<PAGE>
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 June 30, 1996
--------------------------------
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 July 31, 1996 there were 22,416,017 shares of the issuer's
Common Stock outstanding and 7,529,835 shares of the issuer's
Class B Common Stock outstanding.
<PAGE>
Page 2
<TABLE>
PART I -- FINANCIAL INFORMATION
CHRIS-CRAFT INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(UNAUDITED)
-------------------------------------
<CAPTION>
June 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 117,184 $ 73,840
Marketable securities (substantially
all U.S. Government securities) 1,328,437 1,449,598
Accounts receivable, net 94,076 93,093
Film contract and prepaid broadcast rights 81,095 95,541
Prepaid expenses and other current assets 55,164 45,871
----------- -----------
Total current assets 1,675,956 1,757,943
----------- -----------
FILM CONTRACT AND, IN 1995, PREPAID BROADCAST
RIGHTS, less current portion 15,750 50,361
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, net 51,035 49,927
----------- -----------
INTANGIBLE ASSETS 323,272 321,945
----------- -----------
OTHER ASSETS 43,706 23,677
----------- -----------
$ 2,109,719 $ 2,203,853
=========== ===========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
Page 3
<TABLE>
PART I -- FINANCIAL INFORMATION
CHRIS-CRAFT INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
(UNAUDITED)
-------------------------------------
<CAPTION>
June 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
CURRENT LIABILITIES:
Film contracts payable within one year $ 76,923 $ 87,634
Accounts payable and other liabilities 90,133 105,682
Income taxes payable 34,806 33,211
----------- -----------
Total current liabilities 201,862 226,527
----------- -----------
FILM CONTRACTS PAYABLE AFTER ONE YEAR 63,657 86,392
----------- -----------
OTHER LIABILITIES 11,396 11,588
----------- -----------
MINORITY INTEREST 528,404 560,326
----------- -----------
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 273,314 shares;
outstanding 273,314 and 275,758 shares 4,783 4,826
Class B common stock - par value $.50 per share;
authorized 50,000,000 shares; outstanding
7,544,580 and 7,652,273 shares 3,772 3,826
Common stock - par value $.50 per share; authorized
100,000,000 shares; outstanding 22,585,072 and
21,478,079 shares 12,083 11,530
Capital surplus 331,624 301,351
Retained earnings 956,309 989,181
Treasury stock, at cost (5,643) -
Adjustment to reflect marketable
securities at market value (106) 6,728
----------- -----------
1,304,400 1,319,020
----------- -----------
$ 2,109,719 $ 2,203,853
=========== ===========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
Page 4
<TABLE>
CHRIS-CRAFT INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands of dollars except per share data)
(UNAUDITED)
-----------------------------------------------
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
---------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 125,500 $ 125,234 $ 231,150 $ 233,943
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Expenses directly associated with revenues 56,010 55,397 111,000 109,386
Selling, general and administrative 34,869 32,633 67,656 63,573
---------- ---------- ---------- ----------
90,879 88,030 178,656 172,959
---------- ---------- ---------- ----------
Operating income 34,621 37,204 52,494 60,984
---------- ---------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest and other income, net 19,748 18,933 42,908 39,753
Equity in United Paramount Network loss (34,990) (28,709) (67,744) (67,112)
---------- ---------- ---------- ----------
(15,242) (9,776) (24,836) (27,359)
---------- ---------- ---------- ----------
Income before income taxes
and minority interest 19,379 27,428 27,658 33,625
INCOME TAX PROVISION 10,300 13,100 14,400 15,600
---------- ---------- ---------- ----------
Income before minority interest 9,079 14,328 13,258 18,025
MINORITY INTEREST (6,386) (7,972) (10,190) (11,355)
---------- ---------- ---------- ----------
Net income $ 2,693 $ 6,356 $ 3,068 $ 6,670
========== ========== ========== ==========
Net income per share:
Primary $ .08 $ .21 $ .09 $ .21
========== ========== ========== ==========
Fully diluted $ .07 $ .16 $ .08 $ .17
========== ========== ========== ==========
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>
Page 5
<TABLE>
