<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): April 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
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable.
Item 5. Other Events.
On April 30, 1997, MobileMedia Corporation and
substantially all of its subsidiaries filed with
the United States Bankruptcy Court for the District
of Delaware their monthly operating report for the
month ended March 31, 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: May 1, 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.
<PAGE>
EXHIBIT 99.1
OFFICE OF THE U.S. TRUSTEE - REGION 3
MONTHLY OPERATING REPORT
FOR THE MONTH ENDED MARCH 31, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- ------------------------------------------------------------------------------
DOCUMENT PREVIOUSLY EXPLANATION
REQUIRED ATTACHMENTS: ATTACHED SUBMITTED ATTACHED
1. Tax Receipts ( ) (X) (X)
2. Bank Statements ( ) ( ) (X)
3. Most recently filed Income ( ) (X) ( )
Tax Return
4. Most recent Annual Financial ( ) (X) ( )
Statements prepared by accountant
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 APRIL 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 MARCH 31, 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 69 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 MARCH 31, 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. THE DEBTORS DO NOT EXPECT TO FILE
THEIR REPORTS ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996 WITH THE SEC
UNTIL MAY 31, 1997.
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 MAY 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) 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.
MOBILEMEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE MONTHS ENDED MARCH 31, 1997 AND FEBRUARY 28, 1997
(UNAUDITED)
(IN THOUSANDS)
MARCH FEBRUARY
1997 1997
------------- ----------
PAGING REVENUES
SERVICE, RENTS & MAINTENANCE $36,633(1) $46,472
EQUIPMENT SALES
PRODUCT SALES 3,853 2,971
COST OF PRODUCTS SOLD 2,808(2) 3,000
----------- ----------
EQUIPMENT MARGIN 1,045 (29)
NET REVENUE $37,678 $46,443
OPERATING EXPENSE
SERVICE, RENTS & MAINTENANCE 11,307 11,587
SELLING 7,015 5,979
GENERAL ADMINISTRATION 16,795 17,505
----------- ----------
OPERATING EXPENSE BEFORE DEPR. & AMORT. $35,117 $35,071
EBITDA BEFORE RESTRUCTURING COSTS $2,561 $11,372
RESTRUCTURING COSTS 1,841 1,873
----------- ----------
EBITDA AFTER RESTRUCTURING COSTS $720 $9,499
DEPRECIATION 9,784 12,414
AMORTIZATION 9,233 9,233
----------- ----------
TOTAL DEPRECIATION AND AMORTIZATION $19,017 $21,647
OPERATING LOSS ($18,297) ($12,148)
INTEREST EXPENSE 5,194 5,747
OTHER EXPENSE 0 1
----------- ----------
LOSS BEFORE INCOME TAX BENEFIT ($23,491) ($17,896)
INCOME TAX BENEFIT 0 0
----------- ----------
NET LOSS ($23,491) ($17,896)
----------- ----------
----------- ----------
SEE ACCOMPANYING NOTES.
4 OF 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED BALANCE SHEET
FOR THE MONTH ENDED MARCH 31, 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. THE DEBTORS DO NOT EXPECT TO FILE
THEIR REPORTS ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996 WITH THE SEC
UNTIL MAY 31, 1997.
