================================================================================
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, 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 30, 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 March 31, 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: May 4, 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 March 31, 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:
Senior Vice President/Chief Financial Officer
- --------------------------------- ---------------------------------------------
SIGNATURE OF RESPONSIBLE PARTY TITLE
David R. Gibson April 30, 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 March 31, 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 March 31, 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 March 31, 1999,
February 28, 1999 and January 31, 1999
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
March February January
1999 1999 1999
--------------- ------------- -----------------
<S> <C> <C> <C>
Paging Revenues
Service, Rents & Maintenance $33,312 $33,525 $33,795
Equipment Sales
Product Sales 1,622 1,655 1,916
Cost of Products Sold 1,086 1,094 1,335
--------------- ------------- -----------------
Equipment Margin 536 561 580
Net Revenue 33,848 34,086 34,375
Operating Expense
Service, Rents & Maintenance 9,107 9,045 8,926
Selling 5,091 4,344 4,701
General & Administrative 10,540 10,321 10,623
--------------- ------------- -----------------
Operating Expense Before Depr. & Amort. 24,738 23,709 24,250
EBITDA Before Reorganization and Restructuring Costs 9,110 10,377 10,125
Reorganization Costs 1,924 1,740 1,404
--------------- ------------- -----------------
EBITDA after Reorganization and Restructuring Costs 7,186 8,637 8,722
Depreciation 6,913 6,770 6,818
Amortization 2,489 2,502 2,477
Amortization of Deferred Gain (389) (389) (389)
--------------- ------------- -----------------
Total Depreciation and Amortization 9,013 8,883 8,906
Operating Income(Loss) (1,827) (247) (184)
Interest Expense 3,403 3,106 3,508
Reduction of Liabilities Subject to Compromise
to Estimated Allowed Claims 3,050 (1) 0 0
Other (Income)Expense (1,672)(2) 0 (69)
Income Taxes 123 85 0
--------------- ------------- -----------------
Net Income(Loss) ($633) ($3,438) ($3,624)
=============== ============= =================
</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 March 31, 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 March 31, 1999, February 28, 1999 and January 31, 1999
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
March February January
1999 1999 1999
-------------- --------------- ---------------
<S> <C> <C> <C>
Assets:
Current Assets:
Cash ($0) $0 $56
Accounts Receivable, Net 37,270 42,422 40,086
Inventory 1,609 1,673 1,905
Prepaid Expenses 5,261 5,761 6,018
Other Current Assets 4,900 4,860 4,853
-------------- --------------- ---------------
Total Current Assets 49,040 54,716 52,919
Noncurrent Assets:
Property and Equipment, Net 225,566 224,894 222,255
Deferred Financing Fees, Net 18,384 18,687 18,991
Intangible Assets, Net 258,793 261,265 263,649
Other Assets 784 802 819
-------------- --------------- ---------------
Total Noncurrent Assets 503,527 505,648 505,715
Total Assets $552,567 $560,364 $558,634
============== =============== ===============
Liabilities and Stockholders' Equity:
Liabilities Not Subject to Compromise:
DIP Credit Facility $5,000 $2,000 $0
Accrued Reorganization Costs 7,197 6,249 5,289
Accrued Wages, Benefits and Payroll Taxes 9,944 13,410 13,275
Accounts Payable - Post Petition 7,334 8,204 5,048
Book Cash Overdrafts 1,255 (1) 3,830 (1 0
Accrued Interest 3,566 3,271 3,671
Accrued Expenses and Other Current Liabilities 30,072 30,988 34,704
Current Income Tax Payable 1,200 1,743 1,921
Advance Billings and Customer Deposits 28,892 29,065 29,375
Deferred Gain on Tower Sale 67,278 67,667 68,056
-------------- --------------- ---------------
Total Liabilities Not Subject To Compromise 161,739 166,427 161,338
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 15,351 15,408 15,408
Accrued Expenses and Other Current Liabilities - Pre Petition 12,231 14,650 14,570
-------------- --------------- ---------------
Total Liabilities Subject To Compromise 951,317 953,793 953,714
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 (75,114) (74,481) (71,042)
-------------- --------------- ---------------
Total Stockholders' Equity (557,021) (556,388) (552,950)
Less:
Treasury Stock (6,123) (6,123) (6,123)
-------------- --------------- ---------------
Total Stockholders' Equity (563,144) (562,511) (559,073)
Total Liabilities and Stockholders' Equity $552,567 $560,364 $558,634
============== =============== ===============
</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.
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 March 31, 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.
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 March 31, 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) During January, the Company completed the sale of its minority interest in
Abacus Communications Parters, L.P., to Abacus Exchange Inc. for $1.4 million.
(2) 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.
