SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO 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 31, 1996
MAGICWORKS ENTERTAINMENT INCORPORATED
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
2-96614-D 87-0425513
------------------------- ---------------------------------
(Commission File Number) (IRS Employer Identification No.)
930 WASHINGTON AVENUE, 5TH FLOOR
MIAMI BEACH, FLORIDA 33139
----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (305) 532-1566
-----------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 31, 1996, Magicworks Entertainment Incorporated, a Delaware
corporation (the "Registrant"), acquired all of the outstanding capital stock of
Space Agency Inc., a Utah corporation ("Space Agency"), pursuant to the merger
(the "Merger") of Space Agency with and into Magicspace Corporation
("Magicspace"), a newly-formed, wholly-owned subsidiary of the Registrant. The
Merger was consummated pursuant to that certain Agreement and Plan of Merger
dated December 31, 1996 (the "Merger Agreement") among the Registrant,
Magicspace, Space Agency and all of the stockholders of Space Agency (the "Space
Agency Stockholders"). A copy of the Merger Agreement is being filed as Exhibit
2.1 hereto. Magicspace was the surviving corporation in the Merger. Pursuant to
the Merger, each share of Space Agency common stock, par value $.50 per share,
was converted into the right to receive 118.81108 shares of common stock, $.001
par value ("Common Stock"), of the Registrant rounded to the nearest whole
number, resulting in the issuance of 1,320,001 shares of Common Stock to the
Space Agency Stockholders. As a result of the Merger, Space Agency became a
wholly-owned subsidiary of the Registrant. The number of shares issued by the
Registrant to the Space Agency Stockholders in the Merger was determined by
negotiation among the Registrant, Space Agency and the Space Agency
Stockholders.
- 2 -
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(a) Financial statements
The audited financial statements of the Space Agency, Inc. at
December 31, 1995 and 1994 and for each of the three years in
the period ended December 31, 1995, together with auditors'
report thereon, are attached hereto as Attachments7(a), and are
incorporated herein by this reference.
(b) Pro forma financial information
The unaudited pro forma combined financial statements of
Magicworks Entertainment Incorporated as of and for the year
ended December 31, 1995 and as of and for the nine months ended
September 30, 1996 are attached hereto as Attachment 7(b) and
are incorporated herein by this reference.
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated December 31, 1996, by and
among the Registrant, Magicspace, Space Agency and the Space
Agency Stockholders*
2.2 Plan and Articles of Merger of Space Agency with and into
Magicspace, as filed with the Secretary of State of the State of
Florida*
* Previously filed as an identically numbered exhibit to the
Registrant's Current Report on Form 8-K dated December 31, 1996
as filed with the Commission on January 15, 1997.
- 3 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
MAGICWORKS ENTERTAINMENT
INCORPORATED
Dated: March __, 1997 By:/s/ BRAD KRASSNER
--------------------------------------
Brad Krassner, Co-Chairman of the
Board of Directors and Chief Executive
Officer
<PAGE>
ATTACHMENT 7(A)
THE SPACE AGENCY, INC.
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(WITH REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS)
<PAGE>
THE SPACE AGENCY, INC.
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
CONTENTS
INDEPENDENT AUDITORS' REPORT...................................1
FINANCIAL STATEMENTS
Balance Sheets........................................2
Statements of Income..................................3
Statements of Changes in Stockholders' Equity.........4
Statements of Cash Flows..............................5
Notes to Financial Statements.........................7
<PAGE>
NIEVAARD, KOFOED & TERAN, P.C.
Certified Public Accountants
Hans Nievaard, CPA
Alfred J. Kofoed, CPA
Bruce M. Teran, CPA
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders of
The Space Agency, Inc.
We have audited the accompanying balance sheets of The Space Agency, Inc., a
Utah S-Corporation, as of December 31, 1995 and 1994 and the related statements
of income, changes in stockholders' equity and cash flows, for each of the three
years in the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Space Agency, Inc. at
December 31, 1995 and 1994, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1995, in conformity
with generally accepted accounting principles.
Nievaard, Kofoed & Teran, P.C.
