- Revenue of $100.4 million and Adjusted EBITDA of $14.1 million
for the Second Quarter - NEW YORK, Aug. 7 /PRNewswire-FirstCall/ --
Westwood One, Inc. (NYSE:WON) a provider of analog and digital
media content, including news, sports, entertainment, traffic,
weather, video news services and other information, to the radio,
TV and on-line sectors, today reported its operating results for
its second quarter ended June 30, 2008. Tom Beusse, Westwood One's
President and CEO, commented, "We are making significant progress
on our strategy to become a leading integrated, cross- platform
media company delivering superior content and services. Of note,
the recently announced partnership with AirSage, which
significantly elevates our traffic offering, and ongoing
investments in the business highlight the significant progress we
are making in more effectively positioning the Company for the
long-term. Moreover, the latest recruits to the management team
have a wealth of experience across broad media, radio and digital
platforms and we are all aligned on the vision for the business. I
am excited about the team we have in place and the addition of The
Gores Group, LLC as value-added investors and members of the board.
"While I have said before that 2008 is an important transition year
for our newly independent Company, recent revenue trends have been
softer than expected due to a weak national economy and a decrease
in radio advertising spending. During the second quarter, the
difficult business environment negatively impacted revenue and put
downward pressure on Adjusted EBITDA and these conditions are
expected to continue in the near-term. Over the past few months the
new management team has been actively reviewing every aspect of the
business and taking actions to improve the Company's operations.
Management has also identified a series of key re-engineering
initiatives that are intended to create operating efficiencies,
further streamline our cost structure, and drive incremental
revenue. These initiatives are consistent with our existing plan
but will be accelerated in order to mitigate the current softness
in our revenues. These initiatives should provide stability in the
near-term and position us to more effectively execute our long term
strategy. I look forward to reporting on the specifics of these
plans by the end of the third quarter." Second Quarter 2008 Results
Revenue for the second quarter of 2008 was $100.4 million compared
to $111.0 million in the second quarter of 2007, a decrease of
9.6%. The decrease is primarily due to continuing weakness in the
economy and the local/regional advertising marketplace as well as
competition. A slight increase in national revenue was offset by a
16.8% revenue decline in the local/regional business, which was
driven by reduced advertising spending primarily in the automotive,
banking and real estate categories. Adjusted EBITDA for the second
quarter, defined as operating income (loss) plus depreciation and
amortization, special charges, a non-cash goodwill impairment
charge (referenced in more detail below), and non-cash stock-based
compensation, was $14.1 million compared with $26.6 million in the
second quarter of 2007. The decline was principally due to a
decrease in advertising revenue. Investment in recruiting top-tier
management for the sales, digital and business development areas of
the business and improved commercial clearances by CBS Radio also
played a role. The distribution agreement with CBS has had an
immediate and dramatic impact on their national inventory clearance
levels, which have increased from the mid-80s to over 93%. These
increased clearance rates make Westwood One a significantly more
effective advertising platform than in the recent past. Special
charges in the second quarter were $0.9 million as compared with
$2.3 million in the second quarter of 2007. Special charges this
quarter are comprised of charges for advisory fees related to
re-engineering traffic operations and costs attributable to
obtaining additional capital. Special charges in the second quarter
of 2007 were comprised of $1.3 million of advisory fees to
negotiate a new long-term agreement with CBS Radio and $1.0 million
in severance for executive management changes. Operating loss in
the second quarter was $195.6 million compared with operating
income of $16.6 million in the second quarter of 2007. This
operating loss is principally due to the non-cash goodwill
impairment charge. Excluding the effect of the impairment charge on
the current quarter results, the Company's operating income would
have been $10.4 million. The decrease versus the comparable period
last year is due to the combination of lower revenue and higher
operating costs, partially offset by the elimination of warrant
amortization associated with the CBS Radio warrants that were
cancelled as part of the new CBS Radio agreement, lower stock-based
compensation and a reduction in other special charges. Interest
expense for the quarter was $4.4 million compared with $5.9 million
in the second quarter of 2007, a decrease of 25.6%. The reduction
is principally due to lower debt levels. At the end of the quarter
the Company's debt was $260 million, down $85.0 million from
December 31, 2007 and down $110.0 million from June 30, 2007.
Income tax benefit for the quarter was $0.2 million compared with
income tax expense of $4.0 million in the second quarter of 2007.
The current period income tax benefit arose due to a portion of our
non-cash goodwill impairment charge being deductible for tax
purposes. Net loss for the second quarter was $199.7 million, or
$1.98 per share, compared with net income of $6.9 million, or $0.08
per basic and diluted common share in the second quarter of 2007.
