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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20479
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 14, 1996
Andrews Group Incorporated
(Exact name of registrant as specified in its charter)
Delaware 0-9008 95-2683875
(State or other (Commission) (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
3200 Windy Hill Road, Suite 1100-West, Atlanta, Georgia 30339
(Address of principal executive offices) (Zip Code)
(770) 955-0045
Registrant's telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As previously reported, NWC Acquisition Corporation, a
Delaware corporation and a wholly owned subsidiary of New World Communications
Group Incorporated ("NWCAC"), New World WVTM Communications of Alabama, Inc.,
an Alabama corporation and a wholly owned subsidiary of NWCAC ("WVTM
Communications"), WVTM Television, Inc., a Nevada corporation and a wholly
owned subsidiary of WVTM Communications ("WVTM Television"), and WVTM License,
Inc., a Nevada corporation and a wholly owned subsidiary of WVTM Communications
(together with WVTM Communications and WVTM Television, the "WVTM Sellers"),
and NBC are parties to an Asset Purchase Agreement dated May 22, 1996 (the
"WVTM Asset Purchase Agreement").
On August 14, 1996, upon the terms set forth in the WVTM
Asset Purchase Agreement, Birmingham Broadcasting (WVTM TV), Inc., a wholly
owned subsidiary of NBC, completed its purchase from the WVTM Sellers of
substantially all of the assets of the WVTM Sellers related to the ownership
and operation of Television station WVTM, Channel 13, Birmingham, Alabama for a
purchase price of $200 million, subject to adjustment based on Net Working
Capital (as defined in the WVTM Asset Purchase Agreement) as of such date.
On August 15, 1996, New World Communications Group
Incorporated and NBC issued a press release announcing the consummation of the
transactions contemplated by the WVTM Asset Purchase Agreement, which is filed
herewith as an exhibit and incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro Forma Financial Information
The information set forth in Exhibit 99.2 filed
herewith is incorporated herein by reference.
(c) The following items are filed with this report:
EXHIBIT NO. DESCRIPTION
99.1 Asset Purchase Agreement dated May 22, 1996
by and among NWC Acquisition Corporation,
New World WVTM Communications of Alabama,
Inc., WVTM Television, Inc., WVTM License,
Inc. and National Broadcasting Company,
Inc. (1)
99.2 Pro forma financial information.
99.3 Press Release dated August 15, 1996 issued
by National Broadcasting Company, Inc. and
New World Communications Group
Incorporated. (2)
- ----------------------
(1) Incorporated herein by reference to Exhibit 99.2 filed as part of
the Form 8-K dated May 22, 1996 of New World Communications Group
Incorporated.
(2) Incorporated herein by reference to the identical exhibit filed as
part of the Form 8-K dated August 14, 1996 of New World
Communications Group Incorporated.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Andrews Group Incorporated
(Registrant)
Date: August 29, 1996 By:\s\ Joram C. Salig
------------------
Name: Joram C. Salig
Title: Assistant Secretary
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EXHIBIT INDEX
Exhibit Description
99.1 Asset Purchase Agreement dated May 22, 1996 by and among NWC
Acquisition Corporation, New World WVTM Communications of
Alabama, Inc., WVTM Television, Inc., WVTM License, Inc. and
National Broadcasting Company, Inc. (1)
99.2 Pro forma financial information.
99.3 Press Release dated August 15, 1996 issued by National
Broadcasting Company, Inc. and New World Communications Group
Incorporated. (2)
- ----------------------
(1) Incorporated herein by reference to Exhibit 99.2 filed as
part of the Form 8-K dated May 22, 1996 of New World
Communications Group Incorporated.
(2) Incorporated herein by reference to the identical exhibit
filed as part of the Form 8-K dated August 14, 1996 of New
World Communications Group Incorporated.
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Exhibit 99.2
Andrews Group Incorporated
Pro Forma Financial Information
Basis of Presentation
In March 1995 NWCG sold its investment in WSBK-TV (the "Boston Station")
for gross proceeds of $107.5 million. NWCG repaid $19.5 million of the
Bank Credit Agreement Loans in March 1995 and $77.3 million of the
Step-Up Notes in April 1995 from the net proceeds of the Boston Station
sale.
NWCG purchased certain debt and equity securities of Argyle Television
Holding Inc. ("Argyle") for total consideration of approximately $750.4
million, including the $100 million in cash paid for an option in 1994
and assumption of debt of approximately $283.6 million. Argyle
controlled four VHF television stations, KDFW-TV (Dallas, Texas),
KTBC-TV (Austin, Texas), KTVI-TV (St. Louis, Missouri) and WVTM-TV
(Birmingham, Alabama). For financial reporting purposes, the acquisition
occurred on March 31, 1995. FCC approval for change in control of the
television stations occurred on April 14, 1995. The acquisition has been
accounted for as a purchase.
