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SECURITIES AND EXCHANGE COMMISSION
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State or other jurisdiction of incorporation or organization) | 95-3980449 (I.R.S. Employer Identification No.) | |
40 West 57th Street, 5th Floor, New York, NY (Address of principal executive offices) | 10019 (Zip Code) |
(Registrant’s telephone number, including area code)
Large Accelerated Filero | Accelerated Filerþ | Non-Accelerated Filero | Smaller Reporting Companyo |
Explanatory Note
This Amendment No. 1 on Form 10-Q/A (this “Amendment”) amends our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 filed with the SEC on August 14, 2009 (the “Original 10-Q”). This Amendment is filed solely for the purpose of including in Notes 2 and 10 to our financial statements and in the MD&A section, explanatory information related to a beneficial conversion feature contained in our then outstanding Series A Convertible Preferred Stock and Series B Convertible Preferred Stock that was inadvertently omitted from our Original 10-Q. In addition, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, the Company is including with this Amendment certain currently dated certifications.
Except for the information described above, the Company has not modified or updated disclosures provided in the Original 10-Q in this Amendment. Accordingly, this Amendment does not reflect events occurring after the filing of the Original 10-Q or modify or update those disclosures affected by subsequent events. Information not affected by this amendment is unchanged and reflects the disclosures made at the time the Original 10-Q was filed.
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Exhibit 31.a | ||||||||
Exhibit 31.b |
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Successor Company | Predecessor Company | |||||||||
June 30, | December 31, | |||||||||
2009 | 2008 | |||||||||
(unaudited) | (derived from audited) | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 7,980 | $ | 6,437 | ||||||
Accounts receivable | 82,448 | 94,273 | ||||||||
Prepaid and other assets | 17,026 | 18,758 | ||||||||
Total Current Assets | 107,454 | 119,468 | ||||||||
Property and equipment, net | 36,357 | 30,417 | ||||||||
Goodwill | 86,414 | 33,988 | ||||||||
Intangible assets, net | 112,032 | 2,660 | ||||||||
Deferred tax asset | 2,385 | 14,220 | ||||||||
Other assets | 2,414 | 4,335 | ||||||||
TOTAL ASSETS | $ | 347,056 | $ | 205,088 | ||||||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Accounts payable | $ | 17,588 | $ | 27,807 | ||||||
Amounts payable to related parties | 20,128 | 22,680 | ||||||||
Deferred revenue | 2,681 | 2,397 | ||||||||
Accrued expenses and other liabilities | 19,648 | 25,565 | ||||||||
Current maturity of long-term debt | — | 249,053 | ||||||||
Total Current Liabilities | 60,045 | 327,502 | ||||||||
Long-term debt | 128,078 | — | ||||||||
Deferred tax liability | 63,845 | — | ||||||||
Due to Gores | 10,891 | — | ||||||||
Other liabilities | 10,551 | 6,993 | ||||||||
TOTAL LIABILITIES | 273,410 | 334,495 | ||||||||
Commitments and Contingencies | ||||||||||
Redeemable Preferred Stock: $.01 par value, authorized: 75 shares; issued and outstanding: 75 shares of 7.5% Series A-1 Preferred Stock; liquidation preference $1,065 per share, plus accumulated dividends | 38,880 | |||||||||
Redeemable Preferred Stock: $.01 par value, authorized: 60 shares; issued and outstanding: 60 shares of 8.0% Series B Convertible Preferred Stock; liquidation preference $1,000 per share, plus accumulated dividends | 30,476 | |||||||||
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 | — | 73,738 | ||||||||
Total Redeemable Preferred Stock | 69,356 | 73,738 | ||||||||
SHAREHOLDERS’ (DEFICIT) EQUITY | ||||||||||
Common stock, $.01 par value: authorized: 300,000 shares; issued and outstanding: 510 (2009) and 101,253 (2008) | 5 | 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 | 10,561 | 293,120 | ||||||||
Net unrealized gain | (95 | ) | 267 | |||||||
Accumulated deficit | (6,184 | ) | (497,548 | ) | ||||||
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT) | 4,290 | (203,145 | ) | |||||||
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY (DEFICIT) | $ | 347,056 | $ | 205,088 | ||||||
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Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months Ended | For the Period | Six Months Ended | ||||||||||||||||||
April 24, 2009 to June 30, 2009 | April 1, 2009 to April 23, 2009 | June 30, 2008 | January 1, 2009 to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
NET REVENUE | $ | 58,044 | $ | 25,607 | $ | 100,372 | $ | 111,474 | $ | 206,998 | ||||||||||||
Operating Costs | 52,116 | 20,187 | 85,411 | 111,580 | 179,640 | |||||||||||||||||
Depreciation and Amortization | 5,845 | 521 | 2,421 | 2,585 | 6,397 | |||||||||||||||||
Corporate General and Administrative Expenses | 2,407 | 1,482 | 1,199 | 4,248 | 4,665 | |||||||||||||||||
Goodwill Impairment | — | — | 206,053 | — | 206,053 | |||||||||||||||||
Restructuring Charges | 1,454 | 536 | — | �� | 3,976 | — | ||||||||||||||||
Special Charges | 368 | 7,010 | 897 | 12,819 | 8,853 | |||||||||||||||||
62,190 | 29,736 | 295,981 | 135,208 | 405,608 | ||||||||||||||||||
OPERATING (LOSS) INCOME | (4,146 | ) | (4,129 | ) | (195,609 | ) | (23,734 | ) | (198,610 | ) | ||||||||||||
Interest Expense (Income) | 4,692 | (41 | ) | 4,352 | 3,222 | 9,751 | ||||||||||||||||
Other Income | (4 | ) | (59 | ) | (43 | ) | (359 | ) | (85 | ) | ||||||||||||
INCOME (LOSS) BEFORE INCOME TAX | (8,834 | ) | (4,029 | ) | (199,918 | ) | (26,596 | ) | (208,276 | ) | ||||||||||||
