-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EUDkJ1CeZHSTG8qEtIj5rf11tUOSIOQBoNznj8YwxM0DYnEKxveg5s2SO/qH5sj3 EVlCOdXdAa30Lo56sUQTXQ== 0000855433-00-000002.txt : 20000512 0000855433-00-000002.hdr.sgml : 20000512 ACCESSION NUMBER: 0000855433-00-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHRIS CRAFT INDUSTRIES INC CENTRAL INDEX KEY: 0000020067 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 941461226 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-02999 FILM NUMBER: 625954 BUSINESS ADDRESS: STREET 1: 767 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 2124074898 MAIL ADDRESS: STREET 1: 5355 TOWN CENTER ROAD STREET 2: SUITE 200 CITY: BOCA RATON STATE: FL ZIP: 33486 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL AUTOMOTIVE FIBRES INC DATE OF NAME CHANGE: 19681112 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 -------------------------------- OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-2999 ------------------------------ CHRIS-CRAFT INDUSTRIES, INC. ---------------------------- (Exact name of Registrant as specified in its charter) Delaware 94-1461226 - ---------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 767 Fifth Avenue, New York, New York 10153 - ------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 421-0200 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 ------- ------- As of April 30, 2000 there were 26,693,227 shares of the issuer's Common Stock outstanding and 8,185,746 shares of the issuer's Class B Common Stock outstanding. PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CHRIS-CRAFT INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of dollars) (UNAUDITED) ------------------------------------- March 31, December 31, 2000 1999 ----------- ----------- ASSETS - ------ CURRENT ASSETS: Cash and cash equivalents $ 284,977 $ 119,427 Marketable securities (substantially all U.S. Government securities) 1,105,496 1,240,241 Accounts receivable, net 88,776 102,292 Film contract rights 90,117 111,819 Prepaid expenses and other current assets 69,600 71,316 ----------- ----------- Total current assets 1,638,966 1,645,095 ----------- ----------- INVESTMENTS 95,526 104,176 ----------- ----------- FILM CONTRACT RIGHTS, less current portion 29,581 39,550 ----------- ----------- PROPERTY AND EQUIPMENT, net 66,178 65,039 ----------- ----------- INTANGIBLE ASSETS 471,302 474,846 ----------- ----------- OTHER ASSETS 21,296 17,279 ----------- ----------- $ 2,322,849 $ 2,345,985 =========== =========== LIABILITIES AND SHAREHOLDERS' INVESTMENT - ---------------------------------------- CURRENT LIABILITIES: Film contracts payable within one year $ 88,673 $ 102,737 Accounts payable and accrued expenses 147,849 153,509 Income taxes payable 53,178 34,907 ----------- ----------- Total current liabilities 289,700 291,153 ----------- ----------- FILM CONTRACTS PAYABLE AFTER ONE YEAR 72,837 84,372 ----------- ----------- OTHER LONG-TERM LIABILITIES 12,923 25,210 ----------- ----------- MINORITY INTEREST 498,998 503,447 ----------- ----------- COMMITMENTS AND CONTINGENCIES (NOTE 7) SHAREHOLDERS' INVESTMENT: Prior preferred stock - $1.00 dividend; currently authorized 73,399 shares; outstanding 73,399 shares 1,578 1,578 Convertible preferred stock - $1.40 dividend; currently authorized 234,288 shares; outstanding 234,288 and 234,374 shares 4,100 4,102 Class B common stock - par value $.50 per share; currently authorized 50,000,000 shares; outstanding 8,193,044 and 7,997,292 shares 4,097 3,999 Common stock - par value $.50 per share; currently authorized 100,000,000 shares; outstanding 26,646,894 and 25,781,763 shares 14,114 13,682 Capital surplus 484,051 420,390 Retained earnings 932,271 991,398 Accumulated other comprehensive income 8,180 6,654 ----------- ----------- 1,448,391 1,441,803 ----------- ----------- $ 2,322,849 $ 2,345,985 =========== =========== The accompanying notes to condensed consolidated financial statements are an integral part of these statements. CHRIS-CRAFT INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands of dollars except per share data) (UNAUDITED) ----------------------------------------------- Three Months Ended March 31, ---------------------- 2000 1999 ---------- ---------- OPERATING REVENUES $ 127,834 $ 111,460 ---------- ---------- OPERATING EXPENSES: Expenses directly associated with revenues 59,776 54,772 Selling, general and administrative 39,233 37,122 ---------- ---------- 99,009 91,894 ---------- ---------- Operating income 28,825 19,566 ---------- ---------- OTHER INCOME (EXPENSE): Interest and other income, net 20,533 18,676 Equity loss and other related to United Paramount Network (35,696) (30,150) ---------- ---------- (15,163) (11,474) ---------- ---------- Income before income taxes and minority interest 13,662 8,092 INCOME TAX PROVISION 6,000 3,600 ---------- ---------- Income