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Outdoor Channel Holdings Reports First Quarter 2013 Results



Outdoor Channel Holdings Reports First Quarter 2013 Results

Consolidated Revenues Rise 18%; Consolidated Adjusted EBITDA Declines on
Continued Programming and Promotion Focus

TEMECULA, Calif., May 10, 2013 (GLOBE NEWSWIRE) -- Outdoor Channel Holdings,
Inc. (Nasdaq:OUTD) today reported its operating results for the first quarter
ended March 31, 2013.

Consolidated revenues for the quarter were $16.9 million, an 18% increase
compared with $14.3 million in the first quarter of 2012, driven primarily by
a 20% growth in advertising revenues at The Outdoor Channel ("TOC").

Total operating expenses for the first quarter were $26.5 million compared to
$16.3 million in operating expense for the first quarter of 2012. Excluding
merger related costs of $7.6 million, which includes the previously announced
$6.5 million termination fee paid to InterMedia Outdoors Holdings, LLC
("InterMedia"), operating costs grew by $2.6 million, or 16%, on significantly
higher programming and advertising and promotion expense, primarily relating
to our first quarter program launch of Elite Tactical Unit ("ETU") and a new
season of Major League Fishing ("MLF"). These program and promotion expense
increases were in line with guidance previously provided by the Company.

Resulting operating loss for the first quarter 2013 was $9.6 million, a $7.7
million increase from the $2.0 million of operating loss in the first quarter
of 2012. Earnings before interest, taxes, depreciation and amortization
(EBITDA), adjusted for the effects of share-based compensation expense and
merger related expenses, was negative $648,000, a 56% increase compared to
adjusted EBITDA of negative $415,000 for the first quarter of 2012 on higher
programming and promotion costs, net of increased revenue.

On a segment basis, TOC reported revenues of $14.7 million for the quarter, a
16% increase compared to $12.6 million of revenue for the first quarter of
2012 driven primarily by a 20% growth in ad revenues, primarily related to the
aforementioned launches of ETU and MLF. TOC's EBITDA, adjusted for share-based
compensation expense and merger related expenses, was negative $321,000
compared to $253,000 of adjusted EBITDA for the first quarter of 2012 driven
primarily by higher programming and promotion expenses.

Our Production Services unit generated revenues (before intercompany
eliminations) for the quarter of $3.4 million, a 231% increase compared to
$1.0 million for the first quarter of 2012 resulting primarily from increased
programming for TOC, including ETU. Production Services' EBITDA (including
intercompany eliminations), adjusted for share-based compensation expense, was
$90,000 compared to adjusted EBITDA of negative $274,000, with the improvement
principally driven by lower SG&A expenses.

Our Aerial Cameras unit generated revenues for the quarter of $1.5 million, a
35% increase compared to $1.1 million in revenues for the first quarter of
2012 driven primarily by the ongoing U.S. government project initiated in the
second quarter of 2012. The Aerial Cameras unit's EBITDA, adjusted for
share-based compensation expense, was negative $417,000 compared to adjusted
EBITDA of negative $394,000 primarily due to fewer sporting events and reduced
margins thereon, offset partially by margin contribution from our government
project which commenced in April 2012.

Our consolidated net loss for the first quarter of 2013 was $6.1 million, or
$.24 per basic and diluted share, compared to a consolidated net loss for the
first quarter of 2012 of $1.2 million, or $.05 per basic and diluted share.

Pending Sale

As announced by the Company on March 13, 2013, the Company entered into a
definitive merger agreement with Kroenke Sports & Entertainment ("KSE") under
which KSE is to purchase the Company for $8.75 per share in an all-cash
transaction. On May 2, 2013, KSE amended the agreement to increase the
all-cash consideration to $9.35 per share. On May 3, 2013, the Company
received an all-cash offer from InterMedia for $9.75 per share under
essentially the same terms and conditions as the proposed KSE merger. On May
8, 2013, the Company and KSE amended the merger agreement to reflect an
increased all-cash price of $10.25 per share, an increase of the break-up fee
to $7.5 million and an amendment to the support agreement to require the
directors and certain executive officers to vote in favor of the KSE merger,
even if the Board determines an alternative proposal is superior. The merger
transaction is subject to shareholder and other customary approvals.

About Outdoor Channel Holdings, Inc.

