FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-12404
JACOR COMMUNICATIONS, INC.
An Ohio Corporation Employer Identification
No. 31-0978313
Commission File No. 0-28646
JCAC, INC.
A Florida Corporation Employer Identification
No. 31-1461588
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Telephone (513) 621-1300
Indicate by check mark whether the Registrant, Jacor Communications, Inc.,
(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
twelve 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 ninety days.
Yes X No
Indicate by check mark whether the Co-Registrant, JCAC, Inc., (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
twelve months (or for such shorter period that the Co-Registrant
was required to file such reports), and (2) has been subject to
such filing requirements for the past ninety days.
Yes No X
At August 14, 1996, 31,240,000 shares of the Registrant's common
stock were outstanding.
JACOR COMMUNICATIONS, INC.
INDEX
Page
Number
PART I. Financial Information
Item 1. - Financial Statements
Condensed Consolidated Balance Sheets
as of June 30, 1996 and December 31,
1995 3
Condensed Consolidated Statements of
Operations for the three months and
six months ended June 30, 1996
and 1995 4
Condensed Consolidated Statements of
Cash Flows for the six months ended
June 30, 1996 and 1995 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2. - Management's Discussion and Analysis
of Financial Condition and Results of
Operations 13
PART II. Other Information
Item 6. - Exhibits and Reports on Form 8-K 19
Signatures 20
<TABLE>
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
June 30, December 31,
1996 1995
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $319,528,936 $ 7,436,779
Accounts receivable, less allowance for
doubtful accounts of $1,950,000 in 1996
and $1,606,000 in 1995 34,591,047 25,262,410
Other current assets 11,434,822 3,916,140
Total current assets 365,554,805 36,615,329
Property and equipment, net 40,596,697 30,801,225
Intangible assets, net 177,361,757 127,157,762
Other assets 124,765,369 14,264,775
Total assets $708,278,628 $208,839,091
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,241,348 $ 2,312,691
Accrued payroll 2,832,551 3,177,945
Accrued federal, state and
local income tax 3,133,516 3,225,585
Other current liabilities 9,932,927 3,463,344
Total current liabilities 22,140,342 12,179,565
Long-term debt 100,000,000 45,500,000
5.5% Liquid Yield Option Notes 115,506,405
Other liabilities 6,062,209 3,468,995
Deferred tax 8,809,956 8,617,456
Shareholders' equity:
Common stock, no par value, $.10
per share stated value 3,123,900 1,815,721
Additional paid-in capital 427,728,870 116,614,230
Common stock warrants 388,055
Retained earnings 24,906,946 20,255,069
Total shareholders' equity 455,759,716 139,073,075
Total liabilities and
shareholders' equity $708,278,628 $208,839,091
The accompanying notes are an integral part
of the condensed consolidated financial statements.
</TABLE>
<TABLE>
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the three months and six months ended June 30, 1996 and 1995
(UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Broadcast revenue $48,460,503 $34,692,538 $82,032,817 $61,533,031
Less agency commissions 5,340,541 3,826,238 8,838,819 6,650,548
Net revenue 43,119,962 30,866,300 73,193,998 54,882,483
Broadcast operating expenses 29,550,293 22,153,655 53,420,871 42,113,315
Depreciation and amortization 2,914,448 2,228,136 5,435,468 4,340,107
Corporate general and
administrative expenses 1,283,323 856,503 2,421,883 1,740,529
Operating income 9,371,898 5,628,006 11,915,776 6,688,532
Interest expense (4,343,360) (104,384) (6,553,302) (209,206)
Gain on sale of radio stations 2,539,407
Other income, net 1,313,560 397,939 1,540,772 707,549
Income before
income taxes and
extraordinary loss 6,342,098 5,921,561 9,442,653 7,186,875
Income tax expense (2,581,000) (2,393,000) (3,840,000) (2,907,000)
Income before
extraordinary loss 3,761,098 3,528,561 5,602,653 4,279,875
Extraordinary loss, net
of income tax credit (950,775)
Net income $ 3,761,098 $ 3,528,561 $ 4,651,878 $4,279,875
Net income per common share:
Before extraordinary loss $ 0.17 $ 0.17 $ 0.27 $ 0.20
Extraordinary loss (0.05)
Net income per
common share $ 0.17 $ 0.17 $ 0.22 $ 0.20
Number of common shares used
in per share computations 22,362,415 21,161,122 20,865,541 21,254,686
The accompanying notes are an integral
part of the condensed consolidated financial statements.
</TABLE>
<TABLE>
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1996 and 1995
(UNAUDITED)
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,651,878 $ 4,279,875
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 2,115,555 1,442,798
Amortization of intangibles 3,319,912 2,897,310
Extraordinary loss 950,775
Provision for losses on accounts
receivable 607,314 554,562
Non-cash interest expense 541,278
Deferred income tax provision (benefit) 192,500 (293,000)
Gain on sale of radio stations (2,539,407)
Other (201,733) 111,097
Change in current assets and current
liabilities net of effects of
acquisitions and disposals:
Accounts receivable (6,547,655) (37,596)
Other current assets (6,942,483) (1,050,751)
Accounts payable 3,694,774 (139,363)
Accrued payroll and other current
liabilities 2,986,989 249,823
Net cash provided by operating activities 2,829,697 8,014,755
Cash flows from investing activities:
Capital expenditures (5,070,668) (2,037,563)
Cash paid for acquisitions (66,435,210) (17,248,732)
Proceeds from sale of radio stations 6,595,396
Purchase of Noble warrant (52,775,170)
Loans made in conjunction with acquisitions (42,215,000) (3,612,443)
Other (2,642,491) 392,500
Net cash used by investing activities (162,543,143) (22,506,238)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 303,000,000 4,000,000
Proceeds from issuance of LYONs 115,172,086
Proceeds from issuance of common stock 317,109,503 172,191
Repayment of long-term debt (248,500,000)
Repurchase of common stock (11,226,050)
Repurchase of warrants (1,379,374)
Payment of finance costs (13,496,612)
Other (100,000) (275,000)
Net cash provided (used) by financing
activities 471,805,603 (7,328,859)
Net increase (decrease) in cash and
cash equivalents 312,092,157 (21,820,342)
Cash and cash equivalents at
beginning of period 7,436,779 26,974,838
Cash and cash equivalents at end of period $319,528,936 $ 5,154,496
The accompanying notes are an integral part
of the condensed consolidated financial statements.
</TABLE>
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. FINANCIAL STATEMENTS
The December 31, 1995 consolidated balance sheet data was derived from
audited financial statements, but does not include all disclosures
required by generally accepted accounting principles. The financial
statements included herein have been prepared by the Company, without
audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Although certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, the Company
believes that the disclosures are adequate to make the information
presented not misleading and reflect all adjustments (consisting only of
normal recurring adjustments) which are necessary for a fair
presentation of results of operations for such periods. Results for
interim periods may not be indicative of results for the full year. It
is suggested that these financial statements be read in conjunction with
the consolidated financial statements for the year ended December 31,
1995 and the notes thereto.
2. ACQUISITIONS
Noble Broadcast Group, Inc.
In February 1996, the Company agreed to acquire Noble Broadcast Group,
Inc. ("Noble"), for approximately $152,000,000 in cash plus related
costs and expenses. The Company entered into an agreement with the
stockholders of Noble to acquire all of the outstanding capital stock of
Noble for approximately $12,500,000. At the same time, the Company also
purchased a warrant for $52,775,170 entitling the Company to acquire a
79.1% equity interest in Noble (the "Noble Warrant"). On July 15, 1996,
the Company consummated the purchase of the outstanding Noble capital
stock from the Noble stockholders and exercised the Noble Warrant,
resulting in the Company owning 100% of the equity interests in Noble.
