REGENT COMMUNICATIONS, INC. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


þ		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2007


o		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 0-15392

REGENT COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware		31-1492857

(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

2000 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202

(Address of Principal Executive Offices) (Zip Code)

(513) 651-1190

(Registrant’s Telephone Number, including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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. Yes þ No o

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 o Accelerated filer þ Non-accelerated filer o

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

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

Common Stock, $.01 par value – 38,700,561 shares outstanding as of May 4, 2007

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

REGENT COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)


	Three Months Ended
	March 31,
	2007			2006
Broadcast revenues, net of agency commissions	$	22,045		$	17,118

Station operating expenses		15,631			12,895
Depreciation and amortization		1,879			1,182
Corporate general and administrative expenses		2,014			1,769
Gain on sale of long-lived assets		—			(20	)

Operating income		2,521			1,292

Interest expense		(4,124	)		(1,225	)
Unrealized loss on derivatives, net of realized gain		(590	)		—
Other income, net		52			44

(Loss) income from continuing operations before income taxes		(2,141	)		111
Income tax benefit (expense)		936			(47	)

(Loss) income from continuing operations		(1,205	)		64
Gain on discontinued operations, net of income taxes		6			—

Net (loss) income	$	(1,199	)	$	64


Basic and diluted (loss) income per common share:

(Loss) income from continuing operations	$	(0.03	)	$	0.00
Discontinued operations		—			—

Net (loss) income	$	(0.03	)	$	0.00


Weighted average number of common shares used in basic calculation:		38,205			41,538
Weighted average number of common shares used in diluted calculation:		38,205			41,538

The accompanying notes are an integral part of these condensed consolidated financial statements.

REGENT COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)


	March 31,			December 31,
	2007			2006
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2,424		$	4,250
Accounts receivable, net of allowance of $916 and $898 at March 31, 2007 and December 31, 2006, respectively		15,528			16,538
Other current assets		2,224			1,933


Total current assets		20,176			22,721

Property and equipment, net		36,942			36,753
Intangible assets, net		346,078			342,100
Goodwill		43,859			43,655
Other assets		5,094			6,416


Total assets	$	452,149		$	451,645


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	1,775		$	1,150
Accounts payable		1,783			1,710
Accrued compensation		1,406			1,953
Other current liabilities		5,606			4,498


Total current liabilities		10,570			9,311

Long-term debt, less current portion		214,938			213,850
Other long-term liabilities		2,702			2,576
Deferred taxes		5,838			6,748


Total liabilities		234,048			232,485


Commitments and contingencies

Stockholders’ equity:
Common stock, $.01 par value, 100,000,000 shares authorized; 48,578,992 and 48,344,292 shares issued at March 31, 2007 and December 31, 2006, respectively		486			483
Treasury stock, 9,919,046 and 9,953,216 shares, at cost, at March 31, 2007 and December 31, 2006, respectively		(52,874	)		(53,099	)
Additional paid-in capital		348,511			348,518
Accumulated deficit		(78,022	)		(76,742	)

Total stockholders’ equity		218,101			219,160


Total liabilities and stockholders’ equity	$	452,149		$	451,645

The accompanying notes are an integral part of these condensed consolidated financial statements.

REGENT COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)


	Three Months Ended March 31,
	2007			2006
Cash flows from operating activities:
Net (loss) income	$	(1,199	)	$	64
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		1,879			1,277
Deferred income tax (benefit) expense		(910	)		46
Non-cash compensation expense		253			211
Unrealized loss on derivatives		842			—
Other, net		177			259
Changes in operating assets and liabilities, net of acquisitions in both years:
Accounts receivable		911			1,462
Other assets		(442	)		(169	)
Current and long-term liabilities		496			(319	)

Net cash provided by operating activities		2,007			2,831


Cash flows from investing activities:
Acquisition of radio station assets and related acquisition costs, net of cash acquired		(4,669	)		(5	)
Capital expenditures		(841	)		(439	)
Other		—			7

Net cash used in investing activities		(5,510	)		(437	)


Cash flows from financing activities:
Principal payments on long-term debt		(1,287	)		(2,800	)
Long-term debt borrowings		3,000			3,000
Treasury stock purchases		(61	)		(2,777	)
Other		25			25

Net cash provided by (used in) financing activities		1,677			(2,552	)


Net decrease in cash and cash equivalents		(1,826	)		(158	)
Cash and cash equivalents at beginning of period		4,250			846

Cash and cash equivalents at end of period	$	2,424		$	688


Supplemental schedule of non-cash financing and investing activities:
Capital lease obligations incurred	$	48		$	53
Accrued capital expenditures	$	83		$	244

The accompanying notes are an integral part of these condensed consolidated financial statements.

REGENT COMMUNICATIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. SUMMARY OF SIGNIFICANT POLICIES

Preparation of Interim Financial Information

Regent Communications, Inc. (including its wholly-owned subsidiaries, the “Company” or “Regent”) was formed to acquire, own and operate radio stations in medium-sized markets in the United States.

The condensed consolidated financial statements of Regent have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments necessary for a fair presentation of the results of operations, financial position and cash flows for each period shown. All adjustments are of a normal and recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules and regulations. Results for interim periods may not be indicative of results for the full year. The December 31, 2006 condensed consolidated balance sheet was derived from audited consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in Regent’s Form 10-K for the year ended December 31, 2006.

Broadcast Revenue

Broadcast revenue for commercial broadcasting advertisements is recognized when the commercial is broadcast. Revenue is reported net of agency commissions. Agency commissions are calculated based on a stated percentage applied to gross billing revenue for advertisers that use agencies. Agency commissions were approximately $2.3 million and $1.8 million for the three-month periods ended March 31, 2007 and 2006, respectively.

