Equity Media Loses $40.7 Million in 2007

Equity Media Holdings Corp. of Little Rock reported a loss of $40.7 million or $1.12 a share for 2007, compared with a loss of $3.2 million or 13 a share in 2006. 

Broadcast revenue fell 7 percent last year to $28.3 million. In 2006, the company posted revenue of $30.4 million.

In its annual report filed with the Securities & Exchange Commission, the company said that as of Dec. 31 it had built or bought 120 full and low power TV licenses and applications that it owns or has contracts to acquire. The company's FCC license asset portfolio includes 23 full power stations, 38 Class A stations and 59 low power stations, including two metropolitan New York City low power stations the company is currently under contract to buy. The company's English and Spanish-language stations are in 41 markets that represent more than 32 percent of the U.S. population.

In the filing, management said the biggest factor in the loss of revenue last year was the sale of a television station in Portland, Ore., which accounts for $2 million of the variance.

Selling, general and administrative expenses were up 24 percent to $32.5 million from $26.2 million in 2006 and the company paid $8 million in connection with the merger that created Equity Media.

In its filing, the company said it has a history of losses and "there can be no assurance that the Company will become or remain profitable or that losses will not continue to occur.

"The Company's existing capital resources are not sufficient to fund operations. If the Company is unable to obtain adequate additional sources of capital in the near term it will need to cease all or a portion of its operations, seek protection under U.S. bankruptcy laws and regulations, engage in a restructuring or undertake a combination of these and other actions," the filing said.

On March 20, Equity Media entered into an amendment to its credit agreement with Silver Point Finance LLC and Wells Fargo Foothill Inc., both of which agreed to "forbear from exercising certain of their rights and remedies with respect to designated default under the credit agreement through the earlier of (a) April 18, 2008 and (b) the date of occurrence of certain events or by which certain events have failed to occur, including the Company's failure to enter into agreements with respect to the sale of certain of its assets and the Company's failure to secure approvals for, and meet other criteria with respect to, financing alternatives necessary to meet the Company's immediate capital requirements. If the Company is unable to meet all criteria under the forbearance agreement, the lender group will have all remedies available to them under the Credit Agreement, including demanding immediate payment of the obligation."

The company reported assets of $25.3 million and current liabilities of $84 million along with long-term liabilities of $13.7 million.