10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2012

¨ 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.

(Exact name of Registrant as specified in its charter)

Delaware	33-0074499
(State or other Jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

43445 Business Park Drive, Suite 103

Temecula, California 92590

(Address and zip code of principal executive offices)

(951) 699-6991

(Issuer’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨    No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x   Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    x  No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class	Number of Shares Outstanding at November 5, 2012
Common Stock, $0.001 par value	25,943,066

OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES

Quarterly Report on Form 10-Q

For the Period Ended September 30, 2012

Table of Contents

	Part I. Financial Information
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of September 30, 2012 (unaudited) and December 31, 2011	3
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2012     and 2011	4
	Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended     September 30, 2012 and 2011	5
	Unaudited Condensed Consolidated Statement of Equity for the Nine Months Ended September 30, 2012	6
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Results of Operations and Financial Condition	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
	Part II. Other Information
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
Signatures		32

* * *

2

PART I—FINANCIAL INFORMATION

ITEM 1. Financial Statements.

OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

	September 30, 2012			December 31, 2011
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	38,778		$	19,498
Investments in available-for-sale securities		19,964			40,049
Accounts receivable, net of allowance for doubtful accounts of $788 and $949		14,400			13,657
Income taxes		336			3
Deferred tax assets, net		1,817			2,168
Programming and production costs		9,845			6,020
Subscriber acquisition fees, current portion		421			1,523
Other current assets		4,209			4,352
Total current assets		89,770			87,270
Property, plant and equipment, net		13,346			11,875
Amortizable intangible assets, net		220			378
Goodwill		43,160			43,160
Investments in auction-rate securities		4,980			4,940
Deferred tax assets, net		826			754
Subscriber acquisition fees, net of current portion		105			421
Deposits and other assets		255			388
Totals	$	152,662		$	149,186
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses	$	13,956		$	12,424
Deferred revenue		1,781			634
Deferred obligations, current portion		83			49
Unfavorable lease, current portion		174			163
Income taxes payable		288			1,685
Total current liabilities		16,282			14,955
Deferred obligations		259			224
Unfavorable lease		549			682
Total liabilities		17,090			15,861
Commitments and contingencies
Equity:
Preferred stock, $0.001 par value; 25,000 shares authorized; none issued		—			—
Common stock, $0.001 par value; 75,000 shares authorized; 25,950 and 25,461 shares issued and outstanding		26			25
Additional paid-in capital		171,103			169,540
Accumulated other comprehensive loss		(247	)		(287	)
Accumulated deficit		(35,310	)		(35,953	)
Total stockholders’ equity		135,572			133,325
Noncontrolling interest		—			—
Totals	$	152,662		$	149,186

See Notes to Unaudited Condensed Consolidated Financial Statements.

3

OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per share data)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2012		2011			2012		2011
Revenues:
Advertising	$	11,688	$	10,732		$	27,854	$	25,630
Subscriber fees		5,282		5,018			15,843		14,760
Production services		4,361		3,175			8,232		7,874
Total revenues		21,331		18,925			51,929		48,264
Cost of services:
Programming		1,660		1,758			6,135		5,323
Satellite transmission fees		436		389			1,296		1,188
Production and operations		5,666		4,655			13,699		13,127
Other direct costs		127		77			377		241
Total cost of services		7,889		6,879			21,507		19,879
Other expenses:
Advertising		1,938		446			4,172		1,921
Selling, general and administrative		7,605		7,387			22,962		23,569
Depreciation and amortization		668		695			2,137		2,139
Total other expenses		10,211		8,528			29,271		27,629
Income from operations		3,231		3,518			1,151		756
Interest and other income, net		23		(2	)		60		15
Income from operations before income taxes		3,254		3,516			1,211		771
Income tax provision		1,391		1,437			568		381
Net income		1,863		2,079			643		390
Net income attributable to noncontrolling interest		—		—			—		—
Net income attributable to controlling interest	$	1,863	$	2,079		$	643	$	390
Earnings per common share data:
Basic	$	0.07	$	0.08		$	0.03	$	0.02
Diluted	$	0.07	$	0.08		$	0.03	$	0.02
Weighted average common shares outstanding:
Basic		25,421		24,874			25,106		24,791
Diluted		26,014		25,634			25,707		25,609

See Notes to Unaudited Condensed Consolidated Financial Statements.

4

OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Comprehensive Income

(In thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Net income	$	1,863	$	2,079	$	643	$	390
Other comprehensive income, net of tax:
Unrealized gain on available-for-sale and auction-rate securities		13		20		40		45
Comprehensive income	$	1,876	$	2,099	$	683	$	435

See Notes to Unaudited Condensed Consolidated Financial Statements.

5

OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statement of Equity

For the Nine Months Ended September 30, 2012

(In thousands)

	Common Stock					Additional Paid-in			Accumulated Other Comprehensive			Accumulated			Total Stockholders’			Non- controlling		Total
	Shares			Amount		Capital			Income (Loss)			Deficit			Equity			Interest		Equity
Balance, December 31, 2011		25,461		$	25	$	169,540		$	(287	)	$	(35,953	)	$	133,325		$	—	$	133,325
Net income		—			—		—			—			643			643			—		643
Unrealized gain on available-for-sale and auction-rate securities		—			—		—			40			—			40			—		40
Issuance of restricted stock to employees for services to be rendered, net of forfeited shares		630			1		(1	)		—			—			—			—		—
Share-based employee and director compensation expense		—			—		2,577			—			—			2,577			—		2,577
Purchase and retirement of common stock related to employee and director share-based compensation activity		(141	)		—		(1,013	)		—			—			(1,013	)		—		(1,013	)
Cash contribution of noncontrolling interest		—			—		—			—			—			—			—		—
Balance, September 30, 2012		25,950		$	26	$	171,103		$	(247	)	$	(35,310	)	$	135,572		$	—	$	135,572

See Notes to Unaudited Condensed Consolidated Financial Statements.

6

OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)

	Nine Months Ended September 30,
	2012			2011
Operating activities:
Net income	$	643		$	390
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,137			2,139
Amortization of subscriber acquisition fees		1,431			1,166
Loss on sale of equipment		17			31
Provision for doubtful accounts		—			123
Share-based employee and director compensation		2,577			2,351
Deferred tax provision, net		279			342
Changes in operating assets and liabilities:
Accounts receivable		(743	)		4,841
Income tax receivable and payable, net		(1,730	)		(2,685	)
Programming and production costs		(3,825	)		(775	)
Other current assets		143			(1,730	)
Deposits and other assets		103			97
Subscriber acquisition fees		(500	)		(191	)
Accounts payable and accrued expenses		1,424			(3,562	)
Deferred revenue		1,147			1,586
Deferred obligations		69			7
Unfavorable lease obligations		(122	)		(111	)
Net cash provided by operating activities		3,050			4,019
Investing activities:
Purchases of property, plant and equipment		(2,980	)		(1,531	)
Purchase of intangibles		—			(85	)
Proceeds from sale of equipment		138			—
Purchases of available-for-sale securities		(53,268	)		(64,570	)
Proceeds from sale of available-for-sale and auction-rate securities		73,353			58,618
Net cash provided by (used in) investing activities		17,243			(7,568	)
Financing activities:
Purchase of common stock		(1,013	)		(900	)
Net cash used in financing activities		(1,013	)		(900	)
Net increase (decrease) in cash and cash equivalents		19,280			(4,449	)
Cash and cash equivalents, beginning of period		19,498			32,578
Cash and cash equivalents, end of period	$	38,778		$	28,129
Supplemental disclosure of cash flow information:
Income taxes paid	$	2,016		$	2,594
Supplemental disclosures of non-cash investing and financing activities:
Effect of net increase in fair value of available-for-sale and auction-rate securities	$	40		$	45
Property, plant and equipment costs incurred but not paid	$	595		$	389

See Notes to Unaudited Condensed Consolidated Financial Statements.

7

OUTDOOR CHANNEL HOLDINGS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

(In thousands, except share data)

NOTE 1—ORGANIZATION AND BUSINESS

Description of Operations

Outdoor Channel Holdings, Inc. (“Outdoor Channel Holdings”) is incorporated under the laws of the State of Delaware. Collectively, with its subsidiaries and consolidated affiliate, the terms “we,” “us,” “our” and the “Company” refer to Outdoor Channel Holdings, Inc. as a consolidated entity, except where noted or where the context makes clear the reference is only to Outdoor Channel Holdings, Inc. or one of our subsidiaries. Outdoor Channel Holdings, Inc. wholly owns OC Corporation which in turn wholly owns The Outdoor Channel, Inc. (“TOC”). Outdoor Channel Holdings is also the sole member of 43455 BPD, LLC, which is the entity that owns the building that houses our broadcast facility. TOC operates Outdoor Channel, which is a national television network devoted to traditional outdoor activities, such as hunting, fishing and shooting sports, as well as off-road motor sports and other related lifestyle programming. Outdoor Channel Holdings also wholly owns Winnercomm, Inc., which is referred to as “Production Services”. The Production Services business relates to the production, development and marketing of sports programming. Winnercomm, Inc. wholly owns CableCam, LLC and SkyCam, LLC which comprise our Aerial Camera business. The Aerial Camera business is engaged in providing aerial camera services for customer owned telecasts.

In August 2011, the Company entered into an agreement with Professional Bass Tour, Inc. (“PBT”) to establish Major League Fishing LLC (“MLF”), a joint venture created to produce a new style of professional competitive bass fishing tournaments to air on the Outdoor Channel. The Company is a 50% owner in MLF, controls the venture’s board of managers and will fund 100% of the costs of the venture via preferred capital contributions bearing a priority return which must be redeemed before MLF can make profit distributions. Accordingly, the Company is deemed the primary beneficiary and MLF is being treated as a variable interest entity, as defined by ASC 810, and MLF has been consolidated in our accompanying financial statements. Profits shall be allocated pro rata in proportion to the number of membership interests of MLF and losses shall be allocated in a similar proportionate manner but only while a member’s capital account is positive. Losses in excess of a member’s capital are not allocated to such members but will be only allocated to the Company. As of September 30, 2012, the Company has contributed approximately $1.9 million to MLF, and no cash amounts have been contributed by PBT. MLF recorded a loss for the three and nine months ended September 30, 2012.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position of the Company as of September 30, 2012 and its results of operations and cash flows for the three and nine months ended September 30, 2012 and 2011. Pursuant to the rules and regulations of the Securities and Exchange Commission, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from these financial statements. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission on March 9, 2012 (the “2011 Annual Report”).

Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012, especially given the seasonality of our business. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities as of the dates of the condensed consolidated balance sheets and reported amounts of revenues and expenses for the periods presented. Accordingly, actual results could materially differ from those estimates.

Our revenues include advertising fees from advertisements aired on Outdoor Channel, including fees paid by outside producers to purchase advertising time in connection with the airing of their programs on Outdoor Channel, and subscriber fees paid by cable, telephone companies and satellite service providers that air Outdoor Channel. Production services revenue includes revenue from advertising fees, revenue from production and aerial camera services for customer-owned telecasts, and revenue from website design, management, marketing and hosting services.

8

NOTE 2—STOCK INCENTIVE PLANS

The measurement and recognition of compensation expense is recognized in the financial statements over the service period for the fair value of all awards granted after January 1, 2006. Our stock incentive plans provide for the granting of qualified and nonqualified options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights (“SARs”) and performance units to our officers, directors and employees. We satisfy the exercise of options and awards of restricted stock by issuing previously unissued common shares. We have not awarded any SARs but have awarded options, performance units, restricted stock and RSUs.

We have two stock incentive plans: our 2004 Long-Term Incentive Plan (“LTIP Plan”) and our Non-Employee Director Stock Option Plan (“NEDSOP”). No more options will be issued under the NEDSOP Plan. All awards issued under our plans are subject to terms and conditions as determined by our Board of Directors.

Our Board of Directors has discretion to allow our employees and directors to forego shares in lieu of paying requisite withholding taxes on vested restricted shares. In turn, we remit to the appropriate taxing authorities the U.S. Federal and state withholding taxes on the total compensation the employees have realized as a result of the vesting of these shares. During the three and nine months ended September 30, 2012, approximately 24,000 and 141,000 shares were repurchased with a market value of approximately $167 and $1,013, respectively.

2004 Long-Term Incentive Plan (“LTIP Plan”). During 2005 through September 30, 2012, all options to purchase common stock, restricted stock awards, restricted stock units and performance units to our employees and Board of Directors were issued under the LTIP Plan. Options granted under the LTIP Plan expire five years from the date of grant and typically vest equally over four years. Restricted stock awards granted under the LTIP Plan do not expire, but are surrendered upon termination of employment or services to the extent unvested. These awards generally vest quarterly over two to four years, however, some awards vest annually. RSUs vest over one year and, upon satisfaction of the service vesting requirement, the holder is entitled to the issuance of the underlying shares provided the holder has not elected to defer settlement, and will have compensation income equal to that value. Performance units vest based upon criteria established at the time of grant. Options or awards that are surrendered or cease to be exercisable continue to be available for future grant under the LTIP Plan. There are 4,050,000 shares of common stock reserved for issuance under the LTIP Plan. As of September 30, 2012, there were 732,614 restricted shares and 127,442 RSUs outstanding and there were no performance unit shares or options to purchase shares of common stock outstanding. There were 989,649 shares of common stock available for future grant as of September 30, 2012.

Non-Employee Director Stock Option Plan (“NEDSOP”). Under the NEDSOP, nonqualified stock options to purchase common stock were granted to two of our current non-employee directors. Options granted under the NEDSOP expire 10 years from the date of grant. These grants are generally exercisable 40% after the first 3 months of service and 20% on the first anniversary of appointment and each anniversary thereafter until 100% vested. The NEDSOP has 1,000,000 shares of common stock reserved for issuance. As of September 30, 2012, options to purchase 250,000 shares of common stock were outstanding and no further option grants can be issued under this plan.

The fair value of the shares and options, adjusted for a forfeiture assumption, at the respective dates of grant (which represents deferred compensation not required to be recorded initially in the consolidated balance sheet) is amortized to share-based compensation expense as the rights to the restricted stock and options vest with an equivalent amount added to additional paid-in capital. Changes to forfeiture assumptions are based on actual experience and are recorded in accordance with the rules related to accounting for changes in estimates. The fair value of nonvested shares for grants is determined based on the closing trading price of our shares on the grant date.

The following tables summarize share-based compensation expense for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Nature of Award:
Restricted stock	$	734	$	624	$	2,137	$	1,901
RSUs		152		151		440		450
Total share-based compensation expense	$	886	$	775	$	2,577	$	2,351

9

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Classification of Compensation Expense:
Cost of services:
Production and operations	$	67	$	59	$	184	$	178
Other expenses:
Selling, general and administrative		819		716		2,393		2,173
Total share-based compensation expense	$	886	$	775	$	2,577	$	2,351

Stock Options

A summary of the status of the options granted under our stock incentive plans as of September 30, 2012 and the changes in options outstanding during the nine months then ended is as follows:

Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Yrs.)		Aggregate Intrinsic Value
	(in thousands)						(in thousands)
Outstanding at beginning of period		250	$	12.65		2.00	$	—
Granted		—		—
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding at end of period		250	$	12.65		1.26	$	—
Vested or expected to vest at end of period		250	$	12.65		1.26	$	—
Exercisable at end of period		250	$	12.65		1.26	$	—

Additional information regarding options outstanding for all plans as of September 30, 2012 is as follows:

	Options Outstanding							Options Exercisable
Exercise Prices	Number Outstanding			Weighted Average Remaining Contractual Term (Yrs.)		Weighted Average Exercise Price		Number Exercisable			Weighted Average Exercise Price
		(in thousands	)						(in thousands	)
$12.50		125			1.22	$	12.50		125		$	12.50
$12.80		125			1.30		12.80		125			12.80
Total		250			1.26	$	12.65		250		$	12.65

There were no options granted during the nine months ended September 30, 2012 or 2011.

10

Restricted Stock

A summary of the status of our nonvested restricted shares as of September 30, 2012 and the changes in restricted shares outstanding during the nine months then ended is as follows:

	Nine Months Ended September 30, 2012
	Shares			Weighted Average Grant-Date Fair Value
	(in thousands)
Nonvested at beginning of period		521		$	6.88
Granted		558			7.25
Vested		(330	)		7.25
Forfeited		(16	)		6.21
Nonvested at end of period		733		$	7.01

During the nine months ended September 30, 2012 and 2011, we issued 558,000 and 146,000 shares, respectively, of restricted stock to employees while 16,000 and 11,000 shares, respectively, of restricted stock were forfeited due to employee turnover.

Restricted Stock Units

A summary of the status of our RSUs as of September 30, 2012 and the changes in RSUs outstanding during the nine months then ended is as follows:

	Nine Months Ended September 30, 2012
	Number of Restricted Stock Units			Weighted Average Grant-Date Fair Value
	(in thousands)
RSUs outstanding at beginning of period		123		$	5.70
Granted		93			6.45
Vested		(89	)		6.40
Forfeited		—			—
Nonvested at end of period		127		$	5.76

As of September 30, 2012, the vesting and settlement of two grants totaling 34,418 RSUs were deferred at the election of its holder.

Expense to be Recognized

Expense associated with our share-based compensation plans yet to be recognized as compensation expense over the employees’ and non-executive directors’ remaining requisite service periods as of September 30, 2012 are as follows:

	September 30, 2012
	Expense Yet to be Recognized		Weighted Average Remaining Requisite Service Periods
Restricted stock	$	3,734		1.9 years
RSUs		398		0.7 year
Total	$	4,132		1.7 years

11

NOTE 3—EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during each period, excluding unvested restricted stock. Diluted earnings (loss) per common share reflects the potential dilution of securities by including common stock equivalents, such as unvested restricted stock and stock units in the weighted average number of common shares outstanding for a period, if dilutive.

