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 AUGUST 31, 2000
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 as
of August 31, 2000 and February 29, 2000 3
Consolidated Statements of Operations and
Members' Deficiency for the Three and Six Months
Ended August 31, 2000 and 1999 4
Consolidated Statements of Cash Flows for the
Six Months Ended August 31, 2000 and 1999 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>
August 31 February 29
2000 2000
----------------------------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 10,654,037 $ 17,068,088
Accounts receivable, net 6,330,483 5,225,803
Interest receivable on notes from managed affiliates 613,333 --
Inventories 438,570 563,493
Other current assets 750,571 511,054
----------------------------------
Total current assets 18,786,994 23,368,438
Notes receivable from managed affiliates 20,000,000 20,000,000
Property and equipment 29,056,410 22,906,426
Less: Accumulated depreciation 10,290,909 9,427,644
----------------------------------
Net property and equipment 18,765,501 13,478,782
Goodwill and FCC licenses, net 15,288,019 13,904,570
Covenants not to compete, net 2,631,509 3,127,752
Other assets, net 5,365,723 6,133,957
Amounts due from related parties 5,751,104 5,546,334
----------------------------------
$ 86,588,850 $ 85,559,833
==================================
Liabilities and members' deficiency
Current liabilities:
Amounts payable to related parties $ 1,116,525 $ 1,658,489
Accounts payable 1,540,030 1,111,237
Accrued payroll and related expenses 1,203,323 936,876
Accrued interest 2,780,275 2,759,999
Other accrued expenses 174,307 262,271
Current maturities of long-term obligations 1,355,657 1,271,812
----------------------------------
Total current liabilities 8,170,117 8,000,684
Long-term notes and other obligations 136,079,179 131,332,287
Members' deficiency (57,660,446) (53,773,138)
----------------------------------
$ 86,588,850 $ 85,559,833
==================================
</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 August 31 Six Months Ended August 31
2000 1999 2000 1999
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 11,511,790 $ 10,838,580 $ 22,863,817 $ 22,028,691
Operating expenses:
Operating departments 8,683,529 7,797,003 16,892,155 15,765,624
Management fees 698,724 676,816 1,417,942 1,380,509
Time brokerage agreement fees -- 3,000 -- 3,000
Consulting -- 4,998 -- 9,996
Depreciation 453,293 369,576 895,731 737,611
Amortization 354,996 348,257 702,408 720,066
------------------------------------------------------------------------
10,190,542 9,199,650 19,908,236 18,616,806
------------------------------------------------------------------------
Operating income 1,321,248 1,638,930 2,955,581 3,411,885
Other income (expense):
Interest - managed affiliates 616,403 569,441 1,226,667 1,129,719
Interest - affiliates, net 43,279 50,886 100,748 98,719
Interest - other, net (3,821,767) (3,478,357) (7,535,404) (6,994,703)
Amortization of deferred financing costs (228,408) (149,949) (446,614) (302,812)
Loss on sale of assets, net -- -- (17,296) (125,734)
Other, net (39,539) (43,978) (80,113) (87,283)
------------------------------------------------------------------------
(3,430,032) (3,051,957) (6,752,012) (6,282,094)
------------------------------------------------------------------------
Loss before income taxes and cumulative
effect of change in accounting (2,108,784) (1,413,027) (3,796,431) (2,870,209)
principle
Income tax provision 36,874 44,783 94,877 90,961
------------------------------------------------------------------------
Loss before cumulative effect of change in
accounting principle (2,145,658) (1,457,810) (3,891,308) (2,961,170)
Cumulative effect of change in accounting
principle -- -- -- 150,979
------------------------------------------------------------------------
Net loss (2,145,658) (1,457,810) (3,891,308) (3,112,149)
Members' deficiency, beginning of period (55,516,788) (55,750,941) (53,773,138) (54,096,602)
Capital contributions 2,000 3,000,000 4,000 3,000,000
Dividends -- -- -- --
------------------------------------------------------------------------
Members' deficiency, end of period $(57,660,446) $(54,208,751) $(57,660,446) $(54,208,751)
========================================================================
</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>
Six Months Ended August 31
2000 1999
-----------------------------------
<S> <C> <C>
Operating activities
Net loss $ (3,891,308) $ (3,112,149)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and amortization 1,598,139 1,457,677
Amortization of deferred financing costs and original issue
discount 588,560 2,661,502
Management fees accrual (590,638) 461,136
Related parties interest accrual (772,418) (133,222)
Loss on sale of assets, net 17,296 125,734
