<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
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 3, 1997
CHANCELLOR BROADCASTING COMPANY
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-27726 75-2538487
(Commission File Number) (I.R.S. Employer Identification No.)
12655 North Central Expressway, Suite 405, Dallas, Texas 75243
(Address of Principal Executive Offices) (Zip Code)
(972) 239-6220
(Registrant's Telephone Number, Including Area Code)
<PAGE> 2
ITEM 5. OTHER EVENTS
On January 3, 1997, Chancellor Broadcasting Company (together with its
subsidiaries, (the "Company") issued the press release filed herewith as
Exhibit 99. In connection with the offering of its __% Convertible Preferred
Stock referred to in the attached press release, the Company prepared a
preliminary offering memorandum that contained an estimate of the Company's
1996 results of operations, on an actual and pro forma basis, to give effect to
the consummation of certain pending acquisitions, asset swaps and
dispositions. In addition, the preliminary offering memorandum contained certain
pro forma financial statements of operations for the year ended December 31,
1995 and for the nine months ended September 30, 1995 and 1996, and a pro forma
balance sheet as of September 30, 1996. These estimates and pro forma financial
statements are set forth below.
The following unaudited pro forma financial information (the "Pro Forma
Financial Information") is based on the historical financial statements of
(i) the Company, (ii) KDWB-FM (acquired by the Company in August 1995),
(iii) Trefoil Communications, Inc. and its wholly owned subsidiary, Shamrock
Broadcasting, Inc., and its respective subsidiaries (collectively, "Shamrock
Broadcasting") (acquired by the Company in February 1996), (iv) KIMN-FM and
KALC-FM (acquired by the Company in July 1996), (v) the stations to be acquired
the ("Colfax Acquisition") from Colfax Communications, Inc. and its associates
("Colfax"), (vi) KOOL-FM (acquired by Colfax in April 1996), (vii) the stations
acquired by Colfax from Sundance Broadcasting, Inc. in September 1996, (viii)
the stations in Orlando, Florida to be acquired (the "Omni Acquisition") from
OmniAmerica Group (the "Omni Stations"), (ix) KSTE-AM in Sacramento, California,
which will be acquired from American Radio System Corporation, (x) the three
FM and one AM stations in Nassau-Suffolk (Long Island) to be acquired from SFX
Communications, Inc. and (xi) WKYN-AM, acquired by the Company in November 1996.
Financial information for the SFX stations in Nassau-Suffolk, KSTE-AM and
WKYN-AM is shown in the Pro Forma Information under the caption "All Other".
The pro forma condensed statements of operations for the year ended
December 31, 1995 and for the nine months ended September 30, 1995 and 1996
give effect to the consummation of the acquisition of Shamrock Broadcasting,
the acquisition of KDWB-FM, the exchange of a Houston station for two Denver
stations and the acquisition of WKYN-AM (collectively, the "Completed
Transactions") and the disposition of WWWW-FM and WDFN-AM in Detroit, the
acquisition of the Colfax stations (two of which will be divested) and the
acquisition of the Omni Stations (five of which will be divested in exchange
for the SFX Nassau-Suffolk stations and KSTE-AM in Sacramento (collectively the
"Pending Transactions") and, in each case, the financing thereof, as if each
such transaction had occurred on January 1, 1995. The pro forma balance sheet
as of September 30, 1996 has been prepared as if the Pending Transactions and
the financing thereof, had occurred on that date. The Pro Forma Financial
Information is not necessarily indicative of either future results of
operations or the results that might have occurred if the foregoing
transactions had been consummated on the indicated dates.
The purchases of KDWB-FM and Shamrock Broadcasting were accounted for using
the purchase method of accounting. The Denver Exchange was accounted for using
the fair value of the Houston station and the additional cash consideration
paid. The Pending Transactions will be accounted for using the purchase method
of accounting. The total purchase costs of the acquisitions and exchanges will
be allocated to the tangible and intangible assets and liabilities acquired
based upon their respective fair values. The allocation of the aggregate
purchase price reflected in the Pro Forma Financial Information is preliminary.
The final allocation of the purchase price is contingent upon the receipt of
final appraisals of the acquired assets; however, such allocation is not
expected to differ materially from the preliminary allocation.
