SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
----------- ----------
Commission File No. 0-916-3
PLENUM PUBLISHING CORPORATION
-----------------------------
(Exact name of the Registrant as specified in its Charter)
Delaware 13-5648711
-------- -----------
(State of Incorporation) (I.R.S. Employer ID Number)
233 Spring Street, New York, New York 10013
- ----------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 212-620-8000
Securities registered pursuant to Section 12(b) of the Act
Name of each Exchange
Title of each class on which Registered
------------------- ---------------------
None
------------------- ----------------------
Securities registered pursuant to Section 12(g) of the Act
Common Stock, $.10 par value
----------------------------
(Title of Class)
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
--- ---
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
X
---
State the aggregate market value of the voting stock held by
non-affiliates of the Registrant. The aggregate market value
shall be computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as
of a specified date within 60 days prior to the date of filing.
(See definition of affiliate in Rule 405): at March 14, 1994,
$103,481,070.
Indicate the number of shares outstanding of the Registrant's
common stock, as of the latest practicable date: On March 14,
1994, 4,498,940 shares.
<PAGE>
PART I
Item 1. Business
--------
The Registrant is and for many years has been engaged in the
business of publishing and distributing advanced scientific and
technical material. The Registrant publishes and distributes books and
journals and creates and maintains databases for which it receives
royalties from unrelated organizations providing access to such materials
throughout the world under the imprints of Plenum Press, Consultants
Bureau, DaCapo Press, IFI/Plenum Data, J.S. Canner & Company, and Human
Sciences Press. The Registrant and its subsidiaries maintain offices in
New York, New York; Wilmington, Delaware; Boston, Massachusetts; Wilmington,
North Carolina; London, England; and Moscow, Russia; and warehouse
facilities in Edison, New Jersey.
The Registrant's principal markets are public and private
libraries, technically oriented corporations, research organizations and
individual scientists, engineers, research workers, other professionals
and graduate students throughout the world. Except as to the sale of
reprints and trade books, the Registrant does not generally sell to book
stores. The Registrant's principal methods of marketing are by direct mail
and by advertising in scientific publications, including its own journals.
The Registrant makes a wide distribution of its catalogs of published
material, as well as plans for new publications. In certain foreign
markets, the Registrant utilizes the services of independent distributors
and agents.
The Registrant generally secures copyrights on its publications
in its own name or in the name of its subsidiaries. In some cases, pursuant
to written agreement, the copyright is secured in the name of the author
of the publication or a learned society or other organization. Copyrights
on translations of foreign journals are limited to English language
translations and do not cover the original foreign language works. Those
translations of Russian journals as to which the Registrant is the
distributor but not the publisher are copyrighted in the name of the
publisher. Most publications printed by the Registrant's DaCapo Press
subsidiary are reprints of works in the public domain which are not subject
to copyright protection or are works published by others who have sold to
the Registrant certain rights for publication, either for a fixed payment
or under a royalty agreement.
The Registrant does not perform any printing operations. It uses
outside printing and binding services, with much of the material being
prepared by the Registrant for printing. Preparations by the Registrant
include editing, creation of a suitable design and typesetting.
The following table sets forth the total revenues contributed
by each class of similar products and services, and the income (loss)
generated from securities owned by the Registrant.
<PAGE>
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989(a)
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Subscription Journals $33,297,585 $31,812,705 $31,342,821 $29,820,962 $26,617,404
Outside Journals 2,461,775 3,104,347 2,782,940 2,818,477 2,619,974
Books 13,317,503 14,191,600 14,953,336 15,011,957 14,749,001
Database Products 4,210,802 4,202,308 3,831,838 3,885,351 3,210,894
Miscellaneous sales 810,581 415,039 463,664 467,927 376,198
Interest income 544,780 3,020,543 3,522,592 4,266,980 5,429,029
Dividend income 2,136,989 1,636,462 1,546,865 2,649,325 3,474,881
Gain (loss) on
sales of marketable
securities 801,387 2,476,916 19,714 (3,575,870) 5,026,818
(Provision for) reversal of
net unrealized loss
on marketable
securities (1,713,197) - 6,544,417 (4,574,670) (1,969,747)
Equity in net income (loss)
of Gradco Systems, Inc.(b) 4,565 ( 100,430) ( 91,300) (4,168,681) (1,242,590)
---------- ---------- ---------- ---------- ----------
$55,872,770 $60,759,490 $64,916,887 $46,601,758 $58,291,862
========== ========== ========== ========== ==========
<FN>
Notes:
(a) Reclassified to conform to 1990 presentation.
(b) The Company's investment in Gradco Systems, Inc., which had been
included in marketable securities in 1989, was reclassified in
1990 to reflect it as if it had been accounted for using the
equity method since inception.
</TABLE>
<PAGE>
Subscription Journals
- ---------------------
During 1993, the Registrant published a total of 243
journals, of which 97 were translations of Russian language
scientific journals which represented a substantial portion of
the Registrant's subscription income. The Russian journals are
in the fields of physical sciences, mathematics, engineering and
life sciences. In December 1993, the Registrant entered into a
Journal Production and Distribution Agreement (the "Distribution
Agreement") with the Russian Academy of Sciences (the "Academy")
and other interested parties pursuant to which the litigation
then pending, relating to the translation of Russian scientific
journals, was ended, and Registrant's role as publisher and
distributor of certain of such journals was altered. The Distri-
bution Agreement extends from 1994 through 2006. In the lawsuit,
the Registrant had alleged a conspiracy by certain competing
entities to procure the breach of its translation contract with
the Copyright Agency of the former Soviet government ("VAAP") by
entering into agreements to obtain translation rights to certain
journals.
Pursuant to the Distribution Agreement, in 1994 the
Registrant will distribute for MAIK Nauka ("MN"), an entity owned
in part by Pleiades Publishing, Inc. and the Academy, 21 Russian
scientific journals in English. MN will become the exclusive
publisher of such journals. Prior thereto, the Registrant had
translated, published and distributed these journals under a con-
tract with VAAP, and under contracts with the individual insti-
tutes publishing the journals, and had paid royalties based in
part upon the number of subscribers. Under the Distribution
Agreement, the Registrant will continue to promote and distribute
these journals throughout the world, and will continue to deal
with and collect from subscribers to the journals, retaining a
portion of such revenues for performing its function. In 1994,
the Registrant will retain 35% of the revenue, with the amount
gradually being reduced to 30% in 1999 and remaining at that
level for the balance of the term of the Distribution Agreement.
Revenue from such 21 journals in the 1993 journal year constituted
6.7% of the Registrant's overall journal revenue and 16.2% of its
Russian journal revenue. Nine of such journals were being published
by both the Registrant and the predecessor of MN under conflicting
contracts and were the subject of the above-mentioned litigation.
Under the Distribution Agreement, in 1995 and 1996 MN
will undertake the publication of the English translations of 11
additional Russian journals, to be promoted and distributed by
the Registrant, representing a total of an additional 13.7% of
the Registrant's 1993 Russian journal revenue and 5.6% of its
total journal revenue. Commencing in such years, MN may elect
to publish the English translations of up to 23 additional
Russian journals, to be promoted and distributed by the Regis-
trant. The total revenue to the Registrant from these 23 jour-
nals equals 29.2% of Registrant's 1993 Russian journal revenue
and 11.9% of its total journal revenue. As to each additional
journal which is published by MN and distributed by the Registrant
under the Distribution Agreement, the Registrant will retain 35%
of the revenue in the initial year of distribution, with the amount
gradually being reduced to 30% over a six-year period.
MN intends to cause the above-mentioned journals to be
translated and published in the former Soviet Union. The Regis-
trant will continue its activities in translating, publishing and
distributing both the journals subject to the Distribution
Agreement until they are published by MN and the approximately 40
English Translation Russian Journals not subject to the Agreement.
These activities will be undertaken pursuant to the Registrant's
existing English translation and publication contracts with the
individual entities publishing the Russian language journals which
generally extend through 2001.
The translation journals published by MN will be
distributed by the Registrant under the MAIK Nauka/Interperiodica
imprint, and it will be indicated that they are distributed
worldwide by Plenum/Consultants Bureau. Those translation
journals translated and published by the Registrant will continue
to be published under the Registrant's "Consultant's Bureau"
imprint.
Management expects that in 1994 and thereafter, reve-
nues and net income from subscription journals will decrease as a
result of the Registrant's modified relationship to the transla-
tion journals covered by the Distribution Agreement, and also as
a result of the political and economic situation in Russia and in
the other republics of the former Soviet Union.
The translation work required for the publication of
the Registrant's Russian language material is done primarily by
scientists and technical persons in the United States and else-
where who have other principal occupations. The Registrant
maintains relationships with approximately 130 such persons, most
of whom have been rendering translation services to the Regis-
trant for several years. The Registrant has been able to obtain
the required translators to enable it to meet its needs. The
number of translators reflects a reduction from previous years
since the Registrant, under the Distribution Agreement, will be
translating fewer journals.
In addition to the Russian Language Translation Jour-
nals, the Registrant published 96 journals in its English Lan-
guage Journal Program in 1993. The journals are published under
the Registrant's "Plenum Press" imprint, and include titles in
chemistry, physics, mathematics, computer science, engineering,
biology, medicine, psychiatry, social sciences and law. Each
journal is published under the direction of an editorial board
composed of professionals specializing in the fields of research
covered by the journal.
The Registrant's subsidiary, Human Sciences Press,
Inc., publishes 50 journals, under the "Human Sciences Press"
imprint. These journals are primarily in the health, behavioral
and social science fields.
Outside Journals
- ----------------
In April 1993, an American learned society with which
the Registrant had a contract to produce English translations of
11 Russian language journals for publication by that society gave
notice that it would not exercise the option of renewing the
contract beyond the term ending with the 1993 volume year. For
1993, the amount of revenue generated from the production of
these 11 journals was approximately $1,261,000; however, such
revenue will cease during 1994.
The Registrant, through its Boston-based J.S. Canner &
Company, Inc. subsidiary, engages in the purchase and sale of
backissue periodicals to libraries, colleges, universities and
other users.
Books
- -----
The Registrant's Plenum Press division publishes scientific,
technical and medical books for use by scientists, engineers, research
workers, other professionals and graduate students, and their
supporting libraries, research laboratories and institutions. During
1993, the division published 288 new titles as part of this program,
and had an active backlist of approximately 3,800 titles as of December
31, 1993. During 1992, 305 new titles were published. Titles include
comprehensive treatises, monographs and other advanced text-reference
works, as well as proceedings of meetings reporting original scientific
research, works surveying the state of the art in various scientific
fields and specialized bibliographies and data compilations. In recent
years, a number of books treating scientific topics of interest to the
general reader have also been published.
The Registrant's DaCapo Press, Inc. subsidiary publishes
reprints of books in music, dance, visual arts and the social
sciences. These books are sold mainly to libraries and specialists
in these fields. DaCapo also publishes a line of academic/trade
paperbacks in the arts, biography and history. During 1993, this
subsidiary published 40 titles compared to 43 titles in the prior
year. As of December 31, 1993, this subsidiary had an active
backlist of approximately 1,500 titles.
The Registrant's Human Sciences Press, Inc. subsidiary
had an active backlist of approximately 400 titles as of December
31, 1993. The Registrant has no immediate plans to publish new
titles under the Human Sciences imprint, but will continue to
publish the backlist under such imprint. The Human Sciences
books are primarily in the health, behavioral and social science
fields, and are sold mainly to libraries and professionals in
these fields.
Database Products
- -----------------
The Registrant's IFI/Plenum Data Corporation subsidiary
("IFI") is primarily involved in providing to major industrial
users on-line access to the IFI Comprehensive Data Base of
Patents, a computerized index file containing references to all
United States chemical and chemical related patents issued since
January 1950. The Registrant's customers generally use terminals
at their own facilities to obtain the information through several
international database networks. The file is further utilized by
IFI in its performance of patent searches for law firms and other
customers. IFI produces other on-line databases for searching
chemical, general, electrical and mechanical United States
patents, and publishes in book format the Patent Intelligence and
Technology Report and The Assignee Index, all of which are patent
information publications. IFI also offers other online database
products including Mental Health Abstracts and Information
Science Abstracts.
The Registrant through its subsidiary, Career Placement
Registry, Inc. ("CPR"), has developed a database system of infor-
mation concerning college graduates and experienced personnel who
are seeking employment opportunities. The information had been
made available to the approximately 150,000 subscribers to the
Dialog Information Services of Knight-Ridder, Inc. Effective
March 1, 1994, Dialog discontinued carrying the database due to
insufficient use. CPR is currently seeking another carrier.
