<PAGE>
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): May 30, 1997
MOBILEMEDIA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-26320 22-3253006
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
65 Challenger Road, Ridgefield Park, New Jersey 07660
(Address of principal executive offices)
(Zip Code)
(201) 440-8400
(Registrant's telephone number, including area code)
--------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Changes in Control of Registrant
Not Applicable.
Item 2. Acquisition or Disposition of Assets.
Not Applicable.
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable.
Item 5. Other Events.
On May 30, 1997, MobileMedia Corporation (the
"Company"), MobileMedia Communications, Inc. ("MobileMedia
Communications") and all of the subsidiaries of MobileMedia
Communications filed with the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court") their monthly
operating report for the month ended April 30, 1997, which is
attached hereto as Exhibit 99.1.
On June 3, 1997, the Company issued the press
release attached hereto as Exhibit 99.2. The press release states
that the Company has determined to delist its Class A common stock,
par value $.001 per share (the "Common Stock"), currently traded on
the Nasdaq National Market. The last trading day for the Common Stock
on the Nasdaq National Market will be June 3, 1997.
As disclosed, the Company did not file its Report on
Form 10-K for the fiscal year ended December 31, 1996 or its Report
on Form 10-Q for the fiscal quarter ended March 31, 1997 by their
respective due dates of March 31, 1997 and May 15, 1997. The Company
had anticipated filing the Report on Form 10-K by May 31, 1997 and
the Report on Form 10-Q by June 30, 1997. In March 1995, the
Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
("SFAS 121"), which is effective for financial statements for fiscal
years beginning after December 15, 1995. Under certain circumstances,
SFAS 121 requires companies to write down the carrying value of
long-lived assets recorded in their financial statements to the fair
value of such assets. A significant amount of the assets of the
Company, which were acquired in acquisitions of businesses, including
the DialPage and MobileComm acquisitions, were recorded on the
Company's financial statements in accordance with principles of
purchase accounting at the acquisition prices and constitute long-lived
assets. The Company has determined, and its independent auditors have
concurred, that SFAS 121 is applicable to the Company, and therefore
the Company may be required to write down the carrying value of its
long-lived assets to their fair value. The Company believes that the
amount of the write-down could be material; however, it is not possible
at this time to determine its amount. Since the Company cannot comply
with SFAS 121 at this time, it is unable to issue audited financial
statements in compliance with generally accepted accounting principles.
Consequently, the Company will not file its Report on Form 10-K or
its other periodic reports under the Securities Exchange Act of
1934, as amended. Accordingly, the Company is unable to comply with
the continued listing requirements of the Nasdaq National Market and
has requested that its Common Stock be delisted.
The Company will continue to file, under cover of
Form 8-K, copies of the monthly operating reports required to be
filed with the Bankruptcy Court within 15 days after filing such
reports with the Bankruptcy Court.
Item 6. Resignations of Registrants Directors.
Not Applicable
Item 7. Financial Statements and Exhibits.
Not Applicable
Item 8. Change in Fiscal Year.
Not Applicable
<PAGE>
Pursuant to the requirements of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly
authorized.
MOBILEMEDIA CORPORATION,
a Delaware corporation
Date: June 3, 1997 By: /s/ Santo J. Pittsman
---------------------
Santo J. Pittsman
Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Page
- ------- ----
Exhibit 99.1 -- Monthly Operating Report
Exhibit 99.2 -- Press Release
<PAGE>
EXHIBIT 99.1
OFFICE OF THE U.S. TRUSTEE - REGION 3
MONTHLY OPERATING REPORT
FOR THE MONTH ENDED APRIL 30, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
DOCUMENT PREVIOUSLY EXPLANATION
REQUIRED ATTACHMENTS: ATTACHED SUBMITTED ATTACHED
<S> <C> <C> <C>
1. Tax Receipts ( ) (X) (X)
2. Bank Statements ( ) ( ) (X)
3. Most Recently Filed Income Tax Return ( ) (X) ( )
4. Most Recent Annual Financial Statements ( ) (X) ( )
Prepared by Accountant
</TABLE>
IN ACCORDANCE WITH TITLE 28, SECTION 1746, OF THE UNITED STATES CODE, I DECLARE
UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING MONTHLY OPERATING
REPORT AND THE ACCOMPANYING ATTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE
DOCUMENTS ARE TRUE, CORRECT AND COMPLETE.
RESPONSIBLE PARTY:
/s/ Santo Pittsman Senior Vice President/Chief Financial Officer
- ------------------------------ ---------------------------------------------
SIGNATURE OF RESPONSIBLE PARTY TITLE
Santo Pittsman May 29, 1997
- ------------------------------ ---------------------------------------------
PRINTED NAME OF RESPONSIBLE PARTY DATE
Page 1 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
ATTACHMENT
FOR THE MONTH ENDED APRIL 30, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- -------------------------------------------------------------------------------
1. Payroll tax filings and payments are made by Automated Data Processing,
Inc. (an outside payroll processing company). Evidence of tax payments are
available upon request. Previously, the Debtors filed copies of such
evidence for the third quarter of 1996 with the US Trustee.
Please see the Status of Post Petition Taxes attached hereto for the
month's activity.
