SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996 Commission file number 0-14702
Infinity Broadcasting Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-2766282
(State of incorporation) (I.R.S. Employer
Identification No.)
600 Madison Avenue
New York, New York 10022
(Address of principal executive offices)
(212)750-6400
(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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of May 9, 1996, 76,415,735
shares of Class A Common Stock, excluding 4,226,217 treasury shares, 8,319,045
shares of Class B Common Stock and 1,116,257 shares of Class C Common Stock were
outstanding.
<PAGE>
INFINITY BROADCASTING CORPORATION
INDEX
Page No.
-------
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets............... 1
Condensed Consolidated Statements of Earnings....... 3
Condensed Consolidated Statements of Stockholders'
Equity.............................................. 4
Condensed Consolidated Statements of
Cash Flows.......................................... 5
Notes to Condensed Consolidated Financial
Statements.......................................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K.......................... 10
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INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
ITEM 1. FINANCIAL STATEMENTS
- ------ --------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 31, Dec. 31,
1996 1995
----------- ----------
(Unaudited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 27,592 $ 20,340
Receivables, net 109,151 86,720
Prepaid expenses and other
current assets 10,947 1,305
----------- ----------
Total Current Assets 147,690 108,365
Property and equipment, net 26,701 20,561
Intangible assets, net 1,110,240 451,220
Other assets 19,663 14,310
----------- ----------
$1,304,294 $ 594,456
========== ==========
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
1
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<TABLE>
<CAPTION>
INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED
(Dollars in thousands)
March 31, Dec. 31,
1996 1995
--------- --------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
<S> <C> <C>
Accounts payable and other
accrued expenses $ 32,657 $ 18,392
Transit franchise fees payable 13,540 -
Accrued compensation 8,663 6,799
Accrued interest 5,732 7,131
Income taxes 7,488 4,866
Other current liabilities 37,795 15,892
---------- ---------
Total Current Liabilities 105,875 53,080
---------- ---------
Long-term debt 745,418 267,384
Deferred taxes 109,683 -
---------- ---------
Stockholders' equity:
Preferred stock, $0.01 par value:
1,000,000 shares authorized,
none issued - -
Class A Common Stock, $.002 par value:
200,000,000 shares authorized;
78,142,278 shares issued in
1995 and 80,587,633 shares in 1996 161 156
Class B Common Stock, $.002 par value:
17,500,000 shares authorized; issued
and outstanding 8,325,047 shares in
1995 and 8,319,045 shares in 1996 17 17
Class C Common Stock, $.002 par value:
30,000,000 shares authorized;
issued and outstanding
1,116,257 shares in 1995 and 1996 2 2
Additional paid-in capital 597,492 529,837
Retained earnings (194,672) (196,338)
----------- ---------
403,000 333,674
Less treasury stock at cost,
4,191,218 shares in 1995 and 1996 (59,682) (59,682)
----------- ---------
Total stockholders' equity 343,318 273,992
----------- ---------
$1,304,294 $594,456
=========== =========
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
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2
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INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands except per share amounts)
Three Months Ended
March 31, March 31,
1996 1995
------------ ------------
<S> <C> <C>
Total revenues $ 96,189 $ 72,031
Less agency commissions 12,141 9,704
------------ ------------
Net revenues 84,048 62,327
Operating expenses excluding
depreciation and amortization 53,453 37,326
Depreciation and amortization 16,200 11,572
Corporate general and
administrative expenses 2,254 1,244
------------ ------------
Operating income 12,141 12,185
Other income (expense)
Interest expense (10,564) (11,679)
Interest income 200 101
------------ ------------
Earnings before income taxes 1,777 607
Income taxes 111 102
------------ ------------
Net earnings $ 1,666 $ 505
============ ============
Net earnings per share $ .01 $ .00
------------- ------------
