<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
<TABLE>
<S> <C>
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
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 000-____
</TABLE>
SILVER CINEMAS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 72-2656147
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
</TABLE>
4004 BELTLINE ROAD, SUITE 205, ADDISON, TEXAS 75001-4363
(Address of principal executive offices)
(Zip Code)
(972) 503-9851
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. 142,046 shares of common stock
as of August 11, 2000
-1-
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balanced Sheets as of June 30, 2000 (unaudited)
and December 31, 1999 3
Condensed Consolidated Statements of Operations (unaudited) for the
three and six months ended June 30, 2000 and 1999 4
Condensed Consolidated Statements of Cash Flows (unaudited) for the
six months ended June 30, 2000 and 1999 5
Notes to Condensed Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk 21
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 21
Item 2. Changes in Securities and Use of Proceeds 21
Item 3. Defaults Upon Senior Securities 21
Item 4. Submission of Matters to a Vote of Security Holders 21
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 22
Signatures 23
</TABLE>
-2-
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
ASSETS 2000 1999
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,968,587 $ --
Inventories 393,997 543,656
Receivables 864,667 1,025,754
Prepaid rent and other 3,073,467 2,080,460
------------- -------------
Total current assets 6,300,718 3,649,870
THEATER PROPERTIES AND EQUIPMENT, Net 65,728,712 67,088,707
GOODWILL - Net 44,104,488 46,930,594
OTHER ASSETS - Net 7,289,317 16,592,799
------------- -------------
TOTAL $ 123,423,235 $ 134,261,970
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES NOT SUBJECT TO COMPROMISE
CURRENT LIABILITIES:
Current portion of long-term debt $ 31,992,658 $ 119,465,800
Current portion of capital lease obligations 341,500 384,398
Net overdrafts of cash accounts 1,243,160
Accounts payable 916,635 2,393,909
Accrued film rentals 1,371,088 2,602,415
Accrued payrolls 426,856 1,443,154
Accrued property taxes and other liabilities 133,599 4,023,284
Accrued interest 292,814 2,198,500
------------- -------------
Total current liabilities 35,475,150 133,754,620
CAPITAL LEASE OBLIGATIONS, less current obligations 3,952,866 4,029,900
OTHER LONG-TERM OBLIGATIONS 1,469,019
LIABILITIES SUBJECT TO COMPROMISE 111,798,437
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIENCY:
Series preferred stock, 100,000 shares authorized, no shares issued Series A
preferred stock, $.01 par value, 400,000 shares authorized,
358,050 and 358,470 shares issued and outstanding at June 30, 2000
and December 31, 1999 35,805,036 35,847,036
Convertible preferred stock, $.01 par value, 5,000 shares authorized, 3,000 shares
issued and outstanding 300,000 300,000
Common stock, $.01 par value; 500,000 shares authorized, 142,046 and
145,144 shares issued and outstanding at June 30, 2000 and
December 31, 1999, respectively 1,420 1,451
Additional paid-in capital 142,162 142,162
Stockholder notes receivable (51,780) (51,780)
Deferred compensation (187,442) (262,470)
Accumulated deficit (63,812,614) (40,967,968)
------------- -------------
Total stockholders' deficiency (27,803,218) (4,991,569)
------------- -------------
TOTAL $ 123,423,235 $ 134,261,970
============= =============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-3-
<PAGE> 4
SILVER CINEMAS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 30,
------------------------------------------------------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
REVENUES:
Admissions $ 14,741,838 $ 15,532,997 $ 32,312,793 $ 35,921,266
Concessions 5,830,017 6,675,032 12,579,939 14,468,582
Other 249,966 418,858 680,603 832,120
------------ ------------ ------------ ------------
Total 20,821,821 22,626,887 45,573,335 51,221,968
COSTS AND EXPENSES:
Costs of operations:
Film rentals 6,301,062 7,150,756 13,818,027 15,538,737
Concessions supplies 937,662 1,278,739 2,229,661 2,683,683
Salaries and wages 3,827,175 4,184,099 7,783,840 8,394,995
Occupancy costs 3,832,712 4,452,459 8,230,993 8,866,306
Advertising 703,767 725,424 1,536,907 1,742,155
Utilities and other 2,893,775 4,386,167 6,299,521 8,020,579
General and administrative expenses 2,665,105 1,769,314 4,643,463 3,649,921
Depreciation and amortization 2,117,870 2,062,910 4,243,873 4,147,517
Reorganization charges 336,796 336,796
Asset impairment charges 987,996 7,487,996
------------ ------------ ------------ ------------
Total 24,603,920 26,009,868 56,611,077 53,043,893
------------ ------------ ------------ ------------
OPERATING LOSS (3,782,099) (3,382,981) (11,037,742) (1,821,925)
OTHER INCOME (EXPENSE):
Interest expense (2,142,445) (2,751,737) (5,778,252) (5,505,358)
Amortization of debt issue costs (125,000) (143,757) (666,031) (309,504)
Interest income and other expense, net 167,762 (1,478) 220,987 91,589
Gain on sale of theater 108,808 373,973
------------ ------------ ------------ ------------
Total (2,099,683) (2,788,164) (6,223,296) (5,349,300)
------------ ------------ ------------ ------------
LOSS BEFORE EXTRAORDINARY ITEM (5,881,782) (6,171,145) (17,261,038) (7,171,225)
EXTRAORDINARY ITEM - Loss on debt retirement (5,583,608) (5,583,608)
------------ ------------ ------------ ------------
NET LOSS (11,465,390) (6,171,145) (22,844,646) (7,171,225)
PREFERRED STOCK DIVIDENDS (804,535) (588,070) (1,495,308) (1,169,525)
------------ ------------ ------------ ------------
NET LOSS APPLICABLE TO COMMON STOCK $(12,269,925) $ (6,759,215) $(24,339,954) $ (8,340,750)
============ ============ ============ ============
</TABLE>
-4-
<PAGE> 5
SILVER CINEMAS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------------
2000 1999
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $(22,844,646) $(7,171,225)
Noncash items in net loss:
Depreciation and amortization 4,242,873 4,457,021
