SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A-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) March 29, 1995
BULL RUN CORPORATION
(Exact name of registrant as specified in its charter)
GEORGIA 0-9385 91-1117599
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
4370 PEACHTREE ROAD, N.E., ATLANTA, GEORGIA 30319
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 266-8333
N/A
(Former name or former address, if changed since last report.)
Page 1 of 23 pages
<PAGE>
Item 7 of Form 8-K is hereby amended as follows:
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired
See the Index to Financial Information following the signature
page hereto.
(b) Pro Forma Financial Information
See the Index to Financial Information following the signature
page hereto.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June 9, 1995 BULL RUN CORPORATION
By: /s/ Frederick J. Erickson
Frederick J. Erickson
Vice President - Finance,
Chief Financial Officer, Treasurer and
Assistant Secretary
3
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Audited Financial Statements of Capital Sports Properties, Inc.
as of and for the years ended December 31, 1994 and 1993, and
the period from December 8, 1992 (inception) to December 31, 1992 . . F-2
Financial Statements of Capital Sports Properties, Inc. as of and
for the three months ended March 31, 1995 (Unaudited) . . . . . . . F-11
Pro Forma Condensed Consolidated Statements of Operations of
Bull Run Corporation (Unaudited) . . . . . . . . . . . . . . . . . F-19
F-1
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
(formerly HCI Acquisition Corporation)
Financial Statements
Years Ended December 31, 1994 and 1993 and
For the Period December 8, 1992 (inception) to
December 31, 1992
(With Independent Auditors' Report Thereon)
F-2
<PAGE>
Independent Auditors' Report
The Board of Directors
Capital Sports Properties, Inc.:
We have audited the accompanying balance sheets of Capital Sports Properties,
Inc. (formerly HCI Acquisition Corporation) as of December 31, 1994 and 1993,
and the related statements of earnings, changes in stockholders' equity and
cash flows for the years then ended and for the period from December 8, 1992
(inception) to December 31, 1992. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Capital Sports Properties, Inc.
as of December 31, 1994 and 1993, and the results of its operations and
its cash flows for the years then ended and for the period from December
8, 1992 (inception) to December 31, 1992 in conformity with generally
accepted accounting principles.
/s/ KPMG Peat Marwick LLP
June 9, 1995
F-3
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
(formerly HCI Acquisition Corporation)
Balance Sheets
December 31, 1994 and 1993
Assets 1994 1993
Investments (note 3) $ 5,000,000 5,000,000
Accrued dividends receivable (note 3) 817,534 417,534
$ 5,817,534 5,417,534
Liabilities and Stockholders' Equity
Accrued income taxes $ 48,838 23,834
Deferred income taxes (notes 2 and 5) 8,557 5,475
Total liabilities 57,395 29,309
Stockholders' equity (note 4):
Common stock 1 1
Additional paid-in capital 4,999,999 4,999,999
Retained earnings 760,139 388,225
Total stockholders' equity 5,760,139 5,388,225
$ 5,817,534 5,417,534
See accompanying notes to financial statements.
F-4
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
(formerly HCI Acquisition Corporation)
Statements of Earnings
Years Ended December 31, 1994 and 1993 and
Period from December 8, 1992 (inception) to December 31, 1992
1994 1993 1992
Dividends (notes 2 and 3) $ 400,000 400,000 17,534
Earnings before income taxes 400,000 400,000 17,534
Income taxes (notes 2 and 5) (28,086) (28,117) (1,192)
Net earnings $ 371,914 371,883 16,342
See accompanying notes to financial statements.
F-5
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
(formerly HCI Acquisition Corporation)
Statements of Changes in Stockholders' Equity
Years Ended December 31, 1994 and 1993 and
Period from December 8, 1992 (inception) to December 31, 1992
Common Additional Retained
Stock Paid-in Capital Earnings Total
Issue of stock $1 4,999,999 -- 5,000,000
Net earnings -- -- 16,342 16,342
Balance at December 31, 1992 1 4,999,999 16,342 5,016,342
Net earnings -- -- 371,883 371,883
Balance at December 31, 1993 1 4,999,999 388,225 5,388,225
Net earnings -- -- 371,914 371,914
Balance at December 31, 1994 $1 4,999,999 760,139 5,760,139
See accompanying notes to financial statements.
