<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
-----------------
FOR THE QUARTERLY PERIOD ENDED COMMISSION FILE NUMBER
JUNE 30, 1999 333-59137
TRI-STATE OUTDOOR MEDIA GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
KANSAS 48-1061763
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3416 Highway 41 South
Tifton, GA 31793
(Address of Principal Executive Offices) (Zip Code)
800-732-8261
(Registrant's telephone number, including area code)
-----------------
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file
such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes /X/ No / /
Indicate the number of shares outstanding of each of
the issuer's classes of common stock as of the latest
practicable date. As of June 30, 1999,
there were issued and outstanding 200
shares of the registrant's
Common Stock, par value $10.00 per share.
(1)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE NO.
<S> <C>
Item 1. Financial Statements (unaudited)
Balance Sheets at June 30,
1999 and December 31, 1998................................ 1
Statements of Operations for the
Three Months ended June 30, 1999 and 1998 and Six Months
ended June 30, 1999 and 1998.............................. 2
Statements of Cash Flows for the Six Months
ended June 30, 1999 and 1998 ............................. 3
Notes to the Financial Statements......................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk ......... 10
PART II OTHER INFORMATION
Item 1. Legal Proceedings.................................................. 10
Item 2. Changes in Securities and Use of Proceeds ......................... 10
Item 3. Defaults upon Senior Securities.................................... 10
Item 4. Submission of Matters to a Vote of Security Holders ............... 10
Item 5. Other Information.................................................. 10
Item 6. Exhibits and Reports on Form 8-K................................... 10
SIGNATURES.................................................................. 11
Index to Exhibits .......................................................... 12
</TABLE>
(2)
<PAGE> 3
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRI-STATE OUTDOOR MEDIA GROUP, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---- ----
(unaudited)
<S> <C> <C>
Current Assets
Cash $ 156 $ 73
Restricted securities -- 5,401
Accounts receivable, net of allowance for doubtful
accounts 1999 $312; 1998 $342 3,164 2,710
Supplies 717 465
Prepaid production costs 680 717
Prepaid site leases, current portion 1,678 1,044
Prepaid commissions, current portion 737 662
Other current assets 263 165
--------- ---------
Total current assets 7,395 11,237
--------- ---------
Property and Equipment, net 62,699 60,614
--------- ---------
Other Assets
Intangible assets, net 40,764 42,690
Prepaid site leases and commissions, long-term portion 468 459
Deferred taxes 6,200 6,200
Other 391 296
--------- ---------
47,823 49,645
--------- ---------
$ 117,917 $ 121,496
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIENCY)
Current Liabilities
Current portion of long-term debt $ 7,400 $ 3,402
Accounts payable 867 1,535
Accrued interest 1,519 1,510
Accrued expenses 84 268
Deferred revenue 343 317
Due to SGH Holdings, Inc. 25 25
--------- ---------
Total current liabilities 10,238 7,057
Long-Term Debt,
net of current portion 110,168 112,839
--------- ---------
Total liabilities 120,406 119,896
--------- ---------
Commitments and Contingencies
Stockholder's Equity (Deficiency)
Common stock, par value, $10 per share; authorized 10,000
shares; issued and outstanding, 200 shares 2 2
Paid-in capital 16,166 16,166
Accumulated deficit (18,657) (14,568)
--------- ---------
(2,489) 1,600
--------- ---------
$ 117,917 $ 121,496
========= =========
</TABLE>
See Notes to Financial Statements.
