##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number:
    000-17287
 OUTDOOR CHANNEL HOLDINGS,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

33-0074499(I.R.S. Employer
    Identification No.)43445 Business Park Dr., Suite 103
    Temecula, California(Address of principal
    executive offices)

92590(Zip Code)  Registrants telephone number, including area code:
 (951) 699-6991
  Securities registered pursuant to Section 12(b) of
    the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 par value

The Nasdaq Global Market   Securities
    registered pursuant to Section 12(g) of the Act:
    None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Regulation S-T o o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o(Do not check if a smaller
    reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




---



##### 





OUTDOOR
    CHANNEL HOLDINGS, INC.FORM 10-K
  TABLE OF CONTENTS
   
 PART IItem 1.

Business


4Item 1A.

Risk Factors


10Item 1B.

Unresolved Staff Comments


21Item 2.

Properties


21Item 3.

Legal Proceedings


21Item 4.

Submission of Matters to a Vote of Security
    Holders


22PART IIItem 5.

Market for the Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


22Item 6.

Selected Financial Data


25Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


26Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


40Item 8.

Financial Statements and Supplementary Data


41Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


75Item 9A.

Controls and Procedures


75Item 9B.

Other Information


77PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


77Item 11.

Executive Compensation


77Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


77Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


77Item 14.

Principal Accountant Fees and Services


77PART IVItem 15.

Exhibits and Financial Statement Schedules


77SIGNATURES


81EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   2




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Cautionary
    Statement Concerning Forward-Looking Statements
  Form 10-K
  Form 10-K
 3




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS.    
    THE OUTDOOR CHANNEL:  The Outdoor Channel, or
    TOC, segment is comprised of The Outdoor Channel, Inc., a wholly
    owned indirect subsidiary of Outdoor Channel Holdings, Inc. It
    operates Outdoor
    Channel®,

    a national television network devoted to traditional outdoor
    related lifestyle programming.
    PRODUCTION SERVICES:  Our Production Services
    segment is comprised of Winnercomm, Inc., a Delaware corporation
    (Winnercomm), CableCam, Inc., a Delaware corporation
    (CableCam) and SkyCam, Inc., a Delaware corporation
    (SkyCam). The Production Services businesses relate
    to the production, development and marketing of sports
    programming.  Form 10-K,
    ®
    TOC (61%, 100% and 100% of the Companys consolidated revenues
    in 2009, 2008 and 2007, respectively)
  ®
   4




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Outdoor
    Channel Sources of Revenue
    Advertising
    Fees
    Short-form Advertising.
          Long-form Advertising.
 5




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Subscriber
    Fees
    Outdoor
    Channel Programming
      Outdoor
    Channel Competition
       6




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##### Table of Contents



over-the-air
  PRODUCTION
    SERVICES (39%
    of the Companys consolidated revenues in 2009)
    Winnercomm.
  Winnercomm Competition.
  CableCam and SkyCam.
  CableCam and SkyCam Competition.
  Production Services Revenues.
 7




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##### Table of Contents



INTELLECTUAL
    PROPERTY
  ® ® ® ®
  GOVERNMENT
    REGULATION
    Local
    Cable Regulation
    Effect
    of Must-Carry Requirements
   8




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Closed
    Captioning and Advertising Restrictions on Childrens
    Programming
    Obscenity
    Restrictions
    Regulation
    of the Internet
    Other
    Regulations
    EMPLOYEES
    FINANCIAL
    INFORMATION ABOUT SEGMENTS
    AVAILABLE
    INFORMATION
  1-800-SEC-0330 http://www.sec.gov http://www.outdoorchannel.com
  Form 10-K, Form 10-Q Form 8-K
 9




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##### Table of Contents



http://www.outdoorchannel.com (951) 699-6991).
  ITEM 1A.
    RISK
    FACTORS.    Service
    providers could discontinue or refrain from carrying Outdoor
    Channel, or decide to not renew our distribution agreements,
    which could substantially reduce the number of viewers and harm
    our operating results.
  month-to-month
  If our
    channel is placed in unpopular program packages by our service
    providers, or if service fees are increased for our subscribers,
    the number of viewers of our channel may decline which could
    harm our business and operating results.
   10




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##### Table of Contents



and/or
  A
    deterioration in general economic conditions may cause a
    decrease in, or hinder our ability to grow, our advertising
    revenues.
    We may
    not be able to effectively manage our future growth or the
    integration of acquisitions, and our growth may not continue,
    which may substantially harm our business and
    prospects.
    We may
    not be able to maintain sufficient revenue relating to our
    production business to offset its fixed costs, and as a result
    our profitability may decrease.
    We may
    not be able to grow our subscriber base of Outdoor Channel at a
    sufficient rate to offset planned increased costs, decreased
    revenue or at all, and as a result our revenues and
    profitability may not increase and could decrease.
   11




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We could
    have an aerial camera fall, harming our reputation and possibly
    causing damage exceeding our liability insurance
    limits.
    We do not
    control the methodology used by Nielsen to estimate our
    subscriber base or television ratings, and changes, or
    inaccuracies, in such estimates could cause our advertising
    revenue to decrease.
    If we
    offer favorable terms or incentives to service providers in
    order to grow our subscriber base, our operating results may be
    harmed or your percentage of the Company may be
    diluted.
  un-amortized
  If, in
    our attempt to increase our number of subscribers, we structure
    favorable terms or incentives with one service provider in a way
    that would require us to offer the same terms or incentives to
    all other service providers, our operating results may be
    harmed.
   12




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We may
    become constrained in our programming content if some
    organizations are successful in obtaining legal restrictions on
    certain content in our programming which may increase our
    production expenses, and cause our viewers to decrease their
    viewing time which in turn could cause decreased advertising
    revenue.
    Consolidation
    among service providers may harm our business.
    The
    cable, satellite and telco television industry is subject to
    substantial governmental regulation for which compliance may
    increase our costs, hinder our growth and possibly expose us to
    penalties for failure to comply.
       13




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Our
    investments in auction-rate securities are subject to risks
    which may affect the liquidity of these investments and could
    cause additional impairment charges.
  other-than-temporary,
  We may
    not be able to secure sufficient or additional advertising
    revenue, and as a result, our profitability may be negatively
    impacted.
      We cannot
    be certain in the future that we will be able to report that our
    controls are without material weakness or to complete our
    evaluation of those controls in a timely fashion.
  Form 10-K
   14




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Expenses
    relating to programming and production costs are generally
    increasing and a number of factors can cause cost overruns and
    delays, and our operating results may be adversely impacted if
    we are not able to successfully recover the costs of developing,
    acquiring and producing new programming.
    Our
    operating results may vary significantly, and historical
    comparisons of our operating results are not necessarily
    meaningful and should not be relied upon as an indicator of
    future performance.
    
    carriage decisions of service providers;
    demand for advertising, advertising rates and offerings of
    competing media;
    changes in the growth rate of cable, satellite and telco
    subscribers;
    service providers capital and marketing expenditures and
    their impact on programming offerings and penetration;
    seasonal trends in viewer interests and activities;
    our advertising sales, for both Outdoor Channel and our
    Production Services, tend to be more robust during the second
    half of each year, while expenses remain relatively constant
    throughout the year;
    pricing, service, marketing and acquisition decisions that could
    reduce revenues and impair quarterly financial results;
    the mix of cable television, satellite-delivered and telco
    programming products and services sold and the distribution
    channels for those products and services;
    our ability to react quickly to changing consumer trends;
    increased compensation expenses resulting from the hiring or
    promotion of highly qualified employees;
    our need to retain some employees on a full-time basis
    throughout the year so that we have the minimally necessary
    personnel available during the busiest seasons;
    the necessity to do some projects that may be minimally
    profitable, if at all, in order to establish a business
    relationship with a strategic customer;
    specific economic conditions in the pay television and related
    industries; and
    changing regulatory requirements.   15




