Outdoor Channel Holdings Reports First Quarter 2009 Results

Outdoor Channel Holdings Reports First Quarter 2009 Results

Advertising revenues increase 2.1% and Subscriber revenues increase 15.2%

Winnercomm Inc. contributes $4.5 million in revenue during the quarter

Temecula, Calif., May 14 /PRNewswire-FirstCall/ -- Outdoor Channel Holdings, Inc. (NASDAQ:OUTD) today reported an increase in total revenues of 45.3 percent for the three-month period ended March 31, 2009 due largely to the acquisition of Winnercomm Inc.

Total revenues amounted to $17.0 million for the 2009 first quarter, compared with $11.7 million in the corresponding period a year ago.

Advertising revenue for the 2009 first quarter rose 2.1 percent to $7.8 million from $7.6 million in the prior-year period. Subscriber fees totaled $4.7 million for the first quarter of 2009, an increase of 15.2 percent compared to subscriber fees of $4.0 million in the prior-year period reflecting annual rate increases and an increase in paying subscribers.

In January of 2009, Outdoor Channel Holdings acquired certain assets of Winnercomm Inc. and its related entities. As a result, going forward Outdoor Channel Holdings will be reporting a third revenue category entitled "Production services." Production services revenue during the 2009 first quarter totaled $4.5 million and was comprised primarily of production services for customer-owned telecasts and marketing.

"During the first quarter we continued to build upon our category leadership position and generated positive advertising growth despite the challenging operating environment," said Roger L. Werner, President and Chief Executive Officer. "We also made additional progress expanding the distribution of our core network. Our balance sheet remains exceptionally strong and we continue to promote cost efficiencies across our organization. We remain very positive about our long-term growth profile. Due to our compelling programming, expanding distribution and consistent ability to deliver highly targeted audiences to our advertisers, we believe we are well positioned to benefit as the economy begins to recover."

Outdoor Channel Holdings posted a net loss of $1.3 million, or ($0.05) per diluted share, for the 2009 first quarter, compared with a net loss of $0.8 million, or ($0.03) per diluted share, in the prior-year period.

Earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for the effects of share-based compensation expense and acquisition and integration costs, amounted to $0.1 million for the 2009 first quarter, compared with ($0.1) million in the prior-year period.

Investor Conference Call

Outdoor Channel Holdings' management will host an investor conference call today, May 14, 2009, at 2 p.m. PDT (5 p.m. EDT) to review the company's financials and operations for its 2009 first quarter ended March 31, 2009. Investment professionals are invited to participate in the live call by dialing 800-591-6930 (domestic) or 617-614-4908 (international) and using participant passcode 88210737. 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. PDT (8 p.m. EDT), May 21, 2009, by calling 888-286-8010 (domestic) or 617-801-6888 (international) and using participant passcode 44842242.

About Outdoor Channel Holdings, Inc.

