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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
Current Report
Pursuant to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Report): April 18, 1996
ALL AMERICAN COMMUNICATIONS, INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
<TABLE>
<CAPTION>
0-14333 95-3803222
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<S> <C>
(Commission File (I.R.S. Employer
Number) Identification Number)
</TABLE>
808 Wilshire Boulevard, Santa Monica, California 90401
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(Address of Principal Executive Offices)
(310) 656-1100
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(Registrant's Telephone Number, Including Area Code)
2114 Pico Boulevard, Santa Monica, California 90405
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(Former Name or Former Address, if Changed Since Last Report)
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The undersigned registrant (the "Registrant") hereby amends
the following items of its Current Report on Form 8K filed
May 3, 1996 (the "Report") as follows:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
The Registrant hereby amends the information set forth under
Items 7(a), 7(b) and 7(c) of the Report and replaces such
items in their entirety as set forth below.
Page
(a) Financial Statements of Business Acquired
Financial Statements of the Game Show Division of Mark Goodson
Productions and Affiliates - December 31, 1994, 1993 and 1992,
incorporated by reference to the Registration Statement on Form
S-2 (No. 33-063509), Amendment Number 3 declared effective
December 11, 1995.
Financial Statements of the Game Show Division of Mark Goodson
Productions and Affiliates - September 30, 1995 and 1994
incorporated by reference to the Registration Statement on Form
S-2 (No. 33-63509), Amendment Number 3 declared effective
December 11, 1995.
Financial Statements of the Combined Business of Mark Goodson
Productions, L. P. and The Child's Play Company for the period
from October 6, 1995 to December 31, 1995 is incorporated by
reference to the Registrant's Annual Report on Form 10K for the
year ended December 31, 1995.
The Registrant's quarterly report on Form 10Q for the quarter
ended March 31, 1996, incorporated by reference, includes the
assets, liabilities and results of the Combined Business of
Mark Goodson Productions, L.P. and The Child's Play Company.
(b) Pro Forma Financial Information
Pro Forma Condensed Consolidated Balance Sheet - incorporated
by reference to the Registrant's Quarterly report on Form 10Q
for the quarter ended March 31, 1996.
Pro Forma Condensed Consolidated Statement of Operations -
year ended December 31, 1995. 5
Notes to Pro Forma Condensed Consolidated Financial
Statements. 6
(c) Exhibits
1. Financial Statements of the Game Show Division of Mark Goodson
Productions and Affiliates - December 31, 1994, 1993 and 1992,
incorporated by reference to the Registration Statement on Form
S-2 (No. 33-063509), Amendment Number 3 declared effective
December 11, 1995.
2. Financial Statements of the Game Show Division of Mark Goodson
Productions and Affiliates - September 30, 1995 and 1994
incorporated by reference to the Registration Statement on Form
S-2 (No. 33-63509), Amendment Number 3 declared effective
December 11, 1995.
3. Financial Statements of the Combined Business of Mark Goodson
Productions, L. P. and The Child's Play Company for the period
from October 6, 1995 to December 31, 1995 is incorporated by
reference to the Registrant's Annual Report on Form 10K for the
year ended December 31, 1995.
4. The information presented in the Registrant's quarterly report
on Form 10Q for the quarter ended March 31, 1996,
incorporated by reference, contains the results of the
Combined Business of Mark Goodson Productions, L.P. and
The Child's Play Company.
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PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
As of October 6, 1995, the Company consummated an Asset Purchase
Agreement pursuant to which a newly- formed limited liability company (the
"LLC"), jointly owned, directly or indirectly by the Company and The
Interpublic Group of Companies ("Interpublic"), acquired substantially all of
the assets (excluding assets relating to the lottery business) and assumed
certain specified liabilities ( the "MG Acquisition") of Mark Goodson
Productions, L.P. and the Child's Play Company (collectively, the "Sellers").
The Sellers are not affiliated with the Company. The purchase price paid by
the Company for its undivided 50% interest of the Sellers' net assets acquired
consisted of a cash payment of $25,000,000, transaction costs of $785,000, and
an as yet undetermined contingent purchase price. The contingent purchase
price payable to the Sellers, is to be earned and paid based on the income (as
defined) resulting from a domestic television network contract and the actual
exploitation of certain other domestic television rights. The contingent
purchase price, in total, is limited to $48,500,000 if paid (whether earned or
not) during the first five years following October 6, 1995. Otherwise, the
amount of contingent purchase price is unlimited to the extent it is earned
within the first ten years following October 6, 1995. At the end of ten years
no additional contingent purchase price accrues. Substantially all of the
Company's $25,785,000 portion of the initial purchase price was allocated to
goodwill and was reflected in "investment in unconsolidated affiliate" in the
condensed consolidated balance sheet at December 31, 1995.
