SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
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X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--------- SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended August 31, 1995
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OR
--------- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
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Commission file number 1-8654
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UNITEL VIDEO, INC.
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(Exact name of registrant as specified in its charter)
Delaware 23-1713238
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
510 West 57th Street, New York, New York 10019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone no., including area code: (212) 265-3600
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Securities registered pursuant to Section 12 (b) of the Act:
Name of each exchange
Title of Each Class on which registered
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Common Stock, $.01 par value American Stock Exchange
Securities registered pursuant to Section 12 (g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K ( ).
---
(Cover Page: 1 of 2 Pages)
The aggregate market value of the voting stock (based on the closing price of
such stock on the American Stock Exchange) held by non-affiliates of the
Registrant at December 12, 1995 was approximately $11,760,705.
There were 2,625,565 shares of Common Stock outstanding at December 12, 1995.
DOCUMENTS INCORPORATED BY REFERENCE
PART III Certain portions of the Registrant's Proxy Statement
for the Registrant's 1995 Annual Meeting of Stockholders.
2
PART I
ITEM 1. BUSINESS
GENERAL
Unitel Video, Inc. (the "COMPANY") provides a full range of services to the
video communications industry for the recording, editing and duplication of
television programs, commercials and corporate and other communications on
videotape. The Company's services are provided primarily in the following
areas: studio videotape recording, mobile videotape recording and live
telecasting, film to videotape transfer, editing, computer graphics and
videotape duplication. The Company also designs and produces custom CD-ROM, CD-
I, videodisc and networked multimedia presentations.
The Company's services are provided at facilities located in New York City,
Los Angeles and Chicago and through the Company's Mobile division based in
Pittsburgh. The Company's Mobile division provides "on-location" services,
including technical personnel, for videotape recording and live telecasting of
sports, cultural and other events throughout North America.
As the Company is in a service industry, it does not use raw materials. It
does, however, use videotape. Videotape is readily available from numerous
sources and the Company has not experienced, nor does it anticipate
experiencing, difficulty in obtaining videotape for its operations. In
addition, the Company has service contracts with its customers, generally for
facilities and personnel at specific times or on a project or job-by-job basis
(as more fully described below under the caption "Marketing") and, accordingly,
does not have backlog as such.
The Company's cost structure is such that depreciation, selling expenses
and general and administrative expenses do not generally fluctuate from quarter
to quarter during a fiscal year based on sales volume. Furthermore, a majority
of production costs are fixed. Accordingly, relatively small variations in
quarterly sales historically have resulted in disproportionately greater
variations in net earnings. In part due to the foregoing, during fiscal years
1995, 1994 and 1993, the Company recognized a significantly greater proportion
of net earnings in the first quarter as compared to the other quarters of the
fiscal year. See Note L to Notes to Consolidated Financial Statements.
SERVICES
STUDIO VIDEOTAPE RECORDING. The Company provides the studios, equipment
and skilled technical personnel needed to record television programs,
commercials and corporate and other videotape communications. The equipment
includes color television cameras, videotape recorders, sound monitoring and
mixing equipment and lighting equipment. The Company does not generally provide
program direction or other artistic or non-technical production services, such
as the preparation of scripts, the hiring of performers or the supplying of
special props or scenery. The Company operates nine studios in New York City.
Among the programs produced at the Company's studio facilities are "The Sally
Jessy Raphael Show", "Inside Edition", "The Rush Limbaugh Show", "The Rolonda
Watts Show", "American Journal", "The Gordon Elliot Show", "The Mark Walberg
Show" and "The Carnie Wilson Show". Studio recording accounted for
approximately 16%, 15% and 16% of the Company's revenues during the fiscal years
ended August 31, 1995, 1994 and 1993, respectively.
3
MOBILE VIDEOTAPE RECORDING AND LIVE TELECASTING. The Company's Mobile
division provides videotape recording and live telecasting services "on-
location" by transporting videotape and other related equipment in its mobile
vehicles. These vehicles have been designed to serve as the production control
center for events in sports arenas, concert halls, theaters and other locations.
The Company also arranges for the skilled technical personnel required to
perform these services. The Company's ten mobile vehicles are equipped to
travel on a continuous basis throughout North America and can be maintained in
the field. The Company's Mobile division accounted for approximately 21%, 19%
and 18% of the Company's revenues during the fiscal years ended August 31, 1995,
1994 and 1993, respectively. In February 1995, the Company acquired the assets
of Burbank, California based GC & Co. which added three mobile units to the
Company's fleet of seven. Some of the events handled by the Company's mobile
production units include "Live from the Met", "Live from Lincoln Center", "The
Grammy Awards", "The Emmy Awards", "The Academy Awards", major golf and tennis
tournaments, broadcast of Pittsburgh Pirates, Montreal Expos and Toronto Blue
Jays major league baseball games, Major League Baseball's Allstar, Playoff and
World Series games and the international broadcast of the "Super Bowl".
FILM TO VIDEOTAPE TRANSFER. The Company provides the facilities and
technical personnel for transferring 16mm and 35mm motion picture positive and
negative film and slides to videotape. Through the use of computers, the color
of the picture may be corrected, altered or enhanced frame by frame to meet
client needs. Film to videotape transfer accounted for approximately 9%, 9% and
10% of the Company's revenues during the fiscal years ended August 31, 1995,
1994 and 1993, respectively. The Company has performed this service for major
theatrical motion pictures such as "Waterworld",
"Batman Forever" and "Congo", and television programs such as "Murder, She
Wrote" and "Homicide".
EDITING. The Company provides editing equipment and skilled personnel
required to perform the editing, special optical and audio effects, titling and
other technical work necessary to produce a master videotape suitable for
broadcast, cablecast, duplication or other distribution. Using computer-
controlled electronic editing equipment, video and audio tape recorders and
special effects and titling equipment, videotape recorded by the Company or
others is processed into a finished product. Additionally, the Company provides
creative editorial and editorial supervision through the post production process
and consultative storyboard services directly to advertising agencies. Editing
accounted for approximately 35%, 37% and 40% of the Company's revenues during
the fiscal years ended August 31, 1995, 1994 and 1993, respectively. Among the
programs edited at the Company's facilities are " Star Trek:Voyager", "Star
Trek: Deep Space Nine", "Grace Under Fire", "Cybill", "The Simpsons" and
"Homicide".
COMPUTER GRAPHICS. The Company offers creative consultation, technical
assistance and full-service facilities for the creation of computer-generated
graphics, special effects and animation in the digital format in both 2-D and 3-
D. These services accounted for approximately 9% of the Company's revenues in
fiscal 1995 and 10% during each of the fiscal years ended August 31, 1994 and
1993. The Company's projects in this area include various commercials for
Blockbuster Video, Sharp Electronics, Subway, McDonalds, Procter Gamble, General
Mills and Oldsmobile.
4
VIDEOTAPE DUPLICATION. The Company furnishes videotape duplication
services in all formats, including formats available for broadcast and cablecast
in the United States as well as the multiple formats used abroad. Duplication
services accounted for approximately 4%, 5% and 6% of the Company's revenues
during the fiscal years ended August 31, 1995, 1994 and 1993, respectively.
INTERACTIVE MULTIMEDIA PRODUCTION. The Company designs and produces custom
CD-ROM, CD-I, videodisc and networked multimedia presentations for clients in
the publishing, financial services, pharmaceutical, entertainment, advertising,
retail, telecommunications and utility industries. Extensive use of other
Company resources are integrated into the productions, including video
compression, digital to video transfers, 3-D computer graphic creation and
studio and location recording. Interactive multimedia production accounted for
approximately 1% of the Company's revenues during each of the fiscal years ended
August 31, 1995, 1994 and 1993.
MARKETING
The Company markets its services principally to cable television program
suppliers, independent producers, national television networks, local television
stations, motion picture studios, advertising agencies, program syndicators and
distributors through the direct efforts of its internal sales personnel and
through advertising in certain trade publications. The Company has no material
patents. The Company markets its services through the use of the Unitel, Editel
and Windsor names.
Customers for editing services, film-to-tape transfer, computer graphics
and videotape recording of television commercials generally make arrangements
for the Company's services without significant advance notice, on a project or
job-by-job basis. Customers for studio and "on-location" videotape recording or
live telecasting of programs generally make arrangements longer in advance of
the time when the facilities and services are required. The Company has entered
into arrangements with several customers for periods ranging up to three years
to provide editing, mobile videotape recording and/or studio videotape recording
services. No customer accounted for more than 10% of the Company's total sales
for the fiscal year ended August 31, 1995.
COMPETITION
The video services industry is highly competitive. Certain videotape
service businesses (both independent companies and divisions of diversified
companies) provide most of the same services provided by the Company, while
others specialize in one or several of these services. Editing and videotape
recording services are also subject to competition from the film industry.
While the Company provides the facilities for the transfer of film to videotape,
it does not perform any services directly on film.
Many competitors of the Company, some with greater financial resources, are
located in the New York City, Los Angeles and Chicago areas, the principal
markets for the Company's services other than "on-location" video services.
"On-location" video services provided by the Company compete on a nationwide
basis with companies located throughout North America.
5
The Company competes on the basis of the overall quality of the services it
provides, state-of-the-art equipment, breadth of services, reputation in the
industry and location. The Company also competes on the basis of its ability to
attract and retain qualified, highly skilled personnel. The Company believes
that prices for its services are competitive within its industry, although some
competitors may offer certain of their services at lower rates than the Company.
The video services industry has been and is likely to continue to be subject to
technological change to which the Company must respond in order to remain
competitive.
EMPLOYEES
At August 31, 1995, the Company had 474 full-time employees. The Company's
Unitel-New York division post-production personnel (22 employees) are members of
the National Association of Broadcast Employees and Technicians, AFL-CIO, under
a contract with the Company which expires in April 1997.
The technical personnel of the Company's Editel-Los Angeles division
(44 employees) are represented by the International Alliance of Theatrical Stage
Employees ("IATSE"), under a contract which expires in November 1997. A portion
of the Company's Editel-New York technical personnel (44 employees) are
represented by IATSE under a three year contract which expired in May 1994.
Negotiations for a new contract, which are currently underway, have historically
been completed after the expiration of the previous contract. A portion of the
Company's Editel-New York administrative staff (8 employees) are also
represented by IATSE under a three year contract which expired in December 1994.
Negotiations for a new contract, which are currently underway have historically
been completed after the expiration of the previous contract.
The Company believes that its employee relations are generally
satisfactory.
DEVELOPMENTS
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed Of" which provides
guidance on when to assess and how to measure impairment of long-lived assets,
certain intangibles and goodwill related to those assets to be held and used,
and for long-lived assets and certain indentifiable intangibles to be disposed
of. The Company adopted this statement as of August 31, 1995.
The Company has decided to focus its resources toward providing services to
the entertainment and corporate communications areas, which represents the
Company's strength. As part of the strategy, the Company has decided to sell
its Editel New York, Editel Chicago and Editel Los Angeles divisions, which
specialize in the highly competitive commercial advertising portion of the
video facilities industry. During the 1995 fiscal year, the three Editel
divisions incurred a pretax loss of $3,682,000. As a result the Company
identified property, plant and equipment associated with these divisions with
a carrying value of approximately $24,000,000 that it no longer needed for
its current and future operations, and during the fourth quarter of fiscal
1995 committed to a plan to dispose of them. Accordingly, the Company began
marketing these divisions to potential buyers and plans to sell them.
Although the Company intends to sell these assets within one year there is no
assurance that it will be able to do so, accordingly these assets are
classified in the balance sheet as long-term. The Company estimated the
revised value to be approximately $19,300,000. Accordingly, the Company
recorded an impairment charge of approximately $4,700,000 in 1995 on these
assets, which was included in
6
impairment charges. The Company intends to operate these divisions until a sale
is consummated.
