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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 7, 2000
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The Liberty Corporation
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(Exact name of Registrant as Specified in Charter)
South Carolina 1-5846 57-0507055
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
2000 Wade Hampton Boulevard, Greenville, SC 29615
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (864) 609-8256
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n/a
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 9. REGULATION FD DISCLOSURE.
Liberty Corporation Reports Third Quarter Results
[LIBERTY CORPORATION LETTERHEAD]
For Further Information: Jim Keelor (864) 609-8388
THE LIBERTY CORP. REPORTS THIRD-QUARTER RESULTS
Third quarter net revenues increase 15%;
Consolidated broadcast cash flow up 16%
GREENVILLE, S.C., Nov. 7, 2000 -- The Liberty Corp. (NYSE: LC) today reported
financial results for third quarter and nine months ended Sept. 30, 2000. As
previously announced, on Nov. 1, 2000 Liberty completed the sale of its
insurance operations to Royal Bank of Canada for approximately $650 million in
cash. The Company's insurance operations have been classified as discontinued
operations for all periods presented.
After the sale of its insurance operations Liberty's primary operating
subsidiary is Cosmos Broadcasting, a major group broadcaster currently owning
and operating 12 network-affiliated television stations. Cosmos' previously
announced agreement to purchase Civic Communications for $204 million in cash is
expected to
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close prior to the end of the year, and will increase to 15 the number of
stations owned.
Net revenue from continuing operations for the quarter increased 15
percent over last year's third quarter, to $43.3 million and income from
continuing operations increased 27 percent to $4.0 million. For the nine months
ended Sept. 30, 2000, net revenue increased 10 percent to $124.3 million and
income from continuing operations was $16.3 million, an increase of 33 percent
compared with the corresponding prior year period. Operating income, or income
before net investment income, interest expense and income taxes was $10.5
million for the third quarter 2000 compared with $9.1 million for the prior year
quarter. Operating income for the nine months ended Sept. 30, 2000 was $28.4
million, a 6 percent decline from the prior year.
Consolidated broadcast cash flow totaled $18.4 million for the third
quarter and $51.3 million for the nine months ended September 30, 2000,
increases of 16 percent and 5 percent, respectively, from the corresponding
prior year periods. On a same-station basis, adjusting for the March, 2000
acquisition of KCBD-TV, the NBC affiliate in Lubbock, Texas, broadcasting cash
flow increased 9 percent for the quarter and declined 2 percent year-to-date, as
compared with the prior year. Same-station cash flow for the station operations
increased 13 percent and 2 percent compared with prior year quarter and
year-to-date periods. Cash flow from the Company's cable and other operations
declined for the quarter and year-to-date periods due to start-up expenses
associated with the Company's direct mail coupon operations and new cable
advertising sales contracts.
Hayne Hipp, president of Liberty Corp., said, "The third quarter of
2000 was somewhat unusual in that the late starting summer Olympics overlapped
the beginning of a significant political spending period. With seven NBC
stations, Cosmos had solid incremental revenue growth from the Olympic games,
although total Olympic sales were below our aggressive expectations."
"On the other hand, political spending exceeded our expectations and
many candidates made good use of unsold Olympic inventory," Hipp continued. "Not
unexpectedly, national business softened in the quarter as some advertisers
chose not to compete for inventory targeted by Olympic sponsors and the
political candidates. Overall the automotive, fast food, telecommunications and
financial categories performed well for our stations during the quarter. Retail,
grocery and drugs, and national package food categories were down from the prior
year levels. All said, obviously we are pleased with a 16 percent increase in
broadcast cash flow for the quarter."
Commenting on the outlook for the fourth quarter Jim Keelor, president
of Cosmos Broadcasting, said, "Cosmos expects solid incremental growth for the
quarter. Net revenue for the fourth quarter 1999 was $41.1 million and, based on
current pacings, we are expecting an increase of 8% to 10%, excluding the impact
of acquisitions. Although national business continues to be soft, local business
is reasonable and political business is outstanding. Our stations tend to do
better than our peers in capturing political revenues due to the dominant local
news positions of our stations, and the candidates' preference to advertise in
and around those newscasts.
