Arbitron Inc. Reports 2003 Third Quarter Financial Results.Business Editors NEW YORK--(BUSINESS WIRE)--Oct. 21, 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)
Third quarter revenue up 8.3%; Net income up 10.3% over 2002
Net income per share increases 7.8%
Positive preliminary result in key Portable People Meter
research test announced
Arbitron Inc. (NYSE: ARB) today announced results for the quarter ended September September: see month. 30, 2003. For the third quarter 2003, the Company reported revenue of $75.3 million, an increase of 8.3% over revenue of $69.6 million during the third quarter of 2002. Net income for the quarter was $17.0 million, compared with $15.4 million for the third 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 $30.6 million, compared with EBIT of $29.0 million during the comparable period last year. Costs and expenses for the third quarter increased by 10.5%, from $39.9 million in 2002 to $44.1 million in 2003. Interest expense for the quarter declined 29.3%, from $4.1 million in 2002 to $2.9 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 per share for the third quarter 2003 increased to $0.55 (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 $0.51 (diluted) during the comparable period last year. In the third quarter 2003, Arbitron reduced its long-term debt by $20.0 million from $135.0 to $115.0 million. For the nine months ended September 30, 2003, revenue was $208.1 million, an increase of 8.4% over the same period last year. Net income for the nine months increased 13.4% to $41.1 million or $1.35 per share (diluted), compared with $36.3 million or $1.21 per share (diluted) last year. EBIT was $76.6 million, compared to $71.6 million in 2002. Commenting on the results for the third 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, "Our financial results for the quarter were substantially in line with our expectations and we remain on track to meet our guidance for the year. We have also made significant progress in our previously announced efforts to enhance 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 to develop our opportunities 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 programs to address response rates in our radio diary diary [Lat.,=day], a daily record of events and observations. As distinguished from memoir (an account of events placed in perspective by the author long after they have occurred), the diary derives its impact from its immediacy, requiring each generation of readers service are yielding positive results. We saw a small but 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. increase in response rates in the top ten markets during the Summer 2003. These are the markets where we are currently focusing our efforts to get more consumers to say "yes" to the Arbitron survey process," said Mr. Morris. "Going forward, our new interviewing center has already gone on line in time for the Fall 2003 survey and we are actively working on the next steps in our long range plan for expanding the scope of our response rate efforts." Progress in 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. Test to Improve Response Rates In a separate release, the Company is announcing positive, preliminary results in a key research test for its new television, cable and radio audience measurement system: the Portable People Meter (PPM). "For the better part of a year, Arbitron, Nielsen Noun 1. Nielsen - Danish composer (1865-1931) Carl August Nielsen, Carl Nielsen and the industry have pointed to response rates as a key issue that had to be resolved before the Portable People Meter could be deployed as a means of measuring audiences for radio as well as broadcast and cable television in local markets," said Mr. Morris "We said that Arbitron would work with Nielsen to devise techniques that could increase the percentage of consumers who would accept our invitation to take part in PPM surveys and then carry the meters on a continuing basis." "I am pleased to report that Arbitron and Nielsen have developed two separate methods that have increased the rate at which we can recruit consumers for PPM surveys. Initial results are in line with what Nielsen would expect when recruiting a new set-top meter meter, unit of measure meter, abbr. m, fundamental unit of length in the metric system. The meter was originally defined as 1/10,000,000 of the distance between the equator and either pole; however, the original survey was inaccurate and the meter was later