##### Table of Contents



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, 2011
 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
    
    33-0074499(State or other Jurisdiction 
of incorporation or organization)
    
    (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
    
    Smaller Reporting Company o(Do not check if a smaller reporting company)
  o þ
  Class
    
    Number of Shares Outstanding at May 2, 2011Common Stock, $0.001 par value
    
    
    25,426,804




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##### 



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
Quarterly Report on Form 10-Q
For the Period Ended March 31, 2011
 Table of Contents
 Part I. Financial Information
    
    
    3Item 1.Financial Statements
    
    
    3Condensed Consolidated Balance Sheets as of March 31, 2011 (unaudited) and December 31, 2010
    
    
    3Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March
31, 2011 and 2010
    
    
    4Unaudited Condensed Consolidated Statement of Stockholders Equity for the Three Months
Ended March 31, 2011
    
    
    5Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March
31, 2011 and 2010
    
    
    6Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    7Item 2.Managements Discussion and Analysis of Results of Operations and Financial Condition
    
    
    16Item 3.Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4.Controls and Procedures
    
    
    23Part II. Other Information
    
    
    25Item 1.Legal Proceedings
    
    
    25Item 1A.Risk Factors
    
    
    25Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25Item 3.Defaults Upon Senior Securities
    
    
    25Item 4.Removed and Reserved
    
    
    25Item 5.Other Information
    
    
    25Item 6.Exhibits
    
    
    25Signatures
    
    
    26EX-31.1EX-31.2EX-32.1EX-32.2
   2




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##### Table of Contents



PART IFINANCIAL INFORMATION
 
 ITEM 1. Financial Statements.
 OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets
  March 31,
    
    
    December 31,2011
    
    
    2010(unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    31,073
    
    
    $
    32,578Investments in available-for-sale securities
    
    
    27,987
    
    
    
    26,995Accounts receivable, net of allowance for doubtful accounts of $1,411 and $1,394
    
    
    10,077
    
    
    
    16,754Income tax refund receivable
    
    
    181
    
    
    
    13Deferred tax assets, net
    
    
    2,944
    
    
    
    2,944Prepaid programming and production costs
    
    
    6,289
    
    
    
    5,228Other current assets
    
    
    2,318
    
    
    
    2,805Total current assets
    
    
    80,869
    
    
    
    87,317Property, plant and equipment, net
    
    
    11,962
    
    
    
    12,315Amortizable intangible assets, net
    
    
    536
    
    
    
    513Goodwill
    
    
    43,160
    
    
    
    43,160Investments in auction-rate securities
    
    
    5,086
    
    
    
    5,075Deferred tax assets, net
    
    
    2,165
    
    
    
    1,774Subscriber acquisition fees
    
    
    2,560
    
    
    
    2,963Deposits and other assets
    
    
    478
    
    
    
    535Totals
    
    $
    146,816
    
    
    $
    153,652Liabilities and Stockholders EquityCurrent liabilities:Accounts payable and accrued expenses
    
    $
    9,771
    
    
    $
    14,011Deferred revenue
    
    
    835
    
    
    
    516Current portion of deferred obligations
    
    
    89
    
    
    
    54Current portion of unfavorable lease
    
    
    152
    
    
    
    149Income taxes payable
    
    
    
    
    
    
    2,399Total current liabilities
    
    
    10,847
    
    
    
    17,129Deferred obligations
    
    
    125
    
    
    
    136Unfavorable lease
    
    
    805
    
    
    
    845Total liabilities
    
    
    11,777
    
    
    
    18,110Commitments 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; 25,434 and 25,354
shares issued and outstanding
    
    
    25
    
    
    
    25Additional paid-in capital
    
    
    167,753
    
    
    
    167,437Accumulated other comprehensive loss
    
    
    (341
    )
    
    
    (352
    )Accumulated deficit
    
    
    (32,398
    )
    
    
    (31,568
    )Total stockholders equity
    
    
    135,039
    
    
    
    135,542Totals
    
    $
    146,816
    
    
    $
    153,652
  3




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
 
 Unaudited Condensed Consolidated Statements of Operations
  Three Months EndedMarch 31,2011
    
