NEWS RELEASE
May 3, 2001 Contact: Scott R. Royster, Chief Financial Officer
FOR IMMEDIATE RELEASE (301) 429-2642
Washington, DC
RADIO ONE, INC. REPORTS RECORD FIRST
QUARTER RESULTS
Same Station Net Revenue Increases 5%, BCF 7%
Pro Forma Net Revenue Increases 6%, BCF 4%
Company exhibits growth in soft economic environment
Washington, DC: - Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported record
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first quarter results. Net broadcast revenue was approximately $47.9 million,
up 116% from the same period in 2000. Broadcast cash flow was approximately
$22.0 million, an increase of 129% from the same period in 2000, while the
broadcast cash flow margin improved to 45.8% from 43.4%. After-tax cash flow
was approximately $1.7 million or $0.02 cents per share.
On a same station basis the Company's net broadcast revenue increased 5% and
broadcast cash flow increased 7% from last year while the broadcast cash flow
margin improved to 44.4% from 43.4% in the previous year's first quarter. (Same
station results are for only those stations owned and/or operated by the Company
for a one-year period.)
Alfred C. Liggins, III, the Company's CEO and President stated, "This quarter
showed that, even in relatively tough economic times, our focused programming
strategy, our turnaround acquisition strategy and our disciplined operating
strategy can still produce industry-leading results. Ratings absolutely DO
matter and the incredible ratings momentum we have historically experienced has
continued this year and is helping us grow while the radio industry experienced
contraction in the quarter. We are very pleased by this performance. On the
transactions front during the quarter, we closed on acquisitions in Boston,
Indianapolis and Dallas and sold our AM station in Dallas as well as stations in
Greenville, South Carolina and Richmond, Virginia and we continue to look
forward to closing the Blue Chip acquisition in the third quarter of 2001."
Commenting further on the Company's performance, Scott R. Royster, Executive
Vice President and CFO, stated "This was the first negative quarter in the
industry in close to a decade. We were also up against a first quarter in 2000
when we grew our same station net revenue and BCF 29% and 66% respectively,
making this performance that much more impressive. We further reduced our
leverage in the quarter and, going forward, we should benefit from the current
lower interest rate environment relative to that of last year. While it is
still too early to tell definitively, we are hopeful that the second half of
2001 will prove stronger than the first half and there are some signs that
things may be improving for our industry as we enter the month of May."
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PAGE 2 -- RADIO ONE, INC. REPORTS RECORD FIRST QUARTER RESULTS
RESULTS OF OPERATIONS
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Comparison of periods ended March 31, 2001 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, 2001 March 31, 2000
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STATEMENT OF OPERATIONS DATA:
REVENUE:
Broadcast revenue $ 54,273 $25,124
Less: Agency commissions 6,348 2,972
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Net broadcast revenue 47,925 22,152
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OPERATING EXPENSES:
Programming and technical 8,856 4,240
Selling, G&A 17,116 8,299
Corporate expenses 1,840 1,118
Non-cash compensation 238 -
Depreciation & amortization 31,524 5,489
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Total operating expenses 59,574 19,146
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Operating (loss) income (11,649) 3,006
INTEREST EXPENSE 15,701 3,582
GAIN ON SALE OF ASSETS 4,272 -
OTHER INCOME, net 596 4,237
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(Loss) income before (benefit) provision for
income taxes (22,482) 3,661
(BENEFIT) PROVISION FOR INCOME TAXES (7,309) 1,600
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Net (loss) income $(15,173) $ 2,061
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Net (loss) income applicable to common
stockholders $(20,211) $ 2,061
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PAGE 3 -- RADIO ONE, INC. REPORTS RECORD FIRST QUARTER RESULTS
Three months ended Three months ended
March 31, 2001 March 31, 2000
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BASIC AND DILUTED PER SHARE DATA (e) (f):
Net income (loss) per share applicable to common
shareholders $ (0.23) $ 0.03
After-tax cash flow per share $ 0.02 $ 0.10
OTHER DATA:
Broadcast cash flow (a) $ 21,953 $ 9,613