Interpublic and the Company, effective January 1, 1996, entered into
an agreement pursuant to which the Company agreed to purchase Interpublic's 50%
interest in the LLC (the "IPG/Goodson Agreement") for: (i) $12,500,000 plus
accrued interest thereon at a rate of 7% per annum from January 1, 1996 to the
Closing Date (as defined) (the "Closing Date"); (ii) the issuance of a
subordinated note in the amount of $12,500,000 due 12 months from the Closing
Date, subject to acceleration upon either a "Change of Control" (as defined),
or the acceleration of certain of the Company's bank term loans, plus accrued
interest thereon at a rate of 7% per annum from January 1, 1996; and (iii) the
issuance of a subordinated note in the amount of $2,800,000, yielding interest
at the rate of 7% per annum from January 1, 1996, and principally representing
Interpublic's 50% share of the LLC's earnings through December 31, 1995, as
defined, with $687,000 due 30 days from the Closing Date and the balance due 30
days after maturity of certain of the Company's bank term loans and subject to
acceleration upon a "Change of Control" (as defined), or the acceleration of
certain of the Company's bank term loans. The IPG/Goodson Agreement together
with the MG Acquisition (collectively the "Mark Goodson Acquisition") resulted
in the Company's full direct or indirect ownership of the net assets held by
the LLC. As of January 1, 1996, the Company's initial purchase price for the
net assets of Mark Goodson Productions increased by $27,800,000 plus costs of
$138,000 to $53,723,000. Consistent with its treatment of its undivided 50%
interest, the Company has allocated substantially all of the increased purchase
price to goodwill which is being amortized over 25 years from October 6, 1995,
the date of the MG Acquisition. The IPG/Goodson Agreement further results in
the Company absorbing the full share of the contingent purchase price, to the
extent earned by the Sellers. Such contingent purchase price will be treated
as an increase in goodwill and will be amortized coterminously with the
original 25 year period. To the extent additional contingent purchase price
would be increased, as of January 1, 1996, to a total of $48,500,000, annual
amortization expense associated with such additional goodwill would be
$1,940,000 (for an aggregate annual amortization expense of $3,965,000 in
addition to annual amortization expense of approximately $2,150,000 from prior
acquisitions). Through March 31, 1996, the Company has recorded contingent
purchase price totaling $3,048,000 (excluding Interpublic's share through
December 31, 1995 of $935,000). As of March 31, 1996, goodwill, including the
total initial purchase price of $53,723,000 (before allocation of $2,934,000 to
identifiable net assets) and contingent purchase price of $3,048,000, totals
$53,837,000. The Company has accounted for the Mark Goodson Acquisition under
the purchase accounting method effective January 1, 1996.
The pro forma information is based on the historical financial
statements of the Company, the Sellers and the Combined Business of Mark
Goodson Production L.P. and the Child's Play Company giving effect to the
transaction under the purchase method of accounting and the assumptions and
adjustments in the accompanying notes to the pro forma condensed consolidated
financial statements. The unaudited pro forma condensed consolidated statement
of
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operations has been prepared as if the above transaction had occurred at the
beginning of the earliest period presented (January 1, 1995). The consolidated
balance sheet of the Company filed in the Company's quarterly report on Form
10Q for the three months ended March 31, 1996 reflects the Mark Goodson
Acquisition.
This pro forma statement may not be indicative of the results that
would have occurred if the combination had been in effect on the dates
indicated or which may be obtained in the future. The pro forma financial
statements should be read in conjunction with the consolidated financial
statements and notes of the Company contained in the Company's Annual Report on
Form 10K for the year ended December 31, 1995 and the Company's quarterly
report on Form 10Q for the three months ended March 31, 1996.
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(in thousands - except per share amounts)
<TABLE>
<CAPTION>
December 31, 1995
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Historical
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Combined Business
of Mark Goodson
Mark Goodson Productions, L.P.
Productions, L.P. and The Child's
and The Child's Play Company For
Play Company For The Period From
The Period from October 6, 1995
January 1, 1995 to to Pro Forma Pro Forma
Company October 5, 1995 December 31, 1995 Adjustments Consolidated
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<S> <C> <C> <C> <C> <C>
Revenues $228,760 $21,319 $8,282 $ (3,603)(2) $244,413
(10,345)(1)
Cost of sales 180,567 7,030 1,063 (10,345)(1) 178,315
Selling, general and 24,102 7,149 13 (7,149)(4) 24,154
administrative 39 (5)
Goodwill amortization 2,399 0 0 2,305 (5) 4,446
(258)(3)
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Operating income 21,692 7,140 7,206 1,460 37,498
Other income, net 95 0 0 95
Interest income/ (expense), net (9,290) 0 0 (4,000)(6) (12,972)
318 (3)
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Income before taxes 12,497 7,140 7,206 (2,222) 24,621
Provision for taxes 5,249 0 0 5,092 (7) 10,341
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Net Income $ 7,248 $ 7,140 $7,206 $ (7,314) $ 14,280
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Earnings per share - primary Net
earnings $ 0.87 $ 1.71
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Weighted average number of
commonshares outstanding
8,330 8,330
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Earnings per share - fully
diluted: Net earnings
$ 0.71 $ 1.22
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Weighted average number of
common shares outstanding 13,635 13,635
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</TABLE>
See Accompanying Notes to Pro Forma
Condensed Consolidated Financial Statements
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NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Elimination of consolidating intercompany account activity and balances.
2. Reflects the Company's share of equity in earnings of Mark Goodson
Productions, LLC as included in the Company's historical results (earned
through December 31, 1995) under the equity method of accounting.
3. Reflects goodwill amortization and interest expense related to the
Company's 50% interest in Mark Goodson Productions, LLC as included in
the Company's historical results.
4. Reflects the elimination of Mark Goodson Productions, L.P. historical
selling, general and administrative costs which will not be incurred
subsequent to the date of the acquisition, as the Mark Goodson
Productions, L. P. day-to-day operations have been absorbed into the
Company's existing operations.
5. Reflects depreciation expense and goodwill amortization (over 25 years)
as if the acquisition of 100% of Mark Goodson Productions, L.P. had
occurred January 1, 1995.
6. Reflects interest cost as if the acquisition of 100% of Mark Goodson
Productions, L.P. had occurred January 1, 1995.
7. Reflects income tax effects of the pro forma adjustments.
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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, thereunto duly authorized, in Los Angeles, California on June 28,
1996.
All American Communications, Inc.
By: /s/ Anthony J. Scotti
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Name: Anthony J. Scotti
Title: Chairman
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