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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) November 12, 2003
GRAY TELEVISION, INC.
(Exact Name of Registrant as Specified in its Charter)
| Georgia | 0-13796 | 58-0285030 | ||
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| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 4370 Peachtree Road, Atlanta, Georgia | 30319 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code (404) 504-9828
(Former Name or Former Address, if Changed Since Last Report)
| SIGNATURES | ||||||||
| EXHIBIT INDEX | ||||||||
| EX-99.1 PRESS RELEASE ISSUED NOVEMBER 12, 2003 | ||||||||
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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 November 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 November 12, 2003, Gray Television, Inc. issued a press release reporting its financial results for the third quarter ended September 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) |
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| Dated: November 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 November 12, 2003. |
GRAY EXHIBIT 99.1 Television, Inc. - ------------------------------------------------------------------------------- NEWS RELEASE GRAY REPORTS OPERATING RESULTS FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2003 ATLANTA, GEORGIA - NOVEMBER 12, 2003 . . . GRAY TELEVISION, INC. (THE "COMPANY") (NYSE: GTN) today announced its results for the three months ("third quarter") and nine months ended September 30, 2003. Operating income for the third quarter of 2003 of $19.5 million exceeded the high end guidance range 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). THIRD QUARTER OF 2003 COMPARED TO THE THIRD QUARTER OF 2002 Revenues. Total revenues for the three months ended September 30, 2003 increased 73% to $73.4 million as compared to the corresponding period of the prior year primarily reflecting the impact of the 2002 Acquisitions. Broadcasting revenues increased 104% to $60.4 million. The stations acquired in 2002 had revenue of $31.8 million in the third quarter of 2003. For the television stations that were owned continuously for the quarter ended September 30, 2003 and 2002, total revenue decreased 3% while political revenue decreased $3.0 million. On a pro forma basis, total broadcasting revenues decreased 4% from the pro forma results of the third quarter of 2002. Broadcasting local and national revenues increased 6% and 4% respectively from the pro forma results of 2002 while political advertising revenue decreased $5.4 million from the pro forma results for the third quarter of 2002. Operating expenses. Operating expenses before depreciation and amortization increased 74% to $46.9 million primarily reflecting the impact of the 2002 Acquisitions. Broadcasting expenses, before depreciation and amortization, increased 114% to $35.7 million. The stations acquired in 2002 had broadcast expense of $18.8 million in the third quarter of 2003. For the television stations that were owned continuously for the quarters ended September 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 decreased 3% to $35.7 million from the prior year. 4370 Peachtree Road, NE * Atlanta, GA 30319 (404) 504-9828 * Fax (404) 261-9607 NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2002 Revenues. Total revenues for the nine months ended September 30, 2003 increased 75% to $215.0 million as compared to the same period of the prior year primarily reflecting the impact of the 2002 Acquisitions. Broadcasting revenues increased 109% to $176.5 million. The stations acquired in 2002 had revenue of $92.9 million in the first nine months of 2003. For the television stations that were owned continuously for the nine month periods ended September 30, 2003 and 2002, total revenue decreased 1% between the periods while political revenue decreased $3.9 million. On a pro forma basis total broadcasting revenues decreased 1% to $176.5 million from the pro forma results for the first nine months of 2002. Broadcasting local and national revenue increased 4% and 4% respectively from the pro forma results of 2002 while political advertising revenue decreased $6.9 million from the pro forma results for the first nine months of 2002. Operating expenses. Operating expenses before depreciation and amortization increased 77% to $140.3 million primarily reflecting the impact of the 2002 Acquisitions. Broadcasting expenses, before depreciation and amortization, increased 119% to $106.3 million. The stations acquired in 2002 had broadcast expense of $56.2 million in the first nine months of 2003. For the television stations that were owned continuously for the nine month periods ended September 30, 2003 and 2002, broadcast expenses increased 3%. On a pro forma basis broadcasting operating expenses before depreciation and amortization were consistent with that of the prior year at $106.3 million. BALANCE SHEET Total debt outstanding at September 30, 2003 was $655.9 million compared to $658.2 million at December 31, 2002. The Company's cash balance was $10.2 million at September 30, 2003 compared to $12.9 million at December 31, 2002 Gray Television, Inc. Earnings Release for the Three Months and Nine Months Ended September 30, 2003 Page 2 of 8 GUIDANCE FOR THE FOURTH QUARTER AND FULL YEAR OF 2003 The Company currently anticipates that its results of operations for the three months ended December 31, 2003 will approximate the ranges presented in the table below. The Company currently anticipates that its results of operations for the year ended December 31, 2003 will approximate the ranges presented in the table below. The Company currently estimates that full year 2003 non-cash 401(k) plan expense will approximate $2.2 million and such estimate is included in the operating expense estimates presented below.
