<PAGE> 1
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Transition Period From to
------------------------ ----------------------
Commission file number 1-12145
SNYDER COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1983617
(State or other (IRS Employer
jurisdiction of Identification No.)
incorporation or
organization)
Two Democracy Center
6903 Rockledge Drive
15th Floor
Bethesda, Maryland 20817
(Address of principal (Zip Code)
executive office)
(301) 468-1010
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $0.001 Par Value--37,441,214 shares outstanding as of May 2,
1997.
<PAGE> 2
SNYDER COMMUNICATIONS, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet--December 31, 1996 and March 31, 1997. 3
Condensed Consolidated Statement of Income--Three months ended March 31, 1996
and 1997. 4
Condensed Consolidated Statement of Cash Flows--Three months ended March 31, 1996
and 1997. 5
Notes to Condensed Consolidated Financial Statements--March 31, 1997. 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
SNYDER COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1996 1997
-------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 53,475,047 $ 37,645,872
Accounts receivable, net of allowance for
doubtful accounts of $779,863 and $681,125 at
December 31, 1996 and March 31, 1997, respectively 20,353,637 21,344,363
Unbilled services 3,823,608 5,583,689
Inventory 763,284 1,489,820
Deferred tax asset 1,323,921 1,587,689
Prepaid expenses and other assets 2,073,625 1,926,527
-------------- --------------
Total current assets 81,813,122 69,577,960
Property and equipment, net 17,315,877 21,215,340
Goodwill 3,386,861 7,352,559
Deposits and other assets 2,077,682 1,011,676
-------------- --------------
Total assets $104,593,542 $ 99,157,535
============== ==============
LIABILITIES AND EQUITY
Current liabilities:
Lines of credit $ 2,294,522 $ 2,503,204
Current obligations under capital leases 1,108,954 846,926
Accounts payable and accrued expenses 27,862,386 28,121,828
Accrued payroll 5,175,719 2,656,715
Unearned revenue 4,641,998 4,824,139
-------------- --------------
Total current liabilities 41,083,579 38,952,812
Deferred income taxes 170,817 231,593
Deferred rent 88,718 88,718
Brann Holdings Limited mandatorily redeemable
preferred stock, held by related parties 5,110,241 --
Long-term debt and obligations under capital leases 8,043,172 7,350,279
-------------- --------------
Total liabilities 54,496,527 46,623,402
Equity:
Preferred stock, $.001 par value, 5,000,000 shares authorized, none
issued and outstanding at December 31, 1996 and March 31, 1997 -- --
Common stock, $.001 par value, 120,000,000 shares authorized,
37,226,214 and 37,401,214 shares issued and oustanding at
December 31, 1996 and March 31, 1997, respectively 37,226 37,401
Additional paid-in capital 46,006,027 61,059,910
Retained earnings (deficit) 3,759,015 (8,723,791)
Cumulative foreign currency translation adjustment 294,747 160,613
-------------- --------------
Total equity 50,097,015 52,534,133
-------------- --------------
Total liabilities and equity $104,593,542 $ 99,157,535
============== ==============
</TABLE>
The accompanying notes are an integral part of this condensed
consolidated balance sheet.
3
<PAGE> 4
SNYDER COMMUNICATIONS, INC.
(SEE NOTE 1)
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
------------------------------
1996 1997
-------------- --------------
<S> <C> <C>
Revenues $ 40,505,922 $ 49,053,118
Operating expenses:
Cost of services 30,290,730 34,555,284
Selling, general and administrative expenses 6,922,850 9,694,664
Compensation to stockholders 456,979 --
Acquisition costs -- 16,181,134
-------------- --------------
37,670,559 60,431,082
-------------- --------------
Income (loss) from operations 2,835,363 (11,377,964)
Interest expense (509,790) (300,773)
Interest income 74,293 537,483
-------------- --------------
Income (loss) before taxes 2,399,866 (11,141,254)
Income tax provision 28,306 1,341,551
-------------- --------------
Net income (loss) $ 2,371,560 $(12,482,805)
============== ==============
Pro forma income data (unaudited):
Historical income before taxes as reported $ 2,399,866
Pro forma provision for income taxes (1,068,420)
--------------
Pro forma net income $ 1,331,446
==============
Net income (loss) per share:
Net income (loss) as reported 0.07 (0.33)
Pro forma adjustment (0.03) --
-------------- --------------
Net income (loss) per share 0.04 (0.33)
============== ==============
Shares used in computing net income per share 33,163,052 37,364,201
============== ==============
</TABLE>
The accompanying notes are an integral part of this condensed
consolidated financial statement.
