-----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, UWrcQpMs7+XKRuJFNVqspAguNtCWqS9fnwMoFJ+sBSU455q9BiMxmhVJVbqORjjQ iVM91jGSda1v3jymcXIkiA== 0000898430-96-002043.txt : 19960517 0000898430-96-002043.hdr.sgml : 19960517 ACCESSION NUMBER: 0000898430-96-002043 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLARK DICK PRODUCTIONS INC CENTRAL INDEX KEY: 0000805370 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 232038115 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15192 FILM NUMBER: 96567333 BUSINESS ADDRESS: STREET 1: 3003 W OLIVE AVE CITY: BURBANK STATE: CA ZIP: 91510 BUSINESS PHONE: 818-841-3003 MAIL ADDRESS: STREET 1: 3003 W. OLIVE AVENUE CITY: BURBANK STATE: CA ZIP: 91505 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ( X ) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1996 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 No. 0-15192 DICK CLARK PRODUCTIONS, INC. ---------------------------- (Exact name of registrant as specified in its charter) DELAWARE 23-2038815 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3003 West Olive Avenue, Burbank, California 91505-4590 ------------------------------------------------------ (Address of principal executive offices, including zip code) (818) 841-3003 --------------- (Registrant's telephone number, including area code) 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 ----- ----- Below are indicated the number of shares outstanding of each of the registrant's classes of common stock as of May 13, 1996. Class Outstanding at May 13, 1996 - ----------------------------------- --------------------------- Common Stock, $0.01 par value 7,531,500 Class A Common Stock, $0.01 par value 750,000 ITEM 1. dick clark productions, inc. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS
(Unaudited) March 31, June 30, 1996 1995 ----------- ----------- ASSETS - ------ Cash and cash equivalents $ 6,293,000 $ 3,297,000 Marketable securities 31,008,000 25,769,000 Accounts receivable 2,262,000 2,303,000 Program costs, net 3,250,000 4,306,000 Prepaid royalty 3,128,000 3,128,000 Leasehold improvements and equipment 9,573,000 7,152,000 Goodwill and other assets 1,825,000 2,353,000 ----------- ----------- Total assets $57,339,000 $48,308,000 =========== =========== LIABILITIES & STOCKHOLDERS' EQUITY - ---------------------------------- Accounts payable $ 4,600,000 $ 4,109,000 Accrued residuals and participants 2,708,000 1,438,000 Production advances and deferred revenues 4,200,000 4,097,000 Current and deferred income taxes 2,677,000 348,000 ----------- ----------- Total liabilities 14,185,000 9,992,000 Commitments and contingencies 0 0 Minority interest 412,000 542,000 Stockholders' equity: Class A common stock, $.01 par value, 2,000,000 shares authorized 750,000 shares outstanding 7,000 7,000 Common stock, $.01 par value, 20,000,000 shares authorized 7,528,500 shares outstanding 76,000 76,000 Additional paid-in capital 7,790,000 7,790,000 Retained earnings 34,869,000 29,919,000 ----------- ----------- Total stockholders' equity 42,742,000 37,792,000 =========== =========== Total liabilities & stockholders' equity $57,339,000 $48,308,000 =========== ===========
The accompanying notes are an integral part of these consolidated balance sheets. dick clark productions, inc. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED March 31, March 31, -------------------------- ------------------------- 1996 1995 1996 1995 ----------- ----------- ----------- ------------ Gross revenues $28,113,000 $16,190,000 $55,059,000 $34,510,000 Costs related to revenue 21,016,000 10,861,000 45,711,000 27,031,000 ----------- ----------- ----------- ----------- Gross profit 7,097,000 5,329,000 9,348,000 7,479,000 General and administrative expenses 1,007,000 1,163,000 3,195,000 3,252,000 Minority interest expense 51,000 26,000 97,000 77,000 Interest and other income (527,000) (366,000) (1,387,000) (1,156,000) ----------- ----------- ----------- ----------- Income before provision for income taxes 6,566,000 4,506,000 7,443,000 5,306,000 Provision for income taxes 2,186,000 1,577,000 2,493,000 1,857,000 ----------- ----------- ----------- ----------- Net income $ 4,380,000 $ 2,929,000 $ 4,950,000 $ 3,449,000 =========== =========== =========== =========== Net income per share $ 0.53 $ 0.35 $ 0.60 $ 0.42 =========== ============ ============ =========== Weighted average number of shares outstanding 8,278,500 8,278,000 8,278,500 8,277,000 =========== ============ ============ ===========
The accompanying note is an integral part of these consolidated statements. dick clark productions, inc. CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
