Entercom improves free cash flow, reduces debt as revenues decline

By Jennifer Lanning Drey

Portland, Ore., Feb. 24 - Entercom Communications Corp. posted a 3% increase in free cash flow in 2008 and reduced long-term debt by $140 million during the year, David Field, chief executive officer of Entercom, said Tuesday during its fourth-quarter earnings conference call.

The free cash flow, which was $94.2 million for the year, benefited from a significant reduction in financing expense, he said.

At the same time, the company's revenues were challenged by difficult general economic conditions. Net revenues for the year decreased 6% to $438.8 million, while fourth-quarter net revenues decreased 14% to $104.1 million.

The company's 2008 debt reduction included the repurchase of $66.5 million of senior subordinated notes at a discount. Entercom repurchased $8.5 million of the notes during the fourth quarter.

When asked about its available capacity to buy back additional bonds in 2009, chief financial officer Steve Fisher said the company could look to its significant unused revolver availability. However, the leverage covenant in the company's senior bank agreement focuses on total debt, so the leverage calculation would not be improved if it were to do so.

Entercom does not have a specific leverage target it is looking to achieve, he said.

In light of the declining revenues, Entercom has reduced expenses while continuing to increase investments in new technologies, new revenue initiatives and in sales and marketing capabilities to drive further growth, Field said.

The company remains optimistic about its long-term potential, he said.

"We are optimistic as we look to the future. Radio's strong underlying fundamentals and compelling value proposition should enable it to gain share from other media facing significant secular issues," he said.

Entercom is a Bala Cynwyd, Pa., radio broadcasting company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.