Outdoor Channel Holdings Reports 2005 Third Quarter Results

Outdoor Channel Holdings Reports 2005 Third Quarter Results

TEMECULA, Calif., Nov. 14 /PRNewswire-FirstCall/ -- Outdoor Channel Holdings, Inc. (NASDAQ:OUTD) today reported financial results for the three- and nine-month periods ended September 30, 2005.

For the 2005 third quarter, total revenues increased to $11.4 million, up 4.2 percent from $10.9 million in the prior-year period. Advertising revenue, principally generated from the sale of advertising time on The Outdoor Channel, was relatively flat at $5.7 million for the current and year-ago third quarter. Subscriber fees rose 11.5 percent to $3.8 million from $3.5 million in the 2004 third quarter, due to an increased number of paying subscribers. Membership income totaled $1.9 million, compared with $1.8 million in the same period a year earlier.

"We continue to make progress with our strategic initiatives designed to increase our long-term profitability, including increasing the levels of in-house programming, opening an advertising sales office in New York City, launching Outdoor Channel 2 HD in July 2005 and expanding our marketing efforts to drive subscriber growth," said Perry T. Massie, president and chief executive officer of Outdoor Channel Holdings. "As expected, these initiatives, along with our investment in a new broadcast facility that is nearing completion, have resulted in and are expected to continue to result in considerable increases in operating expenses going forward."

Total expenses for the third quarter of 2005 declined to $11.1 million from $56.7 million in the corresponding 2004 period, which included a non-cash, non-recurring compensation expense of $48.0 million resulting from the assumption of options in the acquisition of the minority interest of The Outdoor Channel, Inc. not then owned by the company. Excluding this non-recurring expense, total expenses for the current quarter increased 28.3 percent over the 2004 third quarter.

Net income for the 2005 third quarter totaled $323,000, or $0.01 per diluted share, based on 27.7 million weighted average shares outstanding. The share count for the current third quarter reflects the company's follow-on public offering of 3.5 million primary shares of common stock and 2.1 million secondary shares from the exercise of stock options from certain existing stockholders, as well as the newly issued shares and the assumption of options related to the September 2004 merger. In the 2004 third quarter, the company sustained a net loss of $27.7 million, or $1.75 per share, based on 15.8 million weighted average shares.

For the year-to-date period, total revenues grew 6.0 percent to $31.5 million from $29.7 million for the corresponding 2004 period. Advertising sales rose 1.8 percent to $16.2 million, and subscriber fees increased 15.8 percent to $11.4 million from the prior-year nine-month period. Membership income totaled $3.9 million for the first nine months of 2005, compared with $4.0 million in the comparable period a year ago. Net income for the year-to-date period totaled $1.3 million, or $0.05 per diluted share, based on 23.7 million weighted average shares outstanding. This compares with a net loss of $25.7 million, or $1.69 per share, based on 15.2 million weighted average shares outstanding, in the corresponding 2004 period.

Outdoor Channel Holdings continues to maintain a strong balance sheet. At September 30, 2005, cash and cash equivalents totaled $29.8 million, investments in available-for-sale securities totaled $21.9 million and total stockholders' equity increased to $140.8 million.

Investor Conference Call

Outdoor Channel Holdings' management will host an investor conference call today, November 14, 2005, at 9:00 a.m. PST (12:00 noon EST) to review the company's financials and operations for the quarter ended September 30, 2005. The call will be open to all interested investors through a live, listen-only audio Web broadcast via the Internet at www.outdoorchannelholdings.com and www.earnings.com. For those who are not available to listen to the live broadcast, the call will be archived for one year at both Web sites. A telephonic playback of the conference call also will be available through 5:00 p.m. PST (8:00 p.m. EST), Friday, November 18, by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using participant passcode 58088590.

About Outdoor Channel Holdings, Inc.

Outdoor Channel Holdings, Inc. owns and operates The Outdoor Channel, a national television network dedicated to providing traditional outdoor programming to America's 82 million anglers, hunters and outdoor enthusiasts. The Outdoor Channel features approximately 100 weekly programs featuring hunting, fishing and shooting sports, as well as off road motor sports and other related lifestyle programming. Nielsen Media Research estimates The Outdoor Channel's universe, through a combination of cable and satellite dish subscribers, to be approximately 25.7 million homes for November 2005. The company also owns and operates related businesses that serve the interests of viewers of The Outdoor Channel and other outdoor enthusiasts, including Outdoor Channel 2 HD, LDMA-AU, Inc. (Lost Dutchman's) and Gold Prospector's Association of America, LLC. (GPAA).

