<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K / A
Amendment No. 1
Current Report
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 8, 1996
---------------
PEGASUS MEDIA & COMMUNICATIONS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-95042 23-2778525
-------- -------- ----------
(State of other jurisdiction of (Commission (IRS Employer
incorporation of organization) File Number) Identification Number)
c/o BDI Associates, L.P.; 100 Matsonford Road
5 Radnor Corporate Center; Suite 454, Radnor, PA 19087
------------------------------------------------ ------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (610) 341-1801
--------------
Not Applicable
--------------
(Former name or former address, if changed since last report)
<PAGE>
This amendment to Form 8-K is being filed solely for the purpose of providing
certain financial statements that were omitted from Item 7 (a) and 7 (b) of the
original Form 8-K.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
------------------------------------------------------------------
<TABLE>
<CAPTION>
(a) Financial Statements of Business Acquired
Page
----
<S> <C>
(i) WTLH, Inc.
Report of Independent Auditors F-1
Balance Sheets as of December 31, 1995 and 1994 F-2
Statements of Operations for the years ended December 31, 1995 and 1994 F-3
Statements of Capital Deficiency for the years ended December 31, 1995 and 1994 F-4
Statements of Cash Flows for the years ended December 31, 1995 and 1994 F-5
Notes to Consolidated Financial Statements F6-F11
(b) Pro Forma Financial Information Page
----
Pro Forma Combined Balance Sheet as of December 31, 1995 F-12
Pro Forma Combined Statements of Operations for the year ended December 31, 1995 F-13
</TABLE>
<TABLE>
<CAPTION>
(c) Exhibits:
Exhibit
- - -------
Number Description of Document
- - ------ -----------------------
<S> <C>
1 Asset Purchase Agreement, dated October 13, 1995, among WTLH, Inc. ("WTLH"), General
Management Consultants, Inc. ("GMC"), TV 57 Live-Oak Gainsville, Inc. ("TV 57"),
Paul Lansat, Renee Lansat and Pegasus Broadcast Television, Inc. ("PBT")
(Incorporated by reference to Exhibit A to Exhibit 2.1 to the Company's Registration
Statement or Form S-4, No. 33-95042 (the "Registation Statement")).
2 Agreement of Sale dated October 13, 1995, between Lansat Communications Inc. ("LCI")
and PBT (Incorporated by reference to Exhibit B to Exhibit 2.1 to the Company's
Registration Statement).
3 Modification Agreement, dated March 8, 1996, among WTLH, GMC, TV 57, LCI, Paul
Lansat, Renee Lansat, PBT, WTLH License Corp. ("License Corp.") and Pegasus
Communications Holdings, Inc. ("PCH"). (Exhibits, described in the agreement, are
omitted but will be furnished supplementally to the Commission on request.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(c) Exhibits (continued):
Exhibit
- - -------
Number Description of Document
- - ------ -----------------------
<S> <C>
4 Put-Call and Security Agreement, dated March 8, 1996, among WTLH, GMC, Paul
Lansat, Renee Lansat, License Corp., PBT and PCH. (Exhibits, described in the
agreement, are omitted but will be furnished supplementally to the Commission on
request.)
5 Time Brokerage Agreement, dated March 8, 1996, among GMC, WTLH and PCH (to be
assigned to a subsidiary of the Company).
6 Noncompetition Agreement, dated March 8, 1996, among Paul Lansat, Renee Lansat,
PCH, PBT and License Corp.
7 Noncompetition Agreement, dated March 8, 1996, among Frank Watson, PCH, PBT and
License Corp.
</TABLE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed below on its behalf by the
undersigned thereunto duly authorized.
By: /s/ Robert N. Verdecchio
--------------------------------------------
Robert N. Verdecchio, Senior Vice President,
Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: May 10, 1996
---------------------------------
<PAGE>
Report of Independent Accountants
To the Stockholders of
WTLH, Inc.
We have audited the accompanying balance sheet of WTLH, Inc. as of December 31,
1995 and 1994, and the related statements of operations, capital deficiency, and
cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of WTLH, Inc. as of December 31,
1995 and 1994, and the results of its operations and its cash flows for the year
then ended, in conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND LLP
--------------------------
COOPERS & LYBRAND LLP
Jacksonville, Florida
March 8, 1996
<PAGE>
WTLH, Inc.
