|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: NEWS COMMUNICATIONS INC, 10QSB/A, 1996-04-23 |
Next: NEWS COMMUNICATIONS INC, 10QSB/A, 1996-04-23 |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended - February 28, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission File Number 0-18299 NEWS
COMMUNICATIONS, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 13-3346991
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
174-15 Horace Harding Expwy., Fresh Meadows, New York 11365
(Address of principal executive offices)
(718) 357-3380
(Issuer's telephone number)
(Former name, former address and former fiscal
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
12, 13 or 15 (d) of the Exchange Act during the past 12 months (or 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 No X
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity , as of April 15, 1995: 7,773,376 shares $ .01 par value common stock
1
<PAGE>
FORM 10-QSB
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
PAGE
PART I. Financial Information
Item 1. Financial Statements
Unaudited Consolidated Balance Sheet
at February 28, 1995.............................. 3
Unaudited Consolidated Statements of
Operations for the three months ended
February 28, 1995 and February 28, 1994........... 5
Unaudited Consolidated Statements of Cash
Flows for the three months ended
February 28, 1995 and February 28, 1994........... 6
Notes to Consolidated Financial Statements........ 9
Item 2. Management's Discussion and Analysis
or Plan of Operation.............................. 10
PART II. Other Information................................. 15
Item 6. Exhibits and Reports on Form 8-K
Signatures..................................................... 16
2
<PAGE>
PART I-ITEM 1
<TABLE>
<CAPTION>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF FEBRUARY 28, 1995
(UNAUDITED)
<S> <C>
Assets:
Current Assets:
Cash and Cash Equivalents $ 844,198
Marketable Securities 52,027
Accounts Receivable [Less: Allowance for
Doubtful Accounts of $964,620] 3,779,524
Due From Related Parties 92,596
Other Current Assets 169,706
---------------
Total Current Assets 4,938,051
Property and Equipment at Cost- Net of
Accumulated Depreciation of $550,931 688,954
Goodwill - Net 3,838,668
Other Assets 173,818
-------------
Total Assets $ 9,639,491
=============
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF FEBRUARY 28, 1995
(UNAUDITED)
<S> <C>
Liabilities and Stochholders' Equity:
Current Liabilities:
Accounts Payable $ 857,816
Accrued Expenses 244,221
Accrued Payroll Taxes 131,281
Other Current Liabilities 121,888
Total Current Liabilities 1,355,206
Stockholders' Equity:
Preferred Stock, $1.00 Par Value; 500,000 Shares Authorized:
10% Convertible Preferred Stock, 1,250 Shares Authorized;
32 Issued and Outstanding, $500 Per Share Per Annum
Cumulative Dividends, $160,000 Liquidation Value $ 32
8% Convertible Preferred Stock, 500 Shares Authorized,
217 Issued and Outstanding, $80 Per Share Per Annum
Cumulative Dividends, $217,000 Liquidation Value 217
12% Convertible Preferred Stock, 200 Shares Authorized,
200 Issued and Outstanding, $120 Per Share Per Annum
Cumulative Dividends, $200,000 Liquidation Value 200
Common Stock, $.01 Par Value; Authorized 100,000,000
Shares; 7,920,576 Shares Issued 79,206
Paid-in-Capital Preferred Stock 519,873
Paid-in-Capital Common Stock 13,657,406
(Deficit) (5,563,920)
Total $8,693,014
Less: Treasury Stock [151,000 Shares]-
At Cost (408,729)
Total Stockholders' Equity 8,284,285
Total Liabilities and Stockholders' Equity $ 9,639,491
===============
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended February 28,
1995 1994
---- ----
Unaudited
<S> <C> <C>
Net Revenues $3,384,111 $2,136,297
---------- ----------
Expenses:
Direct Mechanical Costs 1,220,708 674,936
Salaries, Benefits and
Outside Labor Costs 2,063,502 1,225,769
Rent, Occupancy & Utilities 190,708 104,235
Provisions for Doubtful Accounts 36,000 31,000
General and Administrative 523,815 380,894
----------- ------------
Total Expenses 4,034,733 2,416,834
----------- -----------
Operating Income (Loss) Before Interest
Expense and Interest Income (650,622) (280,537)