INCOME TAX (BENEFIT) EXPENSE | (2,650 | ) | (254 | ) | (174 | ) | (7,635 | ) | (3,194 | ) | ||||||||||||
NET (LOSS) INCOME | $ | (6,184 | ) | $ | (3,775 | ) | $ | (199,744 | ) | $ | (18,961 | ) | $ | (205,082 | ) | |||||||
NET (LOSS) INCOME attributable to Common Stockholders | $ | (9,595 | ) | $ | (5,387 | ) | $ | (199,932 | ) | $ | (22,037 | ) | $ | (205,270 | ) | |||||||
(LOSS) EARNINGS PER SHARE | ||||||||||||||||||||||
COMMON STOCK | ||||||||||||||||||||||
BASIC | $ | (18.85 | ) | $ | (10.67 | ) | $ | (396.69 | ) | $ | (43.64 | ) | $ | (431.24 | ) | |||||||
DILUTED | $ | (18.85 | ) | $ | (10.67 | ) | $ | (396.69 | ) | $ | (43.64 | ) | $ | (431.24 | ) | |||||||
CLASS B STOCK | ||||||||||||||||||||||
BASIC | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
DILUTED | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||||||||||||||||||
COMMON STOCK | ||||||||||||||||||||||
BASIC | 509 | 505 | 504 | 505 | 476 | |||||||||||||||||
DILUTED | 509 | 505 | 504 | 505 | 476 | |||||||||||||||||
CLASS B STOCK * | ||||||||||||||||||||||
BASIC | 292 | 292 | 292 | 292 | 292 | |||||||||||||||||
DILUTED | 292 | 292 | 292 | 292 | 292 | |||||||||||||||||
* | Reverse stock split not reflected in total. Class B Stock was converted into common stock prior to effectiveness of reverse stock split. |
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WESTWOOD ONE, INC. |
Successor | Predecessor | |||||||||||||
Company | Company | |||||||||||||
For the Period | For the Period | Six Months Ended | ||||||||||||
April 24, 2009 to June 30, 2009 | January 1, 2009 to April 23, 2009 | June 30, 2008 | ||||||||||||
CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||||||||
Net (loss) | $ | (6,184 | ) | $ | (18,961 | ) | $ | (205,082 | ) | |||||
Adjustments to reconcile net (loss) to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 5,845 | 2,585 | 6,397 | |||||||||||
Goodwill impairment | 206,053 | |||||||||||||
Loss on disposal of property and equipment | 76 | 188 | ||||||||||||
Deferred taxes | 2,162 | (6,874 | ) | (7,196 | ) | |||||||||
Non-cash stock compensation | 852 | 2,110 | 2,455 | |||||||||||
Amortization of deferred financing costs | 331 | 792 | ||||||||||||
Net change in assets and liabilities (net of effect of Refinancing): | (17,078 | ) | 19,844 | (8,261 | ) | |||||||||
Net Cash (Used) By Operating Activities | (14,327 | ) | (777 | ) | (4,842 | ) | ||||||||
CASH FLOW FROM INVESTING ACTIVITIES: | ||||||||||||||
Capital expenditures | (1,546 | ) | (1,384 | ) | (6,078 | ) | ||||||||
Net Cash (Used) In Investing Activities | (1,546 | ) | (1,384 | ) | (6,078 | ) | ||||||||
CASH FLOW FROM FINANCING ACTIVITIES: | ||||||||||||||
Issuance of common stock | 22,750 | |||||||||||||
Issuance of series A convertible preferred stock and warrants | 74,178 | |||||||||||||
Issuance of series B converible preferred stock | 25,000 | |||||||||||||
Debt repayments | (25,000 | ) | (85,000 | ) | ||||||||||
Payments of capital lease obligations | (152 | ) | (271 | ) | (343 | ) | ||||||||
Proceeds from term loan | 20,000 | |||||||||||||
Deferred financing costs | — | (1,537 | ) | |||||||||||
Net Cash Provided (Used) in Financing Activities | 19,848 | (271 | ) | 10,048 | ||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 3,975 | (2,432 | ) | (872 | ) | |||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 4,005 | 6,437 | 6,187 | |||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 7,980 | $ | 4,005 | $ | 5,315 | ||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||
Non-cash financing activities (1) | ||||||||||||||
Cancellation of long-term debt (2) | — | 252,060 | — | |||||||||||
Issuance of new long-term debt (2) | 117,500 | — | — |
(1) | All of the Series A Preferred Stock was exchange for all of the Series A-1 Preferred Stock. | |
(2) | 34,962 shares of the Series B Preferred Stock was issued to our lenders in exchange in part for the cancellation of prior indebtedness. |
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Unrealized | Accumulated | |||||||||||||||||||||||||||||||||||
(Accumulated | Gain(Loss) on | Total | Other | |||||||||||||||||||||||||||||||||
Additional | Deficit) | Available | Share- | Compre- | ||||||||||||||||||||||||||||||||
Common Stock | Class B Stock | Paid-in | Retained | for Sale | holders’ | hensive | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Earnings | Securities | Equity | (Loss) | ||||||||||||||||||||||||||||
Balance as of December 31, 2008 | 101,253 | $ | 1,013 | 292 | $ | 3 | $ | 293,120 | $ | (497,548 | ) | $ | 267 | $ | (203,145 | ) | $ | (433,251 | ) | |||||||||||||||||
Net loss | (18,961 | ) | (18,961 | ) | (18,961 | ) | ||||||||||||||||||||||||||||||
Comprehensive income | 219 | 219 | 219 | |||||||||||||||||||||||||||||||||
Equity based compensation | 2,110 | 2,110 | ||||||||||||||||||||||||||||||||||
Issuance common stock under equity based compensation plans | 777 | 7 | (939 | ) | (932 | ) | ||||||||||||||||||||||||||||||
Issuance of common stock | — | |||||||||||||||||||||||||||||||||||
Preferred stock accretion | (6,157 | ) | — | (6,157 | ) | |||||||||||||||||||||||||||||||
Cancellations of vested equity grants | (890 | ) | (890 | ) | ||||||||||||||||||||||||||||||||
Ending Balance as of April 23, 2009 | 102,030 | $ | 1,020 | 292 | $ | 3 | $ | 287,244 | $ | (516,509 | ) | $ | 486 | $ | (227,756 | ) | $ | (451,993 | ) |
Unrealized | Accumulated | |||||||||||||||||||||||||||||||||||
(Accumulated | Gain(Loss) on | Total | Other | |||||||||||||||||||||||||||||||||
Additional | Deficit) | Available | Share- | Compre- | ||||||||||||||||||||||||||||||||
