-----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, DJJkG4bE6qs9e4Kj0bLKnd0ql/0MR3N+w2ZdWos8nd7fFodm7HZMysOlWgHoHFqX az0lhFDLOBk1vYevrApLMA== 0000950148-96-000791.txt : 19960619 0000950148-96-000791.hdr.sgml : 19960619 ACCESSION NUMBER: 0000950148-96-000791 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEFTEL BROADCASTING CORP CENTRAL INDEX KEY: 0000922503 STANDARD INDUSTRIAL CLASSIFICATION: 4832 IRS NUMBER: 990113417 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-24516 FILM NUMBER: 96562349 BUSINESS ADDRESS: STREET 1: 6767 WEST TROPICANA AVE CITY: LAS VEGAS STATE: NV ZIP: 89603 BUSINESS PHONE: 7023673322 10-Q 1 FORM 10-Q FOR QUARTER ENDED MARCH 31, 1996 1 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 [No Fee Required] FOR THE QUARTER ENDED MARCH 31, 1996 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the Transition period from to Commission file number 0-24516 HEFTEL BROADCASTING CORPORATION (Exact name of registrant as specified in its charter) Delaware 99-0113417 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6767 West Tropicana Avenue 89103 Las Vegas, Nevada (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code: (702) 367-3322 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Class A Common Stock, $.001 Par Value 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 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to 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 practical date.
Class Outstanding at May 9, 1996 - - ----- -------------------------- Class A Common Stock, $.001 Par Value 6,336,610 shares Class B Common Stock, $.001 Par Value 4,579,763 shares (includes 810,587 shares held as treasury stock)
2 HEFTEL BROADCASTING CORPORATION March 31, 1996 INDEX
PART I FINANCIAL INFORMATION PAGE Item 1. Financial Statements (Unaudited) 3 Condensed Consolidated Balance Sheets as of March 31, 1996 and September 30, 1995 3 Condensed Consolidated Statements of Operations for the Three Months and Six Months Ended March 31, 1996 and 1995 4 Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 1996 and 1995 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9 SIGNATURES 10
2 3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, SEPTEMBER 30, 1996 1995 ------------- ------------- (UNAUDITED) (NOTE) ASSETS Current assets: Cash $ 4,292,479 $ 5,404,310 Accounts receivable, net 16,867,458 15,501,811 Other current assets 4,526,729 4,601,377 ------------- ------------- Total current assets 25,686,666 25,507,498 Property and equipment, at cost 25,916,790 17,580,114 Less accumulated depreciation and amortization (6,063,421) (5,335,151) ------------- ------------- 19,853,369 12,244,963 Intangible assets 131,395,925 114,895,925 Less accumulated amortization (6,939,545) (5,643,246) ------------- ------------- 124,456,380 109,252,679 Other non-current assets 10,770,048 4,632,144 ------------- ------------- Total assets $ 180,766,463 $ 151,637,284 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 5,809,649 $ 795,758 Accounts payable and accrued expenses 8,178,146 8,906,469 Amounts payable to officers and stockholders 778,770 838,241 ------------- ------------- Total current liabilities 14,766,565 10,540,468 Long-term debt and other obligations, less current portion 121,866,725 97,515,661 Stockholders' equity (Notes 2, 5 and 6): Series A Preferred Stock, cumulative, $.001 par value 336 336 Undesignated series preferred stock, $.001 par value -- -- Class A Common Stock, $.001 par value 6,237 6,192 Class B Common Stock, $.001 par value 4,680 4,680 Other stockholders' equity, net 44,121,920 43,569,947 ------------- ------------- Total stockholders' equity 44,133,173 43,581,155 ------------- ------------- Total liabilities and stockholders' equity $ 180,766,463 $ 151,637,284 ============= =============
See notes to condensed consolidated financial statements. NOTE: The balance sheet at September 30, 1995 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. 3 4 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, SIX MONTHS ENDED MARCH 31, --------------------------------- --------------------------------- 1996 1995 1996 1995 ------------ ------------ ------------ ------------ (UNAUDITED) (UNAUDITED) Net revenues $ 16,267,837 $ 13,619,371 $ 34,613,642 $ 31,021,385 Operating expenses 14,772,568 13,025,249 29,721,173 26,789,720 ------------ ------------ ------------ ------------ Operating income 1,495,269 594,122 4,892,469 4,231,665 Other expense: Interest expense, net (2,392,274) (1,242,553) (4,734,214) (2,361,248) Other, net (74,652) 10,545 (206,717) (220,736) ------------ ------------ ------------ ------------ (2,466,926) (1,232,008) (4,940,931) (2,581,984) ------------ ------------ ------------ ------------ Income (loss) before minority interest and provision for income taxes (971,657) (637,886) (48,462) 1,649,681 Minority interest -- (232,925) -- (1,077,032) Provision for income taxes -- 22,000 (65,000) (53,000) ------------ ------------ ------------ ------------ Net income (loss) $ (971,657) $ (848,811) $ (113,462) $ 519,649 ============ ============ ============ ============ Net income (loss) per common and common equivalent share $(0.10) $(0.08) $(0.01) $0.04 ====== ====== ====== ===== Weighted average common shares outstanding 10,103,324 10,780,171 10,417,833 10,504,405 ========== ========== ============ ==========
