NEW YORK, May 17 /PRNewswire-FirstCall/ -- Westwood One,
Inc. (Nasdaq: WWON), a leading independent provider of network
radio content and traffic information to the radio, television and
on-line sectors, today reported operating results for the first
quarter ended March 31, 2010.
"In the first quarter of 2010, revenue increased by $6.9 million or 8.1%, from $85.9 million to $92.8 million, which was
Westwood One's first year-over-year quarterly revenue increase
since 2005," said Rod Sherwood,
President. "Revenue increased in both of our businesses, with
Network Radio up 8.6% and Metro Traffic up 7.5%, reflecting
increased advertising spending both nationally and locally. In
addition to reflecting the initial signs of growth in the economy,
this increase is also a result of our strategic focus on meeting
the needs of our advertising and affiliate customers, and investing
in areas with the most potential for revenue growth."
Westwood One's earnings (on an Adjusted EBITDA basis) increased
approximately $9.0 million, from a
loss of $6.9 million in the first
quarter of 2009 to an Adjusted EBITDA profit of $2.1 million in the first quarter of 2010. This
increase is primarily the result of increased advertising revenue,
and lower operating costs resulting from the Company's cost
reduction initiatives.
"The measures we took in 2009 positioned us to take advantage of
a recovering economy with a re-structured balance sheet, a
strengthened sales force, and strong programming to attract
targeted audiences for our advertisers and affiliates," said
Sherwood. "We are beginning to see positive results from our
actions, and early pacing for the second quarter is
encouraging."
In Network Radio, Westwood One's leadership position in
play-by-play sports programming provided many opportunities to
effectively reach consumers and listeners. As the exclusive
network radio partner of the NFL, Westwood One broadcast every game
of the NFL playoffs, capping off the season with a Super Bowl
broadcast which aired on a record-breaking 650 radio stations.
Westwood One's first quarter sports line-up also included the
2010 NCAA Men's Basketball Championship, leading up to, and
including, the Final Four, which aired on a record-breaking 500
affiliate stations. In addition, Westwood One and the Masters
Tournament renewed the longest-running national radio partnership
in all of sports, maintaining Westwood One as the exclusive 2010
radio play-by-play provider from Augusta National Golf Club.
In another development, Westwood One announced an agreement with
Harpo Radio to bring The Gayle King Show to terrestrial
broadcast radio listeners nationwide in June
2010, as well as to launch a new nightly music program
hosted by the acclaimed newscaster and television personality
entitled Night & Gayle. In addition, Westwood One
will also present a daily feature from Dr. Mehmet Oz, host of daytime television's newest
hit, The Dr. Oz Show.
Westwood One also introduced The Fab 30 Countdown with
Perez Hilton in partnership with
C-Student Entertainment. The four-hour weekend countdown show,
broadcast live from Los Angeles,
features hit music selected by celebrity blogger Perez Hilton, plus his unique take on
entertainment stories, and celebrity interviews.
In Metro Traffic, the Company announced the acquisition of the
Sigalert business from Jaytu Technologies, LLC, a leading regional
provider of traffic information. Sigalert is a source for the most
up-to-date, useful traffic information in Southern California, one of the most highly
congested traffic areas in the country. In 2010, Westwood One's
Sigalert product will provide affiliate radio stations the best
on-air, on-line and mobile traffic products, and will give Metro's
television affiliates a "three-screen" solution with a consistent
look across their television, Web and mobile products.
Three Months Ended March 31,
2010
For the three months ended March 31,
2010, revenue increased $6.9
million or 8.1%, to $92.8
million compared with $85.9
million for the three months ended March 31, 2009. This increase in revenue
for the first quarter was the first year-over-year quarterly
increase since the second quarter of 2005.
For the first three months of 2010, Network revenue increased to
$55.6 million from $51.2 million for the first three months of 2009,
an increase of $4.4 million, or 8.6%.
Network advertising sales, the largest component of Network
revenue, increased by 10%. This resulted primarily from increased
sports advertising revenue, including the 2010 Winter Olympics and
the NCAA Men's Basketball Championship and NFL games, as well as
new programming for The Weather Channel.
