<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 000-20823
UNIVERSAL OUTDOOR HOLDINGS, INC.
DELAWARE 36-3766705
--------------------------------- ---------------------------------
(STATE OR OTHER JURISDICTION (IRS EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
311 S. WACKER DRIVE, SUITE 6400, CHICAGO, ILLINOIS 60606
REGISTRANT'S TELEPHONE NUMBER: (312) 431-0822
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 / /
------ ------
THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK, $0.01
PAR VALUE, AS OF JULY 30, 1997 WAS 24,112,800 SHARES.
<PAGE>
Part I. FINANCIAL INFORMATION.
UNIVERSAL OUTDOOR HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in thousands)
June 30, December 31,
1997 1996
--------- -----------
ASSETS
Current assets:
Cash and equivalents $ 2,168 $ 11,631
Cash held in escrow - 9,455
Accounts receivable, less allowance
for doubtful accounts of $1,625 and $2,849 31,884 20,927
Other receivables 2,218 1,445
Prepaid land leases 8,005 4,010
Prepaid insurance and other 4,898 4,173
------- -------
Total current assets 49,173 51,641
Property and equipment, net 542,768 382,555
Goodwill and intangible assets, net 242,670 219,009
Other assets, net 19,078 25,114
--------- --------
Total assets $ 853,689 $678,319
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,387 $ 3,373
Accrued expenses 29,082 26,532
------- -------
Total current liabilities 32,469 29,905
------- -------
Long-term debt and other obligations 510,316 349,141
Other long-term liabilities 485 485
Long-term deferred income tax liabilities 79,563 71,700
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000
shares authorized; and no shares issued
and outstanding - -
Common stock, $.01 par value, 75,000,000
shares authorized; 24,112,800 and 23,992,800
shares issued and outstanding 241 239
Warrants 9,967 9,967
Additional paid in capital 298,000 295,162
Accumulated deficit (77,352) (78,280)
------- -------
Total stockholders' equity 230,856 227,088
------- -------
Total liabilities and stockholders' equity $853,689 $678,319
======== ========
See accompanying notes to consolidated financial statements.
1
<PAGE>
UNIVERSAL OUTDOOR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars and shares in thousands)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
1997 1996 1997 1996
------- ------- -------- -------
Revenues $58,602 $20,035 $106,177 $29,366
Less agency commissions 5,497 2,223 9,064 3,127
------- ------- -------- -------
Net revenues 53,105 17,812 97,113 26,239
------- ------- -------- -------
Operating expenses:
Direct cost of revenues 19,659 5,949 38,104 9,520
General and administrative
expenses 5,148 1,859 9,549 3,086
Depreciation and amortization 14,229 2,642 27,088 4,674
Noncash compensation for
Common Stock Warrants 9,000 9,000
------- ------- -------- -------
39,036 19,450 74,741 26,280
------- ------- -------- -------
Operating income (loss) 14,069 (1,638) 22,372 (41)
------- ------- -------- -------
Other (income) expenses:
Interest expense 10,533 4,683 20,993 8,113
Interest expense -
amortization of deferred
financing costs 720 164 965 328
Other (332) 1,663 (514) 1,674
------- ------- -------- -------
Total other expense 10,921 6,510 21,444 10,115
------- ------- -------- -------
Net income (loss) $ 3,148 ($ 8,148) $ 928 ($10,156)
======= ======= ======== =======
Income (loss) per common
and common equivalent share:
Net income (loss) $0.12 ($1.06) $0.04 ($1.33)
Weighted average common and
common equivalent
shares outstanding 25,872 7,654 25,864 7,654
See accompanying notes to consolidated financial statements.
