Arbitron, Inc. (NYSE:ARB)
Q4 2008 Earnings Call
February 17, 2009 10:00 am ET
Thomas Mocarsky – Vice President of Press & Investor Relations
Michael P. Skarzynski – President, Chief Executive Officer & Director
Sean R. Creamer – Chief Financial Officer & Executive Vice President Finance and Planning
Alexia Quadrani – JP Morgan
My name is Raquel and I’ll be your conference operator today. At this time I would like to welcome everyone to the Arbitron fourth quarter and yearend 2008 conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question and answer session. (Operator Instructions) I would now like to turn the call over to Senior Vice President of Press and Investor Relations, Mr. Tom Mocarsky.
Welcome to Arbitron’s fourth quarter and yearend 2008 conference call. I’m Tom Mocarsky and I will be your moderator for today’s call. Today I have the pleasure of introducing Michael Skarzynski, President and Chief Executive Officer and Sean Creamer, Chief Financial Officer. In today’s call Michael and Sean will review Arbitron’s activities, accomplishments and financial results for the fourth quarter and yearend 2008. They will also make some comments about our expectations for 2009.
After the presentation we will be happy to take your questions. But, before we begin today’s presentation I do want to note that this morning’s discussion includes forward-looking statements. These forward-looking statements are within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on our current expectations about future events. Arbitron derived these expectations from the information that is currently available to us. Actual results might differ materially from the results projected in our forward-looking statements which involve known and unknown risks.
For a discussion of the factors that could cause our actual results to differ materially from our forward looking statements, please refer to Arbitron’s 10K for the period ended December 31, 2007, our quarterly report on Form 10Q for the period ended September 30, 2008 and elsewhere and within any subsequent periodic current reports filed by us with the Security & Exchange Commission. A copy of all these documents are on file with the SEC.
At this time I want to turn the call over to Michael Skarzynski.
Michael P. Skarzynski
This is my first opportunity to address Arbitron’s shareholders in an earnings call since joining the company as President and CEO on January 12th. It is my great honor and pleasure to serve as the new president and CEO of Arbitron. I am absolutely thrilled and excited to lead our company at this exciting time.
I want to start by thanking Steve Morris for his significant contributions during his 16 year tenure as the leader of Arbitron. As you know Steve continues to serve as Chairman of the Board. On behalf of the customers, employees, partners and shareholders I would like to extend to Steve our deepest gratitude, respect and appreciation for all that he has done for Arbitron. Thank you very much Steve.
In my comments today I will cover four topics: number one, Arbitron’s accomplishments for the fourth quarter and for the full year 2008; number two, opportunities and challenges that I see for the company in 2009 and beyond; number three, reasons that I joined Arbitron; and number four, some comments on the road map for Arbitron’s future growth.
Let me begin with a high level recap of the fourth quarter and the full year 2008. Thanks to the restart of our portable people meter or PPM commercialization program, our revenue increased by 16.8% in the fourth quarter and by 9% for the full year 2008. Full year revenue for 2008 was $368.8 million. The 9% increase for the year hit the mid range of the company’s revenue guidance of 8% to 10%.
At the bottom line the company’s earnings per share or EPS for the fourth quarter was $0.13 per fully diluted share. For the full year, EPS was $1.36 which fell slightly below the mid range of the company’s revised 2008 guidance of $1.30 to $1.44. My colleague Sean Creamer will review the financials for the fourth quarter and full year 2008 in detail during his remarks.
Let me turn now to a review of the company’s marketplace accomplishments for 2008. We restarted the commercialization of the PPM service in 2008 after a nine month delay. In 2008 Arbitron brought electronic measurement to radio in 12 new markets including the largest three cities in the United States: New York, Los Angeles; and Chicago as well as San Francisco, Dallas, Atlanta, Detroit and Washington DC. By yearend Arbitron had lit up a total of 14 PPM markets.
Radio ad revenue for these 14 markets represents nearly 50% of all the radio ad revenue in the top markets where we plan to commercialize the PPM service. We are very proud of this significant accomplishment and important milestone.
Arbitron announced on January 9, 2009 that the company had received accreditation by the Media Rating Council for the average quarter hour PPM radio rating service in Riverside San Bernardino. MRC accreditation for Riverside San Bernardino which is the company’s second PPM market to earn MRC accreditation demonstrates that our PPM commercialization program can deliver MRC accreditable audience estimates.
