-----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, Ttpuj/FQEuCc9G9htz0GBL3sWx5cbtHySj8FIrOshKSqVrCCpT2beKg6ngx0jNLP tlInFrjLAdxmkWiKZQue/w== 0000950144-96-002180.txt : 19960514 0000950144-96-002180.hdr.sgml : 19960514 ACCESSION NUMBER: 0000950144-96-002180 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 SROS: BSE SROS: CSE SROS: CSX 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: 96561798 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 KNIGHT-RIDDER FORM 10-Q 3-31-96 1 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 31, 1996 -------------- 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 - 48,911,350 shares as of May 5, 1996. -1- 2 Table of Contents for Form 10-Q Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Statement of Income 3 Consolidated Balance Sheet 4 Consolidated Statement of Cash Flows 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 PART II. OTHER INFORMATION Item 1. Legal Proceedings 9 Item 4. Submission of Matters to a Vote of Security Holders 9-10 Item 6. Exhibits and Reports on Form 8-K 10 SIGNATURE 10 Exhibit 27 Financial Data Schedule 11 Exhibit 99 Additional Exhibits 12 -2- 3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF INCOME (UNAUDITED, IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
QUARTER ENDED FOUR QUARTERS ENDED ---------------------- ------------------------- MARCH 31 MARCH 26 MARCH 31 MARCH 26 1996 1995 1996 1995 --------- --------- ---------- ---------- OPERATING REVENUE Newspapers Advertising Retail ............................................... $ 182,051 $ 181,785 $ 808,024 $ 800,235 General .............................................. 46,236 47,371 181,381 184,759 Classified ........................................... 195,566 167,099 711,163 628,115 --------- --------- ---------- ---------- Total .............................................. 423,853 396,255 1,700,568 1,613,109 Circulation ............................................ 126,854 122,592 499,577 486,449 Other .................................................. 20,049 18,286 83,660 70,627 --------- --------- ---------- ---------- Total Newspapers ................................... 570,756 537,133 2,283,805 2,170,185 Business Information Services ............................ 126,905 137,466 491,091 522,512 --------- --------- ---------- ---------- Total Operating Revenue ............................ 697,661 674,599 2,774,896 2,692,697 --------- --------- ---------- ---------- OPERATING COSTS Labor and employee benefits .............................. 283,315 279,594 1,131,700 1,100,616 Newsprint, ink and supplements ........................... 126,520 94,829 478,532 351,337 Other operating costs .................................... 194,337 191,557 787,898 753,493 Depreciation and amortization ............................ 42,877 37,612 156,877 149,793 --------- --------- ---------- ---------- Total Operating Costs .............................. 647,049 603,592 2,555,007 2,355,239 --------- --------- ---------- ---------- OPERATING INCOME ........................................... 50,612 71,007 219,889 337,458 --------- --------- ---------- ---------- OTHER INCOME (EXPENSE) Interest expense ......................................... (19,627) (12,401) (66,798) (46,464) Interest expense capitalized ............................. 1,195 245 2,839 663 Interest income .......................................... 2,581 2,133 9,590 6,938 Equity in earnings of unconsolidated companies and joint ventures ..................................... 7,755 951 27,465 10,485 Minority interests in earnings of consolidated subsidiaries .............................. (1,583) (1,614) (8,317) (9,037) Other, net ............................................... (97) 1,326 82,317 12 --------- --------- ---------- ---------- Total .............................................. (9,776) (9,360) 47,096 (37,403) --------- --------- ---------- ---------- Income before income taxes ............................... 40,836 61,647 266,985 300,055 Income taxes ............................................. 17,318 25,974 111,758 123,854 --------- --------- ---------- ---------- INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE ........................... 23,518 35,673 155,227 176,201 Cumulative effect of change in accounting principle for contributions ...................................... (7,320) (7,320) --------- --------- ---------- ---------- Net income ........................................... $ 23,518 $ 28,353 $ 155,227 $ 168,881 ========= ========= ========== ========== EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE Income before cumulative effect of change in accounting principle ......................... $ 0.48 $ .69 $ 3.14 $ 3.30 Cumulative effect of change in accounting principle ...... (0.14) (0.14) --------- --------- ---------- ---------- Net income ............................................. $ 0.48 $ 0.55 $ 3.14 $ 3.16 ========= ========= ========== ========== DIVIDENDS DECLARED PER COMMON SHARE ........................ $ 0.37 $ 0.37 $ 1.48 $ 1.48 ========= ========= ========== ========== AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (OOOS) .................................. 49,473 51,883 49,496 53,438 ========= ========= ========== ==========
