UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2010
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from            to
 Commission file number: 000-17287
 Outdoor Channel Holdings, Inc.
  Delaware
(State or other Jurisdiction 
of incorporation or organization)
    
    33-0074499
(IRS Employer Identification Number)
 43445 Business Park Drive, Suite 103
Temecula, California 92590
 (951) 699-6991
  þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ
  Class
    
    Number of Shares Outstanding at May 3, 2010Common Stock, $0.001 par value
    
    25,327,906




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##### 



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Quarterly Report on Form 10-Q
For the Period Ended March 31, 2010
 Table of Contents
 Part I. Financial InformationItem 1.
    
    Financial Statements
    
    
    3Condensed Consolidated Balance Sheets as of March 31, 2010 (Unaudited) and December 31, 2009
    
    
    3Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March
31, 2010 and 2009
    
    
    4Unaudited Condensed Consolidated Statement of Stockholders Equity for the Three Months
Ended March 31, 2010
    
    
    5Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March
31, 2010 and 2009
    
    
    6Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4.
    
    Controls and Procedures
    
    
    27Part II. Other Information
    
    
    28Item 1.
    
    Legal Proceedings
    
    
    28Item 1A.
    
    Risk Factors
    
    
    28Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    38Item 3.
    
    Defaults Upon Senior Securities
    
    
    38Item 4.
    
    (Removed and Reserved)
    
    
    38Item 5.
    
    Other Information
    
    
    38Item 6.
    
    Exhibits
    
    
    39Signatures
    
    
    
    
    39
   2




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##### 



PART IFINANCIAL INFORMATION
 
 ITEM 1.
    
    Financial Statements.
 OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets
  March 31,
    
    
    December 31,2010
    
    
    2009(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    12,181
    
    
    $
    20,848Investments in available-for-sale securities
    
    
    42,993
    
    
    
    38,090Accounts receivable, net of allowance for doubtful accounts of $1,009 and $620
    
    
    11,135
    
    
    
    15,827Deferred tax assets, net
    
    
    2,439
    
    
    
    2,434Prepaid programming and production costs
    
    
    5,893
    
    
    
    6,111Other current assets
    
    
    2,172
    
    
    
    1,871Total current assets
    
    
    76,813
    
    
    
    85,181Property, plant and equipment, net
    
    
    13,913
    
    
    
    14,286Amortizable intangible assets, net
    
    
    730
    
    
    
    828Goodwill
    
    
    43,160
    
    
    
    43,160Investments in auction-rate securities
    
    
    5,696
    
    
    
    5,775Deferred tax assets, net
    
    
    3,836
    
    
    
    2,489Subscriber acquisition fees
    
    
    3,967
    
    
    
    4,371Deposits and other assets
    
    
    653
    
    
    
    688Totals
    
    $
    148,768
    
    
    $
    156,778Liabilities and Stockholders EquityCurrent liabilities:Accounts payable and accrued expenses
    
    $
    8,684
    
    
    $
    14,824Accrued severance payments
    
    
    54
    
    
    
    255Deferred revenue
    
    
    1,443
    
    
    
    1,469Current portion of deferred obligations
    
    
    171
    
    
    
    165Current portion of unfavorable lease
    
    
    139
    
    
    
    136Income taxes payable
    
    
    
    
    
    
    459Total current liabilities
    
    
    10,491
    
    
    
    17,308Deferred obligations
    
    
    168
    
    
    
    178Unfavorable lease obligation
    
    
    958
    
    
    
    994Total liabilities
    
    
    11,617
    
    
    
    18,480Commitments 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; 25,327 and
25,444 shares issued and outstanding
    
    
    25
    
    
    
    25Additional paid-in capital
    
    
    165,730
    
    
    
    165,374Accumulated other comprehensive loss
    
    
    (434
    )
    
    
    (444
    )Accumulated deficit
    
    
    (28,170
    )
    
    
    (26,657
    )Total stockholders equity
    
    
    137,151
    
    
    
    138,298Totals
    
    $
    148,768
    
    
    $
    156,778
  3




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##### 



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
 
 Unaudited Condensed Consolidated Statements of Operations
  Three Months EndedMarch 31,2010
    
