<PAGE>
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________
FORM 10-Q
QUARTERLY REPORT
Under
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
_____________
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarter ended June 30, 1994
-------------
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 1-10321
ACKERLEY COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 91-1043807
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
800 Fifth Avenue,
Suite 3770
Seattle, WA 98104
(206) 624-2888
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
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.
Class Outstanding at August 1, 1994
- --------------------------- -----------------------------
Common Stock, $.01 par value 9,562,433 shares
Class B Common Stock, $.01 par value 5,901,861 shares
<PAGE>
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION ----
ITEM 1. FINANCIAL STATEMENTS (Unaudited)
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1994 AND DECEMBER 31, 1993................................ 1
CONSOLIDATED STATEMENTS OF OPERATIONS THREE
AND SIX MONTHS ENDED JUNE 30, 1994 AND
JUNE 30, 1993...................................................... 2
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1994
AND JUNE 30, 1993.................................................. 3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS......................... 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................... 5
PART II - OTHER INFORMATION
ITEM 4 SUBMISSION OF MATTERS OF VOTE OF SECURITY HOLDERS..................11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K...................................12
SIGNATURES.........................................................12
<PAGE>
ACKERLEY COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 1994 and December 31, 1993
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
----------------- ------------------
<S> <C> <C>
ASSETS (In thousands)
Current assets:
Cash and cash equivalents $ 5,416 $ 6,732
Accounts receivable, net of allowance for
doubtful accounts of $942,000 in 1994
and $941,000 in 1993 40,235 37,237
Current portion of broadcast rights 2,203 4,605
Other current assets 4,790 7,625
------------ ------------
Total current assets 52,644 56,199
Property and equipment, net 60,434 61,616
Intangibles, net 20,899 31,769
Other assets 9,731 10,907
------------ ------------
Total assets $ 143,708 $ 160,491
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable $ 6,821 $ 7,463
Accrued interest 4,016 3,979
Other accrued liabilities 8,899 8,721
Deferred revenue 6,624 11,504
Current portion of long-term debt 13,976 16,562
------------ ------------
Total current liabilities 40,336 48,229
Long-term debt - noncurrent portion 202,305 215,114
------------ ------------
Total liabilities 242,641 263,343
Stockholders' deficiency:
Common stock, $.01 par value; 50,000,000 shares authorized,
10,935,129 shares issued at June 30, 1994 (10,901,379 at
December 31, 1993) and 9,562,113 shares outstanding at
June 30, 1994 (9,526,433 at December 31, 1993). 109 109
Class B common stock, $.01 par value; 6,972,230 shares
authorized, 5,902,181 shares issued and outstanding at
June 30, 1994 (5,904,111 at December 31, 1993). 59 59
Capital in excess of par value 3,007 2,945
Deficit (92,019) (95,876)
Less common stock in treasury, at cost (10,089) (10,089)
------------ ------------
Total stockholders' deficiency (98,933) (102,852)
------------ ------------
Total liabilities and stockholders' deficiency $ 143,708 $ 160,491
------------ ------------
------------ ------------
</TABLE>
1
<PAGE>
ACKERLEY COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the periods ended June 30, 1994 and 1993
<TABLE>
<CAPTION>
------------Three Months Ended------------ -------------Six Months Ended-------------
June 30, June 30, June 30, June 30,
1994 1993 1994 1993
-------------------- -------------------- -------------------- --------------------
(In thousands except (In thousands except
per share amounts) per share amounts)
<S> <C> <C> <C> <C>
Revenue
$ 49,265 $ 51,380 $ 102,778 $ 99,586
Less agency commissions
and discounts
(6,066) (5,900) (11,484) (10,732)
------------ ------------ ------------ ------------
Net revenue
43,199 45,480 91,294 88,854
Expenses and other income:
Operating expenses
Disposition of assets (32,368) (32,892) (72,760) (70,603)
Amortization 21 (500) 2,543 (500)
