Outdoor Channel Holdings Reports Fourth Quarter and Full Year 2009 Results
Company to Hold Quarterly Conference Call on March 17, 2010
TEMECULA, Calif., March 16 /PRNewswire-FirstCall/ -- Outdoor Channel Holdings, Inc. (Nasdaq: OUTD) today reported increases in total revenues of 88.1 percent and 60.7 percent, respectively, for the three-and twelve-month periods ended December 31, 2009 due largely to the acquisition of Winnercomm Inc.
Total revenues amounted to $27.0 million for the 2009 fourth quarter, compared with $14.4 million in the corresponding period a year ago. For full year 2009, total revenues were $86.9 million, compared with $54.1 million in the prior year.
Advertising revenue for the 2009 fourth quarter decreased 4.3 percent to $9.5 million from $10.0 million in the prior-year period. For full year 2009, advertising revenues decreased 6.1 percent to $34.3 million compared to $36.6 million in the prior year.
Subscriber fees totaled $4.4 million for the fourth quarter of 2009 compared to subscriber fees of $4.4 million in the prior-year period. For full year 2009, subscriber fees totaled $18.8 million compared to $17.5 million in the prior year, an increase of 7.7 percent. The full year increase in subscriber fees is due primarily to increases in rates and the number of subscribers at several service providers.
In January of 2009, Outdoor Channel Holdings acquired certain assets of Winnercomm Inc. and its related entities. The revenues generated by Winnercomm are reported as "Production services." Production services revenue totaled $13.1 million and $33.7 million during the 2009 fourth quarter and full year period, respectively. These revenues were comprised primarily of production services for customer-owned telecasts and marketing.
"During the fourth quarter, we continued to focus on executing our strategy to build our network, increase our viewing audience and expand our relationships with advertisers and distributors," said Roger L. Werner, President and Chief Executive Officer. "While our 2009 revenues at both Outdoor Channel and Winnercomm were impacted by the economic slowdown, we began to see an improvement in the advertising climate during the fourth quarter. Additionally, we have expanded our distribution footprint through a number of tier migrations and new system launches. We have also continued to strengthen our digital offerings, including our web-site, which has enabled us to begin pursuing additional revenue streams that leverage our category-leading content. In the year ahead, we remain focused on continuing to build on our leadership in outdoor content, converting our audience shares into revenues and further improving our cash generation through a disciplined approach to managing our costs. Given our strong balance sheet and profitable results, we also remain well-positioned to prudently pursue acquisitions that will enhance our growth profile to the benefit of our shareholders."
Outdoor Channel Holdings posted net income of $0.6 million, or $0.02 per diluted share, for the 2009 fourth quarter, compared with net income of $0.5 million, or $0.02 per diluted share, in the prior-year period. For full year 2009, the Company posted a net loss of $0.3 million, or $0.01 per diluted share compared to a net income of $2.4 million, or $0.09 for the prior-year period.
Earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, amounted to $5.4 million for the 2009 fourth quarter, compared with $3.9 million in the prior-year period. For the legacy Outdoor Channel business, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, totaled $4.1 million for the 2009 fourth quarter compared to $3.9 million in the prior-year period.
For the full year 2009, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, totaled $10.7 million compared to $10.9 million in the prior-year period. For the legacy Outdoor Channel business, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, totaled $12.1 million for the full year 2009 compared to $10.9 million in the prior year.
Investor Conference Call
Outdoor Channel Holdings' management will host an investor conference call on March 17, 2010, at 7 a.m. PDT (10 a.m. EDT) to review the company's financials and operations for its fourth quarter and full year ended December 31, 2009. Investment professionals are invited to participate in the live call by dialing 800-901-5218 (domestic) or 617-786-4511 (international) and using participant passcode 39372871. The call will be open to all other interested parties through a live, listen-only audio Internet broadcast in the Investor Relations section of the company's Web site, www.outdoorchannel.com. For those who are not able to listen to the live broadcast, the call will be archived on the web site for one year. A telephonic playback of the conference call also will be available through 5 p.m. PDT (8 p.m. EDT), March 24, 2010 by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using participant passcode 50808340.
About Outdoor Channel Holdings, Inc.
Outdoor Channel Holdings, Inc. owns and operates Outdoor Channel, America's leader in outdoor TV, and Winnercomm Inc., an Emmy Award winning production and interactive company. Outdoor Channel offers programming that captures the excitement of hunting, fishing, shooting, off-road motorsports, adventure and the Western lifestyle and can be viewed on multiple platforms including high definition, video-on-demand, as well as on a dynamic broadband website. Winnercomm Inc. is one of America's largest and highest quality producers of live sporting events and sports series for cable and broadcast television. Winnercomm also owns and operates the patented Skycam and CableCam aerial camera systems which provide dramatic overhead camera angles for major sports events, including college and NFL football. For more information please visit http://www.outdoorchannel.com/.
