<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
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 27, 1996
--------------
COMMODORE MEDIA, INC.
- - --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware
- - --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
33-92732 13-3034720
- - ----------------------------- --------------------------
(Commission File No.) (I.R.S. Employer
Identification No.)
500 Fifth Avenue, Suite 3000, New York, New York 10110
- - --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(212) 302-2727
--------------
(Registrant's telephone number, including area code)
not applicable
- - --------------------------------------------------------------------------------
(Former Name of Former Address, if Changed Since Last Report)
Page 1 of 20 Pages
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF ADDITIONAL REGISTRANTS
NAME STATE OR OTHER PRIMARY IRS EMPLOYER
JURISDICTION OF STANDARD IDENTIFICATION
INCORPORATION INDUSTRIAL NUMBER
CLASSIFICATION
NUMBER
<S> <C> <C> <C>
Commodore Media of Delaware 4832 51-0286804
Delaware, Inc.
Commodore Media of Delaware 4832 61-0997863
Kentucky, Inc.
Commodore Media of Delaware 4832 23-2207457
Pennsylvania, Inc.
Commodore Media of Delaware 4832 06-1277523
Norwalk, Inc.
Commodore Media of Delaware 4832 59-2813110
Florida, Inc.
Commodore Media of Delaware 4832 13-3356485
Westchester, Inc.
Commodore Holdings, Inc. Delaware 4832 13-3858506
Danbury Broadcasting, Inc. Connecticut 4832 13-3653113
</TABLE>
Page 2 of 20 Pages
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
DANBURY BROADCASTING, INC.:
- Report of Independent Auditors.
- Balance Sheets at June 30, 1994 and 1995.
- Unaudited Balance Sheet at March 26, 1996.
- Statements of Operations and Accumulated Deficit for the Years Ended
June 30, 1994 and 1995.
- Statements of Operations and Accumulated Deficit for the
Nine Months Ended March 31, 1995.
- Unaudited Statements of Operations and Accumulated Deficit for the
Period Beginning July 1, 1995 through March 26, 1996.
- Statements of Cash Flows for the Years Ended June 30, 1994 and 1995.
- Unaudited Statements of Cash Flows for the Nine Months
Ended March 31, 1995 and for the Period Beginning July
1, 1995 through March 26, 1996.
- Notes to Financial Statements.
(b) Pro Forma Financial Information.
COMMODORE MEDIA, INC.:
- Unaudited Pro Forma Statement of Operations for the Year
Ended December 31, 1995.
- Notes to Unaudited Pro Forma Statement of Operations for
the Year Ended December 31, 1995.
(c) Exhibits.
Exhibit
Number Exhibit Title
- - ------- -------------
23.5 Consent of Paneth Haber & Zimmerman LLP, independent
auditors.
Page 3 of 20 Pages
<PAGE> 4
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Danbury Broadcasting Inc.
We have audited the accompanying balance sheets of Danbury Broadcasting
Inc. as of June 30, 1995 and 1994, and the related statements of operations and
accumulated deficit and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Danbury Broadcasting Inc. as
of June 30, 1995 and 1994, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
PANETH, HABER & ZIMMERMAN LLP
New York, NY
August 18, 1995
Page 4 of 20 Pages
<PAGE> 5
DANBURY BROADCASTING INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30,
------------------------ MARCH 26,
1994 1995 1996
(unaudited)
<S> <C> <C> <C>
CURRENT ASSETS
Cash.................................................... $ 92,716 $ 177,627 $ 422,092
Accounts receivable, net of allowance for doubtful
accounts of $22,000 and $22,738 at June 30, 1994 and
1995, respectively................................... 621,637 700,274 129,407
Due from related party.................................. -- 12,189 43,810
Prepaid expenses........................................ 18,951 36,526 14,598
Other................................................... 7,593 10,165 9,140
---------- ---------- -----------
