Exhibit 99.1
Clear Channel Outdoor Reports First Quarter 2007 Results
SAN ANTONIO--(BUSINESS WIRE)--April 26, 2007--Clear Channel
Outdoor Holdings, Inc. (NYSE: CCO) today reported results for its
first quarter ended March 31, 2007.
The Company reported revenues of $690.9 million in the first
quarter of 2007, a 15% increase over the $598.4 million reported for
the first quarter of 2006. Included in the Company's revenue is a
$31.2 million increase due to movements in foreign exchange; excluding
the effects of these movements in foreign exchange, revenue growth
would have been 10%. See reconciliation of revenue excluding effects
of foreign exchange to revenue at the end of this press release.
Clear Channel Outdoor's expenses increased 14% to $521.7 million
during the first quarter of 2007 compared to 2006. Included in the
Company's 2007 expenses is a $28.9 million increase due to movements
in foreign exchange; excluding the effects of these movements in
foreign exchange, growth in expenses would have been 7%. See
reconciliation of expenses excluding effects of foreign exchange to
expenses at the end of this press release.
Clear Channel Outdoor's net income and diluted earnings per share
were $16.1 million and $0.05, respectively, during the first quarter
of 2007. This compares to net income of $8.1 million or $0.02 per
diluted share in the first quarter of 2006.
The Company's first quarter 2006 net income included approximately
$17.1 million of pre-tax gains, $0.03 per diluted share after-tax, on
the swap of certain assets. Excluding these gains, Clear Channel
Outdoor's first quarter 2006 net income would have been a loss of $1.5
million or $0.01 loss per diluted share. See reconciliation of net
income and diluted earnings per share at the end of this press
release.
The Company's OIBDAN (defined as Operating Income before
Depreciation & amortization, Non-cash compensation expense and Gain on
disposition of assets - net) was $155.2 million in the first quarter
of 2007, a 23% increase from the first quarter of 2006. See
reconciliation of OIBDAN to net income at the end of this press
release.
"We posted double digit revenue and OIBDAN growth in the first
quarter, illustrating the breadth and strategic positioning of our
global outdoor advertising platform." said Mark P. Mays, Chief
Executive Officer. "The operating environment for outdoor advertising
remains very favorable, and we are well-positioned to continue to
capitalize on growth opportunities that exist in the outdoor
marketplace. We will also continue to pursue aggressive implementation
of new technologies such as digital billboards that we believe will
drive our long-term success."
"The Company generated outstanding growth in several key areas of
the business during the first quarter," added Paul J. Meyer, Global
President and Chief Operating Officer. "In the Americas segment, our
impressive performance was a result of strength across all of our
markets and media products, including growth in national and local
sales. Our international segment witnessed solid momentum as well,
benefiting from growth in street furniture and billboard revenues. The
operating progress demonstrated by our international segment is a
testament to the execution of our international management team. We
will continue to pursue opportunities to realize operating
efficiencies that exist across that business."
Revenue, Direct Operating and SG&A Expenses, and OIBDAN by Division
- ----------------------------------------------------------------------
(In thousands) Three Months Ended
March 31, %Change
-------------------
2007 2006
--------- ---------
Revenue
- ------------------------------------------
Americas $317,023 $274,102 16%
International 373,833 324,267 15%
--------- ---------
Consolidated revenue $690,856 $598,369 15%
========= =========
Direct Operating and SG&A Expenses by
Division
- ------------------------------------------
Americas $189,157 $168,205
Less: Non-cash compensation expense (1,126) (1,157)
--------- ---------
188,031 167,048 13%
International 332,581 291,226
Less: Non-cash compensation expense (241) (323)
--------- ---------
332,340 290,903 14%
Plus: Non-cash compensation expense 1,367 1,480
--------- ---------
Consolidated direct operating and SG&A
expenses $521,738 $459,431 14%
========= =========
The Company's 2007 revenue and direct operating and SG&A expenses
increased approximately $31.2 million and $28.9 million,
respectively, from foreign exchange movements during the first
quarter of 2007 as compared to the same period of 2006.
OIBDAN
- ------------------------------------------
Americas $128,992 $107,054 20%
International 41,493 33,364 24%
Corporate (15,270) (14,563)
--------- ---------
Consolidated OIBDAN $155,215 $125,855 23%
========= =========
See reconciliation of OIBDAN to net income at the end of this
press release.
