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• Our ability to finance our operations or to obtain financing on terms that are favorable to MediaCo;
−Removed: • Our ability to successfully complete and integrate any future acquisitions;
+Added: • Our ability to successfully complete and integrate acquisitions, including the recent transactions with Estrella Broadcasting, Inc.
+Added: and any future acquisitions;
• The accuracy of management’s estimates and assumptions on which the Company’s financial projections are based;
• Other factors mentioned in documents filed by the Company with the Securities and Exchange Commission.
−Removed: For a more detailed discussion of these and other risk factors, see the Risk Factors section of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 31, 2023 .
+Added: For a more detailed discussion of these and other risk factors, see the Risk Factors section of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 1, 2024 .
MediaCo does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.
−Removed: On December 9, 2022, Fairway Outdoor LLC, FMG Kentucky, LLC and FMG Valdosta, LLC (collectively, “Fairway”), all of which were wholly owned direct and indirect subsidiaries of MediaCo, entered into an Asset Purchase Agreement (the “Purchase Agreement”), with The Lamar Company, L.L.C., a Louisiana limited liability company (the “Purchaser”), pursuant to which we sold our Fairway outdoor advertising business to the Purchaser.
−Removed: The transactions contemplated by the Purchase Agreement closed as of the date of the Purchase Agreement.
−Removed: We have classified the related assets and liabilities associated with our Fairway business as discontinued operations in our condensed consolidated balance sheets and the results of our Fairway business have been presented as discontinued operations in our consolidated statements of operations for all periods presented through December 9, 2022 as the sale represented a strategic shift in our business that had a major effect on our operations and financial results.
−Removed: Unless otherwise noted, discussion in the management’s discussion and analysis refers to the Company's continuing operations.
−Removed: See Note 2 — Discontinued Operations in our condensed consolidated financial statements for additional information.
−Removed: We own and operate two radio stations located in New York City.
+Added: We own and operate two radio stations located in New York City, as well as the assets acquired in April 2024 in our transactions, with Estrella Broadcasting, Inc.
+Added: These assets include Estrella Media’s network, content, digital, and commercial operations.
+Added: Among the Estrella Media brands joining MediaCo are the EstrellaTV network and its influential linear and digital video content business, and Estrella Media’s expansive digital channels, including its four FAST channels – EstrellaTV, Estrella News, Cine EstrellaTV, and Estrella Games – and the EstrellaTV app.
Our revenues are mostly affected by the advertising rates our entities charge, as advertising sales are the primary component of our consolidated revenues.
−Removed: These rates are in large part based on our radio stations’ ability to attract audiences in demographic groups targeted by their advertisers.
−Removed: The Nielsen Company generally measures radio station ratings weekly for markets measured by the Portable People Meter™, which includes both of our radio stations.
−Removed: Because audience ratings in a radio station’s local market are critical to the station’s financial success, our strategy is to use market research, advertising and promotion to attract and retain audiences in each station’s chosen demographic target group.
+Added: These rates are in large part based on our stations’ ability to attract audiences in demographic groups targeted by their advertisers.
+Added: The Nielsen Company generally measures station ratings weekly for markets measured by the Portable People Meter™.
+Added: Because audience ratings in a station’s local market are critical to the station’s financial success, our strategy is to use market research, advertising and promotion to attract and retain audiences in each station’s chosen demographic target group.
Our revenues vary throughout the year.
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In addition, it is our general policy not to preempt advertising spots paid for in cash with advertising spots paid for in trade.
−Removed: The following table summarizes the sources of our revenues from continuing operations for the three and nine months ended September 30, 2023 and 2022.
+Added: The following table summarizes the sources of our revenues from continuing operations for the three months ended March 31, 2024 and 2023.
The category “Other” includes, among other items, revenues related to network revenues and barter.
−Removed: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2023 % of Total 2022 % of Total 2023 % of Total 2022 % of Total
+Added: (dollars in thousands) Three Months Ended March 31,
+Added: 2024 % of Total 2023 % of Total
Net revenues:
22 unchanged sentences
Some of our competitors that operate larger station clusters in the New York market are able to leverage their market share to extract a greater percentage of available advertising revenue through packaging a variety of advertising inventory at discounted unit rates.
−Removed: Market revenues in New York as measured by Miller Kaplan Arase LLP (“Miller Kaplan”), an independent public accounting firm used by the radio industry to compile revenue information, were down 4.6% for the nine months ended September 30, 2023, as compared to the same period of the prior year.