Total Current Assets............................ 740,897 936,781 619,047
PROPERTY AND EQUIPMENT, at cost, less accumulated
depreciation............................................ 1,508,309 1,120,583 1,002,879
INTANGIBLE ASSETS, less accumulated amortization.......... 1,064,940 1,233,912 1,071,404
OTHER ASSETS.............................................. 5,986 5,258 --
---------- ---------- -----------
$ 3,320,132 $3,296,534 $2,693,330
========== ========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Current maturities of long-term debt.................... $ 487,500 $ 225,369 $ 300,745
Advances from affiliate................................. 6,100 -- --
Accounts payable........................................ 49,243 8,842 36,352
Accrued expenses........................................ 245,486 174,021 154,600
Dividend payable........................................ 13,750 -- --
---------- ---------- -----------
Total Current Liabilities....................... 802,079 408,232 491,697
LONG-TERM DEBT, less current maturities................... 2,700,000 3,102,853 2,950,000
---------- ---------- -----------
Total Liabilities............................... 3,502,079 3,511,085 3,441,697
---------- ---------- -----------
COMMITMENTS
REDEEMABLE PREFERRED STOCK
Series A cumulative preferred, 500 shares, nonvoting,
par value $100 per share; authorized, issued and
outstanding. Liquidation preference and redemption
amount $1,000 per share plus accrued dividends....... 500,000 541,250 582,500
---------- ---------- -----------
STOCKHOLDERS' DEFICIENCY
Common stock, par value $.01 per share; authorized 1,000
shares; issued and outstanding 40 shares............. -- -- --
Accumulated deficit..................................... (681,947) (755,801) (1,330,867)
---------- ---------- -----------
Total Stockholders' Deficiency.................. (681,947) (755,801) (1,330,867)
---------- ---------- -----------
$ 3,320,132 $3,296,534 $2,693,330
========== ========== ===========
</TABLE>
See notes to financial statements.
Page 5 of 20 Pages
<PAGE> 6
DANBURY BROADCASTING INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
<TABLE>
<CAPTION>
YEAR ENDED NINE JULY 1,
JUNE 30, MONTHS 1995
--------------------------- ENDED THROUGH
1994 1995 MARCH 31, MARCH 26,
----------- ----------- 1995 1996
---------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUE
Broadcasting revenue.................. $ 3,027,281 $3,451,684 $2,566,181 $ 1,086,935
Less agency commissions............... 260,702 311,768 228,664 97,015
---------- ---------- ---------- -----------
Net Revenue................... 2,766,579 3,139,916 2,337,517 989,920
---------- ---------- ---------- -----------
EXPENSES
Programming........................... 427,896 502,299 384,488 176,639
Technical............................. 93,016 106,475 77,567 96,262
Selling............................... 826,110 865,381 659,034 413,511
General and Administrative............ 770,714 903,627 624,320 557,666
Interest Expense...................... 352,253 347,578 257,570 314,567
Depreciation.......................... 204,543 197,197 140,367 119,552
Amortization.......................... 181,916 236,213 151,332 165,915
Local marketing agreement fees........ -- -- -- (320,376)
---------- ---------- ---------- -----------
Total Expenses................ 2,856,448 3,158,770 2,294,678 1,523,736
---------- ---------- ---------- -----------
NET (LOSS) INCOME....................... (89,869) (18,854 ) 42,839 (533,816)
ACCUMULATED DEFICIT
Beginning of year (period)............ (537,078) (681,947 ) (681,947) (755,801)
Preferred stock dividends............. (55,000) (55,000 ) (41,250) (41,250)
---------- ---------- ---------- -----------
End of year (period).......... $ (681,947) $ (755,801 ) $ (680,358) $(1,330,867)
========== ========== ========== ===========
</TABLE>
See notes to financial statements.
Page 6 of 20 Pages
<PAGE> 7
DANBURY BROADCASTING INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED JULY 1,
JUNE 30, NINE MONTHS 1995
-------------------------- ENDED THROUGH
1994 1995 MARCH 31, MARCH 26,
------------ ----------- 1995 1996
----------- ---------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)...................................... $ (89,869) $ (18,854) $ 42,839 $(533,816)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization....................... 386,459 433,410 291,699 285,467
Change in:
Accounts receivable............................... (140,959) (78,637) (59,733) 570,867
Due from related party............................ -- 24,663 (45,940) (31,621)
Prepaid expenses and other current assets......... 1,139 (20,147) (23,263) 22,953
Other assets...................................... 955 (2,749) 2,864 5,258
Accounts payable.................................. (12,950) (42,801) 27,940 27,510
Accrued expenses.................................. 58,485 (71,465) (147,037) (19,421)
--------- ----------- ----------- ---------
Net Cash Provided by Operating Activities...... 203,260 223,420 89,369 327,197
--------- ----------- ----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Advances from affiliate................................ -- (6,100) (6,100) --
Purchases of property and equipment.................... (59,047) (34,521) (27,710) (5,255)
--------- ----------- ----------- ---------
Net Cash Used in Investing Activities.......... (59,047) (40,621) (33,810) (5,255)
--------- ----------- ----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Deferred financing costs............................... -- (211,110) (211,110) --
Proceeds of notes payable.............................. (62,500) 3,404,106 3,404,106 --
Repayments of notes payable............................ -- (3,263,384) (3,226,158) (77,477)
Preferred stock dividends.............................. (55,250) (27,500) (27,500) --
--------- ----------- ----------- ---------
Net Cash Used in Financing Activities.................... (117,750) (97,888) (60,662) (77,477)
--------- ----------- ----------- ---------
NET INCREASE (DECREASE) IN CASH.......................... 26,463 84,911 (5,103) 244,465
CASH
Beginning of year...................................... 66,253 92,716 92,716 177,627
--------- ----------- ----------- ---------
End of year............................................ $ 92,716 $ 177,627 $ 87,613 $ 422,092
========= =========== =========== =========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Interest Paid.......................................... $ 354,649 $ 434,894 $ 344,188 $ 262,449
Income Taxes Paid...................................... -- -- -- --
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES
Broadcast equipment acquired through trade-out
transactions........................................ $ 15,475 $ 2,400 $ 2,400 $ --
Broadcast equipment and property exchanged for
favorable tower lease (Note 12)..................... $ -- $ 190,248 $ 190,248 $ --
Unpaid accrual of redeemable preferred stock
dividends........................................... $ -- $ 41,250 $ 27,500 $ 41,250
</TABLE>
See notes to financial statements.
Page 7 of 20 Pages
<PAGE> 8
DANBURY BROADCASTING INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
1. SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Danbury Broadcasting Inc. (the "Company"), a Connecticut corporation,
operates radio stations WRKI-FM and WINE-AM in Danbury, Connecticut. Its
revenues are derived from advertisers consisting primarily of local businesses.
Credit is extended to its advertisers in the normal course of business.
Depreciation and Amortization
Depreciation of property and equipment is computed over the estimated
useful lives of the respective assets using the straight-line method. Estimated
useful lives range from 5 to 20 years. Expenditures for repairs and maintenance
are charged to operations as incurred.
Goodwill, which is included in intangible assets, represents the cost of
acquired assets in excess of values ascribed to the net identified assets and is
being amortized using the straight-line method over 40 years. Costs incurred in
obtaining long-term financing were capitalized and are included in intangible
assets. They are being amortized using the straight-line method (that does not
differ materially from the interest rate method) over the term of the related
debt.
A covenant not to compete, which restricts the seller and the previous
owner from competing with the Company in the Greater Danbury, Connecticut area
for a period of four years, is included in intangible assets. This covenant is
being amortized on a straight-line basis over its four year life.
The stations' broadcast license is being amortized using the straight-line
method over 25 years.
A favorable lease for broadcast tower rental is being amortized using the
straight-line method over its 30 year term.
Non-Monetary Transactions
Barter transactions represent the exchange of unsold advertising time for
merchandise or services. Barter transactions are reported at the estimated fair
value of the product or service received. Revenue is recognized when commercials
are broadcast and merchandise or services obtained are reported when received or
used. For merchandise or services received prior to the broadcast of the
commercial, a liability is provided; conversely, a receivable is established
when the commercial is broadcast prior to the receipt of the merchandise or
services.
Income Taxes
The Company has adopted Statement of Financial Accounting Standards 109
("SFAS 109") and recognizes deferred tax assets and liabilities for temporary
differences between amounts recorded for financial statement and tax purposes.
