RADIO ONE LOSES $11.7 MILLION IN SECOND QUARTER

by Bob Hamilton on 08/07/2008, 11:28 AM

Tags: radio one

 
Radio One has issued its second quarterly report and it shows a loss of $11.7 million..the company says its average ad prices are down 5%...here is their Business wire press release..

Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported its results for the quarter ended June 30, 2008. Net revenue was approximately $83.4 million, an increase of 1% from the same period in 2007. Station operating income1 was approximately $35.2 million, a decrease of 11% from the same period in 2007. Operating income of approximately $11.8 million was adversely impacted by one-time charges, resulting in a decrease of 44% from the operating income in the same period in 2007. Net loss was approximately $11.7 million or $0.12 per basic share, an increase from the reported net loss of $5.1 million in the same period in 2007. On a pro forma basis after adjusting for the impact of one-time charges, the net loss for the three months ended June 30, 2008 was approximately $1.3 million or $0.01 per basic share, a decrease from the pro forma net loss of approximately $4.0 million in the same period in 2007.

Alfred C. Liggins, III, Radio Ones CEO and President stated, , It was a very busy quarter for us, complete with acquisitions, including the purchase of Community Connect Inc. (CCI), asset sales, debt de-leveraging and stock buy-backs, yet I am pleased we were focused and delivered better than market results. While the soft economy and continuing fall off in national revenues impacted our radio business, we once again outperformed the markets we operate in by over 200 basis points. Our core radio revenues declined 3%, yet our local revenue performance significantly offset the continuing drag we experienced in our national business. Other positives impacting the quarter for radio were strong political spending, internet revenue growth of 36% and a doubling of revenue from a series of new syndicated shows.

We continue to invest in our internet business, and generated over $3.7 million in revenue from our April 2008 acquisition of CCI, in addition to revenue from other internally launched sites, which helped push our overall revenue growth for the quarter up 1%.

Given the backdrop of the weak economy and declining revenues in radio, we once again focused on cutting back on operating expenses and improving our balance sheet. Setting aside consolidation of CCIs expenses, our internet investments and one-time charges for a new executive employment agreement, as well as spending on the 2007 stock options review, we under spent inflation, and almost held expenses flat. On the balance sheet, we wrapped up the purchase WPRS-FM for our Washington, DC market. In addition, proceeds from our Los Angeles and Miami asset sales positioned us to accomplish net debt pay downs and bond retirements of $77 million, as well as the buy-back of over 2 million shares.

My outlook for the rest of 2008 and into 2009 remains cautious, yet I am excited about our internet growth opportunities, and I am confident our management team will continue to outperform the market.

RESULTS OF OPERATIONS

 
 
 
 
 









 



Three Months Ended June 30,
Six Months Ended June 30,



2008
2007
2008
2007





(as adjusted)2




(as adjusted)2

STATEMENT OF OPERATIONS


(unaudited)


(unaudited)




(in thousands)


(in thousands)










 









 

NET REVENUE
$ 83,432

$ 82,620

$ 155,930

$ 156,660









 


OPERATING EXPENSES:


















 

Programming and technical

20,764


17,844


39,796


35,914

Selling, general and administrative

27,489


25,466


52,007


47,334

Corporate selling, general and administrative

17,551


8,110


23,958


15,660

Stock-based compensation

629


777


957


1,592

Depreciation and amortization

5,171


3,667


8,835


7,383

Impairment of long-lived assets
  -  
  5,506  
  -  
  5,506  

Total operating expenses
  71,604  
  61,370  
  125,553  
  113,389  









 









 

Operating Income

11,828


21,250


30,377


43,271









 

INTEREST INCOME

(130 )

(294 )

(331 )

(561 )









 

INTEREST EXPENSE

15,160


18,577


32,419


36,647









 

GAIN ON RETIREMENT OF DEBT

(1,015 )

-


(1,015 )

-









 

EQUITY IN (INCOME) LOSS OF AFFILIATED COMPANY3

(29 )

3,088


2,799


7,306









 

OTHER EXPENSE, net
  33  
  -  
  44  
  8  









 

(Loss) before provision for income taxes, minority interest in income of subsidiaries and discontinued operations

(2,191 )

 


(121 )

 


(3,539 )

 


(129 )









 

PROVISION (BENEFIT) FOR INCOME TAXES

9,761


(801 )

18,659


651









 

MINORITY INTEREST IN INCOME OF SUBSIDIARIES
  1,058  
  919  
  1,881  
  1,825  









 

Net Loss from continuing operations

(13,010 )

(239 )

(24,079 )

(2,605 )









 

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax







  1,334  
  (4,832 )
  (6,447 )
  (5,448 )









 









 

Net Loss
$ (11,676 )
$ (5,071 )
$ (30,526 )
$ (8,053 )









 