The Company reevaluated its investment in its Windsor division in the
fourth quarter of fiscal 1995 and determined that based upon it's operating
results, the goodwill associated with the purchase of this division and certain
property, plant and equipment that will not provide any future benefits to the
Company were impaired. The Company recognized an impairment charge of
approximately $3,000,000 included in impairment charges during the fourth
quarter which represents the remaining balance of these assets.
In May of 1995, the Company adopted a plan to downsize the operations of
its Editel Chicago division and reorganize and reduce its corporate management
which resulted in recording a restructuring charge of $400,000 which is
comprised of severance and early retirement expense. In fiscal 1995 the
restructuring liability was reduced by approximately $127,000 as a result of
severance and retirement payments made during fiscal 1995. As of August 31,
1995, the balance of the restructuring liability was approximately $273,000 and
is included in accrued payroll.
In February 1995 the Company acquired the business and assets of GC & Co.,
a Burbank, California based provider of mobile videotape production services.
The purchase price of $6,750,000 was financed with $6,000,000 of cash from the
proceeds of a $6,500,000 equipment financing from an insurance company lender
and a $750,000 subordinated convertible note from the sellers. The subordinated
note is convertible into 75,000 of the Company's common shares at a stated
conversion price of ten dollars per share.
7
ITEM 2. PROPERTIES.
The following table sets forth, as of August 31, 1995, certain information
concerning the Company's facilities. The lease expiration dates exclude option
extension periods which exist in certain leases.
Lease
Approximate Expiration
Location Square Feet Primary Use Date
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515 West 57 Street 40,000 Television studios and post- Owned
New York, New York production facilities.
508-510 West 57 Street 15,000 Television studio and March 1999
New York, New York support space.
841 Ninth Avenue 21,000 Television studio and August 2003
New York, New York support space.
503 West 33 Street 8,000 Television studio and April 2001
New York, New York support space.
402 East 76 Street 30,000 Television studio and June 1998
New York, New York support space.
8 West 38 Street 20,000 Television studio and March 2001
New York, New York support space, post-
production, administrative
offices and production offices.
222 East 44 Street 43,000 Post-production, film Dec 1999
New York, New York transfer and computer
graphics facilities, and
administrative offices.
433-435 West 53 Street 14,000 Television studio and Owned
New York, New York support space.
4100 Steubenville Pike 18,000 Mobile production Sept 1997
Pittsburgh, Pennsylvania headquarters.
301 East Erie Street 31,000 Television studio, post- Dec 2004
Chicago, Illinois production, film-to-tape
transfer and computer graphics
facilities, and administrative
offices.
729 North Highland 26,000 Television studio, post- Owned
Los Angeles, California production, film-to-tape
transfer and computer graphics
facilities, and administrative
offices.
3330 Cahuenga Blvd. W. 30,000 Post-production, film- Dec 1998
Los Angeles, California to-tape transfer and
computer graphics facilities,
and administrative offices.
1101 Isabel Street 15,000 Mobile field shop and August 1996
Burbank, California garage.
8
855 10th Avenue 5,000 Office space Dec 1995
New York, New York
All of the Company's facilities are well maintained structures, in good
physical condition and are adequate to meet the Company's current and reasonably
foreseeable needs.
9
ITEM 3. LEGAL PROCEEDINGS.
(a) There are no material pending legal proceedings to which the Company
or any of its subsidiaries is a party or of which any of their property is the
subject.
(b) No material pending legal proceeding was terminated during the fourth
quarter of the Company's fiscal year ended August 31, 1995.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
Officer
Name Age Since Positions with the Company
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David Micciulla 40 1994 President, Chief Executive
Officer and Director
Barry Knepper 45 1982 Senior Vice President-
Finance & Administration,
Chief Financial Officer,
Treasurer and Director
Richard L. Clouser 55 1982 President of Mobile
Division
Mark Miller 47 1995 President of Unitel -
Hollywood Division
Jill Debin Cohen 43 1995 President of Windsor
Video Division
Albert Walton 50 1995 President of Editel-Los
Angeles Division
D.L. Bean 42 1995 President of Editel-Chicago
Division
Tom Eyring 43 1995 Chief Technology Officer
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CERTAIN INFORMATION CONCERNING THE EXECUTIVE OFFICERS OF THE COMPANY
Mr. Micciulla has been President, CEO and Director of the Company since May,
1995. He was President of the Unitel-New York and Windsor Video divisions from
April 1994 to May 1995. From June 1992 to April 1994 Mr. Micciulla was the
General Manager of Unitel-New York. From March 1987 to May 1992 he was Vice
President Finance/Controller of Editel-New York.
Mr. Knepper has been Senior Vice President-Finance and Administration and
Director since May 1995, Chief Financial Officer of the Company since 1982 and
has served as its Treasurer since 1983.
Mr. Clouser has been President of the Mobile Division of the Company since 1982.
Mr. Miller has been President of the Unitel Hollywood division since April 1995.
From 1990 through April 1995 he was Vice President of Engineering and Operations
of Unitel Hollywood. From 1984 through 1990 he was Vice President of
Engineering of Unitel Hollywood.
Ms. Debin Cohen has been President of Windsor Video since June 1995. From
November 1993 to June 1995 she was the Vice President/General Manager of Windsor
Video. Ms. Debin Cohen was the Vice President of Operations for Editel New York
from 1988 through November 1993.
Mr. Walton has been President of Editel-Los Angeles since July 1995. From May
1994 through July 1995 he was the Director of New Business Development for
Editel-Los Angeles. He served as Vice President of CIS from 1988 through 1984,
a Hollywood based specialized visual effects company.
Ms. Bean has been the President of Editel-Chicago since September 1995. She was
the General Manager of Editel-Chicago from March 1992 to September 1995 during
which time she was promoted to Vice President in June 1995. From 1983 through
February 1992, Ms. Bean was the Vice President/General Manager of IPA, the
Editing House, a video post production and graphics facility in Chicago.
Mr. Eyring has been Chief Technology Officer since June 1995. From 1991 to June
1995 he was Vice President of Engineering of Editel-New York and from 1982
through 1991 he was Director of Engineering Services for Editel-New York.
The term of office of each executive director of the Company expires as
specified by the Board of Directors of the Company and when his or her
respective successor is elected and has qualified.
11
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The Company's Common Stock is traded on the American Stock Exchange under
the symbol UNV. The following table sets forth, for fiscal years 1995 and 1994,
the high and low sales prices of the Common Stock as furnished by the American
Stock Exchange:
Fiscal Year 1995: Low High
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First Quarter....................... 4 7/8 6 1/2
Second Quarter...................... 4 7/8 7 3/4
Third Quarter....................... 7 1/2 5 7/8
Fourth Quarter...................... 8 1/2 5 3/4
Fiscal Year 1994: Low High
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First Quarter....................... 6 8-1/4
Second Quarter...................... 6-7/8 9-3/8
Third Quarter....................... 5-3/4 8-1/8
Fourth Quarter...................... 5-7/8 7-1/8
As of December 11, 1995 there were approximately 387 holders of the
Company's Common Stock.
Since its inception in 1969, the Company has not declared or paid cash
dividends on its Common Stock, and it does not anticipate declaring or paying
cash dividends in the foreseeable future. The declaration, payment and amount
of future dividends will be determined by the Board of Directors in light of
conditions then existing, including the Company's earnings, financial condition,
capital requirements and other factors. In connection with certain of its
financing arrangements, the Company is subject to certain restrictions which
prohibit the payment of cash dividends. (See Note B to Notes to Consolidated
Financial Statements, and Management's Discussion and Analysis of Financial
Condition and Results of Operations).
12
ITEM 6. Selected Financial Data
1995 1994 1993 1992(b) 1991
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OPERATIONS:
Sales $83,285,000 $80,498,000 $79,390,000 $63,000,000 $45,998,000
Cost of sales (c) $69,219,000 $64,391,000 $62,418,000 $48,382,000 $36,901,000
Interest expense, net $ 3,649,000 $ 2,388,000 $ 2,815,000 $ 2,072,000 $ 1,848,000
Earnings(loss)before
income taxes $(9,341,000) $ 1,519,000 $ 924,000 $ 3,097,000 $ 1,994,000
Net earnings(loss)(a) $(6,547,000) $ 859,000 $ 711,000 $ 1,728,000 $ 1,043,000
FINANCIAL POSITION:
Total assets $74,186,000 $73,245,000 $69,052,000 $62,269,000 $39,208,000
Working capital
(deficiency) $(3,467,000)(e) $(8,055,000)(d) $ (705,000) $ 2,577,000 $ 889,000
Current ratio .82 to 1 (e) .64 to 1 (d) .95 to 1 1.22 to 1 1.15 to 1
Property & equipment-net $34,491,000 (f) $55,425,000 $51,166,000 $43,679,000 $29,541,000
Long-term debt, less
current maturities $19,936,000(d) $14,142,000(d) $21,835,000 $27,904,000 $17,988,000
Stockholders'equity $22,526,000 $28,828,000 $27,673,000 $17,727,000 $12,760,000
DATA PER COMMON SHARE:
Net earnings(loss)per
common share $ (2.53) $ .33 $ .30 $ 1.07 $ .67
Weighted average number of
common and common equivalent
shares outstanding 2,582,000 2,617,000 2,066,000 1,580,000 1,552,000
(a) Federal and state tax credits of approximately $28,000 in 1995, $58,000 in
1994, $30,000 in 1993, $211,000 in 1992,and $60,000 in 1991 have been
applied as a reduction of the provision for income taxes.
(b) Includes the results of Editel-New York, Chicago and Los Angeles since
March 1, 1992.
(c) Gain on sale or disposal of equipment and amortization of goodwill have
been reclassified to depreciation expense to conform with fiscal 1994 and
1995 presentation. (See Note I to Notes to Consolidated Financial
Statements).
(d) The revolving credit portion of the long-term debt which expired in May
1995, was included in current liabilities. In December 1995, the Company
refinanced its revolving credit and term loans outstanding with its bank
lenders.
(e) The working capital deficiency is due to the inclusion of $3,750,000 of
Term Loan B in current liabilities which the Company intends to repay from
the sale of the Editel divisions
(f) The decrease in property and equipment is due to the reclassification of
the Editel divisions' net assets to assets held for sale, a separate
line in the long-term asset section of the balance sheet.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
LIQUIDITY AND CAPITAL RESOURCES.
The Company is committed to keeping pace with technological developments as
well as taking advantage of new business opportunities in the video
communications industry. Capital expenditures were $9,738,000 during fiscal
1995 (exclusive of the acquisition of GC & Co. described below) as compared to
$15,002,000 and $13,246,000 during fiscal years 1994 and 1993, respectively.
Expenditures made during fiscal 1995 were for equipment used in the studio
production, post production and computer graphics service areas throughout the
Company.
The net change in cash in the fiscal years ended August 31, 1995, 1994 and
1993 was $(1,132,000), $285,000 and $469,000, respectively. The decrease in
fiscal 1995 was the result of cash provided by operating activities of
$8,044,000 and financing activities of $1,510,000 less cash used in investing
activities of $10,686,000. The net cash decrease in fiscal 1995 is primarily
due to the Company's fixed asset expenditures for the year exceeding the cash
generated by operations. The increase in fiscal 1994 was the result of cash
provided by operating activities of $10,994,000 and financing activities of
$2,602,000 in excess of cash used in investing activities of $13,311,000. The
net cash increase in fiscal 1994 is primarily due to the cash generated by the
Company's operations and net loan proceeds exceeding the net cash used to
purchase capital assets.
In December 1995, subsequent to year end, the Company entered into a $26
million revolving credit and term loan agreement with a financial institution,
consisting of a $15 million term loan facility and an $11 million revolving
credit facility.
