<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1994 Aommission File Number
0-13020
WESTWOOD ONE, INC.
------------------
(Exact name of registrant as specified in its charter)
DELAWARE 95-3980449
-------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9540 WASHINGTON BLVD., CULVER CITY, CALIFORNIA 90232
----------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (310) 204-5000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
------- ------
As of October 31, 1994 30,652,652 shares of Common Stock were outstanding and
351,733 shares of Class B Stock were outstanding.
<PAGE>
<PAGE>
WESTWOOD ONE
------------
INDEX
-----
<TABLE>
<S> <C> <C>
PART I. FINANCIAL INFORMATION: Page No.
--------
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
PART II. OTHER INFORMATION 15
SIGNATURES 17
</TABLE>
-2-
<PAGE>
<PAGE>
WESTWOOD ONE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
September 30, November 30,
1994 1993
------------- ------------
<S> <C> <C>
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 1,284 $ 3,868
Accounts receivable, net of allowance for doubtful accounts 31,572 19,480
Programming costs and rights, current portion 4,200 6,849
Other current assets 3,371 2,790
-------- --------
Total Current Asset 40,427 32,987
PROPERTY AND EQUIPMENT, NET 17,044 15,984
PROGRAMMING COSTS AND RIGHTS 2,762 6,185
INTANGIBLE ASSETS, NET (Note 5) 192,204 90,745
OTHER ASSETS 3,902 6,166
-------- --------
TOTAL ASSETS $256,339 $152,067
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 15,553 $ 13,446
Accrued expenses and other liabilities 14,945 12,838
Current maturities of long-term debt 2,500 1,558
Short-term borrowings (Note 8) - 6,648
-------- --------
Total Current Liabilities 32,998 34,490
LONG-TERM DEBT (Note 8) 117,943 51,943
OTHER LIABILITIES 10,924 10,483
-------- --------
TOTAL LIABILITIES 161,865 96,916
-------- --------
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY (Notes 5 and 8):
Preferred stock: authorized 10,000,000 shares, none outstanding - -
Common stock, $.01 par value: authorized, 117,000,000 shares;
issued and outstanding, 30,577,402 (1994) and 15,978,758 (1993) 306 160
Class B stock, $.01 par value: authorized, 3,000,000 shares:
issued and outstanding, 351,733 (1994 and 1993) 4 4
Additional paid-in capital 159,593 110,547
Accumulated deficit (65,429) (55,560)
--------- --------
TOTAL SHAREHOLDERS' EQUITY 94,474 55,151
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $256,339 $152,067
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
<PAGE>
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
GROSS REVENUES $42,450 $26,470 $115,000 $73,403
Less Agency Commissions 5,959 3,859 16,306 10,683
------- ------- -------- --------
NET REVENUES 36,491 22,611 98,694 62,720
------- ------- -------- --------
Operating Costs and Expenses Excluding
Depreciation and Amortization 26,787 16,715 76,532 48,443
Depreciation and Amortization 4,637 4,034 13,597 12,318
Corporate General and Administrative Expenses 1,057 1,022 3,431 3,051
Restructuring Costs (Note 7) - - 2,405 -
------- ------- -------- -------
32,481 21,771 95,965 63,812
------- ------- -------- -------
OPERATING INCOME (LOSS) 4,010 840 2,729 (1,092)
Interest Expense 2,422 1,556 6,534 5,001
Other Income (70) (22) (230) (45)
------- -------- -------- -------
INCOME (LOSS) BEFORE INCOME TAXES, DISCONTINUED
OPERATIONS AND EXTRAORDINARY ITEM 1,658 (694) (3,575) (6,048)
INCOME TAXES (NOTE 6) - - - -
------- -------- -------- -------
INCOME (LOSS) FROM CONTINUING OPERATIONS 1,658 (694) (3,575) (6,048)
(LOSS) ON DISCONTINUED OPERATIONS - - - (2,232)
PROVISION FOR (LOSS) ON DISPOSAL OF DISCONTINUED
OPERATIONS - (8,500) - (8,500)
------- -------- -------- ---------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM 1,658 (9,194) (3,575) (16,780)
EXTRAORDINARY ITEM - (LOSS) ON RETIREMENT OF DEBT - - (590) -
------- ------- -------- ---------
NET INCOME (LOSS) $1,658 ($9,194) ($4,165) ($16,780)
======= ======== ======== =========