"The key to the quarter may be the strength of retail business normally
associated with the Christmas holiday," Keelor continued. "Finally, the fourth
quarter will benefit incrementally from the addition of KCBD-TV, as well as the
Civic acquisition, which is expected to close at the end of November."
A major group broadcaster, Liberty's Cosmos subsidiary currently owns
twelve network-affiliated television stations, including seven NBC affiliates,
three ABC affiliates, and two CBS affiliates, which in the aggregate cover
approximately 2.7% of U.S. households. The company headquarters is in
Greenville, S.C.
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FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain information contained herein or in any
other written or oral statements made by, or on behalf of the Company, is or may
be viewed as forward looking. The words "expect," "believe," "anticipate" or
similar expressions identify forward-looking statements. Although the Company
has used appropriate care in developing any such forward looking information,
forward looking information involves risks and uncertainties that could
significantly impact actual results. These risks and uncertainties include, but
are not limited to, the following: changes in national and local markets for
television advertising; changes in general economic conditions, increasing
competition in the Company's markets; and future regulatory actions or
conditions, effecting either the television broadcasting industry as whole or
specific to the markets the Company serves. The Company undertakes no obligation
to publicly update or revise any forward looking statements, whether as a result
of new information, future developments, or otherwise.
Conference Call Information
A live broadcast of The Liberty Corporation's conference is scheduled for
Tuesday, Nov. 7 at 2:00 p.m. Eastern time. An online replay will be available
approximately two hours following the conclusion of the live broadcast and will
continue through Dec. 7, 2000. A link to these events can be found at the
Company's website: www.Libertycorp.com.
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THE LIBERTY CORPORATION AND SUBSIDIARIES -- FINANCIAL HIGHLIGHTS
INCOME STATEMENT INFORMATION
<TABLE>
<CAPTION>
Three Months ended Nine Months Ended
September 30, September 30,
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(In 000's, except per share data) 2000 1999 2000 1999
------------ ------------ ----------- ------------
(Unaudited)
<S> <C> <C> <C> <C>
REVENUES
Station revenues (net of commissions) $ 40,058 $ 35,091 $ 114,737 $ 105,894
Cable advertising and other revenues 3,234 2,399 9,539 6,962
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NET REVENUES 43,292 37,490 124,276 112,856
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EXPENSES
Operating expenses 23,187 20,358 68,166 59,369
Amortization of program rights 1,704 1,284 4,792 4,377
Depreciation and amortization of intangibles 5,272 4,199 14,864 12,468
Corporate, general, and administrative
expenses 2,661 2,534 8,025 6,287
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TOTAL OPERATING EXPENSES 32,824 28,375 95,847 82,501
OPERATING INCOME 10,468 9,115 28,429 30,355
Net investment income 724 137 12,016 1,192
Interest expense 4,314 3,754 12,705 11,253
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INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES 6,878 5,498 27,740 20,294
Provision for income taxes 2,885 2,364 11,448 8,042
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INCOME FROM CONTINUING OPERATIONS 3,993 3,134 16,292 12,252
Income from discontinued operations
(net of taxes) 7,573 14,075 26,061 20,544
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NET INCOME $ 11,566 $ 17,209 $ 42,353 $ 32,796
============ ============ =========== ============
EARNINGS PER SHARE:
Basic earnings per common share from
continuing operations $0.21 $0.15 $0.83 $0.60
Basic earnings per common share from
discontinued operations 0.39 0.73 1.35 1.08
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Basic earnings per common share $0.60 $0.88 $2.18 $1.68
============ ============ =========== ============
Diluted earnings per common share from
continuing operations $0.20 $0.15 $0.83 $0.59
Diluted earnings per common share from
discontinued operations 0.38 0.72 1.32 1.08
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Diluted earnings per common share $0.58 $0.87 $2.15 $1.67
============ ============ =========== ============
</TABLE>
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REVENUE AND CASH FLOW INFORMATION
<TABLE>
<CAPTION>
($ in thousands) Three Months ended Sept. 30 Pro Forma
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2000 1999 % Change % Change(5)
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<S> <C> <C> <C> <C>
Net revenue
Stations $40,058 $35,091 14% 7%
Cable advertising sales and other operations 3,234 2,399 35% 35%
