<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1996
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 1-6383
MEDIA GENERAL, INC.
(Exact name of registrant as specified in its charter)
Virginia 54-0850433
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 E. Grace St., Richmond, VA 23219
(Address of principal executive offices) (Zip Code)
(804) 649-6000
(Registrant's telephone number, including area code)
N/A
---
(Former name, former address and former fiscal year,
if changed since last report.)
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 July 31, 1996.
Class A Common shares: 25,925,568
Class B Common shares: 556,574
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MEDIA GENERAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(000's except shares)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,995 $ 3,367
Accounts receivable - net 77,508 76,532
Inventories 22,319 20,380
Other 28,651 25,812
----------- -----------
Total current assets 132,473 126,091
----------- -----------
Investments in unconsolidated affiliates 115,636 102,284
Other assets 38,009 42,718
Property, plant and equipment - net 480,958 498,132
Excess of cost of businesses acquired over
equity in net assets - net 245,705 247,518
----------- -----------
$1,012,781 $1,016,743
=========== ===========
</TABLE>
See accompanying notes.
<PAGE> 3
MEDIA GENERAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(000's except shares)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 23,326 $ 25,324
Accrued expenses and other liabilities 75,319 72,764
Income taxes payable 4,406 5,065
----------- -----------
Total current liabilities 103,051 103,153
----------- -----------
Long-term debt 294,750 326,750
Deferred income taxes 103,104 102,884
Other liabilities and deferred credits 103,718 106,845
Stockholders' equity:
Preferred stock ($5 cumulative convertible),
par value $5 per share:
Authorized 5,000,000 shares; none outstanding
Common stock, par value $5 per share:
Class A, authorized 75,000,000 shares; issued
25,920,698 and 25,905,237 shares 129,603 129,526
Class B, authorized 600,000 shares;
issued 556,574 shares 2,783 2,783
Additional paid-in capital 10,760 10,068
Unearned compensation (1,881) (2,573)
Retained earnings 266,893 237,307
----------- -----------
Total stockholders' equity 408,158 377,111
----------- -----------
$1,012,781 $1,016,743
=========== ===========
</TABLE>
See accompanying notes.
<PAGE> 4
MEDIA GENERAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(000's except for per share data)
<TABLE>
<CAPTION>
Second Quarter Ended Six Months Ended
June 30, June 25, June 30, June 25,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 192,632 $ 173,479 $ 377,432 $ 338,633
----------- ----------- ----------- -----------
Operating costs:
Production costs 100,881 94,449 204,122 185,664
Selling, distribution and administrative 45,767 44,006 90,745 86,965
Depreciation and amortization 16,431 14,714 32,997 29,792
----------- ----------- ----------- -----------
Total operating costs 163,079 153,169 327,864 302,421
----------- ----------- ----------- -----------
Operating income 29,553 20,310 49,568 36,212
----------- ----------- ----------- -----------
Other income (expense):
Interest expense (5,415) (3,598) (11,076) (7,183)
Investment income --
unconsolidated affiliates:
Southeast Paper Manufacturing Co. 6,702 1,180 14,825 2,295
Denver Newspapers, Inc.:
Equity in net income 512 462 640 1,083
Preferred stock income 1,244 1,089 2,488 2,177
Other, net (note 4) 113 667 (151) 4,652
----------- ----------- ----------- -----------
Total other income (expense) 3,156 (200) 6,726 3,024
----------- ----------- ----------- -----------
Income before income taxes 32,709 20,110 56,294 39,236
----------- ----------- ----------- -----------
Income taxes 11,829 6,921 20,358 13,372
----------- ----------- ----------- -----------
Net income $ 20,880 $ 13,189 $ 35,936 $ 25,864
=========== =========== =========== ===========
Earnings per common share and equivalent $ 0.78 $ 0.50 $ 1.35 $ 0.98
=========== =========== =========== ===========
Dividends paid per common share $ 0.12 $ 0.12 $ 0.24 $ 0.24
=========== =========== =========== ===========
Weighted average common shares
and equivalents 26,621 26,482 26,584 26,453
</TABLE>
See accompanying notes.
<PAGE> 5
MEDIA GENERAL, INC.
