UNITED STATES
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 MAY 31, 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: 333-44177
BRILL MEDIA COMPANY, LLC
------------------------
(Exact name of registrant as specified in its charter)
Virginia 52-2071822
(State of Formation) (I.R.S. Employer Identification No.)
420 N.W. Fifth Street
Evansville, Indiana 47708
(address of principal executive offices)
(812) 423-6200
--------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act: None
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.
|X| YES |_| NO
<PAGE>
TABLE OF CONTENTS
PART NO. ITEM NO. Page No.
I 1 FINANCIAL STATEMENTS
Consolidated Statements of Financial Position
May 31, 1999 and February 28, 1999 3
Consolidated Statements of Operations and
Members' Deficiency for the Three Months
Ended May 31, 1999 and 1998 4
Consolidated Statements of Cash Flows for the
Three Months Ended May 31, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
2 MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 8
3 QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK 13
II 6 EXHIBITS AND REPORTS ON
FORM 8-K 14
2
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
Brill Media Company, LLC
(A Limited Liability Company)
Consolidated Statements of Financial Position
<TABLE>
<CAPTION>
May 31 February 28
1999 1999
------------------------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 4,578,515 $ 2,740,244
Accounts receivable, net 6,010,397 5,021,759
Inventories 383,890 495,377
Other current assets 443,770 368,183
------------------------------
Total current assets 11,416,572 8,625,563
Notes receivable from managed affiliates 18,578,747 18,263,747
Property and equipment 23,358,198 23,118,587
Less: Accumulated depreciation 10,524,814 10,295,485
------------------------------
Net property and equipment 12,833,384 12,823,102
Goodwill and FCC licenses, net 13,916,616 13,808,957
Covenants not to compete, net 3,765,913 3,977,407
Other assets, net 5,371,706 5,672,201
Amounts due from related parties 3,712,983 3,654,279
------------------------------
$ 69,595,921 $ 66,825,256
==============================
Liabilities and members' deficiency
Current liabilities:
Amounts payable to related parties $ 1,231,211 $ 637,141
Accounts payable 1,217,787 1,288,100
Accrued payroll and related expenses 1,029,785 750,334
Accrued interest 3,611,590 1,642,244
Other accrued expenses 670,268 437,185
Current maturities of long-term obligations 4,113,667 3,960,435
------------------------------
Total current liabilities 11,874,308 8,715,439
Long-term notes and other obligations 113,472,554 112,206,419
Members' deficiency (55,750,941) (54,096,602)
------------------------------
$ 69,595,921 $ 66,825,256
==============================
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE>
Brill Media Company, LLC
(A Limited Liability Company)
Consolidated Statements of Operations and Members' Deficiency
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
May 31
1999 1998
----------------------------
<S> <C> <C>
Revenues $ 11,190,111 $ 10,604,521
Operating expenses:
Operating departments 7,968,621 7,400,165
Management fees 703,693 684,444
Time brokerage agreement fees, net -- 12,000
Consulting 4,998 61,999
Depreciation 368,035 343,314
Amortization 371,809 336,358
----------------------------
9,417,156 8,838,280
----------------------------
Operating income 1,772,955 1,766,241
Other income (expense):
Interest - managed affiliates 560,278 500,350
Interest - related parties, net 47,833 (6,846)
Interest - other, net (3,516,346) (3,250,772)
Amortization of deferred financing costs (152,863) (146,573)
Loss on sale of assets, net (125,734) --
Other, net (43,305) (41,602)
----------------------------
(3,230,137) (2,944,903)
----------------------------
Loss before income taxes and cumulative effect of change in
accounting principle (1,457,182) (1,178,662)
Income tax provision 46,178 40,500
----------------------------
Loss before cumulative effect of change in accounting principle (1,503,360) (1,219,162)
Cumulative effect of change in accounting principle (150,979) --
----------------------------
Net loss (1,654,339) (1,219,162)
Members' deficiency, beginning of period (54,096,602) (47,509,998)
Capital contributions -- 16,040
----------------------------
Members' deficiency, end of period $(55,750,941) $(48,713,120)
============================
</TABLE>
See accompanying notes to the consolidated financial statements.
