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For the third quarter of 2009, net broadcast revenues decreased 13.9% to $21.8 million from $25.3 million during the third quarter of 2008. For the same period, station operating expenses decreased 4.8% to $14.6 million in 2009 compared to $15.3 million in 2008. The Company reported a net loss of $0.4 million for the quarter, or $0.01 per share, compared with a reported net loss of $46.3 million, or $1.19 per share, in the same period last year. Results for 2008 were significantly impacted by a pre-tax non-cash impairment charge of $67.5 million related to the Company's review of its indefinite-lived intangible assets and goodwill.
For the first nine months of 2009, net broadcast revenues decreased 13.5% to $62.8 million compared to $72.6 million in 2008. For the same period, station operating expenses decreased 7.0% to $43.3 million in 2009 from $46.5 million in 2008. The Company reported a net loss of $29.8 million for the first nine months of 2009, or $0.73 per share, compared with a reported net loss of $43.6 million, or $1.12 per share, in 2008. Results for 2009 and 2008 include a pre-tax non-cash impairment charge of $31.8 million and $67.5 million respectively, related to the Company's review of its indefinite-lived intangible assets and goodwill.
"During the third quarter we continued to execute our strategic plan to expand our presence among advertisers and audiences across our local market footprint, while aggressively controlling our costs," said Bill Stakelin, President and CEO of Regent Communications. "Our revenue results reflect the weak advertising market nationwide, offset in part by our consistent ability to outperform the overall radio industry and our portfolio of markets."
Below are the Company's condensed consolidated statements of operations prepared in accordance with generally accepted accounting principles ("GAAP") (in thousands, except per share amounts).
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ------------------
2009 2008 2009 2008
------------------- ------------------
Broadcast revenues, net of
agency commissions $21,811 $25,328 $62,840 $72,643
Station operating expenses 14,565 15,299 43,269 46,534
Corporate general and
administrative expenses 2,609 1,636 6,568 5,441
Impairment of indefinite-
lived intangible assets
and goodwill - 67,522 31,800 67,522
Depreciation and amortization 923 1,075 2,897 3,120
Gain on sale of stations - - - (507)
Loss (gain) on disposal of
long-lived assets and other 66 (39) (13) (3)
------------------- ------------------
Operating income (loss) 3,648 (60,165) (21,681) (49,464)
Interest expense (3,070) (2,611) (7,157) (8,918)
Realized and unrealized
(loss) gain on derivatives,
net (1,011) (1,500) (904) (2,096)
Impairment of note receivable
and other (50) (952) (50) (952)
Other income (expense), net 94 (125) 152 (108)
------------------- ------------------
Loss from continuing
operations before income
taxes (389) (65,353) (29,640) (61,538)
Income tax (expense)
benefit (53) 19,088 (138) 17,513
------------------- ------------------
Loss from continuing
operations (442) (46,265) (29,778) (44,025)
(Loss) gain on discontinued
operations, net of income tax - (27) - 402
------------------- ------------------
Net loss ($442) ($46,292) ($29,778) ($43,623)
=================== ==================
Basic and fully diluted net
loss per common share ($0.01) ($1.19) ($0.73) ($1.12)
Non-GAAP Financial Measures
Regent utilizes certain financial measures that are not calculated in accordance with GAAP to assess its financial performance. The non-GAAP performance and liquidity measures presented in this release are station operating income, same station net broadcast revenue, adjusted same station net broadcast revenue, same station operating income, and free cash flow. Regent's management believes these non-GAAP measures provide useful information to investors, as discussed in more detail below, regarding Regent's financial condition and results of operations and liquidity; however, these measures should not be considered as an alternative to net broadcast revenue, operating income (loss), net loss, or cash (used in) provided by operating activities as an indicator of Regent's performance or liquidity.
Station operating income
Third quarter 2009 station operating income decreased 27.7% to approximately $7.2 million from $10.0 million in the same period in 2008. For the nine months ended September 30, 2009, station operating income decreased 25.0% to $19.6 million from $26.1 million reported for the same period in 2008.