CHRIS-CRAFT INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
(UNAUDITED)
-----------------------------------------------
<CAPTION>
Six Months
Ended June 30,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,068 $ 6,670
Adjustments to reconcile net income to net
cash provided from operating activities:
Film contract payments (44,857) (45,323)
Film contract amortization 43,773 40,778
Depreciation and other amortization 9,750 10,110
Equity in United Paramount Network loss 67,744 67,112
Minority interest 10,190 11,355
Other 1,275 4,957
Changes in assets and liabilities:
Accounts receivable (983) 4,362
Other assets (2,519) (3,631)
Accounts payable and other liabilities (1,020) (2,709)
Income taxes 1,077 (3,021)
--------- ---------
Net cash provided from operating activities 87,498 90,660
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Disposition (purchase) of marketable securities, net 108,973 (58,866)
Investment in United Paramount Network (76,600) (83,445)
Capital expenditures, net (6,199) (2,165)
Other (13,318) (869)
--------- ---------
Net cash provided from (used in)
investing activities 12,856 (145,345)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital transactions of subsidiaries (52,042) (36,422)
Purchase of treasury stock (5,938) (16,888)
Proceeds from option exercises 1,199 667
Other (229) (234)
--------- ---------
Net cash used in financing activities (57,010) (52,877)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 43,344 (107,562)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 73,840 226,183
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 117,184 $ 118,621
========= =========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
<PAGE>
Page 6
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 (75% at June 30,
1996) television broadcasting subsidiary, BHC Communications, Inc.,
and BHC's majority owned (58% at June 30, 1996) 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 for a fair statement of the results for the interim periods.
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 June 30, 1996, Chris-Craft's marketable securities, which
consisted substantially of U.S. Government securities, had a carrying
value of $1,329,537,000 and a fair value of $1,328,437,000. The
difference of $1,100,000 ($106,000 net of income taxes and minority
interests) is reflected as a reduction of shareholders' investment in
the accompanying condensed consolidated balance sheet. Of the
<PAGE>
Page 7
investments in U.S. Government securities, 80% mature within one year,
99% within two years and all within three years.
At December 31, 1995, Chris-Craft's marketable securities, which
consisted substantially of U.S. Government securities, had a carrying
value of $1,435,282,000 and a fair value of $1,449,598,000. The
difference of $14,316,000 ($6,728,000 net of income taxes and minority
interests) is reflected as an increase to shareholders' investment in
the accompanying condensed consolidated balance sheet.
3. UNITED PARAMOUNT NETWORK:
In July 1994, BHC, along with Viacom Inc.'s Paramount Television
Group, formed the United Paramount Network, a fifth broadcast
television network which premiered in January 1995. BHC currently
owns 100% of UPN, and 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.
UPN has been organized as a partnership, and BHC's partnership
interest is accounted for under the equity method. The carrying value
of such interest totalled $10,982,000 at June 30, 1996 and $2,121,000
at December 31, 1995 and is included in other assets in the
accompanying condensed consolidated balance sheets. UPN is still in
its infancy, and the cost of developing UPN is expected to remain
significant for several years.
UPN's condensed consolidated statements of operations for the
three and six months ended June 30, 1996 are as follows (in
thousands):
Three Months Ended Six Months Ended
June 30, 1996 June 30, 1996
------------- -------------
Operating revenues* $ 14,156 $ 25,064
Operating expenses* 49,152 91,754
---------- ----------
Operating loss (34,996) (66,690)
Other income (expense) 6 (1,054)
---------- ----------
Loss before interest
on BHC advances (34,990) (67,744)
Interest on BHC advances
(eliminated in consolidation) (3,248) (5,771)
---------- ----------
Net loss $ (38,238) $ (73,515)
========== ==========
* With respect to certain of its programming, UPN derives no
revenue and incurs no programming expense.