The following table sets forth a reconciliation of the basic and diluted number of weighted average shares outstanding used in the calculation of earnings per share for the three and nine months ended September 30 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Weighted average shares used to calculate basic earnings per share		25,421		24,874		25,106		24,791
Dilutive effect of potentially issuable common shares upon exercise of dilutive stock options, performance units, unvested restricted stock and stock units		593		760		601		818
Weighted average shares used to calculate diluted earnings per share		26,014		25,634		25,707		25,609

For both the three and nine months ended September 30, 2012, outstanding options to purchase a total of approximately 250,000 shares of common stock were not included in the calculation of diluted earnings per share because their effect was antidilutive. For the three and nine months ended September 30, 2011, outstanding options and performance units to purchase a total of approximately 965,000 and 973,000 shares of common stock, respectively, were not included in the calculation of diluted earnings per share because their effect was antidilutive.

NOTE 4—INVESTMENTS IN AVAILABLE-FOR-SALE SECURITIES

Assets recorded at fair value in the balance sheet as of September 30, 2012 are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and are as follows:

Level 1	–	Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;
Level 2	–	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are directly or indirectly observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level 3	–	Unobservable inputs developed using estimates and assumptions developed by management, which reflect those that a market participant would use.

We measure the following financial assets at fair value on a recurring basis. The fair value of these financial assets was determined using the following inputs at September 30, 2012:

	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents (1)	$	38,778	$	15,782	$	22,996	$	—
Investments in available-for-sale securities (2)		19,964		6,000		13,964		—
Non-current investments in auction-rate securities (3)		4,980		—		—		4,980
Total	$	63,722	$	21,782	$	36,960	$	4,980

⁽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 treasury bills and money market funds, we determine fair value through publicly available quoted market prices. For commercial paper, we determine fair value through third-party pricing sources using proprietary valuation models and other techniques that utilize market observable inputs.

⁽²⁾ Investments in available-for-sale securities consist of treasury bills, commercial paper and tax-exempt government securities with original maturity dates in excess of three months, for which we determine fair value through quoted market prices (Level 1) or through observable inputs, such as quoted prices for similar assets in markets that are not active or other inputs that are directly or indirectly observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For commercial paper with original maturity dates in excess of three months, we determine fair value through third-party pricing sources using proprietary valuation models and other techniques that utilize market observable inputs.

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⁽³⁾ Investments in auction-rate securities consist of one auction-rate municipal security and one closed-end perpetual preferred auction-rate security. We use a discounted cash flow analysis to more accurately measure possible liquidity discounts.

The Company’s corporate and tax-exempt government securities which totaled $7,967 at September 30, 2012, are valued by outside professionals using proprietary valuation models and analytical tools in which all significant inputs related to similar instruments are observable or can be derived from or corroborated by publicly available observable market data for substantially the full term of the asset, and are therefore classified as Level 2 investments. Management is responsible for estimating the fair value of these investments, and in doing so, considers valuations provided by a large, independent pricing firm who maintains regular contact with market makers, brokers, dealers, and analysts to gather information on market movement, direction, trends, and other specific data. This information is used to structure yield curves for various types of securities and arrive at the daily valuations.

As of September 30, 2012, our investments in auction-rate securities (“ARS”) consisted of one auction-rate municipal security collateralized by federally backed student loans and one closed-end perpetual preferred security which has redemption features which call for redemption at 100% of par value and both have maintained at least A3 credit rating despite the failure of the auction process. To date, we have collected all interest due on all of our ARS in accordance with their stated terms. Historically, the carrying value (par value) of the ARS approximated fair market value due to the frequent resetting of variable interest rates. Beginning in February 2008, however, the auctions for ARS began to fail and were largely unsuccessful, requiring us to hold them beyond their typical auction reset dates. As a result, the interest rates on these investments reset to the maximum based on formulas contained in the securities. The rates are generally equal to or higher than the current market for similar securities. The par value of the ARS associated with these failed auctions will not be available to us until a successful auction occurs, a buyer is found outside of the auction process, the securities are called or the underlying securities have matured. Due to these liquidity issues, we performed a discounted cash flow analysis to determine the estimated fair value of these investments. The assumptions used in preparing the models include, but are not limited to, interest rate yield curves for similar securities, market rates of returns, and the expected term of each security. In making assumptions of required rates of return, we considered risk-free interest rates and credit spreads for investments of similar credit quality. Based on these models, we recorded an unrealized gain on our ARS of $13 and $40 in the three and nine months ended September 30, 2012, respectively. As a result of the lack of liquidity in the ARS market, we have an accumulated unrealized loss on our ARS of $247, which is included in accumulated other comprehensive loss on our consolidated balance sheet as of September 30, 2012. We deemed the loss to be temporary because we do not plan to sell any of the ARS prior to maturity at an amount below the original purchase value and, at this time, do not deem it probable that we will receive less than 100% of the principal and accrued interest. We are not certain how long we may be required to hold each security, but based on our combined cash and cash equivalents balance and investments in available-for-sale securities of $58,742 and our expected operating cash flows, we do not believe a lack of liquidity associated with our ARS will adversely affect our ability to conduct business, and believe we have the ability to hold the securities throughout the currently estimated recovery period. We will continue to evaluate any changes in the market value of the failed ARS that have not been liquidated subsequent to year-end and in the future, depending upon existing market conditions, we may be required to record additional other-than-temporary declines in market value. However, given our current cash and cash equivalent position, short-term investments in available-for-sale securities, and cash flow from operations, we believe we have the ability and we intend to hold the failed ARS as long-term investments until the market stabilizes.

All of our assets measured at fair value on a recurring basis using significant Level 3 inputs as of September 30, 2012 were auction-rate securities. The one closed-end perpetual preferred auction-rate security totaling $2,945 had an interest rate of 2.22% and an auction reset of 28 days. The municipal security totaling $2,035 had an interest rate of 0.88%, an auction reset of 28 days and a maturity date of December 1, 2045. As of September 30, 2012 the next auction reset date for both securities was October 23, 2012. The following table summarizes our fair value measurements using significant Level 3 inputs, and changes therein, for the three and nine month periods ended September 30, 2012:

	Three Months Ended September 30, 2012		Nine Months Ended September 30, 2012
Auction-Rate Securities:
Balance at beginning of period	$	4,967	$	4,940
Unrealized gain included in accumulated other comprehensive income		13		40
Balance as of September 30, 2012	$	4,980	$	4,980

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We consider the yields we recognize from auction-rate securities and from cash held in our treasury bills, commercial paper, tax-exempt government securities and money market accounts to be interest income which are recorded in interest and other income, net for the three and nine months ended September 30, 2012 and 2011 as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Interest income	$	44		$	24		$	121		$	86
Interest expense		(21	)		(26	)		(61	)		(71	)
Total interest and other income, net	$	23		$	(2	)	$	60		$	15

NOTE 5—GOODWILL AND INTANGIBLE ASSETS

We currently have three reporting units, TOC, Production Services and Aerial Cameras. The Production Services reporting unit consists solely of our Winnercomm business and the Aerial Cameras reporting unit consists of our CableCam and SkyCam businesses which were acquired on January 12, 2009. All of our goodwill is attributed to our TOC reporting unit.

We review goodwill for impairment on an annual basis during the fourth quarter and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. We typically perform a two-step impairment test on goodwill. In the first step, we compare the fair value of our reporting unit with goodwill to its carrying value. If the fair value of our reporting unit exceeds the carrying values of the net assets assigned to that unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to our reporting unit exceeds the fair value, then we must perform the second step in order to determine the implied fair value of the reporting unit’s goodwill and compare it to the carrying value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then we must record an impairment loss equal to the difference.

We historically have determined the implied fair value of its goodwill utilizing the discounted cash flow method under the income approach. Under the income approach, we derived the enterprise fair value based on the present value of estimated future cash flows, which were based on historical data and assumptions pertaining to the market. In performing the 2011 goodwill impairment test, we assessed the relevant qualitative factors and concluded that it is more likely than not that the fair value of our goodwill is greater than the carrying amount. After reaching this conclusion, no further testing was performed. The qualitative factors we considered included, but were not limited to, general economic conditions, the industry outlook, our recent and forecasted financial performance and the price of our common stock.

Intangible assets that are subject to amortization consist of the following as of September 30, 2012:

	September 30, 2012
	Gross		Accumulated Amortization		Net
Trademark	$	219	$	219	$	—
Internet domain names		173		160		13
Customer relationships		980		793		187
Patents		90		70		20
Total amortizable intangible assets	$	1,462	$	1,242	$	220

As of September 30, 2012, the weighted average amortization period for the above intangibles is 1.2 years. Based on our most recent analysis, we believe that no impairment exists at September 30, 2012 with respect to our goodwill and other intangible assets. For the nine months ended September 30, 2012 and 2011, we recognized amortization expense related to the intangible assets of $158 and $165, respectively.

Estimated future amortization expense related to intangible assets at September 30, 2012 is as follows:

Years Ending December 31,	Amount
2012 (remaining 3 months)	$	50
2013		165
2014		5
Total	$	220

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NOTE 6—LINES OF CREDIT

On September 5, 2012, the Company renewed its revolving line of credit agreement (the “Revolver”) with U.S. Bank N.A., extending the maturity date to September 5, 2013 and renewing the total amount which can be drawn upon under the Revolver to $10,000. The Revolver provides that the interest rate per annum as selected by us shall be prime rate (3.25% and 3.25% as of September 30, 2012 and 2011, respectively) plus 0.25% or LIBOR (0.25% and 0.25% as of September 30, 2012 and 2011, respectively) plus 2.25%. The Revolver is unsecured. This credit facility contains customary financial and other covenants and restrictions, as amended, including a change of control provision and minimum liquidity metrics. As of September 30, 2012, we did not have any amounts outstanding under this credit facility. This Revolver is guaranteed by TOC and as of September 30, 2012, we were in full compliance with all the covenants of the Revolver.

NOTE 7—ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses as of September 30, 2012 and December 31, 2011 consist of the following:

	September 30, 2012		December 31, 2011
Trade accounts payable	$	1,185	$	1,951
Accrued payroll and related expenses		3,402		3,627
Estimated make-good accrual		1,156		1,575
Estimated most-favored nation accrual		2,003		2,003
Accrued launch support commitment		—		488
Accrued expenses		6,210		2,780
Total	$	13,956	$	12,424

NOTE 8—INCOME TAX PROVISION

The income tax provision reflected in the accompanying unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2012 and 2011 is different than that computed based on the applicable statutory Federal income tax rate of 34% primarily due to state taxes and the limitations on the deductibility of executive compensation as provided for in Internal Revenue Code Section 162(m).

We file income tax returns in the United States and various state and local tax jurisdictions. We have state net operating losses and credit carryforwards that will be subject to examination beyond the year in which they are ultimately utilized. Our policy is to record interest and penalties on uncertain tax positions as income tax expense.

NOTE 9—RELATED PARTY TRANSACTIONS

We lease our administrative facilities from Musk Ox Properties, LP, which in turn is owned by Thomas H. Massie, who is a principal stockholder and director of the Company. The lease agreement had a five-year term and expired on December 31, 2010. Since January 2011, we have entered into a number of agreements with Musk Ox Properties, LP to extend our lease which now expires on January 31, 2013. Monthly rent payments for the extended lease term are approximately $19. We paid Musk Ox Properties, LP, and recognized rent expense of, approximately $57 in both the three months ended September 30, 2012 and 2011, and $172 in both the nine months ended September 30, 2012 and 2011.

We continue to lease our former SkyCam facility from Case and Associates Properties, Inc., which in turn is partially owned by James E. Wilburn, Chairman of Winnercomm. The lease agreement has a ten year term expiring in May 2016. Monthly rent payments under this lease agreement were $43. We paid Case and Associates Properties, Inc., approximately $125 and $129 in the three months ended September 30, 2012 and 2011, respectively, and $415 and $381 in the nine months ended September 30, 2012 and 2011, respectively. We recognized rent expense related to this lease of $71 and $88 in the three months ended September 30, 2012 and 2011, respectively, and $205 and $223 in the nine months ended September 30, 2012 and 2011, respectively. We no longer occupy this facility and sub-leased this facility in April 2012.

In October 2010 we engaged WATV Productions, Inc. to produce one off-road motorsport series for a total contract value of $390. In May 2012 we engaged WATV to produce a viewer generated comedy series for a total contract value of $538. Roger L. Werner, our former Chief Executive Officer and current Co-Chairman of the Board of Directors, is a shareholder of WATV. During the three and nine months ended September 30, 2012 and 2011, we paid WATV $230 and $405, and $120 and $357, respectively, related to the production of these programs.

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We license a program on a cash and barter basis that is produced by Gold Prospectors Association of America, LLC (“Gold Prospectors”), an entity owned by Thomas H. Massie, who is a principal stockholder and director of the Company. The program airs during off-peak hours and the license period is from March 2009 through March 2012. In March 2012, we extended the license period of this show and agreed to pay $25 per quarter in exchange for increased commercial air time to be sold and retained by the Company. During the three and nine months ended September 30, 2012 we paid Gold Prospectors $25 and $75, respectively. The value of this barter arrangement is not considered material to our consolidated financial statements.

In December 2011 we entered into a license agreement to air another program produced by Gold Prospectors. Under the agreement we will contribute $80 towards the production of 18 licensed episodes which will be jointly owned by the Company and Gold Prospectors. The agreement terminates in December 2012 and $80 was paid in both the three months and nine months ended September 30, 2012.

NOTE 10—COMMITMENTS AND CONTINGENCIES

From time to time we are involved in litigation as both plaintiff and defendant arising in the ordinary course of business. In the opinion of management, the results of any pending litigation should not have a material adverse effect on our consolidated financial position or operating results.

We lease facilities and equipment, including access to satellites for television transmission, under non-cancelable operating leases. Generally, the most significant lease is our satellite lease. We also have operating leases for general office and production facilities in Tulsa, OK, New York City, Chicago, IL, Fort Worth, TX, Greenwich, CT and Santa Monica, CA. These leases expire at various dates through 2022.

Rental expenses, including satellite and transponder expense, equipment and facilities rent expense, aggregated to approximately $690 and $828 for the three months ended September 30, 2012 and 2011, respectively, and $2,018 and $2,356 for the nine months ended September 30, 2012 and 2011, respectively.

NOTE 11—SEGMENT INFORMATION

We report segment information in the same format as reviewed by our chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our chief executive officer. In 2011, based on changes in how we monitor and measure our various businesses, we separated our aerial camera units, SkyCam and CableCam, into a separate segment. Previously, our aerial camera units were included in our Production Services segment. Accordingly, we now operate in three reporting segments: TOC, Production Services (which is comprised solely of Winnercomm) and our Aerial Cameras segment. TOC is a separate business activity that broadcasts television programming on the Outdoor Channel twenty-four hours a day, seven days a week. TOC generates revenue primarily from advertising fees (which include fees paid by outside producers to purchase advertising time in connection with the airing of their programs on Outdoor Channel) and subscriber fees. Production Services is a separate business activity that relates to the production, development and marketing of sports programming and providing website services. Production Services generates revenue from advertising fees, production services for customer-owned telecasts, and from website design, management, marketing and hosting services. Aerial Cameras generates revenue from aerial camera services for customer-owned telecasts and events.

Intersegment revenues were generated by Production Services from programming and website services provided to TOC in the amount of approximately $1,097 and $1,760 for the three months ended September 30, 2012 and 2011, respectively, and related intersegment cost of services were generated by Production Services of approximately $1,068 and $1,454 for the three months ended September 30, 2012 and 2011, respectively. Intersegment revenues were generated by Production Services of approximately $1,853 and $2,760 for the nine months ended September 30, 2012 and 2011, respectively, and intersegment cost of services were generated by Production Services of approximately $1,908 and $2,470 for the nine months ended September 30, 2012 and 2011, respectively. Our Aerial Cameras segment had no intersegment revenues or intersegment cost of services for the three and nine months ended September 30, 2012 and 2011.

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Information with respect to these reportable segments as of and for the three and nine months ended September 30, 2012 and 2011 is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Revenues
TOC	$	16,970		$	15,750		$	43,697		$	40,390
Production Services		2,107			3,293			4,518			6,699
Aerial Cameras		3,351			1,642			5,567			3,935
Eliminations		(1,097	)		(1,760	)		(1,853	)		(2,760	)
Total revenues	$	21,331		$	18,925		$	51,929		$	48,264

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Income (Loss) from Operations
TOC*	$	3,800		$	4,772		$	3,529		$	5,238
Production Services*		(235	)		(123	)		(806	)		(1,596	)
Aerial Cameras*		(315	)		(825	)		(1,637	)		(2,596	)
Eliminations		(19	)		(306	)		65			(290	)
Total income from operations	$	3,231		$	3,518		$	1,151		$	756

	September 30, 2012			December 31, 2011
Total Assets
TOC	$	79,406		$	77,771
Production Services		8,069			7,063
Aerial Cameras		9,154			7,954
Corporate assets*		56,266			56,696
Eliminations		(233	)		(298	)
Total assets	$	152,662		$	149,186

	Three Months  Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Depreciation and Amortization
TOC	$	306	$	337	$	1,044	$	1,062
Production Services		122		128		376		398
Aerial Cameras		240		230		717		679
Total depreciation and amortization	$	668	$	695	$	2,137	$	2,139

* Corporate overhead expenses consist primarily of executive, legal and administrative functions not associated directly with TOC, Production Services or Aerial Cameras. We allocate a portion of these expenses to our Production Services and Aerial Cameras 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 12—RECENT ACCOUNTING PRONOUNCEMENTS

In June and December 2011, the Financial Accounting Standards Board (FASB) issued guidance on the presentation of comprehensive income. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity and also requires presentation of reclassification adjustments from other comprehensive income to net income on the face of the financial statements. We adopted this guidance beginning after January 1, 2012, with the exception of the requirement to present reclassification adjustments from other comprehensive income to net income on the face of the financial statements, which has been deferred pending further deliberation by the FASB. The adoption did not have a material effect on our financial condition or results of operations, and only resulted in a change to financial statement presentation.