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Changes
    to financial accounting standards or our accounting estimates
    may affect our reported operating results.
    Our
    expansion into international operations has inherent risks,
    including currency exchange rate fluctuations, possible
    governmental seizure of property, and our inability or increased
    costs associated with enforcing our rights, including
    intellectual property rights.
    If we
    fail to develop and distribute popular programs, our viewership
    would likely decline, which could cause advertising and
    subscriber fee revenues to decrease.
    The
    market in which we operate is highly competitive, and we may not
    be able to compete effectively, particularly against competitors
    with greater financial resources, brand recognition, marketplace
    presence and relationships with service providers.
   16




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over-the-air
    Changes
    in corporate governance and securities disclosure and compliance
    practices have increased and may continue to increase our legal
    compliance and financial reporting costs.
    The
    satellite infrastructure that we use may fail or be preempted by
    another signal, which could impair our ability to deliver
    programming to our service providers.
    Natural
    disasters and other events beyond our control could interrupt
    our signal.
    Seasonal
    increases or decreases in advertising revenue may negatively
    affect our business.
   17




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We may be
    unable to access capital, or offer equity as an incentive for
    increased subscribers or for acquisitions, on acceptable terms
    to fund our future growth and operations.
    We may
    not be able to attract and retain key personnel.
    Cable,
    satellite and telco television programming signals have been
    stolen or could be stolen in the future, which reduces our
    potential revenue from subscriber fees and
    advertising.
    Because
    we expect to become increasingly dependent upon our intellectual
    property rights, our inability to protect those rights could
    negatively impact our ability to compete.
   18




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We may
    face intellectual property infringement claims that could be
    time-consuming, costly to defend and result in our loss of
    significant rights.
    Some of
    our existing stockholders can exert control over us and may not
    make decisions that are in the best interests of all
    stockholders.
    The
    market price of our common stock has been and may continue to be
    subject to wide fluctuations.
  Rule 10b5-1 Rule 10b-18
  Anti-takeover
    provisions in our certificate of incorporation, our bylaws and
    under Delaware law may enable our incumbent management to retain
    control of us and discourage or prevent a change of control that
    may be beneficial to our stockholders.
    
    allow the authorized number of directors to be changed only by
    resolution of our board of directors;
    establish a classified board of directors, providing that not
    all members of the board be elected at one time; 19




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
    require a
    662/3%
    stockholder vote to remove a director, and only for cause;
    authorize our board of directors to issue without stockholder
    approval blank check preferred stock that, if issued, could
    operate as a poison pill to dilute the stock
    ownership of a potential hostile acquirer to prevent an
    acquisition that is not approved by our board of directors;
    require that stockholder actions must be effected at a duly
    called stockholder meeting and prohibit stockholder action by
    written consent;
    establish advance notice requirements for stockholder
    nominations to our board of directors or for stockholder
    proposals that can be acted on at stockholder meetings;
    except as provided by law, allow only our board of directors to
    call a special meeting of the stockholders; and
    require a
    662/3%
    stockholder vote to amend our certificate of incorporation or
    bylaws.    Technologies
    in the pay television industry are constantly changing, and our
    failure to acquire or maintain
    state-of-the-art
    technology may harm our business and competitive
    advantage.
    If our
    goodwill becomes impaired, we will be required to recognize a
    noncash charge which could have a significant effect on our
    reported net earnings.
    Future
    issuance by us of preferred shares could adversely affect the
    holders of existing shares, and therefore reduce the value of
    existing shares.
    We do not
    expect to pay dividends in the foreseeable future.
   20




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ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS.    ITEM 2.
    PROPERTIES.    ITEM 3.
    LEGAL
    PROCEEDINGS.         21




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ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS.   PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES.  Market
    Information
    High

Low2009First Quarter


7.79



3.65Second Quarter


7.72



5.51Third Quarter


7.84



5.90Fourth Quarter


7.25



5.502008First Quarter


7.99



5.86Second Quarter


8.09



6.98Third Quarter


8.80



6.54Fourth Quarter


8.93



4.82     DIVIDEND
    POLICY
   22




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ISSUER
    PURCHASES OF EQUITY SECURITIES
  Rule 10b-18
  Total Number


Maximumof Shares


Approximate DollarPurchased as


Value that May YetTotal Number





Part of Publicly


Be Used to Purchaseof Shares


Average Price


Announced


Shares Under thePeriod

Purchased


Paid per Share


Program


ProgramMarch 3, 2009 through
    September 30, 2009


64,500


$
5.42



64,500


$
9,652,937October 1, 2009 through
    October 31, 2009


9,905



6.25



9,905



9,590,804November 1, 2009 through
    November 30, 2009


135,708



6.00



135,708



8,743,356December 1, 2009 through
    December 31, 2009


15,600



5.49



15,600



8,657,226Total


225,713


$
5.79



225,713    23




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##### Table of Contents



PERFORMANCE
    GRAPH
      Outdoor
    Channel Holdings, Inc.
    Performance Graph
    Comparison of Cumulative Total Return*
  
  *
    
    Assumes $100 investment in Companys common stock on
    December 31, 2004 24




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA.    Year Ended December 31,2009


2008


2007


2006


2005(In thousands, except per share amounts)Income Statement Data:Revenues:Advertising

$
34,325


$
36,562


$
29,149


$
25,034


$
22,273Subscriber fees


18,848



17,495



17,297



17,686



15,432Production services


33,679















Total revenues


86,852



54,057



46,446



42,720



37,705Income (loss) from operations


1,910



4,839



(3,441
)


(13,598
)


2,697Income (loss) before income taxes


1,983



6,360



(161
)


(11,153
)


3,593Income tax provision (benefit)


2,268



3,988



1,718



(3,876
)


1,460Income (loss)


(285
)


2,372



(1,879
)


(7,277
)


2,133Net income (loss) from continuing operations


(285
)


2,372



(1,879
)


(7,277
)


2,133Income from discontinued operations, net of tax










1



289



60Net income (loss)

$
(285
)

$
2,372


$
(1,878
)

$
(6,988
)

$
2,193Earnings (loss) from continuing operations per common share:Basic

$
(0.01
)

$
0.09


$
(0.07
)

$
(0.30
)

$
0.10Diluted

$
(0.01
)

$
0.09


$
(0.07
)

$
(0.30
)

$
0.09Earnings (loss) per common share:Basic

$
(0.01
)

$
0.09


$
(0.07
)

$
(0.28
)

$
0.10Diluted

$
(0.01
)

$
0.09


$
(0.07
)

$
(0.28
)

$
0.09Weighted average number of common shares outstanding:Basic


24,452



25,369



26,027



24,556



21,423Diluted


24,452



26,086



26,027



24,556



24,732   25




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##### Table of Contents



As of December 31,2009

2008

2007

2006

2005(In thousands)Balance Sheet Data:Cash and cash equivalents

$
20,848


$
60,257


$
25,260


$
14,226


$
17,672Investments in auction-rate and available-for-sale securities:Current


38,090







46,155



42,144



38,830Non-current


5,775



6,456











Goodwill


43,160



43,160



43,160



43,816



44,457Other assets


48,905



33,081



37,126



44,764



50,863Total assets


156,778



142,954



151,701



144,950



151,822Total liabilities


18,480



6,545



5,124



6,004



12,809Stockholders equity


138,298



136,409



146,577



138,946



139,013   ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS.  Safe
    Harbor Statement
  Form 10-K
  Form 10-K
  General
     26




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Critical
    Accounting Policies and Estimates
      Revenue
    Recognition
         27




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Valuation
    of Goodwill
           28




---



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Prepaid
    Programming Costs
    Accounts
    Receivable
    Share-Based
    Compensation
      Income
    Taxes
   29




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Recent
    Accounting Pronouncements
    other-than-temporary other-than-temporary other-than-temporary
     30




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Comparison
    of Operating Results for the Years Ended December 31, 2009
    and December 31, 2008
    Change


% of Total Revenue2009


2008


$


%


2009


2008Revenues:Advertising

$
34,325


$
36,562


$
(2,237
)


(6.1
)%


39.5
%


67.6
%Subscriber fees


18,848



17,495



1,353



7.7



21.7



32.4Production services


33,679







33,679



100.0



38.8



Total revenues


86,852



54,057



32,795



60.7



100.0



100.0Cost of services:Programming


5,165



6,903



(1,738
)


