<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period ________________ to ______________
Commission File number 1-10799
ADDVANTAGE MEDIA GROUP, INC.
(Exact name of small business issuer as specified in its charter)
OKLAHOMA 73-1351610
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5100 East Skelly Drive
Meridian Tower, Suite 1080
Tulsa, Oklahoma 74135-6552
(Address of principal executive office) (Zip Code)
(918) 665-8414
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes x No
--- ---
Shares outstanding of the issuer's $.01 par value common stock as of August 1,
1997 is 5,856,584.
Transitional Small Business Issuer Disclosure Format (Check one): Yes No x
--- ---
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ADDVANTAGE MEDIA GROUP, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------ ------------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $1,254,362 $ 739,140
Accounts receivable 117,314 991,544
Deferred income taxes 2,299,849 3,288,000
Other current assets 43,816 21,166
---------- ----------
Total current assets 3,715,341 5,039,850
Property and equipment, at cost:
Calculators 2,421,224 2,157,010
Office and production equipment 701,554 478,274
Furniture and fixtures 89,586 80,320
---------- ----------
3,212,364 2,715,604
Accumulated depreciation 522,447 482,179
---------- ----------
2,689,917 2,233,425
Deferred income taxes -- 41,000
Patent, net of accumulated amortization of
$581,747 and $536,349 at June 30, 1997
and December 31, 1996, respectively 326,363 371,771
Deferred charges 101,214 37,489
---------- ----------
Total assets $6,832,835 $7,723,535
========== ==========
</TABLE>
-1-
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------ -------------
LIABILITIES AND STOCKHOLDERS' EQUITY (UNAUDITED)
<S> <C> <C>
Current liabilities:
Note payable to bank $ -- $ 1,156,656
Accounts payable 517,067 573,029
Accrued interest 119,171 138,505
Accrued settlement obligation 282,258 567,848
Other accrued liabilities 212,827 530,707
Accrued preferred stock dividends 107,849 432,850
Unearned advertising revenue 409,920 819,836
----------- -----------
Total current liabilities 1,649,092 4,219,431
Long-term obligations 168,336 108,600
Deferred income taxes 359,000 359,000
Shareholders' equity:
Preferred stock, $1.00 par value, 1,000,000
shares authorized; Series A preferred
stock--227,750 shares issued and
outstanding at June 30, 1997 and
December 31, 1996; liquidation preference,
$911,000 760,260 760,260
Common stock, $.01 par value, 10,000,000
shares authorized, 5,856,584 and
5,731,089 issued and outstanding at
June 30, 1997 and December 31, 1996,
respectively 58,566 57,311
Capital in excess of par value 8,781,413 8,753,869
Accumulated deficit (4,943,832) (6,534,936)
----------- -----------
Total stockholders' equity 4,656,407 3,036,504
----------- -----------
Total liabilities and stockholders' equity $ 6,832,835 $ 7,723,535
=========== ===========
</TABLE>
-2-
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
Revenues:
Advertising sales $2,869,424 $1,375,830
Other 6,465 3,990
---------- ----------
2,875,889 1,379,820
Costs and expenses:
Cost of advertising services 978,302 399,806
Selling expenses 157,261 50,198
General and administrative expenses 392,968 346,200
---------- ----------
1,528,531 796,204
---------- ----------
Operating income 1,347,358 583,616
Interest expense 20,477 135,116
---------- ----------
Income before provision for income taxes 1,326,881 448,500
Provision for income taxes 512,932 163,899
---------- ----------
Net income 813,949 284,601
Preferred stock dividends (22,650) (27,623)
---------- ----------
Net income applicable to common stock $ 791,299 $ 256,978
========== ==========
Net income per common share $0.12 $0.04
========== ==========
Shares used in computing net income per
common share 6,343,188 5,798,839
========== ==========
</TABLE>
-3-
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
Revenues:
Advertising sales $5,707,316 $1,980,630
Other 8,821 6,259
---------- ----------
5,716,137 1,986,889
Costs and expenses:
Cost of advertising services 1,907,042 620,609
Selling expenses 267,752 56,155
General and administrative expenses 811,972 612,520
---------- ----------
2,986,766 1,289,284
---------- ----------
Operating income 2,729,371 697,605
Interest expense 63,815 266,227
