================================================================================
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 31, 1999
MOBILEMEDIA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-26320 22-3253006
(State or other (Commission File No.) (IRS Employer
jurisdication Identification No.)
of incorporation)
Fort Lee Executive Park, One Executive Drive, Suite 500,
Fort Lee, New Jersey 07024
(Address of principal executive offices)
(Zip Code)
(201) 224-9200
(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 June 1, 1999, MobileMedia Corporation (the "Company"),
MobileMedia Communications, Inc. ("MobileMedia Communications") and all of the
subsidiaries of MobileMedia Communications (collectively, the "Companies") filed
with the United States Bankruptcy Court for the District of Delaware their
monthly operating report for the month ended April 30, 1999 which is
attached hereto as Exhibit 99.1.
Item 6. Resignations of Registrant's Directors.
Not Applicable.
Item 7. Financial Statements and Exhibits.
Not Applicable.
Item 8. Change in Fiscal Year.
Not Applicable.
2
<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.
Date: June 1, 1999 MOBILEMEDIA CORPORATION
By: /s/ David R. Gibson
----------------------------
David R. Gibson
Senior Vice President and
Chief Financial Officer
3
<PAGE>
EXHIBIT INDEX
Exhibit Page
- ------- ----
Exhibit 99.1--Monthly Operating Report
4
OFFICE OF THE U.S. TRUSTEE - REGION 3
MONTHLY OPERATING REPORT
For the month ended April 30, 1999
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 Tax Return ( ) ( ) (X)
4. Most recent Annual Financial Statements ( ) (X) ( )
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/ David R. Gibson Senior Vice President/Chief Financial Officer
- --------------------------------- ---------------------------------------------
SIGNATURE OF RESPONSIBLE PARTY TITLE
David R. Gibson May 31, 1999
- --------------------------------- ---------------------------------------------
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, 1999
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 34 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.
3. The Debtors have filed final federal and state income tax returns for the
years ended December 31, 1997 and 1996 and have made estimated income tax
payments for 1998 and 1999 where applicable. Copies of these tax returns
are available upon request. Previously, the Debtors filed copies of such
income tax returns for the year ended December 31, 1995 with the US
Trustee.
Page 2 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
For the month ended April 30, 1999
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:
These financial statements are unaudited and accordingly, there could be year
end audit adjustments as well as other adjustments related to the Debtors'
filing for protection under Chapter 11 of the US Bankruptcy Code on January 30,
1997.
(1) In accordance with AICPA Statement of Position 90-7 "Financial Reporting by
Entities in Reorganization under the Bankruptcy Code", in March 1999 the Company
reduced various liabilities subject to compromise by approximately $3.1 million
to reflect changes in estimated allowed pre-petition claims.
(2) Other (Income)Expense in March 1999 includes income of approximately $2.1
million resulting from a legal settlement due to the Company as a result of the
resolution of a dispute with an equipment provider, and is offset by a write off
of such equipment of approximately $0.4 million. This settlement agreement is
subject to Bankruptcy Court approval.
MobileMedia Corporation and Subsidiaries
Consolidated Statements of Operations
For the Months Ended April 30, 1999,
March 31, 1999 and February 28, 1999
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
April March February
1999 1999 1999
--------------- ------------- -----------------
<S> <C> <C> <C>
Paging Revenues
Service, Rents & Maintenance $33,650 $33,312 $33,525
Equipment Sales
Product Sales 2,327 1,622 1,655
Cost of Products Sold 1,522 1,086 1,094
--------------- ------------- -----------------
Equipment Margin 806 536 561
Net Revenue 34,456 33,848 34,086
Operating Expense
Service, Rents & Maintenance 8,834 9,107 9,045
Selling 4,512 5,091 4,344
General & Administrative 10,284 10,540 10,321
--------------- ------------- -----------------
Operating Expense Before Depr. & Amort. 23,629 24,738 23,709
EBITDA Before Reorganization and Restructuring Costs 10,827 9,110 10,377
Reorganization Costs 1,249 1,924 1,740
--------------- ------------- -----------------
EBITDA after Reorganization and Restructuring Costs 9,578 7,186 8,637
Depreciation 7,117 6,913 6,770
Amortization 2,487 2,489 2,502
Amortization of Deferred Gain (389) (389) (389)
--------------- ------------- -----------------
Total Depreciation and Amortization 9,216 9,013 8,883
Operating Income(Loss) 362 (1,827) (247)
Interest Expense 3,398 3,403 3,106
Reduction of Liabilities Subject to Compromise
to Estimated Allowed Claims 0 3,050 (1) 0
Other (Income)Expense 80 (1,672)(2) 0
Income Taxes 0 123 85
--------------- ------------- -----------------
Net Income(Loss) ($3,116) ($633) ($3,438)
=============== ============= =================
</TABLE>
See Accompanying Notes.
