GRAY EXHIBIT 99.1
Television, Inc.
- -------------------------------------------------------------------------------
NEWS RELEASE
GRAY REPORTS OPERATING RESULTS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2003
ATLANTA, GEORGIA - NOVEMBER 12, 2003 . . . GRAY TELEVISION, INC. (THE
"COMPANY") (NYSE: GTN) today announced its results for the three months ("third
quarter") and nine months ended September 30, 2003.
Operating income for the third quarter of 2003 of $19.5 million
exceeded the high end guidance range previously issued by the Company.
The Company's reported results for 2003 reflect the impact of the
acquisition of Stations Holding Company, Inc., on October 25 2002, comprising
15 network affiliated television stations serving 13 television markets and the
acquisition on December 18, 2002 of KOLO-TV, the ABC affiliate serving Reno,
Nevada. Both acquisitions are collectively referred to as the "2002
Acquisitions". The Company has also provided information on its operating
results on a "pro forma" basis which gives effect to the 2002 Acquisitions as
if they had occurred on January 1, 2002 (see Note 1).
THIRD QUARTER OF 2003 COMPARED TO THE THIRD QUARTER OF 2002
Revenues. Total revenues for the three months ended September 30, 2003
increased 73% to $73.4 million as compared to the corresponding period of the
prior year primarily reflecting the impact of the 2002 Acquisitions.
Broadcasting revenues increased 104% to $60.4 million. The stations acquired in
2002 had revenue of $31.8 million in the third quarter of 2003. For the
television stations that were owned continuously for the quarter ended
September 30, 2003 and 2002, total revenue decreased 3% while political revenue
decreased $3.0 million. On a pro forma basis, total broadcasting revenues
decreased 4% from the pro forma results of the third quarter of 2002.
Broadcasting local and national revenues increased 6% and 4% respectively from
the pro forma results of 2002 while political advertising revenue decreased
$5.4 million from the pro forma results for the third quarter of 2002.
Operating expenses. Operating expenses before depreciation and
amortization increased 74% to $46.9 million primarily reflecting the impact of
the 2002 Acquisitions. Broadcasting expenses, before depreciation and
amortization, increased 114% to $35.7 million. The stations acquired in 2002
had broadcast expense of $18.8 million in the third quarter of 2003. For the
television stations that were owned continuously for the quarters ended
September 30, 2003 and 2002, broadcast expenses increased only 1% from the
prior period. On a pro forma basis, broadcasting operating expenses before
depreciation and amortization decreased 3% to $35.7 million from the prior
year.
4370 Peachtree Road, NE * Atlanta, GA 30319
(404) 504-9828 * Fax (404) 261-9607
NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2002
Revenues. Total revenues for the nine months ended September 30, 2003
increased 75% to $215.0 million as compared to the same period of the prior
year primarily reflecting the impact of the 2002 Acquisitions. Broadcasting
revenues increased 109% to $176.5 million. The stations acquired in 2002 had
revenue of $92.9 million in the first nine months of 2003. For the television
stations that were owned continuously for the nine month periods ended
September 30, 2003 and 2002, total revenue decreased 1% between the periods
while political revenue decreased $3.9 million. On a pro forma basis total
broadcasting revenues decreased 1% to $176.5 million from the pro forma results
for the first nine months of 2002. Broadcasting local and national revenue
increased 4% and 4% respectively from the pro forma results of 2002 while
political advertising revenue decreased $6.9 million from the pro forma results
for the first nine months of 2002.
Operating expenses. Operating expenses before depreciation and
amortization increased 77% to $140.3 million primarily reflecting the impact of
the 2002 Acquisitions. Broadcasting expenses, before depreciation and
amortization, increased 119% to $106.3 million. The stations acquired in 2002
had broadcast expense of $56.2 million in the first nine months of 2003. For
the television stations that were owned continuously for the nine month periods
ended September 30, 2003 and 2002, broadcast expenses increased 3%. On a pro
forma basis broadcasting operating expenses before depreciation and
amortization were consistent with that of the prior year at $106.3 million.
