UNITED STATES
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
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 6, 2007
Gray Television, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Georgia
(State or Other Jurisdiction of Incorporation)
(State or Other Jurisdiction of Incorporation)
| 1-13796 | 58-0285030 | |
| (Commission File Numbers) | (IRS Employer Identification No.) | |
| 4370 Peachtree Road, Atlanta, Georgia | 30319 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
404-504-9828
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions ( see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
The information set forth under this Item 2.02 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 6, 2007, Gray Television Inc. issued a press release reporting its financial results for
the quarter ended June 30, 2007. A copy of the press release is hereby attached as Exhibit 99 and
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits | |
| 99 | Press Release issued by Gray Television Inc. on August 6, 2007 |
SIGNATURES
Pursuant to the requirements of the Securities and 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. |
||||
| August 6, 2007 | By: | /s/ James C. Ryan | ||
| Name: | James C. Ryan | |||
| Title: | Chief Financial Officer and Senior Vice President | |||
Exhibit Index
| Exhibit No. | Description | |
99
|
Press release issued by Gray Television Inc. on August 6, 2007 |
Exhibit 99
Gray
Television, Inc.
Television, Inc.
NEWS RELEASE
Gray Reports Operating Results
For the Three Months and Six Months Ended June 30, 2007
Atlanta, Georgia – August 6, 2007. . . Gray Television, Inc. (“Gray”, “we” or “us”) (NYSE: GTN)
today announced results from operations for the three months (“second quarter”) and six months
ended June 30, 2007 as compared to the three months and six months ended June 30, 2006.
Refinancing Completed:
On March 19, 2007, we completed the refinancing of our senior credit facility. We used funds from
the new senior credit facility to fund the payoff of all outstanding amounts under our former
senior credit facility. During the second quarter, we drew additional amounts under the new credit
facility to fund the redemption of all of our 9.25% Senior Subordinated Notes due 2011 (“9.25%
Notes”) and our Series C Preferred Stock.
Comments on As Reported Results of Operations for the Three Months Ended June 30, 2007:
For the three months ended June 30, 2007 and 2006, we did not complete any acquisitions or
disposals of properties; therefore, the following comments are on our “as reported” results.
Revenues.
On an as reported basis, total net revenue for all stations decreased $1.6 million, or 2%, to $79.8
million due primarily to decreased political advertising revenues and decreased national
advertising revenues partially offset by increased local advertising revenue in the current year.
On an as reported basis, political advertising revenues decreased $2.1 million, or 44%, to $2.6
million reflecting the influence of the 2006 elections.
On an as reported basis, local advertising revenue increased $1.7 million, or 3%, to $54.3
million and national advertising revenue decreased $1.5 million, or 7%, to $19.9 million.
Operating expenses.
On an as reported basis, total broadcast expenses (before depreciation, amortization and loss on
disposal of assets) increased $3.5 million, or 8%, to $49.0 million.
Operation of our digital second channels is attributed for $1.0 million of the overall increase
and reflects the expansion of the number of digital second channels to 39 as of June 30, 2007.
The remaining $2.5 million of the overall increase is attributable to the operation of our
primary channels and reflects routine increases in payroll, programming and promotion.
Total aggregate broadcast expenses (before depreciation, amortization and loss on disposal of
assets) for all the primary channels and all the digital second channels was approximately 1%
less than management’s operating targets for the three months ended June 30, 2007.
On an as reported basis, corporate and administrative expenses, before depreciation, amortization
and loss on disposal of assets increased $0.7 million, or 23%, to $3.6 million due primarily to
incremental increases in news research &/or consulting expense, legal expense and non-cash stock
based compensation expense. We recorded non-cash stock based compensation expense during the three
months ended June 30, 2007 and 2006 of $310,000 and $193,000, respectively.
4370 Peachtree Road, NE * Atlanta, GA 30319
(404) 504-9828 * Fax (404) 261-9607
(404) 504-9828 * Fax (404) 261-9607
Comments on Results of Operations for the Six Months Ended June 30, 2007:
Due to the significance of WNDU to our results of operations, Gray’s pro forma broadcast results
for the six months ended June 30, 2006 have been presented to include the results of WNDU as if the
station had been acquired on January 1, 2006. The acquisition of WNDU did not significantly affect
corporate and administrative expenses. Therefore, corporate and administrative expenses are
presented on an “as reported” basis.