Metro Traffic revenue for the first three months of 2010 was
$37.3 million, an increase of
$2.6 million, or 7.5%, from
$34.7 million for the first three
months of 2009. The increase in Metro Traffic revenue was
principally related to an increase in revenue from television and
radio advertising, primarily in the automotive and quick service
restaurant sectors.
The operating loss in the first quarter of 2010 was $6.6 million compared with an operating loss of
$19.6 million in 2009, or a decrease
in operating loss of $13.0 million.
The decreased loss reflects the increase in revenue, lower
operating costs, and lower restructuring and special charges. These
were partially offset by higher depreciation and amortization
expense of $2.4 million, primarily
attributable to the increase in the fair value of amortizable
intangibles that were recorded as a result of the April 2009 refinancing ("Refinancing").
Adjusted EBITDA (1) for the first quarter of 2010 was
$2.1 million compared with a loss of
$6.9 million in 2009. The improvement
was due to increased Network Radio, Metro television, and Metro
Traffic radio revenue and lower operating costs resulting from our
cost reduction programs, primarily enacted in late 2008 and
2009.
Interest expense in the first quarter of 2010 increased
$2.3 million, or 70.6%, to
$5.6 million from $3.3 million in the first quarter of 2009. This
reflects the higher average interest rates on our outstanding debt,
which resulted from the Refinancing, and increased interest expense
related to capital leases incurred in connection with the
December 2009 Culver City sale-leaseback transaction.
The Company's tax benefit decreased $2.2
million to $5.2 million in 2010 compared to $7.4 million in 2009 due to a lower pre-tax loss
in the first quarter of 2010 as compared to the first quarter of
2009, partially offset by a higher effective tax rate.
For the first quarter of 2010, net loss was $6.9 million, or $0.34 per diluted share, compared with a net loss
in the first quarter of 2009 of $15.2
million, or $33.95 per diluted
share. Per share amounts reflect the effect of the 200-for-1
reverse stock split of our common stock that occurred on
August 3, 2009. First quarter
2009 average share amounts are significantly lower than first
quarter 2010 as a result of the conversions of shares of preferred
stock in July and August 2009.
Free cash flow (2) in the first quarter of 2010 increased to
$2.7 million from $1.0 million in 2009, an increase of $1.7 million. This was due to the favorable
change in net loss of $8.3 million,
partially offset by changes in working capital of $5.6 million and higher capital expenditures of
$1.0 million.
2010 Outlook
We remain cautiously optimistic about growth in advertising
spending during 2010. Industry research sources are revising their
earlier forecasts slightly upward, but local radio remains at
relatively low levels of growth. Magna, a division of IPG's
Mediabrands, forecasts that local radio is expected to grow by
0.6%. Other industry sources forecast increases in local
radio of 2%, and network radio of 6%.
Our strategies remain consistent with those stated at the end of
2009. While continuing revenue gains will likely improve our
operating leverage, we will continue to make targeted investments
in the business to enhance our competitive position in 2010 and
beyond. That said, we will continue to evaluate our cost
structure to maintain the appropriate levels of liquidity.
We will continue to invest in new programming, while also
identifying, and investing in, opportunities for expanded content
and distribution in Metro television and digital. We will maintain
our focus on improving our infrastructure and we will continue to
seek opportunities to complement our organic growth strategy with
strategic partnerships and select business development activity
like SigAlert.
About Westwood One
Westwood One, Inc. (NASDAQ: WWON) is one of the nation's largest
providers of network radio programming and one of the largest
domestic outsourced providers of traffic information in the U.S.
Westwood One serves approximately 5,000 radio and 170 television
stations in the U.S. Westwood One provides over 150 news, sports,
music, talk and entertainment programs, features and live events to
numerous media partners. Through its Metro Traffic business,
Westwood One provides traffic reporting and local news, sports and
weather to approximately 2,200 radio and 170 television stations.
Westwood One also provides digital and other cross-platform
delivery of its Network and Metro Traffic content to over 700
radio, television and newspaper affiliates.
