UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED March 26, 1995
------------------
COMMISSION FILE NUMBER 1-7553
------
KNIGHT-RIDDER, INC.
- ---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 38-0723657
- --------------------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
ONE HERALD PLAZA, MIAMI, FLORIDA 33132
----------------------------------------
(Address of principal executive offices)
(305) 376-3800
- ---------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
- ----------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
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, 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 practical date. Common Stock, $.02 1/12 Par
Value- 49,856,186 shares as of April 30, 1995.
-2-<PAGE>
Table of Contents for 10-Q
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Income 4-5
Consolidated Balance Sheet 6-7
Consolidated Statements of Cash Flows 8-9
Notes to Consolidated Financial Statements 9-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-13
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of
Security Holders 14
Item 6 - Exhibits and Reports on 8-K 15
SIGNATURES 15
Exhibit 11 Statement Re: Computation of Per Share Earnings 16-17
Exhibit 27 Financial Data Schedule 18
Exhibit 99 Additional Exhibits 19-22
-3-<PAGE>
<TABLE>
Consolidated Statement Of Income (Unaudited, in thousands of dollars, except per share data)
<CAPTION>
Quarter Ended Four Quarters Ended
--------------------- ----------------------
March 26 March 27 March 26 March 27
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
OPERATING REVENUE
Newspapers
Advertising
Retail $ 181,785 $ 174,026 $ 800,235 $ 770,414
General 47,371 47,081 184,759 172,939
Classified 167,099 145,412 628,115 556,964
--------- --------- --------- ---------
Total 396,255 366,519 1,613,109 1,500,317
Circulation 122,592 120,724 486,449 478,161
Other 18,286 14,627 70,627 58,397
--------- --------- --------- ---------
Total Newspapers 537,133 501,870 2,170,185 2,036,875
Business Information Services 137,466 128,993 522,512 461,442
--------- --------- --------- ---------
Total Operating Revenue 674,599 630,863 2,692,697 2,498,317
--------- --------- --------- ---------
OPERATING COSTS
Labor and employee benefits 279,594 268,395 1,100,616 1,039,200
Newsprint, ink and supplements 94,829 79,394 351,337 334,379
Other operating costs 191,557 181,118 753,493 683,731
Depreciation and amortization 37,612 37,146 149,793 145,020
--------- --------- --------- ---------
Total Operating Costs 603,592 566,053 2,355,239 2,202,330
--------- --------- --------- ---------
OPERATING INCOME 71,007 64,810 337,458 295,987
--------- --------- --------- ---------
OTHER INCOME (EXPENSE)
Interest expense (12,401) (10,522) (46,464) (42,439)
Interest expense capitalized 245 56 663 171
Interest income 2,133 1,265 6,938 5,223
Equity in earnings of unconsolidated
companies and joint ventures 951 (2,122) 10,485 6,015
Minority interests in earnings of unconsolidated subsidiaries (1,614) (2,227) (9,037) (10,329)
Other, net 1,326 402 12 1,464
--------- --------- --------- ---------
Total (9,360) (13,148) (37,403) (39,895)
--------- --------- --------- ---------
Income before income taxes 61,647 51,662 300,055 256,092
Income taxes 25,974 21,290 123,854 100,767
--------- --------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE 35,673 30,372 176,201 155,325
Cumulative effect of change in accounting principle
for contributions (7,320) (7,320)
--------- --------- --------- ---------
Net income $ 28,353 $ 30,372 $ 168,881 $ 155,325
========= ========= ========= =========
-4-<PAGE>
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE
Income before cumulative effect of
change in accounting principle $ .69 $ .55 $ 3.30 $ 2.81
Cumulative effect of change in accounting principle (.14) (.14)
--------- --------- --------- ---------
Net income $ .55 $ .55 $ 3.16 $ 2.81
========= ========= ========= =========
DIVIDENDS DECLARED
PER COMMON SHARE $ .37 $ .35 $ 1.48 $ 1.40
========= ========= ========= =========
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING (000s) 51,883 55,233 53,438 55,203
========= ========= ========= =========
See "Notes to Consolidated Financial Statements" and statistical data on pages 9, 10, and 21.
