UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004
-----------------
Commission file number 1-2257
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TRANS-LUX CORPORATION
---------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-1394750
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 Richards Avenue, Norwalk, CT 06856-5090
-------------------------------------------
(203) 853-4321
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(Address, zip code, and telephone number, including
area code, of Registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
----------------------------- -----------------------------------------
Common Stock, $1.00 par value American Stock Exchange
7 1/2% Convertible Subordinated
Notes due 2006 American Stock Exchange
8 1/4% Limited Convertible Senior
Subordinated Notes due 2012 American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K. [ X ]
CONTINUED
TRANS-LUX CORPORATION
2004 Form 10-K/A Cover Page Continued
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes No X
--- ---
As of the close of business on March 30, 2005, there were outstanding, 973,259
shares of the Registrant's Common Stock and 287,463 shares of its Class B Stock.
Based on the closing stock price of $6.90 on June 30, 2004, the last business
day of the Registrant's most recently completed second fiscal quarter, the
aggregate market value of the Registrant's Common and Class B Stock held by
non-affiliates of the Registrant was $6,960,000. (The value of a share of
Common Stock is used as the value for a share of Class B Stock, as there is no
established market for Class B Stock, which is convertible into Common Stock on
a share-for-share basis.)
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Registrant's definitive Proxy Statement for the Annual Meeting
of Stockholders to be held May 19, 2005, to be filed with the Commission within
120 days of the Registrant's fiscal year end (the "Proxy Statement"), are
incorporated by reference into Part III, Items 10-14 of this Form 10-K to the
extent stated herein.
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EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A amends our Annual Report on Form 10-K
for the fiscal year ended December 31, 2004, which was originally filed with the
SEC on March 31, 2005. We are filing this Form 10-K/A to amend the financial
statements audit report for MetroLux Theaters set forth in Item 15 of that
report to include the 2002 and 2003 financial statements, along with the
independent audit reportauditor's report for MetroLux Theaters and the audit
opinion for MetroLux Theaters on for the 2002 and 2003 financial statements.
Except as described above, no other changes have been made to the original
filing. This Amendment continues to speak as of the date of the original
filing, and the Registrant has not updated the disclosures contained therein to
reflect any events which occurred at a date subsequent to the filing of the
original filing.
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TRANS-LUX CORPORATION
2004 Form 10-K Annual Report
Table of Contents
PART I
Page
ITEM 1. Business 1
ITEM 2. Properties 7
ITEM 3. Legal Proceedings 7
ITEM 4. Submission of Matters to a Vote of Security Holders 7
PART II
ITEM 5. Market for the Registrant's Common Equity and Related Stockholder
Matters 8
ITEM 6. Selected Financial Data 9
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 11
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 15
ITEM 8. Financial Statements and Supplementary Data 16
ITEM 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 41
ITEM 9A. Controls and Procedures 41
ITEM 9B. Other Information 41
PART III
ITEM 10. Directors and Executive Officers of the Registrant 42
ITEM 11. Executive Compensation 43
ITEM 12. Security Ownership of Certain Beneficial Owners and Management 43
ITEM 13. Certain Relationships and Related Transactions 43
ITEM 14. Principal Accounting Firm Fees 43
PART IV
ITEM 15. Exhibits and Financial Statement Schedules 44
Signatures 47
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this report:
(1)(i) Consolidated Financial Statements of Trans-Lux Corporation
Consolidated Statements of Operations for the Years Ended
December 31, 2004, 2003 and 2002
Consolidated Balance Sheets as of December 31, 2004 and 2003
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2004, 2003 and 2002
Consolidated Statements of Stockholders' Equity for the Years
Ended December 31, 2004, 2003 and 2002
Consolidated Statements of Comprehensive Income for the Years
Ended December 31, 2004, 2003 and 2002
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
(ii) Revised financial statements of MetroLux Theatres, a 50% owned
entity, accounted for by the equity method:
Independent Auditors' Report for the Year Ended December 31,
2004
Independent Auditors' Report for the Year Ended December 31,
2003
Balance Sheets as of December 31, 2004 and 2003
Statements of Income for the Years Ended December 31, 2004 and
2003
Statements of Partners' Equity for the Years Ended December 31,
2004 and 2003
Statements of Cash Flows for the Years Ended December 31, 2004
and 2003
Notes to Financial Statements
(2) Financial Statement Schedules: None.
