GRAY TELEVISION, INC.
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
Date of Report (Date of earliest event reported) March 13, 2008
Gray Television, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Georgia
(State or Other Jurisdiction of Incorporation)
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1-13796
(Commission File Numbers)
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58-0285030
(IRS Employer Identification No.) |
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4370 Peachtree Road, Atlanta, Georgia
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30319 |
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(Address of Principal Executive Offices)
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(Zip Code) |
404-504-9828
(Registrants 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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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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 March 13, 2008, Gray Television Inc. issued a press release reporting its financial results for
the quarter ended December 31, 2007. A copy of the press release is hereby attached as Exhibit 99
and incorporated herein by reference.
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Item 9.01 |
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Financial Statements and Exhibits. |
99 |
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Press Release issued by Gray Television Inc. on March 13, 2008 |
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.
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Gray Television Inc.
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March 13, 2008 |
By: |
/s/ James C. Ryan
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Name: |
James C. Ryan |
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Title: |
Chief Financial Officer and
Senior Vice President |
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Exhibit Index
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Exhibit No. |
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Description |
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99 |
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Press release issued by Gray Television Inc. on March 13, 2008 |
EX-99 PRESS RELEASE
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Gray
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Exhibit 99 |
Television, Inc. |
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NEWS RELEASE
Gray Reports Operating Results
For the Three Months and Year Ended December 31, 2007
Atlanta, Georgia March 13, 2008. . . Gray Television, Inc. (Gray, we or us) (NYSE: GTN)
today announced results from operations for the three months (fourth quarter) and year ended
December 31, 2007 as compared to the three months and year ended December 31, 2006.
Comments on As Reported Results of Operations for the Three Months Ended December 31, 2007:
For the three months ended December 31, 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 $17.6 million, or 17%, to
$84.3 million due primarily to decreased political advertising revenues partially offset by
increased local advertising revenue and national advertising revenue in the current period.
On an as reported basis:
Political advertising revenues decreased $23.0 million, or 90%, to $2.6 million reflecting the
influence of the 2006 elections.
Local advertising revenue increased $3.1 million, or 6%, to $54.2 million and national
advertising revenue increased $0.8 million, or 4%, to $21.2 million.
Internet advertising revenue increased $0.7 million, or 36%, to $2.7 million and retransmission
consent revenue increased $0.5 million, or 112%, to $1.0 million. In our previous disclosures,
we had included internet advertising revenue with local advertising revenue and retransmission
consent revenue was included with production and other revenue. We are now presenting internet
advertising revenue and retransmission consent revenue separately.
Operating expenses.
On an as reported basis, total broadcast expenses (before depreciation, amortization and loss on
disposal of assets) decreased $1.2 million, or 2%, to $52.2 million. The decrease primarily
reflects reduced national sales representative commissions on the reduced political revenues.
On an as reported basis, corporate and administrative expenses, before depreciation, amortization
and loss on disposal of assets, decreased $1.4 million, or 29%, to $3.5 million due primarily to
incremental decrease in legal expense and non-cash stock based compensation expense. We recorded
non-cash stock based compensation expense for the three months ended December 31, 2007 and 2006 of
$134,000 and $511,000, respectively.
4370 Peachtree Road, NE * Atlanta, GA 30319
(404) 504-9828 * Fax (404) 261-9607
Comments on Results of Operations for the Year Ended December 31, 2007:
Due to the significance of WNDU to our results of operations, Grays pro forma broadcast results
for the year ended December 31, 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 $27.4 million, or
8%, to $307.3 million due primarily to decreased political advertising revenues and decreased
national advertising revenues partially offset by increased local advertising revenue in the
current period.
On a pro forma(1) basis:
Political advertising revenues decreased $35.0 million, or 82%, to $7.8 million reflecting the
influence of the 2006 elections.
Local advertising revenue increased $6.7 million, or 3%, to $200.7 million and national
advertising revenue decreased $1.8 million, or 2%, to $77.4 million.
Internet advertising revenue increased $1.9 million, or 25%, to $9.5 million and retransmission
consent revenue increased $0.9 million, or 56%, to $2.4 million. In our previous disclosures, we
had included internet advertising revenue with local advertising revenue and retransmission
consent revenue was included with production and other revenue. We are now presenting internet
advertising revenue and retransmission consent revenue separately.
Operating expenses.
