<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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.
For the transition period from__________ to __________
Commission File Number 33-95042
--------
PEGASUS MEDIA & COMMUNICATIONS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-2778525
------------------------------ ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
c/o Pegasus Communications Management Company
5 Radnor Corporate Center; Suite 454, Radnor, PA 19087
- - ------------------------------------------------ ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (610) 341-1801
--------------
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___
Number of shares of each class of the registrant's common stock outstanding as
of July 31, 1997:
Class A, Common Stock, $0.01 par value 161,500
Class B, Common Stock, $0.01 par value 8,500
<PAGE>
PEGASUS MEDIA & COMMUNICATIONS, INC.
Form 10-Q
Table of Contents
For the Quarterly Period Ended June 30, 1997
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information
Item 1 Consolidated Financial Statements
Consolidated Balance Sheets
December 31, 1996 and June 30, 1997 3
Consolidated Statements of Operations
Three months ended June 30, 1996 and 1997 4
Consolidated Statements of Operations
Six months ended June 30, 1996 and 1997 5
Consolidated Statements of Cash Flows
Six months ended June 30, 1996 and 1997 6
Notes to Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 16
Item 3 Quantitative and Qualitative Disclosures About
Market Risk 21
Part II. Other Information
Item 6 Exhibits and Reports on Form 8-K 22
Signature 23
</TABLE>
<PAGE>
Pegasus Media & Communications, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
------------- -------------
ASSETS (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 8,416,778 $ 11,701,020
Accounts receivable, less allowance for doubtful
accounts of $243,000 and $285,000, respectively 6,030,697 7,311,365
Program rights 1,289,437 1,821,246
Inventory 697,957 648,654
Deferred taxes 1,290,397 1,290,397
Prepaid expenses and other 717,664 430,719
------------- -------------
Total current assets 18,442,930 23,203,401
Property and equipment, net 23,823,489 24,951,547
Intangible assets, net 82,500,306 80,135,572
Program rights 1,294,985 1,947,621
Deposits and other 166,498 199,404
------------- -------------
Total assets $ 126,228,208 $ 130,437,545
============= =============
LIABILITIES AND EQUITY
Current liabilities:
Notes payable $ 48,610
Current portion of long-term debt 306,975 $ 3,344,475
Accounts payable 6,111,411 3,550,806
Accrued interest 5,592,083 5,770,521
Accrued expenses 5,303,652 9,996,218
Current portion of program rights payable 601,205 1,102,232
------------- -------------
Total current liabilities 17,963,936 23,764,252
Long-term debt, net 115,155,610 82,620,087
Program rights payable 1,365,284 1,542,102
Deferred taxes 1,339,859 1,389,859
------------- -------------
Total liabilities 135,824,689 109,316,300
Commitments and contingent liabilities -- --
Total equity (deficiency):
Class A common stock 1,615 1,615
Class B common stock 85 85
Additional paid-in capital 7,880,848 38,368,348
Accumulated deficit (17,479,029) (17,248,803)
------------- -------------
Total equity (deficiency) (9,596,481) 21,121,245
------------- -------------
Total liabilities and equity (deficiency) $ 126,228,208 $ 130,437,545
============= =============
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
Pegasus Media & Communications, Inc.
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------------------
1996 1997
------------- -------------
(unaudited)
<S> <C> <C>
Revenues:
Broadcasting revenue,
net of agency commissions $ 5,440,496 $ 6,168,318
Barter programming revenue 1,407,692 1,603,500
Basic and satellite service 3,246,409 5,077,085
Premium services 494,298 561,427
Other 136,185 182,473
------------ ------------
Total revenues 10,725,080 13,592,803
------------ ------------
Operating expenses:
Barter programming expense 1,407,692 1,603,500
Programming 2,000,278 2,633,038
General and administrative 1,239,578 1,638,171
Technical and operations 818,275 915,181
Marketing and selling 1,330,367 1,791,368
Incentive compensation 168,881 215,963
Corporate expenses 643,059 346,731
Depreciation and amortization 2,505,274 2,981,125
------------ ------------
Income from operations 611,676 1,467,726
Interest expense (2,665,222) (2,867,451)
Interest income 50,236 37,856
Other expenses, net (36,466) (168,745)
------------ ------------
Loss before income taxes (2,039,776) (1,530,614)
Provision for income taxes 36,706 50,000
------------ ------------
Net loss ($ 2,076,482) ($ 1,580,614)
============ ============
Loss per share:
Net loss ($ 12.21) ($ 9.30)
============ ============
Weighted average shares outstanding 170,000 170,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
Pegasus Media & Communications, Inc.
Consolidated Statements of Operations
<TABLE>
<CAPTION>
Six Months Ended June 30,
-----------------------------------------
1996 1997
------------ -------------
(unaudited)
<S> <C> <C>
Revenues:
Broadcasting revenue,
net of agency commissions $ 9,326,825 $ 11,445,422
Barter programming revenue 2,482,357 3,054,300
Basic and satellite service 6,111,267 9,844,557
Premium services 947,948 1,126,899
Other 257,644 395,957
------------ ------------
Total revenues 19,126,041 25,867,135
------------ ------------
Operating expenses:
Barter programming expense 2,482,357 3,054,300
Programming 3,664,245 5,057,612
General and administrative 2,497,190 3,444,402
Technical and operations 1,623,690 1,881,976
Marketing and selling 2,374,617 3,241,793
Incentive compensation 289,765 470,838
Corporate expenses 1,095,935 722,985
Depreciation and amortization 4,851,435 6,162,027
------------ ------------
Income from operations 246,807 1,831,202
Interest expense (5,560,705) (6,020,415)
Interest income 151,487 81,993
Other expenses, net (61,541) (63,874)
Gain on sale of cable system -- 4,451,320
------------ ------------
Income (loss) before income taxes (5,223,952) 280,226
Provision (benefit) for income taxes (132,756) 50,000
------------ ------------
Net income (loss) ($ 5,091,196) $ 230,226
============ ============
Income (loss) per share:
Net income (loss) ($ 29.95) $ 1.35
============ ============
Weighted average shares outstanding 170,000 170,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE>
Pegasus Media & Communications, Inc.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------------
1996 1997
------------ -------------
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ($ 5,091,196) $ 230,226
Adjustments to reconcile net income (loss)
to net cash provided (used) by operating activities:
Depreciation and amortization 4,851,435 6,162,027
Program rights amortization 760,929 781,125
Accretion on discount of bonds 195,926 196,872
Gain on sale of cable system -- (4,451,320)
Bad debt expense 130,713 188,387
Deferred income taxes (132,756) 50,000
Change in assets and liabilities:
Accounts receivable (1,804,412) (1,427,055)
Inventory 640,504 49,303
Prepaid expenses and other (137,346) 286,945
Accounts payable and accrued expenses (978,574) 2,089,961
Accrued interest 138,755 178,438
Deposits and other (64,231) (32,906)
------------ ------------
Net cash provided (used) by operating activities (1,490,253) 4,302,003
Cash flows from investing activities:
Acquisitions (17,107,329) --
Capital expenditures (2,728,232) (5,097,948)
Purchase of intangible assets (573,239) (2,192,207)
Payments of programming rights (607,085) (1,287,725)
Proceeds from sale of cable system -- 6,945,270
Other (157,500) --
------------ ------------
Net cash used for investing activities (21,173,385) (1,632,610)
------------ ------------
Cash flows from financing activities:
Proceeds from long-term debt 247,736 --
Repayments of long-term debt (37,283) (110,768)
Borrowings on revolving credit facilities 8,800,000 526,250
Repayments of revolving credit facilities -- (30,126,250)
Contributions by parent -- 30,487,500
Restricted cash 5,012,084 --
Capital lease repayments (158,597) (161,883)
------------ ------------
Net cash provided by financing activities 13,863,940 614,849
Net increase (decrease) in cash and cash equivalents (8,799,698) 3,284,242
Cash and cash equivalents, beginning of year 11,966,567 8,416,778
------------ ------------
Cash and cash equivalents, end of period $ 3,166,869 $ 11,701,020
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
6
<PAGE>
PEGASUS MEDIA & COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The Company:
Pegasus Media & Communications, Inc. ("Pegasus" or together
with its subsidiaries stated below, the "Company"), is a diversified media and
communications company whose subsidiaries consist of Pegasus Broadcast
Television, Inc. ("PBT"), Pegasus Cable Television, Inc. ("PCT"), Pegasus
Broadcast Associates, L.P. ("PBA"), Pegasus Satellite Television, Inc. ("PST"),
MCT Cablevision, L.P. ("MCT") and Pegasus Cable Television of San German, Inc.
("PST-SG"). PBT operates broadcast television ("TV") stations affiliated with
the Fox Broadcasting Company ("Fox") and United Paramount Network ("UPN")
television networks. PCT, together with its subsidiaries, Pegasus Cable
Television of Connecticut, Inc. ("PCT-CT"), MCT and PCT-SG, operate cable
television ("Cable") systems that provide service to individual and commercial
subscribers in New England and Puerto Rico. PBA holds a television station
license which simulcasts programming from a station operated by PBT. On July 9,
1997, the Company transferred the stock of PST, which provides direct broadcast
satellite ("DBS") services to customers in the New England area, to a newly
formed subsidiary of the Company, PST Holdings, Inc. ("PSTH"), and PSTH
transferred the PST stock to Pegasus Satellite Holdings, Inc. ("PSH"), a
subsidiary of Pegasus Communications Corporation ("PCC"), the Company's parent
(the "PST/PSH Exchange"). In exchange, PSTH received $27.8 million of preferred
equity in PSH. PSH is a DBS holding company whose subsidiaries provide DBS
services to customers in certain rural areas, which, pro forma for the PST/PSH
Exchange, encompass portions of twenty-two states (as of June 30, 1997). An
independent appraisal was performed to ascertain the fair market value of PST.
Prior to October 8, 1996 the Company was a direct subsidiary of Pegasus
Communications Holdings, Inc. ("PCH"). Effective October 8, 1996 the Company
became a direct subsidiary of PCC as a result of PCC's initial public offering
(the "Initial Public Offering") of its Class A Common Stock. On December 30,
1996, as a result of a registered exchange offer made to holders of Pegasus'
Class B Common Stock, Pegasus became a wholly-owned subsidiary of PCC.
2. Summary of Significant Accounting Policies:
Basis of Presentation:
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. The financial statements include
the accounts of Pegasus and all of its subsidiaries. All intercompany
transactions and balances have been eliminated.
The unaudited consolidated financial statements reflect all adjustments
consisting of normal recurring items which are, in the opinion of management,
necessary for a fair presentation, in all material respects, of the financial
position of the Company and the results of its operations and its cash flows for
the interim period.
Use of Estimates in the Preparation of Financial Statements:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingencies. Actual results could differ
from those estimates. Significant estimates relate to barter transactions and
the useful lives and recoverability of intangible assets.
Inventories:
Inventories consist of equipment held for resale to customers and
installation supplies. Inventories are stated at the lower of cost or market on
a first-in, first-out basis.
7
<PAGE>
PEGASUS MEDIA & COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
2. Summary of Significant Accounting Policies (continued):
Revenue:
The Company operates in two industry segments: multichannel television
(DBS and Cable) and broadcast television (TV). The Company recognizes revenue in
its multichannel operations when video and audio services are provided. The
Company recognizes revenue in its broadcast operations when advertising spots
are broadcast.
Programming:
The Company obtains a portion of its TV programming, including presold
advertisements, through its network affiliation agreements with Fox and also
through independent producers. The Company does not make any direct payments for
this programming. For running network programming, the Company receives payments
from Fox. For running independent producers' programming, the Company receives
no direct payments. Instead, the Company retains a portion of the available
advertisement spots to sell on its own account. Barter programming revenue and
the related expense are recognized when the presold advertisements are
broadcast. These amounts are presented gross as barter programming revenue and
expense in the accompanying consolidated statements of operations.
