Business News

Clear Channel Outdoor Reports First Quarter 2011 Results

Monday 09. May 2011 - Revenues increase 7%

OIBDAN increases 16%
Clear Channel Outdoor Holdings, Inc. (NYSE: CCO) today reported results for the first quarter ended March 31, 2011.
First Quarter 2011 Results
The Company reported revenues of $650 million in the first quarter of 2011, a 7% increase from the $609 million reported for the first quarter of 2010. Excluding the effects of movements in foreign exchange rates, the revenue increase would have been 5%.1
Americas revenue increased $18 million, or 7%, compared to the first quarter of 2010, driven by revenue growth across most of the Company’s display types, particularly digital.
International revenue increased $23 million, or 7%, compared to the first quarter of 2010, primarily as a result of increased street furniture sales and an increase from movements in foreign exchange. Excluding the effects of foreign exchange1, revenues were up 4%.
As a result of the increase in revenues, the Company’s OIBDAN1 grew 16% over the first quarter of 2010. OIBDAN1 was $117 million for the first quarter of 2011 compared to $100 million for the first quarter of 2010.
Clear Channel Outdoor’s consolidated net loss was $10 million, or $0.03 per diluted share, during the first quarter of 2011. This compares to a consolidated net loss of $49 million, or $0.14 per diluted share, for the first quarter of 2010. See Table 1 (Financial Highlights) for an analysis of the change in consolidated net loss.
“We generated top line growth and increased returns from our outdoor assets during the first quarter,” stated Tom Casey, Executive Vice President and Chief Financial Officer. “The global advertising climate continued to improve in the outdoor sector and we saw strength across most of our displays in the Americas, as well as gains in street furniture in several international markets. Our digital revenues were particularly strong as we benefited from an expanding footprint and continued demand across many of our markets. Our improved revenue performance, combined with our emphasis on sustaining operating efficiencies, allowed us to expand our overall margins during the quarter. We continue to see positive trends and remain on track in executing our plan to grow market share and further improve the performance of our outdoor platform.”
Americas
Americas revenue increased $18.3 million compared to the first quarter of 2010, driven by revenue growth across most of its display types. Bulletin revenues increased primarily due to digital growth driven by the increased number of digital displays. Airport and shelter revenues increased due to higher average rates as a result of improved economic conditions.
Operating expenses2 increased $13.9 million during the first quarter of 2011 compared to the same period of 2010. The increase was primarily a result of increased site-lease costs driven by the increase in revenue. The Company also experienced an increase related to structure maintenance and electricity for new digital bulletins as well as existing displays, an increase in commission costs associated with the increase in revenue during 2011 and an increase in other administrative expenses. The first quarter of 2010 included a $3.8 million favorable litigation settlement.
Americas OIBDAN1 for the first quarter of 2011 was $94 million, an increase of 5% when compared with OIBDAN of $89 million for the same period of 2010. The growth in OIBDAN was driven by an overall improvement in business compared to 2010.
As of March 31, 2011, the Company had deployed 658 digital displays in 36 U.S. markets. This includes 43 digital displays that were installed during the first quarter of 2011.
International
International revenue increased $23.1 million compared to the first quarter of 2010, primarily as a result of growth in street furniture across most of the Company’s markets, particularly China and Sweden, as a result of improved economic conditions. Revenue growth was partially offset by lower revenues in France. Movements in foreign exchange resulted in an $8.0 million increase in revenues.
Operating expenses2 increased $9.9 million primarily attributable to higher direct production costs associated with the increase in revenue, as well as a $7.2 million increase from movements in foreign exchange. There was also an increase of $1.9 million primarily due to increased administrative costs. These increases were partially offset by a $2.1 million reduction in restructuring expenses and business tax related to a change in French tax law.
Led by the revenue growth from the Company’s street furniture business and an overall improvement in business compared to 2010, International OIBDAN1 for the first quarter of 2011 increased 41% to $45 million from $32 million for 2010. Excluding the effects of movements in foreign exchange rates1, the increase in OIBDAN was 39%.
Other Events
As previously reported, in June 2010 Mark P. Mays announced his decision to transition from his role as the Chief Executive Officer and President of CC Media Holdings, Inc. (“CCMH”) and Clear Channel Communications, Inc. (“CCU”), an indirect subsidiary of CCMH, and as the Chief Executive Officer of the Company, an indirect subsidiary of CCMH and CCU, to the Chairman of CCU, CCMH and the Company and asked the Board of Directors of CCMH to initiate a search for his replacement. The Board of Directors of CCMH has been actively searching for a replacement but, to date, has not identified a permanent successor.
Effective March 31, 2011, Mr. Mays ceased serving as the Chief Executive Officer and President of CCMH and CCU and as the Chief Executive Officer of the Company. Mr. Mays will continue to serve as the Chairman of the Board of the Company, CCU and CCMH and as an employee of CCU and CCMH pursuant to the terms and conditions of his Amended and Restated Employment Agreement, effective as of June 23, 2010, by and between CCMH, CCU and Mr. Mays.
On March 31, 2011, the Boards of Directors of CCMH, CCU and CCOH each (i) established a new “Office of the Chief Executive Officer” to serve the functions of the Chief Executive Officer and President until such time that a permanent replacement for Mr. Mays is hired and (ii) appointed Thomas W. Casey, the current Executive Vice President and Chief Financial Officer of the Company, CCU and CCMH, and Robert H. Walls, Jr., the current Executive Vice President, General Counsel and Secretary of the Company, CCU and CCMH, to also serve in such newly-created office for each of the Company, CCU and CCMH in addition to their existing offices which they will retain.