<PAGE> 4
TRI-STATE OUTDOOR MEDIA GROUP, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE OR PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues $ 6,694 $ 5,171 $ 13,082 $ 9,413
-------- -------- -------- --------
Operating expenses:
Direct operating expenses 2,335 1,888 4,574 3,179
General and administrative 1,046 746 2,120 1,466
Depreciation and amortization 2,183 2,246 4,414 4,027
-------- -------- -------- --------
5,564 4,880 11,108 8,672
-------- -------- -------- --------
Operating income 1,130 291 1,974 741
-------- -------- -------- --------
Other income (expense):
Interest expense (3,121) (2,525) (6,186) (4,198)
Other income 36 92 136 92
-------- -------- -------- --------
Total other income (expense) (3,085) (2,433) (6,050) (4,106)
-------- -------- -------- --------
Loss before income tax benefit and extraordinary
loss on early extinguishment of debt (1,955) (2,142) (4,076) (3,365)
Income tax benefit -- 858 -- 1,347
-------- -------- -------- --------
Loss before extraordinary loss on early
extinguishment of debt (1,955) (1,284) (4,076) (2,018)
Extraordinary loss on early extinguishment of
debt -- (2,089) -- (2,089)
-------- -------- -------- --------
Net loss $ (1,955) $ (3,373) $ (4,076) $ (4,107)
======== ======== ======== ========
Basic loss per common share:
Loss before extraordinary loss on early
extinguishment of debt $ (9,775) $ (6,420) $(20,380) $(10,090)
Extraordinary loss on early extinguishment of debt -- 10,445 -- 10,445
-------- -------- -------- --------
Net loss $ (9,775) $(16,865) $(20,380) $(20,535)
======== ======== ======== ========
Weighted common shares outstanding 200 200 200 200
======== ======== ======== ========
</TABLE>
See Notes to Financial Statements.
<PAGE> 5
TRI-STATE OUTDOOR MEDIA GROUP, INC.
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30,
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (4,076) $ (4,107)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 4,414 4,027
Deferred income tax benefit -- (2,740)
Loss on early extinguishment of debt -- 2,089
Accrued interest added to principle -- 834
Accrued interest on pledged securities (104)
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable (454) (901)
Supplies and prepaid production costs (215) 257
Prepaid site leases (359) (327)
Prepaid commissions (360) (153)
Other assets (293) (713)
Increase (decrease) in:
Accounts payable (668) 297
Accrued interest and other accrued expenses (175) 1,149
Deferred revenue 26 137
--------- ---------
Net cash used in operating
activities (2,264) (151)
--------- ---------
INVESTING ACTIVITIES
Purchase of property and equipment (4,255) (2,303)
Proceeds from sale-and-leaseback transaction 970 --
Acquisitions -- (23,093)
Proceeds from sale of pledged securities 5,504 --
Purchase of securities held for investments -- (7,965)
Purchase of pledged securities -- (10,484)
Other 60 --
--------- ---------
Net cash provided by (used in)
investing activities 2,279 (43,845)
--------- ---------
FINANCING ACTIVITIES
Proceeds from issuance of senior subordinated notes -- 100,000
Borrowings under long-term debt agreement -- 22,889
Proceeds from revolver borrowings 1,650 --
Payments on revolver borrowings -- (4,950)
Principal payments on long-term debt (1,293) (59,087)
Debt issuance costs (289) (5,650)
--------- ---------
Net cash provided by
financing activities 68 53,202
--------- ---------
Net increase in cash 83 9,206
CASH:
Beginning 73 132
--------- ---------
Ending $ 156 $ 9,338
========= =========
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
<S> <C> <C>
SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest $ 6,173 $ 3,467
========= =========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Conversion of subordinated debentures to preferred stock $ -- $ 16,140
========= =========
Property and equipment acquired under capital leases $ 970 $ --
========= =========
</TABLE>
See Notes to Financial Statements.
4
<PAGE> 7
Notes to Financial Statements
(Unaudited)
NOTE 1
BASIS OF REPRESENTATION
The accompanying unaudited financial statements of Tri-State Outdoor Media
Group, Inc., (the "Company") have been prepared in conformity with generally
accepted accounting principles and with the instructions for Form 10-Q and Rule
10-01 of Regulation S-X as they apply to interim financial information.
Accordingly, they do not include all of the information and disclosures required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation of financial position
and results of operations have been included. The operating results for the
three and six month periods ended June 30, 1999 are not necessarily indicative
of the results to be expected for the year ending December 31, 1999. Although
the Company believes that the disclosures are adequate to make the information
presented not misleading, these financial statements should be read in
conjunction with the financial statements for the fiscal year ended December 31,
1998 and notes thereto included in the Company's Report on Form 10-K for the
fiscal year ended December 31, 1998 incorporated by reference herein.
NOTE 2
FINANCINGS
The Company entered into an amendment to the original credit agreement
("Credit Agreement") with The First National Bank of Chicago originally dated
September 20, 1998 on March 1, 1999. The amended Credit Agreement consists of a
Term Loan A Facility for $14 million and a Revolving Note C Facility for $4
million ("Revolver") with The First Bank of Chicago. The outstanding balances of
advances (as defined therein) made under Facility A and Facility C are payable
in full on September 30, 2000. Proceeds from the Credit Agreement were used to
finance the acquisition of Western Outdoor. Also, SGH Holdings, Inc.
