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 NOVEMBER 30, 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
November 30, 2000 and February 29, 2000 3
Consolidated Statements of Operations and
Members' Deficiency for the Three and Nine Months
Ended November 30, 2000 and 1999 4
Consolidated Statements of Cash Flows for the
Nine Months Ended November 30, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
2 MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 9
3 QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK 14
II 6 EXHIBITS AND REPORTS ON
FORM 8-K 15
2
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
Brill Media Company, LLC
(A Limited Liability Company)
Consolidated Statements of Financial Position
<TABLE>
<CAPTION>
November 30 February 29
2000 2000
----------------------------------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 12,800,383 $ 17,100,867
Accounts receivable, net 6,778,334 5,505,522
Inventories 497,718 563,493
Other current assets 923,280 532,992
----------------------------------------
Total current assets 20,999,715 23,702,874
Notes receivable from managed affiliates 7,323,167 7,703,166
Property and equipment 31,367,484 24,826,645
Less: Accumulated depreciation 11,138,080 9,714,759
----------------------------------------
Net property and equipment 20,229,404 15,111,886
Goodwill and FCC licenses, net 20,937,616 19,790,361
Covenants not to compete, net 2,383,392 3,127,752
Other assets, net 5,096,713 6,135,344
Amounts due from related parties 4,715,346 5,546,334
----------------------------------------
$ 81,685,353 $ 81,117,717
========================================
Liabilities and members' deficiency
Current liabilities:
Amounts payable to related parties $ 2,524,131 $ 2,123,751
Accounts payable 1,408,437 1,149,057
Accrued payroll and related expenses 1,181,860 977,942
Accrued interest 5,925,309 2,759,999
Other accrued expenses 196,250 262,271
Current maturities of long-term obligations 1,182,606 1,275,823
----------------------------------------
Total current liabilities 12,418,593 8,548,843
Long-term notes and other obligations 136,261,811 131,338,981
Members' deficiency (66,995,051) (58,770,107)
----------------------------------------
$ 81,685,353 $ 81,117,717
========================================
</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 November 30 Nine Months Ended November 30
2000 1999 2000 1999
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 11,889,006 $ 11,558,781 $ 35,621,586 $ 34,735,430
Operating expenses:
Operating departments 9,328,759 8,920,444 27,046,437 25,562,997
Management fees 756,181 756,783 2,262,437 2,247,371
Time brokerage agreement fees -- 9,000 -- 12,000
Consulting -- 4,998 -- 14,994
Depreciation 521,127 465,305 1,496,066 1,258,260
Amortization 386,905 389,495 1,168,503 1,188,751
---------------------------------------------------------------------
10,992,972 10,546,025 31,973,443 30,284,373
---------------------------------------------------------------------
Operating income 896,034 1,012,756 3,648,143 4,451,057
Other income (expense):
Interest - managed affiliates 228,993 223,820 698,929 659,934
Interest - affiliates, net (78,572) 80,541 12,671 179,260
Interest - other, net (3,953,783) (3,624,346) (11,508,000) (10,619,965)
Amortization of deferred financing costs (238,047) (611,859) (684,661) (914,671)
Gain (loss) on sale of assets, net (2,134) 3,357 (132,971) (122,377)
Other, net (42,118) (36,152) (122,231) (123,435)
---------------------------------------------------------------------
(4,085,661) (3,964,639) (11,736,263) (10,941,254)
---------------------------------------------------------------------
Loss before income taxes and cumulative
effect of change in accounting principle (3,189,627) (2,951,883) (8,088,120) (6,490,197)
Income tax provision 49,046 55,750 143,923 146,711
---------------------------------------------------------------------
Loss before cumulative effect of change in
accounting principle (3,238,673) (3,007,633) (8,232,043) (6,636,908)
Cumulative effect of change in accounting
principle -- -- -- 164,808
---------------------------------------------------------------------
Net loss (3,238,673) (3,007,633) (8,232,043) (6,801,716)
Members' deficiency, beginning of period (63,759,477) (58,217,789) (58,770,107) (57,423,706)
Capital contributions 3,099 -- 7,099 3,000,000
---------------------------------------------------------------------
Members' deficiency, end of period $(66,995,051) $(61,225,422) $(66,995,051) $(61,225,422)
=====================================================================
</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>
Nine Months Ended November 30
2000 1999
------------------------------------
<S> <C> <C>
Operating activities
Net loss $ (8,232,043) $ (6,801,716)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and amortization 2,664,569 2,447,011
Amortization of deferred financing costs and original issue 896,948 4,363,136
discount
Management fees accrual 243,724 714,949
Related parties interest accrual (166,587) (176,923)
Loss on sale of assets, net 132,971 122,377
Cumulative effect of change in accounting principle -- 164,808
Changes in operating assets and liabilities, net of effect of
acquisitions:
Accounts receivable (1,272,812) (942,890)
Inventories and other current assets (324,513) (290,433)
Accounts payable 259,380 47,915
Other accrued expenses 3,303,207 2,547,305
------------------------------------
Net cash provided by (used in) operating activities (2,495,156) 2,195,539
Investing activities