Straight-line rent adjustment 108,603 122,322
Gain on sale of theater -- (373,973)
Amortization of long-term liabilities 666,031 (108,238)
Capitalized interest -- (22,085)
Asset impairment charges 7,487,996
Extraordinary item 5,583,608
Reorganization Charges 336,796
Cash from (used for) working capital:
Receivables and other (682,261) 360,958
Accounts payable (1,477,276) 1,485,180
Accrued liabilities 2,477,019 (867,167)
----------- -----------
Net cash from operating activities (4,100,257) (2,117,207)
----------- -----------
INVESTING ACTIVITIES:
Acquisitions of theater properties and equipment -- (802,816)
Sale of theater -- 3,552,395
Additions to theater properties and equipment (6,723,924) (4,013,282)
Decrease (increase) in other assets 3,136,125 2,254,982
----------- -----------
Net cash used for investing activities (3,587,799) 991,279
----------- -----------
FINANCING ACTIVITIES:
Decrease in bank overdraft (1,243,160)
Proceeds from the issuance of debt 52,626,542
Payments of debt and capital leases (40,736,211) (259,360)
Payments on long-term liabilities -- (64,733)
Increase in debt issue costs (948,497) (152,636)
Issuance (repurchase) of capital stock (42,031) (650)
----------- -----------
Net cash from (used for) financing activities 9,656,643 (477,379)
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,968,587 (1,603,307)
CASH AND CASH EQUIVALENTS:
Beginning of period -- 2,880,955
----------- -----------
End of period $ 1,968,587 $ 1,277,648
=========== ===========
SUPPLEMENTAL INFORMATION -
Stock issued for notes receivable $ -- $ --
=========== ===========
Cash paid for interest $ 6,358,875 $ 5,521,857
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-5-
<PAGE> 6
SILVER CINEMAS INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL - Silver Cinemas International, Inc. and its subsidiaries
(collectively referred to as the "Company") own or lease and operate
motion picture theaters.
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - The
accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial information and the
instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion
of management, all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the financial position,
results of operations and cash flows for the periods presented have been
included. Results of operations for the periods presented herein are not
necessarily indicative of results of operations for any subsequent quarter
or the year ending December 31, 2000.
The information included in this Form 10-Q should be read in conjunction
with the audited financial statements and the notes thereto for the year
ended December 31, 1999 included in the Annual Report filed on Form 10-K
by the Company under the Securities Exchange Act of 1934 on April 15,
2000.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the
Securities and Exchange Commission's rules and regulations.
BANKRUPTCY FILING - On May 16, 2000 (the "Petition Date"), the Company
filed voluntary petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code with the United States Bankruptcy Court for the District
of Delaware (the "Court"). The Company is currently operating as
debtor-in-possession under the supervision of the Court. Under these
proceedings, substantially all liabilities, litigation and claims against
the Company in existence at the filing date are stayed unless the stay is
modified or lifted or payment has been otherwise authorized by the Court.
With final orders received June 14, 2000, the Court has authorized the
Company to enter into debtor-in-possession ("DIP") financing which will
provide financing of up to $50.0 million. As of June 30, 2000, the Company
has drawn approximately $32.0 million of these proceeds. The Company is
working toward the preparation of a plan of reorganization. Under Chapter
11, the Company has until September 13, 2000 (120 days from Petition
Date), to exercise their exclusive right to file a reorganization plan.
The Company is planning to file a motion to extend the exclusivity period.
These consolidated financial statements have been prepared on the basis of
accounting principles applicable to a going concern which assumes that the
Company will realize the carrying value of its assets, and satisfy its
obligations and commitments except as otherwise disclosed, in the normal
course of business. However, these filings and the circumstances relating
to this event raise substantial doubt about the Company's ability to
continue as a going concern. Furthermore, the Company's ability to
continue as a going concern is dependent upon, among other things, the
ability to formulate a plan of reorganization that will be confirmed by
the Court, maintain DIP financing, achieve profitable operations and
generate sufficient cash from operations and financing sources to meet
obligations.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the
Company to make estimates and assumptions that affect reported amounts of
assets, liabilities, income and expenses and disclosure of contingencies.
Actual results could differ from the estimates and judgements made in
preparing these financial statements which include assumptions made
concerning the acceptance of a plan of reorganization.
The Company's financial statements as of June 30, 2000, have been
presented in conformity with the AICPA's Statement of Position 90-7
"Financial Reporting By Entities In Reorganization Under the Bankruptcy
Code" ("SOP 90-7"). SOP 90-7 requires that pre-petition liabilities that
are subject to compromise be segregated in the
-6-
<PAGE> 7
Company's consolidated balance sheet as liabilities subject to compromise
and the identification of all transactions and events that are directly
associated with the reorganization of the Company in the consolidated
statement of operations. The liabilities are recorded at the amounts
expected to be allowed as claims by the Court, rather than the amounts for
which those allowed claims may ultimately be settled.
