<PAGE>
U.S. 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 September 30, 1997
[ ] Transition Report Under Section 13 or 15(d) of the Exchange Act
For the transition period from ________________ to ____________________
Commission File Number 0-22439
FISHER COMPANIES INC.
(Exact Name of Registrant as Specified in Its Charter)
WASHINGTON 91-0222175
------------------------------- ---------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification Number
1525 ONE UNION SQUARE
600 University Street
Seattle, Washington 98101-3185
(Address of Principal Executive Offices) (Zip Code)
(206) 624-2752
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act 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, $2.50 par value, outstanding as of September 30, 1997:
4,267,716
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following Consolidated Financial Statements are presented for the
Registrant, Fisher Companies Inc. and wholly owned subsidiaries.
1. Consolidated Statement of income:
Nine months ended September 30, 1997 and 1996.
2. Consolidated Balance sheet:
September 30, 1997 and December 31, 1996.
3. Consolidated Statement of Cash Flows:
Nine months ended September 30, 1997 and 1996.
4. Notes to Consolidated Financial Statements.
1
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ITEM 1 - FINANCIAL STATEMENTS
FISHER COMPANIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
(In thousands except share and per share amounts)
(Unaudited)
Sales and other revenue:
Broadcasting $ 85,017 $ 77,839 $ 28,964 $ 26,953
Milling 95,375 100,891 31,031 35,713
Real estate 8,530 10,741 2,813 2,748
Corporate and other, primarily dividends and interest income 2,773 3,076 980 946
---------- ---------- ---------- ----------
191,695 192,547 63,788 66,360
Costs and expenses:
Cost of products and services sold 122,483 125,104 41,156 43,576
Selling expenses 13,537 12,283 4,525 4,328
General, administrative and other expenses 26,759 24,081 8,565 8,373
---------- ---------- ---------- ----------
162,779 161,468 54,246 56,277
---------- ---------- ---------- ----------
Income from operations 28,916 31,079 9,542 10,083
Interest expense 4,147 4,254 1,357 1,542
---------- ---------- ---------- ----------
Income before provision for income taxes 24,769 26,825 8,185 8,541
Provision for federal and state income taxes 8,454 9,214 2,786 2,944
---------- ---------- ---------- ----------
Net income $ 16,315 $ 17,611 $ 5,399 $ 5,597
---------- ---------- ---------- ----------
Net income per common share $3.80 $4.13 $1.25 $1.31
---------- ---------- ---------- ----------
Weighted average common shares and equivalents outstanding 4,288,677 4,265,172 4,292,886 4,265,172
---------- ---------- ---------- ----------
Dividends declared per share $1.72
</TABLE>
See accompanying notes to consolidated financial statements.
2
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FISHER COMPANIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1997 1996
------------ -----------
<S> <C> <C>
ASSETS
(In thousands except share amounts)
(Current year unaudited)
Current Assets:
Cash and short-term cash investments $ 4,905 $ 5,116
Receivables 40,938 44,759
Inventories 14,410 13,199
Prepaid expenses 5,465 7,859
Television and radio broadcast rights 9,935 5,383
-------- --------
Total current assets 75,653 76,316
-------- --------
Marketable Securities, at market value 163,068 121,545
-------- --------
Other Assets:
Cash value of life insurance and retirement deposits 9,536 9,362
Television and radio broadcast rights 201 317
Intangible assets, net of amortization 49,859 47,982
Other 3,976 4,033
-------- --------
63,572 61,694
-------- --------
Property, Plant and Equipment, net 141,075 134,594
-------- --------
$443,368 $394,149
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 15,346 $ 9,258
Trade accounts payable 5,160 8,674
Accrued payroll and related benefits 4,531 4,536
Television and radio broadcast rights payable 9,194 5,036
Income taxes payable 1,147
Other current liabilities 3,240 5,244
-------- --------
Total current liabilities 37,471 33,895
-------- --------
Long-term Debt, net of current maturities 59,914 65,713
-------- --------
Other Liabilities:
Accrued retirement benefits 11,622 11,924