before minority interest 7,662 4,492 MINORITY INTEREST (4,727) (3,744) ---------- ---------- Net income $ 2,935 $ 748 ========== ========== Earnings per share: Basic $ .08 $ .02 ========== ========== Diluted $ .07 $ .02 ========== ========== 3% Stock 3% Stock DIVIDENDS PER COMMON SHARE Dividend Dividend ========== ========== The accompanying notes to condensed consolidated financial statements are an integral part of these statements. CHRIS-CRAFT INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of dollars) (UNAUDITED) ----------------------------------------------- Three Months Ended March 31, -------------------- 2000 1999 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,935 $ 748 Adjustments to reconcile net income to net cash provided from operating activities: Film contract payments (27,092) (24,808) Film contract amortization 25,378 22,646 Depreciation and other amortization 6,336 5,776 Equity loss and other related to United Paramount Network 35,696 30,150 Minority interest 4,727 3,744 Other (1,799) (563) Changes in assets and liabilities: Accounts receivable 13,516 10,123 Other assets (6,226) (6,143) Accounts payable and other liabilities (1,928) (2,110) Income taxes 2,570 3,509 --------- --------- Net cash provided from operating activities 54,113 43,072 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Disposition of marketable securities, net 152,258 12,665 Investment in United Paramount Network (29,293) (33,125) Other investments (1,608) (10,708) Capital expenditures, net (3,933) (2,323) Other (384) (244) --------- --------- Net cash provided from (used in) investing activities 117,040 (33,735) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Capital transactions of subsidiaries (7,289) (4,117) Purchase of treasury stock - (8,392) Proceeds from option exercises 1,868 172 Other (182) (183) --------- --------- Net cash used in financing activities (5,603) (12,520) --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 165,550 (3,183) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 119,427 204,297 --------- --------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 284,977 $ 201,114 ========= ========= The accompanying notes to condensed consolidated financial statements are an integral part of these statements. CHRIS-CRAFT INDUSTRIES, INC. ---------------------------- NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- 1. PRINCIPLES OF CONSOLIDATION: The accompanying condensed consolidated financial statements include the accounts of Chris-Craft Industries, Inc. and its subsidiaries, including Chris-Craft's majority owned (80.0% at March 31, 2000) television broadcasting subsidiary, BHC Communications, Inc., and BHC's majority owned (57.9% at March 31, 2000) subsidiary, United Television, Inc. (UTV). The pro rata interests of BHC and UTV minority shareholders in the net income of the respective companies are reflected in minority interest in the accompanying condensed consolidated statements of income. The minority shareholders' interests in the net assets of BHC and UTV are reflected as minority interest in the accompanying condensed consolidated balance sheets. Intercompany accounts and transactions have been eliminated. The financial information included herein has been prepared by Chris-Craft, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. 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 such rules and regulations. However, Chris-Craft believes that the disclosures herein are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in Chris-Craft's latest annual report on Form 10-K. The information furnished reflects all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods. The results for these interim periods are not necessarily indicative of results to be expected for the full year, due to seasonal factors, among others. 2. MARKETABLE SECURITIES: All of Chris-Craft's marketable securities have been categorized as available-for-sale and are carried at fair market value. Since marketable securities are available for current operations, all are included in current assets. At March 31, 2000, Chris-Craft's marketable securities consisted of U.S. Government securities, which had a cost of $985,077,000 and a fair value of $982,609,000, and equity securities, which had a cost of $101,480,000 and a fair value of $122,887,000. The difference between aggregate cost and fair value of $18,939,000 ($8,180,000, net of income taxes and minority interests) is reflected as an increase to shareholders' investment in the accompanying condensed consolidated balance sheet. Of the investments in U.S. Government securities, all mature within seventeen months. At December 31, 1999, Chris-Craft's marketable securities consisted of U.S. Government securities, which had a cost of $1,149,089,000 and a fair value of $1,146,604,000, and equity securities, which had a cost of $75,342,000 and a fair value of $93,637,000. The difference between aggregate cost and fair value of $15,810,000 ($6,654,000, net of income taxes and minority interests) is reflected as an increase to shareholders' investment in the accompanying condensed consolidated balance sheet. 