(25.2
)


5.9



12.8Satellite transmission fees


1,597



1,971



(374
)


(19.0
)


1.8



3.6Production and operations


35,710



5,892



29,818



506.1



41.1



10.9Other direct costs


563



383



180



47.0



0.6



0.7Total cost of services


43,035



15,149



27,886



184.1



49.5



28.0Other expenses:Advertising


2,779



3,317



(538
)


(16.2
)


3.2



6.1Selling, general and administrative


35,131



28,305



6,826



24.1



40.4



52.4Depreciation and amortization


3,997



2,447



1,550



63.3



4.6



4.5Total other expenses


41,907



34,069



7,838



23.0



48.3



63.0Income from operations


1,910



4,839



(2,929
)


(60.5
)


2.2



9.0Interest and other income, net


73



1,521



(1,448
)


(95.2
)


0.1



2.8Income from operations before income taxes


1,983



6,360



(4,377
)


(68.8
)


2.3



11.8Income tax provision


2,268



3,988



(1,720
)


(43.1
)


2.6



7.4Net income (loss)

$
(285
)

$
2,372


$
(2,657
)


(112.0
)%


(0.3
)%


4.4
%      Overview
     31




---



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Revenues
             32




---



##### Table of Contents



Cost of
    Services
           33




---



##### Table of Contents



Other
    Expenses
             34




---



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Income
    from Operations
    Interest
    and Other Income, Net
  available-for-sale
  Income
    from Operations Before Income Taxes
    Income
    Tax Provision
    Net
    Income (Loss)
   35




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Comparison
    of Operating Results for the Years Ended December 31, 2008
    and December 31, 2007
    Change


% of Total Revenue2008


2007


$


%


2008


2007Revenues:Advertising

$
36,562


$
29,149


$
7,413



25.4
%


67.6
%


62.8
%Subscriber fees


17,495



17,297



198



1.1



32.4



37.2Total revenues


54,057



46,446



7,611



16.4



100.0



100.0Cost of services:Programming


6,903



5,814



1,089



18.7



12.8



12.5Satellite transmission fees


1,971



2,504



(533
)


(21.3
)


3.6



5.4Production and operations


5,892



4,740



1,152



24.3



10.9



10.2Other direct costs


383



194



189



97.4



0.7



0.4Total cost of services


15,149



13,252



1,897



14.3



28.0



28.5Other expenses:Advertising


3,317



4,705



(1,388
)


(29.5
)


6.1



10.1Selling, general and administrative


28,305



29,265



(960
)


(3.3
)


52.4



63.0Depreciation and amortization


2,447



2,665



(218
)


(8.2
)


4.5



5.7Total other expenses


34,069



36,635



(2,566
)


(7.0
)


63.0



78.9Income (loss) from operations


4,839



(3,441
)


8,280



(240.6
)


8.9



(7.4
)Interest and other income, net


1,521



3,280



(1,759
)


(53.6
)


2.8



7.1Income (loss) from continuing operations before income taxes


6,360



(161
)


6,521



NM



11.8



(0.3
)Income tax provision


3,988



1,718



2,270



132.1



7.4



3.7Income (loss) from continuing operations


2,372



(1,879
)


4,251



(226.2
)


4.4



(4.0
)Income from discontinued operations, net of tax






1



(1
)


(100.0
)






Net income (loss)

$
2,372


$
(1,878
)

$
4,250



(226.3
)%


4.4
%


(4.0
)%         Revenues
     36




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Cost of
    Services
              Other
    Expenses
     37




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##### Table of Contents



Income
    (Loss) from Operations
    Interest
    and Other Income, Net
  available-for-sale other-than-temporary
  Income
    (Loss) from Continuing Operations Before Income Taxes
    Income
    Tax Provision
   38




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Income
    (Loss) from Continuing Operations
    Income
    from Discontinued Operations, Net of Tax
    Net
    Income (Loss)
    Liquidity
    and Capital Resources
    available-for-sale
    available-for-sale available-for-sale
 39




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Less than








AfterContractual Obligations

Total


1 Year


1 - 3 Years


3 - 5 Years


5 YearsOperating lease obligations

$
6,691


$
1,502


$
1,511


$
1,364


$
2,314Purchase obligations


19,256



10,904



5,771



2,156



425Employment agreements


4,050



1,450



2,600







Total

$
29,997


$
13,856


$
9,882


$
3,520


$
2,739     ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.      line-of-credit
 40




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA. INDEX  Report of Independent Registered Public
    Accounting Firm


42Consolidated Balance Sheets as of
    December 31, 2009 and 2008


43Consolidated Statements of Operations for the
    Years Ended December 31, 2009, 2008 and 2007


44Consolidated Statements of Stockholders
    Equity for the Years Ended December 31, 2009, 2008 and
    2007


45Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2009, 2008 and 2007


48Notes to Consolidated Financial Statements


49   * *
    *
 41




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            
    42




---



##### Table of Contents



OUTDOOR
    CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
    Consolidated Balance Sheets
    As of December 31, 2009 and 2008  2009


2008(In thousands, exceptshare par value data)ASSETSCurrent assets:Cash and cash equivalents

$
20,848


$
60,257Investments in
    available-for-sale
    securities


38,090



Accounts receivable, net of allowance for doubtful accounts of
    $620 and $891


15,827



9,448Deferred tax assets, net


2,434



1,524Prepaid programming costs


6,111



3,997Other current assets


1,871



1,333Total current assets


85,181



76,559Property, plant and equipment, net


14,286



10,042Amortizable intangible assets, net


828



142Goodwill


43,160



43,160Investments in auction-rate securities


5,775



6,456Deferred tax assets, net


2,489



4,949Subscriber acquisition fees


4,371



1,221Deposits and other assets


688



425Totals

$
156,778


$
142,954LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses

$
14,824


$
5,923Accrued severance payments


255



25Deferred revenue


1,469



205Current portion of deferred obligations


165



126Current portion of unfavorable lease


136



Income taxes payable


459



30Total current liabilities


17,308



6,309Deferred obligations


178



236Unfavorable lease obligation


994



Total liabilities


18,480



6,545Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value; 25,000 shares
    authorized; none issued






Common stock, $0.001 par value; 75,000 shares
    authorized; 25,444 and 25,246 shares issued and outstanding


25



25Additional paid-in capital


165,374



163,300Accumulated other comprehensive (loss)


(444
)


(327
)Accumulated deficit


(26,657
)


(26,589
)Total stockholders equity


138,298



136,409Totals

$
156,778


$
142,954    43




---



##### Table of Contents



OUTDOOR
    CHANNEL HOLDINGS, INC. AND SUBSIDIARIES



Consolidated
    Statements of Operations

For the
    Years Ended December 31, 2009, 2008 and 2007  2009


2008


2007(In thousands, except per share data)Revenues:Advertising

$
34,325


$
36,562


$
29,149Subscriber fees


18,848



17,495



17,297Production services


33,679







Total revenues


86,852



54,057



46,446Cost of services:Programming


5,165



6,903



5,814Satellite transmission fees


1,597



1,971



2,504Production and operations


35,710



5,892



4,740Other direct costs


563



383



194Total cost of services


43,035



15,149



13,252Other expenses:Advertising


2,779



3,317



4,705Selling, general and administrative


35,131



28,305



29,265Depreciation and amortization


3,997



2,447



2,665Total other expenses


41,907



34,069



36,635Income (loss) from operations


1,910



4,839



(3,441
)Interest and other income, net


73



1,521



3,280Income (loss) from continuing operations before income taxes


1,983



6,360



(161
)Income tax provision


2,268



3,988



1,718Income (loss) from continuing operations


(285
)


2,372



(1,879
)Income from discontinued operations, net of tax










1Net income (loss)

$
(285
)

$
2,372


$
(1,878
)Basic earnings (loss) per common share data:From continuing operations

$
(0.01
)

$
0.09


$
(0.07
)From discontinued operations

$



$



$
Basic earnings per common share

$
(0.01
)

$
0.09


$
(0.07
)Diluted earnings (loss) per common share data:From continuing operations

$
(0.01
)

