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Previous: LAS VEGAS DISCOUNT GOLF & TENNIS INC, 10KSB, 1996-04-23 |
Next: NEWS COMMUNICATIONS INC, 10QSB/A, 1996-04-23 |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB/A
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended - February, 28, 1994
Commission file number 0-18299
NEWS COMMUNICATIONS, INC.
(exact name of registrant as specified in its charter)
NEVADA 13-3346991
(State of jurisdiction of incorporation) (I.R.S. Employer ID. Number)
174-15 Horace Harding Expwy., Fresh Meadows, New York 11365
(Address of principal executive offices)
Registrant's telephone number (718) 357-3380
Indicate by check mark whether 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 such shorter period that Registrants was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. YES NO X
As of April 15, 1994, 7,475,747 shares of common stock were outstanding.
1
<PAGE>
TABLE OF CONTENTS
PAGE NUMBER DESCRIPTION
1 10-QSB Title Page
2 Table of Contents
3 Consolidated Balance Sheet at
February 28, 1994
6 Consolidated Statements of Operations for
the three months ended February 28, 1994
and February 28, 1993
7 Consolidated Statements of Cash Flows for
the three months ended February 28, 1994
and February 28, 1993
10 Notes to Consolidated Financial
Statements
11 Management's Discussion and Analysis
or Plan of Operation
15 Signatures
2
<PAGE>
PART I-ITEM 1
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
February 28, 1994
(unaudited)
CURRENT ASSETS:
Cash and Cash Equivalents $ 3,828,609
Accounts Receivable- Less: Allowance
for Doubtful Accounts of $737,301 2,288,000
Other Current Assets 246,855
---------------
TOTAL CURRENT ASSETS 6,363,464
Property and Equipment at Cost- Net of
Accumulated Depreciation of $455,889 419,779
Goodwill - Net 3,662,777
Other Assets 113,742
------------
TOTAL ASSETS $ 10,559,762
============
3
<PAGE>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
February 28, 1994
(unaudited)
CURRENT LIABILITIES:
Accounts Payable $ 422,427
Accrued Expenses 458,941
Accrued Payroll Taxes 126,593
Notes Payable 328,000
Other Current Liabilities 17,203
TOTAL CURRENT LIABILITIES 1,353,164
LONG TERM DEBT:
Notes Payable 79,000
TOTAL LIABILITIES 1,432,164
ISSUABLE COMMON STOCK 300,000
COMMITMENTS AND CONTINGENCIES ----
STOCKHOLDERS' EQUITY:
Preferred Stock, $1.00 Par Value;
500,000 Shares Authorized:
10% Convertible Preferred Stock,
1,250 Shares Authorized; 33 Issued
and Outstanding $ 33
8% Convertible Preferred Stock,
500 Shares Authorized, 217
Issued and Outstanding 217
4
<PAGE>
12% Convertible Preferred Stock, 200 Shares
Authorized, 200 Shares Issued and Outstanding 200
Common Stock, $.01 Par Value; Authorized
100,000,000 Shares; 7,620,272 Shares Issued 76,203
Paid-in-Capital Preferred Stock 523,501
Paid-in-Capital Common Stock 13,204,208
(Deficit) (4,568,035)
Total $9,236,327
Less: Treasury Stock [151,000 Shares]-
At Cost (408,729)
TOTAL STOCKHOLDERS' EQUITY 8,827,598
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 10,559,762
==================
5
<PAGE>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
February 28, 1994 February 28, 1993
Unaudited
---------
<S> <C> <C>
NET REVENUES $2,136,297 $1,585,181
---------- ----------
EXPENSES:
Direct Mechanical Costs 674,936 423,694
Salaries, Benefits and
Outside Labor Costs 1,225,769 955,132
Rent, Occupancy & Utilities 104,235 81,730
Provisions for Doubtful Accounts 31,000 24,000
General and Administrative 367,368 288,887
----------- ------------
TOTAL EXPENSES 2,403,308 1,773,443
----------- -----------
OPERATING INCOME (LOSS)
BEFORE INTEREST EXPENSE (267,011) (188,104)
INTEREST EXPENSE 6,875 8,896
---------- -----------
NET INCOME (LOSS) $ (273,886) $ (197,000)
=========== ============
NET INCOME (LOSS) PER SHARE $(.04) $(.03)
========= ================
WEIGHTED AVERAGE SHARES
OUTSTANDING 7,353,942 5,937,709
========= ============
</TABLE>
6
<PAGE>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
February 28, 1994 February 28, 1993
----------------- -----------------
Unaudited
---------
<S> <C> <C>
Operating Activities:
Net (Loss) $ (273,886) $ (197,000)
----------- ------------
Adjustments to Reconcile Net
(Loss) to Net Cash Provided
by Operating Activities:
Depreciation and Amortization 70,765 85,238
Provision for Losses on Accounts
Receivable 31,000 24,000
Change in Assets and Liabilities:
(Increase) Decrease in Accounts
Receivable (63,475) (84,835)
(Increase) Decrease in Other Current
Assets (123,054) (8,277)
(Increase) in Other Assets (5,995) (52,984)
Decrease (Increase) in Goodwill (19,732) ----
Increase (Decrease) in Accounts Payable
and Accrued Expenses (29,649) (120,471)
