Radio One, Inc. Reports Record Results for Its Second Quarter of 2001
WASHINGTON, Aug. 2 /PRNewswire/ -- Radio One, Inc. (Nasdaq: ROIAK; ROIA) today reported record results for the quarter ended June 30, 2001. Net broadcast revenue was $62.3 million, up 91% from the same period in 2001. Broadcast cash flow was $34.0 million, an increase of 106% from the same period in 2001 while the broadcast cash flow margin improved to 54.7% from 50.4%. After-tax cash flow was $14.0 million or $0.16 cents per share.
On a same station basis the Company's net broadcast revenue increased 4% and broadcast cash flow increased 12% from last year while the broadcast cash flow margin improved to 54.4% from 50.4% in the previous year's second quarter.
Alfred C. Liggins, III, the Company's CEO and President stated, "Despite the very weak advertising market and the very difficult comparables from last year's second quarter, we are pleased to report that we were able to meet the consensus after-tax cash flow per share estimates for the quarter. We have been growing significantly faster than the radio industry overall and expect this to persist in the second half of 2001 as our ratings strength continues to provide us with positive momentum. Further, with the Blue Chip acquisition expected to close by August 15, we believe the upside in our portfolio of stations will be enhanced in the upcoming quarters."
For the year-to-date period ending June 30, 2001, net broadcast revenue was $110.2 million, up 101% from the same period in 2001. Broadcast cash flow was $56.0 million, an increase of 115% from the same period in 2001 while the broadcast cash flow margin improved to 50.8% from 47.6%. After-tax cash flow was $16.0 million or $0.18 cents per share.
RESULTS OF OPERATIONS
Comparison of periods ended June 30, 2001 to the periods
ended June 30, 2000
(all periods are unaudited - all numbers in 000s except per share data).
STATEMENT OF
OPERATIONS DATA:
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
REVENUE:
Broadcast revenue $70,930 $37,231 $125,203 $62,355
Less: Agency
commissions 8,645 4,588 14,993 7,560
Net broadcast
revenue 62,285 32,643 110,210 54,795
OPERATING EXPENSES:
Programming and
technical 9,151 4,697 18,007 8,937
Selling, G&A 19,090 11,492 36,206 19,791
Corporate expenses 1,683 1,282 3,523 2,400
Non-cash
compensation 237 - 475 -
Depreciation &
amortization 30,851 7,182 62,375 12,671
Total operating
expenses 61,012 24,653 120,586 43,799
Operating income
(loss) 1,273 7,990 (10,376) 10,996
INTEREST EXPENSE 14,717 3,665 30,418 7,247
GAIN ON SALE OF
INVESTMENT - - 4,272 -
OTHER (EXPENSE)
INCOME, net (596) 5,470 - 9,707
(Loss) income
before (benefit)
provision for
income taxes (14,040) 9,795 (36,522) 13,456
(BENEFIT) PROVISION
FOR INCOME TAXES (4,633) 4,218 (11,942) 5,818
Net (loss) income
before
extraordinary
item (9,407) 5,577 (24,580) 7,638
EXTRAORDINARY LOSS
ON DEBT RETIREMENT,
net of tax 5,207 - 5,207 -
Net (loss)
income $(14,614) $5,577 $(29,787) $7,638
Net (loss)
income
applicable
to common
stockholders $(19,646) $5,577 $(39,857) $7,638
BASIC PER SHARE
DATA (d):
Net (loss) income
per share before
extraordinary loss
applicable to
common
shareholders $(0.16) $ 0.07 $(0.40) $0.09
Net (loss) income
per share
applicable to
common
shareholders (0.22) 0.07 (0.46) 0.09
After-tax cash
flow per share 0.16 0.14 0.18 0.24
DILUTED PER SHARE
DATA (e):
Net (loss) income
per share $(0.16) $ 0.07 $(0.34) $0.09
Preferred dividends
per share 0.06 - 0.11 -
Net (loss) income per
share applicable to
common
shareholders $(0.22) $ 0.07 $(0.45) $0.09
After-tax cash
flow per share 0.16 0.14 0.18 0.24
OTHER DATA:
Broadcast cash
flow (a) $34,044 $16,454 $55,997 $26,067
Broadcast cash flow
margin (a) 54.7% 50.4% 50.8% 47.6%
EBITDA (b) $32,361 $15,172 $52,474 $23,667
EBITDA margin (b) 52.0% 46.5% 47.6% 43.2%
After-tax cash
flow (c) $13,963 $12,277 $16,078 $19,726
Capital
expenditures 1,189 829 2,840 1,397
SAME STATION RESULTS:
Net revenue $34,036 $32,618 $57,239 $54,770
Broadcast cash flow 18,501 16,428 28,798 26,041
Broadcast cash
flow margin 54.4% 50.4% 50.3% 47.5%
Weighted average
shares outstanding
- basic (d) 88,252 84,994 87,532 83,038
Weighted average
shares outstanding
- diluted (e) 88,917 85,256 88,036 83,316
June 30, December 31,
2001 2000
(unaudited) (audited)
SELECTED BALANCE SHEET DATA:
Cash and cash equivalents $9,519 $20,879
Current assets 68,957 78,982
Total assets 1,708,722 1,765,218
Senior debt 350,057 562,588
Subordinated debt 300,000 84,368
Preferred stock (liquidation value) 310,000 310,000