Nielsen Media Research Universe Estimates for Outdoor Channel
Nielsen Media Research is the leading provider of television audience measurement and advertising information services worldwide. Nielsen estimated that Outdoor Channel had approximately 35.9 million cable and satellite subscribers for March 2010. Please note that this estimate regarding Outdoor Channel's subscriber base is made by Nielsen Media Research and is theirs alone and does not represent opinions, forecasts or predictions of Outdoor Channel Holdings, Inc. or its management. Outdoor Channel Holdings, Inc. does not by its reference above or distribution imply its endorsement of or concurrence with such information.
Use of Non-GAAP Financial Information
This press release includes "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission rules. The company believes that earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, provides greater comparability regarding its ongoing operating performance. This information is not intended to be considered in isolation or as a substitute for net income (loss) calculated in accordance with U.S. GAAP. A reconciliation of the company's U.S. GAAP information to EBITDA, adjusted for the effects of share-based compensation expense and acquisition and integration costs is provided in the attached table.
Safe Harbor Statement
Statements in this news release that are not historical are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, including statements, without limitation, about our expectations, beliefs, intentions, strategies regarding the future long-term value of the company resulting from the company's current actions or strategic initiatives and the future anticipated value of Outdoor Channel to our audience, distributors and advertisers. The company's actual results could differ materially from those discussed in any forward-looking statements. The company intends that such forward-looking statements be subject to the safe-harbor provisions contained in those sections. Such statements involve significant risks and uncertainties and are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements. Such factors include but are not limited to: (1) service providers discontinuing or refraining from carrying Outdoor Channel; (2) a decline in the number of viewers from having Outdoor Channel placed in unpopular cable or satellite packages, or increases in subscription fees, established by the service providers; (3) a decrease in advertising revenue as a result of a deterioration in general economic conditions; (4) managing the company's growth and the integration of acquisitions; (5) decreased profitability if we are unable to generate sufficient revenues from our Production Services operations to offset its fixed costs; and other factors which are discussed in the company's filings with the Securities and Exchange Commission. For these forward-looking statements, the company claims the protection of the safe harbor for forward-looking statements in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Advertising $9,545 $9,968 $34,325 $36,562
Subscriber fees 4,420 4,406 18,848 17,495
Production services 13,068 - 33,679 -
Total revenues 27,033 14,374 86,852 54,057
------ ------ ------ ------
Cost of services:
Programming 1,182 1,770 5,165 6,903
Satellite
transmission fees 402 398 1,597 1,971
Production and
operations 11,750 1,415 35,710 5,892
Other direct costs 181 93 563 383
--- --- --- ---
Total cost of
services 13,515 3,676 43,035 15,149
------ ----- ------ ------
Other expenses:
Advertising 747 724 2,779 3,317
Selling, general
and administrative 8,133 6,963 35,131 28,305
Depreciation and
amortization 1,149 543 3,997 2,447
----- --- ----- -----
Total other
expenses 10,029 8,230 41,907 34,069
------ ----- ------ ------
Income from operations 3,489 2,468 1,910 4,839
Interest and other
income, net 7 121 73 1,521
--- --- --- -----
Income from operations
before income taxes 3,496 2,589 1,983 6,360
Income tax provision 2,931 2,101 2,268 3,988
----- ----- ----- -----
Net income (loss) $565 $488 $(285) $2,372
==== ==== ===== ======
Earnings (loss) per
common share data:
Basic $0.02 $0.02 $(0.01) $0.09
===== ===== ====== =====
Diluted $0.02 $0.02 $(0.01) $0.09
===== ===== ====== =====
Weighted average
number of common
shares outstanding:
Basic 24,463 24,378 24,452 25,369
====== ====== ====== ======
Diluted 25,822 25,336 24,452 26,086
====== ====== ====== ======
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
December 31, December 31,
2009 2008
---- ----
Assets
Current assets:
Cash and cash equivalents $20,848 $60,257
Investment in available-for-sale
securities 38,090 —
Accounts receivable, net of
allowance for doubtful accounts 15,827 9,448
Other current assets 10,416 6,854
------ -----
Total current assets 85,181 76,559
------ ------
Property, plant and equipment, net 14,286 10,042
Goodwill and amortizable intangible
assets, net 43,988 43,302
Investments in auction-rate securities 5,775 6,456
Deferred tax assets, net 2,489 4,949
Deposits and other assets 5,059 1,646
----- -----
Totals $156,778 $142,954
======== ========
Liabilities and Stockholders' Equity
Current liabilities $17,308 $6,309
