UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
JANUARY 14, 1999
Date of Report (Date of earliest event reported)
PLANET HOLLYWOOD INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 00028230 59-3283783
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification Number)
8669 COMMODITY CIRCLE
ORLANDO, FLORIDA 32819
(Address of principal executive office, including zip code)
(407) 363-7827
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
On January 14, 1999, Planet Hollywood International, Inc. (the
"Company") announced plans for a fresh look, new menu and more fashion-oriented
merchandise for its theme restaurants. Other items discussed in the Company's
announcement included (a) the Company expects 1999 to be a turnaround year (b)
the Company currently projects returning to profitability in 2000, (c) steps to
revitalize the Planet Hollywood concept, (d) steps to reduce costs and improve
profitability, and (e) an expected fourth quarter charge and outlook. A copy of
the Company's press release relating to the foregoing is attached hereto as
Exhibit 99.1, and is incorporated by reference.
ITEM 7. EXHIBITS.
99.1 Press Release by Planet Hollywood International Inc., dated
January 14, 1999.
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 hereunto duly authorized.
Date: January 18, 1999 PLANET HOLLYWOOD
INTERNATIONAL, INC.
/s/ THOMAS AVALLONE
-------------------------------------
Name: Thomas Avallone
Title: Executive Vice President and
Chief Financial Officer
2
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
99.1 Press Release by Planet Hollywood International Inc., dated January 14,
1999.
EXHIBIT 99.1
NEWS RELEASE [PLANET HOLLYWOOD LOGO]
Contact: William H. Baumhauer Thomas Avallone
President/Chief Operating Officer EVP, Chief Financial Officer
(407) 903-5781 (407) 352-6886
FOR IMMEDIATE RELEASE
PLANET HOLLYWOOD PLANS FRESH LOOK, NEW MENU AND MORE FASHION-
ORIENTED MERCHANDISE FOR ITS THEME RESTAURANTS
-- Company Says 1999 Will Be a Turnaround Year;
Projects Return to Profitability in 2000 --
ORLANDO, FLA., JANUARY 14, 1999 --- Planet Hollywood International, Inc. (NYSE:
PHL) announced today a series of measures to rebuild consumer excitement and
boost sales and profitability of its theme restaurant chain.
According to William H. Baumhauer, President and Chief Operating Officer, "We've
completed an analysis of what our customers expect from us, and in 1999 we will
implement a major overhaul of our Planet Hollywood restaurants with a fresh
look, new menu, and more fashion-oriented merchandise. Our goal is to rebuild
consumer excitement in our brand," said Mr. Baumhauer. "And this program is
intended to achieve that objective."
The cornerstone of the Company's strategy is to refocus on its core Planet
Hollywood operations, which offer the greatest potential to increase
profitability and build value for shareholders. As a result, the Company will
explore various alternatives to franchise, sell or discontinue several other of
its business initiatives.
"We believe that if we implement our business program successfully in 1999, we
can resume profitability in the year 2000," said Mr. Baumhauer. "In particular,
we will be focusing on increasing top-line sales, reducing general and
administrative expenses and exiting initiatives that are no longer consistent
with our strategy to build shareholder value."
<PAGE>
2
STEPS TO REVITALIZE THE PLANET HOLLYWOOD CONCEPT
In order to revitalize and inject new excitement into the Planet Hollywood
brand, the Company is moving forward with a series of consumer-oriented
initiatives. Highlights of these steps include:
/bullet/ Introducing a new menu featuring quality food at lower prices. Mr.
Baumhauer noted, "A key objective of our strategy is to increase our
repeat business, by encouraging customers to eat at our restaurants
more often. Offering quality food at lower prices will help us achieve
that goal."
/bullet/ Updating the look of Planet Hollywood restaurants. The Company has
embarked upon a plan to relaunch its Planet Hollywood concept,
including a $10-$12 million refurbishment program to make the look of
its restaurants more contemporary and to expand the merchandise shops
to better display products to customers. Approximately 50% of the
Planet Hollywood restaurants will be refurbished by the end of the
second quarter of 1999.
/bullet/ Launching a new merchandising strategy. The Company plans to offer
customers more fashion-oriented merchandise, through the introduction
of seasonal lines beginning this Spring. As part of this program, the
Company has hired an outside design consultant and has signed an
agreement with Fruit of the Loom, under which Fruit of the Loom will
manufacture and supply the Company's restaurants with a full line of
merchandise.
/bullet/ Initiating a new marketing and public relations strategy, aimed at
delivering a fresh, exciting and consistent message to consumers. "The
very nature of our theme -- the world of movies -- provides us with a
mechanism for continually updating and reinventing our restaurants,"
said Mr. Baumhauer. "Going forward, a key priority, in addition to
providing quality food, will be to keep our 'Hollywood experience'
fresh, to give customers exciting reasons to return to our
restaurants."
"Clearly, the intent of our plan is a return to basics. Planet Hollywood is a
very powerful brand that needs to be refreshed, refocused and relaunched for
today's customer -- and we intend to do just that in 1999," said Mr. Baumhauer.
<PAGE>
3
STEPS TO REDUCE COSTS, IMPROVE PROFITABILITY
In addition to its plans to revitalize the Planet Hollywood brand, the Company
is taking actions to significantly lower its operating costs. Among other
things, these steps include:
/bullet/ Reducing corporate overhead by approximately 35%, which was completed
in December 1998;
/bullet/ Streamlining the Company's store-level operations;
/bullet/ Putting in place cost control systems to better monitor spending;
/bullet/ Outsourcing non-core operating functions, including the manufacture and
distribution of merchandise by Fruit of the Loom;
/bullet/ Franchising certain Planet Hollywood restaurants outside of the United
States;
/bullet/ Disposing of non-essential corporate assets;
/bullet/ Recapitalizing the Company's balance sheet;
/bullet/ Effectively managing required capital expenditures for 1999.
