Radio One, Inc. Reports Third Quarter Results

Nov 03, 2011, 06:45 ET from Radio One, Inc.

WASHINGTON, Nov. 3, 2011 /PRNewswire/ -- Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported its results for the quarter ended September 30, 2011.  Giving effect to the consolidation of TV One, net revenue was approximately $104.4 million, an increase of 40.3% from the same period in 2010.  Also giving effect to the consolidation of TV One, station operating income(1) was approximately $35.8 million, an increase of 26.5% from the same period in 2010. The Company reported operating income of approximately $13.1 million compared to operating income of approximately $17.3 million for the same period in 2010. Net loss was approximately $9.9 million or $0.20 per share, compared to net income of approximately $1.0 million or $0.02 per share for the same period in 2010.    

(Logo: http://photos.prnewswire.com/prnh/20090806/PH57529LOGO )

Alfred C. Liggins, III, Radio One's CEO and President stated, "The third quarter again highlights the importance of consolidating TV One into our results: radio was relatively flat, however, our TV and Internet divisions both showed good revenue progression from prior year, and provide a sound diversification strategy. We have made some changes in certain radio markets designed to improve long term performance: in Houston we are launching News 92 FM; in Columbus, we switched from gospel to the Jack format; in Detroit we signed a local marketing agreement for 107.5 WGPR; and, in Philadelphia, we moved our adult urban format to our hip-hop signal, and vice versa. I am confident that these strategic changes will reap rewards in the long-term."

RESULTS OF OPERATIONS

Three Months Ended September 30,

Nine Months Ended September 30,

2011

2010

2011

2010

(as adjusted)(2)

(as adjusted)(2)

STATEMENT OF OPERATIONS

(unaudited)

(unaudited)

(in thousands, except share data)

(in thousands, except share data)

NET REVENUE

$                  104,445

$                    74,430

$                  266,516

$                  208,557

OPERATING EXPENSES

Programming and technical

32,742

18,762

82,291

56,592

Selling, general and administrative, excluding stock-based compensation

35,878

27,336

95,803

77,383

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

10,442

5,488

25,214

20,537

Stock-based compensation

759

908

2,895

4,877

Depreciation and amortization

11,504

4,610

25,825

14,156

Total operating expenses

91,325

57,104

232,028

173,545

            Operating Income

13,120

17,326

34,488

35,012

INTEREST INCOME

103

28

120

95

INTEREST EXPENSE

22,973

12,122

65,222

31,059

GAIN ON INVESTMENT IN AFFILIATED COMPANY

-

-

146,879

-

LOSS ON RETIREMENT OF DEBT

-

-

7,743

-

EQUITY IN INCOME OF AFFILIATED COMPANY

-

1,784

3,287

3,832

OTHER (INCOME) EXPENSE, net

(19)

50

3

2,934

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

(9,731)

6,966

111,806

4,946

(BENEFIT FROM) PROVISION FOR INCOME TAXES

(2,325)

4,760

81,905

4,685

Net (loss) income from continuing operations

(7,406)

2,206

29,901

261

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax

11

(158)

(71)

(316)

CONSOLIDATED NET (LOSS) INCOME

(7,395)

2,048

29,830

(55)

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

2,483

1,010

5,403

1,427

CONSOLIDATED NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$                    (9,878)

$                      1,038

$                    24,427

$                    (1,482)

AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS:

NET (LOSS) INCOME FROM CONTINUING OPERATIONS

$                    (9,889)

$                      1,196

$                    24,498

$                    (1,166)

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax

11

(158)

(71)

(316)

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$                    (9,878)

$                      1,038

$                    24,427

$                    (1,482)

Weighted average shares outstanding - basic(3)

50,270,550

52,064,108

51,072,480

51,316,498

Weighted average shares outstanding - diluted(4)

50,270,550

54,262,885

52,943,536

51,316,498

Three Months Ended September 30,

Nine Months Ended September 30,

2011

2010

2011

2010

(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 (loss) income from continuing operations (basic)

$                      (0.20)

$                    0.02

$                      0.48

$                  (0.02)

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

0.00

(0.00)

(0.00)

(0.01)

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

$                      (0.20)

$                    0.02

$                      0.48

$                  (0.03)