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 MAY 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 MARCH 31, 1997 AND FEBRUARY 28, 1997
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31 FEBRUARY 28
1997 1997
-------------- ----------------
<S> <C> <C>
ASSETS:
CURRENT ASSETS:
Cash $14,444 $20,545
Accounts Receivable, Net 94,742 102,156
Inventory 10,150(1) 8,768(2)
Prepaid Expenses 1,322 1,275
Other Current Assets 2,682 2,644
--------------- -------------
TOTAL CURRENT ASSETS 123,340 135,387
NONCURRENT ASSETS:
Property and Equipment, Net 340,205 346,017(3)
Deferred Financing Fees, Net 27,923 28,476
Investment In Net Assets Of Equity Affiliate 2,152 2,089
Intangible Assets, Net 1,101,030 1,110,255
Other Assets 637 651
--------------- -------------
TOTAL NONCURRENT ASSETS 1,471,947 1,487,488
TOTAL ASSETS $1,595,286 $1,622,875
--------------- -------------
--------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES NOT SUBJECT TO COMPROMISE:
DIP Credit Facility $20,000 $45,000
Accrued Restructuring Costs 2,560 1,588
Accrued Wages, Benefits and Payroll Taxes 5,995 4,285
Accounts Payable - Post Petition 5,266 1,193
Accrued Interest (Chase & DIP Facilities ) 4,414 3,075
Accrued Expenses and Other Current Liabilities 31,113 15,646(3)
Advance Billings and Customer Deposits 39,742 40,534
--------------- -------------
Total Liabilities Not Subject To Compromise 109,090 111,321
LIABILITIES SUBJECT TO COMPROMISE:
Accrued Wages, Benefits and Payroll Taxes 11,331 11,408
Chase Credit Facility 649,000 649,000
Notes Payable - 10 1/2% 174,125 174,125
Notes Payable - 9 3/8% 250,000 250,000
Notes Payable - Yampol 986 986
Notes Payable - Dial Page 12 1/4% 1,570 1,570
Accrued Interest On Notes Payable 20,755 20,755
Accounts Payable- Pre Petition 11,537 7,207
Accrued Expenses and Other Current
Liabilities - Pre Petition 36,433 42,495
Other Liabilities 5,186 5,242
--------------- -------------
TOTAL LIABILITIES SUBJECT TO COMPROMISE 1,160,923 1,162,789(4)
DEFERRED TAX LIABILITY 72,097 72,097
STOCKHOLDERS' EQUITY
Class A Common Stock 39 39
Class B Common Stock 2 2
Additional Paid-In Capital 671,459 671,459
Accumulated Deficit - Pre Petition (370,814) (370,814)(2)
Accumulated Deficit - Post Petition (41,388) (17,896)
--------------- -------------
TOTAL STOCKHOLDERS' EQUITY 259,299 282,791
Less:
Treasury Stock (6,123) (6,123)
--------------- -------------
TOTAL STOCKHOLDERS' EQUITY 253,176 276,668
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $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. The Debtors do not expect to
file their Reports on Form 10-K for the year ended December 31, 1996 with
the SEC until May 31, 1997.
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 condition and liquidity.
The Debtors believe that there may 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 U.S. Bankruptcy Code
on January 30, 1997.
2. On January 30, 1997 (the "Filing Date"), MobileMedia Corporation (the
"Company"), MobileMedia Communications, Inc. ("MobileMedia Communications")
and 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
("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 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.
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.
The Debtors have 120 days from the date of the filing of their petitions
for relief under Chapter 11 as their exclusive period to file a plan of
reorganization, which period may be extended by order of the Bankruptcy
Court.
Page 7 of 17
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS (CONTINUED):
4. The Consolidated Statement of Operations includes for the period 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 month of March 1997, the
Debtors repaid $25 million 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 March 31, 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 regulatory issues. The Company cannot
be certain of the outcome of the process initiated by 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 of a grant and 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.
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 MARCH 31, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- ------------------------------------------------------------------------------
The Debtors have 69 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. THE DEBTORS DO NOT EXPECT TO FILE
THEIR REPORTS ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996 WITH THE SEC
UNTIL MAY 31, 1997.
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 MAY 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 MARCH 31, 1997 AND FEBRUARY 28, 1997
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 1997 FEBRUARY 1997
-------------- ----------------
<S> <C> <C>
OPERATING ACTIVITIES
NET LOSS ($23,492) ($17,896)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Depreciation and Amortization 19,017 21,647