Deferred income taxes 64,217 49,483
Television and radio broadcast rights payable, long-term portion 37 296
Deposits and retainage payable 751 676
-------- --------
76,627 62,379
-------- --------
Minority Interests 33 33
-------- --------
Stockholders' Equity:
Common stock, shares authorized 12,000,000, $2.50 par value;
issued 4,267,716 in 1997 and 4,265,172 in 1996 10,669 10,663
Capital in excess of par 277 48
Unrealized gain on marketable securities, net of deferred
income taxes of $56,697 in 1997 and $42,164 in 1996 105,294 78,304
Retained earnings 153,083 143,114
-------- --------
269,323 232,129
-------- --------
$443,368 $394,149
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
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FISHER COMPANIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30 1997 1996
- ------------------------------ -------- --------
<S> <C> <C>
(In thousands)
(Unaudited)
Cash flows from operating activities:
Net income $ 16,315 $ 17,611
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 9,034 7,921
Noncurrent deferred income taxes 201 636
Issuance of stock pursuant to vested stock rights
and related tax benefit 191
Gain on sale of real estate (2,300)
Change in operating assets and liabilities:
Receivables 3,821 3,143
Inventories (1,211) (6,416)
Prepaid expenses 2,394 2,273
Cash value of life insurance and retirement deposits (174) 54
Other assets 57 (500)
Trade accounts payable, accrued payroll and related
benefits and other current liabilities (5,523) 82
Income taxes payable (1,147) 1,352
Accrued retirement benefits (302) (77)
Deposits and retainage payable 75 (99)
Amortization of television and radio broadcast rights 6,342 6,024
Payments for television and radio broadcast rights (6,879) (6,449)
-------- --------
Net cash provided by operating activities 23,194 23,255
======== ========
Cash flows from investing activities:
Proceeds from sale of real estate 2,860
Purchase assets of radio stations (3,949) (36,684)
Purchase of property, plant and equipment (13,443) (6,442)
-------- --------
Net cash used in investing activities (17,392) (40,266)
======== ========
Cash flows from financing activities:
Net borrowings under notes payable 6,118 (3,349)
Borrowings under borrowing agreements and mortgage loans 44,000
Payments on borrowing agreements and mortgage loans (5,829) (30,934)
Proceeds received from exercise of stock options 44
Cash dividends paid (6,346) (5,573)
-------- --------
Net cash (used in) provided by financing activities (6,013) 4,144
======== ========
Net change in cash and short-term cash investments (211) (12,867)
Cash and short-term cash investments, beginning of period 5,116 19,489
-------- --------
Cash and short-term cash investments, end of period $ 4,905 $ 6,622
======== ========
See accompanying notes to consolidated financial statements.
</TABLE>
4
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FISHER COMPANIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The unaudited financial information furnished herein, in the opinion of
management, reflects all adjustments which are necessary to state fairly the
consolidated financial position, results of operations, and cash flows of
Fisher Companies Inc. (the "Company") as of and for the periods indicated.
The Company presumes that users of the interim financial information herein
have read or have access to the Company's audited consolidated financial
statements and that the adequacy of additional disclosure needed for a fair
presentation, except in regard to material contingencies or recent subsequent
events, may be determined in that context. Accordingly, footnote and other
disclosures which would substantially duplicate the disclosures contained in
Form 10 for the year ended December 31, 1996 filed on June 18, 1997 by the
Company have been omitted. The financial information herein is not
necessarily representative of a full year's operations.
2. In February 1997, Statement of Financial Accounting Standards No. 128,
Earnings per Share (SFAS 128), was issued. This pronouncement modifies the
calculation and disclosure of earnings per share (EPS) and will be adopted by
the Company in its financial statements for the year ended December 31, 1997.
