SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 3, 1996
Osborn Communications Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-16841 06-1142367
(Commission File Number) (IRS Employer Identification No.)
130 Mason Street, Greenwich, Connecticut 06830
(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code: (203) 629-0905
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On December 3, 1996, the Company sold substantially all
the assets of radio stations KNAX-FM/KRBT-FM, Fresno,
California to American Radio Systems Corporation for $11.0
million, resulting in a pre-tax gain of approximately $3.3
million. The net proceeds were used to repay a portion of
the Company's long-term debt.
Item 5. Other Events
On December 17, 1996, a Special Meeting of the
Stockholders of Osborn Communications Corporation was held
for the purpose of voting on a proposal to (i) approve and
adopt an Agreement and Plan of Merger, dated as of July 23,
1996 among the Company and a subsidiary (the "Subsidiary")
of Capstar Broadcasting Partners, Inc. ("Capstar"), and the
transactions contemplated thereby, and (ii) approve the
merger of the Subsidiary with and into the Company, pursuant
to which the Subsidiary will cease to exist and the Company
will survive as a wholly-owned subsidiary of Capstar, and
the holders of the Company's outstanding common stock will
become entitled to receive $15.375 in cash, without any
interest thereon, for each share of common stock. The
Company's shareholders voted to approve the proposal.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
(1) Pro Forma Condensed Consolidated Balance Sheet
(Unaudited) as of September 30, 1996
(2) Pro Forma Condensed Consolidated Statement of
Operations (Unaudited) for the nine months ended
September 30, 1996
(3) Pro Forma Condensed Consolidated Statement of
Operations (Unaudited) for the year ended December
31, 1995
(4) Notes to Unaudited Condensed Consolidated Pro
Forma Financial Statements
(c) Exhibits.
The Asset Purchase Agreement between American Radio
Systems Corporation and Breadbasket Broadcasting Corporation
dated as of July 12, 1996, previously filed as Exhibit 10.5
to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996 is incorporated herein by
reference.
<PAGE>
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 hereunto duly
authorized.
OSBORN COMMUNICATIONS CORPORATION
(Registrant)
Date: December 17, 1996 /s/ Thomas S. Douglas
(Signature)
Thomas S. Douglas
Senior Vice President and Treasurer
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On December 3, 1996, the Company sold substantially all the
assets of radio stations KNAX-FM/KRBT-FM, Fresno, California
to American Radio Systems Corporation for $11.0 million,
resulting in a pre-tax gain of approximately $3.3 million
(the "Fresno Disposition"). On May 3, 1996, the Company
acquired substantially all the assets of radio stations KNAX-
FM/KRBT-FM for $6.0 million plus 120,000 shares of the
Company"s common stock.
The Company acquired or disposed of the assets of numerous
other broadcasting properties in 1996 and 1995.
Collectively, and hereinafter defined, the Daytona Beach
Disposition, the Atlantic City Disposition, the Raleigh
Disposition, the Port Charlotte Acquisition, the Wheeling
Acquisitions, the Syracuse Disposition, the Jacksonville
Disposition, and the Anniston Option are the "Other
Transactions".
On June 28, 1996, the Company sold substantially all the
assets of radio station WFKS-FM, Daytona Beach/Palatka,
Florida for $4.0 million (the "Daytona Beach Disposition").
On June 21, 1996, the Company sold substantially all the
assets of radio station WAYV-FM, Atlantic City, New Jersey
for $3.1 million (the "Atlantic City Disposition").
On June 5, 1996, the Company sold substantially all the
assets of radio station WFXK-FM, Raleigh/Tarboro, North
Carolina for $5.9 million (the "Raleigh Disposition").
On April 1, 1996, the Company acquired substantially all the
assets of radio stations WKII-AM/WFSN-FM, Port Charlotte,
Florida for $2.85 million (the "Port Charlotte
Acquisition"). In the event that the Company is able to
relocate WFSN-FM's broadcast antenna to the Company's Pine
Island, Florida tower in order to better serve the Port
Charlotte/Ft. Myers market, additional consideration of
$750,000 will be paid.
