-----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, Etw85Fhc7wkdmiulMiAlbJzv9AFNAnjFO/7Xmh6OwWM7o1UJQOyUMm1WM8q5ays0 UdRmXp/lj1twS+n9J5rkXw== 0001032210-97-000235.txt : 19971115 0001032210-97-000235.hdr.sgml : 19971115 ACCESSION NUMBER: 0001032210-97-000235 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FISHER COMPANIES INC CENTRAL INDEX KEY: 0001034669 STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [2040] IRS NUMBER: 910222175 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-22439 FILM NUMBER: 97717246 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 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 September 30, 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 X No --- --- 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 September 30, 1997: 4,267,716 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: Nine months ended September 30, 1997 and 1996. 2. Consolidated Balance sheet: September 30, 1997 and December 31, 1996. 3. Consolidated Statement of Cash Flows: Nine months ended September 30, 1997 and 1996. 4. Notes to Consolidated Financial Statements. 1 ITEM 1 - FINANCIAL STATEMENTS FISHER COMPANIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED THREE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 1997 1996 1997 1996 ---------- ---------- ---------- ---------- (In thousands except share and per share amounts) (Unaudited) Sales and other revenue: Broadcasting $ 85,017 $ 77,839 $ 28,964 $ 26,953 Milling 95,375 100,891 31,031 35,713 Real estate 8,530 10,741 2,813 2,748 Corporate and other, primarily dividends and interest income 2,773 3,076 980 946 ---------- ---------- ---------- ---------- 191,695 192,547 63,788 66,360 Costs and expenses: Cost of products and services sold 122,483 125,104 41,156 43,576 Selling expenses 13,537 12,283 4,525 4,328 General, administrative and other expenses 26,759 24,081 8,565 8,373 ---------- ---------- ---------- ---------- 162,779 161,468 54,246 56,277 ---------- ---------- ---------- ---------- Income from operations 28,916 31,079 9,542 10,083 Interest expense 4,147 4,254 1,357 1,542 ---------- ---------- ---------- ---------- Income before provision for income taxes 24,769 26,825 8,185 8,541 Provision for federal and state income taxes 8,454 9,214 2,786 2,944 ---------- ---------- ---------- ---------- Net income $ 16,315 $ 17,611 $ 5,399 $ 5,597 ---------- ---------- ---------- ---------- Net income per common share $3.80 $4.13 $1.25 $1.31 ---------- ---------- ---------- ---------- Weighted average common shares and equivalents outstanding 4,288,677 4,265,172 4,292,886 4,265,172 ---------- ---------- ---------- ---------- Dividends declared per share $1.72
See accompanying notes to consolidated financial statements. 2 FISHER COMPANIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
SEPTEMBER 30 DECEMBER 31 1997 1996 ------------ ----------- ASSETS (In thousands except share amounts) (Current year unaudited) Current Assets: Cash and short-term cash investments $ 4,905 $ 5,116 Receivables 40,938 44,759 Inventories 14,410 13,199 Prepaid expenses 5,465 7,859 Television and radio broadcast rights 9,935 5,383 -------- -------- Total current assets 75,653 76,316 -------- -------- Marketable Securities, at market value 163,068 121,545 -------- -------- Other Assets: Cash value of life insurance and retirement deposits 9,536 9,362 Television and radio broadcast rights 201 317 Intangible assets, net of amortization 49,859 47,982 Other 3,976 4,033 -------- -------- 63,572 61,694 -------- -------- Property, Plant and Equipment, net 141,075 134,594 -------- -------- $443,368 $394,149 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable $ 15,346 $ 9,258 Trade accounts payable 5,160 8,674 Accrued payroll and related benefits 4,531 4,536 Television and radio broadcast rights payable 9,194 5,036 Income taxes payable 1,147 Other current liabilities 3,240 5,244 -------- -------- Total current liabilities 37,471 33,895 -------- -------- Long-term Debt, net of current maturities 59,914 65,713 -------- -------- Other Liabilities: Accrued retirement benefits 11,622 11,924 Deferred income taxes 64,217 49,483 Television and radio broadcast rights payable, long-term portion 37 296 Deposits and retainage payable 751 676 -------- -------- 76,627 62,379 -------- -------- Minority Interests 33 33 -------- -------- Stockholders' Equity: Common stock, shares authorized 12,000,000, $2.50 par value; issued 4,267,716 in 1997 and 4,265,172 in 1996 10,669 10,663 Capital in excess of par 277 48 Unrealized gain on marketable securities, net of deferred income taxes of $56,697 in 1997 and $42,164 in 1996 105,294 78,304 Retained earnings 153,083 143,114 -------- -------- 269,323 232,129 -------- -------- $443,368 $394,149 ======== ========
