<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 June 30, 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.
9,845,894 shares of Common Stock, par value $.01 per share, outstanding as of
July 27, 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
June 30, 1995
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) Number
------
<S> <C>
Consolidated Balance Sheets at June 30, 1995
and December 31, 1994 ..................................... 4
Consolidated Statement of Operations for the
Six and Three Months ended June 30, 1995 and 1994.......... 5-6
Condensed Consolidated Statements of Cash Flows
for the Six Months ended June 30, 1995 and 1994............ 7
Notes to Consolidated Financial Statements.......................... 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.............. 9-11
PART II - OTHER INFORMATION.................................................. 12
ITEM 1. LEGAL PROCEEDINGS.......................................... 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................... 12
SIGNATURES.......................................................... 13
</TABLE>
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PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
----------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,033,671 $ 1,136,010
Accounts receivable, net 5,843,887 5,073,450
Film broadcast rights 1,647,866 1,990,874
Prepaid expenses and other current assets 743,803 892,303
----------- -----------
Total current assets 10,269,227 9,092,637
Property and equipment, at cost, less
accumulated depreciation 11,362,305 11,499,936
Broadcast licenses and other intangibles,
less accumulated amortization 66,618,480 67,528,870
Film broadcast rights 2,321,370 1,867,096
Notes receivable 540,000 817,500
Other assets 198,042 46,091
----------- -----------
Total assets $91,309,424 $90,852,130
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 3,153,736 $ 3,602,734
Current portion of long-term debt 9,624 1,209,493
Other current liabilities 4,220,613 4,264,326
----------- -----------
Total current liabilities 7,383,973 9,076,553
----------- -----------
Long-term debt 22,007,009 21,310,356
Deferred tax effect on basis difference arising on
acquisition 18,200,456 18,435,308
Other liabilities 3,050,616 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
9,854,994, in 1995 and 11,213,605 in 1994 98,550 112,136
(see Note 1)
Additional paid-in capital 19,252,561 26,248,234
Retained earnings 21,316,259 12,718,958
----------- -----------
Total shareholders' equity 40,667,370 39,079,328
----------- -----------
Total liabilities and shareholders' equity $91,309,424 $90,852,130
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
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Price Communications Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
------------------------------
1995 1994
---- ----
<S> <C> <C>
Revenue $ 16,665,617 $ 12,267,111
Agency and representatives' commissions 2,651,951 1,616,046
------------ ------------
Net revenue 14,013,666 10,651,065
------------ ------------
Operating expenses 7,757,223 7,323,044
Corporate expenses 1,135,963 2,050,236
Other (income) expense, net (6,472,627) (2,453,885)
Interest expense 1,060,973 58,489
Amortization of deferred debt expense 360,000 33,941
Depreciation and amortization 1,732,529 1,047,442
------------ ------------
5,574,061 8,059,267
------------ ------------
Income before income taxes 8,439,605 2,591,798
Income tax (benefit) expense (157,696) 5,000
------------ ------------
Net income $ 8,597,301 $ 2,586,798
============ ============
Income per share $ 0.80 $ 0.21
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE> 6
Price Communications Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended June 30,
----------------------------
1995 1994
---- ----
<S> <C> <C>
Revenue $ 9,244,993 $ 6,053,841
Agency and representatives' commissions 1,486,426 804,617
----------- -----------
Net revenue 7,758,567 5,249,224
----------- -----------
Operating expenses 4,223,571 3,446,637
Corporate expenses 561,191 1,533,458
Other (income) expense, net (see Note 3) (377,351) (2,556,903)
Interest expense 521,700 2,019
Depreciation and amortization 853,307 471,876
----------- -----------
5,782,418 2,897,087
----------- -----------
Income before income taxes 1,976,149 2,352,137
Income tax benefit (64,405) --
----------- -----------
Net income $ 2,040,554 $ 2,352,137
=========== ===========
Income per share $ 0.20 $ 0.19
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6
<PAGE> 7
Price Communications Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30, 1995
------------------------------
1995 1994
---- ----
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 3,145,458 $ 2,031,767
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
Sale of business and equipment , net -- 5,208,999
Investment in businesses, net of cash acquired -- (441,886)
Recovery on notes receivable, net 7,593,802 --
Capital expenditures (742,342) (317,550)
Other (46,600) --
----------- -----------
Net cash provided by investing activities 6,804,860 4,449,563
----------- -----------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Payment of line of credit origination fee (360,000) --
Borrowings under line of credit agreements 360,000 --
Payments under line of credit agreements (860,000) (3,200,000)
Repurchase of common stock (8,278,718) --
Proceeds from stock options exercised 86,061 128,048
Other -- (3,608)
----------- -----------
Net cash used in financing activities (9,052,657) (3,075,560)
----------- -----------
Net increase in cash and cash equivalents 897,661 3,405,770
Cash and cash equivalents at beginning of period 1,136,010 1,395,102
----------- -----------
Cash and cash equivalents at end of period $ 2,033,671 $ 4,800,872
=========== ===========
Supplemental information:
Income taxes paid, net of refunds $ 156,333 $ 35,327
=========== ===========
Interest paid $ 1,060,973 $ 65,722
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7
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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.
In April 1995, the Company effected a five-for-four stock split in the form of a
25% common stock dividend. All presentations of shares outstanding and income
per share 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 10,796,000 and 10,301,000 for the six and
three months ended June 30, 1995 and 12,466,000 and 12,467,000 for the six and
three months ended June 30, 1994. All presentations of shares outstanding and
income per share have been retroactively restated to reflect the 1995 stock
split.
3. RECENT DEVELOPMENTS
In February 1995, certain subsidiaries of the Company entered into a Second
Amended and Restated Line of Credit Agreement ("Line of Credit") with the Bank
of Montreal. The Line of Credit commitment was permanently reduced from $40.0
million to $22.8 million and further reduced to $22.0 million on June 30, 1995.
