<PAGE> 1
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, 1995 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
--- ---
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
9,872,294 shares of Common Stock, par value $.01 per share, outstanding as of
March 31, 1995.
Page 1 of 13 Pages
There are no Exhibits.
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PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1995
PART I - FINANCIAL INFORMATION
Page
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) Number
------
Consolidated Balance Sheets at March 31, 1995
and December 31, 1994 ................................ 4
Consolidated Statement of Operations for the
Three Months ended March 31, 1995 and 1994............ 5
Condensed Consolidated Statements of Cash Flows
for the Three Months ended March 31, 1995 and 1994.... 6
Notes to Consolidated Financial Statements.................... 7-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS...... 10-11
PART II - OTHER INFORMATION............................................ 12
ITEM 1. LEGAL PROCEEDINGS.................................. 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................... 12
SIGNATURES.................................................... 13
<PAGE> 4
Price Communications Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,212,662 $ 1,136,010
Accounts receivable, net 4,551,020 5,073,450
Film broadcast rights 2,140,609 1,990,874
Prepaid expenses and other current assets 985,450 892,303
----------- -----------
Total current assets 8,889,741 9,092,637
Property and equipment, at cost, less
accumulated depreciation 11,576,806 11,499,936
Broadcast licenses and other intangibles,
less accumulated amortization 66,934,921 67,528,870
Film broadcast rights 2,863,561 1,867,096
Notes receivable 802,500 817,500
Other assets 105,957 46,091
----------- -----------
Total assets $91,173,486 $90,852,130
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 2,646,690 $ 3,602,734
Current portion of long-term debt 9,624 1,209,493
Other current liabilities 5,057,349 4,264,326
----------- -----------
Total current liabilities 7,713,663 9,076,553
----------- -----------
Long-term debt (see Note 3,4) 22,870,739 21,310,356
Deferred tax effect on basis difference arising on
acquisition 18,319,241 18,435,308
Other liabilities 3,536,764 2,950,585
Shareholders' equity:
Preferred Stock, par value $.01 per share;
authorized 20,000,000, no shares outstanding - -
Common Stock, par value $.01 per share;
authorized 40,000,000 shares; outstanding
9,872,294 in 1995 and 11,213,605 in 1994 98,723 112,136
(see Note 1)
Additional paid-in capital 19,358,651 26,248,234
Retained earnings 19,275,705 12,718,958
----------- -----------
Total shareholders' equity 38,733,079 39,079,328
----------- -----------
Total liabilities and shareholders' equity $91,173,486 $90,852,130
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
Price Communications Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
--------------------------------
1995 1994
<S> <C> <C>
Revenue $ 7,420,624 $6,213,270
Agency and representatives' commissions 1,165,525 811,429
----------- ----------
Net revenue 6,255,099 5,401,841
----------- ----------
Operating expenses 3,533,652 3,876,407
Corporate expenses 574,772 516,778
Other (income) expense, net (see Note 3) (6,095,276) 103,018
Interest expense 539,273 56,470
Amortization of deferred debt
expense (see Note 4) 360,000 33,941
Depreciation and amortization 879,222 575,566
----------- ----------
(208,357) 5,162,180
----------- ----------
Income before income taxes 6,463,456 239,661
Income tax (benefit) expense (93,291) 5,000
----------- ----------
Net income $ 6,556,747 $ 234,661
=========== ==========
Income per share $ 0.60 $ 0.02
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
Price Communications Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
--------------------------------
1995 1994
---- ----
<S> <C> <C>
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES $ 1,413,162 $ (37,288)
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
Sale of business, net - 190,037
Recovery on notes receivable, net 7,256,302 -
Capital expenditures (533,585) (161,531)
Other 28,300 -
----------- ----------
Net cash provided by investing activities 6,751,017 28,506
----------- ----------
CASH FLOWS (USED IN) PROVIDED BY
FINANCING ACTIVITIES:
Payment of line of credit origination fee (360,000) -
Borrowings under line of credit agreements 360,000 -
Purchase of common stock (8,173,588) -
Proceeds from stock options exercised 86,061 33,162
Other - (3,608)
----------- ----------
Net cash (used in) provided by financing activities (8,087,527) 29,554
----------- ----------
Net increase in cash and cash equivalents 76,652 20,772
Cash and cash equivalents at beginning of quarter 1,136,010 1,395,102
----------- ----------
Cash and cash equivalents at end of quarter $ 1,212,662 $1,415,874
=========== ==========
Supplemental information:
Income taxes paid, net of refunds $ 51,126 $ 34,305
=========== ==========
Interest paid $ 539,273 $ 9,644
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
6
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Price Communications Corporation
and Subsidiaries
Notes To Consolidated Financial Statements
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Price
Communications Corporation (the "Company" or "Price") and its subsidiaries.