November 15, 1996
Salt Lake City, Utah
4141 South Highland Drive, Suite 210
Salt Lake City, Utah 84124
Phone: 801 272 4101
<PAGE>
THE SPACE AGENCY, INC.
BALANCE SHEETS
December 31, 1995 and 1994
1995 1994
---------- ---------
ASSETS
CURRENT ASSETS
Cash and cash equivalents (NOTE B) $4,082,986 2,329,636
Marketable securities (NOTE D) 147,998 69,902
Accounts receivable 40,743 47,797
Note receivable from related party (NOTES C & I) 13,530 2,605
Prepaid show expenses (NOTE B) 237,658 23,499
---------- ---------
TOTAL CURRENT ASSETS 4,522,915 2,473,439
Long-term portion of note receivable from
related party (NOTES C & I) -- 12,193
Property and equipment, net (NOTES B & E) 47,106 45,446
Advances and deposits (NOTE B) 65,000 110,000
Other investments (NOTE F) -- 24,000
---------- ---------
TOTAL ASSETS $4,635,021 2,665,078
========== =========
LIABILITIES AND CAPITAL
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 321,944 215,330
Advanced show sales (NOTE B) 3,612,204 1,850,929
---------- ---------
TOTAL CURRENT LIABILITIES 3,934,148 2,066,259
STOCKHOLDERS' EQUITY
Common stock, $.50 par vale, 50,000 shares
authorized; 11,111 shares issued and outstanding 5,556 5,556
Additional paid-in capital 15,444 15,444
Retained earnings 679,873 577,819
---------- ---------
TOTAL STOCKHOLDERS' EQUITY 700,873 598,819
---------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,635,021 2,665,078
========== =========
See accompanying notes.
2
<PAGE>
THE SPACE AGENCY, INC.
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
----------- --------- ---------
REVENUES
Promotion $10,737,410 7,015,339 9,060,220
Other 238,470 97,780 27,312
----------- --------- ---------
TOTAL REVENUES 10,975,880 7,113,119 9,087,532
OPERATING EXPENSES
Talent and other show expenses 9,811,463 6,243,549 8,388,561
Salaries, wages and benefits 593,331 406,674 358,860
General and administrative 256,293 110,655 111,479
----------- --------- ---------
TOTAL OPERATING EXPENSES 10,661,087 6,760,878 8,858,900
----------- --------- ---------
Income from operations 314,793 352,241 228,632
OTHER INCOME (EXPENSE)
Interest income 201,608 49,980 28,587
Interest expense (NOTE B) (39,347) -- (81)
Loss on sale of investment (NOTE F) (20,000) -- --
Loss on sale of asset -- (1,408) --
----------- --------- ---------
Net other income 142,261 48,572 28,506
----------- --------- ---------
NET INCOME 457,054 400,813 257,138
PROFORMA ADJUSTMENT FOR
INCOME TAXES (NOTE B) (179,000) (156,800) (96,000)
----------- --------- ---------
PRO FORMA NET INCOME $ 278,054 244,013 161,138
=========== ========= =========
See accompanying notes.
3
<PAGE>
THE SPACE AGENCY, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
ADDITIONAL
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
-------- ---------- -------- --------
BALANCES, DECEMBER 31, 1992 $ 5,000 -- 184,868 189,868
Issuance of common stock 556 15,444 -- 16,000
Distributions -- -- (210,000) (210,000)
Net income -- -- 257,138 257,138
-------- ------ -------- --------
BALANCES, DECEMBER 31, 1993 5,556 15,444 232,006 253,006
Distributions -- -- (55,000) (55,000)
Net income -- -- 400,813 400,813
-------- ------ -------- --------
BALANCES, DECEMBER 31, 1994 5,556 15,444 577,819 598,819
Distributions -- -- (355,000) (355,000)
Net income -- -- 457,054 457,054
-------- ------ -------- --------
BALANCES, DECEMBER 31, 1995 $ 5,556 15,444 679,873 700,873
======== ====== ======== ========
See accompanying notes.