    
    2009Revenues:Advertising
    
    $
    7,292
    
    
    $
    7,794Subscriber fees
    
    
    4,831
    
    
    
    4,663Production services
    
    
    5,698
    
    
    
    4,519Total revenues
    
    
    17,821
    
    
    
    16,976Cost of services:Programming
    
    
    1,304
    
    
    
    1,672Satellite transmission fees
    
    
    391
    
    
    
    395Production and operations
    
    
    7,099
    
    
    
    6,593Other direct costs
    
    
    112
    
    
    
    97Total cost of services
    
    
    8,906
    
    
    
    8,757Other expenses:Advertising
    
    
    286
    
    
    
    459Selling, general and administrative
    
    
    10,397
    
    
    
    9,207Depreciation and amortization
    
    
    911
    
    
    
    888Total other expenses
    
    
    11,594
    
    
    
    10,554Loss from operations
    
    
    (2,679
    )
    
    
    (2,335
    )Interest and other income, net
    
    
    12
    
    
    
    24Loss from operations before income taxes
    
    
    (2,667
    )
    
    
    (2,311
    )Income tax benefit
    
    
    (1,154
    )
    
    
    (997
    )Net loss
    
    $
    (1,513
    )
    
    $
    (1,314
    )Loss per common share data:Basic
    
    $
    (0.06
    )
    
    $
    (0.05
    )Diluted
    
    $
    (0.06
    )
    
    $
    (0.05
    )Weighted average common shares outstanding:Basic
    
    
    24,395
    
    
    
    24,417Diluted
    
    
    24,395
    
    
    
    24,417
  4




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##### 



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
 
 Unaudited Condensed Consolidated Statement of Stockholders Equity
 For the Three Months Ended March 31, 2010
  Additional
    
    
    Accumulated OtherCommon Stock
    
    
    Paid-in
    
    
    Comprehensive
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Capital
    
    
    Income (Loss)
    
    
    Deficit
    
    
    TotalBalance, December 31, 2009
    
    
    25,444
    
    
    $
    25
    
    
    $
    165,374
    
    
    $
    (444
    )
    
    $
    (26,657
    )
    
    $
    138,298Comprehensive income (loss):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,513
    )
    
    
    (1,513
    )Change in fair value of
auction-rate securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    10Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,503
    )Issuance of restricted stock
and performance shares to
employees for services to be
rendered, net of forfeited
shares
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Share-based employee and
service provider compensation
expense
    
    
    
    
    
    
    
    
    
    
    1,064
    
    
    
    
    
    
    
    
    
    
    
    1,064Purchase and retirement of
treasury stock related to
employee and service provider
share-based compensation
activity
    
    
    (62
    )
    
    
    
    
    
    
    (367
    )
    
    
    
    
    
    
    
    
    
    
    (367
    )Purchase and retirement of
treasury stock related to the
stock repurchase program
    
    
    (62
    )
    
    
    
    
    
    
    (341
    )
    
    
    
    
    
    
    
    
    
    
    (341
    )Balance, March 31, 2010
    
    
    25,327
    
    
    $
    25
    
    
    $
    165,730
    
    
    $
    (434
    )
    
    $
    (28,170
    )
    
    $
    137,151
  5




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##### 



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
 
 Unaudited Condensed Consolidated Statements of Cash Flows
  Three Months EndedMarch 31,2010
    
    
    2009Operating activities:Net loss
    
    $
    (1,513
    )
    
    $
    (1,314
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    911
    
    
    
    888Amortization of subscriber acquisition fees
    
    
    404
    
    
    
    122Gain on sale of equipment
    
    
    (34
    )
    
    
    Gain on sale of available-for-sale and auction-rate securities
    
    
    (11
    )
    
    
    Provision for doubtful accounts
    
    
    413
    
    
    
    76Share-based employee and service provider compensation
    
    
    1,064
    
    
    
    1,014Deferred tax benefit, net
    
    
    (1,158
    )
    
    
    (1,027
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    4,279
    
    
    
    2,747Income tax payable
    
    
    (653
    )
    
    
    (252
    )Prepaid programming costs
    
    
    218
    
    
    
