-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KEydZQ6L1Tlp4PDXDneLLHDxqf6Eoe32/fPvsfhcOZB3mcW1tfyUVp5rxpMTfwo2 cCooLj0sozPBuj0EW2tibg== 0000930661-97-001856.txt : 19980910 0000930661-97-001856.hdr.sgml : 19980910 ACCESSION NUMBER: 0000930661-97-001856 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970808 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADDVANTAGE MEDIA GROUP INC /OK CENTRAL INDEX KEY: 0000874292 STANDARD INDUSTRIAL CLASSIFICATION: 5040 IRS NUMBER: 731351610 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-10799 FILM NUMBER: 97654325 BUSINESS ADDRESS: STREET 1: 5100 E SKELLY DR STREET 2: MERIDIAN TOWER SUITE 1080 CITY: TULSA STATE: OK ZIP: 74135-6552 BUSINESS PHONE: 9186658414 MAIL ADDRESS: STREET 1: 5100 EAST SKELLY DRIVE STREET 2: MERIDIAN TOWER SUITE 1080 CITY: TULSA STATE: OK ZIP: 74135 10QSB 1 FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [x] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period ________________ to ______________ Commission File number 1-10799 ADDVANTAGE MEDIA GROUP, INC. (Exact name of small business issuer as specified in its charter) OKLAHOMA 73-1351610 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5100 East Skelly Drive Meridian Tower, Suite 1080 Tulsa, Oklahoma 74135-6552 (Address of principal executive office) (Zip Code) (918) 665-8414 (Registrant's telephone number, including area code) NONE (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 --- --- Shares outstanding of the issuer's $.01 par value common stock as of August 1, 1997 is 5,856,584. Transitional Small Business Issuer Disclosure Format (Check one): Yes No x --- --- PART I. FINANCIAL INFORMATION Item 1. Financial Statements ADDVANTAGE MEDIA GROUP, INC. BALANCE SHEETS
June 30, December 31, 1997 1996 ------------ ------------ ASSETS (UNAUDITED) Current assets: Cash and cash equivalents $1,254,362 $ 739,140 Accounts receivable 117,314 991,544 Deferred income taxes 2,299,849 3,288,000 Other current assets 43,816 21,166 ---------- ---------- Total current assets 3,715,341 5,039,850 Property and equipment, at cost: Calculators 2,421,224 2,157,010 Office and production equipment 701,554 478,274 Furniture and fixtures 89,586 80,320 ---------- ---------- 3,212,364 2,715,604 Accumulated depreciation 522,447 482,179 ---------- ---------- 2,689,917 2,233,425 Deferred income taxes -- 41,000 Patent, net of accumulated amortization of $581,747 and $536,349 at June 30, 1997 and December 31, 1996, respectively 326,363 371,771 Deferred charges 101,214 37,489 ---------- ---------- Total assets $6,832,835 $7,723,535 ========== ==========
-1- ADDVANTAGE MEDIA GROUP, INC. BALANCE SHEETS
June 30, December 31, 1997 1996 ------------ ------------- LIABILITIES AND STOCKHOLDERS' EQUITY (UNAUDITED) Current liabilities: Note payable to bank $ -- $ 1,156,656 Accounts payable 517,067 573,029 Accrued interest 119,171 138,505 Accrued settlement obligation 282,258 567,848 Other accrued liabilities 212,827 530,707 Accrued preferred stock dividends 107,849 432,850 Unearned advertising revenue 409,920 819,836 ----------- ----------- Total current liabilities 1,649,092 4,219,431 Long-term obligations 168,336 108,600 Deferred income taxes 359,000 359,000 Shareholders' equity: Preferred stock, $1.00 par value, 1,000,000 shares authorized; Series A preferred stock--227,750 shares issued and outstanding at June 30, 1997 and December 31, 1996; liquidation preference, $911,000 760,260 760,260 Common stock, $.01 par value, 10,000,000 shares authorized, 5,856,584 and 5,731,089 issued and outstanding at June 30, 1997 and December 31, 1996, respectively 58,566 57,311 Capital in excess of par value 8,781,413 8,753,869 Accumulated deficit (4,943,832) (6,534,936) ----------- ----------- Total stockholders' equity 4,656,407 3,036,504 ----------- ----------- Total liabilities and stockholders' equity $ 6,832,835 $ 7,723,535 =========== ===========
-2- ADDVANTAGE MEDIA GROUP, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended June 30, -------------------------- 1997 1996 ------------ ------------ Revenues: Advertising sales $2,869,424 $1,375,830 Other 6,465 3,990 ---------- ---------- 2,875,889 1,379,820 Costs and expenses: Cost of advertising services 978,302 399,806 Selling expenses 157,261 50,198 General and administrative expenses 392,968 346,200 ---------- ---------- 1,528,531 796,204 ---------- ---------- Operating income 1,347,358 583,616 Interest expense 20,477 135,116 ---------- ---------- Income before provision for income taxes 1,326,881 448,500 Provision for income taxes 512,932 163,899 ---------- ---------- Net income 813,949 284,601 Preferred stock dividends (22,650) (27,623) ---------- ---------- Net income applicable to common stock $ 791,299 $ 256,978 ========== ========== Net income per common share $0.12 $0.04 ========== ========== Shares used in computing net income per common share 6,343,188 5,798,839 ========== ==========