Balance Sheets
December 31, 1995 and 1994
ASSETS 1995 1994
Current assets:
Cash $ 337,665 $ 190,582
Accounts receivable, less allowance for doubtful
accounts of $8,000 in 1995 and 1994,
respectively 673,434 623,317
Film rights 200,585 154,098
Prepaid expenses 4,475 6,925
Deferred income taxes 71,347 176,753
----------- -----------
Total current assets 1,287,506 1,151,675
Equipment, net 51,005 77,283
Building and equipment under capital leases, net 692,819 226,003
Film rights 262,022 216,745
Deferred income taxes 24,790 24,291
Deposits and other assets 8,992 11,914
----------- -----------
Total assets $ 2,327,134 $ 1,707,911
=========== ===========
LIABILITIES AND CAPITAL DEFICIENCY
Current liabilities:
Accounts payable $ 175,809 $ 148,449
Accrued interest due affiliates 180,953 237,360
Other accrued expenses 74,489 76,460
Current portion of long-term debt to affiliates 0 4,250
Current portion of capital lease obligations 13,543 20,049
Current portion of film rights payable 225,211 169,475
----------- -----------
Total current liabilities 670,005 656,043
Long-term liabilities:
Long-term debt to affiliates 531,181 610,257
Obligations under capital leases 740,635 259,970
Film rights payable 280,117 248,138
Subordinated debt 1,200,000 1,200,000
----------- -----------
Total liabilities 3,421,938 2,974,408
Shareholder deficiency:
Common stock, $1 par value, 1,000 shares
authorized, 100 shares issued and outstanding 100 100
Additional paid-in capital 900 900
Accumulated deficit (973,946) (1,145,639)
Receivable from affiliate (121,858) (121,858)
----------- -----------
Total capital deficiency (1,094,804) (1,266,497)
----------- -----------
Total liabilities and capital deficiency $ 2,327,134 $ 1,707,911
=========== ===========
See accompanying notes to financial statements.
<PAGE>
WTLH, Inc.
Statements of Operations
for the years ended December 31, 1995 and 1994
1995 1994
Revenues:
Broadcasting revenue, net of agency commissions
of $585,124 and $537,810 in 1995 and 1994,
respectively $ 2,313,467 $ 2,256,174
Barter broadcasting revenue 470,589 310,208
----------- -----------
Total revenues 2,784,056 2,566,382
----------- -----------
Operating expenses:
Technical and operations 320,215 278,312
Programming, including amortization of $199,260
and $194,993 in 1995 and 1994, respectively 253,959 242,769
Barter programming 470,589 310,208
General and administrative 440,370 401,675
Promotion 346,529 237,419
Sales 300,903 279,031
Depreciation 107,197 135,474
Management fee 40,500 55,600
----------- -----------
Total operating expenses 2,280,262 1,940,488
----------- -----------
Income from operations 503,794 625,894
Interest expense (163,111) (135,064)
Other expenses, net (63,743) 0
----------- -----------
Income before income taxes 276,940 490,830
Provision for income taxes 105,247 190,000
----------- -----------
Net income $ 171,693 $ 300,830
=========== ===========
See accompanying notes to financial statements.
<PAGE>
WTLH, Inc.
Statements of Capital Deficiency
for the years ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
Additional Receivable Total
Common Paid-In From Capital
Stock Capital Deficit Affiliate Deficiency
------ ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1993 $ 100 $ 900 $(1,446,469) $ (121,858) $ (1,567,327)
Net income 0 0 300,830 0 300,830
----- ----- ----------- ---------- ------------
Balance, December 31, 1994 100 900 (1,145,639) (121,858) (1,266,497)
Net income 0 0 171,693 0 171,693
----- ----- ----------- ---------- ------------
Balance, December 31, 1995 $ 100 $ 900 $ (973,946) $ (121,858) $ (1,094,804)
===== ===== =========== ========== ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
WTLH, Inc.
Statements of Cash Flows
for the years ended December 31, 1995 and 1994
1995 1994
Cash flows from operating activities:
Net income $ 171,693 $ 300,830
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 107,197 135,474
Deferred income taxes 104,907 186,243
Loss on sale of fixed assets 2,853 0
Change in assets and liabilities:
Accounts receivable (50,117) (191,338)
Film rights (91,764) 106,738
Prepaid expenses 2,450 675
Other assets 2,922 276
Accounts payable 27,360 (104,678)
Accrued interest due affiliates (56,407) 27,172
Other accrued expenses (1,973) (20,109)
Film rights payable 87,715 (84,401)
--------- ---------
Net cash provided by operating
activities 306,836 356,882
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment (28,311) (34,973)
Proceeds from sale of vehicle 2,723 0
--------- ---------
Net cash used in investing
activities (25,588) (34,973)
--------- ---------
Cash flows from financing activities:
Principal payments on long-term debt to
affiliates (83,324) (108,586)
Payments made under capital leases (50,841) (16,426)
--------- ---------
Net cash used in financing
activities (134,165) (125,012)
--------- ---------
Net increase in cash 147,083 196,897
Cash (overdraft) at beginning of year 190,582 (6,315)
--------- ---------
Cash at end of year $ 337,665 $ 190,582
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 224,404 $ 103,287
========= =========
Cash paid for income taxes $ 7,757 $ 0
========= =========
Supplemental Schedule of Noncash Investing and
Financing Activities:
Capital lease obligation incurred for building $ 525,000 $ 0
========= =========
See accompanying notes to financial statements.
<PAGE>
WTLH, Inc.
Notes to Financial Statements
1. Summary of Significant Accounting Policies:
Organization - WTLH, Inc. (the Company) was formed in 1988 to own and operate
a broadcast television station, WTLH, located in Tallahassee, Florida. The
station is a Fox Network affiliate.
Property and Equipment - Property and equipment are stated at cost less
accumulated depreciation. Major renewals and betterments are capitalized.
Maintenance and repairs are expensed as incurred.
Depreciation of property and equipment is computed using principally
accelerated methods based upon the following estimated useful lives:
Transmitter and studio equipment 5-7 years
Tower & Building 20 years
Computer equipment 5 years
Furniture and fixtures 7 years
Other equipment 5-7 years
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Film Rights - The Company enters into agreements to show motion pictures and
syndicated programs on television. Only the rights and associated liabilities
for those films and programs currently available for showing are recorded on
the Company's books. These rights are recorded at cost, the gross amount of
the contract liability. Program rights are amortized over the license period,
which approximates amortization based on the estimated number of showings
during the contract period, using the straight-line method except where an
accelerated method would produce more appropriate matching of cost with
revenue. Payments for the contracts are made pursuant to contractual terms
over periods which are generally shorter than the license periods.
Programming - The Company obtains a portion of its programming, including
presold advertisements, through its network affiliation agreement with Fox
Broadcasting, Inc. ("Fox"), and also through independent producers. The
Company does not make any direct payments for network and certain independent
producers' programming. For broadcasting network programming, the Company
receives payments from Fox, which totaled $63,023 and $38,359 for the years
ended December 31, 1994 and 1995, respectively. For running independent
producers' programming, the Company receives no direct payments. Instead, the
Company retains a portion of the available advertisement spots to sell on its
own account, which are recorded as broadcasting revenue. Management estimates
<PAGE>
Notes to Financial Statements, Continued
1. Summary of Significant Accounting Policies, Continued:
the value, and related programming expense, of the presold advertising
included in the independent producers' programming to be $470,589 and
$310,208 for the years ended December 31, 1995 and 1994, respectively. These
amounts are presented gross as barter broadcasting revenue and barter
programming expense in the accompanying financial statements.
Income Taxes - Deferred income tax assets are recognized for the expected
future consequences of events that have been included in the financial
statements and income tax returns. Deferred tax assets and liabilities are
determined based on the difference between the financial statement and tax
bases of assets and liabilities using enacted tax rates in effect for the
year in which the differences are expected to reverse.