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 third quarter of
1995.
During May 1995, the Company received a $655,000 payment on a note receivable
originating from the 1994 sale of its outdoor advertising business, from the
buyer, Midwest Media, Inc. During 1994, the Company set up a reserve of $337,500
against this note. The recovery on this note, $337,500, has been treated as
income and included in other (income) expense on the Company's consolidated
statement of operations for the six and three months ended June 30, 1995.
8
<PAGE> 9
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 and its subsidiaries, unless the context otherwise
indicates.
RESULTS OF OPERATIONS
The Company's net revenue, operating expenses, depreciation,
amortization and interest expense for the six and three months ended June 30,
1995 are not comparable to the six and three months ended June 30, 1994, due to
the 1994 acquisition of WHTM-TV, the borrowings to effect such acquisition, and
the 1994 dispositions of the Company's radio properties and other assets.
THREE MONTHS ENDED JUNE 30, 1995 COMPARED TO THREE MONTHS ENDED JUNE 30, 1994
Net revenue increased by 48% to $7.8 million. The increase was due to
the acquisition of WHTM-TV in 1994 and the strong performance of all the
television stations during the three months ended June 30, 1995, offset by a
decline in revenue due to the sale of Price's radio stations in 1994. Related
operating expenses increased by only 23%, as a result of the increase in revenue
and relatively higher operating margin of the new television station as compared
to the properties the Company sold. Corporate expenses decreased approximately
$1.0 million for the three months ended June 30, 1995 as compared to the same
period in 1994, primarily due to the absence of legal and advisory expenses in
connection with the 1992 restructuring and a related lawsuit. Additionally,
interest expense increased by $.5 million over the prior year's quarter since
the Company had little or no long-term debt outstanding during the three months
ended June 30, 1994. Depreciation and amortization expense rose $.4 million
primarily as a result of amortization of intangibles associated with the
acquisition of WHTM-TV.
The Company recognized approximately $2.0 million and $2.4 million of
net income for the three months ended June 30, 1995 and 1994, respectively. Net
income for the three months ended June 30, 1995 was primarily the result of
increased income from operations. Net income for the three months ended June 30,
1994 was primarily the result of a $3.0 million pretax gain from the sale of the
Company's Buffalo radio stations.
The Company's per share income was $.20 and $.19 for the three months
ended June 30, 1995 and 1994, respectively.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED).
RESULTS OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO SIX MONTHS ENDED JUNE 30, 1994
Net revenue increased by 32% primarily due to the acquisition of
WHTM-TV in 1994 and the strong performance of all the television stations during
the six months ended June 30, 1995, but was offset by a decline in revenue due
to the sale of Price's radio stations in 1994. Related operating expenses
increased only 6% as a direct result of the increase in revenue and the
relatively higher operating margin of WHTM-TV as compared to the properties the
Company sold. Corporate expense decreased approximately $.9 million as compared
to the same period last year due to the absence of legal and advisory expenses
in connection with the 1992 restructuring and a related lawsuit. Depreciation
and amortization expense increased $.7 million primarily as a result of
amortization of intangibles associated with the acquisition of WHTM-TV.
The Company recognized approximately $8.6 million and $2.6 million of
net income for the six months ended June 30, 1995 and 1994, respectively. This
increase in 1995 is primarily due to increased income from operations and the
realization of $7.3 million in other income from the liquidation of Fairmont
offset by a $1.2 million loss incurred in repurchasing its own stock. Net income
for six months ended June 30, 1994 was primarily the result of a pretax gain of
approximately $3.0 million realized by the Company on the sale of its Buffalo
radio stations. Additionally, interest expense increased by $1.0 million over
the prior year's six months since the Company had little or no long-term debt
outstanding during the six months ended June 30, 1995.
The Company's per share income was $0.80 and $0.21 for the six months
ended June 30, 1995 and 1994, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company had approximately $2.0 million and $1.1 million in cash and
cash equivalents at June 30, 1995, and December 31, 1994, respectively. The
Company had net working capital of approximately $2.9 million at June 30, 1995.
The Company had long term debt of approximately $22.0 million as of June 30,
1995.
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 to 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 six months ended June 30, 1995 were approximately
$.7 million .
10
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED).
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Company's sources of funds to serve its debt and meet its other
obligations have been provided historically 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 1,392,000 shares were purchased in 1995 under this
new authorization and previous authorizations.
[The remainder of this page is left blank intentionally]
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.
None.
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: July 28, 1995 By /s/ Robert Price
----------------------------------
Robert Price
President and Chief Financial Officer
13
<PAGE> 14
EXHIBIT INDEX
Exhibit No. Description
- ---------- -----------
EX-27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 2,034
<SECURITIES> 0
<RECEIVABLES> 6,240
<ALLOWANCES> 396
<INVENTORY> 0
<CURRENT-ASSETS> 10,269
<PP&E> 14,409
<DEPRECIATION> 3,046
<TOTAL-ASSETS> 91,309
<CURRENT-LIABILITIES> 7,384
<BONDS> 0
<COMMON> 99
0
0
<OTHER-SE> 40,568
<TOTAL-LIABILITY-AND-EQUITY> 91,304
<SALES> 14,014
<TOTAL-REVENUES> 14,014
<CGS> 7,757
<TOTAL-COSTS> 7,757
<OTHER-EXPENSES> 3,229
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,061
<INCOME-PRETAX> 8,440
<INCOME-TAX> (158)
<INCOME-CONTINUING> 8,598
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,598
<EPS-PRIMARY> .80
<EPS-DILUTED> .80
</TABLE>
