Fourth Quarter Financial Highlights
Gray Communications Systems, Inc.
Financial Highlights
(in thousands, except per share data)
               
  Three Months Ended December 31,
  Historical   Pro Forma*
  1999 1998 % Change   1999 1998 % Change
OPERATING REVENUES              
 Broadcasting $ 31,155 $ 26,459 18 %   $ 31,155 $ 33,045 (6)%
 Publishing 10,564 8,035 31 %   10,564 9,319 13 %
 Paging 2,283 2,508 (9)%   2,283 2,508 (9)%
 TOTAL OPERATING REVENUES 44,002 37,002 19 %   44,002 44,872 (2)%
               
EXPENSES              
 Broadcasting  18,142 14,740 23 %   18,142 17,840 2 %
 Publishing  7,812 6,733 16 %   7,812 7,706 1 %
 Paging  1,746 1,536 14 %   1,746 1,536 14 %
 Corporate and administrative 891 935 (5)%   891 935 (5)%
 Depreciation and amortization 7,635 5,229 46 %   7,635 7,201 6 %
  TOTAL EXPENSES 36,226 29,173 24 %   36,226 35,218 3 %
  7,776 7,829 (1)%   7,776 9,654 (19)%
Miscellaneous income (expense)  (224) 107 (309)%   (224) (4) NA
  7,552 7,936 (5)%   7,552 9,650 (22)%
Interest expense  10,130 6,863 48 %   10,130 9,748 4 %
  INCOME (LOSS) BEFORE INCOME TAXES (2,578) 1,073 (340)%   (2,578) (98) 2531 %
Income tax expense (benefit)  (871) 598 (246)%   (871) 200 (536)%
  NET INCOME (LOSS) (1,707) 475 (459)%   (1,707) (298) 473 %
Preferred dividends  252 254 (1)%   252 254 (1)%
  NET INCOME ( LOSS) AVAILABLE              
  TO COMMON STOCKHOLDERS $ (1,959) $ 221 (986)%   $ (1,959) $ (552) 255 %
               
Media Cash Flow**:               
 Broadcasting  $ 13,491 $ 11,811 14 %   $ 13,491 $ 15,244 (11)%
 Publishing  2,786 1,326 110 %   2,786 1,637 70 %
 Paging  543 978 (44)%   543 978 (44)%
 Consolidated  $ 16,820 $ 14,115 19 %   $ 16,820 $ 17,859 (6)%
               
Media Cash Flow** margins:               
 Broadcasting  43 % 45 %     43 % 46 %  
 Publishing  26 % 17 %     26 % 18 %  
 Paging  24 % 39 %     24 % 39 %  
 Consolidated  38 % 38 %     38 % 40 %  
               
Income (loss) per share available               
 to common stockholders:               
 Basic $ (0.13) $ 0.02     $ (0.13) $ (0.04)  
 Diluted $ (0.13) $ 0.02     $ (0.13) $ (0.04)  
               
Weighted average shares outstanding:               
 Basic 15,423 11,962 29 %   15,423 15,398 0 %
 Diluted 15,423 12,323 25 %   15,423 15,398 0 %
 

 

Gray Communications Systems, Inc.
Financial Highlights
(in thousands, except per share data)
               
  Twelve Months Ended December 31,***
 

Historical

   Pro Forma*
  1999 1998 % Change   1999 1998 % Change
OPERATING REVENUES              
 Broadcasting  $ 97,015 $ 91,007 7 %   $ 114,418 $ 118,881 (4)%
 Publishing  37,808 29,330 29 %   38,490 34,110 13 %
 Paging  9,130 8,553 7 %   9,130 8,553 7 %
 TOTAL OPERATING REVENUES 143,953 128,890 12 %   162,038 161,544 0 %
               
EXPENSES               
 Broadcasting  58,661 52,967 11 %   68,184 67,593 1 %
 Publishing  28,782 24,197 19 %   29,368 27,855 5 %
 Paging 6,551 5,618 17 %   6,551 5,618 17 %
 Corporate and administrative  3,448 3,063 13 %   3,448 3,063 13 %
 Depreciation and amortization  24,451 18,117 35 %   30,050 28,834 4 %
 TOTAL EXPENSES 121,893 103,962 17 %   137,601 132,963 3 %
  22,060 24,928 (12)%   24,437 28,581 (14)%
Gain on exchange of television station  -0- 72,646 NA   -0- -0- NA
Valuation adjustment of goodwill and other assets  -0- (2,074) NA   -0- (2,074) NA
Miscellaneous income (expense)  336 (242) NA   350 46 661 %
  22,396 95,258 (76)%   24,787 26,553 (7)%
Interest expense 31,021 25,454 22 %   38,861 40,737 (5)%
 INCOME (LOSS) BEFORE INCOME TAXES  (8,625) 69,804 (112)%   (14,074) (14,184) (1)%
Income tax expense (benefit) (2,310) 28,144 (108)%   (4,163) (4,044) 3 %
 NET INCOME (LOSS) (6,315) 41,660 (115)%   (9,911) (10,140) (2)%
Preferred dividends  1,010 1,318 (23)%   1,010 1,318 (23)%
 NET INCOME (LOSS) AVAILABLE              
  TO COMMON STOCKHOLDERS $ (7,325) $ 40,342 (118)%   $ (10,921) $ (11,458) (5)%
               
Media Cash Flow**:               
 Broadcasting $ 39,207 $ 38,446 2 %   $ 46,967 $ 51,662 (9)%
 Publishing 9,130 5,214 75 %   9,225 6,336 46 %
 Paging 2,607 2,964 (12)%   2,607 2,964 (12)%
 Consolidated $ 50,944 $ 46,624 9 %   $ 58,799 $ 60,962 (4)%
               
