| Petersen Companies, Inc., The | |||
| Ticker: | PTN | 6420 Wilshire Boulevard | |
| Exchange: | New York Stock Exchange | Los Angeles, CA 90048 | |
| Industry: | Manufacturing (SIC Code 2721) | (213) 782-2000 | |
| # of Employees: | 600 | ||
| Type of Shares: | Class A Common Shares | Filing Date: | 8/7/97 | |
| U.S. Shares: | 7,000,000 | Offer Date: | 10/1/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $15.00 - $17.00 | |
| Primary Shares: | 7,000,000 | Offer Price: | $17.50 | |
| Secondary Shares: | 0 | Gross Spread: | $1.18 | |
| Offering Amount: | $112,000,000 | Selling: | $0.72 | |
| Expenses: | - | Reallowance: | $0.10 | |
| Shares Out After: | - |
| Manager | Tier | Phone |
| Morgan Stanley Dean Witter Discover & Co. | Lead Manager | (212) 761-5900 |
| Alex. Brown & Sons Incorporated | Co-manager | (410) 895-2700 |
| Donaldson, Lufkin & Jenrette Securities Corp. | Co-manager | (212) 371-0641 |
| Goldman, Sachs & Co. | Co-manager | (212) 902-5959 |
| Issuer's Law Firm: | Kirkland & Ellis |
| Bank's Law Firm: | O'Melveny & Meyers |
| Auditor: | Ernst & Young |
| Registrar/Transfer Agent: | BankBoston |
Dollar amounts in U.S. millions except for per share data | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 6/30/97 | 6/30/97 | ||||
| Revenue: | $120.14 | Assets: | $503.59 | ||
| Net Income: | -$4.93 | Curr Assets: | |||
| EPS: | Liabilities: | $353.11 | |||
| Prior EPS: | Curr Liabilities: | ||||
| Cash Flow/Oper: | Equity: | $150.48 | |||
| Cash Flow/Fin: | Cash: | $6.92 | |||
| Cash Flow/Inv: | |||||
| Business Description |
| The company is a leading publisher of specialty interest magazines with a diverse portfolio of 78 publications, including 25 monthly, 11 bimonthly and 42 single issue or annual publications. According to Veronis, Suhler and Associates ("VSA"), special-interest magazine publishing is the fastest growing sector of the consumer magazine industry. The special-interest nature of the Company's magazines creates an opportunity for its advertisers to efficiently reach their target audience, as the Company's enthusiast readers value special-interest magazines for both their product information as well as editorial content. The Company's internationally-recognized magazines include: (i) Motor Trend, which is a leading authority on new domestic and foreign automobiles and, with its increase in rate base (expected paid circulation on which advertising rates are based) to 1.15 million effective January 1998, is anticipated to be the world's leading automotive magazine in terms of paid circulation; (ii) Teen, which has the largest paid circulation of any of the Company's magazines with paid circulation of more than 1.8 million as of the June 1997 issue; and (iii) Hot Rod, which is one of the largest paid circulation automotive magazines in the world with a paid circulation of over 800,000 as of the June 1997 issue. The Company's other core publications are Petersen's 4 Wheel & Off-Road, Guns and Ammo, Skin Diver, Sport, Car Craft, Petersen's Hunting, Motorcyclist, Circle Track and Racing Technology, Petersen's Photographic, Sport Truck, Dirt Rider and Chevy High Performance. The Company's 15 core magazines average over 30 years in publication. |
| Competition |
| The magazine publishing business is highly competitive. The Company principally competes for advertising and circulation revenues with publishers of other special-interest consumer magazines with similar editorial content as those published by the Company. Such competitors include: K-III Communications Company, which publishes Seventeen, Automobile and Truckin'; Hachette Filipacchi Magazines, Inc., which publishes Road and Track, Car & Driver, Popular Photography and Cycle World; Gruner + Jahr Publishing, which publishes YM; Rodale Press Inc., which publishes Bicycling and Rodale's Scuba Diving and The Times Mirror Company, which publishes Outdoor Life and Field & Stream. Certain of the Company's competitors are larger and have greater financial resources than the Company. Most of the Company's magazines face competition within each of their respective markets from one to three other publications. The Company believes that it competes with other special-interest publications based on the nature and quality of its magazines' editorial content. Of the Company's 15 core magazines, nine are ranked first in their respective markets based on annual circulation in 1996, including two magazines that were the only national magazines published in their respective markets. In addition to other special-interest magazines, the Company also competes for advertising revenues with general-interest magazines and other forms of media, including broadcast and cable television, radio, newspaper, direct marketing and electronic media. In competing with general-interest magazines and other forms of media, the Company relies on its ability to reach a targeted segment of the population in a cost-effective manner. |
| Business Plan |
| The company's business and operating strategy is designed to provide strong revenue growth and increase profitability by improving the performance of existing titles, launching and acquiring additional publications and developing ancillary revenue streams by capitalizing on its internationally-recognized brands and efficient operations. The key elements of this strategy include: (I) Cross-Sell Advertising and Expand Advertiser Base, (ii) Increase Direct Subscription Sales and Magazine Prices, (iii) Develop Ancillary Revenue Opportunities, (iv) Develop and Launch New Titles, (v) Selectively Acquire Titles, (vi) Develop Business-to-Business Opportunities and (vii) Continue to Identify Operating Improvements. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to repay certain outstanding indebtedness under the company's senior credit facility, to redeem a portion of the Preferred Units and to redeem a portion of the senior subordinated notes issued by the company's operating subsidiary. |
| Name of Shareholder | % Owned Before | % Owned After |
| John R. Willis | 46.20% | |
| Daniel H. Blumenthal | 46.20% | |
| Avy H. Stein | 46.20% |
| Officer Name | Title | Age |
| James D. Dunning, Jr. | Chairman of the Board and Chief Executive Officer | 50 |
| Richard S. Willis | Executive Vice President, Chief Financial Officer and Director | 36 |
| James Guthrie | Executive Vice President, Marketing and Sales | 56 |
| John Dianna | President, Automotive Performance Group | 54 |
| Neal Vitale | President, Chief Operating Officer and Director | 43 |
| Lee Kelley | President, Motor Trend Group | 55 |
| Justin McCormack | President, Petersen Enterprises | 37 |
| Charlotte Anne Perkins | President, Sport Group | 42 |
| Amy P. Wilkins | President, Youth Group | 34 |
| Laurence H. Bloch | Vice Chairman of the Board | 43 |
| D. Claeys Bahrenburg | Vice Chairman of the Board and Chairman of the Executive Committee | 50 |
| Michael Borchetta | Vice President, Circulation | 32 |
| Richard P. Lague | Vice President, Executive Publisher, Motorcycle/Bicycle Group | 53 |
| Ken Elliott | Vice President, Executive Publisher, Outdoor Group | 57 |
| Paul J. Tzimoulis | Vice President, Executive Publisher, Photo/Marine Group | 60 |