Outdoor Channel Holdings Reports Strong 2008 Financial Results

Outdoor Channel Holdings Reports Strong 2008 Financial Results

Announces $10 Million Stock Repurchase Program

Temecula, Calif., Feb. 26 /PRNewswire-FirstCall/ -- Outdoor Channel Holdings, Inc. (NASDAQ:OUTD) today reported increases in total revenues of 22.5 percent and 15.3 percent, respectively, for the three- and twelve-month periods ended December 31, 2008.

Total revenues from continuing operations amounted to $14.4 million for the 2008 fourth quarter, compared with $11.7 million in the corresponding period a year ago. For full year 2008, total revenues from continuing operations equaled $54.1 million, compared with $46.9 million in the prior year.

Advertising revenue for the 2008 fourth quarter rose 21.0 percent to $10.0 million from $8.2 million in the prior-year period. For full year 2008, advertising sales rose 25.4 percent to $36.6 million from $29.1 million in the prior year.

Subscriber fees totaled $4.4 million for the fourth quarter of 2008, an increase of 26.3% compared to subscriber fees of $3.5 million in the prior-year period reflecting an increase in paying subscribers as well as increases in subscriber fee rates. For full year 2008, subscriber fees totaled $17.5 million which was down $0.3 million compared to subscriber fees for the prior year. The company attributed the slight decline in full year subscriber fees to the successful completion of carriage negotiations with the majority of its distributors during the preceding year.

"In 2008, we successfully executed our strategic plan and further solidified our leadership position in outdoor TV," said Roger L. Werner, President and Chief Executive Officer. "Our strategic investments in programming, marketing and sales resulted in record ratings increases and double digit advertising growth for the fourth quarter and full year. In addition, we made considerable progress in implementing our digital strategy as well as maximizing our distribution relationships. Looking ahead, the overall economic climate remains challenging and our overall growth rate has moderated in the current quarter. However, we continue to deliver a highly targeted and loyal viewing audience, our online presence is growing and we have maintained strong relationships with our advertisers. We are also taking steps to further increase efficiencies across our operations and we remain committed to maintaining a strong balance sheet. We closed the quarter with over $60 million in cash and no long-term debt. We believe our long-term outlook is very promising and we are well positioned to benefit as the economy recovers. Our stock repurchase program reflects our confidence in our business and our commitment to generating value for our shareholders."

Outdoor Channel Holdings posted net income of $0.5 million, or $0.02 per diluted share, for the 2008 fourth quarter, compared with a net loss of $1.6 million, or ($0.06) per diluted share, in the prior-year period. For full year 2008, the company posted net income of $2.4 million, or $0.09 per share, compared to a net loss of $1.9 million, or ($0.07) per share, for the prior year.

Earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of discontinued operations and share-based compensation expense, amounted to $3.9 million for the 2008 fourth quarter, compared with $1.5 million in the prior-year period. For full year 2008, EBITDA, adjusted for the effects of discontinued operations and share-based compensation expense, equaled $10.9 million, compared with $9.5 million for the prior year.

Stock Repurchase Program

The company also announced today that its board of directors has authorized a stock buyback program to repurchase up to an aggregate of $10.0 million of its issued and outstanding common shares. The stock repurchase plan will be effective March 3, 2009 through December 31, 2009.

The timing of stock buybacks and the number of shares of common stock to be repurchased will be made pursuant to a company 10b5-1 plan, and the repurchase program's terms have been structured to comply with Rule 10b-18 under the Securities Exchange Act of 1934. The timing and extent of the repurchase will depend upon market conditions, applicable legal and contractual requirements, and other factors.