(3) Exhibits:
3(a) Form of Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 of Registration No.
333-15481).
(b) By-Laws of the Registrant (incorporated by reference to Exhibit 3(b)
of Form 10-K for the year ended December 31, 2001).
4(a) Indenture dated as of December 1, 1994 (form of said indenture is
incorporated by reference to Exhibit 6 of Schedule 13E-4 Amendment
No. 2 dated December 23, 1994).
(b) Indenture dated as of December 1, 1996 (form of said indenture is
incorporated by reference to Exhibit 4.2 of Registration No.
333-15481).
(c) Indenture dated as of March 1, 2004 (form of said indenture is
incorporated by reference to Exhibit 12(d) of Schedule TO dated
March 2, 2004).
1
10.1 Form of Indemnity Agreement -- Directors (form of said agreement is
incorporated by reference to Exhibit 10.1 of Registration No.
333-15481).
10.2 Form of Indemnity Agreement -- Officers (form of said agreement is
incorporated by reference to Exhibit 10.2 of Registration No.
333-15481).
10.3 Amended and Restated Pension Plan dated January 1, 2001 and
Amendment No. 1 dated as of April 1, 2002 (incorporated by reference
to Exhibit 10.3 of Form 10-K for the year ended December 31, 2001).
Amendment No. 2 dated as of December 31, 2002 (incorporated by
reference to Exhibit 10.3 of Form 10-K for the year ended December
31, 2002). Amendment No. 3 dated as of December 31, 2003
(incorporated by reference to Exhibit 10.3 of Form 10-K for the year
ended December 31, 2003).
10.4(a) 1989 Non-Employee Director Stock Option Plan, as amended
(incorporated by reference to Exhibit 10.4(a) of Form 10-K for the
year ended December 31, 1999).
(b) 1995 Stock Option Plan, as amended (incorporated by reference to
Proxy Statement dated April 7, 2000).
10.5 Amended and Restated Commercial Loan and Security Agreement with
People's Bank dated December 23, 2004 (incorporated by reference to
Exhibit 10(a) of Form 8-K filed December 28, 2004).
10.6 Consulting Agreement with Moving Images, LLC dated as of December 1,
2004 and termination letter with Richard Brandt, filed herewith.
10.7 Employment Agreement with Michael R. Mulcahy dated as of April 1,
2005, filed herewith.
10.8 Employment Agreement with Thomas Brandt dated as of April 1, 2005,
filed herewith.
10.9 Employment Agreement with Angela D. Toppi dated as of April 1, 2005,
filed herewith.
10.10 Employment Agreement with Matthew Brandt dated as of April 1, 2005,
filed herewith.
10.11 Employment Agreement with Al Miller dated as of April 1, 2002
(incorporated by reference to Exhibit 10.11 of Form 10-K for the
year ended December 31, 2001).
10.12 Employment Agreement with Thomas F. Mahoney dated as of June 1, 2002
(incorporated by reference to Exhibit 10(a) of Form 10-Q for the
quarter ended June 30, 2002).
10.13 Employment Agreement with Karl P. Hirschauer dated as of April 1,
2003 (incorporated by reference to Exhibit 10.12 of Form 10-K for
the year ended December 31, 2003).
21 List of Subsidiaries, filed herewith.
2
31.1 Certification of Michael R. Mulcahy, President and Co-Chief
Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
filed herewith.
31.2 Certification of Thomas Brandt, Executive Vice President and
Co-Chief Executive Officer, pursuant to Rule 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, filed herewith.
31.3 Certification of Angela D. Toppi, Executive Vice President and Chief
Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
filed herewith.
32.1 Certification of Michael R. Mulcahy, President and Co-Chief
Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
32.2 Certification of Thomas Brandt, Executive Vice President and
Co-Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
filed herewith.
32.3 Certification of Angela D.Toppi, Executive Vice President and Chief
Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
3
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized:
TRANS-LUX CORPORATION
by: /s/ Angela D. Toppi
---------------------
Angela D. Toppi
Executive Vice President and
Chief Financial Officer
Dated: December 12, 2005
4
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated:
/s/ Gene F. Jankowski December 12, 2005
--------------------------------------------
Gene F. Jankowski, Chairman of the Board
/s/ Thomas Brandt December 12, 2005
--------------------------------------------
Thomas Brandt, Executive Vice President
and Co-Chief Executive Officer and Director
/s/ Michael R. Mulcahy December 12, 2005
--------------------------------------------
Michael R. Mulcahy, President
and Co-Chief Executive Officer and Director
5
Part IV
Item 15(a)(1)(ii)
METROLUX THEATRES
REVISED FINANCIAL STATEMENTS
DECEMBER 31, 2004, 2003 AND 2002
6
GUILLEN, SUEDE
--------------
AND COMPANY
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A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS
23480 Park Sorrento, Suite 100B, Calabasas, CA 91302
TEL: (818) 348-4800 - FAX: (818) 348-6326
Visit us on the web at www.gsandcocpa.com
Board of Directors
MetroLux Theatres
Norwalk, Connecticut
Independent Auditors' Report
We have audited the accompanying balance sheet of MetroLux Theatres as of
December 31, 2004, and the related statements of income, partners' equity, and
cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The financial
statements of MetroLux Theatres as of December 31, 2003 and 2002, were audited
by other auditors whose reports dated February 26, 2004 and February 11, 2003,
respectively, expressed unqualified opinions on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MetroLux Theatres as of
December 31, 2004, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.
February 25, 2005
7
KELLOG & ANDELSON
ACCOUNTANCY CORPORATION
K&A
Partners
MetroLux Theatres
Norwalk, Connecticut
Independent Auditor's Report
We have audited the accompanying balance sheets of MetroLux Theatres as of
December 31, 2003 and 2002 and the related statements of income, partners'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MetroLux Theatres as of
December 31, 2003 and 2002, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
February 26, 2004
Sherman Oaks, California
MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTS
CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
C.P.A. ASSOCIATES OFFICES IN PRINCIPAL CITIES
14724 VENTURA BOULEVARD SECOND FLOOR, SHERMAN OAKS, CALIFORNIA 91403
PHONE (818) 971-5100 FAX (818) 971-5155
8
METROLUX THEATRES
BALANCE SHEETS
DECEMBER 31, 2004, 2003 AND 2002
(Dollars in thousands)
ASSETS
2004 2003 2002
------ ------ ------
CURRENT ASSETS:
Cash $ 541 $ 299 $ 820
Concession supplies 13 13 9
Prepaid expenses and other current assets 52 15 17
Due from Partners - 14 4
------ ------ ------
Total current assets 606 341 850
PROPERTY AND EQUIPMENT, net 3,882 3,917 4,105
INTANGIBLE ASSETS, NET 15 20 25
------ ------ ------
$4,503 $4,278 $4,980
====== ====== ======
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES:
Film rentals payable $ 127 $ 159 $ 176
Accounts payable and accrued expenses 165 171 215
Current portion of long-term debt 225 238 223
Deferred revenues 82 85 87
Due to Partners 9 - -
------ ------ ------
Total current liabilities 608 653 701
LONG-TERM DEBT, net of current portion 1,635 1,859 2,097
------ ------ ------
Total liabilities 2,243 2,512 2,798
COMMITMENTS - - -
