-----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, M0sYRz0O6Ez7G8i9FbG9p8BTfCuGAstPGnAr8PCDGLNi0AMZ1EZOe+9nK8+WrDs1 TIKmt/7khaI1A4Mt8LXy1g== 0000950153-96-000819.txt : 19961107 0000950153-96-000819.hdr.sgml : 19961107 ACCESSION NUMBER: 0000950153-96-000819 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960703 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961106 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: 0928 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-13226 FILM NUMBER: 96654742 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 NO. 3 TO DENAMERICA CORP FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A AMENDMENT NO. 3 TO CURRENT REPORT ON 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): July 3, 1996 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 --------------- 2 DENAMERICA CORP. FORM 8-K/A AMENDMENT NO. 3 TO CURRENT REPORT ON FORM 8-K ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS. (A) CONSOLIDATED FINANCIAL STATEMENTS OF BLACK-EYED PEA U.S.A. INC. AND SUBSIDIARIES(1) Independent Auditors' Report Consolidated Balance Sheets as of April 1, 1996 and April 3, 1995 Consolidated Statements of Operations for the Years Ended April 1, 1996, April 3, 1995, and March 28, 1994 Consolidated Statements of Stockholders' Equity for the Years Ended April 1, 1996, April 3, 1995, and March 28, 1994 Consolidated Statements of Cash Flows for the Years Ended April 1, 1996, April 3, 1995, and March 28, 1994 Notes to Consolidated Financial Statements (1) Incorporated by reference to the Registrant's Form 8-K/A Amendment No. 1 to Current Report on Form 8-K as filed on September 16, 1996. (B) PRO FORMA FINANCIAL STATEMENTS. Introduction Unaudited Condensed Consolidated Pro Forma Statement of Operations For the Year Ended December 27, 1995 Unaudited Condensed Consolidated Statement of Operations For the 27-Week Period Ended July 3, 1996 Notes to Unaudited Condensed Consolidated Pro Forma Statements of Operations 2 3 DENAMERICA CORP. UNAUDITED CONDENSED CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS INTRODUCTION On March 29, 1996, Denwest Restaurant Corp. ("DRC") merged with and into American Family Restaurants, Inc. ("AFR"), with AFR as the surviving corporation (the "Merger"). In connection with the Merger, the name of AFR was changed to DenAmerica Corp (the "Company"). Upon consummation of the Merger, the former shareholders of DRC owned an aggregate of approximately 53.0% of the Company's outstanding Common Stock. Accordingly, the Merger has been accounted for as a reverse purchase under generally accepted accounting principals, pursuant to which DRC is considered the acquiring company for accounting purposes, even though the Company is the surviving legal entity. As a result, the historical financial statements of DRC are the continuing historical financial statements of the Company. The transactions related to the Merger are more fully described in the Company's Current Report on Form 8-K as filed with the Securities and Exchange Commission on April 15, 1996, as amended by Form 8-K/A as filed by the Company on June 12, 1996. On July 3, 1996, the Company acquired all of the issued and outstanding common stock of Black-eyed Pea U.S.A., Inc. ("BEP") (the "BEP Acquisition"). The purchase price for the stock of BEP consisted of cash of approximately $50.0 million and a promissory note in the principal amount of $15.0 million issued to the seller of BEP (the "BEP Purchase Note"). In connection with the BEP Acquisition, the Company repaid all of the $6.0 million principal amount outstanding on its Series A 13% Subordinated Notes due 2003 (the "Series A Notes"), plus accrued and unpaid interest on the Series A Notes. The Company repaid the Series A Notes by paying cash of approximately $5.2 million and by issuing 250,000 shares of Common Stock valued at $4.00 per share to the holder of the Series A Notes. The following unaudited condensed consolidated pro forma statements of operations of DenAmerica Corp. for the year ended December 27, 1995 and the 27-week period ended July 3, 1996, give effect to (i) the acquisition of BEP which had an effective accounting date of June 24, 1996, as if it occurred at the beginning of the period; (ii) the reverse purchase accounting for the acquisition of AFR by DRC as of March 