Average shares and equivalents 113,758,662 100,866,938
============= ============
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
3
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INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands)
Class A Class B Class C Add'l
Common Stock Common Stock Common Stock Paid-in Retained Treasury Stock
Shares Amt Shares Amt Shares Amt Capital Earnings Shares Amt Total
------ ---- ------ --- ------ --- -------- ---------- ------ --- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at Dec. 31, 78,142 $156 8,325 $17 1,116 $2 $529,837 $(196,338) 4,191 $(59,682) $273,992
1995
Net earnings for the
three months
ended March 31,
1996 1,666 1,666
Issuance of Class A
Common Stock 2,440 5 67,655 67,660
Conversion of
Class B Common
Stock to Class A
Common Stock 6 (6)
------ ---- ------ --- ----- --- -------- ---------- ----- -------- --------
Balance at March
31, 1996
(Unaudited) 80,588 $161 8,319 $17 1,116 $2 $597,492 $(194,672) 4,191 $(59,682) $343,318
====== ==== ====== === ===== === ======== ========== ===== ======== ========
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
4
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<TABLE>
<CAPTION>
INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
March 31, March 31,
1996 1995
---------- -----------
<S> <C> <C>
Net cash flow from operating activities:
Net earnings $ 1,666 $ 505
Depreciation and amortization 16,200 11,572
Amortization of deferred financing costs 537 507
---------- -----------
18,403 12,584
Decrease in receivables 11,579 15,670
Increase in other current assets (1,566) (515)
Decrease in accounts payable and accrued expenses (2,289) (4,677)
Decrease in accrued interest (1,399) (4,892)
Other, net (89) 36
---------- -----------
Net cash flow from operating activities 24,639 18,206
---------- -----------
Investing Activities:
Capital expenditures 772 358
Acquisitions:
Intangibles 564,353 -
Property and Equipment 6,552 -
Other assets 47,886
Less: Liabilities (57,496) -
---------- -----------
Net cash used for investing activities 562,067 358
---------- -----------
Cash provided (required) before financing
activities (537,428) 17,848
========== ==========
Financing Activities:
Borrowings under debt agreements 503,717 -
Reduction of debt (20,717) (12,000)
Reduction of debt - 10 3/8% sub debt (5,980)
Proceeds from issuance of stocks 67,660 317
Financing costs - (600)
Repurchase of Class A Common Stock - (3,663)
---------- ----------
Net financing activities 544,680 (15,946)
Increase in cash and cash
equivalents (7,252) (1,902)
---------- ----------
Total financing activities $ 537,428 $ (17,848)
========== ==========
<FN>
See accompanying Notes to Condensed Consolidated Financial Statements
</FN>
</TABLE>
5
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INFINITY BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
---------------------
In the opinion of management the unaudited interim financial
statements contain all adjustments, consisting of normal recurring accruals,
necessary to present fairly the financial position, results of operations and
cash flows for the periods presented.
Interim periods are not necessarily indicative of results to be
expected for the year. It is suggested that these financial statements be read
in conjunction with the consolidated financial statements and the notes thereto
of the Company for the year ended December 31, 1995.
The consolidated financial statements include the accounts of the
Company and its subsidiaries, which are all wholly owned. All significant
intercompany balances and transactions have been eliminated in consolidation.
Earnings per common share are based on the weighted average number of
common shares and common equivalent shares outstanding during the period.
On May 12, 1995, the Company declared a three-for-two stock split in
the form of a stock dividend payable on May 19, 1995 to shareholders of record
at the close of business on May 12, 1995. On March 19, 1996, the Company
declared a three-for-two stock split in the form of a stock dividend payable on
April 11, 1996 to shareholders of record at the close of business on March 28,
1996. The accompanying financial statements reflect the effect of the above
stock dividends.
2. Acquisitions
------------
In April 1995, the Company acquired Dallas/Ft. Worth radio station
KLUV-FM from TK Communications, Inc. for approximately $51 million, plus costs.