Cumulative effect of change in accounting principle -- 150,979
Changes in operating assets and liabilities, net of effect of
acquisition:
Accounts receivable (1,104,680) (731,916)
Other current assets (114,594) (163,402)
Accounts payable 428,810 (144,798)
Other accrued expenses 198,759 348,697
-----------------------------------
Net cash provided by (used in) operating activities (3,642,074) 920,238
Investing activities
Purchase of property and equipment (965,648) (583,356)
Purchase of newspaper, net of cash required -- (61,235)
Proceeds from sale of assets 27,261 115,587
Loans to managed affiliates -- (827,998)
Increase in other assets (1,231,487) (26,427)
-----------------------------------
Net cash used in investing activities (2,169,874) (1,383,429)
Financing Activities
Increase (decrease) in amounts due to related parties 915 179,909
Payment of deferred financing costs (36,503) (605,439)
Principal payments on long-term obligations (664,881) (3,558,759)
Proceeds from long-term borrowings 94,366 16,249
Capital contributions 4,000 3,000,000
-----------------------------------
Net cash used in financing activities (602,103) (968,040)
-----------------------------------
Net decrease in cash and cash equivalents (6,414,051) (1,431,231)
Cash and cash equivalents at beginning of period 17,068,088 2,740,244
-----------------------------------
Cash and cash equivalents at end of period $ 10,654,037 $ 1,309,013
===================================
</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 both the three and six month periods ended August 31, 2000 are not
necessarily indicative of the results that may be expected for the year ending
February 28, 2001. 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 29, 2000.
2. Dispositions and Acquisitions
In April 1999, the Company acquired a real estate magazine that has monthly
distribution of approximately 20,000 households in the northwestern portion of
the lower peninsula of Michigan (the 2000 News acquisition). Total consideration
was $217,000, which consisted of $55,000 cash and a secured seller note valued
at $162,000. The Company also entered into a six-year covenant not to compete
valued at $54,000.
In October 1999, the Company submitted the winning bid of $1,561,000 in
accordance with the FCC rules for auctioning broadcast spectrum for a new FM
radio broadcast signal in Wellington, Colorado. The Company paid the FCC an
initial deposit of $312,000 in October 1999 with the balance due after final FCC
authorization. In April 2000, the Company received FCC authorization and
licensing of the station was completed and the remaining amount of $1,249,000
was paid. The Company expects to begin broadcasting in calendar 2001.
In January 2000, the Company acquired radio station KUSZ-FM located in the
Duluth, Minnesota (the 2000 Radio acquisition) market for $1,000,000 in cash and
a five-year covenant not to compete valued at $156,000. The Company had been
operating the radio station pursuant to a Time Brokerage Agreement (TBA) since
August 1999.
In February 2000, the Company sold the operating assets of its Missouri
radio stations (collectively, the Missouri Properties), which had been operated
pursuant to TBAs by the
6
<PAGE>
prospective buyer since November 1997. The sales price was $7,419,000 and
resulted in a pretax gain of $6,175,000, net of related expenses.
3. Long Term Debt
Long-term obligations include the Company's 12% senior notes due 2007 (the
Senior Notes). The Senior Notes are senior unsecured obligations of BMC and a
subsidiary of BMC, Brill Media Management, Inc. (Media). The Senior Notes are
unconditionally guaranteed, fully, jointly, and severally, by each of the direct
and indirect subsidiaries of BMC, 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
concerning the subsidiaries have not been presented because management has
determined that they would not be material to investors.
Media has minimal assets and liabilities ($100 cash and $100 capital at
August 31, 2000 and February 29, 2000) and no income or expenses since its
formation in October 1997.
In October 1999, as permitted under the Indenture governing the Senior
Notes (the Indenture), the Company borrowed $15 million under a secured credit
facility with a senior lender (the Senior Secured Facility) which matures
October 2004. The facility bears interest, payable monthly, at the prime rate
plus 1% (effectively 10.5% at August 31, 2000) with a minimum interest rate of
8% per annum. The facility restricts the Company from essentially the same
defined limitations as contained in the Indenture and includes certain financial
covenants with respect to earnings and asset coverage. The facility is secured
by substantially all assets of the restricted subsidiaries, as defined in the
Indenture.
