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NEWS RELEASE
November 2, 2000 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 2000
Same Station Net Revenue Increases 13%
Same Station Broadcast Cash Flow Increases 20%
Company's Portfolio of Radio Stations Squarely on Track
Washington, DC: - Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported record
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results for the quarter ended September 30, 2000. Net broadcast revenue was
$42.9 million, up 78% from the same period in 1999. Broadcast cash flow was
$22.3 million, an increase of 86% from the same period in 1999 while the
broadcast cash flow margin improved to 52% from 50%. After-tax cash flow
increased 154% to $17.0 million or $0.20 cents per share, up from $6.7 million,
or $0.12 cents per share last year. Pre-tax income increased 59% to $3.5
million from $2.2 million while the net loss was $4.0 million or $0.05 per
share, down from net income of $1.9 million or $0.04 per share in the third
quarter of 1999. The net loss for the quarter ended September 30, 2000 was the
result of a $7.6 million tax provision for the quarter to adjust the effective
tax rate as a result of the acquisition of 12 radio stations from Clear Channel
Communications and AMFM.
On a same station basis the Company's net broadcast revenue increased 13% and
broadcast cash flow increased 20% from last year while the broadcast cash flow
margin improved to 53% from 50% in the previous year's third quarter. (Same
station results are from only those stations owned and/or operated by the
Company for the full one-year period in question.)
Alfred C. Liggins, III, the Company's CEO and President stated, "This quarter,
possibly more than any other, made it very clear how strong Radio One is from an
operational perspective. During the quarter, we completed the acquisition of 12
radio stations from Clear Channel Communications and AMFM, effectively doubling
our cash flow, began the successful integration of those radio stations, posted
tremendous, broad-based, ratings momentum in the most recent Arbitron survey and
grew our same station revenue at industry-leading rates." Mr. Liggins continued,
"Now that we own a national platform of Urban radio stations, we expect to
leverage it in various ways which should enable us to continue to post industry-
leading growth rates while further allowing us to develop and acquire compelling
programming such as we have with the Steve Harvey Morning Show in Los Angeles
and the Russ Parr and Tom Joyner Morning Shows in Washington, DC and other
markets. There is renewed positive momentum in the radio industry and, most
certainly, positive momentum within Radio One. In fact, our same station revenue
pacings are currently above 10% for the fourth quarter. We are very excited for
what the future holds."
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PAGE 2 -- RADIO ONE, INC. REPORTS RECORD THIRD QUARTER RESULTS
Commenting further on the Company's performance, Scott R. Royster, Executive
Vice President and Chief Financial Officer, stated "While revenue growth slowed
in the quarter, as we had always expected it would, it actually turned out to be
a very good quarter for us. We are pleased with the growth we experienced as
well as the margin improvement in the period. Further, I am pleased with how
smoothly we have transitioned into a much larger company. The efforts of all of
our employees, with special recognition of the newest members of the Radio One
family, cannot be overstated. As we continue to focus on enhancing the
efficiency of our operations, I am optimistic that we will continue to find ways
to enhance further shareholder value in the process."
RESULTS OF OPERATIONS
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Comparison of periods ended September 30, 2000 to the periods
ended September 30, 1999
(all periods are unaudited - all numbers in 000s except per share data).
<TABLE>
<CAPTION>
Three months Three months Nine months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------ ------------- -------------
STATEMENT OF OPERATIONS DATA:
<S> <C> <C> <C> <C>
REVENUE:
Broadcast revenue $48,914 $27,589 $111,269 $65,062
Less: Agency commissions 6,028 3,468 13,588 8,087
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Net broadcast revenue 42,886 24,121 97,681 56,975
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OPERATING EXPENSES:
Programming and technical 6,404 3,864 15,341 9,741
Selling, G&A 14,167 8,264 33,958 21,470
Corporate expenses 1,825 1,148 4,225 3,076
Stock-based compensation - - - 225
Depreciation & amortization 17,726 4,734 30,397 12,209
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Total operating expenses 40,122 18,010 83,921 46,721
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Operating income 2,764 6,111 13,760 10,254
INTEREST EXPENSE 8,970 3,990 16,217 11,479
OTHER INCOME, net 9,735 58 19,442 199
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Income (loss) before
provision for income taxes 3,529 2,179 16,985 (1,026)
PROVISION FOR INCOME TAXES 7,550 255 13,368 731
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Net income (loss) $(4,021) $ 1,924 $ 3,617 $(1,757)
