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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
| Date of Report (Date of earliest event reported) | August 12, 2003 | |
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GRAY TELEVISION, INC.
(Exact Name of Registrant as Specified in its Charter)
| Georgia | 0-13796 | 58-0285030 | |||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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| 4370 Peachtree Road, Atlanta, Georgia | 30319 | ||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||
| Registrant’s telephone number, including area code | (404) 504-9828 | |
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| SIGNATURES | ||||||||
| EXHIBIT INDEX | ||||||||
| EX-99.1 PRESS RELEASE DATED 8/12/03 | ||||||||
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
| 99.1 Press Release of Gray Television, Inc. issued August 12, 2003. |
Item 12. Results of Operations and Financial Condition
The information set forth under this Item 12 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
On August 12, 2003, Gray Television, Inc. issued a press release reporting its financial results for the second quarter ended June 30, 2003. A copy of the press release is hereby attached as Exhibit 99.1 and incorporated herein by reference.
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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 hereunto duly authorized.
| GRAY TELEVISION, INC. | ||||
| (Registrant) | ||||
| Dated: August 12, 2003 | By: | /s/ James C. Ryan James C. Ryan, Senior Vice President and Chief Financial Officer |
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EXHIBIT INDEX
| 99.1 | Press Release of Gray Television, Inc. issued August 12, 2003. |
EXHIBIT 99.1 GRAY Television, Inc. - -------------------------------------------------------------------------------- NEWS RELEASE GRAY REPORTS OPERATING RESULTS FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2003 ATLANTA, GEORGIA - AUGUST 12, 2003 . . . GRAY TELEVISION, INC. (THE "COMPANY") (NYSE: GTN) today announced its results for the three months ("second quarter") and six months ("first half") ended June 30, 2003. The operating results for the second quarter of 2003 were within the guidance ranges previously issued by the Company. The Company's reported results for 2003 reflect the impact of the acquisition of Stations Holding Company, Inc., on October 25 2002, comprising 15 network affiliated television stations serving 13 television markets and the acquisition on December 18, 2002 of KOLO-TV, the ABC affiliate serving Reno, Nevada. Both acquisitions are collectively referred to as the "2002 Acquisitions". The Company has also provided information on its operating results on a "pro forma" basis which gives effect to the 2002 Acquisitions as if they had occurred on January 1, 2002 (see Note 1). SECOND QUARTER OF 2003 COMPARED TO THE SECOND QUARTER OF 2002 Revenues. Total revenues for the three months ended June 30, 2003 increased 80% to $76.6 million as compared to the corresponding period of the prior year primarily reflecting the impact of the 2002 Acquisitions. Broadcasting revenues increased 115% to $63.6 million. The stations acquired in 2002 had revenue of $33.6 million in the second quarter of 2003. For the television stations that were owned continuously for the quarters ended June 30, 2003 and 2002, total revenue increased 1% while political revenue decreased $525,000. On a pro forma basis, total broadcasting revenues increased 2% from the pro forma results of the second quarter of 2002. Broadcasting local and national revenues increased 5% and 7% respectively from the pro forma results of 2002 while political advertising revenue decreased $1.3 million from the pro forma results for the second quarter of 2002. Operating expenses. Operating expenses increased 78% to $54.3 million primarily reflecting the impact of the 2002 Acquisitions. Broadcasting expenses, before depreciation and amortization, increased 117% to $35.7 million. The stations acquired in 2002 had broadcast expense of $19.0 million in the second quarter of 2003. For the television stations that were owned continuously for the quarters ended June 30, 2003 and 2002, broadcast expenses increased only 1% from the prior period. On a pro forma basis, broadcasting operating expenses before depreciation and amortization of $35.7 million were consistent with the pro forma results of the prior year. 4370 Peachtree Road, NE * Atlanta, GA 30319 (404) 504-9828 * Fax (404) 261-9607
SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2002 Revenues. Total revenues for the six months ended June 30, 2003 increased 76% to $141.6 million as compared to the same period of the prior year primarily reflecting the impact of the 2002 Acquisitions. Broadcasting revenues increased 111% to $116.2 million. The stations acquired in 2002 had revenue of $61.0 million in the first half of 2003. For the television stations that were owned continuously for the six month periods ended June 30, 2003 and 2002, total revenue was consistent between the periods while political revenue decreased $924,000. The Company earned approximately $411,000 of broadcast revenues from advertising associated with telecasts of the 2002 Winter Olympics during the first six months of 2002 while there was no similar event broadcast during 2003. On a pro forma basis total broadcasting revenues increased 1% to $116.2 million from the pro forma results for the first half of 2002. Broadcasting local and national revenue increased 3% and 4% respectively from the pro forma results of 2002 while political advertising revenue decreased $1.5 million from the pro forma results for the first six months of 2002. The Company earned approximately $2.2 million of pro forma broadcast revenues from advertising associated with telecasts of the 2002 Winter Olympics during the first six months of 2002 while there was no similar event broadcast during 2003. Operating expenses. Operating expenses increased 80% to $107.6 million primarily reflecting the impact of the 2002 Acquisitions. Broadcasting expenses, before depreciation and amortization, increased 121% to $70.6 million. The stations acquired in 2002 had broadcast expense of $37.5 million in the first six months of 2003. For the television stations that were owned continuously for the six month periods ended June 30, 2003 and 2002, broadcast expenses increased 4%. On a pro forma basis broadcasting operating expenses before depreciation and amortization increased 1%, to $70.6 million, from the pro forma results for the first half of 2002. BALANCE SHEET Total debt outstanding at June 30, 2003 was $656.4 million compared to $658.2 million at December 31, 2002. The Company's cash balance was $14.8 million at June 30, 2003 compared to $12.9 million at December 31, 2002 Gray Television, Inc. Earnings Release for the Three Months and Six Months Ended June 30, 2003 Page 2 of 7
GUIDANCE FOR THE THIRD QUARTER OF 2003 The Company currently anticipates that its results of operations for the three months ended September 30, 2003 will approximate the ranges presented in the table below. THREE MONTHS ENDED Dollars in Millions SEPTEMBER 30, 2003 ESTIMATED RANGE LOW HIGH ---------- ---------- OPERATING REVENUES Broadcasting (less agency commissions) $ 59.0 $ 60.0 Publishing 10.8 11.1 Paging 1.9 2.1 ---------- ---------- TOTAL OPERATING REVENUES 71.7 73.2 ---------- ---------- OPERATING EXPENSES Operating expenses before depreciation and amortization Broadcasting (less agency commissions) 35.8 36.0 Publishing 8.0 8.1 Paging 1.4 1.5 Corporate 1.3 1.5 Depreciation and amortization 6.9 7.1 ---------- ---------- TOTAL OPERATING EXPENSES 53.4 54.2 ---------- ---------- OPERATING INCOME $ 18.3 $ 19.0 ========== ========== FOR INFORMATION CONTACT: BOB PRATHER JIM RYAN PRESIDENT AND CHIEF OPERATING OFFICER SENIOR V. P. AND CHIEF FINANCIAL OFFICER (404) 266-8333 (404) 504-9828 WEB SITE: www.graytvinc.com CONFERENCE CALL INFORMATION Gray Television, Inc. will host a conference call to discuss its second quarter operating results on Tuesday August 12, 