Revenues.
On a pro forma(1) basis, total net revenue for all stations decreased $2.8 million, or
2%, to $149.4 million due primarily to decreased political advertising revenues and decreased
national advertising revenues partially offset by increased local advertising revenue in the
current year.
On a pro forma(1) basis, political advertising revenues decreased $2.9 million, or
43%, to $3.7 million reflecting the influence of the 2006 elections.
On a pro forma(1) basis, local advertising revenue increased $2.2 million, or 2%, to
$103.0 million and national advertising revenue decreased $2.2 million, or 6%, to $37.0 million.
Operating expenses.
On a pro forma(1) basis, total broadcast expenses (before depreciation, amortization
and loss on disposal of assets) increased $5.2 million, or 6%, to $97.9 million.
On a pro forma(1) basis, operation of our digital second channels is attributed for
$2.0 million of the overall increase and reflects the expansion of the number of digital second
channels to 39 as of June 30, 2007.
On a pro forma(1) basis, the remaining $3.2 million of the overall increase is
attributable to the operation of our primary channels and reflects routine increases in payroll,
programming and promotion.
On a pro forma(1) basis, total aggregate broadcast expenses (before depreciation,
amortization and loss on disposal of assets) for all the primary channels and all the digital
second channels was approximately 1% less than management’s operating targets for the six months
ended June 30, 2007.
On an as reported basis, corporate and administrative expenses, before depreciation, amortization
and loss on disposal of assets increased $1.0 million, or 15%, to $7.6 million due primarily to
incremental increases in news research &/or consulting expense, legal expense and non-cash stock
based compensation expense. We recorded non-cash stock based compensation expense during the six
months ended June 30, 2007 and 2006 of $830,000 and $391,000, respectively.
| Gray Television, Inc. | ||
| Earnings Release for the three months and six months ended June 30, 2007 | Page 2 of 9 |
Other Financial Data on an “as reported” basis:
| June 30, 2007 | December 31, 2006 | |||||||
| (in thousands) | ||||||||
Cash |
$ | 3,378 | $ | 4,741 | ||||
Total debt(2) |
928,500 | 851,654 | ||||||
Preferred stock |
— | 37,451 | ||||||
Available credit under senior credit
facility |
96,500 | 97,000 | ||||||
| Six Months Ended June 30, | ||||||||
| 2007 | 2006 | |||||||
| (in thousands) | ||||||||
Net cash provided by operating activities |
$ | 5,012 | $ | 40,519 | ||||
Net cash used in investing activities |
(18,228 | ) | (103,610 | ) | ||||
Net cash provided by financing activities |
11,583 | 61,217 | ||||||
We repurchased 647,800 shares of our common stock for $5.5 million during the first quarter of 2007
at an average price per share of $8.49. We repurchased 4,100 shares of our common stock for
$32,000 during the second quarter of 2006 at an average price per share of $7.82. No similar
purchases were made during the second quarter of the current year or the first quarter of the prior
year. The repurchased common stock is held in treasury.
On March 19, 2007, we completed the previously announced refinancing of our senior credit facility.
The new senior credit facility consists of a $100 million revolving credit facility and a $925
million institutional term loan facility. We used borrowings from the new senior credit facility to
fund the payoff of all outstanding amounts under our former senior credit facility, to pay fees and
expenses relating to the refinancing and for other general corporate purposes. In connection with
this refinancing, we incurred fees of approximately $3.2 million and recorded a loss on early
extinguishment of debt expense of $6.5 million in the first quarter of 2007.
On April 18, 2007, we drew $275 million on our senior credit facility to redeem all of our then
outstanding 9.25% Notes, pay applicable redemption premiums, pay accrued interest and pay fees and
expenses related to the redemption. As a result of the redemption of the 9.25% Notes, we recorded
a loss on early extinguishment of debt of approximately $16.4 million during the second quarter of
2007.
On May 22, 2007, we drew $40 million to redeem all of our outstanding Series C Preferred Stock at
its liquidation value plus accrued and unpaid dividends. We completed the redemption upon paying
$37.9 million as liquidation value of the Series C Preferred Stock and $429,000 in accrued
dividends. The funds remaining from the $40 million draw were used to pay down debt balances under
the revolver portion of the senior credit facility.
