Paxson Reports Fourth Quarter and Year End 1997 Operating Results.WEST PALM BEACH--(BUSINESS WIRE)--March 17, 1998--Paxson Communications Corporation (AMEX AMEX See: American Stock Exchange :PAX) the largest owner and operator of broadcast television properties in the nation, today reported financial results for the year and quarter ending December December: see month. 31, 1997. For the full year, total revenues rose 42% to $88.4 million, operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. , as defined herein, of $30.2 million increased 55%, and net income, which included a $254.7 million gain on sale of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , was $214.7 million compared with a net loss of $26.2 million in 1996. For the quarter ended December 31, 1997, total revenues rose 41% to $27.2 million, operating cash flow, as defined herein, of $9.7 million increased 99%, and net income, which included a $188.6 million gain on sale of discontinued operations, was $180.9 million compared with a net loss of $12.5 million in 1996. Commenting on the year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results, Paxson Paxson may refer to:
"As we prepare for the August 31st launch of PAX NET, we remain focused on expanding our distribution, securing programming and broadening broad·en tr. & intr.v. broad·ened, broad·en·ing, broad·ens To make or become broad or broader. broad our network television management. We continue to make significant progress on these pre-launch goals. First, we increased the size of our national television footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. through a number of station acquisitions and affiliation affiliation (  fil´ēā´sh partnerships. Most important of these, we
agreed to acquire WCFC WCFC West Coast Futbol Club (Laguna Hills, CA) TV-38 in Chicago Chicago, city, United StatesChicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , the nation's third largest market. Upon the completion of this and other transactions, we will operate television stations in all top- top- pref. Variant of topo-. 20 markets and in 42 of the top-50 markets. Second, we have substantially completed our programming line-up line-up Noun 1. people or things assembled for a particular purpose: Christmas TV line-up 2. , including a prime-time schedule of popular, family-oriented shows, several of which are current network hits. Finally, we have recruited experienced management to lead our sales, programming, and 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. relations efforts. We look forward to reporting our progress on these and other initiatives as the year unfolds." -0-
Results of Operations for the Twelve Month Periods Ended December
31, 1997 and December 31, 1996
Consolidated revenues for 1997 increased 42% (or $26.1 million)
to $88.4 million from $62.3 million for 1996. These increases were
primarily due to television station acquisitions and new time
brokerage operations, with WPXN-TV in New York which has been operated
by the company since June 30, 1997 accounting for $13.3 million of the
increase.
Operating expenses for 1997 increased 67% (or $44.2 million) to
$110.4 million from $66.2 million for 1996. This increase was due to
higher direct expenses such as commissions which rise in proportion to
revenues ($4.0 million), compensation associated with the sale of
Paxson's radio assets ($9.7 million), other non-direct costs, which
are primarily due to operating new television stations
($11.3 million), higher depreciation and amortization primarily
related to assets acquired ($9.2 million), and increased time
brokerage agreement fees, primarily related to new time brokerage
operations ($13.4 million), of which increase $10.3 million is
attributable to WPXN-TV, all of which were partially offset by lower
option plan compensation costs ($3.6 million).
Operating cash flow for 1997 increased 55% (or $10.7 million) to
$30.2 million, from $19.5 million for 1996. This increase in operating
cash flow was primarily a result of television station acquisitions
and new time brokerage operations, with WPXN-TV accounting for
$10.5 million of the increase. Operating cash flow is defined as net
income excluding non-cash items, non-recurring items including 1997
compensation associated with the sale of Paxson's radio assets,
discontinued operations and relocation costs, interest, other income,
income taxes and time brokerage fees, less scheduled program rights
payments.
Interest expense for 1997 increased to $37.7 million from
$31.5 million for 1996, an increase of 20% primarily due to a greater
level of senior debt throughout the period. As a result of
acquisitions, at December 31, 1997, total long-term debt and senior
subordinated notes were $350.8 million, compared with the balance of
$231.7 million outstanding a year prior.
Interest income for 1997 increased to $9.5 million from
$6.7 million in 1996. This increase was primarily due to greater
levels of cash and cash equivalents and cash held by qualified
intermediary invested during the second half of the period primarily
as a result of the receipt of the proceeds from the Network-Affiliated
Television and Radio segments sales during 1997.