On a pro forma(1) basis, total broadcast expenses (before depreciation, amortization
and loss on disposal of assets) increased $6.0 million, or 3%, to $199.7 million.
On a pro forma(1) basis, operation of our digital second channels is attributed for
$3.1 million of the overall increase and reflects the expansion of the number of digital second
channels to 40 as of December 31, 2007.
On a pro forma(1) basis, the remaining $2.9 million of the overall increase is
attributable to the operation of our primary channels and reflects routine increases in payroll,
programming and promotion.
On an as reported basis, corporate and administrative expenses, before depreciation, amortization
and loss on disposal of assets, remained consistent with that of the prior year at $15.1 million.
We recorded non-cash stock based compensation expense during the year ended December 31, 2007 and
2006 of $1.2 million and $1.1 million, respectively.
Internet Initiatives:
We have continued to expand our internet initiatives in each of our markets. Our focus has been to
expand local content to attract traffic to our web sites.
This strong revenue growth reflects the significantly increased traffic to our websites as
illustrated below by the aggregate page views reported by our web sites in 2007 compared to 2006.
Gray Television, Inc.
Earnings Release for the three months and year ended December 31, 2007
2 of 9
Gray Websites Aggregate Page Views
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Year Ended December 31, |
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% |
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2007 |
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2006 |
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Change |
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(in millions) |
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Total Aggregate Page Views (including video plays
and cell phone page views) |
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424.4 |
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251.9 |
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68 |
% |
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Video Plays Only |
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32.5 |
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13.5 |
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141 |
% |
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Cell Phone Page Views Only |
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25.6 |
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7.7 |
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232 |
% |
We attribute the increase in our web traffic to increased posting of local content and to increased
public awareness of our sites as the result of our on-air promotion of our sites.
The aggregate internet revenues discussed above are derived from two sources. The first source is
advertising or sponsorship opportunities directly on our web sites. We call this direct internet
revenue. The other source is television advertising time purchased by our clients to directly
promote their involvement in our web sites. We refer to this internet revenue source as internet
related commercial time sales.
In the future we anticipate our direct internet revenue will grow at a significantly faster pace
relative to our internet related commercial time sales.
Other Financial Data on an as reported basis (in thousands):
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December 31, 2007 |
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December 31, 2006 |
Cash |
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$ |
15,338 |
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$ |
4,741 |
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Total debt(2) |
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925,000 |
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851,654 |
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Preferred stock |
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37,451 |
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Available credit under senior credit facility |
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100,000 |
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97,000 |
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Year Ended December 31, |
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2007 |
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2006 |
Net cash provided by operating activities |
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$ |
28,360 |
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$ |
79,860 |
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Net cash used in investing activities |
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(25,662 |
) |
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(129,305 |
) |
Net cash provided by financing activities |
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7,899 |
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44,871 |
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For the year ended December 31, 2007, we repurchased 647,800 shares of our common stock for $5.5
million at an average price per share of $8.49. For the year ended December 31, 2006, we
repurchased 902,200 shares of our common stock for $5.6 million at an average price per share of
$6.21. The repurchased common stock is held in treasury.
A detailed table of operating results follows on the next page.
Gray Television, Inc.
Earnings Release for the three months and year ended December 31, 2007
3 of 9
Gray Television, Inc.
Selected Operating Data (Unaudited)
(in thousands, except for per share data and percentages)
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As Reported |
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Three Months Ended |
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December 31, |
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% |
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2007 |
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2006 |
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Change |
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Revenues (less agency commissions) |
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$ |
84,272 |
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$ |
101,920 |
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(17 |
)% |
Operating expenses before depreciation,
amortization and loss on disposal of assets, net: |
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Broadcast |
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52,238 |
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53,444 |
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(2 |
)% |
Corporate and administrative |
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3,513 |
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4,956 |
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(29 |
)% |
Depreciation and amortization
of intangible assets |
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9,335 |
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9,698 |
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(4 |
)% |
(Gain) loss on disposals of assets, net |
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(370 |
) |
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528 |
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(170 |
)% |
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64,716 |
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68,626 |
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(6 |
)% |
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Operating income |
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19,556 |
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33,294 |
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(41 |
)% |
Other income (expense): |
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Miscellaneious income (expense), net |
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(13 |
) |
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181 |
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(107 |
)% |
Interest expense |
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(16,580 |
) |
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(17,123 |
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(3 |
)% |
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Income (loss) before income tax |
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2,963 |
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16,352 |
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Income tax expense |
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1,478 |
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7,765 |
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Net income |
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1,485 |
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8,587 |
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Preferred dividends (includes accretion of issuance
cost of $0 and $21, respectively ) |
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778 |
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Net income available to common stockholders |
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$ |
1,485 |
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$ |
7,809 |
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Basic per share information: |
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Net income available to common stockholders |
|
$ |
0.03 |
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$ |
0.16 |
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Weighted average shares outstanding |
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47,969 |
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|
48,040 |
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0 |
% |
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Diluted per share information: |
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Net income available to common stockholders |
|
$ |
0.03 |
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$ |
0.16 |
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|
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|
Weighted average shares outstanding |
|
|
48,034 |
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|
48,076 |
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|
0 |
% |
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Political revenue (less agency commission) |
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$ |
2,627 |
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$ |
25,605 |
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(90 |
)% |
Gray Television, Inc.
