-----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, IJfPP3rRvuKCACDqV2QKfSREHm/9UgCfJ0KkFhUIDJQD5Gy+29u7nJPOkoetJyco eQIcsLxHK7/SkHvyk4VoqA== /in/edgar/work/20000810/0000950152-00-005827/0000950152-00-005827.txt : 20000921 0000950152-00-005827.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950152-00-005827 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGENT COMMUNICATIONS INC CENTRAL INDEX KEY: 0000913015 STANDARD INDUSTRIAL CLASSIFICATION: [4832 ] IRS NUMBER: 311492857 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-46435 FILM NUMBER: 691603 BUSINESS ADDRESS: STREET 1: 50 EAST RIVERCENTER BOULEVARD STREET 2: SUITE 180 CITY: COVINGTON STATE: KY ZIP: 41011 BUSINESS PHONE: 6062920030 MAIL ADDRESS: STREET 1: 50 EAST RIVERCENTER BLVD STREET 2: SUITE 180 CITY: COVINGTON STATE: KY ZIP: 41011 10-Q 1 e10-q.txt REGENT COMMUNICATIONS, INC. 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO ______________ COMMISSION FILE NUMBER 0-15392 REGENT COMMUNICATIONS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 31-1492857 ------------------------------- ------------------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 50 EAST RIVERCENTER BOULEVARD SUITE 180 COVINGTON, KENTUCKY 41011 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (859) 292-0030 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 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 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.01 par value - 34,649,794 shares outstanding as of August 4, 2000 2 REGENT COMMUNICATIONS, INC. FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2000 INDEX
PART I FINANCIAL INFORMATION Page Number ------ Item 1. Financial Statements Condensed Consolidated Statements of Operations for the three months and six months ended June 30, 2000 (unaudited) and June 30, 1999 (unaudited) ....................... 3 Condensed Consolidated Balance Sheets as of June 30, 2000 (unaudited) and December 31, 1999 ................. 4 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2000 (unaudited) and June 30, 1999 (unaudited).................................... 5 Notes to Condensed Consolidated Financial Statements (unaudited) ......... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ....................................... 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk................ 13 PART II OTHER INFORMATION Item 1. Legal Proceedings......................................................... 14 Item 2. Changes in Securities and Use of Proceeds................................. 14 Item 4. Submission of Matters to a Vote of Security Holders....................... 14 Item 5. Other Information......................................................... 14 Item 6. Exhibits and Reports on Form 8-K ......................................... 14
-2- 3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2000 1999 2000 1999 ------------ ------------ ------------ ------------ Gross broadcast revenues $ 11,610,908 $ 6,802,937 $ 19,707,729 $ 11,628,861 Less agency commissions (950,348) (487,634) (1,570,100) (793,568) ------------ ------------ ------------ ------------ Net broadcast revenues 10,660,560 6,315,303 18,137,629 10,835,293 Station operating expenses 7,024,397 4,358,220 12,697,296 8,146,685 Depreciation and amortization 1,763,339 897,605 3,268,853 1,669,314 Corporate general and administrative expenses 1,145,622 544,109 2,131,451 1,159,130 ------------ ------------ ------------ ------------ Operating income (loss) 727,202 515,369 40,029 (139,836) Interest expense 241,661 624,341 2,478,014 1,486,807 Write-down of carrying value of assets held for sale -- 149,542 -- 149,542 Other income, net 479,960 1,904 728,566 85,040 ------------ ------------ ------------ ------------ Income(loss) before income taxes and extraordinary items 965,501 (256,610) (1,709,419) (1,691,145) Income tax expense -- -- -- -- ------------ ------------ ------------ ------------ Income(loss) before extraordinary item 965,501 (256,610) (1,709,419) (1,691,145) Extraordinary loss on extinguishment of debt, net of taxes -- -- (1,114,124) -- ------------ ------------ ------------ ------------ Net income (loss) $ 965,501 $ (256,610) $ (2,823,543) $ (1,691,145) ============ ============ ============ ============ Income (loss) applicable to common shares: Net income (loss) $ 965,501 $ (256,610) $ (2,823,543) $ (1,691,145) Preferred stock dividend requirements -- (1,521,808) (628,568) (2,561,000) Preferred stock accretion -- -- (26,611,258) -- ------------ ------------ ------------ ------------ Income (loss) applicable to common shares $ 965,501 $ (1,778,418) $(30,063,369) $ (4,252,145) ============ ============ ============ ============ Basic income (loss) per common share: Income (loss) before extraordinary items $ .03 $ (7.41) $ (0.98) $ (17.72) Extraordinary items -- -- (0.04) -- ------------ ------------ ------------ ------------ Basic net income (loss) per common share $ .03 $ (7.41) $ (1.02) $ (17.72) ============ ============ ============ ============ Diluted income (loss) per common share: Income (loss) before extraordinary items $ .03 $ (7.41) $ (0.98) $ (17.72) Extraordinary items -- -- (0.04) -- ------------ ------------ ------------ ------------ Diluted net income (loss) per common share $ .03 $ (7.41) $ (1.02) $ (17.72) ============ ============ ============ ============ Weighted average number of common shares used in determining the earnings per share calculation: Basic 34,630,311 240,000 29,365,072 240,000 Diluted 35,597,503 240,000 29,365,072 240,000
The accompanying notes are an integral part of these financial statements. -3- 4
REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2000 December 31, 1999 --------------- ------------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 33,791,764 $ 3,410,410 Accounts receivable, less allowance for doubtful accounts of $343,000 in 2000 and $231,000 in 1999 7,688,849 4,681,802 Other current assets 495,511 236,996 Assets held for sale 2,000,000 2,000,000 ------------- ------------- Total current assets 43,976,124 10,329,208 Property and equipment, net 17,722,753 12,373,274 Intangible assets, net 119,738,104 58,869,287 Escrow deposit on station acquisitions 5,300,000 -- Other assets, net 1,890,324 2,155,386 ------------- ------------- Total assets $ 188,627,305 $ 83,727,155 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 1,530,322 $ 1,061,757 Accrued expenses 1,898,071 1,879,135 Interest payable 6,286 111,194 Current portion of long-term debt 60,000 62,500 ------------- ------------- Total current liabilities 3,494,679 3,114,586 ------------- ------------- Long-term debt, less current portion 540,000 25,331,307 Warrants and other long-term liabilities 91,756 3,825,225 ------------- ------------- Total liabilities 4,126,435 32,271,118 Redeemable preferred stock: Series A convertible preferred stock, $5.00 stated value, 620,000 shares authorized; -0- and 620,000 shares issued and outstanding at June 30, 2000 and December 31, 1999, respectively -- 4,580,109 Series B senior convertible preferred stock, $5.00 stated value, 1,000,000 shares authorized; -0- and 1,000,000 shares issued and outstanding at June 30, 2000 and December 31, 1999, respectively -- 7,322,054 Series C convertible preferred stock, $5.00 stated value, -0- and 400,640 shares issued and outstanding at June 30, 2000 and December 31, 1999, respectively -- 670,318 Series D convertible preferred stock, $5.00 stated value, 1,000,000 shares authorized; -0- and 1,000,000 issued and outstanding at June 30, 2000 and December 31, 1999, respectively -- 7,081,441 Series F convertible preferred stock, $5.00 stated value, 4,100,000 shares authorized; -0- and 4,100,000 shares issued and outstanding at June 30, 2000 and December 31, 1999, respectively -- 29,202,566 Series G convertible preferred stock, $5.00 stated value, 1,800,000 shares authorized; -0- and 372,406 shares issued and outstanding at June 30, 2000 and December 31, 1999, respectively -- 2,608,446 Series H convertible preferred stock, $5.50 stated value, 2,200,000 shares authorized; -0- and 2,181,817 shares issued and outstanding at June 30, 2000 and December 31, 1999, respectively -- 14,658,805 Series K convertible preferred stock, $5.50 stated value, 4,100,000 shares authorized; -0- and 3,545,453 shares issued and outstanding at June 30, 2000 and December 31, 1999, respectively -- 23,141,613 ------------- ------------- Total redeemable preferred stock -- 89,265,352 Stockholders' equity (deficit): Preferred stock: Series C convertible preferred stock, $5.00 stated value, 4,000,000 shares authorized; -0- and 3,382,980 shares issued and outstanding at June 30, 2000 and December 31, 1999, respectively -- 1,445,126 Series E convertible preferred stock, $5.00 stated value, 5,000,000 shares authorized; -0- and 447,842 shares issued and outstanding at June 30, 2000 and December 31, 1999, respectively -- 2,239,210 Common stock, $.01 par value, 100,000,000 shares authorized; 34,924,946 and 240,000 shares issued at June 30, 2000 and December 31, 1999, respectively (Note 3) 349,251 2,400 Treasury shares, 275,152 and -0- shares at cost at June 30, 2000 and December 31, 1999, respectively (1,513,336) -- Additional paid-in capital 256,559,423 -- Retained deficit (70,894,468) (41,496,051) ------------- ------------- Total stockholders' equity (deficit) 184,500,870 (37,809,315) ------------- ------------- Total liabilities and stockholders' equity $ 188,627,305 $ 83,727,155 ============= =============
