Citadel Broadcasting Corporation Reports 2004 Fourth Quarter and Full Year Operating Results.LAS VEGAS Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. -- Citadel Broadcasting
Citadel Broadcasting Corporation NYSE: CDL is a Las Vegas, Nevada based broadcast holding company. Investment house Forstmann Little & Company owns 27% of Citadel. Corporation (NYSE NYSE See: New York Stock Exchange :CDL 1. CDL - Computer Definition anguage. A hardware description language. "Computer Organisation and Microprogramming", Yaohan Chu, P-H 1970. 2. CDL - Command Definition Language. Portion of ICES used to implement commands. Sammet 1969, p.618-620. 3. ) Fourth Quarter --Net Revenue of $109.8 Million Up 7.4% --Station Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $48.2 Million Up 5.9% --Operating Income of $27.1 Million Compared to $4.9 million for the Fourth Quarter of 2003 --Free Cash Flow of $39.0 Million Up 25.4% --Net Income Per 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. Share $0.10 Compared to a Net Loss Per Diluted Share of $0.11 in the Fourth Quarter of 2003 Full Year Results --Net Revenue of $411.5 Million Up 10.8% --Station Operating Income of $176.3 Million Up 10.5% --Operating Income of $41.7 Million Compared to a Loss of $4.0 Million for 2003 --Free Cash Flow of $136.1 Million Up 44.3% --Net Income Per Diluted Share $0.54 Compared to a Net Loss Per Diluted Share of $0.83 for 2003 Citadel Broadcasting Corporation (NYSE:CDL) today reported its results for the fourth quarter of 2004. December December: see month. 31, 2004 - Fourth Quarter Results Net revenues in the fourth quarter of 2004 were a record $109.8 million compared with $102.2 million in the fourth quarter of 2003, an increase of $7.6 million, or 7.4%. The increase in revenues was due to higher revenues at the Company's existing stations as well as the acquisitions completed in 2004, partially offset by dispositions. Excluding the effect of the station acquisitions and dispositions, same station net revenues for the fourth quarter of 2004 were up approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 3% compared to the same period in 2003. Operating income for the fourth quarter of 2004 was $27.1 million compared to $4.9 million in the corresponding 2003 period, an increase of $22.2 million. The increase was primarily due to higher revenues and a decrease in depreciation and amortization expense of approximately $18.0 million. Station operating income (as detailed in the attached table is generally defined as operating income plus depreciation and amortization, local marketing agreement fees, corporate general and administrative expenses, other, net, and other non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) ) was $48.2 million for the fourth quarter of 2004 compared to $45.5 million for the fourth quarter of 2003, an increase of $2.7 million, or 5.9%. On a same station basis, as defined above, station operating income was up approximately 5% over the same period in 2003. Same station operating income after corporate general and administrative expenses was also up approximately 5%. Net income (loss) per basic share for the quarter ended December 31, 2004 increased $0.22 as the Company reported net income for the quarter of $13.8 million or $0.11 per basic share as compared to a net loss of $13.6 million or $(0.11) per basic share for the same period in 2003. On a fully diluted basis, net income per share was $0.10 in the fourth quarter of 2004 compared to a loss per share of ($0.11) in the fourth quarter of 2003. The increase in net income over the prior period is primarily due to the reduction in depreciation and amortization expense and interest expense. Free cash flow (as detailed in the attached table is generally defined as operating income (i) plus depreciation and amortization, other, net, and other non-cash expenses (ii) less net interest expense (excluding amortization of debt issuance costs), capital expenditures and cash taxes) was $39.0 million for the three months ended December 31, 2004 compared to $31.1 million for the three months ended December 31, 2003, an increase of $7.9 million, or 25.4%. Farid Suleman Farid Suleman is the current chairman and CEO of Citadel Broadcasting. For years at Infinity Radio, Suleman was the main assistant of Mel Karmazin, who has since made a move to head up Sirius Satellite Radio. , Chairman and Chief Executive Officer of Citadel Broadcasting Corporation, commented: "The Company recorded record revenue, net income, station operating income and free cash flow in both the fourth quarter and year ended 2004 despite a difficult industry environment. For the full year of 2004, the Company had same station revenue growth of 4% and same station operating income growth of 6%. These gains were achieved in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the programming investment in the second half of 2004 at two of our recent acquisitions, New Orleans New Orleans (ôr`lēənz –lənz, ôrlēnz`), city (2006 pop. 187,525), coextensive with Orleans parish, SE La., between the Mississippi River and Lake Pontchartrain, 107 mi (172 km) by water from the river mouth; founded and Memphis as well as certain of our existing markets including Harrisburg Harrisburg, city (1990 pop. 52,376), state capital and seat of Dauphin co., SE Pa., on the Susquehanna River; settled c.1710 by John Harris, who established a trading post and operated a ferry there; inc. 1791. and Salt Lake City. We expect these changes to positively impact growth in 2005. We also continue to invest in our Company through our stock buy back program and have repurchased over 9.5 million shares since the inception INCEPTION. The commencement; the beginning. In making a will, for example, the writing is its inception. 