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 19, 1997
ASCENT ENTERTAINMENT GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-27192 52-1930707
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File No.) Identification No.)
One Tabor Center
1200 Seventeenth Street, Suite 2800
Denver, Colorado 80202
(Address of principal executive offices)
(303) 626-7000
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
On February 19, 1997, Ascent Entertainment Group, Inc. ("Ascent" or the
"Company") issued a press release reporting its fourth quarter 1996 and fiscal
year 1996 financial results. A copy of the release is attached hereto as Exhibit
20 and incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(c) Exhibits (listed according to the number assigned in
Item 601 of Regulation S-K)
Exhibit No. Description
20 Press Release dated February 19, 1997
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Ascent Entertainment Group, Inc.
By:/s/ Arthur M. Aaron
Arthur M. Aaron
Vice President, Business and Legal Affairs
Date: February 20, 1997
<PAGE>
Exhibit Index
Exhibit
No. Description
20 Press Release of Ascent Entertainment Group, Inc.
dated February 19, 1997
<PAGE>
MORE
Ascent Reports Fourth Quarter and 1996 Results
For Immediate Release:
Wednesday, February 19, 1997
Contact: Media Investors
Paul Jacobson Karen Amrhine Jim Cronin
Ascent Sard, Verbinnen & Co. Ascent
303.626.7060 212.687.8080 303.626.7010
Denver, Colo. -- Ascent Entertainment Group, Inc. (NASDAQ:GOAL) today reported
revenues for 1996 of $258.1 million, an increase of 28 percent over revenues of
$201.8 million for 1995, and revenues for the fourth quarter of 1996 of $91.6
million, an increase of 53 percent over 1995 fourth quarter revenues of $59.7
million. Revenues for both 1996 periods include $21.4 million in revenues from
the SpectraVision, Inc. assets acquired by Ascent's 57 percent-owned subsidiary,
On Command Corporation (On Command), in October 1996. The increase in revenues
for 1996 is also attributable to higher revenues at On Command, excluding
SpectraVision, and a full year of revenues for the Colorado Avalanche. These
increases in revenue were partially offset by the absence of 1996 revenues from
the Company's Satellite Cinema operations, which were terminated in December
1995, and lower revenues at the Denver Nuggets, primarily the absence of NBA
expansion fees recognized in 1995.
"In 1996 we accomplished our goal of continuing to create value in each of
our businesses," said Charlie Lyons, president and CEO of Ascent. "We were
disciplined in the way we executed, in that we did not experience a significant
negative impact on our short term results. A major accomplishment for Ascent was
the acquisition of Spectravision, which positioned us as the unquestioned leader
in the hospitality industry in-room entertainment business, increasing our room
base at On Command by over 450,000 rooms.
"Our acquisition and relocation of the Colorado Avalanche went smoothly
and in 1996 we brought the state of Colorado its first major professional sports
championship," Lyons added. "We are working to reach an agreement that would
result in a new arena in Colorado. At Beacon, we entered into a 20-film
distribution deal with Universal Pictures, Inc. In addition, we produced three
films which are expected to be released in 1997 through Columbia Pictures and
The Walt Disney Company. Finally, at our Ascent Network Services subsidiary we
were awarded the partial digital upgrade contract with MS-NBC, further
strengthening our relationship with NBC."
Ascent's earnings before interest, taxes, depreciation and amortization
(EBITDA) for 1996 decreased 18 percent, from $37.2 million in 1995 to $30.5
million in 1996, the 1995 amount having been restated as described further
below. Ascent's EBITDA for the fourth quarter of 1996 decreased $3.6 million, or
105 percent, from $3.4 million in the fourth quarter 1995, as restated.
Excluding approximately $6.7 million in charges at On Command which decreased
EBITDA and which On Command believes are one-time in nature, EBITDA for the year
would have stayed constant at $37.2 million, and EBITDA for the fourth quarter
of 1996 would have increased 91 percent to $6.5 million.
