UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 March 31, 2004
| ¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Commission File Number 1-12187
(Exact name of registrant as specified in its charter)
| Delaware | 58-1620022 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
6205 Peachtree Dunwoody Road
Atlanta, Georgia 30328
(Address of principal executive offices and zip code)
(678) 645-0000
(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 the registrant 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 Exchange Act Rule 12b-2). Yes x No ¨
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class A common stock, par value of $0.33 – 41,805,688 shares outstanding as of March 31, 2004.
Class B common stock, par value of $0.33 – 58,733,016 shares outstanding as of March 31, 2004.
COX RADIO, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2004
| Page | ||||
| Part I – Financial Information | ||||
| Item 1. |
3 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15 | ||
| Item 3. |
20 | |||
| Item 4. |
20 | |||
| Part II - Other Information | ||||
| Item 1. |
21 | |||
| Item 2. |
Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
22 | ||
| Item 3. |
22 | |||
| Item 4. |
22 | |||
| Item 5. |
22 | |||
| Item 6. |
22 | |||
| 23 | ||||
Preliminary Note
This Quarterly Report on Form 10-Q is for the three-month period ended March 31, 2004. This Quarterly Report modifies and supersedes documents filed prior to this Quarterly Report. The SEC allows us to “incorporate by reference” information that we file with them, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report. In this Quarterly Report, “Cox Radio,” “we,” “us” and “our” refer to Cox Radio, Inc. and its subsidiaries.
2
Part I – FINANCIAL INFORMATION
COX RADIO, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| March 31, 2004 |
December 31, 2003 |
|||||||
| (Amounts in thousands, except share data) |
||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents |
$ | 3,784 | $ | 4,202 | ||||
| Accounts and notes receivable, less allowance for doubtful accounts of $4,077 and $4,229, respectively |
71,336 | 82,750 | ||||||
| Prepaid expenses and other current assets |
11,384 | 7,194 | ||||||
| Amounts due from Cox Enterprises. |
— | 6,284 | ||||||
| Total current assets |
86,504 | 100,430 | ||||||
| Property and equipment, net |
77,449 | 78,333 | ||||||
| FCC licenses and other intangible assets, net |
2,028,782 | 2,028,798 | ||||||
| Goodwill |
46,033 | 46,033 | ||||||
| Other assets |
23,374 | 23,432 | ||||||
| Total assets |
$ | 2,262,142 | $ | 2,277,026 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses |
$ | 23,311 | $ | 28,602 | ||||
| Accrued salaries and wages |
3,157 | 4,139 | ||||||
| Accrued interest |
4,917 | 7,230 | ||||||
| Income taxes payable |
10,988 | 10,937 | ||||||
| Amounts due to Cox Enterprises. |
1,975 | — | ||||||
| Other current liabilities |
3,954 | 2,924 | ||||||
| Total current liabilities |
48,302 | 53,832 | ||||||
| Notes payable |
506,777 | 534,744 | ||||||
| Deferred income taxes |
505,072 | 502,015 | ||||||
| Other long term liabilities |
5,174 | 4,767 | ||||||
| Total liabilities |
1,065,325 | 1,095,358 | ||||||
| Commitments and contingencies (Note 4) |
||||||||
| Shareholders’ equity: | ||||||||
| Preferred stock, $0.33 par value: 15,000,000 shares authorized, none outstanding |
— | — | ||||||
| Class A common stock, $0.33 par value; 210,000,000 shares authorized; 41,933,959 and 41,718,469 shares issued and 41,805,688 and 41,590,198 shares outstanding at March 31, 2004 and December 31, 2003, respectively |
13,839 | 13,767 | ||||||
| Class B common stock, $0.33 par value; 135,000,000 shares authorized; 58,733,016 shares issued and outstanding at March 31, 2004 and December 31, 2003 |
19,382 | 19,382 | ||||||
| Additional paid-in capital |
630,432 | 626,499 | ||||||
| Accumulated other comprehensive loss, net of tax |
(1,815 | ) | (1,863 | ) | ||||
| Retained earnings |
536,825 | 525,729 | ||||||
| 1,198,663 | 1,183,514 | |||||||
| Less: Class A common stock held in treasury (128,271 shares at cost at March 31, 2004 and December 31, 2003) |
(1,846 | ) | (1,846 | ) | ||||
| Total shareholders’ equity |
1,196,817 | 1,181,668 | ||||||
| Total liabilities and shareholders’ equity |
$ | 2,262,142 | $ | 2,277,026 | ||||
See notes to unaudited consolidated financial statements.