<PAGE>
Page 8
4. 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 2,
1996. During the six months ended June 30, 1996, 335,514 shares of
Class B common stock were converted into 335,514 shares of common
stock, and 2,444 shares of $1.40 convertible preferred stock were
converted into 76,850 shares of common stock and 616 shares of Class B
common stock. In addition, 66,753 shares of common stock, including
18,039 shares held in treasury, were issued upon exercise of stock
options, and 18,039 shares of common stock were received in partial
payment of option exercises. During the six month period, 134,600
shares of common stock were purchased by Chris-Craft, all of which
were held in treasury at June 30, 1996. As of June 30, 1996,
1,013,302 shares of common stock and 12,899 shares of $1.00 prior
preferred stock remained authorized for purchase.
As of June 30, 1996, shares of Chris-Craft's authorized but
unissued common stock were reserved for issuance as follows:
Shares
----------
Conversion of Class B common stock 7,544,580
Conversion of $1.40 convertible preferred stock 8,724,923*
Stock options (including options
outstanding for 1,798,375 shares) 3,538,638
----------
19,808,141
==========
*Including Class B common shares.
5. CAPITAL TRANSACTIONS OF SUBSIDIARIES:
Since April 1990, BHC's Board of Directors has authorized the
purchase of up to 6,800,000 Class A common shares. Through June 30,
1996, 5,255,487 shares were purchased for a total cost of $328.0
million, including $31.5 million in 1996, and $14.9 million in the
first six months of 1995. From 1993 through June 30, 1996, UTV
purchased 1,224,276 of its common shares at an aggregate cost of $72.5
million, including $20.9 million in 1996, and $14 million in the first
six months of 1995.
Such purchases, together with proceeds from the exercise of UTV
stock options, BHC's special $1.00 per share dividend in the first six
months of 1995, and UTV's dividend of $.50 per share in both periods,
are reflected in capital transactions of subsidiaries in the
accompanying condensed consolidated statements of cash flows, net of
intercompany eliminations.
<PAGE>
Page 9
6. COMMITMENTS AND CONTINGENCIES:
Commitments of BHC's television stations for film contracts
entered into but not available for broadcasting at June 30, 1996
aggregated approximately $236.9 million, including $59.7 million
applicable to UTV. BHC also has a remaining commitment to invest over
time up to $60.5 million, including $37.3 million applicable to UTV,
in management buyout limited partnerships.
BHC is expected to make significant expenditures developing UPN.
See Note 3.
As set forth in Note 10 of Notes to Consolidated Financial
Statements in Chris-Craft's 1995 Annual Report, Chris-Craft has been
named as a defendant (or a "potentially responsible party") in certain
actions seeking recovery for environmental damage allegedly related to
(i) the activities (discontinued since 1983) of 50% owned Montrose
Chemical Corporation of California and (ii) the activities of Montrose
Chemical Co., a predecessor company to Chris-Craft. 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.
