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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
Commission File No. 333-30795
RADIO ONE, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1166660
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5900 Princess Garden Parkway,
8th Floor
Lanham, Maryland 20706
(Address of principal executive offices)
(301) 306-1111
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ____
----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 10, 2000
----- -----------------------------
Class A Common Stock, $.01 Par Value 22,272,622
Class B Common Stock, $.01 Par Value 2,867,463
Class C Common Stock, $.01 Par Value 3,132,458
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RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
Form 10-Q
For the Quarter Ended March 31, 2000
TABLE OF CONTENTS
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Page
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PART I FINANCIAL INFORMATION
Item 1 Consolidated Financial Statements 3
Consolidated Condensed Balance Sheets as of 4
December 31, 1999 and March 31, 2000 (Unaudited)
Consolidated Statements of Operations for the 5
Three months ended March 31, 1999 and 2000 (Unaudited)
Consolidated Statements of Changes in Stockholders' Equity for the 6
three months ended March 31, 2000 (Unaudited)
Consolidated Statements of Cash Flows for the 7
Three months ended March 31, 1999 and 2000 (Unaudited)
Notes to Consolidated Financial Statements 8
Item 2 Management's Discussion and Analysis of Financial 10
Condition and Results of Operations
PART II OTHER INFORMATION
Item 1 Legal Proceedings 13
Item 2 Changes in Securities 14
Item 3 Defaults upon Senior Securities 14
Item 4 Submission of Matters to a Vote of Security Holders 14
Item 5 Other Information 14
Item 6 Exhibits and Reports on Form 8-K 14
Signature 16
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(See pages 4-9 -- This page intentionally left blank.)
3
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
Consolidated Balance Sheets
---------------------------
As of December 31, 1999, and March 31, 2000
-------------------------------------------
December 31, March 31,
1999 2000
-------------- -------------
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 6,221,000 $125,588,000
Investments, available for sale 256,390,000 274,154,000
Trade accounts receivable, net of allowance for doubtful accounts of $2,429,000 and
$2,877,000, respectively 19,833,000 15,635,000
Prepaid expenses and other 1,035,000 1,061,000
Deferred income taxes 984,000 987,000
-------------- -------------
Total current assets 284,463,000 417,425,000
PROPERTY AND EQUIPMENT, NET 15,512,000 16,797,000
INTANGIBLE ASSETS, NET 218,460,000 292,883,000
OTHER ASSETS 9,101,000 141,199,000
-------------- -------------
Total assets $527,536,000 $868,304,000
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,663,000 $ 1,498,000
Accrued expenses 6,941,000 7,324,000
Income taxes payable 1,532,000 1,369,000
Other current liabilities -- 2,182,000
-------------- -------------
Total current liabilities 10,136,000 12,373,000
LONG-TERM DEBT AND DEFERRED INTEREST, NET OF CURRENT
PORTIONS: 82,626,000 83,697,000
DEFERRED INCOME TAX LIABILITY 14,518,000 14,208,000
-------------- -------------
Total liabilities 107,280,000 110,278,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock - Class A, $.001 par value, 30,000,000 shares authorized,
17,221,000 and 22,273,000 shares issued and outstanding 17,000 22,000
Common stock - Class B, $.001 par value, 30,000,000 shares authorized,
2,867,000 and 2,867,000 shares issued and outstanding 3,000 3,000
Common stock - Class C, $.001 par value, 30,000,000 shares authorized,
3,184,000 and 3,132,000 shares issued and outstanding 3,000 3,000
Accumulated comprehensive income adjustments 40,000 (233,000)
Additional paid-in capital 446,400,000 782,377,000
Accumulated deficit (26,207,000) (24,146,000)
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Total stockholders' equity 420,256,000 758,026,000
-------------- -------------
Total liabilities and stockholders' equity $527,536,000 $868,304,000
============== =============
The accompanying notes are an integral part of these balance sheets.
