NYSE halts trading of Audacy stock to begin delisting proceedings

The New York Stock Exchange informed the Philadelphia-based audio provider of content that they would initiate a delisting procedure.

Audacy CEO David Field wrote to his employees that the NYSE had informed the company on Tuesday that its common stock was trading at an abnormally low price'.

Audacy's stock price dropped more than 12% from its close on Monday to 9 cents.

Field stated that Audacy's (NYSE: AUD), intends to appeal NYSE's delisting decision. Audacy planned to perform a reverse split in which shares of the company’s stock would be effectively merged into a smaller number and proportionally more valuable of shares. The value of each share would be greater than $1 if it split its shares in half at Monday's close price. According to sources, the company plans to reverse split its shares at its annual shareholders meeting on May 24, which is required by NYSE.

Field wrote in the memo that the timing of the events today was unfortunate, as a reverse split would have prevented us from tripping NYSE's abnormally lower selling price' standard.

Field stated that during the appeal period Audacy would remain a NYSE listed company, but NYSE trading would be suspended. The company's common stocks will then be traded over-the-counter. Audacy, according to Field, expects that the appeal process will take place during the summer. The company hopes to return to the exchange in the latter part of the year after implementing plans such as the reverse stock split and continuing to execute liability management plans. Field stated that Audacy could move its stock from one exchange to another if the appeal was unsuccessful.

Field stated that while the news was disappointing, it had no impact on Audacy’s ability to provide listeners with quality service or effectively run its operations. To be clear, business is as usual. All of our radio stations, digital platforms and podcasts will continue to operate normally. We are executing a robust plan of action to recover from the current situation.

The NYSE informed Audacy last August that the company was not complying with its listing requirements, which requires a minimum closing price per share of $1 over 30 consecutive trading day. Audacy faces the possibility of being delisted ever since.

Audacy's last time its stock price exceeded $1 was on July 5. Audacy closed its stock at 59c on August 1, when the NYSE sent their notice. The 9-cent share price is near the 52-week low, while the high was $1.94. This is a dramatic drop from the almost $11 that its stock traded at when Audacy purchased CBS Radio in November 2017

Audacy's top executives were asked some difficult questions by analysts last week after yet another quarter of falling revenue and soft demand for advertising. In the first quarter of 2018, the company saw a 5.7% decline in revenue, and an operating loss of $12 million. This compares to $8.5 million of operating income during the same period last year. The company reported an adjusted EBITDA loss of $3. 5 million and a $35.9-million net loss in the 1Q, compared with $26 million of adjusted EBITDA loss and $11 million of net loss in the first quarter of 2022.

The firm also stated that the soft advertising demands, which have been in place over the last year, could get worse before they get better.

Richard Schmaeling (chief financial officer) noted on the first quarter earnings call that the company had updated its guidance, which originally indicated that costs would be'slightly down' for the entire year, to say that they will be down by 4% or over $35 million.

Schmaeling stated that he wished he had a magic pen. He added that the company was doing "everything practical" to combat persistent ad weaknesses. Schmaeling said that there would be some difficult quarters, but the company was doing 'everything appropriate and practical' in order to reduce costs.

Audacy, according to Schmaeling, is currently working on the sale of other assets, which could bring the company savings of up to $20 million.

Audacy operates more than 200 radio stations in the United States, including six in Philadelphia. These stations will be located under the same roof in late 2019, at the corporate headquarters of the company at 2400 Market St. They include the adult contemporary station WBEB (FM), the classic hits station WOGL (FM), the Top 40 station TDY (96.5 TDY), SportsRadio 94 WIP (FM), the conservative talker WPHT (AM), and KYW Newsradio (1060 AM and 103.9 FM).