Earnings Release for the three months and year ended December 31, 2007
4 of 9
Gray Television, Inc.
Selected Operating Data (Unaudited)
(in thousands, except for per share data and percentages)
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As Reported |
|
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Pro Forma(1) |
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Years Ended |
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|
Years Ended |
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|
December 31, |
|
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December 31, |
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% |
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% |
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|
2007 |
|
|
2006 |
|
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Change |
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2007 |
|
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2006 |
|
|
Change |
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|
in thousands, except for percentages |
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Revenues (less agency commissions) |
|
$ |
307,288 |
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|
$ |
332,137 |
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(7 |
)% |
|
$ |
307,288 |
|
|
$ |
334,722 |
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|
|
(8 |
)% |
Operating expenses before depreciation, amortization and
loss on disposal of assets, net: |
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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Broadcast |
|
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199,687 |
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|
191,502 |
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|
4 |
% |
|
|
199,687 |
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|
|
193,639 |
|
|
|
3 |
% |
Corporate and administrative |
|
|
15,090 |
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|
|
15,097 |
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|
|
0 |
% |
|
|
15,090 |
|
|
|
15,097 |
|
|
|
0 |
% |
Depreciation and amortization of intangible assets |
|
|
39,383 |
|
|
|
36,526 |
|
|
|
8 |
% |
|
|
39,383 |
|
|
|
37,194 |
|
|
|
6 |
% |
(Gain) loss on disposals of assets, net |
|
|
(248 |
) |
|
|
1,021 |
|
|
|
(124 |
)% |
|
|
(248 |
) |
|
|
1,021 |
|
|
|
(124 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
253,912 |
|
|
|
244,146 |
|
|
|
4 |
% |
|
|
253,912 |
|
|
|
246,951 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
53,376 |
|
|
|
87,991 |
|
|
|
(39 |
)% |
|
|
53,376 |
|
|
|
87,771 |
|
|
|
(39 |
)% |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous income, net |
|
|
972 |
|
|
|
677 |
|
|
|
44 |
% |
|
|
972 |
|
|
|
677 |
|
|
|
44 |
% |
Interest expense |
|
|
(67,189 |
) |
|
|
(66,787 |
) |
|
|
1 |
% |
|
|
(67,189 |
) |
|
|
(67,212 |
) |
|
|
0 |
% |
Loss on early extinguishment of debt |
|
|
(22,853 |
) |
|
|
(347 |
) |
|
|
|
|
|
|
(22,853 |
) |
|
|
(347 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income tax benefit |
|
|
(35,694 |
) |
|
|
21,534 |
|
|
|
|
|
|
|
(35,694 |
) |
|
|
20,889 |
|
|
|
|
|
Income tax expense (benefit) |
|
|
(12,543 |
) |
|
|
9,823 |
|
|
|
|
|
|
|
(12,543 |
) |
|
|
9,588 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
(23,151 |
) |
|
|
11,711 |
|
|
|
|
|
|
|
(23,151 |
) |
|
|
11,301 |
|
|
|
|
|
Preferred dividends (includes accretion of issuance cost of
$439, $111, $439, $111, respectively ) |
|
|
1,626 |
|
|
|
3,247 |
|
|
|
|
|
|
|
1,626 |
|
|
|
3,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders |
|
$ |
(24,777 |
) |
|
$ |
8,464 |
|
