SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ____________ to
____________.
Commission File Number : ________________
KDSM, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
---------------------------
MARYLAND 52-1975792
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2000 WEST 41ST STREET
BALTIMORE, MARYLAND 21211
----------------------------------------
(Address of principal executive offices)
(410) 467-5005
------------------------------------------------------
(Registrant's telephone number, including area code)
NONE
------------------------------------------------------
(Former name, former address and former fiscal year-if
changed since last report)
SINCLAIR CAPITAL
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
---------------------------
DELAWARE 52-2026076
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2000 WEST 41ST STREET
BALTIMORE, MARYLAND 21211
----------------------------------------
(Address of principal executive offices)
(410) 467-5005
------------------------------------------------------
(Registrant's telephone number, including area code)
NONE
------------------------------------------------------
(Former name, former address and former fiscal year-if
changed since last report)
---------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No[ ]
As of August 10, 1998, there were 100 shares of Common Stock, $.01 par value of
KDSM, Inc., issued and outstanding and 2,000,000 shares of $200 million
aggregate liquidation value of 115/8% High Yield Trust Offered Preferred
Securities of Sinclair Capital, a subsidiary trust of KDSM, Inc., issued and
outstanding.
THE REGISTRANTS EACH MEET THE CONDITIONS FOR REDUCED DISCLOSURE SET FORTH IN
GENERAL INSTRUCTION H (1)(A) AND (B) OF FORM 10-Q AND ARE THEREFORE FILING THIS
FORM WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
KDSM, INC. AND SUBSIDIARIES
Form 10-Q
For the Six Months Ended June 30, 1998
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 1997 and June
30, 1998 ...................................................... 4
Consolidated Statements of Operations for the Three Months
and Six Months Ended June 30, 1997 and 1998 ................... 5
Consolidated Statement of Stockholder's Equity for the Six
Months Ended June 30, 1998 ................................... 6
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 1997 and 1998 .................................. 7
Notes to Unaudited Consolidated Financial Statements ........... 8
Analysis of Results of Operations .............................. 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................. 14
Signature......................................................... 15
3
<PAGE>
KDSM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
--------------- -------------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash ....................................................................... $ 11 $ 4
Accounts receivable, net of allowance for doubtful accounts ................ 2,150 1,661
Dividends receivable from parent ........................................... 1,085 1,085
Current portion of program contract costs .................................. 988 571
Prepaid expenses and other current assets .................................. 33 12
Deferred barter costs ...................................................... 100 59
-------- --------
Total current assets ................................................ 4,367 3,392
PROPERTY AND EQUIPMENT, net .................................................... 3,208 3,111
PROGRAM CONTRACT COSTS, less current portion ................................... 925 572
INVESTMENT IN PARENT PREFERRED SECURITIES ...................................... 206,200 206,200
DUE FROM PARENT ................................................................ 2,673 5,587
OTHER ASSETS ................................................................... 7,757 6,851
ACQUIRED INTANGIBLE BROADCASTING ASSETS, net ................................... 33,410 32,893
-------- --------
Total Assets ........................................................ $258,540 $258,606
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable ........................................................... $ 30 $ 103
Accrued liabilities ........................................................ 396 370
Current portion of program contracts payable ............................... 1,612 1,216
Deferred barter revenues ................................................... 209 171
Subsidiary trust minority interest expense payable ......................... 969 969
-------- --------
Total current liabilities ........................................... 3,216 2,829
PROGRAM CONTRACTS PAYABLE ...................................................... 1,241 812
DEFERRED STATE TAXES ........................................................... 334 440
-------- --------
Total liabilities ................................................... 4,791 4,081
-------- --------
COMMITMENTS AND CONTINGENCIES
COMPANY OBLIGATED MANDATORILY REDEEMABLE SECURITIES OF SUBSIDIARY
TRUST HOLDING SOLELY KDSM SENIOR DEBENTURES .............................. 200,000 200,000
-------- --------
STOCKHOLDER'S EQUITY:
Common stock, $.01 par value, 1,000 shares authorized
and 100 shares issued and outstanding .................................. -- --
Additional paid-in capital ................................................. 51,149 51,149
Retained earnings .......................................................... 2,600 3,376
-------- --------
Total stockholder's equity .......................................... 53,749 54,525
-------- --------
Total Liabilities and Stockholder's Equity .......................... $258,540 $258,606
======== ========
</TABLE>
The accompanying notes are an integral part of these
unaudited consolidated statements.