4
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
Consolidated Statements of Operations
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For the Three Months Ended March 31, 1999 and 2000
--------------------------------------------------
Three Months Ended March 31,
--------------------------------
1999 2000
-------------- --------------
(Unaudited)
REVENUE:
Broadcast revenue, including barter revenue of $298,000 and $853,000, respectively $ 13,390,000 $ 25,124,000
Less: agency commissions 1,573,000 2,972,000
--------------- --------------
Net broadcast revenue 11,817,000 22,152,000
--------------- --------------
OPERATING EXPENSES:
Program and technical 2,472,000 4,240,000
Selling, general and administrative 5,144,000 8,299,000
Corporate expenses 858,000 1,118,000
Stock-based compensation 225,000 --
Depreciation and amortization 3,128,000 5,489,000
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Total operating expenses 11,827,000 19,146,000
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Operating (loss) income (10,000) 3,006,000
INTEREST EXPENSE, INCLUDING AMORTIZATION OF DEFERRED FINANCING COSTS 3,737,000 3,582,000
OTHER INCOME, net 63,000 4,237,000
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(Loss) income before provision for income taxes (3,684,000) 3,661,000
PROVISION FOR INCOME TAXES 251,000 1,600,000
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NET (LOSS) INCOME $ (3,935,000) $ 2,061,000
=============== ==============
NET (LOSS) INCOME APPLICABLE TO COMMON STOCKHOLDERS $ (4,940,000) $ 2,061,000
=============== ==============
BASIC AND DILUTED NET (LOSS) INCOME PER COMMON SHARE APPLICABLE TO COMMON STOCKHOLDERS $ (.52) $ .08
=============== ==============
SHARES USED IN COMPUTING BASIC NET (LOSS) INCOME PER COMMON SHARE APPLICABLE TO COMMON 9,429,000 24,536,000
=============== ==============
SHARES USED IN COMPUTING DILUTED NET (LOSS) INCOME PER COMMON SHARE APPLICABLE TO
COMMON STOCK HOLDERS 9,429,000 24,636,000
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The accompanying notes are an integral part of these consolidated statements.
5
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
Consolidated Statements of Changes in Stockholders' Equity
----------------------------------------------------------
For the Three Months Ended March 31, 2000
-----------------------------------------
Common Common Stock Common Stock Comprehensive
Stock Class A Class B Class C Income
------------- ------------- ------------- -------------
BALANCE, AS OF
DECEMBER 31,1998 $ - $ 2,000 $ 3,000
Comprehensive income:
Net income - - - $ 133,000
Unrealized gain on securities - - - 40,000
--------------
Comprehensive income - - - $ 173,000
==============
Preferred stock dividends - - -
Issuance of stock for
acquisition 2,000 1,000 -
Stock issued to an officer - - -
Conversion of warrants 5,000 - -
Issuance of common stock 10,000 - -
---------- ---------- ----------
BALANCE, AS OF
DECEMBER 31, 1999 17,000 3,000 3,000
Comprehensive income: - - -
Net income - - - $ 2,061,000
Unrealized loss on securities - - - (273,000)
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Comprehensive income - - - $ 1,788,000
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Issuance of common stock 5,000 - -
---------- ---------- ----------
BALANCE, AS OF MARCH 31, $ 22,000 $ 3,000 $ 3,000
========== ========== ==========
2000(Unaudited)
Accumulated
Comprehensive Total
Income Additional Paid Accumulated Stockholders'
Adjustments In Capital Deficit Equity
------------ -------------- -------------- --------------
BALANCE, AS OF
DECEMBER 31,1998 $ - $ - $ (24,864,000) (24,859,000)
Comprehensive income:
Net income - 133,000 133,000
Unrealized gain on securities 40,000 - - 40,000
Comprehensive income - - - -
Preferred stock dividends - - (1,476,000) (1,476,000)
Issuance of stock for
acquisition - 34,191,000 - 34,194,000
Stock issued to an officer - 225,000 - 225,000
Conversion of warrants - (5,000) - -
Issuance of common stock - 411,989,000 - 411,999,000
------------ -------------- -------------- --------------
BALANCE, AS OF
DECEMBER 31,1999 40,000 446,400,000 (26,207,000) 420,256,000
Comprehensive income: - - - -
Net income - - 2,061,000 2,061,000
Unrealized loss on securities (273,000) - - (273.000)
Comprehensive income - - - -
Issuance of common stock - 335,977,000 - 335,982,000
------------ -------------- --------------
BALANCE, AS OF MARCH 31, $ (233,000) $ 782,377,000 $ (24,146,000) $ 758,026,000
============ ============== ============== ==============
2000(Unaudited)
The accompanying notes are an integral part of these consolidated statements.