4
<PAGE>
<TABLE>
<CAPTION>
THE SPACE AGENCY, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 457,054 400,813 257,138
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 14,184 10,053 10,341
Loss on sale of asset -- 1,408 --
Loss on sale of investment 20,000 -- --
(Increase) or decrease in:
Accounts receivables 7,055 (40,194) 5,277
Prepaid show expenses (214,160) 255,769 (144,658)
Advances and deposits 45,000 (110,000) 96,049
Increase or (decrease) in:
Accounts payable and accrued liabilities 106,613 25,188 100,290
Advanced show sales 1,761,275 946,985 3,845
----------- ----------- -----------
Total adjustments 1,739,967 1,089,209 71,144
----------- ----------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,197,021 1,490,022 328,282
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of marketable securities (78,096) (69,902) --
Purchase of other investments (NOTE F) -- -- (24,000)
Proceeds from the sale of assets and investments 4,000 7,500 --
Purchase of property and equipment (15,865) (15,280) (14,507)
----------- ----------- -----------
NET CASH USED BY
INVESTING ACTIVITIES (89,961) (77,682) (38,507)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal received on note receivable 1,290 -- 1,202
Dividends paid during the year (355,000) (55,000) (210,000)
----------- ----------- -----------
NET CASH USED BY
FINANCING ACTIVITIES (353,710) (55,000) (208,798)
----------- ----------- -----------
NET INCREASE IN CASH
AND CASH EQUIVALENTS 1,753,350 1,357,340 80,977
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 2,329,636 972,296 891,319
----------- ----------- -----------
END OF YEAR $ 4,082,986 2,329,636 972,296
=========== =========== ===========
See accompanying notes.
</TABLE>
5
<PAGE>
THE SPACE AGENCY, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
------- ---- -------
SCHEDULE OF ADDITIONAL CASH FLOW INFORMATION
Cash paid during the year for interest,
net of amount capitalized $39,347 -- 81
======= ==== =======
SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Issuance of common stock:
Common stock $ -- -- 556
Additional paid-in capital -- -- 15,444
Note receivable from officer -- -- (16,000)
------- ---- -------
Cash down payment $ -- -- --
======= ==== =======
See accompanying notes.
6
<PAGE>
THE SPACE AGENCY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1996
NOTE A - BUSINESS ACTIVITY
The Space Agency, Inc., was formed in 1979 in the state of Utah as an
S-Corporation to promote live theatrical entertainment primarily in the Western
United States and Canada. The Space Agency, Inc. is owned by Messrs. Ballard and
Boulay (collectively, the Stockholders).
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of The Space Agency, Inc. is
presented to assist in understanding the Company's financial statements. The
financial statements and notes are representations of the Company's management,
who is responsible for their integrity and objectivity. These accounting
policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash and investments in short-term highly
liquid financial instruments, primarily time deposits and money market accounts,
with original maturities of three months or less. Due to the short maturity
period of the cash equivalents, the carrying amount of these instruments
approximates their fair values.
PREPAID SHOW EXPENSES
Prepaid show expenses consist mainly of advertising, printing and rental
deposits. The expenses are recognized at the time of the theatrical performance
or entertainment event.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost less accumulated depreciation.
Property and equipment are depreciated using the straight-line method over the
estimated useful lives of 5 to 31 years for leasehold improvements and 5 to 7
years for furniture and equipment.
Repairs of property and equipment and minor replacements and renewals are
charged to maintenance expense, which is included in general and administrative
expenses, as incurred.
REVENUES
Revenues are recognized when earned, which is generally at the time of the
theatrical performance or entertainment event. Cash received for ticket sales in
advance of a performance is reflected in current liabilities as advanced show
sales in the accompanying balance sheets.
The Company's revenues are primarily derived from the promotion of live theater
and entertainment events throughout the Western United States and Canada.
Changes in the entertainment preferences of the general population could affect
the Company's future revenues.
<PAGE>
THE SPACE AGENCY, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995 AND 1996
INTEREST EXPENSE
Interest expense reflected in the accompanying financial statements is not the
result of debt obligations owed to third parties, but is equal to the amount of
interest income allocated and paid to third parties. Interest income was
allocated to third parties based upon specific agreements. In specific
situations, where there were significant advanced show sales, the interest
earned on the short-term investments related to the advanced show sales was
allocated between the Company and the same parties who would split show profits.
