<PAGE> 1
STECK-VAUGHN PUBLISHING CORPORATION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1997
-------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-21730
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STECK-VAUGHN PUBLISHING CORPORATION
- --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE I.R.S. NO. 33-0556929
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
4515 SETON CENTER PARKWAY SUITE 300, AUSTIN, TEXAS 78759
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) 512/343-8227
----------------------------
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(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED
SINCE LAST REPORT)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: 14,472,167
COMMON STOCK SHARES OUTSTANDING AT APRIL 30, 1997.
1
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STECK-VAUGHN PUBLISHING CORPORATION
CONSOLIDATED BALANCE SHEETS
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
March 31, December 31, March 31,
(amounts in thousands, except share counts) 1997 1996 1996
-------- -------- --------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,372 $ 4,827 $ 8,004
Marketable securities 1,447 1,447 1,503
Receivables, net of allowance of $1,274, $1,342 16,690 17,492 12,057
and $403
Inventories and supplies 24,190 21,776 20,725
Prepaid and deferred marketing expenses 4,613 1,635 4,678
Note receivable from parent company -- -- 3,000
Deferred plant costs 3,778 3,876 2,741
Other current assets 2,293 2,910 1,598
-------- -------- --------
Total current assets 57,383 53,963 54,306
LAND, BUILDINGS AND EQUIPMENT, net 9,880 9,866 7,163
ACQUIRED INTANGIBLE ASSETS, net 14,097 14,655 8,548
DEFERRED PLANT COSTS 4,309 4,042 3,349
OTHER ASSETS 2,342 2,342 --
-------- -------- --------
$ 88,011 $ 84,868 $ 73,366
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 5,499 $ 6,618 $ 6,816
Accrued royalties 2,411 2,296 2,633
Accrued commissions 508 736 657
Accrued salaries, wages and bonuses 2,276 1,965 1,101
Payable to parent company 815 976 536
Current portion of long-term debt 3,483 3,547 2,243
Accrued and deferred income taxes 2,266 2,266 691
Other liabilities 25 49 --
-------- -------- --------
Total current liabilities 17,283 18,453 14,677
-------- -------- --------
LIABILITIES PAYABLE AFTER ONE YEAR
Long-term debt, less current portion 9,742 6,731 943
Deferred income taxes -- -- 629
-------- -------- --------
9,742 6,731 1,572
-------- -------- --------
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 5,000,000 shares -- -- --
authorized and unissued
Common stock, $.01 par value; 25,000,000 shares 147 146 146
authorized;
14,745,000, 14,600,000, and 14,577,000
shares issued
Additional paid-in capital 37,804 36,998 36,851
Retained earnings 25,003 24,313 21,940
Unrealized gain on marketable securities, net
of tax effect 60 60 13
-------- -------- --------
63,014 61,517 58,950
Treasury stock, at cost (273,000, 255,000 and
255,000 shares) (2,028) (1,833) (1,833)
-------- -------- --------
Total stockholders' equity 60,986 59,684 57,117
-------- -------- --------
$ 88,011 $ 84,868 $ 73,366
======== ======== ========
</TABLE>
2
<PAGE> 3
STECK-VAUGHN PUBLISHING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
Three Months Ended
(amounts in thousands, except per share amounts) March 31,
1997 1996
-------- --------
<S> <C> <C>
NET REVENUES $ 15,818 $ 15,461
Product costs and fulfillment 4,777 5,142
-------- --------
GROSS PROFIT 11,041 10,319
Product development 3,074 2,666
Selling and marketing 4,792 4,989
General and administrative 1,260 1,268
Provision for doubtful accounts
20 15
Amortization of acquired intangible assets 558 346
-------- --------
OPERATING INCOME 1,337 1,035
Interest income 325
55
Interest expense (261) (75)
-------- --------
INCOME BEFORE INCOME TAXES 1,131 1,285
Income taxes (441) (488)
-------- --------
NET INCOME $ 690 $ 797
======== ========
EARNINGS PER SHARE $ 0.05 $ 0.06
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING 14,452 14,377
======== ========
</TABLE>
3
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STECK-VAUGHN PUBLISHING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
Part I. FINANCIAL STATEMENTS
Item 1. Financial Statements
<TABLE>
<CAPTION>
Three Months Ended
March 31,
(amounts in thousands) 1997 1996
-------- --------
<S> <C> <C>
CASH FLOWS FOR OPERATING ACTIVITIES:
Net Income $ 690 $ 797
Adjustments to reconcile net income to cash
used for operating activities:
