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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED JUNE 30, 1999
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 001-13715
BIG CITY RADIO, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 13-3790661
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
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11 SKYLINE DRIVE, HAWTHORNE, NEW YORK 10532
(Address and zip code of principal executive offices)
(914) 592-1071
(Registrant's telephone number, including area code)
------------------------
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 / /
The number of shares of the registrant's Class A Common Stock and Class B
Common Stock outstanding as of July 28, 1999 was 5,818,817 and 8,250,458,
respectively.
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BIG CITY RADIO, INC.
PART I--FINANCIAL INFORMATION
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PAGE
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Item 1. Financial Statements
Consolidated Balance Sheets........................................................................ 2
Consolidated Statements of Operations.............................................................. 3
Consolidated Statements of Cash Flows.............................................................. 4
Consolidated Statement of Stockholders' Equity..................................................... 5
Notes to Consolidated Financial Statements......................................................... 6-9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............. 10-16
PART II--OTHER INFORMATION
Item 1. Legal Proceedings................................................................................. 17
Item 2. Changes in Securities and Use of Proceeds......................................................... 17
Item 3. Defaults Upon Senior Securities................................................................... 17
Item 4. Submission of Matters to a Vote of Security Holders............................................... 17
Item 5. Other Information................................................................................. 17
Item 6. Exhibits and Reports on Form 8-K.................................................................. 17
Signatures................................................................................................ 18
</TABLE>
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PART 1--FINANCIAL INFORMATION
ITEM. 1 FINANCIAL STATEMENTS
BIG CITY RADIO, INC.
CONSOLIDATED BALANCE SHEETS
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JUNE 30, DECEMBER 31,
1999 1998
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(UNAUDITED) (AUDITED)
ASSETS
Current assets:
Cash and cash equivalents...................................................... $ 6,627,000 $ 5,285,000
Cash held in escrow............................................................ 1,775,000 450,000
Cash held in investment, restricted............................................ 2,469,000 3,350,000
Marketable securities.......................................................... 37,040,000 48,416,000
Accounts receivable, net of allowance of $214,000 and $119,000 in 1999 and
1998, respectively........................................................... 3,403,000 3,362,000
Interest receivable............................................................ 828,000 1,574,000
Prepaid expenses and other current assets...................................... 1,382,000 603,000
-------------- --------------
Total current assets......................................................... 53,524,000 63,040,000
Property and equipment, net...................................................... 5,628,000 4,512,000
Intangibles, net................................................................. 82,746,000 80,309,000
Deferred financing fees.......................................................... 3,726,000 4,052,000
Other assets..................................................................... 860,000 169,000
-------------- --------------
Total assets................................................................. $ 146,484,000 $ 152,082,000
-------------- --------------
-------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................................... $ 683,000 $ 518,000
Accrued expenses............................................................... 1,153,000 1,186,000
Promissory notes............................................................... 1,175,000 1,175,000
Other current liabilities...................................................... 107,000 112,000
-------------- --------------
Total current liabilities.................................................... 3,118,000 2,991,000
-------------- --------------
Senior discount notes............................................................ 144,407,000 136,776,000
Other long term liabilities...................................................... 525,000 570,000
Promissory notes................................................................. 294,000 881,000
Deferred income tax liabilities.................................................. 2,473,000 2,473,000
Stockholders' Equity:
Preferred stock, $.01 par value. Authorized 20,000,000 shares; zero shares
issued and outstanding....................................................... -- --
Common stock, Class A, $.01 par value. Authorized 80,000,000 shares; issued and
outstanding 5,818,817 shares................................................. 58,000 58,000
Common stock, Class B, $.01 par value. Authorized 20,000,000 shares; issued and
outstanding 8,250,458 shares................................................. 83,000 83,000
Additional paid-in capital..................................................... 27,862,000 27,831,000
Accumulated deficit............................................................ (32,336,000) (19,581,000)
-------------- --------------
Net stockholders' (deficit) equity............................................. (4,333,000) 8,391,000
-------------- --------------
Total liabilities and stockholders' equity................................... $ 146,484,000 $ 152,082,000
-------------- --------------
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</TABLE>
See accompanying notes to consolidated financial statements.
2
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BIG CITY RADIO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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THREE MONTHS ENDED SIX MONTHS ENDED,
JUNE 30, JUNE 30,
---------------------------- -----------------------------
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1999 1998 1999 1998
------------- ------------- -------------- -------------
Gross revenues...................................... $ 4,667,000 $ 3,942,000 $ 8,421,000 $ 6,600,000
Less: commissions and fees........................ 575,000 433,000 968,000 692,000
------------- ------------- -------------- -------------
Net revenues.................................... 4,092,000 3,509,000 7,453,000 5,908,000
Operating expenses:
Station operating expenses, excluding depreciation
and amortization................................ 5,355,000 4,788,000 10,607,000 8,290,000
Corporate, general and administrative expenses.... 805,000 610,000 1,638,000 1,180,000
Employment stock incentives....................... -- 808,000 -- 808,000
Depreciation and amortization..................... 866,000 622,000 1,701,000 1,198,000
------------- ------------- -------------- -------------
Total operating expenses........................ 7,026,000 6,828,000 13,946,000 11,476,000
------------- ------------- -------------- -------------
Operating loss................................ (2,934,000) (3,319,000) (6,493,000) (5,568,000)
Other income (expenses):
Gain on sale of station........................... -- -- 663,000 --
Interest income................................... 624,000 1,074,000 1,396,000 1,240,000
Interest expense.................................. (4,122,000) (3,719,000) (8,042,000) (4,880,000)
Other, net........................................ (108,000) (106,000) (279,000) (143,000)
------------- ------------- -------------- -------------
Total other income (expenses)................... (3,606,000) (2,751,000) (6,262,000) (3,783,000)
Loss before income taxes and extraordinary loss..... (6,540,000) (6,070,000) (12,755,000) (9,351,000)
Income tax benefit, net............................. -- 611,000 -- 1,101,000
------------- ------------- -------------- -------------
Loss before extraordinary loss...................... (6,540,000) (5,459,000) (12,755,000) (8,250,000)
Extraordinary loss on extinguishment of debt, net of
income taxes...................................... -- -- -- 495,000
------------- ------------- -------------- -------------
Net Loss.......................................... $ (6,540,000) $ (5,459,000) $ (12,755,000) $ (8,745,000)
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Basic and diluted loss per share:
Loss before extraordinary item...................... $ (0.46) $ (0.39) $ (0.91) $ (0.59)
Extraordinary item.................................. -- -- -- (0.04)
------------- ------------- -------------- -------------
Net loss.......................................... $ (0.46) $ (0.39) $ (0.91) $ (0.63)
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Weighted average shares outstanding................. 14,069,275 13,988,913 14,069,275 13,982,253
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</TABLE>
See accompanying notes to consolidated financial statements.