4
<PAGE>
KDSM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ----------------
REVENUES: 1997 1998 1997 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Station broadcast revenues, net of agency commissions .................. $ 1,784 $ 1,938 $ 3,919 $ 4,071
Revenues realized from station barter arrangements ..................... 64 128 142 274
-------- -------- -------- --------
Total revenues .................................................. 1,848 2,066 4,061 4,345
-------- -------- -------- --------
OPERATING EXPENSES:
Program and production ................................................. 292 287 668 580
Selling, general and administrative .................................... 502 607 1,240 1,341
Expenses realized from station barter arrangements ..................... 43 110 86 210
Amortization of program contract costs and net
realizable value adjustments ....................................... 318 303 712 854
Depreciation and amortization of property and equipment ................ 85 94 170 186
Amortization of acquired intangible broadcasting assets
and other assets ................................................... 423 426 677 869
-------- -------- -------- --------
Total operating expenses ........................................ 1,663 1,827 3,553 4,040
-------- -------- -------- --------
Broadcast operating income ...................................... 185 239 508 305
-------- -------- -------- --------
OTHER INCOME (EXPENSE):
Dividend and interest income ........................................... 6,490 6,605 7,845 13,216
Subsidiary trust minority interest expense ............................. (5,797) (5,813) (7,007) (11,625)
-------- -------- -------- --------
Income before allocation of consolidated federal income
taxes and state income taxes ..................................... 878 1,031 1,346 1,896
ALLOCATION OF CONSOLIDATED FEDERAL INCOME TAXES ............................ 267 341 409 638
STATE INCOME TAXES ......................................................... 106 82 162 150
-------- -------- -------- --------
NET INCOME BEFORE EXTRAORDINARY ITEM ....................................... 505 608 775 1,108
EXTRAORDINARY ITEM:
Loss on early extinguishment of debt, net of income tax benefit
of $221 ............................................................ -- (332) -- (332)
-------- -------- -------- --------
NET INCOME ................................................................. $ 505 $ 276 $ 775 $ 776
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these
unaudited consolidated statements.
5
<PAGE>
KDSM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED STOCKHOLDER'S
STOCK CAPITAL EARNINGS EQUITY
---------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1997 ............. $ - $ 51,149 $ 2,600 $ 53,749
Net income.......................... - - 776 776
---------- ------------ ------------- -------------
BALANCE, June 30, 1998.................. $ - $ 51,149 $ 3,376 $ 54,525
========== ============ ============ ============
</TABLE>
The accompanying notes are an integral part of this
unaudited consolidated statement.