Early adoption is not permitted. After the adoption date, EPS data for all
periods presented, including quarterly financial data, is required to be
restated to conform to the provisions of SFAS 128. Adoption of SFAS 128 is
not expected to have a material impact on the Company's EPS.
In July 1997, Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information (SFAS
131), was issued. This pronouncement modifies the required disclosures of
segment information on a quarterly and an annual basis. SFAS 131 is required
to be adopted by the Company for the year ended December 31, 1998. Early
adoption is permitted. The Company is currently reviewing the requirements of
SFAS 131 and has not made a decision regarding its impact on the Company's
disclosures or its period of adoption.
3. Inventories are summarized as follows (in thousands):
<TABLE>
<CAPTION>
September 30 December 31
1997 1996
------------ -----------
<S> <C> <C>
Finished products $ 3,943 $ 4,758
Raw materials 10,266 8,255
Spare parts and supplies 201 186
------- -------
$14,410 $13,199
======= =======
</TABLE>
4. Dividends declared in March 1996 were payable quarterly at the rate of $.43
per share. In December 1996 an annual dividend in the amount of $1.96 per
share was declared, payable quarterly during 1997 at the rate of $.49 per
share.
5
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS
OF OPERATIONS
CONSOLIDATED RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1996
Sales and other revenue for the nine months ended September 30, 1997 decreased
by $852,000 or .4% to $191,695,000 from $192,547,000 for the nine months ended
September 30, 1996. Broadcasting operations had an increase in sales and other
revenue of 9.2% while sales and other revenue for milling and real estate
operations decreased 5.5% and 20.6%, respectively. Sales and other revenue for
the corporate segment declined as a result of reduced interest income from
short-term cash investments which were used to partially fund the June 1996
radio acquisition.
Cost of products and services sold for the nine months ended September 30, 1997
decreased by $2,621,000 or 2.1% to $122,483,000 from $125,104,000 for the nine
months ended September 30, 1996. The decrease reflects lower costs to produce
flour offset by increased costs to acquire and produce broadcasting programming.
As a percentage of sales and other revenue, cost of products and services sold
was 63.9% and 65.0% for the nine months ended September 30, 1997 and 1996,
respectively. The decrease in cost of products and services sold as a
percentage of sales and other revenue was due primarily to improved margins at
broadcasting and milling operations.
Selling expenses for the nine months ended September 30, 1997 increased by
$1,254,000 or 10.2% to $13,537,000 from $12,283,000 for the nine months ended
September 30, 1996. The increase is the result of increased commissions and
related expenses resulting from increased broadcasting revenue, increased volume
of flour sold, and additional selling expenses incurred at recently acquired
radio stations. As a percentage of sales and other revenue, selling expenses
were 7.1% and 6.4% for the nine months ended September 30, 1997 and 1996,
respectively.
General and administrative expenses for the nine months ended September 30, 1997
increased by $2,678,000 or 11.1% to $26,759,000 from $24,081,000 for the nine
months ended September 30, 1996. The increase relates primarily to general and
administrative expenses at recently acquired radio stations as well as increased
personnel and other administrative expense at each segment. As a percentage of
sales and other revenue, general and administrative expenses were 14.0% and
12.5% for the nine months ended September 30, 1997 and 1996, respectively.
Interest expense for the nine months ended September 30, 1997 decreased by
$107,000 or 2.5% to $4,147,000 from $4,254,000 for the nine months ended
September 30, 1996. The decrease in interest expense is due to lower average
long-term debt balances outstanding and lower average interest rates during the
nine months ended September 30, 1997 compared to the nine months ended September
30, 1996. The average interest rate was 7.0% and 7.1% in 1997 and 1996,
respectively.
Provision for federal and state income taxes for the nine months ended September
30, 1997 decreased by $760,000 or 8.2% to $8,454,000 from $9,214,000 for the
nine months ended
6
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September 30, 1996. For the nine months ended September 30, 1997 and 1996, the
Company's effective tax rate was 34.1% and 34.3%, respectively.