Depreciation and amortization 420 286
Amortization of acquired intangible assets 558 346
Provision for doubtful accounts 20 15
Loss (gain) on sale of assets 14 (1)
Change in assets and liabilities net of effects from
acquisitions:
Receivables 782 (1,149)
Inventories and supplies (2,414) (2,616)
Prepaid and deferred marketing expenses (2,978) (3,222)
Deferred plant costs (169) (221)
Receivable from/payable to parent company (161) (763)
Accounts payable and accrued expenses (957) 4,035
Other 617 69
-------- --------
NET CASH USED FOR OPERATING ACTIVITIES (3,578) (2,424)
-------- --------
CASH FLOWS FOR INVESTING ACTIVITIES:
Net sales of marketable securities -- 248
Note receivable from parent company, net activity -- 1,000
Additions to land, buildings and equipment (494) (735)
Dispositions of land, buildings and equipment 23 28
Acquisition costs, net of cash acquired -- (91)
-------- --------
NET CASH FOR INVESTING ACTIVITIES (471) 450
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in current portion of long-term debt (1,900) 1,900
Additions in long-term debt 5,000 --
Reductions in long-term debt (118) (1,986)
Proceeds from issuance of common stock 807 23
Purchase of treasury stock (195) --
-------- --------
NET CASH FROM FINANCING ACTIVITIES 3,594 (63)
-------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS (455) (2,037)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 4,827 10,041
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,372 $ 8,004
======== ========
</TABLE>
4
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STECK-VAUGHN PUBLISHING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Note 1 - Summary of Accounting Policies
Steck-Vaughn Publishing Corporation (the Company) was incorporated on March 10,
1993, as a wholly-owned subsidiary of National Education Corporation (NEC).
Effective April 2, 1993, NEC made a capital contribution of all of the stock of
Steck-Vaughn Company (SVC) to the Company. The consolidated financial
statements include the accounts of the Company and its wholly owned
subsidiaries, Steck-Vaughn Company, SV Distribution Company (d.b.a. Summit
Learning), and Edunetics Ltd. and Edunetics Corporation (together referred to
as "Edunetics" herein). All significant intercompany balances and transactions
have been eliminated in consolidation.
In August 1993, the Company completed an initial public offering in which
2,668,000 shares were sold for net proceeds of $29,775,000. The shares sold
represented 18.3% of the outstanding shares of the Company. The Company has
subsequently repurchased 273,000 shares of its outstanding common stock,
increasing NEC's ownership to 82.2% of the common stock of the Company.
Due to the seasonal nature of the Company's traditional selling cycle, a
substantial portion of selling and marketing costs of the Company are deferred
in the first half of the year and fully amortized later in the calendar year to
properly match the costs with revenues.
The Company is a member of an affiliated group of companies that joins in
filing consolidated tax returns. The tax provision is calculated under the
terms of a tax sharing agreement entered into between the Company and NEC.
Under the agreement, the provision for income taxes generally is determined on
a separate company basis, subject to certain adjustments. Benefits for credits
and other tax attributes are recognized by the Company when recognizable by NEC
on a consolidated reporting basis. Income tax expense represents amounts
payable to or receivable from NEC determined in accordance with the tax sharing
agreement.
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments of a normal recurring nature
necessary to present fairly the financial position, results of operations, and
cash flows of the Company. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission. It is
suggested that these financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's 1996 Form
10-K. The results of operations for interim periods are not necessarily
indicative of the results of operations expected for the year.
5
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STECK-VAUGHN PUBLISHING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Note 2 - Investments
All marketable securities are classified as available-for-sale securities.
During the three months ended March 31, 1997 and 1996, the Company did not
realize a material gain or loss from the sale of available-for-sale securities.
