Dial Global looked very different at the end of 2011 than at the beginning. It had acquired Westwood One and used its Nasdaq listing to become a public company. So the 2011 data just filed with the SEC shows some big changes over 2010.
Revenues increased $37.2 million, or 39.5%, to $131.3 million. But nearly all of that increase was the result of adding $36.7 million from Westwood One.
The cost of revenue shot up $34.8 million, 87.2%, to $74.7 million. Again, that was mostly due to adding $30.9 million in overhead from Westwood One.
Dial Global’s gross profit increased $2.4 million, or 4.4%, to $56.6 million. “The increase is the result of higher gross profit from the acquisition of Westwood of [$5.8 million], partially offset by increased costs of [$3.9 million], primarily from increased production costs of [$2.2 million] costs related to our NFL programming and from additional employee expenses of [$1.5 million] related to an increase in employee headcount.” Dial Global reported that it had approximately 600 employees at the end of 2011. [Note: RBR-TVBR has converted the numbers in the SEC report above to millions from the standard practice of reporting dollars with three zeros omitted.]
As you would expect, Dial Global also had $3.1 million in restructuring charges and $7.3 million in transactions costs related to the merger.
All in for 2011, Dial Global posted an operating loss of $6.6 million, compared to operating income of $11.2 million for 2010. The net loss from continuing operations was $9.2 million, up from $8 million the previous year.
Oaktree Capital’s Triton Digital owns a 59% stake in the combined company and The Gores Group, which formerly controlled Westwood One, owns 31% of Dial Global, so they have a lot at stake. The SEC filing warned that advertising demand has not improved to pre-recession levels, so the network radio business is still challenging.
One bit of good news, though: Dial Global’s long-term distribution agreement with CBS Radio runs through March 31, 2017, so it has a guaranteed outlet for a significant portion of the advertising it sells.
RBR-TVBR observation: Lots of moving parts there. Putting together the merged company was the most important part of 2011. Now the management team at Dial Global has to deliver on making the resulting company greater than the parts that went into it.