Weak Q2 For Westwood One
August 9, 2007 at 5:48 AM (PT)
WESTWOOD ONE second-quarter revenue decreased 17.4% to $23.4 million, blamed on lower demand for the company’s products and services, increased competition and reduced audience levels. Revenue from national and local/regional ads fell 23.8% to $14.8 million and 11.9% to $8.6 million, respectively, from second quarter 2006. Net income fell 43.4% to $6.9 million (8 cents/basic and diluted share).
Pres./CEO PETER KOSANN said, "during the first half of 2007, our team worked hard to control costs during a period of revenue decline. Although the marketplace continues to be challenging, there are recent signs that demand for our programs and services will improve by the fourth quarter. We are beginning to see modest improvement in revenue pacing and are making selective investments in programming and infrastructure to best position the Company for future growth.
"We continue to work toward finalizing a new multi-year agreement with CBS RADIO, and hope to present it to shareholders for approval in the fourth quarter."
WESTWOOD ONE expects full-year revenue to decrease high-single digits to low-double digits and operating costs to decrease low to mid-single digits compared with 2006. Revenue for the third quarter is expected to decrease low-double digits and operating costs to increase low-single digits. The bleak outlook has the company warning that it may violate a loan covenant within the next 12 months and that it is "actively evaluating all of its options to avoid such an occurrence," with options including amending loan covenants, raising additional capital or increasing free cash flow, refinancing existing debt, or obtaining waivers from its creditors.