Interest Expense (6,475) (6,875)
Interest Income 8,037 13,526
---------- ------------
Net Income (Loss) $ (649,060) $ (273,886)
=========== ============
Net Income (Loss) Per Share $(.08) $(.04)
============= ===============
Weighted Average Shares
Outstanding 7,768,776 7,353,942
========= ============
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended February 28,
1995 1994
---- ----
Unaudited
<S> <C> <C>
Operating Activities:
Net (Loss) $ (649,060) $ (273,886)
----------- ------------
Adjustments to Reconcile Net
(Loss) to Net Cash Provided
by Operating Activities:
Depreciation and Amortization 126,372 70,765
Provision for Losses on Accounts
Receivable 36,000 31,000
Change in Assets and Liabilities:
(Increase) Decrease in Accounts
Receivable (52,388) (63,475)
(Increase) Decrease in Other Current
Assets (7,503) (123,054)
(Increase) in Due from Related Parties (12,475) ----
Decrease (Increase) in Other Assets 12,849 (5,995)
(Increase) Decrease in Goodwill (5,225) (19,732)
Increase (Decrease) in Accounts Payable
and Accrued Expenses (308,044) (29,649)
Increase (Decrease) in Payroll Taxes Payable 414 (11,768)
Increase (Decrease) in Other Current Liabilities 115,448 (55,261)
--------- ---------
Total Adjustments (94,552) (207,169)
------------ -------------
Net (Deficit) - Operating Activities - (743,612) (481,055)
Forward
6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended February 28,
1995 1994
---- ----
<S> <C> <C>
Unaudited
Net (Deficit) - Operating Activities -
Forwarded (743,612) (481,055)
========= =========
Investing Activities:
Purchase of the Nassau Newspapers ---- (313,000)
Sale of Marketable Securities 872,607 ----
Capital Expenditures (50,783) (7,039)
----------- -----------
Net Cash Provided (Used) by Investing Activities 821,824 (320,039)
--------- -------------
Financing Activities:
Principal Payments Long-Term Debt (75,747) (220,250)
Proceeds from Exercise of Warrants 9,216 2,026,435
Dividend on Preferred Stock (10,340) (10,340)
Proceeds from Exercise of Stock Options ---- 1,000
---------- -----------
Net Cash (Used) Provided by Financing Activities (76,871) 1,796,845
------------- ------------
Net Increase (Decrease) in Cash 1,341 995,751
Cash - Beginning of Periods 842,857 2,832,858
------------ -----------
Cash - End of Periods $ 844,198 $ 3,828,609
============= ===========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ 9,547 $ 44,927
Income Taxes ---- ----
</TABLE>
7
<PAGE>
Supplemental Schedule of Non-Cash Investing and Financing Activities:
On December 9, 1993 the Company acquired certain assets of Long Island News
Group and MB Publishing Co., publishers of eight paid weekly newspapers in
Nassau County, New York (the "Nassau Newspapers"). The net purchase price
consisted of cash and stock valued at approximately $655,000. The cash portion
($313,000) was paid at the time of acquisition with the stock to be issued in
annual installments beginning in December 1996.
8
<PAGE>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Basis of Presentation:
The Consolidated Balance Sheet as of February 28, 1995 and the Cosolidated
Statements of Operations for the three-month periods ended February 28, 1995 and
February 28, 1994, and the Consolidated Statements of Cash Flows have been
prepared by the company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flow have
been made. The results for the interim periods are not necessarily indicative of
the results for a full year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been consolidated or omitted. These consolidated financial statements
should be read in conjunction with the company's annual report Form 10-KSB for
the fiscal year ended November 30, 1994 and the related audited financial
statements included therein.
B. Loss per Share:
Loss per share is based on the weighted average number of shares outstanding
during the periods.
C. The results of operations for 1994 have been restated to reflect
additional expenses and loss.
9
<PAGE>
PART I-ITEM 2
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
News Communications, Inc. publishes various weekly community newspapers and
related targeted audience publications.
