<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): July 31, 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 July 31, 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 June 30, 1997, which is attached hereto as
Exhibit 99.1.
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: August 5, 1997 By: /s/ David R. Gibson
---------------------
David R. Gibson
Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Page
- ------- ----
Exhibit 99.1 -- Monthly Operating Report
<PAGE>
EXHIBIT 99.1
OFFICE OF THE U.S. TRUSTEE - REGION 3
MONTHLY OPERATING REPORT
FOR THE MONTH ENDED JUNE 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/ David R. Gibson SENIOR VICE PRESIDENT/CHIEF FINANCIAL OFFICER
- ------------------------------ ---------------------------------------------
SIGNATURE OF RESPONSIBLE PARTY TITLE
DAVID R. GIBSON JULY 29, 1997
- ------------------------------- --------------------------------------------
PRINTED NAME OF RESPONSIBLE PARTY DATE
Page 1 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
ATTACHMENT
FOR THE MONTH ENDED JUNE 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 basis 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 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE MONTH ENDED JUNE 30, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- -------------------------------------------------------------------------------
See Statement of Operations for reporting period attached.
Page 3 of 18
<PAGE>
HEADNOTES:
SUBSEQUENT TO THE ISSUANACE OF THE MAY 31, 1997 MONTHLY OPERATING REPORT, THE
COMPANY COMPLETED THE CLOSING OF ITS UNAUDITED FINANCIAL STATEMENTS FOR THE
YEAR ENDED DECEMBER 31, 1996; EXCEPT FOR THE APPLICATION OF 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").
THE FOLLOWING FINANCIAL STATEMENTS HAVE NOT BEEN PREPARED IN ACCORDANCE WITH
GAAP BECAUSE SFAS 121 HAS NOT BEEN APPLIED. UPON THE APPLICATION OF SFAS
121, THE COMPANY EXPECTS TO BE REQUIRED TO WRITE DOWN THE CARRYING VALUE OF
ITS LONG-LIVED ASSETS TO THEIR FAIR VALUE. THE COMPANY BELIEVES THE AMOUNT OF
THE WRITE-DOWN WOULD BE MATERIAL; HOWEVER, IT IS NOT POSSIBLE AT THIS TIME TO
DETERMINE SUCH AMOUNT. THERE MAY ALSO BE ADJUSTMENTS TO CERTAIN OTHER ACCOUNTS
AS A RESULT OF THE DEBTORS' FILING FOR PROTECTION UNDER CHAPTER 11 OF THE US
BANKRUPTCY CODE ON JANUARY 30,1997.
(1) THE COMPANY HAS REDUCED PAGING REVENUES TO REFLECT THE RECORDING OF AN
ALLOWANCE FOR ESTIMATED DISPARITIES BETWEEN SYSTEM RECORDED REVENUES AND CASH
COLLECTIONS IN THE AMOUNTS OF $2.0, $2.0 AND $4.0 MILLION IN THE MONTHS OF
JUNE, MAY AND APRIL, RESPECTIVELY.
(2) REFLECTS AN APPROXIMATELY $2.5 MILLION ADJUSTMENT TO REDUCE PREVIOUSLY
REPORTED DEPRECIATION EXPENSE AS A RESULT OF THE CLOSING OF THE UNAUDITED
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1996.