Barter Transactions

Barter transactions (advertising provided in exchange for goods and services) are reported at the estimated fair value of the products or services received. Revenue from barter transactions is recognized when advertisements are broadcast, and merchandise or services received are charged to expense when received or used. If merchandise or services are received prior to the broadcast of the advertising, a liability (deferred barter revenue) is recorded. If advertising is broadcast before the receipt of the goods or services, a receivable is recorded. Barter revenue and expense for the three-month periods ended March 31, 2007 and 2006 were as follows (in thousands):


	Three months		Three months
	ended March 31,		ended March 31,
	2007		2006
Barter revenue	$	778	$	576
Barter expense	$	685	$	603

REGENT COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Comprehensive Income

The following table shows the components of comprehensive income for the three months ended March 31, 2007 and 2006 (in thousands):


	Three months ended			Three months ended
	March 31, 2007			March 31, 2006
Net (loss) income	$	(1,199	)	$	64
Loss on cash flow hedge, net of income taxes		—			(32	)

Comprehensive (loss) income	$	(1,199	)	$	32

Stock-based Compensation Plans

The Company follows the provisions of Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment” (“SFAS 123R”) for share-based compensation arrangements, including stock options, restricted share plans, performance-based awards, stock appreciation rights, and employee stock purchase plans. Under the provisions of SFAS 123R, companies are required to record compensation expense for share-based payment transactions. During the first quarter of 2007 and 2006, the Company issued 241,300 nonvested shares and 234,100 nonvested shares, respectively, as a component of compensation to employees in lieu of stock options under The Regent Communications, Inc. 2005 Incentive Compensation Plan. The value of each nonvested share was determined by the fair market value of a share of Regent common stock on the date of grant. The nonvested shares vest ratably over a four-year period and the Company records expense related to the nonvested shares on a straight-line basis over the vesting period. During the first quarter of 2007 and 2006, Regent recorded approximately $107,000 and $68,000, respectively, of expense related to nonvested share awards. At March 31, 2007, deferred compensation expense related to the nonvested shares was approximately $1.4 million, which will be recognized over the remaining vesting period. At March 31, 2007, 410,075 nonvested shares remained outstanding under the plan, with a weighted average remaining life of approximately 3.4 years. During the first quarter of 2007, 6,600 nonvested shares were forfeited. In May 2006, the Company issued 30,000 nonvested shares of Regent common stock to its six non-management directors under the Regent Communications, Inc. 2006 Directors Equity Compensation Plan. The value of each nonvested share was determined by the fair market value of a share of Regent common stock on the date of grant. The nonvested shares vest ratably over a four-year period and the Company records expense related to the nonvested shares on a straight-line basis over the vesting period. Regent recorded approximately $5,000 of expense related to the nonvested awards during the first quarter of 2007. At March 31, 2007, deferred compensation expense related to the nonvested shares was approximately $68,000, which will be recognized over the remaining 3.1 years of the vesting period. Through March 31, 2007, 10,000 nonvested shares granted under the plan were forfeited.

Under the provisions of SFAS 123R, the Company is also required to record compensation expense related to shares issued under the Company’s Employee Stock Purchase

REGENT COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Plan. For each of the three-month periods ended March 31, 2007 and 2006, the Company recorded approximately $10,000 of compensation expense related to its Employee Stock Purchase Plan. Regent utilizes the Black-Scholes-Merton option-pricing model to calculate the fair market value of shares awarded under the Employee Stock Purchase Plan. The weighted average fair value per shares estimated for each share of common stock issued under the plan during the first quarter of 2007 was $0.51, based upon a weighted average volatility of 38.6%, a weighted average risk-free interest rate of 5.05%, an average life of three months, and no dividends. The weighted average fair value per share estimated for each share of common stock issued under the plan during the first quarter of 2006 was $0.84, based upon a weighted average volatility of 36.7%, a weighted average risk-free interest rate of 4.16%, an average life of three months, and no dividends.

The Company had no unvested stock options at the date that SFAS 123R was implemented. There were no stock options granted during the first quarter of 2007 or during 2006. During the first quarter of 2007, approximately 57,000 stock options with a weighted-average exercise price of $6.21 were terminated due to forfeiture or expiration. During the first quarter of 2006, approximately 1,000 stock options with a weighted-average exercise price of $6.53 were terminated due to forfeiture or expiration. The intrinsic value of all outstanding stock options was zero at March 31, 2007. See Regent’s 2006 Annual Report on Form 10-K for other disclosures of all outstanding awards.

Discontinued Operations

During 2006, the Company disposed of its Chico and Redding, California markets. Regent applied the provisions of Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets,” (“SFAS 144”), which requires that in a period in which a component of an entity has been disposed of or is classified as held for sale, the income statement of a business enterprise for current and prior periods shall report the results of operations of the component, including any gain or loss recognized, in discontinued operations. The Company’s policy is to allocate a portion of interest expense to discontinued operations, based upon guidance in EITF 87-24, “Allocation of Interest to Discontinued Operations,” as updated by SFAS 144. As there was no debt required to be repaid as a result of these disposals, nor was there any debt assumed by the buyers, interest expense was allocated to discontinued operations in proportion to the net assets disposed of to total net assets of the Company.

Selected financial information related to discontinued operations for the three-month periods ended March 31, 2007 and 2006 is as follows (in thousands):


	Three months		Three months
	ended March 31,		ended March 31,
	2007		2006
Net broadcast revenue	$	—	$	1,375
Depreciation and amortization expense	$	—	$	95
Allocated interest expense	$	—	$	50
Gain (loss) before income taxes	$	11	$	0

REGENT COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Income Taxes

The Company adopted the provisions of Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” (“FIN 48”) on January 1, 2007. FIN 48 creates a single model to address uncertainty in income tax positions, and clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. It also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosures and transition. Income tax uncertainties had previously been accounted for under the provisions of Statement of Financial Accounting Standards No. 5, “Accounting for Contingencies.” As a result of the implementation of FIN 48, the Company recorded approximately $81,000 in additional liabilities for unrecognized tax benefits, which amount was recorded as an adjustment to beginning retained earnings at January 1, 2007. At January 1, 2007, and March 31, 2007, the liability for uncertain tax positions was approximately $427,000 and was recorded as a component of other long-term liabilities. Of this amount, approximately $39,000 represented accrued interest. Regent recognizes accrued interest and penalties, if any, related to unrecognized tax benefits as a component of income tax expense. The total amount of net unrecognized tax benefits that, if recognized, would affect income tax expense is $427,000, which includes interest of approximately $39,000. The Company does not currently anticipate that the total amount of unrecognized tax benefits will materially increase or decrease within 12 months of the reporting date.

The Company files income tax returns in the United States federal jurisdiction and various state jurisdictions. The Company is no longer subject to United States federal examinations by tax authorities for years prior to 2003 and for state and local income tax examinations by tax authorities for years prior to 2002.

The Company recorded income taxes on continuing operations at an effective rate of 43.7% and 42.4% for the first quarter of 2007 and 2006, respectively.

