Exhibit 99.1
TRIPLE CROWN MEDIA, INC.
PRO-FORMA CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
Consolidated September 30, | Host and | Pro-Forma Adjustments | Adjusted September 30, 2007 | ||||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 2,733 | $ | — | $ | — | $ | 2,733 | |||||||
Accounts receivable, less allowance for doubtful accounts of $434 and $447, respectively | 5,268 | — | — | 5,268 | |||||||||||
Inventories | 359 | — | — | 359 | |||||||||||
Assets associated with discontinued operations | 106,292 | 106,292 | — | ||||||||||||
Other current assets | 632 | — | — | 632 | |||||||||||
Total current assets | 115,284 | 106,292 | — | 8,992 | |||||||||||
Property and equipment | 22,798 | — | — | 22,798 | |||||||||||
Less accumulated depreciation | (15,113 | ) | — | — | (15,113 | ) | |||||||||
Property plant and equipments | 7,685 | — | — | 7,685 | |||||||||||
Goodwill | 18,428 | — | — | 18,428 | |||||||||||
Other intangible assets, net | 6,839 | — | — | 6,839 | |||||||||||
Deferred income taxes | 16,827 | — | (3,225 | ) a | 13,602 | ||||||||||
Other assets | 2,603 | — | — | 2,603 | |||||||||||
Total assets | $ | 167,666 | $ | 106,292 | $ | (3,225 | ) | $ | 58,149 | ||||||
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | |||||||||||||||
Current liabilities: | |||||||||||||||
Current portion of long-term debt | $ | 18,442 | $ | — | $ | — | $ | 18,442 | |||||||
Accounts payable | 1,584 | — | — | 1,584 | |||||||||||
Accrued expenses | 5,783 | — | 2,000 | b | 7,783 | ||||||||||
Federal and state income taxes | 15 | — | 2,160 | c | 2,175 | ||||||||||
Deferred revenue | 977 | — | — | 977 | |||||||||||
Liabilities of business held for sale | 35,296 | 35,296 | — | — | |||||||||||
Total current liabilities | 62,097 | 35,296 | 4,160 | 30,961 | |||||||||||
Long-term debt | 116,057 | — | (70,913 | ) d | 45,144 | ||||||||||
Other liabilities | 133 | — | — | 133 | |||||||||||
Series B redeemable preferred stock, $.001 par value (authorized 20,000 shares; issued and outstanding 6,050 shares; $6,050 liquidation value) | 4,538 | — | — | 4,538 | |||||||||||
Total liabilities | 182,825 | 35,296 | (66,753 | ) | 80,776 | ||||||||||
Series A redeemable, convertible preferred stock, $.001 par value (authorized 50,000 shares; issued and outstanding 20,890 shares; $20,890 liquidation value) | 17,198 | — | — | 17,198 | |||||||||||
Commitments and contingencies | |||||||||||||||
Stockholders’ deficit: | |||||||||||||||
Common stock, par value $0.001 (authorized 25,000 shares, issued and outstanding (5,187 and 5,257 shares, respectively) | 5 | — | — | 5 | |||||||||||
Additional paid-in capital | 5,455 | — | — | 5,455 | |||||||||||
Accumulated deficit | (37,628 | ) | 70,996 | 63,528 | e | (45,096 | ) | ||||||||
Accumulated other comprehensive loss, net of tax | (189 | ) | — | — | (189 | ) | |||||||||
Total stockholders’ deficit | (32,357 | ) | 70,996 | 63,528 | (39,825 | ) | |||||||||
Total liabilities, preferred stock and stockholders’ deficit | $ | 167,666 | $ | 106,292 | $ | (3,225 | ) | $ | 58,149 | ||||||
a - | Amount represents the net impact to deferred income taxes resulting from the sale of Host and Pinnacle. |
b - | Amount represents an accrual for the anticipated costs of selling Host and Pinnacle |
c - | Amount represents the net impact to federal and state income taxes payable resulting from the sale of Host and Pinnacle. |
d - | Amount represents the use of the expected net proceeds from the sale of Host and Pinnacle to pay down long-term debt. |
e - | Amount represents the aggregation of the above-noted adjustments. The actual gain or loss on sale that will be booked in the quarter ended December 31, 2007 is subject to adjustment based on the resolution of working capital and indemnification provisions contained in the sales agreement. |
TRIPLE CROWN MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Adjusted for Discontinued Operations
(Amounts in thousands, except per share data)
Consolidated Quarter Ended September 30, 2007 | Host and Pinnacle | Pro-Forma Adjustments | Pro-Forma Quarter Ended September 30, 2007 | ||||||||||||
(Unaudited) | |||||||||||||||
Operating revenues: | |||||||||||||||