SEE "NOTES TO CONSOLIDATED FINANCIAL STATEMENTS" ON PAGE 6. - 3 - 4 CONSOLIDATED BALANCE SHEET (UNAUDITED, IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
March 31 December 31 March 26 1996 1995 1995 ---------- ---------- ---------- ASSETS - ------ CURRENT ASSETS Cash, including short-term cash investments of $50 in 1996, $50 in December 1995, and $1,887 in March 1995 ................... $ 39,075 $ 26,012 $ 16,259 Accounts receivable, net of allowances of $14,841 in 1996, $14,348 in December 1995 and $14,100 in March 1995 ............... 349,136 339,264 306,088 Inventories .............................................................. 93,543 73,349 48,354 Other current assets ..................................................... 61,775 64,297 95,208 ---------- ---------- ---------- Total Current Assets ............................................... 543,529 502,922 465,909 ---------- ---------- ---------- INVESTMENTS AND OTHER ASSETS Equity in unconsolidated companies and joint ventures .................... 324,342 321,658 294,218 Other .................................................................... 258,637 285,666 199,447 ---------- ---------- ---------- Total Investments and Other Assets ................................. 582,979 607,324 493,665 ---------- ---------- ---------- PROPERTY, PLANT AND EQUIPMENT Land and improvements .................................................... 80,566 80,616 67,016 Buildings and improvements ............................................... 405,009 401,093 383,969 Equipment ................................................................ 1,223,586 1,223,838 1,209,124 Construction and equipment installations in progress ..................... 84,629 57,644 23,666 ---------- ---------- ---------- 1,793,790 1,763,191 1,683,775 Less accumulated depreciation ............................................ 845,109 831,544 858,436 ---------- ---------- ---------- Net Property, Plant and Equipment .................................... 948,681 931,647 825,339 ---------- ---------- ---------- EXCESS OF COST OVER NET ASSETS ACQUIRED Less accumulated amortization of $213,261 in 1996, $205,608 in December 1995 and $187,989 in March 1995 ................... 947,475 963,817 702,725 ---------- ---------- ---------- Total .............................................................. $3,022,664 $3,005,710 $2,487,638 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ CURRENT LIABILITIES Accounts payable ......................................................... $ 119,057 $ 127,532 $ 138,430 Accrued expenses and other liabilities ................................... 100,788 105,317 96,581 Accrued compensation and amounts withheld from employees ................. 82,327 101,357 83,233 Federal and state income taxes ........................................... 195 22,703 Deferred revenue ......................................................... 72,856 72,134 68,450 Dividends payable ........................................................ 18,155 17,978 18,573 Short-term borrowings and current portion of long-term debt .............. 51,366 13,129 ---------- ---------- ---------- Total Current Liabilities .......................................... 444,549 437,642 427,970 ---------- ---------- ---------- NONCURRENT LIABILITIES Long-term debt ........................................................... 1,002,806 1,000,721 565,566 Deferred federal and state income taxes .................................. 152,920 165,045 138,611 Postretirement benefits other than pensions .............................. 170,427 169,672 167,192 Employment benefits and other noncurrent liabilities ..................... 125,590 120,817 98,111 ---------- ---------- ---------- Total Noncurrent Liabilities ....................................... 1,451,743 1,456,255 969,480 ---------- ---------- ---------- MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES ............................ 625 843 205 ---------- ---------- ---------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Common stock, $.02 1/12 par value; shares authorized - 250,000,000; shares issued - 49,078,693 in 1996, 48,598,154 in December 1995 and 50,218,141 in March 1995 ............... 1,022 1,012 1,046 Additional capital ....................................................... 327,214 295,360 309,040 Retained earnings ........................................................ 771,323 771,656 779,897 Unrealized gains on investments .......................................... 26,188 42,942 ---------- ---------- ---------- Total Shareholders' Equity ......................................... 1,125,747 1,110,970 1,089,983 ---------- ---------- ---------- Total .............................................................. $3,022,664 $3,005,710 $2,487,638 ========== ========== ==========
