-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TXcTRy8xGR4V9tAfBWLxFDOuwuy8pbVZxTdD9C4kN7e2jHngn/jsUSdRhLAbH9eY 8PUT7XHcLJb9F81srMlyig== 0000898430-97-002463.txt : 19970610 0000898430-97-002463.hdr.sgml : 19970610 ACCESSION NUMBER: 0000898430-97-002463 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970606 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FISHER COMPANIES INC CENTRAL INDEX KEY: 0001034669 STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [2040] FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-22439 FILM NUMBER: 97620430 BUSINESS ADDRESS: STREET 1: 1525 ONE UNION SQU STREET 2: 600 UNIVERSITY ST CITY: SEATTLE STATE: WA ZIP: 98101-3185 BUSINESS PHONE: 2066242752 MAIL ADDRESS: STREET 1: 1525 ONE UNION SQU STREET 2: 600 UNIVERSITY ST CITY: SEATTLE STATE: WA ZIP: 98101-3185 10-Q 1 FORM 10-Q FOR PERIOD ENDED MARCH 31, 1997 U.S. SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1997 [ ] Transition Report Under Section 13 or 15(d) of the Exchange Act For the transition period from _______________ to _____________ Commission File Number 0-22439 FISHER COMPANIES INC. (Exact Name of Registrant as Specified in Its Charter) WASHINGTON 91-0222175 ------------------------------ --------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization Identification Number 1525 ONE UNION SQUARE 600 UNIVERSITY STREET SEATTLE, WASHINGTON 98101-3185 (Address of Principal Executive Offices) (Zip Code) (206) 624-2752 (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No X ------ ------ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Common Stock, $2.50 par value, outstanding as of March 31, 1997: 4,267,516 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following Consolidated Financial Statements are presented for the Registrant, Fisher Companies Inc. and wholly owned subsidiaries. 1. Consolidated Statement of income: Three months ended March 31, 1997 and 1996. 2. Consolidated Balance sheet: March 31, 1997 and December 31, 1996. 3. Consolidated Statement of Cash Flows: Three months ended March 31, 1997 and 1996. 4. Notes to Consolidated Financial Statements. 2 ITEM 1 - FINANCIAL STATEMENTS FISHER COMPANIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31 1997 1996 - --------------------------- ---------- --------- (In thousands except share and per share amounts) (Unaudited) Sales and other revenue: Broadcasting $ 25,217 $ 22,295 Milling 31,585 31,249 Real estate 2,812 2,917 Corporate and other, primarily dividends and interest income 896 1,057 ---------- --------- 60,510 57,518 ---------- --------- Costs and expenses: Cost of products and services sold 40,076 39,450 Selling expenses 4,331 3,856 General, administrative and other expenses 8,943 8,074 ---------- --------- 53,350 51,380 ---------- --------- Income from operations 7,160 6,138 Interest expense 1,382 1,337 ---------- --------- Income before provision for income taxes 5,778 4,801 Provision for federal and state income taxes 1,897 1,557 ---------- --------- Net income $ 3,881 $ 3,244 ---------- --------- Net income per common share $.91 $.76 ---------- --------- Weighted average common shares and equivalents outstanding 4,283,609 4,265,172 ---------- --------- Dividends declared per share $1.72 ---------
See accompanying notes to consolidated financial statements. 3 FISHER COMPANIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
MARCH 31 DECEMBER 31 1997 1996 ---------- --------- ASSETS (In thousands except share amounts) (Current year unaudited) Current Assets: Cash and short-term cash investments $ 3,936 $ 5,116 Receivables 38,747 44,759 Inventories 16,661 13,199 Prepaid expenses 6,769 7,859 Television and radio broadcast rights 3,299 5,383 -------- -------- Total current assets 69,412 76,316 -------- -------- Marketable Securities, at market value 123,051 121,545 -------- -------- Other Assets: Cash value of life insurance and retirement deposits 9,400 9,362 Television and radio broadcast rights 235 317 Intangible assets, net of amortization 50,511 47,982 Other 4,401 4,033 -------- -------- 64,547 61,694 -------- -------- Property, Plant and Equipment, net 138,896 134,594 -------- -------- $395,906 $394,149 -------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable $ 17,268 $ 9,258 Trade accounts payable 6,331 8,674 Accrued payroll and related benefits 3,384 4,536 Television and radio broadcast rights payable 3,400 5,036 Income taxes payable 1,984 1,147 Other current liabilities 3,463 5,244 -------- -------- Total current liabilities 35,830 33,895 -------- -------- Long-term Debt, net of current maturities 62,517 65,713 -------- -------- Other Liabilities: Accrued retirement benefits 11,763 11,924 Deferred income taxes 49,896 49,483 Television and radio broadcast rights payable, long-term portion 119 296 Deposits and retainage payable 700 676 -------- -------- 62,478 62,379 -------- -------- Minority Interests 33 33 -------- -------- Stockholders' Equity: Common stock, shares authorized 12,000,000, $2.50 par value; issued 4,267,516 in 1997 and 4,265,172 in 1996 10,669 10,663 Capital in excess of par 216 48 Unrealized gain on marketable securities, net of deferred income taxes of $42,691 in 1997 and $42,164 in 1996 79,283 78,304 Retained earnings 144,880 143,114 -------- -------- 235,048 232,129 -------- -------- $395,906 $394,149 -------- --------