Note 3 - Inventories and Supplies
<TABLE>
<CAPTION>
March 31, December 31, March 31,
(amounts in thousands) 1997 1996 1996
------- ------- -------
<S> <C> <C> <C>
Finished Goods $23,505 $21,213 $19,924
Work in process 72 72 128
Raw materials and supplies 613 491 673
------- ------- -------
Total $24,190 $21,776 $20,725
======= ======= =======
</TABLE>
Note 4 - Business Combinations
On April 30, 1996, the Company acquired all of the stock of Edunetics Ltd., an
Israel corporation engaged in the development of educational software, for cash
consideration of $12,000,000. At closing, the purchase price was funded by
cash on hand and borrowings of $9,000,000 under the revolving bank credit
agreement. The acquisition was accounted for using the purchase method of
accounting.
Note 5 - Earnings Per Share
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 128, "Earnings per Share," establishing a new
methodology for the calculation of earnings per share. If earnings per share
had been determined under the new standard, both basic and diluted earnings per
share would be unchanged from the current presentation on the Statements of
Income.
Note 6 - Pending Transactions
On March 13, 1997, NEC and Harcourt General, Inc. (Harcourt) signed a
definitive merger agreement whereby Harcourt would acquire all of the
outstanding common shares of NEC for $21.00 per share pursuant to a tender offer
which would expire at midnight on May 27, 1997. The tender offer is subject to
customary terms and conditions, including, among other things, shareholders of
NEC tendering at least a majority of the total number of outstanding common
shares on a fully diluted basis. Harcourt has announced that the
Hart-Scott-Rodino antitrust waiting period for the tender offer has expired.
Harcourt also indicated in its announcement of April 16, 1997, that it plans,
subject to its ability to effectuate the merger with NEC, to seek to acquire
the outstanding shares of common stock of the Company not currently owned by NEC
at a price per share of $14.00. Harcourt has not yet determined the manner in
which it would seek to acquire the Company shares or the timing of any such
acquisition. Harcourt reserved the right to change its plan to acquire Company
shares and, accordingly, there can be no assurance that it will acquire the
shares.
6
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STECK-VAUGHN PUBLISHING CORPORATION
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Percentage of Net Revenues
Three Months Ended Percentage
March 31, Change From
1997 1996 Prior Year Period
---- ---- -----------------
<S> <C> <C> <C>
Net Revenues:
Core Business:
Elementary/High School 44.5% 46.3% (1.6)%
Adult education 18.0 18.2 0.7
Library 20.2 24.1 (14.0)
----- -----
82.7 88.6 (4.5)
Summit Learning 11.8 11.4 5.5
Edunetics 5.5 --
----- -----
Total Net Revenues 100.0 100.0 2.3
Product costs and fulfillment 30.2 33.3 (7.1)
----- -----
Gross Profit 69.8 66.7 7.0
Product development 19.4 17.2 15.3
Selling and marketing 30.3 32.3 (3.9)
General and administrative 8.0 8.2 (0.6)
Provision for doubtful accounts 0.1 0.1 33.3
Amortization of acquired
intangible assets 3.5 2.2 61.3
----- -----
Operating Income 8.5 6.7 29.2
Interest income 0.3 2.1 (83.1)
Interest expense (1.6) (0.5) 248.0
----- -----
Income Before Income Taxes 7.2 8.3 (12.0)
Income taxes 2.8 3.1 (9.6)
----- -----
Net Income 4.4% 5.2% (13.4)
===== =====
</TABLE>
7
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STECK-VAUGHN PUBLISHING CORPORATION
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
NET REVENUES
<TABLE>
<CAPTION>
Revenues by Product Line Three Months Ended
March 31,
(amounts in thousands) 1997 1996
------- -------
<S> <C> <C>
Core Business
Elementary and High School (El/Hi) $ 7,035 $ 7,152
Adult Education 2,840 2,821
Library 3,200 3,719
------- -------
13,075 13,692
Summit Learning 1,866 1,769
Edunetics 877 --
------- -------
Total $15,818 $15,461
======= =======
</TABLE>
Revenues increased 2.3% over the same quarter of the previous year,
attributable to increased sales at Summit Learning and revenues provided by the
acquisition of Edunetics in April 1996. Core business sales declined primarily
due to lower library sales and transitional issues related to the sales staff
in 1997.