3
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BIG CITY RADIO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
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1999 1998
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Cash flows from operating activities:
Net loss........................................................................ $ (12,755,000) $ (8,745,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization................................................. 1,701,000 1,198,000
Non cash interest............................................................. 7,988,000 4,277,000
Deferred income taxes......................................................... -- (1,213,000)
Gain on sale of station....................................................... (663,000) --
Employment stock incentives................................................... -- 808,000
Extraordinary loss on extinguishment of debt.................................. -- 582,000
Change in operating assets and liabilities
(Increase) decrease in assets:
Accounts receivable....................................................... (41,000) (310,000)
Interest receivable....................................................... 746,000 (861,000)
Prepaid expenses and other current assets................................. (529,000) (237,000)
Other assets.............................................................. (691,000) (227,000)
Increase (decrease) in liabilities:
Accounts payable.......................................................... 165,000 (548,000)
Accrued expenses.......................................................... (33,000) 552,000
Other liabilities......................................................... (50,000) (221,000)
-------------- --------------
Net cash used in operating activities................................... (4,162,000) (4,945,000)
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Cash flows from investing activities:
Purchase of property and equipment.............................................. (1,540,000) (865,000)
Purchase of marketable securities............................................... (34,508,000) (97,599,000)
Sales of marketable securities.................................................. 45,884,000 15,718,000
Cash paid and advanced for assets of radio stations acquired.................... (5,821,000) (2,000,000)
Cash held in restricted investment.............................................. 881,000 --
Cash received for radio station sold............................................ 1,195,000 --
-------------- --------------
Net cash provided by (used in) investing activities....................... 6,091,000 (84,746,000)
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Cash flows from financing activities:
Proceeds from offering of senior discount notes net of discount and fees of
$4,568,000.................................................................... -- 120,808,000
Drawdown on credit facility..................................................... -- 2,500,000
Repayment of promissory notes................................................... (587,000) --
Repayment of existing credit facility........................................... -- (32,600,000)
-------------- --------------
Net cash provided by (used in) financing activities....................... (587,000) 90,708,000
-------------- --------------
Change in cash and cash equivalents..................................... 1,342,000 1,017,000
Cash and cash equivalents at beginning of period.................................. 5,285,000 80,000
-------------- --------------
Cash and cash equivalents at end of period........................................ $ 6,627,000 $ 1,097,000
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</TABLE>
See accompanying notes to consolidated financial statements.
4
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BIG CITY RADIO, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
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COMMON STOCK ADDITIONAL
------------------------ PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
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Balance at December 31, 1998
(Audited)............................ 14,069,275 $ 141,000 $ 27,831,000 $ (19,581,000) $ 8,391,000
Capital contribution related to
employment incentive................. -- -- 31,000 -- 31,000
Net loss............................... -- -- -- (12,755,000) (12,755,000)
------------ ---------- ------------- -------------- --------------
Balance at June 30, 1999 (Unaudited)... 14,069,275 $ 141,000 $ 27,862,000 $ (32,336,000) $ (4,333,000)
------------ ---------- ------------- -------------- --------------
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</TABLE>
See accompanying notes to consolidated financial statements.
5
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BIG CITY RADIO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. THE COMPANY AND BASIS OF PRESENTATION
The Company owns and operates radio stations in the four of the largest
radio markets in the United States. The Company's recently-acquired radio
broadcast properties are located in or adjacent to major metropolitan markets
and utilize innovative engineering techniques and low-cost, ratings-driven
operating strategies to develop these properties into successful metropolitan
radio stations.
The accompanying consolidated financial statements include the accounts of
Big City Radio, Inc. and all its subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The accompanying interim consolidated financial statements have been
prepared without audit pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures made are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the consolidated financial
statements and related footnotes included in the Company's Form 10-K for the
year ended December 31, 1998 (the "1998 Form 10-K"). In the opinion of
management all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly in all material respects the financial position of
the Company as of June 30, 1999, and the results of its operations and its cash
flows for the three and six-month periods ended June 30, 1999 and 1998, have
been included. The results of operations for the interim period are not
necessarily indicative of the results which may be realized for the full year.
2. EARNINGS PER SHARE
Basic EPS includes no dilution and is computed by dividing income available
to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted EPS reflects the potential dilution from
securities that could share in the earnings of the Company. In calculating
diluted EPS, no potential shares of Common Stock are to be included in the
computation when a loss from continuing operations available to common
stockholders exists. Stock options issued under the Company's 1997 and 1998
Incentive Stock Plans amounting to 1,022,500 and 575,000 at June 30, 1999 and
1998, respectively, were not included in the computation of diluted EPS because
to do so would have been antidilutive.