6
<PAGE>
KDSM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------
1997 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .................................................... $ 775 $ 776
Adjustments to reconcile net income to net cash flows from
operating activities -
Extraordinary loss on early extinguishment of debt ........ -- 553
Depreciation and amortization of property and equipment ... 170 186
Amortization of acquired intangible broadcasting assets and
other assets ............................................ 677 869
Amortization of program contract costs and net realizable
value adjustments ...................................... 712 854
Stock-based compensation .................................. -- 13
Changes in assets and liabilities, net of effects of
acquisitions and dispositions-
Decrease in accounts receivable, net ...................... 533 489
Increase in dividend receivable from parent .......... (7,845) --
Decrease in prepaid expenses and other current assets ..... 66 21
(Decrease) increase in accounts payable and
accrued liabilities .................................... (322) 35
Increase in state deferred taxes ..................... 162 106
Net effect of change in deferred barter revenues
and deferred barter costs .............................. 9 2
Increase in subsidiary trust minority interest expense .... 7,007 --
payable
Net change in due from parent for operating activities .... (301) (1,523)
Payments on program contracts payable ......................... (826) (908)
--------- ---------
Net cash flows from operating activities ...................... 817 1,473
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in Parent Preferred Securities .................. (206,200) --
Payment for exercise of purchase option ....................... (1,576) --
Acquisition of property and equipment ......................... (164) (89)
--------- ---------
Net cash flows used in investing activities ................... (207,940) (89)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in due from parent for securities .................. -- (1,391)
Contributions of capital ...................................... 13,776 --
Net proceeds from subsidiary trust securities offering ........ 193,350 --
--------- ---------
Net cash flows from/(used in) financing activities ........ 207,126 (1,391)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS ................................................... 3 (7)
CASH AND CASH EQUIVALENTS, beginning of period .................... 3 11
--------- ---------
CASH AND CASH EQUIVALENTS, end of period .......................... $ 6 $ 4
========= =========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Parent preferred stock dividends .............................. $ -- $ 13,016
========= =========
Subsidiary trust minority interest payments ................... $ -- $ 11,625
========= =========
</TABLE>
The accompanying notes are an integral part of these
unaudited consolidated statements.
7
<PAGE>
KDSM, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of KDSM,
Inc., Sinclair Capital (a subsidiary trust), and KDSM Licensee Inc., which are
collectively referred to hereafter as "the Company or KDSM." KDSM, Inc. is a
television broadcaster serving the Des Moines, Iowa area through station KDSM on
Channel 17, a Fox affiliate. KDSM, Inc. is a wholly owned subsidiary of Sinclair
Broadcast Group, Inc. (the "Parent" or "Sinclair"). In addition, KDSM, Inc. owns
all of the issued and outstanding common stock of KDSM Licensee, Inc. and all of
the common trust interests of Sinclair Capital. All intercompany amounts are
eliminated in consolidation.
INTERIM FINANCIAL STATEMENTS
The consolidated financial statements for the six months ended June 30, 1998 are
unaudited, but in the opinion of management, such financial statements have been
presented on the same basis as the audited consolidated financial statements as
of December 31,1997 and for the year then ended and include all adjustments,
consisting only of normal recurring adjustments necessary for a fair
presentation of the financial position and results of operations, and cash flows
for these periods.
As permitted under the applicable rules and regulations of the Securities and
Exchange Commission, these financial statements do not include all disclosures
normally included with audited consolidated financial statements, and,
accordingly, should be read in conjunction with the December 31, 1997
consolidated balance sheet and related statements of operations and cash flows
for the year ended December 31, 1997 and the related notes thereto. The results
of operations presented in the accompanying financial statements are not
necessarily representative of operations for an entire year.
PROGRAMMING
The Company has agreements with distributors for the rights to television
programming over contract periods which generally run from one to seven years.
Contract payments are made in installments over terms that are generally shorter
than the contract period. Each contract is recorded as an asset and a liability
at an amount equal to its gross contractual commitment when the license period
begins and the program is available for its first showing. The portion of the
program contracts payable within one year is reflected as a current liability in
the accompanying consolidated balance sheets.
The rights to program materials are reflected in the accompanying consolidated
balance sheets at the lower of unamortized cost or estimated net realizable
value. Estimated net realizable values are based upon management's expectation
of future advertising revenues net of sales commissions to be generated by the
program material. Amortization of program contract costs is generally computed
under either a four year accelerated method or based on usage, whichever yields
the greater amortization for each program. Program contract costs estimated by
management to be amortized in the succeeding year are classified as current
assets. Payments of program contract liabilities are typically paid on a
scheduled basis and are not affected by adjustments for amortization or
estimated net realizable value.
2. CONTINGENCIES AND OTHER COMMITMENTS:
Lawsuits and claims are filed against the Company from time to time in the
ordinary course of business. These actions are in various preliminary stages,
and no judgments or decisions have been rendered by hearing boards or courts.