    (767
    )Other current assets
    
    
    (301
    )
    
    
    587Deposits and other assets
    
    
    24
    
    
    
    (291
    )Subscriber acquisition fees
    
    
    (1,389
    )
    
    
    (763
    )Accounts payable and accrued expenses
    
    
    (4,815
    )
    
    
    (4,065
    )Deferred revenue
    
    
    (26
    )
    
    
    1,127Accrued severance payments
    
    
    (201
    )
    
    
    (8
    )Deferred obligations
    
    
    (4
    )
    
    
    138Unfavorable lease obligations
    
    
    (33
    )
    
    
    (27
    )Net cash used in operating activities
    
    
    (2,825
    )
    
    
    (1,815
    )Investing activities:Purchases of property, plant and equipment
    
    
    (409
    )
    
    
    (603
    )Proceeds from sale of equipment
    
    
    68
    
    
    
    Cash paid to purchase assets of Winnercomm, net of cash acquired
    
    
    
    
    
    
    (5,746
    )Purchases of available-for-sale securities
    
    
    (31,993
    )
    
    
    (9,994
    )Proceeds from sale of available-for-sale and auction-rate securities
    
    
    27,200
    
    
    
    Net cash used in investing activities
    
    
    (5,134
    )
    
    
    (16,343
    )Financing activities:Purchase of treasury stock
    
    
    (367
    )
    
    
    (179
    )Purchase and retirement of stock related to stock repurchase program
    
    
    (341
    )
    
    
    (306
    )Net cash used in financing activities
    
    
    (708
    )
    
    
    (485
    )Net decrease in cash and cash equivalents
    
    
    (8,667
    )
    
    
    (18,643
    )Cash and cash equivalents, beginning of period
    
    
    20,848
    
    
    
    60,257Cash and cash equivalents, end of period
    
    $
    12,181
    
    
    $
    41,614Supplemental disclosure of cash flow information:Income taxes paid
    
    $
    653
    
    
    $
    282Supplemental disclosures of non-cash investing and financing activities:Effect of net increase in fair value of auction-rate securities
    
    $
    10
    
    
    $
    15Property, plant and equipment costs incurred but not paid
    
    $
    54
    
    
    $
    239Subscriber acquisition fees incurred but not paid
    
    $
    
    
    
    $
    750Retirement of treasury stock
    
    $
    (367
    )
    
    $
    (179
    )
  6




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##### 



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
 
 Notes to Unaudited Condensed Consolidated Financial Statements
  NOTE 1ORGANIZATION AND BUSINESS
 Description of Operations
      NOTE 2ACQUISITION
  Intangible Assets
  7




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##### 



WeightedPreliminary
    
    
    AverageFair Value
    
    
    Useful LifeCustomer relationships
    
    $
    980
    
    
    3.5 yearsPatents
    
    
    80
    
    
    5 yearsProgramming library
    
    
    50
    
    
    1 yearTotal intangible assets
    
    $
    1,110
 Unaudited Pro Forma Financial Information
    Three Months EndedMarch 31, 2009Total revenues
    
    $
    17,924Net loss
    
    $
    (1,980
    )Basic loss per share
    
    $
    (0.08
    )Diluted loss per share
    
    $
    (0.08
    )
 NOTE 3STOCK INCENTIVE PLANS
    2004 Long-Term Incentive Plan (LTIP Plan).
 8




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##### 



Non-Employee Director Stock Option Plan (NEDSOP).
   Three Months EndedMarch 31,2010
    
    
    2009Nature of Award:Restricted stock
    
    $
    1,041
    
    
    $
    863Options
    
    
    23
    
    
    
    151Total share-based compensation expense
    
    $
    1,064
    
    
    $
    1,014
 Three Months EndedMarch 31,2010
    
    
    2009Classification of Compensation Expense:Cost of services:Production and operations
    
    $
    73
    
    
    $
    105Other expenses:Selling, general and administrative
    
    
    991
    
    
    
    909Total share-based compensation expense
    
    $
    1,064
    
    
    $
    1,014
 9




---



##### 



Stock Options
  WeightedAverage
    
    
    Weighted Average RemainingExercise
    
    
    ContractualOptions
    
    Shares
    
    
    Price
    
    
    Term (Yrs.)
    