Net (loss) income from continuing operations (diluted)

$                      (0.20)

$                    0.02

$                      0.46

$                  (0.02)

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

0.00

(0.00)

(0.00)

(0.01)

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

$                      (0.20)

$                    0.02

$                      0.46

$                  (0.03)

SELECTED OTHER DATA

Station operating income (1)

$                    35,825

$                28,332

$                  88,422

$                74,582

Station operating income margin (% of net revenue)

34.3%

38.1%

33.2%

35.8%

Station operating income reconciliation:

Consolidated net (loss) income attributable to common stockholders

$                    (9,878)

$                  1,038

$                  24,427

$                (1,482)

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

Interest income

(103)

(28)

(120)

(95)

Interest expense

22,973

12,122

65,222

31,059

(Benefit from) provision for income taxes

(2,325)

4,760

81,905

4,685

Corporate selling, general and administrative expenses

10,442

5,488

25,214

20,537

Stock-based compensation

759

908

2,895

4,877

Gain on investment in affiliated company

-

-

(146,879)

-

Loss on retirement of debt

-

-

7,743

-

Equity in income of affiliated company

-

(1,784)

(3,287)

(3,832)

Other (income) expense, net

(19)

50

3

2,934

Depreciation and amortization

11,504

4,610

25,825

14,156

Noncontrolling interest in income of subsidiaries

2,483

1,010

5,403

1,427

(Income) loss from discontinued operations, net of tax

(11)

158

71

316

Station operating income

$                    35,825

$                28,332

$                  88,422

$                74,582

Adjusted EBITDA(5)

$                    25,383

$                22,844

$                  63,208

$                54,045

Adjusted EBITDA reconciliation:

Consolidated net (loss) income attributable to common stockholders

$                    (9,878)

$                  1,038

$                  24,427

$                (1,482)

Interest income

(103)

(28)

(120)

(95)

Interest expense

22,973

12,122

65,222

31,059

(Benefit from) provision for income taxes

(2,325)

4,760

81,905

4,685

Depreciation and amortization

11,504

4,610

25,825

14,156

EBITDA

$                    22,171

$                22,502

$                197,259

$                48,323

Stock-based compensation

759

908

2,895

4,877

Gain on investment in affiliated company

-

-

(146,879)

-

Loss on retirement of debt

-

-

7,743

-

Equity in income of affiliated company

-

(1,784)

(3,287)

(3,832)

Other (income) expense, net

(19)

50

3

2,934

Noncontrolling interest in income of subsidiaries

2,483

1,010

5,403

1,427

(Income) loss from discontinued operations, net of tax

(11)

158

71

316

Adjusted EBITDA

$                    25,383

$                22,844

$                  63,208

$                54,045

September 30, 2011

December 31, 2010

(unaudited)

(as adjusted)

(in thousands)

SELECTED BALANCE SHEET DATA:

Cash and cash equivalents

$                    33,171

$                  9,192

Intangible assets, net

1,278,256

838,945

Total assets

1,521,021

999,212

Total debt (including current portion)

803,655

642,222

Total liabilities

1,069,515

774,242

Total stockholders' equity

215,925

194,335

Redeemable noncontrolling interest

29,711

30,635

Noncontrolling interest

205,870

-

SELECTED LEVERAGE DATA: 

Current Amount

Outstanding

Applicable

Interest Rate

(in thousands)

Senior bank term debt, net of original issue discount

of approximately $7.1 million (subject to variable

rates) (a)

$                  376,991

7.50%

12 1/2%/15%  senior subordinated notes

(fixed rate)

305,917

15.00%

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

747

6.38%

10% Senior Secured TV One Notes due

March 2016 (fixed rate)

119,000

10.00%

Note payable (fixed rate)

1,000

7.00%

(a) Subject to variable Libor Rate plus a spread currently at 6.00% and incorporated into the applicable interest rate set forth above.

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 and other filings with the Securities and Exchange Commission.  Radio One does not undertake any duty to update any forward-looking statements.