|
|
|
|
|
$ |
(24,777 |
) |
|
$ |
8,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
Basic per share information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders |
|
$ |
(0.52 |
) |
|
$ |
0.17 |
|
|
|
|
|
|
$ |
(0.52 |
) |
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
47,788 |
|
|
|
48,408 |
|
|
|
(1 |
)% |
|
|
47,788 |
|
|
|
48,408 |
|
|
|
(1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted per share information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common stockholders |
|
$ |
(0.52 |
) |
|
$ |
0.17 |
|
|
|
|
|
|
$ |
(0.52 |
) |
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
47,788 |
|
|
|
48,425 |
|
|
|
(1 |
)% |
|
|
47,788 |
|
|
|
48,425 |
|
|
|
(1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Political revenue (less agency commission) |
|
$ |
7,808 |
|
|
$ |
42,682 |
|
|
|
(82 |
)% |
|
$ |
7,808 |
|
|
$ |
42,762 |
|
|
|
(82 |
)% |
|
|
|
|
|
|
Gray Television, Inc. |
|
|
Earnings Release for the three months and year ended December 31, 2007
|
|
Page 5 of 9 |
Guidance for the First Quarter of 2008:
We currently anticipate that our broadcasting results of operations for the three months ending
March 31, 2008 (the first quarter) will approximate the ranges presented in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
2008 |
|
Change |
|
2008 |
|
Change |
|
|
|
|
Guidance |
|
From |
|
Guidance |
|
From |
|
|
|
|
Low |
|
Actual |
|
High |
|
Actual |
|
Actual |
Selected operating data: |
|
Range |
|
2007 |
|
Range |
|
2007 |
|
2007 |
|
|
(in thousands, except for percentages) |
OPERATING REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues (less agency
commissions) |
|
$ |
69,700 |
|
|
|
0 |
% |
|
$ |
70,500 |
|
|
|
1 |
% |
|
$ |
69,681 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(before depreciation,
amortization and other
expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcast |
|
$ |
49,800 |
|
|
|
2 |
% |
|
$ |
50,500 |
|
|
|
3 |
% |
|
$ |
48,818 |
|
Corporate and administrative |
|
$ |
3,600 |
|
|
|
(11 |
)% |
|
$ |
3,900 |
|
|
|
(4 |
)% |
|
$ |
4,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER SELECTED DATA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcast political revenues
(less agency commissions) |
|
$ |
2,500 |
|
|
|
|
|
|
$ |
2,600 |
|
|
|
|
|
|
$ |
1,097 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense for non-cash
contributions to 401(k) plan |
|
$ |
575 |
|
|
|
|
|
|
$ |
625 |
|
|
|
|
|
|
$ |
671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense for corporate non-cash
stock based compensation |
|
$ |
275 |
|
|
|
|
|
|
$ |
350 |
|
|
|
|
|
|
$ |
520 |
|
Comments on Guidance:
The total revenue results anticipated for the first quarter of 2008 reflect the incremental
increase in political revenues. Local non-political advertising for first quarter 2008 is
currently anticipated to be comparable to the results of 2007. National non-political
advertising revenue is currently anticipated to be down 3% to 5% in the first quarter of 2008
compared to first quarter 2007. Internet revenue for the first quarter of 2008 is currently
anticipated to increase approximately 20% over the first quarter of 2007.
The increase in broadcast operating expenses, before depreciation, amortization and loss on
disposal of assets, primarily reflects routine increases in payroll costs. For the full year of
2008, broadcast operating expenses, before depreciation, amortization and loss on disposal of
assets are currently anticipated to increase less than 3% over full year 2007 results with national
sales representative commissions on anticipated political revenue being a significant component of
any overall increase.