BALANCE SHEET
Total debt outstanding at September 30, 2003 was $655.9 million
compared to $658.2 million at December 31, 2002. The Company's cash balance was
$10.2 million at September 30, 2003 compared to $12.9 million at December 31,
2002
Gray Television, Inc.
Earnings Release for the Three Months
and Nine Months Ended September 30, 2003 Page 2 of 8
GUIDANCE FOR THE FOURTH QUARTER AND FULL YEAR OF 2003
The Company currently anticipates that its results of operations for
the three months ended December 31, 2003 will approximate the ranges presented
in the table below.
THREE MONTHS ENDED
Dollars in Millions DECEMBER 31, 2003
ESTIMATED RANGE
----------------------
LOW HIGH
----- -----
OPERATING REVENUES
Broadcasting (less agency commissions) $65.0 $65.8
Publishing 11.5 11.8
Paging 1.8 1.9
----- -----
TOTAL OPERATING REVENUES 78.3 79.5
----- -----
OPERATING EXPENSES
Operating expenses before depreciation and amortization
Broadcasting 38.5 38.7
Publishing 8.0 8.2
Paging 1.5 1.6
Corporate 1.4 1.5
Depreciation and amortization 7.0 7.1
----- -----
TOTAL OPERATING EXPENSES 56.4 57.1
----- -----
OPERATING INCOME $21.9 $22.4
===== =====
The Company currently anticipates that its results of operations for
the year ended December 31, 2003 will approximate the ranges presented in the
table below. The Company currently estimates that full year 2003 non-cash
401(k) plan expense will approximate $2.2 million and such estimate is included
in the operating expense estimates presented below.
YEAR ENDED
Dollars in Millions DECEMBER 31, 2003
ESTIMATED RANGE
------------------------
LOW HIGH
------ ------
OPERATING REVENUES
Broadcasting (less agency commissions) $241.5 $242.3
Publishing 44.0 44.3
Paging 7.7 7.8
------ ------
TOTAL OPERATING REVENUES 293.2 294.4
------ ------
OPERATING EXPENSES
Operating expenses before depreciation and amortization
Broadcasting 144.8 145.0
Publishing 31.6 31.8
Paging 5.7 5.8
Corporate 7.5 7.7
Depreciation and amortization 28.2 28.3
------ ------
TOTAL OPERATING EXPENSES 217.8 218.6
------ ------
OPERATING INCOME $ 75.4 $ 75.8
====== ======
Gray Television, Inc.
Earnings Release for the Three Months
and Nine Months Ended September 30, 2003 Page 3 of 8
FOR INFORMATION CONTACT:
BOB PRATHER JIM RYAN
PRESIDENT AND SENIOR V. P. AND
CHIEF OPERATING OFFICER CHIEF FINANCIAL OFFICER
(404) 266-8333 (404) 504-9828
WEB SITE: www.graytvinc.com
CONFERENCE CALL INFORMATION
Gray Television, Inc. will host a conference call to discuss its third
quarter operating results on Wednesday November 12, 2003. The call will begin
at 2:00 p.m. Eastern Time. The live dial-in number is (877) 461-2814 and the
reservation number is T456315G. The call will be webcast live and available for
replay at www.graytvinc.com. The taped replay of the conference call will be
available at (888) 509-0081 until November 23, 2003.
THE COMPANY
Gray Television, Inc. is a communications company headquartered in
Atlanta, Georgia, and currently owns 29 television stations serving 25
television markets. The stations include 15 CBS affiliates, seven NBC
affiliates and seven ABC affiliates. Gray Television, Inc. has 22 stations
ranked #1 in local news audience and 22 stations ranked #1 in overall audience
within their respective markets based on the results of the Nielsen November
2002 ratings reports. The TV station group reaches approximately 5.3% of total
U.S. TV households. The Company also owns four daily newspapers, three in
Georgia and one in Indiana.
Gray Television, Inc.
Earnings Release for the Three Months
and Nine Months Ended September 30, 2003 Page 4 of 8
GRAY TELEVISION, INC.