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1996
Sales and other revenue for the three months ended September 30, 1997 decreased
by $2,572,000 or 3.9% to $63,788,000 from $66,360,000 for the three months ended
September 30, 1996. Broadcasting and real estate operations had increases in
sales and other revenue of 7.5% and 2.4%, respectively while sales and other
revenue for milling operations decreased 13.1%. Sales and other revenue for the
corporate segment increased as a result of increased dividends from marketable
securities, partially offset by reduced interest income from short-term cash
investments which were used to partially fund the June 1996 radio acquisition.
Cost of products and services sold for the three months ended September 30, 1997
decreased by $2,420,000 or 5.6% to $41,156,000 from $43,576,000 for the three
months ended September 30, 1996. The decrease reflects lower costs to produce
flour offset by increased costs to acquire and produce broadcasting programming.
As a percentage of sales and other revenue, cost of products and services sold
was 64.5% and 65.7% for the three months ended September 30, 1997 and 1996,
respectively.
Selling expenses for the three months ended September 30, 1997 increased by
$197,000 or 4.6% to $4,525,000 from $4,328,000 for the three months ended
September 30, 1996. The increase is the result of increased commissions and
related expenses resulting from increased broadcasting revenue, increased volume
of flour sold, and additional selling expenses incurred at recently acquired
radio stations. As a percentage of sales and other revenue, selling expenses
were 7.1% and 6.5% for the three months ended September 30, 1997 and 1996,
respectively.
General and administrative expenses for the three months ended September 30,
1997 increased by $192,000 or 2.3% to $8,565,000 from $8,373,000 for the three
months ended September 30, 1996. The increase relates primarily to general and
administrative expenses at recently acquired radio stations as well as increased
personnel and other administrative expense at each segment. As a percentage of
sales and other revenue, general and administrative expenses were 13.4% and
12.6% for the three months ended September 30, 1997 and 1996, respectively.
Interest expense for the three months ended September 30, 1997 decreased by
$185,000 or 12.0% to $1,357,000 from $1,542,000 for the three months ended
September 30, 1996. The decrease in interest expense is due to lower average
long-term debt balances outstanding and lower average interest rates during the
three months ended September 30, 1997 compared to the three months ended
September 30, 1996.
Provision for federal and state income taxes for the three months ended
September 30, 1997 decreased by $158,000 or 5.4% to $2,786,000 from $2,944,000
for the three months ended September 30, 1996. For the three months ended
September 30, 1997 and 1996, the Company's effective tax rate was 34.0% and
34.5%, respectively.
7
<PAGE>
BROADCASTING OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1996
Broadcasting revenue for the nine months ended September 30, 1997 increased by
$7,178,000 or 9.2% to $85,017,000 from $77,839,000 for the nine months ended
September 30, 1996. The increase in broadcasting revenue is, in part, due to
revenue earned at KWJJ-AM/FM and six radio stations in eastern Washington and
Montana which were acquired between May 1996 and January 1997. These stations
contributed net revenue of approximately $3,400,000 during the nine months ended
September 30, 1997. Revenue from the Company's Seattle radio stations (KOMO-AM,
KVI-AM and KPLZ-FM) increased $2,600,000 over the nine months ended September
30, 1996 due to a strong advertising market during the nine months ended
September 30, 1997. Increased local and national revenues at the two television
stations were partially offset by lower political advertising revenue, as 1997
is not a major political year.
Operating income for the nine months ended September 30, 1997 increased by
$1,941,000 or 8.8% to $24,081,000 from $22,140,000 for the nine months ended
September 30, 1996. The increase in operating income is the result of increased
revenue. As a percentage of broadcasting revenue, operating income was 28.3%
and 28.4% for the nine months ended September 30, 1997 and 1996, respectively.