3. SENIOR DISCOUNT NOTES
OFFERING OF SENIOR DISCOUNT NOTES
The Company completed a private placement of $174.0 million aggregate
principal amount, at maturity, 11 1/4% Senior Discount Notes due 2005 (the
"Notes") on March 17, 1998 (the "Notes Offering"), generating approximately
$125.4 million of gross proceeds for the Company of which the Company used
approximately $32.8 million to repay outstanding indebtedness under its credit
agreement dated as of May 30, 1996 with the Chase Manhattan Bank (as amended,
the "Old Credit Facility"). The Company has used for past acquisitions and has
committed for future acquisitions of radio station properties approximately
$66.4 million and intends to use the remaining proceeds of the Notes Offering
for general
6
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BIG CITY RADIO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. SENIOR DISCOUNT NOTES (CONTINUED)
corporate and working capital purposes. (See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources").
SUBSIDIARY GUARANTORS
Pursuant to the terms of the indenture relating to the Notes (the
"Indenture"), the direct subsidiaries of Big City Radio, Inc.--consisting of
Odyssey Traveling Billboards, Inc., Big City Radio-NYC, L.L.C., Big City
Radio-LA, L.L.C., and Big City Radio-CHI, L.L.C., (collectively, the "Subsidiary
Guarantors")-- have, jointly and severally, fully and unconditionally guaranteed
the obligations of Big City Radio, Inc. with respect to the Notes.
All of the Subsidiary Guarantors except Odyssey Traveling Billboards, Inc.
(the "Station Subsidiaries"), were created in December 1997 as special purpose
Delaware limited liability companies formed at the request of the lenders under
the Credit Facility for the sole purpose of holding the Company's Federal
Communications Commission ("FCC") radio licenses. The operating agreements for
the Station Subsidiaries limit the activities of these companies to owning the
FCC radio licenses. Odyssey Traveling Billboards, Inc. owns and operates certain
vehicles used to advertise for the Company's radio stations. Because the Station
Subsidiaries have entered into assignment and use agreements with the Company
whereby the Company manages and directs the day-to-day operations of the radio
stations, pays all expenses and capital costs incurred in operating the radio
stations, and retains all advertising and other receipts collected in operating
the radio stations, the Station Subsidiaries have no income or expenses other
than the amortization of the FCC licenses. Odyssey Travelling Billboards, Inc.
is similarly a special purpose corporation with no income and only expenses.
The covenants in the Notes, the Indenture and the Revolving Credit Facility
do not restrict the ability of the Station Subsidiaries to make cash
distributions to the Company.
Accordingly, set forth below is certain summarized financial information
(within the meaning of Section 1-02(bb) of Regulation S-X) for the Subsidiary
Guarantors, as of June 30, 1999 and December 31, 1998 and for the three and six
months ended June 30, 1999 and 1998 on an as if pooling basis given the common
control relationship of the Company and the Subsidiary Guarantors.
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JUNE 30, 1999 DECEMBER 31, 1998
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Current assets................................................................. -- --
Noncurrent assets.............................................................. $ 82,744,000 $ 80,295,000
Current liabilities............................................................ -- --
Noncurrent liabilities......................................................... -- --
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7
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BIG CITY RADIO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. SENIOR DISCOUNT NOTES (CONTINUED)
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THREE MONTHS ENDED, SIX MONTHS ENDED,
JUNE 30, JUNE 30,
------------------------ --------------------------
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1999 1998 1999 1998
----------- ----------- ------------- -----------
Net sales.................................................. -- -- -- --
Costs and expenses......................................... -- -- -- --
Depreciation and amortization.............................. $ 556,000 $ 360,000 $ 1,099,000 $ 720,000
Net loss................................................... $ (556,000) $ (360,000) $ (1,099,000) $ (720,000)
</TABLE>
The summarized financial information for the Subsidiary Guarantors has been
prepared from the books and records maintained by the Subsidiary Guarantors and
the Company. The summarized financial information may not necessarily be
indicative of the results of operations or financial position had the Subsidiary
Guarantors operated as independent entities.
4. RECENT DEVELOPMENTS
ACQUISITIONS
On February 25, 1999, the Company completed the acquisition of WDEK-FM and
WLBK-AM, DeKalb, Illinois. The operations of these stations have been included
in the consolidated statements of operations from these dates. The aggregate
purchase price for these stations was $4,500,000 excluding acquisition related
expenses. Management's preliminary estimate of the fair value of the assets
acquired in these transactions, subject to further review and appraisal, is as
follows:
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WDEK-FM WLBK-AM
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Building............................................................. $ -- $ 150,000
Fixed assets......................................................... 165,000 141,000
FCC broadcast license................................................ 3,735,000 309,000
</TABLE>
The fair value of the fixed assets and building acquired is determined by
reference to replacement value on an individual asset and comparable property
basis, respectively. The remaining purchase price is assigned to the FCC
license.
It is the Company's intention to sell the operating assets of WLBK-AM within
one year of its purchase. Any gain or loss at completion of the sale will be
treated as an adjustment to the FCC broadcast license from the original purchase
price allocation.
On March 26, 1999, the Company sold the assets of radio station WRKL-AM, New
City, New York to Polnet Communications, Ltd. for a sale price of $1.625
million. A gain of $663,000 on the sale of the station was recognized during the
period.
5. SUBSEQUENT EVENTS
The Company has made commitments to acquire four FM radio stations in the
Phoenix market. On March 18, 1999, the Company deposited $1,500,000 into an
escrow account with its commitments to acquire two of these stations. Subsequent
to March 31, 1999, the Company deposited an additional $690,000 into escrow and
good faith deposit accounts in connection with these commitments. The purchase
price of these four separate acquisitions will total $37.0 million. With these
acquisitions, the Company will form two separate radio station groups in
Phoenix.