3 Co. 31 b; Plowd. 343. Vide Consummation; Progression. of the program in July July: see month. of 2004." December 31, 2004 - Year to Date Results Net revenues for the year ended December 31, 2004 were a record $411.5 million compared with $371.5 million for the year ended December 31, 2003, an increase of $40.0 million, or 10.8%. The increase in revenues was due to higher revenues at the Company's existing stations as well as the acquisitions completed in 2003 and 2004, partially offset by dispositions. Excluding the effect of the station acquisitions and dispositions, same station net revenues for 2004 were up approximately 4% compared to the same period in 2003. Operating income was $41.7 million for the year ended December 31, 2004 compared to a loss of $4.0 million for the year ended December 31, 2003, an increase of $45.7 million. Operating income for the year ended December 31, 2004 reflects a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of approximately $16.4 million primarily due to the Company's settlement with its previous national rep firm. Excluding this non-cash charge, the Company's operating income for the year ended December 31, 2004 would have been approximately $58.1 million, an increase of $62.1 million over 2003. The increase in operating income for the year ended December 31, 2004 was primarily due to higher revenues and a decrease in depreciation and amortization expense offset by higher station operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Station operating income (as previously defined) was a record $176.3 million for the year ended December 31, 2004 compared to $159.6 million for the same period in 2003, an increase of $16.7 million, or 10.5%. On a same station basis, as defined above, station operating income was up approximately 6% over the same period in 2003. Same station operating income after corporate general and administrative expenses was also up approximately 6%. Income tax benefit for the year ended December 31, 2004 was $63.8 million (substantially all non-cash) compared to income tax expense of $28.0 million (substantially all non-cash) for the year ended December 31, 2003. The income tax benefit for the year ended December 31, 2004 was primarily due to the recognition of the Company's net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. carry-forward See Loss Carry-Back. . The income tax expense for the year ended December 31, 2003 was primarily due to the amortization of indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those lived intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. for income tax purposes, for which no benefit can be recognized in the financial statements until the assets are disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of. Net income (loss) per basic share for the year ended December 31, 2004 increased $1.41 as the Company reported net income for the year ended December 31, 2004 of $74.6 million or $0.58 per basic share as compared to a net loss of $89.6 million or $(0.83) per basic share for the same period in 2003. On a fully diluted basis, net income per share was $0.54 for the year ended December 31, 2004 compared to a loss per share of ($0.83) for the year ended December 31, 2003. The increase in net income over the prior period was primarily due to the income tax benefit/expense discussed above and the reduction in depreciation and amortization expense and interest expense. Free cash flow (as previously defined) was $136.1 million for the year ended December 31, 2004 compared to $94.3 million for the year ended December 31, 2003, an increase of $41.8 million, or 44.3%. Outlook for 2005 Based on current market conditions, the Company expects revenue growth in 2005 of 3-5%. Citadel Broadcasting Corporation is a radio broadcaster focused primarily on acquiring, developing and operating radio stations throughout 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. . The Company owns and operates 155 FM and 58 AM radio stations in 47 markets located in 24 states across the country. For more information visit www.citadelbroadcasting.com. 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. This news release contains both historical and forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or 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. by such forward-looking statements. Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this release include, but are not limited to: changes in economic conditions in the U.S.; fluctuations in interest rates; changes in industry conditions; changes in operating performance; shifts in population and other demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. ; changes in the level of competition for advertising dollars; technological changes and innovations; changes in governmental regulations and policies and actions of regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. bodies; changes in tax rates; and changes in capital expenditure requirements. Other key risks are described in the Company's reports filed with the U.S. Securities and Exchange Commission. The Company assumes no obligation to publicly update or revise any forward-looking statements.