Page 4 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED BALANCE SHEET
For the month ended April 30, 1999
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
See balance sheet attached.
Page 5 of 17
<PAGE>
HEADNOTES:
These financial statements are unaudited and accordingly, there could be
year end audit adjustments as well as other adjustments related to the
Debtors' filing for protection under Chapter 11 of the US Bankruptcy Code
on January 30, 1997.
(1) Under the Company's cash management system, checks issued but not
presented to banks occasionally result in overdraft balances for
accounting purposes and are classified as "Book Cash Overdrafts" in the
balance sheet.
MobileMedia Corporation and Subsidiaries
Consolidated Balance Sheets
As of April 30, 1999, March 31, 1999 and February 28, 1999
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
April March February
1999 1999 1999
-------------- --------------- ---------------
<S> <C> <C> <C>
Assets:
Current Assets:
Cash ($0) $0 $0
Accounts Receivable, Net 38,388 37,270 42,422
Inventory 1,581 1,609 1,673
Prepaid Expenses 4,759 5,261 5,761
Other Current Assets 4,907 4,900 4,860
-------------- --------------- ---------------
Total Current Assets 49,636 49,040 54,716
Noncurrent Assets:
Property and Equipment, Net 225,368 225,566 224,894
Deferred Financing Fees, Net 18,080 18,384 18,687
Intangible Assets, Net 256,321 258,793 261,265
Other Assets 769 784 802
-------------- --------------- ---------------
Total Noncurrent Assets 497,538 503,527 505,648
Total Assets $547,173 $552,567 $560,364
============== =============== ===============
Liabilities and Stockholders' Equity:
Liabilities Not Subject to Compromise:
DIP Credit Facility $9,000 $5,000 $2,000
Accrued Reorganization Costs 6,509 7,197 6,249
Accrued Wages, Benefits and Payroll Taxes 6,930 9,944 13,410
Accounts Payable - Post Petition 3,511 7,334 8,204
Book Cash Overdrafts 3,820 (1) 1,255 (1) 3,830 (1)
Accrued Interest 3,457 3,566 3,271
Accrued Expenses and Other Current Liabilities 29,889 30,072 30,988
Current Income Tax Payable 1,063 1,200 1,743
Advance Billings and Customer Deposits 28,580 28,892 29,065
Deferred Gain on Tower Sale 66,889 67,278 67,667
-------------- --------------- ---------------
Total Liabilities Not Subject To Compromise 159,647 161,739 166,427
Liabilities Subject to Compromise:
Accrued Wages, Benefits and Payroll Taxes 476 476 476
Chase Credit Facility 479,000 479,000 479,000
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 17,578 17,578 17,578
Accounts Payable- Pre Petition 15,311 15,351 15,408
Accrued Expenses and Other Current Liabilities - Pre Petition 12,085 12,231 14,650
-------------- --------------- ---------------
Total Liabilities Subject To Compromise 951,131 951,317 953,793
Deferred Tax Liability 2,655 2,655 2,655
Stockholders' Equity
Class A Common Stock 50 50 50
Class B Common Stock 2 2 2
Additional Paid-In Capital 689,148 689,148 689,148
Accumulated Deficit - Pre Petition (1,171,108) (1,171,108) (1,171,108)
Accumulated Deficit - Post Petition (78,229) (75,114) (74,481)
-------------- --------------- ---------------
Total Stockholders' Equity (560,137) (557,021) (556,388)
Less:
Treasury Stock (6,123) (6,123) (6,123)
-------------- --------------- ---------------
Total Liabilities and Stockholders' Equity $547,173 $552,567 $560,364
============== =============== ===============
</TABLE>
See Accompanying Notes
Page 6 of 17
<PAGE>
Footnotes to the Financial Statements:
1. These financial statements are unaudited and accordingly, there could be
year end audit adjustments as well as other adjustments related to 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 Communications'
subsidiaries (collectively with the Company and MobileMedia
Communications, the "Debtors"), 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 Bankruptcy 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) property
taxes; (vii) customer refunds; and (viii) customer rewards.