See "Notes to Consolidated Financial Statements" on page 6. -4- 5 CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED, IN THOUSANDS OF DOLLARS)
QUARTER ENDED FOUR QUARTERS ENDED ------------------- -------------------- MARCH 31 MARCH 26 MARCH 31 MARCH 26 1996 1995 1996 1995 -------- -------- --------- -------- CASH PROVIDED BY (REQUIRED FOR) OPERATING ACTIVITIES Net income............................................................... $ 23,518 $ 28,353 $ 155,227 $ 168,881 Noncash items included in income: Cumulative effect of change in accounting principle..................... 7,320 7,320 Depreciation............................................................ 28,695 26,555 106,926 105,707 Amortization of excess of cost over net assets acquired................. 7,653 5,587 25,774 22,078 Amortization of other assets............................................ 6,529 5,470 24,177 22,008 Provision for noncurrent deferred taxes................................. 5 4,509 (1,153) Earnings of investees in excess of distributions........................ (4,051) 588 (15,467) (10,014) Distributions to investees.............................................. (5,422) Gain on sale of subsidiary.............................................. (92,698) Other items, net........................................................ 6,436 9,517 42,883 44,979 Change in certain assets and liabilities: Accounts receivable..................................................... 2,707 11,644 (27,557) (31,921) Inventories............................................................. (19,928) (8,799) (43,421) (10,312) Other current assets.................................................... 5,132 (40,438) 36,039 (26,670) Accounts payable........................................................ (8,475) 1,613 (29,323) 15,172 Federal and state income taxes.......................................... (195) 21,335 (37,675) 14,680 Other current liabilities............................................... (23,199) (18,559) (1,634) 15,588 -------- -------- --------- -------- Net cash provided by operating activities........................... 24,827 50,186 142,338 336,343 -------- -------- --------- -------- CASH PROVIDED BY(REQUIRED FOR) INVESTING ACTIVITIES Acquisition of Contra Costa Newspapers, Inc.............................. (335,755) Additions to property, plant and equipment............................... (44,511) (17,951) (147,585) (70,889) Other items, net......................................................... (9,517) (8,839) 46,725 (35,546) -------- -------- --------- -------- Net cash required for investing activities.......................... (54,028) (26,790) (436,615) (106,435) -------- -------- --------- -------- CASH PROVIDED BY (REQUIRED FOR) FINANCING ACTIVITIES Proceeds from sale of commercial paper and senior notes payable.......... 162,539 222,256 1,032,903 466,606 Reduction of total debt.................................................. (122,215) (68,194) (544,295) (357,730) -------- -------- --------- -------- Net change in total debt............................................ 40,324 154,062 488,608 108,876 Payment of cash dividends................................................ (17,978) (19,593) (72,762) (78,338) Sale of common stock to employees........................................ 33,235 7,780 100,892 24,495 Purchase of treasury stock............................................... (7,067) (152,231) (174,199) (264,086) Other items, net......................................................... (6,250) (6,408) (25,446) (24,821) -------- -------- --------- -------- Net cash provided by (required for) financing activities............ 42,264 (16,390) 317,093 (233,874) -------- -------- --------- -------- Net Increase (Decrease) in Cash..................................... 13,063 7,006 22,816 (3,966) Cash and short-term cash investments at beginning of the period........... 26,012 9,253 16,259 20,225 -------- -------- --------- -------- Cash and short-term cash investments at end of the period................. $ 39,075 $ 16,259 $ 39,075 $ 16,259 ======== ======== ========= ======== Working capital at end of the period...................................... $ 98,980 $ 37,939 $ 98,980 $ 37,939 ======== ======== ========= ========
SEE "NOTES TO CONSOLIDATED FINANCIAL STATEMENTS" ON PAGE 6. - 5 - 6 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 31, 1996 are not necessarily indicative of the results that may be expected for the year ending December 29, 1996. 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 31, 1995.
