Paxson Communications Reports Fourth Quarter and Full Year 2002 Results.Business Editors WEST PALM BEACH, Fla.--(BUSINESS WIRE)--March 25, 2003 Paxson Paxson may refer to:
See: American Stock Exchange :PAX) (the "Company" or "Paxson"), the owner and operator of the nation's largest broadcast television station group and the PAX TV network (the "Network") reaching 88% of U.S. households (94 million households), today reported its unaudited financial results for the three months and the year ended December December: see month. 31, 2002. Gross revenues for the fourth quarter of 2002 increased 10.7% to $85.4 million compared to $77.1 million for the fourth quarter of 2001. Gross revenues for the year ended December 31, 2002 increased 4.2% to $321.9 million compared to $308.8 million for the year ended December 31, 2001. The Company's 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 (as defined later in this press release) for the fourth quarter of 2002 increased 5.3% to $7.4 million compared to $7.0 million for the fourth quarter of 2001. The Company's EBITDA for the year ended December 31, 2002 decreased to $17.0 million from $18.1 million for the year ended December 31, 2001. The Company also announced today that, as further described in this press release, it will be restating its quarterly financial results for 2002 in order to correct an accounting matter with respect to non-cash deferred tax adjustments resulting from the Company's adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ." Company Highlights: -- The Company has closed on or has pending transactions which will complete its plan to raise $100 million in cash. The Company has received $61 million in proceeds to date, consisting of $26 million received in the fourth quarter of 2002 from the sale of its television station WPXB-TV serving the Merrimack, NH market and $35 million received in the first quarter of 2003 from the sale of its television station KPXF-TV, serving the Fresno, California market. -- In April 2003, the Company expects to close on the sale of its television stations WMPX-TV, serving the Portland-Auburn, Maine market and WPXO-TV, serving the St. Croix, USVI market, which have already received FCC approval, for $10 million as well as to close on the sale of its partnership interest in WWDP-TV serving the Norwell, Massachusetts market, netting an additional $15 million. -- The Company has also signed an agreement to sell its television station KAPX-TV, serving the Albuquerque, New Mexico market, to Telefutura, a wholly owned subsidiary of Univision Communications Inc., for $20 million. Gross revenues for the fourth quarter of 2002 increased 10.7% to $85.4 million, compared to $77.1 million for the fourth quarter of 2001. Gross revenues for the year ended December 31, 2002 were $321.9 million, an increase of 4.2% over the prior year. Net revenues for the fourth quarter of 2002 increased 10.5% to $73.3 million compared to $66.3 million for the fourth quarter of 2001. Net revenues for the twelve months ended December 31, 2002 increased 4.4% to $276.9 million compared to $265.3 million for the twelve months ended December 31, 2001. The Company's revenue improvements for the three and twelve-month periods primarily reflect the strength of television station local and national spot revenues during the periods. The Company's EBITDA improved 5.3% to $7.4 million for the fourth quarter of 2002 compared to $7.0 million for the fourth quarter of 2001. The Company's EBITDA decreased to $17.0 million for the year ended December 31, 2002, from $18.1 million for the year ended December 31, 2001. The Company's operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. was $52.6 million for the fourth quarter of 2002 compared to $21.0 million for the fourth quarter of 2001. The Company's operating loss was $92.8 million for the year ended December 31, 2002, compared to $157.7 million for the year ended December 31, 2001. The net loss attributable to common stockholders for the fourth quarter of 2002 was $75.3 million or $1.16 per share compared to a net loss of $71.3 million or $1.10 per share for the fourth quarter of 2001. The net loss attributable to common stockholders for the year ended December 31, 2002 was $414.0 million or $6.38 per share compared to $350.4 million or $5.43 per share for the year ended December 31, 2001. During the fourth quarter of 2002, the company recorded an adjustment of programming to net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. of $38.4 million and a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $2.6 million. These charges relate to the Company's modification of its programming schedule to increase the number of hours available to long-form programming on the PAX TV network as well as the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of certain of the Company's business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . Paxson's Chairman and Chief Executive Officer Lowell Lowell, city (1990 pop. 103,439), a seat of Middlesex co., NE Mass., at the confluence of the Merrimack and Concord rivers; settled 1653, set off from Chelmsford 1826, inc. as a city 1836. "Bud" Paxson commented, "With the recent announcement of the sale of our television station serving the Albuquerque, New Mexico “Albuquerque” redirects here. For other uses, see Albuquerque (disambiguation). Albuquerque (pronounced [ˈæl.bə.kɚ.kiː], Spanish: [al.βu. market for $20 million, we have met our goal of raising over $100 million in cash. We have received $61 million in cash proceeds so far and we expect to receive an additional $45 million of cash upon the completion of the sale in early April of our Portland, Maine Portland is the largest city in the U.S. state of Maine, with a 2004 population of 63,882. Portland is Maine's cultural, social and economic capital. Tourists are drawn to Portland's historic Old Port district along Portland Harbor, which is at the mouth of the Fore River and part , St. Croix Croix (French for "Cross") is the name or part of the name of several communes in France:
Norwell was first settled in 1634 as a part of the settlement of Satuit (later Scituate), which encompasses present day Scituate and Norwell. market. Based on our operating performance to date for the first quarter, we are pleased with the direction of our operating plan for 2003. With the completion of our liquidity plan combined with our operating plan to achieve breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations free cash flow during 2003, we currently expect to end 2003 with cash balances in excess of $100 million." Commenting on the outlook for the first quarter, Paxson's Chief Financial Officer Tom Severson said, "We currently expect our revenues for the first quarter of 2003 to be relatively flat compared to the first quarter of 2002. We expect our first quarter EBITDA to be in the $14-$16 million range, which at the mid-point of our guidance, would be an EBITDA improvement of 100% over last year's first quarter EBITDA of $7.5 million. We are not giving full year 2003 revenue or EBITDA guidance at this time; however, we are well positioned for EBITDA growth in 2003 and we are committed to achieving breakeven free cash flow for the year." Balance Sheet Analysis: The Company's cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments increased during the fourth quarter by $1.3 million to $42.8 million as of December 31, 2002. The quarter's increase in cash and short-term investments primarily resulted from proceeds from the sale of the Company's Merrimack Merrimack, river, United States Merrimack, river, c.110 mi (180 km) long, formed at Franklin, S central N.H., by the junction of the Pemigewasset (rising in the White Mts.) and Winnipesaukee rivers. It flows S past Concord and Manchester into NE Mass. , NH television station offset by cash required to fund the Company's operations. The Company's total debt increased $14.3 million during the quarter to $900.1 million as of December 31, 2002. The increase in total debt for the quarter resulted primarily from the accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the of interest associated with the Company's 12 1/4 % senior subordinated discount notes as well as drawings under the Company's capital expenditures facility of $5.0 million. As of December 31, 2002, the Company had $2.0 million in available capacity under its bank credit facility to fund future capital expenditures.
Other Financial Data:
(in thousands)
For the Three For the Twelve
Months Months
Ended December 31, Ended December 31,
2002 2001 2002 2001
(Unaudited) (Unaudited)
EBITDA (a) $7,403 $7,029 $17,049 $18,061
========= ========= ========= ==========
Operating loss (b) $(52,606) $(20,965) $(92,812) $(157,732)
========= ========= ========= ==========
Program rights payments and
deposits $24,312 $35,993 $116,243 $130,566
========= ========= ========= ==========
Payments for cable
distribution rights $5,894 $1,949 $9,286 $14,418
========= ========= ========= ==========
Capital expenditures $5,151 $12,559 $31,177 $35,213
========= ========= ========= ==========
Cash flows used in
operating activities $(24,301) $(18,939) $(75,428) $(60,772)
========= ========= ========= ==========
Cash flows provided by
(used in) investing
activities $23,006 $43,033 $(7,689) $48,477
========= ========= ========= ==========
Cash flows provided by
financing activities $3,693 $33,915 $25,024 $44,790
========= ========= ========= ==========
(a) "EBITDA" is defined as operating loss plus depreciation, amortization, stock-based compensation, programming net realizable value adjustments, restructuring charges, and time brokerage and affiliation fees. EBITDA does not purport To convey, imply, or profess; to have an appearance or effect. The purport of an instrument generally refers to its facial appearance or import, as distinguished from the tenor of an instrument, which means an exact copy or duplicate. PURPORT, pleading. to represent cash provided by operating activities as reflected in the Company's consolidated statements of cash flows, is not a measure of financial performance under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , and should not be considered in isolation. Management believes the presentation of EBITDA is relevant and useful because EBITDA is a measurement industry analysts utilize when evaluating the Company's operating performance. Management also believes EBITDA enhances an investor's understanding of the Company's results of operations because it measures the Company's operating performance exclusive of interest and other non-operating and non-recurring items as well as non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for depreciation, amortization and stock-based compensation. In evaluating EBITDA, investors should consider various factors including its relationship