Radio One, Inc. Reports Third Quarter Results

WASHINGTON, Nov. 1, 2012 /PRNewswire/ -- Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported its results for the quarter ended September 30, 2012.  Giving effect to the consolidation of TV One, net revenue was approximately $110.0 million, an increase of 5.4% from the same period in 2011.  Also giving effect to the consolidation of TV One, station operating income1 was approximately $40.9 million, an increase of 14.2% from the same period in 2011. The Company reported operating income of approximately $21.5 million compared to operating income of approximately $13.1 million for the same period in 2011. Net loss was approximately $13.1 million or $0.26 per share compared to net loss of $9.9 million or $0.20 per share, for the same period in 2011. 

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

Alfred C. Liggins, III, Radio One's CEO and President stated, "Our core radio revenues continue to outperform the markets in which we operate, in Q3 by 500Bps. Political revenue was just over $2 million in the quarter, the highest level in Q3 in company history, and ramped-up strongly in October, helping to push our fourth quarter radio pacings to approximately +13%. TV One revenues grew by 12.5% and EBITDA by 32.1%. A solid upfront cycle saw both volume and CPM's grow by mid-single digits. During the third quarter we successfully launched two strong new TV series: R&B Divas and the Rickey Smiley Show; cross promotion across the radio and digital platform helped both shows perform strongly, debuting with household ratings of 1.09HH and 1.29HH, respectively. I believe we can build on that success to grow our cash flows in Q4 and 2013."

 

RESULTS OF OPERATIONS


















Three Months Ended
September 30,


Nine Months Ended
September 30, 



2012


2011


2012


2011

STATEMENT OF OPERATIONS

(unaudited)


(unaudited)



(in thousands,
except share data)


(in thousands,
except share data)




















NET REVENUE

$    109,952


$    104,445


$    318,910


$    266,516


OPERATING EXPENSES









Programming and technical, excluding stock-based compensation

32,454


32,742


96,577


82,291


Selling, general and administrative, excluding stock-based compensation

36,630


35,878


106,992


95,803


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

9,613


10,442


29,003


25,214


Stock-based compensation

37


759


127


2,895


Depreciation and amortization 

9,685


11,504


29,112


25,825


Impairment of long-lived assets

-


-


313


-


Total operating expenses 

88,419


91,325


262,124


232,028


             Operating income 

21,533


13,120


56,786


34,488


INTEREST INCOME

108


103


155


120


INTEREST EXPENSE

22,179


22,973


68,854


65,222


GAIN ON INVESTMENT IN AFFILIATED COMPANY

-


-


-


146,879


LOSS ON RETIREMENT OF DEBT

-


-


-


7,743


EQUITY IN INCOME OF AFFILIATED COMPANY

-


-


-


3,287


OTHER EXPENSE (INCOME), net

681


(19)


1,284


3


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

(1,219)


(9,731)


(13,197)


111,806


PROVISION FOR (BENEFIT FROM) INCOME TAXES

9,051


(2,325)


25,814


81,905


Net (loss) income from continuing operations

(10,270)


(7,406)


(39,011)


29,901


INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax

15


11


36


(71)


CONSOLIDATED NET (LOSS) INCOME

(10,255)


(7,395)


(38,975)


29,830


NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

2,809


2,483


10,663


5,403


CONSOLIDATED NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$    (13,064)


$      (9,878)


$    (49,638)


$      24,427











AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS









NET (LOSS) INCOME  FROM CONTINUING OPERATIONS

$    (13,079)


$      (9,889)


$    (49,674)


$      24,498


INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax

15


11


36


(71)


CONSOLIDATED NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$    (13,064)


$      (9,878)


$    (49,638)


$      24,427











Weighted average shares outstanding - basic2

50,019,048


50,270,550


50,010,406


51,072,480


Weighted average shares outstanding - diluted3

50,019,048


50,270,550


50,010,406


52,943,536










  


Three Months Ended September 30, 


Nine Months Ended
September 30, 


2012


2011


2012


2011


(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)

$    (0.26)


$   (0.20)


$     (0.99)


$      0.48

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

0.00


0.00


0.00


(0.00)

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

$    (0.26)


$   (0.20)


$     (0.99)


$      0.48









    Net (loss) income from continuing operations (diluted)

$    (0.26)


$   (0.20)


$     (0.99)


$      0.46

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

0.00


0.00


0.00


(0.00)

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

$    (0.26)


$   (0.20)


$     (0.99)


$      0.46









SELECTED OTHER DATA








Station operating income 1

$  40,868


$35,825


$115,341


$  88,422

Station operating income margin (% of net revenue)

