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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) DECEMBER 6, 1994
THE ACTAVA GROUP INC.
(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 of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
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4900 GEORGIA-PACIFIC CENTER, ATLANTA, GEORGIA 30303
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: 404/658-9000
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Item 2. Acquisition or Disposition of Assets
The Actava Group Inc. ("Actava" or the "Company") has transferred
ownership of its four sporting goods subsidiaries to Roadmaster Industries,
Inc. ("Roadmaster") in exchange for 19,169,000 shares of Roadmaster's Common
Stock (the "Exchange Transaction"). The closing of the transaction was
effective as of December 6, 1994 (the "Closing Date"). Actava now owns
approximately 39% of the issued and outstanding shares of Roadmaster's Common
Stock based on 48,588,444 shares of Roadmaster's Common Stock outstanding as of
the Closing Date. The consideration received by Actava in the Exchange
Transaction was determined through arm's length negotiations between Actava and
Roadmaster.
The four Actava subsidiaries transferred to Roadmaster were Diversified
Products Corporation ("Diversified Products"), Hutch Sports USA Inc. ("Hutch"),
Nelson/Weather-Rite, Inc. ("Nelson/Weather-Rite"), and Willow Hosiery Company
Inc. ("Willow"), (collectively referred to as the "Sports Subsidiaries"). On
the Closing Date, the aggregate book value of the Sports Subsidiaries was
approximately $72.6 million. The market value of the shares of Roadmaster's
Common Stock received by Actava in exchange for the Sports Subsidiaries was
approximately $76.7 million as of the Closing Date. Due to the nature of the
exchange, Actava will record its investment in Roadmaster on its books at an
amount equal to the aggregate book value of the Sports Subsidiaries as of the
Closing Date rather than recognizing a gain on the transaction.
Pursuant to the terms of a Shareholders' Agreement executed by Actava,
Roadmaster, and two officers and directors of Roadmaster in connection
with the Exchange Transaction, four persons designated by Actava have been
elected to the Board of Directors of Roadmaster, which now consists of nine
members. The four Roadmaster directors designated by Actava are John D.
Phillips, President and Chief Executive Officer of Actava, Carl E. Sanders, a
member of the Board of Directors of Actava and the Chairman of the Atlanta law
firm Troutman Sanders, Clay C. Long, a senior partner in Long, Aldridge &
Norman, an Atlanta law firm, and Michael P. Marshall, a private investor and
the former Chairman of the Board of Directors of Resurgens Communications
Group, Inc. Subject to the terms and limitations contained in the
Shareholders Agreement, Actava will continue to have the right to designate
four of the nine members of the Board of Directors of Roadmaster.
The Exchange Transaction was approved by Actava's stockholders
at a Special Meeting of Stockholders held on December 6, 1994.
2
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Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
Not Applicable
(b) Pro Forma Financial Information
THE ACTAVA GROUP INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
GENERAL
The following unaudited pro forma condensed consolidated financial
information sets forth, for the respective periods and as of the dates
indicated, the results of operations and the financial position of the Company
after giving effect to the Exchange Transaction, as if the transaction had been
consummated as of the respective dates indicated below. This unaudited pro
forma financial information should be read in conjunction with the Company's
audited and unaudited historical consolidated financial statements and notes
thereto for the year ended December 31, 1993 and the nine months ended
September 30, 1994. The unaudited pro forma financial information is presented
for illustrative purposes only and is not necessarily indicative of the
operating results or financial position that actually would have occurred if
the Exchange Transaction had been consummated as of such dates in accordance
with the assumptions set forth below, nor is it necessarily indicative of
future operating results or financial position.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF CONTINUING OPERATIONS
The following unaudited pro forma condensed consolidated statements of
continuing operations for the year ended December 31, 1993, and for the nine
months ended September 30, 1994, present the operating results of the Company
as if the Exchange Transaction had occurred at January 1, 1993. The statements
are based on the described restated financial information of the Company for
the respective periods and the pro forma adjustments described in the notes
thereto.