Reclassification
Certain prior year amounts have been reclassified to conform with current
year presentation.
2. CASH
Cash in the amount of $164,000 and $351,000 (including outstanding checks
of $38,000 and $213,000) shown on the June 30, 1994 and 1995 balance sheets
respectively, was on deposit in a commercial bank located in Fairfield,
Connecticut, of which $100,000 was insured by the FDIC.
Page 8 of 20 Pages
<PAGE> 9
DANBURY BROADCASTING INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1995
3. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<CAPTION>
JUNE 30,
-------------------------
1994 1995
<S> <C> <C>
Land........................................................ $ 209,722 $ 163,583
Building.................................................... 704,314 551,831
Equipment, furniture and fixtures........................... 958,603 980,729
Tower improvements in progress.............................. 36,851 --
---------- ----------
1,909,490 1,696,143
Less accumulated depreciation............................... 401,181 575,560
---------- ----------
$1,508,309 $1,120,583
========== ==========
</TABLE>
4. INTANGIBLE ASSETS
Intangible assets consist of the following:
<TABLE>
<CAPTION>
JUNE 30,
-------------------------
1994 1995
<S> <C> <C>
Goodwill.................................................... $ 192,421 $ 192,421
Deferred financing costs.................................... 61,815 272,925
Covenant not to compete..................................... 550,000 550,000
Stations' licenses.......................................... 618,000 618,000
Favorable lease............................................. -- 190,248
---------- ----------
1,422,236 1,823,594
Less accumulated amortization............................... 357,296 589,682
---------- ----------
$1,064,940 $1,233,912
========== ==========
</TABLE>
5. ACCRUED EXPENSES
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
JUNE 30,
-------------------------
1994 1995
<S> <C> <C>
Accrued commissions......................................... $ 89,000 $ 66,511
Accrued compensation........................................ 30,558 70,000
Accrued interest............................................ 87,656 1,889
Other items................................................. 38,272 35,621
---------- ----------
$245,486 $174,021
========== ==========
</TABLE>
Page 9 of 20 Pages
<PAGE> 10
DANBURY BROADCASTING INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1995
6. LONG TERM DEBT
<TABLE>
<CAPTION>
JUNE 30,
-------------------------
1994 1995
<S> <C> <C>
Term loan payable to United Jersey Bank (UJB) at an interest
rate of 1.5% over the bank's per annum index rate (9% at
June 30, 1995) plus principal payments escalating from
$37,500 quarterly for the year ending June 30, 1995 to
$200,000 quarterly for the period ending December 31,
1999...................................................... $ -- $2,175,000
Revolving loan payable to United Jersey Bank requiring
payment of interest only at 1.5% over the bank's per annum
index rate (9% at June 30, 1995) and payable quarterly.
Payment of the outstanding principal balance is due
December 31, 1999......................................... -- 1,150,000
Capital lease payable....................................... 3,222
Note payable to BCI Growth, L.P ("BCI") at 11% interest only
for the period from July 1, 1992 through June 30, 1993,
payable quarterly. Thereafter, interest at 11% on the
unpaid balance plus principal payments escalating from
$62,500 quarterly for the year ending June 30, 1994 to
$100,000 quarterly for the period ending March 31, 1997.
The note was paid off from the proceeds of the UJB loan.
This note was owed to the holder of the outstanding
warrants. See Note 10..................................... 3,187,500 --
---------- ----------
3,187,500 3,328,222
Less current maturities..................................... 487,500 225,369
---------- ----------
$2,700,000 $3,102,853
========== ==========
</TABLE>
The notes with UJB contain certain restrictive covenants and stipulate
various financial and operating requirements. Included, among other things, are
covenants regarding dividends, operating expenditures, capital expenditures and
debt.
