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| MEG > SEC Filings for MEG > Form 8-K on 29-Jun-2012 | All Recent SEC Filings |
29-Jun-2012
Completion of Acquisition or Disposition of Assets, Financial Statements and Ex
On June 25, 2012, Media General, Inc. (the Company) completed the previously announced sale of all of its newspapers, with the exception of its group of newspapers in and around Tampa, Florida, to World Media Enterprises Inc. (World Media, a subsidiary of Berkshire Hathaway, Inc.) for $142 million in cash subject to adjustment for working capital and other items. The Company retained the previously frozen pension assets and liabilities and post-retirement obligations related to employees of the businesses that were sold. The newspapers purchased by World Media include 63 daily and weekly titles in Virginia, North Carolina, South Carolina and Alabama.
The foregoing description of the disposition does not purport to be complete and is qualified in its entirety by reference to the full text of the Asset Purchase Agreement, as amended. The Asset Purchase Agreement was filed as Exhibit 10.1 to the Current Report on Form 8-K filed on May 18, 2012 and is incorporated by reference herein. Amendment No. 1 to Asset Purchase Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated by reference herein.
The Company expects to record an after-tax loss on the sale of newspapers to World Media in the range of $105-115 million in the second quarter of 2012. After transaction fees and the repayment of funds drawn on the revolving credit facility, the Company intends to use the net proceeds from the newspaper sale to offer to repay on a pro rata basis the existing senior secured notes and its term loan at par with no prepayment penalty.
(b) Pro Forma Financial Information
The following unaudited pro forma condensed consolidated financial statements and notes thereto are included below: unaudited pro forma balance sheet as of March 25, 2012 and unaudited pro forma statements of operations for the three months ended March 25, 2012 and March 27, 2011 and for the fiscal years ended December 25, 2011, December 26, 2010 and December 27, 2009.
The unaudited pro forma condensed consolidated balance sheet as of March 25, 2012 is based on the Company's balance sheet as of March 25, 2012, after giving effect the sale transaction as if it had occurred as of March 25, 2012. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 25, 2012 and March 27, 2011, and for the fiscal years ended December 25, 2011, December 26, 2010 and December 27, 2009, give effect to the transaction as if it occurred on December 29, 2008. In the second quarter, the Company's Production Services business ceased operations, and the Company sold the assets of DealTaker.com to a private buyer for a nominal amount. The Company is also in discussions with prospective buyers for its Tampa print properties and associated websites, a sale of these properties is considered probable. These businesses are collectively shown as "other properties to be divested" for each period presented and will be reflected as discontinued operations in the second quarter Form 10-Q.
In order to derive the pro forma financial information, the historical results of the Company have been adjusted to eliminate the assets, liabilities, and results of operations of the newspapers sold to World Media, as well as the Tampa print properties and related websites, DealTaker.com, and the Company's Productions Services business, all which have historically been consolidated by the Company. Pro forma adjustments are described in the notes to the unaudited condensed consolidated pro forma consolidated financial statements.
The unaudited pro forma financial statements have been provided for information purposes only and do not purport to be indicative of what would have occurred had the disposition actually been made as of such dates, nor are they indicative of results which may occur in the future. For example, the unaudited pro forma financial statements do not reflect the Company's intentions to reduce its corporate overhead by 35%-40%. It also does not reflect its new capital structure following a refinancing of bank debt in May 2012. The unaudited pro forma financial statements should be read in conjunction with the historical financial statements of the Company included in its Annual Report on Form 10-K for the year ended December 25, 2011 and its Quarterly Report on Form 10-Q for the quarter ended March 25, 2012.
Media General, Inc.
