Arbitron Inc. Reports 2001 Fourth Quarter and Year End Financial Results; 10% Increase in Annual Revenue.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 24, 2002 Arbitron Arbitron (NYSE: ARB) is a radio audience research company in the United States which collects listener data on radio audiences similar to that collected by Nielsen Media Research on television audiences. Inc. (NYSE NYSE See: New York Stock Exchange : ARB) today announced results for the fourth quarter and year ended December December: see month. 31, 2001. For the fourth quarter, the Company reported revenue of $51.4 million, an increase of 9.0% over revenue of $47.2 million during the fourth quarter of 2000. Earnings before interest and taxes In financial and business accounting, earnings before interest and taxes (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses.[1] EBIT = Operating Revenue – Operating Expenses + Non-operating Income (EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ) for the quarter were $9.3 million, compared with EBIT of $11.9 million during the same period last year. Net income for the quarter was $2.6 million, compared with $7.2 million for the fourth quarter of 2000. Cost and expenses were higher than last year because of increased spending related to the RADAR radar, system or technique for detecting the position, movement, and nature of a remote object by means of radio waves reflected from its surface. Although most radar units use microwave frequencies, the principle of radar is not confined to any particular frequency (R) service, Webcast measurement, the Portable People Meter The Portable People Meter (sometimes mistakenly "Personal People Meter") or PPM, is a device developed by Arbitron to measure how many people are listening (or at least exposed) to individual radio stations and television stations, including cable TV. initiative, royalties Not to be confused with Royal family. Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. , data collection, and research and development. Interest expense related to the debt incurred in connection with the reverse spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. from Ceridian Ceridian Corporation NYSE: CEN is an information services company in the human resources, transportation and retail markets. It is a publicly traded company on the New York Stock Exchange. The current Chairman of the Board is L. White Matthews, III. on March 30, 2001 also contributed to the year over year increase. Net income per share for the quarter was $.09 (basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ), compared with $.25 (basic) and $.24 (diluted) per share during the comparable period last year. The 2000 earnings per share amounts have been adjusted to reflect the one-for-five reverse split, which became effective following Arbitron's reverse spin-off from Ceridian on March 30, 2001. For the year ended December 31, 2001, revenue was $227.5 million, an increase of 10.0% over revenue of $206.8 million reported for the same period last year. EBIT was $75.5 million, compared to $74.8 million during the same period last year. Net income was $36.5 million, or $1.25 per share (basic) and $1.24 per share (diluted), compared with $45.3 million, or $1.56 per share (basic) and $1.54 per share (diluted), last year. The decline in net income as compared to 2000 is the result of the interest expense related to the $250.0 million in debt incurred at consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the reverse spin-off. In announcing the results, Stephen Morris
Stephen Morris (born Stephen Paul David Morris, 28 October 1957 in Macclesfield, Cheshire, England) is a musician in the Manchester based , president and chief executive officer of Arbitron said, "A weaker-than-expected economic environment caused a slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in new sales during the fourth quarter. Despite this challenge, we succeeded in generating double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. revenue growth for the year. Our core business, exclusive of the RADAR service, which we acquired at the beginning of the third quarter, grew by 8.2% and we believe remains well positioned for further growth. We continue to explore acquisitions that can expand our existing market presence and add value for our customers." Mr. Morris continued, "In the nine months since our reverse spin, Arbitron has made significant progress in the development of the Portable People Meter, our new audience measurement technology. We have also expanded our national radio ratings services Ratings Service A company, such as Moody's or Standard & Poor's, that rates various debt and preferred stock issues for safety of payment of principal, interest, or dividends. through the acquisition of RADAR, and increased our international presence with our ratings contracts in Mexico City Mexico City Spanish Ciudad de México City (pop., 2000: city, 8,605,239; 2003 metro. area est., 18,660,000), capital of Mexico. Located at an elevation of 7,350 ft (2,240 m), it is officially coterminous with the Federal District, which occupies 571 sq mi ." About Arbitron Arbitron Inc. (NYSE: ARB) is an international media and marketing research firm serving radio broadcasters, cable companies, advertisers, advertising agencies and outdoor advertising companies in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . Arbitron's core businesses are measuring
network and local market radio audiences across the United States;
surveying the retail, media and product patterns of local market
consumers; and providing application software used for analyzing media
audience and marketing information data. Arbitron Webcast Services