Outdoor Channel Holdings, Inc. owns and operates Outdoor Channel, America's leader in outdoor TV, and Winnercomm Inc., an Emmy Award winning production and interactive company. Outdoor Channel offers programming that captures the excitement of hunting, fishing, shooting, off-road motorsports, adventure and the Western lifestyle and can be viewed on multiple platforms including high definition, video-on-demand, as well as on a dynamic broadband website. Winnercomm Inc. is one of America's largest and highest quality producers of live sporting events and sports series for cable and broadcast television. Winnercomm also owns and operates the patented Skycam and CableCam aerial camera systems which provide dramatic overhead camera angles for major sports events, including college and NFL football. For more information 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 May 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 share-based compensation expense and acquisition and integration costs, 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 share-based compensation expense and acquisition and integration costs 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) liabilities resulting from an aerial camera falling; (4) a decrease in advertising revenue as a result of a deterioration in general economic conditions; (5) managing the company's growth and the integration of acquisitions; 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                                                         March 31,                                                  2009              2008    Revenues:     Advertising                                $7,794            $7,631     Subscriber fees                             4,663             4,049     Production services                         4,519                 -        Total revenues                           16,976            11,680    Cost of services:     Programming                                 1,748             1,923     Satellite transmission fees                   395               626     Production and operations                   6,472             1,861     Other direct costs                             97                97        Total costs of services                   8,712             4,507    Other expenses:     Advertising                                   459               538     Selling, general and administrative         9,214             7,617     Depreciation and amortization                 898               615        Total other expenses                     10,571             8,770    Loss from operations                         (2,307)           (1,597)    Interest and other income, net                   48               538    Loss from operations before income taxes     (2,259)           (1,059)    Income tax benefit                             (997)             (278)    Net loss                                    $(1,262)            $(781)    Loss per common share data:     Basic                                      $(0.05)           $(0.03)     Diluted                                    $(0.05)           $(0.03)    Weighted average common shares outstanding:     Basic                                      24,417            26,133     Diluted                                    24,417            26,133                  OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES                    Condensed Consolidated Balance Sheets                          (unaudited, in thousands)                                            March 31,      December 31,                                              2009             2008                            Assets   Current assets:    Cash and cash equivalents                $41,614          $60,257    Investment in available-for-sale     securities                                9,994                --    Accounts receivable, net of allowance     for doubtful accounts                    12,370            9,448    Other current assets                       9,679            6,854     Total current assets                      73,657           76,559     Property, plant and equipment, net         16,168           10,042   Goodwill and amortizable intangible    assets, net                               44,098           43,302   Investment in auction-rate securities       6,471            6,456   Deferred tax assets, net                    5,946            4,949   Deposits and other assets                   2,802            1,646      Totals                                 $149,142         $142,954                 Liabilities and Stockholders' Equity    Current liabilities                      $12,100            $6,309   Long-term liabilities                      1,351               236      Total liabilities                       13,451             6,545     Total stockholders' equity               135,691           136,409      Totals                                $149,142          $142,954                    OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES                  Condensed Consolidated Statements of Cash Flows                            (unaudited, in thousands)                                                       Three Months Ended                                                           March 31,                                                    2009              2008    Operating activities:   Net loss                                      $(1,262)            $(781)   Adjustments to reconcile net loss to net    cash provided by (used in) operating    activities:     Depreciation and amortization                   898               615     Amortization of subscriber acquisition fees     122               122     Gain on sale of equipment                         -                (5)     Loss on sale of available-for-sale securities     -                44     Other-than-temporary impairment on auction-rate      securities                                       -               260     Provision for doubtful accounts                  76               277     Share-based employee and service provider      compensation                                 1,014               912     Deferred tax benefit, net                    (1,027)             (279)    Changes in operating assets and liabilities:     Accounts receivable                           2,196               (54)     Income tax refund receivable                   (252)               (5)     Prepaid programming costs                       (64)              346     Other current assets                            435              (933)     Deposits and other assets                    (1,055)              (62)     Accounts payable and accrued expenses        (3,881)              933     Deferred revenue                                944               (69)     Customer deposits                                 -                (2)     Accrued severance payments                       (8)             (187)     Deferred obligations                            138                15     Unfavorable lease obligations                   (89)                -     Net cash provided by (used in) operating      activities                                  (1,815)            1,147    Investing activities:     Purchases of property, plant and equipment     (603)             (308)     Proceeds from sale of equipment                   -                15     Cash paid to purchase assets of Winnercomm,      net of cash acquired                        (5,746)                -     Purchases of available-for-sale and      auction-rate securities                     (9,994)          (27,176)     Proceeds from sale of available-for-sale      and auction-rate securities                      -            40,523       Net cash provided by (used in) investing        activities                               (16,343)           13,054    Financing activities:     Purchase of treasury stock                     (179)              (64)     Purchase and retirement of stock related      to stock repurchase program                   (306)                -     Net cash used in financing activities          (485)              (64)      Net increase (decrease) in cash and cash      equivalents                                 (18,643)          14,137     Cash and cash equivalents, beginning of      period                                       60,257           25,260     Cash and cash equivalents, end of period     $41,614          $39,397    Supplemental disclosure of cash flow information:      Income taxes paid                              $282                $5    Supplemental disclosures of non-cash investing    and financing activities:      Effect of net increase (decrease) in fair      value of auction-rate securities               $15               $60     Property, plant and equipment costs incurred      but not paid                                  $239               $30     Retirement of treasury stock                  $(179)             $(64)                  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 loss to earnings   before interest, taxes, depreciation and amortization (EBITDA), adjusted   for the effects of share-based compensation expense and acquisition and   integration costs:                                                     Three Months Ended                                                         March 31,                                                  2009              2008    Net loss                                    $(1,262)            $(781)    Add/Subtract:     Interest and other income, net                 48               538     Income tax benefit                           (997)             (278)     Depreciation and amortization                 898               615    EBITDA                                       (1,409)             (982)    Adjusted for:     Share-based compensation expense            1,014               912     Acquisition and integration costs             450                 -    EBITDA as adjusted for share-based compensation    expense and acquisition and integration    costs                                          $55              $(70)    Summary of cost of services     Share-based compensation expense             $105               $98     Cost of services                            8,607             4,409       Total cost of services                   $8,712            $4,507    Summary of selling, general and administrative     Share-based compensation expense             $909              $814     Acquisition and integration costs             450                 -     Selling, general and administrative         7,855             6,803       Total selling, general and        administrative                          $9,214            $7,617    Summary of other income     Interest income                               $48              $810     Dividend income                                 -                32     Other income (loss)                             -              (304)       Total other income                          $48              $538     EBITDA as adjusted by segment     Legacy Outdoor Channel                     $1,552              $(70)     Production Services                        (1,497)                -       EBITDA as adjusted for share-based        compensation expense and acquisition        and integration costs                      $55              $(70)  

First Call Analyst:
FCMN Contact:

Source: Outdoor Channel Holdings, Inc.

CONTACT: For Company, Tom Hornish, Chief Operating Officer, Outdoor
Channel Holdings, Inc., +1-951-699-6991, ext. 104,
thornish@outdoorchannel.com; or For Investors, Brad Edwards,
edwards@braincomm.com, or For Media, Nancy Zakhary, nancy@braincomm.com, both
of Brainerd Communicators, Inc., +1-212-986-6667

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

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Profile: International Entertainment