37.2%


34.3%


36.2%


33.2%









Station operating income reconciliation:
















    Consolidated net (loss) income attributable to common stockholders

$(13,064)


$ (9,878)


$ (49,638)


$  24,427

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








Interest income

(108)


(103)


(155)


(120)

Interest expense

22,179


22,973


68,854


65,222

Provision for (benefit from) income taxes

9,051


(2,325)


25,814


81,905

Corporate selling, general and administrative expenses

9,613


10,442


29,003


25,214

Stock-based compensation

37


759


127


2,895

Gain on investment in affiliated company

-


-


-


(146,879)

Loss on retirement of debt

-


-


-


7,743

Equity in income of affiliated company

-


-


-


(3,287)

Other expense (income), net

681


(19)


1,284


3

Depreciation and amortization

9,685


11,504


29,112


25,825

Noncontrolling interest in income of subsidiaries

2,809


2,483


10,663


5,403

Impairment of long-lived assets

-


-


313


-

(Income) loss from discontinued operations, net of tax

(15)


(11)


(36)


71

Station operating income

$  40,868


$35,825


$115,341


$  88,422









Adjusted EBITDA4

$  31,255


$25,383


$  86,338


$  63,208









Adjusted EBITDA reconciliation:
















    Consolidated net (loss) income attributable to common stockholders

$(13,064)


$ (9,878)


$ (49,638)


$  24,427

Interest income

(108)


(103)


(155)


(120)

Interest expense

22,179


22,973


68,854


65,222

Provision for (benefit from) income taxes

9,051


(2,325)


25,814


81,905

Depreciation and amortization

9,685


11,504


29,112


25,825

EBITDA

$  27,743


$22,171


$  73,987


$197,259

Stock-based compensation

37


759


127


2,895

Gain on investment in affiliated company

-


-


-


(146,879)

Loss on retirement of debt

-


-


-


7,743

Equity in income of affiliated company

-


-


-


(3,287)

Other expense (income), net

681


(19)


1,284


3

Noncontrolling interest in income of subsidiaries

2,809


2,483


10,663


5,403

Impairment of long-lived assets

-


-


313


-

(Income) loss from discontinued operations, net of tax

(15)


(11)


(36)


71

Adjusted EBITDA

$  31,255


$25,383


$  86,338


$  63,208









  







September 30, 2012


December 31, 2011

(unaudited) 





(in thousands)

SELECTED BALANCE SHEET DATA:



Cash and cash equivalents

$                 48,660


$                35,939


Intangible assets, net

1,213,464


1,244,861


Total assets

1,478,923


1,486,482


Total debt (including current portion)

819,320


808,904


Total liabilities

1,094,422


1,055,541


Total equity

362,921


410,598


Redeemable noncontrolling interest

21,580


20,343


Noncontrolling interest

208,349


205,063








Current Amount Outstanding


Applicable Interest Rate


(in thousands)



SELECTED LEVERAGE DATA:



Senior bank term debt, net of original issue discount of approximately $5.7 million (subject to variable rates) (a)

$               372,539


7.50%


12 1/2%/15%  senior subordinated notes (fixed rate)

327,034


12.50%


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%






 

(a)      Subject to variable Libor plus a spread currently at 7.50% 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 Forms 10-K/A, 10-K, 10-Q/A, 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 increased to approximately $110.0 million for the quarter ended September 30, 2012, from approximately $104.4 million for the same period in 2011, an increase of 5.4%. We recognized approximately $33.2 million of revenue from our new cable television segment during the three months ended September 30, 2012 compared to approximately $29.5 million for the same period in 2011.  Net revenues from our radio segment, including syndicated programming, increased 5.3% for the quarter ended September 30, 2012 compared to the same period in 2011. Our Baltimore, Cleveland, Columbus, Detroit, Indianapolis, Raleigh and Washington D.C. clusters posted the most significant quarterly growth, while our Houston, Philadelphia and St. Louis markets posted the most significant declines. Reach Media's net revenues decreased 11.3% in the third quarter 2012 compared to the same period in 2011 primarily due to fewer sponsors of certain events.  Net revenues for our internet business decreased 8.9% for the three months ended September 30, 2012 compared to the same period in 2011.

Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of long-lived assets, decreased to approximately $78.7 million for the quarter ended September 30, 2012, down 0.5% from the approximately $79.1 million incurred for the comparable quarter in 2011.

Stock-based compensation decreased to $37,000 for the quarter ended September 30, 2012, compared to $759,000 for the same period in 2011. Vesting associated with the Company's 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 was fully completed as of December 31, 2011. 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 $9.7 million compared to approximately $11.5 million for the quarters ended September 30, 2012 and 2011, respectively, a decrease of 15.7%. The decrease was due to the completion of amortization for certain intangible assets and the completion of useful lives for certain assets. 