(in thousands, except per share data and percentages)
AS REPORTED(1) PRO FORMA(1)
THREE MONTHS ENDED THREE MONTHS ENDED
SELECTED UNAUDITED OPERATING DATA: SEPTEMBER 30, SEPTEMBER 30,
-------------------------------- -------------------
% %
2003 2002 CHANGE 2002 CHANGE
-------- ------- ------ -------- ------
OPERATING REVENUES
Broadcasting (less agency commissions) $ 60,372 $29,535 104% $ 62,965 (4)%
Publishing 10,995 10,858 1% 10,858 1%
Paging 1,985 2,116 (6)% 2,116 (6)%
-------- ------- --------
TOTAL OPERATING REVENUES 73,352 42,509 73% 75,939 (3)%
-------- ------- --------
OPERATING EXPENSES
Operating expenses before depreciation and amortization
Broadcasting 35,657 16,647 114% 36,707 (3)%
Publishing 7,917 7,790 2% 7,790 2%
Paging 1,384 1,360 2% 1,360 2%
Corporate and administrative 1,916 1,169 64% 2,372 (19)%
Depreciation and amortization 6,990 3,632 92% 5,493 27%
-------- ------- --------
TOTAL OPERATING EXPENSES 53,864 30,598 76% 53,722 0%
-------- ------- --------
Operating income 19,488 11,911 64% 22,217 (12)%
Miscellaneous income (expense), net 16 (42) NA (42) NA
Appreciation in value of derivatives, net -0- 851 (100)% 851 (100)%
Interest expense (10,458) (8,049) 30% (12,328) (15)%
-------- ------- --------
INCOME BEFORE INCOME TAXES 9,046 4,671 94% 10,698 (15)%
Income tax expense 3,490 1,555 124% 3,846 (9)%
-------- ------- --------
NET INCOME 5,556 3,116 78% 6,852 (19)%
Preferred dividends 822 800 3% 800 3 %
-------- ------- --------
NET INCOME AVAILABLE
TO COMMON STOCKHOLDERS $ 4,734 $ 2,316 104% $ 6,052 (22)%
======== ======= ========
DILUTED PER SHARE INFORMATION:
Net income per share available to common stockholders $ 0.09 $ 0.14 (35)% $ 0.12 (22)%
======== ======= ========
Weighted average shares outstanding 50,596 16,027 216% 50,527 0%
======== ======= ========
OTHER SELECTED DATA
POLITICAL REVENUE $ 1,124 $ 3,210 (65)% $ 6,494 (83)%
SELECTED BALANCE SHEET DATA: SEPT. 30 DEC. 31,
2003 2002
-------- --------
Cash and cash equivalents $ 10,208 $ 12,915
Total Debt (2) 655,904 658,220
Total debt net of cash 645,696 645,305
Gray Television, Inc.
Earnings Release for the Three Months
and Nine Months Ended September 30, 2003 Page 5 of 8
GRAY TELEVISION, INC.
(in thousands, except per share data and percentages)
AS REPORTED(1) PRO FORMA(1)
NINE MONTHS ENDED NINE MONTHS ENDED
SELECTED UNAUDITED OPERATING DATA: SEPTEMBER 30, SEPTEMBER 30,
------------------------------- -------------------
% %
2003 2002 CHANGE 2002 CHANGE
-------- -------- ------ -------- ------
OPERATING REVENUES
Broadcasting (less agency commissions) $176,524 $ 84,541 109% $178,420 (1)%
Publishing 32,535 32,074 1% 32,074 1%
Paging 5,915 6,199 (5)% 6,199 (5)%
-------- -------- --------
TOTAL OPERATING REVENUES 214,974 122,814 75% 216,693 (1)%
-------- -------- --------
OPERATING EXPENSES
Operating expenses before depreciation and amortization
Broadcasting 106,299 48,622 119% 106,481 (0)%
Publishing 23,605 23,210 2% 23,210 2%
Paging 4,234 4,114 3% 4,114 3%
Corporate and administrative 6,159 3,285 87% 6,304 (2)%
Depreciation and amortization 21,159 11,065 91% 16,649 27%
-------- -------- --------
TOTAL OPERATING EXPENSES 161,456 90,296 79% 156,758 3%
-------- -------- --------
Operating income 53,518 32,518 65% 59,935 (11)%
Miscellaneous income, net 132 55 140% 55 140%
Appreciation in value of derivatives, net -0- 1,581 (100)% 1,581 (100)%
Interest expense (32,700) (24,915) 31% (38,077) (14)%
Loss on early extinguishment of debt -0- (11,275) NA (11,275) NA
-------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE 20,950 (2,036) NA 12,219 71%
Income tax expense (benefit) 8,191 (786) NA 4,631 77%
-------- -------- --------
NET INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 12,759 (1,250) NA 7,588 68%
Cumulative effect of accounting change, net
of $8,873 income tax benefit -0- (30,592) NA (30,592) NA
-------- -------- --------
NET INCOME (LOSS) 12,759 (31,842) NA (23,004) NA
Preferred dividends 2,465 1,603 54% 1,603 54%