Common Stock | Class B Stock | Paid-in | Retained | for Sale | holders’ | hensive | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Earnings | Securities | Equity | (Loss) | ||||||||||||||||||||||||||||
Revalued Capital | 510 | 5 | 292 | 3 | 2,256 | 2,264 | ||||||||||||||||||||||||||||||
Net loss | (6,184 | ) | (6,184 | ) | (6,184 | ) | ||||||||||||||||||||||||||||||
Comprehensive (loss) | (95 | ) | (95 | ) | (95 | ) | ||||||||||||||||||||||||||||||
Equity based compensation | 852 | 852 | ||||||||||||||||||||||||||||||||||
Issuance common stock under equity based compensation plans | (19 | ) | (19 | ) | ||||||||||||||||||||||||||||||||
Preferred stock accretion | (2,979 | ) | (2,979 | ) | ||||||||||||||||||||||||||||||||
Cancellations of vested equity grants | (59 | ) | (59 | ) | ||||||||||||||||||||||||||||||||
Beneficial conversion feature | 10,510 | 10,510 | ||||||||||||||||||||||||||||||||||
Balance as of June 30, 2009 | 510 | 5 | 292 | 3 | 10,561 | (6,184 | ) | (95 | ) | 4,290 | (6,279 | ) | ||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Current Assets | $ | 104,641 | ||
Goodwill | 86,414 | |||
Intangibles | 116,910 | |||
Property, Plant and Equipment, Net | 36,270 | |||
Other Assets | 21,913 | |||
Current Liabilities | 81,160 | |||
Deferred Income Taxes | 77,879 | |||
Due to Gores | 10,797 | |||
Other Liabilities | 10,458 | |||
Long-term Debt | 106,703 | |||
Total Business Enterprise Value | $ | 79,151 | ||
Unaudited Pro Forma | ||||||||||||||||
Three Months ended June 30, | Six Months ended June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenue | $ | 83,651 | $ | 100,372 | $ | 169,518 | $ | 206,998 | ||||||||
Net Loss | (15,275 | ) | (209,013 | ) | (35,589 | ) | (222,258 | ) | ||||||||
EPS | $ | (0.75 | ) | $ | (10.29 | ) | $ | (1.75 | ) | $ | (10.94 | ) |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
In connection with the Refinancing and the issuance of the Preferred Stock, we have determined that such Preferred Stock contain a beneficial conversion feature (“BCF”), that is partially contingent. The BCF is measured as the spread between the effective conversion price and the market price of common stock on the commitment date and then multiplying this spread by the number of conversion shares, as adjusted for the contingent shares. A portion of the BCF has been recognized at issuance (issuance BCF) while the majority of the BCF is contingent (contingent BCF) upon the authorization of additional common shares which did not occur until August 3, 2009.
The total BCF, which is limited to the carrying value of the preferred stock, is approximately $76,900, of which $10,900 relates to the issuance BCF and will be amortized using the effective yield method over the period until conversion (4 years) resulting in a reduction to income allocable to common shareholders of $400 for the period ending June 30, 2009 The contingent BCF which amounts to $66,000 (and was limited to the carrying amount of the Preferred Stock), will be recognized when the contingency is resolved in the third quarter (August 3, 2009) which due to the immediate conversion, will result in, among other effects, a deemed dividend that will be included in earnings per share calculation.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||
April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | ||||||||||||||||||
to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
Net (Losses) Income | $ | (6,184 | ) | $ | (3,775 | ) | $ | (199,744 | ) | $ | (18,961 | ) | $ | (205,082 | ) | |||||||
Less: Accumulated Preferred Stock dividends and accretion | (3,411 | ) | (1,612 | ) | (188 | ) | (3,076 | ) | (188 | ) | ||||||||||||
Less: distributed earnings to common stockholders | — | — | — | — | — | |||||||||||||||||
Less: distributed earnings to Class B stockholders | — | — | — | — | — | |||||||||||||||||
Undistributed earnings | $ | (9,595 | ) | $ | (5,387 | ) | $ | (199,932 | ) | $ | (22,037 | ) | $ | (205,270 | ) | |||||||
Earnings — common stock | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Distributed earnings to common stockholders | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Undistributed earnings allocated to common stockholders | (9,595 | ) | (5,387 | ) | (199,932 | ) | (22,037 | ) | (205,270 | ) | ||||||||||||
Total Earnings — common stock, basic | $ | (9,595 | ) | $ | (5,387 | ) | $ | (199,932 | ) | $ | (22,037 | ) | $ | (205,270 | ) | |||||||
Diluted | ||||||||||||||||||||||
Distributed earnings to common stockholders | $ | — | ||||||||||||||||||||
Distributed earnings to Class B stockholders | — | |||||||||||||||||||||
Undistributed earnings allocated to common stockholders | (9,595 | ) | (5,387 | ) | (199,932 | ) | (22,037 | ) | (205,270 | ) | ||||||||||||
Total Earnings — common stock, diluted | $ | (9,595 | ) | $ | (5,387 | ) | $ | (199,932 | ) | $ | (22,037 | ) | $ | (205,270 | ) | |||||||
Weighted average common shares outstanding, basic | ||||||||||||||||||||||
Share-based compensation | 509 | 505 | 504 | 505 | 476 | |||||||||||||||||
Warrants | — | — | — | — | ||||||||||||||||||
Weighted average Class B shares | — | — | — | — | ||||||||||||||||||
Weighted average common shares outstanding, diluted | 509 | 505 | 504 | 505 | 476 | |||||||||||||||||
(Loss) Earnings per common share, basic | ||||||||||||||||||||||
Distributed earnings, basic | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Undistributed earnings — basic | (18.85 | ) | (10.67 | ) | (396.69 | ) | (43.64 | ) | (431.24 | ) | ||||||||||||
Total | $ | (18.85 | ) | $ | (10.67 | ) | $ | (396.69 | ) | $ | (43.64 | ) | $ | (431.24 | ) | |||||||
(Loss) Earnings per common share, diluted | ||||||||||||||||||||||
