Radio One, Inc. Reports Record Results for Its Third Quarter of 2001
WASHINGTON, Nov. 6 /PRNewswire/ -- Radio One, Inc. (Nasdaq: ROIAK; ROIA) today reported record results for the quarter ended September 30, 2001. Net broadcast revenue was $66.2 million, up 54% from the same period in 2000. Broadcast cash flow was $34.4 million, an increase of 54% from the same period in 2000. For the quarter, the Company achieved a BCF margin of 52.0%, flat from last year's level. After-tax cash flow was $12.2 million or $0.13 cents per share. On a same station basis the Company's net broadcast revenue and broadcast cash flow each increased 7% from last year.
Alfred C. Liggins, III, the Company's CEO and President stated, "Despite the tragedies of September 11 and the ongoing national crisis, we actually managed to post surprisingly strong results for the quarter. This was due partly to what were fairly strong results in the months of July and August, only partially offset by a weak September. However, even with the events of September 11, we were relatively immune to a major direct hit to our business because of our not having a station presence in New York, owning relatively few news stations (and no sports stations) and having a diverse geographic presence. We certainly realized numerous cancellations after September 11, in line with the rest of the radio industry, but we have been able to manage through those problems without any material disruptions. The similar rate of growth for revenue and BCF on a same station basis is not in keeping with our operating philosophy but was due to maintaining our cost structure in the second half of September, despite the declines in revenue, as well as investments in programming and marketing in several markets which continue to pay off in the form of higher ratings at many of our radio stations. Our hearts and prayers continue to go out to all Americans who are suffering from these attacks on our nation. We are proud of our listeners, radio stations, employees and other friends who have come to the support of those in need over the past seven weeks. We will continue to work in our communities to help rebuild the spirit of America."
For the year-to-date period ending September 30, 2001, net broadcast revenue was $176.4 million, up 81% from the same period in 2000. Broadcast cash flow was $90.4 million, an increase of 87% from the same period in 2000 while the broadcast cash flow margin improved to 51.3% from 49.5%. After-tax cash flow was $28.3 million or $0.32 cents per share.
RESULTS OF OPERATIONS
Comparison of periods ended September 30, 2001 to the periods ended
September 30, 2000
(all periods are unaudited -- all numbers in 000s except per share data).
Three months Three months Nine months Nine months
ended ended ended ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2001 2000 2001 2000
STATEMENT OF
OPERATIONS DATA:
REVENUE:
Broadcast revenue $75,033 $48,914 $200,236 $111,269
Less: Agency
commissions 8,827 6,028 23,820 13,588
Net broadcast revenue 66,206 42,886 176,416 97,681
OPERATING EXPENSES:
Programming and
technical 10,531 6,404 28,538 15,341
Selling, G&A 21,238 14,167 57,444 33,958
Corporate expenses 2,353 1,825 5,876 4,225
Stock-based
compensation 238 - 713 -
Depreciation &
amortization 31,662 17,726 94,037 30,397
Total operating
expenses 66,022 40,122 186,608 83,921
Operating income
(loss) 184 2,764 (10,192) 13,760
INTEREST EXPENSE 15,993 8,970 46,411 16,217
(LOSS) GAIN ON SALE
OF INVESTMENT (44) - 4,228 -
OTHER INCOME, net 630 9,735 630 19,442
(Loss) income before
(benefit) provision
for income taxes (15,223) 3,529 (51,745) 16,985
(BENEFIT) PROVISION
FOR INCOME TAXES (5,134) 7,550 (17,076) 13,368
(Loss) income before
extraordinary item (10,089) (4,021) (34,669) 3,617
EXTRAORDINARY LOSS
ON DEBT RETIREMENT,
net of tax - - 5,207 -
Net (loss) income $(10,089) $(4,021) $(39,876) $3,617