Arbitron worked very hard in 2008 to strengthen the quality and value of our diary based radio rating services. We announced a number of diary market improvement initiatives designed to add cell phone only households in to our diary market samples, improve the representation of 18 to 34 year olds and accelerate work on electronic and online alternatives to the paper and pencil diary.
These two major company programs: number one, the commercialization and continued improvements of the PPM markets including seeking to obtain and maintain MRC accreditation for PPM markets; and number two, continuous improvements in our diary markets including maintaining MRC accreditation represented the company’s highest marketplace priorities in 2008. These two programs will continue to represent the company’s top priorities in 2009.
Let me now briefly address two material events that occurred in the fourth quarter 2008 and the company’s actions to address these events. The first event, in early October, 2008 both Arbitron and the Attorney Generals of New York and New Jersey filed lawsuits related to the commercialization of PPM. Throughout the fourth quarter Arbitron worked hard to protect our company’s interest and maintain the momentum in our PPM commercialization program.
On January 7, 2009 we announced the settlement covering the matter with the Attorney Generals of New York and New Jersey. In these settlements Arbitron agreed to a number of actions which are consistent with our continuous improvement program for PPM markets. We intend to focus on helping our radio broadcast customers in New York and New Jersey and across the United States to use our PPM platform to build their listening audiences and build their ad revenue as Arbitron applies with the terms of the settlement agreements.
The second event, in November 2008 two of Arbitron’s leading customers Cumulus and Clear Channel invited Nielsen in to the local market radio ratings business. Arbitron takes extremely seriously the entry by Nielsen in to our core business of radio ratings. Nielsen is a formidable competitor with significant resources. Arbitron has faced marketplace challenges in the past and we are working to maintain our leadership role in the radio ratings marketplace.
I want to assure our shareholders that Arbitron is taking appropriate actions to compete against Nielsen. We intend to win back the Cumulus and Clear Channel business lost to Nielsen in the sticker diary markets.
The second topic, Arbitron’s opportunities and challenges. Now, I’d like to address Arbitron’s challenges and opportunities in 2009 commenting first on the PPM commercialization and improvement plans. In 2009, Arbitron has an ambitious goal of commercializing 19 new PPM markets. This roll out is a huge effort and Arbitron is on track to implement a very demanding commercialization schedule.
We are applying the lessons from our experience in the first 14 PPM markets to improve continuously our overall PPM program and to meet our commercialization goals for PPM in 2009. We will continue to address specific customer priorities in terms of the quality of our PPM samples in our PPM continuous improvement program. Thanks to this improvement program, we are already making good progress in making improvements in key operational areas including sample size, proportionality and related quality metrics.
I am on a listening tour and am in regular and frequent dialog with our PPM market customers asking customers how Arbitron is doing and seeking customer input as to how Arbitron can improve. I believe that Arbitron will make further improvements in the quality and operations of our PPM services.
Now, I’d like to comment on the diary market improvement plans. Turning to our diary based services I would like to discuss several programs that Arbitron has put in place to strengthen the quality and value of our diary rating services. We are adding cell phone only households to the survey sample in all markets. We are improving participation of age 13 to 34 segment.
We are enhancing the qualitative and consumer section of the diary. We are promoting a second chance program to reach persons who agreed to take part in the survey but did not return their diary. Last, we are accelerating the development of electronic and online alternatives to the diary for all markets. We will continue to invest in improvement programs in our diary market in 2009.
Customer satisfaction improvement plans; personally I am very active and engaged with our customers and I plan to spend a substantial amount of my time listening to and engaging with customers. I am also asking every Arbitron executive to engage with our customers. My personal objective and commitment is to create a fresh start at Arbitron and change Arbitron’s culture and outbound focus so that customers view Arbitron as a partner. I want customers to regard Arbitron as an asset and not simply as a tool.
I don’t have to tell you that radio broadcasters are experiencing unprecedented declines in ad revenue. Analysts are estimating a 9% decline in 2008 from prior year and are projecting a further decline of up to 10% or more in 2009. Arbitron wants to be in position to help our radio broadcaster customers to navigate this difficult environment. Arbitron wants to help our customers to build their revenue, their audiences and to improve the relative position of radio in the overall advertising marketplace.
MRC accreditation; Arbitron is committed to working with the Media Rating Council to achieve and maintain accreditation in all of our PPM and diary markets. In my first month with the company I have devoted a substantial amount of time in meetings with the MRC executive staff and Arbitron’s customers that serve on the MRC Radio Committee as well as in internal company prep meetings related to MRC accreditation activities. The company’s goal is to obtain MRC accreditation in new PPM markets and to maintain accreditation in PPM and diary markets.
