Dial Global Posts Disappointing Q3 Financials, Points Finger At Rush Limbaugh For Some Problems
November 16, 2012 at 4:00 AM (PT)
YESTERDAY (NET NEWS 11/16) ALL ACCESS first reported that DIAL GLOBAL, INC. had notified the NASDAQ Stock Market of its intention to voluntarily delist from its Global Market. The decision to voluntarily delist from NASDAQ was taken following a review by the Company's Board of Directors, which determined that a delisting would be in the best interests of the Company.
That decision came as the company released its latest financials, the first since the acquisition of WESTWOOD ONE. While that move increased revenues from $25.018 million to $58.208 million, it also brought various costs with it. Q3 "Costs of revenue jumped from 10.870 million in 2011 to $39.625 million now. Gross profit only inched up, growing from $14.148 million in Q3 2011 to $18.583 now.
Additionally, DIAL GLOBAL disclosed in yesterday's 10-Q filing that it will take a goodwill impairment charge of $67.218 million.
The company explained in it's 10-Q filing that, "Based on our current financial projections, absent additional debt or equity capital from third parties, we anticipate that we will breach our debt leverage and interest coverage covenants for the quarters ended DECEMBER 31st, 2012 and beyond. Such expected non-compliance is a result of several factors. We believe our 2012 results were adversely impacted by, among other things, late cancellations in ad buys (which we believe was a by-product of the election and renewed economic uncertainty), competitive factors, such as a greater diversity of digital ad platforms (into which ad budgets have flowed) and increased competition from our major competitors, and advertisers' response to controversial statements by a certain nationally syndicated talk radio personality in MARCH 2012."
That was apparently in reference to PREMIERE NETWORKS' RUSH LIMBAUGH, who faced of criticism over his comments about the law student/activist SANDRA FLUKE.
DIAL GLOBAL continued, "If we are unable to obtain further amendments to our Credit Facilities to modify the requirements of the financial ratio covenants contained therein and certain other terms thereof, depending on our future results, management cannot assure that we will be in compliance with the terms of the Credit Facilities in subsequent periods in 2013 or thereafter absent additional debt or equity capital from third parties. The discussions with our lenders to date have contemplated a separate comprehensive amendment to our Credit Facilities to better position the Company to achieve compliance with the terms of its Credit Agreements in the future, and the waiver is intended to provide the parties further opportunity to continue these negotiations."