</TABLE>
-5-<PAGE>
<TABLE>
Consolidated Balance Sheet (Unaudited, in thousands of dollars, except share data)
<CAPTION>
March 26 December 25 March 27
1995 1994 1994
--------- --------- ---------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash, including short-term cash investments of $1,887
in 1995, $150 in December 1994 and $1,987
in March 1994 $ 16,259 $ 9,253 $ 20,225
Accounts receivable, net of allowances of $14,100 in
1995, $13,728 in December 1994 and $14,977
in March 1994 306,088 317,687 274,032
Inventories 48,354 39,555 38,042
Other current assets 95,208 56,309 73,851
--------- --------- ---------
Total Current Assets 465,909 422,804 406,150
--------- --------- ---------
INVESTMENTS AND OTHER ASSETS
Equity in unconsolidated companies and joint ventures 294,218 293,205 285,843
Other 199,447 190,515 181,547
--------- --------- ---------
Total Investments and Other Assets 493,665 483,720 467,390
--------- --------- ---------
PROPERTY, PLANT AND EQUIPMENT
Land and improvements 67,016 66,950 66,908
Buildings and improvements 383,969 383,696 377,934
Equipment 1,209,124 1,209,360 1,179,650
Construction and equipment installations in progress 23,666 17,099 12,010
--------- --------- ---------
1,683,775 1,677,105 1,636,502
Less accumulated depreciation 858,436 844,593 785,010
--------- --------- ---------
Net Property, Plant and Equipment 825,339 832,512 851,492
--------- --------- ---------
EXCESS OF COST OVER NET ASSETS ACQUIRED
Less accumulated amortization of $187,989 in 1995,
$182,402 in December 1994 and $165,911 in March 1994 702,725 708,153 721,047
--------- --------- ---------
Total $2,487,638 $ 2,447,189 $2,446,079
========= ========= =========
-6-<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 138,430 $ 136,817 $ 122,479
Accrued expenses and other liabilities 96,581 98,993 88,708
Accrued compensation and amounts withheld from employees 83,233 96,917 74,181
Federal and state income taxes 22,703 1,368 8,023
Deferred revenue 68,450 66,953 62,053
Dividends payable 18,573 19,593 19,107
Short-term borrowings and current portion
of long-term debt 25,000
--------- --------- ---------
Total Current Liabilities 427,970 420,641 399,551
--------- --------- ---------
NONCURRENT LIABILITIES
Long-term debt 565,566 411,504 431,690
Deferred federal and state income taxes 138,611 138,611 139,764
Postretirement benefits other than pensions 167,192 166,682 169,209
Employment benefits and other noncurrent liabilities 98,111 84,264 65,335
--------- --------- ---------
Total Noncurrent Liabilities 969,480 801,061 805,998
--------- --------- ---------
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES 205 833 2,034
--------- --------- ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common Stock, $.02 1/12 par value; shares authorized -
250,000,000; shares issued - 50,218,141 in 1995,
52,892,720 in December 1994 and 54,608,949 in March 1994 1,046 1,102 1,138
Additional capital 309,040 326,392 340,584
Retained earnings 779,897 897,160 896,774
--------- --------- ---------
Total Shareholders' Equity 1,089,983 1,224,654 1,238,496
--------- --------- ---------
Total $2,487,638 $ 2,447,189 $2,446,079
========= ========= =========
See "Notes to Consolidated Financial Statements" and statistical data on pages 9, 10, and 21.
