SUPPLEMENT NO. 22
to
Prospectus Dated July 17, 1996
349,167 Shares of
PLANET HOLLYWOOD INTERNATIONAL, INC.
Class A Common Stock
($.01 par value)
This Prospectus Supplement relates to the offer and sale
from time to time by each of the stockholders listed under "Selling
Stockholders" (collectively, the "Selling Stockholders") of up to a
total of 349,167 shares of Class A Common Stock, par value $.01 per
share (the "Class A Common Stock"), of Planet Hollywood International,
Inc. (the "Company"). Such shares may be offered in amounts, at prices
and on terms to be determined at the time of sale. See "Plan of
Distribution." The Company will not receive any of the proceeds from
the sale of such shares.
This Prospectus Supplement contains financial information as
of and for the thrity-nine weeks ending September 29, 1996.
The shares of Class A Common Stock to which this Prospectus
relates may be offered and sold from time to time by the Selling
Stockholders to or through one or more brokers, dealers or agents or
directly to purchasers. See "Plan of Distribution."
---------------------------------------
The date of this Prospectus Supplement is November 21, 1996.
<PAGE>
=====================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to __________
Commission File Number 00028230
-------------------------
Planet Hollywood International, Inc.
(Exact name of registrant as specified in its charter)
Delaware 59-3283783
(State or other jurisdiction of (I.R.S.
Employer Incorporation or organization) Identification No.)
7380 Sand Lake Road, Suite 600, Orlando, Florida 32819
(Address of principal executive office, including zip code)
(407) 363-7827
(Registrant's telephone number, including area code)
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 [ ]
As of November 11, 1996, there were 95,972,565 shares of the
registrant's Common Stock outstanding.
<PAGE>
PLANET HOLLYWOOD INTERNATIONAL, INC.
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets--September 29,
1996 and December 31, 1995
Condensed Consolidated Statements of Operations--
Thirteen Weeks and Thirty-Nine Weeks ended
September 29, 1996 and October 1, 1995
Condensed Consolidated Statements of Cash Flows--
Thirty-Nine Weeks ended September 29, 1996
and October 1, 1995
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signature Page
<PAGE>
PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
Stated in thousands of U.S. Dollars
September 29, December 31,
1996 1995
------------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash
equivalents ............ $ 63,342 $ 14,923
Accounts receivable ...... 13,329 7,093
Inventories .............. 15,431 12,769
Prepaid expenses ......... 7,996 3,701
Other current assets ..... 15,781 17,369
-------- --------
Total current
assets ............. 115,879 55,855
Property and equipment,
net ............ 222,404 169,997
Investment in affiliated
entities ................ 8,683 5,574
Other assets, net .......... 28,927 8,759
-------- --------
$375,893 $240,185
======== ========
LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued liabilities .... $ 45,098 $ 39,619
Notes payable--current ... 173 708
-------- --------
Total current
liabilities ........ 45,271 40,327
Deferred rentals ........... 10,041 6,502
Notes payable and other .... 4,323 51,995
Notes payable to
shareholders ............. -- 70,750
Deferred credits ........... 19,800 17,000
-------- --------
Total liabilities .... 79,435 186,574
-------- --------
Minority interests ......... -- 10,466
-------- --------
Redeemable warrants ........ -- 15,000
-------- --------
Shareholders' equity:
Common stock--Class A .... 942 801
Common stock--Class B .... 115 --
Capital in excess of
par value .............. 252,106 7,807
Deferred compensation .... (586) (770)
Retained earnings ........ 44,228 20,727
Cumulative currency
translation adjustment . (347) (420)
-------- --------
Total shareholders'
equity ............. 296,458 28,145
-------- --------
$375,893 $240,185
======== ========
The accompanying notes are an integral part of
these financial statements.
