News Release

<< Back

Radio One, Inc. Reports Third Quarter Results

WASHINGTON, Nov. 4, 2010 /PRNewswire via COMTEX/ -- Radio One, Inc. (Nasdaq: ROIAK and ROIA) today reported its results for the quarter ended September 30, 2010. Net revenue was approximately $74.5 million, a decrease of 0.2% from the same period in 2009. Station operating income(1) was approximately $28.3 million, a decrease of 13.4% from the same period in 2009. The Company reported operating income of approximately $17.3 million compared to operating income of approximately $22.4 million for the same period in 2009. Net income was approximately $1.0 million or $0.02 per share, compared to net income of approximately $14.2 million or $0.25 per share for the same period in 2009.

Alfred C. Liggins, III, Radio One's CEO and President stated, "While overall core radio revenues were virtually flat in the third quarter compared to last year, we did see areas of improvement such as national business, which was up 3.1%, and radio segment internet revenue, which was up 133%. As I noted in the second quarter we continue to have upward pressure on the cost base, driven by a combination of contractual increases, commission expenses and the restoration of salary expenses. Reach Media continues to recover from its lack of guaranteed revenues during the third quarter with its strong in-house sales effort. Our internet business continuestogrow, with revenues up 24% this quarter compared to the third quarter of 2009, and we continue to believe that our on-line platform will be a major source of revenue and EBITDA growth for the future.

"The multiple defaults that were triggered in each of the second and third quarters under the terms of our credit facility are still in effect; however, our business remains viable and we continue to work towards a resolution with our lenders and bondholders. I anticipate a solution to these issues will be forthcoming in the near term."


RESULTS OF OPERATIONS




Three Months Ended

September 30,


Nine Months Ended

September 30,




2010


2009


2010


2009






(as adjusted)(2)




(as adjusted)(2)


STATEMENT OF OPERATIONS

(unaudited)


(unaudited)




(in thousands,

except share data)


(in thousands,

except share data)























NET REVENUE

$ 74,491


$ 74,651


$ 208,703


$ 204,835



OPERATING EXPENSES










Programming and technical, excluding stock-based compensation

18,811


17,994


56,736


56,768



Selling, general and administrative, excluding stock-based compensation

27,366


23,964


77,457


68,543



Corporate selling, general and administrative, excluding stock-based compensation

5,488


4,702


20,537


15,034



Stock-based compensation

908


302


4,877


1,387



Depreciation and amortization

4,625


5,337


14,195


15,804



Impairment of long-lived assets

-


-


-


48,953



Total operating expenses

57,198


52,299


173,802


206,489



Operating Income (Loss)

17,293


22,352


34,901


(1,654)



INTEREST INCOME

28


33


95


98



INTEREST EXPENSE

12,122


9,224


31,059


29,036



GAIN ON RETIREMENT OF DEBT

-


-


-


1,221



EQUITY IN INCOME OF AFFILIATED COMPANY

1,784


1,397


3,832


3,294



OTHER EXPENSE, net

50


38


2,934


96



Income (loss) before provision for (benefit from) income taxes, noncontrolling interest in income of subsidiaries and loss from discontinued operations

6,933


14,520


4,835


(26,173)



PROVISION FOR (BENEFIT FROM) INCOME TAXES

4,760


(1,508)


4,685


7,340



Net income (loss) from continuing operations

2,173


16,028


150


(33,513)



LOSS FROM DISCONTINUED OPERATIONS, net of tax

(125)


(90)


(205)


(835)



CONSOLIDATED NET INCOME (LOSS)

2,048


15,938


(55)


(34,348)



NONCONTROLLING INTEREST IN INCOME OF SUBSIDIARIES

1,010


1,712


1,427


3,650



CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$ 1,038


$ 14,226


$ (1,482)


$ (37,998)













AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS










NET INCOME (LOSS) FROM CONTINUING OPERATIONS

$ 1,163


$ 14,316


$ (1,277)