In January 16, 1996 the Company completed the acquisition of radio
stations KYNG-FM and KSNN-FM in Dallas, KFRC-FM, KFRC-AM and KYCY-FM in San
Francisco, WYCD-FM in Detroit and KYCW-FM in Seattle (the "Alliance Stations")
from various entities affiliated with Alliance Broadcasting, Inc. for
approximately $275 million, plus costs. On February 7, 1996, the Company entered
into an agreement to sell its Seattle radio station KYCW-FM for approximately
$26 million plus assumption of certain obligations.
In March 26, 1996, the Company completed the acquisition of all the
outstanding stock of TDI Worldwide, Inc., a leading seller of advertising space
on buses and transit systems, for approximately $300 million.
6
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The purchase price of the above acquisitions were funded by borrowings
under the Company's bank credit agreement (the "Credit Agreement") and issuance
of approximately 2.4 million shares of the Company's Class A Common Stock.
The operating results of these acquisitions are included in the
Company's consolidated results of operations from the date of acquisition. The
following unaudited pro forma summary presents the consolidated results of
operations as if the acquisitions had occurred as of the beginning of 1996 and
1995, after giving effect to certain adjustments, including amortization of
intangible assets and interest expense on the acquisition debt. These pro forma
results have been prepared for comparative purposes only and do not purport to
be indicative of what would have occurred had the acquisitions been made as of
those dates or of results which may occur in the future.
Three Months Ended March 31,
1996 1995
---- ----
(Unaudited)
Net revenues $ 131,835 $ 116,077
Net earnings (loss) (2,307) (13,130)
Net earnings (loss) per common
share (.02) (.13)
On March 4, 1996, the Company entered into an agreement to acquire 12
radio stations owned by various subsidiaries of Granum Holdings, L.P. for
approximately $410 million (the "Granum Acquisition"). The radio stations are
KRBV-FM, KHVN-AM and KOAI-FM in Dallas/Ft. Worth, WBOS-FM and WOAZ-FM in Boston,
WCAO-AM and WXYV-FM in Baltimore, WAOK-AM and WVEE-FM in Atlanta, WHOO-AM,
WHTQ-FM and WMMO-FM in Orlando. Upon completion of the Granum Acquisition, the
Company will be required to divest one FM station in Dallas in order to comply
with the recently enacted Telecommunications Act of 1996.
7
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
RESULTS OF OPERATIONS
- ---------------------
FIRST QUARTER OF 1996 COMPARED TO FIRST QUARTER OF 1995
- -------------------------------------------------------
Net revenues for the first quarter of 1996 were $84,048,000 as
compared to $62,327,000 for the first quarter of 1995, an increase of
approximately $21,721,000 or 35%. The increase was due principally to higher
advertising revenues at the Company's stations, the acquisitions of KLUV-FM
(Dallas/Ft. Worth) effective April 21, 1995, the Alliance Stations effective
January 16, 1996 and the acquisition of TDI Worldwide, Inc., effective March 26,
1996. On a pro forma basis, assuming all of the above acquisitions had occurred
as of the beginning of 1995, the Company's net revenues for the first quarter of
1996 would have increased by approximately 13%.
Operating expenses excluding depreciation and amortization for the
first quarter of 1996 were $53,453,000 as compared to $37,326,000 for the first
quarter of 1995, an increase of approximately $16,127,000 or 43%. The increase
was principally due to the acquisitions of KLUV-FM, the Alliance Stations and
TDI Worldwide, Inc., expenses associated with higher revenues and higher
programming expenses. On a pro forma basis, assuming the above acquisitions had
occurred as of the beginning of 1995, operating expenses excluding depreciation
and amortization for the first quarter of 1996 would have increased by
approximately 12%.
Depreciation and amortization expense for the first quarter of 1996
was $16,200,000 as compared to $11,572,000 for the first quarter of 1995, an
increase of approximately $4,628,000 or 40%. The increase was principally due to
the depreciation and amortization expense associated with the above
acquisitions.
Operating income for the first quarter of 1996 was $12,141,000 as
compared to $12,185,000 for the first quarter of 1995, a decrease of
approximately $44,000. The decrease was due to higher depreciation and
amortization expense associated with the above acquisitions.
