Radio One, Inc. Reports Third Quarter Results

Radio One, Inc. Reports Third Quarter Results

WASHINGTON, Nov. 12, 2014 /PRNewswire/ -- Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported its results for the quarter ended September 30, 2014. Net revenue was approximately $112.2 million, a decrease of 5.3% from the same period in 2013. Station operating income(1) was approximately $38.6 million, a decrease of 13.8% from the same period in 2013. The Company reported operating income of approximately $19.6 million for the three months ended September 30, 2014, compared to operating income of $21.8 million for the same period in 2013. Net loss was approximately $13.2 million or $0.28 per share for each of the quarters ending September 30, 2014 and 2013.

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Alfred C. Liggins, III, Radio One's President and CEO stated, "Our radio business experienced a very soft quarter: we had a perfect storm of weak market revenues and soft ratings in our four largest markets, and political revenues were less than anticipated. We had some ratings challenges in Washington DC, Baltimore and Atlanta in addition to the new competitor in Houston. Management has taken steps to remedy these issues, including a format change in Houston from News to Classic Hip-hop. The initial ratings for our new station, Boom 92, are extremely encouraging, and should mean we reverse the annual $1.5 million of losses that we were incurring on the news format. Outside our top four markets, radio revenues for the third quarter were +1.5% against a flat market. Overall Q4 radio revenue is currently pacing -1.9% and I believe we will have positive momentum going into the new year. Reach Media experienced a similarly weak third quarter, but is performing better in 4th quarter, consistent with the radio division. Both our Internet and Cable Television segments showed improved adjusted EBITDA(2) and margins compared to the prior year."




RESULTS OF OPERATIONS
---------------------


Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------

2014 2013 2014 2013
---- ---- ---- ----

STATEMENT OF OPERATIONS (unaudited) (unaudited)
---------- ----------

(in thousands, except share data) (in thousands, except share
data)
--------------------------------- ----------------------------


NET REVENUE $112,171 $118,391 $331,657 $337,105

OPERATING EXPENSES

Programming and technical, excluding stock-
based compensation 36,520 37,176 105,712 100,649

Selling, general and administrative, excluding
stock-based compensation 37,006 36,400 111,064 110,143

Corporate selling, general and administrative,
excluding stock-based compensation 9,845 9,684 29,284 27,107

Stock-based compensation 61 55 171 145

Depreciation and amortization 9,179 9,571 27,685 28,600

Impairment of long-lived assets - 3,710 - 14,880
---

Total operating expenses 92,611 96,596 273,916 281,524
------

Operating income 19,560 21,795 57,741 55,581

INTEREST INCOME 40 23 174 165

INTEREST EXPENSE 19,350 22,336 60,468 66,811

LOSS ON RETIREMENT OF DEBT - - 5,679 -

OTHER (INCOME) EXPENSE, net (29) (29) 16 (99)
----

Income (loss) before provision for income taxes,
noncontrolling interest in income of
subsidiaries and income from discontinued
operations 279 (489) (8,248) (10,966)

PROVISION FOR INCOME TAXES 9,037 8,415 26,220 19,798
-----

Net loss from continuing operations (8,758) (8,904) (34,468) (30,764)

INCOME FROM DISCONTINUED OPERATIONS, net of tax - - - 893
---

CONSOLIDATED NET LOSS (8,758) (8,904) (34,468) (29,871)

NET INCOME ATTRIBUTABLE TO NONCONTROLLING
INTERESTS 4,462 4,317 14,751 15,670
-----

CONSOLIDATED NET LOSS ATTRIBUTABLE TO COMMON
STOCKHOLDERS $(13,220) $(13,221) $(49,219) $(45,541)
=========


AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS

NET LOSS FROM CONTINUING OPERATIONS $(13,220) $(13,221) $(49,219) $(46,434)

