Regent Communications Reports Second Quarter 2008 Results
Regent Communications Reports Second Quarter 2008 Results
- Regent's performance well ahead of industry -
CINCINNATI, Aug. 7 /PRNewswire-FirstCall/ -- Regent Communications, Inc. (NASDAQ:RGCI) announced today financial results for the quarter and six months ended June 30, 2008.
For the second quarter of 2008, net broadcast revenues increased 2.9% to $26.5 million from $25.7 million during the second quarter of 2007. For the same period, station operating expenses of $16.4 million remained flat in 2008 compared to 2007. The Company reported net income of $5.7 million for the quarter, or $0.15 per share, compared with reported net income of $3.0 million, or $0.08 per share, in the same period last year. Results for 2008 and 2007 were impacted by realized and unrealized gains and losses on derivatives.
For the first six months of 2008, net broadcast revenues of $47.3 million were slightly up compared to the same period of 2007. For the same period, station operating expenses decreased 1.1% to $31.2 million in 2008 from $31.6 million in 2007. The Company reported net income of $2.7 million for the first six months of 2008, or $0.07 per share, compared with reported net income of $1.8 million, or $0.05 per share, in 2007.
"In the second quarter, we continued to find ways to outperform the industry and our portfolio of markets due to the excellent execution of our aggressive local operating strategy," said Bill Stakelin, President and CEO of Regent Communications. "The concerted investments we have made in our stations and digital footprint have enhanced our ability to consistently deliver valuable audiences to our local advertisers. Further, our sales teams are now fully versed in cross-marketing our integrated platform and they are working diligently to continue to increase our share of ad dollars. Looking ahead, we continue to face headwinds from a slowing economy and soft advertising market, but we are controlling our costs and implementing our strategic plan."
Below are 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, 2008 2007 2008 2007 Broadcast revenues, net of agency commissions $26,482 $25,736 $47,315 $47,244 Station operating expenses 16,394 16,381 31,235 31,594 Corporate general and administrative expenses 1,916 2,048 3,805 4,062 Depreciation and amortization 1,033 1,067 2,045 2,910 Loss (gain) on sale of stations 33 - (507) - Loss (gain) on disposal of long-lived assets and other 15 (1) 36 (1) Operating income 7,091 6,241 10,701 8,679 Interest expense (2,661) (4,257) (6,307) (8,347) Realized and unrealized gain (loss) on derivatives, net 5,079 3,091 (596) 2,501 Other income, net 29 47 17 99 Income from continuing operations before income taxes 9,538 5,122 3,815 2,932 Income tax expense (3,929) (2,156) (1,575) (1,199) Income from continuing operations 5,609 2,966 2,240 1,733 Gain on discontinued operations, net of income tax 70 74 429 108 Net income $5,679 $3,040 $2,669 $1,841 Basic net income per common share: Income from continuing operations $0.15 $0.08 $0.06 $0.05 Gain on discontinued operations $0.00 $0.00 $0.01 $0.00 Net income $0.15 $0.08 $0.07 $0.05 Diluted net income per common share: Income from continuing operations $0.15 $0.08 $0.06 $0.05 Gain on discontinued operations $0.00 $0.00 $0.01 $0.00 Net income $0.15 $0.08 $0.07 $0.05 Common shares for basic calculation 38,785 38,282 38,697 38,244 Common shares for diluted calculation 38,787 38,324 38,702 38,272 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 broadcast revenue, adjusted same station net broadcast 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 2008 station operating income increased 7.8% to $10.1 million from $9.4 million in the same period in 2007. For the six months ended June 30, 2008, station operating income increased 2.7% to $16.1 million from $15.7 million reported for the same period in 2007.
The Company believes that station operating income is a performance measure that helps investors better understand the financial health of our radio stations. Further, Regent and other media companies have traditionally 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 Ended Six Months Ended Station operating income June 30, June 30, 2008 2007 2008 2007 Operating income $7,091 $6,241 $10,701 $8,679 Plus: Corporate general and administrative expenses 1,916 2,048 3,805 4,062 Depreciation and amortization 1,033 1,067 2,045 2,910 Loss on sale of stations 33 - - - Loss on disposal of long-lived assets and other 15 - 36 - Less: Gain on sale of stations - - 507 - Gain on disposal of long-lived assets and other - 1 - 1 Station operating income $10,088 $9,355 $16,080 $15,650 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 2008 and 2007 periods and excludes barter, net broadcast revenue for the second quarter of 2008 increased 3.0% to $25.6 million from $24.8 million in the second quarter of 2007. Same station operating income increased 6.1% to $10.2 million in the second quarter of 2008 compared to the second quarter of 2007. 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 2007 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, 2008 2007 Net broadcast revenue $26,482 $25,736 Less: Net results of stations not included in same station category - 107 Barter transactions 919 819 Same station net broadcast revenue $25,563 $24,810 Three Months Ended Same Station Operating Income June 30, 2008 2007 Operating income $7,091 $6,241 Plus: Corporate general and administrative expenses 1,916 2,048 Depreciation and amortization 1,033 1,067 Loss on sale of stations 33 - Loss on disposal of long-lived assets and other 15 - Less: Gain on disposal of long-lived assets and other - 1 Station operating income 10,088 9,355 Adjustments: Net results of stations not included in same station category - 152 Barter transactions 71 66 Same station operating income $10,159 $9,573
Same station net broadcast revenue - adjusted for timing of certain NTR events
Excluding the timing of revenue from two NTR events held in the second quarter of 2008 that were held in the third quarter of 2007, net broadcast revenue would have decreased 1.2% to $24.5 million. The Company believes this presentation is important to investors as it eliminates the timing effect of the non-traditional revenue on comparability between periods.