INCOME (LOSS) PER SHARE:
Continuing Operations $ .05 ($ .05) ($ 12) ($ .40)
Discontinued Operations - ( .56) - ( .72)
------- -------- -------- ---------
Income (Loss) Before Extraordinary Item .05 ( .61) ( .12) ( 1.12)
Extraordinary Item - - ( .02) -
------- -------- -------- ---------
Net Income (Loss) $ .05 ($ .61) ( $ .14) ($ 1.12)
======= ======== ======== =========
Pro forma amounts assuming the new accounting
method is applied retroactively (Note 6):
Income (Loss) Before Extraordinary Item $1,658 ($8,994) ($3,575) ($16,227)
Net Income (Loss) 1,658 (8,994) (4,165) (16,227)
Income (Loss) Per Share:
Income (Loss) Before Extraordinary Item $ .05 ($ .60) ($ .12) ($ 1.08)
Net Income (Loss) .05 ( .60) ( .14) ( 1.08)
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
<PAGE>
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------
1994 1993
---- ----
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss ($4,165) ($16,780)
Adjustments to reconcile net loss to net cash used by operating
activities before cash payments related to extraordinary item:
Depreciation and amortization 13,597 12,977
Provision for loss on disposal of discontinued operations - 8,500
Extraordinary item - loss on retirement of debt 590 -
Other, principally capitalized programming costs and rights (427) (1,842)
Changes in assets and liabilities:
Increase in accounts receivable (13,180) (2,218)
Decrease (increase) in prepaid assets (790) 444
Increase in accounts payable and accrued liabilities 4,253 3,417
-------- -------
Net cash provided (used) by operating activities before cash
payments related to extraordinary item (122) 4,498
Cash payments related to extraordinary item (250) -
--------- -------
Net Cash Provided (Used) By Operating Activities (372) 4,498
--------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of companies (Unistar in 1994) (106,976) (957)
Capital expenditures (990) (2,162)
Capitalized station affiliation agreements (Note 6) - (616)
Proceeds (cash payments) related to sales of discontinued operations (563) 87,634
Proceeds related to sale of unconsolidated subsidary - 1,627
Proceeds related to sale of property and equipment - 853
Other (principally deferred financing costs in 1994) (1,405) (145)
--------- -------
Net Cash Provided (Used) By Investing Activities (109,934) 86,234
--------- -------
CASH PROVIDED (REQUIRED) BEFORE FINANCING ACTIVITIES (110,306) 90,732
--------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Debt repayments (14,515) (90,984)
Borrowings under debt arrangements 110,000 -
Issuance of common stock 15,991 196
--------- -------
NET CASH FROM (USED IN) FINANCING ACTIVITIES 111,476 (90,788)
--------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,170 (56)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 114 3,637
--------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,284 $3,581
========= =======
</TABLE>
See accompanying notes to consolidated financial statements.
- 5 -
<PAGE>
<PAGE>
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(In thousands, except per share data)
NOTE 1 - Basis of Presentation:
- -------------------------------
The accompanying consolidated balance sheet as of September
30, 1994, the consolidated statements of operations for the three and nine
month periods ended September 30, 1994 and 1993 and the consolidated
statements of cash flows for the nine months ended September 30, 1994 are
unaudited, but in the opinion of management include adjustments, consisting of
only normal recurring adjustments, necessary for a fair presentation of the
financial position and the results of operations for the periods presented.
These financial statements should be read in conjunction with
the Company's Annual Report on Form 10-K, filed with the Securities and
Exchange Commission.
NOTE 2 - Reclassification:
- --------------------------
Certain amounts in the prior year Statement of Operations and
Statement of Cash Flows have been reclassified to conform to the current year
presentation.
