Regent Communications Reports Second Quarter 2007 Results

Regent Communications Reports Second Quarter 2007 Results

Second Quarter Revenue Growth Outperforms Industry

Integrated Digital Strategy Proceeding on Plan

Full-Year Revenues on Track to Exceed $100 million

CINCINNATI, Aug. 7 /PRNewswire-FirstCall/ -- Regent Communications, Inc. (NASDAQ:RGCI) announced today financial results for the quarter and six months ended June 30, 2007.

For the second quarter of 2007, net broadcast revenues increased 25.3% to $26.4 million from $21.1 million reported for the second quarter of 2006. For the same period, station operating expenses increased 19.5% to $16.8 million in 2007 from $14.1 million in 2006. The Company reported net income of $3.0 million for the quarter, or $0.08 per share, compared with reported net income of $2.0 million, or $0.05 per share, in the same period last year.

For the first six months of 2007, net broadcast revenues increased 26.8% to $48.4 million compared to $38.2 million in the same period of 2006. For the same period, station operating expenses increased 20.3% to $32.5 million in 2007 from $27.0 million in 2006. The Company reported net income of $1.8 million for the first six months of 2007, or $0.05 per share, compared with reported net income of $2.1 million, or $0.05 per share, in 2006.

"We executed against our strategy on all fronts during the second quarter," said Bill Stakelin, President and CEO of Regent Communications. "Our revenues once again outperformed the industry and the majority of our peers, as we focused on monetizing our leading audience shares and driving local ad sales. We also made significant progress in implementing our online strategy, as we move forward in launching a fully integrated web platform across our station group. Overall, we believe the concerted investments we are making in our content, promotion and digital infrastructure will further increase the value of our assets and enhance our ability to drive revenue and cash flow. We are well on track to exceed $100 million in revenues in 2007."

Below is 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     Six Months Ended                                       June 30,               June 30,                                    2007       2006       2007       2006    Broadcast revenues, net    of agency commissions         $26,392    $21,067    $48,437    $38,185   Station operating expenses      16,846     14,092     32,477     26,987   Corporate general and    administrative expenses         2,048      1,656      4,062      3,425   Depreciation and amortization    1,100      1,095      2,979      2,277   Gain on sale of    long-lived assets                  (1)        (5)        (1)       (25)   Operating income                 6,399      4,229      8,920      5,521   Interest expense                (4,293)    (1,339)    (8,417)    (2,564)   Realized and unrealized gain    on derivatives                  3,091          -      2,501          -   Other income, net                   47         19         99         63   Income from continuing operations    before income taxes             5,244      2,909      3,103      3,020   Income tax expense              (2,205)    (1,029)    (1,269)    (1,076)   Income from continuing    operations                      3,039      1,880      1,834      1,944   Gain on discontinued operations,    net of income tax expense           1        132          7        132   Net income                      $3,040     $2,012     $1,841     $2,076   Basic net income per    common share:      Income from continuing       operations                   $0.08      $0.05      $0.05      $0.05      Gain on discontinued       operations                   $0.00      $0.00      $0.00      $0.00      Net income                    $0.08      $0.05      $0.05      $0.05   Diluted net income per    common share:      Income from continuing       operations                   $0.08      $0.05      $0.05      $0.05      Gain from discontinued       operations                   $0.00      $0.00      $0.00      $0.00      Net income                    $0.08      $0.05      $0.05      $0.05    Common shares for    basic calculation              38,282     40,593     38,244     41,063   Common shares for    diluted calculation            38,324     40,593     38,272     41,064      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 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, net income, or cash provided by operating activities as an indicator of Regent's performance or liquidity.

Station operating income

Second quarter 2007 station operating income increased 36.9% to $9.5 million from $7.0 million in the same period in 2006. For the six months ended June 30, 2007, station operating income increased 42.5% to $16.0 million from $11.2 million reported for the same period in 2006.

The Company believes that station operating income is a performance measure that helps investors better understand radio station operations. Additionally, Regent and other media companies have customarily been measured by analysts and other investors on their ability to generate station operating income. The following table reconciles operating income, which the Company believes is the most directly comparable GAAP financial measure, to station operating income (in thousands):

                                          Three Months      Six Months                                             Ended             Ended   Station operating income                 June 30,         June 30,                                          2007    2006     2007     2006    Operating income                      $6,399  $4,229   $8,920   $5,521    Plus:   Corporate general and    administrative expenses               2,048   1,656    4,062    3,425   Depreciation and amortization          1,100   1,095    2,979    2,277   Less:   Gain on sale of long-lived assets          1       5        1       25    Station operating income              $9,546  $6,975  $15,960  $11,198      Same station results  

On a same station basis, which includes results from stations owned and operated in continuing operations during the entire second quarter for both the 2007 and 2006 periods and excludes barter, net broadcast revenue for the second quarter of 2007 increased 1.4% to $20.5 million from $20.2 million in the second quarter of 2006. Same station operating income was flat in the second quarter of 2007 compared to the second quarter of 2006. 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 second quarter of 2006 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 to same station net broadcast revenue and same station operating income (in thousands):