The Company publishes the Dan's Papers, and (the Montauk Pioneer), Our Town,
the Manhattan Spirit, the Chelsea Clinton News, and the Westsider (Westside
Publications), the Queens Tribune, the Bronx Press Revie , (and the Riverdale
Review and Westchester Lifestyles), the Nassau Newspapers, (including Lynbrook
USA, Malverne Times, Rockville Centre News & Owl, Valley Stream MAILeader,
Independent Voice of Long Beach, Oceanside & Island Park, Rockville
Centre-Oceanside Beacon, Baldwin Citizen, East Rockaway Observer, six editions
of the Long Island Market and Long Island Lifestyles) and the Brooklyn Skyline -
all weekly regional newspapers. The Company also publishes a monthly glossy
magazine, Manhattan File, and The Hill, a weekly newspaper devoted to coverage
of the United States Congress. The following table sets forth, for the periods
indicated, certain information relating to each of the Company's publications
and to certain expenses incurred by the parent company, News Communications,
Inc. The numbers set forth below reflect the operations of the following
acquired or start-up publications from the dates indicated: Bronx Press Review -
December 1992; Nassau Newspapers - December 1993; Brooklyn Skyline August 1994;
Manhattan File - August 1994; The Hill - September 1994; Westside Publications -
September 1994. The information for the three months ended February 28, 1995 and
February 28, 1994 is unaudited.
10
<PAGE>
<TABLE>
Three Months Ended February 28,
-------------------------------
1995 1994 (3)
---- --------
Unaudited
<S> <C> <C>
Net Revenues:
Existing Publications:
Queens Tribune $ 668,868 $ 614,148
Dan's Papers 234,067 186,367
Manhattan Spirit 369,436 345,368
Our Town 386,515 372,545
The Bronx Press Review 226,167 203,209
Nassau Newspapers 599,572 414,660
---------- ------------
Total Net Revenues - Existing Publications 2,484,625 2,136,297
--------- -----------
Acquisitions and Start-ups:
The Hill 177,482 ----
Manhattan File 316,721 ----
Brooklyn Skyline 203,469 ----
Westside Publications 201,814 ----
------------ -------------
Total Net Revenues Acquisitions and Start-ups 899,486 ----
------------ -------------
Total Net Revenues $ 3,384,111 $ 2,136,297
=========== ===========
Income (Loss) Publications Before Goodwill:
Existing Publications:
Queens Tribune $ 148,739 $ 78,866
Dan's Papers (67,991) (78,836)
Manhattan Spirit 14,024 2,203
Our Town 64,155 59,139
The Bronx Press Review (7,368) 1,676
Nassau Newspapers 3,371 (50,872)
-------------- -------------
Income - Existing Publications 154,930 12,176
------------- ------------
Acquisitions and Start-ups:
The Hill (262,210) ----
Manhattan File (146,158) ----
Brooklyn Skyline (38,954) ----
Westside Publications 5,724 ----
-------------- -------------
Income (Loss) Acquisitions and Start-ups (441,598) ----
------------- -------------
Income (Loss) - Publications $ (286,668) $ 12,176
============= ============
11
<PAGE>
Income (Loss) Publications After Goodwill (1):
Existing Publications:
Queens Tribune $122,022 $ 52,149
Dan's Papers (80,666) (91,511)
Manhattan Spirit 14,024 2,203
Our Town 50,694 45,678
The Bronx Press Review (10,930) (824)
Nassau Newspapers (4,378) (58,372)
-------------- --------------
Income - Existing Publications 90,766 (50,677)
-------------- ---------------
Acquisitions and Start-ups:
The Hill (262,210) ----
Manhattan File (146,158) ----
Brooklyn Skyline (40,348) ----
Westside Publications 2,463 ----
-------------- --------------
Income (Loss) Acquisitions and Start-ups (446,253) ----
------------- --------------
Income (Loss)-Publications $ (355,487) $ (50,677)
============= ==============
Parent Company Expenses:
Personnel, Rent, General and Administrative 295,135 229,860
Interest (2) (1,562) (6,651)
-------------- ---------------
Total Parent Company Expenses 293,573 223,209
------------ -------------
Net Income (Loss) $ (649,060) $ (273,886)
============= =============
<FN>
(1) Reflects expense for amortization of goodwill by publication as follows:
Three Months Ended February 28,
1995 1994
Queens Tribune $ 26,717 $ 26,717
Dan's Papers 12,675 12,675
Our Town 13,461 13,461
The Bronx Press Review 3,562 2,500
Nassau Newspapers 7,749 7,500
Brooklyn Skyline 1,394 ----
Westside Publications 3,261 ----
$ 68,819 $ 62,853
========== ===========
12
<PAGE>
(2) Net of interest income of $8,037 and $13,526 for the three months ended
February 28, 1995 and 1994 respectively.