On May 12, 2011 the FASB issued Accounting Standards Update (ASU) No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (ASU 2011-04). This update amends Accounting Standards Codification (ASC) Topic 820, “Fair Value Measurement and

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Disclosure.” ASU 2011-04 clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. ASU 2011-04 is effective for annual and interim reporting periods beginning on or after December 15, 2011. The adoption of this guidance did not have a material effect our financial condition and results of operations.

NOTE 13—SUBSEQUENT EVENTS

The Company has completed an evaluation of all subsequent events through the date the consolidated financial statements were issued and concluded no subsequent events occurred that required recognition or disclosure.

* * *

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

Safe Harbor Statement

We make statements in this report that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are necessarily based upon assumptions with respect to the future, involve risks and uncertainties, and are not guarantees of performance. These forward-looking statements represent our estimates and assumptions only as of the filing date of this report. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.

In this report, when we use words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “may,” “will,” “would,” “could,” “should,” “potential,” “target,” “outlook,” “depends,” “pursue” or similar expressions, or when we discuss our guidance, strategies, plans, goals, initiatives, objectives or intentions, we are making forward-looking statements.

These statements involve significant risks and uncertainties and are qualified by important factors that could cause our actual results and future actions to differ materially from those reflected in the forward-looking statements. Such factors include, but are not limited to, risks and uncertainties which are included in “Item 1A. Risk Factors” found in our latest Form 10-K and other risks and uncertainties discussed elsewhere in this report. We caution you not to rely unduly on any forward-looking statements. You should review and consider carefully the risks, uncertainties and other factors that affect our business as described in this report and in our Annual Report on Form 10-K and other reports that we file with the Securities and Exchange Commission.

Management’s discussion and analysis of result of operations and financial condition is provided as a supplement to and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes to enhance the understanding of our results of operations, financial condition and cash flows. Additional context can also be found in our 2011 Annual Report.

Significant components of management’s discussion and analysis of results of operations and financial condition include:

• Overview and Strategy. 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 three and nine months ended September 30, 2012 compared to the three and nine months ended September 30, 2011.

• Segment Results of Operations. The segment results of operations section provides an analysis of our results on a reportable operating segment basis for the three and nine months ended September 30, 2012 compared to the three and nine months ended September 30, 2011.

• Liquidity and Capital Resources. The liquidity and capital resources section provides a discussion of our cash flows for the nine months ended September 30, 2012 compared to the nine months ended September 30, 2011.

OVERVIEW AND STRATEGY

We operate in three reporting segments: TOC, Production Services and Aerial Cameras. Each of these operating segments has unique characteristics and faces different opportunities and challenges. An overview of our three operating segments follows.

Our core business, TOC, is engaged in the development, production and broadcast of traditional outdoor programming such as hunting, fishing, shooting and off-road motor sports. With hunting season being predominantly in the second half of the calendar year, the success of our hunting programming during this same time has been the main driver of our stronger financial performance in the second half of the year. We continue to broaden our programming offerings in the first half of the year in an attempt to improve our financial performance during that same period. We have expanded our fishing programming to include notable fishing programs like Bassmasters, Madfin Shark Series, Spanish Fly and Zona, and in late March 2012, we began airing Major League Fishing, a new style of bass fishing tournament with 24 of the top anglers in the United States. Overall, in addition to increasing revenue opportunities in the first half of the year, we believe this strategy will generate growth in our revenue from improving our program viewership ratings and increasing our distribution.

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Our Production Services segment, which is made up entirely of our Winnercomm production entity, is closely aligned with our core focus on outdoor programming, but also produces scripted and live event sports television and provides website services to third parties.

Our Aerial Cameras segment, which we acquired along with the purchase of Winnercomm in 2009, is the U.S. leader in overhead aerial camera production, and we believe it is a unique asset which has meaningful growth opportunities and is increasing in value. However, because overhead aerial camera production is not strategically essential to our core business, and the Aerial Cameras segment will likely require significant capital investments to accelerate its growth, we continue to explore strategic alternatives for this business.

Additional information regarding each segment follows.

Outdoor Channel

Outdoor Channel is a national television network devoted primarily to traditional outdoor activities, such as hunting, fishing and shooting sports, as well as off-road motor sports and other outdoor related lifestyle programming. TOC revenues consist primarily of advertising fees, including those from advertisements aired on Outdoor Channel and fees paid by third-party producers to purchase advertising time in connection with the airing of their programs on Outdoor Channel, and subscriber fees paid by cable, satellite and telephone company service providers that air Outdoor Channel.

Our advertising revenue for TOC consists of advertising bought on our cable network and advertising revenue related to ads placed on our website, outdoorchannel.com. Advertising revenues are generally driven by audience delivery, which in turn are determined by our subscriber base and the ratings our programs achieve in those homes. A portion of TOC’s advertising contracts, primarily those with national non-endemic advertisers, typically guarantee the advertiser a minimum audience for its advertisements over the term of the contracts. This requires us to make estimates of the audience size that will be delivered throughout the terms of the contracts at the time we enter into such contracts. We base our estimate of audience size on our Nielsen ratings from prior years. If after running the advertising we determine we did not deliver the guaranteed audience, an accrual for “make-good” advertisements is recorded as a reduction of revenue, and we then provide the advertiser with additional advertising time to reach the aggregate minimum audience that we guaranteed and then recognize such revenue at that time. Any estimated make-good accrual is adjusted throughout the terms of the advertising contracts. The continued growth of our advertising revenues will, to a certain extent, be dependent on the growth of our audience viewing and subscriber base, as well as the general health of the advertising marketplace.

For September 2012, Nielsen estimated that Outdoor Channel had 37.8 million subscriber homes compared to 34.4 million for the same period a year ago, a 10% year-over-year increase. Nielsen revises its estimate of the number of subscribers to our channel each month and there is usually a lag of 2-3 months before Nielsen captures any new launches or tier migrations. For November 2012, Nielsen’s estimate increased to 38.1 million subscribers, which we believe is attributed to the lag in accounting for new Outdoor Channel subscribers in their estimates. Nielsen is the leading provider of television audience measurement and advertising information services worldwide, and its estimates and methodology are generally accepted and used in the advertising industry. Our November 2012 Nielsen estimate of 38.1 million subscribers is the highest Outdoor Channel has ever achieved. The estimate regarding Outdoor Channel’s subscriber base is made by Nielsen and is theirs alone, and does not represent our opinions, forecasts or predictions. It should not be implied that we endorse nor necessarily concur with such information, simply due to our reference to or distribution of their estimate. There can be no assurances that there will be any correlation between the actual growth or decline in our paying subscribers compared to Nielsen’s estimate of such growth or decline.

We continue to pursue subscriber growth by utilizing various incentives, including offering lower per-subscriber fees for broader distribution, payment of subscriber acquisition or launch support fees and TOC marketing dollars among other tactics. Any subscriber acquisition or launch support fees are capitalized and amortized over the period that the pay television distributor is required to carry the newly acquired TOC subscriber. To the extent revenue is associated with the incremental subscribers, the amortization is charged to offset the related revenue. Any excess of launch support amortization over the related subscriber fee revenue is charged to expense as other direct costs. In late September 2012, we added approximately 1.1 million additional paying subscribers in the northeastern United States through package retiering. We do not believe these added homes have yet been captured by Nielsen and expect our Nielsen subscriber homes to increase in the fourth quarter of 2012 to reflect these additional subscribers.

While we are 100% programmed in high-definition format (“HD”), our HD signal is only carried on a subset of our overall subscriber base. We currently have approximately 14.1 million HD subscriber homes, all of which are on cable or telephone systems. We are continuing our efforts to increase the carriage of our HD signal as we deem this to be an important competitive feature.

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We increased our programming expenditures in 2011 and expect to continue to see increases in programming costs in 2012 and beyond as we continue to invest in our programming brand in response to the increased viewing alternatives, including competitors with similar outdoor themed programming. While our advertising and marketing expense declined slightly in 2011 compared to 2010, we increased these expenses during the first three quarters of 2012 and expect to increase our expenses in this area for the rest of 2012 and beyond to support our increased programming investment and our recent and expected continued growth in subscribers. While we believe these investments in programming and marketing will help assure our long term growth, they will likely have a dampening effect on TOC’s operating income in the near term.

During the first nine months of 2012, our prime time viewership amongst one of our key demographic, adults aged 25-54 years of age, (as measured by Nielsen) increased 6% from last year and our aggregate viewership in that demographic during the total day was up 1% from last year’s levels. We believe that our renewed investment in programming and marketing will have a positive effect on our ratings, although it may take some time before seeing these results.

We also have invested significant resources to build our outdoorchannel.com website and expect that we will continue to make investments in this area to support material revenue potential for our online operations.

Production Services

Production Services is comprised solely of our wholly owned subsidiary, Winnercomm, Inc., which is involved in the production, development and marketing of sports programming. Production Services revenues include revenues from sponsorship, sales representation fees on television advertising sold on behalf of client advertisers, revenues from production services for customer-owned telecasts, and revenue from website design, management, marketing and hosting fees.

Since our acquisition of Winnercomm in January 2009, we have been focused on eliminating Winnercomm’s low margin production and non-strategic business and returning the segment to profitability. This has resulted in a material reduction of the segment’s third-party revenues and gross profits. Our Winnercomm unit is increasingly being used to produce high quality programming for TOC, including MLF and Elite Tactical Unit, a new program that will launch on TOC in January 2013.

Aerial Cameras

Our Aerial Cameras segment is comprised of our SkyCam and CableCam entities, which were acquired in connection with our Winnercomm acquisition in January 2009. These entities are engaged in providing aerial camera services for customer owned telecasts. Most of the segment’s revenues relate to professional and college football, but we also provide services, although to a much lesser extent, for other sports such as baseball, soccer and hockey and for special events such as concerts. We also hope to expand our business to other areas outside of football and sports in general, and in April 2012 we signed our first ever contract with a U.S. government prime contractor related to a U.S. military project, which we hope will become a new and growing customer group for us.

In the second quarter of 2012 one of our key network clients exercised their option to extend our agreement covering NFL football games for two additional years and also awarded us additional college football games for the 2012 and 2013 seasons.

During 2011 our Aerial Cameras segment received a favorable jury verdict on our legal actions against ActionCam and its founder, a competitor to our aerial camera business which we initiated suit against in 2009 for misappropriation of trade secrets, breach of separation agreement and unfair competition. In late September 2012, the Court issued final orders in the matter upholding the jury award to SkyCam and further awarding SkyCam a royalty per each event covered by ActionCam from September 3, 2011 until February 28, 2013. In October 2012, the Company filed a claim with the court for ActionCam to reimburse the Company for legal fees incurred in connection with the suit. The Company has not recorded any awards or royalty income from ActionCam as there is no certainty that ActionCam has the ability to pay these awards and might appeal the court’s decision.

As we believe our Aerial Cameras segment is not strategically essential to our core outdoor business and will likely require significant capital investments to accelerate its growth, we announced in June 2012 that we are exploring strategic alternatives for this business and that process is still ongoing.

Seasonality

All of our segments generate a higher proportion of their revenue and operating income in the second half of our fiscal year due to higher viewed hunting programming which coincides with the fall hunting season at TOC, hunting and sports related programming at our Production Services segment and to football driven revenues at our Aerial Cameras segment.

21

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from those estimates.

For further information regarding our critical accounting policies, judgments and estimates, please see “Critical Accounting Policies and Estimates” in Item 7 of our 2011 Annual Report.

CONSOLIDATED RESULTS OF OPERATIONS

Our consolidated results of operations are presented below for the three and nine months ended September 30, 2012 and 2011.

Comparison of Consolidated Operating Results for the Three Months Ended September 30, 2012 and September 30, 2011

The following table discloses certain financial information for the periods presented, expressed in terms of dollars, dollar change, percentage change and as a percent of total revenue (all dollar amounts are in thousands):

						Change						% of Total Revenue
	2012		2011			$			%			2012			2011
Revenues:
Advertising	$	11,688	$	10,732		$	956			9	%		55	%		57	%
Subscriber fees		5,282		5,018			264			5			25			27
Production services		4,361		3,175			1,186			37			20			17
Total revenues		21,331		18,925			2,406			13			100			100
Cost of services:
Programming		1,660		1,758			(98	)		(6	)		8			9
Satellite transmission fees		436		389			47			12			2			2
Production and operations		5,666		4,655			1,011			22			27			25
Other direct costs		127		77			50			65			1			—
Total cost of services		7,889		6,879			1,010			15			37			36
Other expenses:
Advertising		1,938		446			1,492			335			9			2
Selling, general and administrative		7,605		7,387			218			3			36			39
Depreciation and amortization		668		695			(27	)		(4	)		3			4
Total other expenses		10,211		8,528			1,683			20			48			45
Income from operations		3,231		3,518			(287	)		(8	)		15			19
Interest and other income, net		23		(2	)		25			(1,250	)		—			—
Income from operations before income taxes		3,254		3,516			(262	)		(8	)		15			19
Income tax provision		1,391		1,437			(46	)		(3	)		7			8
Net income	$	1,863	$	2,079		$	(216	)		(10	)%		9	%		11	%

(percentages may not add due to rounding)

22

Comparison of Consolidated Operating Results for the Nine Months Ended September 30, 2012 and September 30, 2011

The following table discloses certain financial information for the periods presented, expressed in terms of dollars, dollar change, percentage change and as a percent of total revenue (all dollar amounts are in thousands):

					Change						% of Total Revenue
	2012		2011		$			%			2012			2011
Revenues:
Advertising	$	27,854	$	25,630	$	2,224			9	%		54	%		53	%
Subscriber fees		15,843		14,760		1,083			7			31			31
Production services		8,232		7,874		358			5			16			16
Total revenues		51,929		48,264		3,665			8			100			100
Cost of services:
Programming		6,135		5,323		812			15			12			11
Satellite transmission fees		1,296		1,188		108			9			3			3
Production and operations		13,699		13,127		572			4			26			27
Other direct costs		377		241		136			56			1			1
Total cost of services		21,507		19,879		1,628			8			41			41
Other expenses:
Advertising		4,172		1,921		2,251			117			8			4
Selling, general and administrative		22,962		23,569		(607	)		(3	)		44			49
Depreciation and amortization		2,137		2,139		(2	)		—			4			4
Total other expenses		29,271		27,629		1,642			6			56			57
Income from operations		1,151		756		395			52			2			2
Interest and other income, net		60		15		45			300			—			—
Income from operations before income taxes		1,211		771		440			57			2			2
Income tax provision		568		381		187			49			1			1
Net income	$	643	$	390	$	253			65	%		1	%		1	%

(percentages may not add due to rounding)

Revenues

Total revenues for the three months ended September 30, 2012 were $21.3 million, an increase of $2.4 million, or 13%, compared to revenues of $18.9 million for the three months ended September 30, 2011. Total revenues for the nine months ended September 30, 2012 were $51.9 million, an increase of $3.7 million, or 8%, compared to revenues of $48.3 million for the nine months ended September 30, 2011. Both the three-month and nine-month revenue increases were due primarily to increases in our advertising revenue, subscriber fee revenue and our aerial camera unit’s production services revenue, all as discussed further in our segment results of operations below.

Cost of Services

Total cost of services for the three months ended September 30, 2012 were $7.9 million, an increase of $1.0 million, or 15%, compared to cost of services of $6.9 million for the three months ended September 30, 2011. Total cost of services for the nine months ended September 30, 2012 were $21.5 million, an increase of $1.6 million, or 8%, compared to cost of services of $19.9 million for the nine months ended September 30, 2011. The increase for the three and nine-month periods were primarily driven by increased events at our Aerial Camera unit and, for the nine-month period, higher programming expenses at our Outdoor Channel unit, as further discussed in the segment results of operations below.

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Other Expenses

Advertising expenses for the three months ended September 30, 2012 were $1.9 million, a 335% increase compared to $446,000 for the three months ended September 30, 2011. Our advertising expenses for the nine months ended September 30, 2012 were $4.2 million, a 117% increase compared to $1.9 million for the nine months ended September 30, 2011. The increase for the three and nine-month periods were primarily due to increased cross channel advertising and promotional campaigns in support of recent new subscriber and program launches.

Selling, general and administrative (“SG&A”) expenses for the three months ended September 30, 2012 were $7.6 million, a 3% increase compared to SG&A expenses of $7.4 million for the three months ended September 30, 2011. SG&A expenses for the nine months ended September 30, 2012 were $23.0 million, a 3% decrease compared to SG&A expenses of $23.6 million for the nine months ended September 30, 2011. The increase in SG&A for the three-month period was primarily due to increased professional fees associated with distribution renewals, an MFN audit by one of our affiliates and the exploration of business opportunities at our TOC unit, net of reduced personnel related expenses at our Production Services unit and reduced legal fees at our Aerial Camera unit as further discussed in the segment results of operations below. The decrease in SG&A for the nine-month period was primarily due to reduced personnel costs, especially at our Production Services unit, lower legal costs associated with our Aerial Camera unit and reduced bad debt expense.

Depreciation and amortization expense for the three months ended September 30, 2012 was $668,000, a 4% decrease compared to depreciation and amortization expense of $695,000 for the three months ended September 30, 2011. Depreciation and amortization expense for the nine months ended September 30, 2012 was $2.1 million, unchanged from the $2.1 million in depreciation and amortization expense for the nine months ended September 30, 2011. The decrease in the three-month period primarily relates to more fixed assets overall becoming fully depreciated over the past year than depreciation of new assets as further discussed in the segment results of operations below.

