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 fiscal quarter ended September 30, 2002
| ¨ | 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: 333-62916-02
MISSION BROADCASTING, INC.
(Exact name of registrant as specified in its charter)
| Delaware |
51-0388022 | |
| (State of Organization or Incorporation) |
(IRS Employer Identification No.) | |
| 409 Lackawanna Avenue Scranton, PA 18503 |
(570) 961-2222 | |
| (Address of Principal Executive Offices, including Zip Code) |
(Registrant’s Telephone Number, Including Area Code) |
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 it was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of September 30, 2002, Mission Broadcasting, Inc. had one shareholder, David S. Smith. Mr. Smith had 1,000 shares of common stock outstanding.
| Page | ||||
| PART I |
||||
| ITEM 1. |
Financial Statements (Unaudited) |
— | ||
| 1 | ||||
| Statements of Operations for the three months and nine months ended September 30, 2001 and 2002 |
2 | |||
| 3 | ||||
| Statements of Cash Flows for the nine months ended September 30, 2001 and 2002 |
4 | |||
| 5 | ||||
| ITEM 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12 | ||
| ITEM 3. |
18 | |||
| ITEM 4. |
19 | |||
| PART II |
||||
| ITEM 1. |
20 | |||
| ITEM 2. |
20 | |||
| ITEM 3. |
20 | |||
| ITEM 4. |
20 | |||
| ITEM 5. |
20 | |||
| ITEM 6. |
20 | |||
| 21 | ||||
| 22 | ||||
1
MISSION BROADCASTING, INC.
| December 31, 2001 |
September 30, 2002 |
|||||||
| (Unaudited) |
(Unaudited) |
|||||||
| (dollars in thousands) |
||||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
584 |
|
$ |
441 |
| ||
| Accounts receivable, net of allowance for doubtful accounts of $54 and $58, respectively |
|
1,726 |
|
|
2,399 |
| ||
| Current portion of broadcast rights |
|
1,486 |
|
|
3,142 |
| ||
| Prepaid expenses and other current assets |
|
20 |
|
|
129 |
| ||
| Taxes receivable |
|
–– |
|
|
37 |
| ||
| Total current assets |
|
3,816 |
|
|
6,148 |
| ||
| Property and equipment, net |
|
4,034 |
|
|
5,820 |
| ||
| Broadcast rights |
|
996 |
|
|
1,624 |
| ||
| Other noncurrent assets |
|
6,015 |
|
|
13 |
| ||
| Goodwill, net |
|
7,383 |
|
|
7,808 |
| ||
| Intangible assets, net |
|
17,326 |
|
|
27,357 |
| ||
| Total assets |
$ |
39,570 |
|
$ |
48,770 |
| ||
| Liabilities and shareholder’s deficit |
||||||||
| Current liabilities: |
||||||||
| Current portion of broadcast rights payable |
$ |
1,477 |
|
$ |
3,250 |
| ||
| Accounts payable |
|
67 |
|
|
128 |
| ||
| Accrued expenses |
|
192 |
|
|
1,606 |
| ||
| Taxes payable |
|
1 |
|
|
–– |
| ||
| Interest payable |
|
262 |
|
|
101 |
| ||
| Due to Nexstar Finance, L.L.C. |
|
6,214 |
|
|
5,715 |
| ||
| Current portion of capital lease obligations |
|
–– |
|
|
4 |
| ||
| Deferred revenue |
|
25 |
|
|
70 |
| ||
| Total current liabilities |
|
8,238 |
|
|
10,874 |
| ||
| Debt |
|
46,143 |
|
|
53,643 |
| ||
| Broadcast rights payable |
|
1,115 |
|
|
1,910 |
| ||
| Total liabilities |
|
55,496 |
|
|
66,427 |
| ||
| Commitments and contingencies (Note 10) |
||||||||
| Shareholder’s deficit: |
||||||||
| Common stock, $1 dollar par value; 1,000 shares authorized; 1,000 shares issued and outstanding at December 31, 2001 and September 30, 2002, respectively |
|
1 |
|
|
1 |
| ||
| Subscription receivable |
|
(1 |
) |
|
(1 |
) | ||
| Accumulated deficit |
|
(15,926 |
) |
|
(17,657 |
) | ||
| Total shareholder’s deficit |
|
(15,926 |
) |
|
(17,657 |
) | ||
| Total liabilities and shareholder’s deficit |
$ |
39,570 |
|
$ |
48,770 |
| ||
The accompanying notes are an integral part of these financial statements.
1
MISSION BROADCASTING, INC.
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2001 |
2002 |
2001 |
2002 |
|||||||||||||
| (Unaudited) |
(Unaudited) |
|||||||||||||||
| (dollars in thousands) |
(dollars in thousands) |
|||||||||||||||
| Broadcast revenue (excluding trade and barter) |
$ |
1,772 |
|
$ |
3,650 |
|
$ |
5,674 |
|
$ |
10,380 |
| ||||
| Less: commissions |
|
(267 |
) |
|
(533 |
) |
|
(859 |
) |
|
(1,468 |
) | ||||
| Net broadcast revenue (excluding trade and barter) |
|
1,505 |
|
|
3,117 |
|
|
4,815 |
|
|
8,912 |
| ||||
| Trade and barter revenue |
|
307 |
|
|
337 |
|
|
920 |
|
|
991 |
| ||||
| Revenue from Nexstar Finance, L.L.C. |
|
472 |
|
|
423 |
|
|
1,590 |
|
|
1,409 |
| ||||
| Total net revenue |
|
2,284 |
|
|
3,877 |
|
|
7,325 |
|
|
11,312 |
| ||||
| Operating expenses: |
||||||||||||||||
| Direct operating expenses (exclusive of depreciation and amortization shown separately below) |
|
223 |
|
|
424 |
|
|
658 |
|
|
1,542 |
| ||||
| Selling, general and administrative expenses (exclusive of depreciation and amortization shown separately below) |
|
429 |
|
|
841 |
|
|
1,426 |
|
|
2,575 |
| ||||
| Selling, general and administrative expense paid to |
|
998 |
|
|
1,232 |
|
|
2,995 |
|
|
3,215 |
| ||||
| Amortization of broadcast rights |
|
459 |
|
|
738 |
|
|
1,469 |
|
|
1,685 |
| ||||
| Amortization of intangible assets |
|
432 |
|
|
358 |
|
|
1,297 |
|
|
775 |
| ||||
| Depreciation |
|
328 |
|
|
411 |
|
|
997 |
|
|
1,037 |
| ||||
| Total operating expenses |
|
2,869 |
|
|
4,004 |
|
|
8,842 |
|
|
10,829 |
| ||||
| Loss (income) from operations |
|
(585 |
) |
|
(127 |
) |
|
(1,517 |
) |
|
483 |
| ||||
| Interest expense, including amortization of debt financing costs |
|
(760 |
) |
|
(714 |
) |
|
(3,066 |
) |
|
(2,175 |
) | ||||
| Interest income |
|
3 |
|
|
2 |
|
|
10 |
|
|
11 |
| ||||
| Other expense, net |
|
–– |
|
|
— |
|
|
(314 |
) |
|
(3 |
) | ||||
| Loss before income taxes |
|
(1,342 |
) |
|
(839 |
) |
|
(4,887 |
) |
|
(1,684 |
) | ||||
| Income tax (expense) benefit |
|
(2 |
) |
|
99 |
|
||||||||||