============= ============ ============= =============
Net income (loss) applicable
to common stockholders $(8,219) $ 1,924 $ (581) $(3,233)
============= ============ ============= =============
</TABLE>
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PAGE 3 -- RADIO ONE, INC. REPORTS RECORD THIRD QUARTER RESULTS
<TABLE>
<CAPTION>
Three months Three months Nine months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------ ------------- -------------
BASIC PER SHARE DATA (e):
<S> <C> <C> <C> <C>
Net income (loss) per share
applicable to common
shareholders $ (0.10) $ 0.04 $ (0.01) $ (0.07)
After-tax cash flow per share $ 0.20 $ 0.12 $ 0.44 $ 0.24
DILUTED PER SHARE DATA (f):
Net income (loss) per share $ (0.05) $ 0.04 $ 0.04 $ (0.04)
Preferred dividends per share $ 0.05 $ - $ 0.05 $ 0.03
Net income (loss) per share
applicable to common
shareholders $ (0.10) $ 0.04 $ (0.01) $ (0.07)
After-tax cash flow per share $ 0.20 $ 0.12 $ 0.44 $ 0.24
OTHER DATA:
Broadcast cash flow (a) $22,315 $11,993 $48,382 $25,764
Broadcast cash flow margin (a) 52.0% 49.7% 49.5% 45.2%
EBITDA (b) $20,490 $10,845 $44,157 $22,688
EBITDA margin (b) 47.8% 45.0% 45.2% 39.8%
After-tax cash flow (c) $17,057 $ 6,713 $36,784 $10,452
SAME STATION RESULTS(d):
Net revenue $27,170 $24,120 70,998 58,754
Broadcast cash flow 14,376 11,993 36,391 26,522
Broadcast cash flow margin 52.9% 49.7% 51.3% 45.1%
Weighted average shares
outstanding - basic (e) 85,494 54,309 83,862 43,641
Weighted average shares
outstanding - diluted (f) 85,684 54,585 84,061 43,641
Capital expenditures $ 919 $ 461 $ 2,316 $ 2,580
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
(unaudited) (audited)
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SELECTED BALANCE SHEET DATA:
<S> <C> <C>
Cash and cash equivalents $ 35,151 $ 6,221
Current assets 90,180 284,463
Total assets 1,791,074 527,536
Senior debt 570,122 100
Subordinated debt 84,285 82,526
Preferred stock 310,000 -
Total shareholders' equity 1,074,200 420,256
</TABLE>
Net broadcast revenue increased to approximately $42.9 million for the quarter
ended September 30, 2000 from approximately $24.1 million for the quarter ended
September 30, 1999 or 78%. Net broadcast revenue increased to approximately
$97.7 million for the nine months
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PAGE 4 -- RADIO ONE, INC. REPORTS RECORD THIRD QUARTER RESULTS
ended September 30, 2000 from approximately $57.0 million for the nine months
ended September 30, 1999 or 71%. This increase in net broadcast revenue was the
result of continuing broadcast revenue growth in all of the Company's markets in
which it has operated for at least one year as well as from revenue contributed
from radio stations acquired within the last year.
Operating expenses excluding depreciation, amortization and stock-based
compensation increased to approximately $22.4 million for the quarter ended
September 30, 2000 from approximately $13.3 million for the quarter ended
September 30, 1999 or 68%. Operating expenses excluding depreciation,
amortization and stock-based compensation increased to approximately $53.5
million for the nine months ended September 30, 2000 from approximately $34.3
million for the nine months ended September 30, 1999 or 56%. This increase in
expenses was 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 and higher costs associated with operating as a public company.
Interest expense increased to approximately $9.0 million for the quarter
ended September 30, 2000 from approximately $4.0 million for the quarter ended
September 30, 1999 or 125%. Interest expense increased to approximately $16.2
million for the nine months ended September 30, 2000 from approximately $11.5
million for the nine months ended September 30, 1999 or 41%. This increase
relates primarily to additional borrowings made in the third quarter of 2000 in
conjunction with the acquisition of radio stations from Clear Channel
Communications and AMFM.
Other income (almost exclusively interest income) increased to
approximately $9.7 million for the quarter ended September 30, 2000 from
approximately $0.1 million for the quarter ended September 30, 1999 or 9,600%.
Other income (almost exclusively interest income) increased to approximately
$19.4 million for the nine months ended September 30, 2000 from approximately
$0.2 million for the nine months ended September 30, 1999 or 9,600%. This
increase was due to the Company's high cash and investment balances following
its follow-on equity offerings in November 1999, March 2000 and July 2000 as
well as cash generated from operations.
Income before provision for income taxes increased to approximately $3.5
million for the quarter ended September 30, 2000 from approximately $2.2 million
for the quarter ended September 30, 1999 or 59%. Income before provision for
income taxes increased to approximately $17.0 million for the nine months ended
September 30, 2000 from a loss of approximately $1.0 million for the nine months
ended September 30, 1999. This increase was due to higher operating income
enhanced by higher interest income, partially offset by higher interest expense
in the quarter, as described above.
