<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. FOR THE PERIOD ENDED MARCH 31, 1997
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 NUMBER 333-18017
PETERSEN PUBLISHING COMPANY, L.L.C.
(Exact name of Registrant as specified in its charter)
DELAWARE 95-4597937
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6420 WILSHIRE BOULEVARD 90048
LOS ANGELES, CALIFORNIA (Zip Code)
(Address of principal executive offices)
Registrant's Telephone Number, Including Area Code: (213) 782-2000
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 [_].
<PAGE>
PETERSEN PUBLISHING COMPANY, L.L.C.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed balance sheets as of December 31, 1996 and
March 31, 1997 (unaudited).................................. 3
Unaudited condensed statements of operations for the three
months ended March 31, 1996 and 1997........................ 4
Unaudited condensed statements of cash flows for the three
months ended March 31, 1996 and 1997........................ 5
Notes to unaudited condensed financial statements........... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
</TABLE>
2
<PAGE>
PETERSEN PUBLISHING COMPANY, L.L.C.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1996 1997
------------ -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................ $ 7,761 $ 19,110
Accounts receivable, less allowance for
doubtful accounts of $1,604 in 1996 and
$1,459 in 1997................................. 20,141 23,342
Inventories...................................... 4,408 2,491
Other prepaid expenses and current assets........ 730 1,009
-------- --------
Total current assets......................... 33,040 45,952
Property and equipment, net of accumulated
depreciation of $560 in 1996 and $1,058 in
1997............................................. 4,152 3,814
Goodwill, net of accumulated amortization of
$5,992 in 1996 and $11,996 in 1997............... 353,556 349,948
Subscriber list and established work force, net
of accumulated amortization of $3,000 in 1996
and $6,000 in 1997............................... 117,000 114,000
Deferred financing costs, net of accumulated
amortization of $3,276 in 1996 and $3,624 in
1997............................................. 10,735 10,387
Other assets....................................... 587 608
-------- --------
TOTAL ASSETS................................. $519,070 $524,709
======== ========
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities......... $ 20,430 $ 17,552
Accrued payroll and related costs................ 1,963 3,374
Customer incentives payable...................... 5,785 6,514
Current portion of unearned subscription
revenues, net of deferred subscription
acquisition costs of $43,835 in 1996 and
$44,561 in 1997................................ 27,328 28,993
Current portion of long-term debt................ 1,000 3,500
Other accrued expenses and current liabilities... 2,160 8,203
-------- --------
Total current liabilities.................... 58,666 68,136
Unearned subscription revenues, net of deferred
subscription acquisition costs of $41,168 in
1996 and $35,534 in 1997......................... 6,440 7,030
Long-term debt..................................... 299,000 296,250
Other noncurrent liabilities....................... 510 2,163
Commitments and contingencies
Member's Equity.................................... 154,454 151,130
-------- --------
TOTAL LIABILITIES AND MEMBERS' EQUITY........ $519,070 $524,709
======== ========
</TABLE>
See accompanying notes
3
<PAGE>
PETERSEN PUBLISHING COMPANY, L.L.C.
CONDENSED STATEMENTS OF OPERATIONS AND MEMBERS' EQUITY
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
PUBLISHING DIVISION OF PETERSEN PETERSEN PUBLISHING
PUBLISHING COMPANY (NOTE 1) COMPANY, L.L.C.
------------------------------- -------------------
THREE THREE
MONTHS MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
1996 1997
--------- ---------
<S> <C> <C>
Net revenues:
Advertising................................................ $31,385 $ 34,504
Newsstand.................................................. 10,973 10,543
Subscriptions.............................................. 10,453 9,944
Other...................................................... 2,883 2,482
------- --------
Total net revenues...................................... 55,694 57,473
Production, selling and other direct costs (including rent
paid to a related party of $1,149 and $1,044 for the three
months ended March 31, 1996 and March 31, 1997,
respectively)................................................ 44,671 40,027
------- --------
Gross profit............................................ 11,023 17,446
General and administrative expenses.......................... 6,857 5,108
Amortization of goodwill and other intangible assets......... 114 9,025
------- --------
Income from operations.................................. 4,052 3,313
Other (income) expense:
Interest income............................................ (91) (164)
Interest expense........................................... 152 7,665
Gain on sale of assets..................................... (1,512) (4)
------- --------
Income (loss) before provision for taxes................ 5,503 (4,184)
Provision for taxes.......................................... 138 --
------- --------
Net income (loss)....................................... $ 5,365 (4,184)
=======
Members equity at beginning of period........................ 154,454
Members' capital contributions............................... 860
--------
Members' equity at end of period............................. $151,130
========
</TABLE>
See accompanying notes.
