Exhibit 1
NEWS RELEASE
May 15, 2001
FOR IMMEDIATE RELEASE
RADIO ONE, INC.
UPDATES 2001 GUIDANCE FOR INTEREST EXPENSE AND SHARES OUTSTANDING
Revised for Recent Bond Offering and Various Equity Transactions
Washington, DC - Radio One, Inc. (NASDAQ: ROIAK and ROIA) today released updated
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guidance for interest expense and shares outstanding for the second quarter of
its fiscal year ending December 31, 2001. With the adoption by the Securities
and Exchange Commission of Regulation FD (Full Disclosure), the Company believes
that it is necessary to provide this important information to all market
participants.
These estimates are based on current Generally Accepted Accounting Principles
(GAAP) for the treatment of goodwill and other intangibles and do not consider
any impact of the current Financial Accounting Standards Board (FASB) project on
Business Combinations that may change the accounting treatment of goodwill and
other intangibles, effectively increasing reported earnings per share for
companies such as Radio One. These estimates include expected results for only
those stations owned and/or operated by the Company on this date.
For the quarter ending June 30, 2001 the Company expects to report net revenue
of approximately $64.0 million and broadcast cash flow of approximately $34.5
million. The Company recently announced the sale of $300.0 million of 8-7/8%
Senior Subordinated Notes. Proceeds from the sale of these Notes will be
used to repay approximately $200.0 million outstanding under the Company's
senior credit facilities. In addition, the Company will use a portion of the
proceeds to redeem $85.4 million of the Company's 12% Senior Subordinated Notes.
Because of a 30-day notice provision for redeeming the Company's 12% Senior
Subordinated Notes, these 12% Notes and the new 8-7/8% Notes will each be
outstanding at the same time, for a short period of time. Furthermore, the
senior debt being repaid currently carries an interest rate lower than that of
the 8-7/8% Notes. Thus, the Company is revising guidance for its interest
expense in the second quarter to approximately $15.2-15.4 million from $14.2
million although the cash interest component assumed in the Company's after-tax
cash flow calculation is expected to be $14.5-15.0 million for the quarter.
Page 2 - Radio One, Inc. Updates 2001 Guidance
Additionally, the Company recently sold 1.5 million shares of its Class D Common
Stock, at the then fair market value of the Company's Class D Common Stock, to
its Chief Executive Officer in exchange for a full recourse note for the
purchase of the shares and the Company agreed to grant a total of 1.25 million
options to purchase Class D Common Stock, at the then fair market value of the
Company's Class D Common Stock, to its Chairperson, Chief Executive Officer and
Chief Operating Officer. Thus, the Company is revising guidance for its shares
outstanding for the second quarter to approximately 88.5 million basic shares
(up from 86.7 million) and 89.0 million on a fully-diluted basis (up from 87.0
million).
For the fiscal year ending December 31, 2001, the Company expects to report net
revenue of approximately $248.0 million and BCF of approximately $132.0 million.
The Company continues to expect that Blue Chip Broadcasting will report full-
year BCF of approximately $11.5 million although those results are not included
in the revised guidance numbers outlined above.
Radio One is one of the nation's largest radio broadcasting companies 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.
This press release may include 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,
granting of rights to acquire certain portions of the acquired company's or
radio station's operations, 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.
For more information contact Scott R. Royster, Executive Vice President and
Chief Financial Officer at 301-429-2642.