NOTE 3 - Change in Fiscal Year:
- -------------------------------
In the third quarter, the Company changed its fiscal year end
from November 30 to December 31 effective with the fiscal year ending
December 31, 1994. Accordingly, the statements of operations for the three
and nine month periods ended September 30, 1994 and 1993 are presented
excluding results for June 1994 and 1993 and December 1993 and 1992,
respectively. The unaudited statements of operations for the months of June
1994 and December 1993 follow:
-6-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
June, December,
1994 1993
------- --------
<S> <C> <C>
Gross Revenues $14,085 $ 6,887
Less Agency Commissions 1,986 970
------- -------
Net Revenues 12,099 5,917
------- -------
Operating Costs and Expenses Excluding
Depreciation and Amortization 8,750 5,411
Depreciation and Amortization 1,500 1,243
Corporate General and Administrative Expenses 360 245
------- -------
10,610 6,899
------- -------
Operating Income (Loss) 1,489 (982)
Interest Expense 792 381
Other Income (36) (3)
------- -------
Income (Loss) Before Income Taxes and
Cumulative Effect of Accounting Change 733 (1,360)
Income Taxes - -
------- -------
Income (Loss) Before Cumulative Effect
of Accounting Change 733 (1,360)
Cumulative Effect of Accounting Change (Note 6) - (4,344)
------- -------
Net Income (Loss) $ 733 ($5,704)
======= =======
Income (Loss) Per Share:
Income (Loss) Before Cumulative Effect
of Accounting Change $ .02 ($ .07)
Cumulative Effect of Accounting Change - ( .23)
------- -------
Net Income (Loss) $ .02 ($ .30)
======= =======
</TABLE>
In addition, the consolidated statements of cash flows for the
nine months ended September 30, 1994 and 1993 excludes changes in cash flows
for the months of December 1993 and 1992, respectively. The unaudited
condensed statement of cash flows for the month ended December 31, 1993
follows:
-7-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
December,
1993
--------
<S> <C>
Net Cash From Operating Activities $ 690
------
Cash Flow From Investing Activities:
Acquisition of companies ( 72)
Cash payments related to sales of discontinued operations ( 229)
Capital expenditures ( 296)
Other ( 82)
------
Net Cash (Used) by Investing Activities ( 679)
------
Cash Provided Before Financing Activities 11
------
Cash Flow From Financing Activities:
Debt repayments (4,133)
Issuance of common stock 368
------
Net Cash (Used In) Financing Activities (3,765)
------
Net Decrease in Cash and Cash Equivalents (3,754)
Cash and Cash Equivalents at Beginning of Period 3,868
------
Cash and Cash Equivalents at End of Period $ 114
======
</TABLE>
NOTE 4 - Earnings Per Share:
- ----------------------------
Net income (loss) per share is computed based upon the
weighted average number of shares outstanding and Common Stock equivalents in
periods where there is net income of 34,226 and 15,065 for the three month
periods ended September 30, 1994 and 1993, respectively and 28,889 and 15,030
for the nine month periods ended September 30, 1994 and 1993, respectively.
NOTE 5 - Acquisition of Unistar Radio Networks, Inc:
- ---------------------------------------------------
On February 3, 1994, the Company completed the acquisition of
all of the issued and outstanding capital stock of Unistar Radio Networks,
Inc. ("Unistar"). The acquisition was accounted for as a purchase.
Accordingly, the operating results of Unistar are included with those of the
Company from the date of acquisition. Based on a preliminary purchase price
allocation, the purchase price has been allocated to the fair value of assets
and liabilities acquired. The excess of cost over net assets of acquired
company resulting from the transaction is being amortized over 40 years.