<TABLE>
<CAPTION>
MOBILEMEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE MONTHS ENDED JUNE 30, 1997, MAY 31, 1997 AND APRIL 30, 1997
( UNAUDITED )
( IN THOUSANDS )
June May April
1997 1997 1997
------------- ------------- --------------
<S> <C> <C> <C>
PAGING REVENUES
SERVICE, RENTS & MAINTENANCE (1) $40,987 $43,599 $42,597
EQUIPMENT SALES
PRODUCT SALES 2,650 2,039 2,930
COST OF PRODUCTS SOLD 2,634 2,011 2,515
---------- ---------- ----------
EQUIPMENT MARGIN 16 28 415
NET REVENUE 41,003 43,627 43,011
OPERATING EXPENSE
SERVICE, RENTS & MAINTENANCE 12,413 14,154 12,284
SELLING 5,537 6,110 5,971
GENERAL ADMINISTRATION 15,213 15,518 17,458
---------- ---------- ----------
OPERATING EXPENSE BEFORE DEPR. & AMORT. 33,163 35,781 35,713
EBITDA BEFORE REORGANIZATION COSTS 7,840 7,845 7,298
REORGANIZATION COSTS 2,281 1,473 1,891
---------- ---------- ----------
EBITDA AFTER REORGANIZATION COSTS 5,559 6,372 5,408
DEPRECIATION 9,292 8,705 8,498 (2)
AMORTIZATION 9,232 9,232 9,232
---------- ---------- ----------
TOTAL DEPRECIATION AND AMORTIZATION 18,523 17,938 17,731
OPERATING LOSS (12,964) (11,566) (12,323)
INTEREST EXPENSE 4,957 5,277 5,056
OTHER EXPENSE 0 0 0
---------- ---------- ----------
LOSS BEFORE INCOME TAX BENEFIT (17,921) (16,843) (17,378)
INCOME TAX BENEFIT 0 0 0
---------- ---------- ----------
NET LOSS ($17,921) ($16,843) ($17,378)
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
SEE ACCOMPANYING NOTES.
4 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED BALANCE SHEET
FOR THE MONTH ENDED JUNE 30, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- -------------------------------------------------------------------------------
See balance sheet attached.
Page 5 of 18
<PAGE>
HEADNOTES:
SUBSEQUENT TO THE ISSUANCE OF THE MAY 31, 1997 MONTHLY OPERATING REPORT, THE
COMPANY COMPLETED THE CLOSING OF ITS UNAUDITED FINANCIAL STATEMENTS FOR THE
YEAR ENDED DECEMBER 31, 1996; EXCEPT FOR THE APPLICATION OF 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").
THE FOLLOWING FINANCIAL STATEMENTS HAVE NOT BEEN PREPARED IN ACCORDANCE WITH
GAAP BECAUSE SFAS 121 HAS NOT BEEN APPLIED. UPON THE APPLICATION OF SFAS
121, THE COMPANY EXPECTS TO BE REQUIRED TO WRITE DOWN THE CARRYING VALUE OF
ITS LONG-LIVED ASSETS TO THEIR FAIR VALUE. THE COMPANY BELIEVES THE AMOUNT
OF THE WRITE-DOWN WOULD BE MATERIAL; HOWEVER, IT IS NOT POSSIBLE AT THIS TIME
TO DETERMINE SUCH AMOUNT. THERE MAY ALSO BE ADJUSTMENTS TO CERTAIN OTHER
ACCOUNTS AS A RESULT OF THE DEBTOR'S FILING FOR PROTECTION UNDER CHAPTER 11
OF THE US BANKRUPTCY CODE ON JANUARY 30, 1997
(1) REFLECT CERTAIN ADJUSTMENTS TO PREVIOUSLY REPORTED BALANCE SHEET
ACCOUNTS AS A RESULT OF THE CLOSING OF THE UNAUDITED FINANCIAL STATEMENTS FOR
THE YEAR ENDED DECEMBER 31, 1996.
