-----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, CBPn5FC1ZK+m8wW9xIV6Zbfeu8Ynhf0fTKU5UXuvjuyz0tF4l7tHp2GRjITZJSVr OHB1cxGAe4CG+mZSqS3oAA== 0000944209-98-002047.txt : 19981215 0000944209-98-002047.hdr.sgml : 19981215 ACCESSION NUMBER: 0000944209-98-002047 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980928 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MATTHEWS STUDIO EQUIPMENT GROUP CENTRAL INDEX KEY: 0000855575 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 951447751 STATE OF INCORPORATION: CA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-18102 FILM NUMBER: 98769177 BUSINESS ADDRESS: STREET 1: 3111 N KENWOOD ST CITY: BURBANK STATE: CA ZIP: 91504 BUSINESS PHONE: 8185255200 MAIL ADDRESS: STREET 1: 2405 EMPIRE AVENUE CITY: BURBANK STATE: CA ZIP: 91504 8-K/A 1 FORM 8-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) September 28, 1998 MATTHEWS STUDIO EQUIPMENT GROUP ---------------------------------- (Exact name of registrant as specified in its charter) CALIFORNIA -------------------------------------------- (State or other jurisdiction of incorporation) 0-18102 95-1447751 ----------------------------------------------------------------------------- (Commission file number) (I.R.S. Employer Identification Number) 3111 NORTH KENWOOD STREET, BURBANK, CA 91505 ---------------------------------------------------------------- (Address of principal executive office) (Zip Code) (818)525-5200 -------------------------------------------------- (Registrant's telephone number, including area code) N/A - ----------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Page 1 of 10 Item 2. Acquisition or Disposition of Assets Effective September 28, 1998, Matthews Studio Equipment Group ("Matthews") sold a subsidiary of Matthews named Matthews Studio Equipment, Inc., to Phillips Associates, LLC ("Acquiror"). Such subsidiary is engaged primarily in the business of manufacturing, sale and distribution of grip equipment used by the entertainment production industry (the "Manufacturing Subsidiary"). The Acquiror is beneficially owned by Mr. Edward Phillips and Mrs. Norma Phillips, through the Edward and Norma Phillips Family Trust. Mr. Phillips is one of the co-founders of Matthews and, prior to this transaction, Mr. Phillips was the president of the Manufacturing Subsidiary as well as one of the directors of Matthews. The consideration paid by the Acquiror to Matthews for the Manufacturing Subsidiary was reached through arms-length negotiations. The Acquiror exchanged 1,916,450 shares of Matthews common stock and assumed $5 million of debt under Matthews' bank line of credit with The Chase Manhattan Bank, for all of the stock in the Manufacturing Subsidiary. Also, Matthews paid to Mr. Phillips $75,000 in consideration for his cancellation of options to purchase 274,000 shares of Matthews common stock, and Mr. Phillips and Matthews exchanged mutual general releases in respect of his employment agreement with the Manufacturing Subsidiary and Matthews, originally entered into on July 1, 1995. Effective September 28, 1998, Mr. Phillips resigned from all officer and director positions he previously held with Matthews and its subsidiaries. A copy of the press release made by Matthews in respect of this disposition of the Manufacturing Subsidiary is attached as an exhibit. Item 7. Financial Statements and Exhibits (b) Pro forma financial information (unaudited) Pro forma condensed consolidated financial data related to the disposition of a subsidiary is located at addendum 1. Page 2 of 10 (2)(c) Exhibits EXHIBIT INDEX Exhibit Document Description - ------- -------------------- 99.1* Stock Exchange Agreement dated September 28, 1998, among Matthews Studio Equipment Group, Matthews Studio Equipment, Inc., Phillips Associates, LLC and Edward Phillips, without the schedules and exhibits thereto, other than as listed below: i. Amendment No. 2 to Employment Agreement dated September 28, 1998, among Matthews Studio Equipment Group, Matthews Studio Equipment, Inc. and Edward Phillips. ii. Indemnification Agreement dated September 28, 1998, among Matthews Studio Equipment Group, Matthews Studio Equipment, Inc., Phillips Associates, LLC and Edward Phillips. 