-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UsHKKUpWPpIHa1oAwfOsECkwdBHyI78RmXGpXHtN/+Hff2uAXQvP4o/9DQdFF5Br NqB1rg0s2FNb7ZF8mMDWjg== 0000702808-96-000008.txt : 19960515 0000702808-96-000008.hdr.sgml : 19960515 ACCESSION NUMBER: 0000702808-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: JACOR COMMUNICATIONS INC CENTRAL INDEX KEY: 0000702808 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 310978313 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12404 FILM NUMBER: 96562790 BUSINESS ADDRESS: STREET 1: 1300 PNC CENTER STREET 2: 201 E FIFTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5136211300 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 0-12404 JACOR COMMUNICATIONS, INC. An Ohio Corporation Employer Identification No. 31-0978313 1300 PNC Center 201 East Fifth Street Cincinnati, Ohio 45202 Telephone (513) 621-1300 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 twelve 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 ninety days. Yes___X____ No_________ At May 10, 1996, 18,240,022 shares of common stock were outstanding. JACOR COMMUNICATIONS, INC. INDEX Page Number PART I. Financial Information Item 1. - Financial Statements Condensed Consolidated Balance Sheets as of March 31, 1996 and December 31, 1995 3 Condensed Consolidated Statements of Operations for the three months ended March 31, 1996 and 1995 4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1996 and 1995 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations 11 PART II. Other Information Item 6. - Exhibits and Reports on Form 8-K 18 Signatures 20 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) ______________
March 31, December 31, 1996 1995 ASSETS Current assets: Cash and cash equivalents $ 5,889,086 $ 7,436,779 Accounts receivable, less allowance for doubtful accounts of $1,792,000 in 1996 and $1,606,000 in 1995 25,301,411 25,262,410 Other current assets 8,459,513 3,916,140 Total current assets 39,650,010 36,615,329 Property and equipment, net 39,214,100 30,801,225 Intangible assets, net 165,282,175 127,157,762 Other assets 109,101,988 14,264,775 Total assets $353,248,273 $208,839,091 LIABILITIES Current liabilities: Accounts payable $ 2,670,017 $ 2,312,691 Accrued payroll 1,623,631 3,177,945 Accrued federal, state and local income tax 3,756,596 3,225,585 Other current liabilities 6,550,488 3,463,344 Total current liabilities 14,600,732 12,179,565 Long-term debt 183,500,000 45,500,000 Other liabilities 6,115,602 3,468,995 Deferred tax liability 8,657,456 8,617,456 Total liabilities 212,873,790 69,766,016 SHAREHOLDERS' EQUITY Common stock, no par value, $.10 per share stated value 1,823,723 1,815,721 Additional paid-in capital 117,101,914 116,614,230 Common stock warrants 387,998 388,055 Retained earnings 21,060,848 20,255,069 Total shareholders' equity 140,374,483 139,073,075 Total liabilities and shareholders' equity $353,248,273 $208,839,091 The accompanying notes are an integral part of the condensed consolidated financial statements.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the three months ended March 31, 1996 and 1995 (UNAUDITED) ____________
1996 1995 Broadcast revenue $ 33,572,314 $ 26,840,493 Less agency commissions 3,498,278 2,824,310 Net revenue 30,074,036 24,016,183 Broadcast operating expenses 23,870,578 19,959,660 Depreciation and amortization 2,619,466 2,111,971 Corporate general and administrative expenses 1,138,560 884,026 Operating income 2,445,432 1,060,526 Interest expense (2,111,496) (104,822) Gain on sale of radio stations 2,539,407 Other income, net 227,212 309,610 Income before income taxes and extraordinary loss 3,100,555 1,265,314 Income tax expense (1,259,000) (514,000) Income before extraordinary loss 1,841,555 751,314 Extraordinary loss, net of income tax credit (950,775) Net income $ 890,780 $ 751,314 Net income per common share: Before extraordinary loss $ 0.09 $ 0.04 Extraordinary loss (0.05) Net income per common share $ 0.04 $ 0.04 $ Number of common shares used in per share computations 20,502,752 21,347,440 The accompanying notes are an integral part of the condensed consolidated financial statements.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS for the three months ended March 31, 1996 and 1995 (UNAUDITED) ___________
1996 1995 Cash flows from operating activities: Net income $ 890,780 $ 751,314 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,010,964 686,522 Amortization of intangibles 1,608,502 1,425,449 Extraordinary loss 950,775 Provision for losses on accounts and notes receivable 354,583 277,892 Deferred income tax provision (benefit) 40,000 (50,000) Gain on sale of radio stations (2,539,407) Other (179,971) (198,570) Change in current assets and current liabilities net of effects of acquisitions: Accounts receivable 2,778,311 4,844,835 Other current assets (3,852,999) (767,393) Accounts payable 336,645 (273,728) Accrued payroll, accrued interest and other current liabilities 2,629,075 (371,551) Net cash provided by operating activities 4,027,258 6,324,770 Cash flows from investing activities: Capital