================================================================================
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 1, 1999
MOBILEMEDIA COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-68840 22-3379712
(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 April 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 February 28, 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: April 5, 1999 MOBILEMEDIA COMMUNICATIONS, INC.
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 February 28, 1999
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> <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:
Senior Vice President/Chief Financial Officer
- ------------------------------- ---------------------------------------------
SIGNATURE OF RESPONSIBLE PARTY TITLE
David R. Gibson March 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 February 28, 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 36 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 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 February 28, 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>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
For the month ended February 28, 1999
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
- -------------------------------------------------------------------------------
See balance sheet attached.
Page 5 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 resolves objections to the Amended Plan that had been filed
by certain unsecured creditors of the Debtors, and will result in the
Amended Plan being either confirmed or denied at a continued hearing on
confirmation on April 12, 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 February 28, 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. During January 1999, the Company completed the sale of its minority interest
in Abacus Communications Partners, L.P., to Abacus Exchange Inc. for $1.4
million.
6. 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. 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, as reflected
in the Amended Plan, will result in a change of control. The order was
originally granted for ten months and was extended by the FCC through
October 6, 1998.
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 confirm the Amended Plan or 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 February 28, 1999
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
- --------------------------------------------------------------------------------
The Debtors have 36 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>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF ACCOUNTS RECEIVABLE AGING AND
AGING OF POSTPETITION ACCOUNTS PAYABLE
For the month ended February 28, 1999
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
- -------------------------------------------------------------------------
ACCOUNTS RECEIVABLE AGING
- -------------------------------------------------------------------------
- ------------ ----------------- ------------------------------------------
$29,307,003 0 - 30 days old
----------------- ------------------------------------------
----------------- ------------------------------------------
12,483,040 31 - 60 days old
----------------- ------------------------------------------
----------------- ------------------------------------------
5,365,116 61 - 90 days old
----------------- ------------------------------------------
----------------- ------------------------------------------
10,094,360 91+ days old
----------------- ------------------------------------------
----------------- ------------------------------------------
57,249,519 TOTAL TRADE ACCOUNTS RECEIVABLE
----------------- ------------------------------------------
----------------- ------------------------------------------
(15,107,000) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
----------------- ------------------------------------------
----------------- ------------------------------------------
42,142,519 TRADE ACCOUNTS RECEIVABLE (NET)
----------------- ------------------------------------------
----------------- ------------------------------------------
279,596 OTHER NON-TRADE RECEIVABLES
----------------- ------------------------------------------
----------------- ------------------------------------------
$ 42,422,115 ACCOUNTS RECEIVABLE, NET
- ------------ ----------------- ------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------
AGING OF POSTPETITION ACCOUNTS PAYABLE
- ---------------------------------- ------------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
0-30 31-60 61-90 91+
Days Days Days Days Total
- ---------------------------------- ------------- ------------ ---------- ----------- ------------
- ---------------------------------- ------------- ------------ ---------- ----------- ------------
ACCOUNTS PAYABLE $ 7,076,904 1,127,309 0 0 $8,204,213
- ---------------------------------- ------------- ------------ ---------- ----------- ------------
</TABLE>
Page 12 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF OPERATIONS, TAXES,
INSURANCE AND PERSONNEL
For the month ended February 28, 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
- -------------------------------- ------------ ------------ ------------ ------------ ------------
FEDERAL
- -------------------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
WITHHOLDING $ 0 $ 932,453 $ 932,453 $ 0 $ 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