Investor Conference Call

Outdoor Channel Holdings' management will host an investor conference call today, February 26, 2009, at 2 p.m. PST (5 p.m. EST) to review the company's financials and operations for its 2008 fourth quarter and year ended December 31, 2008. Investment professionals are invited to participate in the live call by dialing 800-573-4752 (domestic) or 617-224-4324 (international) and using participant passcode 22697955. The call will be open to all other interested parties through a live, listen-only audio Internet broadcast in the Investor Relations section of the company's Web site, www.outdoorchannel.com. For those who are not able to listen to the live broadcast, the call will be archived on the web site for one year. A telephonic playback of the conference call also will be available through 5 p.m. PST (8 p.m. EST), March 5, 2009, by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using participant passcode 87661859.

About Outdoor Channel Holdings, Inc.

Outdoor Channel Holdings, Inc. owns and operates Outdoor Channel, America's leader in outdoor TV. The national network offers programming that captures the excitement of hunting, fishing, shooting, off-road motorsports, adventure and the Western lifestyle. Outdoor Channel can be viewed on multiple platforms including high definition, video-on-demand, as well as on a dynamic new broadband website. For more information about the company or Outdoor Channel, please visit www.outdoorchannel.com.

Nielsen Media Research Universe Estimates for Outdoor Channel

Nielsen Media Research is the leading provider of television audience measurement and advertising information services worldwide. Nielsen estimated that Outdoor Channel had approximately 30.0 million cable and satellite subscribers for March 2009. Please note that this estimate regarding Outdoor Channel's subscriber base is made by Nielsen Media Research and is theirs alone and does not represent opinions, forecasts or predictions of Outdoor Channel Holdings, Inc. or its management. Outdoor Channel Holdings, Inc. does not by its reference above or distribution imply its endorsement of or concurrence with such information.

Use of Non-GAAP Financial Information

This press release includes "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission rules. The company believes that earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of discontinued operations and share-based compensation expense, provides greater comparability regarding its ongoing operating performance. This information is not intended to be considered in isolation or as a substitute for net income (loss) calculated in accordance with U.S. GAAP. A reconciliation of the company's U.S. GAAP information to EBITDA, adjusted for the effects of discontinued operations and share-based compensation expense is provided in the attached table.

Safe Harbor Statement

Statements 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, about our expectations, beliefs, intentions, strategies regarding the future long-term value of the company resulting from the company's current actions or strategic initiatives and the future anticipated value of Outdoor Channel to our audience, distributors and advertisers. 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 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) service providers discontinuing or refraining from carrying Outdoor Channel; (2) a decline in the number of viewers from having Outdoor Channel placed in unpopular cable or satellite packages, or increases in subscription fees, established by the service providers; (3) the company's ability to grow the subscriber base of Outdoor Channel; (4) a change in Nielsen's methodology of estimating the number of subscribers to Outdoor Channel, or an inaccuracy in Nielsen's such estimated number; (5) a decrease in operating results from offering reduced subscriber fee rates, launch support fees and other incentives to grow the subscriber base; 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.

