UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-1
CURRENT REPORT
Pursuant To Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 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
<PAGE>
OSBORN COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the
following items, financial statements, exhibits or other
portions of its Current Report on Form 8-K dated May 10,
1996, as set forth in the pages attached hereto:
Item 2. Acquisition or Disposition of Assets.
On May 3, 1996, the Registrant acquired substantially
all the assets of radio stations KNAX-FM/KRBT-FM, Fresno,
California from EBE Broadcasting, L.P. Consideration
for the acquisition consisted of $6.0 million plus
120,000 shares of the Registrant's common stock. In
addition, the seller received an option to purchase
shares of the Registrant's common stock at $8.00 per
share contingent upon future increases in operating cash
flow by KNAX-FM/KRBT-FM. The cash portion of the
consideration was funded through borrowings under the
Registrant's senior debt facility. Pending the closing
of the acquisition, the stations were managed by the
Registrant since January 1996 pursuant to a local
marketing agreement.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired
(1) Combined Balance Sheet as of December 31, 1995*
(2) Combined Statement of Operations and Partners'
Capital for the year ended December 31, 1995*
(3) Combined Statement of Cash Flows for the year
ended December 31, 1995*
(4) Notes to Combined Financial Statements*
* Prior to the closing of the transaction, the
Registrant operated the radio stations pursuant to a
local marketing agreement since January 1, 1996 and
therefore, has not included financial statements of the
businesses acquired at March 31, 1996 and for the three
months then ended.
(b) Pro forma financial information
(1) Unaudited Pro Forma Condensed Consolidated
Balance Sheet as of March 31, 1996
(2) Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the year ended
December 31, 1995
(3) Unaudited Pro Forma Condensed Consolidated
Statement of Operations for the three months
ended March 31, 1996
(4) Notes to Unaudited Pro Forma Financial Statements
(c) Exhibits
(1) Asset Purchase Agreement dated December 31,
1995, between EBE Broadcasting, L.P. and
Breadbasket Broadcasting Corporation, previously
filed as Exhibit 10(pp)(i) to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1995
is incorporated herein by reference.
(2) Asset Purchase Agreement dated December 31,
1995, between EBE Communications Limited Partnership
and Breadbasket Broadcasting Corporation,
previously filed as Exhibit 10(pp)(ii) to the Registrant's
Annual Report on Form 10-K for the year ended December 31,
1995 is incorporated herein by reference.
Pursuant to the requirements of the Securities
Exchange Act of 1934 the registrant has duly caused this
amendment to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: July 15, 1996
OSBORN COMMUNICATIONS CORPORATION
(Registrant)
By /s/ Thomas S. Douglas
Thomas S. Douglas
Senior Vice President-Finance
<PAGE>
COMBINED FINANCIAL STATEMENTS
KNAX/KFRE and KRBT/FM
Year Ended December 31, 1995
<PAGE>
KNAX/KFRE and KRBT/FM
Table of Contents
Year Ended December 31, 1995
INDEPENDENT AUDITOR'S REPORT Front
FINANCIAL STATEMENTS
Combined Balance Sheet 1
Combined Statement of Operations 2
Combined Statement of Cash Flows 3
Notes to Combined Financial Statements 4
<PAGE>
RICHARD C. GATES
Certified Public Accountant
INDEPENDENT AUDITOR'S REPORT
To the Partners
KNAX/KFRE and KRBT/FM
West Palm Beach, Florida
I have audited the accompanying combined balance sheet of
KNAX/KFRE and KRBT/FM as of December 31, 1995 and the
related combined statements of operations, partners'
capital and cash flows for the year then ended. These
statements are the responsibility of management. My
responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan
and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. I believe that
my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above
present fairly, in all material respects, the financial
condition of KNAX/KFRE and KRBT/FM as of December 31, 1995
and the results of its operations and cash flows for the
year then ended in conformity with generally accepted
accounting principles.
