MISSION BROADCASTING OF WICHITA FALLS INC - 10-Q Quarterly Report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

for the fiscal quarter ended March 31, 2003

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 March 31, 2003, Mission Broadcasting, Inc. had one shareholder, David S. Smith. Mr. Smith owned 1,000 shares of common stock, at March 31, 2003.

TABLE OF CONTENTS

		Page
PART I
ITEM 1.	Financial Statements (Unaudited)
	Balance Sheets—December 31, 2002 and March 31, 2003	1
	Statements of Operations for the three months ended March 31, 2002 and 2003	2
	Statements of Changes in Shareholder’s Deficit for the year ended December 31, 2002 and for the three months ended March 31, 2002 and 2003	3
	Statements of Cash Flows for the three months ended March 31, 2002 and 2003	4
	Notes to Financial Statements	5

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	19

ITEM 4.	Controls and Procedures	20

PART II

ITEM 1.	Legal Proceedings	21

ITEM 2.	Changes in Securities and Use of Proceeds	21

ITEM 3.	Defaults Upon Senior Securities	21

ITEM 4.	Submission of Matters to a Vote of Security Holders	21

ITEM 5.	Other Information	21

ITEM 6.	Exhibits and Reports on Form 8-K	21

SIGNATURES		22

CERTIFICATION		23

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MISSION BROADCASTING, INC.

BALANCE SHEETS

	December 31, 2002			March 31, 2003
	(Unaudited)
	(dollars in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	503		$	1,275
Accounts receivable, net of allowance for doubtful accounts of $55 and $174, respectively		2,690			2,909
Current portion of broadcast rights		1,799			1,522
Taxes receivable		62			62
Prepaid expenses and other current assets		13			190

Total current assets		5,067			5,958
Property and equipment, net		5,759			5,776
Broadcast rights		1,715			1,434
Other noncurrent assets		1,569			1,569
Goodwill		8,046			8,064
Intangible assets, net		26,764			26,502

Total assets	$	48,920		$	49,303


LIABILITIES AND SHAREHOLDER’S DEFICIT
Current liabilities:
Current portion of debt	$	—		$	138
Current portion of broadcast rights payable		2,024			1,663
Accounts payable		69			186
Accrued expenses		407			1,758
Interest payable		80			274
Due to Nexstar Finance, L.L.C.		6,801			6,949

Total current liabilities		9,381			10,968
Debt		55,143			56,512
Broadcast rights payable		2,047			1,714
Deferred tax liability		—			332

Total liabilities		66,571			69,526

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, 2002 and March 31, 2003, respectively		1			1
Subscription receivable		(1	)		(1	)
Accumulated deficit		(17,651	)		(20,223	)

Total shareholder’s deficit		(17,651	)		(20,223	)

Total liabilities and shareholder’s deficit	$	48,920		$	49,303

The accompanying notes are an integral part of these financial statements.

MISSION BROADCASTING, INC.

STATEMENTS OF OPERATIONS

	Three Months Ended March 31,
	2002			2003
	(Unaudited)
	(dollars in thousands)
Revenue (excluding trade and barter)	$	2,921		$	3,721
Less: commissions		397			523

Net broadcast revenue (excluding trade and barter)		2,524			3,198
Trade and barter revenue		336			395
Revenue from Nexstar Finance, L.L.C.		499			548

Total net revenue		3,359			4,141

Operating expenses:
Direct operating expenses (exclusive of depreciation and amortization, shown separately below)		700			742
Selling, general, and administrative expenses (exclusive of depreciation and amortization, shown separately below)		859			1,150
Selling, general and administrative expenses paid to Nexstar Finance, L.L.C.		750			1,232
Amortization of broadcast rights		478			594
Amortization of intangible assets		205			563
Depreciation		313			300

Total operating expenses		3,305			4,581

Income (loss) from operations		54			(440	)
Interest expense, including amortization of debt financing costs		(712	)		(1,794	)
Interest income		7			2
Other (expense) income, net		(3	)		6

Loss before income taxes		(654	)		(2,226	)
Income tax expense		(89	)		(346	)

Net loss	$	(743	)	$	(2,572	)

The accompanying notes are an integral part of these financial statements.

MISSION BROADCASTING, INC.

STATEMENTS OF CHANGES IN SHAREHOLDER’S DEFICIT

	Common Stock			Subscription Receivable			Accumulated Deficit			Total Shareholder’s Deficit
	Shares	Par Value		Subscription Receivable			Accumulated Deficit			Total Shareholder’s Deficit
				(dollars in thousands)
Balance at January 1, 2002 (Unaudited)	1,000	$	1	$	(1	)	$	(15,926	)	$	(15,926	)
Net loss	—		—		—			(743	)		(743	)

Balance at March 31, 2002 (Unaudited)	1,000		1		(1	)		(16,669	)		(16,669	)
Net loss	—		—		—			(982	)		(982	)

Balance at December 31, 2002 (Unaudited)	1,000		1		(1	)		(17,651	)		(17,651	)
Net loss	—		—		—			(2,572	)	</

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