-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, e0kdq1zTEKutl6Qb0ZUJepnYwzMA771fPs94TBQqLTg6sQF/M+t3q4BoARKSgF0/ eYR6dfmWW8OMYJYLH8D/wQ== 0000205520-95-000015.txt : 19950511 0000205520-95-000015.hdr.sgml : 19950511 ACCESSION NUMBER: 0000205520-95-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950326 FILED AS OF DATE: 19950509 SROS: BSE SROS: CSE SROS: MSE SROS: NYSE SROS: PHLX FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNIGHT RIDDER INC CENTRAL INDEX KEY: 0000205520 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 380723657 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07553 FILM NUMBER: 95535711 BUSINESS ADDRESS: STREET 1: ONE HERALD PLZ CITY: MIAMI STATE: FL ZIP: 33132 BUSINESS PHONE: 3053763800 MAIL ADDRESS: STREET 1: ONE HERALD PLZ CITY: MIAMI STATE: FL ZIP: 33132 FORMER COMPANY: FORMER CONFORMED NAME: KNIGHT RIDDER NEWSPAPERS INC /FL/ DATE OF NAME CHANGE: 19860707 10-Q 1 1995 FIRST QUARTER 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED March 26, 1995 ------------------ COMMISSION FILE NUMBER 1-7553 ------ KNIGHT-RIDDER, INC. - --------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) FLORIDA 38-0723657 - -------------------------------------------------------------------------- (State of Incorporation) (I.R.S. Employer Identification No.) ONE HERALD PLAZA, MIAMI, FLORIDA 33132 ---------------------------------------- (Address of principal executive offices) (305) 376-3800 - --------------------------------------------------------------------------- (Registrant's telephone number, including area code) NOT APPLICABLE - ---------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, 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 practical date. Common Stock, $.02 1/12 Par Value- 49,856,186 shares as of April 30, 1995. -2- Table of Contents for 10-Q Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Statements of Income 4-5 Consolidated Balance Sheet 6-7 Consolidated Statements of Cash Flows 8-9 Notes to Consolidated Financial Statements 9-10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11-13 PART II. OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders 14 Item 6 - Exhibits and Reports on 8-K 15 SIGNATURES 15 Exhibit 11 Statement Re: Computation of Per Share Earnings 16-17 Exhibit 27 Financial Data Schedule 18 Exhibit 99 Additional Exhibits 19-22 -3- Consolidated Statement Of Income (Unaudited, in thousands of dollars, except per share data)
Quarter Ended Four Quarters Ended --------------------- ---------------------- March 26 March 27 March 26 March 27 1995 1994 1995 1994 --------- --------- --------- --------- OPERATING REVENUE Newspapers Advertising Retail $ 181,785 $ 174,026 $ 800,235 $ 770,414 General 47,371 47,081 184,759 172,939 Classified 167,099 145,412 628,115 556,964 --------- --------- --------- --------- Total 396,255 366,519 1,613,109 1,500,317 Circulation 122,592 120,724 486,449 478,161 Other 18,286 14,627 70,627 58,397 --------- --------- --------- --------- Total Newspapers 537,133 501,870 2,170,185 2,036,875 Business Information Services 137,466 128,993 522,512 461,442 --------- --------- --------- --------- Total Operating Revenue 674,599 630,863 2,692,697 2,498,317 --------- --------- --------- --------- OPERATING COSTS Labor and employee benefits 279,594 268,395 1,100,616 1,039,200 Newsprint, ink and supplements 94,829 79,394 351,337 334,379 Other operating costs 191,557 181,118 753,493 683,731 Depreciation and amortization 37,612 37,146 149,793 145,020 --------- --------- --------- --------- Total Operating Costs 603,592 566,053 2,355,239 2,202,330 --------- --------- --------- --------- OPERATING INCOME 71,007 64,810 337,458 295,987 --------- --------- --------- --------- OTHER INCOME (EXPENSE) Interest expense (12,401) (10,522) (46,464) (42,439) Interest expense capitalized 245 56 663 171 Interest income 2,133 1,265 6,938 5,223 Equity in earnings of unconsolidated companies and joint ventures 951 (2,122) 10,485 6,015 Minority interests in earnings of unconsolidated subsidiaries (1,614) (2,227) (9,037) (10,329) Other, net 1,326 402 12 1,464 --------- --------- --------- --------- Total (9,360) (13,148) (37,403) (39,895) --------- --------- --------- --------- Income before income taxes 61,647 51,662 300,055 256,092 Income taxes 25,974 21,290 123,854 100,767 --------- --------- --------- --------- INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 35,673 30,372 176,201 155,325 Cumulative effect of change in accounting principle for contributions (7,320) (7,320) --------- --------- --------- --------- Net income $ 28,353 $ 30,372 $ 168,881 $ 155,325 ========= ========= ========= ========= -4- EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE Income before cumulative effect of change in accounting principle $ .69 $ .55 $ 3.30 $ 2.81 Cumulative effect of change in accounting principle (.14) (.14) --------- --------- --------- --------- Net income $ .55 $ .55 $ 3.16 $ 2.81 ========= ========= ========= ========= DIVIDENDS DECLARED PER COMMON SHARE $ .37 $ .35 $ 1.48 $ 1.40 ========= ========= ========= ========= AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (000s) 51,883 55,233 53,438 55,203 ========= ========= ========= ========= See "Notes to Consolidated Financial Statements" and statistical data on pages 9, 10, and 21.