8
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BIG CITY RADIO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. SUBSEQUENT EVENTS (CONTINUED)
On July 30, 1999 the Company completed the acquisition of two of the four
Phoenix stations, KEDJ-FM, Sun City, Arizona and KDDJ-FM, Globe Arizona. The
total purchase price of these properties was $22.0 million and was paid in cash.
It is the Company's intention to exchange the operating assets of KDDJ-FM, plus
an additional cash amount for the FCC license and operating assets of one of the
other Phoenix area stations referred to above.
9
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements set forth below under this caption constitute
"Forward-Looking Statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). See "Special Note
Regarding Forward-Looking Statements".
GENERAL
The Company owns and operates radio stations in the four of the largest
radio markets in the United States. The Company's recently-acquired radio
broadcast properties are located in or adjacent to major metropolitan markets
and utilize innovative engineering techniques and low-cost, ratings-driven
operating strategies to develop these properties into successful metropolitan
radio stations.
In the Los Angeles area, the Company owns and operates three FM radio
stations, KLYY-FM, KSYY-FM, and KVYY-FM, all trimulcasting on 107.1 FM to form
"Southern California's Modern Rock Y-107". These stations were acquired in 1996.
In the New York area, the Company owns and operates four FM radio stations,
WYNY-FM, WWXY-FM, WWZY-FM, and WWYY-FM, all programmed as "New Country Y-107".
New Country Y-107 began broadcasting on December 4, 1996. WWXY-FM and WWZY-FM
were operated under Local Marketing Agreements ("LMAs") throughout the periods
from December 1996 to April 1, 1997 and June 5, 1997, their effective
acquisition dates, respectively, and WWYY-FM was operated under LMA throughout
the period from April 27, 1998 to August 13, 1998, its effective acquisition
date. WYNY-FM was acquired on January 1, 1995.
In the Chicago area, the Company owns six radio stations, WXXY-FM and
WYXX-FM, both simulcasting on 103.1 FM as "FM 103.1 Chicago Heart and Soul" and
WKIE-FM, WKIF-FM, and WDEK-FM, trimulcasting as 92 KISS FM, and WLBK-AM. The FM
103.1 stations were acquired on August 8, 1997. The Company operated WXXY-FM as
a stand-alone, brokered-programming FM station and leased WYXX-FM to the
previous owner under a LMA agreement until the Company commenced operation of
"FM 103.1 Chicago Heart and Soul" in early February 1998. WKIE-FM and WKIF-FM
were acquired on August 4 and 7, 1998, respectively. These stations commenced
operations as 92 KISS FM, a contemporary hit radio format in November 1998. On
February 25, 1999 the Company acquired WDEK-FM and WLBK-AM. The Company added
WDEK-FM to WKIE-FM and WKIF-FM to complete the 92 KISS FM trimulcast. It is the
Company's intention to sell the operating assets of WLBK-AM.
In the Phoenix area, the Company owns two radio stations, KEDJ-FM on 106.3
FM and KDDJ-FM on 100.3 FM, simulcasting the modern rock format known as "The
Edge" with the Howard Stern morning show. These stations were acquired on July
30, 1999. (See Note 5, "Subsequent Events".)
RESULTS OF OPERATIONS
BACKGROUND
The Company's financial results are dependent on a number of factors,
including the general strength of the local and national economies, local market
competition, the relative efficiency and effectiveness of radio broadcasting
compared to other advertising media, government regulation and policies and the
Company's ability to provide popular programming.
The Company's primary source of revenue is the sale of advertising. Each
station's total revenue is determined by the number of advertisements aired by
the station and the advertising rates that the station is able to charge.
10
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Given the fact that the Company's strategy involves developing brand new
metropolitan area radio stations, the initial revenue base is zero and subject
to factors other than ratings and radio broadcasting seasonality. After the
start-up period, as is typical in the radio broadcasting industry, the Company's
first calendar quarter generally will produce the lowest revenues for the year,
and the fourth quarter generally will produce the highest revenues for the year.
The Company's operating results in any period may be affected by the incurrence
of advertising and promotion expenses that do not produce commensurate revenues
in the period in which the expenses are incurred.
THREE MONTHS ENDED JUNE 30, 1999 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1998
NET REVENUES for the three months ended June 30, 1999 were $4,092,000 as
compared with $3,509,000 for the three months ended June 30, 1998, an increase
of $583,000 or 16.6%. This increase was due primarily to increases in the net
revenues of Y-107 NY, FM 103.1 Chicago and the commencement of operations of 92
KISS FM in November 1998. These increases in revenues were partially offset by
the absence of net revenues for WRKL-AM for the three months ended June 30, 1999
when compared with net revenues of $464,000 during the same period in 1998. The
existing radio stations' net revenue growth as compared to the corresponding
period in the prior year was $638,000 or 21.0%.
STATION OPERATING EXPENSES EXCLUDING DEPRECIATION AND AMORTIZATION for the
three months ended June 30, 1999 were $5,355,000 as compared with $4,788,000 for
the three months ended June 30, 1998, an increase of $567,000 or 11.8%. This
increase was due principally to the start-up operations of 92 KISS FM in
November 1998 and the increased station operating expenses of 103.1 Chicago
Heart and Soul throughout the three months ended June 30, 1999, offset by a
decrease in station operating expenses at WRKL-AM of $487,000 for the
corresponding three month period in 1998 due to its sale in March 1999.
