<PAGE> 1
UNITED STATES
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, 1996 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
--- ---
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.
9,418,242 shares of Common Stock, par value $.01 per share, outstanding as of
April 30, 1996.
<PAGE> 2
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1996
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) Number
--------------------------------- ------
<S> <C>
Consolidated Balance Sheets at March 31, 1996
and December 31, 1995 ............................. 3
Consolidated Statement of Operations for the
Three Months ended March 31, 1996 and 1995 ........ 4
Condensed Consolidated Statements of Cash Flows
for the Three Months ended March 31, 1996 and 1995 5
Notes to Consolidated Financial Statements ................. 6-9
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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K .................. 12
SIGNATURES ................................................. 13
</TABLE>
<PAGE> 3
Price Communications Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 80,421,556 $ 1,206,557
Short-term investments 45,257,828 237,975
Accounts receivable, net 1,255,840 6,096,446
Film broadcast rights -- 1,764,468
Prepaid expenses and other current assets 74,579 741,307
------------ ------------
Total current assets 127,009,803 10,046,753
Long-term investments 10,350,000 8,350,000
Property and equipment, at cost, less
accumulated depreciation 179,224 11,308,808
Broadcast licenses and other intangibles,
less accumulated amortization -- 65,434,705
Film broadcast rights -- 231,225
Note receivable 540,000 540,000
Other assets -- 73,907
------------ ------------
Total assets $138,079,027 $ 95,985,398
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Accounts payable and accrued expenses $ 3,477,204 $ 3,197,471
Accrued interest -- 510,119
Current portion of long-term debt -- 28,000,000
Income taxes payable (see Note 3) 24,039,847 --
Other current liabilities -- 4,601,409
------------ ------------
Total current liabilities 27,517,051 36,308,999
------------ ------------
Long-term debt (see Note 3) -- --
Deferred tax effect on basis difference arising on
acquisition -- 17,971,028
Other liabilities -- 829,689
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
9,518,242 and 9,579,842 at March 31, 1996 95,182 95,798
and December 31, 1995, respectively (see Note 1)
Additional paid-in capital 16,304,021 16,935,009
Retained earnings 94,162,773 23,844,875
------------ ------------
Total shareholders' equity 110,561,976 40,875,682
------------ ------------
Total liabilities and shareholders' equity $138,079,027 $ 95,985,398
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE> 4
Price Communications Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Revenue $ 3,491,441 $ 7,420,624
Agency and representatives' commissions 529,577 1,165,525
------------ ------------
Net revenue 2,961,864 6,255,099
------------ ------------
Operating expenses 2,131,801 3,533,652
Corporate expenses 727,109 574,772
Other (income) expense, net (426,918) (6,095,276)
Gain on sale of media properties (see Note 3) (95,451,878) --
Interest expense 212,376 539,273
Amortization of deferred debt expense -- 360,000
Depreciation and amortization 430,409 879,222
------------ ------------
(92,377,101) (208,357)
------------ ------------
Income before income taxes 95,338,965 6,463,456
Income tax expense (benefit) 25,021,067 (93,291)
------------ ------------
Net income $ 70,317,898 $ 6,556,747
============ ============
Income per share $ 7.08 $ 0.60
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
Price Communications Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
--------------------------------
1996 1995
---- ----
<S> <C> <C>
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES $ 25,602,315 $ 1,413,162
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
Proceeds from sale of media properties 156,007,011 --
Gain on sale of media properties (71,662,104) --
Recovery on notes receivable, net -- 7,256,302
Long-term investment in equity securities (2,000,000)
Capital expenditures (100,619) (533,585)
Other -- 28,300
------------- -------------
Net cash provided by investing activities 82,244,288 6,751,017
------------- -------------
CASH FLOWS (USED IN) PROVIDED BY
FINANCING ACTIVITIES:
Repayment of long-term debt (28,000,000) --
Payment of line of credit origination fee -- (360,000)
Borrowings under line of credit agreements -- 360,000
Purchase of Company common stock (903,009) (8,173,588)
Proceeds from stock options exercised 271,405 86,061
------------- -------------
Net cash (used in) provided by financing activities (28,631,604) (8,087,527)
------------- -------------
Net increase in cash and cash equivalents 79,214,999 76,652
Cash and cash equivalents at beginning of quarter 1,206,557 1,136,010
------------- -------------
Cash and cash equivalents at end of quarter $ 80,421,556 $ 1,212,662
============= =============
Supplemental information:
Income taxes paid, net of refunds $ 1,901,500 $ 51,126
============= =============
Interest paid $ 712,855 $ 539,273
============= =============
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
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. All such adjustments are of a normal, recurring nature. The results of
operations for any interim period are not necessarily indicative of the results
for a full year.
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 common
stock equivalents outstanding, which was approximately 9,931,015 and 10,897,567
for the quarter ended March 31, 1996 and 1995, respectively. All presentations
of shares outstanding and income per share have been retroactively restated to
reflect a five-for-four common stock split in April 1995.