Increase (Decrease) in Payroll Taxes Payable (11,768) 36,651
(Decrease) in Other Current Liabilities (55,261) (1,257)
--------- ---------
Total Adjustments (207,169) (121,935)
------------ -------------
NET (DEFICIT) - OPERATING ACTIVITIES - (481,055) (318,935)
Forward
</TABLE>
7
<PAGE>
News Communications, Inc. and Subsidiaries
<TABLE>
<CAPTION>
Three Months Ended
February 28, 1994 February 28, 1993
----------------- -----------------
Unaudited
---------
<S> <C> <C>
NET (DEFICIT) - OPERATING ACTIVITIES -
Forwarded (481,055) (318,935)
========= =========
INVESTING ACTIVITIES:
Capital Expenditures (7,039) (76,231)
---------- ------------
NET CASH USED BY INVESTING
ACTIVITIES (7,039) (76,231)
----------- ------------
FINANCING ACTIVITIES:
Principal Payments Long-Term Debt (220,250) (200,000)
Proceeds from Exercise of Warrants 2,026,435 -----
Dividend on Preferred Stock (10,340) (10,340)
Proceeds from Exercise of Stock Options 1,000 -----
Purchase of Bronx Press Review ----- (90,000)
Purchase of the Nassau Newspapers (313,000) -----
---------- -----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 1,483,845 (300,340)
----------- ------------
NET INCREASE (DECREASE) IN CASH 995,751 (695,506)
CASH - BEGINNING OF PERIODS 2,832,858 1,637,312
---------- -----------
CASH - END OF PERIODS $ 3,828,609 $ 941,806
============= ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 44,927 $ 213
Income Taxes ---- ----
</TABLE>
8
<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 $613,000. 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.
On December 18, 1992 the Company purchased 100% of the outstanding stock of
Parkchester Publishing Company, Inc. publisher of the Bronx Press Review. The
net purchase price was $325,000, of which $90,000 was paid at the time of
acquisition, $78,000 was paid in December 1993 and the remainder is payable in
two annual installments of approximately $78,000 each in December 1994 and
December 1995.
9
<PAGE>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Basis of Presentation:
The consolidated balance sheet as of February 28, 1994 and the Statements of
Operations for the three-month period ended February 28, 1994 and February 28,
1993, 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, 1993 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.
10
<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 papers.
The Company publishes the Manhattan Spirit, the Queens Tribune, Dan's Papers,
and (the Montauk Pioneer), Our Town, the Bronx Press Review, (the Riverdale
Review and Westchester Lifestyles) and 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, and
six editions of the Long Island Market) - all weekly regional newspapers.
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
information for the three months ended February 28, 1994 and February 28, 1993
is unaudited.
11
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended
February 28, 1994 (5) February 28, 1993
----------------- -----------------
Unaudited
---------
<S> <C> <C>
Net Revenues:
Queens Tribune $ 614,148 $ 556,745
Manhattan Spirit 345,368 405,518
Dan's Papers 186,367 178,317
Our Town 372,545 378,456
The Bronx Press Review (3) 203,209 66,145
Nassau Newspapers (4) 414,660 ----
------------ ------------
Total Revenues $ 2,136,297 $ 1,585,181
=========== ===========
Income (Loss)
Publications Before Goodwill:
Queens Tribune $ 78,866 $ 20,431
Manhattan Spirit 2,203 6,128
Dan's Papers (78,836) (71,857)
Our Town 59,139 60,843
The Bronx Press Review (3) 1,676 13,403
Nassau Newspapers (4) (50,872) ----
------------- ------------
Net Income-Publications $ 12,176 $ 28,948
=========== ============
Income (Loss)
Publications After Goodwill (1):
Queens Tribune $ 52,149 (6,286)
Manhattan Spirit 2,203 6,128
Dan's Papers (91,511) (84,532)
Our Town 45,648 47,382
The Bronx Press Review (3) (824) 10,903
Nassau Newspapers (4) (58,372) ----
-------------- --------
Net Income (Loss)-Publications $ (50,677) $ (26,405)
================ ===========
Parent Company Expenses:
Personnel, Rent, General
and Administrative 229,860 161,586
Interest (2) (6,651) 9,009
--------- ----------
Total Parent Company Expenses 223,209 170,595
---------- ----------
Net Income (Loss) $(273,886) $(197,000)
========== ===========
12
<PAGE>
<FN>
(1) Reflects expense for amortization of goodwill by publication as follows:
Three Months Ended
February 28, 1994 February 28, 1993
Queens Tribune 26,717 26,717
Dan's Papers 12,675 12,675
Our Town 13,461 13,461
The Bronx Press Review 2,500 2,500
Nassau Newspapers 7,500 ----
$62,853 $55,353
(2) Net of interest income of $13,526 and $7,470 for the three months ended
February 28, 1994 and 1993 respectively.
