e10vq
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form
10-Q
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
March 31, 2010
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period
from to
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Commission File
Number 001-34176
ASCENT MEDIA CORPORATION
(Exact name of Registrant as
specified in its charter)
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State of Delaware
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26-2735737
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(State or other jurisdiction
of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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12300 Liberty Boulevard
Englewood, Colorado
(Address of principal
executive offices)
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80112
(Zip Code)
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Registrants telephone number, including area code:
(720) 875-5622
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 þ No o
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, any
Interactive Data File required to be submitted and posted
pursuant to Rule 405 of
Regulation S-T
(Section 232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant
was required to submit and post such files).
Yes o No o
Indicate by check mark whether the Registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer
or a smaller reporting company, as defined in
Rule 12b-2
of the Exchange Act.
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Large accelerated
filer o
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Accelerated
filer þ
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Non-accelerated
filer o
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Smaller reporting
company o
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(Do not check if a smaller
reporting company)
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Indicate by check mark whether the Registrant is a shell company
(as defined in
Rule 12b-2
of the Exchange Act).
Yes o No þ
The number of outstanding shares of Ascent Media
Corporations common stock as of April 30, 2010 was:
Series A
common stock 13,457,149 shares; and
Series B common stock 734,127 shares.
TABLE OF CONTENTS
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
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March 31,
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December 31,
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2010
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2009
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Amounts in thousands
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(Unaudited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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316,539
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292,914
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Trade receivables, net
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86,056
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91,414
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Prepaid expenses
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11,574
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9,756
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Deferred income tax assets, net
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71
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562
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Assets held for sale
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2,817
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Income taxes receivable
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14,247
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17,793
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Other current assets
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1,709
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1,635
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Total current assets
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430,196
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416,891
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Investments in marketable securities (note 2)
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66,608
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56,197
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Property and equipment, net
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179,560
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187,498
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Deferred income tax assets, net
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1,029
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Assets held for sale
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9,261
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Other assets, net
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11,649
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11,607
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Total assets
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$
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688,013
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682,483
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LIABILITIES AND STOCKHOLDERS EQUITY
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Current liabilities:
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Accounts payable
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$
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18,525
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18,731
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Accrued payroll and related liabilities
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19,366
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17,778
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Other accrued liabilities
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21,440
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21,647
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Deferred revenue
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8,599
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8,618
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Liabilities related to assets held for sale
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4,098
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Total current liabilities
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67,930
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70,872
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Deferred income tax liabilities
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1,060
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Other liabilities
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27,490
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29,015
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Total liabilities
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96,480
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99,887
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Commitments and contingencies (note 7)
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Stockholders equity:
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Preferred stock, $.01 par value. Authorized
5,000,000 shares; no shares issued
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Series A common stock, $.01 par value. Authorized
45,000,000 shares; issued and outstanding
13,457,149 shares at March 31, 2010
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135
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134
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Series B common stock, $.01 par value. Authorized
5,000,000 shares; issued and outstanding
734,127 shares at March 31, 2010
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7
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7
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Series C common stock, $.01 par value. Authorized
45,000,000 shares; no shares issued
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Additional paid-in capital
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1,465,497
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1,464,925
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Accumulated deficit
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(868,943
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)
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(878,853
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Accumulated other comprehensive loss
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(5,163
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)
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(3,617
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Total stockholders equity
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591,533
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582,596
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Total liabilities and stockholders equity
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$
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688,013
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682,483
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See accompanying notes to condensed consolidated financial
statements.
2
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and
Comprehensive Income (Loss)
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Three Months Ended
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March 31,
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2010
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2009
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Amounts in thousands, except per share amounts
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(Unaudited)
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Net revenue
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$
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104,519
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115,258
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Operating expenses:
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Cost of services
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74,125
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82,609
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Selling, general, and administrative, including stock-based and
long-term incentive compensation (note 5)
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27,635
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29,609
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Restructuring and other charges (note 4)
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701
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398
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Loss on sale of operating assets, net
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58
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154
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Depreciation and amortization
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13,700
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13,594
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116,219
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126,364
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Operating loss
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(11,700
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)
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(11,106
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Other income:
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Interest income
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682
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552
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Other expense, net
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(86
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(265
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596
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287
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Loss from continuing operations before income tax
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(11,104
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(10,819
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Income tax benefit from continuing operations
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640
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3,295
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Net loss from continuing operations
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(10,464
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)
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(7,524
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Discontinued operations (note 3):
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Earnings from discontinued operations
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27,098
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1,530
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Income tax expense
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(6,724
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)
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(454
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)
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Earnings from discontinued operations, net of income tax
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20,374
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1,076
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Net income (loss)
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9,910
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(6,448
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)
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Other comprehensive earnings (loss):
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Foreign currency translation adjustments
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(1,853
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(1,296
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)
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Unrealized holding gains, net of income tax
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239
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Pension liability adjustment
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68
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33
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Other comprehensive loss
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(1,546
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)
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(1,263
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)
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Comprehensive income (loss)
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$
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8,364
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(7,711
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)
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Basic and diluted earnings (loss) per share (note 6)
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Continuing operations
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$
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(0.74
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)
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(0.54
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Discontinued operations
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1.44
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0.08
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Net income (loss)
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$
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0.70
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(0.46
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)
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See accompanying notes to condensed consolidated financial
statements.