Advertising Costs:
Advertising costs are charged to operations in the period incurred.
Cash and Cash Equivalents:
Cash and cash equivalents include highly liquid investments purchased
with an initial maturity of three months or less. The Company has cash balances
in excess of the federally insured limits at various banks.
Concentration of Credit Risk:
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade receivables.
Concentrations of credit risk with respect to trade receivables are limited due
to the large number of customers comprising the Company's customer base, and
their dispersion across different businesses and geographic regions.
Reclassifications:
Certain amounts from the prior periods have been reclassified to
conform to the statement presentation for the current period.
3. Common Stock:
On December 30, 1996, the Company, through a registered exchange offer,
exchanged all of the Pegasus Class B Common Stock for 191,775 shares in the
aggregate of PCC's Class A Common Stock.
Under the terms of the Series B Notes, Pegasus' ability to pay
dividends on the Company's common stock is subject to certain restrictions.
8
<PAGE>
PEGASUS MEDIA & COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
3. Common Stock (continued):
At December 31, 1996 and June 30, 1997 common stock consists of the
following:
Pegasus Class A common stock, $0.01 par value;
230,000 shares authorized; 161,500 issued and
outstanding........................................ $1,615
Pegasus Class B common stock, $0.01 par value;
20,000 shares authorized; 8,500 issued and
outstanding ....................................... 85
------
Total common stock............................... $1,700
======
4. Long-Term Debt:
<TABLE>
<CAPTION>
Long-term debt consists of the following:
December 31, June 30,
1996 1997
-------------- ------------
<S> <C> <C>
Series B Notes payable by Pegasus, due
2005, interest at 12.5%, payable
semi-annually in arrears on January
1 and July 1, net of unamortized
discount of $3,412,222 and $3,215,350
as of December 31, 1996 and June
30, 1997, respectively........................... $81,587,778 $81,784,650
Senior-seven year revolving credit facility,
interest at the Company's option at
either the banks prime rate, plus an
applicable margin or LIBOR, plus an
applicable margin................................ 29,600,000 -
Mortgage payable, due 2000, interest at 8.75%........ 498,468 488,292
Note payable, due 1998, interest at 10.0%............ 3,050,000 3,050,000
Capital leases and other............................. 726,339 641,620
------------- ------------
115,462,585 85,964,562
Less current maturities.............................. 306,975 3,344,475
------------- ------------
Long-term debt....................................... $115,155,610 $82,620,087
============= ============
</TABLE>
In July 1995, the Company sold 85,000 units consisting of $85.0 million
in aggregate of 12 1/2% Series A Senior Subordinated Notes due 2005 (the "Series
A Notes" and, together with the Series B Notes, the "Notes") and 8,500 shares of
the Company's Class B Common Stock (the "Note Offering"). The Class B Common
Stock was subsequently exchanged for PCC Class A Common Stock (see Note 3). In
November 1995, the Company exchanged its Series A Notes for the Series B Notes.
The Series B Notes have substantially the same terms and provisions as the
Series A Notes. The Series B Notes are guaranteed on a full, unconditional,
senior subordinated basis, jointly and severally by a majority of the wholly
owned direct and indirect subsidiaries of Pegasus. The Company's indebtedness
contains certain financial and operating covenants, including restrictions on
the Company to incur additional indebtedness, create liens and to pay dividends.
In August 1996, the Company entered into a $50.0 million seven-year
senior revolving credit facility (the "Credit Facility"), which is
collateralized by substantially all of the Company's assets. Outstanding
balances under the Credit Facility were repaid by PCC, the Company's parent. The
Credit Facility is subject to certain financial covenants as defined in the loan
agreement, including a debt to adjusted cash flow covenant.
9
<PAGE>
PEGASUS MEDIA & COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
5. Commitments and Contingent Liabilities:
Legal Matters:
From time to time the Company is involved with claims that arise in the
normal course of business. In the opinion of management, the ultimate liability
with respect to these claims will not have a material adverse effect on the
consolidated operations, cash flows or financial position of the Company.
6. Disposition:
Effective January 31, 1997, the Company sold substantially all the
assets of its New Hampshire cable system to State Cable TV Corporation for
approximately $6.9 million in cash, net of certain selling costs. The Company
recognized a gain on the transaction of approximately $4.5 million.
The following unaudited summary, prepared on a pro forma basis,
combines the results of operations as if the above cable system had been sold as
of the beginning of the periods presented, after including the impact of certain
adjustments, such as the Company's reduced commission rate, payments to related
parties, amortization of intangibles, interest expense and related income tax
effects. The pro forma information does not purport to be indicative of what
would have occurred had the disposition been made on those dates or of results
which may occur in the future.
Six Months Ended June 30,
(in thousands, except earnings per share) (unaudited)
-----------
1996 1997
------- -------
Net revenues ................................. $23,105 $26,022
======= =======
Operating income.............................. $10 $1,769
======= =======
Net income (loss)............................. ($877) $168
======= =======
Net income (loss) per share................... ($5.16) $0.99
======= =======
7. Other Events:
On January 27, 1997, PCC, the Company's parent, completed a unit
offering (the "Unit Offering") in which it sold 100,000 shares of its 12 3/4%
Series A Cumulative Exchangeable Preferred Stock and Warrants to purchase
193,600 shares of its Class A Common Stock at an exercise price of $15 per
share, to the public at a price of $1,000 per unit. A portion of the proceeds
from the Unit Offering were used to repay all outstanding indebtedness under the
Credit Facility as indicated in Note 4.
On August 1, 1997, Pegasus launched TV station WPME, which is
affiliated with UPN. WPME is in the Portland, ME Designated Market Area ("DMA")
and is being operated under a local marketing agreement ("LMA"). WPME's offices,
studio and transmission facilities are co-located with WPXT, a TV station in the
Portland market the Company has owned and operated since January 1996.
10
<PAGE>
PEGASUS MEDIA & COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
8. Other Information (unaudited):
As defined in the indenture governing the Series B Notes (the
"Indenture"), the Company is required to provide Adjusted Operating Cash Flow
data for Pegasus and its Restricted Subsidiaries, on a consolidated basis, where
Adjusted Operating Cash Flow is defined as, "for the four most recent fiscal
quarters for which internal financial statements are available, Operating Cash
Flow of such Person and its Restricted Subsidiaries less DBS Cash Flow
(Satellite Segment Operating Cash Flow) for the most recent four-quarter period
plus DBS Cash Flow for the most recent quarterly period, multiplied by four."
Operating Cash Flow is income from operations before income taxes, depreciation
and amortization, interest expense, extraordinary items and non-cash management
fees and incentive compensation. Restricted Subsidiaries carries the same
meaning as in the Indenture. Pro forma for the disposition of the New Hampshire
cable system, as if such disposition had occurred on July 1, 1996, Adjusted
Operating Cash Flow would have been approximately $18.8 million.
Four Quarters
Ended
(in thousands) June 30, 1997
-------------------
Net revenues $52,938
Direct operating expenses, excluding incentive
compensation and management fees 33,816
----------
Income from operations before incentive
compensation, management fees and
depreciation and amortization 19,122
Allowable cash portion of incentive
compensation and management fees 1,673
----------
Operating cash flow 17,449
Less DBS cash flow, last four quarters (596)
Plus DBS cash flow, last quarter annualized 2,004
==========
Adjusted operating cash flow $18,857
==========
9. Subsidiary Guarantees (unaudited):
The Series B Notes are guaranteed on a full, unconditional, senior
subordinated basis, jointly and severally by each of the wholly-owned direct and
indirect subsidiaries of Pegasus with the exception of certain subsidiaries as
described below (the "Guarantor Subsidiaries"). PSTH, WTLH License Corp., WTLH,
Inc., Pegasus Anasco Holdings, Inc. and PCT-CT, subsidiaries of Pegasus, are not
guarantors of the Series B Notes ("Non-guarantor Subsidiaries"). As the result
of these subsidiaries not being guarantors of the Series B Notes, the following
condensed combining financial statements have been provided. The Company
believes separate financial statements and other disclosures concerning the
Guarantor Subsidiaries are not deemed material to investors.
11
<PAGE>
PEGASUS MEDIA & COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)
9. Subsidiary Guarantees (unaudited - continued):
Condensed Consolidated Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
Guarantor Non-guarantor
As of June 30, 1997 Subsidiaries Subsidiaries Pegasus Eliminations Totals
------------ ------------ ------- ------------ ------
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents $ 4,470 $ 1,581 $ 5,650 $ 11,701
Accounts receivable, net 7,314 (3) 7,311
Other current assets 4,132 59 4,191
--------- --------- --------- --------- ---------
Total current assets 15,916 1,637 5,650 23,203
Property and equipment, net 22,348 2,604 24,952
Intangible assets, net 72,339 3,333 4,464 80,136
Other assets 2,081 66 2,147
Investment in subsidiaries and affiliates 87,907 ($ 87,907) 0
--------- --------- --------- --------- ---------
Total assets $ 112,684 $ 7,574 $ 98,087 ($ 87,907) $ 130,438
========= ========= ========= ========= =========
Liabilities and total equity:
Current portion of long-term debt $ 239 $ 3,105 $ 3,344
Accounts payable 2,607 944 3,551
Other current liabilities 16,336 533 ($ 12,743) $ 12,743 16,869
--------- --------- --------- --------- ---------
Total current liabilities 19,182 4,582 (12,743) 12,743 23,764
Long-term debt 97,056 4,429 81,785 (100,650) 82,620
Other liabilities 2,057 307 569 2,933
--------- --------- --------- --------- ---------
Total liabilities 118,295 9,318 69,611 (87,907) 109,317
Total equity (deficit) (5,611) (1,744) 28,476 21,121
--------- --------- --------- --------- ---------
Total liabilities and equity $ 112,684 $ 7,574 $ 98,087 ($ 87,907) $ 130,438
========= ========= ========= ========= =========
As of December 31, 1996
Assets:
Cash and cash equivalents $ 6,171 $ 807 $ 1,439 $ 8,417
Restricted cash
Accounts receivable, net 6,036 (5) 6,031
Other current assets 3,673 639 ($ 317) 3,995
--------- --------- --------- --------- ---------
Total current assets 15,880 1,441 1,439 (317) 18,443
Property and equipment, net 21,293 2,530 23,823
Intangible assets, net 75,463 3,176 3,861 82,500
Other assets 1,462 1,462
Investment in subsidiaries and affiliates 68,297 (68,297) 0
--------- --------- --------- --------- ---------
Total assets $ 114,098 $ 7,147 $ 73,597 ($ 68,614) $ 126,228
========= ========= ========= ========= =========
Liabilities and total equity:
Current portion of long-term debt $ 224 $ 83 $ 307
Accounts payable 5,681 598 $ 149 ($ 317) 6,111
Other current liabilities 11,128 369 (8,769) 8,818 11,546
--------- --------- --------- --------- ---------
Total current liabilities 17,033 1,050 (8,620) 8,501 17,964
Long-term debt 103,018 7,665 81,588 (77,115) 115,156
Other liabilities 2,237 307 161 2,705
--------- --------- --------- --------- ---------
Total liabilities 122,288 9,022 73,129 (68,614) 135,825
Total equity (deficit) (8,190) (1,875) 468 (9,597)
--------- --------- --------- --------- ---------
Total liabilities and equity $ 114,098 $ 7,147 $ 73,597 ($ 68,614) $ 126,228
========= ========= ========= ========= =========
</TABLE>
12
<PAGE>
PEGASUS MEDIA & COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)
9. Subsidiary Guarantees (unaudited - continued):
Condensed Consolidated Statements of Operations
For the Six Months ended June 30, 1997
(in thousands)
<TABLE>
<CAPTION>
Guarantor Non-guarantor
Subsidiaries Subsidiaries Pegasus Eliminations Totals
------------ ------------ ------- ------------ ------
<S> <C> <C> <C> <C>