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Stated in thousands of U.S. Dollars,
except per share amounts
Thirty-nine Weeks
Thirteen Weeks Ended Ended
-------------------- -----------------
Sept. 29, Oct. 1, Sept. 29 Oct. 1
1996 1995 1996 1995
--------- ------- -------- ------
Revenues ............. $111,840 $78,060 $274,231 $195,609
Costs and expenses:
Cost of sales ...... 27,705 22,155 70,318 55,281
Operating expenses . 44,492 32,755 114,340 81,595
General and
administrative
expenses ......... 4,555 5,861 13,846 13,789
Depreciation and
amortization ..... 6,875 5,444 20,770 15,539
Equity in
unconsolidated
affiliates ....... (1,603) (526) (3,008) (566)
-------- ------- -------- -------
82,024 65,689 216,266 165,638
Income from
operations ......... 29,816 12,371 57,965 29,971
Other expenses:
Interest, net ...... (783) 3,606 3,508 6,737
Gain on sale
of subsidiary
interests ........ -- (611) -- (611)
Minority interests . -- 1,128 1,037 2,874
-------- ------- ------- -------
Income before income
taxes .............. 30,599 8,248 53,420 20,971
Provision for income
taxes .............. 11,169 495 19,498 495
-------- ------- -------- --------
Income before
extraordinary item . 19,430 7,753 33,922 20,476
Extraordinary item,
net (A) ............ -- -- 10,421 --
-------- ------- -------- -------
Net income ........... $ 19,430 $ 7,753 $ 23,501 $ 20,476
======== ======= ======== ========
Earnings per share:
Income before
extraordinary
item ............. $ 0.18 $ 0.09 $ 0.34 $ 0.24
======== ======= ======== ========
Net income ......... $ 0.18 $ 0.09 $ 0.23 $ 0.24
======== ======= ======== ========
Weighted average
shares outstanding . 110,317 86,814 100,625 86,814
======== ======= ======== ========
Supplemental pro forma
earnings per share:
Earnings per share
before extra-
ordinary item .... $ 0.35
========
Earnings per share--
net income ....... $ 0.25
========
Weighted average
shares outstanding . 104,460
========
The accompanying notes are an integral part
of these financial statements.
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Stated in thousands of U.S. Dollars
Thirty-nine Weeks Ended
----------- -----------
Sept. 29, Oct. 1,
1996 1995
--------- -------
Net Cash provided by Operating
Activities ................... $ 47,878 $ 26,555
Cash flows from investing
activities:
Additions to property and
equipment .................. (56,647) (59,914)
Proceeds from sale of
transportation equipment ... -- 6,450
Investment in affiliated
entities ................... -- (2,973)
Proceeds from sale of
subsidiary interest ........ -- 900
Other ........................ (417) (182)
-------- ---------
Net Cash Used in Investing
Activities ................... (57,064) (55,719)
-------- ---------
Cash flows from financing
activities:
Change in restricted cash
and investments ............ 610 (4,436)
Proceeds from issuance of
senior subordinated notes .. -- 60,000
Distributions to minority
interests .................. (271) (1,950)
Deferred financing costs ..... -- (3,750)
Proceeds from issuance of
common stock ............... 196,581 --
IPO costs and financing
costs capitalized .......... (3,810) --
Proceeds from notes and
advances from shareholders . 639 20,000
Proceeds from issuance of
notes ...................... -- 839
Repayment of shareholder
notes payable .............. (70,750) (15,611)
Repayment of notes payable ... (65,394) (8,944)
-------- --------
Net Cash Provided by Financing
Activities ................... 57,605 46,148
-------- --------
Net Increase in Cash and
Cash Equivalents ............. 48,419 16,984
Cash and Cash Equivalents at
Beginning of Period .......... 14,923 5,024
-------- --------
Cash and Cash Equivalents at
End of Period ................ $ 63,342 $ 22,008
======== ========
The accompanying notes are an integral part
of these financial statements.
<PAGE>
PLANET HOLLYWOOD INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements of Planet Hollywood International, Inc. have been prepared
by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission.
The information furnished herein reflects all adjustments
(consisting of only normal recurring accruals and adjustments) which
are, in the opinion of management, necessary to fairly state the
operating results for the respective periods. Certain information and
footnote disclosures normally included in annual financial statements
prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations. The notes to
the condensed consolidated financial statements should be read in
conjunction with the notes to the consolidated financial statements
contained in the April 18, 1996 Form S-1. Company management believes
that the disclosures are sufficient for interim financial reporting
purposes.
