SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): June 23, 1999
SIGNATURE EYEWEAR, INC.
(Exact Name of Registrant as Specified in Charter)
California 0-23001 95-3876317
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
498 North Oak Street
Inglewood, California 90302
(Address of Principal Executive Offices)
(310) 330-2700
(Registrant's Telephone Number)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 23, 1999, we acquired substantially all of the assets of
California Design Studio, Inc., a California corporation ("CDS"), pursuant to an
asset purchase agreement, dated as of June 11, 1999, which we entered into with
CDS, its subsidiaries and Carlos Khantzis, the sole shareholder of CDS. The
total consideration for the assets was approximately $9.0 million, which
consists of:
o $1.1 million in cash;
o a promissory note in the principal amount of $1.25 million;
o other deferred payments of approximately $500,000; and
o the assumption of approximately $6.15 million of CDS's
liabilities.
The promissory note provides for monthly payments of $17,042, with the
entire unpaid principal balance and accrued and unpaid interest due on June 23,
2002. Of the additional deferred payments, approximately $200,000 is payable
over a period of twelve months, and $300,000 is payable in four equal quarterly
installments of $75,000, with the first payment due on September 30, 2000.
The assumed liabilities primarily consist of obligations to CDS's
principal eyeglass frame manufacturer and other trade payables. We have entered
into an agreement with the frame manufacturer to pay to it approximately $4.6
million of assumed liabilities in monthly installments over a three year period.
Of the remaining $1.55 million of assumed liabilities, we paid approximately
$600,000 at the closing of the acquisition.
At the closing, we paid the $1.1 million cash portion of the purchase
price to CDS and Carlos Khantzis and $600,000 of the assumed liabilities from
our existing cash reserves. We anticipate that we will pay the remaining
portions of the purchase price, including payments made on the note and the
assumed liabilities, from our working capital.
CDS was a designer and marketer of prescription eyeglass frames and
ready-to-wear sunglasses. The assets we acquired from CDS primarily consist of a
license to sell frames under the Nicole Miller brand name, CDS's proprietary
brand names Dakota Smith, Koko and Nukes, inventory, machinery, furniture,
equipment, accounts receivable and goodwill. CDS's consolidated revenues for the
fiscal year ended April 30, 1999 were $8.6 million, and its total assets at
April 30, 1999 were approximately $4.6 million. The acquisition will be
accounted for as a purchase.
In connection with our acquisition of CDS, we entered into a consulting
agreement with Carlos Khantzis. Until August 1, 2002, Mr. Khantzis has agreed to
advise our senior management about the operation of the business formerly
conducted by CDS and about such other business matters within Mr. Khantzis
expertise. As consideration for these services, we will pay Mr. Khantzis a
monthly fee of $16,667 during the 36-month term of the agreement.
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Attached hereto as Exhibit 99.1 is our press release, issued June 24,
1999, which is incorporated herein in its entirety by this reference.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
The financial statements of CDS required by Item 7 of Form
8-K will be filed pursuant to an amendment to this Form
8-K no later than September 6, 1999.
(b) PRO FORMA FINANCIAL INFORMATION.
The pro forma financial information required by Item 7 of
Form 8-K will be filed pursuant to an amendment to this
Form 8-K no later than September 6, 1999.
(c) EXHIBITS.
10.1 Asset Purchase Agreement, dated as of June 11,
1999, as amended by the letter agreement, dated
June 23, 1999, by and among Registrant, California
Design Studio, Inc., the other parties identified
on Exhibit A to the Asset Purchase Agreement and
Carlos Alberto Khantzis.*
23.1 Consent of Altschuler, Melvoin and Glasser LLP.*
99.1 Press Release of Registrant, issued June 23, 1999,
with respect to the acquisition of the assets of
California Design Studio, Inc.
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* To be filed pursuant to an amendment to this Form 8-K no later than September
6, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
SIGNATURE EYEWEAR, INC.
