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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
---------------
/ / 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 0-9786
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UNITED TELEVISION, INC.
-----------------------
(Exact name of registrant as specified in its charter)
DELAWARE 41-0778377
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
132 S. Rodeo Drive, Fourth Floor, Beverly Hills, CA 90212
- ---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(310) 281-4844
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(Registrant's telephone number, including area code)
Not Applicable
--------------
(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
---- ----
As of May 09, 1996, there were 9,445,138 shares of the
registrant's common stock outstanding.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - in thousands)
<CAPTION>
March 31, December 31,
1996 1995
-------- ------------
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and cash equivalents $ 31,958 $ 16,888
Marketable securities 162,502 174,478
Accrued interest receivable 1,004 2,147
Accounts receivable, net 30,861 38,934
Film contract rights 22,198 27,343
Deferred tax benefit 4,078 3,679
Prepaid expenses and other
current assets 2,703 1,773
-------- --------
Total current assets 255,304 265,242
-------- --------
Marketable Securities, noncurrent 34,716 29,538
-------- --------
Film Contract Rights, noncurrent 5,392 7,943
-------- --------
Property and Equipment, net 15,252 15,425
-------- --------
Intangible Assets, net 12,222 12,374
-------- --------
Other Assets 582 465
-------- --------
$323,468 $330,987
======== ========
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LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
Current Liabilities:
Film contracts payable $ 23,944 $ 25,617
Accounts payable 5,680 3,199
Dividends payable 4,834 -
Accrued expenses 15,624 19,477
Income taxes payable 14,340 8,885
-------- --------
Total current liabilities 64,422 57,178
-------- --------
Film Contracts Payable after One Year 21,899 25,489
-------- --------
Other Liabilities 7,133 7,851
-------- --------
Shareholders' Investment:
Preferred stock $1.00 par value - -
Common stock $.10 par value 967 961
Additional paid-in-capital 2,552 133
Retained earnings 236,371 232,839
Treasury stock, at cost (15,317) -
Increase to reflect marketable
securities at fair value 5,441 6,536
-------- --------
230,014 240,469
-------- --------
$323,468 $330,987
======== ========
<FN>
The accompanying notes to condensed consolidated financial
statements are an integral part of these balance sheets.
</TABLE>
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<TABLE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited-in thousands except per share data)
<CAPTION>
For the Three Months
Ended March 31,
------------- -------
1996 1995
-------- --------
<S> <C> <C>
Net Revenues $ 40,234 $ 36,932
-------- --------
Expenses:
Operating 15,706 14,661
Selling, general and administrative 13,183 11,412
-------- --------
28,889 26,073
-------- --------
Operating income 11,345 10,859
Interest and Other Income 2,471 2,567
-------- --------
Income before income taxes 13,816 13,426
Income Tax Provision (5,450) (5,700)
-------- --------
Net income $ 8,366 $ 7,726
======== ========
Net Income per Share $ .87 $ .78
======== ========
Average Outstanding Common Shares 9,603 9,900
======== ========
<FN>
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.
</TABLE>
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UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
<CAPTION>
For the Three Months
Ended March 31,
---------------------
1996 1995
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 8,366 $ 7,726
Adjustment to reconcile net income
to net cash provided from
operating activities:
Film contract payments (6,382) (6,159)
Film contract amortization 6,821 4,528
Depreciation and
other amortization 1,098 1,170
Gain on dispositions of
marketable securities (79) (24)
Changes in assets and liabilities:
Accounts receivable 8,073 7,881
Prepaid and other assets 2,090 2,680
Accounts payable and
accrued expenses (1,372) (2,883)
Income taxes payable 5,455 2,388
-------- --------
Net cash provided from
operating activities 24,070 17,307
-------- --------
Cash Flows from Investing Activities:
Sales of marketable securities 105,813 13,647
Purchases of marketable securities (101,148) (43,201)
Capital expenditures (773) (409)
-------- --------
Net cash provided from
(used in) investing
activities 3,892 (29,963)
-------- --------
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Cash Flows from Financing Activities:
Proceeds from exercise of
stock options 2,425 447
Purchases of treasury stock (15,317) (9,809)
-------- --------
Net cash used in financing
activities (12,892) (9,362)
-------- --------
Net Increase (Decrease) in Cash and
Cash Equivalents 15,070 (22,018)
Cash and Cash Equivalents at
Beginning of Period 16,888 44,494
-------- --------
Cash and Cash Equivalents at
End of Period $ 31,958 $ 22,476
======== ========
<FN>
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.
