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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 6, 2000
THE ACKERLEY GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-10321 91-1043807
---------------------- -----------------------
(Commission File Number) IRS Employer Identification No.
1301 Fifth Avenue, Suite 4000
Seattle, Washington 98101
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (206) 624-2888
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro forma financial information.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
On January 5, 2000, we sold substantially all of the assets of our
outdoor advertising operations serving the Miami-Fort Lauderdale and West Palm
Beach-Fort Pierce, Florida markets ("Florida") to Eller Media Company, a
subsidiary of Clear Channel Communications, Inc., for approximately $300.0
million in cash, plus the assumption of certain liabilities.
The following unaudited pro forma condensed consolidated financial
information reflects the Florida sale, as well as the following prior
transactions:
- On June 30, 1998, we sold substantially all of the assets of our
wholly-owned subsidiary, Ackerley Airport Advertising, Inc. ("Airport).
The sale price consisted of a base cash price of $40.0 million, paid on
the closing date of the transaction, and an additional cash payment of
approximately $2.8 million, of which $1.2 million was paid in December
1998 and the remainder was paid in January 1999. The pre-tax gain
recognized from this transaction was approximately $33.5 million in 1998
and approximately $1.6 million in 1999.
- On April 12, 1999, we purchased substantially all of the assets of
WOKR(TV), the ABC affiliate licensed to Rochester, New York, for
approximately $128.2 million. In September 1998, we paid $12.5 million
of the purchase price into an escrow account, with the balance paid at
closing. We recorded net assets with estimated fair values aggregating
$10.3 million and goodwill of $117.9 million in connection with this
transaction.
The following unaudited pro forma condensed consolidated financial
information consists of an unaudited pro forma condensed consolidated balance
sheet as of September 30, 1999, and unaudited pro forma condensed consolidated
statements of operations for the nine-month period ended September 30, 1999 and
year ended December 31, 1998 and related notes (collectively, the "Unaudited Pro
Forma Condensed Consolidated Financial Statements"). The pro forma condensed
consolidated balance sheet has been prepared assuming the acquisition of
WOKR(TV) and disposition of Florida occurred on September 30, 1999 and the pro
forma condensed consolidated statements of operations have been prepared
assuming the acquisition of WOKR(TV) and the sale of Airport and Florida
occurred on the first day of each period. The Unaudited Pro Forma Condensed
Consolidated Financial Statements are subject to a number of estimates,
assumptions and uncertainties and do not purport to reflect the financial
condition or results of operations that would have existed or occurred had such
transactions taken place on the dates indicated, nor do they purport to reflect
the financial condition or results of operations that will exist or occur in the
future. The Unaudited Pro Forma Condensed Consolidated Financial Statements
should be read in conjunction with the historical financial statements and notes
thereto of The Ackerley Group.