$ (37,163)



LOSS FROM DISCONTINUED OPERATIONS, net of tax

(125)


(90)


(205)


(835)



CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$ 1,038


$ 14,226


$ (1,482)


$ (37,998)













Weighted average shares outstanding - basic(3)

52,064,108


56,242,964


51,316,498


61,873,161



Weighted average shares outstanding - diluted(4)

54,262,885


56,684,369


51,316,498


61,873,161








Three Months Ended September 30,


Nine Months Ended September 30,



2010


2009


2010


2009





(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:


















Net income (loss) from continuing operations (basic)

$ 0.02


$ 0.25


$ (0.02)

*

$ (0.60)


Income (loss) from discontinued operations, net of tax (basic)

(0.00)


(0.00)


$ (0.00)

*

(0.01)


Consolidated net income (loss) attributable to common stockholders (basic)

$ 0.02


$ 0.25


$ (0.03)

*

$ (0.61)











Net income (loss) from continuing operations (diluted)

$ 0.02


$ 0.25


$ (0.02)

*

$ (0.60)


Income (loss) from discontinued operations, net of tax (diluted)

(0.00)


(0.00)


(0.00)

*

(0.01)


Consolidated net income (loss) attributable to common stockholders (diluted)

$ 0.02


$ 0.25


$ (0.03)

*

$ (0.61)











SELECTED OTHER DATA









Station operating income(1)

$28,314


$ 32,693


$74,510


$ 79,524


Station operating income margin (% of net revenue)

38.0%


43.8%


35.7%


38.8%











Station operating income reconciliation:


















Consolidated net income (loss) attributable to common stockholders

$ 1,038


$ 14,226


$ (1,482)


$ (37,998)


Add back non-station operating income items included in consolidated net income (loss):









Interest income

(28)


(33)


(95)


(98)


Interest expense

12,122


9,224


31,059


29,036


Provision for (benefit from) income taxes

4,760


(1,508)


4,685


7,340


Corporate selling, general and administrative expenses

5,488


4,702


20,537


15,034


Stock-based compensation

908


302


4,877


1,387


Gain on retirement of debt

-


-


-


(1,221)


Equity in income of affiliated company

(1,784)


(1,397)


(3,832)


(3,294)


Other expense, net

50


38


2,934


96


Depreciation and amortization

4,625


5,337


14,195


15,804


Noncontrolling interest in income of subsidiaries

1,010


1,712


1,427


3,650


Impairment of long-lived assets

-


-


-


48,953


Loss from discontinued operations, net of tax

125


90


205


835


Station operating income

$28,314


$ 32,693


$74,510


$ 79,524











Adjusted EBITDA(5)

$22,826


$ 27,991


$53,973


$ 64,490











Adjusted EBITDA reconciliation:


















Net income (loss) attributable to common stockholders

$ 1,038


$ 14,226


$ (1,482)


$ (37,998)


Interest income

(28)


(33)


(95)


(98)


Interest expense

12,122


9,224


31,059


29,036


Provision for (benefit from) income taxes

4,760


(1,508)


4,685


7,340


Depreciation and amortization

4,625


5,337


14,195


15,804


EBITDA

$22,517


$ 27,246


$48,362


$ 14,084


Stock-based compensation

908


302


4,877


1,387


Gain on retirement of debt

-


-


-


(1,221)


Equity in income of affiliated company

(1,784)


(1,397)


(3,832)


(3,294)


Other expense, net

50


38


2,934


96


Noncontrolling interest in income of subsidiaries

1,010


1,712


1,427


3,650


Impairment of long-lived assets

-


-


-


48,953


Loss from discontinued operations, net of tax

125


90


205


835


Adjusted EBITDA

$22,826


$ 27,991


$53,973


$ 64,490










*Per share amounts do not add due to rounding.




