Page 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
--------------------------------
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: 1-2999
------------------------------
CHRIS-CRAFT INDUSTRIES, INC.
----------------------------
(Exact name of Registrant as specified in its charter)
Delaware 94-1461226
- ---------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
767 Fifth Avenue, New York, New York 10153
- ------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 421-0200
Indicate by check mark whether the 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
------- -------
As of October 31, 1995 there were 21,504,327 shares of the
issuer's Common Stock outstanding and 7,663,187 shares of the
issuer's Class B Common Stock outstanding.
<PAGE>
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<TABLE>
PART I -- FINANCIAL INFORMATION
CHRIS-CRAFT INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
-------------------------------------
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 142,321 $ 226,183
Marketable securities (substantially
all U.S. Government securities) 1,382,796 1,294,278
Accounts receivable, net 85,131 99,775
Film contract and prepaid broadcast rights 116,230 89,245
Prepaid expenses and other current assets 44,718 59,478
----------- -----------
Total current assets 1,771,196 1,768,959
----------- -----------
FILM CONTRACT AND PREPAID BROADCAST RIGHTS,
less current portion 52,453 59,228
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, net 48,564 51,624
----------- -----------
INTANGIBLE ASSETS 322,509 329,517
----------- -----------
OTHER ASSETS 43,344 22,889
----------- -----------
$ 2,238,066 $ 2,232,217
=========== ===========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
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<TABLE>
PART I -- FINANCIAL INFORMATION
CHRIS-CRAFT INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
-------------------------------------
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
(UNAUDITED)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
CURRENT LIABILITIES:
Film contracts payable within one year $ 95,531 $ 81,696
Accounts payable and other liabilities 119,222 100,984
Income taxes payable 33,026 60,877
----------- -----------
Total current liabilities 247,779 243,557
----------- -----------
FILM CONTRACTS PAYABLE AFTER ONE YEAR 93,479 89,048
----------- -----------
OTHER LIABILITIES 9,379 9,192
----------- -----------
MINORITY INTEREST 570,507 584,202
----------- -----------
SHAREHOLDERS' INVESTMENT:
Prior preferred stock - $1.00 dividend; currently
authorized 73,399 shares; outstanding 73,399 shares 1,578 1,578
Convertible preferred stock - $1.40 dividend;
currently authorized 279,007 shares;
outstanding 279,007 and 282,826 shares 4,883 4,949
Class B common stock - par value $.50 per share;
authorized 50,000,000 shares; outstanding
7,626,410 and 7,567,821 shares 3,813 3,784
Common stock - par value $.50 per share; authorized
100,000,000 shares; outstanding 21,960,227 and
20,979,174 shares 11,771 11,280
Capital surplus 322,883 298,090
Retained earnings 984,569 996,331
Treasury stock, at cost (17,791) -
Adjustment to reflect marketable
securities at market value 5,216 (9,794)
----------- -----------
1,316,922 1,306,218
----------- -----------
$ 2,238,066 $ 2,232,217
=========== ===========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
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<TABLE>
CHRIS-CRAFT INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of dollars except per share data)
(UNAUDITED)
-----------------------------------------------
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
---------------------- ----------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 115,584 $ 112,803 $ 349,527 $ 340,708
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Expenses directly associated with revenues 58,538 62,999 167,924 182,950
Selling, general and administrative 39,611 29,628 103,184 86,555
---------- ---------- ---------- ----------
98,149 92,627 271,108 269,505
---------- ---------- ---------- ----------
Operating income 17,435 20,176 78,419 71,203
---------- ---------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest and other income, net 21,224 16,995 60,977 46,297
Equity in United Paramount Network loss (28,722) (159) (95,834) (159)
---------- ---------- ---------- ----------
(7,498) 16,836 (34,857) 46,138
---------- ---------- ---------- ----------
Income before income taxes
and minority interest 9,937 37,012 43,562 117,341
INCOME TAX PROVISION (BENEFIT) (8,200) 2,200 7,400 36,500
---------- ---------- ---------- ----------
Income before minority interest 18,137 34,812 36,162 80,841
MINORITY INTEREST (7,473) (12,390) (18,828) (30,121)
---------- ---------- ---------- ----------
Net income $ 10,664 $ 22,422 $ 17,334 $ 50,720
========== ========== ========== ==========
Net income per share:
Primary $ .36 $ .75 $ .58 $ 1.70
========== ========== ========== ==========
Fully diluted $ .28 $ .58 $ .45 $ 1.31