2
<PAGE> 3
UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
HISTORICAL
-----------------------------------------------------------------------------------------
SHAMROCK KIMN-FM OMNI
CHANCELLOR BROADCASTING KDWB-FM KALC-FM COLFAX SUNDANCE KOOL-FM STATIONS
---------- ------------ ------- -------- ------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues........................ $ 64,322 $ 94,605 $ 893 $7,205 $30,143 $14,840 $4,914 $13,468
---------- -------- ----- ------ ------- ------- ------ -------
Station operating expenses.......... 37,464 73,720 473 6,193 22,169 9,774 3,573 9,128
Depreciation and amortization....... 9,047 8,751 518 875 6,505 2,145 899 1,576
Corporate expenses.................. 1,816 3,139 -- -- -- -- -- --
Stock option compensation expense... 6,360 -- -- -- -- -- -- --
---------- -------- ----- ------ ------- ------- ------ -------
Operating income (loss)........... 9,635 8,995 (98) 137 1,469 2,921 442 2,764
Interest expense.................... 17,324 14,703 -- -- 656 -- 1,162 --
Other (income) expense.............. 42 (78) 23 2 771 21 -- (264)
---------- -------- ----- ------ ------- ------- ------ -------
Income (loss) before provision for
income taxes.................... (7,731) (5,630) (121) 135 42 2,900 (720) 3,028
Provision for income taxes.......... 3,800 (1,287) (93) -- -- -- -- --
Dividends and accretion on preferred
stock of subsidiary............... -- -- -- -- -- -- -- --
---------- -------- ----- ------ ------- ------- ------ -------
Net income (loss)................. (11,531) $ (4,343) $ (28) $ 135 $ 42 $ 2,900 $(720) $ 3,028
======== ===== ====== ======= ======= ====== =======
Dividends on preferred stock........ --
----------
Loss applicable to common shares.... $ (11,531)
==========
Deficiency of earnings to fixed
charges and preferred stock
dividends and accretions.......... $ 7,731
Loss per common share(R)............ $ (1.30)
Weighted average number of shares
outstanding(R).................... 8,850,075
<CAPTION>
HISTORICAL
----------
ALL
OTHER ADJUSTMENTS PRO FORMA
------- ----------- ----------
<S> <C> <C> <C>
Net revenues........................ $13,508 $ (540)(A) $ 223,429
(19,929)(B)
------- --------- ---------
Station operating expenses.......... 9,343 (540)(A) 143,965
(15,891)(B)
(11,441)(C)
Depreciation and amortization....... 2,927 4,757 (D) 38,000
Corporate expenses.................. 1,460 (2,015)(E) 4,400
Stock option compensation expense... -- -- 6,360
------- --------- ---------
Operating income (loss)........... (222) 4,661 30,704
Interest expense.................... 25 21,978 (F) 55,848
Other (income) expense.............. (12) -- 505
------- --------- ---------
Income (loss) before provision for
income taxes.................... (235) (17,317) (25,649)
Provision for income taxes.......... -- 8,505 (G) 10,925
Dividends and accretion on preferred
stock of subsidiary............... -- 26,340 (H) 26,340
------- --------- ---------
Net income (loss)................. $ (235) $ (52,162) (62,914)
======= =========
Dividends on preferred stock........ $ 6,500 (H) 6,500
---------
Loss applicable to common shares.... $ (69,414)
=========
Deficiency of earnings to fixed
charges and preferred stock
dividends and accretions.......... $ 80,382
Loss per common share(R)............ $ (3.63)
Weighted average number of shares
outstanding(R).................... 19,110,230
</TABLE>
See Accompanying Notes to Pro Forma Financial Information
3
<PAGE> 4
UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
HISTORICAL
---------------------------------------------------------------------------------------
SHAMROCK KIMN-FM OMNI
CHANCELLOR BROADCASTING KDWB-FM KALC-FM COLFAX SUNDANCE KOOL-FM STATIONS
---------- ------------ ------- ------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues.......................... $ 47,921 $ 69,630 $ 893 $5,210 $21,692 $10,718 $3,497 $11,134
--------- -------- ----- ------ ------- ------- ------ -------
Station operating expenses............ 28,120 55,413 473 4,519 15,678 7,389 2,838 7,370
Depreciation and amortization......... 6,708 6,549 518 699 5,084 1,761 657 1,331
Corporate expenses.................... 1,292 2,515 -- -- -- -- -- --
Stock option compensation expense..... 5,410 -- -- -- -- -- -- --
--------- -------- ----- ------ ------- ------- ------ -------
Operating income (loss)....... 6,391 5,153 (98) (8) 930 1,568 2 2,433
Interest expense...................... 12,780 11,067 -- -- 476 -- 876 --