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA PRO FORMA
ACKERLEY GROUP FLORIDA ADJUSTMENTS ACKERLEY GROUP
-------------- ------- ----------- --------------
(IN THOUSANDS)
ASSETS
<S> <C> <C> <C> <C>
Current assets .......................... $ 86,934 $ 11,877 $ 124,242 (b) $199,299
Property and equipment, net ............. 138,504 16,270 -- 122,234
Intangibles, net ........................ 248,272 1,629 1,629 (a) 248,272
Other assets ............................ 38,897 93 93 (a) 38,897
-------- -------- --------------- --------
Total assets ........................ $512,607 $ 29,869 $ 125,964 $608,702
======== ======== =============== ========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities ..................... $ 72,036 $ 1,061 $ 950 $ 71,925
Long-term debt, net of
current portion ....................... 394,515 -- (181,000)(b) 213,515
Other long-term liabilities ............. 17,542 -- 17,542
Stockholders' deficiency ................ 28,514 28,808 306,014 (a) 305,720
-------- -------- --------------- --------
Total liabilities and
stockholders' deficiency .......... $512,607 $ 29,869 $ 62,561 $608,702
======== ======== =============== ========
</TABLE>
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
HISTORICAL
ACKERLEY HISTORICAL HISTORICAL HISTORICAL PRO FORMA PRO FORMA
GROUP FLORIDA WOKR AIRPORT ADJUSTMENTS ACKERLEY GROUP
--------- --------- --------- --------- ------------ ----------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Net revenue ........................ $ 195,166 $ 19,050 $ 3,898 $ -- $ -- $ 180,014
Operating expenses ................. 161,520 12,036 2,552 -- -- 152,036
Restructuring expenses ............. 1,108 -- -- -- -- 1,108
Depreciation and
amortization expenses ........... 19,584 1,483 1,136 -- 1,064 (c) 20,301
Gain on disposition of assets ...... (29,055) -- -- (1,626) -- (27,429)
Other non-cash expenses ............ 544 -- -- -- -- 544
Interest expense ................... 26,497 -- -- -- (13,483)(d) 13,014
--------- --------- --------- --------- ------------ ----------------
Total expenses ............... $ 180,198 $ 13,519 $ 3,688 $ (1,626) $ (12,419) $ 159,514
--------- --------- --------- --------- ------------ ----------------
Income (loss) before income taxes
and extraordinary item ........... 14,968 5,531 210 1,626 12,419 20,440
Income tax (benefit) expenses ...... 5,687 2,102 95 (e) 618 4,719 (e) 7,781
--------- --------- --------- --------- ------------ ----------------
Income (loss) before
extraordinary item .............. 9,281 3,429 115 1,008 7,700 12,659
Extraordinary item ................. (1,373) -- -- -- -- (1,373)
--------- --------- --------- --------- ------------ ----------------
Net income (loss) applicable
to common shares ................ $ 7,908 $ 3,429 $ 115 $ 1,008 $ 7,700 $ 11,286
========= ========= ========= ========= ============ ================
Per common share:
Income (loss) before
extraordinary item ........... $ 0.29 $ 0.11 $ -- $ 0.03 $ 0.24 $ 0.39
Extraordinary item .............. (0.04) -- -- -- -- (0.04)
--------- --------- --------- --------- ------------ ----------------
Net income (loss) .................. $ 0.25 $ 0.11 -- $ 0.03 $ 0.24 $ 0.35
========= ========= ========= ========= ============ ================
Per common share - assuming
dilution:
Income (loss) before
extraordinary item ........... $ 0.29 $ 0.11 $ -- $ 0.03 $ 0.24 $ 0.39
Extraordinary item .............. (0.05) -- -- -- -- (0.05)
--------- --------- --------- --------- ------------ ----------------
Net income (loss) .................. $ 0.24 $ 0.11 $ -- $ 0.03 $ 0.24 $ 0.34
========= ========= ========= ========= ============ ================
</TABLE>
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
HISTORICAL
ACKERLEY HISTORICAL HISTORICAL HISTORICAL PRO FORMA PRO FORMA
GROUP FLORIDA WOKR AIRPORT ADJUSTMENTS ACKERLEY GROUP
--------- --------- --------- --------- ------------ --------------
(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Net revenue ...................... $ 256,651 $ 25,528 $ 18,291 $ 16,204 $ --- $ 233,210
Operating expenses ............... 209,030 14,446 10,364 14,851 --- 190,192
Depreciation and amortization
expenses ...................... 16,574 1,660 4,658 921 3,219 (c) 21,870
Gain on disposition of assets .... (33,524) --- --- (33,651) --- 127