(3) The Bronx Press Review was acquired in December 1992.
(4) Nassau Newspapers were acquired in December 1993.
(5) The results of operations for 1994 have been restated to reflect additional
expenses and loss.
Results of Operations:
The following discussion compares results of operations for the three months
ended February 28, 1994 and February 28, 1993.
Three Months Ended February 28, 1994 and February 28, 1993
Net Revenues:
</FN>
</TABLE>
13
<PAGE>
Total revenues were up almost 35% due in large part to the acquisition
of the Nassau Newspapers and the start-up of two new publications, the Riverdale
Review and Westchester Lifestyles. In spite of the worst weather in recent
memory, the Queens Tribune had an increase in revenue (10%). The cold and snow
impaired the ability of the display sales force to make their normal calls,
however, there was a slight increase in revenue for Dan's Papers (5%). The
strength of Our Town was almost enough to offset the effect of a record number
of winter storms, resulting in a slight decrease in revenue (2%). The adverse
weather, combined with a reduction in less profitable sales, resulted in the
Manhattan Spirit having a decrease in revenue (15%). The Bronx Press Review was
acquired in December 1992 and includes two new publications, (the Riverdale
Review and Westchester Lifestyles), which accounts for its increase in revenues
(207%). The Nassau Newspapers were acquired in December 1993.
Income (Loss) - Publications:
Net Income from publications decreased by approximately $25,000 after
tak ng into account the development cost involved in the start-up of the
Riverdale Review and Westchester Lifestyles, and the acquisition of the Nassau
Newspapers. The increase in income for the Queens Tribune (286%) is attributed
to the increase in revenue and a reduction in expenses resulting from cost
cutting programs instituted by management. Similar cost cutting programs offset
the decreases in revenue and resulted in flat income at the Manhattan Spirit and
Our Town . Dan's Papers had a decrease in income (10%), which is expected to be
more than offset in the remaining quarters of the year. The reduction of income
for the Bronx Press Review, from $13,000 to $2,000, (86%) is primarily a result
of the costs related to the start-up of the Riverdale Review and Westchester
Lifestyles. The Nassau Newspapers were acquired in December 1993.
Parent Company Expenses:
The increase in parent company expenses (33%) w s primarily a result of
increased payroll costs and a small expenditure for a new start-up (Manhattan
File magazine).
14
<PAGE>
Liquidity and Capital Resources:
At February 28, 1994, the Company had an excess of current assets over
current liabilities in the amount of a proximately $5,085,000. As a result of
the exercise of Class C and D warrants the Company received net proceeds of
approximately $1,035,000. In December 1993, $92,000 was used to pay notes and
accrued interest incurred with the acquisition of the Bronx Press Review. In
January 1994, $175,000 was used to pay notes payable and accrued interest
incurred with the reacquisition in 1991 of Common Stock from a former officer.
At February 28, 1994, there remained outstanding $250,000 due to the
former owner of Our Town, which is payable in May 1994.
At February 28, 1994, there remained outstanding $157,000 due to the
former owner of the Bronx Press Review, of which $78,000 is payable in December
1994 and $79,000 in December 1995.
Although ther can be no assurance, management believes that the Company's
operations will generate positive cash flow for the fiscal years ending November
30, 1994 and 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.
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-30-1994
<PERIOD-END> FEB-28-1994
<CASH> 3,828,609
<SECURITIES> 0
<RECEIVABLES> 3,025,301
<ALLOWANCES> 737,301
<INVENTORY> 0
<CURRENT-ASSETS> 6,363,464
<PP&E> 875,668
<DEPRECIATION> 455,889
<TOTAL-ASSETS> 10,559,762
<CURRENT-LIABILITIES> 1,353,164
<BONDS> 0
<COMMON> 76,203
0
450
<OTHER-SE> 8,750,945
<TOTAL-LIABILITY-AND-EQUITY> 10,559,762
<SALES> 2,136,297
<TOTAL-REVENUES> 2,136,297
<CGS> 0
<TOTAL-COSTS> 2,403,308
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (6,875)
<INCOME-PRETAX> (273,886)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (273,886)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
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