The company has given Wall Street a preview of its 2008 earnings report set for February 25th. Look for revenues to be down about 4.7% for the full year. And, like so many others, it is taking a big impairment charge – just shy of a billion bucks. Unlike so many others, though, Hearst-Argyle doesn’t have to worry about its leverage ratio.
“The effects of the national recession have been particularly hard felt in the Company’s California, Florida and New England markets, especially in the auto category. This concentrated regional weakness has offset substantial growth in many of the Company’s small to mid-sized markets and the widespread growth in its political revenue category. The Company expects to report 2008 revenue of approximately $720.5 million, a 4.7% decrease from 2007,” Hearst-Argyle said in the advance notice to Wall Street.
“Also as a result of adverse economic conditions, the Company expects to record a non-cash impairment charge of approximately $926 million to reduce the carrying value of intangible assets from $3.2 billion to $2.3 billion. On an after-tax basis, the estimated impairment charge is approximately $570 million. In addition to the impairment charge, the Company expects to incur charges of approximately $13.5 million associated with its cost reduction efforts, including severance, and the write-down of certain investments,” the announcement added.
But Hearst-Argyle is more comfortable than most when it comes to debt. The company said it will report a total debt balance of $791 million, down $136 million from a year earlier. That puts its leverage ratio below four times EBITDA.