|
|
|
|
|
|
Gray Television, Inc. |
|
|
Earnings Release for the three months and year ended December 31, 2007
|
|
Page 6 of 9 |
Revenue on an as reported basis by quarter (in thousands):
In our previous disclosures, we had included internet advertising revenue with local advertising
revenue and retransmission consent revenue was included with production and other revenue. We are
now presenting internet advertising revenue and retransmission consent revenue separately. The
table below presents our expanded disclosure by quarter for 2007 and 2006 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 Fiscal Quarters Ended |
|
|
2007 |
|
|
|
March 31 |
|
|
June 30 |
|
|
Sept. 30 |
|
|
Dec. 31 |
|
|
Fiscal Year |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Local |
|
$ |
46,697 |
|
|
$ |
52,009 |
|
|
$ |
47,761 |
|
|
$ |
54,219 |
|
|
$ |
200,686 |
|
National |
|
|
17,093 |
|
|
|
19,862 |
|
|
|
19,237 |
|
|
|
21,173 |
|
|
|
77,365 |
|
Internet |
|
|
2,058 |
|
|
|
2,267 |
|
|
|
2,505 |
|
|
|
2,676 |
|
|
|
9,506 |
|
Political |
|
|
1,097 |
|
|
|
2,634 |
|
|
|
1,450 |
|
|
|
2,627 |
|
|
|
7,808 |
|
Retransmission consent |
|
|
454 |
|
|
|
488 |
|
|
|
501 |
|
|
|
993 |
|
|
|
2,436 |
|
Production and other |
|
|
2,094 |
|
|
|
2,294 |
|
|
|
1,951 |
|
|
|
2,380 |
|
|
|
8,719 |
|
Network compensation |
|
|
188 |
|
|
|
196 |
|
|
|
180 |
|
|
|
204 |
|
|
|
768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
69,681 |
|
|
$ |
79,750 |
|
|
$ |
73,585 |
|
|
$ |
84,272 |
|
|
$ |
307,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 Fiscal Quarters Ended |
|
|
2006 |
|
|
|
March 31 |
|
|
June 30 |
|
|
Sept. 30 |
|
|
Dec. 31 |
|
|
Fiscal Year |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Local |
|
$ |
44,902 |
|
|
$ |
50,387 |
|
|
$ |
45,942 |
|
|
$ |
51,117 |
|
|
$ |
192,348 |
|
National |
|
|
17,202 |
|
|
|
21,382 |
|
|
|
19,508 |
|
|
|
20,400 |
|
|
|
78,492 |
|
Internet |
|
|
1,620 |
|
|
|
2,231 |
|
|
|
1,794 |
|
|
|
1,962 |
|
|
|
7,607 |
|
Political |
|
|
1,776 |
|
|
|
4,706 |
|
|
|
10,595 |
|
|
|
25,605 |
|
|
|
42,682 |
|
Retransmission consent |
|
|
365 |
|
|
|
339 |
|
|
|
390 |
|
|
|
469 |
|
|
|
1,563 |
|
Production and other |
|
|
2,149 |
|
|
|
1,986 |
|
|
|
2,104 |
|
|
|
2,117 |
|
|
|
8,356 |
|
Network compensation |
|
|
220 |
|
|
|
360 |
|
|
|
259 |
|
|
|
250 |
|
|
|
1,089 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
68,234 |
|
|
$ |
81,391 |
|
|
$ |
80,592 |
|
|
$ |
101,920 |
|
|
$ |
332,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The aggregate internet revenues presented above are derived from two sources. The first source is
advertising or sponsorship opportunities directly on our web sites. We call this direct internet
revenue. The other source is television advertising time purchased by our clients to directly
promote their involvement in our web sites. We refer to this internet revenue source as internet
related commercial time sales.
Conference Call Information:
We will host a conference call to discuss our fourth quarter operating results on March 13, 2008.
The call will begin at 10:00 AM Eastern Time. The live dial-in number is 1 (888) 211-4495 and the
confirmation code is 9283465. 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 until
April 12, 2008. The confirmation code for the taped replay is 9283465.
