Argyle Television releases quarterly results; announces results of annual stockholders meeting.

SAN ANTONIO, Texas--(BUSINESS WIRE)--April 30, 1996--Argyle Television Inc. (NASDAQ:ARGL) Tuesday announced first-quarter operating results for the three-month period ended March 31, 1996.

Additionally, Argyle announced the results of its annual stockholders meeting held Tuesday.

Total revenues for the three-month period ended March 31, 1996, were $15.5 million, up 82.5 percent from $8.5 million for the three-month period ended March 31, 1995.

Broadcast cash flow for the period was $5.8 million, up 113.3 percent from $2.7 million for the 1995 period, and earnings before interest, tax, depreciation and amortization (EBITDA) were $4.8 million, up 117.7 percent from $2.2 million for the 1995 period.

Argyle also announced that at its annual meeting of stockholders held Tuesday, its first since becoming a public company, the company's stockholders took the following actions: elected Caroline Williams as a Class I Director, and Bob Marbut and Ibra Morales as Class II Directors, each to serve a two-year term; approved an amendment to the company's stock-option plan, limiting the number of shares that may be granted to any participant; and ratified the appointment of Ernst & Young as the company's auditors for 1996.

``We're pleased with Argyle's progress in this our second quarter as a public company. A lot was accomplished. This performance was particularly gratifying in light of a slow 1996 start for industry advertising revenues, the worst winter weather in decades and an unexpected automobile strike with national implications,'' said Marbut, chairman and chief executive officer of Argyle Television.

``Despite these deterrents, comparable (pro forma) revenues were up 3.1 percent, even though first-quarter 1995 revenues had been significantly ahead of the same 1994 period. Also, tight cost controls made it possible to increase pro-forma broadcast cash flow by 9 percent on the 3.1 percent revenue growth.

``In the first quarter, we also signed a definitive agreement to acquire ABC-affiliated television station KHBS, Fort Smith, Ark., and its satellite KHOG, Fayetteville, Ark. Closing is expected to occur in June,'' Marbut concluded.

Blake Byrne, president and chief operating officer, outlined the operational progress that has been made thus far in 1996:

-- Strong cost control that generated positive operating leverage,

making broadcast cash flow growth in excess of revenue growth

possible, despite comparatively weak advertising revenues in

general, particularly in the political category.

-- Favorable February audience ratings in targeted dayparts among

all the Argyle stations and in the soon-to-be-acquired Arkansas

stations.

-- Continuation of the previously announced $10 million capital

investment program to make the Argyle stations more competitive

and the launch of a new station construction project for KITV,

Honolulu, which will be completed in fall 1997.

-- Advertising revenue market share improvement at several stations,

particularly KITV.

-- Strengthening of the sales, news and engineering departments at

several stations.

Commenting on the outlook for the second quarter, Byrne said: ``We expect revenues to be somewhat stronger in the second quarter than in the previous period, even though the second quarter of 1995 was up significantly over 1994 at most of our stations.

``However, the most favorable comparative revenue increases in 1996 should come in the second half because of the expected uplift from political and Olympic-related advertising and the fact that second-half 1995 sales were relatively weaker than the first half had been.''

Today, Argyle Television owns and operates five network- affiliated stations: WZZM-TV, the ABC affiliate in Grand Rapids, Mich.; WGRZ-TV, the NBC affiliate in Buffalo, N.Y.; WNAC-TV, the Fox affiliate in Providence, R.I.; KITV-TV, the ABC affiliate in Honolulu; and WAPT-TV, the ABC affiliate in Jackson, Miss.

In addition, Argyle has entered into an agreement to acquire ABC-affiliated television stations KHBS, Fort Smith, and its satellite KHOG, Fayetteville, and expects this acquisition to be completed by July 1996.

Argyle's Series A Common Stock trades on the Nasdaq National Market System under the symbol ARGL. -0-

Discussion of Financial Results

Historical Results

First quarter ended March 31, 1996, for the company (WZZM, WGRZ, WNAC, KITV and WAPT from Jan. 1, 1996) compared with first quarter ended March 31, 1995, for the company (WZZM, WNAC and WAPT from Jan. 1, 1995).