4
<PAGE>
PETERSEN PUBLISHING COMPANY, L.L.C.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
PUBLISHING DIVISION OF
PETERSEN PETERSEN PUBLISHING
PUBLISHING COMPANY (NOTE 1) COMPANY, L.L.C.
--------------------------- -------------------
THREE THREE
MONTHS MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
1996 1997
--------------- ---------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss).................................................... $ 5,365 $(4,184)
Adjustment to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization...................................... 947 9,871
Gain on sale of assets............................................. (1,512) -
Changes in operating assets and liabilities........................ (10,126) 5,212
-------- -------
Net cash provided by (used in) operating activities.................. (5,326) 10,899
INVESTING ACTIVITIES
Capital expenditures on property and equipment....................... (557) (160)
Proceeds from sale of property and equipment......................... 2,387 -
-------- -------
Net cash provided by (used in) investing activities.................. 1,830 (160)
FINANCING ACTIVITIES
Repayment of amounts paid to sole shareholder........................ 7,050 -
Advances to affiliates of Petersen................................... (624) -
Repayment on Senior Credit Facility.................................. - (250)
Proceeds from issuance of members units.............................. - 860
-------- -------
Net cash provided by financing activities............................ 6,426 610
-------- ------
Increase in cash and cash equivalents................................ 2,930 11,349
Cash and cash equivalents at beginning of period..................... 947 7,761
-------- -------
Cash and cash equivalents at end of period........................... $ 3,877 $19,110
======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during period for:
Interest........................................................... $ 152 $ 4,364
======== =======
Taxes.............................................................. $ - $ 37
======== =======
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
During the three months ended March 31, 1997, the Company increased
goodwill and receivables and accrued liabilities by $2,396,000, representing
adjustments to the allocation of the purchase price of the Acquisition. These
adjustments related primarily to the lease of the Company's corporate
headquarters and adjustments to receivables acquired in the Acquisition.
See accompanying notes.
5
<PAGE>
PETERSEN PUBLISHING COMPANY, L.L.C.
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Petersen Publishing Company, L.L.C. ("the Company") is a Delaware limited
liability company. The Company is owned 99.9% by Petersen Holdings, L.L.C.
("Holdings"). The remaining 0.1% of the Company is owned by Brightview
Communications Group, Inc. ("Brightview"). The Company was organized in 1996
for the principal purpose of completing the acquisition (the "Acquisition") of
substantially all of the assets and assuming certain liabilities of the
Publishing Division of Petersen Publishing Company ("Petersen") (see Note 2).
The Company is engaged in the publishing business with revenues generated
primarily from the publication of various special interest magazines and the
sale of related advertising, principally within the United States.
Basis of Presentation
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period ended March 31, 1997
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1997. For further information, refer to the financial
statements and notes thereto included in the Company's special financial report
on Form 10-K for the three months ended December 31, 1996.
Upon completion of the Acquisition, the Company changed its year end to
December 31. The financial statements reflect the activity of the Company for
the three months ended March 31, 1997. All references to the three month period
ended March 31, 1997 relate to the activity of the Company. The unaudited
statement of operations for the three months ended March 31, 1996 reflect the
activity of Petersen. All references to the three months ended March 31, 1996
relate to the activity of Petersen.
Certain reclassifications have been made to the unaudited condensed
statements of operations for the three months ended March 31, 1996 to conform to
the presentation for the three months ended March 31, 1997.
Income Taxes
As a limited liability company, the Company is not subject to U.S. federal
income taxes or state income taxes. The Company reports other state taxes to
which it is subject under the liability method as required by Statement No. 109,
"Accounting for Income Taxes," issued by the Financial Accounting Standards
Board ("FASB"). Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse.
6
<PAGE>
PETERSEN PUBLISHING COMPANY, L.L.C.
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS--(CONTINUED)
2. ACQUISITION OF THE PUBLISHING DIVISION OF PETERSEN PUBLISHING COMPANY
In August 1996, the Company entered into an Asset Purchase Agreement to
purchase the majority of the assets of the publishing division of Petersen. The
aggregate purchase price was $450,000,000, plus the assumption of certain
liabilities totaling approximately $49,000,000. The Acquisition was completed on
September 30, 1996. In connection with the Acquisition, the Company recorded
goodwill of approximately $362,000,000 and other intangible assets of
approximately $120,000,000. Goodwill amortization expense for the three months
ended March 31, 1997 was $6,004,000. Amortization of other intangible assets was
$3,000,000 for the three months ended March 31, 1997.
