Attached files
file | filename |
---|---|
8-K - FORM 8-K - DIAL GLOBAL, INC. /DE/ | c17451e8vk.htm |
Exhibit 99.1
WESTWOOD ONE, INC.
REPORTS RESULTS FOR
THE FIRST QUARTER 2011
REPORTS RESULTS FOR
THE FIRST QUARTER 2011
New York, NY May 16, 2011 Westwood One, Inc. (NASDAQ: WWON), a leading independent provider
of network radio content to the radio and digital sectors, today reported operating results for the
first quarter 2011.
As of March 31, 2011, Westwood One was organized into two business segments, Network Radio and
Metro Traffic, as reflected in our financial statements. In this earnings release, our first
quarter results include the results of the Metro Traffic business, which we sold on April 29, 2011.
As previously reported, the sale of the Metro Traffic business reduced the Companys outstanding
senior debt by approximately $104.0 million, strengthened the Companys balance sheet, and
positioned the Company for future growth.
Westwood Ones first quarter revenue decreased $1.9 million, or 2.1%, to $90.9 million from $92.8
million in 2010. The revenue decrease occurred in Network Radio, and is primarily due to the
absence in 2011 of the Winter Olympics, which contributed significantly to first quarter 2010
Network radio revenue, a decline in news revenue, and the compressed selling period for the NCAA
Mens Basketball Championship after the contract was renewed in January. These revenue decreases
were partially offset by revenue increases in Network music and entertainment, and certain news and
talk programs including The Osgood File with Charles Osgood, the longest running news/talk feature
on radio. The revenue decrease was also partially offset by increased Metro Traffic revenue.
We are focused on expanding our Network radio and digital business by launching new radio programs
and digital video content, expanding distribution of our current programs, and supporting our
revenue structure with the necessary resources, said Rod Sherwood, President. We are well
positioned in the marketplace. Our new talk programs, including the Robert Wuhl Show and Urbanski,
are generating increasing revenue and gaining distribution. In April, we launched new programs,
including The Daily Wrap, in partnership with The Wall Street Journal, Rocsi on the Radio, with
Rocsi Diaz, (the popular co-host of BETs hit television show, 106 & Park), and a suite of Rick
Dees programming.
Adjusted EBITDA (1) in the first quarter was a loss of $5.2 million, which includes incremental
broadcast rights expense of $3.7 million related to a new sports content agreement, compared to the
first quarter of last year. Of the $3.7 million of incremental broadcast rights expense, $0.7 was
paid in the period and $3.0 million was non-cash. Excluding the incremental non-cash broadcast
rights expense, Adjusted EBITDA would have been a loss of $2.2 million in 2011 compared to Adjusted
EBITDA income of $2.1 million in the first quarter of 2010. The incremental non-cash expense
related to the new broadcast rights agreement is expected to be $2.4 million for the twelve months
ended December 31, 2011, which will be paid in future years.
1
Three Months Ended March 31, 2011
For the three months ended March 31, 2011, revenue was $90.9 million, a decrease of $1.9 million,
or 2.1%, compared to $92.8 million in the first quarter of 2010.
Network Radio revenue was $51.7 million, a decrease of $3.8 million, or 6.9%, compared to $55.6
million in the first quarter of 2010. As previously stated, advertising revenue decreased in sports
and news, which was partially offset by increased revenue in music and entertainment, and certain
talk programs.
Overall, Metro Traffic revenue for the first quarter was $39.2 million, an increase of $1.9
million, or 5.0%, from $37.3 million in 2010. Revenue for Metro Traffic Radio was $31.2 million, an
increase of $3.5 million or 12.5%, compared to $27.7 million in 2010. This increase was based
largely on increased advertising revenue in the key categories of financial services, travel and
entertainment. Revenue for Metro Television was $8.0 million, a decrease of $1.6 million, or 16.6%,
from $9.6 million in 2010, primarily due to lower ratings and audience levels.
Operating loss in the first quarter of 2011 increased by $6.5 million to $13.1 million from $6.6
million in 2010. This increased loss was largely due to increased station compensation to support
increased distribution, and to higher programming and operating costs associated with new
agreements. This included higher non-cash broadcast rights expense of $3.0 million. The increased
loss was partially offset by lower corporate expenses, and lower restructuring and special charges.