El/Hi sales for the three months ended March 31, 1997, were relatively flat
compared to 1996, as the elementary sales force transitioned from selling only
print-based products to selling both print and technology-based products.
Adult sales for the first quarter were also consistent with the same period in
1996, as certain smaller, less profitable adult sales territories were
consolidated. Sales of Educational Development Laboratories (EDL) products
increased for the quarter.
Library sales were down 14.0% for the quarter compared to 1996. The decrease
in sales was due to higher 1996 sales related to the 1996 release of the
revised 53-volume Portrait of America series and non-recurring stocking orders
from distributors stemming from the inauguration of the Company's exclusive
distribution agreement with Wayland Publishers. Sales in 1997 were boosted by
the fall release of the 24-volume Raintree Illustrated Science Encyclopedia
(RISE) and the new independent library sales force formed in fall 1996.
Summit Learning sales improved 5.5% with the timely release in 1997 of math and
science catalogs and strong residual business from fall catalogs. A new
curriculum integration sales group was assembled at the beginning of the
quarter to facilitate sales of Edunetics and the Company's other technology
products.
8
<PAGE> 9
STECK-VAUGHN PUBLISHING CORPORATION
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
PRODUCT COST AND FULFILLMENT EXPENSE
Product cost and fulfillment expense as a percentage of revenues decreased for
the three-month period ended March 31, 1997, as compared to 1996, primarily
due to the inclusion of Edunetics in 1997. Product cost and fulfillment for the
Company's core business operations for the three months ended March 31, 1997,
represented 26.5% of core business revenues, as compared to 29.4% for the same
period in the previous year, due to reduced library sales, lower sales to
wholesalers due to the new independent library sales group, increased sales of
EDL technology products, and the reduction of paper prices last year. Product
costs of Edunetics products for the three months ended March 31, 1997,
represented 5.4% of Edunetics revenue, reflecting the higher margins earned on
technology products. Summit Learning's product and fulfillment costs, at 67.5%
of revenues, reflect the non-proprietary nature of the product line and
increased over the prior year period due to increased product cost.
PRODUCT DEVELOPMENT EXPENSE
The following table reconciles product development investment to product
development expense for each of the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended
March 31, Percentage
(amounts in thousands) 1997 1996 Change
---------- -------- ----------
<S> <C> <C> <C>
Product development investment $ 3,216 $ 2,887 11.4%
Plant and software costs capitalized (830) (1,197) (30.7)
Plant costs amortized 688 976 (29.5)
------- -------
Product development expense $ 3,074 $ 2,666 15.3
======= =======
</TABLE>
Product development investment for the three months ended March 31, 1997,
increased 11.4% as compared to the prior year, primarily attributable to the
acquisition of Edunetics in April 1996. Capitalized costs were lower due to the
timing of development costs in 1997, and amortization expense was lower than
last year due to the implementation of the new amortization rate schedule for
new products.
9
<PAGE> 10
STECK-VAUGHN PUBLISHING CORPORATION
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SELLING AND MARKETING EXPENSE
The following table reconciles selling and marketing costs to selling and
marketing expense for each of the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended
March 31, Percentage
(amounts in thousands) 1997 1996 Change
------- -------- ----------
<S> <C> <C> <C>
Selling and marketing costs $ 7,294 $ 6,661 9.5 %
Selling and marketing deferred (2,502) (1,672) (49.6)
------- -------
Net selling and marketing expense $ 4,792 $ 4,989 (3.9)
======= =======
</TABLE>
Selling and marketing costs increased 9.5% for the three months ended March 31,
1997, as compared to the prior year, due to the inclusion of Edunetics sales
costs, particularly the new curriculum integration sales group formed to
facilitate the sale of technology products. Net selling and marketing expense
decreased 3.9% for the three months ended March 31, 1997, as compared to the
prior year, due to the deferral of a portion of the Company's selling and
marketing costs reflecting the seasonal nature of the Company's traditional
selling cycle.