<TABLE>
<CAPTION>
MOBILEMEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1997, MAY 31, 1997 AND APRIL 30, 1997
(UNAUDITED)
(IN THOUSANDS)
June 30 May 31 April 30
1997 1997 (1) 1997 (1)
----------- ----------- --------------
<S> <C> <C> <C>
ASSETS:
CURRENT ASSETS:
Cash $4,059 $3,425 $8,799
Accounts Receivable, Net 60,834 60,186 60,871
Inventory 6,576 9,090 10,535
Prepaid Expenses 1,130 1,108 1,287
Other Current Assets 2,755 2,616 2,795
---------- ---------- ----------
Total Current Assets 75,353 76,425 84,287
NONCURRENT ASSETS:
Property and Equipment, Net 296,429 298,041 303,966
Deferred Financing Fees, Net 26,261 26,815 27,369
Investment In Net Assets Of Equity Affiliate 2,001 1,978 1,950
Intangible Assets, Net 1,063,963 1,072,966 1,082,264
Other Assets 919 933 878
---------- ---------- ----------
Total Noncurrent Assets 1,389,574 1,400,732 1,416,428
TOTAL ASSETS $1,464,927 $1,477,158 $1,500,715
---------- ---------- ----------
---------- ---------- ----------
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES NOT SUBJECT TO COMPROMISE:
<S> <C> <C> <C>
DIP Credit Facility $15,000 $15,000 $15,000
Accrued Reorganization Costs 5,871 4,162 3,410
Accrued Wages, Benefits and Payroll Taxes 6,313 5,380 7,022
Accounts Payable - Post Petition 9,266 8,173 5,236
Accrued Interest (Chase & DIP Facilities ) 4,465 4,464 4,249
Accrued Expenses and Other Current Liabilities 35,063 34,282 38,639
Advance Billings and Customer Deposits 37,331 36,514 39,063
---------- ---------- ----------
Total Liabilities Not Subject To Compromise 113,309 107,975 112,620
LIABILITIES SUBJECT TO COMPROMISE:
Accrued Wages, Benefits and Payroll Taxes 6,420 6,953 9,744
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 20,761 20,761 20,759
Accounts Payable- Pre Petition 16,062 13,956 12,974
Accrued Expenses and Other Current Liabilities - Pre Petition 18,955 20,128 20,348
Other Liabilities 5,056 5,099 5,142
---------- ---------- ----------
Total Liabilities Subject To Compromise 1,142,936 1,142,579 1,144,648
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 (437,127) (437,127) (437,127)
Accumulated Deficit - Post Petition (91,665) (73,744) (56,901)
---------- ---------- ----------
Total Stockholders' Equity 142,709 160,630 177,473
Less:
Treasury Stock (6,123) (6,123) (6,123)
---------- ---------- ----------
Total Stockholders' Equity 136,586 154,507 171,350
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,464,927 $1,477,158 $1,500,715
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
See Accompanying Notes
6 of 18
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS:
1. Subsequent to the issuance of the May 31, 1997 Monthly Operating Report,
the Company completed the closing of its unaudited financial statements for
the year ended December 31, 1996; except for the application of 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"). The financial statements herein have not been prepared in accordance
with GAAP because SFAS 121 has not been applied. The closing of the
unaudited December 31, 1996 financial statements led to adjustments to
previously reported May and April amounts in the Consolidated Statements of
Operations (depreciation expense), Balance Sheets and Cash Flows as
described in the Headnotes. There may also be adjustments to certain other
accounts as a result of the Debtor's filing for protection under Chapter 11
of the US Bankruptcy Code on January 30, 1997.
In March 1995, the Financial Accounting Standards Board issued 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
the financial statements to the fair value of such assets. A significant
amount of the assets of the Company, which were acquired as a result of the
acquisitions of businesses, including the Dial Page and MobileComm
acquisitions, were recorded in accordance with principles of purchase
accounting at 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 expects to
be required to write down the carrying value of its long-lived assets to
their fair value. The Company believes the amount of the write down will be
material: however, it is not possible at this time to determine such
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.
Page 7 of 18
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS (CONTINUED):
2. On January 30, 1997 (the "Filing Date"), MobileMedia Corporation (the
"Company"), MobileMedia Communications, Inc. ("MobileMedia Communications")
and all seventeen of MobileMedia Communications' 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 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 and reorganize their business and minimize any disruption caused
by the Chapter 11 cases.
4. The company has reduced Paging Revenues to reflect the recording of an
allowance for estimated disparities between system recorded revenues and
cash collections in the amounts of $2.0, $2.0 and $4.0 million for the
months of June, May and April, respectively.
