SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 31, 1997
Wherehouse Entertainment, Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-22289 95-4608339
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
19701 Hamilton Avenue
Torrance, California 90502-1334
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code:
(310) 538-2314
(Former name or former address, if changed since last report)
ITEM 7. FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION
This Current Report on Form 8-K/A amends and supplements the Current
Report on Form 8-K dated February 12, 1997 filed by Wherehouse Dissolution Co.,
the predecessor to the registrant, ("Prior 8-K"). The Prior 8-K reported the
consummation of the acquisition of substantially all of the assets of Wherehouse
Dissolution Co. and its parent WEI Acquisition Co. by the registrant (the
"Acquisition").
(a) The financial statements of Wherehouse Dissolution Co. for the
year ended January 31, 1996, are included by reference from Form 10-K,
previously filed.
(b) Set forth below is the Company's unaudited pro forma condensed
balance sheet at December 31, 1996, and its pro forma condensed statement of
operations for the year ended January 31, 1996 and unaudited pro forma condensed
statement of operations for the eleven-month period ended December 31, 1996.
The historical condensed statement of operations of the Company for the year
ended January 31, 1996 has been derived from the Company's audited financial
statements from that date. The pro forma condensed balance sheet at December
31, 1996 gives effect to the reorganization of Wherehouse Dissolution Co. on
January 31, 1997 as if this reorganization had occurred at December 31, 1996,
and the statements of operations for the year ended January 31, 1996 and for the
eleven-month interim period ended December 31, 1996 give effect to the
reorganization of Wherehouse Dissolution Co. as if the reorganization had
occurred at the beginning of each of the respective periods contained in the pro
forma financial statements by utilizing adjustments described in the
accompanying notes thereto.
The pro forma condensed financial statements may not be indicative of
the Company's actual financial position and results of operations had the
reorganization of Wherehouse Dissolution Co. occurred at the beginning of each
of the periods presented above, nor are the pro forma statements of operations
indicative of the results of operations that may be obtained in future periods.
In the opinion of management, all adjustments necessary for a fair presentation
of the pro forma condensed financial information have been made.
It is suggested that the accompanying pro forma condensed financial
statements be read in conjunction with audited financial statements and
accompanying notes contained in the Company's report on Form 10-K for the year
ended January 31,
1996 and unaudited condensed financial statements and accompanying notes
contained in the Company's reports on Form 10-Q for the periods ended April 30,
1996, July 31, 1996 and October 31, 1996. In addition, the accompanying
financial statements should also be read in conjunction with the Company's
reports on Form 8-K filed on January 7, 1997 and January 31, 1997.
The unaudited pro forma condensed balance sheet at December 31, 1996
and the statements of operations for the year ended January 31, 1996 and the
eleven-month period ended December 31, 1996 follow.
WHEREHOUSE ENTERTAINMENT INC.
Unaudited Pro Forma Condensed Statement of Operations
For the Year Ended January 31, 1996
(in thousands)
Wherehouse
Dissolution Wherehouse Pro Forma Adjusted
Co. Entertainment, Inc. Adjustments Pro Forma
Sales $350,646 $0 $ 0 $350,646
Rental revenue 82,547 0 0 82,547
-------- ---------- -------- ---------
433,193 0 0 433,193
Cost of sales 230,347 0 0 230,347
Cost of rentals, including amortization 40,049 0 0 40,049
-------- ---------- -------- ---------
270,396 0 0 270,396
Selling, general and administrative expenses 167,161 0 0 167,161
Write-down of long-lived assets 1,476 0 0 1,476
Interest expense 15,045 0 0 15,045
Other Income (283) 0 0 (283)
-------- ---------- -------- ---------
Loss before reorganization items and income taxes (20,602) 0 0 (20,602)
Reorganization items
Professional fees 2,470 0 (2,470) (a) 0
Write-off of financing costs and debt discount 8,512 0 (8,512) (a) 0
Provision for store closing costs 6,237 0 (6,237) (a) 0
Provivision for rejected executory contracts 6,000 0 (6,000) (a) 0
-------- ---------- -------- ---------
23,219 0 (23,219) 0
-------- ---------- -------- ---------
Loss before income taxes (43,821) 0 23,219 (20,602)
Provision (benefit) for income taxes 17 0 0 17
-------- ---------- -------- ---------
Net Loss ($43,838) $0 $23,219 ($20,619)
-------- ---------- -------- ---------
-------- ---------- -------- ---------
See accompanying notes to unaudited pro forma condensed financial statements.
WHEREHOUSE ENTERTAINMENT INC.