("Holdings"), the Company's parent, will be required to issue warrants for 5% of
Holdings' common stock if the loan is not repaid by September 30, 1999. The
exercise price of the warrants will be nominal. The credit agreement is
collateralized by a first perfected security interest in all of the assets of
the Company as well as by a pledge from Holdings of its stock in the Company.
An Amended and Restated Loan Agreement ("The Agreement") was executed on
August 12, 1999 which consists of a term loan for $10 million and a revolving
credit of $10 million of which $2 million is restricted for payment of interest.
The Agreement provides for among other things the return of all warrants to the
company and no principle payment until January 1, 2001.
All terms and conditions of The Agreement are effective except the
increase in availability from $16 million to $20 million that is contingent upon
the raising of $4 million in equity. The Company expects a commitment and
funding of the additional equity in the near future.
The Company was required to escrow one year of interest payments with
the net proceeds of the Senior Notes. Following the disbursement of the funds in
the escrow account in May 1999, the Company must begin providing for the payment
of interest from the Company's cash flow or borrowings, if available, beginning
with the November 15, 1999 Senior Notes interest payment in the amount of $5.5
million. Annual interest payments on the Senior Notes are $11.0 million.
Substantially all of the Company's cash flow will have to be devoted to interest
payments on the Senior Notes and to its credit facility. There can be no
assurance that the cash flow will be
5
<PAGE> 8
sufficient for such purpose, or if borrowings are necessary, that the Company
will be able to borrow funds sufficient for its purposes. Failure to make the
interest payments on the Senior Notes of the Credit Agreement would have a
material adverse effect on the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements
concerning, among other things, the Company's expected future revenues,
operations and expenditures, competitors or potential competitors, acquisition
activity, and the regulation of the outdoor advertising industry. These
forward-looking statements are identified by their use of terms and phrases such
as "anticipate," "believe," "could," "estimate," "expect," "intent," "may,"
"plan," "predict," "project," "will" and similar terms and phrases, including
references to assumptions. These statements are contained in certain sections of
this Quarterly Report and in the documents incorporated by reference herein.
These forward-looking statements represent the expectations of the Company's
management as of the filing date of this Report on Form 10-Q. The Company's
actual results could differ materially from those anticipated by the
forward-looking statements due to a number of factors, including (i) risks and
uncertainties relating to leverage; (ii) the need for additional funds; (iii)
the integration of companies acquired by the Company and the Company's ability
to recognize cost savings or operating efficiencies as a result of such
acquisitions; (iv) the continued popularity of outdoor advertising as an
advertising medium; (v) the regulation of the outdoor advertising industry and
(vi) the risks and uncertainties described under the caption "Factors Affecting
Future Operating Results" under Item 7. - Management's Discussion and Analysis
of Financial Condition and Results of Operations set forth in the Company's
Annual Report on Form 10-K for the year ended December 31, 1998 incorporated by
reference herein.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1998
Net revenues. Net revenues increased 29.5% to $6.7 million for the three
months ended June 30, 1999 from $5.2 million for the three months ended June 30,
1998. Most of this increase was the result of the acquisition of Western Outdoor
Advertising Co. ("Western"), completed in September 1998. This acquisition
accounted for approximately $1.1 million of the period-to-period revenue growth.
Direct operating expenses. Direct operating expenses (which include sales, lease
and production expenses) increased 21.1% to $2.3 million for the second quarter
of 1999 from $1.9 million for the comparable period in 1998. Most of this
increase was the result of the Western acquisition, completed in September 1998.
Sales expense decreased as a percentage of net revenues from 9.1% in the second
quarter of 1998 to 8.2% in 1999 due to operating leverage. Lease expense
increased as a percentage of net revenues from 14.1% in the second quarter of
1998 to 15.1% in 1999, primarily due to the addition of lease personnel.
Production expense decreased as a percentage of net revenues from 13.3% in the
second quarter of 1998 to 11.6% in 1999, due a shift in sales mix towards
longer-term contracts.
6
<PAGE> 9
General and administrative expenses. General and administrative expenses
increased by 40.2% to $1.0 million for the quarter ended June 30, 1999 from
$746,000 in 1998, an increase as a percentage of net revenues to 15.6% from
14.4% primarily due to the Western acquisition.
