<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the quarterly period ended June 30, 1996
Commission File No. 0-27994
----------
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
(Exact name of small business issuer as specified in its charter)
FLORIDA 59-3203301
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
186 N. INDUSTRIAL DRIVE
LAKE HELEN, FL 32744-0280
904-228-1000
(Address and telephone number
of principal executive offices)
Indicate by check mark whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 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:
X Yes No
---- ----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Class Outstanding at December 26, 1996
- --------------------------- --------------------------------
Common Stock: no par value 4,105,000
Transitional Small Business Disclosure Format (check one): Yes X No
--- ---
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB/A - JUNE 30, 1996
INDEX
Page
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Balance Sheets as of June 30, 1996 (unaudited)
and December 31, 1995 2
Statements of Income for the three and six months
ended June 30, 1996 and 1995 (unaudited) 3
Statements of Cash Flows for the six months ended
June 30, 1996 and 1995 (unaudited) 4 - 5
Notes to unaudited interim financial statements 6 - 8
ITEM 2. Management's Discussion and Analysis of Interim Financial
Condition and Results of Operations 8 - 12
PART II - OTHER INFORMATION
ITEM 5. Other Information 13
ITEM 6. Exhibits and Reports on Form 8-K
Exhibit 11 - Statement re computation of per share earnings
Exhibit 27 - Financial data schedule
1
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
BALANCE SHEETS
December 31, June 30,
1995 1996
------------ ------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $286,023 $1,044,987
Investments in U.S. Treasury securities --- 4,027,244
Accounts receivable, less allowance for doubtful
accounts of $37,755 at December 31, 1995,
and $243,951 at June 30, 1996 317,012 456,592
Securites available-for-sale 16,500 14,500
Directories in progress 87,618 26,133
Other current assets 16,747 22,260
------------ ------------
Total current assets 723,900 5,591,716
Property and equipment, net 169,200 249,772
Other assets --- 23,544
------------ ------------
Total assets $893,100 $5,865,032
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $73,085 $157,547
Accrued expenses --- 83,023
Deferred revenue 270,257 83,110
Income taxes payable --- 28,944
Deferred income taxes --- 59,525
------------ ------------
Total current liabilities 343,342 412,149
Promissory notes to shareholders,
including accrued interest --- 274,599
Deferred income taxes --- 19,000
Shareholders' equity:
Common shares, no par value: 15,000,000 shares
authorized; 2,925,000 issued and outstanding at
December 31, 1995; 4,105,000 issued and outstanding
at June 30, 1996 100 5,096,315
Unrealized loss on available-for-sale securities (17,520) (19,520)
Retained earnings 567,178 82,489
------------ ------------
Total shareholders' equity 549,758 5,159,284
------------ ------------
Total liabilities and shareholders' equity $893,100 $5,865,032
------------ ------------
------------ ------------
SEE ACCOMPANYING NOTES.
2
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
---------------------- -----------------------
1995 1996 1995 1996
-------- --------- -------- ----------
<S> <C> <C> <C> <C>
Net sales $502,714 $925,950 $591,948 $1,871,232
Cost and expenses:
Salaries and commissions 182,866 371,961 264,944 684,576
Materials and printing 66,278 136,860 77,169 263,944
Depreciation 8,415 18,473 12,964 35,409
Other operating costs 63,336 371,183 107,899 625,495
--------- --------- --------- ----------
320,895 898,477 462,976 1,609,424
--------- --------- --------- ----------
Income from operations 181,819 27,473 128,972 261,808
Other income (expense)
Interest expense --- (37,763) --- (57,338)
Other 806 (89) 1,886 6,488
--------- --------- --------- ----------
Income (loss) before provision
for income taxes 182,625 (10,379) 130,858 210,958
Provision for income taxes --- (2,931) --- 128,469
--------- --------- --------- ----------
Net income (loss) $182,625 $(7,448) $130,858 $82,489
--------- --------- --------- ----------
--------- --------- --------- ----------
Net income (loss) per share --- $0.00 --- $0.03
--------- --------- --------- ----------
--------- --------- --------- ----------
Shares used in computation of
net income (loss) per share --- 3,526,022 --- 3,242,055
--------- --------- --------- ----------
--------- --------- --------- ----------
Pro forma data:
Net income (loss) before
provision for income taxes $182,625 $(10,379) $130,858 $210,958
Pro forma provision for
income taxes 68,833 (2,931) 49,353 80,359
--------- --------- --------- ----------
Pro forma net income (loss) $113,792 $(7,448) $81,505 $130,599
--------- --------- --------- ----------
--------- --------- --------- ----------
Pro forma net income (loss) per share $0.04 $0.00 $0.03 $0.04
--------- --------- --------- ----------
--------- --------- --------- ----------
Shares used in computation of pro
forma net income (loss) per share 2,955,000 3,526,022 2,955,000 3,242,055
--------- --------- --------- ----------
--------- --------- --------- ----------
</TABLE>
SEE ACCOMPANYING NOTES.