Pro Forma Condensed Consolidated
Balance Sheet
(Unaudited, in
thousands)
As of March 25, 2012
Adjustments for Adjustments for
Properties Sold Other Properties
to World Media to be Divested
Historical (1a) (1f) Pro Forma
ASSETS
Current assets:
Cash and cash
equivalents $ 12,177 $ (19 ) $ (6 ) $ 12,152
Accounts receivable -
net 83,263 (19,016 ) (8,072 ) 56,175
Inventories 6,105 (4,562 ) (1,543 ) -
Other 18,953 (2,376 ) (1,917 ) 14,660
Assets of discontinued
operations - - 24,375 (1g ) 24,375
Total current assets 120,498 (25,973 ) 12,837 107,362
Other assets 38,536 (3,623 ) (821 ) 34,092
Property, plant and
equipment - net 364,724 (173,918 ) (26,726 ) 164,080
FCC licenses and other
intangibles - net 203,760 (2,019 ) (50 ) 201,691
Excess of cost over fair
value of net
identifiable assets of
acquired businesses -
net 315,590 (66,023 ) (2,460 ) 247,107
Total assets $ 1,043,108 $ (271,556 ) $ (17,220 ) $ 754,332
Current liabilities:
Accounts payable $ 24,603 $ (6,571 ) $ (3,593 ) $ 14,439
Accrued expenses and
other liabilities 68,228 (16,066 ) (1b ) (6,719 ) 45,443
Liabilities of
discontinued operations - - 10,884 10,884
Total current
liabilities 92,831 (22,637 ) 572 70,766
Long-term debt 658,444 (134,738 ) (1c ) - 523,706
Retirement,
post-retirement and
post-employment plans 221,121 - - 221,121
Deferred income taxes 46,334 (1,121 ) (1d ) 3,116 (1h ) 48,329
Other liabilities and
deferred credits 24,361 (60 ) (572 ) 23,729
Stockholders' equity
(deficit) 17 (113,000 ) (1e ) (20,336 ) (1i ) (133,319 )
Total liabilities and
stockholders' equity
(deficit) $ 1,043,108 $ (271,556 ) $ (17,220 ) $ 754,332
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See notes to the pro forma condensed consolidated financial statements.
Media General, Inc.
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited, in thousands except per share
amounts)
For the Three Months Ended March 25, 2012
Adjustments for
Adjustments for Other Properties
Properties Sold to to be Divested
Historical World Media (2a) (2b) Pro Forma
Revenues
Broadcast television $ 73,442 $ - $ (1,290 ) $ 72,152
Digital media and other 8,808 (4,123 ) (1,718 ) 2,967
Print 67,264 (50,929 ) (16,335 ) -
Total revenues 149,514 (55,052 ) (19,343 ) 75,119
Operating costs:
Employee compensation 73,204 (27,075 ) (9,245 ) 36,884
Production 35,599 (10,826 ) (6,685 ) 18,088
Selling, general and
administrative 25,003 (9,782 ) (6,455 ) 8,766
Depreciation and amortization 12,494 (4,079 ) (1,100 ) 7,315
Goodwill and other asset
impairment 10,082 - (10,082 ) -
Total operating costs 156,382 (51,762 ) (33,567 ) 71,053
Operating income (loss) (6,868 ) (3,290 ) 14,224 4,066
Other income (expense):
Interest expense (15,152 ) 1 - (15,151 )
Debt modification costs (10,408 ) - - (10,408 )
Other, net 200 - (15 ) 185
Total other income (expense) (25,360 ) 1 (15 ) (25,374 )
Income (loss) from continuing
operations before income taxes (32,228 ) (3,289 ) 14,209 (21,308 )
Income tax expense (benefit) 2,196 (2,308 ) 3,520 3,408
Income (loss) from continuing
operations $ (34,424 ) $ (981 ) $ 10,689 $ (24,716 )
Loss from continuing operations
per common share basic and
assuming dilution $ (1.53 ) $ (1.10 )
Weighted average common shares 22,555 22,555
|
See notes to the pro forma condensed consolidated financial statements.
Media General, Inc.
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited, in thousands except per share
amounts)
For the Three Months Ended March 27, 2011
Adjustments for
Adjustments for Other Properties
Properties Sold to to be Divested
Historical World Media (3a) (3b) Pro Forma
Revenues
Broadcast television $ 65,326 $ - $ (1,381 ) $ 63,945
Digital media and other 10,273 (3,855 ) (3,075 ) 3,343
Print 73,344 (54,073 ) (19,271 ) -
Total revenues 148,943 (57,928 ) (23,727 ) 67,288
Operating costs:
Employee compensation 78,219 (28,709 ) (12,992 ) 36,518
Production 35,756 (10,847 ) (7,806 ) 17,103
Selling, general and
administrative 26,196 (10,188 ) (7,167 ) 8,841
Depreciation and amortization 13,019 (4,462 ) (1,339 ) 7,218
Total operating costs 153,190 (54,206 ) (29,304 ) 69,680
Operating loss (4,247 ) (3,722 ) 5,577 (2,392 )
Other income (expense):
Interest expense (16,564 ) 1 - (16,563 )
Other, net 265 - (23 ) 242
Total other income (expense) (16,299 ) 1 (23 ) (16,321 )
Income (loss) from continuing
operations before income taxes (20,546 ) (3,721 ) 5,554 (18,713 )
Income tax expense (benefit) 5,258 (2,569 ) (93 ) 2,596
Income (loss) from continuing
operations $ (25,804 ) $ (1,152 ) $ 5,647 $ (21,309 )
Loss from continuing operations
per common share basic and
assuming dilution $ (1.15 ) $ (0.95 )
Weighted average common shares 22,400 22,400
|
See notes to the pro forma condensed consolidated financial statements.