NOTE 2 - DEBT (In thousands of dollars) EFFECTIVE INTEREST BALANCE AT RATE AT --------------------------------- MARCH 31 MARCH 31 DECEMBER 31 MARCH 26 1996 1996 1995 1995 ---- ---- ---- ---- Commercial paper, net of discount...... 5.5% $ 597,990 $ 557,698 $208,745 Notes payable, net of discount (a)..... 8.5 159,316 159,274 159,146 Debentures, net of discount (b)........ 10.0 197,826 197,789 197,675 Senior notes, net of discount (c)...... 6.4 99,040 99,089 ---------- ---------- -------- Total debt (d)............... 6.9 1,054,172 1,013,850 565,566 Less amounts classified as current..... 5.5 51,366 13,129 ---------- ---------- -------- Total long-term debt......... 7.0% $1,002,806 $1,000,721 $565,566 ========== ========== ========
(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) REPRESENTS $100 MILLION OF 10-YEAR 6.3% SENIOR NOTES DUE IN 2005. (d) AT MARCH 31, 1996, AND MARCH 26, 1995, INTEREST PAYMENTS OF $14.3 MILLION AND $9.1 MILLION HAD BEEN MADE FOR THE YEAR-TO-DATE, RESPECTIVELY. NOTE 3 - INCOME TAX PAYMENTS Income tax payments for the quarters ended March 31, 1996, and March 26, 1995, were $3.7 million and $3.6 million, respectively. -6- 7 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FIRST QUARTER FIRST QUARTER 1996 COMPARED WITH FIRST QUARTER 1995 Earnings per share for the first quarter of 1996 were $.48, down $.21 per share, or 30.4%, from the $.69 per share earned in 1995, prior to the cumulative effect of a change in accounting principle recorded in the first quarter last year. The $.21 per share decline principally reflects: a 46.0% increase in the price of newsprint from the first quarter of 1995; operating losses incurred as a result of the Detroit strike ($.14 per share decline from the prior year); and lower Business Information Services (BIS) operating profit due to the launch by Knight-Ridder Information, Inc. (KRII) of two important new products aimed at the end-user market, and the absence of the Journal of Commerce (JoC), which was sold on April 3, 1995. Operating Revenue Newspaper advertising revenue increased 7.0% over the first quarter last year, on a full-run ROP linage increase of 10.9%. Excluding Detroit, but including the operations of Contra Costa Newspapers (acquired from Lesher Communications on Oct. 31, 1995) as if it had been owned both quarters, newspaper advertising revenue increased 5.5% from 1995 on a full-run ROP linage decrease of 0.6%. Classified advertising revenue increased 17.0% over the first quarter last year on a 16.5% full-run ROP linage increase. This is the 15th consecutive quarter of year-over-year classified revenue growth. The employment category showed the largest gain, posting a 30.7% revenue improvement, with linage up 9.9% from 1995. On a pro forma basis for Contra Costa Newspapers (CCN), but excluding Detroit, classified advertising revenue increased 15.8% from 1995. Retail advertising revenue improved by $266,000 over last year. On a pro forma basis for CCN, but excluding Detroit, retail revenue was down 2.0% from the prior year. Retail results in January were impacted by the inclement weather in the Northeast, but rebounded to an increase of 3.7% in March. General advertising revenue was down $1.1 million, or 2.4%, from last year. On a pro forma basis for CCN, but excluding Detroit, general advertising revenue was down $1.3 million, or 2.9%, from 1995. General advertising revenue was soft during most of the quarter, with March reflecting the strongest growth, up 1.1% from the prior year. Circulation revenue increased $4.3 million, or 3.5% from first quarter 1995. On a pro forma basis for CCN, but excluding Detroit, circulation revenue increased by $3.8 million, or 3.4%, on an average daily circulation decrease of 3.7% and average Sunday circulation decrease of 2.4%. The decline in circulation was offset by a 7.0% increase in the average rate, excluding both Detroit and CCN. Other newspaper revenue increased by $1.8 million, or 9.6%, from the prior year, due mostly to the contribution of CCN. BIS revenue in the first quarter decreased $10.6 million, or 7.7%, due to the absence of the JoC, which was sold on April 3, 1995. Excluding the JoC and acquisitions, operating revenue was up 0.7% from last year. Operating Costs Labor and employee benefit costs rose $3.7 million, or 1.3%, on a 1.4% decrease in the work force. The work force decrease, despite the CCN acquisition, was the result of fourth quarter buyouts in a number of locations, including Miami, Philadelphia and San Jose, as well as the impact of the Detroit strike and the absence of the JoC. Excluding the impact of acquisitions and dispositions, the work force decreased by 5.2%. Labor and employee benefits per employee, excluding Detroit, CCN and JoC, increased 4.3.