5. During the month of February 1997, the Debtors drew down $45 million of
borrowings under the debtor-in-possession financing facility (the "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 borrowings
under the DIP facility.
6. The Company is the second largest paging company in the U.S., with
approximately 4.0 million units in service at June 30, 1997, and offers
local, regional and national paging services to its subscribers. The
Company is reviewing its units in service to determine the number of units
for which payment is delinquent, which require removal from its billing
system. 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, and its subsidiaries. The Company markets its
services primarily under the "MobileComm" brand name. All significant
intercompany accounts and transactions have been eliminated.
Page 8 of 18
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS (CONTINUED):
7. 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 directed an Administrative Law Judge to take evidence and develop a
full factual record on directed issues concerning the Company's filing of
false forms and applications. The Company was permitted to operate its
licensed facilities and provide service to the public during the pendency
of the hearing. The FCC's order initiated a fact-finding and evaluative
hearing process to gather information with which to make a decision, but
would not be a final disposition of the FCC's action. On April 23, 1997,
the Company filed a motion with the FCC seeking a stay of the hearing
proceeding instituted by the FCC order adopted April 8, 1997. On May 2,
1997 the Administrative Law Judge denied the Company's motion to stay the
hearing from which decision the company sought an appeal.
Page 9 of 18
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS (CONTINUED):
On June 6, 1997, the FCC issued an order staying the hearing proceeding for
ten months in order to allow the Company to develop and consummate a plan
of reorganization that provides for a change of control of the Company and
a permissable transfer of the Company's FCC licenses. The order, which is
based on an FCC doctrine known as SECOND THURSDAY, provides that if there
is a change of control that meets the conditions of SECOND THURSDAY, the
Company's FCC issues will be resolved by the transfer of the Company's FCC
licenses to the new owners of the company and the hearing will not proceed.
The Company believes that a reorganization plan that provides for either a
conversion of certain existing debt to equity, in which case existing
MobileMedia shares will be substantially diluted or eliminated, or a sale
of the Company will result in a change of control. There can be no
assurance that the Company will be successful in consummating a plan of
reorganization meeting the requirements of the order. In the event that the
Company were unable to do so, the Company would be required to proceed with
the hearing, which, if adversely determined, could result in the loss of
the Company's licenses or substantial monetary fines, or both. Such an
outcome would have a material adverse effect on the Company's financial
condition and results of operations.
Page 10 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONSOLIDATED STATEMENT OF CASH
RECEIPTS AND DISBURSEMENTS
FOR THE MONTH ENDED JUNE 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 basis 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 18
<PAGE>
HEADNOTES:
SUBSEQUENT TO THE ISSUANCE OF THE MAY 31, 1997 MONTHLY OPERATING REPORT, THE
COMPANY COMPLETED THE CLOSING OF ITS UNAUDITED FINANCIAL STATEMENTS FOR THE
YEAR ENDED DECEMBER 31, 1996; EXCEPT FOR THE APPLICATION OF 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"). THE FOLLOWING FINANCIAL STATEMENTS HAVE NOT BEEN PREPARED IN
ACCORDANCE WITH GAAP BECAUSE SFAS 121 HAS NOT BEEN APPLIED. UPON THE
APPLICATION OF SFAS 121, THE COMPANY EXPECTS TO BE REQUIRED TO WRITE DOWN THE
CARRYING VALUE OF ITS LONG-LIVED ASSETS TO THEIR FAIR VALUE. THE COMPANY
BELIEVES THE AMOUNT OF THE WRITE-DOWN WOULD BE MATERIAL; HOWEVER, IT IS NOT
POSSIBLE AT THIS TIME TO DETERMINE SUCH AMOUNT. THERE MAY ALSO BE ADJUSTMENTS
TO CERTAIN OTHER ACCOUNTS AS A RESULT OF THE DEBTORS' FILING FOR PROTECTION
UNDER CHAPTER 11 OF THE US BANKRUPTCY CODE ON JANUARY 30, 1997.