- -------------------------------- ------------ ------------ ------------ ------------ ------------
FICA-EMPLOYEE 0 597,346 597,346 0 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
- -------------------------------- ------------ ------------ ------------ ------------ ------------
FICA-EMPLOYER 194,462 1,135,015 1,181,757 147,720 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
- -------------------------------- ------------ ------------ ------------ ------------ ------------
UNEMPLOYMENT 19,914 41,494 49,126 12,282 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
- -------------------------------- ------------ ------------ ------------ ------------ ------------
INCOME 263,634 0 263,634 0 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
- -------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL FEDERAL TAXES 478,010 2,706,308 3,024,316 160,002 0
- -------------------------------- ------------
- -------------------------------- ------------ ------------ ------------ ------------ ------------
STATE AND LOCAL
- -------------------------------- ------------ ------------ ------------ ------------ ------------
WITHHOLDING 37,452 175,124 175,125 37,451 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
- -------------------------------- ------------ ------------ ------------ ------------ ------------
SALES 1,134,450 1,051,102 1,177,934 1,007,618 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
- -------------------------------- ------------ ------------ ------------ ------------ ------------
UNEMPLOYMENT 76,562 184,122 207,079 53,605 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
- -------------------------------- ------------ ------------ ------------ ------------ ------------
REAL PROPERTY 2,287,565 374,338 650,472 2,011,431 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
- -------------------------------- ------------ ------------ ------------ ------------ ------------
OTHER 4,802,605 959,952 844,898 4,917,659 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL STATE AND LOCAL 8,338,634 2,744,638 3,055,508 8,027,764 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
TOTAL TAXES $ 8,816,644 $ 5,450,946 $ 6,079,824 $ 8,187,766 $ 0
- -------------------------------- ------------ ------------ ------------ ------------ ------------
</TABLE>
Page 13 of 17
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
PAYMENTS TO INSIDERS AND PROFESSIONALS
For the month ended February 28, 1999
- -------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
INSIDERS (1)
- --------------------------------------------------------------------------------------------------
Payee Name Position Salary/Bonus/ Reimbursable
Auto Allowance Expenses Total
- ------------------------- ----------------------- ------------------ --------------- -------------
<S> <C> <C> <C>
Alvarez & Marsal Inc. - Chairman - $ 54,167 $ 8,553 $ 62,720
Joseph A. Bondi Restructuring
- ------------------------- ----------------------- ------------------ --------------- -------------
- ------------------------- ----------------------- ------------------ --------------- -------------
Burdette, H. Stephen Senior VP Corporate 15,000 4,556 19,556
Development and
Senior VP Operations
- ------------------------- ----------------------- ------------------ --------------- -------------
- ------------------------- ----------------------- ------------------ --------------- -------------
Grawert, Ron Chief Executive 30,769 5,353 36,122
Officer
- ------------------------- ----------------------- ------------------ --------------- -------------
- ------------------------- ----------------------- ------------------ --------------- -------------
Gray, Patricia Secretary/VP and 13,846 3,680 17,526
General Counsel
- ------------------------- ----------------------- ------------------ --------------- -------------
- ------------------------- ----------------------- ------------------ --------------- -------------
Gross, Steven Executive VP Sales & 17,769 4,487 22,256
Marketing
- ------------------------- ----------------------- ------------------ --------------- -------------
- ------------------------- ----------------------- ------------------ --------------- -------------
Hilson, Debra Assistant Secretary 4,848 0 4,848
- ------------------------- ----------------------- ------------------ --------------- -------------
- ------------------------- ----------------------- ------------------ --------------- -------------
Pascucci, James Treasurer 8,400 131 8,531
- ------------------------- ----------------------- ------------------ --------------- -------------
- ------------------------- ----------------------- ------------------ --------------- -------------
Panzella, Vito VP / Controller 9,112 0 9,112
- ------------------------- ----------------------- ------------------ --------------- -------------
- ------------------------- ----------------------- ------------------ --------------- -------------
Witsaman, Mark Senior VP and Chief 15,269 7,389 22,658
Technology Officer
- ------------------------- ----------------------- ------------------ --------------- -------------
TOTAL PAYMENTS TO INSIDERS $ 203,329
- ------------------------------------------------------------------------------------ -------------
</TABLE>
(1) Excludes 19 non-executive officers of subsidiaries who were paid salaries
and reimbursable expenses in the aggregate of $202,724.