September 30, 2010


December 31, 2009




(unaudited)






(in thousands)


SELECTED BALANCE SHEET DATA:




Cash and cash equivalents

$ 21,571


$ 19,963



Intangible assets, net

872,794


871,221



Total assets

1,044,384


1,035,542



Total debt (including current portion)

653,138


653,534



Total liabilities

791,183


787,489



Total stockholders' equity

209,154


195,828



Redeemable noncontrolling interests

44,047


52,225










Current Amount Outstanding


Applicable Interest Rate (a)



(in thousands)




SELECTED LEVERAGE AND SWAP DATA:






Senior bank term debt (swap matures June16, 2012) (a)

$ 25,000


10.68%



Senior bank term and revolving debt (subject to variable rates) (b)

325,628


6.50%



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 $25.0 million is subject to a fixed rate swap agreement that became effective in June 2005. Under our fixed rate swap agreement, 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 3.25% and is incorporated into the applicable interest rates set forth above.


(b) Subject to variable Prime Rate plus a spread currently set at 3.25% and incorporated into the applicable interest rate set forth above. This tranche is not covered by a swap agreement described in footnote (a).

Cautionary Note Regarding Forward-Looking Statements

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. Forward-looking statements represent management's current expectations and are based upon information available to Radio One at the time of this release. These forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond Radio One's control, that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially are described in Radio One's reports on Form 10-K/A and other filings with the United States Securities and Exchange Commission (the "SEC"). Radio One does not undertake any duty to update any forward-looking statements.

Net revenue decreased minimally to approximately $74.5 million for the quarter ended September 30, 2010, from approximately $74.7 million for the same period in 2009, a decrease of 0.2%. We continue to see improvements in the radio industry compared to last year, with the markets that we operate in growing 6.2% for the quarter, and 6.6% year to date. Similar to last quarter, national revenue continued to lead the recovery in our radio marketplaces for the quarter, with growth of 9.7%, while local revenue grew 4.0%. Overall, our radio clusters underperformed their marketplaces this quarter, with growth of 3.1% in national revenue and a decline of 1.3% in local revenue. More specifically, our Charlotte, Columbus, Dallas, Detroit, Houston and St. Louis markets posted strong double-digit quarterly growth, while our Cleveland, Washington, DC and Baltimore markets declined for the quarter. Total core radio revenue (radio stations and syndicated programs excluding Reach Media) held constant for the quarter over the same period in 2009. While Reach Media's revenue declined 3.2% in the quarter, this decline was an improvement from those experienced during the first and second quarters of 2010. Reach Media revenues declined following the December 31, 2009 expiration of a sales representation agreement with Citadel Broadcasting Corporation ("Citadel") whereby a minimum level of revenue was guaranteed over the term of the agreement. Effective January 1, 2010, Reach Media's newly established sales organization began selling its inventory on the Tom Joyner Morning Show and under a new commission-based sales representation agreement with Citadel, which sells certain inventory owned by Reach Media in connection with its 105 radio station affiliate agreements. We continue to deliver very strong growth from our internet business, including Community Connect LLC ("CCI"), which posted 23.5% growth for the quarter.

Operating expenses, excluding depreciation and amortization and stock-based compensation, increased to approximately $51.7 million for the quarter ended September 30, 2010, up 10.7% from the approximately $46.7 million incurred for the comparable quarter in 2009. Similar to last quarter, the spending increases continue to occur in selling, general and administrative and corporate departments. The spending increases are mostly payroll related and are a result of the non-recurrence of vacation expense savings from mandatory office closings and changes to the Company's vacation plan in 2009, and increased spending as a part of salary expense with the restoration of salaries from the 2009 reduced levels, additional commissions and bonuses. Higher representative fees, additional spending for research, and increased bad debt expense continue to contribute to increased expenses.