<PAGE>
ASCENT 4TH QUARTER/YEAR-END RESULTS
FEBRUARY 19, 1997 -- PAGE 7
MORE
Ascent reported a net loss for fiscal year 1996 of $36.0 million, or a
loss of $1.21 per share. This loss compares to a net loss for 1995 of $21.0
million, as restated, or a loss of $0.87 per share. For the fourth quarter of
1996, Ascent reported a net loss of $19.0 million, or a loss of $0.64 per share,
compared to a net loss in the fourth quarter of 1995 of $7.9 million, as
restated, or a loss of $0.32 per share. The increased net loss for the year and
the quarter is primarily attributable to increased losses at the Denver Nuggets
and, to a lesser extent, losses at On Command in the fourth quarter of 1996.
Excluding the one-time charges of $8.7 million ($6.7 million of which affected
EBITDA) at On Command in the fourth quarter, the Company's 1996 net loss would
have been $31.0 million, and the net loss for the fourth quarter of 1996 would
have been $14.0 million.
In a filing with the Securities and Exchange Commission today, the Company
restated its 1995 financial statements. The restatement increased the 1995 net
loss from $19.5 million, or a loss of $0.80 per share, to $21.0 million, or a
loss of $0.87 per share. The restatement also had the affect of decreasing
EBITDA from $40.8 million to $37.2 million for 1995 and from $7.0 million to
$3.4 million for the fourth quarter of 1995. The restatement resulted from the
Company's determination that certain adjustments related to film inventory and a
film distribution agreement should be made to the 1995 financial statements.
MultiMedia Distribution
Fourth quarter 1996 revenues for this segment, which includes On Command
and Ascent Network Services, were $61.0 million, up 81 percent from $33.8
million in the comparable 1995 period. Excluding revenues of $4.5 million from
Satellite Cinema in the fourth quarter of 1995 and $21.4 million from
SpectraVision in the fourth quarter of 1996, MultiMedia Distribution segment
revenues increased $10.3 million in the fourth quarter of 1996 over the fourth
quarter of 1995. This increase is primarily attributable to the growth from
361,000 installed on-demand rooms as of December 31, 1995 to 466,000 at December
31, 1996 and growth in revenues at Ascent Network Services due in part to
revenues earned under the MS-NBC partial digital upgrade.
For 1996, MultiMedia Distribution segment revenues were $168.0 million
versus $135.8 million in 1995, an increase of 24 percent. Excluding the 1995
Satellite Cinema revenues of $24.5 million and 1996 SpectraVision revenues of
$21.4 million, MultiMedia Distribution segment revenues increased $35.3 million,
or 32 percent, again primarily attributed to the growth in installed rooms
during 1996 and increased revenues at Ascent Network Services.
Fourth Quarter EBITDA for the segment was $8.0 million, down 41 percent
from $13.6 million in the fourth quarter of 1995. Excluding the $6.7 million of
one-time charges at On Command which affected EBITDA, the segment's EBITDA for
the fourth quarter of 1996 would have increased by 8 percent to $14.7 million.
MultiMedia Distribution segment EBITDA for 1996 was $52.5 million versus
$48.3 million in 1995, an increase of 9 percent. Excluding the $6.7 million of
one-time charges at On Command which affected EBITDA, the segment's EBITDA for
1996 would have increased by 23 percent to $59.2 million.
The MultiMedia Distribution segment reported an operating loss for the
fourth quarter of 1996 of $14.4 million compared to operating income of $1.6
million in the fourth quarter of 1995. For 1996, the segment reported an
operating loss of $9.7 million versus an operating loss of $8.0 million in 1995.
Excluding the $8.7 million in one time charges at On Command, $6.7 million of
which affected EBITDA, the 1996 operating loss for the segment would have been
$1 million.