6
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
Consolidated Statements of Cash Flows
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For the Three Months Ended March 31, 1999,
------------------------------------------
and the Three Months Ended March 31, 2000
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Three Months Ended March 31,
----------------------------------
1999 2000
---------------- ---------------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (3,935,000) $ 2,061,000
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization 3,128,000 5,489,000
Amortization of debt financing costs, unamortized discount and deferred interest 1,088,000 1,258,000
Deferred income taxes and reduction in valuation reserve on deferred taxes -- (313,000)
Non-cash compensation to officer 225,000 --
Non-cash advertising revenue in exchange for equity investments -- (322,000)
Effect of change in operating assets and liabilities-
Trade accounts receivable 1,858,000 4,191,000
Prepaid expenses and other 44,000 59,000
Other assets (178,000) (113,000)
Accounts payable (358,000) (168,000)
Accrued expenses and other 2,080,000 211,000
---------------- ---------------
Net cash flows from operating activities 3,952,000 12,353,000
---------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,285,000) (568,000)
Equity investments (1,000,000) (114,000)
Purchase of available-for-sale investments, net -- (18,037,000)
Deposits and payments for station purchases (5,826,000) (210,231,000)
--------------- ---------------
Net cash flows from investing activities (8,111,000) (228,950,000)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt (16,365,000) (18,000)
Proceeds from debt issuances 22,650,000 --
Deferred financing costs (276,000) --
Proceeds from issuance of common stock, net of issuance costs -- 335,982,000
--------------- ---------------
Net cash flows from financing activities 6,009,000 335,964,000
--------------- ---------------
INCREASE IN CASH AND CASH EQUIVALENTS 1,850,000 119,367,000
CASH AND CASH EQUIVALENTS, beginning of period 4,455,000 6,221,000
--------------- ---------------
CASH AND CASH EQUIVALENTS, end of period $ 6,305,000 $ 125,588,000
=============== ===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for-
Interest $ 1,011,000 $ 656,000
=============== ===============
Income taxes $ 212,000 $ 2,051,000
=============== ===============
The accompanying notes are an integral part of these consolidated statements.
7
RADIO ONE, INC. AND SUBSIDIARIES
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Notes to Consolidated Financial Statements
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March 31, 2000
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization and Business
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Radio One, Inc. (a Delaware corporation referred to as Radio One) and its
subsidiaries, Radio One Licenses, Inc., WYCB Acquisition Corporation, Radio One
of Detroit, Inc., Allur-Detroit, Inc. and Allur Licenses, Inc. (Delaware
corporations), Broadcast Holdings, Inc. (a Washington, D.C., corporation), Bell
Broadcasting Company (a Michigan corporation) and Radio One of Atlanta, Inc. and
its wholly owned subsidiaries, ROA Licenses, Inc., and Dogwood Communications,
Inc. (Delaware corporations), and its wholly owned subsidiary, Dogwood Licenses,
Inc. (a Delaware corporation) (collectively referred to as the Company) were
organized to acquire, operate and maintain radio broadcasting stations. The
Company owns and operates radio stations in the Washington, D.C.; Baltimore,
Maryland; Philadelphia, Pennsylvania; Detroit, Michigan; Kingsley, Michigan;
Atlanta, Georgia; Cleveland, Ohio; St. Louis, Missouri; Richmond, Virginia; and
Boston, Massachusetts, markets. The Company also operates radio stations in
Richmond, Virginia, through a time brokerage agreement. The Company's operating
results are significantly affected by its market share in the markets that it
has stations.