Depreciation and amortization expense. Depreciation and amortization expense
remained flat at $2.2 million for the quarter ended June 30, 1999 from $2.2
million in 1998.
Interest expense. Interest expense increased to $3.1 million for the quarter
ended 1999 from $2.5 million for the comparable period in 1998. This increase
was primarily the result of additional debt incurred in connection with the
financing of the Western acquisition, as well as the issuance of the Senior
Notes (as defined herein) in May 1998.
Income taxes. At December 31, 1998, the Company had net operating loss carry
forwards of approximately $20.3 million for federal and state income tax
purposes, which expire in varying amounts from 2009 through 2018.
During the quarter ended June 30, 1999, the Company recorded a valuation
allowance of $782,000 on deferred tax assets. At June 30,1999 the total
valuation allowance recorded aggregated $3.1 million on deferred tax assets of
$9.3 million to reduce the total to an amount that management believes will more
likely than not be realized. Realization of deferred tax assets is dependent
upon sufficient future taxable income during the period that deductible
temporary differences and carry forwards are expected to be available to reduce
taxable income. If the Company is unable to generate sufficient taxable income
in the future, increases in the valuation allowance may be required through a
charge to income tax expense.
SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO THE SIX MONTHS ENDED JUNE 30,
1998
Net revenues. Net revenues increased 39.0% to $13.1 million for the six
months ended June 30,1999 from $9.4 million for the six months ended June 30,
1998. Most of this increase was the result of the acquisition of Unisign,
completed in March 1998 and Western, completed in September 1998. These
acquisitions accounted for approximately $2.9 million of the period-to-period
revenue growth.
Direct operating expenses. Direct operating expenses (which include sales, lease
and production expenses) increased 43.8% to $4.6 million for the first six
months of 1999 from $3.2 million for the comparable period in 1998. Most of this
increase was the result of the acquisition of Unisign, completed in March 1998
and Western, completed in September 1998. Sales expense increased as a
percentage of net revenues from 7.5% in the first six months of 1998 to 8.3% in
1999 due to an increase in sales personnel from 33 in 1998 to over 50 at the end
of June 1999. Lease expense increased as a percentage of net revenues from 14.8%
in the first six months of 1998 to 15.0% in 1999 primarily due to the addition
of lease personnel. Production expense increased as a percentage of net revenues
from 11.4% in the first six months of 1998 to 11.7% in 1999, primarily due to
higher sign maintenance expense.
General and administrative expenses. General and administrative expenses
increased by 44.6% to $2.1 million for the six months ended June 30, 1999 from
$1.5 million in 1998, an increase as a percentage of net revenues to 16.2% from
15.6% due primarily to the Unisign and Western acquisitions.
Depreciation and amortization expense. Depreciation and amortization expense
increased to $4.4 million for the six months ended June 30, 1999 from $4.0
million in 1998 due primarily to the Unisign and Western acquisitions.
7
<PAGE> 10
Interest expense. Interest expense increased to $6.2 million for the six months
ended 1999 from $4.2 million for the comparable period in 1998. This increase
was primarily the result of additional debt incurred in connection with the
financing of the Unisign and Western acquisitions, as well as the issuance of
the Senior Notes (as defined herein) in May 1998.
Income taxes. At December 31, 1998, the Company had net operating loss carry
forwards of approximately $20.3 million for federal and state income tax
purposes, which expire in varying amounts from 2009 through 2018.
During the six months ended June 30, 1999, the Company recorded a valuation
allowance of $1.6 million on deferred tax assets. At June 30,1999 the total
valuation allowance recorded aggregated $3.1 million on deferred tax assets of
$9.3 million to reduce the total to an amount that management believes will more
likely than not be realized. Realization of deferred tax assets is dependent
upon sufficient future taxable income during the period that deductible
temporary differences and carry forwards are expected to be available to reduce
taxable income. If the Company is unable to generate sufficient taxable income
in the future, increases in the valuation allowance may be required through a
charge to income tax expense.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically satisfied its cash requirements with cash from
operations, revolving credit borrowings and other long-term debt financing and
sales of assets. Its acquisitions have been financed primarily with borrowed
funds.