INCOME FROM DISCONTINUED OPERATIONS, net of tax - - - 893
---

CONSOLIDATED NET LOSS ATTRIBUTABLE TO COMMON
STOCKHOLDERS $(13,220) $(13,221) $(49,219) $(45,541)
=========


Weighted average shares outstanding - basic(3) 47,601,371 47,443,031 47,502,733 48,680,979
==========

Weighted average shares outstanding - diluted4 47,601,371 47,443,031 47,502,733 48,680,979
==========









Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------

2014 2013 2014 2013
---- ---- ---- ----

PER SHARE DATA - basic and diluted: (unaudited) (unaudited)
---------- ----------

(in thousands, except per share data) (in thousands, except per share data)
------------------------------------ ------------------------------------


Net loss from continuing operations (basic) $(0.28) $(0.28) $(1.04) $(0.95)

Income from discontinued operations, net of tax (basic) 0.00 0.00 0.00 0.02
---- ---- ---- ----

Consolidated net loss attributable to common stockholders (basic) $(0.28) $(0.28) $(1.04) $ (0.94)*
====== ====== ====== ===================


Net loss from continuing operations (diluted) $(0.28) $(0.28) $(1.04) $(0.95)

Income from discontinued operations, net of tax (diluted) 0.00 0.00 0.00 0.02
---- ---- ---- ----

Consolidated net loss attributable to common stockholders (diluted) $(0.28) $(0.28) $(1.04) $ (0.94)*
====== ====== ====== ===================


SELECTED OTHER DATA

Station operating income (1) $38,645 $44,815 $114,881 $126,313

Station operating income margin (% of net revenue) 34.5% 37.9% 34.6% 37.5%


Station operating income reconciliation:


Consolidated net loss attributable to common stockholders $(13,220) $(13,221) $(49,219) $(45,541)

Add back non-station operating income items included in consolidated net loss:

Interest income (40) (23) (174) (165)

Interest expense 19,350 22,336 60,468 66,811

Provision for income taxes 9,037 8,415 26,220 19,798

Corporate selling, general and administrative expenses 9,845 9,684 29,284 27,107

Stock-based compensation 61 55 171 145

Loss on retirement of debt - - 5,679 -

Other (income) expense, net (29) (29) 16 (99)

Depreciation and amortization 9,179 9,571 27,685 28,600

Noncontrolling interest in income of subsidiaries 4,462 4,317 14,751 15,670

Impairment of long-lived assets - 3,710 - 14,880

Income from discontinued operations, net of tax - - - (893)

Station operating income $38,645 $44,815 $114,881 $126,313
======= ======= ======== ========


Adjusted EBITDA(2) $28,800 $35,131 $85,597 $99,206


Adjusted EBITDA reconciliation:


Consolidated net loss attributable to common stockholders $(13,220) $(13,221) $(49,219) $(45,541)

Interest income (40) (23) (174) (165)

Interest expense 19,350 22,336 60,468 66,811

Provision for income taxes 9,037 8,415 26,220 19,798

Depreciation and amortization 9,179 9,571 27,685 28,600
----- ----- ------ ------

EBITDA $24,306 $27,078 $64,980 $69,503

Stock-based compensation 61 55 171 145

Loss on retirement of debt - - 5,679 -

Other (income) expense, net (29) (29) 16 (99)

Noncontrolling interest in income of subsidiaries 4,462 4,317 14,751 15,670

Impairment of long-lived assets - 3,710 - 14,880

Income from discontinued operations, net of tax - - - (893)
--- --- --- ----

Adjusted EBITDA $28,800 $35,131 $85,597 $99,206
======= ======= ======= =======


*Per share amounts do not add due to rounding.