Purchase of property and equipment (1,380,822) (977,595)
Purchase of newspaper, net of cash acquired -- (55,035)
Proceeds from sale of assets 248,396 145,870
(Loans to) repayment from managed affiliates 379,999 (1,291,184)
(Loans to) repayment from related parties 1,054,000 (1,357,000)
Increase in other assets (1,217,429) (411,090)
------------------------------------
Net cash used in investing activities (915,856) (3,946,034)
Financing activities
Increase in amounts due to related parties 98,673 165,031
Payment of deferred financing costs -- (1,364,268)
Principal payments on long-term obligations (1,146,937) (5,232,208)
Proceeds from long-term borrowings 151,693 16,448,202
Capital contributions 7,099 3,000,000
------------------------------------
Net cash provided by (used in) financing activities (889,472) 13,016,757
------------------------------------
Net increase (decrease) in cash and cash equivalents (4,300,484) 11,266,262
Cash and cash equivalents at beginning of period 17,100,867 2,816,441
------------------------------------
Cash and cash equivalents at end of period $ 12,800,383 $ 14,082,703
====================================
</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 nine month periods ended November 30, 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
On November 17, 2000, certain wholly-owned subsidiaries of the Company paid
$1,099 in cash to acquire 100% of the membership interests of TSB IV, LLC (T4L),
a Virginia limited liability company, pursuant to an Agreement for Transfer of
Membership Interest.
Simultaneously, Mr. Brill made a capital contribution of $1,099 in cash to
the Company.
Prior to the transaction, T4L had been a "managed affiliate" of the Company
as described in Note 9 to the consolidated financial statements included in the
Annual Report on Form 10-K of the Company for the fiscal year ended February 29,
2000 and was indirectly owned by Mr. Brill.
T4L assets constituted cash, accounts receivable, other current assets,
broadcasting equipment and other assets as well as intangibles used in the radio
broadcasting operations which will continue to be utilized by the Company for
such purposes. In addition, T4L liabilities totaled approximately $14 million at
November 17, 2000 and included accounts payable, other accrued expenses, a
promissory note payable to the Company, as well as other purchase money and
capital lease obligations including a capitalized lease to a related party.
6
<PAGE>
The consolidated financial statements give retroactive effect to the
acquisition of T4L, which was accounted for similar to a pooling-of-interests
due to the related party nature of the transaction. Accordingly, the net assets
acquired from T4L were recorded at T4L's book value and the results of
operations of the Company include the historical results of operations of T4L.
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 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
November 30, 2000 and February 29, 2000) and no income or expenses since its
formation in October 1997.
7
<PAGE>
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 November 30, 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 nine months of fiscal 2001, the Company entered into
capital leases for leasehold improvements and equipment totaling $5,362,000 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, $165,000 of previously capitalized start-up costs as a
cumulative effect of change in accounting principle.
8
<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 and nine-month periods ended November 30, regarding
the Company's major operating segments is presented in the following table:
<TABLE>
<CAPTION>
Three Months Ended November 30 Nine Months Ended November 30
2000 1999 2000 1999
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Radio $ 4,633,138 $ 4,621,010 $13,793,795 $13,868,859
News 7,255,868 6,937,771 21,827,791 20,866,571
-----------------------------------------------------------------------
Total 11,889,006 11,558,781 35,621,586 34,735,430
Operating income:
Radio 370,456 301,427 1,508,168 1,822,853
News 525,578 711,329 2,139,975 2,628,204
-----------------------------------------------------------------------
Total 896,034 1,012,756 3,648,143 4,451,057
Total assets:
Radio 48,489,096 49,496,949 48,489,096 49,496,949
News 33,196,257 31,620,768 33,196,257 31,620,768
-----------------------------------------------------------------------
Total 81,685,353 81,117,717 81,685,353 81,117,717
Depreciation and amortization expense:
Radio 462,249 451,057 1,391,437 1,332,733
News 445,783 403,743 1,273,132 1,114,278
-----------------------------------------------------------------------
Total 908,032 854,800 2,664,569 2,447,011
Capital expenditures:
Radio 125,074 176,224 484,211 349,051
News 290,100 218,015 896,611 628,544
-----------------------------------------------------------------------
Total 415,174 394,239 1,380,822 977,595
</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
9
<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 and pending
acquisitions and dispositions. These activities are identified in the notes to
the audited and unaudited consolidated financial statements of the Company.
Three Months Ended November 30, 2000 Compared to Three Months Ended November 30,
1999
Revenues for the three months ended November 30, 2000 were $11.9 million, a
$.3 million or 2.9% increase from the prior comparative period. For the current
quarter, Stations' revenues represented $4.6 million and Newspapers' revenues
represented $7.3 million.