7. INCOME PER SHARE:
Computations of income per share, all of which give retroactive
effect to the April 1996 3% stock dividend, are as follows (in
thousands of dollars except per share amounts):
</TABLE>
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
------------------------- ------------------------
1996 1995 1996 1995
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
PRIMARY:
- --------
Average outstanding common
and Class B common shares 29,994,173 29,870,417 29,989,481 30,011,271
Assumed exercise of stock options 464,491 129,424 477,494 148,624
----------- ----------- ----------- -----------
Total shares used in computation 30,458,664 29,999,841 30,466,975 30,159,895
=========== =========== =========== ===========
Net income $ 2,693 $ 6,356 3,068 6,670
Preferred stock dividend requirements (115) (117) (229) (234)
----------- ----------- ----------- -----------
$ 2,578 $ 6,239 $ 2,839 $ 6,436
=========== =========== =========== ===========
Primary income per share $ .08 $ .21 $ .09 $ .21
=========== =========== =========== ===========
</TABLE>
<PAGE>
Page 10
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
------------------------- ------------------------
1996 1995 1996 1995
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
FULLY DILUTED:
- --------------
Average outstanding common
and Class B common shares 29,994,173 29,870,417 29,989,481 30,011,271
Assumed conversion of
$1.40 preferred stock 8,746,439 8,999,426 8,768,594 9,006,417
Assumed exercise of stock options 529,373 185,078 535,547 186,042
----------- ----------- ----------- ------------
Total shares used in computation 39,269,985 39,054,921 39,293,622 39,203,730
=========== =========== =========== ===========
Net income $ 2,693 $ 6,356 $ 3,068 $ 6,670
Preferred stock dividend requirements (19) (19) (37) (37)
----------- ----------- ----------- ------------
$ 2,674 $ 6,337 $ 3,031 $ 6,633
=========== =========== =========== ===========
Fully diluted income per share $ .07 $ .16 $ .08 $ .17
=========== =========== =========== ===========
</TABLE>
<PAGE>
Page 11 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 $1.45 billion at June 30, 1996, and
Chris-Craft has no debt outstanding. Chris-Craft's 75% owned
television broadcasting subsidiary, BHC Communications, Inc., is
currently expending significant funds to develop the United Paramount
Network, but cash flow provided from BHC's operating activities has
substantially exceeded BHC's UPN funding since the network's January
1995 launch.
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 $1.1
million and $4.5 million, respectively, in the first six months of
1996 and 1995), and is dependent upon the mix of programs aired and
payment terms of the stations' contracts. Reflecting such $3.4
million variance between the six month periods of 1996 and 1995,
broadcast cash flow declined 10% to $70.3 million from $78.5 million
in 1995, while station earnings declined 15%, as explained below.
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.
Cash and marketable securities totalled $1.45 billion at June 30,
1996, compared to $1.52 billion at December 31, 1995, which decrease
includes a $15.4 million marketable securities net valuation
adjustment. Six month operating cash flow of $87.5 million was more
than offset by BHC's UPN funding of $76.6 million and treasury stock
purchases by BHC and UTV totalling $53.5 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
<PAGE>
Page 12
from BHC, which paid a special cash dividend of $1.00 per share. BHC
has no plan to pay regular dividends. 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 6,800,000 Class A common shares. Through June 30, 1996,
5,255,487 shares were purchased for a total cost of $328.0 million,
including $31.5 million in 1996. From 1993 through June 30, 1996, UTV
purchased 1,224,276 of its common shares at an aggregate cost of $72.5
million, and at June 30, 1996, 959,749 UTV shares remained authorized
for purchase.
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, along with Viacom Inc.'s Paramount Television
Group, formed UPN, a fifth broadcast television network which
premiered in January 1995. BHC currently owns 100% of UPN, and
accounts for UPN under the equity method, since 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 $128.6
million in 1995 and $76.6 million in the first six months of 1996.
UPN is still in its infancy, and the cost of developing UPN is
expected to remain significant for several years.
Chris-Craft's television stations make commitments for programming
that will not be available for telecasting until future dates. At
June 30, 1996, commitments for such programming totalled approximately
$236.9 million, including $59.7 million applicable to UTV. BHC also
has a remaining commitment to invest over time up to $60.5 million,
including $37.3 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 June 30, 1996 (including
any related to UPN) were not material. Chris-Craft expects that its
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 5, Chris-Craft has been named as a defendant (or
"potentially responsible party") in certain actions seeking recovery
for environmental damage allegedly related to (i) the activities
(discontinued since 1983) of 50% owned Montrose Chemical Corporation
of California and (ii) the activities of Montrose Chemical Co., a
predecessor company to Chris-Craft. As further set forth in Note 5,
Chris-Craft does not presently consider liability to be "probable" in
<PAGE>
Page 13
any of the Montrose related matters, and no amount has been reserved
in Chris-Craft's financial statements.
Results of Operations
- ---------------------
Chris-Craft second quarter net income totalled $2,693,000, or $.08 per
share, compared to $6,356,000, or $.21 per share, in last year's
second quarter. The decline in net income primarily reflects lower
earnings at BHC's core Television Division and a larger start-up loss
at United Paramount Network.