Due to the loss in the second quarter of 2008, basic and diluted
shares are equivalent. Free cash flow, defined as net income (loss)
plus depreciation and amortization, special charges, goodwill
impairment, stock-based compensation, and amortization of deferred
financing costs less capital expenditures, in the second quarter
was $8.0 million, or $0.08 per diluted share, compared with $15.8
million, or $0.18 per diluted share, in the second quarter of 2007.
Capital expenditures were approximately $2.4 million in the current
quarter compared with $1.2 million in the second quarter of 2007.
The increase in capital expenditures is attributable to costs we
are incurring for an improved distribution system for national
products and commercials. Goodwill Impairment Charge In accordance
with Statement of Financial Accounting Standards No. 142, the
Company has performed an interim assessment of the value of its
goodwill. This action was required given the negative impact of
ongoing weakness in the national economy and reduced advertising
sales on the Company's near-term performance. The completion of the
two-part test resulted in the Company recording a non-cash charge
in the amount of $206.1 million. This non-cash charge does not have
any impact on our future operations, nor does it affect the
Company's liquidity, Adjusted EBITDA, Free Cash Flow, cash flow
from operating activities or debt covenants. After this impairment,
the Company's goodwill balances will be approximately $258.1
million. Business Update and Company Outlook Over the past several
months, management has been actively pursuing actions to improve
the Company's operations, including its sales strategy and
execution. However, to address near-term economic weakness and to
position the Company for long-term profitable growth, management is
planning several significant business re-engineering initiatives
that should lend stability to the business in the near-term and are
intended to drive incremental revenue and streamline the cost
structure in the long-term. These initiatives will be in line with
the strategy outlined to date and management will merely be
accelerating certain initiatives of the overall long-term business
plan. The three key focus areas include: -- Fundamentally
re-engineer the local traffic segment to leverage leading edge
technology and right-size the business. -- Top-grade the sales
organization to be more effective and enhance our coverage in key
geographic markets while empowering the staff to better cross-sell
all of the Company's media assets. -- Introduce significant
organizational and operational discipline in order to streamline
the cost structure by improving processes and becoming more
efficient. The new management team is still finalizing details of
these initiatives. By the end of the third quarter, the Company
will provide more specific information on formal plans, benefits of
initiatives, and details regarding a re-engineering charge that is
expected to occur in the third quarter. 2008 Outlook Due to the
ongoing planning process and the dynamic economic environment,
which makes it difficult to forecast near-term operations,
management believes it is prudent to withdraw the previous formal
financial outlook that has been provided for 2008. Management will
continue to be open about progress on the Company's operating
initiatives throughout the second half of 2008. Mr. Beusse
concluded, "Although the Company has near-term challenges, Westwood
One has entered a new era and we are optimistic about our long-term
potential. I am proud of what this new management team has
accomplished in such a short amount of time. We are analyzing every
aspect of our business, taking decisive actions, and creating key
partnerships. We expect that as a result of this hard work, 2009
will be a break-out year. Westwood One is rapidly becoming a more
data driven, cross-platform media company delivering superior
content and services. We look forward to realizing that vision and
to delivering enhanced shareholder value over the long-term." About
Westwood One Westwood One (NYSE:WON) is a platform-agnostic content
company providing over 150 news, sports, music, talk, entertainment
programs, features and live events to numerous media partners.
Westwood One also provides local content such as traffic, weather,
news, and sports to the radio, TV, and online sectors. Westwood One
provides its content and services to more than 5,000 radio
stations. For more information please visit
http://www.westwoodone.com/. 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
revenue; our ability to raise additional capital or refinance our
senior credit agreement; our ability to execute our growth
strategy; trends in audience and inventory delivered by our
affiliated radio stations, and competition in the media industry;
changes in economic conditions in the U.S. and in other countries
in which the Company currently does business (both generally and
relative to the broadcasting and media industry); advertiser
spending patterns; changes in the level of competition for
advertising dollars; and fluctuations in programming costs. Other
key risks are described in the Company's reports filed with the
SEC, including the Company's annual report on Form 10-K/A for the
year ending December 31, 2007. 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. SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP
FINANCIAL INFORMATION Adjusted EBITDA The following tables set
forth the Company's Adjusted EBITDA for the three and six month
periods ended June 30, 2008 and 2007. The Company defines "Adjusted
EBITDA" as operating income (loss) from its Statement of Operations
adjusted to exclude the following items: depreciation and
amortization, stock-based stock compensation, special charges and
goodwill impairment . Adjusted EBITDA is not a performance measure
calculated in accordance with Generally Accepted Accounting
Principles ("GAAP"). Adjusted EBITDA is used by the Company to,
among other things, evaluate its operating performance, forecast
and plan for future periods, value prospective acquisitions, and as
one of several components of incentive compensation targets for
certain management personnel. This measure is an important
indicator of the Company's operational strength and performance of
its business because it provides a link between profitability and
operating cash flow. The Company believes the presentation of this
measure is relevant and useful for investors because it allows
investors to view performance in a manner similar to the method
used by the Company's management, helps improve their ability to
understand the Company's operating performance and makes it easier
to compare the Company's results with other companies that have
different financing and capital structures or tax rates. In
addition, this measure is also among the primary measures 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.