</TABLE>
-7-<PAGE>
<TABLE>
Consolidated Statement of Cash Flows (Unaudited, in thousands of dollars)
<CAPTION>
Quarter Ended Four Quarters Ended
------------------- --------------------
March 26 March 27 March 26 March 27
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
CASH PROVIDED BY (REQUIRED FOR) OPERATING ACTIVITIES
Net Income $28,353 $30,372 $168,881 $155,325
Non-cash items included in income:
Cumulative effect of change in accounting principle 7,320 7,320
Depreciation 26,555 26,624 105,707 105,875
Amortization of excess of cost over
net assets acquired 5,587 5,366 22,078 20,310
Amortization of other assets 5,470 5,156 22,008 18,835
Provision for noncurrent deferred taxes 3,785 (1,153) 26,596
Distributions from investees in excess
of (less than) earnings 588 3,064 (10,014) (16,721)
Other items, net 9,517 9,235 44,979 29,996
Change in certain assets and liabilities:
Accounts receivable 11,644 2,430 (31,921) (19,079)
Inventories (8,799) 3,380 (10,312) 7,906
Other current assets (40,438) (11,664) (26,670) 14,159
Accounts payable 1,613 (2,460) 15,172 (6,454)
Federal and state income taxes 21,335 8,013 14,680 6,512
Other current liabilities (18,559) (344) 15,588 1,374
-------- -------- -------- --------
Net cash provided by operating activities 50,186 82,957 336,343 344,634
-------- -------- -------- --------
CASH REQUIRED FOR INVESTING ACTIVITIES
Additions to property, plant and equipment (17,951) (14,172) (70,889) (59,311)
Other items, net (8,839) (34,306) (35,546) (73,509)
-------- -------- -------- --------
Net cash required for investing activities (26,790) (48,478) (106,435) (132,820)
-------- -------- -------- --------
-8-<PAGE>
CASH PROVIDED BY (REQUIRED FOR) FINANCING ACTIVITIES
Proceeds from sale of commercial paper
and bank borrowings 222,256 130,958 466,606 381,596
Reduction of total debt (68,194) (125,343) (357,730) (438,610)
-------- -------- -------- --------
Net change in total debt 154,062 5,615 108,876 (57,014)
Payment of cash dividends (19,593) (19,197) (78,338) (76,746)
Sale of common stock to employees 7,780 9,182 24,495 27,610
Purchase of treasury stock (152,231) (25,122) (264,086) (65,815)
Other items, net (6,408) (7,744) (24,821) (51,972)
-------- -------- -------- --------
Net cash required for
financing activities (16,390) (37,266) (233,874) (223,937)
-------- -------- -------- --------
Net Increase (Decrease) in Cash 7,006 (2,787) (3,966) (12,123)
Cash and short-term cash
investments at beginning of the period 9,253 23,012 20,225 32,348
-------- -------- -------- --------
Cash and short-term cash
investments at end of the period $16,259 $20,225 $16,259 $20,225
======== ======== ======== ========
Working capital at end of the period $37,939 $6,599 $37,939 $6,599
======== ======== ======== ========
See "Notes to Consolidated Financial Statements" and statistical data on pages 9, 10, and 21.
(/table)
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three month period and four quarters ended March 26, 1995 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1995. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Registrant Company
and Subsidiaries' annual report on Form 10-K for the year ended December 25,
1994.
In the first quarter of 1995, the Company adopted Financial Accounting
Standard (FAS) 116 - "Accounting For Contributions Received and Contributions
Made." The adoption of FAS 116 resulted in a $7.3 million charge (net of
tax) to operations, or $.14 per share, and was recorded as a cumulative effect
adjustment.