Media Cash Flow** margins:              
 Broadcasting 40 % 42 %     41 % 43 %  
 Publishing 24 % 18 %     24 % 19 %  
 Paging 29 % 35 %     29 % 35 %  
 Consolidated 35 % 36 %     36 % 38 %  
               
Income (loss) per share available            
 to common stockholders:             
 Basic $ (0.57) $ 3.38     $ (0.71) $ (0.75)  
 Diluted $ (0.57) $ 3.25     $ (0.71) $ (0.75)  
               
Weighted average shares outstanding:               
 Basic 12,838 11,923 8 %   15,415 15,359 0 %
 Diluted 12,838 12,404 3 %   15,415 15,359 0 %

No Political

The following tables exclude political revenue from Gray's historical and pro forma financial information. These tables present certain financial results of Gray without the impact of cyclical political revenue. Excluding the impact of the political revenue, Gray's revenue and Media Cash Flow** increased over the prior year on a historical and pro forma basis.
                     
                     
Gray Communications Systems, Inc.
Financial Highlights Excluding Political Revenue
(in thousands)
                     
                     
        Three Months Ended December 31,
        Historical (Excluding Political Revenues)   Pro Forma* (Excluding Political Revenues)
        1999 1998 % Change   1999 1998 % Change
OPERATING REVENUES - excluding political revenue                   
Broadcasting - excluding political revenue    $ 30,757 $ 23,012 34 %   $ 30,757 $ 29,024 6 %
Publishing     10,564 8,035 31 %   10,564 9,319 13 %
Paging     2,283 2,508 (9)%   2,283 2,508 (9)%
 TOTAL OPERATING REVENUES - excluding political revenue   $ 43,604 $ 33,555 30 %   $ 43,604 $ 40,851 7 %
                     
                     
Media Cash Flow** - excluding political revenue                   
  Broadcasting - excluding political revenue   $ 13,093 $ 8,364 57 %   $ 13,093 $ 11,223 17 %
  Publishing     2,786 1,326 110 %   2,786 1,637 70 %
  Paging     543 978 (44)%   543 978 (44)%
  Consolidated - excluding political revenue    $ 16,422 $ 10,668 54 %   $ 16,422 $ 13,838 19 %
                     
Media Cash Flow** margins: - excluding political revenue                  
  Broadcasting - excluding political revenue    43 % 36 %     43 % 39 %  
  Publishing     26 % 17 %     26 % 18 %  
  Paging     24 % 39 %     24 % 39 %  
  Consolidated - excluding political revenue    38 % 32 %     38 % 34 %  
                     
                     
                     
        Twelve Months Ended December 31,
        Historical (Excluding Political Revenues)   Pro Forma* (Excluding Political Revenues)
        1999 1998 % Change   1999 1998 % Change
OPERATING REVENUES - excluding political revenue                   
  Broadcasting - excluding political revenue    $ 96,393 $ 83,131 16 %   $ 113,785 $ 109,969 3 %
  Publishing     37,808 29,330 29 %   38,490 34,110 13 %
  Paging     9,130 8,553 7 %   9,130 8,553 7 %
 TOTAL OPERATING REVENUES - excluding political revenue   $ 143,331 $ 121,014 18 %   $ 161,405 $ 152,632 6 %
                     
                     
Media Cash Flow** - excluding political revenue                   
  Broadcasting - excluding political revenue     $ 38,585 $ 30,570 26 %   $ 46,334 $ 42,750 8 %
  Publishing     9,130 5,214 75 %   9,225 6,336 46 %
  Paging     2,607 2,964 (12)%   2,607 2,964 (12)%
  Consolidated - excluding political revenue     $ 50,322 $ 38,748 30 %   $ 58,166 $ 52,050 12 %
                     
Media Cash Flow** margins: - excluding political revenue                   
  Broadcasting - excluding political revenue     40 % 37 %     41 % 39 %  
  Publishing     24 % 18 %     24 % 19 %  
  Paging     29 % 35 %     29 % 35 %  
  Consolidated - excluding political revenue     35 % 32 %     36 % 34 %  

 

 

 

 

* Gray Communications Systems, Inc. ("Gray" or the "Company") acquired KWTX Broadcasting Company operating KWTX-TV, Brazos Broadcasting Company operating KBTX-TV and the assets of KXII-TV on October 1, 1999. In addition, Gray acquired the assets of The Goshen News on March 1, 1999. The Company also acquired Busse Broadcasting Corporation and disposed of WALB-TV on July 31, 1998. The results of operations of these acquired businesses have been included in the Company’s historical financial statements since their respective acquisition dates. The pro forma results of operations of these acquired businesses have been included in the Company’s pro forma financial statements since the first day of the respective reporting period. The results of operations of WALB -TV have been excluded from the Company’s pro forma financial statements since the first day of the respective reporting period.

 

** Media Cash Flow is defined as operating income, plus depreciation, non-cash compensation, amortization (including amortization of program license rights), and corporate overhead, less payments for program license liabilities. The Company has included Media Cash Flow data because such data is commonly used as a measure of performance for media companies and is also used by investors to measure a company’s ability to service debt. Media Cash Flow is not, and should not, be used as an indicator or alternative to operating income, net income or cash flow as reflected in the Company’s consolidated financial statements. Media Cash Flow is not a measure of financial performance under generally accepted accounting principles and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles.

 

*** Certain items reported for the prior year are reclassified to conform to the 1999 format.

Gray Communications Systems, Inc. is a communications company headquartered in Atlanta, Georgia, and operates thirteen television stations (ten CBS and three NBC affiliated stations), four daily newspapers and an advertising weekly shopper, a paging business and a satellite uplink and production business. The Company’s current operations are concentrated in the South, Southwest and Midwest U. S.