Distributed earnings, diluted | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Undistributed earnings — diluted | (18.85 | ) | (10.67 | ) | (396.69 | ) | (43.64 | ) | (431.24 | ) | ||||||||||||
Total | $ | (18.85 | ) | $ | (10.67 | ) | $ | (396.69 | ) | $ | (43.64 | ) | $ | (431.24 | ) | |||||||
Earnings per share — Class B Stock | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||
Distributed earnings to Class B stockholders | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Undistributed earnings allocated to Class B stockholders | — | — | — | — | — | |||||||||||||||||
Total Earnings — Class B Stock, basic | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Diluted | ||||||||||||||||||||||
Distributed earnings to Class B stockholders | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Undistributed earnings allocated to Class B stockholders | — | — | — | — | — | |||||||||||||||||
Total Earnings — Class B Stock, diluted | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Weighted average Class B shares outstanding, basic | 292 | 292 | 292 | 292 | 292 | |||||||||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||||
Warrants | — | — | — | — | — | |||||||||||||||||
Weighted average Class B shares outstanding, diluted | 292 | 292 | 292 | 292 | 292 | |||||||||||||||||
Earnings per Class B share, basic | ||||||||||||||||||||||
Distributed earnings, basic | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Undistributed earnings — basic | — | — | — | — | — | |||||||||||||||||
Total | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Earnings per Class B share, diluted | ||||||||||||||||||||||
Distributed earnings, diluted | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Undistributed earnings — diluted | — | — | — | — | — | |||||||||||||||||
Total | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||
April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | ||||||||||||||||||
to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
Representation Agreement | — | — | — | — | 2,583 | |||||||||||||||||
News Agreement | 2,502 | 859 | 3,247 | 4,107 | 6,362 | |||||||||||||||||
Programming and Affiliate Arrangements | 9,689 | 4,112 | 15,198 | 20,884 | 27,375 | |||||||||||||||||
Consulting Fees | 296 | 804 | 2,517 | |||||||||||||||||||
Management Agreement (excluding warrant amortization) | — | — | — | — | 610 | |||||||||||||||||
Warrant Amortization | — | — | — | — | 1,618 | |||||||||||||||||
Payment upon closing of Master Agreement | — | — | — | — | 5,000 | |||||||||||||||||
12,487 | 5,775 | 18,445 | 27,508 | 43,548 | ||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||
April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | ||||||||||||||||||
to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
Consultancy and Advisory Fees | — | 470 | — | 1,533 | — | |||||||||||||||||
Gores Radio Holdings, LLC | 230 | 230 | ||||||||||||||||||||
Glendon Partners Fees | 296 | 104 | — | 754 | — | |||||||||||||||||
296 | 804 | — | 2,517 | — | ||||||||||||||||||
Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||
April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | ||||||||||||||||||
to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
Program commission expense | 248 | 85 | 453 | 416 | 1,180 | |||||||||||||||||
248 | 85 | 453 | 416 | 1,180 | ||||||||||||||||||
Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||
April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | ||||||||||||||||||
to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
Operating Costs | 12,191 | 4,971 | 18,445 | 24,991 | 36,320 | |||||||||||||||||
Depreciation and Amortization | — | — | — | — | 1,618 | |||||||||||||||||
Corporate, General and Administrative | — | — | — | — | 610 | |||||||||||||||||
Special Charges | 296 | 804 | — | 2,517 | 5,000 | |||||||||||||||||
12,487 | 5,775 | 18,445 | 27,508 | 43,548 | ||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Successor Company | Predecessor Company | |||||||||
June 30, 2009 | December 31, 2008 | |||||||||
2009 | 2008 | |||||||||
Land, buildings and improvements | $ | 18,397 | $ | 11,999 | ||||||
Recording, broadcasting and studio equipment | 73,761 | 75,907 | ||||||||
Furniture, equipment and other | 18,116 | 18,445 | ||||||||
$ | 110,274 | $ | 106,351 | |||||||
Less: Accumulated depreciation | 73,917 | 75,934 | ||||||||
Property and equipment, net | $ | 36,357 | $ | 30,417 | ||||||
Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||
April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | ||||||||||||||||||
to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
Depreciation Expense | 1,322 | 474 | 2,225 | 2,354 | 4,388 | |||||||||||||||||
1,322 | 474 | 2,225 | 2,354 | 4,388 | ||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Total | Metro | Network | ||||||||||
Predecessor Company | 33,988 | 23,792 | 10,196 | |||||||||
Goodwill, April 23, 2009 | $ | 33,988 | $ | 23,792 | $ | 10,196 | ||||||
Successor Company | 86,414 | 61,354 | 25,060 | |||||||||
Goodwill, June 30, 2009 | $ | 86,414 | $ | 61,354 | $ | 25,060 | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Successor Company | Predecessor Company | |||||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||||
Estimated | April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | |||||||||||||||||||
Life | to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | |||||||||||||||||||
Trademarks | Indefinite | 20,900 | — | — | — | — | ||||||||||||||||||
Affiliate Relationships | 10 years | 72,100 | 2,477 | 3,211 | 2,661 | 3,395 | ||||||||||||||||||
Internally Developed Software | 5 years | 5,600 | ||||||||||||||||||||||