By /s/ Richard C. Gates
Richard C. Gates
Certified Public Accountant
West Palm Beach, Florida
May 8, 1996
<PAGE>
KNAX/KFRE and KRBT-FM
COMBINED BALANCE SHEET
December 31, 1995
<TABLE>
<S> <C>
ASSETS
Current assets
Cash $32,898
Accounts receivable, less allowance for
doubtful accounts of $55,000 579,715
Current portion of note receivable - partner 28,572
Other current assets 68,599
Total current assets 709,784
Property and equipment 546,014
Other assets
Intangible assets 1,918,250
$3,174,048
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
Current portion of long-term debt $8,565,920
Accounts payable 423,827
Accounts payable - related parties 89,145
Total current liabilities 9,078,892
Long-term liabilities
Loans payable - related parties 4,409,259
Deferred interest 495,833
Deferred interest - related parties 3,549,831
Deferred management fees 739,039
Total long-term liabilities 9,193,962
Total Liabilities 18,272,854
Partners' capital (15,098,806)
$3,174,048
</TABLE>
See accompanying notes and accountant's report.
<PAGE>
KNAX/KFRE and KRBT-FM
COMBINED STATEMENT OF OPERATIONS AND PARTNERS' CAPITAL
Year Ended December 31, 1995
<TABLE>
<S> <C>
Operating income
Sales income $2,822,438
Trade income 504,088
Total income 3,326,526
Less agency commissions and representative fees 453,429
Net revenue 2,873,097
Operating expenses
Engineering 243,622
Programming 489,208
Selling 449,701
Advertising and promotion 125,846
General and administrative 565,166
Trade 504,088
Total operating expenses 2,377,631
Income from operations 495,466
Other income (expense)
Interest income 5,045
Other income 0
Interest expense (1,305,782)
Depreciation (100,552)
Amortization (297,711)
Home office (78,352)
Management fees (50,000)
Refinancing costs (217,318)
Total other income (expense) (2,044,670)
Net loss (1,549,204)
Partners' capital
Beginning of year (13,549,602)
End of year ($15,098,806)
</TABLE>
See accompanying notes and accountant's report.
<PAGE>
KNAX/KFRE and KRBT-FM
COMBINED STATEMENT OF CASH FLOWS
Year Ended December 31, 1995
<TABLE>
<S> <C>
Cash flows from operating activities
Net loss ($1,549,204)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 100,552
Amortization 297,711
Increase in deferred interest 750,618
Deferred management fees 50,001
Changes in operating assets and liabilities:
Accounts receivable 270,459
Other current assets 58,542
Accounts payable 301,012
Other accrued expenses (112,191)
Net cash provided by operating activities 167,500
Cash flows from investing activities
Acquisition of equipment (43,560)
Long-term note receivable 28,572
Net cash used by investing activities (14,988)
Cash flows from financing activities
Debt reduction - Bank (270,000)
Proceeds from advance by related parties 75,000
Net cash used by financing activities (195,000)
Net decrease in cash (42,488)
Cash at beginning of year 75,386
Cash at end of year $32,898
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash flow information
Cash paid during the year for interest: $555,164
</TABLE>
See accompanying notes and accountant's report.
<PAGE>
December 31, 1995
A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statements - The accompanying financial
statements include the operations of radio stations
KNAX/KFRE and KRBT/FM (collectively, the Stations or the
Company). All significant transactions between the
various entities have been eliminated.
Cash Equivalents - For the purpose of reporting cash
flows, cash includes amounts held in bank accounts.
Concentration of Risk - The Stations operate only within
the Fresno, CA geographic area. They extend credit to
their various customers in the form of accounts
receivable, many of whom are located in their trade area,
however, many are national accounts. The Stations perform
ongoing credit evaluations of its customers and maintains
allowances for doubtful accounts based on factors
surrounding the credit risk of specific customers,
historical trends, and other information. Credit losses,
when realized, have been within the range of expectations
and, historically, have not been significant.
Property and Equipment and Intangible Assets - Property
and equipment are stated at cost. Depreciation is computed
generally using the straight-line method over the
estimated useful life of the respective assets.
Expenditures for repairs are expensed while major renewals
are capitalized.