4
<PAGE>
Brill Media Company, LLC
(A Limited Liability Company)
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended May 31
1999 1998
-------------------------------
<S> <C> <C>
Operating activities
Net loss $ (1,654,339) $ (1,219,162)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 739,844 679,672
Amortization of deferred financing costs and original issue 1,384,312 1,322,021
discount
Management fees accrual 185,478 173,939
Related parties interest accrual (80,080) (553,516)
Loss on sale of assets, net 125,734 --
Cumulative effect of change in accounting principle 150,979
Changes in operating assets and liabilities, net of
effect of acquisition:
Accounts receivable (988,638) (2,324,382)
Other current assets 35,900 159,633
Accounts payable (70,313) 910,472
Other accrued expenses 2,481,880 2,302,678
-------------------------------
Net cash provided by operating activities 2,310,757 1,451,355
Investing activities
Purchase of property and equipment (313,207) (606,733)
Purchase of newspaper, net of cash acquired (61,235) --
Proceeds from sale of assets 64,272 --
Loans to managed affiliates --
(315,000)
Increase in other assets (8,330) (16,688)
-------------------------------
Net cash used in investing activities (633,500) (623,421)
Financing Activities
Increase (decrease) in amounts due to related parties 431,064 (36,689)
Payment of deferred financing costs -- (498,596)
Principal payments on long-term obligations (270,050) (241,295)
Proceeds from long-term borrowings -- 15,629
Capital contributions -- 16,040
-------------------------------
Net cash provided by (used in) financing activities 161,014 (744,911)
-------------------------------
Net increase in cash and cash equivalents 1,838,271 83,023
Cash and cash equivalents at beginning of period 2,740,244 10,917,613
-------------------------------
Cash and cash equivalents at end of period $ 4,578,515 $ 11,000,636
===============================
</TABLE>
See accompanying notes to the consolidated financial statements.
5
<PAGE>
Brill Media Company, LLC
Notes to the Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements include the
accounts of Brill Media Company, LLC (BMC) and its subsidiaries, all of which
are wholly owned (collectively the Company). BMC's members are directly owned by
Alan R. Brill (Mr. Brill). These statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting of normal recurring
accruals, considered necessary for a fair presentation have been included along
with the elimination of all intercompany balances and transactions. Operating
results for the three month period ended May 31, 1999 are not necessarily
indicative of the results that may be expected for the year ending February 29,
2000. For further information, refer to the consolidated financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
year ended February 28, 1999.
2. Pending Dispositions and Completed Acquisitions
On October 24, 1997, the Company entered into contracts to sell the
operating assets of its Missouri radio stations (collectively, the Missouri
Properties), for a net cash price of $7,419,000, plus assumed liabilities of
$256,000. The expected pretax gain will be approximately $5 million, net of
related expenses, which will be recognized upon transfer of the FCC licenses.
The Company further contracted to permit the buyer to provide certain
programming on the combined radio stations under TBAs beginning November 1,
1997, for $50,000 per month, until transfer of the FCC licenses is complete.
Accordingly, other than pursuant to the TBAs, no broadcast revenue or operating
expenses were recorded for the Missouri Properties subsequent to October 31,
1997. Applications for transfer of the broadcast licenses of the Missouri
Properties have been filed with the FCC. A local market competitor has objected
to the transfer of the licenses and on December 12, 1997, filed with the FCC a
Petition to Deny the license transfers and to terminate the TBAs. The Attorney
General of the State of Missouri on January 9, 1998 filed a civil investigative
demand on the Company to provide documents in order to consider whether the
proposed transactions would violate federal or Missouri antitrust laws. The
Company complied with the demand. The Attorney General of the State of Missouri
has since filed comments with the FCC objecting to the proposed transfers. The
FCC has taken no further action on the Petition to Deny. The Company believes
that, even if the Petition to Deny were granted, any adverse consequences to the
Company would not be material.
6
<PAGE>
In November 1998, the Company acquired three weekly shopping guide
publications and a print distribution operation reaching approximately 66,000
households in the north-western portion of the lower peninsula of Michigan (the
1999 News acquisition). Total consideration was $1,408,644, which consisted of
$557,640 cash and a secured seller note valued at $851,004. The Company also
entered into a six-year covenant not to compete valued at $405,890.
In April 1999, the Company acquired a real estate magazine which has
monthly distribution of approximately 20,000 in the north-western portion of the
lower peninsula of Michigan (the 2000 News acquisition) for consideration of
approximately $276,000, which consisted of $61,235 cash, a secured seller note
and a six-year covenant not to compete.
