Exhibit 99.1
[REGENT COMMUNICATIONS, INC. LOGO]
REGENT REPORTS THIRD QUARTER 2003 RESULTS
- Operating Income Up 22% on Net Broadcast Revenue Increase of 14% -
Covington, KY, November 7, 2003– Regent Communications, Inc. (Nasdaq: RGCI) announced today financial results for the quarter ended September 30, 2003.
For the third quarter of 2003, net broadcast revenues increased 14.1% to $21.4 million from $18.7 million reported for the third quarter of 2002. For the same period, station operating expenses increased to $14.5 million from $12.7 million. The Company reported net income of $2.1 million for the quarter, or $0.05 per share, compared with reported net income of $1.8 million, or $0.04 per share, in the same period last year.
For the first nine months of 2003, net broadcast revenues increased 21.6% to $59.5 million from $49.0 million reported for the same period of 2002. For the same period, station operating expenses increased to $41.9 million from $34.2 million. Below is the Company’s statement of operations prepared in accordance with generally accepted accounting principles (“GAAP”) (in thousands, except per share amounts):
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||||||
Broadcast revenues, net of agency commissions | $ | 21,353 | $ | 18,710 | $ | 59,539 | $ | 48,958 | ||||||||||||
Station operating expenses | 14,497 | 12,744 | 41,939 | 34,160 | ||||||||||||||||
Corporate general and administrative expenses | 1,322 | 1,498 | 4,636 | 4,583 | ||||||||||||||||
Depreciation and amortization | 1,059 | 798 | 3,101 | 2,476 | ||||||||||||||||
Loss (gain) on sale of long-lived assets | 1 | — | 6 | (442 | ) | |||||||||||||||
Operating income | 4,474 | 3,670 | 9,857 | 8,181 | ||||||||||||||||
Interest expense | (811 | ) | (377 | ) | (2,795 | ) | (1,859 | ) | ||||||||||||
Other (expense) income, net | (57 | ) | (15 | ) | (175 | ) | (234 | ) | ||||||||||||
Income before income taxes and cumulative change in accounting principle | 3,606 | 3,278 | 6,887 | 6,088 | ||||||||||||||||
Income tax expense | (1,469 | ) | (1,461 | ) | (2,716 | ) | (2,529 | ) | ||||||||||||
Income before cumulative effect of accounting change | 2,137 | 1,817 | 4,171 | 3,559 | ||||||||||||||||
Cumulative effect of accounting change, net of applicable income taxes of $3,762 | — | — | — | (6,138 | ) | |||||||||||||||
Net income (loss) | $ | 2,137 | $ | 1,817 | $ | 4,171 | $ | (2,579 | ) | |||||||||||
BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE: | ||||||||||||||||||||
Before cumulative effect of accounting change | $ | 0.05 | $ | 0.04 | $ | 0.09 | $ | 0.08 | ||||||||||||
Net income (loss) | $ | 0.05 | $ | 0.04 | $ | 0.09 | $ | (0.06 | ) | |||||||||||
Weighted average number of common shares: | ||||||||||||||||||||
Basic | 46,507 | 46,759 | 46,511 | 42,039 | ||||||||||||||||
Diluted | 46,895 | 47,075 | 46,789 | 42,584 |
Regent Communications — Page 2
We are pleased to report better than expected station operating income and earnings per share for the third quarter of 2003,” commented Terry Jacobs, Chairman and CEO of Regent Communications. “Our financial results this quarter reflect our ability to improve free cash flow and earnings in a challenging local advertising environment, highlighting our long-term focus and disciplined approach to managing our business.” | |
Mr. Jacobs continued, “Looking ahead, Regent is very well positioned to capitalize on an improving advertising climate. We operate market leading stations in attractive middle and small-sized markets, have a healthy mix of start-up, developing and mature radio properties and have maintained one of the strongest balance sheets in the industry. We believe 2004 will be an excellent year for Regent as we take advantage of the operating improvements we have made over the last year in an improving advertising environment.” |
Non-GAAP Financial Measures
Station operating income
The Company believes that station operating income is a performance measure that helps investors better understand radio station operations. Additionally, the Company and other media companies have customarily been measured by analysts and other investors on their ability to generate station operating income. The following table reconciles operating income, which the Company believes is the most directly comparable GAAP financial measure, to station operating income (in thousands):
Regent Communications — Page 3
Three Months Ended | Nine Months Ended | |||||||||||||||
Station operating income | September 30, | September 30, | ||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
Operating income | $ | 4,474 | $ | 3,670 | $ | 9,857 | $ | 8,181 | ||||||||
Plus: | ||||||||||||||||
Depreciation and amortization | 1,059 | 798 | 3,101 | 2,476 | ||||||||||||
Corporate general and administrative expenses | 1,322 | 1,498 | 4,636 | 4,583 | ||||||||||||
Loss on sale of long-lived assets | 1 | — | 6 | — | ||||||||||||
Less: | ||||||||||||||||
Gain on sale of long-lived assets | — | — | — | 442 | ||||||||||||
Station operating income | $ | 6,856 | $ | 5,966 | $ | 17,600 | $ | 14,798 | ||||||||
Same station results
On a same station basis, which includes results from stations owned and operated during the entire third quarter for both the 2003 and 2002 periods and excludes barter, net broadcast revenue for the third quarter of 2003 decreased 3.0% to $16.2 million compared to the third quarter of 2002. Station operating income of $5.5 million decreased by 2.3% in the third quarter of 2003 compared to the third quarter of 2002. The Company believes that a same station presentation is important to investors as it provides a measure of performance of radio stations that were owned and operated by Regent in the third quarter of 2002 as well as the current quarter and eliminates the effect of acquisitions and dispositions on comparability. Additionally, the Company has excluded barter in this comparison as barter customarily results in volatility between quarters, although differences over the full year are not material. The following tables reconcile net broadcast revenue and operating income to same station net broadcast revenue and same station operating income (in thousands):
Three Months Ended | ||||||||
Same station net broadcast revenue | September 30, | |||||||
2003 | 2002 | |||||||
Net broadcast revenue | $ | 21,353 | $ | 18,710 | ||||
Less: | ||||||||
Net results of stations not included in same station category and barter transactions | 5,203 | 2,066 | ||||||
Same station net broadcast revenue | $ | 16,150 | $ | 16,644 | ||||
Regent Communications — Page 4
Three Months Ended | ||||||||
Same station operating income | September 30, | |||||||
2003 | 2002 | |||||||
Operating income | $ | 4,474 | $ | 3,670 | ||||
Plus: | ||||||||
Depreciation and amortization | 1,059 | 798 | ||||||
Corporate general and administrative expenses | 1,322 | 1,498 | ||||||
Loss on sale of assets | 1 | — | ||||||
Station operating income | 6,856 | 5,966 | ||||||
Less: | ||||||||
Net results of stations not included in same station category and barter transactions | 1,382 | 363 | ||||||
Same station operating income | $ | 5,474 | $ | 5,603 | ||||
Proforma results
On a proforma basis, which includes results of stations acquired by Regent subsequent to January 1, 2002 as well as stations operating under a local marketing agreement (“LMA”), net broadcast revenue of $21.4 million for the third quarter of 2003 was down 4.4% compared to the third quarter of 2002 and station operating income of $6.8 million decreased 4.2% compared to the third quarter of 2002. The Company believes that proforma presentation is useful to investors as it provides for a comparison of results as if the Company had made acquisitions at the beginning of 2002. The following tables reconcile net broadcast revenue and operating income to proforma net broadcast revenue and proforma station operating income (in thousands):
Three Months Ended | ||||||||
Proforma net broadcast revenue | September 30, | |||||||
2003 | 2002 | |||||||
Net broadcast revenue | $ | 21,353 | $ | 18,710 | ||||
Plus: | ||||||||
Results of stations acquired or operated under an LMA | — | 3,784 | ||||||
Less: | ||||||||
Results of stations disposed of or pending disposition | — | 161 | ||||||
Proforma net broadcast revenue | $ | 21,353 | $ | 22,333 | ||||
Regent Communications — Page 5
Three Months Ended | ||||||||
Proforma station operating income | September 30, | |||||||
2003 | 2002 | |||||||
Operating income | $ | 4,474 | $ | 3,670 | ||||
Plus: | ||||||||
Depreciation and amortization | 1,059 | 798 | ||||||
Corporate general and administrative expenses | 1,322 | 1,498 | ||||||
Loss on sale of assets | 1 | — | ||||||
Station operating income | 6,856 | 5,966 | ||||||
Plus: | ||||||||
Results of stations acquired or operated under an LMA | — | 1,158 | ||||||
Less: | ||||||||
Results of stations disposed of or pending disposition | 44 | 14 | ||||||
Proforma station operating income | $ | 6,812 | $ | 7,110 | ||||
Free cash flow
Regent also reported free cash flow (defined as net income plus depreciation, amortization and other non-cash expenses, less maintenance capital expenditures and other non-cash income) for the third quarter of 2003 of $4.1 million compared to free cash flow of $3.6 million for the third quarter of 2002 representing an increase of 15%. The Company believes that free cash flow is a liquidity measure that helps investors evaluate the ability of the Company to generate excess cash flow for investing and financing uses. The following table displays how the Company calculates free cash flow (in thousands):
Three Months Ended | ||||||||
September 30, | ||||||||
2003 | 2002 | |||||||
Net Income | $ | 2,137 | $ | 1,817 | ||||
Add (deduct): | ||||||||
Depreciation and amortization | 1,059 | 798 | ||||||
Non-cash interest expense | 102 | 70 | ||||||
Non-cash taxes | 1,396 | 1,451 | ||||||
Other non-cash items (compensation, barter) | 61 | (130 | ) | |||||
Less: Maintenance capital expenditures | 620 | 409 | ||||||
Free cash flow | $ | 4,135 | $ | 3,597 | ||||
Regent Communications — Page 6
The most directly comparable GAAP measure to free cash flow is net cash provided by operating activities. The following table reconciles net cash provided by operating activities to free cash flow (in thousands):
Three Months Ended | ||||||||
September 30, | ||||||||
2003 | 2002 | |||||||
Net cash provided by operating activities | $ | 5,535 | $ | 6,185 | ||||