See notes to condensed consolidated financial statements. 4 5 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31 1996 1995 --------------------------------- (UNAUDITED) NET CASH PROVIDED BY OPERATING ACTIVITIES $ 811,190 $ 1,230,603 INVESTING ACTIVITIES: Purchases of property and equipment (6,837,426) (1,418,537) Payments relating to pending and completed business acquisitions (17,881,783) (4,256,692) ------------ ------------ Net cash used in investing activities (24,719,209) (5,675,229) FINANCING ACTIVITIES: Proceeds from borrowings under credit agreement 28,459,267 5,000,000 Payment of debt issue cost (5,157,833) -- Repayment of long-term debt (593,562) (287,703) Net change in amounts due to/from officers and stockholders 115,166 (673,094) Redemption of Preferred Stock -- (1,960,290) Payment of cumulative Preferred Stock dividends (26,850) (2,610,045) ------------ ------------ Net cash provided by (used in) financing activities 22,796,188 (531,132) ------------ ------------ Net decrease in cash (1,118,831) (4,975,758) Cash at beginning of period 5,404,310 10,218,911 ------------ ------------ Cash at end of period $ 4,292,479 $ 5,243,153 ============ ============
See notes to condensed consolidated financial statements. 5 6 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) March 31, 1996 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended March 31, 1996 are not necessarily indicative of the results that may be expected for the year ended September 30, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in Heftel Broadcasting Corporation's Annual Report on Form 10-K for the year ended September 30, 1995. Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common and common equivalent shares (if dilutive) outstanding during each period. For purposes of this computation, cumulative preferred stock dividends are deducted from net income (loss) during each period in which preferred stock is outstanding, although preferred stock dividends may not have been actually declared or paid during these periods. 2. STOCKHOLDERS' EQUITY
MARCH 31, SEPTEMBER 30, 1996 1995 ------------ ------------- Stockholders' equity (Notes 5 and 6): Series A Preferred Stock, cumulative, $.001 par value, 2,600,000 shares authorized, 335,634 issued and outstanding at March 31, 1996 and September 30, 1995 Liquidation preference of $342,347 at March 31, 1996 ($355,772 at September 30, 1995) $ 336 $ 336 Undesignated series preferred stock, $.001 par value, 2,400,000 shares authorized, none issued or outstanding -- -- Class A Common Stock, $.001 par value, 30,000,000 shares authorized, 6,236,610 issued and outstanding at March 31, 1996 and September 30, 1995 6,237 6,192 Class B Common Stock, $.001 par value, 7,000,000 shares authorized, 4,679,763 issued and outstanding at March 31, 1996 and September 30, 1995 4,680 4,680 Additional paid-in capital 96,385,554 95,693,269 Accumulated deficit (43,979,847) (43,839,535) Less treasury stock at cost, 810,587 shares (4,019,735) (4,019,735) Notes receivable from stockholders related to purchase of stock (4,264,052) (4,264,052) ------------ ------------ Net stockholders' equity $ 44,133,173 $ 43,581,155 ============ ============
6 7 3. STATION ACQUISITION On March 25, 1996, the Company acquired the assets of radio station WPAT-AM, which serves the New York City market for approximately $19.5 million. The acquisition was financed through additional borrowings under the Company's Credit Agreement. 4. LONG-TERM DEBT On January 10, 1996, the Company borrowed $1.5 million under its Credit Agreement and issued a $1.5 million promissory note in connection with the acquisition of real property in Miami on which an AM transmitting tower is located. On March 13, 1996, the Company completed an Amended and Restated Credit Agreement with its lender resulting in an increase to the total credit facilities from $100 million to $175 million and the commencement of principal payments was deferred until December 31, 1996. Other terms of the amended Credit Agreement remained substantially the same. The principal maturities of long-term debt as of March 31, 1996 and September 30, 1995 reflect the maturities provided for under the Amended and Restated Credit Agreement. On March 25, 1996, the Company borrowed an additional $20 million under the Credit Agreement. The proceeds were used to fund the acquisition of the assets of WPAT-AM in New York. 5. STOCKHOLDERS' EQUITY In December 1995, the Company issued an aggregate of 519,339 stock options to various employees of the Company under its Stock Option Plan. The exercise price ranged from $15.25 to $15.50 per share, the market price at the date of issuance. The options vest over a period ranging from two to three years. On January 2, 1996 the Company issued 44,811 shares of common stock to one of the parties to the acquisition of WLXX-AM in Chicago in accordance with the terms of the purchase agreement. In March 1996, the Company's board of directors approved the payment of cumulative dividends through December 31, 1995 on the outstanding Series A Preferred Stock. Such dividend payment totaled $26,851. 