Mediaco Holding Inc 10-Q for FY2020 Q3

Mediaco Holding Inc. (MDIA)

10-Q 2020-11-13 For: 2020-09-30

Added on April 11, 2026

About this 10-Q

Mediaco Holding Inc filed this 10-Q on November 13, 2020, covering the quarter ended September 30, 2020 (FY2020 Q3).

Headline figures

Quarter ended September 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $9.36M; down 15.0% from $11.01M a year earlier
Net loss: $2.99M; compared with net income of $1.44M a year earlier

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Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A common stock, $0.01 par value	MDIA	Nasdaq Capital Market

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☒

		Emerging growth company	☒


1,785,880		Shares of Class A Common Stock, $.01 Par Value
5,413,197		Shares of Class B Common Stock, $.01 Par Value
—		Shares of Class C Common Stock, $.01 Par Value


	Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements	3
Condensed Consolidated and Combined Statements of Operations for the three-month and nine-month periods ended September 30, 2019 and 2020	3
Condensed Consolidated Balance Sheets as of December 31, 2019 and September 30, 2020	4
Condensed Consolidated and Combined Statement of Changes in Equity (Deficit) for the three-month and nine-month periods ended September 30, 2019 and 2020	5
Condensed Consolidated and Combined Statements of Cash Flows for the nine-months periods ended September 30, 2019 and 2020	6
Notes to Condensed Consolidated and Combined Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures about Market Risk	29
Item 4. Controls and Procedures	29
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 6. Exhibits	31
Signatures	32

	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2020			2019		2020
NET REVENUES	$	11,007	$	9,360		$	35,487	$	28,141
OPERATING EXPENSES:
Operating expenses excluding depreciation and amortization expense		8,672		7,752			27,837		23,615
Corporate expenses		—		1,214			—		3,311
Depreciation and amortization		280		896			931		3,086
Loss on disposal of assets		—		103			—		185
Total operating expenses		8,952		9,965			28,768		30,197
OPERATING INCOME (LOSS)		2,055		(605	)		6,719		(2,056	)
OTHER EXPENSE:
Interest expense		—		(2,411	)		—		(6,928	)
INCOME (LOSS) BEFORE INCOME TAXES		2,055		(3,016	)		6,719		(8,984	)
PROVISION (BENEFIT) FOR INCOME TAXES		613		(22	)		2,129		13,854
CONSOLIDATED NET INCOME (LOSS)		1,442		(2,994	)		4,590		(22,838	)
PREFERRED STOCK DIVIDENDS		—		534			—		1,591
NET INCOME (LOSS)	$	1,442	$	(3,528	)	$	4,590	$	(24,429	)

Basic and diluted income (loss) per share attributable to common shareholders	$	0.87	$	(0.50	)	$	2.75	$	(3.44	)
Basic and diluted weighted average number of common shares outstanding		1,667		7,096			1,667		7,110

	December 31, 2019			September 30, 2020
				(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,083		$	6,702
Accounts receivable, net		11,101			7,046
Prepaid expenses		1,111			975
Other current assets		1,798			956
Total current assets		16,093			15,679
PROPERTY AND EQUIPMENT, NET		31,563			28,270
INTANGIBLE ASSETS, NET		78,949			79,499
OTHER ASSETS:
Deferred tax assets		13,863			—
Operating lease right of use assets		26,339			24,369
Deposits and other		359			331
Total other assets		40,561			24,700
Total assets	$	167,166		$	148,148
LIABILITIES AND EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	11,184		$	2,213
Current maturities of long-term debt		3,672			918
Accrued salaries and commissions		728			636
Deferred revenue		1,688			1,543
Operating lease liabilities		3,161			3,055
Other current liabilities		346			2,136
Total current liabilities		20,779			10,501
LONG TERM DEBT, NET OF CURRENT		77,668			93,025
OPERATING LEASE LIABILITIES, NET OF CURRENT		22,983			21,056
ASSET RETIREMENT OBLIGATIONS		5,623			6,176
OTHER NONCURRENT LIABILITIES		239			310
Total liabilities		127,292			131,068
COMMITMENTS AND CONTINGENCIES
SERIES A CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK, $0.01 PAR VALUE, 10,000,000 SHARES AUTHORIZED; 220,000 SHARES ISSUED AND OUTSTANDING		22,110			23,701
EQUITY (DEFICIT):
Class A common stock, $0.01 par value; authorized 170,000,000 shares; issued and outstanding 1,666,667 shares and 1,785,880 shares at December 31, 2019, and September 30, 2020, respectively		17			18
Class B common stock, $0.01 par value; authorized 50,000,000 shares; issued and outstanding 5,359,753 shares and 5,413,197 shares at December 31, 2019, and September 30, 2020, respectively		54			54
Class C common stock, $0.01 par value; authorized 30,000,000 shares; none issued		—			—
Additional paid-in capital		20,644			20,687
Accumulated deficit		(2,951	)		(27,380	)
Total equity (deficit)		17,764			(6,621	)
Total liabilities and equity (deficit)	$	167,166		$	148,148