3
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Six Months ended June 30
1995 1996
------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 130,858 $ 82,489
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 12,964 35,409
Bad debt expense 23,726 212,658
Provision for deferred income taxes --- 78,525
Exchange of advertising for machinery & equipment (3,990) (11,938)
Accretion of bridge notes --- 77,778
Interest accrued on promissory notes to shareholders --- 6,292
Interest accrued on U.S. Treasury securities --- (15,381)
Increase in accounts receivable (34,811) (335,776)
(Increase) decrease in directories in progress (41,034) 61,485
(Increase) decrease in other assets 10,525 (29,057)
Increase in accounts payable 12,335 84,462
Increase in accrued expenses --- 83,023
Increase (decrease) in deferred revenue 122,489 (187,147)
Increase in income taxes payable --- 28,944
---------- -----------
Net cash provided by operating activities 233,062 171,766
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available-for-sale (67,860) ---
Purchases of U.S. Treasury securities --- (4,011,863)
Purchases of property and equipment (28,006) (120,505)
---------- -----------
Net cash used in investing activities (95,866) (4,132,368)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of shareholder advances (13,610) ---
Distributions to shareholders (48,004) (178,871)
Net proceeds from initial public offering of common shares --- 4,898,437
---------- -----------
Net cash (used in) provided by financing activities (61,614) 4,719,566
Net increase in cash and cash equivalents 75,582 758,964
Cash and cash equivalents at beginning of period 15,524 286,023
---------- -----------
Cash and cash equivalents at end of period $ 91,106 $ 1,044,987
---------- -----------
---------- -----------
</TABLE>
SEE ACCOMPANYING NOTES.
4
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Six Months ended June 30
1995 1996
----------------------------
<S> <C> <C>
SUPPLEMENTAL CASH FLOW INFORMATION
Exchange of advertising for supplies $ 8,032 $ ---
----------------------------
----------------------------
Interest paid $ --- $ 4,932
----------------------------
----------------------------
Income taxes paid $ --- $ 21,000
----------------------------
----------------------------
Distribution to shareholders in exchange for promissory notes $ --- $ 268,307
----------------------------
----------------------------
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB/A - JUNE 30, 1996
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of The Publishing
Company of North America, Inc. (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item
310(b) of Regulation S-B. Accordingly, they do not include all 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 in the accompanying
unaudited financial statements. The results of operations of any interim
period are not necessarily indicative of the results of operations for the
fiscal year. For further information, refer to the financial statements and
footnotes thereto included in the Company's registration statement on Form
SB-2 relating to the Company's initial public offering of its common stock
which was made effective on May 17, 1996.
As of June 30, 1996 retained earnings of $120,000 were re-classified as
paid-in capital in order to accurately state the amount of paid-in capital.
2. CASH AND CASH EQUIVALENTS
The Company considers all highly-liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
3. ACCOUNTS RECEIVABLE
Accounts receivable are comprised primarily of amounts due from
advertisers in the bar association directories. Late in the quarter ended
September 30, 1996 the Company discovered that the computer-based custom
database system upon which the Company has relied for tracking sales and
receivables had included as part of the receivables total at June 30, 1996
approximately $42,000 in pre-payment discounts earned and taken. Of this
amount, approximately $8,000 belonged in the most recent quarter, $13,000
belonged in the immediately preceding quarter, and the remaining $21,000
related to the prior year. The Company also discovered $126,000 of
pre-payment discounts taken which were unearned, which had been reported as
part of the receivables total, and which did not appear as due on an
account-by-account basis by the computer-based custom database system.
