WASHINGTON, Aug. 4, 2016 /PRNewswire/ -- Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported its results for the quarter ended June 30, 2016.  Net revenue was approximately $122.7 million, an increase of 2.4% from the same period in 2015. Station operating income¹ was approximately $48.9 million, an increase of 5.5% from the same period in 2015. The Company reported operating income of approximately $27.7 million for the three months ended June 30, 2016, compared to operating income of $24.8 million for the same period in 2015. Net income was approximately $7.3 million or $0.15 per share (basic) compared to a net loss of $13.0 million or $0.27 per share (basic) for the same period in 2015. 

Alfred C. Liggins, III, Radio One's CEO and President stated, "I was pleased that our core radio advertising was positive at +1.4% for the quarter, and that we outperformed our markets overall. Disciplined cost management allowed us to grow our radio division cash flow, with Adjusted EBITDA up 10% for the quarter. We improved Adjusted EBITDA for each of our operating segments in Q2, leading to an overall increase of 9.6%. Our cable television advertising revenues in Q2 were impacted by some under-delivery against ratings estimates, however, sequential Q3 delivery is significantly improved, currently up by 9.5% in the primetime 25-54 demo, and our overall EBITDA guidance for the year still holds. During the quarter, we repurchased $20 million of our 2020 notes at an average price of 85.9, which both reduces our ongoing interest burden and helps move us towards our long term goal of lower leverage."

 

 

 

 

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 Forms 10-K, 10-Q, 8-K and other filings with the Securities and Exchange Commission (the "SEC"). Radio One does not undertake any duty to update any forward-looking statements.

Net revenue consists of gross revenue, net of local and national agency and outside sales representative commissions. Agency and outside sales representative commissions are calculated based on a stated percentage applied to gross billing.

 

Net revenue increased to approximately $122.7 million for the quarter ended June 30, 2016, from approximately $119.8 million for the same period in 2015, an increase of 2.4%. Net revenues from our radio broadcasting segment decreased 0.2% for the quarter ended June 30, 2016, versus the same period in 2015. We experienced net revenue growth in eight of our radio markets (most significantly in Washington D.C., Charlotte and Cleveland); however, this growth was offset by declines in other markets (with Columbus, Philadelphia, Houston and Detroit experiencing the most significant declines). Reach Media's net revenues increased 2.8% in the second quarter of 2016, compared to the same period in 2015.  The "Tom Joyner Fantastic Voyage" took place during the second quarters of 2016 and 2015 and generated revenue of approximately $8.8 million and $8.7 million, respectively, for Reach Media. We recognized approximately $47.6 million of revenue from our cable television segment during the three months ended June 30, 2016, compared to approximately $45.6 million for the same period in 2015, the increase due primarily from an increase in affiliate sales. Finally, net revenues for our internet business increased 7.9% for the three months ended June 30, 2016, compared to the same period in 2015 due to higher direct revenue.

Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of long-lived assets, increased to approximately $85.7 million for the quarter ended June 30, 2016, up 1.0% from the approximately $84.9 million incurred for the comparable quarter in 2015.

Depreciation and amortization expense decreased to approximately $8.6 million compared to approximately $9.0 million for the quarters ended June 30, 2016 and 2015, respectively, a decrease of 4.5%. The decrease was due to certain assets reaching the end of their useful lives. 

Interest expense increased to approximately $20.5 million for the quarter ended June 30, 2016, compared to approximately $20.0 million for the same period in 2015.  On April 17, 2015, the Company's 2011 Credit Agreement, and TV One notes were paid off, with balances of $367.6 million and $119.0 million, respectively. The payoffs were achieved by the Company entering into its new $350.0 million 2015 Credit Facility, issuing the 2022 Notes in an aggregate principal amount of $350.0 million and the Comcast Note in the aggregate principal amount of approximately $11.9 million. The Company made cash interest payments of approximately $18.6 million on its outstanding debt for the quarter ended June 30, 2016, compared to cash interest payments of approximately $2.6 million on the 2011 Credit Agreement and the notes that were outstanding with respect to the TV One debt for the quarter ended June 30, 2015.  Thus, the increased interest expense and cash payments were made due to higher debt balances.

The gain on retirement of debt of approximately $2.6 million for the quarter ended June 30, 2016 was due to the redemption of approximately $20 million of our 2020 Notes at a discount. The loss on retirement of debt of approximately $7.1 million for the quarter ended June 30, 2015 was due to the retirement of the 2011 Credit Facility and payoff of the TV One Notes during the second quarter of 2015. This amount included a write-off of approximately $1.3 million of previously capitalized debt financing costs, a write-off of $844,000 of original issue discount associated with the 2011 Credit Agreement, as well as $827,000 associated with the call premium to refinance the credit facility, $106,000 associated with the consent to the existing holders of the 2020 Notes and approximately $4.0 million of costs associated with the financing transactions.

The provision for income taxes for the quarter ended June 30, 2016 was approximately $2.2 million and $9.9 million for the comparable period in 2015, with the change primarily attributable to the deferred tax liability ("DTL") for indefinite-lived intangible assets. The change in taxes was primarily due to the completion of tax amortization from previously acquired indefinite-lived intangible assets. The Company paid $352,000 and $276,000 in taxes for the quarters ended June 30, 2016 and 2015, respectively.

The increase in noncontrolling interests in income of subsidiaries was due to greater net income generated by Reach Media.

