U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the quarterly period ended September 30, 1997
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 P.C.N.A. Parkway
Lake Helen, FL 32744
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 September 30, 1997
- --------------------------- ---------------------------------
Common Stock: no par value 4,869,900
Transitional Small Business Disclosure Format (check one): |_| Yes |X| No
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
INDEX
Page
PART I - FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
Consolidated Balance Sheets as of September 30, 1997
(unaudited) and December 31, 1996 3
Consolidated Statements of Operations for the three
and nine months ended September 30, 1997 and 1996
(unaudited) 4
Consolidated Statements of Cash Flows for the nine
months ended September 30, 1997 and 1996 (unaudited) 5 - 6
Notes to unaudited interim consolidated financial
statements 7 - 9
ITEM 2. Management's Discussion and Analysis of Interim Financial
Condition and Results of Operations 10 - 13
PART II - OTHER INFORMATION
ITEM 5. Other Information 14
ITEM 6. Exhibits and Reports on Form 8-K 14
a. Exhibit 11 - Statement re computation of per
share earnings
Exhibit 27 - Financial data schedule
b. Reports on Form 8-K
2
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
-----------------------------
Assets (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,716,545 $ 1,760,831
Available-for-sale securities 2,004,847 2,477,500
Accounts receivable, less allowance for doubtful
accounts of $612,268 at September 30, 1997
and $267,787 at December 31, 1996 536,524 228,997
Directories in progress 840,176 144,823
Refundable income taxes 72,068 72,068
Other current assets 93,685 17,544
-----------------------------
Total current assets 5,263,845 4,701,763
Property and equipment, net 1,483,582 1,329,783
Goodwill, net of amoritzation 1,892,317 --
Other assets 105,081 66,417
-----------------------------
Total assets $ 8,744,825 $ 6,097,963
=============================
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 438,427 $ 234,334
Accrued expenses 832,845 205,670
Capitalized leases 3,078 --
Deferred revenue 1,553,727 460,434
Line of credit 450,000 --
Mortgage payable 53,333 48,889
-----------------------------
Total current liabilities 3,331,410 949,327
Capitalized leases payable after one year 6,500 --
Mortgage payable after one year 706,667 751,111
-----------------------------
Total liabilities 4,044,577 1,700,438
Shareholders' equity:
Common shares, no par value:
15,000,000 shares authorized; 4,869,900 shares
issued and outstanding at Sept. 30, 1997; 4,114,000
issued and outstanding at December 31, 1996 5,834,698 5,137,565
Unrealized loss on available-for-sale securities (19,942) (13,024)
Accumulated deficit (1,096,904) (691,495)
Unearned compensation, net (17,604) (35,521)
-----------------------------
Total shareholders' equity 4,700,248 4,397,525
-----------------------------
Total liabilities and shareholders' equity $ 8,744,825 $ 6,097,963
=============================
</TABLE>
See accompanying notes.
3
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1997 1996 1997 1996
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Net sales $ 2,286,564 $ 441,574 $ 5,344,657 $ 2,312,806
Costs and expenses:
Production 709,170 185,859 1,497,153 587,527
Marketing and selling 1,162,574 358,202 2,335,417 938,997
Depreciation and amortization 74,173 25,325 155,876 60,734
General and administrative 825,450 442,857 1,872,085 1,034,409
----------------------------- -----------------------------
2,771,367 1,012,243 5,860,531 2,621,667
----------------------------- -----------------------------
Loss from operations (484,803) (570,669) (515,874) (308,861)
Other income
Interest income, net 49,625 59,541 110,465 2,203
Other 0 0 0 6,488
----------------------------- -----------------------------
Loss before provision
for income taxes (435,178) (511,128) (405,409) (300,170)
Provision for income taxes 0 (191,631) 0 (63,162)
----------------------------- -----------------------------
Net loss ($ 435,178) ($ 319,497) ($ 405,409) ($ 237,008)
============================= =============================
Net loss per share ($ 0.09) ($ 0.08) ($ 0.09) ($ 0.07)
============================= =============================
Shares used in computation of
net loss per share 4,657,053 4,111,569 4,307,640 3,535,210
============================= =============================
</TABLE>
See accompanying notes.