-5- Consolidated Balance Sheet (Unaudited, in thousands of dollars, except share data)
March 26 December 25 March 27 1995 1994 1994 --------- --------- --------- ASSETS CURRENT ASSETS Cash, including short-term cash investments of $1,887 in 1995, $150 in December 1994 and $1,987 in March 1994 $ 16,259 $ 9,253 $ 20,225 Accounts receivable, net of allowances of $14,100 in 1995, $13,728 in December 1994 and $14,977 in March 1994 306,088 317,687 274,032 Inventories 48,354 39,555 38,042 Other current assets 95,208 56,309 73,851 --------- --------- --------- Total Current Assets 465,909 422,804 406,150 --------- --------- --------- INVESTMENTS AND OTHER ASSETS Equity in unconsolidated companies and joint ventures 294,218 293,205 285,843 Other 199,447 190,515 181,547 --------- --------- --------- Total Investments and Other Assets 493,665 483,720 467,390 --------- --------- --------- PROPERTY, PLANT AND EQUIPMENT Land and improvements 67,016 66,950 66,908 Buildings and improvements 383,969 383,696 377,934 Equipment 1,209,124 1,209,360 1,179,650 Construction and equipment installations in progress 23,666 17,099 12,010 --------- --------- --------- 1,683,775 1,677,105 1,636,502 Less accumulated depreciation 858,436 844,593 785,010 --------- --------- --------- Net Property, Plant and Equipment 825,339 832,512 851,492 --------- --------- --------- EXCESS OF COST OVER NET ASSETS ACQUIRED Less accumulated amortization of $187,989 in 1995, $182,402 in December 1994 and $165,911 in March 1994 702,725 708,153 721,047 --------- --------- --------- Total $2,487,638 $ 2,447,189 $2,446,079 ========= ========= ========= -6- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 138,430 $ 136,817 $ 122,479 Accrued expenses and other liabilities 96,581 98,993 88,708 Accrued compensation and amounts withheld from employees 83,233 96,917 74,181 Federal and state income taxes 22,703 1,368 8,023 Deferred revenue 68,450 66,953 62,053 Dividends payable 18,573 19,593 19,107 Short-term borrowings and current portion of long-term debt 25,000 --------- --------- --------- Total Current Liabilities 427,970 420,641 399,551 --------- --------- --------- NONCURRENT LIABILITIES Long-term debt 565,566 411,504 431,690 Deferred federal and state income taxes 138,611 138,611 139,764 Postretirement benefits other than pensions 167,192 166,682 169,209 Employment benefits and other noncurrent liabilities 98,111 84,264 65,335 --------- --------- --------- Total Noncurrent Liabilities 969,480 801,061 805,998 --------- --------- --------- MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES 205 833 2,034 --------- --------- --------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Common Stock, $.02 1/12 par value; shares authorized - 250,000,000; shares issued - 50,218,141 in 1995, 52,892,720 in December 1994 and 54,608,949 in March 1994 1,046 1,102 1,138 Additional capital 309,040 326,392 340,584 Retained earnings 779,897 897,160 896,774 --------- --------- --------- Total Shareholders' Equity 1,089,983 1,224,654 1,238,496 --------- --------- --------- Total $2,487,638 $ 2,447,189 $2,446,079 ========= ========= ========= See "Notes to Consolidated Financial Statements" and statistical data on pages 9, 10, and 21.
