Table of Contents
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 | 95-3980449 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
1166 Avenue of the Americas, 10th Floor New York, NY | 10036 | |
(Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Large Accelerated Filero | Accelerated Filero | Non-Accelerated Filero | Smaller Reporting Companyþ |
Page No. | ||||||||
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44 | ||||||||
44 | ||||||||
44 | ||||||||
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45 | ||||||||
46 | ||||||||
47 | ||||||||
Exhibit 4.1 | ||||||||
Exhibit 10.1 | ||||||||
Exhibit 10.2 | ||||||||
Exhibit 31.A | ||||||||
Exhibit 31.B | ||||||||
Exhibit 32.A | ||||||||
Exhibit 32.B |
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(In thousands, except per share amounts)
June 30, 2010 | December 31, 2009 | |||||||
(unaudited) | (audited) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,394 | $ | 4,824 | ||||
Accounts receivable, net of allowance for doubtful accounts of $598 (2010) and $2,723 (2009) | 87,012 | 87,568 | ||||||
Federal income tax receivable | — | 12,355 | ||||||
Prepaid and other assets | 17,004 | 20,994 | ||||||
Total current assets | 108,410 | 125,741 | ||||||
Property and equipment, net | 36,481 | 36,265 | ||||||
Intangible assets, net | 97,943 | 103,400 | ||||||
Goodwill | 38,945 | 38,917 | ||||||
Other assets | 3,042 | 2,995 | ||||||
TOTAL ASSETS | $ | 284,821 | $ | 307,318 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 43,237 | $ | 40,164 | ||||
Amounts payable to related parties | 900 | 129 | ||||||
Deferred revenue | 2,511 | 3,682 | ||||||
Accrued expenses and other liabilities | 27,070 | 28,864 | ||||||
Current maturity of long-term debt | — | 13,500 | ||||||
Total current liabilities | 73,718 | 86,339 | ||||||
Long-term debt | 131,390 | 122,262 | ||||||
Deferred tax liability | 43,490 | 50,932 | ||||||
Due to Gores | 10,019 | 11,165 | ||||||
Other liabilities | 19,560 | 18,636 | ||||||
TOTAL LIABILITIES | 278,177 | 289,334 | ||||||
Commitments and Contingencies | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Common stock, $.01 par value: authorized: 5,000,000 shares issued and outstanding: 20,544 (2010) and 20,544 (2009) | 205 | 205 | ||||||
Class B stock, $.01 par value: authorized: 3,000 shares; issued and outstanding: 0 | — | — | ||||||
Additional paid-in capital | 81,970 | 81,268 | ||||||
Net unrealized gain | 210 | 111 | ||||||
Accumulated deficit | (75,741 | ) | (63,600 | ) | ||||
TOTAL STOCKHOLDERS’ EQUITY | 6,644 | 17,984 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 284,821 | $ | 307,318 | ||||
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(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||||||||||||||
For the Three | For the Six | For the Period | For the Period | For the Period | |||||||||||||||||
Months Ended | Months Ended | April 24 to | April 1 to | January 1 to | |||||||||||||||||
June 30, 2010 | June 30, 2010 | June 30, 2009 | April 23, 2009 | April 23, 2009 | |||||||||||||||||
Revenue | $ | 83,444 | $ | 176,286 | $ | 58,044 | $ | 25,607 | $ | 111,474 | |||||||||||
Operating costs | 76,708 | 165,156 | 52,210 | 20,402 | 111,309 | ||||||||||||||||
Depreciation and amortization | 4,689 | 9,185 | 5,845 | 521 | 2,584 | ||||||||||||||||
Corporate general and administrative expenses | 2,916 | 6,828 | 2,313 | 1,267 | 4,519 | ||||||||||||||||
Restructuring charges | 1,118 | 1,861 | 1,454 | 536 | 3,976 | ||||||||||||||||
Special charges | 976 | 2,799 | 368 | 7,010 | 12,819 | ||||||||||||||||
Total expenses | 86,407 | 185,829 | 62,190 | 29,736 | 135,207 | ||||||||||||||||
Operating loss | (2,963 | ) | (9,543 | ) | (4,146 | ) | (4,129 | ) | (23,733 | ) | |||||||||||
Interest expense | 5,993 | 11,369 | 4,692 | (41 | ) | 3,222 | |||||||||||||||
Other expense (income) | (3 | ) | (2 | ) | (4 | ) | (59 | ) | (359 | ) | |||||||||||
Loss before income tax | (8,953 | ) | (20,910 | ) | (8,834 | ) | (4,029 | ) | (26,596 | ) | |||||||||||
Income tax benefit | (3,535 | ) | (8,769 | ) | (2,650 | ) | (254 | ) | (7,635 | ) | |||||||||||
Net loss | $ | (5,418 | ) | $ | (12,141 | ) | $ | (6,184 | ) | $ | (3,775 | ) | $ | (18,961 | ) | ||||||
Net loss attributable to common stockholders | $ | (5,418 | ) | $ | (12,141 | ) | $ | (9,595 | ) | $ | (5,387 | ) | $ | (22,037 | ) | ||||||
Loss per share: | |||||||||||||||||||||
Common Stock | |||||||||||||||||||||
Basic | $ | (0.26 | ) | $ | (0.59 | ) | $ | (18.85 | ) | $ | (10.67 | ) | $ | (43.64 | ) | ||||||
Diluted | $ | (0.26 | ) | $ | (0.59 | ) | $ | (18.85 | ) | $ | (10.67 | ) | $ | (43.64 | ) | ||||||
Class B stock | |||||||||||||||||||||
Basic | $ | — | $ | — | $ | — | |||||||||||||||
Diluted | $ | — | $ | — | $ | — | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||
Common Stock | |||||||||||||||||||||
Basic | 20,544 | 20,544 | 509 | 505 | 505 | ||||||||||||||||
Diluted | 20,544 | 20,544 | 509 | 505 | 505 | ||||||||||||||||
Class B stock | |||||||||||||||||||||
Basic | 1 | 1 | 1 | ||||||||||||||||||
Diluted | 1 | 1 | 1 |
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(In thousands)
Successor Company | Predecessor Company | ||||||||||||
For the Six | For the Period | For the Period | |||||||||||
Months Ended | April 24 to | January 1 to | |||||||||||
June 30, 2010 | June 30, 2009 | April 23, 2009 | |||||||||||
Cash Flows from Operating Activities: | |||||||||||||
Net loss | $ | (12,141 | ) | $ | (6,184 | ) | $ | (18,961 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||
Depreciation and amortization | 9,185 | 5,845 | 2,584 | ||||||||||
Loss on disposal of property and equipment | — | 76 | 188 | ||||||||||
Deferred taxes | (8,622 | ) | 2,162 | (6,873 | ) | ||||||||
Non-cash equity-based compensation | 1,881 | 852 | 2,110 | ||||||||||
Amortization of deferred financing costs | — | — | 331 | ||||||||||
Federal tax refund | 12,940 | — | — | ||||||||||
Net change in other assets and liabilities | 9,979 | (17,078 | ) | 19,844 | |||||||||
Net cash provided by (used in) operating activities | 13,222 | (14,327 | ) | (777 | ) | ||||||||
Cash Flows from Investing Activities: | |||||||||||||
Capital expenditures | (4,540 | ) | (1,546 | ) | (1,384 | ) | |||||||
Net cash used in investing activities | (4,540 | ) | (1,546 | ) | (1,384 | ) | |||||||
Cash Flows from Financing Activities: | |||||||||||||
Proceeds from Revolving Credit Facility | 7,000 | — | — | ||||||||||
Repayments of Senior Notes | (15,500 | ) | — | — | |||||||||
Payments of capital lease obligations | (612 | ) | (152 | ) | (271 | ) | |||||||
Proceeds from term loan | — | 20,000 | — | ||||||||||
Debt repayments | — | (25,000 | ) | — | |||||||||
Issuance of Series B Convertible Preferred Stock | — | 25,000 | — | ||||||||||
Net cash (used in) provided by financing activities | (9,112 | ) | 19,848 | (271 | ) | ||||||||
Net increase in cash and cash equivalents | (430 | ) | 3,975 | (2,432 | ) | ||||||||
Cash and cash equivalents,beginning of period | 4,824 | 4,005 | 6,437 | ||||||||||
Cash and cash equivalents, end of period | $ | 4,394 | $ | 7,980 | $ | 4,005 | |||||||
Supplemental Schedule of Cash Flow Information: | |||||||||||||
Non-cash financing activities | |||||||||||||
Cancellation of long-term debt | — | — | 252,060 | ||||||||||
Issuance of new long-term debt | — | 117,500 | — |
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(In thousands)
Unrealized | Total | |||||||||||||||||||||||
Additional | Gain on | Stock- | ||||||||||||||||||||||
Common Stock | Paid-in | (Accumulated | Available for | holders’ | ||||||||||||||||||||