Management, after reviewing developments to date with legal counsel, is of the
opinion that the outcome of such matters will not have a material adverse effect
on the Company's financial position or results of operations.
8
<PAGE>
3. COMPANY OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES OF TRUST:
In March 1997, the Company completed an offering of $200 million aggregate
liquidation value of 115/8% High Yield Trust Offered Preferred Securities (the
"HYTOPS") of Sinclair Capital, a subsidiary trust of the Company. The HYTOPS
were issued March 12, 1997, mature March 15, 2009, are mandatorily redeemable at
maturity, and provide for quarterly distributions to be paid in arrears
beginning June 15, 1997. The Company utilized the proceeds of the offering
combined with other capital contributions to acquire $206.2 million of 125/8%
Series C Preferred Stock (the "Parent Preferred Securities") of Sinclair.
4. PARENT PREFERRED SECURITIES:
In March 1997, the Company utilized the proceeds of the HYTOPS combined with
other capital contributions to acquire $206.2 million of 125/8% Parent Preferred
Securities, issued by Sinclair. The Parent Preferred Securities were issued
March 12, 1997, mature March 15, 2009, are mandatorily redeemable at maturity,
and provide for quarterly distributions to be paid in arrears beginning June 15,
1997.
9
<PAGE>
ANALYSIS OF RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
unaudited financial statements of KDSM, Inc. and related notes included
elsewhere in this Quarterly report and the audited financial statements and
Management's Discussion and Analysis contained in the Company's Form 10-K/A, for
the fiscal year ended December 31, 1997.
The matters discussed below include forward-looking statements. Such statements
are subject to a number of risks and uncertainties, such as the impact of
changes in national and regional economies, pricing fluctuations in local and
national advertising, availability of capital and volatility in programming
costs. Additional risk factors regarding the Company are set forth in the
Company's registration statement on Form S-4 filed with the Securities and
Exchange Commission on May 2, 1997.
The following table sets forth certain operating data for six months ended June
30, 1997 and 1998:
OPERATING DATA (dollars in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ----------------
1997 1998 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net broadcast revenues (a)................................... $ 1,784 $ 1,938 $ 3,919 $ 4,071
Barter revenues ............................................. 64 128 142 274
--------- --------- --------- ---------
Total revenues .............................................. 1,848 2,066 4,061 4,345
--------- --------- --------- ---------
Operating Costs (b) ......................................... 794 894 1,908 1,921
Expenses from barter arrangements ........................... 43 110 86 210
Depreciation and amortization ............................... 826 823 1,559 1,909
--------- --------- --------- ---------
Broadcast operating income .................................. 185 239 508 305
Dividend and interest income (d) ............................ 6,490 6,605 7,845 13,216
Subsidiary trust minority interest expense (e) .............. (5,797) (5,813) (7,007) (11,625)
--------- --------- --------- ---------
Net income before income taxes .............................. 878 1,031 1,346 1,896
Income taxes ................................................ 373 423 571 788
--------- --------- --------- ---------
Net income before extraordinary item ........................ 505 608 775 1,108
Extraordinary item .......................................... -- (332) -- (332)
--------- --------- --------- ---------
Net income................................................... $ 505 $ 276 $ 775 $ 776
========= ========= ========= =========
OTHER DATA:
Broadcast cash flow (BCF) (f)............................ $ 762 $ 717 $ 1,393 $ 1,426
BCF margin (g) .......................................... 42.7% 37.0% 35.5% 35.0%
Adjusted EBITDA (h)...................................... $ 699 $ 670 $ 1,241 $ 1,306
Adjusted EBITDA margin (g) .............................. 39.2% 34.6% 31.7% 32.1%
Program contract payments................................ $ 312 $ 392 $ 826 $ 908
Corporate management fees ............................... 63 47 152 120
Capital expenditures .................................... 134 23 164 89
Cash flows from operating activities .................... 236 (147) 817 1,473
Cash flows from investing activities .................... (1,710) (23) (207,940) (89)
Cash flows from financing activities .................... 1,479 7 207,126 (1,391)
</TABLE>
a) "Net broadcast revenue" is defined as broadcast revenue net of agency
commissions.
b) "Operating costs" include program and production expenses and selling,
general and administrative expenses.
c) Depreciation and amortization includes amortization of program contract
costs and net realizable value adjustments, depreciation and amortization
of property and equipment, and amortization of acquired intangible
broadcasting assets and other assets including amortization of deferred
financing costs and costs related to excess syndicated programming.
