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 March 31, 1995 Commission 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 April 18, 1995 31,111,402 shares of Common Stock were outstanding and
351,733 shares of Class B Stock were outstanding.
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WESTWOOD ONE, INC.
INDEX
<TABLE>
PART I. FINANCIAL INFORMATION: Page No.
________
<C> <C>
Consolidated Balance Sheets 3
Consolidated Statements of Income 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 7
PART II. OTHER INFORMATION 9
SIGNATURES 10
</TABLE>
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WESTWOOD ONE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
_________ ___________
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 10,015 $ 2,439
Accounts receivable, net of allowance for doubtful accounts 28,815 37,631
Other current assets 5,981 6,087
_________ _________
Total Current Assets 44,811 46,157
PROPERTY AND EQUIPMENT, NET 16,223 16,748
INTANGIBLE ASSETS, NET 189,570 191,287
OTHER ASSETS 5,341 5,920
_________ _________
TOTAL ASSETS $255,945 $260,112
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 20,100 $ 18,750
Accrued expenses and other liabilities 13,833 14,722
Current maturities of long-term debt 6,250 5,000
_________ _________
Total Current Liabilities 40,183 38,472
LONG-TERM DEBT 111,693 115,443
OTHER LIABILITIES 10,208 10,743
_________ _________
TOTAL LIABILITIES 162,084 164,658
_________ _________
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY
Preferred stock: authorized 10,000,000 shares, none outstanding - -
Common stock, $.01 par value: authorized, 117,000,000 shares;
issued and outstanding, 31,052,652 (1995) and 30,652,652 (1994) 311 307
Class B stock, $.01 par value: authorized, 3,000,000 shares:
issued and outstanding, 351,733 (1995 and 1994) 4 4
Additional paid-in capital 160,622 159,727
Accumulated deficit (67,076) (64,584)
_________ _________
TOTAL SHAREHOLDERS' EQUITY 93,861 95,454
_________ _________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $255,945 $260,112
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
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WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
___________________
1995 1994
____ ____
<S> <C> <C>
GROSS REVENUES $36,603 $30,414
Less Agency Commissions 5,182 4,362
________ ________
NET REVENUES 31,421 26,052
________ ________
Operating Costs and Expenses Excluding
Depreciation and Amortization 26,931 23,803
Depreciation and Amortization 3,227 4,232
Corporate General and Administrative Expenses 1,218 1,234
Restructuring Costs - 2,405
________ ________
31,376 31,674
________ ________
OPERATING INCOME (LOSS) 45 (5,622)
Interest Expense 2,637 1,846
Other Income (100) (52)
________ ________
LOSS BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM (2,492) (7,416)
INCOME TAXES - -
________ ________
LOSS BEFORE EXTRAORDINARY ITEM (2,492) (7,416)
EXTRAORDINARY ITEM - LOSS ON RETIREMENT OF DEBT - (590)
________ ________
NET LOSS ($2,492) ($8,006)
======== ========
LOSS PER SHARE:
Loss Before Extraordinary Item ($ .08) ($ .29)
Extraordinary Item - ( .03)
________ ________
Net Loss ($ .08) ($ .32)
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
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WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
____________________
1995 1994
____ ____
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss ($2,492) ($8,006)
Adjustments to reconcile net loss to net cash provided by operating
activities before cash payments related to extraordinary item:
Depreciation and amortization 3,227 4,232
Extraordinary item - loss on retirement of debt - 590
Other (21) 251
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 8,816 (4,413)
Increase in prepaid assets (119) (169)
Increase in accounts payable and accrued liabilities 127 4,686
________ ________
Net cash from (used by) operating activities before cash payments
related to extraordinary item 9,538 (2,829)
Cash payments related to extraordinary item - (250)
________ ________
Net Cash Provided By (Used For) Operating Activities 9,538 (3,079)
________ ________
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of companies (Unistar in 1994) (195) (105,355)
Capital expenditures (184) (155)
Cash payments related to disposition of discontinued operations (6) (268)
Other (principally deferred financing costs in 1994) 24 (1,835)
________ _________
Net Cash Used For Investing Activities (361) (107,613)
________ _________
CASH PROVIDED (USED) BEFORE
FINANCING ACTIVITIES 9,177 (110,692)
________ _________
CASH FLOW FROM FINANCING ACTIVITIES:
Debt repayments (2,500) (9,515)
Borrowings under debt arrangements - 110,000
Issuance of common stock 899 14,982
________ _________
NET CASH FROM (USED IN) FINANCING ACTIVITIES (1,601) 115,467
________ _________
NET INCREASE IN CASH AND CASH EQUIVALENTS 7,576 4,775
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD2, 439 114
________ _________
CASH AND CASH EQUIVALENTS AT END OF PERIOD $10,015 $4,889
======== =========
</TABLE>
See accompanying notes to consolidated financial statements.
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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 March 31, 1995, the
consolidated statements of operations and the consolidated statements of cash
flows for the three month periods ended March 31, 1995 and 1994 are unaudited,
but in the opinion of management include 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 of Form 10-K, filed with the Securities and Exchange
Commission.
NOTE 2 - Earnings Per Share:
___________________________
Net loss per share is computed based upon the weighted average number of
shares outstanding of 31,187 and 25,271 for the three month periods ended
March 31, 1995 and 1994, respectively.
NOTE 3 - Revolving Credit Facilities and Long-Term Debt:
_______________________________________________________
In addition to its long-term debt, the Company has a $15,000 secured
revolving credit facility ("Revolver"). At March 31, 1995, the Company did
not have any borrowings outstanding under the Revolver.
