Citadel Reports $848M 4th Quarter Loss

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Jun 9, 2005
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Citadel Broadcasting today (Feb. 29) brought home a very bad report card and the big guy, chairman of the board and CEO Farid Suleman, says things are going to change. And change fast -- beginning this week and over the next two weeks. It could get ugly.

Let’s go to the numbers first: Citadel had a fourth quarter net loss of $848 million, or $3.24 per share, compared with a net loss of $1.1 million on a penny a share during the same quarter in 2006. A poll of analysts by Thomson Financial and Reuters’ Estimates called for a profit of 7 cents per share on revenue of $ 246.5 million.

The New York and Las Vegas-based radio group said its annual loss was $1.29 billion, or $6.61 per share, compared with a loss of $48 million, or 43 cents per share, in the prior year. It closed on its $2 billion acquisition of more than two dozen ABC radio stations in major markets on June 12 which helped Citadel’s full-year revenue soar 66% to $719.8 million from $432.9 million a year earlier. However, Citadel said that many of the newly acquired stations and markets under-performed and the company took a significant asset impairment charge which it attributed to “a continued deterioration in the radio marketplace and to a decline in the company’s stock price during the three months ended December 31, 2007.”

In its quarterly statement, Citadel added “income was also impacted by an increase in depreciation and amortization of $9.3 million and an increase of $2.2 million in corporate general and administrative costs, offset by the operations of the ABC Radio stations and Network.” Citadel losses were “primarily attributable to lower revenues in our San Francisco, Calif.; Washington, D.C.; Chicago, Ill.; Atlanta, Ga.; New York, N.Y.; Birmingham, Ala; Dallas, Texas; and Los Angeles, Calif., radio stations.”

But during a Friday morning teleconference with investors and Wall Street analysts, Suleman, Citadel’s chairman and CEO, was even more precise. “This was a very difficult and disappointing year. The biggest disappointment was the major market radio stations that we acquired from Disney in 2007. On an analyzed performance basis, decline was across the board with every major market decline. National was a complete disaster. The markets were down but we underperformed the markets by a factor of almost two-to-one. To put some of the declines in perspective, in the fourth quarter alone, in New York, ‘PLJ’s cash flow was down over 50%, this was on a 17% decline in revenues. This kind of decline came for a number of reasons. As we said, national was down, we were more affected by the writers’ strike than in other markets, but our ratings have also been down. We have our work cut out in a lot of markets. “

Suleman said that Citadel began instituting major restructuring of the company’s major markets this past week and will continue over the next two weeks. The restructuring will “create a very significant savings in costs and position the stations for major growth even in a zero-based growth environment,” he said, adding that because of the changes, the company will offer no financial guidance for the year.

Suleman wants to stabilize Citadel’s cash flow to the 2007 levels and make up about $200 million in losses by 2010. To do so, he called for “management changes, format changes, programming changes and self-management changes so that we can recoup in a zero revenue growth environment the under performance that exists.”

“There is at least $20 million of potential cash flow from assets that are just not producing any cash flow right now. There is another $15 to $20 million in streamlining and expense reductions to make the company more responsive to the market,” Suleman said. “2008 is the time and it will all be done before the end of the first quarter. “

Suleman said, “You want to get every opportunity to perform. The environment is such that you don’t have too much time so there could be changes across the board,” Suleman said. “The time for talk is over and it is now time for the walk. We will have a plan to get everything done in next three to six months and we expect to see major changes in 2009 and 2010. But everything will be done in 2008,” Suleman concluded.

Just before noon, nearly 2 million shares of CDL had traded hands, and the issue had declined by 26 cents or more than 19% to $1.10 a share.
Edit*** I suck at spelling Thread titles. Can a mod help me out?
 

BCH

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Wackbag Staff
Jun 9, 2005
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Fixed your title there buddy.

Good thing Op and Ant got in at 19 :rolleyes: