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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): FEBRUARY 20, 1997
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COMMODORE MEDIA, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 33-92732 13-3034720
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification Number)
500 FIFTH AVENUE
SUITE 3000 10110
NEW YORK, NEW YORK (Zip code)
(Address of principal
executive offices)
</TABLE>
Registrant's telephone number, including area code: (212) 302-2727
NOT APPLICABLE
(former address if changed since last report)
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TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
PRIMARY STANDARD
STATE OR OTHER INDUSTRIAL I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION IDENTIFICATION
NAME INCORPORATION NUMBER NUMBER
---- --------------- ---------------- ---------------
<S> <C> <C> <C>
Commodore Media of Delaware, Inc. Delaware 4832 51-0286804
Commodore Media of Kentucky, Inc. Delaware 4832 61-0997863
Commodore Media of Pennsylvania, Inc. Delaware 4832 23-2207457
Commodore Media of Norwalk, Inc. Delaware 4832 06-1277523
Commodore Media of Florida, Inc. Delaware 4832 59-2813110
Commodore Media of Westchester, Inc. Delaware 4832 13-3356485
Atlantic Star Communications, Inc.
(formerly named Commodore Holdings, Inc.) Delaware 4832 13-3858506
Capstar Acquisition Company, Inc. Delaware 4832 74-2819327
Danbury Broadcasting, Inc. Connecticut 4832 13-3653113
Southern Star Communications, Inc.
(formerly named Osborn Communications Delaware 4832 06-1142367
Corporation)
Asheville Broadcasting Corp. Delaware 4832 56-1859801
Atlantic City Broadcasting Corp. Delaware 4832 22-3274908
Beatrice Broadcasting Corp. Delaware 4832 06-1142368
Breadbasket Broadcasting Corporation Delaware 4832 06-1443379
Corkscrew Broadcasting Corporation Delaware 4832 65-0466131
Currey Broadcasting Corporation Delaware 4832 13-3358952
Daytona Beach Broadcasting Corp. Delaware 4832 59-3223390
Great American East, Inc. North Carolina 4832 56-1580032
Houndstooth Broadcasting Corporation Delaware 4832 06-1469230
Jamboree in the Hills, Inc. Delaware 4832 55-0709712
Ladner Communications Holding Corp. Delaware 4832 13-3465060
Mountain Radio Corporation Delaware 4832 13-3401043
Music Hall Club, Inc. West Virginia 4832 55-0699199
Nelson Broadcasting Corporation Delaware 4832 13-3358975
O.C.C., Inc. Delaware 4832 13-3449243
Orange Communications, Inc. Delaware 4832 13-3387461
Osborn Entertainment Enterprises Corporation Delaware 4832 13-3465115
Osborn Sound & Communications Corp. Delaware 4832 34-1501274
RKZ Television, Inc. Delaware 4832 58-1740585
Rainbow Broadcasting Corporation Delaware 4832 63-1110166
Short Broadcasting Corporation Delaware 4832 31-1255866
SNG Holdings, Inc. Delaware 4832 13-3702089
Southeast Radio Holding Corp. Delaware 4832 06-1422492
Waite Broadcasting Corp. Delaware 4832 06-1142386
Yellow Brick Radio Corporation Delaware 4832 13-3401042
Ameron Broadcasting Corporation Delaware 4832 74-2818962
WNOK Acquisition Company, Inc. Delaware 4832 74-2818961
</TABLE>
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information (the "Pro
Forma Financial Information") is based on the historical financial statements
of Commodore Media, Inc. ("Commodore") and Southern Star Communications, Inc.
(formerly named Osborn Communications Corporation ("Osborn")) and have been
prepared to illustrate the effects of Commodore's acquisition of Osborn (the
"Osborn Acquisition") and the related financing thereof. The Pro Forma
Financial Information and accompanying notes should be read in conjunction with
the financial statements of Commodore and Osborn.
The pro forma condensed statement of operations for the year ended
December 31, 1996 gives effect to the Osborn Acquisition and the related
financing as if each such transaction had occurred on January 1, 1996. The pro
forma balance sheet as of December 31, 1996 has been prepared as if the
acquisitions and the financing thereof had occurred on that date. The 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.
The Osborn Acquisition was accounted for using the purchase method of
accounting. The total purchase costs of the acquisitions will be allocated to
the tangible and intangible assets and liabilities acquired based upon their
respective fair values. The allocation of the aggregate purchase price
reflected in the Pro Forma Financial Information is preliminary. The final
allocation of the purchase price is contingent upon management's final
estimates of the fair value of the acquired assets; however, such allocation is
not expected to differ materially from the preliminary allocation.
As used in the Pro Forma Financial Information, "JSA" refers to a
joint sales agreement, whereby a station licensee obtains, for a fee, the right
to sell substantially all of the commercial advertising on a separately-owned
and licensed station. JSAs take varying forms. A JSA, unlike an LMA (as
defined), normally does not involve programming. "LMA" refers to a local
marketing agreement, whereby a radio station outsources the management of
certain limited functions of its operations. LMAs take varying forms; however,
the FCC requires that, in all cases, the licensee maintain independent control
over the programming and operations of the station.
2
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COMMODORE MEDIA, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL
COMMODORE OSBORN ADJUSTMENTS PRO FORMA
--------- ------ ----------- ---------
<S> <C> <C> <C> <C>
Net revenue . . . . . . . . . . . . . . . $ 42,260 $37,215 $ 2,355 (A) $81,057
(773)(B)
Operating expenses:
Station operating expenses . . . . . . 27,575 28,824 2,284 (A) 58,270
(413)(B)
Depreciation and amortization . . . . . 3,193 4,756 585 (C) 8,534
Corporate expenses . . . . . . . . . . 2,134 1,850 -- 3,984
Other expenses . . . . . . . . . . . . 13,834 -- -- 13,834
-------- ------- ------- -------
Operating income (loss) . . . . . . . (4,476) 1,785 (874) (3,565)
Other income (expense)
Interest (income) expense . . . . . . . 11,475 2,202 (3,911)(D) 9,766
Gain on sale of assets . . . . . . . . -- 12,322 -- 12,322
Other (income) expense . . . . . . . . 1,824 291 -- 2,115
-------- ------- ------- -------
Income (loss) before provision for
income taxes . . . . . . . . . . . (17,775) 11,614 3,037 (3,124)
Provision (benefit) for income taxes . . 133 2,378 (3,761)(E) (1,250)
-------- ------- ------- -------
Net income (loss) . . . . . . . . . . . . $(17,908) $ 9,236 $ 6,798 $(1,874)
======== ======= ======= =======
</TABLE>
See Accompanying Notes to Pro Forma Information.
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COMMODORE MEDIA, INC.
UNAUDITED PRO FORMA BALANCE SHEET
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL
COMMODORE OSBORN ADJUSTMENTS PRO FORMA
--------- ------ ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . $ 4,368 $ 2,944 $ 16,802 (F) $ 24,114
Accounts receivable, net . . . . . . . 8,913 5,505 -- 14,418
Prepaid expenses and other . . . . . . 444 2,114 -- 2,558
------- ------- -------- --------
Total current assets . . . . . . . . 13,725 10,563 16,802 41,090
Property and equipment, net . . . . . . . 14,263 13,712 10,923 (G) 38,898
Intangible and other assets, net . . . . 67,077 33,180 90,874 (G) 190,330
(801)(H)
------- ------- -------- --------
Total assets . . . . . . . . . . . . $95,065 $57,455 $117,798 $270,318
======= ======= ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued
expenses . . . . . . . . . . . . . . $ 3,658 $ 6,783 $ -- $ 10,441
Current portion of long-term debt . . . 3,750 320 (4,070)(I) --
------- ------- -------- --------
Total current liabilities . . . . . 7,408 7,103 (4,070) 10,441
Long-term debt, less current portion . . 90,737 13,880 (34,830)(I) 69,787
Other long-term liabilities . . . . . . . 1,750 4,562 31,404 (G) 38,916
1,200 (G)
------- ------- -------- --------
Total liabilities . . . . . . . . . 99,895 25,545 (6,296) 119,144
Stockholders' equity (deficit) . . . . . (4,830) 31,910 (31,910)(J) 151,174
157,400 (J)
(1,396)(H)
------- ------- -------- --------
Total liabilities and
stockholders' equity . . . . . . . $95,065 $57,455 $117,798 $270,318
======= ======= ======== ========
</TABLE>
See Accompanying Notes to Pro Forma Information.