2. Property and Equipment:
The major classes of property and equipment consist of the following:
1995 1994
Transmitter and studio equipment $718,958 $731,962
Computer equipment 25,019 40,772
Furniture and fixtures 27,914 27,914
Other equipment 63,827 56,141
-------- --------
835,718 856,789
Less accumulated depreciation 784,713 779,506
-------- --------
$ 51,005 $ 77,283
======== ========
Building and equipment under capital leases consist of the following:
1995 1994
Building $525,000 $ 0
Transmitter and studio equipment 38,400 38,400
Tower 210,055 210,055
Computer equipment 41,300 41,300
Furniture and fixtures 7,950 7,950
Vehicle 0 8,952
-------- --------
822,705 306,657
Less accumulated depreciation 129,886 80,654
-------- --------
$692,819 $226,003
======== ========
Depreciation expense amounted to $107,197 and $135,474 for December 31, 1995
and 1994, respectively.
<PAGE>
Notes to Financial Statements, Continued
3. Long-Term Debt to Affiliates:
The following is a summary of long-term debt to affiliates:
1995 1995
Note payable to affiliated company
through common ownership, interest at
12.97%, due at the earlier of August
12, 1999 or the date the station is
refinanced or sold, collateralized by
an assignment of outstanding accounts
receivable $418,623 $453,673
Note payable to stockholders, interest
at 12.97%, due upon sale of the
station 112,558 156,584
Other 0 4,250
-------- --------
Total 531,181 614,507
Less current portion 0 4,250
-------- --------
Long-term debt to affiliates $531,181 $610,257
======== ========
Scheduled maturities of long-term debt to affiliates, exclusive of $112,558
for sale of the station, are as follows:
1999 $418,623
========
4. Leases:
The Company leases a broadcasting tower, a vehicle and computer and other
equipment which have been accounted for as capital leases. The following is a
summary of capital lease obligations at December 31:
Lease of a building with stockholders,
interest at 10.4%, payable in varying
monthly installments through January
1, 2014. $497,634 $ 0
Lease of a broadcasting tower with an
affiliated company through common
ownership, interest at 12.97%, payable
in varying monthly installments
through October 2010. 210,055 210,055
Lease of equipment, interest at 14.47%,
payable in monthly installments of
$1,114 through August 1998. 25,170 33,283
Leases of computer equipment, interest
ranging from 12.05% to 17.42%, payable
in monthly installments ranging from
$166 to $725 through April 1998. 19,329 27,653
Lease of a vehicle, interest at 9%,
payable in monthly installments of
$285 through July 1996. 0 4,776
<PAGE>
4. Leases, Continued:
1995 1994
Lease of telephone equipment, interest
at 14.33%, payable in monthly
installments of $227 through January
1997. 1,990 4,252
-------- --------
Total 754,178 280,019
Less current portion (13,543) (20,049)
-------- --------
Long-term portion $740,635 $259,970
======== ========
The Company also leases its studios, the land surrounding its tower from an
affiliated company, three vehicles from its stockholders and various other
equipment under non-cancelable operating leases. The leases expire at various
dates through 2014. Rent expense under non-cancelable operating leases
totaled $166,680 and $141,684 for the years ended December 31, 1995 and 1994,
respectively.
Future minimum payments under capital leases and non-cancelable operating
leases consist of the following:
Capital Operating
Year ended December 31: Leases Leases
--------- ----------
1996 $ 97,613 $151,728
1997 102,767 63,575
1998 94,240 46,495
1999 88,211 35,321
2000 92,428 36,387
Thereafter 1,473,638 634,110
---------- --------
Total lease payments 1,948,897 967,616
Less amount representing interest 1,194,719 0
---------- --------
Present value of net minimum lease payments $ 754,178 $967,616
========== ========
5. Film Rights Payable:
Commitments for film rights payable are as follows for years ended December
31:
1996 $225,211
1997 143,208
1998 93,668
1999 40,457
2000 2,784
--------
$505,328
========
The Company has entered into agreements totaling $154,500 as of December 31,
1995, which are not yet available for showing at December 31, 1995, and,
accordingly, are not recorded on the Company's financial statements.