The accompanying notes are an integral part of these financial statements. -4- 5 REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30, --------------------------------------- 2000 1999 ------------- ------------ Cash flows from operating activities: Net cash provided by (used in) operating activities $ 446,949 $ (1,825,876) Cash flows from investing activities: Acquisitions of radio stations, net of cash acquired (68,043,371) (13,339,872) Proceeds from insurance on fire claim 97,897 -- Capital expenditures (787,624) (986,727) Proceeds from sale of radio stations -- 1,600,000 Escrow deposit for acquisition of radio stations (5,300,000) -- ------------- ------------ Net cash used in investing activities (74,033,098) (12,726,599) Cash flows from financing activities: Proceeds from long-term debt -- 9,300,000 Proceeds from issuance of common and convertible preferred stocks 156,937,723 13,621,390 Payment on buyback of treasury shares (1,513,336) -- Payment of preferred stock dividends (7,296,324) -- Redemption of Series B convertible preferred stock, including dividends (5,856,575) -- Principal payments on long-term debt (24,793,807) (4,997,500) Payments for deferred financing costs (1,904,021) (274,558) Payment of issuance costs (11,606,157) (1,815,398) ------------- ------------ Net cash provided by financing activities 103,967,503 15,833,934 ------------- ------------ Net increase in cash and cash equivalents 30,381,354 1,281,459 Cash and cash equivalents at beginning of period 3,410,410 478,545 ------------- ------------ Cash and cash equivalents at end of period $ 33,791,764 $ 1,760,004 ============= ============ Supplemental schedule of non-cash financing and investing activities: Common stock issued in conjunction with the acquisition of stations in Utica-Rome and Watertown, New York $ 850,000 -- Supplemental disclosure of cash flow information: Cash paid for interest $ 941,387 $ 2,114,462
The accompanying notes are an integral part of these financial statements. -5- 6 REGENT COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION Regent Communications, Inc. (including its wholly-owned subsidiaries, "Regent") was formed to acquire, own and operate radio stations in medium-sized and small markets in the United States. The condensed consolidated financial statements of Regent have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and, in the opinion of management, include all adjustments necessary for a fair presentation of the results of operations, financial position and cash flows for each period shown. All adjustments are of normal and recurring nature except for those outlined in Notes 2, 3, 4 and 5. 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 SEC rules and regulations. Results for interim periods may not be indicative of results for the full year. The December 31, 1999 condensed balance sheet was derived from audited financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in Regent's Form 10-K/A for the year ended December 31, 1999. 2. CONSUMMATED AND PENDING ACQUISITIONS AND DISPOSITIONS On March 1, 1999, Regent sold the FCC licenses and related assets used in the operations of WSSP (FM) in Charleston, South Carolina for approximately $1,600,000 in cash. On May 6, 1999, Regent consummated the acquisition of the FCC licenses and related assets used in the operations of WJON(AM), WWJO(FM) and KMXK(FM) in St. Cloud, Minnesota for approximately $12,700,000 in cash. The purchase was financed by the issuance of $5,082,000 of Series F convertible preferred stock and borrowings under Regent's senior reducing credit facility. Approximately $9,093,000 of the purchase price was allocated to the FCC licenses and goodwill and is being amortized over a 40-year period, and the remaining $3,607,000 was allocated to property and equipment. On August 1, 1999, Regent sold the FCC licenses and related assets used in the operations of KCBQ(AM) in San Diego, California for approximately $6,000,000 in cash. On September 1, 1999, Regent purchased the FCC licenses and related assets used in the operations of radio stations WXKC(FM), WRIE(AM) and WXTA(FM) in the Erie, Pennsylvania market for approximately $13,500,000 in cash. The purchase was financed by approximately $6,300,000 in proceeds from the issuance of Series H convertible preferred stock and borrowings under Regent's senior reducing credit facility. Approximately $12,400,000 of the purchase price was allocated to the FCC licenses and goodwill and is being amortized over a 40-year period. The remaining $1,100,000 was allocated to property and equipment and to a non-compete agreement. On October 15, 1999, Regent consummated the sale of the FCC licenses and related assets of KZGL(FM), KVNA(FM) and KVNA(AM) in Kingman, Arizona for approximately $5,400,000 in cash. On November 5, 1999, Regent sold the FCC licenses and related assets of KRLT(FM) and KOWL(AM) in South Lake Tahoe, California for approximately $1,250,000 in cash. -6- 7 On December 1, 1999, Regent began operating radio station KZAP(FM) in Chico, California under a time brokerage agreement. On March 29, 2000, Regent entered into a merger agreement to acquire the stock of KZAP, Inc., owner of KZAP(FM), in exchange for 233,333 shares of Regent's common stock, subject to possible adjustment according to the provisions of the merger agreement. Regent anticipates closing this purchase during the second half of 2000 following receipt of FCC approval. On January 28, 2000, Regent purchased the FCC licenses and related assets used in the operations of radio stations WODZ(FM), WLZW(FM), WFRG(FM), WIBX(AM) and WRUN(AM) in Utica-Rome, New York and WCIZ(FM), WFRY(FM), WTNY(AM) and WUZZ(AM) in Watertown, New York for approximately $43,825,000 in cash and 100,000 shares of Regent's common stock. Approximately $40,800,000 of the total purchase price was allocated to the FCC licenses and goodwill and is being amortized over a 20-year period. The remaining $3,875,000 was allocated to property and equipment. On February 1, 2000, Regent purchased the FCC licenses and related assets used in the operations of radio stations KLAQ(FM), KSII(FM) and KROD(AM) in El Paso, Texas for approximately $23,500,000 in cash. Approximately $21,750,000 of the purchase price was allocated to the FCC licenses and goodwill and is being amortized over a 20-year period. The remaining $1,750,000 of the purchase price was allocated to property and equipment. The results of operations of the acquired businesses are included in Regent's financial statements since their respective dates of acquisition. The following unaudited pro forma data summarize the combined results of operations of Regent, together with the operations of the stations acquired in 1999 and 2000, but excluding the operations of the South Lake Tahoe and Kingman stations disposed of in the fourth quarter of 1999, as though the acquisition and disposition of these operations had occurred at the beginning of each of the periods presented. Regent's 1999 dispositions of WSSP(FM) and KCBQ(AM) are not material to the results of Regent and therefore have not been excluded from the 1999 pro forma results.