2
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UNIVERSAL OUTDOOR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in thousands)
For the Six Months Ended
1997 1996
---- ----
Cash flows from operating activities:
Net income (loss) $928 ($10,156)
Depreciation and amortization 27,088 5,863
Amortization of deferred financing costs 965 328
Costs related to acquisition - 1,750
Non-cash compensation related to warrants - 9,000
Changes in assets and liabilities,
net of effects from acquisitions:
Accounts receivable and
other receivables (10,602) (1,254)
Prepaid land leases, insurance and other (3,827) (209)
Accounts payable and accrued expenses (8,250) 866
Accrued interest and other 1,413 (72)
-------- -------
Net cash from operating activities 7,715 6,116
-------- -------
Cash flows used in investing activities:
Capital expenditures (8,631) (2,943)
Payments for acquisitions,
net of cash acquired (177,287) (107,106)
Other payments (2)
Acquisition costs - (74)
-------- -------
Net cash used in investing
activities (185,918) (110,125)
-------- -------
Cash flows from (used in) financing activities:
Issuance of common stock 1
Proceeds from issuance of long term debt 75,000
Long-term debt repayments (903) (1,173)
Proceeds from equity offering 30,000
Deferred financing costs (1,113) -
Net borrowings under credit agreements 161,300 222
-------- -------
Net cash from financing activities 159,285 104,049
-------- -------
Net increase (decrease) in cash
and equivalents (18,918) 40
Cash and equivalents, at beginning of period 21,086 19
-------- -------
Cash and equivalents, at end of period $ 2,168 $ 59
========== =======
Supplemental cash flow information:
Interest paid during the period $ 19,238 $ 9,807
========== =======
See accompanying notes to consolidated financial statements.
3
<PAGE>
UNIVERSAL OUTDOOR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 1 - BASIS OF PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS:
The interim financial statements contained herein have been prepared by
management and are unaudited. The financial statements should be read in
conjunction with the financial statements and the notes thereto included in
the Annual Report on Form 10-K of Universal Outdoor Holdings, Inc. (the
Holding Company) for the year ended December 31, 1996.
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, which were of a normal recurring nature, necessary
to present fairly the financial position of the Holding Company as of June
30, 1997, and the results of its operations and its cash flows for the
periods presented herein.
NOTE 2 - CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT):
<TABLE>
<CAPTION>
Common Stock Total
and Additional Stockholders'
Shares of Paid In Accumulated Equity
Common Stock Capital Warrants Deficit (Deficit)
------------ -------------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996 23,993 $295,401 $9,967 $(78,280) $227,088
Issuance of common stock shares 120 2,906 - - 2,906
Costs associated with 1996 offerings - (66) - - (66)
Net income for the six months
ended June 30, 1997 - - - 928 928
------- ------- ------- ------- -------
Balance at June 30, 1997 24,113 $298,241 $9,967 $(77,352) $230,856
======= ======= ======= ======= =======
</TABLE>
NOTE 3 - ACQUISITIONS:
In January 1997, the Company acquired a total of approximately 2,018 advertising
display faces located in and around Memphis, Tennessee. The purchase price was
approximately $71 million plus 100,000 shares of common stock of the Company
issued on January 2, 1997 at market value.
In January 1997, the Company acquired a total of approximately 1,035 advertising
display faces
4
<PAGE>
located in three markets in the east coast of the United States, including
Metro New York, Northern New Jersey and Hudson Valley, for approximately
$40 million in cash.
In February 1997, the Company acquired a total of approximately 135 advertising
display faces located in and around Evansville, Indiana for approximately
$5.5 million in cash. The Company also acquired 12 existing advertising display
faces and 35 in process display faces in New Jersey for approximately
$5.3 million in cash.
In March 1997, the Company acquired a total of approximately 600 transit
advertising panels in and around Memphis, Tennessee for approximately $8.5
million in cash.
In March 1997, the Company acquired $600,000 of outdoor advertising properties
in Florida in exchange for 20,000 shares of the Company's stock.
In April 1997, The Company entered into an agreement to purchase 90 advertising
display faces in and around New York, New York for approximately $51.0 million
in cash. The deal was consummated in July 1997.
In June 1997, The Company acquired approximately 1,450 advertising display faces
in the Baltimore metropolitan area for $46.5 million in cash.
All completed acquisitions have been accounted for under the purchase method of
accounting and accordingly, the operating results of the acquired businesses are
included in the Company's consolidated financial statements from the respective
dates of acquisition.
