EXHIBIT 99
WESTWOOD ONE
PRESS RELEASE
FOR IMMEDIATE RELEASE
CONTACT: ANDREW ZAREF
(212) 373-5311
WESTWOOD ONE, INC.
REPORTS RECORD FIRST QUARTER 2005 REVENUES,
INITIATES CASH DIVIDEND AND
INCREASES SIZE OF REPURCHASE PROGRAM AUTHORIZATION
REVENUES UP 3.5% TO RECORD $134.1 MILLION
New York, NY -- May 4, 2005: Westwood One, Inc. (NYSE: WON) Revenues for
the first quarter of 2005 were $134.1 million compared with $129.6 million for
the first quarter of 2004, an increase of approximately $4.5 million, or 3.5%.
For the first quarter of 2005, the Company benefited from a 5.8% and 1.1%
increase in revenues from local/regional and national commercial advertisements,
respectively, which includes increased revenues from complementary distribution
channels.
Operating income for the first quarter of 2005 was $29.2 million compared
with $31.0 million in the first quarter of 2004, a decrease of approximately
$1.8 million, or 5.7%. The decrease in operating income was primarily
attributable to incremental amortization expenses associated with warrants
issued with regard to our Management Agreement, increased programming,
production, and distribution expenses. In addition, the Company incurred in the
first quarter of 2005 higher corporate governance related expenses than in to
the first quarter of 2004.
Net income for the first quarter of 2005 was $15.8 million compared with
$17.5 million in the first quarter of 2004 a decrease of $1.8 million, or 10.0%.
Net income per diluted share decreased to $.17 per share from $.18 per share in
the first quarter of 2004.
Shane Coppola, President and Chief Executive Officer of Westwood One said:
"We are pleased with the consistent performance of our local/regional business
which is the result of our significant investments over the past two years. We
are confident that we will generate similar returns in our national business as
we continue to accelerate investments in network programming."
Income tax expense in the first quarter of 2005 was $9.8 million compared
with $10.6 million in the comparable 2004 period, a decrease of $.8 million, or
7.5%. The Company's effective income tax rate in the first quarter of 2005 was
38.2% compared with 37.6% in the comparable period of 2004. The increase in the
Company's effective tax rate is attributable to changes in state tax laws.
Weighted average fully diluted shares outstanding in the first quarter of
2005 decreased approximately 5.7%. The decrease in weighted average shares
outstanding was primarily attributable to the Company's stock repurchase
program. In the first quarter of 2005, the Company repurchased approximately 2.1
million shares of its common stock for approximately $48.6 million.
Non-GAAP(1)1 free cash flow for the first quarter of 2005 was $20.2 million
compared with $19.7 million for the first quarter of 2004. On a Non-GAAP per
diluted share basis free cash flow per share for the first quarter of 2005
increased to $.21 from $.20 for the first quarter of 2004, or 5%.
On April 29, 2005 the Board of Directors authorized an additional $300
million of repurchases under the Company's stock repurchase program. The
authorization allows for both open market purchases as well as private
transactions from time to time. Approximately $102 million remains available for
stock repurchases from previous authorizations bringing the new total
authorization to $402 million.
The Company also announced the initiation of cash a quarterly dividend. The
first quarterly dividend of $0.10 per share of outstanding common stock will be
payable on May 31, 2005, to shareholders of record on May 20, 2005.
Prospectively, the declaration of dividends, and the establishment of record and
payment dates, will be at the discretion of the Company's Board of Directors.
Andrew Zaref, Chief Financial Officer of Westwood One said: "Our capital
structure is aligned to meet our strategic objectives and is sufficient to
provide the resources necessary for growth. In addition, as the Company
continues to generate significant net cash provided by operating activities we
are positioned not only to grow, but also to return value to our shareholders
both through our current common equity repurchase program and through the
payment of a dividend."
2005 Outlook
- ------------
Westwood One expects to deliver revenue growth of low-to-mid single digits,
resulting in mid single digit growth in operating income before depreciation and
amortization.