---------- ----------
Income before provision for income taxes 2,665,556 431,378
Provision for income taxes 1,029,151 163,899
---------- ----------
Net income 1,636,405 267,479
Preferred stock dividends (45,301) (55,246)
---------- ----------
Net income applicable to common stock $1,591,104 $ 212,233
========== ==========
Net income per common share $0.25 $0.04
========== ==========
Shares used in computing net income per
common share 6,320,154 5,680,109
========== ==========
</TABLE>
-4-
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------
1997 1996
------------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,636,405 $ 267,479
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income tax 1,029,151 163,900
Depreciation and amortization 251,879 122,930
Accrual of long-term obligations 59,736 54,300
Changes in assets and liabilities:
Accounts receivable 874,229 4,183
Other current assets (22,650) (32,125)
Deferred charges (63,725) (60,458)
Accounts payable (55,964) (41,970)
Accrued interest (19,334) 236,107
Accrued settlement obligation (285,588) 25,558
Other accrued liabilities (317,880) 51,210
Unearned advertising revenue (409,916) 276,750
----------- ----------
Net cash provided by operating activities 2,676,343 1,067,864
INVESTING ACTIVITIES
Purchases of property and equipment (662,963) (731,700)
----------- ----------
Net cash used in investing activities (662,963) (731,700)
FINANCING ACTIVITIES
Proceeds from issuance of bank notes -- 180,032
Payment on bank note (1,156,656) --
Payment of preferred stock dividends (370,301) --
Exercise of options and warrants 28,799 436,312
----------- ----------
Net cash provided (used in) by financing activities (1,498,158) 616,344
----------- ----------
Increase in cash 515,222 952,508
Cash at beginning of period 739,140 20,444
----------- ----------
Cash at end of period $ 1,254,362 $ 972,952
=========== ==========
Supplemental disclosures of cash information:
Interest paid $ 83,072 $ 361
=========== ==========
</TABLE>
-5-
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
statements and do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements.
However, the information furnished reflects all adjustments, consisting only of
normal recurring adjustments which are, in the opinion of management, necessary
in order to make the financial statements not misleading.
NOTE 2 - DESCRIPTION OF BUSINESS
The Company markets and sells in-store advertising to national advertisers. The
advertising is positioned on the Company's solar powered calculators attached to
the handles of mass merchants' shopping carts. The calculators are patented and
registered under the trademark "Shoppers Calculators."
On September 1, 1995, the Company and Wal-Mart Stores, Inc. ("Wal-Mart") entered
into a four-year contract under which the Company will install and maintain
Shoppers Calculators(R) in all of Wal-Mart's Supercenters in the continental
United States and Wal-Mart is responsible for selling the advertising for the
calculators during the initial phase of the contract. During the term of the
contract in which Wal-Mart is responsible for selling the advertising, Wal-Mart
has agreed to guarantee advertising revenues to the Company of $23.5 million,
subject to the Company's obligation to install and service the Shoppers
Calculators(R) during the revenue guaranty period. After the Company has
received payment of the total guaranteed advertising revenues, the Company has
the option to continue the contract and assume the advertising sales
responsibilities for the program. If the Company elects to continue the
contract, the program will then continue on this basis for a fixed period of
time, and upon conclusion of the term of the contract, the program will be
subject to re-evaluation by both parties. Through June 30, 1997, cumulative
advertising revenues have totaled $12,847,275, reducing the guaranteed
advertising revenues to be received in future periods to $10,647,255. Certain
terms of the contract were determined based on the following assumed schedule
with respect to the number of Supercenter stores to be participating in the
Company's program. The following table sets forth the assumed schedule of
Supercenter installations pursuant to the Wal-Mart contract's operating plan and
the actual installations in Supercenters to date.