F-6
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
(formerly HCI Acquisition Corporation)
Statements of Cash Flows
Years Ended December 31, 1994 and 1993 and
Period from December 8, 1992 (inception) to December 31, 1992
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 371,914 371,883 16,342
Adjustments to reconcile net earnings to net cash:
Accrued dividends receivable (400,000) (400,000) (17,534)
Accrued income taxes 25,004 23,834 --
Increase in deferred income taxes 3,082 4,283 1,192
Cash provided by operating activities -- -- --
Cash flows from investing activities:
Purchase of investments -- -- (5,000,000)
Cash used in investing activities -- -- (5,000,000)
Cash flows from financing activities:
Issue of stock -- -- 5,000,000
Cash provided by financing activities -- -- 5,000,000
Net increase in cash -- -- --
Cash at beginning of year -- -- --
Cash at end of year $ -- -- --
Supplemental disclosures of cash flow information:
Interest paid $ -- -- --
Taxes paid $ -- -- --
</TABLE>
See accompanying notes to financial statements.
F-7
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
(formerly HCI Acquisition Corporation)
Notes to Financial Statements
December 31, 1994 and 1993
(1) Organization and Description of Business
Capital Sports Properties, Inc. (the "Company"), a Delaware corporation, was
incorporated on December 8, 1992 as HCI Acquisition Corporation. The Company's
name was changed to Capital Sports Properties, Inc. on May 18, 1993.
The Company holds an investment in Host Communications, Inc. which provides
media and marketing services to universities, athletic conferences, and the
National Collegiate Athletic Association.
(2) Summary of Significant Accounting Policies
Investments
The Company accounts for its investment in Host Communications, Inc. on the
cost method. Losses are recognized, if appropriate, for any decline in value
which is considered other than temporary.
Revenue Recognition
Dividends on the Company's preferred stock investment are recognized on the
accrual basis of accounting.
Taxes
The Company has entered into a tax sharing agreement with General Electric
Capital Corporation ("GE Capital") (see note 4), whereby General Electric
Company, the ultimate parent of GE Capital, files a consolidated U.S. federal
income tax return which includes the Company. The provisions for estimated
taxes payable include the effect of the Company on the consolidated return.
(3) Investments
On December 15, 1992, the Company acquired 50,000 shares of Series B Cumulative
Preferred Stock ("Preferred Stock") issued by Host Communications, Inc.
("Host") and detachable warrants to purchase 447,002 shares of common stock
of Host ("Warrants").
F-8
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
(formerly HCI Acquisition Corporation)
Notes to Financial Statements
The Preferred Stock pays an annual dividend of $8.00 per share as declared by
Host's Board of Directors. Host may redeem the Preferred Stock at any time,
at a price of $100 per share plus a stated premium and if not before, face
mandatory redemption on December 15, 1999 for $7,800,000, including
cumulative dividends if none have been paid as of that date. The Warrants
allow the Company to purchase one share of common stock per warrant at a
price of $0.01 per share. The Warrants were exercisable upon issuance by Host
and expire on December 15, 2002. The Company may require Host to redeem the
Warrants after the earlier of December 15, 1997 or 18 months after an initial
public offering of Host's common stock.
The fair value of the Preferred Stock, including the Warrants is estimated at
$19,326,000 at December 31, 1994.
(4) Stockholders' Equity
On December 8, 1992 the Company authorized 200 shares of common stock, $0.01
par value per share. On December 15, 1992 the Company issued 88 shares of
common stock to GE Capital, and 12 shares of common stock to other investors
at $50,000 per share.
At December 31, 1994 and 1993 the Company had 100 shares of common stock
issued and outstanding.