Stock-based compensation increased to approximately $908,000 for the quarter ended September 30, 2010, compared to $302,000 for the same period in 2009. Increased stock-based compensation expense was due to a long-term incentive plan whereby officers and certain key employees were granted a total of 3,250,000 shares of restricted stock in January of 2010. Stock-based compensation requires measurement of compensation costs for all stock-based awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest.

Depreciation and amortization expense decreased to approximately $4.6 million compared to approximately $5.3 million for the quarters ended September 30, 2010 and 2009, respectively, a decrease of 13.2%. The decrease is attributable to the completion of amortization for certain CCI intangible assets and the completion of useful lives for certain assets.

Interest expense increased to approximately $12.1 million for the quarter ended September 30, 2010, from approximately $9.2 million for the same period in 2009, an increase of 31.5%. The increase in interest expense for the three months ended September 30, 2010 was due primarily to higher principal balances and higher interest rates that took effect as a result of both entering into the third amendment to our Credit Agreement in March 2010 as well as defaults under our credit agreement that occurred as of each of June 30, 2010 and July 1, 2010.

Equity in income of affiliated company increased to approximately $1.8 million for the quarter ended September 30, 2010, compared to $1.4 million for the same period in 2009, an increase of 28.6%. The amounts are attributable primarily to additional net income generated by TV One, LLC for the third quarter of 2010 versus the comparable period in 2009, and inception to date dividend distributions made by TV One. The Company's share of the net income is driven by TV One's current capital structure and the Company's percentage ownership of the equity securities of TV One.

Income tax expense increased to $4.8 million for the quarter ended September 30, 2010, compared to a benefit from income taxes of $1.5 million for the same quarter in 2009. Income taxes increased by approximately $5.0 million related to the change in the deferred tax liability ("DTL") for indefinite-lived intangibles, offset by a decrease of $681,000 due to reduced pre-tax book income for Reach Media. . The Company continues to maintain a full valuation allowance for entities other than Reach Media for its deferred tax assets ("DTAs"), including the DTA associated with its net operating loss carryforward. The consolidated effective tax rate for the three months ended September 30, 2010 and 2009 was 68.7% and (10.4%), respectively.

Loss from discontinued operations, net of tax, includes the results of operations for our sold radio stations and Giant Magazine, which ceased publication in December 2009. The loss from discontinued operations, net of tax, for the quarters ended September 30, 2010 and 2009 of $125,000 and $90,000, respectively, resulted from legal and litigation expenses incurred as a result of ongoing legal activity related to certain previously sold stations. The loss from discontinued operations, net of tax, also includes no tax provision for the three months ended September 30, 2010 and a benefit from income taxes of $92,000 for the three months ended September 30, 2009.

Other pertinent financial information includes capital expenditures of approximately $1.5 million and $1.7 million for the quarters ended September 30, 2010 and 2009, respectively.In addition, as of September 30, 2010, Radio One had total debt (net of cash balances) of approximately $631.6 million.

Supplemental Financial Information:

For comparative purposes, the following more detailed and unaudited statements of operations for the three and nine months ended September 30, 2010 and 2009 are included. These detailed, unaudited and adjusted statements of operations include certain reclassifications associated with accounting for discontinued operations. These reclassifications had no effect on previously reported net income or loss, or any other previously reported statements of operations, balance sheet or cash flow amounts.










Three Months Ended September 30, 2010





(in thousands, unaudited)


















Consolidated


Radio

One


Reach

Media


Internet


Corporate/

Eliminations/

Other






STATEMENT OF OPERATIONS:

























NET REVENUE

$

74,491

$

57,967

$

14,092

$

4,382

$

(1,950)


OPERATING EXPENSES:












Programming and technical


18,811


13,007


5,072


2,376


(1,644)


Selling, general and administrative


27,366


20,674


4,164


3,263


(735)


Corporate selling, general and administrative


5,488


-


1,318


-


4,170


Stock-based compensation


908


127


-


24


757


Depreciation and amortization


4,625


2,042


1,089


1,222


272


Total operating expenses


57,198


35,850


11,643


6,885


2,820


Operating income (loss)