On May 20, 1998, the Company sold $100 million in aggregate principal amount of
11% Senior Notes (the "Senior Notes"), and received net proceeds, after
underwriting discounts, of $95.3 million. The Company used a portion of the
proceeds of the Senior Notes to repay all borrowings and accrued interest under
its existing credit facility, which totaled $57.4 million, whereupon that
facility was terminated. The Company also used the proceeds of the Senior Notes
to repay the $10.0 million loan, plus $232,000 of accrued interest, from
Holdings. Additionally, in conjunction with the sale of the Senior Notes, $16.1
million of subordinated intercompany promissory notes including accrued interest
of $3.2 million thereon due to Holdings were converted into stockholder's
equity.
The Company, as of June 30,1999, had $14.9 million of borrowings outstanding
under its credit facility. The Company used the proceeds from the credit
facility to pay a portion of the acquisition of Western.
On August 12, 1999, the Credit Agreement was amended to revise certain payment
dates and amounts, financial reporting requirements, restrictions on sale and
leaseback transactions, and financial covenants. The current availability under
the Credit Agreement is $16 million and upon the infusion of $4 million of
equity would be $20 million.
Net cash used in operating activities was ($2.3) million for the first six
months of 1999 from ($151,000) for the first six months of 1998. Net cash
provided by operating activities reflects the Company's net loss adjusted for
non-cash items and net changes in working capital components. The Company had a
working capital deficit of ($2.8) million as of June 30, 1999, compared to
working capital of $4.2 million as of December 31, 1998. Under The Agreement
there is no current portion of long-term debt. Working capital consistent with
The Agreement would have been $3.7 million as of June 30, 1999.
8
<PAGE> 11
The Company was required to escrow one year of interest payments with the net
proceeds of the Senior Notes. The Company must begin providing for the payment
of interest from the Company's cash flow or borrowings, if available, to make
the November 15, 1999 Senior Notes interest payment in the amount of $5.5
million. Annual interest payments on the Senior Notes are $11.0 million.
Substantially all of the Company's cash flow will have to be devoted to interest
payments on the Senior Notes and to its credit facility. There can be no
assurance that the cash flow will be sufficient for such purpose, or if
borrowings are necessary, that the Company will be able to borrow funds
sufficient for its purposes. Failure to make the interest payments on the Senior
Notes of the Credit Agreement would have a material adverse effect on the
Company.
YEAR 2000 ISSUE
Failure of Computer Systems to Recognize Year 2000
Many currently installed computer systems are not capable of
distinguishing 21st century dates from 20th century dates because they were
programmed using two digits rather than four digits to define the applicable
year. As a result, at the turn of this century, computer systems and software
used by many companies and organizations in a wide variety of industries will
experience operating difficulties unless they are adequately modified or
upgraded to process information related to the century change. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
collect revenues or engage in similar normal business activities.
The Company recognizes the need to ensure that its operations will not
be adversely impacted by Year 2000 software failures. The Company therefore,
believes it has identified all significant internal information technology
systems ("IT Systems"). Internal and external resources were utilized to make
the required modifications and test Year 2000 compliance for these IT Systems as
well as non-IT Systems (i.e., telephone, security, etc.). The Company believes
it has achieved Year 2000 compliance readiness for its IT and non-IT Systems.
In addition, the Company has communicated with others with whom it does
significant business, primarily banks and suppliers of electricity, to determine
their Year 2000 compliance readiness and the extent to which the Company is
vulnerable to any third party Year 2000 issues. There can be no guarantee that
the systems of other companies on which the Company relies will be timely
converted, or that a failure to convert by another company would not have a
material adverse effect on the Company.
Based on the results of its review of the Year 2000 issues to date, the
Company does not believe that a contingency plan to handle the Year 2000 problem
is necessary at this time and has not developed such a plan. The Company will,
however, continue to monitor the Year 2000 compliance program and evaluate the
need for a contingency plan to handle the most reasonably likely worst case Year
2000 scenarios which might result in a disruption in service from suppliers in a
few isolated places.
9
<PAGE> 12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the Company's market risk
exposure from that reported in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998 incorporated by reference herein.
PART II-OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
A. Exhibits
27.1 Financial Data Schedule. Filed herewith.
B. No reports on Form 8-K were filed during the quarter ended June
30, 1999.
10
<PAGE> 13
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.
Tri-State Outdoor Media Group, Inc.