Six Months Ended June 30, ---------------------------- 2000 1999 ---- ---- (unaudited) Net broadcast revenues $19,117,152 $18,732,545 Loss before extraordinary items (1,541,370) (1,311,650) Net loss (2,655,494) (1,311,650) Net loss per common share before extraordinary items: Basic and diluted $ (0.94) $ (0.47) Net loss per common share: Basic and diluted $ (0.98) $ (0.47)
These unaudited pro forma amounts do not purport to be indicative of the results that might have occurred if the foregoing transactions had, in fact, been consummated at the beginning of the six-month periods nor are they indicative of future operations. -7- 8 On March 12, 2000, Regent entered into an agreement with Clear Channel Broadcasting, Inc., Capstar Radio Operating Company and their affiliates. Under this agreement, as amended, Regent agreed to exchange its eight stations serving the Mansfield, Ohio (2 FM/1 AM) and Victorville, California (3 FM/2 AM) markets plus $80,465,000 in cash for 10 stations serving the Grand Rapids, Michigan (3 FM and 1 AM) and Albany, New York (4 FM/2 AM) markets. Regent made an escrow deposit in the amount of $5,000,000 and agreed to pay liquidated damages in the amount of $28,000,000 if Regent fails to perform its obligations under the agreement. Regent anticipates closing this transaction during the third quarter of 2000 following regulatory approvals and the satisfaction of other conditions. On March 29, 2000, Regent entered into an agreement with Yavapai Broadcasting Corporation to sell substantially all the assets used in the operations of radio stations KZGL(FM), KVNA(AM) and KVNA(FM) in Flagstaff, Arizona for a cash sale price of $2,000,000. On May 1, 2000, Yavapai began providing programming and other services to the Flagstaff stations under a time brokerage agreement. Regent anticipates closing the disposition in the third quarter of 2000 following receipt of the FCC's approval of the transaction. On June 21, 2000, Regent entered into an agreement with StarCom, Inc. to acquire in a merger with StarCom, Inc., two FM and one AM radio stations serving the St. Cloud, Minnesota market for a total of $5,025,000 in cash. The purchase will be funded by borrowings under Regent's new bank credit facility. Regent made an escrow deposit in the amount of $250,000. On July 1, 2000, Regent began providing programming and other services to the stations under a time brokerage agreement. 3. INITIAL PUBLIC OFFERING OF COMMON STOCK On January 28, 2000, Regent consummated an initial public offering of 16,000,000 shares of its common stock at an initial offering price of $8.50 per share. On February 7, 2000, the underwriters purchased an additional 2,400,000 shares of Regent's common stock upon exercise of their over-allotment option. Regent received total proceeds from completion of the offering, net of underwriter discounts, commissions and estimated expenses related to the offering, of $143,836,000. Of these proceeds, Regent used $67,325,000 to fund the acquisitions of stations in Utica-Rome, New York and Watertown, New York and in El Paso, Texas; $27,052,000 to pay in full the amounts borrowed, including accrued interest and related fees, under its prior bank credit facility and fees related to its new bank credit facility; $7,296,000 to pay or reserve for payment accumulated, unpaid dividends on all series of convertible preferred stock converted into common stock; $5,857,000 to redeem all outstanding shares of its Series B convertible preferred stock, including accumulated unpaid dividends; and $1,513,000 to repurchase shares of its common stock from an affiliate of one of the underwriters in order to comply with rules of the National Association of Securities Dealers, Inc. Regent has used and intends to use the balance of the proceeds for working capital needs and the Clear Channel/ Capstar transaction. In conjunction with the initial public offering of common stock, Regent redeemed 1,000,000 shares of its Series B convertible preferred stock, which constituted all outstanding shares of that series, for a redemption price of $5,857,000, being the original price paid for those shares of $5.00 per share plus accumulated, unpaid dividends on those shares. In addition, Regent required the conversion into common stock on a one-for-one basis of 15,775,839 shares of convertible preferred stock in accordance with the terms of the preferred stock. These shares represented the balance of Regent's outstanding shares of convertible preferred stock. Regent paid or has set aside for payment accumulated, unpaid dividends on those shares in the total amount of $7,296,000. Also in conjunction with the initial public offering, "put" rights associated with common stock purchase warrants issued in connection with the issuance of Regent's Series B and Series F convertible preferred stock were terminated. Warrants for 100,000 shares of Regent's common stock were exercised on March 20, 2000 (see Note 5). The remaining warrants, entitling the holders to purchase a total of 810,000 shares of Regent's common stock at $5.00 per share, remain outstanding. Regent had previously classified these warrants as long-term liabilities due to the associated "put" rights. The warrant liabilities as of December 31, 1999 were reclassified to additional paid in capital as of January 28, 2000. Also, from January 1, 2000 to January 28, 2000, approximately $1,500,000 was charged to interest expense to account for an increase in the fair value of these warrants. -8- 9 Regent adjusted the carrying values of its Series A, Series C, Series D, Series F, Series G, Series H, and Series K convertible preferred stock to fair value through January 28, 2000. This adjustment was recognized as a charge to retained deficit (since there was no additional paid in capital) resulting in an adjustment to loss from continuing operations attributable to common stockholders. 4. LONG-TERM DEBT On January 27, 2000, Regent Broadcasting, Inc., a wholly-owned subsidiary of Regent Communications, Inc., as the borrower, entered into a credit agreement with a group of lenders which provides for a senior reducing revolving credit facility expiring December 31, 2006 with an initial aggregate revolving commitment of up to $125,000,000 (including a commitment to issue letters of credit of up to $25,000,000 in aggregate face amount, subject to the maximum revolving commitment available) and an additional revolving loan facility with a maximum aggregate amount of $50,000,000 available, subject to the terms of the credit agreement, which converts, after two years, to a term loan maturing December 31, 2006. Regent incurred $1,956,000 in financing costs related to this credit agreement, which are being amortized over the life of the agreement. This revolving credit facility is available for working capital and acquisitions, including related acquisition expenses. There were no borrowings outstanding under the new credit facility at June 30, 2000. On January 28, 2000, Regent paid off the outstanding debt, accrued interest and related fees totaling approximately $25,096,000 to the Bank of Montreal. The pay-off was completed using proceeds from an initial public offering of Regent's common stock, which was completed on January 28, 2000. This final paydown resulted in an extraordinary loss of approximately $1,114,000, net of income tax, from the write-off of deferred financing costs. 5. CAPITAL STOCK On January 28, 2000, Regent issued 100,000 shares of its common stock to principals of the sellers in conjunction with the acquisition of stations in the Utica-Rome and Watertown, New York markets. On March 20, 2000, Regent received $500,000 in cash and issued 100,000 shares of its common stock to CFE, Inc. upon the exercise of outstanding warrants issued in 1998 in connection with the issuance of Series B and F convertible preferred stock to its affiliate, General Electric Capital Corporation. 6. EARNINGS PER SHARE Regent has adopted the provisions of SFAS 128, "Earnings Per Share." SFAS 128 calls for the dual presentation of basic and diluted earnings per share ("EPS"). Basic EPS is based upon the weighted average common shares outstanding during the period. Diluted EPS reflects the potential dilution that would occur if common stock equivalents were exercised. The effects of the assumed exercise of outstanding options to purchase 1,905,903 shares of common stock and warrants to purchase 890,000 shares of common stock are dilutive for the second quarter of 2000, but not for the other periods presented.
