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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 29, 2002

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from                       to                    


Commission file number: 1-6383

MEDIA GENERAL, INC.
(Exact name of registrant as specified in its charter)

  Commonwealth of Virginia
(State or other jurisdiction of
incorporation or organization)

333 E. Franklin St., Richmond, VA
(Address of principal executive offices)		 54-0850433
(I.R.S. Employer
Identification No.)

23219
(Zip Code)


(804) 649-6000
(Registrant's telephone number, including area code)


N/A

(Former name, former address and former fiscal year,
if changed since last report.)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes                             No                 X                

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of November 3, 2002

Class A Common shares: 22,641,175
Class B Common shares:       555,992

Table of Contents

 

MEDIA GENERAL, INC.
TABLE OF CONTENTS
FORM 10-Q REPORT
September 29, 2002

  Page

Part I.    Financial Information

  Item 1. Financial Statements

    Consolidated Condensed Balance Sheets - September 29, 2002, and December 30, 2001  1

Consolidated Condensed Statements of Operations - Third quarter and nine months ended September 29, 2002, and September 30, 2001  3


Consolidated Condensed Statements of Cash Flows - Nine months ended September 29, 2002, and September 30, 2001  
 4
 
Notes to Consolidated Condensed Financial Statements  5

  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 18

  Item 4. Controls and Procedures 25

Part II.    Other Information

  Item 6. Exhibits and Reports on Form 8-K 25

    (a)    Exhibits

(b)    Reports on Form 8-K

Signatures 26

Certifications 27

Table of Contents

 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MEDIA GENERAL, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(000’s except shares)

  (Unaudited)    
  September 29,   December 30,
  2002   2001
 
 
ASSETS          
           
Current assets:
          
  Cash and cash equivalents
$
10,198
  
$
9,137
  Accounts receivable - net
  
97,591
    
112,431
  Inventories
  
6,103
    
4,860
  Other
  
38,202
    
36,610
 
 
     Total current assets
  
152,094
    
163,038
 
 
Investments in unconsolidated affiliates
  
98,171
    
114,588
           
Other assets
  
73,758
    
71,308
           
Property, plant and equipment - net
  
373,794
    
385,916
           
Excess of cost over fair value of net identifiable assets
          
  of acquired businesses - net
  
832,004
    
933,957
           
FCC licenses and other intangibles - net
  
823,261
    
865,252
 
 
 
$
2,353,082
  
$
2,534,059
 
 

See accompanying notes.

1

Table of Contents

 

MEDIA GENERAL, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(000’s except shares)

  (Unaudited)        
  September 29,     December 30,  
  2002     2001  
 
   
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY              
               
Current liabilities:
              
Accounts payable
$
25,249
    
$
19,909
  
Accrued expenses and other liabilities
  
92,617
      
80,588
  
Income taxes payable
  
1,331
      
 —
  
 
   
 
Total current liabilities
  
119,197
      
100,497
  
 
   
 
               
Long-term debt
  
672,934
      
777,662
  
               
Deferred income taxes
  
354,123
      
350,854
  
               
Other liabilities and deferred credits
  
138,539
      
141,378
  
               
Stockholders’ equity:
              
Preferred stock ($5 cumulative convertible),
              
par value $5 per share:
              
Authorized 5,000,000 shares;
              
none outstanding
              
Common stock, par value $5 per share:
              
Class A, authorized 75,000,000 shares; issued
              
22,613,360 and 22,420,065 shares
  
113,067
      
112,100
  
Class B, authorized 600,000 shares; issued
              
556,574 shares
  
2,783
      
2,783
  
Additional paid-in capital
  
17,245
      
10,006
  
Accumulated other comprehensive loss
  
(14,358
)
    
(21,013
)
Unearned compensation
  
(5,825
)
    
(6,780
)
Retained earnings
  
955,377
      
1,066,572
  
 
   
 
Total stockholders’ equity
  
1,068,289
      
1,163,668
  
 
   
 
 
$
2,353,082
    
$
2,534,059
  
 
   
 

See accompanying notes.