Unaudited Pro Forma Condensed Balance Sheet
At December 31, 1996
(in thousands)
Wherehouse Wherehouse
Dissolution Entertainment, Pro Forma Adjusted
Co. Inc. Adjustments Pro Forma
----------- -------------- ------------ ---------
ASSETS
Current assets
Cash & cash equivalents $22,780 $0 ($11,012) (b) $11,768
Receivables 2,100 0 0 2,100
Prepaid inventory deposits 4,546 0 0 4,546
Merchandise inventory 91,490 0 0 91,490
Other current assets 4,986 0 0 4,986
-------- ---------- -------- ---------
Total current assets 125,902 0 (11,012) 114,890
Video rental inventory 11,310 0 0 11,310
Net equipment and improvements 24,343 0 0 24,343
Reorganization Value in Excess of Amounts
Allocable to Identifiable Assets 0 0 7,762 (c) 7,762
Leasehold Interest 1,272 0 0 1,272
Other assets 433 0 0 433
-------- ---------- -------- ---------
Total assets $163,260 $0 ($3,250) $160,010
-------- ---------- -------- ---------
-------- ---------- -------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of LTD $806 $0 $0 $806
Trade payables 18,415 0 0 18,415
A/P & accrued exp & cur inc. tax 25,155 0 6,410 (d) 31,565
Additional Plan of Reorganization Payments 0 0 12,753 (d) 12,753
-------- ---------- -------- ---------
Total current liabilities 44,376 0 19,163 63,539
Capital lease obligations & Long term debt 781 0 0 781
Deferred income taxes 3,270 0 (1,770) (e) 1,500
Other long-term liabilities 10,811 0 (10,811) (f) 0
-------- ---------- -------- ---------
Total liabilities not subject to compromise 59,238 0 6,582 65,820
Liabilites subject to compromise
Priority Debt 3,500 0 (10) (g) 3,490
Secured Debt 91,718 0 (91,718) (h) 0
Unsecured Debt 186,941 0 (186,941) (h) 0
-------- ---------- -------- ---------
Total liabilities subject to compromise 282,159 0 (278,669) 3,490
Shareholders' equity
Common stock 95,671 0 369 (i) 96,040
Notes Receivable 0 0 (5,340) (j) (5,340)
Retained Earnings (273,808) 0 273,808 (i) 0
-------- ---------- -------- ---------
Total shareholders' equity (178,137) 0 268,837 90,700
-------- ---------- -------- ---------
Total liabilities and shareholders' equity $163,260 $0 ($3,250) $160,010
-------- ---------- -------- ---------
-------- ---------- -------- ---------
See accompanying notes to unaudited pro forma condensed financial statements.
WHEREHOUSE ENTERTAINMENT INC.
Unaudited Pro Forma Condensed Statement of Operations
For the Eleven Months Ended December 31, 1996
(in thousands)
Wherehouse
Dissolution Wherehouse Pro Forma Adjusted
Co. Entertainment, Inc. Adjustments Pro Forma
Sales $273,417 $0 $ 0 $273,417
Rental revenue 64,000 0 0 64,000
-------- ---------- -------- ---------
337,417 0 0 337,417
Cost of sales 177,962 0 0 177,962
Cost of rentals, including amortization 34,273 0 0 34,273
-------- ---------- -------- ---------
212,235 0 0 212,235
Selling, general and administrative expenses 135,640 0 0 135,640
Interest expense 904 0 0 904
Other Income (215) 0 0 (215)
-------- ---------- -------- ---------
Loss before reorganization items and income taxes (11,147) 0 0 (11,147)
Reorganization items
Professional fees 3,550 0 (3,550) (a) 0
Provision for store closing costs 7,152 0 (7,152) (a) 0
-------- ---------- -------- ---------
10,702 0 (10,702) 0
-------- ---------- -------- ---------
Loss before income taxes (21,849) 0 10,702 (11,147)
-------- ---------- -------- ---------
Provision (benefit) for income taxes 0 0 0 0
-------- ---------- -------- ---------
Net Loss ($21,849) $0 $10,702 ($11,147)
-------- ---------- -------- ---------
-------- ---------- -------- ---------
See accompanying notes to unaudited pro forma condensed financial statements.
NOTES TO UNAUDITED PRO FORMA CONDENSED
FINANCIAL INFORMATION
The following are the pro forma adjustments which reflect the reorganization
of Wherehouse Entertainment, Inc. at January 31, 1996, and for the year then
ended as if this reorganization had occured at February 1, 1995; and at
December 31, 1996, and for the 11 month period as if this reorganization had
occured at February 1, 1996:
(a) To record the elimination of reorganization items related to the Chapter 11
case at 1/31/96 and 12/31/96.
(b) To record certain cash disbursements that were made to eligible trade
suppliers, reclamation claimholders and others, as required by the
Company's Plan of Reorganization ("POR").
(c) To record reorganization value in excess of amounts allocable to
identifiable assets for Wherehouse Entertainment, Inc. as part of the
adoption of fresh start accounting at 12/31/96.
(d) To record additional liabilities related to the Company's reorganization.
(e) To eliminate deferred taxes for Wherehouse Dissolution Co. and to record
initial deferred taxes for Wherehouse Entertainment, Inc.
(f) To eliminate the average rent liability for Wherehouse Dissolution Co.
(g) To record the payment of certain tax claims as required by the Company's
POR.
(h) To eliminate liabilities subject to compromise that were discharged
pursuant to the POR.
(i) To record, (i) the elimination of common stock and retained earnings for
Wherehouse Dissolution Co. and (ii) the issuance of common stock for
Wherehouse Entertainment, Inc.
(j) To record promissory notes from Alvarez & Marsal in the amount of
$5,340,000 issued for the purchase of common stock of Wherehouse
Entertainment, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WHEREHOUSE ENTERTAINMENT, INC.
------------------------------
(Registrant)
/s/ Eliot Cobb
Date: April 16, 1997 By --------------------------
(Signature)
Name: Eliot Cobb
Treasurer and Assistant
Secretary