September 30, 2014 December 31, 2013
------------------ -----------------

(unaudited)
----------

(in thousands)
-------------

SELECTED BALANCE
SHEET DATA:

Cash and cash equivalents $55,080 $56,676

Intangible assets, net 1,127,090 1,147,017

Total assets 1,391,639 1,414,355

Total debt (including current
portion) 820,843 815,635

Total liabilities 1,146,834 1,117,381

Total equity 236,252 284,975

Redeemable noncontrolling interest 8,553 11,999

Noncontrolling interest 203,660 207,026


Current Amount Applicable Interest
Outstanding Rate
----------- ----

(in thousands)
-------------

SELECTED LEVERAGE DATA:

Senior bank term debt, net of
original issue discount of
approximately $2.6 million (subject
to variable rates) (a) $366,843 7.50%

9.25% senior subordinated notes due
February 2020 (fixed rate) 335,000 9.25%

10% Senior Secured TV One Notes due
March 2016 (fixed rate) 119,000 10.00%



(a) Subject to variable Libor plus a
spread that is incorporated
into the applicable interest
rate set forth above.
Cautionary Note Regarding Forward-Looking Statements

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. Forward-looking statements represent management's current expectations and are based upon information available to Radio One at the time of this release. These forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond Radio One's control, that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially are described in Radio One's reports on Forms 10-K, 10-Q, 8-K and other filings with the Securities and Exchange Commission (the "SEC"). Radio One does not undertake any duty to update any forward-looking statements.

Net revenue decreased to approximately $112.2 million for the quarter ended September 30, 2014, from approximately $118.4 million for the same period in 2013, a decrease of 5.3%, resulting primarily from declines in our four largest radio markets. Net revenues from our radio broadcasting segment decreased 8.1% for the quarter ended September 30, 2014, versus the same period in 2013. We experienced net revenue growth most significantly in our Charlotte, Dallas and Detroit markets, countered by our Atlanta, Baltimore, Houston, Philadelphia, Richmond, St. Louis and Washington DC markets experiencing the most significant declines. Reach Media's net revenues decreased 19.3% for the quarter ended September 30, 2014, compared to the same period in 2013 due to a mix of customer turnover and lower rates. We recognized approximately $39.5 million of revenue from our cable television segment during the three months ended September 30, 2014, compared to approximately $37.8 million for the same period in 2013, the increase of approximately $1.7 million due primarily from an increase in both affiliate and advertising sales. Finally, net revenues for our internet business decreased 4.9% for the three months ended September 30, 2014, compared to the same period in 2013 due to a decrease in direct revenues.

Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of long-lived assets, increased to approximately $83.4 million for the quarter ended September 30, 2014, up 0.1% from the approximately $83.3 million incurred for the comparable quarter in 2013.

Depreciation and amortization expense decreased 4.1% to approximately $9.2 million compared to approximately $9.6 million for the quarters ended September 30, 2014 and 2013, respectively. The decrease was due to the completion of amortization for certain intangible assets and the completion of useful lives for certain assets.

There was no impairment of long-lived assets for the three months ended September 30, 2014. Impairment of long-lived assets for the three months ended September 30, 2013, was approximately $3.7 million and related to a non-cash impairment charge recorded to reduce the carrying value of our Cleveland and Boston radio broadcasting licenses.

Interest expense decreased to approximately $19.4 million for the quarter ended September 30, 2014, compared to approximately $22.3 million for the same period in 2013. The primary driver of the decrease in interest expense is the lower interest rate associated with the 2020 Notes, compared to the 2016 Notes which were settled during the first quarter of 2014. The Company made cash interest payments of approximately $26.3 million on all outstanding instruments for the quarter ended September 30, 2014, compared to cash interest payments of approximately $20.9 million for the quarter ended September 30, 2013. Cash interest payments associated with the 2020 Notes began August 15, 2014.

The provision for income taxes for the quarter ended September 30, 2014, was approximately $9.0 million compared to approximately $8.4 million for the comparable period in 2013, primarily attributable to the deferred tax liability ("DTL") for indefinite-lived intangible assets. The increase in tax provision is primarily due to provision to return adjustments. The Company paid $117,000 and $221,000 for income taxes for the quarters ended September 30, 2014 and 2013, respectively.