INCOME TAXES
The Company, with the consent of its shareholders, has elected under the
Subchapter S of the Internal Revenue Code to be treated as an S-Corporation. As
such, the stockholders include their proportionate share of the Company's income
in their personal income tax returns.
The accompanying statements of income include pro forma adjustments for income
taxes which would have been recorded had the Company been subject to federal and
state corporation income taxes, based on the tax laws in effect during those
periods and statutory rates applied to pre-tax accounting income.
USE OF ESTIMATES
The preparation of financial statements in conformity with general accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
CONCENTRATIONS OF CREDIT RISK
The Company's financial instruments that are exposed to concentrations of credit
risk consist primarily of cash and certificates of deposit. The Company places
it cash and temporary cash investments with high credit quality institutions.
Such investments generally exceed FDIC insurance limits.
<PAGE>
ATTACHMENT 7 (B)
<PAGE>
<TABLE>
<CAPTION>
MAGICWORKS ENTERTAINMENT INCORPORATED
PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
AS OF SEPTEMBER 30, 1996
MAGICWORKS
ENTERTAINMENT PROFORMA
INCORPORATED MAGICSPACE, INC. TOTAL ADJUSTMENTS COMBINED
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $5,338,278 $2,813,855 $8,152,133 $8,152,133
Accounts receivable 1,519,870 69,218 1,589,088 1,589,088
Preproduction costs, net 1,105,974 0 1,105,974 1,105,974
Inventories 234,505 0 234,505 234,505
Notes receivable from affiliates 11,214 12,192 23,406 23,406
Other current assets 332,888 108,940 441,828 441,828
----------------------------------------------------------------------------
Total current assets 8,542,729 3,004,205 11,546,934 0 11,546,934
Property and equipment, net 1,533,187 102,163 1,635,350 1,635,350
Investments in partnerships 622,202 0 622,202 622,202
Advances and deposits 821,063 145,634 966,697 966,697
Deferred costs, net 1,154,645 0 1,154,645 1,154,645
Management and booking agreements, net 369,177 0 369,177 369,177
----------------------------------------------------------------------------
$13,043,003 $3,252,002 $16,295,005 $0 $16,295,005
============================================================================
Liabilities and Equity
Current liabilities:
Accounts payable and accrued liabilities $1,442,068 $1,461,287 $2,903,355 $2,903,355
Current maturities of long-term debt 212,288 0 212,288 212,288
Short-term debt 225,000 0 225,000 225,000
Deferred income taxes 391,000 0 391,000 391,000
Due to affiliates 38,150 0 38,150 38,150
----------------------------------------------------------------------------
Total current liabilities 2,308,506 1,461,287 3,769,793 0 0 3,769,793
----------------------------------------------------------------------------
Long-term debt, less current maturities 5,699,248 0 5,699,248 5,699,248
Minority interests 722,245 0 722,245 722,245
Commitments and contingencies 0 0 0 0
Capital:
Common stock 23,074 5,556 28,630 (4,236)(A) 24,394
Preferred stock 0 0 0 0
Additional paid-in-capital 4,151,759 15,444 4,167,203 4,236 (A) 4,171,439
Partners' capital/retained earnings 138,171 1,769,715 1,907,886 1,907,886
----------------------------------------------------------------------------
4,313,004 1,790,715 6,103,719 0 6,103,719
----------------------------------------------------------------------------
$13,043,003 $3,252,002 $16,295,005 $0 $16,295,005
============================================================================
0 0 0 0 0
<FN>
PRO FORMA ADJUSTMENTS
(A) To record the merger of the Space Agency, Inc. ("Space") with Magicworks in which 5,556 shares of Space were converted into
1,320,001 shares of Magicworks, Common Stock. The transaction was acccounted for as a pooling-of-interest.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAGICWORKS ENTERTAINMENT INCORPORATED
PRO FORMA COMBINED STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
MAGICWORKS
ENTERTAINMENT PROFORMA
INCORPORATED MAGICSPACE, INC. TOTAL ADJUSTMENTS COMBINED
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Production $21,773,945 $0 $21,773,945 $21,773,945
Promotion 7,412,528 23,049,694 30,462,222 30,462,222
Merchandising 1,635,596 0 1,635,596 1,635,596
