Argyle Television releases quarterly results -- its first operating report as a public company.SAN ANTONIO--(BUSINESS WIRE)--Nov. 21, 1995--Argyle Television Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ARGL) Tuesday Tuesday: see week. announced third-quarter and nine-month operating results, its first public report since becoming a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. on Oct. 23, 1995. Total revenues for the three-month and nine-month periods ended Sept. 30, 1995, were $13.1 million and $32.1 million, respectively. Broadcast cash flow for these periods was $5.9 million and $13.8 million, and earnings before interest, tax, depreciation and amortization (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) were $5.3 million and $12.4 million. Commenting on the company's performance thus far, Chairman and Chief Executive Officer Bob Marbut said, "Since Argyle Television essentially was a start-up company start-up company A new business. in 1995 -- having begun operations this year with three stations acquired in the first quarter, a fourth in the second quarter and a fifth expected to close in the fourth quarter -- we have had a single focus: to build long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value for our shareholders. "To this end," he continued, "we have succeeded in appropriately capitalizing the company to fund growth through acquisition and investment, and we aggressively implemented an operational transition plan for all five stations to compete effectively and to grow revenues and cash flow in 1996 and beyond. "Argyle's financial resources and its ability to fund growth were greatly enhanced with the recent completion of an initial public stock offering, which generated gross proceeds of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $60 million; the issuance of $150 million of 10-year public subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". at 9-3/4 percent; and the closing of a $215 million credit facility with a group of 11 banks. "In the execution of our operating strategy, we have incurred one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. acquisition and transition-related expenses of approximately $400,000 through Sept. 30 and committed to a capital expenditures program of $10 million to be invested over 1995 and 1996. "We believe that the transition actions taken and investments made during 1995 will greatly improve Argyle's ability to compete in our existing markets and to make new acquisitions over the next two to three years," Marbut explained. Commenting on the company's operating focus in 1995, Blake Byrne Byrne (variations: Byrnes, O'Byrne, O'Byrnes, Burns, Beirne) meaning 'raven', is derived from the Irish name Ó Broin, and is the seventh most common last name in Ireland today. History 'Ó Broin', the Gaelic form of 'Byrne', means descendant of Bran. , president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , said: "Even though industry-wide television advertising revenues have been sluggish since July July: see month. -- in part because of the strength of political advertising in the comparative 1994 period -- we deliberately de·lib·er·ate adj. 1. Done with or marked by full consciousness of the nature and effects; intentional: mistook the oversight for a deliberate insult. 2. elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. to implement our transition plan on a fast track, knowing that it would not maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. broadcast cash flow in the short term. "This was done so our stations would be prepared to take full advantage of the opportunities we see in each Argyle market in 1996," he explained. He further stated that the 1995 transition plan also has included the following: -- Renegotiating and extending network affiliation affiliation (  fil´ēā´sh agreements
that will generate increased network compensation at four stations. -- Changing program lineups at all stations, including the reduction of paid programming, which is expected to improve audience shares. -- Enhancing the quality of news programming at four stations, including expanding the number of local news hours produced at three stations. -- Introducing new training, measurement and control systems for increasing Argyle's advertising revenue shares in all markets. -- Developing unique station positioning and marketing strategies for all stations, after conducting extensive market research in all Argyle markets. -- Strengthening the management teams at all stations. -- Preparing for the expected close of WGRZ-TV WGRZ-TV is the NBC affiliate in Buffalo, New York. Its studio is located at 259 Delaware Avenue in downtown Buffalo, while its transmitter is located at 11526 Warner Hill Road in South Wales, New York. The station is currently owned by Gannett Company, Inc. in Buffalo, N.Y., on Dec. 5, 1995. (Argyle has been managing the station since mid-June n. 1. the middle part of June. Noun 1. mid-June - the middle part of June period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" under an agreement with the seller.) The results reported Tuesday for Argyle for the 1995 periods include full year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. results of WZZM-TV, the ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. in Grand Rapids Grand Rapids, city (1990 pop. 189,126), seat of Kent co., SW central Mich., on the Grand River; inc. 1850. The second largest city in the state, it is a distribution, wholesale, and industrial center for an area that yields fruit, dairy products, farm produce, , Mich.; WNAC-TV WNAC-TV is the primary FOX and secondary MyNetworkTV-affiliated television station for the state of Rhode Island and Southeastern Massachusetts. Licensed to Providence, the station broadcasts an analog signal on UHF channel 64 and a digital signal on UHF channel 54. , the Fox affiliate in Providence Providence, city (1990 pop. 160,728), state capital and seat of Providence co., NE R.I., a port at the head of Providence Bay; founded by Roger Williams 1636, inc. as a city 1832. , R.I.; and WAPT-TV, the ABC affiliate in Jackson Jackson. 1 City (1990 pop. 37,446), seat of Jackson co., S Mich., on the Grand River; inc. 1857. It is an industrial and commercial center in a farm region. , Miss. (collectively, the "predecessor predecessor - parent stations"); and results of KITV-TV, the ABC affiliate in Honolulu Honolulu (hŏn'əl  `l, hōnō–), city (1990 pop. ,
from June June: see month. 13, 1995.
