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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) March 3, 1994
THE ACTAVA GROUP INC.
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 1-5706 58-0971455
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
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4900 GEORGIA-PACIFIC CENTER, ATLANTA, GEORGIA 30303
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 404/658-9000
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
(a) On March 3, 1994, The Actava Group Inc. (the "Company")
reported financial results for 1993 and announced the suspension of the
dividend on its Common Stock and the appointment of a special committee of
independent directors to conduct a search for a new president to succeed
Charles R. Scott, the Company's president and chief executive officer, all as
described in the press release filed as an exhibit to this Report. The
information contained in such press release is hereby incorporated by reference
into this Report.
(b) Also, on March 3, 1994, the Company announced the possible
prepayment of the remaining balance of approximately $27 million due under its
loan (the "Loan") to Triton Group Ltd. ("Triton") as described in the press
release filed as an exhibit to this Report. The information contained in such
press release is hereby incorporated by reference into this Report.
(c) On March 16, 1994, the Company announced the election of
Michael E. Cahr to the Board of Directors of the Company and also announced
that it has been advised by Triton that Triton may seek to impose certain
requirements on the Company as a condition to prepayment of the Loan, all as
described in the press release filed as an exhibit to this Report. The
information contained in such press release is hereby incorporated by reference
into this Report.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
1. Press release of the Company dated March 3, 1994
regarding 1993 results.
2. Press release of the Company dated March 3, 1994,
regarding the Triton loan.
3. Press release of the Company dated March 16, 1994,
regarding election of a new director and the Triton
loan.
SIGNATURES
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.
THE ACTAVA GROUP INC.
By:/s/ Frederick B. Beilstein, III
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Frederick B. Beilstein, III
Senior Vice President-Treasurer
April 4, 1994 and Chief Financial Officer
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EXHIBIT INDEX
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Exhibit Manually Signed
Number Description Original of Form 8-K
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1. Press release of the Company
dated March 3, 1994 regarding
1993 results.
2. Press release of the Company
dated March 3, 1994 regarding
the Triton loan.
3. Press release of the Company
dated March 16, 1994, regarding
election of a new director and
the Triton loan.
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Exhibit 1.
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NEWS RELEASE
FOR IMMEDIATE RELEASE
THE ACTAVA GROUP REPORTS 1993 RESULTS AND ANNOUNCES
SUCCESSION PLAN AND SUSPENSION OF DIVIDEND
ATLANTA, GA (March 3, 1994) - The Actava Group Inc. (NYSE:ACT) today
reported a net loss of $47.6 million, or $2.77 per share, for the year ended
December 31, 1993, compared with a net profit of $11.6 million, or $.70 per
share, for 1992. Actava also announced that its Board of Directors has
suspended the dividend on its Common Stock as a result of the loss incurred in
1993 and has appointed a special committee of independent directors to conduct
a search for a new president to succeed Charles R. Scott, Actava's president
and chief executive officer.
Actava's sales for 1993 were $1.2 billion compared with 1992 sales of
$1.1 billion. The sales increase resulted primarily from the acquisition of
Diversified Products Corporation (DP(R)) in June 1993.
Scott said, "I am very disappointed with our 1993 results but believe
that the problems we have experienced have been properly addressed and that a
turn-around is in progress. For example, we have changed more than ten key
members of our senior management team in the past eight months. In addition,
we have outsourced several functions in a number of our companies in order to
improve operating results and reduce costs."
Frederick B. Beilstein, Actava's chief financial officer, said, "The
decision to suspend the dividend is designed to conserve cash and is based on
the philosophy of the Board of Directors that dividends should be paid from
current earnings rather than retained earnings."
The primary factors contributing to the 1993 loss, according to
Beilstein, were manufacturing problems experienced at the Company's Snapper
Division, a continuation of Snapper's program to reduce production and
shipments to distributors in order to balance production to estimated retail
sales, an increase in certain product-related expenses at Snapper, and
unanticipated operating problems at DP. In addition, Beilstein said Actava
wrote down the book value of its investment in Sienna Plantation, a real estate
venture south of Houston, Texas, and recorded additional reserves at its
photofinishing company in the fourth quarter to provide for the future costs
associated with additional plant and administrative consolidations.
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Fourth Quarter Results
Actava reported a fourth quarter net loss of $31.0 million or $1.76
per share compared with a net profit of $5.0 million or $.31 per share for the
same period of 1992. Sales for the fourth quarter were $319.5 million compared
to $276.6 million for the fourth quarter of 1992.
