-----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, A4yNPeR9AE73ne9MiSwhzaORNvCiXyM5Fl90Twn1+StJFbwy/s0OI+iO2f1NlUgG 4cJEqoK7h49g5xYM4fzIAQ== 0000702808-97-000007.txt : 19970507 0000702808-97-000007.hdr.sgml : 19970507 ACCESSION NUMBER: 0000702808-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970506 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12404 FILM NUMBER: 97595875 BUSINESS ADDRESS: STREET 1: 50 E RIVERCENTER BLVD STREET 2: 12TH FLOOR CITY: COVINGTON STATE: KY ZIP: 41011 BUSINESS PHONE: 6066552267 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, 1997 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. A Delaware Corporation Employer Identification No. 31-0978313 50 East RiverCenter Blvd. 12th Floor Covington, Kentucky 41011 Telephone (606) 655-2267 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 1, 1997, 34,894,320 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, 1997 and December 31, 1996 3 Condensed Consolidated Statements of Operations for the three months ended March 31, 1997 and 1996 4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II. Other Information Item 6. - Exhibits and Reports on Form 8-K 17 Signatures 19 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
March 31, December 31, 1997 1996 ASSETS Current assets: Cash and cash equivalents $ 12,418 $ 78,137 Accounts receivable, less allowance for doubtful accounts of $4,265 in 1997 and $3,950 in 1996 86,326 79,502 Prepaid expenses and other current assets 17,081 8,963 Total current assets 115,825 166,602 Property and equipment, net 157,631 131,488 Intangible assets, net 1,531,138 1,290,172 Other assets 87,827 116,680 Total assets $ 1,892,421 $1,704,942 LIABILITIES Current liabilities: Accounts payable, accrued expenses and other current liabilities $ 65,496 $ 55,532 Long-term debt, current portion 8,500 Total current liabilities 73,996 55,532 Long-term debt, net of current portion 688,500 670,000 5 1/2% Liquid Yield Option Notes 120,183 118,682 Other liabilities 111,035 108,914 Deferred tax liability 302,884 264,878 Commitments and contingencies SHAREHOLDERS' EQUITY Preferred Stock, authorized and unissued 4,000,000 shares - - Common Stock, no par value, $0.01 per share stated value; authorized 100,000,000 shares, issued and outstanding shares: 34,834,780 in 1997 and 31,287,221 in 1996 348 313 Additional paid-in capital 538,564 432,721 Common stock warrants 31,500 26,500 Unrealized gain on investments 8,191 2,042 Retained earnings 17,220 25,360 Total shareholders' equity 595,823 486,936 Total liabilities and shareholders' equity $ 1,892,421 $1,704,942 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, 1997 and 1996 (in thousands, except per share data)
1997 1996 Broadcast revenue $100,153 $ 33,572 Less agency commissions 11,325 3,498 Net revenue 88,828 30,074 Broadcast operating expenses 67,305 23,870 Depreciation and amortization 13,369 2,619 Corporate general and administrative expenses 2,762 1,139 Operating income 5,392 2,446 Interest expense (17,176) (2,111) Gain on sale of assets 4,695 2,539 Other income, net 405 227 (Loss) income before income taxes and extraordinary loss (6,684) 3,101 Income tax benefit (expense) 4,100 (1,259) (Loss) income before extraordinary loss (2,584) 1,842 Extraordinary loss, net of income tax benefit (5,556) (951) Net (loss) income $ (8,140) $ 891 Net (loss) income per common share: Before extraordinary loss $ (0.08) $ 0.09 Extraordinary loss (0.16) (0.05) Net (loss) income per common share $ (0.24) $ 0.04 Number of common shares used in per share computations 34,085 20,503 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, 1997 and 1996 (in thousands)
1997 1996 Cash flows from operating activities: Net cash provided by operating activities 4,503 4,027 Cash flows from investing activities: Capital expenditures (4,860) (3,437) Cash paid for acquisitions (136,190) (48,100) Proceeds from News Corp. Warrants sale 44,495 - Proceeds from sale of radio stations - 6,454 Purchase of Noble warrant - (52,775) Loans made in conjunction with acquisitions - (41,625) Other - (841) Net cash used by investing activities (96,555) (140,324) Cash flows from financing activities: Proceeds from issuance of long-term debt 77,000 190,000 Proceeds from issuance of common stock - 496 Repayment of long-term debt (50,000) (52,000) Payment of finance cost (667) (3,697) Other - (50) Net cash provided by financing activities 26,333 134,749 Net decrease in cash and cash equivalents (65,719) (1,548) Cash and cash equivalents at beginning of period 78,137 7,437 Cash and cash equivalents at end of period $ 12,418 $ 5,889 Supplemental schedule of non-cash investing and financing activities: Common shares issued in acquisitions $105,900 Warrants issued in acquisitions 5,000 The accompanying notes are an integral part of the condensed consolidated financial statements.