Intangible assets are amortized on a straight-line method
over the estimated useful lives of the assets ranging from
3 to 40 years. Management periodically evaluates the
recoverability of the net carrying value, generally by
using certain accepted industry measures of value
(principally, cash flow multiple methods).
Trades - The Stations exchange commercial airtime for
goods and services, as is customary in the broadcasting
industry. The revenue is recognized when the airtime is
run. The related trade expense is recognized when the
goods or services are used.
Income Taxes - No provision for federal or state income
taxes has been provided as the partners report their pro
rata share of partnership profits or losses on their
individual tax return.
B - OTHER CURRENT ASSETS
Other current assets consist of the following:
<TABLE>
<S> <C>
Prepaid expenses 65,899
Deposits 2,700
Total Other current assets 68,599
</TABLE>
C - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<S> <C>
Buildings and improvements $176,352
Studio equipment 783,893
Transmitter 487,290
Tower and antenna 448,703
Furniture and fixtures 240,962
Music library 394,057
2,531,257
Less accumulated depreciation 1,985,243
$546,014
</TABLE>
Depreciation expense for 1995 was $100,552.
D - DEBT
Debt consists of the following:
<TABLE>
<S> <C>
State Street Bank and Trust Company $7,688,420
KFRE Broadcasting, Inc. 475,000
Walter Lake - non-compete agreement 402,500
8,565,920
Less long term debt -
8,565,920
</TABLE>
State Street Bank and Trust Company (the "Bank") - This
loan was issued November 3, 1989 in connection with the
existing indebtedness, the acquisition of the North
Carolina stations, and the contribution of the California
stations. The loan is secured by all assets, interest
agreements, stock and items or contracts of value which
are not senior to this agreement, including a life
insurance policy on the life of Ralph Guild in the face
amount of $500,000.
Effective August 4, 1992, the Bank and the Partnership
amended their loan agreement. The principal of $8,084,000
is comprised of two loans as follows: (a) Facility One
Term Note for $5,575,000 (originally $8,290,000 but
reduced by payments of $2,715,000 during 1993) and (b)
Facility Two Term Note for $2,509,000. The Facility One
note bears interest at the prime rate plus 1% payable
monthly. The Facility Two note bears interest at 5%
payable at maturity.
On March 13, 1995, the Bank and the Partnership entered
into a Forbearance Agreement (the "Agreement") whereby the
Bank agreed to forbear, for a limited period of time, from
the exercise of its rights and remedies with respect to
the amended loan agreement. The Agreement was amended
December 28, 1995 with the understanding that the
Partnership would sign a definitive sale agreement of
KNAX/FM and KFRE/AM and submit the license assignment
applications to the Federal Communications Commission (the
"FCC"). See Note H Subsequent Events, regarding the sale
of the Stations.
KFRE Broadcasting, Inc. - This loan, originally issued
February 28, 1986 in connection with the asset purchase of
radio station KFRE-AM by Chester Associates, L.P., was
assumed by the Partnership in connection with the
contribution of the California stations on September 30,
1989. The obligation carries no stated interest rate,
therefore, interest has been imputed at the February, 1986
applicable federal rate of 8.77%. The face amount at
December 31, 1995 is $475,000. The original terms
required annual payments of $312,500 beginning in 1992
until the obligation matured. In 1992, the Partnership
reduced its annual payment to $137,500 and pays interest
quarterly on the unpaid difference. The entire balance was
due February, 1995.
Walter Lake - non-compete agreement - This obligation,
originally issued February 28, 1986 in connection with the
asset purchase of KFRE-AM by Chester Radio Associates,
L.P., was assumed by the Partnership pursuant to the
contribution of the California stations. The original
terms required payments of $12,500 monthly until the
agreement ends September 30, 1995. Beginning in 1992, the
Partnership reduced its monthly payments to $5,000 and
pays interest quarterly at prime plus 1% on the unpaid
difference. The entire balance was due March, 1995,
Total interest expense for 1995 $1,305,782.
E - PROFIT SHARING
The Partnership established a 401K plan effective February
1, 1988 which covers substantially all employees. The Plan
allows for employee contributed salary reduction deferrals
in addition to any company profit sharing contributions.
