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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 31, 1996
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Garden State Newspapers, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 22-2675173
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1560 Broadway, Suite 1450, Denver, CO 80202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 837-0886
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N/A
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(Former name or former address, if changed since last
report.)
Amendment No. 1
The Company's current report on Form 8-K, dated November 13, 1996, is
hereby amended and supplemented as follows.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following Financial Statements and Pro Forma Financial Information are
hereby filed as a part of this report.
(a) Financial Statements of Business Acquired
(1) Audited combined financial statements of the operations and
the assets acquired and liabilities assumed in conjunction
with the October 31, 1996, acquisition of the Pasadena
Star-News, Whittier Daily Review, San Gabriel Valley Tribune,
Times Standard, The Evening Sun and various related
publications for the nine months ended September 28, 1996 and
years ended December 30, 1995 and December 31, 1994,
respectively.
(b) Pro Forma Financial Information (Unaudited)
(1) Pro forma condensed consolidated balance sheet as of
September 30, 1996.
(2) Pro forma condensed consolidated statement of operations for
the three months ended September 30, 1996 and the year ended
June 30, 1996.
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GARDEN STATE NEWSPAPERS, INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The accompanying unaudited pro forma consolidated statements of operations for
the three months ended September 30, 1996, and the year ended June 30, 1996,
give effect to the acquisition of substantially all the assets and liabilities
used in publishing the Pasadena Star-News, Whittier Daily News, San Gabriel
Valley Tribune, Times- Standard, The Evening Sun and various related
publications, collectively referred to as the "Acquisition," as if the
Acquisition had occurred on July 1, 1996 and July 1, 1995, respectively.
These pro forma statements are not necessarily indicative of the future
operations or of the consolidated results of operations had the Acquisition
actually taken place on July 1, 1996 or July 1, 1995. The pro forma financial
information should be read in conjunction with the Company's historical
financial statements and notes thereto appearing in the Company's Forms 10-K
and 10-Q for the periods ending June 30, 1996 and September 30, 1996,
respectively.
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GARDEN STATE NEWSPAPERS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 1996
(Amounts in Thousands)
ASSETS Acquisition
and
As Pro Forma
Reported Adjustments Pro Forma
------------ ------------ ------------
CURRENT ASSETS
Cash and cash equivalents ..................................... $ 2,630 $ 4 $ 2,634
Accounts receivable, less allowance
for doubtful accounts ........................................ 27,496 6,001 33,497
Inventories of newsprint and supplies ......................... 4,347 1,153(a) 5,500
Prepaid expenses and other assets ............................. 3,906 207 4,113
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TOTAL CURRENT ASSETS ...................................... 38,379 7,365 45,744
PROPERTY, PLANT AND EQUIPMENT
Land .......................................................... 5,184 2,678(b) 7,862
Buildings and improvements .................................... 32,702 6,935(b) 39,637
Machinery and equipment ....................................... 89,408 28,852(b) 118,260
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Total Property, Plant and Equipment ....................... 127,294 38,465 165,759
Less accumulated depreciation and amortization ................ (52,274) -- (c) (52,274)
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Net Property, Plant and Equipment ......................... 75,020 38,465 113,485
OTHER ASSETS
Investment in partnership ..................................... 6,091 -- 6,091
Subscriber accounts, net of accumulated
amortization ................................................. 42,565 16,200(b) 58,765
Excess of cost over fair value of net assets acquired,
net of accumulated amortization .............................. 65,252 75,192(d) 140,444
Covenants not to compete and other identifiable
intangible assets, net of accumulated amortization ........... 8,025 -- 8,025
Other ......................................................... 1,896 -- 1,896
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TOTAL OTHER ASSETS ........................................ 123,829 91,392 215,221
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TOTAL ASSETS .................................................... $ 237,228 $ 137,222 $ 374,450
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See notes to unaudited pro forma financial information.
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GARDEN STATE NEWSPAPERS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 1996
(In Thousands)
Acquisition
and
As Pro Forma
Reported Adjustments Pro Forma
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LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Trade accounts payable .................... $ 5,183 $ 449 $ 5,632
Accrued liabilities ....................... 17,656 4,470 (e) 22,126
Unearned income ........................... 6,984 2,353 9,337
Income taxes .............................. 488 -- 488
Current portion of long-term debt and
capital lease obligation ................ 11,237 10,000 (f) 21,237
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TOTAL CURRENT LIABILITIES ............. 41,548 17,272 58,820
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATION ................................. 199,204 119,950 (g) 319,154
OTHER LIABILITIES ........................... 6,320 -- 6,320
DEFERRED INCOME TAXES ....................... 11,686 -- 11,686
SHAREHOLDERS' DEFICIT
Common stock .............................. 1 -- 1
Additional paid in capital ................ 78,570 -- 78,570
Deficit ................................... (100,101) -- (100,101)
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TOTAL SHAREHOLDERS' DEFICIT ............. (21,530) -- (21,530)
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TOTAL LIABILITIES AND SHAREHOLDERS'
DEFICIT ................................. $ 237,228 $ 137,222 $ 374,450
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See notes to unaudited pro forma financial information.
