-----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, NN5ZKZ2strvLZTJ1CJ0R6g1rUFH+ZXVTi6Fr9rlyd4yzs2kQTRn3r71b+3Erc24M SA/GMazL6jNPtRHPGKQg6g== 0000884382-98-000007.txt : 19980901 0000884382-98-000007.hdr.sgml : 19980901 ACCESSION NUMBER: 0000884382-98-000007 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980814 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980831 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMEDIA INC CENTRAL INDEX KEY: 0000884382 STANDARD INDUSTRIAL CLASSIFICATION: PERIODICALS: PUBLISHING OR PUBLISHING AND PRINTING [2721] IRS NUMBER: 133647573 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11106 FILM NUMBER: 98701454 BUSINESS ADDRESS: STREET 1: 745 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10151 BUSINESS PHONE: 2127450100 MAIL ADDRESS: STREET 1: 745 5TH AVE CITY: NEW YORK STATE: NY ZIP: 10151 FORMER COMPANY: FORMER CONFORMED NAME: K III COMMUNICATIONS CORP DATE OF NAME CHANGE: 19930328 8-K 1 PRIMEDIA INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 14, 1998 PRIMEDIA Inc. - ------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 1-11106 13-3647573 - ------------------------------------------------------------------------ (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification No.) 745 Fifth Avenue, New York, New York 10151 - ------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 745-0100 --------------- 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (a) On August 14, 1998, PRIMEDIA Holdings III Inc. ("Seller"), a wholly-owned subsidiary of PRIMEDIA Inc. ("Company"), sold the stock of the Daily Racing Form, Inc. ("DRF"), and its two wholly-owned subsidiaries, DRF Finance, Inc. and Daily Racing Form of Canada, Ltd. (DRF, together with its subsidiaries, "The Daily Racing Form") to DRF Acquisition LLC. The total consideration received by Seller for The Daily Racing Form was $40,125,000. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (b) Pro forma financial information. -------------------------------- An introduction to the pro forma consolidated financial statements is attached as page 3. The unaudited pro forma statements of consolidated operations for the six months ended June 30, 1998 and for the year ended December 31, 1997 and an unaudited pro forma consolidated balance sheet at June 30, 1998, along with a description of all pro forma adjustments, are attached as pages 4 through 7. 3 UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA The unaudited pro forma statements of consolidated operations for the six months ended June 30, 1998 and for the year ended December 31, 1997 give effect to the disposition of The Daily Racing Form as if it had occurred on January 1, 1997. The unaudited pro forma consolidated balance sheet at June 30, 1998 gives effect to the disposition of The Daily Racing Form as if it had occurred on June 30, 1998. The Company believes the accounting used for the pro forma adjustments provides a reasonable basis on which to present the pro forma consolidated financial data. The pro forma statements of consolidated operations and pro forma consolidated balance sheet are unaudited and were derived by adjusting the historical consolidated financial statements of the Company. THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS ARE PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED TO BE INDICATIVE OF THE COMPANY'S CONSOLIDATED RESULTS OF OPERATIONS OR CONSOLIDATED FINANCIAL POSITION HAD THE TRANSACTION BEEN CONSUMMATED ON THE DATES ASSUMED AND DO NOT PROJECT THE COMPANY'S CONSOLIDATED RESULTS OF OPERATIONS OR CONSOLIDATED FINANCIAL POSITION FOR ANY FUTURE DATE OR PERIOD. The unaudited pro forma consolidated financial statements and accompanying notes thereto should be read in conjunction with the historical consolidated financial statements of the Company and the notes thereto included elsewhere in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 and in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. 4 PRIMEDIA INC. AND SUBSIDIARIES UNAUDITED PRO FORMA STATEMENT OF CONSOLIDATED OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 (dollars in thousands, except per share amounts)
Pro Forma Pro Forma Historical Adjustments Consolidated ------------ -------------- ---------------- Sales, net: Specialty Magazines $ 441,574 $ $ 441,574 Education 143,466 143,466 Information 149,996 (26,557) (1) 123,439 ---------- --------- ------------- Total sales, net 735,036 (26,557) 708,479 Operating costs and expenses: Cost of goods sold 170,624 (7,457) (1) 163,167 Marketing and selling 130,861 (773) (1) 130,088 Distribution, circulation and fulfillment 128,710 (3,761) (1) 124,949 Editorial 70,338 (4,692) (1) 65,646 Other general expenses 76,696 (6,007) (1) 70,689 Corporate administrative expenses 13,222 13,222 Depreciation and amortization of prepublication costs, property and equipment 19,011 19,011 Gain on the sale of business, net and other (1,849) (1,849) Amortization of intangible assets, excess of purchase price over net assets acquired and other 74,727 74,727 ---------- --------- ------------- Operating income (loss) 52,696 (3,867) 48,829 Other income (expense): Interest expense (67,792) 1,431 (2) (66,361) Amortization of deferred financing costs (1,585) (1,585) Other, net (276) (276) ---------- --------- ------------- Net loss (16,957) (2,436) (19,393) Preferred stock dividends: Cash (27,546) (27,546) Series B Preferred Stock redemption premium (9,141) (9,141) ---------- --------- ------------- Loss applicable to common shareholders $ (53,644) $ (2,436) $ (56,080) ========== ========= ============= Pro forma basic and diluted loss applicable to common shareholders per common share $ (.40) ============= Pro forma basic and diluted common shares outstanding 140,173,171 =============