THREE MONTHS ENDED Dollars in Millions DECEMBER 31, 2003 ESTIMATED RANGE ---------------------- LOW HIGH ----- ----- OPERATING REVENUES Broadcasting (less agency commissions) $65.0 $65.8 Publishing 11.5 11.8 Paging 1.8 1.9 ----- ----- TOTAL OPERATING REVENUES 78.3 79.5 ----- ----- OPERATING EXPENSES Operating expenses before depreciation and amortization Broadcasting 38.5 38.7 Publishing 8.0 8.2 Paging 1.5 1.6 Corporate 1.4 1.5 Depreciation and amortization 7.0 7.1 ----- ----- TOTAL OPERATING EXPENSES 56.4 57.1 ----- ----- OPERATING INCOME $21.9 $22.4 ===== ===== Gray Television, Inc. Earnings Release for the Three Months and Nine Months Ended September 30, 2003 Page 3 of 8
YEAR ENDED Dollars in Millions DECEMBER 31, 2003 ESTIMATED RANGE ------------------------ LOW HIGH ------ ------ OPERATING REVENUES Broadcasting (less agency commissions) $241.5 $242.3 Publishing 44.0 44.3 Paging 7.7 7.8 ------ ------ TOTAL OPERATING REVENUES 293.2 294.4 ------ ------ OPERATING EXPENSES Operating expenses before depreciation and amortization Broadcasting 144.8 145.0 Publishing 31.6 31.8 Paging 5.7 5.8 Corporate 7.5 7.7 Depreciation and amortization 28.2 28.3 ------ ------ TOTAL OPERATING EXPENSES 217.8 218.6 ------ ------ OPERATING INCOME $ 75.4 $ 75.8 ====== ====== FOR INFORMATION CONTACT: BOB PRATHER JIM RYAN PRESIDENT AND SENIOR V. P. AND CHIEF OPERATING OFFICER 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 third quarter operating results on Wednesday November 12, 2003. The call will begin at 2:00 p.m. Eastern Time. The live dial-in number is (877) 461-2814 and the reservation number is T456315G. 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 (888) 509-0081 until November 23, 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 Nine Months Ended September 30, 2003 Page 4 of 8 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: SEPTEMBER 30, SEPTEMBER 30, -------------------------------- ------------------- % % 2003 2002 CHANGE 2002 CHANGE -------- ------- ------ -------- ------ OPERATING REVENUES Broadcasting (less agency commissions) $ 60,372 $29,535 104% $ 62,965 (4)% Publishing 10,995 10,858 1% 10,858 1% Paging 1,985 2,116 (6)% 2,116 (6)% -------- ------- -------- TOTAL OPERATING REVENUES 73,352 42,509 73% 75,939 (3)% -------- ------- -------- OPERATING EXPENSES Operating expenses before depreciation and amortization Broadcasting 35,657 16,647 114% 36,707 (3)% Publishing 7,917 7,790 2% 7,790 2% Paging 1,384 1,360 2% 1,360 2% Corporate and administrative 1,916 1,169 64% 2,372 (19)% Depreciation and amortization 6,990 3,632 92% 5,493 27% -------- ------- -------- TOTAL OPERATING EXPENSES 53,864 30,598 76% 53,722 0% -------- ------- -------- Operating income 19,488 11,911 64% 22,217 (12)% Miscellaneous income (expense), net 16 (42) NA (42) NA Appreciation in value of derivatives, net -0- 851 (100)% 851 (100)% Interest expense (10,458) (8,049) 30% (12,328) (15)% -------- ------- -------- INCOME BEFORE INCOME TAXES 9,046 4,671 94% 10,698 (15)% Income tax expense 3,490 1,555 124% 3,846 (9)% -------- ------- -------- NET INCOME 5,556 3,116 78% 6,852 (19)% Preferred dividends 822 800 3% 800 3 % -------- ------- -------- NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 4,734 $ 2,316 104% $ 6,052 (22)% ======== ======= ======== DILUTED PER SHARE INFORMATION: Net income per share available to common stockholders $ 0.09 $ 0.14 (35)% $ 0.12 (22)% ======== ======= ======== Weighted average shares outstanding 50,596 16,027 216% 50,527 0% ======== ======= ======== OTHER SELECTED DATA POLITICAL REVENUE $ 1,124 $ 3,210 (65)% $ 6,494 (83)% Gray Television, Inc. Earnings Release for the Three Months and Nine Months Ended September 30, 2003 Page 5 of 8