Operating Income by Product Line
<TABLE>
<CAPTION>
Three Months Ended Percentage of
March 31, Revenue
(amount in thousands) 1997 1996 1997 1996
------------------ ---------------
<S> <C> <C> <C> <C>
Core Business $ 2,348 $ 1,251 18.0% 9.1%
Summit Learning (237) (216)
Edunetics (774) --
------- -------
Total Operating Income $ 1,337 $ 1,035 8.5% 6.7%
======= =======
</TABLE>
Operating income as a percentage of revenues for the three months ended March
31, 1997, as compared to 1996, increased for the core business primarily due to
lower product costs, reduced plant amortization, and the pass-through from NEC
of insurance credits of $373,000 arising from favorable loss experience.
Summit Learning reported an operating loss reflecting the seasonally lower
sales in the first quarter and the high investment in catalogs. Edunetics
reported an operating loss due to lower than expected sales as the
recently-hired curriculum integration sales specialists worked to identify
potential major accounts and cultivate sales.
AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS
Amortization expense increased due to the acquisition of Edunetics in April
1996.
10
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STECK-VAUGHN PUBLISHING CORPORATION
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTEREST INCOME AND EXPENSE
Interest income for the three-month period ended March 31, 1997 was lower than
the previous year, reflecting lower cash on hand as the result of recent
acquisitions and termination of the Company's loans to NEC. Interest expense
for the period was higher than prior year due to debt incurred for the
acquisition of Edunetics.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity are cash, marketable securities,
cash provided from operations and the Company's bank line of credit. The
Company's uses of cash include product development, capital expenditures,
working capital requirements, and selected acquisitions of complementary
businesses and product lines.
At March 31, 1997, the Company had $5,819,000 in cash and marketable securities
versus $9,507,000 at March 31, 1996. The decrease was primarily attributable
to the use of cash on hand to purchase Edunetics.
Net cash outflow for operating activities for the three months ended March 31,
1997, of $3,604,000 was $1,180,000 higher than the prior year period. The
increase reflects inordinate accrued liabilities in the first quarter of 1996
relating to the start-up of Summit Learning and inventory purchases under the
new distribution agreements with Wayland Publishers and Abdo.
On April 30, 1996, the Company acquired all of the stock of Edunetics Ltd. for
cash consideration of $12,000,000. At closing, the purchase price was funded
by cash on hand and borrowings under the Company's bank line of credit.
The Company maintains a revolving bank credit agreement in the amount of
$15,000,000 with a maturity date of June 10, 1998. The agreement provides for
borrowings at prime or, at the Company's option, LIBOR plus 1.5 percent. At
March 31, 1997, $12,000,000 was outstanding under the bank credit facility.
The $1,900,000 note issued in conjunction with the purchase of EDL was paid in
full in March 1997.
The Company expects that cash, cash provided from operations, and the revolving
credit facility will be sufficient to provide for investment in product
development, planned working capital requirements, debt service, and capital
expenditures for the foreseeable future.
11
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STECK-VAUGHN PUBLISHING CORPORATION
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Restated Certificate of Incorporation of the Company (1)
3.2 By Laws of the (1) Company
4.1 Specimen of Common Stock Certificate of the Company
10.1 Modification and Renewal of Note, dated December 28, 1992,
between NationsBank of Texas, N.A., as holder, and Steck-Vaughn
Company, as borrower, secured by and as purchase money for the
Company's distribution center in Austin, Texas. (2)
10.2 Agreement, dated June 1, 1990, between the American Council on
Education and Steck-Vaughn Company, granting exclusive license
for reproduction and distribution of official GED Practice Tests
and Addendum effective July 28, 1992. (3)
10.3 Form of Intercompany Agreement between the Company and
National Education Corporation. (4)
10.4 First Amendment to Intercompany Agreement between the Company
and National Education Corporation dated June 10, 1994. (5)
10.5 Form of Tax Sharing Agreement between the Company and National
Education Corporation. (6)
10.6 Form of Indemnification Agreements between the Company and its
Officers and Directors. (7)
10.7 The Company's 1993 Stock Option Plan as amended. (8)
10.8 National Education Corporation Supplemental Executive Retirement
Plan (9)
10.9 Revolving Line of Credit Note and Option Agreement between the
Company and National Education Corporation, dated February 28,
1995 (10)
10.10 Addendum to Agreement between the American Council on Education
and and Steck-Vaughn Company extending the expiration of the
Agreement to August 31, 2001 (11)
10.11 The Company's 1995 Directors' Stock Option and Award Plan (12)
10.12 Renewal and Extension Agreement between the Company and National
Education Corporation, effective December 31, 1995 (13)
10.13 First Amendment to Stock Option Agreement between the Company
and National Education Corporation, effective December 31, 1995.