Stations' revenues, excluding the Missouri Properties, increased 4.0% from
the prior comparative period. This increase is due to continuing operations
growth within each market.
The Newspapers' revenues increased $.3 million or 4.6% from the prior
comparative period due to growth in continuing operations.
Operating expenses for the three months ended November 30, 2000 were $11.0
million, a $.5 million or 4.2% increase from the prior comparative period.
The Stations' operating expenses, excluding the Missouri Properties,
increased .5% primarily as a result of closer monitoring of expenditures.
The Newspapers' operating expenses increased $.5 million or 8.1% 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
November 30, 2000 was $.9 million, a decrease of $.1 million or 11.6% from the
prior comparative period.
10
<PAGE>
Other expense for the three months ended November 30, 2000 was $4.1
million, an increase of $.1 million or 3.1% over the prior comparative period,
primarily due to increased interest expense.
Nine Months Ended November 30, 2000 Compared to Nine Months Ended November 30,
1999
Revenues for the nine months ended November 30, 2000 were $35.6 million, a
$.9 million or 2.6% increase from the prior comparative period. For the current
fiscal year, Stations' revenues represented $13.8 million and Newspapers'
revenues represented $21.8 million.
The Stations' revenues, excluding the Missouri Properties, grew 3.3% from
the prior comparative period due to continued operations growth.
The Newspapers' revenues increased $1.0 million or 4.6% from the prior
comparative period due to continued growth in operations.
Operating expenses for the nine months ended November 30, 2000 were $32.0
million, a $1.7 million or 5.6% 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 administrative related expenses.
The Newspapers' operating expenses increased $1.5 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 nine months ended
November 30, 2000 was $3.6 million, a decrease of $.8 million or 18% from the
prior comparative period.
Other expense for the nine months ended November 30, 2000 was $11.8 million
of net expense, an increase of $.8 million or 7.4% 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.
11
<PAGE>
Net cash used in operating activities was $2.5 million for the nine months
ended November 30, 2000. The increase of $4.7 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 $.9 million for the nine months
ended November 30, 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 offset
by the repayment of a related party loan. The decrease in cash used in investing
activities from the prior comparative reporting period was primarily related to
the decease in loans to Managed Affiliates and related parties.
Net cash used in financing activities was $.9 million for the nine months
ended November 30, 2000. The cash used in financing activities for the current
reporting period is attributable primarily to payments of long-term obligations.
The decrease of $13.9 million in cash provided by financing activities from the
prior comparative reporting period is related primarily to the decrease in
long-term borrowings and capital contributions.
Media Cashflow was $9.3 million and $9.8 million for the nine-month periods
ended November 30, 2000 and 1999, respectively. Media Cashflow represents EBITDA
plus incentive plan expense, management fees, time brokerage fees paid,
acquisition related consulting expense, 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.
In November 2000, a previous Managed Affiliate Note due January 1, 2001 was
replaced when the Company issued a new Managed Affiliate Note due November 15,
2003. At November 30, 2000, loans to Managed Affiliates approximated $7.3
million, are unsecured and bear interest at the rate of 12% per annum. For the
nine-month period
12
<PAGE>
ended November 30, 2000, the Managed Affiliates reported revenues of $1.9
million, net loss of $.8 million and Media Cashflow of $.5 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.
During the nine month period ended November 30, 2000, the Company has
expended $1.4 million to purchase property and equipment and projects
approximately $1 million will be required during the remainder of fiscal 2001.
The increase in projected
13
<PAGE>
capital expenditures for fiscal 2001 is primarily due to 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 November 30, 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 approximately $57.8 million. The fair
market value of the Company's remaining debt of $34.1 million approximates its
carrying value.
14
<PAGE>
Fixed interest rate debt totals approximately $121.0 million as of November
30, 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 $16.4 million, or 11.9% 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 November 30, 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 $1.65 $ -- $ -- $ -- $ -- $ -- $103.35 $103.35
Senior Secured
Facility -- -- -- -- 15.00 -- 15.00
Other 1.18 1.78 1.99 4.02 1.97 8.15 19.09
-------------------------------------------------------------------------------
$ 1.18 $ 1.78 $ 1.99 $ 4.02 $ 16.97 $ 111.5 $137.44
-------------------------------------------------------------------------------
</TABLE>
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following exhibits are furnished with this report:
Exhibit 27 -- Financial Data Schedule
15
<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
January 16, 2001 By /s/ Alan R. Brill
-------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT AND CHIEF
EXECUTIVE OFFICER
January 16, 2001 By /s/ Donald C. TenBarge
-------------------------------
Donald C. TenBarge
VICE PRESIDENT, CHIEF FINANCIAL
OFFICER, SECRETARY AND TREASURER
(PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER)
16