The $15 million dollar term loan portion of the facility is payable in 59
monthly principal payments of $89,000 through November 2000 and in payments of
$3,750,000 at August 31, 1996, $3,750,000 at December 31, 1996 and $2,249,000 at
December 2000. The revolving credit portion of the facility is due in full in
December 2000.
Additionally, in December 1995, the Company obtained a $4,000,000 mortgage on
its property located on West 57th Street in New York City, from a bank. The
mortgage is payable in equal monthly installments of $22,000 through November
2002, with a final payment of $2,152,000 due in December 2002.
The proceeds of the $15 million term loan, the $4 million mortgage and
$860,000 from the new revolving credit facility, were used to refinance the
term loan ($9,571,000) and revolving credit facility ($9,975,000) and to
repay the City of New York Industrial Revenue Bond obligation ($314,000), all
then outstanding to the Company's bank lenders. As such, the $9,975,000
outstanding on the revolving credit at August 31, 1995 has been reclassified
as long term debt on the accompanying balance sheet to reflect the
refinancing of this obligation. The terms of the agreement provide that the
lender receive a first lien on all property, equipment and accounts
receivable that are not encumbered by another lender.
In May of 1995, the Company adopted a plan to downsize the operations of
its Editel Chicago division and reorganize and reduce its corporate management
which resulted in recording a restructuring charge of $400,000 which is
comprised of severance and early retirement expense. The Company
14
anticipates annual cash savings of approximately $1,000,000 in fiscal 1996
related to the downsizing. In fiscal 1995 the restructuring liability was
reduced by approximately $127,000 as a result of severance and retirement
payments made during fiscal 1995.
In February 1995, the Company purchased the business and assets of GC & Co.
(formerly known as Greene, Crowe & Company), a Burbank, California based
supplier of "on-location" services for the videotaping and live telecasting of
concerts, cultural and other events, including the "Academy Awards", the "Grammy
Awards" and "The American Music Awards". The purchase price was $6,750,000,
consisting of $6,000,000 in cash and $750,000 of convertible subordinated
promissory notes. The notes bear interest at 1% over prime and are due in full
in August 1997 and are also convertible into the Company's common stock at
$10.00 per share. The cash portion of the purchase price was financed by a
$4,700,000 five year capital lease with a fixed rate of interest of 8.2%,
payable in sixty equal monthly payments of principal and interest of $82,000 and
a balloon payment at the end of the lease period of $940,000. Additionally, the
Company obtained a $1,800,000 loan with a fixed interest rate of 9.3% payable in
sixty equal monthly payments of principal and interest of $33,000 and a balloon
payment at the end of the five year period of $360,000. The $500,000 available
to the Company from these two financings after the payment of the cash portion
of the GC & Co. acquisition price was used to repay a $500,000 note payable to
Banta Corporation from the purchase of the Editel Los Angeles building.
In October 1993, the Company purchased a building located on West 53rd
Street in New York City for a purchase price of $2,800,000. The Company is
utilizing the building, which contains approximately 14,000 square feet, as a
videotape recording studio. The Company also entered into a $2,700,000
equipment financing agreement with a leasing company in October 1993. The
proceeds of this financing were used towards payment of the purchase price of
the 53rd Street property. The equipment financing is repayable in 60 monthly
installments of $53,000, including principal and interest, at a fixed rate of
7%. The Company obtained a $1,875,000 mortgage financing on this property in
June 1994 with a fixed rate of interest of 8.6%. The mortgage principal is
payable in equal monthly payments through June, 2004 with options to extend the
maturity date through June, 2019.
In February 1993, the Company entered into an agreement to purchase from
Scanline the building that its Editel-Los Angeles division occupies. The
Company therefore has treated the building as owned since February 1993,
recording the purchase at the present value of the $3,500,000 purchase price
less accrued rent. The Company purchased the building in June 1994 for
$3,500,000 with the proceeds of a long term mortgage in the amount of
$2,175,000, a $500,000 note due to Scanline and the balance from working
capital. The note payable to Scanline was paid in full in February 1995. The
mortgage financing is payable monthly over a 15 year period with interest at a
rate of 8.9%.
On April 8, 1993, the Company sold in an underwritten public offering,
777,273 shares of its Common Stock at a price, net of underwriting commissions,
of $13.025 per share. The net proceeds to the Company after underwriting
discounts and offering expenses was $9,389,000. In addition to the 777,273
shares sold by the Company were 272,727 shares owned by Scanline which were
issued through the conversion of Scanline's 100,000 shares of Series $1.80
Convertible Class A Preferred Stock. The conversion of the preferred shares
into common shares was done immediately prior to the closing of the public
offering.
15
In connection with certain of its financings, the Company must adhere to
particular financial ratios and restrictions including restrictions on future
payment of dividends. The Company anticipates that the restrictions will not
impair its ability to keep pace with technological developments.
The enactment of the Tax Reform Act of 1986 has limited the Company's
ability to defer the payment of taxes due to the imposition of an alternative
minimum tax which effectively results in the treatment of certain timing
differences as tax preference items.
RESULTS OF OPERATIONS
Sales were $83,285,000, $80,498,000 and $79,390,000 for the fiscal years
ended August 31, 1995, 1994 and 1993, respectively. The fiscal year 1995 sales
increase of $2,787,000 was primarily due to revenues generated by the Company's
studio production and mobile facilities as a result of the addition of a studio
in New York City and the acquisition of the GC & Co. mobile units, which was
offset by declines in sales at the company's Editel divisions. In fiscal year
1994, sales increased $1,108,000 which was mostly due to a higher demand for the
Company's mobile services. Sales remained flat for the Company's Editel-Chicago
and both Los Angeles divisions due to severe price competition in these markets.
In 1993, sales increased $16,390,000, of which $14,409,000 was due to the Editel
divisions which were included in the Company's operating results for a full year
in fiscal 1993.
The Company recorded a net loss of $6,547,000 in the fiscal year ended
August 31, 1995 and net income of $859,000 and $711,000 in the fiscal years
ended August 31, 1994 and 1993, respectively, including pre-tax income of
$229,000 in 1994 as royalty income or earnings from the Company's interest in
Time Logic Systems. The net loss of $6,547,000 for the current fiscal year is
due primarily to the pretax charge of $7,681,000 taken for the impairment of
assets of the Editel New York, Editel Chicago, Editel Los Angeles and Windsor
Video divisions and the pretax charge of $400,000 for the restructuring of the
Editel Chicago division. In August 1994, the Company received a piece of
equipment with a value of $189,000 in lieu of all future income from its
interest in Time Logic Systems.
The fiscal 1993 results include a $252,000 increase to income due to the
cumulative effect of adopting FASB Statement No. 109, "Accounting for Income
Taxes" as of September 1, 1992.
Production costs, the main component of cost of sales, consist primarily of
direct labor, equipment maintenance expenses and occupancy costs. The Company's
production costs, as a percentage of sales, were 71.1%, 68.4% and 67.6%, for the
fiscal years ended August 31, 1995, 1994 and 1993, respectively. The increase
in production costs for fiscal 1995 as compared with the prior years, is due
primarily to an increase in studio and mobile production revenues which incur
variable expense at a higher rate than the Company's other services. Production
costs increased as a percentage of sales in fiscal 1994 because production costs
increased during that year while sales remained flat with the prior year. The
increase in production costs as a percentage of sales in fiscal 1993 is
similarly due to sales in fiscal 1993 remaining flat with sales in fiscal 1992,
on a proforma basis. Since most of the Company's costs are fixed and a large
portion of the costs are subject to price increases, flat sales from year to
year result in production costs which are an increased percentage of sales.
This same dynamic applies for both selling expenses and general and
administrative expenses.
16
Depreciation, as a percentage of sales, was 12.1%, 11.5% and 11.0% in
fiscal 1995, 1994 and 1993, respectively. Depreciation expense increased in
1995 as a result of the $4,750,000 equipment portion of the GC & Co. acquisition
and capital expenditures made during the year totaling $9,738,000. Depreciation
expense increased as a percentage of sales in 1994 due to the purchase of
$15,002,000 in fixed assets during the year. Depreciation expense, during
fiscal 1995, 1994 and 1993 was offset by gain on disposal of assets of $352,000,
$817,000 and $274,000, respectively. Had the gain on disposal of assets been
excluded from depreciation expense, depreciation as a percentage of sales for
1995 and 1994 would have been 12.5%, and for 1993 would have been 11.3%. The
issue of reclassification is fully addressed in Note I to Notes to Consolidated
Financial Statements.
Selling expenses, as a percentage of sales, during fiscal years 1995, 1994
and 1993 were 3.4%, 3.5% and 3.9%, respectively. In 1995 and 1994, selling
expenses as a percentage of sales decreased due to significant cost reductions
which became effective in 1993.
General and administrative expenses as a percentage of sales during fiscal
years 1995, 1994 and 1993 were 10.6%, 11.8% and 12.8%, respectively. Cost
reductions put into effect in 1994, including the addition of in-house counsel
and a resulting reduction in professional fee expense, were reflected in fiscal
years 1995 and 1994 by a decrease of approximately 1% from each of the prior
years.
Interest expense, as a percentage of sales, during fiscal years 1995, 1994,
and 1993 was 4.4%, 3.0% and 3.5%, respectively. The increase in interest
expense in fiscal 1995 was due to additional interest incurred relating to the
mortgage financings for the Editel-Los Angeles building purchased by the Company
in June 1994 and financing obtained for the acquisition of GC & Co. in February
1995. During fiscal 1995 the Company wrote off $214,000 of deferred financing
costs related to its bank debt which was refinanced in December 1995.
Additionally, interest rates were significantly higher in 1995 as compared with
the prior year resulting in higher interest payments on the floating rate
portion of the Company's debt. The decrease in interest expense in 1994 is due
to the renegotiation of the rate payable on the Company's indebtedness to its
primary bank lenders, a reduction in the amortization of deferred financing
costs charged to interest expense and the capitalization of approximately
$300,000 of interest relating to construction on the Editel-Los Angeles and 53rd
Street, New York City locations.
In September 1993 the Company entered into a partnership arrangement with a
computer graphics design firm. During fiscal years 1995 and 1994 the Company's
50% share of losses were $29,000 and $65,000, respectively. Additionally, the
Company had an outstanding loan to the partnership of $118,000 at August 31,
1995.
The Company's effective tax rates were (30%), 43.4% and 50.3% in fiscal
years 1995, 1994 and 1993, respectively. The effective tax rate in 1995 differs
from prior years primarily due to the impact of the nondeductible goodwill write
off and the impairment of assets charge. (See Note F to Notes to Consolidated
Financial Statements.) During those years, the effective rate exceeded the
Federal statutory rate of 34.0% due to state and local income taxes, and the
effect of certain non-deductible expenses.
17
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
UNITEL VIDEO, INC.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
PAGE
REPORT OF GRANT THORNTON LLP INDEPENDENT AUDITORS.......... 19
CONSOLIDATED FINANCIAL STATEMENTS:
BALANCE SHEETS - AUGUST 31, 1995 AND 1994............. 20-21
STATEMENTS OF OPERATIONS - YEARS ENDED
AUGUST 31, 1995, 1994 AND 1993................... 22-23
STATEMENT OF STOCKHOLDERS' EQUITY - YEARS ENDED
AUGUST 31, 1995, 1994 AND 1993................... 24
STATEMENTS OF CASH FLOWS - YEARS ENDED
AUGUST 31, 1995, 1994 AND 1993................... 25-27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS............ 28-39
SUPPLEMENTARY FINANCIAL SCHEDULES.......................... 46
Selected Quarterly Financial Data is set forth in
Note L to Notes to the Consolidated Financial Statements.
18
REPORT OF INDEPENDENT
CERTIFIED PUBLIC AUDITORS
Board of Directors and Shareholders
Unitel Video, Inc.