Net financing expense (defined as interest expense less interest
income) for the first quarter of 1996 was $10,364,000 as compared to $11,578,000
for the first quarter of 1995, a decrease of approximately $1,214,000 or 10%.
The decrease was due principally to lower debt levels, in part as a result of
the proceeds of approximately $269,000,000 from a public offering of shares of
the Company's Class A Common Stock in 1995, offset by borrowings in connection
with the above acquisitions.
Net income for the first quarter of 1996 was $1,666,000 ($0.01 per
share) as compared to a net income of $505,000 ($0.00 per share) for the first
quarter of 1995, an increase of approximately $1,161,000 or 230%.
8
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LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
For the first quarter of 1996, net cash flow from operating activities
was approximately $24,600,000, as compared to $18,200,000 for the first quarter
of 1995, an increase of approximately $6,400,000. The increase was principally
due to improved earnings in 1996.
During the three months ended March 31, 1996, the Company paid down
approximately $27 million of long-term debt.
In January 1996, the Company completed the acquisition of the Alliance
Stations for approximately $275 million. In March 1996, the Company completed
the acquisition of all of the outstanding stock of TDI Worldwide, Inc. for
approximately $300 million. The purchase price of the above acquisitions were
funded by borrowings of approximately $505 million and through the issuance of
approximately 2.4 million newly issued shares of Class A Common Stock.
As of March 31, 1996, the Company had undrawn borrowing capacity of
approximately $132,000,000 under the Credit Agreement.
9
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ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
2(a) - Asset Purchase Agreement, dated as of September 12, 1994, by and
between TK Communications, Inc. and Infinity Broadcasting Corporation
of Dallas. (This exhibit can be found as Exhibit 2(f) to the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1994 (File No. 0-14702) and is incorporated herein by
reference.)
2(b) - Purchase Agreement, dated September 22, 1995, among each of the
entities identified in Schedule 1.0(a) thereto, Alliance
Broadcasting, L.P., each of the entities identified in Schedule
1.0(b) thereto, Infinity Broadcasting Corporation of Los Angeles and
the Company. (This exhibit can be found as Exhibit 2(a) to the
Company's Report on Form 8-K dated September 27, 1995 (File No.
0-14702) as is incorporated herein by reference.)
2(c) - Stock Purchase Agreement, dated as of February 22, 1996, by and
among the Company, William M. Apfelbaum, and each of the other
stockholders of TDI Worldwide, Inc. identified on Schedule 4.2
thereto. (This exhibit can be found as Exhibit 2(i) to the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 (File
No. 0-14702) as is incorporated herein by reference.)
2(d) - Stock Purchase Agreement, dated as of March 3, 1996, between the
Company and Granum Holdings L.P. (This exhibit can be found as
Exhibit 2(j) to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 (File No. 0-14702) as is incorporated herein
by reference.)
27 - Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter
ended March 31, 1996.
10
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SIGNATURES
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.
INFINITY BROADCASTING CORPORATION
(Registrant)
/S/ FARID SULEMAN
--------------------------------
Farid Suleman,
Vice President-Finance/
Chief Financial Officer
Dated: May 15, 1996
11
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 27592
<SECURITIES> 0
<RECEIVABLES> 111785
<ALLOWANCES> 2634
<INVENTORY> 0
<CURRENT-ASSETS> 147690
<PP&E> 42606
<DEPRECIATION> 15905
<TOTAL-ASSETS> 1304294
<CURRENT-LIABILITIES> 105875
<BONDS> 0
0
0
<COMMON> 180
<OTHER-SE> 343138
<TOTAL-LIABILITY-AND-EQUITY> 1304294
<SALES> 0
<TOTAL-REVENUES> 84048
<CGS> 0
<TOTAL-COSTS> 53453
<OTHER-EXPENSES> 18454
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10564
<INCOME-PRETAX> 1777
<INCOME-TAX> 111
<INCOME-CONTINUING> 1666
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<EXTRAORDINARY> 0
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<NET-INCOME> 1666
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</TABLE>
