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 26, 2004
OR
| ¨ | 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 | 54-0850433 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 333 E. Franklin St., Richmond, VA | 23219 | |
| (Address of principal executive offices) | (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 x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of November 2, 2004.
| Class A Common shares: | 23,174,808 | |
| Class B Common shares: | 555,992 |
TABLE OF CONTENTS
FORM 10-Q REPORT
September 26, 2004
| Page | ||||
| Part I. Financial Information |
||||
| Item 1. Financial Statements |
||||
| Consolidated Condensed Balance Sheets – September 26, 2004, and December 28, 2003 |
1 | |||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 | |||
| Item 4. Controls and Procedures |
25 | |||
| Part II. Other Information |
||||
| Item 1. Legal Proceedings |
25 | |||
| Item 6. Exhibits |
25 | |||
| 26 | ||||
PART I - FINANCIAL INFORMATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(000’s except shares)
| (Unaudited) September 26, 2004 |
December 28, 2003 | |||||
| ASSETS |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ | 9,150 | $ | 10,575 | ||
| Accounts receivable - net |
104,738 | 113,226 | ||||
| Inventories |
7,751 | 6,171 | ||||
| Other |
40,534 | 32,649 | ||||
| Total current assets |
162,173 | 162,621 | ||||
| Investments in unconsolidated affiliates |
90,328 | 89,994 | ||||
| Other assets |
57,922 | 60,277 | ||||
| Property, plant and equipment - net |
428,146 | 434,088 | ||||
| Excess of cost over fair value of net identifiable assets of acquired businesses - net |
832,004 | 832,004 | ||||
| FCC licenses and other intangibles - net |
795,444 | 807,771 | ||||
| $ | 2,366,017 | $ | 2,386,755 | |||
See accompanying notes.
1
MEDIA GENERAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(000’s except shares)
| (Unaudited) September 26, |
December 28, 2003 |
|||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 21,898 | $ | 22,210 | ||||
| Accrued expenses and other liabilities |
89,406 | 83,424 | ||||||
| Income taxes payable |
— | 8,769 | ||||||
| Total current liabilities |
111,304 | 114,403 | ||||||
| Long-term debt |
485,454 | 531,969 | ||||||
| Borrowings of consolidated variable interest entities |
95,320 | 95,320 | ||||||
| Deferred income taxes |
379,284 | 362,769 | ||||||
| Other liabilities and deferred credits |
146,861 | 174,833 | ||||||
| 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 23,172,200 and 22,989,506 shares |
115,861 | 114,947 | ||||||
| Class B, authorized 600,000 shares; issued 555,992 shares |
2,780 | 2,780 | ||||||
| Additional paid-in capital |
43,705 | 34,595 | ||||||
| Accumulated other comprehensive loss |
(51,371 | ) | (50,984 | ) | ||||
| Unearned compensation |
(9,974 | ) | (11,670 | ) | ||||
| Retained earnings |
1,046,793 | 1,017,793 | ||||||
| Total stockholders’ equity |
1,147,794 | 1,107,461 | ||||||
| $ | 2,366,017 | $ | 2,386,755 | |||||
See accompanying notes.