CONSOLIDATED CONDENSED STATEMENTS
OF CASH FLOWS
(Unaudited)
(000's)
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 25,
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 35,936 $ 25,864
Adjustments to reconcile net income:
Depreciation and amortization 32,997 29,792
Deferred income taxes 758 1,547
Investment income --
unconsolidated affiliates (17,953) (5,555)
Distribution from unconsolidated
newsprint affiliate 4,600 ---
Change in assets and liabilities (4,755) (9,763)
----------- -----------
Net cash provided by operating activities 51,583 41,885
----------- -----------
Cash flows from investing activities:
Capital expenditures (12,019) (14,063)
Other, net (note 4) (563) 5,285
----------- -----------
Net cash used by investing activities (12,582) (8,778)
----------- -----------
Cash flows from financing activities:
Net decrease in long-term debt (32,000) ---
Dividends paid (6,350) (6,346)
Other, net (23) 843
----------- -----------
Net cash used by financing activities (38,373) (5,503)
----------- -----------
Net increase in cash and cash equivalents 628 27,604
Cash and cash equivalents at beginning of year 3,367 11,663
----------- -----------
Cash and cash equivalents at end of period $ 3,995 $ 39,267
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 11,690 $ 7,531
Income taxes (net of refunds) 19,393 12,928
</TABLE>
See accompanying notes.
<PAGE> 6
MEDIA GENERAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. The accompanying unaudited consolidated condensed financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial reporting, and with applicable quarterly reporting
regulations of the Securities and Exchange Commission. They do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements and, accordingly, should be read in
conjunction with the consolidated financial statements and related footnotes
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1995.
In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation of interim
financial information have been included.
2. Inventories are principally raw materials.
3. At June 30, 1996, 1,106,710 shares of Class A common stock were
reserved for issuance upon exercise of unqualified stock options granted.
4. Other, net for the six months ended June 25, 1995, includes a $3.6
million gain ($2.5 million after-tax; $0.09 per share) from the sale of the
Company's interest in a Mexican newsprint operation.
5. Pursuant to the provisions of the Cable Television Consumer and
Competition Act of 1992 (the "1992 Cable Act"), the rates charged to subscribers
by the Company's Fairfax Cable subsidiary are subject to regulation and review
by local franchising authorities and the Federal Communications Commission
(FCC). The FCC is currently reviewing certain of the rates charged to
subscribers. The Company believes that it has complied with all provisions of
the 1992 Cable Act, including its rate setting provisions. However, since the
Company's rates for regulated services are subject to review, the Company may be
subject to a refund liability if its rates are successfully challenged.
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
OVERVIEW
Media General, Inc., is an independent, publicly owned communications company,
situated primarily in the Southeast, with interests in metropolitan newspapers,
broadcast television, cable television, recycled newsprint production and
diversified information services. The Company also has investments in newspaper
publishing and newsprint manufacturing operations, the operating results of
which are recognized under the equity method of accounting.
The Company's businesses are somewhat seasonal; the second and fourth quarters
are typically stronger than the first and third quarters.
The Company's fiscal year ends on the last Sunday in December.
<TABLE>
<CAPTION>
Media General, Inc.
Business Segment Information
(Unaudited)
Quarters Ended Six Months Ended
------------------- --------------------
June 30, June 25, June 30, June 25,
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Publishing $ 100,845 $ 87,423 $ 198,767 $ 174,171
Broadcast Television 21,176 18,729 37,280 34,527
Cable Television 36,320 32,902 71,352 65,313
Newsprint 34,291 34,425 70,033 64,622
--------- --------- --------- ---------
Total revenues $ 192,632 $ 173,479 $ 377,432 $ 338,633
========= ========= ========= =========
Operating income:
Publishing $ 11,543 $ 7,719 $ 18,132 $ 13,775
Broadcast Television 7,549 8,022 11,862 13,469
Cable Television 6,556 2,276 10,636 4,312
Newsprint 3,905 2,293 8,938 4,656
--------- --------- --------- --------
Total operating income $ 29,553 $ 20,310 $ 49,568 $ 36,212
========= ========= ========= =========
</TABLE>
Note: Effective in 1996, the Company's newspaper and auxiliary
operations, which were previously reported as separate segments, are now
combined and reported as the publishing segment.
The following comparisons of operating results focus much of their attention on
the comparative performance of the Company, excluding the results of Virginia
Newspapers, Inc. (VNI), acquired in October 1995, and Professional
Communications Services (PCS), acquired in May 1996.
<PAGE> 8
REVENUES
Consolidated revenues increased $19.2 million (11%) and $38.8 million (11.5%) in
the second quarter and first half of 1996, respectively, compared to the same
periods of 1995. Excluding VNI and PCS, consolidated revenues increased $7.2
million (4.1%) and $17.3 million (5.1%) in the current quarter and year-to-date
periods ended June 30, 1996, from the comparable 1995 periods.