Argyle acquired the predecessor stations on Jan. 4, 1995, and acquired KITV KITV is the American Broadcasting Company (ABC) television affiliate licensed to Honolulu, Hawaii. Based in Honolulu and broadcasting on channel 4, the station is currently owned by Hearst-Argyle Television and operates several satellites and translators on all the major Hawaiian on June 13, 1995. Argyle was formed during the second half of 1994 and, prior to the acquisition of the predecessor stations, had no operations. The results reported Tuesday relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 1994 periods represent the results from the predecessor stations only. Also reported Tuesday, however, are pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma results for the three- and nine-month periods in 1995 and 1994, treating the predecessor stations and KITV-TV as if they had been acquired by Argyle on Jan. 1, 1994. On this pro forma basis, Argyle's 1995 third-quarter total revenues were up 2.7 percent, to $13.1 million from $12.8 million during the 1994 period; broadcast cash flow increased by 23.6 percent, to $5.9 million in the 1995 period from $4.7 million in 1994; and 1995 third-quarter EBITDA increased by 16.8 percent, to $5.3 million from $4.5 million during the 1994 period. On a pro forma basis for the nine months ended Sept. 30, 1995 and 1994, total revenues were up 14.3 percent, to $37.9 million in the 1995 period from total revenues of $33.1 million in the 1994 period; broadcast cash flow increased 23 percent, to $15.7 million in the 1995 period from $12.8 million in the 1994 period; and nine-month 1995 EBITDA increased by 17.9 percent, to $14.3 million from $12.1 million during the 1994 period. Today, Argyle Television owns and operates four network-affiliated stations: WZZM-TV, the ABC affiliate in Grand Rapids; KITV-TV, the ABC affiliate in Honolulu; WAPT-TV, the ABC affiliate in Jackson; and WNAC-TV, the Fox affiliate in Providence. In addition, Argyle has an agreement to purchase WGRZ-TV, the NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. affiliate in Buffalo, and is currently providing management services for WGRZ under a management agreement. The purchase of WGRZ is expected to close on Dec. 5, 1995. Argyle's Series A Common Stock trades on the Nasdaq National Market System under the symbol ARGL. Discussion of Financial Results Actual vs. Predecessor Historical Results: 1995 - Predecessor stations from Jan. 1, 1995, plus KITV from June 13, 1995 1994 - Predecessor stations only from Jan. 1, 1994 Total revenues for the three months ended Sept. 30, 1995, were $13.1 million, up 43.6 percent from total revenues of $9.1 million for the three months ended Sept. 30, 1994. For the nine months ended Sept. 30, 1995, total revenues were $32.1 million, up 36 percent from total revenues of $23.6 million for the nine months ended Sept. 30, 1994. The improvement in third-quarter and year-to-date revenues, when compared with the prior year, can be attributed to the acquisition of KITV in June 1995; an interim management services agreement with WGRZ in June 1995, which has generated $1.8 million of fees through Sept. 30 (associated expenses are included in station operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. ); for the nine-month periods, period-to-period increases in revenues at the predecessor stations; and, the initial benefit of approximately $170,000 of increased network compensation. These revenue gains were offset by a net decrease in political advertising revenues in the third quarter and year-to-date, when compared with the prior year, of nearly $300,000 and $400,000, respectively. For the third quarter in 1995, broadcast cash flow was $5.9 million, a 101.2 percent increase over the $2.9 million for the same 1994 period, and EBITDA was $5.3 million, a 95.4 percent increase over $2.7 million for the 