</TABLE>
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UNITED TELEVISION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. PRINCIPLES OF CONSOLIDATION:
The accompanying condensed consolidated financial
statements include the accounts of UTV and its subsidiaries
after elimination of all significant intercompany accounts
and transactions. UTV is a majority owned (58.0% at
March 31, 1996) subsidiary of BHC Communications, Inc. (BHC),
a majority owned subsidiary of Chris-Craft Industries, Inc.
The financial information included herein has been
prepared by UTV, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance
with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations.
However, UTV believes that the disclosures herein are
adequate to make the information presented not misleading.
It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial
statements and the notes thereto included in UTV's latest
annual report on Form 10-K. The information furnished
reflects all adjustments (consisting only of normal recurring
adjustments) which are, in the opinion of management,
necessary to a fair statement of the results for the
interim periods. The results for this interim period are
not necessarily indicative of results to be expected for the
full fiscal year, due to seasonal factors, among others.
2. MARKETABLE SECURITIES:
Marketable securities include the following
(in thousands):
[CAPTION]
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Fair
Value Cost
------- ------
<S> <C> <C>
Current Assets:
March 31, 1996
U.S. Government securities $153,822 $153,756
Global government bond fund 9,684 10,000
-------- --------
$163,506 $163,756
======== ========
December 31, 1995:
U.S. Government securities $166,617 $164,701
Global government bond fund 10,008 10,000
-------- --------
$176,625 $174,701
======== ========
Noncurrent Assets:
March 31, 1996
BHC Class A common stock $ 21,178 $ 11,325
Other marketable equity
securities 13,538 13,193
-------- --------
$ 34,716 $ 24,518
======== ========
December 31, 1995:
BHC Class A common stock $ 21,404 $ 11,325
Other marketable equity
securities 8,134 6,836
-------- --------
$ 29,538 $ 18,161
======== ========
The following table provides certain additional
information related to UTV's marketable securities as of
and for the quarter ended March 31, 1996 (in thousands):
<CAPTION>
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Debt Equity
Securities Securities
---------- ----------
<S> <C> <C>
Maturing within two years $122,078 $ -
Maturing in two to three years 30,740 -
Gross unrealized holding gains 128 10,797
Gross unrealized holding losses 1,382 599
Sales proceeds 105,094 719
Realized gains 196 25
Realized losses 142 -
<FN>
For purposes of computing realized gains and losses,
cost was determined using the specific identification method.
</TABLE>
3. SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes for the first quarter of 1996
and 1995 totaled ($5,000) and $3,312,000, respectively.
4. COMMITMENTS:
The aggregate amount payable by UTV under contracts for
programming not currently available for telecasting and,
accordingly, not included in film contracts payable and the
related contract rights in the accompanying Condensed
Consolidated Balance Sheet, totaled $55,772,000 at March
31, 1996. UTV has a commitment to invest over time up to
$40,000,000 in a management buyout limited partnership.
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UNITED TELEVISION, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations.
-----------------------------------
Liquidity and Capital Resources
- -------------------------------
UTV's operating cash flow is generated primarily by its
television broadcasting operations and generally parallels
the earnings of UTV's television stations, adjusted to reflect
the difference between film contract payments and film
contract amortization. The relationship between such payments
and amortization may vary greatly between periods
(amortization exceeded payments by $439,000 in the first
quarter of 1996, while payments exceeded amortization by
$1,631,000 in the first quarter of 1995)and is dependent
upon the mix of programs aired and payment terms of the
stations' contracts. UTV's television stations generated
substantial cash flow in the first quarter of 1996, and are
expected to do the same for the full year. With its
considerable cash and marketable securities balances, UTV
continues to be well positioned to pursue new opportunities
and deal effectively with uncertainties that may arise in
the television broadcasting industry or economic environment.