2. ACQUISITIONS

On January 4, 2007, the Company completed the acquisition of substantially all of the broadcasting and intangible assets of WBZZ-FM (formerly WNYQ-FM), serving the Albany, New York market, from Vox New York, LLC and related entities for $4.9 million in cash, plus payment of approximately $211,000 of transmitter-site related build-out expenditures and approximately $51,000 of acquisition-related costs. In 2006, Regent placed $490,000 of the purchase price in escrow to secure its obligation under the asset purchase agreement. The Company has allocated approximately $0.2 million of the purchase price to fixed assets and approximately $5.0 million to FCC licenses.

REGENT COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

3. LONG-TERM DEBT

Long-term debt consisted of the following as of March 31, 2007 and December 31, 2006 (in thousands):


	March 31,			December 31,
	2007			2006
Senior secured Term A Loan	$	50,000		$	50,000
Senior secured Term B Loan		114,713			115,000
Senior secured revolving credit facility		52,000			50,000

		216,713			215,000
Less: current portion of long-term debt		(1,775	)		(1,150	)

	$	214,938		$	213,850

Borrowings under the credit facility bore interest at an average rate of 7.12% at March 31, 2007 and 6.81% at December 31, 2006.

Effective February 23, 2007, Regent entered into an amendment of its November 21, 2006 senior secured reducing credit agreement. Under the terms of the amendment, the margin applicable to the Term B Loan portion of the credit agreement was reduced to 2.25% for Eurodollar loans and to 0.75% for base rate loans. Additionally, under the terms of the amendment, if Regent would enter into a repricing agreement related to the applicable margin of the Term B Loan prior to the one-year anniversary of the effective date of the amendment to the credit agreement, the Company would be obligated to pay a prepayment premium equal to 1% of the outstanding borrowings under the Term B Loan at the date of such repricing.

4. CAPITAL STOCK

The Company’s authorized capital stock consists of 100,000,000 shares of common stock and 40,000,000 shares of preferred stock. No shares of preferred stock were outstanding at March 31, 2007 or December 31, 2006. The Company has in the past designated shares of preferred stock in several different series. Of the available shares of preferred stock, 6,768,862 remain designated in several of those series and 33,231,138 shares are currently undesignated.

In January 2006, the Company began issuing grants of nonvested stock to employees under the Regent Communications, Inc. 2005 Incentive Compensation Plan. During the first three months of 2007, the Company issued 237,400, net of forfeitures, which vest ratably over a four-year period. Additionally during the first three months of 2007, Regent recorded treasury stock repurchases related to the forfeiture of 21,697 shares of stock by employees for the payment of withholding taxes related to the vesting of nonvested shares that were granted during the first quarter of 2006. During the first quarter of 2006, Regent issued 234,100 shares of common stock, which vest ratably over a four-year period.

During the first three months of 2007 and 2006, Regent reissued 55,867 shares and 36,191 shares, respectively, of treasury stock, net of forfeited shares, as an employer match to employee contributions under the Company’s 401(k) plan, and to employees enrolled in the Company’s Employee Stock Purchase Plan.

REGENT COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Regent has a stock buyback program, approved by its Board of Directors, which allows the Company to repurchase up to $20 million worth of shares of its common stock at certain market price levels. There were no repurchases of common stock during the first three months of 2007 other than treasury shares related to stock-based compensation. During the first quarter of 2006, the Company repurchased 625,339 shares of common stock for an aggregate purchase price of approximately $2.8 million.

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Regent’s intangible assets consist principally of the value of FCC licenses and the excess of the purchase price over the fair value of net assets of acquired radio stations (goodwill). The Company follows the provisions of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” (“SFAS 142”), which requires that a company perform annual impairment testing of goodwill and intangible assets determined to have an indefinite life. The Company performs its annual review of goodwill and indefinite-lived intangible assets for impairment during the fourth quarter, or at an earlier date if conditions exist that would indicate the possibility of an impairment issue.

Definite-lived Intangible Assets

The Company’s definite-lived intangible assets, consisting primarily of non-competition agreements, pre-sold advertising contracts, employment and sports rights agreements, and advertiser relationships and lists, are amortized in accordance with the provisions of SFAS 142. Pre-sold advertising contracts are amortized over a six-month period, starting at the earlier of the purchase date or the commencement of a time brokerage agreement or similar arrangement. Non-compete, employment and sports rights agreements are amortized over the life of the related agreement. Advertiser lists and relationships are amortized over a three-year period. The following table presents the gross carrying amount and accumulated amortization for the Company’s definite-lived intangibles at March 31, 2007 and December 31, 2006 (in thousands):


	March 31, 2007				December 31, 2006
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Non-compete agreements	$	219	$	43	$	219	$	24
Pre-sold advertising contracts		—		—		1,535		774
Sports right and employment agreements and advertiser lists and relationships		779		401		779		365

Total	$	998	$	444	$	2,533	$	1,163

The aggregate amortization expense related to the Company’s definite-lived intangible assets for the three months ended March 31, 2007 and 2006 was approximately $816,000 and $172,000, respectively. The estimated annual amortization expense for the years ending

REGENT COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

December 31, 2007, 2008, 2009, 2010 and 2011 is approximately $997,000, $235,000, $124,000, $1,000 and $1,000, respectively.

Indefinite-lived Intangible Assets

The Company’s indefinite-lived intangible assets consist primarily of FCC licenses for radio stations. The following table presents the change in the carrying amount for the Company’s indefinite-lived intangible assets for the three-month period ended March 31, 2007 (in thousands):


	Indefinite-lived
	Intangible Assets
Balance as of December 31, 2006	$	340,720
Acquisition-related adjustment		(159	)
Acquisition of FCC licenses		4,953

Balance as of March 31, 2007	$	345,514

The acquisition-related adjustment consists of final adjustments to purchase price allocations of stations acquired in late 2006.

Other indefinite-lived intangible assets, consisting primarily of trademarks and website domain names, were approximately $10,000 at March 31, 2007 and December 31, 2006.

Goodwill

The following table presents the changes in the carrying amount of goodwill for the three-month period ended March 31, 2007 (in thousands):


	Goodwill
Balance as of December 31, 2006	$	43,655
Acquisition-related goodwill		45
Acquisition-related adjustment		159

Balance as of March 31, 2007	$	43,859

The acquisition-related adjustment consists of final adjustments to purchase price allocations of stations acquired in late 2006.