Shares | Amount | Capital | Deficit) | Sale Securities | Equity | |||||||||||||||||||
Balance as of January 1, 2010 | 20,544 | $ | 205 | $ | 81,268 | $ | (63,600 | ) | $ | 111 | $ | 17,984 | ||||||||||||
Net loss | — | — | — | (12,141 | ) | — | (12,141 | ) | ||||||||||||||||
Other comprehensive income | — | — | — | — | 99 | 99 | ||||||||||||||||||
Equity-based compensation | — | — | 1,881 | — | — | 1,881 | ||||||||||||||||||
Issuance of common stock under equity-based compensation plans | — | — | (449 | ) | — | — | (449 | ) | ||||||||||||||||
Cancellations of vested equity grants | — | — | (730 | ) | — | — | (730 | ) | ||||||||||||||||
Balance as of June 30, 2010 | 20,544 | $ | 205 | $ | 81,970 | $ | (75,741 | ) | $ | 210 | $ | 6,644 | ||||||||||||
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(in thousands, except per share data)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
Current assets | $ | 104,641 | ||
Goodwill | 86,414 | |||
Intangibles | 116,910 | |||
Property and equipment | 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 | Six Months Ended | |||||||
June 30, 2009 | June 30, 2009 | |||||||
Revenue | $ | 83,651 | $ | 169,518 | ||||
Net loss | (11,414 | ) | (34,303 | ) |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
Successor Company | Predecessor Company | ||||||||||||||||||||
For the Three | For the Six | For the Period | For the Period | For the Period | |||||||||||||||||
Months Ended | Months Ended | April 24 to | April 1 to | January 1 to | |||||||||||||||||
June 30, 2010 | June 30, 2010 | June 30, 2009 | April 23, 2009 | April 23, 2009 | |||||||||||||||||
Net loss | $ | (5,418 | ) | $ | (12,141 | ) | $ | (6,184 | ) | $ | (3,775 | ) | $ | (18,961 | ) | ||||||
Less: Accumulated Preferred Stock dividends | — | — | (3,411 | ) | (1,612 | ) | (3,076 | ) | |||||||||||||
Undistributed (losses) earnings | $ | (5,418 | ) | $ | (12,141 | ) | $ | (9,595 | ) | $ | (5,387 | ) | $ | (22,037 | ) | ||||||
Earnings — Common stock | |||||||||||||||||||||
Basic | |||||||||||||||||||||
Undistributed (losses) allocated to Common stockholders | $ | (5,418 | ) | $ | (12,141 | ) | $ | (9,595 | ) | $ | (5,387 | ) | $ | (22,037 | ) | ||||||
Total (losses) earnings — Common stock, basic | $ | (5,418 | ) | $ | (12,141 | ) | $ | (9,595 | ) | $ | (5,387 | ) | $ | (22,037 | ) | ||||||
Diluted | |||||||||||||||||||||
Undistributed (losses) allocated to Common stockholders | $ | (5,418 | ) | $ | (12,141 | ) | $ | (9,595 | ) | $ | (5,387 | ) | $ | (22,037 | ) | ||||||
Total (losses) earnings — Common stock, diluted | $ | (5,418 | ) | $ | (12,141 | ) | $ | (9,595 | ) | $ | (5,387 | ) | $ | (22,037 | ) | ||||||
Weighted average Common shares outstanding, basic | 20,544 | 20,544 | 509 | 505 | 505 | ||||||||||||||||
Weighted average Common shares outstanding, diluted | 20,544 | 20,544 | 509 | 505 | 505 | ||||||||||||||||
Loss per Common share, basic | |||||||||||||||||||||
Distributed earnings, basic | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Undistributed (losses) earnings — basic | (0.26 | ) | (0.59 | ) | (18.85 | ) | (10.67 | ) | (43.64 | ) | |||||||||||
Total | $ | (0.26 | ) | $ | (0.59 | ) | $ | (18.85 | ) | $ | (10.67 | ) | $ | (43.64 | ) | ||||||
Loss per Common share, diluted | |||||||||||||||||||||
Distributed earnings, diluted | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Undistributed (losses) earnings — diluted | (0.26 | ) | (0.59 | ) | (18.85 | ) | (10.67 | ) | (43.64 | ) | |||||||||||
Total | $ | (0.26 | ) | $ | (0.59 | ) | $ | (18.85 | ) | $ | (10.67 | ) | $ | (43.64 | ) | ||||||
Loss per share — Class B Stock | |||||||||||||||||||||
Basic | |||||||||||||||||||||
Distributed earnings to Class B stockholders | $ | — | $ | — | $ | — | |||||||||||||||
Undistributed (losses) allocated to Class B stockholders | — | — | — | ||||||||||||||||||
Total loss — Class B Stock, basic | $ | — | $ | — | $ | — | |||||||||||||||
Diluted | |||||||||||||||||||||
Distributed earnings to Class B stockholders | $ | — | $ | — | $ | — | |||||||||||||||
Undistributed (losses) allocated to Class B stockholders | — | — | — | ||||||||||||||||||
Total loss — Class B Stock, diluted | $ | — | $ | — | $ | — | |||||||||||||||
Weighted average Class B shares outstanding, basic | 1 | 1 | 1 | ||||||||||||||||||
Share-based compensation | — | — | — | ||||||||||||||||||
Warrants | — | — | — | ||||||||||||||||||
Weighted average Class B shares outstanding, diluted | 1 | 1 | 1 | ||||||||||||||||||
Earnings per Class B share, basic | |||||||||||||||||||||
Distributed earnings, basic | $ | — | $ | — | $ | — | |||||||||||||||
Undistributed (losses) — basic | — | — | — | ||||||||||||||||||
Total | $ | — | $ | — | $ | — | |||||||||||||||
Earnings per Class B share, diluted | |||||||||||||||||||||
Distributed earnings, diluted | $ | — | $ | — | $ | — | |||||||||||||||
Undistributed (losses) — diluted | — | — | — | ||||||||||||||||||
Total | $ | — | $ | — | $ | — | |||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
Successor Company | Predecessor Company | ||||||||||||||||||||
For the Three | For the Six | For the Period | For the Period | For the Period | |||||||||||||||||
Months Ended | Months Ended | April 24 to | April 1 to | January 1 to | |||||||||||||||||
June 30, 2010 | June 30, 2010 | June 30, 2009 | April 23, 2009 | April 23, 2009 | |||||||||||||||||
Glendon Partners fees(1) | $ | 129 | $ | 441 | $ | 296 | $ | 104 | $ | 754 | |||||||||||
Reimbursement of legal fees | — | 8 | — | 470 | 1,533 | ||||||||||||||||
Reimbursement ofletter-of-credit fees(2) | 63 | 126 | — | — | — | ||||||||||||||||
Gores Radio Holdings, LLC | — | — | — | 230 | 230 | ||||||||||||||||
Interest on loan | 400 | 819 | 303 | — | — | ||||||||||||||||
$ | 592 | $ | 1,394 | $ | 599 | $ | 804 | $ | 2,517 | ||||||||||||
(1) | These fees consist of payments for professional services rendered by various members of Glendon to us in the areas of operational improvement, tax, finance, accounting, legal and insurance/risk management. | |
(2) | Reimbursement of a standby letter-of-credit fee incurred and paid by Gores in connection with its guarantee of the $15,000 revolving credit facility with Wells Fargo. |
Successor Company | Predecessor Company | ||||||||||||||||||||
For the Three | For the Six | For the Period | For the Period | For the Period | |||||||||||||||||
Months Ended | Months Ended | April 24 to | April 1 to | January 1 to | |||||||||||||||||
June 30, 2010 | June 30, 2010 | June 30, 2009 | April 23, 2009 | April 23, 2009 | |||||||||||||||||
Program commission expense | $ | 366 | $ | 727 | $ | 248 | $ | 85 | $ | 416 | |||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
Successor Company | Predecessor Company | ||||||||||||
For the Period | For the Period | For the Period | |||||||||||
April 24 to | April 1 to | January 1 to | |||||||||||
June 30, 2009 | April 23, 2009 | April 23, 2009 | |||||||||||
Programming and affiliate arrangements | $ | 9,689 | $ | 4,112 | $ | 20,884 | |||||||
News agreement | 2,502 | 859 | 4,107 | ||||||||||
$ | 12,191 | $ | 4,971 | $ | 24,991 | ||||||||
Successor Company | Predecessor Company | ||||||||||||||||||||
For the Three | For the Six | For the Period | For the Period | For the Period | |||||||||||||||||
Months Ended | Months Ended | April 24 to | April 1 to | January 1 to | |||||||||||||||||
June 30, 2010 | June 30, 2010 | June 30, 2009 | April 23, 2009 | April 23, 2009 | |||||||||||||||||
Operating costs | $ | 366 | $ | 727 | $ | 12,439 | $ | 5,056 | $ | 25,407 | |||||||||||
