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Total revenues amounted to $23.6 million for the 2009 third quarter, compared with $15.0 million in the corresponding period a year ago. For the first nine months of 2009, total revenues were $59.8 million, compared with $39.7 million in the corresponding period a year ago.
Advertising revenue for the 2009 third quarter decreased 5.6 percent to $9.9 million from $10.5 million in the prior-year period. For the first nine months of 2009, advertising revenues were $24.8 million compared to $26.6 million in the prior-year period.
Subscriber fees totaled $4.4 million for the third quarter of 2009 compared to subscriber fees of $4.5 million in the prior-year period. This slight decrease is generally a result of adding a significant number of subscribers during the quarter. For the first nine months of 2009, subscriber fees totaled $14.4 million compared to $13.1 million in the prior-year period.
In January of 2009, Outdoor Channel Holdings acquired certain assets of Winnercomm Inc. and its related entities. The revenues generated by Winnercomm are reported as "Production services." Production services revenue totaled $9.3 million and $20.6 million during the 2009 third quarter and nine month period, respectively. These revenues were comprised primarily of production services for customer-owned telecasts and marketing.
"During the third quarter we continued to execute our growth strategy through further investments in our category leading content, securing broad distribution gains nationwide, and strengthening our presence across multiple platforms," said Roger L. Werner, President and Chief Executive Officer. "We successfully expanded the distribution of our network through a series of tier migrations and system launches and have demonstrated industry-leading subscriber growth over the past year. While our advertising revenues continue to be impacted by the challenging environment, we remain confident in our long term growth prospects given our current market position. Looking forward, we believe we will be able to strengthen our growth profile by building on our compelling programming, multi-platform presence and strong advertising and distribution relationships."
Outdoor Channel Holdings posted a net income of $1.4 million, or $0.05 per diluted share, for the 2009 third quarter, compared with net income of $2.4 million, or $0.09 per diluted share, in the prior-year period. For the 2009 nine-month period, the Company posted a net loss of $0.9 million, or ($0.04) per diluted share compared to a net income of $1.9 million, or $0.07 for the prior-year period.
Earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, amounted to $4.2 million for the 2009 third quarter, compared with $5.4 million in the prior-year period. For the legacy Outdoor Channel business, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, totaled $3.8 million for the 2009 third quarter compared to $5.4 million in the prior-year period.
For the nine month period, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, totaled $5.3 million compared to $7.0 million in the prior-year period. For the legacy Outdoor Channel business, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, totaled $8.0 million for the 2009 nine month period compared to $7.0 million in the prior-year period.
Investor Conference Call
Outdoor Channel Holdings' management will host an investor conference call today, November 3, 2009, at 2 p.m. PST (5 p.m. EST) to review the company's financials and operations for its 2009 third quarter ended September 30, 2009. Investment professionals are invited to participate in the live call by dialing 866-788-0543 (domestic) or 857-350-1681 (international) and using participant passcode 66500972. The call will be open to all other interested parties through a live, listen-only audio Internet broadcast in the Investor Relations section of the company's Web site, www.outdoorchannel.com. For those who are not able to listen to the live broadcast, the call will be archived on the web site for one year. A telephonic playback of the conference call also will be available through 5 p.m. PST (8 p.m. EST), November 10, 2009, by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using participant passcode 92704107.
About Outdoor Channel Holdings, Inc.
Outdoor Channel Holdings, Inc. owns and operates Outdoor Channel, America's leader in outdoor TV, and Winnercomm Inc., an Emmy Award winning production and interactive company. Outdoor Channel offers programming that captures the excitement of hunting, fishing, shooting, off-road motorsports, adventure and the Western lifestyle and can be viewed on multiple platforms including high definition, video-on-demand, as well as on a dynamic broadband website. Winnercomm Inc. is one of America's largest and highest quality producers of live sporting events and sports series for cable and broadcast television. Winnercomm also owns and operates the patented Skycam and CableCam aerial camera systems which provide dramatic overhead camera angles for major sports events, including college and NFL football. For more information please visit www.outdoorchannel.com.
Nielsen Media Research Universe Estimates for Outdoor Channel
Nielsen Media Research is the leading provider of television audience measurement and advertising information services worldwide. Nielsen estimated that Outdoor Channel had approximately 33.1 million cable and satellite subscribers for November 2009. Please note that this estimate regarding Outdoor Channel's subscriber base is made by Nielsen Media Research and is theirs alone and does not represent opinions, forecasts or predictions of Outdoor Channel Holdings, Inc. or its management. Outdoor Channel Holdings, Inc. does not by its reference above or distribution imply its endorsement of or concurrence with such information.