6. EARNINGS PER SHARE

Statement of Financial Accounting Standards No. 128, “Earnings per Share,” (“SFAS 128”) calls for the dual presentation of basic and diluted earnings per share (“EPS”). Basic EPS is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period, and excluding shares issued under The Regent Communications, Inc. 2005 Incentive Compensation Plan and the Regent Communications, Inc. 2006 Directors Equity Compensation Plan that were not vested at March 31, 2007. The calculation of diluted earnings per share is similar to basic except that the weighted average number of shares outstanding includes the additional dilution that would occur if potential

REGENT COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

common stock, such as stock options and warrants were exercised, except when the effect would be antidilutive. The number of additional shares is calculated by assuming that outstanding stock options and warrants with an exercise price less than the Company’s average stock price for the period were exercised, and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the reporting period. At March 31, 2007, none of the Company’s 4,112,289 stock options and 140,000 outstanding warrants had exercise prices that were less than the Company’s average stock price for the three months ended March 31, 2007. At March 31, 2006, the Company had 4,269,039 stock options and 790,000 warrants outstanding, none of which had exercise prices less than the average market price of Regent common stock for the three months ended March 31, 2006. Included in the calculation of diluted earnings per share is also the additional dilution related to nonvested shares, except when the effect would be antidilutive. The number of incremental shares is calculated by assuming the average deferred compensation expense related to nonvested shares, and related tax benefits, were used to acquire shares of common stock at the average market price during the reporting period. For the three months ended March 31, 2007, approximately 38,000 incremental shares would have been included in the calculation of fully diluted earnings per share, had their inclusion not been antidilutive. For the three months ended March 31, 2006, there were no incremental shares included in the calculation of fully diluted earnings per share.


	Three Months			Three Months
	Ended			Ended
	March 31, 2007			March 31, 2006
	(In thousands except per share data)
(Loss) income from continuing operations	$	(1,205	)	$	64
Gain from discontinued operations, net of taxes		6			—

Net (loss) income	$	(1,199	)	$	64


Basic and diluted (loss) income per common share:
(Loss) income from continuing operations	$	(0.03	)	$	0.00
Gain on discontinued operations		—			—

Net (loss) income	$	(0.03	)	$	0.00


Weighted average basic common shares		38,205			41,538
Dilutive effect of stock options, warrants and nonvested shares		—			—

Weighted average diluted common shares		38,205			41,538

7. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure requirements for fair value measurements. SFAS 157 applies whenever other standards require, or permit, assets or liabilities to be measured at fair value. SFAS 157 does not expand the use of fair value in any new circumstances. SFAS 157 is effective for financial statements issued for fiscal years

REGENT COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

beginning after November 15, 2007. Regent will adopt SFAS 157 on January 1, 2008, and is currently evaluating the impact on its financial position and results of operations, if any.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 permits entities to irrevocably choose to measure many financial assets and liabilities at fair value. The fair value option established by SFAS 159 permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses in earnings at subsequent reporting dates. SFAS 159 is effective for fiscal years beginning after November 15, 2007. Regent is currently evaluating the impact that adoption of SFAS 159 would have on its financial position and results of operations, if any.

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

GENERAL

Cautionary Statement Concerning Forward-Looking Statements

This Form 10-Q includes certain forward-looking statements with respect to our Company and its business that involve risks and uncertainties. These statements are influenced by our financial position, business strategy, budgets, projected costs and the plans and objectives of management for future operations. We use words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “project” and other similar expressions. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, we cannot assure you that our expectations will prove correct. Actual results and developments may differ materially from those conveyed in the forward-looking statements. For these statements, we claim the protections for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements made in this Form 10-Q include changes in general economic, business and market conditions, as well as changes in such conditions that may affect the radio broadcast industry or the markets in which we operate, including, in particular: increased competition for attractive radio properties and advertising dollars; increased competition from emerging technologies; fluctuations in the cost of operating radio properties; our ability to effectively integrate our acquisitions; changes in the regulatory climate affecting radio broadcast companies; and cancellations, disruptions or postponements of advertising schedules in response to national or world events. Further information on other factors that could affect the financial results of Regent Communications, Inc. is included in Regent’s other filings with the Securities and Exchange Commission (SEC). These documents are available free of charge at the Commission’s website at http://www.sec.gov and/or from Regent Communications, Inc. The forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10-Q. If we do update one or more forward-looking statements, you should not conclude that we will make additional updates with respect to those or any other forward-looking statements.

Executive Overview update

	•		Effective February 23, 2007, we entered into an amendment to our credit agreement. The material terms of the amendment are a reduction of the Applicable Margin on Eurodollar Loans by 0.25%, and a reduction of the Applicable Margin on Base Rate Loans to 0.75%.

	•		In January 2007, we completed the acquisition of WBZZ-FM (formerly WNYQ-FM), serving the Albany, New York market for approximately $4.9 million in cash, plus approximately $0.2 million related to transmitter site build-out expenditures and $0.1 million in acquisition-related costs. The new station is our second strongest signal in the region and we now own and operate five FM radio stations and one AM radio station in our second-largest market.

	•		In order to mitigate the impact of potential interest rate fluctuations, during the fourth quarter of 2006, we swapped the interest rates on both the $50.0 million Term A Loan and $115.0 million Term B Loan from floating to fixed. The Term A Loan pricing is fixed at approximately 4.83% for five years and the Term B Loan pricing is fixed at approximately 4.72% for five years, in both cases plus the Applicable Margin.

	•		On December 15, 2006, we completed the largest acquisition in Regent history, in terms of acquisition price, by acquiring substantially all of the broadcasting and intangible assets of five radio stations serving the Buffalo, New York market from CBS Radio Stations Inc. The stations acquired include three of the top five rated stations in the Buffalo market, which is currently our largest market. We have realized several benefits from this acquisition, including: low integration risk due to the sophistication of the seller; a more effective leveraging of corporate overhead across our radio portfolio; consistent and stable market growth over the past five years; excellent technical facilities; and product improvement opportunities on three of the five stations. In the first quarter we realized savings of redundant personnel expenses which we invested back into the promotion of the station franchises.

	•		In September 2006, we consummated two strategic transactions in our Peoria, Illinois market, whereby we simultaneously divested three class A FM radio stations and purchased two class B FM radio stations, improving our competitive position by upgrading the strength of our signals. The net consideration paid as a result of the acquisition and disposition was approximately $9.0 million. While we have significantly improved our station facilities, there has been a certain degree of advertiser confusion in the market relative to radio station format changes, which has negatively impacted revenue for our Peoria stations over the last six months. We anticipate that as we progress through the balance of the year, that impact will be reduced.

