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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 27, 1997
CMP MEDIA INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-22789 11-2240940
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
600 COMMUNITY DRIVE
MANHASSET, NEW YORK 11030
(Address of principal executive offices) (Zip code)
(516) 562-5000
(Registrant's telephone number, including area code)
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CMP MEDIA INC.
INDEX
ITEM 5. OTHER EVENTS ...............................................1-3
SIGNATURE .............................................................4
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ITEM 5. OTHER EVENTS.
On October 27, 1997, CMP Media Inc. issued the following press release:
CMP MEDIA INC. ANNOUNCES THIRD QUARTER, NINE-MONTH RESULTS
Manhasset, NY -- CMP MEDIA INC. (NASDAQ: CMPX) today announced financial
results for its third quarter and nine months ended September 30, 1997.
Revenues for the third quarter were $114.2 million as compared to $110.6 million
reported for the third quarter of 1996. Inclusive of a non-recurring
compensation charge of $4.4 million, operating income for the third quarter was
$6.8 million as compared to $9.1 million reported for the same period last year.
Excluding the non-recurring compensation charge, operating income for the third
quarter was $11.3 million versus $9.1 million last year and the operating margin
was 9.9% as compared to 8.2% for the same period last year. The third quarter
pro forma net income was $3.8 million, or $0.16 per share; however, excluding
the compensation charge, pro forma net income was $6.3 million, or $0.26 per
share compared to pro forma net income of $5.0 million, or $0.22 per share, for
the same period in 1996.
The non-recurring compensation charge of $4.4 million resulted from a gift of
202,236 shares of Class A Common Stock made by the founders of the Company to
substantially all employees at the time of the Company's initial public
offering. In addition, pro forma net income for the quarter ended September 30,
1997 included an after-tax impairment charge of $1.1 million to write-off the
remaining carrying value of one of the Company's Internet investments as well as
an after-tax gain of $1.7 million from the sale of the circulation list of a
discontinued publication.
For the nine-month period ended September 30, 1997, revenues increased 12.5% to
$341.1 million from $303.2 million reported for the same period last year.
Operating income was $19.4 million, inclusive of the non-recurring compensation
charge, an increase of 22.2% from $15.9 million reported for the first nine
months of 1996. Excluding the non-recurring compensation charge, the operating
margin for the nine-month period was 7.0% as compared to 5.2% for the same
period last year.
For the first nine months, pro forma net income was $8.0 million, or $0.35 per
share, compared to pro forma net income of $9.8 million, or $0.44 per share, for
the same period in 1996; however, excluding the compensation charge, pro forma
net income was $10.5 million, or $0.46 per share.
Pro forma net income for the nine-month period ended September 30, 1997 included
first-quarter 1997 after-tax charges of $1.4 million related to a reduction in
the Company's work force and $0.7 million to reduce the carrying value of
certain of the Company's Internet investments in addition to the third-quarter
items previously discussed.
CMP President and CEO Michael Leeds said, "Our year-to-date results reflect
continued sales and market share growth in our core print publishing business.
For the nine months, our publications grew 6.5% in ad pages in a market that was
up 3%, resulting in an ad-page market share of 24.7%, the largest among our
competitors."
"We're experiencing robust growth in the Internet where year-to-date revenues
have tripled," Leeds said. "Dramatic as that growth is, it was less than we
expected, and we now believe that Internet revenues for the fourth quarter may
be approximately $2 million to $4 million less than previously anticipated."
In connection with its initial public offering of 5,485,000 shares of CMP Class
A Common Stock at an offering price of $22 per share on July 25, 1997, the
Company terminated its S corporation election and converted to C corporation
status. Pro forma net income for the third quarter and nine months ended
September 30, 1997 are presented as if the Company had been a C corporation
prior to January 1, 1996.
