-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Tf1sT84xYDlXLEb907YrDHMk1qR4uDdyibMS82yALKAeN4JHQJF40jndN2HQJ86S IIXNkn2dXuO5UepnIM8oVw== 0000771950-04-000022.txt : 20040428 0000771950-04-000022.hdr.sgml : 20040428 20040428071845 ACCESSION NUMBER: 0000771950-04-000022 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040331 ITEM INFORMATION: FILED AS OF DATE: 20040428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTWOOD ONE INC /DE/ CENTRAL INDEX KEY: 0000771950 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AMUSEMENT & RECREATION SERVICES [7900] IRS NUMBER: 953980449 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14691 FILM NUMBER: 04758498 BUSINESS ADDRESS: STREET 1: 40 WEST 57TH STREET STREET 2: 5TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2126412063 MAIL ADDRESS: STREET 1: 40 WEST 57TH STREET STREET 2: 5TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: WESTWOOD ONE DELAWARE INC /CA/ DATE OF NAME CHANGE: 19860408 8-K 1 wonq120048k.txt WESTWOOD ONE FORM 8-K FOR Q1 2004 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) April 28, 2004 WESTWOOD ONE, INC. (Exact name of registrant as specified in its charter) Delaware 0-13020 95-3980449 - ----------------------------- -------------- -------------------- (State or other (Commission (IRS Employer jurisdiction of incorporation File Number) Identification No.) 40 W 57th Street 5th Floor, New York, New York 10019 (Address of principal executive offices, including zip code) Registrant's telephone number, including area code (212) 641-2000 (Former name or former address, if changed since last report) Item 12. Results of Operations and Financial Condition Registrant issued a press release announcing its first quarter 2004 financial results. SIGNATURE --------- Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: April 28, 2004 /S/ Andrew Zaref -------------- --------------------- Andrew Zaref Chief Financial Officer EXHIBIT INDEX ------------- Exhibit No. Exhibit - ----------- ------- 99.1 Press Release of Westwood One, Inc. announcing its first quarter 2004 financial results EX-99 3 won8k1q2004exhibit99.txt WESTWOOD ONE EXHIBIT 99.1 TO FORM 8-K FOR Q1 2004 EXHIBIT 99.1 WESTWOOD ONE, INC. PRESS RELEASE FOR IMMEDIATE RELEASE CONTACT: ANDREW ZAREF (212) 373-5311 WESTWOOD ONE, INC. REPORTS RECORD FIRST QUARTER 2004 OPERATING RESULTS REVENUES UP 3% OPERATING INCOME UP 6% NET INCOME PER SHARE UP 10% New York, NY -- April 28, 2004 -- Westwood One, Inc. (NYSE: WON) today reported record first quarter 2004 revenues, operating income, net income and net income per share. Net revenues for the first quarter of 2004 were a record $129.6 million compared with $125.8 million for the first quarter of 2003, an increase of approximately $3.8 million, or 3%. Revenues associated with both local and regional, and national clients increased. Operating income for the first quarter of 2004 was a record $31.0 million compared with $29.2 million in the first quarter of 2003, an increase of approximately $1.8 million, or 6%. The increase in operating income was primarily attributable to higher revenues, partially offset by additional programming and increased distribution costs. Net income for the first quarter of 2004 was a record $17.5 million compared with $16.9 million in the first quarter of 2003, an increase of $.6 million, or 4%. Net income per diluted share increased 10% to a record $.18 per share from $.16 per share in the first quarter of 2003. Shane Coppola, President and Chief Executive Officer of Westwood One said: "Westwood One's record first quarter operating results are indicative of the improvement we have seen, and continue to see, in the advertising marketplace." Mr. Coppola added, "we have made investments in additional programs and distribution over the last several quarters and we expect our Company to experience a benefit in revenues and operating income before depreciation and amortization." Income tax expense in the first quarter of 2004 was $10.6 million compared with $9.9 million in the comparable 2003 period, an increase of $.7 million, or 7%. The Company's effective income tax rate in the first quarter of 2004 was 37.6% compared with 36.9% in the comparable period of 2003. The increase in effective tax rate is attributable to changes in state tax laws. Weighted average shares outstanding in the first quarter of 2004 decreased approximately 5%. The decrease in weighted average shares outstanding was primarily attributable to the Company's stock repurchase program. In the first quarter of 2004, the Company repurchased approximately 2.1 million shares of its Common Stock for approximately $63.3 million. Andrew Zaref, Chief Financial Officer of Westwood One said: "Our record operating results, combined with our ability to generate significant cash flow, continue to enable us to reinvest and grow our business, while simultaneously repurchasing our common stock." 2004 Outlook - ------------ Westwood One reiterated its previously issued annual guidance to deliver revenue growth of mid-single digits, resulting in double digit growth in operating income before depreciation and amortization. About Westwood One - ------------------ Westwood One provides over 150 news, sports, music, talk, entertainment programs, features, live events and 24/7 Formats. Through its subsidiaries, Metro Networks/Shadow Broadcast Services, Westwood One provides local content to the radio and TV industries including news, sports, weather, traffic, video news services and other information. SmartRoute Systems manages traffic information centers for state and local departments of transportation, and markets traffic and travel content to wireless, Internet, in-vehicle navigation systems and voice portal customers. Westwood One serves more than 7,700 radio stations. Westwood One, Inc. is managed by Infinity Broadcasting Corporation, a wholly-owned subsidiary of Viacom Inc. 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 general and relative to the advertising and entertainment industries); fluctuations in interest rates; changes in industry conditions; changes in operating performance; shifts in population and other demographics; changes in the level of competition for advertising dollars; fluctuations in operating costs; technological changes and innovations; changes in labor conditions; changes in governmental regulations and policies and actions of regulatory bodies; changes in tax rates; changes in capital expenditure requirements and access to capital markets. Other key risks are described in the Company's reports filed with the U.S. Securities and Exchange Commission. 