3
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
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Three Months Ended
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March 31,
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2010
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2009
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Amounts in thousands
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(Unaudited)
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Cash flows from operating activities:
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Net income (loss)
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$
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9,910
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(6,448
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)
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Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
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Earnings from discontinued operations, net of income tax
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(20,374
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)
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(1,076
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)
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Depreciation and amortization
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13,700
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13,594
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Stock based compensation
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655
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677
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Deferred income tax expense
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2,407
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1,475
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Loss on sale of operating assets
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58
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154
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Other non-cash activity, net
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(546
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)
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(12
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)
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Changes in assets and liabilities:
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Trade receivables
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5,358
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6,448
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Prepaid expenses and other current assets
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1,887
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(2,760
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)
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Payables and other liabilities
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(1,347
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)
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(9,036
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)
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Operating activities from discontinued operations, net
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(6,588
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)
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466
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Net cash provided by operating activities
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5,120
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3,482
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Cash flows from investing activities:
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Capital expenditures
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(5,462
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)
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(6,875
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)
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Proceeds from sale of discontinued operations
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34,828
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Purchases of marketable securities
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(9,999
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)
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Proceeds from sale of operating assets
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111
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Other investing activities, net
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(389
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)
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(375
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)
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Investing activities from discontinued operations, net
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(232
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)
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Net cash provided by (used in) investing activities
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18,978
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(7,371
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)
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Cash flows from financing activities:
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Payment of capital lease obligations
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(474
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)
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(440
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)
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Issuance of common stock
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1
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Net cash used in financing activities
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(473
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)
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(440
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)
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Net increase (decrease) in cash and cash equivalents
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23,625
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(4,329
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)
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Cash and cash equivalents at beginning of period
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292,914
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341,517
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Cash and cash equivalents at end of period
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$
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316,539
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337,188
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See accompanying notes to condensed consolidated financial
statements.
4
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to
Condensed Consolidated Financial Statements
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(1)
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Basis of
Presentation
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The accompanying Ascent Media Corporation (Ascent
Media or the Company) condensed consolidated
financial statements represent the financial position and
results of operations of Ascent Media and its consolidated
subsidiaries. The Company has two reportable segments: the
Content Services group and the Creative Services group. The
Companys reportable segments are strategic business units
that offer different products and services. They are managed
separately because each segment requires different technologies,
distribution channels and marketing strategies.
The accompanying interim condensed consolidated financial
statements are unaudited but, in the opinion of management,
reflect all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the results for
such periods. The results of operations for any interim period
are not necessarily indicative of results for the full year.
These condensed consolidated financial statements should be read
in conjunction with the Ascent Media Annual Report on
Form 10-K
for the year ended December 31, 2009.
The preparation of financial statements in conformity with
U.S. generally accepted accounting principles
(GAAP) requires management to make estimates and
assumptions that affect the reported amounts of revenue and
expenses for each reporting period. The significant estimates
made in preparation of the Companys condensed consolidated
financial statements primarily relate to long-lived assets,
deferred tax assets, and the amount of the allowance for
doubtful accounts. Actual results could differ from the
estimates upon which the carrying values were based.
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(2)
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Investments
in Marketable Securities
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Starting in the second quarter of 2009, Ascent Media purchased
marketable securities consisting of diversified corporate bond
funds and selected equity securities for cash. The following
table presents the activity of these investments, which have all
been classified as
available-for-sale
securities:
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Three Months Ended
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|
|
March 31, 2010
|
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|
|
Amounts in thousands
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|
Beginning balance
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$
|
56,197
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Purchases
|
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9,999
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Unrealized gain
|
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|
412
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|
|
|
|
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Ending balance
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$
|
66,608
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|
|
|
|
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The following table presents the net after-tax unrealized and
realized gains on the investment in marketable securities that
was recorded in accumulated other comprehensive income on the
consolidated balance sheet and in other comprehensive income on
the consolidated statements of operations and comprehensive
earnings (loss):
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|
|
|
|
|
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Three Months Ended
|
|
|
|
March 31, 2010
|
|
|
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Amounts in thousands
|
|
|
Accumulated other comprehensive income
|
|
|
|
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Beginning balance
|
|
$
|
1,352
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Gains, net of tax(1)
|
|
|
239
|
|
Gains recognized into earnings, net of tax
|
|
|
|
|
|
|
|
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Ending balance
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$
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1,591
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|
|
|
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(1) |
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Amount is net of tax of $173,000. |
5
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to
Condensed Consolidated Financial
Statements (Continued)
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(3)
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Discontinued
Operations
|
In February 2010, we completed the sale of the assets and
operations of the Chiswick Park facility in the United Kingdom,
which was previously included in our Content Services group, to
Discovery Communications, Inc. The net cash proceeds on the sale
were $34.8 million. The Chiswick Park assets and
liabilities were classified as held for sale at
December 31, 2009, and the results of operations of the
Chiswick Park facility have been treated as discontinued
operations in the consolidated financial statements for all
periods presented. Ascent Media recorded a pre-tax gain on the
sale of $25,498,000, subject to customary post-closing
adjustments, and $6,327,000 of related income tax expense. The
gain and related income tax expense are included in earnings
from discontinued operations in the accompanying condensed
consolidated statement of operations.
The following table presents the results of operations of the
discontinued operations that are included in earnings from
discontinued operations, net of income tax:
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|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2010
|
|
March 31, 2009
|
|
|
Amounts in thousands
|
|
Revenue
|
|
$
|
2,532
|
|
|
$
|
4,009
|
|
Earnings before income taxes
|
|
$
|
27,098
|
(a)
|
|
$
|
1,530
|
|
|
|
|
(a) |
|
The 2010 amount includes a $25,498,000 gain on the sale of the
Chiswick Park facility. |
|
|
(4)
|
Restructuring
Charges
|
During the three months ended March 31, 2010 and 2009, the
Company recorded restructuring charges of $701,000 and $398,000,
respectively, related to certain severance and facility costs in
conjunction with ongoing structural changes commenced in late
2008 that were implemented to align our organization with our
strategic goals and with how we operate, manage and sell our
services. Such changes include the consolidation of certain
facilities in the United Kingdom and further restructuring and
labor cost mitigation measures undertaken across all of our
businesses.