2. THEATER PROPERTIES AND EQUIPMENT
The following is a summary of theater properties and equipment:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
(UNAUDITED)
<S> <C> <C>
Land $ 1,513,200 $ 1,513,200
Buildings 9,740,478 9,744,723
Leasehold interests and improvements 35,876,818 32,356,325
Theater furniture and equipments 23,790,966 26,415,686
Theaters under construction 6,949,272 6,311,538
------------ ------------
Total 77,870,734 76,341,472
Less accumulated depreciation and amortization (12,142,022) (9,252,765)
------------ ------------
Theater properties and equipment - net $ 65,728,712 $ 67,088,707
============ ============
</TABLE>
3. OTHER ASSETS
The following is a summary of other assets:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
(UNAUDITED)
<S> <C> <C>
Noncompete agreements $ 2,026,400 $ 2,026,400
Debt issue costs 5,651,708 11,752,807
------------ ------------
Total 7,678,108 13,779,207
Less accumulated amortization (2,801,006) (2,765,483)
------------ ------------
Net 4,877,102 11,013,724
Employee notes receivable 128,189 128,189
Equipment, lease and other deposits 2,284,026 5,450,886
------------ ------------
Total $ 7,289,317 $ 16,592,799
============ ============
</TABLE>
-7-
<PAGE> 8
4. DEBT
The following is a summary of debt:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
(UNAUDITED)
<S> <C> <C>
10 1/2% Senior subordinated notes $ 99,580,000 $ 99,580,000
Prior Credit Agreement:
Term A 17,104,335
Term B 168,184
Revolver 2,503,281
Debtor-in-Possession:
Revolver 31,018,031
Construction loan 974,627
Other 110,000
------------ ------------
Total long-term debt 131,572,658 119,465,800
Less current portion 31,992,658 119,465,800
Less portion in liabilities subject to compromise 99,580,000
------------ ------------
Long-term debt, less current portion $ -- $ --
============ ============
</TABLE>
The senior subordinated notes (the "Notes") bear interest at 10 1/2% and
are due in 2005. The Notes are redeemable, in whole or in part, at the
option of the Company at a redemption price of 107.875% in 2001, 105.250%
in 2002, 102.625% in 2003 and 100% in 2004 and thereafter plus any accrued
but unpaid interest. In addition, on or before April 15, 2001, the Company
may, at its option and subject to certain requirements, use an amount
equal to the net cash proceeds from one or more public equity offerings,
as defined, to redeem up to an aggregate of 35% of the principal amount of
the Notes originally issued at a redemption price of 110.5% plus any
accrued but unpaid interest. Upon a change in control of the Company, as
defined in the indenture, the Company will be required to make an offer to
repurchase all or any part of each holder's Notes at a price equal to 101%
of the principal amount thereof plus interest. The Notes also include
restrictive covenants relative to the incurrence of additional
indebtedness, the payment of dividends and other matters.
The Company did not make a scheduled interest payment for the Notes when
due on April 15, 2000 and is not currently in compliance with certain
requirements of its senior secured credit agreement. Accordingly, the
Notes were included in the current portion of long-term debt on the
Company's consolidated balance sheet at December 31, 1999. The Notes are
included in liabilities subject to compromise at June 30, 2000 (See Note
5).
PRIOR CREDIT AGREEMENT - On October 6, 1999, the Company entered into a
four year, senior secured credit facility with aggregate availability of
$50 million, subject to a defined real estate collateral based borrowing
base (the "Prior Credit Facility"). The $50.0 million facility was
comprised of a revolving credit facility of up to $15.0 million (the
"Revolver"), term loans of up to $17.0 million ("Term A Loan") and term
loans of up to $18.0 million ("Term B Loans"). The Term A Loan was funded
in its entirety on October 8, 1999. Under the Term A Loan and the
Revolver, the Company utilized borrowings to fund working capital
requirements, and for other general corporate purposes, including, subject
to certain conditions, the acquisition and construction of theaters. The
Term B Loans could be used only for repurchasing the Notes, and the amount
of Term B Loans was limited to the lesser of (i) $18.0 and (ii) the amount
by which the real estate collateral-based borrowing base exceeds the sum
of the outstanding principal balance (including accrued interest) of the
Term A Loan and the $15.0 million revolving loan commitment). Borrowings
under the Prior Credit Facility ranked senior in right of payment to the
Notes and were secured by a perfected first priority security interest in
substantially all existing and future assets of the Company including: (i)
fee interests and certain leasehold interests in real property; (ii)
accounts receivable, equipment, inventory, and intangibles; and (iii) the
capital stock of the Company and its subsidiaries. Borrowings bore total
annual interest at 15.5% with annual interest at 12.875% due monthly and
the remaining interest due with the borrowings. The Company paid an annual
unused commitment fee of 0.50%.
-8-
<PAGE> 9
Obligations under the Prior Credit Facility to advance funds at any time
during the four-year term were subject to certain conditions customary in
secured credit facilities, including the absence of a default under the
Prior Credit Facility. The Prior Credit Facility contained a number of
covenants that, among other things, restricted the ability of the Company
and its subsidiaries to dispose of assets, incur additional indebtedness
or guarantees, prepay other indebtedness, pay dividends, create liens on
assets, enter into sale and leaseback transactions, make investments,
loans, or advances, make acquisitions, engage in mergers or
consolidations, make capital expenditures, change the business conducted
by the Company or its subsidiaries or engage in certain corporate
activities. The Company was not in compliance with certain requirements,
including its failure to make a scheduled interest payment for the
Company's Notes when due on April 15, 2000. Accordingly, the total
borrowings and deferred interest of approximately $19.8 million under the
Prior Credit Facility was included in the current portion of long-term
debt on the Company's consolidated balance sheet at December 31, 1999.
Additional advances of approximately $12.4 million were made under the
revolving loan commitment through June 2, 2000, at which time all amounts
owed were paid. Commencing April 29, 2000, loans under the Prior Credit
Facility bore annual interest at 17.5%.
