<PAGE>
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 June 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)
186 N. Industrial Park Drive
Lake Helen, FL 32744
(Former address on last report)
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 June 30, 1997
- --------------------------- ----------------------------
Common Stock: no par value 4,121,900
Transitional Small Business Disclosure Format (check one): Yes X No
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<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB- June 30,1997
INDEX
<TABLE>
<CAPTION> Page
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<S> <C> <C> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Balance Sheets as of June 30, 1997 (unaudited) and December 31, 1996 3
Statements of Operations for the three and six months ended
June 30, 1997 and 1996 (unaudited) 4
Statements of Cash Flows for the six months ended
June 30, 1997 and 1996 (unaudited) 5 - 6
Notes to unaudited interim financial statements 7 - 8
ITEM 2. Management's Discussion and Analysis of Interim Financial
Condition and Results of Operations 9 - 12
PART II - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Securities Holders 13
ITEM 5. Other Information 13
ITEM 6. Exhibits and Reports on Form 8-K 13
Exhibit 11 - Statement re computation of per share earnings
Exhibit 27 - Financial data schedule
</TABLE>
2
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB- June 30,1997
Balance Sheets
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................................................... $2,102,367 $1,760,831
Available-for-sale securities...................................................... 1,909,262 2,477,500
Accounts receivable, less allowance for doubtful
accounts of $372,834 at June 30, 1997
and $267,787 at December 31, 1996................................................ 387,833 228,997
Directories in progress............................................................ 217,778 144,823
Refundable income taxes............................................................ 72,068 72,068
Other current assets............................................................... 102,779 17,544
------------ ------------
Total current assets................................................................. 4,792,087 4,701,763
Property and equipment, net.......................................................... 1,353,821 1,329,783
Other assets......................................................................... 119,398 66,417
------------ ------------
Total assets......................................................................... $ 6,265,306 $6,097,963
------------ ------------
------------ ------------
Liabilities and shareholders' equity
Current liabilities:
Accounts payable................................................................... $ 268,852 $ 234,334
Accrued expenses................................................................... 219,878 205,670
Deferred revenue................................................................... 542,404 460,434
Mortgage payable................................................................... 53,333 48,889
------------ ------------
Total current liabilities............................................................ 1,084,467 949,327
Mortgage payable after one year...................................................... 720,000 751,111
------------ ------------
Total liabilities.................................................................... 1,804,467 1,700,438
Shareholders' equity:
Common shares, no par value:
15,000,000 shares authorized; 4,121,900 shares
issued and outstanding at June 30, 1997;
4,114,000 issued and outstanding at December 31, 1996............................ 5,152,698 5,137,565
Unrealized loss on available-for-sale securities................................... (3,694) (13,024)
Accumulated deficit................................................................ (661,727) (691,495)
Unearned compensation, net......................................................... (26,438) (35,521)
------------ ------------
Total shareholders' equity........................................................... 4,460,839 4,397,525
------------ ------------
Total liabilities and shareholders' equity........................................... $ 6,265,306 $6,097,963
------------ ------------
------------ ------------
</TABLE>
See accompanying notes.