Since its creation in 1981, the operations of CPR have not had a
significant impact on the Registrant's earnings.
Other Publishing Activities
- ---------------------------
Plenum Publishing Company Limited, the Registrant's English
subsidiary, provides sales representation for the Registrant in the
United Kingdom and European markets. Plenum Publishing Company Limited
also performs editorial procurement services for the scientific book
and journal publishing programs of the Registrant.
Competition
- -----------
The market in which the Registrant operates both for the
procurement of manuscripts and the sale of its products is highly
competitive. The Registrant is one of the leading publishers and
distributors of English translations of Russian scientific journals.
However, several other companies with English translation capabilities
have relationships with individuals and entities responsible for the
publication of scientific and technical material in the former Soviet
Union. In addition, other publishers in the United States and abroad
with greater financial resources than the Registrant are engaged in the
publication of original English language scientific materials and
database products, as well as the reprint of out-of-print books
and other books generally not available.
Export Sales
- ------------
The Registrant's sales derived from customers outside the United
States aggregated approximately $23,217,000 in 1993 (approximately 43% of
consolidated sales). Sales derived from customers outside the United
States were approximately $21,214,000 in 1992 and $21,453,000 in 1991
(approximately 39% and 40%, respectively, of consolidated sales). The
Registrant generally prices its products sold abroad in U.S. dollars.
Investments in Securities
- -------------------------
In 1993, the Registrant's dividends, interest income, net
realized and unrealized gains/losses on marketable securities, and
equity in the net income (loss) of Gradco Systems, Inc. (the foregoing
items net of interest expense and other investment-related expenses)
represented 3.2% of the Registrant's pre-tax income. In 1992, such
items (net of interest expense and other investment-related expenses)
represented 18.4% of pre-tax income.
The Registrant's excess cash is invested principally in
a portfolio of marketable securities. Market conditions and the
nature of the investments have an impact on the performance of
the portfolio. Excess cash is also invested in part, from time
to time, in short-term investments such as time deposits, money
market funds and commercial paper, and in the past has been
invested in U.S. Government securities. The investments of ex-
cess cash are available for corporate purposes, and have been so
used periodically. On April 30, 1993 the Registrant's outstand-
ing 6-1/2% convertible subordinated debentures due 2007 were re-
deemed, requiring an expenditure of $40,734,793 which was funded
principally from liquidation of a portion of such investments.
The Registrant owns 913,000 shares of Common Stock of
Gradco Systems, Inc. ("Gradco"), an office automation company,
which were acquired by the Registrant during the period October,
1989 through August, 1991. The acquisitions by the Registrant
have been reported in a Statement on Schedule 13D and amendments
thereto filed jointly with the Securities and Exchange Commission
by the Registrant and by its Chairman, Martin E. Tash, and his
wife, who as of the date hereof had acquired a total of 250,672
shares. Mr. Tash also has currently exercisable options to
purchase 50,000 additional shares. The filings are required
because the Registrant and Mr. and Mrs. Tash as a group (the
"Group") beneficially own more than 5% of the outstanding shares
of Gradco (11.7% by the Company and 3.8% by Mr. and Mrs. Tash,
inclusive of his currently exercisable options, as of the date
hereof, for a total of 15.5%).
In October 1990, in a proxy contest, a five-person slate
of directors was nominated by the Group in opposition to the
nominees of Gradco's then current management. The slate consisted
of Martin E. Tash (Registrant's Chairman of the Board and Chief
Executive Officer), Bernard Bressler (Secretary and a director of
Registrant) and three other individuals not affiliated with Registrant.
Three nominees of the Group (including Messrs. Tash and Bressler) were
elected to directorships, constituting a majority of the Board.
The newly named Board named Mr. Tash as Gradco's Chairman and Chief
Executive Officer.
The Group may be deemed to have obtained control of
Gradco in October 1990, as a result of the fact that its nominees
were elected as a majority of Gradco's Board of Directors.
Gradco's current five-person Board, elected without any opposing
nominees at its October 1993 Annual Meeting, consists of Messrs.
Tash and Bressler, and three other persons. All of the nominees
were designated as such at the request of the Group, which there-
fore may be deemed to continue to have control of Gradco.
Registrant has not undertaken any obligations in
connection with Gradco's operations or advanced any funds to it
and does not otherwise engage in business through Gradco.
The Registrant's investment in Gradco is reflected in
the Financial Statements included herein using the equity method
of accounting.
Gradco, the Registrant and Mr. Tash are defendants in a
lawsuit which has been brought by certain former management
employees of Gradco. See Item 3, Legal Proceedings.
-----------------
In view of the securities investments described above,
the Registrant evaluates its status under the Investment Company
Act of 1940, as amended (the "Company Act"), on an annual basis.
(Prior to the redemption of the Debentures, such evaluation had
been performed on a quarterly basis, but in view of the signifi-
cant reduction of investments resulting from the redemption, the
Registrant now considers an annual analysis to be sufficient.)
The Company Act requires the registration with the Securities and
Exchange Commission of, and imposes various substantive restric-
tions on, any "investment company." The Company Act defines the
term "investment company" to include a company that engages
primarily, or proposes to engage primarily, in the business of
investing, reinvesting or trading in securities. An "investment
company" may also include a company which engages or proposes to
engage in the business of investing, reinvesting, owning, holding
or trading in securities and which owns or proposes to acquire
investment securities (which for this purpose excludes U.S.
Government securities) having a value that exceeds 40% of the
value of such company's total assets (excluding cash items and
U.S. Government securities), unless the company is primarily
engaged in a business or businesses other than that of investing,
reinvesting, owning, holding or trading in securities.
The Registrant's principal business continues to be
publishing and distributing advanced scientific and technical
material, and the Registrant is not primarily engaged in invest-
ing, reinvesting or trading in securities. As of December 31,
1993, investment securities represented less than 40% of the
value of the Registrant's total assets (exclusive of U.S. Govern-
ment securities and cash items), and in any event the Registrant
continued to be exempt from status as an investment company
pursuant to Rule 3a-1 under the Company Act because less than 45%
of the value of its total assets (exclusive of U.S. Government
securities and cash items) consisted of, and less than 45% of its
net income after taxes for the last four fiscal quarters combined
was derived from, securities (other than U.S. Government securi-
ties).
Miscellaneous Information
- -------------------------
The Registrant currently employs approximately 300 full
time employees.
Backlog is not significant in the Registrant's business
because orders are filled on a current basis. The Registrant
does receive payments and on occasion records receivables from
journal subscribers in advance of the issuance of journals, and the
amounts appearing on the Registrant's Consolidated Balance Sheets
as "Deferred Subscription Income" represent these items.
See Note 1 of Notes to Consolidated Financial Statements.
The business of the Registrant is not seasonal. No
material portion of the business of the Registrant is subject to
renegotiation of profits or termination of contracts at the
election of the Government. Compliance with the provisions
enacted regulating the discharge of materials into the environ-
ment or otherwise relating to the protection of the environment
does not have an effect upon the Registrant.
<PAGE>
Item 2. Properties
----------
As of December 31, 1993, the Registrant had leases at
the following principal locations:
<TABLE>
<CAPTION>
Expiration Annual
Address Size Date of Lease Rent
- ------- ---- ------------- ------
<S> <C> <C> <C>
233 Spring Street 61,650 sq. ft. 2007 $264,114 in 1994,
New York, NY and increasing to a
maximum of $340,512
in 2006.
150 Bay Street 10,000 sq. ft. 1997 $49,400 in 1994
Jersey City, NJ and thereafter
10 Charles Street 20,800 sq. ft. 1996 $125,073 in 1994
Needham Heights, MA and thereafter
90 Middlesex Street 2,400 sq. ft. 1996 $44,000 in 1993
London, U.K. and thereafter
</TABLE>
Various of the leases referred to above provide for
additional payments or increases in rent over the base rental
specified above under different circumstances. In addition to
the leases referred to above, the Registrant or its subsidiaries
have leases on space at various locations with a total annual
rental of approximately $22,450.
The Registrant's warehouse operations are conducted at
a 69,000 square foot warehouse in Edison, New Jersey which is
owned by Registrant.
<PAGE>
Item 3. Legal Proceedings
-----------------
(a) Plenum Publishing Corporation v. Interperiodica,
-----------------------------------------------
et al.
- ------
This litigation, which was previously reported in the
Registrant's Report on Form 10-K for the fiscal year ended Decem-
ber 31, 1992, was discontinued with prejudice and without costs
in December 1993, pursuant to the Journal Production and Distrib-
ution Agreement described in Item 1, Business, under "Subscrip-
--------
tion Journals."
(b) Stewart, et al. v. Gradco Systems, Inc.,
---------------------------------------
Plenum Publishing Corporation, et al.
- ------------------------------------
As the result of the proxy contest in October 1990,
described above in Item 1, Business, under "Investments in
Securities", the composition of the Board of Directors of Gradco
Systems, Inc. ("Gradco") was changed. Among such changes were
the election of Martin E. Tash, the Registrant's Chief Executive
Officer, to the Gradco Board, and the non-renewal of Keith
Stewart as a member of the Gradco Board. Mr. Tash succeeded Mr.
Stewart as Chief Executive Officer of Gradco.
In December 1990, Gradco asserted claims in the Superi-
or Court of California against Mr. Stewart and others, alleging a
conspiracy on their part to defraud Gradco of a substantial part
of its assets. Mr. Stewart was charged with converting Gradco
funds to satisfy his personal obligations and other wrongful
actions, including defaulting on a promissory note in Gradco's
favor. The aggregate of the allegedly converted funds exceeds
$1,000,000. The complaint, among other things, also seeks a
declaration that no payments are due under "golden parachute"
agreements which are claimed to have been wrongfully obtained.
Certain of Gradco's former employees, including Mr.
Stewart, have instituted actions in the Superior Court of Cali-
fornia against Gradco, Mr. Tash and the Registrant, claiming,
among other things, the breach of the above-referenced "golden
parachute" agreements. The stated aggregate claims for compensa-
tory damages by said former employees exceeds $20,000,000. Of
that sum, approximately $2,500,000 is attributable to the afore-
said alleged breach of the "golden parachute" agreements. The
balance is principally attributed to various causes of action
arising from the same set of facts, including such claims as bad
faith denial of contract existence, conspiracy to induce breach
of contract, and intentional infliction of emotional distress.
Gradco, the Registrant and Mr. Tash have denied all liability and
have interposed various affirmative defenses. The claims by one
of the former employees have been settled, with Gradco being
responsible for the settlement payments.
Pre-trial discovery is being conducted with respect to
the aforesaid matters in dispute, and the discovery cutoff date
is June 30, 1994. A trial date has not yet been set. Management
of the Registrant, after consultation with counsel, believes that
the action will not result in a material loss to the Registrant
and intends to vigorously defend against it.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable.
PART II
Item 5. Market for the Registrant's Common Equity and Related
-----------------------------------------------------
Stockholder Matters
-------------------
The Common Stock of the Registrant is traded on the NASDAQ
National Market System. The following table sets forth, for the
calendar quarters indicated, information furnished by the NASD, Inc.
as to the high and low sale prices for the Registrant's Common Stock
as reported on the NASDAQ National Market System under the symbol PLEN.
The table also sets forth dividends declared during such periods.
There were approximately 638 record holders of the Registrant's Common
Stock on March 14, 1994. The number of holders as so stated does not
include individual participants in security position listings.
Dividends
Calendar Year Ended December 31, High Low Per Share
- -------------------------------- ---- --- ---------
1993
- ----
First Quarter.................... 30-1/2 25-3/4 $ .27
Second Quarter................... 30 25-1/2 .27
Third Quarter.................... 27-3/4 22-3/4 .27
Fourth Quarter................... 26-1/4 22-1/2 .27
Dividends
Calendar Year Ended December 31, High Low Per Share
- -------------------------------- ---- --- ---------
1992
- ----
First Quarter.................... 22-7/8 19-1/2 $ .26
Second Quarter................... 21-3/4 20-1/2 .26
Third Quarter.................... 23-1/2 20-3/4 .26
Fourth Quarter................... 26-3/8 22-3/4 .26
The Registrant has paid cash dividends on its Common
Stock in each year since 1974. The payment and amount of future
dividends are dependent upon the Registrant's earnings, general
financial condition and the requirements of the business and upon
declaration of the dividend from time to time by the Board of
Directors.
