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BREAKING NEWS: Townsquare Completes Sale Of North American Midway Entertainment
Friday, May 25, 2018
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GREENWICH, Conn., May 24, 2018 /PRNewswire/ -- Townsquare Media, Inc. (NYSE: TSQ) ("Townsquare" or the "Company") announced today that it has completed the sale of North American Midway Entertainment, LLC ("NAME") to North American Fairs, LLC, an entity owned by Danny Huston, for $23.5 million plus a 15% residual interest in any future proceeds of a sale of NAME in the next ten years.

NAME is North America's largest mobile amusement company, entertaining approximately 16 million people on an annual basis as the owner and operator of amusement attractions at approximately 150 fairs per year across the United States and Canada. NAME has been a subsidiary of the Company since it was acquired in 2015. In 2017, the Company announced that it was initiating a strategic review of its Entertainment segment, which included NAME.

Under the terms of the purchase agreement, North American Fairs, LLC will acquire all of the issued and outstanding membership interests of NAME's parent company, Heartland Group, LLC, from the Company for total cash consideration of $23.5 million. In addition, Townsquare will have the right to receive 15% of any sale proceeds if NAME is sold, in whole or in part, in the next ten years. The Company expects to hold the net cash proceeds from the sale on its balance sheet, pending reinvestment.

For the year ended December 31, 2017, NAME generated net revenue, net loss, Adjusted EBITDA and capital expenditures of $92.2 million, $33.7 million, $7.3 million and $6.3 million, respectively. Pro forma for the divestiture of NAME, Townsquare's 2017 net revenue, net income, Adjusted EBITDA and capital expenditures were $415.2 million, $23.4 million, $89.9 million and $16.5 million, respectively.

Reporting Impact and Guidance
Due to this transaction, Townsquare's second quarter and full year guidance will no longer include NAME. In addition, beginning with its Quarterly Report on Form 10-Q for the second quarter of 2018, Townsquare intends to consolidate its reporting into a single reportable segment, eliminating its Local Marketing Solutions and Entertainment segment classifications.

Excluding NAME, for the second quarter ending June 30, 2018, Townsquare expects to report net revenue of between $114 and $118 million, and Adjusted EBITDA of between $25 and $27 million. Excluding NAME, for the full year ending December 31, 2018, Townsquare expects to report net revenue of between $413 and $421 million, and Adjusted EBITDA of between $93 and $95 million.

The above guidance estimate reflects management's view of current and future market conditions, including assumptions with respect to sales, expenses and the earnings impact of the events referenced in this release and previously disclosed. The guidance also reflects management's view of market conditions. The estimates do not include future gains or losses, or the impact on operating results from future acquisitions or dispositions or market activity. This guidance is a forward-looking statement and is subject to the risks and other factors described elsewhere in this release and in the Company's annual and quarterly periodic reports filed with the Securities and Exchange Commission.

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