99.2* Matthews' press release in respect of the disposition of Matthews Studio Equipment, Inc. - -------------------- * Previously filed. Page 3 of 10 SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 8-K/A to be signed on its behalf by the undersigned hereunto duly authorized. MATTHEWS STUDIO EQUIPMENT GROUP (Registrant) Date: December 10, 1998 By: /s/ Carlos D. DeMattos ---------------------------------------- Carlos D. DeMattos Chairman of the Board, Chief Executive Officer, President & Chief Financial Officer Page 4 of 10 Addendum 1 - ---------- Pro forma financial data The following unaudited pro forma condensed consolidated statements of operations for the year ended September 30, 1997, and the nine months ended June 30, 1998, and the unaudited pro forma condensed consolidated balance sheet of June 30, 1998, give effect to the sale by Matthews Studio Equipment Group (the Company) of Matthews Studio Equipment, Inc. (the Manufacturing Subsidiary). The pro forma information is based on the historical financial statements of the Company and gives effect to the disposal of the operations and assets of the Manufacturing Subsidiary. The pro forma information includes the pro forma adjustments described in the accompanying notes to the unaudited pro forma condensed consolidated financial statements. The unaudited pro forma condensed consolidated financial statements have been prepared by the management of the Company and the Manufacturing Subsidiary based upon the historical information included herein and other financial information. These pro forma statements do not purport to be indicative of the results of operations or financial position which would have occurred had the disposition been made at the beginning of the periods or as of the date indicated or of the financial position or results of operations which may be obtained in the future. Page 5 of 10 MATTHEWS STUDIO EQUIPMENT GROUP AND SUBSIDIARIES Pro Forma Condensed Consolidated Statements of Operations For the Year Ended September 30, 1997 (in thousands, except per share data)
Less Company Manufacturing Pro forma ------------------------------------ Historical Subsidiary Adjustments Adjusted (4) ----------- -------------- ------------- --------------- Revenues from rental operations $ 25,589 $ $ $ 25,589 Net product sales 20,769 13,291 (602) (1) 8,080 -------- -------- -------- -------- 46,358 13,291 (602) 33,669 Costs and expenses: Cost of rental operations 14,519 14,519 Cost of sales 14,081 8,561 (602) (1) 6,122 Selling, general and administrative 12,629 4,408 8,221 Interest 2,675 (8) 450 (3) 2,340 -------- -------- -------- -------- 43,904 12,961 (152) 31,095 Income before income taxes 2,454 330 (450) 2,574 Provision for income taxes 748 99 (135) 784 -------- -------- -------- -------- Income from operations $ 1,706 $ 231 $ (315) $ 1,790 ======== ======== ======== ======== Income from operations: Basic (2) $0.16 $0.21 ====== ====== Diluted (2) $0.15 $0.19 ====== ======
See notes to pro forma condensed consolidated statements of operations Page 6 of 10 MATTHEWS STUDIO EQUIPMENT GROUP AND SUBSIDIARIES Pro Forma Condensed Consolidated Statements of Operations For the Nine Months Ended June 30, 1998 (in thousands, except per share data)