Same Station Net Broadcast Revenue - adjusted for timing of certain NTR events Three Months Ended June 30, 2008 2007 Net broadcast revenue $26,482 $25,736 Less: Net results of stations not included in same station category - 107 Barter transactions 919 819 Same station net broadcast revenue $25,563 $24,810 Less timing of non traditional broadcast revenue 1,052 - Same station net broadcast revenue - adjusted for timing of certain NTR events $24,511 $24,810 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 disposal of long-lived assets. Free cash flow increased 75.1% to $5.0 million in the second quarter of 2008, from $2.8 million in the second quarter of 2007. For the six months ended June 30, 2008, free cash flow increased 88.1% to $5.4 million from $2.9 million in 2007. 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 Ended Six months ended June 30, June 30, 2008 2007 2008 2007 Free Cash Flow Net income $5,679 $3,040 $2,669 $1,841 Add: Depreciation and amortization (1) 1,033 1,100 2,045 2,979 Non-cash interest expense 188 192 318 284 Non-cash taxes expense (2) 3,772 2,152 1,746 1,243 Non-cash loss on sale of radio stations 38 - - - Other items, net (3) 372 383 618 543 Less: Non-cash unrealized gain on derivatives 5,920 2,840 236 1,999 Non-cash gain on sale of radio stations - - 1,155 - Maintenance capital expenditures 191 728 561 1,215 Digital upgrade capital expenditures 9 465 69 819 Free cash flow $4,962 $2,834 $5,375 $2,857 (1) Includes depreciation and amortization reclassified to discontinued operations (2) Includes taxes reclassified to discontinued operations (3) Includes: non-cash compensation; barter; and loss on the disposal 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 Ended Six Months Ended June 30, June 30, Free Cash Flow 2008 2007 2008 2007 Net cash provided by operating activities $3,085 $1,590 $5,376 $3,596 Less: Bad debt expense 150 219 306 397 Plus: Changes in operating assets and liabilities 2,227 2,656 935 1,692 Less: Maintenance capital expenditures 191 728 561 1,215 Digital upgrade capital expenditures 9 465 69 819 Free cash flow $4,962 $2,834 $5,375 $2,857 Selected Data
As of June 30, 2008, outstanding credit facility debt was approximately $194.9 million and cash was approximately $1.5 million. Total capital expenditures in the second quarter ended June 30, 2008 were approximately $0.7 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 2008 reported consolidated net broadcast revenues and station operating income of approximately $24.6 to $25.1 million and $8.5 to $8.8 million, respectively. Regent expects earnings of approximately $0.03 per share. However, earnings are subject to non-cash volatility as a result of changes in the market value of our interest rate swaps which are marked to market each quarter. 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 9/30/2008 Station Operating Income Guidance Range Lower Upper Operating income $5.5 $5.8 Plus: Corporate general and administrative expenses 2.0 2.0 Depreciation and amortization 1.0 1.0 Station operating income $8.5 $8.8
The Company expects same station net broadcast revenue to be down three to five percent for the third quarter of 2008 compared to the third quarter of 2007. As noted previously, adjusting for the timing of two non-traditional revenue events held in the second quarter of 2008 and in the third quarter of 2007, the Company expects same station net broadcast revenue to be approximately flat.
The Company expects capital expenditures for the third quarter to be approximately $1.5 million, of which $1.4 million is related to maintenance and conversion to digital technology capital expenditures and $0.1 million is related to consolidation capital expenditures pertaining to a facilities build-out in our Evansville market.
Teleconference
The Company will host a teleconference to discuss its second quarter results on Thursday, 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 and reference passcode 55577395. 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 during its scheduled time, there will be a replay available through Thursday, August 14, 2008, which can be accessed by dialing 800-642-1687 (U.S.) or 706-645-9291 (Int'l), passcode 55577395. The webcast will also be archived on the Company's Web site 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 62 stations located in 13 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.
First Call Analyst:
FCMN Contact:
Source: Regent Communications, Inc.
CONTACT: Tony Vasconcellos, Executive Vice President and Chief Financial
Officer, Regent Communications, Inc., +1-859-292-0030; or Joe Kessler,
Brainerd Communicators, Inc., +1-212-986-6667, for Regent Communications,
Inc.
Web site: http://www.regentcomm.com/
Profile: International Entertainment
posted by EntertainmentNews @ 5:02 AM
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