The Company financed this acquisition from the proceeds of a new credit
facility (see Note 4).
Noble owned ten radio stations serving Denver (two AM and two FM), St.
Louis (one AM, two FM) and Toledo (one AM, two FM).
Also, in February 1996, a wholly owned subsidiary of the Company
purchased for approximately $47,000,000 certain assets from Noble
relating to Noble's San Diego operations. As part of Noble's San Diego
operations, Noble provided programming to and sold the air time for two
radio stations serving San Diego (one AM, one FM), which programming and
air time is now provided and sold by the Company. In addition, another
wholly owned subsidiary of the Company provided a credit facility to
Noble in the amount of $41,000,000 of which $40,000,000 was drawn down.
Such amount became part of the purchase consideration upon consummation
of the transaction on July 15, 1996.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2. ACQUISITIONS, Continued
Citicasters Inc.
In February 1996, the Company signed an agreement and plan of merger to
acquire Citicasters Inc. ("Citicasters") owner of 19 radio stations in
eight U.S. markets as well as two network affiliated television
stations. Citicasters' radio stations serve Atlanta, Cincinnati,
Columbus, Kansas City, Phoenix, Portland, Sacramento, and Tampa. The
television stations serve Cincinnati and Tampa. The agreement is
subject to various conditions including the receipt of consents from
regulatory authorities. In July, the Company reached an agreement with
the Antitrust Division of the Department of Justice allowing it to
proceed with this acquisition. Pursuant to the agreement, the Company
will divest WKRQ, one of the two Cincinnati radio stations to be
acquired. The agreement remains subject to receipt of consent from the
Federal Communications Commission. In conjunction with this agreement,
the Company has delivered to the seller a $75,000,000 non-refundable
deposit in the form of a letter of credit. The letter of credit
requires annual fees of 1.25% and can be drawn upon by Citicasters if
the merger agreement is terminated.
The Company will pay $29.50 per share in cash, plus, in the event that
the closing does not occur prior to October 1, 1996, for each full
calendar month ending prior to the merger commencing with October 1996,
an additional amount of $.22125 per share in cash. In addition, for each
share of Citicasters common stock held, Citicasters shareholders will
receive one Jacor warrant to purchase a fractional share of Jacor common
stock (which fraction is anticipated to be .2035247) at a price of
$28.00 per full share of Jacor common stock. If the merger is not
consummated by October 1, 1996, the exercise price for the warrants to
purchase 4,400,000 shares of Jacor stock will be reduced to $26.00 per
share. The cash purchase price, which is approximately $630,000,000,
will increase by approximately $5,000,000 for each full month subsequent
to October, 1996 but prior to the merger.
The cash to be paid in connection with the acquisition of Citicasters,
together with the fees and expenses incurred in connection therewith,
will be financed through (i) the net proceeds from the 1996 Stock
Offering - see Note 6; (ii) the net proceeds from the sale of Liquid
Yield Option Notes - see Note 5; (iii) the net proceeds from the sale of
Senior Subordinated Notes - see Note 4 (i, ii and iii together the
"Offerings"); and (iv) borrowings under a New Credit Facility with an
available principal amount of $600,000,000.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2. ACQUISITIONS, Continued
The above acquisitions will be accounted for as purchases.
The excess cost over the fair value of identifiable net assets
acquired will be amortized over 40 years. Assuming each of these
acquisitions had taken place at the beginning of 1996 and 1995,
respectively, unaudited pro forma consolidated results of operations
would have been as follows (amounts in thousands except per share):
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Net revenue $87,433 $79,681 $154,636 $144,181
Income (loss) before
extraordinary
items 3,194 854 ( 1,919) ( 6,611)
Net income (loss)
per share 0.10 0.03 ( 0.06) ( 0.21)
Other Acquisitions
In March 1996, the Company entered into an agreement to acquire the FCC
licenses and certain operating assets of WCTQ-FM and WAMR-AM in Venice,
Florida for $4,435,000 in cash.
In May 1996, the Company entered into an agreement to acquire the FCC
licenses and certain operating assets of WIOT-FM and WCWA-AM in Toledo,
Ohio for $13,000,000 in cash, which funds have been placed in escrow
pending the closing of the transaction. Subject to certain conditions,
pending the closing of this transaction, the Company has entered into a
time brokerage agreement with respect to these stations.
In June 1996, the Company financed the purchase for $540,000 by Critical
Mass Media, Inc. ("CMM") of a 40% interest in a newly formed limited
liability company that has agreed to purchase the assets of Duncan
American Radio, Inc. CMM is a marketing research and radio consulting
business which is owned by a limited partnership of which the Company is
the 5% general partner and a corporation wholly owned by Randy Michaels,
the president of the Company, is the 95% limited partner. The Company
financed such purchase using cash on hand.
In June 1996, the Company entered into an agreement to acquire the FCC
licenses and certain operating assets of WLAP-AM, WMXL-FM and WWYC-FM in
Lexington, Kentucky for $14,000,000 in cash. The Company anticipates
that it will consummate this acquisition upon receipt of the required
FCC approvals.
Subsequent to June 30, 1996, the Company entered into an agreement to
acquire the FCC licenses and certain operating assets of radio stations
WSPB-AM and WSRZ-FM located in Sarasota, Florida and WYNF-FM in Coral
Cove, Florida for $12,500,000 in cash. The Company anticipates that it
will consummate this acquisition upon receipt of the required FCC
approvals.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. OTHER ASSETS
The Company's other assets at June 30, 1996 and December 31, 1995
consist of the following:
June 30, December 31,
1996 1995
Noble Warrant $ 52,775,170
Loan to Noble 40,000,000
Acquisition escrows 13,700,000
Other 18,290,199 $ 14,264,775
$124,765,369 $ 14,264,775
4. LONG-TERM DEBT
The Company's debt obligations at June 30, 1996 and December 31, 1995
consist of the following:
June 30, December 31,
1996 1995
Credit facility borrowings $ 45,000,000
10 1/8% Senior Subordinated
Notes, due 2006 $100,000,000
$100,000,000 $ 45,500,000
Existing Credit Facility
On February 20, 1996 the Company entered into a credit facility (the
"Existing Credit Facility") with a group of banks. The Company borrowed
approximately $200,000,000 under the facility in conjunction with the
Noble and other acquisitions. In June 1996, outstanding borrowings were
repaid from a portion of the proceeds from the Offerings. In connection
with the acquisition of Citicasters, the Company entered into a new
credit facility described below.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
4. LONG-TERM DEBT, Continued
New Credit Facility
In June, the Company entered into a new credit facility (the "New Credit
Facility"). The New Credit Facility is with a syndicate of banks and
other financial institutions. The New Credit Facility provides
availability of up to $600,000,000 of loans in three components: (i) a
revolving credit facility of up to $200,000,000 with mandatory semi-
annual commitment reductions beginning six months prior to the third
anniversary of the closing of the New Credit Facility and a final
maturity date of seven years after initial funding; (ii) a term loan of
up to $300,000,000 with scheduled semi-annual reductions beginning six
months prior to the second anniversary of the closing of the New Credit
Facility and a final maturity date of seven years after initial funding;
and (iii) a term loan of up to $100,000,000 with scheduled semi-annual
reductions beginning six months prior to the third anniversary of the
closing of the New Credit Facility and a final maturity date of eight
years after initial funding.