2. The Debtors have 63 bank accounts. In order to minimize costs to the
estate, the Debtors have included a GAAP Statement of Cash Flows in the
Monthly Operating Report. The Statement of Cash Flows replaces the listing
of cash receipts and disbursements, copies of the bank statements, and bank
account reconciliations.
PAGE 2 OF 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE MONTH ENDED APRIL 30, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- -------------------------------------------------------------------------------
See Statement of Operations for reporting period attached.
PAGE 3 OF 17
<PAGE>
HEADNOTES:
THE AUDIT OF THE FINANCIAL STATEMENTS OF THE DEBTORS FOR THE YEAR ENDED
DECEMBER 31, 1996 HAS NOT BEEN COMPLETED. THEREFORE, IN ADDITION TO THE
ADJUSTMENTS REFLECTED BELOW, THE FINANCIAL STATEMENTS INCLUDED IN THIS
MONTHLY OPERATING REPORT DO NOT REFLECT THE EFFECT OF ANY AUDIT ADJUSTMENTS
FOR THE YEAR ENDED DECEMBER 31, 1996, WHICH ADJUSTMENTS MAY BE MATERIAL.
THE DEBTORS BELIEVE THAT THERE WILL BE AUDIT ADJUSTMENTS TO ITS ACCOUNTS
RECEIVABLE, INVENTORY, FIXED ASSETS AND INTANGIBLE ASSETS. THERE MAY ALSO BE
AJDUSTMENTS TO CERTAIN OTHER ACCOUNTS AS A RESULT OF THE AUDIT AND THE
DEBTORS' FILING FOR PROTECTION UNDER CHAPTER 11 OF THE US BANKRUPTCY CODE ON
JANUARY 30, 1997.
(1) INCLUDES AN ADJUSTMENT OF APPROXIMATELY $10.1 MILLION TO DECREASE
SERVICE, RENTS AND MAINTENANCE REVENUE FOR THE FIRST QUARTER OF 1997, $6.7
MILLION OF WHICH RELATES TO JANUARY AND FEBRUARY 1997. SUCH ADJUSTMENT
REFLECTS THE RECORDING OF A RESERVE FOR POTENTIAL DISPARITIES BETWEEN
RECORDED REVENUES AND COLLECTIONS. ACCORDINGLY, RESULTS FOR THE MONTH OF
MARCH 1997 ARE NOT INDICATIVE OF THE DEBTORS' UNDERLYING PERFORMANCE DURING
THAT MONTH.
(2) INCLUDES AN ADJUSTMENT OF APPROXIMATELY $1.0 MILLION TO DECREASE COST
OF PRODUCTS SOLD DURING THE FIRST QUARTER OF 1997. SUCH ADJUSTMENT IS OFFSET
BY A REDUCTION IN AN INVENTORY RESERVE ESTABLISHED AS OF DECEMBER 31, 1996.
SEE HEADNOTES 1 AND 2 TO CONSOLIDATED BALANCE SHEET.
<TABLE>
<CAPTION>
MOBILEMEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE MONTHS ENDED APRIL 30, 1997, MARCH 31, 1997 AND FEBRUARY 28, 1997
(UNAUDITED)
(IN THOUSANDS)
APRIL MARCH FEBRUARY
1997 1997 1997
-------------- ---------------- ----------------
<S> <C> <C> <C>
PAGING REVENUES
SERVICE, RENTS & MAINTENANCE $42,597 $36,633 (1) $46,472
EQUIPMENT SALES
PRODUCT SALES 2,930 3,853 2,971
COST OF PRODUCTS SOLD 2,515 2,808 (2) 3,000
------------- -------------- -------------
EQUIPMENT MARGIN 415 1,045 (29)
NET REVENUE $43,011 $37,678 $46,443
OPERATING EXPENSE
SERVICE, RENTS & MAINTENANCE 12,284 11,307 11,587
SELLING 5,971 7,015 5,979
GENERAL ADMINSTRATION 17,458 16,795 17,505
------------- -------------- -------------
OPERATING EXPENSE BEFORE DEPR. & AMORT. $35,713 $35,117 $35,071
EBITDA BEFORE RESTRUCTURING COSTS $7,298 $2,561 $11,372
RESTRUCTURING COSTS 1,891 1,841 1,873
------------- -------------- -------------
EBITDA AFTER RESTRUCTURING COSTS $5,408 $720 $9,499
DEPRECIATION 11,017 9,784 12,414
AMORTIZATION 9,232 9,233 9,233
------------- -------------- -------------
TOTAL DEPRECIATION AND AMORTIZATION $20,250 $19,017 $21,647
OPERATING LOSS ($14,842) ($18,297) ($12,148)
INTEREST EXPENSE 5,056 5,194 5,747
OTHER EXPENSE 1 0 1
------------- -------------- -------------
LOSS BEFORE INCOME TAX BENEFIT ($19,898) ($23,491) ($17,896)
INCOME TAX BENEFIT 0 0 0
------------- -------------- -------------
NET LOSS ($19,898) ($23,491) ($17,896)
------------- -------------- -------------
------------- -------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES.