While UPN's loss for the first six months of 1996 was about the same
as in last year's corresponding period, Chris-Craft six month net
income declined to $3,068,000, or $.09 per share, from last year's
$6,670,000, or $.21 per share, primarily due to lower station group
earnings.
Operating revenues and operating income for the second quarter and six
month periods ended June 30, 1996 and 1995 are as follows (in
thousands):
Operating Revenues Operating Income
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
Second Quarter
Television Division $120,920 $120,953 $ 38,744 $ 41,331
Industrial Division 4,580 4,281 355 515
Corporate and other - - (4,478) (4,642)
-------- -------- -------- --------
$125,500 $125,234 $ 34,621 $ 37,204
======== ======== ======== ========
Six Months
Television Division $221,965 $225,428 $ 60,079 $ 67,578
Industrial Division 9,185 8,515 796 870
Corporate and other - - (8,381) (7,464)
-------- -------- -------- --------
$231,150 $233,943 $ 52,494 $ 60,984
======== ======== ======== ========
In several of the Television Division's most important markets, demand
for television advertising continued to be lackluster and market share
was lower, and, accordingly, station group revenues declined 2% in the
second quarter, to $118,463,000 from $120,953,000. Station earnings
declined 7%, to $42,450,000 from $45,683,000 and, after administrative
expenses and other operating activities, Television Division operating
income accordingly declined 6%, to $38,744,000 from $41,331,000. For
the first six months of 1996, station group earnings declined 15%, to
<PAGE>
Page 14
$67,018,000 from $78,386,000, reflecting a 4% decline in station
operating revenues and a 6% increase in station programming expenses,
most of which increase occurred in the first quarter. Television
Division operating income for the period declined 11%, to $60,079,000
from $67,578,000, as the decline in station earnings was partially
offset by improved results at the Division's television production
subsidiaries.
Industrial Division operating revenues rose 7% in the second quarter
and 8% in the six month period, reflecting growth at the Division's
film manufacturing and health care products distribution businesses.
Primarily due to lower profit margins and increased operating
expenses, Industrial Division operating income declined to $355,000
from $515,000 in the second quarter and to $796,000 from $870,000 in
the six month period.
After Chris-Craft corporate office expenses, which increased 12% in
the first six months of 1996, primarily due to a first quarter
increase in retirement plan expense, consolidated operating income
declined to $34,621,000 from $37,204,000 in the second quarter and to
$52,494,000 from $60,984,000 in the six month period.
UPN's second quarter loss increased to $34,990,000 from last year's
$28,709,000, reflecting the expansion of the network's prime time
schedule from two to three weekday evenings. UPN's six month loss of
$67,744,000 was about even with last year's $67,112,000, as the
increase in UPN's second quarter loss was offset by promotion expenses
related to the network's January 1995 launch recorded in last year's
first quarter.
Interest and other income rose to $19,748,000 from $18,933,000 in the
second quarter, and to $42,908,000 from $39,753,000 in the six month
period, primarily reflecting marketable securities gains.
Minority interest reflects the interest of shareholders other than
Chris-Craft in the net income of BHC, 75% owned by Chris-Craft at June
30, 1996 and 73% owned at June 30, 1995, and the interest of
shareholders other than BHC in the net income of UTV, 58% owned by BHC
at June 30, 1996 and 56% owned at June 30, 1995.
<PAGE>
Page 15
CHRIS-CRAFT INDUSTRIES, INC.
----------------------------
PART II. OTHER INFORMATION
--------------------------
Item 1. Legal Proceedings.
