Arbitron Inc. Reports 2003 Second Quarter Financial Results.Business Editors NEW YORK--(BUSINESS WIRE)--July 17, 2003 Second quarter revenue up 8.7%; Net income up 21.0% over 2002 Net income per share increases 18.2% 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 June June: see month. 30, 2003. For the second quarter 2003, the Company reported revenue of $61.4 million, an increase of 8.7% over revenue of $56.5 million during the second quarter of 2002. Net income for the quarter was $8.0 million, compared with $6.6 million for the second 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 $16.1 million, compared with EBIT of $15.0 million during the comparable period last year. Costs and expenses for the second quarter increased by 8.8%, from $44.8 million in 2002 to $48.8 million in 2003. Interest expense for the quarter declined 26.2%, from $4.3 million in 2002 to $3.2 million in 2003, due to reductions in debt between the two periods. Net income per share for the second quarter 2003 increased to $0.26 (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 $0.22 (diluted) during the comparable period last year. In the second quarter 2003, Arbitron reduced its 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. by $20.0 million to $135.0 million. For the six months ended June 30, 2003, revenue was $132.8 million, an increase of 8.5% over the same period last year. Net income for the six months was $24.1 million or $0.80 per share (diluted), compared with $20.9 million or $0.70 per share (diluted) last year. EBIT was $46.0 million, compared to $42.6 million in 2002. Commenting on the results for the second 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 second quarter of 2003, we once again met our goals for revenue and profitability. At the same time, we continued to make our planned investments in the quality of our core services The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. and in our initiatives for 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." "Our efforts to commercialize 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) system continued on several fronts throughout the quarter," said Mr. Morris. "Working closely with Nielsen Noun 1. Nielsen - Danish composer (1865-1931) Carl August Nielsen, Carl Nielsen Media Research, we are running tests in Philadelphia Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. to improve how we recruit consumers for PPM ratings surveys. In addition to the tests we are operating with Nielsen, Arbitron is operating its own 'proof-of-concept' studies in Philadelphia to demonstrate how the Portable People Meter can be used in other types of marketing research services. We also continue to promote the PPM in international markets." "In the second quarter, we unveiled, as planned, a comprehensive program designed to enhance the quality of our radio 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. across a number of key areas including response rates," Mr. Morris said. "These anticipated investments will help us meet the expressed requests of our customers who count on the reliability of our audience estimates for the buying and selling of radio advertising." Arbitron will host a conference call at 10:00 a.m. ET on July July: see month. 17th to discuss its second quarter results and other relevant matters. To listen to the call, dial the following telephone number: 1-888-889-2497. 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 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 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 825 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 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 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 June 30, 2003 and 2002
(In thousands, except per share data)
(Unaudited)
Three Months Ended
June 30, $ %
2003 2002 Variance Variance
Revenue $61,448 $56,509 $4,939 8.7%
Costs and expenses
Cost of revenue 28,250 25,637 2,613 10.2%
Selling, general and
administrative 14,115 12,986 1,129 8.7%
Research and development 6,414 6,212 202 3.3%
Total costs and expenses 48,779 44,835 3,944 8.8%
Operating income 12,669 11,674 995 8.5%
Equity in net income of
affiliate 3,480 3,312 168 5.1%
Earnings before interest and
income taxes 16,149 14,986 1,163 7.8%
Interest income 185 124 61 49.2%
Interest expense 3,210 4,348 (1,138) (26.2%)
Earnings before income taxes 13,124 10,762 2,362 21.9%
Income tax expense 5,118 4,144 974 23.5%
Net income $8,006 $6,618 $1,388 21.0%
Net income per weighted average
common share
Basic $0.27 $0.23 $0.04 17.4%
Diluted $0.26 $0.22 $0.04 18.2%
Weighted average shares used in
calculations
Basic 29,805 29,368
Diluted 30,382 30,080
Other data
EBITDA $17,305 $16,065 $1,240 7.7%
Note: The Company has reclassified certain data in the 2002
Consolidated Statement of Income to conform to the 2003 presentation.
Arbitron Inc.
Consolidated Statements of Income
Six Months Ended June 30, 2003 and 2002
(In thousands, except per share data)
(Unaudited)
Six Months Ended
June 30, $ %
2003 2002 Variance Variance
Revenue $132,802 $122,411 $10,391 8.5%
Costs and expenses
Cost of revenue 48,239 43,953 4,286 9.8%
Selling, general and
administrative 28,090 25,663 2,427 9.5%
Research and development 12,695 12,271 424 3.5%
Total costs and expenses 89,024 81,887 7,137 8.7%
Operating income 43,778 40,524 3,254 8.0%
Equity in net income of
affiliate 2,221 2,067 154 7.5%
Earnings before interest and
income taxes 45,999 42,591 3,408 8.0%
Interest income 373 262 111 42.4%
Interest expense 6,825 8,934 (2,109) (23.6%)
Earnings before income taxes 39,547 33,919 5,628 16.6%
Income tax expense 15,423 13,059 2,364 18.1%
Net income $24,124 $20,860 $3,264 15.6%
Net income per weighted average
common share
Basic $0.81 $0.71 $0.10 14.1%
Diluted $0.80 $0.70 $0.10 14.3%
Weighted average shares used in
calculations
Basic 29,723 29,292
Diluted 30,274 29,965
Other data
EBITDA $48,382 $44,653 $3,729 8.4%
Note: The Company has reclassified certain data in the 2002
Consolidated Statement of Income to conform to the 2003 presentation.
Arbitron Inc.
EBIT and EBITDA Reconciliation
Three and Six Months Ended June 30, 2003 and 2002
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Net income $8,006 $6,618 $24,124 $20,860
Income tax expense 5,118 4,144 15,423 13,059
Net interest expense 3,025 4,224 6,452 8,672
EBIT $16,149 $14,986 $45,999 $42,591
Depreciation and amortization 1,156 1,079 2,383 2,062
EBITDA $17,305 $16,065 $48,382 $44,653
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 Balance Sheets
June 30, 2003 and December 31, 2002
(In thousands)
June December
30, 31,
2003 2002
(Unaudited) (Audited)
Assets:
Cash and cash equivalents $45,149 $43,095
Trade receivables 19,934 20,509
Deferred taxes 27,377 29,357
Goodwill, net 32,937 32,937
Other assets 32,120 30,140
Total assets $157,517 $156,038
Liabilities and Stockholders'
Equity (Deficit):
Deferred revenue $51,271 $54,746
Long-term debt 135,000 165,000
Other liabilities 35,530 36,871
Stockholders' equity (deficit) (1) (64,284) (100,579)
Total liabilities and
stockholders' equity (deficit) $157,517 $156,038
(1) 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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