    
    2010Revenues:Advertising
    
    $
    7,585
    
    
    $
    7,292Subscriber fees
    
    
    4,747
    
    
    
    4,831Production services
    
    
    2,480
    
    
    
    5,698Total revenues
    
    
    14,812
    
    
    
    17,821Cost of services:Programming
    
    
    1,630
    
    
    
    1,590Satellite transmission fees
    
    
    399
    
    
    
    391Production and operations
    
    
    4,553
    
    
    
    6,813Other direct costs
    
    
    92
    
    
    
    112Total cost of services
    
    
    6,674
    
    
    
    8,906Other expenses:Advertising
    
    
    305
    
    
    
    286Selling, general and administrative
    
    
    8,283
    
    
    
    10,397Depreciation and amortization
    
    
    746
    
    
    
    911Total other expenses
    
    
    9,334
    
    
    
    11,594Loss from operations
    
    
    (1,196
    )
    
    
    (2,679
    )Interest and other income, net
    
    
    9
    
    
    
    12Loss from operations before income taxes
    
    
    (1,187
    )
    
    
    (2,667
    )Income tax benefit
    
    
    (357
    )
    
    
    (1,154
    )Net loss
    
    $
    (830
    )
    
    $
    (1,513
    )Loss per common share data:Basic
    
    $
    (0.03
    )
    
    $
    (0.06
    )Diluted
    
    $
    (0.03
    )
    
    $
    (0.06
    )Weighted average common shares outstanding:Basic
    
    
    24,605
    
    
    
    24,395Diluted
    
    
    24,605
    
    
    
    24,395
  4




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
 
 Unaudited Condensed Consolidated Statement of Stockholders Equity
 For the Three Months Ended March 31, 2011
  Additional
    
    
    Accumulated OtherCommon Stock
    
    
    Paid-in
    
    
    Comprehensive
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Capital
    
    
    Income (Loss)
    
    
    Deficit
    
    
    TotalBalance, December 31, 2010
    
    
    25,354
    
    
    $
    25
    
    
    $
    167,437
    
    
    $
    (352
    )
    
    $
    (31,568
    )
    
    $
    135,542Comprehensive income (loss):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (830
    )
    
    
    (830
    )Change in fair value of
available-for-sale and
auction-rate securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    11Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (819
    )Issuance of restricted stock
to employees for services to
be rendered, net of forfeited
shares
    
    
    141
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Share-based employee and
service provider compensation
expense
    
    
    
    
    
    
    
    
    
    
    787
    
    
    
    
    
    
    
    
    
    
    
    787Purchase and retirement of
treasury stock related to
employee and service provider
share-based compensation
activity
    
    
    (61
    )
    
    
    
    
    
    
    (471
    )
    
    
    
    
    
    
    
    
    
    
    (471
    )Balance, March 31, 2011
    
    
    25,434
    
    
    $
    25
    
    
    $
    167,753
    
    
    $
    (341
    )
    
    $
    (32,398
    )
    
    $
    135,039
  5




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##### Table of Contents



OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES
 
 Unaudited Condensed Consolidated Statements of Cash Flows
  Three Months EndedMarch 31,2011
    
    
    2010Operating activities:Net loss
    
    $
    (830
    )
    
    $
    (1,513
    )Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:Depreciation and amortization
    
    
    746
    
    
    
    911Amortization of subscriber acquisition fees
    
    
    408
    
    
    
    404Loss (gain) on sale of equipment
    
    
    2
    
    
    
    (34
    )Gain on sale of available-for-sale and auction-rate securities
    
    
    
    
    
    
    (11
    )Provision for doubtful accounts
    
    
    79
    
    
    
    413Share-based employee and service provider compensation
    
    
    787
    
    
    
    1,064Deferred tax benefit, net
    
    
    (391
    )
    
    
    (1,158
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    6,598
    
    
    
    4,279Income tax refund receivable and payable, net
    
    
    (2,567
    )
    
    
    (653
    )Prepaid programming costs
    
    
    (1,060
    )
    
    
    218Other current assets
    
    
    487
    
    
    