The following table provides the activity and balances of the
restructuring reserve. At March 31, 2010, approximately
$3.2 million of the ending liability balance is included in
other accrued liabilities with the remaining amount recorded in
other long-term liabilities (all amounts are in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2008
|
|
|
Additions
|
|
|
Deductions(a)
|
|
|
March 31, 2009
|
|
|
Severance
|
|
$
|
2,526
|
|
|
|
384
|
|
|
|
(1,141
|
)
|
|
|
1,769
|
|
Excess facility costs
|
|
|
3,294
|
|
|
|
14
|
|
|
|
(539
|
)
|
|
|
2,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,820
|
|
|
|
398
|
|
|
|
(1,680
|
)
|
|
|
4,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009
|
|
|
Additions
|
|
|
Deductions(a)
|
|
|
March 31, 2010
|
|
|
Severance
|
|
$
|
699
|
|
|
|
328
|
|
|
|
(792
|
)
|
|
|
235
|
(b)
|
Excess facility costs
|
|
|
4,375
|
|
|
|
373
|
|
|
|
(1,110
|
)
|
|
|
3,638
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,074
|
|
|
|
701
|
|
|
|
(1,902
|
)
|
|
|
3,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Primarily represents cash payments. |
|
(b) |
|
Substantially all of this amount is expected to be paid in 2010. |
|
(c) |
|
Substantially all of this amount is expected to be paid by 2012. |
6
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to
Condensed Consolidated Financial
Statements (Continued)
|
|
(5)
|
Stock-Based
and Long-Term Incentive Compensation
|
During the first quarter of 2010, certain key employees were
granted a total of 12,766 shares of restricted stock awards
that vest quarterly over one year. The restricted stock had a
fair value of $28.20 per share which was the closing price of
the Ascent Media Series A common stock on the date of grant.
|
|
(6)
|
Basic and
Diluted Earnings (Loss) Per Common Share
Series A and Series B
|
Basic earnings (loss) per common share (EPS) is
computed by dividing net earnings (loss) by the weighted average
number of Series A and Series B common shares
outstanding for the period. Diluted EPS is computed by dividing
net earnings (loss) by the sum of the weighted average number of
Series A and Series B common shares outstanding and
the effect of dilutive securities such as outstanding stock
options and unvested restricted stock. However, since the
Company recorded a loss from continuing operations for the three
months ended March 31, 2010 and 2009, diluted EPS is
computed the same as basic EPS.
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
Three Months
|
|
|
Ended
|
|
Ended
|
|
|
March 31, 2010
|
|
March 31, 2009
|
|
Weighted average Series A and Series B shares
|
|
|
14,183,139
|
|
|
|
14,070,579
|
|
Dilutive effect of stock options and unvested restricted stock
|
|
|
189,637
|
|
|
|
184,822
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
|
|
|
14,372,776
|
|
|
|
14,255,401
|
|
|
|
|
|
|
|
|
|
|
|
|
(7)
|
Commitments,
Contingencies and Other Liabilities
|
The Company is involved in litigation and similar claims
incidental to the conduct of its business. In managements
opinion, none of the pending actions is likely to have a
material adverse impact on the Companys financial position
or results of operations.
|
|
(8)
|
Fair
Value Measurements
|
According to the Fair Value Measurements and Disclosures Topic
of the FASB Accounting Standards Codification, fair value is
defined as the amount that would be received for selling an
asset or paid to transfer a liability in an orderly transaction
between market participants and requires that assets and
liabilities carried at fair value are classified and disclosed
in the following three categories:
|
|
|
|
|
Level 1 Quoted prices for identical instruments
in active markets.
|
|
|
|
Level 2 Quoted prices for similar instruments
in active or inactive markets and valuations derived from models
where all significant inputs are observable in active markets.
|
|
|
|
Level 3 Valuations derived from valuation
techniques in which one or more significant inputs are
unobservable in any market.
|
7
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to
Condensed Consolidated Financial
Statements (Continued)
The following summarizes the fair value level of assets and
liabilities that are measured on a recurring basis at
March 31, 2010 and December 31, 2009 (amounts in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds(a)
|
|
$
|
272,143
|
|
|
|
|
|
|
|
|
|
|
|
272,143
|
|
Investments in marketable securities(b)
|
|
|
56,197
|
|
|
|
|
|
|
|
|
|
|
|
56,197
|
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
(3,327
|
)
|
|
|
(3,327
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
328,340
|
|
|
|
|
|
|
|
(3,327
|
)
|
|
|
325,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds(a)
|
|
$
|
271,979
|
|
|
|
|
|
|
|
|
|
|
|
271,979
|
|
Investments in marketable securities(b)
|
|
|
66,608
|
|
|
|
|
|
|
|
|
|
|
|
66,608
|
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
(3,462
|
)
|
|
|
(3,462
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
338,587
|
|
|
|
|
|
|
|
(3,462
|
)
|
|
|
335,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Included in cash and cash equivalents on the consolidated
balance sheet. |
|
(b) |
|
Investments consist entirely of diversified corporate bond funds
and are all classified as
available-for-sale
securities. |
The Level 3 liabilities relate to contingent consideration
and participating residual interests related to business
acquisitions which were computed using discounted future cash
flow models which use estimated discount rates. The following
table presents the activity in the Level 3 balances:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
|
Amounts in thousands
|
|
|
Beginning balance
|
|
$
|
(3,327
|
)
|
|
|
(4,226
|
)
|
Amounts expensed(a)
|
|
|
(135
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending balance(b)
|
|
$
|
(3,462
|
)
|
|
|
(4,226
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Amount consisted of a contingent consideration change in fair
value expense of $135,000. This amount was recorded in SG&A
on the consolidated statement of operations. |
|
(b) |
|
The 2010 amount consisted of contingent consideration of
$3,328,000 and a participating residual interest of $134,000.
The 2009 amount consists entirely of a participating residual
interest. |
Ascent Medias financial instruments, including cash and
cash equivalents, accounts receivable and accounts payable are
carried at cost, which approximates their fair value because of
their short-term maturity.
|
|
(9)
|
Information
About Reportable Segments
|
Ascent Media evaluates the performance of its reportable
segments based on financial measures such as revenue and
adjusted operating income before depreciation and amortization
(which is referred to as adjusted OIBDA). Ascent
Media defines adjusted OIBDA as revenue less cost of
services and selling, general and administrative expenses
(excluding stock-based and long-term incentive compensation and
accretion expense on asset retirement obligations) and defines
segment adjusted OIBDA as adjusted OIBDA as
determined in each case for the indicated operating segment or
segments only. Ascent Media believes that segment adjusted OIBDA
is an important indicator of the operational strength and
performance of its businesses, including the businesses
ability to fund their ongoing capital expenditures and service
any debt. In addition, this measure is used by
8
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to
Condensed Consolidated Financial
Statements (Continued)
management to evaluate operating results and perform analytical
comparisons and identify strategies to improve performance.