Publishing revenues for the quarter and six-month periods ended June 30, 1996,
rose 15.4% and 14.1% (3.5% and 2.7% excluding VNI), respectively, from the
comparable 1995 periods. The revenue increases exclusive of VNI were primarily
attributable to the Company's metropolitan daily newspaper group, where
advertising revenues rose as a result of increased linage (up 1.3% and .2%) and
advertising rates (up an average of 1.7% and 1.1%) in the quarter and first six
months ended June 30, 1996. Increases in classified (led by the automotive and
employment categories) and general advertising (primarily in Tampa) more than
offset declines in retail advertising, which were due to reduced department
store, grocery and electronics ad spending. Circulation revenues rose 5.7% and
6.2% in the second quarter and first half of 1996 from the comparable periods of
1995. The rise was principally the result of increases in circulation rates
approximating 8.5% in both periods, the effects of which more than offset
circulation volume declines of 2.6% and 2.2% in the second quarter and first six
months of 1996.
Broadcast Television segment revenues increased $2.4 million (13.1%) and $2.8
million (8%)(4.3% and 3.2% excluding PCS) in the second quarter and first half
of 1996, from the comparable periods of 1995. The revenue growth was
principally the result of increases in national spot sales (led by the
automotive, transportation and financial categories) and in political
advertising at the Company's flagship station, WFLA-TV in Tampa which, together,
more than offset a decrease in revenues at the Company's WJKS-TV station in
Jacksonville.
Cable Television revenues rose $3.4 million (10.4%) and $6 million (9.2%) in the
second quarter and first six months of 1996 from the comparable 1995 periods.
The increases were principally attributable to the Company's Fairfax County,
Virginia, cable system (Fairfax Cable), where revenues grew 11.5% and 10.8% in
the quarterly and year-to-date periods ended June 30, 1996, from the prior
year's comparable periods. The revenue growth was largely the result of a 3.1%
increase in the number of Fairfax Cable subscribers from the year-ago period (to
223,800 at June 30, 1996), together with a 2.8% rate increase on basic
subscriber service (implemented January 1, 1996) and higher rates in the current
quarter and first half of 1996 on expanded cable programming services of
approximately 7% above the comparable prior year periods. In addition, Fairfax
Cable's pay-per-view revenues grew 16.2% and 43% in the second quarter and first
six months of 1996 from the same year-ago periods due to strong movie and
special event programming.
Newsprint segment revenues declined $.1 million (.4%) in the second quarter of
1996 but rose $5.4 million (8.4%) in the first six months compared to the
equivalent year-ago periods. The current quarter revenue decline and the year-
to-date increase were both attributable to the Company's Garden State Paper
(Garden State) newsprint mill, located in Garfield, New Jersey. The second
quarter revenue decline resulted from an 8.7% decrease in tons sold which more
than offset the effect of a 13.2% rise in the average realized selling price.
The year-to-date revenue rise was attributable to a 26.3% increase in the
average realized selling price from the year-ago period which more than offset
the effect of an 11.6% decline in tons sold. Garden State's revenue results for
<PAGE> 9
the most recent quarter chiefly reflect industry trends as customers implement
conservation measures and reduce inventories to take advantage of softening
average realized newsprint selling prices that peaked in March of the current
year and have since declined. Some further erosion in average realized
newsprint selling prices in the second half of 1996 is likely should demand
remain soft.