<PAGE>
<TABLE>
Item 6. Selected Financial Data
------------------------
<CAPTION>
Year Ended December 31,
1993 1992 1991 1990 1989(a)
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Subscriptions, books,
outside journals and
other sales, net $54,098,246 $53,725,999 $53,374,599 $52,004,674 $ 47,573,471
Income (loss) from interest
and dividends, and net
realized and unrealized
gain/loss on marketable
securities 1,769,959 7,133,921 11,633,588 (1,234,235) 11,960,981
Equity in net income (loss)
of Gradco Systems, Inc.(b) 4,565 (100,430) (91,300) (4,168,681) (1,242,590)
Income before extraordinary
items and cumulative
effect on prior years of
accounting change 10,928,707 12,148,883 17,235,054 1,917,329 13,910,422
Extraordinary (loss)
gain(c) (1,319,794) 394,823 100,638 196,659 -
Cumulative effect on
prior years of accounting
change(d) - 1,179,950 - - -
Net income 9,608,913 13,723,656 17,335,692 2,113,988 13,910,422
Per share of Common Stock
- -- primary:
Income before extraordinary
items and cumulative
effect on prior years of
accounting change 2.37 2.57 3.43 .35 2.52
Extraordinary (loss)
gain(c) (.29) .08 .02 .04 -
Cumulative effect on
prior years of accounting
change(d) - .25 - - -
Net income 2.08 2.90 3.45 .39 2.52
Per share of Common
Stock -- fully diluted(e):
Income before extraordinary
items and cumulative
effect on prior years of
accounting change 2.30 2.28 2.92 - 2.24
Extraordinary (loss)
gain(c) (.26) .06 .02 - -
Cumulative effect on prior
years of accounting
change(d) - .19 - - -
Net income 2.04 2.53 2.94 - 2.24
Total assets 88,605,160 125,852,355 128,364,118 122,853,925 132,685,432
Long-term debt - 40,827,000 47,635,000 48,935,000 50,635,000
Dividend declared per
share of Common Stock 1.08 1.04 1.00 .92 .80
<FN>
Footnotes to Table of Selected Financial Data
(a) Reclassified to conform to 1990 presentation.
(b) The Company's investment in Gradco Systems, Inc., which
had been included in marketable securities in 1989, was
reclassified in 1990 to reflect it as if it had been
accounted for using the equity method since inception.
(c) Extraordinary loss in 1993 results from the early retirement
of 6 1/2% Convertible Subordinated Debentures on April 30, 1993.
(d) Effective January 1, 1993, the Registrant has made an
accounting change for deferred taxes as a result of the
application of the Statement of Financial Accounting Stan-
dards No. 109.
(e) Fully diluted net income per share is not presented for
the periods where the result of the computation is anti-
dilutive.
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
--------------------------------------------------
Results of Operations
- ---------------------
1993 Compared to 1992
- ---------------------
Revenues from the Company's publishing operations in-
creased by 0.7% to $54,098,246. Revenues from subscriptions and
outside journals increased by 2.4%, primarily attributable to
more journal issues being published and higher selling prices,
offset by non-renewals of subscriptions partially due to the
reduced buying power of libraries. Revenues from book sales
decreased by 6.2% primarily due to fewer book titles being
published.
In December 1993, the Company entered into a Journal
Production and Distribution Agreement (the "Distribution Agree-
ment") with the Russian Academy of Sciences (the "Academy") and
other interested parties pursuant to which the litigation then
pending, relating to the translation of Russian scientific
journals, was ended, and the Company's role as publisher and
distributor of certain of such journals was altered. The Distri-
bution Agreement extends from 1994 through 2006.
Pursuant to the Distribution Agreement, in 1994 the
Company will distribute for MAIK Nauka ("MN"), an entity owned in
part by Pleiades Publishing, Inc. and the Academy, 21 Russian
scientific journals in English. MN will become the exclusive
publisher of such journals. Prior thereto, the Company had
translated, published and distributed these journals under a con-
tract with the Copyright Agency of the former Soviet government,
and under contracts with the individual institutes publishing the
journals, and had paid royalties based in part upon the number of
subscribers. Under the Distribution Agreement, the Company will
continue to promote and distribute these journals throughout the
world, and will continue to deal with and collect from subscribers
to the journals, retaining a portion of such revenues for performing
its function. In 1994, the Company will retain 35% of the revenue,
with the amount gradually being reduced to 30% in 1999 and remaining
at that level for the balance of the term of the Distribution Agreement.
Revenue from such 21 journals in the 1993 journal year constituted 6.7%
of the Company's overall journal revenue and 16.2% of its Russian
journal revenue. Nine of such journals were being published by both the
Company and the predecessor of MN under conflicting contracts and were
the subject of the above-mentioned litigation.
Under the Distribution Agreement, in 1995 and 1996 MN will
undertake the publication of the English translations of 11
additional Russian journals, to be promoted and distributed by
the Company, representing a total of an additional 13.7% of the
Company's 1993 Russian journal revenue and 5.6% of its total
journal revenue. Commencing in such years, MN may elect to
publish the English translations of up to 23 additional Russian
journals, to be promoted and distributed by the Company. The
total revenue from these 23 journals equals 29.2% of the Comp-
any's 1993 Russian journal revenue and 11.9% of its total journal
revenue. As to each additional journal which is published by MN
and distributed by the Company under the Distribution Agreement,
the Company will retain 35% of the revenue in the initial year
of distribution, with the amount gradually being reduced to 30%
over a six-year period.
MN intends to cause the above-mentioned journals to be
translated and published in the former Soviet Union. The Company
will continue its activities in translating, publishing and
distributing both the journals subject to the Distribution
Agreement until they are published by MN and the approximately 40
English Translation Russian Journals not subject to the Agreement.
These activities will be undertaken pursuant to the Company's
existing English translation and publication contracts with the
individual entities publishing the Russian language journals which
generally extend through 2001.
Management expects that in 1994 and thereafter, revenues
and net income from subscription journals will decrease as a
result of the Company's modified relationship to the translation
journals covered by the Distribution Agreement, and also as a
result of the political and economic situation in Russia and in
the other republics of the former Soviet Union.
In April 1993, an American learned society with whom the
Company had a contract to produce English translations of 11
Russian language journals for publication by that society gave
formal notice that they would not exercise the option of renewing
the contract beyond the term ending with the 1993 volume year.
For fiscal 1993, the amount of revenue generated from the produc-
tion of these 11 journals was approximately $1,261,000; however,
such revenue will cease during fiscal 1994.
The cost of sales as a percentage of revenues increased
from 39.82% to 40.08%, primarily due to higher salaries and
employee benefit costs, offset by a more favorable mix of reve-
nues from subscriptions and outside journals and book sales. The
increase in royalty expenses was principally due to increased
royalty rates. The decrease in selling, general and administra-
tive expenses was primarily attributable to decreased profession-
al fees and bad debt expense, offset by higher salaries, employee
benefit costs and sales commissions.
The decrease in interest income was principally due to
lower interest rates and decreased investments in Government
securities, time deposits and money market funds, arising in
large part because of the decrease in investment assets utilized
for redemption of the Company's 6-1/2% Convertible Subordinated
Debentures on April 30, 1993. The increase in dividend income
resulted from the increase in average investment in marketable
securities in 1993. The Company had a net realized gain of
$801,387 on marketable securities and recorded a provision of
$1,713,197 for net unrealized losses on marketable securities
for 1993, as compared to a net realized gain of $2,476,916 on
marketable securities for 1992. The decrease in interest expense
was primarily due to the redemption of the Debentures.
The decrease in net income was principally attributable
to the decrease in investment income as discussed in the preceding
paragraph and the extraordinary loss from early retirement of
6-1/2% Convertible Subordinated Debentures. The provision for
income taxes as a percentage of income decreased in 1993 as
compared to 1992 because in 1992 the Company recorded an additional
provision for state and local income taxes for assessments of such
taxes expected with respect to prior years.
In May 1993, the Financial Accounting Standards Board
issued statement of Financial Accounting Standards No.115,
"Accounting for Certain Investments in Debt and Equity Securities,"
effective for fiscal years beginning after December 15, 1993.
Under the new rules, which the Company will adopt effective
January 1, 1994, the Company will classify its marketable equity
securities held as trading securities on the basis of its intent
to trade such securities. Accordingly, all marketable equity
securities classified as trading securities will be carried at fair
market value. Unrealized gains and losses applicable to these
securities will be reported as a component of current earnings.
Presently, the Company values marketable equity securities as trading
securities and reports such securities at the lower of aggregate cost
or market, with unrealized losses reported as a component of current
earnings.
1992 Compared to 1991
- ---------------------
Revenues from the Company's publishing operations increased
by 0.7% to $53,725,999. Revenues from subscriptions and outside
journals increased by 2.3%, primarily attributable to higher selling
prices, offset by non-renewals of subscriptions partially due to the
impact of the recession on the buying power of libraries and individuals,
and fewer journal issues being published. Revenues from book sales
decreased by 5.3% primarily due to fewer book titles being published.
Revenues from database products increased by 9.7%, primarily due to
increased prices.
The cost of sales as a percentage of revenues increased from
39.56% to 39.82%, primarily due to higher salaries and employee benefit
costs, offset by a more favorable mix of revenues from subscriptions
and outside journals and book sales, and increased prices of database
products. The increase in royalty expense was principally due to
increased royalty rates and higher costs associated with extended
English translation and publication agreements with Institutes publishing
scientific journals in Russia. The insignificant decrease in selling,
general and administrative expenses was primarily attributable to
lower sales commissions, advertising expenditures, computer expenses
and mailing expenses, offset by higher salaries and employee benefit
costs and increased professional fees.
The decrease in interest income was principally due to lower
interest rates. The increase in dividend income was due to increased
investment in marketable securities. The Company had a net realized
gain of $2,476,916 on marketable securities for 1992, as compared to a
net realized gain of $19,714 and a reversal of the provision of $6,544,417
for net unrealized loss on marketable securities for 1991. The decrease
in interest expense resulted from the repurchase of $6,808,000 of 6 1/2%
Convertible Subordinated Debentures due April 15, 2007.
The decrease in net income was principally due to the decrease
in investment income discussed in the preceding paragraph, decreased
income from publishing operations and an increase in the provision for
income taxes as a percentage of income, offset by the cumulative effect
on prior years of accounting change for deferred income taxes and
extraordinary credit arising from the repurchase of 6 1/2% Convertible
Subordinated Debentures. The provision for income taxes as a percentage
of income increased because the reversal of net unrealized losses on
marketable securities in 1991 was exempt from income taxes to the extent
that said losses, when incurred in 1990, had no deferred tax benefits
recognized, and in 1992 the Company recorded an additional provision
for state and local income taxes for assessments of such taxes expected
with respect to prior years.
Liquidity and Sources of Capital
- --------------------------------
The ratio of current assets to current liabilities is 6.3 to 1
at December 31, 1993 compared to 2.1 to 1 at December 31, 1992.
Management anticipates that internally generated funds will
exceed requirements of the operations of the business. The Company
also has funds of approximately $53,855,000 at December 31, 1993
invested in marketable securities and in cash, which are available for
corporate purposes.
On April 30, 1993 (the "Redemption Date"), pursuant to a
notice of election to redeem which had been given to the holders
on March 24, 1993, the Company redeemed the Debentures which were
outstanding on the Redemption Date. In accordance with the terms
of the Debentures and the applicable Trust Indenture, the redemp-
tion required a total payment of $40,734,793 (representing the
redemption price of 102.60% of the principal amount of outstanding
Debentures and accrued interest from April 15 to April 30, 1993).
This amount was funded by liquidating a portion of the Company's
investments of its excess cash, and from short-term borrowing on
the Company's margin account with a broker.
Item 8. Financial Statements and Supplementary Data
---------------------------------------------------
Response to this Item is contained in Item 14(a).
Item 9. Changes in and Disagreements with Accountants on Ac-
counting and Financial Disclosure
----------------------------------------------------
Not applicable.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
---------------------------------------------------
(a) The following table sets forth the name of each director
and executive officer of the Registrant, the date on which his present
term as a director will expire, and the nature of all positions and
offices with the Registrant held by him at present. The term of office
of all executive officers expires at the next annual meeting of
stockholders of the Registrant, which is to be held in June 1994.