1994 period. For the nine months ended Sept. 30, 1995, broadcast cash flow was $13.8 million, a 58.9 percent increase over broadcast cash flow of $8.7 million, and EBITDA was $12.4 million, a 54.2 percent increase over $8 million for the 1994 period. Included in the third-quarter and year-to-date station operating results are $187,000 and $400,000, respectively, of one-time acquisition transition expenses (such as severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. ), and program payments relating to prior periods of $12,000 and $158,000, respectively. Absent these expenses, third-quarter broadcast cash flow and EBITDA would have been $6.1 million and $5.5 million, respectively, and nine-month broadcast cash flow and EBITDA would have been $14.4 million and $13 million, respectively. Pro Forma Results: 1995 - Predecessor stations plus KITV from Jan. 1, 1995 1994 - Predecessor stations plus KITV from Jan. 1, 1994 On a pro forma basis, comparing 1995 third-quarter results to 1994 third-quarter results, revenues were up 2.7 percent, to $13.1 million; broadcast cash flow was up 23.6 percent, to $5.9 million; and EBITDA was up 16.8 percent, to $5.3 million. Nine-month 1995 results also were higher, as total revenues were up 14.3 percent, to $37.9 million; broadcast cash flow was up 23 percent, to $15.7 million; and EBITDA was up 17.9 percent, to $14.3 million. The improvement in third-quarter and year-to-date results in 1995, when compared with 1994, can be attributed to strong advertising sales in the first half of the year, the interim management services agreement with WGRZ described above and, to a lesser extent, the initial benefit of approximately $250,000 of increased network compensation. These increases were offset by a net decrease in political advertising revenues of approximately $1 million in the third quarter (approximately $1.1 million year-to-date) and by flat results in other advertising revenue categories in the third quarter. The following Pro Forma Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Operations do not give effect to the annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. effect of network compensation increases, elimination of acquisition related transition expense or elimination of program payments relating to prior periods (all of which were described above under "Actual vs. Predecessor Historical Results"). Giving effect to these items, for the three- and nine-month periods ended Sept. 30, 1995, total revenues would have been $13.4 million and $38.3 million, respectively, an increase of 4.5 percent and 15.7 percent over the 1994 periods; broadcast cash flow would have been $6.3 million and $16.7 million, respectively, an increase of 32.5 percent and 31 percent over the 1994 periods; and EBITDA would have been $5.7 million and $15.3 million, respectively, an increase of 26.1 percent and 26.4 percent over the 1994 periods. 1995 Fourth Quarter; WGRZ Acquisition: Pro Forma five-station comparison fourth quarter 1995 vs. fourth quarter 1994 for predecessor stations, KITV and WGRZ since Jan. 1, 1994 The acquisition of WGRZ is expected to close in December December: see month. 1995. Argyle's reported results will continue to include the interim management fee until closing, after which actual WGRZ operating results will be included. On a pro forma basis, treating all of the predecessor stations, KITV and WGRZ, as if they had been acquired on Jan. 1, 1994, Argyle anticipates that, because of an expected net decrease in political advertising revenues of approximately $1.8 million and a slight decline in other advertising revenue categories, pro forma fourth- quarter 1995 advertising revenues will be below pro forma fourth- quarter 1994 advertising revenues. -0-
Argyle Television Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands)
Three months ended Nine months ended
