Revenue - $85.9 Million, Adjusted EBITDA - $(6.9) Million, Net Loss
- $(15.2) Million NEW YORK, May 11 /PRNewswire-FirstCall/ --
Westwood One, Inc. (OTC Bulletin Board: WWON), the leading provider
of network radio content, including news, sports, entertainment,
traffic, weather, video news services and other information, to the
radio, television and on-line sectors, today reported operating
results for the first quarter ended March 31, 2009. "Westwood One
achieved several major goals in the first part of 2009 that have
positioned it well to drive its strategic initiatives for the rest
of the year," said Rod Sherwood, President and CFO of Westwood One.
"Most importantly, the Company's financial structure has been
solidified by the successful completion of the debt refinancing and
equity recapitalization, which was the linchpin of the Company's
turnaround strategy." In the first quarter of 2009, the Company
launched an aggressive new company-wide cost reduction program,
including salary reductions, and continued to realize efficiencies
from the Metro Traffic re-engineering program which commenced in
the third quarter of 2008. "These cost reductions were designed to
align the Company's operating costs with its revenue trajectory,"
said Sherwood. As the Company announced on March 24, 2009, the
re-engineering and other cost saving initiatives are collectively
anticipated to result in total annual savings of approximately $55
to $63 million, with $2 million of these savings to be realized in
2010 and approximately $53 to $61 million to be achieved in 2009.
These savings will be offset to a limited degree by investments in
the Company's sales force, TrafficLand and digital capabilities,
and the full-year impact of costs under the new CBS Agreement. In
Network Radio, the Company signed a deal in April to continue as
the exclusive network radio partner of the NFL. This partnership
gives Westwood One exclusive inventory for advertisers seeking an
engaged, high-quality demographic audience. The NFL programming, as
well as the Company's exclusive network radio rights to the Masters
Tournament and the NCAA Final Four, demonstrates that Westwood One
continues to be the first choice for premium branded content in
network radio. In Metro Traffic, the Company is continuing to
differentiate its Traffic product with cutting edge technology.
Metro Traffic and its technology partner, TrafficLand, rolled out a
national traffic video network that lets the Company's skilled
traffic reporters follow local traffic on many routes
simultaneously in their respective markets. TrafficLand's Video
Distribution System (VDS) is a key part of Metro Traffic's strategy
of moving from an incident-based to a solution-based traffic
resource. The Company is also testing a unique "Flyover" product
with TrafficLand that would take local traffic reporting of
multiple routes to the next level. Westwood One Metro Traffic is
expanding into the digital and wireless categories as a provider of
traffic information on mobile and Personal Navigation Devices
(PND). Metro Traffic has partnered with TrafficCast, a provider of
digital traffic data, to supply Metro Traffic's road condition and
incident data reports to TomTom, a leading navigation solutions
provider. TomTom's product, GO 740 LIVE, wirelessly receives
real-time traffic speed and incident reports every minute to
suggest alternate routes based on its knowledge of traffic
conditions. Metro Traffic's strategy of continually improving its
product with leading-edge technology solutions will maintain its
undisputed leadership position in the traffic reporting business.
"Like other media companies, Westwood One's revenue continues to be
impacted by the economic downturn as advertisers continue to
exercise caution with their budgets," said Sherwood. "We have
restructured the Company's capital structure and initiated cost
reduction programs so that we can emerge from these difficult times
as a stronger, more nimble company." Revenue for the first quarter
of 2009 decreased $20.7 million or 19.4%, to $85.9 million compared
with $106.6 million in 2008. The decrease in revenue is primarily
attributable to the current economic downturn and the general
decline in advertising spending, which started to contract mid-year
2008. The decline accelerated during the fourth quarter of 2008 and
has continued in 2009. Revenue for Westwood One's Metro Traffic
decreased 26.9%, which was principally due to the weak local
advertising marketplace spanning various categories including
automotive, retail and telecommunications. Network Radio revenue
declined 13.5%, which was principally due to the general decline in
advertising spending which affected Network revenue from sports and
news events, particularly in automotive advertising, as well as the
cancellation of certain unprofitable programs. Adjusted EBITDA for
the first quarter of 2009, defined as operating income plus
depreciation and amortization, special charges, and non-cash
stock-based compensation, was a loss of $(6.9) million compared
with $11.0 million in 2008, a decrease of $17.9 million. The
decline in Adjusted EBITDA was primarily due to the decrease in
revenue, partially offset by a reduction in operating costs
attributable to the Metro Traffic re-engineering, the cost