Other (income) expense................ 82 (169) 23 -- 939 17 -- (84)
--------- -------- ----- ------ ------- ------- ------ -------
Income (loss) before provision
for income taxes............ (6,471) (5,745) (121) (8) (485) 1,551 (874) 2,517
Provision for income taxes............ 2,829 (1,798) (93) -- -- -- -- --
Dividends and accretion on preferred
stock of subsidiary................. -- -- -- -- -- -- -- --
--------- -------- ----- ------ ------- ------- ------ -------
Net income (loss)............. (9,300) $ (3,947) $ (28) $ (8) $ (485) $ 1,551 $ (874) $ 2,517
======== ===== ====== ======= ======= ====== =======
Dividends on preferred stock.......... --
---------
Loss applicable to common shares...... $ (9,300)
=========
Deficiency of earnings to fixed
charges and preferred stock
dividends and accretion............. $ 6,471
Loss per common share (R)............. $ (1.05)
Weighted average number of shares
outstanding (R)..................... 8,849,851
<CAPTION>
HISTORICAL
----------
ALL
OTHER ADJUSTMENTS PRO FORMA
------- ------------ ----------
<S> <C> <C> <C>
Net revenues.......................... $10,169 $ (540)(A) $ 165,504
(14,820)(B)
------- -------- ---------
Station operating expenses............ 7,084 (540)(A) 107,906
(12,192)(B)
(8,246)(C)
Depreciation and amortization......... 1,868 3,325 (D) 28,500
Corporate expenses.................... 987 (1,494)(E) 3,300
Stock option compensation expense..... -- -- 5,410
------- -------- ---------
Operating income (loss)....... 230 3,787 20,388
Interest expense...................... 22 16,880 (F) 42,101
Other (income) expense................ -- -- 808
------- -------- ---------
Income (loss) before provision
for income taxes............ 208 (13,093) (22,521)
Provision for income taxes............ 40 7,216 (G) 8,194
Dividends and accretion on preferred
stock of subsidiary................. -- 19,511 (H) 19,511
------- -------- ---------
Net income (loss)............. $ 168 $(39,820) (50,226)
======= ========
Dividends on preferred stock.......... 4,875 (H) $ 4,875
---------
Loss applicable to common shares...... $ (55,101)
=========
Deficiency of earnings to fixed
charges and preferred stock
dividends and accretion............. $ 63,164
Loss per common share (R)............. $ (2.88)
Weighted average number of shares
outstanding (R)..................... 19,110,230
</TABLE>
See Accompanying Notes to Pro Forma Financial Information
4
<PAGE> 5
UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
HISTORICAL
-----------------------------------------------------------------------------
SHAMROCK KIMN-FM OMNI
CHANCELLOR BROADCASTING KALC-FM COLFAX SUNDANCE KOOL-FM STATIONS
---------- ------------ ------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenues..................................... $ 122,838 $ 8,464 $1,796 $28,146 $12,104 $1,431 $7,445
---------- -------- ------- ------- ------- ------ -------
Station operating expenses....................... 74,922 7,762 1,617 18,684 7,678 852 5,325
Depreciation and amortization.................... 17,704 595 511 3,933 1,242 229 1,458
Corporate expenses............................... 3,377 2,215 -- -- -- -- --
Stock option compensation expense................ 2,850 -- -- -- -- -- --
---------- -------- ------- ------- ------- ------ -------
Operating income (loss)........................ 23,985 (2,108) (332) 5,529 3,184 350 662
Interest expense................................. 24,469 1,380 -- 3,227 -- 299 --
Other (income) expense........................... 130 49 (2,847) (120) 25 -- (404)
---------- -------- ------- ------- ------- ------ -------
Income (loss) before provision for income
taxes........................................ (614) (3,537) 2,515 2,422 3,159 51 1,066
Provision for income taxes....................... 2,201 -- -- -- -- -- --
Dividends and accretion on preferred stock of
subsidiary................................... 8,187 -- -- -- -- -- --
---------- -------- ------- ------- ------- ------ -------
Net income (loss) before extraordinary loss.... (11,002) (3,537) 2,515 2,422 3,159 51 1,066
Extraordinary loss on early extinguishment of
debt........................................... 5,609 -- -- -- -- -- --
---------- -------- ------- ------- ------- ------ -------
Net income (loss).............................. (16,611) $ (3,537) $2,515 $ 2,422 $ 3,159 $ 51 $1,066
======== ======= ======= ======= ====== =======