In order to finance the Acquisition, the Company entered into a Senior
Credit Facility for up to $260,000,000, issued 11 1/8% Senior Subordinated
Notes for $100,000,000 and issued equity securities for $165,000,000. See Notes
3 and 4 for a more comprehensive discussion of the debt and equity issuances.
3. LONG-TERM DEBT
Senior Credit Facility:
On September 30, 1996, the Company entered into a Senior Credit Facility
with First Union National Bank of North Carolina and CIBC Inc. (the "Lenders")
pursuant to which the Lenders agreed to loan the Company up to $260,000,000.
Such amount was allocated among a revolving credit facility for up to
$60,000,000 (the "Revolver"), of which up to $10,000,000 can be in the form of
letters of credit; a tranche A term loan for up to $100,000,000 (the "Tranche A
Loan"); and a tranche B term loan for up to $100,000,000 (the "Tranche B Loan").
The Revolver and the Tranche A Loan bear interest at either LIBOR (5.4375%
at March 31, 1997), plus 1.375% to 2.750%, based on borrowings or the prime rate
of the agent bank (8.50% at March 31, 1997), plus .125% to 1.5%, based on
borrowings. As of March 31, 1997, the Company had no borrowings outstanding
under the Revolver. However, a letter of credit for $1,600,000 issued in January
1997 reduces the amount available under the Revolver. The letter of credit
expires in January 1998. Any future borrowings under the Revolver will mature on
December 31, 2002. As of March 31, 1997, the Company had $100,000,000
outstanding under the Tranche A Loan.
The Tranche B Loan bears interest at either LIBOR (5.4375% at March 31,
1997), plus 2.625% to 3.250%, based on borrowings or the prime rate of the agent
bank (8.50% at March 31, 1997), plus 1.375% to 2.0% based on borrowings. As of
March 31, 1997, the Company had $99,750,000 outstanding under the Tranche B
Loan.
The Revolver and Tranche A Loan mature on December 31, 2002 and Tranche B
Loan matures on September 30, 2004.
The Senior Credit Facility contains certain restrictive covenants regarding
capital expenditures, as well as financial covenants including a maximum
leverage ratio, minimum interest coverage ratio and minimum fixed charge
coverage ratio, all as defined in the Senior Credit Facility. As of March 31,
1997, the Company was in compliance with the covenants of the Senior Credit
Facility.
7
<PAGE>
PETERSEN PUBLISHING COMPANY, L.L.C.
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS--(CONTINUED)
The Senior Credit Facility is guaranteed by Holdings and BrightView.
The Company incurred costs of approximately $7,000,000 in connection with
the Senior Credit Facility. These costs have been included in Deferred Financing
Costs and are being amortized over the term of the loans. During the three
months ended March 31, 1997, the Company amortized approximately $248,000 of
such deferred financing costs.
11 1/8% Senior Subordinated Notes due 2006:
The Company and its wholly-owned subsidiary, Petersen Capital Corp.
(together, the "Issuers"), issued $100,000,000 in 11 1/8% Senior Subordinated
Notes due 2006 (the "Notes") pursuant to an Offering Memorandum dated November
20, 1996. The Notes bear interest at 11 1/8% per annum, payable semi-annually
on November 15 and May 15, commencing May 15, 1997. The Notes will mature on
November 15, 2006 and will not be subject to any sinking fund requirement. The
Notes are redeemable at the option of the Issuers, in whole or in part, at any
time on or after November 15, 2001, at the redemption prices set forth in the
Notes Purchase Agreement, plus accrued and unpaid interest to the date of
redemption. Under certain circumstances, prior to November 15, 1999, the
Issuers, at their option, may redeem in the aggregate up to 25% of the original
principal amount of the Notes at 111.125% of the aggregate principal amount so
redeemed, plus accrued and unpaid interest.
The Notes are general unsecured obligations of the Issuers and are
subordinated in right of payment to all existing and future senior indebtedness
of the Issuers.
The Company incurred costs of approximately $4,000,000 in connection with
the issuance of the Notes. These costs have been included in Deferred Financing
Costs and are being amortized over the term of the Notes. During the three
months ended March 31, 1997, the Company amortized approximately $100,000 of
such deferred financing costs.