Outdoor Channel Holdings, Inc. owns and operates Outdoor Channel and
Winnercomm Inc. Nielsen estimated that Outdoor Channel had approximately 39.8
million cable, satellite and telco subscribers for May 2013. Outdoor Channel
offers programming that captures the excitement of hunting, fishing, shooting,
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 is one of America's leading and highest quality producers
of live sporting events and sports series for cable and broadcast television.
The Company also owns and operates the 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
http://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's estimate
of Outdoor Channel subscribers is made by Nielsen 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 merger
related expenses, 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 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 merger
related expenses, 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) a decline in viewership and revenues related to increased
competition within the outdoor television segment; (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 future
acquisitions, if any; (6) decreased profitability if we are unable to generate
sufficient revenues from our Production Services operations to offset its
fixed costs; 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
Consolidated Statements of Operations
(in thousands, except per share data)
                                                                    
                                                        Three Months Ended
                                                        March 31
                                                        2013       2012
Revenues:                                                (unaudited)
Advertising                                              $ 8,888    $ 7,435
Subscriber fees                                          5,782      5,176
Production services                                      2,192      1,710
                                                                    
Total revenues                                           16,862     14,321
                                                                    
Cost of services:                                                   
Programming                                              4,056      1,798
Satellite transmission fees                              438        429
Production and operations                                4,486      4,141
Other direct costs                                       9          11
                                                                    
Total cost of services                                   8,989      6,379
                                                                    
Other expenses:                                                     
Advertising                                              1,704      648
Selling, general and administrative                      7,390      8,553
Merger related expenses                                  7,641      -- 
Depreciation and amortization                            787        732
                                                                    
Total other expenses                                     17,522     9,933
                                                                    
Total operating expenses                                 26,511     16,312
                                                                    
Loss from operations                                     (9,649)    (1,991)
                                                                    
Interest and other income, net                           15         19
                                                                    
Loss before income taxes                                 (9,634)    (1,972)
                                                                    
Income tax benefit                                       (3,569)    (814)
                                                                    
Net loss                                                 (6,065)    (1,158)
Net loss attributable to noncontrolling interest         --         -- 
                                                                    
Net loss attributable to Outdoor Channel Holdings, Inc.  $ (6,065)  $ (1,158)
                                                                    
Loss per common share data:                                         
Basic                                                    $ (0.24)   $ (0.05)
Diluted                                                  $ (0.24)   $ (0.05)
                                                                    
Weighted average common shares outstanding:                         
Basic                                                    25,351     25,021
Diluted                                                  25,351     25,021

                                          
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Segment Operating Results
(in thousands)
                                          
                                          
                              Three Months Ended
                              March 31
                              2013       2012
                               (unaudited)
Revenues                                  
                                          
TOC                            $ 14,670   $ 12,611
Production Services            3,369      1,017
Aerial Cameras                 1,489      1,105
Eliminations                   (2,666)    (412)
 Total revenues                $ 16,862   $ 14,321
                                          
Cost of Services                          
                                          
TOC                            $ 7,149    $ 4,813
Production Services            2,960      967
Aerial Cameras                 1,429      981
Eliminations                   (2,549)    (382)
 Total cost of services        $ 8,989    $ 6,379
                                          
Other Expenses                            
                                          
TOC                            $ 16,381   $ 8,729
Production Services            330        431
Aerial Cameras                 811        773
Eliminations                   --         -- 
 Total other expenses          $ 17,522   $ 9,933
                                          
Income (Loss) from Operations             
                                          
TOC                            $ (8,860)  $ (931)
Production Services            79         (381)
Aerial Cameras                 (751)      (649)
Eliminations                   (117)      (30)
 Loss from operations          $ (9,649)  $ (1,991)

                                                                     
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of U.S. GAAP Measures to U.S. Non-GAAP Measures
(unaudited, in thousands)
                                                                     
                                                                     
                                                         Three Months Ended
                                                         March 31
                                                         2013       2012
                                                                     
Net loss                                                  $ (6,065)  $ (1,158)
                                                                     
Add/Subtract:                                                        
                                                          --         --
Interest and other income, net                            (15)       (19)
Income tax benefit                                        (3,569)    (814)
Depreciation and amortization                             787        732
                                                                     
EBITDA                                                    $ (8,862)  $ (1,259)
                                                                     
Adjusted for:                                                        
                                                                     
Share-based compensation expense                          573        844
Merger related expenses                                   7,641      --
                                                                     
EBITDA as adjusted for share-based compensation and       $ (648)    $ (415)
merger related expenses
                                                                     
                                                                     
                                                                     
Summary of Cost of Services                                          
Share-based compensation expense                          $ 58       $ 55
Cost of services                                          8,931      6,324
 Total cost of services                                   $ 8,989    $ 6,379
                                                                     