Client Contracts | 5 years | 8,930 | ||||||||||||||||||||||
Leases | 7 years | 980 | ||||||||||||||||||||||
Insertion Orders | 9 months | 8,400 | ||||||||||||||||||||||
Opening Balance | 116,910 | 2,477 | 3,211 | 2,661 | 3,395 | |||||||||||||||||||
Amortization Expense | 4,878 | 47 | 184 | 231 | 368 | |||||||||||||||||||
Ending Balance | 112,032 | 2,430 | 3,027 | 2,430 | 3,027 | |||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Successor Company | Predecessor Company | |||||||||
June 30, 2009 | December 31, 2008 | |||||||||
Revolving Credit Facility/Term Loan | $ | 20,000 | (1) | $ | 41,000 | |||||
4.64% Senior Notes due on November 30, 2009 | — | 51,475 | ||||||||
15.0% Senior Secured Notes due on July 15, 2012 | 108,078 | (2) | — | |||||||
Due to Gores due on July 15, 2012 | 10,891 | (2) | — | |||||||
5.26% Senior Notes due on November 30, 2012 | — | 154,503 | ||||||||
Deferred Derivative Gain | — | 2,075 | ||||||||
$ | 138,969 | $ | 249,053 | |||||||
(1) | Interest rate of 7.0% on Term Loan. | |
(2) | Includes 5.0% PIK interest which accrues on a quarterly basis |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||
April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | ||||||||||||||||||
to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
Weighted Average Interest Rate | 13.0 | % | 4.2 | % | 3.8 | % | 6.6 | % | 5.2 | % | ||||||||||||
June 30, 2009 | December 31, 2008 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
Borrowings (Short and Long Term) | 138,969 | 137,500 | 249,053 | 158,100 | ||||||||||||
Series A Preferred Stock | — | — | 75,000 | 50,000 | ||||||||||||
Series A-1 Preferred Stock | 38,880 | 43,071 | — | — | ||||||||||||
Series B Preferred Stock | 30,476 | 33,817 | — | — |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
• | Level 1 — Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; | ||
• | Level 2 — Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; | ||
• | Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Level 1 | Level 2 | Level 3 | ||||||||||
Assets: | ||||||||||||
Investments | $ | 634 | $ | — | $ | — | ||||||
Total Assets | $ | 634 | $ | — | $ | — | ||||||
In connection with the Refinancing and the issuance of the Preferred Stock, we have determined that such Preferred Stock contain a beneficial conversion feature (“BCF”), that is partially contingent. The BCF is measured as the spread between the effective conversion price and the market price of common stock on the commitment date and then multiplying this spread by the number of conversion shares, as adjusted for the contingent shares. A portion of the BCF has been recognized at issuance (issuance BCF) while the majority of the BCF is contingent (contingent BCF) upon the authorization of additional common shares which did not occur until August 3, 2009.
The total BCF, which is limited to the carrying value of the preferred stock, is approximately $76,900, of which $10,900 relates to the issuance BCF and will be amortized using the effective yield method over the period until conversion (4 years) resulting in a reduction to income allocable to common shareholders of $400 for the period ending June 30, 2009 The contingent BCF which amounts to $66,000 (and was limited to the carrying amount of the Preferred Stock), will be recognized when the contingency is resolved in the third quarter (August 3, 2009) which due to the immediate conversion, will result in, among other effects, a deemed dividend that will be included in earnings per share calculation.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Weighted | ||||||||
Average | ||||||||
Shares | Price | |||||||
Predecessor Company | ||||||||
Unvested at December 31, 2008 | 7,000 | $ | 7.58 | |||||
Granted January 1 to April 23, 2009 | 75 | 0.06 | ||||||
Forfeited January 1 to April 23, 2009 | (667 | ) | 9.3 | |||||
Unvested at April 23, 2009 | 6,408 | 7.32 | ||||||
Successor Company | ||||||||
Unvested at April 24, 2009 | 6,408 | $ | 7.32 | |||||
Granted April 24 to June 30, 2009 | — | — | ||||||
Forfeited April 24 to June 30, 2009 | (232 | ) | 3.39 | |||||
Unvested at June 30, 2009 | 6,176 | 7.47 | ||||||
Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||
April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | ||||||||||||||||||
to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
Operating Costs | 732 | 218 | 1,217 | 1,136 | 2,371 | |||||||||||||||||
General and Administrative Expense | 120 | 540 | (885 | ) | 974 | 84 | ||||||||||||||||
Total Stock Compensation Expense | 852 | 758 | 332 | 2,110 | 2,455 | |||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Successor Company | Predecessor Company | |||||||||
June 30, | December 31, | |||||||||
2009 | 2008 | |||||||||
Options | 6,176 | 7,000 | ||||||||
Restricted Stock | 179 | 364 | ||||||||
Restricted Stock Units | 440 | 1,216 | ||||||||
Warrants | 10,000 | 10,000 | ||||||||
16,795 | 18,580 | |||||||||
Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||
April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | ||||||||||||||||||
to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
Other Income | 4 | 59 | 43 | 359 | 85 | |||||||||||||||||
Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||
April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | ||||||||||||||||||
to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
Net (loss) Income | $ | (6,184 | ) | $ | (3,775 | ) | $ | (199,744 | ) | $ | (18,961 | ) | $ | (205,082 | ) | |||||||
Unrealized gain (loss) on marketable securities, net of income taxes | (95 | ) | 85 | 48 | 219 | 2,596 | ||||||||||||||||