4
<PAGE> 5
SNYDER COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31, 1997
------------------------------
1996 1997
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 2,371,560 $(12,482,806)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 1,004,935 1,437,481
Noncash expense from accelerated vesting of Brann
Holdings, Ltd. options -- 9,096,899
(Gain) loss on disposal of assets (35,227) 12,920
Deferred taxes (133,309) (202,992)
Changes in assets and liabilities:
Accounts receivable (1,713,378) (990,726)
Deposits and other assets (58,666) 857,674
Prepaid expenses and other assets (642,025) 147,098
Accrued payroll (642,865) (2,519,004)
Accounts payable and accrued expenses 3,714,064 1,347,176
Unearned revenue 145,521 182,141
Unbilled services (2,329,172) (1,760,081)
Inventory (181,847) (726,536)
-------------- --------------
Net cash provided by (used in) operating activities 1,499,591 (5,600,756)
-------------- --------------
Cash flows from investing activities:
Purchases of property and equipment (1,491,831) (5,608,355)
Purchase of Good Neighbor -- (4,148,790)
Notes and net advances to SMS stockholders (6,617) --
-------------- --------------
Net cash used in investing activities (1,498,448) (9,757,145)
-------------- --------------
Cash flows from financing activities:
Redemption of Brann Holdings,
Ltd. mandatorily redeemable preferred stock -- (5,110,241)
Repayment of note payable -- (578,492)
Distributions and dividends (1,327,174) (1,087,734)
Net borrowings from line of credit (827,850) 208,682
Payments on capital lease obligations (108,256) (376,429)
Proceeds from exercise of options -- 5,957,159
-------------- --------------
Net cash (used in)
financing activities (2,263,280) (987,055)
-------------- --------------
Effect of exchange rate changes 143,154 515,781
Net decrease in cash and equivalents (2,118,983) (15,829,175)
Cash and equivalents, beginning of period 9,033,620 53,475,047
-------------- --------------
Cash and equivalents, end of period $ 6,914,637 $ 37,645,872
============== ==============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 366,575 $ 315,619
Cash paid for income taxes $ 996,092 $ 793,445
</TABLE>
The accompanying notes are an integral part of this condensed
consolidated financial statement.
5
<PAGE> 6
SNYDER COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
1. ORGANIZATION AND BASIS OF PRESENTATION:
On October 19, 1988, Collegiate Marketing and Communications, Inc., a
Delaware corporation (the "General Partner"), and a Delaware limited
partnership beneficially owned by Mortimer B. Zuckerman and Fred Drasner (the
"Original Limited Partner") entered into a partnership agreement (the
"Partnership Agreement") pursuant to the provisions of the Delaware Act, under
the name Collegiate Marketing and Communications, L.P. (the "Partnership"). On
September 1, 1989, the name of the Partnership was changed to Snyder
Communications, L.P., and the name of the General Partner was changed to Snyder
Communications, Inc. On May 18, 1995, the Partnership Agreement was amended to
admit several new limited partners into the Partnership. On June 25, 1996, the
name of the General Partner was changed to Snyder Marketing Services, Inc.
("SMS"). Snyder Communications, Inc., a Delaware corporation, was incorporated
on June 25, 1996 to continue the business operations of the Partnership. Snyder
Communications, Inc. ("SCI"), in conjunction with all of the existing partners
in the Partnership, reorganized on September 24, 1996, (the "Reorganization")
upon the effectiveness of the initial public offering of its common stock.