Preferred dividends associated with the redemption
of preferred stock -0- 3,969 (100)% 3,969 (100)%
-------- -------- --------
NET INCOME (LOSS) AVAILABLE
TO COMMON STOCKHOLDERS $ 10,294 $(37,414) NA $(28,576) NA
======== ======== ========
DILUTED PER SHARE INFORMATION:
Net income (loss) before cumulative effect of
accounting change available to common stockholders $ 0.20 $ (0.43) NA $ 0.04 410%
Cumulative effect of accounting change, net of income taxes -0- (1.95) NA (0.61) NA
-------- -------- --------
Net income (loss) per share available to common stockholders $ 0.20 $ (2.38) NA $ (0.57) NA
======== ======== ========
Weighted average shares outstanding 50,574 15,692 222% 50,522 0%
======== ======== ========
OTHER SELECTED DATA
POLITICAL REVENUE $ 3,417 $ 5,399 (37)% $ 10,287 (67)%
Gray Television, Inc.
Earnings Release for the Three Months
and Nine Months Ended September 30, 2003 Page 6 of 8
NOTES:
Note 1. "As Reported (1)" and "Pro forma"
Information in this earnings release has been presented under two different
methods: as reported and pro forma. The as reported basis of presentation gives
effect to the acquisitions as of their respective acquisition dates. The pro
forma presentation gives effect to the acquisitions of Stations Holding
Company, Inc. which occurred on October 25, 2002 and KOLO-TV which occurred on
December 18, 2002 as if each had occurred on January 1, 2002. Accordingly, the
pro forma presentation combines the Company's historical results of operations
with the respective acquired operation's historical pre-acquisition operating
results. Certain amounts of corporate overhead were eliminated in the pro forma
presentation. Depreciation and amortization expense in the pro forma
presentation give effect to accounting for the respective acquisitions. Pro
forma income tax expense or benefit assumes an effective tax rate of 38% on the
pro forma incremental net pre-tax income or loss. Pro forma interest expense
and shares outstanding give effect to the Company's issuance of additional debt
and common equity to finance, in part, the acquisitions. An unaudited
reconciliation between the as reported and the pro forma condensed consolidated
statements of operations for the three months and nine months ended September
30, 2002 follows:
Data in Thousands THREE MONTHS ENDED SEPTEMBER 30, 2002
------------------------------------------
AS EFFECT OF
REPORTED ACQUISITIONS PRO FORMA
-------- ------------ ---------
Operating revenues
Broadcasting (less agency commissions) $ 29,535 $ 33,430 $ 62,965
Publishing 10,858 -0- 10,858
Paging 2,116 -0- 2,116
-------- -------- --------
Total operating revenues 42,509 33,430 75,939
-------- -------- --------
Operating expenses before depreciation and amortization
Broadcasting 16,647 20,060 36,707
Publishing 7,790 -0- 7,790
Paging 1,360 -0- 1,360
Corporate and administrative 1,169 1,203 2,372
Depreciation and amortization 3,632 1,861 5,493
-------- -------- --------
Total operating expenses 30,598 23,124 53,722
-------- -------- --------
Operating income 11,911 10,306 22,217
Miscellaneous income (expense), net (42) -0- (42)
Appreciation in value of derivatives, net 851 -0- 851
Interest expense (8,049) (4,279) (12,328)
-------- -------- --------
Income before income tax 4,671 6,027 10,698
Income tax expense 1,555 2,291 3,846
-------- -------- --------
Net income 3,116 3,736 6,852
Preferred dividends 800 -0- 800
-------- -------- --------
Net income available to common stockholders $ 2,316 $ 3,736 $ 6,052
======== ======== ========
Diluted weighted average shares outstanding 16,027 34,500 50,527
======== ======== ========
Other Selected Data:
Broadcast Revenue
Local $ 15,958 $ 18,989 $ 34,947
National 8,082 9,045 17,127
Network compensation 1,368 871 2,239
Political 3,211 3,283 6,494
Other 916 1,242 2,158
-------- -------- --------
Total Broadcast Revenue $ 29,535 $ 33,430 $ 62,965
======== ======== ========
Gray Television, Inc.
