-----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, M+pcnCeB7Wy4N+jyDa14DRqWdmYNBzTi6D5BoK6VZkwwMHlMHZPZcVMNtT5Q1HQx tDBJdCga+eQyr+VL832awA== 0000910680-96-000341.txt : 19961118 0000910680-96-000341.hdr.sgml : 19961118 ACCESSION NUMBER: 0000910680-96-000341 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 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: 96664883 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 FOR QTR. ENDED SEPT. 30, 1995 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 September 30, 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 November 8, 1996. Class Outstanding at November 8, 1996 - ---------------------------------- ------------------------------- Common Stock, $0.01 par value 7,571,500 Class A Common Stock, $0.01 par value 750,000 ITEM 1. dick clark productions, inc. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS
(Unaudited) September 30, June 30, 1996 1996 Assets ----------- ----------- - ------------------------------------------------------------ Cash and cash equivalents $ 3,263,000 $ 953,000 Marketable securities 27,432,000 28,919,000 Accounts receivables 3,692,000 4,713,000 Program costs, net 1,626,000 1,741,000 Prepaid royalty 3,128,000 3,128,000 Leasehold improvements and equipment 12,026,000 10,949,000 Goodwill and other assets 2,277,000 2,308,000 ----------- ----------- Total Assets $53,444,000 $52,711,000 =========== =========== Liabilities & Stockholders' Equity - ------------------------------------------------------------ Accounts payable $ 5,092,000 $ 5,012,000 Accrued residuals and participations 2,383,000 2,260,000 Production advances and deferred revenue 664,000 726,000 Current and deferred income taxes 784,000 602,000 ----------- ----------- Total Liabilities 8,923,000 8,600,000 Commitments and contingencies Minority interest 644,000 617,000 Stocholder's 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 vlue, 20,000,000 shares authorized 7,571,500 shares outstanding at September 30, 1996 and 7,551,500 shares outstanding at June 30, 1996 76,000 76,000 Additional paid-in capital 7,974,000 7,894,000 Retained earnings 35,820,000 35,517,000 ----------- ----------- Total stockholder's equity 43,877,000 43,494,000 ----------- ----------- Total liabilities & stockholders' equity $53,444,000 $52,711,000 =========== ===========
The accompanying notes are an integral part of these consolidated balance sheets. -2- dick clark productions, inc. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the Three Months Ended September 30, ---------------------------- 1996 1995 ------------ ------------ Gross revenues $ 10,909,000 8,384,000 Costs related to revenue 9,658,000 7,683,000 ------------ ------------ Gross profit 1,251,000 701,000 General and administrative expenses 1,088,000 996,000 Minority interest expense 76,000 46,000 Interest and other income (404,000) (433,000) ------------ ------------ Income before provision for income taxes 491,000 92,000 Provision for income taxes 188,000 32,000 ------------ ------------ Net income $ 303,000 $ 60,000 ============ ============ Net income per share $ 0.04 $ 0.01 ============ ============ Weighted average number of shares outstanding 8,322,000 8,279,000 ============ ============ The accompanying notes are an integral part of these consolidated statements. -3- dick clark productions, inc. CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
For the Three Months Ended September 30, -------------------------- 1996 1995 ----------- ----------- Cash flows from operating activities Net income $ 303,000 $ 60,000 Adjustments to reconcile net income to net cash provided by operations Amortization expense 6,128,000 4,734,000 Depreciation expense 334,000 249,000 Investment in program costs (5,879,000) (6,720,000) Minority interest,net 27,000 46,000 Disposals of leasehold improvements and equipment 0 15,000 Changes in assets and liabilities Accounts receivable 1,021,000 435,000 Goodwill and other assets (103,000) (36,000) Accounts payable, accrued residuals and participations 203,000 (1,260,000) Production advances and deferred revenue (62,000) 1,840,000 Current and deferred income taxes payable 182,000 (12,000) ----------- ----------- Net cash provided by (used for) operations 2,154,000 (649,000) ----------- ----------- Cash flows from investing activities Purchases of marketable securities (3,962,000) (1,435,000) Sales of marketable securities 5,449,000 1,952,000 Capital expenditures (1,411,000) (402,000) ----------- ----------- Net cash provided by investing activities 76,000 115,000 ----------- ----------- Cash flows from financing activities Exercise of stock options 80,000 0 ----------- ----------- Net cash provided by financing activities 80,000 0 ----------- ----------- Net increase (decrease) in cash and cash equivalents 2,310,000 (534,000) Cash and cash equivalents at beginning of the period 953,000 3,297,000 ----------- ----------- Cash and cash equivalents at end of the period $ 3,263,000 $ 2,763,000 =========== =========== Supplemental Disclosures of Cash Flow Information: Cash paid during the year for income taxes $ 6,000 $ 44,000 =========== ===========
The accompanying notes are an integral part of these consolidated statements. -4- dick clark productions, inc. NOTES 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, 1996, as included in the Company's 1996 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, 1996 consolidated balance sheet is included on page 29 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 September 30, 1996, and the results of its operations and cash flows for the periods ended September 30, 1996 and 1995 respectively, have been made. Operating results for the three-month period ended September 30, 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 65% of the Company's consolidated revenues for the three month period ending September 30, 1996. The revenues from the Company's entertainment related businesses are primarily derived from 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. The Company's entertainment business also is engaged in 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. Certain statements in the foregoing Management's Discussion and Analysis (the "MD&A") are not historical facts or information and certain other statements in the MD&A are forward looking statements that involve risks and uncertainties, including, without limitation, the Company's ability to develop and sell television programming, timely completion of negotiations for new restaurant sites and the ability to construct, finance and open new restaurants and to attract new corporate productions clients, and such competitive and other business risks as from time to time may be detailed in the Company's Securities and Exchange Commission reports. -5- 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 ended September 30, 1996 were $10,909,000 compared with $8,384,000, for the comparable period in the previous fiscal year. The revenues increased for the three months ended September 30, 1996, as compared to the corresponding period in the previous fiscal year, is primarily due to increased revenues from the Company's corporate productions business as well as an increase in the number of television specials delivered during the quarter. The increase in revenues is further explained by the inclusion of revenues from an additional restaurant which was not operating during the corresponding period in the previous fiscal 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 increased for the three-month period ended September 30, 1996, as compared to the corresponding period in the previous fiscal year primarily as a result of increased profitability recognized from the aforementioned increased number of television specials delivered as well as an increase in profitability of the Company's television series production. 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. -6- The Company intends to continue to accelerate 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 plans to open restaurants in St. Louis, Missouri in November of 1996, Austin, Texas in March of 1997, Philadelphia, Pennsylvania in April of 1997, and another potential location in late fiscal 1997 at a total estimated capital investment of $10,000,000 which will be funded by the Company. Working 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 $30,695,000 as of September 30, 1996. -7- 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. -8- 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: November 13, 1996 -9- EX-27 2 FDS -- QTR. ENDED 9/30/96
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND INCOME STATEMENT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000805370 dick clark productions, inc. 1,000 3-MOS JUN-30-1997 JUL-01-1996 SEP-30-1996 3,263 27,432 3,692 0 1,626 34,387 15,812 3,786 53,444 5,756 0 0 0 8,057 35,820 53,444 10,909 10,909 9,658 9,658 1,164 0 (404) 491 188 303 0 0 0 303 0.04 0.04
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