Provision for Uncollectible Accounts And Returns 13,767 4,423
Undistributed Earnings of Affiliate (64) (18)
Deferred Financings Fees, Net 554 (805)
Change in Operating Assets and Liabilities:
Accounts Receivable (6,353) (12,654)
Inventory (1,382) 524
Prepaid Expenses and Other Assets (78) 1,170
Accounts Payable, Accrued Expenses and Other 20,903 (43,492)
--------------- --------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 22,872 (47,101)
INVESTING ACTIVITIES
Construction And Capital Expenditures,
Including Net Change In Pager Assets (3,972) (3,403)
--------------- --------------
NET CASH USED IN INVESTING ACTIVITIES (3,972) (3,403)
FINANCING ACTIVITIES
(Repayments)/Borrowings From DIP Credit Facility (25,000) 45,000
--------------- --------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (25,000) 45,000
NET DECREASE IN CASH AND CASH EQUIVALENTS (6,101) (5,504)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 20,545 26,048
--------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $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 MARCH 31, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- -------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE AGING
$ 24,600,410 0 - 30 days old
28,225,742 31 - 60 days old
18,399,081 61 - 90 days old
61,682,460 91+ days old
132,907,693 TOTAL TRADE ACCOUNTS RECEIVABLE
( 41,040,467) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
91,867,226 TRADE ACCOUNTS RECEIVABLE (NET)
2,874,737 OTHER NON-TRADE RECEIVABLES
$ 94,741,963 ACCOUNTS RECEIVABLE, NET
AGING OF POSTPETITION ACCOUNTS PAYABLE
0-30 31-60 61-90 91+
Days Days Days Days Total
ACCOUNTS PAYABLE $ 5,265,972 0 0 0 $ 5,265,972
Page 13 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF OPERATIONS, TAXES,
INSURANCE AND PERSONNEL
FOR THE MONTH ENDED MARCH 31, 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 $ 1,161,968 $ 1,161,968 $ 0 $ 0
FICA-EMPLOYEE 0 677,584 677,584 0 0
FICA-EMPLOYER 162,917 1,327,329 1,295,862 194,384 0
UNEMPLOYMENT 13,827 36,362 38,607 11,582 0
INCOME 0 0 0 0 0
TOTAL FEDERAL TAXES 176,744 3,203,243 3,174,021 205,966 0
STATE AND LOCAL
WITHHOLDING 1,406 207,082 208,488 0 0
SALES 4,254 1,269,511 839,477 434,288 0
UNEMPLOYMENT 48,200 172,961 147,292 73,869 0
REAL PROPERTY 65,459 645,227 0 710,686 0
OTHER 11,730 222,484 82,002 152,212 0
TOTAL STATE AND LOCAL 131,049 2,517,265 1,277,259 1,371,055 0
TOTAL TAXES $ 307,793 $ 5,720,508 $ 4,451,280 $ 1,577,021 $ 0
</TABLE>
Page 14 of 17
<PAGE>
<TABLE>
<CAPTION>
PAYMENTS TO INSIDERS AND PROFESSIONALS
FOR THE MONTH ENDED MARCH 31, 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 and Acting
Senior VP Operations 13,923 11,649 25,572
Cross, Andrew Executive VP Sales and Marketing 17,000 14,831 31,831
Grawert, Ron Chief Executive Officer 30,769 5,859 36,628
Gray, Patricia Acting Corporate Counsel 13,085 1,597 14,682
Gross, Steven Senior VP Strategic Planning 13,692 10,493 24,185
Hilson, Debra Paralegal 3,546 3,610 7,156
Hughes, Curtis Assistant VP of Mgmt.
Information Systems 8,038 5,656 13,694
Pascucci, James Assistant Treasurer 7,315 9,055 16,370
Pittsman, Santo Senior VP and Chief
Financial Officer 15,846 2,075 17,921
Shea, Kevin Treasurer 10,778 0 10,778
Witsaman, Mark Senior VP and Chief
Technology Officer 13,923 4,233 18,156
TOTAL PAYMENTS TO INSIDERS $ 225,435
</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
Consultants to Debtor 1/30/97 $ 621,193 $ 506,850 $ 114,343
3. Latham & Watkins - Counsel to
Debtor 1/30/97 167,999 0 167,999
4. Alvarez & Marsal Inc.- Restructuring
consultant to Debtor 1/30/97 126,589 102,943 23,646
5. Sidley & Austin - Counsel to Debtor 1/30/97 214,695 0 214,695
TOTAL PAYMENTS TO PROFESSIONALS $ 1,130,476 $ 609,793 $ 520,683
</TABLE>
Page 15 of 17
<PAGE>
<TABLE>
<CAPTION>
ADEQUATE PROTECTION PAYMENTS
FOR THE MONTH ENDED MARCH 31, 1997
SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID
NAME OF CREDITOR DUE MONTH POSTPETITION
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Chase Manhattan Bank - (Interest) $ 3,082,414 $ 3,082,414 0
</TABLE>
<TABLE>
<CAPTION>
QUESTIONNAIRE
FOR THE MONTH ENDED MARCH 31, 1997 YES NO
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <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 month of March
1997, the Debtors repaid $25 million of borrowing under the DIP
facility.
Page 16 of 17
<PAGE>
INSURANCE
FOR THE MONTH ENDED MARCH 31, 1997
- -----------------------------------------------------------------------------
THERE WERE NO CHANGES IN INSURANCE COVERAGE FOR THE REPORTING PERIOD.
PERSONNEL
FOR THE MONTH ENDED MARCH 31, 1997
- -----------------------------------------------------------------------------
Full Time Part Time
1. Total number of employees at beginning of period 3,376 206
2. Number of employees hired during the period 22 10
3. Number of employees terminated or resigned during the
period (81) (26)
4. Total number of employees on payroll at end of period 3,317 190
Page 17 of 17