2

Table of Contents

MEDIA GENERAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(000’s except for per share data)

 
 Third Quarter Ended     Nine Months Ended  
 
   
 
 
   Sept. 29,       Sept. 30,       Sept. 29,       Sept. 30,  
 
   2002       2001       2002       2001  
 
   
   
   
 
Revenues
 $ 201,153     $ 193,052     $ 607,444     $ 597,680  
 
   
   
   
 
Operating costs:
                              
Production
   86,518       89,197       258,823       268,271  
Selling, general and administrative
   68,138       61,252       203,003       198,565  
Depreciation and amortization
   16,649       28,470       50,180       86,369  
 
   
   
   
 
Total operating costs
   171,305       178,919       512,006       553,205  
 
   
   
   
 
Operating income
   29,848       14,133       95,438       44,475  
 
   
   
   
 
Other income (expense):
                              
Interest expense
   (11,607 )     (13,948 )     (36,961 )     (40,372 )
Investment income (loss) - unconsolidated affiliates
   (4,423 )     3,246       (10,190 )     20,451  
Other, net
   2,562       (4,247 )     4,185       (7,261 )
 
   
   
   
 
Total other expense
   (13,468 )     (14,949 )     (42,966 )     (27,182 )
 
   
   
   
 
Income (loss) from continuing operations before income taxes and cumulative effect of change in accounting principle
   16,380       (816 )     52,472       17,293  
Income taxes
   6,869       200       20,674       7,263  
 
   
   
   
 
Income (loss) from continuing operations before cumulative effect of change in accounting principle
   9,511       (1,016 )     31,798       10,030  
Gain on sale of operations (net of tax)
   —       280       —       280  
Cumulative effect of change in accounting principle (net of income tax benefit of $12,188)
   —       —       (126,336 )     —  
 
   
   
   
 
Net income (loss)
 $ 9,511     $ (736 )   $ (94,538 )   $ 10,310  
 
   
   
   
 
Earnings (loss) per common share:
                              
Income (loss) from continuing operations before cumulative effect of change in accounting principle
 $ 0.41     $ (0.04 )   $ 1.39     $ 0.44  
Income from discontinued operations
   —       0.01       —       0.01  
Cumulative effect of change in accounting principle
   —       —       (5.51 )     —  
 
   
   
   
 
Net income (loss)
 $ 0.41     $ (0.03 )   $ (4.12 )   $ 0.45  
 
   
   
   
 
Earnings (loss) per common share - assuming dilution:
                              
Income (loss) from continuing operations before cumulative effect of change in accounting principle
 $ 0.41     $ (0.04 )   $ 1.37     $ 0.44  
Income from discontinued operations
   —       0.01       —       0.01  
Cumulative effect of change in accounting principle
   —       —       (5.44 )     —  
 
   
   
   
 
Net income (loss)
 $ 0.41     $ (0.03 )   $ (4.07 )   $ 0.45  
 
   
   
   
 
Dividends paid per common share
 $ 0.18     $ 0.17   $ 0.54   $ 0.51  
 
   
   
   
 

See accompanying notes.

3

Table of Contents

MEDIA GENERAL, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)
(000’s)

  Nine Months Ended
 
 
  September 29,     September 30,  
  2002     2001  
 
   
 
Operating activities:
              
               
Net income (loss)
$
(94,538
)
  
$
10,310
  
               
Adjustments to reconcile net income (loss):
              
      Cumulative effect of change in accounting principle
  
126,336
      
 —
  
      Depreciation and amortization
  
50,180
      
86,369
  
      Deferred income taxes
  
9,505
      
1,781
  
      Investment (income) loss - unconsolidated affiliates
  
10,190
      
(20,451
)
      Distribution from unconsolidated affiliate
  
4,100
      
—
  
      Gain on disposition of Garden State Paper
  
—
      
(280
)
      Write-down of investments
  
1,160
      
4,149
  
      Change in assets and liabilities:
              
            Accounts receivable and inventories
  
14,097
      
17,094
  
            Accounts payable, accrued expenses, and
              
                  other liabilities
  
10,008
      
(11,475
)
            Other
  
351
      
3,352
  
 
   
 
Net cash provided by operating activities
  
131,389
      
90,849
  
 
   
 
               
Investing activities:
              
      Capital expenditures
  
(25,869
)
    
(39,656
)
      Purchases of businesses
  
(1,124
)
    
(1,752
)
      Other investments
  
(1,509
)
    
(4,764
)
      Other, net
  
5,432
      
4,147
  
 
   
 
Net cash used by investing activities
  
(23,070
)
    
(42,025
)