(14)
10.14 Letter Amendment to Stock Option Agreement between the Company
and National Education Corporation, dated February 1, 1996. (15)
10.15 Agreement between the Company and Edunetics Ltd. dated February
29, 1996. (16)
12
<PAGE> 13
STECK-VAUGHN PUBLISHING CORPORATION
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
10.16 Loan Agreement between NationsBank of Texas, N.A., and
Steck-Vaughn Company, dated April 29, 1996. (17)
10.17 Second Renewal and Extension Agreement between the Company and
National Education Corporation, effective March 31, 1996. (18)
10.18 Second Amendment to Stock Option Agreement between the Company
and National Education Corporation, effective March 31, 1996.
(19)
10.19 Third Renewal and Extension Agreement between the Company and
National Education Corporation, effective June 30, 1996. (20)
10.20 Third Amendment to Stock Option Agreement between the Company
and National Education Corporation, effective June 30, 1996
.(21)
10.21 Employment Agreement between the Company and Anita Kopec dated
September 10, 1996 .(22)
10.22 Revised and Restated Office Lease dated January 30, 1997, between
Quarry Lake Business Center, Ltd., as landlord and Steck-Vaughn
company, as tenant, for the Company's principal offices in
Austin, Texas, beginning November 1, 1996 (23)
11.1 Statement re Calculation of Earnings Per Share.(24)
27 Financial Data Schedule. (25)
13
<PAGE> 14
STECK-VAUGHN PUBLISHING CORPORATION
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(1) Incorporated by reference to the identically numbered exhibit in
Amendment No. 1 to the Company's Registration Statement on Form S-1,
File No. 33-62334, filed with the Securities and Exchange Commission
on June 17, 1993 ("Amendment No. 1 to S-1 Registration Statement").
(2) Incorporated by reference to Exhibit 10.1 to the Company's
Registration Statement on Form S-1, File No. 33-62334, filed with the
Securities and Exchange Commission on May 7, 1993 (the "S-1
Registration Statement").
(3) Incorporated by reference to Exhibit 10.7 to the Company's Amendment
No. 1 to S-1 Registration Statement.
(4) Incorporated by reference to Exhibit 10.8 to the Company's Amendment
No. 1 to S-1 Registration Statement.
(5) Incorporated by reference to Exhibit 10.15 in the Company's Form 10-Q
for the quarterly period ended June 30, 1994, filed with the
Securities and Exchange Commission on August 11, 1994.
(6) Incorporated by reference to Exhibit 10.9 to the Company's Amendment
No. 1 to S-1 Registration Statement.
(7) Incorporated by reference to Exhibit 10.10 to the Company's Amendment
No. 1 to S-1 Registration Statement.
(8) Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-8, file no. 333- 22235, filed with the Securities
and Exchange Commission on February 24, 1997.
(9) Incorporated by reference to Exhibit 10.12 to the Company's S-1
Registration Statement.
(10) Incorporated by reference to Exhibit 10.12 in the Company's Form 10-K
for the year ended December 31, 1994, filed with the Securities and
Exchange Commission on March 29, 1995.
(11) Incorporated by reference to Exhibit 10.13 in the Company's Form 10-Q
for the quarterly period ended March 31, 1995, filed with the
Securities and Exchange Commission on May 12, 1995.
(12) Incorporated by reference to Exhibit A in the Company's Proxy
Statement furnished in connection with the Annual Meeting of
Stockholders held May 17, 1995, filed with the Securities and Exchange
Commission on March 29, 1995.
(13) Incorporated by reference to Exhibit 10.16 in the Company's Form 10-K
for the year ended December 31, 1995, filed with the Securities
and Exchange Commission on March 25, 1996.