See accompanying notes to consolidated financial statements. 4 FISHER COMPANIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31 1997 1996 ------- -------- (In thousands) (Unaudited) Cash flows from operating activities: Net income $ 3,881 $ 3,244 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,959 2,501 Noncurrent deferred income taxes (114) (57) Issuance of stock pursuant to vested stock rights and related tax benefit 146 Change in operating assets and liabilities: Receivables 6,012 5,434 Inventories (3,462) (2,482) Prepaid expenses 1,090 (2,064) Cash value of life insurance and retirement deposits (38) 9 Income taxes payable 837 (377) Trade accounts payable, accrued payroll and related benefits and other current liabilities (5,276) (330) Other assets (368) (500) Accrued retirement benefits (161) (29) Deposits and retainage payable 24 22 Amortization of television and radio broadcast rights 2,247 2,217 Payments for television and radio broadcast rights (1,894) (1,710) Other, net 8 10 ------- -------- Net cash provided by operating activities 5,891 5,888 ------- -------- Cash flows from investing activities: Purchase assets of radio stations (3,949) Purchase of property, plant and equipment (5,849) (2,472) ------- -------- Net cash used in investing activities (9,798) (2,472) ------- -------- Cash flows from financing activities: Net borrowings under notes payable 5,085 1,157 Borrowings under borrowing agreements and mortgage loans 27,000 Payments on borrowing agreements and mortgage loans (271) (27,152) Proceeds received from exercise of stock options 28 Cash dividends paid (2,115) (1,859) ------- -------- Net cash provided by (used in) financing activities 2,727 (854) ------- -------- Net change in cash and short-term cash investments (1,180) 2,562 Cash and short-term cash investments, beginning of period 5,116 19,489 ------- -------- Cash and short-term cash investments, end of period $ 3,936 $ 22,051 ------- --------
See accompanying notes to consolidated financial statements. 5 FISHER COMPANIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The unaudited financial information furnished herein, in the opinion of management, reflects all adjustments which are necessary to state fairly the consolidated financial position, results of operations, and cash flows of Fisher Companies Inc. (the "Company") as of and for the periods indicated. The Company presumes that users of the interim financial information herein have read or have access to the Company's audited consolidated financial statements and that the adequacy of additional disclosure needed for a fair presentation, except in regard to material contingencies or recent subsequent events, may be determined in that context. Accordingly, footnote and other disclosures which would substantially duplicate the disclosures contained in Form 10 for the year ended December 31, 1996 filed on April 25, 1997 by the Company have been omitted. The financial information herein is not necessarily representative of a full year's operations. 2. In February 1997, Statement of Financial Accounting Standards No. 128, Earnings per Share (SFAS 128), was issued. This pronouncement modifies the calculation and disclosure of earnings per share (EPS) and will be adopted by the Company in its financial statements for the year ended December 31, 1997. Early adoption is not permitted. After the adoption date, EPS data for all periods presented, including quarterly financial data, is required to be restated to conform to the provisions of SFAS 128. 3. Inventories are summarized as follows (in thousands):
March 31 December 31 1997 1996 ------- ------- Finished products $ 5,625 $ 4,758 Raw materials 10,880 8,255 Spare parts and supplies 156 186 ------- ------- $16,661 $13,199 ======= =======