2003. The call will begin at 11:00 a.m. Eastern Time. The live dial-in number is (877) 888-4605. The call will be webcast live and available for replay at www.graytvinc.com. The taped replay of the conference call will be available at (866) 518-1010 until August 19, 2003. THE COMPANY Gray Television, Inc. is a communications company headquartered in Atlanta, Georgia, and currently owns 29 television stations serving 25 television markets. The stations include 15 CBS affiliates, seven NBC affiliates and seven ABC affiliates. Gray Television, Inc. has 22 stations ranked #1 in local news audience and 22 stations ranked #1 in overall audience within their respective markets based on the results of the Nielsen November 2002 ratings reports. The TV station group reaches approximately 5.3% of total U.S. TV households. The Company also owns four daily newspapers, three in Georgia and one in Indiana. Gray Television, Inc. Earnings Release for the Three Months and Six Months Ended June 30, 2003 Page 3 of 7
GRAY TELEVISION, INC. (IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES) AS REPORTED(1) PRO FORMA(1) THREE MONTHS ENDED THREE MONTHS ENDED SELECTED UNAUDITED OPERATING DATA: JUNE 30, JUNE 30, ----------------------------------- --------------------- % % 2003 2002 CHANGE 2002 CHANGE ---------- ---------- -------- ---------- --------- OPERATING REVENUES Broadcasting (less agency commissions) $ 63,551 $ 29,553 115% $ 62,293 2% Publishing 11,143 11,073 1% 11,073 1% Paging 1,953 2,074 (6)% 2,074 (6)% ---------- ---------- ---------- TOTAL OPERATING REVENUES 76,647 42,700 80% 75,440 2% ---------- ---------- ---------- OPERATING EXPENSES Operating expenses before depreciation and amortization Broadcasting 35,744 16,494 117% 35,844 (0)% Publishing 7,933 7,769 2% 7,769 2% Paging 1,381 1,371 1% 1,371 1% Corporate and administrative 2,107 1,116 89% 1,972 7% Depreciation and amortization 7,117 3,700 92% 5,562 28% ---------- ---------- ---------- TOTAL OPERATING EXPENSES 54,282 30,450 78% 52,518 3% ---------- ---------- ---------- Operating income 22,365 12,250 83% 22,922 (2)% Miscellaneous income, net 51 59 (14)% 59 (14)% Appreciation in value of derivatives, net -0- 341 (100)% 341 (100)% Interest expense (10,972) (7,901) 39% (12,367) (11)% ---------- ---------- ---------- INCOME BEFORE INCOME TAXES 11,444 4,749 141% 10,955 4% Income tax expense 4,412 1,662 165% 4,020 10% ---------- ---------- ---------- NET INCOME 7,032 3,087 128% 6,935 1% Preferred dividends 821 649 27% 649 27% Preferred dividends associated with the redemption of preferred stock -0- 3,969 (100)% 3,969 (100)% ---------- ---------- ---------- NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 6,211 $ (1,531) NA $ 2,317 168% ========== ========== ========== DILUTED PER SHARE INFORMATION: Net income (loss) per share available to common stockholders $ 0.12 $ (0.10) NA $ 0.05 165% ========== ========== ========== Weighted average shares outstanding 50,697 15,676 223% 50,176 1% ========== ========== ========== OTHER SELECTED DATA POLITICAL REVENUE $ 1,552 $ 1,428 9% $ 2,885 (46)% SELECTED BALANCE SHEET DATA: JUNE 30, DEC. 31, 2003 2002 ---------- ---------- Cash and cash equivalents $ 14,769 $ 12,915 Total Debt (2) 656,435 658,220 Total debt net of cash 641,666 645,305 Gray Television, Inc. Earnings Release for the Three Months and Six Months Ended June 30, 2003 Page 4 of 7
GRAY TELEVISION, INC. (IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES) AS REPORTED(1) PRO FORMA(1) SIX MONTHS ENDED SIX MONTHS ENDED SELECTED UNAUDITED OPERATING DATA: JUNE 30, JUNE 30, ----------------------------------- ---------------------- % % 2003 2002 CHANGE 2002 CHANGE --------- --------- --------- --------- --------- OPERATING REVENUES Broadcasting (less agency commissions) $ 116,152 $ 55,006 111% $ 115,455 1% Publishing 21,540 21,216 2% 21,216 2% Paging 3,930 4,083 (4)% 4,083 (4)% --------- --------- --------- TOTAL OPERATING REVENUES 141,622 80,305 76% 140,754 1% --------- --------- --------- OPERATING EXPENSES Operating expenses before depreciation and amortization