-6-
<PAGE>
<TABLE>
<CAPTION>
Shopping Shopping
Stores to Carts to Stores Carts
Year be Added be Added Installed Installed
- - ------ --------- -------- --------- ---------
<S> <C> <C> <C> <C>
1995 33 39,600 41 31,925
1996 200 240,000 286 234,041
1997 100 120,000 /(1)/
1998 100 120,000 N/A N/A
--- -------
433 519,600
=== =======
</TABLE>
- - --------------------
(1) The Company currently plans to commence installations during the fall of
1997.
On November 22, 1996, the Company completed the redemption of its 600,000
outstanding Common Stock Purchase Warrants that were set to expire on December
31, 1996. A total of 582,907 Warrants, or 97%, were exercised with gross
proceeds aggregating $2,331,628. From the net proceeds, the Company paid
$2,000,000 of its outstanding bank debt in December 1996.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company entered into a contract with Wal-Mart effective as of September 1,
1995, whereby the Company will install and maintain its Shoppers Calculators in
all of Wal-Mart's Supercenter stores in the continental United States. Under
the contract, Wal-Mart is obligated to pay the Company $2,700 per installed
store, per four-week advertising cycle, until a total of approximately
$23,500,000 has been received by the Company. Wal-Mart Supercenter store
installations commenced in October 1995 with 41 stores being installed by year-
end. During 1996 a total of 286 additional stores were installed bringing total
installations to 327 by the end of 1996. No additional stores are scheduled for
installation until late 1997.
-7-
<PAGE>
THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996
Advertising revenues increased approximately $1,493,600 (109%) for the three
months ended June 30, 1997 as compared to the same period in 1996. During the
second fiscal quarter of 1997, an average of 327 stores contributed revenue for
the quarter as compared to 157 for the second quarter of 1996.
The significant increase in revenues improved operating income (income before
interest, taxes and preferred stock dividends) by $763,700 in the second quarter
of 1997 as compared to last year's second quarter. The Company's net income
applicable to common stock was $791,000 for 1997 second quarter, as compared to
a net income of $257,000 for the same period last year. As a result of
implementation of the new Wal-Mart contract, 1995 earnings were increased by
$3,910,000 from the accounting recognition of the future tax benefits of the
Company's net operating losses and temporary differences aggregating $10,290,000
at December 31, 1995. The 1997 tax expense of $513,000 reflects the
amortization of the deferred tax asset recognized in 1995.
Costs of advertising services (representing primarily labor to supervise,
service and clean the installed units, to change advertising messages and
depreciation of installed units) increased approximately $578,500 (145%) in the
second quarter of 1997 as compared to the same period in 1996 as a result of
higher labor costs, printing costs and depreciation due to the increase in the
number of calculators installed and serviced during the respective periods.
Selling expense increased approximately $107,100 (213%) in the second quarter of
1997. This was primarily due to increases during 1997 in payroll, payroll
related expenses, sales representative retainer expenses and marketing materials
costs. During the last quarter of 1996, the Company assumed primary
responsibility for selling advertising on the Shoppers Calculators installed in
Wal-Mart Supercenters.
General and administrative expenses increased $46,800 (14%) in the second
quarter of 1997 as compared to the same period in 1996. During 1997, payroll
and payroll related expenses increased $2,400 as a result of higher compensation
levels and increased staff required to administer the Wal-Mart Supercenter
contract. Officer and management bonus accruals increased $40,800 in 1997 as
compared to the same period in 1996. Executive retirement plan accruals,
including insurance cost to fund future payments, decreased $15,800 during 1997.
Expenses related to broker and analyst meetings and other shareholder expenses
increased $9,300 over 1996. Increases amounting to $10,100 occurred in
professional fees, occupancy costs, business taxes and other expenses.
Interest expenses decreased approximately $114,600 (85%) during the second
quarter of 1997 as compared to the same period in 1996. Interest on bank
borrowings decreased $94,100 due primarily to significantly lower levels of bank
borrowing during 1997. Vendor interest was $7,600 lower in 1997 as compared to
1996. Interest accrued on amounts due investors, including the accretion of
discount for the litigation settlement, decreased $12,900 during the second
quarter of 1997 as compared to 1996.
