<PAGE>
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 21, 2000
MATTHEWS STUDIO EQUIPMENT GROUP
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(Exact name of registrant as specified in its charter)
California
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(State or other jurisdiction of incorporation)
0-18102 95-1447751
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(Commission file number) (I.R.S. Employer
Identification Number)
3111 North Kenwood Street, Burbank, CA 91505
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(Address of principal executive office) (Zip Code)
(818) 525-5200
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year, if changed
since last report)
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Item 2. Acquisition or Disposition of Assets
On January 21, 2000, Matthews Studio Equipment Group ("Matthews") sold its Duke
City Video rental operations to Vitec DC Holding Corp. (the "Purchaser") for a
purchase price of $12.25 million in cash. The sale was structured as a sale of
assets whereby Duke City Video, Inc., Matthews' subsidiary (the "Seller"), sold
its assets to the Purchaser pursuant to an Asset Purchase Agreement dated
January 21, 2000, among Matthews, Duke City Holdings, Inc. ("Holdings"), the
Seller and the Purchaser (the "Agreement"). Excluded from the sale are the
Seller's Albuquerque property, its accounts receivables and certain other
assets. Also, the Seller retains responsibility for its liabilities.
$2 million of the purchase price was paid to the Seller on closing. $557,000 of
the purchase price will be paid to the Seller following a post-closing inventory
of rental equipment sold in the transaction. $8.393 million of the purchase
price will be paid to the Seller and the Seller's trade and other creditors,
provided the Seller obtains financing statement terminations pursuant to the
terms of the Agreement. The remaining $1.3 million of the purchase price is
being held by the Purchaser as security for certain indemnification obligations
of the Seller and will be paid to the Seller upon the expiration of certain time
periods specified in the Agreement.
Matthews, Holdings and the Seller are obligated to indemnify the Purchaser
against losses arising out of any inaccuracy of representations and warranties
made in the Agreement and against losses arising out of the Seller's
liabilities.
The Purchaser has purchased the name Duke City Video and derivations thereof as
part of the transaction.
A copy of the Agreement and a copy of Matthews' press release regarding the
transaction are attached as exhibits.
Item 7. Financial Statements and Exhibits
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(b) Pro forma financial information (unaudited) Pro forma condensed consolidated
financial data related to the disposition of a subsidiary is located at
addendum 1.
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(2)(c) Exhibits
EXHIBIT INDEX
Exhibit Document Description
99.7* Asset Purchase Agreement dated January 21, 2000, among Matthews Studio
Equipment Group, Duke City Video, Inc., Duke City Holdings, Inc. and
Vitec DC Holding Corp., but without schedules or exhibits.
99.8* Press Release Regarding the Sale of Duke City Video Assets.
*Previously filed
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report on Form 8-K/A to be signed on its behalf
by the undersigned hereunto duly authorized.
MATTHEWS STUDIO EQUIPMENT GROUP
(Registrant)
Date: March 18, 2000 By: /s/Anil Sharma
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Anil Sharma
President and Chief Financial Officer
Addendum 1
Pro forma financial data
The following unaudited pro forma condensed consolidated statements of
operations for the year ended September 30, 1999, and the three months ended
December 31, 1999, and the unaudited pro forma condensed consolidated balance
sheet of December 31, 1999, give effect to the sale by Matthews Studio Equipment
Group (the Company) of Duke City Video. The pro forma information is based on
the historical financial statements of the Company and gives effect to the
disposal of the operations and assets of Duke City Video, as if the disposition
had occurred at the beginning of the periods presented. The pro forma
information includes the pro forma adjustments described in the accompanying
notes to the unaudited pro forma condensed consolidated financial statements.
The unaudited pro forma condensed consolidated financial statements have been
prepared by the management of the Company and Duke City Video based upon the
historical information included herein and other financial information. These
pro forma statements do not purport to be indicative of the results of
operations or financial position which would have occurred had the disposition
been made at the beginning of the periods or as of the date indicated or of the
financial position or results of operations which may be obtained in the future.