Broadcasting 70,642 31,975 121% 69,774 1% Publishing 15,688 15,420 2% 15,420 2% Paging 2,850 2,754 3% 2,754 3% Corporate and administrative 4,243 2,116 101% 3,932 8% Depreciation and amortization 14,169 7,433 91% 11,156 27% --------- --------- --------- TOTAL OPERATING EXPENSES 107,592 59,698 80% 103,036 4% --------- --------- --------- Operating income 34,030 20,607 65% 37,718 (10)% Miscellaneous income, net 116 97 20% 97 20% Appreciation in value of derivatives, net -0- 730 (100)% 730 (100)% Interest expense (22,242) (16,866) 32% (25,749) (14)% Loss on early extinguishment of debt -0- (11,275) (100)% (11,275) (100)% --------- --------- --------- INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE 11,904 (6,707) NA 1,521 683% Income tax expense (benefit) 4,701 (2,341) NA 785 499% --------- --------- --------- NET INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 7,203 (4,366) NA 736 879% Cumulative effect of accounting change, net of $8,873 income tax benefit -0- (30,592) NA (30,592) (100)% --------- --------- --------- NET INCOME (LOSS) 7,203 (34,958) NA (29,856) (124)% Preferred dividends 1,643 803 105% 803 105% Preferred dividends associated with the redemption of preferred stock -0- 3,969 (100)% 3,969 (100)% --------- --------- --------- NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 5,560 $ (39,730) (114)% $ (34,628) (116)% ========= ========= ========= DILUTED PER SHARE INFORMATION: Net income (loss) before cumulative effect of accounting change available to common stockholders $ 0.11 $ (0.58) NA $ (0.08) (237)% Cumulative effect of accounting change, net of income taxes -0- (1.96) NA (0.61) (100)% --------- --------- --------- Net income (loss) per share available to common stockholders $ 0.11 $ (2.54) NA $ (0.69) (116)% ========= ========= ========= Weighted average shares outstanding 50,559 15,662 223% 50,162 1% ========= ========= ========= OTHER SELECTED DATA POLITICAL REVENUE $ 2,293 $ 2,189 5% $ 3,793 (40)% Gray Television, Inc. Earnings Release for the Three Months and Six Months Ended June 30, 2003 Page 5 of 7
NOTES: Note 1. "As Reported (1)" and "Pro forma" Information in this earnings release has been presented under two different methods: as reported and pro forma. The as reported basis of presentation gives effect to the acquisitions as of their respective acquisition dates. The pro forma presentation gives effect to the acquisitions of Stations Holding Company, Inc. which occurred on October 25, 2002 and KOLO-TV which occurred on December 18, 2002 as if each had occurred on January 1, 2002. Accordingly, the pro forma presentation combines the Company's historical results of operations with the respective acquired operation's historical pre-acquisition operating results. Certain amounts of corporate overhead were eliminated in the pro forma presentation. Depreciation and amortization expense in the pro forma presentation give effect to accounting for the respective acquisitions. Pro forma income tax expense or benefit assumes an effective tax rate of 38% on the pro forma incremental net pre-tax income or loss. Pro forma interest expense and shares outstanding give effect to the Company's issuance of additional debt and common equity to finance, in part, the acquisitions. An unaudited reconciliation between the as reported and the pro forma condensed consolidated statements of operations for the three months and six months ended June 30, 2002 follows: Dollars in Thousands THREE MONTHS ENDED JUNE 30, 2002 -------------------------------------- AS EFFECT OF REPORTED ACQUISITIONS PRO FORMA --------- ------------ --------- Operating revenues Broadcasting (less agency commissions) $ 29,553 $ 32,740 $ 62,293 Publishing 11,073 -0- 11,073 Paging 2,074 -0- 2,074 --------- ------------ --------- Total operating revenues 42,700 32,740 75,440 --------- ------------ --------- Operating expenses before depreciation and amortization Broadcasting 16,494 19,350 35,844 Publishing 7,769 -0- 7,769 Paging 1,371 -0- 1,371 Corporate and administrative 1,116 856 1,972 Depreciation and amortization 