Interest expense decreased to approximately $22.2 million for the quarter ended September 30, 2012 compared to approximately $23.0 million for the same period in 2011. The Company made cash interest payments of approximately $21.0 million for the quarter ended September 30, 2012. Through May 15, 2012, interest on the Company's 12½%/15% Senior Subordinated Notes ("Senior Subordinated Notes") was payable at our election partially in cash and partially through the issuance of additional Senior Subordinated Notes (a "PIK Election") on a quarterly basis.  The PIK Election expired on May 15, 2012 and interest accruing on the Senior Subordinated Notes from and after May 15, 2012 accrues at a rate of 12½% and is payable in cash.

The provision for income taxes for the quarter ended September 30, 2012 was approximately $9.1 million compared to a benefit from income taxes of approximately $2.3 million for the comparable period in 2011. The increase is primarily attributable to the increase in the deferred tax liability related to the indefinite-lived intangible assets as of September 30, 2012.  The benefit for income taxes of approximately $2.3 million for the same period in 2011 was attributable to changes in the estimated annual effective rate based on the increase in the deferred tax liability for indefinite-lived intangibles and expected pre-tax income of the Company due to the impact of the consolidation of TV One. The Company paid $271,000 in taxes for the quarter ended September 30, 2012.

Income from discontinued operations, net of tax, for the quarter ended September 30, 2012 includes the results of operations for our sold radio stations (or stations made the subject of a local marketing agreement). Income from discontinued operations, net of tax, was $15,000 for the quarter ended September 30, 2012, compared to income from discontinued operations, net of tax, of $11,000 for the same period in 2011. The activity for the three months ended September 30, 2012 and 2011 resulted primarily from our remaining station in our Boston market entering into an LMA. The income (loss) from discontinued operations, net of tax, includes no tax provision for either of the three month periods ended September 30, 2012 or 2011.

The increase in noncontrolling interests in income of subsidiaries was due primarily to greater net income generated by TV One during the three months ended September 30, 2012 compared to the same period in 2011. 

Other pertinent financial information includes capital expenditures of approximately $2.8 million and $1.8 million for the quarters ended September 30, 2012 and 2011, respectively.  $677,000 of capital expenditures for the quarter ended September 30, 2012 relates to the Company's corporate office move to Silver Spring, Maryland and $305,000 relates to the Company's Philadelphia market office move. The Company received dividends from TV One in the amount of approximately $2.0 million for the quarter ended September 30, 2012. As of September 30, 2012, the Company had total debt (net of cash balances) of approximately $770.7 million. The Company's cash and cash equivalents by segment are as follows:  Radio and Internet approximately $24.6 million, Reach Media approximately $1.9 million and Cable Television approximately $22.2 million. In addition to cash and cash equivalents, the cable television segment also has short-term investments of $165,000 and long-term investments of approximately $2.4 million.

Supplemental Financial Information:

For comparative purposes, the following more detailed, unaudited statements of operations for the three and nine months ended September 30, 2012 and 2011 are included.

 

  





Three Months Ended September 30, 2012






(in thousands, unaudited)
































Corporate/










Reach




Cable


Eliminations/






Consolidated

Radio One

Media


Internet

Television

Other







STATEMENT OF OPERATIONS:





























NET REVENUE

$

109,952

$

61,823

$

11,909

$

4,452

$

33,232

$

(1,464)


OPERATING EXPENSES:














Programming and technical 


32,454


12,232


5,961


2,104


13,168


(1,011)


Selling, general and administrative


36,630


21,411


3,898


2,784


9,263


(726)


Corporate selling, general and administrative


9,613


-


1,465


-


2,552


5,596


Stock-based compensation


37


20


-


-


-


17


Depreciation and amortization


9,685


1,589


293


795


6,708


300


Impairment of long-lived assets


-


-


-


-


-


-


Total operating expenses


88,419


35,252


11,617


5,683


31,691


4,176


           Operating income (loss)


21,533


26,571


292


(1,231)


1,541


(5,640)


INTEREST INCOME


108


-


1


-


34


73


INTEREST EXPENSE


22,179


308


-


-


3,039


18,832


OTHER EXPENSE (INCOME), net


681


5


-


-


604


72


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


(1,219)


26,258


293


(1,231)


(2,068)


(24,471)


PROVISION FOR INCOME TAXES


9,051


8,808


243


-


-


-


Net (loss) income from continuing operations


(10,270)