Depreciation (606) (838) (1,465) (1,790)
Interest expense (1,635) (1,420) (3,311) (3,128)
Other income(expense), net (6,608) (5,226) (12,753) (10,428)
289 (151) 342 (118)
------------ ------------ ------------ ------------
Total expenses and
other income (40,907) (41,027) (87,404) (86,567)
------------ ------------ ------------ ------------
Income before income tax
2,292 4,453 3,890 2,287
Income tax expense
- (46) (33) (46)
------------ ------------ ------------ ------------
Net income
$ 2,292 $ 4,407 $ 3,857 $ 2,241
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net income
per common share
$ 0.15 $ 0.28 $ 0.24 $ 0.14
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Weighted average number
of common shares
15,744 15,501 15,744 15,501
</TABLE>
2
<PAGE>
ACKERLEY COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the periods ended June 30, 1994 and 1993
<TABLE>
<CAPTION>
-----------Six Months Ended------------
June 30, June 30,
1994 1993
----------------- ------------------
<S> <C> <C>
Cash flows from operating activities: (In thousands)
Cash received from customers
Cash paid to suppliers and employees $ 82,685 $ 83,750
Interest paid (69,136) (67,412)
(11,684) (11,324)
------------ ------------
Net cash provided by operating activities 1,865 5,014
Cash flows from investing activities:
Proceeds from sale of property
Proceeds from sale of note receivable 13,214 110
Capital expenditures - 4,500
Other, net (3,050) (1,595)
(391) (1,380)
------------ ------------
Net cash provided by investing activities 9,773 1,635
Cash flows from financing activities:
Borrowings under new credit agreement
Payments under credit agreements 6,000 -
Other, net (18,480) (11,000)
(474) 183
------------ ------------
Net cash used by financing activities (12,954) (10,817)
------------ ------------
Net increase(decrease) in cash and cash equivalents
(1,316) (4,168)
Cash and cash equivalents at beginning of year
6,732 7,008
------------ ------------
Cash and cash equivalents at end of period
$ 5,416 $ 2,840
------------ ------------
------------ ------------
Reconciliation of net income to net cash provided
by operating activities:
Net income
Adjustments to reconcile net income to net $ 3,857 $ 2,241
cash provided by operating activities:
Disposition of assets (2,543) 500
Gain on the sale of property, plant and equipment 4,776 4,918
(180) (20)
Change in assets and liabilities:
Increase in accounts receivable
Decrease in other current assets (3,554) (1,435)
Increase (decrease) in accounts payable 2,835 4,353
and accruals
Increase (decrease) in accrued interest (464) 77
Decrease in deferred revenue 37 (1,231)
Other, net (4,880) (4,456)
Net cash provided by operating activities 1,981 67
------------ ------------
$ 1,865 $ 5,014
------------ ------------
------------ ------------
Supplemental disclosure of noncash transactions:
Broadcast rights acquired and broadcast
obligations assumed
$ 695 $ 854
------------ ------------
------------ ------------
</TABLE>
3
<PAGE>
ACKERLEY COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PREPARATION
The interim financial statements are unaudited but, in the opinion of
management, reflect all normal and recurring adjustments necessary for a fair
presentation of results for such periods. The results of operations for any
interim period are not necessarily indicative of anticipated results for the
full year. These financial statements should be read in conjunction with the
financial statements and notes thereto contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1993.
NOTE 2. INVESTMENTS: DEBT AND EQUITY SECURITIES
Beginning with the current fiscal year, the Company has implemented FASB 115
which has not and is not expected to have a material impact on the financial
statements.
4
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
- --------
In the first six months of 1994, the Company reported record net income of $3.9
million. This net income included a one-time gain of $2.6 million on the
disposition of assets related to the sale of WAXY(FM) in March 1994. In the
first six months of 1994, the Company's net revenues increased over the same
period last year by $2.4 million or 2.7%. The Company's Operating Cash Flow, as
defined below, increased $.7 million or 4.1% from the same period last year,
while the net income reflected a $1.6 million or 72.1% improvement over last
year's first six months.