After consummation of the Reorganization, SCI owns 100 percent of the stock of
SMS and directly and indirectly (through its ownership of SMS), 100 percent of
the interests in the Partnership. Because of the continuity of ownership, the
Reorganization was accounted for by combining the assets, liabilities and
operations of SMS, the Partnership, and SCI at their historical cost basis.
On January 6, 1997, SCI acquired MMD, Inc. ("MMD") in a merger transaction
in which MMD became a wholly owned subsidiary of SCI. In this transaction, 966
shares of outstanding MMD common stock were converted into 1,354,500 shares of
SCI common stock. In addition, on March 27, 1997, SCI acquired Brann Holdings
Limited ("Brann") in a merger transaction in which Brann became a wholly owned
subsidiary of SCI. In this transaction, 339,000 shares of outstanding Brann
common stock were converted into 2,350,152 shares of SCI common stock, while
63,850 Brann options, which were fully vested and immediately exercisable, were
converted into 389,730 SCI options with similar terms. Collectively, the MMD
and Brann business combinations will be referred to herein as the "Mergers".
The Mergers have been accounted for as pooling of interests for accounting and
financial reporting purposes. The accompanying condensed consolidated financial
statements have been retroactively restated to reflect the combined financial
position and combined results of operations and cash flows of SCI, MMD and
Brann for all periods presented, giving effect to the Mergers as if they had
occurred at the beginning of the earliest period presented (the combined entity
will be referred to herein as the "Company"). The condensed consolidated
balance sheets for all periods presented give effect to the conversion of the
shares of MMD and Brann common stock to 3,704,652 shares of SCI common stock.
Certain amounts previously presented have been reclassified to conform to the
March 31, 1997 presentation.
The following details revenues and net income (loss) for the three months
ended March 31, 1997 of the Company and the previously separate entities of MMD
and Brann (the "Pooled Entities") through the dates of their respective
mergers.
<TABLE>
<CAPTION>
For the three months
ended March 31, 1997
-------------------
<S> <C>
Revenues:
The Company $ 33,084,893
Pooled Entities 15,968,225
---------------
$ 49,053,118
===============
Net Income (Loss):
The Company $ (12,484,146)
Pooled Entities 1,341
---------------
$ (12,482,805)
===============
</TABLE>
On January 17, 1997 the Company acquired Good Neighbor Direct, Inc. ("Good
Neighbor") for approximately $4,150,000 in cash. The acquisition of Good
Neighbor was accounted for as a purchase for accounting and financial reporting
purposes. The acquisition of Good Neighbor did not have a material impact on
the Company's results of operations or financial condition during the quarter
ended March 31, 1997.
6
<PAGE> 7
The accompanying unaudited condensed consolidated financial statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. As a result, certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. The Company
believes that the disclosures made are adequate to make the information
presented not misleading. The condensed consolidated financial statements
reflect all adjustments (consisting of only normal recurring accruals except as
discussed in note 3) which, in the opinion of management, are necessary to
present fairly the financial position, results of operations and cash flows of
the Company as of March 31, 1996 and 1997 and for the periods then ended.
Operating results for the three month period ended March 31, 1997 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1997. The unaudited condensed consolidated financial statements
should be read in conjunction with the financial statements and footnotes
thereto included in the Company's Form 10-K for the year ended December 31,
1996 as filed with the Securities and Exchange Commission and the Company's
Form 8-K/A filed with the Securities and Exchange Commission on March 24, 1997.
2. PENDING ACQUISITION:
On March 19, 1997, the Company entered into a definitive agreement to
acquire American List Corporation ("American List") in a merger transaction in
which American List will become a wholly owned subsidiary of the Company. Under
the terms of the agreement, the Company will issue one share of common stock in
exchange for each of the approximately 4.5 million shares of American List
common stock outstanding provided that the average trading price (as defined in
the definitive agreement) of the Company's common stock prior to closing of the
transaction is at least $32 per share. The definitive agreement provides that
the exchange ratio increases if the average trading price of the Company's
common stock prior to closing is less than $32 per share. Each American List
stockholder will receive a pro-rata amount of the Company's common stock in
proportion to their relative percentage ownership in American List. This
acquisition is subject to the approval of American List stockholders and to
customary regulatory approval. This merger will be accounted for as a pooling
of interests for accounting and financial reporting purposes. American List is
a resource for targeted marketing campaigns, providing clients with the
ability to reach over 30 million students and young adults through its
proprietary database.