3,700 1,862 5,562 --------- ------------ --------- Total operating expenses 30,450 22,068 52,518 --------- ------------ --------- Operating income 12,250 10,672 22,922 Miscellaneous income, net 59 -0- 59 Appreciation in value of derivatives, net 341 -0- 341 Interest expense (7,901) (4,466) (12,367) --------- ------------ --------- Income before income tax and cumulative effect of accounting change 4,749 6,206 10,955 Income tax expense 1,662 2,358 4,020 --------- ------------ --------- Net income 3,087 3,848 6,935 Preferred dividends 4,618 -0- 4,618 --------- ------------ --------- Net income (loss) available to common stockholders $ (1,531) $ 3,848 $ 2,317 ========= ============ ========= Diluted weighted average shares outstanding 15,676 34,500 50,176 ========= ============ ========= Other Selected Data: Broadcast Revenue Local $ 16,880 $ 19,795 $ 36,675 National 8,891 9,313 18,204 Network compensation 1,340 814 2,154 Political 1,428 1,456 2,884 Other 1,014 1,362 2,376 --------- ------------ --------- Total Broadcast Revenue $ 29,553 $ 32,740 $ 62,293 ========= ============ ========= Gray Television, Inc. Earnings Release for the Three Months and Six Months Ended June 30, 2003 Page 6 of 7
Dollars in Thousands SIX MONTHS ENDED JUNE 30, 2002 -------------------------------------- AS EFFECT OF REPORTED ACQUISITIONS PRO FORMA --------- ------------ --------- Operating revenues Broadcasting (less agency commissions) $ 55,006 $ 60,449 $ 115,455 Publishing 21,216 -0- 21,216 Paging 4,083 -0- 4,083 --------- ------------ --------- Total operating revenues 80,305 60,449 140,754 --------- ------------ --------- Operating expenses before depreciation and amortization Broadcasting 31,975 37,799 69,774 Publishing 15,420 -0- 15,420 Paging 2,754 -0- 2,754 Corporate and administrative 2,116 1,816 3,932 Depreciation and amortization 7,433 3,723 11,156 --------- ------------ --------- Total operating expenses 59,698 43,338 103,036 --------- ------------ --------- Operating income 20,607 17,111 37,718 Miscellaneous income, net 97 -0- 97 Appreciation in value of derivatives, net 730 -0- 730 Interest expense (16,866) (8,883) (25,749) Loss on early extinguishment of debt (11,275) -0- (11,275) --------- ------------ --------- Income (loss) before income tax and cumulative effect of accounting (6,707) 8,228 1,521 change Income tax expense (benefit) (2,341) 3,126 785 --------- ------------ --------- Net income (loss) before cumulative effect of accounting change (4,366) 5,102 736 Cumulative effect of accounting change, net of $8,873 income tax benefit (30,592) -0- (30,592) --------- ------------ --------- Net income (loss) (34,958) 5,102 (29,856) Preferred dividends 4,772 -0- 4,772 --------- ------------ --------- Net income (loss) available to common stockholders $ (39,730) $ 5,102 $ (34,628) ========= ============ ========= Basic and diluted weighted average shares outstanding 15,662 34,500 50,162 ========= ============ ========= Other Selected Data: Broadcast Revenue Local $ 31,913 $ 37,323 $ 69,236 National 16,013 17,056 33,069 Network compensation 2,613 1,795 4,408 Political 2,189 1,603 3,792 Other 2,278 2,672 4,950 --------- ------------ --------- Total Broadcast Revenue $ 55,006 $ 60,449 $ 115,455 ========= ============ ========= Note 2. Debt Total debt as of June 30, 2003 and December 31, 2002 does not include $1.3 million of unamortized debt discount on the Company's 9 1/4% Senior Subordinated Notes due March 2011. CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT The preceding comments on Gray's current expectations of operating results for the third quarter of 2003 are "forward looking" for purposes of the Private Securities Litigation Reform Act of 1995. Actual results of operations are subject to a number of risks and may differ materially from the current expectations discussed in this press release. See the Company's annual report on Form 10K for a discussion of risk factors that may affect the Company. Gray Television, Inc. Earnings Release for the Three Months and Six Months Ended June 30, 2003 Page 7 of 7