Footnotes to Press Release
(1) Adjusted EBITDA is a non-GAAP financial measure that is
reconciled to net cash provided by (used in) operating activities,
its most directly comparable GAAP measure, in the accompanying
financial tables. Adjusted EBITDA is defined as net cash
provided by (used in) operating activities adjusted to exclude the
following: interest expense, income tax expense (benefit),
restructuring charges, special charges, other non-operating income,
amortization of deferred financing costs and changes in assets and
liabilities including deferred tax assets and liabilities.
Adjusted EBITDA is used by the Company to calculate its
compliance with its debt covenants under the terms of its senior
notes and senior credit facility. The Company believes this measure
is relevant and useful for investors because it allows investors to
view performance in the same manner as the Company's lenders (who
also own approximately 22.5% of the Company's equity as a result of
the refinancing, excluding Gores).
Since Adjusted EBITDA is not a measure of performance calculated
in accordance with GAAP, it should not be considered in isolation
of, or as a substitute for, consolidated statements of operations
and cash flow data prepared in accordance with GAAP. Adjusted
EBITDA as the Company calculates it, may not be comparable to
similarly titled measures employed by other companies. In
addition, this measure does not necessarily represent funds
available for discretionary use, and is not necessarily a measure
of the Company's ability to fund its cash needs. The Company
uses Adjusted EBITDA as a liquidity measure, which is different
from operating cash flow, the most directly comparable GAAP
financial measure calculated and prepared in accordance with GAAP.
Users of this financial information should consider the types
of events and transactions which are excluded.
(2) Free cash flow is a non-GAAP financial measure that is
reconciled to net cash provided by (used in) operating activities,
its most directly comparable GAAP measure, in the accompanying
financial tables. Free cash flow is defined by the Company as net
cash provided by (used in) operating activities, less capital
expenditures. The Company uses free cash flow, among other
measures, to evaluate its operating performance. Management
believes free cash flow provides investors with an important
perspective on the Company's cash available to service debt and the
Company's ability to make strategic acquisitions and investments,
maintain its capital assets and fund ongoing operations. As a
result, free cash flow is a significant measure of the Company's
ability to generate long term value. The Company believes the
presentation of free cash flow is relevant and useful for investors
because it allows investors to view performance in a manner similar
to the method used by management. In addition, free cash flow
is also a primary measure used externally by the Company's
investors, analysts and peers in its industry for purposes of
valuation and comparing the operating performance of the Company to
other companies in its industry.
As free cash flow is not a measure of performance calculated in
accordance with GAAP, free cash flow should not be considered in
isolation of, or as a substitute for, net income as an indicator of
operating performance or net cash provided by (used in) operating
activities as a measure of liquidity. Free cash flow, as the
Company calculates it, may not be comparable to similarly titled
measures employed by other companies. In addition, free cash
flow does not necessarily represent funds available for
discretionary use and is not necessarily a measure of the Company's
ability to fund its cash needs. In arriving at free cash
flow, the Company adjusts net cash provided by (used in) operating
activities to remove the impact of cash flow timing differences to
arrive at a measure which the Company believes more accurately
reflects funds available for discretionary use. Specifically,
the Company adjusts net cash provided by (used in) operating
activities (the most directly comparable GAAP financial measure)
for capital expenditures, special charges, and deferred taxes, in
addition to removing the impact of sources and or uses of cash
resulting from changes in operating assets and liabilities.
Accordingly, users of this financial information should
consider the types of events and transactions which are not
reflected.
Forward-Looking Statements
Certain statements in this release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the
Company to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. The words or phrases "guidance,"
"expect," "anticipate," "estimates" and "forecast" and similar
words or expressions are intended to identify such forward-looking
statements. In addition any statements that refer to
expectations or other characterizations of future events or
circumstances are forward-looking statements. Various risks that
could cause future results to differ from those expressed by the
forward-looking statements included in this release include, but
are not limited to: continued declines in our operating income; the
availability of additional financing; our future cash flow from
operations and access to additional financing; our ability to
achieve our financial forecast; a significant amount of
indebtedness that contain various covenants, which could adversely
affect our liquidity and future business operations and accelerate
repayment; changes to our CBS arrangement; increased proliferation
of free traffic content; maintenance of an effective system of
internal controls; technological changes and innovations; failure
to obtain or retain the rights in popular programming; acceptance
of our content; consolidation in the radio broadcast industry;
further impairment charges; Gores' influence over our corporate
actions; and changes in governmental regulations and policies and
actions of federal and state regulatory bodies. Our key risks are
described in our reports filed with the SEC, including our Annual
Report on Form 10-K for the year ending December 31, 2009 and our Quarterly Report on
Form 10-Q for the quarter ended March 31,
2010. Except as otherwise stated in this news announcement,
Westwood One, Inc. does not undertake any obligation to publicly
update or revise any forward-looking statements because of new
information, future events or otherwise.