3. ACQUISITION COSTS:
The Company recorded approximately $16.2 million in nonrecurring
acquisition costs during the quarter ended March 31, 1997. The acquisition
costs are costs directly related to the consummation of the Company's Mergers.
. These costs include primarily investment banking fees, other professional
service fees, certain United Kingdom excise and transfer taxes, as well as a
non-cash charge of approximately $9.1 million related to the accelerated
vesting of options held by Brann employees.
4. INCOME TAXES:
The Company's effective tax rate in the first quarter of 1997 differs from
the Federal statutory rate due primarily to nonrecurring, nondeductible
acquisition costs, state income taxes, and different tax rates in the United
Kingdom.
7
<PAGE> 8
5. PRO FORMA INCOME DATA:
Prior to the Reorganization, no provision for Federal or state income taxes
related to income earned by the Partnership was recorded because each of the
partners of the Partnership reflected their share of the Partnership's net
income on their respective tax returns. Also, for the period from January 1,
1996 until the Reorganization, SMS had elected to be treated for Federal and
certain State income tax purposes as an S corporation. Effective with the
Reorganization, SCI has been treated as a C corporation for Federal and State
income tax purposes. MMD also operated as an S corporation from 1994 until the
date of its merger in January 1997. The pro forma income data in the Condensed
Consolidated Statement of Income includes a provision for Federal and state
income taxes as if all operations of the Company had been taxed similar to a C
corporation for the quarter ended March 31, 1996.
6. NEW ACCOUNTING PRONOUNCEMENT:
During February 1997, the Financial Accounting Standards Board Issued
Statements of Financial Accounting Standards No. 128 ("SFAS 128") "Earnings Per
Share". This statement is effective for years ending after December 15, 1997
and will be implemented by the Company in its December 31, 1997 financial
statements.
SFAS 128 requires primary earnings per share ("EPS") to be replaced with
basic EPS. Primary EPS is computed by dividing reported earnings available to
common stockholders by the weighted average number of shares outstanding
without consideration of common stock equivalents or other potentially dilutive
securities. Fully diluted EPS, now called diluted EPS is still included. The
Company adopted its stock option plan and began offering stock options in
September 1996. Because the options were outstanding for only a short period of
time during 1996, management has established that the effect of this
pronouncement on the computation of basic EPS is immaterial for 1996. However,
in 1997 and future years, when the Company's options are outstanding for the
entire year, management has estimated that the Company's reported EPS will be
higher under SFAS 128 than under the old EPS standard. SFAS 128 will not
materially impact the Company's EPS reported for the quarter ended March 31,
1997 because the Company's common stock equivalents were anti-dilutive for the
quarter ended March 31, 1997.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with the Condensed
Consolidated Financial Statements of the Company and the accompanying notes
thereto included elsewhere in this Quarterly Report on Form 10-Q.
This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains certain "forward-looking statements" (within the
meaning of the Private Securities Litigation Reform Act of 1995). Such
statements involve known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.
Overview
The Company completed three strategic acquisitions and entered into a
definitive agreement for a fourth acquisition during the quarter ended March
31, 1997. On January 6, 1997, the Company acquired MMD in a merger transaction
in which 1,354,500 shares of Snyder common stock were issued for all of the
issued and outstanding stock of MMD. MMD provides outsourced medical sales and
marketing services and has over 1,500 detailing representatives conducting
sales and marketing programs for some of the world's premier pharmaceutical
companies. The merger transaction with MMD was accounted for as a pooling of
interests for accounting and financial reporting purposes.