Net revenue increased to approximately $104.4 million for the quarter ended September 30, 2011, from approximately $74.4 million for the same period in 2010, an increase of 40.3%. We began to consolidate the results of TV One during the second quarter of 2011 and recognized approximately $29.5 million of revenue from our new cable television segment during the three months ended September 30, 2011. The radio markets that we operate in grew 1.7% for the quarter and 2.5% year to date, led primarily by growth in digital revenues, while national revenue and local revenue in our radio markets were relatively flat for the quarter.  Our radio stations' net revenues increased 0.3% with the most significant increases noted in our Atlanta, Charlotte, Cincinnati, Raleigh and St. Louis clusters, while our Columbus, Dallas, Indianapolis and Washington D.C. markets experienced the most significant declines. Total core radio revenue (radio stations and syndicated programs excluding Reach Media) improved 1.4% during the quarter. While Reach Media's revenue declined 4.7% in the quarter, this decline was an improvement from the decline experienced during the second quarter of 2011. Net revenue for our internet segment improved 11.5% for the three months ended September 30, 2011 compared to the same period in 2010.

Operating expenses, excluding depreciation and amortization and stock-based compensation, increased to approximately $79.1 million for the quarter ended September 30, 2011, up 53.3% from the approximately $51.6 million incurred for the comparable quarter in 2010. Most of the increase is a result of the TV One consolidation specifically related to programming and technical operating expenses.  For our cable television segment, programming and technical expenses include expenses associated with the technical, programming, production, and content management. Approximately $13.7 million of our consolidated programming and technical operating expenses were incurred by TV One, with approximately $11.2 million of this amount relating specifically to content amortization. Excluding the impact of consolidating TV One results, our programming and technical expenses would have increased by 1.6% for the quarter compared to the same period in 2010.

Stock-based compensation decreased to $759,000 for the quarter ended September 30, 2011, compared to $908,000 for the same period in 2010. This decrease in stock-based compensation expense is due to one-time accelerated vesting that occurred in 2010 associated with the 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.

Depreciation and amortization expense increased to approximately $11.5 million compared to approximately $4.6 million for the quarters ended September 30, 2011 and 2010, respectively, an increase of 150.0%. Additional depreciation and amortization expense of approximately $7.8 million resulted from the fixed and intangible assets recorded as part of the consolidation of TV One.  This increased expense was partially offset by the completion of amortization for certain intangible assets and the completion of depreciation and amortization for certain assets.

Interest expense increased to approximately $23.0 million for the quarter ended September 30, 2011, from approximately $12.1 million for the same period in 2010, an increase of 90.1%. The increase in interest expense was due to higher interest rates associated with the 2011 Credit Agreement, Amended Exchange Offer and TV One Notes, which were in effect for the three months ended September 30, 2011 compared to the same period in 2010.  The overall effective rate of borrowing for the three months ended September 30, 2011 increased approximately 4.0% compared to the three months ended September 30, 2010.  Approximately $3.0 million of the increased interest expense relates to the debt recorded as part of the consolidation of TV One.

Equity in income of affiliated company decreased to $0 for the quarter ended September 30, 2011, compared to approximately $1.8 million for the same period in 2010, a decrease of 100.0%. Equity in income of affiliated company primarily reflects our estimated equity in the net income of TV One. The decrease to equity in income of affiliated company for the three months ended September 30, 2011 was due to the consolidation of TV One during the prior quarter.  Previously, the Company's share of the net income was driven by TV One's current capital structure and the Company's percentage ownership of the equity securities of TV One.

The benefit from income taxes for the quarter ended September 30, 2011 was approximately $2.3 million compared to a provision for income taxes of approximately $4.8 million for the quarter ended September 30, 2010. Substantially all of the decrease in income taxes relates to the deferred tax liability for TV One.  The consolidated effective tax rate for the three months ended September 30, 2011 and 2010 was 23.9% and 68.3%, respectively.

Income (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 income from discontinued operations, net of tax, for the three months ended September 30, 2011 resulted from the remaining Boston radio station entering into an LMA in June 2011. The loss from discontinued operations, net of tax, for the quarter ended September 30, 2010 of $158,000 resulted primarily from legal and litigation expenses incurred as a result of ongoing legal activity related to certain previously sold stations. The income (loss) from discontinued operations, net of tax, includes no tax provision for the three months ended September 30, 2011 and 2010.

