SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 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 1-8309.
PRICE COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its Charter)
NEW YORK 13-2991700
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
45 Rockefeller Plaza, Suite 3201, New York, New York 10020
(Address of Principal Executive Offices)
(Zip Code)
(212) 757-5600
(Registrant's telephone number, including area code)
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
Applicable only to issuers involved in bankruptcy proceedings
during the preceding five years. Indicate by check mark whether
the registrant has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
subsequent to the distribution of securities under the plan
confirmed by the court.
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.
9,896,137 shares of Common Stock, par value $.01 per share,
outstanding as of March 31, 1994.
Page 1 of 11 Pages.
There are no Exhibits.
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1994
__________
PART I - FINANCIAL INFORMATION
Page
Item 1. Financial Statements (unaudited) Number
Consolidated Balance Sheets at March 31,
1994 and December 31, 1993............................. 4
Consolidated Statements of Operations for
Three Months ended March 31,
1994 and 1993.......................................... 5
Consolidated Statements of Cash Flows
for Three Months ended March 31, 1994
and 1993............................................... 6
Notes to Consolidated Financial
Statements............................................. 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...... 8
PART II - OTHER INFORMATION...................................... 10
Item 1. Legal Proceedings.................................. 10
Item 6. Exhibits and Reports on Form 8-K................... 10
SIGNATURES.................................................. 11
<PAGE>
<TABLE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, December 31,
1994 1993
Unaudited
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $1,415,874 $1,395,102
Accounts receivable, net 3,382,704 4,006,801
Film broadcast rights 413,615 565,929
Escrow deposits 2,500,000 1,500,000
Prepaid expenses and other current assets 1,237,885 1,457,235
Total current assets 8,950,078 8,925,067
Property and equipment, at cost,
less accumulated depreciation 12,728,304 13,728,171
Broadcast licenses, less accumulated amortization 12,695,948 12,797,559
Noncurrent film broadcast rights 186,373 138,383
Noncurrent notes receivables 1,055,000 -
Other assets 365,503 470,031
Reorganization value in excess of amounts allocable to
identifiable assets, less accumulated amortization 1,196,338 1,212,289
Total assets $37,177,544 $37,271,500
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $1,976,556 $2,249,404
Accrued interest 54,059 7,233
Other current liabilities 867,881 1,035,585
Total current liabilities 2,898,496 3,292,222
Long-term debt 3,200,000 3,200,000
Other liabilities 106,694 74,747
Shareholders' equity:
Common stock, par value $.01 per share; authorized
40,000,000 shares; outstanding: 9,896,137 in 1994
and 9,883,717 in 1993 98,961 98,837
Additional paid-in capital 32,343,323 32,310,285
Accumulated deficit (1,469,930) (1,704,591)
Total shareholders' equity 30,972,354 30,704,531
Total liabilities and shareholders' equity $37,177,544 $37,271,500
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
<CAPTION>
Three Months Ended March 31,
1994 1993
<S> <C> <C>
Revenue $6,213,270 $6,054,000
Agency and representatives' commissions 811,429 755,924
Net revenue 5,401,841 5,298,076
Operating expenses 3,876,407 3,839,570
Corporate expenses 516,778 1,023,915
Other income, net (264,782) (523,210)
Interest expense 56,470 441,790
Depreciation and amortization 575,566 571,738
Amortization of debt discount and deferred debt expense 33,941 219,132
Loss on sale of business 367,800 -
Unrealized noncash loss on marketable securities - 286,314
Share of loss of partially owned companies - 586,000
Income (Loss) before income taxes 239,661 (1,147,173)
Income taxes 5,000 7,084
Net Income (Loss) $234,661 ($1,154,257)
Net income (loss) per share $0.02 ($0.10)
Average shares outstanding 9,975,918 12,109,583
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<TABLE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<CAPTION>
Three Months Ended March 31,
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $234,661 ($1,154,257)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Items not affecting cash:
Amortization of debt discount and
deferred debt expense 33,941 219,132
Depreciation and amortization 575,566 571,738
Share of loss of partially owned companies - 586,000
Unrealized noncash loss on marketable securities - 286,314
Change in assets and liabilities, net of effects of
business sold:
Decrease in net accounts receivable 354,539 259,357
Increase in escrow deposits (1,000,000) -
(Increase) decrease in prepaid expenses, notes
receivable and other assets (344,833) 717,049
Decrease in film broadcast rights 104,324 177,021
Decrease in accounts payable and (274,353) (1,007,174)
accrued expenses
Increase in accrued interest payable 46,826 447,217
Decrease in other liabilities (135,759) (1,114,628)
Reclassification of transactions to investing activities:
Loss on sale of business 367,800 -
Gain on sale of securities - (187,724)
Total adjustments (271,949) 954,302
Net cash used in operating activities (37,288) (199,955)
Cash flows from investing activities:
Sale of business, net 190,037 -
Capital expenditures (161,531) (197,557)
Investment in businesses - (66,805)
Purchases of marketable securities - (3,960,060)
Purchases of securities under agreements to resell - (8,050,811)
Proceeds from sale of marketable securities - 21,820,625
Net cash provided by investing activities 28,506 9,545,392
Cash flows from financing activities:
Proceeds from stock options exercised 33,162 -
Net repayment of repurchase agreements - (4,930,083)
Other (3,608) -
Net cash provided by (used in) financing activities 29,554 (4,930,083)
Net increase in cash and cash equivalents 20,772 4,415,354
Cash and cash equivalents at beginning of period 1,395,102 9,119,527
Cash and cash equivalents at end of period $1,415,874 $13,534,881
Supplemental disclosures of cash flow information:
Income taxes paid, net of refunds $34,305 $250,306
Interest paid $9,644 $4,760
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis for Preparation of Financial Statements
The accompanying consolidated financial statements have been
prepared by the Company without audit, in accordance with rules and
regulations of the Securities and Exchange Commission. In the
opinion of management, the statements reflect all adjustments
consisting only of normal recurring adjustments necessary for a
fair presentation of the results for the interim periods. The
results of operations for any interim period are not necessarily
indicative of the results for a full year.