Adjusted EBITDA (1) in the first quarter was a loss of $5.2 million, which includes incremental
broadcast rights expense of $3.7 million related to a new sports content agreement, compared to the
first quarter of last year. Of the $3.7 million of incremental broadcast rights expense, $0.7 was
paid in the period and $3.0 million was non-cash. Excluding the incremental non-cash broadcast
rights expense, Adjusted EBITDA would have been a loss of $2.2 million in 2011 compared to Adjusted
EBITDA income of $2.1 million in the first quarter of 2010. The incremental non-cash expense
related to the new broadcast rights agreement is expected to be $2.4 million for the twelve months
ended December 31, 2011, which will be paid in future years.
Interest expense in the first quarter of 2011 decreased $0.3 million, or 5.0%, to $5.1 million from
$5.4 million in the first quarter of 2010. This reflects lower average balances of our outstanding
debt, primarily as a result of our debt repayments in 2010, partially offset by increased interest
on our revolving credit line.
The Companys tax benefit increased $2.2 million to $7.4 million compared to $5.2 million in the
first quarter of 2010, due to a higher pre-tax loss.
Net loss for the first quarter was $9.8 million, or $0.45 per diluted share, compared with a net
loss of $6.7 million, or $0.33 per diluted share, in 2010. The year-over-year change in net loss
reflects the higher operating losses of $6.5 million, partially offset by a higher tax benefit of
$2.2 million and other income of $1.1 million related to the fair market value adjustment from the
$10.0 million of common stock purchased by Gores this past February. First quarter 2010 average
share amounts were lower than average share amounts in the first quarter of 2011 as a result of the
$15.0 million of common stock that was issued to Gores in September 2010 and February 2011.
2
Free cash flow(2) usage in the first quarter of 2010 was $6.6 million as compared to a
free cash flow source of $2.7 million in 2010, representing decreased cash flow of $9.3 million.
This was due to unfavorable working capital changes of $3.7 million, a higher net loss of $3.1
million and non-cash adjustments of $2.8 million, partially offset by lower capital expenditures of
$0.3 million.
Outlook
Westwood One is focusing strategically on expanding its leadership position in network radio as the
premium content provider of news, sports, information, talk, music and entertainment programming.
Assuming that economic conditions remain relatively stable, we believe our investments in new
network radio programming and digital content will provide a foundation for revenue growth over
time.
About Westwood One
Westwood One (NASDAQ: WWON) is one of the nations largest providers of network radio programming
serving more than 5,000 radio 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.
Footnotes to Press Release
(1) Adjusted EBITDA is a non-GAAP financial measure that is reconciled to net income in the
accompanying financial tables. We use Adjusted EBITDA to evaluate our performance relative to our
competitors and have included it in this press release because we believe Adjusted EBITDA
represents an effective means by which to measure our operating performance. Although we primarily
view Adjusted EBITDA as an operating performance measure, we also consider it to be useful to
investors because it enables them to evaluate and compare our results from operations and cash
resources generated from our business in a more meaningful and consistent manner by excluding
specific items which are not reflective of ongoing operating results. Adjusted EBITDA is not a
measurement of financial performance under GAAP (Generally Accepted Accounting Principles) and
should not be considered as an alternative to net income, operating income or any other performance
measure derived in accordance with GAAP, as an alternative to GAAP cash flow from operating
activities or as a measure of our profitability or liquidity.
(2) Free cash flow is a non-GAAP financial measure that is reconciled to net income in the
accompanying financial tables. We use free cash flow to evaluate our performance relative to our
competitors and have included it in this press release because we believe free cash flow represents
an effective means by which to measure our operating performance. Although we primarily view free
cash flow as an operating performance measure, we also consider it to be a useful to investors
because it provides them with an important perspective on the cash we have available to service our
debt, maintain capital assets and fund ongoing operations and make strategic acquisitions and/or
investments. Free cash flow is not a measurement of our financial performance under GAAP and
should not be considered as an alternative to net income, operating income, or any other
performance measure derived in accordance with GAAP, as an alternative to GAAP cash flow from
operating activities or as a measure of our profitability or liquidity.