expenditures (3,436,834) (707,183) Cash paid for acquisitions (48,100,000) Proceeds from sale of radio stations 6,453,626 Purchase of Noble warrant (52,775,170) Loans made in conjunction with acquisitions (41,625,000) Other (840,544) (33,029) Net cash used by investing activities (140,323,922) (740,212 ) Cash flows from financing activities: Proceeds from issuance of long-term debt 190,000,000 Proceeds from issuance of common stock 495,629 155,515 Reduction in long-term debt (52,000,000) Payment of finance cost (3,696,658) Payment of restructuring expenses (50,000) (50,000 ) Net cash provided by financing activities 134,748,971 105,515 Net increase (decrease) in cash and cash equivalents (1,547,693) 5,690,073 Cash and cash equivalents at beginning of period 7,436,779 26,974,838 Cash and cash equivalents at end of period $ 5,889,086 $32,664,911 The accompanying notes are an integral part of the condensed consolidated financial statements.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ___________ 1. FINANCIAL STATEMENTS The December 31, 1995 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Although 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 such rules and regulations, the Company believes that the disclosures are adequate to make the information presented not misleading and reflect all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of results of operations for such periods. Results for interim periods may not be indicative of results for the full year. It is suggested that these financial statements be read in conjunction with the consolidated financial statements for the year ended December 31, 1995 and the notes thereto. 2. ACQUISITIONS Noble Broadcast Group, Inc. In February 1996, the Company agreed to acquire Noble Broadcast Group, Inc. ("Noble"), for approximately $152,000,000 in cash plus related costs and expenses. The Company entered into an agreement with the stockholders of Noble to acquire all of the outstanding capital stock of Noble for approximately $12,500,000. At the same time, the Company also purchased a warrant for $52,775,170 entitling the Company to acquire a 79.1% equity interest in Noble (the ``Noble Warrant''). Upon consummation of the purchase of the outstanding Noble capital stock from the Noble stockholders and the exercise of the Noble Warrant, the Company will own 100% of the equity interests in Noble. The completion of the Company's acquisition of Noble is subject to various conditions including the receipt of consents from regulatory authorities. The Company will finance this acquisition from the proceeds of a new credit facility (see Note 4). JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ___________ 2. ACQUISITIONS, Continued Noble owns ten radio stations. Noble's radio stations serve Denver (two AM and two FM), St. Louis (one AM, two FM) and Toledo (one AM, two FM). Pending the closing of the Company's acquisition of Noble, the Company and Noble have entered into local marketing agreements with respect to Noble's radio stations in St. Louis and Toledo. Also, in February 1996, a wholly owned subsidiary of the Company purchased for approximately $47,000,000 certain assets from Noble relating to Noble's San Diego operations. As part of Noble's San Diego operations, Noble provided programming to and sold the air time for two radio stations serving San Diego (one AM, one FM), which programming and air time is now provided and sold by the Company. In addition, another wholly owned subsidiary of the Company provided a credit facility to Noble in the amount of $41,000,000. Citicasters Inc. In February 1996, the Company signed an agreement and plan of merger to acquire Citicasters Inc. (``Citicasters'') owner of 19 radio stations in eight U.S. markets as well as two network affiliated television stations. Citicasters' radio stations serve Atlanta, Cincinnati, Columbus, Kansas City, Phoenix, Portland, Sacramento, and Tampa. The television stations serve Cincinnati and Tampa. The agreement is subject to various conditions including the receipt of consents from regulatory authorities. In conjunction with this agreement, the Company has delivered to the seller a $75,000,000 non-refundable deposit in the form of a letter of credit. The letter of credit requires annual fees of 1.25% and can be drawn upon by Citicasters if the merger agreement is terminated. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ___________ 2. ACQUISITIONS, Continued The Company will pay $29.50 in cash per share, plus, in the event that the closing does not occur prior to October 1, 1996, for each full calendar month ending prior to the merger commencing with October 1996, an additional amount of $.22125 per share in cash. In addition, for each share of Citicasters common stock held, Citicasters shareholders will receive one Jacor warrant to purchase a fractional share of Jacor common stock (which fraction is anticipated to be .2035247) at a price of $28.00 per full share of Jacor common stock. If the merger is not consummated by October 1, 1996, the exercise price for the warrants to purchase 4,400,000 shares of Jacor stock will be reduced to $26.00 per share. The cash purchase price, which is approximately $630,000,000, will increase by approximately $5,000,000 for each full month subsequent to October, 1996 but prior to the merger. The above acquisitions will be accounted for as purchases. The excess cost over the fair value of identifiable net assets acquired will be amortized over 40 years. Assuming each of these acquisitions had taken place at the beginning of 1996 and 1995, respectively, unaudited pro forma consolidated results of operations would have been as follows: Three Months Ended March 31, 1996 1995 Net revenue $ 67,005 $ 64,591 Loss before extraordinary items (8,258) (7,022) Net loss per share (0.28) (0.23) 3. OTHER ASSETS The Company's other assets at March 31, 1996 and December 31, 1995 consist of the following: March 31, December 31, 1996 1995 Noble Warrant $ 52,775,170 Loan to Noble 40,000,000 Other 16,326,818 $14,264,775 $109,101,988 $14,264,775 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ___________ 4. DEBT AGREEMENT The Company's debt obligations at March 31, 1996 and December 31, 1995 consist of the following: March 31, December 31, 1996 1995 Indebtedness under the 1993 Credit Agreement $45,500,000 Indebtedness under the Existing Credit Facility (described below) $183,500,000 __________ $183,500,000 $45,500,000 On February 20, 1996 the Company entered into a new credit facility. The Company's new senior debt consists of two facilities (the " Facilities") provided under an agreement (the "Existing Credit Facility") with ten banks: a $190,000,000 reducing revolving credit facility (``Revolving A Loans'') and a $110,000,000 reducing revolving credit facility ("Revolving B Loans"). Both facilities mature on '' December 31, 2003. The indebtedness of the Company under the Facilities is collateralized by liens on substantially all of the assets of the Company and its operating subsidiaries and by a pledge of the operating subsidiaries' stock, and is guaranteed by those subsidiaries. The Revolving A Loans will be used primarily to refinance existing debt and to complete the Noble acquisition. The Revolving B Loans will be used to finance acquisitions, stock repurchases and for working capital and other general corporate purposes. The commitment under the Revolving A Loans will be reduced by $2,500,000 each quarter commencing January 1, 1997 and by increasing quarterly amounts in each succeeding year. The commitment under the Revolving B Loans will be reduced by $5,000,000 for each quarter commencing January 1, 1998. The Company is required to make mandatory prepayments of the Facilities equal to (i) net proceeds from any debt offerings, (ii) 50% of net proceeds from any equity offerings to bring the Company's leverage ratio down to 5 to 1, (iii) 50% of excess cash flow, as defined, beginning in 1997, and (iv) net after tax proceeds received from asset sales or other dispositions. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ___________ 4. DEBT AGREEMENT, Continued Interest under the Facilities is payable, at the option of the Company, at alternative rates equal to the Eurodollar rate plus 1% to 2 3/4% or the base rate announced by Banque Paribas plus up to 1 1/2%. The spreads over the Eurodollar rate and such base rate vary from time to time, depending upon the Company's financial leverage. The Company will pay quarterly commitment fees of 3/8% to 1/2% per annum on the unused portion of the commitment on both Facilities depending on the Company's financial leverage. The Company also is required to pay certain other fees to the agent and the lenders for the administration of the Facilities. The Existing Credit Facility contains a number of covenants which, among other things, require the Company to maintain specified financial ratios and impose certain limitations on the Company with respect to (i) the incurrence of additional indebtedness; (ii) investments and acquisitions, except under specified conditions; (iii) the incurrence of additional liens; (iv) the disposition of assets; (v) the payment of cash dividends; (vi) capital expenditures; and (vii) mergers, changes in business, and transactions with affiliates. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES During the three-months ended March 31, 1996, the Company entered into agreements to acquire Citicasters Inc. (``Citicasters'') and Noble Broadcast Group, Inc. (``Noble''). On February 12, 1996, the Company, JCAC, Inc., a Florida corporation and a wholly owned subsidiary of the Company, and Citicasters, entered into an agreement and plan of merger pursuant to which JCAC, Inc. will merge with and into Citicasters, with Citicasters as the surviving corporation. As a result of the merger, Citicasters will become a wholly owned subsidiary of the Company. The Company will pay $29.50 in cash per share, plus, in the event that the closing does not occur prior to October 1, 1996, for each full calendar month ending prior to the merger commencing with October 1996, an