$
0.09


$
(0.07
)From discontinued operations

$



$



$
Diluted earnings per common share

$
(0.01
)

$
0.09


$
(0.07
)Weighted average number of common shares outstanding:Basic


24,452



25,369



26,027Diluted


24,452



26,086



26,027    44




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##### Table of Contents



OUTDOOR
    CHANNEL HOLDINGS, INC. AND SUBSIDIARIES



Consolidated
    Statements of Stockholders Equity

For the
    Years Ended December 31, 2009, 2008 and 2007  AccumulatedAdditional


OtherCommon Stock


Paid-in


Comprehensive


AccumulatedShares


Amount


Capital


Income (Loss)


Deficit


Total(In thousands)Balance, January 1, 2009


25,246


$
25


$
163,300


$
(327
)

$
(26,589
)

$
136,409Comprehensive Income (Loss):Net loss


















(285
)


(285
)Cumulative effect of adoption of ASC 320














(217
)


217



Change in fair value of auction-rate securities














100







100Total comprehensive loss






















(185
)Issuance of restricted stock to employees and service providers
    for services to be rendered, net of forfeited shares


525



1















1Share-based employee and service provider compensation expense










4,100











4,100Purchase and retirement of treasury stock related to employee
    and service provider share-based compensation activity


(101
)






(659
)










(659
)Purchase and retirement of treasury stock related to stock
    repurchase program


(226
)


(1
)


(1,344
)










(1,345
)Tax shortfalls from share-based payments










(23
)










(23
)Balance, December 31, 2009


25,444


$
25


$
165,374


$
(444
)

$
(26,657
)

$
138,298    45




---



##### Table of Contents



OUTDOOR
    CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Consolidated
    Statements of Stockholders Equity
 For the
    Years Ended December 31, 2009, 2008 and 2007
  AccumulatedAdditional


OtherCommon Stock


Paid-in


Comprehensive


AccumulatedShares


Amount


Capital


Income (Loss)


Deficit


Total(In thousands)Balance, January 1, 2008


26,870


$
27


$
175,570


$
(59
)

$
(28,961
)

$
146,577Comprehensive Income:Net income


















2,372



2,372Change in fair value of
    available-for-sale
    securities














(268
)






(268
)Total comprehensive income






















2,104Common stock issued upon exercise of stock options


2







11











11Issuance of restricted stock and performance shares to employees
    for services to be rendered, net of forfeited shares


408



















Share-based employee and service provider compensation expense










3,605











3,605Purchase and retirement of treasury stock related to employee
    and service provider share-based compensation activity


(75
)






(549
)










(549
)Purchase and retirement of treasury stock related to stock
    repurchase program


(1,959
)


(2
)


(14,998
)










(15,000
)Tax shortfalls from share-based payments










(339
)










(339
)Balance, December 31, 2008


25,246


$
25


$
163,300


$
(327
)

$
(26,589
)

$
136,409    46




---



##### Table of Contents



OUTDOOR
    CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Consolidated
    Statements of Stockholders Equity
 For the
    Years Ended December 31, 2009, 2008 and 2007
  AccumulatedAdditional


OtherCommon Stock


Paid-in


Comprehensive


AccumulatedShares


Amount


Capital


Income (Loss)


Deficit


Total(In thousands)Balance, January 1, 2007


25,507


$
26


$
165,205


$
48


$
(26,333
)

$
138,946Comprehensive Income (Loss):Net loss


















(1,878
)


(1,878
)Change in fair value of
    available-for-sale
    securities, net of deferred tax benefit of $67














(107
)






(107
)Total comprehensive loss






















(1,985
)Common stock issued upon exercise of stock options


975



1



1,194











1,195Issuance of restricted stock and performance shares to employees
    for services to be rendered, net of forfeited shares


482



















Share-based employee and service provider compensation expense










10,260











10,260Purchase and retirement of treasury stock related to employee
    and service provider share-based compensation activity


(94
)






(823
)










(823
)Tax shortfalls from share-based payments










(266
)










(266
)Cumulative effect of adoption of new accounting
    pronouncement 


















(750
)


(750
)Balance, December 31, 2007


26,870


$
27


$
175,570


$
(59
)

$
(28,961
)

$
146,577    47




---



##### Table of Contents



OUTDOOR
    CHANNEL HOLDINGS, INC. AND SUBSIDIARIES



Consolidated
    Statements of Cash Flows

For the
    Years Ended December 31, 2009, 2008 and 2007  2009


2008


2007(In thousands)Operating activities:Net income (loss)

$
(285
)

$
2,372


$
(1,878
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities of continuing operations:Income from discontinued operations










(1
)Depreciation and amortization


3,997



2,447



2,665Amortization of subscriber acquisition fees


974



489



489Loss on sale of equipment


74



36



Gain on sale of
    available-for-sale
    and auction-rate securities


(12
)


(75
)


Other-than-temporary
    impairment on auction-rate securities






336



Provision for doubtful accounts


524



709



219Share-based employee and service provider compensation


4,100



3,605



10,260Deferred tax provision, net


1,527



3,249



1,628Tax benefits from exercise of stock options in excess of
    recognized expense










(1,520
)Changes in operating assets and liabilities:Accounts receivable


(1,213
)


(1,853
)


(1,702
)Income tax refund receivable and payable, net


429



224



2,075Prepaid programming costs


(555
)


(475
)


(809
)Other current assets


229



(158
)


(340
)Deposits and other assets


(93
)


(205
)


(318
)Subscriber acquisition fees


(1,078
)






Accounts payable and accrued expenses


(1,535
)


1,917



1,344Accrued severance payments


230



(254
)


(106
)Customer deposits






(14
)


(39
)Deferred revenue


849



(56
)


(349
)Deferred obligations


(19
)


(50
)


46Unfavorable lease obligations


(121
)






Net cash provided by operating activities


8,022



12,244



11,664Investing activities:Purchases of property, plant and equipment


(2,526
)


(857
)


(1,259
)Purchase of intangibles






(97
)


Proceeds from sale of equipment


142



74



12Cash paid to purchase assets of Winnercomm, net of cash acquired


(5,746
)






Proceeds from sale of discontinued operations










3,589Purchases of
    available-for-sale
    and auction-rate securities


(37,997
)


(27,181
)


(130,945
)Proceeds from sale of
    available-for-sale
    and auction-rate securities


700



66,352



126,760Net cash provided by (used in) investing activities


(45,427
)


38,291



(1,843
)Financing activities:Proceeds from exercise of stock options






11



1,195Purchase and retirement of stock related to stock repurchase
    program


(1,345
)


(15,000
)


Purchase of treasury stock


(659
)


(549
)


(823
)Tax benefits from exercise of stock options in excess of
    recognized expense










1,520Net cash provided by (used in) financing activities


(2,004
)


(15,538
)


1,892Cash flows from discontinued operations:Net cash used in operating activities of discontinued operations










(618
)Net cash used in investing activities of discontinued operations










(61
)Net cash provided by financing activities of discontinued
    operations










Net cash provided by (used in) discontinued operations










(679
)Net increase (decrease) in cash and cash equivalents


(39,409
)


34,997



11,034Cash and cash equivalents, beginning of year


60,257



25,260



14,226Cash and cash equivalents, end of year

$
20,848


$
60,257


$
25,260Supplemental disclosure of cash flow information:Interest paid

$
1


$



$
12Income taxes paid

$
282


$
514


$
349Supplemental disclosures of non-cash investing and financing
    activities:Issuance of restricted stock to employees for services rendered

$
4,259


$
3,713


$
3,387Retirement of treasury stock

$
659


$
549


$
823Effect of net increase (decrease) in fair value of
    available-for-sale
    securities

$
100


$
(268
)

$
(107
)Property, plant and equipment costs incurred but not paid

$
50


$
17


$
171Subscriber acquisition fees incurred but not paid

$
3,046


$



$
    48




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##### Table of Contents



OUTDOOR
    CHANNEL HOLDINGS, INC. AND SUBSIDIARIES



Notes to
    Consolidated Financial Statements

(In
    thousands, except per share data)  Note 1 
    Organization
    and Business  Description
    of Operations
        Principles
    of Consolidation
    Basis
    of Presentation
    Accounting
    Estimates
   49




