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 June 30, 2001
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,
7th 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 August 7, 2001
Class A Common Stock, $.001 Par Value 22,540,235
Class B Common Stock, $.001 Par Value 2,867,463
Class C Common Stock, $.001 Par Value 3,132,458
Class D Common Stock, $.001 Par Value 59,876,237
1
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
Form 10-Q
For the Quarter Ended June 30, 2001
TABLE OF CONTENTS
-----------------
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements .............................................. 3
Consolidated Balance Sheets as of December 31, 2000, and June 30,
2001 (Unaudited) ................................................. 4
Consolidated Statements of Operations for the Three Months and Six
Months Ended June 30, 2000 and 2001(Unaudited) ................... 5
Consolidated Statements of Changes in Stockholders' Equity for the
Six Months Ended June 30, 2001 (Unaudited) ....................... 6
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2000 and 2001 (Unaudited) .............. 7
Notes to Consolidated Financial Statements June 30, 2000
and 2001 (Unaudited) ............................................. 9
Condensed Consolidating Balance Sheets as of December 31, 2000 .... 14
Condensed Consolidating Balance Sheets as of June 30, 2001
(Unaudited) ...................................................... 15
Condensed Consolidating Statements of Operations for the Six
Months Ended June 30, 2001 (Unaudited) ........................... 16
Condensed Consolidating Statements of Operations for the Three
Months Ended June 30, 2001 (Unaudited) ........................... 17
Condensed Consolidating Statements of Operations for the Six
Months Ended June 30, 2000 (Unaudited) ........................... 18
Condensed Consolidating Statements of Operations for the Three
Months Ended June 30, 2000 (Unaudited) ........................... 19
Consolidating Statements of Cash Flows for the Six Months
Ended June 30, 2001 (Unaudited) .................................. 20
Consolidating Statements of Cash Flows for the Six Months
Ended June 30, 2000 (Unaudited) .................................. 21
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ........................................... 22
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ................................................ 28
Item 2. Changes in Securities and Use of Proceeds ........................ 28
Item 3. Defaults Upon Senior Securities .................................. 28
Item 4. Submission of Matters to a Vote of Security Holders .............. 28
Item 5. Other Information ................................................ 30
Item 6. Exhibits and Reports on Form 8-K ................................. 30
SIGNATURE ................................................................. 33
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(See pages 4-21 -- This page intentionally left blank.)
3
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
AS OF DECEMBER 31, 2000, AND JUNE 30, 2001
------------------------------------------
December 31, June 30,
2000 2001
---------------- ----------
ASSETS (Unaudited)
------
CURRENT ASSETS:
Cash and cash equivalents $ 20,879,000 $ 9,519,000
Trade accounts receivable, net of allowance for doubtful
accounts of $5,506,000 and $6,079,000, respectively 46,883,000 50,047,000
Prepaid expenses and other 6,557,000 4,915,000
Income tax receivable 2,476,000 2,000,000
Deferred tax asset 2,187,000 2,476,000
-------------- --------------
Total current assets 78,982,000 68,957,000
PROPERTY AND EQUIPMENT, net 33,376,000 27,773,000
INTANGIBLE ASSETS, net 1,637,180,000 1,594,732,000
OTHER ASSETS 15,680,000 17,260,000
-------------- --------------
Total assets $1,765,218,000 $1,708,722,000
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 17,683,000 $ 7,961,000
Accrued expenses 14,127,000 17,437,000
Other current liabilities 4,696,000 2,102,000
-------------- --------------
Total current liabilities 36,506,000 27,500,000
LONG-TERM DEBT AND DEFERRED INTEREST, net of current
portion 646,956,000 650,057,000
SWAP AGREEMENTS LIABILITY -- 9,733,000
DEFERRED INCOME TAX LIABILITY 24,687,000 10,059,000
-------------- --------------
Total liabilities 708,149,000 697,349,000
-------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Convertible preferred stock, $.001 par value, 1,000,000 shares authorized
and 310,000 shares issued and outstanding; liquidation preference of
$1,000 per share, plus cumulative dividends at 6.5% per year, which were
$9,236,000 as of December 31, 2000, and $10,070,000 as of June 30, 2001 -- --
Common stock - Class A, $.001 par value, 30,000,000 shares
authorized, 22,789,000 and 22,536,000 shares issued and
outstanding 23,000 23,000
Common stock - Class B, $.001 par value, 150,000,000 shares
authorized, 2,867,000 shares issued and outstanding 3,000 3,000
Common stock - Class C, $.001 par value, 150,000,000 shares
authorized, 3,132,000 shares issued and outstanding 3,000 3,000
Common stock - Class D, $.001 par value, 150,000,000 shares
authorized, 58,246,000 and 59,863,000 shares issued and
outstanding 58,000 60,000
Accumulated comprehensive income adjustments -- (6,570,000)
Stock subscriptions receivable (9,005,000) (30,110,000)
Additional paid-in capital 1,105,681,000 1,127,515,000
Accumulated deficit (39,694,000) (79,551,000)
-------------- --------------
Total stockholders' equity 1,057,069,000 1,011,373,000
-------------- --------------
Total liabilities and stockholders' equity $1,765,218,000 $1,708,722,000
============== ==============
The accompanying notes are an integral part of these consolidated balance sheets.
4
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2000 AND 2001
----------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------- ------------------------------
2000 2001 2000 2001
---------------- --------------- -------------- --------------
(Unaudited) (Unaudited)
REVENUE:
Broadcast revenue, including barter revenue of
$429,000, $559,000, $1,282,000 and $1,204,000,
respectively $ 37,231,000 $ 70,930,000 $ 62,355,000 $ 125,203,000
Less: agency commissions 4,588,000 8,645,000 7,560,000 14,993,000
------------- ------------- ------------- -------------
Net broadcast revenue 32,643,000 62,285,000 54,795,000 110,210,000
------------- ------------- ------------- -------------
OPERATING EXPENSES:
Program and technical, exclusive of depreciation and
amortization, shown separately below 4,697,000 9,151,000 8,937,000 18,007,000
Selling, general and administrative 11,492,000 19,090,000 19,791,000 36,206,000
Corporate expenses 1,282,000 1,683,000 2,400,000 3,523,000
Non-cash compensation -- 237,000 -- 475,000
Depreciation and amortization 7,182,000 30,851,000 12,671,000 62,375,000
------------- ------------- ------------- -------------
Total operating expenses 24,653,000 61,012,000 43,799,000 120,586,000
------------- ------------- ------------- -------------
Operating income (loss) 7,990,000 1,273,000 10,996,000 (10,376,000)
INTEREST EXPENSE, including amortization of
deferred financing costs 3,665,000 14,717,000 7,247,000 30,418,000
GAIN ON SALE OF ASSETS, net -- -- -- 4,272,000
OTHER INCOME (EXPENSE), net 5,470,000 (596,000) 9,707,000 --
------------- ------------- ------------- -------------
Income (loss) before (provision) benefit for
income taxes and extraordinary loss 9,795,000 (14,040,000) 13,456,000 (36,522,000)
(PROVISION) BENEFIT FOR INCOME TAXES (4,218,000) 4,633,000 (5,818,000) 11,942,000
------------- ------------- ------------- -------------
INCOME (LOSS) BEFORE EXTRAORDINARY LOSS 5,577,000 (9,407,000) 7,638,000 (24,580,000)
------------- ------------- ------------ -------------
EXTRAORDINARY LOSS ON DEBT
RETIREMENT, net of taxes of $2,564,000 -- 5,207,000 -- 5,207,000
------------- ------------- ------------ -------------
NET INCOME (LOSS) $ 5,577,000 $ (14,614,000) $ 7,638,000 $ (29,787,000)
============= ============= ============ =============
NET INCOME (LOSS) APPLICABLE TO
COMMON STOCKHOLDERS $ 5,577,000 $ (19,646,000) $ 7,638,000 $ (39,857,000)
============= ============= ============ =============
BASIC AND DILUTED INCOME (LOSS) PER
COMMON SHARE:
Income (loss) before extraordinary loss $ 0.07 $ (0.16) $ 0.09 $ (0.40)
============= ============= ============ =============
Extraordinary loss -- (0.06) -- (0.06)
============= ============= ============ =============
Net income (loss) $ 0.07 $ (0.22) $ 0.09 $ (0.46)
============= ============= ============ =============
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 84,994,000 88,252,000 83,038,000 87,532,000
============= ============== ============= ==============
Diluted 85,256,000 88,252,000 83,316,000 87,532,000
============= ============= ============= ==============
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 SIX MONTHS ENDED JUNE 30, 2001 (UNAUDITED)
--------------------------------------------------
Common Common Common Common Convertible
Stock Stock Stock Stock Preferred Comprehensive
Class A Class B Class C Class D Stock Income
------- ------- ------- ------- ----------- -------------
BALANCE, as of December 31, 2000 $23,000 $3,000 $3,000 $58,000 $ --
Comprehensive income:
Net loss -- -- -- -- -- $(29,787,000)
Cumulative effect of change in
accounting principle for
derivatives, net of taxes -- -- -- -- -- (2,630,000)
Valuation adjustment for swap
fair value, net of taxes -- -- -- -- -- (3,940,000)
------------
Comprehensive loss $(36,357,000)
============
Preferred stock dividends -- -- -- -- --
Stock sold to officer -- -- -- 2,000 --
Issuance of common stock for
acquisition -- -- -- -- --
Employee exercise of options -- -- -- -- --
Preferred stock issuance costs -- -- -- -- --
------- ------- ------- ------- -----------
BALANCE, as of June 30, 2001
(Unaudited) $23,000 $ 3,000 $ 3,000 $60,000 $ --
======= ======= ======= ======= ===========
Accumulated
Comprehensive Stock Additional Total
Income Subscriptions Paid-In Accumulated Stockholders'
Adjustments Receivable Capital Deficit Equity
------------- -------------- ---------- ------------ --------------
BALANCE, as of December 31, 2000 $ -- $ (9,005,000) $1,105,681,000 $(39,694,000) $1,057,069,000
Comprehensive income:
Net loss -- -- -- (29,787,000) (29,787,000)
Cumulative effect of change in
accounting principle for
derivatives, net of taxes (2,630,000) -- -- -- (2,630,000)
Valuation adjustment for swap
fair value, net of taxes (3,940,000) -- -- -- (3,940,000)
Comprehensive loss
Preferred stock dividends -- -- -- (10,070,000) (10,070,000)
Stock sold to officer -- (21,105,000) 21,103,000 -- --
Issuance of common stock for
acquisition -- -- 500,000 -- 500,000
Employee exercise of options -- -- 240,000 -- 240,000
Preferred stock issuance costs -- -- (9,000) -- (9,000)
------------- ------------- -------------- ------------ --------------
BALANCE, as of June 30, 2001
(Unaudited) $ (6,570,000) $ (30,110,000) $1,127,515,000 $(79,551,000) $1,011,373,000
============= ============= ============== ============ ==============
The accompanying notes are an integral part of these consolidated statements.
6
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 2001
-----------------------------------------------
Six Months Ended
June 30,
----------------------------------
2000 2001
---------------- ----------------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 7,638,000 $ (29,787,000)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization 12,671,000 62,375,000
Amortization of debt financing costs, unamortized discount and deferred interest 2,014,000 1,016,000
Deferred income taxes (244,000) (13,521,000)
Non-cash compensation to officers -- 475,000
Loss on sale of investments 225,000 --
Loss on write-down of investments -- 1,206,000
Gain on sale of assets, net -- (4,272,000)
Non-cash advertising revenue in exchange for equity investments (658,000) --
Extraordinary loss on debt retirement -- 7,771,000
Effect of change in operating assets and liabilities-
Trade accounts receivable (5,298,000) (3,155,000)
Income tax receivable -- 476,000
Prepaid expenses and other (306,000) (225,000)
Other assets 221,000 (1,202,000)
Accounts payable 1,110,000 (9,722,000)
Accrued expenses and other 1,517,000 2,635,000
---------------- ---------------
Net cash flows from operating activities 18,890,000 14,070,000
---------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,397,000) (2,840,000)
Equity investments (884,000) (210,000)
Proceeds from sale of available-for-sale investments, net 51,114,000 --
Proceeds from sale of assets -- 69,254,000
Deposits and payments for station purchases (262,244,000) (70,286,000)
---------------- ---------------
Net cash flows from investing activities (213,411,000) (4,082,000)
---------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt (32,000) (303,648,000)
Proceeds from debt issuances -- 300,000,000
Payment of preferred stock issuance costs -- (9,000)
Payment of preferred stock dividends -- (10,070,000)
Deferred financing costs -- (7,861,000)
Proceeds from issuance of common stock, net of issuance costs 335,982,000 --
Proceeds from exercise of stock options 433,000 240,000
---------------- ---------------
Net cash flows from financing activities 336,383,000 (21,348,000)
---------------- ---------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 141,862,000 (11,360,000)
CASH AND CASH EQUIVALENTS, beginning of period 6,221,000 20,879,000
---------------- ---------------
CASH AND CASH EQUIVALENTS, end of period $ 148,083,000 $ 9,519,000
================ ===============
7
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for-
Interest $ 4,756,000 $ 24,788,000
=============== ================
Income taxes $ 6,068,000 $ 787,000
=============== ================
The accompanying notes are an integral part of these consolidated statements.
8
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
JUNE 30, 2000 AND 2001
----------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Organization and Business
- -------------------------
Radio One, Inc. (a Delaware corporation referred to as Radio One) and
subsidiaries (collectively referred to as the Company) were organized to
acquire, operate and maintain radio broadcasting stations. The Company owns
and/or operates radio stations in the Washington, D.C.; Baltimore, Maryland;
Philadelphia, Pennsylvania; Detroit and Kingsley, Michigan; Atlanta and Augusta,
Georgia; Cleveland, Ohio; St. Louis, Missouri; Richmond, Virginia; Boston,
Massachusetts; Charlotte and Raleigh, North Carolina; Indianapolis, Indiana;
Houston and Dallas, Texas; Miami, Florida; and Los Angeles, California markets.
The Company has been making and may continue to make significant acquisitions of
radio stations, which may require it to incur new debt. The service of this debt
could require the Company to make significant debt service payments. The
Company's operating results are significantly affected by its share of the
audience in markets where it has stations.
Basis of Presentation
- ---------------------
The accompanying consolidated financial statements include the accounts of Radio
One, Inc. and its 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 accounting principles generally accepted in the
United States. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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,
Inc. and 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 accounting
principles generally accepted in the United States 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, 2000,
financial statement and notes thereto included in the Company's annual report on
Form 10-K/A.
9
2. ACQUISITIONS AND DIVESTITURES:
------------------------------
In June 2001, the Company entered into an agreement to acquire WPEZ-FM, licensed
to Macon, Georgia, for approximately $55.0 million. The station is in the
process of being moved to a location within the Atlanta, Georgia market.
In April 2001, the Company acquired WTLC-AM, licensed to Indianapolis, Indiana,
for approximately $1.1 million.
In March 2001, the Company completed the sale of KJOI-AM (formerly KLUV-AM),
licensed to Dallas, Texas, for approximately $16.0 million.
In February 2001, the Company acquired the intellectual property of WTLC-FM,
licensed to Indianapolis, Indiana, for approximately $7.2 million.
In February 2001, the Company acquired KTXQ-FM (formerly KDGE-FM), licensed to
Gainesville, Texas, for approximately $52.5 million.
In February 2001, the Company completed the sale of WDYL-FM, licensed to
Chester, Virginia, and radio stations WJMZ-FM and WPEK-FM, licensed to Anderson
and Seneca, South Carolina, respectively, for approximately $52.5 million and
WARV-FM, licensed to Petersburg, Virginia for approximately $1.0 million.
In February 2001, the Company acquired Nash Communications, which owned WILD-AM,
licensed to Boston, Massachusetts, for approximately $4.5 million and 63,492
shares of Class D Common Stock.
3. RECENT ACCOUNTING PRONOUNCEMENTS:
---------------------------------
The Company adopted Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133),
as amended by SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133" and SFAS
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities" on January 1, 2001. This standard requires the Company to recognize
all derivatives, as defined in the Statement, on the balance sheet at fair
value. Derivatives, or any portion thereof, that are not effective hedges must
be adjusted to fair value through income. If derivatives are effective hedges,
depending on the nature of the hedges, changes in the fair value of the hedged
assets, liabilities or firm commitments must be adjusted through other
comprehensive income, a component of stockholders' equity.
During 2000, the Company entered into swap agreements to reduce exposure to
interest rate fluctuations on certain debt commitments. The Company recorded an
adjustment of approximately $2.6 million, net of an income tax benefit of
approximately $1.2 million on January 1, 2001, to record the liability related
to the fair value of these swap agreements. This amount was recorded as a
cumulative effect of change in accounting principle, which is included as a
component of accumulated comprehensive income adjustments in the accompanying
balance sheet. The Company then recorded a $3.9 million valuation adjustment,
net of an income tax benefit of approximately $1.9 million, to record the swaps
at fair market value as of June 30, 2001. This amount is also recorded as a
component of accumulated comprehensive income adjustments.
In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standard No. 141 (SFAS 141) "Business Combinations",
which is effective for all business combinations initiated after June 30, 2001.
This pronouncement requires all business combinations to be accounted for using
the purchase method and broadens the criteria for recording intangible assets
separate from
10
goodwill. Recorded goodwill and intangibles will be evaluated against this new
criteria and may result in certain intangibles being subsumed into goodwill, or
alternatively, amounts initially recorded as goodwill may be separately
identified and recognized apart from goodwill.
Also, in July 2001, FASB issued Statement of Financial Account Standard No. 142
(SFAS 142) "Goodwill and Other Intangible Assets". This pronouncement requires a
non-amortization approach to account for purchased goodwill and certain other
intangible assets. Under a non-amortization approach, goodwill and certain
intangibles will not be amortized into results of operations, but instead, would
be reviewed for impairment and written down and charged to results of operations
only in the periods in which the recorded value of goodwill and certain
intangibles is more than their fair value. The provisions of each statement,
which apply to goodwill and intangible assets acquired prior to June 30, 2001,
will be adopted by the Company on January 1, 2002. The adoption of these
accounting standards may result in certain of the intangibles being subsumed
into goodwill and would have the impact of reducing the amortization of goodwill
and intangibles commencing January 1, 2002; however, impairment reviews may
result in future periodic write-downs or in write-down upon adoption.
4. DEBT:
-----
In May 2001, the Company sold $300 million of 8-7/8% Senior Subordinated Notes
(Notes) due July 2011, through a private placement offering, receiving net
proceeds of approximately $292 million. There were approximately $7.9 million in
deferred offering costs recorded in connection with the sale, which are being
amortized to interest expense over the life of the Notes using the effective
interest rate method.
The proceeds of the Notes were primarily used to repay amounts owed on the
Company's Bank Credit Facility (Credit Facility) and the entire balance of the
12% Senior Subordinated Notes due 2004 (Former Notes). The Company recognized an
extraordinary loss of $5.2 million, net of income tax benefit of approximately
$2.6 million, in the accompanying consolidated income statement related to the
early retirement of the Former Notes. This loss encompassed the write-off of the
remaining deferred offering costs, underwriter's discount, and prepayment
penalties associated with the Former Notes.
5. STOCKHOLDERS' EQUITY:
---------------------
In April 2001, the Company sold 1.5 million shares of its Class D Common Stock,
at the then fair market value, to its Chief Executive Officer, in exchange for a
full recourse promissory note for the purchase of the shares. This promissory
note has been recorded in the stock subscriptions receivable caption in the
equity section of the accompanying consolidated balance sheet as of June 30,
2001.
Also, in April 2001, the Company granted options to purchase 1.25 million
shares of its Class D Common Stock, at the then fair market value, to its
Chairperson, Chief Executive Officer and Chief Operating Officer.
6. SUBSEQUENT EVENTS:
------------------
In August 2001, the Company completed the acquisition of Blue Chip Broadcasting,
Inc., owner and operator of fifteen radio stations (WIZF-FM, licensed to
Erlanger, Kentucky, WMJM-FM, licensed to Jeffersontown, Kentucky, WDJX-FM and
WULV-FM, licensed to Louisville, Kentucky, WLRS-FM, licensed to Shepherdsville,
Kentucky, WLXO-FM, licensed to Stamping Ground, Kentucky, WGZB-FM, licensed to
Corydon, Indiana, KTTB-FM, licensed to Glencoe, Minnesota, WING-AM, licensed to
Dayton, Ohio, WING-FM, licensed to Springfield, Ohio, WGTZ-FM, licensed to
Eaton, Ohio, WKSW-FM, licensed to Urbana, Ohio, WJYD-FM, licensed to London,
Ohio, WCKX-FM, licensed to Columbus, Ohio, WXMG-
11
FM, licensed to Upper Arlington, Ohio) for approximately $190.0 million in cash,
stock and the retirement of outstanding debt and agreed to LMA one radio
station, WDBZ-AM, licensed to Cincinnati, Ohio. The Company financed this
acquisition with common stock of the Company and cash drawn from its bank credit
facility.
In August 2001, the Company completed the acquisition of three radio stations
(WCDX-FM, licensed to Mechanicsville, Virginia, WRHH-FM (formerly WPLZ-FM) and
WGCV-AM, licensed to Petersburg, Virginia) from Sinclair Telecable, Inc. and one
station WJMO-FM (formerly WJRV-FM), licensed to Richmond, Virginia from
Commonwealth Broadcasting, LLC for approximately $34.0 million.
In August 2001, the Company announced that it had entered into an agreement to
LMA radio station WAMJ-FM (formerly WAWE-FM), licensed to Mableton, Georgia from
Mableton Investment Group, an entity in which one of the Company's principals
has an interest.
In July 2001, the Company sold the assets of WJZZ-AM, licensed to Kingsley,
Michigan, for approximately $225,000.
12
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
--------------------------------------------
The Company conducts a portion of its business through its subsidiaries. All of
the Company's subsidiaries (the Guarantor Subsidiaries) have fully and
unconditionally guaranteed the Company's Credit Facility.
Set forth below are condensed consolidating financial statements for the Company
and the Guarantor Subsidiaries as of December 31, 2000 and June 30, 2001, and
for the three months and six month ended June 30, 2001 and 2000. The equity
method of accounting has been used by the Company to report its investments in
subsidiaries. Separate financial statements for the Guarantor Subsidiaries are
not presented based on management's determination that they do not provide
additional information that is material to investors.
13
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
CONDENSED CONSOLIDATING BALANCE SHEETS
--------------------------------------
AS OF DECEMBER 31, 2000
-----------------------
(IN THOUSANDS)
--------------
Combined
Guarantor Radio One,
Subsidiaries Inc. Eliminations Consolidated
-------------- ---------------- -------------- ----------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 105 $ 20,774 $ -- $ 20,879
Trade accounts receivable, net of allowance for
doubtful accounts 5,100 41,783 -- 46,883
Due from Combined Guarantor Subsidiaries -- 1,667,894 (1,667,894) --
Prepaid expenses and other 234 6,323 -- 6,557
Income tax receivable -- 2,476 -- 2,476
Deferred tax asset 165 2,022 -- 2,187
-------------- ------------ ----------- -------------
Total current assets 5,604 1,741,272 (1,667,894) 78,982
PROPERTY AND EQUIPMENT, net 6,033 27,343 -- 33,376
INTANGIBLE ASSETS, net 1,613,123 24,057 -- 1,637,180
OTHER ASSETS 2,634 13,046 -- 15,680
-------------- ------------ ----------- -------------
Total assets $ 1,627,394 $ 1,805,718 $ (1,667,894) $ 1,765,218
============== ============ ============ =============
LIABILITIES AND STOCKHOLDERS'
-----------------------------
EQUITY
------
CURRENT LIABILITIES:
Accounts payable $ 676 $ 17,007 $ -- $ 17,683
Accrued expenses 1,589 12,538 -- 14,127
Other current liabilities 431 4,265 -- 4,696
Due to the Company 1,667,894 -- (1,667,894) --
-------------- ------------ ----------- -------------
Total current liabilities 1,670,590 33,810 (1,667,894) 36,506
INVESTMENT IN SUBSIDIARIES -- 65,569 (65,569) --
LONG-TERM DEBT AND DEFERRED INTEREST,
net of current portion 28 646,928 -- 646,956
DEFERRED INCOME TAX LIABILITY 22,345 2,342 -- 24,687
-------------- ------------ ----------- -------------
Total liabilities 1,692,963 748,649 (1,733,463) 708,149
-------------- ------------ ----------- -------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock -- 87 -- 87
Stock subscriptions receivable -- (9,005) -- (9,005)
Additional paid-in capital -- 1,105,681 -- 1,105,681
Accumulated deficit (65,569) (39,694) 65,569 (39,694)
-------------- ------------ ----------- -------------
Total stockholders' equity (65,569) 1,057,069 65,569 1,057,069
-------------- ------------ ----------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,627,394 $ 1,805,718 $ (1,667,894) $ 1,765,218
============== ============ ============ =============
14
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
CONDENSED CONSOLIDATING BALANCE SHEETS
--------------------------------------
AS OF JUNE 30, 2001
-------------------
(UNAUDITED, IN THOUSANDS)
-------------------------
Combined
Guarantor Radio One,
Subsidiaries Inc. Eliminations Consolidated
-------------- -------------- -------------- --------------
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 318 $ 9,201 -- $ 9,519
Trade accounts receivable, net of allowance for
doubtful accounts 5,209 44,838 -- 50,047
Due from Combined Guarantor Subsidiaries -- 1,659,736 (1,659,736) --
Prepaid expenses and other 531 4,384 -- 4,915
Income tax receivable -- 2,000 -- 2,000
Deferred tax asset 165 2,311 -- 2,476
-------------- -------------- -------------- --------------
Total current assets 6,223 1,722,470 (1,659,736) 68,957
PROPERTY AND EQUIPMENT, net 5,692 22,081 -- 27,773
INTANGIBLE ASSETS, net 1,557,285 37,447 -- 1,594,732
OTHER ASSETS 2,574 14,686 -- 17,260
-------------- -------------- -------------- --------------
Total assets $ 1,571,774 $ 1,796,684 $ (1,659,736) $ 1,708,722
============== ============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 455 $ 7,506 $ -- $ 7,961
Accrued expenses 1,777 15,660 -- 17,437
Other current liabilities 448 1,654 -- 2,102
Due to the Company 1,659,736 -- (1,659,736) --
-------------- -------------- -------------- --------------
Total current liabilities 1,662,416 24,820 (1,659,736) 27,500
INVESTMENT IN SUBSIDIARIES -- 113,934 (113,934) --
LONG-TERM DEBT AND DEFERRED INTEREST,
net of current portion 7 650,050 -- 650,057
SWAP AGREEMENTS LIABILITY -- 9,733 -- 9,733
DEFERRED INCOME TAX LIABILITY 23,285 (13,226) -- 10,059
-------------- -------------- -------------- --------------
Total liabilities 1,685,708 785,311 (1,773,670) 697,349
-------------- -------------- -------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock -- 89 -- 89
Accumulated comprehensive income
adjustments -- (6,570) -- (6,570)
Stock subscriptions receivable -- (30,110) -- (30,110)
Additional paid-in capital -- 1,127,515 -- 1,127,515
Accumulated deficit (113,934) (79,551) 113,934 (79,551)
-------------- -------------- -------------- --------------
Total stockholders' equity (113,934) 1,011,373 113,934 1,011,373
-------------- -------------- -------------- --------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,571,774 $ 1,796,684 $ (1,659,736) $ 1,708,722
============== ============== ============== ==============
15
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
------------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 2001
--------------------------------------
(UNAUDITED, IN THOUSANDS)
-----------------------
Combined
Guarantor Radio One,
Subsidiaries Inc. Eliminations Consolidated
-------------- -------------- --------------- ---------------
REVENUE:
Broadcast revenue, including barter revenue $ 16,440 $ 108,763 $ -- $ 125,203
Less: agency commissions 1,822 13,171 -- 14,993
-------------- -------------- --------------- ---------------
Net broadcast revenue 14,618 95,592 -- 110,210
-------------- -------------- --------------- ---------------
OPERATING EXPENSES:
Program and technical 2,534 15,473 -- 18,007
Selling, general and administrative 6,639 29,567 -- 36,206
Corporate expenses -- 3,998 -- 3,998
Depreciation and amortization 53,777 8,598 -- 62,375
-------------- -------------- --------------- ---------------
Total operating expenses 62,950 57,636 -- 120,586
-------------- -------------- --------------- ---------------
Broadcast operating (loss) income (48,332) 37,956 -- (10,376)
INTEREST EXPENSE, including amortization of deferred
financing costs 40 30,378 -- 30,418
GAIN ON SALE OF ASSETS, net -- 4,272 -- 4,272
OTHER INCOME (EXPENSE), net 7 (7) -- --
-------------- -------------- --------------- ---------------
(Loss) income before provision for income taxes
and extraordinary loss (48,365) 11,843 -- (36,522)
BENEFIT FOR INCOME TAXES -- 11,942 -- 11,942
EQUITY IN LOSSES OF SUBSIDIARY -- (48,365) 48,365 --
-------------- -------------- --------------- ---------------
NET LOSS BEFORE EXTRAORDINARY LOSS (48,365) (24,580) 48,365 (24,580)
-------------- -------------- --------------- ---------------
EXTRAORDINARY LOSS ON DEBT RETIREMENT, net of taxes -- 5,207 -- 5,207
-------------- -------------- --------------- ---------------
NET LOSS $ (48,365) $ (29,787) $ 48,365 $ (29,787)
============== ============== =============== ===============
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (48,365) $ (39,857) $ (39,857)
============== ============== ===============
16
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
------------------------------------------------
FOR THE THREE MONTHS ENDED JUNE 30, 2001
----------------------------------------
(UNAUDITED, IN THOUSANDS)
-----------------------
Combined
Guarantor Radio One,
Subsidiaries Inc. Eliminations Consolidated
--------------- ------------- --------------- ---------------
REVENUE:
Broadcast revenue, including barter revenue $ 9,572 $ 61,358 $ -- $ 70,930
Less: agency commissions 1,054 7,591 -- 8,645
--------------- ------------- --------------- ---------------
Net broadcast revenue 8,518 53,767 -- 62,285
--------------- ------------- --------------- ---------------
OPERATING EXPENSES:
Program and technical 1,299 7,852 -- 9,151
Selling, general and administrative 3,479 15,611 -- 19,090
Corporate expenses -- 1,920 -- 1,920
Depreciation and amortization 28,015 2,836 -- 30,851
--------------- ------------- --------------- ---------------
Total operating expenses 32,793 28,219 -- 61,012
--------------- ------------- --------------- ---------------
Broadcast operating (loss) income (24,275) 25,548 -- 1,273
INTEREST EXPENSE, including amortization of deferred
financing costs -- 14,717 -- 14,717
GAIN ON SALE OF ASSETS, net -- -- -- --
OTHER INCOME (EXPENSE), net 3 (599) -- (596)
--------------- ------------- --------------- ---------------
(Loss) income before provision for income taxes
and extraordinary loss (24,272) 10,232 -- (14,040)
BENEFIT FOR INCOME TAXES -- 4,633 -- 4,633
EQUITY IN LOSSES OF SUBSIDIARIES -- (24,272) 24,272 --
--------------- ------------- --------------- ---------------
NET LOSS BEFORE EXTAORDINARY LOSS (24,272) (9,407) 24,272 (9,407)
--------------- ------------- --------------- ---------------
EXTRAORDINARY LOSS ON DEBT RETIREMENT, net of taxes -- 5,207 -- 5,207
--------------- ------------- --------------- ---------------
NET LOSS $ (24,272) $ (14,614) $ 24,272 $ (14,614)
=============== ============= =============== ===============
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (24,272) $ (19,646) $ (19,646)
=============== ============= ===============
17
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
------------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 2000
--------------------------------------
(UNAUDITED, IN THOUSANDS)
-----------------------
Combined
Guarantor Radio One,
Subsidiaries Inc. Eliminations Consolidated
--------------- --------------- --------------- ---------------
REVENUE:
Broadcast revenue, including barter revenue $ 14,190 $ 48,165 $ -- $ 62,355
Less: agency commissions 1,669 5,891 -- 7,560
--------------- --------------- --------------- ---------------
Net broadcast revenue 12,521 42,274 -- 54,795
--------------- --------------- --------------- ---------------
OPERATING EXPENSES:
Program and technical 2,283 6,654 -- 8,937
Selling, general and administrative 4,969 14,822 -- 19,791
Corporate expenses -- 2,400 -- 2,400
Depreciation and amortization 10,328 2,343 -- 12,671
--------------- --------------- --------------- ---------------
Total operating expenses 17,580 26,219 -- 43,799
--------------- --------------- --------------- ---------------
Broadcast operating (loss) income (5,059) 16,055 -- 10,996
INTEREST EXPENSE, including amortization of deferred
financing costs -- 7,247 -- 7,247
OTHER INCOME, net 7 9,700 -- 9,707
--------------- --------------- --------------- ---------------
(Loss) income before provision for income taxes
and extraordinary loss (5,052) 18,508 -- 13,456
PROVISION FOR INCOME TAXES -- (5,818) -- (5,818)
EQUITY IN LOSSES OF SUBSIDIARIES -- (5,052) 5,052 --
--------------- --------------- --------------- ---------------
NET (LOSS) INCOME $ (5,052) $ 7,638 $ 5,052 $ 7,638
=============== =============== =============== ===============
NET (LOSS) INCOME APPLICABLE TO COMMON STOCKHOLDERS $ (5,052) $ 7,638 $ 7,638
=============== =============== ===============
18
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
------------------------------------------------
FOR THE THREE MONTHS ENDED JUNE 30, 2000
----------------------------------------
(UNAUDITED, IN THOUSANDS)
-----------------------
Combined
Guarantor Radio One,
Subsidiaries Inc. Eliminations Consolidated
--------------- --------------- --------------- ---------------
REVENUE:
Broadcast revenue, including barter revenue $ 8,568 $ 28,663 $ -- $ 37,231
Less: agency commissions 1,015 3,573 -- 4,588
--------------- --------------- --------------- ---------------
Net broadcast revenue 7,553 25,090 -- 32,643
--------------- --------------- --------------- ---------------
OPERATING EXPENSES:
Program and technical 1,159 3,538 -- 4,697
Selling, general and administrative 2,992 8,500 -- 11,492
Corporate expenses -- 1,282 -- 1,282
Depreciation and amortization 5,984 1,198 -- 7,182
--------------- --------------- --------------- ---------------
Total operating expenses 10,135 14,518 -- 24,653
--------------- --------------- --------------- ---------------
Broadcast operating (loss) income (2,582) 10,572 -- 7,990
INTEREST EXPENSE, including amortization of deferred
financing costs -- 3,665 -- 3,665
OTHER INCOME, net 4 5,466 -- 5,470
--------------- --------------- --------------- ---------------
(Loss) income before provision for income taxes
and extraordinary loss (2,578) 12,373 -- 9,795
PROVISION FOR INCOME TAXES -- (4,218) -- (4,218)
EQUITY IN LOSSES OF SUBSIDIARIES -- (2,578) 2,578 --
--------------- --------------- --------------- ---------------
NET (LOSS) INCOME $ (2,578) $ 5,577 $ 2,578 $ 5,577
=============== =============== =============== ===============
NET (LOSS) INCOME APPLICABLE TO COMMON STOCKHOLDERS $ (2,578) $ 5,577 $ 5,577
=============== =============== ===============
19
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATING STATEMENTS OF CASH FLOWS
--------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 2001
--------------------------------------
(UNAUDITED, IN THOUSANDS)
-----------------------
Combined
Guarantor Radio One,
Subsidiaries Inc. Eliminations Consolidated
-------------- ------------- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (48,365) $ (29,787) $ 48,365 $ (29,787)
Adjustments to reconcile net (loss) income to net
cash from operating activities:
Depreciation and amortization 53,777 8,598 -- 62,375
Amortization of debt financing costs, unamortized
discount and deferred interest -- 1,016 -- 1,016
Deferred income taxes 940 (14,461) -- (13,521)
Non-cash compensation to officer -- 475 -- 475
Loss on write-off of investments -- 1,206 -- 1,206
Gain on sale of assets, net -- (4,272) -- (4,272)
Extraordinary loss on debt retirement, net of taxes -- 7,771 -- 7,771
Effect of change in operating assets and
liabilities-
Trade accounts receivable (109) (3,046) -- (3,155)
Due to Corporate/from Subsidiaries (5,530) 5,530 -- --
Income tax receivable -- 476 -- 476
Prepaid expenses and other (297) 72 -- (225)
Other assets 60 (1,262) -- (1,202)
Accounts payable (221) (9,501) -- (9,722)
Accrued expenses and other 184 2,451 -- 2,635
-------------- ------------- ------------- -------------
Net cash flows from operating activities 439 (34,734) 48,365 14,070
-------------- ------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (226) (2,614) -- (2,840)
Investment in subsidiaries -- 48,365 (48,365) --
Equity investments -- (210) -- (210)
Proceeds from sale of assets, net -- 69,254 -- 69,254
Deposits and payments for station purchases -- (70,286) -- (70,286)
-------------- ------------- ------------- -------------
Net cash flows from investing activities (226) 44,509 (48,365) (4,082)
-------------- ------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt -- (303,648) -- (303,648)
Proceeds from debt issuances -- 300,000 -- 300,000
Payment of preferred stock issuance costs -- (9) -- (9)
Payment of preferred stock dividends -- (10,070) -- (10,070)
Deferred financing costs -- (7,861) -- (7,861)
Proceeds from exercise of stock options -- 240 -- 240
-------------- ------------- ------------- -------------
Net cash flows from financing activities -- (21,348) -- (21,348)
-------------- ------------- ------------- -------------
INCREASE IN CASH AND CASH EQUIVALENTS 213 (11,573) -- (11,360)
CASH AND CASH EQUIVALENTS, beginning of period 105 20,774 -- 20,879
-------------- ------------- ------------- -------------
CASH AND CASH EQUIVALENTS, end of period $ 318 $ 9,201 $ -- $ 9,519
============== ============= ============= =============
20
RADIO ONE, INC. AND SUBSIDIARIES
--------------------------------
CONSOLIDATING STATEMENTS OF CASH FLOWS
--------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 2000
--------------------------------------
(UNAUDITED, IN THOUSANDS)
-----------------------
Combined
Guarantor
Subsidiaries Radio One, Inc. Eliminations Consolidated
------------- --------------- -------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (5,052) $ 7,638 $ 5,052 $ 7,638
Adjustments to reconcile net (loss) income to net cash
from operating activities:
Depreciation and amortization 10,924 1,747 -- 12,671
Amortization of debt financing costs, unamortized
discount and deferred interest -- 2,014 -- 2,014
Deferred income taxes and reduction in valuation
reserve on deferred taxes -- (244) -- (244)
Loss on sale of investments -- 225 -- 225
Non-cash advertising revenue in exchange for equity
investments -- (658) -- (658)
Effect of change in operating assets and liabilities-
Trade accounts receivable (183) (5,115) -- (5,298)
Due to corporate/from subsidiaries (5,714) 5,714 -- --
Prepaid expenses and other (50) (256) -- (306)
Other assets 11 210 -- 221
Accounts payable 25 1,085 -- 1,110
Accrued expenses and other 105 1,412 -- 1,517
------------- --------------- -------------- ------------
Net cash flows from operating activities 66 13,772 5,052 18,890
------------- --------------- -------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment -- (1,397) -- (1,397)
Investment in subsidiary -- 5,052 (5,052) --
Equity investments -- (884) -- (884)
Proceeds from sale of available-for-sale investments, net -- 51,114 -- 51,114
Deposits and payments for station purchases -- (262,244) -- (262,244)
------------- --------------- -------------- ------------
Net cash flows from investing activities (208,359) (5,052) (213,411)
------------- --------------- -------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt -- (32) -- (32)
Proceeds from issuance of common stock, net of issuance
costs -- 335,982 -- 335,982
Proceeds from exercise of stock options -- 433 -- 433
------------- --------------- -------------- ------------
Net cash flows from financing activities -- 336,383 -- 336,383
------------- --------------- -------------- ------------
INCREASE IN CASH AND CASH EQUIVALENTS 66 141,796 -- 141,862
CASH AND CASH EQUIVALENTS, beginning of period 31 6,190 -- 6,221
------------- --------------- -------------- ------------
CASH AND CASH EQUIVALENTS, end of period $ 97 $ 147,986 $ -- $ 148,083
============= =============== ============== ============
21
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 contained in the Company's Annual Report on Form 10-K/A for the year
ended December 31, 2000.
RESULTS OF OPERATIONS
---------------------
Comparison of periods ended June 30, 2000 to the periods ended June 30, 2001
(all periods are unaudited - all numbers in 000s except per share data).
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2000 2001 2000 2001
------------- ------------- --------------- --------------
STATEMENT OF OPERATIONS DATA:
REVENUE:
Broadcast revenue $ 37,231 $ 70,930 $ 62,355 $ 125,203
Less: Agency commissions 4,588 8,645 7,560 14,993
------------- ------------- --------------- --------------
Net broadcast revenue 32,643 62,285 54,795 110,210
------------- ------------- --------------- --------------
OPERATING EXPENSES:
Programming and technical 4,697 9,151 8,937 18,007
Selling, G&A 11,492 19,090 19,791 36,206
Corporate expenses 1,282 1,683 2,400 3,523
Non-cash compensation - 237 - 475
Depreciation & amortization 7,182 30,851 12,671 62,375
------------- ------------- --------------- --------------
Total operating expenses 24,653 61,012 43,799 120,586
------------- ------------- --------------- --------------
Operating income (loss) 7,990 1,273 10,996 (10,376)
INTEREST EXPENSE 3,665 14,717 7,247 30,418
GAIN ON SALE OF ASSETS, net - - - 4,272
OTHER INCOME (EXPENSE), net 5,470 (596) 9,707 -
------------- ------------- --------------- --------------
Income (loss) before provision 9,795 (14,040) 13,456 (36,522)
(benefit) for income taxes
PROVISION (BENEFIT) FOR
INCOME TAXES 4,218 (4,633) 5,818 (11,942)
------------- ------------- --------------- --------------
Net income (loss) before 5,577 (9,407) 7,638 (24,580)
extraordinary item
EXTRAORDINARY LOSS ON DEBT RETIREMENT, net of
taxes - 5,207 - 5,207
------------- ------------- --------------- --------------
Net income (loss) $ 5,577 $ (14,614) $ 7,638 $ (29,787)
============= ============= =============== ==============
Net income (loss) applicable to
common shareholders $ 5,577 $ (19,646) $ 7,638 $ (39,857)
============= ============= =============== ==============
22
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
2000 2001 2000 2001
------------ ------------ ---------- ----------
BASIC AND DILUTED PER SHARE DATA:
Net income (loss) before extraordinary item
per share $ 0.07 $ (0.11) $ 0.09 $ (0.28)
Extraordinary item per share -- (0.06) -- (0.06)
Net income (loss) per share 0.07 (0.17) 0.09 (0.34)
Net income (loss) per share before
extraordinary item applicable to common
shareholders $ 0.07 $ (0.16) $ 0.09 $ (0.40)
Extraordinary item per share -- (0.06) -- (0.06)
Net income (loss) per share applicable to
common shareholders 0.07 (0.22) 0.09 (0.46)
OTHER DATA:
Broadcast cash flow (a) $ 16,454 $ 34,044 $ 26,067 $ 55,997
Broadcast cash flow margin 50.4% 54.7% 47.6% 50.8%
EBITDA (b) $ 15,172 $ 32,361 $ 23,667 $ 52,474
EBITDA margin 46.5% 52.0% 43.2% 47.6%
After-tax cash flow (c) $ 12,277 $ 13,963 $ 19,726 $ 16,078
Capital expenditures 829 1,189 1,397 2,840
Weighted average shares outstanding -
basic (d) 84,994 88,252 83,038 87,532
Weighted average shares outstanding - 85,256 88,917 83,316 88,036
diluted (e)
SAME STATION RESULTS (f):
Net revenue $ 32,618 $ 34,036 $ 54,770 $ 57,239
Broadcast cash flow 16,428 18,501 26,041 28,798
Broadcast cash flow margin 50.4% 54.4% 47.5% 50.3%
Net broadcast revenue increased to approximately $62.3 million for the quarter
ended June 30, 2001 from approximately $32.6 million for the quarter ended June
30, 2000 or 91%. Net broadcast revenue increased to approximately $110.2 million
for the six months ended June 30, 2001 from approximately $54.8 million for the
six months ended June 30, 2000 or 101%. These increases in net broadcast revenue
were the result of continuing broadcast revenue growth in many 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. Additional
revenue gains of approximately $23.5 million and $45.0 million for the quarter
and six months ended June 30, 2001, respectively, were derived from the
Company's 2000 acquisition of radio stations from Clear Channel Communications
and AMFM.
Operating expenses excluding depreciation, amortization and non-cash
compensation increased to approximately $29.9 million for the quarter ended June
30, 2001 from approximately $17.5 million for the quarter ended June 30, 2000 or
71%. Operating expenses excluding depreciation, amortization and non-cash
compensation increased to approximately $57.7 million for the six months ended
June 30, 2001 from approximately $31.1 million for the six months ended June 30,
2000 or 86%. These increases in expenses
23
were 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 as well
as higher costs associated with operating as a public company.
Broadcast operating income was approximately $1.3 million for the
quarter ended June 30, 2001 compared to broadcast operating income of $8.0
million for the quarter ended June 30, 2000. Broadcast operating loss was
approximately $10.4 million for the six months ended June 30, 2001 compared to
the broadcast operating income of $11 million for the quarter ended June 30,
2000. These decreases in net broadcast operating income were attributable to
higher revenue as described above more than offset by higher depreciation and
amortization expenses associated with the Company's several acquisitions made in
2000 and 2001.
Interest expense increased to approximately $14.7 million for the
quarter ended June 30, 2001 from approximately $3.7 million for the quarter
ended June 30, 2000 or 297%. Interest expense increased to approximately $30.4
million for the six months ended June 30, 2001 from approximately $7.2 million
for the six months ended June 30, 2000 or 322%. These increases relate primarily
to borrowings associated with the acquisition of radio stations from Clear
Channel Communications and AMFM.
Other (expense) income was approximately $(0.6) million for the quarter
ended June 30, 2001 compared to approximately $5.5 million for the quarter ended
June 30, 2000. This change was the result of an approximately $1.2 million
write-down of the Company's investment in NetNoir, Inc. partially offset by
interest income. Other income decreased to zero for the six months ended June
30, 2001 from approximately $9.7 million for the six months ended June 30, 2000.
This decrease was due to the Company having normalized cash balance levels
during the first half of 2001 as compared to high cash and investment balances
resulting from its follow-on equity offerings in November 1999 and March 2000
completed in anticipation of the acquisition of radio stations from Clear
Channel Communications and AMFM, which was consummated in August 2000.
(Loss) income before provision for income taxes was approximately
$(14.0) million for the quarter ended June 30, 2001 compared to approximately
$9.8 million for the quarter ended June 30, 2000. (Loss) income before provision
for income taxes was approximately $(36.5) million for the six months ended June
30, 2001 compared to approximately $13.5 million for the six months ended June
30, 2000. These changes were due to lower operating income due to higher
non-cash charges and higher interest expense due to higher levels of debt
outstanding as outlined above.
Net (loss) income was approximately $(14.6) million for the quarter
ended June 30, 2001 compared to $5.6 million for the quarter ended June 30,
2000. Net (loss) income was approximately $(29.8) million for the six months
ended June 30, 2001 compared to approximately $7.6 million for the six months
ended June 30, 2000. These changes were due to the (loss) before provision for
income taxes versus income before provision for income taxes in the previous
year's periods as well as an extraordinary charge in conjunction with the
Company's refinancing of its 12% Senior Subordinated Notes with a new offering
of 8-7/8% Senior Subordinated Notes in May 2001, partially offset by a tax
benefit compared to a tax provision during last year's periods.
Broadcast cash flow increased to approximately $34.0 million for the
quarter ended June 30, 2001 from approximately $16.5 million for the quarter
ended June 30, 2000 or 106%. Broadcast cash flow increased to approximately
$56.0 million for the six months ended June 30, 2001 from approximately $26.1
million for the six months ended June 30, 2000 or 115%. These increases were
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 non-cash compensation expense, increased to
approximately $32.4 million for the quarter ended June 30, 2001 from
24
approximately $15.2 million for the quarter ended June 30, 2000 or 113%.
Earnings before interest, taxes, depreciation, and amortization (EBITDA), and
excluding non-cash compensation expense, increased to approximately $52.5
million for the six months ended June 30, 2001 from approximately $23.7 million
for the six months ended June 30, 2000 or 122%. These increases were
attributable to the increase in broadcast revenue partially offset by higher
operating expenses and higher corporate expenses associated with the costs of
operating as a public company.
The table above includes information regarding broadcast cash flow, EBITDA,
and after-tax cash flow. Broadcast cash flow, EBITDA, and after-tax cash flow
are not measures of performance or liquidity calculated in accordance with GAAP,
however we believe that these measures are useful to an investor in evaluating
the Company because these measures are widely used in the broadcast industry as
a measure of a radio broadcasting company's performance. Nevertheless, broadcast
cash flow, EBITDA and after-tax cash flow should not be considered in isolation
from or as a substitute for net income, cash flows from operating activities and
other income or cash flow statement data prepared in accordance with GAAP, or as
a measure of profitability or liquidity. Moreover, because broadcast cash flow,
EBITDA and after-tax cash flow are not measures calculated in accordance with
GAAP, these performance measures are not necessarily comparable to similarly
titled measures employed by other companies.
(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, non-cash interest expense and non-cash loss/(gain) on
investments, less the current income tax liability/(benefit) and preferred
stock dividends.
(d) As of June 30, 2001 the Company had 88,252,000 shares of Common Stock
outstanding on a weighted average basis for the quarter.
(e) As of June 30, 2001 the Company had 88,917,000 shares of Common Stock
outstanding on a weighted average basis for the quarter, diluted for
outstanding stock options.
(f) Same station results include results only for those stations owned and/or
operated by the Company for the full one-year period in question.
25
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's primary source of liquidity is cash provided by
operations and, to the extent necessary, commitments available under the
Company's Credit Facility. The Credit Facility contains covenants limiting the
Company's ability to incur additional debt and additional liens, make dividends
and other payments with respect to the Company's equity securities, make new
investments and sell assets. The Credit Facility also requires compliance with
financial tests based on financial position and results of operations, including
a leverage ratio, an interest coverage ratio and a fixed charge coverage ratio,
all of which could effectively limit the Company's ability to borrow or
otherwise raise funds in the credit and capital markets.
The Company has used, and may continue to use, a significant portion of
the Company's capital resources to consummate acquisitions. These acquisitions
were or will be funded from (i) the Company's Credit Facility (ii) the proceeds
of the historical offerings of the Company's common stock and preferred stock,
(iii) the proceeds of future common and /or preferred stock, and /or debt
offerings, and (iv) internally generated cash flow.
The Company's balance of cash and cash equivalents was approximately
$20.9 million as of December 31, 2000. The Company's balance of cash and cash
equivalents was approximately $9.5 million as of June 30, 2001. This decrease
resulted primarily from preferred dividend and credit facility payments, escrow
deposits on the acquisitions of Blue Chip Broadcasting, Inc. and radio station
WPEZ-FM, and operating activities during the six months of 2001. The Company has
entered into a bank credit facility under which the Company has borrowed $350.0
million in term loans and may borrow up to $250.0 million on a revolving basis,
and which the Company has historically drawn down as capital was required,
primarily for acquisitions. As of June 30, 2001, the Company had $250.0 million
available to be drawn.
Net cash flows from operating activities decreased to approximately
$14.1 million for the six months ended June 30, 2001 from approximately $18.9
million for the six months ended June 30, 2000 or 25%. This decrease was due to
lower net income, increased deferred income taxes, higher trade accounts
receivable and lower accounts payable partially offset by an extraordinary loss
associated with the Company's retirement of the 12% Senior Subordinated Notes
and higher depreciation and amortization charges. Non-cash expenses of
depreciation and amortization increased to approximately $62.4 million for the
six months ended June 30, 2001 from approximately $12.7 million for the six
months ended June 30, 2000 or 391% due primarily to acquisitions in 2000,
particularly the acquisition of stations from Clear Channel Communications and
AMFM.
Net cash flows from investing activities decreased to approximately
$4.1 million for the six months ended June 30, 2001 compared to an approximately
$213.0 million decrease for the six months ended June 30, 2000. During the six
months ended June 30, 2001 the Company acquired Nash Communications, which owned
and operated WILD-AM, in the Boston, Massachusetts market, for approximately
$5.0 million. The Company acquired WTLC-AM and the intellectual property of
WTLC-FM, in the Indianapolis, Indiana market for approximately $8.2 million. The
Company also acquired KTXQ-FM (formerly KDGE-FM), in the Dallas, Texas market
for approximately $52.5 million. Also during the six months ended June 30, 2001
the Company completed the sale of KJOI-AM (formerly KLUV-AM) in Dallas, Texas,
for approximately $16.0 million. The Company also completed the sale of WDYL-FM
in Richmond, Virginia, and two radio stations, WJMZ-FM and WPEK-FM, in the
Greenville, South Carolina market for approximately $52.5 million and WARV-FM in
the Richmond, Virginia market for approximately $1.0 million. The Company also
made escrow deposits of $5.0 million for the acquisition of Blue Chip
Broadcasting, Inc. and $2.8 million on the anticipated acquisition of WPEZ-FM,
which is in the process of being moved to the Atlanta, Georgia market. During
the six months ended June 30, 2001, the Company made purchases of capital
equipment totaling approximately $2.8 million. During the six months ended June
30, 2000, the Company acquired WPLY-FM in the Philadelphia, Pennsylvania market
for approximately $80.0 million. The Company also acquired Davis Broadcasting,
Inc., owner and operator of six radio stations in the Charlotte, North Carolina
26
and Augusta, Georgia markets for approximately $24.2 million, and three radio
stations and one low power television station in the Indianapolis, Indiana
market for approximately $40.0 million. The Company also made an escrow deposit
of approximately $130.3 million for the August 2000 acquisition of 12 radio
stations from Clear Channel Communications and AMFM.
Net cash flows for financing activities decreased to approximately $21.3
million for the six months ended June 30, 2001 compared to an increase of
approximately $336.4 million for the six months ended June 30, 2000. The
decrease in 2001 was primarily driven by debt repayment and preferred stock
dividend payments. The Company completed the sale of $300.0 million of 8-7/8%
Subordinated Notes due July 2011 in May 2001. The proceeds from the notes were
used to repay $200.0 million of the Company's Credit Facility and also redeem
the Company's 12% Senior Subordinated Notes due 2004 (Former Notes). In
addition, the Company paid approximately $10.0 million in preferred stock
dividends. During the six months ended June 30, 2000, the Company had completed
a public offering of common stock that raised net proceeds of approximately
$336.0 million. Most of the proceeds were used to fund the Company's
acquisitions in 2000.
As a result of the aforementioned, cash and cash equivalents decreased by
$11.4 million during the six months ended June 30, 2001 compared to an increase
of approximately $141.9 million during the six months ended June 30, 2000.
In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141 (SFAS 141) "Business
Combinations" and No. 142 (SFAS 142) "Goodwill and Other Intangible Assets".
SFAS 141 requires all business combinations to be accounted for using the
purchase method. SFAS 142 requires a non-amortization approach to account for
purchased goodwill and certain intangibles. Under a non-amortization approach,
goodwill and certain intangibles will not be amortized into results of
operation, but instead, would be reviewed for impairment and written down and
charged to results of operations only in the periods in which the carrying value
of goodwill and certain intangibles is more than its fair value. The Company
will adopt the provisions of these two statements on January 1, 2002. The
adoption of these pronouncements may result in the reduction of amortization of
goodwill and intangibles. Management has not quantified the impact of these
statements on the statement of operations.