Capital stock, preferred stock, all tangible and intangible assets of the
Company, and a key man life insurance policy of $1,000,000 are pledged as
collateral on the above note. Scheduled maturities of long-term debt during the
next five years ending June 30, are:
<TABLE>
<S> <C>
1996............................................................. $ 225,369
1997............................................................. 377,479
1998............................................................. 500,374
1999............................................................. 675,000
2000............................................................. 1,550,000
----------
$3,328,222
==========
</TABLE>
Page 10 of 20 Pages
<PAGE> 11
DANBURY BROADCASTING INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1995
7. BARTER TRANSACTIONS
The accompanying financial statements include the following barter
transactions:
<TABLE>
<CAPTION>
YEAR ENDED
JUNE 30,
---------------------
1994 1995
<S> <C> <C>
Barter revenue................................................. $255,908 $271,253
======== ========
Barter expenditures............................................ $241,340 $182,821
======== ========
Amounts included in accounts receivable from trade-out
transactions................................................. $ 47,005 $136,493
======== ========
</TABLE>
8. REDEEMABLE PREFERRED STOCK
The Series A cumulative preferred stock carries a liquidation preference of
$1,000 per share and a par value of $100 per share. The Company may redeem the
shares at this price, plus accrued but unpaid dividends, at any time through
June 30, 1997. At the earlier of that date, or an event of default (as defined)
the holder can require the Company to redeem the shares in full, with accrued
but unpaid dividends out of funds "legally available". An event of default
occurred during the year ended June 30, 1995 in that the Company did not pay the
full dividend. This gives the holders of the shares the right to demand
redemption.
The Series A cumulative preferred stock provides for an annual dividend of
$110 per share. Dividends of $55,000 and $13,750 were declared on the preferred
stock and paid for the years ended June 30, 1994 and 1995, respectively. At June
30, 1995, dividends in arrears amounted to $41,250 and were accrued in the
accompanying balance sheet.
9. COMMITMENTS
Operating Leases
During 1995, the Company leased space on a transmitting tower under a five
year lease renewable in five (5) year terms at the Company's option from a
related party (Note 12). Automobiles under operating leases expire in various
years through 1998.
Future minimum annual lease payments, by year and in the aggregate, under
such leases are as follows:
<TABLE>
<S> <C>
1996.............................................................. $ 38,000
1997.............................................................. 32,000
1998.............................................................. 23,000
1999.............................................................. 21,000
2000.............................................................. 9,000
--------
$123,000
========
</TABLE>
Rent expense on the above, for the years ended June 30, 1994 and 1995 was
$44,000 and $46,500, respectively.
Other Commitments
The Company also has various commitments under contracts with a rating
service, programming services, advertising displays and a software license
expiring in various years through 1998.
Page 11 of 20 Pages
<PAGE> 12
DANBURY BROADCASTING INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1995
9. COMMITMENTS--(CONTINUED)
Future annual payments by year and in the aggregate under such commitments
are as follows:
<TABLE>
<S> <C>
1996............................................................... $12,000
1997............................................................... 6,000
1998............................................................... 1,000
-------
$19,000
=======
</TABLE>
10. STOCKHOLDERS' DEFICIENCY
There is an outstanding warrant (the "warrant") issued to BCI in 1992,
giving it the right to purchase up to 80% of the Company's Common Stock for
$0.01 per share. This warrant also allows them the option to acquire 90% of the
common stock if the Company fails to achieve certain cash flow levels after June
30, 1997, as extended. No value has been assigned to this warrant which expires
June 30, 1998.
11. INCOME TAXES
The Company has a net operating loss carryforward of approximately $284,000
which can be carried forward to the years 2008 and 2009 to offset taxable income
resulting in a deferred tax asset of $118,000. Other temporary differences
resulting from differences between book and tax amortization and depreciation
result in a deferred tax asset of approximately $195,000 and $81,000 at June 30,
1994 and 1995, respectively. Total deferred tax assets of approximately $224,000
at June 30, 1994 and $199,000 at June 30, 1995 have been completely offset by a
valuation allowance. The valuation allowance increased by $69,000 during the
year ended June 30, 1994 and decreased by $25,000 during the year ended June 30,
1995.
