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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): January 27, 1998
Panavision Inc.
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(Exact Name of Registrant as specified in its Charter)
Delaware 001-12391 13-3593063
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of corporation) Identification No.)
6219 De Soto Avenue
Woodlands Hills, California 91367
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (818) 316-1000
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On March 16, 1998, the Company updated its pro forma financial
information previously filed with the Securities and Exchange Commission on the
Company's Current Report on Form 8-K, dated January 27, 1998. Such updated pro
forma information is included herein in Item 7.
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Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired: None
(b) Pro Forma Financial Information: Unaudited Pro Forma
Financial Data of Panavision Inc.
(c) Exhibits: None.
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UNAUDITED PRO FORMA FINANCIAL DATA
The following unaudited pro forma condensed consolidated statement of
operations for the year ended December 31, 1997 give pro forma effect to the FSG
Acquisition, the Panavision Recapitalization and the Recapitalization Financings
(including the Panavision Assumption) as if such transactions had been
consummated on January 1, 1997. The pro forma condensed consolidated balance
sheet as of December 31, 1997 gives pro forma effect to the Panavision
Recapitalization and the Recapitalization Financings (including the Panavision
Assumption) as if such transactions had been consummated on December 31, 1997.
The pro forma financial statements assume that an aggregate of 88% of the
Holders' shares of Panavision Common Stock is converted into the right to
receive cash. The pro forma adjustments are based upon available information and
certain assumptions that management believes are reasonable under the
circumstances. The pro forma financial statements do not purport to represent
the results of operations or the financial position of Panavision and its
subsidiaries that actually would have occurred had the foregoing transactions
(the 'Transactions') been consummated on the aforesaid dates.
The pro forma condensed consolidated statements of operations and other
data exclude the following non-recurring charges which will be reflected in the
Company's statement of operations in connection with the Panavision
Recapitalization and the Recapitalization Financings in the period in which the
transaction closes: (i) $29.3 million relating to the cash settlement of
unexercised stock options; (ii) approximately $17.5 million relating to the
purchase by the Company of shares acquired through the exercise of certain stock
options; (iii) $6.0 million relating to transaction expenses; (iv) $2.3 million
increase in the valuation allowance on deferred tax assets in connection with
the Panavision Recapitalization; and (v) an extraordinary charge of $1.8 million
relating to the write-off of deferred financing costs relating to the repayment
of borrowings under the Company's existing credit agreement.
The Panavision Recapitalization will be accounted for as a recapitalization
as there will be a significant continuation of stockholder ownership.
Accordingly, the transaction will have no impact on the historical basis of the
Company's assets and liabilities.
The FSG Acquisition has been recorded under the purchase method of
accounting, and accordingly, FSG's operating results have been included in the
Company's consolidated financial statements since the acquisition date of June
5, 1997. The purchase price of the FSG Acquisition plus direct
acquisition-related costs have been allocated based on fair values of the
acquired assets and assumed liabilities. The Company has also provided
approximately $6.3 million to cover the estimated transaction costs, lease
cancellation costs and severance related to the acquired businesses. Goodwill of
approximately $9.7 million was recognized as part of the transaction and is
being amortized over 30 years. The amounts for FSG included in the accompanying
unaudited pro forma condensed consolidated financial statements for the period
ended December 31, 1997, are based on unaudited management information compiled
for each FSG operation from January 1, 1997 up to the date of the acquisition,
June 4, 1997. See 'INCORPORATION OF DOCUMENTS BY REFERENCE.' All FSG amounts
have been converted into U.S. dollars at the appropriate exchange rates (after
adjustment for minor differences between U.K. and the U.S. generally accepted
accounting principles).