measures the audiences of audio and video content on the Internet InternetPublicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , commonly known as webcasts. The Company is developing the Portable People Meter, a new technology for radio, TV and cable ratings. Arbitron's marketing and business units are supported by a world-renowned world-re·nowned adj. Widely known and acclaimed. research and technology organization located in Columbia, Maryland Columbia is a census-designated place and planned community in Howard County, Maryland, United States. It is a suburb of Baltimore, and, to a lesser degree, Washington, DC. It began with the idea that a city could enhance its residents' quality of life. . Arbitron has approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 800 full-time full-time adj. Employed for or involving a standard number of hours of working time: a full-time administrative assistant. full employees; its executive offices are located in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . Through its Scarborough Scarborough, town (1991 pop. 36,665) and district, North Yorkshire, NE England, on the North Sea. The town, primarily a resort, is also an important conference and retirement center. The area was recognized at an early time for its strategic location. Research joint venture with VNU VNU Volontaires des Nations Unies (French) VNU Verenigde Nederlandse Uitgeversbedrijven (Dutch) VNU Virtual Network User Media Measurement & Information, Arbitron also provides media and marketing research services to the broadcast television, magazine, newspaper and online industries. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The statements regarding Arbitron in this release that are not historical in nature, particularly those that utilize terminology The terminology used in the computer and telecommunications field adds tremendous confusion not only for the lay person, but for the technicians themselves. What many do not realize is that terms are made up by anybody and everybody in a nonchalant, casual manner without any regard or such as "may," "will," "should," "likely," "expects," "anticipates," "estimates," "believes" or "plans," or comparable terminology, are forward-looking statements based on current expectations about future events, which Arbitron has derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from the information currently available to it. These forward-looking statements involve known and unknown risks and uncertainties that may cause our results to be materially different from results implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in such forward-looking statements. These risks and uncertainties include whether we will be able to: - realize the benefits we expect to achieve from our spin-off from Ceridian Corporation; - renew contracts with large customers as they expire; - successfully execute our business strategies, including timely implementation of our Portable People Meter and our Webcast Ratings services, as well as expansion of international operations; - effectively manage the impact of further consolidation in the radio industry; and - keep up with rapidly changing technological needs of our customer base, including creating new products and services that meet these needs. Additional important factors known to Arbitron that could cause forward-looking statements to turn out to be incorrect are identified and discussed from time to time in Arbitron's filings with the Securities and Exchange Commission, including in particular the risk factors discussed under the caption "ITEM 1. BUSINESS - Business Risks" in our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , which discussion is incorporated herein by reference. The forward-looking statements contained in this release speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and Arbitron undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise. RADAR(R) is a registered trademark of Arbitron Inc.
Arbitron Inc.
Consolidated Statements of Income Three
Months Ended December 31, 2001 and 2000
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
December 31, $ %
2001 2000 Variance Variance
Revenue $51,447 $47,198 $4,249 9.0%
Costs and expenses
Cost of revenue 24,237 22,408 1,829 8.2%
Selling, general
and administrative 13,928 12,451 1,477 11.9%
Research and
development 7,881 3,608 4,273 118.4%
Total costs and
expenses 46,046 38,467 7,579 19.7%
Operating income 5,401 8,731 (3,330) (38.1%)
Equity in net
income of
affiliate 3,859 3,124 735 23.5%
Earnings before
interest and
income taxes 9,260 11,855 (2,595) (21.9%)
Interest income 225 - 225 -
Interest expense (5,191) - (5,191) -
Earnings before
income taxes 4,294 11,855 (7,561) (63.8%)
Income tax expense 1,697 4,683 (2,986) (63.8%)
Net income $2,597 $7,172 $(4,575) (63.8%)
Net income per
weighted average
common share (a)
Basic $0.09 $0.25 $(0.16) (64.0%)
Diluted $0.09 $0.24 $(0.15) (62.5%)
Weighted average
shares used
in calculations
(in thousands)
Basic 29,182 29,140
Diluted 29,701 29,492
Other data (b)
EBITDA $10,721 $12,932 $(2,211) (17.1%)
(a) The computations of basic and diluted net income per common share
for the three month period ended December 31, 2001 are based on
Arbitron's weighted average shares of common stock and potentially
dilutive securities outstanding, respectively. For the period
ended December 31, 2000, the net income per weighted average
common share computations are pro forma computations based upon
Ceridian's weighted average number of shares of Ceridian common
stock and potentially dilutive securities outstanding. In November
2000, Ceridian's board of directors approved a one-for-five
reverse stock split, which was effective immediately after the
spin-off. Pro forma net income per common share and weighted
average common shares outstanding presented herein have been
adjusted to reflect this reverse stock split. The diluted weighted
average common shares amounts assume that all of Ceridian's
historical dilutive securities were converted into Arbitron
securities.