-7- Consolidated Statement of Cash Flows (Unaudited, in thousands of dollars)
Quarter Ended Four Quarters Ended ------------------- -------------------- March 26 March 27 March 26 March 27 1995 1994 1995 1994 -------- -------- -------- -------- CASH PROVIDED BY (REQUIRED FOR) OPERATING ACTIVITIES Net Income $28,353 $30,372 $168,881 $155,325 Non-cash items included in income: Cumulative effect of change in accounting principle 7,320 7,320 Depreciation 26,555 26,624 105,707 105,875 Amortization of excess of cost over net assets acquired 5,587 5,366 22,078 20,310 Amortization of other assets 5,470 5,156 22,008 18,835 Provision for noncurrent deferred taxes 3,785 (1,153) 26,596 Distributions from investees in excess of (less than) earnings 588 3,064 (10,014) (16,721) Other items, net 9,517 9,235 44,979 29,996 Change in certain assets and liabilities: Accounts receivable 11,644 2,430 (31,921) (19,079) Inventories (8,799) 3,380 (10,312) 7,906 Other current assets (40,438) (11,664) (26,670) 14,159 Accounts payable 1,613 (2,460) 15,172 (6,454) Federal and state income taxes 21,335 8,013 14,680 6,512 Other current liabilities (18,559) (344) 15,588 1,374 -------- -------- -------- -------- Net cash provided by operating activities 50,186 82,957 336,343 344,634 -------- -------- -------- -------- CASH REQUIRED FOR INVESTING ACTIVITIES Additions to property, plant and equipment (17,951) (14,172) (70,889) (59,311) Other items, net (8,839) (34,306) (35,546) (73,509) -------- -------- -------- -------- Net cash required for investing activities (26,790) (48,478) (106,435) (132,820) -------- -------- -------- -------- -8- CASH PROVIDED BY (REQUIRED FOR) FINANCING ACTIVITIES Proceeds from sale of commercial paper and bank borrowings 222,256 130,958 466,606 381,596 Reduction of total debt (68,194) (125,343) (357,730) (438,610) -------- -------- -------- -------- Net change in total debt 154,062 5,615 108,876 (57,014) Payment of cash dividends (19,593) (19,197) (78,338) (76,746) Sale of common stock to employees 7,780 9,182 24,495 27,610 Purchase of treasury stock (152,231) (25,122) (264,086) (65,815) Other items, net (6,408) (7,744) (24,821) (51,972) -------- -------- -------- -------- Net cash required for financing activities (16,390) (37,266) (233,874) (223,937) -------- -------- -------- -------- Net Increase (Decrease) in Cash 7,006 (2,787) (3,966) (12,123) Cash and short-term cash investments at beginning of the period 9,253 23,012 20,225 32,348 -------- -------- -------- -------- Cash and short-term cash investments at end of the period $16,259 $20,225 $16,259 $20,225 ======== ======== ======== ======== Working capital at end of the period $37,939 $6,599 $37,939 $6,599 ======== ======== ======== ======== See "Notes to Consolidated Financial Statements" and statistical data on pages 9, 10, and 21. (/table) Notes to Consolidated Financial Statements (Unaudited) Note 1 - Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period and four quarters ended March 26, 1995 are not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information, refer to the consolidated financial statements and footnotes thereto included in the Registrant Company and Subsidiaries' annual report on Form 10-K for the year ended December 25, 1994. In the first quarter of 1995, the Company adopted Financial Accounting Standard (FAS) 116 - "Accounting For Contributions Received and Contributions Made." The adoption of FAS 116 resulted in a $7.3 million charge (net of tax) to operations, or $.14 per share, and was recorded as a cumulative effect adjustment. -9-
Note 2 - Debt (In thousands of dollars)
Effective Interest Balance at Rate at -------------------------------- March 26 March 26 December 25 March 27 1995 1995 1994 1994 -------- -------- -------- -------- Commercial paper, net of discount 6.2 % $208,745 $54,764 $100,206 Notes payable, net of discount (A) 8.6 159,146 159,103 158,974 Debentures, net of discount (B) 10.0 197,675 197,637 197,510 -------- -------- -------- Total debt (C) 8.2 565,566 411,504 456,690 Less amounts classified as current 25,000 -------- -------- -------- Total long-term debt 8.2 % $565,566 $411,504 $431,690 ======== ======== ======== (A) Represents $160 million of 8 1/2% Notes subject to mandatory pro rata amortization of 25% annually commencing 1998 through maturity in 2001. (B) Represents $200 million of 20-year 9 7/8% debentures due in 2009. (C) At March 26, 1995 and March 27, 1994, interest payments of $9.1 million and $9.7 million had been made for the year-to-date, respectively. Note 3 - Income Tax Payments Income tax payments for the quarters ended March 26, 1995 and March 27, 1994, were $3.6 million and $2.3 million, respectively.