4 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED BALANCE SHEET
FOR THE MONTH ENDED APRIL 30, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- --------------------------------------------------------------------------------
See balance sheet attached.
PAGE 5 OF 17
<PAGE>
HEADNOTES:
THE AUDIT OF THE FINANCIAL STATEMENTS OF THE DEBTORS FOR THE YEAR ENDED
DECEMBER 31, 1996 HAVE NOT BEEN COMPLETED. THEREFORE, IN ADDITION TO THE
ADJUSTMENTS REFLECTED BELOW, THE FINANCIAL STATEMENTS INCLUDED IN THIS
MONTHLY OPERATING REPORT DO NOT REFLECT THE EFFECT OF ANY AUDIT ADJUSTMENTS
FOR THE YEAR ENDED DECEMBER 31, 1996, WHICH ADJUSTMENTS MAY BE MATERIAL.
THE DEBTORS BELIEVE THAT THERE WILL BE AUDIT ADJUSTMENTS TO ITS ACCOUNTS
RECEIVABLE, INVENTORY, FIXED ASSETS AND INTANGIBLE ASSETS. THERE MAY ALSO BE
ADJUSTMENTS TO CERTAIN OTHER ACCOUNTS AS A RESULT OF THE AUDIT AND THE
DEBTORS' FILING FOR PROTECTION UNDER CHAPTER 11 OF THE US BANKRUPTCY CODE ON
JANUARY 30, 1997.
(1) REFLECTS AN APPROXIMATE $1.0 MILLION REDUCTION IN AN INVENTORY
RESERVE ESTABLISHED AT DECEMBER 31, 1996. SEE HEADNOTE 2 TO CONSOLIDATED
STATEMENT OF OPERATIONS AND HEADNOTE 2 TO CONSOLIDATED BALANCE SHEET.
(2) THE FOLLOWING ADJUSTMENTS HAVE BEEN MADE TO INVENTORY AND ACCUMULATED
DEFICIT-PRE-PETITION AS PREVIOUSLY REPORTED AT FEBRUARY 28, 1997: (I) AN
ADJUSTMENT OF APPROXIMATELY $3.2 MILLION TO DECREASE INVENTORY, REFLECTING
THE ESTABLISHMENT OF A LOWER OF COST OR MARKET RESERVE AT DECEMBER 31, 1996,
AND (II) A CORRESPONDING INCREASE IN ACCUMULATED DEFICIT-PRE-PETITION. SEE
HEADNOTE 2 TO CONSOLIDATED STATEMENT OF OPERATIONS.
(3) AN ADJUSTMENT HAS BEEN MADE TO PREVIOUSLY REPORTED PROPERTY AND
EQUIPMENT, NET AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES. INCLUDED
IN FEBRUARY 28, 1997 BALANCE SHEET IS (I) AN ADJUSTMENT OF APPROXIMATELY $3.6
MILLION TO DECREASE ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES,
REFLECTING A REVIEW OF ACCOUNTS PAYABLE AND THE ELIMINATION OF CERTAIN
DUPLICATIVE ENTRIES AT DECEMBER 31, 1996, AND (II) A CORRESPONDING REDUCTION
IN PROPERTY AND EQUIPMENT, NET.
(4) THE FEBRUARY 28, 1997 BALANCE SHEET HAS BEEN RESTATED TO REFLECT THE
RECLASSIFICATION OF THE CHASE CREDIT FACILITY AND DEFERRED TAX LIABILITY.
MOBILEMEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS OF APRIL 30, 1997, MARCH 31, 1997 AND FEBRUARY 28, 1997
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
APRIL 30 MARCH 31 FEBRUARY 28
1997 1997 1997
-------------- --------------- ---------------
<S> <C> <C> <C>
ASSETS:
CURRENT ASSETS:
Cash $10,523 $14,444 $20,545
Accounts Receivable, Net 89,704 94,742 102,156
Inventory 10,535 10,150(1) 8,768(2)
Prepaid Expenses 1,287 1,322 1,275
Other Current Assets 3,570 2,682 2,644
------------ ------------ ------------
Total Current Assets 115,619 123,340 135,387
NONCURRENT ASSETS:
Property and Equipment, Net 338,178 340,205 346,017(3)
Deferred Financing Fees, Net 27,369 27,923 28,476
Investment In Net Assets Of Equity Affiliate 2,180 2,152 2,089
Intangible Assets, Net 1,091,798 1,101,030 1,110,255
Other Assets 625 637 651
------------ ------------ ------------
TOTAL NONCURRENT ASSETS 1,460,150 1,471,947 1,487,488
TOTAL ASSETS $1,575,769 $1,595,286 $1,622,875
------------ ------------ ------------
------------ ------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES NOT SUBJECT TO COMPROMISE:
DIP Credit Facility $15,000 $20,000 $45,000
Accrued Restructuring Costs 3,410 2,560 1,588
Accrued Wages, Benefits and Payroll Taxes 6,731 5,995 4,285
Accounts Payable - Post Petition 5,236 5,266 1,193
Accrued Interest (Chase & DIP Facilities ) 4,249 4,414 3,075
Accrued Expenses and Other Current Liabilities 39,721 31,113 15,646(3)
Advance Billings and Customer Deposits 39,063 39,742 40,534
------------ ------------ ------------
TOTAL LIABILITIES NOT SUBJECT TO COMPROMISE 113,411 109,090 111,321
LIABILITIES SUBJECT TO COMPROMISE:
Accrued Wages, Benefits and Payroll Taxes 11,084 11,331 11,408
Chase Credit Facility 649,000 649,000 649,000
Notes Payable - 10 1/2% 174,125 174,125 174,125
Notes Payable - 9 3/8% 250,000 250,000 250,000
Notes Payable - Yampol 986 986 986
Notes Payable - Dial Page 12 1/4% 1,570 1,570 1,570
Accrued Interest On Notes Payable 20,759 20,755 20,755
Accounts Payable- Pre Petition 13,093 11,537 7,207
Accrued Expenses and Other Current Liabilities - Pre Petition 30,176 36,433 42,495
Other Liabilities 5,142 5,186 5,242
------------ ------------ ------------
TOTAL LIABILITIES SUBJECT TO COMPROMISE 1,155,935 1,160,923 1,162,789(4)
DEFERRED TAX LIABILITY 72,097 72,097 72,097
STOCKHOLDERS' EQUITY
Class A Common Stock 39 39 39
Class B Common Stock 2 2 2
Additional Paid-In Capital 671,459 671,459 671,459
Accumulated Deficit - Pre Petition (370,814) (370,814) (370,814)(2)