-9-<PAGE>
</TABLE>
<TABLE>
Note 2 - Debt (In thousands of dollars)
<CAPTION>
Effective
Interest Balance at
Rate at --------------------------------
March 26 March 26 December 25 March 27
1995 1995 1994 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Commercial paper, net of discount 6.2 % $208,745 $54,764 $100,206
Notes payable, net of discount (A) 8.6 159,146 159,103 158,974
Debentures, net of discount (B) 10.0 197,675 197,637 197,510
-------- -------- --------
Total debt (C) 8.2 565,566 411,504 456,690
Less amounts classified as current 25,000
-------- -------- --------
Total long-term debt 8.2 % $565,566 $411,504 $431,690
======== ======== ========
(A) Represents $160 million of 8 1/2% Notes subject to mandatory pro rata amortization of 25%
annually commencing 1998 through maturity in 2001.
(B) Represents $200 million of 20-year 9 7/8% debentures due in 2009.
(C) At March 26, 1995 and March 27, 1994, interest payments of $9.1 million and $9.7 million
had been made for the year-to-date, respectively.
Note 3 - Income Tax Payments
Income tax payments for the quarters ended March 26, 1995 and March 27, 1994, were $3.6 million and
$2.3 million, respectively.
</TABLE>
-10-<PAGE>
Management's Discussion and Analysis of the First Quarter
First Quarter 1995 Compared With First Quarter 1994
Earnings per share for the first quarter of 1995 were $.69 prior to the
cumulative effect of a change in accounting principle, a 25.5% increase from
$.55 per share in 1994. After the mandated change, to reflect the effect of
multiyear charitable commitments, earnings per share were $.55. Income before
the $7.3 million cumulative effect of the change in accounting principle of
$35.7 million improved by $5.3 million, or 17.5%, over last year. Operating
income for the quarter increased by 9.6% to $71.0 million, on a 6.9%
operating revenue improvement.
Earnings per share before the cumulative effect of the change in accounting
principle grew faster than operating income for several reasons. First was
the positive swing from 1994 of more than $3.0 million in equity earnings
from unconsolidated companies and joint ventures, due to our newsprint
investments. Second, our 4.9 million share repurchase since first quarter
1994 reduced our total outstanding shares to 50.2 million and finally,
favorable currency exchange rates on earnings in our overseas operations
contributed more than $.01 per share to the bottom line.
Operating Revenue
Newspaper advertising revenue increased 8.1% over the first quarter last
year, on a full-run ROP linage increase of 1.8%.
Classified advertising revenue reflected a 14.9% increase over the first
quarter last year, on a 4.5% full-run ROP linage increase. The employment
category showed the largest gain, posting a 29.4% improvement, with linage up
22.2%. This was the eleventh consecutive quarter of classified revenue
year-over-year improvement and the third consecutive quarter of double-digit
year-over-year growth.
Retail advertising revenue improved by $7.8 million, or 4.5%, over last year
on a 0.6% decrease in full-run ROP linage. The growth rate in retail slowed
during the quarter.
General advertising revenue was $290,000, or 0.6%, over last year on a 1.1%
increase in full-run ROP linage. General advertising was soft during most of
the quarter, particularly in the preprint category.
Circulation revenue increased $1.9 million, or 1.5%, due to a 3.0% increase
in average rates, offset by a 1.4% decline in average seven-day circulation.
Other newspaper revenue increased by $3.7 million, or 25.0%, due in part to
an increase in newsprint waste revenue that was driven by the rise in 1995
newsprint prices and the growth in special publication revenue.
Business Information Services (BIS) revenue in the first quarter increased
$8.5 million, or 6.6%. Knight-Ridder Financial contributed significantly to
the revenue growth, posting a $7.6 million, or 19.0%, improvement over the
prior year. Knight-Ridder Information, Inc., revenue was flat in the first
quarter, reflecting the growing maturation of the "information specialist"
market. Acquisitions played a small role in the year-over-year revenue
increase.
-11-<PAGE>
Operating Costs
Labor and employee benefit costs rose $11.2 million, or 4.2%, on a 1.3%
increase in the work force and a 3.0% increase in average wage. The work
force increase was a result of BIS expansion and aggressive reinvestment in
sales, marketing and content at BIS companies.