Special charges | 192 | 575 | 296 | 804 | 2,517 | ||||||||||||||||
Interest expense | 400 | 819 | 303 | — | — | ||||||||||||||||
$ | 958 | $ | 2,121 | $ | 13,038 | $ | 5,860 | $ | 27,924 | ||||||||||||
June 30, 2010 | December 31, 2009 | |||||||
Land, buildings and improvements | $ | 11,400 | $ | 10,830 | ||||
Recording, broadcasting and studio equipment | 23,076 | 20,581 | ||||||
Furniture, equipment and other | 13,161 | 11,592 | ||||||
47,637 | 43,003 | |||||||
Less: Accumulated depreciation and amortization | 11,156 | 6,738 | ||||||
Property and equipment, net | $ | 36,481 | $ | 36,265 | ||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
As of June 30, 2010 | As of December 31, 2009 | |||||||||||||||||||||||||
Gross | Net | Gross | Net | |||||||||||||||||||||||
Estimated | Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | ||||||||||||||||||||
Life | Value | Amortization | Value | Value | Amortization | Value | ||||||||||||||||||||
Trademarks | Indefinite | $ | 20,800 | $ | — | $ | 20,800 | $ | 20,800 | $ | — | $ | 20,800 | |||||||||||||
Affiliate relationships | 10 years | 72,100 | (8,558 | ) | 63,542 | 72,100 | (4,953 | ) | 67,147 | |||||||||||||||||
Software and technology | 5 years | 7,896 | (1,682 | ) | 6,214 | 7,896 | (890 | ) | 7,006 | |||||||||||||||||
Client contracts | 5 years | 8,930 | (2,353 | ) | 6,577 | 8,930 | (1,363 | ) | 7,567 | |||||||||||||||||
Leases | 7 years | 980 | (170 | ) | 810 | 980 | (100 | ) | 880 | |||||||||||||||||
Insertion orders | 9 months | — | — | — | 8,400 | (8,400 | ) | — | ||||||||||||||||||
$ | 110,706 | $ | (12,763 | ) | $ | 97,943 | $ | 119,106 | $ | (15,706 | ) | $ | 103,400 | |||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
Total | Metro Traffic | Network | ||||||||||
Balance January 1, 2010 | $ | 38,917 | $ | 13,005 | $ | 25,912 | ||||||
Adjustments to opening balance | 28 | 144 | (116 | ) | ||||||||
Balance at June 30, 2010 | $ | 38,945 | $ | 13,149 | $ | 25,796 | ||||||
Total | Metro Traffic | Network | ||||||||||
Goodwill at April 24, 2009 | $ | 89,346 | $ | 63,550 | $ | 25,796 | ||||||
Accumulated impairment losses from April 24, 2009 to June 30, 2010 | (50,401 | ) | (50,401 | ) | — | |||||||
Balance at June 30, 2010 | $ | 38,945 | $ | 13,149 | $ | 25,796 | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
June 30, 2010 | December 31, 2009 | |||||||
Senior Secured Notes due July 15, 2012(1) | $ | 99,390 | $ | 110,762 | ||||
Due to Gores(1) | 10,019 | 11,165 | ||||||
Term Loan(2) | 20,000 | 20,000 | ||||||
Revolving Credit Facility(2) | 12,000 | 5,000 | ||||||
$ | 141,409 | $ | 146,927 | |||||
(1) | The applicable interest rate on such debt is 15.0%, which includes 5.0% PIK interest which accrues and is added to principal on a quarterly basis. For the six months ended June 30, 2010, interest expense on the debt to Due to Gores was $819. The Due to Gores debt was reduced by its pro-rata share of the $15,500 payments made by us to pay down the Senior Notes that are described in more detail above. PIK interest is not due until maturity. | |
(2) | The applicable interest rate on such debt was 7.0% as of June 30, 2010 and December 31, 2009. The interest rate is variable and is payable at the greater of (i) LIBOR plus 4.5% (with a LIBOR floor of 2.5%) or (ii) the base rate plus 4.5% (with a base rate floor equal to the greater of 3.75% or the one-month LIBOR rate), at our option. |
June 30, 2010 | December 31, 2009 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
Borrowings (short and long term) | $ | 129,409 | $ | 134,768 | $ | 141,927 | $ | 148,425 |
• | 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 data)
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Quoted Prices in Active | Significant Other | Significant | ||||||||||||||||||||||
Markets for Identical Assets | Observable Inputs | Unobservable Inputs | ||||||||||||||||||||||
June 30, 2010 | December 31, 2009 | June 30, 2010 | December 31, 2009 | June 30, 2010 | December 31, 2009 | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments(1) | $ | 1,129 | $ | 968 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
$ | 1,129 | $ | 968 | $ | — | $ | — | $ | — | $ | — | |||||||||||||
(1) | Included in other assets |
Weighted | ||||||||
Average | ||||||||
Shares | Exercise Price | |||||||
Outstanding January 1, 2010 | 28.6 | $ | 1,345 | |||||
Granted | 1,998.0 | $ | 6 | |||||
Exercised | — | $ | — | |||||
Cancelled, forfeited or expired | (5.1 | ) | $ | 598 | ||||
Outstanding June 30, 2010 | 2,021.5 | $ | 23 | |||||
Options exercisable June 30, 2010 | 17.0 | $ | 1,950 | |||||
Aggregate estimated fair value of options vesting during the six months ended June 30, 2010 | $ | 937 | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
Risk-free interest rate | 2.35 | % | ||
Expected term (years) | 5.0 | |||
Expected volatility | 98.6 | % | ||
Expected dividend yield | 0.00 | % | ||
Weighted average fair value of options granted | $ | 4.47 |
Weighted Average | ||||||||
Shares | Grant Date Fair Value | |||||||
Outstanding January 1, 2010 | 0.8 | $ | 1,504 | |||||
Granted | — | — | ||||||
Converted to common stock | (0.8 | ) | $ | 1,504 | ||||
Forfeited | — | — | ||||||
Outstanding June 30, 2010 | — | — | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
Weighted Average Grant | ||||||||
Shares | Date Fair Value | |||||||
Outstanding January 1, 2010 | 0.1 | $ | 1,314 | |||||
Granted | — | — | ||||||
Converted to common stock | — | — | ||||||
Forfeited | — | — | ||||||
Outstanding June 30, 2010 | 0.1 | $ | 1,314 | |||||
Successor Company | Predecessor Company | ||||||||||||||||||||
For the Three | For the Six | For the Period | For the Period | For the Period | |||||||||||||||||
Months Ended | Months Ended | April 24 to | April 1 to | January 1 to | |||||||||||||||||
June 30, 2010 | June 30, 2010 | June 30, 2009 | April 23, 2009 | April 23, 2009 | |||||||||||||||||
Net loss | $ | (5,418 | ) | $ | (12,141 | ) | $ | (6,184 | ) | $ | (3,775 | ) | $ | (18,961 | ) | ||||||
Unrealized gain (loss) on marketable securities, net of income taxes | 13 | 99 | (95 | ) | 85 | 219 | |||||||||||||||
Comprehensive loss | $ | (5,405 | ) | $ | (12,042 | ) | $ | (6,279 | ) | $ | (3,690 | ) | $ | (18,742 | ) | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
Balance | Changes in | Utilization | Balance | |||||||||||||||||||||
January 1, 2010 | Additions | Estimates | Cash | Non-Cash | June 30, 2010 | |||||||||||||||||||
Metro-Traffic | ||||||||||||||||||||||||
Severance | $ | 1,537 | $ | 142 | $ | — | $ | (1,285 | ) | $ | — | $ | 394 | |||||||||||
Facilities Consolidation | 3,677 | 352 | 620 | (786 | ) | — | 3,863 | |||||||||||||||||
Contract Terminations | 1,750 | 97 | — | (1,820 | ) | — | 27 | |||||||||||||||||
Total | 6,964 | 591 | 620 | (3,891 | ) | — | 4,284 | |||||||||||||||||
2010 Program | ||||||||||||||||||||||||
Severance | — | 650 | — | (453 | ) | — | 197 | |||||||||||||||||
Total | — | 650 | — | (453 | ) | — | 197 | |||||||||||||||||
Total Restructuring | $ | 6,964 | $ | 1,241 | $ | 620 | $ | (4,344 | ) | $ | — | $ | 4,481 | |||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
Successor Company | Predecessor Company | ||||||||||||||||||||
For the Three | For the Six | For the Period | For the Period | For the Period | |||||||||||||||||
Months Ended | Months Ended | April 24 to | April 1 to | January 1 to | |||||||||||||||||
June 30, 2010 | June 30, 2010 | June 30, 2009 | April 23, 2009 | April 23, 2009 | |||||||||||||||||