panel, which is what we both wanted to achieve. While the response rate test needs to be completed so that we can confirm that acceptable rates can be sustained over time, and the turnover rates also remain acceptable, Arbitron is confident that we have found a solution for this key issue." "We will continue our work with Nielsen Media Research on the expanded research program for the Portable People Meter. At the same time, Arbitron will also continue to develop the marketing applications of PPM and work to expand the list of international companies that have chosen the PPM as their solution for media measurement in the 21st century," concluded Mr. Morris. Arbitron will host a conference call at 10:00 a.m. ET on October October: see month. 21st to discuss its third quarter results and other relevant matters. To listen to the call, dial the following telephone number: (888) 694-4728. 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 ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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 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 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 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 September 30, 2003 and 2002
(In thousands, except per share data)
(Unaudited)
Three Months
Ended
September 30, $ %
2003 2002 Change Change
Revenue $75,319 $69,560 $5,759 8.3%
Costs and expenses
Cost of revenue 23,694 20,195 3,499 17.3%
Selling, general and administrative 14,070 13,494 576 4.3%
Research and development 6,294 6,168 126 2.0%
Total costs and expenses 44,058 39,857 4,201 10.5%
Operating income 31,261 29,703 1,558 5.2%
Proportionate share of net loss of
affiliate (637) (669) 32 4.8%
Earnings before interest and income
taxes 30,624 29,034 1,590 5.5%
Interest income 174 162 12 7.4%
Interest expense 2,911 4,119 (1,208) (29.3%)
Earnings before income taxes 27,887 25,077 2,810 11.2%
Income tax expense 10,876 9,655 1,221 12.6%
Net income $17,011 $15,422 $1,589 10.3%
Net income per weighted average
common share
Basic $0.56 $0.52 $0.04 7.7%
Diluted $0.55 $0.51 $0.04 7.8%
Weighted average shares used in
calculations
Basic 30,127 29,492
Diluted 30,762 30,081
Other data
EBITDA $31,819 $30,138 $1,681 5.6%
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
Nine Months Ended September 30, 2003 and 2002
(In thousands, except per share data)
(Unaudited)
Nine Months Ended
September 30, $ %
2003 2002 Change Change
Revenue $208,121 $191,971 $16,150 8.4%
Costs and expenses
Cost of revenue 71,933 64,148 7,785 12.1%
Selling, general and
administrative 42,160 39,157 3,003 7.7%
Research and development 18,989 18,439 550 3.0%
Total costs and expenses 133,082 121,744 11,338 9.3%
Operating income 75,039 70,227 4,812 6.9%
Equity in net income of affiliate 1,584 1,398 186 13.3%
Earnings before interest and income
taxes 76,623 71,625 4,998 7.0%
Interest income 547 424 123 29.0%
Interest expense 9,736 13,053 (3,317) (25.4%)
Earnings before income taxes 67,434 58,996 8,438 14.3%
Income tax expense 26,299 22,714 3,585 15.8%
Net income $41,135 $36,282 $4,853 13.4%
Net income per weighted average
common share
Basic $1.38 $1.24 $0.14 11.3%
Diluted $1.35 $1.21 $0.14 11.6%
Weighted average shares used in
calculations
Basic 29,859 29,359
Diluted 30,438 30,004
Other data
EBITDA $80,201 $74,791 $5,410 7.2%
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 Nine Months Ended September 30, 2003 and 2002
(In thousands)
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2003 2002 2003 2002
Net income $17,011 $15,422 $41,135 $36,282
Income tax expense 10,876 9,655 26,299 22,714
Net interest expense 2,737 3,957 9,189 12,629
EBIT $30,624 $29,034 $76,623 $71,625
Depreciation and amortization 1,195 1,104 3,578 3,166
EBITDA $31,819 $30,138 $80,201 $74,791
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
September 30, 2003 and December 31, 2002
(In thousands)
September December
30, 31,
2003 2002
(Unaudited) (Audited)
Assets:
Cash and cash equivalents $66,214 $43,095
Trade receivables 14,305 20,509
Deferred taxes 26,413 29,357
Goodwill, net 32,937 32,937
Other assets 27,449 30,140
Total assets $167,318 $156,038
Liabilities and Stockholders' Equity (Deficit):
Deferred revenue $49,447 $54,746
Long-term debt 115,000 165,000
Other liabilities 44,846 36,871
Stockholders' equity (deficit) (1) (41,975) (100,579)
Total liabilities and stockholders' equity
(deficit) $167,318 $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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