Dividends on preferred stock..................... --
Loss on repurchase of preferred stock............ 16,570
----------
Loss applicable to common shares................. $ (33,181)
==========
Deficiency of earnings to fixed charges and
preferred stock dividends and accretion........ $ 8,801
Loss per common share (R)........................ $ (2.06)
Weighted average number of shares outstanding
(R)............................................16,125,754
<CAPTION>
HISTORICAL
----------
ALL OTHER ADJUSTMENTS PRO FORMA
--------- ------------ ----------
<S> <C> <C> <C>
Net revenues..................................... $ 6,933 $(10,754)(B) $ 176,670
(1,733)(K)
------- -------- ---------
Station operating expenses....................... 5,348 (5,934)(B) 110,581
(1,900)(C)
(3,773)(K)
Depreciation and amortization.................... 2,307 806 (D) 28,785
Corporate expenses............................... 1,024 (2,491)(E) 4,125
Stock option compensation expense................ -- -- 2,850
------- -------- ---------
Operating income (loss)........................ (1,746) 805 30,329
Interest expense................................. 27 11,638 (F) 41,040
Other (income) expense........................... (5,100) -- (8,267)
------- -------- ---------
Income (loss) before provision for income
taxes........................................ 3,327 (10,833) (2,444)
Provision for income taxes....................... -- 5,993 (G) 8,194
Dividends and accretion on preferred stock of
subsidiary................................... -- 13,772 (H) 21,959
------- -------- ---------
Net income (loss) before extraordinary loss.... 3,327 (30,598) (32,597)
Extraordinary loss on early extinguishment of
debt........................................... -- (5,609)(I) --
------- -------- ---------
Net income (loss).............................. $ 3,327 $(24,989) (32,597)
======= ========
Dividends on preferred stock..................... $ 4,875 (H) 4,875
Loss on repurchase of preferred stock............ (16,570)(J) --
---------
Loss applicable to common shares................. $ (37,472)
=========
Deficiency of earnings to fixed charges and
preferred stock dividends and accretion........ $ 47,167
Loss per common share (R)........................ $ (1.96)
Weighted average number of shares outstanding
(R)............................................ 19,110,230
</TABLE>
See Accompanying Notes to Pro Forma Financial Information
5
<PAGE> 6
UNAUDITED PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1996
(DOLLARS IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
HISTORICAL
-----------------------------------------------
OMNI
CHANCELLOR COLFAX STATIONS ALL OTHER ADJUSTMENTS PRO FORMA
---------- -------- -------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Current assets:
Cash....................................... $ 5,112 $ 2,504 $ 1,823 $ 2,755 $ (4,579)(L) $ 7,615
Accounts receivable, net................... 42,172 9,848 718 470 (1,188)(L) 52,020
Prepaid expenses and other................. 1,955 646 19 83 2,703
-------- -------- ------- ------- --------- ---------
Total current assets................. 49,239 12,998 2,560 3,308 (5,767) 62,338
Restricted cash.............................. 20,000 -- -- -- (20,000)(M) --
Property and equipment, net.................. 49,082 10,218 23,432 4,908 15 (N) 87,655
Intangible and other assets, net............. 586,863 147,520 14,636 33,249 (4,870)(M) 1,008,158
230,760 (N)
-------- -------- ------- ------- --------- ----------
Total assets......................... $705,184 $170,736 $40,628 $41,465 $ 200,138 $1,158,151
======== ======== ======= ======= ========= ==========
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt.......... 400 -- -- -- 9,725 (M) 10,125
Accounts payable and other accrued
expenses................................. 14,487 4,186 55 363 (185)(O) 18,906
-------- -------- ------- ------- --------- ---------
Total current liabilities............ 14,887 4,186 55 363 9,540 29,031
-------- -------- ------- ------- --------- ---------
Long-term debt............................... 364,708 57,950 -- -- (57,950)(M) 600,324
235,616 (M)
Deferred tax liability....................... 19,037 -- -- -- -- 19,037
Other........................................ 821 -- -- 77 -- 898
-------- -------- ------- ------- --------- ---------
Total liabilities.................... 399,453 62,136 55 440 187,206 649,290
Senior exchangeable preferred stock.......... 103,853 -- -- -- -- 103,853