Debt Agreement costs | $ | 236 | $ | 815 | $ | — | $ | — | $ | — | |||||||||||
Employment claim settlements | 10 | 493 | — | — | — | ||||||||||||||||
Gores fees | 129 | 449 | — | — | — | ||||||||||||||||
Fees related to the Refinancing | 48 | 162 | 296 | 6,985 | 12,699 | ||||||||||||||||
Corporate development costs | 408 | 609 | — | — | — | ||||||||||||||||
Regionalization costs | 145 | 271 | 72 | 25 | 120 | ||||||||||||||||
$ | 976 | $ | 2,799 | $ | 368 | $ | 7,010 | $ | 12,819 | ||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
Successor Company | Predecessor Company | ||||||||||||||||||||
For the Three | For the Six | For the Period | For the Period | For the Period | |||||||||||||||||
Months Ended | Months Ended | April 24 to | April 1 to | January 1 to | |||||||||||||||||
June 30, 2010 | June 30, 2010 | June 30, 2009 | April 23, 2009 | April 23, 2009 | |||||||||||||||||
Revenue | |||||||||||||||||||||
Metro Traffic | $ | 43,408 | $ | 80,675 | $ | 30,693 | $ | 12,796 | $ | 47,479 | |||||||||||
Network Radio | 40,036 | 95,611 | 27,351 | 12,811 | 63,995 | ||||||||||||||||
$ | 83,444 | $ | 176,286 | $ | 58,044 | $ | 25,607 | $ | 111,474 | ||||||||||||
Segment OIBDA | |||||||||||||||||||||
Metro Traffic(1) | $ | 2,737 | $ | 1,171 | $ | 1,734 | $ | 3,714 | $ | (613 | ) | ||||||||||
Network Radio(1) | 3,014 | 7,990 | 3,300 | 1,311 | (573 | ) | |||||||||||||||
Corporate expenses | (1,931 | ) | (4,859 | ) | (1,513 | ) | (1,087 | ) | (3,168 | ) | |||||||||||
Restructuring and special charges | (2,094 | ) | (4,660 | ) | (1,822 | ) | (7,546 | ) | (16,795 | ) | |||||||||||
OIBDA | 1,726 | (358 | ) | 1,699 | (3,608 | ) | (21,149 | ) | |||||||||||||
Depreciation and amortization | (4,689 | ) | (9,185 | ) | (5,845 | ) | (521 | ) | (2,584 | ) | |||||||||||
Operating loss | (2,963 | ) | (9,543 | ) | (4,146 | ) | (4,129 | ) | (23,733 | ) | |||||||||||
Interest expense | (5,993 | ) | (11,369 | ) | (4,692 | ) | 41 | (3,222 | ) | ||||||||||||
Other (expense) income | 3 | 2 | 4 | 59 | 359 | ||||||||||||||||
Loss before income taxes | (8,953 | ) | (20,910 | ) | (8,834 | ) | (4,029 | ) | (26,596 | ) | |||||||||||
Income tax benefit | (3,535 | ) | (8,769 | ) | (2,650 | ) | (254 | ) | (7,635 | ) | |||||||||||
Net Loss | $ | (5,418 | ) | $ | (12,141 | ) | $ | (6,184 | ) | $ | (3,775 | ) | $ | (18,961 | ) | ||||||
(1) | Segment operating (loss) income includes allocations of certain corporate overhead expenses such as accounting and legal costs, bank charges, insurance, information technology etc. |
Successor Company | Predecessor Company | ||||||||||||||||||||
For the Three | For the Six | For the Period | For the Period | For the Period | |||||||||||||||||
Months Ended | Months Ended | April 24 to | April 1 to | January 1 to | |||||||||||||||||
June 30, 2010 | June 30, 2010 | June 30, 2009 | April 23, 2009 | April 23, 2009 | |||||||||||||||||
Depreciation and amortization: | |||||||||||||||||||||
Metro Traffic | $ | 3,239 | $ | 6,339 | $ | 4,357 | $ | 295 | $ | 1,480 | |||||||||||
Network Radio | 1,443 | 2,832 | 1,483 | 225 | 1,096 | ||||||||||||||||
Corporate | 7 | 14 | 5 | 1 | 8 | ||||||||||||||||
$ | 4,689 | $ | 9,185 | $ | 5,845 | $ | 521 | $ | 2,584 | ||||||||||||
Capital expenditures: | |||||||||||||||||||||
Metro Traffic | $ | 1,000 | $ | 2,592 | $ | 993 | $ | 204 | $ | 879 | |||||||||||
Network Radio | 1,337 | 1,920 | 553 | 12 | 506 | ||||||||||||||||
Corporate | 20 | 28 | — | — | — | ||||||||||||||||
$ | 2,357 | $ | 4,540 | $ | 1,546 | $ | 216 | $ | 1,385 | ||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share data)
June 30, 2010 | December 31, 2009 | |||||||
Metro Traffic | $ | 147,162 | $ | 147,387 | ||||
Network Radio | 119,279 | 131,632 | ||||||
Corporate | 18,380 | 28,299 | ||||||
$ | 284,821 | $ | 307,318 | |||||
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Successor Company | Predecessor Company | Combined Total | ||||||||||
For the Period April 24 to | For the Period April 1 to | For the Three Months | ||||||||||
June 30, 2009 | April 23, 2009 | Ended June 30, 2009 | ||||||||||
Revenue | $ | 58,044 | $ | 25,607 | $ | 83,651 | ||||||
Operating costs | 52,210 | 20,402 | 72,612 | |||||||||
Depreciation and amortization | 5,845 | 521 | 6,366 | |||||||||
Corporate general and administrative expenses | 2,313 | 1,267 | 3,580 | |||||||||
Restructuring charges | 1,454 | 536 | 1,990 | |||||||||
Special charges | 368 | 7,010 | 7,378 | |||||||||
Total expenses | 62,190 | 29,736 | 91,926 | |||||||||
Operating loss | (4,146 | ) | (4,129 | ) | (8,275 | ) | ||||||
Interest expense | 4,692 | (41 | ) | 4,651 | ||||||||
Other expense (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 Period April 24 to | For the Period January 1 to | For the Six Months | ||||||||||
June 30, 2009 | April 23, 2009 | Ended June 30, 2009 | ||||||||||
Revenue | $ | 58,044 | $ | 111,474 | $ | 169,518 | ||||||
Operating costs | 52,210 | 111,309 | 163,519 | |||||||||
Depreciation and amortization | 5,845 | 2,584 | 8,429 | |||||||||
Corporate general and administrative expenses | 2,313 | 4,519 | 6,832 | |||||||||
Restructuring charges | 1,454 | 3,976 | 5,430 | |||||||||
Special charges | 368 | 12,819 | 13,187 | |||||||||
Total expenses | 62,190 | 135,207 | 197,397 | |||||||||
Operating loss | (4,146 | ) | (23,733 | ) | (27,879 | ) | ||||||
Interest expense | 4,692 | 3,222 | 7,914 | |||||||||
Other expense (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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For the Three Months Ended June 30, | ||||||||||||||||
Favorable (Unfavorable) | ||||||||||||||||
2010 | 2009 | $ Amount | % | |||||||||||||
Metro Traffic | $ | 43,408 | $ | 43,489 | $ | (81 | ) | -0.2 | % | |||||||
Network Radio | 40,036 | 40,162 | (126 | ) | -0.3 | % | ||||||||||
Total (1) | $ | 83,444 | $ | 83,651 | $ | (207 | ) | -0.2 | % | |||||||
(1) | As described above, we currently aggregate revenue based on the operating segment. A number of advertisers purchase both local/regional and national or Network Radio commercial airtime in both segments. Our objective is to optimize total revenue from those advertisers. |
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Favorable / (Unfavorable) | ||||||||||||||||
2010 | 2009 | $ Amount | % | |||||||||||||
Payroll and payroll related | $ | 21,021 | $ | 19,457 | $ | (1,564 | ) | (8.0 | )% | |||||||
Programming and production | 17,575 | 17,868 | 293 | 1.6 | % | |||||||||||
Program and operating | 8,618 | 6,727 | (1,891 | ) | (28.1 | )% | ||||||||||
Station compensation | 18,608 | 18,334 | (274 | ) | (1.5 | )% | ||||||||||
Other operating expenses | 10,886 | 10,226 | (660 | ) | (6.5 | )% | ||||||||||
$ | 76,708 | $ | 72,612 | $ | (4,096 | ) | (5.6 | )% | ||||||||
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For the Three Months Ended June 30, | ||||||||||||||||
Favorable (Unfavorable) | ||||||||||||||||
2010 | 2009 | $ Amount | % | |||||||||||||
Metro Traffic | $ | 2,737 | $ | 5,448 | $ | (2,711 | ) | (49.8 | )% | |||||||
Network Radio | 3,014 | 4,611 | (1,597 | ) | (34.6 | )% | ||||||||||
Corporate expenses | (1,931 | ) | (2,600 | ) | 669 | 25.7 | % | |||||||||
Restructuring and special charges | (2,094 | ) | (9,368 | ) | 7,274 | 77.6 | % | |||||||||
OIBDA | 1,726 | (1,909 | ) | 3,635 | 190.4 | % | ||||||||||
Depreciation and amortization | (4,689 | ) | (6,366 | ) | 1,677 | 26.3 | % | |||||||||
Operating loss | $ | (2,963 | ) | $ | (8,275 | ) | $ | 5,312 | 64.2 | % | ||||||
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For the Six Months Ended June 30, | ||||||||||||||||