Newsprint, ink and supplement costs increased $15.4 million, or 19.4%, on a
1.9% increase in newsprint consumption and an 18.8% increase in the average
newsprint price. The newsprint increase did not reflect the full impact of
the recent price increases, which have not yet fully worked their way through
our inventory.
Other operating costs rose $10.4 million, or 5.8% over first quarter 1994.
The increase resulted partly from heavy circulation promotion at
Philadelphia, Miami and St. Paul, increased exchange fees related to BIS
overseas revenue growth and other volume-related costs associated with
operations.
Depreciation and amortization increased 1.3% over first quarter 1994
primarily due to BIS expansion.
Non-Operating Items And Income Taxes
Interest expense, net of interest income and interest expense capitalized,
increased $820,000 over last year due to higher debt levels during the
quarter. The average debt balance for the quarter increased $26.5 million, or
5.4% from the first quarter of last year, due largely to the 4.9 million
shares repurchased since last year's first quarter.
Equity in earnings of unconsolidated companies and joint ventures increased
by more than $3.0 million due to improved results from our newsprint
mill investments, which benefited from the recent rise in newsprint
prices.
The "Other, Net" line of the non-operating section reflected an almost
$1.0 million increase over first quarter 1994 as a result of favorable
exchange rates on earnings in our overseas operations.
The effective tax rate was 42.1% compared with 41.2% in the first quarter of
1994. The increase was primarily a result of higher effective state tax rates.
Other
In the first quarter of 1995, the company adopted Financial Accounting
Standard (FAS) 116 - "Accounting For Contributions Received and Contributions
Made." The adoption of FAS 116 resulted in a $7.3 million charge (net of
tax) to operations, or $.14 per share, and was recorded as a cumulative
effective adjustment.
In March, Knight-Ridder, Inc., Tribune Company, Cox Newspapers, Inc., and
Advance Publications announced the purchase of PRC Realty Systems for $60
million in cash and debt. Each of the four purchasing companies will own an
equal interest in PRC. PRC is the country's premier producer of software for
the real estate industry. The purchase of PRC will be finalized early in the
second quarter.
-12-<PAGE>
During the first quarter of 1995, the company purchased approximately 2.8
million shares of Knight-Ridder common stock. The company has remaining
authorization to repurchase 2.9 million shares and plans to repurchase shares
should the price remain at current levels.
The sale of the Journal of Commerce to The Economist Group of London was
completed on April 3 for $115 million. The gain from the sale of the Journal
of Commerce is expected to be over $50 million, after tax.
Liquidity
Net cash provided by operating activities decreased to $50.2 million from
$83.0 million in the first quarter of 1994, due largely to an increase in
other current assets of $40.4 million and changes in several other working
capital components. Other current assets showed a larger increase during the
first quarter 1995, due to accelerated funding of the company's employee
medical plans. Total debt increased $154.1 million during the quarter and
increased $108.9 million from March 27, 1994, due to the repurchase of 2.8
million shares of the company's stock in the quarter and 4.9 million shares
during the 12 months.
The total-debt-to-total-capital ratio was 34.2%, up from 25.2 at year end
and 26.9% in March 1994. The 34.2% total-debt-to-total-capital ratio does
not reflect the reduction of debt from the proceeds of the Journal
of Commerce sale, which will reduce the debt-to-total-capital ratio in
the second quarter 1995. Approximately $291 million in aggregate
unused credit lines remained at the end of the quarter. The ratio of
current assets to current liabilities was 1.1:1 at March 26, 1995, and
1.0:1 at Dec. 25, 1994, and March 27, 1994.
Outlook for the Remainder of the Year
We were pleased with results for the first quarter of the year. As we look
ahead to the second quarter and the year, we believe the advertising strength
we have seen thus far will be sustained and we expect 1995 to be a year of
earnings growth. The average price of newsprint will increase to about 40%
above what was paid in 1994 in the second quarter and will be up more in the
third and fourth quarters, as the recent price increases work their way
through our inventory. For the fiscal year, newsprint costs will be held to
a level about 40% above what was paid in 1994, if there are no further price
increases beyond those already announced.