% from first quarter 1995. Newsprint, ink and supplements costs increased $31.7 million, or 33.4%, on a 4.5% decrease in newsprint consumption and a 46.0% increase in the average newsprint price. Though there were no price increases in the first quarter of 1996, the quarter was significantly impacted by the newsprint price increases imposed in 1995. Other operating costs rose $2.8 million, or 1.5%, over first quarter 1995. On a pro forma basis for CCN, but excluding Detroit, other operating costs were $7.5 million, or 4.1%, below 1995, due to tight cost controls implemented to offset softness in advertising revenue. Depreciation and amortization increased $5.3 million, or 14.0% over first quarter 1995 primarily due to the acquisition of CCN. Excluding the impact of acquisitions, depreciation and amortization increased by 3.0 % from 1995, primarily due to BIS capital investments. -7- 8 Non-Operating Items Interest expense, net of interest income and interest expense capitalized, increased $5.8 million over last year due to higher debt levels during the quarter. The average debt balance for the quarter increased $514.1 million from the first quarter of last year, due largely to the financing of the CCN acquisition and the 5.8 million shares repurchased in 1995. Equity in earnings of unconsolidated companies and joint ventures increased by $6.8 million due to earnings improvements from our newsprint mill investments, which are benefiting from the rise in newsprint prices over first quarter last year. Other On April 1, 1996, the company announced that a libel suit filed by Richard A. Sprague against The Philadelphia Inquirer in 1973 had been settled. The settlement will have no impact on earnings. In March, the company announced that Tele-Communications, Inc. (TCI) has agreed to purchase all of Knight-Ridder's interests in the jointly owned cable properties for a price of $420 million in cash and TCI common stock. The two companies are equal owners of TKR Cable Company, which owns and operates systems in New Jersey and New York. Knight-Ridder also has a 15% interest in another TCI Cable venture that operates cable systems in five Southern states. The sale is expected to close in the second half of this year. On May 7, we announced that Global Financial Information Corporation (GFI), a major investment of Welsh, Carson, Anderson & Stowe, will purchase Knight-Ridder Financial for $275 million. The sale is expected to close in the third quarter. During the first quarter of 1996, the company purchased approximately 100,000 shares of Knight-Ridder common stock. The company has remaining authorization to repurchase 2.9 million shares and plans to repurchase additional shares this year. A portion of the proceeds from the sale of both our cable investment and KRF will be used to repurchase stock. Liquidity Net cash provided by operating activities decreased to $24.8 million from $50.2 million in the first quarter of 1995. The decrease was attributed to lower earnings, as a result of higher newsprint prices in the first quarter of 1996 and the Detroit strike, as well as changes in several working capital components. Cash and short-term cash investments were up $22.8 million from March 26, 1995, and up $13.1 million from year end. Total debt increased $40.3 million during the quarter and increased $488.6 million from March 26, 1995, due to the CCN acquisition and the 5.8 million shares repurchased in 1995. The total-debt-to-total-capital ratio was 48.4%, up from 47.7% at year end and 34.2% in March 1995. Management intends to use some portion of the proceeds from the sale of our cable investment and KRF to reduce debt before year end. Approximately $198 million in aggregate unused credit lines remained at the end of the quarter. The ratio of current assets to current liabilities was 1.2:1 at March 31, 1996, and 1.1:1 at Dec. 31, 1995, and March 26, 1995. Outlook for the Remainder of the Year We were pleased by 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 1996 to be a year of earnings growth. We expect no newsprint price increase this year, and we are encouraged that there are some signs of softening in the prices. For the full year, we expect newsprint costs will be held to a level about 20%-25% above what was paid in 1995. BIS Division results are expected to improve later in the year, but will be down slightly from the prior year due to reinvestment in product development. Operating profit and EPS are expected to improve throughout the year, with the greatest improvement expected in the second half of the year. Detroit is expected to continue to improve their operating results, and we now believe our total operating losses will be around $20 million. Comparisons to the prior year are expected to be better in the second half of the year