Home URBAN Radio One, Inc. Reports First Quarter Results

Radio One, Inc. Reports First Quarter Results

May 17, 2010

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Radio One, Inc. (Nasdaq: ROIAK; ROIA) today reported its results for the quarter ended March 31, 2010. Net revenue was approximately $59.0 million, a decrease of 2.1% from the same period in 2009. Station operating income(1) was approximately $17.8 million, an increase of 5.0% from the same period in 2009. The Company reported operating income of approximately $3.8 million compared to an operating loss of approximately $42.8 million for the same period in 2009. Net loss was approximately $4.6 million or $0.09 per share, an improvement from the net loss of approximately $59.4 million or $0.84 per share for the same period in 2009.

Alfred C. Liggins, III, Radio One’s CEO and President stated, “The first quarter brought some much needed revenue growth to our core radio business, driven predominantly by national business, which was up 17.7% year-to-year and some uptick in local business, up 3.6%. Our core radio business also saw its second consecutive quarter with over $1.0 million in internet revenue, which had growth of 72.0% year-to-year. We continue to see healthy pacings in second quarter, with national pacing up 27.0% and local up 1.0%, although national has cooled somewhat over the past two to three weeks. I anticipate our second quarter core radio business finishing up with high single-digit growth.

The sales transition at Reach Media, away from a guaranteed revenue to a commissioned based sales representation agreement with Citadel, has gone as well as could be expected. The new internal sales team has settled in, and we believe that the new structure, coupled with increased demand will allow us to strengthen rates over the long-term.”

RESULTS OF OPERATIONS

		Three Months Ended March 31,
		2010	2009
			(as adjusted)²
STATEMENT OF OPERATIONS		(unaudited)
		(in thousand s, except share data)


	NET REVENUE	$ 59,018	$ 60,310
	OPERATING EXPENSES:
	Programming and technical, excluding stock-based compensation	18,585	19,925
	Selling, general and administrative, excluding stock-based compensation	22,605	23,406
	Corporate selling, general and administrative, excluding stock-based compensation	7,285	5,133
	Stock-based compensation	2,013	483
	Depreciation and amortization	4,721	5,231
	Impairment of long-lived assets	–	48,953
	Total operating expenses	55,209	103,131
	Operating Income (Loss)	3,809	(42,821)
	INTEREST INCOME	25	18
	INTEREST EXPENSE	9,235	10,779
	GAIN ON RETIREMENT OF DEBT	–	1,221
	EQUITY IN INCOME OF AFFILIATED COMPANY	909	1,150
	OTHER (EXPENSE) INCOME, net	(477)	50
	Loss before (benefit from) provision for income taxes, noncontrolling interest in (loss) income of subsidiaries and income (loss) from discontinued operations	(4,969)	(51,161)
	(BENEFIT FROM) PROVISION FOR INCOME TAXES	(309)	7,071
	Net loss from continuing operations	(4,660)	(58,232)
	INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax	63	(334)
	CONSOLIDATED NET LOSS	(4,597)	(58,566)
	NONCONTROLLING INTEREST IN (LOSS) INCOME OF SUBSIDIARIES	(29)	871
	CONSOLIDATED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (4,568)	$ (59,437)

	AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS
	NET LOSS FROM CONTINUING OPERATIONS	$ (4,631)	$ (59,103)
	INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax	63	(334)
	CONSOLIDATED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (4,568)	$ (59,437)

	Weighted average shares outstand ing – basic³	50,844,148	70,719,332
	Weighted average shares outstand ing – diluted³	50,844,148	70,719,332

	Three Months Ended March 31,
	2010	2009
		(as adjusted)²
	(unaudited)
	(in thousand s, except per share data)
PER SHARE DATA – basic and diluted:

Net loss from continuing operations (basic)	$ (0.09)	$ (0.84)
Income (loss) from discontinued operations, net of tax (basic)	0.00	(0.00)
Consolidated net loss attributable to common stockholders (basic)	$ (0.09)	$ (0.84)

Net loss from continuing operations (diluted)	$ (0.09)	$ (0.84)
Income (loss) from discontinued operations, net of tax (diluted)	0.00	(0.00)
Consolidated net loss attributable to common stockholders (diluted)	$ (0.09)	$ (0.84)

SELECTED OTHER DATA
Station operating income ¹	$17,828	$ 16,979
Station operating income margin (% of net revenue)	30.2%	28.2%

Station operating income reconciliation:

Consolidated net loss attributable to common stockholders	$ (4,568)	$ (59,437)
Add back non-station operating income items included in consolidated net loss:
Interest income	(25)	(18)
Interest expense	9,235	10,779
(Benefit from) provision for income taxes	(309)	7,071
Corporate selling, general and administrative expenses	7,285	5,133
Stock-based compensation	2,013	483
Gain on retirement of debt	–	(1,221)
Equity in income of affiliated company	(909)	(1,150)
Other expense (income), net	477	(50)
Depreciation and amortization	4,721	5,231
Noncontrolling interest in (loss) income of subsidiaries	(29)	871
Impairment of long-lived assets	–	48,953
(Income) loss from discontinued operations, net of tax	(63)	334
Station operating income	$17,828	$ 16,979

Adjusted EBITDA⁴	$10,543	$ 11,846

Adjusted EBITDA reconciliation:

Net loss attributable to common stockholders	$ (4,568)	$ (59,437)
Interest income	(25)	(18)
Interest expense	9,235	10,779
(Benefit from) provision for income taxes	(309)	7,071
Depreciation and amortization	4,721	5,231
EBITDA	$ 9,054	$ (36,374)
Stock-based compensation	2,013	483
Gain on retirement of debt	–	(1,221)
Equity in income of affiliated company	(909)	(1,150)
Other expense (income), net	477	(50)
Noncontrolling interest in (loss) income of subsidiaries	(29)	871
Impairment of long-lived assets	–	48,953
(Income) loss from discontinued operations, net of tax	(63)	334
Adjusted EBITDA	$10,543	$ 11,846

		March 31, 2010	December 31, 2009
		(unaudited)
		(in thousand s)
SELECTED BALANCE SHEET DATA:
	Cash and cash equivalents	$ 9,958	$ 19,963
	Intangible assets, net	871,592	871,221
	Total assets	1,024,984	1,035,542
	Total debt (including current portion)	649,032	653,534
	Total liabilities	779,381	787,489
	Total stockholders’ equity	239,644	242,065
	Noncontrolling interest	5,959	5,988

		Current Amount Outstand ing	Applicable Interest Rate (a)
		(in thousand s)
SELECTED LEVERAGE AND SWAP DATA:
	Senior bank term and revolving debt (swap matures June 16, 2010) (a)	$ 25,000	6.52%
	Senior bank term debt (swap matures June 16, 2012) (a)	25,000	6.72%
	Senior bank revolving debt (subject to variable rates) (b)	296,522	4.44%
	8-7/8% senior subordinated notes (fixed rate)	101,510	8.88%
	6-3/8% senior subordinated notes (fixed rate)	200,000	6.38%
	Note payable (fixed rate)	1,000	7.00%
(a) A total of $50.0 million is subject to fixed rate swap agreements that became effective in June 2005. Under our fixed rate swap agreements, we pay a fixed rate plus a spread based on our leverage ratio, as defined in our Credit Agreement. That spread is currently set at 2.25% and is incorporated into the applicable interest rates set forth above. (b) Subject to rolling one-month and three-month LIBOR and a 1.00% LIBOR floor, plus a spread currently at 2.25% and the Prime rate plus a spread currently at 1.25%, incorporated into the applicable interest rate set forth above. This tranche is not covered by swap agreements described in footnote (a).