Subsidiary Developments
In announcing Actava's fourth quarter and 1993 results, Scott reviewed
developments at Actava's subsidiary companies. "On a positive note," Scott
said, "we are very pleased with the performance of two of our sporting goods
companies. Nelson/Weather-Rite, our camping and outdoor equipment company,
continued its growth as operating income in 1993 improved by 43 percent over
1992. In addition, the operating income at Hutch Sports USA grew 27 percent
during 1993." Hutch produces and sells sporting equipment under licensing
agreements from the National Football League, Major League Baseball, the
National Basketball Association, The Walt Disney Company, Warner Bros., and
various colleges and universities.
Scott said Actava is disappointed with the results to date of its June
1993 acquisition of DP, but continues to believe that DP has tremendous
potential. Actava has made a number of management changes at DP, including the
appointment of James L. Marden as DP's president and chief executive officer.
Scott added, "We have a high confidence in DP's new management team and believe
that DP should show substantially improved results in 1994."
With respect to Snapper, Scott pointed out that Actava announced in
March 1993 that it had retained Merrill Lynch to assist in exploring
alternatives for realizing value from the Company's investment in Snapper.
Scott said these efforts have not been successful to date and have resulted in
a substantial distraction for Snapper's management, distributors and dealers.
As a result, Scott said Actava has suspended its efforts to find alternatives
for Snapper and has instructed Snapper's management to devote their full time
and attention to improving operating results. In August, Jerry J. Schweiner
was named president and chief executive officer of Snapper, and he has
subsequently recruited several new members to the senior management team.
Scott said Actava is pleased with the progress being made by Snapper's new
management team.
Actava's 1993 financial results include the results of Qualex Inc.,
the largest photofinisher in the United States. Actava owns 51 percent of the
voting stock of Qualex, and the remaining 49 percent is owned by Eastman Kodak
Company (NYSE:EK). The accounts of Qualex are consolidated with those of
Actava, and Kodak's interest in the earnings and equity of Qualex are reflected
as a minority interest. Scott said the revenues and operating income of Qualex
were basically flat in 1993 compared with 1992.
Management Succession
Scott, who celebrated his 65th birthday last year, said he has been
discussing the subject of management succession with Actava's Board of
Directors for several months. As a result of these discussions, the Board has
appointed a committee of independent directors to select a
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successor to Scott and has named John Imlay, a director of Actava, to serve
as chairman of the committee. Scott said, "I fully support the decision to
begin a search for my successor and look forward to working closely with the
succession committee and with the individual ultimately elected by the Board to
succeed me as president."
The Actava Group provides high quality, brand-name consumer products
through distribution channels in the areas of sports, fitness and recreation.
Actava has five companies engaged in the leisure industry: DP(R) (fitness and
recreation equipment); Qualex (photofinishing); Hutch Sports USA (sporting
goods equipment); Nelson/Weather-Rite (camping and outdoor products); and
Willow Hosiery (athletic and family hosiery). Another member of the Actava
Group is Snapper, which manufacturers and markets premium quality lawn care and
garden products.
COMPANY CONTACT: Frederick B. Beilstein, III
Senior Vice President, Treasurer
and Chief Financial Officer
and Bridget B. Sullivan
Manager, Investor Relations
(404) 658-9000
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THE ACTAVA GROUP INC.
SUMMARY OF EARNINGS
(In thousands except per share)
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Three Months Ended Twelve Months Ended
December 31 December 31
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1993 1992 1993 1992
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Sales $319,484 $276,626 $1,241,111 $1,148,743
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Net income (loss) before
cumulative effect of change
in accounting principle (30,986) 5,027 (43,190) 10,565
Cumulative effect of change
in accounting principle - - (4,404) 1,034
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Net income (loss) after
cumulative effect of change
in accounting principle $(30,986) $ 5,027 $ (47,594) $ 11,599
======= ======= ========= =========
Income (loss) per common share:
Before cumulative effect of
change in accounting principle $ (1.76) $ 0.31 $ (2.52) $ 0.64
Cumulative effect of change
in accounting principle - - (0.25) 0.06
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Net income (loss) after
cumulative effect of change
in accounting principle $ (1.76) $ 0.31 $ (2.77) $ 0.70
======= ======= ========= =========
Average common and common
equivalent shares 17,635 16,544 17,163 16,544
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Exhibit 2.