On March 29, 1996, the Company acquired substantially all
the assets of radio station WRIR-FM, Wheeling, West Virginia
for $0.8 million plus transaction costs. On June 11, 1996,
the Company acquired substantially all the assets of radio
stations WBBD-AM/WKWK-FM, Wheeling, West Virginia for $2.7
million plus transaction costs. Collectively, the
acquisitions of WRIR-FM, WBBD-AM and WKWK-FM are the
"Wheeling Acquisitions".
On February 2, 1996, the Company sold substantially all the
assets of radio stations WNTQ-FM/WNDR-AM, Syracuse, New York
for $12.5 million (the "Syracuse Disposition").
On January 31, 1996, the Company sold substantially all the
assets of radio station WWRD-FM, Jacksonville,
Florida/Brunswick, Georgia for $2.5 million (the
"Jacksonville Disposition").
On December 21, 1995, the Company entered into an option
agreement and an associated Local Marketing Agreement with
Allbritton Communications Company ("Allbritton") for the
sale of television station WJSU-TV, Anniston, Alabama (the
"Anniston Option").
The net proceeds from the dispositions were used principally
to repay portions of long-term debt, fund transaction costs
and finance the Port Charlotte and Wheeling Acquisitions.
In August 1995, the Company entered into a credit facility
of $56.0 million with Society National Bank (the "Credit
Facility"). The Credit Facility consists of a $46.0 million
revolving credit facility and a $10.0 million facility which
may be used for acquisitions. The initial drawdown of $44.5
million, along with the Company's internally generated
funds, was used to repay existing loans totalling $50.0
million and pay transaction costs.
In the second quarter of 1996, the Company recorded a charge
of $1.2 million relating to the restructuring of the
operations of Osborn Healthcare (see Note 5 to the
consolidated financial statements at September 30, 1996,
which is incorporated herein by reference) (the "Osborn
Healthcare Restructuring").
The accompanying pro forma condensed consolidated balance
sheet at September 30, 1996 assumes that the Fresno
Disposition was made as of September 30, 1996. The
accompanying pro forma condensed consolidated statement of
operations for the year ended December 31, 1995 assumes that
the Fresno, Syracuse, Jacksonville, Raleigh, Atlantic City,
Daytona Beach Dispositions and Anniston Option, and Society
National Bank refinancing occurred as of January 1, 1995.
The accompanying pro forma condensed consolidated statement
of operations for the nine months ended September 30, 1996
assumes that the Fresno, Syracuse, Jacksonville, Raleigh,
Atlantic City and Daytona Beach Dispositions were made as of
January 1, 1996. The pretax gains resulting from the
dispositions and the Osborn Healthcare Restructuring charge
are not reflected in the accompanying pro forma condensed
consolidated statements of operations due to their
nonrecurring nature.
In management's opinion, the accompanying pro forma
condensed consolidated financial information is not
necessarily indicative of either future results of
operations or the results that might have occurred if the
foregoing transactions had been consummated on the indicated
dates.