	Class A Common Stock				Class B Common Stock
	Shares		Amount		Shares		Amount		APIC		Net Parent Investment			Accumulated Deficit			Total
BALANCE, DECEMBER 31, 2018		—	$	—		—	$	—	$	—	$	79,810		$	—		$	79,810
Net income		—		—		—		—		—		628			—			628
Net distributions to Emmis Communications Corp.		—		—		—		—		—		(3,451	)		—			(3,451	)
BALANCE, MARCH 31, 2019		—	$	—		—	$	—	$	—	$	76,987		$	—		$	76,987
Net income		—		—		—		—		—		2,520			—			2,520
Net distributions to Emmis Communications Corp.		—		—		—		—		—		(2,352	)		—			(2,352	)
BALANCE, JUNE 30, 2019		—	$	—		—	$	—	$	—	$	77,155		$	—		$	77,155
Net income		—		—		—		—		—		1,442			—			1,442
Net distributions to Emmis Communications Corp.		—		—		—		—		—		(2,403	)		—			(2,403	)
BALANCE, SEPTEMBER 30, 2019		—	$	—		—	$	—	$	—	$	76,194		$	—		$	76,194

BALANCE, DECEMBER 31, 2019		1,666,667	$	17		5,359,753	$	54	$	20,644	$	—		$	(2,951	)	$	17,764
Net loss		—		—		—		—		—		—			(1,485	)		(1,485	)
Adjustments related to distribution of common shares		16,596		—		53,444		—		—		—			—			—
Preferred stock dividends		—		—		—		—		—		—			(529	)		(529	)
BALANCE, MARCH 31, 2020		1,683,263	$	17		5,413,197	$	54	$	20,644	$	—		$	(4,965	)	$	15,750
Net loss		—		—		—		—		—		—			(18,359	)		(18,359	)
Preferred stock dividends		—		—		—		—		—		—			(528	)		(528	)
BALANCE, JUNE 30, 2020		1,683,263	$	17		5,413,197	$	54	$	20,644	$	—		$	(23,852	)	$	(3,137	)
Net loss		—		—		—		—		—		—			(2,994	)		(2,994	)
Issuance of class A to employees, officers and directors		102,617		1		—		—		43		—			—			44
Preferred stock dividends		—		—		—		—		—		—			(534	)		(534	)
BALANCE, SEPTEMBER 30, 2020		1,785,880	$	18		5,413,197	$	54	$	20,687	$	—		$	(27,380	)	$	(6,621	)

	Nine Months Ended September 30,
	2019			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	4,590		$	(22,838	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities -
Depreciation and amortization		931			3,086
Amortization of debt discount		—			440
Provision for bad debts		184			538
Accretion of asset retirement obligation		—			566
Provision for deferred income taxes		1,690			13,856
Noncash compensation		192			44
Loss on sale of property and equipment		—			186
Changes in assets and liabilities -
Accounts receivable		248			3,317
Prepaid expenses and other current assets		(70	)		1,005
Other assets		986			2,107
Accounts payable and accrued liabilities		833			(9,108	)
Deferred revenue		(20	)		(138	)
Income taxes		371			—
Other liabilities		(1,457	)		(266	)
Net cash provided by (used in) operating activities		8,478			(7,205	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(175	)		(339	)
Net cash used in investing activities		(175	)		(339	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term debt		—			(1,837	)
Proceeds from long-term debt		—			14,281
Payments for debt-related costs		—			(281	)
Net transactions with Emmis Communications Corp.		(8,303	)		—
Net cash (used in) provided by financing activities		(8,303	)		12,163
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		—			4,619
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period		—			2,083
End of period	$	—		$	6,702
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	—		$	4,732

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2020		2019		2020
Station operating expenses, excluding depreciation and amortization expense	$	596	$	—	$	1,810	$	—
Noncash compensation		60		—		192		—
Allocated charges from Emmis	$	656	$	—	$	2,002	$	—

	Awards		Price
Grants outstanding, beginning of period		—	$	—
Granted		102,617		5.41
Grants outstanding, end of period		102,617		5.41

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2020		2019		2020
Operating expenses, excluding depreciation and amortization	$	60	$	—	$	192	$	—
Corporate expenses		—		44		—		44
Share-based compensation expense	$	60	$	44	$	192	$	44

	As of December 31, 2019						As of September 30, 2020
	(in 000's, except years)
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Useful Life (in years)
Programming agreement	$	2,154	$	1,640	$	514	$	2,154	$	1,860	$	294	1.0
Customer list		3,030		14		3,016		2,906	767			2,139	2.2

Year ending December 31,	Expected Amortization Expense
Remainder of 2020	$	316
2021		1,189
2022		928