4
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Nine months ended Sept. 30
Cash flows from operating activities 1997 1996
-----------------------------
<S> <C> <C>
Net loss ($ 405,409) ($ 237,008)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 155,876 60,734
Accretion of unearned compensation 17,917 --
Bad debt expense 551,526 349,195
Provision for deferred income taxes -- (87,750)
Exchange of advertising for machinery & equipment (9,025) --
Gain on sale of securities (21,554) --
Accretion of bridge notes -- 77,778
Interest accrued on U.S. Treasury securities (36,702) (70,187)
Changes in assets and liabilities, net of acquisition of business:
Increase in accounts receivable (832,654) (278,543)
Increase in directories in progress (386,043) (38,691)
Increase in other assets (133,087) (113,803)
Increase in accounts payable 121,301 114,131
Increase in accrued expenses 372,939 77,092
Increase in deferred revenue 654,685 120,924
-----------------------------
Net cash provided by (used in) operating activities 49,770 (26,128)
Cash flows from investing activities
Acquisition of business, net of cash balance acquired (363,938) --
Sale of securities available-for-sale 1,899,781 542,103
Purchases of U.S. Treasury securities (1,375,790) (4,011,863)
Purchases of property, plant and equipment (223,249) (1,114,426)
-----------------------------
Net cash provided by (used in) investing activities (63,196) (4,584,186)
Cash flows from financing activities
Repayment of promissory notes to shareholders -- (447,178)
Compensation issued as shares of common stock 9,633 --
Net proceeds from initial public offering of common shares -- 4,898,437
Repayment of capital leases (493) --
Repayment of mortgage principal (40,000) --
-----------------------------
Net cash provided by (used in) financing activities (30,860) 4,451,259
Net decrease in cash and cash equivalents (44,286) (159,055)
Cash and cash equivalents at beginning of period 1,760,831 286,023
-----------------------------
Cash and cash equivalents at end of period $ 1,716,545 $ 126,968
=============================
</TABLE>
5
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
Consolidated Statements of Cash Flows (continued)
(unaudited)
Nine months ended
Sept. 30, Sept. 30,
Supplemental cash flow information 1997 1996
-----------------------
Interest paid $ 59,811 $ 11,695
=======================
Income taxes paid -- $ 72,068
=======================
Supplemental disclosure of non-cash activity
Distributions to shareholders in exchange
for promissory notes -- $268,307
=======================
Exchange of advertising for supplies $ 24,775 --
=======================
Acquisition of CDP by issuance of common stock $687,500 --
=======================
See accompanying notes.
6
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
NOTES TO UNAUDITED INTERIM CONSOLIDATED 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. Certain amounts in the 1996 financial statements have been
reclassified to conform to the presentation adopted in 1997.
2. ACQUISITION OF COLLEGE DIRECTORY PUBLISHING, INC.
On July 3, 1997, the Company, through a wholly-owned subsidiary, acquired 100%
of the outstanding capital stock of College Directory Publishing, Inc. ("CDP")
in a tax-free merger. CDP is a Conshohoc- ken, Pennsylvania-based publisher of
college and university campus directories. The Company issued an aggregate of
750,000 shares of its common stock and paid $300,000 to CDP's two stockholders.
Up to 250,000 of the shares are subject to cancellation if CDP's net pre-tax
income does not aggregate at least $1,875,000 over a three-year period
commencing January 1, 1997. Additionally, as part of the merger consideration,
the two former stockholders of CDP are entitled to each receive 12-1/2% of CDP's
net pre-tax income for each of the three fiscal years beginning January 1, 1997.
