-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VPELnnv5Dx2dARrnaGcDM2re/RUnWZ2uzx2fMTzmmkP6I0wbgH4StUID5BJfzhcf B6p5Jj1KZtqV/tQbHYxOJw== 0000950147-98-000452.txt : 19980604 0000950147-98-000452.hdr.sgml : 19980604 ACCESSION NUMBER: 0000950147-98-000452 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980325 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980603 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: DENAMERICA CORP CENTRAL INDEX KEY: 0000925779 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 581861457 STATE OF INCORPORATION: GA FISCAL YEAR END: 0101 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-13226 FILM NUMBER: 98641889 BUSINESS ADDRESS: STREET 1: 7373 N SCOTTSCALE RD STREET 2: STE D-120 CITY: SCOTTSDALE STATE: AZ ZIP: 85253 BUSINESS PHONE: 6024837055 MAIL ADDRESS: STREET 1: 3000 NORTHWOODS PKWY STREET 2: STE 235 CITY: NORCROSS STATE: GA ZIP: 30071 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN FAMILY RESTAURANTS INC DATE OF NAME CHANGE: 19940622 8-K/A 1 AMENDMENT TO 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K/A Amendment No. 1 to Form 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 25, 1998 DENAMERICA CORP. ---------------- (Exact name of registrant as specified in its charter) GEORGIA 1-13226 58-1861457 - ----------------------------- ------------------- ------------------- (State or other (Commission File No.) (IRS Employer ID No.) jurisdiction of incorporation) 7373 N. Scottsdale Road, Suite D-120, Scottsdale, Arizona 85253 --------------------------------------------------------------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (602) 483-7055 DENAMERICA CORP. FORM 8-K/A AMENDMENT NO. 1 TO FORM 8-K CURRENT REPORT ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On March 25, 1998, DenAmerica Corp. (the "Company") sold 63 Denny's restaurants and eight non-branded restaurants in 10 states to Olajuwon Holdings, Inc. ("Olajuwon"), a Denny's franchisee, for gross proceeds of $28.7 million. The Company utilized the cash proceeds of $25.2 million from this transaction to (i) repay an outstanding promissory note at a $2.4 million discount from its principal amount of approximately $15.3 million; (ii) cancel outstanding warrants to acquire approximately 1.0 million shares of Common Stock at an exercise price of $1.90 per share; (iii) permanently reduce its outstanding borrowings under the term loan portion of its credit facility; and (iv) repay certain equipment operating leases associated with the sold restaurants. During 1997 and 1998, the Company also sold an additional 33 restaurants. These sales consist of (i) the sale of 11 non-branded restaurants located in Michigan on April 9, 1997; (ii) the sale of 17 Denny's restaurants located in Georgia, Alabama, and South Carolina on July 31, 1997; and (iii) the sale of five Denny's restaurants located in Wyoming on March 13, 1998. Aggregate proceeds to the Company from these transactions consisted of cash of approximately $3.4 million and promissory notes in the principal amount of $600,000. The transactions related to these sales are more fully described in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission on April 15, 1998. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of Businesses Acquired. Not applicable. (b) Pro Forma Financial Information. Introduction Unaudited Condensed Consolidated Pro Forma Statements of Operations for the Fiscal Year Ended December 31, 1997 Unaudited Condensed Consolidated Pro Forma Statements of Operations for the Three Months Ended April 1, 1998 Notes To Unaudited Condensed Consolidated Pro Forma Statements of Operations DenAmerica Corp. Unaudited Condensed Consolidated Pro Forma Statements of Operations Introduction The following unaudited condensed consolidated pro forma statements of operations of DenAmerica Corp. for the fiscal year ended December 31, 1997 and the three months ended April 1, 1998 give effect to (i) the sale of 71 restaurants to Olajuwon as if it had occurred as of January 1, 1997; (ii) the sale of a total of 33 restaurants in three other transactions completed during 1997 and 1998 as if those sales had occurred as of January 1, 1997; (iii) the repayment of an outstanding promissory note at a $2.4 million discount from its principal amount of approximately $15.3 million as if the repayment had occurred as of January 1, 1997; (iv) repayments of an aggregate of approximately $10.0 million on the term loan and revolving note portions of the Company's credit facility, together with accrued and unpaid interest, as if those repayments had occurred as of January 1, 1997; and (iv) the net reduction in operating expenses that occurred as a result of employee reductions and reductions in related administrative expenses as a result of the restaurant sales described above. See Item 2, "Acquisition or Disposition of Assets." The unaudited condensed consolidated pro forma statements of operations presented herein do not purport to represent what the Company's actual results of operations would have been had the transactions described above occurred on those dates or to project the Company's results of operations for any future period. DenAmerica Corp. Unaudited Condensed Consolidated Pro Forma Statement of Operations for the Fiscal Year Ended December 31, 1997 (In thousands, except per share data)