FOR THE NINE MONTHS ENDED March 31, 1996 1995 ------------ ------------ Cash flows from operating activities Net income $ 4,950,000 $ 3,449,000 Adjustments to reconcile net income to net cash provided by operations Amortization expense 35,912,000 16,194,000 Depreciation expense 784,000 734,000 Investment in program costs (34,744,000) (17,023,000) Minority interest, net (112,000) (472,000) Disposals of leasehold improvements and equipment 64,000 3,000 Changes in assets and liabilities Accounts receivable 41,000 908,000 Prepaid Royalty 0 (3,128,000) Goodwill and other assets 416,000 (84,000) Accounts payable, accrued residuals and participations 1,761,000 (2,171,000) Production advances and deferred revenue 103,000 1,285,000 Current and deferred income taxes payable 2,329,000 1,552,000 ------------ ------------ Net cash provided by operations 11,504,000 1,247,000 ------------ ------------ Cash flows from investing activities Purchases of marketable securities (12,496,000) (6,948,000) Sales of marketable securities 7,257,000 7,315,000 Capital expenditures (3,269,000) (475,000) ------------ ------------ Net cash used for investing activities (8,508,000) (108,000) ------------ ------------ Cash flows from financing activities Exercise of stock options 0 7,000 ------------ ------------ Net cash provided from financing activities 0 7,000 ------------ ------------ Net increase (decrease) in cash and cash equivalents 2,996,000 1,146,000 Cash and cash equivalents at beginning of the year 3,297,000 4,336,000 ------------ ------------ Cash and cash equivalents at end of the period $ 6,293,000 $ 5,482,000 ============ ============ Supplemental Disclosures of Cash Flow Information: Cash paid during the year for income taxes $ 134,000 $ 305,000 ============ ============
The accompanying note is an integral part of these consolidated statements. DICK CLARK PRODUCTIONS, INC. NOTE TO FINANCIAL STATEMENTS ---------------------------- (Unaudited) 1. Basis of Financial Statement Presentation ----------------------------------------- The consolidated financial statements of dick clark productions, inc. and subsidiaries (collectively the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information. Interim financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete year-end financial statements. The accompanying financial statements should be read in conjunction with the more detailed financial statements and related footnotes for the fiscal year ended June 30, 1995, as included in the Company's 1995 Annual Report on Form 10-K (the "Annual Report") filed with the Securities and Exchange Commission. A signed independent accountant's report regarding the June 30, 1995 balance sheet is included on page 31 of the Annual Report. Significant accounting policies used by the Company are summarized in Note 2 to the financial statements included in the Annual Report. In the opinion of management, all adjustments (which include only recurring normal adjustments) required for a fair presentation of the financial position of the Company as of March 31, 1996, and the results of its operations and cash flows for the periods ended March 31, 1996 and 1995 respectively, have been made. Operating results for the three-month and nine-month periods ended March 31, 1996, are not necessarily indicative of the operating results for the entire fiscal year. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL - ------- The Company's business activities consist of two business segments: entertainment operations and restaurant operations. The entertainment segment contributed approximately 89% and 83% of the Company's consolidated revenues for the three-month and nine-month periods ending March 31, 1996, respectively. A majority of the Company's revenues are derived from its entertainment related businesses which primarily involve the production and licensing of television programming. The Company's television programming is generally licensed to the major television networks, cable networks, domestic and foreign syndicators, and advertisers. The Company also receives production fees from program buyers who retain ownership of the programming. In addition, the Company derives revenues from the rerun broadcast of its programs on network and cable television and in foreign markets, as well as the licensing of its media and film archives for use in feature films, television movies, etc. The Company, on a limited basis, also develops theatrical films in association with established studios that can provide financing necessary for production. License fees for the production of television programming are paid to the Company pursuant to license agreements during production and upon delivery of the programs or shortly thereafter. Revenues from network and cable television license agreements are recognized for financial statement purposes upon delivery of each program or in the case of a series, each episode. Revenues from the rerun broadcast of television programming (both domestic and foreign) are recognized for each program when a particular program becomes contractually available for broadcast. Production costs of television programs are capitalized and charged to operations on an individual basis in the ratio that the current year's gross revenues bear to management's estimate of the total revenues for each program from all sources. Substantially all television production costs are amortized in the initial year of delivery except for television movies where there would be anticipated future revenues earned from rerun and other exploitation. Successful television movies can achieve substantial revenues from rerun broadcasts in both foreign and domestic markets after the initial broadcast, thereby allowing a portion of the production costs to be amortized against future revenues. Distribution costs of television programs are expensed in