Total revenues for the first quarter ended March 31, 1996, were $15.5 million, up 82.5 percent from total revenues of $8.5 million for the first quarter ended March 31, 1995. The increase in first- quarter total revenues can be attributed to the acquisitions of KITV in June 1995 and WGRZ in December 1995, which added $7.5 million to total revenues for the 1996 period.

This revenue gain was offset by a decrease in trade and barter revenues and paid programming. Also, while political revenues increased, they were lower than expected.

For the first quarter of 1996, broadcast cash flow was $5.8 million, a 113.3 percent increase over $2.7 million for the 1995 period, and EBITDA was $4.8 million, a 117.7 percent increase over $2.2 million for the 1995 period.

The improvement in first-quarter broadcast cash flow and EBITDA primarily can be attributed to the addition of KITV and WGRZ in the 1996 period, and, to a lesser extent, to renegotiation of programming contracts and to strict cost-control measures, which contributed to an improvement in BCF margin from 32 percent to 37.4 percent and in EBITDA margin from 26.1 percent to 31.1 percent.

Pro-Forma Results

First quarter ended March 31, 1996, for the company (WZZM, WNAC, WAPT, KITV and WGRZ) plus KHBS/KHOG compared with the combined results for the first quarter ended March 31, 1995, for the company (WZZM, WNAC and WAPT) plus KITV, WGRZ and KHBS/KHOG as if all acquisitions had occurred at the beginning of the respective periods.

On a pro-forma basis, total revenues for the quarter ended March 31, 1996, were $17.7 million, up 3.1 percent from $17.1 million for the first quarter ended March 31, 1995. This increase primarily is attributable to an increase in national advertising sales and an increase in network compensation resulting from renegotiation of network affiliation agreements at four of the company's six stations to date.

These revenue gains were offset by a decrease in trade and barter revenues and a reduction in the amount of paid programming. Also, while political revenues increased, they were lower than anticipated. No pro-forma effect is given to anticipated revenue enhancement opportunities at KHBS/KHOG.

For the first quarter of 1996, pro-forma broadcast cash flow was $6.3 million, a 9 percent increase over $5.8 million for the 1995 period. This improvement is attributable to the increased revenues described above and to an improvement in margin from 33.8 percent to 35.7 percent due to strict cost control and renegotiation of programming contracts.

These improvements were offset by planned increases in certain areas such as news and promotion expenses, timing differences for trade and barter expenses and a decrease in margin at KHBS/KHOG. Pro-forma EBITDA was $5.3 million, a 9.7 percent increase over $4.9 million for the 1995 period. EBITDA margin improved from 28.4 percent to 30.2 percent.

                         Argyle Television Inc.
                  Consolidated Statement of Operations
                 (in thousands, except per-share data)
                               (unaudited)

                                    Three months ended March 31,
                                      1996/b            1995/a

Total revenues                      $15,495           $ 8,487
Station operating expenses            8,898             4,875
Amortization of program rights        1,289               912
Depreciation and amortization         4,986             1,872
Station operating income                322               828

Corporate general and
  administrative expenses               983               506
Noncash compensation expense            169                --
Operating income (loss)                (830)              322

Interest expense, net                 3,500             1,909

Net loss                            $(4,330)          $(1,587)

Net loss per share from
  continuing operations           (39 cents)              N/A

Weighted average number of
  common shares outstanding          11,119               N/A
Number of common shares
  outstanding                        11,119               N/A

Supplemental financial data:
 Broadcast cash flow/c              $ 5,800           $ 2,719
 Broadcast cash flow margin            37.4%             32.0%
 EBITDA/d                           $ 4,817           $ 2,213
 EBITDA margin                         31.1%             26.1%
 Program payments                   $   797           $   893

/a Includes results from WZZM, WNAC and WAPT.
/b Includes results from WZZM, WNAC, WAPT, KITV and WGRZ for the
   entire period.
/c Broadcast cash flow is defined as station operating income, plus
   depreciation and amortization, plus amortization of program rights,
   minus program payments.  Broadcast cash flow is presented here
   not as a measure of operating results and does not purport to
   represent cash provided by operating activities.  Broadcast cash
   flow should not be considered in isolation or as a substitute for
   measures of performance prepared in accordance with generally
   accepted accounting principles.
/d EBITDA is defined as operating income (loss), plus depreciation
   and amortization, plus amortization of program rights, minus
   program payments, plus noncash compensation expense.  EBITDA is
   presented here not as a measure of operating results, but rather
   as a measure of debt service ability.  EBITDA does not purport
   to represent cash provided by operating activities and should not
   be considered in isolation or as a substitute for measures of
   performance prepared in accordance with generally accepted
   accounting principles.
-0-