Adjusted OIBDA excludes depreciation and amortization,
stock-based and long-term incentive compensation, accretion
expense on asset retirement obligations, restructuring and
impairment charges, gains/losses on sale of operating assets and
other income and expense that are included in the measurement of
earnings (loss) before income taxes pursuant to GAAP.
Accordingly, adjusted OIBDA and segment adjusted OIBDA should be
considered in addition to, but not as a substitute for, earnings
(loss) before income taxes, cash flow provided by operating
activities and other measures of financial performance prepared
in accordance with GAAP. Because segment adjusted OIBDA excludes
corporate and other SG&A (as defined below), and does not
include an allocation for corporate overhead, segment adjusted
OIBDA should not be used as a measure of Ascent Medias
liquidity or as an indication of the operating results that
could be expected if either operating segment were operated on a
stand-alone basis. Adjusted OIBDA and segment adjusted OIBDA are
non-GAAP financial measures. As companies often define non-GAAP
financial measures differently, adjusted OIBDA and segment
adjusted OIBDA as calculated by Ascent Media should not be
compared to any similarly titled measures reported by other
companies.
Summarized financial information concerning the Companys
reportable segments is presented in the following tables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable Segments
|
|
|
|
|
|
|
Content
|
|
Creative
|
|
|
|
|
|
|
|
|
Services
|
|
Services
|
|
|
|
|
|
Consolidated
|
|
|
Group
|
|
Group
|
|
Total
|
|
Other(a)
|
|
Total
|
|
|
Amounts in thousands
|
|
Three months ended March 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
$
|
58,506
|
|
|
|
46,013
|
|
|
|
104,519
|
|
|
|
|
|
|
|
104,519
|
|
Adjusted OIBDA
|
|
$
|
4,373
|
|
|
|
6,193
|
|
|
|
10,566
|
|
|
|
(6,965
|
)
|
|
|
3,601
|
|
Capital expenditures
|
|
$
|
2,397
|
|
|
|
716
|
|
|
|
3,113
|
|
|
|
2,349
|
|
|
|
5,462
|
|
Three months ended March 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
$
|
74,595
|
|
|
|
40,663
|
|
|
|
115,258
|
|
|
|
|
|
|
|
115,258
|
|
Adjusted OIBDA
|
|
$
|
5,329
|
|
|
|
4,630
|
|
|
|
9,959
|
|
|
|
(6,196
|
)
|
|
|
3,763
|
|
Capital expenditures
|
|
$
|
4,641
|
|
|
|
1,724
|
|
|
|
6,365
|
|
|
|
510
|
|
|
|
6,875
|
|
|
|
|
(a) |
|
Amounts shown in Other provide a reconciliation of total
reportable segments to the Companys consolidated total.
Included in Other is corporate SG&A expenses and capital
expenditures incurred at a corporate level. |
The following table provides a reconciliation of total adjusted
OIBDA to loss from continuing operations before income tax.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
|
Amounts in thousands
|
|
|
Total adjusted OIBDA
|
|
$
|
3,601
|
|
|
|
3,763
|
|
Stock-based and long-term incentive compensation
|
|
|
(655
|
)
|
|
|
(677
|
)
|
Restructuring and other charges
|
|
|
(701
|
)
|
|
|
(398
|
)
|
Depreciation and amortization
|
|
|
(13,700
|
)
|
|
|
(13,594
|
)
|
Loss on sale of operating assets, net
|
|
|
(58
|
)
|
|
|
(154
|
)
|
Other income, net
|
|
|
596
|
|
|
|
287
|
|
Other
|
|
|
(187
|
)
|
|
|
(46
|
)
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income tax
|
|
$
|
(11,104
|
)
|
|
|
(10,819
|
)
|
|
|
|
|
|
|
|
|
|
9
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to
Condensed Consolidated Financial
Statements (Continued)
Information as to the Companys operations in different
geographic areas is as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
|
Amounts in thousands
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
83,229
|
|
|
|
94,391
|
|
United Kingdom
|
|
|
16,502
|
|
|
|
15,207
|
|
Singapore
|
|
|
4,788
|
|
|
|
5,660
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
104,519
|
|
|
|
115,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
|
Amounts in thousands
|
|
|
Property and equipment, net
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
144,540
|
|
|
|
149,919
|
|
United Kingdom
|
|
|
21,162
|
|
|
|
22,914
|
|
Singapore
|
|
|
13,858
|
|
|
|
14,665
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
179,560
|
|
|
|
187,498
|
|
|
|
|
|
|
|
|
|
|
10
|
|
Item 2.
|
Managements
Discussion and Analysis of Financial Condition and Results of
Operations.
|
Certain statements in this Quarterly Report on
Form 10-Q
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including
statements regarding our business, marketing and operating
strategies, integration of acquired businesses, new service
offerings, financial prospects, and anticipated sources and uses
of capital. Where, in any forward-looking statement, we express
an expectation or belief as to future results or events, such
expectation or belief is expressed in good faith and believed to
have a reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or
accomplished. The following include some but not all of the
factors that could cause actual results or events to differ
materially from those anticipated:
|
|
|
|
|
lack of operating history as a stand-alone company;
|
|
|
|
general economic and business conditions and industry trends
including the timing of, and spending on, motion picture,
television and television advertising;
|
|
|
|
integration of acquired businesses;
|
|
|
|
the regulatory and competitive environment of the industries in
which we and our customers operate;
|
|
|
|
retention of our largest customer accounts;
|
|
|
|
availability of third-party satellite and terrestrial
connectivity services relied on by us to provide our services;
|
|
|
|
the possibility of an industry-wide strike or other job action
affecting a major entertainment industry union, or the duration
of any existing strike or job action;
|
|
|
|
rapid technological changes;
|
|
|
|
present and future financial conditions, including availability
and terms of capital;
|
|
|
|
the outcome of any pending or threatened litigation;
|
|
|
|
availability of qualified personnel;
|
|
|
|
changes in, or failure or inability to comply with, government
regulations, including, without limitation, regulations of the
Federal Communications Commission, and adverse outcomes from
regulatory proceedings;
|
|
|
|
competitor and overall market response to our products and
services, including acceptance of the pricing of such products
and services; and
|
|
|
|
risk of loss from earthquakes and other catastrophic events.