In April 1995, the Company amended its senior loan agreement with a
syndicate of banks to allow for the prepayment of principal payments due
August 31, 1996 and prior and to permit the company to repurchase up to $15
million of its common stock prior to December 31, 1996. On April 21, 1995,
the Company prepaid $6,250 of its Term Loans, resulting in an outstanding
balance of $96,250. Accordingly, the next scheduled principal payment on the
Term Loans will be due on May 31, 1996.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
_____________________________________________
(In thousands, except per share amounts)
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.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995 COMPARED
WITH THREE MONTHS ENDED MARCH 31, 1994
_________________________________________
Westwood One derives substantially all of its revenue from the sale of
advertising time to advertisers. Net revenue, which is seasonally low in the
Company's first fiscal quarter, increased 21% to $31,421 in the first quarter
of 1995 from $26,052 in the comparable prior year quarter. The increase in
net revenue was primarily a result of the purchase of Unistar in February
1994.
Operating costs and expenses excluding depreciation and amortization
increased 13% to $26,931 in the first fiscal quarter of 1994 from $23,803 in
the first quarter of 1994. The increase was primarily attributable to the
purchase of Unistar and higher programming expenses.
Depreciation and amortization decreased 24% to $3,227 in the first
quarter of 1995 from $4,232 in the first quarter of 1994. The decrease is
principally attributable to lower amortization of programming costs and
rights, partially offset by higher depreciation and amortization resulting
from the purchase of Unistar in February 1994.
In the first quarter of 1994, the Company accrued restructuring costs of
approximately $2,405 as a result of the purchase of Unistar, principally
relating to consolidations of certain facilities and operations.
The Company had operating income of $45 in the first quarter of 1995 as
compared to an operating loss of $5,622 in the first quarter of 1994, an
improvement of $5,667. The improvement is principally attributable to the
non-recurrence of the 1994 restructuring costs, lower depreciation and
amortization and operating synergies resulting from the acquisition of Unistar
in 1994's first quarter.
Interest expense increased 43% to $2,637 in the first quarter of 1995
from $1,846 in 1994. The increase is principally attributable to higher debt
levels as a result of the purchase of Unistar and higher interest rates in
1995, partially offset by lower interest expense associated with the 1994
conversion of Senior Debentures to Common Stock.
Other income, principally interest income, increased $48 to $100 in the
first quarter of 1995 from $52 in 1994. The increase is attributable to
investing higher cash balances in the first quarter of 1995.
Loss before extraordinary item decreased $4,924, or 66%, to $2,492 ($.08
per share) in the first quarter of 1995 from $7,416 ($.29 per share) in the
first quarter of 1994. The weighted average number of shares outstanding
increased 23% to 31,187 in the first quarter of 1995 from 25,271 in 1994. The
increase in weighted average shares was principally due to the sale of 5,000
shares of Common Stock to a subsidiary of Infinity Broadcasting Corporation
("Infinity") and the partial conversion of Senior Debentures to Common Stock.
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In connection with the refinancing of its senior debt facility in the
first quarter of 1994, the Company recorded an extraordinary loss of $590
($.03 per share).
The net loss in the first quarter of 1995 was $2,492, or $.08 per share.
The first quarter 1994 net loss was $8,006, or $.32 per share.
LIQUIDITY AND CAPITAL RESOURCES
_______________________________
At March 31, 1995, the Company's cash and cash equivalents were $10,015,
an increase of $7,576 from December 31, 1994. In addition, the Company had
available borrowings under its Revolver of $15,000.
For the three months ended March 31, 1995 versus the comparable prior
year, net cash from operating activities increased $12,617, principally as a
result of lower working capital requirements, including receivables. The
Company prepaid $2,500 of Term Loans in the first quarter of 1995.
In April 1995, the Company prepaid $6,250 of Term Loans, thereby
reducing its outstanding balance to $96,250. As a result of the prepayment,
the Company's next scheduled principal payment of its Term Loans will be due
on May 31, 1996.
Management believes that the Company's cash, available borrowings and
anticipated cash flow from operations will be sufficient to finance current
and forecasted operations over the next 12 months.
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<PAGE>
PART II OTHER INFORMATION
Items 1 through 5
_________________
These items are not applicable.
Item 6 - Exhibits and Reports on Form 8-K
_________________________________________
(a) Exhibits
________
27. Financial Data Schedule.
(b) Reports on Form 8-K
___________________
There were no reports on Form 8-K filed for the three months ended
March 31, 1995.
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<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: /s/ FARID SULEMAN
________________________
FARID SULEMAN
Chief Financial Officer
Dated: May 5, 1995
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<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 10,015
<SECURITIES> 0
<RECEIVABLES> 28,815<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 44,811
<PP&E> 16,223<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 255,945
<CURRENT-LIABILITIES> 40,183
<BONDS> 111,693
<COMMON> 315<F3>
0
0
<OTHER-SE> 93,546
<TOTAL-LIABILITY-AND-EQUITY> 255,945
<SALES> 0
<TOTAL-REVENUES> 31,421<F4>
<CGS> 0
<TOTAL-COSTS> 26,931<F5>
<OTHER-EXPENSES> 4,445<F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,637
<INCOME-PRETAX> (2,492)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,492)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,492)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
<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: (A) DEPRECIATION AND AMORTIZATION, AND (B)
CORPORATE GENERAL AND ADMINISTRATIVE EXPENSES.
</FN>
</TABLE>
