-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DGX+JJCNv+/xyNiqapvWHojOXZHcrOpwQ1cBzZVZYKfMcpz5KkDwx9y4NZs74QRo L49YCYFRmncqoL18UvG3Yg== 0000783005-04-000011.txt : 20040108 0000783005-04-000011.hdr.sgml : 20040108 20040108090537 ACCESSION NUMBER: 0000783005-04-000011 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040108 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000783005 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351542018 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-23264 FILM NUMBER: 04514437 BUSINESS ADDRESS: STREET 1: ONE EMMIS PLAZA STREET 2: 40 MONUMENT CIRCLE SUITE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3172660100 MAIL ADDRESS: STREET 1: ONE EMMIS PLAZA STREET 2: 40 MONUMENT CIRCLE #700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 FORMER COMPANY: FORMER CONFORMED NAME: EMMIS BROADCASTING CORPORATION DATE OF NAME CHANGE: 19920703 8-K/A 1 jan048ka.txt JAN. 2004 8-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (date of earliest event reported): January 8, 2004 EMMIS COMMUNICATIONS CORPORATION EMMIS OPERATING COMPANY (Exact name of registrant as (Exact name of registrant as specified in its charter) specified in its charter) INDIANA INDIANA (State of incorporation or organization)(State of incorporation or organization) 0-23264 333-62172-13 (Commission file number) (Commission file number) 35-1542018 35-2141064 (I.R.S. Employer (I.R.S. Employer Identification No.) Identification No.) ONE EMMIS PLAZA ONE EMMIS PLAZA 40 MONUMENT CIRCLE 40 MONUMENT CIRCLE SUITE 700 SUITE 700 INDIANAPOLIS, INDIANA 46204 INDIANAPOLIS, INDIANA 46204 (Address of principal executive offices)(Address of principal executive offices) (317) 266-0100 (317) 266-0100 (Registrant's Telephone Number, (Registrant's Telephone Number, Including Area Code) Including Area Code) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits EXHIBIT # DESCRIPTION 99.1 Press release dated January 8, 2004. Item 12. Results of Operations & Financial Condition. On January 8, 2004, we issued the press release attached to this report as Exhibit 99.1. The text of that press release is incorporated in this Item by reference. Signatures. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EMMIS COMMUNICATIONS CORPORATION Date: January 8, 2004 By: /s/ J. Scott Enright ---------------------------------- J. Scott Enright, Vice President, Associate General Counsel and Secretary EMMIS OPERATING COMPANY Date: January 8, 2004 By: /s/ J. Scott Enright ------------------------------- J. Scott Enright, Vice President, Associate General Counsel and Secretary Exhibit 99.1 I:\Knorthern\Corporate\8-K for Jan. 8, 2004 Earnings Release.doc EX-99 3 jan04pressre.txt JAN. 04 CORRECTED PRESS RELEASE A conference call regarding this earnings release is scheduled for 9 a.m. Eastern, Thursday, Jan. 8, 2004. Dial in at 1.773.756.4624 or log on at www.emmis.com ------------- Contacts: Walter Berger, EVP & CFO Kate Healey, Media & Investor Relations For Immediate Release Thursday, Jan. 8, 2004 Emmis Communications Reports 3rd Q Results Market share gains in radio and television continue Indianapolis...Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its third fiscal quarter ending Nov. 30, 2003. For the third quarter, reported net revenue was $160.0 million, compared to $155.5 million for the same quarter of the prior year, an increase of 3%. On a pro forma basis, net revenue for the quarter was $160.0 million, compared to $161.2 million for the same quarter of the prior year, a decrease of 1%. Emmis' third quarter of the prior year included approximately $13 million of net political revenue, compared to less than $2 million in the third quarter this year. Diluted Earnings Per Share (EPS) for the quarter were $0.16, which matched diluted EPS for the same quarter of the prior year. These results exceed the company's previous guidance, as well as Wall Street First Call consensus estimates for revenues and profitability. "Emmis divisions continue to outperform their markets and industries," Jeff Smulyan, Chairman and CEO of Emmis, said. "We again exceeded guidance. In radio, we outperformed our markets by 1%, while in the 3rd calendar quarter in television we outperformed our markets by 3%. As ratings rise, our position moving forward only strengthens." For the third quarter, reported radio net revenues increased 15%, while pro forma radio net revenues increased 5%. As a result