additional amount of $.22125 in cash per share. In addition, for each share of Citicasters common stock held, Citicasters shareholders will receive one warrant to purchase a fractional share of Company common stock (which fraction is anticipated to be .2035247) at a price of $28.00 per full share of common stock. If the merger is not consummated by October 1, 1996, the exercise price for the warrants to purchase 4,400,000 shares of Company stock will be reduced to $26.00 per share. The cash purchase price, which is approximately $630.0 million, will increase by approximately $5.0 million for each full month subsequent to October, 1996 but prior to the merger. The merger agreement may be terminated prior to the consummation of the merger by either the Company or Citicasters under various circumstances, including the failure to consummate the merger on or before May 31, 1997. If the merger agreement is terminated upon the occurrence of certain triggering events, including the failure to consummate the merger by May 31, 1997, Citicasters may draw upon an irrevocable direct pay letter of credit in the amount of $75.0 million obtained by the Company and issued to an escrow agent on behalf of Citicasters. Except in certain circumstances, the right to terminate the merger agreement and receive a maximum of $75.0 million pursuant to a draw on the letter of credit is Citicasters' exclusive remedy upon the occurrence of a triggering event. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES, Continued Citicasters' outstanding 9 3/4% Senior Subordinated Notes (the ``Notes'') will become obligations of the surviving corporation in the merger. As a result of a change in control covenant in the Notes, the holders of the Notes will have the option to cause the Company to purchase the Notes at 101% of the principal amount thereof. As part of the financing of the Citicasters acquisition, the Company is negotiating a New Credit Facility which will allow the Company to purchase the Notes, if necessary. The aggregate value of the merger, when consummated, is estimated to be approximately $799.4 million. On February 21, 1996, the Company entered into an agreement with the stockholders of Noble to acquire all of the capital stock of Noble for approximately $12.5 million. At the same time, the Company also purchased a warrant for approximately $52.8 million, entitling it to acquire a 79.1% equity interest in Noble. Upon consummation of the purchase of the outstanding Noble capital stock from the Noble stockholders and the exercise of the warrant, the Company will own 100% of the equity interests in Noble. The Company also purchased for approximately $47.0 million certain assets relating to Noble's San Diego operations. The San Diego operating assets included an exclusive sales agency agreement under which Noble provided programming to and sold the air time for two radio stations serving San Diego (XTRA- AM and XTRA-FM). These two radio stations are licensed by, and subject to the regulatory control of the Mexican government. As part of the purchase of Noble's San Diego operating assets, the Company was assigned all of Noble's rights under the exclusive sales agency agreement, and the Company is now providing the programming to and selling air time for such stations. In addition, another wholly owned subsidiary of the Company provided a credit facility to Noble in the amount of $41.0 million. The aggregate value of the Noble acquisition, when fully consummated, is estimated to be approximately $152.0 million, of which approximately $139.5 million has already been paid. In order to fund this acquisition, refinance the Company's outstanding debt of $45.5 million (as of December 31, 1995), and pay related costs and expenses of approximately $5.0 million, the Company entered into a $300.0 million reducing revolving credit facility (the ``Existing Credit Facility''). The Existing Credit Facility reduces on a quarterly basis commencing March 31, 1997, and bears interest at floating rates based on a Eurodollar rate or a bank base rate. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES, Continued During the first quarter, the Company made capital expenditures of approximately $3.4 million. The Company estimates that capital expenditures for 1996 will be approximately $6.0 million which includes approximately $2.5 million for the purchase during the first quarter of the building currently housing the offices and studios of its Tampa radio stations and to complete the relocation of the offices and studios of its Atlanta radio stations. The Company estimates that capital expenditures for the properties to be acquired from Citicasters and Noble would be approximately $4.0 million in the 12-month period following the consummation of the acquisitions. The actual level of spending will depend on a variety of factors, including general economic conditions and the Company's business. In connection with the merger, the Company anticipates entering into a new senior credit agreement (the ``New Credit Facility'') which would provide