The following unaudited pro forma financial information includes the results
of operations of the 1996 and 1997 acquisitions, as noted in the Company's
Annual Report on Form 10-K and the notes included herein, as if the
transactions had been consummated as of the beginning of the period presented
after including the impact of certain adjustments such as depreciation of
advertising structures, amortization of goodwill and other intangibles,
reduction of corporate expenses relating to the elimination of certain
duplicate corporate expenses, principally relating to employee costs and
other corporate activities and interest expense on debt assumed to have been
incurred to complete the transactions.
For the Six Months Ended
1996 1997
Pro Forma Pro Forma
(unaudited) (unaudited)
--------- ---------
Net revenues $89,649 $100,403
Depreciation and amortization 27,259 28,937
Operating income 15,821 22,213
Interest expense 24,154 23,934
Loss before income taxes ($ 8,333) ($1,721)
Loss per share ($ .35) ($ .07)
5
<PAGE>
These unaudited pro forma results are not necessarily indicative of what
actually would have occurred if the acquisitions had been in effect for the
entire periods presented and are not intended to project future results.
NOTE 4 - COMMITMENTS AND CONTINGENCIES:
The Company, as the successor to Outdoor Advertising Holdings, Inc. and POA
Acquisition Company ("POA"), was a defendant in a case in the United States
District Court, Middle District of Florida. The plaintiffs alleged that POA,
among others, conspired to restrain trade and to monopolize the market for
leases for land on which outdoor advertising structures can be erected. The
case was settled in 1997 with no significant adverse financial effect.
The Company is subject to various other claims and routine litigation arising in
the ordinary course of business. Based on the advice of counsel, management
does not believe that the result of such other claims and litigation,
individually or in the aggregate, will have a material effect on the Company's
business or its results of operations, cash flows or financial position.
NOTE 5 - INCOME TAXES:
In arriving at a determination not to provide income taxes, the Company
considered its past operating history as well as the anticipated effect of
acquisitions on its full year results, statutory restrictions on the use of
operating losses from acquisitions, available tax planning strategies and its
expectation of the level and timing of future taxable income.
NOTE 6 - 1997 EQUITY INCENTIVE PLAN:
In June 1997, the Company filed a Registration Statement on Form S-8 to
register 500,000 shares of the Company's Common Stock to be issued under the
Company's Equity Incentive Plan. At June 30, 1996, no shares of stock had
been issued under the Equity Incentive Plan.
NOTE 7 - SUBSEQUENT EVENTS:
In July 1997, the Company consummated the purchase of 91 boards in and around
New York, New York for approximately $51.0 million in cash. Additionally, the
Company purchased approximately 63 boards in and around Memphis, Tennessee and
Tunica, Mississippi for approximately $2.5 million in cash.
6
<PAGE>
Item 2. Management's Discussion and Analyses of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
Universal Outdoor Holdings, Inc. (the "Company") conducts its business
operations through its wholly-owned subsidiary, Universal Outdoor, Inc.
("UOI") and UOI's subsidiaries. Unless otherwise indicated, references to the
Company in the following discussion refer to the consolidated operations of
the Company.
This quarterly report contains forward-looking statements that involve
risks and uncertainties. When used in this quarterly report, the words
"anticipate," "believe," "estimate" and "expect" and similar expressions as
they relate to the Company and its management are intended to identify such
forward-looking statements. The Company's actual results, performance, or
achievements could differ materially from the results expressed in, or
implied by, such forward-looking statements. Factors that could effect such
results, performance or achievement are set forth in "Risk Factors" in
Amendment No.6 in the Company's Registration Statement on Form S-1 (File
No. 33-93852).
Net revenues increased 270.6% to $97.1 million during the first six
months of 1997 compared to $26.2 million in the corresponding 1996 period.
This increase was a result of inclusion of approximately $6.9 million of
revenues from the first three months of 1997 from the Minneapolis and
Jacksonville markets (the "Naegele Markets") which were acquired from NOA
Holding Company ("Naegele") in April 1996 (the "Naegele Acquisition").