On January 1, 1990, employees of the Partnership formed
EBE Management, Inc. providing management, sales and
support services to the Stations. The stock of EBE
Management, Inc. is held for the benefit of the employees
through EBE Management, Inc. Employee Stock Ownership Plan
and Trust.
The existing 401K plan was merged in with the EBE
Management, Inc. plan during 1990.
F - RELATED PARTY TRANSACTIONS
Note Receivable - At December 31, 1995, a note
receivable was due from EBE Management, Inc. dated January
1, 1990. The original note was for $200,000 and was to be
paid in seven annual installments of $28,571, plus
interest of 8.75% on the unpaid principal commencing
December 31, 1990 through December 31, 1996. Payments are
to be applied first to interest and then to the reduction
of principal. The note was issued in exchange for four
units of limited partnership interest in EBE
Communications Limited Partnership.
Accruals Payable - Interep National Radio Sales, Inc.
(Interep), a company which owns and operates five national
radio representative firms and two unwired networks,
provides national radio representation services through
three of its subsidiaries. The chairman and chief
executive officer of Interep, Ralph Guild, is the sole
shareholder of Guild Radio Co., Inc., which is the general
partner of the Partnership. Amounts due Interep for
accrued representative commissions at December 31, 1995
was $25,954.
Guild Radio Co., Inc. provides management services to the
Stations. At December 31, 1995 deferred management fees
were $739,039
Debt - Notes payable to related parties consist of the
following:
<TABLE>
<S> <C>
Guild Radio Co., Inc. 3,409,259
Chester Radio Corporation 1,000,000
4,409,259
</TABLE>
Guild Radio Co., Inc. - The notes payable to this
company, which is wholly owned by Ralph Guild, were first
issued November 3, 1989 and represents working capital
advances made to various Stations. The note bears
interest at 9% per annum. Current payments of interest
and principal are being deferred pursuant to the State
Street bank loan agreement. The loan and deferred interest
is shown as long term in the accompanying balance sheet.
The note payable is subordinated to the State Street Bank
term loan obligation.
Chester Radio Corporation ("Chester") - The note issued
to Chester, which is also wholly owned by Ralph Guild, was
issued in connection with the asset purchase of KNAX/FM
and assumed by the Partnership pursuant to the
contribution of the California stations. The note bears
interest at 9% compounded per annum. The note has a
payment schedule, however, to induce State Street Bank to
enter into the revolving credit and term loan previously
discussed, Chester has agreed to defer current payments.
Principal and interest payments are shown as long term in
the accompanying balance sheet. The note is subordinated
to the State Street Bank loans.
Accrued interest to related parties consists of the
following:
<TABLE>
<S> <C>
Guild Radio Co., inc. $1,859,019
Chester Radio Corporation 1,040,689
Googe and Patella 650,123
$3,549,831
</TABLE>
Leases - The Stations lease land and structures related
to the broadcast towers under separate leases with Ralph
Guild. One lease provides for payments of $1,000 per month
through September, 1998 with an option to renew for an
additional five year period. The other lease is with
Meadow Lakes Tower Co. which is 100% owned by Ralph Guild.
The lease calls for monthly payments of $4,500 for the
period July 1, 1994 to June 30, 1997 and escalations every
two years thereafter through June 30, 2002.
The Stations lease office space from an entity owned by
Ralph Guild and five limited partners of the Partnership.
The lease requires monthly payments of $5,000 through
September, 2003.
The Stations lease technical equipment from a leasing
company owned by certain limited partners and employees of
Interep. The lease calls for monthly payments of $4,064
through March, 2003.