In connection with the merger, the Company loaned CDP $200,000 as additional
working capital. The purchase price was allocated based on the following fair
values of CDP's assets and liabilities at July 1, 1997 as follows:
Cash $ 12,652
Accounts receivable 26,401
Directories in progress 309,310
Property and equipment 32,568
Other assets (deposits) 2,596
Goodwill 1,916,270
Accounts payable (82,792)
Bank line of credit (450,000)
Accrued expenses (254,236)
Deferred revenue (438,608)
Capitalized leases (10,071)
-----------
$ 1,064,090
===========
The Company will record the current fair value of the contingent consideration
when the contingency is resolved and additional consideration becomes
distributable; the additional cost will be added to goodwill and expensed over
the remaining portion of the amortization period.
7
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
3. 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.
4. AVAILABLE-FOR-SALE SECURITIES
Available-for-sale securities are carried at fair value, with the unrealized
gains and losses reported in a separate component of shareholders' equity.
Realized gains and losses and declines in value judged to be
other-than-temporary are included in interest income. The cost of securities
sold is based on the specific identification method. Interest and dividends are
included in interest income.
5. ACCOUNTS RECEIVABLE
Accounts receivable are comprised primarily of amounts due from advertisers in
the bar association and student campus directories. At September 30, 1997, the
Company's allowance for doubtful accounts is 9% (9.5% at December 31, 1996) of
revenues for the most recent six months and 100% of amounts owed more than six
months. All amounts owed more than one year are written off. CDP's allowance at
September 30, 1997 is an estimate by management based upon the specific
identification of doubtful accounts at December 31, 1996, the amount of accounts
receivable since that time, and the Company's historical averages for bad debt
expense. Using management's estimate, CDP's bad debt expense for the quarter
ended September 30, 1997 was 9.2% of net sales for the same period.
6. LINE OF CREDIT
At the time of acquisition, CDP had a line of credit with PNC Bank under which
CDP had borrowed $450,000 at September 30, 1997. Under the terms of the merger
agreement with CDP, the Company was obligated to eliminate the personal
guarantees of CDP's two former stockholders which related to the line of credit.
In October, CDP repaid all outstanding borrowings from available cash and the
bank advised that it would require compensating deposit balances by the Company
to allow further borrowings without the previous personal guarantees. The
Company plans to provide for CDP's seasonal borrowing requirements from the
Company's cash reserves, thereby reducing its interest expense.
7. 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.
8
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAXES
As of September 30, 1997, the Company was not liable for federal or state income
taxes and had a net operating loss carryforward available which will reduce
future tax liabilities.
9. NET INCOME PER SHARE
Net income per share is 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.
10. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires 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.
11. STOCK-BASED COMPENSATION
In October 1995, the FASB issued Statement of Financial Accounting Standards No.
123, Accounting and Disclosure of Stock-Based Compensation, which encourages but
does not require companies to recognize stock awards based on their fair value
at the date of grant. The Company currently follows, and expects to continue to
follow, the provisions of Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees (APB 25), and related interpretations in
accounting for its employee stock options. Under APB 25, no compensation expense
is recognized when the exercise price of the Company's employee stock options
equals or exceeds the market price of the underlying stock on the date of grant.