- ------------------------
1 All Non-GAAP financial measures have been adjusted from comparable GAAP
measures. A description of all adjustments and reconciliations to comparable
GAAP measures for all periods presented are included within this communication.
About Westwood One
- ------------------
Westwood One provides over 150 news, sports, music, talk, entertainment
programs, features, live events and 24/7 Formats. Through its subsidiaries,
Metro Networks/Shadow Broadcast Services, Westwood One provides local content to
the radio and TV industries including news, sports, weather, traffic, video news
services and other information. SmartRoute Systems manages traffic information
centers for state and local departments of transportation, and markets traffic
and travel content to wireless, Internet, in-vehicle navigation systems and
voice portal customers. Westwood One serves more than 5,000 radio stations.
Westwood One, Inc. is managed by Infinity Broadcasting Corporation, a
wholly-owned subsidiary of Viacom Inc.
Certain statements in this release, including those relating to the
Company's expected growth in revenues and operating income before depreciation
and amortization and to the payment of quarterly dividends, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. The words or phrases "guidance," "expect,"
"anticipate," "estimates" and "forecast" and similar words or expressions are
intended to identify such forward-looking statements. In addition any statements
that refer to expectations or other characterizations of future events or
circumstances are forward-looking statements. Various risks that could cause
future results to differ from those expressed by the forward-looking statements
included in this release include, but are not limited to: changes in economic
conditions in the U.S. and in other countries in which Westwood One, Inc.
currently does business (both general and relative to the advertising and
entertainment industries); fluctuations in interest rates; changes in industry
conditions; changes in operating performance; shifts in population and other
demographics; changes in the level of competition for advertising dollars;
fluctuations in operating costs; technological changes and innovations; changes
in labor conditions; changes in governmental regulations and policies and
actions of regulatory bodies; changes in tax rates; changes in capital
expenditure requirements and access to capital markets. Other key risks are
described in the Company's reports filed with the U.S. Securities and Exchange
Commission. Except as otherwise stated in this news announcement, Westwood One,
Inc. does not undertake any obligation to publicly update or revise any
forward-looking statements because of new information, future events or
otherwise.
WESTWOOD ONE, INC.
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
- -----------------------------------------------------------------
The following tables set forth the Company's operating Income before
Depreciation and Amortization for the three month periods ended March 31, 2005
and 2004. The Company defines "Operating Income before Depreciation and
Amortization" as net income adjusted to exclude the following line items
presented in its Statement of Operations: Income taxes; Other (Income); Interest
expense; and Depreciation and Amortization. While this non-Generally Accepted
Accounting Principles ("GAAP") measure has been relabeled to more accurately
describe in the title the method of calculation of the measure, the actual
method of calculating the measure now labeled Operating Income before
Depreciation and Amortization is unchanged from the method previously used to
calculate the measure formerly labeled EBITDA or Operating Cash Flow in prior
disclosures.
The Company uses Operating Income before Depreciation and Amortization,
among other things, to evaluate the Company's operating performance, to value
prospective acquisitions, to determine compliance with debt covenants and as one
of several components of incentive compensation targets for certain management
personnel, and this measure is among the primary measures used by management for
planning and forecasting of future periods. This measure is an important
indicator of the Company's operational strength and performance of its business
because it provides a link between profitability and operating cash flow. The
Company believes the presentation of this measure is relevant and useful for
investors because it allows investors to view performance in a manner similar to
the method used by the Company's management, helps improve their ability to
understand the Company's operating performance and makes it easier to compare
the Company's results with other companies that have different financing and
capital structures or tax rates. In addition, this measure is also among the
primary measures used externally by the Company's investors, analysts and peers
in its industry for purposes of valuation and comparing the operating
performance of the Company to other companies in its industry.