OPERATING COSTS
Production costs increased $6.4 million (6.8%) and $18.5 million (9.9%) in the
second quarter and first six months of 1996 compared to the equivalent 1995
periods. Excluding VNI and PCS, production costs rose $1.7 million (1.8%) and
$10.5 million (5.7%) in those same periods. The $1.7 million second quarter
increase reflects the effects of: a $3.2 million (22%) rise in the cost of
newsprint consumed by the Company's metropolitan newspapers, principally the
result of a 26.6% rise in the average price per ton from the year-ago quarter;
a $1.8 million (21.9%) increase in programming costs at the Company's broadcast
and cable television operations due to the addition of new programs in the fall
of 1995 at WFLA-TV and to higher programming rates and the increased subscriber
base at Fairfax Cable; a $1.1 million (18.8%) increase in energy costs,
primarily attributable to increased fuel prices and consumption at the Company's
newsprint operations; and increases in maintenance and repair expenses
(primarily at the Company's newsprint operations). Together, these increases
more than offset the effects of: a $2.3 million (28%) decrease in the cost of
recovered newspapers (ONP) consumed at the Company's newsprint operations,
principally the result of a 25% average cost per ton decrease for ONP from the
second quarter of 1995; and a $1.7 million (5.4%) decline in employee
compensation and benefit costs, the result of a 1995 reengineering initiative
implemented at the Company's Winston-Salem, North Carolina daily newspaper, a
similar 1996 effort at Fairfax Cable, and ongoing process reengineering at the
Company's Tampa newspaper. The $10.5 million year-to-date increase in
production costs reflects the effects of: a $7.8 million (27%) increase in the
cost of newsprint consumed by the Company's metropolitan newspaper group; a
$4.1 million (25.8%) increase in broadcast and cable television programming
costs; a $2.6 million (21.5%) rise in energy costs at the Company's newsprint
operations due to increased fuel prices and consumption; and increased
maintenance and repair expenses, also at the Company's newsprint operations.
Together, these year-to-date increases more than offset the effects of a $1.6
million (11.1%) decline (due to price) in the cost of ONP consumed in newsprint
manufacturing, and a $1.9 million (3%) decrease in employee compensation and
benefit costs as a result of the reengineering programs mentioned previously.
Selling, distribution and administrative costs increased $1.8 million (4%) and
$3.8 million (4.3%) in the second quarter and first half of 1996 from the same
periods of 1995. Excluding VNI and PCS, selling, distribution and
administrative costs decreased $.7 million (.9%) and $.7 million (1.6%) in the
second quarter and first six months of 1996 from the comparable year-ago
periods. The decrease in both periods was directly attributable to employee
compensation and benefits expense, which declined $1.5 million (6%) and $2.2
million (4.5%) in the second quarter and first six months of 1996, reflecting
declines within the Publishing and Cable Television segments. These declines
more than offset increases in other selling, distribution and administrative
expenses.
<PAGE> 10
Depreciation and amortization expense rose $1.7 million (11.7%) and $3.2 million
(10.8%) in the quarter and year-to-date periods ended June 30, 1996, from the
comparable year-ago periods. The rise was attributable to depreciation and
amortization of increased goodwill and identified intangibles relating to VNI
(acquired in October 1995).
OTHER INCOME (EXPENSE)
Interest expense rose $1.8 million and $3.9 million in the quarter and year-to-
date periods ended June 30, 1996, from the comparable prior-year periods. The
rise was due primarily to the increase in average debt outstanding which, as a
result of the VNI acquisition, rose $128.2 million and $134.9 million in the
quarter and six months ended June 30, 1996. The increase in average debt
outstanding more than offset the effect of a reduction in the Company's average
borrowing rate to 7.1% in the first six months of 1996 from 8.3% in the
comparable year-ago period.
The Company's share of the profits of its Southeast Paper (SEPCO) newsprint
affiliate increased to $6.7 million and $14.8 million in the second quarter and
first half of 1996, respectively, from profits of $1.2 million and $2.3 million
in the comparable year-ago periods. The increases were directly attributable to
improved newsprint selling prices which rose 17% during the second quarter of
1996 and 26% in the first half of 1996 compared to the same periods in 1995.
SEPCO's results were also aided somewhat by increases in tonnage sold, up 1% and
1.7% in the second quarter and first half of 1996 from the comparable prior year
periods, and by reduced raw material costs. Similar to the recent experience at
the Company's wholly owned Garden State Paper mill, SEPCO's average realized
newsprint selling price peaked in the first quarter of 1996, and gradually
declined as newsprint demand softened.
Income earned from the Company's Denver Newspapers, Inc. (DNI), affiliate
totaled $1.8 million and $3.1 million in the second quarter and first six months
of 1996; of the foregoing, $1.2 million and $2.5 million was derived from the
Company's DNI preferred stock investment; the balance came from the Company's
share of DNI's net income applicable to common stockholders. This compares to
income earned from DNI totaling $1.6 million and $3.3 million in the second
quarter and first half of 1995, of which $1.1 million and $2.2 million was
derived from the preferred stock investment. DNI's improved second quarter
operating results were aided by strong advertising growth which more than offset
the effect of increased newsprint costs. Conversely, in the year to date, DNI's
operating income declined from the comparable 1995 period as a result of
increased costs (principally newsprint) that more than offset the growth in
advertising revenues.