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
   Note 2 
    Summary
    of Significant Accounting Policies  Cash
    and Cash Equivalents
    Subscriber
    Acquisition Fees
      Prepaid
    Programming Costs
    Property,
    Plant and Equipment
    Buildings and improvements


10 - 39 yearsEquipment


5 yearsFurniture and fixtures


3 - 7 yearsVehicles


7 yearsLeasehold improvements


3 - 10 years   Amortizable
    Intangible Assets
   50




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  Long-Lived
    Assets
    Goodwill
             51




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
      Advertising
    Revenue
    Recognition
               52




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
      Income
    Taxes
        Earnings
    (Loss) Per Share
      2009

2008

2007Weighted average shares used to calculate basic earnings (loss)
    per share


24,452



25,369



26,027Dilutive effect of potentially issuable common shares upon
    exercise of dilutive stock options and performance units






717



Weighted average shares used to calculate diluted earnings
    (loss) per share


24,452



26,086



26,027  53




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Share-Based
    Compensation
      Investments
    and Financial Instruments
  available-for-sale
    Recent
    Accounting Pronouncements
    other-than-temporary other-than-temporary other-than-temporary
     54




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Note 3 
    Acquisition      January 12, 2009Fair value of the net tangible assets acquired and liabilities
    assumed:Cash and cash equivalents

$
198Receivables


5,690Other current assets


2,324Property, plant and equipment


5,433Other assets


211Accounts payable and accrued liabilities


(7,356
)Deferred revenues


(415
)Unfavorable leases


(1,251
)Total net tangible assets acquired and liabilities assumed





$
4,834Fair value of identifiable intangible assets acquired:Customer relationships


980Patents


80Programming library


50Total identifiable intangible assets acquired






1,110Total purchase price






5,944Less cash acquired






(198
)Net purchase price





$
5,746         Intangible
    Assets
   55




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Customer relationships


3.5 yearsPatents


5.0 yearsProgramming library


1.0 yearTotal intangible assets   Unaudited
    Pro Forma Financial Information
      Year EndedDecember 31,2009

2008Total revenues

$
87,800


$
99,932Net income (loss)

$
(1,004
)

$
(57,437
)Basic earnings (loss) per share

$
(0.04
)

$
(2.26
)Diluted earnings (loss) per share

$
(0.04
)

$
(2.26
)   Note 4 
    Subscriber
    Acquisition Fees    2009


2008Subscriber acquisition fees, at cost

$
6,569


$
2,445Accumulated amortization


(2,198
)


(1,224
)Subscriber acquisition fees, net

$
4,371


$
1,221     Years Ending December 31,

Amount2010

$
1,6082011


1,3882012


9552013


420Total amortization

$
4,371  56




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Note 5 
    Investments
    in
    Available-For-Sale
    Securities    Level 1 
  Level 2 
  Level 3 
    Quoted Prices


Significantin Active


Other


SignificantMarkets for


Observable


UnobservableIdentical Assets


Inputs


InputsTotal


(Level 1)


(Level 2)


(Level 3)Cash and cash equivalents(1)

$
20,848


$
20,848


$



$
Investments in
    available-for-sale
    securities(2)


38,090



37,997



93



Non-current investments in
    available-for-sale
    securities(3)


5,775











5,775Total

$
64,713


$
58,845


$
93


$
5,775     (1)
    
    Cash and cash equivalents consist primarily of treasury bills
    and money market funds with original maturity dates of three
    months or less, for which we determine fair value through quoted
    market prices.(2)
    
    Investments in
    available-for-sale
    securities consist of treasury bills with original maturity
    dates in excess of three months, for which we determine fair
    value through quoted market prices, and one auction-rate
    security totaling $93 which was redeemed in January 2010.(3)
    
    Investments in
    available-for-sale
    securities consist of one auction-rate municipal security and
    two closed end perpetual preferred auction-rate securities
    (PPS). The fair value of PPS securities are
    calculated using a discounted cash flow analysis to more
    accurately measure possible liquidity discounts.   57




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  other-than-temporary
  other-than-temporary other-than-temporary other-than-temporary available-for-sale
   58




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Year Ended December 31,2009


2008Auction-Rate Securities:Balance at beginning of period

$
6,456


$
Transfers into Level 3






9,725Transfers into Level 2 to be redeemed


(93
)


Redeemed


(700
)


(2,606
)Realized gain on redemption


12



Other-than-temporary
    impairment






(336
)Unrealized gain included in accumulated other comprehensive loss


100



(327
)Balance as of December 31, 2009

$
5,775


$
6,456     Year Ended December 31,2009


2008


2007Interest income

$
166


$
1,750


$
3,215Interest expense


(105
)






(12
)Dividend income






32



77Loss on sale of equity securities






(44
)


Gain on redemption of auction-rate securities


12



119



Other-than-temporary
    impairment on auction-rate securities






(336
)


Total interest and other income, net

$
73


$
1,521


$
3,280   Note 6 
    Comprehensive
    Income (Loss)    2009


2008


2007Net income (loss), as reported

$
(285
)

$
2,372


$
(1,878
)Change in fair value of auction-rate and
    available-for-sale
    securities


100



(268
)


(107
)Comprehensive income (loss)

$
(185
)

$
2,104


$
(1,985
)  59




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
   Note 7 
    Property,
    Plant and Equipment    2009


2008Land

$
618


$
600Buildings and improvements


8,932



8,822Equipment


12,962



7,289Furniture and fixtures


726



228Vehicles


168



271Leasehold improvements


1,493



64924,899



17,859Less accumulated depreciation


(10,613
)


(7,817
)Totals

$
14,286


$
10,042     Note 8 
    Goodwill
    and Intangible Assets    2009AccumulatedGross


Amortization


NetTrademark

$
219


$
189


$
30Internet domain names


98



49



49Customer relationships


2,952



2,269



683Patents


80



16



64Programming library


50



48



2Total intangible assets

$
3,399


$
2,571


$
828   2008AccumulatedGross


Amortization


NetTrademark

$
219


$
175


$
44Internet domain names


98







98Customer relationships


1,971



1,971



Total intangible assets

$
2,288


$
2,146


$
142    60




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Years Ending December 31,

Amount2010

$
3152011


1802012


1672013


1622014 and thereafter


4Total

$
828   Note 9 
    Lines of
    Credit  Bank
    Lines of Credit
    Note 10 
    Commitments
    and Contingencies      Less than








AfterContractual Obligations

Total


1 Year


1 - 3 Years


3 - 5 Years


5 YearsOperating lease obligations

$
6,691


$
1,502


$
1,511


$
1,364


$
2,314Purchase obligations


19,256



10,904



5,771



2,156



425Employment agreements


4,050



1,450



2,600







Total

$
29,997


$
13,856


$
9,882


$
3,520


$
2,739      61




---



##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
      60-day
            
    If the Company terminates Mr. Werners employment
    without cause, or Mr. Werner resigns for good reason,
    Mr. Werner will receive (i) severance payments (less
    taxes) which shall result in an aggregate severance payment of
    $1,250 (payable over a period of twelve (12) months if such
    event occurs prior to October 17, 2009, or eighteen
    (18) months if such event occurs after October 16,
    2009), and (ii) accelerated vesting with 62




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OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  respect to 50% of the then unvested portion of his outstanding
    equity awards, except for the performance units awards
    previously issued to Mr. Werner;  
    If the Company terminates Mr. Hornishs employment
    without cause, or Mr. Hornish resigns for good reason,
    Mr. Hornish will receive (i) monthly severance
    payments of approximately $31 for 12 months (resulting in
    an aggregate severance payment of $375) if such termination or
    resignation is not in connection with a change in control of the
    Company; and (ii) monthly severance payments of
    approximately $42 for 18 months (resulting in an aggregate
    severance payment of $750) if such termination or resignation is
    in connection with a change in control of the Company;
    If the Company terminates Mr. Burkes employment
    without cause, or Mr. Burke resigns for good reason,
    Mr. Burke will receive (i) monthly severance payments
    of approximately $21 for 12 months (resulting in an
    aggregate severance payment of $250) if such termination or
    resignation is not in connection with a change in control of the
    Company; and (ii) monthly severance payments of
    approximately $28 for 18 months (resulting in an aggregate
    severance payment of $500) if such termination or resignation is
    in connection with a change in control of the Company; and
    If the Company terminates Mr. Wilburns employment
    without cause, or Mr. Wilburn resigns for good reason,
    Mr. Wilburn will receive monthly severance payments of $25
    for 16 months (resulting in an aggregate severance payment
    of $400).         63