Net loss applicable
to common
stockholders $ (15,124) $(8,219) $(54,981) $(581)
Three months Three months Nine months Nine months
ended ended ended ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2001 2000 2001 2000
BASIC PER SHARE
DATA (d):
Net (loss) income per
share before
extraordinary loss
applicable to
common shareholders $(0.16) $ (0.10) $(0.56) $( 0.01)
Net (loss) income per
share applicable to
common shareholders (0.16) (0.10) (0.62) (0.01)
After-tax cash flow
per share 0.13 0.20 0.32 0.44
DILUTED PER SHARE
DATA (e):
Net (loss) income per
share $(0.11) $ (0.05) $(0.45) $0.04
Preferred dividends
per share 0.05 0.05 0.17 0.05
Net (loss) income
per share applicable
to common
shareholders $(0.16) $ (0.10) $(0.62) $ (0.01)
After-tax cash flow
per share 0.13 0.20 0.32 0.44
OTHER DATA:
Broadcast cash
flow (a) $34,437 $22,315 $90,434 $48,382
Broadcast cash flow
margin (a) 52.0% 52.0% 51.3% 49.5%
EBITDA (b) $32,084 $20,490 $84,558 $44,157
EBITDA margin (b) 48.5% 47.8% 47.9% 45.2%
After-tax cash
flow (c) $12,210 $17,057 $28,288 $36,784
Capital expenditures 1,970 919 4,810 2,316
SAME STATION RESULTS:
Net revenue $43,027 $40,230 $100,266 $95,000
Broadcast cash flow 21,949 20,520 50,747 46,561
Broadcast cash flow
margin 51.0% 51.0% 50.6% 49.0%
Weighted average
shares outstanding
-- basic (d) 91,687 85,494 88,936 83,862
Weighted average
shares outstanding
-- diluted (e) 91,687 85,684 88,936 84,061
Sept. 30, Dec. 31,
2001 2000
(unaudited) (audited)
SELECTED BALANCE SHEET DATA:
Cash and cash equivalents $18,978 $20,879
Current assets 87,403 78,982
Total assets 1,910,742 1,765,218
Senior debt 480,049 562,588
Subordinated debt 300,000 84,368
Preferred stock (liquidation value) 310,000 310,000
Total shareholders' equity 1,074,317 1,057,069
AFTER-TAX CASH FLOW (c): Q3 - 2001 Q3 - 2000
Pre-tax (loss) income $(15,223) $3,529
Plus: Depreciation, amortization and
non-cash compensation 31,662 17,726
Plus: Loss on sale of investment 44 -
Plus: Tax benefit (liability) - -
Plus: Non-cash interest and stock-based
compensation 762 -
Less: Preferred Dividends 5,035 4,198
TOTAL $12,210 $17,057
Net broadcast revenue increased to approximately $66.2 million for the quarter ended September 30, 2001 from approximately $42.9 million for the quarter ended September 30, 2000 or 54%. Net broadcast revenue increased to approximately $176.4 million for the nine months ended September 30, 2001 from approximately $97.7 million for the nine months ended September 30, 2000 or 81%. 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 from the Company's August 2000 acquisition of radio stations from Clear Channel Communications and AMFM and the August 2001 acquisition of Blue Chip Broadcasting.
Operating expenses excluding depreciation, amortization and stock-based compensation increased to approximately $34.1 million for the quarter ended September 30, 2001 from approximately $22.4 million for the quarter ended September 30, 2000 or 52%. Operating expenses excluding depreciation, amortization and stock-based compensation increased to approximately $91.9 million for the nine months ended September 30, 2001 from approximately $53.5 million for the nine months ended September 30, 2000 or 72%. These increases in expenses were related to the Company's expansion within 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.
Interest expense increased to approximately $16.0 million for the quarter ended September 30, 2001 from approximately $9.0 million for the quarter ended September 30, 2000 or 78%. Interest expense increased to approximately $46.4 million for the nine months ended September 30, 2001 from approximately $16.2 million for the nine months ended September 30, 2000 or 186%. These increases related primarily to borrowings associated with the acquisition of radio stations from Clear Channel and AMFM and the acquisition of Blue Chip Broadcasting.