<PAGE>
Notes to Financial Statements, Continued
6. Income Taxes:
The provision for income taxes is summarized as follows at December 31:
1995 1994
Current $ 0 $ 3,757
Deferred 105,247 186,243
-------- --------
$105,247 $190,000
======== ========
The differences between the federal statutory tax rate and the Company's
effective tax rate are as follows at December 31:
1995 1994
Federal income tax at federal statutory rate 34.0% 34.0
State income taxes, net of federal
income tax benefit 3.6 3.6
Other 0.6 1.1
---- ----
38.2% 38.7%
==== ====
The components of net deferred tax assets are as follows:
1995 1994
Current deferred tax assets:
Net operating loss benefits $ 14,044 $ 80,714
Accrued interest due affiliates 54,293 92,869
Allowance for doubtful accounts 3,010 3,170
--------- ---------
71,347 176,753
Long-term deferred tax assets:
Program rights amortization 24,790 24,291
--------- ---------
$ 96,137 $ 201,044
========= =========
The Company has recorded a deferred tax asset of $96,137, including the
benefit of approximately $37,000 in loss carryforwards, which expire in 2006.
Realization is dependent on generating sufficient taxable income prior to
expiration of the loss carryforwards. Although realization is not assured,
management believes it is more likely than not that all of the deferred tax
asset will be realized. The amount of the deferred tax asset considered
realizable, however, could be reduced in the near term if estimates of future
taxable income during the carryforward period are reduced.
7. Related Party Transactions:
The Company has a $121,858 receivable from an affiliated company for
reimbursement of certain costs. The receivable is non interest bearing with
no fixed terms of repayment. The receivable has been presented as a reduction
of stockholders' equity in the accompanying financial statements.
<PAGE>
Notes to Financial Statements, Continued
7. Related Party Transactions, Continued:
The Company paid $151,500 (including $111,000 of payments for lease
obligations which have been reclassified for financial statement presentation
purposes) and $55,600 in management fees to an affiliated company through
common ownership for the years ended December 31, 1995 and 1994,
respectively.
The Company made payments to stockholders and affiliates under leases as
described in Note 4 aggregating $138,236 and $45,777 for the years ended
December 31, 1995 and 1994, respectively.
8. Financial Instruments:
Concentrations of Credit Risk - Certain financial instruments potentially
subject the Company to concentrations of credit risk. These financial
instruments consist primarily of accounts receivable. Concentrations of
credit risk with respect to receivables are limited due to the large number
of customers comprising the Company's customer base and their dispersion
across different business and geographic regions of which approximately 60%
was related to national accounts.
Disclosures About Fair Value of Financial Instruments - The following methods
and assumptions were used to estimate the fair value of each class of
financial instruments:
Cash: The carrying amount approximates fair value.
Long-Term Debt: The fair value of the Company's long-term debt is estimated
using discounted cash flow analysis, based on the incremental borrowing
rates available to the Company.
9. Subordinated Debt:
The $1,200,000 subordinated debt is non-interest bearing and is payable to
the Company's former stockholder under certain circumstances. The debt is
subordinate to up to $1,500,000 of institutional or stockholder loans and is
collateralized by all tangible and intangible personal property of the
Company.
In connection with the sale of the Company (see Note 10) a settlement
agreement was entered into that reduced the outstanding liability to
$521,100, which was paid in March 1996.
10. Subsequent Event:
On March 8, 1996, the principal assets of the company was sold to Pegasus
Media Communications, Inc. for $5 million in cash, including payments under
noncompetition agreements with the owners and an employee of the station.
<PAGE>
Pegasus Media & Communications, Inc.
Pro Forma Combined Balance Sheet
December 31, 1995
<TABLE>
<CAPTION>
Portland Broadcasting, Inc. WTLH, Inc.