UTV's cash flow is augmented by interest and dividend
income associated with its cash and marketable securities.
UTV's cash flow from operations for the first quarter of
1996 totaled $24,070,000, and cash and marketable securities
increased $8,272,000 to $229,176,000 at March 31, 1996.
UTV has a commitment to invest over time up to
$40,000,000 in a management buyout limited partnership.
Working capital decreased $17,172,000 during the first
quarter of 1996 to $190,882,000 at March 31, 1996, primarily
reflecting cash used to acquire treasury shares, the accrual
for payment in April of a dividend of $.50 per share, and
purchases of noncurrent marketable securities. Working
capital at March 31, 1996 remains substantially in excess
of UTV's normal operating requirements.
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UTV is engaged in an ongoing review of business
opportunities in media, entertainment, communications and
other industries. UTV currently has no outstanding debt and
believes it is capable of raising significant additional
capital to augment its already substantial liquid assets, if
desired, to fund any resulting expansion.
UTV regularly makes current commitments for programming
that will not be available for telecasting until future
dates and had commitments for payments for such programming
totaling $55,772,000 at March 31, 1996. UTV expects to
continue to satisfy these commitments with funds provided
from operations.
UTV's Board of Directors has from time to time authorized
the purchase of UTV's common shares. At March 31, 1996,
1,023,349 shares were authorized for purchase. Since January
1, 1994, through March 31, 1996, 808,490 shares were purchased
for an aggregate cost of $55,668,000, of which 168,900 shares
were purchased during the first quarter of 1996 for an
aggregate cost of $15,317,000.
UTV's commitments for capital expenditures at March 31,
1996 were not material in relation to UTV's financial
position. Funds for capital expenditures have generally been
provided from operations. UTV expects that future capital
expenditures for its present business will be funded from
operations or current cash balances. UTV has no present
requirement for additional capital.
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Results of Operations
- ---------------------
UTV's primary source of revenue is the sale to advertisers
of time on its five television stations. First quarter net
income totaled $8,366,000, an 8% increase over last year's
first quarter net income of $7,726,000. Reflecting a
reduction in average common shares outstanding, earnings per
share rose 12% to $.87 in 1996 from $.78 in 1995.
Consolidated net revenue for the quarter increased 9% to
a record $40,234,000, from $36,932,000 in 1995. A significant
portion of the increase resulted from commission income
generated by UTV's national sales subsidiary, which began
operations in the third quarter of 1995. Excluding commission
revenue, net revenues of UTV's television station group rose
3% to record levels. After an 11% increase in operating
expenses, operating income totaled a record $11,345,000, a 4%
increase from last year's $10,859,000. The increase in
operating expenses was attributable primarily to an increase
in programming costs and sales expenses associated with the
new sales subsidiary.
Interest and other income for the quarter decreased
slightly to $2,471,000, from $2,567,000 in 1995.
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UNITED TELEVISION, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) None.
(b) No report on Form 8-K was filed during the quarter
for which this report is being filed.
SIGNATURE
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.
UNITED TELEVISION, INC.
(Registrant)
Date: May 13, 1996 By: /s/ Garth S. Lindsey
-------------- ---------------------
Garth S. Lindsey
Executive Vice President
and Chief Financial
Officer (Principal
Financial and Accounting
Officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM 10Q DATED
MARCH 31, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 31,958
<SECURITIES> 162,502
<RECEIVABLES> 30,861
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 255,304
<PP&E> 64,798
<DEPRECIATION> 49,546
<TOTAL-ASSETS> 323,468
<CURRENT-LIABILITIES> 64,422
<BONDS> 0
<COMMON> 967
0
0
<OTHER-SE> 229,047
<TOTAL-LIABILITY-AND-EQUITY> 323,468
<SALES> 40,234
<TOTAL-REVENUES> 40,234
<CGS> 28,889
<TOTAL-COSTS> 28,889
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 13,816
<INCOME-TAX> 5,450
<INCOME-CONTINUING> 8,366
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,366
<EPS-PRIMARY> .87
<EPS-DILUTED> .87
</TABLE>
