Argyle Television releases quarterly results.SAN ANTONIO--(BUSINESS WIRE)--May 14, 1997--Argyle Television Inc. (Nasdaq/NM:ARGL) Wednesday Wednesday: see week. announced first-quarter operating results for the three-month period ended March 31, 1997. Total revenues for the three-month period ended March 31, 1997, were $17.9 million, up 15.5 percent from $15.5 million for the three-month period ended March 31, 1996. Broadcast cash flow for the period was $5.9 million, up 1.7 percent from $5.8 million for the 1996 period, 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 $4.9 million, up 2.1 percent from $4.8 million for the 1996 period. 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 total revenues for the three-month period ended March 31, 1997, were $18.9 million, up 3.3 percent from $18.3 million for the three-month period ended March 31, 1996. Pro forma broadcast cash flow for the period was $6.7 million, up 1.5 percent from $6.6 million for the 1996 period. Excluding the differential in pro forma political revenues between quarters, the increase in total revenues was 5.0 percent and the increase in broadcast cash flow was 6.3 percent. Pro forma total revenues and pro forma broadcast cash flow assume that each of the television stations currently owned by Argyle (including WLWT-TV in Cincinnati Cincinnati (sĭnsənăt`ē, –năt`ə), city (1990 pop. 364,040), seat of Hamilton co., extreme SW Ohio, on the Ohio River opposite Newport and Covington, Ky.; inc. as a city 1819. and KOCO-TV ''' KOCO-TV, commonly referred to as "KOCO 5" or "Eyewitness News 5" is the ABC affiliate in the Oklahoma City television market. The station is owned by Hearst-Argyle Television, Inc., but uses "Ohio/Oklahoma Hearst-Argyle Television, Inc. in Oklahoma City Oklahoma City (1990 pop. 444,719), state capital, and seat of Oklahoma co., central Okla., on the North Canadian River; inc. 1890. The state's largest city, it is an important livestock market, a wholesale, distribution, industrial, and financial center, and a farm , which were acquired on Jan. 31, 1997, in a two-station swap with Gannett, and KHBS-TV/KHOG-TV, Fort Smith/Fayetteville, Ark., which Argyle acquired as of June June: see month. 1, 1996) were acquired at the beginning of each respective period. Pro forma broadcast cash flow also gives effect to the elimination of certain expenses associated with the transactions consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. , transitional costs, 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 certain expenses associated with restructured employee-benefit plans at the acquired stations. On March 26, 1997, Argyle announced that it had entered into a definitive agreement the The Hearst Corp. to combine the television- broadcasting division of Hearst with and into Argyle, with Argyle to be renamed ``Hearst-Argyle Television Hearst-Argyle Television, Inc., is a broadcasting company in the United States. Hearst-Argyle is majority-owned by the New York City-based Hearst Corporation, and holds joint ventures in television production with NBC Universal Television Distribution, has an Internet partnership Inc.'' This transaction is subject to Argyle shareholder approval and certain other conditions, but, as previously announced, Argyle expects that this transaction will be completed in mid- mid- pref. Middle: midbrain. to late-third-quarter 1997. On May 9, 1997, the waiting period for the Hearst transaction under the Hart-Scott-Rodino Antitrust Act Antitrust Act: see Clayton Antitrust Act; Sherman Antitrust Act. was terminated early. Commenting on the quarter's events, Chairman and Chief Executive Officer Bob Marbut said: ``Strategically, the first quarter of 1997 marked an historic milestone for Argyle, its shareholders and employees as a result of the announced agreement to merge with Hearst Broadcasting. ``From its first day of operation, the newly created company (Hearst-Argyle Television) will be one of the largest independent television groups of network-affiliated stations -- both in terms of households reached and audience delivered. Also, preparation for the pending merger is going very smoothly, and we look forward to closing the transaction on our targeted timeline
Timeline may refer to:
``Financially, we were able to report positive comparisons in GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and in pro forma revenues and BCF BCF Billion Cubic Feet BCF Bioconcentration Factor BCF British Chess Federation BCF British Coatings Federation BCF Breast Cancer Fund BCF Bank Credit Facility BCF Bulked Continuous Filament BCF British Cycling Federation BCF Boeing Converted Freighter , respectively, for the first quarter of 1997 vs. the first quarter of 1996. ``These results were achieved despite the current challenging national advertising environment, the inclusion of significant political revenues last year, additional expenses associated with flood coverage by WLWT WLWT, also known as News 5, is a television station in Cincinnati, Ohio, broadcasting locally on VHF channel 5 as an NBC affiliate. The station is owned by Hearst-Argyle Television. and the Oklahoma City bombing-trial coverage by KOCO KOCO Kenwood-Oakland Community Organization (Chicago, Illinois) , and the commitment of senior-management resources to both the Gannett swap and the Hearst transaction,'' he said. Addressing the very important operational accomplishments during the quarter, 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. 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. said: ``We are terribly pleased with the introduction of WLWT and KOCO to the Argyle family of stations. ``Significant management, personnel and structural changes were promptly initiated, and a rigorous strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. and budgeting process is well under way at both stations. We look forward to the growth opportunities these two stations offer as well as the many synergies the entire Argyle group expects to realize as we merge with Hearst Broadcasting.'' Using Argyle's pro forma results and assuming that the Hearst transaction had occurred at the beginning of the respective periods, the combined company would have had total pro forma revenues for the three months ended March 31, 1997, of $81.3 million, as compared with $80.6 million for the same 1996 period, an increase of .9 percent; pro forma broadcast cash flow for the three months ended March 31, 1997, of $30.2 million, as compared with $28.3 million for the same 1996 period, an increase of 6.7 percent; and pro forma EBITDA for the the three months ended March 31, 1997, of $27.7 million, as compared with $25.8 million for the same 1996 period, an increase of 7.4 percent. Pro forma revenues and broadcast cash flow do not give effect to any synergies or economies of scale that may occur as a result of the merger. Today, Argyle Television owns and operates network-affiliated television stations WLWT-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 Cincinnati; KOCO-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 in Oklahoma City; 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.; KITV-TV, the ABC affiliate in Honolulu Honolulu (hŏn'əl  `l, hōnō–), city (1990 pop. ; 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.; and KHBS-TV, the ABC affiliate in Fort Smith, and its satellite KHOG-TV, the ABC affiliate in Fayetteville Fayetteville (fā`ĕtvĭl). 1 City (1990 pop. 42,099), seat of Washington co., NW Ark., in the Ozarks; inc. 1836. It is an agricultural trade center with canneries and food processors. The Univ. . Following completion of the Hearst transaction, Argyle (which will be renamed ``Hearst-Argyle Television Inc.'') will also own WCVB-TV, the ABC affiliate in Boston; WTAE-TV, the ABC affiliate in Pittsburgh; WBAL-TV, the NBC affiliate in Baltimore Baltimore, city (1990 pop. 736,014), N central Md., surrounded by but politically independent of Baltimore co., on the Patapsco River estuary, an arm of Chesapeake Bay; inc. 1745. ; KMBC-TV, the ABC affiliate in Kansas City Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Mo.; WISN-TV, the ABC affiliate in Milwaukee; and WDTN-TV, the ABC affiliate in Dayton, Ohio Dayton is a city in southwestern Ohio, United States. It is the county seat and largest city of Montgomery County. As of the 2005 census estimate, the population of Dayton was 158,873. , as well as Hearst Broadcast Productions. Hearst-Argyle also will manage WWWB-TV, the WB affiliate in Tampa, Fla.; WPBF-TV, the ABC affiliate in West Palm Beach, Fla., that Hearst has agreed to acquire; KCWB-TV, the WB affiliate in Kansas City, Mo.; and two radio stations (WBAL-AM and WIYY-FM, Baltimore) -- these managed stations will continue to be owned by The Hearst Corp. Under current Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. regulations, Argyle's WNAC WNAC Women Nationally Active for Christ (Antioch, TN) in Providence would have to be divested because of an overlap o·ver·lap n. 1. A part or portion of a structure that extends or projects over another. 