Since Operating Income before Depreciation and Amortization is not a
measure of performance calculated in accordance with GAAP, it should not be
considered in isolation of, or as a substitute for, net income as an indicator
of operating performance. Operating Income before Depreciation and Amortization,
as the Company calculates it, may not be comparable to similarly titled measures
employed by other companies. In addition, this measure does not necessarily
represent funds available for discretionary use, and is not necessarily a
measure of the Company's ability to fund its cash needs. As Operating Income
before Depreciation and Amortization excludes certain financial information
included in net income, users of this financial information should consider the
types of events and transactions which are excluded. As required by the
Securities and Exchange Commission ("SEC"), the Company provides below a
reconciliation of Operating Income before Depreciation and Amortization to net
income the most directly comparable amount reported under GAAP.
WESTWOOD ONE, INC.
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
- -----------------------------------------------------------------
(In millions)
Three Months Ended March 31,
----------------------------
2005 2004
---- ----
Operating income before depreciation
and amortization $ 34.6 $ 34.2
Depreciation and amortization 5.3 3.2
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Operating Income 29.2 30.9
Interest Expense and Other 3.7 2.9
------ ------
Income before income taxes 25.5 28.0
Income Taxes 9.8 10.6
------ ------
Net income $ 15.8 $ 17.5
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Free cash flow is defined by the Company as net income plus depreciation
and amortization less capital expenditures. The Company uses free cash flow,
among other measures, to evaluate its operating performance. Management believes
free cash flow provides investors with an important perspective on the cash
available to service debt, make strategic acquisitions and investments, maintain
its capital assets, repurchase its Common Stock and fund ongoing operations. As
a result, free cash flow is a significant measure of the Company's ability to
generate long term value. The Company believes the presentation of free cash
flow is relevant and useful for investors because it allows investors to view
performance in a manner similar to the method used by management. In addition,
free cash flow is also a primary measure used externally by the Company's
investors, analysts and peers in its industry for purposes of valuation and
comparing the operating performance of the Company to other companies in its
industry. Free cash flow per fully diluted weighted average share outstanding is
defined by the Company as free cash flow divided by the fully diluted weighted
average share outstanding.
As free cash flow is not a measure of performance calculated in accordance
with GAAP, free cash flow should not be considered in isolation of, or as a
substitute for, net income as an indicator of operating performance or net cash
flow provided by operating activities as a measure of liquidity. Free cash flow,
as the Company calculates it, may not be comparable to similarly titled measures
employed by other companies. In addition, free cash flow does not necessarily
represent funds available for discretionary use and is not necessarily a measure
of the Company's ability to fund its cash needs. In arriving at free cash flow,
the Company adjusts operating cash flow to remove the impact of cash flow timing
differences to arrive at a measure which the Company believes more accurately
reflects funds available for discretionary use. Specifically, the Company
adjusts Net Cash Flows provided by Operating Activities (the most directly
comparable GAAP financial measure) for capital expenditures, deferred taxes and
certain other non-cash items in addition to removing the impact of sources and
or uses of cash resulting from changes in operating assets and liabilities.
Accordingly, users of this financial information should consider the types of
events and transactions which are not reflected. The Company provides below a
reconciliation of free cash flow to the most directly comparable amount reported
under GAAP, net cash flow provided by operating activities.
WESTWOOD ONE, INC.
