Townsquare Purchases Management Options
Townsquare Media announces that it has bought and retired 3 million options held by certain members of the management team and board of directors for a net purchase price of $3.62 per option. The purchase price reflects the spread between the closing price on April 3, 2024, of $12.36 and the option strike price of $8.74. The options, all of which were set to expire in July 2024, were granted to members of management and the board at the company’s initial public offering in July 2014. This transaction
follows last week’s repurchase of 1.5 million shares from MSG at $9.76 per share, the June 2023 repurchase of 1.5 million shares from MSG at $9.70 per share, and the March 2021 repurchase of 12.6 million shares and warrants from Oaktree Capital Management, L.P. at $6.40 per share. Like last week’s 1.5 million share repurchase from MSG, the purchase price of $10.8 million will be funded entirely with cash on hand. Townsquare CEO Bill Wilson comments, “We are very pleased to share that we were able to buy the IPO options at a net purchase price of $3.62 per option, eliminating the overhang and the shareholder dilution that would have occurred had these in-the-money options been exercised in the open market before they expired this July. The members of management and the board that were involved in this transaction have been with Townsquare for over a decade, demonstrating that our longterm incentive plan was, and continues to be, effective in retaining top talent. In total, our management team owns approximately 11% of shares outstanding today and are well aligned with the company’s investors to build shareholder value.”
Townsquare’s Cash Flow from Operations increased 35% year-over-year to $68 million, or approximately $4.07 per basic share based on shares outstanding as of March 28, 2024. Pro forma for this transaction, Cash Flow from Operations per basic share increased to approximately $4.47, representing accretion of approximately 10%. Following the transaction, the Company has 15.2 million shares outstanding. Townsquare CEO Bill Wilson says, “We are very pleased to share that we have repurchased just under 10% of our total shares outstanding in an immediately accretive transaction for our shareholders. Since 2021, we have repurchased 16.2 million shares at an average price of $7.19, while simultaneously reducing leverage. The strong cash generation characteristics of our business model, which produced $68 million of cash flow from operations in 2023, has afforded us the opportunity to accretively repurchase equity and debt, while also investing internally in our digital growth engine. In addition, we introduced a high-yielding dividend in 2023, and recently increased it by 5%. Our dividend has a yield of 7% as of March 28, 2024. With a strong cash balance of $40 million following this transaction, we will retain financial flexibility moving forward and we are confident in our ability to build shareholder value for our investors through long-term net revenue, Adjusted EBITDA and cash flow growth, net leverage reduction, future dividend payments, and potential future share repurchases.”