Weighted Average Diluted Common Shares Outstanding Three Months Ended Six Months Ended June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 ------------- ------------- ------------- ------------- Basic Common Shares 34,630,311 240,000 29,365,072 240,000 Dilutive effect of stock options and warrants 967,192 -- -- -- ---------- ------- ---------- ------- Diluted Common Shares 35,597,503 240,000 29,365,072 240,000 ========== ======= ========== =======
-9- 10 7. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board issued SFAS 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 prescribes the accounting treatment for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. Regent may employ financial instruments to manage its exposure to fluctuations in interest rates. Regent does not hold or issue such financial instruments for trading purposes. Regent will adopt SFAS 133, as required in the year 2001, and does not expect the impact of adoption to be material. The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial Statements," which is effective for the fourth quarter of 2000. In SAB 101, the SEC staff expressed its views regarding the appropriate recognition of revenue with regard to a variety of circumstances, some of which are of particular relevance to Regent. Regent has begun to evaluate SAB 101 and does not expect the impact of adoption to be material. In March 2000, the Financial Accounting Standards Board issued FASB Interpretation No. 44 (FIN 44), "Accounting for Certain Transactions Including Stock Compensation--an Interpretation of APB Opinion No. 25." FIN 44 provides guidance for certain issues that arose in applying APB Opinion No. 25, "Accounting for Stock Issued to Employees." Regent will adopt FIN 44, as required in the third quarter of 2000, and does not expect the impact of adoption to be material. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The following discussion should be read in conjunction with the condensed consolidated financial statements. Results for the interim periods may not be indicative of the results for the full years. A comparison of the three and six months ended June 30, 2000 versus June 30, 1999 follows: Our results from operations for the first three and six months of 2000 showed significant increases over the same period of 1999, primarily due to the recent acquisitions of stations in St. Cloud, Minnesota; Erie, Pennsylvania; Utica-Rome, New York; Watertown, New York; and El Paso, Texas. Net broadcast revenues for the second quarter of 2000 increased by 69% from $6,315,000 to $10,661,000; station operating expenses increased 61% from $4,358,000 to $7,024,000, and depreciation and amortization increased 96% from $898,000 to $1,763,000. We experienced a 111% increase from $544,000 to $1,146,000 in corporate general and administrative expenses in 2000 compared to 1999 as a result of increasing the corporate infrastructure to support a company which is both larger and has its equity traded on a national exchange. Interest expense decreased 61% from $624,000 to $242,000 as a result of the payoff of our outstanding bank credit facility with proceeds from our initial public offering completed January 28, 2000. Other income, net was $480,000, significantly favorable to the second quarter of 1999 reflecting an increase in interest income earned in the second quarter of 2000 on the net proceeds from the initial public offering. Income per common share for the second quarter of 2000 was $0.03. Comparison of per common share data for the second quarter of 2000 to that of the comparable 1999 quarter is not meaningful, as there were only 240,000 common shares outstanding at June 30, 1999. Net broadcast revenues for the first six months increased by 67% from $10,835,000 to $18,138,000; station operating expenses increased 56% from $8,147,000 to $12,697,000, and depreciation and amortization increased 96% from $1,669,000 to $3,269,000. Corporate general and administrative expenses increased 84% from $1,159,000 to $2,131,000 reflecting the increased infrastructure required to support a larger company. Interest expense increased 67% from $1,487,000 to $2,478,000 reflecting the $1,494,000 increase in warrant liability which was adjusted to fair market value as of January 28, 2000. Upon completion of the public offering, this entire liability was reclassified to additional paid in capital. Other income was $640,000 higher than the prior year reflecting the increased interest income earned on the outstanding cash received from the initial public offering. The performance of a radio station group, such as ours, is customarily measured by its ability to generate broadcast cash flow. The term "broadcast cash flow" means operating income (loss) before depreciation and amortization and corporate general and administrative expenses, excluding barter activity. Although broadcast cash flow is not a measure of performance calculated in accordance with generally accepted accounting principles, we believe that broadcast cash flow is accepted by the broadcasting industry as a generally recognized measure of performance and is used by analysts who report publicly on the performance of broadcasting companies. Nevertheless, this measure should not be considered in isolation or as a substitute for operating income, net income, net cash provided by operating activities or any other measure for determining our operating performance or liquidity that is calculated in accordance with generally accepted accounting principles. During the second quarter of 2000 in comparison to the same period of 1999, our broadcast cash flow increased by 86% from $1,957,000 to $3,636,000. For the first six months of 2000 compared to the same period of 1999, broadcast cash flows increased by 119% from $2,421,000 to $5,291,000. -10- 11 While acquisitions have affected the comparability of our 2000 operating results to those of 1999, we believe meaningful quarter-to-quarter comparisons can be made for results of operations for those markets in which we have been operating for five full quarters, exclusive of the Flagstaff, Mansfield, Palmdale and Victorville markets, which the Company intends to sell. This group of comparable markets is currently represented by three markets and 13 stations. In these comparable markets, for the three months ended June 30, 2000 as compared to the same period in 1999, our net broadcast revenues, excluding barter revenues, increased 9.5% from $2,200,000 to $2,408,000 and broadcast cash flow increased 12.6% from $595,000 to $670,000. For the first six months ended June 30, 2000 as compared to the same period in 1999, comparable market net broadcast revenues, excluding barter revenues, increased 12.7% from $3,789,000 to $4,270,000 and broadcast cash flow increased 33.5% from $679,000 to $906,000. LIQUIDITY AND CAPITAL RESOURCES In the six months ended June 30, 2000, we generated net cash from operations of $446,949 compared with usage of $1,825,876 for 1999. The primary reasons for this difference were the payoff in the first quarter of 1999 of approximately $1,200,000 of professional fees related to our acquisitions completed in June 1998 as well as lower interest payments