In July 1995 NWCG purchased Cannell Entertainment Inc. for Series E
Cumulative Convertible Redeemable Preferred Stock ("Series E Preferred
Stock") valued at approximately $30 million and certain other
consideration. The acquisition has been accounted for as a purchase.
In August 1996 NWCG sold substantially all of the assets of WVTM-TV and
its subsidiaries (collectively, the "Birmingham Station") to National
Broadcasting Company, Inc. ("NBC") for gross proceeds of $200 million,
subject to certain adjustments. NWCG repaid $80.0 million of the
Acquisition Credit Agreement debt in August 1996 from the net proceeds
of the Birmingham Station sale.
The following pro forma financial information gives effect to, as of
January 1, 1995, the sale of the Boston Station, repayment of a portion
of NW Television's debt, the purchase of Argyle, borrowings necessary to
fund the Argyle acquisition, the issuance of preferred stock, the sale
of the Birmingham Station, and the repayment of a portion of NWCAC's
debt. The pro forma financial information does not necessarily reflect
the future results or the results that would have occurred had these
transactions actually occurred on January 1, 1995 (in thousands, except
per share).
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ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
PRO FORMA STATEMENT OF OPERATIONS
Six Months Ended June 30, 1996
(Dollars in Millions)
(unaudited)
<TABLE>
<CAPTION>
Historical
Results of
Historical WVTM Adjustments Pro forma
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net revenues $ 707.3 $ (11.0) $ 696.3
Operating expenses:
Direct costs 421.5 (2.6) 418.9
Selling, general and administrative expenses 211.2 (2.2) 209.0
Amortization of goodwill and intangibles 37.8 (1.6) (0.9) (g) 35.3
---------------- ---------------- ---------------- ----------------
Operating income 36.8 (4.6) 0.9 33.1
---------------- ---------------- ---------------- ----------------
Other (expense) income:
Interest expense (164.3) 3.2 (h) (161.1)
Interest and net investment income 34.4 1.9 (i) 36.3
Gain on sale of business interests, net 0.3 0.3
Amortization of debt issuance costs and other (14.9) (14.9)
---------------- ---------------- ---------------- ----------------
(144.5) 0.0 5.1 (139.4)
---------------- ---------------- ---------------- ----------------
Loss before income taxes, minority interest
and equity in net income of investees (107.7) (4.6) 6.0 (106.3)
Benefit (provision) for income taxes 4.9 0.4 (j) 5.3
Minority interest in loss (earnings) of subsidiaries 6.8 (2.0) (f) 4.8
Equity in net income of investees 1.9 1.9
---------------- ---------------- ---------------- ----------------
Loss before extraordinary item (94.1) (4.6) 4.4 (94.3)
Extraordinary item, net of tax
---------------- ---------------- ---------------- ----------------
Net loss $ (94.1) $ (4.6) $ 4.4 $ (94.3)
================ ================ ================ ================
</TABLE>
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ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
PRO FORMA BALANCE SHEET
Six Months Ended June 30, 1996
(Dollars in Millions)
(unaudited)
<TABLE>
<CAPTION>
Historical
Results of
Assets Historical WVTM Adjustments Pro forma
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Cash $ 84.0 $ - $ 124.0 (a) $ 208.0
Trade receivables, net 386.8 (5.2) - 381.6
Inventories 95.9 - - 95.9
Television program contract rights 11.6 (0.2) - 11.4
Film costs, net 81.4 - - 81.4
Deferred taxes 56.8 - - 56.8
Prepaid expenses and other 91.4 (0.2) - 91.2
--------------- --------------- --------------- ---------------
Total current assets 807.9 (5.6) 124.0 926.3
Property, plant and equipment, net 304.3 (8.6) - 295.7
Intangible assets, net 2,408.4 (86.4) (44.0) (b) 2,278.0
Loans to affiliates, net 278.8 - - 278.8
Other assets 218.4 - - 218.4
--------------- --------------- --------------- ---------------
$ 4,017.8 $ (100.6) $ 80.0 $ 3,997.2
=============== =============== =============== ===============
Liabilities and Stockholder's deficit
Current liabilities:
Current portion of long-term debt and notes payable $ 53.8 $ - $ (4.1) (d) $ 49.7
Short-term borrowings 11.0 - - 11.0
Accounts payable and accrued expenses 329.2 (1.4) 9.6 (c) 337.4
Television program contracts payable 14.4 (0.1) - 14.3
Deferred income 30.4 - - 30.4
Participations and residuals payable 54.2 - - 54.2
--------------- --------------- --------------- ---------------
Total current liabilities 493.0 (1.5) 5.5 497.0
Long-term debt 2,693.1 (75.9) (d) 2,617.2
Indebtedness to affiliates 542.7 - 542.7
Other liabilities 170.7 (0.1) 0.8 (e) 171.4
Minority interest 445.7 (21.3) (f) 424.4