Exchangeable preferred stock................. -- -- -- -- 96,500 (P) 96,500
Stockholders' equity......................... 201,878 108,600 40,573 41,025 (4,870)(M) 308,508
(190,198)(Q)
96,500 (P)
15,000 (P)
-------- -------- ------- ------- --------- ----------
Total liabilities and stockholder's
equity............................. $705,184 $170,736 $40,628 $41,465 $ 200,138 $1,158,151
======== ======== ======= ======= ========= ==========
</TABLE>
See Accompanying Notes to Pro Forma Financial Information
6
<PAGE> 7
NOTES TO PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
(A) The adjustment represents the elimination of time brokerage fees paid by the
Company in 1995 to Midcontinent Radio of Minnesota, Inc. from February 1,
1995 to July 31, 1995 pursuant to an LMA relating to KDWB-FM.
(B) The adjustment represents the elimination of net revenues and station
operating expenses of the Houston station, which was exchanged for two
Denver stations (KIMN and KALC) in July 1996, and the Detroit and Milwaukee
stations, which are pending disposition:
<TABLE>
<CAPTION>
HOUSTON DETROIT MILWAUKEE TOTAL
------- ------- --------- -------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
----------------------------
Net revenues................................................... $4,125 $7,757 $ 8,047 $19,929
Station operating expenses..................................... 4,032 7,082 4,777 15,891
NINE MONTHS ENDED SEPTEMBER 30, 1995
------------------------------------
Net revenues................................................... 3,229 5,619 5,972 14,820
Station operating expenses..................................... 3,312 5,275 3,605 12,192
NINE MONTHS ENDED SEPTEMBER 30, 1996
------------------------------------
Net revenues................................................... 1,464 2,980 6,310 10,754
Station operating expenses..................................... 726 1,361 3,847 5,934
</TABLE>
(C) The adjustment reflects cost savings resulting from the elimination of
redundant operating expenses arising from the combination of the Company and
Shamrock Broadcasting, including the elimination of certain station
management positions, the standardization of employee benefits and
compensation practices and the implementation of operating strategies
currently utilized by the Company's management. The pro forma cost savings
are summarized as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, ---------------------
1995 1995 1996
----------- ------ ------
<S> <C> <C> <C>
SHAMROCK BROADCASTING
---------------------
Selling expenses.................................................... $ 3,135 $2,422 $ 523
Programming and technical........................................... 2,297 1,610 383
Advertising and promotions.......................................... 2,554 1,484 422
General and administrative.......................................... 3,455 2,730 572
------- ------ ------
Total......................................................... $11,441 $8,246 $1,900
======= ====== ======
</TABLE>
(D) The adjustment reflects (i) a change in depreciation and amortization
resulting from conforming the estimated useful lives of the acquired
stations and (ii) the additional depreciation and amortization expense
resulting from the allocation of the purchase price of the acquired
stations, net of stations exchanged and sold, including an increase in
property and equipment and intangible assets to their estimated fair market
value and the recording of goodwill associated with the acquisitions.
Goodwill is amortized over 40 years.
(E) The adjustment reflects cost savings anticipated to be achieved by operating
all of the stations under the Company's decentralized management strategy
and from the elimination of redundant management costs.
(F) The adjustment reflects the effect on interest expense of the change in debt
structure resulting from each pro forma event. Pro forma interest reflects
$260,000 of Subordinated Notes, with an annual interest rate of 10.0%, and
$350,449 of bank financing with an annual interest rate of approximately
8.7%.
(G) The adjustment reflects the increase in the provision for income taxes
resulting from the deferred tax liabilities generated during each period
from the respective acquisitions, offset by the reversal of book/tax basis
differences of Shamrock Broadcasting during each period had the acquisition
occurred on January 1, 1995.