3. Long Term Debt
Long-term obligations include the Company's 12% senior notes due 2007 (the
Senior Notes) and appreciation notes due 2007 (the Appreciation Notes). The
Senior Notes are senior unsecured obligations of BMC and a subsidiary of BMC,
Brill Media Management, Inc. (Media). The Appreciation Notes are unsecured
subordinated obligations of BMC and Media. The Senior Notes and Appreciation
Notes are unconditionally guaranteed, fully, jointly, and severally, by each of
the Company's subsidiaries other than Media (the Guarantors) all of which are
wholly owned. BMC is a holding company and has no operations, assets, or cash
flows separate from its investments in its subsidiaries. Accordingly, separate
financial statements and other disclosures concerning Media and the Guarantors
have not been presented because management has determined that they would not be
material to investors.
Media has minimal assets and liabilities ($392 cash, $292 due to related
parties and $100 capital at May 31, 1999; and $50 cash, $50 due from related
parties and $100 capital at February 28, 1999) and no income or expenses since
its formation in October 1997.
4. Affiliate Transactions
During fiscal year 2000, the Company has advanced $315,000 to certain of
its affiliates (the Managed Affiliates) under the existing Managed Affiliates
Notes which are described in Item 2 below.
5. Cumulative Effect of Change in Accounting Principle
The Company adopted AcSEC Statement of Position 98-5 "Reporting on the
Costs of Start-Up Activities" (SOP) in the first quarter of fiscal 2000 and
wrote-off, as required, approximately $150,000 of previously capitalized
start-up costs as a cumulative effect of change in accounting principle.
7
<PAGE>
6. Operating Segments
The Company has two operating segments: operation of AM and FM radio
stations and publication of daily and weekly newspapers and shoppers.
Information for the three month periods ended May 31 regarding the Company's
major operating segments is presented in the following table:
<TABLE>
<CAPTION>
Radio News Total
-----------------------------------------
<S> <C> <C> <C>
Revenues:
1999 $ 4,077,761 $ 7,112,350 $ 11,190,111
1998 3,875,201 6,729,320 10,604,521
Operating income:
1999 778,656 996,481 1,775,137
1998 548,683 1,217,558 1,766,241
Total assets:
1999 43,337,795 26,260,308 69,598,103
1998 36,481,733 32,713,526 69,195,259
Depreciation and amortization expense:
1999 386,424 351,238 737,662
1998 384,606 295,066 679,672
Capital expenditures:
1999 126,696 186,511 313,207
1998 370,687 236,046 606,733
</TABLE>
7. Subsequent Events
On June 15, 1999, an additional equity contribution was made by Mr. Brill
and the Company redeemed the Appreciation Notes for the aggregate sum of $3.0
million.
ITEM 2. MANAGEMENT'S DISSCUSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General Information and Basis of Presentation
The Company is a diversified media enterprise that acquires, develops,
manages, and operates radio stations, newspapers and related businesses in
middle markets. The Company presently owns, operates, or manages fifteen radio
stations (the Stations) serving five markets located in Pennsylvania,
Kentucky/Indiana, Colorado, Minnesota/Wisconsin, and Missouri. The Company's
newspaper businesses (the Newspapers) operate integrated newspaper publishing,
printing and print advertising distribution operations, providing total-market
print advertising coverage throughout a thirty-six-county area in the central
and northern portions of the lower peninsula of Michigan. This operation offers
a three-edition daily newspaper, twenty-six weekly publications, a monthly real
estate guide, web offset printing operations for Newspapers' publications and
outside customers, and private distribution systems. Mr.
8
<PAGE>
Brill founded the business and began its operations in 1981. The Company's
overall operations, including its sales and marketing strategy, long-range
planning, and management support services are managed by Brill Media Company,
L.P., a limited partnership indirectly owned by Mr. Brill.
Results of Operations
The Company's unaudited consolidated financial statements tend not to be
directly comparable from period to period due to both completed acquisitions and
pending dispositions. These activities are identified in the notes to the
audited and unaudited consolidated financial statements of the Company.
Three Months Ended May 31, 1999 Compared to Three Months Ended May 31, 1998
Revenues for the three months ended May 31, 1999 were $11.2 million, a $0.6
million or 5.5% increase from the prior comparative period. For the current
quarter, Stations' revenues represented $4.1 million and Newspapers' revenues
represented $7.1 million.
