Regent Communications beat Wall Street expectations for Q2 and CEO Bill Stakelin says the company is on track to book 100 million bucks in revenues this year. The quarter was led by the company's Lafayette, LA cluster, where revenues were up 11% from a year ago. Albany, NY was up 7% and Evansville, IN was up 6%. Unlike many other radio groups, one strong category for Regent was local auto dealers.
"Over half of the Regent markets saw an increase quarter-to-quarter in advertising of the auto dealers," Stakelin told analysts. What's the secret? After studying the issue, Stakelin says what Regent found was that many local auto dealers are no longer buying as deep, but focusing their ad spending on the top radio franchises in their market. So, where a dealer or their local agency may have bought seven stations in the past, they may only buy three today. Having dominant stations, he said, is helping Regent stay in the ad budgets of the local dealers.
Stakelin insisted that Regent is taking the right steps to build value for its shareholders. Asked in Q&A about the recent request by Riley Investment Management for a special shareholders meeting, Stakelin said the company is "evaluating the latest filings from selected shareholders." Riley, which according to SEC reports has purchased most of its 6.5% Regent stake since March, has been pushing for a sell-off of the company's assets and now wants to elect three members to the board of directors. "You can be sure that our management and board remain committed to maximizing the value for all of our shareholders – those that are short-term, those that have been with us for a very long time, large shareholders, small shareholders," Stakelin said, assuring analysts and investors that Regent management and its legal advisors would give consideration to all shareholder proposals.
Will the good old days ever return?
Noting Regent CEO Bill Stakelin's long career in radio in both large and small markets, plus a stint heading the RAB, CL King analyst Jim Boyle, himself a long time veteran, asked whether, after more than six years of slow-to-no-growth, is this still a cyclical downdraft or a long-term change? Stakelin said the impact of new media has changed the equation, but that online is a big opportunity for radio. "There's gold in them thar hills and we think we're good enough to mine it on behalf of our shareholders," the CEO concluded.
Then Boyle asked Stakelin to predict the future – will radio, long-term, return to a pattern of 1-2% average growth, 3-4% or 5-6%? "I'm still holding out for the 3-4 right now. I think when the larger markets and all of us regain our focus on the fact that this is a local-based, local-driven advertising medium and we get back to the basics of selling our local markets and serving the advertisers and their needs in those markets – be it in Buffalo or Watertown, New York – then I think we will have more control over our own destiny and how we can drive revenues and increase profits," Stakelin said.