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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, 1997
--------------
/ / 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 1-8411
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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 8, 1997, there were 9,357,155 shares of the
registrant's common stock outstanding.
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<TABLE>
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,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and cash equivalents $ 58,179 $ 21,695
Marketable securities 140,703 159,257
Accrued interest receivable 1,923 2,336
Accounts receivable, net 30,097 37,556
Film contract rights 16,140 21,045
Deferred tax benefit 4,787 4,536
Prepaid expenses and other
current assets 4,120 3,370
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Total current assets 255,949 249,795
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Marketable Securities, noncurrent 37,161 36,876
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Other Investments 17,531 17,531
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Film Contract Rights, noncurrent 5,036 4,691
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Property and Equipment, net 14,291 14,533
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Intangible Assets, net 11,613 11,765
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Other Assets 416 407
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$ 341,997 $ 335,598
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LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
Current Liabilities:
Film contracts payable $ 24,306 $ 25,402
Accounts payable 4,181 3,645
Dividend payable 4,687 -
Accrued expenses 14,830 18,524
Income taxes payable 15,929 10,968
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Total current liabilities 63,933 58,539
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Film Contracts Payable after One Year 16,785 19,177
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Other Liabilities 7,463 7,441
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Shareholders' Investment:
Preferred stock $1.00 par value - -
Common stock $.10 par value 938 934
Additional paid-in capital 1,905 133
Retained earnings 247,357 242,979
Treasury stock, at cost (2,430) -
Increase to reflect marketable
securities at fair value 6,046 6,395
----------- -----------
253,816 250,441
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$ 341,997 $ 335,598
=========== ===========
<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,
---------------------
1997 1996
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<S> <C> <C>
Net Revenues $ 38,327 $ 40,234
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Expenses:
Operating 12,925 15,706
Selling, general and administrative 13,428 13,183
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26,353 28,889
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Operating Income 11,974 11,345
Interest and Other Income 3,066 2,471
-------- --------
Income before Provision for Income Taxes 15,040 13,816
Provision for income taxes (5,975) (5,450)
-------- --------
Net Income $ 9,065 $ 8,366
======== ========
Net Income per Share $ .97 $ .87
======== ========
Average Outstanding Common Shares 9,364 9,603
======== ========
<FN>
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.
</TABLE>
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<TABLE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
<CAPTION>
Three Months
Ended March 31,
-------------------
1997 1996
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 9,065 $ 8,366
Adjustment to reconcile net income to net
cash provided from operating activities:
Film contract payments (5,577) (6,382)
Film contract amortization 4,998 6,821
Depreciation and other amortization 1,204 1,098
Gain on dispositions of marketable securities (281) (79)
Changes in assets and liabilities:
Accounts receivable 7,459 8,073
Prepaid and other assets 1,305 2,090
Accounts payable and accrued expenses (3,158) (1,372)
Income taxes payable 4,961 5,455
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Net cash provided from
operating activities 19,976 24,070
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Cash Flows from Investing Activities:
Sales of marketable securities 29,014 105,813
Purchases of marketable securities (11,042) (101,148)
Capital expenditures (810) (773)
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Net cash provided from
investing activities 17,162 3,892
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Cash Flows from Financing Activities:
Proceeds from exercise of stock options 1,776 2,425
Purchases of treasury stock (2,430) (15,317)
-------- --------
Net cash used in
financing activities (654) (12,892)
-------- --------
Net Increase in Cash and Cash Equivalents 36,484 15,070
Cash and Cash Equivalents at Beginning of Period 21,695 16,888
-------- --------
Cash and Cash Equivalents at End of Period $ 58,179 $ 31,958
======== ========
<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 (58.9% at March
31, 1997) 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:
All of UTV's marketable securities have been categorized
as available for sale and as a result are carried at fair
market value. At March 31, 1997, all U.S. Government
securities mature within two years. Marketable securities
classified by security type are as follows (in thousands):
Gross Unrealized
----------------
Cost Gains Losses Fair Value
-------- ------- ------ ----------
March 31, 1997
U.S. Government securities $131,990 $ 3 $ 888 $131,105
BHC Class A common stock 11,325 12,514 - 23,839
Other equity securities 24,601 664 2,345 22,920
-------- ------- ------ --------
$167,916 $13,181 $3,233 $177,864
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Gross Unrealized
----------------
Cost Gains Losses Fair Value
-------- ------- ------ ----------
December 31, 1996:
U.S. Government securities $149,908 $ 87 $ 555 $149,440
BHC Class A common stock 11,325 11,637 - 22,962
Other equity securities 24,382 1,004 1,655 23,731
-------- ------- ------ --------
$185,615 $12,728 $2,210 $196,133
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The difference between cost and fair value, net of taxes, is
reflected as an increase to shareholders' investment in the accompanying
balance sheets.