4. Dividends declared in March 1996 were payable quarterly at the rate of $.43 per share. In December 1996 an annual dividend in the amount of $1.96 per share was declared, payable quarterly during 1997 at the rate of $.49 per share. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CONSOLIDATED RESULTS OF OPERATIONS Sales and other revenue for the three months ended March 31, 1997 increased by $2,992,000 or 5.2% to $60,510,000 from $57,518,000 for the three months ended March 31, 1996. Broadcasting and milling operations had increases in sales and other revenue of 13.1% and 1.1%, respectively, while real estate operations had a decrease in sales and other revenue of 3.6%. Cost of products and services sold for the three months ended March 31, 1997 increased by $626,000 or 1.6% to $40,076,000 from $39,450,000 for the three months ended March 31, 1996. The increase resulted primarily from increased costs to acquire and produce broadcasting programming. As a percentage of sales and other revenue, cost of products and services sold was 66.2% and 68.6% for the three months ended March 31, 1997 and 1996, respectively. The decrease in costs and services sold as a percentage of sales and other revenue was due primarily to improved margins from milling operations. Selling expenses for the three months ended March 31, 1997 increased by $475,000 or 12.3% to $4,331,000 from $3,856,000 for the three months ended March 31, 1996. The increase is the result of increased sales by broadcasting and milling operations and additional selling expenses incurred at recently acquired radio stations. As a percentage of sales and other revenue, selling expenses were 7.2% and 6.7% for the three months ended March 31, 1997 and 1996, respectively. General and administrative expenses for the three months ended March 31, 1997 increased by $869,000 or 10.8% to $8,943,000 from $8,074,000 for the three months ended March 31, 1996. The increase relates primarily to general and administrative expenses at recently acquired radio stations. As a percentage of sales and other revenue, general and administrative expenses were 14.8% and 14.0% for the three months ended March 31, 1997 and 1996, respectively. Interest expense for the three months ended March 31, 1997 increased by $45,000 or 3.4% to $1,382,000 from $1,337,000 for the three months ended March 31, 1996. The increase in interest expense is due to higher average long-term debt balances outstanding during the three months ended March 31, 1997 compared to the three months ended March 31, 1996. The average interest rate during the three months ended March 31, 1997 and 1996 was 7.0% and 7.2% respectively, which partially offset the effect of the increase in average long-term debt outstanding on interest expense. Provision for federal and state income taxes for the three months ended March 31, 1997 increased by $340,000 or 21.8% to $1,897,000 from $1,557,000 for the three months ended March 31, 1996. For the three months ended March 31, 1997 and 1996, the Company's effective tax rate was 32.8% and 32.4%, respectively. 7 BROADCASTING OPERATIONS Broadcasting revenue for the three months ended March 31, 1997 increased by $2,922,000 or 13.1 % to $25,217,000 from $22,295,000 for the three months ended March 31, 1996. The increase in broadcasting revenue is, in part, due to the revenue earned at KWJJ-AM/FM and six radio stations in eastern Washington and Montana which were acquired between May 1996 and January 1997. These stations contributed net revenue of approximately $1,764,000 during the three months ended March 31, 1997. Revenue from the Company's Seattle radio stations (KOMO- AM, KVI-AM and KPLZ-FM) increased $1,014,000 or 26.6% over the three months ended March 31, 1996 due to a strong local advertising market during the three months ended March 31, 1997. Additionally, television revenue increased 1.9% due to strong local advertising sales partially offset by slightly declining national advertising sales. Operating income for the three months ended March 31, 1997 increased by $1,276,000 or 32.0% to $5,260,000 from $3,984,000 for the three months ended March 31, 1996. As a percentage of broadcasting revenue, operating income was 20.9% and 17.9% for the three months ended March 31, 1997 and 1996, respectively. The increase in operating income exceeded the growth in broadcasting revenue primarily due to a strong market for local advertising time, which increased broadcasting revenue without significant sales and administrative expenditures. MILLING OPERATIONS Revenue from the milling subsidiary for the three months ended March 31, 1997 increased by $336,000 or 1.1 % to $31,585,000 from $31,249,000 for the three months ended March 31, 1996. The increase in milling revenue was the net result of increased revenues in the milling division partially offset by decreased revenues in the food distribution division. Milling division revenue increased $661,000 or 3.1%, which was primarily driven by a 9.6% increase in flour sales volume partially offset by declining prices. Revenue from food distribution decreased $1,403,000 or 10.3% as sales volume decreased 5.6% and prices decreased as the product mix changed. Operating income for the three months ended March 31, 1997 increased by $216,000 or 35.5% to $824,000 from $608,000 for the three months ended March 31, 1996. As a percentage of milling revenue, operating income was 