303,130                                                                  $ 302,648                                                                  $              295,061
Live Events net revenue                                                                               159,342                                                                    139,957                                                                                 123,438
Other Media and Entertainment net revenue                                                              39,450                                                  28,948                                                               19,482
                                                                                                  --------------------------------                                           --------------------------------                                           -------------------------
Net revenue                                                                                           501,922                                                                    471,553                                                                                 437,981
Operating Costs and Expenses:
Local Advertising direct operating expenses                                                           193,794                                                                    189,677                                                                                 184,600
Live Events direct operating expenses                                                                 145,335                                                                    121,388                                                                                 107,117
Other Media and Entertainment direct operating expenses                                                34,821                                                  28,378                                                               21,768
                                                                                                  --------------------------------                                           --------------------------------                                           -------------------------
Direct operating expenses, excluding depreciation,                                                    373,950                                                 339,443                                                              313,485
amortization
and stock-based compensation
                                                                                                  ----------  --------------------                                           ----------  --------------------                                           -----------------------
Direct Profit                                                                                       $ 127,972                                               $ 132,110                                               $              124,496
                                                                                                  === ======= ====================                                           === ======= ====================                                           === ====================
                                                                                                                                                                                                                                                             

The following table reconciles on a GAAP basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Direct Profit, Adjusted EBITDA and Free Cash Flow for the years ended December 31, 2015, 2014 and 2013, respectively (dollars in thousands):

                                                      
                                                                                                                                                                                           Actual
                                                                                                                                                                                  Years Ended December 31,
                                                                                             ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             2015                                     2014                                     2013
                                                                                             -------------------------------------                                          -------------------------------------                                          -------------------------------------
Net income (loss)                                                                                  $  10,246                                                                      $ (16,953 )                                                                    $  10,111
  Provision for income taxes                                                                           7,924                                                                         10,872                                                                            340
  Net loss on debt extinguishment                                                                     30,305                                                                 --                                                                 --
  Interest expense                                                                                    35,979                                                                         46,502                                                                         35,620
  Transaction costs                                                                                    1,739                                                                            217                                                                          2,001
  Depreciation and amortization                                                                       17,577                                                                         16,878                                                                         15,189
  Corporate expenses                                                                                  25,411                                                                         24,996                                                                         19,190
  Stock-based compensation                                                                             4,278                                                                         37,739                                                                 --
  Change in fair value of contingent consideration                                            --                                                                 --                                                                         (1,100 )
Impairment of FCC licenses                                                                             1,680                                                                 --                                                                 --
  Other(a)                                                                                           (11,752 )                                                                          201                                                          79  
                                                                                             ------------------------------------                                           ------------------------------------                                           ------------------------------------
Direct Profit                                                                                        123,387                                                                        120,452                                                                         81,430
  Corporate expenses                                                                                 (25,411 )                                                                      (24,996 )                                                                      (19,190 )
                                                                                             ------------------------------------                                           ------------------------------------                                           ------------------------------------
Adjusted EBITDA                                                                                    $  97,976                                                   $  95,456                                                   $  62,240  
                                                                                             ------- ------- --------------------                                           ------- ------- --------------------                                           ------- ------- --------------------
  Net cash interest expense                                                                          (38,978 )                                                                      (43,361 )                                                                      (31,392 )
  Capital expenditures                                                                               (14,724 )                                                                      (13,531 )                                                                       (9,526 )
  Cash paid for taxes                                                                                   (622 )                                                                         (446 )                                                                         (493 )
                                                                                             ------------------------------------                                           ------------------------------------                                           ------------------------------------
Free Cash Flow                                                                                     $  43,652                                                   $  38,118                                                   $  20,829  
                                                                                             ======= ======= ====================                                           ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                            

(a) Other includes net (gain) loss on sale of assets and other expense, net.

The following table reconciles on a pro forma basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Direct Profit and Adjusted EBITDA for the years ended December 31, 2015, 2014 and 2013, respectively (dollars in thousands):

                                                      
                                                                                                                                                                                          Pro Forma
                                                                                                                                                                                  Years Ended December 31,
                                                                                             ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             2015                                     2014                                     2013
                                                                                             -------------------------------------                                          -------------------------------------                                          -------------------------------------
Net income                                                                                         $   9,487                                                                      $   4,493                                                                      $  22,183
  Provision for income taxes                                                                           7,337                                                                          2,921                                                                         14,424
  Net loss on debt extinguishment                                                                     30,305                                                                 --                                                                            199
  Interest expense                                                                                    34,017                                                                         34,025                                                                         34,103
  Transaction costs                                                                                    1,739                                                                            217                                                                          2,001
  Depreciation and amortization                                                                       25,353                                                                         28,558                                                                         31,868
  Corporate expenses                                                                                  25,411                                                                         24,996                                                                         21,912
  Stock-based compensation                                                                             4,278                                                                         37,739                                                                 --
  Change in fair value of contingent consideration                                            --                                                                 --                                                                         (1,100 )
Impairment of FCC licenses                                                                             1,680                                                                 --                                                                 --
  Other(a)                                                                                           (11,636 )                                                                          307                                                          82  
                                                                                             ------------------------------------                                           ------------------------------------                                           ------------------------------------
Direct Profit                                                                                        127,971                                                                        133,256                                                                        125,672
  Corporate expenses                                                                                 (25,411 )                                                                      (24,996 )                                                                      (21,912 )
                                                                                             ------------------------------------                                           ------------------------------------                                           ------------------------------------
Adjusted EBITDA                                                                                      102,560                                                     108,260                                                     103,760  
                                                                                             ------------------------------------                                           ------------------------------------                                           ------------------------------------
  Constant currency adjustment                                                                --                                                      (1,147 )                                                                       (1,176 )
                                                                                             ------------------------------------                                           ------------------------------------                                           ------------------------------------
Adjusted EBITDA on a constant currency basis                                                         102,560                                                     107,113                                                     102,584  
                                                                                             ------------------------------------                                           ------------------------------------                                           ------------------------------------
                                                                                                                                                                                                                                                                            

(a) Other includes net (gain) loss on sale of assets and other expense, net.