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1996
Broadcasting revenue for the three months ended September 30, 1997 increased by
$2,011,000 or 7.5% to $28,964,000 from $26,953,000 for the three months ended
September 30, 1996. Revenue from the Company's Seattle radio stations increased
approximately $700,000 over the three months ended September 30, 1996 due to a
strong advertising market. As noted above, 1997 is not a major political year,
and increased local and national revenues at KOMO Television in Seattle were
partially offset by lower political advertising revenue, resulting in increased
revenue of $1,400,000 for that station over the three months ended September 30,
1996.
Operating income for the three months ended September 30, 1997 increased by
$454,000 or 5.9% to $8,167,000 from $7,713,000 for the three months ended
September 30, 1996. The increase in operating income is the result of increased
revenue. As a percentage of broadcasting revenue, operating income was 28.2%
and 28.6% for the three months ended September 30, 1997 and 1996, respectively.
MILLING OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1996
Revenue from the milling subsidiary for the nine months ended September 30, 1997
decreased by $5,516,000 or 5.5% to $95,375,000 from $100,891,000 for the nine
months ended September 30, 1996. Milling division revenue decreased $946,000 or
1.6%, as an increase in flour sales
8
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volume was more than offset by declining flour prices. Revenue from food
distribution decreased $4,284,000 or 10.9% as sales volume and prices decreased.
Operating income for the nine months ended September 30, 1997 decreased by
$650,000 or 26.1% to $1,844,000 from $2,494,000 for the nine months ended
September 30, 1996. As a percentage of milling division revenue, operating
income was 1.9% and 2.5% for the nine months ended September 30, 1997 and 1996,
respectively. The gross margin percentage for the milling division was 9.7% and
9.5% for the nine months ended September 30, 1997 and 1996, respectively. The
gross margin percentage for the food distribution division was 16.8% and 14.7%
for the nine months ended September 30, 1997 and 1996, respectively. Operating
income decreased due to lower revenue and increases in depreciation, selling and
general and administrative expenses associated with growth of the milling
segment.
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1996
Revenue from the milling subsidiary for the three months ended September 30,
1997 decreased by $4,682,000 or 13.1% to $31,031,000 from $35,713,000 for the
three months ended September 30, 1996. Milling division revenue decreased
$2,599,000 or 11.6%, as an increase in flour sales volume was more than offset
by declining flour prices. Revenue from food distribution decreased $1,904,000
or 14.6% as sales volume and prices decreased.
Operating income for the three months ended September 30, 1997 decreased by
$669,000 or 62.9% to $394,000 from $1,063,000 for the three months ended
September 30, 1996. As a percentage of milling division revenue, operating
income was 1.3% and 3.0% for the three months ended September 30, 1997 and 1996,
respectively. The gross margin percentage for the milling division was 8.6% and
9.5% for the three months ended September 30, 1997 and 1996, respectively. The
gross margin percentage for the food distribution division was 17% and 16% for
the three months ended September 30, 1997 and 1996, respectively. Operating
income decreased due to lower revenue and increases in depreciation, selling and
general and administrative expenses associated with growth of the milling
segment.
REAL ESTATE OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1996
Real estate revenue for the nine months ended September 30, 1997 decreased by
$2,211,000 or 20.6% to $8,530,000 from $10,741,000 for the nine months ended
September 30, 1996. The decrease in real estate revenue is primarily due to the
absence of a gain on sale of real estate amounting to $2,300,000 which occurred
in April 1996, partially offset by increased rental and management fee income.
Average occupancy levels for the nine months ended September 30, 1997 and 1996
were 93.3% and 95.3%, respectively. The decline in average occupancy is largely
attributable to the vacancy on June 30, 1997 of a tenant as a result of
bankruptcy.