Accumulated Deficit - Post Petition (60,238) (41,388) (17,896)
------------ ------------ ------------
TOTAL STOCKHOLDERS' EQUITY 240,449 259,299 282,791
Less:
Treasury Stock (6,123) (6,123) (6,123)
------------ ------------ ------------
TOTAL STOCKHOLDERS' EQUITY 234,326 253,176 276,668
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,575,769 $1,595,286 $1,622,875
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES
6 of 17
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS:
1. The audit of the Financial Statements of the Debtors for the year ended
December 31, 1996 has not been completed. Therefore, in addition to the
adjustments reflected in the Financial Statements, the Financial Statements
included in this Monthly Operating Report do not reflect the effect of any
audit adjustments for the year ended December 31, 1996, which adjustments
may have a material effect on the Debtors' results of operations, financial
position and liquidity.
The Debtors believe that there will be audit adjustments to their Accounts
Receivable, Inventory, Fixed Assets and Intangible Assets. There may also
be adjustments to certain other accounts as a result of the audit and the
Debtors' filing for protection under Chapter 11 of the US Bankruptcy Code
on January 30, 1997.
2. On January 30, 1997 (the "Filing Date"), MobileMedia Corporation (the
"Company"), MobileMedia Communications, Inc. ("MobileMedia Communications")
and all seventeen of MobileMedia Communication's subsidiaries filed for
protection under Chapter 11 of title 11 of the United States Code (the
"Bankruptcy Code"). The Debtors are operating as debtors-in-possession
("DIP") and are subject to the jurisdiction of the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court").
The Court has authorized the debtors to pay certain pre-petition creditors.
These permitted pre-petition payments include (i) employee salary and
wages; (ii) certain employee benefits and travel expenses; (iii) certain
amounts owing to essential vendors; (iv) trust fund type sales and use
taxes; (v) trust fund payroll taxes; (vi) customer refunds; and (vii)
customer rewards.
3. Since the Filing Date, the Debtors have continued to manage their business
as debtors-in-possession under sections 1107 and 1108 of the Bankruptcy
Code. During the pendency of the Chapter 11 cases, the Bankruptcy Court
has jurisdiction over the assets and affairs of the Debtors, and their
continued operations are subject to the Bankruptcy Court's protection and
supervision. The Debtors have sought, obtained, and are in the process of
applying for, various orders from the Bankruptcy Court intended to
stabilize their business and minimize any disruption caused by the Chapter
11 cases.
Page 7 of 17
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS (CONTINUED):
4. The Consolidated Statement of Operations includes for the month ending
March 31, 1997: (a) an adjustment of approximately $10.1 million to
decrease Service, Rents and Maintenance revenue for the first quarter of
1997, $6.7 million of which relates to January and February 1997. Such
adjustment reflects the recording of a reserve for potential disparities
between recorded revenues and collections. Accordingly, results for the
month of March 1997 are not indicative of the Debtors' underlying
performance during that month; and (b) an adjustment of approximately $1.0
million to decrease Cost of Products Sold during the first quarter of 1997.
Such adjustment is offset by a reduction in an Inventory reserve
established as of December 31, 1996. See Headnotes 1 and 2 to Consolidated
Balance Sheet.
5. The Consolidated Balance Sheet includes the following adjustments: (a) an
approximate $1.0 million reduction in an Inventory reserve established at
December 31, 1996; (b) adjustments to Inventory and Accumulated Deficit-
Pre-Petition as previously reported at February 28, 1997, consisting of
(i) an adjustment of approximately $3.2 million to decrease Inventory,
reflecting the establishment of a lower of cost or market reserve at
December 31, 1996, and (ii) a corresponding increase in Accumulated
Deficit-Pre-Petition; (c) adjustments to previously reported Property and
Equipment, Net and Accrued Expenses and Other Current Liabilities at
February 28, 1997, consisting of (i) an adjustment of approximately
$3.6 million to decrease Accrued Expenses and Other Current Liabilities,
reflecting a review of accounts payable and the elimination of certain
duplicative entries at December 31, 1996, and (ii) a corresponding
reduction in Property and Equipment, Net; and (d) the February 28,
1997 Balance Sheet has been restated to reflect the reclassification of the
Chase Credit Facility and Deferred Tax Liability. See Headnotes 1 and 2 to
the Consolidated Statement of Operations.