========== ========== ========== ==========
3% STOCK 3% STOCK
DIVIDENDS PER COMMON SHARE NONE NONE DIVIDEND DIVIDEND
========== ========== ========== ==========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
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<TABLE>
CHRIS-CRAFT INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
(UNAUDITED)
-----------------------------------------------
<CAPTION>
Nine Months
Ended September 30,
----------------------
1995 1994
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 17,334 $ 50,720
Adjustments to reconcile net income to net cash
provided from operating activities:
Film contract payments (66,621) (92,279)
Film contract amortization 65,030 72,124
Prepaid broadcast rights 3,639 6,284
Depreciation and other amortization 15,148 15,736
Equity in United Paramount Network loss 95,834 159
Minority interest 18,828 30,121
Other 4,059 681
Changes in assets and liabilities:
Accounts receivable 14,644 12,293
Other assets (4,438) 1,185
Accounts payable and other liabilities 5,745 (1,338)
Income taxes (26,705) (7,330)
---------- ----------
Net cash provided from operating activities 142,497 88,356
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Dispositions (purchases) of marketable securities, net (45,027) 201,077
Investment in and advances to United Paramount Network (105,856) (289)
Capital expenditures, net (5,102) (8,555)
Other (8,649) (26)
---------- ----------
Net cash provided from (used in) investing activities (164,634) 192,207
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital transactions of subsidiaries (45,657) (69,368)
Purchase of treasury stock (17,795) (9,025)
Proceeds from option exercises 2,175 12,638
Other (448) (455)
---------- ----------
Net cash used in financing activities (61,725) (66,210)
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (83,862) 214,353
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 226,183 40,497
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 142,321 $ 254,850
========== ==========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
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CHRIS-CRAFT INDUSTRIES, INC.
----------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
1. PRINCIPLES OF CONSOLIDATION:
The accompanying condensed consolidated financial statements include
the accounts of Chris-Craft Industries, Inc. and its subsidiaries,
including Chris-Craft's majority owned (73% at September 30, 1995)
television broadcasting subsidiary, BHC Communications, Inc., and BHC's
majority owned (57% at September 30, 1995) subsidiary, United Television,
Inc. (UTV). The pro rata interests of BHC and UTV minority shareholders in
the net income of the respective companies are reflected in minority
interest in the accompanying condensed consolidated statements of income.
The minority shareholders' interests in the net assets of BHC and UTV are
reflected as minority interest in the accompanying condensed consolidated
balance sheets. Intercompany accounts and transactions have been
eliminated.
The financial information included herein has been prepared by
Chris-Craft, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. However,
Chris-Craft believes that the disclosures herein are adequate to make the
information presented not misleading. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and the notes thereto included in Chris-Craft's latest annual
report on Form 10-K. The information furnished reflects all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion
of management, necessary to a fair statement of the results for the interim
periods. Certain amounts for 1994 have been reclassified to conform to the
1995 presentation. The results for these interim periods are not
necessarily indicative of results to be expected for the full year, due to
seasonal factors, among others.
2. MARKETABLE SECURITIES:
In accordance with Statement of Financial Accounting Standards (SFAS)
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities", Chris-Craft classifies its marketable securities as available-
for-sale.
At September 30, 1995, Chris-Craft's marketable securities, which
consisted substantially of U.S. Government securities, had
a carrying value of $1,371,849,000 and a fair value of $1,382,796,000. The
difference of $10,947,000 ($5,216,000 net of income taxes and minority
interests) is reflected as an adjustment to shareholders' investment in the
accompanying condensed consolidated balance sheet. Of the investments in
U.S. Government securities, 80% mature within one year, 96% within two
years and all within four years.
At December 31, 1994, Chris-Craft's marketable securities, which
consisted substantially of U.S. Government securities, had a carrying value
of $1,319,763,000 and a fair value of $1,294,278,000. The difference of
$25,485,000 ($9,794,000 net of income taxes and minority interests) is
<PAGE>
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reflected as an adjustment to shareholders' investment in the accompanying
condensed consolidated balance sheet.