CORPORATE, GENERAL AND ADMINISTRATIVE EXPENSES for the three months ended
June 30, 1999 were $805,000 as compared with $610,000 for the three months ended
June 30, 1998, an increase of $195,000, or 32.0%. This increase was due
primarily to increased printing costs, franchise taxes, legal and professional
fees and administrative expenses to support the growth of the Company.
DEPRECIATION AND AMORTIZATION EXPENSES for the three months ended June 30,
1999 were $866,000 as compared with $622,000 for the three months ended June 30,
1998, an increase of $244,000, or 39.2%. This increase was due primarily to the
amortization of intangibles and depreciation of capital assets of the New York
and Chicago stations which were acquired in August 1998 and February 1999.
INTEREST EXPENSE for the three months ended June 30, 1999 was $4,122,000 as
compared with $3,719,000 for the three months ended June 30, 1998, an increase
of $403,000, or 10.8%. In the three months ended June 30, 1999 and 1998, the
average outstanding total debt for the Company was $144,626,000 and
$128,261,000, respectively. The average rate of interest on the outstanding debt
was 11.39% and 11.25%, respectively. Interest income for the three months ended
June 30, 1999 was $624,000 as compared with $1,074,000 for the three months
ended June 30, 1998. This decrease was a result of a lower average balance of
investments in marketable securities.
NET LOSSES for the three months ended June 30, 1999 were $6,540,000 as
compared with $5,459,000 for the three months ended June 30,1998. The increase
in the net loss of $1,081,000 was primarily attributable to higher station
operating expenses, depreciation and amortization expenses, corporate, general
and administrative expenses, net interest expense and no income tax benefit,
offset by increased net revenues in the quarter ended June 30, 1999.
SIX MONTHS ENDED JUNE 30, 1999 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1998
NET REVENUES for the six months ended June 30, 1999 were $7,453,000 as
compared with $5,908,000 for the six months ended June 30, 1998, an increase of
$1,545,000 or 26.2%. This increase was due primarily to increases in the net
revenues of Y-107 NY and the Chicago Stations. These increases in revenues were
11
<PAGE>
partially offset by the decrease in net revenues of $698,000 for WRKL-AM for the
six months ended, June 30, 1999 when compared with the same period in 1998.
STATION OPERATING EXPENSES EXCLUDING DEPRECIATION AND AMORTIZATION for the
six months ended June 30, 1999 were $10,607,000 as compared to $8,290,000 for
the six months ended June 30, 1998, an increase of $2,317,000 or 27.9%. This
increase was due principally to the start-up operations of 92 KISS FM in
November 1998. Furthermore, increases in station operating expenses at Y-107 NY
and 103.1 Chicago Heart and Soul were partially offset by a reduction in the
station operating expense of WRKL in the six months ended June 30, 1999 when
compared with the six months ended June 30, 1998.
CORPORATE, GENERAL AND ADMINISTRATIVE EXPENSES for the six months ended June
30, 1999 were $1,638,000 as compared to $1,180,000 for the six months ended June
30, 1998, an increase of $458,000 or 38.8%. This increase was due primarily to
franchise taxes of $109,000, legal and professional fees of $215,000 and
administrative expenses of $135,000 to support the growth of the Company.
DEPRECIATION AND AMORTIZATION EXPENSES for the six months ended June 30,
1999 were $1,701,000 as compared to $1,198,000 for the six months ended June 30,
1998, an increase of $503,000 or 42.0%. This increase was due primarily to the
amortization of intangibles and depreciation of capital assets of the New York
and Chicago stations which were acquired in August 1998 and February 1999.
INTEREST EXPENSE for the six months ended June 30, 1999 were $8,042,000 as
compared with $4,880,000 for the six months ended June 30, 1998, an increase of
$3,162,000 or 64.8%. This increase reflects additional interest throughout the
six month period ended June 30, 1999 resulting from the issuance of Senior
Discount Notes on March 17, 1998. In the six months ended June 30, 1999 and
1998, the average outstanding total debt for the Company was $142,774,000 and
$87,463,000, respectively. The average rate of interest on the outstanding debt
was 11.25% and 11.0% respectively. Interest income for the six months ended June
30, 1999 was $1,396,000 as compared with $1,240,000 for the six months ended
June 30, 1998.
NET LOSSES for the six months ended June 30, 1999 were $12,755,000 as
compared with $8,745,000 for the six months ended June 30, 1998. The increase in
the net loss of $4,010,000 was primarily attributable to higher; (a) station
operating expenses, (b) depreciation and amortization expenses, (c) corporate,
general and administrative expenses, and (d) net interest expense as well as no
income tax benefit, and an extraordinary loss on the extinguishment of debt, net
of income taxes, of $495,000. These increases were offset by (a) a gain on sale
of a station of $663,000 and (b) increased net revenues, for the six months
ended June 30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company has reported net losses since inception primarily due to
broadcast cash flow deficits characteristic of the start up of Y-107 LA, Y-107
NY, FM 103.1 Chicago, and 92 KISS FM Chicago, and depreciation and amortization
charges relating to the Company's acquisition of radio stations, as well as
interest charges on its outstanding debt. In addition, because its broadcast
properties are in the early stages of development, the Company expects to
generate significant net losses as it continues to expand its presence in major
markets for the foreseeable future. As a result, working capital needs have been
met by borrowings, including loans from the Principal Stockholders (which
borrowings were contributed to the capital of the Company immediately prior to
the consummation of the Initial Public Offering), borrowings under the Old
Credit Facility and the issuance of the Notes. The Company has entered into
various employment contracts with twenty-two individuals comprised mainly of
officers and senior management that provide for minimum salaries and incentives
based upon specified levels of performance. The minimum payments under these
contracts are $1,473,000 in 1999, $2,554,000 in 2000, $239,000 in 2001 and
$33,000 in 2002.
