-----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, aTrb0GRMYh5W9tODaDjd/bIovU3wDJ/ujNPXsusmgqMe5yJfloH+OryZSVkMBwQW tIcf/52R+GRpstbVfbEgSg== 0000930661-95-000125.txt : 19950517 0000930661-95-000125.hdr.sgml : 19950516 ACCESSION NUMBER: 0000930661-95-000125 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: T SF COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000847841 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 731341805 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10263 FILM NUMBER: 95538012 BUSINESS ADDRESS: STREET 1: 2407 E SKELLY DR CITY: TULSA STATE: OK ZIP: 74105 BUSINESS PHONE: 9187472600 10-Q 1 FORM 10-Q (QE 3-31-95) FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 1995, or [_] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition period from ______ to ______ Commission file number 1-10263 ------- T/SF COMMUNICATIONS CORPORATION ================================================================================ (Exact name of registrant as specified in its charter) Delaware 73-1341805 - ------------------------------- ----------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 2407 East Skelly Drive, Tulsa, Oklahoma 74105 - --------------------------------------- ------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (918) 747-2600 ------------------------------ N/A - -------------------------------------------------------------------------------- (Former Name of Registrant) Securities registered pursuant to Section 12(b) of the Act; Common Stock, $0.10 Par Value Per Share. At May 11, 1995, there were 4,894,004 shares of the registrant's Common Stock outstanding. 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 (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 ----- ----- T/SF COMMUNICATIONS CORPORATION INDEX
Page No. ------- PART I Financial Information Item 1 Financial Statements ------ Consolidated Balance Sheets - March 31, 1995 (unaudited) and December 31, 1994 4-5 Consolidated Statements of Operations - Three Months ended March 31, 1995 and 1994 (unaudited) 6 Consolidated Statements of Cash Flows - Three Months Ended March 31, 1995 and 1994 (unaudited) 7-8 Notes to Consolidated Financial Statements 9-10 Item 2 Management's Discussion and Analysis of ------ Financial Condition and Results of Operations 10-11 PART II Other Information Item 6 Exhibits and Reports on Form 8-k 12 ------
2 PART I Item 1. Financial Information 3 T/SF COMMUNICATIONS CORPORATION CONSOLIDATED BALANCE SHEETS (In Thousands, except Per Share Amounts)
MARCH 31 DECEMBER 31 1995 1994 -------- -------- (UNAUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 3,901 $ 4,311 Short-term investments 1,000 2,000 Accounts receivable, less reserve for doubtful accounts of $565 in 1995 and $506 in 1994 11,100 8,535 Inventories 449 596 Current contract receivable and other current assets 6,344 6,347 Refundable income taxes 167 167 Assets held for sale 6,080 6,287 Loan to parent company 2,446 1,250 --------- --------- Total current assets 31,487 29,493 --------- --------- CONTRACT RECEIVABLE AND INVESTMENTS 1,799 2,419 --------- --------- PROPERTY, PLANT AND EQUIPMENT, AT COST Exposition equipment 3,017 2,712 Other 5,206 4,696 --------- --------- 8,223 7,408 Less - accumulated depreciation 3,188 2,824 --------- --------- 5,035 4,584 --------- --------- DEFERRED TAX ASSETS 1,144 732 --------- --------- INTANGIBLES AND OTHER ASSETS, NET 12,212 11,909 --------- --------- $ 51,677 $ 49,137 ========= ========
The accompanying notes are an integral part of these consolidated financial statements. 4 T/SF COMMUNICATIONS CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts)
MARCH 31 DECEMBER 31 1995 1994 -------- -------- (UNAUDITED) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 4,693 $ 4,388 Accrued liabilities 8,641 7,055 Deferred tax liabilities 1,063 823 Current portion of long-term debt 1,092 1,051 -------- -------- Total current liabilities 15,489 13,317 -------- -------- LONG-TERM DEBT, NET OF CURRENT PORTION 3,611 3,674 -------- -------- DEFERRED CONTRACT LIABILITES 2,021 2,179 -------- -------- STOCKHOLDERS' EQUITY: Preferred stock, $10 par value, 1,000 shares authorized, no shares issued and outstanding - - Common stock, $.10 par value, 10,000 shares authorized, 4,865 shares issued and outstanding 486 486 Additional paid-in capital 20,242 20,242 Retained earnings 9,828 9,239 -------- -------- Total stockholders' equity 30,556 29,967 -------- -------- $ 51,677 $ 49,137 ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 5 T/SF COMMUNICATIONS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts)
Three Months Ended March 31, ------------------ 1995 1994 ---- ---- (Unaudited) REVENUES Publishing $ 3,700 $ 3,198 Exposition services 5,827 3,904 Information services 4,246 4,071 Other operating income and interest 247 589 -------- -------- 14,020 11,762 -------- -------- COSTS AND EXPENSES Publishing 2,441 2,313 Exposition services 3,964 2,705 Information services 2,703 2,436 General and administrative 2,840 2,094 Interest 138 136 Depreciation and amortization 925 610 -------- -------- 13,011 10,294 -------- -------- INCOME BEFORE INCOME TAXES 1,009 1,468 PROVISION FOR INCOME TAXES ( 420 ) ( 637 ) -------- -------- NET INCOME $ 589 $ 831 ======== ======== PER SHARE AMOUNTS: Earnings per common and common equivalent share $ 0.12 $ 0.16 ======== ======== Cash dividends per common share $ - $ - ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 6 T/SF COMMUNICATIONS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Three Months Ended March 31, -------------------- 1995 1994 ---- ---- (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 589 $ 831 ------- ------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 925 610 Accretion of interest expense 14 8 (Gain) Loss on sale of property, plant and equipment 19 ( 4) Changes in assets and liabilities: Accounts receivable and refundable income taxes ( 2,566) ( 2,121) Inventories 147 16 Current contract receivable and other current assets ( 541) ( 184) Intangibles and other assets ( 396) 171 Accounts payable and accrued liabilities 1,806 1,225 Deferred income taxes ( 36) - ------- ------- Total adjustments ( 628) ( 279) ------- ------- Net cash provided by (used in) operating activities ( 39) 552 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Sale of short-term investments 1,000 - Capital expenditures ( 1,125) ( 493) Collections on contract receivable 1,438 760 Payments on deferred contract liabilities ( 222) ( 152) Net additions to investments ( 73) - Proceeds from the sale of property, plant and equipment 16 12 Payments for acquisitions, net of cash acquired - ( 1,114) ------- ------- Net cash provided by (used in) investing activities 1,034 ( 987) ------- -------
The accompanying notes are an integral part of these consolidated financial statements. 7 T/SF COMMUNICATIONS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued (In thousands)
Three Months Ended March 31, ------------------ 1995 1994 ---- ---- (Unaudited) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under bank lines-of-credit - 500 Principal payments of long-term debt ( 240) ( 695) Loan to parent company ( 1,165) - Issuance of common stock - 347 ------- ------ Net cash provided by (used in) financing activities ( 1,405) 152 ------- ------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 410) ( 283) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,311 2,633 ------ ----- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,901 $ 2,350 ====== =====
The accompanying notes are an integral part of these consolidated financial statements. 8 T/SF COMMUNICATIONS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------- For the Three Months Ended March 31, 1995 and 1994 1. Basis of Presentation The accompanying unaudited 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 Regulation S-X of the Securities and Exchange Commission. Accordingly, the financial statements do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for the three months ended March 31, 1995, are not necessarily indicative of the results to be expected for the year ending December 31, 1995. For further information, refer to the consolidated financial statements and related notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1994. 2. Common Stock and Earnings Per Share There were 4,864,818 and 5,298,718 weighted average shares of common stock issued and outstanding during the three months ended March 31, 1995 and 1994, respectively. 3. Income Taxes The income tax provisions for the three months ended March 31, 1995 and 1994, do not bear a normal relationship to the statutory federal income tax rate of 34% mainly as a result of amortization of goodwill related to acquisitions which is not deductible for income tax purposes. 4. Proposed Merger On January 25, 1995, the Company entered into an Agreement and Plan of Merger, as amended, with Tribune/Swab-Fox Companies, Inc. ("Tribune/Swab-Fox") whereby, subject to approval of each company's stockholders, Tribune/Swab-Fox will be merged with and into the Company. Tribune/Swab-Fox stockholders (other than the Company) will receive 0.1255 of a share of the Company's common stock or, if elected, and subject to certain limitations, $0.88 in cash, for each Tribune/Swab-Fox share. 5. Related Party Transactions Management and administrative services are provided by the Company's corporate staff to Tribune/Swab-Fox which, at March 31, 1995, owned 78% of the Company's outstanding common stock. The charge of $45,000 to Tribune/Swab-Fox in 1995 and $23,333 per month in 1994 for these services is based on an agreement between Tribune/Swab-Fox and the Company (which is subject to review again if the proposed merger is not approved by both companies' stockholders 9 at each of the Speacial Meeting of Stockholders on May 24, 1995), and is reflected in the accompanying statements of operations as a reduction of general and administrative expenses. In March, 1995, upon exercise of an option, the Company acquired 389,000 shares of Tribune/Swab-Fox Class A Common Stock from the Profit Sharing Plan and Trust of Tribune/Swab-Fox for $291,750, with a cash payment of $72,937 and a note payable for $218,813. The Company now owns 1,142,729 shares of Tribune/Swab-Fox. 6. Assets Held For Sale The Company's Board of Directors has approved for sale and the Company has engaged an investment banker to sell three of BMT Communications, Inc.'s trade journals. Accordingly, the net assets related to these trade journals are reflected as "Assets held for sale" in the balance sheets. Publishing revenues include approximately $2,930,000 and $2,615,000, related to the trade journals held for sale for the three months ended March 31, 1995 and 1994, respectively. ITEM 2. Management's Discussion and Analysis Of Financial Condition and Results ----------------------------------------------------------------------- Of Operations ------------- Results Of Operations - --------------------- Operations for the three months ended March 31, 1995, has the operations of Galaxy Registration, Inc. ("Galaxy") for three months whereas its operations are included in exposition services for only the one month in 1994 after the effective acquisition date of March 1, 1994. Revenues of $14,020,000 for the three months ended March 31, 1995, were $2,258,000 higher than for the same period ended March 31, 1994,. The revenue increase consists of $1,640,000 related to Galaxy as noted above, and a $510,000 increase in trade publishing advertising revenues of which $316,000 is attributable to the three trade journals being held for sale and $194,000 is attributable to International Gaming and Wagering Business. The information services revenue increase of $175,000 for the three months ended March 31, 1995, consists of increases in employment histories revenue, both higher volume and an increase in the price of employment histories in early 1994, volume increase in the criminal records product introduced in 1993, and an increase in MVR revenues (due mainly to higher average revenue per MVR resulting from a change in the MVR customer mix), offset by a $555,000 decrease during the three months ended March 31, 1995, in long distance telephone resale revenue as a result of the Company exiting this business during the latter part of the first quarter of 1994 due to competitive and regulatory considerations. Other operating income for the three months ended March 31, 1995, is lower than 1994 since a co-sponsored trade show for the convenience store industry occurred in April, 1995, whereas this trade show was held in March, 1994. Publishing costs and expenses were $128,000 higher for the three months ended March 31, 1995, as compared with the same period in 1994, which is related to the increase in 10 advertising pages in 1995. Exposition services costs and expenses increased during the three months ended March 31, 1995, mainly related to Galaxy. Information services costs and expenses were $267,000 higher for the three months ended March 31, 1995, as compared with 1994. The increase in costs related to new employment screening services which were commenced in mid-1994 and the increase in personnel and communications costs related to higher volumes, was partially offset by the decrease of approximately $470,000 for the three months ended March 31, 1995, related to long distance telephone resale costs because of exiting this business in the latter part of the first quarter of 1994. General and administrative expenses were $746,000 higher for the three months ended March 31, 1995, as compared with the same period in 1994. Galaxy general and administrative expenses were $703,000 higher in 1995 and each of the other divisions had small increases related to continued growth, whereas corporate expenses were approximately $100,000 lower for the three months in 1995. Interest expenses did not significantly change for the three months ended March 31, 1995, as compared with the same period in 1994, because higher interest rates on debt tied to the prime rate offset the reduction in interest related to principal payments on debt during the past year. Depreciation and amortization increased $315,000 for the three months ended March 31, 1995, as compared with the same period in 1994, substantially all related to Galaxy (both the number of months Galaxy was included in each year and depreciation related to Galaxy's 1994 and 1995 capital expenditures, which have a short depreciable life, to handle Galaxy's growth in 1994 and 1995. Provision for income taxes as a percent of income before income taxes is higher than the statutory federal income tax rate since goodwill amortization related to acquisitions is not deductible for income tax purposes. Financial Condition ------------------- The changes in the Company's financial condition during the three months ended March 31, 1995, are mainly seasonal changes related to the Company's exposition services and trade publishing operations. The increase in outstanding balance of the loan to parent company is under a short-term line-of-credit, details of which are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994. 11 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27 Financial data schedule. (b) Reports on Form 8-K No report on Form 8-K was filed during the quarter ended March 31, 1995. 12 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. T/SF COMMUNICATIONS CORPORATION (Registrant) Date: March 11, 1995 By: /s/ Howard G. Barnett, Jr. ------------------------------------ Howard G. Barnett, Jr., Chairman of the Board, Chief Executive Officer and President Date: March 11, 1995 By: /s/ J. Gary Mourton ------------------------------------ J. Gary Mourton, Senior Vice President-Finance and Chief Financial Officer 13 EXHIBIT INDEX The following exhibits are included as part of this quarterly report on Form 10-Q: 27. Financial data schedule. 14 EX-27 2 FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM QUARTER PAPER FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 3,901 1,000 11,665 565 449 31,487 8,223 3,188 51,576 15,388 3,611 486 0 0 30,556 51,576 13,773 14,020 9,108 12,873 0 0 138 1,009 420 589 0 0 0 589 0.12 0.12
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