3
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 Westwood One 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; our significant amount of indebtedness and limited liquidity; the
higher cost of our indebtedness; the availability of additional financing; our future cash flow
from operations and our ability to achieve our financial projections; changes to our CBS
arrangement; introduction of The Portable People MeterTM; maintenance of an effective
system of internal controls; increased competition and technological changes and innovations;
failure to obtain or retain the rights in popular programming; acceptance of our content; continued
consolidation in the industry; further impairment charges; and Gores influence over our corporate
actions. Our key risks are described in our reports filed with the SEC, including our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2011 and our Annual Report on Form 10-K for the
year ended December 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.
Media Contact:
Chris Miller
Westwood One
212.641.2108
917-533-7224
chris_miller@westwoodone.com
Westwood One
212.641.2108
917-533-7224
chris_miller@westwoodone.com
4
WESTWOOD ONE, INC
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Revenue |
$ | 90,879 | $ | 92,842 | ||||
Operating costs |
94,080 | 88,448 | ||||||
Depreciation and amortization |
4,595 | 4,496 | ||||||
Corporate, general and administrative expenses |
3,036 | 3,912 | ||||||
Restructuring charges |
835 | 743 | ||||||
Special charges |
1,468 | 1,823 | ||||||
Total expenses |
104,014 | 99,422 | ||||||
Operating loss |
(13,135 | ) | (6,580 | ) | ||||
Interest expense |
5,106 | 5,376 | ||||||
Other expense (income) |
(1,096 | ) | 1 | |||||
Loss before income tax |
(17,145 | ) | (11,957 | ) | ||||
Income tax benefit |
(7,379 | ) | (5,234 | ) | ||||
Net loss |
$ | (9,766 | ) | $ | (6,723 | ) | ||
Loss per share: |
||||||||
Common Stock |
||||||||
Basic |
$ | (0.45 | ) | $ | (0.33 | ) | ||
Diluted |
$ | (0.45 | ) | $ | (0.33 | ) | ||
Weighted average
shares outstanding: |
||||||||
Common Stock |
||||||||
Basic |
21,749 | 20,544 | ||||||
Diluted |
21,749 | 20,544 |
5
WESTWOOD ONE, INC
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
March 31, 2011 | December 31, 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 6,396 | $ | 2,938 | ||||
Accounts receivable, net of allowance for doubtful accounts |
||||||||
Income tax receivable |
93,198 | 96,557 | ||||||
Prepaid and other assets |
16,830 | 18,421 | ||||||
Total current assets |
116,424 | 117,916 | ||||||
Property and equipment, net |
38,044 | 37,047 | ||||||
Intangible assets, net |
89,759 | 92,487 | ||||||
Goodwill |
38,945 | 38,945 | ||||||
Other assets |
1,936 | 1,879 | ||||||
TOTAL ASSETS |
$ | 285,108 | $ | 288,274 | ||||
LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 49,824 | $ | 45,907 | ||||
Amounts payable to related parties |
982 | 859 | ||||||
Deferred revenue |
7,266 | 6,736 | ||||||
Accrued expenses and other liabilities |
31,298 | 33,819 | ||||||
Total current liabilities |
89,370 | 87,321 | ||||||
Long-term debt |
137,675 | 136,407 | ||||||
Deferred tax liability |
29,820 | 36,174 | ||||||
Due to Gores |
10,350 | 10,222 | ||||||
Other liabilities |
22,563 | 24,142 | ||||||
TOTAL LIABILITIES |
289,778 | 294,266 | ||||||
Commitments and Contingencies |
||||||||
STOCKHOLDERS (DEFICIT) EQUITY |
||||||||
Common stock, $.01 par value: authorized: 5,000,000 shares |
||||||||
issued and outstanding: 22,591 (2011) and 21,314 (2010) |
226 | 213 | ||||||
Class B stock, $.01 par value: authorized: 3,000 shares; |