-8-
<PAGE>
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
Advertising revenues increased approximately $3,726,700 (188%) for the six
months ended June 30, 1997 as compared to the same period in 1996. During the
first six months of 1997, an average of 327 stores contributed revenue for the
quarter as compared to 113 for the same period in 1996.
The significant increase in revenues improved operating income (income before
interest, taxes and preferred stock dividends) by $2,031,800 during the first
six months of 1997 as compared to the same period in 1996. The Company's net
income applicable to common stock was $1,591,100 for the 1997 first six months,
as compared to a net income of $212,200 for the same period last year. As a
result of implementation of the new Wal-Mart contract, 1995 earnings were
increased by $3,910,000 from the accounting recognition of the future tax
benefits of the Company's net operating losses and temporary differences
aggregating $10,290,000 at December 31, 1995. The 1997 tax expense of
$1,029,200 reflects the amortization of the deferred tax asset recognized in
1995.
Costs of advertising services (representing primarily labor to supervise,
service and clean the installed units, to change advertising messages and
depreciation of installed units) increased approximately $1,286,400 (207%) in
the first six months of 1997 as compared to the same period in 1996 as a result
of higher labor costs, printing costs and depreciation due to the increase in
the number of calculators installed and serviced during the respective periods.
Selling expense increased approximately $211,600 (377%) in the first six months
of 1997 compared to the same period in 1996. This was primarily due to
increases during 1997 in payroll, payroll related expenses, sales representative
retainer expenses and marketing materials costs. During the last quarter of
1996, the Company assumed primary responsibility for selling advertising on the
Shoppers Calculators installed in Wal-Mart Supercenters.
General and administrative expenses increased $199,500 (33%) in the first six
months of 1997 as compared to the same period in 1996. During 1997, payroll and
payroll related expenses increased $84,000 as a result of higher compensation
levels and increased staff required to administer the Wal-Mart Supercenter
contract. Officer and management bonus accruals increased $128,400 in 1997 as
compared to the same period in 1996. Executive retirement plan accruals,
including insurance cost to fund future payments, decreased $34,400 during 1997.
Expenses related to broker and analyst meetings and other shareholder expenses
increased $2,000 over 1996. Increases amounting to $19,500 occurred in
professional fees, occupancy costs, business taxes and other expenses.
Interest expenses decreased approximately $202,400 (76%) during the first six
months of 1997 as compared to the same period in 1996. Interest on bank
borrowings decreased $172,200 due primarily to significantly lower levels of
bank borrowing during 1997. Vendor interest was $9,600 lower in 1997 as
compared to 1996. Interest accrued on amounts due investors, including the
accretion of discount for the litigation settlement, decreased $20,600 during
the first six months of 1997 as compared to 1996.
-9-
<PAGE>
FINANCIAL CONDITION AND LIQUIDITY
During the first quarter of 1995, the Company completed an offering of
Promissory Notes and Warrants for an aggregate consideration of $200,000. The
offering included (a) a total of 500,000 Warrants, each of which, upon exercise,
entitled the holder to acquire one share of the Company's Common Stock at a
price of $.20 per share, and were exercisable within 20 months from the date of
issuance; (b) a total of 10% of the net recovery from the Wal-Mart lawsuit
described elsewhere herein; and (c) Promissory Notes in an aggregate principal
amount of $200,000 and bearing interest at the rate of 10% per annum due on or
before 20 days after the final resolution, by settlement, final judgment or
otherwise, of the Wal-Mart litigation. On November 30, 1995, investors holding
warrants to purchase 425,000 shares of Common Stock exercised such Warrants by
converting Promissory Notes in the principal amount of $85,000 to acquire the
shares. At the same date, new Promissory Notes totaling $130,808 (representing
$115,000 principal and $15,808 accrued interest on the original notes) were
issued. These notes were paid in full at December 31, 1996.
The Company entered into separate agreements with Wal-Mart in July 1993 and June
1994 which provided for the installation of the Company's calculators in certain
Wal-Mart stores. The July 1993 and June 1994 contracts were never implemented,
and on January 18, 1995, the Company filed a lawsuit against Wal-Mart for the
alleged breach of the terms of those contracts.