Additionally, $25.0 million is attributable to markets acquired from Outdoor
Advertising Holdings, Inc. in October of 1996 (the "POA Acquisition"), and
$24.6 million is attributable to markets acquired from Revere Holding Corp.
in December 1996 ( the "Revere Acquisition"), Matthew Outdoor Advertising
Acquisition Co., L.P. in January 1997 (the "Matthew Acquisition"), and the
Baltimore market acquired from Lamar Advertising Company in June 1997 (the
"Penn Acquisition"). Revenues from markets located in and around Memphis (TN)
and Tunica County (MS) which were acquired by the Company in January 1997
(the "Memphis/Tunica Acquisition") contributed $8.5 million. The remaining
$5.9 million or 22.5% increase in net revenues was a result of higher
advertising rates and occupancy levels on the Company's signboards and
inclusion for the full six months of signboard revenues from advertising
display faces in the Des Moines (IA) and Dallas (TX) markets which were
acquired in 1996 (the "Additional Acquisitions"). Overall net revenues from
tobacco advertising increased to $10.3 million in the first six months of
1997 compared to $3.4 million in the 1996 period. This increase was due
mainly to the inclusion of tobacco revenues from the acquired markets. As a
percentage of net revenues, tobacco advertising sales decreased to 10.6% in
the first six months of 1997 compared to 13.0% in the 1996 period.
The tobacco industry has recently engaged in negotiations to settle
litigation against such industry. The tobacco companies have reached a
proposed settlement that, upon the approval of Congress, will become final
and binding. Such proposed settlement would require a total ban of tobacco
advertising on outdoor billboards and signs. Any such ban may have a material
adverse effect on the Company's revenues at least in the immediate period
following the imposition of such ban while alternate sources of advertising
are secured. There can be no assurance that the Company will immediately
replace such advertising revenue currently attributed to the tobacco
industry in the event of a total ban of tobacco advertising on outdoor
billboards and signs. Furthermore, even in the event the advertising ban does
not take place, state and local governments, including state and local
governments in areas where the Company does business, have recently proposed
and some have enacted regulations restricting or banning outdoor advertising
of tobacco in certain jurisdictions.
Direct cost of revenues increased to $38.1 million in the first six months
of 1997 compared to $9.5 million in the 1996 period. The Naegele Markets and
the POA Acquisition
-7-
<PAGE>
accounted for $2.9 million and $8.2 of the increase, respectively. The
Revere Acquisition, the Matthew Acquisition, the Penn Acquisition and the
Memphis/Tunica Acquisition accounted for $14.9 million. As a percentage of
net revenues, direct cost of revenues increased to 39.2% in the first six
months of 1997 compared to 36.3% in the 1996 period.
General and administrative expenses increased to $9.5 million in the
first six months of 1997 from $3.1 million in the 1996 period. As a
percentage of net revenues, general and administrative expenses decreased to
9.8% in the first six months of 1997 compared to 11.8% in the 1996 period.
This percentage decrease was due to the addition of the new markets' revenues
without a significant increase in staffing or other corporate overhead
expenses.
Depreciation and amortization expense increased to $27.1 million in the
first six months of 1997 compared to $4.7 million in the 1996 period. This
increase was due to significant increases in the fixed assets and goodwill as
a result of acquisitions.
Non cash compensation related to common stock warrants consisted of a
$9.0 million charge arising from the issuance of common stock warrants in
April 1996.
Total interest expense increased to $22.0 million in the first six
months of 1997 compared to $8.4 million in the 1996 period. The increase
resulted from increased debt outstanding under the Company's revolving credit
facility which was incurred to finance the Revere, Matthew and Memphis/Tunica
Acquisitions and from the issuance by UOI of $225 million 9 3/4% Senior
Subordinated Notes due 2006 in October 1996 and $100 million 9 3/4% Series B
Subordinated Notes due 2006 in December 1996.
Other expenses in 1996 included a $1.8 million charge for expenses
arising out of the Naegele Acquisition.