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Matthews Studio Equipment Group and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
For the Year Ended September 30, 1999
(in thousands, except per share data)
<TABLE>
<CAPTION>
Company Pro Forma Pro forma
Historical Adjustment (1) Adjusted
----------- --------------- ----------
<S> <C> <C> <C>
Revenues from rental operations $ 39,434 ($11,627) $ 27,807
Net product sales 20,368 (254) 20,114
-------- ------- --------
59,802 (11,881) 47,921
Costs and expenses:
Cost of rental operations 25,908 (10,269) 15,639
Cost of sales 16,808 (114) 16,694
Selling, general and administrative 32,155 (8,579)(3) 23,576
Interest 7,634 (1,783)(2) 5,851
-------- ------- --------
82,505 (20,745) 61,760
Loss before income taxes (22,703) 8,864 (13,839)
Income taxes benefits (2,531) 287 (2,244)
-------- ------- --------
Net loss $(20,172) $ 8,577 $(11,595)
======== ======= ========
Net loss per common share,
Basic and Diluted ($2.17) ($1.25)
======== ========
Weighted average number of common shares
outstanding, basic and diluted. 9,305 9,305
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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Matthews Studio Equipment Group and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
For the Three Months Ended December 31, 1999
(in thousands, except per share data)
<TABLE>
<CAPTION>
Company Pro forma Pro forma
Historical Adjustment (1) Adjusted
------------- ------------ ------------
<S> <C> <C> <C>
Revenues from rental operations $ 11,054 $ (3,152) $ 7,902
Net product sales 4,595 (24) 4,571
------------- ------------ ------------
15,649 (3,176) 12,473
Costs and expenses:
Cost of rental operations 7,023 (2,678) 4,345
Cost of sales 3,873 (16) 3,857
Selling, general and administrative 4,296 (902) 3,394
Interest 2,391 (430)(2) 1,961
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17,583 (4,026) 13,557
Loss before income taxes (1,934) 850 (1,084)
Provision (benefit) for income taxes - - -
------------- ------------ ------------
Net Loss $ (1,934) $ 850 $ (1,084)
============= ============ ============
Net Loss per common share,
basic and diluted ($0.19) ($0.11)
============= ============
Weighted average number of common
share outstanding, basic and diluted 9,994 9,994
============= ============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
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Matthews Studio Equipment Group and Subsidiaries
Notes to Pro Forma Condensed Consolidated Statements of Operations
1. The accompanying Pro Forma Adjustments represent the sale of Duke City
Video's assets as if such sale had occurred at the beginning of each period
presented. The Pro Forma Adjusted statements of operations exclude the
$376,000 gain from sale of Duke City Video.
2. The interest expense recorded by Duke City Video included $225,000 and
$955,000 for the three months ended December 31, 1999 and twelve months
ended September 30, 1999, respectively, allocated by the parent company.
3. Selling, general and administrative expenses recorded by Duke City Video
during the year ended September 30, 1999 included a $4,541,000 non-recurring
and non-cash charge related to the write-down of certain long-term assets,
including fixed assets and goodwill.
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Matthews Studio Equipment Group and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheets
December 31, 1999
($ in thousands)
<TABLE>
<CAPTION>
Pro forma
Company -----------------------------
Historical Adjustments Adjusted
---------- ------------- ----------
<S> <C> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 442 $ --- $ 442
Accounts receivable, net 8,157 --- 8,157
Current portion of net investment in leases 255 --- 255
Inventories 3,688 --- 3,688
Prepaid expenses and other current assets 745 --- 745
--------- ---------- ----------
Total current assets 13,287 --- 13,287
Property, plant and equipment 89,267 (19,802) 69,465
Less accumulated depreciation (36,587) 8,531 (28,056)
--------- ---------- ----------
Net property, plant and equipment 52,680 (11,271) (1) 41,409
Investment in leases, less current portion 135 --- 135
Other assets 24,887 --- 24,887
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Total assets $ 90,989 $ (11,271) $ 79,718
========= ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 10,785 $ (3,176) $ 7,609
Accrued liabilities 4,623 --- 4,623
Current portion of long-term debt and capital
lease obligations 5,185 (1,815) 3,370
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Total current liabilities 20,593 (4,991) (1) 15,602
Long-term debt and capital leases 84,997 (6,280) (1) 78,717
Shareholders' equity:
Preferred stock --- --- ---
Common stock 12,036 --- 12,036
Retained earnings (26,637) --- (26,637)
--------- ---------- ----------
Total shareholders' equity (14,601) --- (14,601)
--------- ---------- ----------
Total liabilities and shareholders' equity $ 90,989 $ (11,271) $ 79,718
========= ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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Matthews Studio Equipment Group and Subsidiaries
Notes to Pro Forma Condensed Consolidated Balance Sheets
1. To record Duke City Video's assets sale and related liabilities.
2. The accompanying unaudited pro forma condensed consolidated financial
statements exclude the $376,000 gain from the Duke City Video's assets sale.
