Audacy, Inc.

David Field - President, Chief Executive Officer Steve Fisher - Chief Financial Officer, Executive Vice President

Thank you operator and good everyone. Thanks for joining us on what is a beautiful day in the Northeast today, Monday.

First a few housekeeping notes. This call is being recorded.

A replay will be available on our company website shortly after the conclusion of today’s call and available by telephone replay at the number noted in our earnings release this morning. With our notice of today's call, we ask that you submit questions in advance of the call to the email address [email protected].

In addition, I’m always available for any follow-up questions if you’d wish to call me directly at 610-660-5647. Should the company make any forward-looking statements, such statements are based on current expectations and involve risks and uncertainties.

The company's actual results could differ materially from those projected. Additional information concerning factors that could cause these results to differ is described in the company's SEC filings on Forms 10-Q, 10-K and 8-K.

The company assumes no obligation to update any forward-looking statements. During this call we may reference certain non-GAAP financial measures.

We refer you to our website at entercom.com for a reconciliation of such measures and other pro forma financial information. So with that, we turn the call over to David Field, President and Chief Executive Officer.

Thanks Steve. Good morning everybody.

Thanks for joining today’s Entercom earnings call. I’ll start with a summary of the quarter’s financial highlights, followed by some color on recent developments and then update you on current business conditions and the status of our announced acquisition of Lincoln Financial Media.

Entercom’s first quarter revenues were up slightly over the prior year. We achieved significant market share gains, which offset sluggish advertising conditions.

These results were slightly better than the pacing’s we provided on our February earnings call reflecting some improvement during the back half of the quarter. Station operating expenses increased by 2%, resulting in a 6% decrease in station operating income.

Adjusted EBITDA decreased by 8%. Here is some addition data points for the quarter.

Local revenues were slightly better than national. As noted earlier, we gained significant share during the quarter as our growth compared favorably with our markets which were down 2%.

The strongest categories in the quarter were retail, financial, insurance, TV cable and entertainment, auto was flat. Telecom was clearly our poorest performing category as we pointed to you on our last call.

In fact excluding telecom our revenues were up 3% for the quarter. Our best performing markets were Boston, Portland, Buffalo and Milwaukee and we continue to perform well in the ratings across the station group, which we believe is a direct reflection of our focused commitment to build strong local brands around outstanding local personalities and content.

One great example of that strategy is Kansas City, where to point an adult contemporary station that we launched just in 2011 reached number one in the market in the latest ratings with both and woman and adults 25-54, and The Buzz, an alternative station, reached number one with adults 18-49 and 18-34, while the Rock reached number one with men 25-54. We also continue to do quite well with our other brands in Kansas City, each of which features strong local personalities.

I noted earlier that our expenses were up 2% for the quarter; that reflects a 1% increase in core station expenses, plus 1% attributable to start-up costs as our SmartReach digital initiative which we launched last year. SmartReach revenues continue to grow rapidly quarter-to-quarter, albeit from what remains a low base.

Excluding SmartReach our revenues would have been flat. Forward bookings for SmartReach are growing significantly quarter-to-quarter and we expect our SmartReach digital market solutions product line to become an increasingly important part of our customer offerings in the future.

Turning to the current business climate, second quarter business conditions are mixed and we are currently pacing flat. That said, adjusting for political revenues which rolled in during May and June of 2014, we are pacing down 1%.

June is currently pacing up four, while April and May are down low single digits. While it’s still very early, third quarter was currently pacing up 4%.

Since this is the first earnings call for the New Year, I’d like to share with you my excitement about our platform and the opportunities in front of us, including the potential for significant growth in our revenues, our revenues EBITDA and free cash flow. We see five meaningful growth drivers in the quarters ahead.

First, we feel very good about the opportunity to grow our core revenues and cash flow based on the strength of our highly rated brands and operating team. We remain highly focused on enhancing our valuable listeners and to improving the effectiveness of our sales organization.

Both of these efforts are bearing fruit. Second, as many of you know we have an attractive window later this year to refinance our expense of high yield notes, which alone could result in a boost of $0.25 to $0.30 per share from interest savings.

Third, our SmartReach initiative: Right now SmartReach is an investment and development period during which it’s reducing earnings to company. But as revenues continue to grow, we see SmartReach evolving into a nice contributor to our future performance.

Fourth is the Lincoln acquisition. As we have noted previously, Lincoln will add a wonderful collection of brands and markets, which will benefit from the pure play focus on our operating team.