    
    Aggregate Intrinsic Value(in thousands)
    
    
    
    
    
    
    
    
    
    
    (in thousands)Outstanding at beginning of period
    
    
    650
    
    
    $
    12.58Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Expired
    
    
    (5
    )
    
    
    14.95Outstanding at end of period
    
    
    645
    
    
    $
    12.56
    
    
    
    2.30
    
    
    $
    Vested or expected to vest at end of period
    
    
    645
    
    
    $
    12.56
    
    
    
    2.30
    
    
    $
    Exercisable at end of period
    
    
    636
    
    
    $
    12.57
    
    
    
    2.32
    
    
    $
    
 10




---



##### 



Options Outstanding
    
    
    Options ExercisableWeightedAverage
    
    
    Weighted
    
    
    
    
    
    
    WeightedRemaining
    
    
    Average
    
    
    
    
    
    
    AverageNumber
    
    
    Contractual
    
    
    Exercise
    
    
    Number
    
    
    ExerciseRange of Exercise Prices
    
    Outstanding
    
    
    Term (Yrs.)
    
    
    Price
    
    
    Exercisable
    
    
    Price(in thousands)
    
    
    
    
    
    
    
    
    
    
    (in thousands)$10.19  $10.19
    
    
    10
    
    
    
    1.01
    
    
    $
    10.19
    
    
    
    7
    
    
    $
    10.19$12.10  $12.10
    
    
    300
    
    
    
    1.55
    
    
    
    12.10
    
    
    
    300
    
    
    
    12.10$12.50  $12.50
    
    
    125
    
    
    
    3.72
    
    
    
    12.50
    
    
    
    125
    
    
    
    12.50$12.58  $12.58
    
    
    25
    
    
    
    1.18
    
    
    
    12.58
    
    
    
    19
    
    
    
    12.58$12.80  $12.80
    
    
    125
    
    
    
    3.80
    
    
    
    12.80
    
    
    
    125
    
    
    
    12.80$14.86  $14.95
    
    
    60
    
    
    
    0.70
    
    
    
    14.88
    
    
    
    60
    
    
    
    14.88Total
    
    
    645
    
    
    
    2.30
    
    
    $
    12.56
    
    
    
    636
    
    
    $
    12.57
  Restricted Stock
  As of March 31, 2010WeightedAverageGrant-DateShares
    
    
    Fair Value(in thousands)Nonvested at beginning of period
    
    
    1,049
    
    
    $
    7.46Granted
    
    
    114
    
    
    
    5.37Vested
    
    
    (186
    )
    
    
    6.88Forfeited
    
    
    (107
    )
    
    
    7.28Nonvested at end of period
    
    
    870
    
    
    $
    7.33
   Expense to be Recognized
  March 31, 2010Weighted AverageExpense Yet to be
    
    
    Remaining RequisiteRecognized
    
    
    Service PeriodsStock options
    
    $
    5
    
    
    0.1 yearsRestricted stock
    
    
    5,040
    
    
    2.2 yearsTotal
    
    $
    5,045
    
    
    2.2 years
 11




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##### 



NOTE 4EARNINGS (LOSS) PER COMMON SHARE
   2010
    
    
    2009Weighted average shares used to
calculate basic earnings (loss)
per share
    
    
    24,395
    
    
    
    24,417Dilutive effect of potentially
issuable common shares upon
exercise of dilutive stock options
and performance units
    
    
    
    
    
    
    Weighted average shares used to
calculate diluted earnings (loss)
per share
    
    
    24,395
    
    
    
    24,417
  NOTE 5INVESTMENTS IN AVAILABLE-FOR-SALE SECURITIES
  Level 1
    
    Inputs are unadjusted, quoted prices in active markets for identical assets or
liabilities at the measurement date;Level 2
    
    Inputs other than Level 1 inputs that are either directly or indirectly observable; andLevel 3
    
    Unobservable inputs developed using estimates and assumptions developed by management,
which reflect those that a market participant would use.
  Quoted Prices inActive Markets for
    