Management considered that the unearned discounts were owed to the Company
and considered its options regarding the pursuit of collection of those
monies. Due to the aging of many of these accounts and because management
believes that enforcing collection at this time may result in a reduction of
future renewal revenues significantly in excess of the potential cash
receipts, the Company has provided for a full reserve of these amounts at
June 30, 1996. This discovery is the reason the Company decided to file this
Form 10-QSB/A for the period ended June 30, 1996. The Company believes all
adjustments necessary are being made in this amended quarterly report and the
report filed on November 19 for the quarter ended September 30, 1996. Also,
the Company reviewed the aging of all accounts receivable at June 30, 1996
and concluded that an additional allowance of $70,000 should be provided. Of
this amount, $48,000 related to the quarter ended June 30, 1996 and $22,000
related to the quarter ended March 31, 1996.
6
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB/A - JUNE 30, 1996
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
4. REVENUE RECOGNITION
Revenues and related costs are recorded by the Company upon shipment of
directories. Costs accumulated under directories in progress are stated at
estimated costs, not in excess of estimated realizable value. Deferred
revenue represents amounts received from advertisers prior to shipment of the
related directories.
5. INCOME TAXES
Until January 1, 1996 the Company elected by consent of its shareholders
to be taxed under the provisions of Subchapter S of the Internal Revenue
Code. Under those provisions, the Company did not pay federal corporate
income taxes on its taxable income; instead, the shareholders were liable for
individual federal income taxes on the Company's taxable income. In March,
1996 the Company terminated its S Corporation status effective January 1,
1996 and thereafter will be taxed as a C Corporation. Accordingly, a
deferred tax liability of $48,110 was recognized and charged to income as of
January 1, 1996; this charge relates directly to the conversion and is in
addition to the taxes otherwise due for 1996 income. In March, 1996 the
Company made a distribution of $178,871 to existing shareholders for
estimated federal income taxes due on 1995 S Corporation income and the
Company issued $268,307 of notes payable to existing shareholders for S
Corporation earnings not previously declared as dividends during 1995. These
notes were paid in July, 1996. Pro forma income tax adjustments had the
Company been a C corporation for all periods presented are provided in the
accompanying financial statements.
6. NET INCOME PER SHARE
Net income per share and pro forma net income per share are computed
based on the weighted average number of common shares and common stock
options using the treasury stock method. In accordance with the Securities
and Exchange Commission requirements, common and common equivalent shares
issued by the Company at prices below the public offering price during the
12-month period prior to the date of the initial public offering on May 17,
1996 have been included in the calculation as if they were outstanding for
all periods prior to the offering using the treasury stock method and the
initial public offering price.
Historical net income per share is not considered meaningful for the
periods ended prior to January 1, 1996 due to the Company's S Corporation
status; accordingly, such per share information is not presented for such
periods. Pro forma net income per share is provided to show the effect on
the historical financial information had the Company operated as a C
Corporation since inception and excludes the $48,110 charge to income in
connection with the termination of its S Corporation status on January 1,
1996.
7. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles require management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
7
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB/A - JUNE 30, 1996
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
8. INITIAL PUBLIC OFFERING OF THE COMPANY'S COMMON STOCK
Pursuant to a registration statement on Form SB-2 with the Securities
and Exchange Commission, on May 17, 1996 the Company's common stock commenced
trading on the NASDAQ National Market System under the symbol PCNA. Gross
proceeds of $6,325,000 were raised from the sale of 1,150,000 shares at $5.50
per share. Net proceeds to the Company after paying all related costs of the
offering were approximately $4,900,000.
8. SUBSEQUENT EVENTS
In September, 1996 the Company purchased for approximately $900,000 land
and a building in Lake Helen, Florida, for use as its corporate headquarters.
Modifications to improve the property's usefulness to the Company are
expected to raise the investment to approximately $1,025,000. The Company
has received a loan commitment and is scheduled to close on a mortgage not to
exceed $800,000 in December, 1996.
Effective July 1, 1996 the Company entered into a lease for rental of
approximately 7,250 square feet of office space in Orlando, Florida. The
lease is for 36 months and calls for estimated rent payments over the life of
the lease of approximately $282,000 before sales tax.