|
|
|
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 |
Reconciliations:
|
|
|
|
|
|
Gray Television, Inc. |
|
|
Earnings Release for the three months and year ended December 31, 2007
|
|
Page 7 of 9 |
Reconciliation of net income (loss) to the Non-GAAP terms (in thousands):
|
|
|
|
|
|
|
|
|
|
|
As Reported |
|
|
|
Three Months Ended |
|
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
Net income |
|
$ |
1,485 |
|
|
$ |
8,587 |
|
Adjustments to reconcile to Broadcast Cash Flow Less Cash Corporate Expenses: |
|
|
|
|
|
|
|
|
Depreciation and amortization of intangible assets |
|
|
9,335 |
|
|
|
9,698 |
|
Amortization of non-cash stock based compensation |
|
|
134 |
|
|
|
511 |
|
(Gain) loss on disposals of assets, net |
|
|
(370 |
) |
|
|
528 |
|
Miscellaneous (income) expense, net |
|
|
13 |
|
|
|
(181 |
) |
Interest expense |
|
|
16,580 |
|
|
|
17,123 |
|
Income tax expense |
|
|
1,478 |
|
|
|
7,765 |
|
Amortization of program broadcast rights |
|
|
3,849 |
|
|
|
3,803 |
|
Common stock contributed to 401(k) plan excluding
corporate 401(k) contributions |
|
|
400 |
|
|
|
556 |
|
Network compensation revenue recognized |
|
|
(204 |
) |
|
|
(250 |
) |
Network compensation per network affiliation agreement |
|
|
66 |
|
|
|
539 |
|
Payments for program broadcast rights |
|
|
(2,594 |
) |
|
|
(4,482 |
) |
|
|
|
|
|
|
|
Broadcast Cash Flow Less Cash Corporate Expenses |
|
|
30,172 |
|
|
|
44,197 |
|
Corporate and administrative expenses excluding
amortization of non-cash stock based compensation |
|
|
3,379 |
|
|
|
4,445 |
|
|
|
|
|
|
|
|
Broadcast Cash Flow |
|
$ |
33,551 |
|
|
$ |
48,642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported |
|
|
Pro Forma (1) |
|
|
|
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
2006 |
|
Net income |
|
$ |
(23,151 |
) |
|
$ |
11,711 |
|
|
$ |
(23,151 |
) |
|
$ |
11,301 |
|
Adjustments to reconcile to Broadcast Cash Flow Less
Cash Corporate Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization of intangible assets |
|
|
39,383 |
|
|
|
36,526 |
|
|
|
39,383 |
|
|
|
37,194 |
|
Amortization of non-cash stock based compensation |
|
|
1,248 |
|
|
|
1,092 |
|
|
|
1,248 |
|
|
|
1,092 |
|
(Gain) loss on disposals of assets, net |
|
|
(248 |
) |
|
|
1,021 |
|
|
|
(248 |
) |
|
|
1,021 |
|
Miscellaneous (income), net |
|
|
(972 |
) |
|
|
(677 |
) |
|
|
(972 |
) |
|
|
(677 |
) |
Interest expense |
|
|
67,189 |
|
|
|
66,787 |
|
|
|
67,189 |
|
|
|
67,212 |
|
Loss on early extinguishment of debt |
|
|
22,853 |
|
|
|
347 |
|
|
|
22,853 |
|
|
|
347 |
|
Income tax expense (benefit) |
|
|
(12,543 |
) |
|
|
9,823 |
|
|
|
(12,543 |
) |
|
|
9,588 |
|
Amortization of program broadcast rights |
|
|
15,194 |
|
|
|
14,234 |
|
|
|
15,194 |
|
|
|
14,234 |
|
Common stock contributed to 401(k) plan
excluding corporate 401(k) contributions |
|
|
2,150 |
|
|
|
2,234 |
|
|
|
2,150 |
|
|
|
2,234 |
|
Network compensation revenue recognized |
|
|
(768 |
) |
|
|
(1,089 |
) |
|
|
(768 |
) |
|
|
(1,089 |
) |
Network compensation per network affiliation agreement |
|
|
301 |
|
|
|
2,216 |
|
|
|
301 |
|
|
|
2,216 |
|
Payments for program broadcast rights |
|
|
(14,101 |
) |
|
|
(14,839 |
) |
|
|
(14,101 |
) |
|
|
(14,839 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcast Cash Flow Less Cash Corporate Expenses |
|
|
96,535 |
|
|
|
129,386 |
|
|
|
96,535 |
|
|
|
129,834 |
|
Corporate and administrative expenses excluding
amortization of non-cash stock based compensation |
|
|
13,842 |
|
|
|
14,005 |
|
|
|
13,842 |
|
|
|
14,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcast Cash Flow |
|
$ |
110,377 |
|
|
$ |
143,391 |
|
|
$ |
110,377 |
|
|
$ |
143,839 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See the next page for the definition of Non-GAAP terms.
|
|
|
|
|
|
Gray Television, Inc. |
|
|
Earnings Release for the three months and year ended December 31, 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 us 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 40 digital second channels including 1 ABC, 5 Fox, 8 CW and 16 MyNetworkTV
affiliates plus 8 local news/weather channels and 2 independent channels in certain 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 first quarter of 2008 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 is as of March 13, 2008. 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 Managements 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 was filed with the SEC and is available at the SECs website at www.sec.gov.
|
|
|
|
|
|
Gray Television, Inc. |
|
|
Earnings Release for the three months and year ended December 31, 2007
|
|
Page 9 of 9 |