The increase in noncontrolling interests in income of subsidiaries is due primarily to the impact of consolidating TV One results for the three months ended September 30, 2011.  This amount is partially offset by lower net income generated by Reach Media for the three months ended September 30, 2011 compared to the same period in 2010.

Other pertinent financial information includes capital expenditures of approximately $1.8 million and $1.5 million for the quarters ended September 30, 2011 and 2010, respectively. In addition, as of September 30, 2011, Radio One had total debt (net of cash balances) of approximately $770.5 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, 2011 and 2010 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, 2011

(in thousands, unaudited)

Corporate/

Reach

Cable

Eliminations/

Consolidated

Radio One

Media

Internet

Television

Other

STATEMENT OF OPERATIONS:

NET REVENUE

$

104,445

$

58,733

$

13,427

$

4,884

$

29,545

$

(2,144)

OPERATING EXPENSES:

Programming and technical

32,742

13,659

5,309

2,008

13,684

(1,918)

Selling, general and administrative

35,878

21,325

3,929

3,054

8,239

(669)

Corporate selling, general and administrative

10,442

-

1,252

-

1,380

7,810

Stock-based compensation

759

133

-

24

-

602

Depreciation and amortization

11,504

1,657

988

838

7,779

242

Total operating expenses

91,325

36,774

11,478

5,924

31,082

6,067

          Operating income (loss)

13,120

21,959

1,949

(1,040)

(1,537)

(8,211)

INTEREST INCOME

103

-

3

-

100

-

INTEREST EXPENSE

22,973

-

18

-

3,039

19,916

OTHER (INCOME) EXPENSE, net

(19)

(19)

-

-

-

-

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

(9,731)

21,978

1,934

(1,040)

(4,476)

(28,127)

(BENEFIT FROM) PROVISION FOR INCOME TAXES

(2,325)

(2,833)

508

-

-

-

Net (loss) income from continuing operations

(7,406)

24,811

1,426

(1,040)

(4,476)

(28,127)

INCOME FROM DISCONTINUED OPERATIONS, net of tax

11

11

-

-

-

-

CONSOLIDATED NET (LOSS) INCOME

(7,395)

24,822

1,426

(1,040)

(4,476)

(28,127)

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

2,483

-

-

-

-

2,483

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(9,878)

$

24,822

$

1,426

$

(1,040)

$

(4,476)

$

(30,610)

Three Months Ended September 30, 2010

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

Corporate/

Reach

Eliminations/

Consolidated

Radio One

Media

Internet

Other

STATEMENT OF OPERATIONS:

NET REVENUE

$

74,430

$

57,906

$

14,092

$

4,382

$

(1,950)

OPERATING EXPENSES:

Programming and technical

18,762

12,958

5,072

2,376

(1,644)

Selling, general and administrative

27,336

20,644

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

4,610

2,027

1,089

1,222

272

Total operating expenses

57,104

35,756

11,643

6,885

2,820

          Operating income (loss)

17,326

22,150

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 (INCOME), net

50

-

-

48

2

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

6,966

22,150

2,447

(2,551)

(15,080)

PROVISION FOR INCOME TAXES

4,760

3,860

900

-

-

Net income (loss) from continuing operations

2,206

18,290

1,547

(2,551)

(15,080)

(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax

(158)

(177)

-

19

-

CONSOLIDATED NET INCOME (LOSS)

2,048

18,113

1,547

(2,532)

(15,080)

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

1,010

-

-

-

1,010

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

1,038

$

18,113

$

1,547

$

(2,532)

$

(16,090)

Nine Months Ended September 30, 2011

(in thousands, unaudited)

Corporate/

Reach

Cable

Eliminations/

Consolidated

Radio One

Media

Internet

Television

Other

STATEMENT OF OPERATIONS:

NET REVENUE

$

266,516

$

167,152

$

37,928

$

12,705

$

54,711

$

(5,980)

OPERATING EXPENSES:

Programming and technical

82,291

39,764

15,919

6,692

25,455

(5,539)

Selling, general and administrative

95,803

63,101

12,228

8,209

14,053

(1,788)