Long-term liabilities 1,172 236
----- ---
Total liabilities 18,480 6,545
------ -----
Total stockholders' equity 138,298 136,409
------- -------
Totals $156,778 $142,954
======== ========
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Operating activities:
Net income (loss) $565 $488 $(285) $2,372
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Depreciation and
amortization 1,149 543 3,997 2,447
Amortization of
subscriber
acquisition fees 421 122 974 489
Loss (gain) on sale
of equipment 53 (5) 74 36
Gain on sale of
available-for-
sale and auction-
rate securities (5) - (12) (75)
Other-than-temporary
impairment on
auction-rate
securities - - - 336
Provision for
doubtful accounts 189 120 524 709
Share-based
employee and
service provider
compensation 777 901 4,100 3,605
Deferred tax
provision, net 2,192 1,364 1,527 3,249
Changes in operating
assets and liabilities:
Accounts receivable (2,335) (394) (1,213) (1,853)
Income tax refund
receivable and
payable, net 710 236 429 224
Prepaid programming
costs 1,128 76 (555) (475)
Other current assets (171) 60 229 (158)
Deposits and other
assets 3,075 4 (93) (205)
Subscriber
acquisition costs (43) - (1,078) -
Accounts payable
and accrued
expenses (1,621) 448 (1,535) 1,917
Accrued severance
payments 212 (15) 230 (254)
Customer deposits - - - (14)
Deferred revenue (1,151) (195) 849 (56)
Deferred obligations 14 24 (19) (50)
Unfavorable lease
obligations (32) - (121) -
--- --- ---- ---
Net cash provided
by operating
activities 5,127 3,777 8,022 12,244
----- ----- ----- ------
Investing activities:
Purchases of
property, plant
and equipment (451) (213) (2,526) (857)
Purchase of
intangibles - (97) - (97)
Proceeds from sale
of equipment 31 59 142 74
Cash paid to
purchase assets of
Winnercomm, net
of cash acquired - - (5,746) -
Purchases of
available-for-
sale and auction-
rate securities (6,007) - (37,997) (27,181)
Proceeds from sale
of available-for-
sale and auction-
rate securities 100 400 700 66,352
--- --- --- ------
Net cash provided
by (used in)
investing
activities (6,327) 149 (45,427) 38,291
------ --- ------- ------
Financing activities:
Proceeds from
exercise of stock
options - - - 11
Purchase of
treasury stock (177) (160) (659) (549)
Purchase and
retirement of
stock related to
stock repurchase
program (998) (826) (1,345) (15,000)
Net cash used in
financing
activities (1,175) (986) (2,004) (15,538)
------ ---- ------ -------
Net increase decrease)
in cash and cash
equivalents (2,375) 2,940 (39,409) 34,997
Cash and cash
equivalents,
beginning of period 23,223 57,317 60,257 25,260
------ ------ ------ ------
Cash and cash
equivalents, end
of period $20,848 $60,257 $20,848 $60,257
======= ======= ======= =======
Supplemental disclosure
of cash flow information:
Income taxes paid $(99) $501 $282 $514
==== ==== ==== ====
Three Months Ended Year Ended
December 31, December 31,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Supplemental disclosures
of non-cash investing
and financing activities:
Effect of net
increase decrease)
in fair value of
available-for-
sale securities $18 $21 $100 $(268)
=== === ==== =====
Property, plant and
equipment costs
incurred but not
paid $50 $17 $50 $17
=== ===
Retirement of
treasury stock $177 $160 $659 $549
==== ==== ==== ====
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-U.S. GAAP MEASURES TO U.S. GAAP
(unaudited, in thousands)
The following table sets forth the reconciliation of net income (loss) to
earnings before interest, taxes, depreciation and amortization (EBITDA),
adjusted for the effects share-based compensation expense and acquisition
and integration costs:
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Net income (loss) $565 $488 $(285) $2,372
Add/Subtract:
Interest and other
income, net 7 121 73 1,521
Income tax provision 2,931 2,101 2,268 3,988
Depreciation and
amortization 1,149 543 3,997 2,447
----- --- ----- -----
EBITDA 4,638 3,011 5,907 7,286
Adjusted for:
Share-based
compensation expense 777 901 4,100 3,605
Acquisition and
integration costs - - 680 -
--- --- --- ---
EBITDA as adjusted
for share-based
compensation
expense and
acquisition and
integration costs $5,415 $3,912 $10,687 $10,891
====== ====== ======= =======
Summary of cost of
services
Share-based
compensation expense $20 $110 $241 $440
Cost of services 13,495 3,566 42,794 14,709
------ ----- ------ ------
Total cost of
services $13,515 $3,676 $43,035 $15,149
======= ====== ======= =======
Summary of selling,
general and
administrative
Share-based
compensation expense $757 $791 $3,859 $3,165
Acquisition and
integration costs - - 680 -
Selling, general
and administrative 7,375 6,172 30,592 25,140
----- ----- ------ ------
Total selling,
general and
administrative $8,132 $6,963 $35,131 $28,305
====== ====== ======= =======
EBITDA as adjusted
by segment
Legacy Outdoor Channel $4,096 $3,912 $12,139 $10,891
Production Services 1,319 - (1,452) -
----- --- ------ ---
EBITDA as adjusted
for share-based
compensation
expense and
acquisition and
integration costs $5,415 $3,912 $10,687 $10,891
====== ====== ======= =======
SOURCE Outdoor Channel Holdings, Inc.
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