UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 5, 2010
CTM MEDIA HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
| | | | | |
| Delaware | | 1-16371 | | 22-3415036 |
| (State or other jurisdiction of Incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
| | | |
| 11 Largo Drive South, Stamford, Connecticut | | 06907 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (203) 323-5161
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.01. Completion of Acquisition or Disposition of Assets.
On May 5, 2010 CTM Media Holdings, Inc. (the “Registrant”), consummated the sale of the assets (excluding the working capital) of its subsidiary, Beltway Acquisition Corporation, utilized in the operation of its WMET radio station (the “Sale”) to Huffines Media, LLC and an affiliate of Huffines (“Huffines”). The purchase price was $4 million in a combination of cash and a promissory note of the buyer that is secured by the assets sold. $1.3 million of the purchase price was paid in cash and the remainder in the form of a two year promissory, which may be extended in part to three years at the option of the buyer. A copy of the Asset Purchase Agreement was filed with the Registrant’ s Form 8-K filed with the Securities and Exchange Commission on February 25, 2010 and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On May 5, 2010, the Registrant issued a press release announcing the consummation of the sale of its WMET radio station described in Item 2.01 above. The press release is being furnished hereto as Exhibit 99.1 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of such section, nor shall such information be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(b) Proforma Financial Information
(d) Exhibits
| 99.1 | Press Release issued by Registrant, dated May 5, 2010. |
| | |
CTM MEDIA HOLDINGS, INC.
INDEX TO UNAUDITED PROFORMA INFORMATION
| | | Page |
| Proforma Condensed Consolidated Financial Statements – Basis of Presentation | | F-2 |
| | | |
| Proforma Condensed Consolidated Balance Sheet as of January 31, 2010 | | F-3 |
| | |
| Proforma Condensed Consolidated Statement of Operations for the six months ended January 31, 2010 | | F-4 |
| | |
| Proforma Condensed Consolidated Statement of Operations for the year ended July 31, 2009 | | F-5 |
| | |
| Proforma Condensed Consolidated Statement of Operations for the year ended July 31, 2008 | | F-6 |
| | |
| Notes and Management’s Assumptions to Proforma Condensed Consolidated Financial Information | | F-7 |
CTM MEDIA HOLDINGS, INC.
PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
(unaudited)
The proforma condensed consolidated balance sheet as of January 31, 2010, and the unaudited proforma condensed consolidated statements of operations for the six months ended January 31, 2010, and for the fiscal years ended July 31, 2009, and 2008, are based on the historical financial statements of the Registrant.
The proforma condensed consolidated balance sheet as of January 31, 2010, is presented as if the disposition of the assets sold, the receipt of the $1.3 million cash proceeds less $160,000 in broker commission and the $2.7 million promissory note by the Registrant occurred in its entirety on January 31, 2010.
The proforma condensed consolidated statements of operations for the six months ended January 31, 2010, and for the fiscal years ended July 31, 2009 and 2008, are presented as if the disposition of the assets sold and the receipt of the proceeds by the Registrant occurred on August 1, 2007 (the beginning of fiscal 2008).
The proforma condensed consolidated financial statements should be read in conjunction with the historical financial statements and notes related thereto appearing in the Registrant’s Form 10-K for the year ended July 31, 2009 and its Form 10-Q for the quarter ended January 31, 2010.
Preparation of the proforma information was based on assumptions considered appropriate by the Registrant’s management. The proforma financial information is unaudited and is not necessarily indicative of the results which would have occurred if the transactions described above had been consummated on August 1, 2007 for the proforma condensed consolidated statements of operations and on January 31, 2010 for the proforma condensed consolidated balance sheet, nor does it purport to represent the future financial position and the results of operations for future periods. In management’s opinion, all adjustments necessary to reflect the effects of the transaction listed above have been made.
CTM MEDIA HOLDINGS, INC.
PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JANUARY 31, 2010
(in thousands)
(unaudited)
| | | | | | | | | | | |
| Assets | | | | | | | | | | |
| Current assets: | | | | | | | | | | |
Cash and cash equivalents | | $ | 8,746 | | | $ | 1,140 | | (A) | | $ | 9,886 | |
Short term investment | | | 1,028 | | | | | | | | | 1,028 | |
Trade accounts receivable, net | | | 2,381 | | | | | | | | | 2,381 | |
Inventory | | | 1,394 | | | | | | | | | 1,394 | |
Prepaid expenses | | | 1,057 | | | | | | | | | 1,057 | |
Total current assets | | | 14,606 | | | | | | | | | 15,746 | |
Property and equipment, net | | | 3,882 | | | | (1,763 | ) | (B) | | | 2,119 | |
Licenses and other intangibles, net | | | 534 | | | | (499 | ) | (B) | | | 35 | |
Note receivable | | | — | | | | 2,700 | | (A) | | | 2,700 | |
Other assets | | | 184 | | | | | | | | | 184 | |
Total assets | | $ | 19,206 | | | | | | | | $ | 20,784 | |
| Liabilities and stockholders’ equity | | | | | | | | | | | | | |
| Current liabilities: | | | | | | | | | | | | | |
Trade accounts payable | | $ | 816 | | | | | | | | $ | 816 | |
Accrued expenses | | | 2,510 | | | | | | | | | 2,510 | |
Deferred revenue | | | 1,332 | | | | | | | | | 1,332 | |
Capital lease obligations—current portion | | | 227 | | | | | | | | | 227 | |
Other current liabilities | | | 716 | | | | | | | | | 716 | |
Total current liabilities | | | 5,601 | | | | | | | | | 5,601 | |
Capital lease obligations—long-term portion | | | 401 | | | | | | | | | 401 | |
Total liabilities | | | 6,002 | | | | | | | | | 6,002 | |
| Commitments and contingencies | | | | | | | | | | | | | |
| Stockholders’ equity: | | | | | | | | | | | | | |
| CTM Media Holdings, Inc. stockholders’ equity: | | | | | | | | | | | | | |
| Preferred stock, $.01 par value; authorized shares—10,000; no shares issued | | | — | | | | | | | | | — | |
| Class A common stock, $.01 par value; authorized shares—35,000; 1,285 shares issued and 1,106 shares outstanding at January 31, 2010 at Jaunuary 31,2010 | | | 13 | | | | | | | | | 13 | |
| Class B common stock, $.01 par value; authorized shares—65,000; 6,923 shares issued and 6,129 shares outstanding at January 31, 2010 | | | 69 | | | | | | | | | 69 | |
| Class C common stock, $.01 par value; authorized shares—15,000; 1,091 shares issued and outstanding at January 31, 2010 | | | 11 | | | | | | | | | 11 | |
Additional paid-in capital | | | 60,903 | | | | | | | | | 60,903 | |
| Treasury Stock, at cost, consisting of 179 shares of shares of Class A and 794 shares of Class B | | | (1,070 | ) | | | | | | | | (1,070 | ) |
Accumulated other comprehensive income | | | 124 | | | | | | | | | 124 | |
Accumulated deficit | | | (47,684 | ) | | | 1,578 | | (C) | | | (46,106 | ) |
Total CTM Media Holdings, Inc. stockholders’ equity | | | 12,366 | | | | | | | | | 13,944 | |
Noncontrolling interests | | | 838 | | | | | | | | | 838 | |
Total stockholders’ equity | | | 13,204 | | | | | | | | | 14,782 | |
Total liabilities and stockholders’ equity | | $ | 19,206 | | | | | | | | $ | 20,784 | |
CTM MEDIA HOLDINGS, INC.
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 2010
(in thousands, except per share data)
(unaudited)
| | | | | | Proforma | | | | | |
| | | | | | | | | | | |
Revenues | | $ | 14,949 | | | $ | 351 | | (D) | | $ | 14,598 | |
| Costs and expenses: | | | | | | | | | | | | | |
Direct cost of revenues (exclusive of depreciation and amortization) | | | 6,982 | | | | | | | | | 6,982 | |
Selling, general and administrative | | | 7,082 | | | | 365 | | (D) | | | 6,717 | |
Depreciation and amortization | | | 547 | | | | 91 | | (D) | | | 456 | |
Bad debt | | | 201 | | | | 147 | | (D) | | | 54 | |
Total costs and expenses | | | 14,812 | | | | | | | | | 14,209 | |
Income from operations | | | 137 | | | | | | | | | 389 | |
Interest expense, net | | | (60 | ) | | | (2 | ) | (D) | | | (58 | ) |
Other expense, net | | | (4 | ) | | | | | | | | (4 | ) |
Income before income taxes | | | 73 | | | | | | | | | 327 | |
Provision for income taxes | | | (123 | ) | | | | | | | | (123 | ) |
Net (loss) income | | | (50 | ) | | | | | | | | 204 | |
| | | | | | | | | | | | | | |
Less: net income attributable to noncontrolling interests | | | (151 | ) | | | | | | | | (151 | ) |
Net (loss) income attributable to CTM Media Holdings, Inc. | | | (201 | ) | | | | | | | | 53 | |
| | | | | | | | | | | | | | |
| (Loss) income per share from continuing operations: | | | | | | | | | | | | | |
Basic and diluted: | | | (0.03 | ) | | | | | | | | 0.01 | |
| | | | | | | | | | | | | | |
| Weighted-average number of shares used in calculation of loss per share from continuing operations: | | | | | | | | | | | | | |
Basic | | | 6,539 | | | | | | (E) | | | 6,539 | |
Diluted | | | 6,539 | | | | | | | | | 7,832 | |
CTM MEDIA HOLDINGS, INC.