Sept. 30, Sept. 30,
1995(b) 1994 1995(b) 1994
predecessor(a) predecessor(a)
Total revenues(c) $13,140 $ 9,148 $32,091 $23,589 Station operating expenses 6,465 4,591 15,811 11,764 Amortization of program rights 970 901 2,736 2,671 Depreciation and amortization 3,199 610 7,727 1,982 Station operating income 2,506 3,046 5,817 7,172 Corporate general and administrative expenses(d) 743 207 1,628 658 Operating income 1,763 2,839 4,189 6,514 Interest expense, net 3,058 918 7,147 4,117 Income (loss) before income taxes and extraordinary item (1,295) 1,921 (2,958) 2,397 Income taxes -- 5 -- 35 Income (loss) before extraordinary item (1,295) 1,916 (2,958) 2,362 Extraordinary item, loss on early retirement of debt -- -- 2,708 774 Net income (loss) $(1,295) $ 1,916 $(5,666) $ 1,588 Net income (loss) per share(e) N/A N/A N/A N/A Weighted average number of common shares outstanding(e) N/A N/A N/A N/A Supplemental Financial Data Broadcast cash flow(f)$ 5,869 $ 2,917 $13,832 $ 8,703 Broadcast cash flow margin 44.7% 31.9% 43.1% 36.9% EBITDA(g) $ 5,296 $ 2,710 $12,404 $ 8,045 EBITDA margin 40.3% 29.6% 38.7% 34.1% Program payments $ 806 $ 1,640 $ 2,448 $ 3,122 (a) Includes results from the predecessor stations only.
(b) Includes results from the predecessor stations for the entire
period and KITV-TV, Honolulu, from June 13, 1995.
(c) The three and nine months ended Sept. 30, 1995, include WGRZ-TV,
Buffalo, management fee from June 7, 1995.
(d) The three and nine months ended Sept. 30, 1995, include $170,000
and $200,000, respectively, of non-cash performance based stock
option compensation expense.
(e) As Argyle was not a public company on Sept. 30, 1995, per-
share information is not applicable. Argyle became a public
company effective Oct. 23, 1995, at which time primary common
shares equaled 11,030,000 and fully diluted common shares equaled
11,413,000.
(f) 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.
(g) EBITDA is defined as operating income, plus depreciation and
amortization, plus amortization of program rights, minus program
payments, plus non-cash 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 Condensed Consolidated Statements of Operations
(Four Stations -- Unaudited)
(In thousands)
Three months ended Nine months ended
Sept. 30, Sept. 30,
1995 1994 1995 1994
Total revenues (a) $13,140 $12,794 $37,857 $33,124 Station operating expenses 6,465 6,405 19,689 17,219 Amortization of program rights 970 1,051 2,996 3,227 Depreciation and amortization 3,199 3,251 8,686 9,752 Station operating income 2,506 2,087 6,486 2,926 Corporate general and administrative expenses (b) 743 213 1,628 663 Operating income 1,763 1,874 4,858 2,263 Interest expense, net 3,058 2,560 7,147 7,691 Loss before income taxes (1,295) (686) (2,289) (5,428) Income taxes -- 5 -- 35 Loss before extraordinary item (1,295) (691) (2,289) (5,463) Extraordinary item, loss on early retirement of debt -- -- 2,708 774 Net loss $(1,295) $(691) $(4,997) $(6,237) Supplemental Financial Data Broadcast cash flow (c) $5,869 $4,749 $15,720 $12,783 Broadcast cash flow margin 44.7% 37.1% 41.5% 38.6% EBITDA (d) $5,296 $4,536 $14,292 $12,120 EBITDA margin 40.3% 35.5% 37.8% 36.6% Program payments $ 806 $1,640 $ 2,448 $ 3,122
(a) The three and nine months ended Sept. 30, 1995, include WGRZ-TV,
Buffalo, management fee from June 7, 1995.
(b) The three and nine months ended Sept. 30, 1995, include $170,000
and $200,000, respectively, of non-cash performance based stock
option compensation expense.
(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, plus depreciation and
amortization, plus amortization of program rights, minus program
payments, plus non-cash 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.
CONTACT: Argyle Television Inc., San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. Bob Marbut, 210/828-1700 |
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