3. UNITED PARAMOUNT NETWORK: In July 1994, BHC, along with Viacom Inc.'s Paramount Television Group, formed the United Paramount Network, a broadcast television network which premiered in January 1995. BHC owned 100% of UPN from its inception through January 15, 1997, when Viacom completed the exercise of its option to acquire a 50% interest in UPN. On March 31, 2000, BHC sold its remaining 50% interest in UPN to Viacom for $5 million, after Viacom triggered the "buy-sell" provision of the Companies' partnership agreement. As a result of the sale, BHC has no further ownership interest in the network or obligation to fund UPN's operations. UPN had been organized as a partnership, and BHC accounted for its partnership interest under the equity method. The carrying value of such interest totalled $9,821,000 at December 31, 1999, and is included in Investments in the accompanying condensed consolidated balance sheet. Equity loss and other related to United Paramount Network in the accompanying income statements totalled $35,696,000 for the three months ended March 31, 2000 and includes equity loss in UPN of $22,574,000, loss on sale of BHC's interest in UPN of $11,347,000, and related expenses of $1,775,000. UPN's condensed statements of operations are as follows (in thousands): Three Months Ended March 31, ------------------- 2000 1999 -------- -------- Operating revenues $ 36,535 $ 30,454 Operating expenses 81,964 91,064 -------- -------- Operating loss (45,429) (60,610) Other income, net 281 310 -------- -------- Net loss $(45,148) $(60,300) ======== ======== 4. SHAREHOLDERS' INVESTMENT: Chris-Craft paid 3% stock dividends on its common and Class B common stock in the respective shares of such classes on April 14, 2000. During the three months ended March 31, 2000, 42,880 shares of Class B common stock were converted into 42,880 shares of common stock, and 86 shares of $1.40 convertible preferred stock were converted into 2,996 shares of common stock. In addition, 43,132 shares of common stock were issued upon exercise of stock options. As of March 31, 2000, 586,602 shares of common stock and 12,899 shares of $1.00 prior preferred stock remained authorized for purchase. As of March 31, 2000, shares of Chris-Craft's authorized but unissued common stock were reserved for issuance as follows: Shares ---------- Conversion of Class B common stock 8,193,044 Conversion of $1.40 convertible preferred stock 8,417,801* Stock options (including options outstanding for 3,759,387 shares) 5,128,962 ---------- 21,739,807 ========== *Including Class B common shares. 5. COMPREHENSIVE INCOME: Other comprehensive income includes only unrealized gains and losses on marketable securities classified as available-for-sale (see Note 2), net of a reclassification adjustment for gains (losses) included in net income. Comprehensive income is as follows (in thousands): Three Months Ended March 31, ---------------- 2000 1999 ------- ------- Net income $ 2,935 $ 748 Other comprehensive income, net of taxes and minority interests 1,526 2,425 ------- ------- Comprehensive income $ 4,461 $ 3,173 ======= ======= 6. CAPITAL TRANSACTIONS OF SUBSIDIARIES: Since April 1990, BHC's Board of Directors has authorized the purchase of up to 7,081,087 Class A common shares. Through December 31, 1998, 6,895,590 shares were purchased, including 226,503 shares from UTV in June 1998, for a total cost of $516.5 million. No additional shares have been purchased by BHC since December 31, 1998 and at March 31, 2000, 185,497 Class A common shares remained authorized for purchase. From January 1, 1998 through March 31, 2000, UTV purchased 76,900 of its common shares at an aggregate cost of $7.8 million. No shares were purchased during the first three months of 2000 or 1999. Such purchases, together with proceeds from the exercise of UTV stock options, BHC's special dividend ($2.00 per share in 2000 and $1.00 per share in 1999), and UTV's $.50 per share dividend in both periods, are reflected in capital transactions of subsidiaries in the accompanying condensed consolidated statements of cash flows, net of intercompany eliminations and minority interests. 