For the quarter ended March 31, 1997, UTV realized gains of
$281,000. For purposes of computing realized gains and losses,
cost was determined using the specific identification method.
3. SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid (refund received) for income taxes for the first
quarter of 1997 and 1996 totaled $1,014,000 and ($5,000), 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 nor the
related contract rights in the accompanying Condensed
Consolidated Balance Sheets, totaled $60,929,000 at March 31,
1997. UTV has a remaining commitment to invest over time
up to $19,807,000 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
(payments exceeded amortization by $579,000 in the first
quarter of 1997, while amortization exceeded payments by
$439,000 in the first quarter of 1996) and is dependent upon
the mix of programs aired and payment terms of the stations'
contracts. UTV stations generated substantial cash flow in the
first quarter of 1997, 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 1997
totaled $19,976,000, and cash and marketable securities
increased $17,930,000 to $198,882,000 at March 31, 1997.
UTV has a remaining commitment to invest over time up to
$19,807,000 in a management buyout limited partnership.
Working capital increased $760,000 during the first quarter
of 1997 to $192,016,000 at March 31, 1997. Working capital at
March 31, 1997 remains substantially in excess of UTV's normal
operating requirements.
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
$60,929,000 at March 31, 1997. UTV expects to continue to
satisfy these commitments with funds provided from operations.
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UTV's Board of Directors has from time to time authorized
the purchase of UTV common shares. At March 31, 1997, purchase
of an additional 801,149 shares was so authorized. From January 1,
1995, through March 31, 1997, 824,268 shares were purchased
for an aggregate cost of $65,689,000, of which 27,600 shares
were purchased during the first quarter of 1997 for an aggregate
cost of $2,430,000.
UTV's commitments for capital expenditures at March 31,
1997 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.
Results of Operations
- ---------------------
UTV's primary source of revenue is the sale to advertisers
of time on its five television stations. First quarter 1997 net
income totaled $9,065,000, an 8% increase over last year's
first quarter net income of $8,366,000. Reflecting a reduction
in average common shares outstanding, earnings per share rose
11% to $.97 in 1997 from $.87 in 1996.
As a result of lackluster demand by national advertisers,
consolidated net revenue for the quarter decreased 5% to
$38,327,000, from $40,234,000 in 1996. The decrease also
reflects a reduction in barter revenue recorded in the quarter,
as well as a reduction in network revenue. The 1996 period
included a retroactive increase in network revenue. Despite
the revenue decrease, operating income totaled a record
$11,974,000, a 6% increase from last year's $11,345,000. The
decrease in revenues was more than offset by a 9% decrease in
operating expenses, which reflected a 22% decrease in
programming costs.
Interest and other income for the quarter increased
24% to $3,066,000, from $2,471,000 in 1996.
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UNITED TELEVISION, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibit 27 - Financial Data Schedule
(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 9, 1997 By: /s/ Garth S. Lindsey
------------ ---------------------
Garth S. Lindsey
Executive Vice President
and Chief Financial
Officer (Principal
Financial and Accounting
Officer)
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EXHIBIT INDEX
Incorporated by
Reference to: Exhibit No. Exhibit
- --------------- ----------- -------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM 10Q DATED
MARCH 31, 1997 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-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 58,179
<SECURITIES> 140,703
<RECEIVABLES> 30,097
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 255,949
<PP&E> 67,261
<DEPRECIATION> 52,970
<TOTAL-ASSETS> 341,997
<CURRENT-LIABILITIES> 63,933
<BONDS> 0
<COMMON> 938
0
0
<OTHER-SE> 252,878
<TOTAL-LIABILITY-AND-EQUITY> 341,997
<SALES> 38,327
<TOTAL-REVENUES> 38,327
<CGS> 26,353
<TOTAL-COSTS> 26,353
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 15,040
<INCOME-TAX> 5,975
<INCOME-CONTINUING> 9,065
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,065
<EPS-PRIMARY> .97
<EPS-DILUTED> .97
</TABLE>