DEBTOR-IN-POSSESSION FACILITY - On June 2, 2000, the Company entered into
a Loan and Security Agreement (the "Loan Agreement") which provides up to
$50.0 million (including $15.0 million for construction of certain new
theaters) in DIP financing. Borrowings under the Loan Agreement bear
interest at prime plus 4.0%, are limited by defined theater level cash
flows and revenues and are secured by substantially all of the Company's
assets. Certain restrictive covenants apply, including maintenance of
certain financial levels such as defined earnings before interest, taxes,
depreciation and amortization ("EBITDA") and limitations on issuance of
additional indebtedness, capital expenditures, asset sales and payment of
dividends. The Company is not in compliance with certain requirements,
including its failure to achieve required EBITDA levels. The Loan
Agreement terminates upon the earlier of December 2, 2001, the termination
of the financing order entered by the Court on May 17, 2000, or the date
the Court confirms a plan of reorganization.
Proceeds from the Loan Agreement were used to repay all borrowings under
the Prior Credit Facility. As a result, the Company recognized an
extraordinary loss of approximately $5.6 million associated with the Prior
Credit Facility's unamortized debt issue costs.
5. LIABILITIES SUBJECT TO COMPROMISE
The principal categories of claims classified as liabilities subject to
compromise under reorganization proceedings are identified below. All
amounts below may be subject to future adjustment depending on bankruptcy
court action, further developments with respect to disputed claims,
determination as to the value of any collateral securing claims, or other
events.
<TABLE>
<CAPTION>
JUNE 30,
2000
<S> <C>
Accounts payable $ 1,148,434
Accrued film rentals 941,545
Accrued interest 6,426,649
Other accrued expenses 2,277,161
10 1/2% Senior subordinated notes 99,580,000
Other long-term obligations 1,424,648
------------
$111,798,437
============
</TABLE>
As a result of the bankruptcy filing, no principal or interest payments
will be made on any pre-petition debt without bankruptcy court approval or
until the effective date of a bankruptcy plan. Contractual interest
expense not recorded on the outstanding 10 1/2% senior subordinated notes
totaled approximately $1.3 million for the period from May 16, 2000
through June 30, 2000.
-9-
<PAGE> 10
Prior to the bankruptcy filing, the Company's debt included $99.6 million
of the outstanding 10 1/2% senior subordinated notes due in April 2005
plus accrued interest of $6.4 million. Interest on these notes is payable
semiannually in arrears on April 15 and October 15 of each year. The
Company was in default of the terms of this obligation due to the
Company's failure to make the April 15, 2000 interest payment.
6. CAPITAL STOCK
As of June 30, 2000 and December 31, 1999, aggregate Series A Preferred
Stock dividends of $6,386,957 and $5,148,497, respectively, are in
arrears. The Company also has Convertible Preferred Stock dividends in
arrears of $246,048 and $79,200 as of June 30, 2000 and December 31, 1999,
respectively.
7. SEGMENTS
The Company identifies its segments based on type of films exhibited and
management responsibility. Segment profit (loss) is measured as operating
profit (loss), which is defined as profit (loss) before other income
(expense). Information on segments and a reconciliation to net loss for
the three months and six months ended June 30, 2000 and 1999 follows (in
thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2000 JUNE 30, 2000
-------------------------------------------- -------------------------------------------
SILVER SILVER
LANDMARK CINEMAS LANDMARK CINEMAS
(SPECIALTY (SECOND AND (SPECIALTY (SECOND AND
FILM) FIRST-RUN) CONSOLIDATED FILM) FIRST-RUN) CONSOLIDATED
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 13,256 $ 7,565 $ 20,821 $ 28,929 $ 16,644 $ 45,573
Depreciation and
amortization 1,200 916 2,118 2,399 1,836 4,244
Reorganization charges 337 337 337 337
Asset impairment charges 386 602 988 886 6,602 7,488
Operating income (loss) (310) (3,410) $ (3,782) 678 (11,654) $ (11,038)
Interest expense and
debt issue costs (2,267) (6,444)
Interest income and
other expense 167 221
------------ ------------
Loss before extraordinary item $ (5,882) $ (17,261)
============ ============
</TABLE>
-10-
<PAGE> 11
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1999 JUNE 30, 1999
-------------------------------------------- -------------------------------------------
SILVER SILVER
LANDMARK CINEMAS LANDMARK CINEMAS
(SPECIALTY (SECOND AND (SPECIALTY (SECOND AND
FILM) FIRST-RUN) CONSOLIDATED FILM) FIRST-RUN) CONSOLIDATED
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 13,034 $ 9,593 $ 22,627 $ 31,367 $ 19,855 $ 51,222
Depreciation and
amortization 1,167 896 2,063 2,323 1,825 4,148
Operating income (loss) (676) (2,707) $ (3,383) 2,707 (4,529) $ (1,822)
Interest expense and
debt issue costs (2,896) (5,815)
Interest income and
other expense (1) 92
Gain on sale of theater 109 374
------------ ------------
Net loss $ (6,171) $ (7,171)
============ ============
</TABLE>
8. ASSET IMPAIRMENT AND REORGANIZATION CHARGES
Based on its continuing evaluation of recoverability of long-lived theater
assets, the Company recorded $1.0 million and $6.5 million impairment of
long-lived asset charges in June and March 2000, respectively,
representing the value of assets abandoned or impaired as a result of the
closing of three second run theaters (20 screens) and one specialty
theater (3 screens) and the closing of 17 second run theaters (124
screens) on May 1, 2000.
Reorganization charges resulting from the Company's reorganization filings
incurred during the three months ended June 30, 2000 are as follows (in
thousands):
<TABLE>
<S> <C>
Professional fees $256
Costs associated with unit closings and other 81
----
Total $337
====
</TABLE>
9. INCOME TAXES
As a result of net losses and the Company's inability to recognize a
benefit for its deferred tax assets, the Company did not record a
provision for income taxes in the three or six months ended June 30, 2000
and 1999. The amount of net operating losses carryforwards available for
future use may be subject to reduction as a result of the expected plan of
reorganization.