Borrowings under the New Credit Facility will bear interest at rates
that fluctuate with a bank base rate and/or the Eurodollar rate.
Loans under the New Credit Facility will be guaranteed by the Company
and each of the Company's direct and indirect subsidiaries other than
certain immaterial subsidiaries. The Company's obligations with respect
to the New Credit Facility and each guarantor's obligations with respect
to the related guaranty is collateralized by substantially all of their
respective assets, including, without limitation, inventory, equipment,
accounts receivable, intercompany debt and, in the case of the Company's
subsidiaries, capital stock.
The New Credit Facility contains covenants and provisions that restrict,
among other things, the Company's ability to: (i) incur additional
indebtedness; (ii) incur liens on its property; (iii) make investments
and advances; (iv) enter into guarantees and other contingent
obligations; (v) merge or consolidate with or acquire other person or
engage in other fundamental changes; (vi) engage in certain sales of
assets; (vii) make capital expenditures; (viii) enter into leases; (ix)
engage in certain transactions with affiliates; and (x) make restricted
junior payments. The New Credit Facility also requires satisfaction of
certain financial performance criteria (including a consolidated
interest coverage ratio, a leverage-to-operating cash flow ratio and a
consolidated operating cash flow available for fixed charges ratio) and
the repayment of loans under the New Credit Facility with proceeds of
certain sales of assets and debt issuances, and with 50% of the
Company's Consolidated Excess Cash Flow (as defined in the New Credit
Facility).
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
4. LONG-TERM DEBT, Continued
10 1/8% Senior Subordinated Notes Due 2006
In June, the Company completed an offering of $100,000,000 of its 10
1/8% Senior Subordinated Notes (the "Notes"). The Notes will mature on
June 15, 2006. Interest on the Notes is payable semi-annually on June
15 and December 15 of each year, commencing December 15, 1996. The
Company will not be required to make any mandatory redemption or sinking
fund payment with respect to the Notes prior to maturity. The Notes
will be redeemable at the option of the Company, in whole or in part, at
any time on or after June 15, 2001. The redemption prices commence at
105.063% and are reduced by 1.688% annually until June 15, 2004 when the
redemption price is 100%.
The Notes are general, unsecured obligations of the Company subordinated
in right of payment to all senior debt of the Company including the New
Credit Facility.
The Note Indenture contains certain covenants which impose certain
limitations and restrictions on the ability of the Company to incur
additional indebtedness, pay dividends or make other distributions, make
certain loans and investments, apply the proceeds of asset sales (and
use the proceeds thereof), create liens, enter into certain transactions
with affiliates, merge, consolidate or transfer substantially all its
assets and make investments in unrestricted subsidiaries.
5. LIQUID YIELD OPTION NOTES
In June, the Company issued 5.5% Liquid Yield Option Notes ("LYONs") due
2011 in the aggregate principal amount at maturity of $259,900,000.
Each LYON had an issue price of $443.14 and a principal amount at
maturity of $1,000. At June 30, 1996 the accreted value of the LYONs
was $115,506,405 which included $334,319 of accretion during the second
quarter.
Each LYON is convertible, at the option of the Holder, at any time on or
prior to maturity, unless previously redeemed or otherwise purchased,
into Common Stock at a conversion rate of 13.412 shares per LYON.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
5. LIQUID YIELD OPTION NOTES, Continued
The LYONs are not redeemable by the Company prior to June 12, 2001.
Thereafter, the LYONs are redeemable for cash at any time at the option
of the Company, in whole or in part, at redemption prices equal to the
issue price plus accrued original issue discount to the date of
redemption.
The LYONs will be purchased by the Company, at the option of the Holder,
on June 12, 2001 and June 12, 2006, for a Purchase Price of $581.25 and
$762.39 (representing issue price plus accrued original issue discount
to each date), respectively, representing a 5.50% yield per annum to the
Holder on such date, computed on a semiannual bond equivalent basis.
The Company, at its option, may elect to pay the purchase price on any
such purchase date in cash or Common Stock, or any combination thereof.
6. CAPITAL STOCK
Issuance of Additional Common Stock
In June, the Company issued pursuant to a public offering (the "1996
Stock Offering"), 11,250,000 shares of its Common Stock at a price of
$28.00 per share. Net proceeds to the Company from this 1996 Offering
were approximately $303,600,000. Such net proceeds will be used to
finance the Citicasters acquisition. Pending this application of the
net proceeds, the Company used a portion of the net proceeds to repay
all of its indebtedness under the Existing Credit Facility
(approximately $196,500,000).
1993 Warrants
In connection with the 1996 Stock Offering, the Company determined that
it would convert the 1,983,605 outstanding 1993 Warrants into the right
to receive the Fair Market Value (as defined in the 1993 Warrant)
calculated to be $19.70 per Warrant. This resulted in the issuance by
the Company of an additional 1,726,004 shares of Common Stock with
proceeds aggregating approximately $14,325,000. The Company used
approximately $5,100,000 of these proceeds to fund the conversion of the
remaining 1993 Warrants presented for redemption.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During the six-months ended June 30, 1996, the Company entered into
agreements to acquire Citicasters Inc. ("Citicasters"), Noble Broadcast
Group, Inc. ("Noble") and an additional seven radio stations located in
Venice, Florida; Toledo, Ohio and Lexington, Kentucky. In July 1996, the
Company completed the acquisition of Noble, which owned ten radio stations
serving Denver, St. Louis and Toledo. Previously, the Company purchased
Noble's operating assets in San Diego which included an exclusive sales
agency agreement under which Noble, and now the Company, provides programming
to and sells air time for two radio stations serving San Diego (XTRA-AM and
XTRA-FM). The aggregate value of the completed Noble acquisition is
approximately $160.0 million, including related fees and expenses. The
acquisition was funded through borrowings under the Company's Existing Credit
Facility. Additionally, the Company reached an agreement with the Antitrust
Division of the Department of Justice allowing it to proceed with the
Citicasters acquisition. Pursuant to the agreement, the Company will divest
WKRQ-FM, one of two Citicasters owned radio stations in Cincinnati. The
Company expects to receive FCC approval to complete the acquisition in the
third quarter of 1996. Discussion of the significant terms of the merger
agreement follows:
On February 12, 1996, the Company, JCAC, Inc., a Florida corporation and a
wholly owned subsidiary of the Company, and Citicasters, entered into an
agreement and plan of merger pursuant to which JCAC, Inc. will merge with and
into Citicasters, with Citicasters as the surviving corporation. As a result
of the merger, Citicasters will become a wholly owned subsidiary of the
Company.
The Company will pay $29.50 in cash per share, plus, in the event that the
closing does not occur prior to October 1, 1996, for each full calendar month
ending prior to the merger commencing with October 1996, an additional amount
of $.22125 in cash per share. In addition, for each share of Citicasters
common stock held, Citicasters shareholders will receive one warrant to
purchase a fractional share of Company common stock (which fraction is
anticipated to be .2035247) at a price of $28.00 per full share of common
stock. If the merger is not consummated by October 1, 1996, the exercise
price for the warrants to purchase 4,400,000 shares of Company stock will be
reduced to $26.00 per share. The cash purchase price, which is approximately
$630.0 million, will increase by approximately $5.0 million for each full
month subsequent to October, 1996 but prior to the merger.