Income tax benefit for the years ended June 30, 1994 and 1995 differs from
the expected statutory rate for the following reasons:
<TABLE>
<CAPTION>
1994 1995
<S> <C> <C>
Federal, at statutory rates.................................... $(30,500) $ (6,500)
State, net of Federal benefit.................................. (6,500) (1,500)
Nondeductible expenses......................................... 5,500 10,000
Taxable gain on asset transfer................................. -- 23,000
Change in estimate............................................. (37,500) --
--------- ----------
(69,000) 25,000
Change in deferred tax asset valuation allowance............... 69,000 (25,000)
--------- ----------
Tax provision.................................................. $ -- $ --
========= ==========
</TABLE>
12. RETIREMENT PLAN
Employees of the Company may participate in profit sharing/401(k) savings
plan and may elect to make contributions pursuant to a salary reduction
agreement upon meeting length of service and age requirements. The Company can
elect to make discretionary contributions to the profit sharing plan but has not
done so for either year. The Company has matched 20% of individual 401(k)
contributions during the year ended June 30, 1995. The Company's cost amounted
to approximately $4,500.
Page 12 of 20 Pages
<PAGE> 13
DANBURY BROADCASTING INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1995
13. RELATED PARTY TRANSACTIONS
During the year ended June 30, 1995, the Company exchanged its tower and
associated real property with a book value of $190,000 for a favorable lease
with a Partnership formed to improve and rent the tower to the Company and
others. The Partnership has committed to the financing of tower improvements
which will improve the broadcast signal. The Company's lease for placement of
its antenna on the tower at the optimal site is at below market rates. The
Company and the Partnership are related through common control. The favorable
lease has been valued at $190,000, the book value of the property exchanged.
In connection with the tower improvement project, the Company advanced
$12,189 on behalf of the Partnership.
14. SUBSEQUENT EVENT (UNAUDITED)
In March 1996, the outstanding warrants held by BCI (Note 10) were
exercised.
Page 13 of 20 Pages
<PAGE> 14
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The Unaudited Pro Forma Consolidated Statement of Operations for the twelve
months ended December 31, 1995 presents the statement of operations of
Commodore Media, Inc. (the "Company") as if the acquisitions of Danbury
Broadcasting, Inc. (the "Danbury Acquisition") and Hudson Valley Growth, L.P.
(the "Westchester Acquisition") (collectively, the "Acquisitions") had
occurred on January 1, 1995. A pro forma consolidated balance sheet as of
March 31, 1996 has not been included herein because the Acquisitions closed on
March 27, 1996 and is, therefore, reflected in the Company's financial
position as of March 31, 1996. Similarly, pro forma results of operations
for the three months ended March 31, 1996 have not been included herein
because the Company had been operating the Acquisition under a Local
Marketing Agreement since October 30, 1995 and, therefore, has included actual
results in its consolidated statement of operations for the three months
ended March 31, 1996.
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 and liabilities assumed based on
their respective fair values. The allocation of the respective purchase prices
assumed in the pro forma financial statements is preliminary. The Company 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 Company believes are reasonable under the circumstances.
The pro forma consolidated financial information should be read in conjunction
with the Company's Consolidated Financial Statements and Notes thereto, as well
as the Financial Statements and Notes thereto of Danbury Broadcasting Inc.
("Danbury"), included elsewhere in this Form 8-K/A. The pro forma statement of
operations data are not necessarily indicative of the results that would have
occurred if the Acquisitions had occurred on the date indicated, nor are they
indicative of the Company's future results of operations.
Page 14 of 20 Pages
<PAGE> 15
COMMODORE MEDIA, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED DECEMBER 31, 1995
----------------------------------------------------------------------
Commodore Westchester Danbury Pro Forma Pro Forma
Media, Inc. Acquisition Acquisition(a) Adjustments Combined
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total revenue $33,653 $ 714 $2,734 $ $37,101
Less: agency commissions (2,858) (37) (247) (3,142)
------- ----- ------ ------ -------
Net revenue 30,795 677 2,487 33,959
Station operating expenses 19,033 601 1,896 (337)(b) 21,193
Corporate expenses 2,051 0 369 12 (c) 2,063
(369)(c)
Depreciation and amortization 1,926 172 432 (141)(d) 2,389
Long-term incentive compensation 2,007 0 0 2,007
------- ----- ------ ------ -------
Operating income (loss) 5,778 (96) (210) 6,307
Interest expense, net 7,000 128 296 1,168 (e) 8,168
(424)(f)
Other expenses (income) 434 (43) (26) 365
------- ----- ------ ------ -------
Net loss before income taxes
and extraordinary item (1,656) (181) (480) (2,226)
Income taxes 140 0 0 140
------- ----- ------ -------
Net loss before extraordinary item $(1,796) $(181) $ (480) $(2,366)
======= ===== ====== =======
</TABLE>
Page 15 of 20 Pages
<PAGE> 16
NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
(a) Reflects the historical statement of operations of the Danbury
Acquisition. The Danbury operated on a June 30 fiscal year end. The
historical finncial information included in the unaudited pro forma
statement of operations, however, has been prepared on a calendar year
basis based on the unaudited quarterly financial statements of Danbury
Acquisition.