for availability of $600.0 million pursuant to; a $200.0 million reducing revolving facility under which the aggregate commitments would reduce on a semi-annual basis commencing three years from the date of the closing; a $300.0 million amortizing term loan that would reduce on a semi-annual basis commencing two years from the date of the closing, and; a $100.0 million amortizing term loan that would reduce on a semi- annual basis commencing three years from the date of the closing. It is anticipated that the New Credit Facility would bear interest at floating rates based on a Eurodollar rate or a bank base rate. The Company also anticipates that the New Credit Facility will provide the Company with additional credit for future acquisitions as well as working capital and other general corporate purposes. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES, Continued The cash to be paid in connection with the merger, the refinancing of Citicasters' bank debt, a portion of the cash to be paid in connection with the Noble acquisition and the repayment of certain existing indebtedness incurred in connection with such acquisition, together with the fees and expenses incurred in connection therewith, will be financed through (i) the anticipated net proceeds from a public offering of 11,250,000 shares of the Company common stock; (ii) the anticipated net proceeds of approximately $100.0 million from an offering by the Company of its Liquid Yield Option Notes due 2011; (iii) the anticipated net proceeds of an offering by the Company of $100.0 million aggregate principal amount of its Senior Subordinated Notes due 2006;(iv) the anticipated borrowings under the New Credit Facility and (v) excess cash. These funds together with cash generated from operations will be sufficient to meet the Company's liquidity and capital needs for the foreseeable future. The Company has filed with the Securities and Exchange Commission registration statements with respect to the public offering of its common stock, the Liquid Yield Option Notes, and the Senior Subordinated Notes. The Company expects to complete these offerings during the second quarter of 1996. As a result of entering into the Existing Credit Facility in the first quarter of 1996, Jacor expensed approximately $1.6 million of unamortized cost associated with its 1993 credit agreement. In connection with entering into the New Credit Facility, the Company anticipates that it will write off during the second quarter of 1996 approximately $3.4 million of unamortized cost associated with its Existing Credit Facility. The issuance of additional debt will negatively impact the Company's debt-to-equity ratio and its results of operations and cash flows due to higher amounts of interest expense, although the issuance of additional equity will soften this impact to some extent. Also, if the Company were not able to complete the merger due to certain circumstances, the Company would incur a one-time charge of $75.0 million relating to the non-refundable deposit. If debt were used to finance such payment, it would negatively impact the Company's future results of operations and impede the Company's future growth by limiting the amount available under the Existing Credit Facility. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS In the following analysis, management discusses station operating income excluding depreciation and amortization. Station operating income excluding depreciation and amortization should not be considered in isolation from, or as a substitute for, operating income, net income or cash flow and other consolidated income or cash flow statement data computed in accordance with generally accepted accounting principles or as a measure of a company's profitability or liquidity. Although this measure of performance is not calculated in accordance with generally accepted accounting principles, it is widely used in the broadcasting industry as a measure of a company's operating performance because it assists in comparing station performance on a consistent basis across companies without regard to depreciation and amortization, which can vary significantly depending on accounting methods (particularly where acquisitions are involved) or non-operating factors such as historical cost bases. Station operating income excluding depreciation and amortization also excludes the effect of corporate general and administrative expenses, which generally do not relate directly to station performance. THE THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1995 Broadcast revenue for the first quarter of 1996 was $33.6 million, an increase of $6.8 million or 25.1% from $26.8 million during the first quarter of 1995. This increase resulted from the revenue generated at those properties owned or operated during the first quarter of 1996 but not during the comparable 1995 period and, to a lesser extent, an increase in advertising rates. Agency commissions for the first quarter of 1996 were $3.5 million, an increase of $0.7 million or 23.9% from $2.8 million during the first quarter of 1995 due primarily to the increase in broadcast revenue. Broadcast operating expenses for the first quarter of 1996 were $23.9 million, an increase of $3.9 million or 19.6% from $20.0 million during the first quarter of 1995. These expenses increased primarily as a result of expenses incurred at those properties owned or operated during the first quarter of 1996 but not during the comparable 1995 period and, to a lesser extent, increased selling and other payroll costs and programming costs. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THE THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1995, Continued Station operating income excluding depreciation and amortization for the three months ended March 31, 1996 was $6.2 million, an increase of $2.1 million or 52.9% from the $4.1 million for the three months ended March 31, 1995. Depreciation and amortization for the first quarter of 1996 and 1995 was $2.6 million and $2.1 million, respectively. The increase from quarter-to-quarter resulted primarily from the acquisitions made by the Company during the second half of 1995. Operating income for the first quarter of 1996 was $2.4 million, an increase of $1.3 million or 130.6% from $1.1 million during the first quarter of 1995. Interest expense for the first quarter of 1996 was $2.1 million, an increase of $2.0 million from $0.1 million for the first quarter of 1995. The increase in interest expense resulted from the increase in the Company's outstanding long-term debt which is primarily related to the Company's acquisition activity. The gain on sale of radio stations in the first quarter of 1996 resulted from the Company's February sale of two FM radio stations in Knoxville. The extraordinary item in the first quarter of 1996 represented the write-off of unamortized costs associated with the Company's 1993 credit agreement which was replaced in February 1996 by the Company's Existing Credit Facility. Net income for the first quarter of 1996 and 1995 was $0.9 and $0.8 million, respectively. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CASH FLOWS Cash flows provided by operating activities, inclusive of working capital, were $4.0 million and $6.3 million for the three months ended March 31, 1996 and 1995, respectively. Cash flows provided by operating activities for the first quarter of 1996 resulted primarily from the add-back of $2.6 million of depreciation and amortization together with the add-back of $1.0 million for the extraordinary loss net of ($2.5) million from the gain on sale of radio stations to net income of $0.9 million for the period. The additional $2.0 million resulted principally from the net change in working capital of $1.9 million. Cash flows provided by operating activities for the comparable 1995 period resulted primarily from the add-back of $2.1 million of depreciation and amortization together with the net change in working capital of $3.4 million to net income of $0.8 million for the period. Cash flows used by investing activities were ($140.3) million and ($0.7) million for the three months ended March 31, 1996 and 1995, respectively. Investing activities include capital expenditures of $3.4 million and $0.7 million for the first quarter of 1996 and 1995, respectively. Investing activities during the first quarter of 1996 include expenditures of $48.1 million, $52.8 million, $41.6 million and $0.8 million, respectively, for acquisitions, the purchase of the Noble warrant, loans made to Noble and in connection with the Company's JSAs and other. Additionally, investing activities for the 1996 period is net of $6.5 million of proceeds from the sale of radio stations WMYU-FM and WWST-FM in Knoxville. Cash flows provided by financing activities were $134.7 million and $0.1 million for the three months ended March 31, 1996 and 1995, respectively. Cash flows provided by financing activities during the first quarter of 1996 resulted primarily from the $190.0 million in borrowings under the Existing Credit Facility, together with $0.5 million in proceeds received from the issuance of common stock upon the exercise of outstanding stock options net of the $52.0 million of reduction in long-term debt and $3.7 million of paid finance costs. Cash flows from financing activities during the comparable 1995 three-month period resulted primarily from the proceeds received from the issuance of common stock upon the exercise of outstanding stock options. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION __________ Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. Number Description Page 11 Statement re computation of consolidated income (loss) per common share 21 27 Financial Data Schedule 22 99 Press Release dated April 24, 1996 23 (b) Reports on Form 8-K 1. Form 8-K dated February 14, 1996. This Form 8-K described an agreement reached by the Company to acquire Noble Broadcast Group, Inc. and that the Company had received commitments for a new $300.0 million credit facility to finance this purchase. This Form 8-K also stated that David M. Schulte resigned as a Director of the Company. 