On February 11, 1997, the Company registered the Notes with the Securities
and Exchange Commission pursuant to a registration statement on Form S-4 under
the Securities Act of 1933.
4. MEMBERS' EQUITY
The Company and Holdings are each limited liability companies organized
under the Delaware Limited Liability Company Act (the "LLC Act"). Holdings is
the Company's managing member and as such controls the policies and operations
of the Company. Holdings is governed by a limited liability company agreement
(the "LLC Agreement") among Willis Stein and Partners, L.P. (through Petersen
Investment Corp.), the former sole-shareholder of Petersen, certain members of
the Company's management and other investors (collectively the "Members"). The
LLC Agreement governs the relative rights and duties of the Members. BrightView
is Holdings' managing member and as such controls the policies and operations of
Holdings and of the Company through Holdings.
During the three months ended March 31, 1997, Holdings received $660,000 in
exchange for the issuance of additional Preferred Units and Common Units. Such
funds were contributed by Holdings to the Company. See Note 5 for a discussion
of other transactions concerning Members' Equity.
8
<PAGE>
PETERSEN PUBLISHING COMPANY, L.L.C.
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS--(CONTINUED)
5. RELATED PARTY TRANSACTIONS
In connection with the Acquisition, the Company entered into employment
agreements with three officers of the Company. Pursuant to these employment
agreements, the officers purchased Common Units and Preferred Units with
promissory notes aggregating $1,950,000. Of this amount, $200,000 was repaid in
March 1997. The balance of each promissory note is due and payable on the
earlier to occur of: (i) December 31, 2001; (ii) the termination of the
employment with the Company of the officers or (iii) a sale of the Company. Such
promissory notes will bear interest at a rate equal to the Company's weighted
average cost of borrowings. In addition, the Company and Holdings will issue to
each of the officers additional Common Units without additional consideration.
Such Common Units will vest ratably over a period of five years.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
The Company is a leading publisher of special-interest magazines. The
Company's diverse portfolio currently contains a total of 82 publications,
including 27 monthly publications, 10 bi-monthly publications and 45 single
issue or annual publications. The Company operates primarily within the
expanding special-interest segment of the consumer magazine publishing market.
The Company had net revenues of $57.5 million and $55.7 million for the three
months ended March 31, 1997 and 1996, respectively.
The Company's principal sources of revenues from the publication of its
magazines are derived from circulation and advertising. Circulation revenues are
generated from both subscription and newsstand sales. Advertising revenues of
the Company, as well as those of the consumer magazine industry in general, are
cyclical and dependent upon general economic conditions.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1997 Compared to Three Months Ended March 31,
1996
Total revenues for the three months ended March 31, 1997 increased by $1.8
million, or 3.2%, to $57.5 million from $55.7 million for the three months ended
March 31, 1996. This increase is primarily the result of an overall increase in
the Company's advertising rates and higher advertising revenues from certain
publications, offset by slight decreases in newsstand, subscriptons and other
revenues.
Production, selling and other direct costs for the three months ended March
31, 1997 decreased by $4.7 million, or 10.4%, to $40.0 million from $44.7
million for the three months ended March 31,1996, primarily as a result of
decreased paper costs and reduced production overhead costs. Production, selling
and other direct costs, as a percent of revenues, dropped over 10 percentage
points from 80.2% of revenues in 1996 to 69.7% of revenues in 1997.
General and administrative expenses for the three months ended March 31,
1997 decreased by $1.8 million, or 25.5%, to $5.1 million from $6.9 million for
the three months ended March 31, 1996, primarily due to a reduction in head-
count resulting in reduced overhead costs and reduced rent expense. General and
administrative expenses decreased as a percent of revenues over the same period
to 8.9% of revenues for the 1997 period from 12.3% of revenues for the 1996
period.
Amortization of goodwill and other intangible assets for the three months
ended March 31, 1997 increased by $8.9 million to $9.0 million for the three
months ended March 31, 1997 from $.1 million for the three months ended March
31, 1996 as a result of the allocation of assets acquired in the Acquisition.
Income from operations for the three months ended March 31, 1997 decreased
by $.8 million, or 1.8%, to $3.3 million for the three months ended March 31,
1997 from $4.1 million for the three months ended March 31, 1996, as a result of
higher revenues combined with lower production costs as discussed above, offset
by the increased amortization of goodwill and intangible assets associated with
the Acquisition.