in 2000 as we paid off outstanding debt in January 2000. For the six months ended June 30, 2000, proceeds from the issuance of common stock provided all the funds necessary to pay off outstanding long-term debt, redeem our Series B convertible preferred stock, pay all accrued unpaid preferred dividends, fund the acquisitions of stations in El Paso, Texas and Utica-Rome and Watertown, New York, and meet requirements for ongoing operating activities and capital expenditures. As a result, we experienced a net increase in cash for the first six months of 2000 of $30,381,354 as compared to an increase of $1,281,459 for the same period in 1999. Our former bank credit facility provided for a senior reducing revolving credit facility with an original commitment of up to $55,000,000 expiring March 31, 2005 (the commitment was $32,425,000 at December 31, 1999). This facility permitted the borrowing of available credit for working capital and acquisitions, including related acquisition expenses. In addition, subject to available credit, we could request from time to time that our lenders issue letters of credit on the same terms as the credit facility. On January 28, 2000, the outstanding balance under our former bank credit facility, including accrued interest and related fees, totaling approximately $25,096,000 was paid and the credit facility was terminated. In conjunction with the termination of the credit facility, approximately $1,114,000 of deferred financing fees relating to this credit facility were written off in the first fiscal quarter of 2000 and are reflected in the Statement of Operations as an extraordinary item. On January 27, 2000 we entered into a new $125,000,000 senior secured seven-year reducing revolving bank credit facility. This facility also provides for an additional $50,000,000 on substantially the same terms to fund future acquisitions, which will be available for 24 months and thereafter will convert to a term loan maturing December 31, 2006. This new bank credit facility permits the borrowing of available credit for working capital requirements and general corporate purposes, including transaction fees and expenses, and to fund pending and permitted future acquisitions. The new facility permits us to request from time to time that the lenders issue letters of credit in an amount up to $25,000,000 in accordance with the same lending provisions. The commitment, and our maximum borrowings, will reduce over five years beginning in 2002 as follows: December 31, Commitment Amount 2001........................................$125,000,000 2002.........................................106,250,000 2003..........................................87,500,000 2004..........................................62,500,000 2005..........................................37,500,000 2006.................................................-0- The $25,000,000 letter of credit sub-limit also reduces proportionately but not below $15,000,000. Mandatory prepayments and commitment reductions will also be required from certain asset sales, subordinated debt proceeds, excess cash flow amounts and sales of equity securities. Under the new bank credit facility, we are required to maintain a minimum interest rate coverage ratio, minimum fixed charge coverage ratio, maximum corporate overhead and maximum financial leverage ratio and to observe negative covenants customary for facilities of this type. Borrowings under -11- 12 the new credit facility bear interest at a rate equal to (a) the higher of the rate announced or published publicly from time to time by the agent as its corporate base of interest or the Overnight Federal Funds Rate plus 0.5%, in either case plus the applicable margin determined under the credit facility, or (b) the reserve-adjusted Eurodollar Rate plus the applicable margin. We are required to pay certain fees to the agent and the lenders for the underwriting commitment, administration and use of the credit facility. Our indebtedness under this credit facility is collateralized by liens on substantially all of our assets and by a pledge of our operating and license subsidiaries' stock and is guaranteed by these subsidiaries. On January 28, 2000, we closed on an offering of 16,000,000 shares of our common stock. On February 7, 2000, the underwriters exercised their overallotment of an additional 2,400,000 shares. All shares were sold at $8.50 per share, resulting in gross proceeds of $156,400,000. Net proceeds were approximately $143,836,000. Approximately $27,052,000 of the proceeds were used to repay all borrowings, accrued interest and related fees under our former bank credit facility along with the fees associated with entering into the new bank credit facility. Approximately $67,325,000 of the proceeds were used to fund our acquisitions in Utica-Rome and Watertown, New York, which closed on January 28, 2000, and our acquisition in El Paso, Texas, which closed on February 1, 2000. Approximately $5,900,000 of the proceeds were used to redeem our Series B convertible preferred stock and pay accrued dividends. Approximately $7,300,000 were used to pay accrued dividends on all other series of convertible preferred stock, and those shares were converted to common stock on a one-for-one basis. Finally, approximately $1,500,000 were used to repurchase 275,152 shares of common stock from an affiliate of one of the underwriters in order to comply with the NASD's rules. These expenditures have left us with proceeds remaining from the offering of approximately $33,800,000, with virtually no debt. We currently have pending an acquisition of substantially all of the assets of four FM and two AM radio stations in Albany, New York and three FM and one AM radio stations in Grand Rapids, Michigan, in exchange for substantially all of the assets of our stations in Victorville, California and Mansfield, Ohio; plus the payment by us of $80,465,000 in cash. We made an escrow deposit of $5,000,000 and agreed to pay liquidated damages of $28,000,000 if we do not perform our obligations under the exchange agreement in certain circumstances. The completion of this transaction is subject to the satisfaction of various conditions, including the completion of a pending merger of Clear Channel Communications, Inc. and AMFM, Inc., as well as approval from regulatory agencies, including the Federal Communications Commission, Federal Trade Commission, Department of Justice and state antitrust enforcement agencies. It is anticipated this transaction will be completed during the third quarter of 2000; however, there can be no assurance that the required regulatory approvals will be able to be obtained or, if obtained, when that will occur. The cash purchase price obligation to be paid by us in this transaction will be funded from the remaining net proceeds from our initial public offering of common stock and by borrowings available to us under our credit facility. We also have a pending merger with StarCom, Inc. to acquire two FM and one AM radio stations serving the St. Cloud, Minnesota market for a total of $5,025,000 in cash. The purchase will be funded by borrowings under our new bank credit facility. We have made an escrow deposit in the amount of $250,000. We anticipate closing this transaction by the end of 2000. We also expect over the next six months to incur up to $856,000 of capital expenditures to upgrade our equipment and facilities, primarily at stations recently acquired or those in the process of being acquired, in order to remain competitive and to create cost savings over the long term. These are expected to include upgrades necessary to return two of the stations recently acquired, which are operating under special temporary authorities, to licensed operations. We believe the cash generated from operations, net proceeds from the sale of our Flagstaff stations and available borrowings under our new bank credit facility will be sufficient to meet our requirements for pending acquisitions and corporate expenses and capital expenditures for the foreseeable future, based on our projected operations and indebtedness. MARKET RISK During the first quarter of 2000, we were exposed to the impact of interest rate changes because of borrowings under our former bank credit facility. It is our policy to enter into interest rate transactions -12- 13 only to the extent considered necessary to meet our objectives and to comply with the requirements of our credit facility. We have not entered into interest rate transactions for trading purposes. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board issued SFAS 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 prescribes the accounting treatment for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. Regent may employ financial instruments to manage its exposure to fluctuations in interest rates. Regent does not hold or issue such financial instruments for trading purposes. Regent will adopt SFAS 133, as required in the year 2001, and does not expect the impact of adoption to be material. The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial Statements," which is effective for the fourth quarter of 2000. In SAB 101, the SEC staff expressed its views regarding the appropriate recognition of revenue with regard to a variety of circumstances, some of which are of particular relevance to Regent. Regent has begun to evaluate SAB 101 and does not expect the impact of adoption to be material. In March 2000, the Financial Accounting Standards Board issued FASB Interpretation No. 44 (FIN 44), "Accounting for Certain Transactions Including Stock Compensation--an Interpretation of APB Opinion No. 25." FIN 44 provides guidance for certain issues that arose in applying APB Opinion No. 25, "Accounting for Stock Issued to Employees." Regent will adopt FIN 44, as required in the third quarter of 2000, and does not expect the impact of adoption to be material. CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS This Form 10-Q includes certain forward-looking statements with respect to our company that involve risks and uncertainties. These statements are influenced by our financial position, business strategy, budgets, projected costs, and plans and objectives of management for future operations. They use words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "project" and other similar expressions. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, we cannot assure you that our expectations will prove correct. Actual results and developments may differ materially from those conveyed in the forward-looking statements. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include changes in general economic, business and market conditions, as well as changes in such conditions that may affect the radio broadcast industry or the markets in which we operate, including, in particular, increased competition for attractive radio properties and advertising dollars, fluctuations in the cost of operating radio properties, and changes in the regulatory climate affecting radio broadcast companies. These forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10-Q. If we do update or correct one or more forward-looking statements, you should not conclude that we will make additional updates or corrections with respect to those or any other forward-looking statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Information required by this Item 3 is set forth under Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations under the subheading "Market Risk" and is incorporated under this Item 3 by this reference. -13- 14 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We currently and from time to time are involved in litigation incidental to the conduct of our business. In the opinion of our management, we are not a party to any lawsuit or legal proceeding which is likely to have a material adverse effect on our business or financial condition. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS On May 18, 2000, Regent granted options for the purchase of a total of 94,500 shares of its common stock at an exercise price of $7.50 per share to 17 key employees under the Regent Communications, Inc. 1998 Management Stock Option Plan. With the exception of options for 50,000 shares granted to one employee, which were immediately exercisable as of the date of grant, these options vest ratably over a five-year period and expire ten years from the date of grant. On May 23, 2000, Regent issued a total of 34,095 shares of its common stock to four former directors of Faircom Inc. upon exercise of outstanding stock options at an exercise price of $1.1064 per share under the Regent Communications, Inc. Faircom Conversion Stock Option Plan. We claimed exemptions from registration under Section 4(2) of the Securities Act of 1933 for the transactions described above, which we believe did not involve a public offering based on the number and nature of the persons involved and the generally private character of the transactions. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Regent Communications, Inc. 2000 Annual Meeting of Stockholders was held on May 18, 2000. At the annual meeting, stockholders were asked to vote upon (1) the election of directors, and (2) a proposal to amend Article FOURTH of our Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 60,000,000 to 100,000,000. The results of the voting were as follows: (1) Our nine incumbent directors were re-elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. The directors were elected as follows: Name of Director Shares Voted "FOR" Shares Withheld ---------------- ------------------ --------------- Terry S. Jacobs 28,890,228 239,965 William L. Stakelin 28,890,228 239,965 Joel M. Fairman 28,879,542 250,651 R. Glen Mayfield 29,012,957 117,236 William H. Ingram 28,890,467 239,726 Richard H. Patterson 28,890,467 239,726 John H. Wyant 28,034,717 1,095,476 Kenneth J. Hanau 29,013,167 117,026 William P. Sutter, Jr. 29,013,307 116,886 (2) The proposal to amend our Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 60,000,000 to 100,000,000 was adopted by an affirmative vote as follows: Shares voted "FOR" 27,305,334 Shares voted "AGAINST" 412,932 Shares "ABSTAINING" 1,411,297 ITEM 5. OTHER INFORMATION On June 21, 2000 we entered into an agreement with StarCom, Inc. to acquire in a merger with StarCom, Inc., two FM and one AM radio stations serving the St. Cloud, Minnesota market, for a total of $5,025,000 in cash. Regent made an escrow deposit in the amount of $250,000. On July 1, 2000, Regent began providing programming and other services to the stations under a time brokerage agreement. We anticipate closing this transaction by the end of the year, pending FCC approval. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The following is filed herewith as an exhibit to Part I of this Form 10-Q: Exhibit No. 27 Financial Data Schedule The exhibits identified as Part II Exhibits on the following Exhibit Index, which is incorporated herein by this reference, are filed or incorporated by reference as exhibits to Part II of this Form 10-Q. (b) Reports on Form 8-K We did not file any Forms 8-K during the second quarter of 2000. -14- 15 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 hereunto duly authorized. REGENT COMMUNICATIONS, INC. Date: August 10, 2000 By: /s/ Terry S. Jacobs -------------------------------------- Terry S. Jacobs, Chairman of the Board and Chief Executive Officer Date: August 10, 2000 By: /s/ Anthony A. Vasconcellos -------------------------------------- Anthony A. Vasconcellos, Chief Financial Officer and Vice President (Chief Accounting Officer) S-1 16 EXHIBIT INDEX The following exhibits are filed, or incorporated by reference where indicated, as part of Part II of this report on Form 10-Q: EXHIBIT NUMBER EXHIBIT DESCRIPTION 2(a)* Asset Exchange Agreement dated as of March 12, 2000 by and among Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership, Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc. and Regent Licensee of Mansfield, Inc. (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibits 2(g) to the Registrant's Form 10-K for the year ended December 31, 1999 and incorporated herein by this reference) 2(b) First Amendment to Asset Exchange Agreement made on May 31, 2000 by and among Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership, Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc. and Regent Licensee of Mansfield, Inc. 2(c) Second Amendment to Asset Exchange Agreement made on June 2, 2000 by and among Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership, Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc. and Regent Licensee of Mansfield, Inc. 3(a)* Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended by a Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional and Other Special Rights and the Qualifications, Limitations, Restrictions, and Other Distinguishing Characteristics of Series G Preferred Stock of Regent Communications, Inc., filed January 21, 1999 (previously filed as Exhibit 3(a) to Amendment No. 1 to the Registrant's Form S-1 Registration Statement No. 333-91703 filed December 29, 1999 and incorporated herein by this reference) 3(b)* Certificate of Decrease of Shares Designated as Series G Convertible Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on June 21, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(c) to the Registrant's Form 10-Q Fourth Quarter Ended June 30, 1999 and incorporated herein by this reference) 3(c)* Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional and Other Special Rights and the Qualifications, Limitations, Restrictions, and Other Distinguishing Characteristics of Series H Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on June 21, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(d) to the Registrant's Form 10-Q for the Quarter Ended June 30, 1999 and incorporated herein by this reference) 3(d)* Certificate of Decrease of Shares Designated as Series G Convertible Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on August 23, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(e) to the Registrant's Form 10-Q for the Quarter Ended on September 30, 1999 and incorporated herein by this reference) E-1 17 3(e)* Certificate of Increase of Shares Designated as Series H Convertible Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on August 23, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(f) to the Registrant's Form 10-Q for the Quarter Ended on September 30, 1999 and incorporated herein by this reference) 3(f)* Certificate of Designation, Number, Powers Preferences and Relative, Participating, Optional, and Other Special Rights and the Qualifications, Limitations, Restrictions, and Other Distinguishing Characteristics of Series K Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on December 13, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(g) to Amendment No. 1 to the Registrants Form S-1 Registration Statement No. 333-91703 filed December 29, 1994 and incorporated herein by this reference) 3(g)* Amended and Restated By-Laws of Regent Communications, Inc. (previously filed as Exhibit 3(b) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 3(h)* Amendments to By-Laws of Regent Communications, Inc. adopted December 13, 1999 (previously filed as Exhibit 3(h) to Amendment No. 1 to the Registrant's Form S-1 Registration Statement No. 333-91703 filed December 29, 1999 and incorporated herein by this reference) 4(a)* Credit Agreement dated as of January 27, 2000 among Regent Broadcasting, Inc., Regent Communications, Inc., Fleet National Bank, as administrative agent, Fleet National Bank, as issuing lender, General Electric Capital Corporation, as syndication agent, Dresdner Bank AG, New York and Grand Cayman Branches, as document agent, and the several lenders party thereto (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(a) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) 4(b)* Omnibus Amendment No. 1 and Amendment No. 1 to Credit Agreement dated as of February 4, 2000 among Regent Broadcasting, Inc., Regent Communications, Inc., Fleet National Bank, as administrative agent, Fleet National Bank, as issuing lender, General Electric Capital Corporation, as syndication agent, Dresdner Bank AG, New York and Grand Cayman Branches, as document agent, and the several lenders party thereto (previously filed as Exhibit 4(e) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) 4(c)* Revolving Credit Note dated as of February 7, 2000 made by Regent Broadcasting, Inc. in favor of Fleet National Bank in the original principal amount of $25 million (previously filed as Exhibit 4(f) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) (See Note 1 below) 4(d)* Subsidiary Guaranty Agreement dated as of January 27, 2000 among Regent Broadcasting, Inc., Regent Communications, Inc. and each of their subsidiaries and Fleet National Bank, as collateral agent (previously filed as Exhibit 4(c) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) E-2 18 4(e)* Pledge Agreement dated as of January 27, 2000 among Regent Broadcasting, Inc., Regent Communications, Inc. and each of their subsidiaries and Fleet National Bank, as collateral agent (previously filed as Exhibit 4(d) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) 4(f)* Security Agreement dated as of January 27, 2000 among Regent Broadcasting, Inc., Regent Communications, Inc. and each of their subsidiaries and Fleet National Bank, as collateral agent (previously filed as Exhibit 4(b) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) 10(a)* Escrow Agreement dated as of March 12, 2000 by and among Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc., Regent Licensee of Mansfield, Inc., Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership and Bank of America (previously filed as Exhibit 10(a) to the Registrant's Form 10-K for the year ended December 31, 1999 and incorporated herein by this reference) 10(b)* Letter agreement dated March 12, 2000 from Clear Channel Communications, Inc. addressed to Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc., Regent Licensee of Mansfield, Inc. (previously filed as Exhibit 10(b) to the Registrant's Form 10-K for the year ended December 31, 1999 and incorporated herein by this reference) 10(c)* Liquidated Damages Agreement made as of March 12, 2000 by Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc., Regent Licensee of Mansfield, Inc. for the benefit of Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company and Capstar TX Limited Partnership (previously filed as Exhibit 10(c) to the Registrant's Form 10-K for the year ended December 31, 1999 and incorporated herein by this reference) 27 Financial Data Schedule * Incorporated by reference. NOTES: 1. Seven substantially identical notes were made by Regent Broadcasting, Inc. as follows: Original Holder Principal Amount ------ ---------------- General Electric Capital Corporation $22,000,000 Dresdner Bank AG, New York and Cayman Islands Branches $22,000,000 Mercantile Bank National Association $16,000,000 U.S. Bank National Association $10,000,000 Summit Bank $10,000,000 Michigan National Bank $10,000,000 The CIT Group Equipment Financing, Inc. $10,000,000 E-3 EX-2.B 2 ex2-b.txt EXHIBIT 2(B) 1 EXHIBIT 2(b) FIRST AMENDMENT TO ASSET EXCHANGE AGREEMENT THIS FIRST AMENDMENT TO ASSET EXCHANGE AGREEMENT (this "Amendment") is made and entered on May 31, 2000, among the company or companies designated as Clear Channel on the signature page hereto (collectively, "Clear Channel") and the company or companies designated as Exchange Party on the signature page hereto (collectively, "Exchange Party"), under the following circumstances: A. Clear Channel and Exchange Party entered into an Asset Exchange Agreement dated March 12, 2000 (the "Asset Exchange Agreement"). B. Clear Channel and Exchange Party desire to amend the Asset Exchange Agreement as hereinafter provided. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows: SECTION 1. DEFINITIONS. Capitalized terms used and not otherwise defined herein are used with the meaning set forth in the Asset Exchange Agreement. SECTION 2. RECITAL B. The definition of "Exchange Party Stations" as set forth in Recital B shall only include the following stations: WYHT-FM, WSWR-FM and WMAN-AM, licensed to Mansfield/Shelby, Ohio, and KATJ-FM, KZXY-FM, KIXA-FM, KROY-AM and KIXW-AM, licensed to Victorville, California. The definition of "Exchange Party Stations" shall no longer include the following stations: KTPI-FM and KAVC-AM licensed to Mojave and Tehachapi (ie: Palmdale), California and KOSS-FM, licensed to Lancaster, California. SECTION 3. PURCHASE PRICE. The Cash Payment of SIXTY-SEVEN MILLION DOLLARS ($67,000,000) as set forth in Section 3.1 to the Asset Exchange Agreement shall be increased by THIRTEEN MILLION FOUR HUNDRED SIXTY-FIVE THOUSAND DOLLARS ($13,465,000) for a total revised Cash Payment of EIGHTY MILLION FOUR HUNDRED SIXTY-FIVE THOUSAND DOLLARS ($80,465,000). SECTION 4. SCHEDULES. Those portions of the Exchange Party Schedules which relate to KTPI-FM and KAVC-AM licensed to Mojave and Tehachapi (ie: Palmdale), California and KOSS- FM, licensed to Lancaster, California shall be deleted in their entirety from the Asset Exchange Agreement and Exchange Party Schedules. SECTION 5. RELEASE. All references to Exchange Party in the Asset Exchange Agreement, the Escrow Agreement, the Liquidated Damages Agreement, and a letter agreement, each dated March 12, 2000, and any other document relating thereto, shall mean Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Mansfield, Inc., and Regent Licensee of Mansfield, Inc. only and shall not include Regent Broadcasting of Palmdale, Inc. or Regent Licensee of Palmdale, Inc. Regent Broadcasting of Palmdale, Inc. and Regent Licensee of Palmdale, Inc. (the "Palmdale Entities") hereby relinquish all rights, and are hereby completely released and discharged of all obligations, agreements, covenants, liabilities, claims, costs, and expenses, arising out of or relating to the Asset Exchange Agreement and all such other documents referenced above, and the remaining parties shall proceed with the subject transaction as amended as if the Palmdale Entities had never been parties thereto. SECTION 6. NO OTHER CHANGES. Except as expressly modified hereby, the Asset Exchange Agreement remains unaltered and in full force and effect. SECTION 7. COUNTERPARTS. This Amendment may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. [SIGNATURES ON NEXT PAGE] 2 IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date and year first above written. CLEAR CHANNEL: CLEAR CHANNEL BROADCASTING, INC. By: Kenneth E. Luyker Name: Kenneth E. Luyker Title: SVP CLEAR CHANNEL BROADCASTING LICENSES, INC. By: Kenneth E. Luyker Name: Kenneth E. Luyker Title: SVP CAPSTAR RADIO OPERATING COMPANY By: William S. Banowsky, Jr. Name: William S. Bankowsky, Jr. Title: Executive Vice President CAPSTAR TX LIMITED PARTNERSHIP By: William S. Banowsky, Jr. Name: William S. Banowsky, Jr. Title: Executive Vice President 3 EXCHANGE PARTY: REGENT BROADCASTING OF VICTORVILLE, INC. By: Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT LICENSEE OF VICTORVILLE, INC. By: Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT BROADCASTING OF PALMDALE, INC. By: Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT LICENSEE OF PALMDALE, INC. By: Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT BROADCASTING OF MANSFIELD, INC. By: Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT LICENSEE OF MANSFIELD, INC. By: Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman EX-2.C 3 ex2-c.txt EXHIBIT 2(C) 1 EXHIBIT 2(c) SECOND AMENDMENT TO ASSET EXCHANGE AGREEMENT -------------------------------------------- THIS SECOND AMENDMENT TO ASSET EXCHANGE AGREEMENT (this "Amendment") is made and entered on June 2, 2000, among the company or companies designated as Clear Channel on the signature page hereto (collectively, "Clear Channel") and the company or companies designated as Exchange Party on the signature page hereto (collectively, "Exchange Party"), under the following circumstances: A. Clear Channel and Exchange Party entered into an Asset Exchange Agreement dated March 12, 2000, as amended on May 31, 2000 (the "Asset Exchange Agreement"). B. Clear Channel and Exchange Party desire to further amend the Asset Exchange Agreement as hereinafter provided. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows: SECTION 1. DEFINITIONS. Capitalized terms used and not otherwise defined herein are used with the meaning set forth in the Asset Exchange Agreement. SECTION 2. RECITAL A. The definition of "Clear Channel Stations" as set forth in Recital A shall be expanded to include the following station: WNWZ(AM), Grand Rapids, Michigan. SECTION 3. CLEAR CHANNEL EXCLUDED ASSETS. The definition of "Clear Channel Excluded Assets" as set forth in Section 1.2 shall no longer include "Retained Michigan Station" as set forth in Subsection 1.2(h). Subsection 1.2(h) shall be deleted in its entirety and all references in the Asset Exchange Agreement to Retained Michigan Station are hereby deleted. SECTION 4. SCHEDULES. Clear Channel shall provide Schedules to Exchange Party with respect to WNWZ(AM), Grand Rapids, Michigan, within ten (10) business days from the date hereof; such Schedules to be incorporated into the Clear Channel Schedules previously provided to Exchange Party under the Asset Exchange Agreement. SECTION 5. INDEMNIFICATION. Notwithstanding anything in Section 15.2 to the contrary, for a period of six (6) months from and after the Closing, Clear Channel agrees to indemnify Exchange Party for any and all losses, costs, damages, liabilities and expenses incurred by Exchange Party with respect to the condition or operation of the technical broadcast equipment and systems of station WNWZ(AM), Grand Rapids, Michigan up to $500,000. SECTION 6. NO OTHER CHANGES. Except as expressly modified hereby, the Asset Exchange Agreement remains unaltered and in full force and effect. SECTION 7. COUNTERPARTS. This Amendment may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. [SIGNATURES ON NEXT PAGE] 2 IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date and year first above written. CLEAR CHANNEL: CLEAR CHANNEL BROADCASTING, INC. By: Jerome L. Kersting Name: Jerome L. Kersting Title: SVP CLEAR CHANNEL BROADCASTING LICENSES, INC. By: Jerome L. Kersting Name: Jerome L. Kersting Title: SVP CAPSTAR RADIO OPERATING COMPANY By: D. Geoff Armstrong Name: D. Geoff Armstrong Title: EVP/CEO CAPSTAR TX LIMITED PARTNERSHIP By: D. Geoff Armstrong Name: D. Geoff Armstrong Title: EVP/CEO 3 EXCHANGE PARTY: REGENT BROADCASTING OF VICTORVILLE, INC. By: Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT LICENSEE OF VICTORVILLE, INC. By: Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT BROADCASTING OF MANSFIELD, INC. By: Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT LICENSEE OF MANSFIELD, INC. By: Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman EX-27 4 ex27.txt EXHIBIT 27
5 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 33,791,764 0 8,031,849 (343,000) 0 43,976,124 25,912,867 8,190,114 188,627,305 3,494,679 540,000 0 0 349,251 184,151,619 188,627,305 0 18,137,629 0 18,097,600 (728,566) 0 2,478,014 (1,709,419) 0 (1,709,419) 0 (1,114,124) 0 (2,823,543) (1.02) (1.02)
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