to the Company's reported operating losses and cash flows from operating activities. Investors should be aware that EBITDA may not be comparable to similarly titled measures presented by other companies and could be misleading unless all companies and analysts calculate such measures in the same manner. EBITDA is not indicative of the Company's cash flows from operations and therefore does not represent funds available for the Company's discretionary use. (b) Results for the three and twelve months ended December 31, 2002 exclude amortization of FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. license intangible assets and goodwill as a result of adoption of SFAS No. 142. Adoption of SFAS 142 and Related Amendments to 2002 Quarterly Reports: Effective first quarter 2002, the Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS No. 142"), which requires that goodwill and intangible assets with indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those lives, including FCC licenses, be tested for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. annually rather than amortized over time. No goodwill or FCC license impairment charges were recognized upon adoption. However, due to the deferred tax consequences of SFAS No. 142, the Company was required to increase its deferred tax asset valuation allowance in 2002. As a result of the new accounting standard, the Company's amortization expense is now significantly lower as the Company no longer amortizes goodwill and FCC license intangible assets. Amortization expense related to the FCC license intangible assets and goodwill was $10.0 million and $39.5 million for the three and twelve months ended December 31, 2001, respectively. Had the Company adopted SFAS No. 142 prior to 2001, the net loss attributable to common stockholders for the three and twelve months ended December 31, 2001 would have decreased to $64.9 million, or $1.00 per share, and $325.1 million, or $5.04 per share, respectively, net of deferred taxes. Upon further analysis completed by the Company in connection with the preparation of its 2002 annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , the Company determined that an adjustment was required to properly reflect its tax provisions in the Company's financial statements as presented in Form 10-Q Form 10-Q See 10-Q. as filed for the quarterly periods of 2002. These non-cash tax adjustments result from the Company's implementation of SFAS No. 142. Historically, the Company has netted its deferred tax liability related to FCC licenses and goodwill against its deferred tax asset. Following adoption of SFAS No. 142, the temporary differences created by different treatment for book and tax of the Company's indefinite lived intangibles can no longer be assumed to offset deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). temporary differences which create deferred tax assets. Therefore, the Company was required to record an additional tax expense to increase its deferred tax asset valuation allowance in its financial statements totaling approximately $125.9 million, $3.5 million and $3.5 million for the three month periods ending March 31, 2002, June 30, 2002 and September 30, 2002, respectively. The Company will be amending its 2002 quarterly reports filed on Form 10-Q in order to restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its quarterly results for 2002 to reflect deferred tax adjustments resulting from the Company's adoption of SFAS No. 142. The Company's amendments to its 2002 financial reports on Form 10-Q are limited to this accounting matter. These non-cash adjustments to the Company's tax provision do not affect the Company's net operating loss carry-forward See Loss Carry-Back. or taxes payable to the Internal Revenue Service. The Company's revenues, 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. , operating loss and EBITDA were unaffected by these adjustments. The Company intends to file its amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. Form 10-Qs for the first three quarters of 2002 simultaneously with the filing of its 2002 Form 10-K. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : This press release contains forward-looking statements, within the meaning of federal securities laws that involve risks and uncertainties. All statements herein that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including the Company's estimates of financial performance and such things as business strategy, measures to implement strategy, competitive strengths, goals, references to future success and other events are generally forward-looking statements. The Company's actual results may differ materially from its estimates. Whether actual results, events and developments will conform with the Company's expectations is subject to a number of risks and uncertainties and important factors, many of which are beyond the control of the Company. Among the risks and uncertainties which could cause the Company's actual results to differ from those contemplated by its forward-looking statements are the risk that the Company may not be able to successfully develop its television operations to the point where these operations generate sufficient cash flow to enable the Company to meet its financial obligations, including the financial covenants under its senior credit facility; the effects of government regulations and changes in the laws affecting the Company's business; industry and economic conditions; and the risks and uncertainties contained in the Company's periodic reports filed with the Securities and Exchange Commission. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the results, events or developments referenced herein will occur or be realized. The Company is providing public dissemination dissemination Medtalk The spread of a pernicious process–eg, CA, acute infection Oncology Metastasis, see there through this press release of certain estimates for its first quarter 2003 financial performance. The Company expressly disclaims any current intention to update its estimates. Paxson Conference Call: The senior management of Paxson will hold a conference call to discuss the Company's fourth quarter and full year results on Tuesday, March 25, 2003 at 5:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . To access the teleconference, please dial 888-324-7816 (U.S.), 415-228-3886 (Int'l), passcode "Paxson", ten minutes prior to the start time. The teleconference will also be available via live webcast on the investor relations Investor relations The process by which the corporation communicates with its investors. portion of the Company's website, located at http://www.pax.tv/investors. If you cannot listen to the teleconference at its scheduled time In rallying, the Scheduled Time of any crew is the time, calculated at the beginning of the event, that they should arrive at any given control. It is different from Due Time in that Due Time is dynamic, ie it can change throughout the event as competitors drop time; whereas , there will be a replay available through March 27, 2003, which can be accessed by dialing 888-562-5417 (U.S.) or 402-530-7682 (Int'l). The webcast will also be archived on the Company's website until 11:59 p.m. EST on March 27, 2003, after which time the information in the webcast, including the Company's estimates of first quarter financial performance, should not be relied upon. About Paxson Communications Corporation: Paxson Communications Corporation owns and operates the nation's largest broadcast television distribution system and PAX TV, family television. PAX TV reaches 88% of U.S. television households via nationwide broadcast television, cable and satellite distribution systems. PAX TV's original series include, "Sue Thomas Sue Thomas is the name of:
Bray was born in Canoga Park, Los Angeles, California. , "Doc," starring recording artist Billy Ray Cyrus and "Just Cause" starring Richard Thomas Richard Thomas is the name of:
n. A small, easily operated camera with a fast lens for taking unposed or informal photographs. Noun 1. candid camera - a miniature camera with a fast lens ." For more information, visit PAX TV's website at http://www.pax.tv.
PAXSON COMMUNICATIONS CORPORATION
STATEMENTS OF OPERATIONS
(in thousands except share and per share data)
(unaudited)
For the Three Months For the Year
Ended Ended
December 31, December 31,
2002 2001 2002 2001
Revenues:
Gross revenues $85,374 $77,149 $321,896 $308,806
Less: agency
commissions (12,116) (10,825) (44,975) (43,480)
----------- ----------- ----------- -----------
Net revenues 73,258 66,324 276,921 265,326
----------- ----------- ----------- -----------
Expenses:
Programming and
broadcast operations 13,695 12,160 51,204 43,030
Program rights
amortization 19,592 18,567 77,980 84,808
Selling, general and
administrative 33,178 28,568 132,305 119,427
Business interruption
insurance proceeds (610) - (1,617) -
Time brokerage and
affiliation fees 1,089 894 4,079 3,621
Stock-based
compensation 719 4,426 3,810 10,161
Adjustment of
programming to net
realizable value 38,370 - 41,270 66,992
Restructuring charge 2,640 (1,229) 2,173 (1,229)
Depreciation and
amortization 17,191 23,903 58,529 96,248
----------- ----------- ----------- -----------
Total operating
expenses 125,864 87,289 369,733 423,058
----------- ----------- ----------- -----------
Operating loss (52,606) (20,965) (92,812) (157,732)
----------- ----------- ----------- -----------
Other income (expense):
Interest expense (22,193) (12,496) (85,214) (49,722)
Interest income 711 515 2,363 4,538
Other income
(expenses), net 531 (1,683) (388) (4,049)
Gain on modification of
program rights
obligations 603 233 1,520 932
Gain (loss) on sale of
television stations 24,520 (785) 25,170 12,274
----------- ----------- ----------- -----------
Loss before income
taxes and
extraordinary item (48,434) (35,181) (149,361) (193,759)
Income tax provision (4,043) (30) (136,948) (120)
----------- ----------- ----------- -----------
Loss before
extraordinary item (52,477) (35,211) (286,309) (193,879)
Extraordinary charge - - (17,552) (9,903)
----------- ----------- ----------- -----------
Net loss (52,477) (35,211) (303,861) (203,782)
Dividends and accretion
on redeemable
preferred stock (22,828) (36,125) (110,099) (146,656)
----------- ----------- ----------- -----------
Net loss attributable
to common stockholders $(75,305) $(71,336) $(413,960) $(350,438)
=========== =========== =========== ===========
Basic and diluted loss
per common share:
Loss before
extraordinary
charge $(1.16) $(1.10) $(6.11) $(5.28)
Extraordinary charge - - (.27) (.15)
Net loss $(1.16) $(1.10) $(6.38) $(5.43)
=========== =========== =========== ===========
Weighted average shares
outstanding 64,880,466 64,657,508 64,849,068 64,508,761
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