Interest expense for the three months ended March 31, 1997 increased by
$7.5 million, to $7.7 million for the three months ended March 31, 1997 from $.2
million for the three months ended March 31, 1996 as a result of increased debt
issued in connection with the Acquisition. See Note 3 of the Notes to the
Unaudited Condensed Financial Statements.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents increased by $11.3 million for the
three months ended March 31, 1997. This compares to an increase of $2.9 million
for the three months ended March 31, 1996.
Net cash provided by operations was $10.9 million for the three months
ended March 31, 1997 compared to net cash used in operations of $5.4 million for
the three months ended March 31, 1996. This increase is primarily due to
differences in the timing of payables. Net cash provided by investing
activities during the three months ended March 31, 1996 included $2.4 million
resulting from the sale of property and equipment. Net cash provided by
financing activities during the three months ended March 31, 1996 included $7.0
million of amounts repaid by the sole shareholder of Petersen, while net cash
provided by financing activities during the three months ended March 31, 1997
included members' capital contributions of $.9 million.
The Company's source of funds during the three months ended March 31, 1997
was primarily from operating activities. In addition to its cash balances, the
Company has $58.4 million available under the Revolver (see Note 3 of the Notes
to the Unaudited Condensed Financial Statements). The Company believes that
these funds will provide the Company with sufficient liquidity and capital
resources for the Company to meet its current and future financial obligations,
including the payment of principal and interest on the Notes and Senior Credit
Facility, as well as to provide funds for the Company's working capital, capital
expenditures and other needs. No assurance can be given, however, that this will
be the case. The Company's future operating performance and ability to service
or refinance the Notes and to repay, extend or refinance the Senior Credit
Facility will be subject to future economic conditions and to financial,
business and other factors, many of which are beyond the Company's control.
EARNINGS BEFORE INTEREST TAXES DEPRECIATION AND AMORTIZATION
Earnings before interest, taxes, depreciation and amortization ("EBITDA") is a
widely used and commonly reported standard measure utilized by analysts and
investors in the analysis of the media industry. The following EBITDA
information can provide additional information for determining the ability of
the Company to meet its debt service requirements and for other comparative
analyses of the Company's operating performance relative to other publishing
companies.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1996 1997
------- -------
(000's)
(unaudited)
<S> <C> <C>
Total net revenues $55,694 $57,473
Production, selling & other direct costs
(excluding depreciation of $834 in
1996 and $498 in 1997) 43,837 39,529
------ ------
Gross profit 11,857 17,944
General & administrative expenses 6,857 5,108
Other adjustments (50) (169)
------ ------
EBITDA $ 5,050 $13,005
====== ======
</TABLE>
11
<PAGE>
EBITDA increased by $8.0 million or 157.5% during the three months ended March
31, 1997 as compared to the three months ended March 31, 1996. This increase was
mainly a result of strong advertising revenue growth across the Company's varied
portfolio and the Company's cost reduction initiatives that were implemented in
the fourth quarter of 1996. EBITDA as a percent of revenues was 22.6% for the
three months ended March 31, 1997, which represented a 13.5 percentage point
improvement over the three months ended March 31, 1996. The Company reduced
general and administrative expenses by $1.8 million or 25.5% on a quarterly
comparison, and reduced production selling and other direct costs (excluding
depreciation) by approximately $4.3 million.
12
<PAGE>
PETERSEN PUBLISHING COMPANY, L.L.C.
MARCH 31, 1997
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
None
13
<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 thereunto duly authorized.
Petersen Publishing Company, L.L.C.
Date: May 15, 1997 By: /s/ Richard S Willis
------------ --------------------------------
Richard S Willis
Executive Vice President and
Chief Financial Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 3/31/97
FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 19,110
<SECURITIES> 0
<RECEIVABLES> 24,801
<ALLOWANCES> 1,459
<INVENTORY> 2,491
<CURRENT-ASSETS> 45,952
<PP&E> 4,872
<DEPRECIATION> 1,058
<TOTAL-ASSETS> 524,709
<CURRENT-LIABILITIES> 68,136
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 151,130
<TOTAL-LIABILITY-AND-EQUITY> 524,709
<SALES> 57,473
<TOTAL-REVENUES> 57,473
<CGS> 40,027
<TOTAL-COSTS> 40,027
<OTHER-EXPENSES> 14,133
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,665
<INCOME-PRETAX> (4,184)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,184)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,184)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