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 - ----------------------------------------------------------------- The following tables set forth the Company's Operating Income before Depreciation and Amortization for the three month periods ended March 31, 2004 and 2003. The Company defines "Operating Income before Depreciation and Amortization" as net income adjusted to exclude the following line items presented in its Statement of Operations: Income taxes; Other (Income); Interest expense; and Depreciation and Amortization. While this non-Generally Accepted Accounting Principles ("GAAP") measure has been relabeled to more accurately describe in the title the method of calculation of the measure, the actual method of calculating the measure now labeled Operating Income before Depreciation and Amortization is unchanged from the method previously used to calculate the measure formerly labeled EBITDA or Operating Cash Flow in prior disclosures. The Company uses Operating Income before Depreciation and Amortization, among other things, to evaluate the Company's operating performance, to value prospective acquisitions, to determine compliance with debt covenants and as one of several components of incentive compensation targets for certain management personnel, and this measure is among the primary measures used by management for planning and forecasting of future periods. 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. Since Operating Income before Depreciation and Amortization 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. Operating Income before Depreciation and Amortization, 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 Operating Income before Depreciation and Amortization excludes certain financial information compared with net 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 Securities and Exchange Commission ("SEC"), the Company provides below a reconciliation of Operating Income before Depreciation and Amortization to net income the most directly comparable amount reported under GAAP. WESTWOOD ONE, INC. SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION - ----------------------------------------------------------------- (In millions) Three Months Ended March 31, ---------------------------- 2004 2003 ---- ---- Operating income before depreciation and amortization $ 34.1 $ 32.1 Depreciation and amortization 3.1 2.9 ------ ------ Operating Income 31.0 29.2 Interest Expense 2.9 2.4 Other (Income) - - ------ ------ Income before income taxes 28.1 26.8 Income Taxes 10.6 9.9 ------ ------ Net income $ 17.5 $ 16.9 ====== ====== Free cash flow is defined by the Company as net income plus depreciation and amortization 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 cash available to service debt, 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. 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 flow 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 operating cash flow 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 operating cash flow (the most directly comparable GAAP financial measure) for capital expenditures, deferred taxes and certain other non-cash items 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 flow provided by operating activities. WESTWOOD ONE, INC. SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION - ----------------------------------------------------------------- (In millions) The following table presents a reconciliation of the Company's net cash flow provided by operating activities to free cash flow:
Three Months Ended March 31, ------------------ 2004 2003 ---- ---- Net Cash Provided by Operating Activities $51.2 $54.7 Plus (Minus) Changes in assets and liabilities Decrease in accounts receivable (19.2) (18.8) Decrease in other assets (2.6) (4.6) Increase in accounts payable and accrued liabilities (7.2) (10.4) Deferred taxes and other adjustments to reconcile net income to net cash provided by operating activities (1.5) (1.2) Capital Expenditures (1.0) (1.0) ------ ------ Free Cash Flow $19.7 $18.7 ====== ======
WESTWOOD ONE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Three Months Ended March 31, ------------------ 2004 2003 ---- ---- (Unaudited) REVENUES $129,608 $125,795 -------- -------- Operating Costs 93,496 92,052 Depreciation and Amortization 3,154 2,880 Corporate General and Administrative Expenses 1,970 1,644 -------- -------- 98,620 96,576 -------- -------- OPERATING INCOME 30,988 29,219 Interest Expense 2,917 2,451 Other Income (40) (20) -------- -------- INCOME BEFORE INCOME TAXES 28,111 26,788 INCOME TAXES 10,564 9,874 -------- -------- NET INCOME $17,547 $16,914 ======== ======== NET INCOME PER SHARE: BASIC $ .18 $ .16 ======== ======== DILUTED $ .18 $ .16 ======== ======== WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC 98,003 103,063 ======== ======== DILUTED 100,068 105,638 ======== ======== WESTWOOD ONE, INC. CONSOLIDATED BALANCE SHEETS (In thousands)
March 31, December 31, 2004 2003 ---- ---- (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 20,027 $ 8,665 Accounts receivable, net of allowance for doubtful accounts of $4,676 (2004) and $4,334 (2003) 116,499 135,720 Prepaid and other assets 20,974 21,110 -------- -------- Total Current Assets 157,500 165,495 PROPERTY AND EQUIPMENT, NET 49,399 50,562 GOODWILL 990,472 990,472 INTANGIBLE ASSETS, NET 7,054 7,626 OTHER ASSETS 41,909 47,879 -------- -------- TOTAL ASSETS $1,246,334 $1,262,034 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 26,301 $ 27,949 Accrued expenses and other liabilities 57,560 51,924 ---------- ---------- Total Current Liabilities 83,861 79,873 LONG-TERM DEBT 316,533 300,366 DEFERRED INCOME TAXES 37,902 36,902 OTHER LIABILITIES 8,786 8,943 ---------- ---------- TOTAL LIABILITIES 447,082 426,084 ---------- ---------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Preferred stock: authorized 10,000 shares, none outstanding - - Common stock, $.01 par value: authorized, 261,715 shares; issued and outstanding, 97,449 (2004) and 99,057 (2003) 974 991 Class B stock, $.01 par value: authorized, 3,000 shares: issued and outstanding, 704 (2004 and 2003) 7 7 Additional paid-in capital 464,605 517,132 Accumulated earnings 336,567 319,020 ---------- ---------- 802,153 837,150 Less treasury stock, at cost; 100 (2004) and 35 (2003) shares (2,901) (1,200) ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 799,252 835,950 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,246,334 $1,262,034 ========== ==========
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