2. Form 8-K dated February 27, 1996. This Form 8-K described an agreement and plan of merger between the Company, JCAC, Inc., a wholly owned subsidiary of the Company and Citicasters Inc., pursuant to which JCAC, Inc. will merge with and into Citicasters Inc. with Citicasters Inc. as the surviving corporation. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION, Continued 3. Form 8-K dated March 6, 1996, as amended on March 27, 1996. This Form 8-K described the terms of the Company's acquisition of Noble Broadcast Group, Inc. and also incorporated by reference to a March 22, 1996 Registration Statement on Form S-3 filed by the Company, the historical and pro forma financial information called for by Item 7 to Form 8-K. 4. Form 8-K dated March 27, 1996. This Form 8-K described the completion of certain steps towards the Company's acquisition of all of the outstanding capital stock of Citicasters Inc. This Form 8-K also incorporated by reference to a March 22, 1996 Registration Statement on Form S-3 filed by the Company, the historical and pro forma financial statements called for by Item 7 to Form 8-K. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. JACOR COMMUNICATIONS, INC. (Registrant) DATED: May 14, 1996 BY /s/ R. Christopher Weber R. Christopher Weber, Senior Vice President and Chief Financial Officer JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES EXHIBIT 11 Computation of Consolidated Income (Loss) Per Common Share for the three months ended March 31, 1996 and 1995
1996 1995 Income for primary and fully diluted computation: Income applicable to common shares before extraordinary loss $ 1,841,555 $ 751,314 Extraordinary loss, net of income tax credit (950,775) Income applicable to common shares $ 890,780 $ 751,314 Primary (1): Weighted average common shares and dilutive common stock equivalents: Common stock 18,183,381 19,597,789 Stock purchase warrants 1,124,373 749,223 Stock options 894,998 700,428 Contingently issuable common shares 300,000 300,000 20,502,752 21,347,440 Primary income per common share: Before extraordinary loss $ 0.09 $ 0.04 Net income $ 0.04 $ 0.04 ______________________ NOTES: 1. Fully diluted earnings per share is not presented since it approximates primary income per share.
EXHIBIT 99 JACOR REPORTS SIGNIFICANT IMPROVEMENTS IN OPERATIONS CINCINNATI, April 24 - Jacor Communications, Inc. (NASDAQ-JCOR), owner and operator of radio stations in eight U.S. markets, today reported a 53-percent increase in broadcast cash flow during the quarter ended March 31, 1996. Jacor's first-quarter broadcast cash flow rose to $6.2 million in 1996 from $4.1 million in the same quarter of 1995. First- quarter net revenues rose 25 percent to $30.1 million from $24.0 million in the 1995 period. On a ``same station'' basis - reflecting results from stations operated in the first quarter of both 1996 and 1995 - Jacor's broadcast cash flow rose 39 percent to $5.8 million for the first quarter of 1996 from $4.2 million in the same period last year. The company reported net income of $0.9 million, or 4 cents per share, during the first three months of 1996. Results for the same period last year reflected net income of $0.8 million or 4 cents per share. Jacor Communications, Inc., is headquartered in Cincinnati. The company plans to pursue growth through continued acquisitions of complementary stations in its existing markets, and radio groups or individual stations with significant presence in attractive markets. CONTACT: Chris Weber 513/621-1300 OR Kirk Brewer 312/466-4096 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the three months ended March 31, 1996 and 1995 (UNAUDITED) ____________
1996 1995 Broadcast revenue $ 33,572,314 $ 26,840,493 Less agency commissions 3,498,278 2,824,310 Net revenue 30,074,036 24,016,183 Broadcast operating expenses 23,870,578 19,959,660 Broadcast cash flow (1) 6,203,458 4,056,523 Depreciation and amortization 2,619,466 2,111,971 Corporate general and administrative expenses 1,138,560 884,026 Operating income 2,445,432 1,060,526 Interest expense (2,111,496) (104,822) Gain on sale of radio stations 2,539,407 Other income, net 227,646 309,610 Income before income taxes and extraordinary loss 3,100,989 1,265,314 Income tax expense (1,259,434) (514,000) Income before extraordinary loss 1,841,555 751,314 Extraordinary loss, net of income tax credit (950,775) Net income $ 890,780 $ 751,314 Net income per common share: Before extraordinary loss $ 0.09 $ 0.04 Extraordinary loss (0.05) Net income per common share $ 0.04 $ 0.04 Number of common shares used in per share computations 20,502,752 21,347,440 (1) Operating income before depreciation and amortization and corporate general and administrative expenses.
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5 1000 3-MOS DEC-31-1996 MAR-31-1996 5,889 0 27,093 1,792 0 39,650 47,579 8,365 353,248 14,601 183,500 1,824 0 0 138,550 353,248 0 33,572 0 27,369 3,758 355 0 3,101 1,259 0 0 (951) 0 891 .04 .04
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