We have audited the accompanying consolidated balance sheets of Unitel Video,
Inc. (a Delaware corporation) at August 31, 1995 and 1994 and the related
consolidated statements of operations, stockholder's equity, and cash flows for
each of the three years in the period ended August 31, 1995. 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 Unitel Video, Inc. as of August
31, 1995 and 1994, and the results of its operations and its cashflows for each
of the three years in the period ended August 31, 1995, in conformity with
generally accepted accounting principles.
As discussed in Note K to the consolidated financial statements, the Company
adopted the provisions of the Financial Accounting Standards Board's Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-lived Assets and for Long-lived Assets to Be Disposed Of."
We have also audited Schedule II of Unitel Video, Inc. for each of the three
years in the period ended August 31, 1995. In our opinion, the schedule
presents fairly, in all material respects, the information required to be set
forth therein.
/S/GRANT THORNTON LLP
- -----------------------------------
New York, New York
November 28, 1995 (except for Note B, as to which the date is
December 12, 1995)
19
UNITEL VIDEO, INC.
CONSOLIDATED BALANCE SHEETS
August 31,
ASSETS 1995 1994
- ------ ---- ----
Current assets:
Cash $161,000 $ 1,293,000
Accounts receivable, less
allowance for doubtful accounts
of $686,000 in 1995 and
$690,000 in 1994 12,700,000 10,772,000
Other receivables 362,000 382,000
Prepaid income taxes 567,000 81,000
Prepaid expenses 1,340,000 1,553,000
Deferred tax asset 760,000 732,000
---------- ----------
Total current assets 15,890,000 14,813,000
Property and equipment - at cost
Land, buildings &
improvements 13,541,000 22,787,000
Video equipment 78,145,000 92,301,000
Automobiles 50,000 50,000
Furniture and fixtures 2,736,000 3,362,000
---------- ----------
94,472,000 118,500,000
Less accumulated depreciation
and amortization 59,981,000 63,075,000
---------- ----------
34,491,000 55,425,000
Net assets held for sale 19,270,000 --
Deferred tax asset 1,745,000 --
Goodwill 1,997,000 1,839,000
Other assets 793,000 1,168,000
---------- ----------
$74,186,000 $73,245,000
---------- ----------
---------- ----------
See accompanying notes.
20
UNITEL VIDEO, INC.
CONSOLIDATED BALANCE SHEETS
(Continued)
August 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
- ------------------------------------ ---- ----
Current liabilities:
Accounts payable $7,339,000 $ 6,504,000
Accrued expenses 1,620,000 1,061,000
Payroll and related taxes 2,931,000 2,982,000
Current maturities of long-term
debt 5,492,000 11,662,000
Current maturities of subordinated
debt 104,000 --
Current maturities of ESOP loan 186,000 168,000
Current maturities of capital lease
obligations 1,685,000 491,000
----------- -----------
Total current liabilities 19,357,000 22,868,000
Deferred rent 864,000 987,000
Deferred gain on sale of building -- 117,000
Long-term debt, less current maturities 19,936,000 14,142,000
Subordinated debt, less current
maturities 3,146,000 2,500,000
ESOP loan, less current maturities 152,000 338,000
Long-term leases, less current
maturities 7,064,000 1,749,000
Accrued retirement 1,141,000 969,000
Deferred income taxes -- 747,000
Stockholders' equity:
Common stock, par value $.01 per
share:
Authorized-5,000,000 shares
Issued 3,491,454 shares in 1995
and 3,482,754 shares in 1994,
and outstanding 2,625,165 shares
in 1995 and 2,616,465 shares in
1994 26,000 26,000
Additional paid-in capital 27,351,000 27,386,000
Retained earnings 3,532,000 10,079,000
Common stock held in treasury, at cost
(866,289 shares in 1995 and 1994)
(7,974,000) (7,974,000)
----------- -----------
22,935,000 29,517,000
Unearned employee benefit expense (409,000) (689,000)
----------- -----------
Total stockholders' equity 22,526,000 28,828,000
----------- -----------
$74,186,000 $73,245,000
----------- -----------
----------- -----------
See accompanying notes.
21
UNITEL VIDEO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended August 31,
1995 1994 1993
---- ---- ----
Sales $83,285,000 $80,498,000 $79,390,000
----------- ----------- -----------
Cost of sales:
Production costs 59,174,000 55,097,000 53,660,000
Depreciation and
amortization 10,045,000 9,294,000 8,758,000
----------- ----------- -----------
69,219,000 64,391,000 62,418,000
----------- ----------- -----------
Gross profit 14,066,000 16,107,000 16,972,000
Operating expenses:
Selling 2,843,000 2,852,000 3,081,000
General and
administrative 8,832,000 9,512,000 10,152,000
Interest 3,649,000 2,388,000 2,815,000
Restructuring charge 400,000 -- --
Impairment charge 7,681,000 -- -- .
----------- ----------- -----------
23,405,000 14,752,000 16,048,000
----------- ----------- -----------
Earnings(loss)from
operations (9,339,000) 1,355,000 924,000
Other income (loss) (2,000) 164,000 --
----------- ----------- -----------
Earnings(loss)before
income taxes and
cumulative effect of
change in accounting
for taxes (9,341,000) 1,519,000 924,000
Income taxes (benefit) (2,794,000) 660,000 465,000
----------- ----------- -----------
Net earnings(loss)before
cumulative effect of
change in accounting
for income taxes (6,547,000) 859,000 459,000
Cumulative effect of
change in accounting
for income taxes -- -- 252,000
----------- ----------- -----------
Net earnings (loss) (6,547,000) 859,000 711,000
Dividends on preferred
stock -- -- 90,000
----------- ----------- -----------
Net earnings (loss)
applicable to common
stock $(6,547,000) $ 859,000 $ 621,000
----------- ----------- -----------
----------- ----------- -----------
22
UNITEL VIDEO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Continued)
Year ended August 31,
1995 1994 1993
---- ---- ----
Earnings Per Common Share
Net earnings (loss) before
cumulative effect of change $ (2.53) $ .33 $ .18
Cumulative effect of change -- -- .12
----------- ----------- -----------
Net earnings (loss) $ (2.53) .33 $ .30
----------- ----------- -----------
----------- ----------- -----------
Weighted average number of common
and common equivalent shares
outstanding 2,582,000 2,617,000 2,066,000
--------- --------- ---------
--------- --------- ---------
See accompanying notes.
23
UNITEL VIDEO, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
YEARS ENDED AUGUST 31, 1995, 1994 AND 1993
Common Stock Additional Common Stock
------------------- Paid-In Retained Held in Preferred Unearned Employee
Shares Amount Capital Earnings Treasury Stock Benefit Expense
------ ------ ------- -------- -------- --------- ---------------
BALANCE, August 31, 1992 1,541,597 15,000 14,643,000 8,599,000 (7,519,000) $3,000,000 $(1,011,000)
Net earnings 711,000
Exercise of stock
options 26,331 1,000 172,000
Employee stock
purchase plan 9,542 65,000
Repurchase of shares (31,591) (455,000)
Public offering 777,273 7,000 9,382,000
Conversion of preferred
stock 272,727 3,000 2,997,000 (3,000,000)
Dividends (90,000)
Repayment of loan to ESOP 153,000
--------------------------------------------------------------------------------------------------
BALANCE, August 31, 1993 2,595,879 26,000 27,259,000 9,220,000 (7,974,000) 0 (858,000)
Net earnings 859,000
Exercise of stock
options 250 1,000
Employee stock
purchase plan 20,336 106,000
Repayment of loan to ESOP 169,000
Public offering expense
reimbursement 20,000
--------------------------------------------------------------------------------------------------
BALANCE, August 31, 1994 2,616,465 $26,000 $27,386,000 10,079,000 (7,974,000) 0 (689,000)
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Net loss (6,547,000)
Exercise of stock
options 5,000 32,000
Employee stock
purchase plan 3,700 20,000
Allocation of ESOP shares (87,000) 280,000
--------------------------------------------------------------------------------------------------
BALANCE, August 31, 1995 2,625,165 $26,000 $27,351,000 $ 3,532,000 $(7,974,000) $0 $(409,000)
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
See accompanying notes.
24
UNITEL VIDEO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED AUGUST 31,
1995 1994 1993
---- ---- ----
Cash Flows From Operating
Activities:
Net earnings (loss) $(6,547,000) $ 859,000 $ 711,000
---------- ---------- ----------
Adjustments to reconcile
net earnings to net cash
provided by operating
activities:
Cumulative effect of
change in accounting
for income taxes -- -- (252,000)
Depreciation and
amortization 10,397,000 10,111,000 9,032,000
Net gain on disposal of
assets (352,000) (817,000) (274,000)
Impairment charge 7,681,000 -- --
Amortization of deferred
financing costs 603,000 500,000 661,000
Accretion of subordinated
debt -- 317,000 308,000
Recognition of
deferred gain (117,000) (200,000) (201,000)
Deferred financing costs (90,000) (122,000) --
Royalties received in
equipment -- (189,000) --
Payments made on accrued
acquisition costs -- (75,000) (89,000)
Deferred rent (123,000) (44,000) 100,000
Accrued retirement
expense 172,000 206,000 190,000
Accrued restructuring 273,000 -- --
Deferred income taxes (2,520,000) 140,000 (265,000)
Decrease (increase), net
of acquired assets and
liabilities, in:
Accounts receivable, net (1,928,000) 720,000 687,000
Other receivables 20,000 (336,000) 34,000
Prepaid expenses 213,000 (309,000) (137,000)
Prepaid taxes (486,000) 438,000 (328,000)
Other assets (222,000) 14,000 (73,000)
Increase (decrease), net
of acquired assets and
liabilities, in:
Accounts payable 835,000 (1,486,000) 2,812,000
Accrued expenses 559,000 533,000 (383,000)
Payroll and related
taxes (324,000) 734,000 479,000
---------- ---------- ----------
14,591,000 10,135,000 12,301,000
---------- ---------- ----------
Net cash provided by operating
activities 8,044,000 10,994,000 13,012,000
---------- ---------- ----------
---------- ---------- ----------
25
UNITEL VIDEO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
YEAR ENDED AUGUST 31,
1995 1994 1993
---- ---- ----
Cash Flows From Investing
Activities:
Capital expenditures $(9,738,000) $(15,002,000) $(13,246,000)
Acquisition of GC & Co.
assets (1,300,000) -- --
Proceeds from disposal
of assets 352,000 1,691,000 274,000
Profit distribution from
affiliate -- -- 16,000
----------- ------------ ----------
Net cash used in investing
activities (10,686,000) (13,311,000) (12,956,000)
----------- ------------ ----------
Cash Flows From Financing
Activities:
Proceeds from public
offering -- -- 9,389,000
Reimbursement of public
offering expenses -- 20,000 --
Proceeds from long-term
financing 6,120,000 9,518,000 2,000,000
Principal repayments (4,187,000) (7,060,000) (11,085,000)
Repayment of note to
Banta (500,000) -- --
Proceeds from issuance of
common stock 52,000 107,000 238,000
Purchases of treasury
stock -- -- (455,000)
Repayment of loan to
ESOP 25,000 17,000 15,000
Repayment of amount due
from officers -- -- 401,000
Payment of dividends -- -- ( 90,000)
----------- ------------ ----------
Net cash provided by
financing activities 1,510,000 2,602,000 413,000
----------- ------------ ----------
Net Increase(decrease) in
Cash (1,132,000) 285,000 469,000
Cash, Beginning of Year 1,293,000 1,008,000 539,000
----------- ------------ ----------
Cash, End of Year $ 161,000 $ 1,293,000 $1,008,000
----------- ------------ ----------
----------- ------------ ----------
Schedule of income taxes and
interest paid:
Income Taxes Paid $ 162,000 $ 155,000 $1,014,000
Interest Paid 3,256,000 1,713,000 1,690,000
----------- ------------ ----------
$ 3,418,000 $ 1,868,000 $2,704,000
----------- ------------ ----------
----------- ------------ ----------
26
UNITEL VIDEO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
YEAR ENDED AUGUST 31,
1995 1994 1993
---- ---- ----
Supplemental schedule of non-
cash investing and financing
activities:
Purchase of Editel-Los Angeles
building:
Land $ 2,100,000
Building 1,286,000
Accrued rent (186,000)
-----------
Present value of purchase 3,200,000
Accreted interest 140,000
-----------
Liability to seller $ 3,340,000
-----------
-----------
Capital lease obligations: $ 2,622,000 $ 2,690,000
----------- -----------
----------- -----------
Detail of acquisition of GC & Co.:
Fair value of assets acquired $ 6,750,000
Subordinated note to seller (750,000)
Capital lease obligation (4,700,000)
-----------
Net cash paid for acquisition $ 1,300,000
-----------
-----------
See accompanying notes.