Comprehensive (loss) Income | $ | (6,279 | ) | $ | (3,690 | ) | $ | (199,696 | ) | $ | (18,742 | ) | $ | (202,486 | ) | |||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Facilities | ||||||||||||||||
Severance | Consolidation | Contract | ||||||||||||||
Termination Costs | Related Costs | Termination Costs | Total | |||||||||||||
Acitivty Thru December 31, 2008 | ||||||||||||||||
Charges | 6,765 | 831 | 6,504 | 14,100 | ||||||||||||
Payments | (3,487 | ) | (41 | ) | (1,108 | ) | (4,636 | ) | ||||||||
Non-Cash utilization | (80 | ) | (1,600 | ) | (1,680 | ) | ||||||||||
Balance at December 31, 2008 | 3,198 | 790 | 3,796 | 7,784 | ||||||||||||
Charges from January 1 to March 31, 2009 | 1,658 | 1,781 | — | 3,439 | ||||||||||||
Charges from April 1 to April 23, 2009 | — | 536 | — | 536 | ||||||||||||
Charges from April 24 to June 30, 2009 | 372 | 1,082 | — | 1,454 | ||||||||||||
Payments | (2,971 | ) | (361 | ) | (1,400 | ) | (4,732 | ) | ||||||||
Non-Cash utilization | — | — | — | — | ||||||||||||
Balance at June 30, 2009 | 2,257 | 3,828 | 2,396 | 8,481 | ||||||||||||
Accumulated Charges | 8,795 | 4,230 | 6,504 | 19,529 | ||||||||||||
Accumulated Payments | (6,458 | ) | (402 | ) | (2,508 | ) | (9,368 | ) | ||||||||
Accumulated Non-Cash utilization | (80 | ) | — | (1,600 | ) | (1,680 | ) | |||||||||
Balance at June 30, 2009 | 2,257 | 3,828 | 2,396 | 8,481 | ||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Successor Company | Predecessor Company | |||||||||||||||||||||
For the Period | For the Period | Three Months | For the Period | Six Months | ||||||||||||||||||
April 24, 2009 | April 1, 2009 | Ended | January 1, 2009 | Ended | ||||||||||||||||||
to June 30, 2009 | to April 23, 2009 | June 30, 2008 | to April 23, 2009 | June 30, 2008 | ||||||||||||||||||
Professional fees related to the new CBS arrangement | — | 206 | — | 3,162 | ||||||||||||||||||
Closing payment to CBS related to cancelling the previous CBS agreement | — | — | — | 5,000 | ||||||||||||||||||
Regionalization costs | 72 | 25 | — | 120 | — | |||||||||||||||||
Fees related to the Refinancing | 296 | 6,985 | 691 | 12,699 | 691 | |||||||||||||||||
$ | 368 | $ | 7,010 | $ | 897 | $ | 12,819 | $ | 8,853 | |||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
Successor Company | Predecessor Company | |||||||||||||||||||||
For the period | For the period | Three Months | For the period | Six Months | ||||||||||||||||||
April 24 to June 30 | April 1 to April 23 | Ended | January 1 to April 23 | Ended | ||||||||||||||||||
2009 | 2009 | June 30, 2008 | 2009 | June 30, 2008 | ||||||||||||||||||
Net Revenue | ||||||||||||||||||||||
Network | $ | 27,351 | $ | 12,812 | $ | 47,169 | $ | 63,996 | $ | 106,353 | ||||||||||||
Metro/Traffic | 30,693 | 12,796 | 53,203 | 47,479 | 100,645 | |||||||||||||||||
Total Net Revenue | $ | 58,044 | $ | 25,607 | $ | 100,372 | $ | 111,474 | $ | 206,998 | ||||||||||||
Segment Operating (Loss) Income | ||||||||||||||||||||||
Network | $ | 358 | $ | 647 | $ | 4,048 | $ | (3,818 | ) | $ | 12,121 | |||||||||||
Metro/Traffic | (2,622 | ) | 3,419 | 10,088 | (2,093 | ) | 13,423 | |||||||||||||||
Total Segment Operating (Loss) Income | $ | (2,264 | ) | $ | 4,066 | $ | 14,136 | $ | (5,911 | ) | $ | 25,544 | ||||||||||
Corporate Expenses | (60 | ) | (649 | ) | (2,795 | ) | (1,027 | ) | (9,248 | ) | ||||||||||||
Restructuring and Special Charges | (1,822 | ) | (7,546 | ) | (897 | ) | (16,795 | ) | (8,853 | ) | ||||||||||||
Goodwill Impairment | — | — | (206,053 | ) | — | (206,053 | ) | |||||||||||||||
Operating (Loss) Income | $ | (4,146 | ) | $ | (4,129 | ) | $ | (195,609 | ) | $ | (23,733 | ) | $ | (198,610 | ) | |||||||
Interest Expense (Income) | (4,692 | ) | 41 | (4,352 | ) | (3,222 | ) | (9,751 | ) | |||||||||||||
Other Income | 4 | 59 | 43 | 359 | 85 | |||||||||||||||||
(Loss) Income Before Income Taxes | $ | (8,834 | ) | $ | (4,029 | ) | $ | (199,918 | ) | $ | (26,596 | ) | $ | (208,276 | ) | |||||||
Depreciation and Amortization | ||||||||||||||||||||||
Network | $ | 1,483 | $ | 225 | $ | 834 | $ | 1,096 | $ | 1,590 | ||||||||||||
Metro/Traffic | 4,357 | 295 | 1,580 | 1,480 | 3,176 | |||||||||||||||||
Corporate | 5 | 1 | 7 | 9 | 1,631 | |||||||||||||||||
Total Depreciation and Amortization | $ | 5,845 | $ | 521 | $ | 2,421 | $ | 2,585 | $ | 6,397 | ||||||||||||
Capital Expenditures | ||||||||||||||||||||||
Network | $ | 993 | $ | 12 | $ | 2,109 | $ | 506 | $ | 5,474 | ||||||||||||
Metro/Traffic | 553 | 204 | 203 | 879 | 502 | |||||||||||||||||
Corporate | — | — | 133 | — | 132 | |||||||||||||||||
Total Capital Expenditures | $ | 1,546 | $ | 216 | $ | 2,445 | $ | 1,385 | $ | 6,109 | ||||||||||||
Successor Company | Predecessor Company | |||||||||
June 30, | December 31, | |||||||||
2009 | 2008 | |||||||||
Assets | ||||||||||
Network | $ | 121,998 | $ | 92,109 | ||||||
Metro/Traffic | 202,879 | 80,079 | ||||||||
Corporate | 22,179 | 32,900 | ||||||||
Total Assets (1) | $ | 347,056 | $ | 205,088 | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
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In connection with the Refinancing and the issuance of the Preferred Stock, we have determined that such Preferred Stock contain a beneficial conversion feature (“BCF”), that is partially contingent. The BCF is measured as the spread between the effective conversion price and the market price of common stock on the commitment date and then multiplying this spread by the number of conversion shares, as adjusted for the contingent shares. A portion of the BCF has been recognized at issuance (issuance BCF) while the majority of the BCF is contingent (contingent BCF) upon the authorization of additional common shares which did not occur until August 3, 2009.