Stations' revenues, excluding the Missouri Properties, increased $0.2
million or 4.8% from the prior comparative period. This increase is due to
continuing operations growth within each market.
The Newspapers' revenues increased $0.4 million or 5.7% from the prior
comparative period. The 2000 and 1999 News acquisitions accounted for this
growth.
Operating expenses for the three months ended May 31, 1999 were $9.4
million, a $0.6 million or 6.5% increase from the prior comparative period.
The Stations' operating expenses, excluding the Missouri Properties,
remained unchanged from the prior comparative period.
The Newspapers' operating expenses increased $0.6 million over the prior
comparative period. The 2000 and 1999 News acquisitions accounted for this
increase.
As a result of the above, operating income for the three months ended May
31, 1999 remained relatively unchanged from the prior comparative period.
Other income (expense) for the three months ended May 31, 1999 was $3.2
million of net expense, an increase of $0.3 million or 9.7% over the prior
comparative period. This is primarily due to an increase in interest expense
associated with the financing arrangements entered into in fiscal 1998, a
decrease in temporary cash investment income along with a loss on sale of real
estate assets of a radio station being relocated.
9
<PAGE>
Net loss for the three months ended May 31, 1999 was $1.7 million, an
increase in loss of $0.5 million or 35.7% over the prior comparative period.
This is primarily due to the increases in other income (expense) noted above,
along with the adoption of the SOP.
Liquidity and Capital Resources
Generally, the Company's operating expenses are paid before its advertising
revenues are collected. As a result, working capital requirements have increased
as the Company has grown and will likely increase in the future.
Net cash provided by operating activities was $2.3 million for the three
months ended May 31, 1999. The increase of $0.9 million from the comparative
fiscal 1999 period is primarily attributable to the timing related to the
collection of receivables and the payment of operating expenses and the
collection of accrued affiliate interest.
Net cash used in investing activities was $0.6 million for the three months
ended May 31, 1999. The cash used in investing activities for the current
reporting period is primarily attributable to the additional loans to Managed
Affiliates and purchase of property and equipment. The increase in cash used in
investing activities from the prior comparative reporting period was minimal;
however, the prior period's use of funds was limited primarily to the purchase
of property and equipment.
Net cash provided by financing activities was $0.2 million for the three
months ended May 31, 1999. The source of cash for the current reporting period
is attributable primarily to an increase in the amounts due to related parties
offset by payments of long-term obligations. The increase of $0.9 million in
cash provided by financing activities from the prior comparative reporting
period is related primarily to the increase in amounts due to related parties
and decrease in payments of deferred financing costs.
Media Cashflow was $3.8 million and $3.9 million for the three month
periods ended May 31, 1999 and 1998, respectively. Media Cashflow represents
EBITDA plus incentive plan expense, management fees, time brokerage fees paid,
acquisition related consulting expense, income from temporary cash investments
and interest income from loans made by the Company to Managed Affiliates. EBITDA
is generally defined as net income (loss) plus the income tax provision,
consolidated interest expense, depreciation expense, amortization expense,
extraordinary items and cumulative effect of change in accounting principle.
Media Cashflow and EBITDA as used above include the results of operations from
unrestricted subsidiaries and therefore differ from the same terms as defined in
the indenture under which the Company's Senior Notes were issued (the
Indenture).
10
<PAGE>
Although Media Cashflow is not a measure of performance calculated in
accordance with GAAP, management believes it is useful in evaluating the Company
and is widely used in the media industry to evaluate a media company's
performance. However, Media Cashflow should not be considered in isolation or as
a substitute for net income, cash flows from operating activities and other
income or cash flow statements prepared in accordance with GAAP as a measure of
liquidity or profitability. In addition, Media Cashflow as determined by the
Company may not be comparable to related or similar measures as reported by
other companies and does not represent funds available for discretionary use.
The Company has loaned approximately $18.6 million to Managed Affiliates
and received in return the Managed Affiliate Notes which are unsecured, mature
on January 1, 2001 and bear interest at a rate of 12% per annum. The proceeds of
such loans have been used by the Managed Affiliates to purchase property,
equipment, intangibles and provide working capital. It is anticipated that
similar relationships may be initiated with other affiliates in the future. The
aggregate amount of Managed Affiliate Notes may not exceed $20 million unless
the Company first obtains a written opinion of an independent investment bank of
nationally recognized standing that such transaction is fair to the Company from
a financial point of view. For the three month period ended May 31, 1999, the
Managed Affiliates reported combined revenues of $1.2 million, net loss of $0.6
million and Media Cashflow of $0.3 million.
