-----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, AjRGFREy//SZ5oaHWdaCyiiTgJehaGS5Aej+K7v3ToD5zL74dP93zL/WBgxDkxdp +rE6L6gq+LfAVBtuIel0SA== 0001011438-98-000021.txt : 19980212 0001011438-98-000021.hdr.sgml : 19980212 ACCESSION NUMBER: 0001011438-98-000021 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980210 ITEM INFORMATION: FILED AS OF DATE: 19980211 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: IWERKS ENTERTAINMENT INC CENTRAL INDEX KEY: 0000830404 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE THEATERS [7830] IRS NUMBER: 954439361 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-22558 FILM NUMBER: 98531690 BUSINESS ADDRESS: STREET 1: 4540 WEST VALERIO ST CITY: BURBANK STATE: CA ZIP: 91505 BUSINESS PHONE: 8188417766 MAIL ADDRESS: STREET 1: 4540 WEST VALERIO ST CITY: BURBANK STATE: CA ZIP: 91505 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________ Form 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 10, 1998 IWERKS ENTERTAINMENT, INC. (Exact Name of Registrant as Specified in Charter) Delaware 0-22558 95-4439361 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 4540 West Valerio Street Burbank, California 91505-1045 (Address of Principal Executive Offices) (818) 841-7766 (Registrant's Telephone Number) ITEM 5. OTHER EVENTS Reference is made to the press release of Registrant, issued on February 10, 1998, which contains information meeting the requirements of this Item 5, and which is incorporated herein by this reference. A copy of this press release is attached to this Form 8-K as Exhibit 99.1. Page 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. February 10, 1998 IWERKS ENTERTAINMENT, INC. By: /s/ Bruce Hinckley --------------------------- Bruce Hinckley Chief Financial Officer Page 3 EXHIBIT INDEX Exhibits Page Number - -------- ----------- 99.1 Press Release dated February 10, 1998. EX-99.1 2 PRESS RELEASE LETTERHEAD OF IWERKS ENTERTAINMENT FOR IMMEDIATE RELEASE - --------------------- Contact: Bruce Hinckley Krista Grossman Chief Financial Officer Director Iwerks Entertainment Bozell Sawyer Miller Group (818) 955-7800 (310) 442-2516 IWERKS ENTERTAINMENT ANNOUNCES FISCAL 1998 SECOND QUARTER RESULTS -------------------------------------------------- Burbank, CA, February 10, 1998 -- Iwerks Entertainment, Inc. [NASDAQ NM: IWRK] announced second quarter financial results for the period ended December 31, 1997. For the quarter, Iwerks reported a net loss of $(3.5) million, or $(0.29) per share, on revenues of $6.0 million, compared with a net loss of $(57,000), or $0.00 per share, on revenues of $10.0 million for the comparable period a year ago. For the six-month period ended December 31, 1997, Iwerks reported a net loss of $(4.0) million, or $(0.33) per share, on revenues of $14.0 million, compared with net income of $117,000, or $0.01 per share, on revenues of $19.6 million for the comparable year-ago period. Results for the three and six months ended December 31, 1997 include $218,000 and $531,000, respectively, of costs associated with the previously announced merger with Showscan Entertainment Inc. Iwerks said that much of the revenue decline for the three- and six-month periods was due to a decrease in hardware sales in Asia, which were down $3.8 million and $5.4 million, respectively, from the comparable year-earlier periods. Additionally, the company's touring revenue declined by $0.5 million in the quarter and $0.7 million for the six-month period ended December 31, 1997. Iwerks said these decreases were partially offset by minor increases in Americas hardware sales and film licensing revenues. Iwerks said it expected the lower Asian hardware and touring sales trends to continue for the foreseeable future. Iwerks had announced on December 24, 1997 that it expected its revenues and earnings for the second quarter to fall short of analyst estimates and prior year results primarily due to significantly weakened sales in the Asia Pacific region. Iwerks also announced on January 28, 1998 that it reduced its workforce by approximately 13% in order to align the company's staffing levels with the lower revenues and earnings. (more) Iwerks Announces Second Quarter Results - Page 2 Roy A. Wright, Chairman and Chief Executive Officer of Iwerks, said, "As we reported earlier in the quarter, the Asian economic crisis has had a substantial impact on our hardware sales to that region. Subsequently, we have embarked on a two-pronged strategy, which includes implementing aggressive cost-cutting measures to bring our expenses in line with the lower revenues, and a renewed focus on the domestic, European and Latin American markets. Already, as the results show, we have experienced an uptick in Americas sales as well as a slight increase in