Present Term
as Director
Name Expires Position
- ---- ------------- --------
Martin E. Tash 1994 President and
Chairman of the Board
of Directors
Mark Shaw 1994 Executive Vice
President and Director
Bernard Bressler 1994 Secretary and Director
Earl Ubell 1995 Director
N. Bruce Hannay 1995 Director
Howard F. Mathiasen 1995 Director
Ghanshyam A. Patel ---- Treasurer and Chief
Financial Officer;
Assistant Secretary
(b) The following is a brief account of the recent
business experience of each director and executive officer, and
directorships held with other companies which file reports with
the Securities and Exchange Commission.
Name Business Experience
- ---- -------------------
Martin E. Tash, Mr. Tash has been actively engaged in the
age 53 the Registrant's business since 1971. He has
been Chairman of the Board and President
since July 15, 1977, and served as Treasurer
and Chief Financial Officer from 1971 until
September 29, 1986. Mr. Tash is also Chairman
of the Board and Chief Executive Officer of
Gradco Systems, Inc.
Mark Shaw, Mr. Shaw has been actively engaged in the
age 55 Registrant's business since 1963. He has
been Executive Vice President since July
15, 1977, and manages the Registrant's
book and journal publication program.
Bernard Bressler, Mr. Bressler has been a practicing
age 66 attorney since 1952, and is presently a
member of the firm of Bressler, Amery &
Ross, counsel to the Registrant. Mr.
Bressler is also a director of Gradco
Systems, Inc.
Earl Ubell, Mr. Ubell has been the Health and Science
age 67 Editor of WCBS-TV since September 11,
1978. Between August 1976 and September
1978, Mr. Ubell was the Producer of
Special Events and Documentaries for NBC
News. For more than three years prior to
that time, Mr. Ubell was the Director of
News of WNBC-TV.
N. Bruce Hannay, Dr. Hannay has been a business and
age 73 technical consultant since his retire-
ment, as of April 10, 1982, from Bell
Telephone Laboratories, Incorporated
where he had held the position of Vice
President - Research and Patents for the
preceding ten years. Dr. Hannay had been
employed by Bell Laboratories since 1944
and had been engaged in a variety of re-
search programs. Dr. Hannay performs
consulting services for several comp-
anies, and is a director of General Sig-
nal Corp., and of a group of mutual funds
sponsored by Alex. Brown & Sons, Inc.
Howard F. Mathiasen, Mr. Mathiasen is retired. From
age 56 July 1982 to June 1987 Mr. Mathiasen was
Senior Vice President of National West-
minster Bank U.S.A. (formerly known as
The National Bank of North America).
Between June 1979 and July 1982 he was
Vice President of that Bank. Between May
1, 1978 and April 1979, Mr. Mathiasen was
Senior Vice President of Nassau Trust
Company. Between January 1975 and May
1978, Mr. Mathiasen was Vice President of
Chemical Bank.
Ghanshyam A. Patel, Mr. Patel has been Treasurer and
age 57 Chief Financial Officer of the Registrant
since September 29, 1986. Prior to that
he was with the accounting firm of Ernst
& Whinney (predecessor to Ernst & Young)
from April 1970 and served in the capacity
of Senior Manager commencing June 1977.
Item 11. Executive Compensation
----------------------
(a) Summary Compensation Table. The following table sets
forth all compensation awarded to, earned by or paid to the
following persons through March 14, 1994 for services rendered in
all capacities to the Registrant and its subsidiaries during each
of the fiscal years ended December 31, 1993, 1992 and 1991:
(1) the Registrant's Chief Executive Officer, and (2) each of the
other executive officers whose total compensation for the fiscal
year ended December 31, 1993 required to be disclosed in column
(c) and (d) below exceeded $100,000.
SUMMARY COMPENSATION TABLE
--------------------------
(a) (b) (c) (d)1 (e)2
Name and All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($)
- ------------------ ---- ---------- --------- ----------------
Martin E. Tash 1993 290,000 295,400 30,000
Chairman of the 1992 275,000 335,650 30,000
Board and President 1991 250,000 287,350 30,000
(Chief Executive
Officer)
Mark Shaw 1993 290,000 211,000 30,000
Executive Vice 1992 275,000 239,750 30,000
President 1991 250,000 205,250 30,000
Ghanshyam A. Patel 1993 136,000 33,000 22,868
Treasurer and Chief 1992 130,000 37,500 20,839
Financial Officer 1991 120,000 32,000 18,196
Footnotes to Summary Compensation Table
- ---------------------------------------
(1)Represents amounts paid to the named executive officer, for the
applicable fiscal year, under the Registrant's Incentive Compensation
Plan. For each fiscal year an amount equal to 5% of the Registrant's
Income from Operations as reported in the Registrant's year-end
financial statements (together with, when applicable, 5% of the excess
of cumulative Investment Profit over cumulative Investment Loss) is
distributed to key employees. Thirty-five percent of such amount is
distributed to the chief executive officer and 25% is distributed to
the next senior officer. The balance of such amount is distributed as
determined by the chief executive officer. Since cumulative Investment
Profit (as defined) earned after 1990, through December 31, 1992,
exceeded Investment Loss (as defined) incurred in 1990, the excess was
added to Income from Operations for the purpose of calculating incentive
compensation for 1992. Since there was Investment Profit (as defined)
in 1993, the amount of such Profit was added to Income from Operations
for the purpose of calculating incentive compensation for 1993.
(2)Represents amount of contribution made to or accrued for the account
of the named executive officer, in respect of the applicable fiscal year,
in the Registrant's Profit Sharing Plan (a defined contribution plan
qualified under the Internal Revenue Code). The Plan is maintained for
all full-time employees who have completed certain minimum periods of
service. The Registrant contributes to the Plan specified amounts based
upon its after tax income as a percentage of gross revenue. The
Registrant's contribution to the Plan for each employee is determined
by his salary level and length of service. Contributions are
invested by the Plan Trustee in stock of the Registrant and/or in a
variety of other investment options, depending upon the employee's
election. Interests in the Plan become vested to the extent of 20%
after three years of service and vest at the rate of an additional
20% for each year of service thereafter and in any event become 100%
vested at death or at the "normal retirement age" of 55 as specified
in the Plan. Each employee (or his beneficiary) is entitled to receive
the value of his vested interest upon his death or retirement. He may
also receive the value of such interest upon prior termination of his
services with the Registrant, or if he elects at any time to withdraw his
interest. The interests of Messrs. Tash, Shaw, and Patel are fully vested.
The aggregate contributions made or accrued by the Registrant
through the end of fiscal 1993 for Messrs. Tash, Shaw and Patel under
this Plan are $405,650, $425,525 and $109,694, respectively; these
contributions have been invested in the manner set forth above, and
(as to Mr. Shaw) a portion of the investments was transferred from the
Plan into a private profit sharing plan of which Mr. Shaw is the beneficiary.
(b) Compensation of Directors.
-------------------------
Directors fees for Dr. N. Bruce Hannay and Messrs. Earl
Ubell and Howard F. Mathiasen are currently at the rate of $9,500 per
annum each. Directors of the Registrant who are also officers of the
Registrant receive no additional compensation for their services as
directors.
(c) Termination of Employment and Change of Control
Arrangements Regarding Named Executive Officers.
------------------------------------------------
(i) See footnote (2) to table in Item 11(a) for
information as to entitlement of Messrs. Tash, Shaw and Patel to
receive certain distributions under the Registrant's Profit Sharing
Plan upon termination of their employment.
(ii) On September 22, 1989, the Registrant adopted
Amended Contingent Compensation Agreements with Martin Tash and Mark
Shaw (executive officers of the Registrant named in the table in
item 11(a)) and with Harry Allcock and Marshall Lebowitz (officers
of subsidiaries of the Registrant). The Amended Agreements supersede
the Contingent Compensation Agreements, adopted on October 8, 1986,
and provide that if (a) during the officer's employment or within six
months after his employment terminates, there is a sale of 75% of the
book value of the Registrant's operating assets (as defined), or if
any person or group becomes the owner of over 25% of the Registrant's
outstanding stock, and (b) the officer's employment is terminated at
or prior to the end of the sixth month after such event, then the
Registrant shall pay the terminated officer cash equal to 290% of the
officer's average annual taxable compensation over the preceding five
calendar years. The Amended Agreements add a provision specifying
that a successor in interest to the Registrant would remain liable
thereunder. They are otherwise substantially identical to the original
Agreements.
On December 14 1993, the Registrant entered into Contingent
Compensation Agreements with Ghanshyam Patel (an executive officer of the
Registrant named in the table in item 11(a)) and Ken Derham (an officer
of a subsidiary of the Registrant) on the same terms as the Amended
Agreements described above.
(d) Indemnification Agreements.
--------------------------
In September 1987, the Registrant's liability insurance
for its directors and officers expired and was not renewed due to the
significantly increased cost. In light of this development, and to
provide increased protection, the Registrant's By-Laws were amended
on November 18, 1987 to require the Registrant to advance expenses
of directors or officers in defending a civil or criminal action as
such expenses are incurred, subject to certain conditions.
Furthermore, on that date the Registrant entered into a contract
with each of its directors and executive officers, requiring
indemnification for expenses, judgments, fines and amounts paid in
settlement, in accordance with the By-Laws as ameded, or any
future By-Laws which provide greater indemnification. (On December
14, 1993, the Registrant entered into a substantially identical
contract with an officer of one of its subsidiaries.) The present
By-Laws provide for such indemnification, in connection with claims
arising from service to the Registrant, or to another entity at
Registrant's request, except where it would be prohibited under
applicable law.
(e) Compensation Committee Interlocks and Insider
Participation
---------------------------------------------
The Registrant's Board of Directors has no compensation
committee (or other Board committee performing equivalent functions);
compensation policies applicable to executive officers are determined
by the Board. During the fiscal year ended December 31, 1993, the
officers of the Registrant participating in the Board's deliberations
concerning executive compensation were Martin E. Tash, Mark Shaw and
Bernard Bressler (who are members of the Board).
During the fiscal year ended December 31, 1993, Martin
E. Tash (an executive officer of the Registrant) served as a
member of the Board of Directors of Gradco Systems, Inc. ("Gradco").
Gradco has no compensation committee (or other Board committee
performing equivalent functions); compensation policies applicable
to executive officers are determined by its Board. Mr. Tash
is an executive officer of Gradco and is the only such executive
officer who also served on Registrant's Board. Bernard Bressler
(Secretary and a director of Registrant) is an officer and director
of Gradco, but he is not an executive director of either entity.
During the period since January 1, 1993, there were no
transactions between the Registrant and Gradco of the type
required to be disclosed under Item 13, Certain Relationships and
Related Transactions.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
----------------------------------------------------
(a) The following table sets forth information regarding
persons known to the Registrant to be the beneficial owners of more than
5% of the Registrant's voting securities as of March 14, 1994, based on
4,498,940 shares of Common Stock, $.10 par value, outstanding as of such
date.
Amount and
Nature of
Name and Address of Beneficial Percentage
Title of Class Beneficial Owner Ownership of Class
- -------------- ------------------- ---------- ----------
Common Stock Martin E. Tash 423,402
$.10 par value 233 Spring Street shares(1) 9.41%
New York, NY 10013
Arlene S. Tash 298,229
17049 Northway Circle shares(2) 6.63%
Boca Raton, FL 33496
Southeastern Asset 328,000
Management, Inc. shares(3) 7.29%
860 Ridgelake Boulevard
Memphis, TN 38120
Quest Advisory Corp. 456,150
and Quest Management shares(4) 10.14%
Company as a Group
1414 Avenue of the Americas
New York, NY 10019
Footnotes
- ---------
(1) Includes 112,253 shares held by the Registrant's Profit
Sharing Plan, as to which Mr. Tash has voting and investment
power. Of the aggregate of 423,402 shares shown, Mr. Tash
has sole voting and investment power as to 125,173, and
shared voting and investment power with his wife as to
298,229.
(2) Shares are owned jointly by Mrs. Tash with her husband,
Martin E. Tash, and she shares voting and investment power
with him. Shares are included in the 423,402 shares shown
as owned by Mr. Tash.