The pro forma unaudited combined condensed results of
operations of the Company and Unistar for the nine months ended September 30,
1994 and 1993 (presented as though the combination had occurred on January 1,
1993 after giving effect to certain pro forma adjustments) are as follows:
-8-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------
1994 1993
---- ----
<S> <C> <C>
Net Revenues $102,757 $106,471
(Loss) from Continuing Operations (1,844) (3,529)
(Loss) Per Share from Continuing
Operations ($ .06) ($ .12)
</TABLE>
The foregoing pro forma results of operations principally
reflect adjusting historical interest expense, depreciation and amortization,
the sale of 5,000 newly issued shares of common stock to a subsidiary of
Infinity and restructuring costs based on the transaction being completed at
the beginning of the periods presented. No adjustments were made to
historical results for potential cost reductions due to the elimination of
duplicate facilities and costs resulting from the acquisition of Unistar.
However, 1994 pro forma results reflect the benefit of cost reductions to the
extent that they have been realized.
NOTE 6 - Accounting Changes:
- ----------------------------
Effective December 1, 1993, the Company changed its method of
accounting for capitalized station affiliation agreements to expense these
costs as incurred. The Company believes this method is preferable and
conforms to the predominate current industry practice, including Unistar.
Accordingly, the Company recognized the cumulative effect of the change as of
December 1, 1993. The non-cash charge to earnings was an expense of $4,344,
or $.23 per share and has been reflected in the financial statements for the
month of December 1993. (See Note 3 - Change in Fiscal Year).
Effective December 1, 1993, the Company adopted SFAS No. 109
"Accounting for Income Taxes" and, under the provisions of the Statement, has
elected not to restate prior years' financial statements. The adoption of
SFAS 109 changes the Company's method of accounting for income taxes from the
deferred method, where the effects of timing differences between financial
reporting and taxable income were deferred, to an asset and liability method,
which requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between tax bases
and financial reporting bases of assets and liabilities. There was no effect
on the current period results as a result of this change.
NOTE 7 - Restructuring Costs:
- -----------------------------
As a result of the Company's February 1994 acquisition of
Unistar Radio Networks, Inc., the Company will consolidate certain facilities
and operations. Accordingly, the Company recorded an expense of approximately
$2,405 for the estimated restructuring charges, including the expected costs
of facility consolidations, eliminating programs, employee separations,
relocations and related costs.
-9-
<PAGE>
<PAGE>
NOTE 8 - Revolving Credit Facilities and Long-Term Debt:
- --------------------------------------------------------
On February 3, 1994, the Company entered into a new senior
loan agreement with a syndicate of banks (the "Agreement"). The Agreement
provides for a $15,000 revolving facility and $110,000 in term loans which
mature on November 30, 2001. Interest is payable at the prime rate plus an
applicable margin of 1.5% or LIBOR plus an applicable margin of 2.5%, at the
Company's option. Based on the Company's total debt ratio, the applicable
margins may be reduced to as low as .5% for prime rate loans and 1.5% for
LIBOR loans. Principal on the term loans is payable quarterly starting on
February 28, 1995. The agreement contains covenants relating to dividends,
liens, indebtedness, capital expenditures and interest coverage and leverage
ratios. In August 1994, the Company prepaid the principal payments due on
February 28, 1995 and May 31, 1995, thereby reducing the outstanding balance
of the term loans to $105,000.
The proceeds of the Loans were used principally to acquire
Unistar and repay the Company's existing senior debt.
At September 30, 1994, the Company did not have any borrowings
outstanding under its $15,000 revolving facility.
In 1994 the Company redeemed all its outstanding 9%
Convertible Senior Subordinated Debentures ("Senior Debentures"). During 1994
those debentures ($18,624 principal) were converted into 5,321 shares of
common stock. At September 30, 1994 no Senior Debentures were outstanding.
NOTE 9 - Discontinued operations:
- ---------------------------------
In fiscal 1993, the Company classified the results of
operations from Radio & Records and its Los Angeles and New York radio
stations as discontinued operations. The Company disposed of these assets
during fiscal 1993.
-10-
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS
--------------------------------------
(In thousands, except per share amounts)
In August 1994, the Company changed its fiscal year end from
November 30 to December 31 effective with the fiscal year ending December 31,
1994.