Income from Operations

Income from operations for the three months ended September 30, 2012 was $3.2 million, a decrease of $287,000 compared to income from operations of $3.5 million for the three months ended September 30, 2011. Our income from operations for the nine months ended September 30, 2012 was $1.2 million, an increase of $395,000 compared to an operating income of $756,000 for the nine months ended September 30, 2011. As discussed below in our segment results of operations, the decrease in income from operations for the three-month period was driven primarily by an increase in advertising expense at TOC, partially offset by reduced operating losses at our Production Services and Aerial Cameras units. The increase in operating income for the nine-month period was driven by reduced losses at our Production Services and Aerial Cameras units, net of lower operating income at TOC.

Interest and Other Income, Net

Interest and other income, net for the three months ended September 30, 2012 was income of $23,000, an increase of $25,000 compared to net expense of $2,000 for the three months ended September 30, 2011. Interest and other income, net for the nine months ended September 30, 2012 was income of $60,000, an increase of $45,000 compared to income of $15,000 for the nine months ended September 30, 2011. The increase was primarily due to higher rates on our investments in available-for-sale securities.

Income Tax Provision

Income tax provision for the three months ended September 30, 2012 was $1.4 million compared to $1.4 million for the three months ended September 30, 2011. Income tax provision for the nine months ended September 30, 2012 was $568,000 compared to income tax provision of $381,000 for the nine months ended September 30, 2011. The income tax provision reflected in the accompanying unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2012 and 2011 is different than that computed based on the applicable statutory Federal income tax rate of 34% primarily due to state taxes and the limitations on the deductibility of executive compensation as provided for in Internal Revenue Code Section 162(m).

Net Income

Net income for the three months ended September 30, 2012 was $1.9 million, a decrease of $216,000 compared to net income of $2.1 million for the three months ended September 30, 2011. Our net income for the nine months ended September 30, 2012 was $643,000, an increase of $253,000 compared to net income of $390,000 for the nine months ended September 30, 2011.

24

SEGMENT RESULTS OF OPERATIONS

Transactions between reportable segments are accounted for as third-party arrangements for the purposes of presenting reporting segment results of operations below. Typical intersegment transactions include the purchase by our TOC segment of programs to air on Outdoor Channel and website design, management and maintenance services from our Production Services segment. Our Aerial Cameras segment has no intersegment transactions between our TOC or Production Services segments.

TOC

Comparison of Operating Results for the Three and Nine Months Ended September 30, 2012 and September 30, 2011

The following table discloses certain financial information for the periods presented, expressed in terms of dollars, dollar change and percentage change (all dollar amounts are in thousands):

	Three Months Ended September 30,										Nine Months Ended September 30,
					Change										Change
	2012		2011		$			%			2012		2011		$			%
Revenues:
Advertising	$	11,688	$	10,732	$	956			9	%	$	27,854	$	25,630	$	2,224			9	%
Subscriber fees		5,282		5,018		264			5			15,843		14,760		1,083			7
Total revenues		16,970		15,750		1,220			8			43,697		40,390		3,307			8
Cost of services:
Programming		1,734		2,101		(367	)		(18	)		6,448		5,943		505			9
Satellite transmission fees		436		389		47			12			1,296		1,188		108			9
Production and operations		1,787		1,786		1			—			6,149		5,719		430			8
Other direct costs		127		77		50			65			377		241		136			56
Total cost of services		4,084		4,353		(269	)		(6	)		14,270		13,091		1,179			9
Other expenses:
Advertising		1,948		446		1,502			337			4,182		1,921		2,261			118
Selling, general and administrative		6,832		5,842		990			17			20,672		19,078		1,594			8
Depreciation and amortization		306		337		(31	)		(9	)		1,044		1,062		(18	)		(2	)
Total other expenses		9,086		6,625		2,461			37			25,898		22,061		3,837			17
Income from operations	$	3,800	$	4,772	$	(972	)		(20	)%	$	3,529	$	5,238	$	(1,709	)		(33	)%

(percentages may not add due to rounding)

Revenues

Advertising revenue for the three months ended September 30, 2012 was $11.7 million, an increase of $956,000, or 9%, as compared to $10.7 million for the three months ended September 30, 2011. Advertising revenue for the nine months ended September 30, 2012 was $27.9 million, an increase of $2.2 million, or 9%, as compared to $25.6 million for the nine months ended September 30, 2011. The increase in advertising revenue in both the three and nine-month periods were due primarily to an increase in advertising revenues from higher priced endemic advertisers.

Subscriber fees for the three months ended September 30, 2012 were $5.3 million, an increase of $264,000, or 5%, compared to $5.0 million for the three months ended September 30, 2011. Subscriber fees for the nine months ended September 30, 2012 were $15.8 million, an increase of $1.1 million, or 7%, compared to $14.8 million for the nine months ended September 30, 2011. The increase in subscriber fees for the three and nine months ended September 30, 2012 was primarily due to an increase in subscribers and in subscriber rates.

25

Cost of Services

Programming expenses for the three months ended September 30, 2012 were $1.7 million, a decrease of $367,000, or 18%, compared to $2.1 million for the three months ended September 30, 2011. Programming expenses for the nine months ended September 30, 2012 were $6.4 million, an increase of $505,000, or 9%, compared to $5.9 million for the nine months ended September 30, 2011. The decrease for the three-month period was due primarily to lower write-down of prepaid program costs for abandonment and impairment in the current year period compared to the prior year. The increase for the nine-month period was due primarily to the debut of our MLF program, which is significantly more expensive than the 2011 time period programming it replaced, net of reduced program write-downs.

Satellite transmission fees for the three months ended September 30, 2012 were $436,000, an increase of $47,000, or 12%, compared to $389,000 for the three months ended September 30, 2011. Satellite transmission fees for the nine months ended September 30, 2012 were $1.3 million, an increase of $108,000, or 9%, compared to $1.2 million for the nine months ended September 30, 2011. The increase for the three and nine-month periods was primarily due to an upgrade in backup transponder services.

Production and operations costs for the three months ended September 30, 2012 were $1.8 million, essentially unchanged from such costs for the three months ended September 30, 2011. Production and operations costs for the nine months ended September 30, 2012 were $6.1 million, an increase of $430,000, or 8%, compared to $5.7 million for the nine months ended September 30, 2011. The increase in costs for the nine-month period was due primarily to increases to our website costs and executive compensation and recruiting costs.

Other direct costs for the three months ended September 30, 2012 were $127,000, an increase of $50,000, or 65%, compared to $77,000 for the three months ended September 30, 2011. Other direct costs for the nine months ended September 30, 2012 were $377,000, an increase of $136,000, or 56%, compared to $241,000 for the nine months ended September 30, 2011. This increase was due primarily to net increases in subscriber acquisition fees amortization.

Other Expenses

Advertising expenses for the three months ended September 30, 2012 were $1.9 million, an increase of $1.5 million, or 337%, compared to $446,000 for the three months ended September 30, 2011. Advertising expenses for the nine months ended September 30, 2012 were $4.2 million, an increase of $2.3 million, or 118%, compared to $1.9 million for the nine months ended September 30, 2011. The increase for the three and nine-month periods was due primarily to increased cross channel advertising and promotional campaigns to support recent new subscriber launches and program launches.

SG&A expenses for the three months ended September 30, 2012 were $6.8 million, an increase of $990,000, or 17%, compared to $5.8 million for the three months ended September 30, 2011. SG&A expenses for the nine months ended September 30, 2012 were $20.7 million, an increase of $1.6 million, or 8%, compared to $19.1 million for the nine months ended September 30, 2011. The increase for the three and nine-month periods relates primarily to professional fees associated with distribution agreement renewals, an MFN audit by one of our affiliates, the exploration of business opportunities and succession-related compensation expense, including severance and related compensation expense associated with the departure of one of our senior sales executives and recruiting costs, partially offset by a reduction in our reserve for doubtful accounts.

Depreciation and amortization for the three months ended September 30, 2012 was $306,000, a decrease of $31,000, or 9%, compared to $337,000 for the three months ended September 30, 2011. Depreciation and amortization for the nine months ended September 30, 2012 was $1.0 million, a decrease of $18,000, or 2%, compared to $1.1 million for the nine months ended September 30, 2011. The decrease in depreciation and amortization for the three and nine-month periods primarily relates to more fixed assets becoming fully depreciated over the past year than depreciation on assets acquired in that same period.

Income from Operations

Income from operations for the three months ended September 30, 2012 was $3.8 million, a decrease of $972,000 compared to income of $4.8 million for the three months ended September 30, 2011. Income from operations for the nine months ended September 30, 2012 was $3.5 million, a decrease of $1.7 million compared to income of $5.2 million for the nine months ended September 30, 2011. As discussed above, the decline in our income from operations for the three and nine-month periods were driven primarily by increased advertising and SG&A expenses, and for the nine-month period, increased programming expense.

26

Production Services

Comparison of Operating Results for the Three and Nine Months Ended September 30, 2012 and September 30, 2011

The following table discloses certain financial information for the periods presented, expressed in terms of dollars, dollar change and percentage change (all dollar amounts are in thousands):

	Three Months Ended September 30,												Nine Months Ended September 30,
							Change												Change
	2012			2011			$			%			2012			2011			$			%
Revenues:
Production services	$	2,107		$	3,293		$	(1,186	)		(36	)%	$	4,518		$	6,699		$	(2,181	)		(33	)%
Total revenues		2,107			3,293			(1,186	)		(36	)		4,518			6,699			(2,181	)		(33	)
Cost of services:
Production and operations		1,938			2,658			(720	)		(27	)		4,141			5,795			(1,654	)		(29	)
Total cost of services		1,938			2,658			(720	)		(27	)		4,141			5,795			(1,654	)		(29	)
Other expenses:
Selling, general and administrative		282			630			(348	)		(55	)		807			2,102			(1,295	)		(62	)
Depreciation and amortization		122			128			(6	)		(5	)		376			398			(22	)		(6	)
Total other expenses		404			758			(354	)		(47	)		1,183			2,500			(1,317	)		(53	)
Loss from operations	$	(235	)	$	(123	)	$	(112	)		91	%	$	(806	)	$	(1,596	)	$	790			(50	)%
(percentages may not add due to rounding)

Revenues

Production services revenue for the three months ended September 30, 2012 was $2.1 million, a decrease of $1.2 million, or 36%, as compared to $3.3 million for the three months ended September 30, 2011. Production services revenue for the nine months ended September 30, 2012 was $4.5 million, a decrease of $2.2 million, or 33%, as compared to $6.7 million for the nine months ended September 30, 2011. The decrease in revenue for the three and nine-month periods was due primarily to an expected reduction in the number of third-party production contracts that were renewed at Winnercomm for the current year. Revenues for the remainder of 2012 will continue to decline on a year-over-year basis reflecting the business we cancelled or that was not renewed in 2012.

Cost of Services

Production and operations costs for the three months ended September 30, 2012 were $1.9 million, a decrease of $720,000, or 27%, compared to $2.7 million for the three months ended September 30, 2011. Production and operations costs for the nine months ended September 30, 2012 were $4.1 million, a decrease of $1.7 million, or 29%, compared to $5.8 million for the nine months ended September 30, 2011. The decrease in costs for the three and nine-month periods relates primarily to decreased production costs caused by fewer Winnercomm production contracts being renewed in the current year. Cost of sales for the remainder of 2012 will continue to decline on a year-over-year basis reflecting the business we cancelled or was not renewed in 2011.

Other Expenses

SG&A expenses for the three months ended September 30, 2012 were $282,000, a decrease of $348,000, or 55%, compared to $630,000 for the three months ended September 30, 2011. SG&A expenses for the nine months ended September 30, 2012 were $807,000, a decrease of $1.3 million, or 62%, compared to $2.1 million for the nine months ended September 30, 2011. The decrease for the three and nine-month periods relates primarily to reduced payroll and related compensation costs associated with the elimination and reassignment of personnel in the current year periods as compared to the prior year periods, and to reduced rent and related expenses resulting from the relocation of our Winnercomm business to a new facility in the fall of 2011.

27

Depreciation and amortization for the three months ended September 30, 2012 was $122,000, a decrease of $6,000, or 5%, compared to $128,000 for the three months ended September 30, 2011. Depreciation and amortization for the nine months ended September 30, 2012 was $376,000, a decrease of $22,000, or 6%, compared to $398,000 for the nine months ended September 30, 2011. The decrease in depreciation and amortization for the three and nine-month periods primarily relates to more fixed assets becoming fully depreciated over the past year than depreciation on assets acquired in that same period.

Loss from Operations

Loss from operations for the three months ended September 30, 2012 was $235,000, an increase of $112,000 compared to an operating loss of $123,000 for the three months ended September 30, 2011. Loss from operations for the nine months ended September 30, 2012 was $806,000, an improvement of $790,000 compared to an operating loss of $1.6 million for the nine months ended September 30, 2011. As discussed above, the increase in loss from operations for the three-month period was due primarily to lower revenues and margin partially offset by lower SG&A expenses. The decrease in loss from operations for the nine-month period was due primarily to lower SG&A expenses.

Aerial Cameras

Comparison of Operating Results for the Three and Nine Months Ended September 30, 2012 and September 30, 2011

The following table discloses certain financial information for the periods presented, expressed in terms of dollars, dollar change and percentage change (all dollar amounts are in thousands):

	Three Months Ended September 30,												Nine Months Ended September 30,
							Change												Change
	2012			2011			$			%			2012			2011			$			%
Revenues:
Production services	$	3,351		$	1,642		$	1,709			104	%	$	5,567		$	3,935		$	1,632			42	%
Total revenues		3,351			1,642			1,709			104			5,567			3,935			1,632			42
Cost of services:
Production and operations		2,935			1,322			1,613			122			5,004			3,463			1,541			45
Total cost of services		2,935			1,322			1,613			122			5,004			3,463			1,541			45
Other expenses:
Selling, general and administrative		491			915			(424	)		(46	)		1,483			2,389			(906	)		(38	)
Depreciation and amortization		240			230			10			4			717			679			38			6
Total other expenses		731			1,145			(414	)		(36	)		2,200			3,068			(868	)		(28	)
Loss from operations	$	(315	)	$	(825	)	$	510			(62	)%	$	(1,637	)	$	(2,596	)	$	959			(37	)%
(percentages may not add due to rounding)

Revenues

Production services revenue from our aerial camera unit for the three months ended September 30, 2012 was $3.4 million, an increase of $1.7 million, or 104%, as compared to $1.6 million for the three months ended September 30, 2011. Production services revenue from our aerial camera unit for the nine months ended September 30, 2012 was $5.6 million, an increase of $1.6 million, or 42%, as compared to $3.9 million for the nine months ended September 30, 2011. The increase for the three and nine-month periods was due primarily to revenues from our development project with a prime contractor of the U.S. government and an increase in the number of collegiate sporting events, partially offset by various miscellaneous aerial camera production events that did not reoccur in the current year period.

Cost of Services

Production and operations costs for the three months ended September 30, 2012 were $2.9 million, an increase of $1.6 million, or 122%, compared to $1.3 million for the three months ended September 30, 2011. Production and operations costs for the nine months ended September 30, 2012 were $5.0 million, an increase of $1.5 million, or 45%, compared to $3.5 million for the nine months ended September 30, 2011. The increase in costs for the three and nine-month periods was due primarily to our U.S. government development project, the increased number of collegiate sporting events offset by reduced rent and related facility costs.

28

Other Expenses

SG&A expenses for the three months ended September 30, 2012 were $491,000, a decrease of $424,000, or 46%, compared to $915,000 for the three months ended September 30, 2011. SG&A expenses for the nine months ended September 30, 2012 were $1.5 million, a decrease of $906,000, or 38%, compared to $2.4 million for the nine months ended September 30, 2011. The decrease for the three and nine-month periods relates primarily to decreased legal fees related to the ActionCam litigation.

Depreciation and amortization for the three months ended September 30, 2012 was $240,000, an increase of $10,000, or 4%, compared to $230,000 for the three months ended September 30, 2011. Depreciation and amortization for the nine months ended September 30, 2012 was $717,000, an increase of $38,000, or 6%, compared to $679,000 for the nine months ended September 30, 2011. The increase in depreciation and amortization for the three and nine-month periods primarily relates to increased depreciation of new assets including leasehold improvements at our new location in Ft. Worth, Texas.

Loss from Operations

Loss from operations for the three months ended September 30, 2012 was $315,000, an improvement of $510,000 compared to an operating loss of $825,000 for the three months ended September 30, 2011. Loss from operations for the nine months ended September 30, 2012 was $1.6 million, an improvement of $959,000 compared to an operating loss of $2.6 million for the nine months ended September 30, 2011. As discussed above, the decrease in loss from operations for the three and nine-month periods was due primarily to increased revenues and reductions in SG&A expense.

LIQUIDITY AND CAPITAL RESOURCES

We generated $3.1 million of cash in our operating activities in the nine months ended September 30, 2012, a decrease of $969,000 compared to cash generated from operating activities of $4.0 million in the nine months ended September 30, 2011. The decrease was due primarily to changes in working capital at the Outdoor Channel, including an increase in subscriber acquisition payments, net of improved operating results and lower income taxes paid.

Net cash provided by investing activities was $17.2 million in the nine months ended September 30, 2012 compared to cash used by investing activities of $7.6 million for the nine months ended September 30, 2011. The increase in cash provided by investing activities related principally to net proceeds (sales, net of purchases) of short-term available-for-sale securities in the current nine month period of $20.1 million compared to net purchases of $6.0 million for the nine months ended September 30, 2011, partially offset by an increase of $1.4 million in capital expenditures for fixed assets. We expect that our 2012 full year capital expenditures will be approximately $5.0-$5.5 million, significantly higher than the $2.2 million in capital expenditures for calendar 2011 due to an expansion in our Temecula office facilities and additional camera systems at our Aerial Cameras unit.