Page 14 of 17
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
PAYMENTS TO INSIDERS AND PROFESSIONALS (Continued)
For the month ended February 28, 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 1/30/97 $ - $ - $ 739,188
Financial Consultants to Debtor
- ----------------------------------------- ------------ -------------- ------------- -------------
2. Latham & Watkins - Counsel to Debtor 1/30/97 133,207 - 333,716
- ----------------------------------------- ------------ -------------- ------------- -------------
3. Alvarez & Marsal Inc.- 1/30/97 183,050 246,436 400,977
Restructuring Consultant to
Debtor (2)
- ----------------------------------------- ------------ -------------- ------------- -------------
4. Sidley & Austin - Bankruptcy 1/30/97 468,485 187,978 933,649
Counsel to Debtor
- ----------------------------------------- ------------ -------------- ------------- -------------
5. Young, Conaway, Stargatt & Taylor - 1/30/97 28,292 10,185 37,062
Delaware Counsel to Debtor
- ----------------------------------------- ------------ -------------- ------------ -------------
6. Wiley, Rein & Fielding - FCC 1/30/97 120,374 - 228,978
Counsel to Debtor
- ----------------------------------------- ------------ -------------- ------------ -------------
7. Koteen & Naftalin - FCC Counsel to 6/11/97 - - 3,945
Debtor
- ----------------------------------------- ------------ -------------- ------------ -------------
8. Houlihan, Lokey, Howard & Zukin - 6/04/97 - - 90,000
Advisors to the Creditors'
Committee
- ----------------------------------------- ------------ -------------- ------------- -------------
9. Jones, Day, Reavis & Pogue - 4/03/97 41,521 - 167,249
Counsel to the Creditors'
Committee
- ----------------------------------------- ------------ -------------- ------------- -------------
10. Morris, Nichols, Arsht & Tunnell - 4/03/97 3,257 - 4,829
Delaware Counsel to the
Creditors' Committee
- ----------------------------------------- ------------ -------------- ------------- -------------
11. Paul, Weiss, Rifkind, Wharton & 4/25/97 2,782 - 4,305
Garrison - FCC Counsel to the
Creditors' Committee
- ----------------------------------------- ------------ -------------- ------------- -------------
12. The Blackstone Group LP - Financial 7/10/97 - 101,156 175,000
Advisors to Debtor
- ----------------------------------------- ------------ -------------- ------------- -------------
13. Gerry, Friend & Sapronov, LLP. - 10/27/97 31,053 - 64,280
Counsel to Debtor
- ----------------------------------------- ------------ -------------- ------------- -------------
TOTAL $ 1,012,021 $ 545,755 $3,183,178
- ------------------------------------------------------ -------------- ------------- -------------
</TABLE>
(1) Excludes invoices for fees and expenses through February 28, 1999 that were
received by the Debtors subsequent to February 28, 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 February 28, 1999
- -------------------------------------------------------------------------------------------------
SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID
NAME OF CREDITOR DUE MONTH POSTPETITION
- ----------------------------------------------- ---------------- -------------- -----------------
<S> <C> <C> <C>
The Chase Manhattan Bank - (Interest) $2,811,532 $ 2,811,532* $ 0
- ----------------------------------------------- ---------------- -------------- -----------------
* Payment made on 03/01/99.
- ------------------------------------------------------------------------------- -------- --------
QUESTIONNAIRE
For the month ended February 28, 1999 YES NO
- ------------------------------------------------------------------------------- -------- --------
1. Have any assets been sold or transferred outside the normal course of No
business this reporting period?
- ------------------------------------------------------------------------------- -------- --------
2. Have any funds been disbursed from any account other than a debtor in No
possession account?
- ------------------------------------------------------------------------------- -------- --------
3. Are any postpetition receivables (accounts, notes, or loans) due from No
related parties?