9
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
INTERIM FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
This is the Company's first quarterly report which includes the results of
operations of its newly-acquired subsidiary, CDP. The following table sets
forth, for the periods indicated, the results of PCNA (i.e., the parent company
excluding CDP) and CDP separately:
<TABLE>
<CAPTION>
Three months ended Sept. 30, 1997 Nine months ended Sept. 30, 1997
PCNA CDP Consoli- PCNA CDP Consoli-
dated dated
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 1,916,589 $ 369,975 $ 2,286,564 $ 4,974,682 $ 369,975 $ 5,344,657
Costs and expenses:
Production 610,702 98,468 709,170 1,398,685 98,468 1,497,153
Marketing and selling 935,082 227,492 1,162,574 2,107,925 227,492 2,335,417
Depreciation & amortiz. 71,376 2,797 74,173 153,079 2,797 155,876
General & admin. 600,476 224,974 825,450 1,647,111 224,974 1,872,085
--------------------------------------------------------------------------------------------
2,217,636 553,731 2,771,367 5,306,800 553,731 5,860,531
--------------------------------------------------------------------------------------------
Loss from operations (301,047) (183,756) (484,803) (332,118) (183,756) (515,874)
Interest income (exp.), net 60,499 (10,874) 49,625 121,339 (10,874) 110,465
--------------------------------------------------------------------------------------------
Loss before provision
for income taxes (240,548) (194,630) (435,178) (210,779) (194,630) (405,409)
Provision for income taxes 0 0 0 0 0 0
--------------------------------------------------------------------------------------------
Net loss ($ 240,548) ($ 194,630) ($ 435,178) ($ 210,779) ($ 194,630) ($ 405,409)
============================================================================================
</TABLE>
As was stated in the Company's last report on Form 10-QSB, CDP's business is
highly seasonal; the great majority of its revenues are recognized in the fourth
quarter of a year, with most of the balance in the third quarter, and very
little in the first and second quarters. Accordingly, CDP contributed $369,975
in revenues and posted a loss in the most recent quarter. CDP's results of
operations had a significant effect on the Company's consolidated results and
thus make difficult comparisons to other periods in which CDP was not included.
CDP's loss was not unexpected and can be attributed to the period costs which
are incurred regardless of the sales volume. In the next quarter, CDP is
expected to recognize the vast majority of its annual revenues and post profits
for the quarter. On a consolidated basis, the Company expects to post 40% to 45%
of its annual revenues in the fourth quarter of 1997; this is expected to occur
likewise in 1998.
For the quarter ended September 30, 1997 net sales increased 418% to
$2,286,564 from $441,574 in the same period a year earlier. Excluding CDP's
contribution of $369,975 in the most recent quarter, net sales increased 334% to
$1,916,589 from that a year earlier. The Company published 20 bar or medical
association directories in the most recent quarter compared to 9 directories a
year earlier. CDP published 7 campus directories in the most recent quarter.
10
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
Results of Operations (continued)
The Company realized a net loss of $435,178 ($0.09 per share) for the
third quarter of 1997 compared to a loss of $319,497 ($0.08 per share) in the
third quarter of 1996. A loss from operations of $484,803 was incurred in the
most recent quarter, compared to a loss from operations of $570,669 in the same
quarter in 1996. In the third quarter of 1996, revenues were approximately
$660,000 lower than planned due to the delay of shipment of four directories.
The reversal of the provision for income taxes taken earlier in 1996 reduced the
net loss to $319,497 for that quarter of last year. The unusually low level of
revenues and the reversal of the income tax provision in 1996, along with the
CDP acquisition this year, make quarter-to-quarter comparisons with the most
recent quarter difficult.
For the nine months ended September 30, 1997, net sales increased 131% to
$5,344,657 from $2,312,806 in the same period a year earlier. Excluding CDP's
contribution, net sales increased 115% to $4,974,682 from that a year earlier.
The Company published 57 bar or medical association directories in the nine
months ended September 30, 1997 compared to 36 directories a year earlier. For
the nine months ended September 30, 1997 and 1996, the Company's net losses were
$405,409 ($.09 per share) and $237,008 ($.07 per share), respectively, and the
losses from operations were $515,874 and $308,861, respectively.