3. SHAREHOLDERS' INVESTMENT:
Chris-Craft paid 3% stock dividends on its common and Class B common
stock in the respective shares of such classes on April 4, 1995. During
the nine months ended September 30, 1995, 212,480 shares of Class B common
stock were converted into 212,480 shares of common stock, and 3,819 shares
of $1.40 convertible preferred stock were converted into 72,282 shares of
common stock and 45,555 shares of Class B common stock. In addition,
75,740 shares of common stock were issued upon exercise of stock options.
During the nine months period, 508,900 shares of common stock were
purchased by Chris-Craft, all of which were held in treasury at September
30, 1995. As of September 30, 1995, 1,197,402 shares of common stock and
12,899 shares of $1.00 prior preferred stock remained authorized for
purchase.
As of September 30, 1995, shares of Chris-Craft's authorized but
unissued common stock were reserved for issuance as follows:
Shares
----------
Conversion of Class B common stock 7,626,410
Conversion of $1.40 convertible
preferred stock 8,647,241*
Stock options (including options
outstanding for 1,772,455 shares) 3,503,185
----------
19,776,836
==========
*Including Class B common shares.
4. COMMITMENTS AND CONTINGENCIES:
Commitments of BHC's television stations for film contracts entered
into but not available for broadcasting at September 30, 1995 aggregated
approximately $141 million, including $27.8 million applicable to UTV. BHC
also has a commitment to invest over time up to $65 million, including $40
million applicable to UTV, in management buyout limited partnerships.
In July 1994, BHC and Viacom Inc.'s Paramount Television Group formed
the United Paramount Network, a fifth broadcast television network which
premiered January 1995. BHC currently owns 100% of UPN, and accounts for
UPN under the equity method since Paramount has an option exercisable
through January 15, 1997 to acquire an interest in UPN equal to that of
BHC. The option price is equivalent to approximately one-half of BHC's
aggregate cash contributions to UPN through the exercise date, plus
interest; payment may be deferred through the option expiration date. The
cost of developing UPN will be significant, and BHC has agreed to make
minimum UPN expenditures of at least $150,000,000 through 1996. Network
expenditures and related operating losses are expected to significantly
exceed such amount for that period, and to remain substantial thereafter.
As set forth in Item 1 herein and Note 9 of Notes to Consolidated
Financial Statements in Chris-Craft's 1994 Annual Report, Chris-Craft has
<PAGE>
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been named as a defendant in certain actions seeking recovery for
environmental damage allegedly related to the activities (discontinued
since 1983) of 50% owned Montrose Chemical Corporation of California.
Chris-Craft does not presently consider liability to be "probable" in any
of the Montrose-related matters, and no amount has been reserved in Chris-
Craft's financial statements.
5. INCOME PER SHARE:
Computations of income per share, all of which give retroactive effect
to the April 1995 3% stock dividend, are as follows (in thousands of
dollars except per share amounts):
<TABLE>
<CAPTION>
Three Months Nine months
Ended September 30, Ended September 30,
------------------------- ------------------------
1995 1994 1995 1994
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY:
--------
Average outstanding common
and Class B common shares 29,015,167 29,541,706 29,096,494 29,420,425
Assumed exercise of stock options 435,965 282,209 253,558 248,766
----------- ----------- ----------- -----------
Total shares used in computation 29,451,132 29,823,915 29,350,052 29,669,191
=========== =========== =========== ===========
Net income $ 10,664 $ 22,422 17,334 $ 50,720
Preferred stock dividend requirements (115) (117) (349) (354)
----------- ----------- ----------- -----------
$ 10,549 $ 22,305 16,985 50,366
=========== =========== =========== ===========
Primary income per share $ .36 $ .75 $ .58 $ 1.70
=========== =========== =========== ===========
FULLY DILUTED:
--------------
Average outstanding common
and Class B common shares 29,015,167 29,541,706 29,096,494 29,420,425
Assumed conversion of
$1.40 preferred stock 8,702,285 8,795,761 8,730,148 8,907,956
Assumed exercise of stock options 491,415 360,151 495,638 373,411
----------- ----------- ----------- -----------
Total shares used in computation 38,208,867 38,697,618 38,322,280 38,701,792
=========== =========== =========== ===========
Net income $ 10,664 $ 22,422 $ 17,334 $ 50,720
Preferred stock dividend requirements (18) (18) (55) (55)
----------- ----------- ----------- -----------
$ 10,646 $ 22,404 $ 17,279 $ 50,665
=========== =========== =========== ===========
Fully diluted income per share $ .28 $ .58 $ .45 $ 1.31
=========== =========== =========== ===========
</TABLE>
<PAGE>
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CHRIS-CRAFT INDUSTRIES, INC.