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2009
(in thousands, except per share data)
(unaudited)
| | | | | | | | | | | |
| | | | | | | | | | | |
Revenues | | $ | 33,683 | | | $ | 1,168 | | (D) | | $ | 32,515 | |
| Costs and expenses: | | | | | | | | | | | | | |
| Direct cost of revenues (exclusive of depreciation and amortization) | | | 14,640 | | | | | | | | | 14,640 | |
Selling, general and administrative | | | 15,707 | | | | 1,129 | | (D) | | | 14,578 | |
Depreciation and amortization | | | 1,438 | | | | 407 | | (D) | | | 1,031 | |
Bad debt | | | 1,003 | | | | 356 | | | | | 647 | |
Impairment and severance charges | | | 33,335 | | | | 1,211 | | | | | 32,124 | |
Total costs and expenses | | | 66,123 | | | | | | | | | 63,020 | |
Loss from operations | | | (32,440 | ) | | | | | | | | (30,505 | ) |
Interest expense, net | | | (53 | ) | | | (1 | ) | (D) | | | (52 | ) |
Other income, net | | | 8 | | | | | | | | | 8 | |
Loss before income taxes | | | (32,485 | ) | | | | | | | | (30,549 | ) |
Provision for income taxes | | | (145 | ) | | | | | | | | (145 | ) |
Net loss | | | (32,630 | ) | | | | | | | | (30,694 | ) |
Less: net income attributable to noncontrolling interests | | | (1,230 | ) | | | | | | | | (1,230 | ) |
Net loss attributable to CTM Media Holdings, Inc. | | | (33,860 | ) | | | | | | | | (31,924 | ) |
| | | | | | | | | | | | | | |
| Loss per share from continuing operations: | | | | | | | | | | | | | |
Basic and diluted: | | $ | (5.07 | ) | | | | | | | $ | (4.78 | ) |
| | | | | | | | | | | | | | |
| Weighted-average number of shares used in calculation of loss per share from continuing operations: | | | | | | | | | | | | | |
Basic and diluted | | | 6,684 | | | | | | (E) | | | 6,684 | |
CTM MEDIA HOLDINGS, INC.
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2008
(in thousands, except per share data)
(unaudited)
| | | | | | | | | | | |
| | | | | | | | | | | |
Revenues | | $ | 32,626 | | | $ | 1,167 | | (D) | | $ | 31,459 | |
| Costs and expenses: | | | | | | | | | | | | | |
| Direct cost of revenues (exclusive of depreciation and amortization) | | | 12,566 | | | | | | | | | 12,566 | |
Selling, general and administrative | | | 18,277 | | | | 1,362 | | (D) | | | 16,915 | |
Depreciation and amortization | | | 2,078 | | | | 677 | | (D) | | | 1,401 | |
Bad debt | | | 472 | | | | 218 | | (D) | | | 254 | |
Impairment and severance charges | | | 3,683 | | | | 3,480 | | (D) | | | 203 | |
Total costs and expenses | | | 37,076 | | | | | | | | | 31,339 | |
(Loss) income from operations | | | (4,450 | ) | | | | | | | | 120 | |
Interest income, net | | | 57 | | | | (2 | ) | (D) | | | 59 | |
Other (expense) income, net | | | (99 | ) | | | 15 | | (D) | | | (114 | ) |
(Loss) income before income taxes | | | (4,492 | ) | | | | | | | | 65 | |
Provision for income taxes | | | (457 | ) | | | 1 | | (D) | | | (458 | ) |
Net loss | | | (4,949 | ) | | | | | | | | (393 | ) |
Less: net income attributable to noncontrolling interests | | | (378 | ) | | | | | | | | (378 | ) |
Net loss attributable to CTM Media Holdings, Inc. | | | (5,327 | ) | | | | | | | $ | (771 | ) |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Loss per share from continuing operations: | | | | | | | | | | | | | |
| Basic and diluted: | | $ | (0.80 | ) | | | | | | | $ | (0.12 | ) |
| | | | | | | | | | | | | | |
| Weighted-average number of shares used in calculation of loss per share from continuing operations: | | | | | | | | | | | | | |
Basic and diluted | | | 6,684 | | | | | | (E) | | | 6,684 | |
CTM MEDIA HOLDINGS, INC.
NOTES AND MANAGEMENT’S ASSUMPTIONS
TO THE PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| 1. | The following is a description of the proforma adjustments to the historical condensed consolidated financial statements: |
| | (A) | The net increase in cash and cash equivalents consists of the estimated net cash proceeds from the disposition of WMET of $1.3 million less $160,000 in broker commission and the note receivable of $2.7 million. |
| | (B) | Reflects the removal of the assets of WMET of $2.3 million, as if the sale was consummated on January 31, 2010. |
| | (C) | Accumulated deficit has been adjusted for an estimated gain of $1.6 million from the sale of WMET as if the sale occurred on January 31, 2010. |
| | (D) | Reflects the removal of the results of operations of WMET as if the sale was consummated on August 1, 2007 (the beginning of fiscal 2008). |
| | (E) | The earnings (loss) per share for the periods prior to the spin-off of CTM Holdings were calculated as if the number of shares outstanding at the spin-off were outstanding during those periods. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | |
| CTM MEDIA HOLDINGS, INC. |
| | |
| By: | | /s/ Leslie Rosner |
| | | Name: Leslie Rosner |
| | | Title: Chief Financial Officer and Treasurer |
Dated: May 7, 2010
EXHIBIT INDEX
Exhibit Number | | Description |
| | | |
| | | |
| 99.1 | | Press Release issued by Registrant, dated May 5, 2010. |
5