7. COMMITMENTS AND CONTINGENCIES: Commitments of Chris-Craft's television stations for film contracts entered into but not available for broadcasting at March 31, 2000 aggregated approximately $282.5 million, including $79.0 million applicable to UTV. As set forth in Note 9 of Notes to Consolidated Financial Statements in Chris-Craft's 1999 Annual Report, Chris-Craft has been named as a defendant (or a "potentially responsible party") in certain actions seeking recovery for environmental damage allegedly related to (i) the activities (discontinued since 1983) of 50% owned Montrose Chemical Corporation of California ("Montrose California") and (ii) the activities of Montrose Chemical Co., a predecessor company to Chris-Craft. Chris- Craft does not presently consider liability to be "probable" in any of the Montrose California related matters and is unable to determine at this stage if it could have any liability regarding Montrose Chemical Co. Accordingly, no amount has been reserved in Chris-Craft's financial statements relating to these matters. In April 1999, a jury awarded damages totalling $7.3 million (approximately $8.4 million including interest and legal fees through March 31, 2000) to a former WWOR employee who filed suit alleging discrimination by the station. The station and its counsel believe the award to be unjustified and have filed an appeal which is expected to be heard in late 2000. It is not possible to reasonably estimate the amount, if any, which ultimately will be paid. Accordingly, no amount has been reserved in Chris-Craft's financial statements relating to this matter. UTV remains obligated for possible future consideration relating to the 1999 purchase of WRBW in Orlando, Florida, of up to $25 million. 8. EARNINGS PER SHARE: Computations of earnings per share, all of which give retroactive effect to the April 2000 3% stock dividend, are as follows (in thousands of dollars except per share amounts): Three Months Ended March 31, ---------------------- 2000 1999 ---------- ---------- BASIC: - ------ Weighted average common and Class B common shares outstanding 34,820,757 34,610,857 ========== ========== Net income $ 2,935 $ 748 Less: Preferred stock dividends (100) (101) ---------- ---------- Income available to common shareholders $ 2,835 $ 647 ========== ========== Basic earnings per share $ .08 $ .02 ========== ========== DILUTED: - -------- Weighted average common and Class B common shares outstanding 34,820,757 34,610,857 Assumed conversion of $1.40 preferred stock 8,419,957 8,472,197 Assumed exercise of stock options 844,611 208,381 ---------- ---------- Total shares used in computation 44,085,325 43,291,435 ========== ========== Income available to common shareholders $ 2,835 $ 647 Convertible preferred stock dividend 82 83 Dilution of UTV net income from UTV stock options (14) (8) ---------- ---------- Income available assuming dilution $ 2,903 $ 722 ========== ========== Diluted earnings per share $ .07 $ .02 ========== ========== 9. SEGMENT REPORTING: Chris-Craft has two reportable segments, the Television Division and the Industrial Division. Operating revenues and operating income for the first quarter of 2000 and 1999 are as follows (in thousands): Operating Revenues Operating Income ------------------ ------------------ 2000 1999 2000 1999 -------- -------- -------- -------- Television Division $121,966 $106,495 $ 32,943 $ 23,373 Industrial Division 5,868 4,965 1,305 785 Corporate and other - - (5,423) (4,592) -------- -------- -------- -------- $127,834 $111,460 $ 28,825 $ 19,566 ======== ======== ======== ======== CHRIS-CRAFT INDUSTRIES, INC. ---------------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- Liquidity and Capital Resources - ------------------------------- Chris-Craft's financial position continues to be strong and highly liquid. Cash and marketable securities totalled $1.39 billion at March 31, 2000, and Chris-Craft has no debt outstanding. Chris-Craft's 80.0% owned television broadcasting subsidiary, BHC Communications, Inc., invested significant funds in United Paramount Network from UPN's inception in 1994 until March 31, 2000, when BHC sold its remaining 50% interest in the network. Chris-Craft's operating cash flow is generated primarily by its Television Division's core television station group. Broadcast cash flow reflects station operating income plus depreciation and film contract amortization less film contract payments. The relationship between film contract payments and related amortization may vary greatly between periods (payments exceeded amortization by $1.7 million in the three month period ended March 31, 2000 and by $2.2 million in the corresponding 1999 period), and is dependent upon the mix of programs aired and payment terms of the stations' contracts. Reflecting such amounts, broadcast cash flow in the first three months of 2000 increased 40%, while station earnings increased 38%, as explained below. Although broadcast cash flow is often used in the broadcast television industry as an ancillary measure, it is not synonymous with operating cash flow computed in accordance with generally accepted accounting principles, and should not be considered alone or as a substitute for measures of performance computed in accordance with