On February 3, 1994 the Company completed the acquisition of
all of the issued and outstanding capital stock of the Unistar Radio Networks,
Inc. ("Unistar"). The acquisition was accounted for as a purchase, and
accordingly, the operating results of Unistar are included with those of the
Company from the date of acquisition.
Effective December 1, 1993, the Company changed its method of
accounting for capitalized station affiliation agreements and income taxes.
In order to conform to predominate current industry practice, capitalized
station affiliation agreements will be expensed as incurred. The cumulative
effect of the change in accounting for station affiliations expenses in
December 1993 was an expense of $4,344, or $.23 per share. SFAS No. 109
"Accounting for Income Taxes" was adopted by the Company in December 1993.
The Company elected not to restate prior year's financial statements.
Adopting SFAS No. 109 did not effect the December 1993 or current period
results.
In fiscal 1993, the Company classified the results of
operations from Radio & Records and its Los Angeles and New York radio
stations as discontinued operations. The Company disposed of these assets
during fiscal 1993.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1994 COMPARED
WITH THREE MONTHS ENDED SEPTEMBER 30, 1993
- ----------------------------------------------
Westwood One derives substantially all of its revenue from the
sale of advertising time to advertisers. Net revenue increased 61% to $36,491
in the third quarter of 1994 from $22,611 in the comparable prior year
quarter. The increase in net revenue was primarily a result of the purchase
of Unistar in February 1994, partially offset by fewer large special event
programs.
Operating costs and expenses excluding depreciation and
amortization increased 60% to $26,787 in the third fiscal quarter of 1994 from
$16,715 in the third quarter of 1993. The increase was primarily attributable
to the purchase of Unistar and higher programming expenses resulting from the
production of additional programs, partially offset by lower costs of special
event programs.
Depreciation and amortization increased 15% to $4,637 in the
third quarter of 1994 from $4,034 in the third quarter of 1993. The increase
is principally attributable to higher depreciation and amortization resulting
from the purchase of Unistar in February 1994, partially offset by lower
amortization of production costs as well as the change in accounting for
capitalized station affiliation agreements whereby the costs of station
affiliation agreements are expensed currently and are no longer capitalized.
-11-
<PAGE>
<PAGE>
Operating income increased $3,170, or 377%, to $4,010 in the
third quarter of 1994 from $840 in the same period of 1993. The substantial
improvement in operating income is attributable to the acquisition of Unistar
and cost savings resulting from operating synergies from the Unistar
acquisition, partially offset by higher depreciation and amortization expense
as a result of the Unistar acquisition.
Interest expense increased 56% to $2,422 in the third quarter
of 1994 from $1,556 in the third quarter of 1993. The increase is principally
attributable to higher debt levels as a result of the acquisition of Unistar,
partially offset by the elimination of interest expense on the Company's
Senior Debentures due to their conversion to Common Stock.
Income from continuing operations was $1,658 ($.05 per share)
in the third quarter of 1994 as compared to a loss from continuing operations
in the third quarter of 1993 of $694 ($.05 per share). The weighted average
number of shares outstanding (including Common Stock equivalents) increased
127% to 34,226 in the third quarter of 1994 from 15,065 in the comparable 1993
quarter. The increase in weighted average shares was principally attributable
to the conversion of Senior Debentures into the Company's Common Stock and the
sale of 5,000 shares of Common Stock to a subsidiary of Infinity.
In the third quarter of 1993, the Company recorded a provision
for loss on discontinued operations of $8,500 ($.56 per share).
Net income in the third quarter of 1994 was $1,658 ($.05 per
share) as compared to a net loss of $9,194 ($.61 per share) in 1993. On a
pro forma basis, the change in accounting for station affiliation agreements
did not affect the comparability of the third quarter results.
NINE MONTHS ENDED SEPTEMBER 30, 1994 COMPARED
WITH NINE MONTHS ENDED SEPTEMBER 30, 1993
- ---------------------------------------------
Net revenue for the first three quarters of fiscal 1994
increased 57% to $98,694 in 1994 from $62,720 for the first three quarters of
1993. The increase in net revenue was primarily a result of the purchase of
Unistar in February 1994, partially offset by fewer large special event
programs.