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TOTAL NET REVENUE $43,292 $37,490 15% 9%
Broadcast cash flow (2)
Stations 18,566 $15,383 21% 13%
Cable advertising sales and other operations (167) 466 N/A N/A
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CONSOLIDATED BROADCAST CASH FLOW $18,399 $15,849 16% 9%
Corporate cash expenses (2,011) (2,351) (14%) (14%)
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OPERATING CASH FLOW (1) $16,388 $13,498 21% 13%
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Broadcast cash flow margin (3)
Stations 46% 44%
Cable advertising sales and other operations (5%) 19%
Total broadcast cash flow margin 42% 42%
Operating cash flow margin (4) 38% 36%
($ in thousands) Nine Months ended Sept. 30 Pro Forma
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2000 1999 % Change % Change(5)
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Net revenue
Stations $114,737 $105,894 8% 3%
Cable advertising sales and other operations 9,539 6,962 37% 37%
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TOTAL NET REVENUE $124,276 $112,856 10% 5%
Broadcast cash flow (1)
Stations $51,229 $47,529 8% 2%
Cable advertising sales and other operations 87 1,582 (95%) (95%)
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CONSOLIDATED BROADCAST CASH FLOW $51,316 $49,111 5% (2%)
Corporate cash expenses (6,813) (6,146) 11% 11%
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OPERATING CASH FLOW (2) $44,503 $42,965 4% (3%)
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Broadcast cash flow margin (3)
Stations 45% 45%
Cable advertising sales and other operations 1% 23%
Total broadcast cash flow margin 41% 44%
Operating cash flow margin (4) 36% 38%
</TABLE>
(1) Broadcast cash flow is operating cash flow before cash headquarters
expenses.
(2) Operating cash flow is defined as operating income plus depreciation
and amortization, and non-cash compensation expense.
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(3) Broadcast cash flow divided by net revenue.
(4) Operating cash flow divided by net revenue.
(5) Pro forma results excluding the acquisition of KCBD-TV in March, 2000.
The Company has includes operating cash flow and broadcast cash flow data
because management believes that such data are commonly used as measures of
performance among companies in the broadcast industry. Operating cash flow and
broadcast cash flow should not be considered in isolation, or as alternatives to
operating income (as determined in accordance with generally accepted accounting
principles) as an indicator of the entity's operating performance, or to cash
flow from operating activities (as determined in accordance with generally
accepted accounting principles) as a measure of liquidity. These measures are
believed to be, but may not in all cases be, comparable to similarly titled
measures used by other companies.
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Balance Sheet Information
(in thousands except per share information)
<TABLE>
<CAPTION>
Sept. 30, Dec. 31,
2000 1999
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<S> <C> <C>
Assets
Cash, receivables, prepaid assets, and program rights $ 49,836 $ 49,517
Net assets of discontinued operations 490,275 479,645
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Total current assets 540,511 529,162
Property, plant and equipment, net 71,497 62,892
Intangible assets 261,574 217,916
Other assets 43,614 44,716
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Total assets $917,196 $854,686
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Liabilities and Shareholders' Equity
Account payable and other accrued expenses $36,003 $16,769
Revolving credit facility 258,000 234,000
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Current liabilities 294,003 250,769
Other liabilities 41,950 49,693
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Total liabilities 335,953 300,462
Shareholders' equity 581,243 554,224
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Total liabilities and shareholders' equity $917,196 $854,686
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Common and common equivalent shares outstanding 19,916 19,937
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Book Value per common equivalent share $29.18 $27.80
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</TABLE>
Cash received from the insurance operations sale subsequent to September 30,
2000, after netting of expenses and income taxes, was approximately $500
million. The Company has fully repaid its revolving credit facility and will
also use a portion of the proceeds to fund the acquisition of Civic
Communications.
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SIGNATURE
Pursuant to the requirements 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.
THE LIBERTY CORPORATION
By: /s/ Martha Williams
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Name: Martha Williams
Title: Vice President, General Counsel
and Secretary
November 7, 2000