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PANAVISION INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
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HISTORICAL
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FSG PRO FORMA ADJUSTMENTS
JANUARY 1, 1997 -------------------------------
TO FSG PANAVISION PANAVISION
PANAVISION JUNE 4, 1997 ACQUISITION RECAPITALIZATION PRO FORMA(I)
----------- ---------------- ----------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Revenues........................... $ 176,863 $ 27,802 $(1,819)(a) $ -- $202,846
Cost of revenues................... 90,879 16,751 (1,819)(a) 105,726
(85)(b)
----------- ---------------- ----------- ---------------- ------------
Gross margin....................... 85,984 11,051 85 97,120
Operating costs.................... 52,069 10,488 130(c) 1,531(g) 63,467
(500)(d) (251)(g)
----------- ---------------- ----------- ---------------- ------------
Operating income (loss)............ 33,915 563 455 (1,280) 33,653
Interest income.................... 484 484
Interest expense................... (6,869) (280) (1,471)(e) (39,775)(h) (39,775)
8,620(h)
Foreign exchange loss.............. (105) (105)
Other, net......................... 1,315 276 1,591
----------- ---------------- ----------- ---------------- ------------
Income (loss) before income
taxes............................ 28,740 559 (1,016) (32,435) (4,152)
Income tax (provision) benefit..... (9,252) (179) 287(f) 6,273(f) (2,871)
----------- ---------------- ----------- ---------------- ------------
Net income (loss) before
extraordinary item............... $ 19,488 $ 380 $ (729) $(26,162) $ (7,023)
----------- ---------------- ----------- ---------------- ------------
----------- ---------------- ----------- ---------------- ------------
Basic earnings (loss) per common
share............................ $ 1.07 $ (0.87)
Shares used in the computation..... 18,174 8,056
Diluted earnings (loss) per common
share............................ $ 1.03 $ (0.87)
Shares used in the computation .... 19,012 8,056
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Operations.
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PANAVISION INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(a) To eliminate intercompany revenues between the Company and FSG and the
related cost of sales.
(b) To adjust depreciation expense for the revaluation of assets and to conform
estimated useful lives.
(c) To reflect the amortization of goodwill resulting from the FSG Acquisition.
(d) To eliminate management fees paid to Visual Action Holdings, plc.
(e) To reflect higher interest expense due to additional borrowings required for
the FSG Acquisition.
(f) The pro forma provision for income taxes primarily consists of state, local
and foreign taxes. Pro forma tax adjustments reflect a benefit for foreign
taxes related to the FSG Acquisition and the elimination of federal and
state income taxes (other than certain state minimum taxes) as a result of
additional interest expense and amortization of deferred charges related to
the Panavision Recapitalization. The Company has not reflected a federal tax
benefit relating to its losses as it is more likely than not that it will
not be able to realize benefit for such losses in the future.
(g) To reflect the elimination of historical amortization of deferred financing
charges on debt retired and the amortization of deferred financing charges
on the Notes assumed in connection with the Panavision Recapitalization and
the New Credit Agreement.
(h) To reflect interest expense on the Notes, compounded semiannually,
borrowings under the New Credit Agreement and elimination of historical
interest expense:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
INTEREST EXPENSE 1997
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<S> <C>
Notes at 9.625%................................................................................... $ 14,784
Revolving Facility at 8.13%....................................................................... 4,788
Tranche A Term Loan at 8.13%...................................................................... 7,317
Tranche B Term Loan at 8.38%...................................................................... 12,570
Other fees........................................................................................ 316
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39,775
Interest expense on retired debt.................................................................. 8,620
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Net interest adjustment........................................................................... $ 31,155
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</TABLE>
A 0.125% change in the interest rate payable on borrowings under the New
Credit Agreement would change annual interest expense as follows:
<TABLE>
<S> <C>
Revolving Facility............................................................................... $ 77
Tranche A Term Facility.......................................................................... 113
Tranche B Term Facility.......................................................................... 187
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$ 377
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</TABLE>
(i) In the event that all Holders, other than the Company's directors,
officers, key employees and a trust established by an officer of the
Company, elect to retain their shares of Panavision common stock,
interest expense, net loss and basic and diluted loss per share would
be $36,254, $(3,502) and $(.36), respectively. The shares used in
computation for loss per share would be 9,821. See 'Effect of the
Panavision Recapitalization.'