(1) REFLECT CERTAIN ADJUSTMENTS TO PREVIOUSLY REPORTED CASH FLOW ITEMS AS A
RESULT OF THE CLOSING OF THE UNAUDITED FINANCIAL STATEMENTS FOR THE YEAR
ENDED DECEMBER 31, 1996.
<TABLE>
<CAPTION>
MOBILEMEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE MONTHS ENDED JUNE 30, 1997, MAY 31, 1997 AND APRIL 30, 1997
(UNAUDITED)
(IN THOUSANDS)
JUNE MAY APRIL
1997 1997 (1) 1997 (1)
---------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
NET LOSS ($17,921) ($16,843) ($17,378)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Depreciation And Amortization 18,523 17,938 17,731
Provision For Uncollectible Accounts And Returns 3,323 5,527 8,046
Undistributed Earnings Of Affiliate (23) (28) (28)
Deferred Financings Fees, Net 554 554 554
Change In Operating Assets and Liabilities:
Accounts Receivable (3,971) (4,842) (3,008)
Inventory 2,515 1,445 (386)
Prepaid Expenses And Other Assets (377) 370 (840)
Accounts Payable, Accrued Expenses and Other 5,691 (6,714) 762
---------- ---------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 8,314 (2,593) 5,453
INVESTING ACTIVITIES
Construction And Capital Expenditures,
Including Net Change In Pager Assets (7,680) (2,780) (4,373)
---------- ---------- ---------
NET CASH USED IN INVESTING ACTIVITIES (7,680) (2,780) (4,373)
FINANCING ACTIVITIES
Repayments of DIP Credit Facility 0 0 (5,000)
---------- ---------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 0 0 (5,000)
NET DECREASE IN CASH AND CASH EQUIVALENTS 634 (5,374) (3,920)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,425 8,799 12,719
---------- ---------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $4,059 $3,425 $8,799
---------- ---------- ---------
---------- ---------- ---------
</TABLE>
SEE ACCOMPANYING NOTES
12 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF ACCOUNTS RECEIVABLE AGING
AND AGING OF POSTPETITION ACCOUNTS PAYABLE
FOR THE MONTH ENDED JUNE 30, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- -----------------------------------------------------------------------------
- ------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE AGING
- --------------------------------------------------------------------------------
- -------------- --------------------- -------------------------------------------
$ 31,402,657 0 - 30 days old
--------------------- -------------------------------------------
--------------------- -------------------------------------------
23,570,228 31 - 60 days old
--------------------- -------------------------------------------
--------------------- -------------------------------------------
16,151,200 61 - 90 days old
--------------------- -------------------------------------------
--------------------- -------------------------------------------
69,027,140 91+ days old
--------------------- -------------------------------------------
--------------------- -------------------------------------------
140,151,225 TOTAL TRADE ACCOUNTS RECEIVABLE
--------------------- -------------------------------------------
--------------------- -------------------------------------------
( 81,575,858) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
--------------------- -------------------------------------------
--------------------- -------------------------------------------
58,575,367 TRADE ACCOUNTS RECEIVABLE (NET)
--------------------- -------------------------------------------
--------------------- -------------------------------------------
2,258,362 OTHER NON-TRADE RECEIVABLES
--------------------- -------------------------------------------
--------------------- -------------------------------------------
$ 60,833,729 ACCOUNTS RECEIVABLE, NET
- -------------- --------------------- -------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
AGING OF POSTPETITION ACCOUNTS PAYABLE
- ------------------------------------------------------------------------- ------------ ------------ -----------------
- ---------------------------------------- ---------------- --------------- ------------ ------------ -----------------
0-30 31-60 61-90 91+
Days Days Days Days Total
- ---------------------------------------- ---------------- --------------- ------------ ------------ -----------------
<S> <C> <C> <C> <C> <C>
ACCOUNTS PAYABLE $ 6,664,166 2,183,610 269,251 148,887 $ 9,265,914
- ---------------------------------------- ---------------- --------------- ------------ ------------ -----------------
</TABLE>
Page 13 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF OPERATIONS, TAXES,
INSURANCE AND PERSONNEL
FOR THE MONTH ENDED JUNE 30, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
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<TABLE>
<CAPTION>
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STATUS OF POSTPETITION TAXES