The Company believes that station operating income is a performance measure that helps investors better understand the financial health of our radio stations. Further, Regent and other media companies have traditionally been measured by analysts and other investors on their ability to generate station operating income. The following table reconciles operating income (loss), which the Company believes is the most directly comparable GAAP financial measure, to station operating income (in thousands):
Three Months Ended Nine Months Ended
Station operating income September 30, September 30,
2009 2008 2009 2008
----------------- ------------------
Operating income (loss) $3,648 ($60,165) ($21,681) ($49,464)
Plus:
Depreciation and amortization 923 1,075 2,897 3,120
Loss on disposal of long-lived
assets and other 66 - - -
Impairment of indefinite-lived
intangible asset
and goodwill - 67,522 31,800 67,522
Corporate general and
administrative expenses 2,609 1,636 6,568 5,441
Less:
Gain on disposal of long-lived
assets and other - 39 13 3
Gain on sale of stations - - - 507
----------------- ------------------
Station operating income $7,246 $10,029 $19,571 $26,109
================= ==================
Same station results
On a same station basis, which includes results from stations owned and operated in continuing operations during the entire third quarter for both the 2009 and 2008 periods and excludes barter, net broadcast revenue for the third quarter of 2009 decreased 14.3% to $21.0 million from $24.5 million in the third quarter of 2008. Same station operating income decreased 27.6% to $7.2 million in the third quarter of 2009 compared to $10.0 million in the third quarter of 2008.
The Company believes that a same station presentation is important to investors as it provides a measure of performance of radio stations that were owned and operated by Regent in the third quarter of 2008 as well as the current quarter, and eliminates the effect of acquisitions and dispositions on comparability. Additionally, the Company has excluded barter in this comparison as barter customarily results in volatility between quarters, although differences over the full year are not material. The following tables reconcile net broadcast revenue and operating income (loss) to same station net broadcast revenue and same station operating income (in thousands).
Three Months Ended
Same Station Net Broadcast Revenue September 30,
2009 2008
------- -------
Net broadcast revenue $21,811 $25,328
Less:
Net results of stations not included in same
station category (1) - -
Barter transactions 813 825
------- -------
Same station net broadcast revenue $20,998 $24,503
======= =======
(1) All stations owned in 2008 were owned in 2009.
Three Months Ended
Same Station Operating Income September 30,
2009 2008
------ -------
Operating income (loss) $3,648 ($60,165)
Plus:
Depreciation and amortization 923 1,075
Loss on disposal of long-lived assets and
other 66 -
Impairment of indefinite-lived intangible
assets and goodwill - 67,522
Corporate general and administrative expenses 2,609 1,636
Less:
Gain on disposal of long-lived assets and
other - 39
------ -------
Station operating income 7,246 10,029
Adjustments:
Net results of stations not included in same
station category (1) - -
Barter transactions 3 (15)
------ -------
Same station operating income $7,249 $10,014
====== =======
(1) All stations owned in 2008 were owned in 2009.
Free cash flow
Free cash flow is defined as net income (loss) plus depreciation, amortization, and other non-cash expenses, less maintenance capital expenditures and net gains on the sale of stations and disposal of long-lived assets. Free cash flow decreased to approximately $0.1 million in the third quarter of 2009, from approximately $4.9 million in the third quarter of 2008. For the nine months ended September 30, 2009, free cash flow decreased to $1.6 million from $10.3 million in 2008.
The Company believes that free cash flow is a liquidity measure that helps investors evaluate the ability of the Company to generate excess cash flow for investing and financing uses. The following table displays how the Company calculates free cash flow (in thousands).
