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: February 24, 2005
(Date of earliest event reported)
EMAK Worldwide, Inc.
(exact name of registrant as specified in its charter)
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| Delaware | | 23346 | | 13-3534145 |
(State or other jurisdiction
of incorporation or
organization) | | (Commission File No.) | | (I.R.S. Employer Identification No.) |
6330 San Vicente Boulevard
Los Angeles, California 90048
(Address of Principal executive offices, including zip code)
(323) 932-4300
(Registrant’s telephone number, including area code)
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:
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| o | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| o | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| o | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| o | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
The information included under this Item 2.02 and Exhibit 99.1 to this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
On February 28, 2005, EMAK Worldwide, Inc. (the “Company”) reported its results for the fourth quarter and fiscal year ended December 31, 2004. The Company’s earnings release for the fourth quarter and fiscal year ended December 31, 2004 is attached as Exhibit 99.1 to this report.
The earnings release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statement) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the earnings release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
This report contains forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are forward-looking statements and are made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Although the Company does not make forward-looking statements unless it believes it has a reasonable basis for doing so, it cannot guarantee their accuracy, and actual results may differ materially from those anticipated by the Company due to a number of uncertainties, including some presently unknown to the Company. The Company undertakes no obligation to publicly release the results of any revisions to forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Item 2.05 Costs Associated with Exit or Disposal Activities.
On February 24, 2005, the Company finalized a decision to pursue the wind down of substantially all of its consumer products business, Pop Rocket. The Company’s determination is to significantly scale back this business during 2005 while exiting the business permanently as soon as is feasible. In the near term, this includes restructuring the Pop Rocket division and exiting certain licenses. In connection with this decision, the Company expects to incur charges for one-time employee termination benefits and other costs. The Company expects employee termination costs to range from $700,000 to $900,000. The Company is unable in good faith to make a determination of an estimate as to other costs. Such costs are expected to result in future cash expenditures.
As a result of the wind down, in the fourth quarter of 2004 the Company recorded a pre-tax charge of approximately $7.7 million relating to minimum royalty guarantee shortfalls on several of its consumer products licenses. Approximately $3 million of this pre-tax charge is non-cash for write-offs of long-term royalty advances. Of the remaining $4.7 million, the Company is negotiating with licensors to mitigate the future cash impact of the shortfall.
Item 9.01. Financial Statements and Exhibits
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| Exhibit No. | | Description |
| 99.1 | | Press Release of EMAK Worldwide, Inc. issued February 28, 2005 |
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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.
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| | EMAK WORLDWIDE, INC.
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| Date: March 2, 2005 | By: | /S/TERESA L. TORMEY | |
| | | Teresa L. Tormey, | |
| | | Executive Vice President, General Counsel and Secretary | |
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