27
UNITEL VIDEO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1995, 1994 AND 1993
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(1) Business -- The Company provides facilities for studio production, videotape
editing, mobile production, computer graphics, film-to-tape transfer and
duplication of videotape in all formats, to the entire video communications
industry. The Company's facilities are used to produce television programs,
corporate communications and commercials on videotape. The Company's mobile
division provides "on-location" services for the videotape recording and live
telecasting of sports, cultural and other events throughout the United States.
The Company also designs and produces custom CD-ROM, CD-I, videodisc and
networked multimedia presentations. Customers for the Company's services
include cable television program suppliers, independent producers, national
television networks, local television stations and advertising agencies.
(2) Consolidation -- The consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiary.
(3) Depreciation -- Depreciation is provided on a straight-line basis over the
estimated useful lives of assets which are: 30-40 years for buildings; 15-30
years for building improvements; length of lease for leasehold improvements; 5-7
years for video equipment; 5-7 years for furniture and fixtures; and 3 years for
automobiles. Gain on disposal of assets was reclassified to depreciation and
amortization expense in 1993. Also, amortization of goodwill was reclassified
to depreciation and amortization expense from general and administrative
expenses for the same periods. (See Note I to Notes to Consolidated Financial
Statements).
(4) Goodwill -- Goodwill relating to acquisitions represents the excess of cost
over the fair value of net assets acquired and is amortized over 15 years.
Accumulated amortization at August 31, 1995 totaled $69,000. (See Note K to
Notes to Consolidated Financial Statements).
(5) Deferred Financing Costs -- Costs incurred in obtaining long-term debt
financing are included in other assets. These costs are being amortized using
the interest method over the term of the related obligations.
(6) Investment in Affiliate -- Investment in an affiliation in which there is a
50% ownership interest is recorded at cost plus equity in its undistributed
earnings.
(7) Interest Cost -- The Company had capitalized construction period interest
costs of $303,000 in 1994.
(8) Income Taxes -- Deferred income taxes arise primarily from the use of
different depreciation methods and lives for tax and financial statement
purposes, differences in the timing of the deduction for the impairment
charge and net operating loss and alternative minimum tax credit
carryforwards.
(9) Receivables -- The Company grants credit to customers, substantially all of
whom are in the entertainment, advertising or corporate communications
industries.
28
(10) Reclassification -- In 1993 gain on disposal of assets and amortization of
goodwill were reclassified to conform with the current year presentation. (See
Note I in Notes to Consolidated Financial Statements.)
(11) Earnings per common share were determined by dividing net earnings, by
weighted average of common and common equivalent shares outstanding. For the
year ended August 31, 1993, the effect of assumed conversion of preferred stock
was antidilutive, thus the primary earnings per share are also the fully diluted
earnings per share.
29
B. LONG-TERM DEBT:
August 31,
----------
1995 1994
---- ----
Notes payable to financial institution:
Term portion payable in monthly $7,500,000 --
installments of $89,000 through November
2000 plus interest on the declining
balance at Prime plus 1.00% or LIBOR
plus 2.75% and final payment of
$2,249,000 due December 2000.
Term portion payable in two installments 7,500,000 --
of $3,750,000 due August 1996 and December
1996 with interest payable monthly at
Prime plus 1.25% or LIBOR plus 3.00%
Revolving portion payable in full in
December 2000 with interest payable monthly 860,000 --
at Prime plus .75% or LIBOR plus 2.50%
Mortgage payable to a bank, due in monthly 4,000,000 --
installments of principal of $22,000
through November 2002, plus interest on
the declining balance at Prime plus .75%
or LIBOR plus 2.50% with a final payment
of $2,152,000 due December 2002.
Notes payable to banks-term portion. -- 12,420,000
Notes payable to banks-revolving portion. -- 8,277,000
City of New York Industrial Revenue Bond. -- 458,000
City of Los Angeles Industrial Revenue -- 117,000
Bond.
Note payable to Seller. -- 500,000
Mortgage payable to a bank, at a fixed
interest rate of 8.6%, due in monthly
installments of principal of $6,250, plus
interest on the declining balance,
through June 2019.
(See note below.) 1,794,000 1,869,000
Mortgage payable to an insurance company, at a
fixed interest rate of 8.9%, due in monthly
installments of $22,000 through July 2009.
(See note below.) 2,090,000 2,163,000
Note payable to an insurance company, at a
fixed rate of 9.3%, due in monthly
installments of $33,000 through
February 2000. 1,684,000 --
----------- -----------
25,428,000 25,804,000
Less current maturities 5,492,000 11,662,000
----------- -----------
$19,936,000 $14,142,000
----------- -----------
----------- -----------
30
In December 1995, subsequent to year end, the Company entered into a $26
million revolving credit and term loan agreement with a financial
institution, consisting of a $15 million term loan facility and an $11
million revolving credit facility. The term loan portion of the facility is
payable in 59 monthly principal payments of $89,000 through November 2000 and
in payments of $3,750,000 at August 31, 1996, $3,750,000 at December 31, 1996
and $2,249,000 at December 2000. The revolving credit portion of the
facility is due in full in December 2000. If certain assets which
collateralize the debt are sold, a portion of the debt must be repaid from
the proceeds.
Additionally, in November 1995, the Company obtained a $4,000,000 mortgage on
its property located on West 57th Street in New York City, from the Company's
bank lender. The mortgage is payable in equal monthly installments of $22,000
through November 2002, with a final payment of $2,152,000 due in December 2002.
The proceeds of the $15 million term loan, the $4 million mortgage and
$860,000 from the new revolving credit facility, were used to refinance the
term loan ($9,571,000) and revolving credit facility ($9,975,000) and to repay
the City of New York Industrial Revenue Bond obligation ($314,000), all then
outstanding to the Company's bank lenders. As such, the $9,975,000
outstanding on the revolving credit at August 31, 1995 has been reclassified
as long term debt on the accompanying balance sheet to reflect the
refinancing of this obligation. The terms of the agreement provide that the
lender receive a first lien on all property, equipment and accounts
receivable that are not encumbered by another lender.
In June 1994, the Company purchased for $3,500,000 from Scanline the
building occupied by the Editel-Los Angeles division. Financing for the
purchase consisted of a $2,175,000, 25-year mortgage payable to an insurance
company lender, a $500,000 note payable to the seller, Scanline Communications,
and the balance from working capital. The note was paid in full in February
1995.
In October 1993, the Company purchased for $2,800,000 land and a building
located on West 53rd Street, New York City, which has been converted into a
videotape recording studio. Financing for the purchase was obtained from a
capital lease obligation to an equipment leasing company for $2,700,000. In
June 1994, the Company also obtained a mortgage on the West 53rd Street property
in the amount of $1,875,000 from a bank. The mortgage loan is payable in equal
monthly principal payments through June, 2004 with options to extend the
maturity date through June, 2019. Proceeds from this mortgage were used for
working capital purposes.
Property, equipment and accounts receivable with a carrying value of
$66,461,000 at August 31, 1995 are pledged as collateral for all long-term debt
outstanding.
The agreements relating to certain of these long-term obligations include
covenants which, among other terms, place restrictions on the Company as to
capital expenditures and the maintenance of certain financial ratios (including
minimum levels of net worth and debt-to-equity restrictions, all as defined in
the agreements).
31
At August 31, 1995, maturities of long-term debt for the next 5 years after
the December refinancing are as follows:
YEAR ENDED AUGUST 31,
---------------------
1996 $ 5,492,000
1997 5,523,000
1998 1,807,000
1999 1,846,000
2000 5,066,000
2001 and thereafter 5,694,000
-----------
$25,428,000
-----------
-----------
NOTE C - OBLIGATIONS UNDER CAPITAL LEASE AGREEMENTS
The Company has entered into various capital lease agreements for video
equipment. The leases expire at various times through 2000.
Property recorded under capital leases includes the following:
August 31,
1995 1994
Video equipment $10,012,000 $2,690,000
Accumulated depreciation ($1,240,000) ($386,000)
----------- ----------
$ 8,772,000 $2,304,000
----------- ----------
----------- ----------
Future minimum lease payments, as of August 31, 1995 are as follows:
Year Ended Capital
August 31, leases
- ---------- ------
1996 $ 2,327,000
1997 2,274,000
1998 2,237,000
1999 1,707,000
2000 2,049,000
-----------
Net minimum lease payments 10,594,000
Amount representing interest (1,845,000)
-----------
Obligation under capital
lease agreements $ 8,749,000
-----------
-----------
Current portion $ 1,685,000
Long-term portion 7,064,000
-----------
$ 8,749,000
-----------
-----------
32
D. STOCK OPTION PLANS
In January 1983, the Company's shareholders approved adoption of an
Incentive Stock Option Plan (the "Incentive Plan") to grant as many as 181,500
shares primarily to key employees. At August 31, 1995 there were 22,700 options
outstanding. As of October 1992, options were no longer granted under this
plan.
In January 1986, the Company's Board of Directors approved a Non-Statutory
Stock Option Plan (the "Non-Statutory Plan") to grant as many as 50,000 shares
to the Company's non-employee directors. Under the Non-Statutory Plan options
to purchase 30,000 shares were outstanding at August 31, 1995.
In July 1988, the Company's Board of Directors approved a Non-Qualified
Stock Option Plan (the "Non-Qualified Plan") to grant as many as 125,000 shares
primarily to key employees. Options to purchase 105,000 shares granted to
several officers under the Non-Qualified Plan were outstanding at August 31,
1995.
In July 1992, the Company's shareholders approved adoption of the 1992
Stock Option Plan (the "1992 Plan") to grant as many as 350,000 shares primarily
to key employees and non-employee directors. Prior to July 1992, the Company
granted options under the plans described above. All future grants will be
granted under the 1992 Plan. Options to purchase 187,000 shares were
outstanding to key employees and non-employee directors under the 1992 Plan at
August 31, 1995.
Under all plans, options have generally been granted to purchase stock at
the fair market value of the shares at the date of grant as determined by the
Board of Directors. Under the Non-Qualified Plan, the options expire five years
after the date of grant and under the Incentive Plan and Non-Statutory Plan,
options expire ten years after the date of grant.
The status of stock options under the Company's stock option plans is
summarized below:
Number of Option Price
Shares Per Share
------ ---------
Options Outstanding August 31, 1993 326,950 $5.75 - $13.18
Granted 5,000 $6.00
Exercised (250) $5.75
Expired and canceled (92,000) $5.875 - $10.81
-------
Options Outstanding August 31, 1994 239,700 $5.75 - $13.18
-------
-------
Granted 34,000 $6.625 - $7.25
Exercised (5,000) $6.50
Expired and canceled (43,000) $5.875 - $13.18
-------
Options Outstanding August 31, 1995 225,700 $5.75 - $13.18
-------
-------
At August 31, 1995 a total of 322,000 shares were reserved for future
option grants for all plans and options to purchase 225,700 shares were
outstanding.