Americas
The Company's Americas revenue increased $42.9 million, or 16%,
during the first quarter of 2007 as compared to 2006. Interspace
Airport Advertising, which the Company acquired in July 2006,
contributed approximately $15.3 million to the increase. The revenue
growth occurred across the Company's inventory, led by bulletin
revenues growth. The Company's bulletin rates increased, with
occupancy essentially flat in 2007 compared to 2006. The Company also
experienced rate increases on its poster and shelter inventory. Both
national and local revenues experienced strong growth during the
quarter. Revenue growth occurred across many of its markets, including
Boston, Miami, Philadelphia and Seattle.
Direct operating and SG&A expenses increased $21.0 million in the
first quarter of 2007 as compared to 2006. Interspace contributed
approximately $9.6 million of the increase. Production expenses
increased $2.0 million and the remainder of the increase in direct
operating and SG&A expenses was attributable to site lease and sales
expenses associated with the increase in revenue.
International
The Company's International revenue increased $49.6 million, or
15%, in the first quarter of 2007 as compared to 2006. Included in the
increase was approximately $31.2 million related to movements in
foreign exchange; excluding the effects of these movements in foreign
exchange, growth would have been 6%. Growth was led by street
furniture revenues, with billboard revenues increasing as well. The
increase in street furniture revenues and billboard revenues was
primarily attributable to increased yield. On a constant dollar basis,
revenue from the Company's operations in France increased in 2007 over
2006 primarily from strong street furniture sales, while revenue was
essentially flat in the United Kingdom.
Direct operating and SG&A expenses increased $41.4 million during
the first quarter of 2007 as compared to 2006. Included in the
increase was approximately $28.9 million related to movements in
foreign exchange; excluding the effects of these movements in foreign
exchange, growth would have been 4%. The increase was primarily
attributable to an increase in site lease expense primarily associated
with the increase in revenue and new contracts.
Digital Conversion
The Company installed digital displays in four different markets
(Akron, OH, Columbus, OH, Memphis, TN and Wichita, KS) during the
quarter and currently plans to deploy over 100 digital displays in
approximately twenty markets in 2007.
FAS No. 123 (R): Share-Based Payment ("FAS 123(R)")
The following table details non-cash compensation expense, which
represents employee compensation costs related to stock option grants
and restricted stock awards, for the first quarter of 2007 and 2006:
(In thousands) Three Months Ended
March 31,
--------------------------------
2007 2006
---------------- ---------------
Direct operating expense $986 $1,066
SG&A 381 414
Corporate 73 22
---------------- ---------------
Total share-based payments $1,440 $1,502
================ ===============
The Company will not be holding a Conference Call or Webcast
As a result of the Clear Channel Communications, Inc. proposed
merger transaction that was announced on November 16, 2006 and amended
on April 18, 2007, the Company will not be hosting a teleconference or
webcast to discuss results.
Second Quarter and 2007 Outlook
Due to the proposed merger transaction of Clear Channel
Communications, Inc. and the Company not hosting a teleconference to
discuss financial and operating results, the Company is providing the
following information regarding its current information related to
2007 operating results.
Pacing information presented below reflects revenues booked at a
specific date versus the comparable date in the prior period and may
or may not reflect the actual revenue growth at the end of the period.
The Company's revenue pacing information includes an adjustment to
prior periods to include all acquisitions and exclude all divestitures
in both periods presented for comparative purposes. All pacing metrics
exclude the effects of foreign exchange movements. The Company's
operating expense forecasts are on a reportable basis excluding
non-cash compensation expense, i.e. there is not an adjustment for
acquisitions, divestitures or the effects of foreign exchange
movements.
As of April 25, 2007, the Company's revenues are pacing up 6.7%
overall with Americas above and International below the 6.7% pacing
for the second quarter 2007 as compared to the second quarter of 2006.
For the full year 2007 versus the full year 2006, the Company's
revenues are pacing up 5.9% with the Americas above and International
below the full-year pacing of 5.9%. As of the last week in April, the
Company has historically experienced revenues booked of approximately
80% of the actual revenues recorded for the second quarter and
approximately 60% of the actual revenues recorded for the full year.