Less Company Manufacturing Pro forma ----------------------- Historical Subsidiary Adjustments Adjusted (4) ---------- ------------- ----------- -------- Revenues from rental operations $23,448 $ $ $23,448 Net Product Sales 20,064 10,198 (367) (1) 10,233 ------- ------- ----- ------- 43,512 10,198 (367) 33,681 Costs and expenses: Cost of rental operations 13,949 13,949 Cost of sales 13,678 6,542 (367) (1) 7,503 Selling, general and administrative 14,484 3,202 11,282 Interest 4,128 16 450 (3) 3,662 ------- ------- ----- ------- 46,239 9,760 83 36,396 Income (loss) before income taxes (2,727) 438 (450) (2,715) Provision (benefit) for income taxes (946) 153 (158) (942) ------- ------- ----- ------- Net income (loss) $(1,781) $ 285 $(293) $(1,773) ======= ======= ===== ======= Net income (loss) per common share, basic and diluted (2) $ (0.16) $ (0.20) ======= =======
See notes to pro forma condensed consolidated statements of operations Page 7 of 10 MATTHEWS STUDIO EQUIPMENT GROUP AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 1. To revise the Manufacturing Subsidiary intercompany sales elimination. 2. For the nine months ended June 30, 1998, the number of shares used to calculate the historical and pro forma adjusted basic and diluted earnings per share were 11,001,000 and 9,085,000, respectively. For the twelve months ended September 30, 1997, the number of shares used to calculate the historical basic and diluted earnings per share were 10,456,000 and 11,108,000 respectively. The number of shares used to calculate the pro forma adjusted basic and diluted earnings per share were 8,540,000, and 9,192,000, respectively. 3. To record interest relating to the $5,000,000 debt assumed by the Manufacturing Subsidiary. 4. The accompanying unaudited pro forma condensed consolidated financial statements exclude the $3,963,000 gain from the sale of the Manufacturing Subsidiary. Page 8 of 10 MATTHEWS STUDIO EQUIPMENT GROUP AND SUBSIDIARIES Pro Forma Condensed Consolidated Balance Sheets June 30, 1998 ($ in thousands)
Less Company Manufacturing Pro forma ----------------------- Historical Subsidiary Adjustments Adjusted (3) ---------- ------------- ----------- -------- ASSETS: Current Assets: Cash and cash equivalents $ 141 $ 1 $ $ 140 Accounts receivable, net 11,424 2,796 8,628 Current portion of net investment in leases 450 450 Inventories 9,438 5,966 3,472 Prepaid expenses and other current assets 3,692 734 2,958 -------- ------- ------- -------- Total current assets 25,145 9,497 0 15,648 Property, plant and equipment 76,820 3,090 73,730 Less accumulated depreciation (25,962) (2,152) (23,810) -------- ------- ------- -------- Net property, plant and equipment 50,858 938 49,920 Investment in leases, less current portion 291 291 Other assets 27,194 72 27,122 -------- ------- ------- -------- Total assets $103,488 $10,507 $ 0 $ 92,981 ======== ======= ======= ======== LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable $ 3,498 $ 938 $ $ 2,560 Accrued liabilities 3,219 347 1,667 (1) 4,539 Current portion of long-term debt and capital lease obligations 2,899 61 2,838 -------- ------- ------- -------- Total current liabilities 9,616 1,346 1,667 9,937 Long-term debt and capital leases 79,126 130 5,000 (2) 73,996 Deferred income taxes 4,382 4,382 Shareholders' equity: Preferred stock 0 Common stock 7,143 6,156 (5,000) (2) 5,987 Retained earnings 3,221 2,875 (1,667) (1) (1,321) -------- ------- ------- -------- Total shareholders' equity 10,364 9,031 (6,667) 4,666 -------- ------- ------- -------- Total liabilities and shareholders' equit $103,488 $10,507 $ 0 $ 92,981 ======== ======= ======= ========
See notes to pro forma condensed consolidated balance sheets Page 9 of 10 MATTHEWS STUDIO EQUIPMENT GROUP AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS 1. To record the costs related to the disposal of the Manufacturing Subsidiary. 2. To record the debt assumed by the Manufacturing Subsidiary. 3. The accompanying unaudited pro forma condensed consolidated financial statements exclude the $3,963,000 gain from sale of the Manufacturing Subsidiary. Page 10 of 10 -----END PRIVACY-ENHANCED MESSAGE-----