ATLANTA, Feb. 14 /PRNewswire-FirstCall/ --
Bull Run Corporation (Nasdaq: BULL) today announced that total revenue
from continuing operations for its second quarter ended December 31, 2001, was
$34,082,000 compared to $35,905,000 for the same period last year. Primarily
all the revenue is attributable to the operations of Host Communications,
Inc., Bull Run's wholly owned subsidiary. Total revenue from continuing
operations for the six months ended December 31, 2001, was $57,186,000
compared to $59,888,000 for the same period last fiscal year.
Bull Run reported several non-cash items that impacted its net results.
The Company adopted a new accounting standard effective July 1, 2001, that
eliminated the requirement to amortize goodwill and certain other intangible
assets. Therefore amortization of acquisition intangibles, including
goodwill, decreased to $365,000 for the three months and $621,000 for the six
months ended December 31, 2001, from $1,020,000 and $2,158,000 for the same
respective periods in 2000. Equity in earnings (losses) of affiliated
companies, which is Bull Run's proportionate share of net results reported by
Gray Communications Systems, Inc., Rawlings Sporting Goods Company and iHigh,
Inc., negatively impacted Bull Run's pretax loss by $99,000 for the three
months and $1,041,000 for the six months ended December 31, 2001, compared to
$771,000 and $1,754,000 for the same respective periods in 2000. Debt issue
cost amortization negatively impacted the pretax results by $620,000 for the
three months and $1,467,000 for the six months ended December 31, 2001,
compared to $440,000 and $1,253,000 for the same respective periods in 2000.
In the prior year, the Company reduced the value of an investment asset
resulting in a non-cash pretax charge of $6,180,000 in the three months and
six months ended December 31, 2000.
The non-cash net appreciation (depreciation) in the value of derivative
instruments for the three months and six months ended December 31, 2001, was
$(1,348,000) and $(3,493,000), respectively, compared to $6,050,000 and
$5,928,000 for the same respective periods in 2000. Derivative instruments
consist of interest rate swap agreements to convert variable interest rates
incurred on the Company's bank debt to fixed interest rates, and investments
in warrants to acquire Gray common stock. In the six months ended December
31, 2000, the Company reported a charge of $1,120,000, net of tax, for the
cumulative effect of the change in accounting method for these derivative
instruments.
The Company reported a $2,814,000 gain on the sale of investments for the
six months ended December 31, 2001, and approximately $2,160,000 for the three
months and six months ended December 31, 2000. Primarily as a result of the
non-cash items discussed above representing approximately $2.4 million in
pretax loss for the three months and $6.6 million in pretax loss for the six
months ended December 31, 2001, the Company reported a net loss of $3,297,000
for the three months and $6,962,000 for the six months ended December 31,
2001, compared to a net loss of $33,000 for the three months and $6,863,000
for the six months ended December 31, 2000. The non-cash items discussed
above had approximately a $2.4 million and $5.4 million impact on pretax loss
before the effect of the change in accounting method for the three months and
six months ended December 31, 2000, respectively.
The Company and its bank lenders recently amended the Company's credit
agreement to, among other things, revise the maturity date of the facility to
February 22, 2002. The Company and the bank lenders are currently negotiating
the terms of an extension of the present facility beyond February 22, 2002, to
provide sufficient time to successfully negotiate a long-term refinancing of
the credit facility. The Company believes that it will be able to reach an
acceptable agreement with the bank lenders on the terms of an extension and
ultimately on the terms of a long-term refinancing. A long-term refinancing
of the credit facility may involve a significant reduction in the total amount
of financing available from the bank lenders, and the Company believes it has
the ability to successfully achieve such a reduction within a time frame
acceptable to its bank lenders. The Company has reduced its bank term debt by
over $20 million in the six months ended December 31, 2001, as a result of the
sale of certain investment assets and the issuance of new equity to affiliated
parties. The Company's chairman personally guarantees up to $79.8 million of
the $88.5 million currently outstanding under the present bank credit
facility.