In July, 1996 the Company elected to retire the $268,307 of notes
payable plus accrued interest to existing shareholders representing 1995 S
Corporation earnings not previously paid as dividends. This amount included
payments which aggregated to $178,795 to the President and Executive Vice
President of the Company. The Company pre-paid these notes because their
interest expense was greater than the investment income the Company could
have reasonably earned on the funds used to retire the notes.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
INTERIM FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
Total revenues for the three and six month periods ended June 30, 1996
were $925,950 and $1,871,232, respectively, compared to $502,714 and
$591,948, respectively, for the same periods in 1995. This represents an 84%
and 216% increase in revenues from 1995 to 1996 for the respective three and
six month periods. This increase in revenues is a result of several factors.
In the three and six month periods ended June 30, 1996 the Company published
13 and 27 directories, respectively, compared to 9 and 12 for the same
periods in 1995. An increase in the average revenues per directory was a
second factor. A third factor was the 1996 revenues from the publication of
a bar association newsletter and the Company's Internet operations, neither
of which had revenues in 1995.
For the three and six months ended June 30, 1996 salaries and
commissions were 40% and 37% of revenues as compared to 36% and 45% for the
same periods a year earlier. In early July of this year, the Company opened
a sales office in Orlando, Florida. Since nearly all employees in that
office are new
8
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB/A - JUNE 30, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS
hires, the revenues produced by these new hires is initially lower and the
ratio of salary expense to revenues may be expected to be negatively impacted
in the latter half of 1996. The addition of this sales office is considered
necessary for the Company to be able to adequately sell advertising for an
increasing number of directories which the Company expects to publish. The
Company believes it may be able to improve sales and in-house production
efficiencies through certain industry-specific computer-based systems and is
currently evaluating investments in such.
The Company's costs to print directories, which includes primarily
materials, printing, and binding, were 13% of revenues in the three and six
month periods ended June 30, 1995. For the same respective periods in 1996,
these costs rose to 15% and 14%. In order to meet publication deadlines
during the second half of 1996, the Company has had to contract some of the
production to sources which had the productive capacity but which were more
expensive. The Company expects that materials and printing costs for the
balance of 1996 will be higher than 1995's level of 13% of directory revenues.
Operating costs other than materials and printing, salaries and
commissions, and depreciation increased to $371,183 (40% of revenues) for the
three months ended June 30, 1996 from $63,336 (13% of revenues) for the same
period in 1995. The most significant factor in the increase in these
operating costs were adjustments to the Company's estimates for bad debt
allowances and its recognition of pre-payment discounts taken. During the
quarter ended September 30, 1996 the Company discovered that the
computer-based custom database system upon which the Company has relied for
tracking sales and receivables had included as part of the receivables total
at June 30, 1996 approximately $42,000 in pre-payment discounts earned and
taken. Of this amount, approximately $8,000 belonged in the quarter ended
June 30, 1996 and the remaining $34,000 related to prior periods. The
Company also discovered $126,000 of pre-payment discounts taken which were
unearned, which had been reported as part of the receivables total, and which
did not appear as due on an account-by-account basis by the computer-based
custom database system. While management considers that the unearned
discounts are owed to the Company, due to the aging of many of these accounts
and because management believes that enforcing collection at this time may
result in a reduction of future renewal revenues significantly in excess of
the potential cash receipts, the Company has provided for a full reserve of
these amounts at this time. Primarily for the reasons cited above, the
Company increased its allowance for doubtful accounts. Operating costs as
defined above included bad debt expense of $154,000 for the most recent
quarter; this is 41% of the total of these operating costs for the period.
This discovery is the reason the Company decided to amend this Form 10-QSB
for the period ended June 30, 1996. The Company believes all adjustments
necessary are being made in this amended quarterly report and the report
filed on November 19 for the quarter ended September 30, 1996. In response
to these matters, the Company has implemented a number of actions to detect
unearned discounts and problem receivables much earlier so that timely
corrective action can be taken to reduce future reserve requirements.
Many of the costs which the Company has incurred and will incur in the
second half of this year will not result in an immediately proportionate
growth in revenue. This is due to the time between the expenditure and the
recognition of revenues from publications advertising which results from that
expenditure. There is a minimum of several months, for example, between the
time a salesperson is hired and any sales of advertising by that person will
be recognized as revenue upon the shipment of a directory containing that
advertising.