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. FINANCIAL STATEMENTS The December 31, 1996 condensed 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, 1996 and the notes thereto. 2. ACQUISITIONS AND DISPOSITIONS Completed Radio Station Acquisitions In January 1997, the Company acquired the FCC licenses and broadcast assets of KIDO-AM and KLTB-FM in Boise, Idaho and KARO- FM in Caldwell, Idaho for a purchase price of $11.0 million from Colfax Communications, Inc. In February 1997, the Company purchased certain assets, a construction permit and related real estate for unconstructed radio station WEDD-FM in Englewood, Florida for an aggregate of $0.8 million from Sarasota-Charlotte Broadcasting Corporation. Also in February 1997, the Company acquired Regent Communications, Inc. for an approximate aggregate value of $179.9 million, which included (i) the issuance of approximately 3.55 million shares of common stock valued at $105.9 million, (ii) the issuance of warrants to acquire 500,000 shares of common stock at $40 per share valued at $5.0 million, (iii) the repayment of approximately $64.0 million in debt, and (iv) approximately $5.0 million in cash. Regent owned, operated or represented 19 radio stations located in Kansas City, Salt Lake City, Las Vegas, Louisville, and Charleston. In March 1997, the Company acquired the FCC licenses and broadcast assets of WHO-AM and KLYF-FM in Des Moines and WMT-AM and WMT-FM in Cedar Rapids for a purchase price of $52.5 million in cash from Palmer Broadcasting Limited Partnership. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 2. ACQUISITIONS AND DISPOSITIONS, Continued All of the above acquisitions have been accounted for as purchases. The excess cost over the fair value of net assets acquired is being amortized over 40 years. The results of operations of the acquired businesses are included in the Company's financial statements since the respective dates of acquisition. Assuming each of the first quarter 1997 and 1996 acquisitions had taken place at the beginning of 1996, unaudited pro forma consolidated results of operations would have been as follows: Pro Forma (Unaudited) Quarter Ended March 31, 1997 1996 Net revenue $ 118,360 $ 107,902 Net loss (4,665) (9,043) Net loss per common share ($0.11) ($0.21) Recently Completed Radio Station Acquisitions and Dispositions In April 1997, Jacor acquired the FCC licenses of WIOT-FM and WCWA- AM in Toledo, Ohio and the real estate and transmission facilities necessary to operate the stations for a purchase price of $13.0 million. In April 1997, Jacor exchanged the assets of two radio stations in Phoenix, KSLX-AM and KSLX-FM, for the assets of two radio stations in San Diego, KGB-FM and KPOP-AM. The assets exchanged were valued at approximately $45.0 million. In April 1997, Jacor exchanged the FCC licenses and broadcast assets of WKRQ-FM, licensed to Cincinnati, for the assets of WVOR- FM, WHAM-AM and WHTK-AM, licensed to Rochester, New York, and $16.0 million. In April 1997, Jacor acquired the FCC licenses and broadcast assets of WNVE-FM in Rochester, New York for a purchase price of $5.5 million. In April 1997, Jacor acquired the FCC licenses and broadcast assets of: (i) WIMA-AM and WIMT-FM, licensed in Lima, Ohio, (ii) WBUK-FM, licensed to Ft. Shawnee, Ohio, and (iii) the construction permit for WLVZ-FM, licensed to St. Mary's, Ohio, for an aggregate purchase price of $6.5 million. In April 1997, Jacor purchased the FCC licenses and broadcast assets of KBGO-FM in Las Vegas for $3.0 million in cash, pursuant to an agreement originally entered into by Regent Communications, Inc. prior to the closing of the Regent transaction. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 2. ACQUISITIONS AND DISPOSITIONS, Continued Recently Completed Radio Station Acquisitions and Dispositions In May 1997, Jacor acquired the FCC licenses of WSPB-AM, WSRZ-FM and WYNF-FM in Sarasota, Florida and purchased leasehold interests in real estate and transmission facilities necessary to operate the stations for a purchase price of $12.9 million. In May 1997, Jacor acquired the FCC licenses and broadcast assets of WAZU-FM (formerly WAHC-FM), licensed to Circleville, Ohio and WHQK-FM (formerly WAKS-FM), licensed to Marysville, Ohio, for approximately $8.3 million. In May 1997, Jacor acquired the FCC license and broadcast assets of radio station KOTK-AM in Portland, Oregon, for a purchase price of $8.3 million. Pending Radio Station Acquisitions and Dispositions The Company has also entered into agreements to purchase the FCC licenses and substantially all of the broadcast assets of 33 stations in the following broadcast areas: Total Escrow Purchase Amount Location Price Paid San Diego, California $ 27.0 $ 3.7 Lexington and Georgetown, Kentucky 24.1 1.2 Greeley and Ft. Collins, Colorado 7.2 3.6 Sebring, Florida 0.2 - Lexington, Louisville, and Munfordville, Kentucky 10.5 0.7 Irondequoit, Canadaigua and Honeoye Falls, New York 7.0 0.3 Spanish Fork, Utah 4.5 0.1 Santa Barbara and Carpinteria, California 15.0 0.3 Cleveland, Ohio 46.0 - Cheyenne, Wyoming 5.5 0.8 Sandusky, Ohio 7.7 0.5 Garden City and Eagle, Idaho 8.0 8.0 Salt Lake City, Utah 1.2 0.1 Total $163.9 $ 19.3 In the second quarter of 1997, Jacor entered into a binding agreement to sell KCBQ-AM, San Diego, WEZL-FM and WXLY-FM, Charleston, SC, and WXZZ-FM, Lexington to JS Communications, Inc. for $23.0 million. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 2. ACQUISITIONS AND DISPOSITIONS, Continued Pending and Completed Syndication and Other Acquisitions In April 1997, the Company acquired substantially all of the assets relating to the broadcast distribution and related print and electronic media publishing businesses of EFM Media Management, for $50.0 million. In April 1997, Jacor purchased the assets of NSN Network Services, a leading provider of satellite and network services for the radio broadcasting industry, for $11.0 million, consisting of approximately $9.3 million in cash and $1.7 million in shares of Jacor common stock. Also in April 1997, the Company acquired the assets of Airwatch Communications, Inc. and Airtraffic Communications, Inc. for a purchase price of approximately $18.0 million. Additionally, in April 1997, Jacor entered into an agreement to acquire Premiere Radio Networks, Inc. (the "Merger Agreement") for aggregate consideration of approximately $185.8 million. The Premiere stockholders will receive $13.50 in cash and .1525424 shares of Jacor common stock for each outstanding share of Premiere common stock. The Merger Agreement consideration is subject to adjustment if the agreement is not consummated by July 31, 1997 or, if the average closing price of Jacor common stock for the 10 trading days prior to consummation of the agreement is less than $26.50 or more than $32.50. 3. OTHER ASSETS The Company's investment in the News Corp. Warrants was sold in February 1997 for $44.5 million and the Company recorded a pretax gain of $4.7 million. 4. RECENTLY ISSUED ACCOUNTING STANDARDS In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share". The Company will implement the Statement in the fourth quarter 1997. Diluted Earnings Per Share, as defined by the Statement, is expected to approximate the Company's fully diluted Earnings Per Share, as currently calculated. The Company will also be required to present basic earnings per share, which will be calculated using the weighted average shares of common stock outstanding for the reporting period without giving effect to outstanding options, warrants or other potentially dilutive securities. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. GENERAL The following discussion should be read in conjunction with the financial statements beginning on page 3. 