<PAGE>
OSBORN COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1996
<TABLE>
<S> <C> <C> <C> <C>
Fresno Pro Forma
Historical Disposition Adjustments Pro Forma
ASSETS
Cash and cash equivalents $1,216,077 - $1,216,077
Other current assets 7,407,169 - 7,407,169
Total current assets 8,623,246 - 8,623,246
Investment in affiliated
company 528,644 - 528,644
Property, plant and 16,008,051 (2,463,719) 13,544,332
equipment, net
Intangible assets, net 36,398,379 (4,678,451) 31,719,928
Other noncurrent assets 165,814 - 165,814
Total assets $61,724,134 ($7,142,170) $54,581,964
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $6,667,635 - $6,667,635
Long-term debt 22,200,000 - (10,000,000) (a) 12,200,000
Deferred income taxes 2,275,711 - 2,275,711
Other noncurrent 1,325,262 - 1,325,262
liabilities
Total liabilities 32,468,608 - 22,468,608
Common stock 54,131 - 54,131
Additional paid-in capital 40,829,403 - 40,829,403
Accumulated deficit (11,628,008) (7,142,170) 10,000,000 (a) (8,770,178)
Total stockholders'equity 29,255,526 (7,142,170) 32,113,356
Total liabilities and
stockholders' equity $61,724,134 ($7,142,170) $54,581,964
</TABLE>
See accompanying Notes to Unaudited Pro Forma
Condensed Consolidated Financial Statements
<PAGE>
OSBORN COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the nine months ended September 30, 1996
<TABLE>
<S> <C> <C> <C> <C> <C>
Other
Fresno Other Proforma
Historical Disposition Transactions Adjustments Pro Forma
Net revenues $26,503,560 ($822,904) ($454,285) $25,226,371
Operating expenses
excluding depreciation,
amortization and
corporate expenses 20,785,816 (680,220) (264,209) 19,841,387
Depreciation and
amortization 3,673,052 (192,000) (455,038) 3,026,014
Corporate expenses 1,391,609 - - 1,391,609
Operating income 653,083 49,316 264,962 - 967,361
Other income (expense) (108,948) (55) 443,994 334,991
Gain on sale of station 8,859,477 - (10,059,477) 1,200,000 (e) -
Interest expense 1,713,239 - - (465,685)(b) 1,247,554
Income (loss) before
income taxes 7,690,373 49,261 (9,350,521) 1,665,685 54,798
Provision for income taxes 1,068,055 - - (768,055)(c) 300,000
Net income (loss) before
extraordinary items $6,622,318 $49,261 ($9,350,521) $2,433,740 ($245,202)
</TABLE>
See accompanying Notes to Unaudited Pro Forma
Condensed Consolidated Financial Statements
<PAGE>
OSBORN COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the nine months ended December 31, 1995
<TABLE>
<S> <C> <C> <C> <C> <C>
Other
Fresno Other Pro Forma 1995
Historical Disposition Transactions Adjustments Pro Forma
Net revenues $39,100,496 - ($7,397,138) $31,703,358
Operating expenses
excluding depreciation,
amortization and
corporate expenses 29,397,184 - (5,395,966) 24,001,218
Depreciation and
amortization 5,782,404 - (1,491,938) 4,290,466
Corporate expenses 1,705,850 - (3,516) 1,702,334
Operating income (loss) 2,215,058 - (505,718) 1,709,340
Other income (expense) 2,302,679 - (3,254) (1,942,731) (d) 356,694
Gain on sale of station 8,094,993 - (8,094,993) -
Interest expense 5,212,999 - (2,207) ($2,240,300) (b) 2,970,492
Income (loss) before income
taxes 7,399,731 - (8,601,758) 297,569 (904,458)
Provision for income taxes 775,982 - (68) (337,571) (c) 438,343
Net income (loss) before
extraordinary items $6,623,749 - ($8,601,690) $635,140 ($1,342,801)
</TABLE>
See accompanying Notes to Unaudited Pro Forma
Condensed Consolidated Financial Statements
<PAGE>
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements
(a) Represents repayment of long-term debt with the net proceeds
of the Fresno Disposition.
(b) Represents the reduction of interest expense resulting from
the Society National Bank Refinancing, and the repayment of
long-term debt with the proceeds from the Fresno, Syracuse,
Jacksonville, Raleigh, Atlantic City and Daytona Beach
Dispositions and Anniston Option, net of the increase in
interest expense resulting from the Wheeling and Port
Charlotte Acquisitions.
(c) Represents reduction of state and local income taxes
resulting from the dispositions.
(d) Represents the elimination of distributions received
from Northstar Television Group and Fairmont Communications
Corporation due to their nonrecurring nature.
(e) Represents the elimination of the Osborn Healthcare
Restructuring charge due to its nonrecurring nature.