9
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB/A - JUNE 30, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS
During the second half of 1996, there generally has been a decrease in
the time between the commencement of advertising sales and the date of
publication. The primary factors which have caused this are an increasing
backlog in the number of directories to be published, the publication dates
which are sometimes mandated by a bar association, and the Company's desire
to realize growth in revenues through an increase in the number of
directories published. When the time between the commencement of advertising
sales and directory publication is reduced, there often is a trade-off
between maximizing the time for the selling of advertising and leaving
adequate time to produce the directory by the date scheduled. As a result,
the Company has sometimes curtailed revenues for a directory in the interest
of meeting the publication date; in these cases, the relatively fixed
production costs are higher as a percentage of the curtailed revenues.
Another factor which has affected the Company's expenses when expressed
as a percentage of revenues is the negative impact upon revenues when a
publication dates slip from one reporting period (quarter) into the next.
This has happened when a bar association for whatever reason does not
complete its submission and proofing of association data in the
non-advertising section of the directory on a timely basis; it also has
happened when the Company's in-house or outsourced production resources have
been unable to meet production times in order to meet intended deadlines. As
a result, the Company has found it more difficult in the latter half of 1996
to complete publications in the intended period; accordingly, meeting future
revenue objectives on a quarter-by-quarter basis has become more difficult to
predict. Whenever future revenues for a quarter are negatively impacted
either through curtailment of sales in order to meet deadlines or through
being unable to recognize the revenues in the intended period, expenses as a
percentage of revenues for that period can be expected to be higher.
The Company may incur a loss for the year ended December 31, 1996.
Results of operations for the quarter then ended are uncertain and will be
affected by proofing turn-around times by the bar associations, limited
selling times due to publication deadlines, and the impact of holiday
schedules upon the production capacity of the Company's third-party printers
and other suppliers. The Company maintains a strong backlog of contracts; in
fact, this strong backlog contributes to the Company's difficulty in
increasing revenues per directory due to scheduled deadlines.
Deferred revenue, which represents amounts received from advertisers
prior to shipment of the related directories, decreased $187,147 from
$270,257 at December 31, 1995 to $83,110 at June 30, 1996. This was the
result of the Company's increased contract base which required sales of
advertising to continue later into the period and closer to the actual
publication date. Directories in progress, which represents costs accumulated
for directories unpublished at the end of the period, decreased $61,485 from
$87,618 at December 31, 1995 to $26,133 at June 30, 1996 for the same reason.
In March, 1996 the Company borrowed $300,000 through the private
placement of units consisting of an aggregate $300,000 principal amount of
Bridge Notes and an aggregate of 30,000 shares of common stock. The amount
of the Bridge Notes was reduced and shareholders' equity increased by
$77,778, representing the original issue discount based on an estimated fair
value of $3.50 per share of common stock. This resulted in a charge as
interest expense of $57,778 and $77,778 for the three and six months ended
June 30, 1996. In addition, the Company retired the Bridge Notes in late May
of this year and paid $4,932 in accrued interest.
10
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB/A - JUNE 30, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
On May 17, 1996 the Company's common stock commenced trading on the
NASDAQ National Market System under the symbol PCNA. This initial public
offering raised $6,325,000 in gross proceeds from the sale of 1,150,000
shares at $5.50 per share. Net proceeds to the Company after paying all
related costs of the offering were approximately $4,900,000.
From the net proceeds the Company paid approximately $305,000 to retire
the Bridge Notes and accrued interest from its private placement made in
March, 1996. At June 30, 1996 the Company had investments of approximately
$4,000,000 in U.S. Treasury securities and approximately $1,045,000 in cash
and cash equivalents.
Net cash provided by operations was $171,766 for the six months ended
June 30, 1996 compared to $233,062 for the same period a year earlier. The
most significant reasons for the decrease in 1996 from 1995 was the decrease
in deferred revenue and the increase in accounts receivable in 1996 compared
to 1995. The decrease in deferred revenue was explained above under Results
of Operations. Accounts receivable increased in 1996 due to a higher level
of revenues and due to a greater portion of the related shipments occurring
late in the period.
At June 30, 1996 the Company had no debt other than $268,307 of notes
payable to existing shareholders for S Corporation earnings not previously
declared as dividends during 1995. These notes and accrued interest of
$6,763 were paid in July of this year.
The Company has received a loan commitment and is scheduled to close in
December, 1996 on a mortgage not to exceed $800,000 for the land and building
which it purchased in September of this year.
The Company has no commitments at this time to acquire a material amount
of capital assets.