Pro Forma Sold Companies Adjustments Historical ------------------ ----------------------- Pro DenAmerica Olajuwon Other Subtotal Dr Cr Forma ---------- -------- ----- -------- -- -- ----- Restaurant sales $ 300,579 $ 53,995 $ 11,649 $ 234,935 $ 234,935 --------- --------- --------- --------- --------- Restaurant operating expenses: Food and beverage cost 82,255 14,498 3,362 64,395 64,395 Payroll and payroll related costs 103,451 19,644 4,629 79,178 79,178 Other operating costs 82,305 15,121 4,022 63,162 1,405(a) 64,567 Depreciation and amortization 9,367 2,221 803 6,343 6,343 Charge for impaired assets 14,100 -- -- 14,100 (14,100)(b) 0 --------- --------- --------- --------- --------- --------- --------- Total operating costs 291,478 51,484 12,816 227,178 1,405 (14,100) 214,483 --------- --------- --------- --------- --------- --------- --------- Restaurant operating income (loss) 9,101 2,511 (1,167) 7,757 1,405 (14,100) 20,452 Administrative expenses 13,684 -- -- 13,684 (1,076)(c) 12,608 --------- --------- --------- --------- --------- --------- --------- Operating income (loss) (4,583) 2,511 (1,167) (5,927) 1,405 (15,176) 7,844 Interest expenses - net 13,655 433 23 13,199 (3,589)(d) 9,610 Minority interest in joint ventures (519) -- -- (519) (519) --------- --------- --------- --------- --------- --------- --------- Income (loss) before income taxes (17,719) 2,078 (1,190) (18,607) 1,405 (18,765) (1,247) Income tax provision (benefit) 3,258 -- -- 3,258 3,757(e) (499) --------- --------- --------- --------- --------- --------- --------- Income (loss) from continuing operations ($ 20,977) $ 2,078 ($ 1,190) ($ 21,865) $ 1,405 ($ 22,522) ($ 748) ========= ========= ========= ========= ========= ========= ========= Basic and diluted income (loss) per share ($ 1.56) ($ 0.06) Basic and diluted weighted average shares outstanding 13,447 13,447
2 DenAmerica Corp. Unaudited Condensed Consolidated Pro Forma Statement of Operations for the Three Months Ended April 1, 1998 (In thousands, except per share data)
Pro Forma Sold Companies Adjustments Historical ------------------- ---------------------- Pro DenAmerica Olajuwon Wyoming Subtotal Dr Cr Forma -------- -------- -------- -------- -------- -------- -------- Restaurant sales $ 72,880 $ 11,536 $ 360 $ 60,984 -- -- $ 60,984 -------- -------- -------- -------- -------- Restaurant operating expenses: Food and beverage cost 19,970 3,141 118 16,711 16,711 Payroll and payroll related costs 25,102 4,433 183 20,486 20,486 Other operating costs 19,588 3,778 217 15,593 576(a) 16,169 Depreciation and amortization 1,786 -- 8 1,778 1,778 -------- -------- -------- -------- -------- Total operating costs 66,446 11,352 526 54,568 55,144 -------- -------- -------- -------- -------- Restaurant operating income (loss) 6,434 184 (166) 6,416 5,840 Administrative expenses 3,056 -- -- 3,056 (208)(b) 2,848 -------- -------- -------- -------- -------- Operating income (loss) 3,378 184 (166) 3,360 2,992 Interest expenses - net 3,426 109 16 3,301 (854)(c) 2,447 -------- -------- -------- -------- -------- -------- -------- Income (loss) before income taxes and extraordinary item (48) 75 (182) 59 576 (1,062) 545 Income tax provision (benefit) (17) -- -- (17) 194(d) 177 -------- -------- -------- -------- -------- -------- -------- Income (loss) before extraordinary item ($ 31) $ 75 ($ 182) $ 76 $ 770 ($ 1,062) $ 368 ======== ======== ======== ======== ======== ======== ======== Basic and diluted income (loss) per share $ 0.00 $ 0.03 Basic and diluted weighted average shares outstanding 13,447 13,447
3 DenAmerica Corp. Notes to Unaudited Condensed Consolidated Pro Forma Statements of Operations (Dollars in thousands) The following explanations serve to describe the assumptions used in determining the pro forma adjustments necessary to present the pro forma results of operations for the fiscal year ended December 31, 1997:
Fiscal Year Ended December 31, 1997 ----------------- (a) Elimination of the gain from restaurants sold $1,405 ====== (b) Elimination of capital loss on impairment of assets from Olajuwon sale ($14,100) ======= (c) Reduction in administrative personnel and related expenses as restaurants were sold ($1,076) ======= (d) Reduction of net interest expense for paydown on notes and interest earned on notes receivable Interest expense ($3,173) Interest income (416) ------ ($3,589) ====== (e) Income tax for above adjustments at an effective rate of 40% ($3,757) ======
The following explanations serve to describe the assumptions used in determining the pro forma adjustments necessary to present the pro forma results of operations for the three months ended April 1, 1998:
Three Months Ended April 1, 1998 ------------- (a) Elimination of gain from sale of Wyoming restaurants $576 ==== (b) Reduction in administrative personnel and related expenses as restaurants were sold $208 ==== (c) Reduction of net interest expense for paydown on notes and interest earned on notes receivable Interest expense $712 Interest income 142 --- $854 ==== (d) Income tax effect for above adjustments at an effective rate of 40% $194 ====
4 (c) Exhibits. Exhibit No. Description of Exhibit - ----------- ---------------------- 10.116 Asset Purchase Agreement dated January 27, 1998, among DenAmerica Corp., Olajuwon Holdings, Inc., and Akinola Olajuwon (1) 10.117 First Amendment to Asset Purchase Agreement dated March 16, 1998 between DenAmerica Corp., Olajuwon Holdings, Inc., and Akinola Olajuwon (1) 10.118 Promissory Note dated March 25, 1998, from Olajuwon Holdings, Inc. to DenAmerica Corp. in the principal amount of $1,800,000 (1) 10-119 Negative Working Capital Note dated March 25, 1998, from Olajuwon Holdings, Inc. to DenAmerica Corp. in the principal amount of $1,700,000 (1) - ------------------------- (1) Incorporated by reference to the Company's Current Report on Form 8-K as filed on April 9, 1998. Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. June 2, 1998 DENAMERICA CORP. By: /s/ Todd S. Brown ----------------------------------- Todd S. Brown Vice President and Chief Financial Officer 6 -----END PRIVACY-ENHANCED MESSAGE-----