3
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB- June 30,1997
Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997 1996 1997 1996
------------ ---------- ------------ ------------
<S> <C> <C> <C> <C>
Net sales.................................................. $ 1,624,397 $ 925,950 $ 3,058,093 $ 1,871,232
Costs and expenses:
Production............................................... 422,894 210,037 787,983 401,668
Marketing and selling.................................... 681,741 319,607 1,172,843 580,795
Depreciation and amortization............................ 40,646 18,473 81,703 35,409
General and administrative............................... 502,773 350,360 1,046,635 591,552
------------ ---------- ------------ ------------
1,648,054 898,477 3,089,164 1,609,424
------------ ---------- ------------ ------------
Income (loss) from operations.............................. (23,657) 27,473 (31,071) 261,808
Other income (expense)
Interest income (expense), net........................... 50,387 (37,763) 60,840 (57,338)
Other.................................................... 0 (89) 0 6,488
------------ ---------- ------------ ------------
Income (loss) before provision
for income taxes......................................... 26,730 (10,379) 29,769 210,958
Provision for income taxes................................. 0 (2,931) 0 128,469
------------ ---------- ------------ ------------
Net income (loss).......................................... $ 26,730 ($7,448) $ 29,769 $ 82,489
------------ ---------- ------------ ------------
------------ ---------- ------------ ------------
Net income (loss) per share................................ $ 0.01 $ 0.00 $ 0.01 $ 0.03
------------ ---------- ------------ ------------
------------ ---------- ------------ ------------
Shares used in computation of
net income (loss) per share.............................. 4,129,184 3,526,022 4,130,912 3,242,055
------------ ---------- ------------ ------------
------------ ---------- ------------ ------------
</TABLE>
See accompanying notes
4
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB--June 30, 1997
Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-------------------------
JUNE 30, JUNE 30,
1997 1996
-------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income............................................................................ $ 29,769 $ 82,489
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization....................................................... 81,703 35,409
Accretion of unearned compensation.................................................. 9,083 --
Bad debt expense.................................................................... 354,001 212,658
Provision for deferred income taxes................................................. -- 78,525
Exchange of advertising for machinery & equipment................................... (6,586) (11,938)
Gain on sale of securities.......................................................... (22,651) --
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..................................................... (512,837) (335,776)
(Increase) decrease in directories in progress...................................... (72,955) 61,485
Increase in other assets............................................................ (152,199) (29,057)
Increase in accounts payable........................................................ 34,518 84,462
Increase in accrued expenses........................................................ 14,207 83,023
Increase (decrease) in deferred revenue............................................. 81,970 (187,147)
Increase in income taxes payable.................................................... -- 28,944
------------ -----------
Net cash provided by (used in) operating activities................................... (161,977) 171,766
Cash flows from investing activities
Sale of securities available-for-sale............................................... 1,000,000 --
Purchases of U.S. Treasury securities............................................... (399,781) (4,011,863)
Purchases of property, plant and equipment.......................................... (85,172) (120,505)
------------ -----------
Net cash provided by (used in) investing activities................................... 515,047 (4,132,368)
Cash flows from financing activities
Distributions to shareholders....................................................... -- (178,871)
Compensation issued as shares of common stock....................................... 15,133 --
Net proceeds from initial public offering of common shares.......................... -- 4,898,437
Reduction in mortgage principal..................................................... (26,667) --
------------ -----------
Net cash used in financing activities................................................. (11,534) 4,719,566
Net decrease in cash and cash equivalents............................................. 341,536 758,964
Cash and cash equivalents at beginning of period...................................... 1,760,831 286,023
------------ -----------
Cash and cash equivalents at end of period............................................ $ 2,102,367 $ 1,044,987
------------ -----------
------------ -----------
</TABLE>
5
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB--June 30, 1997
Statements of Cash Flows (continued)
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996
--------- ---------
<S> <C> <C>
Supplemental cash flow information
Distributions to shareholders in exchange for promissory notes............................. -- $ 268,307
-------- ----------
-------- ----------
Interest paid.............................................................................. $ 32,869 $ 4,932
-------- ----------
-------- ----------
Exchange of advertising for supplies....................................................... $ 8,452 --
-------- ----------
-------- ----------
Income taxes paid.......................................................................... -- $ 21,000
-------- ----------
-------- ----------
</TABLE>
See accompanying notes
6
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB-June 30, 1997
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. Certain amounts in the 1996 financial statements have been
reclassified to conform to the presentation adopted in 1997.
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. 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 investment income. The cost of securities
sold is based on the specific identification method. Interest and dividends are
included in interest income.
4. ACCOUNTS RECEIVABLE
Accounts receivable are comprised primarily of amounts due from advertisers
in the bar association directories. At June 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 all amounts owed more than six months. All amounts owed
more than one year are written off.
5. 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.
6. INCOME TAXES
As of June 30, 1997, the Company was not liable for federal or state income
taxes due to utilization of its net operating loss carryforward.
7
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB-June 30, 1997
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
7. 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.
8. 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.
9. 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.
10. 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.
11. SUBSEQUENT EVENTS
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 meet certain levels over a three-year period.