The foregoing factors contributed to the Company's $0.9 million net
income in the first six months of 1997 compared to a loss of $10.2 million
in the 1996 period.
COMPARISON OF THREE MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
Net revenues increased 198.3% to $53.1 million during the three months
ended June 1997 compared to $17.8 million in the corresponding 1996 period.
This increase was a result of inclusion of approximately $13.1 million
attributable to markets acquired from the POA Acquisition and $14.4 million
is attributable to markets acquired from the Revere Acquisition, the Matthew
Acquisition and the Baltimore market acquired from the Penn Acquisition.
Revenues from the Memphis/Tunica Acquisition contributed $4.3 million. The
remaining $3.5 million or 19.7% increase in net revenues was a result of
higher advertising rates and occupancy levels on the Company's signboards and
inclusion for the full three months of signboard revenues from the Additional
Acquisitions. Overall net revenues from tobacco advertising increased to
$5.9 million in the three months ended June 1997 compared to $2.2 million in
the 1996 period. This increase was due mainly to the inclusion of tobacco
revenues from the acquired markets. As a percentage of net revenues, tobacco
advertising sales decreased to 11.1% in the three
-8-
<PAGE>
months ended June 1997 compared to 12.4% in the 1996 period.
Direct cost of revenues increased to $19.7 million in the three months
ended June 1997 compared to $5.9 million in the 1996 period. The POA
Acquisition accounted for $4.2 million of the increase. The Revere
Acquisition, the Matthew Acquisition, the Penn Acquisition and the
Memphis/Tunica Acquisition accounted for $7.9 million. As a percentage of
net revenues, direct cost of revenues increased to 37.1% in the three months
ended June 1997 compared to 33.1% in the 1996 period.
General and administrative expenses increased to $5.1 million in the
three months ended June 1997 from $1.9 million in the 1996 period. As a
percentage of net revenues, general and administrative expenses decreased to
9.6% in the three months ended June 1997 compared to 10.7% in the 1996
period. This percentage decrease was due to the addition of the new markets'
revenues without a significant increase in staffing or other corporate
overhead expenses.
Non cash compensation related to common stock warrants consisted of a
$9.0 million charge arising from the issuance of common stock warrants in
April 1996.
Depreciation and amortization expense increased to $14.2 million in the
three months ended June 1997 compared to $2.6 million in the 1996 period.
This increase was due to significant increases in the fixed assets and
goodwill as a result of the acquisitions.
Total interest expense increased to $11.3 million in the three months
ended June 1997 compared to $4.8 million in the 1996 period. The increase
resulted from increased debt outstanding under the Company's revolving credit
facility which was incurred to finance the Revere, Matthew and Memphis/Tunica
Acquisitions and from the issuance by UOI of $225 million 9 3/4% Senior
Subordinated Notes due 2006 in October 1996 and $100 million 9 3/4% Series B
Subordinated Notes due 2006 in December 1996.
Other expenses in 1996 included a $1.8 million charge for expenses
arising out of the Naegele Acquisition.
The foregoing factors contributed to the Company's $3.1 million net
income in the three months ended June 1997 compared to a loss of $8.1 million
in the 1996 period.
LIQUIDITY AND CAPITAL RESOURCES
In January 1997, the Company consummated the Memphis/Tunica Acquisition
and as a result acquired 2,018 advertising display faces located in and
around Memphis (TN) and Tunica County (MS) for a purchase price of
approximately $71 million plus 100,000 shares of common stock of the Company
issued on January 2, 1997 at market value. Additionally, in January 1997,
the Company consummated the Matthew Acquisition and as a result acquired
approximately 1,035 advertising display faces located in and around Metro New
York, Northern New Jersey and Hudson Valley for a purchase price of
approximately $40 million in cash.