    (301
    )Deposits and other assets
    
    
    47
    
    
    
    24Subscriber acquisition fees
    
    
    (191
    )
    
    
    (1,389
    )Accounts payable and accrued expenses
    
    
    (4,049
    )
    
    
    (5,016
    )Deferred revenue
    
    
    319
    
    
    
    (26
    )Deferred obligations
    
    
    23
    
    
    
    (4
    )Unfavorable lease obligations
    
    
    (37
    )
    
    
    (33
    )Net cash provided by (used in) operating activities
    
    
    371
    
    
    
    (2,825
    )Investing activities:Purchases of property, plant and equipment
    
    
    (338
    )
    
    
    (409
    )Purchase of intangibles
    
    
    (75
    )
    
    
    Proceeds from sale of equipment
    
    
    
    
    
    
    68Purchases of available-for-sale securities
    
    
    (27,992
    )
    
    
    (31,993
    )Proceeds from sale of available-for-sale and auction-rate securities
    
    
    27,000
    
    
    
    27,200Net cash used in investing activities
    
    
    (1,405
    )
    
    
    (5,134
    )Financing activities:Purchase of treasury stock
    
    
    (471
    )
    
    
    (367
    )Purchase and retirement of treasury stock related to stock repurchase program
    
    
    
    
    
    
    (341
    )Net cash used in financing activities
    
    
    (471
    )
    
    
    (708
    )Net decrease in cash and cash equivalents
    
    
    (1,505
    )
    
    
    (8,667
    )Cash and cash equivalents, beginning of period
    
    
    32,578
    
    
    
    20,848Cash and cash equivalents, end of period
    
    $
    31,073
    
    
    $
    12,181Supplemental disclosure of cash flow information:Income taxes paid
    
    $
    2,542
    
    
    $
    653Supplemental disclosures of non-cash investing and financing activities:Effect of net increase in fair value of available-for-sale and
auction-rate securities
    
    $
    11
    
    
    $
    10Property, plant and equipment costs incurred but not paid
    
    $
    5
    
    
    $
    54
  6




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##### Table of Contents



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




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2004 Long-Term Incentive Plan (LTIP Plan).
 Non-Employee Director Stock Option Plan (NEDSOP).
   Three Months EndedMarch 31,2011
    
    
    2010Nature of Award:Restricted stock
    
    $
    639
    
    
    $
    1,033RSUs
    
    
    148
    
    
    
    Options
    
    
    
    
    
    
    23Performance vesting
    
    
    
    
    
    
    8Total share-based compensation expense
    
    $
    787
    
    
    $
    1,064
 Three Months EndedMarch 31,2011
    
    
    2010Classification of Compensation Expense:Cost of services:Production and operations
    
    $
    57
    
    
    $
    73Other expenses:Selling, general and administrative
    
    
    730
    
    
    
    991Total share-based compensation expense
    
    $
    787
    
    
    $
    1,064
 8




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##### Table of Contents



Stock Options
  WeightedWeighted
    
    
    AverageAverage
    
    
    RemainingExercise
    
    
    Contractual
    
    
    AggregateOptions
    
    Shares
    
    
    Price
    
    
    Term (Yrs.)
    
    
    Intrinsic Value(in thousands)
    
    
    
    
    
    
    
    
    
    
    (in thousands)Outstanding at beginning of period
    
    
    635
    
    
    $
    12.52Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Expired
    
    
    (50
    )
    
    
    14.86Outstanding at end of period
    
    
    585
    
    
    $
    12.32
    
    
    
    1.47
    
    
    $
    Vested or expected to vest at end of period
    
    
    585
    
    
    $
    12.32
    
    
    
    1.47
    
    
    $
    Exercisable at end of period
    
    
    585
    
    
    $
    12.32
    
    
    
    1.47
    
    
    $
    
  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
    
    
    
    0.01
    
    
    $
    10.19
    
    
    
    10
    
    
    $
    10.19$12.10  $12.10
    
    
    300
    
    
    
    0.55
    
    
    
    12.10
    
    
    
    300
    
    
    
    12.10$12.50  $12.50
    
    
    125
    
    
    
