SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): December 3, 1996 Osborn Communications Corporation (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation) 0-16841 06-1142367 (Commission File Number) (IRS Employer Identification No.) 130 Mason Street, Greenwich, Connecticut 06830 (Address of principal executive office) (Zip Code) Registrant's telephone number including area code: (203) 629-0905 (Former name or former address, if changed since last report) Item 2. Acquisition or Disposition of Assets. On December 3, 1996, the Company sold substantially all the assets of radio stations KNAX-FM/KRBT-FM, Fresno, California to American Radio Systems Corporation for $11.0 million, resulting in a pre-tax gain of approximately $3.3 million. The net proceeds were used to repay a portion of the Company's long-term debt. Item 5. Other Events On December 17, 1996, a Special Meeting of the Stockholders of Osborn Communications Corporation was held for the purpose of voting on a proposal to (i) approve and adopt an Agreement and Plan of Merger, dated as of July 23, 1996 among the Company and a subsidiary (the "Subsidiary") of Capstar Broadcasting Partners, Inc. ("Capstar"), and the transactions contemplated thereby, and (ii) approve the merger of the Subsidiary with and into the Company, pursuant to which the Subsidiary will cease to exist and the Company will survive as a wholly-owned subsidiary of Capstar, and the holders of the Company's outstanding common stock will become entitled to receive $15.375 in cash, without any interest thereon, for each share of common stock. The Company's shareholders voted to approve the proposal. Item 7. Financial Statements and Exhibits. (a) Financial statements of businesses acquired. Not applicable. (b) Pro forma financial information. (1) Pro Forma Condensed Consolidated Balance Sheet (Unaudited) as of September 30, 1996 (2) Pro Forma Condensed Consolidated Statement of Operations (Unaudited) for the nine months ended September 30, 1996 (3) Pro Forma Condensed Consolidated Statement of Operations (Unaudited) for the year ended December 31, 1995 (4) Notes to Unaudited Condensed Consolidated Pro Forma Financial Statements (c) Exhibits. The Asset Purchase Agreement between American Radio Systems Corporation and Breadbasket Broadcasting Corporation dated as of July 12, 1996, previously filed as Exhibit 10.5 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 is incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. OSBORN COMMUNICATIONS CORPORATION (Registrant) Date: December 17, 1996 /s/ Thomas S. Douglas (Signature) Thomas S. Douglas Senior Vice President and Treasurer PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) On December 3, 1996, the Company sold substantially all the assets of radio stations KNAX-FM/KRBT-FM, Fresno, California to American Radio Systems Corporation for $11.0 million, resulting in a pre-tax gain of approximately $3.3 million (the "Fresno Disposition"). On May 3, 1996, the Company acquired substantially all the assets of radio stations KNAX- FM/KRBT-FM for $6.0 million plus 120,000 shares of the Company"s common stock. The Company acquired or disposed of the assets of numerous other broadcasting properties in 1996 and 1995. Collectively, and hereinafter defined, the Daytona Beach Disposition, the Atlantic City Disposition, the Raleigh Disposition, the Port Charlotte Acquisition, the Wheeling Acquisitions, the Syracuse Disposition, the Jacksonville Disposition, and the Anniston Option are the "Other Transactions". On June 28, 1996, the Company sold substantially all the assets of radio station WFKS-FM, Daytona Beach/Palatka, Florida for $4.0 million (the "Daytona Beach Disposition"). On June 21, 1996, the Company sold substantially all the assets of radio station WAYV-FM, Atlantic City, New Jersey for $3.1 million (the "Atlantic City Disposition"). On June 5, 1996, the Company sold substantially all the assets of radio station WFXK-FM, Raleigh/Tarboro, North Carolina for $5.9 million (the "Raleigh Disposition"). On April 1, 1996, the Company acquired substantially all the assets of radio stations WKII-AM/WFSN-FM, Port Charlotte, Florida for $2.85 million (the "Port Charlotte Acquisition"). In the event that the Company is able to relocate WFSN-FM's broadcast antenna to the Company's Pine Island, Florida tower in order to better serve the Port Charlotte/Ft. Myers market, additional consideration of $750,000 will be paid. On March 29, 1996, the Company acquired substantially all the assets of radio station WRIR-FM, Wheeling, West Virginia for $0.8 million plus transaction costs. On June 11, 1996, the Company acquired substantially all the assets of radio stations WBBD-AM/WKWK-FM, Wheeling, West Virginia for $2.7 million plus transaction costs. Collectively, the acquisitions of WRIR-FM, WBBD-AM and WKWK-FM are the "Wheeling Acquisitions". On February 2, 1996, the Company sold substantially all the assets of radio stations WNTQ-FM/WNDR-AM, Syracuse, New York for $12.5 million (the "Syracuse Disposition"). On January 31, 1996, the Company sold substantially all the assets of radio station WWRD-FM, Jacksonville, Florida/Brunswick, Georgia for $2.5 million (the "Jacksonville Disposition"). On December 21, 1995, the Company entered into an option agreement and an associated Local Marketing Agreement with Allbritton Communications Company ("Allbritton") for the sale of television station WJSU-TV, Anniston, Alabama (the "Anniston Option"). The net proceeds from the dispositions were used principally to repay portions of long-term debt, fund transaction costs and finance the Port Charlotte and Wheeling Acquisitions. In August 1995, the Company entered into a credit facility of $56.0 million with Society National Bank (the "Credit Facility"). The Credit Facility consists of a $46.0 million revolving credit