-9-
<PAGE>
In February 1997, the Company acquired certain assets of (i) Adcraft,
Inc. (the "Evansville Acquisition") for approximately $5.5 million in cash
and (ii) Klein Outdoor Advertising (the "New Jersey Acquisition", and
together with the Evansville Acquisition, the "February Acquisitions")for
approximately $5.3 million in cash. As a result of the February
Acquisitions, the Company acquired approximately 135 advertising display
faces located in and around Evansville, Indiana and approximately 12 existing
advertising display faces and 35 in process display faces in New Jersey.
In March 1997, the Company acquired certain assets of TransAd, Inc.(the
"TransAd Acquisition") for approximately $8.5 million in cash. As a result of
the TransAd Acquisition, the Company acquired approximately 600 transit
advertising panels in and around Memphis, Tennessee.
In April 1997, the Company agreed to acquire the outdoor advertising
assets of Allied Outdoor Advertising, Inc. for approximately $51.2 million in
cash (the "Allied Acquisition"). Upon consummation of the Allied Acquisition
in July 1997, the Company acquired approximately 90 outdoor advertising
display faces in New York City and New Jersey.
In June 1997, the Company acquired the stock of Penn Advertising of
Baltimore from Lamar Advertising for approximately $46.5 million in cash. As
a result of the Penn Acquisition, the Company acquired approximately 1,440
advertising display faces located in Baltimore, Maryland.
In May 1997, UOI increased the total commitment of its revolving credit
facility to $300 million by adding a $75 million term loan which was drawn by
the Company in order to pay down outstanding amounts owed by the Company
under its revolving credit facility. At June 30, 1997 the Company's credit
facility had approximately $181.3 million outstanding.
Net cash provided by operating activities increased to $7.7 million for
the six months ended June 30, 1997 from $6.1 million for the 1996 period.
Net cash provided by operating activities reflects the Company's net income
adjusted for non-cash items and the use or source of cash for the net change
in working capital.
The Company's net cash used in investing activities of $185.9 million
for the six months ended June 30, 1997 includes cash used for acquisitions of
$177.3 million and other capital expenditures of $8.6 million. Capital
expenditures have been made primarily to develop new structures in each of
the markets. The Company intends to continue to develop new structures in
its markets and to consider potential acquisitions in the Midwestern,
Southeastern and Eastern regions and contiguous markets. Management believes
that its internally generated funds, together with available borrowings under
its credit facility, will be sufficient to satisfy its cash requirements,
including anticipated capital expenditures, for the foreseeable future.
However, in the event cash from operations, together with available funds
under the Company's credit facility are insufficient to satisfy its cash
requirements, the Company may obtain funds from additional sources of
indebtedness and/or equity offerings to finance its operations including,
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<PAGE>
without limitation, additional acquisitions.
For the six months ended June 30, 1997, $159.3 million was provided by
financing activities due to increased borrowings under the Company's credit
facilities. For the 1996 period, $104.0 million was used in financing
activities primarily due to acquisitions.
NEW ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards (SFAS) No. 128, EARNINGS PER SHARE, which
established a new accounting principle for the calculation of earnings per
share. This SFAS is effective for accounting periods ending after December
15, 1997. The Company has reviewed the effects of the provisions of the
standard and determined that the net loss per share for the three and six
month periods ended June 30, 1996 would not be affected. However, basic net
income per common share for the three and six month periods ended June 30,
1997 would have been $0.13 and $0.04, respectively. Diluted earnings per
common share for the three and six month periods end June 30, 1997 would have
been the same as the amounts shown on the statements of operations.
The FASB has issued SFAS No. 130, REPORTING COMPREHENSIVE INCOME, which
will require the Company to disclose, in financial statement format, all
non-owner changes in equity. SFAS No. 130 is effective for fiscal years
beginning after December 15, 1997. Adoption of this standard is not expected
to have a material impact on disclosures in the Company's financial
statements, except that the tax benefit obtained by the Company upon exercise
of stock warrants and employee option would be included as an element of
comprehensive income.
The FASB has issued SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF AN
ENTERPRISE AND RELATED INFORMATION, which established a new accounting
principle for reporting information about operating segments in annual
financial statements and interim financial reports. It also established
standards for related disclosures about products and services, geographic
areas and major customers. SFAS No. 131 is effective for fiscal years
beginning after December 15, 1997. The Company is currently evaluating the
applicability of this standard. However, the Company does not expect a
material impact on disclosures in the Company's financial statements.