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Rule 10b-18
  Operating
    Leases
                Years Ending December 31,

Amount2010

$
1,5022011


8102012


7012013


6862014 and thereafter


2,992Total

$
6,691  64




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  Note 11 
    Income
    Taxes    2009


2008


2007Current:Federal

$
538


$
225


$
40State


202



541



3Total current


740



766



43Deferred:Federal


1,196



3,239



1,411State


332



(17
)


264Total deferred


1,528



3,222



1,675Totals

$
2,268


$
3,988


$
1,718     2009


2008Deferred tax assets:Net operating loss carryforwards

$
754


$
958Share-based compensation


4,547



4,795Deferred revenues


94



80Other accrued liabilities


408



406Intangible assets


138



Alternative minimum tax credit






319Allowance for doubtful accounts


218



323Programming costs


346



364Capital loss carryover


456



519Other


71



220Subtotal


7,032



7,984Less: Valuation allowance


(637
)


(519
)$
6,395


$
7,465Deferred tax liabilities:Property, plant and equipment


(1,115
)


(521
)State taxes


(357
)


(471
)(1,472
)


(992
)Deferred tax assets, net

$
4,923


$
6,473    65




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    2009


2008


2007Federal income tax provision (benefit) at statutory income tax
    rate

$
674


$
2,162


$
(55
)State taxes, net of federal benefit


160



346



177Non-deductible expense


46



41



21Share-based compensation


568



925



1,200Officer compensation


647



418



Valuation allowance


(5
)


89



251State rate adjustment


193







Other


(15
)


7



124Income tax provision

$
2,268


$
3,988


$
1,718     2009


2008


2007Gross unrecognized tax benefits as of January 1,

$
1,309


$
1,309


$
1,136Increases in tax positions for prior years










173Decreases in tax positions for prior years


(466
)






Settlements










Lapse in statute of limitations










Gross unrecognized tax benefits as of December 31,

$
843


$
1,309


$
1,309       Note 12 
    Stock
    Incentive Plans     66




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
      2004 Long-Term Incentive Plan (LTIP
    Plan).
  Non-Employee Director Stock Option Plan
    (NEDSOP).
      December 31,2009


2008


2007Nature of Award:Restricted stock

$
3,681


$
3,004


$
1,975Options


419



601



1,701Performance units










6,584Total share-based compensation expense

$
4,100


$
3,605


$
10,260   67




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  December 31,2009


2008


2007Classification of Compensation Expense:Cost of services:Production and operations

$
270


$
440


$
263Other expenses:Selling, general and administrative


3,830



3,165



9,997Total share-based compensation expense

$
4,100


$
3,605


$
10,260     Year Ended December 31,2009

2008

2007Risk-free interest rate





1.4 - 2.3%

4.9 - 5.0%Dividend yield





0.0%

0.0%Expected life of the option





0.1 - 0.3 years

0.8 yearsVolatility factor





33.6 - 52.6%

39.2 - 39.5%Weighted average volatility factor





45.4%

39.4%     Issuances
    of Common Stock by the Company
    2009

2008

2007Number of options exercised






2



975Cash proceeds

$



$
11


$
1,195Tax benefit from options exercised

$



$
2


$
2,376  68




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  Stock
    Options
    WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicShares


Price


Term (Yrs.)


Value(In thousands)








(In thousands)Outstanding at January 1, 2007


3,272


$
9.48Granted






Exercised


(975
)


1.23Forfeited


(448
)


14.06Expired


(407
)


13.60Outstanding at December 31, 2007


1,442



12.48Granted






Exercised


(2
)


6.14Forfeited


(23
)


12.11Expired


(587
)


11.92Outstanding at December 31, 2008


830



12.90Granted






Exercised






Forfeited


(3
)


12.58Expired


(177
)


14.09Outstanding at December 31, 2009


650


$
12.58



2.53


$
Vested and expected to vest at December 31, 2009


650


$
12.58



2.53


$
Exercisable at December 31, 2009


631


$
12.55



2.57


$
     Options OutstandingWeighted





Options ExercisableAverage


Weighted





WeightedRemaining


Average





AverageRange of

Number


Contractual


Exercise


Number


ExerciseExercise Prices

Outstanding


Term (Yrs.)


Price


Exercisable


Price(In thousands)








(In thousands)$10.19 - $10.19


10



1.25


$
10.19



8


$
10.19$12.10 - $12.10


300



1.79



12.10



300



12.10$12.50 - $12.50


125



3.96



12.50



125



12.50$12.58 - $12.58


25



1.42



12.58



19



12.58$12.80 - $12.80


125



4.04



12.80



125



12.80$14.86 - $14.95


65



0.87



14.88



55



14.88Total


650



2.53


$
12.58



631


$
12.55  69




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
    Restricted
    Stock
    WeightedAverageGrant-DateShares


Fair Value(In thousands)Nonvested at January 1, 2007


314


$
12.73Granted


538



9.41Vested


(99
)


12.31Forfeited


(56
)


12.46Nonvested at December 31, 2007


697



10.25Granted


504



7.37Vested


(256
)


10.62Forfeited


(96
)


9.96Nonvested at December 31, 2008


849



8.46Granted


611



6.97Vested


(375
)


8.89Forfeited


(36
)


7.96Nonvested at December 31, 2009


1,049


$
7.46       Expense
    to be Recognized
    As of December 31, 2009WeightedAverageExpense


Remainingyet to be


RequisiteRecognized


Service PeriodsStock options

$
18



0.2 yearsRestricted stock


5,897



2.5 yearsTotal

$
5,915



2.5 years  70




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  Additional
    Required Disclosures Related to Employee Performance
    Units
    First Award

Second AwardRisk-free interest rate

4.8%

4.8%Dividend yield

0.0%

0.0%Closing per share price on grant date

$12.10

$12.10Expected volatility

54.0%

72.9%Estimated service period

7.2 months

13.3 monthsFair value of one common share

$11.29

$11.19     Note 13 
    Segment
    Information      Income (Loss)





DepreciationBefore Income


Total


andRevenues


Taxes


Assets


Amortization2009TOC

$
53,173


$
6,649
*

$
88,015


$
2,058Production Services


33,679



(4,666
)


11,136



1,939Subtotals of Segments


86,852



1,983



99,151



3,997Corporate*










57,627



Totals

$
86,852


$
1,983


$
156,778


$
3,997     *
    
    We capture corporate overhead that is applicable to both
    segments in our TOC segment. The corporate overhead expenses
    consisted primarily of executive, legal and administrative
    functions not associated directly with either 71




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  TOC or Production Services. Corporate assets consist primarily
    of cash not held in our operating accounts and
    available-for-sale
    securities.  Note 14 
    Related
    Party Transactions      Note 15 
    Discontinued
    Operations        Year Ended December 31,2009

2008

2007Revenue

$



$



$
1,632Income (loss) from operations










73Income (loss) from discontinued operations, net of tax

$



$



$
1   Note 16 
    Concentration
    of Credit Risk  available-for-sale
   72




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
      Balance at

Additions



Balance atBeginning

Charged



End ofof Year

to Expense

Deductions

YearYear ended December 31, 2009

$
891


$
524


$
(795
)

$
620Year ended December 31, 2008


240



709



(58
)


891Year ended December 31, 2007


180



219



(159
)


240   Note 17 
    401(k)
    Savings Plan    Note 18 
    Accounts
    Payable and Accrued Expenses    2009


2008Trade accounts payable

$
4,849


$
855Accrued payroll and related expenses


4,488



2,665Estimated make-good accrual


281



252Accrued launch support commitment


3,046



Accrued expenses


2,160



2,151Total

$
14,824


$
5,923   Note 19 
    Quarterly
    Financial Information (Unaudited)    Three Months EndedMarch 31

