SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 ): July 1, 1997
ALLIANCE ENTERTAINMENT CORP.
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(Exact name of registrant as specified in its charter)
Delaware 1-13054 13-3645913
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(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification No.)
110 East 59th Street, New York, New York 10022
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 935-6662
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Item 5. Other Events
On July 1, 1997, Alliance Entertainment Corp. (the "Company") reported that it
was in default under its credit agreement as a result of its failure to make a
required amortization payment of $2 million and to satisfy a financial covenant
requiring the Company to raise $35 million worth of equity prior to July 1,
1997. While the banks have not waived the default, the Company does not believe
that the banks have a present intention to accelerate the outstanding
indebtedness.
Certain matters discussed in this report are forward-looking statements intended
to qualify for the safe harbors from liability established by the Private
Securities Litigation Reform Act of 1995. These forward-looking statements can
generally be identified as such because the context of the statement will
include words such as the Company "believes," "expects" or words of similar
import. Similarly, statements that describe the Company's future plans,
objectives, estimates or goals are also forward-looking statements. Such
statements address future events and conditions concerning capital expenditures,
earnings, sales, liquidity and capital resources, and accounting matters. Actual
results in each case could differ materially from those currently anticipated in
such statements, by reason of factors such as future economic conditions,
including changes in customer demand, legislative, regulatory and competitive
developments in markets in which the Company operates; and other circumstances
affecting anticipated revenues and costs.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 Press Release dated July 1, 1997
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SIGNATURE
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.
ALLIANCE ENTERTAINMENT CORP.
By: /s/ Christopher J. Joyce
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Name: Christopher J. Joyce
Title: Executive Vice President,
General Counsel and
Assistant Secretary
Date: July 1, 1997
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EXHIBIT INDEX
Exhibit 99.1 Press Release dated July 1, 1997.
STERN & CO.
MEDIA COMMUNICATIONS - INVESTOR RELATIONS
551 Madison Avenue, New York, NY 10022
Tel: (212) 888-0044 Fax: (212) 758-8994
World Wide Web: http://www.sternco.com
FROM: STERN & COMPANY CONTACT: Jeffrey Goldberger
(212) 888-0044
FOR IMMEDIATE RELEASE
FOR: ALLIANCE ENTERTAINMENT CORP. CONTACT: Timothy Dahltorp - CFO
110 East 59th Street, 18th Floor (212) 935-6662
New York, NY 10022
ALLIANCE ENTERTAINMENT REPORTS BANK DEFAULT
NEW YORK, July 1, 1997 -- Alliance Entertainment Corp. (NYSE: CDS) today
reported that it was in default under its credit agreement as a result of its
failure to make a required amortization payment of $2 million and had
additionally failed to satisfy a financial covenant requiring the Company to
raise $35 million of equity prior to July 1, 1997. Under the terms of its credit
agreement, the Company's banks have the right to accelerate the maturity of
approximately $190 million of outstanding indebtedness. While the Company has
not received a waiver from the banks with respect to the Company's default, the
Company is continuing its discussions with its banks and does not believe that
the banks have a present intention to accelerate the outstanding indebtedness.
The Company is currently considering all of its options including one or a
combination of certain financing proposals with third parties but no assurance
can be given that the Company will be successful in obtaining additional
financing or, in the event that such financing is obtained, that the Company
will receive necessary waivers from its banks.
Additionally, the Company reported that today, in light of the default under its
credit agreement, it believed that it is highly unlikely that the Company would
be permitted by its banks to make an interest payment due and payable on July
15, 1997 with respect to the Company's $125 million of 11.25% Senior
Subordinated Debentures.
This release contains forward-looking statements that are subject to risks and
uncertainties, including, but not limited to, the impact of competitive
products, product demand and market acceptance risks, reliance on key strategic
alliances, fluctuations in operating results and other risks detailed from time
to time in the Company's filings with the Securities and Exchange Commission.
These risks could cause the Company's actual results for the current fiscal year
and beyond to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company.
Alliance Entertainment Corp. is a fully integrated independent music company
which creates, markets and distributes its proprietary content rights consisting
of both new artist and catalog product in several genres. It is also the largest
domestic full service distributor of pre-recorded music and music related
products through traditional as well as emerging retail channels.
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