	December 31, 2019			September 30, 2020
Senior credit facility	$	72,527		$	70,972
Notes payable to Emmis		5,000			5,000
Notes payable to SG Broadcasting		6,250			20,250
Less: Current maturities		(3,672	)		(918	)
Less: Unamortized original issue discount		(2,437	)		(2,279	)
Total long-term debt, net of current portion and debt discount	$	77,668		$	93,025


Year ended December 31,	Senior Credit Facility		Emmis Note		SG Broadcasting Notes		Total Payments
Remainder of 2020	$	—	$	—	$	—	$	—
2021		1,836		—		—		1,836
2022		3,672		—		—		3,672
2023		3,672		—		—		3,672
2024		61,792		5,000		—		66,792
Thereafter		—		—		20,250		20,250
Total	$	70,972	$	5,000	$	20,250	$	96,222

	For the Three Months Ended September 30,										For the Nine Months Ended September 30,
	2019		% of Total			2020		% of Total			2019		% of Total			2020		% of Total
Revenue by Source:
Radio Advertising	$	7,925		72.0	%	$	4,633		49.5	%	$	21,433		60.4	%	$	13,641		48.5	%
Outdoor Advertising		—		0.0	%		2,957		31.6	%		—		0.0	%		9,254		32.9	%
Nontraditional		1,027		9.3	%		203		2.2	%		8,002		22.5	%		451		1.6	%
Digital		793		7.2	%		476		5.1	%		2,543		7.2	%		1,490		5.3	%
Other		1,262		11.5	%		1,091		11.7	%		3,509		9.9	%		3,305		11.7	%
Total net revenues	$	11,007				$	9,360				$	35,487				$	28,141

Cash consideration	$	43,108
Due from Seller		(106	)
Total Consideration	$	43,002

Accounts receivable	$	1,485
Other current assets		133
Property, plant and equipment		28,640
Operating lease, right-of-use assets		15,376
Goodwill		13,061
Intangibles (Note 5)		3,636
Deferred tax asset		1,032
Other assets		15
Assets Acquired	$	63,378
Accounts payable	$	73
Accrued expenses and other current liabilities		585
Current portion of operating lease liabilities		859
Operating lease liabilities, less current portion		12,320
Asset retirement obligations (Note 11)		5,634
Deferred revenue		753
Other noncurrent liabilities		152
Liabilities Assumed	$	20,376
Net Assets Acquired	$	43,002

	Nine Months Ended September 30,
	2020
Lease Cost
Operating lease cost	$	3,740
Other Information
Operating cash flows from operating leases		3,754
Right-of-use assets obtained in exchange for new operating lease liabilities		—
Weighted average remaining lease term - operating leases (in years)		9.1
Weighted average discount rate - operating leases		9.1	%

Year ending December 31,
Remainder of 2020	$	1,659
2021		5,152
2022		5,054
2023		4,080
2024		2,668
After 2024		18,646
Total lease payments		37,259
Less imputed interest		13,148
Total recorded lease liabilities	$	24,111

Year ending December 31,
Remainder of 2020	$	1,965
2021		2,325
2022		—
2023		—
2024		—
After 2024		—

Balance at December 31, 2019	$	5,623
Purchase price allocation adjustment		44
Accretion expense		566
Liabilities settled		(57	)
Balance at September 30, 2020	$	6,176

	Nine Months Ended September 30, 2019
Net revenues	$	45,831
Net income attributable to common shareholders		2,567

Three Months Ended September 30, 2020	Radio		Outdoor Advertising		All Other			Consolidated
Net revenues	$	6,200	$	3,160	$	—		$	9,360
Operating expenses excluding and depreciation and amortization expense		5,573		2,179		—			7,752
Corporate expenses		—		—		1,214			1,214
Depreciation and amortization		208		688		—			896
Loss on disposal of assets		—		103		—			103
Operating income (loss)	$	419	$	190	$	(1,214	)	$	(605	)

Three Months Ended September 30, 2019	Radio		Outdoor Advertising		All Other		Consolidated
Net revenues	$	11,007	$	—	$	—	$	11,007
Operating expenses excluding depreciation and amortization expense		8,672		—		—		8,672
Depreciation and amortization		280		—		—		280
Operating income	$	2,055	$	—	$	—	$	2,055

Nine Months Ended September 30, 2020	Radio		Outdoor Advertising		All Other			Consolidated
Net revenues	$	18,368	$	9,773	$	—		$	28,141
Operating expenses excluding depreciation and amortization expense		16,509		7,106		—			23,615
Corporate expenses		—		—		3,311			3,311
Depreciation and amortization		689		2,397		—			3,086
Loss on disposal of assets		—		185		—			185
Operating income (loss)	$	1,170	$	85	$	(3,311	)	$	(2,056	)

	MEDIACO HOLDING INC.

Date: November 13, 2020	By:	/s/ RYAN A. HORNADAY
		Ryan A. Hornaday
		Executive Vice President, Chief Financial Officer and
		Treasurer

Date: November 13, 2020
	/s/ JEFFREY H. SMULYAN
	Jeffrey H. Smulyan
	Chief Executive Officer