Details of the transaction are contained in the Form 8-K filed by the Company
with the Securities and Exchange Commission on July 18,1997.
8
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB-June 30, 1997
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
INTERIM FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
For the second quarter of 1997 which ended June 30, net sales increased
13% to $1,624,397 from $1,433,696 for the first quarter of 1997 and increased
75% from $925,950 for the second quarter of 1996. Average net advertising
revenues per directory increased 20% to $77,041 on 21 directories published
during the most recent quarter, compared to $64,094 on 13 directories
published a year earlier, but were down from the $88,960 average for the 16
directories published in the quarter ended March 31, 1997 as the Company
published a higher proportion of smaller directories for bar associations in
the most recent quarter.
The Company realized net income of $26,730 ($0.01 per share) for the second
quarter of 1997 compared to $3,039 ($0.00 per share) in the first quarter of the
year and a net loss of $7,448 ($0.00 per share) for the second quarter of 1996.
A loss from operations of $23,657 was incurred in the most recent quarter,
compared to a loss from operations of $7,414 in the first quarter of this year
and income from operations of $27,473 in the second quarter in 1996. Total
operating costs rose 14% to $1,648,054 in the second quarter of 1997 from
$1,441,110 in the first quarter and rose 83% from $898,477 in the second quarter
of 1996. The Company recognized $50,387 of net investment and interest income in
the most recent quarter, compared to net interest expense of $37,763 in the same
period a year earlier.
The following table sets forth, for the periods indicated, the percentage
relationship of certain items from the Company's statement of operations to
total net sales:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales........................................................... 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Production........................................................ 26.0% 22.7% 25.8% 21.5%
Marketing and selling............................................. 42.0% 34.5% 38.4% 31.0%
Depreciation and amortization..................................... 2.5% 2.0% 2.7% 1.9%
General and administrative........................................ 31.0% 37.8% 34.2% 31.6%
----- ----- ----- -----
101.5% 97.0% 101.0% 86.0%
----- ----- ----- -----
Income (loss) from operations....................................... -1.5% 3.0% -1.0% 14.0%
Other income (expense)
Interest income (expense), net.................................... 3.1% -4.1% 2.0% -3.1%
Other............................................................. 0.0% 0.0% 0.0% 0.3%
----- ----- ----- -----
Income (loss) before provision
for income taxes.................................................. 1.6% -1.1% 1.0% 11.3%
Provision for income taxes.......................................... 0.0% -0.3% 0.0% 6.9%
----- ----- ----- -----
Net income (loss)................................................... 1.6% -0.8% 1.0% 4.4%
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
9
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - June 30, 1997
Results of Operations (continued)
During the most recent quarter the Company published one directory which it
agreed to publish when a competitor went out of business midway through the
publishing process. In doing so, the Company agreed to publish approximately
180 advertisements for which the other publisher had already been paid. The
Company estimates that its income from operations would have been about $50,000
higher in the most recent quarter had the Company been able to receive its
customary revenues from these advertisements. Nonetheless, the publishing
contract this year did result in a significant contribution beyond its direct
costs and the Company expects to be able to publish the directory in future
years without having the reduction of revenues experienced this year.
Production costs rose to 26% of net sales in the second quarter of 1997
from 23% of net sales a year earlier due to an increase in outside costs such as
printing and binding, to higher in-house labor costs, and 1% of the change was
due to the effect of the one particular contract mentioned above. Management is
expecting that it will be able to realize greater efficiencies in its in-house
production staff later this year as a result of the new industry-specific
software system installed early in the year for which some time is required
before benefits are realized. Additionally, a new vice president in charge of
production who began in early June of this year, and who has extensive
experience in the Company's specific industry, is expected to assist in
realizing improved efficiencies.
Marketing and selling expense rose to 42% of net sales in the quarter ended
June 30, 1997 from 35% of net sales in the same period a year earlier. Nearly
all of this expense in both periods is related to the sale of advertising in the
Company's publications; only a small portion is related to the Company's
marketing to the bar associations for which it publishes. Of the $362,134
increase in marketing and selling expense, nearly all relates to increases in
payroll and related costs; approximately $20,000 of the increase is due to sales
staff which started during the quarter in order to provide for future volumes,
but which did not contribute to the most recent quarter's revenues. The Company
is planning to procure personal computers and specialized software which is
intended to automate and increase efficiencies in the sales functions.