On July 14, 1994, the Company completed an agreement with Century Management,
Inc. which formed New Century Seattle Partners, L.P. (the "Partnership") for the
purpose of operating the assets of KJR(AM), KLTX(FM) and KUBE(FM). The venture
has been approved by the Federal Communications Commission. Under the terms of
the venture, the Partnership purchased certain assets of KUBE(FM) from
affiliated companies of Cook Inlet, Inc., an Alaska-based Native American
corporation, and the Company contributed substantially all of the assets of
KJR(AM) and KLTX(FM) to the Partnership. Century Management, Inc. is the
general partner of the Partnership, and the Company is participating in the
Partnership as a limited partner originally holding approximately 97% of the
equity interests in the Partnership.
As with many media companies that have grown through acquisitions, the Company's
acquisitions and dispositions of television and radio stations have resulted in
significant non-cash and non-recurring charges to income. For this reason, in
addition to net income, management believes that Operating Cash Flow (defined as
net revenue less operating expenses plus other income before amortization,
depreciation, interest expense and disposition of assets) is an appropriate
measure of the Company's financial performance. This measure excludes expenses
consisting of depreciation, amortization, interest and disposition of assets
because these are not considered by the Company to be costs of ongoing
operations. The Company uses Operating Cash Flow to pay interest and principal
on its long-term debt as well as to finance capital expenditures. Operating Cash
Flow, however, is not to be considered an alternative to net income as an
indicator of the Company's operating performance or to cash flows as a measure
of the Company's liquidity.
5
<PAGE>
RESULTS OF OPERATIONS STATEMENT
- -------------------------------
The following two tables set forth certain historical financial and operating
data of the Company for the three month and six month periods ended June 30,
1994 and June 30, 1993, respectively, including separate net revenue, operating
expenses and other income, and Operating Cash Flow information by segment:
STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
------------------------------------- -------------------------------------
1994 1993 1994 1993
------------------------------------- -------------------------------------
AS % AS % AS % AS %
OF NET OF NET OF NET OF NET
AMOUNT REVENUE AMOUNT REVENUE AMOUNT REVENUE AMOUNT REVENUE
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue. . . . . . . . . . . . . . . . . $ 43,199 $ 45,480 $ 91,294 $ 88,854
Operating expenses and other
income:
Operating expenses . . . . . . . . . . . . 32,368 74.9% 32,892 72.3% 72,760 79.7% 70,603 79.5%
Other (income) expense, net. . . . . . . . (289) (0.7) 151 0.3 (342) (0.4) 118 0.1
-------- -------- -------- --------
Total operating expenses
and other income . . . . . . . . . . . 32,079 74.2 33,043 72.6 72,418 79.3 70,721 79.6
-------- -------- -------- --------
Operating Cash Flow. . . . . . . . . . . . . 11,120 25.8 12,437 27.4 18,876 20.7 18,133 20.4
Other expenses:
Depreciation and
amortization . . . . . . . . . . . . . . 2,241 5.2 2,258 5.0 4,776 5.2 4,918 5.5
Interest expense . . . . . . . . . . . . . 6,608 15.3 5,226 11.5 12,753 14.0 10,428 11.7
-------- -------- -------- --------
Total other expenses . . . . . . . . . . 8,849 20.5 7,484 16.5 17,529 19.2 15,346 17.2
Income before
disposition of assets and
income taxes . . . . . . . . . . . . . . . 2,271 5.3 4,953 10.9 1,347 1.5 2,787 3.2
(Gain) loss on
disposition of assets. . . . . . . . . . . (21) 0.0 500 1.1 (2,543) (2.8) 500 0.6
Income tax expense . . . . . . . . . . . . . 0 -- 46 0.1 33 0.0 46 0.1
-------- -------- -------- --------
Net income . . . . . . . . . . . . . . . . . $ 2,292 5.3% $ 4,407 9.7% $ 3,857 4.3% $ 2,241 2.5%
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
6
<PAGE>
OPERATING INFORMATION BY BUSINESS SEGMENT
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
1994 1993 1994 1993
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Net revenue:
Out-of-home media................. $ 21,513 $ 19,565 $ 39,483 $ 35,540