(3) Number of shares as shown in beneficial owner's Amendment
No. 2 to Schedule 13G dated February 11, 1994, filed with
the Securities and Exchange Commission, reporting ownership
as of December 31, 1993. According to such Schedule 13G,
Southeastern Asset Management, Inc. is an Investment Adviser
registered under the Investment Advisers Act of 1940. It
has sole voting power and no dispositive power as to 218,000
of the shares shown, and shared voting and dispositive power
as to 110,000 of said shares. According to the Schedule
13G, all of the aforesaid securities "are owned legally by
Southeastern's investment advisory clients and none are
owned directly or indirectly by Southeastern. As permitted
by Rule 13d-4, the filing of this statement shall not be
construed as an admission that Southeastern is the beneficial
owner of any of [such] securities." The Schedule 13G was also
filed by O. Mason Hawkins, Chairman of the Board and President
of Southeastern "in the event he could be deemed to be a
controlling person of that firm as the result of his official
position with or ownership of voting securities. The existence
of such control is expressly disclaimed. Mr. Hawkins does not
own directly or indirectly any securities covered by this
statement for his own account. As permitted by Rule 13d-4,
the filing of this statement shall not be construed as an
admission that Mr. Hawkins is the beneficial owner of any of
the securities covered by this statement." The Schedule 13G
reflects that Mr. Hawkins has voting or dispositive power as
to none of the Registrant's shares.
(4) Number of shares as shown in beneficial owner's Amendment No. 1
to Schedule 13G dated February 8, 1994, reporting ownership as
of December 31, 1993. According to such Schedule 13G, each of
Quest Advisory Corp. ("Quest") and Quest Management Company
("QMC") is an Investment Adviser registered under the Investment
Advisers Act of 1940. Quest has sole voting and dispositive
power as to 418,650 of the shares shown above, representing
9.31% of the outstanding Common Stock, and QMC has sole voting
and dispositive power as to 37,500 of the shares shown above,
representing 0.83% of the outstanding Common Stock. The Schedule
13G also includes Charles M. Royce as part of the Group and
indicates that he may be deemed to be a controlling person of Quest
and QMC, and as such may be deemed to beneficially own the shares
of the Registrant beneficially owned by Quest and QMC. Mr. Royce
owns no shares of the Registrant outside of Quest and QMC and has
disclaimed beneficial ownership of the shares reported above.
(b) The following table sets forth information regarding the voting
securities of the Registrant beneficially owned by each director of the
Registrant, each of the executive officers named in the Summary
Compensation table in item 11, Executive Compensation, and all executive
officers and directors as a group, without naming them (7 persons), as
of March 14, 1994.
Amount and
Nature of
Name and Address of Beneficial Percentage
Title of Class Beneficial Owner Ownership of Class
- -------------- ------------------- ---------- ----------
Common Stock Martin E. Tash 423,402
$.10 par value 233 Spring Street shares (1) 9.41%
New York, NY 10013
Mark Shaw 80,667
233 Spring Street shares (2) 1.79%
New York, NY 10013
Earl Ubell 1,000
WCBS-TV shares *
524 West 57th Street
New York, NY 10019
Howard F. Mathiasen 28,125
10276 Totem Run shares *
Littleton, CO 80125
Bernard Bressler 12,809
Bressler, Amery & shares (3) *
Ross
90 Broad Street
New York, NY 10004
N. Bruce Hannay 1,000
201 Condon Lane shares(4) *
Port Ludlow, WA 98365
Ghanshyam A. Patel 9,801 *
233 Spring Street shares(5)
New York, NY 10013
All Executive 556,804 12.38%
Officers and Directors shares
as a Group
(7 persons, comprising
all those shown above)
* Less than 1%.
(1) See footnote (1) to table in Item 12(a).
(2) Includes 50,625 shares held in trust for adult children. Of
the aggregate of 80,667 shares shown, Mr. Shaw has sole
voting and dispositive power as to 67,085 and shared voting
and dispositive power with his wife as to 13,582.
(3) Includes 572 shares held by a trustee for Mr. Bressler under
an Individual Retirement Account. Does not include 12,497
shares held by Mr. Bressler's wife as to which he disclaims
beneficial ownership.
(4) Shares are held in the name of Dr. Hannay's wife and comprise
community property. Dr. Hannay therefore has a direct
beneficial ownership interest in the shares. He and his
wife have shared voting and dispositive power.
(5) Includes 4,451 shares held by the Registrant's Profit Sharing
Plan, as to which Mr. Patel has sole voting and dispositive
power. As to the balance of 5,350 shares, Mr. Patel shares
voting and dispositive power with his wife.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
Bernard Bressler, Secretary and a director of the Registrant,
is a member of the law firm of Bressler, Amery & Ross, counsel to the
Registrant. During the 1993 fiscal year, the Registrant paid legal fees
of $192,899, to such firm.
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K
--------------------------------------------
(a) See index to financial statements and financial
statement schedules. See list of exhibits in paragraph (c) below.
(b) 8-K reports - During the quarter ended December
31, 1993 (the last quarter of the period covered by this Report),
the Registrant filed a Report on Form 8-K to report the completion
on December 13, 1993 of the execution of the Journal Production and
Distribution Agreement dated November 29, 1993 with the Russian
Academy of Sciences and other interested parties.
(c) Exhibits -
3.1 Certificate of Incorporation of the Registrant
has been filed as part of Exhibit 3 to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1986.(1)
3.2 By-Laws of the Registrant, as amended November
18, 1987, have been filed as Exhibit 3.2 to
the Registrant's Annual Report on Form 10-k
for the fiscal year ended December 31, 1987.(1)
10.1 Journal Production and Distribution Agreement
dated November 29, 1993 among the Registrant,
MAIK Nauka, Interperiodica, Pleiades Publishing,
Inc., the Russian Academy of Sciences and Vo Nauka,
has been filed as Exhibit 99 to the Registrant's
Report on Form 8-K dated December 13, 1993.(1)
10.2 Incentive Compensation Plan for Executive
Officers and Key Employees of Registrant as
amended on June 18, 1985 has been filed as
part of Exhibit 10 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1985.(1)
10.3 Amendment adopted on December 5, 1990 to Plan
referred to in Item 10.3 has been filed as
exhibit 10.4 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended
December 31, 1990.(1)
10.4 Amended Contingent Compensation Agreements dated
September 22, 1989 between the Registrant and
Martin Tash, Mark Shaw, Harry Allcock and Marshall
Lebowitz have been filed as Exhibit 10.4 to the
Registrant's Annual Report on form 10-K for the
fiscal year ended December 31, 1989.(1) The
Registrant has entered into identical agreements
as of December 14, 1993, with Ghanshyam Patel and
Ken Derham. To avoid unnecessary duplication,
such additional agreements have been omitted
from the exhibit filing.
10.5 Indemnification Agreement dated as of November
18, 1987 between the Registrant and Martin E.
Tash has been filed as Exhibit 10.6 to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987.(1)
The Registrant has entered into identical
agreements as of the same date with each of the
following persons: Howard F. Mathiasen, Mark Shaw,
Earl Ubell, Dr. N. Bruce Hannay, and Bernard
Bressler. The Registrant entered into a
substantially identical agreement dated March 9,
1988 with Ghanshyam A. Patel and dated December
14, 1993 with Ken Derham. To avoid unnecessary
duplication, such additional agreements have
been omitted from the exhibit filing.
10.6 Amendment dated March 9, 1988 to Indemnification
Agreements referred to in Item 10.6 between the
Registrant and Martin E. Tash has been filed as
Exhibit 10.7 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31,
1987.(1) The Registrant has entered into identical
amendments of the same date with Mark Shaw and
Bernard Bressler. To avoid unnecessary duplication,
such identical amendments were omitted from the
exhibit filing.
11 Statement re: computation of per share earnings
- filed herewith.
21 Subsidiaries of Registrant
(i) Plenum Publishing Co., Ltd.
(United Kingdom)
(ii) Da Capo Press, Incorporated
(New York)
(iii) Career Placement Registry, Inc.
(Delaware)
(iv) J.S. Canner & Company, Inc.
(Massachusetts)
(v) Plenum International Sales
Corporation (Virgin Islands)
(vi) IFI/Plenum Data Corporation
(Delaware)
(vii) Human Sciences Press, Inc.
(Delaware)
(1) Not filed with this report but incorporated by reference herein.
<PAGE>
Signatures
----------
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
PLENUM PUBLISHING CORPORATION
(Registrant)
By:s/Martin E. Tash
----------------
Martin E. Tash
Chairman of the Board of Directors
and President
Dated: March 28, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated:
By:s/Martin E. Tash
----------------
Martin E. Tash
Chairman of the Board of Directors and
President (Principal Executive Officer)
Dated: March 28, 1994
By:s/Mark Shaw
---------------------
Mark Shaw
Executive Vice President and
a Director
Dated: March 28, 1994
By:s/Ghanshyam A. Patel
---------------------
Ghanshyam A. Patel
Treasurer and Chief Financial Officer
(Principal Financial and Accounting
Officer)
Dated: March 28, 1994
By:s/Bernard Bressler
---------------------
Bernard Bressler
Secretary and a Director
Dated: March 28, 1994
By:s/Earl Ubell
---------------------
Earl Ubell
Director
Dated: March 28, 1994
By:s/N. Bruce Hannay
---------------------
N. Bruce Hannay
Director
Dated: March 28, 1994
By:s/Howard F. Mathiasen
---------------------
Howard F. Mathiasen
Director
Dated: March 28, 1994
<PAGE>
Plenum Publishing Corporation and
Subsidiary Companies
Form 10-K Item 14(a)(1) and (2)
Index to Financial Statements
and Financial Statement Schedules
The following consolidated financial statements of Plenum Publishing
Corporation and subsidiary companies are included in Item 8:
Report of Independent Auditors S- 1
Consolidated Balance Sheets - December 31, 1993 and 1992 S- 2
Consolidated Statements of Income - Years ended
December 31, 1993, 1992 and 1991 S- 4
Consolidated Statements of Stockholders' Equity - Years ended
December 31, 1993, 1992 and 1991 S- 6
Consolidated Statements of Cash Flows - Years ended
December 31, 1993, 1992 and 1991 S- 7
Notes to Consolidated Financial Statements S- 9
The following consolidated financial statement schedules of Plenum
Publishing Corporation and subsidiary companies are included in Item 14(d):
Schedules:
I Marketable Securities - Other Investments S-22
VIII Valuation and Qualifying Accounts S-23
IX Short-Term Borrowings S-24
X Supplementary Income Statement Information S-25
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are
not required under the related instructions or are inapplicable, and
therefore, have been omitted.
<PAGE>
Report of Independent Auditors
Stockholders and Board of Directors
Plenum Publishing Corporation
We have audited the accompanying consolidated balance sheets of Plenum
Publishing Corporation and subsidiary companies as of December 31, 1993
and 1992, and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period ended
December 31, 1993. Our audits also included the financial statement
schedules listed in the Index at Item 14(a). These financial statements
and schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Plenum Publishing Corporation and subsidiary companies at
December 31, 1993 and 1992, and the consolidated results of their
operations and their cash flows for each of the three years in the
period ended December 31, 1993, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial
statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material
respects the information set forth therein.