On August 20, 1998, Arch Communications Group, Inc. ("Arch") and the
Debtors announced a definitive merger agreement for Arch to acquire the
Debtors. This merger agreement was amended as of September 3, 1998 and as
of December 1, 1998. Under the terms of the agreement, Arch will acquire
the Debtors for a combination of cash, the assumption of certain
liabilities, and the issuance of Arch common stock and rights to acquire
Arch common stock. The transaction will be implemented through the
Debtors' Third Amended Joint Plan of Reorganization filed with the
Bankruptcy Court on December 2, 1998 ("the Amended Plan"). A Disclosure
Statement related to the Amended Plan was approved by the Bankruptcy Court
on December 11, 1998 and a hearing on confirmation of the Amended Plan
commenced on February 3, 1999. On February 12, 1999, the Bankruptcy Court
ordered the Debtors to resolicit the votes of the holders of claims in
Class 6 under the Amended Plan (General Unsecured Creditors), and on
February 18, 1999, the Bankruptcy Court approved a Notice of Supplemental
Disclosure, with attachment, to be used by the Debtors in connection with
such resolicitation. The resolicitation was completed on March 23, 1999,
and the holders of claims in Class 6 voted to accept the Amended Plan.
Also on March 23, 1999, the Bankruptcy Court approved a Stipulation that
resolved objections to the Amended Plan that had been filed by certain
unsecured creditors of the Debtors. The Amended Plan was confirmed by the
Bankruptcy Court on April 12, 1999. It is expected that the transactions
contemplated by the Amended Plan will be consummated on or about June 3,
1999.
Page 7 of 17
<PAGE>
Footnotes to the Financial Statements (continued):
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 is one of the largest paging companies in the U.S., with
approximately 3.1 million units in service at April 30, 1999, 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, and its subsidiaries. The Company markets its
services primarily under the "MobileComm" brand name. All significant
intercompany accounts and transactions have been eliminated.
5. As previously announced in its September 27, 1996 and October 21, 1996
releases, misrepresentations and other violations had occurred during the
licensing process for as many as 400 to 500, or approximately 6% to 7%, of
the Company's 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 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.
Page 8 of 17
<PAGE>
Footnotes to the Financial Statements (continued):
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.
On June 6, 1997, the FCC issued an order staying the hearing proceeding 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
permissible transfer of the Company's FCC licenses. The grant of the stay
was premised on the availability of an FCC doctrine known as Second
Thursday, which provides that if there is a change of control that meets
certain conditions, the regulatory issues designated for hearing 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.
On February 5, 1999 the FCC granted the Debtors' Second Thursday
application and approved the license transfers to Arch contemplated by the
Amended Plan (the "FCC Grant"). This approval is final and can not be
appealed, however, any material changes to the Amended Plan in its current
form or failure to consummate the Plan within nine months of confirmation
would require supplemental approval from the FCC.
In the event that the Company were unable to to consummate the Amended
Plan within the timeframe contemplated by the FCC Grant, the Company could
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 9 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONSOLIDATED STATEMENT OF CASH
RECEIPTS AND DISBURSEMENTS
For the month ended April 30, 1999
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
The Debtors have 34 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 10 of 17
<PAGE>
HEADNOTES:
These financial statements are unaudited and accordingly, there could be year
end audit adjustments as well as other adjustments related to the Debtors'
filing for protection under Chapter 11 of the US Bankruptcy Code on January 30,
1997.