Basis of Presentation
- ---------------------
The accompanying consolidated financial statements include the accounts of Radio
One and its wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation. The accompanying
consolidated financial statements are presented on the accrual basis of
accounting in accordance with generally accepted accounting principles. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Interim Financial Statements
- ----------------------------
The interim consolidated financial statements included herein for Radio One and
its wholly owned subsidiaries have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
In management's opinion, the interim financial data presented herein include all
adjustments (which include only normal recurring adjustments) necessary for a
fair presentation. Certain information and footnote disclosures normally
included in the financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations.
Results for interim periods are not necessarily indicative of results to be
expected for the full year. It is suggested that these consolidated financial
statements be read in conjunction with the Company's December 31, 1999,
financial statement and notes thereto included in the Company's annual report on
Form 10-K.
Radio One did not have comprehensive income adjustments for the three months
ended March 31, 1999.
8
2. ACQUISITIONS:
On March 11, 2000, the Company entered into agreements to acquire 21 radio
stations in 10 markets for approximately $1.4 billion. The Company expects to
finance these acquisitions with available cash and other third-party financings.
On February 28, 2000, the Company completed its acquisition of WPLY-FM, located
in the Philadelphia, Pennsylvania market, for approximately $80.0 million. The
acquisition of WPLY-FM resulted in the recording of approximately $78.7 million
of intangible assets.
3. PUBLIC OFFERING:
In March 2000, the Company completed a public offering of 5.0 million shares of
Class A common stock at $70.00 per share. The proceeds from this offering, net
of offering costs, were approximately $336.0 million.
9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following information should be read in conjunction with the
unaudited consolidated financial statements and notes thereto included in this
Quarterly Report and the audited financial statements and Management's
Discussion and Analysis combined in the Company's Form 10-K filed for the year
ended December 31, 1999.
RESULTS OF OPERATIONS
- ---------------------
Comparison of periods ended March 31, 1999 to the periods
ended March 31, 2000 (all periods are unaudited - all
numbers in 000s except per share data).
Three months ended Three months ended
March 31, March 31,
1999 2000
------------------------- -------------------------
STATEMENT OF OPERATIONS DATA:
REVENUE:
Broadcast revenue $ 13,390 $ 25,124
Less: Agency commissions 1,573 2,972
------------------------- -------------------------
Net broadcast revenue 11,817 22,152
------------------------- -------------------------
OPERATING EXPENSES:
Programming and technical 2,472 4,240
Selling, G&A 5,144 8,299
Corporate expenses 858 1,118
Stock-based compensation 225 -
Depreciation & amortization 3,128 5,489
------------------------- -------------------------
Total operating expenses 11,827 19,146
------------------------- -------------------------
Operating income (loss) (10) 3,006
INTEREST EXPENSE 3,737 3,582
OTHER INCOME, net 63 4,237
------------------------- -------------------------
Income (loss) before
Provision for income taxes (3,684) 3,661
PROVISION FOR INCOME TAXES 251 1,600
------------------------- -------------------------
Net income (loss) $ (3,935) $ 2,061
========================= =========================
Net income (loss) applicable
to common shareholders $ (4,940) $ 2,061
========================= =========================
DILUTED PER SHARE DATA:
Net income (loss) per share $ (0.42) $ 0.08
Preferred dividends per share $ (0.10) -
Net income (loss) per share applicable to
After-tax cash flow per share $ (0.06) $ 0.30
BASIC PER SHARE DATA:
Net income (loss) per share $ (0.42) $ 0.08
10
Preferred dividends per share $ (0.10) -
Net income (loss) per share applicable to common
shareholders $ (0.52) $ 0.08
After-tax cash flow per share $ (0.06) $ 0.30
OTHER DATA:
Broadcast cash flow (a) $ 4,201 $ 9,613
Broadcast cash flow margin 35.6% 43.4%
EBITDA (b) $ 3,343 $ 8,495
EBITDA margin 28.3% 38.3%
After-tax cash flow (c) $ (582) $ 7,450
Weighted average shares outstanding - basic (d) 9,429 24,536
Weighted average shares outstanding - diluted (d) 9,429 24,636
Net broadcast revenue increased to approximately $22.2 million for the
quarter ended March 31, 2000 from approximately $11.8 million for the quarter
ended March 31, 1999 or 88%. This increase in net broadcast revenue was the
result of continuing broadcast revenue growth in all of the Company's markets in
which it has operated for at least one year as the Company benefited from
historical ratings increases at certain of its radio stations, improved power
ratios at these stations as well as industry growth in each of these markets.
