ATLANTA, May 16 /PRNewswire-FirstCall/ --
Bull Run Corporation (Nasdaq: BULL) today announced that total revenue
from continuing operations for its third quarter ended March 31, 2002, was
$34,035,000 compared to $35,645,000 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 nine months ended March 31, 2002, was $91,221,000 compared
to $95,533,000 for the same period last fiscal year.
Bull Run reported several non-cash items that impact its net results. The
Company adopted a new accounting standard effective July 1, 2001, that
eliminates the requirement to amortize goodwill and certain other intangible
assets. Therefore amortization of acquisition intangibles, including
goodwill, decreased to $311,000 for the three months and $932,000 for the nine
months ended March 31, 2002, from $1,127,000 and $3,285,000 for the same
respective periods in 2001. 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 $224,000 for the three
months and $1,265,000 for the nine months ended March 31, 2002, compared to
$924,000 and $2,678,000 for the same respective periods in 2001. As a result
of its investment in Gray, Bull Run reported non-cash charges for its
proportionate share of an extraordinary loss and the cumulative effect of a
change in accounting reported by Gray in the three months ended March 31,
2002. The resulting extraordinary loss and the cumulative effect adjustment
reported by Bull Run, each of which is net of an associated deferred tax
benefit, were $627,000 and $2,620,000, respectively. Debt issue cost
amortization negatively impacted the pretax results by $691,000 for the three
months and $2,158,000 for the nine months ended March 31, 2002, compared to
$557,000 and $1,810,000 for the same respective periods in 2001. In the prior
year, the Company reduced the value of an investment asset resulting in a non-
cash pretax charge of $1,837,000 in the three months and $8,017,000 in the
nine months ended March 31, 2001.
The non-cash appreciation (depreciation) in the value of derivative
instruments for the three months and nine months ended March 31, 2002, was
$(445,000) and $(3,938,000), respectively, compared to $(1,359,000) and
$4,569,000 for the same respective periods in 2001. 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 nine months ended March 31,
2001, 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
nine months ended March 31, 2002, and $2,160,000 for the nine months ended
March 31, 2001. Primarily as a result of the non-cash items discussed above
representing approximately $1.7 million in pretax loss for the three months
and $5.5 million in pretax loss for the nine months ended March 31, 2002, and
the Company's proportionate share of Gray's extraordinary loss and cumulative
effect of accounting change adjustment totaling $3.2 million, the Company
reported a net loss of $6,723,000 for the three months and $13,685,000 for the
nine months ended March 31, 2002, compared to a net loss of $5,726,000 for the
three months and $12,589,000 for the nine months ended March 31, 2001. The
non-cash items discussed above had approximately a $5.8 million and $11.2
million impact on pretax loss before the effect of the change in accounting
method for the three months and nine months ended March 31, 2001,
respectively.
Robert S. Prather, Jr., Bull Run's President and CEO, commented, "Our
third quarter operating results continued to reflect the significant downturn
in corporate advertising and sponsorship spending experienced during our peak
selling season. We are pleased to see that our SG&A expense has declined by
nearly $4 million year-to-date compared to the prior year, so we are realizing
some benefits from our cost reduction initiatives. We continue to have
meaningful discussions with current and prospective corporate sponsors and
advertisers in connection with our new 11-year contract with CBS Sports that
will commence in September extending our 26-year relationship representing the
NCAA and NCAA Championships."
Effective March 29, 2002, the Company and its bank lenders amended the
Company's credit agreement to, among other things, extend the maturity date of
the facility to June 28, 2002. Prior to the new maturity date, the Company
and the bank lenders intend to negotiate a long-term extension or 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 a long-term
extension or 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 nine months ended March 31, 2002, 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 substantially all amounts currently
outstanding under the present bank credit facility.
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."
Bull Run, through Host Communications, provides affinity, multimedia,
promotional and event management services to universities, athletic
conferences, corporations and associations, including the National Collegiate
Athletic Association. 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 guaranties of future performance and actual results
may differ materially from those forecasted.
Contacts: Robert S. Prather, Jr., Bull Run's President & Chief Executive
Officer, at (404) 266-8333, or W. James Host, Chief Executive Officer of Host
Communications, Inc., at (859) 226-4202.
Summarized financial results for the three months and nine months ended
March 31, 2002 and 2001 follow:
BULL RUN CORPORATION
Comparative Results of Operations (Unaudited)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
2002 2001 2002 2001
Revenue from services rendered $34,035 $35,645 $91,221 $95,533
Operating costs and expenses:
Direct operating costs for
services rendered 27,852 25,158 70,230 66,770
Selling, general and
administrative 7,412 10,496 24,404 28,381
Amortization of acquisition
intangiibles 311 1,127 932 3,285
35,575 36,781 95,566 98,436
Loss from operations (1,540) (1,136) (4,345) (2,903)
Equity in earnings (losses) of
affiliated companies (224) (924) (1,265) (2,678)
Gain on sale of investments 2,814 2,160
Reduction in valuation of
investment in affiliate (1,837) (8,017)
Net change in value of certain
derivative instruments (445) (1,359) (3,938) 4,569
Debt issue cost amortization (691) (557) (2,158) (1,810)
Interest and other, net (2,173) (2,398) (6,892) (7,190)
Loss before income taxes and
cumulative effect
adjustment (5,073) (8,211) (15,784) (15,869)
Income tax benefit 1,597 2,485 5,346 4,400
Loss before cumulative effect
adjustment (3,476) (5,726) (10,438) (11,469)
Proportionate share of affiliate's
extraordinary loss (627) (627)
Cumulative effect of affiliate's
accounting change, net of tax (2,620) (2,620)
Cumulative effect of accounting
change, net of tax (1,120)
Net loss (6,723) (5,726) (13,685) (12,589)
Preferred dividends (121) (274)
Net loss available to common
stockholders $(6,844) $(5,726) $(13,959) $(12,589)
Loss per share available to common
stockholders -
Basic and Diluted:
Loss before cumulative effect of
accounting change $(0.10) $(0.16) $(0.30) $(0.33)
Extraordinary loss (0.02) (0.02)
Cumulative effect of accounting
change (0.07) (0.07) (0.03)
Net loss available to common
stockholders $(0.19) $(0.16) $(0.39) $(0.36)
Weighted average shares
outstanding:
Basic 36,514 35,213 36,217 35,128
Diluted 36,514 35,213 36,217 35,128
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
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