Three Months Ended Nine months ended
September 30, September 30,
Free Cash Flow 2009 2008 2009 2008
-------------- ---------------- ------------------
Net loss ($442) ($46,292) ($29,778) ($43,623)
Add:
Depreciation and amortization 923 1,075 2,897 3,120
Impairment of indefinite-lived
intangible assets and goodwill - 67,522 31,800 67,522
Non-cash unrealized loss on
derivatives - 696 - 460
Impairment of note receivable 50 952 50 952
Non-cash interest expense 116 132 349 450
Other items, net (1) 203 306 364 921
Less:
Non-cash unrealized gain on
derivatives 658 - 3,449 -
Gain on disposal of long-lived
assets and other - - - 52
Non-cash gain on sale of radio
stations - 57 - 1,155
Non-cash tax benefit - 19,146 - 17,400
Maintenance capital
expenditures 90 292 620 853
Digital upgrade capital
expenditures - 1 - 71
---------------- -----------------
Free cash flow $102 $4,895 $1,613 $10,271
================ =================
(1) Includes: non-cash compensation; barter; and loss on the disposal or
impairment of long-lived assets
The most directly comparable GAAP measure to free cash flow is net cash (used in) provided by operating activities. The following table reconciles net cash (used in) provided by operating activities to free cash flow (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
Free Cash Flow 2009 2008 2009 2008
-------------- -------------- ------------------
Net cash (used in) provided by
operating activities ($80) $5,374 $3,128 $10,751
Less:
Changes in operating assets and
liabilities - 48 351 -
Bad debt expense 179 138 544 443
Plus:
Changes in operating assets and
liabilities 451 - - 887
Less:
Maintenance capital expenditures 90 292 620 853
Digital upgrade capital expenditures - 1 - 71
-------------- ------------------
Free cash flow $102 $4,895 $1,613 $10,271
============== ==================
Selected Data
As of September 30, 2009, outstanding credit facility debt was approximately $187.7 million and cash was approximately $6.0 million. Total capital expenditures in the third quarter ended September 30, 2009 were approximately $0.1 million.
Teleconference
The Company will host a teleconference to discuss its third quarter results on Thursday, November 5, at 9:00 a.m. Eastern Time. To access the teleconference, please dial 973-935-8767 ten minutes prior to the start time and reference passcode 19137344. The teleconference will also be available via live webcast on the Company's website, located at www.regentcomm.com under Investor Relations. If you cannot listen to the teleconference during its scheduled time, there will be a replay available through Wednesday, November 12, 2009, which can be accessed by dialing 800-642-1687 (U.S.) or 706-645-9291 (Int'l), passcode 19137344. The webcast will also be archived on the Company's Web site for 30 days.
Regent Communications is a radio broadcasting company focused on acquiring, developing and operating radio stations in mid-sized markets. Regent owns and operates 62 stations located in 13 markets. Regent Communications, Inc. shares are traded on the Nasdaq under the symbol "RGCI."
This press release includes certain forward-looking statements with respect to Regent Communications, Inc. for which it claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain risks and uncertainties and include statements preceded by, followed by or that include words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "project" and other similar expressions. Although Regent believes expectations reflected in these forward-looking statements are based on reasonable assumptions, such statements are influenced by financial position, business strategy, budgets, projected costs, and plans and objectives of management for future operations. Actual results and developments may differ materially from those conveyed in the forward-looking statements based on various factors including, but not limited to: changes in economic, business and market conditions affecting the radio broadcast industry, the markets in which we operate, and nationally; increased competition for attractive radio properties and advertising dollars; increased competition from emerging technologies; fluctuations in the cost of operating radio properties; the Company's ability to manage growth; the Company's ability to effectively integrate its acquisitions; potential costs relating to stockholder demands; changes in the regulatory climate affecting radio broadcast companies; cancellations, disruptions or postponement of advertising schedules in response to national or world events; and the Company's ability to regain and maintain compliance with the terms of its credit facilities or to refinance or restructure such obligations. Further information on other factors that could affect the financial results of Regent Communications, Inc. is included in Regent's filings with the Securities and Exchange Commission. These documents are available free of charge at the Commission's website at http://www.sec.gov and/or from Regent Communications, Inc.
SOURCE Regent Communications, Inc.
http://www.regentcomm.com
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