                                              Three Months Ended   Same Station Net Broadcast Revenue               June 30,                                               2007        2006    Net broadcast revenue                     $26,392      $21,067    Less:   Net results of stations not included    in same station category                   5,024           25   Barter transactions                           836          801    Same station net broadcast revenue        $20,532      $20,241                                                Three Months Ended   Same Station Operating Income                   June 30,                                               2007        2006    Operating income                           $6,399       $4,229    Plus:   Corporate general and administrative    expenses                                   2,048        1,656   Depreciation and amortization               1,100        1,095    Less:   Gain on sale of long-lived assets               1            5    Station operating income                    9,546        6,975    Adjustments:   Net results of stations not included    in same station category                  (2,485)          70   Barter transactions                            72           92    Same station operating income              $7,133       $7,137      Free cash flow  

Free cash flow is defined as net income plus depreciation, amortization, and other non-cash expenses, less maintenance capital expenditures and net gains on the sale of stations and long-lived assets. Free cash flow decreased 18.5% to $2.8 million in the second quarter of 2007 from $3.5 million in the second quarter of 2006. For the six months ended June 30, 2007, free cash flow decreased 39.7% to $2.9 million in 2007 from $4.7 million in 2006. Free cash flow in the second quarter and year to date periods of 2007 were negatively impacted by increased interest rates and increased borrowings related to acquisitions in the fourth quarter of 2006. 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     Six Months                                              Ended           Ended                                             June 30,        June 30,   Free Cash Flow                         2007    2006    2007    2006    Net income                            $3,040  $2,012  $1,841  $2,076    Add:   Depreciation and amortization (1)      1,100   1,162   2,979   2,439   Non-cash interest expense                192      92     284     184   Non-cash taxes (2)                     2,152   1,096   1,243   1,142   Other items, net (3)                     383     251     543     473    Less:   Non cash unrealized gain on    derivatives                           2,840       -   1,999       -   Maintenance capital expenditures         728     700   1,215   1,036   Digital upgrade capital expenditures     465     436     819     539    Free cash flow                        $2,834  $3,477  $2,857  $4,739    (1) Includes depreciation and amortization reclassified to discontinued       operations   (2) Includes taxes reclassified to discontinued operations   (3) Includes: non-cash compensation; barter; and gain on the sale of long-       lived assets     

The most directly comparable GAAP measure to free cash flow is net cash provided by operating activities. The following table reconciles net cash provided by operating activities to free cash flow (in thousands):

                                            Three Months       Six Months                                               Ended             Ended                                              June 30,          June 30,   Free Cash Flow                           2007     2006     2007     2006   Net cash provided by operating    activities                            $1,590   $2,599   $3,596   $5,430    Less:   Other non-cash expense, net               219      188      397      344    Plus:   Changes in operating assets and    liabilities                            2,656    2,202    1,692    1,228    Less:   Maintenance capital expenditures          728      700    1,215    1,036   Digital upgrade capital expenditures      465      436      819      539    Free cash flow                         $2,834   $3,477   $2,857   $4,739      Selected Data  

At June 30, 2007 outstanding debt was approximately $215.4 million and cash was approximately $1.3 million. Total capital expenditures in the second quarter ended June 30, 2007 were approximately $1.2 million.

Outlook

Regent has adopted a policy to provide guidance to investors regarding our financial prospects. The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Regent undertakes no obligation to update these statements.

Regent projects third quarter 2007 reported consolidated net broadcast revenues and station operating income of approximately $26.2 to $26.8 million and $9.3 to $9.7 million, respectively. Regent expects earnings per share of approximately $0.04 per share. The following table reconciles projected operating income, which the Company believes is the most directly comparable GAAP measure, to station operating income (in millions):

                                                       Three Months Ending                                                            9/30/2007   Station Operating Income                              Guidance Range                                                     Lower             Upper    Operating income                                  $6.3              $6.7    Plus:   Corporate general and administrative expenses      1.9               1.9   Depreciation and amortization                      1.1               1.1    Station operating income                          $9.3              $9.7     

The Company expects same station net broadcast revenue to be flat to down low single digits for the third quarter of 2007 compared to the third quarter of 2006. The Company expects capital expenditures for the third quarter to be approximately $0.9 million, including approximately $0.2 million related to the conversion of stations to digital technology.

Teleconference

The Company will host a teleconference to discuss its second quarter results on Tuesday, August 7th at 9:00 a.m. Eastern Time. To access the teleconference, please dial 973-935-8767 ten minutes prior to the start time. 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 at its scheduled time, there will be a replay available through Tuesday, August 14, 2007, which can be accessed by

dialing 877-519-4471 (U.S.) or 973-341-3080 (Int'l), passcode 8982779. The webcast will also be archived on the Company's website 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 68 stations located in 14 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; fluctuations in the cost of operating radio properties; the ability to manage growth; the ability to integrate these and other acquisitions; and changes in the regulatory climate affecting radio broadcast companies, including uncertainties surrounding recent Federal Communication Commission rules regarding broadcast ownership limits. 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.

CONTACT: Tony Vasconcellos, Executive Vice President and Chief Financial
Officer of Regent Communications, Inc., +1-859-292-0030; or Dan Harris of
Brainerd Communicators, Inc., +1-212-986-6667

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

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Profile: International Entertainment