                         Argyle Television Inc.
             Pro-Forma Consolidated Statement of Operations
                 (in thousands, except per-share data)
                               (unaudited)

                                            Six stations
                                    Three months ended March 31,
                                    Pro forma
                                      1996/b            1995/a

Total revenues                      $17,687           $17,149
Station operating expenses           10,518            10,043
Amortization of program rights        1,341             1,282
Depreciation and amortization/c/d     5,618             5,833
Station operating income (loss)         210                (9)

Corporate general and
  administrative expenses               983               934
Noncash compensation expense            169                --
Operating loss                         (942)             (943)

Interest expense, net/e               3,610             4,190

Loss from continuing operations      (4,552)           (5,133)

Dividends on preferred stock/f         (349)             (349)
Loss attributable to common
  shareholders                      $(4,901)          $(5,482)

Loss attributable to common
  shareholders                    (43 cents)        (48 cents)

Pro-forma weighted average
  number of common shares
  outstanding                        11,347            11,347

Supplemental Financial Data:
 Broadcast cash flow/g              $ 6,320           $ 5,800
 Broadcast cash flow margin            35.7%             33.8%
 EBITDA/h                           $ 5,337           $ 4,866
 EBITDA margin                         30.2%             28.4%
 Program payments                   $   849           $ 1,306

/a Amounts include the historical results of all six stations for
   the three-month periods plus combining adjustments for
   depreciation and amortization, corporate expenses and interest
   expense, net.
/b Amounts include the historical results of all six stations for
   the three-month periods plus combining adjustments for
   depreciation and amortization, corporate expenses and interest
   expense, net.  Also, reflects a reduction of certain expenses
   which would have been eliminated under the company's management.
/c Reflects depreciation of equipment and buildings resulting from
   the purchase accounting adjustments, net of depreciation already
   recorded in historical financial statements.  The estimated
   useful lives used for equipment range from 5 to 25 years and
   the estimated useful life used for buildings ranges from 25 to 39
   years.
/d Reflects amortization of intangible assets resulting from
   purchase accounting adjustments, net of amortization already
   recorded in the historical financial statements.  The estimated
   useful lives used for these intangible assets were as follows:
   FCC licenses -- 15 years, network affiliation agreements -- 15
   years, other intangible assets -- 2 to 5 years.
/e Reflects a credit to interest expense recorded in conjunction
   with FASB Statement No. 119 relating to interest rate protection
   agreements, interest expense on the pro-forma debt and the
   amortization of deferred financing costs over the period of the
   related financings.

                                     1996           1995
   Senior subordinated notes at
     an interest rate of 9.75%      $3,656         $3,656
   Fair value adjustments of
     interest rate protection
     agreements -- noncash            (580)            --
   Amortization of deferred
     financing costs                   177            177
   Bank credit agreement at
     an assumed interest rate
     of 8.5%, net                      357            357
                                    $3,610         $4,190

/f Reflects preferred stock dividends relating to the preferred
   stock to be issued in conjunction with the acquisition of the
   Arkansas stations.  The dividend calculation is shown here for
   purposes of calculating loss attributable to common shareholders.
/g Broadcast cash flow is defined as station operating income
   (loss), plus depreciation and amortization, plus amortization of
   program rights, minus program payments.  Broadcast cash flow is
   presented here not as a measure of operating results and does
   not purport to represent cash provided by operating activities.
   Broadcast cash flow should not be considered in isolation or as
   a substitute for measures of performance prepared in accordance
   with generally accepted accounting principles.
/h EBITDA is defined as operating income (loss), plus depreciation
   and amortization, plus amortization of program rights, minus
   program payments, plus noncash compensation expense.  EBITDA is
   presented here not as a measure of operating results and does
   not purport to represent cash provided by operating activities.
   EBITDA should not be considered in isolation or as a substitute
   for measures of performance prepared in accordance with generally
   accepted accounting principles.

CONTACT: Argyle Television Inc., San Antonio

Bob Marbut, 210/828-1700