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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest reported) March 24, 2004
WRC MEDIA INC.
(Exact name of registrant as specified in its charter)
Delaware 333-96119 13-4066536
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
512 Seventh Avenue, 22nd Floor, New York, NY 10018
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 768-1150
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events and Regulation FD Disclosure.
On March 22, 2004, we furnished a Report on Form 8-K to the Securities and
Exchange Commission (the "SEC") in which we described our decision to restate
our previously audited consolidated balance sheets as of December 31, 2001 and
2002, and the related statements of stockholders' deficit and operations for
the years ended December 31, 2001 and 2002, and to amend our 2003 unaudited
financial results that were previously disclosed in a Form 8-K
furnished to the SEC on January 29, 2004. In the March 22, 2004 Form 8-K, we
also described the matters for which we had made the decision to restate and
amend our financial statements and results. In addition, we disclosed in such
Form 8-K that our 2001 financial statements are being reaudited by our
independent auditors, Deloitte & Touche LLP, because the originally issued
2001 financial statements were audited by Arthur Andersen LLP, an audit firm
that has ceased operations. We further disclosed in such Form 8-K that the
reaudit of the 2001 restated financial statements will not be completed when
we file our audited 2002 restated financial statements and our audited 2003
financial statements with the SEC.
As we stated in the Form 8-K furnished to the SEC on March 22, 2004, we
believe that upon furnishing our audited 2003 financial statements to the
holders of our 12 3/4% Senior Subordinated Notes due 2009 (the "Notes") and
filing such statements with the SEC, we will be in compliance with the
information requirements of the indenture for these Notes. We cannot assure
you, however, that the trustee or noteholders will not claim that we are in
breach of the indenture's information requirements, or that after any such
claim is made and the applicable cure period has expired, the trustee or
noteholders will not send a notice to accelerate repayment of the Notes.
If the reaudit of our 2001 financial statements is completed and a report
thereon issued by our independent auditors as required by the indenture prior
to any claim of breach being made, the potential for such a claim would be
eliminated. If a breach of the information requirements of the indenture were
to be claimed and the trustee or holders of at least 25% of the aggregate
principal amount of the Notes were to provide written notice of such breach,
we would vigorously defend against any such claim. Even if such claim of
breach were to prevail, we would have 60 days from the date of written notice
of such claim of breach to cure the breach and avoid an event of default under
the indenture. If the reaudit of our 2001 financial statements is completed
and a report thereon issued by our independent auditors as required by the
indenture prior to the end of the 60 day cure period, the right to accelerate
our Notes or the indebtedness under our credit facility as a result of the
alleged breach of the indenture's information requirements would be
eliminated. We have engaged our independent auditors to perform a reaudit of
the 2001 financial statements and expect to be able to provide our auditors
with the information necessary for them to complete their reaudit prior to the
end of the cure period, if any claim of breach of the indenture's information
requirements is made.
While we are diligently working to provide such documentation, we cannot
assure you that we will be able to provide the information necessary to
complete the reaudit or that the reaudit of the 2001 financial statements will
be completed and a report thereon issued by our independent auditors as
required by the indenture. If there is an event of default under the
indenture, the trustee or holders of at least 25% of the aggregate principal
amount of the Notes would have the right to accelerate payment of our Notes,
and the holders of indebtedness under our credit facility also would have the
right to accelerate payment thereunder. If any such acceleration occurred, we
would not be able to repay the amounts due and such acceleration would have a
material adverse effect on our financial condition and liquidity.
On March 23, 2004, we were advised by our independent auditors that they
intend to include in their audit opinion for our 2002 and 2003 financial
statements an explanatory paragraph to the effect that the potential claim
that we are in breach of the indenture's requirements to furnish
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audited financial statements for 2001 or a potential attempt to accelerate the
payment of such Notes, together with uncertainty as to the timing or ability
to complete a reaudit of the 2001 financial statements and to furnish an
auditors' report as required by the indenture in order to obviate such a
claim, raises substantial doubt about our ability to continue as a going
concern.
If the reaudit of our 2001 financial statements is completed and a report
thereon issued by our independent auditors as required by the indenture prior
to any claim of breach being made under the indenture, then the potential that
such a claim of breach will be made and such uncertainty regarding the
reaudit, will have been eliminated. If a claim of breach is made, but the
reaudit of our 2001 financial statements is completed and a report thereon
issued by our independent auditors as required by the indenture prior to the
end of the 60 day cure period, then the potential that an attempt to
accelerate the Notes is made and such uncertainty regarding the reaudit will
have been eliminated.
* * * * * * *
This Report on Form 8-K contains forward-looking statements, including
statements regarding our expectations, beliefs, intentions or strategies that
involve a number of risks, uncertainties, and assumptions. Additional written
and oral forward-looking statements may be made by us from time to time in SEC
filings and otherwise. We caution readers that results predicted by
forward-looking statements, including, without limitation, those relating to
our future business prospects, revenues, working capital, liquidity, capital
needs, interest costs and income, are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
indicated in the forward-looking statements, including
o risks and uncertainties relating to the our ability to satisfy the
conditions to future borrowings under our revolving credit facility
in order to borrow all or a portion of the remaining additional $4.0
million presently available under the revolving credit facility
until March 31, 2004;
o the risk of default and acceleration in connection with the
furnishing of certain financial statements described above;
o the other factors set forth under the heading "Item 2--Management's
Discussion and Analysis of Financial Condition and Results of
Operations-- Factors That May Affect the Future Results and
Financial Condition" in our Quarterly Report on Form 10-Q filed with
the SEC for the fiscal quarter ended September 30, 2003; and
o other risks and factors identified from time to time in our filings
with the SEC.
The foregoing list of factors should not be construed as exhaustive or as any
admission regarding the adequacy of disclosures made by us prior to the date
hereof. We disclaim any intention or obligation to update or revise
forward-looking statements, whether as a result of new information, future
events or otherwise. Risks and uncertainties relating to our and our
subsidiaries' businesses are set forth in the documents and reports filed by
us from time to time with the SEC. We urge you to read all of our public
filings in addition to this Form 8-K to
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understand our financial condition, liquidity and results of operations.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WRC MEDIA INC.
(Registrant)
Date March 24, 2004 By: /s/ Richard Nota
---------------------------------
Name: Richard Nota
Title: Senior Vice President, Finance
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