Arbitron Inc. Reports 2003 First Quarter Financial Results; First Quarter Revenue up 8.3%; Net Income up 13.2% over 2002; Net Income Per Share Increases 10.4%.Business Editors NEW YORK--(BUSINESS WIRE)--April 17, 2003 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 quarter ended March 31, 2003. For the first quarter 2003, the Company reported revenue of $71.4 million, an increase of 8.3% over revenue of $65.9 million during the first quarter of 2002. 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 $29.9 million, compared with EBIT of $27.6 million during the comparable period last year. Net income for the quarter was $16.1 million, compared with $14.2 million for the first quarter of 2002. Cost and expenses for the first quarter increased by 8.6%, from $37.1 million in 2002 to $40.2 million in 2003. Interest expense for the quarter declined 21.2%, from $4.6 million in 2002 to $3.6 million in 2003, due to reductions in debt between the two periods. Net income per share for the first quarter 2003 increased to $0.53 (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 $0.48 (diluted) during the comparable period last year. Commenting on the results for the first quarter, 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, "In the first quarter of 2003, we met our financial goals for revenue and profitability, a gratifying grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. performance during a period in which global events brought a great deal of last minute uncertainty to the media industry." "We have worked hard to keep our core services-ratings, 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. and software-as valuable, revenue-generating resources for our broadcaster, cable, agency and advertiser ad·ver·tise v. ad·ver·tised, ad·ver·tis·ing, ad·ver·tis·es v.tr. 1. To make public announcement of, especially to proclaim the qualities or advantages of (a product or business) so as to increase customers. In the first quarter, we increased our efforts to train those who work on the buy and sell sides of the media industry. Our continuing goal is to help our subscribers get the maximum value from the dollars they invest in our services," said Mr. Morris. "We also strengthened our relationship with Nielsen Media Research, Inc., our potential joint venture partner for commercial deployment of 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. (PPM) 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. ," continued Mr. Morris. "Last month, Arbitron and Nielsen announced an expansion of our agreement that increases the financial involvement and commitment of resources from Nielsen in a joint research program for the PPM. Already, we are in the field with studies that are designed to further develop the PPM system as a local market ratings service 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. . Even as we work with Nielsen, we are also developing a number of other applications for the Portable People Meter technology that we could implement on our own." "In international markets, we continue to make progress marketing the PPM. While the Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. radio industry has deferred a decision regarding electronic measurement, IBOPE, the leading South American media research firm, has just concluded a successful evaluation of the PPM encoding See encode. technology in Brazil. Mediametrie, the leading media research firm in France, has just signed an agreement for a two-year evaluation of the PPM in Paris," Mr. Morris concluded. Arbitron will host a conference call at 10:00 a.m. ET on April 17th to discuss its first quarter results and other relevant matters. To listen to the call, dial the following telephone number: 1-888-262-9189. The call will also be available live on the Internet Internet Publicly 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 at the following sites: www.arbitron.com, www.ccbn.com and www.streetevents.com 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, Mexico and Europe. 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 Internet Broadcast Services measures the audiences of audio and video content on the Internet, commonly known as webcasts. The Company is developing the Portable People Meter, a new technology for radio, television and cable ratings. Arbitron's marketing and business units are supported by a world-renowned 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 825 full-time 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 Research joint venture with VNU VNU Volontaires des Nations Unies (French) VNU Verenigde Nederlandse Uitgeversbedrijven (Dutch) VNU Virtual Network User , Inc., Arbitron also provides media and marketing research services to the broadcast television, magazine, newspaper, outdoor 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 document that are not historical in nature, particularly those that utilize terminology 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 from 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 in such forward-looking statements. These risks and uncertainties include whether we will be able to: -- renew contracts with large customers as they expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. ; -- successfully execute our business strategies, including timely implementation of our Portable People Meter and our MeasureCast Ratings services, as well as expansion of international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. ; -- effectively manage the impact of further consolidation in the radio industry; -- keep up with rapidly changing technological needs of our customer base, including creating new products and services that meet these needs; and -- successfully manage the impact on our business of any economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. generally and in the advertising market in particular, and the impact on costs of data collection due to privacy concerns. 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. . The forward-looking statements contained in this document speak only as of the date of this release, and Arbitron undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.
Arbitron Inc.
Consolidated Statements of Income
Three Months Ended March 31, 2003 and 2002
(In thousands, except per share data)
(Unaudited)
Three Months
Ended
March 31, $ %
2003 2002 Variance Variance
Revenue $71,354 $65,902 $5,452 8.3%
Costs and expenses
Cost of revenue 19,989 18,316 1,673 9.1%
Selling, general and administrative 13,975 12,677 1,298 10.2%
Research and development 6,281 6,059 222 3.7%
Total costs and expenses 40,245 37,052 3,193 8.6%
Operating income 31,109 28,850 2,259 7.8%
Proportionate share of net loss of
affiliate (1,259) (1,245) (14) (1.1%)
Earnings before interest and income
taxes 29,850 27,605 2,245 8.1%
Interest income 188 138 50 36.2%
Interest expense 3,615 4,586 (971) (21.2%)
Earnings before income taxes 26,423 23,157 3,266 14.1%
Income tax expense 10,305 8,915 1,390 15.6%
Net income $16,118 $14,242 $1,876 13.2%
Net income per weighted average common
share
Basic $0.54 $0.49 $0.05 10.2%
Diluted $0.53 $0.48 $0.05 10.4%
Weighted average shares used in
calculations
Basic 29,639 29,215
Diluted 30,176 29,849
Other data
Depreciation and Amortization $1,227 $983 $244 24.8%
EBITDA (1) $31,077 $28,588 $2,489 8.7%
Note: The Company has reclassified certain data in the 2002 Consolidated Statement of Income to conform with the 2003 presentation. (1) EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become 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, as well as to evaluate its operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. . EBITDA is calculated by adding back net interest expense, income tax expense, depreciation and amortization to net income. EBITDA should not be considered a substitute either for net income, as an indicator of Arbitron's operating performance, or for cash flow, 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. A reconciliation from EBITDA to cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses follows:
Arbitron Inc.
EBITDA Reconciliation
Three Months Ended March 31, 2003 and 2002
(In thousands)
(Unaudited)
Three Months
ended
March 31,
2003 2002
Net income $16,118 $14,242
Income tax expense 10,305 8,915
Net interest expense 3,427 4,448
Depreciation and amortization 1,227 983
EBITDA 31,077 28,588
Cash paid for income taxes (1,414) (136)
Cash paid for interest (3,483) (4,388)
Changes in working capital (8,174) (16,237)
Cash dividends received from affiliate 2,000 1,200
Other 1,354 1,302
Cash flows from operating activities $21,360 $10,329
Arbitron Inc.
Condensed Balance Sheets
March 31, 2003 and December 31, 2002
(In thousands)
March 31, December 31,
2003 2002
(Unaudited) (Audited)
Assets:
Cash and cash equivalents $55,250 $43,095
Trade receivables 19,409 20,509
Deferred taxes 28,739 29,357
Goodwill, net 32,937 32,937
Other assets 26,708 30,140
Total assets $163,043 $156,038
Liabilities and Stockholders' Equity (Deficit):
Deferred revenue $48,992 $54,746
Long-term debt 155,000 165,000
Other liabilities 40,896 36,871
Stockholders' equity (deficit) (2) (81,845) (100,579)
Total liabilities and stockholders' equity
(deficit) $163,043 $156,038
(2) Prior to the 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 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 Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. were used by Arbitron to make the $250 million distribution. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion