Exhibit 99.1
NEWS RELEASE
November 6, 2001 Contact: Scott R. Royster, Chief Financial Officer
FOR IMMEDIATE RELEASE (301) 429-2642
Washington, DC
RADIO ONE, INC.
REPORTS RECORD RESULTS FOR ITS THIRD QUARTER OF 2001
Same Station Net Revenue Increases 7%
Same Station Broadcast Cash Flow Increases 7%
After-Tax Cash Flow of $0.13 per share
Company Achieves Highest Quarterly
Revenue and BCF in its History
Washington, DC: - Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported record
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results for the quarter ended September 30, 2001. Net broadcast revenue was
$66.2 million, up 54% from the same period in 2000. Broadcast cash flow was
$34.4 million, an increase of 54% from the same period in 2000. For the quarter,
the Company achieved a BCF margin of 52.0%, flat from last year's level.
After-tax cash flow was $12.2 million or $0.13 cents per share. On a same
station basis the Company's net broadcast revenue and broadcast cash flow each
increased 7% from last year.
Alfred C. Liggins, III, the Company's CEO and President stated, "Despite the
tragedies of September 11 and the ongoing national crisis, we actually managed
to post surprisingly strong results for the quarter. This was due partly to what
were fairly strong results in the months of July and August, only partially
offset by a weak September. However, even with the events of September 11, we
were relatively immune to a major direct hit to our business because of our not
having a station presence in New York, owning relatively few news stations (and
no sports stations) and having a diverse geographic presence. We certainly
realized numerous cancellations after September 11, in line with the rest of the
radio industry, but we have been able to manage through those problems without
any material disruptions. The similar rate of growth for revenue and BCF on a
same station basis is not in keeping with our operating philosophy but was due
to maintaining our cost structure in the second half of September, despite the
declines in revenue, as well as investments in programming and marketing in
several markets which continue to pay off in the form of higher ratings at many
of our radio stations. Our hearts and prayers continue to go out to all
Americans who are suffering from these attacks on our nation. We are proud of
our listeners, radio stations, employees and other friends who have come to the
support of those in need over the past seven weeks. We will continue to work in
our communities to help rebuild the spirit of America."
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PAGE 2 -- RADIO ONE, INC. REPORTS RECORD THIRD QUARTER RESULTS
For the year-to-date period ending September 30, 2001, net broadcast revenue was
$176.4 million, up 81% from the same period in 2000. Broadcast cash flow was
$90.4 million, an increase of 87% from the same period in 2000 while the
broadcast cash flow margin improved to 51.3% from 49.5%. After-tax cash flow was
$28.3 million or $0.32 cents per share.
RESULTS OF OPERATIONS
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Comparison of periods ended September 30, 2001 to the
periods ended September 30, 2000 (all periods
are unaudited - all numbers in 000s except per
share data).
Three Three months Nine months Nine months
months ended ended ended ended
September September September September
30, 2001 30, 2000 30, 2001 30, 2000
------------- --------------- -------------- -------------
STATEMENT OF OPERATIONS DATA:
REVENUE:
Broadcast revenue $ 75,033 $ 48,914 $ 200,236 $ 111,269
Less: Agency commissions 8,827 6,028 23,820 13,588
----------- -------------- ------------- -----------
Net broadcast revenue 66,206 42,886 176,416 97,681
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OPERATING EXPENSES:
Programming and technical 10,531 6,404 28,538 15,341
Selling, G&A 21,238 14,167 57,444 33,958
Corporate expenses 2,353 1,825 5,876 4,225
Stock-based compensation 238 - 713 -
Depreciation & amortization 31,662 17,726 94,037 30,397
----------- -------------- ------------- -----------
Total operating expenses 66,022 40,122 186,608 83,921
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Operating income (loss) 184 2,764 (10,192) 13,760
INTEREST EXPENSE 15,993 8,970 46,411 16,217
(LOSS) GAIN ON SALE OF INVESTMENT (44) - 4,228 -
OTHER INCOME, net 630 9,735 630 19,442
----------- -------------- ------------- -----------
(Loss) income before
(benefit) provision for
income taxes (15,223) 3,529 (51,745) 16,985
(BENEFIT) PROVISION FOR INCOME
TAXES (5,134) 7,550 (17,076) 13,368
----------- -------------- ------------- -----------
(Loss) income before