||||||||
issued and outstanding: 0 |
| | ||||||
Additional paid-in capital |
99,727 | 88,652 | ||||||
Accumulated deficit |
(104,623 | ) | (94,857 | ) | ||||
TOTAL STOCKHOLDERS (DEFICIT) EQUITY |
(4,670 | ) | (5,992 | ) | ||||
TOTAL LIABILITIES AND
STOCKHOLDERS (DEFICIT) EQUITY |
$ | 285,108 | $ | 288,274 | ||||
6
WESTWOOD ONE, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Cash Flows from Operating Activities: |
||||||||
Net loss |
$ | (9,766 | ) | $ | (6,723 | ) | ||
Adjustments to reconcile net loss to net cash |
||||||||
Depreciation and amortization |
4,595 | 4,496 | ||||||
Deferred taxes |
(6,777 | ) | (5,107 | ) | ||||
Paid-in-kind interest |
1,395 | 1,524 | ||||||
Non-cash equity-based compensation |
965 | 1,059 | ||||||
Change in fair value of derivative liability |
(1,096 | ) | | |||||
Amortization of deferred financing costs |
6 | 6 | ||||||
Net change in other assets and liabilities |
5,991 | 9,660 | ||||||
Net cash (used in) provided by operating activities |
(4,687 | ) | 4,915 | |||||
Cash Flows from Investing Activities: |
||||||||
Capital expenditures |
(1,912 | ) | (2,183 | ) | ||||
Net cash used in investing activities |
(1,912 | ) | (2,183 | ) | ||||
Cash Flows from Financing Activities: |
||||||||
Issuance of common stock |
10,000 | | ||||||
Proceeds from exercise of stock option |
330 | | ||||||
Payments of finance and capital lease obligations |
(273 | ) | (262 | ) | ||||
Proceeds from Revolving Credit Facility |
| 3,000 | ||||||
Repayments of Senior Notes |
| (3,500 | ) | |||||
Net cash provided by (used in) financing activities |
10,057 | (762 | ) | |||||
Net increase in cash and cash equivalents |
3,458 | 1,970 | ||||||
Cash and cash equivalents, beginning of period |
2,938 | 4,824 | ||||||
Cash and cash equivalents, end of period |
$ | 6,396 | $ | 6,794 | ||||
7
The following table provides a reconciliation of Adjusted EBITDA to net income determined in
accordance with GAAP for first quarter of 2011 and 2010.
WESTWOOD ONE, INC
ADJUSTED EBITDA RECONCILIATION
(In thousands)
ADJUSTED EBITDA RECONCILIATION
(In thousands)
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Net income |
$ | (9,766 | ) | $ | (6,723 | ) | ||
Interest expense |
5,106 | 5,376 | ||||||
Depreciation and amortization |
4,595 | 4,496 | ||||||
Income taxes provision (benefit) |
(7,379 | ) | (5,234 | ) | ||||
Restructuring, special charges and other (a) |
2,366 | 3,162 | ||||||
Stock-based compensation |
965 | 1,059 | ||||||
Other non-operating losses
(gains) |
(1,096 | ) | 1 | |||||
Adjusted EBITDA (b) |
$ | (5,209 | ) | $ | 2,137 | |||
(a) | Restructuring, special charges and other includes expense of $322, $918, and $1,652 are
classified as general and administrative expense on the Statement of Operations for the three
months ended December 31, 2010 and the years ended December 31, 2010 and 2009, respectively. |
|
(b) | Adjusted EBITDA includes incremental broadcast rights expense of $3,719 related to a new
sports content agreement, compared to the first quarter of last year. |
The following table provides a reconciliation of Free Cash Flow to net cash (used in) provided by
operating activities determined in accordance with GAAP for first quarter of 2011 and 2010.
WESTWOOD ONE, INC
FREE CASH FLOW RECONCILIATION
(In thousands)
FREE CASH FLOW RECONCILIATION
(In thousands)
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Net cash (used in) provided by operating activities |
$ | (4,687 | ) | $ | 4,915 | |||
(Less) Capital expenditures |
(1,912 | ) | (2,183 | ) | ||||
Free Cash Flow |
$ | (6,599 | ) | $ | 2,732 | |||
8