17,293


22,117


2,449


(2,503)


(4,770)


INTEREST INCOME


28


-


16


-


12


INTEREST EXPENSE


12,122


-


18


-


12,104


EQUITY IN INCOME OF AFFILIATED COMPANY


1,784


-


-


-


1,784


OTHER EXPENSE, net


50


-


-


48


2


Income (loss) before provision for income taxes, noncontrolling interest in income of subsidiaries and (loss) income from discontinued operations


6,933


22,117


2,447


(2,551)


(15,080)


PROVISION FOR INCOME TAXES


4,760


3,860


900


-


-


Net income (loss) from continuing operations


2,173


18,257


1,547


(2,551)


(15,080)


(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax


(125)


(144)


-


19


-


CONSOLIDATED NET INCOME (LOSS)


2,048


18,113


1,547


(2,532)


(15,080)


NONCONTROLLING INTEREST IN INCOME OF SUBSIDIARIES


1,010


-


-


-


1,010


CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

1,038

$

18,113

$

1,547

$

(2,532)

$

(16,090)










Three Months Ended September 30, 2009





(in thousands, unaudited, as adjusted)(2)


















Consolidated


Radio

One


Reach

Media


Internet


Corporate/

Eliminations/

Other






STATEMENT OF OPERATIONS:

























NET REVENUE

$

74,651

$

57,989

$

14,552

$

3,548

$

(1,438)


OPERATING EXPENSES:












Programming and technical


17,994


12,628


4,727


1,604


(965)


Selling, general and administrative


23,964


18,067


3,490


3,221


(814)


Corporate selling, general and administrative


4,702


-


811


-


3,891


Stock-based compensation


302


53


-


-


249


Depreciation and amortization


5,337


2,419


983


1,615


320


Total operating expenses


52,299


33,167


10,011


6,440


2,681


Operating income (loss)


22,352


24,822


4,541


(2,892)


(4,119)


INTEREST INCOME


33


-


17


-


16


INTEREST EXPENSE


9,224


-


-


-


9,224


EQUITY IN INCOME OF AFFILIATED COMPANY


1,397


-


-


-


1,397


OTHER EXPENSE, net


38


6


-


32


-


Income (loss) before (benefit from) provision for income taxes, noncontrolling interest in income of subsidiaries and (loss) income from discontinued operations


14,520


24,816


4,558


(2,924)


(11,930)


(BENEFIT FROM) PROVISION FOR INCOME TAXES


(1,508)


(3,123)


1,615


-


-


Net income (loss) from continuing operations


16,028


27,939


2,943


(2,924)


(11,930)


(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax


(90)


(180)


-


(81)


171


CONSOLIDATED NET INCOME (LOSS)


15,938


27,759


2,943


(3,005)


(11,759)


NONCONTROLLING INTEREST IN INCOME OF SUBSIDIARIES


1,712


-


-


-


1,712


CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

14,226

$

27,759

$

2,943

$

(3,005)

$

(13,471)





Nine Months Ended September 30, 2010





(in thousands, unaudited)


















Consolidated


Radio

One


Reach

Media


Internet


Corporate/

Eliminations/

Other






STATEMENT OF OPERATIONS:

























NET REVENUE

$

208,703

$

169,576

$

32,523

$

12,330

$

(5,726)


OPERATING EXPENSES:












Programming and technical


56,736


39,183


15,102


7,161


(4,710)


Selling, general and administrative


77,457


61,866


7,412


10,503


(2,324)


Corporate selling, general and administrative


20,537


-


4,833


-


15,704


Stock-based compensation


4,877


696


-


137


4,044


Depreciation and amortization


14,195


6,331


3,160


3,853


851


Total operating expenses


173,802


108,076


30,507


21,654


13,565


Operating income (loss)


34,901


61,500


2,016


(9,324)


