Arbitron Inc. Reports 2012 First Quarter Financial Results

by Kevin Ross - Posted Friday, April 20th, 2012. Category: Of Interest

 width=Company reports earnings per share (diluted) of $0.64;

Net income increases 9.6 percent on revenue growth of 5.5 percent;

Reiterates 2012 full-year guidance for revenue and earnings per share.

Arbitron Inc. (NYSE: ARB) today announced financial results for the first quarter ended March 31, 2012.

Net income for the quarter increased 9.6 percent to $17.8 million, or $0.64 per share (diluted), compared with $16.2 million, or $0.59 per share (diluted), for the first quarter of 2011.

For the first quarter of 2012, the Company reported revenue of $106.4 million, an increase of 5.5 percent compared to revenue of $100.9 million during the first quarter of 2011. Revenue for the quarter benefited primarily from annual rate increases, including the continued phase-in of contracted price increases for the Company’s Portable People Meterâ„¢ (PPMâ„¢) service.

Costs and expenses for the first quarter 2012 increased by 4.7 percent to $75.2 million from $71.8 million in the first quarter 2011.   Approximately $2.8 million of the increase was due to costs associated with Arbitron Mobile, which was acquired in July 2011, and to planned incremental investments in cross platform initiatives.   The net pre-tax investment during the first quarter of 2012 in our cross platform initiatives and Arbitron Mobile, was $3.0 million, compared to $1.0 million in the first quarter last year.

Operating income in the first quarter 2012 increased 7.4 percent, to $31.2 million from $29.1 million in the first quarter 2011.

EBIT (earnings before interest and income tax expense) for the first quarter 2012 was $28.9 million, an increase of 8.7 percent compared with EBIT of $26.6 million for the first quarter of 2011. The Company’s EBIT margin for the first quarter 2012 increased to 27.1 percent from 26.3 percent in the first quarter of 2011.

EBITDA (earnings before interest, income taxes, depreciation and amortization) was $36.6 million in the first quarter of 2012, an increase of 8.1 percent compared with EBITDA of $33.9 million in the first quarter of 2011. The Company’s EBITDA margin for the first quarter 2012 increased to 34.4 percent from 33.6 percent in the first quarter of 2011.


Management Comment on First Quarter 2012 Results

Said William T. Kerr, President and Chief Executive Officer:

“Our results and our activities in the first quarter are well aligned with our long standing priorities for enhancing our core services and for generating revenue growth.”

“We unveiled our marketing mix modeling service at the recent Advertising Research Foundation convention.   We expect to have the complete service up, running and ready to improve radio‘s visibility among the top agency media planners by the middle of the summer.”

“Digital radio remains a key priority as we continue our work to follow radio onto its new digital platforms in order to quantify this growing audience segment thereby enabling customers to monetize it.”

“Our cross platform initiatives continue to demonstrate the value that our unique personal, passive and portable measurement technologies can bring to this emerging marketplace.”

“Finally, with the launch of a new, syndicated mobile measurement panel, Arbitron Mobile is moving to expand its footprint here in the United States,” said Mr. Kerr.

2012 Full-Year Guidance

Arbitron is reiterating its revenue and earnings per share guidance for 2012.

Arbitron expects 2012 revenue to increase between 5 percent and 7 percent over its 2011 revenue of $422.3 million. Arbitron’s cross platform initiative and Arbitron Mobile are expected to account for $4 million to $7 million of the Company’s 2012 revenue compared to $1.5 million in 2011.

The Company anticipates 2012 earnings per share (diluted) between $2.15 and $2.30, an increase of 8 percent to 15 percent over comparable 2011 earnings per share (diluted) of $2.00, which excludes the impact of an impairment charge of $0.07 per share (diluted) taken in the 4th quarter 2011.   These estimates include anticipated net investment of approximately $12 million pre-tax in Arbitron’s cross platform initiatives and Arbitron Mobile in 2012.

Earnings Conference Call: Schedule and Access

Arbitron will host a conference call at 10:00am Eastern Time, Thursday, April 19.

The Company invites you to listen to the call toll-free by dialing (877) 262-6702. The conference call can be accessed from outside the United States by dialing (443) 863-7301. To participate, users will need to use the following code: 68568491. The call will also be available live on the Internet at the following sites: www.arbitron.com and www.streetevents.com.

A replay of the call will be available from 1:00pm on April 19, 2012, through 11:59pm on April 26, 2012. To access the replay, please call (toll-free) (855) 859-2056 in the United States or (404) 537-3406 if you’re calling from outside of the United States. Replay listeners will need to enter the following code: 68568491.

Presentation of Non-GAAP Information

The terms EBIT (earnings before interest and income taxes) and EBITDA (earnings before interest, income taxes, depreciation and amortization) are non-GAAP financial measures that the management of Arbitron believes are useful to investors in evaluating the Company’s results.   These non-GAAP financial measures should be considered in addition to, and not as a replacement for, or superior to either net income as an indicator of Arbitron’s operating performance, or cash flow, as a measure of Arbitron’s liquidity.   In addition, because EBIT and EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies.   For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP equivalent, see the EBIT and EBITDA Non-GAAP Reconciliation, along with related footnotes, below.