- ------------------------------------------------------------------------------- -------- --------
4. Have any payments been made of prepetition liabilities this reporting Yes
period?
- ------------------------------------------------------------------------------- -------- --------
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 February 1999, the Company borrowed $2
million under the DIP facility.
Page 16 of 17
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
INSURANCE
For the month ended February 28, 1999
- -------------------------------------------------------------------------------------------------
There were no changes in insurance coverage for the reporting period.
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
PERSONNEL
For the month ended February 28, 1999
- -------------------------------------------------------------------------------------------------
Full Time Part Time
- ------------------------------------------------------------------------ ------------ -----------
<S> <C> <C>
1. Total number of employees at beginning of period 2,923 20
- ------------------------------------------------------------------------ ------------ -----------
2. Number of employees hired during the period 37 1
- ------------------------------------------------------------------------ ------------ -----------
3. Number of employees terminated or resigned during the period 84 1
- ------------------------------------------------------------------------ ------------ -----------
4. Total number of employees on payroll at end of period 2,876 20
- ------------------------------------------------------------------------ ------------ -----------
</TABLE>
Page 17 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) General & Administrative expense in December 1998 includes an adjustment of
approximately $1.2 million to reduce the Company's allowance for doubtful
accounts. This adjustment relates to periods prior to December 1998.
(2) On October 26, 1998 5 non-operating direct or indirect subsidiaries (the
"Proximity Entities") filed for protection under Chapter 11 of the US Bankruptcy
Code. Prior to the filing, the Proximity entities' principal creditors reached
an agreement whereby pre-petition claims in the aggregate would not be settled
for more than the discontinued operation's assets. As a result, the Company has
reversed $8.1 million of remaining amounts reserved for losses related to these
companies.
(3) In accordance with AICPA Statement of Position 90-7 "Financial Reporting by
Entities in Reorganization under the Bankruptcy Code", in December 1998 the
Company reduced various liabilities subject to compromise by approximately
$10.5 million to reflect changes in estimated allowed claims.
(4) Income taxes result primarily from the gain on the sale of transmission
towers in September 1998.
<TABLE>
<CAPTION>
MobileMedia Corporation and Subsidiaries
Consolidated Statements of Operations
For the Months Ended February 28, 1999, January 31, 1999
and December 31, 1998
(Unaudited)
(in thousands)
February January December
1999 1999 1998
------------ ----------- ------------
<S> <C> <C> <C>
Paging Revenues
Service, Rents & Maintenance $33,525 $33,795 $33,826
Equipment Sales
Product Sales 1,655 1,916 1,865
Cost of Products Sold 1,094 1,335 1,364
------------ ----------- ------------
Equipment Margin 561 580 501
Net Revenue 34,086 34,375 34,328
Operating Expense
Service, Rents & Maintenance 9,045 8,926 9,210
Selling 4,344 4,701 5,020
General & Administrative 10,321 10,623 9,967(1)
------------ ----------- ------------
Operating Expense Before Depr. & Amort. 23,709 24,250 24,197
EBITDA Before Reorganization and Restructuring Costs 10,376 10,125 10,131
Reorganization Costs 1,740 1,404 1,541
------------ ----------- ------------
EBITDA after Reorganization and Restructuring Costs 8,637 8,722 8,590
Depreciation 6,770 6,818 6,872
Amortization 2,502 2,477 2,481
Amortization of Deferred Gain (389) (389) (389)
------------ ----------- ------------
Total Depreciation and Amortization 8,883 8,906 8,964
Operating Income(Loss) (247) (184) (374)
Interest Expense 3,106 3,508 3,496
Gain on Sale of Fixed Assets 0 0 0
Reversal of Estimated Loss on Discontinued Operations 0 0 8,120(2)
Adjustment to Reduce Liabilities Subject to Compromise toEstimated Allowed Claims 0 0 10,461(3)
Other (Income)Expense 0 (69) 202
Income Taxes 85 0 3,280(4)
------------ ----------- ------------
Net Income(Loss) ($3,438) ($3,624) $11,229
</TABLE>
See Accompanying Notes
Page 4 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) Accounts Receivable, Net in December 1998 includes an adjustment of $1.2
million to reduce the Company's allowance for doubtful accounts and an
adjustment to reclassify approximately $2.7 million in credit balances. These
adjustments relate to periods prior to December 1998.