On September 1, 1995, the Company and Wal-Mart entered into a new contract and
the Company dismissed the lawsuit. Under the terms of new four-year contract,
the Company is required to install the Shoppers Calculators in all of Wal-Mart's
Supercenters in the continental United States, and Wal-Mart is to sell the
advertising for the calculators during the initial phase of the contract.
During the term of the contract in which Wal-Mart sells the advertising, Wal-
Mart has agreed to guarantee advertising revenues to the Company of
approximately $23.5 million subject to the Company's obligation to install and
service the Shoppers Calculators during the revenue guaranty period. At the
conclusion of the Wal-Mart sales phase, the Company has the option to continue
the contract through October 6, 1999, by assuming the advertising sales
responsibilities for the program. Upon conclusion of the contract, the program
is subject to re-evaluation by both parties.
The present value of the amount payable to the participants in the Company's
private placement (including Messrs. Hood and Young who provided the initial
funding for the lawsuit), who have the right to receive an aggregate of 12% of
the net recovery in the Wal-Mart litigation, has been calculated by the Company
to be $498,711, excluding accretion of discount, and has been recorded as
accrued settlement obligation in the financial statements.
In compliance with the terms of the new contract, on October 17, 1995, the
Company furnished Wal-Mart with a detailed "operating plan" which projects
advertising revenues, capital costs and operating expenses based on the new
contract. The purpose of this operating plan was to determine the financial
impact of the new contract to the Company, F&M Bank and creditors. The
operating plan in its final form covered years 1995, 1996, 1997 and 1998. The
key
-10-
<PAGE>
assumptions used to develop the operating plan were provided to the Company by
Wal-Mart and were as follows:
<TABLE>
<CAPTION>
SUPERCENTER INSTALLATIONS
Year Stores Shopping Carts
---- ------ --------------
<S> <C> <C>
1995 33 39,600
1996 200 240,000
1997 100 120,000
1998 100 120,000
--- -------
Total Installations 433 519,600
=== =======
</TABLE>
The Wal-Mart contract provided the Company with additional bank financing, which
was guaranteed by Wal-Mart, in the amount of $700,000. The note evidencing such
financing, including $60,270 of accrued interest, was paid in October 1996.
On March 6, 1996, the Company completed a restructuring of all past due bank
debt effective as of October 1, 1995. The $1,800,000 revolving line of credit,
other notes totaling $1,132,622 and accrued interest through September 30, 1995
of $474,034 were combined into a new note in the amount of $3,406,656. During
the fourth quarter of 1996, cash flow from operations and proceeds from the
Company's warrant redemption were utilized to reduce the principal amount of the
loan by $2,250,000. During the first and second quarters of 1997, the Company
amortized the balance of this loan by making principal payments of $751,000 and
$406,000, respectively.
The Company's first revenue period under the new contract began on November 6,
1995. Through June 30, 1997, cumulative revenues received from Wal-Mart totaled
$12,847,275, reducing the guaranteed revenues to be received in future periods
to $10,647,255. The Company believes the cash flow from the Wal-Mart contract
should allow the Company to meet its anticipated cash requirements for the
foreseeable future, including repayment of all past due obligations.
During June 1996, certain warrants to purchase up to 60,000 units (each unit
consisting of two shares of Common Stock and one Warrant to purchase one share
of Common Stock for $4.80 per share) were exercised. These unit Warrants were
issued in June 1991 to the selling agent in connection with the Company's
initial public offering. A total of 120,000 shares of Common Stock and Warrants
to purchase 60,000 shares of Common Stock at $4.80 per share were issued, with
net proceeds to the Company amounting to $432,000. The Warrants to purchase
60,000 shares of Common Stock, set to expire on December 31, 1996, were extended
to December 31, 1998.
During August 1996, 50,000 shares of the Company's Series A, 10% Cumulative
Convertible Preferred Stock, including accrued dividends and interest thereon,
were converted into 75,532
-11-
<PAGE>
shares of the Company's Common Stock at the conversion rate of $4.00 per share.
As a result of this transaction, stockholders' equity was increased $102,200.
