Arbitron Inc. Reports 2003 Fourth Quarter and Year End Financial Results.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 27, 2004 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) Annual revenue up 9.5% to $273.6 million; EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). up 8.1% to $92.7 million; Annual net income per share (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. ) is $1.63, an increase of 14.8% Arbitron Inc. (NYSE: ARB) today announced results for the quarter and year ended December December: see month. 31, 2003. For the fourth quarter 2003, the Company reported revenue of $65.4 million, an increase of 13.2% over revenue of $57.8 million during the fourth quarter of 2002. Costs and expenses for the fourth quarter increased by 13.8%, from $47.9 million in 2002 to $54.5 million in 2003. 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) for the quarter were $16.1 million, compared with EBIT of $14.1 million during the comparable period last year. Interest expense for the quarter declined 30.8%, from $3.8 million in 2002 to $2.6 million in 2003, due to reductions in the Company's 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. . Net income for the quarter was $8.7 million, compared with $6.5 million for the fourth quarter of 2002. Net income per share for the fourth quarter 2003 increased to $0.28 (diluted), compared with $0.21 (diluted) during the comparable period last year. In the fourth quarter 2003, Arbitron reduced its long-term debt by $10 million from $115 million to $105 million. For the year ended December 31, 2003, revenue was $273.6 million, an increase of 9.5% over revenues of $249.8 million for the same period last year. EBIT for 2003 increased 8.1% to $92.7 million compared with $85.7 million in 2002. Net income for 2003 increased 16.6% to $49.9 million compared with $42.8 million in 2002. Net income per share (diluted) in 2003 was $1.63 per share (diluted), compared with $1.42 per share (diluted) last year. Commenting on the results for the year, 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: "2003 was a very demanding year. Yet despite the challenges, we still met the guidance for revenue, EBIT and earnings per share that we established at the beginning of the year. Equally important, we worked hard to help our customers weather a difficult year and prepare to take advantage of an improving environment in 2004." "We also devoted considerable time, effort and money to our programs to enhance the willingness of the public to take part in our surveys, and continued our effort to improve how we manage the representation of Hispanics by their language preference. Working with Nielsen Noun 1. Nielsen - Danish composer (1865-1931) Carl August Nielsen, Carl Nielsen Media Research, we developed promising new sample recruitment techniques that make it possible for us to take the first steps toward deploying a second 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. demonstration market 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. in 2004." said Mr. Morris. "We also enhanced the technical capabilities of the Portable People Meter system and continued to explore new ways to use that technology to meet the needs of marketers and advertisers," said Mr. Morris. "Given the overall strength of the core ratings business, we believe Arbitron remains well positioned to deliver solid growth in revenue and profitability in 2004. At the same time, we expect to continue our investments in new services that have long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth potential for our company and for our customers," Mr. Morris concluded. Arbitron will host a conference call at 10:00 a.m. ET on January January: see month. 27th to discuss its fourth quarter results and other relevant matters. To listen to the call, dial the following telephone number: (877)-780-2271. 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 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 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 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. 850 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 , 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 de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. 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 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: -- renew all or part of 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 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 -- successfully manage the impact on costs of data collection due to privacy concerns and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. government regulations. 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.
Consolidated Statements of Income
Three Months Ended December 31, 2003 and 2002
(In thousands, except per share data)
(Unaudited)
Three Months Ended
December 31, %
2003 2002 Change Change
Revenue $65,429 $57,786 $7,643 13.2%
Costs and expenses
Cost of revenue 31,176 27,673 3,503 12.7%
Selling, general and administrative 16,502 13,939 2,563 18.4%
Research and development 6,853 6,289 564 9.0%
Total costs and expenses 54,531 47,901 6,630 13.8%
Operating income 10,898 9,885 1,013 10.2%
Equity in net income of affiliate 5,170 4,229 941 22.3%
Earnings before interest and income
taxes 16,068 14,114 1,954 13.8%
Interest income 194 172 22 12.8%
Interest expense 2,602 3,762 (1,160)(30.8%)
Earnings before income taxes 13,660 10,524 3,136 29.8%
Income tax expense 4,922 4,051 871 21.5%
Net income $8,738 $6,473 $2,265 35.0%
Net income per weighted average common
share
Basic $0.29 $0.22 $0.07 31.8%
Diluted $0.28 $0.21 $0.07 33.3%
Weighted average shares used in
calculations
Basic 30,458 29,570 888 3.0%
Diluted 31,146 30,180 966 3.2%
Other data
EBITDA $17,327 $15,317 $2,010 13.1%
Arbitron Inc.