(2) On October 26, 1998 5 non-operating direct or indirect subsidiaries (the
"Proximity Entities") filed for protection under Chapter 11 of the US Bankruptcy
Code. Prior to the filing, the Proximity entities' principal creditors reached
an agreement whereby pre-petition claims in the aggregate would not be settled
for more than the discontinued operation's assets. As a result, the Company has
reversed $8.1 million of remaining amounts reserved for losses related to these
companies.
(3) In accordance with AICPA Statement of Position 90-7 "Financial Reporting by
Entities in Reorganization under the Bankruptcy Code", in December 1998 the
Company reduced various liabilities subject to compromise by approximately $10.5
million to reflect changes in estimated allowed claims.
(4) During January, the Company completed the sale of its minority interest in
Abacus Communications Partners, L.P., to Abacus Exchange Inc. for $1.4 million.
(5) 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.
<TABLE>
<CAPTION>
MobileMedia Corporation and Subsidiaries
Consolidated Balance Sheets
As of February 28, 1999, January 31, 1999 and December 31, 1998
(Unaudited)
(in thousands)
February January December
1999 1999 1998
----------- ----------- -----------
<S> <C> <C> <C>
Assets:
Current Assets:
Cash $0 $56 $1,218
Accounts Receivable, Net 42,422 40,086 38,942(1)
Inventory 1,673 1,905 2,192
Prepaid Expenses 5,761 6,018 5,523
Other Current Assets 4,860 4,853 4,855
----------- ----------- -----------
Total Current Assets 54,716 52,919 52,731
Noncurrent Assets:
Property and Equipment, Net 224,894 222,255 219,642
Deferred Financing Fees, Net 18,687 18,991 19,295
Investment In Net Assets Of Equity Affiliate 0 0(4) 1,400
Intangible Assets, Net 261,265 263,649 266,109
Other Assets 802 819 837
----------- ----------- -----------
Total Noncurrent Assets 505,648 505,715 507,283
Total Assets $560,364 $558,634 $560,013
=========== =========== ===========
Liabilities and Stockholders' Equity:
Liabilities Not Subject to Compromise:
DIP Credit Facility $2,000 $0 $0
Accrued Reorganization Costs 6,249 5,289 5,163
Accrued Wages, Benefits and Payroll Taxes 13,411 13,275 12,033
Accounts Payable - Post Petition 8,204 5,048 1,703
Book Cash Overdrafts 3,830(5) 0 0
Accrued Interest 3,271 3,671 3,693
Accrued Expenses and Other Current Liabilities 30,988 34,704 35,744
Current Income Tax Payable 1,743 1,921 2,871
Advance Billings and Customer Deposits 29,065 29,375 28,554
Deferred Gain on Tower Sale 67,667 68,056 68,444
----------- ----------- -----------
Total Liabilities Not Subject To Compromise 166,427 161,338 158,205
Liabilities Subject to Compromise:
Accrued Wages, Benefits and Payroll Taxes 476 476 647
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 15,408 15,408 15,410
Accrued Expenses and Other Current Liabilities - Pre Petition 14,650 14,570 15,285
----------- ----------- -----------
Other Liabilities (0) 0 0
----------- ----------- -----------
Total Liabilities Subject To Compromise 953,793 953,714 954,602(1)(2)(3)
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 (74,481) (71,042) (67,418)
----------- ----------- -----------
Total Stockholders' Equity (556,388) (552,950) (549,326)
Less:
Treasury Stock (6,123) (6,123) (6,123)
----------- ----------- -----------
Total Stockholders' Equity (562,511) (559,073) (555,449)
Total Liabilities and Stockholders' Equity $560,364 $558,634 $560,013
=========== =========== ===========
</TABLE>
See Accompanying Notes
Page 6 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) General & Administrative expense in December 1998 includes an adjustment of
approximately $1.2 million to reduce the Company's allowance for doubtful
accounts. This adjustment relates to periods prior to December 1998.
