<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, 1997 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
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(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.
7,281,334 shares of Common Stock, par value $.01 per share, outstanding as of
May 12, 1997.
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PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1997
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
Page
ITEM 1. FINANCIAL STATEMENTS Number
<S> <C>
Consolidated Balance Sheets at March 31, 1997
and December 31, 1996 ........................................ 3
Condensed Consolidated Statements of Operations for the
Three Months Ended March 31, 1997 and 1996 ................... 4
Condensed Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 1997 and 1996 ........... 5
Notes to Consolidated Financial Statements ............................ 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS ................ 7
PART II - OTHER INFORMATION .................................................... 8
SIGNATURES............................................................. 9
</TABLE>
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PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1997 1996
---- ----
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $41,202,174 $ 83,356,748
Investment securities:
Trading securities 4,789,761 4,045,628
Available-for-sale securities 20,656,608 8,694,966
Securities fair value adjustment (985,349) --
Accounts receivable, net of allowance for doubtful
accounts of $0 in 1997 and $473,579 in 1996 79,367 488,882
Prepaid expenses and other current assets 17,486 18,672
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Total current assets 65,760,047 96,604,896
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PROPERTY AND EQUIPMENT, AT COST
LESS ACCUMULATED DEPRECIATION 146,472 159,000
LONG-TERM INVESTMENTS 23,947,207 18,204,429
DEFERRED TAX ASSET 580,331 350,000
NOTES RECEIVABLE 540,000 540,000
OTHER ASSETS 29,500 29,500
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Total assets $91,003,557 $115,887,825
=========== ============
<CAPTION>
March 31, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1996
---- ----
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 2,028,537 $ 2,755,497
Deferred tax liability -- 1,042,862
Other current liabilities 3,265,793 3,310,774
----------- ------------
Total current liabilities 5,294,330 7,109,133
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 6,861,814 shares
in 1997 and 9,038,808 shares in 1996 68,618 90,388
Additional paid-in capital (8,615,249) 12,240,133
Unrealized gain (loss) on marketable equity
securities, net of tax effect (427,757) 1,936,743
Retained earnings 94,683,615 94,511,428
----------- ------------
Total shareholders' equity 85,709,227 108,778,692
----------- ------------
Total liabilities and shareholders' equity $91,003,557 $115,887,825
=========== ============
</TABLE>
See accompanying notes to consolidated financial statements
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PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1997 1996
---- ----
<S> <C> <C>
Revenue $ -- $ 3,491,441
Agency and representatives' commissions -- 529,577
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Net revenue -- 2,961,864
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Operating expenses -- 2,131,801
Corporate expenses 908,888 727,109
Other income, net (1,111,251) (426,918)
Gain on sale of media properties -- (95,451,878)
Interest expense 17,648 212,376
Depreciation and amortization 12,528 430,409
----------- ------------
(172,187) (92,377,101)
----------- ------------
Income before income taxes 172,187 95,338,965
Income tax expense -- 25,021,067
----------- ------------
Net income $ 172,187 $ 70,317,898
=========== ============
Income per share $ .02 $ 7.08
=========== ============
</TABLE>
See accompanying notes to consolidated financial statements
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PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1997 1996
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<S> <C> <C>
Net cash provided by operating activities $ 135,736 $ 25,602,315
Cash flows provided by (used in) investing
activities:
Purchase of marketable securities (9,539,996) --
Sale of marketable securities 5,348,618 --
Proceeds from sale of media properties -- 156,007,011
Gains on sale of media properties -- (71,662,104)
Purchase of available-for-sale securities
and long-term investments (22,580,667) --
Sale of available-for-sale securities and
long-term investments 5,358,887 --
Long-term investment in equity securities -- (2,000,000)
Capital expenditures -- (100,619)
------------ -------------
Net cash provided by (used in) investing
activities (21,413,158) 82,244,288
------------ -------------
Cash flows used in financing activities:
Repayment of long-term debt -- (28,000,000)
Purchase of Company common stock (20,877,152) (903,009)
Proceeds from stock options exercised -- 271,405
------------ ------------
Net cash used in financing activities (20,877,152) (28,631,604)
------------ ------------
Net increase (decrease) in cash and cash
equivalents (42,154,574) 79,214,999
Cash and cash equivalents at beginning of
quarter 83,356,748 1,206,557
------------ ------------
Cash and cash equivalents at end of quarter $ 41,202,174 $ 80,421,556
============ ============
Supplemental information:
Income taxes paid, net of refunds $ 53,289 $ 1,901,500
============ ============
Interest paid $ 17,648 $ 712,855
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
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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. 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 7,851,606 and 9,931,015 for the quarter
ended March 31, 1997 and 1996, respectively.
3. REPURCHASE OF COMMON STOCK
During the quarter ended March 31, 1997, the Company repurchased
approximately 2,177,000 shares of its common stock at an average price of $9.59
per share.