Publishing | $ | 11,958 | $ | — | $ | — | $ | 11,958 | |||||||
Collegiate marketing | — | — | — | — | |||||||||||
Association management services | — | — | — | — | |||||||||||
11,958 | — | — | 11,958 | ||||||||||||
Expenses: | |||||||||||||||
Operating expenses before depreciation, amortization and loss on disposal of assets, net: | |||||||||||||||
Publishing | 8,539 | — | — | 8,539 | |||||||||||
Collegiate marketing | — | — | — | — | |||||||||||
Association management services | — | — | — | — | |||||||||||
Corporate and administrative | 1,274 | — | — | 1,274 | |||||||||||
Depreciation | 270 | — | — | 270 | |||||||||||
Amortization and impairment | 165 | — | — | 165 | |||||||||||
10,248 | — | — | 10,248 | ||||||||||||
Operating income | 1,710 | — | — | 1,710 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense related to Series B preferred stock | (114 | ) | — | — | (114 | ) | |||||||||
Interest expense, other | (3,505 | ) | — | 1,451 | a | (2,054 | ) | ||||||||
Debt issue cost amortization | (321 | ) | — | — | (321 | ) | |||||||||
Loss from continuing operations before income taxes | (2,230 | ) | — | 1,451 | (779 | ) | |||||||||
Income tax expense (benefit) | (20 | ) | — | 13 | b | (7 | ) | ||||||||
Loss from continuing operations | (2,210 | ) | — | 1,438 | (772 | ) | |||||||||
Series A preferred stock dividends accrued | (272 | ) | — | — | (272 | ) | |||||||||
Net loss available to common stockholders | $ | (2,482 | ) | $ | — | $ | 1,438 | $ | (1,044 | ) | |||||
Basic and diluted per share information: | |||||||||||||||
Loss from continuing operations | $ | (0.42 | ) | $ | (0.15 | ) | |||||||||
Net loss from continuing operations available to common stockholders | $ | (0.47 | ) | $ | (0.20 | ) | |||||||||
Weighted average shares outstanding | 5,319 | 5,319 |
a - | Amount represents a reduction in interest expense resulting from the use of the expected net proceeds from the sale of Host and Pinnacle to pay down long-term debt. This amount was calculated by multiplying $65,900 (net cash proceeds received at closing) by 8.8% (the effective interest rate currently being paid on this debt) and dividing by 4 (to calculate the effect for one quarter). |
b - | Amount represents the tax effect of the above entry utilizing the effective tax rate for the period |
TRIPLE CROWN MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Adjusted for Discontinued Operations
(Amounts in thousands, except per share data)
Consolidated 2007 | Host and | Pro-Forma Adjustments | Pro-Forma 2007 | ||||||||||||
(Unaudited) | |||||||||||||||
Operating revenues: | |||||||||||||||
Publishing | $ | 48,464 | — | — | $ | 48,464 | |||||||||
Collegiate marketing | 70,896 | 70,896 | — | — | |||||||||||
Association management services | 10,941 | 10,941 | — | — | |||||||||||
130,301 | 81,837 | — | 48,464 | ||||||||||||
Expenses: | |||||||||||||||
Operating expenses before depreciation, amortization and loss on disposal of assets, net: | �� | ||||||||||||||
Publishing | 34,104 | — | — | 34,104 | |||||||||||
Collegiate marketing | 65,347 | 65,347 | — | — | |||||||||||
Association management services | 7,762 | 7,762 | — | — | |||||||||||
Corporate and administrative | 5,711 | — | 5,711 | ||||||||||||
Depreciation | 1,858 | 763 | — | 1,095 | |||||||||||
Amortization and impairment of intangibles | 3,920 | 3,258 | — | 662 | |||||||||||
Loss on disposal of assets, net | 930 | 932 | — | (2 | ) | ||||||||||
119,632 | 78,062 | — | 41,570 | ||||||||||||
Operating income | 10,669 | 3,775 | — | 6,894 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense related to Series B preferred stock | (453 | ) | — | — | (453 | ) | |||||||||
Interest expense, other | (13,247 | ) | — | 5,803 | a | (7,444 | ) | ||||||||
Debt issue cost amortization | (1,276 | ) | — | — | (1,276 | ) | |||||||||
Miscellaneous income, net | 100 | 100 | — | — | |||||||||||
Income (loss) from continuing operations before income taxes | (4,207 | ) | 3,875 | 5,803 | (2,279 | ) | |||||||||
Income tax expense (benefit) | (1,572 | ) | 1,434 | 2,147 | b | (859 | ) | ||||||||
Earnings (loss) from continuing operations | (2,635 | ) | 2,441 | 3,656 | (1,420 | ) | |||||||||
Series A preferred stock dividends | (1,086 | ) | (1,086 | ) | |||||||||||