6. During the month of February 1997, the Debtors drew down $45 million of
their DIP facility with The Chase Manhattan Bank, as agent for the lenders
thereunder (the "DIP Lenders"). During the months of March and April 1997,
the Debtors repaid $25 million and $5 million, respectively, of borrowing
under the DIP facility.
7. The Company is the second largest paging company in the U.S., with
approximately 4.2 million units in service at April 30, 1997, and offers
local, regional and national paging services to its subscribers. The
consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. The Company's business is conducted
primarily through the Company's principal operating subsidiary, MobileMedia
Communications, Inc. ("MobileMedia Communications") and its subsidiaries.
The Company markets its services under the "MobileComm" brand name. All
significant intercompany accounts and transactions have been eliminated.
Page 8 of 17
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS (CONTINUED):
8. As previously announced in its September 27, 1996 and October 21, 1996
releases, the Company discovered misrepresentations and other violations
which occurred during the licensing process for as many as 400 to 500, or
approximately 6% to 7%, of its approximately 8,000 local transmission
one-way paging stations. The Company caused an investigation to be
conducted by its outside counsel, and a comprehensive report regarding
these matters was provided to the Federal Communications Commission (the
"FCC") in the fall of 1996. In cooperation with the FCC, outside counsel's
investigation was expanded to examine all of the Company's paging licenses,
and the results of that investigation were submitted to the FCC on November
8, 1996. As part of the cooperative process, the Company also proposed to
the FCC that a Consent Order be entered which would result, among other
things, in the return of certain local paging authorizations then held by
the Company, the dismissal of certain pending applications for paging
authorizations, and the voluntary acceptance of a substantial monetary
forfeiture.
On January 13, 1997, the FCC issued a Public Notice relating to the status
of certain FCC authorizations held by the Company. Pursuant to the Public
Notice, the FCC announced that it had (i) automatically terminated
approximately 185 authorizations for paging facilities that were not
constructed by the expiration date of their construction permits and
remained unconstructed, (ii) dismissed approximately 94 applications for
fill-in sites around existing paging stations (which had been filed under
the so-called "40-mile rule") as defective because they were predicated
upon unconstructed facilities and (iii) automatically terminated
approximately 99 other authorizations for paging facilities that were
constructed after the expiration date of their construction permits. With
respect to the approximately 99 authorizations where the underlying station
was untimely constructed, the FCC granted the Company interim operating
authority subject to further action by the FCC.
On April 8, 1997, the FCC adopted an order commencing an administrative
hearing into the qualification of the Company to remain a licensee. The
order directs an Administrative Law Judge to take evidence and develop a
full factual record on issues concerning the Company's filing of false
forms and applications. The Company may continue to operate their licensed
facilities and provide service to the public during the pendency of the
hearing. The FCC's order initiates a fact-finding and evaluative hearing
process to gather information with which to make a decision, but is not a
final disposition of the Company's the FCC's action. An adverse outcome of
this proceeding could result in the loss of the Company's licenses or
substantial monetary fines, or both. Any such outcome would have a
material adverse effect on the Company's financial condition and results of
operations.
Page 9 of 17
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS (CONTINUED):
On April 23, 1997, the Company filed a motion with the FCC seeking a stay
of the hearing proceeding instituted by the FCC order entered April 7,
1997. The motion discusses the consequences either of a grant or a denial
of the motion to the Company and its debt and equity holders. The Company
filed a Current Report on Form 8-K with the SEC that includes a copy of the
motion. On May 2, 1997 the Administrative Law Judge denied the Company's
motion to stay the hearing. The Company is seeking an appeal of the
Administrative Law Judge's decision.
The Company cannot be certain what monetary forfeitures or other further
actions the FCC may take in regard to this matter or the timing of any such
actions, but such actions could have a material adverse effect upon the
financial condition or operations of the Company.
Page 10 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONSOLIDATED STATEMENT OF CASH
RECEIPTS AND DISBURSEMENTS
FOR THE MONTH ENDED APRIL 30, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- ----------------------------------------------------------------------------
The Debtors have 63 bank accounts. In order to minimize costs to the estate,
the Debtors have included a GAAP Statement of Cash Flows for the reporting
period which is attached. The Statement of Cash Flows replaces the listing of
cash receipts and disbursements, copies of the bank statements, and bank account
reconciliations.
Page 11 of 17
<PAGE>
HEADNOTES:
THE AUDIT OF THE FINANCIAL STATEMENTS OF THE DEBTORS FOR THE YEAR ENDED DECEMBER
31, 1996 HAS NOT BEEN COMPLETED. THEREFORE, THE FINANCIAL STATEMENTS INCLUDED IN
THIS MONTHLY OPERATING REPORT DO NOT REFLECT THE EFFECT OF ANY AUDIT ADJUSTMENTS
FOR THE YEAR ENDED DECEMBER 31, 1996, WHICH ADJUSTMENTS MAY BE MATERIAL.
