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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported) March 6, 1998
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Busse Broadcasting Corporation
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(Exact name of registrant as specified in its charter)
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Delaware 33-99622 38-2750516
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(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
141 East Michigan Avenue, Suite 300
Kalamazoo, Michigan 49007
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(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code (616) 388-8019
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No Change
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(Former name or former address, if changed since last report)
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BUSSE BROADCASTING CORPORATION
ITEM 5: Other Events:
Reference is made to the Press Release of Busse Broadcasting
Corporation, a Delaware corporation (the "Company"), dated March 6, 1998
attached hereto as Exhibit 10.1 and incorporated by reference herein. The
Press Release announces the Company's unaudited results of operations for the
fiscal year ended December 28, 1997.
ITEM 7: Financial Statements and Exhibits
A. Financial Statements: None
B. Exhibits:
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Description Exhibit
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Press Release dated March 6, 1998 10.1
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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.
BUSSE BROADCASTING CORPORATION
(Registrant)
Dated: March 6, 1998
By: /s/ James C. Ryan
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Name: James C. Ryan
Title: Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
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Press Release dated March 6, 1998 10.1
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NEWS RELEASE For Information Contact
Jim Ryan
Chief Financial Officer
616-388-8019
BUSSE BROADCASTING CORPORATION REPORTS 1997 RESULTS OF OPERATIONS
Kalamazoo, Michigan -- March 6, 1998 ... Busse Broadcasting Corporation
("Busse" or the "Company") today announced the unaudited results of operations
for the fiscal year ended December 28, 1997. Busse owns and operates the CBS
network affiliated stations KOLN-TV, Lincoln, and KGIN-TV, Grand Island,
Nebraska (collectively, "KOLN/KGIN-TV"), and the NBC affiliated station WEAU-TV,
Eau Claire, Wisconsin (collectively, the "Stations"). KOLN/KGIN-TV serves the
Lincoln - Hastings- Kearney, Nebraska television market while WEAU-TV serves the
La Crosse - Eau Claire, Wisconsin television market.
COMPARISON OF THE YEARS ENDED DECEMBER 28, 1997 AND DECEMBER 29, 1996
Net revenue from continuing operations decreased $303,131, or 1.6%, to
$18,971,040 from $19,274,171 for the year ended December 28, 1997 compared to
the year ended December 29, 1996. Such decrease was primarily attributable
to a decrease in net political revenue for the Stations during the year ended
December 28, 1997 of approximately $1,046,000, or 89.9%, to $118,000 from
$1,164,000 for the year ended December 29, 1996, reflecting 1997 as the
"off-year" of the biannual election cycle. Such decrease in net political
revenue was offset in part by growth in local and national net revenue,
excluding political net revenue, at KOLN/KGIN-TV. That station recorded a
year-to-year increase in net local and national time sales, excluding net
political revenue, of approximately 14.0% and 2.7%, respectively, due to a
general increase in advertising demand by clients within that station's
market. WEAU-TV recorded decreases of approximately 3.7% and 4.6% in net
local and national time sales, excluding net political revenue, respectively,
during the year ended December 28, 1997 compared to the year ended December
29, 1996 due to decreased advertiser demand within that station's market.
Network compensation for the Stations was consistent between the respective
fiscal periods.
Operating expenses, excluding depreciation and amortization expenses,
increased $20,263, or 0.2%, to $8,427,942 for the year ended December 28, 1997
from $8,407,679 for the comparable 1996 period. Such slight increase is
attributable to a non-recurring gain of $344,782 reflecting the curtailment of
the Company's defined benefit retirement plan offsetting other operating expense
increases.
Depreciation expenses increased $17,216, or 0.9%, to $1,871,079 for the
year ended December 28, 1997 from $1,853,863 for the comparable 1996 period,
reflecting depreciation related to capital assets acquired since December 29,
1996.
Amortization expenses increased $71,305, or 1.8%, to $3,931,304 for the
year ended December 28, 1997 from $3,859,999 for the comparable 1996 period.
Corporate expenses decreased $48,098, or 3.1%, to $1,523,674 during the
year ended December 28, 1997 from $1,571,772 for the comparable 1996 period
reflecting, in part, differences in the incurrence of charges for professional
services between the respective fiscal periods.
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Income from continuing operations decreased $363,817, or 10.2%, to
$3,217,041 for the year ended December 28, 1997 from $3,580,858 for the
comparable 1996 period reflecting the decreased net revenue and slightly
increased operating expenses as discussed above.
Interest expense decreased $59,495, or 0.7%, to $8,340,845 for the year
ended December 28, 1997 from $8,400,340 for the comparable 1996 period
reflecting the Company's redemption and/or repayment of certain debt in January
and October 1996 offset, in part, by increasing amortization of the original
issue discount related to the Company's 11 5/8% Senior Secured Notes due October
15, 2000 (the "Senior Notes").
Interest income for the year ended December 28, 1997 increased $157,279, or
54.7%, to $445,072 from $287,793 for the comparable 1996 period primarily due to
interest earnings on the net proceeds from the sale of Winnebago Color Press, a
former operating division of the Company specializing in lithographic printing
("Winnebago"), on December 27, 1996.