(2) On October 26, 1998 5 non-operating direct or indirect subsidiaries (the
"Proximity Entities") filed for protection under Chapter 11 of the US Bankruptcy
Code. Prior to the filing, the Proximity entities' principal creditors reached
an agreement whereby pre-petition claims in the aggregate would not be settled
for more than the discontinued operation's assets. As a result, the Company has
reversed $8.1 million of remaining amounts reserved for losses related to these
companies.
(3) In accordance with AICPA Statement of Position 90-7 "Financial Reporting by
Entities in Reorganization under the Bankruptcy Code", in December 1998 the
Company reduced various liabilities subject to compromise by approximately
$10.5 million to reflect changes in estimated allowed claims.
(4) During January, the Company completed the sale of its minority interest in
Abacus Communications Partners, L.P., to Abacus Exchange Inc. for $1.4 million.
(5) 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.
<TABLE>
<CAPTION>
MobileMedia Corporation and Subsidiaries
Consolidated Statements Of Cash Flows
For The Months Ended February 28, 1999, January 31, 1999 and December 31, 1998
(Unaudited)
(in thousands)
February January December
1999 1999 1998
--------- --------- ---------
<S> <C> <C> <C>
Operating Activities
Net Income(Loss) ($3,438) ($3,624) $11,229
Adjustments To Reconcile Net Income(Loss) To Net Cash
Provided By (Used In) Operating Activities:
Depreciation And Amortization 9,272 9,295 9,353
Provision For Uncollectible Accounts And Returns 885 856 (240)(1)
Amortization of Deferred Gain on Sale of Tower Assets (389) (389) (389)
State & Federal Income Taxes 0 0 0
Write Down of Investment in Affiliate to Net Realizable Value 0 0 212 (4)
Recognized Gain On Sale Of Tower Assets 0 0 0
Reversal of Estimated Loss on Discontinued Operations 0 0 (8,120)(2)
Adjustment to Reduce Liabilities Subject to Compromise to
Estimated Allowed Claims 0 0 (10,461)(3)
Deferred Financings Fees, Net 304 304 304
Change In Operating Assets and Liabilities: Accounts Receivable (3,221) (2,000) (3,707)
Inventory 232 287 (595)
Prepaid Expenses And Other Assets 151 (494) (794)
Accounts Payable, Accrued Expenses and Other (272) 2,634 9,280
--------- --------- ---------
Net Cash Provided By (Used In) Operating Activities 3,523 6,868 6,072
Investing Activities
Construction And Capital Expenditures,
Including Net Change In Pager Assets (9,409) (9,430) (8,869)
Net Proceeds From the Sale of Investment in Abacus 0 1,400(4) 0
Net Proceeds From the Sale of tower assets 0 0 0
--------- --------- ---------
Net Cash Provided By (Used In) Investing Activities (9,409) (8,030) (8,869)
Financing Activities
Book Cash Overdrafts 3,830(5) 0 0
Payment to Chase Credit Facility 0 0 0
Borrowings (Repayments) of DIP Credit Facility 2,000 0 0
--------- --------- ---------
Net Cash Provided By (Used In) Financing Activities 5,830 0 0
Net Increase (Decrease) In Cash and Cash Equivalents (56) (1,162) (2,798)
Cash and Cash Equivalents At Beginning Of Period 56 1,218 4,016
--------- --------- ---------
Cash and Cash Equivalents At End Of Period ($0) $56 $1,218
========= ========= =========
</TABLE>
See Accompanying Notes
Page 11 of 17