On January 17, 1997, the Company acquired Good Neighbor for approximately
$4,150,000 in cash. Good Neighbor provides marketing services through
information centers located in over 7,000 targeted retail outlets throughout
the United States. The acquisition of Good Neighbor was accounted for as a
purchase for accounting and financial reporting purposes. The Company recorded
approximately $3.9 million in goodwill from this transaction.
On March 27, 1997, the Company acquired Brann in a share exchange in which
2,350,152 shares of Snyder common stock and 389,730 options for Snyder common
stock were issued for all of the issued and outstanding ordinary shares and
options for ordinary shares of Brann, respectively. In addition, all of Brann's
outstanding mandatorily redeemable preference shares were redeemed for
$5,035,000 (including accrued dividends) in cash. Brann is a leading provider
of integrated targeted marketing services in the United Kingdom, and it offers
a full range of creative, telemarketing and database services to over 70 large
corporations, government agencies and charitable organizations. The share
exchange with Brann was accounted for as a pooling of interests for accounting
and financial reporting purposes. The Company is now subject to the impact of
foreign currency fluctuation, specifically that of the pound sterling.
On March 18, 1997, the Company entered into a definitive agreement to
acquire American List. Under the terms of the agreement, the Company will issue
one share of common stock in exchange for each of the approximately 4.5 million
shares of American List common stock outstanding provided that the average
trading price (as defined in the definitive agreement) of the Company's common
stock prior to closing of the transaction is at least $32 per share. The
definitive agreement provides that the exchange rate increases if the average
trading price of the Company's common stock prior to closing is less than $32
per share. Each American List stockholder will receive a pro-rata amount of the
Company's common stock in proportion to their relative percentage ownership in
American List. This acquisition is subject to the approval of American List
stockholders and to customary regulatory approval. American List is a resource
for targeted marketing campaigns, providing its clients with the ability to
reach over 30 million students and young adults through its proprietary
database.
In January 1997, the Company entered into a two-year contract to provide
turn-key marketing services to AT&T Communications, Inc. ("AT&T") in the
business market. Under this contract, the Company will assist AT&T in signing
up small and medium-sized business customers for its long distance, Intralata,
toll-free and calling card services. Through 1996 the marketing services
provided to AT&T were limited to assisting AT&T increase its market share in
the consumer long-distance market.
9
<PAGE> 10
Concurrently with entering into the new contract with AT&T, the Company
terminated its contract with MCI Telecommunications Corporation ("MCI"), under
which it provided marketing and sales services to MCI targeting small business
customers. Although the Company expects revenues from the start-up phase of the
new AT&T contract to be less than those from the MCI contract, the termination
of the contract with MCI is not expected to have a material impact on the
Company, primarily because the Company has acquired MMD and Brann, and also
because it has entered into additional contracts with other clients, including
the new contract with AT&T to provide services similar to those previously
provided to MCI. During the quarter ended 3/31/97 the Company reached a final
settlement of amounts due under the contract which permitted the recognition of
approximately $2.3 million of previously deferred contract revenue.
Results of Operations
Revenues increased $8.5 million, or 21.1%, from $40.5 million in the first
quarter of 1996 to $49.0 million in the first quarter of 1997. Approximately
69% of the increase in revenues is due to increased sales volumes in the
Direct Services and Medical Services groups. Revenues in the Media and Sampling
Services group increased approximately $2.1 million due to the growth of
existing products and programs as well as through the generation of revenues
from the Good Neighbor information centers which were acquired in January 1997.
Cost of services increased $4.3 million from $30.3 million in the first
quarter of 1996 to $34.6 million in the first quarter of 1997. Cost of services
as a percentage of revenues decreased from 74.8% in the first quarter of 1996
to 70.4% in first quarter of 1997. The decrease in cost of services as a
percentage of revenues resulted primarily from costs incurred for starting new
contracts during the first quarter of 1996 which were not incurred during the
first quarter of 1997, as well as the previously mentioned recognition of
deferred revenue.
