The Radio Network division dragged Citadel Broadcasting down to a 0.7% revenue decline in Q4, although the Radio Markets side was up a pro forma 3.3%. The full year was up 2.2% companywide and CEO Farid Suleman, pictured, was particularly proud of the company’s free cash flow (FCF) growth.
Net revenues for the station group grew 2.3% to $165 million in Q4. However, the company said Q4 revenue was negatively impacted by the nonrenewal of the play-by-play football contract for the NFL Oakland Raiders and the termination of an LMA in Knoxville, TN. Excluding those two situations, Citadel calculated the pro forma revenue gain in Q4 at 3.3%. Segment operating income (SOI) for the stations was up 15.7% for the quarter to $68.8 million.
For the full year radio station revenues were up 4.1% to $629.1 million. The company pegged pro forma growth at 4.5% and noted that while both national and local were up, national was stronger for the year. SOI grew 18.5% to $254.6 million.
Meanwhile, the network business had a down quarter and year. “The decrease in Radio Network revenue was due in part to the elimination of certain unprofitable programs in 2009 and 2010 as well as lower revenue from our news-related radar networks,” was the explanation given in Citadel’s release.
Q4 network revenues fell 14.9% to $27.7 million. SOI was down 17.2% to $4.9 million.
For all of 2010 network revenues were down 6.9% to $115.2 million. However, SOI increased 393% to $17.5 million (from only $3.6 million in 2009) as cost savings far outweighed the impact of lower revenues.
“2010 was clearly an eventful year for the company,” said CEO Suleman in an extremely brief conference call with Wall Street analysts. “The company was able to emerge from bankruptcy in June of 2010 with low leverage and its operations, programming and management substantially intact. As a result, we were able to finish 2010 with our radio stations, which represent over 90% of our profits, increasing revenues by over 4% – and that’s on top of really, our markets outperformed the year before – and increasing our EBITDA to $251 million, or over 28%. Most importantly, we ended up with free cash flow of approximately $170 million, a 77% increase,” he said.
The FCF growth was considerably lower in Q4, as calculated by RBR-TVBR, but still a double-digit percentage gain: up 12.8% to $48.3 million.
Citadel officials declined to take any questions on the pending acquisition by Cumulus and also did not provide any forward financial guidance.
RBR-TVBR observation: Certainly nothing impressive about these results compared to what other radio companies had reported. But the only thing that matters now on Wall Street is the pending acquisition by Cumulus Media, so the only thing that will impact the trading price for Citadel’s stock is whether the stock price for Cumulus is above or below $4.34 per share, since that bears on the cash/stock split of the buyout. Cumulus had slipped below that mark for a while, but recovered and closed Tuesday (3/29) at $4.41.