4. Affiliate Transactions
During the first six months of fiscal 2001, the Company entered into
capital leases for leasehold improvements and equipment totaling $5,100,000 with
related companies.
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, $151,000 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 six month periods ended August 31 regarding the Company's
major operating segments is presented in the following table:
<TABLE>
<CAPTION>
Three Months Ended August 31 Six Months Ended August 31
2000 1999 2000 1999
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Radio $ 4,236,734 $ 4,022,130 $ 8,291,894 $ 8,099,891
News 7,275,056 6,816,450 14,571,923 13,928,800
--------------------------------------------------------------------
Total 11,511,790 10,838,580 22,863,817 22,028,691
Operating income:
Radio 650,100 716,354 1,341,184 1,495,010
News 671,148 922,576 1,614,397 1,916,875
--------------------------------------------------------------------
Total 1,321,248 1,638,930 2,955,581 3,411,885
Total assets:
Radio 51,931,153 42,332,794 51,931,153 42,332,794
News 34,657,697 24,488,972 34,657,697 24,488,972
--------------------------------------------------------------------
Total 86,588,850 66,821,766 86,588,850 66,821,766
Depreciation and amortization expense:
Radio 381,695 358,761 770,790 747,143
News 426,594 359,027 827,349 710,534
--------------------------------------------------------------------
Total 808,289 717,833 1,598,139 1,457,677
Capital expenditures:
Radio 162,434 46,131 359,137 172,827
News 158,524 224,018 606,511 410,529
--------------------------------------------------------------------
Total 320,958 270,149 965,648 583,356
</TABLE>
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 fourteen radio stations
(the Stations) serving four markets located in Pennsylvania, Kentucky/Indiana,
Colorado and Minnesota/Wisconsin. 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
8
<PAGE>
the central and northern portions of the lower peninsula of Michigan. This
operation offers a three-edition daily newspaper, twenty-three weekly
publications, four monthly real estate guides, web offset printing operations
for Newspapers' publications and outside customers and private distribution
systems. Mr. 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 August 31, 2000 Compared to Three Months Ended August 31,
1999
Revenues for the three months ended August 31, 2000 were $11.5 million, a
$.7 million or 6.2% increase from the prior comparative period. For the current
quarter, Stations' revenues represented $4.2 million and Newspapers' revenues
represented $7.3 million.
Stations' revenues, excluding the Missouri Properties, increased $.4
million or 10% from the prior comparative period. This increase is due to
continuing operations growth within each market.
The Newspapers' revenues increased $.5 million or 6.7% from the prior
comparative period due to growth in continuing operations.
Operating expenses for the three months ended August 31, 2000 were $10.2
million, a $1 million or 10.8% increase from the prior comparative period.
The Stations' operating expenses, excluding the Missouri Properties,
increased $.4 million primarily as a result of compensation and employee
related expenses.
The Newspapers' operating expenses increased $.7 million or 12% from the
prior comparative period, primarily from additional compensation and
newsprint costs.
As a result of the above, operating income for the three months ended
August 31, 2000 was $1.3 million, a decrease of $.3 million or 19.4% from the
prior comparative period.
9
<PAGE>
Other expense for the three months ended August 31, 2000 was $3.4 million,
an increase of $.4 million or 12.4% over the prior comparative period, primarily
due to increased interest expense.
Six Months Ended August 31, 2000 Compared to Six Months Ended August 31, 1999
Revenues for the six months ended August 31, 2000 were $22.9 million, a $.8
million or 3.8% increase from the prior comparative period. For the current
fiscal year, Stations' revenues represented $8.3 million and Newspapers'
revenues represented $14.6 million.
The Stations' revenues, excluding the Missouri Properties, grew $.5 million
or 7.0% from the prior comparative period due to continued operations
growth.
The Newspapers' revenues increased $.6 million or 4.6% from the prior
comparative period due to continued growth in operations.
Operating expenses for the six months ended August 31, 2000 were $19.9
million, a $1.3 million or 6.9% increase from the prior comparative period.
The Stations' operating expenses, excluding the Missouri Properties,
increased $.5 million from the prior comparative period primarily as a
result of compensation and employee related expenses.
The Newpapers' operating expenses increased $.9 million or 7.9% from the
prior comparative period. This increase results primarily from additional
compensation and newsprint costs.
As a result of the above, operating income for the six months ended August
31, 2000 was $3.0 million, a decrease of $.5 million or 13.4% from the prior
comparative period.