2. The suturing of one layer of tissue above or under another layer to provide additional strength, often used in dental surgery. v. with Hearst's WCVB WCVB Warren County Visitors Bureau (Pennsylvania) in Boston, and Hearst's WDTN in Dayton would have to be divested because of an overlap with Argyle's WLWT in Cincinnati. DISCUSSION OF FINANCIAL RESULTS Actual/Historical Results The quarter ended March 31, 1997, for the company (WZZM and WGRZ for January; KITV, WAPT WAPT Web Application Penetration Test WAPT Web Application Performance Testing , the Arkansas Arkansas, river, United States Arkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. stations, and the company's share of broadcast cash flow from the Clear Channel venture for the entire quarter; and WLWT and KOCO for February and March) is compared with the first quarter ended March 31, 1996, for the company (WZZM, WNAC, WAPT, KITV and WGRZ). The company received 50 percent of the combined broadcast cash flow of the company's WNAC and of WPRI WPRI Wartime Pacific Routing Instructions , a CBS (Cell Broadcast Service) See cell broadcast. affiliate located in Providence, owned by Clear Channel Communications Not to be confused with clear channel radio stations, which are AM radio stations with certain technical parameters. Clear Channel Communications (NYSE: CCU) is a media conglomerate company based in the United States. Inc. The company records its share of the Clear Channel venture broadcast cash flow in total revenues, which affects the comparability of total revenues with prior periods, accordingly. Total revenues for the three months ended March 31, 1997, were $17.9 million, up 15.5 percent from total revenues of $15.5 million for the first quarter of 1996. Approximately $1.9 million of the increase in total revenues for the quarter is attributable to the acquisition of the Arkansas stations during June 1996. In addition, the Gannett swap added $1.5 million net to total revenues for the quarter. These revenue gains were offset by the Clear Channel venture, which accounts for a $1.0 million decrease in recorded total revenues for the quarter, because only the company's share of the Clear Channel venture broadcast cash flow is included in total revenues. Broadcast cash flow was $5.9 million for the three months ended March 31, 1997, a 1.7 percent increase above the $5.8 million level for the first quarter of 1996; and the broadcast cash flow margin was 32.8 percent for the first quarter of 1997, vs. 37.4 percent for the same quarter a year ago. EBITDA was $4.9 million for the first quarter of 1997, a 2.1 percent increase over the $4.8 million earned during the same 1996 period. The broadcast-cash-flow increase resulted primarily from the acquisition of the Arkansas stations during June 1996 net of the effects of the Gannett swap, which occurred on Jan. 31, 1997. The broadcast-cash-flow margin decrease was due primarily to the addition of WLWT and KOCO pursuant to the Gannett swap and the Arkansas stations, all of which have had lower margins than the historical margins of the Argyle station group. Pro Forma Results The pro forma results for the quarter ended March 31, 1997, for WNAC, WAPT, KITV, the Arkansas stations, WLWT and KOCO are compared with the pro forma results for the quarter ended March 31, 1996, for the same stations. Both quarters include the elimination of certain transaction-related expenses and other combining adjustments. For comparability purposes, only the broadcast cash flow for WNAC has been included in total revenues for all periods. Pro forma results do not give effect to any other opportunities or strategies that may be available to management for margin improvement in connection with the Gannett swap, or to synergies or economies of scale that may result because of the Hearst transaction. On a pro forma basis, total revenues for the three months ended March 31, 1997, were $18.9 million, up 3.3 percent over total revenues of $18.3 million for the same 1996 period; broadcast cash flow for the three months ended March 31, 1997, was $6.7 million, up 1.5 percent over broadcast cash flow of $6.6 million for the same 1996 period; and EBITDA for the three months ended March 31, 1997, was $5.7 million, up 1.8 percent over EBITDA of $5.6 million for the same 1996 period. Excluding the differential in pro forma political revenues between quarters, the increase in total revenues was 5.0 percent, broadcast cash flow was 6.3 percent and EBITDA was 7.5 percent. -0-