On March 29, 1995, Bull Run Corporation purchased 44 shares of common stock
from GE Capital and 6 shares of common stock from the other investors.
(5) Income Taxes
1994 1993 1992
Earnings before taxes $ 400,000 400,000 17,534
Federal tax at statutory rate $ 140,000 140,000 5,962
Dividends received deduction (112,000) (112,000) (4,770)
Change in income tax rate -- 35 --
Other 86 82 --
Tax expense $ 28,086 28,117 1,192
F-9
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
(formerly HCI Acquisition Corporation)
Notes to Financial Statements
Current and deferred tax provisions were as follows:
1994 1993 1992
Current:
Federal $ 25,004 23,834 --
State and local -- -- --
25,004 23,834 --
Deferred:
Federal 3,082 4,283 1,192
State and local -- -- --
3,082 4,283 1,192
Total $ 28,086 28,117 1,192
F-10
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
Financial Statements
Three Months Ended March 31, 1995
(Unaudited)
F-11
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
Balance Sheet
March 31, 1995
(Unaudited)
Assets
Investments (note 3) $ 5,000,000
Accrued dividends receivable (note 3) 917,534
$ 5,917,534
Liabilities and Stockholders' Equity
Accrued income taxes $ 55,088
Deferred income taxes (notes 2 and 5) 9,307
Total liabilities 64,395
Stockholders' equity (note 4):
Common stock 1
Additional paid-in capital 4,999,999
Retained earnings 853,139
Total stockholders' equity 5,853,139
$ 5,917,534
See accompanying notes to financial statements.
F-12
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
Statement of Earnings
Three Months Ended March 31, 1995
(Unaudited)
Dividends (notes 2 and 3) $ 100,000
Earnings before income taxes 100,000
Income taxes (notes 2 and 5) (7,000)
Net earnings $ 93,000
See accompanying notes to financial statements.
F-13
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
Statement of Changes in Stockholders' Equity
Three Months Ended March 31, 1995
(Unaudited)
Common Additional Retained
Stock Paid-in Capital Earnings Total
Balance at December 31, 1994 $ 1 4,999,999 760,139 5,760,139
Net earnings -- -- 93,000 93,000
Balance at March 31, 1995 $ 1 4,999,999 853,139 5,853,139
See accompanying notes to financial statements.
F-14
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
Statement of Cash Flows
Three Months Ended March 31, 1995
(Unaudited)
Cash flows from operating activities:
Net earnings $ 93,000
Adjustments to reconcile net earnings to net cash:
Accrued dividends receivable (100,000)
Accrued income taxes 6,250
Increase in deferred income taxes 750
Cash provided by operating activities --
Net increase in cash --
Cash at beginning of year --
Cash at end of year $ --
Supplemental disclosures of cash flow information:
Interest paid $ --
Taxes paid $ --
See accompanying notes to financial statements.
F-15
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
Notes to Financial Statements
March 31, 1995
(Unaudited)
(1) Organization and Description of Business
Capital Sports Properties, Inc. (the "Company"), a Delaware corporation, was
incorporated on December 8, 1992 as HCI Acquisition Corporation. The
Company's name was changed to Capital Sports Properties, Inc. on May 18, 1993.
The Company holds an investment in Host Communications, Inc. which provides
media and marketing services to universities, athletic conferences, and the
National Collegiate Athletic Association.
(2) Summary of Significant Accounting Policies
Investments
The Company accounts for its investment in Host Communications, Inc. on the
cost method. Losses are recognized, if appropriate, for any decline in value
which is considered other than temporary.
Revenue Recognition
Dividends on the Company's preferred stock investment are recognized on the
accrual basis of accounting.
Taxes
The Company has entered into a tax sharing agreement with General Electric
Capital Corporation ("GE Capital") (see note 4), whereby General Electric
Company, the ultimate parent of GE Capital, files a consolidated U.S. federal
income tax return which includes the Company. The provisions for estimated
taxes payable include the effect of the Company on the consolidated return.