Other expense for the six months ended August 31, 2000 was $6.8 million of
net expense, an increase of $.5 million or 7.5% over the prior comparative
period, primarily due to increased interest expense.
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.
10
<PAGE>
Net cash used in operating activities was $3.6 million for the six months
ended August 31, 2000. The increase of $4.6 million from the comparative fiscal
2000 period is primarily attributable to reduced earnings and increased payments
of interest and management fees.
Net cash used in investing activities was $2.2 million for the six months
ended August 31, 2000. The cash used in investing activities for the current
reporting period is primarily attributable to the final payment to the FCC for
the Wellington, Colorado license and purchase of property and equipment. The
increase in cash used in investing activities from the prior comparative
reporting period was primarily related to the final payment to the FCC for the
Wellington, Colorado license and purchase of property and equipment offset by a
decease in loans to Managed Affiliates
Net cash used in financing activities was $0.6 million for the six months
ended August 31, 2000. The cash used in financing activities for the current
reporting period is attributable primarily to payments of long-term obligations.
The decrease of $0.4 million in cash used in financing activities from the prior
comparative reporting period is related primarily to the decrease in deferred
financing costs, net of decreased borrowings from related parties.
Media Cashflow was $7.6 million and $7.4 million for the six-month periods
ended August 31, 2000 and 1999, 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
represents operating income plus depreciation and amortization expense. 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.
Although Media Cashflow is not a measure of performance calculated in
accordance with GAAP, management believes it is useful in evaluating the Company
and measurements of cashflow are 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, the term Media
Cashflow 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 $20 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 Company is evaluating
various options relating to the maturity of the notes receivable from Managed
Affiliates, including the possibility of an extension. Accordingly, the Company
has presented these notes as long-
11
<PAGE>
term on the accompanying consolidated statement of financial position. The
Indenture generally limits the Company to $20 million of outstanding loans to
Managed Affiliates. For the six-month period ended August 31, 2000, the Managed
Affiliates reported combined revenues of $2.2 million, net loss of $1.6 million
and Media Cashflow of $0.4 million.
The Senior Notes require semi-annual cash interest payments on each June 15
and December 15 of $6.3 million until maturity.
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.
The Indenture limits the Company's ability to incur additional
indebtedness. 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 and cash on hand. 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.
12
<PAGE>
During the six month period ended August 31, 2000, the Company has expended
$1 million to purchase property and equipment and projects approximately $1.8
million will be required during the remainder of fiscal 2001. The increase in
projected capital expenditures for fiscal 2001 is primarily due to an increase
in the anticipated construction of transmission facilities for our recently
acquired license in Colorado, the purchase of equipment for the new central
Michigan facility, as well as the opportunity to purchase previously leased
office buildings.
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.
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 August 31, 2000, the Company has debt outstanding of
approximately $137.4 million. Senior Notes with a carrying value of $103.3
million have an estimated fair value of
13
<PAGE>
approximately $65.1 million. The fair market value of the Company's remaining
debt of $34.1 million approximates its carrying value.
Fixed interest rate debt totals approximately $120.8 million as of August
31, 2000 and includes: the Senior Notes which bear cash interest, payable
semiannually, at a rate of 12% until maturity on December 15, 2007; and other
debt, the majority of which have stated rates of 7% to 8%. The remainder of the
debt totaling $16.6 million, or 12.1% of the total, is variable rate debt. The
majority of such debt is the Senior Secured Facility, which currently bears
interest at 10.5% (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 29, 2000).
At August 31, 2000 long-term debt matures as follows:
<TABLE>
<CAPTION>
(in Millions)
-----------------------------------------------------------------------------------------------------------------
Fiscal Year 2001 2002 2003 2004 2005 Thereafter Total
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Senior Notes, net
of unamortized
discount of $1.71 $ -- $ -- $ -- $ -- $ -- $103.29 $103.29
Senior Secured
Facility -- -- -- -- 15.00 -- 15.00
Other 1.36 1.78 1.99 4.02 1.97 8.02 19.14
-------------------------------------------------------------------------------
$ 1.36 $ 1.78 $ 1.99 $ 4.02 $ 16.97 $ 111.3 $137.43
-------------------------------------------------------------------------------
</TABLE>
The primary difference from the long-term maturities at August 31, 1999 was
the addition of the Senior Secured Facility in October 1999.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following exhibits are 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
October 12, 2000 By /s/ Alan R. Brill
----------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
October 12, 2000 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
16