Other pertinent financial information includes capital expenditures of approximately $1.1 million and $1.6 million for the quarters ended June 30, 2016 and 2015, respectively.  As of June 30, 2016, the Company had total debt (net of cash balances and original issue discount) of approximately $951.2 million. During the three months ended June 30, 2016, the Company repurchased 575,608 shares of Class D common stock in the aggregate amount of approximately $1.1 million.  During the six months ended June 30, 2016, the Company repurchased 636,174 shares of Class D common stock in the aggregate amount of approximately $1.2 million. The Company, in connection with its 2009 stock plan, is authorized to purchase shares of Class D common stock to satisfy employee's tax obligations in connection with the vesting of share grants under the plan. During the six months ended June 30, 2016, the Company repurchased 330,111 shares of Class D common stock, to satisfy employee tax obligations, in the amount of $568,000.  During the three and six months ended June 30, 2015, the Company repurchased 345,293 shares of Class D common stock, to satisfy employee tax obligations, in the amount of approximately $1.4 million.

Supplemental Financial Information:

For comparative purposes, the following more detailed, unaudited statements of operations for the three and six months ended June 30, 2016 and 2015 are included.  These detailed, unaudited and adjusted statements of operations include certain reclassifications.  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.

 

 

 

 

 

 

 

 

 

Radio One, Inc. will hold a conference call to discuss its results for second fiscal quarter of 2016. The conference call is scheduled for Thursday, August 04, 2016 at 10:00 a.m. EDT. To participate on this call, U.S. callers may dial toll-free 1-800-230-1085; international callers may dial direct (+1) 612-332-0107.

A replay of the conference call will be available from 12:00 p.m. EDT August 04, 2016 until 11:59 p.m. EDT August 06, 2016. Callers may access the replay by calling 1-800-475-6701; international callers may dial direct (+1) 320-365-3844. The replay Access Code is 397824. Access to live audio and a replay of the conference call will also be available on Radio One's corporate website at www.radio-one.com. The replay will be made available on the website for seven days after the call.

Radio One, Inc. (radio-one.com), together with its subsidiaries, is a diversified media company that primarily targets African-American and urban consumers. It is one of the nation's largest radio broadcasting companies, currently owning and/or operating 56 stations in 16 urban markets in the United States. Through its controlling interest in Reach Media, Inc. (blackamericaweb.com), the Company also operates syndicated programming including the Tom Joyner Morning Show, the Russ Parr Morning Show, the Rickey Smiley Morning Show, the DL Hughley Show, Bishop T.D. Jakes' Empowering Moments, and the Reverend Al Sharpton Show.

Beyond its core radio broadcasting franchise, Radio One owns Interactive One (interactiveone.com), the fastest growing and definitive digital resource for Black and Latin Americans, reaching millions each month through social content, news, information, and entertainment. Interactive One operates a number of branded sites including News One (news), The Urban Daily (men), Hello Beautiful (women), Global Grind (Millennials) and social networking websites such as BlackPlanet and MiGente. The Company also owns TV One, LLC (tvone.tv), a cable/satellite network programming serving more than 57 million households, offering a broad range of real-life and entertainment-focused original programming, classic series, movies and music designed to entertain, inform and inspire a diverse audience of adult Black viewers.  Additionally, One Solution combines the dynamics of Radio One's holdings to provide brands with an integrated and effectively engaging marketing approach that reaches 82% of Black Americans throughout the country.

Notes:
1              "Station operating income" consists of net loss before depreciation and amortization, corporate expenses, stock-based compensation, income taxes, noncontrolling interest in income (loss) of subsidiaries, interest expense, impairment of long-lived assets, other (income) expense, loss (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, station operating income 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 fixed assets and long-lived intangible assets, income taxes, investments, debt financings and retirements, overhead, stock-based compensation, impairment charges, and asset sales. Our measure of station operating income may not be comparable to similarly titled measures of other companies as our definition includes the results of all four segments (radio broadcasting, Reach Media, internet and cable television). 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 income (loss) to station operating income has been provided in this release.

2              Certain reclassifications have been made to prior year balances to conform to the current year 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 Reclassified."

3              For the three months ended June 30, 2016 and 2015, Radio One had 48,110,440 and 48,062,991 shares of common stock outstanding on a weighted average basis (basic), respectively.  For the six months ended June 30, 2016 and 2015, Radio One had 48,387,482 and 47,840,082 shares of common stock outstanding on a weighted average basis (basic), respectively. 

4              For the three months ended June 30, 2016 and 2015, Radio One had 49,279,142 and 48,062,991 shares of common stock outstanding on a weighted average basis (fully diluted for outstanding stock options), respectively.  For the six months ended June 30, 2016 and 2015, Radio One had 49,561,381 and 47,840,082 shares of common stock outstanding on a weighted average basis (fully diluted for outstanding stock options), respectively.

5              "Adjusted EBITDA" consists of net loss plus (1) depreciation, amortization, income taxes, interest expense, noncontrolling interest in income of subsidiaries, impairment of long-lived assets, stock-based compensation, loss on retirement of debt, Employment Agreement and incentive plan award expenses, severance-related costs, less (2) other income and interest income. 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. However, 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, 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 fixed assets and long-lived intangible assets, 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, including, but not limited to the fact that our definition includes the results of all four segments (radio broadcasting, Reach Media, internet and cable television).  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 income (loss) to EBITDA and Adjusted EBITDA has been provided in this release.

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SOURCE Radio One, Inc.

Peter D. Thompson, EVP and CFO, (301) 429-4638