Operating costs and expenses excluding depreciation and
amortization increased 58% to $76,532 in the first nine months of 1994 from
$48,443 in the comparable 1993 period. The increase was primarily
attributable to the purchase of Unistar and higher programming expenses.
Depreciation and amortization increased $1,279 to $13,597 in
1994 from $12,318 in the first nine months of 1993. The increase is
principally attributable to higher depreciation and amortization resulting
from the purchase of Unistar, partially offset by lower amortization of
production costs and the change in accounting for capitalized station
affiliation agreements whereby station affiliation expenses are expensed
currently and are no longer capitalized.
Corporate general and administrative expenses increased $380,
or 13%, to $3,431 in the first nine months of 1994 from $3,051 in the first
nine months of 1993. The increase is attributable to the Infinity Management
Agreement, partially offset by across-the-board expense reductions.
-12-
<PAGE>
<PAGE>
As a result of the purchase of Unistar, the Company accrued
restructuring costs of approximately $2,405 in the first quarter of 1994
principally relating to the consolidation of certain facilities and
operations. The effect of the restructuring will be to reduce operating
costs in the future.
In the first nine months of 1994 the Company had operating
income of $2,729 as compared to a 1993 operating loss of $1,092, an
improvement of $3,821. The improvement is principally attributable to
synergies from the Unistar acquisition and reductions in expenses partially
offset by one-time restructuring costs and higher depreciation and
amortization.
Interest expense increased $1,533, or 31%, to $6,534 in 1994
from $5,001 in the first nine months of 1993. The increase is attributable
to higher debt levels as a result of the purchase of Unistar, partially
offset by lower interest due to the conversion of the Company's Senior
Debentures to Common Stock.
Loss from continuing operations decreased $2,473, or 41%, to
$3,575 ($.12 per share) in the first nine months of 1994 from $6,048 ($.40
per share) in the first nine months of 1993. Loss per share from continuing
operations decreased 70% due to a 92% increase in the weighted average number
of shares outstanding. The increase in weighted average shares was
principally attributable to the conversion of Senior Debentures to the
Company's Common Stock and the sale of 5,000 shares of Common Stock to a
subsidiary of Infinity.
In connection with the refinancing of its senior debt
facility, the Company in the first quarter of 1994 recorded an extraordinary
loss of $590 ($.02 per share).
The net loss for the first nine months of 1994 was $4,165
($.14 per share) as compared to $16,780 ($1.12 per share) for the first nine
months of 1993. On a pro forma basis, assuming the new accounting principle
was applied effective the beginning of the periods presented, the Company's
net loss would have been $4,165 ($.14 per share) and $16,227 ($1.08 per share)
in the first nine months of 1994 and 1993, respectively.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At September 30, 1994, the Company's cash and cash equivalents
were $1,284, an increase of $1,170 from December 31, 1993. In addition, the
Company had available borrowings under its Loans of $15,000.
For the nine months ended September 30, 1994 versus the
comparable prior year period, net cash from operating activities decreased
$4,870, principally due to working capital requirements resulting from the
acquisition of Unistar. Net cash used for investing activities was $109,934
in 1994 principally due to the purchase of Unistar in 1994.
In the first quarter of 1994, the Company entered into a new
senior loan agreement with a syndicate of banks which was comprised of a
$15,000 revolving facility and $110,000 in term loans which mature on
November 30, 2001. In addition, the Company sold 5,000 shares of
-13-
<PAGE>
<PAGE>
Common Stock and a warrant to purchase up to an additional 3,000 shares
of Common Stock at an exercise price of $3.00 per share (subject to certain
vesting conditions) to a subsidiary of Infinity for $15,000. Proceeds from
the loans and Common Stock sale were used to finance the acquisition of
Unistar ($101,300), repay borrowings outstanding under its previous senior
debt agreement ($8,841) and for working capital. In addition, from December
1993 through March 1993, holders of approximately $31,058 of the Company's
Senior Debentures converted their debentures to Common Stock. In August 1994,
the Company prepaid $5,000 on its term loans which mature on November 30,
2001. At September 30, 1994, the outstanding balance of the Company's term
loans were $105,000.
