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Emmis Communications Corp. Message Board

  • longtimefollower longtimefollower Oct 14, 2011 12:31 AM Flag

    Why I love EMMS.

    1) Paid down a good chunk of their term debt with sale of "stick" assets to Merlin.

    2) Sale of "stick" assets will allow them to save on the order of $10 M a year in annual interest expense, while losing very LITTLE in income, since stick assets generated very little in EBITDA.

    3) Company now has residual investment in Randy Michaels, a savvy player, and will realize gain or loss, on its retained interest, as I understand it, based upon its ratable share of the income of Merlin. If Michael's success comes quickly, that will show at EMMS just as quickly.

    4) Company has committed for agreement to sell LA station to Grupo Radio Centro for $110 M, sometime in the next 4 or so years...which would further reduce debt. It would certainly be possible that this deal could close EARLIER than 4 years out.

    5) Company's leverage ratio has been reduced significantly, dramatically reducing financial risk...and yet the stock still trades, puzzlingly, at what could only be referred to as a "distressed" level.

    6) Company may be in position to eventually refinance debt, and free up possibility of buying back preferred stock at a discount, or otherwise dealing with that issue, and creating other forms of financial flexibility which facilitate a broader array of opportunities for them.

    7) Possibility (certainly never out of the question, especially if the stock price stays this low, and/or if the company can manage to buy enough of the pfd. stock from the "dissenting" holders to prevent them from achieving an over 1/3 ownership), of CEO coming back in with another bid for the company (similar to 1 1/2 years ago). Previous bid was $2.40.

    8) EMMS continues to generally outperform, overall, in the markets where it still has stations.

    9) The new initiatives, talked about in today's conference call, could return the company to a growth posture.

    10) Terrestrial radio isn't NEARLY dying as much as some people say it is. It still delivers GREAT audiences for advertisers.

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