The company got a step closer to launching its initial public offering today by setting the number of shares to be sold and the proposed offering price. The company plans to sell 25.8 million shares of common stock, at a price of between $14 and $17 per share, according to a filing today with the Securities and Exchange Commission.
The company plans to be listed on the New York Stock Exchange under the ticker "ZD." Of the shares being offered, 20.64 million will be offered in the United States and Canada, while 5.16 million shares will be offered elsewhere.
Upon completion of the offering, affiliates of the company will retain about 74.2 percent of the outstanding voting power in the company.
Also, in a separate filing, Ziff-Davis said it will issue $250 million in senior notes, due in 2008.
In 1997, Ziff had revenue of $1.15 billion, primarily derived from advertising sales, which represented 51.9 percent of the company's total revenue; trade shows and conferences accounted for 23.5 percent; circulation generated 13.1 percent; and other components, including online content, market research, and revenue from joint ventures and licenses, supplied 11.5 percent.
The company posted a net loss of $71.2 million for 1997, and expects its net loss for the first quarter of 1998 to increase by between 15 percent and 20 percent, as compared with the first quarter of 1997.
Meanwhile, Ziff-Davis expects to report earnings that are about flat with the first quarter of 1997, when it reported $224.3 million in revenue.
Revenue from publishing operations is expected to decline about 5 percent, due to the absence of over $12 million in revenue from Macuser and MacWeek magazines, which were transferred in October 1997 to a 50/50 joint venture with International Data Group (IDG) and are no longer consolidated in the company's results, according to the document.
The unfavorable results primarily are due to a lower level of advertising in business publications, which have higher profit margins than consumer publications or the Internet business, coupled with $3.4 million in one-time costs for office relocations and $1.8 million in expenses incurred in launching two new publications, according to the filing.
More than offsetting the decline in publishing revenue will be an increase of about 75 percent in revenue from the company's trade shows and conferences operations, primarily the result of earlier production of two events during the first quarter of 1998 that had been held in the second quarter of 1997.
Ziff-Davis said that no single advertiser contributed more than 3 percent of the company's advertising revenue during any of the last three years. However, the top 20 advertisers accounted for 32 percent of total advertising revenue for 1997.
Historically, the financing requirements of the company have been funded through intercompany loans and advances, totaling $2.5 billion--of which $126 million was current--as of December 31, 1997.
Also worthy of note: Ziff is getting ready to launch ZDTV: Your Computer Channel, a 24-hour cable television channel and integrated Web site focused exclusively on computers, technology, and the Internet. It is expected to be launched in the first half of 1998.