SELECTED BALANCE SHEET DATA: SEPT. 30 DEC. 31, 2003 2002 -------- -------- Cash and cash equivalents $ 10,208 $ 12,915 Total Debt (2) 655,904 658,220 Total debt net of cash 645,696 645,305 GRAY TELEVISION, INC. (in thousands, except per share data and percentages) Gray Television, Inc. Earnings Release for the Three Months and Nine Months Ended September 30, 2003 Page 6 of 8
AS REPORTED(1) PRO FORMA(1) NINE MONTHS ENDED NINE MONTHS ENDED SELECTED UNAUDITED OPERATING DATA: SEPTEMBER 30, SEPTEMBER 30, ------------------------------- ------------------- % % 2003 2002 CHANGE 2002 CHANGE -------- -------- ------ -------- ------ OPERATING REVENUES Broadcasting (less agency commissions) $176,524 $ 84,541 109% $178,420 (1)% Publishing 32,535 32,074 1% 32,074 1% Paging 5,915 6,199 (5)% 6,199 (5)% -------- -------- -------- TOTAL OPERATING REVENUES 214,974 122,814 75% 216,693 (1)% -------- -------- -------- OPERATING EXPENSES Operating expenses before depreciation and amortization Broadcasting 106,299 48,622 119% 106,481 (0)% Publishing 23,605 23,210 2% 23,210 2% Paging 4,234 4,114 3% 4,114 3% Corporate and administrative 6,159 3,285 87% 6,304 (2)% Depreciation and amortization 21,159 11,065 91% 16,649 27% -------- -------- -------- TOTAL OPERATING EXPENSES 161,456 90,296 79% 156,758 3% -------- -------- -------- Operating income 53,518 32,518 65% 59,935 (11)% Miscellaneous income, net 132 55 140% 55 140% Appreciation in value of derivatives, net -0- 1,581 (100)% 1,581 (100)% Interest expense (32,700) (24,915) 31% (38,077) (14)% Loss on early extinguishment of debt -0- (11,275) NA (11,275) NA -------- -------- -------- INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE 20,950 (2,036) NA 12,219 71% Income tax expense (benefit) 8,191 (786) NA 4,631 77% -------- -------- -------- NET INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 12,759 (1,250) NA 7,588 68% Cumulative effect of accounting change, net of $8,873 income tax benefit -0- (30,592) NA (30,592) NA -------- -------- -------- NET INCOME (LOSS) 12,759 (31,842) NA (23,004) NA Preferred dividends 2,465 1,603 54% 1,603 54% Preferred dividends associated with the redemption of preferred stock -0- 3,969 (100)% 3,969 (100)% -------- -------- -------- NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ 10,294 $(37,414) NA $(28,576) NA ======== ======== ======== DILUTED PER SHARE INFORMATION: Net income (loss) before cumulative effect of accounting change available to common stockholders $ 0.20 $ (0.43) NA $ 0.04 410% Cumulative effect of accounting change, net of income taxes -0- (1.95) NA (0.61) NA -------- -------- -------- Net income (loss) per share available to common stockholders $ 0.20 $ (2.38) NA $ (0.57) NA ======== ======== ======== Weighted average shares outstanding 50,574 15,692 222% 50,522 0% ======== ======== ======== OTHER SELECTED DATA POLITICAL REVENUE $ 3,417 $ 5,399 (37)% $ 10,287 (67)% 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 nine months ended September 30, 2002 follows: Gray Television, Inc. Earnings Release for the Three Months and Nine Months Ended September 30, 2003 Page 7 of 8