The merger agreement may be terminated prior to the consummation of the
merger by either the Company or Citicasters under various circumstances,
including the failure to consummate the merger on or before May 31, 1997. If
the merger agreement is terminated upon the occurrence of certain triggering
events, including the failure to consummate the merger by May 31, 1997,
Citicasters may draw upon an irrevocable direct pay letter of credit in the
amount of $75.0 million obtained by the Company and issued to an escrow agent
on behalf of Citicasters. Except in certain circumstances, the right to
terminate the merger agreement and receive a maximum of $75.0 million
pursuant to a draw on the letter of credit is Citicasters' exclusive remedy
upon the occurrence of a triggering event.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES, Continued
Citicasters' outstanding 9 3/4% Senior Subordinated Notes (the "Notes") will
become obligations of the surviving corporation in the merger. As a result
of a change in control covenant in the Notes, the holders of the Notes will
have the option to cause the Company to purchase the Notes at 101% of the
principal amount thereof. As part of the financing of the Citicasters
acquisition, the Company has entered into the New Credit Facility which will
allow the Company to purchase the Notes, if necessary.
The aggregate value of the merger, when consummated, is estimated to be
approximately $799.4 million. The cash to be paid in connection with the
merger and the refinancing of Citicasters' bank debt, together with the fees
and expenses incurred in connection therewith, will be financed through the
remainder of (i) the net proceeds from a public offering of 11,250,000 shares
of the Company common stock; (ii) the net proceeds of approximately $100.0
million from an offering by the Company of its Liquid Yield Option Notes due
2011; (iii) the net proceeds of an offering by the Company of $100.0 million
aggregate principal amount of its Senior Subordinated Notes due 2006;(iv) the
anticipated borrowings under the New Credit Facility and (v) excess cash.
These funds together with cash generated from operations will be sufficient
to meet the Company's liquidity and capital needs for the foreseeable future.
Approximately $214.6 million of the net proceeds from the Offerings were used
(i) to repay outstanding bank debt; (ii) to fund the escrows associated with
the purchase of the Toledo, Ohio and Lexington, Kentucky radio stations; and
(iii) to purchase the Venice, Florida radio stations.
During the first six months of 1996, the Company made capital expenditures of
approximately $5.1 million. The Company estimates that capital expenditures
for 1996 will be approximately $6.0 million which includes approximately $2.5
million for the purchase during the first quarter of 1996 of the building
currently housing the offices and studios of its Tampa radio stations and to
complete the relocation of the offices and studios of its Atlanta radio
stations. The Company estimates that capital expenditures for the properties
to be acquired from Citicasters and Noble would be approximately $4.0 million
in the 12-month period following the consummation of the acquisitions.
The actual level of spending will depend on a variety of factors,
including general economic conditions and the Company's business.
In connection with the merger, the Company entered into the New Credit
Facility which provides for availability of $600.0 million pursuant to a
$200.0 million reducing revolving facility under which the aggregate
commitments would reduce on a semi-annual basis commencing six months prior
to the third anniversary of the closing; a $300.0 million amortizing term
loan that would reduce on a semi-annual basis commencing six months prior to
the second anniversary of the closing; and a $100.0 million amortizing term
loan that would reduce on a semi-annual basis commencing six months prior to
the third anniversary of the closing. The New Credit Facility bears interest
at floating rates based on a Eurodollar rate or a bank base rate. The New
Credit Facility also provides the Company with additional credit for future
acquisitions as well as working capital and other general corporate purposes.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES, Continued
As a result of entering into the Existing Credit Facility in the first
quarter of 1996, Jacor expensed approximately $1.6 million of unamortized
cost associated with its 1993 credit agreement. Upon its termination
(anticipated by the Company to be during the third quarter of 1996), the
Company will write off approximately $3.4 million of unamortized cost
associated with its Existing Credit Facility.
The issuance of additional debt will negatively impact the Company's debt-to-
equity ratio and its results of operations and cash flows due to higher
amounts of interest expense, although the issuance of additional equity will
soften this impact to some extent. Also, if the Company were not able to
complete the merger due to certain circumstances, the Company would incur a
one-time charge of $75.0 million relating to the non-refundable deposit. If
debt were used to finance such payment, it would negatively impact the
Company's future results of operations and impede the Company's future growth
by limiting the amount available under the Existing Credit Facility.
RESULTS OF OPERATIONS
In the following analysis, management discusses station operating income
excluding depreciation and amortization. Station operating income excluding
depreciation and amortization should not be considered in isolation from, or
as a substitute for, operating income, net income or cash flow and other
consolidated income or cash flow statement data computed in accordance with
generally accepted accounting principles or as a measure of a company's
profitability or liquidity. Although this measure of performance is not
calculated in accordance with generally accepted accounting principles, it is
widely used in the broadcasting industry as a measure of a company's
operating performance because it assists in comparing station performance on
a consistent basis across companies without regard to depreciation and
amortization, which can vary significantly depending on accounting methods
(particularly where acquisitions are involved) or non-operating factors such
as historical cost bases. Station operating income excluding depreciation
and amortization also excludes the effect of corporate general and
administrative expenses, which generally do not relate directly to station
performance.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO THE SIX MONTHS ENDED
JUNE 30, 1995
Broadcast revenue for the first six months of 1996 was $82.0 million, an
increase of $20.5 million or 33.3% from $61.5 million during the first six
months of 1995. This increase resulted from an increase in advertising rates
in both local and national advertising and from the revenue generated at
those properties owned or operated during the 1995 first six months but not
during the comparable 1995 period. On a "same station" basis - reflecting
results from stations operated in the first six months of both 1996 and 1995
- - broadcast revenue for the 1996 period was $66.2 million, an increase of
$6.4 million or 10.7% from $59.8 million for the 1995 period.
Agency commissions for the first six months of 1996 were $8.8 million, an
increase of $2.1 million or 32.9% from $6.7 million during the first six
months of 1995 due to the increase in broadcast revenue.
Broadcast operating expenses for the first six months of 1996 were $53.4
million, an increase of $11.3 million or 26.9% from $42.1 million during the
first six months of 1995. These expenses increased as a result of expenses
incurred at those properties owned or operated during the first six months of
1996 but not during the comparable 1994 period and, to a lesser extent,
increased selling and other payroll costs and programming costs. On a "same
station" basis, broadcast operating expenses for the 1996 period were $42.2
million, an increase of $1.7 million or 4.4% from $40.5 million for the 1995
period.
Station operating income excluding depreciation and amortization for the six
months ended June 30, 1996 was $19.8 million, an increase of $7.0 million or
54.9% from the $12.8 million for the six months ended June 30, 1995. On a
"same station" basis, station operating income excluding depreciation and
amortization for the 1996 period was $16.9 million, an increase of $4.1
million or 31.3% from $12.8 million for the 1995 period.
Depreciation and amortization for the first six months of 1996 and 1995 was
$5.4 million and $4.3 million, respectively. The increase from period-to-
period resulted primarily from the acquisitions made by the Company during
the second half of 1995 and the first half of 1996.
Operating income for the first six months of 1996 was $11.9 million, an
increase of $5.2 million or 78.2% from an operating income of $6.7 million
during the first six months of 1995.
Interest expense for the first six months of 1996 and 1995 was $6.6 million
and $0.2 million, respectively. The increase in interest expense resulted
principally from the increase in the Company's outstanding long-term debt
which is primarily related to the Company's acquisition strategy and, to a
lesser extent, the Company's June 1996 sale of its 10 1/8% Senior
Subordinated Notes and 5.5% Liquid Yield Option Notes.