Adjusted EBITDA is also used to determine compliance with its debt
covenants. 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, net income as an indicator of
operating performance. 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. As Adjusted EBITDA excludes certain financial information
compared with operating income, the most directly comparable GAAP
financial measure, users of this financial information should
consider the types of events and transactions which are excluded.
As required by the SEC, the Company provides below a reconciliation
of Adjusted EBITDA to operating income, the most directly
comparable amount reported under GAAP. Three Months Ended Six
Months Ended June 30, June 30, (In millions) 2008 2007 2008 2007
Net income (loss) ($199.7) $6.9 ($205.1) $7.6 Plus: Income taxes
(0.2) 4.0 (3.2) 4.5 Interest expense and other 4.3 5.7 9.6 11.8
Depreciation and amortization 2.4 4.9 6.4 9.9 Goodwill impairment
& special charges 207.0 2.3 214.9 2.6 Non-cash stock based
compensation 0.3 2.8 2.5 5.6 Adjusted EBITDA $14.1 $26.6 $25.1
$42.0 Free Cash Flow Free cash flow is defined by the Company as
net income (loss) plus depreciation and amortization, stock-based
compensation, special charges, and non-cash goodwill impairment
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, repurchase its common stock 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. Free
cash flow per fully diluted weighted average Common shares
outstanding is defined by the Company as free cash flow divided by
the fully diluted weighted average Common shares outstanding. 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 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 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
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. The
Company provides below a reconciliation of free cash flow to the
most directly comparable amount reported under GAAP, net cash
provided by operating activities. The following table presents a
reconciliation of the Company's net cash provided by operating
activities to free cash flow: Three Months Ended Six Months Ended
June 30, June 30, (In millions, except per share amounts) 2008 2007
2008 2007 Net cash provided by (used in) operating activities $6.0
($19.2) ($4.8) ($2.6) Plus or Minus: Changes in assets and
liabilities (4.1) 31.1 8.3 22.9 Special charges 0.9 2.3 8.9 2.6
Deferred taxes 7.6 2.8 7.1 3.1 Capital expenditures (2.4) (1.2)
(6.1) (2.1) Free cash flow $8.0 $15.8 $13.4 $23.9 Fully diluted
weighted average shares Outstanding 100.8 86.5 95.1 86.4 Free cash
flow per diluted share $0.08 $0.18 $0.14 $0.28 WESTWOOD ONE, INC
CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per
share amounts) (Unaudited) Three Months Ended Six Months Ended June
30, June 30, 2008 2007 2008 2007 NET REVENUE $100,372 $111,025
$206,998 $224,984 Operating Costs (includes related party expenses
of $18,445, $16,886, $36,320 and $35,829 respectively) 85,411
83,633 179,640 181,068 Depreciation and Amortization (includes
related party warrant amortization of $0 , $2,427, $1,618 and
$4,853, respectively) 2,421 4,917 6,397 9,948 Corporate General and
Administrative Expenses (includes related party expenses of $0,
$861, $610 and $1,690, respectively) 1,199 3,575 4,665 7,451
Goodwill Impairment 206,053 - 206,053 - Special Charges 897 2,282
8,853 2,637 295,981 94,407 405,608 201,104 OPERATING (LOSS) INCOME
(195,609) 16,618 (198,610) 23,880 Interest Expense 4,352 5,852
9,751 11,949 Other Income (43) (150) (85) (150) (LOSS) INCOME
BEFORE INCOME TAXES (199,918) 10,916 (208,276) 12,081 INCOME TAXES
(BENEFIT) EXPENSE (174) 4,019 (3,194) 4,469 NET (LOSS) INCOME
$(199,744) $6,897 $(205,082) $7,612 (LOSS) EARNINGS PER SHARE
COMMON STOCK BASIC $(1.98) $0.08 $(2.16) $0.09 DILUTED $(1.98)
$0.08 $(2.16) $0.09 CLASS B STOCK BASIC $- $- $- $0.02 DILUTED $-
