Non-Cash Intangibles Impairment and Deferred Tax Charges Contribute to Net
Loss
ATLANTA, Dec. 1 /PRNewswire-FirstCall/ -- Bull Run Corporation
(Nasdaq: BULL) today announced that a non-cash intangibles impairment charge
and deferred tax charge taken in its fiscal year ended August 31, 2003
contributed to a $38.0 million net loss for the year. The impairment charge
of $30.5 million was taken by Bull Run in order to reduce goodwill and other
acquisition intangible assets on the Company's balance sheet to their
estimated value. The deferred tax charge of $5.2 million was taken in order
to fully reserve the net carrying amount of deferred tax assets on the
Company's balance sheet. Bull Run, through its wholly-owned operating
company, Host Communications, Inc., provides affinity, multimedia, promotional
and event management services to universities, athletic conferences,
corporations and associations.
Bull Run reported an operating loss of $28.9 million for the fiscal year
ended August 31, 2003 due to the non-cash intangibles impairment charge.
These results also included nonrecurring consulting income of $5.7 million.
The operating loss for the fiscal year ended June 30, 2002 of $16.1 million
included an intangibles impairment charge of $6.6 million in that period. In
2002, Bull Run changed its fiscal year from June 30 to August 31. The income
tax benefit, net loss and per share amounts for the fiscal year ended June 30,
2002 were restated to adjust for errors in the accounting for deferred taxes.
The restatement had no effect on cash or cash flows.
During the fiscal year ended August 31, 2003, Bull Run sold all of its
significant equity investment assets, generating proceeds of over $46 million,
of which, $38 million was used to reduce the Company's long-term debt. The
net gain on the sale of these assets, less investment valuation allowances and
income taxes, was $5.5 million.
Excluding the intangibles impairment charges, the results from the
operations of Host Communications improved by approximately $4.7 million for
the fiscal year ended August 31, 2003, as compared to the fiscal year ended
June 30, 2002. The improvement in Host's operating results was achieved
through the restructuring and elimination of certain contractual obligations
and relationships, as well as other cost reduction initiatives taken during
the prior fiscal year.
Total revenue was $83.8 million for the fiscal year ended August 31, 2003,
compared to $113.1 million for the fiscal year ended June 30, 2002. Total
revenue declined in the most recent fiscal year primarily as a result of the
restructure and elimination of certain contracts, which produced unfavorable
operating results in the prior fiscal year.
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.
Summarized financial results for the three months and fiscal year ended
August 31, 2003, and three months and fiscal year ended June 30, 2002 follow:
BULL RUN CORPORATION
Comparative Results of Operations
(in thousands, except per share amounts)
August 31, 2003 June 30, 2002
Three Fiscal Three Fiscal
Months Year Months Year
Ended Ended Ended Ended
(restated)(restated)
Revenue from services
rendered $16,955 $83,844 $21,851 $113,072
Operating costs and
expenses:
Direct operating costs
for services rendered 12,351 55,069 18,301 88,531
Selling, general and
administrative 6,429 25,878 8,369 32,773
Amortization and
impairment of
acquisition
intangibles 30,844 31,756 6,892 7,824
49,624 112,703 33,562 129,128
Loss from operations (32,669) (28,859) (11,711) (16,056)
Equity in earnings
(losses) of affiliates (51) (204) (697) (2,912)
Net change in value of
certain derivatives 673 (1,035) 593 (3,345)
Loss on issuance of shares
by affiliate (2,339)
Gain (loss) on investment
dispositions and investment
valuation adjustments 14,588 11,961 (2,572) 242
Debt issue cost
amortization (628) (2,367) (672) (2,830)
Interest and other, net (2,037) (8,226) (2,320) (9,212)
Loss from continuing
operations before
income taxes and
cumulative effect (20,124) (31,069) (17,379) (34,113)
Income tax benefit
(provision) (5,222) (5,222) (3,494) 2,175
Loss from continuing
operations before
cumulative effect, net
of tax (25,346) (36,291) (20,873) (31,938)
Cumulative effect of
accounting change (2,620)
Loss from continuing
operations (25,346) (36,291) (20,873) (34,558)
Loss on disposal of
discontinued operations (1,695) (1,695)
Net loss (27,041) (37,986) (20,873) (34,558)
Preferred dividends (321) (1,149) (122) (396)
Net loss available to
common stockholders $(27,362) $(39,135) $(20,995) $(34,954)
Loss per share available
to common stockholders,
basic and diluted:
Loss before cumulative
effect adjustment $(6.22) $(9.39) $(5.63) $(8.86)
Cumulative effect of
accounting change (0.72)
Loss from discontinued
operations (0.41) (0.43)
Net loss available to
common stockholders $(6.63) $(9.82) $(5.63) $(9.58)
Weighted average number of
shares outstanding, basic
and diluted 4,129 3,987 3,729 3,649
SOURCE Bull Run Corporation
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Related links:
http://www.bullruncorp.com
Company News On-Call:
http://www.prnewswire.com/comp/232438.html
CONTACT:
Robert S. Prather, Jr., President & Chief
Executive Officer, +1-404-266-8333, or Frederick J. Erickson,
VP-Finance & Chief Financial Officer, +1-704-602-3107, both of
Bull Run Corporation; or, Gordon D. Whitener, Chief Executive
Officer of Host Communications, Inc., +1-859-226-4356
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