Number three, some reasons why I wanted to join Arbitron. From my earlier recap you can see that 2008 has been quite a year for Arbitron. I have the privilege of joining Arbitron as President and CEO at what I believe is a tipping point for the company. These are very interesting, very challenging and very difficult times for Arbitron. I was attracted to join Arbitron for many reasons, here are my top three.
First, Arbitron has a strong research organization. I have worked at companies with world class research organizations during my time at AT&T and Lucent working with [inaudible]. I know that a strong research team can be a tremendous asset when it’s given the right goals, management and resources.
Second, Arbitron has a strong market leadership position. This is a tremendous asset and serves as a foundation on which we intend to build future growth for the company. It’s a foundation that I expect will serve the company well as we move forward in to new markets and opportunities.
Third, Arbitron has a tremendous market opportunity to build a single source ROI multimedia platform. We can do this based on the success and market leadership in the company’s core radio ratings business. There are numerous opportunities in the company’s home market in the United States as well as in international markets to provide integrated measures of multimedia including radio and the three screen markets of television, wireless and Internet. Arbitron has developed a solid extensible technology platform in personal, portable and passive electronic measurement that can be deployed as our platform for growth in multimedia markets.
Number four, road map; before I turn the call over to Sean let me spend a few minutes sketching out my road map for Arbitron’s future growth. Our core business is radio ratings measurement which is the foundation on which we intend to grow the company. We intend to develop new analytical tools that will help radio broadcasters build their audiences, increase their revenue and promote their value proposition to national and local market advertisers.
PPM is the centerpiece of the company’s effort to expand in to multimedia measurement. Our personal, portable and passive electronic measurement system is unique in the world of media research. The PPM has the unique ability to tie together audience metrics for a number of media and connect these audiences with sales and ROI measures. Ground work for this initiative is already in place and outgrowth from what we learned from project [inaudible].
I expect to move quickly in to this arena with a focus strategy. We expect to achieve our growth objectives through a combination of organic growth and strategic investments including acquisitions, investments in ventures, licensing, partnerships, distribution agreements and other collaborative relationships. For a small cap company Arbitron has a solid cash flow from operations and a strong balance sheet.
In making decisions on the best use of the company’s capital we will consider the company’s working capital requirements, capital expenditures, dividends, stock repurchases and strategic investments. Now that the PPM commercialization efforts are well underway you can expect that the company will become more active in evaluating strategic opportunities including acquisitions, licensing, distribution agreements, joint ventures, venture investments and partnerships that have compelling returns.
To enter or explore new markets Arbitron will evaluate a full range of alternatives including investments, partnerships and joint ventures. I am also working with the executive team to identify opportunities for expense reduction and process and quality improvements. I expect to implement completely these reduction and improvement programs including organization changes in the first quarter.
I have reenergized the strategic planning process at Arbitron with the goal of enhancing our current products and services and identifying the best growth opportunities for the company including opportunities within the multimedia market. When we are ready, we will come back to you with the specifics to provide an update on the strategic plans goal, guidance and intents.
Growth in revenue and EPS remain the company’s most important financial goals and Arbitron will continue to report annual guidance for revenue and EPS. As Sean and Steve have consistently noted in previous earnings call in a world of rapidly expanding cell phone only households there can be no guarantees that we will be able to restore margins to historical levels. Certainly our core radio broadcaster customers are experiencing difficult and challenging times. This reality should temper expectations.
We believe that enhancing and protecting our core radio ratings business in an increasingly competitive marketplace is paramount to our long term success. We expect to continue to invest in quality and service enhancements aimed at maintaining our market position. The fundamental building blocks of our business model, revenue visibility, strong cash flow and solid margins are expected to remain intact for 2009.
Last week I completed my first month at Arbitron. I’m impressed by what I have seen of the organization. I am very excited by the opportunities and I am fully committed to deliver significant profitable growth to our shareholders. Let me turn the call over to Sean who will go over our fourth quarter and full year results in some detail and present our guidance for 2009.
Sean R. Creamer
I’d like to spend a few minutes reviewing our 2008 financial results, providing some color on our performance and discussing our guidance. For the fourth quarter of 2008 revenue was $93.6 million up $13.4 million or 16.8% compared to the fourth quarter last year. Obviously the commercialization of the 12 new markets in the third and fourth quarters of 2008 drove much of that increase.