The total BCF, which is limited to the carrying value of the preferred stock, is approximately $76,900, of which $10,900 relates to the issuance BCF and will be amortized using the effective yield method over the period until conversion (4 years) resulting in a reduction to income allocable to common shareholders of $400 for the period ending June 30, 2009 The contingent BCF which amounts to $66,000 (and was limited to the carrying amount of the Preferred Stock), will be recognized when the contingency is resolved in the third quarter (August 3, 2009) which due to the immediate conversion, will result in, among other effects, a deemed dividend that will be included in earnings per share calculation.
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Successor Company | Predecessor Company | Combined Total | ||||||||||||
For the three | ||||||||||||||
For the Period | For the Period | months ended | ||||||||||||
April 24, 2009 to June 30, 2009 | April 1, 2009 to April 23, 2009 | June 30,2009 | ||||||||||||
NET REVENUE | $ | 58,044 | $ | 25,607 | $ | 83,651 | ||||||||
Operating Costs | 52,116 | 20,187 | 72,303 | |||||||||||
Depreciation and Amortization | 5,845 | 521 | 6,366 | |||||||||||
Corporate General and Administrative Expenses | 2,407 | 1,482 | 3,889 | |||||||||||
Restructuring Charges | 1,454 | 536 | 1,990 | |||||||||||
Special Charges | 368 | 7,010 | 7,378 | |||||||||||
62,190 | 29,736 | 91,926 | ||||||||||||
OPERATING (LOSS) | (4,146 | ) | (4,129 | ) | (8,275 | ) | ||||||||
Interest Expense (Income) | 4,692 | (41 | ) | 4,651 | ||||||||||
Other Income | (4 | ) | (59 | ) | (63 | ) | ||||||||
(LOSS) BEFORE INCOME TAX | (8,834 | ) | (4,029 | ) | (12,863 | ) | ||||||||
INCOME TAX (BENEFIT) | (2,650 | ) | (254 | ) | (2,904 | ) | ||||||||
NET (LOSS) | $ | (6,184 | ) | $ | (3,775 | ) | $ | (9,959 | ) | |||||
Successor Company | Predecessor Company | Combined Total | ||||||||||||
For the six | ||||||||||||||
For the Period | For the Period | months ended | ||||||||||||
April 24, 2009 to June 30, 2009 | January 1, 2009 to April 23, 2009 | June 30,2009 | ||||||||||||
NET REVENUE | $ | 58,044 | $ | 111,474 | $ | 169,518 | ||||||||
Operating Costs | 52,116 | 111,580 | 163,696 | |||||||||||
Depreciation and Amortization | 5,845 | 2,585 | 8,430 | |||||||||||
Corporate General and Administrative Expenses | 2,407 | 4,248 | 6,655 | |||||||||||
Restructuring Charges | 1,454 | 3,976 | 5,430 | |||||||||||
Special Charges | 368 | 12,819 | 13,187 | |||||||||||
62,190 | 135,208 | 197,398 | ||||||||||||
OPERATING (LOSS) | (4,146 | ) | (23,734 | ) | (27,880 | ) | ||||||||
Interest Expense (Income) | 4,692 | 3,222 | 7,914 | |||||||||||
Other Income | (4 | ) | (359 | ) | (363 | ) | ||||||||
(LOSS) BEFORE INCOME TAX | (8,834 | ) | (26,596 | ) | (35,430 | ) | ||||||||
INCOME TAX (BENEFIT) | (2,650 | ) | (7,635 | ) | (10,285 | ) | ||||||||
NET (LOSS) | $ | (6,184 | ) | $ | (18,961 | ) | $ | (25,145 | ) | |||||
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Three Months ended | ||||||||||||||||
June 30, 2009 | June 30, 2008 | |||||||||||||||
$ | % of Total | $ | % of Total | |||||||||||||
Metro | 43,487 | 52 | % | 53,203 | 53 | % | ||||||||||
Network | 40,164 | 48 | % | 47,169 | 47 | % | ||||||||||
Total (1) | $ | 83,651 | 100 | % | $ | 100,372 | 100 | % | ||||||||
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Three Months ended | ||||||||||||||||
June 30, 2009 | June 30, 2008 | |||||||||||||||
$ | % of Total | $ | % of Total | |||||||||||||
Payroll and payroll related | 20,392 | 28 | % | 25,522 | 30 | % | ||||||||||
Programming and production | 14,394 | 20 | % | 18,489 | 22 | % | ||||||||||
Program and operating | 6,715 | 9 | % | 4,116 | 5 | % | ||||||||||
Station compensation | 18,334 | 25 | % | 20,748 | 24 | % | ||||||||||
Other operating expenses | 12,468 | 18 | % | 16,536 | 19 | % | ||||||||||
$ | 72,303 | 100 | % | $ | 85,411 | 100 | % | |||||||||
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35
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Six Months ended | ||||||||||||||||
June 30, 2009 | June 30, 2008 | |||||||||||||||
$ | % of Total | $ | % of Total | |||||||||||||
Metro | 78,171 | 46 | % | 100,645 | 49 | % | ||||||||||
Network | 91,347 | 54 | % | 106,353 | 51 | % | ||||||||||
Total (1) | $ | 169,518 | 100 | % | $ | 206,998 | 100 | % | ||||||||
Six Months ended | ||||||||||||||||
June 30, 2009 | June 30, 2008 | |||||||||||||||
$ | % of Total | $ | % of Total | |||||||||||||
Payroll and payroll related | 42,503 | 26 | % | 51,767 | 29 | % | ||||||||||
Programming and production | 43,199 | 26 | % | 47,154 | 26 | % | ||||||||||
Program and operating | 11,285 | 7 | % | 8,283 | 5 | % | ||||||||||
Station compensation | 38,103 | 23 | % | 39,886 | 22 | % | ||||||||||
Other operating expenses | 28,606 | 18 | % | 32,550 | 18 | % | ||||||||||
$ | 163,696 | 100 | % | $ | 179,640 | 100 | % | |||||||||
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• | restrictions on our ability to incur debt, incur liens, make investments, make capital expenditures, consummate acquisitions, pay dividends, sell assets and enter into mergers and similar transactions; and |
• | a maximum senior leverage ratio (expressed as the principal amount of New Senior Notes over our consolidated EBITDA (as defined in our New Senior Credit Facility) measured on a trailing, four-quarter basis) which is 6.25 to 1.0 on December 31, 2009 but begins to decline on a quarterly basis thereafter, including to a 4.5 to 1.0 ratio on December 31, 2010 and a 3.5 to 1.0 ratio on December 31, 2011. |