Broadcasting...................... 16,764 16,896 37,800 35,847
Other............................. 4,922 9,019 14,011 17,467
-------- -------- -------- --------
Total net revenue................ $ 43,199 $ 45,480 $ 91,294 $ 88,854
-------- -------- -------- --------
-------- -------- -------- --------
Oper exp and other income:
Out-of-home media................. $ 14,368 $ 13,660 $ 28,435 $ 27,108
Broadcasting...................... 10,131 9,732 21,061 19,767
Other............................. 7,580 9,651 22,922 23,846
-------- -------- -------- --------
Total oper exp and other inc..... $ 32,079 $ 33,043 $ 72,418 $ 70,721
-------- -------- -------- --------
-------- -------- -------- --------
Operating Cash Flow:
Out-of-home media................. $ 7,145 $ 5,905 $ 11,048 $ 8,432
Broadcasting...................... 6,633 7,164 16,739 16,080
Other............................. (2,658) (632) (8,911) (6,379)
-------- -------- -------- --------
Total Operating Cash Flow........ $ 11,120 $ 12,437 $ 18,876 $ 18,133
-------- -------- -------- --------
-------- -------- -------- --------
Change in net revenue from
prior periods:
Out-of-home media................ 10.0 % (9.7)% 11.1 % (7.0)%
Broadcasting..................... (0.8) 4.3 5.4 2.4
Other............................ (45.4) 99.1 (19.8) 51.8
Change in total net revenue..... (5.0) 7.3 2.7 4.9
Operating data as a percent
of net revenue:
Oper exp and other income:
Out-of-home media................. 66.8 % 69.8 % 72.0 % 76.3 %
Broadcasting...................... 60.4 57.6 55.7 55.1
Other............................. 154.0 107.0 163.6 136.5
Total oper exp and other inc..... 74.3 72.7 79.3 79.6
Operating Cash Flow:
Out-of-home media................. 33.2 % 30.2 % 28.0 % 23.7 %
Broadcasting...................... 39.6 42.4 44.3 44.9
Other............................. (54.0) (7.0) (63.6) (36.5)
Total Operating Cash Flow........ 25.7 27.3 20.7 20.4
</TABLE>
7
<PAGE>
THREE MONTHS ENDED JUNE 30, 1994 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1993
- -------------------------------------------------------------------------------
NET REVENUE. Net revenue for the quarter ended June 30, 1994, decreased $2.3
million or 5.0% to $43.2 million from $45.5 million in 1993. The Company's
out-of-home media segment's net revenue increased $1.9 million or 10.0% mainly
due to increased national advertising sales and a return to a normal sales
volume in the South Florida market which had depressed sales in 1993 due to the
effects of Hurricane Andrew. The Company's broadcasting segment showed a slight
decrease of $.1 million or .8% reflecting in part the effect of the sale of
WAXY(FM) in March 1994. Net revenue in the Company's other businesses segment
decreased $4.1 million or 45.4% mainly due to the SuperSonics participating in 5
games of the 1994 NBA playoffs compared to 17 games in 1993.
OPERATING EXPENSES AND OTHER INCOME. Operating expenses and other income
decreased $1.0 million or 2.9% to $32.1 million in 1994 compared to $33.1
million in 1993. In the Company's out-of-home media segment, operating expenses
and other income increased slightly by $0.7 million or 5.2% to $14.4 million due
to the effects of increased business activity. Operating expenses and other
income in the Company's broadcasting segment increased by $0.4 million or 4.1%
to $10.1 million mostly due to higher programming and promotion expenses.
Operating expenses and other income from the Company's other segment decreased
$2.1 million to $7.6 million or 21.5% mainly from reduced basketball operating
expenses related to participating in only 5 games of the 1994 NBA playoffs
compared to 17 games in 1993.
OPERATING CASH FLOW. Because the decrease in net revenue was greater than the
decrease in operating expense and other income, the Company's Operating Cash
Flow decreased $1.3 million or 10.6% for the three months ended June 30, 1994
from the same period in 1993. The $1.2 million increase in the out-of-home
segment's Operating Cash Flow was more than offset by the $2.0 million decrease
in the Company's other segment's Operating Cash Flow and the $.5 million
decrease in the broadcasting segments Operating Cash Flow for the quarter.