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GARDEN STATE NEWSPAPERS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended September 30, 1996
(In Thousands)
Acquisition
and
As Pro Forma
Reported Adjustments Pro Forma
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OPERATING REVENUES .......................... $ 61,080 $ 16,974 $ 78,054
COST AND EXPENSES
Cost of sales ............................. 23,568 5,560(a)(c)(e) 29,128
Selling, general, and administrative ...... 26,518 6,957(b)(c)(d) 33,475
Depreciation and amortization ............. 5,138 1,613(f) 6,751
Interest expense .......................... 6,334 2,477(g) 8,811
Other, (net) ............................ 207 -- 207
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TOTAL COST AND EXPENSES ............... 61,765 16,607 78,372
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INCOME (LOSS) BEFORE INCOME
TAXES ..................................... (685) 367 (318)
INCOME TAX EXPENSE .......................... (53) (16)(h) (69)
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NET INCOME (LOSS) ........................... $ (738) $ 351 $ (387)
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See notes to unaudited pro forma financial information.
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GARDEN STATE NEWSPAPERS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended June 30, 1996
(In Thousands)
Acquisition
and
As Pro Forma
Reported Adjustments Pro Forma
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OPERATING REVENUES .......................... $ 245,430 $ 68,912 $ 314,342
COST AND EXPENSES
Cost of sales ............................. 98,469 28,700(a)(c)(e) 127,169
Selling, general, and administrative ...... 102,238 24,611(b)(c)(d) 126,849
Depreciation and amortization ............. 21,841 6,453(f) 28,294
Interest expense .......................... 27,414 9,909(g) 37,323
Other, (net) ............................ 4,511 -- 4,511
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TOTAL COST AND EXPENSES ............... 254,473 69,673 324,146
GAIN ON SALE OF NEWSPAPER PROPERTY .......... 8,291 -- 8,291
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LOSS BEFORE INCOME TAXES .................... (752) (761) (1,513)
INCOME TAX BENEFIT .......................... 2,012 -- (h) 2,012
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NET INCOME (LOSS) ........................... $ 1,260 $ (761) $ 499
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See notes to unaudited pro forma financial information.
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GARDEN STATE NEWSPAPERS, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
NOTE 1: UNAUDITED PRO FORMA BALANCE SHEETS
(a) Adjust newsprint inventory to the Company's historical cost
during the applicable period.
(b) Record property, plant and equipment and subscriber lists at
their estimated fair market value at the date of acquisition.
(c) Eliminate historical accumulated depreciation on the plant and
equipment acquired.
(d) Record the excess of cost over the fair market value of assets
acquired.
(e) Accrued liabilities has been adjusted to accrue the estimated
organization, closing and other cost associated with completing
the Acquisition.
(f) Record the current portion of long-term debt incurred in the
Acquisition.
(g) Record long-term debt incurred in the Acquisition, net of the
current portion.
NOTE 2: UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
(a) Adjust cost of sales to reflect the newsprint saving of
adjusting the web width of the presses to 50 inches and to
reflect the Company's historical cost of newsprint.
(b) Pension expense was eliminated as the pension plan was not
acquired and no new defined benefit pension plan will be
installed at any of the acquired newspapers.
(c) Certain personnel who were employed by the newspapers prior to
acquisition were not hired or replaced by Garden State
subsequent to the acquisition. Accordingly, the cost of
employing these individuals has been eliminated.
(d) Certain excessive executive bonuses have been eliminated.
(e) Effective with the acquisition certain cost savings have been
implemented with respect to the acquired newspapers including
the cost of acquiring plates, comics, TV books and Sunday
magazines. The cost savings have been reflected as a pro forma
adjustment.
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GARDEN STATE NEWSPAPERS, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION--CONTINUED
NOTE 2: UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS--CONTINUED
(f) Depreciation and amortization expense of the acquired assets has
been adjusted to reflect the fair market value of the acquired
assets and the useful lives assigned to these assets.
(g) Interest expense has been adjusted to reflect the borrowings and
rates of debt utilized in the acquisition of the assets.
(h) Income taxes reflect the estimated state taxes that would be due
if Garden State had owned the acquired newspapers during the pro
forma periods presented. Historical income taxes have been
eliminated.
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SIGNATURES
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 hereunto duly authorized.
GARDEN STATE NEWSPAPERS, INC.
Date: January 13, 1997 By: /s/ Joseph J. Lodovic, IV
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Joseph J. Lodovic, IV
Executive Vice President,
Chief Financial Officer
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EXHIBIT INDEX
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99.1 Combined Financial Statements
Acquired Newspapers (Formerly Divisions of
Thomson Newspapers Inc.)