Earnings Release for the Three Months
and Nine Months Ended September 30, 2003 Page 7 of 8
Data in Thousands NINE MONTHS ENDED SEPTEMBER 30, 2002
---------------------------------------------
AS EFFECT OF
REPORTED ACQUISITIONS PRO FORMA
-------- ------------ ---------
Operating revenues
Broadcasting (less agency commissions) $ 84,541 $ 93,879 $ 178,420
Publishing 32,074 -0- 32,074
Paging 6,199 -0- 6,199
--------- --------- ---------
Total operating revenues 122,814 93,879 216,693
--------- --------- ---------
Operating expenses before depreciation and amortization
Broadcasting 48,622 57,859 106,481
Publishing 23,210 -0- 23,210
Paging 4,114 -0- 4,114
Corporate and administrative 3,285 3,019 6,304
Depreciation and amortization 11,065 5,584 16,649
--------- --------- ---------
Total operating expenses 90,296 66,462 156,758
--------- --------- ---------
Operating income 32,518 27,417 59,935
Miscellaneous income, net 55 -0- 55
Appreciation in value of derivatives, net 1,581 -0- 1,581
Interest expense (24,915) (13,162) (38,077)
Loss on early extinguishment of debt (11,275) -0- (11,275)
--------- --------- ---------
Income (loss) before income tax and cumulative effect of accounting (2,036) 14,255 12,219
change
Income tax expense (benefit) (786) 5,417 4,631
--------- --------- ---------
Net income (loss) before cumulative effect of accounting change (1,250) 8,838 7,588
Cumulative effect of accounting change, net of $8,873 income tax (30,592) -0- (30,592)
benefit
--------- --------- ---------
Net income (loss) (31,842) 8,838 (23,004)
Preferred dividends 5,572 -0- 5,572
--------- --------- ---------
Net income (loss) available to common stockholders $ (37,414) $ 8,838 $ (28,576)
========= ========= =========
Diluted weighted average shares outstanding 15,692 34,830 50,522
========= ========= =========
Other Selected Data:
Broadcast Revenue
Local $ 47,871 $ 56,312 $ 104,183
National 24,095 26,101 50,196
Network compensation 3,981 2,666 6,647
Political 5,399 4,888 10,287
Other 3,195 3,912 7,107
--------- --------- ---------
Total Broadcast Revenue $ 84,541 $ 93,879 $ 178,420
========= ========= =========
Note 2. Debt
Total debt as of September 30, 2003 and December 31, 2002 does not include $1.2
million and $1.3 million, respectively, of unamortized debt discount on the
Company's 9 1/4% Senior Subordinated Notes due March 2011.
CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT
The preceding comments on Gray's current expectations of operating results
for the fourth quarter of 2003 are "forward looking" for purposes of the
Private Securities Litigation Reform Act of 1995. Actual results of operations
are subject to a number of risks and may differ materially from the current
expectations discussed in this press release. See the Company's annual report
on Form 10K for a discussion of risk factors that may affect the Company.
Gray Television, Inc.
Earnings Release for the Three Months
and Nine Months Ended September 30, 2003 Page 8 of 8