A detailed table of operating results follows on the next page.
| Gray Television, Inc. | ||
| Earnings Release for the three months and six months ended June 30, 2007 | Page 3 of 9 |
Gray Television, Inc.
Selected Operating Data (Unaudited)
(in thousands except for per share data and percentages)
Selected Operating Data (Unaudited)
(in thousands except for per share data and percentages)
| As Reported | ||||||||||||
| Three Months Ended | ||||||||||||
| June 30, | ||||||||||||
| % | ||||||||||||
| 2007 | 2006 | Change | ||||||||||
Revenues (less agency commissions) |
$ | 79,750 | $ | 81,391 | (2 | )% | ||||||
Operating expenses before depreciation,
amortization and loss on disposal of assets, net: |
||||||||||||
Broadcast |
49,048 | 45,538 | 8 | % | ||||||||
Corporate and administrative |
3,584 | 2,916 | 23 | % | ||||||||
Depreciation and amortization of intangible assets |
10,117 | 9,022 | 12 | % | ||||||||
Loss on disposals of assets, net |
119 | 189 | (37 | )% | ||||||||
| 62,868 | 57,665 | 9 | % | |||||||||
Operating income |
16,882 | 23,726 | (29 | )% | ||||||||
Other income (expense): |
||||||||||||
Miscellaneous income, net |
449 | 59 | 661 | % | ||||||||
Interest expense |
(16,525 | ) | (16,656 | ) | (1 | )% | ||||||
Loss on early extinguishment of debt |
(16,361 | ) | — | |||||||||
Income (loss) before income tax |
(15,555 | ) | 7,129 | |||||||||
Income tax expense (benefit) |
(5,613 | ) | 2,809 | |||||||||
Net income (loss) |
(9,942 | ) | 4,320 | |||||||||
Preferred dividends (includes accretion of issuance
cost of $418 and $22, respectively) |
847 | 815 | ||||||||||
Net income (loss) available to common stockholders |
$ | (10,789 | ) | $ | 3,505 | |||||||
Basic per share information: |
||||||||||||
Net income (loss) available to common stockholders |
$ | (0.23 | ) | $ | 0.07 | |||||||
Weighted average shares outstanding |
47,688 | 48,791 | (2 | )% | ||||||||
Diluted per share information: |
||||||||||||
Net income (loss) available to common stockholders |
$ | (0.23 | ) | $ | 0.07 | |||||||
Weighted average shares outstanding |
47,688 | 48,791 | (2 | )% | ||||||||
Political revenue (less agency commission) |
$ | 2,634 | $ | 4,706 | (44 | )% | ||||||
| Gray Television, Inc. | ||
| Earnings Release for the three months and six months ended June 30, 2007 | Page 4 of 9 |
Gray Television, Inc.
Selected Operating Data (Unaudited)
(in thousands except for per share data and percentages)
Selected Operating Data (Unaudited)
(in thousands except for per share data and percentages)
| As Reported | Pro Forma(1) | |||||||||||||||||||||||
| Six Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| % | % | |||||||||||||||||||||||
| 2007 | 2006 | Change | 2007 | 2006 | Change | |||||||||||||||||||
Revenues (less agency commissions) |
$ | 149,431 | $ | 149,626 | 0 | % | $ | 149,431 | $ | 152,211 | (2 | )% | ||||||||||||
Operating expenses before depreciation,
amortization and loss on disposal
of assets, net: |
||||||||||||||||||||||||
Broadcast |
97,866 | 90,602 | 8 | % | 97,866 | 92,742 | 6 | % | ||||||||||||||||
Corporate and administrative |
7,645 | 6,660 | 15 | % | 7,645 | 6,660 | 15 | % | ||||||||||||||||
Depreciation and amortization of
intangible assets |
19,892 | 17,350 | 15 | % | 19,892 | 18,018 | 10 | % | ||||||||||||||||
Loss on disposals of assets, net |
116 | 271 | (57 | )% | 116 | 271 | (57 | )% | ||||||||||||||||
| 125,519 | 114,883 | 9 | % | 125,519 | 117,691 | 7 | % | |||||||||||||||||
Operating income |
23,912 | 34,743 | (31 | )% | 23,912 | 34,520 | (31 | )% | ||||||||||||||||
Other income (expense): |