(b) Cost savings expected to be realized by combining duplicative programming,
general, administrative and sales responsibilities in markets with multiple
stations, commission reduction, facilities consolidation and reductions in
professional fees due to consolidation.
(c) Corporate and general administrative expenses have been incrementally
adjusted due to the Acquisition.
(d) To reflect reduced depreciation and amortization related to the Acquisition
due to differences from the purchase price allocation.
(e) To reflect adjustment to interest expense associated with the financing of
the Acquisition. The Company used $6.7 million of available cash and
financed the remaining $8.2 million of the purchase price with funds
obtained from AT&T Commercial Finance Corporation under a Senior Credit
Facility. Pro forma interest expense, net associated with the transaction
is as follows (dollars in thousands):
<TABLE>
<S> <C>
Incremental pro forma interest expense financed
portion of purchase price $ 799
Interest income forfeited due to available cash
used to fund purchase price 369
------
$1,168
======
</TABLE>
(f) To reflect interest on debt not assumed by the Company.
Page 16 of 20 Pages
<PAGE> 17
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.
Dated: June 7, 1996
COMMODORE MEDIA, INC.
(Registrant)
By: /s/ Bruce A. Friedman
-------------------------------------
Bruce A. Friedman
President and
Chief Executive Officer
(principal executive
officer)
By: /s/ James J. Sullivan
-------------------------------------
James J. Sullivan
Chief Financial Officer,
Treasurer and Secretary
(principal financial
and accounting officer)
Page 17 of 20 Pages
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Additional Registrants have duly caused this report to be signed on their
behalf by the undersigned hereunto duly authorized.
Dated: June 7, 1996
Commodore Media of Delaware, Inc.,
a Delaware corporation
Commodore Media of Kentucky, Inc.,
a Delaware corporation
Commodore Media of Pennsylvania, Inc.,
a Delaware corporation
Commodore Media of Norwalk, Inc.,
a Delaware corporation
Commodore Media of Florida, Inc.,
a Delaware corporation
Commodore Media of Westchester, Inc.,
a Delaware corporation
Commodore Holdings, Inc.,
a Delaware corporation
Danbury Broadcasting, Inc.,
a Connecticut corporation
By: /s/ Bruce A. Friedman
-------------------------------------
Bruce A. Friedman
President and
Chief Executive Officer
(principal executive officer)
By: /s/ James J. Sullivan
-------------------------------------
James J. Sullivan
Chief Financial Officer
(principal financial and
accounting officer)
Page 18 of 20 Pages
<PAGE> 19
Exhibit Index
-------------
Sequentially
Exhibit Numbered
Number Exhibit Title Page
- - ------- ------------- ------------
23.5 Consent of Paneth Haber & Zimmerman LLP,
independent auditors.
Page 19 of 20 Pages
<PAGE> 1
EXHIBIT 23.5
Page 20 of 20 Pages
<PAGE> 2
[PANETH, HABER & ZIMMERMAN LLP LETTERHEAD]
CONSENT OF PANETH, HABER & ZIMMERMAN LLP, INDEPENDENT AUDITORS
We hereby consent to the use in this Form 8K of our report dated August 18,
1995, relating to the financial statements of Danbury Broadcasting, Inc.
/s/ PANETH, HABER & ZIMMERMAN LLP
New York, NY
June 6, 1996