	•		In 2006, we launched Regent Interactive, an initiative focused on generating revenues through our stations' websites. While the revenue and operating income from Regent Interactive was immaterial to the Company in the first quarter of 2007, we are seeking to aggressively grow this business component through the remainder of 2007 and beyond.

	•		We have contracted with Ibiquity Digital Corporation (“Ibiquity”) for the right to convert 60 of our stations to digital or high definition radio (“HD Radio”). The 60 stations that we will convert exclude the five Buffalo stations, which were converted prior to our ownership. Our contract with Ibiquity stipulates that we convert a predetermined number of our stations to HD Radio over a six-year period beginning in 2005. Since inception of our HD Radio rollout in 2005, we have converted 14 of our FM stations to HD Radio, for an aggregate cost of approximately $2.5 million. As of March 31, 2007, and including the Buffalo stations, we have 18 FM stations and one AM station broadcasting in HD. We expect to convert an additional seven FM stations in 2007, at a total cost of approximately $1.1 million, of which approximately $0.3 million was spent in the first quarter. The conversion to HD Radio will enable the stations to broadcast digital-quality sound and also provide additional services, such as on-demand traffic, weather and sports scores. Additionally, this new technology will enable each converted radio station to broadcast additional channels of programming for public, private or subscription services. To date there has been no economic benefit on our stations that have converted to HD Radio. Any future economic benefit to our stations as a result of digital conversion is not known at this time.

RESULTS OF OPERATIONS

The key factors that have affected our business are discussed and analyzed in the following paragraphs. This commentary should be read in conjunction with our consolidated financial statements and the related footnotes included herein.

Our financial results are seasonal. Historically, and as is typical in the radio broadcasting industry, we expect our first calendar quarter to produce the lowest revenues for the year. Our operating results in any period may be affected by advertising and promotion expenses that do not necessarily produce commensurate revenues until the impact of the advertising and promotion is realized in future periods.

During 2006, we disposed of our Chico and Redding, California markets. We applied the provisions of Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets,” (“SFAS 144”) to the disposals, which requires that in a period in which a component of an entity has been disposed of or is classified as held for sale, the income statement of a business enterprise for current and prior periods shall report the results of operations of the component, including any gain or loss recognized, in discontinued operations. Accordingly, all results of operations for the first quarter of 2006 related to the Chico and Redding, California markets, including an allocated portion of interest expense, have been reclassified to discontinued operations.

Comparison of three months ended March 31, 2007 to three months ended March 31, 2006

Results of continuing operations for the quarter ended March 31, 2007 compared to March 31, 2006 were impacted by several factors. Net revenue was positively impacted during the first quarter of 2007 due to the operations of the Buffalo, New York cluster, which we began operating effective October 1, 2006 under a local marketing agreement. Conversely, station operating expenses and interest expense were negatively impacted by the operating expenses of the Buffalo market and borrowings incurred under our credit agreement to fund the acquisition of Buffalo. Additionally, results were impacted by the acquisition and disposition of stations in our Peoria, Illinois market during the third quarter of 2006.

Net Broadcast Revenues

Net broadcast revenues for Regent increased 28.8% to approximately $22.0 million in the first quarter of 2007 from approximately $17.1 million in the first quarter of 2006. The table below provides a summary of the net broadcast revenue variance for the comparable three-month periods (in thousands):

Net broadcast revenue variance:


	Increase in net
	broadcast		%
	revenue		Change
Local advertising	$	3,828		27.3	%
National advertising		674		33.8	%
Barter revenue		203		35.3	%
Other		222		43.4	%

Net broadcast revenue variance	$	4,927		28.8	%

The increase in the first quarter of 2007 in local advertising revenue of 27.3% and national advertising of 33.8% compared to 2006, was due primarily to increased revenue as a result of the Buffalo acquisition. Additionally, an increase in national advertising in our Bloomington, Illinois market was offset by a decrease in national advertising in our Albany, New York market, due primarily to lower ratings on our station that previously broadcast The Howard Stern Show.

Station Operating Expenses

Station operating expenses increased 21.2%, to approximately $15.6 million in the first quarter of 2007 from approximately $12.9 million in the first quarter of 2006. The table below provides a summary of the station operating expense variance for the comparable three-month periods (in thousands):

Station operating expense variance:


	Increase in
	station operating			%
	expenses			Change
Technical expense	$	(210	)		30.7	%
Programming expense		(629	)		15.7	%
Promotion expense		(173	)		30.9	%
Sales expense		(1,013	)		29.1	%
Administrative expense		(629	)		17.7	%
Barter expense		(82	)		13.6	%

Station operating expense variance	$	(2,736	)		21.2	%

A significant portion of the $2.7 million expense increase was due to the results of the Buffalo stations, which we began operating October 1, 2006. The increase in technical expense was due primarily to increases in heat, light and power, equipment repair and rent expense, of which, approximately one-half was attributable to the Buffalo stations. The increase in programming expense was due primarily to increased compensation expense and music license fees as a result of the Buffalo acquisition, as well as increased Regent Interactive expenses. The increased promotion expense was primarily due to promotional expenses in our Buffalo market as well as expenses associated with the 2006 launch of two new stations in our Peoria, Illinois market. Sales expense increased due primarily to compensation costs related to increased revenue and increased rating service costs, both as a result of the Buffalo acquisition. Market administrative expense was higher due to increased overhead expense related to the Buffalo acquisition.

Depreciation and Amortization

Depreciation and amortization expense increased 59.0%, to approximately $1.9 million in the first quarter of 2007 from approximately $1.2 million in 2006. The increase was due primarily to $0.7 million of amortization expense for pre-sold advertising contracts during the first quarter of 2007 related to the acquisition of the Buffalo cluster.

Corporate Expense

Corporate general and administrative expense increased 13.8% to approximately $2.0 million in the first quarter of 2007 from approximately $1.8 million in 2006. The increase was primarily due to a combination of increased professional fees, more business travel and higher non-cash compensation expense related to the issuance of nonvested stock under the Company’s stockholder-approved incentive compensation plans.

Interest Expense

Interest expense increased to approximately $4.1 million in 2007 from approximately $1.2 million in 2006. The increase was due to increased average outstanding balances under our current credit agreement in the first quarter of 2007 compared to outstanding balances under our former credit agreement during the first quarter of 2006. Additionally, interest rates were higher in the first quarter of 2007 compared to the first quarter of 2006 due to higher margins applicable to our borrowings under the new credit agreement. The increase in outstanding borrowings in the first quarter of 2007 was related primarily to $125.0 million of borrowings during the last half of 2006 to fund the purchase of our Buffalo, New York stations. Our average debt level in the first quarter of 2007 was approximately $216.0 million, compared to approximately $83.5 million in the first quarter of 2006.