Media General, Inc.
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited, in thousands except per share
amounts)
For the Fiscal Year Ended December 25, 2011
Adjustments for Adjustments for
Properties Sold Other Properties
to World Media to be Divested
Historical (4a) (4b) Pro Forma
Revenues
Broadcast television $ 278,669 $ - $ (6,419 ) $ 272,250
Digital media and other 37,977 (16,713 ) (9,182 ) 12,082
Print 299,561 (224,574 ) (74,987 ) -
Total revenues 616,207 (241,287 ) (90,588 ) 284,332
Operating costs:
Employee compensation 285,635 (106,783 ) (50,485 ) 128,367
Production 139,963 (44,878 ) (29,291 ) 65,794
Selling, general and
administrative 106,636 (42,001 ) (26,858 ) 37,777
Depreciation and amortization 51,575 (17,575 ) (5,320 ) 28,680
Goodwill and other asset
impairment 32,645 (26,617 ) (6,028 ) -
Total operating costs 616,454 (237,854 ) (117,982 ) 260,618
Operating income (loss) (247 ) (3,433 ) 27,394 23,714
Other income (expense):
Interest expense (64,408 ) 5 - (64,403 )
Other, net 1,035 - 247 1,282
Total other expense (63,373 ) 5 247 (63,121 )
Income (loss) from continuing
operations before income taxes (63,620 ) (3,428 ) 27,641 (39,407 )
Income tax expense (benefit) 10,702 106 1,410 12,218
Income (loss) from continuing
operations $ (74,322 ) $ (3,534 ) $ 26,231 $ (51,625 )
Loss from continuing operations
per common share basic and
assuming dilution $ (3.31 ) $ (2.30 )
Weighted average common shares 22,478 22,478
|
See notes to the pro forma condensed consolidated financial statements.
Media General, Inc.
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited, in thousands except per share
amounts)
For the Fiscal Year Ended December 26, 2010
Adjustments for Adjustments for
Properties Sold Other Properties
to World Media to be Divested
Historical (5a) (5b) Pro Forma
Revenues
Broadcast television $ 306,750 $ - $ (8,907 ) $ 297,843
Digital media and other 42,993 (14,483 ) (15,644 ) 12,866
Print 328,372 (242,704 ) (85,668 ) -
Total revenues 678,115 (257,187 ) (110,219 ) 310,709
Operating costs:
Employee compensation 297,725 (113,119 ) (52,426 ) 132,180
Production 147,482 (44,615 ) (30,758 ) 72,109
Selling, general and
administrative 107,887 (42,014 ) (28,304 ) 37,569
Depreciation and amortization 53,089 (18,245 ) (5,715 ) 29,129
Gain on insurance recovery (956 ) 956 - -
Total operating costs 605,227 (217,037 ) (117,203 ) 270,987
Operating income (loss) 72,888 (40,150 ) 6,984 39,722
Other income (expense):
Interest expense (71,053 ) 6 - (71,047 )
Other, net 954 - 32 986
Total other expense (70,099 ) 6 32 (70,061 )
Income (loss) from continuing
operations before income taxes 2,789 (40,144 ) 7,016 (30,339 )
Income tax expense (benefit) 25,427 (14,990 ) (394 ) 10,043
Income (loss) from continuing
operations $ (22,638 ) $ (25,154 ) $ 7,410 $ (40,382 )
Loss from continuing operations
per common share basic and
assuming dilution $ (1.01 ) $ (1.81 )
Weighted average common shares 22,341 22,341
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