+Added: Market revenues in New York as measured by Miller Kaplan Arase LLP (“Miller Kaplan”), an independent public accounting firm used by the radio industry to compile revenue information, were up 4.5% for the three months ended March 31, 2024, as compared to the same period of the prior year.
Our gross revenues reported to Miller Kaplan were down 6.6%, as compared to the same period of the prior year.
−Removed: The decreases for our New York Cluster were largely driven by lower healthcare spend, which our stations benefited from more than those serving the general population in the prior year due to the targeted nature of the awareness campaigns.
+Added: The decreases for our New York Cluster were largely driven by lower spend in the media and financial sectors.
+Added: MediaCo relies on events to help bolster revenue and operating performance.
+Added: One of the key events is Summer Jam that occurs in June of each year.
+Added: Summer Jam is highly reliant on tickets sales and sponsorships to drive revenue.
+Added: Tickets sales are dependent on the performers and the venue chosen, which also impacts sponsorship revenue.
+Added: MediaCo is currently estimating risk around the year’s Summer Jam revenue with a potential revenue decline from 2023 in the range of $3.0 million to $3.6 million.
+Added: While this is offset by lower estimated operating costs, we are currently estimating operating profit could decline from 2023 in the range of $1.5 million to $2.1 million.
As part of our business strategy, we continually evaluate potential acquisitions of businesses that we believe hold promise for long-term appreciation in value and leverage our strengths.
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Our actual results may differ materially from these estimates.
−Removed: A complete description of our critical accounting estimates is contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on March 31, 2023.
+Added: A complete description of our critical accounting estimates is contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on April 1, 2024.
RESULTS OF OPERATIONS
−Removed: Three-Month and Nine-Month Periods Ended September 30, 2023 compared to September 30, 2022
+Added: Three-Month Periods Ended March 31, 2024 compared to March 31, 2023
The following discussion refers to the Company’s continuing operations.
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Net revenues:
−Removed: Three Months Ended September 30, Nine Months Ended September 30, 2023
−Removed: (dollars in thousands) 2023 2022 $ Change % Change 2023 2022 $ Change % Change
+Added: Three Months Ended March 31, 2024
+Added: (dollars in thousands) 2024 2023 $ Change % Change
Net revenues $ 6,706 $ 7,335 $ (629) (8.6) %
−Removed: Net revenues decreased for the three and nine months ended September 30, 2023 as a result of a substantial declines in healthcare spend as the COVID-19 vaccination awareness campaigns have slowed as well as in online gambling, automotive and wireless advertising spend.
−Removed: These decreases were partially offset for the nine months ended September 30, 2023 by stronger ticket sales and broadcast sponsorships of our annual Summer Jam concert, as well as by stronger tourism and live event advertising spend as the restrictions on travel, social gatherings, and business activities have continued to ease.
+Added: Net revenues decreased for the three months ended March 31, 2024 as lower spend in the media and financial sectors was offset by stronger telecommunications and healthcare spend.
We typically monitor the performance of our stations against the aggregate performance of the market in which we operate based on reports for the period prepared by Miller Kaplan.
Miller Kaplan reports are generally prepared on a gross revenues basis and exclude revenues from barter and syndication arrangements.
−Removed: Miller Kaplan reported gross revenues for the New York radio market decreased 4.6% for the nine-month period ended September 30, 2023, as compared to the same period of the prior year.
−Removed: Our gross revenues reported to Miller Kaplan were down 15.3% for the nine-month period ended September 30, 2023 , as compared to the same period of the prior year.
+Added: Miller Kaplan reported gross revenues for the New York radio market increased 4.5% for the three-month period ended March 31, 2024, as compared to the same period of the prior year.
+Added: Our gross revenues reported to Miller Kaplan were down 6.6% for the three-month period ended March 31, 2024 , as compared to the same period of the prior year.
Operating expenses excluding depreciation and amortization expense:
−Removed: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023
−Removed: 2023 2022 $ Change % Change 2023 2022 $ Change % Change
+Added: (dollars in thousands) Three Months Ended March 31, 2024
+Added: 2024 2023 $ Change % Change
Operating expenses excluding depreciation and amortization expense $ 6,650 $ 7,237 $ (587) (8.1) %
−Removed: Operating expenses excluding depreciation and amortization expense increased for the nine months ended September 30, 2023 compared to the same period in the prior year as lower Summer Jam production costs were partially offset by noncash lease expense related to the new office lease that commenced in February 2023 and professional service fees, which were mainly incurred during the first quarter.