    
    Significant  Other
    
    
    SignificantIdentical Assets
    
    
    Observable Inputs
    
    
    Unobservable InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Cash and cash equivalents (1)
    
    $
    12,181
    
    
    $
    12,181
    
    
    $
    
    
    
    $
    Investments in available-for-sale securities (2)
    
    
    42,993
    
    
    
    42,993
    
    
    
    
    
    
    
    Non-current investments in auction-rate securities (3)
    
    
    5,696
    
    
    
    
    
    
    
    
    
    
    
    5,696Total
    
    $
    60,870
    
    
    $
    55,174
    
    
    $
    
    
    
    $
    5,696
 
 (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.(3)
    
    Investments in auction-rate securities consist of one
auction-rate municipal security and two closed end
perpetual preferred auction-rate securities (PPS). PPS
are using a discounted cash flow analysis to more
accurately measure possible liquidity discounts.  12




---



##### 



Three Months EndedMarch 31, 2010Auction-Rate Securities:Balance at beginning of period
    
    $
    5,775Redeemed
    
    
    (100
    )Realized gain on redemption
    
    
    11Unrealized gain included in accumulated
other comprehensive loss
    
    
    10Balance as of March 31, 2010
    
    $
    5,696
  Three Months EndedMarch 31,2010
    
    
    2009Interest income
    
    $
    25
    
    
    $
    48Interest expense
    
    
    (24
    )
    
    
    (24
    )Gain on redemption of auction-rate
securities
    
    
    11
    
    
    
    Total interest and other income, net
    
    $
    12
    
    
    $
    24
 13




---



##### 



NOTE 6COMPREHENSIVE LOSS
  Three Months EndedMarch 31,2010
    
    
    2009Net loss, as reported
    
    $
    (1,513
    )
    
    $
    (1,314
    )Unrealized gain on available-for-sale securities
    
    
    10
    
    
    
    15Comprehensive loss
    
    $
    (1,503
    )
    
    $
    (1,299
    )
 NOTE 7GOODWILL AND INTANGIBLE ASSETS
     March 31, 2010AccumulatedGross
    
    
    Amortization
    
    
    NetTrademark
    
    $
    219
    
    
    $
    192
    
    
    $
    27Internet domain names
    
    
    97
    
    
    
    61
    
    
    
    36Customer relationships
    
    
    980
    
    
    
    373
    
    
    
    607Patents
    
    
    80
    
    
    
    20
    
    
    
    60Programming library
    
    
    50
    
    
    
    50
    
    
    
    Total intangible assets
    
    $
    1,426
    
    
    $
    696
    
    
    $
    730
  14




---



##### 



Years Ending December 31,
    
    Amount2010 (remaining 9 months)
    
    $
    2172011
    
    
    1792012
    
    
    1672013
    
    
    1622014 and thereafter
    
    
    5Total
    
    $
    730
 NOTE 8LINES OF CREDIT
  NOTE 9INCOME TAX BENEFIT
   NOTE 10RELATED PARTY TRANSACTIONS
   NOTE 11COMMITMENTS AND CONTINGENCIES
   15




---



##### 



Operating Leases
       NOTE 12SEGMENT INFORMATION
  16




---



##### 



As of and for the Three Months Ended:
 Income (Loss)
    
    
    
    
    
    
    DepreciationBefore Income
    
    
    Total
    
    
    andRevenues
    
    
    Taxes
    
    
    Assets
    
    
    AmortizationMarch 31, 2010TOC
    
    $
    12,123
    
    
    $
    (365      )
    *
    
    $
    84,905
    
    
    $
    405Production Services
    
    
    5,698
    
    
    
    (2,302
    )
    
    
    6,830
    
    
    
    506Subtotals of Segments
    
    
    17,821
    
    
    
    (2,667
    )
    
    
    91,735
    
    
    
    911Corporate*
    
    
    
    
    
    
    
    
    
    
    57,033
    
    
    
    Totals
    
    $
    17,821
    
    
    $
    (2,667
    )
    
    $
    148,768
    
    
    $
    911March 31, 2009TOC
    
    $
    12,457
    
    
    $
    90
    *
    
    $
    82,467
    
    
    $
    500Production Services
    
    
    4,519
    
    
    