-3- ADDVANTAGE MEDIA GROUP, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Six Months Ended June 30, -------------------------- 1997 1996 ------------ ------------ Revenues: Advertising sales $5,707,316 $1,980,630 Other 8,821 6,259 ---------- ---------- 5,716,137 1,986,889 Costs and expenses: Cost of advertising services 1,907,042 620,609 Selling expenses 267,752 56,155 General and administrative expenses 811,972 612,520 ---------- ---------- 2,986,766 1,289,284 ---------- ---------- Operating income 2,729,371 697,605 Interest expense 63,815 266,227 ---------- ---------- Income before provision for income taxes 2,665,556 431,378 Provision for income taxes 1,029,151 163,899 ---------- ---------- Net income 1,636,405 267,479 Preferred stock dividends (45,301) (55,246) ---------- ---------- Net income applicable to common stock $1,591,104 $ 212,233 ========== ========== Net income per common share $0.25 $0.04 ========== ========== Shares used in computing net income per common share 6,320,154 5,680,109 ========== ==========
-4- ADDVANTAGE MEDIA GROUP, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30, -------------------------- 1997 1996 ------------- ----------- OPERATING ACTIVITIES Net income $ 1,636,405 $ 267,479 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income tax 1,029,151 163,900 Depreciation and amortization 251,879 122,930 Accrual of long-term obligations 59,736 54,300 Changes in assets and liabilities: Accounts receivable 874,229 4,183 Other current assets (22,650) (32,125) Deferred charges (63,725) (60,458) Accounts payable (55,964) (41,970) Accrued interest (19,334) 236,107 Accrued settlement obligation (285,588) 25,558 Other accrued liabilities (317,880) 51,210 Unearned advertising revenue (409,916) 276,750 ----------- ---------- Net cash provided by operating activities 2,676,343 1,067,864 INVESTING ACTIVITIES Purchases of property and equipment (662,963) (731,700) ----------- ---------- Net cash used in investing activities (662,963) (731,700) FINANCING ACTIVITIES Proceeds from issuance of bank notes -- 180,032 Payment on bank note (1,156,656) -- Payment of preferred stock dividends (370,301) -- Exercise of options and warrants 28,799 436,312 ----------- ---------- Net cash provided (used in) by financing activities (1,498,158) 616,344 ----------- ---------- Increase in cash 515,222 952,508 Cash at beginning of period 739,140 20,444 ----------- ---------- Cash at end of period $ 1,254,362 $ 972,952 =========== ========== Supplemental disclosures of cash information: Interest paid $ 83,072 $ 361 =========== ==========
-5- NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, the information furnished reflects all adjustments, consisting only of normal recurring adjustments which are, in the opinion of management, necessary in order to make the financial statements not misleading. NOTE 2 - DESCRIPTION OF BUSINESS The Company markets and sells in-store advertising to national advertisers. The advertising is positioned on the Company's solar powered calculators attached to the handles of mass merchants' shopping carts. The calculators are patented and registered under the trademark "Shoppers Calculators." On September 1, 1995, the Company and Wal-Mart Stores, Inc. ("Wal-Mart") entered into a four-year contract under which the Company will install and maintain Shoppers Calculators(R) in all of Wal-Mart's Supercenters in the continental United States and Wal-Mart is responsible for selling the advertising for the calculators during the initial phase of the contract. During the term of the contract in which Wal-Mart is responsible for selling the advertising, Wal-Mart has agreed to guarantee advertising revenues to the Company of $23.5 million, subject to the Company's obligation to install and service the Shoppers Calculators(R) during the revenue guaranty period. After the Company has received payment of the total guaranteed advertising revenues, the Company has the option to continue the contract and assume the advertising sales responsibilities for the program. If the Company elects to continue the contract, the program will then continue on this basis for a fixed period of time, and upon conclusion of the term of the contract, the program will be subject to re-evaluation by both parties. Through June 30, 1997, cumulative advertising revenues have totaled $12,847,275, reducing the guaranteed advertising revenues to be received in future periods to $10,647,255. Certain terms of the contract were determined based on the following assumed schedule with respect to the number of Supercenter stores to be participating in the Company's program. The following table sets forth the assumed schedule of Supercenter installations pursuant to the Wal-Mart contract's operating plan and the actual installations in Supercenters to date. -6-