(3) The results of operations for 1994 have been restated to reflect additional
expenses and loss.
</FN>
</TABLE>
Results of Operations:
The following discussion compares results of operations for the three months
ended February 28, 1995 and February 28, 1994.
Three Months Ended February 28, 1995 and February 28, 1994
Net Revenues:
Total revenues from existing publications were up over 16%. The
addition of Long Island Lifestyles, a four color lifestyle section which is
included in all the existing Nassau Newspapers publicatio s has enabled
advertisers to make an effective regional buy and helped increase revenues for
the Nassau Newspapers (44%). Dan's Papers has continued to expand its geographic
base to the north fork of Long Island and further west in the Hamptons,
increasing its revenues (26%). Moderate increases in revenues by the other
existing publications and the additional revenues generated by the acquisitions
and start-ups has brought the total revenues for the quarter to more than
$3,380,000, an increase of 58%.
Income (Loss) - Publications:
Net Income from existing publications increased by more than 118%. The
increase in in income for the Queens Tribune (63%) is attributed to more
effective management. Dan's Papers
13
<PAGE>
had a decrease in its loss (14%) as a result of the increase in revenues and
tighter financial controls. The Bronx Press Review had a slight loss compared to
a small profit last year as a result of an increase in sales related expenses i
curred in order to increase future revenues. The increase in sales for Nassau
Newspapers resulted in a profit this year as compared to a loss of over $50,000
last year. The Manhattan Spirit and Our Town both had small increases in income
as a result of increases in sales. The Company is continuing to focus on
increasing sales and controlling costs. As newsprint prices have increased, the
Company has been engaging in ongoing negotiations with paper suppliers and
reviewing contracts with printers which has enabled it to continue to increase
profits .
Parent Company Expenses:
The increase in parent company expenses (28%) was primarily a result of
increased personnel costs required for the continuing corporate growth and
expansion.
Liquidity and Capital Resources:
At February 28, 1995, the Company had an excess of current assets over
current liabilities in the amount of approximately $3,592,000. In January 1995,
$85,000 was used to pay notes and accrued interest incurred with the acquisition
of the Bronx Press Review.
Although there can be no assurance, management believes that the Company's
operations will generate positive cash flow for the fiscal year ending November
30, 1995. It is the opinion of management that cash on hand and cash from
operations are expected to be sufficient to meet the Company's cash needs on an
ongoing basis.
14
<PAGE>
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits - None
B. Reports on Form 8-K - None
15
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NEWS COMMUNICATIONS, INC.
(Registrant)
Date: April 20, 1996 By:/s/ Michael Schenkler
---------------------
Michael Schenkler, President
Date: April 20, 1996 By:/s/ Robert Berkowitz
--------------------
Robert Berkowitz, Controller
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> FEB-28-1995
<CASH> 844,198
<SECURITIES> 52,027
<RECEIVABLES> 4,744,144
<ALLOWANCES> 964,620
<INVENTORY> 0
<CURRENT-ASSETS> 4,938,051
<PP&E> 1,239,885
<DEPRECIATION> 550,931
<TOTAL-ASSETS> 9,639,491
<CURRENT-LIABILITIES> 1,355,206
<BONDS> 0
<COMMON> 79,206
0
449
<OTHER-SE> 8,204,630
<TOTAL-LIABILITY-AND-EQUITY> 9,639,491
<SALES> 3,384,111
<TOTAL-REVENUES> 3,384,111
<CGS> 0
<TOTAL-COSTS> 4,034,733
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (6,475)
<INCOME-PRETAX> (649,060)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (649,060)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
|
|