Radio One, Inc. Reports First Quarter Results
Radio One, Inc. (NASDAQ:ROIAK and ROIA) today reported its results for
the quarter ended March 31, 2008. Net revenue was approximately $72.5
million, a decrease of 2% from the same period in 2007. Station
operating income1 was approximately $28.9
million, a decrease of 15% from the same period in 2007. Operating
income was approximately $18.5 million, a decrease of 16% from the
operating income in the same period in 2007. Net loss was approximately
$18.3 million, or a loss of $0.19 per basic share, a decrease from the
reported net income of $744,000 in the same period in 2007.
Alfred C. Liggins, III, Radio One’s CEO and
President stated, “While our radio stations
outperformed their markets by almost 600 basis points, driven mainly by
local advertising, the significant decline in national advertising held
our overall core radio station revenue growth to 0.9%. Under the current
market conditions, I believe this performance demonstrates that our
management changes and leadership are having a favorable impact. When
combined with reduced revenues at Reach Media and Giant Magazine,
consolidated net revenue declined 2%.
In March we successfully expanded our One Love Gospel Cruise event,
which generated over $2.5 million of revenue. This well branded event,
when coupled with our strong portfolio of gospel stations will no doubt
provide for future aggressive monetization of these assets.
During the quarter we invested in new on-air talent for our syndicated
programs, notably Mo’Nique, and these
investments should deliver future ratings and revenue growth. Our
internet investment and build-out continues on plan, augmented by the
recent acquisition of Community Connect Inc. (“CCI”)
and the launch of Newsone.com, which will accelerate our path to
profitability in the on-line space.
The sale of KRBV-FM in Los Angeles for $137.5 million is on track to
close during the second quarter and will provide the Company with
additional liquidity and de-leveraging opportunities.
With weak market conditions projected for the balance of this year, the
management team is focused on integrating CCI to reap revenue synergies,
making our business processes more efficient and controlling our costs.”
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RESULTS OF OPERATIONS
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Three Months Ended March 31,
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2008
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2007
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(as adjusted)2
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(unaudited)
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(in thousands)
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STATEMENT OF OPERATIONS:
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NET REVENUE
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$
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72,498
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$
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74,040
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OPERATING EXPENSES:
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Programming and technical
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19,032
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18,070
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Selling, general and administrative
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24,518
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21,868
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Corporate selling, general and administrative
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6, 407
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7,550
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Stock-based compensation
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328
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815
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Depreciation and amortization
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3,664
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3,716
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Total operating expenses
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53,949
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52,019
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Operating income
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18,549
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22,021
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INTEREST INCOME
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(201
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)
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(267
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)
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INTEREST EXPENSE
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17,259
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18,070
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EQUITY IN LOSS OF AFFILIATED COMPANY
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2,285
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492
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OTHER EXPENSE, net
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11
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8
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(Loss) Income before provision for income taxes, minority interest
in income of subsidiaries and discontinued operations
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(805
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)
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3,718
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PROVISION FOR INCOME TAXES
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8,898
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1,452
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MINORITY INTEREST IN INCOME OF SUBSIDIARIES
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823
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906
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Net (Loss) Income from continuing operations
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(10,526
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)
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1,360
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LOSS FROM DISCONTINUED OPERATIONS, net of tax
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(7,781
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)
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(616
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)
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Net (loss) income
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$
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(18,307
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)
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$
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744
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Weighted average shares outstanding –
basic3
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98,728,411
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98,710,633
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Weighted average shares outstanding –
diluted4
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98,728,411
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98,710,633
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Three Months Ended March 31,
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2008
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2007
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(as adjusted)
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(unaudited)
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(in thousands, except per share data)
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PER SHARE DATA – basic and diluted:
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(Loss) income from continuing operations per share
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$
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(0.11
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)
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$
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0.01
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Loss from discontinued operations per share
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$
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(0.08
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)
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$
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(0.01
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)
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Net (loss) income per share
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$
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(0.19
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)
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$
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0.01
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SELECTED OTHER DATA:
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Station operating income 1
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$
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28,948
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$
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34,102
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Station operating income margin (% of net revenue)
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39.9
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%
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46.1
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%
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Station operating income reconciliation:
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Net (loss) income
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$
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(18,307
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)
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$
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744
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Plus: Depreciation and amortization
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3,664
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3,716
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Plus: Corporate selling, general and administrative expenses
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6,407
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7,550
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Plus: Stock-based compensation
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328
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815
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Plus: Equity in loss of affiliated company
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2,285
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492
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Plus: Provision for income taxes
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8,898
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1,452
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Plus: Minority interest in income of subsidiaries
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823
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906
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Plus: Interest expense
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17,259
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18,070
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Plus: Other expense
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11
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8
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Plus: Loss from discontinued operations, net of tax
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7,781
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616
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Less: Interest income
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(201
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)
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(267
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)
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Station operating income
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$
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28,948
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$
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34,102
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Adjusted EBITDA4
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$
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22,202
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$
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25,729
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Adjusted EBITDA reconciliation:
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Net (loss) income
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$
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(18,307
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)
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$
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744
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Plus: Depreciation and amortization
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3,664
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3,716
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Plus: Provision for income taxes
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8,898
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1,452
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Plus: Interest expense
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17,259
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18,070
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Less: Interest income
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(201
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)
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(267
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EBITDA
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$
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11,313
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$
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23,715
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Plus: Equity in loss of affiliated company
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2,285
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492
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Plus: Minority interest in income of subsidiaries
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823
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906
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Plus: Loss from discontinued operations, net of tax
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7,781
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616
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Adjusted EBITDA
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$
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22,202
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$
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25,729
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March 31, 2008
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December 31, 2007
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(unaudited)
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(as adjusted)
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SELECTED BALANCE SHEET DATA:
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(in thousands)
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Cash and cash equivalents
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$
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7,730
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$
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24,247
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Intangible assets, net
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1,308,730
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1,310,321
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Total assets
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1,639,389
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1,667,725
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Total debt (including current portion)
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813,514
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815,504
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Total liabilities
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1,026,205
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1,030,736
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Total stockholders' equity
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611,929
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633,100
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Minority interest in subsidiaries
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1,255
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3,889
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Current Amount
Outstanding
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Applicable Interest
Rate (a)
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(in thousands)
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SELECTED LEVERAGE AND SWAP DATA:
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Senior bank term debt (swap matures 6/16/2012) (a)
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$
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25,000
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6.72
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%
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Senior bank term debt (swap matures 6/16/2010) (a)
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25,000
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6.52
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%
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Senior bank term debt (swap matures 6/16/2008) (a)
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25,000
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6.38
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%
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Senior bank term debt (at variable rates) (b)
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117,500
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5.00
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%
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Senior bank term debt (at variable rates) (b)
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120,500
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5.00
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%
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8-7/8% senior subordinated notes (fixed rate)
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300,000
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8.88
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%
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6-3/8% senior subordinated notes (fixed rate)
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200,000
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6.38
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%
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Seller financed loan
|
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514
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5.10
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%
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(a)
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A total of $75.0 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.
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(b)
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Subject to rolling 90-day LIBOR plus a spread currently at
2.25% and incorporated into the applicable interest rate set forth
above. This tranche is not covered by swap agreements described in
footnote (a).
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