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CMP Media Inc. is a leading print and online publisher of newspapers and
magazines about technology. With U.S. publications focusing on computers,
electronics, information technology and the Internet, CMP serves the broad
technology spectrum: those who build it, those who sell it, and those who use
it. All publication titles, including WINDOWS Magazine, InformationWeek,
Computer Reseller News and EE Times, along with the company's products and
services created exclusively for the Internet, can be found on CMPnet at
http://CMPnet.com.
This release contains forward-looking statements that are subject to risks and
uncertainties. CMP's actual results could differ materially from those discussed
in such forward-looking statements, due to various factors which are outside
CMP's control. For a more detailed discussion of these factors and others, see
the Risk Factors section of CMP's prospectus filed as part of its registration
statement on Form S-1 (SEC File No. 333-26741).
(Tables to Follow)
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CMP MEDIA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
-------------------- -------------------
1996 1997 % CHANGE 1996 1997 % CHANGE
---- ---- --------- ---- ---- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 110,578 $ 114,179 3.3% $ 303,162 $ 341,097 12.5%
Operating costs and expenses:
Cost of revenues 46,253 45,117 (2.5%) 128,106 136,289 6.4%
Selling and promotion 34,800 37,579 8.0% 100,154 115,134 15.0%
General and administrative 20,445 20,229 (1.1%) 58,992 65,780 11.5%
Non-recurring compensation charge -- 4,449 100.0% -- 4,449 100.0%
----------- ----------- ----- ----------- ----------- -----
Income from operations 9,080 6,805 (25.1%) 15,910 19,445 22.2%
----------- ----------- ----- ----------- ----------- -----
Gain on sales of businesses 146 3,042 N/A 1,434 3,042 N/A
Other expense, net (655) (3,171) N/A (374) (8,294) N/A
----------- ----------- ----- ----------- ----------- -----
Income before provision (benefit) for
income taxes $ 8,571 $ 6,676 (22.1%) $ 16,970 $ 14,193 (16.4%)
Provision (benefit) for income taxes 279 (2,939) N/A 553 (2,689) N/A
----------- ----------- ----- ----------- ----------- -----
Net income $ 8,292 $ 9,615 16.0% $ 16,417 $ 16,882 2.8%
=========== =========== ===== =========== =========== =====
Pro Forma Data:
Historical income before provision
for income taxes $ 8,571 $ 6,676 (22.1%) $ 16,970 $ 14,193 (16.4%)
Pro forma provision for income taxes 3,614 2,911 (19.5%) $ 7,156 $ 6,188 (13.5%)
----------- ----------- ----- ----------- ----------- -----
Pro forma net income $ 4,957 $ 3,765 (24.0%) $ 9,814 $ 8,005 (18.4%)
=========== =========== ===== =========== =========== =====
Pro forma net income per share $ 0.22 $ 0.16 (27.3%) $ 0.44 $ 0.35 (20.5%)
=========== =========== ===== =========== =========== =====
Historical income before provision
for income taxes adjusted
for exclusion of the non-recurring
compensation charge $ 8,571 $ 11,125 29.8% $ 16,970 $ 18,642 9.9%
Adjusted pro forma provision for
income taxes 3,614 4,851 34.2% $ 7,156 $ 8,128 13.6%
----------- ----------- ----- ----------- ----------- -----
Adjusted pro forma net income $ 4,957 $ 6,274 26.6% $ 9,814 $ 10,514 7.1%
=========== =========== ===== =========== =========== =====
Adjusted pro forma net income
per share $ 0.22 $ 0.26 18.2% $ 0.44 $ 0.46 4.5%
=========== =========== ===== =========== =========== =====
Pro forma weighted average number of
shares of common stock and common
stock equivalents 22,361,777 24,072,904 22,361,777 22,932,153
=========== =========== =========== ===========
</TABLE>
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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 hereunto duly authorized.
CMP MEDIA INC.
December 9, 1997 By: /s/ Joseph E. Sichler
----------------------------------
Joseph E. Sichler
Vice President and Chief Financial Officer
(Principal Accounting Officer)
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