Westwood One had a tough Q1, but CEO Tom Beusse says he’s busy fixing things there for a better future—especially with some of the new hires on the way and new capital recently raised. Revenue for Q1 2008 decreased 7.4 million, or 6.5%, to 106.6 million compared with 114.0 million in 2007. Beusse said the decrease in revenue is primarily attributable to lower audience and inventory levels, a reduction in the size of sales force and increased competition. In Q1 they experienced revenue declines in both the National and Local/regional areas of the business, with National revenue declining 2.4% and Local/regional revenue decreasing 11.2%. The decrease in National revenue was principally attributable to a reduction in RADAR rated network inventory resulting from affiliates experiencing audience declines, lower barter revenue related to programming agreements and planned reductions in affiliate compensation, partially offset by revenue generated from new program launches.
Operating loss in Q1 increased 10.3 million to 3.0 million from operating income of 7.3 million in Q1 2007. The higher loss is principally attributable to lower revenue and higher special charges, partially offset by the elimination of warrant amortization attributable to the CBS Radio warrants that were cancelled as part of the new CBS Radio arrangement and a reduction in operating costs.
Net loss for the first quarter was 5.3 million, or 0.06 per diluted common share, compared with net income in last year’s first quarter of 0.7 million, or 0.01 per diluted common share.
In the conference call yesterday, Beusse said in the quarter they completed some significant accomplishments—including completing their separation from CBS Radio, while ensuring long-term distribution of programming on their stations. They also raised 25 million in capital from the Gores Group from selling common stock. They are also looking to raise another 75 million in preferred stock. “These were two extremely important gates to clear in realizing our future.”
In commenting about the down numbers for the quarter, Beusse said while he’s not pleased that that the Q1 revenue declined, “we did experience topline growth in the television portion of our business, an exclusive of the effect of barter revenue through the topline of our network business for the first time in about three years. Our local-regional radio product offerings continue to be challenged by a weak economic client and had a particularly large impact on the automotive, banking and real estate categories, to name a few. We’re only just beginning to review our sales staff structure with an eye toward achieving appropriate coverage in the marketplace—and we will return to that soon.”
Beusse also mentioned from his last call that he would be hiring the best in-class in talent going forward and would be adding to his advertising and affiliate sales staffs. “Over the past few months I have attracted…top flight executives to Westwood One.”
For example, he noted, among others, “Andrew Hersam will be joining the company 5/12 as our Chief Revenue Officer. He will be reorganizing our sales force and leading our sales efforts across all media platforms. He’s the first person to ever oversee all sales—local and national—in an effort to harness greater leverage in the market…”
WWO expects 2008 revenue to increase low single digits and adjusted EBITDA to decrease 15% – 20% as a result of making strategic investments in their core business.