-----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, Jqw4HG93WdVAaWvx1aLDRzXXyhHAl+72/nqmeekzPJeVBA5Xxbw9tL3jBouRPQME rBO2mQgqClREfXuYo6DLlw== 0001001748-03-000021.txt : 20030114 0001001748-03-000021.hdr.sgml : 20030114 20030113103648 ACCESSION NUMBER: 0001001748-03-000021 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030113 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000783005 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351542018 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-23264 FILM NUMBER: 03511719 BUSINESS ADDRESS: STREET 1: ONE EMMIS PLAZA STREET 2: 40 MONUMENT CIRCLE SUITE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3172660100 MAIL ADDRESS: STREET 1: ONE EMMIS PLAZA STREET 2: 40 MONUMENT CIRCLE #700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 FORMER COMPANY: FORMER CONFORMED NAME: EMMIS BROADCASTING CORPORATION DATE OF NAME CHANGE: 19920703 8-K 1 q03-8k.txt 8-K FOR PERIOD ENDING NOVEMBER 31, 2002 Microsoft Word 10.0.4009; SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): January 8, 2003 EMMIS COMMUNICATIONS CORPORATION EMMIS OPERATING COMPANY (Exact name of registrant as (Exact name of registrant as specified in its charter) specified in its charter) INDIANA INDIANA (State of incorporation or (State of incorporation or organization) organization) 0-23264 333-62172-13 (Commission file number) (Commission file number) 35-1542018 35-2141064 (I.R.S. Employer (I.R.S. Employer Identification No.) Identification No.) ONE EMMIS PLAZA ONE EMMIS PLAZA 40 MONUMENT CIRCLE 40 MONUMENT CIRCLE SUITE 700 SUITE 700 INDIANAPOLIS, INDIANA 46204 INDIANAPOLIS, INDIANA 46204 (Address of principal executive offices)(Address of principal executive offices) (317) 266-0100 (317) 266-0100 (Registrant's Telephone Number, (Registrant's Telephone Number, Including Area Code) Including Area Code) Item 5. Other Events. On January 8, 2003, we issued the press release attached as to this report as Exhibit 99.1. The text of that press release is incorporated in this Item by reference. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits EXHIBIT # DESCRIPTION 99.1 Press release dated January 8, 2003. Signatures. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EMMIS COMMUNICATIONS CORPORATION Date: January 9, 2003 By: /s/ J. Scott Enright ----------------------------------------------- J. Scott Enright, Vice President, Associate General Counsel and Secretary EMMIS OPERATING COMPANY Date: January 9, 2003 By: /s/ J. Scott Enright ----------------------------------------------- J. Scott Enright, Vice President, Associate General Counsel and Secretary EX-99 3 exhibit998k.txt PRESS RELEASE Microsoft Word 10.0.4009;5 Exhibit 99 1 A conference call regarding this earnings release is scheduled for 9 am Eastern, Wednesday, Jan. 8, 2003. Dial in at 1.630.395.0024 or log on to www.emmis.com Contacts: Walter Berger, EVP & CFO Kate Healey, Media & Investor Relations 317.266.0100 For Immediate Release Wednesday, Jan. 8, 2003 Emmis Communications Reports 3rd Q Results Emmis BCF Up 36%; Net Revenue Up 12% Indianapolis...Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its third fiscal quarter ending Nov. 30, 2002. For its third fiscal quarter, Emmis' broadcast cash flow (BCF) was $67.8 million, compared to $49.7 million for the same quarter of the prior year, an increase of 36%. Net revenue for the quarter was $155.5 million compared to $138.3 million for the same quarter of the prior year, an increase of 12%. "This really was a remarkable period for our company," Emmis Chairman and CEO Jeff Smulyan said. "We have continued to dramatically de-lever our balance sheet, and our New York radio performance has seen a tremendous rebound. Our television group has performed spectacularly by all measurable standards - in addition to great ratings, they outperformed in 13 of the 14 Emmis Television markets." These results significantly exceed the company's previous guidance as well as Wall Street estimates for revenues and broadcast cash flow. Earnings Per Share (EPS) was $0.16 compared to ($0.29) for the same quarter of the prior year. On a pro forma basis, net revenue for the quarter increased 15% and domestic radio net revenue increased 7%. Further, for the 3rd Quarter, Free Cash Flow (FCF) was $26.6 million compared to $3.6 million in the same quarter of the prior year. Emmis' after-tax cash flow (ATCF) was $35.6 million, an increase of 86% from the same quarter of the prior year. ATCF per share in the third quarter was $0.67, up from $0.40 in the same