Other 1,391,261 180,900 1,572,161 1,572,161
----------------------------------------------------------------------------
32,213,330 23,230,594 55,443,924 0 55,443,924
Operating Expenses:
Talent and other show 24,897,793 21,371,814 46,269,607 46,269,607
Salaries, wages and benefits 1,957,251 511,325 2,468,576 2,468,576
Cost of goods sold 1,149,876 0 1,149,876 1,149,876
General and administrative 1,931,268 225,708 2,156,976 123,808 (B) 2,280,784
----------------------------------------------------------------------------
29,936,188 22,108,847 52,045,035 123,808 52,168,843
Income from operations 2,277,142 1,121,747 3,398,889 (123,808) 3,275,081
Other income(expense):
Interest income 55,786 136,337 192,123 192,123
Interest expense (334,024) (18,242) (352,266) (388,931)(C) (741,197)
From investments in productions 27,821 0 27,821 27,821
Minority interests (289,935) 0 (289,935) (289,935)
----------------------------------------------------------------------------
Net income 1,736,790 1,239,842 2,976,632 (512,739) 2,463,893
Pro forma adjustment for income taxes (1,069,520) (496,000) (1,565,520) 199,968 (D) (1,365,552)
----------------------------------------------------------------------------
Pro forma net income (loss) $667,270 $743,842 $1,411,112 ($312,771) $1,098,341
============================================================================
Per share data:
Primary earnings per share $0.05
Weighted average common shares outstanding 23,251,654
Fully dilutive earnings per share $0.07
Weighted average common shares & common stock
equivalents outstanding 24,062,680
<FN>
(B) To reflect amortization of deferred finance costs for the nine months ended
September 30, 1996.
(C) To reflect interest expense on the debt portion of the securities issued in
the private placement of units consummated by the Company on July 30, 1996
(the "Private Placement") for the nine month period ended September 30,
1996.
(D) Tax adjustment due to (B) and (C).
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAGICWORKS ENTERTAINMENT INCORPORATED
PRO FORMA COMBINED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
MAGICWORKS MOVIETIME
ENTERTAINMENT ENTERTAINMENT PROFORMA
INCORPORATED INCORPORATED MAGICSPACE, INC. TOTAL ADJUSTMENTS COMBINED
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Production $31,638,078 $0 $31,638,078 $31,638,078
Promotion 6,668,674 10,737,410 17,406,082 17,406,082
Merchandising 2,474,214 0 2,474,214 2,474,214
Other 1,953,135 238,470 2,191,605 2,191,605
------------------------------------------------------------------------------------
42,734,099 0 10,975,880 53,709,979 0 53,709,979
Operating Expenses:
Talent and other show 32,945,744 9,811,463 42,757,207 42,757,207
Salaries, wages and benefits 1,890,938 165,401 593,331 2,649,670 2,649,670
Cost of goods sold 1,462,364 0 1,462,364 1,462,364
General and administrative 1,743,081 232,732 276,293 2,252,106 165,077 (B) 2,417,183
------------------------------------------------------------------------------------
38,042,127 398,133 10,681,087 49,121,347 165,077 49,286,424
Income from operations 4,691,972 (398,133) 294,793 4,588,632 (165,077) 4,423,555
Other income(expense):
Interest income 109,060 201,608 310,668 310,668
Interest expense (88,015) (4,830) (39,347) (132,192) (518,575)(C) (650,767)
From investments in productions 418,679 0 418,679 418,679
Minority interests (1,446,888) 0 (1,446,888) (1,446,888)
------------------------------------------------------------------------------------
Net income 3,684,808 (402,963) 457,054 3,738,899 (683,652) 3,055,247
Pro forma adjustment for income taxes (1,437,075) 157,156 (179,000) (1,458,171) 266,624 (D) (1,191,546)
------------------------------------------------------------------------------------
Pro forma net income (loss) $2,247,733 ($245,807) $278,054 $2,280,728 ($417,028) $1,863,701
====================================================================================
Per share data:
Primary earnings per share $0.09
Weighted average common shares outstanding 21,356,454
Fully dilutive earnings per share $0.10
Weighted average common shares & common stock
equivalents outstanding 21,356,454
<FN>
(B) To reflect amortization of deferred finance costs for the twelve months
ended December 31, 1995.