    2.72
    
    
    
    12.50
    
    
    
    125
    
    
    
    12.50$12.58  $12.58
    
    
    25
    
    
    
    0.18
    
    
    
    12.58
    
    
    
    25
    
    
    
    12.58$12.80  $12.80
    
    
    125
    
    
    
    2.80
    
    
    
    12.80
    
    
    
    125
    
    
    
    12.80Total
    
    
    585
    
    
    
    1.47
    
    
    $
    12.32
    
    
    
    585
    
    
    $
    12.32
  Restricted Stock
  Three Months EndedMarch 31, 2011WeightedAverageGrant-DateShares
    
    
    Fair Value(in thousands)Nonvested at beginning of period
    
    
    713
    
    
    $
    6.65Granted
    
    
    143
    
    
    
    7.71Vested
    
    
    (169
    )
    
    
    6.34Forfeited
    
    
    (2
    )
    
    
    7.31Nonvested at end of period
    
    
    685
    
    
    $
    6.95
  9




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Restricted Stock Units
  Three Months EndedMarch 31, 2011WeightedNumber of
    
    
    AverageRestricted
    
    
    Grant-DateStock Units
    
    
    Fair Value(in thousands)RSUs outstanding at beginning of period
    
    
    101
    
    
    $
    5.97Granted
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Nonvested at end of period
    
    
    101
    
    
    $
    5.97
  Expense to be Recognized
  March 31, 2011Weighted AverageExpense Yet
    
    
    Remainingto be
    
    
    Requisite ServiceRecognized
    
    
    PeriodsRestricted stock
    
    $
    3,609
    
    
    1.8 yearsRSUs
    
    
    90
    
    
    0.1 yearTotal
    
    $
    3,699
    
    
    1.8 years
 NOTE 3EARNINGS (LOSS) PER COMMON SHARE
   2011
    
    
    2010Weighted average shares used to calculate basic earnings (loss) per share
    
    
    24,605
    
    
    
    24,395Dilutive effect of potentially issuable common shares upon exercise of
dilutive stock options, performance units, unvested restricted stock and
stock units
    
    
    
    
    
    
    Weighted average shares used to calculate diluted earnings (loss) per share
    
    
    24,605
    
    
    
    24,395
  10




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NOTE 4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
    
    
    Significantin Active
    
    
    Other
    
    
    SignificantMarkets for
    
    
    Observable
    
    
    UnobservableIdentical Assets
    
    
    Inputs
    
    
    InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Cash and cash equivalents (1)
    
    $
    31,073
    
    
    $
    31,073
    
    
    $
    
    
    
    $
    Investments in available-for-sale securities (2)
    
    
    27,987
    
    
    
    27,987
    
    
    
    
    
    
    
    Non-current investments in auction-rate securities (3)
    
    
    5,086
    
    
    
    
    
    
    
    
    
    
    
    5,086Total
    
    $
    64,146
    
    
    $
    59,060
    
    
    $
    
    
    
    $
    5,086
 
 (1)
    
    Cash and cash equivalents consist primarily of
treasury bills, commercial paper 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 and commercial paper 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 one closed-end
perpetual preferred auction-rate security (PPS). We use
a discounted cash flow analysis to more accurately measure
possible liquidity discounts.  11




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Three Months EndedMarch 31, 2011Auction-Rate Securities:Balance at beginning of period
    
    $
    5,075Unrealized gain included in accumulated other
comprehensive loss
    
    
    11Balance as of March 31, 2011
    
    $
    5,086
  Three Months EndedMarch 31,2011
    
    
    2010Interest income
    
    $
    31
    
    
    $
    25Interest expense
    
    
    (22
    )
    
    
    (24
    )Gain on redemption of auction-rate
securities
    
    
    
    
    
    
    11Total interest and other income, net
    
    $
    9
    
    
    $
    12
 NOTE 5COMPREHENSIVE INCOME (LOSS)
  Three Months EndedMarch 31,2011
    
    
    2010Net loss, as reported
    
    $
    (830
    )
    
    $
    (1,513
    )Unrealized gain on
available-for-sale and
auction-rate securities
    