The following table sets forth, for the periods indicated, the percentage
relationship of certain items from the Company's consolidated statement of
operations to total net sales:
<TABLE>
<CAPTION>
Three months ended Sept. 30, Nine months ended Sept. 30,
1997 1996 1997 1996
---------------------------- ---------------------------
<S> <C> <C> <C> <C>
Net sales 100% 100% 100% 100%
Costs and expenses:
Production 31% 42% 28% 25%
Marketing and selling 51% 81% 44% 41%
Depreciation & amortization 3% 6% 3% 3%
General and administrative 36% 100% 35% 45%
---------------------------- ---------------------------
121% 229% 110% 113%
---------------------------- ---------------------------
Loss from operations -21% -129% -10% -13%
Interest income, net 2% 13% 2% 0%
---------------------------- ---------------------------
Loss before provision
for income taxes -19% -116% -8% -13%
Provision for income taxes 0% -43% 0% -3%
---------------------------- ---------------------------
Net loss -19% -72% -8% -10%
============================ ===========================
</TABLE>
As stated above, comparisons of the third quarter of 1997 to that of
1996 are not necessarily meaningful because the revenues in 1996 were
significantly lower than planned and the costs as a percentage of those revenues
were extremely high. Therefore, while expenses as a percentage of net sales were
generally lower in 1997 than in 1996, this does not indicate that expense levels
in 1997 were "better" than in 1996. This factor likewise affected the nine month
numbers for 1996, although less so.
11
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
Results of Operations (continued)
Excluding CDP, the Company's loss of $240,548 in the most recent quarter
is attributable to several factors. Third-party production costs rose to 23.4%
of net sales, whereas they were 17.2% for fiscal 1996 and 17.0% for the first
six months of 1997. This factor accounts for approximately $120,000 in higher
costs in the most recent quarter that would not have been incurred had the
historical percentage level been maintained. Management does not believe that
the recent results are indicative of probable future results. In-house
production labor costs decreased somewhat as a percentage of revenues in the
most recent quarter from that of the immediate preceding quarter of 1997. During
the most recent quarter the Company opened and staffed a new sales office in
Lakeland, Florida, and added sales representatives to market attorney
biographies in its Lake Helen, Florida, corporate offices. The Company incurred
start-up costs for these operations, including the initial inefficiencies of the
new staff which averaged about 28 persons during the quarter and ended the
quarter at 45 persons. Approximately $119,000 in costs were incurred relating to
the Lakeland sales office and the biography sales staff which were recognized in
the most recent quarter but which provided no benefit to the period's revenues.
Therefore, the combined impact of these two factors approximately equals the
Company's loss for the most recent quarter. Management believes that the
incurring of the costs in opening the Lakeland office and the attorney biography
sales staff without a commensurate positive contribution to the Company's
revenues in the same period is a non-recurring event and that these operations
will provide future benefit to the Company's results.
Amortization expense of the Goodwill resulting from the acquisition was
$23,953 for the most recent quarter.
As of December 31, 1996 the Company had a net operating loss carryforward
of approximately $691,000 available which will reduce future federal and state
income taxes.
Liquidity and Capital Resources
At September 30, 1997 the Company had investments of approximately $2
Million in U.S. Treasury securities and $1.7 Million in cash and cash
equivalents, most of which was invested in money market accounts. The Company's
only debt at September 30, 1997 was the mortgage on its corporate headquarters
and CDP's line of credit with PNC Bank (see Notes to Unaudited Consolidated
Financial Statements).
Net cash provided by operations, net of changes in assets and liabilities
as the result of the acquisition of CDP, was $37,717 for the nine months ended
September 30, 1997 compared to $26,128 used in operations for the same period a
year earlier. The most significant reason for cash being provided by operations
in spite of the operating loss in 1997 was the increase in deferred revenue.
Deferred revenue, which represents amounts received from advertisers prior to
shipment of the related directories, increased $654,685 during the nine months
ended September 30, 1997 compared to an increase of $120,924 a year earlier;
this was the result of a general increase in the number of directories the
Company had in progress at September 30, 1997 from the same time in 1996.
Directories in progress, which represents costs accumulated for directories
unpublished at the end of the period, increased $386,043 for the most recent
nine months compared to an increase of $38,691 during the same period a year
earlier for the same reason as the increase in deferred revenue.
12
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
Liquidity and Capital Resources (continued)
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 Company's expectations with
regard to the future impact on results of operations by its wholly-owned
subsidiary, CDP, to the Company's belief that the most recent rise in
third-party production costs are not indicative of a future trend, and to the
Company's expectation that the Lakeland sales office and attorney biographies
sales staff will positively contribute to the Company's future results of
operations 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)
unexpected cancellation of publishing contracts by bar associations, colleges or
universities; (2) the Company's ability to successfully operate its new
wholly-owned subsidiary, CDP; (3) CDP's success in publishing directories in
1997 for which it has contracts; and (4) the ability of the Company to achieve
intended sales and production schedules.