As of December 31, 1996, On Command's room installation base was 918,000
rooms consisting of 466,000 On Command Video rooms and 452,000 SpectraVision
rooms. The total number of on-demand rooms was 710,000. The number of scheduled
pay-per-view rooms was 208,000. One year earlier, On Command Video had total
installed rooms of 361,000, all of them on-demand.
Entertainment
Fourth quarter 1996 revenues for this segment, which includes the NHL
Stanley Cup Champion Colorado Avalanche, the NBA Denver Nuggets and Beacon
Communications, were $30.6 million, versus $25.9 million one year earlier, an
increase of 18 percent. This increase is principally due to additional home
games played by the Avalanche in the fourth quarter of 1996 as compared to 1995,
combined with a ticket price increase for the 1996-97 hockey season. While the
Nuggets also played additional home games in the fourth quarter of 1996 as
compared to 1995 and raised ticket prices, these factors were offset by lower
ticket revenues due to reduced attendance. In addition, during the fourth
quarter of 1996, Beacon had no movie releases and generated minimal revenues
from prior movie releases.
For 1996, Entertainment Segment revenues were $90.1 million, a 37 percent
increase over 1995 revenues of $66 million, primarily as a result of revenues
from the Avalanche. The Avalanche, acquired in July 1995, reflected no revenues
in the first half of 1995 as compared to $23.5 million for the first six months
of 1996. The increased Avalanche revenues were partially offset by lower
revenues at the Nuggets, primarily attributable to the absence of $9.2 million
in NBA expansion fees recognized in 1995, and by lower revenues at Beacon.
The Entertainment Segment's $9.3 million operating loss for the
fourth quarter of 1996 compares to an $11.2 million loss in the fourth quarter
of 1995. The segment reported a 1996 operating loss of $24.8 million compared to
a loss of $9.4 million in 1995 as restated. This increased loss is primarily
attributable to increased operating losses incurred by the Nuggets, primarily
attributable to the absence of the $9.2 million in NBA expansion fees previously
discussed.
Other
Interest expense for 1996 was $10.7 million compared to $800,000 in 1995.
This increase is attributable to borrowings incurred in conjunction with
Ascent's initial public offering in December 1995 and the additional borrowings
incurred during 1996 for capital expenditures and other investment requirements,
including assumption of debt in connection with the SpectraVision acquisition.
In conjunction with the SpectraVision transaction, the Company and On Command
each obtained new credit agreements with a bank. The Company recorded an
extraordinary loss of $334,000, net of taxes, in the fourth quarter of 1996 in
connection with the extinguishment of its previous credit facility with its
former lender.
The Company's effective tax rate in the fourth quarter of 1996 declined to
15 percent as compared to an effective rate of 35 percent in the fourth quarter
of 1995. On an annual basis, the effective rate declined to 22 percent in 1996
from 32.5 percent in 1995. These declines in the Company's effective tax rate
are primarily attributable to the losses incurred by On Command during the
fourth quarter of 1996, in which no tax benefit was recognized due to
uncertainties regarding the recoverability of these tax losses.
Ascent Entertainment Group's principal business is providing interactive
entertainment and information services through its majority-owned subsidiary On
Command Corporation (NASDAQ:ONCO). Ascent owns and operates additional
entertainment-related businesses, including the NHL Stanley Cup Champion
Colorado Avalanche, NBA Denver Nuggets and Beacon Communications, a motion
picture and television production company.
###
For a menu of Ascent Entertainment Group's news releases available by fax 24
hours (no charge) or to retrieve a specific release, please call 1-800-758-5804,
ext. 152850, or access the address http://www.prnewswire.com on the internet.