The increase in noncontrolling interests in income of subsidiaries is due primarily to greater net income generated by TV One during the three months ended September 30, 2014, compared to the 2013 period. Reach Media generated lower net income during the three months ended September 30, 2014, compared to the 2013 period, which partially offset the income generated by TV One.

Other pertinent financial information includes capital expenditures of approximately $1.3 million for each of the quarters ended September 30, 2014 and 2013, respectively. The Company received dividends from TV One in the amount of approximately $8.9 million and $6.2 million for the quarters ended September 30, 2014 and 2013, respectively. As of September 30, 2014, the Company had total debt (net of cash balances) of approximately $765.8 million. The Company's cash and cash equivalents by segment are as follows: Radio and Internet, approximately $32.7 million; Reach Media, approximately $3.4 million; and Cable Television, approximately $19.0 million. In addition to cash and cash equivalents, the cable television segment also has short-term investments of approximately $2.1 million and long-term investments of $803,000. During the three months ended September 30, 2013, the Company repurchased 512,300 shares of Class D common stock in the amount of approximately $1.2 million and 1,100 shares of Class A common stock in the amount of $3,000. During the nine months ended September 30, 2013, the Company repurchased 2,630,574 shares of Class D common stock in the amount of approximately $5.4 million and 32,669 shares of Class A common stock in the amount of $71,000. There were no stock repurchases made during the three or nine month periods ended September 30, 2014.

Supplemental Financial Information:

For comparative purposes, the following more detailed, unaudited statements of operations for the three and nine months ended September 30, 2014 and 2013 are included. These detailed, unaudited and adjusted statements of operations include certain reclassifications associated with accounting for discontinued operations. These reclassifications had no effect on previously reported net income or loss, or any other previously reported statements of operations, balance sheet or cash flow amounts.




Three Months Ended September 30, 2014
-------------------------------------

(in thousands, unaudited)
------------------------


Corporate/

Radio Reach Cable Eliminations/

Consolidated Broadcasting Media Internet Television Other
------------ ------------ ----- -------- ---------- -----


STATEMENT OF OPERATIONS:


NET REVENUE $112,171 $54,498 $13,618 $5,822 $39,488 $(1,255)

OPERATING EXPENSES:

Programming and technical 36,520 11,185 8,018 2,239 16,565 (1,487)

Selling, general and
administrative 37,006 21,288 4,088 3,133 8,947 (450)

Corporate selling, general and
administrative 9,845 - 1,200 - 1,583 7,062

Stock-based compensation 61 5 - - - 56

Depreciation and amortization 9,179 1,241 285 598 6,523 532


Total operating expenses 92,611 33,719 13,591 5,970 33,618 5,713


Operating income (loss) 19,560 20,779 27 (148) 5,870 (6,968)

INTEREST INCOME 40 - - - 13 27

INTEREST EXPENSE 19,350 255 - - 3,039 16,056

OTHER INCOME, net (29) - - - - (29)


Income (loss) before
provision for income
taxes, noncontrolling
interest in income of
subsidiaries and
income from
discontinued
operations 279 20,524 27 (148) 2,844 (22,968)

PROVISION FOR INCOME TAXES 9,037 9,014 23 - - -


Net (loss) income from
continuing operations (8,758) 11,510 4 (148) 2,844 (22,968)

INCOME FROM DISCONTINUED
OPERATIONS, net of tax - - - - - -


CONSOLIDATED NET (LOSS) INCOME (8,758) 11,510 4 (148) 2,844 (22,968)

NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS 4,462 - - - - 4,462

NET (LOSS) INCOME ATTRIBUTABLE
TO COMMON STOCKHOLDERS $(13,220) $11,510 $4 $(148) $2,844 $(27,430)



Adjusted EBITDA(2) $28,800 $22,025 $312 $450 $12,393 $(6,380)






Three Months Ended September 30, 2013
-------------------------------------

(in thousands, unaudited)
------------------------


Corporate/

Radio Reach Cable Eliminations/

Consolidated Broadcasting Media Internet Television Other
------------ ------------ ----- -------- ---------- -----