quarter of the prior year. Fall 2002 ratings information for the New York market was released by Arbitron earlier this week, and Emmis had stellar results. WQHT ranked a solid #1 in its target demographic (18-34) with a 9.4 share, 2.6 share points in front of its direct format competitor. WRKS' best ratings performance since Fall 1999 moved it to #3 25-54 with a 5.0 share, up from 12th place just last year. WQCD ranked #7 25-54 with a 4.0 share. As a cluster on a 12+ basis, Fall 2002 marked the highest aggregate Fall cluster share since 1997. Emmis' total debt-to-EBIDTA leverage (including senior discount notes) is now under 7x, compared with Emmis' February 28, 2002 leverage of 9.3x. Based on the guidance for its fiscal fourth quarter (listed below), Emmis' total debt-to-EBITDA leverage should be approximately 6.5x at February 28, 2003, with the company's senior bank leverage expected to be under 4x and Emmis Operating Company's total debt-to-EBITDA leverage expected to be under 5.5x. Add One/Emmis During the company's 3rd Quarter, Emmis signed a definitive agreement with Pegasus Communications Corporation to purchase WBPG-TV, the WB affiliate in Mobile/Pensacola, which will give Emmis a second television station in the nation's #63 market. The transaction is expected to close by the end of March 2003. Barry Mayo, a radio industry and New York City market veteran, was named as Senior Vice President/Market Manager of Emmis-New York in December. Mayo is a co-founder of Broadcasting Partners Incorporated and has served as a media consultant since 1995. Paul Fiddick, the co-founder of Heritage Media Corporation and former President of Multimedia, was named as President of Emmis International during Emmis' 3rd quarter. In December, an agreement was reached with the Hungarian broadcasting authority that resolved pending issues and extended Emmis' national license in Hungary through 2009. Also after the quarter end, Peter Lund, the former President and Chief Executive Officer of CBS Inc. and CBS Television and Cable, joined the Emmis Board of Directors. Emmis employees were informed Sept. 6, 2002, of the continuation of a 10% wage cut which is being supplemented with a corresponding 10% Emmis stock award. The extension of the plan, which is completing its first year, is expected to yield cash savings of approximately $14 million over the next twelve months. 4th Quarter Guidance Quarter ended 2/28/03 Quarter ended 2/28/02(A) %Change Net Revenues: Domestic Radio $50,400 48,000 5.0 Foreign Radio 3,200 4,814 -33.5 Total Radio 53,600 52,814 1.5 Television 51,000 47,112 8.3 Publishing 16,300 16,312 -0.1 Total net revenues 120,900 116,238 4.0 BCF/PCF: Domestic Radio 19,500 16,310 19.6 Foreign Radio 700 768 -8.9 Total Radio 20,200 17,078 18.3 Television 13,500 12,621 7.0 Publishing 1,500 584 156.8 Total BCF/PCF 35,200 30,283 16.2 Corporate Expenses 5,500 5,404 1.8 EBITDA $29,700 $24,879 19.4 (before certain charges) (A) Pro forma for the sale of Denver radio stations in May 2002. Revenues and expenses have been adjusted by approximately $1.8 million to reflect the reclassification of expenses related to non-traditional revenue. Emmis will host a conference call regarding this information on Wednesday, Jan. 8, 2003 at 9 a.m. Eastern at 1.630.395.0024, with a replay available until Wednesday, Jan. 15, 2003 at 1.402.220.3019, or listen on-line by logging on to www.emmis.com. Add Two/Emmis The Company evaluates performance of its operating entities based on broadcast cash flow (BCF) and publishing cash flow (PCF). Management believes that BCF and PCF are useful because they provide a meaningful comparison of operating performance between companies in the industry and serve as an indicator of the market value of a group of stations or publishing entities. BCF and PCF are generally recognized by the broadcast and publishing industries as a measure of performance and are used by analysts who report on the performance of broadcasting and publishing groups. BCF and PCF are not measures of liquidity or of performance in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on the basis of accounting principles generally accepted in the United States. Specifically, BCF and PCF do not take into account Emmis' debt service requirements and other commitments and, accordingly, BCF and PCF are not necessarily indicative of amounts that may be available for dividends, reinvestment in Emmis' business or other discretionary uses. Moreover, BCF and PCF are not standardized measures and may be calculated in a