-11-
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION.
OVERVIEW
The following analysis of the financial condition and results of operations
of Silver Cinemas International ("Silver Cinemas") and its wholly owned
subsidiaries, Silver Cinemas, Inc. ("Silver") and Landmark Theatre Corp.
("Landmark") (collectively referred to as the "Company") should be read in
conjunction with the Condensed Consolidated Financial Statements and Notes
thereto included elsewhere herein.
In the six months ended June 30, 2000, the Company opened one specialty
theater with 7 screens and closed 18 second run theaters, two first run theaters
and one specialty theater as a result of unfavorable base renewals or individual
theater performance. In April 2000 the Company opened one second run theater (6
screens). As of August 11, 2000, the Company's total theater and screen count is
83 and 382, respectively.
Revenues for the six months ended June 30, 2000 declined $5.6 million, or
11.0%, to $45.6 million, as a result of decreased attendance. In the six months
ended June 30, 2000, the Company incurred a net loss of $22.8 million compared
with a net loss for the same period of 1999 of $7.2 million.
The consolidated operating loss for the first six months of 2000 was $11.0
million, compared with an operating loss of $1.8 million for the six months
ended June 30, 1999. The loss in 2000 included noncash charges totaling $7.5
million for the impairment of value of certain theaters and reorganization costs
of $337,000.
SEGMENT DATA
A summary of the results of operations for each of the Company's principal
business segments is displayed in Note 7 to the condensed consolidated financial
statements.
The Company's business operations are aligned into the following two
segments: Landmark (Specialty Film) and Silver Cinemas (primarily second-run).
-12-
<PAGE> 13
RESULTS OF OPERATIONS OF LANDMARK
THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1999
The following table sets forth information for the three months ended June
30, 2000 and 1999 for Landmark.
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED
------------------------ ------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999
------------------------ ------------------------
<S> <C> <C> <C> <C>
Revenues:
Admissions $ 10,605 80.0% $ 10,433 80.0%
Concessions 2,416 18.2 2,315 17.8
Other 235 1.8 286 2.2
---------- ---------- ---------- ----------
Total 13,256 100.0 13,034 100.0
Costs and expenses:
Cost of operations:
Film rentals 4,703 35.5 5,157 39.6
Cost of concessions 330 2.5 404 3.1
Payroll and related expenses 2,286 17.2 2,126 16.3
Occupancy costs 2,082 15.7 1,763 13.5
Advertising 364 2.7 430 3.3
Other theater operating costs 1,429 10.8 1,883 14.4
---------- ---------- ---------- ----------
Total 11,194 84.4 11,763 90.2
General and administrative 786 5.9 780 6.0
Depreciation and amortization 1,200 9.1 1,167 9.0
Asset impairment charges 386 2.9
---------- ---------- ---------- ----------
Operating loss $ (310) (2.3)% $ (676) (5.2)%
========== ========== ========== ==========
</TABLE>
Admissions Revenues. Admissions revenues increased $0.2 million or 1.6% to
$10.6 million during the three months ended June 30, 2000 compared to the three
months ended June 30, 1999. The increased admissions revenue was primarily the
result of a 6.6% decrease in attendance from 1,776,000 to 1,659,000 offset by an
increase in the average ticket price from $5.87 to $6.39. Landmark benefits from
having an average ticket price that is substantially higher than the national
average ticket and strong customer loyalty due to their dedication to the
specialty film market.
Concessions Revenues. Concessions revenues increased $0.1 million or 4.4% to
$2.4 million during the three months ended June 30, 2000 compared to the three
months ended June 30, 1999. The increase in concession revenue was primarily the
result of concession price increases.
Film Rental Expenses. Film rental expenses as a percentage of admissions
revenue decreased from 49.4% to 44.3% as a result of graduated rate film mix.
Landmark's film rental rates are typically below film rental rates of first-run
theaters, which average in the low to mid 50% range.
-13-
<PAGE> 14
Cost of Concessions. Concession costs as a percentage of concession revenue
decreased for the three months ended June 30, 2000 compared to the three months
ended June 30, 1999 from 17.5% to 13.7%. The reduction is primarily attributable
to concession item mix.
Payroll and Related Expense. Payroll expense increased from $2.1 million for
the three months ended June 30, 1999 to $2.3 million for the three months ended
June 30, 2000. Payroll per attendee increased from $1.20 per attendee to $1.38
per attendee. The increase is primarily attributable to a decline in attendance
and wage increases.
Occupancy Costs. Occupancy costs increased from $1.8 million for the three
months ended June 30, 1999 to $2.1 million for the three months ending June 30,
2000 due to the opening of a new theater in early 2000.
Advertising Expenses. Advertising expenses remained flat at $0.4 million for
the three months ended June 30, 2000 compared to the three months ended June 30,
1999.
General and Administrative Expenses. General and administrative expenses
remained flat at $0.8 million for the three months ended June 30, 2000 and the
three months ended June 30, 1999.