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NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
(A) The adjustment gives effect to the historical operating results and
LMA and JSA revenue and expense of the acquisitions in the following
markets which were consummated by Commodore during the pro forma
period: Ft. Pierce -- Vero Beach -- Stuart, Florida; Huntington,
West Virginia -- Ashland, Kentucky; and Stamford -- Norwalk,
Connecticut.
(B) The adjustment gives effect to the historical operating results and
LMA and JSA revenue and expense of the acquisitions in Wheeling, West
Virginia which were consummated by Osborn during the pro forma period.
The adjustment also gives effect to the historical operating results
and LMA and JSA revenue and expense of the dispositions in the
following markets which were consummated by Osborn during the pro
forma period: Jacksonville, Florida; Syracuse, New York; Atlantic
City, New Jersey; Daytona Beach, Florida; Raleigh, North Carolina; and
Fresno, California.
(C) The adjustment reflects (i) a change in depreciation and amortization
resulting from conforming the estimated useful lives of the acquired
stations and (ii) the additional depreciation and amortization expense
resulting from the allocation of the purchase price of the acquired
stations including an increase in property and equipment and
intangible assets to their estimated fair market value and the
recording of goodwill associated with the acquisitions. Goodwill and
FCC licenses are being amortized over 40 years.
(D) The adjustment reflects interest expense associated with (i)
Commodore's 13 1/4% Senior Subordinated Notes due 2003 (the "Commodore
Notes"), (ii) the amortization of deferred financing fees associated
with the Commodore Notes and (iii) elimination of interest expense on
Commodore's senior secured credit facility (the "AT&T Facility") made
available by AT&T Commercial Finance Corporation to Atlantic Star
Communications, Inc. (formerly named Commodore Holdings, Inc.), a
wholly-owned subsidiary of Commodore, and the outstanding debt of
Osborn under Osborn's revolving loan facility made available by
KeyBank National Association (the "Osborn Facility"), both repaid in
connection with the Osborn Acquisition. Deferred financing fees are
amortized over the term of the related debt.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
-----------------
<S> <C>
Interest expense before amortization of deferred financing fees . . . $ 9,247
Amortization of deferred financing fees . . . . . . . . . . . . . . . 519
--------
Pro forma interest expense . . . . . . . . . . . . . . . . 9,766
Historical interest expense of Commodore . . . . . . . . . . . . . . . (11,475)
Historical interest expense of Osborn . . . . . . . . . . . . . . . . (2,202)
--------
Net adjustment . . . . . . . . . . . . . . . . . . . . . . $ (3,911)
========
</TABLE>
(E) The adjustment gives effect to the effective tax rate.
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NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION (CONTINUED)
(DOLLARS IN THOUSANDS)
(F) The adjustment reflects the excess cash generated in connection with
the Osborn Acquisition and the financing thereof which will be used
for prospective working capital requirements and in connection with
certain pending transactions.