Use of Non-GAAP Financial Information
This press release includes "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission rules. The company believes that earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, provides greater comparability regarding its ongoing operating performance. This information is not intended to be considered in isolation or as a substitute for net income (loss) calculated in accordance with U.S. GAAP. A reconciliation of the company's U.S. GAAP information to EBITDA, adjusted for the effects of share-based compensation expense and acquisition and integration costs is provided in the attached table.
Safe Harbor Statement
Statements in this news release that are not historical are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, including statements, without limitation, about our expectations, beliefs, intentions, strategies regarding the future long-term value of the company resulting from the company's current actions or strategic initiatives and the future anticipated value of Outdoor Channel to our audience, distributors and advertisers. The company's actual results could differ materially from those discussed in any forward-looking statements. The company intends that such forward-looking statements be subject to the safe-harbor provisions contained in those sections. Such statements involve significant risks and uncertainties and are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements. Such factors include but are not limited to: (1) service providers discontinuing or refraining from carrying Outdoor Channel; (2) a decline in the number of viewers from having Outdoor Channel placed in unpopular cable or satellite packages, or increases in subscription fees, established by the service providers; (3) liabilities resulting from an aerial camera falling; (4) a decrease in advertising revenue as a result of a deterioration in general economic conditions; (5) managing the company's growth and the integration of acquisitions; and other factors which are discussed in the company's filings with the Securities and Exchange Commission. For these forward-looking statements, the company claims the protection of the safe harbor for forward-looking statements in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Revenues:
Advertising $9,881 $10,472 $24,780 $26,594
Subscriber fees 4,427 4,484 14,428 13,089
Production services 9,322 - 20,611 -
Total revenues 23,630 14,956 59,819 39,683
Cost of services:
Programming 875 1,437 3,983 5,133
Satellite transmission fees 400 398 1,195 1,573
Production and operations 9,155 1,454 23,960 4,477
Other direct costs 175 98 382 290
Total cost of services 10,605 3,387 29,520 11,473
Other expenses:
Advertising 676 567 2,032 2,593
Selling, general and
administrative 9,328 6,592 26,998 21,342
Depreciation and amortization 1,010 672 2,897 1,904
Total other expenses 11,014 7,831 31,927 25,839
Income (loss) from operations 2,011 3,738 (1,628) 2,371
Interest and other income, net 15 454 66 1,400
Income (loss) from operations before
income taxes 2,026 4,192 (1,562) 3,771
Income tax provision (benefit) 643 1,798 (663) 1,887
Net income (loss) $1,383 $2,394 $(899) $1,884
Earnings (loss) per common share data:
Basic $0.06 $0.10 $(0.04) $0.07
Diluted $0.05 $0.09 $(0.04) $0.07
Weighted average number of common
shares outstanding:
Basic 24,426 25,114 24,434 25,719
Diluted 25,819 25,890 24,434 26,287
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
September 30, December 31,
2009 2008
(unaudited)
Assets
Current assets:
Cash and cash equivalents $23,223 $60,257
Investment in available-for-sale
securities 31,990 -
Accounts receivable, net of allowance
for doubtful accounts 13,681 9,448
Other current assets 10,712 6,854
Total current assets 79,606 76,559
Property, plant and equipment, net 15,049 10,042
Goodwill and amortizable intangible
assets, net 44,052 43,302
Investment in auction-rate securities 5,945 6,456
Deferred tax assets, net 5,614 4,949
Deposits and other assets 5,507 1,646
Totals $155,773 $142,954
Liabilities and Stockholders'
Equity
Current liabilities $16,465 $6,309
Long-term liabilities 1,222 236
Total liabilities 17,687 6,545
Total stockholders' equity 138,086 136,409
Totals $155,773 $142,954
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Operating activities:
Net income (loss) $1,383 $2,394 $(899) $1,884