10
<PAGE>
d) Dividend and interest income primarily results from dividends on the Parent
Preferred Securities.
e) Subsidiary trust minority interest expense represents distributions on the
HYTOPS.
f) "Broadcast cash flow" is defined as broadcast operating income plus
corporate management fees, depreciation and amortization (including film
amortization), less cash payments for program rights. Cash program payments
represent cash payments made for current programs payable and do not
necessarily correspond to program usage. The Company has presented
broadcast cash flow data, which the Company believes are comparable to the
data provided by other companies in the industry, because such data are
commonly used as a measure of performance for broadcast companies. However,
broadcast cash flow does not purport 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 and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance with
generally accepted accounting principles. Management believes the
presentation of broadcast cash flow (BCF) is relevant and useful because 1)
BCF is a measurement utilized by lenders to measure the Company's ability
to service its debt, 2) BCF is a measurement utilized by industry analysts
to determine a private market value of the Company's television and radio
stations and 3) BCF is a measurement industry analysts utilize when
determining the operating performance of the Company. The Company's
measurement of BCF may not be comparable to similarly titled measures
reported by other companies within the broadcast industry.
g) "Broadcast cash flow margin" is defined as broadcast cash flow divided by
net broadcast revenues. "Adjusted EBITDA margin" is defined as Adjusted
EBITDA divided by net broadcast revenues.
h) "Adjusted EBITDA" is defined as broadcast cash flow less corporate expenses
and is a commonly used measure of performance for broadcast companies.
Adjusted EBITDA does not purport 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 and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
generally accepted accounting principles. Management believes the
presentation of Adjusted EBITDA is relevant and useful because 1) Adjusted
EBITDA is a measurement utilized by lenders to measure the Company's
ability to service its debt, 2) Adjusted EBITDA is a measurement utilized
by industry analysts to determine a private market value of the Company's
television and radio stations and 3) Adjusted EBITDA is a measurement
industry analysts utilize when determining the operating performance of the
Company. The Company's measurement of Adjusted EBITDA may not be comparable
to similarly titled measures reported by other companies within the
broadcast industry.
Net broadcast revenues increased to $4.1 million for the six months ended June
30, 1998 from $3.9 million for the six months ended June 30, 1997, or 5.1%. The
increase in net broadcast revenues for the six months ended June 30, 1998 was
primarily due to an increase in local revenues of approximately $234,000, or
8.2% offset by a decrease in national revenues of approximately $123,000, or
8.4%.
Operating costs for the six months ended June 30, 1998 remained consistent
compared to the six months ended June 30, 1997.
Broadcast operating income for the six months ended June 30, 1998 decreased to
$305,000 from $508,000 for the six months ended June 30, 1997, or 40.0%. The
decrease in broadcast operating income for the six months ended June 30, 1998
was primarily attributable to an increase in amortization of intangible assets
related to the HYTOPS issuance completed March 12, 1997 and an increase in the
amortization of program contract costs. The Company added syndicated programs,
which included Seinfeld and Frasier, during the third and fourth quarters of
1997.
Subsidiary trust minority interest expense increased to $11.6 million for the
six months ended June 30, 1998 from $7.0 million for the six months ended June
30, 1997. The increase in subsidiary trust minority interest expense for the six
months ended June 30, 1998 as compared to the six months ended June 30, 1997 was
attributable to the HYTOPS being outstanding for a partial period during 1997.