Shopping Shopping Stores to Carts to Stores Carts Year be Added be Added Installed Installed - - ------ --------- -------- --------- --------- 1995 33 39,600 41 31,925 1996 200 240,000 286 234,041 1997 100 120,000 /(1)/ 1998 100 120,000 N/A N/A --- ------- 433 519,600 === =======
- - -------------------- (1) The Company currently plans to commence installations during the fall of 1997. On November 22, 1996, the Company completed the redemption of its 600,000 outstanding Common Stock Purchase Warrants that were set to expire on December 31, 1996. A total of 582,907 Warrants, or 97%, were exercised with gross proceeds aggregating $2,331,628. From the net proceeds, the Company paid $2,000,000 of its outstanding bank debt in December 1996. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The Company entered into a contract with Wal-Mart effective as of September 1, 1995, whereby the Company will install and maintain its Shoppers Calculators in all of Wal-Mart's Supercenter stores in the continental United States. Under the contract, Wal-Mart is obligated to pay the Company $2,700 per installed store, per four-week advertising cycle, until a total of approximately $23,500,000 has been received by the Company. Wal-Mart Supercenter store installations commenced in October 1995 with 41 stores being installed by year- end. During 1996 a total of 286 additional stores were installed bringing total installations to 327 by the end of 1996. No additional stores are scheduled for installation until late 1997. -7- THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996 Advertising revenues increased approximately $1,493,600 (109%) for the three months ended June 30, 1997 as compared to the same period in 1996. During the second fiscal quarter of 1997, an average of 327 stores contributed revenue for the quarter as compared to 157 for the second quarter of 1996. The significant increase in revenues improved operating income (income before interest, taxes and preferred stock dividends) by $763,700 in the second quarter of 1997 as compared to last year's second quarter. The Company's net income applicable to common stock was $791,000 for 1997 second quarter, as compared to a net income of $257,000 for the same period last year. As a result of implementation of the new Wal-Mart contract, 1995 earnings were increased by $3,910,000 from the accounting recognition of the future tax benefits of the Company's net operating losses and temporary differences aggregating $10,290,000 at December 31, 1995. The 1997 tax expense of $513,000 reflects the amortization of the deferred tax asset recognized in 1995. Costs of advertising services (representing primarily labor to supervise, service and clean the installed units, to change advertising messages and depreciation of installed units) increased approximately $578,500 (145%) in the second quarter of 1997 as compared to the same period in 1996 as a result of higher labor costs, printing costs and depreciation due to the increase in the number of calculators installed and serviced during the respective periods. Selling expense increased approximately $107,100 (213%) in the second quarter of 1997. This was primarily due to increases during 1997 in payroll, payroll related expenses, sales representative retainer expenses and marketing materials costs. During the last quarter of 1996, the Company assumed primary responsibility for selling advertising on the Shoppers Calculators installed in Wal-Mart Supercenters. General and administrative expenses increased $46,800 (14%) in the second quarter of 1997 as compared to the same period in 1996. During 1997, payroll and payroll related expenses increased $2,400 as a result of higher compensation levels and increased staff required to administer the Wal-Mart Supercenter contract. Officer and management bonus accruals increased $40,800 in 1997 as compared to the same period in 1996. Executive retirement plan accruals, including insurance cost to fund future payments, decreased $15,800 during 1997. Expenses related to broker and analyst meetings and other shareholder expenses increased $9,300 over 1996. Increases amounting to $10,100 occurred in professional fees, occupancy costs, business taxes and other expenses. Interest expenses decreased approximately $114,600 (85%) during the second quarter of 1997 as compared to the same period in 1996. Interest on bank borrowings decreased $94,100 due primarily to significantly lower levels of bank borrowing during 1997. Vendor interest was $7,600 lower in 1997 as compared to 1996. Interest accrued on amounts due investors, including the