Townsquare will use cash to reduce leverage, targets 5x by year-end

By Devika Patel

Knoxville, Tenn., Nov. 30 – Townsquare Media, Inc. plans to continue de-levering and intends to reach its net leverage target of five times by the end of the year, two executives said on Wednesday.

“Our capital allocation priorities are twofold,” executive vice president, investor relations and corporate communications Claire Yenicay said at the Bank of America Merrill Lynch 2016 Leveraged Finance Conference in Boca Raton, Fla.

“We’ll either use cash to reduce net leverage, with our near-term goal of five times and our medium to long-term goal of four times, or to prudently pursue financially accretive acquisitions with a focus on strong assets with market leading positions,” Yenicay said.

The company’s chairman and chief executive officer, Steven Price, added that the company planned to meet its net leverage goal of around five times by the end of the year. Price said that the company plans to continue in its efforts to de-lever, despite its moderate free cash flow yield.

“Even at our leverage level, we have a nice free cash flow yield, 20-something percent,” Price said.

“On a net basis, our net short-term target by the end of the year is around five times and we’d like to get to four times.”

“Our board and our senior management mandate is to de-lever, and since last year, we’ve been doing that and we’re going to continue to do that,” Price said.

At the end of the third quarter, the company’s net leverage was 5.3 times.

Yenicay said that the company has about $580 million of debt outstanding, 50% of which is fixed rate and 50% of which is floating rate. Townsquare has a 5.3% weighted average interest rate and long dated maturities, Yenicay said, with the first coming due in 2022, and strong liquidity, with a $50 million undrawn revolver and approximately $38 million of cash on the balance sheet.

Townsquare is a Greenwich, Conn., operator of radio stations and websites in small- and mid-sized markets.

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