Dividend and interest income increased to $13.2 million for the six months ended
June 30, 1998 from $7.8 million for the six months ended June 30, 1997. The
increase in dividend and interest income for the six months ended June 30, 1998
as compared to the six months ended June 30, 1997 was primarily attributable to
the Parent Preferred Securities being outstanding for a partial period during
1997.
The income tax provision increased to $423,000 for the three months ended June
30, 1998 from $373,000 for the three months ended June 30, 1997. The increase in
the income tax provision for the three months ended June 30, 1998 as compared to
the three months ended June 30, 1997 is attributable to an increase in pre-tax
income. The Company's effective tax rate for the six months ended June 30, 1998
and June 30, 1997 was 41.6% and 42.4%, respectively.
11
<PAGE>
Deferred state taxes increased to $440,000 as of June 30, 1998 from $334,000 as
of December 31, 1997. The increase in the Company's deferred tax liability as of
June 30, 1998 as compared to December 31, 1997 is primarily due to pre-tax
income for the six months ended June 30, 1998. Federal income taxes are
allocated to the Company by Sinclair at the statutory rate, are considered
payable currently and are reflected as an adjustment to Due to Parent in the
Company's accompanying balance sheet.
Net income increased to $776,000 for the six months ended June 30, 1998 from
$775,000 for the six months ended June 30, 1997.
Broadcast cash flow for the six months ended June 30, 1998 remained consistent
compared to the six months ended June 30, 1997
Adjusted EBIITDA for the six months ended June 30, 1998 increased to $1.3
million from $1.2 million for the six months ended June 30, 1997, or 8.3%. The
increase in adjusted EBITDA for the six months ended June 30, 1998 as compared
to the six months ended June 30, 1997 resulted primarily from lower corporate
management fees in the current period.
The Company's broadcast cash flow margin decreased to 35.0% for the six months
ended June 30, 1998 from 35.5% for the six months ended June 30, 1997. The
decrease in broadcast cash flow margin for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997 resulted primarily from increases
in program contract payments resulting from the addition of syndicated program
contracts during the third and fourth quarters of 1997.
The Company's adjusted EBITDA margin increased to 32.1% for the six months ended
June 30, 1998 from 31.7% for the six months ended June 30, 1997. The increase in
adjusted EBITDA margin for the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997 resulted primarily from a decrease in the
corporate management fees in the current period.
12
<PAGE>
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
27 Financial Data Schedule
(B) REPORTS ON FORM 8-K
NONE.
13
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 10-Q to be signed on its behalf
by the undersigned thereunto duly authorized in the city of Baltimore, Maryland
on the 14th day of August.
KDSM, INC.
by: /s/ David B. Amy
----------------------------
David B. Amy
Chief Financial Officer
Principal Accounting Officer
14
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> US DOLLAR
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 4
<SECURITIES> 0
<RECEIVABLES> 1,691
<ALLOWANCES> 30
<INVENTORY> 0
<CURRENT-ASSETS> 3,392
<PP&E> 3,842
<DEPRECIATION> 731
<TOTAL-ASSETS> 258,606
<CURRENT-LIABILITIES> 2,829
<BONDS> 0
200,000
0
<COMMON> 0
<OTHER-SE> 54,525
<TOTAL-LIABILITY-AND-EQUITY> 258,606
<SALES> 0
<TOTAL-REVENUES> 4,345
<CGS> 0
<TOTAL-COSTS> 4,040
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,896
<INCOME-TAX> 788
<INCOME-CONTINUING> 1,108
<DISCONTINUED> 0
<EXTRAORDINARY> 332
<CHANGES> 0
<NET-INCOME> 776
<EPS-PRIMARY> 7,760<a>
<EPS-DILUTED> 7,760<a>
<FN>
a) This information has been prepared in accordance with SFAS No.128, Earnings
Per Share. The basic and diluted EPS calculations have been entered in
place of primary and diluted, respectively.
</FN>
</TABLE>