PARTNERS' EQUITY 2,260 1,766 2,182
------ ------ ------
$4,503 $4,278 $4,980
====== ====== ======
The accompanying notes are an integral part of the financial statements
9
METROLUX THEATRES
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(Dollars in thousands)
2004 2003 2002
------ ------ ------
OPERATING REVENUES:
Theatre operations
Admissions $2,401 $2,765 $2,810
Concessions 1,077 1,162 1,219
Other operating revenues 70 69 87
------ ------ ------
Total operating revenues 3,548 3,996 4,116
------ ------ ------
OPERATING EXPENSES:
Theatre operations
Film costs and advertising 1,389 1,566 1,544
Cost of concessions 209 183 239
Other operating expenses 946 889 886
Administrative expenses 136 112 141
------ ------ ------
Total operating expenses 2,680 2,750 2,810
------ ------ ------
INCOME FROM OPERATIONS 868 1,246 1,306
------ ------ ------
OTHER (EXPENSE) INCOME:
Interest income 1 1 1
Gain on sale of property and equipment - 248 405
Interest expense (75) (88) (110)
Write off of construction in progress - (23) -
------ ------ ------
Net other (expense) income (74) 138 296
------ ------ ------
NET INCOME $ 794 $1,384 $1,602
====== ====== ======
The accompanying notes are an integral part of the financial statements
10
METROLUX THEATRES
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(Dollars in thousands)
Trans-Lux
Metro Colorado Loveland
Corporation Corporation Total
-------------- ----------- -------
PARTNERS' EQUITY, January 1, 2002 $1,065 $1,065 $ 2,130
PARTNERSHIP DISTRIBUTIONS (775) (775) (1,550)
NET INCOME 801 801 1,602
-------------- ----------- -------
PARTNERS' EQUITY, December 31, 2002 1,091 1,091 2,182
PARTNERSHIP DISTRIBUTIONS (900) (900) (1,800)
NET INCOME 692 692 1,384
-------------- ----------- -------
PARTNERS' EQUITY, December 31, 2003 883 883 1,766
EQUITY CONTRIBUTION FROM LEASE
GUARANTEE 17 17 34
PARTNERSHIP DISTRIBUTIONS (167) (167) (334)
NET INCOME 397 397 794
-------------- ----------- ------
PARTNERS' EQUITY, December 31, 2004 $1,130 $1,130 $2,260
============== =========== ======
The accompanying notes are an integral part of the financial statements
11
METROLUX THEATRES
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(Dollars in thousands)
2004 2003 2002
----- ------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 794 $ 1,384 $ 1,602
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 164 155 151
Gain on sale of property and equipment - (248) (405)
Write off of construction in progress - 23 -
Changes in assets and liabilities:
Concession supplies - (4) 1
Prepaid expenses and other current assets (3) 2 (6)
Film rentals payable (32) (17) (35)
Accounts payable and accrued expenses (6) (44) 51
Deferred revenues (3) (2) 16
Due from Partners 23 (10) (3)
----- ------- -------
Net cash provided by operating activities 937 1,239 1,372
----- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of property and equipment - 327 514
Acquisition of property and equipment (124) (64) (30)
Acquisition of intangible assets - - (13)
----- ------- -------
Net cash (used in) provided by investing activities (124) 263 471
----- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payment on long-term debt (237) (223) (180)
Partnership distributions (334) (1,800) (1,550)
----- ------- -------
Net cash (used in) financing activities (571) (2,023) (1,730)
----- ------- -------
NET INCREASE (DECREASE) IN CASH 242 (521) 113
CASH, beginning of year 299 820 707
----- -------- -------
CASH, end of year $ 541 $ 299 $ 820
===== ======== =======
The accompanying notes are an integral part of the financial statements
12
METROLUX THEATRES
STATEMENTS OF CASH FLOWS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(Dollars in thousands)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 75 $ 89 $ 110
===== ======= =======
NON-CASH OPERATING AND FINANCING ACTIVITIES:
During the year ended December 31, 2004, the Company recorded prepaid rent through an increase
in equity in the amount of $34 (See Note 7).
