Radio One Reports Results

Look up the PowerRating of ROIAK and see how it has performed over the past week as well as the current proprietary PowerRating.

Aug 11, 2009 (Close-Up Media via COMTEX) -- ROIAK | Quote | Chart | News | PowerRating -- Radio One reported its results for the quarter ended June 30.

In a release dated August 6, the company stated:

- Net revenue was approximately $70.1 million, a decrease of 16 percent from the same period in 2008. Station operating income was approximately $29.6 million, a decrease of 16 percent from the same period in 2008. The company reported net operating income of approximately $18.5 million, an increase of 56 percent from the same period in 2008. Net income was approximately $7.2 million or $0.12 per share, an improvement from the net loss of approximately $11.7 million or $0.12 per share for the same period in 2008.

Alfred C. Liggins, III, Radio One's CEO and President said, "At this point it seems likely that the first quarter will prove to be the low-point for 2009 radio revenues. Our second quarter performance showed significant improvement in three out of our top four markets, and we out-performed the general market in 10 of the 14 markets where we have available Miller Kaplan data. The significant cost reduction program that we launched in 2008 has mitigated to some degree the impact of falling revenues on the bottom line, but there is no doubt that the operating environment will remain very challenging for the rest of 2009."

- Net revenue decreased to approximately $70.1 million for the quarter ended June 30, from approximately $83.4 million for the same period in 2008, a decrease of 16.0 percent. While the markets in which we operate were down 21.3 percent in revenue this quarter, we out performed by 530 basis points, and we saw sequential improvement from the 23.9 percent revenue decline we experienced in first quarter 2009. Our best performing markets for the quarter were Houston, Baltimore and Atlanta, the latter benefitting from format changes that we made in the first quarter 2009. Despite gaining market share, the continuing weakness in the advertising market meant that we experienced revenue declines in all but one of our radio markets. Both Community Connect and Reach Media experienced internet revenue declines due to overall advertising weakness. Net revenue for our syndicated programs and our St. Louis radio market experienced growth for the quarter.

- Operating expenses, excluding depreciation and amortization and stock-based compensation, decreased to approximately $45.7 million from approximately $65.8 million for the quarters ended June 30, and 2008, respectively, a decrease of 30.5 percent. Approximately $10.4 million of the decrease is associated with the non-recurrence of charges recorded in second quarter 2008 for the CEO's new employment agreement. Our radio division generated the majority of the additional expense savings through its continuing cost cutting initiatives, specifically compensation savings from employee layoffs and salary cuts, vacation benefit savings from scheduled office closings and changes to the company's vacation policy, and reductions to discretionary expenses such as promotional spending and travel and entertainment. Revenue declines drove corresponding reductions in commissions and national representative fees. We also incurred lower publishing costs for Giant Magazine and less traffic acquisition costs for our internet business. Excluding the approximately $10.4 million recorded in second quarter 2008 for the CEO's new employment agreement, operating expenses declined 17.5 percent for the three months ended June 30, compared to the same period in 2008.

- Interest expense decreased to approximately $9.0 million for the quarter ended June 30, from approximately $15.2 million for the same period in 2008, a decline of 40.4 percent. The decrease in interest expense for the three months ended June 30 was due primarily to early redemptions of the company's 87/8 percent Senior Subordinated Notes due July 2011, and to a lesser extent, more favorable rates and pay downs of outstanding debt on the company's credit facility.

- As there were no early bond redemptions for the quarter ended June 30, there was no gain on retirement of debt to report for the quarter, compared to approximately $1.0 million for the same period in 2008. The second quarter 2008 gain on retirement of debt was due to the early redemption of approximately $8.0 million of the company's 87/8 percent Senior Subordinated Notes during that quarter, at an average discount of 13.5 percent. A principal amount of $101.5 million remained outstanding as of June 30, for these senior subordinated notes.

- Equity in income of affiliated company increased to $747,000 for the quarter ended June 30, compared to $29,000 for the same period in 2008. The amounts are attributable to our share of income generated by TV One for the quarters ended June 30, and 2008, respectively. The company's share of TV One's income is driven by TV One's current capital structure and the company's ownership levels in the equity securities of TV One that are currently absorbing its net income.

- Provision for income taxes decreased to approximately $1.8 million for the quarter ended June 30, compared to approximately $9.8 million for the same quarter in 2008, a decrease of 81.8 percent. In prior years, we recorded a deferred tax liability ("DTL") related to the amortization of indefinite-lived assets that are deducted for tax purposes, but not deducted for book purposes. Also in prior years, the company generated deferred tax assets ("DTAs"), mainly federal and state net operating loss ("NOLs") carryforwards. In the fourth quarter of 2007, except for DTAs in its historically profitable filing jurisdictions, and DTAs associated with definite-lived assets, the company recorded a full valuation allowance for all other DTAs, including NOLs, as it was determined that more likely than not, the DTAs would not be realized. As a result, the decrease in taxes is due to differences in the amount of change in DTAs associated with definite-lived assets for which no valuation allowance is provided.

- Loss from discontinued operations, net of tax, was $89,000 for the quarter ended June 30, compared to income, net of tax, of approximately $1.3 million for the same period in 2008. The loss from discontinued operations, net of tax, for the three months ended June 30, is primarily due to legal and professional expenses incurred as a result of ongoing legal activity from previous station sales. The gain from discontinued operations, net of tax, for the three months ended June 30, 2008 resulted from the gain on the April 2008 closing on the sale of the assets of radio station WMCU-AM, located in the Miami metropolitan area. The loss or income from discontinued operations, net of tax, also includes a tax provision of $4,000 for the three months ended June 30, compared to a tax provision of $351,000 for the same period in 2008.

Radio One is a radio broadcasting company that primarily targets African-American and urban listeners. Radio One currently owns 53 broadcast stations located in 16 urban markets in the United States.

((Comments on this story may be sent to newsdesk@closeupmedia.com))

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index