THE DEBTORS BELIEVE THAT THERE WILL BE AUDIT ADJUSTMENTS TO ITS ACCOUNTS
RECEIVABLE, INVENTORY, FIXED ASSETS AND INTANGIBLE ASSETS. THERE MAY ALSO BE
ADJUSTMENTS TO CERTAIN OTHER ACCOUNTS AS A RESULT OF THE AUDIT AND THE DEBTORS'
FILING FOR PROTECTION UNDER CHAPTER 11 OF THE US BANKRUPTCY CODE ON JANUARY 30,
1997.
THE CONSOLIDATED STATEMENT OF CASH FLOWS SHOULD BE READ IN CONJUNCTION WITH ALL
OF THE FOOTNOTES DISCLOSED ON PAGES 7 THROUGH 9 OF THIS REPORT. RESULTS FOR THE
MONTH OF MARCH 1997 ARE NOT INDICATIVE OF THE DEBTORS' UNDERLYING PERFORMANCE
DURING THAT MONTH.
MOBILEMEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE MONTHS ENDED APRIL 30, 1997, MARCH 31, 1997 AND FEBRUARY 28, 1997
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
APRIL MARCH FEBRUARY
1997 1997 1997
----------- ----------- --------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
NET LOSS ($19,898) ($23,492) ($17,896)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Depreciation And Amortization 20,250 19,017 21,647
Provision For Uncollectible Accounts And Returns 8,046 13,767 4,423
Undistributed Earnings Of Affiliate (28) (64) (18)
Deferred Financings Fees, Net 554 554 (805)
Change In Operating Assets and Liabilities:
Accounts Receivable (3,008) (6,353) (12,654)
Inventory (386) (1,382) 524
Prepaid Expenses And Other Assets (841) (78) 1,170
Accounts Payable, Accrued Expenses and Other 762 20,903 (43,492)
--------- ---------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 5,451 22,872 (47,101)
INVESTING ACTIVITIES
Construction And Capital Expenditures,
Including Net Change In Pager Assets (4,373) (3,972) (3,403)
--------- ---------- ---------
NET CASH USED IN INVESTING ACTIVITIES (4,373) (3,972) (3,403)
FINANCING ACTIVITIES
(Repayments)/Borrowings From DIP Credit Facility (5,000) (25,000) 45,000
--------- ---------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (5,000) (25,000) 45,000
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,920) (6,101) (5,504)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 14,444 20,545 26,048
--------- ---------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $10,523 $14,444 $20,545
--------- ---------- ---------
--------- ---------- ---------
</TABLE>
SEE ACCOMPANYING NOTES
12 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF ACCOUNTS RECEIVABLE AGING AND
AGING OF POSTPETITION ACCOUNTS PAYABLE
FOR THE MONTH ENDED APRIL 30, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE AGING
- ------------------------------------------------------------------------------
$ 30,029,151 0 - 30 days old
------------------------------------------------------------------
25,328,785 31 - 60 days old
------------------------------------------------------------------
15,672,675 61 - 90 days old
------------------------------------------------------------------
62,676,933 91+ days old
------------------------------------------------------------------
133,707,544 TOTAL TRADE ACCOUNTS RECEIVABLE
------------------------------------------------------------------
( 46,774,042) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
------------------------------------------------------------------
86,933,502 TRADE ACCOUNTS RECEIVABLE (NET)
------------------------------------------------------------------
2,770,400 OTHER NON-TRADE RECEIVABLES
------------------------------------------------------------------
$ 89,703,902 ACCOUNTS RECEIVABLE, NET
- ------------------------------------------------------------------------------
AGING OF POSTPETITION ACCOUNTS PAYABLE
- -------------------------------------------------------------------------------
0-30 31-60 61-90 91+
Days Days Days Days Total
- -------------------------------------------------------------------------------
ACCOUNTS PAYABLE $ 4,370,174 811,171 54,969 0 $ 5,236,314
- -------------------------------------------------------------------------------
Page 13 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF OPERATIONS, TAXES,
INSURANCE AND PERSONNEL
FOR THE MONTH ENDED APRIL 30, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
STATUS OF POSTPETITION TAXES
- --------------------------------------------------------------------------------------------------------
BEGINNING AMOUNT ENDING
TAX WITHHELD AMOUNT TAX DELINQUENT
LIABILITY OR ACCRUED PAID LIABILITY TAXES
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FEDERAL
- --------------------------------------------------------------------------------------------------------
WITHHOLDING $ 0 $ 1,122,464 $ 1,122,464 $ 0 $ 0
- --------------------------------------------------------------------------------------------------------
FICA-EMPLOYEE 0 662,031 662,031 0 0
- --------------------------------------------------------------------------------------------------------
FICA-EMPLOYER 194,384 1,303,023 1,454,902 42,505 0
- --------------------------------------------------------------------------------------------------------
UNEMPLOYMENT 11,582 39,832 45,912 5,502 0
- --------------------------------------------------------------------------------------------------------
INCOME 0 0 0 0 0
- --------------------------------------------------------------------------------------------------------
TOTAL FEDERAL TAXES 205,966 3,127,350 3,285,309 48,007 0
- --------------------------------------------------------------------------------------------------------
STATE AND LOCAL
- --------------------------------------------------------------------------------------------------------
WITHHOLDING 0 $ 198,936 $ 198,936 $ 0 0
- --------------------------------------------------------------------------------------------------------
SALES 434,288 1,080,415 545,461 969,242 0
- --------------------------------------------------------------------------------------------------------
UNEMPLOYMENT 73,869 185,407 209,312 49,964 0
- --------------------------------------------------------------------------------------------------------
REAL PROPERTY 710,686 321,369 0 1,032,055 0
- --------------------------------------------------------------------------------------------------------
OTHER 152,212 121,798 247,406 26,604 0
- --------------------------------------------------------------------------------------------------------
TOTAL STATE AND LOCAL 1,371,055 1,907,925 1,201,115 2,077,865 0
- --------------------------------------------------------------------------------------------------------
TOTAL TAXES $ 1,577,021 $ 5,035,275 $ 4,486,424 $ 2,125,872 $ 0
- --------------------------------------------------------------------------------------------------------
</TABLE>
PAGE 14 OF 17
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
PAYMENTS TO INSIDERS AND PROFESSIONALS
FOR THE MONTH ENDED APRIL 30, 1997
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
INSIDERS