At December 31, 1996 the Company had accumulated approximately
$70 million of net operating losses available to offset future taxable
income, $7.9 million of which was limited as to use. The gain realized
upon the sale of Paxson's radio segment was substantially deferred for
tax purposes. The remaining gain on the sale of Paxson's radio and
network-affiliated television segments was offset through the use of
net operating losses available at December 31, 1996, as well as tax
losses generated from operations during 1997.
Paxson Communications owns and operates the nation's largest
group of television stations. Including all pending acquisitions,
construction permits, divestitures and other transactions, Paxson will
broadcast via 77 television stations in markets reaching approximately
72 million US television households, including stations in each of the
top-20 markets as well as 42 of the top-50 markets. Supported by these
distribution assets, Paxson will launch PAX NET, a national family
entertainment network on August 31, 1998. The foundation of the
network's prime-time schedule includes the off-network CBS hit series
Touched By An Angel, Promised Land, Dr. Quinn, Medicine Woman,
Diagnosis Murder, Highway to Heaven and Life Goes On. Additionally,
the line-up includes I'll Fly Away, Dave's World, The New Flipper,
Love Boat, Barnaby Jones, Seventh Heaven, Christy, The Father Dowling
Mystery Series and Neon Rider, as well as theatrical and
made-for-television movies.
For additional information about Paxson Communications, visit the
company's web site at www.pax.net.
This press release contains "forward-looking statements," within
the meaning of federal securities laws, that involve risks and
uncertainties. All statements herein, other than those consisting
solely of historical facts, that address activities, events or
developments that the Company expects or anticipates will or may occur
in the future, including such things as business strategy, measures to
implement strategy, competitive strengths, goals, references to future
success and other events may be forward-looking statements. Statements
herein are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical
trends, current conditions and potential future developments, as well
as other factors it believes are appropriate in the circumstances.
However, 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 that could cause actual results,
events and developments to differ materially from those referenced in,
contemplated by or underlying any forward-looking statements herein,
including, among others, the continued development and viability of
the Company's television operations, the Company's ability to manage
its growth, the Company's high level of indebtedness, restrictions
imposed on the Company by the terms of its indebtedness and preferred
stock, the impact of government regulations, industry and economic
conditions, competition, changes in operating expenses, industry and
economic conditions and other factors, many of which are beyond the
control of the Company. Consequently, all forward-looking statements
made herein are qualified by these cautionary statements and there can
be no assurance that the actual results, events or developments
referenced herein will occur or be realized.
PAXSON COMMUNICATIONS CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31,
-----------------------------------
1997 1996
-------------- ---------------
Assets
Current assets:
Cash and cash equivalents $ 82,641,444 $ 61,748,788
Restricted cash 17,000,000 -
Accounts receivable, less
allowance for
doubtful accounts
of $911,941 and
$1,576,593, respectively 4,813,524 29,860,998
Prepaid expenses and
other current assets 2,765,984 2,713,565
Current program rights - 1,512,019
--------------- ---------------
Total current assets 107,220,952 95,835,370
Cash held by qualified
intermediary 418,949,550 -
Property and equipment, net 105,896,873 144,415,412
Intangible assets, net 205,400,029 220,409,421
Investments in broadcast
properties 72,762,195 53,297,022
Investment in cable network 58,974,491 -
Other assets, net 87,908,884 28,149,699
Program rights, net - 1,075,536
--------------- ---------------
Total assets $ 1,057,112,974 $ 543,182,460
--------------- ---------------
Liabilities, Redeemable Securities
and Common Stockholders' Equity
Current liabilities:
Accounts payable and
accrued liabilities $ 11,305,782 $ 10,676,692
Accrued interest 8,475,686 6,684,373
Current portion of