The following table reconciles on a pro forma basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Direct Profit and Adjusted EBITDA on a quarterly basis for the twelve months ended December 31, 2015 (dollars in thousands):

                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                               Quarter Ended                                                                                                                                                                                          Twelve
                                                                                                                                                                                                                                                                                                                                                                         Months
                                                                                                                                                                                                                                                                                                                                                                          Ended
                                                                            ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                            -------------------------------
                                                                                        December 31,                             September 30,                              June 30,                                 March 31,                                                                   December 31,
                                                                                            2015                                                                           2015                                                                           2015                                                                           2015                                                                          2015
                                                                            ----------------------------------                                             ----------------------------------                                             ----------------------------------                                             ----------------------------------                                             -------------------------------
Net income (loss)                                                                 $   2,764                                                                      $  21,414                                                                      $ (12,597 )                                                                    $  (2,094 )                                                                 $   9,487
  Provision for income taxes                                                          2,139                                                                         16,560                                                                         (9,743 )                                                                       (1,619 )                                                                     7,337
  Net loss on debt extinguishment                                            --                                                                            288                                                                         30,017                                                                 --                                                                      30,305
  Interest expense                                                                    8,529                                                                          8,530                                                                          8,496                                                                          8,462                                                                      34,017
  Transaction costs                                                                     442                                                                          1,125                                                                            125                                                                             47                                                                       1,739
  Depreciation and amortization                                                       5,508                                                                          6,769                                                                          6,525                                                                          6,551                                                                      25,353
  Corporate expenses                                                                  7,463                                                                          6,106                                                                          6,602                                                                          5,240                                                                      25,411
  Stock-based compensation                                                   --                                                                          2,875                                                                          1,403                                                                 --                                                                       4,278
  Impairment FCC licenses                                                             1,680                                                                 --                                                                 --                                                                 --                                                                       1,680
  Other(a)                                                                               28                                                     (11,926 )                                                                           23                                                         239                                                  (11,636 )
                                                                            ------------------------------------                                           ------------------------------------                                           ------------------------------------                                           ------------------------------------                                           ---------------------------------
Direct Profit                                                                        28,553                                                                         51,741                                                                         30,851                                                                         16,826                                                                     127,971
  Corporate expenses                                                                 (7,463 )                                                                       (6,106 )                                                                       (6,602 )                                                                       (5,240 )                                                                   (25,411 )
                                                                            ------------------------------------                                           ------------------------------------                                           ------------------------------------                                           ------------------------------------                                           ---------------------------------
Adjusted EBITDA                                                                   $  21,090                                                   $  45,635                                                   $  24,249                                                   $  11,586                                                $ 102,560  
                                                                            ======= ======= ====================                                           ======= ======= ====================                                           ======= ======= ====================                                           ======= ======= ====================                                           ==== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                      

(a) Other includes net (gain) loss on sale of assets and other expense, net.

Non-GAAP Financial Measures and Definitions

We believe that our financial statements and the other financial data included herein have been prepared in a manner that complies, in all material respects, with generally accepted accounting principles in the United States, or GAAP, and are consistent with current practice with the exception of the presentation of certain non-GAAP financial measures, including Direct Profit, Adjusted EBITDA and Free Cash Flow (each as defined below).

We define Direct Profit as net income (loss) before the deduction of income taxes, other expense (net), interest expense, net loss on debt extinguishment, transaction costs, corporate expenses, net (gain) loss on sale of assets and depreciation and amortization. Adjusted EBITDA is defined as Direct Profit less corporate expenses (excluding stock-based compensation). Free Cash Flow is defined as Adjusted EBITDA less net cash interest expense, capital expenditures and cash paid for taxes. Direct Profit, Adjusted EBITDA and Free Cash Flow do not represent, and should not be considered as alternatives to, net (loss) income or cash flows from operations, as determined under U.S. generally accepted accounting principles, or GAAP.

We use Direct Profit and Adjusted EBITDA to facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting interest expense), taxation and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. In addition, we rely upon Direct Profit to analyze the performance of our segments, as it reflects all revenue and expenses directly attributable to our segments’ operations, including all corporate overhead expenses that are directly attributed to a segment and necessary to support its revenue, without regard to corporate overhead that is not directly attributable to a segment’s operations (such as expenses related to HR, finance, and accounting functions and expenses incurred in connection with an initial public offering). As a result, by removing these expenses, management can better analyze the factors that are, in fact, directly affecting the profitability of its core business segments at and within the segments. Further, while discretionary bonuses for members of management are not determined with reference to specific targets, our Board of Directors may consider Direct Profit, Adjusted EBITDA and Free Cash Flow when determining discretionary bonuses.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20160226005173r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20160226005173/en/

SOURCE: Townsquare Media, Inc.

Investor Relations 
Townsquare Media, Inc. 
Claire Yenicay, 203-900-5555 
investors@townsquaremedia.com


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