Pegasus --------------------------- ------------------------
ASSETS Actual Actual(a) Adjustments(b) Actual(c) Adjustments Pro Forma
------- --------------------------- ------------------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $11,967 ($ 9,720) $ 2,247
Restricted cash 9,881 9,881
Accounts receivable, net 4,881 $ 759 4 5,644
Current portion of program rights 932 932
Inventory 1,101 1,101
Prepaid expenses and other current assets 340 43 272 17 672
Property and equipment, net 16,264 567 2,146 18,977
Intangible assets and other assets, net 48,118 9,990 5,909 64,017
Program rights 1,933 116 2,048
------- ---------------------------- ----------------------- --------
Total assets $95,417 $1,484 $ 542 $8,076 $105,519
======= ============================ ======================== ========
LIABILITIES AND TOTAL EQUITY
Notes payable $ 164 $ 164
Current portion of long-term debt 240 6,861 (6,861) 240
Current liabilities 5,005 2,098 (1,476) 26 5,653
Accrued interest 5,174 1,502 (1,502) 5,174
Current portion of program rights payable 1,142 1,243 (838) 1,547
Long-term debt, net 82,234 18 982 8,050 91,284
Program rights payable 1,421 24 (24) 1,421
Deferred taxes 212 212
Total equity (deficiency) (175) (10,262) 10,262 (175)
------- ---------------------------- ----------------------- --------
Total liabilities and equity $95,417 $1,484 $ 542 $8,076 $105,519
======= ============================ ======================== ========
</TABLE>
(a) Portland Broadcasting, Inc. balance sheet is recorded as of January 29,
1996, the acquisition date of the Company.
(b) To record the acquisition of 100% of the stock of Portland Broadcasting,
Inc., the payoff of substantially all of the liabilities and the $1
million draw on the Company's credit facility.
(c) WTLH, Inc. balance sheet is recorded as of March 8, 1996, the acquisiiton
date.
<PAGE>
Pegasus Media & Communications, Inc.
Pro Forma Combined Statement of Operations
Year Ended December 31, 1995
<TABLE>
<CAPTION>
Portland Broadcasting, Inc. WTLH, Inc.
Pegasus --------------------------- ------------------------
Actual Actual Adjustments Actual Adjustments Pro Forma
------- --------------------------- ------------------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues:
Television $19,974 $4,409 $58 $2,784 $81 (a) $27,306
Cable 10,606 10,606
Satellite 1,469 1,469
------- ----------------------------- ----------------------- --------
Total net revenues 32,049 4,409 58 2,784 81 39,381
------- ----------------------------- ----------------------- --------
Operating expenses:
Television 13,980 3,441 2,133 (111)(b) 19,443
Cable 5,791 5,791
Satellite 1,379 1,379
Incentive compensation 528 528
Management fees 1,770 147 81 40 99 (c) 2,138
Depreciation and amortization 8,674 212 250 107 580 (d) 9,823
------- ----------------------------- ----------------------- --------
Income (loss) from operations (73) 609 (273) 504 (487) 280
Interest expense (8,795) (1,138) 251 (163) (551)(e) (10,397)
Other income (expenses), net 326 (542) 542 (64) 64 (f) 326
------- ----------------------------- ----------------------- --------
Loss before income taxes and
extraordinary items (8,542) (1,071) 519 277 (975) (9,791)
Provision for income taxes (30) (105) (135)
------- ----------------------------- ----------------------- --------
Loss before extraordinary items (8,572) (1,071) 519 172 (975) (9,927)
Extraordinary gain from
extinguishment of debt, net 10,210 10,210
------- ----------------------------- ----------------------- --------
Net income $ 1,638 ($1,071) $519 $172 ($975) $ 284
======= ============================= ======================== ========
Income (loss) per share:
Loss before extraordinary items ($51.73) ($6.46) $3.13 $1.04 ($5.88) ($59.91)
Extraordinary gain 61.62 61.62
------- ----------------------------- ----------------------- --------
Net income $9.88 ($6.47) $3.13 $1.04 ($5.88) $1.71
======= ============================= ======================== ========
Weighted average shares outstanding 165,692 165,692 165,692 165,692 165,692 165,692
======= ============================= ======================== ========
</TABLE>
(a) To reduce the commission rate paid by WLTH, Inc. ("WLTH") to its national
advertising sales representative to the commission rate specified in the
Company's contract.
(b) To eliminate affiliated lease payments on property acquired in connection
with the acquisition of WTLH.
(c) To adjust management fees to equal to five percent of total net revenues as
provided in the Management Agreement.
(d) To adjust depreciation and amortization for all assets recorded by the
Company in connection with the acquisition of WTLH.
(e) To remove interest expense on the WLTH debt and record interest expense on
the $5 million draw on the Company's credit facility and the $3 million
nonrecourse deferred purchase obligation of an unrestricted subsidiary of
the Company incurred in connection with the acquisition of WTLH.
(f) To eliminate nonrecurring, nonoperating expenses.
