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Previous: ATLANTIC GULF COMMUNITIES CORP, 10-Q, 1996-05-15 |
Next: EASTPOINT MALL LTD PARTNERSHIP, 10-Q, 1996-05-15 |
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, 1996 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 May 1, 1996, 31,090,257 shares of Common Stock, excluding 607,395 treasury
shares, were outstanding and 351,733 shares of Class B Stock were outstanding.
1
<PAGE>
WESTWOOD ONE, INC.
------------------
INDEX
-----
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 7
PART II. OTHER INFORMATION 9
SIGNATURES 10
2
<PAGE>
<TABLE>
WESTWOOD ONE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
March 31, December 31,
1996 1995
---- ----
ASSETS
------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 405 $ 256
Accounts receivable, net of allowance for doubtful accounts 32,228 36,591
Other current assets 5,222 5,038
--------- ---------
Total Current Assets 37,855 41,885
PROPERTY AND EQUIPMENT, NET 16,345 15,632
INTANGIBLE ASSETS, NET 205,642 184,441
OTHER ASSETS 5,303 3,637
--------- ---------
TOTAL ASSETS $ 265,145 $ 245,595
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 18,224 $ 20,647
Accrued expenses and other liabilities 22,232 14,675
Current maturities of long-term debt 16,250 -
--------- ---------
Total Current Liabilities 56,706 35,322
LONG-TERM DEBT 106,693 107,943
OTHER LIABILITIES 7,642 8,207
--------- ---------
TOTAL LIABILITIES 171,041 151,472
--------- ---------
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, 31,628,749 (1996) and 31,507,027 (1995) 317 315
Class B stock, $.01 par value: authorized, 3,000,000 shares:
issued and outstanding, 351,733 (1996 and 1995) 4 4
Additional paid-in capital 158,166 157,547
Accumulated deficit (55,539) (54,899)
--------- ---------
102,948 102,967
Less treasury stock, at cost; 607,395 shares (1996 and 1995) (8,844) (8,844)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 94,104 94,123
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 265,145 $ 245,595
========= =========
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended
March 31,
------------------
1996 1995
---- ----
<S> <C> <C>
GROSS REVENUES $39,189 $ 36,603
Less Agency Commissions 5,341 5,182
-------- --------
NET REVENUES 33,848 31,421
-------- --------
Operating Costs and Expenses Excluding
Depreciation and Amortization 28,411 26,931
Depreciation and Amortization 2,844 3,227
Corporate General and Administrative Expenses 1,263 1,218
-------- --------
32,518 31,376
-------- --------
OPERATING INCOME 1,330 45
Interest Expense 2,051 2,637
Other Income ( 82) ( 100)
-------- --------
LOSS BEFORE INCOME TAXES ( 639) ( 2,492)
INCOME TAXES - -
-------- --------
NET LOSS ($ 639) ($2,492)
======== ========
NET LOSS PER SHARE ($ .02) ($ .08)
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING 31,307 31,187
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
<TABLE>
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
March 31,
---------
1996 1995
---- ----
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss ($ 639) ($ 2,492)
Adjustments to reconcile net loss to net cash provided by operating
activities before cash payments related to extraordinary item:
Depreciation and amortization 2,844 3,227
Other 74 (21)
Changes in assets and liabilities:
Decrease in accounts receivable 8,608 8,816
Increase in prepaid assets (2,285) (119)
Increase (decrease) in accounts payable and accrued liabilities (3,549) 127
-------- --------
Net Cash Provided By Operating Activities 5,053 9,538
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of companies (Shadow Traffic in 1996) (20,097) (195)
Capital expenditures (322) (184)
Cash payments related to disposition of discontinued operations (10) (6)
Other (96) 24
-------- --------
Net Cash Used For Investing Activities (20,525) (361)
-------- --------
CASH PROVIDED (USED) BEFORE
FINANCING ACTIVITIES (15,472) 9,177
-------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
Debt repayments -- (2,500)
Borrowings under debt arrangements 15,000 --
Issuance of common stock 621 899
-------- --------
NET CASH FROM (USED IN) FINANCING ACTIVITIES 15,621 (1,601)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 149 7,576
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 256 2,439
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 405 $ 10,015
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<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 March 31, 1996, the
consolidated statements of operations and the consolidated statements of cash
flows for the three month periods ended March 31, 1996 are unaudited, but in the
opinion of management include all 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 - EARNINGS PER SHARE:
- ----------------------------
Net loss per share is computed based upon the weighted average number
of shares outstanding of 31,307 and 31,187 for the three month periods ended
March 31, 1996 and 1995, respectively.