 
Weighted average shares outstanding - basic4

98,403,298


98,710,633


98,560,790


98,710,633
Weighted average shares outstanding - diluted5

98,403,298


98,710,633


98,560,790


98,710,633

  Three Months Ended June 30,   Six Months Ended June 30,


2008   2007   2008   2007




(as adjusted)2




(as adjusted)2




(unaudited)


(unaudited)




(in thousands, except per share data)


(in thousands, except per share data)

PER SHARE DATA - basic and diluted:

















 
Loss from continuing operations per share
$ (0.13 )
$ 0.00

$ (0.24 )
$ (0.03 ) *
Loss from discontinued operations per share
$ 0.01  
$ (0.05 )
$ (0.07 )
$ (0.06 ) *
Net loss per share
$ (0.12 )
$ (0.05 )
$ (0.31 )
$ (0.08 ) *









 









 
SELECTED OTHER DATA








Station operating income 1
$ 35,179

$ 39,310

$ 64,127

$ 73,412

Station operating income margin (% of net revenue)

42.2 %

47.6 %

41.1 %

46.9 %
Station operating income reconciliation:








Net (loss)
$ (11,676 )
$ (5,071 )
$ (30,526 )
$ (8,053 )
Plus: Depreciation and amortization

5,171


3,667


8,835


7,383

Plus: Corporate selling, general and administrative expenses

17,551


8,110


23,958


15,660

Plus: Stock-based compensation

629


777


957


1,592

Plus: Equity in (income) loss of affiliated company3

(29 )

3,088


2,799


7,306

Plus: Provision (benefit) for income taxes

9,761


(801 )

18,659


651

Plus: Minority interest in income of subsidiaries

1,058


919


1,881


1,825

Plus: Interest expense

15,160


18,577


32,419


36,647

Plus: Impairment of long-lived assets

-


5,506


-


5,506

Plus: Other expense

33


-


44


8

Less: (Gain) on retirement of debt

(1,015 )

-


(1,015 )

-

Plus: Loss (Income) from discontinued operations, net of tax

(1,334 )

4,832


6,447


5,448

Less: Interest income
  (130 )
  (294 )
  (331 )
  (561 )
Station operating income
$ 35,179  
$ 39,310  
$ 64,127  
$ 73,412  









 
Adjusted EBITDA6
$ 17,628

$ 31,200

$ 40,169

$ 57,752

Adjusted EBITDA reconciliation:








Net loss
$ (11,676 )
$ (5,071 )
$ (30,526 )
$ (8,053 )
Plus: Depreciation and amortization

5,171


3,667


8,835


7,383

Plus: Provision (Benefit) for income taxes

9,761


(801 )

18,659


651

Plus: Interest expense

15,160


18,577


32,419


36,647

Less: Interest income
  (130 )
  (294 )
  (331 )
  (561 )
EBITDA
$ 18,286

$ 16,078

$ 29,056

$ 36,067

Plus: Equity in (income) loss of affiliated company3

(29 )

3,088


2,799


7,306

Plus: Minority interest in income of subsidiaries

1,058


919


1,881


1,825

Plus: Impairment of long-lived assets

-


5,506


-


5,506

Plus: Stock-based compensation

629


777


957


1,592

Plus: Other expense

33


-


44


8

Less: (Gain) on retirement of debt

(1,015 )

-


(1,015 )

-

Plus: Loss (Income) from discontinued operations, net of tax
  (1,334 )
  4,832  
  6,447  
  5,448  
Adjusted EBITDA
$ 17,628  
$ 31,200  
$ 40,169  
$ 57,752  









 
*Per share amounts may not add due to rounding.
 
  June 30, 2008  

December 31, 2007




(unaudited)


(as adjusted)2

SELECTED BALANCE SHEET DATA:

(in thousands)


Cash and cash equivalents
$ 10,681
$ 24,247

Intangible assets, net

1,373,145

1,310,321

Total assets

1,570,428

1,663,342

Total debt (including current portion)

744,122

815,504

Total liabilities

973,269

1,030,736

Total stockholders' equity

594,846

628,717

Minority interest in subsidiaries

2,313

3,889





 



Current Amount Outstanding   Applicable Interest Rate (a)



(in thousands)

SELECTED LEVERAGE AND SWAP DATA:




Senior bank term debt (swap matures 6/16/2012) (a)
$ 25,000

6.72 %

Senior bank term debt (swap matures 6/16/2010) (a)

25,000

6.52 %

Senior bank term debt (at variable rates) (b)

134,100

5.13 %

Senior bank term debt (at variable rates) (b)

67,500

5.13 %

8-7/8% senior subordinated notes (fixed rate)

292,000

8.88 %

6-3/8% senior subordinated notes (fixed rate)

200,000

6.38 %

Seller financed loan

17

5.10 %

Capital lease obligation

527

6.24 %
   

(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 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).