Additional revenue gains were derived from the Company's mid-1999 acquisitions
in Cleveland and Richmond (where the Company also operates stations under a time
brokerage agreement), as well as the March 1999 acquisition of Radio One of
Atlanta, Inc., and the acquisition of WPLY-FM in Philadelphia which closed on
February 28, 2000.
Operating expenses excluding depreciation, amortization and stock-based
compensation increased to approximately $13.7 million for the quarter ended
March 31, 2000 from approximately $8.5 million for the quarter ended March 31,
1999 or 61%. This increase in expenses was related to the Company's rapid
expansion within all of the markets in which it operates including increased
variable costs associated with increased revenue, as well as start-up and
expansion expenses in its newer markets of Cleveland and Richmond, as well as
higher costs associated with operating as a public company.
Broadcast operating income increased to approximately $3.0 million for
the quarter ended March 31, 2000 from a loss of approximately $10,000 for the
quarter ended March 31, 1999. This increase for the quarter was attributable to
proportionately higher revenue as described above partially offset by higher
depreciation and amortization expenses associated with the Company's several
acquisitions made in 1998 and 1999.
Interest expense decreased to approximately $3.6 million for the
quarter ended March 31, 2000 from approximately $3.7 million for the quarter
ended March 31, 1999 or 3%. This decrease relates primarily to the pay-down of
debt under the Company's bank credit facility with proceeds raised in a
follow-on equity offering in November 1999.
Other income (almost exclusively interest income) increased to
approximately $4.2 million for the quarter ended March 31, 2000 from
approximately $0.1 million for the quarter ended March 31, 1999 or 4,100%. This
increase was due to the Company's high cash balances and investment instruments
following its equity offerings in November 1999 and March 2000.
Income before provision for income taxes increased to approximately
$3.7 million for the quarter ended March 31, 2000 from a loss of approximately
$3.7 million for the quarter ended March 31, 1999. This increase was due to
higher operating income enhanced by higher interest income, as described above.
Net income increased to approximately $2.1 million for the quarter
ended March 31, 2000 from a loss of approximately $3.9 million for the quarter
ended March 31, 1999. This increase in net income for the quarter was due to
higher income before taxes partially offset by an increased provision for income
taxes.
11
Broadcast cash flow increased to approximately $9.6 million for the
quarter ended March 31, 2000 from approximately $4.2 million for the quarter
ended March 31, 1999 or 129%. This increase was attributable to the increases in
broadcast revenue partially offset by higher operating expenses as described
above.
Earnings before interest, taxes, depreciation, and amortization
(EBITDA), and excluding stock-based compensation expense, increased to
approximately $8.5 million for the quarter ended March 31, 2000 from
approximately $3.3 million for the quarter ended March 31, 1999 or 158%. This
increase was attributable to the increase in broadcast revenue and interest
income partially offset by higher operating expenses and higher corporate
expenses partially associated with the costs of operating as a public company.
After-tax cash flow increased to approximately $7.5 million for the
quarter ended March 31, 2000 from a loss of approximately $0.6 million for the
quarter ended March 31, 1999. This increase was attributable to the increase in
operating income and interest income partially offset by higher interest charges
associated with the financings of various acquisitions as well as the provision
for income taxes, as described above.
(a) "Broadcast cash flow" is defined as broadcast operating income plus
corporate expenses (including stock-based compensation) and
depreciation and amortization of both tangible and intangible assets.
(b) "EBITDA" is defined as earnings before interest, taxes, depreciation,
amortization and stock-based compensation.
(c) "After-tax cash flow" is defined as income before income taxes and
extraordinary items plus depreciation, amortization and stock-based
compensation, less the current income tax provision.
(d) As of March 31, 2000 the Company had 28,272,543 shares of common stock
outstanding.
12
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The capital structure of the Company consists of the Company's
outstanding long-term debt and stockholders' equity. The stockholders' equity
consists of common stock, additional paid-in capital and accumulated deficit.