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- -------------------------------------- --------------- -------------- --------------- --------------- ---------------
BEGINNING AMOUNT ENDING
TAX WITHHELD AMOUNT TAX DELINQUENT
LIABILITY OR ACCRUED PAID LIABILITY TAXES
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FEDERAL
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<S> <C> <C> <C> <C> <C>
WITHHOLDING $ 0 $ 2,553,572 $ 2,553,572 $ 0 $ 0
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FICA-EMPLOYEE 0 1,960,284 1,960,284 0 0
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FICA-EMPLOYER 0 1,583,214 1,549,442 33,772 0
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UNEMPLOYMENT 0 18,791 18,330 461 0
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INCOME 0 0 0 0 0
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TOTAL FEDERAL TAXES 0 6,115,862 6,081,628 34,233 0
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STATE AND LOCAL
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WITHHOLDING 0 387,490 387,490 0 0
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SALES 570,264 3,782,791 3,742,864 610,191 0
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UNEMPLOYMENT 0 92,902 90,356 2,546 0
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REAL PROPERTY 1,353,414 317,058 0 1,670,473 0
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OTHER 62,168 402,943 256,825 208,286 0
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TOTAL STATE AND LOCAL 1,985,846 4,983,184 4,477,535 2,491,496 0
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TOTAL TAXES $ 1,985,846 $ 11,099,046 $ 10,559,163 $ 2,525,729 $ 0
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</TABLE>
Page 14 of 18
<PAGE>
<TABLE>
<CAPTION>
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PAYMENTS TO INSIDERS AND PROFESSIONALS
FOR THE MONTH ENDED JUNE 30, 1997
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INSIDERS
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Payee Name Position Salary/Bonus/ Reimbursable
Auto Allowance Expenses Total
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<S> <C> <C> <C> <C>
Alvarez & Marsal Inc. - Chairman - Restructuring $ 224,293 $ 7,626 $ 231,918
Joseph A. Bondi
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Boykin, Roberta Assistant Corporate Counsel 8,462 0 8,462
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Burdette, H. Stephen Senior VP Corporate 13,923 298 14,221
Development and Acting
Senior VP Operations
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Cross, Andrew Executive VP Sales and 79,000 1,201 80,201
Marketing
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Grawert, Ron Chief Executive Officer 30,769 5,271 36,040
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Gray, Patricia Secretary/Acting General 19,460 0 19,460
Counsel
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Gross, Steven Senior VP Strategic Planning 13,923 4,856 18,779
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Hilson, Debra Assistant Secretary 4,615 3,046 7,661
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Hughes, Curtis Assistant VP Mgmt. 8,320 1,177 9,497
Information Systems
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Pascucci, James Assistant Treasurer 7,662 2,362 10,024
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Pittsman, Santo Senior VP of Administration 15,846 6,614 22,460
and Business Planning
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Shea, Kevin Treasurer 10,778 0 10,778
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Witsaman, Mark Senior VP and Chief 13,923 597 14,520
Technology Officer
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TOTAL PAYMENTS TO INSIDERS $ 484,023
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</TABLE>
Page 15 of 18
<PAGE>
<TABLE>
<CAPTION>
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PAYMENTS TO INSIDERS AND PROFESSIONALS (CONTINUED)
FOR THE MONTH ENDED JUNE 30, 1997
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PROFESSIONALS
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Holdback
Date of and
Name and Relationship Court Invoices Invoices Invoice
Approval Received (1) Paid Balances
Due
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<S> <C> <C> <C> <C>
1. Ernst & Young - Auditor, Tax and Financial 1/30/97 $ 0 $ 0 $ 226,113
Consultants to Debtor
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2. Latham & Watkins - Counsel to Debtor 1/30/97 432,429 192,556 292,027
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3. Alvarez & Marsal Inc.- Restructuring 1/30/97 215,426 199,019 317,750
Consultant to Debtor (2)
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4. Sidley & Austin - Bankruptcy Counsel to 1/30/97 199,388 215,482 320,101
Debtor