The Senior Notes require semi-annual cash interest payments on each June 15
and December 15 of $3.9 million through December 15, 1999 and $6.3 million from
June 15, 2000 until maturity. An additional equity contribution was made by Mr.
Brill and the Company redeemed the Appreciation Notes on June 15, 1999 at a
redemption price of $3.0 million.
The Company's ability to pay interest on the Senior Notes and to satisfy
its other obligations depends upon its future operating performance, and will be
affected by financial, business, market, technological, competitive and other
conditions, developments, pressures, and factors, many of which are beyond the
control of the Company. The Company is highly leveraged, and many of its
competitors are believed to operate with much less leverage and to have
significantly greater operating and financial flexibility and resources.
Historically, the Company has achieved significant growth through
acquisitions. In order for the Company to achieve needed future growth in
revenues and earnings and to replace the revenues and earnings of properties
that may be sold by one or more of the Subsidiaries from time to time,
additional acquisitions may be necessary. Meeting this need for acquisitions
will depend upon several factors, including the continued availability of
suitable financing. There can be no assurance that the Company can or will
successfully acquire and integrate future operations. In connection with future
acquisition opportunities, the Company, or one or more of its subsidiaries, may
need to incur additional indebtedness or issue additional equity or debt
instruments. There can be no assurance that debt or equity financing for such
acquisitions will be available on acceptable terms, or that the Company will be
able to identify or consummate any new acquisitions.
11
<PAGE>
The Indenture limits the Company's ability to incur additional
indebtedness. In addition to certain other permitted indebtedness, the Indenture
permits the Company to incur indebtedness under revolving credit facilities.
Limitations in the Indenture on the Company's ability to incur additional
indebtedness, together with the highly leveraged nature of the Company, could
limit operating activities, including the Company's ability to respond to market
conditions, to provide for unanticipated capital investments and to take
advantage of business opportunities.
The Company's primary liquidity needs are to fund capital expenditures,
provide working capital, meet debt service requirements and make acquisitions.
The Company's principal sources of liquidity are expected to be cashflow from
operations, cash on hand, consummation of the sale of the Missouri Properties
and indebtedness permitted under the Indenture. The Company believes that
liquidity from such sources should be sufficient to permit the Company to meet
its debt service obligations, capital expenditures and working capital needs for
the next 12 months, although additional capital resources may be required in
connection with the further implementation of the Company's acquisition
strategy.
During the three month period ended May 31, 1999, the Company has expended
$0.3 million to purchase property and equipment.
Seasonality
Seasonal revenue fluctuations are common in the newspaper and radio
broadcasting industries, caused by localized fluctuations in advertising
expenditures. Accordingly, the Stations' and Newspapers' quarterly operating
results have fluctuated in the past and will fluctuate in the future as a result
of various factors, including seasonal demands of retailers and the timing and
size of advertising purchases. Generally, in each calendar year the lowest level
of advertising revenues occurs in the first quarter and the highest levels occur
in the second and fourth quarters.
Impact of Year 2000
The status of the Company's process to ensure year 2000 compliance of all
hardware, software, Station broadcast systems, Newspaper publishing, production
and distribution systems, business office systems and ancillary equipment that
are date dependent has not changed since the issuance of the Company's Annual
Report on Form 10-K for the year ended February 28, 1999.
12
<PAGE>
Forward-Looking Statements
Certain items in this Form 10-Q constitute "forward-looking statements"
within the meaning of the Federal Private Securities Litigation Reform Act of
1995. Forward-looking statements are typically identified by the words
"believe," "expect," "anticipate," "intend," "estimate," and similar
expressions. Readers are cautioned that any such forward-looking statements are
not guarantees of future performance and that matters referred to in such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause actual results, performance or achievements of the
Company 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, risks and uncertainties relating to
leverage, the need for additional funds, consummation of the pending
acquisitions, integration of the recently completed acquisitions, the ability of
the Company to achieve certain cost savings, the management of growth, the
introduction of new technology, changes in the regulatory environment, the
popularity of radio and newsprint as a communication/advertising medium and
changing consumer tastes. The Company undertakes no obligation to publicly
release the results of any revisions to these forward-looking statements that
may be made to reflect any future events or circumstances.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's market risk sensitive instruments do not subject the Company
to material risk exposures, except for such risks related to interest rate
fluctuations. As of May 31, 1999, the Company has debt outstanding of
approximately $117.6 million. The Senior Notes and Appreciation Notes with a
carrying value of $103.5 million have an estimated fair value of approximately
$85.1 million. The fair market value of the Company's remaining debt of $14.1
million approximates its carrying value.
