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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 22, 1998
CMP MEDIA INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-22789 11-2240940
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) 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 22, 1998, CMP Media Inc. issued the following press release:
Manhasset, NY -- CMP MEDIA INC. (NASDAQ: CMPX) today announced financial results
for its third quarter and nine months ended September 30, 1998.
Revenues for the third quarter increased to a record $117.5 million as compared
to $114.2 million reported for the third quarter of 1997. Operating income for
the third quarter was $1.8 million versus $6.8 million last year. Net income was
$0.7 million, or $0.03 per share, compared to pro forma net income of $3.8
million, or $0.16 per share, for the same period in 1997.
For the nine-month period ended September 30, 1998, revenues increased to a
record $352.7 million from $341.1 million reported for the same period last
year. Operating income for the first nine months was $7.9 million as compared to
$19.4 million in 1997. Net income was $5.3 million, or $0.22 per share, compared
to pro forma net income of $8.0 million, or $0.35 per share, for the same period
in 1997.
"The softening of the U.S. technology advertising market has affected CMP's
sales and profits for the third quarter," said CMP President and CEO Michael S.
Leeds. "At the same time, we are pleased with the growth potential we are seeing
in newer businesses including Reality Research Inc., a new CMP subsidiary; our
alliance with BusinessWeek for a CEO/CIO conference; and the international
expansion of our Computer Reseller News and InformationWeek franchises.
"While we are continuing to invest prudently, we are also continuing to pare
back our cost structure in a manner which, if current market conditions persist,
should enable us to improve profitability relative to the availability of
business in the marketplace."
For the nine months, CMP retained its U.S. ad-page market share lead, with 24.3%
of the market, 3.3 market share points ahead of its closest competitor,
according to Toronto-based Inquiry Management Systems. Strong performances were
recorded by InformationWeek, VARBusiness, and Network Computing, which showed
ad-page growth of 23.1%, 13.4% and 3.8% respectively for the nine months.
Highlights of the quarter include announcements of:
- - The launch of Reality Research Inc., a Texas-based wholly-owned research
company that will provide technology vendors and users with customized
research and consulting services.
- - A joint effort between InformationWeek and BusinessWeek which together will
produce a conference targeting CEOs and CIOs this spring in conjunction
with CMP's new E-Business Forums.
- - The launch of Planet IT, a new online community for IT decision makers,
which debuted with more than $2 million in advertising commitments.
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- - The planned November launch of Computer Reseller News UK, a wholly-owned
publication that will bring the CRN brand's worldwide readership to more
than 320,000 key resellers.
In other news, the Compensation Committee of the CMP Board of Directors approved
on October 20, 1998, the repricing of outstanding options held by employees
other than members of senior management. The exercise price of the options was
reduced to $12.72 with the condition that the repriced options cannot be
exercised for one year after the date of repricing. The new exercise price,
which is more than 25% above yesterday's closing price for CMP's Class A Common
Stock as quoted on the Nasdaq National Market, affects options covering
approximately 500,000 shares of stock. The company currently has 23,053,756
shares of Common Stock outstanding. CMP has no plans to reprice outstanding
options held by any members of senior management.
"Our employees are critical to the growth of our company," Leeds said, "and we
believe that reducing the gap between the exercise price of the options and
today's market price will contribute to greater employee motivation and
retention which, in turn, will enhance stockholder value."
In connection with its initial public offering of 5,485,000 shares of Class A
Common Stock on July 25, 1997, the company terminated its S corporation election
and converted to C corporation status. Pro forma net income and pro forma net
income per share for 1997 are presented as if the company had been a C
corporation prior to January 1, 1997.
CMP Media Inc. (Nasdaq: CMPX) is a leading high-tech media company providing
essential information and marketing services to the entire technology
spectrum--the builders, sellers and users of technology worldwide. With its
portfolio of publications, custom publishing, Internet products, research and
conferences, CMP is uniquely positioned to offer marketers comprehensive,
integrated solutions tailored to meet their individual needs. Online editions of
the company's print publications, along with products and services created
exclusively for the Internet, can be found on CMPnet at http://www.CMPnet.com.
NSTL, the company's independent testing lab, serves government, corporate and
technology clients around the world.
This release may contain 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. Factors that could affect performance include decreased
demand for technology advertising, delays in new product introductions by
advertisers, the failure of advertisers to adopt new products and services
offered by CMP, economic instability in Asian and other foreign markets, and
costs of integrating newly acquired products and services into CMP operations.
For a more detailed discussion of these factors and others, see CMP's Securities
and Exchange Commission filings.
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CMP MEDIA INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
in thousands, except share and per share amounts
(unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
-------------------------------- -------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 117,470 $ 114,179 $ 352,710 $ 341,097
Operating costs and expenses:
Cost of revenues 52,617 45,117 155,638 136,289
Selling and promotion 40,181 37,579 121,513 115,134
General and administrative 22,904 20,229 67,688 65,780
Non-recurring compensation charge -- 4,449 -- 4,449
------------ ------------ ------------ ------------
Income from operations 1,768 6,805 7,871 19,445
------------ ------------ ------------ ------------
Gain on sales -- 3,042 1,320 3,042
Other income (expense), net (462) (3,171) 69 (8,294)
------------ ------------ ------------ ------------
Income before provision (benefit) for
income taxes $ 1,306 $ 6,676 $ 9,260 $ 14,193
Provision (benefit) for income taxes 563 (2,939) 3,991 (2,689)
------------ ------------ ------------ ------------
Net income $ 743 $ 9,615 $ 5,269 $ 16,882
============ ============ ============ ============
Net income per share - diluted $ 0.03 $ 0.22
============ ============
Weighted average number of shares of common
stock and dilutive securities 23,566,214 24,072,693
============ ============
Pro Forma Data:
Historical income before provision
for income taxes $ 6,676 $ 14,193
Pro forma provision for income taxes 2,911 6,188
------------ ------------
Pro forma net income $ 3,765 $ 8,005
============ ============
Pro forma net income per share - diluted $ 0.16 $ 0.35
============ ============
Pro forma weighted average number of shares
of common stock and dilutive securities 24,072,904 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.
November 12, 1998 By: /s/ Joseph E. Sichler
----------------------------------------------
Joseph E. Sichler
Vice President and Chief Financial Officer
(Principal Accounting Officer)
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