In the face of the well-known headwinds shivering the radio business in particular and the economy in general, executives at Regent Communications believe that a loss of 1.6% in net broadcast revenue compared Q3 2007 is a pretty good result, and analysts weighing in during the company’s conference call tended to agree. And President/CEO Bill Stakelin noted that if a pair of lucrative NTR events that moved from 3Q in 2008 to 2Q in 2007 is left out of the calculation, the company actually improved by 3%. The company was also able to reduce operating costs by 5.5%. The positive side of the ledger is driven by local and steadily improving interactive business.
"During the third quarter, we outperformed our industry by a wide margin despite a very difficult period for the economy and advertising business," said Stakelin. "We also generated healthy increases in our cash flow, as we intensified our cost management without sacrificing key investment in our content, sales and interactive initiatives. We are benefiting from our focus on building and supporting market-leading station brands and consistently generating results for our advertising partners at the local level. Looking ahead, visibility is limited, but our audience share is strong, our sales teams are working aggressively to attract advertising dollars and we are committed to operating as efficiently as possible."
Overall results were impacted by other events, however, the biggest of which was a pre tax non-cash impairment charge of approximately $67.5M related to the Company’s review of its indefinite-lived intangible assets.
Stakelin noted that advertisers want and need to advertise during this downturn and they realize the value of radio. But clients are more cautious than ever with their advertising expenditures. Nonetheless, nine of 12 Regent markets outperformed last year’s results by most measures.
Looking forward, Stakelin noted that visibility is exceedingly poor, traditional media planning is for the moment is a thing of the past and much business is coming in at the last minute. He expects no changes in this pattern for the next several months.
As for Wall Street, Stakelin noted that it’s all about growth there, and radio just isn’t in a position to provide that for the time being. However, radio remains quite useful on Main Street. And for investors, it still offers value, free cash flow and multiple potential revenue streams.
RBR/TVBR observation: Regent is another group caught in the grip of the economy, but with the good fortune to have its fate tied to smaller markets. Watch for the company to keep a tight rein on its operations and manage its way to the other side of this downturn.