See accompanying notes to consolidated financial statements. 3 FISHER COMPANIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30 1997 1996 - ------------------------------ -------- -------- (In thousands) (Unaudited) Cash flows from operating activities: Net income $ 16,315 $ 17,611 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 9,034 7,921 Noncurrent deferred income taxes 201 636 Issuance of stock pursuant to vested stock rights and related tax benefit 191 Gain on sale of real estate (2,300) Change in operating assets and liabilities: Receivables 3,821 3,143 Inventories (1,211) (6,416) Prepaid expenses 2,394 2,273 Cash value of life insurance and retirement deposits (174) 54 Other assets 57 (500) Trade accounts payable, accrued payroll and related benefits and other current liabilities (5,523) 82 Income taxes payable (1,147) 1,352 Accrued retirement benefits (302) (77) Deposits and retainage payable 75 (99) Amortization of television and radio broadcast rights 6,342 6,024 Payments for television and radio broadcast rights (6,879) (6,449) -------- -------- Net cash provided by operating activities 23,194 23,255 ======== ======== Cash flows from investing activities: Proceeds from sale of real estate 2,860 Purchase assets of radio stations (3,949) (36,684) Purchase of property, plant and equipment (13,443) (6,442) -------- -------- Net cash used in investing activities (17,392) (40,266) ======== ======== Cash flows from financing activities: Net borrowings under notes payable 6,118 (3,349) Borrowings under borrowing agreements and mortgage loans 44,000 Payments on borrowing agreements and mortgage loans (5,829) (30,934) Proceeds received from exercise of stock options 44 Cash dividends paid (6,346) (5,573) -------- -------- Net cash (used in) provided by financing activities (6,013) 4,144 ======== ======== Net change in cash and short-term cash investments (211) (12,867) Cash and short-term cash investments, beginning of period 5,116 19,489 -------- -------- Cash and short-term cash investments, end of period $ 4,905 $ 6,622 ======== ======== See accompanying notes to consolidated financial statements.
4 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 June 18, 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. Adoption of SFAS 128 is not expected to have a material impact on the Company's EPS. In July 1997, Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information (SFAS 131), was issued. This pronouncement modifies the required disclosures of segment information on a quarterly and an annual basis. SFAS 131 is required to be adopted by the Company for the year ended December 31, 1998. Early adoption is permitted. The Company is currently reviewing the requirements of SFAS 131 and has not made a decision regarding its impact on the Company's disclosures or its period of adoption. 3. Inventories are summarized as follows (in thousands):
September 30 December 31 1997 1996 ------------ ----------- Finished products $ 3,943 $ 4,758 Raw materials 10,266 8,255 Spare parts and supplies 201 186 ------- ------- $14,410 $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. 5 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS CONSOLIDATED RESULTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1996 Sales and other revenue for the nine months ended September 30, 1997 decreased by $852,000 or .4% to $191,695,000 from $192,547,000 for the nine months ended September 30, 1996. Broadcasting operations had an increase in sales and other revenue of 9.2% while sales and other revenue for milling and real estate operations decreased 5.5% and 20.6%, respectively. Sales and other revenue for the corporate segment declined as a result of reduced interest income from short-term cash investments which were used to partially fund the June 1996 radio acquisition. Cost of products and services sold for the nine months ended September 30, 1997 decreased by $2,621,000 or 2.1% to $122,483,000 from $125,104,000 for the nine months ended September 30, 1996. The decrease reflects lower costs to produce flour offset by increased costs to acquire and produce broadcasting programming. As a percentage of sales and other revenue, cost of products and services sold was 63.9% and 65.0% for the nine months ended September 30, 1997 and 1996, respectively. The decrease in cost of products and services sold as a percentage of sales and other revenue was due primarily to improved margins at broadcasting and milling operations. Selling expenses for the nine months ended September 30, 1997 increased by $1,254,000 or 10.2% to $13,537,000 from $12,283,000 for the nine months ended September 30, 1996. The increase is the result of increased commissions and related expenses resulting from increased broadcasting revenue, increased volume of flour sold, and additional selling expenses incurred at recently acquired radio stations. As a percentage of sales and other revenue, selling expenses were 7.1% and 6.4% for the nine months ended September 30, 1997 and 1996, respectively. General and administrative expenses for the nine months ended September 30, 1997 increased by $2,678,000 or 11.1% to $26,759,000 from $24,081,000 for the nine months ended September 30, 1996. The increase relates primarily to general and administrative expenses at recently acquired radio stations as well as increased personnel and other administrative expense at each segment. As a percentage of sales and other revenue, general and administrative expenses were 14.0% and 12.5% for the nine months ended September 30, 1997 and 1996, respectively. Interest expense for the nine months ended September 30, 1997 decreased by $107,000 or 2.5% to $4,147,000 from $4,254,000 for the nine months ended September 30, 1996. The decrease in interest expense is due to lower average long-term debt balances outstanding and lower average interest rates during the nine months ended September 30, 1997 compared to the nine months ended September 30, 1996. The average interest rate was 7.0% and 7.1% in 1997 and 1996, respectively. Provision for federal and state income taxes