Other, net, declined $.6 million in the second quarter of 1996 from the year-ago
period as a result of the absence of interest earned in 1995 on short-term
investments which were held by the Company prior to the October 1995 VNI
acquisition. The $4.8 million comparative decline in the current year to date
is primarily the result of the absence of 1995's $3.6 million pretax gain on the
sale of the Company's interest in a Mexican newsprint affiliate and interest
income on short-term investments.
<PAGE> 11
NET INCOME
Net income for the second quarter and first six months of 1996 rose to $20.9
million and $35.9 million, respectively, from $13.2 million and $25.9 million in
the comparable periods of 1995. Excluding the impact in the first half of 1995
of the $2.5 million ($0.09 per share) after-tax gain from the sale of the
previously mentioned interest in a Mexican newsprint affiliate, net income in
the second quarter and first six months of 1996 increased 58.3% and 53.8% above
the comparable 1995 periods.
The following discussion focuses on the pretax operating income of each of the
Company's principal business segments, and on income taxes.
Publishing segment operating income increased $3.8 million (49.5%) and $4.4
million (31.6%) in the second quarter and first six months of 1996,
respectively, from the comparable 1995 periods. The second quarter increase was
attributable to the addition of VNI (acquired in October 1995), and to improved
results at the Company's Tampa and Winston-Salem newspapers. The year-to-date
increase was also attributable to the addition of VNI together with improved
Winston-Salem results. In both periods, operating income was affected by
increased newsprint costs which, for the Company's metropolitan newspaper group,
rose 22% and 27% in the second quarter and first six months of 1996 above the
comparable 1995 periods.
Year-over-year Broadcast Television segment operating income decreased $.5
million (5.9%) and $1.6 million (11.9%) in the quarterly and year-to-date
periods ended June 30, 1996. The impact of PCS was not significant. The
decline in operating income resulted from increased programming costs (up
approximately 120%) that more than offset combined revenue increases which,
despite a decline at the Company's Jacksonville television station, grew 4.3%
and 3.2% in the second quarter and first half of 1996.
Cable Television segment profits rose $4.3 million and $6.3 million in the
second quarter and first half of 1996 from the comparable year-earlier periods.
The increases reflect revenue growth at Fairfax Cable, up 11.5% and 10.8% in the
quarter and first half of 1996 as a result of both rate and subscriber count
increases, and reduced compensation and employee benefit costs (down as a result
of the previously mentioned reengineering program).
Newsprint segment operating income increased $1.6 million (70.3%) and $4.3
million (92%) in the second quarter and first six months of 1996 from the
comparable 1995 periods. The increases resulted from significantly higher
average newsprint selling prices realized in the current quarter and first half
(up 13.2% and 26.3% from prior year levels), combined with meaningful declines
in the price of ONP, this segment's principal raw material. Combined, these
factors more than offset the effect of increased energy and maintenance costs.
Income taxes rose $4.9 million and $7 million in the second quarter and first
half of 1996 from the comparable 1995 periods. Excluding the gain and related
income taxes applicable to the Company's first quarter 1995 sale of its interest
in a Mexican newsprint operation, income tax expense rose $8.1 million (66%)
from the comparable 1995 year-to-date period. The Company's effective tax rate
increased to approximately 36.2% in both the second quarter and first half of
1996, from approximately 34.4% in the same periods of 1995, principally the
result of increased pretax income.
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
Funds generated by operating activities during the first six months of 1996
totaled $51.6 million, up $9.7 million from the comparable period of 1995. The
increase was due principally to a $4.6 million distribution from SEPCO, the
Company's newsprint affiliate, and a reduction in funds applied toward working
capital needs. Funds generated by investing activities during the first half of
1995 include $3.6 million from the sale of the Company's interest in a Mexican
newsprint operation.
During the first six months of 1996, the primary use of cash was $12 million for
capital expenditures and $6.4 million for the payment of dividends to
stockholders. In addition, $32 million of funds generated in excess of current
needs during the first six months of 1996 were used to reduce debt.
Total long-term debt at June 30, 1996, was $294.75 million, down $32 million
from December 31, 1995, but up $122.25 million from the year-ago level of $172.5
million at June 25, 1995 (the result of the VNI acquisition). On July 31, 1996,
the Company refinanced $43.75 million of 9.27% notes outstanding, together with
accumulated interest, with borrowings under its revolving credit facility. At
June 30, 1996, the Company had available unused credit lines from its committed
five-year revolving credit facility of $170 million ($124 million on July 31,
1996, after the previously mentioned refinancing), together with an arrangement
with an insurance company which makes available to the Company, on an
uncommitted basis, the opportunity to borrow up to $150 million under senior
notes at prevailing interest rates. The Company anticipates that internally
generated funds provided by operations during 1996, together with existing
borrowing arrangements, will be more than adequate to finance projected capital
expenditures, dividends to stockholders, and working capital needs.
