<PAGE>
Relates to Form S-1
Registration Nos. 333-71175
333-72227
Filed under Rule 424(b)(3) and (c)
PROSPECTUS SUPPLEMENT NO. 1
TO
PROSPECTUSES
OF
SFX ENTERTAINMENT, INC.
DATED FEBRUARY 11, 1999
THE INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT SHOULD BE READ IN
CONJUNCTION WITH THE PROSPECTUSES. CAPITALIZED TERMS USED IN THIS PROSPECTUS
SUPPLEMENT AND NOT DEFINED HEREIN HAVE THE MEANINGS SET FORTH IN THE
PROSPECTUSES.
RECENT DEVELOPMENTS
SFX has completed the acquisitions of Cellar Door and Integrated
Sports International substantially on the terms summarized in the Prospectuses.
Financial information for SFX's fiscal year ended December 31, 1998
has recently become available. Revenue for 1998 increased to $884.3 million
from $96.1 million in 1997. Adjusted EBITDA (defined as operating income plus
depreciation and amortization, non-cash and non-recurring charges, and income
from equity investments) was $87.2 million versus $11.0 million last year. The
net loss applicable to common stock was $68.7 million for 1998 compared to net
income of $3.8 million last year. Basic and dilutive net loss per common share
was $2.75 in 1998 versus net income per common share of $0.26 in 1997.
On a pro forma basis, assuming all closed acquisitions, as well as the
pending Marquee acquisition, were completed as of January 1, 1997, revenue for
the year ended December 31, 1998 would have been $1.300 billion, an increase of
27% over the pro forma $1.020 billion of the previous year, and pro forma
Adjusted EBITDA including certain cost savings related to the acquisitions
would have grown 29% to $157 million, compared to $122 million in 1997.
The following table sets forth certain unaudited consolidated
financial information of SFX for the year ended December 31, 1998 and
corresponding audited information for the year ended December 31, 1997.
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SFX ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Year Ended
December 31,
-----------------------------
1998 1997
(Unaudited)
------------ ------------
<S> <C> <C>
Revenue $ 884,286 $ 96,144
Operating expenses:
Cost of revenue 678,756 73,881
Selling, general and administrative expenses 111,748 9,536
Depreciation and amortization, including $2,406
of integration costs in 1998 62,197 5,431
Corporate expenses, including $530 of Triathlon
fees in 1998 11,194 2,206
Non-recurring charges 5,600 --
Non-cash compensation and other non-cash charges 34,051 --
------------ ------------
Operating income (loss) (19,260) 5,090
Income from equity investments, net (4,630) (509)
Interest expense 50,759 1,590
Investment income (4,491) (295)
Minority interest 2,036 --
------------ ------------
Income (loss) before provision for income taxes (62,934) 4,304
Provision for income taxes 3,000 490
------------ ------------
Net income (loss) (65,934) 3,814
Accretion on stock subject to redemption (2,750) --
------------ ------------
Net income (loss) applicable to common stock $ (68,684) $ 3,814
============ ============
Basic and dilutive net income (loss) per common
share $ (2.75) $ 0.26
============ ============
Weighted average basic and dilutive common shares
outstanding 24,978,413 14,445,000
</TABLE>
The date of this Prospectus Supplement is February 25, 1999.