WESTWOOD ONE, INC
|
|
CONSOLIDATED STATEMENT OF
OPERATIONS
|
|
(In thousands, except share and
per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
|
|
March 31,
2010
|
|
|
March 31,
2009
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
92,842
|
|
|
$
85,867
|
|
Operating costs
|
89,341
|
|
|
91,393
|
|
Depreciation and
amortization
|
4,496
|
|
|
2,063
|
|
Corporate general and administrative
expenses
|
3,019
|
|
|
2,766
|
|
Restructuring charges
|
743
|
|
|
3,440
|
|
Special charges
|
1,823
|
|
|
5,809
|
|
Total operating costs
|
99,422
|
|
|
105,471
|
|
|
|
|
|
|
|
|
|
Operating loss
|
(6,580)
|
|
|
(19,604)
|
|
|
|
|
|
|
|
|
|
Interest expense
|
5,565
|
|
|
3,263
|
|
Other expense (income)
|
1
|
|
|
(300)
|
|
|
|
|
|
|
|
|
|
Loss before income tax
|
(12,146)
|
|
|
(22,567)
|
|
Income tax benefit
|
(5,234)
|
|
|
(7,381)
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
(6,912)
|
|
|
$
(15,186)
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common
stockholders
|
$
(6,912)
|
|
|
$
(16,650)
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per share
|
|
|
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
Basic
|
$
(0.34)
|
|
|
$
(33.95)
|
|
|
|
Diluted
|
$
(0.34)
|
|
|
$
(33.95)
|
|
|
|
|
|
|
|
|
|
|
Class B stock
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
-
|
|
|
|
Diluted
|
|
|
|
$
-
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
Common Stock
|
|
|
|
|
|
|
|
Basic
|
20,544
|
|
|
490
|
|
|
|
Diluted
|
20,544
|
|
|
490
|
|
|
|
|
|
|
|
|
|
|
Class B stock
|
|
|
|
|
|
|
|
Basic
|
|
|
|
1
|
|
|
|
Diluted
|
|
|
|
1
|
|
|
|
|
|
|
|
|
WESTWOOD ONE, INC
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
(In thousands, except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2010
|
|
December 31,
2009
|
|
|
|
|
(unaudited)
|
|
(audited)
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
$
6,794
|
|
$
4,824
|
|
|
Accounts receivable, net of allowance
for doubtful accounts
|
86,487
|
|
87,568
|
|
|
Income tax receivable
|
12,945
|
|
12,355
|
|
|
Prepaid and other assets
|
19,278
|
|
20,994
|
|
|
|
Total current assets
|
125,504
|
|
125,741
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
35,446
|
|
36,265
|
|
Intangible assets, net
|
100,671
|
|
103,400
|
|
Goodwill
|
39,745
|
|
38,917
|
|
Other assets
|
3,276
|
|
2,995
|
|
|
|
TOTAL ASSETS
|
$
304,642
|
|
$
307,318
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
$
44,592
|
|
$
40,164
|
|
|
Amounts payable to related
parties
|
490
|
|
129
|
|
|
Deferred revenue
|
2,517
|
|
3,682
|
|
|
Accrued expenses and other
liabilities
|
30,183
|
|
28,864
|
|
|
Current maturity of long-term
debt
|
10,000
|
|
13,500
|
|
|
|
Total current liabilities
|
87,782
|
|
86,339
|
|
|
|
|
|
|
|
|
Long-term debt
|
126,967
|
|
122,262
|
|
Deferred tax liability
|
47,781
|
|
50,932
|
|
Due to Gores
|
10,984
|
|
11,165
|
|
Other liabilities
|
20,067
|
|
18,636
|
|
|
|
TOTAL LIABILITIES
|
293,581
|
|
289,334
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
Common stock, $.01 par value:
authorized: 5,000,000 shares
|
|
|
|
|
|
issued and outstanding: 20,544 (2010)