Selling, general and administrative expenses combined with compensation
to stockholders increased $2.3 million from $7.4 million in the first quarter
of 1996 to $9.7 million in the first quarter of 1997. Selling, general and
administrative expenses combined with compensation to stockholders as a
percentage of revenues increased to 19.8% in the first quarter of 1997 from
18.2% in the first quarter of 1996. The increase in selling, general and
administrative expenses is due primarily to additional personnel expenses.
Interest expense decreased $209,000 to $301,000 in the first quarter of
1997 from $510,000 in the first quarter of 1996 because the Company redeemed in
full the subordinated debentures due to related parties in October 1996 with
proceeds from the offering.
The Company recorded a $1.3 million tax provision for the quarter ended
March 31, 1997, consisting of a $2.0 million provision for the $5.0 million in
income from recurring operations and interest and a $0.7 million benefit from
the $16.2 million of nonrecurring acquisition costs. The Company's effective
tax rate for the quarter ended March 31, 1997 differs from the Federal
statutory rate due primarily to the nondeductibility of certain of the
acquisition costs and state income taxes. The nonrecurring acquisition costs of
$16.2 million also resulted in a net loss of $12.5 million for the quarter
ended March 31, 1997. Without the nonrecurring acquisition costs, the Company
would have recorded net income of $2.9 million or $0.08 per share.
Liquidity and Capital Resources
At March 31, 1997, the Company has $37.6 million in cash and equivalents.
Cash and equivalents decreased $15.8 million during the three months ended
March 31, 1997. Operating activities used $5.6 million in cash due primarily to
the net loss recorded from the nonrecurring acquisition costs, which included
the $9.1 million noncash expense from the accelerated vesting of options held
by Brann employees. Investing activities used $9.8 million in cash due to the
purchases of personal property and equipment and Good Neighbor. Financing
activities used $0.9 million in cash due to $5.1 million used to redeem the
Brann preferred shares and the net $1.8 million used to pay distributions and
dividends to stockholders of the Pooled Entities prior to their mergers with
SCI, the note payable, and capital lease obligations, offset by the $6.0
million in proceeds from the exercise of stock options.
At March 31, Brann had outstanding debt of $6.5 million. On April 14, 1997
the full amount of the outstanding debt was repaid in full. No gain or loss was
recorded in connection with the repayment of the debt.
10
<PAGE> 11
The Company expects to continue to grow through both internal expansion and
complementary acquisitions. The Company believes that its cash and equivalents
as well as cash provided by operations will be sufficient to fund its current
operations and planned capital expenditures. Acquisitions will initially be
financed using the Company's excess cash and equivalents, but depending on the
amount necessary to complete an acquisition, additional funding may be
required.
11
<PAGE> 12
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
Matters as specified in the Company's Proxy Statement dated April 2, 1997, a
copy of which has previously been filed with the Securities and Exchange
Commission, were considered and approved by the Company's stockholders at the
Annual Meeting of Stockholders held on May 7, 1997. The results of such matters
are as follows.
Proposal 1: To elect seven directors of the Company, each to serve for a
one-year term expiring at the Company's 1998 Annual Meeting of Stockholders,
and until his or her respective successor is elected and qualified or until his
or her earlier resignation or removal.
<TABLE>
<CAPTION>
Total Votes
-----------
Total Votes For Against or Withheld
--------------- -------------------
<S> <C> <C>
Daniel M. Snyder 34,664,327 8,337
Michele D. Snyder 34,664,327 8,337
A. Clayton Perfall 34,664,327 8,337
Mortimer B. Zuckerman 34,544,752 127,912
Fred Drasner 34,545,727 126,937
Philip Guarascio 34,663,527 9,137
Mark E. Jennings 34,664,477 8,187
</TABLE>
Proposal 2: To amend and restate the Company's 1996 Stock Incentive Plan.
<TABLE>
<CAPTION>
Total Total Votes Number of
----- ----------- ----------
Votes For Against or Withheld Abstentions
----------- --------------------- -----------
<S> <C> <C> <C>
Amend and restate the 1996 Stock Incentive Plan 26,697,951 7,960,373 14,340
</TABLE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
The following documents are filed as exhibits to this report.
