Westwood One was as upbeat as the radio network could be given the dismal economic conditions that plague all traditional media, as well as the company’s ongoing struggle to turn around its financial performance. Third quarter net revenue dropped 10.9 percent to $96.3 million. Local and regional revenue plummeted 16.6 percent due to reduced spending in the automotive, banking, financial services and real estate categories. Soft advertising demand led to a decline of 4.3 percent in national revenue.
The results reported Monday (Nov. 10) came just weeks after Westwood’s board of directors installing a new executive management team and reorganized its business into two major divisions. Rod Sherwood, the CFO who took over as president in October announced a three-pronged approach to turn around its business, by growing revenue, reducing operating expenses and restructuring or refinancing its debt.
“The pillars of the business are solid,” Sherwood said. “2008 was the year of developing and implementing a turnaround plan for Westwood One. The actions are beginning to produce increasing traction and momentum despite the soft economic environment.”
Currently in active discussions to refinance or restructure $85 million in debt due in February and November next year, Westwood retained Moelis & Co. to represent it. Sherwood said the company “will likely be successful.”
Westwood said the company was “encouraged” about the progress it was making due to increased clearances, programming such as its Business Radio Network, the addition of new programming such as Into the Night with Tony Bruno, and CMT Radio Live with Cody Alan, and the ongoing reengineering of Metro Traffic from 60 operation centers into 13 regional hubs.
The company expects full year revenue to be down in the high single to low double digits. In 2009, Westwood said its network business should be up, while Metro Traffic will remain soft.
The stock closed at $0.23 and is at risk of being delisted from the New York Stock Exchange.