-----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, NoAuV5t/uISVC4QUAMWoDtxZJRZryARayRFMfoOvNfdCU9jq3QC2+x8zRoSp48Fa FW4a5xV2WHJ/vFogdBnV4g== 0000702808-97-000004.txt : 19970327 0000702808-97-000004.hdr.sgml : 19970327 ACCESSION NUMBER: 0000702808-97-000004 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970326 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970326 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: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-12404 FILM NUMBER: 97564096 BUSINESS ADDRESS: STREET 1: 50 E RIVERCENTER BLVD STREET 2: 12TH FLOOR CITY: COVINGTON STATE: KY ZIP: 41011 BUSINESS PHONE: 6066552267 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K(A) CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Date of Report: March 18, 1997 JACOR COMMUNICATIONS, INC. DELAWARE (State or Other Jurisdiction of Incorporation) 0-12404 31-0978313 (Commission File No.) (IRS Employer Identification No.) 50 East RiverCenter Boulevard 12th Floor Covington, KY 41017 (606) 655-2267 Item 2. Acquisition or Disposition of Assets As previously reported, on March 18, 1997, Jacor Communications Company ("JCC"), a wholly owned subsidiary of Jacor Communications, Inc. (the "Company"), and EFM Programming, Inc. ("Buyer"), a wholly owned subsidiary of JCC, entered into an Asset Purchase Agreement (the "Acquisition Agreement") with EFM Media Management, Inc., EFM Publishing, Inc., Pam Media, Inc. (collectively, the "Sellers") and certain shareholders of the Sellers. The description of that transaction is set forth in more detail in the Registrant's initial Form 8-K filed with the Securities and Exchange Commission on March 21, 1997. Item 7. Financial Statements and Exhibits Page (a) Financial Statements of Businesses Acquired. Report of Independent Accountants 4 Financial Statements: Combined Balance Sheets as of December 31, 1995 and 1996 5 Combined Statements of Operations for the years ended December 31, 1994, 1995 and 1996 6 Combined Statements of Changes in Retained Earnings for the years ended December 31, 1994, 1995 and 1996 7 Combined Statements of Cash Flows for the years ended December 31, 1994, 1995 and 1996 8 Notes to Financial Statements 9-13 (b) Pro Forma Financial Information. The pro forma financial information required to be filed by the Company as part of this Form 8-K require substantial effort on behalf of the Company and Sellers and has not yet been finalized on the date of this report. The Company will file such pro forma financial statements by amendment to this Form 8-K no later than May 21, 1997. (c) Exhibits 2.1 Asset Purchase Agreement dated as of March 17, 1997 among Jacor Communications Company ("JCC"), EFM Programming, Inc. ("Buyer"), and EFM Media Management, Inc., EFM Publishing, Inc., Pam Media, Inc. (collectively, the "Sellers") and certain shareholders of the Sellers (omitting schedules and exhibits not deemed material). * 23.1 Consent of Independent Accountants 99.1 Press Release dated March 18, 1997. * * Previously filed. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. JACOR COMMUNICATIONS, INC. March 26, 1997 By: R. Christopher Weber R. Christopher Weber, Senior Vice President and Chief Financial Officer REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of Jacor Communications, Inc. We have audited the accompanying combined balance sheets of EFM Media Management, Inc., EFM Publishing, Inc., and PAM Media, Inc., (the "Combined EFM Companies") as of December 31, 1995 and 1996 and related combined statements of operations, changes in retained earnings and cash flows for the years ended December 31, 1994, 1995 and 1996. These financial statements are the responsibility of the Combined EFM Companies' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principlees used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of the Combined EFM Companies as of December 31, 1995 and 1996 and the combined results of their operations and their cash flows for the years ended December 31, 1994, 1995 and 1996, in conformity with generally accepted accounting principles. Cincinnati, Ohio February 28, 1997 THE COMBINED EFM COMPANIES COMBINED BALANCE SHEETS as of December 31
1995 1996 Current assets: Cash and cash equivalents $ 3,325,273 $ 4,867,943 Accounts receivable 4,785,339 2,219,874 Investment securities 5,564,434 5,894,380 Prepaid expenses 1,553,205 1,292,591 Other 30,896 95,760 Total current assets 15,259,147 14,370,578 Property and equipment, net 175,592 153,173 Other 33,165 33,109 Total assets $15,467,904 $14,556,830 Current liabilities: Accounts payable and accrued liabilities $ 4,617,956 $ 4,739,223 Deferred income 8,436,506 6,415,585 Total current liabilities 13,054,462 11,154,808 Deferred income 2,380,006 3,321,642 Total liabilities 15,434,468 14,476,450 Commitments and contingencies Shareholders' equity: Common stock 2,020 2,020 Retained earnings 10,234 51,798 Net unrealized gain on investment securities 21,182 26,562 Total shareholders' equity 33,436 80,380 Total liabilities and shareholders' equity $15,467,904 $14,556,830 The accompanying notes are an integral part of the combined financial statements.