of the loss of net political revenues, as discussed above, reported television net revenues decreased 10% and pro forma television net revenues decreased 9%. Publishing net revenues were up 7%. For the third quarter, operating income was $41.9 million for the quarter, compared to $45.0 million for the same quarter of the prior year. Emmis' station operating income for the third quarter was $65.4 million, compared to $67.8 million for the same quarter of the prior year, a decrease of 3.5%. Emmis has included supplemental pro forma net revenues and station operating expenses, excluding non-cash compensation, on its website, www.emmis.com. This information, which includes all announced and consummated station and magazine acquisitions and dispositions, can be found under the "Investors" tab. -more- Add One/Emmis As of November 30, 2003, Emmis' total debt-to-EBITDA leverage (including senior discount notes) is 7x, compared with Emmis' February 28, 2002 leverage of 9.3x. Based on the guidance for its fiscal fourth quarter (listed below), Emmis' total debt-to-EBITDA leverage should be approximately 6.7x at February 29, 2004, with the company's senior bank leverage expected to be under 4x and Emmis Operating Company's total debt-to-EBITDA leverage expected to be 5.5x. On the same tab of the website, the company has provided a detailed calculation of its leverage ratios as of Nov. 30, 2003. During the third quarter, Moody's Investors Service raised Emmis' speculative grade liquidity rating to SGL-1 from SGL-2. Moody's said the upgrade reflects its expectation of Emmis' "very good" liquidity position over the next 12-18 months as supported by ratings improvements and revenue growth. Effective January 1, 2004, Emmis curtailed its stock compensation program by eliminating mandatory participation for employees making less than $52,000 per year. For calendar 2004, this change will result in an $8 million decrease in the company's non-cash compensation expense and a corresponding increase in the company's cash operating expense. International radio net revenues for the quarter ended Nov. 30, 2003, were $3.7 million. International radio station operating expenses for the third quarter were $2.9 million. Subsequent to the quarter end, Emmis announced that it agreed to sell its controlling interest in Votionis, S.A., an Argentine broadcasting company, to its local minority partners, Daniel Hadad and Viviana Zocco, for approximately $7 million in cash. That transaction is expected to close in the first half of 2004, subject to receiving regulatory approval. Votionis operates one AM and one FM station in Buenos Aires. Emmis also announced that the Flemish Government has awarded licenses to operate nine FM radio stations serving more than 50% of the population in the Flanders region of Belgium. Pro forma calculations assume the following events all had occurred on March 1, 2002: (a) the acquisition of (i) a controlling interest of 50.1% in a partnership that owns six radio stations in the Austin, Texas metropolitan area in July 2003 and (ii) WBPG-TV in March 2003 and (b) the disposition of (i) KALC-FM and KXPK-FM in May 2002 and (ii) Mira Mobile, a mobile television production company, in June 2003. The following table reconciles reported results to pro forma results (dollars in thousands):
3 months ended Nov. 30, Change 9 months ending Nov. 30, Change ------ ------ 2003 2002 % 2003 2002 % ---- ---- - ---- ---- - Radio Reported net revenues $75,528 $65,710 15% $221,284 $198,324 12% Plus: Revenues from assets acquired - 5,898 8,860 18,445 Less: net revenues from assets disposed - - - (1,238) - ------------------------------- --------- ------- Pro forma net revenues $75,528 $71,608 5% $230,144 $215,531 7% ======= ======= ======== ======== Television Reported net revenues $63,182 $69,910 -10% $179,532 $182,493 -2% Plus: Revenues from assets acquired - 385 - 767 Less: net revenues from assets disposed - (666) (1,140) (2,522) - ----- ------- ------- Pro forma net revenues $63,182 $69,629 -9% $178,392 $180,738 -1% ======= ======= ======== ======== Publishing Reported net revenues $21,335 $19,924 7% $57,299 $54,755 5% Plus: Revenues from assets acquired - - - - Less: net revenues from assets disposed - - - - - ------- ------- ----------- Pro forma net revenues $21,335 $19,924 7% $57,299 $54,755 5% ======= ======= ======= ======= Total Company Reported net revenues operating income $160,045 $155,544 3% $458,115 $435,572 5% Plus: Revenues from assets acquired - 6,283 8,860 19,212 Less: Revenues from assets disposed (666) (1,140) (3,760) ----- ------- ------- Pro forma net revenues $160,045 $161,161 -1% $465,835 $451,024 3% ======== ======== ======== ========