CITADEL BROADCASTING CORPORATION
Condensed Consolidated Financial Data
(Amounts in Thousands, except per share data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
--------------------- -------------------
Condensed Statements of 2004 2003 2004 2003
Operations
Net Revenues $109,769 $102,201 $411,495 $371,509
Cost of Revenues 33,079 27,761 116,579 99,832
Selling, General and
Administrative 28,508 28,957 118,611 112,090
Corporate General and
Administrative 2,610 2,695 11,239 10,094
Non-Cash Stock Compensation 864 2,158 4,327 10,339
Local Marketing Agreement
Fees 542 823 2,081 2,405
Depreciation and
Amortization 16,862 34,889 101,270 140,659
Non-cash Charge Related to
Contract Obligations - - 16,449 -
Other, Net 177 (14) (776) 53
---------- ---------- --------- ---------
Operating Income (Loss) 27,127 4,932 41,715 (3,963)
---------- ---------- --------- ---------
Non-Operating Expenses:
Net Interest Expense (Including
Amortization of Debt Issuance
Costs of $459 and $541 for the
Three Months Ended December 31,
2004 and 2003, Respectively, and
$1,976 and $3,036 for the Year
Ended December 31, 2004
and 2003, Respectively) 3,939 9,505 17,345 48,254
Write-off of Deferred
Financing Costs Due to
Extinguishment of Debt - 1,191 13,615 9,345
---------- ---------- --------- ---------
Total Non-Operating Expenses 3,939 10,696 30,960 57,599
---------- ---------- --------- ---------
Income (Loss) before Income
Taxes 23,188 (5,764) 10,755 (61,562)
Income Tax Expense/(Benefit) 9,433 7,857 (63,813) 28,008
---------- ---------- --------- ---------
Net Income (Loss) $13,755 $(13,621) $74,568 $(89,570)
========== ========== ========= =========
Basic Net Income (Loss) Per
Common Share $0.11 $(0.11) $0.58 $(0.83)
========== ========== ========= =========
Diluted Net Income (Loss)
Per Common Share $0.10 $(0.11) $0.54 $(0.83)
========== ========== ========= =========
Weighted Average Common
Shares Outstanding:
Basic 126,182 122,916 129,191 107,360
========== ========== ========= =========
Diluted 142,046 122,916 143,379 107,360
========== ========== ========= =========
December December
31, 2004 31, 2003
---------- ----------
(Unaudited)
(Amounts in Thousands)
Selected Balance Sheet Data:
Cash and Cash Equivalents $948 $3,467
Working Capital 69,930 52,181
Total Assets 2,315,698 2,249,333
Senior Debt 286,000 168,111
Subordinated Debt - 500,000
Convertible Subordinated
Notes 330,000 -
Total Shareholders' Equity 1,380,383 1,232,444
CITADEL BROADCASTING CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
-----------------------------------------------------------------
(Unaudited; Amounts in thousands)
The following tables set forth Station Operating Income for the three and twelve months ended December 31, 2004 and 2003. Station Operating Income is defined as net income (loss) adjusted to exclude the following line items presented in the Statement of Operations See Income statement. : income tax expense/(benefit), write off of deferred financing costs, net interest expense, other, net, non-cash charge related to contract obligations, depreciation and amortization, local marketing agreement fees, non-cash stock compensation and corporate general and administrative expenses. Station Operating Income, among other things, is used by the Company's management to evaluate the Company's operating performance, to value prospective acquisitions, as the basis of incentive compensation targets for certain management personnel, and this measure is among the primary measures used by management for the planning and forecasting of future periods. The Company believes the presentation of this measure is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by the Company's management, helps improve their ability to understand the Company's operating performance and makes it easier to compare the Company's results with other companies that have different financing and capital structures or tax rates. In addition, this measure is also among the primary measures used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in its industry. Since Station Operating Income is not a measure of performance calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , it should not be considered in isolation of, or as a substitute for, operating income or loss, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. Station Operating Income, as the Company calculates it, may not be comparable to similarly titled measures employed by other companies. In addition, this measure does not necessarily represent funds available for discretionary use, and is not necessarily a measure of the Company's ability to fund its cash needs. As Station Operating Income excludes certain financial information compared with net income (loss), the most directly comparable GAAP financial measure, users of this financial information should consider the types of events and transactions that are excluded. As required by the SEC, the Company provides below a reconciliation of Station Operating Income to net income (loss), the most directly comparable amount reported under GAAP.