$- $- $0.02 WEIGHTED AVERAGE SHARES OUTSTANDING: COMMON STOCK BASIC
100,752 86,094 95,119 86,084 DILUTED 100,752 86,540 95,119 86,408
CLASS B STOCK BASIC 292 292 292 292 DILUTED 292 292 292 292
WESTWOOD ONE, INC. CONSOLIDATED BALANCE SHEETS (In thousands,
except per share amounts) June 30, December 31, 2008 2007
(unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $5,315
$6,187 Accounts receivable, net of allowance for doubtful accounts
of $3,585 (2008) and $3,602 (2007) 95,566 108,271 Warrants, current
portion - 9,706 Prepaid and other assets 8,299 13,990 Total Current
Assets 109,180 138,154 Property and equipment, net 34,702 33,012
Goodwill 258,061 464,114 Intangible assets, net 3,052 3,443 Other
assets 26,139 31,034 TOTAL ASSETS $431,134 $669,757 LIABILITIES,
REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES: Accounts payable $20,366 $17,378 Amounts payable to
related parties 14,466 30,859 Deferred revenue 3,789 5,815 Income
taxes payable 1,964 7,246 Accrued expenses and other liabilities
23,776 29,562 Current maturity of Long-Term Debt 60,000 - Total
Current Liabilities 124,361 90,860 Long-term debt 199,495 345,244
Other Liabilities 5,681 6,022 TOTAL LIABILITIES 329,537 442,126
Commitments and Contingencies Redeemable preferred stock: $.01 par
value, authorized 10,000 shares, issued and outstanding, 75 as
Series A Convertible Preferred Stock; liquidation preference $1,000
per share 73,738 - SHAREHOLDERS' EQUITY Common stock, $.01 par
value: authorized, 300,000 shares; issued and outstanding, 101,345
(2008) and 87,105 (2007) 1,014 872 Class B stock, $.01 par value:
authorized, 3,000 shares; issued and outstanding, 292 (2008 and
2007) 3 3 Additional paid-in capital 293,363 290,786 Unrealized
gain on available for sale securities 8,551 5,955 Accumulated
deficit (275,072) (69,985) TOTAL SHAREHOLDERS' EQUITY 101,597
227,631 TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND
SHAREHOLDERS' EQUITY $431,134 $669,757 WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Six Months Ended June 30, 2008 2007 CASH FLOW FROM OPERATING
ACTIVITIES: Net (loss) income $(205,082) $7,612 Adjustments to
reconcile net (loss) income to net cash provided by operating
activities: Depreciation and amortization 6,397 9,948 Goodwill
Impairment 206,053 - Deferred taxes (8,563) (3,079) Non-cash stock
compensation 2,455 5,572 Amortization of deferred financing costs
792 237 2,052 20,290 Changes in assets and liabilities: Accounts
receivable 12,705 (47) Prepaid and other assets 5,531 5,264
Deferred revenue (2,026) (1,861) Income taxes payable and prepaid
income taxes (3,915) (5,455) Accounts payable and accrued expenses
and other liabilities (2,796) (23,269) Amounts payable to related
parties (16,393) 2,516 Net Cash Used By Operating Activities
(4,842) (2,562) CASH FLOW FROM INVESTING ACTIVITIES: Capital
expenditures (6,078) (2,114) Net Cash Used In Investing Activities
(6,078) (2,114) CASH FLOW FROM FINANCING ACTIVITIES: Issuance of
common stock 22,750 - Issuance of series A convertible preferred
stock and warrants 74,178 - Debt repayments and payments of capital
lease obligations (85,343) (359) Dividend payments - (1,663)
Deferred financing costs (1,537) - Net Cash Provided (Used) in
Financing Activities 10,048 (2,022) NET DECREASE IN CASH AND CASH
EQUIVALENTS (872) (6,698) CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 6,187 11,528 CASH AND CASH EQUIVALENTS AT END OF PERIOD
$5,315 $4,830 DATASOURCE: Westwood One, Inc. CONTACT: Investors,
Gary Yusko of Westwood One, Inc., +1-212-373-5311; or press, Evan
Goetz or Grace Su, both of FD for Westwood One, Inc., +1-212-
850-5600 Web site: http://www.westwoodone.com/
Copyright
Grafico Azioni Westwood One (NYSE:WON)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Westwood One (NYSE:WON)
Storico
Da Lug 2023 a Lug 2024