Total shareholders' equity 1,011,373 1,057,069
AFTER-TAX CASH FLOW (c): Q2 - 2001 Q2 - 2000
Pre-tax (loss) income $(14,040) $9,795
Plus: Depreciation, amortization and
non-cash compensation 31,088 7,182
Plus: Write-down of investment 1,206 -
Plus: Tax benefit (liability) 250 (4,700)
Plus: Non-cash interest 491 -
Less: Preferred Dividends 5,032 -
TOTAL $13,963 $12,277
Net broadcast revenue increased to approximately $62.3 million for the quarter ended June 30, 2001 from approximately $32.6 million for the quarter ended June 30, 2000 or 91%. Net broadcast revenue increased to approximately $110.2 million for the six months ended June 30, 2001 from approximately $54.8 million for the six months ended June 30, 2000 or 101%. These increases in net broadcast revenue were the result of continuing broadcast revenue growth in many of the Company's markets in which it has operated for at least one year as the Company benefited from historical ratings increases at certain of its radio stations. Additional revenue gains were derived primarily from the Company's 2000 acquisition of radio stations from Clear Channel Communications and AMFM.
Operating expenses excluding depreciation, amortization and non-cash compensation increased to approximately $29.9 million for the quarter ended June 30, 2001 from approximately $17.5 million for the quarter ended June 30, 2000 or 71%. Operating expenses excluding depreciation, amortization and non- cash compensation increased to approximately $57.7 million for the six months ended June 30, 2001 from approximately $31.1 million for the six months ended June 30, 2000 or 86%. These increases in expenses were related to the Company's rapid expansion within all of the markets in which it operates including increased variable costs associated with increased revenue, as well as start-up and expansion expenses in its newer markets as well as higher costs associated with operating as a public company.
Interest expense increased to approximately $14.7 million for the quarter ended June 30, 2001 from approximately $3.7 million for the quarter ended June 30, 2000 or 297%. Interest expense increased to approximately $30.4 million for the six months ended June 30, 2001 from approximately $7.2 million for the six months ended June 30, 2000 or 322%. These increases relate primarily to borrowings associated with the acquisition of radio stations from Clear Channel and AMFM.
Other (expense) income was approximately $(0.6) million for the quarter ended June 30, 2001 compared to approximately $5.5 million for the quarter ended June 30, 2000. This change was the result of an approximately $1.2 million write-down of the Company's investment in NetNoir, Inc. partially offset by interest income. Other income decreased to zero for the six months ended June 30, 2001 from approximately $9.7 million for the six months ended June 30, 2000. This decrease was due to the Company having normalized cash balance levels during the first half of 2001 as compared to high cash and investment balances resulting from its follow-on equity offerings in November 2000 and March 2001 completed in anticipation of the acquisition of radio stations from Clear Channel and AMFM which was consummated in August, 2000.
(Loss) income before provision for income taxes was approximately $(14.0) million for the quarter ended June 30, 2001 compared to approximately $9.8 million for the quarter ended June 30, 2000. (Loss) income before provision for income taxes was approximately $(36.5) million for the six months ended June 30, 2001 compared to approximately $13.5 million for the six months ended June 30, 2000. These changes were due to lower operating income due to higher non-cash charges and higher interest expense due to higher levels of debt outstanding as outlined above.
Net (loss) income was approximately $(14.6) million for the quarter ended June 30, 2001 compared to $5.6 million for the quarter ended June 30, 2000. Net (loss) income was approximately $(29.8) million for the six months ended June 30, 2001 compared to approximately $7.6 million for the six months ended June 30, 2000. These changes were due to the (loss) before provision for income taxes versus income before provision for income taxes in the previous year's periods as well as an extraordinary charge in conjunction with the Company's refinancing of its 12% senior subordinated notes with a new offering of 8-7/8% senior subordinated notes in May, 2001, partially offset by a tax benefit compared to a tax provision during last year's periods.