-10- Management's Discussion and Analysis of the First Quarter First Quarter 1995 Compared With First Quarter 1994 Earnings per share for the first quarter of 1995 were $.69 prior to the cumulative effect of a change in accounting principle, a 25.5% increase from $.55 per share in 1994. After the mandated change, to reflect the effect of multiyear charitable commitments, earnings per share were $.55. Income before the $7.3 million cumulative effect of the change in accounting principle of $35.7 million improved by $5.3 million, or 17.5%, over last year. Operating income for the quarter increased by 9.6% to $71.0 million, on a 6.9% operating revenue improvement. Earnings per share before the cumulative effect of the change in accounting principle grew faster than operating income for several reasons. First was the positive swing from 1994 of more than $3.0 million in equity earnings from unconsolidated companies and joint ventures, due to our newsprint investments. Second, our 4.9 million share repurchase since first quarter 1994 reduced our total outstanding shares to 50.2 million and finally, favorable currency exchange rates on earnings in our overseas operations contributed more than $.01 per share to the bottom line. Operating Revenue Newspaper advertising revenue increased 8.1% over the first quarter last year, on a full-run ROP linage increase of 1.8%. Classified advertising revenue reflected a 14.9% increase over the first quarter last year, on a 4.5% full-run ROP linage increase. The employment category showed the largest gain, posting a 29.4% improvement, with linage up 22.2%. This was the eleventh consecutive quarter of classified revenue year-over-year improvement and the third consecutive quarter of double-digit year-over-year growth. Retail advertising revenue improved by $7.8 million, or 4.5%, over last year on a 0.6% decrease in full-run ROP linage. The growth rate in retail slowed during the quarter. General advertising revenue was $290,000, or 0.6%, over last year on a 1.1% increase in full-run ROP linage. General advertising was soft during most of the quarter, particularly in the preprint category. Circulation revenue increased $1.9 million, or 1.5%, due to a 3.0% increase in average rates, offset by a 1.4% decline in average seven-day circulation. Other newspaper revenue increased by $3.7 million, or 25.0%, due in part to an increase in newsprint waste revenue that was driven by the rise in 1995 newsprint prices and the growth in special publication revenue. Business Information Services (BIS) revenue in the first quarter increased $8.5 million, or 6.6%. Knight-Ridder Financial contributed significantly to the revenue growth, posting a $7.6 million, or 19.0%, improvement over the prior year. Knight-Ridder Information, Inc., revenue was flat in the first quarter, reflecting the growing maturation of the "information specialist" market. Acquisitions played a small role in the year-over-year revenue increase. -11- Operating Costs Labor and employee benefit costs rose $11.2 million, or 4.2%, on a 1.3% increase in the work force and a 3.0% increase in average wage. The work force increase was a result of BIS expansion and aggressive reinvestment in sales, marketing and content at BIS companies. Newsprint, ink and supplement costs increased $15.4 million, or 19.4%, on a 1.9% increase in newsprint consumption and an 18.8% increase in the average newsprint price. The newsprint increase did not reflect the full impact of the recent price increases, which have not yet fully worked their way through our inventory. Other operating costs rose $10.4 million, or 5.8% over first quarter 1994. The increase resulted partly from heavy circulation promotion at Philadelphia, Miami and St. Paul, increased exchange fees related to BIS overseas revenue growth and other volume-related costs associated with operations. Depreciation and amortization increased 1.3% over first quarter 1994 primarily due to BIS expansion. Non-Operating Items And Income Taxes Interest expense, net of interest income and interest expense capitalized, increased $820,000 over last year due to higher debt levels during the quarter. The average debt balance for the quarter increased $26.5 million, or 5.4% from the first quarter of last year, due largely to the 4.9 million shares repurchased since last year's first quarter. Equity in earnings of unconsolidated companies and joint ventures increased by more than $3.0 million due to improved results from our newsprint mill investments, which benefited from the recent rise in newsprint prices. The "Other, Net" line of the non-operating section reflected an almost $1.0 million increase over first quarter 1994 