(3) Investments
On December 15, 1992, the Company acquired 50,000 shares of Series B
Cumulative Preferred Stock ("Preferred Stock") issued by Host Communications,
Inc. ("Host") and detachable warrants to purchase 447,002 shares of common
stock of Host ("Warrants").
F-16
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
Notes to Financial Statements
The Preferred Stock pays an annual dividend of $8.00 per share as declared by
Host's Board of Directors. Host may redeem the Preferred Stock at any time,
at a price of $100 per share plus a stated premium and if not before, face
mandatory redemption on December 15, 1999 for $7,800,000, including
cumulative dividends if none have been paid as of that date. The Warrants
allow the Company to purchase one share of common stock per warrant at a
price of $0.01 per share. The Warrants were exercisable upon issuance by Host
and expire on December 15, 2002. The Company may require Host to redeem the
Warrants after the earlier of December 15, 1997 or 18 months after an initial
public offering of Host's common stock.
The fair value of the Preferred Stock, including the Warrants is estimated
at $19,326,000 at March 31, 1995.
(4) Stockholders' Equity
On December 8, 1992 the Company authorized 200 shares of common stock, $0.01
par value per share. On December 15, 1992 the Company issued 88 shares of
common stock to GE Capital, and 12 shares of common stock to other investors
at $50,000 per share.
At March 31, 1995 the Company had 100 shares of common stock issued and
outstanding.
On March 29, 1995, Bull Run Corporation purchased 44 shares of common stock
from GE Capital and 6 shares of common stock from the other investors.
(5) Income Taxes
Earnings before taxes $ 100,000
Federal tax at statutory rate $ 35,000
Dividends received deduction (28,000)
Tax expense $ 7,000
F-17
<PAGE>
CAPITAL SPORTS PROPERTIES, INC.
Notes to Financial Statements
Current and deferred tax provisions were as follows:
Current:
Federal $ 6,250
State and local --
6,250
Deferred:
Federal 750
State and local --
750
Total $ 7,000
F-18
<PAGE>
BULL RUN CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
The following unaudited pro forma condensed consolidated statements of
operations presents the consolidated statements of operations of Bull Run
Corporation ("Bull Run") for the three months ended March 31, 1995 and for
the year ended December 31, 1994, as if Bull Run had acquired its
investment in Capital Sports Properties, Inc. ("CSP") at the beginning of
the fiscal year ended December 31, 1994. The unaudited pro forma condensed
consolidated statements of operations of Bull Run also reflect the impact
of Bull Run's merger with Datasouth Computer Corporation effective November
29, 1994 as if the merger had occurred at the beginning of the year ended
December 31, 1994, and the pro forma impact of the acquisitions since
January 1, 1994 of Datasouth's investee, Gray Communications Systems, Inc.
("Gray"). No unaudited pro forma condensed consolidated balance sheet is
presented herein since the investment in CSP has already been reflected in
Bull Run's consolidated balance sheet as of March 31, 1995. The pro forma
condensed consolidated statements of operations should be read in
conjunction with the historical financial statements and related notes
thereto of Bull Run, which are contained in Bull Run's Quarterly Report on
Form 10-QSB for the period ended March 31, 1995 and Annual Report on Form
10-KSB for the year ended December 31, 1994, and the financial statements
of CSP included herein. The unaudited pro forma financial information is
provided for comparative purposes only, and does not purport to be
indicative of the results that actually would have been obtained if the
acquisition had been effected on the dates indicated or of those results
that may be obtained in the future.