Although there has been significant improvement in the Company's results of
operations in the first half of 1997 from that of the last half of 1996, the
Company has experienced a loss from operations in each of the past four quarters
in spite of increasing revenues and it attributes these losses primarily to
inefficiencies in its production and sales areas as the Company has grown
rapidly. As described above, the Company is implementing and plans to implement
actions which it expects will improve these efficiencies; however, there can be
no assurance that the Company will be successful in its implementation or that
the actions taken will produce the intended results.
General and administrative expenses rose $152,413 in the second quarter of
1997 from that in the same period a year earlier, but decreased to 31% of net
sales from 38%. The decrease as a percentage of sales is primarily attributable
to bad debt expense which was 9.5% of net sales in the most recent quarter,
compared to 16.6% a year earlier.
As of December 31, 1996 the Company had a net operating loss carryforward
to apply to future federal income taxes.
As a result of its merger with College Directory Publishing ("CDP") as
described elsewhere in this Report, the Company expects additional revenues of
approximately $3 Million for the current fiscal year. CDP's revenues were
approximately $2.6 Million in 1996. CDP's business is highly seasonal; the
great majority of its revenues will be recognized in the fourth quarter of the
year, with most of the balance in the third quarter, and very little in the
first and second quarters. Accordingly, the Company's
10
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - June 30, 1997
Results of Operations (continued)
results of operations are expected to be positively affected in the fourth
quarter; the impact in the third quarter may vary from year to year and,
beginning in 1998, the Company's results of operations in the first half of the
year will be negatively affected by this wholly-owned subsidiary. Over the
course of an entire year, CDP is expected to favorably contribute to the
Company's results of operations; however, the Company expects that results going
forward will begin to reflect this seasonality, making quarter-to-quarter
comparisons over the next year difficult at best.
Liquidity and Capital Resources
Net cash used in operations was $146,844 for the six months ended June 30,
1997 compared to $171,766 provided by operations for the same period a year
earlier. The most significant reasons for the decrease in cash provided from
operations in 1997 from 1996 were the increase in accounts receivable, in
directories in progress, and in other assets, net of the increase in deferred
revenue. Deferred revenue, which represents amounts received from advertisers
prior to shipment of the related directories, increased $81,970 during the six
months ended June 30, 1997 whereas it decreased $187,147 during the same period
a year earlier. This was the result of a general increase in the number of
directories the Company had in progress at June 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 $72,955 for the most
recent six months compared to a decrease of $61,485 during the same period a
year earlier for the same reason as the increase in deferred revenue and because
of a change made in the beginning of 1997 in the estimate used by management to
estimate costs associated with directories in progress. The change in
management's estimate resulted in an additional $41,981 of costs which were
deferred in the most recent six-month period.
At June 30, 1997 the Company had investments of approximately $1.9
Million in U.S. Treasury securities and $2.1 Million in cash and cash
equivalents, much of which is from recently-matured treasury securities and
which was invested in money market accounts as of June 30. The Company's only
debt is the mortgage on its corporate headquarters.
The Company has no commitments at this time to acquire a material
amount of capital assets, although the Company may invest an estimated $200,000
in software and computer hardware for automation of its sales functions later in
1997.
On May 29, 1997, the Company announced that its Board of Directors has
authorized the Company to repurchase up to $1,000,000 of its outstanding shares
of common stock over a twelve- month period. As of the date of this Report, the
Company has not repurchased any shares.
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 Conshohocken, 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 meet certain levels over a three-year period.
Details of the transaction are contained in the Form 8-K filed by the Company
with the Securities and Exchange Commission on July 18, 1997. As of the date of
this Report, the Company has not entered into any agreements, understandings, or
commitments relating to any potential acquisition other than the merger with
CDP.