The gain on sale of radio stations in the first six months of 1996 resulted
from the Company's February sale of two FM radio stations in Knoxville.
The extraordinary item in the first six months of 1996 represented the write-
off of unamortized costs associated with the Company's 1993 Credit Agreement
which was replaced in February 1996 by the Company's Existing Credit
Facility.
Net income for the first six months of 1996 and 1995 was $4.7 and $4.3
million, respectively.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1995
Broadcast revenue for the second quarter of 1996 was $48.5 million, an
increase of $13.8 million or 39.7% from $34.7 million during the second
quarter of 1995. This increase resulted from an increase in advertising
rates in both local and national advertising and from the revenue generated
at those properties owned or operated during the 1996 second quarter but not
during the comparable 1995 period. On a "same station" basis - reflecting
results from stations operated in the second quarter of both 1996 and 1995 -
broadcast revenue for the 1996 and 1995 period was $37.8 million, an increase
of $4.0 million or 12.0% from $33.8 million for the 1995 period.
Agency commissions for the second quarter of 1996 were $5.3 million, an
increase of $1.5 million or 39.6% from $3.8 million during the second quarter
of 1995 due to the increase in broadcast revenue.
Broadcast operating expenses for the second quarter of 1996 were $29.6
million, an increase of $7.4 million or 33.4% from $22.2 million during the
second quarter of 1995. Theese expenses increased as a result of expenses
incurred at those properties owned or operated during the 1996 second quarter
but not during the comparable 1995 period and, to a lesser extent, increased
selling and other payroll costs and programming costs. On a "same station"
basis, broadcast operating expenese for the 1996 period were $22.6 million,
an increase of $1.2 million or 5.8% from $21.4 million for the 1995 period.
Station operating income excluding depreciation and amortization for the
three months ended June 30, 1996 was $13.6 million, an increase of $4.9
million or 55.8% from the $8.7 million for the three months ended June 30,
1995. On a "same station" basis, station operating income excluding
depreciation and amortization for the 1996 period was $11.1 million, an
increase of $2.4 million or 27.7% from $8.7 million for the 1995 period.
Depreciation and amortization for the second quarter of 1996 and 1995 was
$2.9 million and $2.2 million, respectively. The increase from quarter-to-
quarter resulted primarily from the acquisitions made by the Company during
the second half of 1995 and the first half of 1996.
Operating income for the second quarter of 1996 was $9.4 million, an increase
of $3.8 million or 66.5% from $5.6 million during the second quarter of 1995.
Interest expense for the second quarter of 1996 and 1995 was $4.2 million and
$0.1 million, respectively. The increase in interest expense resulted
principally from the increase in the Company's outstanding long-term debt
which is primarily related to the Company's acquisition strategy and, to a
lesser extent, the Company's June 1996 sale of its 10 1/8% Senior
Subordinated Notes and 5.5% Liquid Yield Option Notes.
Net income for the second quarter of 1996 was $3.8 million, compared to net
income of $3.5 million reported by the Company for the second quarter of
1995. The 1996 period includes $2.6 million of income tax expense while the
1995 period includes $2.4 million of income tax expense.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
CASH FLOWS
Cash flows provided by operating activities, inclusive of working capital,
were $2.8 million and $8.0 million for the six months ended June 30, 1996 and
1995, respectively. Cash flows provided by operating activities for the
first six months of 1996 resulted primarily from the add-back of $5.6 million
of depreciation and amortization together with the add-back of $1.0 million
for the extraordinary loss net of ($2.5) million from the gain on sale of
radio stations together with the ($6.8) million net change in working capital
to net income of $4.7 million for the period. The additional $0.8 million
resulted principally from the add back of $0.6 million for the provision for
losses on accounts receivable and $0.3 million of non-cash interest. Cash
flows provided by operating activities for the comparable 1995 period
resulted primarily from the add-back of $4.3 million of depreciation and
amortization together with the net change in working capital of ($1.0)
million to net income of $4.3 million for the period. The additional $0.4
million resulted primarily from the net of the add back of $0.6 million for
the provision for losses on accounts receivable and the $0.3 million deferred
income tax benefit.
Cash flows used by investing activities were ($162.5) million and ($22.5)
million for the six months ended June 30, 1996 and 1995, respectively.
Investing activities include capital expenditures of $5.1 million and $2.0
million for the first six months of 1996 and 1995, respectively. Investing
activities during the first six months of 1996 include expenditures of $66.4
million, $52.8 million, $42.2 million and $2.6 million, respectively, for
acquisitions, the purchase of the Noble warrant, loans made to Noble and in
connection with the Company's JSAs and other. Additionally, investing
activities for the 1996 period is net of $6.6 million of proceeds from the
sale of radio stations WMYU-FM and WWST-FM in Knoxville. Investing
activities during the first six months of 1995 include expenditures of $17.2
million and $3.6 million, respectively for acquisitions and loans made in
connection with the Company's JSAs.
Cash flows from financing activities were $471.8 million and ($7.3) million
for the six months ended June 30, 1996 and 1995, respectively. Cash flows
provided by financing activities during the first six months of 1996 resulted
primarily from the $418.2 million of proceeds from the issuance of public
debt, Liquid Yield Option Notes and borrowings under the Existing Credit
Facility, together with $317.1 million in proceeds received from the issuance
of common stock net of the $248.5 million repayment of long-term debt and
$13.5 million of paid debt related finance costs. Cash flows used from
financing activities during the comparable 1995 six-month period resulted
primarily from the repurchase of the Company's common stock ($11.2 million)
net of the borrowings under the Company's credit agreement ($4.0 million).
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Number Description Page
4 First Amendment dated as of June 18, 1996
to Credit Agreement dated as of June 12,
1996 by and among JCAC, Inc., the Lenders
named therein, Chemical Bank, as
Administrative Agent, Banque Paribas, as
Documentation Agent, and Bank of America
Illinois, as Syndication Agent 21
11 Statement re computation of consolidated
income (loss) per common share 33
27 Financial Data Schedule 34
99.1 Press Release dated August 2, 1996 35
99.2 Press Release dated August 13, 1996 36
(b) Reports on Form 8-K
NONE
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant and Co-Registrant has each duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
JACOR COMMUNICATIONS, INC.
(Registrant)
and
JCAC, Inc.
(Co-Registrant)
DATED: August 14, 1996 BY /s/ R. Christopher Weber
R. Christopher Weber,
Senior Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial and
Accounting Officer of Registrant
and Co-Registrant)
EXHIBIT 4
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
entered into as of June 18, 1996 among JCAC, Inc., a Florida corporation (the
"Company"), Chemical Bank , as Administrative Agent, Banque Paribas, as
Documentation Agent, Bank of America Illinois, as Syndication Agent (Chemical
Bank, Banque Paribas and Bank of America Illinois in such capacities are
hereinafter referred to as the "Agents"), and the Lenders (as defined in the
Credit Agreement).
