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 31, 1998
ALLIANCE ENTERTAINMENT CORP.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-13054 13-3645913
- -------------------------------------------------------------------------------
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification No.)
4250 Coral Ridge Drive, Coral Springs, Florida 33065
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (954) 346-0110
<PAGE>
Item 5. Other Events
On July 31, 1998, Alliance Entertainment Corp. (the "Company") issued a
press release announcing that the U.S. Bankruptcy Court for the Southern
District of New York has confirmed the Company's Third Amended Joint Plan of
Reorganization. The Court's confirmation of the Company's plan clears the way
for its emergence from its voluntary Chapter 11 proceeding early in August. The
Company also reported its operating results for June.
Certain matters discussed in the press release 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 31, 1998.
<PAGE>
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/ Eric Weisman
----------------------------
Name: Eric Weisman
Title:President and
Chief Executive Officer
Date: August 3, 1998
<PAGE>
EXHIBIT INDEX
Exhibit 99.1 Press Release dated July 31, 1998.
News Release
- ----------------------------------------------
Sitrick and Company Inc.
Los Angeles/New York
Contact: Sandra Sternberg
Ann Julsen
Brenda Adrian
Sitrick and Company
310-788-2850
For Immediate Release
- ---------------------
Alliance Entertainment Plan of Reorganization Confirmed; Company Set to
Successfully Emerge from Chapter 11; Reports Operating Results for June
Coral Springs, Fla. -- July 31, 1998 -- Alliance Entertainment Corp. (OTC:
AETTQ), the nation's largest wholesaler of prerecorded music and related
products, announced today that the U.S. Bankruptcy Court for the Southern
District of New York has confirmed the Company's Third Amended Joint Plan of
Reorganization. The Court's confirmation of Alliance's plan clears the way for
the Company's emergence from its voluntary Chapter 11 proceeding early in
August.
"As the new, reorganized Alliance moves forward with a strengthened balance
sheet, reduced debt, interest and operating costs, the Company can now focus on
the music distribution business and opportunities for growth through emerging
distribution channels with significant emphasis on the Internet," said Eric
Weisman, Alliance's president and chief executive officer.
"In just 12 months," Mr. Weisman continued, "Alliance has successfully
restructured not only its balance sheet, but streamlined and improved its
overall business, returning to its core markets and renewing its core strengths.
"The Company exited areas of the business that no longer fit its strategic
plan, consolidated operations and procedures, and increased operational
efficiencies; and throughout this difficult period, we had the loyalty and
cooperation of our employees, our customers and our vendors. That has made all
the difference. We are gratified by the outcome of our restructing," Mr. Weisman
said, "but we also recognize the hardship that many experienced as a
consequence, and we are truly appreciative of their continued support. I want to
recognize, in particular, Al Teller, who worked closely with me to develop the
business plan that served as the foundation of the Company's plan of
reorganization and which, ultimately enabled Alliance to successfully emerge as
a viable competitor and a dominant force in the one-stop, budget and special
products music distribution business.
"I am confident that the hard times are now behind us and that the Company
will continue to grow stronger and more profitable in the months and years
ahead."
Under the terms of the Plan, the newly reorganized Alliance Entertainment
will become a private company majority owned by a syndicate of banks. Holders of
secured bank claims under the Company's pre-petition credit facilities are
expected to receive approximately 86% of the shares in the new reorganized
company. Holders of general, allowed unsecured claims, including trade claims
and Senior Subordinated Notes will receive approximately 6.5% of the equity of
the reorganized Company through warrants and shares of common stock, along with
certain litigation rights. The remainder of the equity in the newly reorganized
Alliance Entertainment is reserved for management. The Company's existing common
stock will be canceled upon the effective date of the Plan and shareholders in
the old Alliance Entertainment will receive no distribution, either in cash or
common stock of the new Company.
At the same time Alliance Entertainment Corp. announced that it has filed
its monthly operating report, in which it reported a consolidated net loss of
$3.4 million on net sales of $22.7 million. The loss includes $2.4 million in
interest and reorganization expenses. The June results compare favorably with
a consolidated net loss of $7.2 million on net sales of $22.9 million reported
in May.
Alliance Entertainment Corp. is the largest wholesaler of prerecorded music
and related products. The Company currently employs approximately 700 people in
the United States and Canada. It maintains headquarters in Coral Springs, Fla.
Alliance Entertainment Corp. and certain of its subsidiaries filed to reorganize
under Chapter 11 on July 14, 1997.
Forward-looking statements herein are made pursuant to the safe harbor
provisions of 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," "anticipates," or words of similar import. Similarly, statements that
describe the Company's future plans, objectives, estimates or goals are
forward-looking statements. There are certain important factors that could cause
results to differ materially from those anticipated by forward-looking
statements made herein. Investors are cautioned that all forward-looking
statements involve risks and uncertainty.
# # # #