----------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
Liquidity and Capital Resources
-------------------------------
Chris-Craft's financial position is strong and highly liquid. Cash and
marketable securities totalled $1.5 billion at September 30, 1995, and
Chris-Craft has no debt outstanding. While Chris-Craft's 73% owned
television broadcasting subsidiary, BHC Communications, Inc., is currently
expending significant amounts to develop its United Paramount Network, such
expenditures for the first nine months of 1995 were less than the cash flow
generated by BHC's television station group.
Chris-Craft's operating cash flow is generated primarily by the Television
Division's core television station group. Broadcast cash flow reflects
station operating income plus depreciation and film contract amortization
less film contract payments. The relationship between film contract
payments and related amortization may vary greatly between periods
(payments exceeded amortization by $1.6 million and $20.2 million,
respectively, in the first nine months of 1995 and 1994), and is dependent
upon the mix of programs aired and payment terms of the stations'
contracts. Station earnings rose 11% in the first nine months of 1995, and
broadcast cash flow increased 34% from the corresponding 1994 amount, to
$117.8 million from $88.1 million last year. Although broadcast cash flow
is often used in the broadcast television industry as an ancillary measure,
it is not synonymous with operating cash flow computed in accordance with
generally accepted accounting principles, and should not be considered
alone or as a substitute for measures of performance computed in accordance
with generally accepted accounting principles.
Chris-Craft's cash flow additionally reflects earnings associated with its
cash and marketable securities, most of which are held by BHC.
Consolidated cash and marketable securities totalled $1.5 billion at
September 30, 1995 and December 31, 1994. First nine months operating cash
flow of $142.5 million was more than offset by United Paramount Network
funding of $105.9 million, treasury stock purchases by BHC and UTV
totalling $38.2 million and Chris-Craft treasury stock purchases of $17.8
million.
BHC generates most of Chris-Craft's consolidated cash flow. Parent company
obligations consist solely of corporate office expenditures, current and
accrued. Parent company cash balances were augmented in January 1993 upon
the receipt of $36 million in dividends from BHC, which paid a special cash
dividend of $2.00 per share, and were again augmented in April 1995 upon
the receipt of $18 million in dividends from BHC, which paid a special cash
dividend of $1.00 per share. BHC has no plan to pay dividends on a regular
basis. Chris-Craft parent company cash balances are substantially in
excess of normal operating requirements.
Since April 1990, BHC's Board of Directors has authorized the purchase of
up to 5,500,000 Class A common shares. Through September 30, 1995,
4,754,487 shares had been purchased for a total cost of $282.1 million,
including $16.9 million applicable to shares purchased in the first nine
months of 1995. Chris-Craft ownership in BHC accordingly increased to 73%
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at September 30, 1995 from 60% at December 31, 1989.
Chris-Craft intends to expand its operations in the media, entertainment
and communications industries and to explore business opportunities in
other industries. Chris-Craft believes it is capable of raising
significant additional capital to augment its already substantial financial
resources, if desired, to fund such additional expansion.
In July 1994, BHC and Viacom Inc.'s Paramount Television Group formed the
United Paramount Network, a fifth broadcast television network which
premiered January 1995. BHC currently owns 100% of UPN, and Paramount has
an option through January 15, 1997 to acquire an interest in UPN equal to
that of BHC. The option price is equivalent to approximately one-half of
BHC's aggregate cash contributions to UPN through the exercise date, plus
interest. BHC expenditures related to UPN totalled $105.9 million in the
first nine months of 1995. The cost of developing UPN will be significant,
and BHC has agreed to make minimum UPN expenditures of at least $150
million through 1996. UPN expenditures and related operating losses are
expected to significantly exceed such amount for that period, and to remain
substantial thereafter.