    (2,401
    )
    
    
    10,771
    
    
    
    388Subtotals of Segments
    
    
    16,976
    
    
    
    (2,311
    )
    
    
    93,238
    
    
    
    888Corporate*
    
    
    
    
    
    
    
    
    
    
    55,321
    
    
    
    Totals
    
    $
    16,976
    
    
    $
    (2,311
    )
    
    $
    148,559
    
    
    $
    888
 
 *
    
    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 TOC or Production Services. Corporate assets consist primarily
of cash not held in our operating accounts and available-for-sale securities. NOTE 13RECENT ACCOUNTING PRONOUNCEMENTS
  NOTE 14SUBSEQUENT EVENT
   17




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##### 



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
 Safe Harbor Statement
   General
    Critical Accounting Policies and Estimates
   Subscriber Acquisition Fees
  18




---



##### 



Prepaid Programming Costs
  Revenue Recognition
      19




---



##### 



Valuation of Goodwill
      Income Taxes
    20




---



##### 



Stock Incentive Plans
   21




---



##### 



Comparison of Operating Results for the Three Months Ended March 31, 2010 and March 31, 2009
  Change
    
    
    % of Total Revenue2010
    
    
    2009
    
    
    $
    
    
    %
    
    
    2010
    
    
    2009Revenues:Advertising
    
    $
    7,292
    
    
    $
    7,794
    
    
    $
    (502
    )
    
    
    (6.4
    )%
    
    
    40.9
    %
    
    
    45.9
    %Subscriber fees
    
    
    4,831
    
    
    
    4,663
    
    
    
    168
    
    
    
    3.6
    
    
    
    27.1
    
    
    
    27.5Production services
    
    
    5,698
    
    
    
    4,519
    
    
    
    1,179
    
    
    
    26.1
    
    
    
    32.0
    
    
    
    26.6Total revenues
    
    
    17,821
    
    
    
    16,976
    
    
    
    845
    
    
    
    5.0
    
    
    
    100.0
    
    
    
    100.0Cost of services:Programming
    
    
    1,304
    
    
    
    1,672
    
    
    
    (368
    )
    
    
    (22.0
    )
    
    
    7.3
    
    
    
    9.8Satellite transmission fees
    
    
    391
    
    
    
    395
    
    
    
    (4
    )
    
    
    (1.0
    )
    
    
    2.2
    
    
    
    2.3Production and operations
    
    
    7,099
    
    
    
    6,593
    
    
    
    506
    
    
    
    7.7
    
    
    
    39.8
    
    
    
    38.8Other direct costs
    
    
    112
    
    
    
    97
    
    
    
    15
    
    
    
    15.5
    
    
    
    0.6
    
    
    
    0.6Total cost of services
    
    
    8,906
    
    
    
    8,757
    
    
    
    149
    
    
    
    1.7
    
    
    
    50.0
    
    
    
    51.6Other expenses:Advertising
    
    
    286
    
    
    
    459
    
    
    
    (173
    )
    
    
    (37.7
    )
    
    
    1.6
    
    
    
    2.7Selling, general and
administrative
    
    
    10,397
    
    
    
    9,207
    
    
    
    1,190
    
    
    
    12.9
    
    
    
    58.3
    
    
    
    54.2Depreciation and amortization
    
    
    911
    
    
    
    888
    
    
    
    23
    
    
    
    2.6
    
    
    
    5.1
    
    
    
    5.2Total other expenses
    
    
    11,594
    
    
    
    10,554
    
    
    
    1,040
    
    
    
    9.9
    
    
    
    65.1
    
    
    
    62.2Loss from operations
    
    
    (2,679
    )
    
    
    (2,335
    )
    
    
    (344
    )
    
    
    14.7
    
    
    
    (15.0
    )
    
    
    (13.8
    )Interest and other income, net
    
    
    12
    
    
    
    24
    
    
    
    (12
    )
    
    
    (50.0
    )
    
    
    0.1
    
    
    
    0.1Loss from operations before
income taxes
    
    
    (2,667
    )
    
    
    (2,311
    )
    
    
    (356
    )
    
    
    15.4
    
    
    