generally accepted accounting principles. Chris-Craft's cash flow additionally reflects earnings associated with its cash and marketable securities, most of which are held by BHC. Such balances rose slightly, to $1.39 billion at March 31, 2000, from $1.36 billion at December 31, 1999. Such $31 million increase reflects first quarter operating cash flow of $54.1 million, which was partially offset by final UPN funding totalling $29.3 million. BHC generates most of Chris-Craft's consolidated cash flow. Parent company obligations consist solely of corporate office expenditures, current and accrued. Most parent company cash flow in recent years has been provided from the receipt by Chris-Craft of its share of special dividends paid by BHC. BHC paid a $2.00 per share special cash dividend in February 2000, aggregating $45.0 million (of which Chris-Craft received $36.0 million), and a $1.00 per share special cash dividend (through which Chris-Craft received $18 million) in each of the previous three years. BHC plans to consider annually the payment of a special dividend. Since April 1990, BHC's Board of Directors has authorized the purchase of up to 7,081,087 Class A common shares. Through December 31, 1998, 6,895,590 shares were purchased for a total cost of $516.5 million. No additional shares have been purchased by BHC since December 31, 1998 and at March 31, 2000, 185,497 Class A common shares remained authorized for purchase. From January 1, 1998 through March 31, 2000, UTV purchased 76,900 of its common shares for a total cost of $7.8 million. No additional shares have been purchased by UTV during the first three months of 2000, and 721,249 shares remain authorized for purchase. Chris-Craft intends to further expand its operations in the media, entertainment and communications industries and to explore business opportunities in other industries. Chris-Craft believes it is capable of raising significant additional capital to augment its already substantial financial resources, if desired, to fund such additional expansion. In July 1994, BHC, along with Viacom Inc.'s Paramount Television Group, formed UPN, a broadcast television network that premiered in January 1995. BHC owned 100% of UPN from its inception through January 15, 1997, when Viacom completed the exercise of its option to acquire a 50% interest in UPN. Since then, BHC and Viacom shared equally in UPN losses and funding requirements through March 31, 2000. On March 31, 2000, BHC sold its remaining 50% interest in UPN to Viacom for $5 million, after Viacom triggered the "buy-sell" provision of the companies' partnership agreement. The $11.3 million pretax loss on the sale, together with BHC's final share of UPN's losses, are reflected in Chris-Craft's 2000 first quarter operating results. BHC has no remaining financial obligation to UPN. Chris-Craft's television stations make commitments for programming that will not be available for telecasting until future dates. At March 31, 2000, commitments for such programming totalled approximately $282.5 million, including $79.0 million applicable to UTV. Chris-Craft's capital expenditures generally have not been material in relation to its financial position, and the related capital expenditure commitments at March 31, 2000 were not material. Chris-Craft stations are continuing the process of converting to digital television (DTV). The conversion requires the purchase of digital transmitting equipment to telecast over newly assigned frequencies. This conversion is expected to take a number of years and will be subject to competitive market conditions. Chris- Craft expects that its expenditures for future film contract commitments and capital requirements for its present business, including the cost to convert to DTV, will be satisfied primarily from operations, marketable securities or cash balances. As set forth in Note 7, Chris-Craft has been named as a defendant (or a "potentially responsible party") in certain actions seeking recovery for environmental damage allegedly related to (i) the activities (discontinued since 1983) of 50% owned Montrose Chemical Corporation of California ("Montrose California") and (ii) the activities of Montrose Chemical Co., a predecessor company to Chris-Craft. As further set forth in Note 7, Chris-Craft does not presently consider liability to be "probable" in any of the Montrose California related matters and believes it has been erroneously identified as a potentially responsible party and is unable to determine at this stage if it could have any liability regarding Montrose Chemical Co. Accordingly, no amount has been reserved in Chris-Craft's financial statements relating to these matters. Quantitative and Qualitative Disclosures about Market Risk - ---------------------------------------------------------- Chris-Craft is subject to certain market risk relating