Broadcast cash flow increased to approximately $34.0 million for the quarter ended June 30, 2001 from approximately $16.5 million for the quarter ended June 30, 2000 or 106%. Broadcast cash flow increased to approximately $56.0 million for the six months ended June 30, 2001 from approximately $26.1 million for the six months ended June 30, 2000 or 115%. These increases were attributable to the increases in broadcast revenue partially offset by higher operating expenses as described above.
Earnings before interest, taxes, depreciation, and amortization (EBITDA), and excluding non-cash compensation expense, increased to approximately $32.4 million for the quarter ended June 30, 2001 from approximately $15.2 million for the quarter ended June 30, 2000 or 113%. Earnings before interest, taxes, depreciation, and amortization (EBITDA), and excluding non-cash compensation expense, increased to approximately $52.5 million for the six months ended June 30, 2001 from approximately $23.7 million for the six months ended June 30, 2000 or 122%. These increases were attributable to the increase in broadcast revenue partially offset by higher operating expenses and higher corporate expenses partially associated with the costs of operating as a public company.
Other Recent Events:
On June 21, 2001 the Company agreed to acquire WPEZ-FM, licensed to Macon, Georgia, from U.S. Broadcasting Limited Partnership for approximately $55.0 million. The Company is in the process of moving the station closer to Atlanta, Georgia thereby making it a viable Atlanta FM radio station. The move-in is expected to be completed before the end of 2001.
On August 1, 2001 the Company completed the acquisition of radio stations from Sinclair Telecable, Inc. and Commonwealth Broadcasting, LLC for approximately $34.0 million.
Radio One will be holding a conference call to discuss its results for the fiscal second quarter of 2001. This conference call is scheduled for Thursday, August 2, 2001 at 10:00 a.m. Eastern Daylight Time. Interested parties should call 612-332-0107 or 612-288-0329 five minutes prior to the scheduled time of the call and ask for the "Radio One 2001 Second Quarter Results Teleconference." The conference call will be recorded and made available for replay from 1:30 p.m. the day of the call until midnight of the day following the call. Interested parties may listen to the recording by calling 800-475-6701 and entering passcode 594939.
Radio One is the nation's seventh largest radio broadcasting company (based on 2000 pro forma revenue) in the United States and the largest primarily targeting African-American and urban listeners. Pro forma for all announced acquisitions and operating agreements, the Company owns and/or operates 65 radio stations located in 22 of the largest markets in the United States.
Notes:
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Because these statements apply to future events, they are subject to risks and uncertainties that could cause actual results to differ materially, including the absence of a combined operating history with an acquired company or radio station and the potential inability to integrate acquired businesses, need for additional financing, high degree of leverage, seasonal nature of the business, granting of rights to acquire certain portions of the acquired company's or radio station's operations, market ratings, variable economic conditions and consumer tastes, as well as restrictions imposed by existing debt and future payment obligations. Important factors that could cause actual results to differ materially are described in the Company's reports on Forms 10-K and 10-Q and other filings with the Securities and Exchange Commission.
(a) "Broadcast cash flow" is defined as broadcast operating income plus
corporate expenses (including non-cash compensation) and depreciation
and amortization of both tangible and intangible assets.
(b) "EBITDA" is defined as earnings before interest, taxes, depreciation,
amortization and non-cash compensation.
(c) "After-tax cash flow" is defined as income before income taxes and
extraordinary items plus depreciation, amortization, non-cash
compensation, non-cash interest expense and non-cash loss/(gain) on
investments, less the current income tax liability/(benefit) and
preferred stock dividends.
(d) As of June 30, 2001 the Company had 88,252,000 shares of Common Stock
outstanding on a weighted average basis for the quarter.
(e) As of June 30, 2001 the Company had 88,917,000 shares of Common Stock
outstanding on a weighted average basis for the quarter, diluted for
outstanding stock options. After-tax cash flow per share data was
calculated using the basic and diluted weighted average shares
outstanding, however, the per share amounts were the same because of
the relatively minor differences between the two weighted average
share amounts.
The Company has presented broadcast cash flow, operating cash flow and after-tax cash flow data, which the Company believes are comparable to the data provided by other companies in the industry, because such data are commonly used as a measure of performance for broadcast companies. However, broadcast cash flow, operating cash flow and after-tax cash flow do not purport to represent cash provided by operating activities as reflected in the Company's consolidated statements of cash flow, are not a measure of financial performance under generally accepted accounting principles and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles.
| CONTACT: | Scott R. Royster, Chief Financial Officer of Radio One, Inc., |
|---|---|
| +1-301-429-2642. |
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SOURCE Radio One, Inc.
CONTACT: Scott R. Royster, Chief Financial Officer of Radio One, Inc.,