The accompanying notes are an integral part of the financial statements
13
METROLUX THEATRES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
---------------------
MetroLux Theatres (the "Company") is a general partnership between
Metro Colorado Corporation, a California corporation ("Metro
Colorado"), and Trans-Lux Loveland Corporation, a Colorado corporation
("Trans-Lux"). The partnership was created for the purpose of engaging
in the business of contructing, purchasing, owning and performing all
functions in relation to the operation of a multi-screen movie theatre,
ancillary real estate and other entertainment uses in Loveland,
Colorado.
Property and Equipment
----------------------
Property and equipment are stated at cost, net of accumulated
depreciation. Depreciation is provided utilizing straight-line and
accelerated methods over the estimated useful lives of the assets as
follows:
Buildings and improvements 10-39 years
Theatre equipment 5-10 years
Software 3 years
Major repairs and replacements are capitalized and ordinary maintenance
and repairs are charged to operations as incurred.
Intangible Assets
-----------------
Intangible assets consist of loan fees net of accumulated amortization.
Amortization is provided utilizing the straight-line method over the
term of the loan.
Income Taxes
------------
The Company is treated as a partnership for federal and state income
tax purposes. Consequently, federal and state income taxes are not
payable, or provided for, by the Company. Partners are taxed
individually on their shares of the Company's earnings. The Company's
net income or loss is allocated among the Partners in accordance with
their percentage of ownership.
Revenue Recognition
-------------------
The Company recognizes revenue when tickets and concession goods are
sold. Revenue from gift certificates and group activity is recognized
when they are redeemed.
14
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Concentration of Credit Risk (Dollars in thousands)
---------------------------------------------------
Financial instruments which potentially subject the Company to
concentrations of credit risk consist of cash. The Company places its
cash with high credit quality financial institutions. Total amounts
for the years ended December 31, 2004, 2003 and 2002 in excess of the
FDIC limit amounted to approximately $519, $162 and $704, respectively.
Services from Partners
----------------------
The Partners provide management and administrative services to the
Company. Trans-Lux provides oversight over the Company's movie theatre
operations and Metro Colorado provides accounting, payroll, human
resource and other management and administrative services. The
services provided by the Partners are deemed to be of equal value and
are not recognized on the financial statements of the Company.
Management Estimates
--------------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 2 - DUE FROM PARTNERS (Dollars in thousands)
----------------------------------------
As of December 31, 2004, 2003 and 2002, the net advances due (to) from
the general partners were approximately ($9), $14 and $4, respectively.
These advances are unsecured, non-interest bearing and are expected to
be repaid within the next year.
During the year ended December 31, 2004, the Company received net
advances from the general partners of $23. During the years ended
December 31, 2003 and 2002, the Company made net advances to general
partners of approximately $10 and $3, respectively.
15
NOTE 3 - PROPERTY AND EQUIPMENT
----------------------
Property and equipment consist of the following for the years ended
December 31:
2004 2003 2002
------ ------ ------
Buildings $4,027 $4,027 $4,027
Improvements 66 66 45
Theatre equipment 231 231 197
Land 519 519 598
Construction in progress 124 - 23
Software 9 9 -
------ ------ ------
4,976 4,852 4,890
Less: accumulated depreciation and
amortization 1,094 935 785
------ ------ ------
$3,882 $3,917 $4,105
====== ====== ======
Depreciation and amortization expense for the years ended December 31,
2004, 2003 and 2002 was approximately $159, $150 and $147,
respectively.
NOTE 4 - INTANGIBLE ASSETS (Dollars in thousands)
----------------------------------------
Intangible assets consist of the following for the years ended December
31:
2004 2003 2002
----- ----- -----
Loan fees $ 29 $ 29 $ 29
Less: accumulated amortization 14 9 4
----- ----- -----
$ 15 $ 20 $ 25
===== ===== =====
Amortization expense related to intangible assets amounted to $5, $5
and $4 for the years ended December 31, 2004, 2003 and 2002,
respectively.