June 30

September 30

December 312009Revenue

$
16,976


$
19,213


$
23,630


$
27,033Income (loss) from operations


(2,307
)


(1,240
)


2,011



3,489Net income (loss)


(1,262
)


(878
)


1,383



565Earnings (loss) per common share:Basic

$
(0.05
)

$
(0.04
)

$
0.06


$
0.02Diluted

$
(0.05
)

$
(0.04
)

$
0.05


$
0.02   73




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial Statements 
    (Continued)
  Three Months EndedMarch 31

June 30

September 30

December 312008Revenue

$
11,680


$
13,047


$
14,956


$
14,374Income (loss) from operations


(1,597
)


230



3,738



2,468Net income (loss)


(781
)


271



2,394



488Earnings (loss) per common share:Basic

$
(0.03
)

$
0.01


$
0.10


$
0.02Diluted

$
(0.03
)

$
0.01


$
0.09


$
0.02   Note 20 
    Subsequent
    Events (Unaudited)     74




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE.    ITEM 9A.
    CONTROLS
    AND PROCEDURES.  Evaluation of disclosure controls and
    procedures. Rule 13a-15(e) 15d-15(e)
    Changes in internal control over financial
    reporting.
  Managements report on internal control over financial
    reporting. Rule 13a-15(e)
    Form 10-K
 75




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                  
    76




---



##### 



ITEM 9B.
    OTHER
    INFORMATION.   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.    ITEM 11.
    EXECUTIVE
    COMPENSATION.    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS.    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE.    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES.   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES.  (a) The following documents are included as part of this
    Annual Report on
    Form 10-K.
  Financial Statements
   
 Index to Financial Statements


41Reports of Independent Registered Public
    Accounting Firms


42Consolidated Balance Sheets


43Consolidated Statements of Operations


44Consolidated Statements of Stockholders
    Equity


45Consolidated Statements of Cash Flows


48Notes to Consolidated Financial Statements


49    Financial Statement Schedules
   77




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##### Table of Contents



Regulation S-K.
  (b)
    Exhibits  ExhibitNumber

Description2
.1

Amended and Restated Agreement and Plan of Merger among The
    Outdoor Channel, Inc., Outdoor Channel Holdings, Inc. and Gold
    Prospectors Association of America, Inc. dated as of
    April 20, 2004, as amended and restated as of May 12,
    2004 (filed as Exhibit 2.1 to the Companys Current
    Report on
    Form 8-K
    filed on May 18, 2004 and incorporated herein by reference).2
.2

Agreement and Plan of Merger between Outdoor Channel Holdings,
    Inc., a Delaware corporation, and Outdoor Channel Holdings,
    Inc., an Alaska corporation, dated as of September 8, 2004
    (filed as Exhibit 2.1 to the Companys Current Report
    on
    Form 8-K
    filed on September 20, 2004 and incorporated herein by
    reference).3
.1

Certificate of Incorporation of Outdoor Channel Holdings, Inc, a
    Delaware corporation (filed as Exhibit 3.1 to the
    Companys Current Report on
    Form 8-K
    filed on September 20, 2004 and incorporated herein by
    reference).3
.2

By-Laws of Outdoor Channel Holdings, Inc., a Delaware
    corporation (filed as Exhibit 3.2 to the Companys
    Current Report on
    Form 8-K
    filed on September 20, 2004 and incorporated herein by
    reference).4
.1

Instruments defining the rights of security holders, including
    debentures (see exhibits 3.1 and 3.2 above).10
.1

Letter of intent dated August 27, 1993, regarding the
    proposed acquisition of Gold Prospectors Association of
    America, Inc. by the Company (filed as Exhibit 10.4 to the
    Companys
    Form 10-Q
    for the quarter ended September 30, 1993 and incorporated
    herein by reference).10
.2

Agreement and Plan of Reorganization dated February 13,
    1995, by and between the Registrant and Gold Prospectors
    Association of America, Inc. (filed as Exhibit B to the
    Companys
    Form 8-K
    dated February 13, 1995 and incorporated herein by
    reference).10
.3*

Form of Indemnification Agreement between Outdoor Channel
    Holdings, Inc. and its directors and certain executive officers
    (filed as Exhibit 10.1 to the Companys
    Form 10-Q
    for the quarter ended September 30, 2004 and incorporated
    herein by reference).10
.4

Revolving Credit Agreement and related agreements by and between
    the Company and U.S. Bank N.A. dated September 30, 2004
    (filed as Exhibit 10.2 to the Companys
    Form 10-Q
    for the quarter ended September 30, 2004 and incorporated
    herein by reference).10
.5*

1995 Stock Option Plan (filed as Exhibit 10.6 to the
    Companys
    Form 10-KSB
    for the year ended December 31, 1995 and incorporated
    herein by reference).10
.6*

Form of Stock Option Agreement pursuant to the Companys
    1995 Stock Option Plan (filed as Exhibit 4.2 to the
    Companys Registration Statement on
    Form S-8
    with respect to the shares underlying such plan that was filed
    on November 12, 2004 and incorporated herein by reference).10
.7*

The Outdoor Channel, Inc. 1997 Stock Option Plan (filed as
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-8
    with respect to the shares underlying the options assumed by the
    Company under such plan that was filed on November 12, 2004
    and incorporated herein by reference).10
.8*

Form of Stock Option Agreement pursuant to The Outdoor Channel,
    Inc. 1997 Stock Option Plan (filed as Exhibit 4.2 to the
    Companys Registration Statement on
    Form S-8
    with respect to the shares underlying the options assumed by the
    Company under such plan that was filed on November 12, 2004
    and incorporated herein by reference).10
.9*

Non-Statutory Stock Option Plan and Agreement, dated as of
    November 13, 2003, by and between the Company and William
    A. Owen, as amended (filed as Exhibit 4.1 to the
    Companys Registration Statement on
    Form S-8
    with respect to the shares underlying such plan that was filed
    on November 12, 2004 and incorporated herein by reference).10
.10*

Non-Employee Directors Stock Option Plan, as amended (filed as
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-8
    with respect to the shares underlying such plan that was filed
    on November 12, 2004 and incorporated herein by reference). 78




---



##### Table of Contents



ExhibitNumber

Description10
.11*

Form of Stock Option Agreement pursuant to Non-Employee
    Directors Stock Option Plan (filed as Exhibit 10.13 to the
    Companys
    Form 10-KSB
    for the year ended December 31, 2003 and incorporated
    herein by reference).10
.12*

2004 Long-Term Incentive Plan (filed as Exhibit 4.1 to the
    Companys Registration Statement on
    Form S-8
    with respect to the shares underlying such plan that was filed
    on November 12, 2004 and incorporated herein by reference).10
.13*

Form of Stock Option Award Agreement pursuant to 2004 Long-Term
    Incentive Plan (filed as Exhibit 99.1 to the Companys
    Form 8-K
    dated December 20, 2004 and incorporated herein by
    reference).10
.14*

Form of Restricted Shares Award Agreement pursuant to 2004
    Long-Term Incentive Plan (filed as Exhibit 99.2 to the
    Companys
    Form 8-K
    dated December 20, 2004 and incorporated herein by
    reference).10
.15

Omitted.10
.16*

Outdoor Channel Holdings, Inc. Executive Annual Cash Bonus Plan
    effective April 21, 2005 (filed as Exhibit 10.2 to the
    Companys
    Form 10-Q/A
    for the quarter ended March 31, 2005 and incorporated
    herein by reference).10
.17*

Selling Stockholders Registration Rights Agreement, dated as of
    June 27, 2005, among Outdoor Channel Holdings, Inc. and the
    selling stockholders who are a party (filed as Exhibit 10.1
    to the Companys current report on
    Form 8-K
    filed on June 28, 2005 and incorporated herein by
    reference).10
.18