12
<PAGE>
The Company has never paid cash or stock dividends on shares of common
stock. Furthermore, it intends to retain any future earnings for use in its
business and does not anticipate paying dividends on shares of its Common Stock
in the foreseeable future.
CASH FLOWS FROM OPERATING ACTIVITIES
In both the six months ended June 30, 1999 and 1998, the Company used cash
in its operations. In the six months ended June 30, 1999, the deficit was
predominantly due to the start-up operating losses of 92 KISS FM and FM 103.1 in
Chicago. In the six months ended June 30, 1998 this negative cash flow was
predominantly due to the funding of the start-up operations of Y-107 New York
and FM 103.1 Chicago.
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (excluding acquisitions of radio stations) were
$1,540,000 and $865,000 for the six months ended June 30, 1999 and 1998,
respectively. These expenditures primarily reflect costs associated with the FCC
Power Increases and other technical improvements at the Company's stations, the
upgrade and expansion of the studio and broadcast facilities, and computer
support equipment.
CASH FLOWS FROM FINANCING ACTIVITIES
Under the terms of the Old Credit Facility, the Company had a $35.0 million
reducing revolving loan facility, of which amount Stuart Subotnick, the
Company's Chairman and a holder of its Class B Common Stock, had guaranteed the
payment of up to $6.0 million. The amounts outstanding under the Old Credit
Facility were repaid with the proceeds of the Notes Offering on March 17, 1998.
The Company completed the Notes offering of $174.0 million aggregate
principal amount of Notes on March 17, 1998, generating approximately $125.4
million of gross proceeds for the Company of which the Company used
approximately $32.8 million to repay outstanding indebtedness under its Old
Credit Facility. The Company has used for past acquisitions and has committed
for future acquisitions of radio station properties approximately $66.4 million
and intends to use the remaining proceeds for general, corporate and working
capital purposes.
The Notes were issued at an original issue discount and will accrete in
value until March 15, 2001 at a rate of 11 1/4% per annum, compounded
semi-annually, to an aggregate principal amount of $174.0 million. Cash interest
will not accrue on the Notes prior to March 15, 2001. Thereafter, interest on
the Notes will accrue at a rate of 11 1/4% per annum and will be payable in cash
semi-annually, commencing September 15, 2001. The Notes will mature on March 14,
2005 but may be redeemed after March 15, 2001 at the option of the Company, in
whole or in part, at a redemption price of 105.625%, 102.813% or 100.000% if
redeemed during the 12-month period commencing on March 15, 2002, 2003 and 2004,
respectively. In addition, up to 33 1/3% of the original principal amount of the
Notes may be redeemed at the option of the Company prior to March 15, 2001 at a
redemption price equal to 111.25% of the accreted value of the Notes with net
cash proceeds of one or more equity offerings of the Company so long as there is
a public market for the Class A Common Stock at the time of such redemption and
provided that at least 66 2/3% of the original principal amount of the Notes
remains outstanding.
Holders of the Notes have the right to require the Company to repurchase
their Notes upon a "change of control" of the Company, at a price equal to 101%
of the accreted value of the Notes if such repurchase occurs prior to March 15,
2001 or at a price equal to the principal amount of such Notes if such
repurchase occurs thereafter. A "change of control" for purposes of the Notes is
deemed to occur (i) when any person other than the Principal Stockholders, the
management and their affiliates (the "Permitted Holders"), becomes the owner of
more than 35% of the total voting power of the Company's stock and the Permitted
Holders own in the aggregate a lesser percentage of such voting power and do not
have the right or ability to elect a majority of the Board of Directors, (ii)
when the Board of Directors does not consist of a majority of continuing
directors, (iii) upon the occurrence of a sale or transfer of all or
substantially all of
13
<PAGE>
the assets of the Company taken as a whole, or (iv) upon the adoption by the
stockholders of a plan for the liquidation or dissolution of the Company.
Payments under the Notes are guaranteed on a senior unsecured basis by the
Company's restricted subsidiaries, as defined in the Indenture governing the
Notes; as of August 6, 1999, all of the Company's subsidiaries were restricted
subsidiaries. The Notes contain certain financial and operational covenants and
other restrictions with which the Company and its restricted subsidiaries must
comply, including restrictions on the incurrence of additional indebtedness,
investments, payment of dividends on and redemption of capital stock and the
redemption of certain subordinated obligations, sales of assets and the use of
proceeds therefrom, transactions with affiliates, creation and existence of
liens, the types of businesses in which the Company may operate, asset swaps,
distributions from restricted subsidiaries, sales of capital stock of restricted
subsidiaries and consolidations, mergers and transfers of all or substantially
all of the Company's assets. The Company is currently in compliance with all
covenants and other restrictions under the Notes and anticipates that it will
continue to meet the requirements of the Notes.
The Notes contain customary events of default including payment defaults and
default in the performance of other covenants, certain bankruptcy defaults,
judgment and cross defaults, and failure of a subsidiary guarantee to be in full
force and effect.
On July 6, 1998, the Company completed an exchange offer for the Notes, in
which the holders of substantially all outstanding Notes exchanged their Notes
for newly-issued Notes registered under the Securities Act of 1933. The new
Notes have the same terms as the exchanged Notes, except that the new Notes are
so registered. The amount exchanged was $172,500,000 aggregate principal amount
at maturity of Notes.