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THE ACTAVA GROUP INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF CONTINUING OPERATIONS
YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
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<CAPTION>
(2)
(1) The Sports Pro Forma
Restated Subsidiaries Adjustments Pro Forma
-------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Net Sales . . . . . . . . . . . . . . . . . . . $465,812 $240,852 $ $224,960
Costs and expenses
Costs of products sold . . . . . . . . . . . 401,471 207,340 194,131
Selling, general & administrative
expenses . . . . . . . . . . . . . . . . . 85,179 34,510 50,669
-------- -------- ------- --------
Total operating expenses . . . . . . . . 486,650 241,850 244,800
Operating loss . . . . . . . . . . . . . . . . (20,838) (998) (19,840)
Interest expense . . . . . . . . . . . . . . 26,811 3,392 23,419
Equity in net loss of $ 900 (4)
equity investee . . . . . . . . . . . . . . 637 (3) 1,537
Other (income) expense, net . . . . . . . . . 5,502 67 5,435
-------- -------- ------- --------
Loss before income taxes,
discontinued operations and
cumulative effect of change in
accounting principle . . . . . . . . . . . . (53,151) (4,457) (1,537) (50,231)
Income taxes (benefit) . . . . . . . . . . . . (1,435) 2,324 2,324 (5) (1,435)
-------- -------- ------- ---------
Loss from continuing operations . . . . . . . . $(51,716) $ (6,781) $(3,861) $(48,796)
======== ======== ======= ========
Average common shares:
Primary . . . . . . . . . . . . . . . . . . . 17,163 (6) 17,163 (6)
Loss per share of common stock:
Primary - Loss from continuing
operations . . . . . . . . . . . . . . . . . $ (3.01)(6) $ (2.84)(6)
======== ========
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(1) Restated financial information as reported on the Company's Form
8-K/A Amendment No. 1 filed with the Commission on November 4, 1994 to
restate Actava's historical financial statements to reflect Qualex as a
discontinued operation.
(2) Represents the combined operations of Diversified Products and
Subsidiary , Nelson/Weather-Rite and Subsidiary, Hutch and Willow.
(3) Represents the Company's equity in the unaudited pro forma net loss of
Roadmaster for the year ending December 31, 1993.
(4) Reflects amortization expense of $900,000 relating to the
excess of the carrying amount of Actava's equity investment in
Roadmaster of approximately $37 million over Actava's portion of the
underlying net assets of Roadmaster. Amortization was calculated using
the straight-line method over 40 years.
(5) Represents elimination of income tax expense associated with the Sports
Subsidiaries.
(6) The impact of common stock equivalents is not reflected due to their
anti-dilutive effect.
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THE ACTAVA GROUP INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF CONTINUING OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1994
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
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<CAPTION>
(2)
(1) The Sports Pro Forma
Restated Subsidiaries Adjustments Pro Forma
-------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Net Sales . . . . . . . . . . . . . . . . . . . $403,711 $232,725 $ $170,986
Costs and expenses
Costs of products sold . . . . . . . . . . . 339,199 202,087 137,112
Selling, general &
administrative expenses . . . . . . . . . . 69,689 28,789 40,900
-------- -------- -------- --------
Total operating expenses . . . . . . . . 408,888 230,876 178,012
Operating income (loss) . . . . . . . . . . . . (5,177) 1,849 (7,026)
Interest expense . . . . . . . . . . . . . . . 21,226 4,008 17,218
Equity in net (income) loss of (1,400)(3)
equity investee . . . . . . . . . . . . . . 675 (4) (725)
Other expense (income), net . . . . . . . . . (2,874) 5 (2,879)
-------- -------- -------- --------
Loss before income taxes,
discontinued operations and
cumulative effect of change in
accounting principle . . . . . . . . . . . . (23,529) (2,164) 725 (20,640)
Income taxes expense . . . . . . . . . . . . . 1,353 1,353 (5)
-------- -------- -------- --------
Loss from continuing operations . . . . . . . . $(23,529) $ (3,517) $ (628) $(20,640)
======== ======== ======== ========
Average common shares:
Primary . . . . . . . . . . . . . . . . . . . 18,059 (6) 18,059 (6)
Loss per share of common stock:
Primary - Loss from continuing
operations . . . . . . . . . . . . . . . . . $ (1.30)(6) $ (1.14)(6)
======== ========
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(1) Represents historical operating results as reported in the Company's
Quarterly Report on Form 10-Q for the nine months ended September 30, 1994.
(2) Represents the combined operations of Diversified Products and Subsidiary,
Nelson/Weather-Rite and Subsidiary, Hutch and Willow.
(3) Represents the Company's equity in the unaudited pro forma net income of
Roadmaster for the nine months ending September 30, 1994.
(4) Reflects amortization expense of $675,000 relating to the excess of the
carrying amount of Actava's equity investment in Roadmaster of
approximately $37 million over Actava's portion of the underlying net
assets of Roadmaster. Amortization was calculated using the straight-line
method over 40 years.
(5) Represents elimination of income tax expense associated with the Sports
Subsidiaries.
(6) The impact of common stock equivalents is not reflected due to their
anti-dilutive effect.
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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
The unaudited pro forma condensed consolidated balance sheet gives
effect to the Exchange Transaction as if it had occurred on September 30, 1994.
The unaudited pro forma condensed consolidated balance sheet is based on
previously described financial information of the Company as of September 30,
1994, and the pro forma adjustments described in the notes thereto.