Cash used by financing activities was $1.0 million in the nine months ended September 30, 2012 compared to cash used of $900,000 in the nine months ended September 30, 2011. The increase was related to the increase in cash used for the purchase and retirement of common stock as recipients of stock awards used stock to satisfy withholding taxes related to vesting of restricted shares.

On September 5, 2012, the Company renewed its revolving line of credit agreement (the “Revolver”) with U.S. Bank N.A., extending the maturity date to September 5, 2013. The maximum amount which can be drawn upon under the Revolver at any time is $10.0 million. The Revolver provides that the interest rate per annum as selected by us shall be prime rate (3.25% and 3.25% as of September 30, 2012 and 2011, respectively) plus 0.25% or LIBOR (0.25% and 0.25% as of September 30, 2012 and 2011, respectively) plus 2.25%. The Revolver is unsecured. This credit facility contains customary financial and other covenants and restrictions, as amended, including a change of control provision and minimum liquidity metrics. As of September 30, 2012, we did not have any amounts outstanding under this credit facility. This Revolver is guaranteed by TOC and as of September 30, 2012, we were in full compliance with all the covenants of the Revolver.

Our combined cash and cash equivalent and investment in available-for-sale securities balance was $58.7 million at September 30, 2012, a decrease of $805,000 from the combined balance of $59.5 million at December 31, 2011. Net working capital increased to $73.5 million at September 30, 2012 compared to $72.3 million at December 31, 2011. We believe that our combined cash and available-for-sale securities and our expected cash flow from operations will meet our short-term cash flow requirements and be sufficient to fund our operations at current levels and anticipated capital requirements through at least the next twelve months. To the extent that such amounts are insufficient to finance our working capital requirements or we desire to expand operations beyond current levels, we could draw on our Revolver or seek additional financing. There can be no assurance that equity or debt financing will be available if needed or, if available, will be on terms favorable to us.

29

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

At September 30, 2012 and December 31, 2011, we held $5.0 million and $4.9 million, respectively, in our non-current investment portfolio. These investments consist of two auction-rate securities with long-term maturities. Although these securities have rate reset features, they are subject to interest rate risk and will decline in value if interest rates increase. However, due to the amount of our investment portfolio, an immediate 10% change in interest rates would have no material impact on our financial condition, operating results or cash flows.

We currently do not have significant transactions denominated in currencies other than U.S. dollars and as a result we currently have little to no foreign currency exchange rate risk. The effect of an immediate 10% change in foreign exchange rates would have no material impact on our financial condition, operating results or cash flows.

As of September 30, 2012 and as of the date of this report, we did not have any outstanding borrowings. The rate of interest on our line-of-credit is variable, but we currently have no outstanding balance under this credit facility. Because of these reasons, an immediate 10% change in interest rates would have no material, immediate impact on our financial condition, operating results or cash flows.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures. We maintain disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission. Disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure the information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that our system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2012, the end of the period covered by this report. Based on this evaluation, we have concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this report, to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported, completely and accurately, within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. Legal Proceedings.

On September 30, 2012 the US District Court for the Northern District of Oklahoma issued its final court judgment regarding our previously disclosed litigation by SkyCam, LLC against ActionCam, LLC and a former employee of SkyCam. The final judgment incorporated the bench trial opinions, orders and rulings along with the prior jury verdict, whereby, as previously disclosed, the jury found that the former employee of SkyCam breached his separation agreement and that he, along with ActionCam, misappropriated SkyCam’s trade secrets and engaged in unfair competition and awarded SkyCam actual and punitive damages. In addition, judgment was entered in favor of SkyCam and against ActionCam and the former employee of SkyCam for injunctive relief, including but not limited to an order that ActionCam is enjoined from making any false or misleading references to SkyCam’s safety or capabilities in any advertisement, promotion, presentation, website, publication, or statement to potential or actual customers. The court also granted a reasonable royalty to SkyCam for every event operated by ActionCam for the period of time from September 2011 through March 2013. Lastly, the court found in favor of ActionCam regarding SkyCam’s claim for an ownership interest in Patent Application US 2009/0207250 A1 and the resulting Patent, Patent No. US 8,199,197 B2. On October 29, 2012, ActionCam and the former employee of SkyCam filed a motion for a new trial with the US District Court for the Northern District of Oklahoma. The judge has not yet issued his ruling with respect to the motion for a new trial.

From time to time we are involved in litigation as both plaintiff and defendant arising in the ordinary course of business. In the opinion of management, the results of any pending litigation should not have a material adverse effect on our consolidated financial position or operating results.

ITEM 1A. Risk Factors.

“Item 1A. Risk Factors” of our Form 10-K includes a discussion of our risk factors. There have been no material changes from the risk factors described in our 2011 Annual Report.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

ITEM 3. Defaults Upon Senior Securities.

None.

30

ITEM 4. Mine Safety Disclosures.

None.

ITEM 5. Other Information.

The Company, in the ordinary course of its business, extended each of its Affiliation Agreements with Satellite Services, Inc. (“Comcast”) and the National Cable Television Cooperative, Inc., effective as of October 1, 2012.

31

ITEM 6. Exhibits.

Exhibit Number	Description
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 and Exhibit 4.1 to the Company’s Form 10-Q for the period ended September 30, 2005)
31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934
31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934
32.1 *	Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 *	Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 **	The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at September 30, 2012 and December 31, 2011; (ii) Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2012 and 2011; (iii) Unaudited Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2012 and 2011; (iv) Unaudited Condensed Consolidated Statement of Equity for the nine months ended September 30, 2012; (v) Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements, tagged as blocks of text.

* 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.

** Users of this data are advised that pursuant to Rule 406T of Regulation S-T, this XBRL information is being furnished and not filed herewith for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and Sections 11 or 12 of the Securities Act of 1933, as amended, and is not to be incorporated by reference into any filing, or part of any registration statement or prospectus, of Outdoor Channel Holdings, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

OUTDOOR CHANNEL HOLDINGS, INC.

/s/ Thomas D. Allen

Thomas D. Allen

Authorized Officer, Chief Financial Officer and

Principal Accounting Officer

Date: November 9, 2012

32

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Thomas E. Hornish, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Outdoor Channel Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2012	/s/ Thomas E. Hornish
	Thomas E. Hornish, Chief Executive Officer

33

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Thomas D. Allen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Outdoor Channel Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2012	/s/ Thomas D. Allen
	Thomas D. Allen, Chief Financial Officer

34

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Outdoor Channel Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas E. Hornish, Chief Executive Officer of the Company, certify, to the best of my knowledge, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thomas E. Hornish

Thomas E. Hornish

Chief Executive Officer

November 9, 2012

A signed original of this written statement required by Section 906 has been provided to Outdoor Channel Holdings, Inc. and will be retained by Outdoor Channel Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

35

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Outdoor Channel Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas D. Allen, Chief Financial Officer of the Company, certify, to the best of my knowledge, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thomas D. Allen

Thomas D. Allen

Chief Financial Officer

November 9, 2012

A signed original of this written statement required by Section 906 has been provided to Outdoor Channel Holdings, Inc. and will be retained by Outdoor Channel Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

36

XML

Investments in Available-for-Sale Securities (Details 1) (Significant Level 3 inputs [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Significant Level 3 inputs [Member]
Auction-Rate Securities:
Balance at beginning of period	$ 4,967	$ 4,940
Unrealized gain included in accumulated other comprehensive income	13	40
Balance at ending of period	$ 4,980	$ 4,980

XML

Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		1 Months Ended		3 Months Ended		9 Months Ended		1 Months Ended	3 Months Ended		9 Months Ended		1 Months Ended		3 Months Ended		9 Months Ended		1 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Musk Ox Properties LP [Member]	Jan. 31, 2011 Musk Ox Properties LP [Member]	Sep. 30, 2012 Musk Ox Properties LP [Member]	Sep. 30, 2011 Musk Ox Properties LP [Member]	Sep. 30, 2012 Musk Ox Properties LP [Member]	Sep. 30, 2011 Musk Ox Properties LP [Member]	Sep. 30, 2012 Case and Associates Properties Inc [Member]	Sep. 30, 2012 Case and Associates Properties Inc [Member]	Sep. 30, 2011 Case and Associates Properties Inc [Member]	Sep. 30, 2012 Case and Associates Properties Inc [Member]	Sep. 30, 2011 Case and Associates Properties Inc [Member]	May 31, 2012 WATV LLC [Member]	Oct. 31, 2010 WATV LLC [Member]	Sep. 30, 2012 WATV LLC [Member]	Sep. 30, 2011 WATV LLC [Member]	Sep. 30, 2012 WATV LLC [Member]	Sep. 30, 2011 WATV LLC [Member]	Dec. 31, 2011 Gold Prospectors Association of America LLC [Member]	Sep. 30, 2012 Gold Prospectors Association of America LLC [Member]	Mar. 31, 2012 Gold Prospectors Association of America LLC [Member]	Sep. 30, 2012 Gold Prospectors Association of America LLC [Member] Contract
Related Party Transaction (Textual) [Abstract]
Monthly rent payments	$ 690	$ 828	$ 2,018	$ 2,356	$ 19		$ 57	$ 57	$ 172	$ 172	$ 43	$ 71	$ 88	$ 205	$ 223
Rent paid												125	129	415	381
Lease agreement term									5 years					10 years
Lease agreement expired									Dec. 31, 2010					May 31, 2016								Dec. 31, 2012
Extended lease agreement expired						Jan. 31, 2013
Total contract value of produce one off-road motorsport series																	390
Contractual amount																538
Payment of WATV related to production of programs																		230	120	405	357
Payment description for increasing commercial air time.																									we extended the license period of this show and agreed to pay $25 per quarter in exchange for increased commercial air time to be sold and retained by the Company
Payment made for extended license period																								25
Payment to gold prospectors for license fee																							25		75
Payment related to gold prospectors agreement																							$ 80		$ 80
Number of licensed episodes																									18

XML

Accounts Payable and Accrued Expenses (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Accounts payable and accrued expenses
Trade accounts payable	$ 1,185	$ 1,951
Accrued payroll and related expenses	3,402	3,627
Estimated make-good accrual	1,156	1,575
Estimated most - favored nation accrual	2,003	2,003
Accrued launch support commitment		488
Accrued expenses	6,210	2,780
Total	$ 13,956	$ 12,424

XML

Stock Incentive Plans (Details 4) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Summary of status of RSUs
Number of Restricted Stock Units, Granted	0	0
RSUs [Member]
Summary of status of RSUs
Number of Restricted Stock Units, RSUs outstanding at beginning of period	123,000
Weighted Average Grant Date Fair Value Nonvested at beginning of period	5.70
Number of Restricted Stock Units, Granted	93,000
Weighted Average Grant-Date Fair value , Granted	6.45
Shares, Vested	(89,000)
Weighted Average Grant-Date Fair value, Vested	6.40
Number of Restricted Stock Units, Forfeited
Weighted Average Grant-Date Fair value, Forfeited
Number of Restricted Stock Units, RSUs outstanding at Ending of period	127,000
Weighted Average Grant-Date Fair value Nonvested at end of period	5.76

XML

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets [Abstract]

Intangible assets that subject to amortization

	September 30, 2012
	Gross		Accumulated Amortization		Net
Trademark	$	219	$	219	$	—
Internet domain names		173		160		13
Customer relationships		980		793		187
Patents		90		70		20
Total amortizable intangible assets	$	1,462	$	1,242	$	220

Estimated future amortization expense

Years Ending December 31,	Amount
2012 (remaining 3 months)	$	50
2013		165
2014		5
Total	$	220

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Information with respect to reportable segments
Revenues	$ 21,331	$ 18,925	$ 51,929	$ 48,264
Income (Loss) from Operations	3,231	3,518	1,151	756
Total Assets	152,662		152,662		149,186
Depreciation and amortization	668	695	2,137	2,139
TOC [Member]
Information with respect to reportable segments
Revenues	16,970	15,750	43,697	40,390
Income (Loss) from Operations	3,800	4,772	3,529	5,238
Total Assets	79,406		79,406		77,771
Depreciation and amortization	306	337	1,044	1,062
Production Services [Member]
Information with respect to reportable segments
Revenues	2,107	3,293	4,518	6,699
Income (Loss) from Operations	(235)	(123)	(806)	(1,596)
Total Assets	8,069		8,069		7,063
Depreciation and amortization	122	128	376	398
Aerial Cameras [Member]
Information with respect to reportable segments
Revenues	3,351	1,642	5,567	3,935
Income (Loss) from Operations	(315)	(825)	(1,637)	(2,596)
Total Assets	9,154		9,154		7,954
Depreciation and amortization	240	230	717	679
Corporate Assets [Member]
Information with respect to reportable segments
Total Assets	56,266		56,266		56,696
Eliminations [Member]
Information with respect to reportable segments
Revenues	(1,097)	(1,760)	(1,853)	(2,760)
Income (Loss) from Operations	(19)	(306)	65	(290)
Total Assets	$ (233)		$ (233)		$ (298)

XML

Goodwill and Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Intangible assets that subject to amortization
Gross	$ 1,462
Accumulated Amortization	1,242
Total, Net	220	378
Trademarks [Member]
Intangible assets that subject to amortization
Gross	219
Accumulated Amortization	219
Internet Domain Names [Member]
Intangible assets that subject to amortization
Gross	173
Accumulated Amortization	160
Total, Net	13
Customer relationships [Member]
Intangible assets that subject to amortization
Gross	980
Accumulated Amortization	793
Total, Net	187
Patents [Member]
Intangible assets that subject to amortization
Gross	90
Accumulated Amortization	70
Total, Net	$ 20

XML

Earnings (Loss) Per Common Share (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Earnings (Loss) Per Common Share (Textual) [Abstract]
Shares of common stock not included in the calculation of diluted loss per share	250,000	965,000	250,000	973,000

XML

Income Tax Provision (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Income tax provision (Textual) [Abstract]
Federal income tax rate	34.00%	34.00%

XML

Stock Incentive Plans

9 Months Ended

Sep. 30, 2012

Stock Incentive Plans [Abstract]

STOCK INCENTIVE PLANS

NOTE 2—STOCK INCENTIVE PLANS

The measurement and recognition of compensation expense is recognized in the financial statements over the service period for the fair value of all awards granted after January 1, 2006. Our stock incentive plans provide for the granting of qualified and nonqualified options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights (“SARs”) and performance units to our officers, directors and employees. We satisfy the exercise of options and awards of restricted stock by issuing previously unissued common shares. We have not awarded any SARs but have awarded options, performance units, restricted stock and RSUs.

We have two stock incentive plans: our 2004 Long-Term Incentive Plan (“LTIP Plan”) and our Non-Employee Director Stock Option Plan (“NEDSOP”). No more options will be issued under the NEDSOP Plan. All awards issued under our plans are subject to terms and conditions as determined by our Board of Directors.

Our Board of Directors has discretion to allow our employees and directors to forego shares in lieu of paying requisite withholding taxes on vested restricted shares. In turn, we remit to the appropriate taxing authorities the U.S. Federal and state withholding taxes on the total compensation the employees have realized as a result of the vesting of these shares. During the three and nine months ended September 30, 2012, approximately 24,000 and 141,000 shares were repurchased with a market value of approximately $167 and $1,013, respectively.

2004 Long-Term Incentive Plan (“LTIP Plan”). During 2005 through September 30, 2012, all options to purchase common stock, restricted stock awards, restricted stock units and performance units to our employees and Board of Directors were issued under the LTIP Plan. Options granted under the LTIP Plan expire five years from the date of grant and typically vest equally over four years. Restricted stock awards granted under the LTIP Plan do not expire, but are surrendered upon termination of employment or services to the extent unvested. These awards generally vest quarterly over two to four years, however, some awards vest annually. RSUs vest over one year and, upon satisfaction of the service vesting requirement, the holder is entitled to the issuance of the underlying shares provided the holder has not elected to defer settlement, and will have compensation income equal to that value. Performance units vest based upon criteria established at the time of grant. Options or awards that are surrendered or cease to be exercisable continue to be available for future grant under the LTIP Plan. There are 4,050,000 shares of common stock reserved for issuance under the LTIP Plan. As of September 30, 2012, there were 732,614 restricted shares and 127,442 RSUs outstanding and there were no performance unit shares or options to purchase shares of common stock outstanding. There were 989,649 shares of common stock available for future grant as of September 30, 2012.

Non-Employee Director Stock Option Plan (“NEDSOP”). Under the NEDSOP, nonqualified stock options to purchase common stock were granted to two of our current non-employee directors. Options granted under the NEDSOP expire 10 years from the date of grant. These grants are generally exercisable 40% after the first 3 months of service and 20% on the first anniversary of appointment and each anniversary thereafter until 100% vested. The NEDSOP has 1,000,000 shares of common stock reserved for issuance. As of September 30, 2012, options to purchase 250,000 shares of common stock were outstanding and no further option grants can be issued under this plan.

The fair value of the shares and options, adjusted for a forfeiture assumption, at the respective dates of grant (which represents deferred compensation not required to be recorded initially in the consolidated balance sheet) is amortized to share-based compensation expense as the rights to the restricted stock and options vest with an equivalent amount added to additional paid-in capital. Changes to forfeiture assumptions are based on actual experience and are recorded in accordance with the rules related to accounting for changes in estimates. The fair value of nonvested shares for grants is determined based on the closing trading price of our shares on the grant date.