and 20,544 (2009)
|
205
|
|
205
|
|
Class B stock, $.01 par value:
authorized: 3,000 shares;
|
|
|
|
|
|
issued and outstanding: 0
|
-
|
|
-
|
|
Additional paid-in capital
|
81,171
|
|
81,268
|
|
Net unrealized gain
|
197
|
|
111
|
|
Accumulated deficit
|
(70,512)
|
|
(63,600)
|
|
|
|
TOTAL STOCKHOLDERS'
EQUITY
|
11,061
|
|
17,984
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
|
$
304,642
|
|
$
307,318
|
|
|
|
|
|
|
|
WESTWOOD ONE, INC
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
(In thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Successor
Company
|
|
|
Predecessor
Company
|
|
|
|
Three Months
Ended
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2010
|
|
|
March 31,
2009
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
|
Net loss
|
$
(6,912)
|
|
|
$
(15,186)
|
|
Adjustments to reconcile net
loss to net cash
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
4,496
|
|
|
2,063
|
|
|
Deferred taxes
|
(4,306)
|
|
|
(6,698)
|
|
|
Non-cash stock compensation
|
1,059
|
|
|
1,352
|
|
|
Amortization of deferred financing
costs
|
-
|
|
|
308
|
|
Net change in assets and
liabilities
|
10,578
|
|
|
20,295
|
|
|
Net cash provided by operating
activities
|
4,915
|
|
|
2,134
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
Capital expenditures
|
(2,183)
|
|
|
(1,169)
|
|
|
Net cash used in investing
activities
|
(2,183)
|
|
|
(1,169)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
Proceeds from Revolving Credit
Facility
|
3,000
|
|
|
-
|
|
|
Repayments of Senior Notes
|
(3,500)
|
|
|
-
|
|
|
Payments of capital lease
obligations
|
(262)
|
|
|
(203)
|
|
|
Net cash used in financing
activities
|
(762)
|
|
|
(203)
|
|
|
|
|
|
|
|
|
|
Net increase in cash and
cash equivalents
|
1,970
|
|
|
762
|
|
|
Cash and cash equivalents
at beginning of period
|
4,824
|
|
|
6,437
|
|
|
Cash and cash equivalents
at end of period
|
$
6,794
|
|
|
$
7,199
|
|
|
|
|
|
|
|
WESTWOOD ONE, INC
|
|
ADJUSTED EBITDA
RECONCILIATION
|
|
(In thousands)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
Net cash provided
by operating activities
|
$
4,915
|
|
$
2,134
|
|
|
|
|
|
|
Interest
expense
|
5,565
|
|
3,263
|
|
Income tax
benefit
|
(5,234)
|
|
(7,381)
|
|
Restructuring and special charges
(a)
|
3,162
|
|
9,249
|
|
Other
non-operating expense (income)
|
1
|
|
(300)
|
|
Deferred
taxes
|
4,306
|
|
6,698
|
|
Amortization of
deferred financing costs
|
-
|
|
(308)
|
|
Change in assets
and liabilities
|
(10,578)
|
|
(20,295)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
2,137
|
|
$
(6,940)
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes $597 of special
charges classified as operating costs in the Statement of
Operations for the three months ended March 31, 2010.
|
|
|
|
|
|
WESTWOOD ONE, INC
|
|
FREE CASH FLOW
RECONCILIATION
|
|
(In thousands)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2010
|
|
2009
|
|
Net cash provided by operating
activities
|
$
4,915
|
|
$
2,134
|
|
(Less) Capital expenditures
|
(2,183)
|
|
(1,169)
|
|
Free Cash Flow
|
$
2,732
|
|
$
965
|
|
|
|
|
|
SOURCE Westwood One, Inc.