Broadcast cash flow margin (a) 45.8% 43.4%
EBITDA (b) $ 20,113 $ 8,495
EBITDA margin (b) 42.0% 38.3%
After-tax cash flow (c) $ 1,720 $ 7,450
Capital expenditures 1,651 568
SAME STATION RESULTS:
Net revenue $ 23,203 $22,152
Broadcast cash flow 10,297 9,613
Broadcast cash flow margin 44.4% 43.4%
Weighted average shares outstanding - basic (d) 86,801 73,608
Weighted average shares outstanding - diluted (e) 87,107 73,917
AFTER-TAX CASH FLOW:
Pre-tax income $(22,482) $ 2,061
Plus: Non-cash charges 31,762 5,489
Plus: Tax benefit (liability) 1,750 (100)
Less: Preferred Dividends 5,038 -
Less: Gain on Sale of Assets 4,272 -
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TOTAL $ 1,720 $ 7,450
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March 31, 2001 March 31, 2000
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SELECTED BALANCE SHEET DATA:
Cash and cash equivalents $ 24,245 $125,588
Current assets 70,163 417,425
Total assets 1,729,680 868,304
Senior debt 550,090 82
Subordinated debt 84,451 83,615
Preferred stock (liquidation value) 310,000 -
Total shareholders' equity 1,030,321 758,026
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PAGE 4 -- RADIO ONE, INC. REPORTS RECORD FIRST QUARTER RESULTS
Net broadcast revenue increased to approximately $47.9 million for the
quarter ended March 31, 2001 from approximately $22.2 million for the quarter
ended March 31, 2000 or 116%. This increase in net broadcast revenue was the
result of continuing broadcast revenue growth in the Company's markets in which
it has operated for at least one year as well as from revenue contributed from
radio stations acquired within the last year, particularly the stations acquired
from Clear Channel Communications and AMFM.
Operating expenses excluding depreciation, amortization and non-cash
compensation increased to approximately $27.8 million for the quarter ended
March 31, 2001 from approximately $13.7 million for the quarter ended March 31,
2000 or 103%. 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.
Interest expense increased to approximately $15.7 million for the quarter
ended March 31, 2001 from approximately $3.6 million for the quarter ended March
31, 2000 or 336%. This increase relates primarily to additional borrowings made
in the third quarter of 2000 in conjunction with the acquisition of radio
stations from Clear Channel and AMFM.
Other income (almost exclusively interest income) decreased to
approximately $0.6 million for the quarter ended March 31, 2001 from
approximately $4.2 million for the quarter ended March 31, 2000 or 86%. This
decrease was due to the Company's lower cash and investment balances following
its acquisition of $1.3 billion worth of radio stations in August, 2000.
Loss before provision for income taxes was approximately $22.5 million for
the quarter ended March 31, 2001 from income before provision for income taxes
of approximately $3.7 million for the quarter ended March 31, 2000. This
decrease in income before provision for income taxes was due to higher
depreciation and amortization charges, higher interest expense and lower
interest income all due to the closing of the acquisition of $1.3 billion worth
of radio stations in August, 2000, partially offset by a net gain of $4.3
million on the sale of various radio stations made during the first quarter of
2001.
Net loss was approximately $15.2 million for the quarter ended March 31,
2001 compared to net income of approximately $2.1 million for the quarter ended
March 31, 2000. This decrease in net income was due to items described above
partially offset by a benefit for income taxes.
Broadcast cash flow increased to approximately $22.0 million for the
quarter ended March 31, 2001 from approximately $9.6 million for the quarter
ended March 31, 2000 or 129%. This increase was attributable to the increases
in broadcast revenue partially offset by higher operating expenses as described
above.
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PAGE 5 -- RADIO ONE, INC. REPORTS RECORD FIRST QUARTER RESULTS
Earnings before interest, taxes, depreciation, and amortization (EBITDA),
and excluding non-cash compensation expense, increased to approximately $20.1
million for the quarter ended March 31, 2001 from approximately $8.5 million for
the quarter ended March 31, 2000 or 136%. This increase was attributable to the
increase in broadcast revenue partially offset by higher operating expenses and
higher corporate expenses associated with the growth in the company.
Other Recent Events:
On March 29, 2001, the Company completed the divestiture of KJOI-AM in
Dallas, Texas, to Clear Channel Communications for approximately $16.0 million.