(1) In accordance with AICPA Statement of Position 90-7 "Financial Reporting by
Entities in Reorganization under the Bankruptcy Code", in March 1999 the Company
reduced various liabilities subject to compromise by approximately $3.1 million
to reflect changes in estimated allowed pre-petition claims.
(2) Under the Company's cash management system, checks issued but not presented
to banks occasionally result in overdraft balances for accounting purposes and
are classified as "Book Cash Overdrafts" in the balance sheet.
MobileMedia Corporation and Subsidiaries
Consolidated Statements Of Cash Flows
For The Months Ended April 30, 1999, March 31, 1999 and February 28, 1999
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
April March February
1999 1999 1999
------------- ------------- -------------
<S> <C> <C> <C>
Operating Activities
Net Income(Loss) ($3,116) ($633) ($3,438)
Adjustments To Reconcile Net Income(Loss) To Net Cash
Provided By (Used In) Operating Activities:
Depreciation And Amortization 9,605 9,402 9,272
Provision For Uncollectible Accounts And Returns 698 390 885
Amortization of Deferred Gain on Sale of Tower Assets (389) (389) (389)
Write Down of Investment in Affiliate to Net Realizable Value 0 0 0
Reversal of Estimated Loss on Discontinued Operations 0 0 0
Reduction of Liabilities Subject to Compromise to Estimated Allowed Claims 0 (3,050)(1) 0
Deferred Financings Fees, Net 304 304 304
Change In Operating Assets and Liabilities:
Accounts Receivable (1,816) (4,762) (3,221)
Inventory 27 64 232
Prepaid Expenses And Other Assets 495 460 151
Accounts Payable, Accrued Expenses and Other (9,709) (7,980) (272)
------------- ------------- -------------
Net Cash Provided By (Used In) Operating Activities (3,901) 3,330 3,523
Investing Activities
Construction And Capital Expenditures,
Including Net Change In Pager Assets (3,973) (7,965) (9,409)
Net Proceeds From the Sale of Investment in Abacus 0 0 0
Net Loss From the Disposal of Fixed Assets 54 379 0
------------- ------------- -------------
Net Cash Provided By (Used In) Investing Activities (3,919) (7,585) (9,409)
Financing Activities
Book Cash Overdrafts 3,820(2) 1,255(2) 3,830(2)
Borrowings (Repayments) of DIP Credit Facility 4,000 3,000 2,000
------------- ------------- -------------
Net Cash Provided By (Used In) Financing Activities 7,820 4,255 5,830
Net Increase (Decrease) In Cash and Cash Equivalents (0) 0 (56)
Cash and Cash Equivalents At Beginning Of Period 0 (0) 56
------------- ------------- -------------
Cash and Cash Equivalents At End Of Period ($0) $0 ($0)
============= ============= =============
</TABLE>
See Accompanying Notes
Page 11 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, 1999
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
================================================================================
ACCOUNTS RECEIVABLE AGING
- --------------------------------------------------------------------------------
$25,984,919 0 - 30 days old
----------------------------------------------------------------
10,767,487 31 - 60 days old
----------------------------------------------------------------
4,605,104 61 - 90 days old
----------------------------------------------------------------
8,777,652 91+ days old
----------------------------------------------------------------
50,135,162 TOTAL TRADE ACCOUNTS RECEIVABLE
----------------------------------------------------------------
(14,153,000) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
----------------------------------------------------------------
35,982,162 TRADE ACCOUNTS RECEIVABLE (NET)
----------------------------------------------------------------
2,406,084 OTHER NON-TRADE RECEIVABLES
----------------------------------------------------------------
$ 38,388,246 ACCOUNTS RECEIVABLE, NET
================================================================================
================================================================================
AGING OF POSTPETITION ACCOUNTS PAYABLE
- --------------------------------------------------------------------------------
0-30 31-60 61-90 91+
Days Days Days Days Total
- --------------------------------------------------------------------------------
ACCOUNTS PAYABLE $ 3,459,891 51,154 0 0 $3,511,045
================================================================================
Page 12 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF OPERATIONS, TAXES,
INSURANCE AND PERSONNEL
For the month ended April 30, 1999
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 $ 1,382,539 $ 1,382,539 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------
FICA-EMPLOYEE 0 866,067 866,067 0 0