3. RECENT DEVELOPMENTS
On February 2, 1996, the Company sold substantially all of the assets,
except cash and accounts receivable, together with certain liabilities, of its
three NBC affiliates, KJAC-TV, Beaumont/Port Arthur, TX; KFDX-TV, Wichita Falls,
TX/Lawton, OK and KSNF-TV, Joplin, MO/Pittsburg, KS for approximately $40.7
million in cash. Of the sale proceeds, approximately $28.7 million was used to
repay the principal and interest due under a Bank of Montreal term loan
agreement. The Company recognized a pre-tax gain of approximately $29.9 million
from this transaction during the first quarter 1996.
On March 1, 1996, the Company sold substantially all of the assets
except cash, together with certain liabilities of WHTM-TV, its ABC affiliate
serving the Harrisburg-York-Lebanon-Lancaster, PA television market, for $115.3
million in cash to Allbritton Communications Company. The Company recognized a
pre-tax gain of approximately $65.6 million from this transaction.
6
<PAGE> 7
PRICE COMMUNICATIONS CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. RECENT DEVELOPMENTS (CONTINUED)
In January 1996, the Company purchased 750,000 shares (as adjusted to
reflect a 5 for 4 stock split in March, 1996) of Class A Common Stock of
PriCellular Corporation, an affiliate, for approximately $6.3 million.
4. PROFORMA FINANCIAL INFORMATION
The following proforma financial information for the quarter ended
March 31, 1996 and year ended December 31, 1995 has been prepared based on the
assumption that the dispositions of the Company's four television stations
occurred on January 1, 1996 and January 1, 1995 respectively. The proforma
financial information is not necessarily indicative either of results of
operations that would have occurred had the dispositions been made at the
beginning of the periods, or of future results of operations of the Company.
[The remainder of this page is left blank intentionally]
7
<PAGE> 8
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
ProForma Consolidated Statement of Operations
For the three months ended March 31, 1996
(unaudited)
<TABLE>
<CAPTION>
Proforma
Historical Adjustments Proforma
<S> <C> <C> <C>
Revenue $ 3,491,441 ($ 3,491,441)(1) $ 0
Agency and representatives' commissions 529,577 (529,577)(1) 0
------------ ------------ ------------
Net revenue 2,961,864 (2,961,864) 0
Operating expenses 2,131,801 (2,131,801)(1) 0
Corporate expenses 727,109 -- 727,109
Other (income) expenses, net (426,918) (1,261,898)(2) (1,688,816)
Gain on sale of media properties (95,451,878) -- (95,451,878)
Interest expense 212,376 (212,376)(2) 0
Depreciation and amortization 430,409 (418,461)(1) 11,948
------------ ------------ ------------
(92,377,101) (4,024,536) (96,401,637)
------------ ------------ ------------
Income before income taxes 95,338,965 1,062,672 96,401,637
Income tax expense (25,021,067) -- (25,021,067)
------------ ------------
Net income $ 70,317,898 $ 1,062,672 $ 71,380,570
============ ============ ============
Income per share $ 7.08 $ 7.19
============ ============
Weighted average number of shares 9,931,015 9,931,015
============ ============
</TABLE>
(1)Adjustments to eliminate all income statement amounts related to the
operation of the four television stations that the Company sold during the first
quarter of 1996, as if those sales had occurred on January 1, 1996.
(2)Adjustment to accrue income on the assumed net proceeds of the sales, after
repayment of approximately $28 million of long-term debt and income taxes of
approximately $25 million as if they were paid on January 1, 1996. The
calculation assumes income earned of 5 percent on additional cash of $100
million.
<PAGE> 9
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
ProForma Consolidated Statement of Operations
For the year ended December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Proforma
Historical Adjustments Proforma
<S> <C> <C> <C> <C>
Revenue $ 34,377,543 ($34,377,543)(1) $ 0
Agency and representatives' commissions 5,222,273 (5,222,273)(1) 0
------------ ------------
Net revenue 29,155,270 (29,155,270) 0
Operating expenses 16,684,608 (16,762,702)(1) (78,094)
Corporate expenses 2,687,064 -- 2,687,064
Other (income) expenses, net (7,280,215) (5,021,669)(2) (12,301,884)
Interest expense 2,099,365 (2,099,365)(1) 0
Amortization of deferred debt expense 460,000 (460,000)(1) 0
Depreciation and amortization 3,459,320 (3,428,296)(1) 31,024
Realized loss on marketable securities 166,211 -- 166,211
------------ ------------ ------------
18,276,353 (27,772,032) (9,495,679)
------------ ------------ ------------
Income before income taxes 10,878,917 (1,383,238) 9,495,679
Income tax benefit 247,000 -- 247,000
------------ ------------
Net income $ 11,125,917 ($ 1,383,238) $ 9,742,679
============ ============ ============
Income per share $ 1.06 $ 0.93
============ ============
Weighted average number of shares
(adjusted for April 1995 five-for-four stock
split) 10,463,193 10,463,193
============ ============
</TABLE>
(1)Adjustments to eliminate all income statement amounts related to the
operation of the four television stations that the Company sold during the first
quarter of 1996, as if those sales had occurred on January 1, 1995.