to its marketable securities holdings, which are all held for other than trading purposes. The table below provides information as of March 31, 2000 about the U.S. Government securities which are subject to interest rate sensitivity and the equity securities which are subject to equity market sensitivity. (in thousands) Cost Fair Value ---- ---------- U.S. Government securities $ 985,077 $ 982,609 Equity securities $ 101,480 $ 122,887 Results of Operations - --------------------- Chris-Craft net income in the first quarter of 2000 totalled $2,935,000, or $.08 per share ($.07 per share diluted), compared to net income of $748,000, or $.02 per share ($.02 per share diluted), in the first quarter of 1999. The increase in net income reflects record first quarter operating income, which more than offset the increase in losses attributable to BHC's former interest in United Paramount Network. Operating revenues and operating income for the first quarters ended March 31, 2000 and 1999 are as follows (in thousands): Operating Revenues Operating Income ------------------ ------------------ 2000 1999 2000 1999 -------- -------- -------- -------- Television Division $121,966 $106,495 $ 32,943 $ 23,373 Industrial Division 5,868 4,965 1,305 785 Corporate and other - - (5,423) (4,592) -------- -------- -------- -------- $127,834 $111,460 $ 28,825 $ 19,566 ======== ======== ======== ======== Operating revenues at the Television Division's station group rose 15%, to a first quarter record $119,654,000 from the prior year's $104,423,000, and same station revenues rose 12%. Stations operating in the group's largest markets, New York, Los Angeles and San Francisco, led the strong revenue growth. Station earnings in the quarter accordingly increased 38%, to a first quarter record of $36,815,000, from last year's $26,699,000. Television Division operating income, which additionally reflects non-broadcasting operations and corporate office expenses of BHC and UTV, also established a first quarter record, increasing 41%, to $32,943,000 from $23,373,000. Industrial Division operating income rose 66%, to a first quarter record $1,305,000 from last year's $785,000, reflecting an 18% increase in operating revenues, most of which increase was generated by the Division's plastic flexible film business. Consolidated operating income also set a first quarter record, increasing 47%, to $28,825,000 from $19,566,000 last year. Interest and other income, which consists mostly of amounts earned on Chris-Craft's $1.4 billion consolidated cash and marketable securities holdings, totalled $20,533,000, compared to $18,676,000 in last year's first quarter. BHC's first quarter loss associated with its former interest in UPN totalled $35,696,000, compared to $30,150,000 in the corresponding 1999 period. This year's amount includes an $11,347,000 pretax loss realized on the March 31, 2000 sale to Viacom of BHC's 50% interest in UPN, as well as BHC's final share of UPN's losses. BHC has no remaining financial obligation to UPN. Minority interest reflects the interest of shareholders other than Chris-Craft in the net income of BHC, 80% owned by Chris-Craft at March 31, 2000 and 79.96% owned by Chris-Craft at March 31, 1999, and the interest of shareholders other than BHC in the net income of UTV, 57.9% owned by BHC at March 31, 2000 and 58.5% owned by BHC at March 31, 1999. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ---------------------------------------------------------- The information appearing in Management's Discussion and Analysis under the caption "Quantitative and Qualitative Disclosures about Market Risk" is incorporated herein by this reference. CHRIS-CRAFT INDUSTRIES, INC. ---------------------------- PART II. OTHER INFORMATION -------------------------- Item 6. Exhibits and Reports on Form 8-K. --------------------------------- (a) The following exhibits are filed herewith: Exhibit No. Description ----------- ----------- 27 Financial Data Schedule (b) No report on Form 8-K was filed during the quarter for which this report is filed. SIGNATURE --------- 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. CHRIS-CRAFT INDUSTRIES, INC. ---------------------------- (Registrant) By: /s/ JOELEN K. MERKEL ---------------------------- Joelen K. Merkel Senior Vice President and Treasurer (Principal Accounting Officer) Date: May 11, 2000 EXHIBIT INDEX Incorporated by Reference to: Exhibit No. Exhibit - ------------- ----------- ------- 27 Financial Data Schedule EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10Q DATED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1000 3-MOS DEC-31-2000 MAR-31-2000 284977 1105496 93536 4760 2733 1638966 184984 118806 2322849 289700 0 0 5678 18211 1424502 2322849 5868 127834 3483 99009 0 0 0 13662 6000 2935 0 0 0 2935 .08 .07
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