Less: | ||||||||
Changes in operating assets and liabilities | (474 | ) | (1,824 | ) | ||||
Other non-cash expense, net | (306 | ) | (355 | ) | ||||
Less: Maintenance capital expenditures | 620 | 409 | ||||||
Free cash flow | $ | 4,135 | $ | 3,597 | ||||
Outlook
Regent expects fourth quarter 2003 reported consolidated net broadcast revenues and station operating income of approximately $21.2 to $21.6 million and $6.5 to $6.8 million, respectively. Regent expects earnings per share to be $0.04 for the fourth quarter of 2003. The following table reconciles projected operating income, which the Company believes is the most directly comparable GAAP measure to station operating income (in millions):
Three Months Ending | ||||||||
Station operating income | December 31, | |||||||
Guidance Range | ||||||||
Lower | Upper | |||||||
Operating income | $ | 3.5 | $ | 3.8 | ||||
Plus: | ||||||||
Depreciation and amortization | 1.3 | 1.3 | ||||||
Corporate general and administrative expenses | 1.6 | 1.6 | ||||||
Station operating income | $ | 6.4 | $ | 6.7 | ||||
The Company expects same station net broadcast revenues to be flat in the fourth quarter of 2003 compared to the fourth quarter of 2002. The Company believes that same station percent disclosures are important to investors, analysts and other users of media financial information because it enables the users of such information to compare the performance of various size companies against industry standards.
Regent Communications — Page 7
Commenting on the Company’s outlook, Terry Jacobs said, “As we have demonstrated over the course of the year, we will continue to strike a balance between investment spending that ensures the long-term growth potential of our group against prudent cost control measures in the near-term. In addition, we have the financial flexibility to pursue prudent acquisitions which enhance our growth and take advantage of our operational experience. In total, we are very well positioned to grow through both operational improvements and acquisition and we remain focused on creating shareholder value over the long-term.
Regent Communications is a radio broadcasting company focused on acquiring, developing and operating radio stations in middle and small-sized markets. Upon the close of all announced transactions, Regent will own and operate 76 stations located in 16 markets. Regent Communications, Inc. shares are traded on the Nasdaq under the symbol “RGCI.”
Regent Communications will host a teleconference to discuss its results at 9:30 a.m. Eastern Time today. To access the teleconference, please dial 973-582-2710 ten minutes prior to the start time. The teleconference will also be available via live webcast on the investor relations portion of the Company’s website, located at www.regentcomm.com. If you cannot listen to the teleconference at its normal time, there will be a replay available through November 14, 2003, which can be accessed by dialing 877-519-4471 (U.S) or 973-341-3080 (Int’l), passcode 4248595. The webcast will also be archived on the Company’s website for one month. In addition, this press release and other material financial information, if any, discussed during the teleconference will be posted on our website at www.regentcomm.com.
This press release includes certain forward-looking statements with respect to Regent Communications, Inc. for which we claim the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain risks and uncertainties and include statements preceded by, followed by or that include words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “project” and other similar expressions. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, such statements are influenced by our financial position, business strategy, budgets, projected costs, and plans and objectives of management for future operations. Actual results and developments may differ materially from those conveyed in the forward-looking statements based on various factors including, but not limited to: changes in economic, business and market conditions affecting the radio broadcast industry, the markets in which we operate, and nationally; increased competition for attractive radio properties and advertising dollars; fluctuations in the cost of operating radio properties; our ability to manage our growth; our ability to integrate these and other acquisitions; and changes in the regulatory climate affecting radio broadcast companies, including uncertainties surrounding recent Federal Communication Commission rules regarding broadcast ownership limits. Further information on other factors that could affect the financial results of Regent Communications, Inc. is included in Regent’s filings with the Securities and Exchange Commission. These documents are available free of charge at the Commission’s website at http://www.sec.gov and/or from Regent Communications, Inc.
Contact: | ||||||
Terry Jacobs Chairman and CEO Regent Communications, Inc. 859-292-0030 | John Buckley Brainerd Communicators, Inc. 212-986-6667 buckley@braincomm.com | |||||
Tony Vasconcellos Senior Vice President and Chief Financial Officer Regent Communications, Inc. 859-292-0030 |