ERNST & YOUNG
New York, New York
March 14, 1994
<PAGE>
<TABLE>
<CAPTION>
Plenum Publishing Corporation and Subsidiary Companies
Consolidated Balance Sheets
December 31
1993 1992
-------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents ($1,441,576 and $10,056,514)
in 1993 and 1992 $ 5,030,060 $10,703,199
U.S. Government securities, at cost (Note 3) - 31,896,181
Marketable securities, at aggregate market value (1993)
and cost (1992) (Note 11) 48,825,213 51,636,161
Interest and dividends receivable 224,568 916,324
Receivables-substantially all trade, net of allowances
for doubtful accounts ($179,000 and $187,000) and sales
returns ($669,000 and $680,000) in 1993 and 1992 8,698,080 4,880,930
Advance under the Distribution Agreement (Note 13) 750,000 -
Inventories (Note 4) 4,179,185 4,485,695
Deferred income tax benefits (Note 7) 2,930,691 1,866,275
---------------------------------
Total current assets 70,637,797 106,384,765
---------------------------------
Costs applicable to deferred subscription income 657,950 694,513
---------------------------------
Property, plant and equipment, at cost:
Land 690,000 690,000
Building, net of accumulated depreciation of
$330,826 and $228,346 3,202,951 3,305,431
Furniture, fixtures, equipment and leasehold
improvements, net of accumulated depreciation and
amortization of $760,100 and $689,278 454,850 471,874
Plate costs, net of accumulated depreciation of
$4,656,154 and $4,635,513 3,393,917 3,375,408
---------------------------------
7,741,718 7,842,713
---------------------------------
Deferred income taxes (Note 7) 1,070,309 993,446
---------------------------------
Deferred charges and other assets:
Cost of subscription lists of Human Sciences Press
and Agathon journals, net of accumulated amortization
of $1,433,699 and $1,158,440 3,268,866 3,544,125
Expenses relating to issuance of long-term debt, net
of accumulated amortization of $407,306 (Note 6) - 1,007,071
Royalties 2,075,189 2,139,576
Investment in Gradco Systems, Inc. (Note 5) 1,971,843 1,967,278
Other 272,476 316,385
---------------------------------
7,588,374 8,974,435
---------------------------------
Excess of cost of assets acquired over book amount
thereof, net of accumulated amortization of $1,229,838
and $1,176,367 909,012 962,483
---------------------------------
Total assets $88,605,160 $125,852,355
=================================
Liabilities and stockholders' equity
Current liabilities:
Due to Customers $ 612,460 $ 667,547
Accounts payable 1,508,098 998,060
Income taxes payable 2,184,797 1,808,661
Royalties payable 3,162,734 3,023,852
Other accrued expenses and sundry liabilities (Note 9) 2,534,040 3,293,113
Dividends payable 1,219,267 -
Debentures payable (Note 6) - 40,827,000
---------------------------------
Total current liabilities 11,221,396 50,618,233
Deferred subscription income 25,153,027 25,075,864
---------------------------------
Total liabilities 36,374,423 75,694,097
---------------------------------
Committments and contingencies (Notes 8, 9, 13 and 14)
Stockholders' equity:
Preferred Stock, par value $1 per share;
Authorized-1,000,000 shares; none issued
Common Stock, par value $.10 per share;
Authorized-12,000,000 shares;
Issued-5,847,241 and 5,844,681 shares 584,724 584,468
Paid-in additional capital 3,951,526 3,871,782
Retained earnings 76,165,428 71,520,740
---------------------------------
80,701,678 75,976,990
Less 1,331,436 and 1,217,661 shares of Common Stock held
in treasury-at cost 28,470,941 25,818,732
---------------------------------
Total stockholders' equity 52,230,737 50,158,258
---------------------------------
Total liabilities and stockholders' equity $88,605,160 $125,852,355
=================================
See accompanying notes
S-2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Plenum Publishing Corporation
and Subsidiary Companies
Consolidated Statements of Income
Year ended December 31
1993 1992 1991
--------------------------------------------
<S> <C> <C> <C>
Subscriptions, books, outside journals and
other sales, net $54,098,246 $53,725,999 $53,374,599
--------------------------------------------
Costs and expenses:
Cost of sales 21,684,878 21,393,355 21,114,213
Royalties (Note 13) 4,659,246 4,432,006 4,242,689
Selling, general and administrative expenses 11,425,943 11,583,992 11,599,322
--------------------------------------------
37,770,067 37,409,353 36,956,224
--------------------------------------------
Income from operations 16,328,179 16,316,646 16,418,375
Dividend income 2,136,989 1,636,462 1,546,865
Interest income 544,780 3,020,543 3,522,592
Gain on sales of marketable securities 801,387 2,476,916 19,714
(Provision for) reversal of net unrealized loss on
marketable securities (Note 11) (1,713,197) - 6,544,417
Equity in net income (loss) of Gradco Systems, Inc.
(Note 5) 4,565 (100,430) (91,300)
Interest expense (998,060) (2,945,187) (3,182,553)
Other investment-related expenses (239,936) (406,067) (254,056)
--------------------------------------------
Income before items shown below 16,864,707 19,998,883 24,524,054
Income taxes (Note 7) 5,936,000 7,850,000 7,289,000
--------------------------------------------
Income before extraordinary items and cumulative effect
on prior years of accounting change 10,928,707 12,148,883 17,235,054
Extraordinary items (Note 6):
Gain on repurchase of 6-1/2% Convertible
Subordinated Debentures due April 15, 2007,
less applicable income taxes of $2,400, $264,000
and $65,000 3,656 394,823 100,638
Loss from early retirement of 6-1/2%
Convertible Subordinated Debentures due April 15,
2007, net of income tax benefit of $674,900 (1,323,450) - -
--------------------------------------------
Extraordinary (loss) gain (1,319,794) 394,823 100,638
--------------------------------------------
Cumulative effect on prior years of accounting
change (Note 2) - 1,179,950 -
--------------------------------------------
Net income $9,608,913 $13,723,656 $17,335,692
============================================
Per share of Common Stock-primary (Note 10):
Income before extraordinary items and cumulative
effect on prior years of accounting change $2.37 $2.57 $3.43
Extraordinary (loss) gain (.29) .08 .02
Cumulative effect on prior years of
accounting change - .25 -
--------------------------------------------
Net income $2.08 $2.90 $3.45
============================================
Per share of Common Stock-fully diluted (Note 10):
Income before extraordinary items and cumulative
effect on prior years of accounting change $2.30 $2.28 $2.92
Extraordinary (loss) gain (.26) .06 .02
Cumulative effect on prior years of
accounting change - .19 -
--------------------------------------------
Net income $2.04 $2.53 $2.94
============================================
See accompanying notes.
S-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Plenum Publishing Corporation
and Subsidiary Companies
Consolidated Statements of Stockholders' Equity
Common Stock Issued
------------------- Paid In Treasury Stock Total
Par Additional Retained ---------------- Stockholders'
Shares Value Capital Earnings Shares Cost Equity
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance At December 31, 1990 5,844,681 $584,468 $3,871,782 $50,308,087 529,817 $11,198,712 $43,565,625
Net income for the year ended December
31, 1991 - - - 17,335,692 - - 17,335,692
Dividend declared, $1.00 a share - - - (5,001,362) - - (5,001,362)
Acquisition of Common Stock for treasury - - - - 349,002 7,355,372 (7,355,372)
------------------------------------------------------------------------------------
Balance at December 31, 1991 5,844,681 584,468 3,871,782 62,642,417 878,819 18,554,084 48,544,583
Net income for the year ended December
31, 1992 - - - 13,723,656 - - 13,723,656
Dividend declared, $1.04 a share - - - (4,845,333) - - (4,845,333)
Acquisition of Common Stock for treasury - - - - 338,842 7,264,648 (7,264,648)
------------------------------------------------------------------------------------
Balance at December 31, 1992 5,844,681 584,468 3,871,782 71,520,740 1,217,661 25,818,732 50,158,258
Net income for the year ended December
31, 1993 - - - 9,608,913 - - 9,608,913
Dividend declared, $1.08 a share - - - (4,964,225) - - (4,964,225)
Acquisition of Common Stock for treasury - - - - 113,775 2,652,209 (2,652,209)
Conversion of 6-1/2% Cumulative Subordinated
Debentures into shares of Common Stock 2,560 256 79,744 - - - 80,000
------------------------------------------------------------------------------------
Balance at December 31, 1993 5,847,241 $584,724 $3,951,526 $76,165,428 1,331,436 $28,470,941 $52,230,737
====================================================================================
See accompanying notes
<S-6>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Plenum Publishing Corporation
and Subsidiary Companies
Consolidated Statements of Cash Flows
Year ended December 31
1993 1992 1991
----------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 9,608,913 $13,723,656 $17,335,692
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation of plate costs 1,802,526 1,673,233 1,739,704
Depreciation and amortization of building, furniture,
fixtures, equipment and leasehold improvements 320,158 311,748 397,456
Amortization of deferred charges and excess of cost
of assets acquired over book amount thereof 2,461,451 2,021,932 1,660,267
Gain on sale of marketable securities (801,387) (2,476,916) (19,714)
Provision for (reversal of) net unrealized loss on
marketable securities 1,713,197 - (6,544,417)
Equity in net (income) loss of Gradco Systems, Inc. (4,565) 100,430 91,300
Extraordinary loss (gain), net of income taxes 1,319,794 (394,823) (100,638)
(Increase) decrease in deferred income tax benefits (1,141,279) (1,285,696) 752,542
Changes in operating assets and liabilities:
Decrease (increase) in:
Receivables (3,125,394) 70,435 898,492
Advance under the Distribution Agreement (750,000) - -
Inventories 306,510 188,153 (234,629)
Due from brokers - - 57,615
Prepaid income taxes - 642,542 150,709
Other assets (2,000,985) (1,824,571) (1,793,064)
Increase (decrease) in:
Accounts payable, accrued expenses and sundry
liabilities (165,240) 756,372 712,691
Income taxes payable 1,048,636 1,305,945 (428,325)
Deferred subscription income and costs
applicable thereto-net 113,726 1,529,857 1,591,801
--------------------------------------------
Net cash provided by operating activities 10,706,061 16,342,297 16,267,482
--------------------------------------------
Cash flows from investing activities:
Additions to plate costs (1,821,035) (1,757,235) (1,539,896)
Additions to furniture, fixtures, equipment and
leasehold improvements (200,654) (219,086) (131,591)
Purchase of U.S. Government securities - (11,896,181) (10,890,856)
Proceeds from sale and redemption of U.S.
Government securities 32,858,033 20,890,856 10,000,000
Purchases of marketable securities (23,389,658) (36,467,060) (7,393,633)
Proceeds from sale of marketable securities 24,326,944 30,908,928 9,798,528
Investment in Gradco Systems, Inc. - - (970,102)
--------------------------------------------
Net cash provided by (used in) investing activities 31,773,630 1,460,222 (1,127,550)
--------------------------------------------
Cash flows from financing activities:
Repurchase of 6-1/2% Convertible Subordinated
Debentures (41,755,663) (5,976,605) (1,100,012)
Acquisition of treasury stock (2,652,209) (7,264,648) (7,355,372)
Dividends paid (3,744,958) (6,078,177) (4,990,313)
--------------------------------------------
Net cash used in financing activities (48,152,830) (19,319,430) (13,445,697)
--------------------------------------------
Net (decrease) increase in cash and cash equivalents (5,673,139) (1,516,911) (1,694,235)
Cash and cash equivalents at beginning of year 10,703,199 12,220,110 10,525,875
--------------------------------------------
Cash and cash equivalents at end of year $ 5,030,060 $10,703,199 $12,220,110
============================================
See accompanying notes.
S-7
</TABLE>
<PAGE>
Plenum Publishing Corporation
and Subsidiary Companies
Notes to Consolidated Financial Statements
December 31, 1993
1. Summary of Significant Accounting Policies
- ---------------------------------------------
Basis of Presentation
- ---------------------
The accompanying financial statements include the accounts of the Plenum
Publishing Corporation (the "Company") and its domestic and foreign
subsidiaries, which are wholly-owned. The accounts of the foreign
subsidiaries are not material. Intercompany items and transactions are
eliminated in consolidation.
The Company accounts for its investment in Gradco Systems, Inc. under the
equity method (see Note 5).
The Company and its subsidiaries are engaged in the publishing and distri-
bution of advanced scientific and technical materials in the United States
and in foreign countries. Export sales aggregated approximately $23,217,000
(1993), $21,214,000 (1992) and $21,453,000 (1991).
Inventories
- -----------
Inventories are stated at the lower of cost (principally average cost or
specific invoice cost) or market (based on selling market).
Depreciation and Amortization
- -----------------------------
Depreciation is provided for by the straight-line method or by the declining-
balance method over estimated useful lives ranging from 3 to 35 years.
Amortization of leasehold improvements is provided for by the straight-line
method generally over the terms of the related leases or the estimated useful
lives of the improvements, whichever period is shorter.
The excess of cost of assets acquired over book amount thereof (which arose
in connection with various acquisitions by the Company in prior years, other
than Gradco Systems, Inc.) is being amortized by the straight-line method
principally over forty years.
Deferred expenses relating to issuance of long-term debt are being amortized
by the straight-line method over the term of the related debt (see Note 6).
The cost of the subscription lists of Human Sciences Press and Agathon
journals is being amortized by the straight-line method over estimated
useful lives ranging from 12 to 20 years.
Other assets include the cost of rights to produce and distribute certain
journals, which is being amortized by the straight-line method, primarily
over a period of fifteen years.
Deferred Subscription Income
- ----------------------------
The Company bills subscribers to certain publications and patent information
services in advance of issuance thereof. The publications are generally
issued over a one-year period and subscription revenues are taken into
income by the straight-line method based on the relationship of the number
of publications issued to the number ordered by subscribers. Patent
information service revenues are taken into income when published.
The portion of advance billings which will require use of financial resources
within one year is not practicable to determine and, accordingly, no portion
thereof is included in current liabilities; expenditures at balance sheet
dates in respect of such advance billings have similarly been excluded from
current assets.
Marketable Securities
- ---------------------
Marketable securities are valued at the lower of aggregate cost or market.
Gains and losses on marketable securities are determined based on specific
identification. See Note 2.