Three Months Ended Year Ended
December 31, December 31,
------------------ -------------------
2004 2003 2004 2003
Station Operating Income $48,182 $45,483 $176,305 $159,587
Corporate General and
Administrative 2,610 2,695 11,239 10,094
Non-Cash Stock Compensation 864 2,158 4,327 10,339
Local Marketing Agreement Fees 542 823 2,081 2,405
Other, Net 177 (14) (776) 53
Non-Cash Charge Related to
Contract Obligations - - 16,449 -
-------- --------- --------- ---------
Operating Income Before
Depreciation and Amortization 43,989 39,821 142,985 136,696
Depreciation and Amortization 16,862 34,889 101,270 140,659
-------- --------- --------- ---------
Operating Income (Loss) 27,127 4,932 41,715 (3,963)
Net Interest Expense 3,939 9,505 17,345 48,254
Write-off of Deferred
Financing Costs Due to
Extinguishment of Debt - 1,191 13,615 9,345
-------- --------- --------- ---------
Income/(Loss) before Income
Taxes 23,188 (5,764) 10,755 (61,562)
Income Tax Expense/(Benefit) 9,433 7,857 (63,813) 28,008
-------- --------- --------- ---------
Net Income/(Loss) $13,755 $(13,621) $74,568 $(89,570)
======== ========= ========= =========
OTHER FINANCIAL DATA
--------------------
Three Months Ended Year Ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
Same Station Computations:
Net Revenues - Reconciliation
of Same Station Net Revenues
to GAAP:
Net Revenues as Reported $109,769 $102,201 $411,495 $371,509
Adjustments for Radio
Station Acquisitions and
Divestitures (5,448) (1,220) (46,678) (22,155)
--------- --------- --------- ---------
Same Station Net Revenues $104,321 $100,981 $364,817 $349,354
Station Operating Income -
Same Station:
Station Operating Income $48,182 $45,483 $176,305 $159,587
Adjustments for Radio
Station Acquisitions
and Divestitures (1,682) (995) (15,664) (8,572)
--------- --------- --------- ---------
Same Station Operating
Income $46,500 $44,488 $160,641 $151,015
Free cash flow is defined as operating income (loss) (i) plus depreciation, amortization, non-cash charge related to contract obligations, non-cash stock compensation expense and other, net (ii) less net interest expense (excluding amortization of debt issuance costs), capital expenditures and cash taxes. The Company uses free cash flow, among other measures, to evaluate its operating performance. Management believes free cash flow provides investors with an important perspective on the cash available to service debt, make strategic acquisitions and investments, maintain capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) and fund ongoing operations and working capital needs. The Company believes the presentation of free cash flow is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management. In addition, free cash flow is also a primary measure used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in its industry. As free cash flow is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, operating income or loss, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. Free cash flow, as the Company calculates it, may not be comparable to similarly titled measures employed by other companies. In addition, free cash flow does not necessarily represent funds available for discretionary use, and is not necessarily a measure of the Company's ability to fund its cash needs. Free cash flow, as defined by the Company, excludes certain financial information when compared with operating income or loss, the most directly comparable GAAP financial measure, and users of this financial information should consider the types of events and transactions that are excluded. As required by the SEC, the Company provides below a reconciliation of free cash flow to operating income or loss, the most directly comparable amount reported under GAAP.
Three Months Ended Year Ended
December 31, December 31,
----------------- ------------------
2004 2003 2004 2003
Operating Income/ (Loss) $27,127 $4,932 $41,715 $(3,963)
Plus (Minus)
Depreciation and Amortization 16,862 34,889 101,270 140,659
Non-Cash Charge Related to
Contract Obligations - - 16,449 -
Non-Cash Stock Compensation 864 2,158 4,327 10,339
Other, Net 177 (14) ( 776) 53
Interest Expense, Net (3,939) (9,505) (17,345) (48,254)
Amortization of Debt Issuance
Costs 459 541 1,976 3,036
Capital Expenditures (1,967) (1,465) (8,948) (6,162)
Cash Taxes (600) (392) (2,556) (1,422)
-------- -------- --------- --------
Free Cash Flow $38,983 $31,144 $136,112 $94,286
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