G - COMMITMENTS AND CONTINGENCIES
Leases - The Stations lease various administrative and
studio offices, transmitter sites and equipment under
noncancelable operating leases ranging from one to ten
years. Certain leases require the Stations to pay
additional amounts for property taxes, insurance,
maintenance and other expenses related to the leased
property. Many of the leases contain renewal options. In
most cases, management believes that, upon expiration in
the normal course of business, leases will be renewed or
replaced by other leases. The aggregate payments related
to these commitments during the next five years and
thereafter is as follows
<TABLE>
<S> <C>
1996 $177,273
1997 181,773
1998 183,273
1999 168,617
2000 166,966
Thereafter 339,953
$1,217,855
</TABLE>
Other - Pursuant to various agreements with managers and
consultants, the general partner, at his sole discretion,
reserves the right to distribute up to 20 percent of the
profits of the Stations after the return of all equity
contributed and the payment of priority returns as defined
in the Partnership agreement. These amounts are not
measurable or determinable at December 31, 1995;
therefore, no provision has been made in the accompanying
financial statements.
Litigation - In the normal course of business, the
Partnership is subject to certain suits and other matters.
Management believes that the eventual resolution of any
pending matters, either individually or in the aggregates,
will not have a material effect on the consolidated
financial position or the results of operations.
H - SUBSEQUENT EVENTS - SALE OF STATIONS
On November 29, 1995, the Company entered into an asset
purchase agreement with Pappas Broadcasting, Inc. for a
sale of the assets of KFRE-AM. The consideration is
$1,025,000 cash.
On December 31, 1995, the Company entered into an asset
purchase agreement with Breadbasket Communications, Inc.,
a subsidiary of Osborn Communications, Inc. for the sale
of the assets of KNAX-FM and KRBT-FM. The total
consideration is $6,000,000 cash and 120,000 shares of
common stock of Osborn Communications, Inc.
At December 31, 1995, all three sales are pending FCC
approval. The Company has entered into Time Brokerage
Agreements with the buyers which allow them to provide
overthe-air program services using the facilities of the
stations. The buyer pays for the use of the facilities
until the sale is consumated. The bank has agreed to this
arrangement as stated in the Amended Forbearance Agreement
(Note D) as they hold the assets of KNAX-FM and KFRE-AM as
collateral.
<PAGE>
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On May 3, 1996, the Registrant acquired substantially all the assets of radio
stations KNAX-FM/KRBT-FM, Fresno, California from EBE Broadcasting, L.P.
Consideration for the acquisition consisted of $6.0 million plus 120,000 shares
of the Registrant's common stock (the "Fresno Acquisition"). The cash portion
of the purchase price was funded through borrowings under the Registrant's
senior debt facility.
On April 1, 1996, the Company acquired substantially all the assets of radio
stations WKII-AM/WEEJ/FM, Port Charlotte, Florida for $2.85 million (the "Port
Charlotte Acquisition"). In the event that the Company is able to relocate
WEEJ-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. The acquisition was funded through borrowings under
the Registrant's senior debt facility.
On March 29, 1996, the Company acquired substantially all the assets of radio
station WHLX-FM, Wheeling, West Virginia for $0.8 million (the "Wheeling
Acquisition"). The acquisition was funded through borrowings under the
Registrant's senior debt facility.
On February 2, 1996, the Registrant sold substantially all the assets of
radio stations WNTQ-FM/WNDR-AM, Syracuse, New York to Pilot Communications
L.L.C. for $12.5 million (the "Syracuse Disposition"). The net proceeds were
used to repay a portion of the Registrant's long-term debt.
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"). The net proceeds were used principally to
repay long-term debt.
On December 21, 1995, the Registrant entered into an option agreement with
Allbritton Communications Company ("Allbritton") for the sale of television
station WJSU-TV, Anniston, Alabama the ("Anniston Option"). Under the terms
of the option agreement, the Registrant received $10 million for an option
which gives Allbritton the right to purchase substantially all the assets
relating to the operations of the station for $2 million. In addition, the
Registrant will receive up to $7 million upon receipt of the necessary
approvals to relocate the station's broadcast transmitter to maximize broadcast
coverage of the facility. The net proceeds were used to repay a portion of the
Registrant's long-term debt.
Collectively, the Wheeling Acquisition, the Port Charlotte Acquisition and the
Jacksonville Disposition are the "Other Transactions".