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1999
The following table sets forth information for the six months ended June 30,
2000 and 1999 for Landmark:
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED
----------------------- -----------------------
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999
----------------------- -----------------------
<S> <C> <C> <C> <C>
Revenues:
Admissions $ 23,214 80.3% $ 25,375 81.0%
Concessions 5,190 17.9 5,518 17.6
Other 525 1.8 474 1.4
---------- ---------- ---------- ----------
Total 28,929 100.0 31,367 100.0
Costs and expenses:
Cost of operations:
Film rentals 10,454 36.1 11,527 36.8
Cost of concessions 778 2.7 964 3.1
Payroll and related expenses 4,417 15.3 4,324 13.8
Occupancy costs 3,966 13.7 3,473 11.1
Advertising 862 3.0 975 3.1
Other theater operating costs 2,991 10.3 3,458 11.0
---------- ---------- ---------- ----------
Total 23,468 81.1 24,721 78.9
General and administrative 1,498 5.2 1,616 5.0
Depreciation and amortization 2,399 8.3 2,323 7.4
Asset impairment charges 886 3.1
---------- ---------- ---------- ----------
Operating income $ 678 2.3% $ 2,707 8.7%
========== ========== ========== ==========
</TABLE>
Admissions Revenues. Admissions revenues decreased $2.2 million or 8.5% to
$23.2 million during the six months ended June 30, 2000 compared to the six
months ended June 30, 1999. The decreased admissions
-14-
<PAGE> 15
revenue was primarily the result of a 15.2% decrease in attendance from
4,293,000 to 3,642,000 partially offset by an increase in the average ticket
price from $5.91 to $6.38. Landmark benefits from having an average ticket price
that is substantially higher than the national average ticket and strong
customer loyalty due to their dedication to the specialty film market.
Concessions Revenues. Concessions revenues decreased $0.3 million or 5.9% to
$5.2 million during the six months ended June 30, 2000 compared to the six
months ended June 30, 1999. The decrease in concession revenue was primarily the
result of a decrease in attendance.
Film Rental Expenses. Film rental expenses as a percentage of admissions
revenue remained relatively stable at about 45% for both the six months ended
June 30, 1999 and June 30, 2000. Landmark's film rental rates are typically
below film rental rates of first-run theaters, which average in the low to mid
50% range.
Cost of Concessions. Concession costs as a percentage of concession revenue
decreased for the six months ended June 30, 2000 compared to the six months
ended June 30, 1999 from 17.5% to 15.0%. The reduction is primarily attributable
to concession item mix.
Payroll and Related Expense. Payroll expense increased from $4.3 million for
the six months ended June 30, 1999 to $4.4 million for the six months ended June
30, 2000. Payroll per attendee increased from $1.01 per attendee to $1.21 per
attendee. The increase is primarily attributable to a decline in attendance and
wage increases.
Occupancy Costs. Occupancy costs increased from $3.5 million for the six
months ended June 30, 1999 to $4.0 million for the six months ending June 30,
2000 due to the opening of a new theater in early 2000.
Advertising Expenses. Advertising expenses decreased from $1.0 million for
the six months ended June 30, 1999 to $0.9 million for the six months ended June
30, 2000.
General and Administrative Expenses. General and administrative expenses
decreased from $1.6 million for the six months ended June 30, 1999 to $1.5
million for the three months ended June 30, 2000.
-15-
<PAGE> 16
RESULTS OF OPERATIONS OF SILVER CINEMAS
THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1999
The following table sets forth information for the three months ended June
30, 2000 and 1999 for Silver Cinemas:
<TABLE>
<CAPTION>
------------------------ ------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999
------------------------ ------------------------
<S> <C> <C> <C> <C>
Revenues:
Admissions $ 4,137 54.7% $ 5,100 53.2%
Concessions 3,415 45.1 4,360 45.4
Other 13 0.2 133 1.4
---------- ---------- ---------- ----------
Total 7,565 100.0 9,593 100.0
Costs and expenses:
Cost of operations:
Film rentals 1,598 21.1 1,994 20.8
Cost of concessions 607 8.0 874 9.1
Payroll and related expenses 1,542 20.4 2,059 21.5
Occupancy costs 1,750 23.1 2,688 28.0
Advertising 340 4.5 295 3.1
Other theater operating costs 1,465 19.4 2,503 26.1
---------- ---------- ---------- ----------
Total 7,302 96.5 10,413 108.6
General and administrative 1,818 24.0 991 10.3
Depreciation and amortization 916 12.1 896 9.3
Reorganization charges 337 4.4
Asset impairment charges 602 8.0
---------- ---------- ---------- ----------
Operating loss $ (3,410) (45.0)% $ (2,707) (28.2)%
========== ========== ========== ==========
</TABLE>
Admissions Revenues. Admissions revenue decreased $1.0 million or 18.9% to
$4.1 million during the three months ending June 30, 2000 compared to the three
months ending June 30, 1999. The decreased admission revenue was primarily the
result of a 31.3% decrease in attendance (due to theater closings) from
3,225,000 to 2,316,000 partially offset by an increase in the average ticket
price from $1.58 to $1.79.
Concession Revenues. Concession revenue decreased $0.9 million or 21.7% to
$3.4 million during the three months ended June 30, 2000 compared to the three
months ended June 30, 1999. The decreased concession revenue was primarily the
result of a decrease in attendance due to theater closings.
Film Rental Expenses. Film rental expenses as a percentage of admissions
revenues declined from 39.1% for the three months ended June 30, 1999 compared
to 38.6% for the three months ended June 30, 2000. The decrease was primarily
attributable to graduated rate film mix.
Cost of Concessions. Concession costs as a percentage of concession revenue
for the period to period comparison decreased from 20.0% of concession sales to
17.8% primarily due to cost control efforts.
Payroll and Related Expenses. Payroll expense decreased from $2.1 million
for the three months ended June 30, 1999 to $1.5 million for the three months
ended June 30, 2000, due to theater closings. Payroll per attendee increased
from $0.64 per attendee to $0.67 per attendee. The increase is primarily
attributable to a decline in attendance.
-16-
<PAGE> 17
Occupancy Costs. Occupancy costs decreased $0.9 million to $1.8 million or
34.9% for the three months ended June 30, 2000 from $2.7 million for the three
months ended June 30, 1999. The decrease in occupancy costs is primarily
attributable to theater closings and lower percentage rents.