33
E. EMPLOYEE STOCK OWNERSHIP PLAN
In June 1987, the Employee Stock Ownership Plan (the "ESOP") obtained
financing from a bank amounting to $1,250,000, which was used in acquiring
115,849 shares of newly issued Company stock. The bank loan bears interest at a
fixed rate of 10% and is guaranteed by the Company. The ESOP is funded by
Company contributions as required to provide the ESOP with the funds necessary
to meet its debt service requirements.
The loan obligation of the ESOP is considered unearned employee benefit
expense and is recorded as a separate reduction of the Company's
shareholders' equity. Both the loan obligation and the unearned benefit expense
are reduced by the amount of any loan repayments made by the ESOP. The loan
requires monthly payments of principal and interest of $17,600 through June 1997
at a fixed rate of 10%. The aggregate principal maturities of the ESOP
obligation subsequent to August 31, 1995 are as follows:
1996.............................. $186,000
1997.............................. $152,000
In fiscal 1991, the ESOP purchased 25,810 shares of the Company's Common
Stock. These purchases have been financed by a ten-year loan from the Company
for $229,193. The loan requires monthly payments of principal and interest at
10%. The Company's related receivable from the ESOP has been classified as a
reduction of shareholders' equity.
401(k) EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN
Effective July 1, 1992, the ESOP merged into the Unitel Video, Inc.
Retirement Investment Plan (a 401(k) Plan), which became the Unitel Video, Inc.
401(k) Employee Savings and Stock Ownership Plan (the "Plan"). The Plan
requires the Company to match employee contributions to the 401(k) portion of
the Plan in shares of the Company's Common Stock up to the maximum amount set
forth in the Plan. The minimum contribution required to be made each year by
the Company is the amount necessary to meet its debt service requirements. The
Plan combines a 401(k) plan with certain features of an employee stock ownership
plan.
Total contributions to the ESOP and the Plan for each of the years ended
August 31 are as follows:
1995 ............................. $336,000
1994 ............................. $253,000
1993 ............................. $271,000
The Company adopted Statement of Position 93-6 (SOP 93-6), "Employers'
Accounting for Employee Stock Ownership Plans" during 1995. In accordance with
SOP 93-6, compensation cost and liabilities associated with providing the
employer's 401(k) match are recognized the way they would be if an ESOP had not
been used to fund the benefit.
34
The Plan's compensation expense was $191,000 for the year ended August 31, 1995.
A summary of the Plan's shares as of August 31, 1995 is as follows:
Allocated shares 75,095
Shares released for allocation 19,234
Unreleased shares 42,939
-------
137,268
-------
Fair value of unreleased shares
at August 31, 1995 $274,000
-------
-------
Prior to adoption of SOP 93-6, the unreleased shares were considered outstanding
for the earnings per share computation. Accordingly, for the year ended August
31, 1995, shares were no longer considered outstanding. The effect of adopting
SOP 93-6 was not material on the net loss, and resulted in a decrease of
approximately 1% on the net loss per share for the twelve months ended August
31, 1995.
F. INCOME TAXES:
Deferred income taxes reflect the tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
and the amounts used for income tax purposes. Significant components of the
Company's deferred tax liabilities and assets are as follows:
August 31,
1995 1994
---- ----
Current portion of deferred tax assets (liabilities)
Employee medical benefits $ 308,000 $ 278,000
Bad debt reserves 452,000 454,000
---------- ----------
760,000 732,000
---------- ----------
Long term portion of deferred
tax assets (liabilities)
Accrued rent 371,000 425,000
Accrued retirement 491,000 417,000
Net assets held for sale 2,534,000 --
Net operating loss
carryforwards 330,000 127,000
ITC carryforwards-Federal
and State (net of valuation
allowance) 386,000 330,000
AMT credit carryforwards 2,570,000 2,565,000
Other - net 211,000 419,000
Tax over book depreciation (5,148,000) (5,030,000)
---------- ----------
1,745,000 (747,000)
---------- ----------
Net deferred tax asset
(liability) $2,505,000 $ (15,000)
---------- ----------
---------- ----------
35
The provision for income taxes is comprised of the following:
Year Ended August 31,
1995 1994 1993
---- ---- ----
Currently payable:
Federal $(270,000) $454,000 $552,000
State 36,000 215,000 158,000
----------- -------- --------
(234,000) 669,000 710,000
Deferred:
Federal (1,610,000) 3,000 (328,000)
State (950,000) (12,000) 83,000
----------- -------- --------
(2,560,000) (9,000) (245,000)
----------- -------- --------
$(2,794,000) $660,000 $465,000
----------- -------- --------
----------- -------- --------
The Company's effective tax rate was (30%) in 1995 43.4% in 1994 and 50.3% in
1993. The components of the reconciliation of the Company's effective tax rate
to the U.S. statutory rate of 34% are as follows:
Year Ended August 31,
1995 1994 1993
---- ---- ----
Tax expense computed
at statutory rate $(3,176,000) $ 516,000 $ 314,000
State income tax, net of
Federal income tax
benefit (607,000) 157,000 160,000
Goodwill 649,000 17,000 17,000
Other 340,000 (30,000) (26,000)
----------- --------- ---------
Actual tax expense $(2,794,000) $ 660,000 $ 465,000
----------- --------- ---------
----------- --------- ---------
36
The Company's total alternative minimum tax credit carryforward is
approximately $2,570,000, which can be used against the Company's future regular
tax liability.
At August 31, 1995, the Company had available for tax purposes in excess of
$2,000,000 of State of New York tax credits that will expire from August 31,
1996 through August 31, 2002. The State of New York limits the use of these
credits on an annual basis. For financial reporting purposes, a valuation
allowance of $1,900,000 has been recognized to offset the deferred tax assets
related to those carryforwards for fiscal year ended August 31, 1995.
The deferred tax asset relating to the net operating loss carryforward is
attributable to the unused portion of a federal net operating loss generated in
fiscal 1993 of $515,000 which is scheduled to expire in 2008, as well as state
net operating losses generated in fiscal 1995 of various amounts scheduled to
expire at various times through 2008.
Internal Revenue Code Section 382 places a limitation on the utilization of
Federal net operating loss and other credit carryforwards when an ownership
change, as defined by the tax law, occurs. Generally, this occurs when a
greater than 50 percentage point change in ownership occurs. Accordingly, the
actual utilization of the alternative minimum tax credit carryforwards and other
deferred tax assets for tax purposes may be limited annually to the percentage
(about 6%) of the fair market value of the Company at the time of any such
ownership changes.
G. COMMITMENTS AND CONTINGENCIES:
Operating Leases -- The following is a schedule by years of future minimum
rental payments under operating leases that have an initial non-cancelable lease
term in excess of one year:
1996 $ 4,807,000
1997 4,531,000
1998 4,489,000
1999 3,310,000
2000 2,317,000
2001 and thereafter 5,626,000
-----------
$25,080,000
-----------
-----------
The aggregate rental expense for the years ended August 31, 1995, 1994,
and 1993 was $3,867,000, $3,381,000 and $3,627,000, respectively.
The Company maintains cash balances at financial institutions located in
New York, New York, Pittsburgh, Pennsylvania, and Los Angeles, California.
These balances are insured by the Federal Deposit Insurance Corporation up to
$100,000. At August 31, 1995, uninsured amounts held at these financial
institutions were approximately $674,000.
There are various lawsuits claiming amounts against the Company. It is the
opinion of the Company's management that the ultimate liabilities, if any, in
these cases will not have a material effect on the Company's financial
statements.
37
H. INVESTMENT IN AND ADVANCES TO AFFILIATES:
TIME LOGIC SYSTEMS
The Company had a 50% interest in a partnership known as Time Logic Systems
which marketed a device which serves as an editing and synchronization system
during the film-to-tape transfer process. In August 1994, the Company received
a piece of equipment with a value of $189,000 in lieu of all future income from
Time Logic Systems.
COMPUTER GRAPHICS DESIGN
In September 1993, the Company entered into a partnership arrangement with
a computer graphics design firm. During fiscal years 1995 and 1994
respectively, the Company's 50% share of losses were $29,000 and $65,000.
Additionally, the Company had an outstanding loan to the partnership of
$118,000 at August 31, 1995.
I. NET GAIN ON DISPOSITION OF FIXED ASSETS
In June 1990, the Company sold to CBS Inc. a building it owned at 508-510
West 57th Street, New York, New York. The sale price of the property was
$4,650,000 payable in cash at the closing. As part of the transaction, the
Company entered into an Indenture of Lease with CBS, pursuant to which the
Company, as tenant, leased back the premises. The Company recognized a net gain
on the disposition of $2,277,000. In addition, under the provisions of
Financial Accounting Standard No. 98, the Company deferred $922,000 of
additional gain from the sale, representing the present value of the future
minimum rental payment under the portion of the lease which was not subject to
early termination. The balance of the deferred gain of $117,000 was recognized
in the year ended August 31, 1995 as a reduction of rent expense.
The Company has accelerated its efforts to sell equipment which is not
fully utilized. In order to properly reflect the sale of equipment as part of
the Company's operations, in 1995 and 1994, $352,000 and $817,000 of gain on
disposal of assets were included in depreciation expense. Gain on disposal of
assets of $274,000 was reclassified to depreciation expense during August 31,
1993 to conform with the current year presentation.
J. ACCRUED RETIREMENT
Under the terms of employment agreements with two former officers of the
Company, retirement payments are due commencing September 1, 1996. At August
31, 1995, a liability of approximately $1,141,000 has been recorded, based upon
the present value of these payments. Approximately $172,000, $206,000 and
$190,000 has been charged to operations for the years ended August 31, 1995,
1994 and 1993, respectively.
K. IMPAIRMENT AND RESTRUCTURING CHARGES
In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" which provides
guidance on when to assess and how to measure impairment of long-lived
assets, certain intangibles and goodwill related to those assets to be held
and used, and for long-lived assets and certain identifiable intangibles to
be disposed of. The Company adopted this statement as of August 31, 1995.
38
The Company has decided to focus its resources toward providing services to
the entertainment and corporate communications areas, which represents the
Company's strength. As part of this strategy, the Company has decided to
sell its Editel New York, Editel Chicago and Editel Los Angeles divisions,
which specialize in the highly competitive commercial advertising portion of
the video facilities industry. During the 1995 fiscal year, the three Editel
divisions incurred a pretax loss of $3,682,000. As a result the Company
identified property, plant and equipment associated with these divisions with
a carrying value of approximately $24,000,000 that it no longer needed for
its current and future operations, and during the fourth quarter of fiscal
1995 committed to a plan to dispose of them. Accordingly, the Company began
marketing these divisions to potential buyers and plans to sell them.
Although the Company intends to sell these assets within one year there is
no assurance that it will be able to do so, accordingly these assets are
classified in the balance sheet as long-term. The Company estimated the
revised value to be approximately $19,300,000. Accordingly, the Company
recorded an impairment charge of approximately $4,700,000 in 1995 on these
assets, which was included in impairment charges. The Company intends to
operate these divisions until a sale is consummated.
The Company reevaluated its investment in its Windsor division in the
fourth quarter of fiscal 1995 and determined that based upon it's operating
results, the goodwill associated with the purchase of this division and certain
property, plant and equipment that will not provide any future benefits to the
Company were impaired. The Company recognized an impairment charge of
approximately $3,000,000 included in impairment charges during the fourth
quarter which represents the remaining balances of these assets.
In May of 1995, the Company adopted a plan to downsize the operations of its
Editel Chicago division and reorganize and reduce its corporate management which
resulted in recording a restructuring charge of $400,000 for severance and early
retirement expense. In fiscal 1995, the restructuring liability was reduced by
approximately $127,000 as a result of retirement and severance payments made
during the year. As of August 31, 1995, the balance of the restructuring
liability was approximately $273,000 and is included in accrued payroll.