Non-GAAP Financial Measures

In some of the above period-to-period comparisons, the September 2004 non-cash, non-recurring compensation expense of $48.0 million incurred by the company has been excluded. Outdoor Channel Holdings believes that quantifying the effects of this charge provides a better understanding of the company's results or operations and that disclosure of its results in this manner, when presented in conjunction with the corresponding GAAP measures, provides useful information to investors and others in identifying and understanding the company's operating performance for the periods presented. However, these measures should not be considered as an alternative to measurements required by accounting principles generally accepted in the United States (U.S. GAAP).

Safe Harbor Statement

Statements, including those related to benefits resulting from the company's strategic initiatives 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, regarding our expectations, beliefs, intentions or strategies regarding the future. 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 forward-looking statements relate to, among other things, future shareholder value, anticipated expenses including advertising, programming, personnel and others, Nielsen Media Research estimates regarding total households and cable and satellite homes subscribing to The Outdoor Channel, and other matters. 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) the company's ability to grow the subscriber base of The Outdoor Channel; (2) a decrease in operating results from offering launch support fees and other incentives to grow the subscriber base; (3) the triggering of a "most favored nations" clause with service providers from offering launch support fees and other incentives; (4) a decline in the number of viewers from having The Outdoor Channel placed in unpopular cable or satellite packages, or increases in subscription fees, established by the service providers; (5) service providers discontinuing or refraining from carrying The Outdoor Channel; 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.

Contacts: Perry T. Massie, President and Chief Executive Officer
William A. Owen, Chief Financial Officer
951.699.4749

Cecilia A. Wilkinson/Angie Yang
PondelWilkinson Inc.
Investor Relations
Corporate/Financial Communications
310.279.5980
investor@pondel.com

(TABLES FOLLOW)

OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share data)

Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
Revenues:
Advertising $5,657 $5,723 $16,173 $15,886
Subscriber fees 3,846 3,450 11,382 9,830
Membership income 1,901 1,776 3,924 3,995

Total revenues 11,404 10,949 31,479 29,711

Expenses:
Satellite transmission
fees 617 582 1,866 1,759
Advertising 1,912 1,477 5,668 4,282
Programming 2,315 933 3,367 2,223
Non-cash compensation
expense from exchange
of stock options -- 47,983 -- 47,983
Selling, general and
administrative 6,299 5,696 18,752 15,166

Total expenses 11,143 56,671 29,653 71,413

Income (loss) from
operations 261 (45,722) 1,826 (41,702)

Other income, net 396 34 486 93

Income (loss) before
income taxes and
minority interest 657 (45,688) 2,312 (41,609)

Income tax provision
(benefit) 334 (18,176) 1,025 (16,543)

Income (loss) before
minority interest 323 (27,512) 1,287 (25,066)

Minority interest in net
income of consolidated
subsidiary -- 193 -- 682

Net income (loss) $323 $(27,705) $1,287 $(25,748)

Earnings per common share:
Basic $0.01 $(1.75) $0.06 $(1.69)
Diluted $0.01 $(1.75) $0.05 $(1.69)

Weighted average number of common
shares outstanding:
Basic 24,236 15,789 20,444 15,238
Diluted 27,658 15,789 23,672 15,238

OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheet Highlights
(In thousands, except per share data)

September 30, December 31,
2005 2004
(unaudited)
ASSETS
Cash and cash equivalents $29,775 $13,105
Investment in available-for-sale securities 21,923 741
Accounts receivable, net of allowance for
doubtful accounts of $275 and $207 5,317 4,848
Prepaid programming costs 3,121 606

Total current assets 64,692 21,726

Property, plant and equipment, net 13,572 6,726
Totals $146,149 $99,669

Liabilities and Stockholders' Equity
Total current liabilities 3,870 4,684

Total liabilities 5,346 6,187
Total stockholders' equity 140,803 93,482

Totals $146,149 $99,669

Source: Outdoor Channel Holdings, Inc.

CONTACT: Perry T. Massie, President and Chief Executive Officer, or
William A. Owen, Chief Financial Officer, both of Outdoor Channel Holdings,
Inc., +1-951-699-4749; or Cecilia A. Wilkinson or Angie Yang, both of
PondelWilkinson Inc., Investor Relations, Corporate/Financial Communications,
+1-310-279-5980, investor@pondel.com, for Outdoor Channel Holdings, Inc.

Web site: http://www.earnings.com/

Web site: http://www.outdoorchannelholdings.com/

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