UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25 SEC FILE NUMBER
NOTIFICATION OF LATE FILING CUSIP NUMBER
(CHECK ONE): [ ] Form 10-K [ ] Form 20-F [ ] Form 11-K
[X] Form 10-Q [ ] Form N-SAR
For Period Ended: December 31, 1997
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[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended:
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READ ATTACHED INSTRUCTION SHEET BEFORE PREPARING FORM. PLEASE PRINT OR TYPE.
NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION HAS
VERIFIED ANY INFORMATION CONTAINED HEREIN.
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If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
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PART I -- REGISTRANT INFORMATION
Iwerks Entertainment, Inc.
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(Full Name of Registrant)
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(Former Name if Applicable)
4540 West Valerio Street
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(Address of Principal Executive Office (STREET AND NUMBER))
Burbank, California 91505
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(City, State and Zip Code)
PART II -- RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate)
(a) The reasons described in reasonable detail in Part III of this
| form could not be eliminated without unreasonable effort or
| expense;
| (b) The subject annual report, semi-annual report, transition
| report on Form 10-K, Form 20-F, 11-K or Form N-SAR, or portion
[ X] | thereof, will be filed on or before the fifteenth calendar day
| following the prescribed due date; or the subject quarterly
| report of transition report on Form 10-Q, or portion thereof
| will be filed on or before the fifth calendar day following
| the prescribed due date; and
| (c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K,
10-Q, N-SAR, or the transition report or portion thereof, could not be
filed within the prescribed time period.
Filing of the report is pending approval by the Board of Directors of
certain footnote disclosures.
<PAGE>
PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification.
Bruce Hinckley 818 955-7800
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period
that the registrant was required to file such report(s) been filed? If
answer is no, identify report(s).
[ X ] Yes [ ] No
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(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected
by the earnings statements to be included in the subject report or
portion thereof?
[ X ] Yes [ ] No
If so, attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a
reasonable estimate of the results cannot be made.
Please see press release dated February 10, 1998 attached hereto as
Exhibit 99.1.
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Iwerks Entertainment, Inc.
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(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date February 17, 1998 By: /s/ Bruce Hinckley
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INSTRUCTION: The form may be signed by an executive officer of the
registrant or by any other duly authorized representative. The name and
title of the person signing the form shall be typed or printed beneath the
signature. If the statement is signed on behalf of the registrant by an
authorized representative (other than an executive officer), evidence of
the representative's authority to sign on behalf of the registrant shall
be filed with the form.
- ------------------------------ ATTENTION ------------------------------------
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL
VIOLATIONS (SEE 18 U.S.C. 1001).
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GENERAL INSTRUCTIONS
1. This form is required by Rule 12b-25 of the General Rules and Regulations
under the Securities Exchange Act of 1934.
2. One signed original and four conformed copies of this form and amendments
thereto must be completed and filed with the Securities and Exchange
Commission, Washington, D.C. 20549, in accordance with Rule 0-3 of the
General Rules and Regulations under the Act. The information contained in
or filed with the Form will be made a matter of the public record in the
Commission files.
3. A manually signed copy of the form and amendments thereto shall be filed
with each national securities exchange on which any class of securities of
the registrant is registered.
4. Amendments to the notifications must also be filed on Form 12b-25 but need
not restate information that has been correctly furnished. The form shall
be clearly identified as an amended notification.
5. ELECTRONIC FILERS. This form shall not be used by electronic filers
unable to timely file a report solely due to electronic difficulties.
Filers unable to submit a report within the time period prescribed due to
difficulties in electronic filing should comply with either Rule 201 or
Rule 202 of Regulation S-T (section 232.201 or section 232.202 of this
chapter) or apply for an adjustment in filing date pursuant to Rule 13(b)
of Regulation S-T (section 232.13(b) of this chapter).
[LETTERHEAD OF IWERKS ENTERTAINMENT]
FOR IMMEDIATE RELEASE
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Contact: Bruce Hinckley Krista Grossman
Chief Financial Officer Director
Iwerks Entertainment Bozell Sawyer Miller Group
(818) 955-7800 (310) 442-2516
IWERKS ENTERTAINMENT ANNOUNCES
FISCAL 1998 SECOND QUARTER RESULTS
--------------------------------------------------
Burbank, CA, February 10, 1998 -- Iwerks Entertainment, Inc. [NASDAQ NM: IWRK]
announced second quarter financial results for the period ended December 31,
1997.
For the quarter, Iwerks reported a net loss of $(3.5) million, or $(0.29) per
share, on revenues of $6.0 million, compared with a net loss of $(57,000), or
$0.00 per share, on revenues of $10.0 million for the comparable period a year
ago.
For the six-month period ended December 31, 1997, Iwerks reported a net loss of
$(4.0) million, or $(0.33) per share, on revenues of $14.0 million, compared
with net income of $117,000, or $0.01 per share, on revenues of $19.6 million
for the comparable year-ago period. Results for the three and six months ended
December 31, 1997 include $218,000 and $531,000, respectively, of costs
associated with the previously announced merger with Showscan Entertainment
Inc.
Iwerks said that much of the revenue decline for the three- and six-month
periods was due to a decrease in hardware sales in Asia, which were down $3.8
million and $5.4 million, respectively, from the comparable year-earlier
periods. Additionally, the company's touring revenue declined by $0.5 million
in the quarter and $0.7 million for the six-month period ended December 31,
1997. Iwerks said these decreases were partially offset by minor increases in
Americas hardware sales and film licensing revenues. Iwerks said it expected
the lower Asian hardware and touring sales trends to continue for the
foreseeable future.