14
<PAGE> 15
STECK-VAUGHN PUBLISHING CORPORATION
(14) Incorporated by reference to Exhibit 10.17 in the Company's Form 10-K
for the year ended December 31, 1995, filed with the Securities
and Exchange Commission on March 25, 1996.
(15) Incorporated by reference to Exhibit 10.18 in the Company's Form 10-K
for the year ended December 31, 1995, filed with the Securities
and Exchange Commission on March 25, 1996.
(16) Incorporated by reference to Exhibit 10.19 in the Company's Form 10-K
for the year ended December 31, 1995, filed with the Securities
and Exchange Commission on March 25, 1996.
(17) Incorporated by reference to Exhibit 10.18 in the Company's Form 10-Q
for the quarterly ended March 31, 1996, filed with the Securities and
Exchange commission on May 14, 1996.
(18) Incorporated by reference to Exhibit 10.19 in the Company's Form 10-Q
for the quarterly period ended March 31, 1996, filed with the
Securities and Exchange Commission on May 14, 1996.
(19) Incorporated by reference to Exhibit 10.20 in the Company's Form 10-Q
for the quarterly period ended March 31, 1996, filed with the
Securities and Exchange Commission on May 14, 1996.
(20) Incorporated by reference to Exhibit 10.22 in the Company's Form 10-Q
for the quarterly period ended June 30, 1996, filed with the
Securities and Exchange Commission on August 13, 1996.
(21) Incorporated by reference to Exhibit 10.23 in the Company's Form 10-Q
for the quarterly period ended June 30, 1996, filed with the
Securities and Exchange Commission on August 13, 1996.
(22) Incorporated by reference to Exhibit 10.24 in the Company's Form 10-Q
for the quarterly period ended September 30, 1996, filed with the
Securities and Exchange Commission on November 13, 1996.
(23) Incorporated by reference to Exhibit 10.22 in the Company's Form 10-K
for the year ended December 31, 1996, filed with the Securities and
Exchange Commission on March 31, 1997.
(24) Filed herewith.
(25) Filed only with electronic version of Form 10-Q.
15
<PAGE> 16
STECK-VAUGHN PUBLISHING CORPORATION
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STECK-VAUGHN PUBLISHING CORPORATION
Date: May 9, 1997 By /s/ FLOYD D. ROGERS
--------------------------------
Floyd D. Rogers
Vice President, Finance and
Chief Financial Officer
16
<PAGE> 17
STECK-VAUGHN PUBLISHING CORPORATION
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
----------- -------
11.1 Statement re Calculation of Earnings Per Share.
27.1 Financial Data Schedule.
17
<PAGE> 1
EXHIBIT 11.1
STECK-VAUGHN PUBLISHING CORPORATION
To Form 10-Q dated March 31, 1997
CALCULATION OF EARNINGS PER SHARE
(amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
--------------------
<S> <C> <C>
Net Income $ 690 $ 797
======== =======
Common Stock:
Shares outstanding from the beginning
of the period 14,345 14,313
Shares issued,weighted for period held 15 1
Assumed exercise of stock options using the
treasury stock method 92 63
Purchase of treasury shares,
weighted for period held -- --
-------- -------
Weighted Average Shares Outstanding 14,452 14,377
======== =======
Earnings Per Share $ 0.05 $ 0.06
======== =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,372
<SECURITIES> 1,447
<RECEIVABLES> 17,964
<ALLOWANCES> (1,274)
<INVENTORY> 24,190
<CURRENT-ASSETS> 57,383
<PP&E> 16,628
<DEPRECIATION> (6,748)
<TOTAL-ASSETS> 88,011
<CURRENT-LIABILITIES> 17,283
<BONDS> 0
0
0
<COMMON> 37,951
<OTHER-SE> (2,028)
<TOTAL-LIABILITY-AND-EQUITY> 88,011
<SALES> 15,818
<TOTAL-REVENUES> 15,818
<CGS> 4,777
<TOTAL-COSTS> 9,126
<OTHER-EXPENSES> 558
<LOSS-PROVISION> 20
<INTEREST-EXPENSE> 261
<INCOME-PRETAX> 1,131
<INCOME-TAX> 441
<INCOME-CONTINUING> 690
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 690
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
