GRAY Exhibit 99.1
Television, Inc.
- --------------------------------------------------------------------------------
NEWS RELEASE SEPTEMBER 27, 2002
GRAY TELEVISION, INC. RAISES REVENUE AND EARNINGS GUIDANCE
FOR THIRD QUARTER AND FULL YEAR 2002
Gray Television, Inc. (NYSE: GTN and GTN.A) announced today that it has
increased its estimates of net revenues and earnings for the three months ending
September 30, 2002 (the "third quarter") and full year 2002 based on stronger
than anticipated advertising revenues at Gray's television stations.
For the third quarter of 2002, Gray anticipates total net revenues to
be approximately 15% ahead of the third quarter of 2001. We believe total
Operating Cash Flow(1) for the third quarter of 2002 will exceed that of 2001 by
approximately 50%. We also believe our broadcast net revenues for the third
quarter of 2002 will exceed the results of the third quarter of 2001 by
approximately 20% and broadcast Media Cash Flow(2) will exceed that of the third
quarter of 2001 by approximately 60%. Gray estimates third quarter 2002
publishing revenues will exceed the results of the third quarter of 2001 by
approximately 7% with a corresponding increase in publishing Media Cash Flow(2)
of approximately 40% over the results of the third quarter of 2001.
For the full year 2002, before giving effect to the previously
announced and pending acquisitions of Stations Holding Company, Inc.
("Stations") and KOLO-TV (both discussed below), Gray currently anticipates
total net revenues will increase by approximately 7% to 8% over 2001 levels and
total Operating Cash Flow(1) will show a corresponding increase of 25% to 26%
over the results of the full year 2001. Gray currently anticipates broadcast net
revenues for full year 2002 compared to 2001 will increase by approximately 10%
and broadcast Media Cash Flow(2) will exceed 2001 results by at least 25%. We
currently believe our publishing revenues for full year 2002 compared to 2001
will increase by approximately 5% and publishing Media Cash Flow(2) will
increase by approximately 30% over full year 2001 results.
Gray currently anticipates closing the acquisitions of Stations and
KOLO-TV during the fourth quarter of 2002. On a pro forma basis, assuming that
these acquisitions had been completed on January 1, 2002, the Company
anticipates that the total pro forma net revenues for the year ended December
31, 2002 would have ranged between $290 million and $295 million and that the
related total Operating Cash Flow(1) would have ranged between $109 million and
$111 million.
In the pending merger transaction with Stations Holding Company, Inc.,
Gray will acquire 15 television stations for cash consideration of approximately
$502.5 million. Also, Gray has entered into a pending agreement to purchase the
assets of KOLO-TV in Reno, Nevada in a separate transaction for $41.5 million.
Upon completion of these two transactions, Gray will own a total of 29 stations
serving 25 television markets. The stations will include 15 CBS affiliates, 7
NBC affiliates and 7 ABC affiliates. The combined station group will have 22
stations ranked #1 in viewing audience and 23 stations ranked #1 in local news
audience within their respective markets. The combined group will reach over 5%
of total U.S. TV households. In addition, with 15 CBS affiliated stations, Gray
will be the largest independent owner of CBS affiliates in the country. The
combined station group will have a significant presence in the Southeast,
Southwest, Midwest and Great Lakes regions of the United States.
Gray previously reported its intention to finance a portion of the
costs of these acquisitions by issuing a combination of equity and debt
securities. On September 16, 2002 Gray's shareholders approved an increase in
the number of authorized shares of its Common Stock (ticker symbol GTN) to 50
million shares from 15 million shares. In connection with the financing
activities for the announced acquisitions, Gray also announced on September 16,
2002 that it had completed the sale of $100 million principal amount of senior
subordinated notes (the "Notes"). The coupon on the Notes was 9 1/4% and the
Notes were issued at par. These Notes are in addition to the $180 million
principal amount of Gray's 9 1/4% Senior Subordinated Notes due 2011 that were
issued on December 21, 2001. The Notes were issued under the same indenture and
have the same terms. They form a single series with Gray's existing notes. The
Notes were offered pursuant to Gray's existing effective shelf registration
statement. Gray used the net proceeds of this offering primarily to repay $100
million of borrowings under its senior secured credit facility. Gray is also
currently in the process of syndicating an offering for a senior secured credit
facility comprised of a $375 million term loan facility and a $75 million
reducing revolving credit facility.
This press release is neither an offer to sell or buy any securities.
The preceding comments on Gray's current expectations of operating
results for the third quarter and full year 2002, pro forma results of
operations for the full year 2002, its pending acquisition of Stations and
KOLO-TV are "forward looking" for purposes of the Private Securities Litigation
Reform Act of 1995. Actual results of operations may differ materially from the
current expectations discussed in this press release.
Notes:
(1) Operating Cash Flow is defined as Media Cash Flow(2) less corporate
overhead.
(2) Media Cash Flow is defined as operating income, plus depreciation and
amortization (including amortization of program broadcast rights), non-cash
compensation and corporate overhead, less payments for program broadcast
obligations.
Gray Television, Inc. is a communications company headquartered in
Atlanta, Georgia, and operates ten CBS-affiliated television stations, three
NBC-affiliated television stations, four daily newspapers, a wireless messaging
and paging business and a satellite uplink and production business. The
Company's current operations are concentrated in the South, Southwest and
Midwest U. S.
FOR INFORMATION CONTACT:
BOB PRATHER JIM RYAN
PRESIDENT AND CHIEF OPERATING OFFICER CHIEF FINANCIAL OFFICER
(404) 266-8333 (404) 504-9828