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Radio One Inc. Reports Operating Results (10-Q)

November 13, 2012 | About:
10qk

10qk

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Radio One Inc. (ROIA) filed Quarterly Report for the period ended 2012-09-30.

Radio One, Inc. has a market cap of $44.1 million; its shares were traded at around $0.82 with and P/S ratio of 0.1.

Highlight of Business Operations:

During the three months ended September 30, 2012 and 2011, approximately 56.9% and 57.2%, respectively, of our net revenue was generated from the sale of advertising in our core radio business, excluding Reach Media. Of our total net revenue, for the three months ended September 30, 2012, approximately 42.2% of our net revenue was generated from local advertising and approximately 33.7% was generated from national advertising, including network advertising. In comparison, during the three months ended September 30, 2011, approximately 43.4% of our net revenue was generated from local advertising and approximately 32.8% was generated from national advertising, including network advertising. During the nine months ended September 30, 2012 and 2011, approximately 56.0% and 63.9% respectively, of our net revenue was generated from the sale of advertising in our core radio business, excluding Reach Media. Of our total net revenue, for the nine months ended September 30, 2012, approximately 41.4% of our net revenue was generated from local advertising and approximately 33.1% was generated from national advertising, including network advertising. In comparison, during the nine months ended September 30, 2011, approximately 46.7% of our net revenue was generated from local advertising and approximately 32.7% was generated from national advertising, including network advertising. National advertising also includes advertising revenue generated from our Internet segment. The balance of net revenue from our radio franchise was generated from tower rental income, ticket sales and revenue related to our sponsored events, management fees and other revenue. The change in revenue mix is due to the consolidation of TV One.

During the three months ended September 30, 2012, we recognized approximately $110.0 million in net revenue compared to approximately $104.4 million during the same period in 2011. These amounts are net of agency and outside sales representative commissions, which were approximately $9.3 million during the three months ended September 30, 2012, compared to approximately $8.4 million for the comparable period in 2011. We began to consolidate the results of TV One during the second quarter of 2011 and recognized approximately $33.2 million of revenue from our new cable television segment during the three months ended September 30, 2012 compared to $29.5 million for the comparable period in 2011. Net revenue for our radio broadcasting segment, including syndicated programming, increased 5.3% for the quarter ended September 30, 2012 compared to the same period in 2011. Our Baltimore, Cleveland, Columbus, Detroit, Indianapolis, Raleigh and Washington D.C. clusters posted the most significant quarterly growth, while our Houston, Philadelphia and St. Louis markets posted the most significant declines. Reach Media’s net revenues decreased 11.3% in the third quarter 2012 compared to the same period in 2011 partially due to changes to certain of Reach Media’s affiliate agreements that became effective on January 1, 2012 as well as lower than expected sponsorships associated with certain events. Net revenues for our internet business decreased 8.9% for the three months ended September 30, 2012 compared to the same period in 2011 due to a decrease in direct sales.

During the nine months ended September 30, 2012, we recognized approximately $318.9 million in net revenue compared to approximately $266.5 million during the same period in 2011. These amounts are net of agency and outside sales representative commissions, which were approximately $25.7 million during the nine months ended 2012, compared to approximately $23.9 million during the same period in 2011. We began to consolidate the results of TV One during the three months ended June 30, 2011 and recognized approximately $54.7 million of revenue from our cable television segment for the period April 15, 2011 through September 30, 2011 versus approximately $97.7 million for the nine months ended September 30, 2012. Net revenue for our radio broadcasting segment increased 5.5% for the nine months ended September 30, 2012. Our Atlanta, Baltimore, Cincinnati, Cleveland, Detroit, Indianapolis, Raleigh and Washington DC markets experienced the most significant net revenue growth, while our Houston, Philadelphia and St. Louis markets experienced declines. Reach Media’s net revenue decreased 10.3% for the nine months ended September 30, 2012 compared to the same period in 2011 partially due to changes to certain of Reach Media’s affiliate agreements that became effective on January 1, 2012 as well as lower than expected sponsorships associated with certain events. Net revenue for our internet business increased 15.4% for the nine months ended September 30, 2012 compared to the same period in 2011.

Selling, general and administrative expenses include expenses associated with our sales departments, offices and facilities and personnel (outside of our corporate headquarters), marketing and promotional expenses, special events and sponsorships and back office expenses. Expenses to secure ratings data for our radio stations and visitors’ data for our websites are also included in selling, general and administrative expenses. In addition, selling, general and administrative expenses for the Radio segment and Internet segment include expenses related to the advertising traffic (scheduling and insertion) functions. Selling, general and administrative expenses also include membership traffic acquisition costs for our online business. During the nine months ended September 30, 2012 and 2011, our cable television segment recognized approximately $22.0 million and $14.0 million, respectively. The increase was primarily due to the impact of consolidating nine months of results of TV One in 2012 versus a shorter period in 2011. In addition, there are increased payroll costs, research expenses and traffic acquisition costs at our other segments during the nine months ended September 30, 2012 compared to the same period in 2011.

Net cash flows used in investing activities were approximately $3.9 million for the nine months ended September 30, 2012 compared to net cash flows provided by investing activities of approximately $59.8 million for the nine months ended September 30, 2011. Capital expenditures, including digital tower and transmitter upgrades, and deposits for station equipment and purchases were approximately $9.5 million and $5.4 million for the nine months ended September 30, 2012 and 2011, respectively. Proceeds from sales of investment securities were approximately $6.2 million for the nine months ended September 30, 2012. Cash flow from investing activities for the nine months ended September 30, 2011 were primarily due to the net cash and investments acquired in connection with the TV One consolidation of approximately $65.2 million.

Read the The complete Report

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