The accompanying pro forma condensed consolidated balance sheet at March 31,
1996 assumes that the Fresno Acquisition and the Port Charlotte Acquisition
were made as of March 31, 1996. The accompanying pro forma condensed
consolidated statement of operations for the year ended December 31, 1995
assumes that the Fresno Acquisition, Syracuse Disposition, Anniston Option, and
the Other Transactions occurred as of January 1, 1995. The accompanying pro
forma condensed consolidated statement of operations for the three months
ended March 31, 1996 assumes that the Fresno Acquisition, Syracuse Disposition,
and the Other Transactions occurred as of January 1, 1996. The pretax gains
resulting from the Syracuse Disposition, Jacksonville Disposition and Anniston
Option are not reflected in the accompanying pro forma condensed consolidated
statemnets of operations because of their nonrecurring nature.
The Fresno Acquisition, the Port Charlotte Acquisition and the Wheeling
Acquisition, (collectively, the "Acquisitions") have been accounted for using
the purchase method of accounting. The total cost of such Acquisitions has been
allocated to the tangible and intangible assets acquired based on their
respective fair values. The allocation of the respective purchase prices
assumed in the pro forma financial statements is preliminary. The Registrant
does not expect that the final allocation of the purchase price will materially
differ from the preliminary allocation.
The pro forma adjustments are based on available information and on certain
assumptions that the Registrant believes are reasonable under the
circumstances. The pro forma consolidated financial statements should be read
in conjunction with the Registrant's consolidated financial statements and
notes thereto contained in the Registrant's 1995 Annual Report on Form 10-K and
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 and the
financial statements and notes thereto of the Fresno Acquisition included
in this filing.
In management's opinion, the accompanying pro forma 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
March 31, 1996
<TABLE>
<S> <C> <C> <C> <C> <C>
Port
Fresno Charlotte Pro Forma
Historical Acquisition Acquisition Adjustments Pro Forma
ASSETS
Cash and cash $1,255,071 - - $1,255,071
equivalents
Other current assets 7,100,876 - - 7,100,876
Total current assets 8,355,947 - - 8,355,947
Investment in affiliated
companies 524,952 - - 524,952
Property, plant and
equipment, net 13,889,513 2,531,000 782,000 17,202,513
Intangible assets, net 35,715,934 4,489,000 2,818,000 43,022,934
Other noncurrent assets 457,926 - - 457,926
Total assets $58,944,272 $7,020,000 $3,600,000 $69,564,272
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $10,061,746 - - $10,061,746
Long-term debt 20,050,000 - - 9,600,000(a) 29,650,000
Deferred income taxes 2,275,711 - - 2,275,711
Other noncurrent 441,307 - - 441,307
liabilities
Total liabilities 32,828,764 - - 42,428,764
Common stock 52,774 - - 1,200(a) 53,974
Additional paid-in
capital 39,701,591 - - 39,701,591
Accumulated deficit (13,638,857) - - 1,018,800(a)(12,620,057)
Total stockholders' 26,115,508 - - 27,135,508
equity
Net assets to be
acquired 7,020,000 3,600,000 (10,620,000) -
Total liabilities and
stockholders'
equity $58,944,272 $7,020,000 $3,600,000 $69,564,272
</TABLE>
See accompanying Notes to Unaudited Pro Forma Financial Statements
<PAGE>
OSBORN COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
for the year ended December 31, 1995
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Fresno Syracuse Anniston Other Pro Forma
Historical Acquisition Disposition Option Transaction Adjustments Pro Forma
Net revenues $39,100,496 $2,873,097 ($2,664,628) ($3,806,951) $624,674 - $36,126,688
Operating expenses
excluding
depreciations,
amortization and
corporate
expenses 29,397,184 2,377,631 (1,739,264) (2,582,313) 525,804 - 27,979,042
Depreciation and
