Radio One reports Q2 revenue decline, but sees hopeful signs for future

(August 7, 2006) Radio One, Inc. reported its results for the quarter ended June 30, 2006. Net broadcast revenue was approximately $97.8 million, a decrease of 4% from the same period in 2005. Station operating income was approximately $46.9 million, a decrease of 15% from the same period in 2005. Operating income was approximately $34.9 million, a decrease of 24% from the same period in 2005. Net income applicable to common stockholders was approximately $8.1 million or $0.08 per diluted share, a decrease of 59% from the same period in 2005.

Alfred C. Liggins, III (above), Radio One's CEO and President stated, "Last quarter, we said that the second quarter could be the bottom for the radio industry and for Radio One, and, on its face, this quarter was pretty disappointing. We are clearly facing some challenges in certain markets, over and above the ongoing softness in the radio industry, and are taking active steps to address those challenges.

However, when viewed in the context of our out-performance of the industry in the second quarter of 2005, along with some discrete expense items in this quarter that should not be recurring, as well as investment spending that is already beginning to pay off in positive ways, we think that this quarter may represent the perfect storm of bad news and that better days are ahead."

Mr. Liggins continued, "In addition to ongoing management realignment that will greatly strengthen our management team and deepen our bench of talent, we are excited that in the past several months we have:

-- launched the Tom Joyner Morning Show and The Michael Baisden Show on KKBT-FM in Los Angeles;

-- achieved break-even results for our African-American talk radio network, launched earlier this year;

-- seen significant early DVD sales results and retail distribution commitments for "Preaching to the Choir", the independent film we are helping promote and distribute; and

-- continued to see TV One post significant revenue and subscriber gains on a year-over-year basis.

I believe that we are well positioned to benefit from the strategic initiatives we are currently pursuing, while we continue to re-energize the performance of our radio stations through key hires and making appropriate strategic decisions relative to our radio station portfolio that will be in our shareholders' long-term best interests."

During the second quarter, the Company incurred approximately $0.7 million in severance expense associated with former employees, approximately $1.2 million in expenses associated with a Tom Joyner syndicated television show that will not re-new for the upcoming television season, approximately $0.6 million associated with the new African-American talk radio network and approximately $1.0 million in expenses associated with activity around the Company's independent film distribution initiative; additional revenue from which should be earned over the next 18 months, while incurring little additional cost.


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