||||||||||||||||||||||||
Miscellaneous income, net |
807 | 405 | 99 | % | 807 | 405 | 99 | % | ||||||||||||||||
Interest expense |
(33,797 | ) | (32,123 | ) | 5 | % | (33,797 | ) | (32,548 | ) | 4 | % | ||||||||||||
Loss on early extinguishment of debt |
(22,853 | ) | (110 | ) | (22,853 | ) | (110 | ) | ||||||||||||||||
Income (loss) before income tax benefit |
(31,931 | ) | 2,915 | (31,931 | ) | 2,267 | ||||||||||||||||||
Income tax expense (benefit) |
(11,475 | ) | 1,149 | (11,475 | ) | 911 | ||||||||||||||||||
Net income (loss) |
(20,456 | ) | 1,766 | (20,456 | ) | 1,356 | ||||||||||||||||||
Preferred dividends (includes accretion
of issuance cost of $439, $44, $439, $44,
respectively) |
||||||||||||||||||||||||
| 1,626 | 1,629 | 1,626 | 1,629 | |||||||||||||||||||||
Net income (loss) available to common
stockholders |
$ | (22,082 | ) | $ | 137 | $ | (22,082 | ) | $ | (273 | ) | |||||||||||||
Basic per share information: |
||||||||||||||||||||||||
Net income (loss) available to common
stockholders |
$ | (0.46 | ) | $ | — | $ | (0.46 | ) | $ | (0.01 | ) | |||||||||||||
Weighted average shares outstanding |
47,711 | 48,767 | (2 | )% | 47,711 | 48,767 | (2 | )% | ||||||||||||||||
Diluted per share information: |
||||||||||||||||||||||||
Net income (loss) available to common
stockholders |
$ | (0.46 | ) | $ | — | $ | (0.46 | ) | $ | (0.01 | ) | |||||||||||||
Weighted average shares outstanding |
47,711 | 48,782 | (2 | )% | 47,711 | 48,767 | (2 | )% | ||||||||||||||||
Political revenue (less agency commission) |
$ | 3,730 | $ | 6,482 | (42 | )% | $ | 3,730 | $ | 6,562 | (43 | )% | ||||||||||||
| Gray Television, Inc. | ||
| Earnings Release for the three months and six months ended June 30, 2007 | Page 5 of 9 |
Guidance for the Third Quarter of 2007
We currently anticipate that our broadcasting results of operations for the three months ended
September 30, 2007 will approximate the ranges presented in the table below.
| % | % | |||||||||||||||||||
| 2007 | Change | 2007 | Change | |||||||||||||||||
| Guidance | From | Guidance | From | |||||||||||||||||
| Low | Actual | High | Actual | Actual | ||||||||||||||||
| Selected operating date: | Range | 2006 | Range | 2006 | 2006 | |||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
OPERATING REVENUES: |
||||||||||||||||||||
Revenues (less agency
commissions) |
$ | 74,000 | (8 | )% | $ | 75,500 | (6 | )% | $ | 80,592 | ||||||||||
OPERATING EXPENSES: |
||||||||||||||||||||
(before depreciation, amortization
and other expenses)
|
||||||||||||||||||||
Broadcast |
$ | 49,000 | 3 | % | $ | 49,250 | 4 | % | $ | 47,456 | ||||||||||
Corporate and administrative |
$ | 3,600 | 3 | % | $ | 3,700 | 6 | % | $ | 3,481 | ||||||||||
OTHER SELECTED DATA: |
||||||||||||||||||||
Broadcast political revenues
(less agency commissions) |
$ | 600 | $ | 700 | $ | 10,595 | ||||||||||||||
Expense for non-cash
contributions to 401(k) plan |
$ | 575 | $ | 600 | $ | 570 | ||||||||||||||
Expense for corporate non-cash
stock based compensation |
$ | 275 | $ | 300 | $ | 191 | ||||||||||||||
Comments on Guidance
The total revenue results anticipated for the third quarter of 2007 reflect the incremental decline
in political revenues and continued softness in non-political national advertising. Local
non-political advertising is currently anticipated to increase in the 7% to 10% range.
The incremental costs of the digital second channels discussed above account for approximately $1.0
million of the expected increase in total broadcast operating expenses before depreciation,
amortization and loss on disposal of assets.