2. Stock Offering and Extraordinary Charge
In April 1996, the Company completed an initial public
offering of 12,406,452 shares of common stock at an offering price of
$18.00 per share, including 1,618,233 shares from the exercise of the
Underwriters' over allotment option. The Company received net proceeds
of approximately $196.6 million after the payment of approximately
$12.5 million in related underwriting discount and offering costs.
The Company incurred a one-time extraordinary charge of
$10.4 million, net of $5.9 million in taxes, as a result of the early
extinguishment of the Senior Subordinated Notes.
3. Earnings Per Share
Earnings per share is based on the weighted average number
of shares outstanding during the period increased by common equivalent
shares (stock options) determined using the treasury stock method.
Supplement pro forma earnings per share gives effect to the
repayment of certain indebtedness by application of a portion of the
net proceeds from the initial public offering, as if the prepayment
had occurred at the beginning of the fiscal year.
4. Acquisitions
The Company acquired the remaining minority interests in All
Star Cafe, Inc. and PH London and the minority interests in the
Company's subsidiaries that operate Planet Hollywood units in Maui,
Washington D.C. and New York. These acquisitions were accounted for
using the purchase method of accounting.
The following unaudited pro forma information has been
prepared assuming that these acquisitions took place at the beginning
of fiscal 1996. The unaudited pro forma financial information does not
purport to be
<PAGE>
PLANET HOLLYWOOD INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
indicative of the results of operations had the transaction been
effected on the assumed dates, nor to project results for any future
period:
Thirteen Weeks Thirty-nine Weeks
Ended Ended
September 29, September 29,
1996 1996
-------------- -----------------
(dollars in thousands,
except per share amounts)
Revenues ................ $111,840 $274,231
Income before
extraordinary item .... 19,430 34,342
Net income .............. 19,430 23,921
Earnings per share
before extraordinary
item .................. $ 0.18 $ 0.32
Earnings per share--
net income ............ $ 0.18 $ 0.22
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Three months ended September 29, 1996 compared to three months
ended October 1, 1995
Revenues. Total revenues increased 43.3% from $78.0 million for
the three months ended October 1, 1995 to $111.8 million for the three
months ended September 29, 1996.
Direct revenues increased 32.5% from $77.6 million for the three
months ended October 1, 1995 to $102.8 million for the three months
ended September 29, 1996, due primarily to the opening of nine
Company-owned units after the third quarter of fiscal 1995 with two
units opening in the three months ended September 29, 1996. Direct
revenues on a same unit basis (14 units) increased 1.4% from $54.0
million for the three months ended October 1, 1995 to $54.7 million
for the three months ended September 29, 1996. As a percentage of
Direct Revenues, merchandise sales for all Company-owned units
decreased from 39.5% for the three months ended October 1, 1995 to
37.9% for the three months ended September 29, 1996, due primarily to
the European expansion since the third quarter of 1995. Franchise fees
were zero for the three months ended October 1, 1995 and $7.7 million
for the period ending September 29, 1996. Royalties increased from
$0.5 million for the three months ended October 1, 1995 to $1.4
million for the three months ended September 29, 1996, due primarily
to the opening of the Official All Star Cafe in Cancun in the first
quarter of 1996 and the opening of eight franchised Planet Hollywood
units after the third quarter of fiscal 1995.
Costs and expenses. Food and beverage costs decreased from 23.7%
of food and beverage revenues for the three months ended October 1,
1995 to 22.8% for the three months ended September 29, 1996, primarily
as a result of improved buying power and efficiencies from the greater
unit base, allowing for favorable negotiations with suppliers.