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Depreciation and amortization 1,010 672 2,897 1,904
Amortization of subscriber
acquisition fees 255 125 553 367
Loss on sale of equipment 6 46 21 41
Gain on sale of available-for-sale
securities - (119) (7) (75)
Other-than-temporary impairment
on auction-rate securities - - - 336
Provision for doubtful accounts 145 125 335 589
Share-based employee and service
provider compensation 1,199 992 3,322 2,704
Deferred tax provision
(benefit), net 641 1,798 (695) 1,885
Changes in operating assets and liabilities:
Accounts receivable 2,170 (1,084) 1,122 (1,459)
Income tax refund receivable - (7) (251) (12)
Prepaid programming costs (1,320) (749) (1,683) (551)
Other current assets (186) (26) 400 (218)
Deposits and other assets (1,758) (209) (4,203) (209)
Accounts payable and accrued
expenses 1,527 (133) 87 1,469
Deferred revenue (247) 129 2,000 139
Customer deposits - - - (14)
Accrued severance payments 32 (14) 18 (239)
Deferred obligations (6) 23 (33) (74)
Unfavorable lease obligations 31 - (89) -
Net cash provided by operating
activities 4,882 3,963 2,895 8,467
Investing activities:
Purchases of property, plant
and equipment (714) (166) (2,075) (644)
Proceeds from sale of equipment 111 - 111 15
Cash paid to purchase assets of
Winnercomm, net of cash
acquired - - (5,746) -
Purchases of available-for-sale
and auction-rate securities (4,998) (5) (31,990) (27,181)
Proceeds from sale of
available-for-sale and
auction-rate securities 500 2,480 600 65,952
Net cash provided by (used in)
investing activities (5,101) 2,309 (39,100) 38,142
Financing activities:
Proceeds from exercise of
stock options - - - 11
Purchase of treasury stock (84) (99) (482) (389)
Purchase and retirement of stock
related to stock repurchase
program - (9,363) (347) (14,174)
Net cash used in financing
activities (84) (9,462) (829) (14,552)
Net increase (decrease) in cash
and cash equivalents (303) (3,190) (37,034) 32,057
Cash and cash equivalents,
beginning of period 23,526 60,507 60,257 25,260
Cash and cash equivalents,
end of period $23,223 $57,317 $23,223 $57,317
Supplemental disclosure of cash
flow information:
Income taxes paid $99 $7 $381 $13
Supplemental disclosures of non-cash
investing and financing activities:
Effect of net increase (decrease)
in fair value of auction-rate
securities, net of deferred
taxes $12 $(216) $82 $(157)
Property, plant and equipment
costs incurred but not paid $168 $37 $168 $37
Retirement of treasury stock $84 $98 $482 $389
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-U.S. GAAP MEASURES TO U.S. GAAP
(unaudited, in thousands)
The following table sets forth the reconciliation of net income (loss) to
earnings before interest, taxes, depreciation and amortization (EBITDA),
adjusted for the effects share-based compensation expense and acquisition
and integration costs:
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net income (loss) $1,383 $2,394 $(899) $1,884
Add/Subtract:
Interest and other income, net 15 454 66 1,400
Income tax provision (benefit) 643 1,798 (663) 1,887
Depreciation and amortization 1,010 672 2,897 1,904
EBITDA 3,021 4,410 1,269 4,275
Adjusted for:
Share-based compensation expense 1,199 992 3,322 2,704
Acquisition and integration costs - - 680 -
EBITDA as adjusted for share-based
compensation expense and
acquisition and integration
costs $4,220 $5,402 $5,271 $6,979
Summary of cost of services
Share-based compensation expense $22 $155 $236 $329
Cost of services 10,583 3,232 29,284 11,144
Total cost of services $10,605 $3,387 $29,520 $11,473
Summary of selling, general and
administrative
Share-based compensation
expense $1,177 $837 $3,086 $2,375
Acquisition and integration costs - - 680 -
Selling, general and
administrative 8,151 5,755 23,232 18,967
Total selling, general and
administrative $9,328 $6,592 $26,998 $21,342
Summary of interest and other
income, net
Interest income, net $15 $335 $66 $1,629
Dividend income - - - 32
Other income (loss) - 119 - (261)
Total interest and other income,
net $15 $454 $66 $1,400
EBITDA as adjusted by segment
Legacy Outdoor Channel $3,823 $5,402 $8,042 $6,979
Production Services 397 - (2,771) -
EBITDA as adjusted for
share-based compensation
expense and acquisition and
integration costs $4,220 $5,402 $5,271 $6,979
SOURCE Outdoor Channel Holdings, Inc.
http://www.outdoorchannel.com
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