27, 1996, as if it had occurred at the beginning of the period; (iii) the repayment of the $6.0 million outstanding principal of the Series A Notes, together with accrued and unpaid interest on the Series A Notes, as if it had occurred at the beginning of each period; and (iv) the net reduction in operating expenses of AFR and BEP after the Merger and the BEP Acquisition that occurred as a result of employee terminations, closing of duplicate administrative facilities, or contractual changes. The financial statements of AFR and BEP for the fiscal year ended December 27, 1995, include (a) AFR's financial statements for its fiscal year ended September 27, 1995, and (b) BEP's financial statements for its fiscal year ended April 1, 1996. The financial statements of AFR and BEP for the 27-week period ended July 3, 1996 include, prior to their acquisition by the Company, (1) AFR's financial statements for the three-month period ended March 27, 1996, and (2) BEP's financial statements for the period from January 9, 1996 to June 24, 1996. 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 Merger, the BEP Acquisition, or the other transactions described above occurred on those dates or to project the Company's results of operations for any future period. 3 4 DENAMERICA CORP. UNAUDITED CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS FOR THE FISCAL YEAR ENDED DECEMBER 27, 1995 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
ACQUIRED PRO FORMA ADJUSTMENTS COMPANIES DR(Cr) HISTORICAL ------------------------- --------------------------- PRO DENAMERICA AFR BEP AFR BEP FORMA ---------- --- --- --- --- ----- STATEMENTS OF OPERATIONS DATA: Restaurant sales: Denny's restaurants ................... $ 70,429 $ 74,679 $ -- $ -- $ -- $ 145,108 Black-eyed Pea restaurants ............ -- -- 145,455 -- -- 145,455 Other restaurants ..................... 4,254 32,218 -- -- -- 36,472 --------- ---------- --------- --------- ------- ----------- Total restaurant sales ................ 74,683 106,897 145,455 -- -- 327,035 Restaurant operating expenses: Cost of food and beverage.............. 20,343 30,529 39,914 (328) (a) -- 90,458 Payroll and payroll related costs...... 25,025 36,329 48,897 (164) (b) -- 110,087 Depreciation and amortization.......... 2,936 3,462 8,792 (212) (c) (7,412) (aa) 7,566 Other restaurant operating costs....... 19,213 27,654 35,021 (239) (d) 7,556 (bb) 89,205 Provision for restaurant closures...... -- -- 10,225 -- -- 10,225 Provision for loss on impairment of assets............................ 523 -- 50,384 -- (50,384) (cc) 523 --------- ---------- --------- -------- -------- ----------- Total restaurant operating expenses............................. 68,040 97,974 193,233 (943) (50,240) 308,064 Restaurant operating income (loss)......... 6,643 8,923 (47,778) 943 50,240 18,971 Administrative expenses.................... 3,380 5,166 8,588 (1,869) (e) (3,982) (dd) 11,283 --------- ---------- --------- ------ -------- ----------- Operating income (loss).................... 3,263 3,757 (56,366) 2,812 54,222 7,688 Other (income) expense..................... -- (156) 717 -- -- 561 Interest expense, net...................... 2,467 1,714 5,362 3,640 (f) (4,162) (ee) 9,556 535 (g) --------- ---------- --------- -------- -------- ----------- Income (loss) before minority interest in joint ventures and income taxes....................... 796 2,199 (62,445) (1,363) 58,384 (2,429) Minority interest in joint ventures........ (291) 85 -- -- -- (206) --------- ---------- --------- -------- -------- ----------- Income (loss) before income taxes.......... 505 2,284 (62,445) (1,363) 58,384 (2,635) Income taxes............................... 305 578 (12,877) (341) (h) 11,334 (ff) (1,001) --------- ---------- --------- -------- -------- ----------- Income (loss) from continuing operations............................. $ 200 $ 1,706 $ (49,568) $ (1,022) $ 47,050 $ (1,634) ========= ========== ========= ======== ======== =========== Income (loss) from continuing operations per common and common equivalent share $ 0.28 $ (0.13) ========== =========== Weighted average number of common and common equivalent shares outstanding(i) 6,171,444 13,108,944 ========= ==========
4 5 DENAMERICA CORP. UNAUDITED CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS FOR THE 27-WEEK PERIOD ENDED JULY 3, 1996 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