Operating income for the nine months ended September 30, 1997 decreased by
$2,666,000 or 53.2% to $2,343,000 from $5,009,000 for the nine months ended
September 30, 1996. As a percentage of revenue, operating income was 27.5% and
46.6% for the nine months ended
9
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September 30, 1997 and 1996, respectively. The decrease in operating income as a
percentage of real estate revenue was due to the 1996 real estate gain referred
to above as well as to higher personnel costs and other expenses in 1997.
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1996
Real estate revenue for the three months ended September 30, 1997 increased by
$65,000 or 2.4% to $2,813,000 from $2,748,000 for the three months ended
September 30, 1996. The increase in real estate revenue is primarily due to
increased rental and management fee income.
Operating income for the three months ended September 30, 1997 decreased by
$229,000 or 26.4% to $638,000 from $867,000 for the three months ended September
30, 1996. As a percentage of revenue, operating income was 22.7% and 31.6% for
the three months ended September 30, 1997 and 1996, respectively. The decrease
in operating income as a percentage of real estate revenue was due to higher
personnel costs and other expenses in 1997, partially offset by increased
revenue.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1997, the Company had working capital of $38,182,000 and
cash and short-term cash investments totaling $4,905,000. The Company intends
to finance working capital, debt service, capital expenditures and dividend
requirements primarily through operating activities. However, the Company will
consider using available lines of credit to fund acquisition activities and
significant real estate project development activities.
Net cash provided by operating activities was $23,194,000 for the nine months
ended September 30, 1997. Net cash provided by operating activities consists of
the Company's net income, increased by non-cash expenses such as depreciation
and amortization, and adjusted by changes in components of working capital. Net
cash used in investing activities was $17,392,000 for the nine months ended
September 30, 1997. The principle uses of cash in investing activities were
$3,949,000 for acquisition of the assets of two radio stations in Montana and
$13,443,000 to purchase property, plant and equipment used in operations. Net
cash used in financing activities was $6,013,000 for the nine months ended
September 30, 1997. Cash provided for financing activities was obtained through
net borrowings of $6,118,000 under lines of credit and notes from shareholders
and directors. Proceeds from these net borrowings were used to finance
acquisition of assets of two Montana radio stations and purchase of property,
plant and equipment to the extent such purchases exceeded net cash provided by
operating activities. In addition, during the nine months ended September 30,
1997 the Company repaid $5,829,000 due on borrowing agreements and mortgage
loans and received proceeds of $44,000 from the exercise of stock options. Cash
paid for dividends to stockholders totaled $6,346,000 or $1.47 per common share.
The Company has committed up to $10 million to the milling subsidiary to fund
the milling subsidiary's share of the cost to construct a conventional flour
mill in Blackfoot, Idaho which
10
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will be owned and operated by Koch Fisher Mills L.L.C. in which the milling
subsidiary has a 50% interest. Construction of the flour mill is expected to be
complete in late 1998.
At a special meeting held on October 30, the boards of directors of Fisher
Broadcasting, Fisher Properties, and Fisher Companies approved management's
recommendations for redevelopment of the KOMO Block site on which KOMO
Television is currently located.
The KOMO Block Project encompasses several elements, the most essential of which
are the construction of a new facility for KOMO Television and the laying of
groundwork for Fisher Broadcasting's future. The Telecommunications Act of 1996
is very specific in its mandate that commercial broadcasters continue to operate
in the public interest, including delivery of advanced digital television. This
plan for redevelopment of the KOMO Block meets the provisions of the mandate and
prepares Fisher Broadcasting for the business opportunities made possible by
these new technologies.
Construction of the new KOMO Building and associated underground parking
facilities will serve the needs of KOMO Television, Fisher Broadcasting, Fisher
Communications Inc., and eventually Seattle radio operations. While it is
envisioned that other tenants may occupy parts of the building, any such use
will be consistent with the overriding goal of providing flexible premises that
fully address the space and technological needs of Fisher Broadcasting.