Unrealized loss on derivatives, net of realized gain

In order to mitigate the impact of potential interest rate fluctuations, during the fourth quarter of 2006, we swapped the interest rates on both the $50.0 million Term A Loan and $115.0 million Term B Loan from floating to fixed. The Term A Loan pricing is fixed at approximately 4.83% for five years and the Term B Loan pricing is fixed at approximately 4.72% for five years, in both cases plus the applicable margin. Since hedge accounting was not applied to these interest rate swap agreements, revaluation gains and losses associated with changes in the fair value measurement of the swaps are recorded within realized and unrealized gain (loss) on derivatives in the Consolidated Statements of Operations. In the first quarter of 2007, we recorded approximately $0.8 million of unrealized loss related to the change in the fair value of the swaps at March 31, 2007. Additionally, we recorded approximately $0.3 million of realized gain related to the favorable swap fixed rates compared to market rates.

Income Taxes

We recorded an income tax benefit of approximately $0.9 million in the first quarter of 2007 on loss from continuing operations, which represented a 43.7% effective rate. The rate includes: a tax benefit at a 34% federal rate; a state tax rate, net of federal benefit, of 7.1%; and miscellaneous adjustments of 2.6%. We recorded income tax expense of approximately $47,000 in the first quarter of 2006 on income from continuing operations, which represented a 42.4% effective rate. The rate included tax expense at a 34% federal rate, a state tax rate, net of federal benefit, of 6.8% and miscellaneous adjustments of 1.6%.

Discontinued Operations

We applied the provisions of SFAS 144 to the disposal of the Chico and Redding, California markets in 2006, which requires that in a period in which a component of an entity has been disposed of or is classified as held for sale, the income statement of a business enterprise for

current and prior periods shall report the results of operations of the component, including any gain or loss recognized, in discontinued operations. The table below summarizes the effect of the reclassification on the periods ended March 31, 2007 and March 31, 2006 (in thousands):


	2007			2006
Net broadcast revenue	$	—		$	1,375
Station operating expense		(11	)		1,230
Depreciation and amortization expense		—			95
Allocated interest expense		—			50

Gain before income taxes		11			—
Income tax expense		(5	)		—

Net gain	$	6			—

Same Station Results

Our revenues are produced exclusively by our radio stations. While acquisitions have affected the comparability of our 2007 operating results to those of 2006, we believe meaningful quarter-to-quarter net broadcast revenue comparisons can be made for results of operations for those stations which we have been operating for five full quarters, exclusive of stations disposed of during those quarters. We believe this presentation is important because it presents a more direct view of the effectiveness of our stations’ operations. Nevertheless, this measure should not be considered in isolation or as a substitute for broadcast net revenue, operating income, net (loss) income, net cash provided by operating activities or any other measure for determining our operating performance or liquidity that is calculated in accordance with generally accepted accounting principles. The following comparable results between 2007 and 2006 are listed in the table below (in thousands).

Same station net revenue increased 1.5% in the first quarter of 2007 compared to the same period in 2006, due primarily to an increase in local revenue totaling approximately $0.2 million. The local revenue increase was due primarily to increases in our Albany, New York and Lafayette, Louisiana markets, partially offset by decreases in our El Paso, Texas and Bloomington, Illinois markets. The increases were due to a combination of improvements in the local economies, improved ratings and an influx of advertising dollars due to increased population in the Lafayette market. The decreases were due primarily to lower radio advertising revenue growth in the local economies of Bloomington and El Paso.


	2007		2006
Quarter 1	Net		Net		%
*(61 stations in 13 markets)*	Revenue		Revenue		Change

Net broadcast revenue	$	22,045	$	17,118
Less:
Non same station results⁽¹⁾		4,507		33
Barter effect		778		575

Same station net broadcast revenue	$	16,760	$	16,510		1.5	%


⁽¹⁾		2007 results include stations owned in the first quarter of 2007, but not owned in the first quarter of 2006. The 2006 results include stations owned in the first quarter of 2006 but not the first quarter of 2007.

LIQUIDITY AND CAPITAL RESOURCES

Executive Overview

We believe the cash generated from operations and available borrowings under our credit agreement will be sufficient to meet our requirements for corporate expenses and capital expenditures in 2007, based on our projected operations and indebtedness and after giving effect to scheduled credit agreement commitment reductions. While we expect the long-term liquidity of the Company to be strong, as radio stations typically do not have large capital requirements, we expect that at the end of the life of our new credit agreement that we will need to refinance the outstanding debt, subject to market conditions at that date.

Our cash and cash equivalents balance at March 31, 2007 was approximately $2.4 million compared to approximately $0.7 million at March 31, 2006. Cash balances between years fluctuate due to the timing of when cash is received and expenditures are made. We typically maintain a target cash balance of between one and two million dollars, as our excess cash generated by operating activities after investing activities is typically utilized to pay down our revolving credit agreement.

We have three LIBOR-based interest rate swap agreements on our Term B Loan, which effectively convert approximately $114.7 million of our current outstanding loan balance from variable-rate to fixed-rate debt and two LIBOR-based interest rate swap agreements on our Term A Loan, which effectively convert approximately $50.0 million from variable-rate to fixed-rate debt. In the first quarter of 2007, we realized a gain of approximately $0.3 million related to these agreements as a result of higher market interest rates compared to our fixed rates.

While we are currently focused on reducing our leverage ratio to a lower level, we expect that we have sufficient access to funds to pursue our acquisition strategy in 2007 if we are able to find suitable acquisition targets at acceptable prices. We also anticipate that if we were to make an acquisition that would require borrowings in excess of our current borrowing capacity, we would be able to fund our such acquisitions by either refinancing our current credit agreement, or by obtaining financing through a variety of options available to us, including, but not limited to, access to public capital.

Sources of Funds

In the first quarter of 2007, our sources of cash were derived from a combination of cash provided by operating activities and borrowings under our credit agreement.

Net cash provided by operating activities decreased approximately 29.1% in the first quarter of 2007 to approximately $2.0 million, compared to approximately $2.8 million in 2006. The $0.8 million decrease was due primarily to increased interest charges related to increased outstanding debt balances, partially offset by station operating income provided by the Buffalo stations.