2.6% and 1.9% for the three months ended March 31, 1997 and 1996, respectively. The increase in operating income as a percentage of milling revenue was due to improved gross margin percentages, particularly in the food distribution division. Gross margin for the food distribution division increased to 17.3% for the three months ended March 31, 1997 from 14.4% for the three months ended March 31, 1996, as a result of an emphasis on sales of higher margin products. REAL ESTATE OPERATIONS Real estate revenue for the three months ended March 31, 1997 decreased by $105,000 or 3.6% to $2,812,000 from $2,917,000 for the three months ended March 31, 1996. The decrease in real estate revenue is primarily due to the absence of $128,000 in lease cancellation fees which were included in revenue during the three months ended March 31, 1996. The decrease in lease cancellation fees was partially offset by an increase in real estate revenues due to higher 8 occupancy rates. Average occupancy levels for the three months ended March 31, 1997 and 1996 were 95.7% and 94.9%, respectively. Operating income for the three months ended March 31, 1997 decreased by $215,000 or 20.7% to $822,000 from $1,037,000 for the three months ended March 31, 1996. As a percentage of revenue, operating income was 29.2% and 35.6% for the three months ended March 31, 1997 and 1996, respectively. The decrease in operating income as a percentage of real estate revenue was due to higher personnel costs and lower lease cancellation fees. These factors resulted in decreased revenue and slightly higher operating expenses. LIQUIDITY AND CAPITAL RESOURCES As of March 31, 1997, the Company had working capital of $33,582,000 and cash and short-term cash investments totaling $3,936,000. The Company intends to finance working capital, debt service, capital expenditures and dividend requirements primarily through operating activities. However, the Company will consider using available lines of credit to fund acquisition activities and significant real estate project development activities. Net cash provided by operating activities was $5,891,000 for the three months ended March 31, 1997. Net cash provided by operating activities consists of the Company's net income, increased by non-cash expenses such as depreciation and amortization, and adjusted by changes in components of working capital. Net cash used in investing activities was $9,798,000 for the three months ended March 31, 1997. The principle uses of cash in investing activities were $3,949,000 for acquisition of the assets of two radio stations in Montana and $5,849,000 to purchase property, plant and equipment used in operations. Net cash provided by financing activities was $2,727,000 for the three months ended March 31, 1997. Cash provided for financing activities was obtained through net borrowings of $5,085,000 under lines of credit and notes from shareholders and directors. Proceeds from these net borrowings were used to finance acquisition of assets of two Montana radio stations and purchase of property, plant and equipment to the extent such purchases exceeded net cash provided by operating activities. In addition, during the three months ended March 31, 1997 the Company repaid $271,000 due on mortgage loans and received proceeds of $28,000 from the exercise of stock options. Cash paid for dividends to stockholders totaled $2,115,000 or $.49 per common share. 9 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit 11, Statement re Computation of Per Share Earnings Exhibit 27, Financial Data Schedule (b) Reports on Form 8-K: None 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FISHER COMPANIES INC. (Registrant) Dated June 5, 1997 /s/ William W. Krippaehne, Jr. - ---------------------- -------------------------------------- William W. Krippaehne, Jr. President and Chief Executive Officer Dated June 5, 1997 /s/ David D. Hillard - ---------------------- -------------------------------------- David D. Hillard Senior Vice President and Chief Financial Officer 11 EX-11 2 COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 FISHER COMPANIES INC. COMPUTATION OF PER SHARE EARNINGS
Three Months Ended March 31 1997 1996 ---- ---- Weighted average common shares and equivalents outstanding during the period: Common shares 4,265,172 4,265,172 Stock options 7,057 Restricted stock rights 11,380 ---------- ---------- Total 4,283,609 4,265,172 ========== ========== Net income $3,881,000 $3,244,000 ========== ========== Net income per common share $.91 $ .76 ========== ==========
12 EX-27 3 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 3,936 123,051 38,747 1,449 16,661 69,412 138,896 93,969 395,906 35,830 62,517 0 0 10,669 224,379 235,048 59,441 60,510 40,076 40,076 0 286 1,382 5,778 1,897 3,881 0 0 0 3,881 .91 0
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