L. QUARTERLY FINANCIAL DATA (UNAUDITED)
Year Ended Primary Net
August 31, Gross Net Earnings(Loss)
1995 Sales Profit Earnings(Loss) Per Share
--------------------------------------------------------------------------
1st quarter $21,233,000 $4,548,000 $439,000 $ .17
2nd quarter 20,581,000 3,560,000 50,000 .02
3rd quarter 20,831,000 3,345,000 (798,000) (.31)
4th quarter 20,640,000 2,613,000 (6,238,000) (2.41)
Year Ended Primary Net
August 31, Gross Net Earnings Loss
1994 Sales Profit(1) Earnings(Loss) Per Share
--------------------------------------------------------------------------
1st quarter $21,557,000 $ 5,080,000 $ 735,000 $ .28
2nd quarter 18,806,000 3,144,000 (451,000) (.17)
3rd quarter 20,486,000(1) 4,017,000 230,000 .09
4th quarter 19,649,000 3,866,000 345,000 .13
39
(1) In fiscal 1995 and the fourth quarter of fiscal 1994, gain on sale of
equipment and amortization expense were included in depreciation expense while
in previous years gain on sale and amortization were included in operating
expenses. Since this reclassification was effective in the fourth quarter of
1994, all previous quarters in 1994 have been adjusted to reflect this
reclassification. (See Note I in Notes to Consolidated Financial Statements).
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
OF THE REGISTRANT.
The information required by this item is incorporated herein by
reference to the Company's definitive Proxy Statement relating to the
Registrant's 1996 Annual Meeting of Stockholders to be filed pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item is incorporated herein by
reference to the Company's definitive Proxy Statement relating to the
Registrant's 1996 Annual Meeting of Stockholders to be filed pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item is incorporated herein by
reference to the Company's definitive Proxy Statement relating to the
Registrant's 1996 Annual Meeting of Stockholders to be filed pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended.
ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTION.
The information required by this item is incorporated herein by
reference to the Company's definitive Proxy Statement relating to the
Registrant's 1996 Annual Meeting of Stockholders to by filed pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended.
40
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on
FORM 8-K
(a) 1. The following financial statements of the Company are
included in Part II, Item 8:
Page
Report of Grant Thornton LLP Independent Auditors.......................19
Consolidated Balance Sheets - August 31, 1995 and 1994...............20-21
Consolidated Statements of Operations - Years Ended
August 31, 1995, 1994, and 1993....................................22-23
Consolidated Statement of Stockholders' Equity - Years
Ended August 31, 1995, 1994 and 1993...............................24
Consolidated Statements of Cash Flows -
Years Ended August 31, 1995, 1994 and 1993.........................25-27
Notes to Consolidated Financial Statements...........................28-39
2. The following schedules are included
in Part IV:
Consolidated Financial Statement
Schedules
Schedule II - Valuation and Qualifying Accounts and Reserves...46
All other schedules are omitted because they are not applicable, not
required or the required information is included in the consolidated financial
statements or notes thereto.
(b) Reports on Form 8-K. No reports on Form 8-K were filed by
the Company during the three months ended August 31, 1995.
(c) Exhibits required to be filed by Item 601 of Regulation S-K:
1. Exhibit 3(A). Certificate of Incorporation, as amended
(incorporated by reference to Exhibit 3(A) of the Registrant's Annual Report on
Form 10-K filed November 24, 1992 (File No. 1-8654)).
2. Exhibit 3(B). Amended and Restated By-laws.
3. Exhibit 4(A). Specimen of Stock Certificate (incorporated by
reference to Exhibit 4 of the Registrant's Annual Report on form 10-K filed
November 29, 1984 (File No. 1-8654)).
4. Exhibit 4(B). Amended and Restated Loan and Security
Agreement dated as of December 12, 1995 among Unitel Video, Inc., R Squared
Inc., and Heller Financial, Inc. as agent and lender.
5. Exhibit 4(c). Second Amended and Restated Credit
Agreement dated as of December 12, 1995 between Unitel Video, Inc. and The
Chase Manhattan Bank, N.A.
6. Exhibit 10. Material Contracts:
41
10(A) Non-Qualified Stock Option Plan of Unitel Video, Inc.
(incorporated by reference to Exhibit 10(A) of the Registrant's Annual Report on
form 10K filed November 26, 1990 (File No. 1-8654)).*
10(B) Lease Agreement between Unitel Video, Inc. and Educational
Broadcasting Corporation dated July 16, 1993 (incorporated by reference to
Exhibit 10(B) of the Registrant's Annual Report on Form 10-K filed November 26,
1993 (File No. 1-8654)).
10(C) Non-Statutory Stock Purchase Plan of Unitel Video, Inc.
(incorporated by reference to Exhibit 4.3 of the Registrant's Registration
Statement on Form S-8 filed July 15, 1986 (File No. 33-7306)).*
10(D) Employee Stock Purchase Plan of Unitel Video, Inc.
(incorporated by reference to Exhibit 4 of the Registrant's Registration
Statement on Form S-8 filed April 20, 1987 (File No. 33-13660)).*
10(E) Incentive Stock Option Plan of Unitel Video, Inc. adopted
by shareholders on January 17, 1983 (incorporated by reference to Item
16(a)10(g) of the Registrant's Registration Statement on Form S-1 filed on May
6, 1983 (File No. 2-83568)).*
10(F) Employment & Consulting Agreement between Unitel Video,
Inc. and Herbert Bass, dated as of May 26, 1988 (incorporated by reference to
Exhibit 10(R) of Registrant's Annual Report on Form 10-K filed December 13, 1989
(File No. 1-8654)).*
10(G) Employment & Consulting Agreement between Unitel Video,
Inc. and Alex Geisler, dated as of May 26, 1988 (incorporated by reference to
Item 14(C)4(S) of the Registrant's Annual Report on form 10K filed December 13,
1989 (File No. 1-8654)).*
10(H) Lease Agreement between UNV, Inc., and HBWC Limited
Partnership, dated as of August 12, 1988 (incorporated by reference to Exhibit
10(U) of the Registrant's Annual Report on Form 10-K filed December 13, 1989
(File No. 1-8654)).
10(I) Lease Agreements between Windsor Video, Inc. and Time
Equities Inc., dated as of September 4, 1986 (incorporated by reference to
Exhibit 10(V) of the Registrant's Annual Report on form 10-K filed December 13,
1989 (File No. 1-8654)).
10(J) Amendment to each Lease Agreement between Windsor Video,
Inc. and Time Equities Inc., dated as of July 13, 1994 and July 18, 1994.
(incorporated by reference to Exhibit 10(K) of the Registrant's Annual Report on
form 10-K filed November 28, 1994. (File No. 1-8654)).
10(K) Lease Agreement between Unitel Video, Inc. and CBS, Inc.
dated as of June 15, 1990 (incorporated by reference to Exhibit 10(Y) of the
Registrant's Annual Report on Form 10-K filed November 26, 1990 (File No. 1-
8654)).
10(L) Assumption and Assignment of Lease between Unitel Video,
Inc. and VCA/Teletronics Inc. dated May 19, 1990 (incorporated by reference to
Exhibit 10(AA) of the Registrant's Annual Report on Form 10-K filed November 26,
1990 (File No. 1-8654)).
42
10(M) Amendment to Lease between Unitel Video, Inc. and Stage 57
Co. dated May 14, 1990 (incorporated by reference to Exhibit 10(BB) of the
Registrant's Annual Report on Form 10-K filed November 26, 1990 (File No. 1-
8654)).
10(N) Second Amendment to Lease between Unitel Video, Inc. and
Stage 57 Co. dated as of May 1, 1994. (incorporated by referencce to Exhibit
10(O) of the Registrant's Annual Report on Form 10-K filed November 28, 1994.
(File No. 1-8654)).
10(O) 1992 Stock Option Plan (incorporated by reference to
Exhibit 10(R) of the Registrant's Annual Report on Form 10-K filed November 24,
1992 (File No. 1-8654)).*
10(P) Indenture dated April 16, 1987 between La Salle National
Bank, as Trustee under Trust No. 52082, as Lessor and Scanline Communications as
Lessee (incorporated by reference to Exhibit 10(T) of the Registrant's Annual
Report on Form 10-K filed November 24, 1992 (File No. 1-8654)).
10(Q) Amendment to Lease & Extension Agreement dated as of March
15, 1991 between La Salle National Trust, N.A., as successor trustee to LaSalle
National Bank, under Trust No. 52082, as Lessor, and Scanline Communications, as
Lessee (incorporated by reference to Exhibit 10(U) of the Registrant's Annual
Report on Form 10-K filed November 24, 1992 (File No. 1-8654)).
10(R) Assignment, Assumption and Acceptance of Lease between
Scanline Communications and Unitel Video, Inc. (incorporated by reference to
Exhibit 10(V) of the Registrant's Annual Report on Form 10-K filed November 24,
1992 (File No. 1-8654)).
10(S) Asset Purchase Agreement dated as of May 5, 1992 between
Unitel Video, Inc. and Scanline Communications (incorporated by reference to
Exhibit 2.1 of the Registrant's Current Report on Form 8-K dated May 15, 1992
(File No. 1-8654)).
10(T) Amendment dated as of October 29, 1992 to Asset Purchase
Agreement dated as of May 5, 1992 between Unitel Video, Inc. and Scanline
Communications (incorporated by reference to Exhibit 10(X) of the Registrant's
Annual Report on Form 10-K filed November 24, 1992 (File No. 1-8654)).
10(U) Lease Agreement between First East Associates and Unitel
Video, Inc. dated May 26, 1993 and Sublease dated May 26, 1993 between Unitel
Video, Inc. and KIngWorld Productions, Inc.(incorporated by reference to Exhibit
10(U) of the Registrant's Annual Report on Form 10-K filed November 26, 1993
(File No. 1-8654)).
10(V) Sublease Agreement dated April 1, 1987 between R.E.
Graphics, Inc. (f/k/a Micor, Inc.) and Scanline Communications, together with
Modification dated February 1989 of Sublease Agreement (incorporated by
reference to Exhibit 10(AA) of the Registrant's Annual Report on Form 10-K filed
November 24, 1992(File No. 1-8654)).
43
10(W) Sublease Agreement dated January 1, 1982 between Columbia
Pictures Industries, Inc. and Bell & Howell/Columbia Pictures Video Services,
together with letter dated April 3, 1989 from Columbia Pictures to Scanline
Communications and undated Letter from Columbia Pictures to 43rd Street Estates
Corp. (incorporated by reference to Exhibit 10(BB) of the Registrant's Annual
Report on Form 10-K filed November 24, 1992 (File No. 1-8654)).
10(X) 401K Employee Savings and Stock Ownership Plan of Unitel
Video, Inc. effective 7/1/92 (incorporated by reference to Exhibit 10(X) of the
Registrant's Annual Report on Form 10-K filed November 26, 1993 (File No. 1-
8654)).*
10(Y) Asset Purchase Agreement dated as of February 24, 1995
between Jee See & Co., Inc. and Unitel Video, Inc. (incorporated by reference to
Exhibit 2-1 of the Registrant's Current Report on Fgorm 8-K dated February 24,
1995 (File No. 1-8654)).
10(Z) Lease Amendment dated as of January 26, 1995 between
Putnam Publishing Company and Unitel Video, Inc.
10(A)(A) Employment and Consulting Agreement dated as of July
19, 1995 between Unitel Video, Inc. and John Hoffman*
8. Exhibit 23. Accountant's consent.
9. Exhibit 24. Power of Attorney from officers and directors to
David Micciulla and Barry Knepper (included on signature page).
10. Exhibit 27. Financial Data Schedule.
* Management contract or compensatory plan or arrangement required to be noted
as provided in Item 14(a)(3).