Cost of revenue was $56.1 million up $6.9 million or 14% compared to the same quarter last year. This increase is largely attributable to incremental costs relating to management of the PPM panels for our commercialized markets as well as recruitment of the panels scheduled to commercialize in the first and second quarters of this year. Specifically we had an average of nearly 32,500 panelist during the fourth quarter versus 18,560 in 4Q ’07.
In addition, as a result of the dislocation of residents and lack of essential services during and after Hurricane Ike, we announced that we issued PPM data in Houston for only three of the four weeks in September and two of the four weeks in October. The lost revenue associated with this was approximately $400,000. In addition, the call center we operate in Houston was severely damaged leading to our decision to close the facility.
We have back filled the loss capacity by running more shits in our other two call centers and the current costs associated with displaced workers net of anticipated insurance recoveries were in the range of $500,000 and are reflected in cost of revenue.
Selling, general and administrative expenses were $26.7 million for the fourth quarter that’s up $6.6 million or 32.5% when compared to the $20.2 million we recorded in the fourth quarter 2007. We incurred net costs of $6.4 million in litigation and settlements as well as other interactions with governmental entities primarily regarding our PPM radio rating service. Our $5.8 million in net legal fees for the quarter is in line with the guidance we provided on our third quarter call of $4 to $6 million.
We recorded share based compensation of $2 million during the quarter, most of which continues to be reflected in SG&A and that compares to $1.5 million recorded in 4Q ’07. Research and development expense was $11.6 million up $1.1 million or 10.9% compared to the fourth quarter of last year as we had increased IT spend for both PPM and diary. Most of our $1.3 million in investments in multimedia in the quarter are included in R&D as well.
Our equity in net income of affiliates was $7.7 million for the quarter a $1.7 million increase from the $6 million recorded in the fourth quarter last year. Of this variance, $1.2 million is attributable to our share of the Apollo LLC loss that was reported in the fourth quarter of ’07. The LLC was liquidated during the second quarter of 2008 and therefore no Apollo loss is reflected this quarter.
Our share of the Scarborough joint ventures net income for the fourth quarter was $7.7 million as compared to $7.2 million recorded in the fourth quarter of 2007. For the quarter net interest expense was roughly $650,000 compared to net interest expense of only $4,000 reported in the fourth quarter last year. Increased borrowing on our credit facility and reduced interest income attributable to our lower cash balances drove the change.
Income taxes on continuing ops for the fourth quarter were $2.7 million and net income was $3.4 million or $0.13 per diluted share compared to $3.7 million or $0.13 per diluted share for the fourth quarter of last year. Earnings before interest and taxes EBIT were $6.7 million for the quarter, that’s up $532,000 from the $6.2 million reported in the fourth quarter last year. Depreciation and amortization for the quarter totaled $4.8 million versus $3.9 in 4Q ’07 with capital expenditures for the fourth quarter of ’08 of $9.3 million. EBITDA in the quarter was $11.6 million compared to $10.1 million that was generated in fourth quarter of ’07.
Turning our attention to the full year results, revenue was $368.8 million up $30.4 million or 9% compared to 2007 and in line with our full year guidance of 8% to 10%. The commercialization of 12 PPM markets during 2008 along with the full year PPM revenue associated with that Houston and Philadelphia markets that commercialized in the first half of 2007 contributed significantly to the year-over-year revenue growth.
Cost of revenue for the year was $185.6 million, an increase of 18.1% versus the $157.2 million reported last year as we more than doubled the average of PPM panelist for the year to 27,240 in 2008 from 11,900 in 2007. Selling, general and administrative expenses were $85.3 million during 2008, that’s up $5.8 million compared to 2007 and again, increased legal expenses were the primary driver.
Share based compensation totaled $8.4 million for 2008 up from $6.5 million in 2007 and in line with our original expectations. Research and development expense was $41.4 million for the year down $1.1 million or 2.6% compared to the prior year. This decrease resulted primarily from year-over-year reductions in cost associated with development and maintenance of certain client software and internal use applications.
Our equity and net income of affiliates was $6.7 million for the year versus $4.1 million in 2007. Our share of loss in the Apollo LLC was $1.9 million for the year and compares to $4.3 million loss reported in 2007. While our full year share of income in Scarborough was $8.6 million which is up $269,000 over 2007. Net Apollo expenses outside the LLC were $1.3 million for the year for a total net Apollo related loss in 2008 of $3.2 million. For the year our total expense relating to multimedia initiatives outside of project Apollo was $2 million.