extraordinary item (10,089) (4,021) (34,669) 3,617
----------- -------------- ------------- -----------
EXTRAORDINARY LOSS ON DEBT
RETIREMENT, net of tax - - 5,207 -
----------- -------------- ------------- -----------
Net (loss) income $(10,089) $ (4,021) $ (39,876) $ 3,617
=========== ============== ============= ===========
Net loss applicable to
common stockholders $(15,124) $ (8,219) $ (54,981) $ (581)
=========== ============== ============= ===========
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PAGE 3 -- RADIO ONE, INC. REPORTS RECORD THIRD QUARTER RESULTS
Three months Three months Nine months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
--------------- --------------- --------------- ----------------
BASIC PER SHARE DATA (d):
Net (loss) income per share before
extraordinary loss applicable to common $ (0.16) $ (0.10) $ (0.56) $ (0.01)
shareholders
Net (loss) income per share
applicable to common shareholders (0.16) (0.10) (0.62) (0.01)
After-tax cash flow per share 0.13 0.20 0.32 0.44
DILUTED PER SHARE DATA (e):
Net (loss) income per share $ (0.11) $ (0.05) $ (0.45) $ 0.04
Preferred dividends per share 0.05 0.05 0.17 0.05
Net (loss) income per share applicable to
common shareholders $ (0.16) $ (0.10) $ (0.62) $ (0.01)
After-tax cash flow per share 0.13 0.20 0.32 0.44
OTHER DATA:
Broadcast cash flow (a) $ 34,437 $ 22,315 $ 90,434 $ 48,382
Broadcast cash flow margin (a) 52.0% 52.0% 51.3% 49.5%
EBITDA (b) $ 32,084 $ 20,490 $ 84,558 $ 44,157
EBITDA margin (b) 48.5% 47.8% 47.9% 45.2%
After-tax cash flow (c) $ 12,210 $ 17,057 $ 28,288 $ 36,784
Capital expenditures 1,970 919 4,810 2,316
SAME STATION RESULTS:
Net revenue $ 43,027 40,230 $100,266 $ 95,000
Broadcast cash flow 21,949 20,520 50,747 46,561
Broadcast cash flow margin 51.0% 51.0% 50.6% 49.0%
Weighted average shares outstanding - 91,687 85,494 88,936 83,862
basic (d)
Weighted average shares outstanding - 91,687 85,684 88,936 84,061
diluted (e)
September 30, December 31,
2001 2000
(unaudited) (audited)
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SELECTED BALANCE SHEET DATA:
Cash and cash equivalents $ 18,978 $ 20,879
Current assets 87,403 78,982
Total assets 1,910,742 1,765,218
Senior debt 480,049 562,588
Subordinated debt 300,000 84,368
Preferred stock (liquidation value) 310,000 310,000
Total shareholders' equity 1,074,317 1,057,069
AFTER-TAX CASH FLOW (c): Q3 - 2001 Q3 - 2000
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Pre-tax (loss) income $ (15,223) $ 3,529
Plus: Depreciation, amortization and non-cash
compensation 31,662 17,726
Plus: Loss on sale of investment 44 -
Plus: Tax benefit (liability) - -
Plus: Non-cash interest and stock-based
compensation 762 -
Less: Preferred Dividends 5,035 4,198
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TOTAL $ 12,210 $ 17,057
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PAGE 4 -- RADIO ONE, INC. REPORTS RECORD THIRD QUARTER RESULTS
Net broadcast revenue increased to approximately $66.2 million for the quarter
ended September 30, 2001 from approximately $42.9 million for the quarter ended
September 30, 2000 or 54%. Net broadcast revenue increased to approximately
$176.4 million for the nine months ended September 30, 2001 from approximately
$97.7 million for the nine months ended September 30, 2000 or 81%. 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 were derived from the
Company's August 2000 acquisition of radio stations from Clear Channel
Communications and AMFM and the August 2001 acquisition of Blue Chip
Broadcasting.
Operating expenses excluding depreciation, amortization and stock-based
compensation increased to approximately $34.1 million for the quarter ended
September 30, 2001 from approximately $22.4 million for the quarter ended
September 30, 2000 or 52%. Operating expenses excluding depreciation,
amortization and stock-based compensation increased to approximately $91.9
million for the nine months ended September 30, 2001 from approximately $53.5
million for the nine months ended September 30, 2000 or 72%. These increases in
expenses were related to the Company's expansion within 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 $16.0 million for the quarter ended
September 30, 2001 from approximately $9.0 million for the quarter ended
September 30, 2000 or 78%. Interest expense increased to approximately $46.4
million for the nine months ended September 30, 2001 from approximately $16.2
million for the nine months ended September 30, 2000 or 186%. These increases
related primarily to borrowings associated with the acquisition of radio
stations from Clear Channel and AMFM and the acquisition of Blue Chip
Broadcasting.