(19,291)


INTEREST INCOME


95


-


51


-


44


INTEREST EXPENSE


31,059


-


54


-


31,005


EQUITY IN INCOME OF AFFILIATED COMPANY


3,832


-


-


-


3,832


OTHER EXPENSE (INCOME), net


2,934


(231)


-


159


3,006


Income (loss) before provision for income taxes, noncontrolling interest in income of subsidiaries and (loss) income from discontinued operations


4,835


61,731


2,013


(9,483)


(49,426)


PROVISION FOR INCOME TAXES


4,685


3,926


759


-


-


Net income (loss) from continuing operations


150


57,805


1,254


(9,483)


(49,426)


(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax


(205)


(464)


-


259


-


CONSOLIDATED NET INCOME (LOSS)


(55)


57,341


1,254


(9,224)


(49,426)


NONCONTROLLING INTEREST IN INCOME OF SUBSIDIARIES


1,427


-


-


-


1,427


NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(1,482)

$

57,341

$

1,254

$

(9,224)

$

(50,853)





Nine Months Ended September 30, 2009





(in thousands, unaudited, as adjusted) (2)


















Consolidated


Radio

One


Reach

Media


Internet


Corporate/

Eliminations/

Other






STATEMENT OF OPERATIONS:

























NET REVENUE

$

204,835

$

162,798

$

36,055

$

10,027

$

(4,045)


OPERATING EXPENSES:












Programming and technical


56,768


39,204


14,105


6,348


(2,889)


Selling, general and administrative


68,543


55,107


5,800


9,827


(2,191)


Corporate selling, general and administrative


15,034


-


4,333


-


10,701


Stock-based compensation


1,387


366


-


-


1,021


Depreciation and amortization


15,804


7,155


2,946


4,785


918


Impairment of long-lived assets


48,953


48,953


-


-


-


Total operating expenses


206,489


150,785


27,184


20,960


7,560


Operating (loss) income


(1,654)


12,013


8,871


(10,933)


(11,605)


INTEREST INCOME


98


-


41


-


57


INTEREST EXPENSE


29,036


-


1


3


29,032


GAIN ON RETIREMENT OF DEBT


1,221


-


-


-


1,221


EQUITY IN INCOME OF AFFILIATED COMPANY


3,294


-


-


-


3,294


OTHER EXPENSE (INCOME), net


96


115


-


(39)


20


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


(26,173)


11,898


8,911


(10,897)


(36,085)


PROVISION FOR INCOME TAXES


7,340


4,191


3,149


-


-


Net (loss) income from continuing operations


(33,513)


7,707


5,762


(10,897)


(36,085)


(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax


(835)


(19)


-


(1,114)


298


CONSOLIDATED NET (LOSS) INCOME


(34,348)


7,688


5,762


(12,011)


(35,787)


NONCONTROLLING INTEREST IN INCOME OF SUBSIDIARIES


3,650


-


-


-


3,650


NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(37,998)

$

7,688

$

5,762

$

(12,011)

$

(39,437)

The Company announced during its 2009 fourth quarter conference call that it would continue to hold only an annual conference call as opposed to quarterly conference calls for the fiscal year 2010. Thus, no conference call is scheduled for discussion of the third quarter results.