Data in Thousands THREE MONTHS ENDED SEPTEMBER 30, 2002 ------------------------------------------ AS EFFECT OF REPORTED ACQUISITIONS PRO FORMA -------- ------------ --------- Operating revenues Broadcasting (less agency commissions) $ 29,535 $ 33,430 $ 62,965 Publishing 10,858 -0- 10,858 Paging 2,116 -0- 2,116 -------- -------- -------- Total operating revenues 42,509 33,430 75,939 -------- -------- -------- Operating expenses before depreciation and amortization Broadcasting 16,647 20,060 36,707 Publishing 7,790 -0- 7,790 Paging 1,360 -0- 1,360 Corporate and administrative 1,169 1,203 2,372 Depreciation and amortization 3,632 1,861 5,493 -------- -------- -------- Total operating expenses 30,598 23,124 53,722 -------- -------- -------- Operating income 11,911 10,306 22,217 Miscellaneous income (expense), net (42) -0- (42) Appreciation in value of derivatives, net 851 -0- 851 Interest expense (8,049) (4,279) (12,328) -------- -------- -------- Income before income tax 4,671 6,027 10,698 Income tax expense 1,555 2,291 3,846 -------- -------- -------- Net income 3,116 3,736 6,852 Preferred dividends 800 -0- 800 -------- -------- -------- Net income available to common stockholders $ 2,316 $ 3,736 $ 6,052 ======== ======== ======== Diluted weighted average shares outstanding 16,027 34,500 50,527 ======== ======== ======== Other Selected Data: Broadcast Revenue Local $ 15,958 $ 18,989 $ 34,947 National 8,082 9,045 17,127 Network compensation 1,368 871 2,239 Political 3,211 3,283 6,494 Other 916 1,242 2,158 -------- -------- -------- Total Broadcast Revenue $ 29,535 $ 33,430 $ 62,965 ======== ======== ======== Note 2. Debt Total debt as of September 30, 2003 and December 31, 2002 does not include $1.2 million and $1.3 million, respectively, 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 fourth 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 Nine Months Ended September 30, 2003 Page 8 of 8
Data in Thousands NINE MONTHS ENDED SEPTEMBER 30, 2002 --------------------------------------------- AS EFFECT OF REPORTED ACQUISITIONS PRO FORMA -------- ------------ --------- Operating revenues Broadcasting (less agency commissions) $ 84,541 $ 93,879 $ 178,420 Publishing 32,074 -0- 32,074 Paging 6,199 -0- 6,199 --------- --------- --------- Total operating revenues 122,814 93,879 216,693 --------- --------- --------- Operating expenses before depreciation and amortization Broadcasting 48,622 57,859 106,481 Publishing 23,210 -0- 23,210 Paging 4,114 -0- 4,114 Corporate and administrative 3,285 3,019 6,304 Depreciation and amortization 11,065 5,584 16,649 --------- --------- --------- Total operating expenses 90,296 66,462 156,758 --------- --------- --------- Operating income 32,518 27,417 59,935 Miscellaneous income, net 55 -0- 55 Appreciation in value of derivatives, net 1,581 -0- 1,581 Interest expense (24,915) (13,162) (38,077) Loss on early extinguishment of debt (11,275) -0- (11,275) --------- --------- --------- Income (loss) before income tax and cumulative effect of accounting (2,036) 14,255 12,219 change Income tax expense (benefit) (786) 5,417 4,631 --------- --------- --------- Net income (loss) before cumulative effect of accounting change (1,250) 8,838 7,588 Cumulative effect of accounting change, net of $8,873 income tax (30,592) -0- (30,592) benefit --------- --------- --------- Net income (loss) (31,842) 8,838 (23,004) Preferred dividends 5,572 -0- 5,572 --------- --------- --------- Net income (loss) available to common stockholders $ (37,414) $ 8,838 $ (28,576) ========= ========= ========= Diluted weighted average shares outstanding 15,692 34,830 50,522 ========= ========= ========= Other Selected Data: Broadcast Revenue Local $ 47,871 $ 56,312 $ 104,183 National 24,095 26,101 50,196 Network compensation 3,981 2,666 6,647 Political 5,399 4,888 10,287 Other 3,195 3,912 7,107 --------- --------- --------- Total Broadcast Revenue $ 84,541 $ 93,879 $ 178,420 ========= ========= =========