Based on current cash and investment balances and the Company's
anticipated results of future operations, the Company believes that it has
sufficient cash resources to fund its operations for the next twelve months
or more.
FORWARD-LOOKING STATEMENTS
The statements made above relating to the increased number of
directories which the Company expects to publish, the Company's ability to
improve sales and in-house production efficiencies through industry-specific
computer-based systems, anticipated materials and printing costs for the
balance of 1996, the Company's ability to reduce future reserve requirements
for bad debt as a result of actions being taken, the Company's ability to
meet publication schedules and plan revenues on a quarterly basis, the
increase in anticipated expenses as a percentage of revenues, the Company's
results of operations for the quarter and year ended December 31, 1996, and
the closing of mortgage financing are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The results anticipated by any or all of
these forward-looking statements may not occur. Important factors that may
cause actual results to differ materially from the forward-looking statements
include the following: (1) the Company's ability to find a suitable
computer-based system; (2) the Company's ability to successfully install
and implement a computer-based system; (3) unanticipated increases in
third-party printing costs as a result of increases in labor or paper costs;
(4) the Company's ability to continue to sell sufficient advertising per
directory published in order to maintain the same
11
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB/A - JUNE 30, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS
percentages of materials and printing costs to directory revenues; (5)
unplanned postponement of the shipment of directories due to factors over
which the Company has no control; (6) unanticipated changes in the
financial markets, contract issues, or environmental concerns that affect
mortgage financing; and (7) unanticipated cancellation by bar associations
of existing contracts to publish directories.
12
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB/A - JUNE 30, 1996
PART II - OTHER INFORMATION
ITEM 5. Other Information
Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
a. Exhibits
1. Exhibit 11 - Statement re computation of per share earnings
2. Exhibit 27 - Financial Data Schedule
b. No reports on Form 8-K were filed during the quarter ended June 30,
1996.
13
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB/A - JUNE 30, 1996
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf on December 30,
1996 by the undersigned, thereunto duly authorized.
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
/s/ Peter S. Balise
-----------------------------------
President (Chief Executive Officer)
/s/ James M. Koller
-----------------------------------
Chief Financial Officer (Principal
Financial and Accounting Officer)
14
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB/A - JUNE 30, 1996
EXHIBITS
ITEM 6. Exhibits and Reports on Form 8-K
a. Exhibits
1. Exhibit 11 - Statement re computation of per share earnings
<TABLE>
<CAPTION>
Three Six
months months
ended ended
June June
Primary 30, 1996 30, 1996
---------- ----------
<S> <C> <C>
Average shares outstanding 3,513,945 3,236,017
Net effect of dilutive stock options
based on the treasury stock method
using the average market price 12,077 6,038
---------- ----------
Total 3,526,022 3,242,055
---------- ----------
---------- ----------
Net income (loss) $(7,448) $82,489
---------- ----------
---------- ----------
Per share amount $0.00 $0.03
---------- ----------
---------- ----------
Fully-diluted
Average shares outstanding 3,513,945 3,236,017
Net effect of dilutive stock options
based on the treasury stock method
using the market price at end of period 12,564 6,282
---------- ----------
Total 3,526,509 3,242,299
---------- ----------
---------- ----------
Net income (loss) $(7,448) $82,489
---------- ----------
---------- ----------
Per share amount $0.00 $0.03
---------- ----------
---------- ----------
</TABLE>
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 1,044,987
<SECURITIES> 4,041,744
<RECEIVABLES> 700,544
<ALLOWANCES> (243,951)
<INVENTORY> 0
<CURRENT-ASSETS> 5,591,716
<PP&E> 285,181
<DEPRECIATION> 35,409
<TOTAL-ASSETS> 5,865,032
<CURRENT-LIABILITIES> 412,149
<BONDS> 0
0
0
<COMMON> 5,096,315
<OTHER-SE> 62,969
<TOTAL-LIABILITY-AND-EQUITY> 5,159,284
<SALES> 1,798,535
<TOTAL-REVENUES> 1,871,232
<CGS> (263,944)
<TOTAL-COSTS> (1,345,480)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (57,338)
<INCOME-PRETAX> 210,958
<INCOME-TAX> 128,469
<INCOME-CONTINUING> 82,489
<DISCONTINUED> 0
<EXTRAORDINARY> 6,488
<CHANGES> 0
<NET-INCOME> 82,489
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
</TABLE>