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 the 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. LIQUIDITY AND CAPITAL RESOURCES Radio Station Acquisitions completed during the three months ended March 31, 1997 In the first quarter of 1997, the Company completed acquisitions of 26 radio stations in 9 different broadcast areas for aggregate consideration of approximately $244 million, net of $5.8 million placed in escrow in 1996. The purchase price was funded through borrowings of $77 million under the Credit Facility, proceeds of $44.5 million from the sale of certain investments, the issuance of 3.55 million shares of Jacor common stock valued at $105.9 million, the issuance of warrants to acquire 500,000 shares of Jacor common stock valued at $5.0 million and the utilization of approximately $6 million in excess cash. The following is a description of the completed transactions: In January 1997, the Company acquired the FCC licenses and broadcast assets of KIDO-AM and KLTB-FM in Boise, Idaho and KARO-FM in Caldwell, Idaho for a purchase price of $11.0 million from Colfax Communications, Inc., of which $0.5 million was placed in escrow in 1996. In February 1997, the Company purchased certain assets, a construction permit and related real estate for unconstructed radio station WEDD-FM in Englewood, Florida for an aggregate of $0.8 million from Sarasota- Charlotte Broadcasting Corporation. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES LIQUIDITY AND CAPITAL RESOURCES, Continued Also in February 1997, the Company acquired Regent Communications, Inc. for an approximate aggregate value of $179.9 million, which included (i) the issuance of approximately 3.55 million shares of common stock valued at $105.9 million, (ii) the issuance of warrants to acquire 500,000 shares of common stock at $40 per share valued at $5.0 million, (iii) the repayment of approximately $64.0 million in debt, and (iv) approximately $5.0 million in cash. Regent owned, operated or represented 19 radio stations located in Kansas City, Salt Lake City, Las Vegas, Louisville, and Charleston. In March 1997, the Company acquired the FCC licenses and broadcast assets of WHO-AM and KLYF-FM in Des Moines and WMT-AM and WMT-FM in Cedar Rapids for a purchase price of $52.5 million in cash from Palmer Broadcasting Limited Partnership, of which $5.2 million was placed in escrow in 1996. Recently Completed Radio Station Acquisitions and Dispositions In the second quarter of 1997, the Company completed acquisitions of 16 radio stations in 11 broadcast areas for aggregate consideration of approximately $57.5 million, of which approximately $17.0 million was placed in escrow. The Company also exchanged one radio station for three additional stations plus $16 million in cash. The acquisitions were funded primarily from borrowings under the Credit Facility. The following is a description of the transactions: In April 1997, Jacor acquired the FCC licenses of WIOT-FM and WCWA-AM in Toledo, Ohio and the real estate and transmission facilities necessary to operate the stations for a purchase price of $13.0 million. In April 1997, Jacor exchanged the assets of two radio stations in Phoenix, KSLX-AM and KSLX-FM, for the assets of two radio stations in San Diego, KGB-FM and KPOP-AM. The assets exchanged were valued at approximately $45.0 million. In April 1997, Jacor exchanged the FCC licenses and broadcast assets of WKRQ-FM, licensed to Cincinnati, for the assets of WVOR-FM, WHAM-AM and WHTK-AM, licensed to Rochester, New York, and $16.0 million. In April 1997, Jacor acquired the FCC licenses and broadcast assets of WNVE-FM in Rochester, New York for a purchase price of $5.5 million. In April 1997, Jacor acquired (i) WIMA-AM and WIMT-FM, licensed in Lima, Ohio, (ii) WBUK-FM, licensed to Ft. Shawnee, Ohio, and (iii) the construction permit for WLVZ-FM, licensed to St. Mary's, Ohio, for an aggregate purchase price of $6.5 million. In April 1997, Jacor purchased the FCC licenses and broadcast assets of KBGO-FM in Las Vegas for $3.0 million in cash, pursuant to an agreement originally entered into by Regent Communications, Inc. prior to the closing of the Regent transaction. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES LIQUIDITY AND CAPITAL RESOURCES, Continued Recently Completed Radio Station Acquisitions and Dispositions In May 1997, Jacor acquired the FCC licenses of WSPB-AM, WSRZ-FM and WYNF-FM in Sarasota, Florida and purchased leasehold interests in real estate and transmission facilities necessary to operate the stations for a purchase price of $12.9 million. In May 1997, Jacor acquired the FCC licenses and other broadcast assets of WAZU-FM (formerly WAHC-FM), licensed to Circleville, Ohio and WHQK- FM (formerly WAKS-FM), licensed to Marysville, Ohio, for approximately $8.3 million. In May 1997, Jacor acquired