4. SUBSEQUENT EVENTS
On April 21, 1997, Robert Price, President of the Company, exercised
625,000 employee stock options with an exercise price of $3 per share.
In May 1997, the Company's Board of Directors and Compensation
Committee authorized the issuance to Mr. Price of approximately 728,000 shares
of the Company's newly authorized Series A Preferred Stock ("Preferred Stock"),
in respect of which, in the event of (i) a merger of the Company, the sale or
exchange of all or substantially all of the Company's assets or the occurrence
of any other transaction or event as a result of which the holders of Common
Stock receive at least $22.00 per share or (ii) the acquisition of more than
50% of the voting power of the securities of the Company then outstanding by
any person, entity or group, provided the market value of the Common Stock of
the Company at such time is at least $22.00 per share (the amount per share
received by holders of Common Stock or the market price per share of Common
Stock described above being referred to as the "Transaction Price"), Mr. Price
would receive a payment per each share of the Preferred Stock equal to the sum
of 25% of the excess of the Transaction Price per share (up to $32.00) over
$9.125 (the closing sales price of the Company's Common Stock on the day
preceding the authorization of the Preferred Stock), 50% of the excess of the
Transaction Price per share (up to $42.00) over $32.00, 100% of the excess of
the Transaction Price per share (up to $52.00) over $42.00, and 125% of the
excess of the Transaction Price per share over $52.00. Each share of Preferred
Stock is entitled to one vote per share, and to receive dividends and
liquidation distributions (other than in a transaction resulting in a payment
as described above) at the rate of 1% of the dividends and liquidation
distributions payable with respect to a share of Common Stock.
The shares of Preferred Stock will be repurchased by the Company in the
event of Mr. Price's death or termination of employment prior to a transaction
resulting in a payment as aforesaid, as follows:
(i) If his employment with the company terminates because of death or
disability or termination by the Company not for cause, or his retirement
subsequent to the Company's Common Stock trading for an average of at least
$22.00 per share over a period of 10 consecutive trading days, the Company will
repurchase the Preferred Stock at its then fair market value, as determined by
appraisal.
(ii) If his employment terminates for any reason except as aforesaid,
the Company will repurchase the Preferred Stock at the lower of the price paid
by him for such stock or its then fair market value, as determined by
appraisal.
The foregoing provisions with respect to the Preferred Stock are
subject to appropriate adjustment in the event of a stock split, stock dividend
or similar event affecting the Company's Common Stock.
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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 did not have any results from operations during the first
quarter of 1997, since the company sold its television stations during 1996.
Other income for the three months ended March 31, 1997 principally includes
recoveries on accounts and notes receivable of approximately $449,000 and
interest income of $919,000. These revenues were partially offset by an
unrealized loss on marketable securities of approximately $327,000.
The Company's per share income was $ 0.02 for the quarter ended March
31, 1997, as compared to income of $7.08 for the first quarter of 1996. The 1996
net income resulted primarily from gains on the sale of the Company's television
stations.
LIQUIDITY AND CAPITAL RESOURCES
The Company had approximately $41.2 million and $83.4 million in cash
and cash equivalents at March 31, 1997, and December 31, 1996, respectively. The
Company has net working capital of approximately $60.5 million at March 31,
1997. The Company has no long-term debt outstanding as of March 31, 1997.
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 media-related securities; and (iv) other
acquisition and investment opportunities which may present themselves from time
to time.
In February 1997, the Company's Board of Directors authorized the
repurchase by the Company of up to 2,000,000 shares of its Common Stock. The
Company is authorized to make such purchases from time to time in the market or
privately negotiated transactions. During the three months ended March 31, 1997,
the Company repurchased approximately 1,164,000 shares pursuant to that and a
prior authorization, and repurchased approximately 1,013,000 shares from an
institutional investor in a separately authorized purchase.
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7
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Shareholders on March 27, 1997.
The Board of Directors was re-elected in its entirety by a vote of no
fewer than 54.6% of shares available to vote cast in favor of any
single candidate with none voting against and no more than 32% withheld
from voting from any single candidate.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
8
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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 13, 1997 By /s/ Robert Price
----------------------------
Robert Price
President and Chief Financial Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 41,202,174
<SECURITIES> 24,461,020
<RECEIVABLES> 79,367
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 65,760,047
<PP&E> 146,472
<DEPRECIATION> 0
<TOTAL-ASSETS> 91,003,557
<CURRENT-LIABILITIES> 5,294,330
<BONDS> 0
0
0
<COMMON> 68,618
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 91,003,557
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,111,251
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,648
<INCOME-PRETAX> 172,187
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 172,187
<EPS-PRIMARY> .02
<EPS-DILUTED> 0
</TABLE>