- ---------------------------------------------------------------------------------------------------
Payee Name Position Salary/Auto Reimbursable
Allowance Expenses Total
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Boykin, Roberta Assistant Corporate Counsel $ 8,462 $ 0 $ 8,462
- ---------------------------------------------------------------------------------------------------
Burdette, H. Stephen Senior VP Corporate Development 13,923 3,224 17,147
And Acting Senior VP Operations
- ---------------------------------------------------------------------------------------------------
Cross, Andrew Executive VP Sales And Marketing 17,000 4,455 21,455
- ---------------------------------------------------------------------------------------------------
Grawert, Ron Chief Executive Officer 30,769 14,430 45,199
- ---------------------------------------------------------------------------------------------------
Gray, Patricia Acting Corporate Counsel 13,085 0 13,085
- ---------------------------------------------------------------------------------------------------
Gross, Steven Senior VP Strategic Planning 13,692 7,570 21,262
- ---------------------------------------------------------------------------------------------------
Hilson, Debra Paralegal 3,546 3,578 7,124
- ---------------------------------------------------------------------------------------------------
Hughes, Curtis Assistant VP Of Mgmt. Information 8,038 2,762 10,800
Systems
- ---------------------------------------------------------------------------------------------------
Pascucci, James Assistant Treasurer 7,315 2,953 10,268
- ---------------------------------------------------------------------------------------------------
Pittsman, Santo Senior VP And Chief Financial 15,846 0 15,846
Officer
- ---------------------------------------------------------------------------------------------------
Shea, Kevin Treasurer 10,778 0 10,778
- ---------------------------------------------------------------------------------------------------
Witsaman, Mark Senior VP And Chief Technology 13,923 1,425 15,348
Officer
- ---------------------------------------------------------------------------------------------------
TOTAL PAYMENTS TO INSIDERS $ 196,774
- ---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PROFESSIONALS
- -------------------------------------------------------------------------------------------------------------------
Date of
Court Invoices Invoices Balance
Name and Relationship Approval Received Paid Due
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Ernst & Young - Financial 1/30/97 $ 0 $ 0 $ 0
Consultants to Debtor
- -------------------------------------------------------------------------------------------------------------------
3. Latham & Watkins - Counsel to Debtor 1/30/97 110,372 0 110,372
- -------------------------------------------------------------------------------------------------------------------
4. Alvarez & Marsal Inc.- Restructuring Consultant to 1/30/97 246,403 0 246,403
Debtor
- -------------------------------------------------------------------------------------------------------------------
5. Sidley & Austin - Counsel to Debtor 1/30/97 173,386 0 173,386
- -------------------------------------------------------------------------------------------------------------------
Total Payments to Professionals $ 530,161 $ 0 $ 530,161
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
PAGE 15 OF 17
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
ADEQUATE PROTECTION PAYMENTS
FOR THE MONTH ENDED APRIL 30, 1997
- --------------------------------------------------------------------------------------------
SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID
NAME OF CREDITOR DUE MONTH POSTPETITION
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Chase Manhattan Bank - (Interest) $ 4,374,544 $ 4,374,544* $ 0
- --------------------------------------------------------------------------------------------
</TABLE>
* Payment made on 5/1/97.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------- -------- ---------
QUESTIONNAIRE
FOR THE MONTH ENDED APRIL 30, 1997 YES NO
- ------------------------------------------------------------------------------------------------------------- -------- ---------
<S> <C> <C>
1. Have any assets been sold or transferred outside the normal course of business this reporting period? NO
- ------------------------------------------------------------------------------------------------------------- --------- --------
2. Have any funds been disbursed from any account other than a debtor in possession account? NO
- ------------------------------------------------------------------------------------------------------------- --------- --------
3. Are any postpetition receivables (accounts, notes, or loans) due from related parties? NO
- ------------------------------------------------------------------------------------------------------------- --------- --------
4. Have any payments been made of prepetition liabilities this reporting period? YES
- ------------------------------------------------------------------------------------------------------------- --------- --------
5. Have any postpetition loans been received by the debtor from any party? YES
- ------------------------------------------------------------------------------------------------------------- --------- --------
6. Are any postpetition payroll taxes past due? NO
- ------------------------------------------------------------------------------------------------------------- --------- --------
7. Are any postpetition state or federal income taxes past due? NO
- ------------------------------------------------------------------------------------------------------------- --------- --------
8. Are any postpetition real estate taxes past due? NO
- ------------------------------------------------------------------------------------------------------------- --------- --------
9. Are any postpetition taxes past due? NO
- ------------------------------------------------------------------------------------------------------------- --------- --------
10. Are any amounts owed to postpetition creditors past due? NO
- ------------------------------------------------------------------------------------------------------------- --------- --------
11. Have any prepetition taxes been paid during the reporting period? YES
- ------------------------------------------------------------------------------------------------------------- --------- --------
12. Are any wage payments past due? NO
- ------------------------------------------------------------------------------------------------------------- --------- --------
</TABLE>
If the answer to any of the above questions is "YES", provide a detailed
explanation of each item.