Operating Cash Flow as a percentage of net revenue decreased to 25.7% for the
three months ended June 30, 1994 from 27.3% for the comparable period in 1993.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses remained
unchanged at $2.2 million for both periods.
INTEREST EXPENSE. Interest expense for the quarter ended June 30, 1994
increased $1.4 million or 26.4% to $6.6 million from $5.2 million in 1993 mainly
due to an increase in the average interest rate applied to outstanding debt as
well as an increase in the amortization of deferred charges relating to the
Company's refinancing of its senior debt in October 1993.
INCOME TAX EXPENSE. For the second quarter 1994, the Company had no income tax
expense compared to $46,000 income tax expense for the second quarter 1993
mainly due to the effect on taxable income of the sale of WAXY(FM). Management
anticipates that the Company will incur income tax expenses under the
alternative minimum tax this year and in future years until operating loss
carryforwards are substantially reduced.
NET INCOME. Net income of $2.3 million for the three months ended June 30, 1994
decreased $2.2 million from $4.5 million in 1993. This decrease was mainly due
to the SuperSonics participating in 5 games of the 1994 NBA playoffs compared to
17 games in 1993.
8
<PAGE>
SIX MONTHS ENDED JUNE 30, 1994 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1993
- ---------------------------------------------------------------------------
NET REVENUE. Net revenue for the six months ended June 30, 1994, increased $2.4
million or 2.7% to $91.3 million from $88.9 million in 1993. The Company's
out-of-home media segment's net revenue increased $3.9 million or 11.1% mainly
due to increased national advertising sales and a return to a normal sales
volume in the South Florida market which had depressed sales in the first half
of 1993 due to the effects of Hurricane Andrew. The Company's broadcasting
segment increased $2.0 million or 5.4% mainly due to increased rates and sales
volume in the first quarter 1994. Net revenue in the Company's other businesses
segment decreased $3.5 million mainly due to the SuperSonics participating in 5
games of the 1994 NBA playoffs compared to 17 games in 1993.
OPERATING EXPENSES AND OTHER INCOME. Operating expenses and other income
increased $1.7 million or 2.4% to $72.4 million in 1994 compared to $70.7
million in 1993. In the Company's out-of-home media segment, operating expenses
and other income increased $1.3 million or 4.9% to $28.4 million due to the
effects of increased business activity. Operating expenses and other income in
the Company's broadcasting segment increased by $1.3 million or 6.5% to $21.1
million mostly due to programming and promotion expenses. Operating expenses
and other income from the Company's other segment decreased $.9 million to $22.9
million or 3.9% mainly from reduced basketball operating expenses related to
participating in only 5 games of the 1994 NBA playoffs compared to 17 games in
1993.
OPERATING CASH FLOW. The Company's Operating Cash Flow increased $.7 million or
4.1% for the six months ended June 30, 1994 from the same period in 1993. The
$2.6 million increase in the out-of-home segment's Operating Cash Flow and the
$.6 million increase in the broadcasting segment's Operating Cash Flow offset
the $2.5 million decrease in the Company's other segment's Operating Cash Flow.
Operating Cash Flow as a percentage of net revenue increased slightly to 20.7%
for the six months ended June 30, 1994 from 20.4% for the comparable period in
1993.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense for the
six months ended June 30, 1994 decreased $0.1 million or 2.9% to $4.8 million
from the comparable period in 1993.
INTEREST EXPENSE. Interest expense for the six months ended June 30, 1994
increased $2.3 million or 22.3% to $12.7 million from $10.4 million in 1993 due
to an increase in the average interest rate applied to outstanding debt as well
as an increase in the amortization of deferred charges relating to the Company's
refinancing of its senior debt in October 1993.
INCOME TAX EXPENSE. For the six months ended June 30, 1994, the Company had
$33,000 income tax expense compared to $46,000 income tax expense for the same
period in 1993. The $13,000 or 28.3% decrease is mainly due to the effect on
taxable income of the sale of WAXY(FM). Management anticipates that the Company
will incur income tax expenses under the alternative minimum tax this year and
in future years until operating loss carryforwards are substantially reduced.