3
COX RADIO, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| Net revenues: | ||||||||
| Local |
$ | 66,845 | $ | 66,939 | ||||
| National |
19,802 | 19,258 | ||||||
| Other |
6,444 | 5,372 | ||||||
| Total net revenues |
93,091 | 91,569 | ||||||
| Operating expenses: | ||||||||
| Cost of services (exclusive of depreciation and amortization shown separately below) |
21,717 | 21,220 | ||||||
| Selling, general and administrative |
37,358 | 38,210 | ||||||
| Corporate general and administrative |
4,545 | 4,234 | ||||||
| Depreciation |
2,960 | 2,944 | ||||||
| Amortization |
18 | 30 | ||||||
| Operating income | 26,493 | 24,931 | ||||||
| Other income (expense): | ||||||||
| Interest expense |
(7,891 | ) | (9,176 | ) | ||||
| Other - net |
(99 | ) | (123 | ) | ||||
| Income before income taxes | 18,503 | 15,632 | ||||||
| Current income tax expense |
4,259 | 3,344 | ||||||
| Deferred income tax expense |
3,148 | 2,911 | ||||||
| Total income tax expense |
7,407 | 6,255 | ||||||
| Net income | $ | 11,096 | $ | 9,377 | ||||
| Net income per share - basic | ||||||||
| Net income per common share |
$ | 0.11 | $ | 0.09 | ||||
| Net income per share - diluted | ||||||||
| Net income per common share |
$ | 0.11 | $ | 0.09 | ||||
| Weighted average common shares outstanding - basic |
100,530 | 100,200 | ||||||
| Weighted average common shares outstanding - diluted |
100,908 | 100,580 | ||||||
See notes to unaudited consolidated financial statements.
4
COX RADIO, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(Unaudited)
| Class A Common Stock |
Class B Common Stock |
Additional Paid-in Capital |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Treasury Stock |
||||||||||||||||||||||||
| Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Total | |||||||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||||||||||||
| Balance at December 31, 2003 | 41,718 | $ | 13,767 | 58,733 | $ | 19,382 | $ | 626,499 | $ | (1,863 | ) | $ | 525,729 | 128 | $ | (1,846 | ) | $ | 1,181,668 | ||||||||||
| Comprehensive income: |
|||||||||||||||||||||||||||||
| Net income |
— | — | — | — | — | — | 11,096 | — | — | 11,096 | |||||||||||||||||||
| Unrealized gain on interest rate swaps |
— | — | — | — | — | 19 | — | — | — | 19 | |||||||||||||||||||
| Reclassification to earnings of derivative transition adjustments |
— | — | — | — | — | 29 | — | — | — | 29 | |||||||||||||||||||
| Comprehensive income |
11,144 | ||||||||||||||||||||||||||||
| Issuance of Class A common stock related to incentive plans including tax benefit of $0.1 million |
216 | 72 | — | — | 3,933 | — | — | — | — | 4,005 | |||||||||||||||||||
| Balance at March 31, 2004 | 41,934 | $ | 13,839 | 58,733 | $ | 19,382 | $ | 630,432 | $ | (1,815 | ) | $ | 536,825 | 128 | $ | (1,846 | ) | $ | 1,196,817 | ||||||||||
See notes to unaudited consolidated financial statements.
5
COX RADIO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| (Amounts in thousands) | ||||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 11,096 | $ | 9,377 | ||||
| Items not requiring cash: |
||||||||
| Depreciation |
2,960 | 2,944 | ||||||
| Amortization |
18 | 30 | ||||||
| Deferred income taxes |
3,148 | 2,911 | ||||||
| Tax benefit from exercise of stock options |
86 | 299 | ||||||
| Other |
281 | 277 | ||||||
| Changes in assets and liabilities: |
||||||||