number of ways. Thus, our calculation of these non-GAAP measures may not be comparable to such non-GAAP measures calculated by other companies. Emmis defines BCF and PCF as revenues net of agency commissions and station operating expenses, excluding non-cash compensation. After Tax Cash Flow is defined by the company as net income plus depreciation and amortization, plus non-cash compensation, plus non-cash taxes, less preferred dividends, and plus non-cash and non-recurring items. The company defines Free Cash Flow (FCF) as net revenues less segment operating expenses (other than non-cash compensation), corporate expenses (other than non-cash compensation), interest expense (including interest associated with its 12 1/2 % Senior Discount Notes), cash taxes, capital expenditures, and preferred dividends. Emmis Communications - Great Media, Great People, Great Service sm Emmis Communications is an Indianapolis-based diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations. Emmis' 18 FM and 3 AM domestic radio stations serve the nation's largest markets of New York, Los Angeles and Chicago as well as Phoenix, St. Louis, Indianapolis and Terre Haute, IN. In addition, Emmis owns two radio networks, three international radio stations, 15 television stations, award-winning regional and specialty magazines, and ancillary businesses in broadcast sales and publishing. The information in this news release is being widely disseminated in accordance with the Securities & Exchange Commission's Regulation FD. Certain statements included above which are not statements of historical fact, including financial data for quarters or other periods that are not yet completed and statements identified with the words "continues," "expect," "will," or "would" are intended to be, and are, identified as "forward-looking statements," as defined in the Securities and Exchange Act of 1934, as amended, and involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Emmis to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others, general economic and business conditions; fluctuations in the demand for advertising; increased competition in the broadcasting industry including the implementation of competing formats in large markets; changes in the costs of programming; changes in interest rates; inability to grow through suitable acquisitions, including the desired radio; future terrorist attacks or other large-scale disasters; and other factors mentioned in documents filed by Emmis with the Securities and Exchange Commission, including the current report on Form 8-K/A, July 15, 2002. Emmis does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise. Note: Two-page financial schedule attached. Note: If you would like to receive Emmis news via email, please send an email to ir@emmis.com EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL DATA (Unaudited, dollars in thousands,except per share data)
Three months ended November 30, Nine months ended November 30, ------------------------------- ------------------------------ 2002 2001 2002 2001 ---- ---- ---- ---- OPERATING DATA: Net revenues: Radio $ 65,710 $ 66,623 $ 198,324 $ 206,868 Television 69,910 52,556 182,493 159,417 Publishing 19,924 19,110 54,755 54,904 Total net revenues (a) 155,544 138,289 435,572 421,189 Operating expenses, excluding noncash compensation: Radio 34,285 36,376 103,793 111,223 Television 37,752 35,959 109,816 105,834 Publishing 15,744 16,282 46,467 49,045 Segment operating expenses, excluding noncash compensation (a) 87,781 88,617 260,076 266,102 Time brokerage agreement fees - - - 479 Corporate expenses, excluding noncash compensation 5,571 5,354 15,750 14,879 Noncash compensation 6,470 1,559 17,600 5,890 Depreciation and amortization 10,738 25,935 32,090 75,157 Impairment loss - - 0 0 Restructuring fees and other - - - 768 ------- ------- ------- ------- Operating income 44,984 16,824 110,056 57,914 Interest expense (24,468) (32,055) (80,611) (99,204) Loss from unconsolidated affiliates (128) (1,366) (4,208)(b) (3,462) Gain (loss) on sale of assets (33) - 8,900 (c) - Other income (expense), net (385) (6) 872 1,730 ------- ------- ------- ------- Income (loss) before income taxes, extraordinary loss and accounting change 19,970 (16,603) 35,009 (43,022) Provision (benefit) for income taxes 9,156 (4,905) 15,808 (11,777) ----- ------ ------ ------- Income (loss) before extraordinary loss and accounting change 10,814 (11,698) 19,201 (31,245) Cumulative effect of accounting change, net of taxes of $102,600 in 2002 - - 167,400 - Extraordinary loss, net of taxes of $2,389 and $664 in 2002 and 2001, respectively - - 11,117 1,084 ------ ------- -------- ------- Net income (loss) 10,814 (11,698) (159,316) (32,329) Preferred stock dividends 2,246 2,246 6,738 6,738 ------- --------- ---------- --------- Net income (loss) available to common shareholders $ 8,568 $ (13,944) $ (166,054) $ (39,067) ======= ========= ========== ========= Basic net income (loss) per common share: Before accounting change and extraordinary loss $ 0.16 $ (0.29) $ 0.24 $ (0.81) Cumulative effect of accounting change, net of tax - - (3.16) - Extraordinary loss, net of tax - - (0.21) (0.02) ------ ------- ------ ------- Net income (loss) available to common shareholders $ 0.16 $ (0.29) $ (3.13) $ (0.83) ====== ======= ======= ======= Diluted net income (loss) per common share: Before accounting change and extraordinary loss $ 0.16 $ (0.29) $ 0.23 $ (0.81) Cumulative effect of accounting change, net of tax - - (3.14) - Extraordinary loss, net of tax - - (0.21) (0.02) ------ ------- ------- ------- Net income (loss) available to common shareholders $ 0.16 $ (0.29) $ (3.12) $ (0.83) ====== ======= ======= ======= Weighted average shares outstanding: Basic 53,358 47,415 53,019 47,322 Diluted 53,507 47,415 53,280 47,322
Three months ended November 30, Nine months ended November 30, ------------------------------- ------------------------------ 2002 2001 2002 2001 ---- ---- ---- ---- OTHER DATA: Broadcast/Publishing cash flow (d) 67,763 49,672 175,496 155,087 EBITDA before certain charges (e) 62,192 44,318 159,746 140,208 FREE CASH FLOW CALCULATION: Net revenues $ 155,544 $ 138,289 $ 435,572 $ 421,189 Less: Segment operating expenses 87,781 88,617 260,076 266,102 Less: Corporate expenses 5,571 5,354 15,750 14,879 Less: Interest expense 24,468 32,055 80,611 99,204 Less: Cash taxes - 191 630 1,249 Less: Capital expenditures 8,849 6,247 21,035 25,786 Less: Preferred dividends 2,246 2,246 6,738 6,738 Free cash flow $ 26,629 $ 3,579 $ 50,732 $ 7,231 ======== ======= ======== ======= Free cash flow per diluted share $ 0.50 $ 0.08 (f) $ 0.95 $ 0.15 (f) ====== ====== ====== ====== Diluted shares for FCF purposes (g) 53,507 47,570 53,280 47,762 AFTER TAX CASH FLOW CALCULATION: Net income (loss) $ 10,814 $ (11,698) $ (159,316) $ (32,329) Depreciation and amortization 10,738 25,935 32,090 75,157 Loss on donation of radio station 0 0 0 0 Programming restructuring cost 0 0 0 0 Abandonment of property and equipment 0 0 0 0 Non cash compensation 6,470 1,559 17,600 5,890 Non cash taxes (h) 9,871 4,955 26,171 13,741 Preferred dividends (2,246) (2,246) (6,738) (6,738) Noncash and nonrecurring items (i) - 653 175,117 3,154 ------ ------ ------ ------ After tax cash flow $ 35,647 $ 19,158 $ 84,924 $ 58,875 ======== ======== ======== ======== After tax cash flow per diluted share (f) $ 0.67 $ 0.40 $ 1.59 $ 1.23 ====== ====== ====== ====== Diluted shares for ATCF purposes (g) 53,507 47,570 53,280 47,762 SELECTED BALANCE SHEET INFORMATION: November 30, 2002 February 28, 2002 ----------------- ----------------- Total Cash and Cash Equivalents 8,255 6,362 Total Senior, Senior Subordinated and Senior Discount Debt 1,218,963 1,478,507
(a) Revenues and expenses have been adjusted to reflect the reclassification of expenses related to non-traditional revenue. (b) Includes $2.1 million noncash charge related to shut-down of LMIV. (c) Reflects gain on sale of Denver radio assets in May 2002. (d) Total net revenues less segment operating expenses. (e) Broadcast/Publishing cash flow less corporate expenses. (f) Diluted shares for FCF and ATCF purposes assumes conversion of stock awards that are antidilutive for EPS purposes. (g) If the preferred stock were converted, weighted average diluted shares outstanding for FCF and ATCF purposes would have been 57,187 and 51,250 for the three months ended November 30, 2002 and 2001, respectively and 56,960 and 51, 442 for the nine months ended November 30, 2002 and 2001, respectively. (h) Includes expected cash benefits associated with temporary differences and exercise of stock options. (i) Three months ended November 30, 2001 includes our share of the losses of LMIV, net of tax. Nine months ended November 30, 2002 includes LMIV losses and shut-down costs, gain on sale of assets, extraordinary loss, and cumulative effect of accounting change, all net of tax. Nine months ended November 30, 2001 includes restructuring fees, our share of the losses of LMIV and extraordinary loss, all net of tax. -----END PRIVACY-ENHANCED MESSAGE-----