BIS Division results over the balance of the year will reflect the absence of
the Journal of Commerce, which was sold on April 3 to The Economist Group.
Operating profit is expected to be below last year in the second and third
quarters, as we feel the full impact of the newsprint price increases. The
fourth quarter is expected to show significant improvement over 1994, due to
the fourth quarter 1994 additions to the litigation reserves and severance
charges, and the benefit of an extra week in the fourth quarter of
1995.
Earnings per share are expected to be up in the third and fourth quarters
as we benefit from the improved results from our newsprint mill investments
and the share repurchase program. Earnings per share in the second quarter,
excluding the gain on the sale of the Journal of Commerce, will likely be
below 1994.
-13-<PAGE>
PART II. OTHER INFORMATION
OTHER INFORMATION
- -----------------
Items 1, 2, 3, 4(d) and 5 are omitted as
inapplicable, not required, or because the information is
included in the consolidated financial information.
Item 4(a),(b), and (c):
Submission of Matters to a Vote of Security Holders
- -------------------------------------------------------
The Company's Annual Meeting of Shareholders was held on
May 5, 1995. The results of the voting with respect to
matters presented at the Annual Meeting were as follows:
44,310,763 shares of Common Stock voted for the re-
election of James K. Batten as a Director to the Board
of Directors for a term ending in 1998, 312,077 shares
withheld and -0- shares voted against; 44,304,350 shares
of Common Stock voted for the re-election of C. Peter
McColough as a Director to the Board of Directors for a
term ending in 1998, 318,490 shares withheld and -0-
shares voted against; 44,306,246 shares of Common Stock
voted for the re-election of Gonzalo F. Valdes-Fauli as
a Director to the Board of Directors for a term ending in
1998, 316,594 shares withheld and -0- shares voted
against; 44,308,212 shares of Common Stock voted for the
re- election of Ben R. Morris as a Director to the Board
of Directors for a term ending in 1996, 314,628 shares
withheld and -0- shares voted against; 44,305,783 shares
of Common Stock voted for the re-election of Eric Ridder
as a Director to the Board of Directors for a term ending
in 1996, 317,057 shares withheld and -0- shares voted
against; 44,152,322 shares of Common Stock voted in favor
of a proposal to ratify the appointment of Ernst & Young
LLP as independent auditors of the company for the year
1995, 413,995 shares of Common Stock voted against the
proposal and 56,523 abstained from voting; 35,790,013
shares of Common Stock voted against a shareholder
proposal requesting the preparation of a report relating
to cigarette advertising, 5,908,467 shares of
Common Stock were voted in favor of the proposal
and 776,720 shares abstained from voting in such
amendment, 2,147,640 shares were broker non votes;
30,396,957 shares of Common Stock voted against a
shareholder proposal to provide for the annual election
of all directors, 11,657,342 shares of Common Stock
were voted in favor of the proposal and 421,460 shares
abstained from voting in such amendment, 2,147,081 shares
were broker non votes.
-14-<PAGE>
Item 6 Exhibits and Reports on Form 8-K
--------------------------------
a. Exhibits Filed
No. 11 - Statement Re: Computation of Per Share
Earnings
No. 27 - Financial Data Schedule
No. 99 - Additional Exhibits
b. Reports on Form 8-K
No reports were filed on Form 8-K during the quarter
ended March 26, 1995.
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.
KNIGHT-RIDDER, INC.