See notes to unaudited pro forma consolidated financial data. 5 PRIMEDIA INC. AND SUBSIDIARIES UNAUDITED PRO FORMA STATEMENT OF CONSOLIDATED OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (dollars in thousands, except per share amounts)
Pro Forma Pro Forma Historical Adjustments Consolidated ------------- --------------- --------------- Sales, net (4): Specialty Magazines $ 759,591 $ $ 759,591 Education 434,160 434,160 Information 293,844 (56,399)(1) 237,445 ------------- --------------- --------------- Total sales, net 1,487,595 (56,399) 1,431,196 Operating costs and expenses: Cost of goods sold 341,879 (15,204) (1) 326,675 Marketing and selling 271,351 (2,182) (1) 269,169 Distribution, circulation and fulfillment 262,151 (7,939) (1) 254,212 Editorial 120,952 (11,713) (1) 109,239 Other general expenses 163,705 (12,725) (1) 150,980 Corporate administrative expenses 25,545 25,545 Depreciation and amortization of prepublication costs, property and equipment 37,334 (460) (1) 36,874 Provision for loss on the sales of businesses and other, net 138,640 (122,670) (1) 15,970 Amortization of intangible assets, excess of purchase price over net assets acquired and other 146,831 (1,247) (1) 145,584 ------------- --------------- --------------- Operating income (loss) (20,793) 117,741 96,948 Other income (expense): Interest expense (136,625) 3,152 (2) (133,473) Amortization of deferred financing costs (3,071) (3,071) Other, net 1,365 1,365 ------------- --------------- --------------- Income (loss) before income tax benefit and extraordinary charge (159,124) 120,893 (38,231) Income tax benefit - carryback claim 1,685 1,685 ------------- --------------- --------------- Income (loss) before extraordinary charge (157,439) 120,893 (36,546) Extraordinary charge - extinguishment of debt (15,401) 15,401 (3) - ------------- --------------- --------------- Net income (loss) (172,840) 136,294 (36,546) Preferred stock dividends: Cash (45,305) (45,305) Non-cash dividends in kind (4,451) (4,451) Senior Preferred Stock redemption premium (5,800) (5,800) Dividend accrual (9,517) (9,517) ------------- --------------- --------------- Income (loss) applicable to common shareholders $ (237,913) $ 136,294 $ (101,619) ============= =============== =============== Pro forma basic and diluted loss applicable to common shareholders per common share $ (.79) =============== Pro forma basic and diluted common shares outstanding 129,304,900 ===============
See notes to unaudited pro forma consolidated financial data. 6 PRIMEDIA INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AT JUNE 30, 1998 (dollars in thousands)
Pro Forma Pro Forma ASSETS Historical Adjustments Consolidated ------------- ---------------- --------------- Current assets: Cash and cash equivalents $ 20,863 $ $ 20,863 Accounts receivable, net 206,211 206,211 Inventories, net 36,786 36,786 Net assets held for sale 23,900 (23,900) (1) - Prepaid expenses and other 38,489 38,489 ------------- -------------- --------------- Total current assets 326,249 (23,900) 302,349 Property and equipment, net 121,135 121,135 Other intangible assets, net 781,792 781,792 Excess of purchase price over net assets acquired, net 1,261,008 1,261,008 Deferred income tax asset, net 176,200 176,200 Other non-current assets 112,824 112,824 ------------- -------------- --------------- $ 2,779,208 $ (23,900) $ 2,755,308 ============= ============== =============== LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) Current liabilities: Accounts payable $ 76,832 $ $ 76,832 Accrued interest payable 21,462 21,462 Accrued expenses and other 201,615 201,615 Deferred revenues 170,506 170,506 Current maturities of long-term debt 22,167 22,167 ------------- --------------- Total current liabilities 492,582 492,582 ------------- --------------- Long-term debt 1,689,526 (40,125) (2) 1,649,401 ------------- -------------- --------------- Other non-current liabilities 61,637 61,637 ------------- --------------- Exchangeable preferred stock 557,448 557,448 ------------- --------------- Common stock subject to redemption 4,274 4,274 ------------- --------------- Shareholders' equity (deficiency): Common stock 1,451 1,451 Additional paid-in capital 978,215 978,215 Accumulated deficit (982,655) 16,225 (5) (966,430) Accumulated other comprehensive loss (1,557) (1,557) Common stock in treasury, at cost (21,713) (21,713) ------------- -------------- --------------- Total shareholders' equity (deficiency) (26,259) 16,225 (10,034) ------------- -------------- --------------- $ 2,779,208 $ (23,900) $ 2,755,308 ============= ============== ===============
See notes to unaudited pro forma consolidated financial data. 7 Notes to Unaudited Pro Forma Consolidated Financial Data (dollars in thousands) (1) Represents the elimination of the results of operations and financial position of The Daily Racing Form. (2) Reflects the reduction in long-term debt and related interest expense as a result of the reduced level of borrowings under the bank credit facilities from the application of the proceeds on the disposition of The Daily Racing Form. The adjustments to interest expense reflect weighted average interest rates of 6.83% and 7.11% for the six months ended June 30, 1998 and for the year ended December 31, 1997, respectively. (3) Reflects the elimination of the extraordinary charge on the extinguishment of debt. (4) In the first quarter of 1998, the Company reclassified certain businesses from the information segment to the education and specialty magazines segments. Accordingly, sales for the year ended December 31, 1997 have been restated to reflect the new classifications. (5) Reflects the excess of the proceeds over the carrying value of The Daily Racing Form. 8 SIGNATURE --------- 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. PRIMEDIA Inc. (Registrant) Date: August 31, 1998 /s/ Beverly C. Chell --------------- ---------------------------------- (Signature) Vice Chairman, Secretary and Director -----END PRIVACY-ENHANCED MESSAGE-----