Other income decreased to approximately $0.6 million for the quarter ended September 30, 2001 compared to approximately $9.7 million for the quarter ended September 30, 2000 or 94%. Other income decreased to $0.6 million for the nine months ended September 30, 2001 from approximately $19.4 million for the nine months ended September 30, 2000 or 97%. These decreases were due to the Company having normalized cash balance levels during the first nine months of 2001 as compared to high cash and investment balances resulting from its follow-on equity offerings in November 1999, March 2000 and July 2000, completed in anticipation of the acquisition of radio stations from Clear Channel and AMFM which was consummated in late August 2000.
(Loss) income before (benefit) provision for income taxes was approximately $(15.2) million for the quarter ended September 30, 2001 compared to approximately $3.5 million for the quarter ended September 30, 2000. (Loss) income before (benefit) provision for income taxes was approximately $(51.7) million for the nine months ended September 30, 2001 compared to approximately $17.0 million for the nine months ended September 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 increased to approximately $10.1 million for the quarter ended September 30, 2001 compared to approximately $4.0 million for the quarter ended September 30, 2000 or 153%. Net (loss) income was approximately $(39.9) million for the nine months ended September 30, 2001 compared to approximately $3.6 million for the nine months ended September 30, 2000. These changes were due to the loss before benefit for income taxes versus income before provision for income taxes in the previous year's periods as well as an extraordinary charge, for the nine month period of 2001, 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 for both the quarter and the nine month period, compared to tax provisions during the previous year's periods.
Broadcast cash flow increased to approximately $34.4 million for the quarter ended September 30, 2001 from approximately $22.3 million for the quarter ended September 30, 2000 or 54%. Broadcast cash flow increased to approximately $90.4 million for the nine months ended September 30, 2001 from approximately $48.4 million for the nine months ended September 30, 2000 or 87%. 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 $32.1 million for the quarter ended September 30, 2001 from approximately $20.5 million for the quarter ended September 30, 2000 or 57%. Earnings before interest, taxes, depreciation, and amortization (EBITDA), and excluding non- cash compensation expense, increased to approximately $84.6 million for the nine months ended September 30, 2001 from approximately $44.2 million for the nine months ended September 30, 2000 or 91%. These increases were attributable to the increase in broadcast revenue partially offset by higher operating expenses and higher corporate expenses associated with the Company's overall growth.
Other Recent Events:
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 in cash.
On August 10, 2001 the Company completed the acquisition of Blue Chip Broadcasting for approximately $190.0 million in cash and shares of its class D common stock.
On August 31, 2001, the Company commenced providing programming to WAMJ-FM, a new station licensed to Mableton, Georgia, which serves the Atlanta market, for a monthly LMA fee of $30,000.
Radio One will be holding a conference call to discuss its results for the fiscal third quarter of 2001. This conference call is scheduled for Tuesday, November 6, 2001 at 10 a.m. Eastern Time. Interested parties should call 612-332-1020 or 612-288-0340 five minutes prior to the scheduled time of the call and ask for the "Radio One 2001 Third 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 320-365-3844 and entering passcode 605247.
Radio One is the nation's seventh largest radio broadcasting company (based on 2000 pro forma revenue) 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 and programs five channels on the XM Satellite Radio system.
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 September 30, 2001 the Company had 91,687,000 shares of Common Stock outstanding on a weighted average basis for the quarter.
(e) As of September 30, 2001 the Company had 91,687,000 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 there was no difference 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.
MAKE YOUR OPINION COUNT - Click Here
http://tbutton.prnewswire.com/prn/11690X87161268
SOURCE Radio One, Inc.
CONTACT: Scott R. Royster, Chief Financial Officer of Radio One, Inc.,