(Registrant)
Date May 9, 1995
Gary R. Effren
Vice President/Controller
(Chief Accounting Officer and Duly
Authorized Officer of Registrant)
-15-<PAGE>
<TABLE>
COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED,IN THOUSANDS, EXCEPT PER SHARE DATA) EXHIBIT 11
==========
<CAPTION>
Quarter Ended
-------------------------
March 26 March 27
1995 1994
-------- --------
<S> <C> <C>
PRIMARY
Average shares outstanding 51,588 54,752
Net effect of dilutive
stock options - based on the
Treasury Stock method using
the average market price 295 481
======== ========
TOTAL 51,883 55,233
Income before cumulative effect
of change in accounting principle $35,673 $30,372
Cumulative effect of change in
accounting principle for conributions (7,320)
-------- --------
Net Income $28,353 $30,372
======== ========
Earnings per Common and Common Equivalent Share
Income before cumulative effect of
change in accounting principle $0.69 $0.55
Cumulative effect of change in
accounting principle (0.14)
-------- --------
Per share amount from net income $0.55 $0.55
======== ========
FULLY DILUTED
Average shares outstanding 51,588 54,752
Net effect of dilutive
options - based upon Treasury
Stock method using the higher
of quarter-end or average
market price 409 572
-------- --------
TOTAL 51,997 55,324
======== ========
Income before cumulative effect of
change in accounting principle $35,673 $30,372
Cumulative effect of change in
accounting principle for contributions (7,320)
-------- --------
Net Income $28,353 $30,372
======== ========
-16-<PAGE>
Earnings per Common and Common Equivalent Share
Income before cumulative effect of change
accounting principle $0.69 $0.55
Cumulative effect of change in
accounting principle (0.14)
-------- --------
Per share amount from net income $0.55 $0.55
======== ========
-17-
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS UNAUDITED SUMMARY INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF INCOME, THE CONSOLIDATED BALANCE SHEETS, THE
CONSOLIDATED STATEMENTS OF CASH FLOWS AND THE NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-26-1994
<PERIOD-END> MAR-26-1995
<CASH> 16,259
<SECURITIES> 0
<RECEIVABLES> 320,188
<ALLOWANCES> 14,100
<INVENTORY> 48,354
<CURRENT-ASSETS> 465,909
<PP&E> 1,683,775
<DEPRECIATION> 858,436
<TOTAL-ASSETS> 2,487,638
<CURRENT-LIABILITIES> 427,970
<BONDS> 0
<COMMON> 1,046
0
0
<OTHER-SE> 1,088,937
<TOTAL-LIABILITY-AND-EQUITY> 2,487,638
<SALES> 674,599
<TOTAL-REVENUES> 674,599
<CGS> 94,829<F1>
<TOTAL-COSTS> 603,592
<OTHER-EXPENSES> 9,360<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,401
<INCOME-PRETAX> 61,647
<INCOME-TAX> 25,974
<INCOME-CONTINUING> 35,673
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (7,320)
<NET-INCOME> 28,353
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
<FN>
<F1>Cost of goods sold consists of newsprint, ink, and supplements.
<F2>Other - Expenses consists of all non-operating costs, excluding income taxes.
Amount includes interest expense net of interest income and other non-operating
costs (net).
</FN>
</TABLE>
<TABLE>
KNIGHT-RIDDER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION EXHIBIT 99
(Unaudited, in thousands of dollars) ==========
<CAPTION>
Quarter Ended Four Quarters Ended
---------------------- -----------------------
March 26 March 27 March 26 March 27
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
OPERATING REVENUE
Newspapers $ 537,133 $ 501,870 $ 2,170,185 $ 2,036,875
Business Information Services 137,466 128,993 522,512 461,442
--------- --------- --------- ---------
$ 674,599 $ 630,863 $ 2,692,697 $ 2,498,317
========= ========= ========= =========
OPERATING INCOME
Newspapers $ 77,729 $ 68,086 $ 360,499 $ 310,325
Business Information Services 6,684 7,537 22,257 25,326
Corporate (13,406) (10,813) (45,298) (39,664)
--------- --------- --------- ---------
$ 71,007 $ 64,810 $ 337,458 $ 295,987
========= ========= ========= =========
DEPRECIATION AND AMORTIZATION
Newspapers $ 23,665 $ 23,941 $ 94,651 $ 95,597
Business Information Services 13,415 12,782 53,347 47,766
Corporate 532 423 1,795 1,657
--------- --------- --------- ---------
$ 37,612 $ 37,146 $ 149,793 $ 145,020
========= ========= ========= =========
</TABLE>
-19-<PAGE>
Knight-Ridder, Inc.