For the full year 2007 as compared to the full year 2006, current
Company forecasts show high single-digit to low double-digit growth in
total operating expenses. Excluding the effects of movements in
foreign exchange, which management currently forecasts at a $60 to $65
million increase for the full year 2007 and excluding management's
forecast of Interspace's (acquired by the Company on July 1, 2006)
operating expenses of $18 to $20 million for the first six months of
2007, operating expense growth is currently forecasted to be in the
mid single-digits for 2007 as compared to 2006.
For the consolidated company, current management forecasts show
corporate expenses of $60 to $65 million for the full year 2007.
Non-cash compensation expense (i.e. FAS No. 123 (R): share-based
payments) are currently projected to be in the range of $5 million to
$8 million for the full year of 2007.
The Company currently forecasts overall capital expenditures for
2007 of $225 to $250 million, excluding any capital expenditures
associated with any new contract wins the Company may have during
2007.
Income tax expense as a percent of 'Income before income taxes and
minority interest' is currently projected to be approximately 41%.
Current income tax expense as a percent of 'Income before income taxes
and minority interest' is currently expected to be 30% to 35%.
TABLE 1 - Financial Highlights of Clear Channel Outdoor Holdings, Inc.
and Subsidiaries - Unaudited
- ----------------------------------------------------------------------
Three Months Ended
(In thousands, except per share data) March 31,
-------------------
2007 2006 %Change
--------- --------- --------
Revenue $690,856 $598,369 15%
Direct operating expenses 394,205 344,396
Selling, general and administrative
expenses 127,533 115,035
Corporate expenses 15,343 14,585
Depreciation and amortization 95,670 96,320
Gain on disposition of assets - net 7,092 22,756
--------- ---------
Operating Income 65,197 50,789 28%
Interest expense 40,069 40,054
Equity in earnings of nonconsolidated
affiliates 125 1,378
Other income (expense) - net (44) (434)
--------- ---------
Income before income taxes and minority
interest 25,209 11,679
Income tax benefit (expense):
Current (6,877) 18,475
Deferred (3,764) (23,614)
--------- ---------
Income tax benefit (expense) (10,641) (5,139)
Minority interest income, net of tax 1,516 1,593
--------- ---------
Net income $16,084 $8,133 98%
========= =========
Diluted net earnings per share $.05 $.02
========= =========
Weighted average shares outstanding -
Diluted 355,505 350,001
TABLE 2 - Selected Balance Sheet Information - Unaudited
- ----------------------------------------------------------------------
Selected balance sheet information for 2007 and 2006 was:
(In millions) March 31, December 31,
2007 2006
------------- ------------
Cash $108.5 $105.4
Due from Clear Channel Communications $3.3 $--
Total Current Assets $1,201.0 $1,189.9
Net Property, Plant and Equipment $2,165.1 $2,191.8
Total Assets $5,403.9 $5,421.9
Due to Clear Channel Communications $-- $4.2
Current Liabilities (excluding current
portion of long-term debt) $704.4 $755.2
Long-Term Debt (including current portion of
long-term debt) $154.3 $184.2
Debt with Clear Channel Communications $2,500.0 $2,500.0
Shareholders' Equity $1,629.5 $1,586.4
TABLE 3 - Capital Expenditures - Unaudited
- ----------------------------------------------------------------------
Capital expenditures for the first quarter of 2007 and 2006 were:
(In millions) March 31, 2007 March 31, 2006
--------------- --------------
Non-revenue producing $17.9 $18.7
Revenue producing 29.4 25.0
--------------- --------------
Total capital expenditures $47.3 $43.7
=============== ==============
The Company defines non-revenue producing capital expenditures as
those expenditures that are required on a recurring basis. Revenue
producing capital expenditures are discretionary capital investments
for new revenue streams, similar to an acquisition.
TABLE 4 - Total Debt - Unaudited
- ----------------------------------------------------------------------
At March 31, 2007, Clear Channel Outdoor had total debt of:
(In millions) March 31, 2007
-------------------
Bank Credit Facility $17.7
Debt with Clear Channel Communications 2,500.0
Other Debt 136.6
-------------------
Total 2,654.3
Cash 108.5
Due from Clear Channel Communications 3.3
-------------------
Net Debt $2,542.5
===================
Liquidity and Financial Position
For the quarter ended March 31, 2007, cash flow from operating
activities was $86.4 million, cash flow used by investing activities
was $49.4 million, cash flow used by financing activities was $33.6
million, and the effect of exchange rate changes on cash was $0.3
million for a net increase in cash of $3.1 million.