as a result of favorable exchange rates on earnings in our overseas operations. The effective tax rate was 42.1% compared with 41.2% in the first quarter of 1994. The increase was primarily a result of higher effective state tax rates. Other In the first quarter of 1995, the company adopted Financial Accounting Standard (FAS) 116 - "Accounting For Contributions Received and Contributions Made." The adoption of FAS 116 resulted in a $7.3 million charge (net of tax) to operations, or $.14 per share, and was recorded as a cumulative effective adjustment. In March, Knight-Ridder, Inc., Tribune Company, Cox Newspapers, Inc., and Advance Publications announced the purchase of PRC Realty Systems for $60 million in cash and debt. Each of the four purchasing companies will own an equal interest in PRC. PRC is the country's premier producer of software for the real estate industry. The purchase of PRC will be finalized early in the second quarter. -12- During the first quarter of 1995, the company purchased approximately 2.8 million shares of Knight-Ridder common stock. The company has remaining authorization to repurchase 2.9 million shares and plans to repurchase shares should the price remain at current levels. The sale of the Journal of Commerce to The Economist Group of London was completed on April 3 for $115 million. The gain from the sale of the Journal of Commerce is expected to be over $50 million, after tax. Liquidity Net cash provided by operating activities decreased to $50.2 million from $83.0 million in the first quarter of 1994, due largely to an increase in other current assets of $40.4 million and changes in several other working capital components. Other current assets showed a larger increase during the first quarter 1995, due to accelerated funding of the company's employee medical plans. Total debt increased $154.1 million during the quarter and increased $108.9 million from March 27, 1994, due to the repurchase of 2.8 million shares of the company's stock in the quarter and 4.9 million shares during the 12 months. The total-debt-to-total-capital ratio was 34.2%, up from 25.2 at year end and 26.9% in March 1994. The 34.2% total-debt-to-total-capital ratio does not reflect the reduction of debt from the proceeds of the Journal of Commerce sale, which will reduce the debt-to-total-capital ratio in the second quarter 1995. Approximately $291 million in aggregate unused credit lines remained at the end of the quarter. The ratio of current assets to current liabilities was 1.1:1 at March 26, 1995, and 1.0:1 at Dec. 25, 1994, and March 27, 1994. Outlook for the Remainder of the Year We were pleased with results for the first quarter of the year. As we look ahead to the second quarter and the year, we believe the advertising strength we have seen thus far will be sustained and we expect 1995 to be a year of earnings growth. The average price of newsprint will increase to about 40% above what was paid in 1994 in the second quarter and will be up more in the third and fourth quarters, as the recent price increases work their way through our inventory. For the fiscal year, newsprint costs will be held to a level about 40% above what was paid in 1994, if there are no further price increases beyond those already announced. BIS Division results over the balance of the year will reflect the absence of the Journal of Commerce, which was sold on April 3 to The Economist Group. Operating profit is expected to be below last year in the second and third quarters, as we feel the full impact of the newsprint price increases. The fourth quarter is expected to show significant improvement over 1994, due to the fourth quarter 1994 additions to the litigation reserves and severance charges, and the benefit of an extra week in the fourth quarter of 1995. Earnings per share are expected to be up in the third and fourth quarters as we benefit from the improved results from our newsprint mill investments and the share repurchase program. Earnings per share in the second quarter, excluding the gain on the sale of the Journal of Commerce, will likely be below 1994. -13- PART II. OTHER INFORMATION OTHER INFORMATION - ----------------- Items 1, 2, 3, 4(d) and 5 are omitted as inapplicable, not required, or because the information is included in the consolidated financial information. Item 4(a),(b), and (c): Submission of Matters to a Vote of Security Holders - ------------------------------------------------------- The Company's Annual Meeting of Shareholders was held on May 5, 1995. The results of the voting with respect to matters presented at the Annual Meeting were as follows: 44,310,763 shares of Common Stock voted for the re- election of