With respect to our digital second channels for the full year of 2007, we currently anticipate the
total operating costs, before depreciation, amortization and loss on disposal of assets, of our
digital second channels will increase approximately $4.3 million to a total of $9.5 million. This
expected increase reflects the impact of expanding digital second channel operations to a total of
40 channels by December 31, 2007 compared to operating six digital second channels at January 1,
2006.
We currently anticipate that the total operating costs of our primary channels for the full
year of 2007 will increase less than $1.0 million over the pro forma results for the full year of
2006 and that the majority of this increase is attributable to the non-recurring expense of
installing a uniform sales billing system at all of our television stations.
Estimated corporate expenses for the third quarter of 2007 are expected to be similar to those
of the third quarter of 2006. For the full year of 2007, we currently anticipate that total
corporate expense will be below the $15.1 million of corporate expense reported for 2006.
| Gray Television, Inc. | ||
| Earnings Release for the three months and six months ended June 30, 2007 | Page 6 of 9 |
Conference Call Information
We will host a conference call to discuss our second quarter operating results on August 6,
2007. The call will begin at 11:00 AM Eastern Time. The live dial-in number is 1 (800) 811-8830
and the confirmation code is 2171149. The call will be webcast live and available for replay at
www.gray.tv. The taped replay of the conference call will be available at 1 (888) 203-1112,
Confirmation Code: 2171149 until September 6, 2007.
For information contact:
|
Web site: www.gray.tv | |
Bob Prather
|
Jim Ryan | |
President and Chief Operating Officer
|
Senior V. P. and Chief Financial Officer | |
(404) 266-8333
|
(404) 504-9828 |
| Gray Television, Inc. | ||
| Earnings Release for the three months and six months ended June 30, 2007 | Page 7 of 9 |
Reconciliations:
Reconciliation of net income (loss) to the Non-GAAP terms (in thousands):
Reconciliation of net income (loss) to the Non-GAAP terms (in thousands):
| As Reported | ||||||||
| Three Months Ended | ||||||||
| June 30, | ||||||||
| 2007 | 2006 | |||||||
Net income (loss) |
$ | (9,942 | ) | $ | 4,320 | |||
Adjustments to reconcile to Broadcast Cash Flow Less |
||||||||
Cash Corporate Expenses: |
||||||||
Depreciation and amortization of intangible assets |
10,117 | 9,022 | ||||||
Amortization of non-cash stock based compensation |
310 | 193 | ||||||
(Gain) loss on disposals of assets, net |
119 | 189 | ||||||
Miscellaneous (income) expense, net |
(449 | ) | (59 | ) | ||||
Interest expense |
16,525 | 16,656 | ||||||
Loss on early extinguishment of debt |
16,361 | — | ||||||
Income tax expense (benefit) |
(5,613 | ) | 2,809 | |||||
Amortization of program broadcast rights |
3,803 | 3,500 | ||||||
Common stock contributed to 401(k) plan
excluding corporate 401(k) contributions |
582 | 554 | ||||||
Network compensation revenue recognized |
(196 | ) | (360 | ) | ||||
Network compensation per network affiliation agreement |
78 | 524 | ||||||
Payments for program broadcast rights |
(3,882 | ) | (3,484 | ) | ||||
Broadcast Cash Flow Less Cash Corporate Expenses |
27,813 | 33,864 | ||||||
Corporate and administrative expenses excluding
amortization of non-cash stock based compensation |
3,274 | 2,723 | ||||||
Broadcast Cash Flow |
$ | 31,087 | $ | 36,587 | ||||
| As Reported | Pro Forma(1) | |||||||||||||||
| Six Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
Net income (loss) |
$ | (20,456 | ) | $ | 1,766 | $ | (20,456 | ) | $ | 1,356 | ||||||
Adjustments to reconcile to Broadcast Cash Flow Less |
||||||||||||||||
Cash Corporate Expenses: |
||||||||||||||||
Depreciation and amortization of intangible assets |
19,892 | 17,350 | 19,892 | 18,018 | ||||||||||||
Amortization of non-cash stock based compensation |
830 | 391 | 830 | 391 | ||||||||||||
(Gain) loss on disposals of assets, net |
116 | 271 | 116 | 271 | ||||||||||||
Miscellaneous (income) expense, net |
(807 | ) | (405 | ) | (807 | ) | (405 | ) | ||||||||
Interest expense |
33,797 | 32,123 | 33,797 | 32,548 | ||||||||||||
Loss on early extinguishment of debt |
22,853 | 110 | 22,853 | 110 | ||||||||||||
Income tax expense (benefit) |
(11,475 | ) | 1,149 | (11,475 | ) | 911 | ||||||||||