<PAGE>
<TABLE>
ASCENT ENTERTAINMENT GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(in millions, except per share amounts)
<CAPTION>
- --------------------------------------------------------------------
Three Months Ended Twelve Months Ended
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Dec. 31 Dec. 31
------- -------
- --------------------------------------------------------------------
- --------------------------------------------------------------------
1996 1995 1996 1995
- --------------------------------------------------------------------
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Revenues $91.6 $59.7 $258.1 $201.8
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Operating Expenses 91.8 56.3 227.6 164.6
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Depreciation and 25.6 14.9 74.8 53.7
amortization
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Provision for 0.0 0.0 0.0 10.9
--- --- --- ----
Restructuring
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Operating Loss (25.8) (11.5) (44.3) (27.4)
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Interest expense (4.8) (0.4) (10.7) (0.8)
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Other income (expense), 0.1 (0.2) 0.5 (2.0)
--- ----- --- -----
net
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Loss before taxes, (30.5) (12.1) (54.5) (30.2)
minority
interest &
extraordinary loss
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Income tax benefit 4.7 4.3 12.0 9.8
--- --- ---- ---
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Loss before minority (25.8) (7.8) (42.5) (20.4)
interest and
extraordinary loss
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Minority interest 7.1 (0.1) 6.8 (0.6)
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Extraordinary loss on (0.3) 0.0 (0.3) 0.0
----- --- ----- ---
early
extinguishment of
debt, net of
taxes
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Net loss ($19.0) ($7.9) ($36.0) ($21.0)
======= ====== ======= =======
- --------------------------------------------------------------------
- --------------------------------------------------------------------
EBITDA ($0.2) $3.4 $30.5 $37.2
====== ==== ===== =====
- -------------------------------------------------------------------
- -------------------------------------------------------------------
Net loss per share ($0.64) ($0.32) ($1.21) ($0.87)
======= ======= ======= =======
- -------------------------------------------------------------------
- -------------------------------------------------------------------
EBITDA per share ($0.01) $0.14 $1.03 $1.54
======= ===== ===== =====
- -------------------------------------------------------------------
- -------------------------------------------------------------------
Weighted avg. number of
shares 29.8 24.9 29.8 24.2
==== ==== ==== ====
<PAGE>
</TABLE>
- --------------------------------------------------------------------------
ASCENT 4TH QUARTER/YEAR-END RESULTS
- --------------------------------------------------------------------------
FEBRUARY 19, 1997 -- PAGE 9
<TABLE>
ASCENT ENTERTAINMENT GROUP, INC.
SELECTED FINANCIAL DATA
(in millions, except for rooms data)
<CAPTION>
- ----------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Dec. 31 Dec. 31
------- -------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
1996 1995 1996 1995
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
REVENUES:
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Multimedia Distribution $61.0 $33.8 $168.0 $135.8
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Entertainment 30.6 25.9 90.1 66.0
---- ---- ---- ----
- ----------------------------------------------------------------------------
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Total $91.6 $59.7 $258.1 $201.8
===== ===== ====== ======
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
EBITDA:
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Multimedia Distribution $8.0 $13.6 $52.5 $48.3
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Entertainment (6.2) (8.2) (12.3) (1.1)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
General & Administrative (2.0) (2.0) (9.7) (10.0)
----- ----- ----- ------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total ($0.2) $3.4 $30.5 $37.2
====== ==== ===== =====
- ----------------------------------------------------------------------------
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OPERATING INCOME (LOSS):
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
MultMedia Distribution ($14.4) $1.6 ($9.8) ($8.0)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Entertainment (9.3) (11.2) (24.8) (9.4)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
General & Administrative (2.1) (1.9) (9.7) (10.0)
----- ----- ----- ------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total ($25.8) ($11.5) ($44.3) ($27.4)
======= ======= ======= =======
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- ----------------------------------------------------------------------------
Debt Outstanding $197.5 $70.2
====== =====
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
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- ----------------------------------------------------------------------------
Guest - Pay Rooms:
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
On-Demand 710,000 361,000
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Schedule only 208,000
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Total 918,000 361,000
======= =======
- ----------------------------------------------------------------------------
</TABLE>