reduction program, and lower commission and bad debt expense. In
the first quarter of 2009, free cash flow, defined as net income
plus depreciation and amortization, special charges, stock-based
compensation, and amortization of deferred financing costs less
capital expenditures, decreased approximately $8.8 million to
$(3.4) million, or $(0.03) per diluted share, compared with $5.4
million, or $0.06 per diluted share, in 2008's first quarter. The
change in free cash flow primarily reflects the increased net loss,
and the decrease in depreciation and amortization, partially offset
by lower capital expenditures. Capital expenditures were
approximately $1.2 million in the current quarter compared with
$3.7 million in the first quarter of 2008. The decrease in capital
expenditures reflects the timing of planned investments in systems
and infrastructure. Special charges in the first quarter of 2009
were $5.8 million compared with $8.0 million in the comparable
quarter of 2008. Special charges in the current quarter were
primarily related to the Company's debt restructuring and
recapitalization. Special charges in the first quarter of 2008
consisted of $5.0 million of contract termination costs and $3.0
million of associated legal and professional fees. Operating loss
in the first quarter of 2009 was $(19.6) million compared to $(3.0)
million for the same period in 2008. The loss is primarily
attributable to the revenue decline primarily resulting from the
current economic downturn and related weakness in the advertising
market. The decline in revenue is partially offset by the
realignment of the Company's cost base as part of the
re-engineering and cost savings initiatives. Interest expense
decreased $2.1 million, or 38.9%, to $3.3 million in the first
quarter of 2009 from $5.4 million in the first quarter of 2008, due
to a reduction in the amount of outstanding debt. Income tax
benefit increased $4.4 million to a benefit of $7.4 million in the
first quarter of 2009 from a benefit of $3.0 million in the first
quarter of 2008. Net loss for the first quarter was $(15.2)
million, or $(0.17) per diluted common share, compared with a net
loss in last year's first quarter of $(5.3) million, or $(0.06) per
diluted common share. 2009 Outlook Looking forward, the Company
expects operating expenses in the second quarter to decline, as
compared to the first quarter of 2009, as a result of the
seasonality in broadcast rights fees as well as the new cost
reduction program launched in the first quarter, and the ongoing
reductions from the Metro Traffic re-engineering program. The
Company expects operating expenses to be down by approximately
$13.0 to $15.0 million in the second quarter of 2009 versus the
first quarter of 2009. Westwood One will continue to drive its
turnaround efforts in 2009 by focusing on three key strategies: --
First, by generating revenue from branded programming in network
radio, and an enhanced technology-based product in traffic, and
leveraging these and other revenue initiatives with a strengthened
sales organization. -- Second, by maintaining a single-minded focus
on reducing operating expenses. -- Third, by taking advantage of
growth opportunities in the marketplace. About Westwood One
Westwood One, Inc. (OTCBB:WWON) is the largest independent provider
of network radio programming and the largest provider of traffic
information in the U.S. Westwood One serves more than 5,000 radio
and television stations in the U.S. The Company provides over 150
news, sports, music, talk and entertainment programs, features and
live events to numerous media partners. Through its Metro Traffic
division, Westwood One provides traffic reporting and local news,
sports and weather to over 2,200 radio and television stations. The
Company also provides digital and other cross platform delivery of
its Network Radio and Metro Traffic content. 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: changes in economic
conditions in the U.S. and in other countries in which Westwood
One, Inc. currently does business (both generally and relative to
the broadcasting industry); advertiser spending patterns, including
the notion that orders are being placed in close proximity to air,
limiting visibility of demand; changes in the level of competition
for advertising dollars; technological changes and innovations;
fluctuations in programming costs; shifts in population and other
demographics; changes in labor conditions; and changes in
governmental regulations and policies and actions of federal and
state regulatory bodies. Other key risks are described in the
Company's reports filed with the Securities and Exchange Commission
("SEC"), including the Company's annual report on Form 10-K/A for
the year ending December 31, 2008. 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 month periods
ended March 31, 2009 and 2008. 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,
restructuring charges and goodwill impairment (when applicable).
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 the Company's 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. (In millions) Three Months Ended March 31,
2009 2008 Adjusted EBITDA $(6.9) $11.1 Less: Depreciation and
amortization (2.1) (4.0) Stock-based compensation (1.4) (2.1)