Fixed interest rate debt totals approximately $117.4 million as of May 31,
1999 and includes: the Senior Notes which bear cash interest, payable
semiannually, at a rate of 7 1/2 % through December 15, 1999 and at 12% after
such date until maturity on December 15, 2007; the Appreciation Notes which were
issued at a discount which is being amortized to yield an effective interest
rate of 17% through June 15, 1999, at which time they were redeemed; and other
debt, the majority of which have stated rates of 7% to
13
<PAGE>
8% (all of which are described in the notes to the consolidated financial
statements included in the Company's Annual Report on Form 10-K for the year
ended February 28, 1999.)
Long-term debt matures as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
(in Millions)
- ---------------------------------------------------------------------------------------------
2000 2001 2002 2003 2004 Thereafter Total
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Senior Notes, net
of unamortized
discount of $4.40 $ -- $ -- $ -- $ -- $ -- $ 100.60 $ 100.60
Appreciation Notes,
net of
unamortized 2.96 -- -- -- -- -- 2.96
discount of $0.04
Other 1.15 1.29 1.23 1.2 3.08 6.09 14.04
$ 4.11 $ 1.29 $ 1.23 $ 1.2 $ 3.08 $106.69 $ 117.6
=====================================================================
</TABLE>
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following exhibit is furnished with this report: Exhibit 27 - Financial
Data Schedule and Exhibit 99 - Press Release.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BRILL MEDIA COMPANY, LLC
By: BRILL MEDIA MANAGEMENT, INC.,
Manager
July 15, 1999 By /s/ Alan R. Brill
----------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
July 15, 1999 By /s/ Donald C. TenBarge
----------------------------------
Donald C. TenBarge
VICE PRESIDENT, CHIEF FINANCIAL
OFFICER, SECRETARY AND TREASURER
(PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER)
15
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Exhibits
- --------------------------------------------------------------------------------
27 Financial Data Schedule
99 Press Release
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27 contains summary financial information extracted from financial
statements in the Form 10-Q of Brill Media Company, LLC for the three months
ended May 31, 1999 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-29-2000
<PERIOD-START> MAR-01-1999
<PERIOD-END> MAY-31-1999
<CASH> 4,579,000
<SECURITIES> 0
<RECEIVABLES> 6,276,000
<ALLOWANCES> (266,000)
<INVENTORY> 384,000
<CURRENT-ASSETS> 11,417,000
<PP&E> 23,358,000
<DEPRECIATION> 10,523,000
<TOTAL-ASSETS> 69,598,000
<CURRENT-LIABILITIES> 11,851,000
<BONDS> 113,495,000
0
0
<COMMON> 0
<OTHER-SE> (55,748,000)
<TOTAL-LIABILITY-AND-EQUITY> 69,598,000
<SALES> 11,190,000
<TOTAL-REVENUES> 11,190,000
<CGS> 9,415,000
<TOTAL-COSTS> 9,415,000
<OTHER-EXPENSES> 169,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,061,000
<INCOME-PRETAX> (1,455,000)
<INCOME-TAX> 46,000
<INCOME-CONTINUING> (1,501,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (151,000)
<NET-INCOME> (1,652,000)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
Exhibit 99 contains the press release as issued on July 13, 1999.
FOR IMMEDIATE RELEASE
Contact: Don TenBarge
Brill Media Company, LLC
812-423-6200
William W. Galvin
The Galvin Partnership
212-838-5454
Brill Media Company, LLC
Reports Fiscal First Quarter 2000 Results:
Revenues Up 6%, Media Cashflow Down 1%
Evansville, IN, July 13, 1999 - Brill Media Company, LLC and Brill Media
Management, Inc., (together referred to as the "Company"), operator of radio
stations, newspapers and related businesses in middle markets, today reported
increased revenue and a small decrease in media cash flow for the fiscal first
quarter ended May 31, 1999. Revenues increased 6% to $11.1 million from $10.6
million while media cashflow declined 1% to $3.8 million compared with $3.9
million for the same quarter last year. Disregarding the Company's lower income
from temporary cash investments, media cashflow would have increased
approximately 5% in the period on the same operations.