The resulting EBIT for the year was $63.1 million, that’s down $197,000 from the $63.3 million that we reported in the same period in 2007. EBITDA for the year was $80.6 million, that’s up 6.2% from the $75.9 million generated in 2007. 2008’s net interest expense was $1.6 million and that compares to net interest income of $1.5 million in 2007. Again, the increased borrowings and reduced interest income on our lower cash balances drove the change.
Income tax expense for the year was $24.3 million, that yields a full year effective tax rate of 39.5%. 2008 full year net income was $37.2 million this year 2008 or $1.36 per diluted share compared to $40.2 million or $1.35 per diluted share for 2007. Depreciation and amortization for the year was $17.5 million versus $12.6 million in 2007 with the increase attributable to ongoing capital expenditures required to support PPM initiatives.
Capital expenditures for the year totaled $32 million. From a balance sheet perspective we ended the year with $8.7 million in cash and interest bearing debt outstanding of $85 million or net debt of $76.3 million. This compares to 2007 yearend net cash position of $9.1 million. The reduction in our cash position and increased borrowings year-to-year is largely attributable to dividends and share repurchases during the year specifically in ’08 we paid roughly $11 million to our shareholders in the form of dividends and bought back $100 million of our stock while still appropriately investing in our business for the future.
We repurchased in excess of 2.2 million shares at an average price of approximately $44.50 under the current $200 million authorization. We do not disclose specifics regarding when we are or will be in the market. Securities law impose limitations with regard to the timing and quantity of repurchases and we are precluded from buying or selling ours securities when we are in possession of material non-public information. We are constantly evaluating the implications of current and ongoing events and other factors on our ability to repurchase shares but as a reminder, over calendar years 2006 through 2008 we have repurchased approximately 6.3 million shares.
That concludes by 2008 recap. I’d like to now address the financial guidance we issued today. However, before jumping in to the details, I think some context is appropriate. The current recession is negatively impacting virtually all companies and we are not immune. In fact, the radio industry has been particularly hard hit as advertising budgets are squeezed. Some analysts are projecting double digit declines in radio revenues for 2009. We can’t predict at this point how long these economic problems will persist. In this environment is it very important that we work with our customers where possible to help us collectively weather the storm.
Nielsen’s previously announced entry in to smaller radio markets means that we are in an increasingly competitive environment against a formidable company. However, we’re not backing down or backing out of any of our measured markets. We remain committed to all the markets we current measure and as Michael noted, it is our goal to win back the Cumulus and Clear Channel business loss to Nielsen and those markets and we are allocating the resources to do just that.
As Michael also noted, we are working hard to identify opportunities for expense reduction and process and quality improvements. To the extent that those efforts result in savings, those savings will be evaluated for possible redeployment in to our core product to subsidize improvement initiatives, to fund growth initiatives and to improve earnings.
Our focus is on increasing and extending the long term value of the Arbitron franchise. Protecting and supporting our existing customer base, ensuring our products and services are competitive from a price quality and service perspective and generating compelling financial returns are critical components to this overall goal. Our guidance was developed with these uncertainties and priorities in mind. We believe our ranges are sufficiently wide to contemplate the economic realities in the marketplace and what we currently anticipate as potential outcomes for the year.
With that in mind, we are forecasting revenue growth of 6% to 10% based on our current commercialization schedule. In 2009 we expect to commercialize 19 new markets however, since these markets are scheduled to commercialize throughout the year and our customer contracts allow for phased in PPM pricing increases the full impact of the PPM price uplift in these markets is not realized in the first year that a market goes live with PPM.
This revenue guidance also reflects the impact of the roughly $5 million in lost recognized revenue in 2009 stemming from Cumulus and Clear Channel signing with Nielsen in certain smaller markets. We expect the overall growth rate in our diary markets will be roughly equal to the level of our price escalators.
We’re also assuming that the difficult economy will continue to have a negative impact on our sales of more discretionary services, specifically our software and qualitative offerings. Our guidance range contemplates a potential 100 to 200 basis point reduction to our top line growth rate in 2009 as a result.
From a bottom line perspective we anticipate earnings per share of between $1.40 and $1.55. We will continue to produce ratings in the sticker diary markets and therefore 100% of the $5 million revenue loss drops to the bottom line. We are certainly pleased to be able to resolve all claims against Arbitron that were alleged in the lawsuits filed by the New York and New Jersey AGs and importantly to be in a position to accomplish this substantially within the framework of our ongoing continuous improvement program for PPM.