(H) The adjustment reflects the dividends and accretion on the Chancellor Radio
Broadcasting Company's ("Broadcasting") 12 1/4% Series A Cumulative Senior
Exchangeable Preferred Stock, par value $0.01 per share (the "Senior
Exchangeable Preferred Stock"), where not already included, and
Broadcastings' ___% Exchangeable Preferred Stock, par value $0.01 per share
(the "Exchangeable Preferred Stock"), and the Company's ___% Convertible
Preferred Stock.
(I) The adjustment reflects the elimination of a non-recurring extraordinary
loss on early extinguishment of debt in connection with the refinancing of
the Company's term and revolving loan facilities in conjunction with the
acquisition of Shamrock Broadcasting and a partial prepayment of the
Company's existing credit agreement in August 1996.
(J) The adjustment reflects the elimination of a non-recurring loss on
repurchase of preferred stock which was recognized in March 1996 in
connection with the acquisition of Shamrock Broadcasting.
(K) The adjustment reflects the elimination of the LMA and related facility fee
payments for the acquisition of the Omni Stations and the subsequent swaps.
(L) The adjustment represents the elimination of the historical cash and
receivables balances, net of the allowance for bad debts, for the Omni
Transaction, as the respective acquisition and exchange agreements exclude
these items.
(M) The adjustment reflects (i) the application of the restricted cash ($20,000)
and borrowings under the Company's proposed amended and restated $475.0
million credit agreement ($350,449) to finance the Colfax Acquisition and
the Omni Acquisition, net of the proceeds of the pending station swaps and
dispositions, (ii) the repayment of the existing credit agreement
($105,108) and (iii) the elimination of $4,870 of the Company's deferred
financing costs associated with the existing credit agreement, which will
be recognized as an extraordinary loss in the period the refinancing occurs.
7
<PAGE> 8
(N) The adjustment reflects the allocation of the purchase price of the pending
acquisitions, net of the pending dispositions and exchanges, to the assets
being acquired and liabilities being assumed resulting in an increase in
property and equipment and intangible assets to their estimated fair values
and the recording of goodwill associated with the transactions as follows:
<TABLE>
<CAPTION>
OMNI
COLFAX TRANSACTION ALL OTHER CORPORATE TOTAL
-------- ----------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Cash................................................ $ 2,504 $ 2,504
Accounts receivable, net............................ 9,848 9,848
Prepaid expenses and other.......................... 646 102 748
Property and equipment.............................. 27,735 13,313 (2,475) 38,573
Goodwill............................................ 303,572 146,143 (27,051) 422,664
Deferred financing.................................. -- -- -- 3,500 3,500
Accounts payable and other accrued expenses......... (4,186) (418) 91 (4,513)
-------- --------- -------- ------- --------
Total....................................... $340,119 $ 159,140 $(29,435) $ 3,500 $473,325
======== ========= ======== ======= ========
</TABLE>
(O) The adjustment represents the elimination of the accounts payable and other
accrued expenses for the Detroit and Milwaukee stations, which are being
sold.
(P) The adjustment reflects (i) the sale of the Exchangeable Preferred Stock,
net of related transaction costs ($96,500), (ii) the sale of the Convertible
Preferred Stock, net of related transaction costs ($96,500) and (iii) the
sale of the Class A Common Stock ($15,000) pursuant to the Omni Acquisition
agreement.
(Q) The adjustment reflects the elimination of the historical equity balances of
the stations being acquired.
(R) Reflects the effect of the recapitalization of the number of shares
outstanding and the additional shares issued in 1996 in conjunction with the
Company's initial public offering of its Class A Common Stock, the purchase
by HM2/HMW, L.P. of 1,185,521 shares of Class A Common Stock for $23.0
million in February 1996 and the additional Class A Common Stock to be
issued in conjunction with the Omni Acquisition.
8
<PAGE> 9
ESTIMATED RESULTS OF OPERATIONS
Based on preliminary information available to management, the Company is
currently estimating that its net revenue and broadcast cash flow for the year
ended December 31, 1996 will be $178.0 million and $67.1 million, respectively.