our film licensing revenues." Iwerks said that its gross profit margin for the three-month period had decreased from 31% to 14%, due primarily to the company's inability to reduce the fixed cost of touring operations at the same rate as touring sponsorship revenue has declined. The company's selling, general and administrative (SG&A) expenses increased by $989,000 to $4.3 million for the second quarter, and increased by $1.2 million to $7.9 million for the six-month period. Iwerks said the increases in SG&A expenses were due to higher expenses for marketing, research and development costs, insurance and allowance for doubtful accounts. SG&A figures do not include transaction-related charges in connection with the previously announced merger with Showscan Entertainment, which equal $218,000 and $531,000 for the three- and six-month periods, respectively. Iwerks said that it anticipates that its annual meeting of shareholders will be held in March 1998, at which time shareholders will vote on the company's proposed merger with Showscan. Iwerks and Showscan announced their intention to merge in August 1997, and announced amended transaction terms in December 1997. The combined company, which will bring together the two largest motion simulation companies, will be the largest provider of ride simulation entertainment attractions and software in the world. Iwerks Entertainment is one of the world's leading producers of high-tech, multi-sensory experiences such as ride simulation, 2D and 3D giant screen theaters, 360 degree video dance clubs and other immersive attractions. Serving prestigious entertainment, information and marketing providers, more than 250 Iwerks attractions can be found worldwide at location-based entertainment centers, amusement parks, family entertainment centers, shopping centers, casinos, resorts, nightclubs, restaurants, museums, fairs, festivals and more. (more) Iwerks Announces Second Quarter Results - Page 3 FORWARD-LOOKING STATEMENT DISCLOSURE ------------------------------------ This release contrans forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Those risks include, but are not limited to, the ongoing economic conditions and situation in the Asia Pacific region, the level of available sales in the rest of the world, costs of sales and the ability of the Company to maintain pricing levels necessary to maintain gross profit margins, the successful consummation and integration of the Company pending its merger with Showscan, the level of selling, general administrative costs, the performance of the Company under existing purchase contracts and the ability to obtain new contracts, the success of the Company's owned and operating strategy, the success of the Company's film software and the effects of competition, as well as the other "risk factors" set forth in the Company's filings with the Securities and Exchange Commission. All forward-looking statements should be considered in light of these risks and uncertainties. (one page of tables attached) ### IWERKS ENTERTAINMENT, INC. FINANCIAL HIGHLIGHTS FISCAL 1998 SECOND QUARTER AND SIX-MONTH ENDED DECEMBER 31, 1997 (in 000s, except per share data)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Six Months Ended December 31, 1997 June 30, 1997 (unaudited) (unaudited) ------------------- ------------------- 1997 1996 1997 1996 -------- -------- -------- -------- Revenue $ 5,989 $ 10,023 $ 14,041 $ 19,618 Cost and expense Cost of Sales 5,168 6,955 9,957 13,192 Selling, General & Administrative 4,311 3,322 7,916 6,703 Merger Related (a) 218 - 531 - -------- -------- -------- -------- Total Cost 9,697 10,277 18,404 19,895 Interest income, net 208 197 357 394 -------- -------- -------- -------- Net income (loss) $(3,500) $ (57) $(4,006) $ 117 ======== ======== ======== ======== Net income (loss) per common share $ (0.29) $ 0.00 $ (0.33) $ 0.01 ======== ======== ======== ======== Weighted average shares outstanding 12,161 11,715 12,160 11,675 ======== ======== ======== ========
CONDENSED CONSOLIDATED BALANCE SHEETS December 31, 1997 June 30, 1997 ----------------- ------------- (unaudited) (unaudited) ASSETS Cash and marketable securities $ 17,380 $ 19,067 Other current assets 9,677 16,188 Properties and Film Inventory, net 12,554 10,377 Goodwill 15,064 15,367 Other assets 3,185 3,530 --------- --------- Total assets $ 57,850 $ 64,529 ========= ========= LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities $ 11,959 $ 14,316 Long-term liabilities 1,511 1,827 Stockholders' equity 44,380 48,386 --------- --------- Total liabilities and stockholders' equity $ 57,850 $ 64,529 ========= ========= (a) Costs associated with the pending merger of Showscan Entertainment, Inc.
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