The following tables summarize share-based compensation expense for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Nature of Award:
Restricted stock	$	734	$	624	$	2,137	$	1,901
RSUs		152		151		440		450
Total share-based compensation expense	$	886	$	775	$	2,577	$	2,351

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Classification of Compensation Expense:
Cost of services:
Production and operations	$	67	$	59	$	184	$	178
Other expenses:
Selling, general and administrative		819		716		2,393		2,173
Total share-based compensation expense	$	886	$	775	$	2,577	$	2,351

Stock Options

A summary of the status of the options granted under our stock incentive plans as of September 30, 2012 and the changes in options outstanding during the nine months then ended is as follows:

Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Yrs.)		Aggregate Intrinsic Value
	(in thousands)						(in thousands)
Outstanding at beginning of period		250	$	12.65		2.00	$	—
Granted		—		—
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding at end of period		250	$	12.65		1.26	$	—
Vested or expected to vest at end of period		250	$	12.65		1.26	$	—
Exercisable at end of period		250	$	12.65		1.26	$	—

Additional information regarding options outstanding for all plans as of September 30, 2012 is as follows:

	Options Outstanding							Options Exercisable
Exercise Prices	Number Outstanding			Weighted Average Remaining Contractual Term (Yrs.)		Weighted Average Exercise Price		Number Exercisable			Weighted Average Exercise Price
		(in thousands	)						(in thousands	)
$12.50		125			1.22	$	12.50		125		$	12.50
$12.80		125			1.30		12.80		125			12.80
Total		250			1.26	$	12.65		250		$	12.65

There were no options granted during the nine months ended September 30, 2012 or 2011.

Restricted Stock

A summary of the status of our nonvested restricted shares as of September 30, 2012 and the changes in restricted shares outstanding during the nine months then ended is as follows:

	Nine Months Ended September 30, 2012
	Shares			Weighted Average Grant-Date Fair Value
	(in thousands)
Nonvested at beginning of period		521		$	6.88
Granted		558			7.25
Vested		(330	)		7.25
Forfeited		(16	)		6.21
Nonvested at end of period		733		$	7.01

During the nine months ended September 30, 2012 and 2011, we issued 558,000 and 146,000 shares, respectively, of restricted stock to employees while 16,000 and 11,000 shares, respectively, of restricted stock were forfeited due to employee turnover.

Restricted Stock Units

A summary of the status of our RSUs as of September 30, 2012 and the changes in RSUs outstanding during the nine months then ended is as follows:

	Nine Months Ended September 30, 2012
	Number of Restricted Stock Units			Weighted Average Grant-Date Fair Value
	(in thousands)
RSUs outstanding at beginning of period		123		$	5.70
Granted		93			6.45
Vested		(89	)		6.40
Forfeited		—			—
Nonvested at end of period		127		$	5.76

As of September 30, 2012, the vesting and settlement of two grants totaling 34,418 RSUs were deferred at the election of its holder.

Expense to be Recognized

Expense associated with our share-based compensation plans yet to be recognized as compensation expense over the employees’ and non-executive directors’ remaining requisite service periods as of September 30, 2012 are as follows:

	September 30, 2012
	Expense Yet to be Recognized		Weighted Average Remaining Requisite Service Periods
Restricted stock	$	3,734		1.9 years
RSUs		398		0.7 year
Total	$	4,132		1.7 years

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Goodwill and Intangible Assets (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Estimated future amortization expense
2012 (remaining 3 months)	$ 50
2013	165
2014	5
Total, Net	$ 220	$ 378

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Stock Incentive Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Summary of share-based compensation expense
Total share-based compensation expense	$ 886	$ 775	$ 2,577	$ 2,351
Production and operations [Member]
Summary of share-based compensation expense
Total share-based compensation expense	67	59	184	178
Selling, general and administrative [Member]
Summary of share-based compensation expense
Total share-based compensation expense	819	716	2,393	2,173
Restricted stock [Member]
Summary of share-based compensation expense
Total share-based compensation expense	734	624	2,137	1,901
RSUs [Member]
Summary of share-based compensation expense
Total share-based compensation expense	$ 152	$ 151	$ 440	$ 450

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Organization and Business (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Aug. 31, 2011
Organization and business (Textual) [Abstract]
Funding of venture costs		100.00%
MLF [Member]
Organization and business (Textual) [Abstract]
Ownership interest joint venture		50.00%
Contribution toward Subsidiary	$ 1.9
PBT [Member]
Organization and business (Textual) [Abstract]
Contribution toward Subsidiary	$ 0

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Goodwill and Intangible Assets (Details Textual) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012 Number	Sep. 30, 2011
Goodwill and Intangible Assets (Textual) [Abstract]
Weighted average amortization period	1 year 2 months 12 days
Impairment for goodwill and other intangible assets	$ 0
Amortization expense related to intangible assets	$ 158	$ 165
Number of reporting segments	3
Reporting units acquisition date	Jan. 12, 2009

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Stock Incentive Plans (Details 1) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012
Summary of status of options granted under our stock incentive plans
Outstanding at beginning of period, Shares	250,000		0
Beginning Balance, Weighted average exercise price	$ 12.65
Outstanding at beginning of period weighted average contractual term	1 year 3 months 4 days	2 years
Outstanding at beginning of period aggregate intrinsic value
Granted shares
Granted weighted average exercise price
Exercised shares
Exercised weighted average exercise price
Forfeited shares
Forfeited weighted average exercise price
Expired shares
Expired weighted average exercise price
Outstanding at end of period , Shares	250,000
Outstanding at end of period, Weighted average exercise price	$ 12.65
Outstanding at ending of period weighted average contractual term	1 year 3 months 4 days	2 years
Outstanding at end of period aggregate intrinsic value
Vested or expected to vest at end of period shares	250,000
Vested or expected to vest at end of period Weighted Average Exercise Price	$ 12.65
Vested or expected to vest at end of period Weighted Average Remaining Contractual Term	1 year 3 months 4 days
Vested or expected to vest at end of period Exercisable, Aggregate Intrinsic Value
Exercisable at end of period shares	250,000
Option Exercisable at end of period, Weighted Average Exercise Price	$ 12.65
Exercisable at end of period weighted average contractual term	1 year 3 months 4 days
Exercisable at end of period aggregate intrinsic value

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Stock Incentive Plans (Details 2) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Additional information regarding options outstanding for all plans
Number of options Outstanding	250
Number of options, Outstanding Weighted Average Remaining Contractual Term	1 year 3 months 4 days
Number of options, Outstanding Weighted Average Exercise Price	$ 12.65
Option Exercisable at end of period, Number of Option	250
Option Exercisable at end of period, Weighted Average Exercise Price	$ 12.65
Range One [Member]
Additional information regarding options outstanding for all plans
Lower Range of Exercise Prices	$ 12.50
Number of options Outstanding	125
Number of options, Outstanding Weighted Average Remaining Contractual Term	1 year 2 months 19 days
Number of options, Outstanding Weighted Average Exercise Price	$ 12.50
Option Exercisable at end of period, Number of Option	125
Option Exercisable at end of period, Weighted Average Exercise Price	$ 12.50
Range Two [Member]
Additional information regarding options outstanding for all plans
Upper Range of Exercise Prices	$ 12.80
Number of options Outstanding	125
Number of options, Outstanding Weighted Average Remaining Contractual Term	1 year 3 months 18 days
Number of options, Outstanding Weighted Average Exercise Price	$ 12.80
Option Exercisable at end of period, Number of Option	125
Option Exercisable at end of period, Weighted Average Exercise Price	$ 12.80

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Organization and Business

9 Months Ended

Sep. 30, 2012

Organization and Business [Abstract]

ORGANIZATION AND BUSINESS

NOTE 1—ORGANIZATION AND BUSINESS

Description of Operations

Outdoor Channel Holdings, Inc. (“Outdoor Channel Holdings”) is incorporated under the laws of the State of Delaware. Collectively, with its subsidiaries and consolidated affiliate, the terms “we,” “us,” “our” and the “Company” refer to Outdoor Channel Holdings, Inc. as a consolidated entity, except where noted or where the context makes clear the reference is only to Outdoor Channel Holdings, Inc. or one of our subsidiaries. Outdoor Channel Holdings, Inc. wholly owns OC Corporation which in turn wholly owns The Outdoor Channel, Inc. (“TOC”). Outdoor Channel Holdings is also the sole member of 43455 BPD, LLC, which is the entity that owns the building that houses our broadcast facility. TOC operates Outdoor Channel, which is a national television network devoted to traditional outdoor activities, such as hunting, fishing and shooting sports, as well as off-road motor sports and other related lifestyle programming. Outdoor Channel Holdings also wholly owns Winnercomm, Inc., which is referred to as “Production Services”. The Production Services business relates to the production, development and marketing of sports programming. Winnercomm, Inc. wholly owns CableCam, LLC and SkyCam, LLC which comprise our Aerial Camera business. The Aerial Camera business is engaged in providing aerial camera services for customer owned telecasts.

In August 2011, the Company entered into an agreement with Professional Bass Tour, Inc. (“PBT”) to establish Major League Fishing LLC (“MLF”), a joint venture created to produce a new style of professional competitive bass fishing tournaments to air on the Outdoor Channel. The Company is a 50% owner in MLF, controls the venture’s board of managers and will fund 100% of the costs of the venture via preferred capital contributions bearing a priority return which must be redeemed before MLF can make profit distributions. Accordingly, the Company is deemed the primary beneficiary and MLF is being treated as a variable interest entity, as defined by ASC 810, and MLF has been consolidated in our accompanying financial statements. Profits shall be allocated pro rata in proportion to the number of membership interests of MLF and losses shall be allocated in a similar proportionate manner but only while a member’s capital account is positive. Losses in excess of a member’s capital are not allocated to such members but will be only allocated to the Company. As of September 30, 2012, the Company has contributed approximately $1.9 million to MLF, and no cash amounts have been contributed by PBT. MLF recorded a loss for the three and nine months ended September 30, 2012.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial position of the Company as of September 30, 2012 and its results of operations and cash flows for the three and nine months ended September 30, 2012 and 2011. Pursuant to the rules and regulations of the Securities and Exchange Commission, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted from these financial statements. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission on March 9, 2012 (the “2011 Annual Report”).

Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012, especially given the seasonality of our business. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities as of the dates of the condensed consolidated balance sheets and reported amounts of revenues and expenses for the periods presented. Accordingly, actual results could materially differ from those estimates.

Our revenues include advertising fees from advertisements aired on Outdoor Channel, including fees paid by outside producers to purchase advertising time in connection with the airing of their programs on Outdoor Channel, and subscriber fees paid by cable, telephone companies and satellite service providers that air Outdoor Channel. Production services revenue includes revenue from advertising fees, revenue from production and aerial camera services for customer-owned telecasts, and revenue from website design, management, marketing and hosting services.

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Stock Incentive Plans (Details 3) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Summary of status of nonvested restricted shares
Shares, Granted	0	0
Restricted stock [Member]
Summary of status of nonvested restricted shares
Number of Restricted Stock Units, RSUs outstanding at beginning of period	521,000
Weighted Average Grant Date Fair Value Nonvested at beginning of period	6.88
Shares, Granted	558,000
Weighted Average Grant-Date Fair value , Granted	7.25
Shares, Vested	(330,000)
Weighted Average Grant-Date Fair value, Vested	7.25
Restricted stock forfeited	(16,000)	(11,000)
Weighted Average Grant-Date Fair value, Forfeited	6.21
Number of Restricted Stock Units, RSUs outstanding at Ending of period	733,000
Weighted Average Grant-Date Fair value Nonvested at end of period	7.01

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Investments in Available-for-Sale Securities (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Interest income which recorded in interest and other income, net
Interest income	$ 44	$ 24	$ 121	$ 86
Interest expense	(21)	(26)	(61)	(71)
Total interest and other income, net	$ 23	$ (2)	$ 60	$ 15

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 38,778	$ 19,498
Investments in available-for-sale securities	19,964	40,049
Accounts receivable, net of allowance for doubtful accounts of $788 and $949	14,400	13,657
Income taxes	336	3
Deferred tax assets, net	1,817	2,168
Programming and production costs	9,845	6,020
Subscriber acquisition fees, current portion	421	1,523
Other current assets	4,209	4,352
Total current assets	89,770	87,270
Property, plant and equipment, net	13,346	11,875
Amortizable intangible assets, net	220	378
Goodwill	43,160	43,160
Investments in auction-rate securities	4,980	4,940
Deferred tax assets, net	826	754
Subscriber acquisition fees, net of current portion	105	421
Deposits and other assets	255	388
Totals	152,662	149,186
Current liabilities:
Accounts payable and accrued expenses	13,956	12,424
Deferred revenue	1,781	634
Deferred obligations, current portion	83	49
Unfavorable lease, current portion	174	163
Income taxes payable	288	1,685
Total current liabilities	16,282	14,955
Deferred obligations	259	224
Unfavorable lease	549	682
Total liabilities	17,090	15,861
Commitments and contingencies
Equity:
Preferred stock, $0.001 par value; 25,000 shares authorized; none issued
Common stock, $0.001 par value; 75,000 shares authorized; 25,950 and 25,461 shares issued and outstanding	26	25
Additional paid-in capital	171,103	169,540
Accumulated other comprehensive loss	(247)	(287)
Accumulated deficit	(35,310)	(35,953)
Total stockholders' equity	135,572	133,325
Noncontrolling interest
Totals	$ 152,662	$ 149,186

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Lines of Credit (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended					9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012 Prime Rate [Member]	Sep. 30, 2011 Prime Rate [Member]	Sep. 30, 2012 LIBOR [Member]	Sep. 30, 2011 LIBOR [Member]	Sep. 30, 2012 Revolving Credit Facility [Member]	Sep. 05, 2012 Revolving Credit Facility [Member]
Lines of Credit (Textual) [Abstract]
Revolving line of credit agreement maturity date						Sep. 05, 2013
Revolving line of credit agreement							$ 10,000
Revolver provides interest rate per annum		3.25%	3.25%	0.25%	0.25%
Revolver provides interest rate per annum, Plus		0.25%		2.25%
Revolver provides interest rate per annum	Prime rate, LIBOR
Amounts outstanding under credit facility						$ 0

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Condensed Consolidated Statements of Equity (Unaudited) (USD $) In Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total Stockholders' Equity	Non- controlling Interest
Beginning balance at Dec. 31, 2011	$ 133,325	$ 25	$ 169,540	$ (287)	$ (35,953)	$ 133,325
Beginning balance, shares at Dec. 31, 2011		25,461
Net income	643				643	643
Unrealized gain on available-for-sale and auction-rate securities	40			40		40
Issuance of restricted stock to employees for services to be rendered, net of forfeited shares, shares		630
Issuance of restricted stock to employees for services to be rendered, net of forfeited shares		1	(1)
Share-based employee and director compensation expense	2,577		2,577			2,577
Purchase and retirement of common stock related to employee and director share-based compensation activity, shares		(141)
Purchase and retirement of common stock related to employee and director share-based compensation activity	(1,013)		(1,013)			(1,013)
Cash contribution of noncontrolling interest
Ending balance at Sep. 30, 2012	$ 135,572	$ 26	$ 171,103	$ (247)	$ (35,310)	$ 135,572
Ending balance, shares at Sep. 30, 2012		25,950

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Stock Incentive Plans (Details Textual) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012 Number	Sep. 30, 2012 Number	Sep. 30, 2011	Dec. 31, 2011
Stock Incentive Plans (Additional Textual) [Abstract]
Shares repurchased during period, Shares	24,000	141,000
Stock repurchased during period, market value	$ 167	$ 1,013
Restricted stock units under long term incentive plan vesting period quarterly minimum		2 years
Restricted stock units under long term incentive plan vesting period quarterly maximum		4 years
Shares, Granted		0	0
Number of option to purchase shares of common stock outstanding	0	0		250,000
Number of incentive plans	2	2
Restricted stock [Member]
Stock Incentive Plans (Textual) [Abstract]
Restricted shares outstanding (Nonvested shares)	733,000	733,000		521,000
Restricted stock issued		558,000	146,000
Restricted stock forfeited		16,000	11,000
Stock Incentive Plans (Additional Textual) [Abstract]
Shares, Granted		558,000
RSUs [Member]
Stock Incentive Plans (Textual) [Abstract]
RSUs vesting period subjected to conditions		1 year
Restricted shares outstanding (Nonvested shares)	127,000	127,000		123,000
Restricted stock forfeited
Vesting and settlement of two grants	34,418	34,418
Stock Incentive Plans (Additional Textual) [Abstract]
Shares, Granted		93,000
Performance Shares [Member]
Stock Incentive Plans (Textual) [Abstract]
Restricted shares outstanding (Nonvested shares)	0	0
Long Term Incentive Plan [Member]
Stock Incentive Plans (Textual) [Abstract]
Options granted under the LTIP plan expire from the date of grant	5 years
Common stock reserved for issuance under the LTIP Plan	4,050,000	4,050,000
Shares of common stock available for future grant	989,649	989,649
Long Term Incentive Plan [Member] | Restricted stock [Member]
Stock Incentive Plans (Textual) [Abstract]
Restricted shares outstanding (Nonvested shares)	732,614	732,614
Long Term Incentive Plan [Member] | RSUs [Member]
Stock Incentive Plans (Textual) [Abstract]
Restricted shares outstanding (Nonvested shares)	127,442	127,442
Long Term Incentive Plan [Member] | Stock Options [Member]
Stock Incentive Plans (Textual) [Abstract]
RSUs vesting period subjected to conditions	4 years
Non Employee Director Stock Options Plan NEDSOP [Member]
Stock Incentive Plans (Textual) [Abstract]
Options granted under the LTIP plan expire from the date of grant		10 years
Grants generally exercisable after first three months of service		40.00%
Grants generally exercisable on first anniversary of appointment		20.00%
Grants generally exercisable on first anniversary of appointment and each anniversary thereafter		100.00%
Common stock reserved for issuance	1,000,000	1,000,000
Non Employee Director Stock Options Plan NEDSOP [Member] | Stock Options [Member]
Stock Incentive Plans (Textual) [Abstract]
Restricted shares outstanding (Nonvested shares)	250,000	250,000