In connection with the consummation of the Notes Offering, the Company
entered into a revolving credit facility with The Chase Manhattan Bank ("Chase")
providing for up to $15.0 million of availability, based upon a multiple of the
Company's Los Angeles Stations' cash flow (the "Revolving Credit Facility"). The
Revolving Credit Facility will mature on the fifth anniversary of March 17, 1998
and amounts outstanding under the Revolving Credit Facility will bear interest
at an applicable margin plus, at the Company's option, Chase's prime rate (in
which case the applicable margin will initially be 2.00% subject to reduction
upon achieving performance criteria based on the Company's leverage ratio) or
the London Interbank Borrowing Rate (in which case the applicable margin will
initially be 3.00% subject to reduction upon achieving performance criteria
based on the Company's leverage ratio). The Company's obligations under the
Revolving Credit Facility are secured by a pledge of substantially all of the
Company's and its restricted subsidiaries' assets. The Company will pay fees of
0.5 percent per annum, on the aggregate unused portion of the facility.
The Revolving Credit Facility contains certain financial and operational
covenants and other restrictions with which the Company must comply, including,
among others, limitations on capital expenditures, the incurrence of additional
indebtedness, restrictions on sales of assets, restrictions on the use of
borrowings, limitations on paying cash dividends and redeeming or repurchasing
capital stock of the Company or the Notes, and requirements to maintain certain
financial ratios, maximum total leverage, minimum interest coverage, and minimum
fixed charge coverage. The Company is currently in compliance with all covenants
and other restrictions under the Revolving Credit Facility and anticipates that
it will continue to meet the requirements of the Revolving Credit Facility. As
of June 30, 1999 no amounts were drawn down on the Revolving Credit Facility.
However, a $509,000 letter of credit related to the Century City office lease
was issued under the Revolving Credit Facility.
The Revolving Credit Facility contains customary events of default,
including material misrepresentations, payment defaults and default in the
performance of other covenants, certain bankruptcy and ERISA defaults, judgment
and cross defaults, and defaults upon the revocation of any of the Company's
broadcast licenses and change in control. The Revolving Credit Facility also
provides that an event of default will occur upon the occurrence of a "change of
control" as defined in the Revolving Credit Facility. For
14
<PAGE>
purposes of the Revolving Credit Facility, a change of control will occur when
(i) any person or group other than the Principal Stockholders and their
affiliates obtains the power to elect a majority of the Board of Directors, (ii)
the Company fails to own 100% of the capital stock of its subsidiaries owning
any of the FCC broadcast licenses, or when (iii) the Board of Directors does not
consist of a majority of continuing directors, as defined.
As of the date of this report, the Company has no binding commitments for
any such acquisitions, except for those detailed in footnote 5, "Subsequent
Events," in the Notes to Consolidated Financial Statements. After giving effect
to the Notes Offering and application of net proceeds therefrom, the Company had
available approximately $43.7 million of cash and cash equivalents on hand and
marketable securities at June 30, 1999 and has unused borrowing capacity of $3.2
million under the Revolving Credit Facility, which can be used for working
capital purposes, including financing any such acquisitions. Cash and cash
equivalents on hand, marketable securities, and amounts available under the
Revolving Credit Facility may not be sufficient to support the Company's growth
strategy and as a result the Company may require additional debt or equity
financing in order to acquire additional radio stations and accomplish its
long-term business strategies. There can be no assurance that any such financing
will be available or available on acceptable terms. In addition, because of the
Company's substantial indebtedness, a significant portion of the Company's
broadcast cash flow will be required for debt service.
The Company anticipates that the net proceeds of the Notes Offering, its
available borrowing capacity and its broadcast cash flow from operations will be
sufficient to finance its capital expenditure programs, as well as existing
operational and debt service requirements, through June 30, 2000. Management
believes that its long term liquidity needs will be satisfied through a
combination of (i) the Company's successful implementation and execution of its
growth strategy to acquire and build a major market broadcast group; and (ii)
the Company's properties achieving positive operating results and cash flows
through revenue growth and control of operating expenses. If the Company is
unable to successfully implement its strategy, the Company may be required to
obtain additional financing through public or private sale of debt or equity
securities of the Company or otherwise restructure its capitalization.
YEAR 2000
The Company is currently working to evaluate and resolve the potential
impact of the Year 2000 on the processing of date-sensitive information and
network systems. The Year 2000 problem is the result of computer programs being
written using two digits (rather than four) to define the Year 2000, which could
result in miscalculations or system failures resulting from recognition of a
date using "00" as the year 1900 rather than the year 2000.
The Company has delegated responsibility to a group of executives to
coordinate the identification, evaluation and implementation of changes to
computer systems and applications necessary to achieve the Company's goal of a
Year 2000 date conversion which would minimize the effect on its customers and
avoid disruption to business operations. The Company is also focusing on
hardware and software tools, programming and outside forces that may affect the
Company's operations, including the Company's vendors, banks and utility
companies. The Company's analysis of the Year 2000 threat is on-going and will
be continuously updated throughout 1999 as necessary.
The Company has written and distributed a questionnaire and project plan to
the Company's systems and operating personnel to identify all business and
computer applications, so the Company can identify potential compliance
problems. The Company has initiated communications with all of its significant
suppliers and contractors to determine their plans for remediating any Year 2000
issues that arise in the interface with the Company. The Company is currently
compiling a database of information based upon these responses, which is
expected to be completed by September 30, 1999. To the extent problems are
identified, the Company will implement corrective procedures where necessary,
then test the applications for Year 2000 compliance. The Company expects to
complete this project prior to January 1, 2000. The
15
<PAGE>
Company is, in addition, developing a contingency plan should the planned Year
2000 remedial measures prove to be less than comprehensive.
Based on the preliminary data, the Company's estimate is that the Year 2000
effort will cost $50,000, covering the period from January 1, 1998 through
December 31, 2000, out of a total expected cost of information systems of
$200,000 for this period, although there can be no assurance as to the ultimate
cost of the Year 2000 effort or the total cost of information systems. Such
costs will be expensed as incurred, except to the extent such costs are incurred
for the purchase or lease of capital equipment. The Company expects to make some
of the necessary modifications through its ongoing investment in system
upgrades. The Company believes that its exposure to this issue, based on its
internal systems, is somewhat limited by the fact that the majority of its
existing systems have been purchased or replaced since 1996 or currently remain
under development.