the period incurred. Depending on the type of contract, revenues for dick clark corporate productions, inc. are recognized when the services are completed for a live event, when a tape or film is delivered to a customer, or when services are completed pursuant to a particular phase of a contract which provides for periodic payments. Costs for corporate event productions are capitalized and expensed as revenues are recognized. RESULTS OF OPERATIONS --------------------- Revenues for the three months and nine months ended March 31, 1996, were $28,113,000 and $55,059,000, compared to $16,190,000 and $34,510,000 for the comparable periods in the previous fiscal year. The increase in revenues for the three-month period ended March 31, 1996 is primarily attributable to the delivery of a movie for television, which did not occur in the corresponding quarter last year. The Company also recognized increased revenue associated with the television series "Tempestt" (which debuted in September 1995), as well as increased revenues associated with the Company's specials productions business due in part to an improved contract for one of the Company's annual television specials. The increase in revenues for the nine-month period ended March 31, 1996 is primarily attributable to increased revenue associated with the television series "Tempestt" as well as increased revenues associated with the Company's corporate productions business. The increase is further explained by the delivery during the year of a movie for television which did not occur in the corresponding period last year. Gross profit for any period is a function of the profitability of the individual programs and projects delivered during that period. Gross profit as a percentage of revenues decreased for the three-month and nine-month period ended March 31, 1996, as compared to the corresponding period in the previous fiscal year, primarily as a result of lower profitability as a percentage of sales of the television talk show series "Tempestt" as compared to the Company's other television programming. This syndicated 5-day per week talk show is in its first year of release. Talk show series in their first year of release typically earn small gross profits as a percentage of sales. Generally when talk show series have been broadcast for a number of years they can garner higher profitability. The decrease in gross profits as a percentage of sales is further explained by one project of dick clark corporate productions which contributed lower gross profits as a percentage of the contracted revenues due to the size and nature of the project. As a general industry rule, projects of this size and nature generate lower gross profit percentages. LIQUIDITY AND CAPITAL RESOURCES ------------------------------- The Company has funded its working capital requirements for television production primarily through installment payments from license fees from the television networks and minimum guaranteed distribution payments from independent distributors. The Company has generally been able to cover the costs of its television programming through license or syndication fees and has incurred no significant capital expenditure commitments. The Company intends to continue to accelerate the expansion of its restaurant business through the opening of additional American Bandstand Grill restaurants. The Company expects that the opening of additional restaurants will be financed from available capital and alternative financing methods such as joint ventures and limited recourse borrowings. The Company opened a restaurant in Cincinnati, Ohio in March of 1996 at a total capital investment of $3,180,000 which has been funded by the Company. Additional locations will be constructed and opened in fiscal 1997. Capital requirements for the Company's corporate events business are anticipated to be met by production revenues. The Company expects that its available capital base and cash generated from operations will be more than sufficient to meet its cash requirements for the foreseeable future. The Company has no outstanding bank borrowings or other borrowed indebtedness and had cash and marketable securities (principally consisting of government securities) of approximately $37,301,000 as of March 31, 1996. PART II. OTHER INFORMATION Item 1. None Item 2. None Item 3. None Item 4. Not Applicable Item 5. None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Financial Data Schedule (b) Reports No event has occurred during the quarter for which this report is filed that would require the filing of a report on Form 8-K and, therefore, no such report has been filed. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. dick clark productions, inc. ---------------------------- by: /s/ Kenneth H. Ferguson ----------------------- Kenneth H. Ferguson Chief Financial Officer and Treasurer (Principal Financial Officer and authorized to sign on behalf of Registrant) Date: May 3, 1996 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS JUN-30-1996 MAR-31-1996 6,293 31,008 2,262 0 3,250 39,563 12,698 3,125 57,339 8,800 0 0 0 7,873 34,869 57,339 55,059 55,059 45,711 45,711 3,292 0 (1,387) 7,443 2,493 4,950 0 0 0 4,950 0.60 0.60
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