for the nine months ended September 30, 1997 decreased by $760,000 or 8.2% to $8,454,000 from $9,214,000 for the nine months ended 6 September 30, 1996. For the nine months ended September 30, 1997 and 1996, the Company's effective tax rate was 34.1% and 34.3%, respectively. THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1996 Sales and other revenue for the three months ended September 30, 1997 decreased by $2,572,000 or 3.9% to $63,788,000 from $66,360,000 for the three months ended September 30, 1996. Broadcasting and real estate operations had increases in sales and other revenue of 7.5% and 2.4%, respectively while sales and other revenue for milling operations decreased 13.1%. Sales and other revenue for the corporate segment increased as a result of increased dividends from marketable securities, partially offset by reduced interest income from short-term cash investments which were used to partially fund the June 1996 radio acquisition. Cost of products and services sold for the three months ended September 30, 1997 decreased by $2,420,000 or 5.6% to $41,156,000 from $43,576,000 for the three months ended September 30, 1996. The decrease reflects lower costs to produce flour offset by increased costs to acquire and produce broadcasting programming. As a percentage of sales and other revenue, cost of products and services sold was 64.5% and 65.7% for the three months ended September 30, 1997 and 1996, respectively. Selling expenses for the three months ended September 30, 1997 increased by $197,000 or 4.6% to $4,525,000 from $4,328,000 for the three months ended September 30, 1996. The increase is the result of increased commissions and related expenses resulting from increased broadcasting revenue, increased volume of flour sold, and additional selling expenses incurred at recently acquired radio stations. As a percentage of sales and other revenue, selling expenses were 7.1% and 6.5% for the three months ended September 30, 1997 and 1996, respectively. General and administrative expenses for the three months ended September 30, 1997 increased by $192,000 or 2.3% to $8,565,000 from $8,373,000 for the three months ended September 30, 1996. The increase relates primarily to general and administrative expenses at recently acquired radio stations as well as increased personnel and other administrative expense at each segment. As a percentage of sales and other revenue, general and administrative expenses were 13.4% and 12.6% for the three months ended September 30, 1997 and 1996, respectively. Interest expense for the three months ended September 30, 1997 decreased by $185,000 or 12.0% to $1,357,000 from $1,542,000 for the three months ended September 30, 1996. The decrease in interest expense is due to lower average long-term debt balances outstanding and lower average interest rates during the three months ended September 30, 1997 compared to the three months ended September 30, 1996. Provision for federal and state income taxes for the three months ended September 30, 1997 decreased by $158,000 or 5.4% to $2,786,000 from $2,944,000 for the three months ended September 30, 1996. For the three months ended September 30, 1997 and 1996, the Company's effective tax rate was 34.0% and 34.5%, respectively. 7 BROADCASTING OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1996 Broadcasting revenue for the nine months ended September 30, 1997 increased by $7,178,000 or 9.2% to $85,017,000 from $77,839,000 for the nine months ended September 30, 1996. The increase in broadcasting revenue is, in part, due to 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 $3,400,000 during the nine months ended September 30, 1997. Revenue from the Company's Seattle radio stations (KOMO-AM, KVI-AM and KPLZ-FM) increased $2,600,000 over the nine months ended September 30, 1996 due to a strong advertising market during the nine months ended September 30, 1997. Increased local and national revenues at the two television stations were partially offset by lower political advertising revenue, as 1997 is not a major political year. Operating income for the nine months ended September 30, 1997 increased by $1,941,000 or 8.8% to $24,081,000 from $22,140,000 for the nine months ended September 30, 1996. The increase in operating income is the result of increased revenue. As a percentage of broadcasting revenue, operating income was 28.3% and 28.4% for the nine months ended September 30, 1997 and 1996, respectively. THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1996 Broadcasting revenue for the three months ended September 30, 1997 increased by $2,011,000 or 7.5% to $28,964,000 from $26,953,000 for the three months ended September 30, 1996. Revenue from the Company's Seattle radio stations increased approximately $700,000 over the three months ended September 30, 1996 due to a strong advertising market. As noted above, 1997 is not a major political year, and increased local and national revenues at KOMO Television in Seattle were partially offset by lower political advertising revenue, resulting in increased revenue of $1,400,000 for that station over the three months ended September 30, 1996. Operating income for the three months ended September 30, 1997 increased by $454,000 or 5.9% to $8,167,000 from $7,713,000 for the three months ended September 30, 1996. The increase in operating income is the result of increased revenue. As a percentage of broadcasting