STATEMENT OF OPERATIONS:


NET REVENUE $118,391 $59,281 $16,872 $6,125 $37,786 $(1,673)

OPERATING EXPENSES:

Programming and technical 37,176 10,946 8,088 2,160 17,541 (1,559)

Selling, general and
administrative 36,400 21,074 4,445 3,948 7,260 (327)

Corporate selling, general and
administrative 9,684 - 1,168 - 1,669 6,847

Stock-based compensation 55 14 - - - 41

Depreciation and amortization 9,571 1,645 310 588 6,555 473

Impairment of long-lived assets 3,710 3,710 - - - -


Total operating expenses 96,596 37,389 14,011 6,696 33,025 5,475


Operating income (loss) 21,795 21,892 2,861 (571) 4,761 (7,148)

INTEREST INCOME 23 - - - 17 6

INTEREST EXPENSE 22,336 303 - - 3,039 18,994

OTHER INCOME, net (29) - - - - (29)


(Loss) income before
provision for income
taxes,
noncontrolling
interest in income
of subsidiaries and
income from
discontinued
operations (489) 21,589 2,861 (571) 1,739 (26,107)

PROVISION FOR INCOME TAXES 8,415 7,387 1,028 - - -


Net (loss) income
from continuing
operations (8,904) 14,202 1,833 (571) 1,739 (26,107)

INCOME FROM DISCONTINUED
OPERATIONS, net of tax - - - - - -


CONSOLIDATED NET (LOSS) INCOME (8,904) 14,202 1,833 (571) 1,739 (26,107)

NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS 4,317 - - - - 4,317

NET (LOSS) INCOME ATTRIBUTABLE
TO COMMON STOCKHOLDERS $(13,221) $14,202 $1,833 $(571) $1,739 $(30,424)



Adjusted EBITDA(2) $35,131 $27,261 $3,171 $17 $11,316 $(6,634)






Nine Months Ended September 30, 2014
------------------------------------

(in thousands, unaudited)
------------------------


Corporate/

Radio Reach Cable Eliminations/

Consolidated Broadcasting Media Internet Television Other
------------ ------------ ----- -------- ---------- -----


STATEMENT OF OPERATIONS:


NET REVENUE $331,657 $159,906 $40,433 $18,175 $117,166 $(4,023)

OPERATING EXPENSES:

Programming and technical 105,712 32,758 23,899 6,949 46,312 (4,206)

Selling, general and
administrative 111,064 64,421 12,762 10,468 25,051 (1,638)

Corporate selling, general and
administrative 29,284 - 3,566 - 5,532 20,186

Stock-based compensation 171 15 - - - 156

Depreciation and amortization 27,685 3,832 862 1,830 19,597 1,564


Total operating expenses 273,916 101,026 41,089 19,247 96,492 16,062


Operating income (loss) 57,741 58,880 (656) (1,072) 20,674 (20,085)

INTEREST INCOME 174 - - - 40 134

INTEREST EXPENSE 60,468 860 - - 9,117 50,491

LOSS ON RETIREMENT OF DEBT 5,679 - - - - 5,679

OTHER EXPENSE (INCOME), net 16 (1) - - 96 (79)


(Loss) income before
provision for income
taxes,
noncontrolling
interest in income
of subsidiaries and
income from
discontinued
operations (8,248) 58,021 (656) (1,072) 11,501 (76,042)

PROVISION FOR INCOME TAXES 26,220 26,174 46 - - -


Net (loss) income
from continuing
operations (34,468) 31,847 (702) (1,072) 11,501 (76,042)

INCOME FROM DISCONTINUED
OPERATIONS, net of tax - - - - - -


CONSOLIDATED NET (LOSS) INCOME (34,468) 31,847 (702) (1,072) 11,501 (76,042)

NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS 14,751 - - - - 14,751

NET (LOSS) INCOME ATTRIBUTABLE
TO COMMON STOCKHOLDERS $(49,219) $31,847 $(702) $(1,072) $11,501 $(90,793)



Adjusted EBITDA(2) $85,597 $62,727 $206 $758 $40,271 $(18,365)






Nine Months Ended September 30, 2013
------------------------------------

(in thousands, unaudited)
------------------------


Corporate/

Radio Reach Cable Eliminations/

Consolidated Broadcasting Media Internet Television Other
------------ ------------ ----- -------- ---------- -----


STATEMENT OF OPERATIONS:


NET REVENUE $337,105 $167,898 $44,428 $17,612 $111,506 $(4,339)

OPERATING EXPENSES:

Programming and technical 100,649 32,690 23,003 6,142 42,873 (4,059)

Selling, general and
administrative 110,143 63,938 13,762 11,445 21,927 (929)

Corporate selling, general and
administrative 27,107 - 3,382 - 5,899 17,826

Stock-based compensation 145 38 - - - 107

Depreciation and amortization 28,600 4,720 950 1,902 19,773 1,255

Impairment of long-lived assets 14,880 14,880 - - - -


Total operating expenses 281,524 116,266 41,097 19,489 90,472 14,200


Operating income (loss) 55,581 51,632 3,331 (1,877) 21,034 (18,539)

INTEREST INCOME 165 - - - 44 121

INTEREST EXPENSE 66,811 888 - - 9,117 56,806

OTHER INCOME, net (99) (11) - - - (88)


(Loss) income before
provision for income
taxes,
noncontrolling
interest in income
of subsidiaries and
income from
discontinued
operations (10,966) 50,755 3,331 (1,877) 11,961 (75,136)

PROVISION FOR INCOME TAXES 19,798 18,298 1,500 - - -


Net (loss) income
from continuing
operations (30,764) 32,457 1,831 (1,877) 11,961 (75,136)

INCOME FROM DISCONTINUED
OPERATIONS, net of tax 893 893 - - - -


CONSOLIDATED NET (LOSS) INCOME (29,871) 33,350 1,831 (1,877) 11,961 (75,136)

NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS 15,670 - - - - 15,670

NET (LOSS) INCOME ATTRIBUTABLE
TO COMMON STOCKHOLDERS $(45,541) $33,350 $1,831 $(1,877) $11,961 $(90,806)



Adjusted EBITDA(2) $99,206 $71,270 $4,281 $25 $40,807 $(17,177)

Radio One, Inc. will hold a conference call to discuss its results for third fiscal quarter of 2014. This conference call is scheduled for Wednesday, November 12, 2014 at 10:00 a.m. EST. To participate on this call, U.S. callers may dial toll-free 1-800-288-8967; international callers may dial direct (+1) 612-332-0345.

A replay of the conference call will be available from 12:00 p.m. EST November 12, 2014 until 11:59 p.m. EST November 14, 2014. Callers may access the replay by calling 1-800-475-6701; international callers may dial direct (+1) 320-365-3844. The replay Access Code is 337345. Access to live audio and a replay of the conference call will also be available on Radio One's corporate website at www.radio-one.com. The replay will be made available on the website for seven days after the call.

Radio One, Inc., together with its subsidiaries (http://www.radio-one.com/), is a diversified media company that primarily targets African-American and urban consumers. The Company is one of the nation's largest radio broadcasting companies, currently owning and/or operating 54 broadcast stations located in 16 urban markets in the United States. Through its controlling interest in Reach Media, Inc. (http://www.blackamericaweb.com/), the Company also operates syndicated programming including the Tom Joyner Morning Show, the Rickey Smiley Morning Show, the Yolanda Adams Morning Show, the Russ Parr Morning Show, the DL Hughley Show, Bishop T.D. Jakes' "Empowering Moments", and the Reverend Al Sharpton Show. Beyond its core radio broadcasting franchise, Radio One owns Interactive One (http://www.interactiveone.com/), an online platform serving the African-American community through social content, news, information, and entertainment. Interactive One operates a number of branded sites, including News One, UrbanDaily, HelloBeautiful and social networking websites, including BlackPlanet and MiGente. In addition, the Company owns a controlling interest in TV One, LLC (http://www.tvoneonline.com/), a cable/satellite network programming primarily to African-Americans.