However, as I mentioned on our call last month there are incremental costs in 2009 as a result with respect to the various methodology initiatives and metric targets that were agreed to, many were already contemplated in our current business model however in some cases the agreement called for an acceleration of our plans for implementation and therefore the timing of the resulting cost is moved up as well.
We announced in January that we are increasing our cell phone only representation in our PPM panels by the end of 2009 in all commercialized markets. We are also introducing cell phone only in to our diary services. Both these initiatives are aimed at improving the delivery of the critical 18 to 34 demo. This is an expensive but necessarily qualitative quality initiative and in total represents an investment of nearly $10 million for the year.
In addition, our guidance contemplates $1.1 million in incremental 2009 cash compensation relating to the office of the CEO and the transition from Steve to Michael. There is also additional non-cash compensation stemming from the transition. We are projecting approximately $11 to $12 million expense for non-cash compensation for 2009 which is an increase of $3 to $4 million from 2008, nearly half of which relates to final vesting of Steve’s remaining equity grants and the initial vesting of Michael’s inducement grants.
I hope that information is helpful. I know we’ve covered a lot and I am sure there are questions so with that I would like to turn it over to the operator and ask that we open up the phone call for questions.
(Operator Instructions) Your first question comes from Alexia Quadrani – JP Morgan.
Alexia Quadrani – JP Morgan
Sean, just following up on your comments just now about the guidance for 2009, when you’re looking at the revenue guidance specifically the low end and the high end you obviously talked about the economy having an influence in that which makes a lot of sense but, it’s still a pretty big range. In the low end are you assuming maybe further drop off of some smaller market products given radio stations maybe choosing not to buy ratings for those markets anymore or are you looking for maybe Nielsen gaining more business in those smaller markets?
Sean R. Creamer
Well, we’re certainly not expecting to lose further business, that is our stated goal. I think the range is sufficiently wide to contemplate the realities and the uncertainties whether it be in bankruptcy risk which we certainly fielded a lot of questions about in the past or simply a more significant decline in our discretionary services sales which we’ve highlighted as an exposure.
We’ve put what we think is a reasonable base case but have tried to put sensitivities around that on both the upside and downside. We’re not sure how deep the recession will go or how quickly it will recover and I think we’ve expanded our range simply to try and contemplate the realities of that uncertainty.
Alexia Quadrani – JP Morgan
Not to just keep beating on this but just on the high end of the range, are you assuming some sort of full economic recovery or is it still sort of in the realm that things are going to stay soft but probably stabilize at some point in the year? I’m trying to get a sense of how optimistic the high end is?
Sean R. Creamer
I think the high end would assume just like the bottom end assumes a significant change in course so that the economy recovers more quickly at the high end and declines more rapidly on the low end.
Alexia Quadrani – JP Morgan
Historically, you had mentioned sort of a two year kind of big ramp up or step up in both revenue and kind of earnings growth once you see these PPM markets really come up and running. Should we still assume in 2010 obviously being sensitive to the economic environment that you should see further improvement in profitability and further revenue acceleration given this roll out schedule?
Sean R. Creamer
We’re not providing any guidance with respect to 2010. I will reiterate that the basic tenants of the business model remains intact in terms of how revenue ramps when PPM markets commercialize. I think you would have seen that certainly to a greater extend in our ’09 guidance had it not been for one, the economy and two, the drop off as a result of the loss Cumulus and Clear Channel business which obviously had an effect on the growth rate.
Alexia Quadrani – JP Morgan
The last question is have you seen any incremental signs either whether qualitative or quantitative that Nielsen has the intention to move further in to the radio marketplace?
Sean R. Creamer
We certainly aren’t aware of anything other than a stated test that was going to be conducted in Lexington Kentucky with the results to have been released in the middle of February. As of today we certainly have not heard anything. We can’t comment on anything beyond that because we’re simply not aware of anything else.
At this time there are no further questions. Mr. Mocarsky the floor is yours for closing remarks.
Michael P. Skarzynski
Thank you everyone for participating in the fourth quarter earnings conference call today. Thank you for your continued interest in Arbitron. I’d like to assure shareholders that we’re working hard to improve the company operations and achieve the level of improvement in revenue and EPS that we’ve given in our guidance and we look forward to sharing with you in coming weeks and months the results of our strategic plan goal guidance and intent and perhaps some other news on new activity in our application software front. Thank you very much and have a great day.
This concludes today’s conference call. You may now disconnect.
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