−Removed: Operating expenses excluding depreciation and amortization expense increased for the three months ended September 30, 2023 compared to the same period in the prior year due to noncash lease expense related to the new office lease that commenced in February 2023.
+Added: Operating expenses excluding depreciation and amortization expense decreased for the three months ended March 31, 2024 compared to the same period in the prior year due to lower salary costs, lease expense, music license fees, and professional service fees.
Corporate expenses:
−Removed: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023
−Removed: 2023 2022 $ Change % Change 2023 2022 $ Change % Change
+Added: (dollars in thousands) Three Months Ended March 31, 2024
+Added: 2024 2023 $ Change % Change
Corporate expenses $ 3,390 $ 1,884 $ 1,506 79.9 %
−Removed: Corporate expenses decreased for the nine months ended September 30, 2023 due to lower stock based compensation expense driven by higher stock-based bonuses awarded in the prior year, partially offset by higher professional service fees.
−Removed: Corporate expenses decreased for the three months ended September 30, 2023 due to lower stock based compensation expense.
+Added: Corporate expenses increased for the three months ended March 31, 2024 due to higher professional service fees driven by the Estrella transaction, partially offset by lower salary and stock based compensation expenses.
Depreciation and amortization:
−Removed: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023
−Removed: 2023 2022 $ Change % Change 2023 2022 $ Change % Change
+Added: (dollars in thousands) Three Months Ended March 31, 2024
+Added: 2024 2023 $ Change % Change
Depreciation and amortization $ 133 $ 159 $ (26) (16.4) %
−Removed: Depreciation and amortization expense increased for the three and nine months ended September 30, 2023 due to intangible software costs related to our updated websites and mobile applications placed in service in the third quarter of 2022.
−Removed: Loss (gain) on disposal of assets:
−Removed: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023
−Removed: 2023 2022 $ Change % Change 2023 2022 $ Change % Change
−Removed: Loss (gain) on disposal of assets $ 11 $ — $ 11 — % $ (28) $ — $ (28) — %
−Removed: The gain on disposal of assets for the nine months ended September 30, 2023 relates to the sale of vehicles in the first quarter of 2023.
−Removed: The loss on disposal of assets for the three months ended September 30, 2023 relates to disposals of assets related to our previous office location.
+Added: Depreciation and amortization expense decreased for the three months ended March 31, 2024 due to certain assets becoming fully depreciated in the prior year.
+Added: Gain on disposal of assets:
+Added: (dollars in thousands) Three Months Ended March 31, 2024
+Added: 2024 2023 $ Change % Change
+Added: Gain on disposal of assets $ — $ (39) $ 39 — %
+Added: The gain on disposal of assets for the three months ended March 31, 2023 related to the sale of vehicles in the first quarter of 2023.
+Added: There were no such disposals in the current year.
Operating loss:
−Removed: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023
−Removed: 2023 2022 $ Change % Change 2023 2022 $ Change % Change
+Added: (dollars in thousands) Three Months Ended March 31, 2024
+Added: 2024 2023 $ Change % Change
Operating loss $ (3,467) $ (1,906) $ (1,561) 81.9 %
1 unchanged sentence
Interest expense, net:
−Removed: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023
−Removed: 2023 2022 $ Change % Change 2023 2022 $ Change % Change
+Added: (dollars in thousands) Three Months Ended March 31, 2024
+Added: 2024 2023 $ Change % Change
Interest expense, net $ (136) $ (103) $ (33) 32.0 %
−Removed: Interest expense, net decreased for the three and nine months ended September 30, 2023 due to the pay down in December 2022 of the senior credit facility, the conversion in July 2022 of the outstanding principal and accrued but unpaid interest of the SG Broadcasting promissory notes into the Company’s Class A common stock, and the partial conversions in August and December 2022 of $0.9 million of the outstanding principal of the Emmis convertible promissory notes into the Company’s Class A common stock, as well as a lower interest rate on the outstanding Emmis convertible promissory note after the pay down of the senior credit facility.
−Removed: This was partially offset by accrued interest on the Emmis convertible promissory note being paid in kind in the fourth quarter of 2022.
+Added: Interest expense, net increased for the three months ended March 31, 2024 due to accrued interest on the Emmis convertible promissory note being paid in kind in the fourth quarter of 2023, which increased the principal balance outstanding.