Total revenue $ 24,402 $ 1,515 ($ 50) $ 25,867
Total operating expenses 22,501 1,380 $ 205 (50) 24,036
-------- -------- -------- -------- --------
Income (loss) from operations 1,901 135 (205) 1,831
Interest expense 8,705 157 2,263 (5,105) 6,020
Other (4,481) 12 (4,469)
-------- -------- -------- -------- --------
Income (loss) before income
taxes (2,323) (22) (2,480) 5,105 280
Provision for income taxes 50 50
-------- -------- -------- -------- --------
Net income (loss) ($ 2,373) ($ 22) ($ 2,480) $ 5,105 $ 230
======== ======== ======== ======== ========
</TABLE>
Condensed Consolidated Statements of Operations
For the Six Months ended June 30, 1996
(in thousands)
<TABLE>
<CAPTION>
Guarantor Non-guarantor
Subsidiaries Subsidiaries Pegasus Eliminations Totals
------------ ------------ ------- ------------ ------
<S> <C> <C> <C> <C>
Total revenue $ 17,776 $ 1,400 ($ 50) $ 19,126
Total operating expenses 17,504 1,235 $ 190 (50) 18,879
-------- -------- -------- -------- --------
Income (loss) from operations 272 165 (190) 247
Interest expense 4,660 224 5,495 (4,818) 5,561
Other 14 (104) (90)
-------- -------- -------- -------- --------
Income (loss) before income
taxes (4,402) (59) (5,581) 4,818 (5,224)
Provision for income taxes (133) (133)
-------- -------- -------- -------- --------
Net income (loss) ($ 4,269) ($ 59) ($ 5,581) $ 4,818 ($ 5,091)
======== ======== ======== ======== ========
</TABLE>
13
<PAGE>
PEGASUS MEDIA & COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)
9. Subsidiary Guarantees (unaudited - continued):
Condensed Consolidated Statements of Cash Flows
For the Six Months ended June 30, 1997
(in thousands)
<TABLE>
<CAPTION>
Guarantor Non-guarantor
Subsidiaries Subsidiaries Pegasus Eliminations Totals
------------ ------------ ------- ------------ ------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) ($ 2,373) ($ 22) ($ 2,480) $ 5,105 $ 230
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 5,464 493 205 6,162
Program rights amortization 781 781
Change in assets and liabilities:
Accounts receivable (1,377) (50) (1,427)
Accounts payable and accrued expenses 6,962 510 (149) (5,055) 2,268
Prepaids and other (258) 578 (66) 254
Other (11,475) 7,509 (3,966)
------- ----- ------ -------- -------
Net cash provided (used) by operating activities (2,276) 1,559 5,019 4,302
Cash flows from investing activities:
Capital expenditures (4,698) (400) (5,098)
Purchase of intangible assets (1,213) (171) (808) (2,192)
Other 5,657 5,657
------- ----- ------ -------- -------
Net cash provided (used) by investing activities (254) (571) (808) (1,633)
Cash flows from financing activities:
Proceeds from debt 526 526
Repayment of debt (59) (214) (30,126) (30,399)
Other 888 29,600 30,488
------- ----- ------ -------- -------
Net cash provided (used) by financing activities 829 (214) 615
Net increase (decrease) in cash and cash equivalents (1,701) 774 4,211 3,284
Cash and cash equivalents, beginning of year 6,171 807 1,439 8,417
------- ----- ------ -------- -------
Cash and cash equivalents, end of period $ 4,470 $ 1,581 $ 5,650 $ 11,701
======== ======== ======== ======== =======
</TABLE>
14
<PAGE>
PEGASUS MEDIA & COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)
9. Subsidiary Guarantees (unaudited - continued):
Condensed Consolidated Statements of Cash Flows
For the Six Months ended June 30, 1996
(in thousands)
<TABLE>
<CAPTION>
Guarantor Non-guarantor
Subsidiaries Subsidiaries Pegasus Eliminations Totals
------------ ------------ ------- ------------ ------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) ($ 4,269) ($ 59) ($ 5,581) $ 4,818 ($ 5,091)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 4,337 324 190 4,851
Program rights amortization 761 761
Change in assets and liabilities:
Accounts receivable (1,818) 14 (1,804)
Accounts payable and accrued expenses 5,747 64 (55) (6,735) (979)
Prepaids and other (113) (31) 7 (137)
Other 909 909
-------- -------- -------- -------- --------
Net cash provided (used) by operating activities 5,554 312 (5,439) (1,917) (1,490)
Cash flows from investing activities:
Capital expenditures (2,237) (491) (2,728)
Purchase of intangible assets (544) (7) (22) (573)
Other (17,715) (158) (17,873)
-------- -------- -------- -------- --------
Net cash used by investing activities (20,496) (498) (180) (21,174)
Cash flows from financing activities:
Proceeds from debt 9,022 26 9,048
Repayment of debt (180) (16) (196)
Other (2,762) (211) 6,068 1,917 5,012
-------- -------- -------- -------- --------
Net cash provided (used) by financing activities 6,080 (201) 6,068 1,917 13,864
Net increase in cash (8,862) (387) 449 (8,800)
Cash and cash equivalents, beginning of year 11,316 651 11,967
-------- -------- -------- -------- --------
Cash and cash equivalents, end of period $ 2,454 $ 264 $ 449 $ 3,167
======== ======== ======== ======== ========
</TABLE>
15
<PAGE>
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
This Report contains certain forward-looking statements (as such term
is defined in the Private Securities Litigation Reform Act of 1995) and
information relating to the Company that are based on the beliefs of the
management of the Company, as well as assumptions made by and information
currently available to the Company's management. When used in this Report, the
words "estimate," "project," "believe," "anticipate," "intend," "expect" and
similar expressions are intended to identify forward-looking statements. Such
statements reflect the current views of the Company with respect to future
events and are subject to risks and uncertainties that could cause actual
results to differ materially from those contemplated in such forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as the date hereof. The Company
does not undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
General
The Company is a diversified media and communications company operating
in two business segments: multichannel television and broadcast television.
Pegasus Multichannel Television includes DBS and cable businesses. DBS
operations consist of providing DIRECTV(R) ("DIRECTV") services in certain rural
areas of New England (Connecticut, Massachusetts, New Hampshire and New York) in
which the Company holds the exclusive right to provide such services. On July 9,
1997, the Company transferred the stock of PST, which held all of the Company's
DBS operations, to a newly formed subsidiary of the Company, PSTH, and PSTH
transferred the PST stock to PSH. In exchange, PSTH received $27.8 million of
preferred equity in PSH. Its cable operations consist of systems in New England
(Connecticut and Massachusetts) and Puerto Rico. The Company sold its New
Hampshire cable system effective January 31, 1997. Pegasus Broadcast Television
owns and operates five TV stations affiliated with FOX and one affiliated with
UPN. It has entered into agreements to operate two additional TV stations which
will be affiliated with either UPN or the Warner Brothers ("WB") television
networks. One of these stations is in a market in which the Company currently
owns and operates a TV station and is to commence operations in 1998. The other
station is to commence operations in 1997.
Multichannel revenues are derived from monthly customer subscriptions,
pay-per-view services, subscriber equipment rentals, home shopping commissions,
advertising time sales and installation charges. Broadcast revenues are derived
from the sale of broadcast air time to local and national advertisers.
The Company's location operating expenses consist of (i) programming
expenses, (ii) marketing and selling costs, including advertising and promotion
expenses, local sales commissions, and ratings and research expenditures, (iii)
technical and operations costs, and (iv) general and administrative expenses.
Multichannel programming expenses consist of amounts paid to program suppliers,
DSS authorization charges and satellite control fees, each of which is paid on a
per subscriber basis, and DIRECTV royalties which are equal to 5% of DBS program
service revenues. Broadcast programming expenses include the amortization of
long-term program rights purchases, music license costs and "barter" programming
expenses which represent the value of broadcast air time provided to television
program suppliers in lieu of cash.
Location Cash Flow is defined as net revenues less location operating
expenses. Although Location Cash Flow is not a measure of performance under
generally accepted accounting principles, the Company believes that Location
Cash Flow is accepted within the Company's business segments as a generally
recognized measure of performance and is used by analysts who report publicly on
the performance of companies operating in such segments. Nevertheless, this
measure should not be considered in isolation or as a substitute for income from
operations, net income, net cash provided by operating activities or any other
measure for determining the Company's operating performance or liquidity which
is calculated in accordance with generally accepted accounting principles.
16
<PAGE>
Results of Operations
Three months ended June 30, 1997 compared to three months ended June 30, 1996
The Company's net revenues increased by approximately $2.9 million or
27% for the three months ended June 30, 1997 as compared to the same period in
1996. Multichannel Television net revenues increased $1.9 million or 51% and
Broadcast Television net revenues increased $937,000 or 14%. The net revenues
increased as a result of (i) a $742,000 or 82% increase in DBS revenues mainly
due to increased revenue per subscriber and the increased number of DBS
subscribers, (ii) a $1.2 million or 41% increase in Cable revenues which was the
net result of a $157,000 or 6% increase in same system revenues due primarily to
rate increases and new combined service packages, a $1.4 million increase due to
the system acquired effective September 1, 1996 and a $417,000 reduction due to
the sale of the Company's New Hampshire cable system effective January 31, 1997,
and (iii) a $937,000 or 14% increase in TV revenues of which $714,000 or 76% was
due to ratings growth which the Company was able to convert into higher revenues
and $223,000 or 24% was the result of acquisitions made in the first quarter of
1996.
The Company's total location operating expenses increased by
approximately $1.8 million or 26% for the three months ended June 30, 1997 as
compared to the same period in 1996. Multichannel Television location operating
expenses increased $1.3 million or 58% and Broadcast Television location
operating expenses increased $510,000 or 11%. The location operating expenses
increased as a result of (i) a $575,000 or 84% increase in operating expenses
generated by the Company's DBS operations due to a same territory increase in
programming costs of $320,000 and increases in other operating costs totaling
$255,000, all generated from the increased number of DBS subscribers, (ii) a
$700,000 or 46% increase in Cable operating expenses as the net result of a
$61,000 or 5% increase in same system direct operating expenses due primarily to
increases in programming costs associated with the new combined service
packages, a $869,000 increase attributable to the system acquired effective
September 1, 1996 and a $230,000 reduction due to the sale of the Company's New
Hampshire cable system effective January 31, 1997 and (iii) a $510,000 or 11%
increase in TV operating expenses as the result of a $232,000 or 8% increase in
same station direct operating expenses and a $278,000 increase attributable to
stations acquired in the first quarter of 1996.
As a result of these factors, Location Cash Flow increased by $1.1
million or 28% for the three months ended June 30, 1997 as compared to the same
period in 1996. Multichannel Television Location Cash Flow increased $655,000 or
41% and Broadcast Television Location Cash Flow increased $427,000 or 18%.
Location Cash Flow increased as a result of (i) a $167,000 or 75% increase in
DBS Location Cash Flow, (ii) a $489,000 or 35% increase in Cable Location Cash
Flow which was the net result of a $96,000 or 8% increase in same system
Location Cash Flow, a $580,000 increase due to the system acquired effective
September 1, 1996 and a $187,000 reduction due to the sale of the Company's New
Hampshire cable system effective January 31, 1997, and (iii) a $427,000 or 18%
increase in TV Location Cash Flow which was the net result of a $482,000
increase in same station Location Cash Flow and a $55,000 decrease attributable
to stations acquired in the first quarter of 1996.
Incentive compensation, which is calculated from increases in Pro forma
Location Cash Flow, increased by approximately $47,000 or 28% for the three
months ended June 30, 1997 as compared to the same period in 1996.
Corporate expenses decreased by $296,000 or 46% for the three months
ended June 30, 1997 as compared to the same period in 1996.
