Arbitron Inc. Reports 2012 Second Quarter Financial Results

COLUMBIA Md., July 19, 2012 /PRNewswire/ -- Arbitron Inc. (NYSE: ARB) today announced results for the second quarter ended June 30, 2012.

Net income for the second quarter 2012 increased 31.4 percent to $10.0 million, or $0.37 per share (diluted), compared with $7.6 million, or $0.27 per share (diluted), for the second quarter of 2011.

The Company reported revenue of $104.4 million, an increase of 9.1 percent over revenue of $95.7 million during the second quarter of 2011.  Factors contributing to the second quarter revenue increase include annual escalators in the Company's multi-year radio ratings contracts, in particular, the continued phase-in of contracted price increases for the Portable People Meter™ (PPM^®) service as well as growth in revenues from the Company's cross-platform and mobile services. In addition, second quarter revenue benefited from the timing of certain items associated with survey data from prior periods.

Costs and expenses for the second quarter increased by 5.8 percent to $93.8 million in 2012 from $88.7 million in 2011.

Earnings before interest, income tax expense, depreciation and amortization (EBITDA) for the quarter was $23.6 million, an increase of 19.7 percent compared with EBITDA of $19.7 million for the second quarter of 2011. 

EBITDA margin in the second quarter increased to 22.6 percent from 20.6 percent for the same period last year.

For the six months ended June 30, 2012, net income increased 16.5 percent to $27.8 million compared with $23.8 million in 2011. Earnings per share (diluted) for the first six months of 2012 was $1.02 compared with $0.86 for the first six months of 2011.

Revenue for the first six months of 2012 was $210.8 million, an increase of 7.2 percent compared to revenue of $196.6 million for the same period in 2011.

Costs and expenses for the six months ended June 30, 2012 increased by 5.3 percent to $169.0 million from $160.5 million.

EBITDA increased 12.4 percent to $60.2 million in the first six months of 2012 from $53.6 million for the same period in 2011, with EBITDA margins of 28.6 percent and 27.3 percent, respectively.

Management Comment on Second Quarter 2012 Results

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

"Throughout the second quarter, we remained focused on our longstanding priorities: pursuing opportunities for revenue growth while enhancing the value and utility of our core services.

"The Discovery Channel signed on for our new cross-platform service to evaluate how its radio and television tune-in campaign delivered viewers to the 2012 premiere episode of The Deadliest Catch, its popular reality program. Our new promotion evaluation service takes advantage of the radio and television measurement capabilities of our existing PPM measurement panels.

"Arbitron Mobile reached an agreement with iResearch, a leading online measurement company in China, to use our on-device smartphone and tablet meter technology to jointly operate a syndicated mobile media research service in mainland China, the world's largest smartphone market.

"On the digital radio front, we have completed the development of a methodology for retrieving, storing and processing daily raw streaming log file data from broadcasters and content delivery networks, and continued the important dialogue with the radio industry on the appropriate approach and reporting framework for our planned integrated radio ratings service.

"Throughout the quarter, we maintained our efforts to enhance the quality of our radio ratings services. Based on these efforts and on our progress, and as we just announced, the Media Rating Council has accredited the average quarter hour monthly radio ratings data produced by our PPM service in five additional markets, including Los Angeles. In total, the ratings data produced in 14 markets can now display the MRC double checkmark logo.

"Even as we invested in our core services and in growth initiatives, we continued to deliver margin growth and were able to return capital to our shareholders through dividends and stock repurchases."

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.

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 fourth quarter 2011. These estimates include an 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 10:00 a.m. Eastern Time, today, July 19, 2012.

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: 93475335. 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 July 19, 2012, through 11:59pm on July 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: 93475335.

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.

About Arbitron

Arbitron Inc. (NYSE: ARB) is an international media and marketing research firm serving the media—radio, television, cable, and out-of-home; the mobile industry; as well as advertising agencies and advertisers around the world. Arbitron's businesses include: measuring network and local market radio audiences across the United States; surveying the retail, media, and product patterns of U.S. consumers; providing mobile audience measurement and analytics in the United States, Europe, Asia, and Australia; and developing application software used for analyzing media audience and marketing information data.

The Company has developed the Portable People Meter™ (PPM®) and the PPM 360™, new technologies for media and marketing research.

Portable People Meter™, PPM® and PPM 360™ are marks of Arbitron Inc.

PPM ratings are based on audience estimates and are the opinion of Arbitron and should not be relied on for precise accuracy or precise representativeness of a demographic or radio market.

Arbitron Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements regarding Arbitron Inc. and its subsidiaries in this document that are not historical in nature, particularly those that utilize terminology such as "may," "will," "should," "likely," "expects," "anticipates," "estimates," "believes," "plans," or comparable terminology, are forward-looking statements based on current expectations about future events, which we have derived from information currently available to us. 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, in no particular order, whether we will be able to:

• successfully obtain and/or maintain Media Rating Council, Inc. ("MRC") accreditation for our audience ratings services;
• renew contracts with key customers;
• collect, manage, and process the consumer information we utilize in our media marketing and information services in compliance with applicable data protection and privacy statutes, regulations, and other requirements;
• successfully execute and maintain our cross-platform and mobile measurement initiatives;
• support our current and future services by designing, recruiting, and maintaining research samples that appropriately balance quality, size and, operational cost;
• successfully develop, implement, and fund initiatives designed to enhance sample quality;
• successfully manage costs associated with cell phone household recruitment, targeted in-person recruitment, and address-based sampling;
• successfully maintain and promote industry usage of our media and marketing information services, a critical mass of broadcaster encoding, and the proper understanding of our services and methodologies in light of governmental actions, including investigation, regulation, legislation or litigation, customer or industry group activism, or adverse community or public relations efforts;
• successfully manage the impact on our business of the current economic environment generally, and in the advertising market, including, without limitation, the insolvency of any of our customers or the impact of economic environment on our customers' ability to fulfill their payment obligations to us;
• successfully integrate acquired operations, including differing levels of management and internal control effectiveness at the acquired entity;
• effectively respond to rapidly changing technologies by creating proprietary systems to support our research initiatives and by developing new services that meet marketplace demands in a timely manner;
• successfully execute our business strategies, including evaluating and, where appropriate, entering into potential acquisition, joint-venture or other material third-party agreements;
• successfully develop and implement technology solutions to identify and report consumer use of new and existing forms of media content and delivery, and advertising in an increasingly competitive environment; and
• compete with companies that may have financial, marketing, sales, technical or other advantages over us.

There are a number of additional important factors that could cause actual events or our actual results to differ materially from those indicated by such forward-looking statements, including, without limitation, the risk factors set forth in the caption "ITEM 1A. — RISK FACTORS" in our Annual Report on Form 10-K for the year ended December 31, 2011, and elsewhere, and any subsequent periodic or current reports filed by us with the Securities and Exchange Commission.

In addition, any forward-looking statements contained in this document represent our estimates only as of the date hereof, and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

SOURCE Arbitron Inc.