17,450


50


(1,231)


(2,068)


(24,471)


INCOME FROM DISCONTINUED OPERATIONS, net of tax


15


15


-


-


-


-


CONSOLIDATED NET (LOSS) INCOME 


(10,255)


17,465


50


(1,231)


(2,068)


(24,471)


NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS


2,809


-


-


-


-


2,809


NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(13,064)

$

17,465

$

50

$

(1,231)

$

(2,068)

$

(27,280)


















Adjusted EBITDA4

$

31,255

$

28,180

$

585

$

(436)

$

8,249

$

(5,323)

















  






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 EXPENSE (INCOME), 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)


















Adjusted EBITDA4

$

25,383

$

23,749

$

2,937

$

(178)

$

6,242

$

(7,367)

















  






Nine Months Ended September 30, 2012






(in thousands, unaudited)
































Corporate/










Reach




Cable


Eliminations/






Consolidated

Radio One

Media


Internet

Television

Other







STATEMENT OF OPERATIONS:






























NET REVENUE

$

318,910

$

176,316

$

34,008

$

14,659

$

97,722

$

(3,795)


OPERATING EXPENSES:














Programming and technical 


96,577


38,321


17,941


6,183


37,269


(3,137)


Selling, general and administrative


106,992


65,695


11,615


9,067


21,954


(1,339)


Corporate selling, general and administrative


29,003


-


5,075


-


6,670


17,258


Stock-based compensation


127


52


-


-


-


75


Depreciation and amortization


29,112


4,817


887


2,432


20,219


757


Impairment of long-lived assets


313


313


-


-


-


-


Total operating expenses


262,124


109,198


35,518


17,682


86,112


13,614


           Operating income (loss) 


56,786


67,118


(1,510)


(3,023)


11,610


(17,409)


INTEREST INCOME


155


-


5


-


48


102


INTEREST EXPENSE


68,854


807


-


-


9,117


58,930


OTHER EXPENSE (INCOME), net


1,284


(10)


-


-


605


689


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


(13,197)


66,321


(1,505)


(3,023)


1,936


(76,926)


PROVISION FOR (BENEFIT FROM) INCOME TAXES


25,814


26,196


(382)


-


-


-


Net (loss) income from continuing operations


(39,011)


40,125


(1,123)


(3,023)


1,936


(76,926)


INCOME FROM DISCONTINUED OPERATIONS, net of tax


36


36


-


-


-


-


CONSOLIDATED NET (LOSS) INCOME


(38,975)


40,161


(1,123)


(3,023)


1,936


(76,926)


NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS


10,663


-


-


-


-


10,663


NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(49,638)

$

40,161

$

(1,123)

$

(3,023)

$

1,936

$

(87,589)


















Adjusted EBITDA4

$

86,338

$

72,300

$

(623)

$

(591)

$

31,829

$

(16,577)

















  






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


NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS


5,403


-


-


-


-


5,403


NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

24,427

$

(22,641)

$

1,602

$

(5,152)

$

(6,384)

$

57,002


















Adjusted EBITDA4

$

63,208

$

64,287

$

5,183

$

(2,196)

$

13,906

$

(17,972)

















 

Radio One, Inc. will hold a conference call to discuss its results for third fiscal quarter of 2012. This conference call is scheduled for Thursday, November 1, 2012 at 10:00 a.m. EDT. To participate on this call, U.S. callers may dial toll-free 1-800-230-1096; international callers may dial direct (+1) 612-332-0342.

A replay of the conference call will be available from 12:00 p.m. EDT November 1, 2012 until 11:59 p.m. EST November 4, 2012. 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 268635. 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. (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 and/or operating 55 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. In addition, the Company owns a controlling 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, 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 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              For the three months ended September 30, 2012 and 2011, Radio One had 50,019,048 and 50,270,550 shares of common stock outstanding on a weighted average basis (basic), respectively.  For the nine months ended September 30, 2012 and 2011, Radio One had 50,010,406 and 51,072,480 shares of common stock outstanding on a weighted average basis (basic), respectively. 

3              For the three months ended September 30, 2012 and 2011, Radio One had 50,019,048 and 50,270,550 shares of common stock outstanding on a weighted average basis (fully diluted), for outstanding stock options, respectively.  For the nine months ended September 30, 2012 and 2011, Radio One had 50,010,406 and 52,943,536 shares of common stock outstanding on a weighted average basis (fully diluted), for outstanding stock options, respectively. 

4              "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, gain on retirement of debt 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 income (loss) to EBITDA and Adjusted EBITDA has been provided in this release.

SOURCE Radio One, Inc.



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