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Dial Global to Exit Nasdaq

Tells SEC third-quarter performance down due to late ad buy cancellations, more money flowing to digital, more competition

National audio content producer and distributer Dial Global is leaving the Nasdaq Stock Market.

Dial Global says the decision to voluntarily delist from Nasdaq was made after a review by its board. The review took into account factors like compliance costs and obligations that result from the maintenance of the company’s listing on Nasdaq, the relatively limited historical volume of trading in the company’s common stock and applicable federal securities laws.

Dial Global intends to file a form with the Securities and Exchange Commission to begin the delisting process later this month and anticipates the delisting would take effect on or about Dec. 6.

The decision comes after the company released its first financials since acquiring Westwood One. The acquisition increased Dial Global revenues from $25.018 million to $58.208 million, however it told the SEC that third-quarter “costs of revenue jumped from $10.870 million in 2011 to $39.625 million now.” Gross profit grew only slightly from $14.148 million in Q3 2011 to $18.583 now.

Additionally, Dial Global disclosed to the SEC that it will take a goodwill impairment charge of $67.218 million.

Based on its current financial projections, Dial Global told the SEC, “absent additional debt or equity capital from third parties, we anticipate that we will breach our debt leverage and interest coverage covenants for the quarters ended Dec. 31 and beyond.”

It chalks up its third-quarter performance to several factors, including late cancellations in ad buys, which Dial Global believes was a byproduct of the election and renewed economic uncertainty. The company also cited competitive factors, such as a greater diversity of digital ad platforms, meaning more ad money is flowing to digital, as well as increased competition from its competitors.

Despite the delisting, Dial Global will remain a public company. It hasn’t arranged for its common stock to trade on another national securities exchange. The company expects that, if one or more market makers determine to make a market in Dial Global common stock, the company’s common stock will then instead trade on the Over-The-Counter Pink Sheets.