Net Income (loss) from continuing operations available to commons stockholders | $ | (3,721 | ) | $ | 2,441 | $ | 3,656 | $ | (2,506 | ) | |||||
Basic and diluted per share information: | |||||||||||||||
Loss from continuing operations | $ | (0.50 | ) | $ | (0.27 | ) | |||||||||
Net loss available to common stockholders | $ | (0.71 | ) | $ | (0.48 | ) | |||||||||
Weighted average shares outstanding | 5,246 | 5,246 |
a - | Amount represents a reduction in interest expense resulting from the use of the expected net proceeds from the sale of Host and Pinnacle to pay down long-term debt. This amount was calculated by multiplying $65,900 (net cash proceeds received at closing) by 8.8% (the effective interest rate currently being paid on this debt). |
b - | Amount represents the tax effect of the above entry utilizing the effective tax rate for the period. |
TRIPLE CROWN MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Adjusted for Discontinued Operations
(Amounts in thousands, except per share data)
Consolidated 2006 | Host and | Pro-Forma Adjustments | Pro-Forma 2006 | ||||||||||||
(Unaudited) | |||||||||||||||
Operating revenues: | |||||||||||||||
Publishing | $ | 22,047 | $ | — | $ | — | $ | 22,047 | |||||||
Collegiate marketing | 24,174 | 24,174 | — | — | |||||||||||
Association management services | 4,701 | 4,701 | — | — | |||||||||||
50,922 | 28,875 | — | 22,047 | ||||||||||||
Expenses: | |||||||||||||||
Operating expenses before depreciation, amortization and loss on disposal of assets, net: | |||||||||||||||
Publishing | 15,829 | — | — | 15,829 | |||||||||||
Collegiate marketing | 22,370 | 22,370 | — | — | |||||||||||
Association management services | 3,472 | 3,472 | — | — | |||||||||||
Corporate and administrative | 2,594 | — | — | 2,594 | |||||||||||
Depreciation | 918 | 352 | — | 566 | |||||||||||
Amortization and impairment of intangibles | 1,406 | 1,241 | — | 165 | |||||||||||
Loss (Gain) on disposal of assets, net | — | — | — | — | |||||||||||
46,589 | 27,435 | — | 19,154 | ||||||||||||
Operating income | 4,333 | 1,440 | — | 2,893 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense related to Series B preferred stock | (226 | ) | — | — | (226 | ) | |||||||||
Interest expense, other | (5,917 | ) | — | 2,902 | a | (3,015 | ) | ||||||||
Debt issue cost amortization | (608 | ) | — | — | (608 | ) | |||||||||
Miscellaneous income, net | — | — | — | — | |||||||||||
Income (loss) from continuing operations before income taxes | (2,418 | ) | 1,440 | 2,902 | (956 | ) | |||||||||
Income tax expense (benefit) | (654 | ) | 389 | 784 | b | (259 | ) | ||||||||
Earnings (loss) from continuing operations | (1,764 | ) | 1,051 | 2,118 | (697 | ) | |||||||||
Series A preferred stock dividends | (542 | ) | — | — | (542 | ) | |||||||||
Net Income (loss) from continuing operations available to commons stockholders | $ | (2,306 | ) | $ | 1,051 | $ | 2,118 | $ | (1,239 | ) | |||||
Basic and diluted per share information: | |||||||||||||||
Loss from continuing operations | $ | (0.34 | ) | $ | (0.14 | ) | |||||||||
Net loss available to common stockholders | $ | (0.45 | ) | $ | (0.24 | ) | |||||||||
Weighted average shares outstanding | 5,139 | 5,139 |
a - | Amount represents a reduction in interest expense resulting from the use of the expected net proceeds from the sale of Host and Pinnacle to pay down long-term debt. This amount was calculated by multiplying $65,900 (net cash proceeds received at closing) by 8.8% (the effective interest rate currently being paid on this debt). |
b - | Amount represents the tax effect of the above entry utilizing the effective tax rate for the period. |
TRIPLE CROWN MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Adjusted for Discontinued Operations
(Amounts in thousands, except per share data)
Consolidated 2005 | Host and Pinnacle | Pro-Forma Adjustments | Pro-Forma 2005 | |||||||||||||
(Unaudited) | ||||||||||||||||
Operating revenues: | ||||||||||||||||
Publishing | $ | 40,237 | $ | — | $ | — | $ | 40,237 | ||||||||
Collegiate marketing | 97 | 97 | — | — | ||||||||||||
Association management services | 16 | 16 | — | — | ||||||||||||
40,350 | 113 | — | 40,237 | |||||||||||||
Expenses: | ||||||||||||||||