amortization 5,782,404 398,263 (290,645) (322,290) 151,351 298,182 (b) 6,017,265
Corporate expenses 1,705,850 128,352 (3,516) - - (124,836)(c) 1,705,850
Operating income 2,215,058 (31,149) (631,203) (902,348) (52,481) - 424,531
Other income
(expense) 2,314,508 (212,273) 5,399 (6,939) - 217,318 (d) 2,318,013
Interest expense 5,212,999 1,305,782 - - 170,240 (2,512,116)(e) 4,176,905
Equity in results of (11,829) - - - - - (11,829)
affiliated company
Gain on sale
of station 8,094,993 - - (8,094,993) - -
Income (loss) before
income taxes and
extraordinary item 7,399,731 (1,549,204) (625,804) (9,004,280) (222,721) - (1,446,190)
Provision for income
taxes 775,982 - - - - (250,000)(f) 525,982
Net income (loss)
before extraordinary
item $6,623,749 ($1,549,204) ($625,804) ($9,004,280)($222,721) - ($1,972,172)
Net income (loss)
before gain on sale of
station and extraordinary
item per common share:
Primary ($0.27) ($0.36)
Fully-diluted ($0.27) ($0.36)
Weigted average common
shares outstanding:
Primary shares 5,388,001 120,000(a) 5,508,001
Fully-diluted
shares 5,388,001 5,508,001
</TABLE>
See accompanying Notes to Unaudited Pro Forma Financial Statements
<PAGE>
OSBORN COMMUNICATION CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
for the three months ended March 31, 1996
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Fresno Syracuse Other Pro Forma
Historical Acquisition Disposition Transaction Adjustments Pro Forma
Net revenues $6,814,656 $416,803 ($26,162) $175,339 $7,380,636
Operating expenses
excluding
depreciation,
amortization and
corporate expenses 5,831,200 413,046 (19,215) 186,360 6,411,391
Depreciation and 1,210,538 99,566 (20,613) 67,665 74,546 (b) 1,431,702
amortization
Corporate expenses 456,792 - - - 456,792
Operating income (683,874) (95,809) 13,666 (78,686) (919,248)
Other income (expense) (92,682) 95,809 (5) - 3,122
Interest expense 635,181 - - 8,731 105,821 (g) 749,733
Gain on sale of station 6,874,434 - (6,040,768) (833,666) -
Income (loss) before 5,462,697 - (6,027,107) (921,083) (1,665,860)
income taxes
Provision for income 851,228 - - - (774,000)(h) 77,228
taxes
Net income (loss) $4,611,469 -($6,027,107) ($921,083) ($1,743,088)
Net income (loss)
before gain on sale
of station per
common share:
Primary ($0.41) ($0.31)
Fully-diluted ($0.41) ($0.31)
Weigted average common
shares outstanding:
Primary shares 5,531,540 120,000(a) 5,651,540
Fully-diluted shares 5,531,540 5,651,540
</TABLE>
See accompanying Notes to Unaudited Pro Forma Financial Statements
<PAGE>
Notes to Unaudited Pro Forma Financial Data
(a) Represents borrowings of long-term debt and the issuance
of common stock to fund the Fresno Acquisition and the Port
Charlotte Acquisition.
(b) Represents the pro forma increase in depreciation and
amortization expense following the Acquisitions.
(c) Represents the elimination of home office expenses and
management fees charged by the prior owner of the Fresno
radio stations and corporate expenses following the Syracuse
Disposition.
(d) Represents the elimination of refinancing costs incurred
by the prior owner of the Fresno radio stations.
(e) Represents the net reduction of interest expense
resulting from the increase in long-term debt associated with
the Fresno Acquisition, Port Charlotte Acquisition and
Wheeling Acquisition, net of the repayment of long-term debt
with the proceeds from the Syracuse Disposition, Jacksonville
Disposition and Anniston Option.
(f) Represents reduction of state and local income taxes
resulting from the Syracuse Disposition and Anniston Option.
(g) Represents the net increase of interest expense resulting
from the increase in long-term debt associated with the
Fresno Acquisition, Port Charlotte Acquisition and Wheeling
Acquisition, net of the repayment of long-term debt with the
proceeds from the Syracuse Disposition and Jacksonville
Disposition.
(h) Represents reduction of state and local income taxes
resulting from the Syracuse Disposition and Jacksonville
Disposition.