revenue, operating income was 28.2% and 28.6% for the three months ended September 30, 1997 and 1996, respectively. MILLING OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1996 Revenue from the milling subsidiary for the nine months ended September 30, 1997 decreased by $5,516,000 or 5.5% to $95,375,000 from $100,891,000 for the nine months ended September 30, 1996. Milling division revenue decreased $946,000 or 1.6%, as an increase in flour sales 8 volume was more than offset by declining flour prices. Revenue from food distribution decreased $4,284,000 or 10.9% as sales volume and prices decreased. Operating income for the nine months ended September 30, 1997 decreased by $650,000 or 26.1% to $1,844,000 from $2,494,000 for the nine months ended September 30, 1996. As a percentage of milling division revenue, operating income was 1.9% and 2.5% for the nine months ended September 30, 1997 and 1996, respectively. The gross margin percentage for the milling division was 9.7% and 9.5% for the nine months ended September 30, 1997 and 1996, respectively. The gross margin percentage for the food distribution division was 16.8% and 14.7% for the nine months ended September 30, 1997 and 1996, respectively. Operating income decreased due to lower revenue and increases in depreciation, selling and general and administrative expenses associated with growth of the milling segment. THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1996 Revenue from the milling subsidiary for the three months ended September 30, 1997 decreased by $4,682,000 or 13.1% to $31,031,000 from $35,713,000 for the three months ended September 30, 1996. Milling division revenue decreased $2,599,000 or 11.6%, as an increase in flour sales volume was more than offset by declining flour prices. Revenue from food distribution decreased $1,904,000 or 14.6% as sales volume and prices decreased. Operating income for the three months ended September 30, 1997 decreased by $669,000 or 62.9% to $394,000 from $1,063,000 for the three months ended September 30, 1996. As a percentage of milling division revenue, operating income was 1.3% and 3.0% for the three months ended September 30, 1997 and 1996, respectively. The gross margin percentage for the milling division was 8.6% and 9.5% for the three months ended September 30, 1997 and 1996, respectively. The gross margin percentage for the food distribution division was 17% and 16% for the three months ended September 30, 1997 and 1996, respectively. Operating income decreased due to lower revenue and increases in depreciation, selling and general and administrative expenses associated with growth of the milling segment. REAL ESTATE OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1996 Real estate revenue for the nine months ended September 30, 1997 decreased by $2,211,000 or 20.6% to $8,530,000 from $10,741,000 for the nine months ended September 30, 1996. The decrease in real estate revenue is primarily due to the absence of a gain on sale of real estate amounting to $2,300,000 which occurred in April 1996, partially offset by increased rental and management fee income. Average occupancy levels for the nine months ended September 30, 1997 and 1996 were 93.3% and 95.3%, respectively. The decline in average occupancy is largely attributable to the vacancy on June 30, 1997 of a tenant as a result of bankruptcy. Operating income for the nine months ended September 30, 1997 decreased by $2,666,000 or 53.2% to $2,343,000 from $5,009,000 for the nine months ended September 30, 1996. As a percentage of revenue, operating income was 27.5% and 46.6% for the nine months ended 9 September 30, 1997 and 1996, respectively. The decrease in operating income as a percentage of real estate revenue was due to the 1996 real estate gain referred to above as well as to higher personnel costs and other expenses in 1997. THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1996 Real estate revenue for the three months ended September 30, 1997 increased by $65,000 or 2.4% to $2,813,000 from $2,748,000 for the three months ended September 30, 1996. The increase in real estate revenue is primarily due to increased rental and management fee income. Operating income for the three months ended September 30, 1997 decreased by $229,000 or 26.4% to $638,000 from $867,000 for the three months ended September 30, 1996. As a percentage of revenue, operating income was 22.7% and 31.6% for the three months ended September 30, 1997 and 1996, respectively. The decrease in operating income as a percentage of real estate revenue was due to higher personnel costs and other expenses in 1997, partially offset by increased revenue. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1997, the Company had working capital of $38,182,000 and cash and short-term cash investments totaling $4,905,000. 