Amortization of program broadcast rights |
7,596 | 6,804 | 7,596 | 6,804 | ||||||||||||
Common stock contributed to 401(k) plan
excluding corporate 401(k) contributions |
1,200 | 1,126 | 1,200 | 1,126 | ||||||||||||
Network compensation revenue recognized |
(385 | ) | (581 | ) | (385 | ) | (581 | ) | ||||||||
Network compensation per network affiliation agreement |
157 | 1,048 | 157 | 1,048 | ||||||||||||
Payments for program broadcast rights |
(7,687 | ) | (6,770 | ) | (7,687 | ) | (6,770 | ) | ||||||||
Broadcast Cash Flow Less Cash Corporate Expenses |
45,631 | 54,382 | 45,631 | 54,827 | ||||||||||||
Corporate and administrative expenses excluding
amortization of non-cash stock based compensation |
6,815 | 6,269 | 6,815 | 6,269 | ||||||||||||
Broadcast Cash Flow |
$ | 52,446 | $ | 60,651 | $ | 52,446 | $ | 61,096 | ||||||||
See the next page for the definition of Non-GAAP terms.
| Gray Television, Inc. | ||
| Earnings Release for the three months and six months ended June 30, 2007 | Page 8 of 9 |
Non-GAAP Terms
This press release includes the non-GAAP financial measure of Broadcast Cash Flow and Broadcast
Cash Flow Less Cash Corporate Expenses. These non-GAAP amounts are used by Gray to approximate the
amount used to calculate a key financial performance covenant as defined in our senior credit
facility. Broadcast Cash Flow is defined as operating income, plus corporate expense, depreciation
and amortization (including amortization of program broadcast rights), non-cash compensation and
(gain) loss on disposal of assets and cash payments received or receivable under network
affiliation agreements less payments for program broadcast obligations, less network compensation
revenue and less income (loss) from discontinued operations, net of income taxes. Corporate
expenses (excluding depreciation, amortization and non-cash stock based compensation) are deducted
from Broadcast Cash Flow to calculate “Broadcast Cash Flow Less Cash Corporate Expenses”. These
non-GAAP terms are used in addition to and in conjunction with results presented in accordance with
GAAP and should be considered as supplements to, and not as substitutes for, net income (loss)
calculated in accordance with GAAP.
Notes
(1) The pro forma presentation gives effect to the results of operations for the acquisition of
television station WNDU, South Bend, IN on March 3, 2006 as if the station had been acquired on
January 1, 2006.
(2) Total debt as of December 31, 2006 does not include $653,000 of unamortized debt discount on
our 9.25% Notes. The 9.25% Notes were redeemed on April 18, 2007.
Gray Television, Inc.
Gray Television, Inc. is a television broadcast company headquartered in Atlanta, GA. We currently
operate 36 television stations serving 30 markets. Each of the stations are affiliated with either
CBS (17 stations), NBC (10 stations), ABC (8 stations) or FOX (1 station). In addition, we
currently operate 39 digital second channels including 1 ABC, 5 Fox, 8 CW and 16 MyNetworkTV
affiliates plus 7 local news/weather channels and 2 “independent” channels in certain of our
existing markets. We intend to start an additional local news/weather channel during the third
quarter of 2007 in one of our existing markets.
Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities
Litigation Reform Act
The comments on our current expectations of operating results for the third quarter of 2007 and
other future events are “forward looking statements” for purposes of the Private Securities
Litigation Reform Act of 1995. Actual results of operations are subject to a number of risks and
uncertainties and may differ materially from the current expectations discussed in this press
release. All information set forth in this release and its attachments is as of August 6, 2007.
We do not intend, and undertake no duty, to update this information to reflect future events or
circumstances. Information about potential factors that could affect our business and financial
results and cause actual results to differ materially from those in the forward-looking statements
are included under the captions, “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year
ended December 31, 2006 which is on file with the SEC and available at the SEC’s website at
www.sec.gov.
| Gray Television, Inc. | ||
| Earnings Release for the three months and six months ended June 30, 2007 | Page 9 of 9 |