Special charges and restructuring charges (9.2) (8.0) ----- -----
Operating Income (Loss) $(19.6) $(3.0) 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 goodwill impairment (when applicable) 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: (In millions except per share
amounts) Three Months Ended March 31, 2009 2008 Net (Loss) $(15.2)
$(5.3) Plus (Minus) Depreciation and Amortization 2.1 4.0 Special
charges and restructuring charges 9.2 8.0 Stock Compensation 1.4
2.1 Amortization of Deferred Financing Cost .3 .3 (Less) Capital
expenditures (1.2) (3.7) Free Cash Flow $(3.4) $5.4 Diluted
weighted-average shares outstanding 98.1 89.4 Free Cash Flow per
Share $(0.03) $0.06 WESTWOOD ONE, INC. CONSOLIDATED STATEMENT OF
OPERATIONS (In thousands, except share and per share amounts)
(unaudited) Three Months Ended March 31, 2009 2008 NET REVENUE
$85,867 $106,627 ----------- Operating Costs (includes related
party expenses of $20,020 and $17,827, respectively) 91,393 94,229
Depreciation and Amortization (includes related party warrant
amortization in 2008 of $1,618) 2,063 3,976 Corporate General and
Administrative Expenses (includes related party expenses in 2008 of
$656) 2,766 3,466 Restructuring Charges 3,440 - Special Charges
(includes related party expenses of $1,713 in 2009 and $5,000 in
2008) 5,809 7,956 105,471 109,627 OPERATING (LOSS) INCOME (19,604)
(3,000) ----------------------- Interest Expense 3,263 5,399 Other
Income (300) (41) INCOME (LOSS) BEFORE INCOME TAX (22,567) (8,358)
INCOME TAX (BENEFIT) EXPENSE (7,381) (3,020) NET (LOSS) INCOME
$(15,186) $(5,338) NET (LOSS) INCOME attributable to Common
Stockholders $(16,650) $(5,338) (LOSS) EARNINGS PER SHARE COMMON
STOCK BASIC $(0.17) $(0.06) DILUTED $(0.17) $(0.06) CLASS B STOCK
BASIC $- $- DILUTED $- $- WEIGHTED AVERAGE SHARES OUTSTANDING:
COMMON STOCK BASIC 98,074 89,423 DILUTED 98,074 89,423 CLASS B
STOCK BASIC 292 292 DILUTED 292 292 WESTWOOD ONE, INC. CONSOLIDATED
BALANCE SHEETS (In thousands, except per share amounts) March 31,
December 31, 2009 2008 (unaudited) ASSETS ------ CURRENT ASSETS:
Cash and cash equivalents $7,199 $6,437 Accounts receivable, net of
allowance for doubtful accounts of $3,952 (2009) and $3,632 (2008)
81,080 94,273 Prepaid and other assets 14,629 18,758 Total Current
Assets 102,908 119,468 Property and equipment, net 29,546 30,417
Goodwill 33,988 33,988 Intangible assets, net 2,477 2,660 Deferred
tax asset 19,712 14,220 Other assets 2,765 4,335 TOTAL ASSETS
$191,396 $205,088 LIABILITIES, REDEEMABLE PREFERRED STOCK AND
SHAREHOLDERS' EQUITY (DEFICIT) ------------------------------
CURRENT LIABILITIES: Accounts payable $20,770 $27,807 Amounts
payable to related parties 24,225 22,680 Deferred revenue 2,587
2,397 Income taxes payable - Accrued expenses and other liabilities
29,797 25,565 Current maturity of long-term debt - 249,053 Total
Current Liabilities 77,379 327,502 Long-term debt 251,446 - Other
liabilities 7,049 6,993 TOTAL LIABILITIES 335,874 334,495
Commitments and Contingencies Redeemable Preferred Stock: $.01 par
value, authorized: 10,000 shares; issued and outstanding: 75 shares
of 7.5% Series A Convertible Preferred Stock; liquidation
preference $1,000 per share, plus accumulated dividends 79,545
73,738 SHAREHOLDERS' (DEFICIT) EQUITY
------------------------------ Common stock, $.01 par value:
authorized: 300,000 shares; issued and outstanding: 101,259 (2009)
and 101,253 (2008) 1,013 1,013 Class B stock, $.01 par value:
authorized: 3,000 shares; issued and outstanding: 292 (2009 and
2008) 3 3 Additional paid-in capital 287,293 293,120 Net unrealized
gain 402 267 Accumulated deficit (512,734) (497,548) TOTAL
SHAREHOLDERS' EQUITY (DEFICIT) (224,023) (203,145) TOTAL
LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY
(DEFICIT) $191,396 $205,088 WESTWOOD ONE, INC. CONSOLIDATED
STATEMENT OF CASH FLOWS (In thousands, except share and per share
amounts) (unaudited) Three Months Ended March 31, 2009 2008 CASH
FLOW FROM OPERATING ACTIVITIES:
------------------------------------ Net (loss) $(15,186) $(5,338)
Adjustments to reconcile net (loss) to net cash provided by
operating activities: Depreciation and amortization 2,063 3,977
Deferred taxes (6,698) 522 Non-cash stock compensation 1,352 2,123
Amortization of deferred financing costs 308 352 Net change in
assets and liabilities: 20,295 (12,392) Net Cash Provided (Used) By
Operating Activities 2,134 (10,756) CASH FLOW FROM INVESTING
ACTIVITIES: ------------------------------------ Capital
expenditures (1,169) (3,664) Net Cash (Used) In Investing
Activities (1,169) (3,664) CASH FLOW FROM FINANCING ACTIVITIES:
------------------------------------ Issuance of common stock -
22,750 Debt repayments and payments of capital lease obligations
(203) (7,049) Deferred financing costs - (1,537) Net Cash (Used)
Provided in Financing Activities (203) 14,164 NET INCREASE
(DECREASE)IN CASH AND CASH EQUIVALENTS 762 (256) CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD 6,437 6,187 CASH AND CASH
EQUIVALENTS AT END OF PERIOD $7,199 $5,931 DATASOURCE: Westwood
One, Inc. CONTACT: INVESTORS, Rod Sherwood, +1-212-373-5311, or
PRESS, Peter Sessa, +1-212-641-2053, both of Westwood One, Inc. Web
Site: http://www.westwoodone.com/
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