Leverage, defined as total debt adjusting for the due to/due from
Clear Channel Communications, net of cash, divided by the trailing
12-month OIBDAN, was 2.9x at March 31, 2007.
Supplemental Disclosure Regarding Non-GAAP Financial Information
Operating Income before Depreciation and Amortization (D&A),
Non-cash Compensation Expense and Gain on Disposition of Assets - Net
(OIBDAN)
The following tables set forth Clear Channel Outdoor's OIBDAN for
the three months ended March 31, 2007 and 2006. The Company defines
OIBDAN as net income adjusted to exclude non-cash compensation expense
and the following line items presented in its Statement of Operations:
Minority interest, net of tax; Income tax benefit (expense); Other
income (expense) - net; Equity in earnings of nonconsolidated
affiliates; Interest expense; Gain on disposition of assets - net;
and, D&A.
The Company uses OIBDAN, among other things, to evaluate the
Company's operating performance. This measure is among the primary
measures used by management for planning and forecasting of future
periods, as well as for measuring performance for compensation of
executives and other members of management. 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 cash flows from operating activities. It is also a
primary measure used by management in evaluating companies as
potential acquisition targets.
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. It helps improve investors' ability to understand the
Company's operating performance and makes it easier to compare the
Company's results with other companies that have different capital
structures, stock option 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 OIBDAN is not a measure 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 and may not be
comparable to similarly titled measures employed by other companies.
OIBDAN is not necessarily a measure of the Company's ability to fund
its cash needs. As it excludes certain financial information compared
with operating income and net income (loss), the most directly
comparable GAAP financial measures, users of this financial
information should consider the types of events and transactions,
which are excluded.
In addition, because a significant portion of the Company's
advertising operations are conducted in foreign markets, principally
France and the United Kingdom, management reviews the operating
results from its foreign operations on a constant dollar basis. A
constant dollar basis (i.e. a foreign currency adjustment is made to
the 2007 actual foreign revenues and expenses at average 2006 foreign
exchange rates) allows for comparison of operations independent of
foreign exchange movements.
As required by the SEC, the Company provides reconciliations below
of (i) OIBDAN for each segment to consolidated operating income; (ii)
Revenue excluding foreign exchange effects to revenue; (iii) Expense
excluding foreign exchange effects to expense; (vi) OIBDAN to net
income, the most directly comparable amounts reported under GAAP and
(v) Net income and diluted earnings per share excluding certain items
discussed earlier.
Non-cash Depreciation Gain on
(In thousands) Operating compensation and disposition of
income (loss) expense amortization assets - net OIBDAN
-------------- ------------- ------------- ----------------- ----------------
Three Months Ended March 31,
2007
- ----------------------------
Americas $81,305 $1,126 $46,561 $-- $128,992
International (7,857) 241 49,109 -- 41,493
Corporate (15,343) 73 -- -- (15,270)
Gain on disposition of
assets - net 7,092 -- -- (7,092) --
-------------- ------------- ------------- ----------------- ----------------
Consolidated $65,197 $1,440 $95,670 $(7,092) $155,215
============== ============= ============= ================= ================
Three Months Ended March 31,
2006
- ----------------------------
Americas $63,665 $1,157 $42,232 $-- $107,054
International (21,047) 323 54,088 -- 33,364
Corporate (14,585) 22 -- -- (14,563)
Gain on disposition of
assets - net 22,756 -- -- (22,756) --
-------------- ------------- ------------- ----------------- ----------------
Consolidated $50,789 $1,502 $96,320 $(22,756) $125,855
============== ============= ============= ================= ================
Reconciliation of Revenue excluding Foreign Exchange Effects to
Revenue
(In thousands) Three Months Ended
March 31, %Change
-------------------
2007 2006
--------- ---------
Revenue $690,856 $598,369 15%
Less: Foreign exchange increase (31,214) --
--------- ---------
Revenue excluding effects of foreign
exchange $659,642 $598,369 10%
========= =========