This discussion 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.
27
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.
Item 2. Changes in Securities and Use of Proceeds
In April 2001, the Company sold to Alfred C. Liggins, III, its Chief
Executive Officer, 1.5 million unregistered shares of the Company's Class D
Common Stock. These shares were issued pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act of 1933.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On June 5, 2001, the Company held the Annual Meeting of its holders of
Common Stock pursuant to a Notice of Annual Meeting of Stockholders and Proxy
Statement dated April 24, 2001, a copy of which has been filed previously with
the Securities and Exchange Commission. Stockholders were asked to vote upon the
following proposals:
1. The election of Brian W. McNeill and Terry L. Jones as Class A
directors to serve until the 2002 annual meeting of Stockholders
or until their successors are duly elected and qualified.
2. The election of Catherine L. Hughes, Alfred C. Liggins, III,
Larry D. Marcus, D. Geoffrey Armstrong, and L. Ross Love as
directors to serve until the 2002 annual meeting of Stockholders
or until their successors are duly elected and qualified.
3. The amendment of the Company's Amended and Restated Bylaws to
permit the filling of vacancies on the Board of Directors by
majority vote of the Stockholders or the Board of Directors.
4. The ratification of the amendment to the 1999 Option and
Restricted Stock Grant Plan increasing the number of shares of
class D common stock reserved for issuance under the Plan from
2,816,198 shares to 3,816,198 shares.
5. The ratification of the appointment of Arthur Andersen LLP as
independent public accountants for the Company for the fiscal
year ended December 31, 2001.
28
All proposals were adopted by a majority of the holders of Common
Stock. The results of the vote tabulation were as follows:
NUMBER OF VOTES
---------------
Class A Class B
------- -------
PROPOSAL 1
----------
McNeill
For 20,447,132 N/A
Withhold Authority 130,276 N/A
Jones
For 20,447,132 N/A
Withhold Authority 130,276 N/A
PROPOSAL 2
----------
Hughes
For 17,140,430 28,618,430
Withhold Authority 3,436,978 N/A
Liggins
For 17,140,430 28,618,430
Withhold Authority 3,436,978 0
Marcus
For 20,447,432 28,618,430
Withhold Authority 129,976 0
Armstrong
For 20,447,432 28,618,430
Withhold Authority 129,976 0
Love
For 20,441,782 28,618,430
Withhold Authority 135,626 0
29
Class A Class B
------- -------
PROPOSAL 3
----------
For 17,037,235 28,618,430
Against 2,137,060 0
Abstain 3,679 0
Broker Non-Votes 1,399,434 0
PROPOSAL 4
----------
For 11,210,688 28,618,430
Against 9,338,357 0
Abstain 28,363 0
PROPOSAL 5
----------
For 16,447,132 28,618,430
Against 4,128,249 0
Abstain 2,026 0
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) 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 (incorporated by reference to
Radio One's Quarterly Report on Form 10-Q for the period
ended March 31, 2000 (File No. 000-25969; Film No. 631638)).
3.1.1 Certificate of Amendment (dated as of September 21, 2000) of
the Amended and Restated Certificate of Incorporation of
Radio One, Inc. (dated as of May 4, 2000), as filed with the
State of Delaware on September 21, 2000 (incorporated by
reference to Radio One's Current Report on Form 8-K filed
October 6, 2000 (File No. 000-25969; Film No. 736375)).
3.2 Amended and Restated By-laws of Radio One, Inc., amended as
of June 5, 2001.
3.3 Certificate Of Designations, Rights and Preferences of the
6 1/2% Convertible
30
Preferred Securities Remarketable Term Income Deferrable Equity
Securities (HIGH TIDES) of Radio One, Inc., as filed with the State of
Delaware on July 13, 2000 (incorporated by reference to Radio One's
Quarterly Report on Form 10-Q for the period ended June 30, 2000 (File
No. 000-25969; Film No. 698190)).
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)).
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)).
4.10 Registration Rights Agreement, dated as of July 14, 2000, by and among
Radio One, Inc., and Credit Suisse First Boston Corporation, Deutsche
Bank Securities Inc., Morgan Stanley & Co. Incorporated, Bank of
America Securities LLC, and First Union Securities, Inc., as the
Initial Purchasers of Radio One, Inc.'s 6 1/2% Convertible Preferred
Securities Remarketable Term Income Deferrable Equity Securities (HIGH
TIDES) (incorporated by reference to Radio One's Quarterly Report on
Form 10-Q for the period ended June 30, 2000 (File No. 000-25969; Film
No. 698190)).
4.11 Remarketing Agreement, dated as of July 14, 2000, by and among Radio
One, Inc., American Stock Transfer & Trust Co., as Tender Agent and
Credit Suisse First Boston Corporation, as Remarketing Agent, for
Radio One, Inc.'s 6 1/2% Convertible Preferred Securities Remarketable
Term Income Deferrable Equity Securities (HIGH TIDES) (incorporated by
reference to Radio One's Quarterly Report on Form 10-Q for the period
ended June 30, 2000 (File No. 000-25969; Film No. 698190)).
31
4.12 Global Security Certificate for Radio One, Inc.'s 6 1/2% Convertible
Preferred Securities Remarketable Term Income Deferrable Equity
Securities (HIGH TIDES) (incorporated by reference to Radio One's
Quarterly Report on Form 10-Q for the period ended June 30, 2000 (File
No. 000-25969; Film No. 698190)).
4.13 Registration Rights Agreement, dated February 7, 2001, by and between
Radio One, Inc. and certain stockholders of Blue Chip Broadcasting,
Inc. listed therein (incorporated by reference to Exhibit 4.1 of Radio
One's Current Report on Form 8-K filed February 8, 2001 (File No.
000-25969; Film No. 1528282)).
4.14 Indenture dated May 18, 2001 among Radio One, Inc., the Guarantors
listed therein, and United States Trust Company of New York
(incorporated by reference to Radio One's Registration Statement on
Form S-4, filed July 17, 2001 (File No. 333-65278; Film No. 1683373)).
4.15 Form of 8-7/8% Senior Subordinated Notes, due 2011 governed by the
Indenture dated May 18, 2001 (incorporated by reference to Radio One's
Registration Statement on Form S-4, filed July 17, 2001 (File No.
333-65278; Film No. 1683373).
4.16 Registration Rights Agreement dated May 18, 2001 among Radio One,
Inc., the Guarantors, Banc of America Securities LLC, Credit Suisse
First Boston Corporation, Deutsche Banc Alex. Brown Inc., Blaylock &
Partners, L.P., First Union Securities, Inc., Morgan Stanley & Co.
Incorporated and TD Securities (USA) Inc. (incorporated by reference
to Radio One's Registration Statement on Form S-4, filed July 17, 2001
(File No. 333-65278; Film No. 1683373)).
10.65 Asset Purchase Agreement dated June 21, 2001 between Radio One, Inc.
and U.S. Broadcasting Limited Partnership.
10.66 Employment Agreement dated April 9, 2001 between Radio One, Inc.
and Alfred C. Liggins, III.
(b) REPORTS ON FORM 8-K
The Company filed a Form 8-K/A dated April 9, 2001 to amend its Form
8-K filed on February 8, 2001. The Company added the Financial Statements of the
Business Acquired required by Item 7(a) and the Pro Forma Financial Information
required by Item 7(b).
The Company filed a Form 8-K dated April 18, 2001 for the purpose of
(i) disclosing its intention to sell $300 million of ten year subordinated
notes, and (ii) updating its revenue and broadcast cash flow guidance for its
fiscal year ending December 31, 2001.
The Company filed a Form 8-K dated May 4, 2001 for the purpose of (i)
releasing its results of operations for the first quarter of 2001, and (ii)
disclosing its sale of $300 million in 8-7/8% senior subordinated notes due July
2011.
The Company filed a Form 8-K dated May 16, 2001 disclosing its updated
guidance for interest expense and shares outstanding for the second quarter of
its fiscal year ending December 31, 2001.
32
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.
/s/ Scott R. Royster
----------------------------------------------------
August 14, 2001 Scott R. Royster
Executive Vice President and Chief Financial Officer
(Principal Accounting Officer)
33