(b) EBITDA is presented as supplemental information that management of
Arbitron believes may be useful to some investors in evaluating
Arbitron because it is widely used as a measure of evaluating a
company's operating performance before debt expense, as well as to
evaluate its operating cash flow. Interest expense and income tax
expense are added back to net income to arrive at EBIT. EBITDA is
calculated by adding back to EBIT depreciation and amortization on
property and equipment, amortization of goodwill and other
intangible assets and asset impairment charges. EBITDA should not
be considered a substitute either for net income, as an indicator
of Arbitron's operating performance, or for cash flows, as a
measure of Arbitron's liquidity. In addition, because EBITDA is
not calculated identically by all companies, the presentation here
may not be comparable to other similarly titled measures of other
companies.
Arbitron Inc.
Consolidated Statements of Income
Year Ended December 31, 2001 and 2000
(Dollars in thousands, except per share data)
(Unaudited)
Year Ended
December 31, $ %
2001 2000 Variance Variance
Revenue $227,534 $206,791 $20,743 10.0%
Costs and expenses
Cost of revenue 82,589 75,694 6,895 9.1%
Selling, general
and administrative 49,553 45,641 3,912 8.6%
Research and
development 24,131 14,038 10,093 71.9%
Total costs and
expenses 156,273 135,373 20,900 15.4%
Operating income 71,261 71,418 (157) (0.2%)
Equity in net
income of
affiliate 4,285 3,397 888 26.1%
Earnings before
interest and
income taxes 75,546 74,815 731 1.0%
Interest income 838 - 838 -
Interest expense (16,117) - (16,117) -
Earnings before
income taxes 60,267 74,815 (14,548) (19.4%)
Income tax expense 23,805 29,552 (5,747) (19.4%)
Net income $36,462 $45,263 $(8,801) (19.4%)
Net income per
weighted average
common share (a)
Basic $1.25 $1.56 $(0.31) (19.9%)
Diluted $1.24 $1.54 $(0.30) (19.5%)
Weighted average
shares used
in calculations
(in thousands)
Basic 29,164 29,046
Diluted 29,483 29,347
Other data (b)
EBITDA $80,572 $79,055 $1,517 1.9%
(a) The computations of basic and diluted net income per common share
for the year ended December 31, 2001 are based upon Ceridian's
weighted average shares of common stock and potentially dilutive
securities outstanding through March 31, 2001, adjusted for the
one-for-five reverse stock split, and Arbitron's weighted average
shares of common stock and potentially dilutive securities
outstanding for the remainder of the year. For the year ended
December 31, 2000, the pro forma net income per weighted average
common share computations are based upon Ceridian's weighted
average number of shares of Ceridian common stock and potentially
dilutive securities outstanding, adjusted for the one-for-five
reverse stock split. In November 2000, Ceridian's board of
directors approved a one-for-five reverse stock split, which was
effective immediately after the spin-off. Pro forma net income per
common share and weighted average common shares outstanding
presented herein have been adjusted to reflect this reverse stock
split. The diluted weighted average common shares amounts assume
that all of Ceridian's historical dilutive securities were
converted into Arbitron securities.
(b) EBITDA is presented as supplemental information that management of
Arbitron believes may be useful to some investors in evaluating
Arbitron because it is widely used as a measure of evaluating a
company's operating performance before debt expense, as well as to
evaluate its operating cash flow. Interest expense and income tax
expense are added back to net income to arrive at EBIT. EBITDA is
calculated by adding back to EBIT depreciation and amortization on
property and equipment, amortization of goodwill and other
intangible assets and asset impairment charges. EBITDA should not
be considered a substitute either for net income, as an indicator
of Arbitron's operating performance, or for cash flows, as a
measure of Arbitron's liquidity. In addition, because EBITDA is
not calculated identically by all companies, the presentation here
may not be comparable to other similarly titled measures of other
companies.
Arbitron Inc.
Condensed Balance Sheets
December 31, 2001 and December 31, 2000
(Dollars in thousands)
(Unaudited)
December 31,
2001 2000
Assets:
Cash and cash
equivalents $21,043 $3,540
Trade receivables 19,393 19,017
Deferred taxes 28,342 51,077
Goodwill, net 28,937 12,160
Other assets 29,126 22,082
Total assets $126,841 $107,876
Liabilities and
Stockholders' Equity
(Deficit):
Deferred revenue $52,993 $47,833
Long-term debt 205,000 -
Other liabilities 37,957 26,821
Stockholders' equity
(deficit) (c) (169,109) 33,222
Total liabilities
and stockholders'
equity (deficit) $126,841 $107,876
(c) Prior to the spin-off from Ceridian Corporation, Arbitron
distributed its earnings to Ceridian. Those distributions,
together with a $250 million distribution made to Ceridian on the
date of the spin-off, gave rise to the stockholders' deficit.
Proceeds from the issuance of long-term debt were used by Arbitron
to make the $250 million distribution.
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