    
    11
    
    
    
    10Comprehensive loss
    
    $
    (819
    )
    
    $
    (1,503
    )
 NOTE 6GOODWILL AND INTANGIBLE ASSETS
   12




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March 31, 2011AccumulatedGross
    
    
    Amortization
    
    
    NetTrademark
    
    $
    219
    
    
    $
    207
    
    
    $
    12Internet domain names
    
    
    172
    
    
    
    103
    
    
    
    69Customer relationships
    
    
    980
    
    
    
    569
    
    
    
    411Patents
    
    
    80
    
    
    
    36
    
    
    
    44Total amortizable intangible assets
    
    $
    1,451
    
    
    $
    915
    
    
    $
    536
   Years Ending December 31,
    
    Amount2011 (remaining 9 months)
    
    $
    1622012
    
    
    2042013
    
    
    1652014
    
    
    5Total
    
    $
    536
 NOTE 7LINES OF CREDIT
  NOTE 8ACCOUNTS PAYABLE AND ACCRUED EXPENSES
  March 31, 2011
    
    
    December 31, 2010Trade accounts payable
    
    $
    1,497
    
    
    $
    3,137Accrued payroll and related expenses
    
    
    2,164
    
    
    
    3,554Estimated make-good accrual
    
    
    1,465
    
    
    
    1,587Estimated most-favored nation accrual
    
    
    2,003
    
    
    
    1,750Accrued launch support commitment
    
    
    
    
    
    
    185Accrued expenses
    
    
    2,642
    
    
    
    3,798Total
    
    $
    9,771
    
    
    $
    14,011
 13




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##### Table of Contents



NOTE 9INCOME TAX BENEFIT
   NOTE 10RELATED PARTY TRANSACTIONS
     NOTE 11COMMITMENTS AND CONTINGENCIES
     NOTE 12SEGMENT INFORMATION
  14




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##### Table of Contents



Three Months EndedMarch 31,Revenues
    
    2011
    
    
    2010TOC
    
    $
    12,332
    
    
    $
    12,123Production Services
    
    
    3,064
    
    
    
    6,220Eliminations
    
    
    (584
    )
    
    
    (522
    )Total revenues
    
    $
    14,812
    
    
    $
    17,821
 Three Months EndedMarch 31,Income (Loss) from Operations
    
    2011
    
    
    2010TOC*
    
    $
    277
    
    
    $
    (401
    )Production Services*
    
    
    (1,389
    )
    
    
    (2,246
    )Eliminations
    
    
    (84
    )
    
    
    (32
    )Total loss from operations
    
    $
    (1,196
    )
    
    $
    (2,679
    )
 March 31,
    
    
    December 31,Total Assets
    
    2011
    
    
    2010TOC
    
    $
    83,832
    
    
    $
    87,783Production Services
    
    
    3,923
    
    
    
    6,833Corporate assets*
    
    
    59,379
    
    
    
    59,270Eliminations
    
    
    (318
    )
    
    
    (234
    )Total assets
    
    $
    146,816
    
    
    $
    153,652
 Three Months EndedMarch 31,Depreciation and Amortization
    
    2011
    
    
    2010TOC
    
    $
    390
    
    
    $
    405Production Services
    
    
    356
    
    
    
    506Total
    
    $
    746
    
    
    $
    911
 
 *
    
    Corporate overhead expenses consist primarily of executive, legal and
administrative functions not associated directly with either TOC or
Production Services. We allocate a portion of these expenses to our
Production Services segment, but the majority is captured in our TOC
segment. 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 EVENTS
   15




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
 Safe Harbor Statement
     
    
    Overview.The overview section provides a summary of our business.
    
    Consolidated Results of Operations. The consolidated results of operations section
provides an analysis of our results on a consolidated basis for the quarter ended March 31,
2011 compared to the quarter ended March 31, 2010.
    
    Segment Results of Operations. The segment results of operations section provides an
analysis of our results on a reportable operating segment basis for the quarter ended March
31, 2011 compared to the quarter ended March 31, 2010.
    