Operating expenses before depreciation, amortization and loss on disposal of assets, net: | ||||||||||||||||
Publishing | 30,304 | — | — | 30,304 | ||||||||||||
Collegiate marketing | 101 | 101 | — | — | ||||||||||||
Association management services | 12 | 12 | — | — | ||||||||||||
Corporate and administrative | 1,117 | — | — | 1,117 | ||||||||||||
Depreciation | 987 | 7 | — | 980 | ||||||||||||
Amortization and impairment of intangibles | 10 | 3 | — | 7 | ||||||||||||
Loss on disposal of assets, net | 47 | — | — | 47 | ||||||||||||
32,578 | 123 | — | 32,455 | |||||||||||||
Operating income | 7,772 | (10 | ) | — | 7,782 | |||||||||||
Other income (expense): | ||||||||||||||||
Interest expense related to Series B preferred stock | (1 | ) | — | — | (1 | ) | ||||||||||
Interest expense, other | (236 | ) | — | — | a | (236 | ) | |||||||||
Debt issue cost amortization | (3 | ) | — | — | (3 | ) | ||||||||||
Miscellaneous income, net | — | — | — | — | ||||||||||||
Income (loss) from continuing operations before income taxes | 7,532 | (10 | ) | — | 7,542 | |||||||||||
Income tax expense (benefit) | 2,863 | (4 | ) | — | 2,867 | |||||||||||
Earnings (loss) from continuing operations | 4,669 | (6 | ) | — | 4,675 | |||||||||||
Series A preferred stock dividends | (3 | ) | — | — | (3 | ) | ||||||||||
Net Income (loss) from continuing operations available to commons stockholders | $ | 4,666 | $ | (6 | ) | $ | — | $ | 4,672 | |||||||
Basic and diluted per share information: | ||||||||||||||||
Earnings from continuing operations | $ | 0.96 | $ | 0.96 | ||||||||||||
Net income available to common stockholders | $ | 0.96 | $ | 0.96 | ||||||||||||
Weighted average shares outstanding | 4,871 | 4,871 |
a - | We have not reduced interest expense this period as the underlying debt being paid down with the proceeds of the transaction was only outstanding for one day of this fiscal year. |
TRIPLE CROWN MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Adjusted for Discontinued Operations
(Amounts in thousands, except per share data)
Consolidated 2004 | Host and Pinnacle | Pro-Forma Adjustments | Pro-Forma 2004 | ||||||||||||
(Unaudited) | |||||||||||||||
Operating revenues: | |||||||||||||||
Publishing | $ | 38,790 | $ | — | $ | — | $ | 38,790 | |||||||
Collegiate marketing | — | — | — | — | |||||||||||
Association management services | — | — | — | — | |||||||||||
38,790 | — | — | 38,790 | ||||||||||||
Expenses: | |||||||||||||||
Operating expenses before depreciation, amortization and loss on disposal of assets, net: | |||||||||||||||
Publishing | 27,716 | — | — | 27,716 | |||||||||||
Collegiate marketing | — | — | — | — | |||||||||||
Association management services | — | — | — | — | |||||||||||
Corporate and administrative | 1,209 | — | — | 1,209 | |||||||||||
Depreciation | 809 | — | — | 809 | |||||||||||
Amortization and impairment of intangibles | 5 | — | — | 5 | |||||||||||
Loss on disposal of assets, net | 49 | — | — | 49 | |||||||||||
29,788 | — | — | 29,788 | ||||||||||||
Operating income | 9,002 | — | — | 9,002 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense related to Series B preferred stock | — | ||||||||||||||
Interest expense, other | (3 | ) | — | — | a | (3 | ) | ||||||||
Debt issue cost amortization | — | ||||||||||||||
Miscellaneous income, net | 37 | — | — | 37 | |||||||||||
Income from continuing operations before income taxes | 9,036 | — | — | 9,036 | |||||||||||
Income tax expense | 3,355 | — | — | 3,355 | |||||||||||
Earnings from continuing operations | 5,681 | — | — | 5,681 | |||||||||||
Series A preferred stock dividends | — | — | — | — | |||||||||||
Net Income from continuing operations available to commons stockholders | $ | 5,681 | $ | — | $ | — | $ | 5,681 | |||||||
Basic and diluted per share information: | |||||||||||||||
Earnings from continuing operations | $ | 1.17 | $ | 1.17 | |||||||||||
Net income available to common stockholders | $ | 1.17 | $ | 1.17 | |||||||||||
Weighted average shares outstanding | 4,870 | 4,870 |
a - | We have not reduced interest expense this period as the underlying debt being paid down with the proceeds of the transaction was not outstanding at any time during the year ended 12/31/04. |