Guidance Table (Dollars in millions) Quarter Ending Reported 2/29/04 Full Year Net Revenues: Domestic Radio $60.0- $61.1 $270.4 - $271.5 International Radio $3.0 - $3.1 $13.9 - $14.0 Total Radio $63.0 - $64.2 $284.3 - $285.5 Television $55.0 - $56.0 $234.6 - $235.6 Publishing $18.0 - $18.2 $75.2 - $75.4 Total net revenues $136.0 - $138.4 $594.1 - $596.5 Station Operating Expenses, excluding non-cash compensation: Domestic Radio $37.0-$37.1 $148.0 - $148.1 International Radio $2.3 $10.8 Total Radio $39.3 - $39.4 $158.8 - $158.9 Television $39.0 - $39.2 $150.7 - $150.9 Publishing $16.3 - $16.4 $65.0 - $65.1 Total station operating expenses, excluding non-cash comp $94.6 - $95.0 $374.5 - $374.9
The above domestic radio net revenue guidance implies pro forma growth of 4%-6% in Q4. The above international radio guidance reflects the planned sale of Emmis' two Argentine radio stations. Prior year pro forma results are available on the company's website. Emmis will host a conference call regarding this information on Thursday, Jan. 8, 2004 at 9 a.m. Eastern at 1.773.756.4624, with a replay available until Thursday, Jan. 15, 2004 at 1.402.530.8055, or listen on-line by logging on to www.emmis.com. Emmis generally evaluates the performance of its operating entities based on station operating income. Management believes that station operating income is useful to investors because it provides a meaningful comparison of operating performance between companies in the industry and serves as an indicator of the market value of a group of stations or publishing entities. Station operating income is generally recognized by the broadcast and publishing industries as a measure of performance and is used by analysts who report on the performance of broadcasting and publishing groups. Station operating income does not take into account Emmis' debt service requirements and other commitments and, accordingly, station operating income is not necessarily indicative of amounts that may be available for dividends, reinvestment in Emmis' business or other discretionary uses. Station operating income is not a measure of liquidity or of performance in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to and not a substitute for our results of operations presented on the basis of accounting principles generally accepted in the United States. Moreover, station operating income is not a standardized measure and may be calculated in a number of ways. Emmis defines station operating income as revenues net of agency commissions and station operating expenses, excluding non-cash compensation. Emmis Communications - Great Media, Great People, Great Service sm Emmis Communications is an Indianapolis based diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations. Emmis' 23 FM and 4 AM domestic radio stations serve the nation's largest markets of New York, Los Angeles and Chicago as well as Phoenix, St. Louis, Austin, Indianapolis and Terre Haute, IN. In addition, Emmis owns 16 television stations, a radio network, three international radio stations, regional and specialty magazines, and ancillary businesses in broadcast sales and book publishing. The information in this news release is being widely disseminated in accordance with the Securities & Exchange Commission's Regulation FD. Certain statements included above which are not statements of historical fact, including financial data for quarters or other periods that are not yet completed and statements identified with the words "continues," "expect," "will," or "would" are intended to be, and are, identified as "forward-looking statements," as defined in the Securities and Exchange Act of 1934, as amended, and involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Emmis to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others, general economic and business conditions; fluctuations in the demand for advertising; increased competition in the broadcasting industry including the implementation of competing formats in large markets; changes in the costs of programming; changes in interest rates; inability to grow through suitable acquisitions, including the desired radio; future terrorist attacks or other large-scale disasters; failure to receive necessary regulatory approvals; and other factors mentioned in documents filed by Emmis with the Securities and Exchange Commission, including the current report on Form 8-K/A, July 15, 2002. Emmis does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise. -30- Note: Financial schedule attached. EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL DATA (Unaudited, dollars in thousands, except per share data)