|
For additional risk factors, please see our Annual Report on
Form 10-K
for the year ended December 31, 2009. These forward-looking
statements and such risks, uncertainties and other factors speak
only as of the date of this Quarterly Report, and we expressly
disclaim any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statement contained
herein, to reflect any change in our expectations with regard
thereto, or any other change in events, conditions or
circumstances on which any such statement is based.
The following discussion and analysis provides information
concerning our results of operations and financial condition.
This discussion should be read in conjunction with our
accompanying condensed consolidated financial statements and the
notes thereto included elsewhere herein and our Annual Report on
Form 10-K
for the year ended December 31, 2009.
Overview
We are a holding company and own 100% of our principal operating
subsidiary, Ascent Media Group, LLC (AMG), as well
as cash and cash equivalents.
11
Ascent
Media Group
AMG provides creative services and content management and
delivery services to the media and entertainment industries in
the United States, the United Kingdom and Singapore. AMGs
clients include major motion picture studios, independent
producers, broadcast networks, programming networks, advertising
agencies and other companies that produce, own
and/or
distribute entertainment, news, sports, corporate, educational,
industrial and advertising content. AMGs operations are
organized into the following two groups: the Content Services
group and the Creative Services group.
In recent years, AMG has encountered increasingly challenging
media, entertainment and advertising markets which have impacted
our revenues. In addition, AMG has been challenged by increasing
competition and resulting downward rate pressure for certain of
its services. Such factors have caused margin compression and
lower revenue and operating income. AMG is continuing to focus
on leveraging its broad array of traditional media and
file-based services to be a full service provider to new and
existing customers within the feature film, television
production and advertising industries. Its strategy focuses on
providing a unified portfolio of business-to-business services
intended to enable media companies to realize increasing
benefits from digital distribution. With facilities in the
United States, the United Kingdom and Singapore, AMG hopes to
increase its services to multinational companies on a worldwide
basis. The challenges that it faces include the continued
development of end-to-end file-based solutions, increased
competition in both its Creative Services and Content Services
groups, the need to differentiate its products and services to
help maintain or increase operating margins and financing
capital expenditures for equipment and other items to meet
customers requirements including their need for both
integrated and file-based workflows.
Adjusted
OIBDA
We evaluate the performance of our operating segments based on
financial measures such as revenue and adjusted operating income
before depreciation and amortization (which we refer to as
adjusted OIBDA). We define adjusted
OIBDA as revenue less cost of services and selling,
general and administrative expenses (excluding stock-based and
long-term incentive compensation and accretion expense on asset
retirement obligations) and define segment adjusted
OIBDA as adjusted OIBDA as determined in each case for the
indicated operating segment or segments only. We believe these
non-GAAP financial measures are important indicators of the
operational strength and performance of our businesses,
including each businesss ability to fund its ongoing
capital expenditures and service any debt. In addition, this
measure is used by management to evaluate operating results and
perform analytical comparisons and identify strategies to
improve performance. Adjusted OIBDA excludes depreciation and
amortization, stock-based and long-term incentive compensation,
accretion expense on asset retirement obligations, restructuring
and impairment charges, gains/losses on sale of operating assets
and other income and expense that are included in the
measurement of earnings (loss) before income taxes pursuant to
GAAP. Accordingly, adjusted OIBDA and segment adjusted OIBDA
should be considered in addition to, but not as a substitute
for, earnings (loss) before income taxes, cash flow provided by
operating activities and other measures of financial performance
prepared in accordance with GAAP. Because segment adjusted OIBDA
excludes corporate and other SG&A (as defined below), and
does not include an allocation for corporate overhead, segment
adjusted OIBDA should not be used as a measure of our liquidity
or as an indication of the operating results that could be
expected if either operating segment were operated on a
stand-alone basis. Adjusted OIBDA and segment adjusted OIBDA are
non-GAAP financial measures. As companies often define non-GAAP
financial measures differently, adjusted OIBDA and segment
adjusted OIBDA as calculated by Ascent Media should not be
compared to any similarly titled measures reported by other
companies.
12
Results
of Operations
Our operations are organized into the following reportable
segments: the Content Services group and the Creative Services
group.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
|
Dollar amounts in thousands
|
|
|
Consolidated Results of Operations
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
104,519
|
|
|
|
115,258
|
|
Loss from continuing operations before income tax
|
|
$
|
(11,104
|
)
|
|
|
(10,819
|
)
|
Net income (loss)
|
|
$
|
9,910
|
|
|
|
(6,448
|
)
|
Segment Results of Operations
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Content Services group
|
|
$
|
58,506
|
|
|
|
74,595
|
|
Creative Services group
|
|
$
|
46,013
|
|
|
|
40,663
|
|
Adjusted OIBDA
|
|
|
|
|
|
|
|
|
Content Services group
|
|
$
|
4,373
|
|
|
|
5,329
|
|
Creative Services group
|
|
|
6,193
|
|
|
|
4,630
|
|
|
|
|
|
|
|
|
|
|
Total segment adjusted OIBDA
|
|
|
10,566
|
|
|
|
9,959
|
|
Corporate general and administrative expenses
|
|
|
(6,965
|
)
|
|
|
(6,196
|
)
|
|
|
|
|
|
|
|
|
|
Total adjusted OIBDA(a)
|
|
$
|
3,601
|
|
|
|
3,763
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted OIBDA as a percentage of Revenue
|
|
|
|
|
|
|
|
|
Content Services group
|
|
|
7.5
|
%
|
|
|
7.1
|
%
|
Creative Services group
|
|
|
13.5
|
%
|
|
|
11.4
|
%
|
|
|
|
(a) |
|
See reconciliation to loss from continuing operations before
income tax below. |
Revenue. Our consolidated revenue decreased
$10,739,000 or 9.3% for the three months ended March 31,
2010, as compared to the corresponding prior year period. The
Content Services group revenue decreased $16,089,000 or 21.6%
for the three months ended March 31, 2010, compared to the
prior year period, while the Creative Services group revenue
increased by $5,350,000 or 13.2% for such periods.