On a pro forma basis after giving effect to the consummation of the Completed
Transactions and the Pending Transactions and the financing thereof, as though
such transactions had occurred of January 1, 1996, the Company is currently
estimating, based on its analysis of unaudited information of the businesses to
be acquired through November 30, 1996, that its net revenue and broadcast cash
flow for the year ended December 31, 1996 would be $247.7 million and $100.2
million, respectively, which includes $2.3 million of cost savings related to
the Colfax Acquisition. Neither the Company's results of operations nor those of
the businesses to be acquired in the Pending Transactions for the year ended
December 31, 1996 have been audited or reviewed by the Company's independent
accountants. Accordingly, investors are cautioned against placing undue reliance
on the foregoing estimates.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
99. Press release dated January 3, 1997.
9
<PAGE> 10
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behlaf by the
undersigned hereunto duly authorized.
PENNCORP FINANCIAL GROUP, INC.
Date: January 6, 1997 By /s/ ERIC W. NEUMANN
----------------------------------------
Eric W. Neumann
Senior Vice President-Finance
10
<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
99 - Press Release dated January 3, 1997.
</TABLE>
<PAGE> 1
EXHIBIT 99
CHANCELLOR BROADCASTING COMPANY ANNOUNCES PRIVATE OFFERINGS OF
SECURITIES TO FINANCE PENDING ACQUISITIONS
DALLAS, TX, January 3, 1997 -- Chancellor Broadcasting Company (Nasdaq:
CBCA) announced today that it and its wholly-owned subsidiary, Chancellor Radio
Broadcasting Company, are commencing private offerings of securities to raise
funds to enable them to consummate the previously announced acquisition of 8
radio stations from OmniAmerica Group and 12 radio stations from Colfax
Communications, Inc.
Chancellor Broadcasting Company will be offering $100 million liquidation
preference of a new class of convertible preferred stock. The net proceeds from
this offering will be contributed as equity to Chancellor Radio Broadcasting
Company for use in the pending acquisitions. The convertible preferred stock
will be convertible, at a price to be determined, into shares of Chancellor's
Class A Common Stock, which is traded in the Nasdaq National Market. On
January 2, 1997, the last reported sale price of the Class A Common Stock on the
Nasdaq National Market was $23.88 per share.
Chancellor Radio Broadcasting Company concurrently will be offering $100
million liquidation preference of a new class of its Exchangeable Preferred
Stock due 2009.
The proceeds from the sale of the Convertible Preferred Stock and the
Exchangeable Preferred Stock, together with borrowings under a new, $475
million credit facility being arranged by Chancellor Radio Broadcasting
Company, will be used to fund the cash purchase price for the pending Omni and
Colfax acquisitions and to refinance Chancellor Radio Broadcasting's existing
bank borrowings. The Company has agreed to sell or swap certain of the stations
it is acquiring in the Omni and Colfax transactions. When consummated, those
transactions would generate approximately $92.0 million in net cash proceeds,
which Chancellor Radio Broadcasting will use, when received, to reduce its
credit agreement borrowings. The consummation of the pending station swaps and
sales are subject to governmental approvals and, in the case of the sale of the
Milwaukee stations to be acquired from Colfax, the negotiation of definitive
documentation.
The Convertible Preferred Stock and the Exchangeable Preferred Stock to be
sold in the foregoing offerings will not be and have not been registered under
the Securities Act of 1933, as amended, or any state securities or blue sky
laws and may not be offered or sold in the United States or in any state
thereof absent registration or an applicable exemption from the registration
requirements of such laws.
Chancellor Broadcasting was formed in 1993 by Steven Dinetz and Hicks,
Muse, Tate & Furst to pursue acquisitions in the radio broadcast industry.
Chancellor Broadcasting is one of the leading pure-play radio broadcasting
companies in the United States. Upon consummation of all pending acquisitions,
Chancellor will own and operate 51 stations in 14 markets, including New York,
Los Angeles, San Francisco, Washington D.C., Atlanta, Minneapolis-St. Paul,
Nassau-Suffolk (Long Island, New York), Phoenix, Pittsburgh, Denver,
Cincinnati, Sacramento, Orlando and Riverside-San Bernardino (California).
Chancellor Broadcasting Company is listed on the Nasdaq Stock Market and trades
under the symbol: CBCA.
For more information, please contact:
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Chancellor Broadcasting: Jacques Kerrest 972-239-6220
Brainerd Communicators: Chris Plunkett 212-986-6667