3.1 Certificate of Incorporation of the Registrant (Incorporated by
reference to Exhibit 3.2 forming a part of the Company's
Registration Statement.)
3.2 Bylaws of the Registrant (Incorporated by reference to Exhibit
3.1 forming a part of the Companys Registration Statement on
Form S-1 (File No. 333-7495) filed with the Securities and
Exchange commission under the Securities Act of 1933, as amended
(the "Registration Statement.")
4.1 Specimen Stock Certificate (Incorporated by reference to Exhibit
4.2 forming a part of the company's Registration Statement.)
10.1 1996 Stock Incentive Plan (Incorporated by reference to Exhibit
10.1 forming a part of Amendment No. 3 to the Registration
Statement).
10.2 Professional Services Agreement, dated February 16, 1996, as
amended, between the Company and AT&T Communications
(Incorporated by reference to Exhibit 10.2 forming a part of
Amendment No. 1 to the Registration Statement.)
10.3 Services Agreement between the Company and U.S. News & World
Report, L.P. (Incorporated by reference to Exhibit 10.4 forming
a party of Amendment No. 1 to the Registration Statement.)
12
<PAGE> 13
10.4 Registration Rights Agreement among the Company and certain
stockholders (Incorporated by reference to Exhibit 10.5 forming
a part of Amendment No. 3 to the Registration Statement.)
10.5 Lease Agreement, Democracy Center, Bethesda, Maryland, as amended
between the Company and Democracy Associates Limited Partnership
(Incorporated by reference to Exhibit 10.6 forming a part of
Amendment No. 1 to the Registration Statement.)
10.6 (a) Employment Agreement between the Company and Daniel M. Snyder
(Incorporated by reference to Exhibit 10.7 forming a part of
Amendment No. 1 to the Registration Statement.)
(b) Employment Agreement between the Company and Michele D.
Snyder (Incorporated by reference to Exhibit 10.8 forming a part
of Amendment No. 1 to the Registration Statement.)
(c) Employment Agreement between the Company and Susan Marentis
(Incorporated by reference to Exhibit 10.10 forming a part of
Amendment No. 1 to the Registration Statement.)
(d) Employment Agreement between the Company and Terry Bateman
(Incorporated by reference to Exhibit 10.7 forming a part of the
1996 Annual Report on Form 10-K filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended ("Form 10-K").)
(e) Employment Agreement between the Company and Mitchell N.
Gershman (Incorporated by reference to Exhibit 10.8 forming a
part of the Form 10-K.)
27.1 Financial Data Schedule
(b) Reports on Form 8-K
(1) Current Report on Form 8-K, filed on April 2, 1997, reporting an
Item 2 (Acquisition or Disposition of Assets), an Item 5 (Other
Event), and an Item 7 (Financial Statements, Pro Forma Financial
Information and Exhibits).
(2) Current Report on Form 8-K/A, filed on March 24, 1997, reporting an
Item 7 (Financial Statements, Pro Forma Financial Information and
Exhibits).
(3) Current Report on Form 8-K, filed on January 31, 1997, reporting an
Item 2 (Acquisition or Disposition of Assets), and an Item 7
(Financial Statements, Pro Forma Financial Information and
Exhibits).
(4) Current Report on Form 8-K, filed on January 17, 1997, reporting an
Item 2 (Acquisition or Disposition of Assets), and an Item 7
(Financial Statements, Pro Forma Financial Information and
Exhibits).
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SNYDER COMMUNICATIONS, INC.
(Registrant)
Date: May 15, 1997 By: /s/ MICHELE D. SNYDER
--------------------- ------------------------
Michele D. Snyder
Vice Chairman, President and
Chief Operating Officer
(Duly Authorized Officer)
Date: May 15, 1997 /s/ A. CLAYTON PERFALL
--------------------- ------------------------
A. Clayton Perfall
Chief Financial Officer
(Principal Financial Officer)
14
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<PERIOD-START> JAN-01-1997
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