On February 28, 2001, the Company completed the acquisition of Nash
Communications Corporation, owner of Station WILD-AM in Boston, Massachusetts
for approximately $4.5 million and approximately 63,500 shares of Class A Common
Stock of the Company.
On February 15, 2001, the Company completed the acquisition of the
intellectual property of WTLC-FM, and on April 25, 2001 completed the
acquisition of substantially all of the assets of WTLC-AM, both in the
Indianapolis market, from Emmis Communications, for approximately $8.5 million.
On February 8, 2001, the Company announced that it would acquire Blue Chip
Broadcasting for approximately $190.0 million.
On February 1, 2001, the Company completed its acquisition of KTXQ-FM
(formerly KDGE) in the Dallas, Texas market for approximately $52.5 million.
On February 1, 2001, the Company completed the divestiture of two radio
stations in the Greenville, South Carolina market and two radio stations in the
Richmond, Virginia market for approximately $53.5 million.
Radio One will be holding a conference call to discuss its results for the
fiscal first quarter of 2001. This conference call is scheduled for Thursday,
May 3, 2001 at 9:00a.m Eastern Daylight Time. Interested parties should call
612-332-0228 or 612-332-0107 five minutes prior to the scheduled time of the
call and ask for the "Radio One 2001 First Quarter Results Teleconference". The
conference call will be recorded and made available for replay from 12:30p.m.
of the day of the call until midnight of the day following the call. Interested
parties may listen to the recording by calling (800) 475-6701 and entering
passcode 584383.
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PAGE 6 -- RADIO ONE, INC. REPORTS RECORD FIRST QUARTER RESULTS
Radio One is the nation's seventh largest radio broadcasting company and
the largest primarily targeting African-American and urban listeners. Pro forma
for all announced acquisitions and divestitures, the Company owns and/or
operates 63 radio stations located in 22 of the largest markets in the United
States.
Notes:
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. Because these statements apply to future events, they are
subject to risks and uncertainties that could cause actual results to differ
materially, including the absence of a combined operating history with an
acquired company or radio station and the potential inability to integrate
acquired businesses, need for additional financing, high degree of leverage,
seasonal nature of the business, granting of rights to acquire certain portions
of the acquired company's or radio station's operations, market ratings,
variable economic conditions and consumer tastes, as well as restrictions
imposed by existing debt and future payment obligations. Important factors that
could cause actual results to differ materially are described in the Company's
reports on Forms 10-K and 10-Q and other filings with the Securities and
Exchange Commission.
(a) "Broadcast cash flow" is defined as broadcast operating income plus
corporate expenses (including non-cash compensation) and depreciation and
amortization of both tangible and intangible assets.
(b) "EBITDA" is defined as earnings before interest, taxes, depreciation,
amortization and non-cash compensation.
(c) "After-tax cash flow" is defined as income before income taxes and
extraordinary items plus depreciation, amortization and non-cash
compensation, less the current income tax liability/(benefit) and preferred
stock dividends.
(d) As of March 31, 2001 the Company had 86,800,813 shares of Common Stock
outstanding on a weighted average basis for the quarter.
(e) As of March 31, 2001 the Company had 87,107,145 shares of Common Stock
outstanding on a weighted average basis for the quarter, diluted for
outstanding stock options. However, the per share amounts are the same as
those based on basic shares outstanding because of the anti-dilutive effect
of these options shares, other than for after-tax cash flow. After-tax
cash flow per share data was calculated using the basic and diluted
weighted average shares outstanding, however, the per share amounts were
the same because of the relatively minor differences between the two
weighted average share amounts.
The Company has presented broadcast cash flow, operating cash flow and after-tax
cash flow data, which the Company believes are comparable to the data provided
by other companies in the industry, because such data are commonly used as a
measure of performance for broadcast companies. However, broadcast cash flow,
operating cash flow and after-tax cash flow do not purport to represent cash
provided by operating activities as reflected in the Company's consolidated
statements of cash flow, are not a measure of financial performance under
generally accepted accounting principles and should not be considered in
isolation or as a substitute for measures of performance prepared in accordance
with generally accepted accounting principles.