11
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - June 30, 1997
Liquidity and Capital Resources (continued)
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 management's expectations regarding
publishing in future years that certain directory it assumed from another
publisher, to the Company's expectation of realizing greater efficiencies in its
in-house production staff later this year, to the Company's consideration of
automating and improving efficiencies in the sales functions through the
procurement of personal computers and specialized software, and to the Company's
expectations with regarding to the future impact on results of operations by its
wholly-owned subsidiary, CDP, 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 implement the industry-specific software system in its production
area which it procured earlier this year; (3) the ability of the new vice
president in charge of production to implement systems and methods which improve
the efficiencies of the Company's in-house production staff; (4) the Company's
ability to find a suitable specialized software system for its sales functions;
(5) the Company's ability to successfully install and implement such a software
system; (6) the Company's ability to successfully operate its new wholly-owned
subsidiary, CDP; and (7) CDP's success in publishing directories in 1997 for
which it has contracts.
12
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - June 30, 1997
PART II - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Securities Holders
An annual meeting of the shareholders of the Company was held at the
Company's principal corporate offices in Lake Helen, Florida, on May 28, 1997.
At that time, the shareholders by direct vote and by proxy, re-elected Mr.
Phillip S. Hofmann and elected Mr. Richard Silver as directors of the Company.
The vote was 3,414,511 shares for the nominees, 0 shares against, and 2,000
shares abstaining. The terms of Mssrs. Peter S. Balise, D. Scott Plakon, and
Matt Butler continued and they remained as directors of the Company.
Also at that meeting the shareholders, by direct vote and by proxy,
ratified the appointment of Ernst & Young, LLP as independent auditors for the
fiscal year ended December 31, 1997. The vote was 3,398,011 shares for, 1,500
shares against, and 17,000 shares abstaining.
There was no other business brought at the meeting requiring a vote of the
shareholders.
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, 1997
13
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - June 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 August 14, 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)
14
<PAGE>
The Publishing Company of North America, Inc.
Form 10-QSB - June 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 SIX SIX
MONTHS MONTHS MONTHS MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
PRIMARY
Average shares outstanding.................................. 4,121,274 3,513,945 4,120,020 3,236,017
---------- ---------- ---------- ----------
Net effect of dilutive stock options
based on the treasury stock method
using the average market price............................ 7,910 12,077 10,892 6,038
---------- ---------- ---------- ----------
Total......................................................... 4,129,184 3,526,022 4,130,912 3,242,055
---------- ---------- ---------- ----------
Net income.................................................... $ 26,730 ($7,448) $ 29,769 $ 82,489
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Per share amount.............................................. $ 0.01 $ 0.00 $ 0.01 $ 0.03
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Fully-diluted
Average shares outstanding.................................. 4,121,274 3,513,945 4,120,020 3,236,017
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....................................... 22,715 12,564 19,022 6,282
---------- ---------- ---------- ----------
Total......................................................... 4,143,989 3,526,509 4,139,042 3,242,299
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income.................................................... $ 26,730 ($7,448) $ 29,769 $ 82,489
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Per share amount.............................................. $ 0.01 $ 0.00 $ 0.01 $ 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, 1997 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> $2,102,367
<SECURITIES> $1,909,262
<RECEIVABLES> $760,667
<ALLOWANCES> ($372,834)
<INVENTORY> $0
<CURRENT-ASSETS> $4,792,087
<PP&E> $1,557,855
<DEPRECIATION> ($204,034)
<TOTAL-ASSETS> $6,265,306
<CURRENT-LIABILITIES> $1,084,467
<BONDS> $773,333
$0
$0
<COMMON> $5,152,698
<OTHER-SE> ($691,859)
<TOTAL-LIABILITY-AND-EQUITY> $6,265,306
<SALES> $3,058,093
<TOTAL-REVENUES> $3,058,093
<CGS> ($787,983)
<TOTAL-COSTS> ($2,301,181)
<OTHER-EXPENSES> $0
<LOSS-PROVISION> $0
<INTEREST-EXPENSE> $60,840
<INCOME-PRETAX> $29,769
<INCOME-TAX> $0
<INCOME-CONTINUING> $29,769
<DISCONTINUED> $0
<EXTRAORDINARY> $0
<CHANGES> $0
<NET-INCOME> $29,769
<EPS-PRIMARY> $0.01
<EPS-DILUTED> $0.01
</TABLE>
