-----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, Rnb7p2SYccRgNypLsRYMsaO/VkcgrmaS+iJPY+4xVRCKXWGf4IFkSFiSzDjTn7uL IdXmMPcBLLkgvv95G93JrA== 0000910680-99-000020.txt : 19990128 0000910680-99-000020.hdr.sgml : 19990128 ACCESSION NUMBER: 0000910680-99-000020 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19990127 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/A SEC ACT: SEC FILE NUMBER: 000-15192 FILM NUMBER: 99513785 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/A 1 DICK CLARK PRODUCTIONS, INC. 10-Q/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A (Amendment No. 1) ( X ) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1998. 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 13, 1998. Class Outstanding at November 13, 1998 - -------------------------------------------------------------------------------- Common Stock, $0.01 par value 8,021,000 Class A Common Stock, $0.01 par value 787,000 dick clark productions, inc. Form 10-Q/A For the Quarter Ended September 30, 1998 PART I. FINANCIAL INFORMATION Page ---- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................ 3 Part II. OTHER INFORMATION SIGNATURES....................................................... 6 -2- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION ------------ The Company's business activities consist of two business segments: entertainment operations and restaurant operations. The entertainment segment contributed approximately 55% of the Company's consolidated revenues for the three-month period ended September 30, 1998. 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 feature 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. Depending on the type of contract, revenues for the Company's corporate projects 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. 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 and series where there would be anticipated future revenues earned from rerun and other exploitation. Successful television movies and series 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. Costs for corporate projects are capitalized and expensed as revenues are recognized. RESULTS OF OPERATIONS - --------------------- Revenues for the three-month period ended September 30, 1998, were $13,138,000, compared to $14,055,000 for the comparable period in the previous fiscal year. The decrease in revenues for the three months ended September 30, 1998, as compared to the corresponding period in the previous fiscal year, is primarily due to decreased revenues from the Company's corporate projects, offset in part by an increase in revenues from television series programming. Gross profit for the Company's productions 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 period ended September 30, 1998, as compared to the corresponding period in the previous fiscal year, primarily as a result of decreased profitability associated with the Company's corporate projects. -3- 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 and cable networks and minimum guaranteed distribution payments from independent distributors. The Company has generally been able to cover the costs of its television programming and corporate projects through license or syndication fees and production revenues respectively, and has incurred no significant capital expenditure commitments. 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 $38,755,000 as of September 30, 1998. YEAR 2000 - --------- The Company has assessed and continues to assess the impact of the Year 2000 Issue on its reporting systems and operations. The Year 2000 Issue exists because computer systems and applications were historically designed to use two digit fields to designate a year, and date sensitive systems may not recognize 2000 at all, or if recognized, as 1900. Information technology systems account for most of the Year 2000 work and include all computer systems and technology managed by the Company. All core systems have been assessed and work is being undertaken to test and implement changes where required. Information Technology vendors and suppliers have been contacted as to their Year 2000 compliance and their responses have been factored into the Company's plans. Normal software version upgrades and hardware replacements, for which budget allocations had been made, have solved a majority of the Company's Year 2000 Issues. As such, the Year 2000 costs are included in the Company's normal expenditures for system maintenance and upgrades and not as a separate Year 2000 cost category. Based on the nature of the Company's business, it is not expected that any non-financial software applications and hardware that may be impacted by the Year 2000 Issue would cause any interruption in operations. The Company is communicating with its significant customers and vendors to understand their Year 2000 issues and how they might prepare themselves to manage those issues as they relate to the Company. To date, no significant customers or vendors have informed the Company that a material Year 2000 issue exists which will have a material effect on the Company. The Company expects to complete any changes required to overcome the Year 2000 Issue during fiscal 1999. The Company expects that the total cost to remediate the Year 2000 Issue will not be material to its results of operations, liquidity or capital resources. The Company does not currently have a Year 2000 contingency plan but intends to create one during fiscal 1999. GENERAL - ------- 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 -4- 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- 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. Date: January 26, 1999 By: /s/ William S. Simon --------------------------------------- William S. Simon Chief Financial Officer and Treasurer -6- -----END PRIVACY-ENHANCED MESSAGE-----