Chris-Craft's television stations make commitments for programming that
will not be available for telecasting until future dates. At September 30,
1995, commitments for such programming totalled approximately $141 million,
including $27.8 million applicable to UTV. In addition, BHC has a
commitment to invest over time up to $65 million, including $40 million
applicable to UTV, in management buyout limited partnerships. Chris-Craft
capital expenditures generally have not been material in relation to its
financial position, and the related capital expenditure commitments at
September 30, 1995 (including any related to UPN) were not material.
Chris-Craft expects that expenditures for UPN, future film contract
commitments and capital requirements for its present business will be
satisfied primarily from operations, marketable securities or cash
balances.
As set forth in Note 4, Chris-Craft has been named as a defendant in
certain actions seeking recovery for environmental damage allegedly related
to the activities (discontinued since 1983) of 50% owned Montrose Chemical
Corporation of California. As further set forth in Note 4, Chris-Craft
does not presently consider liability to be "probable" in any of the
Montrose-related matters, and no amount has been reserved in Chris-Craft's
financial statements.
Results of Operations
---------------------
Chris-Craft 1995 third quarter operating results reflect record television
station earnings and a substantial increase in interest income. However,
UPN start-up losses lowered net income, to $10,664,000, or $.36 per share,
from $22,422,000, or $.75 per share, in last year's period. Excluding UPN,
pretax income increased 4%, to $38,659,000 from $37,171,000.
Chris-Craft also achieved substantial increases in station earnings and
interest income for the first nine months of 1995. However, after UPN
start-up losses, Chris-Craft net income for the period declined to
$17,334,000, or $.58 per share, from $50,720,000, or $1.70 per share, last
year. Excluding UPN, Chris-Craft pretax income for the nine months
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increased 19%, to $139,396,000 from $117,500,000.
Operating revenues and operating income for the third quarter and nine
month periods ended September 30, 1995 and 1994 are as follows (in
thousands):
Operating Revenues Operating Income
------------------ ------------------
1995 1994 1995 1994
-------- -------- -------- --------
Third Quarter
Television Division $111,551 $107,259 $ 24,411 $ 25,162
Industrial Division 4,033 5,544 321 (645)
Corporate and other - - (7,297) (4,341)
-------- -------- -------- --------
$115,584 $112,803 $ 17,435 $ 20,176
======== ======== ======== ========
Nine Months
Television Division $336,979 $323,059 $ 91,989 $ 82,228
Industrial Division 12,548 17,649 1,191 237
Corporate and other - - (14,761) (11,262)
-------- -------- -------- --------
$349,527 $340,708 $ 78,419 $ 71,203
======== ======== ======== ========
Television station earnings increased 2% in the third quarter, to
$33,697,000 from $33,095,000 last year, as a 2% increase in station
operating revenues more than offset a 3% increase in station programming
expenses. The moderate increase in revenues reflects a softening in demand
for television advertising. Such demand appears to be softening further
and Chris-Craft expects fourth quarter revenues to be less than last
year's. Chris-Craft believes that broadcast television stations in general
are experiencing a reduction in the level of fourth quarter business.
Station earnings for the first nine months of 1995 increased 11%, to
$112,083,000 from $100,596,000, reflecting a 4% increase in operating
revenues and a 4% decline in programming expenses. Primarily due to one-
time expenses of approximately $3.7 million associated with establishing a
national sales representative subsidiary, Television Division operating
income, which further reflects program development expenses, goodwill
amortization and corporate office expenses of BHC and UTV, declined
slightly in the third quarter, to $24,411,000 from last year's $25,162,000.
Nine month Television Division operating income rose 12% even after the
one-time expenses, to $91,989,000 from last year's $82,228,000.
Industrial Division operating results have improved in 1995 following the
discontinuance of operations at its unprofitable fiber products plant.
While the elimination of that business resulted in a decline in 1995
Industrial Division operating revenues, the Division's continuing
businesses produced revenue increases of 7% in both the third quarter and
the nine months. Third quarter Industrial Division operating income
totalled $321,000, versus a $645,000 loss last year, and nine month
operating income increased to $1,191,000 from $237,000 last year.