- ----------------------------------------------------------------------------------------------------------------------
FICA-EMPLOYER 237,375 1,463,458 1,700,833 0 0
- ----------------------------------------------------------------------------------------------------------------------
UNEMPLOYMENT 12,943 10,690 23,633 0 0
- ----------------------------------------------------------------------------------------------------------------------
INCOME 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------
TOTAL FEDERAL TAXES 250,318 3,722,754 3,973,072 0 0
======================================================================================================================
STATE AND LOCAL
======================================================================================================================
WITHHOLDING 37,451 254,642 254,642 37,451 0
- ----------------------------------------------------------------------------------------------------------------------
SALES 1,125,920 1,082,343 1,132,390 1,075,873 0
- ----------------------------------------------------------------------------------------------------------------------
UNEMPLOYMENT 62,318 84,389 140,633 6,074 0
- ----------------------------------------------------------------------------------------------------------------------
REAL PROPERTY 2,173,810 388,130 42,805 2,519,134 0
- ----------------------------------------------------------------------------------------------------------------------
OTHER 4,695,652 909,730 941,799 4,663,584 0
======================================================================================================================
TOTAL STATE AND LOCAL 8,095,151 2,719,234 2,512,269 8,302,116 0
======================================================================================================================
TOTAL TAXES $ 8,345,469 $ 6,441,988 $ 6,485,341 $ 8,302,116 $ 0
======================================================================================================================
</TABLE>
Page 13 of 17
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================================
PAYMENTS TO INSIDERS AND PROFESSIONALS
For the month ended April 30, 1999
========================================================================================================================
========================================================================================================================
INSIDERS
- -----------------------------------------------------------------------------------------------------------------------
Payee Name Position Salary/Bonus/ Reimbursable
Auto Allowance Expenses Total
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alvarez & Marsal Inc. - Chairman - Restructuring (2) $ 671,667 $ 2,634 $674,301
Joseph A. Bondi
- -----------------------------------------------------------------------------------------------------------------------
Burdette, H. Stephen Senior VP Corporate 22,500 6,398 28,898
Development and Senior VP
Operations
- -----------------------------------------------------------------------------------------------------------------------
Grawert, Ron Chief Executive Officer 46,154 8,300 54,454
- -----------------------------------------------------------------------------------------------------------------------
Gray, Patricia Secretary/VP and General 22,977 1,430 24,407
Counsel
- -----------------------------------------------------------------------------------------------------------------------
Gross, Steven Executive VP Sales & 26,654 3,567 30,221
Marketing
- -----------------------------------------------------------------------------------------------------------------------
Hilson, Debra Assistant Secretary 7,272 2,597 9,869
- -----------------------------------------------------------------------------------------------------------------------
Pascucci, James Treasurer 12,600 1,151 13,751
- -----------------------------------------------------------------------------------------------------------------------
Panzella, Vito VP / Controller 13,667 573 14,240
- -----------------------------------------------------------------------------------------------------------------------
Witsaman, Mark Senior VP and Chief 22,904 4,022 26,926
Technology Officer
- -----------------------------------------------------------------------------------------------------------------------
TOTAL PAYMENTS TO INSIDERS $ 877,067
========================================================================================================================
</TABLE>
(1) Excludes 19 non-executive officers of subsidiaries who were paid salaries,
and reimbursable expenses in the aggregate of $313,998.
(2) Includes 1998 incentive bonus payment of $617,500 made in April 1999.