Item 4 & 11. The Court has authorized the debtors to pay certain pre-petition
creditors. These permitted prepetition payments include (i)
employee salary and wages; (ii) certain employee benefits and
travel expenses; (iii) certain amounts owing to essential
vendors; (iv) trust fund type sales and use taxes; (v) trust fund
payroll taxes; (vi) customer refunds; and (vii) customer rewards.
Item 5. During the month of February 1997, the Debtors drew down $45
million of their DIP facility with The Chase Manhattan Bank, as
agent for the lenders thereunder. During the months of March and
April 1997, the Debtors repaid $25 million and $5 million,
respectively, of borrowing under the DIP facility.
Page 16 of 17
<PAGE>
- ---------------------------------------------------------------------------
INSURANCE
FOR THE MONTH ENDED APRIL 30, 1997
- ---------------------------------------------------------------------------
THERE WERE NO CHANGES IN INSURANCE COVERAGE FOR THE REPORTING PERIOD.
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
PERSONNEL
FOR THE MONTH ENDED APRIL 30, 1997
- -------------------------------------------------------------------------------------------------
Full Time Part Time
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Total number of employees at beginning of period 3,317 190
- -------------------------------------------------------------------------------------------------
2. Number of employees hired during the period 75 10
- -------------------------------------------------------------------------------------------------
3. Number of employees terminated or resigned during the period (31) (35)
- -------------------------------------------------------------------------------------------------
4. Total number of employees on payroll at end of period 3,361 165
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 17 of 17
<PAGE>
Press Release
FOR IMMEDIATE RELEASE
For: MobileMedia Corporation
Media Contact: Krista Grossman - 714/708-9302
[Logo] MobileMedia
MOBILEMEDIA TO DELIST COMMON STOCK FROM NASDAQ
LAST TRADING DAY JUNE 3, 1997
- -------------------------------------------------------------------------------
RIDGEFIELD PARK, NEW JERSEY, JUNE 3, 1997 -- MOBILEMEDIA CORPORATION (NASDAQ:
MBLQE) announced today that it has determined to delist its Class A common
stock, par value $.001 per share (the "Common Stock"), which is currently
traded on the Nasdaq National Market. The last trading day for the Common
Stock on the Nasdaq National Market wil be June 3, 1997. The Company has
concurrently filed a Current Report on Form 8-K containing this press release
and certain other information.
In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS 121"),
which is effective for financial statements for fiscal years beginning after
December 15, 1995. Under certain circumstances, SFAS 121 requires companies to
write down the carrying value of long-lived assets recorded in their financial
statements to the fair value of such assets. A significant amount of the assets
of the Company, which were acquired in acquisitions of businesses, including the
DialPage and MobileComm acquisitions, were recorded on the Company's financial
statements in accordance with principles of purchase accounting at the
acquisition prices and constitute long-lived assets. The Company has
determined, and its independent auditors have concurred, that SFAS 121 is
applicable to the Company, and therefore the Company may be required to write
down the carrying value of its long-lived assets to their fair value. The
Company believes that the amount of the write-down could be material; however,
it is not possible at this time to determine its amount. Since the Company
cannot comply with SFAS 121 at this time, it is unable to issue audited
financial statements in compliance with generally accepted accounting
principles. Consequently, the Company will not file its Report on Form 10-K or
its other periodic reports under the Securities Exchange Act of 1934, as
amended. Accordingly, the Company is unable to comply with the continued
listing requirements of the Nasdaq National Market and has requested that its
Common Stock be delisted.
MobileMedia is the second largest provider of paging and personal
communications services in the United States, offering local, regional and
nationwide coverage to approximately 4.4 million subscribers in all 50 states,
Canada and the Caribbean. The Company operates two one-way nationwide networks
and is licensed to operate two nationwide narrowband PCS networks.
# # #