16
NOTE 5 - LONG-TERM DEBT (Dollars in thousands)
-------------------------------------
Long-term debt consists of the following for the years ended December 31:
2004 2003 2002
------ ------ ------
The Company has a $2.5 million real estate
loan with a bank. Borrowings under the term
loan bear interest at the bank's prime rate
minus 0.30% (4.95%, 3.70% and 3.95% at
December 31, 2004, 2003 and 2002,
respectively). Payments under the agreement
are in equal monthly installments of
approximately $26 of principal and interest,
maturing January 2009 with one last payment of
interest and principal of approximately $890.
The loan is collateralized by the assets of
the Company and 60% of the debt is guaranteed
by each of the Partners. $1,860 $2,097 $2,320
Less: current portion 225 238 223
------ ------ ------
$1,635 $1,859 $2,097
====== ====== ======
Maturities of long-term debt outstanding at December 31, 2004 are as
follows:
Year Ending
December 31,
------------
2005 $225
2006 236
2007 248
2008 261
2009 890
------
$1,860
======
17
NOTE 6 - DEFERRED REVENUES (Dollars in thousands)
----------------------------------------
Deferred revenues at December 31, 2004, 2003 and 2002 consist of gift
certificates and group activity passes that are used for concession
goods and admissions at theatres, respectively. The breakdowns is as
follows as of December 31:
2004 2003 2002
---- ---- ----
Gift certificates $75 $75 $83
Group activity passes 7 10 4
---- ---- ----
$82 $85 $87
==== ==== ====
NOTE 7 - COMMITMENTS (Dollars in thousands)
----------------------------------
In August 2004, the Company signed a lease for a space for a new
multi-screen movie theatre. The theatre is under construction and is
expected to open in October 2005. The initial lease term is for 15
years and may be extended for a total of three extension periods of 5
years each. The lease requires minimum annual rent payments ranging
from $500 to $600 and contains a provision for an additional rent equal
to 10% gross annual revenue if the revenues exceed certain thresholds.
The lease is guaranteed by Metropolitan Theatres Corporation ("MTC"), a
parent of Metro Colorado Corporation. The future minimum rent payments
are as follow:
Year Ending
December 31,
------------
2005 $ 83
2006 500
2007 500
2008 500
2009 500
2010-2014 2,742
2015-2019 2,992
Thereafter 100
------
$7,917
======
The Company has a month to month sublease agreement with an unrelated
party for $2 a month. For the years ending December 31, 2004, 2003 and
2002, the Company recognized $18 of sublease income for each of the
years.
18
NOTE 7 - COMMITMENTS (Dollars in thousands) - CONTINUED
----------------------------------------------
In connection with the guarantee by MTC mentioned above, Trans-Lux paid
MTC $17 in consideration for the guarantee of the new lease. In
accordance with FASB Interpretation No. 45 - "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others", the Company recorded the payment
by Trans-Lux, and the respective value of the guarantees for Metro
Colorado, as an equity contribution by the partners, and an increase
in prepaid rent in the accompanying financial statements.
NOTE 8 - PENSION PLAN (Dollars in thousands)
-----------------------------------
The Company has adopted a Safe Harbor Plan covering substantially all
of its employees. Participating employees may contribute 1% to 20% of
their salary, subject to required participating percentages of 401(k)
regulations.
The Company contributes, at the discretion of management, a matching of
100% of the first 3% of the employee's contribution and matches 50% of
the 2% of the employee's contribution up to a maximum of 5% of the
employee's gross salary. Contributions made for the years ended
December 31, 2004, 2003 and 2002 were $3, $2 and $2, respectively.
NOTE 9 - SALE OF ASSETS (Dollars in thousands)
-------------------------------------
During the years ended December 31, 2003 and 2002, the Company sold
land and received net proceeds of $327 and $514, respectively. The
sales resulted in a gain of $248 and $405, recorded for the years ended
December 31, 2003 and 2002, respectively.
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