44
UNDERTAKING
The Company hereby undertakes to furnish to the Securities and Exchange
Commission, upon request, all constituent instruments defining the rights of
holders of long-term debt of the Company and its consolidated subsidiaries not
filed herewith. Such instruments have not been filed since none are, nor are
being, registered under Section 12 of the Securities and Exchange Act of 1934
and the total amount of securities authorized under any of such instruments does
not exceed 10% of the total assets of the Company and its subsidiary on a
consolidated basis.
45
UNITEL VIDEO, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
COLUMN A COLUMN B COLUMN C1 COLUMN D COLUMN E
-------- -------- --------- -------- --------
Balance at Charged to Balance
Beginning Costs and at End
Description of Period Expenses Deductions of Period
----------- --------- -------- ---------- ---------
YEAR ENDED AUGUST 31, 1995
Allowance for doubtful
accounts $690,000 $125,000 $129,000 $686,000
-------- -------- -------- --------
-------- -------- -------- --------
YEAR ENDED AUGUST 31, 1994
Allowance for doubtful
accounts $676,000 $386,000 $372,000 $690,000
-------- -------- -------- --------
-------- -------- -------- --------
YEAR ENDED AUGUST 31, 1993
Allowance for doubtful
accounts $786,000 $418,000 $528,000 $676,000
-------- -------- -------- --------
-------- -------- -------- --------
Column D
- --------
Uncollectible accounts written off.
Column E
- ---------
Deducted in balance sheet from accounts receivable.
46
For the purposes of complying with the amendments to the rules governing Form S-
8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned
Registrant hereby undertakes as follows, which undertaking shall be incorporated
by reference into registrant's Registration Statement on form S-8 Nos. 33-7306
(filed July 15, 1986), 33-13660 (filed April 20, 1987) and 33-14654 (filed May
28, 1987).
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding ) is asserted by such directors, officers or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1993 and will be governed by the final adjudication of such issue.
47
SIGNATURE AND POWER OF ATTORNEY
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
UNITEL VIDEO, INC.
December 14, 1995 By: /s/ David Micciulla
--------------------------
David Micciulla
Chief Executive Officer
48
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Micciulla and Barry Knepper and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this report, and to
file the same, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes he might or could do in person,
hereby ratifying and confirming all that said attorneys-in fact and agents, or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
49
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on
the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ David Micciulla Chief Executive Officer, December 14, 1995
- -------------------------
David Micciulla President and Director
/s/ Barry Knepper Senior Vice President - December 14, 1995
- -------------------------
Barry Knepper Finance and Administration,
Treasurer (Principal
Financial and Accounting
Officer), and Director
/s/ Herbert Bass Director December 14, 1995
- -------------------------
Herbert Bass
/s/ Alex Geisler Director December 14, 1995
- -------------------------
Alex Geisler
/s/ Walter G. Arader Director December 14, 1995
- -------------------------
Walter G. Arader
/s/ Philip Birsh Director December 14, 1995
- -------------------------
Philip Birsh
/s/ Director December 14, 1995
- -------------------------
John Hoffman
50
COMMISSION FILE NO. 1-8654
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
to
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED AUGUST 31, 1995
UNITEL VIDEO, INC.
UNITEL VIDEO, INC.
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION PAGE
3(A) Certificate of Incorporation, as
amended(incorporated by reference
to Exhibit 3(A) of the Registrant's
Annual Report on Form 10-K filed
November 24, 1992 (File No. 1-8654)).
3(B)+ Amended and Restated By-laws.
4(A) Specimen of Stock Certificate
(incorporated by reference to Exhibit
4 of the Registrant's Annual Report on
form 10-K filed November 29, 1984
(File No. 1-8654)).
4(B)+ Amended and Restated Loan and
Security Agreement dated as of
December 12, 1995 among Unitel
Video, Inc., R Squared, Inc. and
Heller Financial Inc. as agent
and lender.
4(C)+ Second Amended and Restated
Credit Agreement dated as of
December 12,1995 between Unitel
Video, Inc. and The Chase
Manhattan Bank, N.A.
10(A) Non-Qualified Stock Option Plan
of Unitel Video, Inc.
(incorporated by reference to
Exhibit 10(A) of the Registrant's
Annual Report on form 10K filed
November 26, 1990
(File No. 1-8654)).*
10(B) Lease Agreement between Unitel
Video, Inc. and Educational
Broadcasting Corporation dated
July 16, 1993 (incorporated by
reference to Exhibit 10(B) of the
Registrant's Annual Report on
Form 10-K filed November 26, 1993
(File No. 1-8654)).
10(C) Non-Statutory Stock Purchase
Plan of Unitel Video, Inc.
(incorporated by reference to
Exhibit 4.3 of the Registrant's
Registration Statement on Form
S-8 filed July 15, 1986
(File No. 33-7306)).*
10(D) Employee Stock Purchase Plan of
Unitel Video, Inc. (incorporated
by reference to Exhibit 4 of the
Registrant's Registration Statement
on Form S-8 filed April 20, 1987
(File No. 33-13660)).*
10(E) Incentive Stock Option Plan of
Unitel Video, Inc. adopted by
shareholders on January 17, 1983
(incorporated by reference to Item
16(a)10(g) of the Registrant's
Registration Statement on Form S-1
filed on May 6, 1983
(File No. 2-83568)).*
10(F) Employment & Consulting Agreement
between Unitel Video, Inc. and
Herbert Bass, dated as of May 26,
1988 (incorporated by reference to
Exhibit 10(R) of Registrant's
Annual Report on Form 10-K filed
December 13, 1989
(File No. 1-8654)).*
10(G) Employment & Consulting Agreement
between Unitel Video, Inc. and
Alex Geisler, dated as of May 26,
1988 (incorporated by reference to
Item 14(C)4(S) of the Registrant's
Annual Report on form 10K filed
December 13, 1989
(File No. 1-8654)).*
10(H) Lease Agreement between UNV, Inc.,
and HBWC Limited Partnership,
dated as of August 12, 1988
(incorporated by reference to
Exhibit 10(U) of the Registrant's
Annual Report on Form 10-K filed
December 13, 1989 (File No.
1-8654)).
10(I) Lease Agreements between Windsor
Video, Inc. and Time Equities
Inc., dated as of September 4,
1986 (incorporated by reference
to Exhibit 10(V) of the
Registrant's Annual Report on
form 10-K filed December 13, 1989
(File No. 1-8654)).
10(J) Amendment to each Lease Agreement
between Windsor Video, Inc. and
Time Equities Inc., dated as of
July 13, 1994 and July 18, 1994.
(incorporated by reference to
Exhibit 10(K) of the Registrant's
Annual Report on form 10-K filed
November 28, 1994. (File No. 1-8654)).
10(K) Lease Agreement between Unitel
Video, Inc. and CBS, Inc. dated
as of June 15, 1990 (incorporated
by reference to Exhibit 10(Y)
of the Registrant's Annual Report
on Form 10-K filed November 26,
1990 (File No. 1-8654)).
10(L) Assumption and Assignment of
Lease between Unitel Video, Inc.
and VCA/Teletronics Inc. dated
May 19, 1990 (incorporated by
reference to Exhibit 10(AA) of the
Registrant's Annual Report on
Form 10-K filed November 26, 1990
(File No. 1-8654)).
10(M) Amendment to Lease between Unitel
Video, Inc. and Stage 57 Co. dated
May 14, 1990 (incorporated by
reference to Exhibit 10(BB) of the
Registrant's Annual Report on
Form 10-K filed November 26, 1990
(File No. 1-8654)).
10(N) Second Amendment to Lease between
Unitel Video, Inc. and Stage 57 Co.
dated as of May 1, 1994.
(incorporated by reference to
Exhibit 10(O) of the Registrant's
Annual Report on Form 10-K filed
November 28, 1994.
(File No. 1-8654)).
10(O) 1992 Stock Option Plan
(incorporated by reference to
Exhibit 10(R) of the Registrant's
Annual Report on Form 10-K filed
November 24, 1992
(File No. 1-8654)).*
10(P) Indenture dated April 16, 1987
between La Salle National Bank,
as Trustee under Trust No. 52082,
as Lessor and Scanline
Communications as Lessee
(incorporated by reference to
Exhibit 10(T) of the Registrant's
Annual Report on Form 10-K filed
November 24, 1992
(File No. 1-8654)).
10(Q) Amendment to Lease & Extension
Agreement dated as of March 15,
1991 between La Salle National
Trust, N.A., as successor trustee
to LaSalle National Bank, under
Trust No. 52082, as Lessor, and
Scanline Communications, as Lessee
(incorporated by reference to
Exhibit 10(U) of the Registrant's
Annual Report on Form 10-K filed
November 24, 1992
(File No. 1-8654)).
10(R) Assignment, Assumption and
Acceptance of Lease between
Scanline Communications and Unitel
Video, Inc. (incorporated by
reference to Exhibit 10(V) of the
Registrant's Annual Report on Form
10-K filed November 24, 1992
(File No. 1-8654)).
10(S) Asset Purchase Agreement dated as
of May 5, 1992 between Unitel Video,
Inc. and Scanline Communications
(incorporated by reference to
Exhibit 2.1 of the Registrant's
Current Report on Form 8-K dated
May 15, 1992 (File No. 1-8654)).
10(T) Amendment dated as of October 29,
1992 to Asset Purchase Agreement
dated as of May 5, 1992 between
Unitel Video, Inc. and Scanline
Communications (incorporated by
reference to Exhibit 10(X) of the
Registrant's Annual Report on Form
10-K filed November 24, 1992
(File No. 1-8654)).
10(U) Lease Agreement between First East
Associates and Unitel Video, Inc.
dated may 26, 1993 and Sublease
dated May 26, 1993 between Unitel
Video, Inc. and KingWorld
Productions, Inc.(incorporated by
reference to Exhibit 10(U) of the
Registrant's Annual Report on Form
10-K filed November 26, 1993
(File No. 1-8654)).
10(V) Sublease Agreement dated April 1,
1987 between R.E. Graphics, Inc.
(f/k/a Micor, Inc.) and Scanline
Communications, together with
Modification dated February 1989 of
Sublease Agreement (incorporated by
reference to Exhibit 10(AA) of the
Registrant's Annual Report on Form
10-K filed November 24, 1992
(File No. 1-8654)).
10(W) Sublease Agreement dated January 1,
1982 between Columbia Pictures
Industries, Inc. and Bell &
Howell/Columbia Pictures Video
Services, together with letter
dated April 3, 1989 from Columbia
Pictures to Scanline Communications
and undated Letter from Columbia
Pictures to 43rd Street Estates
Corp. (incorporated by reference to
Exhibit 10(BB) of the Registrant's
Annual Report on Form 10-K filed
November 24, 1992
(File No. 1-8654)).
10(X) 401K Employee Savings and Stock
Ownership Plan of Unitel Video,
Inc. effective 7/1/92 (incorporated
by reference to Exhibit 10(X) of
the Registrant's Annual Report on
Form 10-K filed November 26, 1993
(File No. 1-8654)).*
10(Y) Asset Purchase Agreement dated as
of February 24, 1995 between
Jee See & Co., Inc. and Unitel
Video, Inc. (incorporated by
reference to Exhibit 2-1 of the
Registrant's Current Report on
Form 8-K dated February 24, 1995
(File No. 1-8654)).
10(Z) Lease Amendment dated as of
January 26, 1995 between Putnam
Publishing Company and Unitel
Video, Inc.
10(A)(A)+ Employment and Consulting Agreement
dated as of July 19, 1995 between
Unitel Video, Inc. and John Hoffman*
23+ Accountant's consent.
24 Power of Attorney from officers and
directors to David Micciulla and
Barry Knepper (included on signature
page).
27+ Financial Data Schedule.
+ Filed herewith. All other exhibits are incorporated herein by reference to
the document listed in the parenthetical reference.
* Management contract or compensatory plan or arrangement required to be noted
as provided in Item 14(a)(3).