Accordingly, a master plan was approved for construction of the new KOMO
Building at an estimated cost of $79,000,000, a significant portion of which
will be financed through borrowing. The Company is evaluating the substantial
effects that the project could have on future operating results, including
increased interest and depreciation expenses, benefits from new industry
partnerships, and creation of new business opportunities.
In the year 2000, it is expected that broadcasting operations will move to the
new building, that the parking facilities will be complete, and the current KOMO
building will be demolished. Attention will be given to maximizing utilization
and value of the entire KOMO Block. If demand and economic conditions are
favorable, construction of an office building on the vacated studio site will be
considered. In this regard, Fisher Properties has approved the undertaking of
pre-development activities for additional development of the KOMO Block at an
estimated cost of $2,000,000.
<TABLE>
<CAPTION>
THE NEW KOMO BUILDING
Parking Garage KOMO Building
<S> <C> <C>
Parking Stalls 725
Gross Area 286,000 sf 203,000 sf
Estimated Costs $18,023,000 $61,013,000
Schedule:
Start Mid 1998 Late 1998
Finish Stage-one, Late 1999 Mid 2000
Stage-two, Late 2000
</TABLE>
11
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PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Under the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995, the Company cautions investors that any forward-looking statements or
projections made by the Company are subject to risks and uncertainties which may
cause actual results to differ materially from those projected. Important
factors that could cause those results to differ materially from those expressed
in this Form 10-Q include: material adverse changes in economic conditions,
including changes in inflation and interest rates; changes in laws and
regulations affecting the television and radio broadcasting business;
competitive factors in the television, radio and milling industries; and
material changes to accounting standards that would be adverse to the Company.
12
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PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: Exhibit 11, Statement re Computation of Per Share Earnings
Exhibit 27, Financial Data Schedule
(b) Reports on Form 8-K: None
13
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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 thereunto duly authorized.
FISHER COMPANIES INC.
(Registrant)
Dated November 13, 1997 /s/ William W. Krippaehne, Jr.
----------------------------- ------------------------------------
William W. Krippaehne, Jr.
President and Chief Executive Officer
Dated November 13, 1997 /s/ David D. Hillard
----------------------------- ------------------------------------
David D. Hillard
Senior Vice President and Chief
Financial Officer
14
<PAGE>
EXHIBIT 11
FISHER COMPANIES INC.
Computation of Per Share Earnings
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30 September 30
1997 1996 1997 1996
----------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Weighted average common shares
and equivalents outstanding
during the period:
Common shares 4,265,499 4,265,172 4,267,516 4,265,172
Restricted stock rights 13,620 12,746
Stock options 9,558 12,624
----------- ----------- --------- ----------
Total 4,288,677 4,265,172 4,292,886 4,265,172
=========== =========== ========== ==========
Net income $16,315,000 $17,611,000 $5,399,000 $5,597,000
=========== =========== ========== ==========
Net income per common share $3.80 $4.13 $ 1.25 $ 1.31
=========== =========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,905
<SECURITIES> 163,068
<RECEIVABLES> 42,312
<ALLOWANCES> 1,374
<INVENTORY> 14,410
<CURRENT-ASSETS> 75,653
<PP&E> 239,707
<DEPRECIATION> 98,632
<TOTAL-ASSETS> 443,368
<CURRENT-LIABILITIES> 37,471
<BONDS> 59,914
0
0
<COMMON> 10,669
<OTHER-SE> 228,654
<TOTAL-LIABILITY-AND-EQUITY> 443,368
<SALES> 188,922
<TOTAL-REVENUES> 191,695
<CGS> 122,483
<TOTAL-COSTS> 122,483
<OTHER-EXPENSES> 39,505
<LOSS-PROVISION> 791
<INTEREST-EXPENSE> 4,147
<INCOME-PRETAX> 24,769
<INCOME-TAX> 8,454
<INCOME-CONTINUING> 16,315
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,315
<EPS-PRIMARY> 3.80
<EPS-DILUTED> 0
</TABLE>