<TABLE>
<CAPTION>
Three Months Ended March 31, 1995
Historical Pro Forma
Bull Run Adjustments Pro Forma
<S> <C> <C> <C>
Revenue from printer operations . . . . . . . . . $ 7,439 $ $ 7,439
Cost of goods sold . . . . . . . . . . . . . . . 5,161 5,161
Gross profit . . . . . . . . . . . . . . . . 2,278 2,278
Other operating revenue . . . . . . . . . . . . . 84 84
Operating expenses . . . . . . . . . . . . . . . (1,831) (1,831)
Income from operations . . . . . . . . . . . 531 531
Other income (expense):
Equity in earnings of affiliates . . . . . . . 21 (a) 46 67
Interest, net . . . . . . . . . . . . . . . . . (70)(b) (218) (288)
Income (loss) before income taxes . . . . . 482 (172) 310
Income tax (provision) benefit . . . . . . . . . (215)(c) 66 (149)
Net income (loss) . . . . . . . . . . . . . $ 267 $ (106) $ 161
Earnings per share . . . . . . . . . . . . . . . $ .01 $ .01
Average number of shares outstanding . . . . . . 23,071 23,071
</TABLE>
(Amounts in 000's except earnings per share)
See notes to pro forma financial information on the next page.
F-19
<PAGE>
(a) Adjustment to equity in earnings of affiliates to reflect Bull Run's
pro forma equity in the earnings of CSP.
(b) Adjustment to interest expense to reflect pro forma effects of
financing Bull Run's investment in CSP, assuming an average interest
rate of 8.5%.
(c) Adjustment to the income tax provision to reflect the tax effect of
pro forma adjustments to Bull Run's equity in earnings of CSP and Bull
Run's interest expense.
<TABLE>
<CAPTION>
Year Ended December 31, 1994
Historical Pro Forma Pro Forma Pro Forma
Bull Run Adjustments Bull Run Adjustments Pro Forma
<S> <C> <C> <C> <C> <C>
Revenue from printer operations . . . . . $ 2,751 (a)$18,995 $21,746 $ $21,746
Cost of goods sold . . . . . . . . . . . 1,853 (a) 13,336 15,189 15,189
Gross profit . . . . . . . . . . . . 898 5,659 6,557 6,557
Other operating revenue . . . . . . . . . 323 323 323
Operating expenses . . . . . . . . . . . (1,174) (a) (4,873) (6,047) (6,047)
Income from operations . . . . . . . 47 786 833 833
Other income (expense):
Equity in earnings of affiliates . . . 266 (a) (29) 237 (b) 186 423
Interest, net . . . . . . . . . . . . (11) (a) (148) (159)(c) (892) (1,051)
Income (loss) before income taxes . 302 609 911 (706) 205
Income tax (provision) benefit . . . . . (86) (a) (159) (245)(d) 141 (104)
Net income (loss) . . . . . . . . . $ 216 $ 450 $ 666 $ (565) $ 101
Earnings per share . . . . . . . . . . . $ .02 $ .03 $ .00
Average number of shares outstanding . . 13,534 (a) 8,602 22,136 22,136
</TABLE>
(Amounts in 000's except earnings per share)
(a) Adjustments to reflect the pro forma effects of the merger of
Datasouth into a wholly-owned subsidiary of Bull Run, as follows:
- Consolidation of Datasouth's results of operations;
- Elimination of Bull Run's pre-merger equity in earnings of Datasouth
of $(294);
- Elimination of Datasouth's merger expenses of $338;
- Amortization of goodwill recognized as a result of the merger of
$(270);
- Adjustment to Datasouth's equity in earnings of Gray of $(111) as a
result of the pro forma effects of Gray's acquisitions;
- Adjustment to Bull Run's consolidated income tax provision of $(159)
to reflect the merger and pro forma adjustments related to the merger;
- Adjustment to average number of shares outstanding to reflect the
issuance of Bull Run common stock in connection with the merger.
(b) Adjustment to Bull Run's equity in earnings of affiliates to reflect
Bull Run's pro forma equity in the earnings of CSP.
(c) Adjustment to interest expense to reflect pro forma effects of
financing Bull Run's investment in CSP, assuming an average interest
rate of 8.5%.
(d) Adjustment to the income tax provision to reflect the tax effect of
pro forma adjustments to Bull Run's equity in earnings of CSP and
interest expense.
F-20