Favorable (Unfavorable) | ||||||||||||||||
2010 | 2009 | $ Amount | % | |||||||||||||
Metro Traffic | $ | 80,675 | $ | 78,172 | $ | 2,503 | 3.2 | % | ||||||||
Network Radio | 95,611 | 91,346 | 4,265 | 4.7 | % | |||||||||||
Total (1) | $ | 176,286 | $ | 169,518 | $ | 6,768 | 4.0 | % | ||||||||
(1) | As described above, we currently aggregate revenue based on the operating segment. A number of advertisers purchase both local/regional and national or Network Radio commercial airtime in both segments. Our objective is to optimize total revenue from those advertisers. |
Favorable / (Unfavorable) | ||||||||||||||||
2010 | 2009 | $ Amount | % | |||||||||||||
Payroll and payroll related | $ | 41,892 | $ | 40,716 | $ | (1,176 | ) | (2.9 | )% | |||||||
Programming and production | 47,415 | 50,679 | 3,264 | 6.4 | % | |||||||||||
Program and operating | 16,399 | 11,377 | (5,022 | ) | (44.1 | )% | ||||||||||
Station compensation | 37,098 | 38,103 | 1,005 | 2.6 | % | |||||||||||
Other operating expenses | 22,352 | 22,644 | 292 | 1.3 | % | |||||||||||
$ | 165,156 | $ | 163,519 | $ | (1,637 | ) | (1.0 | )% | ||||||||
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For the Six Months Ended June 30, | ||||||||||||||||
Favorable (Unfavorable) | ||||||||||||||||
2010 | 2009 | $ Amount | % | |||||||||||||
Metro Traffic | $ | 1,171 | $ | 1,121 | $ | 50 | 4.5 | % | ||||||||
Network Radio | 7,990 | 2,727 | 5,263 | 193.0 | % | |||||||||||
Corporate expenses | (4,859 | ) | (4,681 | ) | (178 | ) | (3.8 | )% | ||||||||
Restructuring and special charges | (4,660 | ) | (18,617 | ) | 13,957 | 75.0 | % | |||||||||
OIBDA | (358 | ) | (19,450 | ) | 19,092 | 98.2 | % | |||||||||
Depreciation and amortization | (9,185 | ) | (8,429 | ) | (756 | ) | (9.0 | )% | ||||||||
Operating loss | $ | (9,543 | ) | $ | (27,879 | ) | $ | 18,336 | 65.8 | % | ||||||
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We continually project anticipated cash requirements, which may include potential acquisitions, capital expenditures, and principal and interest payments on our outstanding indebtedness, dividends and working capital requirements. To date, funding requirements have been financed through cash flows from operations, the issuance of equity and the issuance of long-term debt. Our available liquidity on June 30, 2010 was $6,175. At August 17, 2010, after giving effect to the amendments to our debt agreements entered into on such date (See Note 16 — Subsequent Events), but not taking into account either of the stock purchases by Gores, our principal sources of liquidity were our cash and cash equivalents of $4,468 and amounts available to us under our revolving credit facility of $6,750 as described in Note 7 — Debt, which collectively totaled $11,218 of available liquidity. As part of these amendments, Gores agreed to purchase an additional $15,000 of common stock, $5,000 of which shall be purchased no later than September 7, 2010 and $10,000 of which shall be purchased on February 28, 2011 or sooner depending on the Company’s needs. Notwithstanding the foregoing, if the Company shall have received net cash proceeds of at least $10,000 from the issuance and sale of Company qualified equity interests (as such term is defined in the Securities Purchase Agreement) to any person, other than in connection with (1) Gores $5,000 investment in 2010, and (2) any stock or option grant to a Company employee under a stock option plan or other similar incentive or compensation plan of the Company or upon the exercise thereof, Gores shall not be required to invest the aforementioned $10,000.
While all of our businesses (Network Radio, Metro Traffic radio and Metro Television) are currently performing in accordance with our third quarter projections, our liquidity level was adversely affected by our second quarter performance. As a result of the foregoing, management believed it was prudent to renegotiate amendments to our debt agreements to enhance our available liquidity and to modify our debt leverage covenants. These negotiations resulted in the August 17, 2010 amendment described in Note 16 — Subsequent Events above. If we were to underperform against our future financial projections, we may need to take additional actions designed to respond to or improve our financial condition and we cannot assure you that any such actions would be successful in improving our financial position. While we understood there was an inherent unpredictability in the economy and our business in 2010 as described in our 10-Q for the first quarter ending March 31, 2010, our performance in the second half of the second quarter demonstrated a greater unpredictability than we anticipated. As a result of the foregoing, management believed it was advisable to negotiate an agreement with our lenders and Gores to enhance our available liquidity. These negotiations resulted in the August 17, 2010 amendments described in Note 16- Subsequent Events above.
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Required Last Twelve Months | ||||||||||||
Maximum Senior Leverage Ratio | Principal Amount of Senior Notes | (LTM) Minimum Adjusted | ||||||||||
Quarter Ending | Covenant | Estimated Outstanding (Includes PIK)(1)(2) | EBITDA(1)(2) | |||||||||
6/30/2010 | 7.50 to 1.0 | 109,409 | 14,588 | |||||||||
9/30/2010 | 11.25 to 1.0 | 110,777 | 9,847 | |||||||||
12/31/2010 | 11.25 to 1.0 | 112,161 | 9,970 | |||||||||
3/31/2011 | 11.25 to 1.0 | 113,563 | 10,095 | |||||||||
6/30/2011 | 11.00 to 1.0 | 114,983 | 10,453 | |||||||||
9/30/2011 | 10.00 to 1.0 | 116,420 | 11,642 | |||||||||
12/31/2011 | 9.00 to 1.0 | 117,875 | 13,097 | |||||||||
3/31/2012 | 8.00 to 1.0 | 119,349 | 14,919 | |||||||||
6/30/2012 | 7.50 to 1.0 | 120,841 | 16,112 |
(1) | The above chart reflects loan repayments in the aggregate of $15,500 as described in more detail in Note 7 — Debt as well as the modified debt leverage covenants amended on August 17, 2010. | |
(2) | The above chart does not reflect any loan repayments from the proceeds from the sale of investments, valued at $1,129 at June 30, 2010, as required by the terms of the August 17, 2010 amendments. |
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For the Three Months ended June 30, | For the Six Months ended June 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net loss | $ | (5,418 | ) | $ | (9,959 | ) | $ | (12,141 | ) | $ | (25,145 | ) | ||||
Plus: | ||||||||||||||||
Interest expense | 5,993 | 4,651 | 11,369 | 7,914 | ||||||||||||
Income taxes provision (benefit) | (3,535 | ) | (2,904 | ) | (8,769 | ) | (10,285 | ) | ||||||||
Depreciation and amortization | 4,689 | 6,366 | 9,185 | 8,429 | ||||||||||||
Restructuring and special charges | 2,094 | 9,368 | 5,256 | 18,617 | ||||||||||||
Other non-operating losses (gains) | (3 | ) | (62 | ) | (2 | ) | (362 | ) | ||||||||
Stock-based compensation | 822 | 1,610 | 1,881 | 2,962 | ||||||||||||
Consolidated Adjusted EBITDA | $ | 4,642 | $ | 9,070 | $ | 6,779 | $ | 2,130 | ||||||||
(1) | “Special charges and other” includes expense of $596 classified as corporate general and administrative expenses on the Statement of Operations for the six months ended June 30, 2010. |
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Our annual operating income has declined since 2005 and may continue to decline. We may not be able to reverse this trend or reduce costs sufficiently to offset declines in revenue if such trends continue and could lack sufficient funds to continue to operate our business in the ordinary course.