                   OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES                   Condensed Consolidated Statements of Operations                   (unaudited, in thousands, except per share data)                                Three Months Ended            Year Ended                                  December 31,               December 31,                               2008          2007         2008         2007    Revenues:     Advertising             $9,968        $8,241      $36,562      $29,149     Subscriber fees          4,406         3,489       17,495       17,752        Total revenues        14,374        11,730       54,057       46,901    Cost of services:     Programming              1,770         1,189        6,903        5,814     Satellite transmission      fees                      398           635        1,971        2,504     Production and      operations              1,415         1,365        5,892        4,740     Other direct costs          93            93          383          194        Total cost of        services              3,676         3,282       15,149       13,252    Other expenses:     Advertising                724         1,072        3,317        5,160     Selling, general and      administrative          6,963         7,740       28,305       29,265     Depreciation and      amortization              543           672        2,447        2,665        Total other expenses   8,230         9,484       34,069       37,090    Income (loss) from    operations                2,468        (1,036)       4,839       (3,441)    Interest and other    income, net                 121           883        1,521        3,280    Income (loss) from    continuing operations    before income taxes       2,589          (153)       6,360         (161)    Income tax provision       2,101         1,398        3,988        1,718    Income (loss) from    continuing operations       488        (1,551)       2,372       (1,879)    Income (loss) from    discontinued operations,    net of tax                    -           (28)           -            1    Net income (loss)           $488       $(1,579)      $2,372      $(1,878)    Basic earnings (loss) per    common share data:     From continuing      operations              $0.02        $(0.06)       $0.09       $(0.07)     From discontinued      operations                $ -           $ -          $ -          $ -     Basic earnings per      common share            $0.02        $(0.06)       $0.09       $(0.07)    Diluted earnings (loss)    per common share data:     From continuing      Operations              $0.02        $(0.06)       $0.09       $(0.07)     From discontinued      operations                $ -           $ -          $ -          $ -     Diluted earnings per      common share            $0.02        $(0.06)       $0.09       $(0.07)    Weighted average number    of common shares    outstanding:     Basic                   24,378        26,526       25,369       26,027     Diluted                 25,336        26,526       26,086       26,027                    OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES                        Condensed Consolidated Balance Sheets                              (unaudited, in thousands)                                             December 31,     December 31,                                              2008             2007                    Assets   Current assets:     Cash and cash equivalents              $60,257          $25,260     Investment in available-for-sale      securities                                  -           46,155     Accounts receivable, net of      allowance for doubtful accounts         9,448            8,299     Other current assets                     6,854            5,626       Total current assets                  76,559           85,340    Property, plant and equipment, net        10,042           11,632   Goodwill and amortizable intangible    assets, net                              43,302           43,473   Investment in auction-rate securities      6,456                -   Deferred tax assets, net                   4,949            9,326   Deposits and other assets                  1,646            1,930       Totals                              $142,954         $151,701        Liabilities and Stockholders' Equity    Current liabilities                       $6,309           $4,833   Long-term liabilities                        236              291       Total liabilities                      6,545            5,124    Total stockholders' equity               136,409          146,577       Totals                              $142,954         $151,701                    OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES                   Condensed Consolidated Statements of Cash Flows                              (unaudited, in thousands)                                     Three Months Ended        Year Ended                                       December 31,           December 31,                                      2008      2007         2008      2007    Operating activities:     Net income (loss)                $488   $(1,579)      $2,372   $(1,878)     Adjustments to reconcile net      income (loss) to net cash      provided by operating      activities:       Income from discontinued        operations                       -        28            -        (1)       Depreciation and amortization   543       672        2,447     2,665       Amortization of subscriber        acquisition fees               122       123          489       489       Loss (gain) on sale of        equipment                       (5)        1           36         -       Gain on sale of        available-for-sale and        auction-rate securities          -         -          (75)        -       Other-than-temporary        impairment on auction-rate        securities                       -         -          336         -       Provision for doubtful        accounts                       120        119         709       219       Share-based employee and        service provider        compensation                   901      1,868       3,605    10,260       Deferred tax provision, net   1,364      1,383       3,249     1,628       Tax benefits from exercise        of stock options in excess        of expense                       -     (1,513)          -    (1,520)     Changes in operating assets    and liabilities:       Accounts receivable            (394)       419      (1,853)   (1,702)       Income tax refund        receivable                     236        (20)        224     2,075       Prepaid programming costs        76       (514)       (475)     (809)       Other current assets             60        146        (158)     (340)       Deposits and other assets         4        (68)       (205)     (318)       Accounts payable and accrued        expenses                       448       (214)      1,917     1,344       Deferred revenue               (195)        39         (56)     (349)       Customer deposits                 -          2         (14)      (39)       Accrued severance payments      (15)       151        (254)     (106)       Deferred obligations             24         31         (50)       46         Net cash provided by          operating activities       3,777      1,074      12,244    11,664    Investing activities:       Purchases of property, plant        and equipment                 (213)      (316)       (857)   (1,259)       Purchase of intangibles         (97)         -         (97)        -       Proceeds from sale of        equipment                       59          8          74        12       Proceeds from sale of        discontinued operations          -          -           -     3,589       Purchases of available-for-sale        and auction-rate securities      -    (26,944)    (27,181) (130,945)       Proceeds from sale of        available-for-sale and        auction-rate securities        400     25,949      66,352   126,760         Net cash provided by         (used in) investing         activities                    149     (1,303)     38,291    (1,843)    Financing activities:       Proceeds from exercise of        stock options                    -        591          11     1,195       Purchase and retirement of        stock related to stock        repurchase program            (826)         -     (15,000)        -       Purchase of treasury stock     (160)      (515)       (549)     (823)       Tax benefits from exercise        of stock options in excess        of expense                       -      1,513           -     1,520       Net cash provided by (used in)        financing activities          (986)     1,589     (15,538)    1,892                                     Three Months Ended      Year Ended                                        December 31,        December 31,                                       2008      2007      2008      2007    Cash flows from discontinued    operations:       Net cash used in operating        activities of discontinued        operations                        -       (36)        -      (618)       Net cash provided by (used in)        investing activities        of discontinued operations        -         8         -       (61)         Net cash used in discontinued          operations                      -       (28)        -      (679)      Net increase in cash and cash      equivalents                     2,940     1,332    34,997    11,034     Cash and cash equivalents,      beginning of period            57,317    23,928    25,260    14,226     Cash and cash equivalents,      end of period                 $60,257   $25,260   $60,257   $25,260    Supplemental disclosure of cash    flow information:          Income taxes paid             $501      $250      $514      $349    Supplemental disclosures of    non-cash investing and financing    activities:          Effect of net increase          (decrease) in fair value of          available-for-sale          securities, net of deferred          taxes                         $21      $(58)    $(268)    $(107)         Property, plant and equipment          costs incurred but not paid   $17      $171       $17      $171         Retirement of treasury stock  $160      $515      $549      $823                      OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES                  RECONCILIATION OF NON-U.S. GAAP MEASURES TO U.S. GAAP                               (unaudited, in thousands)    The following table sets forth the reconciliation of net income (loss)   to earnings before interest, taxes, depreciation and amortization   (EBITDA), adjusted for the effects of discontinued operations and share-   based compensation expense:                             Three Months Ended          Year Ended                               December 31,             December 31,                           2008            2007      2008         2007    Net income (loss)       $488         $(1,579)   $2,372      $(1,878)    Add/Subtract:    Interest and other     income, net            121             883     1,521        3,280    Income tax provision  2,101           1,398     3,988        1,718    Depreciation and     amortization           543             672     2,447        2,665    EBITDA                 3,011            (392)    7,286         (775)    Adjusted for:    Income from     discontinued     operations, net of     tax                      -             (28)        -            1    EBITDA as adjusted    for discontinued    operations, net of    tax                   3,011            (364)    7,286         (776)    Adjusted for:     Share-based     compensation expense   901           1,868     3,605       10,260    EBITDA as adjusted    for discontinued    operations, net of    tax and share based     compensation     expense             $3,912          $1,504   $10,891       $9,484     Summary of Cost of    Services    Share based     compensation     expense               $110            $138      $440         $263   Cost of Services       3,566           3,144    14,709       12,989     Total Cost of      Services           $3,676          $3,282   $15,149      $13,252    Summary of Selling,    general and    administrative    Share based    compensation    expense                $791          $1,730    $3,165       $9,997   Selling, general    and administrative    6,172           6,010    25,140       19,268     Total Selling,      general and      administrative     $6,963          $7,740   $28,305      $29,265  

First Call Analyst:
FCMN Contact:

Source: Outdoor Channel Holdings, Inc.

CONTACT: Tom Hornish, Chief Operating Officer, +1-951-699-6991, ext.
104, thornish@outdoorchannel.com; or Brad Edwards, Brainerd Communicators,
Inc., +1-212-986-6667, edwards@braincomm.com

Web Site: http://www.outdoorchannel.com/

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Profile: International Entertainment