THE COMBINED EFM COMPANIES COMBINED STATEMENTS OF OPERATIONS for the years ended December 31
1994 1995 1996 Net revenue $45,169,563 $46,930,790 $47,356,777 Operating expenses 29,246,898 29,520,679 29,537,668 Depreciation 78,261 85,799 83,626 Corporate general and administrative expenses: Executive compensation 12,282,821 11,596,958 12,028,181 Other 1,459,798 1,632,610 1,617,205 Operating income 2,101,785 4,094,744 4,090,097 Other income, net 353,836 445,779 487,662 Net income $ 2,455,621 $ 4,540,523 $ 4,577,759 The accompanying notes are an integral part of the combined financial statements.
THE COMBINED EFM COMPANIES COMBINED STATEMENT OF CHANGES IN RETAINED EARNINGS for the years ended December 31
1994 1995 1996 Balance, beginning of year $ (10,225) $ (30,289) $ 10,234 Net income 2,455,621 4,540,523 4,577,759 Distributions to shareholders (2,475,685) (4,500,000) (4,536,195) Balance, end of year $ (30,289) $ 10,234 $ 51,798 The accompanying notes are an integral part of the combined financial statements.
THE COMBINED EFM COMPANIES COMBINED STATEMENTS OF CASH FLOWS for the years ended December 31
1994 1995 1996 Cash flow from operating adtivities: Net income $2,455,621 $4,540,523 $4,577,759 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 78,261 85,799 83,626 Changes in operating assets and liabilities: Accounts receivable 270,875 (2,220,218) 2,565,465 Prepaid expenses (386,359) 558,744 260,614 Accounts payable and accrued liabilities 4,415,637 (1,283,298) 121,267 Deferred income 1,838,311 (1,739,085) (1,079,285) Other (4,815) 120,559 (24,638) Net cash provided by operating activities 8,667,531 63,024 6,504,808 Cash flows from investing activities: Capital expenditures (188,679) (31,878) (61,207) Purchases of investments (2,997,894) (7,058,791) (5,746,293) Proceeds from sales of investments 2,941,219 6,488,880 5,421,727 Net cash used in investing activities (245,354) (601,789) (385,773) Cash flow from financing activities: Distributions to shareholders (2,475,685) (4,500,000) (4,536,195) Advances to shareholders (65,515) 83,435 (40,170) Net cash used in financing activities (2,541,200) (4,416,565) (4,576,365) Net increase (decrease) in cash and cash equivalents 5,880,977 (4,955,330) 1,542,670 Cash and cash equivalents at beginning of year 2,399,626 8,280,603 3,325,273 Cash and cash equivalents at end of year $8,280,603 $3,325,273 $4,867,943 The accompanying notes are an integral part of the combined financial statements.
THE COMBINED EFM COMPANIES NOTES TO COMBINED FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES AND DESCRIPTION OF BUSINESS: a. Description of Business: The accompanying combined financial statements include the operations of EFM Publishing, Inc. ("EFM Publishing"), EFM Media Management, Inc. ("EFM Media"), and PAM Media, Inc. ("PAM Media"), (collectively the "Combined EFM Companies"). The Combined EFM Companies produce two nationally syndicated radio talk shows and a nationally published newsletter. All significant intercompany accounts and transactions have been eliminated. b. Cash and Cash Equivalents: The Combined EFM Companies consider all highly liquid investments purchased with an original maturity of less than three months to be cash equivalents. c. Property and Equipment: Property and equipment are stated at cost less accumulated depreciation; depreciation is provided by accelerated methods over the estimated useful lives of five and seven years. d. Investment Securities: Investment in debt securities are considered available for sale and carried at fair value, based on quoted market prices. Unrealized gains and losses are reported as a separate component of stockholders' equity until realized. e. Revenues: Broadcast revenues consist of commercial broadcasting advertisements, net of agency commissions, and syndication fees from radio stations. Advertising revenues are recognized when the commercial is broadcast. Syndication fees received in advance are recorded as deferred revenue and recognized over the length of the agreement. Publishing revenue for subscription payments received in advance is recognized over the average length of all subscriptions. f. Advertising Costs: Direct-response advertising is capitalized and amortized over its expected period of future benefits. Direct-response advertising consists of television and radio advertisements, renewal notices sent to current newsletter subscribers and direct mail notices sent to former subscribers. The capitalized costs of the advertising are amortized over approximately one year. Advertising expense for 1994, 1995 and 1996 was approximately $4,563,000, $3,508,000 and $3,122,000, respectively. g. Concentrations of Credit Risk: Financial instruments which potentially subject the Combined EFM Companies to concentrations of credit risk consist principally of accounts receivable. Concentrations of credit risk associated with accounts receivable are limited due to the large number of customers comprising the Combined EFM Companies' customer base. NOTES TO COMBINED FINANCIAL STATEMENTS, Continued 1. ACCOUNTING POLICIES AND DESCRIPTION OF BUSINESS, Continued h. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. i. Income Taxes: The Combined EFM Companies have elected to be taxed as an "S" corporation under the Internal Revenue Code and New York State tax law. Accordingly, only the appropriate state and local income and franchise taxes have been provided for in the accompanying financial statements. 2. SUBSEQUENT EVENT: In March 1997, the Combined EFM Companies entered into an asset purchase agreement with Jacor Communications, Inc. ("Jacor"), for the sale of all operating assets of the Combined EFM Companies. 3. PROPERTY AND EQUIPMENT: Property and equipment at December 31, 1995 and 1996 consists of the following: 1995 1996 Computer equipment $ 224,997 $ 273,457 Furniture and fixtures 173,439 176,483 Other equipment - 9,703 398,436 459,643 Less accumulated depreciation (222,844) (306,470) $ 175,592 $ 153,173 NOTES TO COMBINED FINANCIAL STATEMENTS, Continued 4. INVESTMENT SECURITIES: A summary of the investment securities held by the Combined EFM Companies at December 31, 1995 and 1996 is as follows: December 31, 1995 Gross Gross Estimated Unrealized Unrealized Fair Value Gains Losses U.S. Treasury Securities $ 3,030,670 $ 35,934 $ Corporate Bonds 1,957,611 1,425 1,195 Bond Funds 576,153 14,982 $ 5,564,434 $ 37,359 $ 16,177 December 31, 1996 Gross Gross Estimated Unrealized Unrealized Fair Value Gains Losses U.S. Treasury Securities $ 2,506,719 $ 11,373 $ 8,182 Corporate Bonds 2,515,159 1,271 1,876 Bond Funds 872,502 23,976 $ 5,894,380 $ 36,620 $ 10,058 Contractual maturities of debt securities at December 31, 1996 are as follows: Due in: 1997 $ 2,503,857 1998 695,059 1999 248,400 2000 1,065,952 2001 1,257,186 Thereafter 123,926 $ 5,894,380 Net realized losses from the sale of investment securities in 1994, 1995 and 1996 were $731, $28,738 and $16,101, respectively. NOTES TO COMBINED FINANCIAL STATEMENTS, Continued 5. CAPITAL STOCK AND RELATED PARTY TRANSACTION: The shares of the Combined EFM Companies are owned or controlled by a sole shareholder and spouse. The following table sets forth the capitalization of the companies as of December 31, 1995 and 1996. Issued and Authorized Outstanding Par Value EFM Media 200 100 $ 1,000 EFM Publishing 200 100 $ 1,000 PAM Media 20,000 20 $ 20 EFM Media and PAM Media granted options to two senior executives to purchase approximately 35 and 5 unissued shares of EFM Media and PAM Media, respectively. The exercise price is equal to the book value of such shares based upon the most recent annual financial statements of the respective companies. The options expire ten years from the date of grant, and may be exercised at any time during that period. 6. COMMITMENTS AND CONTINGENCIES: a. Lease and Employment Agreement Obligations: The Combined EFM Companies lease facilities used in their operations under noncancelable operating leases. The Combined EFM Companies also have various employment agreements with certain radio personalities and the writer of its newsletter requiring minimum payments. Future minimum payments under lease and employment agreements are as follows: 1997 $ 881,846 1998 955,021 1999 81,140 Total commitments $1,918,007 NOTES TO COMBINED FINANCIAL STATEMENTS, Continued 6. COMMITMENTS AND CONTINGENCIES, Continued b. Legal Proceedings: The Combined EFM Companies are party to various legal proceedings. In the opinion of management, the ultimate resolution of such proceedings will not have a significant effect on the financial position or results of operations of the Combined EFM Companies. c. Talent Fee Arrangements: The Combined EFM Companies have entered into agreements with their on-air radio personalities whereby the personalities receive compensation based upon formulas defined within the agreements. In addition, the Combined EFM Companies have entered into an agreement with the writer of the newsletter whereby the writer and one additional party are entitled to receive a percentage of revenues less certain expenses, as defined within the agreement. 7. RETIREMENT PLAN: EFM Media maintains a defined contribution retirement plan covering substandially all employees who have met eligibility requirements. Employer contributions are made solely at the discretion of the employer; however, no such contributions have ever been made. EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of Jacor Communications, Inc. on Forms S-8 (File No. 33-65126, File No. 33-10329 and File No. 33-56385) and on Forms S- 3 (File No. 33-53612 and File No. 333-06639) of our report dated February 28, 1997, on our audits of the combined financial statements of the Combined EFM Companies as of December 31, 1995 and 1996 and for the years ended December 31, 1994, 1995 and 1996, which report is included in this Current Report on Form 8- K. COOPERS & LYBRAND L.L.P. Cincinnati, Ohio March 25, 1997 -----END PRIVACY-ENHANCED MESSAGE-----