Since 2005, our annual operating income has declined from operating income of $143,978 to an operating loss of $97,582, which included impairment charges of approximately $50,501, for the year ended December 31, 2009. For the six months ended June 30, 2010, our operating loss was $9,543. Since 2005, our operating income declined as a result of increased competition in our local and regional markets and an increase in the sale of short-form inventory being sold by radio stations. The decline also occurred as a result of lower commercial clearance, a decline in our sales force and reductions in national audience levels across the industry, as well as locally at our affiliated stations. We reduced our sales force beginning in mid-2006 and only recently began expanding it again in 2009. In 2008 and 2009, our operating income was affected by the weakness in the United States economy and advertising market, where the recovery in 2010 has been slower than expected. During the economic downturn, advertisers and the agencies that represent them, increased pressure on advertising rates, and in some cases, requested steep percentage discounts on ad buys, demanded increased levels of inventory and re-negotiated booked orders. Although there has been a modest improvement in the economy, advertisers’ demands and budgets for advertising have not recovered as much as we anticipated which impacted our financial results for the first half of 2010 (in particular late May and June of the second quarter). If a double-dip recession were to occur or if the economic climate does not improve sufficiently for us to generate advertising revenue to meet our projections, our financial position could worsen to the point where we would lack sufficient liquidity to continue to operate our business in the ordinary course.
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We have a significant amount of indebtedness and limited liquidity, which will affect our future business operations if our future operating performance does not meet our financial projections.
As of June 30, 2010, we had $109,409 in aggregate principal amount of Senior Notes outstanding (of which approximately $7,409 is PIK), which bear interest at a rate of 15.0%, and a Senior Credit Facility consisting of a $20,000 term loan and a $15,000 revolving credit facility under which $12,000 was drawn (not including $1,219 used for letters of credit as security on various leased properties). Loans under our Senior Credit Facility bear interest at LIBOR plus 4.5% (with a LIBOR floor of 2.5%) or a base rate plus 4.5% (with a base rate floor equal to the greater of 3.75% or the one-month LIBOR rate). As described above in Note 16 – Subsequent Events, on August 17, 2010, we entered into an amendment with our lenders to modify our debt leverage covenants. As part of such amendments, Gores agreed to provide us with $20,000 in additional liquidity, in the form of: (1) a guarantee of an additional $5,000 for our revolving credit facility, (2) an additional $5,000 cash investment for 769,231 shares of Company common stock on or prior to September 7, 2010 and (3) an additional $10,000 cash investment for Company common stock on February 28, 2011, or sooner depending on the Company’s needs. Notwithstanding the foregoing, if the Company shall have received net cash proceeds of at least $10,000 from the issuance and sale of Company qualified equity interests (as such term is defined in the Securities Purchase Agreement) to any person, other than in connection with (1) Gores $5,000 investment in 2010, and (2) any stock or option grant to a Company employee under a stock option plan or other similar incentive or compensation plan of the Company or upon the exercise thereof, Gores shall not be required to invest the aforementioned $10,000. In connection with Gores’ agreement to increase its guarantee, Wells Fargo agreed to increase the amount of the Company’s revolving credit facility from $15,000 to $20,000 which will provide the Company with necessary additional liquidity for working capital purposes. Our ability to service our debt for the rest of 2010 and beyond depends on our financial performance in an uncertain and unpredictable economic environment as well as on competitive pressures. In the first two quarters of 2010, we met our debt covenants but did not meet our financial projections. If we were to significantly underperform against our financial projections for the second half of 2010 or beyond, we might need to raise additional funds or amend our agreements with our lenders. Despite having successfully negotiated such amendments in the past, we may be unable to further amend our debt agreements on terms that are acceptable to us or at all. Further, our Senior Notes and Senior Credit Facility restrict our ability to incur additional indebtedness beyond certain minimum baskets. If our operating income declines or does not meet our financial projections, and we are unable to obtain a waiver to increase our indebtedness or successfully raise funds through an issuance of equity, we would lack sufficient liquidity to operate our business in the ordinary course, which would have a material adverse effect on our business, financial condition and results of operations. If we were then unable to meet our debt service and repayment obligations under the Senior Notes or the Senior Credit Facility, we would be in default under the terms of the agreements governing our debt, which if uncured, would allow our creditors at that time to declare all outstanding indebtedness to be due and payable and materially impair our financial condition and liquidity.
If our operating results continue to fall short of our financial projections, we may require additional funding to finance our working capital, debt service, capital expenditures and other capital requirements or a further amendment and/or waiver of our debt leverage covenants, which if not obtained, would have a material and adverse effect on our business continuity and our financial condition.
As discussed above, we are operating in an uncertain economic environment, where the pace of an advertising recovery is unclear. As further described in Note 5 – Intangible Assets, our financial results were lower than our projections for the first two quarters of 2010 and management deemed it advisable to negotiate an amendment with our lenders and Gores to amend our debt leverage covenants and enhance our available liquidity. These negotiations resulted in the August 17, 2010 amendment we entered into with our lenders and Gores. If our operating results fall short of our financial projections, we may need additional funds or a further amendment and/or waiver of our debt leverage covenants. If financing is limited or unavailable to us or if we are forced to fund our operations at a higher cost, these conditions could require us to curtail our business activities or increase our cost of financing, both of which could reduce our profitability or increase our losses. If we were to require additional financing or a further amendment or waiver of our debt leverage covenants, which could not then be obtained, it would have a material adverse effect on our financial condition and on our ability to meet our obligations.
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Our Senior Credit Facility and Senior Notes contain various covenants which, if not complied with, could accelerate repayment under such indebtedness, thereby materially and adversely affecting our financial condition and results of operations.
Our Senior Credit Facility and Senior Notes require us to comply with certain financial and operational covenants. These covenants (as amended on August 17, 2010) include, without limitation:
• | a maximum senior leverage ratio (expressed as the principal amount of Senior Notes over our Adjusted EBITDA (as defined in our Senior Credit Facility) measured on a trailing, four-quarter basis) which is an 11.25 to 1.0 ratio for the LTM (last twelve months) period to be measured on September 30, 2010, December 31, 2010 and March 31, 2011, and then declines on a quarterly basis thereafter, to an 11.0 to 1 ratio on June 30, 2011, a 10.0 to 1.0 ratio on September 30, 2011, a 9.0 to 1.0 ratio on December 31, 2011, an 8.0 to 1.0 ratio on March 31, 2012; and a 7.5 to 1.0 ratio on June 30, 2012. |
• | 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. |
As described above, we waived and/or amended our debt leverage covenants on October 14, 2009, March 30, 2010, and most recently on August 17, 2010. As a result of these amendments, our debt leverage covenants have been significantly eased. We believe we will generate sufficient Adjusted EBITDA to comply with our new debt leverage covenants. However, failure to comply with any of our covenants would result in a default under our Senior Credit Facility and Senior Notes that, if we were unable to obtain a waiver from the lenders or holders thereof, could accelerate repayment under the Senior Credit Facility and Senior Notes and thereby have a material adverse impact on our business.
The cost of our indebtedness has increased substantially, which further affects our liquidity and could limit our ability to implement our business plan.
As a result of our Refinancing, the interest payments on our debt (on an annualized basis —i.e.,from April 23, 2009 to April 23, 2010 and subsequent annual periods thereafter) have increased from approximately $12,000 to $19,000, $6,000 of which is PIK interest. Our interest payments will be increased further if we utilize the additional amount available to us under the revolving credit facility which was increased from $15,000 to $20,000 as part of the amendments to our debt agreements entered into on August 17, 2010. If the economy does not improve more significantly and advertisers continue to maintain reduced budgets such that our financial results continue to come under pressure in 2010 and beyond, we may be required to delay the implementation or reduce the scope of our business plan and our ability to develop or enhance our services or programs could be impacted. Without additional revenue and capital, we may be unable to take advantage of business opportunities, such as acquisition opportunities or securing rights to name-brand or popular programming, or respond to competitive pressures. If any of the foregoing should occur, this could have a material and adverse effect on our business.
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CBS Radio provides us with a significant portion of our commercial inventory and audience that we sell to advertisers. A material reduction in the audience delivered by CBS Radio stations or a material loss of commercial inventory from CBS Radio would have an adverse effect on our advertising sales and financial results.