Provision for income taxes:
−Removed: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023
−Removed: 2023 2022 $ Change % Change 2023 2022 $ Change % Change
+Added: (dollars in thousands) Three Months Ended March 31, 2024
+Added: 2024 2023 $ Change % Change
Provision for income taxes $ 84 $ 75 $ 9 12.0 %
−Removed: Our provision for income taxes tax is primarily due to the recognition of additional valuation allowance.
+Added: Our provision for income taxes tax is primarily due to changes in deferred tax liabilities.
Consolidated net loss:
−Removed: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023
−Removed: 2023 2022 $ Change % Change 2023 2022 $ Change % Change
+Added: (dollars in thousands) Three Months Ended March 31, 2024
+Added: 2024 2023 $ Change % Change
Consolidated net loss $ (3,677) $ (2,107) $ (1,570) 74.5 %
3 unchanged sentences
Our primary uses of capital have been, and are expected to continue to be, capital expenditures, working capital and acquisitions.
−Removed: At September 30, 2023 , we had cash, cash equivalents and restricted ca sh of $9.6 million and net working capital of $10.3 million .
+Added: At March 31, 2024 , we had cash, cash equivalents and restricted ca sh of $7.2 million and negative working capital of $(1.4) million .
At December 31, 2023, we had cash, cash equivalents and restricted cash of $7.1 million and net working capital of $2.2 million.
−Removed: The decrease in cash was driven by payment of income taxes related to the gain on sale of Fairway and lower accounts receivable as sales declined in the current year.
−Removed: At September 30, 2023, we had $6.0 million of promissory notes outstanding to Emmis under the Emmis Convertible Promissory Note, all of which was classified as long-term and has no debt service requirements over the next twelve months.
+Added: The decrease in net working capital was driven by accrued expenses related to the Estrella transaction.
+Added: At March 31, 2024, we had $6.5 million of promissory notes outstanding to Emmis under the Emmis Convertible Promissory Note, all of which was classified as current and has debt service requirements of $7.3 million over the next twelve months.
As part of our business strategy, we continually evaluate potential acquisitions of businesses that we believe hold promise for long-term appreciation in value and leverage our strengths.
−Removed: Cash flows used by continuing operating activities were $3.7 million compared to cash flows provided by $3.4 million for the nine months ended September 30, 2023 and 2022, respectivel y.
−Removed: The decrease was mainly attributable to payments of income taxes, lower collections of accounts receivable in the current year, and strong collections in accounts receivable in the prior year.
−Removed: Cash flows used in continuing investing activities were $1.1 million for the nine months ended September 30, 2023, attributable to capital expenditures related to a new digital platform project and our build out of our new space for radio operations and corporate offices.
−Removed: C ash flows used in continuing investing activities were $1.4 million for the nine months ended September 30, 2022, attributable to purchases of internally-created software.
−Removed: Cash flows used in continuing financing activities were $1.1 million for the nine months ended September 30, 2023, attributable to repurchases of our Class A common stock and settlement of tax withholding obligations.
−Removed: Cash flows used in continuing financing activities were $3.1 million for the nine months ended September 30, 2022, attributable to settlement of tax withholding obligations and payments of long-term debt.
+Added: Cash flows provided by continuing operating activities were $0.4 million compared to cash flows provided by $0.8 million for the three months ended March 31, 2024 and 2023, respectivel y.
+Added: The decrease was mainly attributable to changes in working capital.
+Added: Cash flows used in continuing investing activities were $0.2 million for the three months ended March 31, 2024, attributable to capital expenditures related to a new digital platform project and our build out of our new space for radio operations and corporate offices.
+Added: C ash flows used in continuing investing activities were $0.5 million for the three months ended March 31, 2023, attributable to purchases of internally-created software.
+Added: Cash flows used in continuing financing activities were $0.1 million for the three months ended March 31, 2024, attributable to repurchases of our Class A common stock and settlement of tax withholding obligations.
+Added: Cash flows used in continuing financing activities were $0.7 million for the three months ended March 31, 2023, attributable to repurchases of our Class A common stock and settlement of tax withholding obligations.
+Added: In the 2023 Form 10-K filed on April 1, 2024, the Company stated that it had substantial doubt about its ability to continue as a going concern within one year after the date the financial statements were issued.
+Added: As a result of the consummation of the transactions contemplated by the asset purchase agreement and related debt and equity issuances discussed in Note 10 to these condensed consolidated financial statements, the conditions described in the 2023 Form 10-K that raised substantial doubt about whether the Company would continue as a going concern no longer exist.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.