accretion of discount for the litigation settlement, decreased $12,900 during the second quarter of 1997 as compared to 1996. -8- SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996 Advertising revenues increased approximately $3,726,700 (188%) for the six months ended June 30, 1997 as compared to the same period in 1996. During the first six months of 1997, an average of 327 stores contributed revenue for the quarter as compared to 113 for the same period in 1996. The significant increase in revenues improved operating income (income before interest, taxes and preferred stock dividends) by $2,031,800 during the first six months of 1997 as compared to the same period in 1996. The Company's net income applicable to common stock was $1,591,100 for the 1997 first six months, as compared to a net income of $212,200 for the same period last year. As a result of implementation of the new Wal-Mart contract, 1995 earnings were increased by $3,910,000 from the accounting recognition of the future tax benefits of the Company's net operating losses and temporary differences aggregating $10,290,000 at December 31, 1995. The 1997 tax expense of $1,029,200 reflects the amortization of the deferred tax asset recognized in 1995. Costs of advertising services (representing primarily labor to supervise, service and clean the installed units, to change advertising messages and depreciation of installed units) increased approximately $1,286,400 (207%) in the first six months of 1997 as compared to the same period in 1996 as a result of higher labor costs, printing costs and depreciation due to the increase in the number of calculators installed and serviced during the respective periods. Selling expense increased approximately $211,600 (377%) in the first six months of 1997 compared to the same period in 1996. This was primarily due to increases during 1997 in payroll, payroll related expenses, sales representative retainer expenses and marketing materials costs. During the last quarter of 1996, the Company assumed primary responsibility for selling advertising on the Shoppers Calculators installed in Wal-Mart Supercenters. General and administrative expenses increased $199,500 (33%) in the first six months of 1997 as compared to the same period in 1996. During 1997, payroll and payroll related expenses increased $84,000 as a result of higher compensation levels and increased staff required to administer the Wal-Mart Supercenter contract. Officer and management bonus accruals increased $128,400 in 1997 as compared to the same period in 1996. Executive retirement plan accruals, including insurance cost to fund future payments, decreased $34,400 during 1997. Expenses related to broker and analyst meetings and other shareholder expenses increased $2,000 over 1996. Increases amounting to $19,500 occurred in professional fees, occupancy costs, business taxes and other expenses. Interest expenses decreased approximately $202,400 (76%) during the first six months of 1997 as compared to the same period in 1996. Interest on bank borrowings decreased $172,200 due primarily to significantly lower levels of bank borrowing during 1997. Vendor interest was $9,600 lower in 1997 as compared to 1996. Interest accrued on amounts due investors, including the accretion of discount for the litigation settlement, decreased $20,600 during the first six months of 1997 as compared to 1996. -9- FINANCIAL CONDITION AND LIQUIDITY During the first quarter of 1995, the Company completed an offering of Promissory Notes and Warrants for an aggregate consideration of $200,000. The offering included (a) a total of 500,000 Warrants, each of which, upon exercise, entitled the holder to acquire one share of the Company's Common Stock at a price of $.20 per share, and were exercisable within 20 months from the date of issuance; (b) a total of 10% of the net recovery from the Wal-Mart lawsuit described elsewhere herein; and (c) Promissory Notes in an aggregate principal amount of $200,000 and bearing interest at the rate of 10% per annum due on or before 20 days after the final resolution, by settlement, final judgment or otherwise, of the Wal-Mart litigation. On November 30, 1995, investors holding warrants to purchase 425,000 shares of Common Stock exercised such Warrants by converting Promissory Notes in the principal amount of $85,000 to acquire the shares. At the same date, new Promissory Notes totaling $130,808 (representing $115,000 principal and $15,808 accrued interest on the original notes) were issued. These notes were paid in full at December 31, 1996. The Company entered into separate agreements with Wal-Mart in July 1993 and June 1994 which provided for the installation of the Company's calculators in certain Wal-Mart stores. The July 1993 and June 1994 