Advertising Expenses. Advertising expenses were stable at $0.3 million for
the three months ended June 30, 1999 and the three months ended June 30, 2000.
Advertising expenses comprised 4.5% and 3.1% of total revenues for the three
months ended June 30, 2000 and 1999, respectively.
General and Administrative Expenses. General and administrative expenses
increased from $1.0 million to $1.8 million or 84.4% for the three months ended
June 30, 2000 compared to the three months ended June 30, 1999.
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1999
The following table sets forth information for the six months ended June 30,
2000 and 1999 for Silver Cinemas:
<TABLE>
<CAPTION>
------------------------ ------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999
------------------------ ------------------------
<S> <C> <C> <C> <C>
Revenues:
Admissions $ 9,099 54.7% $ 10,547 53.1%
Concessions 7,390 44.4 8,950 45.1
Other 155 0.9 358 1.8
---------- ---------- ---------- ----------
Total 16,644 100.0 19,855 100.0
Costs and expenses:
Cost of operations:
Film rentals 3,364 20.2 4,011 20.2
Cost of concessions 1,451 8.7 1,720 8.6
Payroll and related expenses 3,367 20.2 4,071 20.5
Occupancy costs 4,265 25.6 5,393 27.1
Advertising 675 4.1 767 3.9
Other theater operating costs 3,309 19.9 4,563 23.0
---------- ---------- ---------- ----------
Total 16,431 98.7 20,525 103.3
General and administrative 3,092 18.6 2,034 10.2
Depreciation and amortization 1,836 11.0 1,825 9.2
Reorganization charges 337 2.0
Asset impairment charges 6,602 39.7
---------- ---------- ---------- ----------
Operating loss $ (11,654) (70.0)% $ (4,529) (22.7)%
========== ========== ========== ==========
</TABLE>
Admissions Revenues. Admissions revenue decreased $1.4 million or 13.7% to
$9.1 million during the six months ending June 30, 2000 compared to the six
months ending June 30, 1999. The decreased admission revenue was primarily the
result of a 21.3% decrease in attendance (due to theatre closings) from
6,566,000 to 5,169,000 partially offset by an increase in the average ticket
price from $1.60 to $1.77.
Concession Revenues. Concession revenue decreased $1.6 million or 17.4% to
$7.4 million during the six months ended June 30, 2000 compared to the six
months ended June 30, 1999. The decreased concession revenue was primarily the
result of a decrease in attendance due to theatre closings.
-17-
<PAGE> 18
Film Rental Expenses. Film rental expenses as a percentage of admissions
revenues declined from 38.0% for the six months ended June 30, 1999 compared to
37.0% for the six months ended June 30, 2000. The decrease was primarily
attributable to graduated rate film mix.
Cost of Concessions. Concession costs as a percentage of concession revenue
for the period to period comparison increased from 19.2% of concession sales to
19.6% primarily due to implementation of the Company's reduced price concession
menu at additional locations.
Payroll and Related Expenses. Payroll expense decreased from $4.1 million
for the six months ended June 30, 1999 to $3.4 million for the six months ended
June 30, 2000. Payroll per attendee increased from $0.62 per attendee to $0.65
per attendee. The increase is primarily attributable to a decline in attendance.
Occupancy Costs. Occupancy costs decreased $1.1 million to $4.3 million or
20.9% for the six months ended June 30, 2000 from $5.4 million for the six
months ended June 30, 1999. The decrease in occupancy costs is primarily
attributable to theater closings and lower percentage rents.
Advertising Expenses. Advertising expenses decreased $0.1 million or 12.0%
from the six months ended June 30, 1999 to $0.7 million for the six months ended
June 30, 2000. Advertising expenses comprised 4.1% and 3.9% of total revenues
for the six months ended March 31, 2000 and 1999, respectively.
General and Administrative Expenses. General and administrative expenses
increased from $2.0 million to $3.1 million or 52% for the six months ended June
30, 2000 compared to the six months ended June 30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
Revenues are collected in cash, primarily through box office receipts and
the sale of concession items. Because revenues are received in cash prior to the
payment of related expenses, there are, in effect, minimal accounts receivable.
This, in combination with minimal inventory requirements, creates a negative
working capital position, which provides certain operating capital.
During the first six months of 2000, the Company's capital requirements were
the result of the continued construction of one theater in Chicago. Such capital
expenditures were financed with bank borrowings, and internally generated cash.
The Company's operating activities provided net cash of approximately $6.5
million during the six months ended June 30, 2000. Net cash used in operations
resulted primarily from a net loss of $22.8 million, adjusted for depreciation
and amortization expense of $4.2 million, reorganization charges of $0.3
million, asset impairment charges of $7.5 million, and an increase in accounts
payable and accrued liabilities of $1.0 million.
Cash used by investing activities was approximately $1.2 million, which
consisted primarily of $6.7 million used for construction of new theaters
offset by a reduction of other assets of $5.5 million.
Cash provided by financing activities was approximately $9.7 million during
the six months ended June 30, 2000. Additional debt financing of approximately
$52.6 million was offset by an increase in debt issue costs of approximately
$1.0 million and a decrease in net bank overdrafts of $1.2 million.
"Same Theater" attendance at the Company's Landmark and Silver theaters has
declined by approximately 16.6% and 6.5% for the six months ending June 30, 2000
compared to the six months
-18-
<PAGE> 19
ended June 30, 1999. Management believes this trend is the result of several
factors including the development of megaplexes in certain markets, changes in
film and video release patterns, and the overall strength of the US economy. If
this trend continues, the Company's ability to generate liquidity will continue
to be negatively impacted.