ACQUIRED PRO FORMA ADJUSTMENTS COMPANIES DR(Cr) HISTORICAL ------------------------- --------------------------- PRO DENAMERICA AFR BEP AFR BEP FORMA ---------- --- --- --- --- ----- (13 weeks) (24 weeks) Restaurant sales: Denny's restaurants................ $ 64,078 $ 20,417 $ -- $ -- $ -- $ 84,495 Black-eyed Pea restaurants......... 3,402 -- 66,645 -- -- 70,047 Other restaurants.................. 11,693 8,047 -- -- -- 19,740 ----------- -------- -------- -------- -------- ---------- Total restaurant sales............. 79,173 28,464 66,645 -- -- 174,282 Restaurant operating expenses: Cost of food and beverage.......... 21,971 8,628 19,832 (79) (a) -- 50,352 Payroll and payroll related costs.. 27,416 11,686 20,206 -- -- 59,308 Depreciation and amortization...... 2,836 1,134 4,231 (322) (c) (3,541) (aa) 4,338 Other restaurant operating costs... 20,074 8,726 13,745 -- 3,778 (bb) 46,323 Provision for restaurant closures.. -- -- 10,225 -- -- 10,225 Provision for loss on impairment of assets........................ -- -- 50,384 -- (50,384) (cc) -- ----------- -------- -------- -------- --------- ---------- Total restaurant operating expenses......................... 72,297 30,174 118,623 (401) (50,147) 170,546 Restaurant operating income (loss)..... 6,876 (1,710) (51,978) 401 50,147 3,736 Administrative expenses................ 3,181 1,687 5,543 (467) (e) (3,240) (dd) 6,704 ----------- -------- -------- -------- -------- ---------- Operating income (loss)................ 3,695 (3,397) (57,521) 868 53,387 (2,968) Other (income) expense................. -- (31) 229 -- -- 198 Interest expense, net.................. 3,651 583 2,549 910 (f) (1,859) (ee) 5,968 134 (g) ----------- -------- -------- -------- -------- ---------- Income (loss) before minority interest in joint ventures and income taxes................... 44 (3,949) (60,299) (176) 55,246 (9,134) Minority interest in joint ventures.... (11) 95 -- -- -- 84 ----------- -------- -------- -------- -------- ---------- Income (loss) before income taxes...... 33 (3,854) (60,299) (176) 55,246 (9,050) Income taxes........................... 13 (1,156) (11,699) (14) (h) 9,353 (ff) (3,503) ----------- -------- -------- -------- -------- ---------- Income (loss) from continuing operations......................... $ 20 $ (2,698) $(48,600) $ (162) $ 45,893 $ (5,547) =========== ======== ======== ======= ======= =========== Income (loss) from continuing operations per common and common equivalent share $ 0.00 $ (0.54) =========== =========== Weighted average number of common and common equivalent shares outstanding(i) 10,293,000 10,293,000 =========== ===========
5 6 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 of AFR and DRC for the year ended December 27, 1995 and the 27-week period ended July 3, 1996:
27-WEEK FISCAL PERIOD YEAR ENDED ENDED DEC. 27, 1995 JULY 3, 1996 ------------- ------------ (a) Adjust food costs for discounts not taken by AFR $ (328) $ (79) ========= ======== (b) Adjustment for inclusion of DRC employees under the new workers' compensation costs $ (164) $ - ========= ======== (c) Adjustment for new depreciation and amortization for AFR Property and equipment 1,700 425 Goodwill 1,550 387 --------- -------- 3,250 812 Amount recorded in financial statements 3,462 1,134 --------- -------- Pro forma adjustment $ (212) $ (322) ========= ======== (d) Adjustment for inclusion of DRC under the new insurance $ (239) $ ========= ======== (e) Adjustment for consolidation of administrative expenses $ (1,869) $ (467) ========= ======== (f) Adjustment for additional interest on subordinated notes Interest expense at 13% $ 3,153 $ 788 Amortization of discount 487 122 --------- -------- $ 3,640 $ 910 ========= ======== (g) Adjustment for additional interest expense Additional borrowings of $5,096 for Merger-related expenses at an effective rate of 10.5% $ 535 $ 134 ========= ======== (h) Adjustment for income taxes for above adjustments at an effective rate of 38% $ (341) $ (14) ========= ========
(i) The weighted average number of common shares outstanding includes the number of common shares of AFR outstanding as of the Merger increased by the number of shares issued to the former shareholders of DRC in connection with the Merger 6 7 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 of BEP for the year ended December 27, 1995 and the 24-week period ended July 3, 1996:
24-WEEK FISCAL PERIOD YEAR ENDED ENDED DEC. 27, 1995 JULY 3, 1996 ------------- ------------ (aa) Adjustment for new depreciation and amortization for BEP principally arising from the sale and leaseback of restaurant property and equipment: Property and equipment $ 1,380 $ 690 Amount recorded in financial statements 8,792 4,231 --------- --------- Pro forma adjustment $ (7,412) $ (3,541) --------- --------- (bb) Adjustment to reflect new operating lease payments for land, building and equipment which were sold and leased back $ 7,556 $ 3,778 ========= ========= (cc) Adjustment to reflect the elimination of the historical provision for loss on impairment of assets resulting from the sale to DenAmerica $ (50,384) $ (50,384) ========= ========= (dd) Adjustment for consolidation of administrative expenses arising from the elimination of employees and other costs when administrative facilities were consolidated $ (3,982) $ (3,240) ========= ========= (ee) Adjustment to eliminate interest on historical debt agreements at acquisition date and to add interest on the BEP Purchase Note: Elimination of historical interest $ (5,182) $ (2,369) Interest on the BEP Purchase Note 1,800 900 Elimination of interest on the Series A Notes (780) (390) --------- --------- $ (4,162) $ (1,859) ========= ========= (ff) Adjustment for income taxes for the above adjustments at an effective rate of 38% $ 11,334 $ 9,353 ========= =========
7 8 (c) EXHIBITS. EXHIBIT NO. DESCRIPTION OF EXHIBIT - ----------- ---------------------- 2.5 Stock Purchase Agreement dated May 31, 1996, between BEP Holdings, Inc. and DenAmerica Corp.(1) 4.6 Supplemental Indenture (Series B Notes) between DenAmerica Corp. and State Street Bank and Trust Company, as trustee.(1) 4.7 Common Stock Purchase Warrant dated July 3, 1996, issued to BEP Holdings, Inc.(1) 4.8 Common Stock Purchase Warrant dated July 3, 1996, issued to Banque Paribas.(1) 10.92A Amended and Restated Credit Agreement dated as of July 3, 1996, among DenAmerica Corp., the Banks named therein, and Banque Paribas, as Agent.(1) 10.96 Senior Subordinated Promissory Note dated July 3, 1996, in the principal sum of $15,000,000, payable by DenAmerica Corp. to BEP Holdings, Inc.(1) 10.97 Registration Rights Agreement dated as of July 3, 1996, between DenAmerica Corp. and BEP Holdings, Inc.(1) 10.98 Intercreditor Agreement among DenAmerica Corp., certain holders of DenAmerica's Series B Notes, and State Street Bank and Trust Company.(1) 10.99 Sale and Lease Agreement dated July 3, 1996, among FFCA Acquisition Corporation, Black-eyed Pea U.S.A., Inc., and Texas BEP, L.P.(1) 10.100 Form of Lease dated July 3, 1996, between FFCA Acquisition Corp. and DenAmerica Corp.(1) 10.101 Form of Sublease dated July 3, 1996, between DenAmerica Corp. and Black-eyed Pea U.S.A., Inc.(1) 10.102 Form of Sublease dated July 3, 1996, between DenAmerica Corp. and Texas BEP, L.P.(1) 10.103 Equipment Purchase Agreement and Bill of Sale dated July 3, 1996, between LH Leasing Company, Inc. and Black-eyed Pea U.S.A., Inc.(1) 10.104 Equipment Purchase Agreement and Bill of Sale dated July 3, 1996, between LH Leasing Company, Inc. and Texas BEP, L.P.(1) 10.105 Equipment Lease dated July 3, 1996, between LH Leasing Company, Inc. and DenAmerica Corp.(1) 10.106 Equipment Sublease dated July 3, 1996, between DenAmerica Corp. and Black-eyed Pea, U.S.A., Inc.(1) 10.107 Equipment Sublease dated July 3, 1996, between DenAmerica Corp. and Texas BEP, L.P.(1) 10.108 Asset Purchase Agreement effective as of July 3, 1996, among Mid-American Restaurants, Inc., Haig V. Antranikian, and DenAmerica Corp.(1) 21.2 List of Subsidiaries of DenAmerica Corp.(1) 23.2 Consent of KPMG Peat Marwick LLP(2) - ------------------- (1) Incorporated by reference to the Registrant's Current Report on Form 8-K as filed on July 18, 1996. (2) Incorporated by reference to the Registrant's Form 8-K/A Amendment No. 2 to Current Report on Form 8-K as filed on November 1, 1996. 8 9 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. November 4, 1996 DENAMERICA CORP. By: /s/ Todd S. Brown --------------------------- Todd S. Brown Vice President and Chief Financial Officer 9 -----END PRIVACY-ENHANCED MESSAGE-----