Management believes that the Company's cash, available
borrowings and anticipated cash flow from operations will be sufficient to
finance current and forecasted operations.
-14-
<PAGE>
<PAGE>
PART II OTHER INFORMATION
Items 1 through 3
- -----------------
These items are not applicable.
Item 4 - Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
(a) The Annual Meeting of Shareholders of the
Company was held on August 18, 1994.
(b) The matters voted upon and the related voting
results were as follows (holders of Common
Stock and Class B stock voted together on all
matters except for the election of David L.
Dennis as Class II Director, for which holders
of Common Stock voted alone):
1) Election of Class II Directors:
<TABLE>
Arthur E. Levine Farid Suleman David L. Dennis
________________ _____________ _______________
<S> <C> <C> <C>
FOR 44,201,626 44,481,826 26,902,926
WITHHELD 458,731 178,531 172,931
</TABLE>
2) Approval of amendments to the Amended 1989
Stock Incentive Plan:
<TABLE>
<S> <C> <C>
FOR 32,322,406 81.8%
AGAINST 7,183,918 18.2%
ABSTAIN 44,085 -
NOT VOTED 5,109,948 -
</TABLE>
3) Approval of the incentive compensation
provision of the employment agreement
between the Company and its Chairman of
the Board:
<TABLE>
<S> <C> <C>
FOR 43,635,147 99.1%
AGAINST 375,853 .9%
ABSTAIN 38,529 -
NOT VOTED 610,828 -
</TABLE>
4) Ratification of the selection of Price
Waterhouse as the independent accountants
of the Company for fiscal 1994:
<TABLE>
<S> <C> <C>
FOR 44,621,912 99.9%
AGAINST 29,038 .1%
ABSTAIN 9,407 -
</TABLE>
-15-
<PAGE>
<PAGE>
Item 5
- ------
Not Applicable.
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
--------
27. Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
On September 15, 1994 the Company filed a Form
8-K dated August 31, 1994 for the purpose of
changing its fiscal year.
-16-
<PAGE>
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
WESTWOOD ONE, INC.
By: FARID SULEMAN
----------------------
FARID SULEMAN
Chief Financial Officer
Dated: November 4, 1994
-17-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 1,284
<SECURITIES> 0
<RECEIVABLES> 31,572<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 40,427
<PP&E> 17,044<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 256,339
<CURRENT-LIABILITIES> 32,998
<BONDS> 117,943
<COMMON> 310<F3>
0
0
<OTHER-SE> 94,164
<TOTAL-LIABILITY-AND-EQUITY> 256,339
<SALES> 0
<TOTAL-REVENUES> 98,694<F4>
<CGS> 0
<TOTAL-COSTS> 76,532<F5>
<OTHER-EXPENSES> 19,433<F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,534
<INCOME-PRETAX> (3,575)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,575)
<DISCONTINUED> 0
<EXTRAORDINARY> (590)
<CHANGES> 0
<NET-INCOME> (4,165)
<EPS-PRIMARY> (.14)
<EPS-DILUTED> (.14)
<FN>
<F1> REFLECTED NET OF THE ALLOWANCE FOR DOUBTFUL ACCOUNTS.
<F2> REFLECTED NET OF ACCUMULATED DEPRECIATION AND AMORTIZATION.
<F3> COMPRISED OF COMMON STOCK AND CLASS B STOCK.
<F4> COMPRISED OF NET REVENUES.
<F5> COMPRISED OF OPERATING COSTS AND EXPENSES EXCLUDING
DEPRECIATION AND AMORTIZATION.
<F6> COMPRISED OF DEPRECIATION AND AMORTIZATION, CORPORATE GENERAL
AND ADMINISTRATIVE EXPENSES, AND RESTRUCTURING COSTS.
</FN>
</TABLE>