While we provide programming to all major radio station groups, we have affiliation agreements with most of CBS Radio’s owned and operated radio stations which, in the aggregate, provide us with a significant portion of the audience and commercial inventory that we sell to advertisers, much of which is in the more desirable top 10 radio markets. Although the compensation we pay to CBS Radio under our March 2008 arrangement is adjustable for audience levels and commercial clearance (i.e.,the percentage of commercial inventory broadcast by CBS Radio stations), any significant loss of audience or inventory delivered by CBS Radio stations, including, by way of example only, as a result of a decline in station audience, commercial clearance levels or station sales that resulted in lower audience levels, would have a material adverse impact on our advertising sales and revenue. Since implementing the new arrangement in early 2008 and continuing through the end of 2009, CBS Radio has delivered improved audience levels and broadcast more advertising inventory than it had under our previous arrangement. However, there can be no assurance that CBS Radio will be able to maintain these higher levels in particular, with the introduction of The Portable People Meter™, or PPM™, which to date has reported substantially lower audience ratings for certain of our radio station affiliates, including our CBS Radio station affiliates, in those markets in which PPM™ has been implemented as described below. As part of our recent cost reduction actions to reduce station compensation expense, we and CBS Radio mutually agreed to enter into an arrangement, which became effective on February 15, 2010, to give back approximately 15% of the audience delivered by CBS Radio. This resulted in a commensurate reduction in cash compensation payable to them. To help deliver consistent RADAR audience levels over time, we have added incremental non-CBS inventory. We actively manage our inventory, including by purchasing additional inventory for cash. We have also added Metro Traffic inventory from CBS Radio through various stand-alone agreements. While our arrangement with CBS Radio is scheduled to terminate in 2017, there can be no assurance that such arrangement will not be breached by either party. If our agreement with CBS Radio were terminated as a result of such breach, our results of operations could be materially impacted.
Our cost reduction initiatives and limited liquidity may limit our flexibility to reduce costs going forward.
In order to improve the efficiency of our operations, we have implemented certain cost reduction initiatives, including headcount and salary reductions and, in the last half of 2009, a furlough of participating full-time employees. We cannot assure you that our cost reduction activities will not adversely affect our ability to retain key employees, the significant loss of whom could adversely affect our operating results. As a result of our cost reduction activities and limited liquidity, we may not have an adequate level of resources and personnel to appropriately react to significant changes or fluctuations in the market and in the level of demand for our programming and services. If our operating losses continue, our ability to further decrease costs may be more limited as a result of our previously enacted cost reduction initiatives.
Our ability to grow our Metro Traffic business revenue may be adversely affected by the increased proliferation of free of charge traffic content to consumers.
Our Metro Traffic business produces and distributes traffic and other local information reports to approximately 2,250 radio and 165 television affiliates and we derive the substantial majority of the revenue attributed to this business from the sale of commercial advertising inventory embedded within these reports. Recently, the US Department of Transportation and other regional and local departments of transportation have significantly increased their direct provision of real-time traffic and traveler information to the public free of charge. The ability to obtain this information free of charge may result in our radio and television affiliates electing not to utilize the traffic and local information reports produced by our Metro Traffic business, which in turn could adversely affect our revenue from the sale of advertising inventory embedded in such reports.
Our ability to increase our revenue depends on the size of the audiences we deliver to advertisers, which has been negatively impacted by the introduction of The Portable People Meter.
Arbitron Inc., the supplier of ratings data for United States radio markets, rolled out new electronic audience measurement technology to collect data for its ratings service known as The Portable People Meter™, or PPM™, in 2007. PPM™ measures the audience of radio stations remotely without requiring listeners to keep a manual diary of the stations they listen to. In 2007, 2008, 2009, 2, 9 and 19 markets converted to PPM™, respectively, and in the second half of 2010, 15 markets will convert to PPM™. As of the date of this report, PPM™ has been implemented in 30 markets (including all top 10 markets and 3 markets whose MSAs overlap). Unlike our Metro Traffic inventory, which is fully reflected in ratings books that are released semi-annually, our Network Radio inventory is reflected in ratings books on an incremental basis over time (i.e.,over a rolling four-quarter period), which means we and our advertisers cannot view audience levels that give full weight to PPM™ for our Radio’s All Dimension Audience Research (“RADAR”) inventory (which comprises half of our Network Radio inventory) for over a year after a market converts to PPM™. In the RADAR ratings book released in June 2010, approximately half of the inventory (measured by the revenue generated by such inventory) published in such ratings books shows the effect of PPM™ in those markets which have converted to PPM™. In the three most recent periods published by RADAR, July 2009 to September 2009, October 2009 to December 2009 and January 2010 to March 2010, the audience (measured by Persons 12+) for our 12 RADAR networks declined by 0.8%, 5.8% and 0.8%, respectively, which also reflects our decision to reduce the number of our RADAR networks from 14 to 12 in the fourth quarter of 2009. Because audience levels can decline for several reasons, including changes in the radio stations included in a RADAR network, clearance levels by those stations and general radio listening trends, it is difficult to isolate the effects PPM™ is having on our audience with a high level of certainty. While annual ad revenue in our Network Radio and Metro Traffic businesses has declined over time, we are unable to determine how much of the decline is a result of the general economic environment as opposed to our decline in audience. While most major markets have converted to PPM™ (only 15 markets have yet to convert), it is unclear whether our audience levels will continue to decline in future ratings books. In 2009, we were able to offset the impact of audience declines by using excess inventory; however, in 2010 we anticipate that this option will be limited and that to offset declines in audience will generally require that we purchase additional inventory which must be obtained well in advance of our having definitive data on future audience levels. If we do not accurately predict how much additional inventory will be required to offset any declines in audience, or cannot purchase comparable inventory to our current inventory at efficient prices, our results of operations in 2010 and beyond could be materially and adversely affected.
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If we fail to maintain an effective system of internal controls, we may not be able to continue to accurately report our financial results.
Effective internal controls are necessary for us to provide reliable financial reporting. During 2009, we identified a material weakness related to accounting for income taxes which resulted in adjustments to the 2009 annual consolidated financial statements, as described in Item 9A — Controls and Procedures of our Annual Report on Form 10-K for the year ended December 31, 2009. We also identified certain immaterial errors in our financial statements, which we have corrected in subsequent interim periods. Such items have been reported and disclosed in the financial statements for the periods ended March 31, 2010 and December 31, 2009. We do not believe these adjustments are material to our current period consolidated financial statements or to any prior period’s consolidated financial statements and no prior periods have been restated. We intend to further enhance our internal control environment and we may be required to enhance our personnel or their level of experience, among other things, in order to continue to maintain effective internal controls. No assurances can be provided that we will be able to continue to maintain effective internal controls over financial reporting, enhance our personnel or their level of experience or prevent a material weakness from occurring. Our failure to maintain effective internal controls could have a material adverse effect on us, could cause us to fail to timely meet our reporting obligations or could result in material adjustments in our financial statements.
Our business is subject to increased competition from new entrants into our business, consolidated companies and new technology/platforms, each of which has the potential to adversely affect our business.
Our business segments operate in a highly competitive environment. Our radio and television programming competes for audiences and advertising revenue directly with radio and television stations and other syndicated programming. We also compete for advertising dollars with other media such as television satellite radio, newspapers, magazines, cable television, outdoor advertising, direct mail and, more increasingly, digital media. The proliferation of new media platforms, including the Internet, video-on-demand, and portable digital devices, has increased audience fragmentation. These new media platforms have gained an increased share of advertising dollars and their introduction could lead to further decreasing revenue for traditional media. Further, as we expend resources to expand our programming and services in new digital distribution channels, our operating results could be negatively impacted until we begin to gain traction in these emerging businesses. New or existing competitors may have resources significantly greater than our own. In particular, the consolidation of the radio industry has created opportunities for large radio groups, such as Clear Channel Communications, CBS Radio and Citadel Broadcasting Corporation to gather information and produce radio and television programming on their own. Increased competition has, in part, resulted in reduced market share over the last several years, and could result in lower audience levels, advertising revenue and cash flow. There can be no assurance that we will be able to maintain or increase our market share, audience ratings or advertising revenue given this competition. To the extent we experience a further decline in audience for our programs, advertisers’ willingness to purchase our advertising could be further reduced. Additionally, audience ratings and performance-based revenue arrangements are subject to change based on the competitive environment and any adverse change in a particular geographic area could have a material and adverse effect on our ability to attract not only advertisers in that region, but national advertisers as well.