ACQUISITIONS
On May 15, 1996, the Company acquired the assets of Professional Communications
Services (PCS), Inc., for approximately $2 million cash. PCS is a small Tampa-
based company that provides equipment and studio design and construction
services for broadcast television stations. PCS will benefit the Company's
broadcast and cable television operations particularly through equipment
purchasing efficiencies.
On August 1, 1996, the Company acquired for approximately $38 million cash,
borrowed under existing credit lines, 100% of the stock of Register Publishing
Company which publishes the Danville Register & Bee, a morning newspaper located
in Danville, Virginia, with a circulation of approximately 23,000 copies daily
and 27,000 on Sunday. This acquisition will complement the Company's other
daily newspapers in Virginia, particularly those acquired last fall in the VNI
acquisition.
On July 22, 1996, the Company announced an agreement to acquire Park
Acquisitions, Inc., parent of Park Communications, Inc., in a transaction valued
at approximately $710 million. The acquisition is expected to close this
winter, subject to regulatory approvals. This acquisition will enhance the
Company's current television station and newspaper holdings by adding ten
network affiliated broadcast television stations, 28 daily community newspapers
and 82 weekly newspapers.
Together, these acquisitions represent a major step forward in the Company's
mission to be a leading provider of news, information and entertainment in the
Southeast.
<PAGE> 13
OUTLOOK
Prospects for the balance of 1996 remain positive for Media General. Improved
year-over-year profitability in the Company's publishing operations should
continue, as should that of its cable television operations. The Company's
broadcast television results during the second half should be benefited
(particularly at its Tampa, Florida, NBC affiliate) by the Olympic Games as well
as by heightened political campaign advertising. However, the Company's
newsprint operations may experience further declines in newsprint selling prices
and profitability during the second half as customers continue to implement
conservation measures and reduce inventories.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of Media General, Inc., was held on May
17, 1996, for the purpose of electing a board of directors.
Each nominee for director was elected by the following vote:
Class A Class A
Shares Voted Shares Voted
"FOR" "WITHHELD"
----------- ------------
Class A Directors
- -----------------
Charles A. Davis 20,156,326 4,119,984
Robert V. Hatcher, Jr. 19,924,084 4,352,226
John G. Medlin, Jr. 19,919,194 4,357,116
Class B Class B
Shares Voted Shares Voted
"FOR" "WITHHELD"
----------- ------------
Class B Directors
- -----------------
Robert P. Black 552,340 ---
D. Tennant Bryan 552,340 ---
J. Stewart Bryan III 552,340 ---
James S. Evans 552,340 ---
Wyndham Robertson 552,340 ---
Henry L. Valentine, II 552,340 ---
<PAGE> 14
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter ended
June 30, 1996.
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.
MEDIA GENERAL, INC.
DATE: August 13, 1996 /s/ J. Stewart Bryan III
-----------------------------------
J. Stewart Bryan III, Chairman,
President and Chief Executive Officer
DATE: August 13, 1996 /s/ Marshall N. Morton
-----------------------------------
Marshall N. Morton,
Senior Vice-President and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MEDIA
GENERAL, INC.'S CONSOLIDATED CONDENSED BALANCE SHEETS AND CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,995
<SECURITIES> 0
<RECEIVABLES> 77,508
<ALLOWANCES> 0
<INVENTORY> 22,319
<CURRENT-ASSETS> 132,473
<PP&E> 480,958
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,012,781
<CURRENT-LIABILITIES> 103,051
<BONDS> 294,750
0
0
<COMMON> 132,386
<OTHER-SE> 275,772
<TOTAL-LIABILITY-AND-EQUITY> 1,012,781
<SALES> 377,432
<TOTAL-REVENUES> 377,432
<CGS> 204,122
<TOTAL-COSTS> 204,122
<OTHER-EXPENSES> 32,997
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,076
<INCOME-PRETAX> 56,294
<INCOME-TAX> 20,358
<INCOME-CONTINUING> 35,936
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,936
<EPS-PRIMARY> 1.35
<EPS-DILUTED> 0
</TABLE>