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November 6, 2009: Citadel Broadcasting reports that it brought in net revenues of $183.8 million in the third quarter of 2009, down 14 percent from $213.9 million in Q3 2008. The company reduced its operating expenses by 11.8 percent, to $145.8 million from $168.7 million.

Citadel had a net loss in the quarter of $21.3 million (8 cents per share), compared to net income of 28 million (10 cents) in the same period a year ago.

The company notes in its 10-Q filing with the Securities and Exchange Commission that it was in compliance with its covenant under its Senior Credit and Term Facility as of September 30, and it expects to remain in compliance through the rest of the year.

Does Not Expect To Meet Covenants

But Citadel and its lenders in March amended the credit agreement to suspend some covenants this year while imposing new monthly covenants for 2010, and Citadel said in the filing that it does not expect to meet those covenants, including a requirement that it have at least $150 million of available cash as of January 15, 2010.

The SEC filing says, "Based on the current economic conditions and capital markets, the company does not expect to be able to meet its covenants under the Senior Credit and Term Facility as of January 15, 2010. If the company fails to do so, the company will be in default under its Senior Credit and Term Facility and under the terms of its convertible subordinated notes."

Citadel, which hired a financial adviser in May to help evaluate its operations, said it is "currently in discussions with its lenders regarding this matter, including the possibility of seeking relief through a Chapter 11 filing under the U.S. Bankruptcy Code; however, there can be no assurance that any definitive agreement shall be reached."

The company added that, if it defaults, the due dates of its debts would be accelerated, and "the company would not be able to satisfy these obligations," so it "would likely need to seek relief through a Chapter 11 filing."

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