Cash flows provided by financing activities were approximately $1.7 million in the first quarter of 2007, compared to cash flows used in financing activities of approximately $2.6 million in the first quarter of 2006. The change in financing activities primarily reflects the increased borrowings for the acquisition of WBZZ-FM in Albany in 2007. Additionally, the first quarter of 2006 included the repurchase of approximately $2.8 million of Regent common stock.

At March 31, 2007, we had borrowings under the credit agreement of approximately $216.7 million, comprised of a $114.7 million Term B Loan, a $50.0 million Term A Loan, $52.0 million of revolver borrowings, and available borrowings of $23.0 million, subject to the terms and conditions of the facility. Borrowings under the credit agreement bore interest at an average rate of 7.12% and 5.47% at March 31, 2007 and March 31, 2006, respectively. Our weighted-average interest rate for the quarter ended March 31, 2007 and March 31, 2006 was 7.20% and 5.15%, respectively.

Under the terms of our credit agreement, we are subject to a Maximum Consolidated Leverage Ratio, a Minimum Consolidated Interest Coverage Ratio, and a Minimum Consolidated Fixed Charge Coverage Ratio, as well as to negative covenants customary for facilities of this type. At March 31, 2007, we were in compliance with the covenants and conditions of our credit agreement.

Uses of Funds

In the first quarter of 2007, we utilized our sources of cash primarily to acquire a radio station, pay-down long-term debt and fund capital expenditures.

Net cash used in investing activities was $5.5 million in the first quarter of 2007, compared to $0.4 million in the first quarter of 2006. Cash flows used to invest in radio properties were approximately $4.7 million in 2007, compared to cash flows used to invest in radio properties of $0.0 million in 2006.

In early January 2007, we completed the acquisition of WBZZ-FM (formerly WNYQ-FM), serving the Albany, New York market for approximately $4.9 million in cash, of which approximately $0.5 million had been placed in escrow in 2006, plus approximately $0.2 million related to transmitter site build-out expenditures and approximately $0.1 million in acquisition-related costs. The acquisition was funded from a combination of cash on hand and borrowings under our credit agreement.

We funded capital expenditures of approximately $0.8 million in the first quarter of 2007 compared to $0.4 million in the first quarter of 2006. Maintenance capital expenditures, excluding HD technology expenditures, were approximately $0.5 million in 2007 compared to approximately $0.3 million in 2006. We had expenditures of approximately $0.3 million related to the conversion of certain of our FM radio stations to HD technology in the first quarter of 2007 compared to $0.1 million in 2006.

Commencing March 31, 2007, we are required to make quarterly repayments in the amount of $287,500 of the amounts borrowed under the Term B Loan, until November 21, 2013, at which date any remaining amounts outstanding under the loan are due and payable. Borrowings under the Term A Loan must be repaid in 24 quarterly installments, commencing March 31, 2008. Repayments begin at 1.25% of the outstanding principal amount, which percentage increases to a maximum of 6.25% of the outstanding principal amount, until the final payment date of November 21, 2013. No repayments are required under the revolving facility until the termination of the credit agreement on November 21, 2013.

Off-Balance Sheet Financing Arrangements

At March 31, 2007 there were warrants outstanding entitling the holders to purchase a total of 140,000 shares of our common stock at $5.00 per share. These warrants were issued in

1998 in connection with the Series A, B, and F convertible preferred stock issuances and expire ten years from the date of grant.

We have no other off-balance sheet financing arrangements with related or unrelated parties and no unconsolidated subsidiaries.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosure requirements for fair value measurements. SFAS 157 applies whenever other standards require, or permit, assets or liabilities to be measured at fair value. SFAS 157 does not expand the use of fair value in any new circumstances. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. We will adopt SFAS 157 on January 1, 2008, and are currently evaluating the impact on our financial position and results of operations, if any.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 permits entities to irrevocably choose to measure many financial assets and liabilities at fair value. The fair value option established by SFAS 159 permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses in earnings at subsequent reporting dates. SFAS 159 is effective for fiscal years beginning after November 15, 2007. We are currently evaluating the impact that adoption of SFAS 159 would have on our financial position and results of operations, if any.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are exposed to the impact of interest rate changes as borrowings under our credit agreement bear interest at variable rates. It is our policy to enter into interest rate transactions only to the extent considered necessary to meet our objectives. Under the terms of our credit agreement, we were required to enter into within 180 days of the effective date of the credit agreement and maintain for a two-year period after becoming effective, an interest rate protection agreement, providing interest rate protection for a minimum of one-half of the aggregate outstanding borrowings under the Term B Loan portion of the credit agreement. In December 2006, we entered into five LIBOR-based forward interest rate swap agreements, which have effectively converted approximately $164.7 million of our current outstanding debt to a fixed rate. The swap agreements became effective in December 2006 and expire in December 2011. Under these agreements, payments are made based on fixed rates of between 4.72% and 4.83%, plus applicable margin. Based on our exposure to variable rate borrowings at March 31, 2007, a one percent (1%) change in the weighted average interest rate would change our annual interest by approximately $520,000.

ITEM 4. CONTROLS AND PROCEDURES.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rule 13a-15(e). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company has carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

There have been no changes in the Company’s internal controls over financial reporting for the quarter ended March 31, 2007, or in other factors that could significantly affect the internal controls subsequent to the date the Company completed its evaluation. Therefore, no corrective actions were taken.

PART II- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We currently and from time to time are involved in litigation incidental to the conduct of our business. In the opinion of our management, we are not a party to any lawsuit or legal proceeding that is likely to have a material adverse effect on our business or financial condition.

We are not aware of any probable or levied penalties against the Company relating to the American Jobs Creation Act.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2006, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

2(c) Repurchases of stock


								Approximate Dollar
								Value of Shares
						Total Number of		that May Yet be
						Shares Purchased as		Purchased under
	Total Number of			Average Price Paid		Part of Publicly		the Plan ⁽¹⁾
Period	Shares Purchased			per Share		Announced Plan ⁽¹⁾		(in thousands)
January 1, 2007 – January 31, 2007		21,697	⁽²⁾	$	2.81		0	$	1,593
February 1, 2007 – February 28, 2007		0			—		0	$	1,593
March 1, 2007 – March 31, 2007		0			—		0	$	1,593
Total		21,697		$	2.81		0	$	1,593


⁽¹⁾		On June 1, 2000, Regent’s Board of Directors approved a stock buyback program which authorized the Company to repurchase shares of its common stock at certain market price levels. Through March 31, 2007, the Board has authorized the Company to repurchase approximately $56.7 million of Regent common stock, of which amount the Company has utilized approximately $55.1 million, leaving available repurchases of approximately $1.6 million, subject to the terms and conditions of the Company’s credit agreement. There were no repurchases of common stock under the program during the first three months of 2007.