------------------
On July 10, 1996, the United States Environmental Protection
Agency ("EPA") issued two memoranda concerning the marine sediments on
the Palos Verdes Shelf off the California coast allegedly contaminated
with DDT and PCBs. The sediments previously had been the subject of
the National Oceanic and Atmospheric Administration's ("NOAA") claim
to recover natural resource damages in United States of America, et
al. v. Montrose Chemical Corporation of California, et al., No. CV 90
3122-AAH (JRx) in the United States District Court for the Central
District of California, the appeal of the dismissal of which is
pending before the Ninth Circuit Court of Appeals. In the first July
10 memo, EPA asserted that the sediments pose a threat to human health
and the environment and said it will conduct an Engineering Evaluation
and Costs Analysis for a removal action to respond to the alleged
contamination. In the second memo, EPA said it will manage its
response activities concerning the sediments in conjunction with the
ongoing response activities at the former Montrose manufacturing plant
site in Torrance, California. In a related letter also dated July 10,
the U.S. Department of Justice ("DOJ") wrote the U.S. Court of Appeals
for the Ninth Circuit and informed the court of DOJ's view that EPA's
actions may moot the United States' pending appeal of the district
court's dismissal of NOAA's natural resource damages claim. In
response, Chris-Craft and other defendants sent the Ninth Circuit a
letter disagreeing with DOJ's position. The Ninth Circuit has taken
no action as a result of these letters; nor has it addressed or
indicated when it will address the underlying appeal.
On July 19, 1996, Chris-Craft was among the parties to a series
of consent decrees entered in Levin Metals Corp., et al. v. Parr-
Richmond Terminal Co., et al., No. C 84 6273 CW and related cases in
the U.S. District Court for the Northern District of California.
Under these decrees, the litigation has been ended and contractors
retained by Montrose will dredge contaminated sediments from a
shipping channel under EPA supervision. The cleanup, estimated to
cost approximately $7-8 million, will be funded primarily by
settlement payments from other defendants and by payments from
Montrose's insurers. Chris-Craft's contribution to the settlement
depends upon the cleanup costs actually incurred, and is expected to
be approximately $500,000; one of Chris-Craft's insurers has paid
33.6% of this contribution and Chris-Craft is pursuing its other
insurers to pay the remainder.
<PAGE>
Page 16
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
The following matters were submitted to a vote of security
holders at the Registrant's annual meeting of stockholders which was
held on April 25, 1996.
The following were elected directors, each receiving the numbers
of votes set opposite his or her name:
Broker
For Withheld Non-votes
--- -------- ---------
Jeane J. Kirkpatrick 119,753,877 1,296,495 -0-
Norman Perlmutter 120,466,938 583,434 -0-
William D. Siegel 120,452,493 597,879 -0-
Evan C Thompson 120,453,773 596,599 -0-
A stockholder's proposal relating to the "Glass Ceiling" issue
was disapproved by the following vote:
Broker
For Against Abstain Non-votes
--- ------- ------- ---------
2,544,277 110,159,266 8,346,879 3,609,081
The selection of Price Waterhouse LLP as Chris-Craft's auditors
for the current year was ratified by the following vote:
Broker
For Against Abstain Non-votes
--- ------- ------- ---------
120,848,055 137,228 65,109 -0-
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 17
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: August 14, 1996
<PAGE>
Page 18
EXHIBIT INDEX
Incorporated by
Reference to: Exhibit No. Exhibit
- ------------- ----------- -------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 117184
<SECURITIES> 1328437
<RECEIVABLES> 100187
<ALLOWANCES> 6111
<INVENTORY> 0
<CURRENT-ASSETS> 1675956
<PP&E> 142624
<DEPRECIATION> 91589
<TOTAL-ASSETS> 2109719
<CURRENT-LIABILITIES> 201862
<BONDS> 0
0
6361
<COMMON> 15855
<OTHER-SE> 1282184
<TOTAL-LIABILITY-AND-EQUITY> 2109719
<SALES> 9185
<TOTAL-REVENUES> 231150
<CGS> 6340
<TOTAL-COSTS> 178656
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 27658
<INCOME-TAX> 14400
<INCOME-CONTINUING> 3068
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3068
<EPS-PRIMARY> .09
<EPS-DILUTED> .08
</TABLE>