"Our objective is to lower general and administrative expenses to approximately
8% of sales, versus a current rate of approximately 17%. We believe this is an
achievable target, and we have taken the necessary steps to meet this goal,"
said Mr. Baumhauer.
FOURTH QUARTER CHARGE, OUTLOOK
Based on the decisions and plans announced today, the Company expects to record
a pre-tax charge of $130-$160 million in the fourth quarter of fiscal 1998,
primarily related to asset writedowns.
Excluding the charge, the Company expects to report negative EBITDA of $10-$15
million for the fourth quarter. Total sales for the fourth quarter are expected
to be approximately $75 million, while comparable stores sales for the quarter
declined by approximately 19%.
<PAGE>
4
For the full year 1998, excluding the charge, the Company expects to report
EBITDA of $14-$19 million and total sales of $365 million. Comparable store
sales for the year declined by approximately 18%.
Based on preliminary estimates and the successful implementation of its new
strategy, the Company anticipates sales of $400 million and EBITDA of $25-$30
million for the 1999 year. These estimates assume a comparable store sales
decline of 5% for 1999 and capital expenditures of $40-$45 million.
Planet Hollywood is a creator and worldwide developer of consumer brands that
capitalize on the universal appeal of movies, sports, music and other
leisure-time activities. The Company's worldwide operations offer products and
services in the retail, leisure, entertainment and lodging sectors. Planet
Hollywood's Class A common stock is listed on the symbol "PHL" on the New York
Stock Exchange.
CERTAIN STATEMENTS CONTAINED HEREIN ARE FORWARD-LOOKING STATEMENTS WHICH INVOLVE
KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES WHICH MAY CAUSE THE COMPANY'S ACTUAL
RESULTS TO DIFFER MATERIALLY FROM WHAT IS CURRENTLY ANTICIPATED. SUCH STATEMENTS
ARE MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 AND INCLUDE, WITHOUT LIMITATION, THE COMPANY'S
EXPECTATIONS AND ESTIMATES AS TO THE INTRODUCTION OF NEW PRODUCTS AND
MERCHANDISE, FUTURE FINANCIAL PERFORMANCE, FINAL FIGURES FOR PAST FINANCIAL
PERFORMANCE, THE POSSIBILITY OF A NON-RECURRING CHARGE, IMPROVED RESULTS BECAUSE
OF NEW STRATEGIES, THE POSSIBILITY OF GAINS OR LOSSES FROM DISPOSITIONS OF
ASSETS OR FACILITIES, AND ANTICIPATED CAPITAL EXPENDITURES. READERS SHOULD
CONSIDER STATEMENTS WHICH USE THE TERMS "BELIEVES," "EXPECTED," "EXPECTS,"
"PLANS," "INTENDS," "ESTIMATES," "ANTICIPATED," OR "ANTICIPATES" TO BE UNCERTAIN
AND FORWARD-LOOKING. SUCH STATEMENTS REFLECT THE CURRENT VIEWS OF THE COMPANY
WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS, UNCERTAINTIES AND
ASSUMPTIONS. IN ADDITION TO FACTORS DESCRIBED IN THE COMPANY'S SEC FILINGS, THE
FOLLOWING FACTORS, AMONG OTHERS, COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS MADE BY
THE COMPANY: (I) DIFFICULTIES OR DELAYS IN DEVELOPING AND INTRODUCING NEW
PRODUCTS AND MERCHANDISE OR THE FAILURE OF CUSTOMERS TO ACCEPT NEW PRODUCT
OFFERINGS; (II) CHANGES IN CONSUMER PREFERENCES, INCLUDING REDUCED CONSUMER
DEMAND FOR THE COMPANY'S PRODUCTS AND BRAND; (III) DIFFICULTIES OR DELAYS IN THE
COMPANY'S IMPLEMENTATION OF INITIATIVES AND STRATEGIES, INCLUDING THE
INTRODUCTION OF A NEW MENU; (IV) UNANTICIPATED COSTS OR DIFFICULTIES OR DELAYS
IN COMPLETING PROJECTS ASSOCIATED WITH THE COMPANY'S NEW MERCHANDISING AND
MARKETING STRATEGIES; (V) EFFECTS AND CHANGES IN ECONOMIC CONDITIONS, INCLUDING
INFLATION AND MONETARY CONDITIONS, AND IN TRADE, MONETARY, FISCAL AND TAX
POLICIES IN COUNTRIES AND REGIONS OUTSIDE OF THE U.S. IN WHICH THE COMPANY
OPERATES, INCLUDING ASIA; (VI) ACTIONS TAKEN BY COMPETITORS, INCLUDING BUSINESS
COMBINATIONS, NEW PRODUCT OFFERINGS AND MARKETING AND PROMOTIONS SUCCESSES;
(VII) DIFFICULTIES OR DELAYS IN REALIZING IMPROVED RESULTS FROM OPERATING
CONSOLIDATIONS OR THE SALE OF CERTAIN FACILITIES OR ASSETS HELD FOR SALE OR
FRANCHISE; AND (VIII) SUCCESS OF THE COMPANY'S FRANCHISEES AND LICENSEES AND THE
MANNER IN WHICH THEY PROMOTE, OPERATE OR DEVELOP THE COMPANY'S BRANDS. THE
COMPANY ASSUMES NO RESPONSIBILITY TO UPDATE FORWARD-LOOKING INFORMATION
CONTAINED HEREIN.
# # #