By: /S/ MICHAEL PRINCE
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Michael Prince, Chief Financial Officer
Dated: July 1, 1999
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EXHIBIT INDEX
EXHIBITS
10.1 Asset Purchase Agreement, dated as of June 11, 1999, as amended by the
letter agreement, dated June 23, 1999, by and among Registrant,
California Design Studio, Inc., the other parties identified on Exhibit
A to the Asset Purchase Agreement and Carlos Alberto Khantzis.*
23.1 Consent of Altschuler, Melvoin and Glasser LLP.*
99.1 Press Release of Registrant, issued June 23, 1999, with respect to the
acquisition of the assets of California Design Studio, Inc.
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* To be filed be filed pursuant to an amendment to this Form 8-K no later than
September 6, 1999.
SIGNATURE EYEWEAR COMPLETES ACQUISITION OF CALIFORNIA DESIGN STUDIOS
INGLEWOOD, Calif.--(BUSINESS WIRE)--June 24, 1999--Signature Eyewear
(Nasdaq/NM:SEYE - NEWS) Thursday announced that it has acquired the assets of
California Design Studios, a leading designer and marketer of prescription
eyeglass frames and ready-to-wear sunglasses.
As anticipated, the total consideration for the purchase was $9.0 million,
consisting of $1.1 million in cash, a promissory note and other deferred
payments amounting to $1.75 million, and the assumption of approximately $6.15
million of the acquired company's liabilities, which consist of obligations to
its principal frame supplier and other trade payables.
The frame supplier has agreed to accept a payment plan in the amount of $4.6
million over 36 months. The company anticipates recording approximately $4.5
million in goodwill in connection with the transaction.
"We are extremely pleased to have completed this acquisition, which brings to
Signature Eyewear exciting, new optical frame lines, including Dakota Smith,
Nicole Miller, and Nukes, which add important breadth to our existing product
portfolio," said Julie Heldman, Signature's president.
"We expect to consolidate our operations by year end and believe the acquisition
will be accretive to earnings by the second fiscal quarter next year."
Founded in 1992, California Design Studios is a privately owned company based in
Westlake Village, Calif., with 57 domestic employees. The company posted annual
revenues for the fiscal year ended April 30, 1999, of $8.6 million and total
assets of approximately $4.6 million.
Eyeglass frames in the Nicole Miller collection, influenced by this leading New
York designer's clothing and accessories lines, are vibrantly colored to target
the fashion-conscious woman.
Dakota Smith, the well-known proprietary optical brand, offers cutting-edge
unisex designs. And the Nukes sunwear collection consists exclusively of
high-styled ready-to-wear sunwear. All of the California Design Studio
collections are supported by eye-catching point-of-purchase displays.
Signature Eyewear is a leading designer and marketer of prescription eyeglass
frames under internationally recognized brand names such as: Laura Ashley
Eyewear, the premier feminine collection; Eddie Bauer Eyewear, the casual
lifestyle collection for men and women; and Hart Schaffner & Marx, the
distinctively masculine collection.
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In the spring of 2000, the company expects to release Coach Eyewear, a refined
collection for the discerning consumer, and Eddie Bauer Performance Sunwear
featuring patented Oakley performance lenses. The company further distinguishes
itself through innovative sales and merchandising programs that are unique to
the optical industry.
Signature Eyewear's products are distributed in the United States and
internationally to opticians, optometrists and ophthalmologists and sold
directly to major national retail chains. For more information about Signature
Eyewear, visit the company's Web site at WWW.SIGNATUREEYEWEAR.COM.
This news release contains certain forward-looking statements that involve risks
and uncertainties. Such statements include, but are not limited to, the
company's ability to maintain its current level of financial performance,
successfully integrate California Design Studios into the company's operations,
expand its eyewear business and launch Coach Eyewear and Eddie Bauer Performance
Sunwear. Actual results may differ materially from those indicated by such
statements as a result of various factors, including those discussed in the
company's 1998 annual report on form 10-K and other periodic reports filed with
the Securities and Exchange Commission.
CONTACT:
Signature Eyewear, Inglewood
Michael Prince, 310/330-2700
or
Framan Associates
Judie Framan, 505/897-8505
or
Pondel/Wilkinson Group
Robert M. Whetstone, 310/207-9300
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