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5. Young, Conway, Stargate & Taylor - Delaware 1/30/97 48,318 20,424 51,285
Counsel to Debtor
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6. Wiley, Rein & Fielding - FCC Counsel to 1/30/97 238,877 146,858 279,028
Debtor
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7. Koteen & Naftalin - FCC Counsel to Debtor 6/11/97 49,096 0 49,096
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8. Houlihan, Lokey, Howard & Zukin - Advisors 6/04/97 314,398 0 314,398
to the Creditors' Committee
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9. Jones, Day, Reavis & Pogue - Counsel to the 4/03/97 46,357 17,833 53,625
Creditors' Committee
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10. Morris, Nichols, Arsht & Tunnell - Delaware 4/03/97 10,133 0 10,133
Counsel to the Creditors' Committee
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11. Paul, Weiss, Rifkind, Wharton & Garrison - 4/25/97 47,127 37,804 9,322
FCC Counsel to the Creditors' Committee
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TOTAL PAYMENTS TO PROFESSIONALS $1,601,549 $829,976 $1,922,879
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</TABLE>
(1) Excludes invoices for fees and expenses through June 30, 1997 that were
received by the Debtors subsequent to June 30, 1997.
(2) Includes fees and expenses for David R. Gibson, Senior Vice President and
Chief Financial Officer (effective June 24, 1997).
Page 16 of 18
<PAGE>
<TABLE>
<CAPTION>
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ADEQUATE PROTECTION PAYMENTS
FOR THE MONTH ENDED JUNE 30, 1997
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SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID
NAME OF CREDITOR DUE MONTH POSTPETITION
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<S> <C> <C> <C>
The Chase Manhattan Bank - (Interest) $ 4,571,234 $ 4,571,234* $ 0
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</TABLE>
* Payment made on 7/1/97.
<TABLE>
<CAPTION>
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QUESTIONNAIRE
FOR THE MONTH ENDED JUNE 30, 1997 YES NO
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<S> <C> <C>
1. Have any assets been sold or transferred outside the normal course of business this NO
reporting period?
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2. Have any funds been disbursed from any account other than a debtor in possession account? NO
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3. Are any postpetition receivables (accounts, notes, or loans) due from related parties? NO
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4. Have any payments been made of prepetition liabilities this reporting period? YES
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5. Have any postpetition loans been received by the debtor from any party? YES
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6. Are any postpetition payroll taxes past due? NO
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7. Are any postpetition state or federal income taxes past due? NO
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8. Are any postpetition real estate taxes past due? NO
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9. Are any postpetition taxes past due? NO
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10. Are any amounts owed to postpetition creditors past due? NO
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11. Have any prepetition taxes been paid during the reporting period? YES
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12. Are any wage payments past due? NO
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</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 borrowings under the 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 borrowings under
the DIP facility.
Page 17 of 18
<PAGE>
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INSURANCE
FOR THE MONTH ENDED JUNE 30, 1997
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THERE WERE NO CHANGES IN INSURANCE COVERAGE FOR THE REPORTING PERIOD.
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<TABLE>
<CAPTION>
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PERSONNEL
FOR THE MONTH ENDED JUNE 30, 1997
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Full Time Part Time
- ------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
1. Total number of employees at beginning of period 3,375 155
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2. Number of employees hired during the period 124 17
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3. Number of employees terminated or resigned during the period (42) (37)
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4. Total number of employees on payroll at end of period 3,457 135
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</TABLE>
Page 18 of 18