Merchandise costs decreased from 35.9% of merchandise revenues for the
three months ended October 1, 1995 to 33.7% for the three months ended
October 1, 1996, primarily as a result of improved buying power and
favorable negotiation with suppliers. Operating expenses, which
consist primarily of labor, occupancy and other direct unit operating
costs, increased from 42.2% of Direct Revenues for the three months
ended October 1, 1995 to 43.3% for the three months ended September
29, 1996, primarily due to the effect of the opening of Company-owned
units in Europe, which generally have higher operating costs, since
the third quarter of 1995.
General and administrative expenses decreased from $5.9 million
for the three months ended October 1, 1995 to $4.6 million for the
three months ended September 29, 1996, due primarily to substantial
legal fees in connection with a lawsuit settled in the third quarter
of 1995. As a percent of total revenues, general and administrative
expenses decreased from 7.5% for the three months ended October 1,
1995 to 4.1% for the three months ended September 29, 1996, as a
result of the larger number of units in operation during the third
quarter of fiscal 1996. Depreciation and amortization increased 26.3%
from $5.4 million for the three months ended October 1, 1995 to $6.9
million for the three months ended September 29, 1996, due primarily
to the larger number of units in operation during the third quarter of
fiscal 1996. As a percent of total revenues, depreciation and
amortization costs were 7.0% for the three months ended October 1,
1995 and 6.1% for the three months ended September 29, 1996. Equity in
income of unconsolidated affiliates increased from $0.5 million for
the three months ended October 1, 1995 to $1.6 million for the three
months ended September 29, 1996, which was attributable to various
unit openings by the Company's minority investments in ECE and PH Asia.
Interest, net. Net interest decreased from $3.6 million of net
interest expense for the three months ended October 1, 1995 to net
interest income of $0.8 million for the three months ended September
29, 1996. As a result of repayment of Company debt in the second
quarter of 1996 with the proceeds from the IPO, the Company realized
net interest income by investing the excess cash on hand.
Other. Minority interests decreased from $1.1 million for the
three months ended October 1, 1995 to zero for the three months ended
September 29, 1996, due to the acquisition by the Company of all
minority interests in the second quarter of 1996. In the third quarter
of 1995, the Company realized a $0.6 million gain on the sale of a
portion of its interest in the entity that owned the Washington D.C.
Planet Hollywood unit.
<PAGE>
Provision for Income Taxes. The provision for income taxes was
$11.2 million for the three months ended September 29, 1996. For the
three months ended October 1, 1995, the Company recorded a provision
for income taxes of only $0.5 million due to a reversal of a portion
of the Company's deferred tax valuation allowance.
Nine months ended September 29, 1996 compared to nine months
ended October 1, 1995
Revenues. Total revenues increased 40.2% from $195.6 million for
the nine months ended October 1, 1995 to $274.2 million for the nine
months ended September 29, 1996.
Direct revenues increased 34.9% from $192.8 million for the nine
months ended October 1, 1995 to $260.1 million for the nine months
ended September 29, 1996, due primarily to the opening of nine
Company-owned units after the third quarter of fiscal 1995, which was
partially offset by the sale of the Planet Hollywood unit in Cancun in
fiscal 1995. Direct revenues on a same unit basis (9 units) decreased
2.8% from $79.0 million for the nine months ended October 1, 1995 to
$76.7 million for the nine months ended September 29, 1996. As a
percentage of Direct Revenues, merchandise sales for all Company-owned
units decreased from 39.7% for the nine months ended October 1, 1995
to 37.3% for the nine months ended September 29, 1996. Franchise fees
were $10.7 million for the nine months ended September 29, 1996, as
compared to $2.0 million in 1995. Royalties increased from $0.8
million for the nine months ended October 1, 1995 to $3.5 million for
the nine months ended September 29, 1996, due primarily to the opening
of the Official All Star Cafe in Cancun in the first quarter of 1996,
the opening of eight franchised Planet Hollywood units after the third
quarter of fiscal 1995 and the sale of the Planet Hollywood unit in
Cancun to a franchisee in fiscal 1995.
Costs and expenses. Food and beverage costs decreased from 23.9%
of food and beverage revenues for the nine months ended October 1,
1995 to 22.7% for the nine months ended September 29, 1996, primarily
as a result of improved buying power and efficiencies from the greater
unit base, allowing for favorable negotiations with suppliers.