The decrease in the Content Services group revenue for the three
month period was mainly due to (i) a decrease of
$11,717,000 in system integration services as revenue from one
customer, Motorola, decreased by $9.7 million compared to
the prior year, (ii) a decrease of $3,739,000 from a
decline in traditional media services in the United States
including mastering, DVD and syndication and (iii) a
decrease of $1,908,000 for content origination and transport
services primarily from lower renewal rates in Singapore. These
decreases were partially offset by favorable changes in foreign
currency exchange rates of $1,385,000.
The increase in Creative Services group revenue for the three
month period was due to (i) an increase of $5,995,000 from
editorial services in the United States, (ii) an increase
of $2,060,000 from commercial digital intermediate services as
commercial production levels increased in 2010 and
(iii) favorable changes in foreign currency exchange rates
of $268,000. These increases were partially offset by (i) a
decrease of $1,618,000 in episodic television revenues due to
the timing of television production and lower revenues earned
per show and (ii) a decrease of $1,313,000 from feature
film revenues due to a decline in large digital intermediate
features projects compared to the prior year.
Cost of Services. Cost of services decreased
$8,484,000 or 10.3% for the three months ended March 31,
2010, as compared to the corresponding prior year period. A
significant portion of the decrease for the three month period
resulted from lower volumes of system integration services in
the Content Services segment, driving
13
significant decreases in production material costs and, to a
lesser extent, labor costs. In addition, we began a
restructuring program at the end of 2008 across all of our
businesses, which is still ongoing, that resulted in a reduction
in labor and facility costs in the first quarter of 2010,
compared to the corresponding prior period. In addition, cost of
services was impacted by unfavorable changes in currency
exchange rates of $1,152,000 in the first quarter of 2010.
As a percent of revenue, cost of services was 70.9% and 71.7%
for the three month periods ended March 31, 2010 and 2009,
respectively. The percentage decrease is mainly a result of
revenue mix as system integration projects, which incur higher
production material costs, were significantly lower in 2010. The
percentage decrease was also the result of the restructuring and
cost mitigation measures that were enacted across both segments.
Selling, General and Administrative. Our
selling, general and administrative expenses
(SG&A) are comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
|
Amounts in thousands
|
|
|
SG&A(a)
|
|
$
|
26,793
|
|
|
|
28,886
|
|
Stock-based and long-term incentive compensation
|
|
|
655
|
|
|
|
677
|
|
Other
|
|
|
187
|
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
Total SG&A
|
|
$
|
27,635
|
|
|
|
29,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
SG&A includes corporate G&A expenses of $6,965,000 and
$6,196,000 for the three months ended March 31, 2010 and
2009, respectively, which are not included in total segment
adjusted OIBDA. |
Our SG&A, excluding stock-based and long-term incentive
compensation and other expenses, decreased $2,093,000 or 7.2%
for the three months ended March 31, 2010, compared to the
corresponding prior year period. The decrease was mainly driven
by lower labor and other administrative costs which declined due
to the implementation of restructuring and cost mitigation
measures during 2009 and lower bad debt expense. These decreases
were impacted by unfavorable changes in foreign currency
exchange rates of $387,000 for the three months ended
March 31, 2010.
Stock-based and Long-term Incentive
Compensation. Stock-based and long-term incentive
compensation expense was $655,000 and $677,000 for the three
months ended March 31, 2010 and 2009, respectively, and is
included in SG&A in our consolidated statements of
operations. The expense was related to restricted stock and
stock option awards granted to certain executives.
Restructuring Charges. During the three months
ended March 31, 2010 and 2009, we recorded restructuring
charges of $701,000 and $398,000, respectively, related to
severance costs and excess facility costs in conjunction with
ongoing restructuring and cost mitigation measures which
commenced at the end of 2008 across all of our businesses.
The following table provides the activity and balances of the
restructuring reserve (all amounts are in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
December 31, 2008
|
|
|
Additions
|
|
|
Deductions(a)
|
|
|
2009
|
|
|
Severance
|
|
$
|
2,526
|
|
|
|
384
|
|
|
|
(1,141
|
)
|
|
|
1,769
|
|
Excess facility costs
|
|
|
3,294
|
|
|
|
14
|
|
|
|
(539
|
)
|
|
|
2,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2009
|
|
$
|
5,820
|
|
|
|
398
|
|
|
|
(1,680
|
)
|
|
|
4,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
December 31, 2009
|
|
|
Additions
|
|
|
Deductions(a)
|
|
|
2010
|
|
|
Severance
|
|
$
|
699
|
|
|
|
328
|
|
|
|
(792
|
)
|
|
|
235
|
(b)
|
Excess facility costs
|
|
|
4,375
|
|
|
|
373
|
|
|
|
(1,110
|
)
|
|
|
3,638
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2010
|
|
$
|
5,074
|
|
|
|
701
|
|
|
|
(1,902
|
)
|
|
|
3,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Primarily represents cash payments. |
|
(b) |
|
Substantially all of this amount is expected to be paid in 2010. |
|
(c) |
|
Substantially all of this amount is expected to be paid by 2012. |
Depreciation and Amortization. Depreciation
and amortization expense increased 0.8% or $106,000 for the
three months ended March 31, 2010, compared to the
corresponding prior year. This increase was due to the
unfavorable impact of changes in foreign currency exchange rates
of $261,000 for the three months ended March 31, 2010.