Other income decreased to approximately $0.6 million for the quarter ended
September 30, 2001 compared to approximately $9.7 million for the quarter ended
September 30, 2000 or 94%. Other income decreased to $0.6 million for the nine
months ended September 30, 2001 from approximately $19.4 million for the nine
months ended September 30, 2000 or 97%. These decreases were due to the Company
having normalized cash balance levels during the first nine months of 2001 as
compared to high cash and investment balances resulting from its follow-on
equity offerings in November 1999, March 2000 and July 2000, completed in
anticipation of the acquisition of radio stations from Clear Channel and AMFM
which was consummated in late August 2000.
(Loss) income before (benefit) provision for income taxes was approximately
$(15.2) million for the quarter ended September 30, 2001 compared to
approximately $3.5 million for the quarter ended September 30, 2000. (Loss)
income before (benefit) provision for income taxes was
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PAGE 5 -- RADIO ONE, INC. REPORTS RECORD THIRD QUARTER RESULTS
approximately $(51.7) million for the nine months ended September 30, 2001
compared to approximately $17.0 million for the nine months ended September 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 increased to approximately $10.1 million for the quarter ended
September 30, 2001 compared to approximately $4.0 million for the quarter ended
September 30, 2000 or 153%. Net (loss) income was approximately $(39.9) million
for the nine months ended September 30, 2001 compared to approximately $3.6
million for the nine months ended September 30, 2000. These changes were due to
the loss before benefit for income taxes versus income before provision for
income taxes in the previous year's periods as well as an extraordinary charge,
for the nine month period of 2001, 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 for both the
quarter and the nine month period, compared to tax provisions during the
previous year's periods.
Broadcast cash flow increased to approximately $34.4 million for the quarter
ended September 30, 2001 from approximately $22.3 million for the quarter ended
September 30, 2000 or 54%. Broadcast cash flow increased to approximately $90.4
million for the nine months ended September 30, 2001 from approximately $48.4
million for the nine months ended September 30, 2000 or 87%. 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 $32.1
million for the quarter ended September 30, 2001 from approximately $20.5
million for the quarter ended September 30, 2000 or 57%. Earnings before
interest, taxes, depreciation, and amortization (EBITDA), and excluding non-cash
compensation expense, increased to approximately $84.6 million for the nine
months ended September 30, 2001 from approximately $44.2 million for the nine
months ended September 30, 2000 or 91%. These increases were attributable to the
increase in broadcast revenue partially offset by higher operating expenses and
higher corporate expenses associated with the Company's overall growth.
Other Recent Events:
On August 1, 2001 the Company completed the acquisition of radio stations from
Sinclair Telecable, Inc. and Commonwealth Broadcasting, LLC for approximately
$34.0 million in cash.
On August 10, 2001 the Company completed the acquisition of Blue Chip
Broadcasting for approximately $190.0 million in cash and shares of its class D
common stock.
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PAGE 6 -- RADIO ONE, INC. REPORTS RECORD THIRD QUARTER RESULTS
On August 31, 2001, the Company commenced providing programming to WAMJ-FM, a
new station licensed to Mableton, Georgia, which serves the Atlanta market, for
a monthly LMA fee of $30,000.
Radio One will be holding a conference call to discuss its results for the
fiscal third quarter of 2001. This conference call is scheduled for Tuesday,
November 6, 2001 at 10:00 a.m. Eastern Time. Interested parties should call
612-332-1020 or 612-288-0340 five minutes prior to the scheduled time of the
call and ask for the "Radio One 2001 Third Quarter Results Teleconference". The
conference call will be recorded and made available for replay from 1:30 p.m.
the day of the call until midnight of the day following the call. Interested
parties may listen to the recording by calling (320) 365-3844 and entering
passcode 605247.
Radio One is the nation's seventh largest radio broadcasting company (based on
2000 pro forma revenue) and the largest primarily targeting African-American and
urban listeners. Pro forma for all announced acquisitions and operating
agreements, the Company owns and/or operates 65 radio stations located in 22 of
the largest markets in the United States and programs five channels on the XM
Satellite Radio system.
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, 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 September 30, 2001 the Company had 91,687,000 shares of Common Stock
outstanding on a weighted average basis for the quarter.
(e) As of September 30, 2001 the Company had 91,687,000 shares of Common Stock
outstanding on a weighted average basis for the quarter, diluted for
outstanding stock options. 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 there was no
difference 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.
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