    Liquidity and Capital Resources. The liquidity and capital resources section provides a
discussion of our cash flows for the three months ended March 31, 2011 compared to the
three months ended March 31, 2010.
 OVERVIEW
  Outdoor Channel
  16




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##### Table of Contents



Production Services
    Critical Accounting Policies and Estimates
   17




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##### Table of Contents



CONSOLIDATED RESULTS OF OPERATIONS
  Comparison of Consolidated Operating Results for the Three Months Ended March 31, 2011 and March
31, 2010
  Change
    
    
    % of Total Revenue2011
    
    
    2010
    
    
    $
    
    
    %
    
    
    2011
    
    
    2010Revenues:Advertising
    
    $
    7,585
    
    
    $
    7,292
    
    
    $
    293
    
    
    
    4
    %
    
    
    51
    %
    
    
    41
    %Subscriber fees
    
    
    4,747
    
    
    
    4,831
    
    
    
    (84
    )
    
    
    (2
    )
    
    
    32
    
    
    
    27Production services
    
    
    2,480
    
    
    
    5,698
    
    
    
    (3,218
    )
    
    
    (57
    )
    
    
    17
    
    
    
    32Total revenues
    
    
    14,812
    
    
    
    17,821
    
    
    
    (3,009
    )
    
    
    (17
    )
    
    
    100
    
    
    
    100Cost of services:Programming
    
    
    1,630
    
    
    
    1,590
    
    
    
    40
    
    
    
    3
    
    
    
    11
    
    
    
    9Satellite transmission fees
    
    
    399
    
    
    
    391
    
    
    
    8
    
    
    
    2
    
    
    
    3
    
    
    
    2Production and operations
    
    
    4,553
    
    
    
    6,813
    
    
    
    (2,260
    )
    
    
    (33
    )
    
    
    31
    
    
    
    38Other direct costs
    
    
    92
    
    
    
    112
    
    
    
    (20
    )
    
    
    (18
    )
    
    
    1
    
    
    
    1Total cost of services
    
    
    6,674
    
    
    
    8,906
    
    
    
    (2,232
    )
    
    
    (25
    )
    
    
    45
    
    
    
    50Other expenses:Advertising
    
    
    305
    
    
    
    286
    
    
    
    19
    
    
    
    7
    
    
    
    2
    
    
    
    2Selling, general and administrative
    
    
    8,283
    
    
    
    10,397
    
    
    
    (2,114
    )
    
    
    (20
    )
    
    
    56
    
    
    
    58Depreciation and amortization
    
    
    746
    
    
    
    911
    
    
    
    (165
    )
    
    
    (18
    )
    
    
    5
    
    
    
    5Total other expenses
    
    
    9,334
    
    
    
    11,594
    
    
    
    (2,260
    )
    
    
    (20
    )
    
    
    63
    
    
    
    65Loss from operations
    
    
    (1,196
    )
    
    
    (2,679
    )
    
    
    1,483
    
    
    
    (55
    )
    
    
    (8
    )
    
    
    (15
    )Interest and other income, net
    
    
    9
    
    
    
    12
    
    
    
    (3
    )
    
    
    (25
    )
    
    
    
    
    
    
    Loss from operations before income taxes
    
    
    (1,187
    )
    
    
    (2,667
    )
    
    
    1,480
    
    
    
    (56
    )
    
    
    (8
    )
    
    
    (15
    )Income tax benefit
    
    
    (357
    )
    
    
    (1,154
    )
    
    
    797
    
    
    
    (69
    )
    
    
    (2
    )
    
    
    (7
    )Net loss
    
    $
    (830
    )
    
    $
    (1,513
    )
    
    $
    683
    
    
    
    (45
    )%
    
    
    (6
    )%
    
    
    (9
    )%
  Revenues
  Cost of Services
  18




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##### Table of Contents



Other Expenses
    Loss from Operations
  Interest and Other Income, Net
  Loss from Operations Before Income Taxes
  Income Tax Benefit
   Net Loss
  SEGMENT RESULTS OF OPERATIONS
  19




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##### Table of Contents



TOC
 Comparison of Operating Results for the Three Months Ended March 31, 2011 and March 31, 2010
  Three Months Ended March 31,Change2011
    