James K. Batten as a Director to the Board of Directors for a term ending in 1998, 312,077 shares withheld and -0- shares voted against; 44,304,350 shares of Common Stock voted for the re-election of C. Peter McColough as a Director to the Board of Directors for a term ending in 1998, 318,490 shares withheld and -0- shares voted against; 44,306,246 shares of Common Stock voted for the re-election of Gonzalo F. Valdes-Fauli as a Director to the Board of Directors for a term ending in 1998, 316,594 shares withheld and -0- shares voted against; 44,308,212 shares of Common Stock voted for the re- election of Ben R. Morris as a Director to the Board of Directors for a term ending in 1996, 314,628 shares withheld and -0- shares voted against; 44,305,783 shares of Common Stock voted for the re-election of Eric Ridder as a Director to the Board of Directors for a term ending in 1996, 317,057 shares withheld and -0- shares voted against; 44,152,322 shares of Common Stock voted in favor of a proposal to ratify the appointment of Ernst & Young LLP as independent auditors of the company for the year 1995, 413,995 shares of Common Stock voted against the proposal and 56,523 abstained from voting; 35,790,013 shares of Common Stock voted against a shareholder proposal requesting the preparation of a report relating to cigarette advertising, 5,908,467 shares of Common Stock were voted in favor of the proposal and 776,720 shares abstained from voting in such amendment, 2,147,640 shares were broker non votes; 30,396,957 shares of Common Stock voted against a shareholder proposal to provide for the annual election of all directors, 11,657,342 shares of Common Stock were voted in favor of the proposal and 421,460 shares abstained from voting in such amendment, 2,147,081 shares were broker non votes. -14- Item 6 Exhibits and Reports on Form 8-K -------------------------------- a. Exhibits Filed No. 11 - Statement Re: Computation of Per Share Earnings No. 27 - Financial Data Schedule No. 99 - Additional Exhibits b. Reports on Form 8-K No reports were filed on Form 8-K during the quarter ended March 26, 1995. 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. KNIGHT-RIDDER, INC. (Registrant) Date May 9, 1995 Gary R. Effren Vice President/Controller (Chief Accounting Officer and Duly Authorized Officer of Registrant) -15- COMPUTATION OF PER SHARE EARNINGS (UNAUDITED,IN THOUSANDS, EXCEPT PER SHARE DATA) EXHIBIT 11 ==========
Quarter Ended ------------------------- March 26 March 27 1995 1994 -------- -------- PRIMARY Average shares outstanding 51,588 54,752 Net effect of dilutive stock options - based on the Treasury Stock method using the average market price 295 481 ======== ======== TOTAL 51,883 55,233 Income before cumulative effect of change in accounting principle $35,673 $30,372 Cumulative effect of change in accounting principle for conributions (7,320) -------- -------- Net Income $28,353 $30,372 ======== ======== Earnings per Common and Common Equivalent Share Income before cumulative effect of change in accounting principle $0.69 $0.55 Cumulative effect of change in accounting principle (0.14) -------- -------- Per share amount from net income $0.55 $0.55 ======== ======== FULLY DILUTED Average shares outstanding 51,588 54,752 Net effect of dilutive options - based upon Treasury Stock method using the higher of quarter-end or average market price 409 572 -------- -------- TOTAL 51,997 55,324 ======== ======== Income before cumulative effect of change in accounting principle $35,673 $30,372 Cumulative effect of change in accounting principle for contributions (7,320) -------- -------- Net Income $28,353 $30,372 ======== ======== -16- Earnings per Common and Common Equivalent Share Income before cumulative effect of change accounting principle $0.69 $0.55 Cumulative effect of change in accounting principle (0.14) -------- -------- Per share amount from net income $0.55 $0.55 ======== ======== -17-
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS UNAUDITED SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENTS OF INCOME, THE CONSOLIDATED BALANCE SHEETS, THE CONSOLIDATED STATEMENTS OF CASH FLOWS AND THE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 1000 3-MOS DEC-31-1995 DEC-26-1994 MAR-26-1995 16,259 0 320,188 14,100 48,354 465,909 1,683,775 858,436 2,487,638 427,970 0 1,046 0 0 1,088,937 2,487,638 674,599 674,599 94,829 603,592 9,360 0 12,401 61,647 25,974 35,673 0 0 (7,320) 28,353 .55 .55 Cost of goods sold consists of newsprint, ink, and supplements. Other - Expenses consists of all non-operating costs, excluding income taxes. Amount includes interest expense net of interest income and other non-operating costs (net).