due to more favorable newsprint price comparisons, the improvements in Detroit's operating results as the impact of its strike lessens, and the severance costs recognized in the fourth quarter of last year. -8- 9 PART II - OTHER INFORMATION Item 1. Legal Proceedings. Refer to Part I, Item 2, incorporated herein by reference, for a discussion relating to the settlement of litigation. Item 4. Submission of Matters to a Vote of Security Holders (a) The Company's Annual Meeting of Shareholders was held on April 23, 1996. The results of the voting with respect to matters presented at the Annual Meeting were as follows: Common Stock Voted --------------------------------- For Against Withheld ------ --------- ----------- (b) Election of Directors For a three-year term ending 1999: James I. Cash, Jr. 41,614,498 0 832,638 Jesse Hill, Jr. 41,613,839 0 833,297 Thomas L. Phillips 41,615,064 0 832,072 P. Anthony Ridder 41,611,857 0 835,279 Randall L. Tobias 41,617,060 0 830,076 For a two-year term ending 1998: Joan Ridder Challinor 41,615,164 0 831,972 John C. Fontaine 41,617,137 0 829,999 Continuing Directors Alvah H. Chapman, Jr. Peter C. Goldmark, Jr. Barbara Barnes Hauptfuhrer William S. Lee C. Peter McColough Gonzalo F. Valdes-Fauli John L. Weinberg
(c) Ratify the appointment of Ernst & Young LLP as independent auditors of the company for the year 1996. Common Stock Voted --------------------------------------- For Against Abstained -------------- --------- ------------ 42,321,704 72,712 52,720
Ratify proposal recommended by the Board of Directors to amend the Company's Employee Stock Option Plan. Common Stock Voted ----------------------------------------- For Against Abstained -------------- ----------- ------------ 41,153,505 1,164,942 128,689
-9- 10 Shareholder proposal seeking redemption of rights issued pursuant to the Company's Shareholder Rights Plan (1,560,770 shares were broker non votes). Common Stock Voted ----------------------------------------- For Against Abstained -------------- ----------- ------------ 15,857,514 24,612,660 416,192
Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Filed No. 27 - Financial Data Schedule (for SEC use only) No. 99 - Additional Exhibits (b) Reports on Form 8-K No reports were filed on Form 8-K during the quarter ended March 31, 1996. 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 13, 1996 /s/ Gary R. Effren ----------------------------------- Gary R. Effren Vice President/Controller (Chief Accounting Officer and Duly Authorized Officer of Registrant) -10- EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENT OF INCOME, THE CONSOLIDATED BALANCE SHEET, THE CONSOLIDATED STATEMENT OF CASH FLOWS AND THE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 1,000 U.S. DOLLAR 3-MOS DEC-29-1996 JAN-01-1996 MAR-31-1996 1 39,075 0 363,977 14,841 93,543 543,529 1,793,790 845,109 3,022,664 444,549 456,182 1,022 0 0 1,124,725 3,022,664 697,661 697,661 126,520 647,049 9,776 5,646 19,627 40,836 17,318 23,518 0 0 0 23,518 0.48 0.47 COST OF GOODS SOLD CONSISTS OF NEWSPRINT, INK & SUPPLEMENTS. OTHER EXPENSES CONSIST OF ALL NON-OPERATING COSTS NET, EXCLUDING INCOME TAXES. AMOUNT INCLUDES INTEREST EXPENSE, NET OF INTEREST INCOME AND OTHER NON-OPERATING COSTS, NET OF NON-OPERATING INCOME. -11-
EX-99 3 OTHER FINANCIAL INFORMATION 1 OTHER FINANCIAL INFORMATION (Unaudited) BUSINESS SEGMENT INFORMATION EXHIBIT 99 (In Thousands of Dollars)
QUARTER ENDED FOUR QUARTERS ENDED ------------------ -------------------- MARCH 31 MARCH 26 MARCH 31 MARCH 26 1996 1995 1996 1995 -------- -------- -------- -------- OPERATING REVENUE Newspapers $570,756 $537,133 $2,283,805 $2,170,185 Business Information Services 126,905 137,466 491,091 522,512 -------- -------- ---------- ---------- $697,661 $674,599 $2,774,896 $2,692,697 ======== ======== ========== ========== OPERATING INCOME Newspapers $ 61,246 $ 77,729 $ 264,663 $ 360,499 Business Information Services 973 6,684 6,311 22,257 Corporate (11,607) (13,406) (51,085) (45,298) -------- -------- ---------- ---------- $ 50,612 $ 71,007 $ 219,889 $ 337,458 ======== ======== ========== ========== DEPRECIATION & AMORTIZATION Newspapers $ 28,276 $ 23,665 $ 100,662 $ 94,651 Business Information Services 13,664 13,415 53,120 53,347 Corporate 937 532 3,095 1,795 -------- -------- ---------- ---------- $ 42,877 $ 37,612 $ 156,877 $ 149,793 ======== ======== ========== ==========
KNIGHT-RIDDER SHARE TRADING (As quoted by Knight-Ridder Financial Services)
1996 First Quarter 1995 First Quarter - ----------------------------------------------- -------------------------------------------------- Volume Per Day High Low Close Volume Per Day High Low Close 161,416 72 1/8 59 3/4 68 1/8 152,485 56 1/8 50 1/4 55 7/8
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