(3) 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 March 31, 1999, February 28, 1999 and January 31, 1999
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
March February January
1999 1999 1999
------------- ------------- -------------
<S> <C> <C> <C>
Operating Activities
Net Income(Loss) ($633) ($3,438) ($3,624)
Adjustments To Reconcile Net Income(Loss) To Net Cash
Provided By (Used In) Operating Activities:
Depreciation And Amortization 9,402 9,272 9,295
Provision For Uncollectible Accounts And Returns 390 885 856
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 (3,050)(2) 0 0
Deferred Financings Fees, Net 304 304 304
Change In Operating Assets and Liabilities:
Accounts Receivable 4,762 (3,221) (2,000)
Inventory 64 232 287
Prepaid Expenses And Other Assets 460 151 (494)
Accounts Payable, Accrued Expenses and Other (7,980) (272) 2,634
------------- ------------- -------------
Net Cash Provided By (Used In) Operating Activities 3,330 3,523 6,868
Investing Activities
Construction And Capital Expenditures,
Including Net Change In Pager Assets (7,965) (9,409) (9,430)
Net Proceeds From the Sale of Investment in Abacus 0 0 1,400(1)
Net Loss From the Disposal of Fixed Assets 379 0 0
------------- ------------- -------------
Net Cash Provided By (Used In) Investing Activities (7,585) (9,409) (8,030)
Financing Activities
Book Cash Overdrafts 1,255(3) 3,830(3) 0
Borrowings (Repayments) of DIP Credit Facility 3,000 2,000 0
------------- ------------- -------------
Net Cash Provided By (Used In) Financing Activities 4,255 5,830 0
Net Increase (Decrease) In Cash and Cash Equivalents 0 (56) (1,162)
Cash and Cash Equivalents At Beginning Of Period 0 56 1,218
------------- ------------- -------------
Cash and Cash Equivalents At End Of Period $0 $0 $56
============= ============= =============
</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 March 31, 1999
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
================================================================================
ACCOUNTS RECEIVABLE AGING
- --------------------------------------------------------------------------------
$21,099,488 0 - 30 days old
----------------------------------------------------------------
13,109,772 31 - 60 days old
----------------------------------------------------------------
5,399,436 61 - 90 days old
----------------------------------------------------------------
10,253,315 91+ days old
----------------------------------------------------------------
49,862,011 TOTAL TRADE ACCOUNTS RECEIVABLE
----------------------------------------------------------------
(14,893,000) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
----------------------------------------------------------------
34,969,011 TRADE ACCOUNTS RECEIVABLE (NET)
----------------------------------------------------------------
2,301,125 OTHER NON-TRADE RECEIVABLES
----------------------------------------------------------------
$ 37,270,136 ACCOUNTS RECEIVABLE, NET
================================================================================
================================================================================
AGING OF POSTPETITION ACCOUNTS PAYABLE
- --------------------------------------------------------------------------------
0-30 31-60 61-90 91+
Days Days Days Days Total
- ------------------------------------------
ACCOUNTS PAYABLE $ 7,286,079 47,929 0 0 $7,334,008
================================================================================
Page 12 of 17
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF OPERATIONS, TAXES,
INSURANCE AND PERSONNEL
For the month ended March 31, 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 $ 2,208,373 $ 2,208,373 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------
FICA-EMPLOYEE 0 934,792 934,792 0 0
- ----------------------------------------------------------------------------------------------------------------------
FICA-EMPLOYER 147,720 1,952,956 1,863,301 237,375 0
- ----------------------------------------------------------------------------------------------------------------------
UNEMPLOYMENT 12,282 33,530 32,869 12,943 0
- ----------------------------------------------------------------------------------------------------------------------
INCOME 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------
TOTAL FEDERAL TAXES 160,002 5,129,651 5,039,335 250,318 0
======================================================================================================================
STATE AND LOCAL
======================================================================================================================
WITHHOLDING 37,451 357,807 357,807 37,451 0
- ----------------------------------------------------------------------------------------------------------------------
SALES 1,007,618 1,194,093 1,075,791 1,125,920 0
- ----------------------------------------------------------------------------------------------------------------------
UNEMPLOYMENT 53,605 174,110 165,397 62,318 0
- ----------------------------------------------------------------------------------------------------------------------
REAL PROPERTY 2,011,431 401,707 239,328 2,173,810 0
- ----------------------------------------------------------------------------------------------------------------------
OTHER 4,917,659 872,126 1,094,133 4,695,652 0
- ----------------------------------------------------------------------------------------------------------------------
TOTAL STATE AND LOCAL 8,027,764 2,999,843 2,932,456 8,095,151 0
======================================================================================================================
TOTAL TAXES $ 8,187,766 $ 8,129,494 $ 7,971,791 $ 8,345,469 $ 0
======================================================================================================================
</TABLE>
Page 13 of 17
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================================
PAYMENTS TO INSIDERS AND PROFESSIONALS
For the month ended March 31, 1999
========================================================================================================================
========================================================================================================================
INSIDERS
- -----------------------------------------------------------------------------------------------------------------------
Payee Name Position Salary/Bonus/ Reimbursable
Auto Allowance Expenses Total
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alvarez & Marsal Inc. - Chairman - Restructuring $ 54,167 $ 0 $ 54,167
Joseph A. Bondi
- -----------------------------------------------------------------------------------------------------------------------
Burdette, H. Stephen Senior VP Corporate (1) 102,000 1,411 103,411
Development and Senior VP
Operations