    (15.0
    )
    
    
    (13.6
    )Income tax benefit
    
    
    (1,154
    )
    
    
    (997
    )
    
    
    (157
    )
    
    
    15.7
    
    
    
    (6.5
    )
    
    
    (5.9
    )Net loss
    
    $
    (1,513
    )
    
    $
    (1,314
    )
    
    $
    (199
    )
    
    
    15.1
    %
    
    
    (8.5
    )%
    
    
    (7.7
    )%
      22




---



##### 



Revenues
        23




---



##### 



Cost of Services
       Other Expenses
    24




---



##### 



Loss from Operations
  Interest and Other Income, Net
  Loss from Operations Before Income Taxes
  Income Tax Benefit
  25




---



##### 



Net Loss
  Liquidity and Capital Resources
       26




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##### 



ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
    
 ITEM 4.
    
    CONTROLS AND PROCEDURES.
 Evaluation of disclosure controls and procedures.
  Changes in internal control over financial reporting.
 27




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##### 



PART IIOTHER INFORMATION
 
 ITEM 1.
    
    Legal Proceedings.
    
 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.
  28




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##### 



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.
  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 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.
  29




---



##### 



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.
  We could have an aerial camera fall, harming our reputation and possibly causing damage exceeding
our liability insurance limits.
  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.
  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.
  30




---



##### 



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.
    Our investments in auction-rate securities are subject to risks which may affect the liquidity of
these investments and could cause additional impairment charges.
  We may not be able to secure sufficient or additional advertising revenue, and as a result, our
profitability may be negatively impacted.
  31




---



##### 



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.
   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;
 32




---



##### 




    
    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.
  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.
  33




---



##### 



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.
    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.
  34




---



##### 



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.
  We may face intellectual property infringement claims that could be time-consuming, costly to
defend and result in our loss of significant rights.
  35




---



##### 



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.
  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;
    
    require a 66 2/3% 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 66 2/3% stockholder vote to amend our certificate of incorporation or bylaws.
  36




---



##### 



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.
  37




---



##### 



ITEM 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
   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 December
31, 2009
    
    
    225,713
    
    
    $
    5.79
    
    
    
    225,713
    
    
    $
    8,657,226January 1, 2010
through January
31, 2010
    
    
    62,418
    
    
    $
    5.43
    
    
    
    62,418
    
    
    $
    8,316,078February 1, 2010
through
February 28, 2010
    
    
    
    
    
    
    
    
    
    
    March 1, 2010
through March
31, 2010
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    288,131
    
    
    $
    5.61
    
    
    
    288,131
  
 ITEM 3.
    
    Defaults Upon Senior Securities.
  
 ITEM 4.
    
    (Removed and Reserved).
  
 ITEM 5.
    
    Other Information.
  38




---



##### 



ITEM 6.
    
    Exhibits.
 ExhibitNumber
    
    Description3.1
    
    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
and Exhibit 4.1 to the Companys Form 10-Q for the
period ended June 30, 2005)10.41
    
    Separation Agreement and Release between Outdoor
Channel Holdings, Inc. and Mr. Shad L. Burke dated
March 19, 2010 (filed as Exhibit 10.1 to the
Companys Current Report on Form 8-K filed on March
24, 2010 and incorporated herein by reference).10.42
    
    Consulting Agreement between Outdoor Channel
Holdings, Inc. and Mr. Shad L. Burke dated March 19,
2010 (filed as Exhibit 10.2 to the Companys Current
Report on Form 8-K filed on March 24, 2010 and
incorporated herein by reference).31.1
    
    Certification by Chief Executive Officer31.2
    
    Certification by Chief Accounting Officer32.1 *
    
    Section 1350 Certification by Chief Executive Officer32.2 *
    
    Section 1350 Certification by Chief Accounting Officer
 
 *
    
    Pursuant to Commission Release No. 33-8238, this certification will be treated as
accompanying this Quarterly Report on Form 10-Q 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. 
 SIGNATURES
  OUTDOOR CHANNEL HOLDINGS, INC./s/ Douglas J. LangstonDouglas J. LangstonAuthorized Officer and Chief Accounting Officer 
Date: May 6, 2010 39