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PAGE 5 -- RADIO ONE, INC. REPORTS RECORD THIRD QUARTER RESULTS
Net loss was approximately $4.0 million for the quarter ended September 30,
2000 compared to net income of approximately $1.9 million for the quarter ended
September 30, 1999. Net income increased to approximately $3.6 million for the
nine months ended September 30, 2000 from a loss of approximately $1.8 million
for the nine months ended September 30, 1999. This decrease in net income for
the quarter was due to higher income before provision for income taxes more than
offset by a higher income tax provision associated with the change in the
estimated pre-tax income for the year as a result of the acquisition of 12 radio
stations from Clear Channel Communications and AMFM. The increase in net income
for the nine month period was due to higher income before provision for income
taxes partially offset by an increased provision for income taxes.
Broadcast cash flow increased to approximately $22.3 million for the
quarter ended September 30, 2000 from approximately $12.0 million for the
quarter ended September 30, 1999 or 86%. Broadcast cash flow increased to
approximately $48.4 million for the nine months ended September 30, 2000 from
approximately $25.8 million for the nine months ended September 30, 1999 or 88%.
This increase was 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 stock-based compensation expense, increased to approximately $20.5
million for the quarter ended September 30, 2000 from approximately $10.8
million for the quarter ended September 30, 1999 or 90%. Earnings before
interest, taxes, depreciation, and amortization (EBITDA), and excluding stock-
based compensation expense, increased to approximately $44.2 million for the
nine months ended September 30, 2000 from approximately $22.7 million for the
nine months ended September 30, 1999 or 95%. This increase was attributable to
the increase in broadcast revenue and interest income partially offset by higher
operating expenses and higher corporate expenses partially associated with the
costs of operating as a public company.
Other Recent Events:
On September 25, 2000 the Company completed the acquisition of KJOI-AM
(formerly KLUV-AM) in the Dallas, Texas market, for approximately $16.0 million.
On August 25, 2000 the Company completed the acquisition of 12 radio
stations, located in seven markets, from Clear Channel Communications and AMFM,
for approximately $1.3 billion.
On August 7, 2000 the Company announced that it had entered into an
agreement to acquire WPEK-FM in the Greenville, South Carolina market for
approximately $7.5 million.
On July 17, 2000 the Company completed a $750.0 million bank credit
facility.
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PAGE 6 -- RADIO ONE, INC. REPORTS RECORD THIRD QUARTER RESULTS
On July 11, 2000 the Company completed a private placement of $310.0
million of convertible preferred securities.
Radio One is the nation's largest radio broadcasting company primarily
targeting African-American and Urban listeners. Pro forma for all announced
acquisitions, the Company owns and/or operates 51 radio stations, 50 of which
are located in 14 of the 20 and 18 of the 50 largest African-American markets in
the United States.
Radio One will be holding a conference call to discuss its results for the
fiscal third quarter of 2000. This conference call is scheduled for Thursday,
November 2, 2000 at 5:00pm Eastern Standard Time. Interested parties should
call 612-288-0337 five minutes prior to the scheduled time of the call and ask
for the "Radio One 2000 Third Quarter Results Teleconference". The conference
call will be recorded and made available for replay from 8:30pm the day of the
call until midnight the day following the call. Interested parties may listen
to the recording by calling (800) 475-6701 and entering passcode 541866.
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PAGE 7 -- RADIO ONE, INC. REPORTS RECORD THIRD QUARTER RESULTS
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,
seasonality 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 stock-based compensation) and depreciation
and amortization of both tangible and intangible assets.
(b) "EBITDA" is defined as earnings before interest, taxes, depreciation,
amortization and stock-based compensation.
(c) "After-tax cash flow" is defined as income before income taxes and
extraordinary items plus depreciation, amortization and stock-based
compensation, less the current income tax liability and preferred stock
dividends.
(d) Same station results include results only for those stations owned and/or
operated by the Company for the full one-year period in question. For
1999, same station results include results of an affiliate of the
Company's, Radio One of Atlanta, which was operated by the Company from its
inception and acquired by the Company on March 30, 1999.
(e) As of September 30, 2000 the Company had 85,494,000 shares of Common Stock
outstanding on a weighted average basis for the quarter.
(f) As of September 30, 2000 the Company had 85,684,000 shares of Common Stock
outstanding on a weighted average basis for the quarter, diluted for
outstanding stock options. However, the per share amounts are the same as
those based on basic shares outstanding because of the anti-dilutive effect
of these options shares, other than for after-tax cash flow. 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 of the relatively minor differences 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.