⁽²⁾		Represents shares of common stock forfeited for payment of employee withholding taxes related to the vesting of shares granted under The Regent Communications, Inc. 2005 Incentive Compensation Plan.

ITEM 6. EXHIBITS.

Exhibits

The exhibits identified as Part II Exhibits on the following Exhibit Index, which is incorporated herein by this reference, are filed or incorporated by reference as exhibits to Part II of this Form 10-Q.

EXHIBIT INDEX

The following exhibits are filed, or incorporated by reference where indicated, as part of Part II of this report on Form 10-Q:


EXHIBIT
NUMBER		EXHIBIT DESCRIPTION

3(a)*		Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended by a Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional and Other Special Rights and the Qualifications, Limitations, Restrictions, and Other Distinguishing Characteristics of Series G Preferred Stock of Regent Communications, Inc., filed January 21, 1999 (previously filed as Exhibit 3(a) to the Registrant’s Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference)

3(b)*		Certificate of Amendment of Amended and Restated Certificate of Incorporation of Regent Communications, Inc. filed with the Delaware Secretary of State on November 19, 1999 (previously filed as Exhibit 3(b) to the Registrant’s Form 10-Q for the quarter ended June 30, 2001 and incorporated herein by this reference)

3(c)*		Certificate of Decrease of Shares Designated as Series G Convertible Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on June 21, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(c) to the Registrant’s Form 10-Q for the quarter ended June 30, 1999 and incorporated herein by this reference)

3(d)*		Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional and Other Special Rights and the Qualifications, Limitations, Restrictions, and Other Distinguishing Characteristics of Series H Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on June 21, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(d) to the Registrant’s Form 10-Q for the quarter ended June 30, 1999 and incorporated herein by this reference)

3(e)*		Certificate of Decrease of Shares Designated as Series G Convertible Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on August 23, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(e) to the Registrant’s Form 10-Q for the quarter ended September 30, 1999 and incorporated herein by this reference)

3(f)*		Certificate of Increase of Shares Designated as Series H Convertible Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on August 23, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(f) to the Registrant’s Form 10-Q for the quarter ended September 30, 1999 and incorporated herein by this reference)

E-1


EXHIBIT
NUMBER		EXHIBIT DESCRIPTION

3(g)*		Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional, and Other Special Rights and the Qualifications, Limitations, Restrictions, and Other Distinguishing Characteristics of Series K Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on December 13, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(g) to Amendment No. 1 to the Registrants Form S-1 Registration Statement No. 333-91703 filed December 29, 1999 and incorporated herein by this reference)

3(h)*		Certificate of Amendment of Amended and Restated Certificate of Incorporation of Regent Communications, Inc. filed with the Delaware Secretary of State on March 13, 2002 (previously filed as Exhibit 3(h) to the Registrant’s Form 10-K for the year ended December 31, 2001 and incorporated herein by this reference)

3(i)*		Amended and Restated By-Laws of Regent Communications, Inc. adopted July 27, 2005 (previously filed as Exhibit 3(i) to the Registrant’s Form 10-Q for the quarter ended September 30, 2005 and incorporated herein by this reference)

4(a)*		Credit Agreement dated as of November 21, 2006 among Regent Broadcasting, LLC, Regent Communications, Inc. and the lenders identified therein (without schedules and exhibits, which Regent has determined are not material) (previously filed as Exhibit 4 to the Registrant’s Form 8-K filed November 28, 2006 and incorporated herein by this reference)

4(b)*		Amendment No. 1 to the Credit Agreement, dated as of February 23, 2007 among Regent Broadcasting, LLC, Regent Communications, Inc. and the lenders identified therein (without schedules and exhibits, with Regent has determined are not material) (previously filed as Exhibit 4(1) to the Registrants Form 8-K filed March 1, 2007 and incorporated here by this reference)

4(c)*		Rights Agreement dated as of May 19, 2003 between Regent Communications, Inc. and Fifth Third Bank (previously filed as Exhibit 4.1 to the Registrant’s Form 8-K filed May 20, 2003 and incorporated herein by this reference)

4(d)*		First Amendment to Rights Agreement dated and effective as of February 27, 2004 between Regent Communications, Inc., Fifth Third Bank, and Computershare Services, LLC (previously filed as Exhibit 4(c) to the Registrant’s Form 10-Q for the quarter ended September 30, 2004 and incorporated herein by this reference)

31(a)		Chief Executive Officer Rule 13a-14(a)/15d-14(a) Certification

31(b)		Chief Financial Officer Rule 13a-14(a)/15d-14(a) Certification

32(a)		Chief Executive Officer Section 1350 Certification

32(b)		Chief Financial Officer Section 1350 Certification


*		Incorporated by reference.

E-2


	Page
	Number
PART I FINANCIAL INFORMATION

Item 1. Financial Statements.

Condensed Consolidated Statements of Operations for the three months ended March 31, 2007 (unaudited) and March 31, 2006 (unaudited)		3

Condensed Consolidated Balance Sheets as of March 31, 2007 (unaudited) and December 31, 2006		4

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2007 (unaudited) and March 31, 2006 (unaudited)		5

Notes to Condensed Consolidated Financial Statements (unaudited)		6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		15

Item 3. Quantitative and Qualitative Disclosures About Market Risk		24

Item 4. Controls and Procedures		24

PART II OTHER INFORMATION

Item 1. Legal Proceedings		24

Item 1A. Risk Factors		25

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		25

Item 6. Exhibits		25
EX-31(A)
EX-31(B)
EX-32(A)
EX-32(B)


	REGENT COMMUNICATIONS, INC.
Date: May 10, 2007	By:	/s/ William L. Stakelin
		William L. Stakelin, President
		and Chief Executive Officer (Principal Executive Officer)


Date: May 10, 2007	By:	/s/ Anthony A. Vasconcellos
		Anthony A. Vasconcellos, Executive Vice
		President and Chief Financial Officer (Principal Accounting Officer)

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	/s/ Anthony A. Vasconcellos
	Executive Vice President and
	Chief Financial Officer



	/s/ William L. Stakelin
	William L. Stakelin
	Chief Executive Officer



	/s/ Anthony A. Vasconcellos
	Anthony A. Vasconcellos
	Chief Financial Officer