Three months ended November 30, Nine months ended November 30, ------------------------------- ------------------------------ 2003 2002 2003 2002 ---- ---- ---- ---- OPERATING DATA: Net revenues: Radio $ 75,528 $ 65,710 $ 221,284 $ 198,324 Television 63,182 69,910 179,532 182,493 Publishing 21,335 19,924 57,299 54,755 Total net revenues 160,045 155,544 458,115 435,572 Operating expenses, excluding noncash compensation: Radio 40,775 34,285 119,465 103,793 Television 37,656 37,752 111,685 109,816 Publishing 16,254 15,744 48,815 46,467 Total station operating expenses, excluding noncash compensation 94,685 87,781 279,965 260,076 Corporate expenses, excluding noncash compensation 6,066 5,571 17,690 15,750 Noncash compensation (a) 5,585 6,470 18,056 17,600 Depreciation and amortization 11,769 10,738 34,728 32,090 ------ ------ ------ ------ Operating income 41,940 44,984 107,676 110,056 Interest expense (20,919) (24,468) (64,863) (80,611) Gain (loss) from unconsolidated affiliates 11 (128) (328) (4,208) Gain (loss) on sale of assets (b) (95) (33) 862 8,900 Loss on debt extinguishment - - - (13,506) Minority interest income (expense) (1,352) (110) (2,141) (14) Other income (expense), net (517) (275) (232) 886 ---------------- --------------- ---------------- --------------- Income (loss) before income taxes and accounting chang19,068 19,970 40,974 21,503 Provision for income taxes 7,752 9,156 17,302 13,419 ----- ----- ------ ------ Income (loss) before accounting change 11,316 10,814 23,672 8,084 Cumulative effect of accounting change, net of taxes of $102,600 in 2002 - - - 167,400 Net income (loss) 11,316 10,814 23,672 (159,316) Preferred stock dividends 2,246 2,246 6,738 6,738 ----- ----- ----- ----- Net income (loss) available to common shareholders $ 9,070 $ 8,568 $ 16,934 $ (166,054) ======= ======= ======== ========== Basic net income (loss) per common share: Before accounting change $ 0.17 $ 0.16 $ 0.31 $ 0.03 Cumulative effect of accounting change, net of tax - - - (3.16) Net income (loss) available to common shareholders $ 0.17 $ 0.16 $ 0.31 $ (3.13) ====== ====== ====== ======= Diluted net income (loss) per common share: Before accounting change $ 0.16 $ 0.16 $ 0.31 $ 0.02 Cumulative effect of accounting change, net of tax - - - (3.14) ---------------- --------------- ---------------- --------------- Net loss available to common shareholders $ 0.16 $ 0.16 $ 0.31 $ (3.12) ====== ====== ====== ======= Weighted average shares outstanding: Basic 54,895 53,358 54,470 53,019 Diluted 55,252 53,507 54,780 53,280 (a) Noncash compensation by segment: Radio $ 1,660 $ 2,086 $ 6,010 $ 7,225 Television 1,985 2,029 6,119 5,235 Publishing 706 709 2,185 1,858 Corporate 1,234 1,646 3,742 3,282 ---------------- --------------- ---------------- --------------- Total $ 5,585 $ 6,470 $ 18,056 $ 17,600 ======= ======= ======== ======== (b) Reflects gain on sale of Mira Mobile in June 2003 and Denver radio assets in May 2002.
OTHER DATA: Station operating income (See below) 65,360 67,763 178,150 175,496 Cash paid for taxes 164 - 924 630 Capital expenditures 8,956 8,849 17,718 21,035 COMPUTATION OF STATION OPERATING INCOME: Operating income $ 41,940 $ 44,984 $ 107,676 $ 110,056 Plus: Depreciation and amortization 11,769 10,738 34,728 32,090 Plus: Corporate expenses, excluding noncash compensa 6,066 5,571 17,690 15,750 Plus: Noncash compensation 5,585 6,470 18,056 17,600 ----- ----- ------ ------ Station operating income $ 65,360 $ 67,763 $ 178,150 $ 175,496 ======== ======== ========= ========= SELECTED BALANCE SHEET INFORMATION: November 30, 2003 February 28, 2003 ----------------- ----------------- Total Cash and Cash Equivalents $ 12,624 $ 16,079 Senior Debt $ 764,786 $ 706,898 Senior Subordinated Debt 300,000 300,000 Senior Discount Notes 216,825 197,844 ------- ------- Total Senior, Senior Subordinated and Senior Disc$u1, 281,611 $ 1,204,742 ======= ===========
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