Television digest with electronic reports (Jan-Dec 1954)

15 Financial & Trade Notes: abc div. of American Broadcasting-Paramount Theatres Inc. increased gross income from $49,734,000 in 1952 to $54,758,000 in 1953, year of ABC’s merger with UPT (Feb. 9, 1953), but it did not show profit for 1953 due to “high costs of program development, increased advertising, improvement of physical facilities and the difficulty of clearing stations to carry network programs.” Annual AB-PT report, released this week, does not break down ABC Div. profit-&-loss, does show consolidated net profit of $8,996,000 ($4,480,000 from all operations, $4,516,000 from capital gains, latter principally from $6,000,000 sale of WBKB, Chicago, to CBS). Profit compares with $4,548,000 fi’om operations and $1,379,000 from capital gains in 1952, when company operated theatres only. Total income in 1953 was $172,196,000 compared (proforma) with $167,417,000 in 1952. Pres. Leonard Goldenson states that theatre operating income and earnings for 1953 were higher on a theatre-by-theatre basis than in 1952, though operating income of $114,926,000 was down slightly from 1952 due to fewer theatres and fiscal 1953’s one week less of operations. During the year, AB-PT disposed of its interests in 39 theatres; it is required to divest itself of 65 more by Sept. 9, 1954 under Dept, of Justice consent degree. At end of 1953, it owned 669 in whole or part. Goldenson estimated $6,000,000 will have been spent by end of this year to equip about 260 theatres for 3-D and wide screen. ABC capital expenditures of $1,344,000 represented improved physical facilities, including outlays for power increases for its own 5 TV stations, “Rebound” in theatre business in certain of the larger TV-saturated markets was noted. But, Goldenson states : “A number of theatres in the smaller towns, particularly in the South, are now feeling the effects of TV for the first time and the grosses are being adversely affected. Based on our experience in other areas, we feel that, as the novelty of TV wears off, a like upward trend will take place in these areas as well. Company’s working capital at Jan. 2, 1954 was $25,462,000, down from $27,034,000 Jan. 3, 1953. During year, $9,988,000 was applied to retirement of term debt, including $8,201,000 of the total ABC debt of $10,567,000. Longterm debt at end of year amounted to $40,512,000. * « * « Steady growth of Hazeltine Corp. is again reflected in annual report for 1953, released March 19, showing net income of $2,232,105 ($3.17 per share on 700,000 shares of common outstanding) on gross income of $10,057,032 from sales, less costs, royalties, engineering services and miscellaneous items. This compares with net of $2,006,790 ($2.86) on income of $9,273,189 in 1952, $1,459,490 ($2.08 on 350,000 shares) on $5,090,090 in 1951, $1,428,431 ($2.04 on 350,000 shares) on $2,783,741 in 1950. Total sales volume isn’t shown. Consolidated earned surplus at end of 1953 was $9,053,106 vs. .$8,017,400 in 1952. Sprague Electric Co. reports 1953 sales of $46,778,6.33, new record, and net profit of $2,888,281 ($3.75 a share) vs. $44,449,891 & $3,136,853 ($4.18) in 1952. Report notes military volume somewhat lower, industrial electronics up, TV-radio markets modestly gaining — and states company does not expect color TV sales will be much of a factor in its business this year. We.ston Electrical Instrument Corp. reports net income of $1,025,930 ($2.40 a share) on $32,409,838 sales in 1953 vs. $930,372 ($2.71) on $27,881,458 in 1952. Sign of the booming record trade: Capitol Records Inc. jumped to $16,914,230 sales & $690,154 earnings ($1.43 a share) in 1953 from $14,738,341 & $500,993 ($1.01) in 1952. RCA and GE have entered agreement whereby RCA continues to have right, until Dec. 31, 1962, to grant licenses to others for manufacture of TV-radio apparatus under GE inventions made on or before Dec. 31, 1954. These include patents on inventions useful in radio, black&-white and color TV, transistors. Said GE: “This, in effect, establishes a cutoff date for sublicensing rights on GE inventions made before Dec. 31, 1954, provided RCA by a 1932 agreement known as the A-1 agreement. A recent interpretation by the Federal court of Wilmington, Del. concluded that under the A-1 agreement, RCA’s rights to use sublicenses on the GE patents involved would continue for the life of each patent. In some cases this could have continued the sublicensing right for 20 years or possibly longer. The new agreement limits the sublicensing rights and the sublicenses themselves to 8 years beyond Dec. 31, 1954.” Capper Publications Inc. filed application with SEC March 24 to register $4,000,000 in 5 & 10-year bonds, money to be used to pay off other bonds, for working capital and “to complete a TV station” — presumably its WIBW-TV, Topeka (Ch. 13), which went on air last Nov. 10. Founded by late Sen. Capper, company publishes various farm journals, the dailies Topeka Capital and Kansan & Kansas City Kansan, owns radios WIBW, Topeka, and KCKN, Kansas City, Kan. Avco Mfg. Corp. net income for 3 months ended Feb. 28 fell to $1,612,199 (17^ a common share) from $2,860,241 (31<?) same period year ago. Consolidated net sales were $94,642,406 vs. $116,666,203. “Unsettled” conditions in appliance field were blamed, though chairman-pres. Victor Emanuel said electronic business has been stimulated by new Crosley Super V table set at $140, $160 & $160 (see Topics & Trends). Chesapeake Industries, Inc, parent of Pathe Laboratories, major film processing concern which owns Pathecolor, earned net profit of $1,031,080 on sales of $20,307,732 during 1953, with film processing accounting for sales of $7,926,896. Chesapeake sold Eagle Lion Studio in Hollywood last Dec. for $1,100,000. TV will never hurt magazines and newspapers seriously, according to David P. Crane, director of media coordination for Benton & Bowles. Speaking at this week’s convention of Assn, of National Advertisers in Hot Springs, Va., he gave these reasons: (1) Printed media’s “long life in the home.” (2) The magazine is “a package of carefully edited, thoughtfully-balanced editorial material, plus advertising,” as contrasted with “bits and pieces” of TV fare that viewer elects. He conceded, nevertheless, that TV is “a dramatic sales medium” and that expenditures for other media will be tailored to make adequate use of TV. Really, comrade, it’s not that bad. Moscow Radio describes “a typical scene in an American home” as follows: “Lights are out. The whole family is gathered around a TV set. They are watching a usual show — a drama at the 99th floor of a New York skyscraper. A maniac murders a woman and throws her body through the window. A sadistic laugh of the maniac is heard . . . There is commotion among the viewers. The lady of the house faints, her husband calls a doctor. Children are crying . . . Blood, blood and more blood — this is the U. S. daily TV program.” French radio tax was raised from $3.66 to $4.15 a year by National Assembly to help finance 4-year plan for construction of 38 new TV stations. TV receivers are taxed $8.50 a year. Licensed TV sets in Britain totaled 3,105,644 as of Jan. 31, increase of 148,798 in Jan. — largest monthly rise in history of British TV.