August 16, 1999 /s/Sheldon G. Hurst
-------------------
Sheldon G. Hurst
Chief Executive Officer and Director
August 16, 1999 /s/ William G. McLendon
-----------------------
William G. McLendon
Chief Financial Officer, Secretary,
Director and Principal Accounting
Officer
<PAGE> 14
INDEX TO EXHIBITS
EXHIBIT NO.
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------ ----------------------
<S> <C>
3.1 Restated Certificate of Incorporation of the Company certified by the Secretary of State of State
of Kansas (1).......................................................................................
3.2 By-Laws of the Company (1)..........................................................................
4.1 Indenture dated as of May 15, 1998 relating to the Company's 11% Senior Notes due 2008 and the 11%
Senior Series B Notes due 2008 (1)..................................................................
4.2 Form of Global Note (1).............................................................................
5.1 Opinion of St. John & Wayne, L.L.C., General Counsel of the Company (1).............................
10.1 Asset Purchase Agreement, dated as of May 6, 1997, between the Company and Tri-State Systems,
Inc.(1).............................................................................................
10.2 Asset Purchase Agreement, dated as of February 13, 1998, between the Company and Unisign
Corporation, Inc.(1)................................................................................
10.3 Registration Rights Agreement dated as of May 13, 1998 relating to the Company's 11% Senior Notes
due 2008 (1)........................................................................................
10.4 Pledge Agreement dated as of May 15, 1998 relating to the Company's 11% Senior Notes due 2008 (1)...
10.5 Tax Sharing Agreement dated as of May 20, 1998 relating to SGH Holdings, Inc. and the Company (1)...
10.6 Second Amended and Restated Stockholders Agreement, dated as of February 27, 1998 (1)...............
10.7 Anti-Dilution Agreement, dated as of February 29, 1998 (1)..........................................
10.8 Credit Agreement dated as of May 20, 1998 between the Company and The First National Bank of
Chicago (1).........................................................................................
10.9 Asset Purchase Agreement, dated as of September 4, 1998, by and between Tri-State Outdoor Media
Group, Inc. and Western Outdoor Advertising Co.(1)..................................................
10.10 Credit Agreement among Tri-State Outdoor Media Group, Inc., the Lending Institutions Party Thereto,
as Lenders and The First National Bank of Chicago, as Agent, dated as of September 18, 1998 (1).....
10.11 Asset Purchase Agreement dated as of June 12, 1998 by and between Tri-State Outdoor Media Group,
Inc. and John R. Leslie, Sr., Trading as Leslie Outdoor Advertising (2).............................
10.12 Asset Purchase Agreement dated as of July 23, 1998 by and between Tri-State Outdoor Media Group,
Inc. and Boone Company, Inc (2)....................................................................
10.13 First Amendment to Credit Agreement dated as of March 1, 1999 (2). .................................
10.14 Amendment to Fee Letter dated as of March 1, 1999 (2)...............................................
12.0 Computation of Ratio of Earnings to Fixed Charges (2). .............................................
25.1 Statement of Eligibility of Trustee on Form T-1 of IBJ Schroder Bank & Trust Company (1)............
25.2 Form of Letter of Transmittal (1)...................................................................
25.3 Form of Notice of Guaranteed Delivery (1)...........................................................
25.4 Form of Exchange Agency Agreement between the Company and IBJ Schroder Bank & Trust Company, as
exchange agent (1)..................................................................................
27.1 Financial Data Schedule. Filed herewith.............................................................
</TABLE>
- ----------------------------
(1) Incorporated by reference in the Company's registration statement on Form
S-4 (Registration Number 333-59137).
(2) Incorporated by reference in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998 (Registration Number 333-59137).
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 156
<SECURITIES> 0
<RECEIVABLES> 3,164
<ALLOWANCES> 312
<INVENTORY> 717
<CURRENT-ASSETS> 7,395
<PP&E> 77,356
<DEPRECIATION> 14,657
<TOTAL-ASSETS> 117,917
<CURRENT-LIABILITIES> 10,238
<BONDS> 110,168
0
0
<COMMON> 2
<OTHER-SE> (2,491)
<TOTAL-LIABILITY-AND-EQUITY> 117,917
<SALES> 12,994
<TOTAL-REVENUES> 13,082
<CGS> 0
<TOTAL-COSTS> 11,108
<OTHER-EXPENSES> (136)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,186
<INCOME-PRETAX> (4,076)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,076)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,076)
<EPS-BASIC> (20.4)
<EPS-DILUTED> (20.4)
</TABLE>