Consolidated Statements of Income
Year Ended December 31, 2003 and 2002
(In thousands, except per share data)
Year Ended
December 31, %
2003 2002 Change Change
Unaudited Audited
Revenue $273,550 $249,757 $23,793 9.5%
Costs and expenses
Cost of revenue 103,109 91,821 11,288 12.3%
Selling, general and administrative 58,662 53,096 5,566 10.5%
Research and development 25,842 24,728 1,114 4.5%
Total costs and expenses 187,613 169,645 17,968 10.6%
Operating income 85,937 80,112 5,825 7.3%
Equity in net income of affiliate 6,754 5,627 1,127 20.0%
Earnings before interest and income
taxes 92,691 85,739 6,952 8.1%
Interest income 741 596 145 24.3%
Interest expense 12,338 16,815 (4,477)(26.6%)
Earnings before income taxes 81,094 69,520 11,574 16.6%
Income tax expense 31,221 26,765 4,456 16.6%
Net income $49,873 $42,755 $7,118 16.6%
Net income per weighted average
common share
Basic $1.66 $1.45 $0.21 14.5%
Diluted $1.63 $1.42 $0.21 14.8%
Weighted average shares used in
calculations
Basic 30,010 29,413 597 2.0%
Diluted 30,616 30,049 567 1.9%
Other data
EBITDA $97,528 $90,108 $7,420 8.2%
Arbitron Inc.
EBIT and EBITDA Reconciliation
Three Months and Year Ended December 31, 2003 and 2002
(In thousands)
(Unaudited)
Three Months Year Ended
Ended December 31,
December 31,
2003 2002 2003 2002
Net income $8,738 $6,473 $49,873 $42,755
Income tax expense 4,922 4,051 31,221 26,765
Net interest expense 2,408 3,590 11,597 16,219
EBIT $16,068 $14,114 $92,691 $85,739
Depreciation and amortization 1,259 1,203 4,837 4,369
EBITDA $17,327 $15,317 $97,528 $90,108
Note: Earnings before interest and income taxes (EBIT) and EBITDA are
widely used measures of operating performance. They are presented as
supplemental information that management of Arbitron believes is
useful to investors to evaluate the Company's results because they
exclude certain items that are not directly related to the Company's
core operating performance. EBIT is calculated by adding back net
interest expense and income tax expense to net income. EBITDA is
calculated by adding back net interest expense, income taxes,
depreciation and amortization to net income. EBIT and EBITDA should
not be considered as substitutes either for net income, as indicators
of Arbitron's operating performance, or for cash flow, as measures 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 Consolidated Balance Sheets
December 31, 2003 and December 31, 2002
(In thousands)
December 31, December 31,
2003 2002
(Unaudited) (Audited)
Assets:
Cash and cash equivalents $68,433 $43,095
Trade receivables 21,355 20,509
Deferred taxes 30,829 29,357
Goodwill, net 32,937 32,937
Other assets 30,640 30,140
Total assets $184,194 $156,038
Liabilities and Stockholders' Equity (Deficit):
Deferred revenue $58,398 $54,746
Long-term debt 105,000 165,000
Other liabilities 38,869 36,871
Stockholders' equity (deficit) (1) (18,073) (100,579)
Total liabilities and stockholders' equity
(deficit) $184,194 $156,038
(1) Prior to the spin-off from Ceridian Corporation in March 2001,
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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