(G) The adjustment reflects (i) the assumption of $1,200 in liabilities in
connection with the Osborn Acquisition and (ii) the allocation of the
purchase price of Osborn to the assets acquired and liabilities
assumed resulting in an adjustment to property and equipment to their
estimated fair values and the recording of intangible assets
associated with the acquisitions as follows:
<TABLE>
<CAPTION>
ALLOCATION OF
PURCHASE CARRYING
PRICE VALUE ADJUSTMENTS
----- ----- -----------
<S> <C> <C> <C>
Cash and cash equivalents . . . . . . . . . . . . $ 2,944 $ 2,944 $ --
Accounts receivable, net . . . . . . . . . . . . 5,505 5,505 --
Prepaid expenses and other . . . . . . . . . . . 2,114 2,114 --
Property and equipment, net . . . . . . . . . . . 24,635 13,712 10,923
Intangible and other assets, net. . . . . . . . . 124,054 33,180 90,874
Accounts payable and other accrued expenses . . . (6,783) (6,783) --
Other long-term liabilities . . . . . . . . . . . (1,501) (1,501) --
Deferred tax liability . . . . . . . . . . . . . (34,465) (3,061) (31,404)
--------
Total purchase price and deferred
financing charges . . . . . . . . . $116,503
========
</TABLE>
(H) The adjustment reflects the elimination of the deferred financing
costs associated with the AT&T Facility which was repaid in connection
with the Osborn Acquisition. The write off of these costs, in
addition to the pre-payment penalty costs of $595, was recognized
as an extraordinary loss in the first quarter of 1997.
(I) The adjustment reflects the repayment in connection with the Osborn
Acquisition of (i) the AT&T Facility of $24,700 and (ii) the repayment
of the Osborn Facility in the amount of $14,200 (including principal
and interest).
(J) Adjustment reflects (i) the elimination of the stockholders' equity of
Osborn through purchase accounting and (ii) the contribution of
$157,400 from Capstar Broadcasting Partners, Inc. to effect the Osborn
Acquisition, the repayment of Commodore's credit facility and the
repayment of the historical debt of Osborn.
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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.
COMMODORE MEDIA, INC.
(Registrant)
By: /s/ William S. Banowsky, Jr.
-----------------------------------
Name: William S. Banowsky, Jr.
Title: Vice President
Date: April 30, 1997
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.
Commodore Media of Delaware, Inc.
Commodore Media of Kentucky, Inc.
Commodore Media of Pennsylvania, Inc.
Commodore Media of Norwalk, Inc.
Commodore Media of Florida, Inc.
Commodore Media of Westchester, Inc.
Atlantic Star Communications, Inc.
Danbury Broadcasting, Inc.
Capstar Acquisition Company, Inc.
Southern Star Communications, Inc.
Asheville Broadcasting Corp.
Atlantic City Broadcasting Corp.
Beatrice Broadcasting Corp.
Breadbasket Broadcasting Corporation
Corkscrew Broadcasting Corporation
Currey Broadcasting Corporation
Daytona Beach Broadcasting Corp.
Great American East, Inc.
Houndstooth Broadcasting Corporation
Jamboree in the Hills, Inc.
Ladner Communications Holding Corp.
Mountain Radio Corporation
Nelson Broadcasting Corporation
O.C.C., Inc.
Orange Communications, Inc.
<PAGE> 9
Osborn Entertainment Enterprises
Corporation
Osborn Sound & Communications Corp.
RKZ Television, Inc.
Rainbow Broadcasting Corporation
Short Broadcasting Corporation
SNG Holdings, Inc.
Southeast Radio Holding Corp.
Waite Broadcasting Corp.
Yellow Brick Radio Corporation
Ameron Broadcasting Corporation
WNOK Acquisition Company, Inc.
By: /s/ William S. Banowsky Jr.
-----------------------------------
Name: William S. Banowsky, Jr.
Title: Vice President
Date: April 30, 1997
Music Hall Club, Inc.
By: /s/ Larry Anderson
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Name: Larry Anderson
Title: President
Date: April 30, 1997