program rights payable - 1,628,959
Current portion of
long-term debt 496,378 644,509
--------------- ---------------
Total current liabilities 20,277,846 19,634,533
Program rights payable - 1,000,260
Deferred gain 12,100,000 -
Deferred income taxes 95,747,156 -
Long-term debt 122,299,025 3,407,688
Senior subordinated notes, net 227,958,736 227,655,096
Redeemable Cumulative Compounding
Junior preferred stock, $0.001
par value; 12% dividend rate
per annum, 33,000 shares
authorized, issued and
outstanding 42,610,662 36,780,496
Redeemable Exchangeable
preferred stock, $0.001 par
value; 12.5% dividend rate
per annum, 440,000 shares
authorized, 170,782 and
150,000 shares issued and
outstanding 168,375,990 147,929,150
Class A common stock, $0.001 par
value; one vote per share;
150,000,000 shares authorized,
50,701,600 and 40,442,482
shares issued and outstanding 50,702 40,442
Class B common stock, $0.001
par value; ten votes per
share; 35,000,000 shares
authorized and 8,311,639
shares issued and outstanding 8,312 8,312
Class A and B common stock
warrants 2,316,225 6,862,647
Class C common stock warrants - 2,335,528
Stock subscription notes
receivable (2,813,250) (1,873,139)
Additional paid-in capital 285,795,787 209,621,241
Deferred option plan
compensation (2,205,240) (6,397,916)
Retained earnings
(accumulated deficit) 84,591,023 (103,821,878)
Commitments and contingencies - -
---------------- ---------------
Total Liabilities, Redeemable
Securities and Common
Stockholders' Equity $ 1,057,112,974 $ 543,182,460
----------------- ---------------
PAXSON COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31,
------------------------------------
1997 1996
---------------- ------------------
Revenues:
Local and national advertising $ 87,654,004 $ 60,772,499
Other 545,344 1,400,169
Trade and barter 222,105 159,950
---------------- ------------------
Total revenues 88,421,453 62,332,618
---------------- ------------------
Operating expenses:
Direct 14,648,173 10,609,812
Programming 5,010,635 2,607,796
Sales and promotion 5,809,864 3,642,038
Technical 8,982,149 5,011,353
General and
administrative 23,562,985 20,814,808
Trade and barter 266,674 110,449
Time brokerage and
affiliation agreement fees 16,961,427 3,568,192
Option plan compensation 3,369,812 6,975,830
Compensation associated with
Paxson Radio asset sales 9,700,000 -
Depreciation and amortization 22,044,109 12,887,776
---------------- ------------------
Total operating expenses 110,355,828 66,228,054
---------------- ------------------
Operating loss (21,934,375) (3,895,436)
Other income (expense):
Interest expense (37,728,307) (31,525,927)
Interest income 9,494,894 6,741,552
Other expenses, net (5,721,743) (1,755,660)
Equity in loss of
unconsolidated investment (2,492,691) -
---------------- ------------------
Loss from continuing
operations before
income tax benefit and
extraordinary item (58,382,222) (30,435,471)
Income tax benefit 21,879,260 -
---------------- ------------------
Loss from continuing
operations before
extraordinary item (36,502,962) (30,435,471)
Discontinued operations:
Income (loss) from
discontinued operations,
net of applicable
income taxes (3,555,186) 4,216,570
Gain on disposal of
discontinued operations,
net of applicable
income taxes 254,748,055 -
---------------- ------------------
251,192,869 4,216,570
---------------- ------------------
Income (loss) before
extraordinary item 214,689,907 (26,218,901)
Extraordinary item - -
---------------- ------------------
Net income (loss) 214,689,907 (26,218,901)
Dividends and accretion
on preferred stock and
common stock warrants (26,277,006) (21,908,584)
---------------- ------------------
Net income (loss) attributable
to common stock $ 188,412,901 $ (48,127,485)
---------------- ------------------
Basic and diluted (loss)
earnings per share:
Loss from continuing
operations before
extraordinary item $ (1.17) $ (1.20)
Discontinued operations 4.67 0.10
Extraordinary item - -
----------------- -------------------
Net income (loss) $ 3.50 $ (1.10)
---------------- -------------------
Weighted average
shares outstanding 53,808,472 43,836,526
---------------- ------------------
PAXSON COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31,
--------------------------------
1997 1996
-------------- --------------
Cash flows from operating
activities:
Net income (loss) $ 214,689,907 $ (26,218,901)
Adjustments to reconcile
net income (loss)
to net cash (used in)
provided by operating
activities:
Depreciation and
amortization 35,511,000 25,974,909
Option plan compensation 6,455,843 7,918,857
Program rights
amortization 703,789 1,381,582
Provision for doubtful
accounts 2,011,337 1,287,819
Deferred income tax
benefit (21,879,260) -
Loss on sale or
disposal of assets 3,794,027 181,586
Loss on extinguishment
of long-term debt - -
Equity in loss of
unconsolidated
investment 2,492,691 -
Gain on disposal of
discontinued
operations, net (254,748,055) -
Changes in assets
and liabilities:
Increase in restricted
cash (17,000,000) -
Decrease (increase) in
accounts receivable 5,172,545 (13,422,402)
(Increase) decrease in
prepaid expenses
and other current
assets (1,631,864) (1,742,202)
Increase in intangible
assets - -
(Increase) decrease
in other assets (5,352,711) (1,886,853)
Increase (decrease)
in accounts payable
and accrued
liabilities (10,590,638) 5,646,000
(Decrease) increase in
accrued interest 1,815,673 (247,969)
-------------- ---------------
Net cash (used in)
provided by operating
activities (38,555,716) (1,127,574)
-------------- ---------------
Cash flows from investing
activities:
Acquisitions of broadcasting
and billboard properties (253,804,699) (186,662,299)
Increase in investments
in broadcast properties (8,026,173) (32,104,992)
Deposits on broadcasting
properties (26,597,000) (3,837,000)
Increase in programming
deposits (36,682,500) -
Cash held by qualified
intermediary (418,949,550) -
Purchases of property
and equipment (44,473,918) (36,709,477)
Investment in cable
network (5,342,182) -
Deposits (made) refunded
on buildings and equipment (320,000) 555,341
Proceeds from sales
of discontinued operations 721,978,459 -
Proceeds from sale of assets 13,764,020 228,279
-------------- ---------------
Net cash used in investing
activities (58,453,543) (258,530,148)
-------------- ---------------
Cash flows from financing
activities:
Proceeds from issuance
of common stock, net - 154,800,000
Proceeds from
issuance of long-term
debt 120,000,000 17,700,000
Repayments of long-term
debt (1,269,978) (28,230,464)
Payment of loan
origination costs - (2,985,742)
Payments for program rights (802,684) (1,424,912)
Proceeds from issuance of
redeemable preferred stock,
net - 143,197,254
Redemption of Senior and
Series B preferred stock - (28,455,758)
Proceeds from exercise
of common stock options,
net 914,688 492,567
Increase in stock
subscription notes
receivable (940,111) (1,873,139)
Repayment of stock
subscription notes
receivable - 115,714
-------------- ---------------
Net cash provided
by financing
activities 117,901,915 253,335,520
-------------- ---------------
Increase (decrease)
in cash and cash equivalents 20,892,656 (6,322,202)
Cash and cash equivalents,
beginning of year 61,748,788 68,070,990
-------------- ---------------
Cash and cash equivalents,
end of year $ 82,641,444 $ 61,748,788
-------------- ---------------
For the Years Ended December 31,
------------------------------------
1997 1996
--------------- -----------------
Supplemental disclosures of
cash flow information:
Cash paid for interest $ 33,895,837 $ 28,342,148
--------------- -----------------
Cash paid for income taxes $ 975,000 $ -
------------- -----------------
Non-cash operating, investing
and financing activities:
Accretion of discount
on Senior Subordinated
Notes $ 303,640 $ 280,185
--------------- -----------------
Issuance of common stock
in connection with
acquisitions $ 66,125,000 $ 1,535,106
--------------- -----------------
Note payable incurred
for WYPX-TV acquisition $ - $ 1,650,000
--------------- -----------------
Dividends accreted on
redeemable preferred
stock $ 24,942,740 $ 12,273,227
--------------- -----------------
Discount accretion on
redeemable securities $ 1,334,266 $ 9,635,357
--------------- -----------------
Trade and barter revenue $ 3,656,597 $ 4,154,986
--------------- -----------------
Trade and barter expense $ 3,732,765 $ 4,166,918
--------------- -----------------
The Notes Consolidated Financial Statements, as found in the
Company's Form 10-K, are an integral part of the Consolidated
Financial Statements.
CONTACT: Paxson Communications Corp. Seth A. Grossman Grossman is a family name of germanic and Jewish Ashkenazi origin (in German Grossmann or Großmann).
Investor Relations Investor relations The process by which the corporation communicates with its investors. & Corporate Development 561/659-4122, Fax: 561/659-4252 http://www.pax.net |
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