NET INCOME. Net income of $3.9 million for the six months ended June 30, 1994
increased $1.6 million from $2.3 million in 1993. The increase was mainly due
to the performance of the Company's out-of-home segment which is experiencing
increased national sales and a return to a normal sales volume in South Florida.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Under the Credit Agreement, the Company presently has approximately $8.0 million
available for borrowing under the revolving credit facility and has borrowed all
amounts available under the term loans. The Credit Agreement and Subordinated
Note Agreements require the consent of the banks and other lenders prior to any
material expansion of the Company's operations.
Borrowings under the Credit Agreement bear annual interest at either the prime
rate plus 1.75% or LIBOR plus 3.0%. The Senior Notes bear annual interest at
10.75%. The Subordinated Notes bear average annual interest at 10.58%. The
borrowings and the Notes are subject to the Company's compliance with certain
financial ratios and covenants set forth in the Credit Agreement, Senior Note
Indenture and Subordinated Note Agreements. As of June 30, 1994, the Company
was in compliance with all such ratios and covenants. The borrowings under the
Credit Agreement and the Senior Notes are secured by the pledge of stock of the
Company's subsidiaries. Substantially all of the $14.0 million received from
the sale of WAXY(FM) was used to reduce long-term debt.
The Company's working capital increased $4.3 million to $12.3 million at June
30, 1994 from $8.0 million at December 31, 1993. This increase was mainly due
to $6.2 million of income from operations (net income before tax, amortization,
depreciation, and disposition of assets), a portion of which was utilized to
purchase new property and equipment. For the periods presented, the Company
financed its working capital needs from cash provided by operating activities.
Cash provided by operating activities for the first six months of 1994 decreased
$3.1 million to $1.9 million from $5.0 million in 1993 due to a net $2.7 million
decrease in cash from ongoing business operations and a $.4 million increase in
interest payments.
At June 30, 1994, the Company's capital resources consisted of $5.4 million in
cash and cash equivalents and approximately $8.0 million available under the
Credit Agreement.
Capital expenditures for new property and equipment of $3.1 million in the first
six months of 1994 were financed with cash provided by operating activities and
borrowings from the revolving credit facility. These capital expenditures were
primarily for advertising signs, displays, vehicles, broadcast equipment, and a
new practice facility for the SuperSonics.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS OF VOTE OF SECURITY HOLDERS
(a) The 1993 Annual Meeting of Shareholders of the Company was held on
April 15, 1994.
(b) The following directors were elected at the above meeting: Barry
Ackerley and Michel C. Thielen.
(c) The following matters were voted upon at the meeting:
1. Amendments to the Employee Stock Option Plan (i) extending the
term of the Plan from May 1, 1993 to May 1, 2003, (ii) increasing
the number of shares of Common Stock available for stock options
granted under the Plan from 300,000 shares to 500,000 shares, and
(iii) deleting the provision limiting the purchase price for
shares subject to nonstatutory stock options to 90% or more of
the fair market value of such shares at the time of grant and
allowing the purchase price to be determined by the Board of
Directors in its sole discretion.
For: 66,202,000 Against: 505,751
Withheld: 5,450 Not Voted: 1,888,092
2. An amendment to the Company's Certificate of Incorporation
increasing the number of authorized shares of total stock from
24,972,230 shares to 56,972,230 shares, including an increase
of the number of shares of Common Stock from 18,000,000 shares to
50,000,000 shares.
For: 66,257,945 Against: 449,456
Withheld: 5,800 Not Voted: 1,880,092
11
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits: NONE
(b) No reports on Form 8-K were filed during the three months ended
June 30, 1994.
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.
ACKERLEY COMMUNICATIONS, INC.
DATED: _______________________ BY ___________________________
Denis M. Curley
Sr. Vice President and
Chief Financial Officer,
Treasurer and Asst. Secretary
(Principal Financial Officer)
12