(C) To reflect interest expense on the debt portion of the securities issued in
the Private Placement for the twelve month period ended December 31, 1995.
(D) Tax adjustment due to (B) and (C).
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAGICWORKS ENTERTAINMENT INCORPORATED
PRO FORMA COMBINED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1994
MAGICWORKS
ENTERTAINMENT PROFORMA
INCORPORATED MAGICSPACE, INC. TOTAL ADJUSTMENTS COMBINED
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Production $23,346,244 $0 $23,346,244 $23,346,244
Promotion 6,268,273 7,015,339 13,283,612 13,283,612
Merchandising 2,338,619 0 2,338,619 2,338,619
Other 1,463,057 97,780 1,560,837 1,560,837
----------------------------------------------------------------------------
33,416,193 7,113,119 40,529,312 0 40,529,312
Operating Expenses:
Talent and other show 25,449,871 6,243,549 31,693,420 31,693,420
Salaries, wages and benefits 1,529,300 406,674 1,935,974 1,935,974
Cost of goods sold 1,824,102 0 1,824,102 1,824,102
General and administrative 1,436,139 112,063 1,548,202 0 1,548,202
----------------------------------------------------------------------------
30,239,412 6,762,286 37,001,698 0 37,001,698
Income from operations 3,176,781 350,833 3,527,614 0 3,527,614
Other income(expense):
Interest income 14,801 49,980 64,781 64,781
Interest expense (20,011) 0 (20,011) 0 (20,011)
From investments in productions 417,071 0 417,071 417,071
Minority interests (1,460,444) 0 (1,460,444) (1,460,444)
----------------------------------------------------------------------------
Net income 2,128,198 400,813 2,529,011 0 2,529,011
Pro forma adjustment for income taxes (829,997) (156,800) (986,314) 0 (986,314)
----------------------------------------------------------------------------
Pro forma net income (loss) $1,298,201 $244,013 $1,542,697 $0 $1,542,697
============================================================================
Per share data:
Primary earnings per share $0.07
Weighted average common shares outstanding 20,631,180
Fully dilutive earnings per share $0.07
Weighted average common shares & common stock
equivalents outstanding 20,631,180
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAGICWORKS ENTERTAINMENT INCORPORATED
PRO FORMA COMBINED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1993
MAGICWORKS
ENTERTAINMENT PROFORMA
INCORPORATED MAGICSPACE, INC. TOTAL ADJUSTMENTS COMBINED
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Production $18,250,149 $0 $18,250,149 $18,250,149
Promotion 10,009,734 9,060,220 19,069,954 19,069,954
Merchandising 2,461,577 0 2,461,577 2,461,577
Other 1,445,791 27,312 1,473,103 1,473,103
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32,167,251 9,087,532 41,254,783 0 41,254,783
Operating Expenses:
Talent and other show 23,254,751 8,388,561 31,643,312 31,643,312
Salaries, wages and benefits 1,333,330 358,860 1,692,190 1,692,190
Cost of goods sold 1,860,777 0 1,860,777 1,860,777
General and administrative 1,161,347 111,479 1,272,826 0 1,272,826
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27,610,205 8,858,900 36,469,105 0 36,469,105
Income from operations 4,557,046 228,632 4,785,678 0 4,785,678
Other income(expense):
Interest income 6,579 28,587 35,166 35,166
Interest expense (79,686) (81) (79,767) 0 (79,767)
From investments in productions 364,976 0 364,976 364,976
Minority interests (1,828,358) 0 (1,828,358) (1,828,358)
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Net income 3,020,557 257,138 3,277,695 0 3,277,695
Pro forma adjustment for income taxes (1,178,017) (96,000) (1,278,301) 0 (1,278,301)
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Pro forma net income (loss) $1,842,540 $161,138 $1,999,394 $0 $1,999,394
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Per share data:
Primary earnings per share $0.10
Weighted average common shares outstanding 20,631,180
Fully dilutive earnings per share $0.10
Weighted average common shares & common stock
equivalents outstanding 20,631,180
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