Amendment to Loan Agreement and Note and related agreements by
    and between the Company and U.S. Bank N.A. dated
    October 18, 2005 (filed as Exhibit 10.18 to the
    Companys Annual Report on
    Form 10-K
    filed on March 16, 2006 and incorporated herein by
    reference).10
.19

Term Loan Agreement and related agreements by and between 43455
    BPD, LLC and U.S. Bank N.A. dated as of October 18, 2005
    (filed as Exhibit 10.19 to the Companys Annual Report
    on
    Form 10-K
    filed on March 16, 2006 and incorporated herein by
    reference).10
.20

Term Loan Agreement and related agreements by and between the
    Company and U.S. Bank N.A. dated as of October 18, 2005
    (filed as Exhibit 10.20 to the Companys Annual Report
    on
    Form 10-K
    filed on March 16, 2006 and incorporated herein by
    reference).10
.21*

Optionholders Registration Rights Agreement by and among the
    Company, Ray V. Miller and Elizabeth J. Sanderson dated as of
    December 5, 2005 (filed as Exhibit 10.1 to the
    Companys current report on
    Form 8-K
    filed on December 6, 2005 and incorporated herein by
    reference).10
.22*

Lease by and between the Company and Musk Ox Properties, L.P.
    dated as of January 1, 2006 (filed as Exhibit 10.22 to
    the Companys Annual Report on
    Form 10-K
    filed on March 16, 2006 and incorporated herein by
    reference).10
.23*

Employment Agreement with Roger L. Werner, Jr., effective as of
    October 16, 2006 (filed as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    filed on October 20, 2006 and incorporated herein by
    reference).10
.24*

Form of Performance Unit Agreement (filed as Exhibit 10.2
    to the Companys Current Report on
    Form 8-K
    filed on October 20, 2006 and incorporated herein by
    reference).10
.25*

Amendment of Employment Agreement with Roger L. Werner, Jr.,
    effective as of November 9, 2006 (filed as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    filed on November 9, 2006 and incorporated herein by
    reference).10
.26

Separation Agreement and Release between The Outdoor Channel,
    Inc. and Mr. Andrew J. Dale dated December 21, 2006
    (filed as Exhibit 10.1 to the Companys Current Report
    on
    Form 8-K
    filed on December 28, 2006 and incorporated herein by
    reference).10
.27

Consulting Agreement between The Outdoor Channel, Inc. and
    Mr. Andrew J. Dale dated January 2, 2007 (filed as
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K
    filed on December 28, 2006 and incorporated herein by
    reference).10
.28*

Form of Change of Control Severance Agreement (filed as Exhibit
    10.28 to the Companys Form 10-K dated March 17, 2008
    and incorporated herein by reference). 79




---



##### Table of Contents



ExhibitNumber

Description10
.29

Amendment to Loan Agreement and Note and related agreements by
    and between the Company and U.S. Bank N.A. dated as of
    September 21, 2007 (filed as Exhibit 10.29 to the
    Companys
    Form 10-Q
    dated February 1, 2008 and incorporated herein by
    reference).10
.30

Purchase Agreement by and between The Gold Business, LLC,
    Outdoor Channel Holdings, Inc. and Gold Prospectors
    Association of America, Inc. dated April 24, 2007 (filed as
    Exhibit 10.1 to the Companys
    Form 10-Q
    dated May 10, 2007 and incorporated herein by reference).10
.31

First Amendment to Lease dated April 24, 2007, by and
    between Musk Ox Properties, L.P. and Outdoor Channel Holdings,
    Inc. (filed as Exhibit 10.2 to the Companys
    Form 10-Q
    dated May 10, 2007 and incorporated herein by reference).10
.32

Separation Agreement and Release between Outdoor Channel
    Holdings, Inc. and Mr. William A. Owen dated
    December 14, 2007 (filed as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    filed on December 17, 2007 and incorporated herein by
    reference).10
.33

Consulting Agreement between Outdoor Channel Holdings, Inc. and
    Mr. William A. Owen dated as of December 15, 2007
    (filed as Exhibit 10.2 to the Companys Current Report
    on
    Form 8-K
    filed on December 17, 2007 and incorporated herein by
    reference).10
.34

Form of Stock Repurchase Plan and Agreement (filed as
    Exhibit 10.34 to the Companys
    Form 10-K
    dated March 9, 2009 and incorporated herein by reference).10
.35

Asset Purchase Agreement by and among Cablecam LLC, Skycam LLC,
    Winnercomm Holdings, Inc and Winnercomm, Inc., and Outdoor
    Channel Holdings, Inc., dated January 12, 2009 (filed as
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    filed on January 16, 2009 and incorporated herein by
    reference).10
.36*

Amended and Restated Employment Agreement with Roger L. Werner,
    Jr. dated April 14, 2009 (filed as Exhibit 99.1 to the
    Companys Current Report on
    Form 8-K
    filed on April 20, 2009 and incorporated herein by
    reference).10
.37*

Employment Agreement with Thomas E. Hornish dated April 14,
    2009 (filed as Exhibit 99.2 to the Companys Current
    Report on
    Form 8-K
    filed on April 20, 2009 and incorporated herein by
    reference).10
.38*

Employment Agreement with Shad L. Burke dated April 14,
    2009 (filed as Exhibit 99.3 to the Companys Current
    Report on
    Form 8-K
    filed on April 20, 2009 and incorporated herein by
    reference).10
.39*

Employment Agreement with James E. Wilburn dated May 6,
    2009 (filed as Exhibit 99.1 to the Companys Current
    Report on
    Form 8-K
    filed on May 8, 2009 and incorporated herein by reference).10
.40

Amendment to Loan Agreement and Note dated September 14,
    2009 by and between U.S. Bank N.A. and Outdoor Channel Holdings,
    Inc. (filed as Exhibit 10.1 to the Companys Current
    Report on
    Form 8-K
    filed on September 24, 2009 and incorporated herein by
    reference).21
.1

Subsidiaries of Registrant23
.1

Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm24
.1

Power of Attorney (included on signature page)31
.1

Certification by Chief Executive Officer31
.2

Certification by Chief Financial Officer32
.1**

Section 1350 Certification by Chief Executive Officer32
.2**

Section 1350 Certification by Chief Financial Officer     *
    
    Designates a management contract or compensatory plan or
    arrangement.**
    
    Pursuant to Commission Release
    No. 33-8238,
    this certification will be treated as accompanying
    this Annual Report on
    Form 10-K
    and not filed as part of such report for purposes of
    Section 18 of the Securities Exchange Act of 1934, as
    amended, or otherwise subject to the liability of
    Section 18 of the Securities Exchange Act of 1934, as
    amended, and this certification will not be deemed to be
    incorporated by reference into any filing under the Securities
    Act of 1933, as amended, or the Securities Exchange Act of 1934,
    as amended, except to the extent that the registrant
    specifically incorporates it by reference. 80




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##### Table of Contents



SIGNATURES    OUTDOOR CHANNEL HOLDINGS, INC.
  By:
    /s/  Roger
    L. Werner, Jr.  Roger L. Werner, Jr.,
      POWER OF
    ATTORNEY
  Form 10-K,
    Signature

Title

Date/s/  Perry
    T. MassiePerry
    T. Massie

Chairman of the Board, Director

March 16, 2010/s/  Roger
    L. Werner. Jr.Roger
    L. Werner. Jr.

Chief Executive Officer and President (Principal Executive
    Officer), Director

March 16, 2010/s/  Shad
    L. BurkeShad
    L. Burke

Chief Financial Officer (Principal Financial and Accounting
    Officer)

March 16, 2010/s/  Thomas
    H. MassieThomas
    H. Massie

Vice Chairman of the Board, Director

March 16, 2010/s/  Ajit
    M. DalviAjit
    M. Dalvi

Director

March 16, 2010/s/  David
    D. KinleyDavid
    D. Kinley

Director

March 16, 2010/s/  David
    C. MerrittDavid
    C. Merritt

Director

March 16, 2010/s/  Michael
    L. PandzikMichael
    L. Pandzik

Director

March 16, 2010/s/  T.
    Bahnson StanleyT.
    Bahnson Stanley

Director

March 16, 2010  81