Robert S. Prather, Jr., Bull Run's President and CEO, commented, "Our
operating results are reflective of the significant downturn in corporate
advertising and sponsorship spending. We have reacted by significantly
reducing our overhead and operating cost structure; however, we won't realize
the full impact of these adjustments until the second half of the year.
Although we weren't able to deliver acceptable results this quarter, we
continue to work on cost reduction initiatives and developing key
relationships with current and prospective corporate sponsors and advertisers
that will benefit us as the economy turns back in our favor."
Regarding the status of the Company's credit agreement, Mr. Prather
stated, "We are working diligently with our bank group to restructure our
credit arrangement so that it will be conducive to our future needs. We are
exploring several alternatives that would improve our balance sheet and reduce
our total debt to an extent that we believe will be acceptable to our lenders.
We continue to be very optimistic about the future of our business despite
some recent setbacks, particularly in light of our new 11-year agreement with
CBS Sports that will commence in September 2002 extending Host's 26-year
relationship with the NCAA and its position as the foremost company in college
sports marketing."
Bull Run, through Host Communications, provides affinity, multimedia,
promotional and event management services to universities, athletic
conferences, associations and corporations. Bull Run also has significant
investments in Gray Communications Systems, Inc., an owner and operator of 13
television stations and four newspapers; Rawlings Sporting Goods Company,
Inc., a leading supplier of team sports equipment in North America; and iHigh
Inc., a marketing company focused on high school students.
Forward-Looking Statements
Certain statements in this press release are "forward looking" statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are not guarantees of future performance and actual results
may differ materially from those forecasted.
Summarized financial results for the three months and six months ended
December 31, 2001, and 2000 follow:
BULL RUN CORPORATION
Comparative Results of Operations (Unaudited)
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
December 31, December 31,
2001 2000 2001 2000
Revenue from services rendered $34,082 $35,905 $57,186 $59,888
Operating costs and expenses:
Direct operating costs for
services rendered 26,037 23,401 42,378 41,612
Selling, general and
administrative 8,352 9,304 16,992 17,885
Amortization of acquisition
intangiibles 365 1,020 621 2,158
34,754 33,725 59,991 61,655
Income (loss) from
operations (672) 2,180 (2,805) (1,767)
Equity in earnings (losses) of
affiliated companies (99) (771) (1,041) (1,754)
Gain on sale of investments 2,160 2,814 2,160
Reduction in valuation of
investment in affiliate (6,180) (6,180)
Net change in value of certain
derivative instruments (1,348) 6,050 (3,493) 5,928
Debt issue cost amortization (620) (440) (1,467) (1,253)
Interest and other, net (2,297) (2,277) (4,719) (4,792)
Income (loss) before income
taxes and cumulative
effect adjustment (5,036) 722 (10,711) (7,658)
Income tax benefit (provision) 1,739 (755) 3,749 1,915
Loss before cumulative
effect adjustment (3,297) (33) (6,962) (5,743)
Cumulative effect of accounting
change, net of tax (1,120)
Net loss (3,297) (33) (6,962) (6,863)
Preferred dividends (85) (153)
Net loss available to common
stockholders $(3,382) $(33) $(7,115) $(6,863)
Loss per share available to
common stockholders -
Basic and Diluted:
Loss before cumulative effect
of accounting change $(0.09) $(0.00) $(0.20) $(0.17)
Cumulative effect of
accounting change (0.03)
Net loss available to common
stockholders $(0.09) $(0.00) $(0.20) $(0.20)
Weighted average shares
outstanding:
Basic 36,136 35,085 36,069 35,085
Diluted 36,136 35,085 36,069 35,085
SOURCE Bull Run Corporation
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Related links:
http://www.bullruncorp.com
Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/232438.html
CONTACT:
Robert S. Prather, Jr., President & Chief
Executive Officer of Bull Run Corporation, +1-404-266-8333, or W.
James Host, Chief Executive Officer of Host Communications, Inc.,
+1-859-226-4202, for Bull Run Corporation
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