Arbitron Inc. Reports Second Quarter 2001 Financial Results; 10.1% Year-Over-Year Increase in Revenues; Positive Initial Ratings Results for the Portable People Meter Trial.Business Editors NEW YORK--(BUSINESS WIRE)--July 19, 2001 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 second quarter ended June June: see month. 30, 2001. The Company reported revenues of $50.3 million, an increase of 10.1% over revenues of $45.7 million for the second 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 second quarter were $12.8 million, compared to $13.2 million for the second quarter of 2000, a 3.1% decrease. Net income for the quarter was $4.7 million, compared with $8.0 million reported during the same period of 2000, a decrease of 41.1%. Net income per share was $.16 (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 $.27 pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income per share in 2000. The 2000 earnings per share amount has been adjusted to reflect the one-for-five reverse split, which became effective following Arbitron's 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. . Arbitron reported 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 of $13.9 million for the second quarter, a 2.0% decrease compared with EBITDA of $14.2 million reported during the second quarter of 2000. The second quarter results were impacted by the planned increase in spending on the Company's Webcast measurement and 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. initiatives, along with $5.0 million of net interest expense related to debt initiated concurrent with the spin-off from Ceridian on March 30, 2001. Revenues were reduced by approximately $0.5 million as a result of the extended Clear Channel negotiations. The year to date revenue was $110.5 million, an increase of 9.1% over last year. EBIT was $40.1 million compared to $37.5 million last year. Net interest expense was $5.4 million compared to no interest last year. The year to date net income for the period was $21.0 million versus $22.7 million for the same period a year ago. Pro forma net income per share (basic and diluted) was $.72 compared to $.78 in 2000. EBITDA increased by 6.8% from $39.6 million last year to $42.3 million this year. In announcing the Company's 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: "Our financial results for the quarter were excellent and there were important strategic advances in the opening of the Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum market, in the RADAR(R) acquisition, and in the Portable People Meter results from our U.S. market trial. In addition, we appear to be in the final stages of negotiations with Clear Channel over the renewal of their ratings contract. I should note that there is nothing definitive yet on this contract. If and when there is something definitive, it will be announced separately. I also want to note that we are still negotiating with another radio group - Citadel Communications
Citadel Communications is a Bronxville, NY-based broadcaster that owns 4 television stations, including: DMA Rank Market Station ... - and have yet to reach resolution." Addressing other matters, Mr. Morris said: "Last month, we announced our plan to begin measuring radio audiences 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 , utilizing our existing diary processing infrastructure. We also recently announced entry into the radio network arena through the purchase of the RADAR(R) radio network 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. . These initiatives demonstrate our continuing progress in solidifying so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. and broadening the scope of Arbitron's core measurement services," said Mr. Morris. Positive Results for Portable People Meter Trial Separately today, the Company issued the first audience ratings results from its new television, cable and radio audience measurement system, the Portable People Meter (PPM). The PPM has been undergoing US market trials within the 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. TV market since December December: see month. of 2000. Compared to ratings reported by current TV and radio audience measurement systems, the Portable People Meter is reporting increased total-day average quarter hour audiences for broadcast television and cable and equivalent total-day average quarter hour audiences for radio. "The patterns of viewing and listening-while different in some respects from those indicated by the current radio and TV audience measurement systems-appear logical. They suggest that the Portable People Meter is an improved means of understanding how people use radio, broadcast television and cable," said Mr. Morris. Based on these first ratings results, we are moving forward with the next phase of the US market trial, and will be talking with Nielsen Noun 1. Nielsen - Danish composer (1865-1931) Carl August Nielsen, Carl Nielsen Media Research and with our customers about our schedule going forward," said Mr. Morris. About Arbitron: Arbitron Inc. (NYSE: ARB) is an international media and marketing research firm serving radio broadcasters, cable companies, advertisers and advertising agencies 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. 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 radio audiences in local
markets 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 700 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 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, 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 release 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 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 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; - benefit from 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.
Arbitron Inc.
Consolidated Statements of Income
Three Months and Six Months Ended June 30, 2001 and 2000
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
June 30 June 30 %
2001 2000 Variance
Revenue $ 50,264 $ 45,665 10.1%
Costs and expenses
Cost of revenue 22,811 20,995 8.6%
Selling, general and administrative 11,951 11,254 6.2%
Research and development 5,638 3,322 69.7%
Total costs and expenses 40,400 35,571 13.6%
Operating income 9,864 10,094 -2.3%
Equity in net income of affiliate 2,942 3,126 -5.9%
Earnings before interest
and income taxes 12,806 13,220 -3.1%
Interest income 354 - 100.0%
Interest expense (5,352) - 100.0%
Earnings before income taxes 7,808 13,220 -40.9%
Income tax expense 3,094 5,222 -40.8%
Net income $ 4,714 $ 7,998 -41.1%
Net income per weighted
average common share (1)
Basic $ 0.16 $ 0.27 -40.7%
Diluted $ 0.16 $ 0.27 -40.7%
Weighted average shares used
in calculations (in thousands)
Basic 29,155 29,010
Diluted 29,339 29,351
Other data (2)
EBITDA $ 13,946 $ 14,233 -2.0%
Six Months Ended
June 30 June 30 %
2001 2000 Variance
Revenue $ 110,454 $ 101,198 9.1%
Costs and expenses
Cost of revenue 38,684 37,067 4.4%
Selling, general and administrative 23,165 21,976 5.4%
Research and development 10,334 6,623 56.0%
Total costs and expenses 72,183 65,666 9.9%
Operating income 38,271 35,532 7.7%
Equity in net income of affiliate 1,819 2,002 -9.1%
Earnings before interest
and income taxes 40,090 37,534 6.8%
Interest income 373 - 100.0%
Interest expense (5,738) - 100.0%
Earnings before income taxes 34,725 37,534 -7.5%
Income tax expense 13,716 14,826 -7.5%
Net income $ 21,009 $ 22,708 -7.5%
Net income per weighted
average common share (1)
Basic $ 0.72 $ 0.78 -7.7%
Diluted $ 0.72 $ 0.78 -7.7%
Weighted average shares used
in calculations (in thousands)
Basic 29,155 28,984
Diluted 29,324 29,188
Other data (2)
EBITDA $ 42,305 $ 39,613 6.8%
(1) The computations of basic and diluted net income per common share
for the three month period ended June 30, 2001 are based on
Arbitron's weighted average shares of common stock and potentially
dilutive securities outstanding, respectively. For the six month
period ended June 30, 2001, as well as periods ended prior to June
30, 2001, the net income per weighted average common share
computations are pro forma computations based entirely, or in
part, 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.
(2) 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 Consolidated Balance Sheets
June 30, 2001 and December 31, 2000
(Dollars in thousands)
(Unaudited)
June 30, December 31,
2001 2000
--------- -----------
Cash and equivalents $ 25,273 $ 3,540
Trade receivables 19,738 19,017
Deferred taxes 39,758 51,077
Other assets 37,867 34,242
Total assets $ 122,636 $ 107,876
Deferred revenue $ 42,838 $ 47,833
Long-term debt 240,000 -
Other liabilities 17,899 26,821
Stockholders' equity (deficit) (3) (178,101) 33,222
Total liabilities and stockholders' equity $ 122,636 $ 107,876
(3) 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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