R E C I T A L S:
WHEREAS, the Company, the Agents, and the Lenders are parties to
that certain Credit Agreement dated as of June 12, 1996 (the "Credit Agree
ment"; capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Credit Agreement as amended
hereby);
WHEREAS, the Company has requested that the Lenders and the Agents
amend certain provisions of the Credit Agreement as more fully described
herein; and
WHEREAS, the Lenders and the Agents have agreed to amend such
provisions upon the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendments. Immediately upon the satisfaction of each of
the conditions precedent set forth in Section 2 of this Amendment, the Credit
Agreement is amended as follows:
1.1 Amendment to Section 4.1(p) of the Credit Agreement. Section
4.1(p) of the Credit Agreement is hereby amended by deleting the last
sentence thereof and substituting therefor the sentence below as follows:
All (i) orders, approvals, and consents of the FCC required in
connection with the consummation of the Citicasters Transactions shall have
been obtained or granted, whether or not any appeal or request for recon
sideration of such order is pending, or whether the time for filing any
such appeal or request for reconsideration or for any sua sponte action
by the FCC has expired and (ii) consents, approvals, orders,
authorizations, licenses,
certificates and permits from all federal, state and local regulatory or
governmental bodies and authorities (other than the FCC) required in connec
tion with consummation of the Citicasters Transactions shall have been
obtained (including, without limitation, all HSR Approvals), and all of the
foregoing shall be in full force and effect and copies thereof shall have
been delivered to the Administrative Agent.
1.2 Amendment to Section 4.2(f) of the Credit Agreement. Section
4.2(f) of the Credit Agreement is hereby amended by deleting the second
sentence thereof and substituting therefor the sentence below as follows:
Notwithstanding the foregoing, the Company shall be permitted to deliver
to the Administrative Agent and the Lenders copies of FCC orders which are
not final and are subject to reconsideration by the FCC or appeal to a
court
with respect to (i) the Citicasters Transactions or (ii) any aforementioned
Acquisition (other than the Citicasters Transactions) if and only if (A)
the
Company or its Subsidiaries (if applicable) shall have negotiated an unwind
agreement with respect to the business and assets (or related voting securi
ties) subject to such Acquisition which provides for the reconveyance for
full value to the seller of all such business and assets (or related voting
securities) in the event a final FCC order is not reasonably attainable
with
respect to such business and assets (or related voting securities) and (B)
such business and assets (or related voting securities) subject to such
Acquisition shall be subject to an escrow agreement whereby such
business and
assets (or related voting securities) are maintained in escrow arrangements
until the receipt of an FCC final order with respect thereto, provided
solely
with respect to the creation or maintenance of such escrow arrangements,
the
Required Lenders may expressly agree that such escrow arrangements are not
required; provided further that such escrow arrangements shall only be
required with respect to Acquisitions to the extent the amount of Acquisi
tions with respect to which the Company and/or its Subsidiaries have
entered
into purchase agreements but have not yet consummated or have not yet re
ceived Final Orders, and with respect to which proceeds of any Loans are to
be used or have been used to pay all or a portion of the purchase price,
exceeds $15,000,000 individually for any one Acquisition or $20,000,000 in
the aggregate at any one time outstanding.
SECTION 2. Conditions to Effectiveness of Amendment. The effectiveness
of this Amendment is subject to the satisfaction of the following conditions
precedent:
2.1 Documents.
(a) Amendment. The Company shall have duly executed and
delivered this Amendment.
(b) Guaranty Amendment. The Parent shall have executed and
delivered a Reaffirmation with respect to the Parent Guaranty in the form of
Exhibit A hereto (the "Reaffirmation").
2.2 Consents, Licenses, Approval, etc. All consents, licenses and
approvals, if any, required in connection with the execution, delivery and
performance by the Company and the Parent of this Amendment and the Reaffirma
tion (collectively, the "Documents"), or the validity or enforceability here
of or thereof, or in connection with any of the transactions effected
pursuant hereto or thereto, shall have been obtained by the Company and the
Parent and be in full force and effect.
2.3 No Injunction. No law or regulation shall have
been adopted, no order, judgment or decree of any governmental authority
shall have been issued, and no litigation shall be pending or threatened,
which in the reasonable judgment of the Administrative Agent would enjoin,
prohibit or restrain, or impose or result in the imposition of any material
adverse condition upon, the execution, delivery or performance by the Company
of the Documents or the consummation of the transactions effected pursuant to
the terms of the Documents and the other Loan Documents (as amended hereby).
2.4 Additional Matters. The Administrative Agent
shall have received such other certificates, opinions, documents and instru
ments relating to this Amendment, the Obligations or the transactions
contemplated hereby as may have been reasonably requested by the Administra
tive Agent, and all corporate and other proceedings and all other documents
(including, without limitation, all documents referred to herein and not
appearing herein and exhibits hereto) and all legal matters in connection
with the transactions contemplated hereby shall be reasonably satisfactory in
form and substance to the Administrative Agent.
SECTION 3. Representations and Warranties. In order to induce the
Agents and the Lenders to enter into this Amendment, the Company represents
and warrants to each Agent and each Lender, upon the effectiveness of this
Amendment, which representations and warranties shall survive the execution
and delivery of this Amendment, that:
3.1 Due Incorporation; etc. Each of the Company and the Parent
is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
3.2 No Default; etc. No Default or Unmatured Default has
occurred and
is continuing after giving effect to this Amendment or would result from the
execution or delivery of this Amendment or the Reaffirmation or the con
summation of the transactions contemplated hereby or thereby.
3.3 Corporate Power and Authority; Authorization. Each of the
Company and the Parent has the corporate power and authority to execute,
deliver and
carry out the terms and provisions of the Documents to which it is a party
and the execution and delivery by each of the Company and the Parent of the
Documents to which it is a party and the performance by each of the Company
and the Parent of its obligations hereunder and thereunder have been duly
authorized by all requisite corporate action by the Company and the Parent.
3.4 Execution and Delivery. The Company and the Parent have
duly executed and delivered each Document to which it is a party.
3.5 Enforceability. Each Document, the Credit
Agreement, as amended by this Amendment, and each other Loan Document consti
tute the legal, valid and binding obligation of the Company and the Parent
party thereto, as the case may be, enforceable against such Person in accor
dance with its respective terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' right generally, and by general principles of
equity.
3.6 No Conflicts; etc. Neither the execution, delivery or
performance
by the Company or the Parent of the Documents to which it is a party, nor
compliance by any of them with the terms and provisions hereof and thereof,
(i) will contravene any applicable provision of any law, statute, rule,
regulation, order, writ, injunction or decree of any court or governmental
instrumentality or (ii) will conflict or be inconsistent with, or result in
any breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any property or assets
owned by it pursuant to the terms of, any indenture, mortgage, deed of trust,
agreement or other instrument to which it is a party or by which it or any of
its property or assets is bound or to which it may be subject, or (iii) will
violate any provision of its certificate of incorporation or by-laws.
3.7 Consents; etc. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration
with, or
exemption by, any governmental or public body or authority, or any subdivi
sion thereof, is required to authorize, or is required in connection with the
execution, delivery and performance of the Documents or the consummation of
any of the transactions contemplated hereby or thereby.
3.8 Representations and Warranties. All of the representations
and
warranties contained in the Credit Agreement and in the other Loan Documents
(other than those which speak expressly only as of a different date) and in
the Documents are true and correct as of the date hereof after giving effect
to this Amendment and the other Documents and the transactions contemplated
hereby and thereby.
3.9 FCC Oppositions. As of the date hereof, there have been no
petitions to deny filed with the FCC with respect to any application for FCC
approval necessary for the consummation of the Citicasters Transactions. As
of June 12, 1996, there have been no informal objections or other oppositions
filed with the FCC with respect to any application for FCC approval necessary
for the consummation of the Citicasters Transactions. From June 12, 1996 to
the date hereof, to the knowledge of the Company after review of FCC files
and conferences with principal FCC staff who are in a position to have knowl
edge on the Citicasters Transactions, there have been no informal objections
or other oppositions filed with the FCC with respect to any application for
FCC approval necessary for the consummation of the Citicasters Transactions.