13
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
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. Reports on Form 8-K filed during the quarter ended September
30, 1997
1. On July 18, 1997 the Registrant filed a report on Form
8-K dated July 3, 1997 relating to its acquisition,
through a wholly-owned subsidiary, of 100% of the
outstanding capital stock of College Directory
Publishing, Inc. ("CDP") in a tax-free merger. The
Report included the Agreement and Plan of Merger as an
exhibit.
2. On September 16, 1997 the Registrant filed a report on
Form 8-K/A No. 1 which included the required financial
statements of CDP and the pro forma financial
information relating to the acquisition of CDP.
3. On October 8, 1997 the Registrant filed a report on Form
8-K/A No. 2 which included certain unaudited financial
statements of CDP as a part of the Agreement and Plan of
Merger. These unaudited financial statements had been
redacted from the report on Form 8-K filed on July 18,
1997 pursuant to the Registrant's Request for
Confidential Treatment filed by the Registrant on July
17, 1997.
14
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf on November 13, 1997 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)
15
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - September 30, 1997
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 Three Nine Nine
months months months months
ended ended ended ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
Primary 1997 1996 1997 1996
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Average shares outstanding 4,621,009 4,111,000 4,287,526 3,530,883
Net effect of dilutive stock options
based on the treasury stock method
using the average market price 36,044 569 20,114 4,327
----------- ----------- ----------- -----------
Total 4,657,053 4,111,569 4,307,640 3,535,210
=========== =========== =========== ===========
Net loss ($ 435,178) ($ 319,497) ($ 405,409) ($ 237,008)
=========== =========== =========== ===========
Per share amount ($ 0.09) ($ 0.08) ($ 0.09) ($ 0.07)
=========== =========== =========== ===========
Fully-diluted
Average shares outstanding 4,621,009 4,111,000 4,287,526 3,530,883
Net effect of dilutive stock options
based on the treasury stock method
using the market price at the end of
the period or the average market price,
whichever is higher 36,044 569 20,114 4,327
----------- ----------- ----------- -----------
Total 4,657,053 4,111,569 4,307,640 3,535,210
=========== =========== =========== ===========
Net loss ($ 435,178) ($ 319,497) ($ 405,409) ($ 237,008)
=========== =========== =========== ===========
Per share amount ($ 0.09) ($ 0.08) ($ 0.09) ($ 0.07)
=========== =========== =========== ===========
</TABLE>
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> $1,716,545
<SECURITIES> $2,004,847
<RECEIVABLES> $1,148,792
<ALLOWANCES> $612,268
<INVENTORY> $0
<CURRENT-ASSETS> $5,263,845
<PP&E> $1,783,376
<DEPRECIATION> ($299,794)
<TOTAL-ASSETS> $8,744,825
<CURRENT-LIABILITIES> $3,331,410
<BONDS> $760,000
$0
$0
<COMMON> $5,834,698
<OTHER-SE> ($1,134,450)
<TOTAL-LIABILITY-AND-EQUITY> $8,744,825
<SALES> $5,344,657
<TOTAL-REVENUES> $5,344,657
<CGS> ($1,497,153)
<TOTAL-COSTS> ($4,363,378)
<OTHER-EXPENSES> $0
<LOSS-PROVISION> $0
<INTEREST-EXPENSE> $110,465
<INCOME-PRETAX> ($405,409)
<INCOME-TAX> $0
<INCOME-CONTINUING> ($405,409)
<DISCONTINUED> $0
<EXTRAORDINARY> $0
<CHANGES> $0
<NET-INCOME> ($405,409)
<EPS-PRIMARY> ($0.09)
<EPS-DILUTED> ($0.09)
</TABLE>