The Company's balance of cash and cash equivalents was approximately $6.2
million as of December 31, 1999. The Company's balance of cash and cash
equivalents was approximately $125.6 million as of March 31, 2000. This increase
resulted primarily from the Company's stronger cash flow from operating
activities during the first three months of 2000 as well as the Company's public
offering on March 3, 2000 from which it raised approximately $336.0 million,
partially offset by cash paid for the acquisition of WPLY-FM on February 28,
2000. At March 31, 2000 the entire amount of $100.0 million remained available
(based on various covenant restrictions) to be drawn down from the Company's
bank credit facility. In general, the Company's primary source of liquidity is
cash provided by operations and, to the extent necessary, on undrawn commitments
available under the Company's bank credit facility.
Net cash flow from operating activities increased to approximately
$12.4 million for the three months ended March 31, 2000 from approximately $3.9
million for the three months ended March 31, 1999 for an increase of 218%. This
increase was due to a higher net income resulting from increased revenue and
interest income partially offset by higher depreciation and amortization charges
associated with the various acquisitions made by the Company in the past year
and a higher provision for income taxes as compared to the first three months of
1999. Non-cash expenses of depreciation and amortization increased to
approximately $5.5 million for the three months ended March 31, 2000 from
approximately $3.1 million for the three months ended March 31, 1999 or 77% due
to various acquisitions made by the Company within the past year.
Net cash flow used in investing activities increased to approximately
$229.0 million for the three months ended March 31, 2000 compared to
approximately $8.1 million for the three months ended March 31, 1999 or 2,727%.
During the three months ended March 31, 2000 the Company acquired radio station
WPLY-FM in the Philadelphia, Pennsylvania market for approximately $80.0
million. The company also made escrow deposits of approximately $133.1 million
on anticipated acquisitions including 12 radio stations in seven markets in the
United States from Clear Channel Communications, Inc. and AMFM, Inc., six radio
stations in the Charlotte, North Carolina and Augusta, Georgia markets through
an acquisition of Davis Broadcasting, Inc., and three radio stations in the
Indianapolis, Indiana market from Shirk, Inc. and IBL, L.L.C. Also during the
three months ended March 31, 2000 the Company made purchases of capital
equipment totaling approximately $0.6 million and net purchases of investment
instruments available for sale for approximately $18.0 million.
Net cash flow from financing activities was approximately $336.0
million for the three months ended March 31, 2000. During the three months ended
March 31, 2000, the Company completed a public offering of common stock and
raised net proceeds of approximately $336.0 million. A portion of the proceeds
was used to fund the escrow deposits mentioned above, with the balance to be
used in part for general operating expenses and to fund future acquisitions.
As a result of the aforementioned, cash and cash equivalents increased
by $119.4 million during the three months ended March 31, 2000 compared to an
approximate $1.9 million increase during the three months ended March 31, 1999.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is from time to time engaged in legal proceedings
incidental to its business. The Company does not believe that any legal
proceedings that it is currently engaged in, either individually or in the
aggregate, will have a material adverse effect on the Company.
13
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
On February 28, 2000 the Company acquired the assets of radio station
WPLY-FM in the Philadelphia, Pennsylvania market, for approximately $80.0
million.
On March 8, 2000 the Company completed an offering of 5,000,000 shares
of Class A Common Stock at an offering price of $70.00 per share. From this
offering, the Company received net proceeds of approximately $336.0 million
after deducting offering costs.
On March 11, 2000 the Company entered into agreements to acquire a
total of 21 radio stations in three separate transactions: (i) we agreed to
acquire from Clear Channel Communications, Inc. and AMFM, Inc. the assets of 12
radio stations located in seven markets in the United States for approximately
$1.3 billion; (ii) we agreed to acquire Davis Broadcasting, Inc. owner of six
radio stations in the Charlotte, North Carolina and Augusta, Georgia markets for
approximately $24.0 million in cash and stock; and (iii) we agreed to acquire
from Shirk, Inc. and IBL, L.L.C. the assets of three radio stations located in
the Indianapolis, Indiana market for approximately $40.0 million in cash and
stock.