While we are highly frustrated with the regulatory progress, we remain very excited about this opportunity and expect this acquisition to be accretive to shareholders in its first year of operations, while only having a minimal impact on our balance sheet. In the meantime we are working to comply with the DOJ review of this transaction, which would provide us with a second place position with a 32% pro forma share of the Denver radio market.

Finally, the fifth driver is the potential for industry acceleration. Radio is the least disrupted tradition ad medium with massive reach and strong usage trends and is the number one medium in the United States between 5 am and 5 pm daily.

But radio also remains the most undervalued medium as we have noted on many previous occasions. However, I believe the evidence is growing that radio’s perceptions are starting improve, particularly as competitive media are being increasingly disrupted and challenged.

For example, on our last call I cited remarks from the CEO of BBDO, who recently noted that radio is a massively underutilized medium, and I think it is worth noting the impact of iHeartMedia's significant efforts to Champion Radio with major advertisers and agency. All of us are doing lot of great work on this, but as the largest player in the industry, iHeart is showing particular progress in their efforts to change radios perceptions and gain new and incremental business from major advertisers like General Motors and I think that bodes well for the entire radio industry.

We think their Q1 revenue growth at a time of sluggish conditions in the general ad market is meaningful and a possible harbinger of broader based industry improvement in the future. So in sum, we are very excited about the future and the opportunities in front of us and with that I’ll turn it over to Steve for some additional thoughts before we turn to your questions.

Thanks David. Following off on a few comments on the first quarter and then some color on the balance sheet, first quarter station operating expenses were up 2% over the prior year, which is in line with our guidance to you on the last call.

Our core station expenses were up slightly as David noted with the increased results from year-over-year comparison on the rollout of SmartReach, out digital initiative which was launched and began to ramp in the second quarter of last year. Looking forward to the second quarter, we expect station operating expenses to be up by about 4% with expenses at our core stations up about 2% and our digital investments adding another couple of points to that expected expense growth.

Now note that this growth in our core station expenses is merely a timing issue on some discretionary spending for the year, not a change in our business model or our prior guidance to you of full year operating expenses at the station line of 2% to 3%. Our corporate G&A expense in the first quarter was flat with over the prior year.

In the first quarter we had about $1.7 million of expenses related to our announced transaction with Lincoln. You will see this reflected in a separate line item merger and acquisition expense.

As David noted, we are now in the final stages of producing voluminous material and tons of information in response to the second request by the department of justice. We currently expect about $2 million to $2.5 million in compliance cost for this project in the second quarter.

This will be reflected in the M&A expense line. Net interest expense for the first quarter was $9.3 million.

This amount includes about $800,000 in amortization of non-cash interest items and I would expect a similar net interest expense in the second quarter since we are building our cash balances versus paying down debt at this time. Non-cash compensation expense was around $1.1 million for the first quarter.

That’s a little lighter than my expectations for the remainder of the year, which I would model at $1.2 million to $1.3 million per quarter. Turning to the balance sheet, our capital expenditures for the quarter were at $2 million and we guided the full year in our recent 10-K to between $8 million and $9 million.

I would note that that would exclude any impact from the Lincoln acquisition, but that does include a few one-time larger projects. Starting last fall we began to accumulate cash from operations in anticipation of our Lincoln transaction and at the end of the first quarter we had almost $47 million in available cash, plus we have our $50 million undrawn revolver facility.

So you can see that we have plenty of liquidity and flexibility on our balance sheet. And as we said to you since our December announcement of this transaction, we will wait until we are closer to assuming operations to give you color and pro forma expectations on the business model and the balance sheet from the Lincoln transaction.

So the theme at Entercom continues to be cash flow and are continuously improving balance sheet. We are getting closer to the window where we can efficiently refinance some of our capital structure at significant savings and a boost of free cash flow per share and the pending Lincoln transaction provides further upside and reward, so it should be and we hope it to be a very interesting and hopefully rewarding year for our shareholders.

So with that David we’ll go to questions in advance, some of which I apologize to those of you who asked. I think we’ve addressed in our remarks, but the ones that I think that are significant that we left over and the first from Marcie Ryvicker.

David you gave some color on the first quarter, but could you give any commentary on performance by market, large market versus small market and also month by month performance throughout the first quarter.

Thank you all. I appreciate you joining us here this morning and we’ll be back soon.