contracts were never implemented, and on January 18, 1995, the Company filed a lawsuit against Wal-Mart for the alleged breach of the terms of those contracts. On September 1, 1995, the Company and Wal-Mart entered into a new contract and the Company dismissed the lawsuit. Under the terms of new four-year contract, the Company is required to install the Shoppers Calculators in all of Wal-Mart's Supercenters in the continental United States, and Wal-Mart is to sell the advertising for the calculators during the initial phase of the contract. During the term of the contract in which Wal-Mart sells the advertising, Wal- Mart has agreed to guarantee advertising revenues to the Company of approximately $23.5 million subject to the Company's obligation to install and service the Shoppers Calculators during the revenue guaranty period. At the conclusion of the Wal-Mart sales phase, the Company has the option to continue the contract through October 6, 1999, by assuming the advertising sales responsibilities for the program. Upon conclusion of the contract, the program is subject to re-evaluation by both parties. The present value of the amount payable to the participants in the Company's private placement (including Messrs. Hood and Young who provided the initial funding for the lawsuit), who have the right to receive an aggregate of 12% of the net recovery in the Wal-Mart litigation, has been calculated by the Company to be $498,711, excluding accretion of discount, and has been recorded as accrued settlement obligation in the financial statements. In compliance with the terms of the new contract, on October 17, 1995, the Company furnished Wal-Mart with a detailed "operating plan" which projects advertising revenues, capital costs and operating expenses based on the new contract. The purpose of this operating plan was to determine the financial impact of the new contract to the Company, F&M Bank and creditors. The operating plan in its final form covered years 1995, 1996, 1997 and 1998. The key -10- assumptions used to develop the operating plan were provided to the Company by Wal-Mart and were as follows:
SUPERCENTER INSTALLATIONS Year Stores Shopping Carts ---- ------ -------------- 1995 33 39,600 1996 200 240,000 1997 100 120,000 1998 100 120,000 --- ------- Total Installations 433 519,600 === =======
The Wal-Mart contract provided the Company with additional bank financing, which was guaranteed by Wal-Mart, in the amount of $700,000. The note evidencing such financing, including $60,270 of accrued interest, was paid in October 1996. On March 6, 1996, the Company completed a restructuring of all past due bank debt effective as of October 1, 1995. The $1,800,000 revolving line of credit, other notes totaling $1,132,622 and accrued interest through September 30, 1995 of $474,034 were combined into a new note in the amount of $3,406,656. During the fourth quarter of 1996, cash flow from operations and proceeds from the Company's warrant redemption were utilized to reduce the principal amount of the loan by $2,250,000. During the first and second quarters of 1997, the Company amortized the balance of this loan by making principal payments of $751,000 and $406,000, respectively. The Company's first revenue period under the new contract began on November 6, 1995. Through June 30, 1997, cumulative revenues received from Wal-Mart totaled $12,847,275, reducing the guaranteed revenues to be received in future periods to $10,647,255. The Company believes the cash flow from the Wal-Mart contract should allow the Company to meet its anticipated cash requirements for the foreseeable future, including repayment of all past due obligations. During June 1996, certain warrants to purchase up to 60,000 units (each unit consisting of two shares of Common Stock and one Warrant to purchase one share of Common Stock for $4.80 per share) were exercised. These unit Warrants were issued in June 1991 to the selling agent in connection with the Company's initial public offering. A total of 120,000 shares of Common Stock and Warrants to purchase 60,000 shares of Common Stock at $4.80 per share were issued, with net proceeds to the Company amounting to $432,000. The Warrants to purchase 60,000 shares of Common Stock, set to expire on December 31, 1996, were extended to December 31, 1998. During August 1996, 50,000 shares of the Company's Series A, 10% Cumulative Convertible Preferred Stock, including accrued dividends and interest thereon, were converted into 75,532 -11- shares of the Company's Common Stock at the conversion rate of $4.00 per share. As a result of this transaction, stockholders' equity was increased $102,200. On November 22, 1996, the Company completed the redemption of its 600,000 outstanding Common Stock Purchase Warrants that were