    
    2010
    
    
    $
    
    
    %Revenues:Advertising
    
    $
    7,585
    
    
    $
    7,292
    
    
    $
    293
    
    
    
    4
    %Subscriber fees
    
    
    4,747
    
    
    
    4,831
    
    
    
    (84
    )
    
    
    (2
    )Total revenues
    
    
    12,332
    
    
    
    12,123
    
    
    
    209
    
    
    
    2Cost of services:Programming
    
    
    1,757
    
    
    
    1,692
    
    
    
    65
    
    
    
    4Satellite transmission
fees
    
    
    399
    
    
    
    391
    
    
    
    8
    
    
    
    2Production and operations
    
    
    2,167
    
    
    
    2,015
    
    
    
    152
    
    
    
    8Other direct costs
    
    
    92
    
    
    
    112
    
    
    
    (20
    )
    
    
    (18
    )Total cost of services
    
    
    4,415
    
    
    
    4,210
    
    
    
    205
    
    
    
    5Other expenses:Advertising
    
    
    305
    
    
    
    286
    
    
    
    19
    
    
    
    7Selling, general and
administrative
    
    
    6,945
    
    
    
    7,623
    
    
    
    (678
    )
    
    
    (9
    )Depreciation and
amortization
    
    
    390
    
    
    
    405
    
    
    
    (15
    )
    
    
    (4
    )Total other expenses
    
    
    7,640
    
    
    
    8,314
    
    
    
    (674
    )
    
    
    (8
    )Income (loss) from
operations
    
    $
    277
    
    
    $
    (401
    )
    
    $
    678
    
    
    
    (169
    )%
  Revenues
   Cost of Services
   20




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##### Table of Contents



Other Expenses
    Income (Loss) from Operations
  Production Services
 Comparison of Operating Results for the Three Months Ended March 31, 2011 and March 31, 2010
  Three Months Ended March 31,Change2011
    
    
    2010
    
    
    $
    
    
    %Revenues:Production services
    
    $
    3,064
    
    
    $
    6,220
    
    
    $
    (3,156
    )
    
    
    (51
    )%Total revenues
    
    
    3,064
    
    
    
    6,220
    
    
    
    (3,156
    )
    
    
    (51
    )Cost of services:Production and operations
    
    
    2,759
    
    
    
    5,186
    
    
    
    (2,427
    )
    
    
    (47
    )Total cost of services
    
    
    2,759
    
    
    
    5,186
    
    
    
    (2,427
    )
    
    
    (47
    )Other expenses:Selling, general and
administrative
    
    
    1,338
    
    
    
    2,774
    
    
    
    (1,436
    )
    
    
    (52
    )Depreciation and
amortization
    
    
    356
    
    
    
    506
    
    
    
    (150
    )
    
    
    (30
    )Total other expenses
    
    
    1,694
    
    
    
    3,280
    
    
    
    (1,586
    )
    
    
    (48
    )Loss from operations
    
    $
    (1,389
    )
    
    $
    (2,246
    )
    
    $
    857
    
    
    
    (38
    )%
  21




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##### Table of Contents



Revenues
  Cost of Services
  Other Expenses
   Loss from Operations
  LIQUIDITY AND CAPITAL RESOURCES
    22




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
    
 ITEM 4. CONTROLS AND PROCEDURES.
 Evaluation of disclosure controls and procedures.
 23




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##### Table of Contents



Changes in internal control over financial reporting.
 24




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##### Table of Contents



PART IIOTHER INFORMATION
 
 ITEM 1. Legal Proceedings.
  
 ITEM 1A. Risk Factors.
  
 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 ITEM 3. Defaults Upon Senior Securities.
  
 ITEM 4. Removed and Reserved.
 
 ITEM 5. Other Information.
  
 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)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
 
 *
    
    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. 25




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##### Table of Contents



SIGNATURES
  OUTDOOR CHANNEL HOLDINGS, INC./s/ Thomas D. AllenThomas D. AllenAuthorized Officer, Chief Financial Officer and
Principal Accounting Officer

Date: May 5, 2011 26