Cash Equivalents and Supplemental Cash Flow Information
- -------------------------------------------------------
The Company considers all highly liquid financial instruments with a
maturity of three months or less when purchased to be cash equivalents.
As of December 31, 1993, the Company had time deposits and money market
accounts totalling approximately $1,442,000 on deposit with five financial
institutions. As of December 31, 1992, the Company had time deposits and
money market accounts of approximately $10,057,000 on deposit with four
financial institutions.
The Company paid income taxes in 1993, 1992 and 1991 of approximately
$6,029,000, $5,962,000 and $6,915,000 (net of income tax refunds received
of approximately $1,218,000 in 1991), respectively. In addition, the
Company paid interest in 1993, 1992 and 1991 of approximately $1,565,000,
$3,023,000 and $3,200,000, respectively.
2. Accounting Change
- --------------------
In February 1992, the Financial Accounting Standards Board issued Statement
No. 109, "Accounting for Income Taxes" (the "Statement"). The Company adopted
the provisions of the new standard in its financial statements for the year
ended December 31, 1992. As permitted by the Statement, prior year financial
statements have not been restated to reflect the change in accounting method.
The cumulative effect as of January 1, 1992 of adopting the Statement
increased net income by $1,179,950 or $.25 per share ($.19 per share on
a fully diluted basis).
Under the Statement, the liability method is used in accounting for income
taxes. Under this method, deferred tax assets and liabilities are determined
based on differences between financial reporting and tax bases of assets
and liabilities and are measured using the enacted tax rates and laws that
will be in effect when the differences are expected to reverse. Prior to
the adoption of the Statement, income tax expense was determined using the
liability method prescribed by Financial Accounting Standards Board Statement
No. 96 ("Statement 96"), which is superseded by the Statement. Among other
matters, the Statement changes the recognition and measurement criteria for
deferred tax assets included in Statement 96. In accordance with the
Statement, all of the income tax benefits on the excess of book over tax
deductions (for example, depreciation, allowance for doubtful accounts,
etc.) are deferred (see Note 7). The cumulative effect on prior years of
the change has been shown in the income statement for 1992.
In May 1993, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," effective for fiscal years
beginning after December 15, 1993. Under the new rules, which the Company
will adopt effective January 1, 1994, the Company will classify its
marketable equity securities held as trading securities on the basis of
its intent to trade such securities.
Accordingly, all marketable equity securities classified as trading
securities will be carried at fair market value. Unrealized gains and
losses applicable to these securities will be reported as a component
of current earnings.
Presently, the Company values marketable equity securities as trading
securities and reports such securities at the lower of aggregate cost
or market, with unrealized losses reported as a component of current
earnings.
3. U.S. Government Securities
- -----------------------------
The cost and market value of U.S. Government securities at December 31,
1992 are as follows:
Cost $31,896,181
===========
Market Value $33,255,846
===========
4. Inventories
- --------------
Inventories at December 31 are comprised of:
1993 1992
--------------------------------
Finished publications $3,612,257 $3,841,520
Work in process 566,928 644,175
--------------------------------
$4,179,185 $4,485,695
================================
5. Investment in Gradco Systems, Inc.
- -------------------------------------
As of December 31, 1993 and 1992, the Company owned 913,000 common shares
of Gradco Systems, Inc. ("Gradco"), a company engaged in the development
and marketing of photocopier machine technology, representing approximately
11.7% of its outstanding common stock. Gradco stock is publicly traded on
the NASDAQ National Market System. The aggregate market value of this
investment as of December 31, 1993 and 1992 amounted to approximately
$2,739,000 and $1,480,000, respectively.
Selected financial data of Gradco as of and for the 12 months ended December
31, 1993, 1992 and 1991 is as follows and has been extracted from unaudited
financial information as filed by Gradco with the Securities and Exchange
Commission (in thousands):
1993 1992 1991
----------------------------------
Balance sheet data
Total assets $38,863 $44,019 $40,962
Working capital 9,147 7,198 6,721
Noncurrent liabilities, including
minority interest and excluding
current installments 15,669 12,387 12,275
Shareholders' equity 9,767 10,914 11,825
Statement of operations data
Net revenues 55,773 55,635 58,719
Net income (loss) 43 (863) (753)
The President and Chairman of the Board of the Company, Mr. Martin E. Tash,
is also the President and Chairman of the Board of Gradco.
6. Long-Term Debt
- -----------------
Long-term debt at December 31, 1992 consisted of 6-1/2% Convertible
Subordinated Debentures (the "Debentures") due April 15, 2007. The
Debentures were issued in April and May 1987.
In 1993, 1992 and 1991, the Company purchased Debentures in the principal
amount of $1,149,000, $6,808,000 and $1,300,000, respectively, for an
aggregate cost (including the write-off of related deferred issuance costs
of approximately $28,000, $173,000 and $34,000, respectively) of
approximately $1,143,000, $6,149,000 and $1,134,000, respectively.
On April 30, 1993 (the "Redemption Date"), pursuant to a notice of election
to redeem which had been given to the holders on March 24, 1993, the Company
redeemed the Debentures which were outstanding on the Redemption Date. In
accordance with the terms of the Debentures and the applicable Trust
Indenture, the redemption price was equal to 102.60% of the principal amount
of outstanding Debentures, and the holders were also paid accrued interest
for the period from April 15, 1993 (the date on which the last semiannual
installment of interest was paid) to the Redemption Date. Prior to the
Redemption Date, Debentures in the aggregate principal amount of $80,000
were converted into 2,560 shares of Common Stock at the applicable conversion
rate of $31.25 per $1,000 of principal amount. On the Redemption Date,
Debentures in the aggregate principal amount of $39,598,000 were outstanding,
requiring a total payment to the holders of approximately $40,735,000
(including accrued interest). This amount was funded by liquidating a
portion of the Company's investments of its excess cash, and from short-term
borrowing on the Company's margin account with a broker.
The premium paid for the Debentures, and the write-off of related deferred
issuance costs of approximately $956,000, net of applicable income tax
benefit of $675,000 totalled approximately $1,310,000, which has been
accounted for as an extraordinary loss.
7. Income Taxes
- ---------------
Effective January 1, 1992, the Company changed its method of accounting for
income taxes to the liability method required by FASB Statement No. 109,
"Accounting for Income Taxes" (see Note 2-"Accounting Change").
Income taxes for the years ended December 31 consist of the following:
1993
--------------------------------------
Current Deferred Total
--------------------------------------
Federal $5,424,809 $ (874,809) $4,550,000
State and local 1,652,470 (266,470) 1,386,000
--------------------------------------
$7,077,279 $(1,141,279) $5,936,000
======================================
1992
--------------------------------------
Current Deferred Total
--------------------------------------
Federal $5,084,206 $ (84,206) $5,000,000
State and local 2,871,540 (21,540) 2,850,000
--------------------------------------
$7,955,746 $ (105,746) $7,850,000
======================================
1991
--------------------------------------
Current Deferred Total
--------------------------------------
Federal $5,117,300 $ 642,700 $5,760,000
State and local 1,419,158 109,842 1,529,000
--------------------------------------
$6,536,458 $ 752,542 $7,289,000
======================================
Deferred income taxes result from the recognition of the income tax effect
of timing differences in reporting transactions for financial and tax
purposes. A description of the differences and the related tax effect
follow:
1993 1992 1991
---------------------------------------------
Valuation of inventories $ (337,711) $ (95,457) $154,305
Depreciation ( 77,000) (102,600) 4,600
Allowance for doubtful accounts, etc. ( 26,768) 92,311 -
Adjustments applicable to net
unrealized losses (699,800) - 593,637
---------------------------------------------
$(1,141,279) $(105,746) $752,542
=============================================
Significant components of the Company's deferred tax assets as of December 31
are as follows:
1993 1992
----------- -----------
Valuation of inventories $ 2,117,711 $ 1,780,000
Depreciation 1,047,721 970,721
Allowance for doubtful accounts, etc. 135,768 109,000
Allowance for net unrealized losses 699,800 -
Equity in losses of Gradco 1,998,400 2,000,000
----------- -----------
Total deferred tax assets 5,999,400 4,859,721
Valuation allowance (1,998,400) (2,000,000)
----------- -----------
Net deferred tax assets $ 4,001,000 $ 2,859,721
=========== ===========
The Company has recorded a valuation allowance for the entire value of the
deferred tax asset attributable to the equity in losses of Gradco, since
management believes the realization of such asset is not reasonably assured.
<TABLE>
A reconciliation of the computed "expected" tax expense at the Federal statutory rate and the
actual tax expense for the years shown below is as follows:
<CAPTION>
1993 1992 1991
------------------------------------------------------------------------------
% of % of % of
Income Income Income
Before Before Before
Income Income Income
Amount Taxes Amount Taxes Amount Taxes
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Computed "expected" tax expense $5,902,600 35.0% $6,799,600 34.0% $8,338,000 34.0%
Increases (reductions) in tax resulting from:
State and city income taxes, net of Federal
income tax benefit 900,900 5.3 1,881,000 9.4 1,009,000 4.1
Nontaxable portion of dividend income (523,600) (3.1) (389,500) (1.9) (368,000) (1.5)
Foreign Sales Corporation income taxed
at a lower rate (363,000) (2.2) (330,600) (1.7) (330,600) (1.3)
Deferred tax benefits not recognized - - - - 338,100 1.4
Equity in net (income) loss of Gradco Systems,
Inc. not recognized as deferred tax benefits (1,600) - 34,100 .1 31,000 .1
Nontaxable portion of the reversal of unrealized
losses on marketable securities - - - - (1,752,400) (7.1)
Miscellaneous-net 20,700 .2 (144,600) (.7) 23,900 -
-----------------------------------------------------------------------------
Actual tax expense $5,936,000 35.2% $7,850,000 39.2% $7,289,000 29.7%
=============================================================================
</TABLE>
8. Leases
- ---------
The Company leases certain real properties. Certain leases provide for the
payment of real estate taxes and escalation of rentals based on increases
in real estate taxes.
Rental expense for the years ended December 31 is as follows:
1993 $758,226
1992 804,728
1991 823,848
Approximate future minimum rentals under all noncancelable operating leases
for real property at December 31, 1993 are as follows:
1994 $ 506,000
1995 512,000
1996 459,000
1997 301,000
1998 289,000
Subsequent to 1998 2,648,000
---------------
$4,715,000
===============
9. Profit Sharing and Incentive Compensation Plans
- --------------------------------------------------
The Company has a profit sharing plan for its employees which provides for
annual contributions based upon the Company's net income as a percentage of
gross revenue and the employees' salary level and length of service. Such
contributions, which are placed in a trust fund, are invested at the
employees' discretion. Contributions under the plan aggregated approximately
$1,121,000 (1993), $1,126,000 (1992) and $1,006,000 (1991). Other accrued
expenses and sundry liabilities include accrued contributions under the plan
of $1,121,000 (1993) and $1,126,000 (1992).
The Company has an incentive compensation plan for executive officers and key
employees of the Company providing for 5% of the Company's income from
operations to be distributed (as provided) to participants of the plan. In
addition to the amounts payable as set forth above, since cumulative
investment income (as defined) earned after 1990 through December 31, 1992
exceeded investment loss (as defined) incurred in 1990, the excess was added
to income from operations for the purpose of calculating incentive compen-
sation for 1992. Since there was investment income (as defined) in 1993, the
amount of such income was added to income from operations for the purpose of
calculating incentive compensation for 1993. Distributions under the plan
aggregated $844,000 (1993), $959,000 (1992) and $821,000 (1991). Other
accrued expenses and sundry liabilities include accrued incentive
compensation of $339,000 (1993) and $464,200 (1992).
The Company has the right to change, modify or terminate the above plans at
any time.
10. Per Share Amounts
- ---------------------
Primary net income per share of Common Stock is computed on the basis of
weighted average number of common shares outstanding (4,607,458 (1993),
4,727,714 (1992) and 5,030,844 (1991)).
Amounts per share of Common Stock assuming full dilution are computed on the
basis of the weighted average number of shares set forth in the preceding
paragraph adjusted for shares issuable upon conversion of the Convertible
Subordinated Debentures, after elimination from net income of related debt
expense thereon, less applicable income taxes. The number of shares used in
this computation is 5,003,791 (1993), 6,166,436 (1992) and 6,592,579 (1991).
Fully diluted net income per share is not presented for the periods where
the result of the computation is antidilutive.