The preceding statements concerning the attendance declines may constitute
forward-looking statements within the meaning of the federal securities laws.
The Company warns that many factors could, individually or in aggregate, lead to
further declines in theater attendance, including, without limitation, the
following: consumer spending trends and habits; increased competition in the
theater industry; adverse developments in economic factors influencing the
exhibition industry; and lack of demand for films by the general public. The
Company does not expect to update such forward-looking statements continually as
conditions change, and readers should consider that such statements pertain only
to the date hereof.
On May 16, 2000, the Company filed Chapter 11 petitions to address certain
operational and liquidity disruptions. The Company's liquidity position for the
remainder of fiscal 2000 will be impacted primarily by the success of
initiatives undertaken to improve theater level cash flows and the effects of
the Chapter 11 petitions. The Company's uses of capital for the remainder of
fiscal 2000 are expected to include working capital for operating expenses and
satisfaction of current liabilities, expenditures related to maintaining and
refurbishing existing theaters, interest payments on outstanding borrowings and
costs associated with the Chapter 11 petitions. The Company's capital resources
cannot be determined until a plan of reorganization has been developed and
confirmed in connection with the Chapter 11 petitions.
As a debtor-in-possession under the Bankruptcy Code, actions to collect
prepetition indebtedness are stayed and certain contractual obligations may not
be enforced against the Company. With the approval of the bankruptcy court,
certain of these obligations may be paid prior to the confirmation of the
reorganization plan. To date, the Company has received approval to pay customary
prepetition obligations associated with the daily operation of its business,
including employee wages and other obligations. The Company has not completed
its review of all of its prepetition contracts and leases for assumption or
rejection. The ultimate amount of, and settlement terms for, such liabilities
are subject to an approved plan of reorganization and, accordingly, the timing
and form of settlement are not presently determinable.
DEBTOR-IN-POSSESSION FACILITY
On June 2, 2000, the Company entered into a Loan and Security Agreement (the
"Loan Agreement") which provides up to $50.0 million (including $15.0 million
for construction of certain new theaters) in DIP financing. Borrowings under the
Loan Agreement bear interest at prime plus 3.0%, are limited by defined theater
level cash flows and revenues and are secured by substantially all of the
Company's assets. Certain restrictive covenants apply, including maintenance of
certain financial levels such as defined earnings before interest, taxes,
depreciation and amortization and limitations on insurance of additional
indebtedness, capital expenditures, asset sales and payment of dividends. The
Loan Agreement terminates upon the earlier of December 2, 2001, the termination
of the financing order entered by the Court on May 17, 2000, or the date the
Court confirms a plan of reorganization.
Proceeds from the Loan Agreement were used to repay all borrowings under the
Company's Prior Credit Facility. As a result, the Company recognized an
extraordinary loss of $5.6 million associated with the Prior Credit Facility's
unamortized debt issue costs.
As of June 30, 2000, the Company had $6,386,957 and $246,048 of Series A
Preferred Stock and Convertible Preferred Stock dividends in arrears,
respectively.
-19-
<PAGE> 20
INFLATION
Inflation has not had a significant impact on the Company's operations to
date.
SEASONALITY
The Company's quarterly results of operations tend to be affected by film
release patterns by producers and distributors, and the commercial success of
films. In the past the year-end holiday season and the summer resulted in
higher-than-average quarterly revenues for the Company.
-20-
<PAGE> 21
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company does not have any derivative financial instruments in
place as of June 30, 2000.
The following table presents the carrying and fair value at June 30,
2000 of the Company's senior subordinated debt along with its
interest rates. Fair value is determined as the quoted price of the
financial instrument.
<TABLE>
<CAPTION>
EXPECTED
MATURITY
DATE 2005 TOTAL FAIR VALUE
<S> <C> <C> <C> <C>
Fixed Rate Debt $99,580,000 $99,580,000 $9,958,000
Interest Rate 10.5%
</TABLE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On May 16, 2000, the Company filed voluntary petitions for
Reorganization under Chapter 11 of the Bankruptcy Code with the
United States Bankruptcy Court for the District of Delaware.
The Company is from time to time a party to legal proceedings that
arise in the ordinary course of business. Management does not believe
that the resolution of any threatened or pending legal proceedings
will have a material adverse effect on the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Company did not make scheduled senior subordinated notes interest
payments of approximately $5.0 million when due on April 15, 2000 and
is not currently in compliance with certain requirements of its
Debtor-In-Possession facility.
The senior subordinated notes include a restrictive covenant relative
to the payment of dividends. As of June 30, 2000, aggregate Series A
Preferred Stock and convertible preferred stock dividends of
$6,386,957 and $246,048 are in arrears.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
There have been no matters submitted to a vote of the holders of
securities of the Company since the Company became subject to the
reporting requirements of the Securities Exchange Act of 1934, as
amended.
ITEM 5. OTHER INFORMATION
None.
-21-
<PAGE> 22
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
EXHIBIT
NO. DESCRIPTION
27.1 Financial Data Schedule.
(b) Reports on Form 8-K.
DATE OF REPORT AND REGARDING (SEE ACTUAL FILING FOR COMPLETE
FILING DATE DESCRIPTION)
May 16, 2000 Announcement that the Company filed voluntary
petitions under Chapter 11 of the United
States Bankruptcy Code with the United States
Bankruptcy Court for the District of Delaware
in Wilmington, Delaware.
Announcement that Foothill Capital
Corporation had issued a commitment to the
Company to provide $50.0 million in
debtor-in-possession financing.
-22-
<PAGE> 23
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SILVER CINEMAS INTERNATIONAL, INC.
By /s/ THOMAS J. ANDRUS
------------------------------
Thomas J. Andrus
Chief Financial Officer
-23-
<PAGE> 24
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