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 $23,194,000 for the nine months ended September 30, 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 $17,392,000 for the nine months ended September 30, 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 $13,443,000 to purchase property, plant and equipment used in operations. Net cash used in financing activities was $6,013,000 for the nine months ended September 30, 1997. Cash provided for financing activities was obtained through net borrowings of $6,118,000 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 nine months ended September 30, 1997 the Company repaid $5,829,000 due on borrowing agreements and mortgage loans and received proceeds of $44,000 from the exercise of stock options. Cash paid for dividends to stockholders totaled $6,346,000 or $1.47 per common share. The Company has committed up to $10 million to the milling subsidiary to fund the milling subsidiary's share of the cost to construct a conventional flour mill in Blackfoot, Idaho which 10 will be owned and operated by Koch Fisher Mills L.L.C. in which the milling subsidiary has a 50% interest. Construction of the flour mill is expected to be complete in late 1998. At a special meeting held on October 30, the boards of directors of Fisher Broadcasting, Fisher Properties, and Fisher Companies approved management's recommendations for redevelopment of the KOMO Block site on which KOMO Television is currently located. The KOMO Block Project encompasses several elements, the most essential of which are the construction of a new facility for KOMO Television and the laying of groundwork for Fisher Broadcasting's future. The Telecommunications Act of 1996 is very specific in its mandate that commercial broadcasters continue to operate in the public interest, including delivery of advanced digital television. This plan for redevelopment of the KOMO Block meets the provisions of the mandate and prepares Fisher Broadcasting for the business opportunities made possible by these new technologies. Construction of the new KOMO Building and associated underground parking facilities will serve the needs of KOMO Television, Fisher Broadcasting, Fisher Communications Inc., and eventually Seattle radio operations. While it is envisioned that other tenants may occupy parts of the building, any such use will be consistent with the overriding goal of providing flexible premises that fully address the space and technological needs of Fisher Broadcasting. Accordingly, a master plan was approved for construction of the new KOMO Building at an estimated cost of $79,000,000, a significant portion of which will be financed through borrowing. The Company is evaluating the substantial effects that the project could have on future operating results, including increased interest and depreciation expenses, benefits from new industry partnerships, and creation of new business opportunities. In the year 2000, it is expected that broadcasting operations will move to the new building, that the parking facilities will be complete, and the current KOMO building will be demolished. Attention will be given to maximizing utilization and value of the entire KOMO Block. If demand and economic conditions are favorable, construction of an office building on the vacated studio site will be considered. In this regard, Fisher Properties has approved the undertaking of pre-development activities for additional development of the KOMO Block at an estimated cost of $2,000,000.
THE NEW KOMO BUILDING Parking Garage KOMO Building Parking Stalls 725 Gross Area 286,000 sf 203,000 sf Estimated Costs $18,023,000 $61,013,000 Schedule: Start Mid 1998 Late 1998 Finish Stage-one, Late 1999 Mid 2000 Stage-two, Late 2000
11 PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company cautions investors that any forward-looking statements or projections made by the Company are subject to risks and uncertainties which may cause actual results to differ materially from those projected. Important factors that could cause those results to differ materially from those expressed in this Form 10-Q include: material adverse changes in economic conditions, including changes in inflation and interest rates; changes in laws and regulations affecting the television and radio broadcasting business; competitive factors in the television, radio and milling industries; and material changes to accounting standards that would be adverse to the Company. 12 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 13 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 November 13, 1997 /s/ William W. Krippaehne, Jr. ----------------------------- ------------------------------------ William W. Krippaehne, Jr. President and Chief Executive Officer Dated November 13, 1997 /s/ David D. Hillard ----------------------------- ------------------------------------ David D. Hillard Senior Vice President and Chief Financial Officer 14 EX-11 2 COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 FISHER COMPANIES INC. Computation of Per Share Earnings
Nine Months Ended Three Months Ended September 30 September 30 1997 1996 1997 1996 ----------- ----------- --------- ---------- Weighted average common shares and equivalents outstanding during the period: Common shares 4,265,499 4,265,172 4,267,516 4,265,172 Restricted stock rights 13,620 12,746 Stock options 9,558 12,624 ----------- ----------- --------- ---------- Total 4,288,677 4,265,172 4,292,886 4,265,172 =========== =========== ========== ========== Net income $16,315,000 $17,611,000 $5,399,000 $5,597,000 =========== =========== ========== ========== Net income per common share $3.80 $4.13 $ 1.25 $ 1.31 =========== =========== ========== ==========
EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 4,905 163,068 42,312 1,374 14,410 75,653 239,707 98,632 443,368 37,471 59,914 0 0 10,669 228,654 443,368 188,922 191,695 122,483 122,483 39,505 791 4,147 24,769 8,454 16,315 0 0 0 16,315 3.80 0
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