On November 22, 1996, the Company completed the redemption of its 600,000
outstanding Common Stock Purchase Warrants that were set to expire on December
31, 1996. A total of 582,907 Warrants, or 97%, were exercised with gross
proceeds aggregating $2,331,628. This amount, net of commissions and
registration expenses of approximately $260,000, was committed to repayment of
the Company's bank debt. From the net proceeds, the Company paid $2,000,000 of
its outstanding bank debt in December 1996.
FORWARD-LOOKING STATEMENTS
Certain statements included in this report which are not historical facts are
forward-looking statements, including the information provided with respect to
the projected installations of the Shoppers Calculator in the Wal-Mart
Supercenters. These forward-looking statements are based on current
expectations, estimates, assumptions and beliefs of management; and words such
as "expects," "anticipates," "intends," "plans," "believes," "estimates" and
similar expressions are intended to identify such forward-looking statements.
These forward-looking statements involve risks and uncertainties, including, but
not limited to, the Company's dependence on the Wal-Mart contract, the number
and rate of new Supercenters constructed by Wal-Mart, general economic
conditions and conditions affecting the mass merchandising industry, the
availability of raw materials and manufactured components and the Company's
ability to fund the costs thereof, the Company's ability to adequately install
and service the calculator units as required by the contract, and other factors
which may affect the Company's ability to comply with its obligations under the
contract. Accordingly, actual results may differ materially from those
expressed in the forward-looking statements.
-12-
<PAGE>
PART II--OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
The annual meeting of shareholders of the Company was held in the Meeting
Tower Conference Room, Meridian Tower, 4th Floor, 5100 East Skelly Drive, Tulsa,
Oklahoma on May 29, 1997. At the meeting the following directors were elected
for one year terms (with the votes as indicated):
<TABLE>
<CAPTION>
For Withheld Abstentions/
--------- -------- Broker Non-Votes
----------------
<S> <C> <C> <C>
Charles H. Hood 5,477,934 5,500 -0-
Gary W. Young 5,477,934 5,500 -0-
J. Larri Barrett 5,477,934 5,500 -0-
John W. Condon 5,477,934 5,500 -0-
</TABLE>
The shareholders approved the proposed amendment to the ADDvantage Media
Group, Inc. 1991 Stock Plan (with the votes as indicated):
For: 5,236,094 Against: 152,425 Abstentions/Broker Non-Votes: 94,915
The shareholders ratified Tullius, Taylor, Sartain & Sartain as auditors to
perform the audit for the fiscal year ending December 31, 1997 (with the votes
as indicated):
For: 5,475,769 Against: 3,000 Abstentions/Broker Non-Votes: 4,665
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit No. Description
----------- -----------
11 Statement re: Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K.
None.
-13-
<PAGE>
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.
ADDVANTAGE MEDIA GROUP, INC.
SIGNATURE TITLE DATE
- - --------- ----- ----
/s/ GARY W. YOUNG Director, Executive Vice President - August 8, 1997
- - -------------------- Finance and Administration and
Gary W. Young Treasurer (Authorized Officer and
Principal Financial Officer)
-14-
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION
----------- -----------
11 Statement re: Computation of Per Share
Earnings
27 Financial Data Schedule
-15-
<PAGE>
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
Three months ended June 30, 1997
<TABLE>
<CAPTION>
Primary
-----------
<S> <C>
Net income $ 813,949
Less preferred stock dividends (22,650)
----------
Net income applicable to common stock 791,299
==========
Weighted average shares outstanding 5,856,584
Effect of options and warrants 486,604
----------
Weighted average common and common
equivalent shares 6,343,188
----------
Net income per common share $0.12
==========
</TABLE>
Six months ended June 30, 1997
<TABLE>
<CAPTION>
Primary
-----------
<S> <C>
Net income $1,636,405
Less preferred stock dividends (45,301)
----------
Net income applicable to common stock 1,591,104
==========
Weighted average shares outstanding 5,818,385
Effect of options and warrants 501,769
----------
Weighted average common and common
equivalent shares 6,320,154
----------
Net income per common share $0.25
==========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-START> APR-01-1997 JAN-01-1997
<PERIOD-END> JUN-30-1997 JUN-30-1997
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0 0
760,260 0
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