Redeemable preferred stock of subsidiaries 340.8 - 340.8
Commitments and contingencies
Stockholder's deficit:
Common stock, $1.00 par value; 1,000 shares
authorized, issued and outstanding
Additional paid-in-capital 40.6 40.6
Accumulated deficit (708.6) (99.0) 170.9 (f) (636.7)
Cumulative translation adjustment (0.2) (0.2)
--------------- --------------- --------------- ---------------
Total stockholder's deficit (668.2) (99.0) 170.9 (596.3)
--------------- --------------- --------------- ---------------
$ 4,017.8 $ (100.6) $ 80.0 $ 3,997.2
=============== =============== =============== ===============
</TABLE>
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ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
PRO FORMA STATEMENT OF OPERATIONS
Year Ended December 31, 1995
(Dollars in Millions)
(unaudited)
<TABLE>
<CAPTION>
Historical Historical Historical
Results of Results of Results of
Historical WSBK Argyle WVTM Adjust. Pro forma
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues $ 1,434.3 $ (5.7) $ 29.6 $ (19.1) $ - $ 1,439.1
Operating expenses:
Direct costs 900.4 (5.2) 10.1 (5.4) - 899.9
Selling, general and administrative
expenses 402.0 (1.0) 6.5 (3.6) - 403.9
Amortization of goodwill and intangibles 68.3 (0.8) 6.9 (2.3) (3.7) (g) 68.4
Restructuring 25.0 - - - - 25.0
------------ ------------ ------------ ------------ ------------ ------------
Operating income 38.6 1.3 6.1 (7.8) 3.7 41.9
------------ ------------ ------------ ------------ ------------ ------------
Other (expense) income:
Interest expense (304.9) - - - 2.4 (h) (302.5)
Interest and net investment income 45.8 - - - 3.3 (i) 49.1
Gain on sale of business interests, net 48.0 - - - (41.7) (l) 6.3
Amortization of debt issuance costs
and other (36.5) - (9.8) - 9.8 (k) (36.5)
------------ ------------ ------------ ------------ ------------ ------------
(247.6) - (9.8) - (26.2) (283.6)
------------ ------------ ------------ ------------ ------------ ------------
Loss before income taxes, minority
interest equity in net income of
investees and extraordinary items (209.0) 1.3 (3.7) (7.8) (22.5) (241.7)
Provision for income taxes (40.2) - (0.1) - 31.3 (j) (9.0)
Minority interest in loss (income)
of subsidiaries 12.5 - - - 0.9 (f) 13.4
Equity in net income of investees 1.1 - - - 1.1
------------ ------------ ------------ ------------ ------------ ------------
Loss before extraordinary item (235.6) 1.3 (3.8) (7.8) 9.7 (236.2)
Extraordinary item (3.3) - - - - (3.3)
============ ============ ============ ============ ============ ============
Net loss $ (238.9) $ 1.3 $ (3.8) $ (7.8) $ 9.7 $ (239.5)
============ ============ ============ ============ ============ ============
</TABLE>
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Notes to Pro Forma Financial Information
(a) Reflects cash received on the sale of the Birmingham Station,
net of cash paid to reduce a portion of NWCAC's debt.
(b) Reflects an adjustment to intangible assets as a result of a
reduction in the valuation allowance recorded for net
operating losses.
(c) Reflects income taxes payable related to the sale of the
Birmingham Station, the reduction of accrued interest
associated with the reduction of a portion of NWCAC's debt and
costs accrued associated with the sale of the Birmingham
Station.
(d) Reflects the reduction of a portion of NWCAC's debt with the
net proceeds from the sale of the Birmingham Station.
(e) Reflects the estimated deferred tax effect of the sale of the
Birmingham Station.
(f) Reflects adjustment for the sale of the Birmingham Station.
(g) Reflects the increase of amortization of intangible assets and
depreciation of property, plant and equipment based on the
fair value assets acquired from Argyle, net of a reduction
associated with the sale of the Birmingham Station.
(h) Reflects adjustments to interest expense for the sale of the
Boston Station in 1995, additional borrowings under the
Acquisition Credit Agreement to finance the purchase of Argyle
and repay Argyle's debt assumed in 1995, and for the sale of
the Birmingham Station in 1996.
(i) Reflects interest income earned on net proceeds from the sale
of the Birmingham Station.
(j) Reflects adjustment of the provision for income taxes in
accordance with SFAS No. 109; in 1995, the adjustment is
primarily related to the sale of the Boston Station.
(k) Reflects the elimination of Argyle-related corporate expenses
as a result of the consolidation of operations and the
adjustment of total corporate expenses based on management's
estimate of total corporate expenses.
(l) Reflects elimination of the gain for the sale of the Boston
Station.