SECTION 4. Miscellaneous.
4.1 Effect; Ratification. The amendments set forth herein are
effective solely for the purposes set forth herein and shall be limited
precisely as written, and shall not be deemed to (i) be a consent to any
amendment, waiver or modification of any other term or condition of the
Credit Agreement or of any other Loan Document or (ii) prejudice any right or
rights that the Agent or the Lenders may now have or may have in the future
under or in connection with the Credit Agreement or any other Loan Document.
Each reference in the Credit Agreement to "this Agreement", "herein", "here
of" and words of like import and each reference in the other Loan Documents
to the "Credit Agreement" shall mean the Credit Agreement as amended hereby.
This Amendment shall be construed in connection with and as part of the
Credit Agreement and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Credit Agreement and each other
Loan Document, except as herein amended, are hereby ratified and confirmed
and shall remain in full force and effect.
4.2 Effectiveness. This Amendment shall immediately become
effective
as of the date first written above upon (i) the receipt by the Administrative
Agent of duly executed counterparts of this Amendment from the Company, each
Agent and the Required Lenders and (ii) the satisfaction of each condition
precedent contained in Section 2 hereof (the "Effective Date").
4.3 Loan Documents. This Amendment and the Reaffirmation are
Loan Documents executed pursuant to the Credit Agreement and shall (unless
otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
4.4 Costs, Fees and Expenses. The Company agrees to pay all
costs, fees and expenses in connection with the Documents as required
pursuant to the Credit Agreement.
4.5 Counterparts. This Amendment may be executed in any number
of counterparts, each such counterpart constituting an original but all together
one and the same instrument.
4.6 Severability. Any provision contained in this Amendment
that is held to be inoperative, unenforceable or invalid in any jurisdiction
shall,
as to that jurisdiction, be inoperative, unenforceable or invalid without
affecting the remaining provisions of this Amendment in that jurisdiction or
the operation, enforceability or validity of that provision in any other
jurisdiction.
4.7 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
JCAC, INC., a Florida corporation
By: /s/ R. Christopher Weber
Title: Senior Vice President
By: /s/ Jon M. Berry
Title: Senior Vice President
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Facsimile: (513) 621-6087
Attention: R. Christopher Weber
CHEMICAL BANK, Individually and
as Administrative Agent
By: /s/ C.C. Wardell
Title: Managing Director
By: /s/ C.C. Wardell
Title: Managing Director
Chemical Bank
Administrative Agent
270 Park Avenue
New York, New York 10017
BANQUE PARIBAS, Individually and
as Documentation Agent
By: /s/ S.M. Heinen
Title: Vice President
By: /s/ Gerald E. O'Keefe
Title: Vice President
227 West Monroe Street
Suite 3300
Chicago, Illinois 60606
Facsimile: (312) 853-6020
Attention: Steve Heinen
Mark Radzik
Banque Paribas, Media Group
Equitable Tower
787 7th Floor
32nd Floor
New York, New York 10019
Facsimile: (212) 841-2369
Attention: Eileen Burke
Salo Aizenberg
BANK OF AMERICA ILLINOIS,
Individually and as
Syndication Agent
By: /s/ Kevin P. Morrison
Title: Vice President
231 South LaSalle Street
14th Floor
Chicago, Illinois 60697
Facsimile: (312) 974-8014
Attention: Mary Rose Gage
ABN AMRO BANK N.V.
By: /s/ James J. Johnston
Title: Vice President
By: /s/ Mary L. Janovksky
Title: Vice President
135 South LaSalle Street, Suite 425
Chicago, Illinois 60674-9135
Facsimile: (312) 606-8425
Attention: Joanna Riopelle and
James Johnston
THE BANK OF NEW YORK
By: /s/ Brenda Nedzi
Title: Vice President
One Wall Street, 16th Floor
New York, New York 10286
Facsimile: (212) 635-8593
Attention: Brendan Nedzi
THE BANK OF NOVA SCOTIA
By: /s/ Margo C. Bright
Title:
One Liberty Plaza
New York, New York 10006
Facsimile: (212) 225-5091
Attention: Margot C. Bright
CAISSE NATIONALE DE CREDIT AGRICOLE
By: /s/ Dean Balice
Title: Senior Vice President
55 East Monroe Street
Chicago, Illinois 60603-5702
Facsimile: (312) 372-2830
Attention: Leslie McMillan
C.I.B.C., INC.
By: /s/ P.C. Smith
Title: Authorized Signor
425 Lexington Avenue
New York, New York 10017
Facsimile: (212) 856-3558
Attention: Peter Smith
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Stephen C. Levi
Title: Vice President
1301 Avenue of the Americas
New York, New York 10019
Facsimile: (212) 261-3318
Attention: Stephen Levi
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By: /s/ William E. Lambert
Title: Assistant Vice President
By: /s/ Jane A. Majeski
Title: Vice President
75 Wall Street, 29th Floor
New York, New York 10005-2889
Facsimile: (212) 429-2129
Attention: Jane Majeski
FIRST BANK NATIONAL ASSOCIATION
By: /s/ John E. Besse
Title: Senior Vice President
First Bank Place
601 Second Avenue South
Minneapolis, Minnesota 55402
Facsimile: (612) 973-0824
Attention: Robert Miller, MPFP0905
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Robert Milordi
Title: Managing Director
100 Federal Street
Boston, Massachusetts 02110
Facsimile: (617) 434-3401
Attention: Rob Milordi
ING CAPITAL ADVISORS, INC.
By: /s/ Michael P. McAdams
Title: Managing Director
333 South Grand Avenue, Suite 400
Los Angeles, California 90071
Facsimile: (213) 626-6552
Attention: Mike Hatley
MELLON BANK, N.A.
By: /s/ Lisa Pellow
Title: First Vice President
One Mellon Bank Center, Room 4440
Pittsburgh, Pennsylvania 15258
Facsimile: (412) 234-6375
Attention: Lisa Pellow
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By: /s/ Anthony R. Clemente
Title: Authorized Signor
800 Scudders Mills Road
Plainsboro, New Jersey 08536
Facsimile: (609) 282-2756
Attention: Anthony R. Clemente
MORGAN GUARANTY TRUST COMPANY
By: /s/ Sandra Kurek
Title: Associate
60 Wall Street, 22nd Floor
New York, New York 10260-0060
Facsimile: (212) 648-5018
Attention: Sandra Kurek
NATIONSBANK OF TEXAS, N.A.