NOTE 3 - DEBT:
- --------------
In March 1996, the Company borrowed an additional $15,000 under its
bank revolving credit facility (the "Facility") to complete its acquisition of
the operating assets of Shadow Traffic (see Note 4). At March 31, 1996 the
Company had outstanding borrowings of $107,500. In April the Company repaid
$1,250 of the Facility in accordance with its terms. The Company is currently in
negotiations with its lenders to amend its Facility.
NOTE 4 - ACQUISITION OF SHADOW TRAFFIC:
- ---------------------------------------
On March 1, 1996, the Company through its wholly-owned subsidiary
Westwood One Broadcasting Services Inc. acquired the operating assets of New
York Shadow Traffic Limited Partnership, Chicago Shadow Traffic Limited
Partnership, Los Angeles Shadow Traffic Limited Partnership and Philadelphia
Express Traffic Limited Partnership (collectively "Shadow Traffic") for $20,000
plus expenses, subject to an adjustment based on the future cash flow of Shadow
Traffic. The acquisition was accounted for as a purchase, and accordingly,
Shadow Traffic's operating results are included with those of the Company from
the date of acquisition. The purchase price has been allocated to the assets and
liabilities acquired based on preliminary estimates of their respective fair
values. The intangible assets acquired as part of the purchase are being
amortized over 15 years.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
On March 1, 1996 the Company acquired the operating assets of Shadow
Traffic. The acquisition was accounted for as a purchase and accordingly, Shadow
Traffic's operating results are included with those of the Company from the date
of acquisition.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 COMPARED
WITH THREE MONTHS ENDED MARCH 31, 1995
--------------------------------------
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 8% to $33,848 in the first quarter of
1996 from $31,421 in the comparable prior year quarter. The increase in net
revenue was primarily due to higher advertising rates for the Company's programs
as well as the acquisition of Shadow Traffic.
Operating costs and expenses excluding depreciation and amortization
increased 6% to $28,411 in the first fiscal quarter of 1996 from $26,931 in the
first quarter of 1995. The increase was primarily attributable to the
acquisition of Shadow Traffic, partially offset by lower station compensation
expenses.
Depreciation and amortization decreased 12% to $2,844 in the first
quarter of 1996 from $3,227 in the first quarter of 1995. The decrease is
principally attributable to lower amortization of programming costs and rights,
partially offset by higher depreciation and amortization associated with the
acquisition of Shadow Traffic.
Operating income increased $1,285 to $1,330 in the first quarter of
1996 from $45 in the first quarter of 1995. The improvement is principally
attributable to lower costs and depreciation and amortization from the Company's
network radio operations.
Interest expense decreased 22% to $2,051 in the first quarter of 1996
from $2,637 in 1995. The decrease is principally attributable to lower debt
levels and interest rates.
The net loss decreased $1,853, or 74%, to $639 ($.02 per share) in the
first quarter of 1996 from $2,492 ($.08 per share) in the first quarter of 1995.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At March 31, 1996, the Company's cash and cash equivalents were $405,
an increase of $149 from December 31, 1995.
For the three months ended March 31, 1996 versus the comparable prior
year period, net cash from operating activities decreased $4,485, principally as
a result of reducing accounts payable and accrued liabilities.
In March 1996, the Company borrowed $15,000 on its revolving credit
facility (the "Facility") to complete the acquisition of Shadow Traffic.
Accordingly, the outstanding debt on the Facility was $107,500 at March 31,
1996. In April 1996, the Company repaid $1,250 of the Facility in accordance
with its terms, thereby reducing its outstanding balance to $106,250.
Management believes that the Company's cash and anticipated cash flow
from operations will be sufficient to finance current and forecasted operations
over the next 12 months.
8
<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, 1996.
9
<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: May 15, 1996
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 405
<SECURITIES> 0
<RECEIVABLES> 32,228<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 37,855
<PP&E> 16,345<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 265,145
<CURRENT-LIABILITIES> 56,706
<BONDS> 106,693
0
0
<COMMON> 321<F3>
<OTHER-SE> 93,783
<TOTAL-LIABILITY-AND-EQUITY> 265,145
<SALES> 0
<TOTAL-REVENUES> 33,848<F4>
<CGS> 0
<TOTAL-COSTS> 28,411<F5>
<OTHER-EXPENSES> 4,107<F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,051
<INCOME-PRETAX> (639)
<INCOME-TAX> 0
<INCOME-CONTINUING> (639)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (639)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
<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>
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