set to expire on December 31, 1996. A total of 582,907 Warrants, or 97%, were exercised with gross proceeds aggregating $2,331,628. This amount, net of commissions and registration expenses of approximately $260,000, was committed to repayment of the Company's bank debt. From the net proceeds, the Company paid $2,000,000 of its outstanding bank debt in December 1996. FORWARD-LOOKING STATEMENTS Certain statements included in this report which are not historical facts are forward-looking statements, including the information provided with respect to the projected installations of the Shoppers Calculator in the Wal-Mart Supercenters. These forward-looking statements are based on current expectations, estimates, assumptions and beliefs of management; and words such as "expects," "anticipates," "intends," "plans," "believes," "estimates" and similar expressions are intended to identify such forward-looking statements. These forward-looking statements involve risks and uncertainties, including, but not limited to, the Company's dependence on the Wal-Mart contract, the number and rate of new Supercenters constructed by Wal-Mart, general economic conditions and conditions affecting the mass merchandising industry, the availability of raw materials and manufactured components and the Company's ability to fund the costs thereof, the Company's ability to adequately install and service the calculator units as required by the contract, and other factors which may affect the Company's ability to comply with its obligations under the contract. Accordingly, actual results may differ materially from those expressed in the forward-looking statements. -12- PART II--OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS The annual meeting of shareholders of the Company was held in the Meeting Tower Conference Room, Meridian Tower, 4th Floor, 5100 East Skelly Drive, Tulsa, Oklahoma on May 29, 1997. At the meeting the following directors were elected for one year terms (with the votes as indicated):
For Withheld Abstentions/ --------- -------- Broker Non-Votes ---------------- Charles H. Hood 5,477,934 5,500 -0- Gary W. Young 5,477,934 5,500 -0- J. Larri Barrett 5,477,934 5,500 -0- John W. Condon 5,477,934 5,500 -0-
The shareholders approved the proposed amendment to the ADDvantage Media Group, Inc. 1991 Stock Plan (with the votes as indicated): For: 5,236,094 Against: 152,425 Abstentions/Broker Non-Votes: 94,915 The shareholders ratified Tullius, Taylor, Sartain & Sartain as auditors to perform the audit for the fiscal year ending December 31, 1997 (with the votes as indicated): For: 5,475,769 Against: 3,000 Abstentions/Broker Non-Votes: 4,665 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit No. Description ----------- ----------- 11 Statement re: Computation of Per Share Earnings 27 Financial Data Schedule (b) Reports on Form 8-K. None. -13- 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 thereunto duly authorized. ADDVANTAGE MEDIA GROUP, INC. SIGNATURE TITLE DATE - - --------- ----- ---- /s/ GARY W. YOUNG Director, Executive Vice President - August 8, 1997 - - -------------------- Finance and Administration and Gary W. Young Treasurer (Authorized Officer and Principal Financial Officer) -14- EXHIBIT INDEX ------------- EXHIBIT NO. DESCRIPTION ----------- ----------- 11 Statement re: Computation of Per Share Earnings 27 Financial Data Schedule -15- EX-11 2 COMPUTATION OF EARNINGS PER SHARE EXHIBIT 11 COMPUTATION OF EARNINGS PER SHARE Three months ended June 30, 1997
Primary ----------- Net income $ 813,949 Less preferred stock dividends (22,650) ---------- Net income applicable to common stock 791,299 ========== Weighted average shares outstanding 5,856,584 Effect of options and warrants 486,604 ---------- Weighted average common and common equivalent shares 6,343,188 ---------- Net income per common share $0.12 ==========
Six months ended June 30, 1997
Primary ----------- Net income $1,636,405 Less preferred stock dividends (45,301) ---------- Net income applicable to common stock 1,591,104 ========== Weighted average shares outstanding 5,818,385 Effect of options and warrants 501,769 ---------- Weighted average common and common equivalent shares 6,320,154 ---------- Net income per common share $0.25 ==========
EX-27 3 FINANCIAL DATA SCHEDULE
5 3-MOS 6-MOS DEC-31-1997 DEC-31-1997 APR-01-1997 JAN-01-1997 JUN-30-1997 JUN-30-1997 1,254,362 0 0 0 117,314 0 0 0 0 0 3,715,341 0 3,212,364 0 522,447 0 6,832,835 0 1,649,092 0 0 0 0 0 760,260 0 58,566 0 4,656,407 0 6,832,835 0 2,869,424 5,707,316 2,875,889 5,716,137 0 0 978,302 1,907,042 550,229 1,079,724 0 0 20,477 63,815 1,326,881 2,665,556 512,932 1,029,151 813,949 1,636,405 0 0 0 0 0 0 791,299 1,591,104 0.12 0.25 0.12 0.25
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