Income Taxes from Continuing Operations. For
the quarter ended March 31, 2010, we had a pre-tax loss
from continuing operations of $11,104,000 and a income tax
benefit of $640,000, for an effective tax rate of 5.8%. For the
quarter ended March 31, 2009, we had a pre-tax loss from
continuing operations of $10,819,000 and a income tax benefit of
$3,295,000, for an effective tax rate of 30.5%. For the first
quarter of 2010, we recorded a charge of $3,666,000 to increase
the valuation allowance which reduced our net income tax benefit
from continuing operations.
Earnings from Discontinued Operations, Net of Income
Taxes We recorded earnings from discontinued
operations, net of income taxes, of $20,374,000 and $1,076,000
for the three months ended March 31, 2010 and 2009,
respectively. These amounts included the earnings of the
Chiswick Park facility which was sold in February 2010. The 2010
amount also includes the gain on sale of $25,498,000 and the
related income tax expense of $6,327,000.
Adjusted OIBDA. The following table provides a
reconciliation of total adjusted OIBDA to loss from continuing
operations before income tax.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
|
Amounts in thousands
|
|
|
Total adjusted OIBDA
|
|
$
|
3,601
|
|
|
|
3,763
|
|
Stock-based and long-term incentive compensation
|
|
|
(655
|
)
|
|
|
(677
|
)
|
Restructuring and other charges
|
|
|
(701
|
)
|
|
|
(398
|
)
|
Depreciation and amortization
|
|
|
(13,700
|
)
|
|
|
(13,594
|
)
|
Loss on sale of operating assets, net
|
|
|
(58
|
)
|
|
|
(154
|
)
|
Other income, net
|
|
|
596
|
|
|
|
287
|
|
Other
|
|
|
(187
|
)
|
|
|
(46
|
)
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income tax
|
|
$
|
(11,104
|
)
|
|
|
(10,819
|
)
|
|
|
|
|
|
|
|
|
|
Content Services group adjusted OIBDA as a percentage of revenue
was 7.5% and 7.1% for the three months ended March 31, 2010
and 2009, respectively. The primary cost components for the
Content Services group are labor and materials, with these costs
comprising about 66% of the segment revenue. The other cost
components for the Content Services group are facility costs,
production equipment and general and administrative expense.
Content Services group adjusted OIBDA decreased $956,000 or
17.9% for the three months ended March 31, 2010, compared
to the prior year period. This decrease was due to (i) a
decrease of $1,103,000 from lower revenues from traditional
media services in the United States including mastering, DVD and
syndication and (ii) a decrease of $363,000 from lower
digital media services in the United States. This decrease was
partially offset by an adjusted
15
OIBDA increase of $488,000 from the content distribution
business in the United States, which reduced operating costs
while revenue remained constant.
Creative Services group adjusted OIBDA as a percentage of
revenue was 13.5% and 11.4% for the three months ended
March 31, 2010 and 2009, respectively. The services
provided by the Creative Services group are labor intensive and
they require high labor and facility costs, with these costs
representing 73% of the segment revenue. The Creative Services
groups other primary cost components are production
equipment, materials cost and general and administrative
expenses.
Creative Services group adjusted OIBDA increased $1,563,000 or
33.8% for the three months ended March 31, 2010, compared
to the prior period. This increase was due to (i) an
increase of $1,519,000 from higher editorial services revenues
in the United States, (ii) cost savings of $655,000 due to
the consolidation of facilities in the episodic television
business and (iii) $525,000 from higher commercial revenues
for digital intermediate services. These increases were
partially offset by a decrease of $884,000 from lower feature
film revenues.
Discontinued
Operations
In February 2010, we completed the sale of the assets and
operations of the Chiswick Park facility in the United Kingdom,
which was previously included in our Content Services group, to
Discovery Communications, Inc. The net cash proceeds on the sale
were $34.8 million. The Chiswick Park assets and
liabilities were classified as held for sale at
December 31, 2009, and the results of operations of the
Chiswick Park facility have been treated as discontinued
operations in the consolidated financial statements for all
periods presented. Ascent Media recorded a pre-tax gain on the
sale of $25,498,000, subject to customary post-closing
adjustments, and $6,327,000 of related income tax expense. The
gain and related income tax expense are included in earnings
from discontinued operations in the accompanying condensed
consolidated statement of operations.
Liquidity
and Capital Resources
At March 31, 2010, we have $316,539,000 of cash and cash
equivalents on a consolidated basis. In addition, we have
investments in marketable securities of $66,608,000, which are
generally liquid and available for sale. We may use a portion of
these assets to fund potential strategic acquisitions or
investment opportunities. The cash is invested in highly liquid,
highly-rated short-term investments.
Additionally, our other source of funds is our cash flows from
operating activities, which are currently generated entirely
from the operations of AMG. During the three months ended
March 31, 2010 and 2009, our cash flows from operating
activities was $5,120,000 and $3,482,000, respectively. The
primary driver of our cash flow from operating activities is
segment adjusted OIBDA. Fluctuations in our segment adjusted
OIBDA are discussed in Results of Operations above.
In addition, our cash flow from operating activities is
significantly impacted by changes in working capital, which are
generally due to the timing of purchases and payments and the
timing of billings and collections for revenue, as well as
corporate general and administrative expenses which are not
included in segment adjusted OIBDA.
During the three months ended March 31, 2010 and 2009, we
used cash of $5,462,000 and $6,875,000, respectively, to fund
our capital expenditures. These expenditures relate to the
purchase of new equipment, the upgrade of facilities and the
buildout of our existing facilities to meet specific customer
contracts, which are capitalized as additions and remain our
property, not that of the customer. During 2010, we purchased
marketable securities for cash of $9,999,000 in order to improve
our investment rate of return.