facility and a $10.0 million facility which may be used for acquisitions. The initial drawdown of $44.5 million, along with the Company's internally generated funds, was used to repay existing loans totalling $50.0 million and pay transaction costs. In the second quarter of 1996, the Company recorded a charge of $1.2 million relating to the restructuring of the operations of Osborn Healthcare (see Note 5 to the consolidated financial statements at September 30, 1996, which is incorporated herein by reference) (the "Osborn Healthcare Restructuring"). The accompanying pro forma condensed consolidated balance sheet at September 30, 1996 assumes that the Fresno Disposition was made as of September 30, 1996. The accompanying pro forma condensed consolidated statement of operations for the year ended December 31, 1995 assumes that the Fresno, Syracuse, Jacksonville, Raleigh, Atlantic City, Daytona Beach Dispositions and Anniston Option, and Society National Bank refinancing occurred as of January 1, 1995. The accompanying pro forma condensed consolidated statement of operations for the nine months ended September 30, 1996 assumes that the Fresno, Syracuse, Jacksonville, Raleigh, Atlantic City and Daytona Beach Dispositions were made as of January 1, 1996. The pretax gains resulting from the dispositions and the Osborn Healthcare Restructuring charge are not reflected in the accompanying pro forma condensed consolidated statements of operations due to their nonrecurring nature. In management's opinion, the accompanying pro forma condensed consolidated financial information is not necessarily indicative of either future results of operations or the results that might have occurred if the foregoing transactions had been consummated on the indicated dates. OSBORN COMMUNICATIONS CORPORATION UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET September 30, 1996 Fresno Pro Forma Historical Disposition Adjustments Pro Forma ASSETS Cash and cash equivalents $1,216,077 - $1,216,077 Other current assets 7,407,169 - 7,407,169 Total current assets 8,623,246 - 8,623,246 Investment in affiliated company 528,644 - 528,644 Property, plant and 16,008,051 (2,463,719) 13,544,332 equipment, net Intangible assets, net 36,398,379 (4,678,451) 31,719,928 Other noncurrent assets 165,814 - 165,814 Total assets $61,724,134 ($7,142,170) $54,581,964 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $6,667,635 - $6,667,635 Long-term debt 22,200,000 - (10,000,000) (a) 12,200,000 Deferred income taxes 2,275,711 - 2,275,711 Other noncurrent 1,325,262 - 1,325,262 liabilities Total liabilities 32,468,608 - 22,468,608 Common stock 54,131 - 54,131 Additional paid-in capital 40,829,403 - 40,829,403 Accumulated deficit (11,628,008) (7,142,170) 10,000,000 (a) (8,770,178) Total stockholders'equity 29,255,526 (7,142,170) 32,113,356 Total liabilities and stockholders' equity $61,724,134 ($7,142,170) $54,581,964 See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements OSBORN COMMUNICATIONS CORPORATION UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the nine months ended September 30, 1996 Other Fresno Other Proforma Historical Disposition Transactions Adjustments Pro Forma Net revenues $26,503,560 ($822,904) ($454,285) $25,226,371 Operating expenses excluding depreciation, amortization and corporate expenses 20,785,816 (680,220) (264,209) 19,841,387 Depreciation and amortization 3,673,052 (192,000) (455,038) 3,026,014 Corporate expenses 1,391,609 - - 1,391,609 Operating income 653,083 49,316 264,962 - 967,361 Other income (expense) (108,948) (55) 443,994 334,991 Gain on sale of station 8,859,477 - (10,059,477) 1,200,000 (e) - Interest expense 1,713,239 - - (465,685)(b) 1,247,554 Income (loss) before income taxes 7,690,373 49,261 (9,350,521) 1,665,685 54,798 Provision for income taxes 1,068,055 - - (768,055)(c) 300,000 Net income (loss) before extraordinary items $6,622,318 $49,261 ($9,350,521) $2,433,740 ($245,202) See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements OSBORN COMMUNICATIONS CORPORATION UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the nine months ended December 31, 1995 Other Fresno Other Pro Forma 1995 Historical Disposition Transactions Adjustments Pro Forma Net revenues $39,100,496 - ($7,397,138) $31,703,358 Operating expenses excluding depreciation, amortization and corporate expenses 29,397,184 - (5,395,966) 24,001,218 Depreciation and amortization 5,782,404 - (1,491,938) 4,290,466 Corporate expenses 1,705,850 - (3,516) 1,702,334 Operating income (loss) 2,215,058 - (505,718) 1,709,340 Other income (expense) 2,302,679 - (3,254) (1,942,731) (d) 356,694 Gain on sale of station 8,094,993 - (8,094,993) - Interest expense 5,212,999 - (2,207) ($2,240,300) (b) 2,970,492 Income (loss) before income taxes 7,399,731 - (8,601,758) 297,569 (904,458) Provision for income taxes 775,982 - (68) (337,571) (c) 438,343 Net income (loss) before extraordinary items $6,623,749 - ($8,601,690) $635,140 ($1,342,801) See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements (a) Represents repayment of long-term debt with the net proceeds of the Fresno Disposition. (b) Represents the reduction of interest expense resulting from the Society National Bank Refinancing, and the repayment of long-term debt with the proceeds from the Fresno, Syracuse, Jacksonville, Raleigh, Atlantic City and Daytona Beach Dispositions and Anniston Option, net of the increase in interest expense resulting from the Wheeling and Port Charlotte Acquisitions. (c) Represents reduction of state and local income taxes resulting from the dispositions. (d) Represents the elimination of distributions received from Northstar Television Group and Fairmont Communications Corporation due to their nonrecurring nature. (e) Represents the elimination of the Osborn Healthcare Restructuring charge due to its nonrecurring nature.