International revenue $373,833 $324,267 15%
Less: Foreign exchange increase (31,253) --
--------- ---------
International revenue excluding effects of
foreign exchange $342,580 $324,267 6%
========= =========
Reconciliation of Expense (Direct Operating and SG&A Expenses)
excluding Foreign Exchange Effects to Expense
(In thousands) Three Months Ended
March 31, %Change
-------------------
2007 2006
--------- ---------
Expense $521,738 $459,431 14%
Less: Foreign exchange increase (28,934) --
--------- ---------
Expense excluding effects of foreign
exchange $492,804 $459,431 7%
========= =========
International expense $332,581 $291,226 14%
Less: Foreign exchange increase (28,892) --
--------- ---------
International expense excluding effects of
foreign exchange $303,689 $291,226 4%
========= =========
Reconciliation of OIBDAN to Net income
(In thousands) Three Months Ended
March 31, %Change
-------------------
2007 2006
--------- ---------
OIBDAN $155,215 $125,855 23%
Non-cash compensation expense 1,440 1,502
Depreciation & amortization 95,670 96,320
Gain on disposition of assets - net 7,092 22,756
--------- ---------
Operating Income 65,197 50,789 28%
Interest expense 40,069 40,054
Equity in earnings of nonconsolidated
affiliates 125 1,378
Other income (expense) - net (44) (434)
--------- ---------
Income before income taxes and minority
interest 25,209 11,679
Income tax (expense) benefit:
Current (6,877) 18,475
Deferred (3,764) (23,614)
--------- ---------
Income tax (expense) benefit (10,641) (5,139)
Minority interest income (expense) 1,516 1,593
--------- ---------
Net income $16,084 $8,133
========= =========
Reconciliation of Net Income and Diluted Earnings per Share ("EPS")
(In millions, except per share data) Three Months Three Months
Ended Ended
March 31, 2007 March 31, 2006
---------------- ----------------
Net Net
Income EPS Income EPS
-------- ------- -------- -------
Reported Amounts $16.1 $0.05 $8.1 $0.02
Less: Gain on disposition of asset -- -- (17.1) (0.05)
Current and deferred tax effects -- -- 7.5 0.02
-------- ------- -------- -------
Amounts excluding certain items $16.1 $0.05 $(1.5) $(0.01)
======== ======= ======== =======
About Clear Channel Outdoor Holdings
Clear Channel Outdoor, headquartered in San Antonio, Texas, is a
global leader in the outdoor advertising industry providing clients
with advertising opportunities through billboards, street furniture
displays, transit displays, and other out-of-home advertising
displays.
For further information contact:
Investors - Randy Palmer, Senior Vice President of Investor
Relations at (210) 832-3315 or Media - Lisa Dollinger, Chief
Communications Officer, (210) 832-3474 or visit our web site at
www.clearchanneloutdoor.com.
Certain statements in this document 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 Clear Channel Outdoor
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
The words or phrases "guidance," "believe," "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 document
include, but are not limited to: changes in business, political and
economic conditions in the U.S. and in other countries in which Clear
Channel Outdoor currently does business (both general and relative to
the advertising industry); fluctuations in interest rates; 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;
fluctuations in exchange rates and currency values; changes in tax
rates; and changes in capital expenditure requirements and access to
capital markets. Other unknown or unpredictable factors also could
have material adverse effects on Clear Channel Outdoor's future
results, performance or achievements. In light of these risks,
uncertainties, assumptions and factors, the forward-looking events
discussed in this document may not occur. You are cautioned not to
place undue reliance on these forward-looking statements, which speak
only as of the date stated, or if no date is stated, as of the date of
this document. Other key risks are described in Clear Channel
Outdoor's reports and other documents filed with the U.S. Securities
and Exchange Commission, including in the section entitled "Item 1A.
Risk Factors" of the Company's Annual Report filed on Form 10-K for
the year ended December 31, 2006. Except as otherwise stated in this
document, Clear Channel Outdoor does not undertake any obligation to
publicly update or revise any forward-looking statements because of
new information, future events or otherwise.
CONTACT: Clear Channel Outdoor Holdings, Inc.
Investors:
Randy Palmer
Senior Vice President of Investor Relations
210-832-3315
or
Media:
Lisa Dollinger
Chief Communications Officer
210-832-3474