All significant intercompany items and transactions have been eliminated.
The 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 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.
On March 6, 1995, the Directors of the Company declared a five-for-four stock
split of the Company's Common Shares, effected in the form of a stock
dividend, paid on April 8, 1995 to shareholders of record as of the close of
business on March 27, 1995. As a result, the Company issued 1,974,636 new
shares of its Common Stock. All presentations of shares outstanding and income
per share prior to 1995 have been retroactively restated to reflect the 1995
stock split.
2. PER SHARE DATA
Primary income per common share is based on income for the period divided by
the weighted average number of shares of common stock and stock equivalents
outstanding, which was approximately 10,897,567 and 12,469,897 for the quarter
ended March 31, 1995 and 1994, respectively, as adjusted.
3. RECENT DEVELOPMENTS
On January 30, 1995, the Company received a net cash payment of approximately
$7.3 million from the proceeds of the liquidation of Fairmont Communications
Corporation, a debtor of the Company which had been in Chapter 11 under the U.S.
Bankruptcy Code. These notes had no book value. This amount has been treated as
income and included in other (income) expense, net on the Company's consolidated
statement of operations for the three months ended March 31, 1995.
On February 27, 1995, certain subsidiaries of the Company entered into a
Second Amended and Restated Line of Credit Agreement (the "Line of Credit")
with the Bank of Montreal ("BMO"). The Line of Credit commitment was increased
from $22.5 million to $40 million, for working capital and general corporate
purposes.
7
<PAGE> 8
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. RECENT DEVELOPMENTS (CONTINUED)
The Line of Credit is due in full on March 31, 1996, but the Company intends to
refinance this obligation with a long-term obligation in the near future (see
Note 4).
In March 1995, at the Company's Annual Meeting, the Company's shareholders
authorized the creation of 20 million shares of undesignated Preferred Stock
for acquisitions and other purposes. No preferred stock had been issued as of
March 31, 1995.
In March 1995, the Company's Board of Directors authorized the purchase of up
to 1,000,000 shares of its Common Stock in the open market or in privately
negotiated transactions when it is legally permissible to do so or believed to
be in the best interests of the Price shareholders. Approximately 1,375,000
shares were purchased in 1995 under this new authorization and the previous
authorizations. In February 1995, the Company repurchased approximately
1,078,000 shares of its Common Stock from S.A.C. Capital and recognized a $1.2
million loss on the purchase of its Common Stock that has been included in
other (income) expense, net on the Company's consolidated statement of
operations for the three months ended March 31, 1995.
[The remainder of this page is left blank intentionally]
8
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Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
4. LONG-TERM DEBT
The Company's debt consists of the following notes payable by wholly owned
subsidiaries of the Company at March 31, 1995 and December 31, 1994 as follows:
<TABLE>
<CAPTION>
MARCH 31, 1995 DECEMBER 31, 1994
-------------- -----------------
<S> <C> <C>
Federal Broadcasting Corporation,
Southeast Texas Broadcasting Corporation,
Texoma Broadcasting Corporation
and Tri-State Broadcasting Corporation:
Note payable to BMO under term loan
agreement (A) $22,860,000 $ -
Atlantic Broadcasting Corporation,
Federal Broadcasting Corporation,
Southeast Texas Broadcasting Corporation,
Texoma Broadcasting Corporation and
Tri-State Broadcasting Corporation:
Note payable to BMO under term loan
agreement - 22,500,000
Other 20,363 19,849
----------- -----------
22,880,363 22,519,849
Less amount due currently 9,624 1,209,493
----------- -----------
$22,870,739 $21,310,356
=========== ===========
</TABLE>
(A) On February 27, 1994, certain subsidiaries of the Company entered into a
Line of Credit with BMO. The Line of Credit commitment was increased from $22.5
million to $40 million. All outstanding borrowings under the Line of Credit
must be repaid to BMO on March 31, 1996; the termination date of the Line of
Credit. The Company intends to refinance this obligation with a long-term
obligation in the near future.
Borrowings under the Line of Credit bear interest at the BMO Base Rate, as
defined, plus up to a maximum of .75%, and are secured by the assets of the
subsidiaries. There is also a fee of .5% on the unused portion, if any, of the
Line of Credit. On March 31, 1995, the effective interest rate was 9.00%. The
terms of the Line of Credit require the Company to maintain certain financial
ratios, restrict the declaration of dividends and require the Company to apply
the proceeds from future asset sales to the outstanding balance due.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
.
References to the "Company" or "Price" in this report include Price
Communications Corporation an its subsidiaries, unless the context otherwise
indicates.