EX-99 3 EXHIBIT 99 ADDITIONAL EXHIBITS KNIGHT-RIDDER, INC. AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION EXHIBIT 99 (Unaudited, in thousands of dollars) ==========
Quarter Ended Four Quarters Ended ---------------------- ----------------------- March 26 March 27 March 26 March 27 1995 1994 1995 1994 --------- --------- --------- --------- OPERATING REVENUE Newspapers $ 537,133 $ 501,870 $ 2,170,185 $ 2,036,875 Business Information Services 137,466 128,993 522,512 461,442 --------- --------- --------- --------- $ 674,599 $ 630,863 $ 2,692,697 $ 2,498,317 ========= ========= ========= ========= OPERATING INCOME Newspapers $ 77,729 $ 68,086 $ 360,499 $ 310,325 Business Information Services 6,684 7,537 22,257 25,326 Corporate (13,406) (10,813) (45,298) (39,664) --------- --------- --------- --------- $ 71,007 $ 64,810 $ 337,458 $ 295,987 ========= ========= ========= ========= DEPRECIATION AND AMORTIZATION Newspapers $ 23,665 $ 23,941 $ 94,651 $ 95,597 Business Information Services 13,415 12,782 53,347 47,766 Corporate 532 423 1,795 1,657 --------- --------- --------- --------- $ 37,612 $ 37,146 $ 149,793 $ 145,020 ========= ========= ========= =========
-19- Knight-Ridder, Inc. First Quarter Graphs (Unaudited) ================================
FIRST QUARTER NET INCOME FIRST QUARTER EARNINGS PER SHARE (From continuing operations, in $000s) (From continuing operations) Year Amount Year Amount --------- ----------- --------- --------- 1995 35,673 * 1995 $0.69* 1994 30,372 1994 $0.55 1993 23,136 1993 $0.42 1992 25,006 * 1992 $0.46* 1991 15,830 1991 $0.32 1990 25,849 1990 $0.50 * 1995 excludes a one-time charge of $7.3 million, or $.14 per share, and 1992 excludes a one-time charge of $105.2 million, or $1.93 per share representing the cumulative effect of changes in accounting principles. FIRST QUARTER TOTAL OPERATING REVENUE FIRST QUARTER NEWSPAPER ADVERTISING REVENUE (From continuing operations, in $000's) (In $000s) Year Amount Year Amount --------- ----------- --------- --------- 1995 674,599 1995 396,255 1994 630,863 1994 366,519 1993 583,894 1993 347,833 1992 555,438 1992 334,023 1991 545,441 1991 340,413 1990 554,915 1990 371,690
-20- Circulation - Note A (Unaudited, in thousands of copies)
Quarter Ended ------------------------------- March 26 March 27 1995 1994 Change ------ ------ ------ Average Morning Circulation 3,151 3,196 (45) Average Evening Circulation 446 450 (4) ------ ------ ------ Average Daily Circulation 3,597 3,646 (49) ====== ====== ====== Average Sunday Circulation 4,701 4,790 (89) ====== ====== ======
Advertising Statistics (Unaudited) - Notes A & B
Quarter Ended --------------------------------- March 26 March 27 1995 1994 % Change -------- -------- -------- LINAGE (In thousands of six-column inches) Full-run ROP Retail 3,455 3,477 (0.6) General 377 373 1.1 Classified 3,420 3,274 4.5 -------- -------- Total 7,252 7,124 1.8 ======== ======== Factored Part-run ROP 465 401 16.0 ======== ======== Full-run Preprint 3,670 3,691 (0.6) ======== ======== Part-run Preprint 3,717 3,355 10.8 ======== ======== TOTAL PREPRINTS INSERTED (000s) 1,082,994 1,089,400 (0.6) ======== ======== Note A: Where necessary, certain previously reported statistics have been restated to be consistent with guidelines currently in use. Note B: Factored part-run linage represents linage in zoned editions that is translated into full- run equivalent linage based on the ratio of the circulation in a particular zone to the total circulation of the newspaper.
-21- Knight-Ridder Share Trading (As quoted by Knight-Ridder Financial Services)
1995 First Quarter 1994 First Quarter ------------------------------------- ---------------------------------- Volume High Low Close Volume High Low Close --------- ------ ------ ------ --------- ----- ------ ------ 9,454,100 56 1/8 50 1/4 55 7/8 8,485,000 61 54 7/8 60 1/8
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