Iwerks had announced on December 24, 1997 that it expected its revenues and
earnings for the second quarter to fall short of analyst estimates and prior
year results primarily due to significantly weakened sales in the Asia Pacific
region. Iwerks also announced on January 28, 1998 that it reduced its
workforce by approximately 13% in order to align the company's staffing levels
with the lower revenues and earnings.
(more)
<PAGE>
Iwerks Announces Second Quarter Results - Page 2
Roy A. Wright, Chairman and Chief Executive Officer of Iwerks, said, "As we
reported earlier in the quarter, the Asian economic crisis has had a
substantial impact on our hardware sales to that region. Subsequently, we have
embarked on a two-pronged strategy, which includes implementing aggressive
cost-cutting measures to bring our expenses in line with the lower revenues,
and a renewed focus on the domestic, European and Latin American markets.
Already, as the results show, we have experienced an uptick in Americas sales
as well as a slight increase in our film licensing revenues."
Iwerks said that its gross profit margin for the three-month period had
decreased from 31% to 14%, due primarily to the company's inability to reduce
the fixed cost of touring operations at the same rate as touring sponsorship
revenue has declined.
The company's selling, general and administrative (SG&A) expenses increased by
$989,000 to $4.3 million for the second quarter, and increased by $1.2 million
to $7.9 million for the six-month period. Iwerks said the increases in SG&A
expenses were due to higher expenses for marketing, research and development
costs, insurance and allowance for doubtful accounts. SG&A figures do not
include transaction-related charges in connection with the previously announced
merger with Showscan Entertainment, which equal $218,000 and $531,000 for the
three- and six-month periods, respectively.
Iwerks said that it anticipates that its annual meeting of shareholders will be
held in March 1998, at which time shareholders will vote on the company's
proposed merger with Showscan. Iwerks and Showscan announced their intention
to merge in August 1997, and announced amended transaction terms in December
1997. The combined company, which will bring together the two largest motion
simulation companies, will be the largest provider of ride simulation
entertainment attractions and software in the world.
Iwerks Entertainment is one of the world's leading producers of high-tech,
multi-sensory experiences such as ride simulation, 2D and 3D giant screen
theaters, 360 degree video dance clubs and other immersive attractions.
Serving prestigious entertainment, information and marketing providers, more
than 250 Iwerks attractions can be found worldwide at location-based
entertainment centers, amusement parks, family entertainment centers, shopping
centers, casinos, resorts, nightclubs, restaurants, museums, fairs, festivals
and more.
(more)
Page 2
<PAGE>
Iwerks Announces Second Quarter Results - Page 3
FORWARD-LOOKING STATEMENT DISCLOSURE
------------------------------------
This release contrans forward-looking statements which are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from the forward-looking statements.
Those risks include, but are not limited to, the ongoing economic conditions
and situation in the Asia Pacific region, the level of available sales in the
rest of the world, costs of sales and the ability of the Company to maintain
pricing levels necessary to maintain gross profit margins, the successful
consummation and integration of the Company pending its merger with Showscan,
the level of selling, general administrative costs, the performance of the
Company under existing purchase contracts and the ability to obtain new
contracts, the success of the Company's owned and operating strategy, the
success of the Company's film software and the effects of competition, as well
as the other "risk factors" set forth in the Company's filings with the
Securities and Exchange Commission. All forward-looking statements should be
considered in light of these risks and uncertainties.
(one page of tables attached)
###
Page 3
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IWERKS ENTERTAINMENT, INC.
FINANCIAL HIGHLIGHTS
FISCAL 1998 SECOND QUARTER AND SIX-MONTH ENDED DECEMBER 31, 1997
(in 000s, except per share data)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
December 31, 1997 December 31, 1997
(unaudited) (unaudited)
1997 1996 1997 1996
-------- -------- -------- --------
Revenue $ 5,989 $ 10,023 $ 14,041 $ 19,618
Cost and expense
Cost of Sales 5,168 6,955 9,957 13,192
Selling, General &
Administrative 4,311 3,322 7,916 6,703
Merger Related (a) 218 - 531 -
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Total Cost 9,697 10,277 18,404 19,895
Interest income, net 208 197 357 394
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Net income (loss) $(3,500) $ (57) $(4,006) $ 117
======== ======== ======== ========
Net income (loss)
per common share $ (0.29) $ 0.00 $ (0.33) $ 0.01
======== ======== ======== ========
Weighted average
shares outstanding 12,161 11,715 12,160 11,675
======== ======== ======== ========
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 1997 June 30, 1997
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(unaudited) (unaudited)
ASSETS
Cash and marketable
securities $ 17,380 $ 19,067
Other current assets 9,677 16,188
Properties and Film
Inventory, net 12,554 10,377
Goodwill 15,054 15,367
Other assets 3,185 3,530
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Total assets $ 57,850 $ 64,529
========= =========
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities $ 11,959 $ 14,316
Long-term liabilities 1,511 1,827
Stockholders' equity 44,380 48,386
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Total liabilities and
stockholders' equity $ 57,850 $ 64,529
========= =========
(a) Costs associated with the pending merger of Showscan Entertainment, Inc.
