President Rod Sherwood proudly reported the first year-over-year quarterly revenue increase for Westwood One since 2005. The company’s Q1 revenues were up 8.1% to $92.8 million, with gains in both the Network Radio and Metro Traffic Divisions.
“In the first quarter of 2010, revenue increased by $6.9 million or 8.1%, from $85.9 million to $92.8 million, which was Westwood One’s first year-over-year quarterly revenue increase since 2005,” said Sherwood. “Revenue increased in both of our businesses, with Network Radio up 8.6% and Metro Traffic up 7.5%, reflecting increased advertising spending both nationally and locally. In addition to reflecting the initial signs of growth in the economy, this increase is also a result of our strategic focus on meeting the needs of our advertising and affiliate customers, and investing in areas with the most potential for revenue growth.”
Looking at adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a key metric for media companies, WW1 reported that adjusted EBITDA improved to $2.1 million from a loss of $6.9 million a year earlier – a positive swing of approximately $9 million.
The company said the improvement was primarily the result of increased advertising revenue and lower operating costs resulting from its cost reduction initiatives.
“The measures we took in 2009 positioned us to take advantage of a recovering economy with a re-structured balance sheet, a strengthened sales force, and strong programming to attract targeted audiences for our advertisers and affiliates, We are beginning to see positive results from our actions, and early pacing for the second quarter is encouraging,” said Sherwood.
For the first three months of 2010, Network Radio revenues increased 8.6% to $55.6 million. Network advertising sales, the largest component of the division’s revenues, increased by 10%. “This resulted primarily from increased sports advertising revenue, including the 2010 Winter Olympics and the NCAA Men’s Basketball Championship and NFL games, as well as new programming for The Weather Channel,” the company said.
Metro Traffic revenues for Q1 gained 7.5% to $37.3 million. “The increase in Metro Traffic revenue was principally related to an increase in revenue from television and radio advertising, primarily in the automotive and quick service restaurant sectors,” said the WW1 announcement.
So, total revenues rose 8.1% to $92.8 million. That was the first quarter for WW1 to report a year-over-year revenue gain since Q2 of 2005.
What’s ahead now that Westwood One has turned the corner?
“We remain cautiously optimistic about growth in advertising spending during 2010. Industry research sources are revising their earlier forecasts slightly upward, but local radio remains at relatively low levels of growth. Magna, a division of IPG’s Mediabrands, forecasts that local radio is expected to grow by 0.6%. Other industry sources forecast increases in local radio of 2%, and network radio of 6%.
Our strategies remain consistent with those stated at the end of 2009. While continuing revenue gains will likely improve our operating leverage, we will continue to make targeted investments in the business to enhance our competitive position in 2010 and beyond. That said, we will continue to evaluate our cost structure to maintain the appropriate levels of liquidity.
We will continue to invest in new programming, while also identifying, and investing in, opportunities for expanded content and distribution in Metro television and digital. We will maintain our focus on improving our infrastructure and we will continue to seek opportunities to complement our organic growth strategy with strategic partnerships and select business development activity like SigAlert,” Westwood One told Wall Street.
RBR-TVBR observation: For a while it seemed that everything that could go wrong did go wrong for Westwood One. Immediately after ending its long-running management/investment arrangement with CBS Radio and bringing on The Gores Group as a major new investor Westwood One found itself in an unprecedented advertising recession dragging down the entire radio industry – and its TV clients as well. One CEO washed out and Sherwood then had to take on the task of restructuring the company’s programming lineup and balance sheet at the same time. It was painful for both employees and shareholders, but all of the changes got done and WW1 is finally looking healthy again.