                                                                     
Summary of Selling, General and Administrative                       
Share-based compensation expense                          $ 515      $ 789
Selling, general and administrative                       6,875      7,764
 Total selling, general and administrative                $ 7,390    $ 8,553
                                                                     
Summary of Other Income                                              
Interest income                                           $ 30       $ 38
Interest and other expense                                (15)       (19)
Total other income                                        $ 15       $ 19
                                                                     
                                                                     
EBITDA as adjusted by Segment                                        
Outdoor Channel                                           $ (321)    $ 253
Production Services *                                     90         (274)
Aerial Cameras                                            (417)      (394)
                                                                     
EBITDA as adjusted for share-based compensation and       $ (648)    $ (415)
merger related expenses
                                                                     
* - eliminations included in Production Services segment

                                                              
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
                                                              
                                                              
                                              March 31, 2013 December 31, 2012
                                              (unaudited)     
                                                              
Assets                                                        
Current assets:                                               
 Cash and cash equivalents                     $ 26,294       $ 30,476
 Investments in available-for-sale securities  24,924         22,943
 Investments in auction-rate securities        --             4,551
 Accounts receivable, net of allowance for     11,871         15,066
doubtful accounts
 Other current assets                          19,752         17,799
 Total current assets                          82,841         90,835
                                                              
Property, plant and equipment, net             13,883         14,121
Goodwill and amortizable intangible assets,    43,286         43,330
net 
Deferred tax assets, net                       453            453
Deposits and other assets                      894            953
                                                              
 Totals                                        $ 141,357      $ 149,692
                                                              
Liabilities and Equity                                        
                                                              
Current liabilities                            $ 15,153       $ 17,313
Long-term liabilities                          689            749
 Total liabilities                             15,842         18,062
                                                              
Total stockholders' equity                     125,515        131,630
Noncontrolling interest                        --             -- 
 Total equity                                  125,515        131,630
                                                              
 Totals                                        $ 141,357      $ 149,692

                                                                     
OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
                                                                     
                                                         Three Months Ended
                                                         March 31,
                                                         2013       2012
                                                                     
Operating activities:                                                
Net loss                                                  $ (6,065)  $ (1,158)
Adjustments to reconcile net loss to net cash provided               
by (used in) operating activities:
Depreciation and amortization                             787        732
Amortization of subscriber acquisition fees               152        472
Loss on sale of equipment                                 1          10
Provision for doubtful accounts                           --         15
Share-based employee and director compensation            573        844
Deferred tax benefit, net                                 (2,790)    -- 
                                                                     
Changes in operating assets and liabilities:                         
Accounts receivable                                       3,195      3,644
Income tax refund receivable and payable, net             (1,990)    (2,781)
Programming and production costs                          49         (1,540)
Other current assets                                      1,725      1,487
Deposits and other assets                                 (1)        34
Accounts payable and accrued expenses                     (376)      (1,672)
Deferred revenue                                          (503)      538
Deferred obligations                                      (22)       61
Unfavorable lease obligations                             (43)       (39)
Net cash provided by (used in) operating activities       (5,308)    647
                                                                     
Investing activities:                                                
Purchases of property, plant and equipment                (821)      (646)
Proceeds from sale of equipment                           --         87
Purchases of available-for-sale securities                (11,995)   (24,143)
Proceeds from sale of available-for-sale and              14,561     26,037
auction-rate securities 
Net cash provided by investing activities                 1,745      1,335
                                                                     
Financing activities:                                                
Purchase of common stock                                  (619)      (547)
Net cash used in financing activities                     (619)      (547)
                                                                     
Net increase (decrease) in cash and cash equivalents      (4,182)    1,435
Cash and cash equivalents, beginning of period            30,476     19,498
Cash and cash equivalents, end of period                  $ 26,294   $ 20,933
                                                                     
Supplemental disclosure of cash flow information:                    
Merger related expenses paid                             $6,592     --
Income taxes paid                                         $ 1,213    $ 1,960
                                                                     
Supplemental disclosure of non-cash investing and                    
financing activities:
Effect of net increase in fair value of                   $ (4)      $ 26
available-for-sale and auction-rate securities
Property, plant and equipment costs incurrred but not     $ 328      $ 178
paid

CONTACT: For Company:
         Tom Allen
         Executive Vice President / Chief Operating & Financial Officer
         800-770-5750
         tallen@outdoorchannel.com
        
         For Investors:
         Brad Edwards
         Brainerd Communicators, Inc.
         212-986-6667
         edwards@braincomm.com
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