6. SUBSEQUENT EVENTS In April 1996, the Company's board of directors approved the payment of cumulative dividends from January 1, 1996 through March 31, 1996 on the outstanding Series A Preferred Stock. Such dividend payment totaled $6,713. 7 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF THREE MONTHS ENDED MARCH 31, 1996 TO THREE MONTHS ENDED MARCH 31, 1995 During fiscal 1995, the Company completed several radio station acquisitions. Due to the financial effects of these transactions, the results of operations for the three months ended March 31, 1996 reflect the operations of more radio stations than the results of operations for the three months ended March 31, 1995. Consequently, the financial condition and results of operations for these two periods are not entirely comparable. Net revenues increased by $2.6 million, or 19.4%, to $16.3 million in the three months ended March 31, 1996 from $13.6 million in the same quarter of 1995. Operating expenses increased by $1.7 million, or 13.4%, to $14.8 million in the three months ended March 31, 1996 from $13.0 million in the same period of 1995. The increases in net revenues and operating expenses over the same period of 1996 are due primarily to the results of operations of additional radio stations acquired during fiscal 1995. Interest expense, net of interest income, increased by $1.2 million, or 92.5%, to $2.4 million in the three months ended March 31, 1996 from $1.2 million in the same period of 1995 primarily as a result of increased borrowings of $62.3 million, or 95.2%, over the same period of the prior year. The proceeds of borrowings were used primarily for business acquisitions and certain capital expenditures. For the three months ended March 31, 1996, a net loss of $972,000 was incurred compared to a net loss of $849,000 in the same period of 1995. The increase is due primarily to increases in interest expenses over prior year amounts. COMPARISON OF SIX MONTHS ENDED MARCH 31, 1996 TO SIX MONTHS ENDED MARCH 31, 1995 During fiscal 1995, the Company completed several radio station acquisitions. Due to the financial effects of these transactions, the results of operations for the six months ended March 31, 1996 reflect the operations of more radio stations than the results of operations for the six months ended March 31, 1995. Consequently, the financial condition and results of operations for these two periods are not entirely comparable. Net revenues increased by $3.6 million, or 11.6%, to $34.6 million in the six months ended March 31, 1996 from $31.0 million in the same period of 1995. Operating expenses increased by $2.9 million, or 10.9%, to $29.7 million in the six months ended March 31, 1996 from $26.8 million in the same period of 1995. The increases in net revenues and operating expenses over the same period of 1996 are due primarily to the results of operations of additional radio stations acquired during fiscal 1995. Interest expense, net of interest income, increased by $2.4 million, or 100.5%, to $4.7 million in the six months ended March 31, 1996 from $2.4 million in the same period of 1995 primarily as a result of increased borrowings over the same period of the prior year. The proceeds of borrowings were used primarily for business acquisitions and certain capital expenditures. For the six months ended March 31, 1996, a net loss of $113,000 was incurred compared to net income of $520,000 in the same period of 1995. The decrease in net income is due primarily to increases in promotional expenses over prior year amounts resulting from format changes at two of the Company's Miami radio stations and interest expense resulting from increased borrowings. 8 9 LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities for the six months ended March 31, 1996 was $811,000 as compared to net cash provided of $1.2 million for the same period in 1995. Generally, capital expenditures are financed from cash generated from operations and long-term borrowings. In January 1996, the Company borrowed $1.5 million under its Credit Agreement. The proceeds were used to fund the acquisition of real property in Miami on which an AM transmitting tower is located. As of March 31, 1996, the Company had $121.5 million outstanding under its $175 million Credit Agreement. Borrowings under the Credit Agreement bear interest at a floating rate based on either (i) the agent bank's Eurodollar rate plus an incremental