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NEWS RELEASE
FOR IMMEDIATE RELEASE
ACTAVA GROUP ANNOUNCES POSSIBLE PREPAYMENT
OF OBLIGATIONS FROM TRITON GROUP
ATLANTA, GA (March 3, 1994) - The Actava Group Inc. (NYSE:ACT)
announced today that it has been advised that Triton Group Ltd. (ASE:TGL) is
seeking to make arrangements to prepay the remaining balance of approximately
$27 million due under the loan previously made by Actava to Triton. The loan,
which was originally made in 1991, is secured by 4,413,598 shares of Actava's
common stock owned by Triton.
Triton has advised Actava that it has received a bank commitment for a
loan that would enable Triton to prepay in full its obligations to Actava. The
commitment, according to Triton, is subject to certain conditions to closing.
Triton plans to pledge the shares of Actava's common stock owned by Triton to
secure the new bank loan. Actava has entered into an agreement to provide
registration rights and certain other rights with respect to the shares of
Actava common stock to be pledged by Triton if Triton's new loan is
consummated. This agreement is also subject to certain conditions.
Triton and Actava are parties to a Stockholder Agreement under which
Triton and Actava have agreed that the Board of Directors of Actava will
consist of nine members, seven of which will be designated by Actava and two of
which will be designated by Triton. Triton has agreed under the Stockholder
Agreement to vote its shares of Actava's common stock in favor of Actava's
nominees to the Board of Directors for as long as Triton remains obligated
under the loan made by Actava to Triton. Triton's obligation to vote for
Actava's nominees to the Board
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of Directors will be terminated if Triton prepays its obligations to Actava.
Triton has indicated that it will communicate with certain other major
stockholders of Actava before it makes any decisions with respect to its Actava
stock.
The Actava Group provides high quality, brand-name consumer products
through distribution channels in the areas of sports, fitness and recreation.
Actava has five companies engaged in the leisure industry: DP(R) (fitness and
recreation equipment); Qualex (photofinishing); Hutch Sports USA (sporting
goods equipment); Nelson/Weather-Rite (camping and outdoor products); and
Willow Hosiery (athletic and family hosiery). Another member of the Actava
Group is Snapper, which manufactures and markets premium quality lawn care and
garden products.
COMPANY CONTACT: Frederick B. Beilstein, III
Senior Vice President, Treasurer
and Chief Financial Officer
and Bridget B. Sullivan
Manager, Investor Relations
(404) 658-9000
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Exhibit 3.
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FOR IMMEDIATE RELEASE NEWS RELEASE
ACTAVA GROUP ANNOUNCES ELECTION OF NEW DIRECTOR
ATLANTA, GA (March 16, 1994) -- The Actava Group Inc. (NYSE: ACT) today
announced that Michael E. Cahr has been elected to its Board of Directors.
Cahr is an executive with a major venture capital fund and also serves as a
member of the Board of Directors of several public companies, including Triton
Group Ltd. (ASE:TGL), which owns approximately 25% of the outstanding shares of
Actava's common stock.
Cahr was nominated to serve on the Board of Directors of Actava by Triton.
Triton and Actava are parties to a Stockholder Agreement under which Triton has
the right to designate two of the nine members of Actava's Board of Directors.
Richard Nevins, president of Richard Nevins and Associates, a financial
advisory firm, was previously elected to Actava's Board of Directors as a
representative of Triton.
As previously announced, Triton has advised Actava that it has received a
bank commitment for a loan that would enable Triton to pre-pay in full the
remaining balance of approximately $27 million due under the loan previously
made by Actava to Triton. The commitment, according to Triton, is subject to
certain conditions and is scheduled to be funded on or about March 31, 1994.
In addition, Triton has informed Actava that Triton may seek to impose certain
requirements on Actava as a condition to Triton's repayment of the loan.
Actava also confirmed that, as previously announced, a special committee of its
Board of Directors is continuing its search for an executive to succeed Charles
R. Scott as Actava's President and Chief Executive Officer.
The Actava Group provides high quality, brand-name consumer products
through distribution channels in the areas of sports, fitness and recreation.
Actava has five companies engaged in the leisure industry: DP(R) (fitness and
recreation equipment); Qualex (photofinishing); Hutch Sports USA (sporting
goods equipment); Nelson/Weather-Rite (camping and outdoor products); and
Willow Hosiery (athletic and family hosiery). Another member of the Actava
Group is Snapper, which manufactures and markets premium quality lawn care and
garden products.
COMPANY CONTACT: Frederick B. Beilstein, III
Sr. V.P., Treasurer & CFO
and Bridget B. Sullivan
Manager, Investor Relations
(404) 658-9000