First Quarter Graphs (Unaudited)
================================
<TABLE>
<CAPTION>
FIRST QUARTER NET INCOME FIRST QUARTER EARNINGS PER SHARE
(From continuing operations, in $000s) (From continuing operations)
<C> <C> <C> <C>
Year Amount Year Amount
--------- ----------- --------- ---------
1995 35,673 * 1995 $0.69*
1994 30,372 1994 $0.55
1993 23,136 1993 $0.42
1992 25,006 * 1992 $0.46*
1991 15,830 1991 $0.32
1990 25,849 1990 $0.50
* 1995 excludes a one-time charge of $7.3 million, or $.14 per share, and 1992 excludes
a one-time charge of $105.2 million, or $1.93 per share representing the cumulative
effect of changes in accounting principles.
FIRST QUARTER TOTAL OPERATING REVENUE FIRST QUARTER NEWSPAPER ADVERTISING REVENUE
(From continuing operations, in $000's) (In $000s)
<C> <C> <C> <C>
Year Amount Year Amount
--------- ----------- --------- ---------
1995 674,599 1995 396,255
1994 630,863 1994 366,519
1993 583,894 1993 347,833
1992 555,438 1992 334,023
1991 545,441 1991 340,413
1990 554,915 1990 371,690
</TABLE>
-20-<PAGE>
<TABLE>
Circulation - Note A
(Unaudited, in thousands of copies)
<CAPTION>
Quarter Ended
-------------------------------
March 26 March 27
1995 1994 Change
------ ------ ------
<S> <C> <C> <C>
Average Morning Circulation 3,151 3,196 (45)
Average Evening Circulation 446 450 (4)
------ ------ ------
Average Daily Circulation 3,597 3,646 (49)
====== ====== ======
Average Sunday Circulation 4,701 4,790 (89)
====== ====== ======
</TABLE>
<TABLE>
Advertising Statistics (Unaudited) - Notes A & B
<CAPTION>
Quarter Ended
---------------------------------
March 26 March 27
1995 1994 % Change
-------- -------- --------
<S> <C> <C> <C>
LINAGE (In thousands of
six-column inches)
Full-run ROP
Retail 3,455 3,477 (0.6)
General 377 373 1.1
Classified 3,420 3,274 4.5
-------- --------
Total 7,252 7,124 1.8
======== ========
Factored Part-run ROP 465 401 16.0
======== ========
Full-run Preprint 3,670 3,691 (0.6)
======== ========
Part-run Preprint 3,717 3,355 10.8
======== ========
TOTAL PREPRINTS INSERTED (000s) 1,082,994 1,089,400 (0.6)
======== ========
Note A: Where necessary, certain previously reported statistics have been restated to be
consistent with guidelines currently in use.
Note B: Factored part-run linage represents linage in zoned editions that is translated into full-
run equivalent linage based on the ratio of the circulation in a particular zone to the
total circulation of the newspaper.
</TABLE>
-21-<PAGE>
<TABLE>
Knight-Ridder Share Trading
(As quoted by Knight-Ridder Financial Services)
<CAPTION>
1995 First Quarter 1994 First Quarter
------------------------------------- ----------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
Volume High Low Close Volume High Low Close
--------- ------ ------ ------ --------- ----- ------ ------
9,454,100 56 1/8 50 1/4 55 7/8 8,485,000 61 54 7/8 60 1/8
</TABLE> -22-