The Company has analyzed its current and deferred tax assets and
liabilities and has concluded that no provision for current or deferred federal
or state taxes is required for the year ended December 28, 1997.
Income from discontinued operations for the year ended December 29, 1996
reflects the results for Winnebago which was accounted for as a discontinued
operation for the 1996 period and includes $6,896,484 of net revenue for the
year then ended. Winnebago was sold on December 27, 1996.
Station Cash Flow (as defined) decreased approximately $720,000, or 6.6%,
to $10,259,000 from $10,979,000 for the year ended December 28, 1997 compared to
the year ended December 29, 1996. Such decrease was primarily attributable to a
decrease in net political revenue for the Stations and general increases in
operating costs and expenses of the Stations, after exclusion of any gains on
the defined benefit retirement plan, both as discussed above.
On February 13, 1998, the Company, its stockholders and Gray Communications
Systems, Inc., a Georgia Corporation ("Gray"), entered into a definitive
purchase agreement (the "Stock Purchase Agreement") whereby Gray agreed to
acquire all of the capital stock of the Company for the aggregate purchase price
of (i) $112 million, plus (ii) the Company's cash and cash equivalents, less
(iii) the aggregate amount of the Company's indebtedness and accrued and unpaid
interest thereon, including the accreted amount of the Senior Notes. The value
of the Company's cash, cash equivalents and aggregate indebtedness will be
determined as of the close of business on the business day immediately preceding
the closing date of the Stock Purchase Agreement. Consummation of the
transactions contemplated by the Stock Purchase Agreement is subject to the
receipt of requisite governmental approvals, including the approval of the
Federal Communications Commission. The Company can make no assurance as to
whether the transactions contemplated by the Stock Purchase Agreement will be
completed, but currently anticipates that such transactions will close on or
before September 1, 1998.
A table highlighting the Company's results of operations for the fiscal
years ended December 28, 1997 and December 29, 1996 is presented below.
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Busse Broadcasting Corporation
Financial Highlights
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Fiscal Year ended Fiscal Year ended
December 28, December 29,
1997 1996
Unaudited Audited %
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Net revenue from continuing operations $ 18,971,040 $19,274,171 -1.57%
Operating costs and expenses,
excluding depreciation and amortization 8,427,942 8,407,679 0.24%
Depreciation 1,871,079 1,853,863 0.93%
Amortization of intangibles
and excess reorganization value 3,931,304 3,859,999 1.85%
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Total operating costs and expenses
of continuing operations
14,230,325 14,121,541 0.77%
Corporate expenses 1,523,674 1,571,772 -3.06%
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Income from continuing operations 3,217,041 3,580,858 -10.16%
Other income (expense)
from continuing operations:
Interest expense (8,340,845) (8,400,340) -0.71%
Interest income 445,072 287,793 54.65%
Loss on disposition of assets (113,148) (77,982) 45.10%
Other income 74,254 23,922 210.40%
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Other expense from continuing operations (7,934,667) (8,166,607) -2.84%
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Loss from continuing operations
before income taxes (4,717,626) (4,585,749) 2.88%
Income taxes - - N/A
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Loss from continuing operations (4,717,626) (4,585,749) 2.88%
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Discontinued operations:
Income from operations - 220,468 N/A
Loss on disposal of operations - (1,929,636) N/A
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- (1,709,168) N/A
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Net loss (4,717,626) (6,294,917) -25.06%
Charges to stockholders' equity
for Series A preferred stock dividends in
arrears (4,822,453) (4,663,471) 3.41%
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Net loss attributable to common stockholders $ (9,540,079) $(10,958,388) -12.94%
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Per common share (basic and diluted):
Loss from continuing operations $ (43.80) $ (42.58)
Income (loss) from discontinued operations - (15.87)
Series A preferred stock dividends in arrears (44.78) (43.30)
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Net loss $ (88.58) $ (101.75)
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Weighted average common shares outstanding 107,700 107,700
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Station Cash Flow (in thousands) (Note 1) $ 10,259 $ 10,979 -6.56%
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Station Cash Flow Margin (Note 2) 54.08% 56.96%
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NOTE 1 "Station Cash Flow" is defined as income from continuing operations
for the Stations plus, to the extent included therein, corporate expenses,
depreciation and amortization (including amortization of program rights) less
cash payments for program rights. The Company has included Station Cash Flow
data because such data are commonly used as a measure of performance for
broadcast companies and are also used by investors to measure a company's
ability to service debt. Station Cash Flow is not, and should not be used as,
an indicator or alternative to operating income, net income or cash flow as
reflected in the consolidated financial statements, is not a measure of
financial performance under generally accepted accounting principles, is not
a depiction of funds available for dividends, capital expenditures or other
discretionary uses and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with generally
accepted accounting principles. In addition, Station Cash Flow as determined
by the Company may not be comparable to related or similar measures as
reported by other companies.
NOTE 2 "Station Cash Flow Margin" is defined as Station Cash Flow divided by
net revenue from the Stations.