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• | difficulties in integrating and managing the operations, technologies and products of the companies we acquire; | ||
• | diversion of our management’s attention from normal daily operations of our business; | ||
• | our inability to maintain the key business relationships and reputations of the businesses we acquire; | ||
• | uncertainty of entry into markets in which we have limited or no prior experience or in which competitors have stronger market positions; | ||
• | our dependence on unfamiliar affiliates and partners of the companies we acquire; | ||
• | insufficient revenue to offset our increased expenses associated with the acquisitions; | ||
• | our responsibility for the liabilities of the businesses we acquire; and | ||
• | potential loss of key employees of the companies we acquire. |
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• | delaying, deferring or preventing a change in control; | ||
• | impeding a merger, consolidation, takeover or other business combination; | ||
• | discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control; or | ||
• | causing us to enter into transactions or agreements that are not in the best interests of all stockholders. |
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Approximate Dollar | ||||||||||||||||
Total Number of | Value of Shares that | |||||||||||||||
Total | Shares Purchased as | May Yet Be | ||||||||||||||
Number of Shares | Part of Publicly | Purchased Under | ||||||||||||||
Purchased in | Average Price Paid | Announced Plan or | the Plans or | |||||||||||||
Period | Period | Per Share | Program | Programs (A) | ||||||||||||
4/1/09 – 4/30/09 | — | N/A | ||||||||||||||
5/1/09 – 5/31/09 | — | N/A | ||||||||||||||
6/1/09 – 6/30/09 | — | N/A |
(A) | Represents remaining authorization from the $250 million repurchase authorization approved on February 24, 2004 and the additional $300 million authorization approved on April 29, 2004. |
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Exhibit | ||||
Number (A) | Description of Exhibit | |||
3.1 | Restated Certificate of Incorporation, as filed with the Secretary of the State of Delaware. (1) | |||
3.1.1 | * | Certificate of Amendment to the Restated Certificate of Incorporation of Westwood One, Inc., as filed with the Secretary of the State of Delaware on August 3, 2009. | ||
3.2 | Amended and Restated Bylaws of Registrant adopted on April 23, 2009 and currently in effect. (2) | |||
4.1 | Note Purchase Agreement, dated as of December 3, 2002, between the Company and the Purchasers parties thereto. (3) | |||
4.1.1 | First Amendment, dated as of February 28, 2008, to Note Purchase Agreement, dated as of December 3, 2002, by and between Registrant and the noteholders parties thereto. (4) | |||
4.2 | Securities Purchase Agreement, dated as of April 23, 2009, by and among Westwood One, Inc. and the other parties thereto. (2) | |||
4.3 | Certificate of Designations for the 7.50% Series A-1 Convertible Preferred Stock as filed with the Secretary of State of the State of Delaware on April 23, 2009. (2) | |||
4.4 | Certificate of Designations for the 8.0% Series B Convertible Preferred Stock as filed with the Secretary of State of the State of Delaware on April 23, 2009. (2) | |||
4.5 | First Amendment to Security Agreement, dated as of April 23, 2009, by and among Westwood One, Inc., each of the subsidiaries of Westwood One, Inc. and The Bank of New York Mellon, as collateral trustee. (2) | |||
10.1 | * | Option Agreement, dated as of December 22, 2008, by and between Registrant and by and among Westwood One, Inc., TLAC, Inc., TrafficLand, Inc. and P. Richard Zitelman, in his capacity as Stockholder Representative, as amended. | ||
10.2 | Consulting Agreement made as of April 27, 2009, by and between Registrant and AndrewHersam. + | |||
31.a | * | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.b | * | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32.a | ** | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
32.b | ** | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
* | Filed herewith. | |
** | Furnished herewith. | |
+ | Indicates a management contract or compensatory plan. |
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(A) | The Company agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request. | |
(1) | Filed as an exhibit to Company’s quarterly report on Form 10-Q for the year ended June 30, 2008 and incorporated herein by reference. | |
(2) | Filed as an exhibit to Company’s current report on Form 8-K dated April 27, 2009 and incorporated herein by reference. | |
(3) | Filed as an exhibit to Company’s current report on Form 8-K dated December 4, 2002 and incorporated herein by reference. | |
(4) | Filed as an exhibit to Registrant’s current report on Form 8-K dated February 28, 2008 and incorporated herein by reference. |
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WESTWOOD ONE, INC. | ||||
By: | /s/ Roderick M. Sherwood III | |||
Name: | Roderick M. Sherwood III | |||
Title: | President and CFO | |||
Date: August 21, 2009 |
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Exhibit | ||||
Number (A) | Description of Exhibit | |||
31.a | * | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.b | * | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
* | Filed herewith. | |
** | Furnished herewith. | |
+ | Indicates a management contract or compensatory plan. |
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