Merchandise costs decreased from 35.9% of merchandise revenues for the
nine months ended October 1, 1995 to 34.3% for the nine months ended
September 29, 1996, primarily as a result of improved buying power and
favorable negotiation with suppliers. Operating expenses, which
consist primarily of labor, occupancy and other direct unit operating
costs, increased from 42.3% of Direct Revenues for the nine months
ended October 1, 1995 to 44.0% for the nine months ended September 29,
1996, primarily due to the effect of the opening of Company-owned
units in Europe, which generally have higher operating costs, since
the third quarter of 1995 and the lower operating costs of the Planet
Hollywood unit in Cancun included in the first and second quarters of
1995.
General and administrative expenses remained flat at $13.8
million for the nine months ended October 1, 1995 and for the nine
months ended September 29, 1996, due primarily to cost-cutting
efforts. As a percent of total revenues, general and administrative
expenses decreased from 7.0% for the nine months ended October 1, 1995
to 5.0% for the nine months ended September 29, 1996, as a result of
the larger number of units in operation during the nine months ended
September 29, 1996. Depreciation and amortization increased 33.7% from
$15.5 million for the nine months ended October 1, 1995 to $20.8
million for the nine months ended September 29, 1996, due primarily to
the larger number of units in operation during the nine months ended
September 29, 1996. As a percent of total revenues, depreciation and
amortization costs were 7.9% for the nine months ended October 1, 1995
and were 7.6% for the nine months ended September 29, 1996. Equity in
income of unconsolidated affiliates increased from $0.6 million for
the nine months ended October 1, 1995 to $3.0 million for the nine
months ended September 29, 1996, which was attributable to the various
unit openings by the Company's minority investments in ECE and PH
Asia.
Interest expense, net. Net interest expense decreased from $6.7
million for the nine months ended October 1, 1995 to $3.5 million for
the nine months ended September 29, 1996, as a result of repayment of
Company debt in the second quarter of 1996 with the proceeds from the
IPO.
Other. Minority interests decreased from $2.9 million for the
nine months ended October 1, 1995 to $1.0 million for the nine months
ended September 29, 1996, due to the acquisition by the Company of all
minority interests in the second quarter of 1996. In the third quarter
of 1995, the Company realized a $0.6
<PAGE>
million gain on the sale of a portion of its interest in the entity
that owned the Washington D.C. Planet Hollywood unit.
Provision for Income Taxes. The provision for income taxes was
$19.5 million for the nine months ended September 29, 1996. For the
nine months ended October 1, 1995, the Company recorded a provision
for income taxes of only $0.5 million due to a reversal of a portion
of the Company's deferred tax valuation allowance.
Extraordinary item, net. The Company incurred an extraordinary
charge in the second quarter of 1996 of $10.4 million, net of $5.9
million in taxes, as a result of the early extinguishment of long-term
notes payable.
Liquidity and Capital Resources
During the quarter ended June 30, 1996, the Company completed an
initial public offering and received approximately $197.0 million in
net proceeds. The Company used a portion of these proceeds to pay
certain indebtedness of approximately $66.0 million of notes payable
to an affiliate of a director of the Company, $60.0 million of Senior
Subordinated Notes held by institutional investors and notes payable
totaling $4.5 million to the President and Chairman of the Company.
The remaining of such net proceeds will be used for general corporate
purposes, including the development and construction of new units
during 1996.
<PAGE>
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits:
Exhibit 27 Financial Date Schedule (FOR SEC USE ONLY)
(B) Reports on Form 8-K
No Report on For 8-K was filed during the period
covered by this report
<PAGE>
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.
PLANET HOLLYWOOD
INTERNATIONAL, INC. (Registrant)
By: /s/ ROBERT EARL
------------------------------
Robert Earl
President and Chief
Executive Officer
Date: November 12, 1996
By: /s/ THOMAS AVALLONE
------------------------------
Thomas Avallone
Chief Financial Officer
Date: November 12, 1996
