Children's Broadcasting Corporation Reports Fourth Quarter Profit, 1998 Year End Results.

MINNEAPOLIS--(BUSINESS WIRE)--April 1, 1999--Children's Broadcasting Corporation (CBC, NASDAQ:AAHS) announced today financial results for its fourth quarter and fiscal year ended December 31, 1998.

The Company reported a net income for the quarter ended December 31, 1998 of $19,281,539 or $2.91 per share, compared to a net loss of $5,799,390 or $0.88 per share, for the quarter ended December 31, 1997. Net income resulted from the sale of the Company's radio stations. Revenues for the fourth quarter of 1998 decreased to $595,399 from $1,605,362 for the fourth quarter of 1997. On January 30, 1998, the Company discontinued operation of Aahs World Radio, its 24-hour children's radio programming and the primary source of the Company's broadcast revenue. The cessation of such broadcasting has significantly impacted the Company's revenue.

The net income for fiscal 1998 was $7,569,795 or $1.03 per share, compared to a net loss of $14,558,353 or $2.33 for fiscal year 1997. The Company reported revenues for fiscal year 1998 of $2,566,647, a decrease of $3,287,794 from $5,854,441 for fiscal year 1997.

The impact of the sale of CBC radio stations was significant as it relates to the bottom line for 1998. Catholic Radio Network, LLC ("CRN") purchased seven radio stations for a total of $37.0 million, $15 million of which is a note receivable to be paid in April 2000. In addition, the Company sold its Detroit station, WCAR-AM, to 1090 Investments for $2.0 million and a Minneapolis and Houston station to Salem Communications for $2.7 million. Subsequently, in the first quarter of 1999, Radio Unica Corp. purchased WJDM/WBAH-AM; Elizabeth, New Jersey, KAHZ-AM, Fort Worth, Texas and KIDR-AM, Phoenix, Arizona from CBC for approximately $29.25 million in cash. The Company realized a total sale price of $71 million and a gain of approximately $43 million from the sale of all its stations.

With the sale of the stations completed, CBC's focus for 1999 is on its continued investment in Harmony Holdings, Inc. (HHI), in which CBC maintains a 49.1% interest, and the implementation of its business plan. With the closing of a division in HHI that had experienced several years of declining revenues, HHI is positioned to act as a positive income base for the company's overall future business plans. Part of that plan involved the company's starting a New York based production company, Populuxe, in the fall of 1998 and its acquisition in early 1999 of the well-respected Chelsea Pictures, Incorporated.

Christopher T. Dahl, chairman noted, "1998 has had a variety of ups and downs for the company. We are pleased to have ended the year on a positive note with the sale of our radio stations and the implementation of our new business plan." Mr. Dahl added, "I would like to thank our shareholders for understanding the difficulties during this frustrating time period. Our company began with nothing but an idea almost a decade ago and although we have dealt with some dubious unforeseen circumstances, we have a company well poised and capitalized to build shareholder value."

One of those circumstances was the ABC/Disney litigation: The September 30, 1998 ABC/Disney verdict in favor of CBC - which included $20 million for breach of contract by ABC, $10 million for misappropriation of trade secrets by ABC and $10 million for misappropriation of trade secrets by Disney - currently has a judgement pending before the court and the company intends to pursue its appeal of the judgement. Certain personnel and financial resources are being used to this end.

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements contained herein regarding the company's future outlook and opportunities are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the control of Children's Broadcasting Corporation and which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. For further information on these factors please refer to the company's Annual Report or Form 10-KSB for year ended December 31, 1998. -0-

                  CHILDREN'S BROADCASTING CORPORATION
                   CONDENSED STATEMENT OF OPERATIONS


                    Three Months Ended        Twelve Months Ended
                    December 31,              December 31,
                    1998        1997          1998       1997
                    -------------------       -------------------

Total Revenues      $595,399    $1,605,362   $2,566,647   $5,854,441

Operating Expenses  $2,708,131  $5,684,801   $11,715,016  $17,260,112

Loss From
 Operations        ($2,112,732)($4,079,439) ($9,148,369) ($11,405,671)

Interest Income    ($1,770,726)($1,302,660) ($5,185,259) ($2,566,259)
(Expense), Net     ------------ ----------- ------------ ------------

Net Income/(Loss)  $19,281,539 ($5,799,390)  $7,569,795  ($14,558,353)

Income/(Loss)      $2.91       ($0.88)       $1.03       ($2.33)
Per Share

Weighted Average
Common and Common
Equivalent Shares
Outstanding          6,630,000   6,553,000     6,676,000   6,246,000

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Amortization & Depreciation                   $1,949,340  $2,136,720

Interest Expenses                             $5,484,830  $2,656,858

Litigation Expenses                           $2,749,170  $2,835,504


TOTAL                                         $10,183,340 $7,629,082