Depreciation and amortization expense increased by approximately
$476,000 or 19% for the three months ended June 30, 1997 as compared to the same
period in 1996 as the Company increased its fixed and intangible assets as a
result of three completed acquisitions during 1996.
17
<PAGE>
As a result of these factors, income from operations increased
approximately $855,000 or 140% for the three months ended June 30, 1997 as
compared to the same period in 1996.
Interest expense increased by approximately $201,000 or 8% for the
three months ended June 30, 1997 as compared to the same period in 1996 as a
result of an increase in debt associated with the Company's acquisitions.
The Company reported a net loss of $1.6 million for the three months
ended June 30, 1997 as compared to a net loss of approximately $2.1 million for
the same period in 1996. The $495,000 change was the net result of an increase
in income from operations of approximately $855,000, an increase in interest
expense of $201,000, an increase in the provision for income taxes of $14,000
and an increase in other expenses of approximately $145,000.
Six months ended June 30, 1997 compared to six months ended June 30, 1996
The Company's net revenues increased by approximately $6.7 million or
35% for the six months ended June 30, 1997 as compared to the same period in
1996. Multichannel Television net revenues increased $4.0 million or 56% and
Broadcast Television net revenues increased $2.7 million or 23%. The net
revenues increased as a result of (i) a $1.5 million or 98% increase in DBS
revenues mainly due to increased revenue per subscriber and the increased number
of DBS subscribers, (ii) a $2.5 million or 45% increase in Cable revenues which
was the net result of a $302,000 or 6% increase in same system revenues due
primarily to rate increases and new combined service packages, a $2.9 million
increase due to the system acquired effective September 1, 1996 and a $651,000
reduction due to the sale of the Company's New Hampshire cable system effective
January 31, 1997, and (iii) a $2.7 million or 23% increase in TV revenues of
which $1.4 million or 52% was due to ratings growth which the Company was able
to convert into higher revenues and $1.3 million or 48% was the result of
acquisitions made in the first quarter of 1996.
The Company's total location operating expenses increased by
approximately $4.0 million or 32% for the six months ended June 30, 1997 as
compared to the same period in 1996. Multichannel Television location operating
expenses increased $2.6 million or 60% and Broadcast Television location
operating expenses increased $1.4 million or 17%. The location operating
expenses increased as a result of (i) a $1.3 million or 106% increase in
operating expenses generated by the Company's DBS operations due to a same
territory increase in programming costs of $659,000 and increases in other
operating costs totaling $677,000, all generated from the increased number of
DBS subscribers, (ii) a $1.3 million or 41% increase in Cable operating expenses
as the net result of a $94,000 or 4% increase in same system direct operating
expenses due primarily to increases in programming costs associated with the new
combined service packages, a $1.6 million increase attributable to the system
acquired effective September 1, 1996 and a $368,000 reduction due to the sale of
the Company's New Hampshire cable system effective January 31, 1997, and (iii) a
$1.4 million or 17% increase in TV operating expenses as the result of a
$301,000 or 5% increase in same station direct operating expenses and a $1.1
million increase attributable to stations acquired in the first quarter of 1996.
18
<PAGE>
As a result of these factors, Location Cash Flow increased by $2.7
million or 42% for the six months ended June 30, 1997 as compared to the same
period in 1996. Multichannel Television Location Cash Flow increased $1.4
million or 50% and Broadcast Television Location Cash Flow increased $1.3
million or 35%. Location Cash Flow increased as a result of (i) a $194,000 or
63% increase in DBS Location Cash Flow, (ii) a $1.2 million or 48% increase in
Cable Location Cash Flow which was the net result of a $208,000 or 9% increase
in same system Location Cash Flow, a $1.3 million increase due to the system
acquired effective September 1, 1996 and a $283,000 reduction due to the sale of
the Company's New Hampshire cable system effective January 31, 1997, and (iii) a
$1.3 million or 35% increase in TV Location Cash Flow of which $1.1 million or
86% was due to an increase in same station Location Cash Flow and $185,000 or
14% was due to an increase attributable to stations acquired in the first
quarter of 1996.
Incentive compensation, which is calculated from increases in Pro forma
Location Cash Flow, increased by approximately $181,000 or 62% for the six
months ended June 30, 1997 as compared to the same period in 1996.
Corporate expenses decreased by $373,000 or 34% for the six months
ended June 30, 1997 as compared to the same period in 1996.
Depreciation and amortization expense increased by approximately $1.3
million or 27% for the six months ended June 30, 1997 as compared to the same
period in 1996 as the Company increased its fixed and intangible assets as a
result of three completed acquisitions during 1996.
As a result of these factors, income from operations increased
approximately $1.6 million or 641% for the six months ended June 30, 1997 as
compared to the same period in 1996.
Interest expense increased by approximately $459,000 or 8% for the six
months ended June 30, 1997 as compared to the same period in 1996 as a result of
an increase in debt associated with the Company's acquisitions.
The Company reported net income of $230,000 for the six months ended
June 30, 1997 as compared to a net loss of approximately $5.1 million for the
same period in 1996. The $5.3 million change was the net result of an increase
in income from operations of approximately $1.6 million, an increase in interest
expense of $459,000, an increase in the provision for income taxes of $183,000,
an increase in other expenses of approximately $72,000 and a gain on the sale of
the New Hampshire cable system of approximately $4.5 million.
Liquidity and Capital Resources
The Company's primary sources of liquidity have been the net cash
provided by its TV and cable operations and credit available under its credit
facilities. The Company's principal uses of its cash have been to fund
acquisitions, to meet its debt service obligations, to fund investments in its
TV and cable technical facilities and fund investments in multichannel customer
premises equipment.