As of June 30, 1999, the Company had incurred minimal expenses in respect of
its Year 2000 conversion effort. No other information system projects of the
Company have been deferred due to the Year 2000 efforts. The Company expects
that the source of funds for Year 2000 costs will be cash on hand.
If the Company, its customers or its vendors are unable to resolve Year 2000
processing issues in a timely manner, a material adverse effect on the Company's
results of operations and financial condition could result. Accordingly, the
Company plans to devote the necessary resources to resolve all significant Year
2000 issues.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this report, including those utilizing phrases "will,"
"expects," "intends," "estimates," "contemplates," and similar phrases, are
"forward-looking" statements (as such term is defined in Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including
statements regarding, among other items, (i) the Company's growth strategy, (ii)
the Company's intention to acquire additional radio stations and to enter
additional markets, including its ability to do so at attractive valuations,
(iii) the Company's expectation of improving the coverage areas of its radio
stations, and (iv) the Company's ability to successfully implement its business
strategy. Certain, but not necessarily all, of such forward-looking statements
can be identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "will," "should," or "anticipates" or the negative thereof or
other variations thereon or comparable terminology, or by discussions of
strategy that involve risks and other factors which may cause the actual
results, performance and achievements of the Company and its subsidiaries to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
but are not limited to, the following: (i) changes in the Company's and its
stations' competitors, (ii) changes in the regulatory framework, (iii) changes
in audience tastes, changes or advances in technology and (iv) changes in the
economic conditions of local markets. Other factors which may materially affect
actual results include, among others, the following: general economic and
business conditions, industry capacity, demographic changes, changes in
political, social and economic conditions and various other factors beyond the
Company's control. The Company does not undertake and specifically declines any
obligation to release publicly the results of any revisions which may be made to
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or unanticipated
events. The Company's ability to avoid interruptions due to Year 2000 problems
involves risks and uncertainties, including, but not limited to, suppliers',
customers' and the Company's ability to complete remediation which could be
affected by factors such as delays and increased costs.
16
<PAGE>
PART II--OTHER INFORMATION
ITEM 1--LEGAL PROCEEDINGS
The Company is involved in litigation from time to time in the ordinary
course of its business. In Management's opinion, the outcome of all pending
legal proceedings, individually and in the aggregate, will not have a material
adverse effect on the Company.
ITEM 2--CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3--DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4--SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's stockholders, through
the solicitation of proxies or otherwise, during the second quarter of 1999.
ITEM 5--OTHER INFORMATION.
None.
ITEM 6--EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
NUMBER EXHIBIT
- ------------- --------------------------------------------------------------------------------------------------------
<C> <S>
11 Computation of Earnings Per Share*
27 Financial Data Schedule for the period ended June 30, 1999*
</TABLE>
(b) Reports on Form 8-K
No reports were filed during the quarter for which this report was filed.
- ------------------------
* Filed herewith
17
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
<TABLE>
<S> <C> <C>
BIG CITY RADIO, INC.
By: /s/ PAUL R. THOMSON
-----------------------------------------
Paul R. Thomson
VICE PRESIDENT, CHIEF FINANCIAL OFFICER
AND TREASURER
</TABLE>
Dated: August 9, 1999
18
<PAGE>
EXHIBIT 11
BIG CITY RADIO, INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------------------- -----------------------------
<S> <C> <C> <C> <C>
1999 1998 1999 1998
------------- ------------- -------------- -------------
Net loss............................................ $ (6,540,000) $ (5,459,000) $ (12,755,000) $ (8,745,000)
------------- ------------- -------------- -------------
------------- ------------- -------------- -------------
Weighted average number of shares
outstanding--basic:
Weighted average number of common shares
outstanding..................................... 14,069,275 13,988,913 14,069,275 13,982,253
Dilutive effect of stock options after application
of treasury stock method.......................... -- -- -- --
------------- ------------- -------------- -------------
Weighted average number of shares outstanding....... 14,069,275 13,988,913 14,069,275 13,982,253
------------- ------------- -------------- -------------
------------- ------------- -------------- -------------
Net loss per share:
Basic and dilutive (a)............................ $ (0.46) $ (0.39) $ (0.91) $ (0.63)
------------- ------------- -------------- -------------
------------- ------------- -------------- -------------
</TABLE>
- ------------------------
(a) In calculating diluted earnings per share, no potential shares of common
stock are to be included in the computation of diluted earnings per share
when a loss from continuing operations available to common stockholders
exists. For the three and six months ended June 30, 1999 and 1998, the
Company had a loss from continuing operations.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 6,627
<SECURITIES> 37,040
<RECEIVABLES> 3,617
<ALLOWANCES> 214
<INVENTORY> 0
<CURRENT-ASSETS> 53,524
<PP&E> 7,682
<DEPRECIATION> 2,054
<TOTAL-ASSETS> 146,484
<CURRENT-LIABILITIES> 3,118
<BONDS> 144,407
0
0
<COMMON> 141
<OTHER-SE> (4,474)
<TOTAL-LIABILITY-AND-EQUITY> 146,484
<SALES> 0
<TOTAL-REVENUES> 7,453
<CGS> 0
<TOTAL-COSTS> 13,946
<OTHER-EXPENSES> 279
<LOSS-PROVISION> 106
<INTEREST-EXPENSE> 6,646
<INCOME-PRETAX> (12,755)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,755)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,755)
<EPS-BASIC> (0.91)
<EPS-DILUTED> (0.91)
</TABLE>