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PANAVISION INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, 1997
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ACTUAL RECAPITALIZATION PRO FORMA(J)
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<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents....................................... $ 11,020 $ 144,000(a) $ 6,000
293,896(b)
154,377(c)
(444,145)(d)
(29,264)(e)
(124,999)(f)
(6,000)(g)
7,115(i)
Accounts receivable............................................. 25,645 25,645
Inventories..................................................... 8,540 8,540
Prepaid expenses and other current assets....................... 16,072 (7,115)(i) 8,957
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Total current assets.............................................. 61,277 (12,135) 49,142
Property, plant and equipment, net................................ 199,038 199,038
Deferred tax assets............................................... 2,329 (2,329)(h) --
Goodwill.......................................................... 9,859 9,859
Other............................................................. 9,434 6,000(a) 18,612
5,000(b)
(1,822)(f)
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$281,937 $ (5,286) $ 276,651
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable................................................ $ 9,819 $ -- $ 9,819
Accrued liabilities............................................. 23,745 23,745
Current maturities of long-term debt............................ 5,383 (5,000)(f) 383
Deferred tax liabilities........................................ 5,387 5,387
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Total current liabilities......................................... 44,334 (5,000) 39,334
Long-term debt.................................................... 119,999 (119,999)(f) 448,896
150,000(a)
298,896(b)
Deferred tax liabilities.......................................... 6,217 6,217
Other liabilities................................................. 1,943 1,943
Common stock...................................................... 189 58(c) 81
(166)(d)
Additional paid-in capital........................................ 77,053 154,319(c) --
(231,372)(d)
Retained earnings (accumulated deficit)........................... 34,463 (212,607)(d) (217,559)
(29,264)(e)
(1,822)(f)
(6,000)(g)
(2,329)(h)
Foreign currency translation adjustment........................... (2,261) (2,261)
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Total stockholders' equity (deficit).............................. 109,444 (329,183) (219,739)
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$281,937 $ (5,286) $ 276,651
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</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet.
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PANAVISION INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)
(a) Reflects the assumption of the Notes, net of the initial purchasers'
discount and related fees and expenses.
(b) Reflects borrowings of $298,896 under the New Credit Agreement, net of
related fees and expenses.
(c) Reflects the purchase by PX Holding of 5.8 million shares of Company Common
Stock at $26.69 per share. See 'Effect of Panavision Recapitalization' and
'THE MERGER--Merger Sub Common Stock and PX Holding Stock Purchase' for a
description of the basis for using a $26.69 per share purchase price.
(d) Reflects the conversion of 11.2 million shares of Company Common Stock owned
by Warburg into redeemable preferred stock of the Company and the redemption
of such stock at a price equivalent to $26.50 in cash per share of Company
Common Stock and the purchase of 5.5 million shares from the public and
management at a price of $27.00 per share of which $17,547 will be charged
to expense in the Company's statement of operations due to the cash
settlement of shares acquired through the exercise of certain stock options.
(e) Reflects the cash payment made to settle unexercised options in connection
with the Panavision Recapitalization which will be charged to expense in the
Company's statement of operations.
(f) Reflects the payment of existing debt of the Company and the write-off of
related deferred charges of $1,822.
(g) Reflects fees and expenses related to the Panavision Recapitalization which
will be charged to expense in the Company's statement of operations.
(h) Reflects the increase in valuation allowance on deferred tax asset in
connection with the Panavision Recapitalization.
(i) Reflects the repayment of notes due to the Company from officers and key
employees which are due upon completion of the Panavision Recapitalization.
(j) In the event that all Holders, other than the Company's directors, officers,
key employees and a trust established by an officer of the Company, elect to
retain their shares of Panavision Common Stock, total debt and Stockholders'
Deficit would be $403,135 and $173,595, respectively. See 'Effect of
Panavision Recapitalization.'
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act, of 1934,
as amended, the registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: March 19, 1998 By: /s/ Jeffrey J. Marcketta
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Jeffrey J. Marcketta
Chief Financial Officer