the FCC license and broadcast assets of radio station KOTK-AM in Portland, Oregon, for a purchase price of $8.3 million. Pending Radio Station Acquisitions and Dispositions The Company has also entered into agreements which have not yet been consummated to purchase the FCC licenses and substantially all of the broadcast assets of 33 stations in the following broadcast areas: Total Escrow Purchase Amount Location Price Paid San Diego, California $ 27.0 $ 3.7 Lexington and Georgetown, Kentucky 24.1 1.2 Greeley and Ft. Collins, Colorado 7.2 3.6 Sebring, Florida 0.2 - Lexington, Louisville, and Munfordville, Kentucky 10.5 0.7 Irondequoit, Canadaigua and Honeoye Falls, New York 7.0 0.3 Spanish Fork, Utah 4.5 0.1 Santa Barbara and Carpinteria, California 15.0 0.3 Cleveland, Ohio 46.0 - Cheyenne, Wyoming 5.5 0.8 Sandusky, Ohio 7.7 0.5 Garden City and Eagle, Idaho 8.0 8.0 Salt Lake City, Utah 1.2 0.1 Total $163.9 $ 19.3 In the second quarter of 1997, Jacor entered into a binding agreement to sell KCBQ-AM, San Diego, WEZL-FM and WXLY-FM, Charleston, SC, and WXZZ-FM, Lexington to JS Communications, Inc. for $23.0 million. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES LIQUIDITY AND CAPITAL RESOURCES, Continued Pending and Completed Syndication and Other Acquisitions In April 1997, the Company acquired substantially all of the assets relating to the broadcast distribution and related print and electronic media publishing businesses of EFM Media Management, for $50.0 million in cash. In April 1997, Jacor purchased the assets of NSN Network Services, a leading provider of satellite and network services for the radio broadcasting industry, for $11.0 million, consisting of $9.3 million in cash and $1.7 million in shares of Jacor common stock. Also in April 1997, the Company acquired the assets of Airwatch Communications, Inc. and Airtraffic Communications, Inc. for a purchase price of approximately $18.0 million in cash. Additionally, in April 1997, Jacor entered into an agreement to acquire Premiere Radio Networks, Inc. (the "Merger Agreement") for aggregate consideration of approximately $185.8 million. The Premiere stockholders will receive $13.50 in cash and .1525424 shares of Jacor common stock for each outstanding share of Premiere common stock. The Merger Agreement consideration is subject to adjustment if the agreement is not consummated by July 31, 1997 or, if the average closing price of Jacor common stock for the 10 trading days prior to consummation of the agreement is less than $26.50 or more than $32.50. Pending Acquisition Financing As of May 1, 1997, the Company had approximately $562 million of outstanding indebtedness under the Credit Facility, which includes all borrowings necessary to fund the recently completed transactions, and available borrowings of $188 million. The Company will finance the pending acquisitions utilizing available borrowings under the Credit Facility, to the extent available, and proceeds from a proposed offering of equity securities under the omnibus shelf registration statement. The Company estimates, after completion of an offering and the completion of all the pending acquisitions, outstanding borrowings under the Credit Facility of approximately $628 million. The Company believes that various additional sources are also available to fund future acquisitions. Such sources include the issuance of additional equity and or debt securities of the Company. Credit Facilities and Other In June 1996, the Company entered into a new credit facility (the "Credit Facility") which provided availability of $600 million. During February 1997, the Credit Facility was amended resulting in expanded availability of up to $750 million. The Credit Facility provides loans to Jacor in three components: (i) a reducing revolving credit facility of up to $450 million under which the aggregate commitments would reduce on a semi-annual basis commencing in June 1999; (ii) a $200 million amortizing term loan that would reduce on a semi-annual basis commencing in December 1997; and (iii) a $100 million amortizing term loan that would reduce on a semi-annual basis commencing in December 1998. As of April 1997, the average interest rate on Credit Facility borrowings was 7.125%. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES LIQUIDITY AND CAPITAL RESOURCES, Continued The issuance of additional debt would negatively impact the Company's debt-to-equity ratio and its results of operations and cash flows due to higher amounts of interest expense. Any issuance of additional equity would soften this impact to some extent. RESULTS OF OPERATIONS The Three Months Ended March 31, 1997 Compared to the Three Months Ended March 31, 1996 Broadcast revenue for the first quarter of 1997 was $100.2 million, an increase of $66.6 million or 198.2% from $33.6 million during the first quarter of 1996. This increase resulted from the revenue generated at those properties owned or operated during the first quarter of 1997 but not during the comparable 1996 period. On a "same station" basis - reflecting results from stations operated in the first quarter of both 1997 and 1996 - broadcast revenue for 1997 was $35.8 million, an increase of $4.7 million or 15.1% from $31.1 million for 1996. This increase resulted from an increase in advertising rates in both local and national advertising. Agency commissions for the first quarter of 1997 were $11.3 million, an increase of $7.8 million or 223.8% from $3.5 million during the first quarter of 1996 due to the increase in broadcast revenue. Broadcast operating expenses for the first quarter of 1997 were $67.3 million, an increase of $43.4 million or 182.0% from $23.9 million during the first quarter of 1996. These expenses increased as a result of expenses incurred at those properties owned or operated during the first quarter of 1997 but not during the comparable 1996 period. On a "same station" basis, broadcast operating expenses for the first quarter of 1997 were $28.3 million, an increase of $2.9 million or 11.5% from $25.4 million for the first quarter of 1996. This increase resulted from increased selling, payroll and programming costs. Depreciation and amortization for the first quarter of 1997 and 1996 was $13.4 million and $2.6 million, respectively. This increase was due to the acquisitions in 1996 and the first quarter of 1997. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS, Continued Operating income for the first quarter of 1997 was $5.4 million, an increase of $3.0 million or 120.4% from an operating income of $2.4 million for the first quarter of 1996. Interest expense in the first quarter of 1997 was $17.2 million, an increase of $15.1 million from $2.1 million in the first quarter of 1996. Interest expense increased due to an increase in outstanding debt that was incurred in connection with acquisitions. The gain on the sale of assets in 1997 resulted from the sale of the News Corp. Warrants in February 1997. The gain on the sale of assets in 1996 resulted from the sale of two FM radio stations in Knoxville. Income tax benefit was $4.1 million for the first quarter of 1997 and income tax expense for the first quarter of 1996 was $1.3 million. The effective tax rate increased in the first quarter of 1997 due to an increase in non-deductible goodwill resulting from acquisitions. In the first quarter of 1997 the Company recognized an extraordinary loss of approximately $5.6 million related to the write off of debt financing costs. Also, in the first quarter of 1996, the Company recognized an extraordinary loss of approximately $1.0 million related to the write off of debt financing costs. Net loss for the first quarter of 1997 was $8.1 million, compared to net income of $0.9 million reported by the Company for the first quarter of 1996. CASH FLOWS Cash flows provided by operating activities, inclusive of working capital, were $4.5 million and $4.0 million for the three months ended March 31, 1997 and 1996, respectively. Cash flows provided by operating activities for the first quarter of 1997 resulted primarily from the add-back of $13.4 million of depreciation and amortization together with the add-back of $5.6 million for the extraordinary loss net of ($4.7) million from the gain on sale of radio stations together with the ($1.7) million net change in working capital resulting in a net loss of ($8.1) million for the period. Cash flows provided by operating activities for the comparable 1996 period 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. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS, Continued Cash flows used by investing activities were ($96.6) million and ($140.3) million for the three months ended March 31, 1997 and 1996, respectively. Investing activities include capital expenditures of $4.9 million and $3.4 million for the first quarter of 1997 and 1996, respectively. Investing activities during the first quarter of 1997 resulted primarily from the acquisition of broadcast properties of $131.1 million partially offset by the proceeds from the sale of the News Corp. Warrants. 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 $26.3 million and $134.7 million for the three months ended March 31, 1997 and 1996, respectively. Cash flows provided by financing activities during the first quarter of 1997 resulted primarily from the $27.0 million net borrowings under the Credit Facility partially offset by $0.7 million of paid finance costs. Cash flows provided by financing activities during the first quarter of 1996 resulted primarily from the $190.0 million in borrowings under the former 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. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. Number Description Page 11 Computation of Consolidated Income (Loss) Per Common Share 20 27 Financial Data Schedule 21 (b) Reports on Form 8-K 1. Form 8-K dated January 9, 1997. This Form 8-K described an agreement reached by the Company with American Radio Systems to exchange the assets of one radio station in Cincinnati for the assets of three radio stations in Rochester, New York, and an option to acquire the assets of a fourth Rochester radio station. 2. Form 8-K dated January 24, 1997. This Form 8-K described agreements between the Company and (i) James E. Champlin and various affiliates to purchase the assets of certain radio stations in Lexington, Louisville, and Munfordville, Kentucky, (ii) Lima Broadcasting Co. to purchase the assets of certain radio stations in Lima and Fort Shawnee, Ohio and the construction permit for a radio station in St. Marys, Ohio, and (iii) The Great Lakes Talking Wireless Machine, LLC, to purchase the assets of a radio station in South Bristol, New York. 3. Form 8-K(A) dated March 7, 1997. This Form 8-K(A) amended the Company's Form 8-K dated October 23, 1996, and described the completed merger of the Company and Regent Communications, Inc., and that the Company had acquired an additional radio station from Southwest Radio Las Vegas, Inc. and the right to acquire an additional radio station in Las Vegas. This Form 8-K(A) also described agreements to acquire three radio stations in Ironequoit, Canadaigua, and Honeoye Falls, New York from Auburn Cablevision, Inc., and one radio station in Portland, Oregon, from EXCL Communications, Inc. This Form 8-K(A) also described agreements the Company reached to sell its investment in warrants of News Corp. as well as its interest in Australia's Wonderland Partnership. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION 4. Form 8-K dated March 21, 1997. This Form 8-K described an agreement between the Company and EFM Media Management, Inc., EFM Publishing, Inc., and Pam Media, Inc. (collectively the "EFM Companies") whereby the Company will acquire all of the assets relating to the broadcast distribution and related print and electronic media publishing businesses of the EFM Companies. 5. Form 8-K(A) dated March 26, 1997. This Form 8-K(A) amended the Company's Form 8-K dated March 21, 1997, and included the audited financial statements of the EFM Companies. 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 5, 1997 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, 1997 and 1996 (in thousands, except per share data)
1997 1996 Income for primary and fully diluted computation: (Loss) Income $ (8,140) $ 891 Primary (1): Weighted average common shares and dilutive common stock equivalents: Common stock outstanding 32,588 18,183 Stock purchase warrants - 1,125 Stock options 1,197 895 Contingently issuable common shares 300 300 34,085 20,503 Primary (loss) income per common share: Before extraordinary loss $ (0.08) $ 0.09 Extraordinary loss $ (0.16) $ (0.05) $ (0.24) $ 0.04 NOTES: 1. Fully diluted income (loss) per share is not presented since it approximates primary income (loss) per share.
EX-27 2
5 1,000 3-MOS DEC-31-1997 MAR-31-1997 12,418 0 90,591 4,265 0 115,825 175,182 17,551 1,892,421 73,996 808,683 0 0 348 595,475 1,892,421 0 100,153 0 78,630 16,131 368 17,176 (6,684) (4,100) (2,584) 0 (5,556) 0 (8,140) (.24) (.24)
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