Item 6. Exhibits and Reports on Form 8-K
EXHIBITS
3.1 Amended and Restated Certificate of Incorporation of Radio
One, Inc. (dated as of May 4, 2000), as filed with the State
of Delaware on May 9, 2000.
3.2 Amended and Restated By-laws of Radio One, Inc., amended as of
March 17, 2000 (incorporated by reference to Radio One's
Annual Report on Form 10-K for the period ended December 31,
1999 (File No. 000-25969; Film No. 582596)).
4.1 Indenture dated as of May 15, 1997 among Radio One, Inc.,
Radio One Licenses, Inc. and United States Trust Company of
New York (incorporated by reference to Radio One's Annual
Report on Form 10-K for the period ended December 31, 1997
(File No. 333-30795; Film No. 98581327)).
4.2 First Supplemental Indenture dated as of June 30, 1998, to
Indenture dated as of May 15, 1997, by and among Radio One,
Inc., as Issuer and United States Trust Company of New York,
as Trustee, by and among Radio One, Inc., Bell Broadcasting
Company, Radio One of Detroit, Inc., and United States Trust
Company of New York, as Trustee (incorporated by reference to
Radio One's Current Report on Form 8-K filed July 13, 1998
(File No. 333-30795; Film No. 98665139)).
14
4.3 Second Supplemental Indenture dated as of December 23, 1998,
to Indenture dated as of May 15, 1997, by and among Radio One,
Inc., as Issuer and United States Trust Company of New York,
as Trustee, by and among Radio One, Inc., Allur-Detroit, Allur
Licenses, Inc., and United States Trust Company of New York,
as Trustee (incorporated by reference to Radio One's Current
Report on Form 8-K filed January 12, 1999 (File No. 333-30795;
Film No. 99504706)).
4.7 Standstill Agreement dated as of June 30, 1998 among Radio
One, Inc., the subsidiaries of Radio One, Inc., United States
Trust Company of New York and the other parties thereto
(incorporated by reference to Radio One's Quarterly Report on
Form 10-Q for the period ended June 30, 1998 (File No. 333-
30795; Film No. 98688998)).
4.9 Stockholders Agreement dated as of March 2, 1999 among
Catherine L. Hughes and Alfred C. Liggins, III (incorporated
by reference to Radio One's Quarterly Report on Form 10-Q for
the period ended June 30, 1999 (File No. 000-25969; Film No.
99686684)).
10.58 Asset Purchase Agreement dated as of March 11, 2000 relating
to the acquisition of KMJQ-FM and KBXX-FM, licensed to
Houston, Texas, WVCG(AM), licensed to Coral Gables, Florida,
WZAK-FM, licensed to Cleveland, Ohio, WJMO-AM, licensed to
Cleveland Heights, Ohio, KKBT-FM, licensed to Los Angeles,
California, KBFB-FM, licensed to Dallas, Texas, WJMZ-FM ,
licensed to Anderson, South Carolina, WFXC-FM, licensed to
Durham, North Carolina, WFXK-FM, licensed to Tarboro, North
Carolina, WNNL-FM, licensed to Farquay-Varina, North Carolina
and WQOK-FM, licensed to South Boston, Virginia.
10.59 Agreement and Plan of Merger dated as of March 11, 2000
relating to the acquisition of WCCJ-FM, licensed to
Harrisburg, North Carolina, WFXA-FM and WTHB-AM, licensed to
Augusta, Georgia, WAKB-FM, licensed to Wrens, Georgia,
WAEG-FM, licensed to Evans, Georgia and WAEJ-FM, licensed to
Waynesboro, Georgia.
10.60 Asset Purchase Agreement dated as of March 11, 2000 relating
to the acquisition of WHHH-FM, licensed to Indianapolis,
Indiana, WBKS-FM, licensed to Greenwood, Indiana, WYJZ-FM,
licensed to Lebanon, Indiana and W53AV, licensed to
Indianapolis, Indiana.
27.1 Financial data schedule (EDGAR version only).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RADIO ONE, INC.
_______________________________________________________
May 12, 2000 Scott R. Royster
Executive Vice President and Chief Financial Officer
(Principal Accounting Officer)
16