Page 14 of 17
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
PAYMENTS TO INSIDERS AND PROFESSIONALS (Continued)
For the month ended April 30, 1999
======================================================================================================================
======================================================================================================================
PROFESSIONALS
- ----------------------------------------------------------------------------------------------------------------------
Holdback and
Date of Invoice
Name and Relationship Court Invoices Invoices Balances
Approval Received (1) Paid Due
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Ernst & Young - Auditor, Tax and Financial 1/30/97 $1,339,108 $ 0 $2,856,666
Consultants to Debtor
- ----------------------------------------------------------------------------------------------------------------------
2. Latham & Watkins - Counsel to Debtor 1/30/97 58,387 37,816 218,307
- ----------------------------------------------------------------------------------------------------------------------
3. Alvarez & Marsal Inc.- Restructuring 1/30/97 304,354 0 557,807
Consultant to Debtor (2)
- ----------------------------------------------------------------------------------------------------------------------
4. Sidley & Austin - Bankruptcy Counsel to 1/30/97 637,348 450,447 1,295,193
Debtor
- ----------------------------------------------------------------------------------------------------------------------
5. Young, Conaway, Stargatt & Taylor - Delaware 1/30/97 64,120 10,006 76,438
Counsel to Debtor
- ----------------------------------------------------------------------------------------------------------------------
6. Wiley, Rein & Fielding - FCC Counsel to 1/30/97 85,246 179,817 257,447
Debtor
- ----------------------------------------------------------------------------------------------------------------------
7. Koteen & Naftalin - FCC Counsel to Debtor 6/11/97 - - 3,945
- ----------------------------------------------------------------------------------------------------------------------
8. Houlihan, Lokey, Howard & Zukin - Advisors 6/04/97 - - 90,000
to the Creditors' Committee
- ----------------------------------------------------------------------------------------------------------------------
9. Jones, Day, Reavis & Pogue - Counsel to the 4/03/97 198,977 71,629 348,989
Creditors' Committee
- ----------------------------------------------------------------------------------------------------------------------
10. Morris, Nichols, Arsht & Tunnell - Delaware 4/03/97 5,246 10,100 9,172
Counsel to the Creditors' Committee
- ----------------------------------------------------------------------------------------------------------------------
11. Paul, Weiss, Rifkind, Wharton & Garrison - 4/25/97 0 555 1,778
FCC Counsel to the Creditors' Committee
- ----------------------------------------------------------------------------------------------------------------------
12. The Blackstone Group LP - Financial Advisors 7/10/97 257,392 100,771 457,392
to Debtor
- ----------------------------------------------------------------------------------------------------------------------
13. Gerry, Friend & Sapronov, LLP. - Counsel to 10/27/97 8,356 64,475 54,961
Debtor
- ----------------------------------------------------------------------------------------------------------------------
TOTAL $2,958,534 925,616 $6,228,095
======================================================================================================================
</TABLE>
(1) Excludes invoices for fees and expenses through April 30, 1999 that were
received by the Debtors subsequent to April 30, 1999.
(2) Includes fees and expenses for David R. Gibson, Senior Vice President and
Chief Financial Officer (effective June 24, 1997).
Page 15 of 17
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
ADEQUATE PROTECTION PAYMENTS
For the month ended April 30, 1999
======================================================================================================================
SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID
NAME OF CREDITOR DUE MONTH POSTPETITION
======================================================================================================================
<S> <C> <C> <C>
The Chase Manhattan Bank - (Interest) $3,012,107 $ 3,012,107* $ 0
======================================================================================================================
</TABLE>
* Payment made on 05/3/99.
<TABLE>
<CAPTION>
======================================================================================================================
QUESTIONNAIRE
For the month ended April 30, 1999 YES NO
======================================================================================================================
<S> <C> <C>
1. Have any assets been sold or transferred outside the normal course of
business this No 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 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) property taxes; (vii) customer refunds; and (viii)
customer rewards.
Item 5. During the month of April 1999, the Company borrowed $4 million
under the DIP facility.
Page 16 of 17
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
INSURANCE
For the month ended April 30, 1999
======================================================================================================================
There were no changes in insurance coverage for the reporting period.
======================================================================================================================
======================================================================================================================
PERSONNEL
For the month ended April 30, 1999
- ----------------------------------------------------------------------------------------------------------------------
Full Time Part Time
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Total number of employees at beginning of period 2,863 22
- ----------------------------------------------------------------------------------------------------------------------
2. Number of employees hired during the period 54 2
- ----------------------------------------------------------------------------------------------------------------------
3. Number of employees terminated or resigned during the period 9 4
- ----------------------------------------------------------------------------------------------------------------------
4. Total number of employees on payroll at end of period 2,908 20
======================================================================================================================
</TABLE>
Page 17 of 17