-11-
<PAGE>
Part II. OTHER INFORMATION.
Item 1. Legal Proceedings.
Note 4 to the financial statements of Universal Outdoor Holdings, Inc.
(the "Company") included in Part I of this report is hereby incorporated by
reference.
Item 4. Submission of Matters to a Vote of Security Holders.
The Annual Meeting of Stockholders of the Company was held on May 13,
1997. The matters submitted to a vote of security holders were:
<TABLE>
<CAPTION>
Votes Votes Votes Abstentions
Matter Cast For Cast Against Withheld Broker Non-Votes
- ------ ----------- ------------ -------- ----------------
<S> <C> <C> <C> <C>
Election of Michael J. Roche as 18,518,874 0 337,450 0
director of the Company to
serve for a three year term or until
a successor is duly elected
and qualified
Election of Frank K. Bynum, Jr. as 18,518,794 0 337,530 0
director of the Company to serve
for a three year term or until a
successor is duly elected and qualified
Approval of the 1997 Equity Incentive Plan 18,154,637 653,917 0 47,770
Ratification of the appointment of Price 18,847,854 6,300 0 2,170
Waterhouse LLP as independent auditors
of the Company
</TABLE>
The directors whose term of office continued after the meeting are
Daniel L. Simon, Brian T. Clingen and Michael B. Goldberg.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Number Description
- ------ -------------
3.1 Third Amended and Restated Articles of Incorporation of the
Registrant (incorporated herein by reference to Exhibit 3.1 of
the Company's Registration Statement on Form S-1 (File
No. 333-12457) (the "Registration Statement"))
3.2 Amended and Restated By-Laws of the Registrant (incorporated
herein by reference to Exhibit 3.2 of the Registration Statement
11 Statement re computation of per share earnings
27 Financial Data Schedule
(b) Reports on Form 8-K. None
<PAGE>
SIGNATURE
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.
UNIVERSAL OUTDOOR HOLDINGS, INC.
/s/ Brian T. Clingen
-------------------------------------
Brian T. Clingen
Vice President and Chief
Financial Officer
/s/ Paul G. Simon
-------------------------------------
Paul G. Simon
Vice President, Secretary and
General Counsel
July 31, 1997
<PAGE>
Universal Outdoor Holdings, Inc.
Computation of Earnings Per Share
(Dollars in thousands except for per share information)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- -----------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net income (loss) $ 3,148 $(8,148) $ 928 $(10,156)
Weighted average common
and common equivalent
shares outstanding (1) 25,872 7,654 25,864 7,654
Income (loss) per
common and common
equivalent share:
Net income (loss) $ 0.12 $ (1.06) $ 0.04 $ (1.33)
</TABLE>
- ----------------------
(1) For the three and six month periods ended June 30, 1997 the weighted
average common and common equivalent shares outstanding include common
share equivalents of 1,759. Common share equivalents are computed using
the treasury stock method.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND IN
THE COMPANY'S 10-Q FOR THE YEAR TO DATE.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,168
<SECURITIES> 0
<RECEIVABLES> 33,509
<ALLOWANCES> (1,625)
<INVENTORY> 0
<CURRENT-ASSETS> 49,173
<PP&E> 603,918
<DEPRECIATION> (61,150)
<TOTAL-ASSETS> 853,689
<CURRENT-LIABILITIES> 32,469
<BONDS> 510,316
0
0
<COMMON> 241
<OTHER-SE> 230,615
<TOTAL-LIABILITY-AND-EQUITY> 853,689
<SALES> 91,113
<TOTAL-REVENUES> 106,177
<CGS> 0
<TOTAL-COSTS> 74,741
<OTHER-EXPENSES> (514)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,958
<INCOME-PRETAX> 928
<INCOME-TAX> 0
<INCOME-CONTINUING> 928
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 928
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