During the six months ended June 30, 1997, net cash provided by
operating activities was approximately $4.3 million, which together with $8.4
million of cash on hand, $6.9 million of net proceeds from the sale of the New
Hampshire cable system and $615,000 of net cash provided by the Company's
financing activities was used to fund other investing activities of
approximately $8.6 million. Investing activities, net of the proceeds from the
sale of the New Hampshire cable system, consisted of (i) broadcast television
transmitter, tower and facility constructions and upgrades totaling
approximately $4.1 million, (ii) the interconnection and expansion of the Puerto
Rico cable systems amounting to approximately $651,000, (iii) DBS subscriber
acquisition costs, which are being amortized over a twelve-month period, of
$701,000, (iv) payments of programming rights amounting to $1.3 million, and (v)
maintenance and other capital expenditures and intangibles totaling
approximately $1.8 million. As of June 30, 1997, the Company's cash on hand
approximated $11.7 million.
19
<PAGE>
The Company believes that it has adequate resources to meet its working
capital, maintenance capital expenditure and debt service obligations. The
Company believes that cash on hand together with available borrowings under the
Credit Facility and future indebtedness which may be incurred by the Company and
its subsidiaries will give the Company the ability to fund acquisitions and
other capital requirements in the future. However, there can be no assurance
that the future cash flows of the Company will be sufficient to meet all of the
Company's obligations and commitments.
The Company closely monitors conditions in the capital markets to
identify opportunities for the effective and prudent use of financial leverage.
In financing its future expansion and acquisition requirements, the Company
would expect to avail itself of such opportunities and thereby increase its
indebtedness which could result in increased debt service requirements. There
can be no assurance that such debt financing can be completed on terms
satisfactory to the Company or at all. The Company may also issue additional
equity to fund its future expansion and acquisition requirements.
Capital Expenditures
The Company's capital expenditures aggregated $6.2 million in 1996. The
Company expects recurring renewal and refurbishment capital expenditures to
total approximately $2.0 million per year. In addition to these maintenance
capital expenditures, the Company's 1997 capital projects include (i) DBS
expenditures of approximately $230 per new subscriber, for the first half of the
year, prior to the disposition of the Company's DBS operations in the PST/PSH
exchange, (ii) cable expenditures of approximately $1.0 million for the
completion of the interconnection of the Puerto Rico cable systems and fiber
upgrades in Puerto Rico and New England, and (iii) approximately $6.5 million to
$7.5 million of TV expenditures for broadcast television transmitter, tower and
facility constructions and upgrades. The Company launched a new TV station,
WPME, on August 1, 1997 and its plans are to commence operations of two
additional stations, one in 1997 and the other in 1998. For the six month period
ended June 30, 1997, the Company incurred $5.1 million in capital expenditures.
There can be no assurance that the Company's capital expenditure plans will not
change in the future.
Other
Under the terms of the Indenture, PM&C is prohibited from paying
dividends prior to July 1, 1998. The payment of dividends subsequent to July 1,
1998 will be subject to the satisfaction of certain financial conditions set
forth in the Indenture, and will also be subject to lender consent under the
terms of the Credit Facility.
The Company's ability to incur additional indebtedness is limited under
the terms of the Indenture and the Credit Facility. These limitations take the
form of certain leverage ratios and are dependent upon certain measures of
operating profitability. Under the terms of the Credit Facility, capital
expenditures and business acquisitions that do not meet certain criteria will
require lender consent.
The Company's revenues vary throughout the year. As is typical in the
broadcast television industry, the Company's first quarter generally produces
the lowest revenues for the year, and the fourth quarter generally produces the
highest revenues for the year. The Company's operating results in any period may
be affected by the incurrence of advertising and promotion expenses that do not
necessarily produce commensurate revenues in the short-term until the impact of
such advertising and promotion is realized in future periods.
The Company believes that inflation has not been a material factor
affecting the Company's business. In general, the Company's revenues and
expenses are impacted to the same extent by inflation. Substantially all of the
Company's indebtedness bear interest at a fixed rate.
The Company has reviewed the provisions of Statements of Financial
Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," and SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and the
implementation of the above standards did not have any impact on the Company.
20
<PAGE>
In March 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings Per Share." This Statement establishes standards for computing
and presenting earnings per share ("EPS") and applies to entities with publicly
held common stock or potential common stock. This Statement is effective for
financial statements issued for periods ending after December 15, 1997, earlier
application is not permitted. This Statement requires restatement of all
prior-period EPS data presented. The Company is currently evaluating the impact,
if any, adoption of SFAS No. 128 will have on its financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
21
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
There were no Current Reports on Form 8-K filed during the quarter
ended June 30, 1997.
22
<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.
Pegasus Media & Communications, Inc.
Date August 13, 1997 By /s/ Robert N. Verdecchio
- - -------------------- ---------------------------
Robert N. Verdecchio
Senior Vice President and Chief Financial Officer
(Principal Accounting and Financial Officer)
23
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
<CASH> 11,701,020 11,701,020
<SECURITIES> 0 0
<RECEIVABLES> 7,596,365 7,596,365
<ALLOWANCES> 285,000 285,000
<INVENTORY> 648,654 648,654
<CURRENT-ASSETS> 23,203,401 23,203,401
<PP&E> 46,122,116 46,122,116
<DEPRECIATION> 21,170,569 21,170,569
<TOTAL-ASSETS> 130,437,545 130,437,545
<CURRENT-LIABILITIES> 23,764,252 23,764,252
<BONDS> 81,784,650 81,784,650
0 0
0 0
<COMMON> 1,700 1,700
<OTHER-SE> 21,119,545 21,119,545
<TOTAL-LIABILITY-AND-EQUITY> 130,437,545 130,437,545
<SALES> 13,592,803 25,867,135
<TOTAL-REVENUES> 13,592,803 25,867,135
<CGS> 0 0
<TOTAL-COSTS> 12,125,077 24,035,933
<OTHER-EXPENSES> 130,889 (4,469,439)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 2,867,451 6,020,415
<INCOME-PRETAX> (1,530,614) 280,226
<INCOME-TAX> 50,000 50,000
<INCOME-CONTINUING> (1,580,614) 230,226
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,580,614) 230,226
<EPS-PRIMARY> (9.30) 1.35
<EPS-DILUTED> (9.30) 1.35
</TABLE>