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Stock Incentive Plans (Tables)

9 Months Ended

Sep. 30, 2012

Stock Incentive Plans [Abstract]

Share-based compensation expense

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Nature of Award:
Restricted stock	$	734	$	624	$	2,137	$	1,901
RSUs		152		151		440		450
Total share-based compensation expense	$	886	$	775	$	2,577	$	2,351

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Classification of Compensation Expense:
Cost of services:
Production and operations	$	67	$	59	$	184	$	178
Other expenses:
Selling, general and administrative		819		716		2,393		2,173
Total share-based compensation expense	$	886	$	775	$	2,577	$	2,351

Summary of status of options granted under our stock incentive plans

Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Yrs.)		Aggregate Intrinsic Value
	(in thousands)						(in thousands)
Outstanding at beginning of period		250	$	12.65		2.00	$	—
Granted		—		—
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding at end of period		250	$	12.65		1.26	$	—
Vested or expected to vest at end of period		250	$	12.65		1.26	$	—
Exercisable at end of period		250	$	12.65		1.26	$	—

Additional information regarding options outstanding for all plans

	Options Outstanding							Options Exercisable
Exercise Prices	Number Outstanding			Weighted Average Remaining Contractual Term (Yrs.)		Weighted Average Exercise Price		Number Exercisable			Weighted Average Exercise Price
		(in thousands	)						(in thousands	)
$12.50		125			1.22	$	12.50		125		$	12.50
$12.80		125			1.30		12.80		125			12.80
Total		250			1.26	$	12.65		250		$	12.65

Summary of status of nonvested restricted shares

	Nine Months Ended September 30, 2012
	Shares			Weighted Average Grant-Date Fair Value
	(in thousands)
Nonvested at beginning of period		521		$	6.88
Granted		558			7.25
Vested		(330	)		7.25
Forfeited		(16	)		6.21
Nonvested at end of period		733		$	7.01

Summary of status of RSUs

	Nine Months Ended September 30, 2012
	Number of Restricted Stock Units			Weighted Average Grant-Date Fair Value
	(in thousands)
RSUs outstanding at beginning of period		123		$	5.70
Granted		93			6.45
Vested		(89	)		6.40
Forfeited		—			—
Nonvested at end of period		127		$	5.76

Expense associated with share-based compensation plans yet to be recognized

	September 30, 2012
	Expense Yet to be Recognized		Weighted Average Remaining Requisite Service Periods
Restricted stock	$	3,734		1.9 years
RSUs		398		0.7 year
Total	$	4,132		1.7 years

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Earnings (Loss) Per Common Share (Details) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Summary of reconciliation of basic and diluted number of weighted average shares outstanding
Weighted average shares used to calculate basic earnings per share	25,421	24,874	25,106	24,791
Dilutive effect of potentially issuable common shares upon exercise of dilutive stock options, performance units, unvested restricted stock and stock units	593	760	601	818
Weighted average shares used to calculate diluted earnings per share	26,014	25,634	25,707	25,609

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Investments in Available-for-Sale Securities (Tables)

9 Months Ended

Sep. 30, 2012

Investments in Available-for-Sale-Securities [Abstract]

Fair Value Asset and Liabilities measured on recurring and non recurring basis

	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents (1)	$	38,778	$	15,782	$	22,996	$	—
Investments in available-for-sale securities (2)		19,964		6,000		13,964		—
Non-current investments in auction-rate securities (3)		4,980		—		—		4,980
Total	$	63,722	$	21,782	$	36,960	$	4,980

⁽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 treasury bills and money market funds, we determine fair value through publicly available quoted market prices. For commercial paper, we determine fair value through third-party pricing sources using proprietary valuation models and other techniques that utilize market observable inputs.

⁽²⁾ Investments in available-for-sale securities consist of treasury bills, commercial paper and tax-exempt government securities with original maturity dates in excess of three months, for which we determine fair value through quoted market prices (Level 1) or through observable inputs, such as quoted prices for similar assets in markets that are not active or other inputs that are directly or indirectly observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For commercial paper with original maturity dates in excess of three months, we determine fair value through third-party pricing sources using proprietary valuation models and other techniques that utilize market observable inputs.

⁽³⁾ Investments in auction-rate securities consist of one auction-rate municipal security and one closed-end perpetual preferred auction-rate security. We use a discounted cash flow analysis to more accurately measure possible liquidity discounts.

Fair value measurements using significant Level 3 inputs

	Three Months Ended September 30, 2012		Nine Months Ended September 30, 2012
Auction-Rate Securities:
Balance at beginning of period	$	4,967	$	4,940
Unrealized gain included in accumulated other comprehensive income		13		40
Balance as of September 30, 2012	$	4,980	$	4,980

Interest income which recorded in interest and other income, net

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Interest income	$	44		$	24		$	121		$	86
Interest expense		(21	)		(26	)		(61	)		(71	)
Total interest and other income, net	$	23		$	(2	)	$	60		$	15

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Operating activities:
Net income	$ 643	$ 390
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,137	2,139
Amortization of subscriber acquisition fees	1,431	1,166
Loss on sale of equipment	17	31
Provision for doubtful accounts		123
Share-based employee and director compensation	2,577	2,351
Deferred tax provision, net	279	342
Changes in operating assets and liabilities:
Accounts receivable	(743)	4,841
Income tax receivable and payable, net	(1,730)	(2,685)
Programming and production costs	(3,825)	(775)
Other current assets	143	(1,730)
Deposits and other assets	103	97
Subscriber acquisition fees	(500)	(191)
Accounts payable and accrued expenses	1,424	(3,562)
Deferred revenue	1,147	1,586
Deferred obligations	69	7
Unfavorable lease obligations	(122)	(111)
Net cash provided by operating activities	3,050	4,019
Investing activities:
Purchases of property, plant and equipment	(2,980)	(1,531)
Purchase of intangibles		(85)
Proceeds from sale of equipment	138
Purchases of available-for-sale securities	(53,268)	(64,570)
Proceeds from sale of available-for-sale and auction-rate securities	73,353	58,618
Net cash provided by (used in) investing activities	17,243	(7,568)
Financing activities:
Purchase of common stock	(1,013)	(900)
Net cash used in financing activities	(1,013)	(900)
Net increase (decrease) in cash and cash equivalents	19,280	(4,449)
Cash and cash equivalents, beginning of period	19,498	32,578
Cash and cash equivalents, end of period	38,778	28,129
Supplemental disclosure of cash flow information:
Income taxes paid	2,016	2,594
Supplemental disclosures of non-cash investing and financing activities:
Effect of net increase in fair value of available-for-sale and auction-rate securities	40	45
Property, plant and equipment costs incurred but not paid	$ 595	$ 389

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 788	$ 949
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	25,000	25,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	75,000	75,000
Common stock, shares issued	25,950	25,950
Shares outstanding	25,461	25,461

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 10—COMMITMENTS AND CONTINGENCIES

From time to time we are involved in litigation as both plaintiff and defendant arising in the ordinary course of business. In the opinion of management, the results of any pending litigation should not have a material adverse effect on our consolidated financial position or operating results.

We lease facilities and equipment, including access to satellites for television transmission, under non-cancelable operating leases. Generally, the most significant lease is our satellite lease. We also have operating leases for general office and production facilities in Tulsa, OK, New York City, Chicago, IL, Fort Worth, TX, Greenwich, CT and Santa Monica, CA. These leases expire at various dates through 2022.

Rental expenses, including satellite and transponder expense, equipment and facilities rent expense, aggregated to approximately $690 and $828 for the three months ended September 30, 2012 and 2011, respectively, and $2,018 and $2,356 for the nine months ended September 30, 2012 and 2011, respectively.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 05, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	OUTDOOR CHANNEL HOLDINGS INC
Entity Central Index Key	0000760326
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		25,943,066

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Segment Information

9 Months Ended

Sep. 30, 2012

Segment Information [Abstract]

SEGMENT INFORMATION

NOTE 11—SEGMENT INFORMATION

We report segment information in the same format as reviewed by our chief operating decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision maker is our chief executive officer. In 2011, based on changes in how we monitor and measure our various businesses, we separated our aerial camera units, SkyCam and CableCam, into a separate segment. Previously, our aerial camera units were included in our Production Services segment. Accordingly, we now operate in three reporting segments: TOC, Production Services (which is comprised solely of Winnercomm) and our Aerial Cameras segment. TOC is a separate business activity that broadcasts television programming on the Outdoor Channel twenty-four hours a day, seven days a week. TOC generates revenue primarily from advertising fees (which include fees paid by outside producers to purchase advertising time in connection with the airing of their programs on Outdoor Channel) and subscriber fees. Production Services is a separate business activity that relates to the production, development and marketing of sports programming and providing website services. Production Services generates revenue from advertising fees, production services for customer-owned telecasts, and from website design, management, marketing and hosting services. Aerial Cameras generates revenue from aerial camera services for customer-owned telecasts and events.

Intersegment revenues were generated by Production Services from programming and website services provided to TOC in the amount of approximately $1,097 and $1,760 for the three months ended September 30, 2012 and 2011, respectively, and related intersegment cost of services were generated by Production Services of approximately $1,068 and $1,454 for the three months ended September 30, 2012 and 2011, respectively. Intersegment revenues were generated by Production Services of approximately $1,853 and $2,760 for the nine months ended September 30, 2012 and 2011, respectively, and intersegment cost of services were generated by Production Services of approximately $1,908 and $2,470 for the nine months ended September 30, 2012 and 2011, respectively. Our Aerial Cameras segment had no intersegment revenues or intersegment cost of services for the three and nine months ended September 30, 2012 and 2011.

Information with respect to these reportable segments as of and for the three and nine months ended September 30, 2012 and 2011 is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Revenues
TOC	$	16,970		$	15,750		$	43,697		$	40,390
Production Services		2,107			3,293			4,518			6,699
Aerial Cameras		3,351			1,642			5,567			3,935
Eliminations		(1,097	)		(1,760	)		(1,853	)		(2,760	)
Total revenues	$	21,331		$	18,925		$	51,929		$	48,264

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Income (Loss) from Operations
TOC*	$	3,800		$	4,772		$	3,529		$	5,238
Production Services*		(235	)		(123	)		(806	)		(1,596	)
Aerial Cameras*		(315	)		(825	)		(1,637	)		(2,596	)
Eliminations		(19	)		(306	)		65			(290	)
Total income from operations	$	3,231		$	3,518		$	1,151		$	756

	September 30, 2012			December 31, 2011
Total Assets
TOC	$	79,406		$	77,771
Production Services		8,069			7,063
Aerial Cameras		9,154			7,954
Corporate assets*		56,266			56,696
Eliminations		(233	)		(298	)
Total assets	$	152,662		$	149,186

	Three Months  Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Depreciation and Amortization
TOC	$	306	$	337	$	1,044	$	1,062
Production Services		122		128		376		398
Aerial Cameras		240		230		717		679
Total depreciation and amortization	$	668	$	695	$	2,137	$	2,139

* Corporate overhead expenses consist primarily of executive, legal and administrative functions not associated directly with TOC, Production Services or Aerial Cameras. We allocate a portion of these expenses to our Production Services and Aerial Cameras 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.

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenues:
Advertising	$ 11,688	$ 10,732	$ 27,854	$ 25,630
Subscriber fees	5,282	5,018	15,843	14,760
Production services	4,361	3,175	8,232	7,874
Total revenues	21,331	18,925	51,929	48,264
Cost of services:
Programming	1,660	1,758	6,135	5,323
Satellite transmission fees	436	389	1,296	1,188
Production and operations	5,666	4,655	13,699	13,127
Other direct costs	127	77	377	241
Total cost of services	7,889	6,879	21,507	19,879
Other expenses:
Advertising	1,938	446	4,172	1,921
Selling, general and administrative	7,605	7,387	22,962	23,569
Depreciation and amortization	668	695	2,137	2,139
Total other expenses	10,211	8,528	29,271	27,629
Income from operations	3,231	3,518	1,151	756
Interest and other income, net	23	(2)	60	15
Income from operations before income taxes	3,254	3,516	1,211	771
Income tax provision	1,391	1,437	568	381
Net income	1,863	2,079	643	390
Net income attributable to noncontrolling interest
Net income attributable to controlling interest	$ 1,863	$ 2,079	$ 643	$ 390
Earnings per common share data:
Basic	$ 0.07	$ 0.08	$ 0.03	$ 0.02
Diluted	$ 0.07	$ 0.08	$ 0.03	$ 0.02
Weighted average common shares outstanding:
Basic	25,421	24,874	25,106	24,791
Diluted	26,014	25,634	25,707	25,609

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets [Abstract]

GOODWILL AND INTANGIBLE ASSETS

NOTE 5—GOODWILL AND INTANGIBLE ASSETS

We currently have three reporting units, TOC, Production Services and Aerial Cameras. The Production Services reporting unit consists solely of our Winnercomm business and the Aerial Cameras reporting unit consists of our CableCam and SkyCam businesses which were acquired on January 12, 2009. All of our goodwill is attributed to our TOC reporting unit.

We review goodwill for impairment on an annual basis during the fourth quarter and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. We typically perform a two-step impairment test on goodwill. In the first step, we compare the fair value of our reporting unit with goodwill to its carrying value. If the fair value of our reporting unit exceeds the carrying values of the net assets assigned to that unit, goodwill is not impaired and we are not required to perform further testing. If the carrying value of the net assets assigned to our reporting unit exceeds the fair value, then we must perform the second step in order to determine the implied fair value of the reporting unit’s goodwill and compare it to the carrying value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then we must record an impairment loss equal to the difference.

We historically have determined the implied fair value of its goodwill utilizing the discounted cash flow method under the income approach. Under the income approach, we derived the enterprise fair value based on the present value of estimated future cash flows, which were based on historical data and assumptions pertaining to the market. In performing the 2011 goodwill impairment test, we assessed the relevant qualitative factors and concluded that it is more likely than not that the fair value of our goodwill is greater than the carrying amount. After reaching this conclusion, no further testing was performed. The qualitative factors we considered included, but were not limited to, general economic conditions, the industry outlook, our recent and forecasted financial performance and the price of our common stock.

Intangible assets that are subject to amortization consist of the following as of September 30, 2012:

	September 30, 2012
	Gross		Accumulated Amortization		Net
Trademark	$	219	$	219	$	—
Internet domain names		173		160		13
Customer relationships		980		793		187
Patents		90		70		20
Total amortizable intangible assets	$	1,462	$	1,242	$	220

As of September 30, 2012, the weighted average amortization period for the above intangibles is 1.2 years. Based on our most recent analysis, we believe that no impairment exists at September 30, 2012 with respect to our goodwill and other intangible assets. For the nine months ended September 30, 2012 and 2011, we recognized amortization expense related to the intangible assets of $158 and $165, respectively.

Estimated future amortization expense related to intangible assets at September 30, 2012 is as follows:

Years Ending December 31,	Amount
2012 (remaining 3 months)	$	50
2013		165
2014		5
Total	$	220

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Investments in Available-For-Sale-Securities

9 Months Ended

Sep. 30, 2012

Investments in Available-for-Sale-Securities [Abstract]

INVESTMENTS IN AVAILABLE-FOR-SALE SECURITIES

NOTE 4—INVESTMENTS IN AVAILABLE-FOR-SALE SECURITIES

Assets recorded at fair value in the balance sheet as of September 30, 2012 are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and are as follows:

Level 1	–	Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;
Level 2	–	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are directly or indirectly observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level 3	–	Unobservable inputs developed using estimates and assumptions developed by management, which reflect those that a market participant would use.

We measure the following financial assets at fair value on a recurring basis. The fair value of these financial assets was determined using the following inputs at September 30, 2012:

	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents (1)	$	38,778	$	15,782	$	22,996	$	—
Investments in available-for-sale securities (2)		19,964		6,000		13,964		—
Non-current investments in auction-rate securities (3)		4,980		—		—		4,980
Total	$	63,722	$	21,782	$	36,960	$	4,980

⁽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 treasury bills and money market funds, we determine fair value through publicly available quoted market prices. For commercial paper, we determine fair value through third-party pricing sources using proprietary valuation models and other techniques that utilize market observable inputs.

⁽²⁾ Investments in available-for-sale securities consist of treasury bills, commercial paper and tax-exempt government securities with original maturity dates in excess of three months, for which we determine fair value through quoted market prices (Level 1) or through observable inputs, such as quoted prices for similar assets in markets that are not active or other inputs that are directly or indirectly observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For commercial paper with original maturity dates in excess of three months, we determine fair value through third-party pricing sources using proprietary valuation models and other techniques that utilize market observable inputs.

⁽³⁾ Investments in auction-rate securities consist of one auction-rate municipal security and one closed-end perpetual preferred auction-rate security. We use a discounted cash flow analysis to more accurately measure possible liquidity discounts.

The Company’s corporate and tax-exempt government securities which totaled $7,967 at September 30, 2012, are valued by outside professionals using proprietary valuation models and analytical tools in which all significant inputs related to similar instruments are observable or can be derived from or corroborated by publicly available observable market data for substantially the full term of the asset, and are therefore classified as Level 2 investments. Management is responsible for estimating the fair value of these investments, and in doing so, considers valuations provided by a large, independent pricing firm who maintains regular contact with market makers, brokers, dealers, and analysts to gather information on market movement, direction, trends, and other specific data. This information is used to structure yield curves for various types of securities and arrive at the daily valuations.