After Chris-Craft corporate office expense, which increased in the 1995
periods primarily due to the rise in retirement plan expense resulting from
the third quarter increase in the market value of Chris-Craft common stock,
consolidated operating income declined 14% in the third quarter, to
<PAGE>
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$17,435,000 from $20,176,000. Nine month consolidated operating income
rose 10%, to $78,419,000 from $71,203,000.
UPN's pretax losses of $28,722,000 in the third quarter and $95,834,000 in
the nine month period were as expected, and are reflected in Chris-Craft's
financial statements under the equity method. UPN is in its infancy, and
will incur substantial start-up losses for several years.
Interest and other income increased to $21,224,000 from $16,995,000 in the
third quarter, and to $60,977,000 from $46,297,000 in the nine month
period, primarily reflecting higher interest rates on consolidated money
market holdings.
Income taxes in both third quarters reflect $20 million reversals by BHC of
state income taxes it accrued in 1989 and 1990, following the favorable
resolution in each quarter of routine audits.
<PAGE>
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CHRIS-CRAFT INDUSTRIES, INC.
----------------------------
PART II. OTHER INFORMATION
--------------------------
Item 1. Legal Proceedings.
------------------
As previously reported, on March 22, 1995, the U.S. District
Court in United States of America, et al. v. Montrose Chemical Corporation
of California, et al. granted the defendants' motion for summary judgment
on the first cause of action in the case, ruling that the government's
claim for natural resource damages was barred by the applicable statute of
limitations. The effect of this ruling is to dismiss the natural resource
damages claim in the action, while the second claim, seeking recovery for
alleged contamination at the former Montrose plant site in Torrance,
California, will continue to be litigated. In addition, the Court ruled on
other motions that the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA") would limit the collective maximum liability
of Montrose, Chris-Craft and the Zeneca Affiliates for natural resource
damages to $50 million and further that the government would bear the
burden of proving that any damages that occurred before CERCLA's enactment
in 1980 are indivisible from post-enactment damages. The District Court
certified its rulings for appeal, and on May 22, 1995 the U.S. Court of
Appeals for the Ninth Circuit accepted the appeal. Although the Ninth
Circuit indicated it would hear the appeal on an expedited basis, no oral
argument has yet been scheduled. Montrose, Chris-Craft and the Zeneca
Affiliates will vigorously defend the District Court's rulings in the
appeal, but the timing or outcome of the appeal cannot be predicted at this
time.
On August 30, 1995 Chris-Craft was among a group of defendants, including
Montrose and Zeneca, which reached a settlement and accordingly were
dismissed from T H Agriculture and Nutrition Company, Inc. v. Aceto
Chemical Co., Inc., Case No. CV-F-93-5404 DWW/DLB in the Federal District
Court for the Eastern District of California. Chris-Craft did not
contribute to the settlement, but received full releases from the
plaintiffs.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) The following exhibits are filed herewith:
Exhibit No. Description
----------- -----------
27 Financial Data Schedule
(b) No report on Form 8-K was filed during the quarter for which
this report is filed.
<PAGE>
Page 14
SIGNATURE
---------
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.
CHRIS-CRAFT INDUSTRIES, INC.
----------------------------
(Registrant)
By: /s/ JOELEN K. MERKEL
----------------------------
Joelen K. Merkel
Vice President and Treasurer
(Principal Accounting Officer)
Date: November 14, 1995
<PAGE>
Page 15
EXHIBIT INDEX
Incorporated by
Reference to: Exhibit No. Exhibit
------------- ----------- -------
27 Financial Data Schedule
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 142321
<SECURITIES> 1382796
<RECEIVABLES> 92261
<ALLOWANCES> 7130
<INVENTORY> 2780
<CURRENT-ASSETS> 1771196
<PP&E> 135662
<DEPRECIATION> 87098
<TOTAL-ASSETS> 2238066
<CURRENT-LIABILITIES> 247779
<BONDS> 0
0
6461
<COMMON> 15584
<OTHER-SE> 1294877
<TOTAL-LIABILITY-AND-EQUITY> 2238066
<SALES> 12548
<TOTAL-REVENUES> 349527
<CGS> 8619
<TOTAL-COSTS> 271108
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 43562
<INCOME-TAX> 7400
<INCOME-CONTINUING> 17334
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17334
<EPS-PRIMARY> .58
<EPS-DILUTED> .45
</TABLE>