Other non-cash expenses .......... 452 --- --- --- --- 452
Interest expense ................. 25,109 --- --- --- (11,321)(d) 13,788
--------- --------- --------- --------- ------------ ---------
Total expenses ............. $ 217,641 $ 16,106 $ 15,022 $ (17,879) $ (8,102) $ 226,429
--------- --------- --------- --------- ------------ ---------
Income (loss) before income taxes
and extraordinary item ......... 39,010 9,422 3,269 34,083 8,102 6,781
Income tax (benefit) expense ..... 15,487 3,580 (e) 1,351 (e) 12,952 (e) 3,079 (e) 3,445
--------- --------- --------- --------- ------------ ---------
Income (loss) before extraordinary 23,523 5,842 1,918 21,131 5,023 3,336
item
Extraordinary item ............... (4,346) --- --- --- --- (4,346)
--------- --------- --------- --------- ------------ ---------
Net income (loss) applicable to .. $ 19,177 $ 5,842 $ 1,918 $ 21,131 $ 5,023 $ (1,010)
========= ========= ========= ========= ============ =========
common shares
Per common share:
Income (loss) before .......... $ 0.75 $ 0.18 $ 0.06 $ 0.67 $ 0.16 $ 0.11
extraordinary item
Extraordinary item ............ (0.14) --- --- --- --- (0.14)
--------- --------- --------- ------------ ---------
Net income (loss) ................ $ 0.61 $ 0.18 $ 0.06 $ 0.67 $ 0.16 $ (0.03)
========= ========= ========= ========= ============ =========
Per common share - assuming
dilution:
Income (loss) before .......... $ 0.74 $ 0.18 $ 0.06 $ 0.66 $ 0.16 $ 0.11
extraordinary item
Extraordinary item ............ (0.14) --- --- --- --- (0.14)
--------- --------- --------- --------- ------------ ---------
Net income (loss) ................ $ 0.60 $ 0.18 $ 0.06 $ 0.66 $ 0.16 $ (0.03)
========= ========= ========= ========= ============ =========
</TABLE>
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NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The accompanying Unaudited Pro Forma Condensed Consolidated Financial
Statements consist of the consolidated historical financial statements of the
Company and WOKR(TV), less the historical financial statements of Florida and
Airport, adjusted for certain pro forma adjustments, as described below:
(a) Balance sheet adjustments give effect to the elimination of the
historical net assets of Florida not sold by the Company.
(b) Reflects cash and repayments of bank borrowings with proceeds from
the sale of Florida.
(c) Represents the change in depreciation and amortization based on the
estimated allocation of the purchase price of WOKR(TV) to tangible and
intangible assets. The estimated useful lives of the assets acquired are as
follows:
<TABLE>
<CAPTION>
<S> <C>
Building and improvements................ 25 years
Broadcase equipment...................... 10 years
Other equipment.......................... 7 years
Intangible assets........................ 15 years
</TABLE>
(d) Represents the change in interest expense, assuming cash proceeds of
$300.0 million from the sale of Florida and $42.9 million from the sale of
Airport are applied to the reduction of the Company's bank borrowings and the
purchase of WOKR(TV) for $128.2 million is financed from bank borrowings. The
impact on interest expense is based on the Company's historical annual interest
rate on bank borrowings and the Company's historical annual interest rate earned
on the investment of its excess cash.
(e) Represents income tax expense based on the Company's estimated
statutory income tax rate.
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<TABLE>
<CAPTION>
Exhibits.
<S> <C> <C>
(10.1) Asset Purchase Agreement dated as of November 10, 1999
between AK Media Group, Inc. and Eller Media Company.*
(10.2) Amendment No. One to Asset Purchase Agreement dated as
of December 28, 1999 between AK Media Group, Inc., AK
Florida, Inc. and Eller Media Company.*
(99) Press Release dated January 6, 2000 issued by The
Ackerley Group, Inc. to announce the completion of the
sale of AK Media/Florida.*
--------------------
* Previously filed.
</TABLE>
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 hereunto duly authorized.
Dated: March 20, 2000
THE ACKERLEY GROUP, INC.
By:/s/ Keith W. Ritzmann
-----------------------------------
Keith W. Ritzmann
Senior Vice President and Chief
Technology Officer, Assistant
Secretary and Controller
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