Argyle Television Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per-share data)
Three Months Ended
March 31,
1996 (a) 1997 (b)
Total revenues $15,495 $17,879
Station operating expenses 8,898 10,781
Amortization 1,289 1,057
Depreciation and amortization 4,986 6,558
Station operating income (loss) 322 (517)
Corporate general and
administrative expenses 983 1,008
Noncash compensation expense 169 260
Operating loss (830) (1,785)
Interest expense, net 3,500 4,418
Net loss $(4,330) $(6,203)
Less preferred-stock dividends -- (356)
Loss applicable to common stock $(4,330) $(6,559)
Loss per common share $(0.39) $(0.58)
Weighted average number of
common shares outstanding 11,119 11,347
Number of common shares outstanding 11,119 11,347
Supplemental Financial Data
Broadcast cash flow (c) $5,800 $5,869
Broadcast cash flow margin 37.4% 32.8%
EBITDA (d) $4,817 $4,861
EBITDA margin 31.1% 27.2%
Program payments $797 $1,229
(a) Includes results from WZZM, WAPT, WNAC, KITV and WGRZ for the
entire period.
(b) Includes results from WAPT, KITV and the Arkansas stations for
the entire period, WZZM and WGRZ for January, WLWT and KOCO for
February-March, and the company's share of the Clear Channel venture
(WNAC/WPRI) for the entire period. The company's share of the Clear
Channel venture broadcast cash flow is included in total revenues.
(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.
Argyle Television Inc.
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except per-share data)
6 Stations -- Three Months Ended
March 31,
Pro Forma
1996 1997
Total revenues (a) $18,326 $18,854
Station operating expenses (b) 10,661 11,055
Amortization of program rights 1,147 1,073
Depreciation and amortization (c)(d) 6,267 6,696
Station operating income (loss) 251 30
Corporate general and
administrative expenses 983 1,008
Noncash compensation expense 169 260
Operating loss (901) (1,238)
Interest expense, net (e) 4,179 4,418
Loss from continuing operations (5,080) (5,656)
Less preferred-stock dividends (f) $(356) $(356)
Loss applicable to common stock ($5,436) ($6,012)
Loss per common share ($0.48) ($0.53)
Pro forma number of common shares
outstanding 11,347 11,347
Supplemental Financial Data
Broadcast cash flow (g) $6,616 $6,693
Broadcast cash flow margin 36.1% 35.5%
EBITDA (h) $5,633 $5,685
EBITDA margin 30.7% 30.2%
Program payments $1,049 $1,106
Notes to Pro Forma Condensed Consolidated Statements of Operations
(a) Includes the effect of the company's share of WNAC/WPRI
broadcast cash flow in total revenues.
(b) Reflects the elimination of certain expenses relating to
employees who have either been terminated or will be terminated and
not replaced and certain other expenses that would have been
eliminated under the company's transition plan.
(c) Reflects change in depreciation expense due to purchase
accounting adjustments to equipment and buildings, net of
depreciation already recorded in the 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 and network affiliation agreements -- 15 years; other
intangibles -- 2 to 5 years.
(e) Reflects 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 1997
The notes at an interest rate of 9.75% $3,656 $3,656
Fair value adjustments of interest-rate
protection agreements -- non-cash (580) (328)
Amortization of deferred financing costs 148 155
Bank credit agreement at an assumed interest
rate of 8.5% 955 935
$4,179 $4,418
(f) Reflects preferred-stock dividends relating to the preferred
stock issued in conjunction with the acquisition of the Arkansas
stations. The dividend calculation is shown here for purposes of
calculating loss per common share.
(g) 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.
(h) EBITDA is defined as operating income, 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 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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