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
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(In millions except free cash flow per diluted share)
The following table presents a reconciliation of the Company's net cash
flow provided by operating activities to free cash flow:
Three Months Ended
March 31,
------------------
2005 2004
---- ----
Net Cash Provided by Operating Activities $57.3 $51.2
Plus (Minus)
Changes in assets and liabilities
Accounts Receivable (19.0) (19.2)
Prepaid & Other Assets (2.1) (2.6)
Deferred Revenue 3.6 4.7
Income Taxes Payable (8.3) (5.8)
Accounts Payable and Accrued and Other Liabilities (6.7) (4.8)
Amounts Payable to Related Parties (3.5) (1.3)
Adjustments to reconcile net income to net cash
Provided by operating activities:
Deferred Taxes (0.2) (1.0)
Amortization of Deferred Financing costs (0.1) (0.5)
Capital Expenditures (0.8) (1.0)
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Free Cash Flow $20.2 $19.7
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Diluted Shares 94.3 100.1
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Free Cash Flow per Diluted Shares $ 0.21 $ 0.20
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WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended
March 31,
2005 2004
(Unaudited)
NET REVENUES $ 134,082 $ 129,608
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Operating Costs (include related party expenses
of $21,415 and $22,515, respectively) 97,026 93,496
Depreciation and Amortization (includes related party
warrant amortization of $2,427 and $338, respectively 5,256 3,154
Corporate General and Administrative Expenses
(includes related party expenses of $759 and $703,
respectively) 2,584 1,970
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104,866 98,620
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OPERATING INCOME 29,216 30,988
Interest Expense 3,711 2,917
Other (Income) Expense (60) (40)
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INCOME BEFORE INCOME TAXES 25,565 28,111
INCOME TAXES 9,776 10,564
NET INCOME $ 15,789 $ 17,547
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EARNINGS PER SHARE:
BASIC $ 0.17 $ 0.18
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DILUTED $ 0.17 $ 0.18
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WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 93,696 98,003
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DILUTED 94,331 100,068
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WESTWOOD ONE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2005 2004
---- ----
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,679 $ 10,932
Accounts receivable, net of allowance for doubtful accounts
of $3,231 (2005) and $2,556 (2004) 123,051 142,014
Prepaid and other assets 19,057 21,400
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Total Current Assets 146,787 174,346
PROPERTY AND EQUIPMENT, NET 45,800 47,397
GOODWILL 982,219 981,969
INTANGIBLE ASSETS, NET 5,884 6,176
OTHER ASSETS 36,020 36,391
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TOTAL ASSETS $ 1,216,710 $ 1,246,279
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 17,336 13,135
Amounts payable to related parties 23,763 20,274
Deferred revenue 10,697 14,258
Income taxes payable 13,463 5,211
Accrued expenses and other liabilities 32,052 28,463
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Total Current Liabilities 97,311 81,341
LONG-TERM DEBT 346,500 359,439
DEFERRED INCOME TAXES 12,694 12,541
OTHER LIABILITIES 8,290 8,465
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TOTAL LIABILITIES 464,795 461,786
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock: authorized 10,000,000 shares, none outstanding - -
Common stock, $.01 par value: authorized, 252,751,250 shares;
issued and outstanding, 92,283,315 (2005) and 94,353,675 (2004) 923 944
Class B stock, $.01 par value: authorized, 3,000,000 shares:
issued and outstanding, 291,796 (2005 and 2004) 3 3
Additional paid-in capital 321,706 369,036
Accumulated earnings 430,300 414,510
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752,932 784,493
Less treasury stock, at cost; 50,000 (2005) and 0 (2004) shares (1,017) -
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 751,915 784,493
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,216,710 $ 1,246,279
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WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
March 31,
2005 2004
---- ----
(Unaudited)
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 15,789 $ 17,547
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 5,256 3,154
Deferred taxes 153 1,000
Amortization of deferred financing costs 84 458
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21,282 22,159
Changes in assets and liabilities:
Accounts receivable 18,963 19,221
Prepaid and other assets 2,086 2,642
Deferred revenue (3,561) (4,646)
Income taxes payable 8,286 5,784
Accounts payable and accrued expenses
and other liabilities 6,749 4,764
Amounts payable to related parties 3,489 1,273
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Net Cash Provided By Operating Activities 57,294 51,197
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CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures (803) (989)
Acquisition of companies and other (204) 12
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Net Cash Used in Investing Activities (1,007) (977)
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CASH FLOW FROM FINANCING ACTIVITIES:
Issuance of common stock 193 5,843
Borrowings under bank and other long-term obligations 10,000 120,000
Debt repayments and payments of capital lease obligations (25,156) (100,146)
Repurchase of common stock (47,577) (63,286)
Deferred financing costs - (1,269)
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Net Cash Used in Financing Activities (62,540) (38,858)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (6,253) 11,362
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 10,932 8,665
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,679 $ 20,027
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