rate, or (ii) the higher of the agent bank's prime rate plus an incremental rate or the federal funds rate plus an incremental rate. On March 13, 1996, the Company completed an Amended and Restated Credit Agreement with its lender resulting in an increase to the total credit facilities from $100 million to $175 million and the commencement of principal payments was deferred until December 31, 1996. Other terms of the amended Credit Agreement remained substantially the same. The principal maturities of long-term debt as of March 31, 1996 and September 30, 1995 reflect the maturities provided for under the Amended and Restated Credit Agreement. On March 25, 1996, the Company borrowed an additional $20 million under the Credit Agreement. The proceeds were used to fund the acquisition of the assets of WPAT-AM in New York. Available cash on hand plus cash provided by operations were sufficient to pay interest due under the Credit Agreement and fund certain capital expenditures during the three months ended March 31, 1996. The Company believes it will have sufficient cash flow to finance its operations and satisfy its debt service requirements. The Company regularly reviews potential acquisitions of additional radio stations. Any future acquisitions are expected to be financed through additional borrowings under the Credit Agreement and/or cash provided by operations. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The following exhibits are included herein. (11) Statement re: Computation of Per Share Earnings (b) Reports on Form 8-K During the six months ended March 31, 1996, the Company filed a report on Form 8-K dated March 27, 1996, relating to the Amended and Restated Credit Agreement with the Chase Manhattan Bank and to the acquisition of the assets of radio station WPAT-AM in New York. 9 10 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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, on this 9th day of May, 1996. HEFTEL BROADCASTING CORPORATION By: /s/ H. Carl Parmer ----------------------------- H. Carl Parmer, President and Co-Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date - - --------- ----- ---- /s/ H. Carl Parmer President, Co-Chief Executive Officer May 9, 1996 - - --------------------------- and Director H. Carl Parmer /s/ John T. Kendrick Senior Vice President, Chief Financial Officer May 9, 1996 - - --------------------------- and Secretary (principal accounting officer) John T. Kendrick
10 EX-11 2 COMPUTATIONS OF PER SHARE EARNINGS 1 Exhibit 11 COMPUTATIONS OF PER SHARE EARNINGS
Three Months Ended March 31 Six Months Ended March 31 --------------------------- ------------------------- 1996 1995 1996 1995 ---- ---- ---- ---- PRIMARY Weighted average shares outstanding 10,103,324 10,780,171 10,417,833 10,331,016 Net effect of dilutive stock options - based on the treasury stock method using average market price -- -- -- 173,389 ------------ ------------ ------------ ------------ Total 10,103,324 10,780,171 10,417,833 10,504,405 ============ ============ ============ ============ Net income (loss) $ (971,657) $ (848,811) $ (113,462) $ 519,649 Subtract $0.08 cumulative preferred stock dividends (6,713) (6,713) (13,425) (59,165) ------------ ------------ ------------ ------------ Total $ (978,370) $ (855,524) $ (126,887) $ 460,484 ============ ============ ============ ============ Per share amount ($0.10) ($0.08) ($0.01) $0.04 ====== ====== ====== ===== FULLY DILUTED (NOTES 1 AND 2) Weighted average shares outstanding 10,331,016 Net effect of dilutive stock options - based on the treasury stock method using the period-end market price, if higher than the average market price 171,709 ------------ Total 10,502,725 ============ Net income 519,649 Subtract $0.08 cumulative preferred stock dividends (59,165) ------------ Total 460,484 ============ Per share amount $0.04 =====
- - ---------- Notes (1) For the three month period ended March 31, 1996 and 1995, and for the six month period ended March 31, 1996, a net loss was incurred, therefore the effect of common stock equivalents is anti-dilutive under both the primary and fully diluted stock computations. (2) For the six month period ended March 31, 1995, under the treasury stock method, the period-end market price is less than the average market price during the period, therefore the effect is anti-dilutive. However, the per share amount is the same under both the primary and fully-dilutive computations. EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AT MARCH 31, 1996 AND THE CONSOLIDATED STATEMENT OF OPERATIONS AND CASH FLOW FOR THE SIX MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1 6-MOS SEP-30-1995 OCT-01-1995 MAR-31-1996 4,292,479 0 16,867,458 0 0 25,686,666 25,916,790 6,063,421 180,766,463 14,766,565 121,866,725 0 336 10,917 44,121,920 180,766,463 0 34,613,642 0 29,721,173 206,717 0 4,734,214 (48,462) 65,000 (113,462) 0 0 0 (113,462) (0.01) 0
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