RESULTS OF OPERATIONS
The Company's net revenue, operating expenses, depreciation,
amortization and interest expense for the three months ended March 31, 1995 are
not comparable to the three months ended March 31, 1994, due to the 1994
acquisition of WHTM-TV, the borrowings to effect such an acquisition, and the
1994 dispositions of the Company's radio properties and other assets. During
the first three months of 1995, net revenues increased by 16% to $6.3 million
from $5.4 million. The increase was due to the acquisition of WHTM-TV in 1994
and the strong performance of all the television stations during the first
quarter of 1995, offset by a decline in revenue due to the sales of Price's
radio stations in 1994. Operating expenses decreased by 9 % for the quarter
when compared to the prior year's quarter due to the higher operating margin of
the new television station as compared to the properties the company sold.
Depreciation and amortization expense rose to $.9 million from $.6 million
primarily as a result of amortization of intangibles associated with the
acquisition of WHTM-TV.
The Company recognized approximately $6.6 million of net income for
the three months ended March 31, 1995, as compared to $.2 million of net income
for the three months ended March 31, 1994. This increase is primarily due to
the realization of $7.3 million in other income from the liquidation of
Fairmont offset by a $1.2 million loss incurred in purchasing its own stock
(see Note 3 of Notes to Consolidated Financial Statements). Additionally,
interest expense increased by $.4 million over the prior year's quarter since
the Company had little or no long-term debt outstanding during the quarter
ended March 31, 1994.
The Company's per share income was $.60 for the quarter ended March
31, 1995, as compared to an income of $.02 for the first quarter of 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company had approximately $1.2 million and $1.1 million in cash
and cash equivalents at March 31, 1995, and December 31, 1994, respectively.
The Company had net working capital of approximately $1.2 million at March 31,
1995. The Company had long term debt of approximately $22.8 million as of
March 31, 1995.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
.
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
During February 1995, certain of the Company's subsidiaries entered
into a Second Amended Line of Credit Agreement ("Line of Credit") with the Bank
of Montreal ("BMO"). The Line of Credit was for $40 million with approximately
$22.8 million outstanding as of March 31, 1995. The Line of Credit terminates
on March 31, 1996 with payment of all outstanding borrowings due on that date.
The Company intends to refinance this obligation with a long-term obligation in
the near future. Borrowings bear interest equal to the BMO base rate as
defined, plus up to a maximum of .75% and are secured by the assets of the
Company's subsidiaries who are borrowers on the Line of Credit (see Note 4 of
Notes to Consolidated Financial Statements).
Although the Company has incurred substantial depreciation and
amortization expenses as a result of the purchase of its properties, it does
not anticipate the need to make major capital expenditures in respect of its
existing media properties during 1995 and the Company does not believe that
such a lack of major capital expenditures will affect its competitive position.
Capital expenditures for the three months ended March 31, 1995 were
approximately $.5 million .
The Company's sources of funds to serve its debt and meet its other
obligations historically have been provided by its liquid assets, cash flow
from operations and investment activities, proceeds from the sale of properties
and 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.
In March 1995, the Company's Board of Directors authorized the
purchase of up to 1,000,000 shares of its Common Stock in the open market or in
privately negotiated transactions when it is legally permissible to do so or
believed to be in the best interests of Price's shareholders, in addition to
previous authorizations. Approximately 1,375,000 shares were purchased in 1995
under this new authorization and previous authorizations.
11
<PAGE> 12
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 March 14, 1995, the Company filed a Form 8-K to report
an event of March 7, 1995. The report included an Item 4
discussion of the dismissal of KPMG Peat Marwick LLP as
Price Communications Corporation's principal accountant
responsible for the audit of Price's financial statements.
On March 29, 1995, the Company filed a Form 8-K/A to
report an event of March 7, 1995. The report included an
Item 4 discussion of the dismissal of KPMG Peat Marwick
LLP as Price Communications Corporation's principal
accountant responsible for the audit of Price's financial
statements.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities and
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: May 10, 1995 By /s/ Robert Price
----------------------------
Robert Price
President and Chief Financial Officer
13
<PAGE> 14
EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- -------
Ex-27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 1213
<SECURITIES> 0
<RECEIVABLES> 4945
<ALLOWANCES> 394
<INVENTORY> 0
<CURRENT-ASSETS> 8890
<PP&E> 14209
<DEPRECIATION> 2632
<TOTAL-ASSETS> 91173
<CURRENT-LIABILITIES> 7714
<BONDS> 0
<COMMON> 99
0
0
<OTHER-SE> 38634
<TOTAL-LIABILITY-AND-EQUITY> 91173
<SALES> 7421
<TOTAL-REVENUES> 6255
<CGS> 0
<TOTAL-COSTS> (208)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 539
<INCOME-PRETAX> 6463
<INCOME-TAX> (93)
<INCOME-CONTINUING> 6556
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6556
<EPS-PRIMARY> 0.60
<EPS-DILUTED> 0.60
</TABLE>