- -----------------------------------------------------------------------------------------------------------------------
Grawert, Ron Chief Executive Officer 4,402 35,171
30,769
- -----------------------------------------------------------------------------------------------------------------------
Gray, Patricia Secretary/VP and General (1) 74,646 0 74,646
Counsel
- -----------------------------------------------------------------------------------------------------------------------
Gross, Steven Executive VP Sales & (1) 113,769 1,868 115,637
Marketing
- -----------------------------------------------------------------------------------------------------------------------
Hilson, Debra Assistant Secretary (1) 22,848 0 22,848
- -----------------------------------------------------------------------------------------------------------------------
Pascucci, James Treasurer (1) 38,800 0 38,800
- -----------------------------------------------------------------------------------------------------------------------
Panzella, Vito VP / Controller (1) 42,112 0 42,112
- -----------------------------------------------------------------------------------------------------------------------
Witsaman, Mark Senior VP and Chief (1) 103,669 3,496 107,165
Technology Officer
- -----------------------------------------------------------------------------------------------------------------------
TOTAL PAYMENTS TO INSIDERS $ 593,957
========================================================================================================================
</TABLE>
(1) Includes payment of bonuses made in March 1999 in accordance with the
Company's 1998 Management Incentive Plan. Excludes 19 non-executive
officers of subsidiaries who were paid salaries, bonuses and reimbursable
expenses in the aggregate of $994,866.
Page 14 of 17
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
PAYMENTS TO INSIDERS AND PROFESSIONALS (Continued)
For the month ended March 31, 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 $ 951,707 $ 173,337 $1,517,558
Consultants to Debtor
- ----------------------------------------------------------------------------------------------------------------------
2. Latham & Watkins - Counsel to Debtor 1/30/97 45,247 181,226 197,737
- ----------------------------------------------------------------------------------------------------------------------
3. Alvarez & Marsal Inc.- Restructuring 1/30/97 - 147,523 253,454
Consultant to Debtor (2)
- ----------------------------------------------------------------------------------------------------------------------
4. Sidley & Austin - Bankruptcy Counsel to 1/30/97 552,990 378,348 1,108,291
Debtor
- ----------------------------------------------------------------------------------------------------------------------
5. Young, Conaway, Stargatt & Taylor - Delaware 1/30/97 11,175 25,914 22,323
Counsel to Debtor
- ----------------------------------------------------------------------------------------------------------------------
6. Wiley, Rein & Fielding - FCC Counsel to 1/30/97 222,032 98,993 352,017
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 89,024 34,632 221,641
Creditors' Committee
- ----------------------------------------------------------------------------------------------------------------------
10. Morris, Nichols, Arsht & Tunnell - Delaware 4/03/97 11,865 2,668 14,026
Counsel to the Creditors' Committee
- ----------------------------------------------------------------------------------------------------------------------
11. Paul, Weiss, Rifkind, Wharton & Garrison - 4/25/97 623 2,594 2,334
FCC Counsel to the Creditors' Committee
- ----------------------------------------------------------------------------------------------------------------------
12. The Blackstone Group LP - Financial Advisors 7/10/97 125,771 - 300,771
to Debtor
- ----------------------------------------------------------------------------------------------------------------------
13. Gerry, Friend & Sapronov, LLP. - Counsel to 10/27/97 12,837 - 112,299
Debtor
- ----------------------------------------------------------------------------------------------------------------------
TOTAL $2,023,271 1,045,235 $4,196,396
======================================================================================================================
</TABLE>
(1) Excludes invoices for fees and expenses through March 31, 1999 that were
received by the Debtors subsequent to March 31, 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 March 31, 1999
======================================================================================================================
SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID
NAME OF CREDITOR DUE MONTH POSTPETITION
======================================================================================================================
<S> <C> <C> <C>
The Chase Manhattan Bank - (Interest) $3,112,574 $ 3,112,574* $ 0
======================================================================================================================
</TABLE>
* Payment made on 03/31/99.
<TABLE>
<CAPTION>
======================================================================================================================
QUESTIONNAIRE
For the month ended March 31, 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 March 1999, the Company borrowed $3 million
under the DIP facility.
Page 16 of 17
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
INSURANCE
For the month ended March 31, 1999
======================================================================================================================
There were no changes in insurance coverage for the reporting period.
======================================================================================================================
======================================================================================================================
PERSONNEL
For the month ended March 31, 1999
- ----------------------------------------------------------------------------------------------------------------------
Full Time Part Time
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Total number of employees at beginning of period 2,876 20
- ----------------------------------------------------------------------------------------------------------------------
2. Number of employees hired during the period 8 4
- ----------------------------------------------------------------------------------------------------------------------
3. Number of employees terminated or resigned during the period 21 2
- ----------------------------------------------------------------------------------------------------------------------
4. Total number of employees on payroll at end of period 2,863 22
======================================================================================================================
</TABLE>
Page 17 of 17