As of September 30, 2012, our investments in auction-rate securities (“ARS”) consisted of one auction-rate municipal security collateralized by federally backed student loans and one closed-end perpetual preferred security which has redemption features which call for redemption at 100% of par value and both have maintained at least A3 credit rating despite the failure of the auction process. To date, we have collected all interest due on all of our ARS in accordance with their stated terms. Historically, the carrying value (par value) of the ARS approximated fair market value due to the frequent resetting of variable interest rates. Beginning in February 2008, however, the auctions for ARS began to fail and were largely unsuccessful, requiring us to hold them beyond their typical auction reset dates. As a result, the interest rates on these investments reset to the maximum based on formulas contained in the securities. The rates are generally equal to or higher than the current market for similar securities. The par value of the ARS associated with these failed auctions will not be available to us until a successful auction occurs, a buyer is found outside of the auction process, the securities are called or the underlying securities have matured. Due to these liquidity issues, we performed a discounted cash flow analysis to determine the estimated fair value of these investments. The assumptions used in preparing the models include, but are not limited to, interest rate yield curves for similar securities, market rates of returns, and the expected term of each security. In making assumptions of required rates of return, we considered risk-free interest rates and credit spreads for investments of similar credit quality. Based on these models, we recorded an unrealized gain on our ARS of $13 and $40 in the three and nine months ended September 30, 2012, respectively. As a result of the lack of liquidity in the ARS market, we have an accumulated unrealized loss on our ARS of $247, which is included in accumulated other comprehensive loss on our consolidated balance sheet as of September 30, 2012. We deemed the loss to be temporary because we do not plan to sell any of the ARS prior to maturity at an amount below the original purchase value and, at this time, do not deem it probable that we will receive less than 100% of the principal and accrued interest. We are not certain how long we may be required to hold each security, but based on our combined cash and cash equivalents balance and investments in available-for-sale securities of $58,742 and our expected operating cash flows, we do not believe a lack of liquidity associated with our ARS will adversely affect our ability to conduct business, and believe we have the ability to hold the securities throughout the currently estimated recovery period. We will continue to evaluate any changes in the market value of the failed ARS that have not been liquidated subsequent to year-end and in the future, depending upon existing market conditions, we may be required to record additional other-than-temporary declines in market value. However, given our current cash and cash equivalent position, short-term investments in available-for-sale securities, and cash flow from operations, we believe we have the ability and we intend to hold the failed ARS as long-term investments until the market stabilizes.

All of our assets measured at fair value on a recurring basis using significant Level 3 inputs as of September 30, 2012 were auction-rate securities. The one closed-end perpetual preferred auction-rate security totaling $2,945 had an interest rate of 2.22% and an auction reset of 28 days. The municipal security totaling $2,035 had an interest rate of 0.88%, an auction reset of 28 days and a maturity date of December 1, 2045. As of September 30, 2012 the next auction reset date for both securities was October 23, 2012. The following table summarizes our fair value measurements using significant Level 3 inputs, and changes therein, for the three and nine month periods ended September 30, 2012:

	Three Months Ended September 30, 2012		Nine Months Ended September 30, 2012
Auction-Rate Securities:
Balance at beginning of period	$	4,967	$	4,940
Unrealized gain included in accumulated other comprehensive income		13		40
Balance as of September 30, 2012	$	4,980	$	4,980

We consider the yields we recognize from auction-rate securities and from cash held in our treasury bills, commercial paper, tax-exempt government securities and money market accounts to be interest income which are recorded in interest and other income, net for the three and nine months ended September 30, 2012 and 2011 as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Interest income	$	44		$	24		$	121		$	86
Interest expense		(21	)		(26	)		(61	)		(71	)
Total interest and other income, net	$	23		$	(2	)	$	60		$	15

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Earnings (Loss) Per Common Share (Tables)

9 Months Ended

Sep. 30, 2012

Earnings (Loss) Per Common Share [Abstract]

Summary of reconciliation of basic and diluted number of weighted average shares outstanding

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Weighted average shares used to calculate basic earnings per share		25,421		24,874		25,106		24,791
Dilutive effect of potentially issuable common shares upon exercise of dilutive stock options, performance units, unvested restricted stock and stock units		593		760		601		818
Weighted average shares used to calculate diluted earnings per share		26,014		25,634		25,707		25,609

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2012

Recent Accounting Pronouncements [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

NOTE 12—RECENT ACCOUNTING PRONOUNCEMENTS

In June and December 2011, the Financial Accounting Standards Board (FASB) issued guidance on the presentation of comprehensive income. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity and also requires presentation of reclassification adjustments from other comprehensive income to net income on the face of the financial statements. We adopted this guidance beginning after January 1, 2012, with the exception of the requirement to present reclassification adjustments from other comprehensive income to net income on the face of the financial statements, which has been deferred pending further deliberation by the FASB. The adoption did not have a material effect on our financial condition or results of operations, and only resulted in a change to financial statement presentation.

On May 12, 2011 the FASB issued Accounting Standards Update (ASU) No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (ASU 2011-04). This update amends Accounting Standards Codification (ASC) Topic 820, “Fair Value Measurement and Disclosure.” ASU 2011-04 clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. ASU 2011-04 is effective for annual and interim reporting periods beginning on or after December 15, 2011. The adoption of this guidance did not have a material effect our financial condition and results of operations.

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Income Tax Provision

9 Months Ended

Sep. 30, 2012

Income Tax Provision [Abstract]

INCOME TAX PROVISION

NOTE 8—INCOME TAX PROVISION

The income tax provision reflected in the accompanying unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2012 and 2011 is different than that computed based on the applicable statutory Federal income tax rate of 34% primarily due to state taxes and the limitations on the deductibility of executive compensation as provided for in Internal Revenue Code Section 162(m).

We file income tax returns in the United States and various state and local tax jurisdictions. We have state net operating losses and credit carryforwards that will be subject to examination beyond the year in which they are ultimately utilized. Our policy is to record interest and penalties on uncertain tax positions as income tax expense.

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Lines of Credit

9 Months Ended

Sep. 30, 2012

Lines of Credit [Abstract]

LINES OF CREDIT

NOTE 6—LINES OF CREDIT

On September 5, 2012, the Company renewed its revolving line of credit agreement (the “Revolver”) with U.S. Bank N.A., extending the maturity date to September 5, 2013 and renewing the total amount which can be drawn upon under the Revolver to $10,000. The Revolver provides that the interest rate per annum as selected by us shall be prime rate (3.25% and 3.25% as of September 30, 2012 and 2011, respectively) plus 0.25% or LIBOR (0.25% and 0.25% as of September 30, 2012 and 2011, respectively) plus 2.25%. The Revolver is unsecured. This credit facility contains customary financial and other covenants and restrictions, as amended, including a change of control provision and minimum liquidity metrics. As of September 30, 2012, we did not have any amounts outstanding under this credit facility. This Revolver is guaranteed by TOC and as of September 30, 2012, we were in full compliance with all the covenants of the Revolver.

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Accounts Payable and Accrued Expenses

9 Months Ended

Sep. 30, 2012

Accounts Payable and Accrued Expenses [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

NOTE 7—ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses as of September 30, 2012 and December 31, 2011 consist of the following:

	September 30, 2012		December 31, 2011
Trade accounts payable	$	1,185	$	1,951
Accrued payroll and related expenses		3,402		3,627
Estimated make-good accrual		1,156		1,575
Estimated most-favored nation accrual		2,003		2,003
Accrued launch support commitment		—		488
Accrued expenses		6,210		2,780
Total	$	13,956	$	12,424

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Related Party Transactions

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 9—RELATED PARTY TRANSACTIONS

We lease our administrative facilities from Musk Ox Properties, LP, which in turn is owned by Thomas H. Massie, who is a principal stockholder and director of the Company. The lease agreement had a five-year term and expired on December 31, 2010. Since January 2011, we have entered into a number of agreements with Musk Ox Properties, LP to extend our lease which now expires on January 31, 2013. Monthly rent payments for the extended lease term are approximately $19. We paid Musk Ox Properties, LP, and recognized rent expense of, approximately $57 in both the three months ended September 30, 2012 and 2011, and $172 in both the nine months ended September 30, 2012 and 2011.

We continue to lease our former SkyCam facility from Case and Associates Properties, Inc., which in turn is partially owned by James E. Wilburn, Chairman of Winnercomm. The lease agreement has a ten year term expiring in May 2016. Monthly rent payments under this lease agreement were $43. We paid Case and Associates Properties, Inc., approximately $125 and $129 in the three months ended September 30, 2012 and 2011, respectively, and $415 and $381 in the nine months ended September 30, 2012 and 2011, respectively. We recognized rent expense related to this lease of $71 and $88 in the three months ended September 30, 2012 and 2011, respectively, and $205 and $223 in the nine months ended September 30, 2012 and 2011, respectively. We no longer occupy this facility and sub-leased this facility in April 2012.

In October 2010 we engaged WATV Productions, Inc. to produce one off-road motorsport series for a total contract value of $390. In May 2012 we engaged WATV to produce a viewer generated comedy series for a total contract value of $538. Roger L. Werner, our former Chief Executive Officer and current Co-Chairman of the Board of Directors, is a shareholder of WATV. During the three and nine months ended September 30, 2012 and 2011, we paid WATV $230 and $405, and $120 and $357, respectively, related to the production of these programs.

We license a program on a cash and barter basis that is produced by Gold Prospectors Association of America, LLC (“Gold Prospectors”), an entity owned by Thomas H. Massie, who is a principal stockholder and director of the Company. The program airs during off-peak hours and the license period is from March 2009 through March 2012. In March 2012, we extended the license period of this show and agreed to pay $25 per quarter in exchange for increased commercial air time to be sold and retained by the Company. During the three and nine months ended September 30, 2012 we paid Gold Prospectors $25 and $75, respectively. The value of this barter arrangement is not considered material to our consolidated financial statements.

In December 2011 we entered into a license agreement to air another program produced by Gold Prospectors. Under the agreement we will contribute $80 towards the production of 18 licensed episodes which will be jointly owned by the Company and Gold Prospectors. The agreement terminates in December 2012 and $80 was paid in both the three months and nine months ended September 30, 2012.

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Stock Incentive Plans (Details 5) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Expense associated with our share-based compensation plans yet to be recognized
Expense Yet to be Recognized	$ 4,132
Weighted Average Remaining Requisite Service Periods	1 year 8 months 12 days
Restricted stock [Member]
Expense associated with our share-based compensation plans yet to be recognized
Expense Yet to be Recognized	3,734
Weighted Average Remaining Requisite Service Periods	1 year 10 months 24 days
RSUs [Member]
Expense associated with our share-based compensation plans yet to be recognized
Expense Yet to be Recognized	$ 398
Weighted Average Remaining Requisite Service Periods	8 months 12 days

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Segment Information (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Segment Information (Textual) [Abstract]
Number of reporting segments			3
Production Services [Member]
Segment Information (Textual) [Abstract]
Intersegment revenues	$ 1,097	$ 1,760	$ 1,853	$ 2,760
Intersegment cost	1,068	1,454	1,908	2,470
Aerial Cameras [Member]
Segment Information (Textual) [Abstract]
Intersegment revenues	0	0	0	0
Intersegment cost	$ 0	$ 0	$ 0	$ 0

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Recent Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2012

Recent Accounting Pronouncements [Abstract]

Fair Value Measurement and Disclosure

In June and December 2011, the Financial Accounting Standards Board (FASB) issued guidance on the presentation of comprehensive income. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity and also requires presentation of reclassification adjustments from other comprehensive income to net income on the face of the financial statements. We adopted this guidance beginning after January 1, 2012, with the exception of the requirement to present reclassification adjustments from other comprehensive income to net income on the face of the financial statements, which has been deferred pending further deliberation by the FASB. The adoption did not have a material effect on our financial condition or results of operations, and only resulted in a change to financial statement presentation.

On May 12, 2011 the FASB issued Accounting Standards Update (ASU) No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (ASU 2011-04). This update amends Accounting Standards Codification (ASC) Topic 820, “Fair Value Measurement and Disclosure.” ASU 2011-04 clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. ASU 2011-04 is effective for annual and interim reporting periods beginning on or after December 15, 2011. The adoption of this guidance did not have a material effect our financial condition and results of operations.

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Accounts Payable and Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2012

Accounts Payable and Accrued Expenses [Abstract]

Accounts payable and accrued expenses

	September 30, 2012		December 31, 2011
Trade accounts payable	$	1,185	$	1,951
Accrued payroll and related expenses		3,402		3,627
Estimated make-good accrual		1,156		1,575
Estimated most-favored nation accrual		2,003		2,003
Accrued launch support commitment		—		488
Accrued expenses		6,210		2,780
Total	$	13,956	$	12,424

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Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Commitments and Contingencies (Textual) [Abstract]
Rental expenses	$ 690	$ 828	$ 2,018	$ 2,356
Non cancelable operating lease agreements expiration period			2022-01

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Investments in Available-for Sale Securities (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Investments in Available for Sale Securities (Textual) [Abstract]
Company's tax exempt government securities	$ 7,967	$ 7,967
Redemption at par value	100.00%	100.00%
Accumulated unrealized loss on auction rate securities	247	247
Available for sale securities	58,742	58,742
Closed-end perpetual preferred auction-rate security ,amount	2,945	2,945
Closed-end perpetual preferred auction-rate security interest rate		2.22%
Closed-end perpetual preferred auction-rate security auction reset		28 days
Municipal security maturity date	2045-12-01	2045-12-01
Auction reset date	Oct. 23, 2012	Oct. 23, 2012
Municipal Security [Member]
Investments in Available for Sale Securities (Textual) [Abstract]
Closed-end perpetual preferred auction-rate security auction reset		28 days
Municipal security, Amount	2,035	2,035
Municipal security interest rate		0.88%
Auction Rate Securities [Member]
Investments in Available for Sale Securities (Textual) [Abstract]
Unrealized gain on ARS	$ 13	$ 40
Maximum percentage of principal and accrued interest		100.00%

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 1,863	$ 2,079	$ 643	$ 390
Other comprehensive income, net of tax:
Unrealized gain on available-for-sale and auction-rate securities	13	20	40	45
Comprehensive income	$ 1,876	$ 2,099	$ 683	$ 435

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Earnings (Loss) Per Common Share

9 Months Ended

Sep. 30, 2012

Earnings (Loss) Per Common Share [Abstract]

EARNINGS (LOSS) PER COMMON SHARE

NOTE 3—EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during each period, excluding unvested restricted stock. Diluted earnings (loss) per common share reflects the potential dilution of securities by including common stock equivalents, such as unvested restricted stock and stock units in the weighted average number of common shares outstanding for a period, if dilutive.

The following table sets forth a reconciliation of the basic and diluted number of weighted average shares outstanding used in the calculation of earnings per share for the three and nine months ended September 30 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Weighted average shares used to calculate basic earnings per share		25,421		24,874		25,106		24,791
Dilutive effect of potentially issuable common shares upon exercise of dilutive stock options, performance units, unvested restricted stock and stock units		593		760		601		818
Weighted average shares used to calculate diluted earnings per share		26,014		25,634		25,707		25,609

For both the three and nine months ended September 30, 2012, outstanding options to purchase a total of approximately 250,000 shares of common stock were not included in the calculation of diluted earnings per share because their effect was antidilutive. For the three and nine months ended September 30, 2011, outstanding options and performance units to purchase a total of approximately 965,000 and 973,000 shares of common stock, respectively, were not included in the calculation of diluted earnings per share because their effect was antidilutive.

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2012

Segment Information [Abstract]

Information with respect to reportable segments

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Revenues
TOC	$	16,970		$	15,750		$	43,697		$	40,390
Production Services		2,107			3,293			4,518			6,699
Aerial Cameras		3,351			1,642			5,567			3,935
Eliminations		(1,097	)		(1,760	)		(1,853	)		(2,760	)
Total revenues	$	21,331		$	18,925		$	51,929		$	48,264

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Income (Loss) from Operations
TOC*	$	3,800		$	4,772		$	3,529		$	5,238
Production Services*		(235	)		(123	)		(806	)		(1,596	)
Aerial Cameras*		(315	)		(825	)		(1,637	)		(2,596	)
Eliminations		(19	)		(306	)		65			(290	)
Total income from operations	$	3,231		$	3,518		$	1,151		$	756

	September 30, 2012			December 31, 2011
Total Assets
TOC	$	79,406		$	77,771
Production Services		8,069			7,063
Aerial Cameras		9,154			7,954
Corporate assets*		56,266			56,696
Eliminations		(233	)		(298	)
Total assets	$	152,662		$	149,186

	Three Months  Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Depreciation and Amortization
TOC	$	306	$	337	$	1,044	$	1,062
Production Services		122		128		376		398
Aerial Cameras		240		230		717		679
Total depreciation and amortization	$	668	$	695	$	2,137	$	2,139

* Corporate overhead expenses consist primarily of executive, legal and administrative functions not associated directly with TOC, Production Services or Aerial Cameras. We allocate a portion of these expenses to our Production Services and Aerial Cameras 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.

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Investments in Available-for-Sale Securities (Details) (Recurring [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	$ 63,722
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	21,782
Significant Other Observable Inputs (Level 2) [Member]
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	36,960
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	4,980
Investments in available-for-sale securities [Member]
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	19,964
Investments in available-for-sale securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	6,000
Investments in available-for-sale securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	13,964
Non-current investments in auction-rate securities (3) [Member]
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	4,980
Non-current investments in auction-rate securities (3) [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	4,980
Cash and cash equivalents [Member]
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	38,778
Cash and cash equivalents [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	15,782
Cash and cash equivalents [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value Asset and Liabilities measured on recurring and non recurring basis
Total	$ 22,996

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 13—SUBSEQUENT EVENTS

The Company has completed an evaluation of all subsequent events through the date the consolidated financial statements were issued and concluded no subsequent events occurred that required recognition or disclosure.

* * *