Corporate selling, general and administrative

25,214

-

4,598

-

1,297

19,319

Stock-based compensation

2,895

452

-

82

-

2,361

Depreciation and amortization

25,825

5,091

2,961

2,875

14,208

690

Total operating expenses

232,028

108,408

35,706

17,858

55,013

15,043

          Operating income (loss)

34,488

58,744

2,222

(5,153)

(302)

(21,023)

INTEREST INCOME

120

-

12

-

105

3

INTEREST EXPENSE

65,222

-

46

-

6,187

58,989

GAIN ON INVESTMENT IN AFFILIATED COMPANY

146,879

-

-

-

-

146,879

LOSS ON RETIREMENT OF DEBT

7,743

-

-

-

-

7,743

EQUITY IN INCOME OF AFFILIATED COMPANY

3,287

-

-

-

-

3,287

OTHER EXPENSE (INCOME), net

3

(6)

-

-

9

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

111,806

58,750

2,188

(5,153)

(6,384)

62,405

PROVISION FOR INCOME TAXES

81,905

81,319

586

-

-

-

Net income (loss) from continuing operations

29,901

(22,569)

1,602

(5,153)

(6,384)

62,405

(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax

(71)

(72)

-

1

-

CONSOLIDATED NET INCOME (LOSS)

29,830

(22,641)

1,602

(5,152)

(6,384)

62,405

NONCONTROLLING INTEREST IN INCOME OF SUBSIDIARIES

5,403

-

-

-

-

5,403

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

24,427

$

(22,641)

$

1,602

$

(5,152)

$

(6,384)

$

57,002

Nine Months Ended September 30, 2010

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

Corporate/

Reach

Eliminations/

Consolidated

Radio One

Media

Internet

Other

STATEMENT OF OPERATIONS:

NET REVENUE

$

208,557

$

169,430

$

32,523

$

12,330

$

(5,726)

OPERATING EXPENSES:

Programming and technical

56,592

39,039

15,102

7,161

(4,710)

Selling, general and administrative

77,383

61,792

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

14,156

6,292

3,160

3,853

851

Total operating expenses

173,545

107,819

30,507

21,654

13,565

          Operating income (loss)

35,012

61,611

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

4,946

61,842

2,013

(9,483)

(49,426)

PROVISION FOR INCOME TAXES

4,685

3,926

759

-

-

Net income (loss) from continuing operations

261

57,916

1,254

(9,483)

(49,426)

(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax

(316)

(575)

-

259

-

CONSOLIDATED NET (LOSS) INCOME

(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)

Radio One, Inc. (Nasdaq: ROIAK; ROIA) will be holding a conference call for investors, analysts and other interested parties to discuss its results for third fiscal quarter of 2011. The conference call is scheduled for Thursday, November 3, 2011 at 10:00 a.m. EDT. To participate on this call, U.S. callers may dial toll-free 1-800-230-1074; international callers may dial direct (+1) 612-234-9960.

A replay of the conference call will be available from 12:30 p.m. EDT November 3, 2011 until 11:59 p.m. November 5, 2011. 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 222011. Access to live audio and a replay of the conference call will also be available on Radio One's corporate website at http://www.radio-one.com/. The replay will be made available on the website for seven days after the call.

Radio One, Inc. (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 or operating 53 broadcast stations located in 15 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. (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 (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. (www.communityconnect.com), an online social networking company, which operates a number of branded websites, including BlackPlanet, MiGente, and Asian Avenue.  In addition, the Company owns a controlling interest in TV One, LLC (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, loss (gain) on retirement of debt, (income) loss from discontinued operations, net of tax, interest income and gain on purchase of affiliated company. 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 fixed assets and long-lived intangible assets, 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. Station operating income includes results from all three of our operating segments (radio broadcasting, internet and cable television).

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, 2011 and 2010, Radio One had 50,270,550 and 52,064,108 shares of common stock outstanding on a weighted average basis (basic), and 50,270,550 and 54,262,885 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, 2011 and 2010, Radio One had 51,072,480 and 51,316,498 shares of common stock outstanding on a weighted average basis basic, and 52,943,536 and 51,316,498 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, loss from discontinued operations, net of tax, less (2) equity in income of affiliated company, other income, interest income and gain on purchase of affiliated company. 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 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. 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.



RELATED LINKS

http://www.radio-one.com