In recent years, digital media platforms and the offerings thereon have increased significantly and consumers are playing an increasingly large role in dictating the content received through such mediums. We face increasing pressure to adapt our existing programming as well as to expand the programming and services we offer to address these new and evolving digital distribution channels. Advertising buyers have the option to filter their messages through various digital platforms and as a result, many are adjusting their advertising budgets downward with respect to traditional advertising mediums such as radio and television or utilizing providers who offer “one-stop shopping” access to both traditional and alternative distribution channels. If we are unable to offer our broadcasters and advertisers an attractive full suite of traditional and new media platforms and address the industry shift to new digital mediums, our operating results may be negatively impacted.
Our failure to obtain or retain the rights in popular programming could adversely affect our revenue.
Revenue from our radio programming and television business depends in part on our continued ability to secure and retain the rights to popular programming. We obtain a significant portion of our programming from third parties. For example, some of our most widely heard broadcasts, including certain NFL and NCAA games, are made available based upon programming rights of varying duration that we have negotiated with third parties. Competition for popular programming that is licensed from third parties is intense, and due to increased costs of such programming or potential capital constraints, we may be outbid by our competitors for the rights to new, popular programming or to renew popular programming currently licensed by us. Our failure to obtain or retain rights to popular content could adversely affect our revenue.
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If we are not able to integrate future acquisitions successfully, our operating results could be harmed.
We evaluate acquisitions on an ongoing basis and intend to pursue acquisitions of businesses in our industry and related industries that can assist us in achieving our growth strategy. The success of our future acquisition strategy will depend on our ability to identify, negotiate, complete and integrate acquisitions and, if necessary, to obtain satisfactory debt or equity financing to fund those acquisitions. Mergers and acquisitions are inherently risky, and any mergers and acquisitions we do complete may not be successful.
Any mergers and acquisitions we do may involve certain risks, including, but not limited to, the following:
• | 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. |
Our success is dependent upon audience acceptance of our content, particularly our radio programs, which is difficult to predict.
Revenue from our radio and television businesses is dependent on our continued ability to anticipate and adapt to changes in consumer tastes and behavior on a timely basis. Because consumer preferences are consistently evolving, the commercial success of a radio program is difficult to predict. It depends on the quality and acceptance of other competing programs, the availability of alternative forms of entertainment, general economic conditions and other tangible and intangible factors, all of which are difficult to predict. An audience’s acceptance of programming is demonstrated by rating points which are a key factor in determining the advertising rates that we receive. Poor ratings can lead to a reduction in pricing and advertising revenue. Consequently, low public acceptance of our content, particularly our radio programs, could have an adverse effect on our results of operations.
Continued consolidation in the radio broadcast industry could adversely affect our operating results.
The radio broadcasting industry has continued to experience significant change, including a significant amount of consolidation in recent years and increased business transactions by other key players in the radio industry (e.g., Clear Channel, Citadel and CBS Radio). Certain major station groups have: (1) modified overall amounts of commercial inventory broadcast on their radio stations; (2) experienced significant declines in audience; and (3) increased their supply of shorter duration advertisements, in particular the amount of 10 second inventory, which is directly competitive to us. To the extent similar initiatives are adopted by other major station groups, this could adversely impact the amount of commercial inventory made available to us or increase the cost of such commercial inventory at the time of renewal of existing affiliate agreements. Additionally, if the size and financial resources of certain station groups continue to increase, the station groups may be able to develop their own programming as a substitute to that offered by us or, alternatively, they could seek to obtain programming from our competitors. Any such occurrences, or merely the threat of such occurrences, could adversely affect our ability to negotiate favorable terms with our station affiliates, attract audiences and attract advertisers. If we do not succeed in these efforts, our operating results could be adversely affected.
We may be required to recognize further impairment charges.
On an annual basis and upon the occurrence of certain events, we are required to perform impairment tests on our identified intangible assets with indefinite lives, including goodwill, which testing could impact the value of our business. We have a history of recognizing impairment charges related to our goodwill. In connection with our Refinancing and our requisite adoption of the acquisition method of accounting, we recorded new values of certain assets such that as of April 24, 2009, our revalued goodwill was $86,414 (an increase of $52,426) and intangible assets were $116,910 (an increase of $114,481). In September 2009, we believe a triggering event occurred as a result of forecasted results for 2009 and 2010 and therefore we conducted a goodwill impairment analysis. Metro Traffic results indicated impairment in our Metro Traffic segment. As a result of our Metro Traffic analysis, we recorded an impairment charge of $50,501. Most recently, on June 30, 2010, we believe a triggering event occurred as described in Note 6 – Goodwill and accordingly conducted an impairment analysis. Such analysis showed that there was no indication of an impairment as of June 30, 2010. The majority of the impairment charges related to our goodwill have not been deductible for income tax purposes.
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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 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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Total Number of | Approximate Dollar | |||||||||||||||
Shares Purchased as | Value of Shares that | |||||||||||||||
Total | Part of Publicly | May Yet Be | ||||||||||||||
Number of Shares | Average Price Paid | Announced Plan or | Purchased Under the | |||||||||||||
Period | Purchased in Period | Per Share | Program | Plans or Programs (A) | ||||||||||||
4/1/10 – 4/30/10 | — | N/A | ||||||||||||||
5/1/10 – 5/31/10 | — | N/A | ||||||||||||||
6/1/10 – 6/30/10 | — | N/A |
(A) | Represents remaining authorization from the $250,000 repurchase authorization approved on February 24, 2004 and the additional $300,000 authorization approved on April 29, 2004, all of which have expired. |
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Exhibit | ||||
Number (A) | Description of Exhibit | |||
3.1 | Restated Certificate of Incorporation, as filed with the Secretary of State 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. (2) | |||
3.1.2 | Certificate of Elimination, filed with the Secretary of State of the State of Delaware on November 18,2009. (3) | |||
3.2 | Amended and Restated Bylaws of Registrant adopted on April 23, 2009 and currently in effect. (4) | |||
4.1 | Securities Purchase Agreement, dated as of April 23, 2009, by and among the Company and the other parties thereto. (4) | |||
4.1.1 | Waiver and First Amendment, dated as of October 14, 2009, to Securities Purchase Agreement, dated as of April 23, 2009, by and between the Company and the noteholders parties thereto. (5) | |||
4.1.2 | Second Amendment, dated as of March 30, 2010, to Securities Purchase Agreement, dated as of April 23, 2009, by and between the Company and the noteholders parties thereto. (6) | |||
4.1.3 | * | Third Amendment, dated as of August 17, 2010, to Securities Purchase Agreement, dated as of April 23, 2009, by and between the Company and the noteholders parties thereto. | ||
4.2 | Shared Security Agreement, dated as of February 28, 2008, by and among the Company, the Subsidiary Guarantors parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and The Bank of New York, as Collateral Trustee (7) | |||
4.2.1 | First Amendment to Security Agreement, dated as of April 23, 2009, by and among the Company, each of the subsidiaries of the Company and The Bank of New York Mellon, as collateral trustee. (8) | |||
10.1 | * | Third Amendment, dated as of August 17, 2010, to Credit Agreement, dated as of April 23, 2009, by and between Registrant, the lenders party thereto and Wells Fargo Foothill, LLC, as administrative agent for the lenders. | ||
10.2 | * | Purchase Agreement, dated August 17, 2010, between Registrant and Gores Radio Holdings, LLC. | ||
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. | |
(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 quarter ended June 30, 2008 and incorporated herein by reference. | |
(2) | Filed as an exhibit to Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2009 and incorporated herein by reference. | |
(3) | Filed as an exhibit to Company’s current report on Form 8-K dated November 20, 2009 and incorporated herein by reference. | |
(4) | Filed as an exhibit to Company’s current report on Form 8-K dated April 23, 2009 (filed April 27, 2009) and incorporated herein by reference. | |
(5) | Filed as an exhibit to Company’s current report on Form 8-K dated February 28, 2008 (filed on March 5, 2008) and incorporated herein by reference. | |
(6) | Filed as an exhibit to Company’s current report on Form 8-K dated March 31, 2010 and incorporated herein by reference. | |
(7) | Filed as an exhibit to Company’s current report on Form 8-K dated February 28, 2008 (filed on March 31, 20105, 2008) and incorporated herein by reference. | |
(8) | Filed as an exhibit Company’s current report on Form 8-K dated April 27, 2009 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 19, 2010 |
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Exhibit | |||
Number | Description of Exhibit | ||
4.1 | * | Third Amendment, dated as of August 17, 2010, to Securities Purchase Agreement, dated as of April 23, 2009, by and between the Company and the noteholders parties thereto. | |
10.1 | * | Third Amendment, dated as of August 17, 2010, to Credit Agreement, dated as of April 23, 2009, by and between Registrant, the lenders party thereto and Wells Fargo Foothill, LLC, as administrative agent for the lenders. | |
10.2 | * | Purchase Agreement, dated August 17, 2010, between Registrant and Gores Radio Holdings, LLC. | |
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. |
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