(2)Adjustment to accrue income on the assumed net proceeds of the sales, after
repayment of approximately $28 million of long term debt and income taxes of
approximately $25 million as if they were paid on January 1, 1995. The
calculation assumes income earned of 5 percent on additional cash of $100
million.
<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 and its subsidiaries, unless the context otherwise
indicates.
RESULTS OF OPERATIONS
During February and March of 1996 the Company consummated the sales of
its three NBC affiliated television stations, KSNF-TV, serving Joplin,
Missouri/Pittsburg, Kansas; KJAC-TV, serving Beaumont/Port Arthur, Texas; and
KFDX-TV, serving Wichita Falls, Texas/Lawton, Oklahoma and its ABC affiliate,
WHTM-TV, serving Harrisburg/Lancaster/Lebanon/York, Pennsylvania. Additionally,
the Company used $28.7 million of the proceeds of these sales to repay principal
and interest due to Bank of Montreal under a term loan agreement. As a result of
these transactions the Company's net revenue, operating expenses, depreciation,
amortization and interest expense for the three months ended March 31, 1996 are
not comparable to the three months ended March 31, 1995. Revenue, net revenue,
operating expenses and depreciation and amortization all decreased significantly
as a result of the operations being sold and the debt being retired during the
quarter. Furthermore, results for the first quarter of 1996 are not indicative
of results in the future.
The Company recognized approximately $70.3 million of net income for
the three months ended March 31, 1996, as compared to approximately $6.6 million
of net income for the three months ended March 31, 1995. This increase is
primarily due to the pre-tax gain of $95.5 million recognized on the sale of the
Company's television properties. This gain was partially offset by approximately
$25 million of income tax expense largely related to these sales (see Note 3 of
Notes to Consolidated Financial Statements).
The Company's per share income was $7.08 for the quarter ended March
31, 1996, as compared to $.60 for the first quarter of 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company had approximately $80.4 million and $1.2 million in cash
and cash equivalents at March 31, 1996, and December 31, 1995, respectively. The
Company had net working capital of approximately $99.5 million at March 31,
1996. The Company had no long- term debt outstanding as of March 31, 1996.
The Company is actively reviewing potential acquisitions and
investments. Among the possible acquisitions or investments which may be
considered by the Company are: (i) subject to the availability of such
properties at prices deemed prudent by the Company, making acquisitions of radio
and television properties; (ii) exploring related media activities, such as
newspapers, outdoor advertising companies and publishing enterprises; (iii)
investing funds in media and
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED).
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
media related securities; (iv) returning to the Company's historic investment in
PriCellular either through the purchase of additional PriCellular securities or
a business combination with PriCellular; and (v) other acquisition and
investment opportunities which may present themselves from time to time.
If any of the Company's acquisition and investment alternatives is
successful the Company may require additional capital to finance it. After
giving effect to the sale of its remaining television properties, the Company
has significant liquid assets on hand for acquisition purposes. Additionally,
the Company may use a variety of sources including the proceeds of debt sold to
the public, 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's sources of funds to service its debt and meet its other
obligations 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.
In March, 1995 the Company's Board of Directors authorized the
repurchase by the Company of up to 1,000,000 shares of its Common Stock. The
Company is authorized to make such purchases from time to time in the market or
in privately negotiated transactions. During the quarter ended March 31, 1996,
the Company repurchased approximately 129,000 shares pursuant to that
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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Shareholders on April
2, 1996. The Board of Directors was re-elected in its entirety
by a vote of no fewer than 93.2% of shares available to vote
cast in favor of any single candidate with less than 1% of
votes withheld from voting for any single candidate.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(b) Reports on Form 8-K
On February 2, 1996 the Company reported on Form 8-K the sale
of television stations KFDX-TV, KJAC-TV and KSNF-TV. On March
1, 1996, the Company filed a similar report regarding the sale
of WHTM-TV. For more information, see Part I, Item 2.,
"Management's Discussion and Analysis of Financial Condition
and Results of Operations."
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 6, 1996 By /s / Robert Price
--------------------------------
Robert Price
President and Chief Financial Officer
13
<PAGE> 14
EXHIBIT INDEX
-------------
Exhibit 27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 80,422
<SECURITIES> 45,258
<RECEIVABLES> 1,256
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 127,010
<PP&E> 179
<DEPRECIATION> 0
<TOTAL-ASSETS> 138,079
<CURRENT-LIABILITIES> 27,517
<BONDS> 0
0
0
<COMMON> 95
<OTHER-SE> 110,467
<TOTAL-LIABILITY-AND-EQUITY> 138,079
<SALES> 3,491
<TOTAL-REVENUES> 2,962
<CGS> 0
<TOTAL-COSTS> (92,377)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 95,339
<INCOME-TAX> 25,021
<INCOME-CONTINUING> 70,318
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,318
<EPS-PRIMARY> 7.08
<EPS-DILUTED> 7.08
</TABLE>