Notes:

1 "Station operating income" consists of net loss before depreciation and amortization, corporate expenses, stock-based compensation, equity in income of affiliated company, income taxes, noncontrolling interest in income (loss) of subsidiaries, interest expense, impairment of long-lived assets, other (income) expense, loss (gain) on retirement of debt, (income) loss from discontinued operations, net of tax, interest income and gain on purchase of affiliated company. Station operating income is not a measure of financial performance under generally accepted accounting principles. Nevertheless station operating income is a significant basis used by our management to measure the operating performance of our stations within the various markets because station operating income provides helpful information about our results of operations apart from expenses associated with our fixed assets and long-lived intangible assets, income taxes, investments, debt financings and retirements, overhead, stock-based compensation, impairment charges, and asset sales. Our measure of station operating income may not be comparable to similarly titled measures of other companies as our definition includes the results of all four segments (Radio Broadcasting, Reach Media, Internet and Cable Television). Station operating income does not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as an alternative to those measurements as an indicator of our performance. A reconciliation of net income (loss) to station operating income has been provided in this release.

2 "Adjusted EBITDA" consists of net loss plus (1) depreciation, amortization, income taxes, interest expense, noncontrolling interest in income of subsidiaries, impairment of long-lived assets, stock-based compensation, loss on retirement of debt, loss from discontinued operations, net of tax, less (2) equity in income of affiliated company, other income, interest income, gain on retirement of debt and gain on purchase of affiliated company. Net income before interest income, interest expense, income taxes, depreciation and amortization is commonly referred to in our business as "EBITDA." Adjusted EBITDA and EBITDA are not measures of financial performance under generally accepted accounting principles. However, we believe Adjusted EBITDA is often a useful measure of a company's operating performance and is a significant basis used by our management to measure the operating performance of our business because Adjusted EBITDA excludes charges for depreciation, amortization and interest expense that have resulted from our acquisitions and debt financing, our taxes, impairment charges, as well as our equity in (income) loss of our affiliated company, gain on retirements of debt, and any discontinued operations. Accordingly, we believe that Adjusted EBITDA provides useful information about the operating performance of our business, apart from the expenses associated with our fixed assets and long-lived intangible assets, capital structure or the results of our affiliated company. Adjusted EBITDA is frequently used as one of the bases for comparing businesses in our industry, although our measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies as our definition includes the results of all four segments (Radio Broadcasting, Reach Media, Internet and Cable Television). Adjusted EBITDA and EBITDA do not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as alternatives to those measurements as an indicator of our performance. A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA has been provided in this release.

3 For the three months ended September 30, 2014 and 2013, Radio One had 47,601,371 and 47,443,031 shares of common stock outstanding on a weighted average basis (basic), respectively. For the nine months ended September 30, 2014 and 2013, Radio One had 47,502,733 and 48,680,979 shares of common stock outstanding on a weighted average basis (basic), respectively.

4 For the three months ended September 30, 2014 and 2013, Radio One had 47,601,371 and 47,443,031 shares of common stock outstanding on a weighted average basis (fully diluted), for outstanding stock options, respectively. For the nine months ended September 30, 2014 and 2013, Radio One had 47,502,733 and 48,680,979 shares of common stock outstanding on a weighted average basis (fully diluted), for outstanding stock options, respectively.

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SOURCE Radio One, Inc.

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http://photoarchive.ap.org/
Radio One, Inc.

CONTACT: Peter D. Thompson, EVP and CFO, (301) 429-4638

Web Site: http://www.radio-one.com


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