11. Marketable Securities
- -------------------------
December 31
1993 1992
------------------------------
Aggregate market value $ 48,825,213 $54,502,745
Cost 50,538,410 51,636,161
------------------------------
Net unrealized (loss) gain $ (1,713,197) $ 2,866,584
==============================
The net unrealized gain at December 31, 1992 has not been recognized in
the accompanying consolidated financial statements; such amount consisted
of unrealized gains of $5,885,284 and unrealized losses of $3,018,700.
The net unrealized loss at December 31, 1993 has been provided for in the
accompanying consolidated financial statements; such amount consisted of
unrealized gains of $796,126 and unrealized losses of $2,509,323.
The Company's portfolio of marketable securities is substantially invested
in a limited number of issuers, operating principally in the pharmaceutical
industry at December 31, 1993 and in the pharmaceutical and electric utility
industries at December 31, 1992. At December 31, 1993, the cost and market
value of the Company's largest holding (invested in a company operating in
the pharmaceutical industry) were $21,000,000 and $21,749,000, respectively
($18,422,000 and $23,154,000, respectively, at December 31, 1992).
Subsequent to December 31, 1993 and through March 14, 1994, the Company
realized net losses aggregating approximately $904,000 on sales of marketable
securities. At March 14, 1994, the market value of marketable securities
aggregated approximately $39,844,000 (cost $41,635,000).
12. Quarterly Financial Information (Unaudited)
- -----------------------------------------------
<TABLE>
<CAPTION>
Net Income
Per Share of
Income (Loss) Common Stock
Subscriptions From Securities, --------------------
and Cost Net of Certain Net Fully
Quarter Other Sales of sales Expenses (1) Income(2)(3) Primary(2) Diluted
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1993
First $12,618,897 $ 5,317,041 $(2,019,370) $ 1,015,085 $ .22 $ -
Second 13,995,497 5,458,523 1,420,980 2,336,514 .50 -
Third 13,608,535 5,667,423 (1,223,442) 2,019,493 .44 -
Fourth 13,875,317 5,241,891 2,358,360 4,237,821 .93 -
1992
First $12,997,605 $ 5,428,562 $ 668,042 $ 2,575,701 $ .53 $ .48
Second 13,972,954 5,587,667 157,987 3,014,019 .65 .57
Third 12,681,923 5,105,180 301,996 2,371,013 .51 .47
Fourth 14,073,517 5,271,946 2,554,212 5,762,923 1.24 1.04
<FN>
(1) Included in expenses are interest on 6-1/2% Convertible Subordinated
Debentures, gains and losses in connection with the Company's investment
in Gradco and other investment-related expenses.
(2) Included in net income for the first and second quarters of 1993 and the
second, third and fourth quarters of 1992 are extraordinary gain (loss)
of $3,656, $(1,323,450) ($(.29) per share) $266,657 ($.06 per share),
$46,636 ($.01 per share) and $81,530 ($.02 per share), respectively.
(3) Included in net income for the fourth quarter of 1992 is $1,179,950 ($.25
per share) representing the cumulative effect on prior years of
accounting change (see Note 2).
</TABLE>
13. Distribution Agreement
- --------------------------
In December 1993, the Company entered into a Journal Production and
Distribution Agreement (the "Distribution Agreement") with the Russian
Academy of Sciences (the "Academy") and other interested parties pursuant
to which the litigation then pending, relating to the translation of Russian
scientific journals, was ended, and the Company's role as publisher and
distributor of certain of such journals was altered. The Distribution
Agreement extends from 1994 through 2006.
Pursuant to the Distribution Agreement, in 1994 the Company will distribute
for MAIK Nauka ("MN"), an entity owned in part by Pleiades Publishing, Inc.
and the Academy, 21 Russian scientific journals in English. MN will become
the exclusive publisher of such journals. Prior thereto, the Company had
translated, published and distributed these journals under a contract with
the Copyright Agency of the former Soviet government, and under contracts
with the individual institutes publishing the journals, and had paid
royalties based in part upon the number of subscribers. Under the
Distribution Agreement, the Company will continue to promote and distribute
these journals throughout the world, and will continue to deal with and
collect from subscribers to the journals, retaining a portion of such
revenues for performing these functions. In 1994, the Company will retain
35% of the revenue, with the amount gradually being reduced to 30% in 1999
and remaining at that level for the balance of the term of the Distribution
Agreement. Pursuant to the Distribution Agreement, the Company advanced the
Academy $1,000,000 during 1993, of which, $750,000 was outstanding at
December 31, 1993.
Under the Distribution Agreement, in 1995 and 1996 MN will undertake the
publication of the English translations of 11 additional Russian journals,
to be promoted and distributed by the Company. Commencing in such years, MN
may elect to publish the English translations of up to 23 additional Russian
journals, to be promoted and distributed by the Company. As to each
additional journal which is published by MN and distributed by the Company
under the Distribution Agreement, the Company will retain 35% of the revenue
in the initial year of distribution, with the amount gradually being reduced
to 30% over a six-year period.
MN intends to cause the above-mentioned journals to be translated and
published in the former Soviet Union. The Company will continue its
activities in translating, publishing and distributing both the journals
subject to the Distribution Agreement until they are published by MN and the
approximately 40 English Translation Russian Journals not subject to the
Agreement. These activities will be undertaken pursuant to the Company's
existing English translation and publication contracts with the individual
entities publishing the Russian language journals which generally extend
through 2001.
14. Contingencies
- -----------------
The Company has contingent compensation agreements with certain key personnel.
Each agreement provides for the cash payment of an amount equal to 290% of
average annual compensation (as defined), in the event of termination of
employment, under certain conditions which include, among other matters, (a)
the sale of 75% of the book value of the Company's operating assets (as
defined) or (b) any person (as defined) becoming the owner of more than 25%
of the issued and outstanding shares of the Company's voting stock.
In 1991, the Company was named as a co-defendant in an action brought by
former executives of Gradco, seeking compensatory and other damages of a
material amount. Management of the Company, after consultation with counsel,
believes the action will not result in a material loss to the Company and
intends to vigorously defend against it.
<PAGE>
<TABLE>
<CAPTION>
Plenum Publishing Corporation and Subsidiary Companies
Schedule I--Marketable Securities-Other Investments
December 31, 1993
Column A Column B Column C Column D Column E
- ------------------------------------------------------------------------------------------------------------------------------
Amounts at Which
Each Portfolio of
Number of Market Value Equity Security Issues
Shares or of Each Issue and Each Other
Principal Amount Cost of at Balance Security Issue Carried
Name of Issuer and Title of Each Issue of Bonds Each Issue Sheet Date in the Balance Sheet
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stocks:
Apple Computer, Inc.-Short Sale 20,000 $ (631,496) $ (585,000) $ (585,000)
Banner Aerospace, Inc. 390,000 3,089,555 1,755,000 1,755,000
Bristol Myers Squibb Company 238,500 14,495,139 13,892,625 13,892,625
Glaxo Holdings PLC-ADR 353,600 7,573,750 7,381,400 7,381,400
Merck & Co., Inc. 120,000 4,450,564 4.125,000 4,125,000
Northeast Utilities 10,600 280,586 251,750 251,750
SmithKline Beecham PLC-ADR 794,500 20,999,808 21,749,438 21,749,438
Union Bank San Francisco, California 10,000 280,504 255,000 255,000
------------------------------------------------------------
$50,538,410 $48,825,213 $48,825,213
============================================================
</TABLE>
S-22
<PAGE>
<TABLE>
<CAPTION>
Plenum Publishing Corporation
and Subsidiary Companies
Schedule VIII--Valuation and Qualifying Accounts
Column A Column B Column C Column D Column E
- ---------------------------------------------------------------------------------------------------
Additions
Balance Charged
at Beginning to Costs and Balance at
Description of Period Expenses Deductions End of Period
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Year ended December 31, 1993
Allowances deducted from assets to
which they apply:
Allowance for doubtful accounts $ 187,000 $ 6,611 $ 14,611(a) $ 179,000
Allowance for sales returns $ 680,000 $2,908,367 $2,919,367(b) $ 669,000
Allowance for decline in market
value of marketable securities $ - $1,713,197 $ - $ 1,713,197
Year ended December 31, 1992
Allowances deducted from assets to
which they apply:
Allowance for doubtful accounts $ 207,000 $ 70,999 $ 90,999(a) $ 187,000
Allowance for sales returns $ 692,000 $2,722,777 $2,734,777(b) $ 680,000
Year ended December 31, 1991
Allowances deducted from assets to
which they apply:
Allowance for doubtful accounts $ 183,000 $ 83,106 $ 59,106(a) $ 207,000
Allowance for sales returns $ 567,000 $2,881,451 $2,756,451(b) $ 692,000
Allowance for decline in market
value of marketable securities $6,544,417 $ - $6,544,417(c) $ -
<FN>
Notes:
(a) Uncollectible receivables written off.
(b) Returns made by customers.
(c) Reversal of allowance no longer required.
</TABLE>
S-23
<PAGE>
<TABLE>
<CAPTION>
Plenum Publishing Corporation and Subsidiary Companies
Schedule IX--Short-Term Borrowings
Column A Column B Column C Column D Column E Column F
- ------------------------------------------------------------------------------------------------------------------
Maximum Average Weighted
Amount Amount Average
Weighted Outstanding Outstanding Interest Rate
Category of Aggregate Balance at Average During During During the
Short-Term Borrowings End of Period Interest Rate The Period the Period (2) Period (3)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Year ended December 31, 1993
Due to brokers (1) $ - $7,552,077 $2,636,821 5.41%
Year ended December 31, 1992
Due to brokers (1) $ - $ - $ - -
Year ended December 31, 1991
Due to brokers (1) $ - $ - $ - -
<FN>
(1) The amounts due to brokers represent margin account borrowings which fluctuate from time to time.
(2) The average amount outstanding during the period was computed by dividing the total of daily outstanding
principal balances by the number of days during the period.
(3) The weighted average interest rate during the period was computed by dividing the actual interest expense
by average short-term debt outstanding.
</TABLE>
S-24
<PAGE>
Plenum Publishing Corporation
and Subsidiary Companies
Schedule X-Supplementary Income Statement Information
Column A Column B
- -----------------------------------------------------------------------
Charged to Costs
Item and Expenses
- -----------------------------------------------------------------------
Year ended December 31, 1993
Advertising Costs $2,069,627
Year ended December 31, 1992
Advertising Costs $2,081,552
Year ended December 31, 1991
Advertising Costs $2,071,546
Note: Items not shown above are omitted because the amounts charged to
costs and expenses for such items are less than one percent of total
revenues, except for royalties which are shown in the consolidated
statements of income.
S-25
<PAGE>
<TABLE>
<CAPTION>
Exhibit 11
Plenum Publishing Corporation and Subsidiary Companies
Computation of Per Share Amounts of Common Stock-
Assuming Full Dilution
Year ended December 31
1993 1992 1991
---------------------------------------------
<S> <C> <C> <C> <C>
Net income:
Income before extraordinary (loss) gain and cumulative effect
on prior years of accounting change (1) $10,928,707 $12,148,883 $17,235,054
Debt expense, less applicable income tax benefit, attributable
to conversion of 6-1/2% Convertible Subordinated Debentures (2) 567,769 1,879,286 2,037,273
Adjusted income before extraordinary (loss) gain and cumulative ---------------------------------------------
effect on prior years of accounting change (1)+(2)=(3) 11,496,476 14,028,169 19,272,327
Extraordinary (loss) gain (5) (1,319,794) 394,823 100,638
Cumulative effect on prior years of accounting change (4) - 1,179,950 -
Net income - adjusted for computation of per share amounts of ---------------------------------------------
common stock - fully diluted (3)+(4)+(5)=(6) $10,176,682 $15,602,942 $19,372,965
=============================================
Shares of Common Stock:
Weighted average number of shares outstanding during the year (7) 4,607,458 4,727,714 5,030,844
Shares issuable upon conversion of 6-1/2% Convertible
Subordinated Debentures due April 15, 2007 (8) 396,333 1,438,722 1,561,735
---------------------------------------------
Adjusted number of shares outstanding for the purpose of fully
diluted computation (7)+(8)=(9) 5,003,791 6,166,436 6,592,579
=============================================
Per share amounts of Common Stock - fully diluted:
Income before extraordinary (loss) gain and cumulative effect on
prior years of accounting change (3)/(9) $2.30 $2.28 $2.92
Extraordinary (loss) gain (5)/(9) (.26) .06 .02
Cumulative effect on prior years of accounting change (4)/(9) - .19 -
---------------------------------------------
Net income (6)/(9) $2.04 $2.53 $2.94
=============================================
</TABLE>