Revenues from newspaper operations were up 6% compared with the same quarter
last year with media cashflow down approximately 14%. This decrease is a direct
result of fiscal year 1998 and 1999 acquisition activity that reduced temporary
cash investment income (which is a component of media cash flow) and has
required continued investment of managerial and financial resources. Radio
station revenues, excluding revenues from the Missouri stations which are being
sold, were up 5% with media cashflow up 10%.
The Company had a net loss of $1.7 million for the latest quarter compared with
a $1.2 million loss for the same quarter last year. The increased loss is
non-cash in this period and reflects primarily the cost of financing
arrangements entered into in fiscal 1998, the loss on sale of real estate
facilities of a radio station being relocated and the adoption of AcSEC
Statement of Position 98-5 requiring the write off of previously capitalized
start-up costs.
Alan R. Brill, President and Chief Executive Officer, said, "In comparing the
performance of the same properties this quarter with the first quarter last
year, radio station revenues (net of the Missouri stations) increased
approximately 5%, producing an 11% increase in media cashflow disregarding the
effect of cash investment income. This growth in the bottom line is a direct
result of our focus on increasing rate integrity and controlling spending. In
our newspaper operations, comparing the same
<PAGE>
properties quarter-to-quarter and disregarding the change in temporary cash
investment income, the media cash flow in the latest period would have been down
3% on flat revenues. We still face the challenge of bringing the fiscal 1998 and
1999 newspaper acquisitions up to our traditional levels of profitability.
Revenues which were soft as we started into the first quarter have strengthened
significantly and we see improving bottom line results.
"We believe that our long-term strategy is sound as we continue to invest time,
effort and financial resources developing and positioning the Company in its
markets for the future while balancing our sales growth expectations in the
short term. By holding to our course, we will build on a solid basis the
revenues and margins by which we will attain the media cash flow that we expect.
Relocation of many of our facilities which has been on-going will continue,
perhaps into the third quarter. And we are always looking for quality
acquisitions," Mr. Brill concluded.
As permitted by the indenture under which the Company's Senior Notes and
Appreciation Notes were issued, on June 15, 1999 the Company redeemed the
Appreciation Notes for the aggregate sum of $3.0 million.
Brill Media is a diversified media enterprise that currently owns or operates
fifteen radio stations in five markets and 29 publications in a large Michigan
marketplace. All of the capital stock of the Company is owned by the President,
Alan R. Brill.
- Table Follows -
<PAGE>
BRILL MEDIA MANAGEMENT, INC.
HISTORICAL FINANCIAL HIGHLIGHTS
(Dollars in Thousands)
Three Months Ended May 31
Fiscal 2000 Fiscal 1999 % Change
Revenues 11,190 10,605 5.5
Media Cashflow 3,806 3,854 (1.3)
EBITDA 2,513 2,446 2.7
Operating Income 1,773 1,766 0.4
Net Income (1,654) (1,219)
The term Media Cashflow represents EBITDA plus incentive plan expense,
management fees, time brokerage fees paid, acquisition related consulting
expense, income from temporary cash investments and interest income from loans
made by the Company to managed affiliates. As used above Media Cashflow and
EBITDA include the results of unrestricted subsidiaries and therefore differ
from the same terms as defined in the Indenture for the Company's Senior Notes.
The matters discussed in this press release include forward-looking statements.
In addition, when used in this press release, the words "intends to,"
"believes," "anticipates," "expects," and similar expressions are intended to
identify forward-looking statements. Such statements are subject to a number of
risks and uncertainties. Actual results in the future could differ materially
and adversely from those described in the forward-looking statements as a result
of various important factors, including the impact of changes in national and
regional economies, successful integration of acquired radio stations and
newspapers (including achievement of synergies and cost reductions), pricing
fluctuations in local and national advertising, volatility in programming costs,
the availability of suitable acquisitions on acceptable terms and the risk
factors set forth in the Company's Registration Statement filed with the
Securities and Exchange Commission. The Company undertakes no obligation to
publicly release the result of any revision to these forward-looking statements
that may be made to reflect any future events or circumstances.