By: /s/ Greg Meador
Title: Vice President
901 Main Street, 64th Floor
Dallas, Texas 75202
Facsimile: (214) 508-9390
Attention: Greg Meador
PILGRIM AMERICA PRIME RATE TRUST
By: /s/ Howard Tiffen
Title: Vice President
40 North Central Avenue, Suite 1200
Phoenix, Arizona 85004-4424
Facsimile: (602) 417-8327
Attention: Howard Tiffen
PRIME INCOME TRUST
By: /s/ Rafael Scolari
Title:
Dean Witter Intercapital
c/o Prime Income Trust
Two World Trade Center
New York, New York 10048
Facsimile: (212) 392-5345
Attention: Rafael Scolari
PROTECTIVE LIFE INSURANCE COMPANY
By: /s/ Mark Okada
Title: Principal
13455 Noel Road
2 Galleria Tower, Suite 1150
Dallas, Texas 75240
Facsimile: (214) 233-4343
Attention: Mark Okada
SOCIETY NATIONAL BANK
By: /s/ Michael Stark
Title: Assistant Vice President
127 Public Square, OH-01-27-0602
Cleveland, Ohio 44114-1306
Facsimile: (216) 689-4666
Attention: Michael Stark
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Kevin Sampson
Title: Assistant Vice President
445 South Figueroa Street, 7th Floor
Los Angeles, California 90071
Facsimile: (213) 236-5747
Attention: Kevin Sampson
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME
TRUST
By: /s/ Jeffrey W. Maillet
Title: Senior Vice President
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Facsimile: (708) 684-6741
Attention: Jeffrey Maillet
<TABLE>
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
EXHIBIT 11
Computation of Consolidated Income Per Common Share
for the three months and six months ended June 30, 1996 and 1995
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Income for primary and
fully diluted computation:
Income applicable to common shares
before extraordinary loss $3,761,098 $3,528,561 $5,602,653 $4,279,875
Extraordinary loss, net of
income tax credit (950,775)
Income applicable to common shares $3,761,098 $3,528,561 $4,651,878 $4,279,875
Primary (1)(2):
Weighted average common shares
and all other dilutive
securities:
Common stock 20,978,225 19,283,515 19,580,803 19,439,784
Stock purchase warrants 835,403 793,682
Stock options 1,084,190 742,204 984,738 721,220
Contingently issuable
common shares 300,000 300,000 300,000 300,000
22,362,415 21,161,122 20,865,541 21,254,686
Primary income per
common share:
Before extraordinary loss $0.17 $0.17 $0.27 $0.20
Net income $0.17 $0.17 $0.22 $0.20
NOTES:
1. Fully diluted earnings per share is not presented since it
approximates primary income per share.
2. The 5.5% Liquid Yield Option Notes were not assumed to be converted
for purpose of the fully diluted computation because they would be
antidilutive.
</TABLE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
JACOR RECEIVES ANTITRUST CLEARANCE TO PROCEED
WITH CITICASTERS TRANSACTION
CINCINNATI, August 2, 1996 -- JACOR COMMUNICATIONS, INC.
(NASDAQ:JCOR), announced today that it has reached an agreement
with the Antitrust Division of the Department of Justice allowing
Jacor to proceed with its previously announced acquisition of
Citicasters, Inc.
Pursuant to the agreement, Jacor will divest WKRQ, a Cincinnati
radio station which is one of the 19 radio and 2 television
stations to be acquired as a result of the acquisition. Jacor
has also agreed to provide the agency with notice of certain
future acquisitions in the Cincinnati market. It is anticipated
that the transaction will be consummated as soon as possible
following receipt of FCC approval, which Jacor expects to receive
shortly.
FOR ADDITIONAL INFORMATION CONTACT:
Randy Michaels
Chief Executive Officer
(513) 621-1300
EXHIBIT 99.2
FOR IMMEDIATE RELEASE
Contact: Chris Weber
513/621-1300
JACOR REPORTS CONTINUING IMPROVEMENTS
IN OPERATIONS
CINCINNATI, August 13, 1996 - JACOR Communications, Inc.
(NASDAQ: JCOR), owner and operator of radio stations in eight
U.S. markets, today reported a 55 percent increase in broadcast
cash flow during the six months ended June 30, 1996, and a 56
percent increase in broadcast cash flow for the second quarter of
1996.
Jacor's broadcast cash flow for the 1996 six-month period
rose 55 percent to $19.8 million from $12.8 million in the same
six-month period of 1995. Second quarter broadcast cash flow
rose 56 percent to $13.6 million in 1996 from $8.7 million in the
same quarter of 1995. Net revenue for the six-month period rose
33 percent to $73.2 million from $54.9 million in the 1995
period. Second quarter 1996 net revenue rose 40 percent to $43.1
million from $30.9 million in the 1995 period.
On a "same station" basis -- reflecting results from
stations operated in the first six months of both 1996 and 1995 -
- - Jacor's broadcast cash flow rose 31 percent to $16.9 million
for the first six months of 1996 from $12.8 million in the same
period last year. Broadcast cash flow on a "same station" basis
for the second quarter of 1996 rose 28 percent to $11.1 million
from $8.7 million for the second quarter of 1995.
--more--
Page 2
JACOR REPORTS CONTINUING IMPROVEMENTS IN OPERATIONS
The Company reported net income of $4.7 million or 22 cents
per share, during the first six months of 1996. Results for the
same period last year reflected net income of $4.3 million, or 20
cents per share. Net income for the second quarter of 1996 was
$3.8 million and $3.5 million, respectively, or 17 cents per
share for each quarter.
Jacor Communications, Inc., headquartered in Cincinnati, is
the nation's third largest radio group. The Company plans to
pursue growth through continued acquisitions of complementary
stations in its existing markets, and radio groups or individual
stations with significant presence in the top 25 markets.
# # #
<TABLE>
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the three months and six months ended June 30, 1996 and 1995
(UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Broadcast revenue $48,460,503 $34,692,538 $82,032,817 $61,533,031
Less agency commissions 5,340,541 3,826,238 8,838,819 6,650,548
Net revenue 43,119,962 30,866,300 73,193,998 54,882,483
Broadcast operating expenses 29,550,293 22,153,655 53,420,871 42,113,315
Broadcast cash flow (1) 13,569,669 8,712,645 19,773,127 12,769,168
Depreciation and amortization 2,914,448 2,228,136 5,435,468 4,340,107
Corporate general and
administrative expenses 1,283,323 856,503 2,421,883 1,740,529
Operating income 9,371,898 5,628,006 11,915,776 6,688,532
Interest expense (4,343,360) (104,384) (6,553,302) (209,206)
Gain on sale of radio stations 2,539,407
Other income, net 1,313,560 397,939 1,540,772 707,549
Income before income taxes
and extraordinary loss 6,342,098 5,921,561 9,442,653 7,186,875
Income tax expense (2,581,000) (2,393,000) (3,840,000) (2,907,000)
Income before
extraordinary loss 3,761,098 3,528,561 5,602,653 4,279,875
Extraordinary loss, net
of income tax credit (950,775)
Net income $ 3,761,098 $ 3,528,561 $ 4,651,878 $4,279,875
Net income per common share:
Before extraordinary loss $ 0.17 $ 0.17 $ 0.27 $ 0.20
Extraordinary loss (0.05)
Net income per
common share $ 0.17 $ 0.17 $ 0.22 $ 0.20
Number of common shares used
in per share computations 22,362,415 21,161,122 20,865,541 21,254,686
(1) Operating income before depreciation and amortization and
corporate general and administrative expenses.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 319,529
<SECURITIES> 0
<RECEIVABLES> 36,541
<ALLOWANCES> 1,950
<INVENTORY> 0
<CURRENT-ASSETS> 365,555
<PP&E> 50,030
<DEPRECIATION> 9,433
<TOTAL-ASSETS> 708,279
<CURRENT-LIABILITIES> 22,140
<BONDS> 215,506
<COMMON> 3,124
0
0
<OTHER-SE> 452,636
<TOTAL-LIABILITY-AND-EQUITY> 708,279
<SALES> 0
<TOTAL-REVENUES> 82,033
<CGS> 0
<TOTAL-COSTS> 62,260
<OTHER-EXPENSES> 7,857
<LOSS-PROVISION> 607
<INTEREST-EXPENSE> 6,553
<INCOME-PRETAX> 9,443
<INCOME-TAX> 3,840
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (951)
<CHANGES> 0
<NET-INCOME> 4,652
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