In considering our liquidity requirements for 2010 and
subsequent periods, we evaluated our known future commitments
and our expected capital expenditure requirements, as well as
our cash flow from continuing operations for the fiscal year
2009 and the first quarter of 2010 and our understanding of the
variable factors driving such cash flow from continuing
operations. We considered that currently we have less than
$8 million of capital leases which will be paid over the
next five years and we have no short or long-term bank debt. In
addition, we have approximately $4 million of other
commitments most of which are expected to be paid in three to
five years. Our annual capital expenditure requirements include
expenditures required to maintain or enhance our existing
business and discretionary expenditures that could be adjusted
by management. We do not currently have any commitments
16
for capital expenditures to be incurred following our 2010
fiscal year. Based on this analysis, we expect to have
sufficient available cash and cash equivalents and net cash from
AMGs operating activities to meet our working capital
needs and capital expenditure requirements for 2010 and for the
foreseeable future.
We may seek external equity or debt financing in the event of
any new investment opportunities, additional capital
expenditures or our operations requiring additional funds, but
there can be no assurance that we will be able to obtain equity
or debt financing on terms that would be acceptable to us. Our
ability to seek additional sources of funding depends on our
future financial position and results of operations, which are
subject to general conditions in or affecting our industry and
our customers and to general economic, political, financial,
competitive, legislative and regulatory factors beyond our
control.
|
|
Item 3.
|
Quantitative
and Qualitative Disclosure about Market Risk
|
Foreign
Currency Risk
We continually monitor our economic exposure to changes in
foreign exchange rates and may enter into foreign exchange
agreements where and when appropriate. Substantially all of our
foreign transactions are denominated in foreign currencies,
including the liabilities of our foreign subsidiaries. Although
our foreign transactions are not generally subject to
significant foreign exchange transaction gains or losses, the
financial statements of our foreign subsidiaries are translated
into United States dollars as part of our consolidated financial
reporting. As a result, fluctuations in exchange rates affect
our financial position, results of operations and cash flows.
|
|
Item 4.
|
Controls
and Procedures
|
In accordance with Exchange Act
Rules 13a-15
and 15d-15,
the Company carried out an evaluation, under the supervision and
with the participation of management, including its chairman,
president and principal accounting officer (the
Executives), of the effectiveness of its disclosure
controls and procedures as of the end of the period covered by
this report. Based on that evaluation, the Executives concluded
that the Companys disclosure controls and procedures were
effective as of March 31, 2010 to provide reasonable
assurance that information required to be disclosed in its
reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported within the time periods
specified in the Securities and Exchange Commissions rules
and forms.
There has been no change in the Companys internal controls
over financial reporting that occurred during the three months
ended March 31, 2010 that has materially affected, or is
reasonably likely to materially affect, its internal controls
over financial reporting.
17
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
PART II
OTHER INFORMATION
|
|
Item 2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds.
|
(c) Purchases of Equity Securities by the Issuer
During the three months ended March 31, 2010,
2,587 shares of Series A common stock were surrendered
by certain of our officers and employees to pay withholding
taxes and other deductions in connection with the vesting of
their restricted stock, as set forth in the table below.
|
|
|
|
|
|
|
|
|
|
|
Total Number
|
|
|
|
|
|
|
of Shares
|
|
|
Average Price
|
|
Period
|
|
Purchased
|
|
|
Paid per Share
|
|
|
01/01/10 - 01/31/10
|
|
|
|
|
|
|
|
|
02/01/10 - 02/28/10
|
|
|
|
|
|
|
|
|
03/01/10 - 03/31/10
|
|
|
2,587
|
(a)
|
|
$
|
28.38
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,587
|
|
|
$
|
28.38
|
|
|
|
|
(a) |
|
Represents 1,901 shares withheld from Mr. Fitzgerald
and 686 shares withheld from Mr. Orr. |
Listed below are the exhibits which are included as a part of
this Report (according to the number assigned to them in
Item 601 of
Regulation S-K):
|
|
|
|
|
|
10
|
.1
|
|
Form of Indemnification Agreement entered into between Ascent
Media Corporation and each of its directors and executive
officers (incorporated by reference to Exhibit 10.7 to the
Corporations Amendment No. 1 to Form 10 (file
No. 000-53280)
filed July 23, 2008)
|
|
31
|
.1
|
|
Rule 13a-14(a)/15d-14(a)
Certification*
|
|
31
|
.2
|
|
Rule 13a-14(a)/15d-14(a)
Certification*
|
|
31
|
.3
|
|
Rule 13a-14(a)/15d-14(a)
Certification*
|
|
32
|
|
|
Section 1350 Certification**
|
|
|
|
* |
|
Filed herewith. |
|
** |
|
Furnished herewith. |
18
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.
|
|
|
|
|
|
|
ASCENT MEDIA CORPORATION
|
Date: May 7, 2010
|
|
By:
|
|
/s/ William R. Fitzgerald
|
|
|
|
|
|
|
|
|
|
William R. Fitzgerald
Chairman and Chief Executive Officer
|
Date: May 7, 2010
|
|
By:
|
|
/s/ Jose A. Royo
|
|
|
|
|
|
|
|
|
|
Jose A. Royo
President and Chief Operating Officer
|
Date: May 7, 2010
|
|
By:
|
|
/s/ George C. Platisa
|
|
|
|
|
|
|
|
|
|
George C. Platisa
Executive Vice President and
Chief Financial Officer
|
19
EXHIBIT INDEX
Listed below are the exhibits which are included as a part of
this Report (according to the number assigned to them in
Item 601 of
Regulation S-K):
|
|
|
|
|
|
10
|
.1
|
|
Form of Indemnification Agreement entered into between Ascent
Media Corporation and each of its directors and executive
officers (incorporated by reference to Exhibit 10.7 to the
Corporations Amendment No. 1 to Form 10 (file
No. 000-53280)
filed July 23, 2008)
|
|
31
|
.1
|
|
Rule 13a-14(a)/15d-14(a)
Certification*
|
|
31
|
.2
|
|
Rule 13a-14(a)/15d-14(a)
Certification*
|
|
31
|
.3
|
|
Rule 13a-14(a)/15d-14(a)
Certification*
|
|
32
|
|
|
Section 1350 Certification**
|
|
|
|
* |
|
Filed herewith. |
|
** |
|
Furnished herewith. |