Note 2 - Per Share Data
Earnings per common share are based on the weighted average
number of shares of common stock outstanding. Shares issuable upon
the exercise of all common stock equivalents and other potentially
dilutive securities are included in the computation in those
periods where their effect is considered dilutive using the
treasury stock method.
Note 3 - Recent Developments
On February 16, 1994, the Company sold its outdoor advertising
business for a total of $875,000 including $200,000 cash and a note
from the buyer for $675,000. A pre-tax loss of approximately
$368,000 was recognized on the sale.
On February 16, 1994, the Company entered into an agreement to
buy WHTM-TV, Channel 27, serving the Harrisburg-York-Lancaster-
Lebanon, Pennsylvania market for approximately $41 million. The
Company expects to close on this purchase during the second half of
1994.
In March 1994, the Company entered into an agreement to sell
radio stations WOWO-AM and WOWO-FM in Fort Wayne, Indiana, for $2.3
million in cash. The transaction is subject to FCC approval. The
Company expects to realize a gain on the transaction.
On April 15, 1994, the Company sold substantially all the
assets of its radio stations WWKB-AM and WKSE-FM in Buffalo, New
York, for $5 million in cash. The Company will realize a gain on
the transaction. The proceeds were used, in part, to retire the
remaining balance of $3.2 million due under a line of credit
agreement.<PAGE>
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations.
References to the "Company" in this Report include Price
Communications Corporation and its subsidiaries, unless the context
otherwise indicates.
Results of Operations
The Company recognized approximately $235,000 of net income
for the quarter ended March 31, 1994 as compared to a $1,154,000
loss for the same quarter in 1993. Net revenues increased
approximately 2.0% during the three months ended March 31, 1994
over the comparable period in 1993. Related operating expenses
increased approximately 1.0%, primarily as a result of the increase
in sales. Corporate expenses decreased by approximately $507,000
or 50 percent due primarily to a decrease in management bonuses and
legal fees. Interest expense and amortization of debt discount and
deferred debt expense decreased by approximately $385,000 and
$185,000, respectively, compared to the first quarter of 1993
because the Company retired the $30.8 million face amount of its 5%
Senior Secured Notes during the fourth quarter of 1993, leaving in
place $3.2 million of long-term bank debt during the first quarter
of 1994. Other reasons for the improvement in net income were the
absence of unrealized noncash loss on marketable securities during
the first quarter of 1994 and share of loss of partially owned
companies since the Company sold its interest in PriCellular
Corporation during the fourth quarter of 1993. These improvements
were partially offset by a decrease in other income, net of
approximately $258,000 due to primarily the Company's decreased
cash and marketable securities and investment income related
thereto and the incurrence by the Company of a loss of $368,000 on
the sale of its outdoor advertising business during February of
1994.
The Company's per share earnings were $.02 for the quarter
ended March 31, 1994, as compared to a loss of $.10 for the first
quarter of 1993.
Liquidity and Capital Resources
The Company had approximately $1.4 million in cash and cash
equivalents at March 31, 1994 and December 31, 1993. The Company
had net working capital of approximately $6.1 million at March 31,
1994 and $5.6 million at December 31, 1993. Long-term debt of
approximately $3.2 million was owed by the Company as of March 31,
1994 and December 31, 1993.
During April 1994, the Company used the proceeds from the sale
of its radio stations in Buffalo, New York of $5 million to repay
the $3.2 million due under a line of credit agreement (see Note 3
to Consolidated Financial Statements).
Use of Funds. The Company will require substantial funds to
complete the approximately $41 million acquisition of WHTM-TV (See
Note 3 to Consolidated Financial Statements) and funds available
from the Company's existing liquid assets and proceeds from the
sales of properties will not be sufficient. The Company is
establishing expanded credit lines to raise the capital required
for the purchase. Additionally, if the Company's strategy to
acquire communications properties continues to be successful, the
Company may require substantial capital to finance them. The
Company may use a variety of sources including the proceeds of debt
sold to the public, additional borrowings from banks and other
institutional lenders, seller financing, convertible preferred
stock and common stock issued at the parent company or subsidiary
level. There can be no assurance that the Company will be
successful in obtaining funds from those sources.
The Company does not anticipate the need to make major capital
expenditures in respect of its existing media properties during the
remainder of 1994 and it does not believe that such lack of major
capital expenditures will affect its competitive position.
Source of Funds. The Company's sources of funds historically
have been provided by its liquid assets, cash flow from its
operating and investment activities, proceeds from the sale of
properties and proceeds from loans and financings. The Company
intends to seek to improve cash flow from operations by imposing
stringent budget procedures on its media properties and by seeking
to increase revenues in excess of increases in operating expenses.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
None.
(b) Reports on Form 8-K.
On January 5, 1994, the Company filed a Form 8-K to
report an event of December 17, 1993. The Report
included an Item 5 discussion of an agreement to
sell two of the Company's radio stations.<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
PRICE COMMUNICATIONS CORPORATION
Dated: April 25, 1994 By/s/Robert Price
Robert Price
President and Chief Financial
Officer