THE ACTAVA GROUP INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1994
(IN THOUSANDS)
(UNAUDITED)
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<CAPTION>
(1)
The Sports Pro Forma
Actava Subsidiaries Adjustment Pro Forma
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<S> <C> <C> <C> <C>
ASSETS:
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . . $ 20,858 $ 20,858
Short-term investments . . . . . . . . . . . . . 63,858 63,858
Receivables, net . . . . . . . . . . . . . . . . 167,997 62,388 105,609
Inventories . . . . . . . . . . . . . . . . . . 71,838 51,968 19,870
Prepaid expenses . . . . . . . . . . . . . . . . 7,981 1,837 6,144
Receivable from Eastman Kodak . . . . . . . . . 98,132 98,132
Income tax benefits . . . . . . . . . . . . . . 25,099 25,099
-------- -------- -------- --------
Total Current Assets . . . . . . . . . . . 455,763 116,193 339,570
Investment in Roadmaster Industries, Inc . . . . . 71,534(2)(3) 71,534
Property, plant and equipment . . . . . . . . . . . 116,466 42,961 137(3) 73,642
Less allowances for depreciation . . . . . . . . (46,468) (8,488) (37,980)
-------- -------- -------- --------
69,998 34,473 137 35,662
Notes receivable from Triton Group Ltd. . . . . . . 17,976 17,976
Receivable from Diversified Products Corp . . . . . 10,000(2) 10,000
Other assets . . . . . . . . . . . . . . . . . . . 5,200 265 4,935
Long-term investments . . . . . . . . . . . . . . . 15,496 15,496
Intangibles, net . . . . . . . . . . . . . . . . . 18,804 18,005 799
-------- -------- -------- --------
Total Assets . . . . . . . . . . . . . . $583,237 $168,936 $ 81,671 $495,972
======== ======== ======== ========
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THE ACTAVA GROUP INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1994
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
(1)
The Sports Pro Forma
Actava Subsidiaries Adjustment Pro Forma
------ ------------ ----------- ---------
<S> <C> <C> <C> <C>
LIABILITIES & STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts payable, accrued expenses and
other current liabilities . . . . . . . . . . $126,911 $ 47,424 $ 1,865 (3) $ 81,352
Notes payable . . . . . . . . . . . . . . . . . 90,982 42,606 48,376
Current portion of long-term debt . . . . . . . 4,087 4,087
-------- -------- -------- ---------
Total Current Liabilities . . . . . . . 221,980 90,030 1,865 133,815
Deferred income taxes . . . . . . . . . . . . . . 33,444 (900) 34,344
Long-term debt . . . . . . . . . . . . . . . . . 2,579 2,579
Subordinated debt . . . . . . . . . . . . . . . . 187,227 187,227
Redeemable common stock . . . . . . . . . . . . . 12,000 12,000
Stockholders' Equity:
Common stock . . . . . . . . . . . . . . . . . 22,768 51 51 (2) 22,768
Additional capital . . . . . . . . . . . . . . 35,491 81,471 81,471 (2) 35,491
Retained earnings . . . . . . . . . . . . . . . 174,979 (1,531) (1,531)(2) 174,979
Intercompany . . . . . . . . . . . . . . . . . (185) (185)(2)
Less treasury stock - at cost . . . . . . . . . (107,231) (107,231)
-------- -------- -------- ---------
Total Stockholders' Equity . . . . . . 126,007 79,806 79,806 126,007
-------- -------- -------- ---------
Total Liabilities and Stockholders' Equity $583,237 $168,936 $ 81,671 $ 495,972
======== ======== ======== =========
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Notes to Pro Forma Condensed Consolidated Balance Sheet
(1) Represents the combined financial position of Diversified Products and
Subsidiary, Nelson/Weather-Rite and Subsidiary, Hutch and Willow.
(2) Represents adjustment to eliminate the effect of the Sports Subsidiaries
stockholders' equity accounts and record Actava's equity investment in
Roadmaster and a receivable due from Diversified Products. The
receivable due from Diversified Products represents remaining amounts
payable by Diversified Products to Actava in connection with
intercompany advances used by Diversified Products during 1993 to
finance its operating activities.
(3) Reflects adjustment to transfer amounts as an in-kind dividend from the
accounts of Diversified Products to Actava which are related to the
retention of certain real estate with a net book value of approximately
$137,000 and associated environmental liabilities of approximately
$1,865,000.
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Item 7. Financial Statements and Exhibits (continued)
(c) Exhibits
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<S> <C> <C>
Incorporated Herein by Reference
-----------------------------------------------
Document with which Designation of
Exhibit Exhibit was previously such Exhibit in
Number Description filed with Commission that Document
- ------- ------------------------------------ ---------------------- ----------------
2 Agreement and Plan of Quarterly Report On Exhibit 2
Reorganization dated as Form 10-Q for the
of July 20, 1994, by and three months ended
among The Actava Group June 30, 1994
Inc., Diversified Products
Corporation, Hutch Sports
USA Inc., Nelson/Weather-Rite,
Inc., Willow Hosiery Company,
Inc. and Roadmaster Industries,
Inc.
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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 hereunto duly authorized.
THE ACTAVA GROUP INC.
----------------------------------
Registrant
/s/ Frederick B. Beilstein, III
----------------------------------
Frederick B. Beilstein, III
Senior Vice President, Treasurer
and Chief Financial Officer
Dated: December 21, 1994
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