2
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(000’s except for per share data)
| Third Quarter Ended |
Nine Months Ended |
|||||||||||||||
| Sept. 26, 2004 |
Sept. 28, 2003 |
Sept. 26, 2004 |
Sept. 28, 2003 |
|||||||||||||
| Revenues |
$ | 217,644 | $ | 205,086 | $ | 650,690 | $ | 611,890 | ||||||||
| Operating costs: |
||||||||||||||||
| Production |
94,333 | 89,487 | 280,037 | 267,007 | ||||||||||||
| Selling, general and administrative |
75,876 | 73,089 | 230,757 | 218,021 | ||||||||||||
| Depreciation and amortization |
15,709 | 16,327 | 49,280 | 49,976 | ||||||||||||
| Total operating costs |
185,918 | 178,903 | 560,074 | 535,004 | ||||||||||||
| Operating income |
31,726 | 26,183 | 90,616 | 76,886 | ||||||||||||
| Other income (expense): |
||||||||||||||||
| Interest expense |
(7,643 | ) | (8,409 | ) | (23,171 | ) | (26,262 | ) | ||||||||
| Investment income (loss) – unconsolidated affiliates |
523 | (1,044 | ) | 330 | (4,552 | ) | ||||||||||
| Other, net |
335 | 1,295 | 1,028 | 9,530 | ||||||||||||
| Total other expense |
(6,785 | ) | (8,158 | ) | (21,813 | ) | (21,284 | ) | ||||||||
| Income from continuing operations before income taxes and cumulative effect of change in accounting principle |
24,941 | 18,025 | 68,803 | 55,602 | ||||||||||||
| Income taxes |
9,228 | 6,580 | 25,457 | 20,297 | ||||||||||||
| Income from continuing operations before cumulative effect of change in accounting principle |
15,713 | 11,445 | 43,346 | 35,305 | ||||||||||||
| Income from discontinued operations (net of tax) |
— | 301 | — | 957 | ||||||||||||
| Cumulative effect of change in accounting principle (net of income tax benefit) |
— | (8,079 | ) | — | (8,079 | ) | ||||||||||
| Net income |
$ | 15,713 | $ | 3,667 | $ | 43,346 | $ | 28,183 | ||||||||
| Earnings per common share: |
||||||||||||||||
| Income from continuing operations before cumulative effect of change in accounting principle |
$ | 0.67 | $ | 0.50 | $ | 1.86 | $ | 1.53 | ||||||||
| Discontinued operations |
— | 0.01 | — | 0.04 | ||||||||||||
| Cumulative effect of change in accounting principle |
— | (0.35 | ) | — | (0.35 | ) | ||||||||||
| Net income |
$ | 0.67 | $ | 0.16 | $ | 1.86 | $ | 1.22 | ||||||||
| Earnings per common share – assuming dilution: |
||||||||||||||||
| Income from continuing operations before cumulative effect of change in accounting principle |
0.66 | $ | 0.49 | $ | 1.83 | $ | 1.51 | |||||||||
| Discontinued operations |
— | 0.01 | — | 0.04 | ||||||||||||
| Cumulative effect of change in accounting principle |
— | (0.34 | ) | — | (0.34 | ) | ||||||||||
| Net income |
$ | 0.66 | $ | 0.16 | $ | 1.83 | $ | 1.21 | ||||||||
| Dividends paid per common share |
$ | 0.20 | $ | 0.19 | $ | 0.60 | $ | 0.57 | ||||||||
See accompanying notes.
3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(000’s)
| Nine Months Ended |
||||||||
| September 26, 2004 |
September 28, 2003 |
|||||||
| Operating activities: |
||||||||
| Net income |
$ | 43,346 | $ | 28,183 | ||||
| Adjustments to reconcile net income: |
||||||||
| Cumulative effect of change in accounting principle |
— | 8,079 | ||||||
| Depreciation and amortization |
49,280 | 50,034 | ||||||
| Deferred income taxes |
21,844 | 17,710 | ||||||
| Investment (income) loss - unconsolidated affiliates |
(330 | ) | 4,552 | |||||
| Gain on sale of investment |
— | (5,746 | ) | |||||
| Retirement plan contributions |
(35,014 | ) | (21,000 | ) | ||||
| Change in assets and liabilities: |
||||||||
| Accounts receivable and inventories |
6,908 | 7,088 | ||||||
| Accounts payable, accrued expenses, and other liabilities |
1,331 | (1,136 | ) | |||||
| Income taxes payable |
(11,872 | ) | (1,844 | ) | ||||
| Reduction in advance from unconsolidated newsprint affiliate |
— | (6,667 | ) | |||||
| Other |
4,232 | 307 | ||||||
| Net cash provided by operating activities |
79,725 | 79,560 | ||||||
| Investing activities: |
||||||||
| Capital expenditures |
(29,505 | ) | (22,761 | ) | ||||
| Proceeds from sale of investment |
— | |||||||