Radio One, Inc. (http://www.radio-one.com/) is a diversified media company that primarily targets African-American and urban consumers. The Company is one of the nation's largest radio broadcasting companies, currently owning 53 broadcast stations located in 16 urban markets in the United States. As a part of its core broadcasting business, Radio One operates syndicated programming including the Russ Parr Morning Show, the Yolanda Adams Morning Show, the Rickey Smiley Morning Show, CoCo Brother Live, CoCo Brother's "Spirit" program, Bishop T.D. Jakes' "Empowering Moments", the Reverend Al Sharpton Show, and the Warren Ballentine Show. The Company also owns a controlling interest in Reach Media, Inc. (http://www.blackamericaweb.com/), owner of the Tom Joyner Morning Show and other businesses associated with Tom Joyner. Beyond its core radio broadcasting business, Radio One owns Interactive One (http://www.interactiveone.com/), an online platform serving the African-American community through social content, news, information, and entertainment, which operates a number of branded sites, including News One, UrbanDaily, HelloBeautiful, Community Connect Inc. (http://www.communityconnect.com/), an online social networking company, which operates a number of branded websites, including BlackPlanet, MiGente, and Asian Avenue and an interest in TV One, LLC (http://www.tvoneonline.com/), a cable/satellite network programming primarily to African-Americans.

Notes:

1 "Station operating income" consists of net loss before depreciation and amortization, corporate expenses, stock-based compensation, equity in income of affiliated company, income taxes, noncontrolling interest in income (loss) of subsidiaries, interest expense, impairment of long-lived assets, other (income) expense, gain on retirement of debt, (income) loss from discontinued operations, net of tax, and interest income. Station operating income is not a measure of financial performance under generally accepted accounting principles. Nevertheless we believe station operating income is often a useful measure of a broadcasting company's operating performance and is a significant basis used by our management to measure the operating performance of our stations within the various markets because station operating income provides helpful information about our results of operations apart from expenses associated with our physical plant, income taxes, investments, debt financings and retirements, overhead, stock-based compensation, impairment charges, and asset sales. Station operating income is frequently used as one of the bases for comparing businesses in our industry, although our measure of station operating income may not be comparable to similarly titled measures of other companies. Station operating income does not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as an alternative to those measurements as an indicator of our performance. A reconciliation of net loss to station operating income has been provided in this release.

2 Certain reclassifications associated with accounting for discontinued operations have been made to prior period balances to conform to the current presentation. These reclassifications had no effect on any other previously reported or consolidated net income or loss or any other statement of operations, balance sheet or cash flow amounts. Where applicable, these financial statements have been identified as "as adjusted."

3 For the three months ended September 30, 2010 and 2009, Radio One had 52,064,108 and 56,242,964 shares of common stock outstanding on a weighted average basis (basic), and 54,262,885 and 56,684,369 shares of common stock outstanding on a weighted average basis (fully diluted) for outstanding stock options, respectively.

4 For the nine months ended September 30, 2010 and 2009, Radio One had 51,316,498 and 61,873,161 shares of common stock outstanding on a weighted average basis, both basic and fully diluted for outstanding stock options, respectively.

5 "Adjusted EBITDA" consists of net loss plus (1) depreciation, amortization, income taxes, interest expense, equity in income of affiliated company, noncontrolling interest in income (loss) of subsidiaries, impairment of long-lived assets, stock-based compensation, other (income) expense, (income) loss from discontinued operations, net of tax, less (2) interest income and gain on retirement of debt. Net income before interest income, interest expense, income taxes, depreciation and amortization is commonly referred to in our business as "EBITDA." Adjusted EBITDA and EBITDA are not measures of financial performance under generally accepted accounting principles. We believe Adjusted EBITDA is often a useful measure of a company's operating performance and is a significant basis used by our management to measure the operating performance of our business because Adjusted EBITDA excludes charges for depreciation, amortization and interest expense that have resulted from our acquisitions and debt financing, our taxes, impairment charges, as well as our equity in (income) loss of our affiliated company, gain on retirements of debt, and any discontinued operations. Accordingly, we believe that Adjusted EBITDA provides useful information about the operating performance of our business, apart from the expenses associated with our physical plant, capital structure or the results of our affiliated company. Adjusted EBITDA is frequently used as one of the bases for comparing businesses in our industry, although our measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA and EBITDA do not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as alternatives to those measurements as an indicator of our performance. A reconciliation of net loss to EBITDA and Adjusted EBITDA has been provided in this release.

SOURCE Radio One, Inc.