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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 29, 1999
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PRECISION AUTO CARE, INC.
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(Exact name of registrant as specified in its charter)
Virginia 1-14510 54-1847851
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(State or other jurisdiction (Commission File) (IRS Employer ID No.)
of incorporation or organization)
748 Miller Drive, S.E.
Leesburg, Virginia 20175
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 777-9095
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ITEM 5. Other Events.
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The Form 8-K filed earlier today inadvertently omitted portions of the
Registrant's press release dated September 29, 1999. A complete copy of that
press release is hereby filed on this Form 8-K/A on Exhibit 99 and incorporated
herein by reference.
ITEM 7. Financial Statements and Exhibits.
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(c) Exhibits
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99 Press Release of Precision Auto Care, Inc., dated September
29, 1999.
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SIGNATURES
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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, in Leesburg, Virginia, on September 29,
1999.
Precision Auto Care, Inc.
By: /s/ Charles L. Dunlap
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Charles L. Dunlap
President and Chief Executive
Officer
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FOR: CONTACT:
Precision Auto Care, Inc. Jerry Little x268
748 Miller Drive, SE SVP/Chief Financial Officer
Leesburg, VA 20175 (800) 438-8863
FOR IMMEDIATE RELEASE
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PRECISION AUTO CARE ANNOUNCES ANTICIPATED
4TH QUARTER AND ANNUAL RESULTS
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LEESBURG, VA - September 29, 1999, Precision Auto Care, Inc. (NASDAQ: PACI)
today announced that the Company is in the final stages of completing the audit
for its fiscal year ended June 30, 1999. The Company expects that it will report
losses before taxes of approximately $5.1 million for the quarter ended June 30,
1999 and losses before taxes of approximately $17.6 million for the fiscal year
ended on that date. These amounts compare with losses before taxes of $504,000
for the quarter ended June 30, 1998 and income before taxes of $3.0 million for
the fiscal year ended on that date. The Company's losses for the quarter ended
June 30, 1999 principally reflect charges related to the refinement of estimates
related to accounts receivable, allowances for bad debts and inventory. The
Company's annual results were also adversely impacted by costs associated with
abandoned acquisitions, severance charges and cash constraints which negatively
impacted revenues for the Company's manufacturing and distribution operations.
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The Company also stated that it was evaluating the book value of certain
assets (principally goodwill) associated with portions of the manufacturing and
distribution operations which the Company may divest or discontinue in
connection with certain restructuring activities discussed below. The Company
expects that this evaluation could result in a substantial non-cash charge to
the Company's earnings for the year ended June 30, 1999. The Company has not yet
quantified this amount and this charge will increase the losses for the quarter
and year ended June 30, 1999 as set forth above.
The Company said that it continues to experience cash flow difficulties and
that these difficulties are adversely impacting the Company's operations. The
Company's current cash flow from operations is not sufficient to enable the
Company to service current and past due operating expenses and amortize its
outstanding debt. The Company is holding discussions with its lenders for the
purpose of seeking amendments and modifications to the terms of the Company's
outstanding debt, including the terms applicable to approximately $8.5 million
in senior debt extended by the Company's principal lender. The Company's senior
debt will mature on September 30, 1999 unless the Company successfully
negotiates an extension of the September 30, 1999 maturity date. The Company
will not be able to repay its outstanding debt in a timely fashion if its
lenders do not agree to modifications acceptable to the Company.
In light of the Company's cash flow difficulties, the Company is also
pursuing
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recapitalization and strategic partnership opportunities which may include
entering into joint venture arrangements with respect to, or divesting all or a
portion of, the Company's manufacturing and distribution operations. The Company
expects that any transactions it consummates in connection with these
restructuring activities will improve the Company's cash flow. The Company
intends to continue to focus on its core auto care franchise and car wash
operations while it pursues these other transactions and opportunities.
Precision Auto Care, Inc. is the world's largest franchisor of auto care
centers, with 603 operating centers as of September 29, 1999. The Company
franchises and operates Precision Tune Auto Care, Precision Auto Wash, and
Precision Lube Express centers around the world, and offers a vertically
integrated organization with manufacturing and distribution subsidiaries.
Cautionary Statement: The statements in this press release constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
statements are subject to risks and uncertainties that could cause Precision
Auto Care Inc.'s actual results, performance or achievements to differ
materially from any future results, performance or achievements expressed or
implied by such forward-looking statements. For example, there can be no
assurance that the Company will be able to modify the terms of its outstanding
debt, obtain additional capital, or complete any divestiture, partnership or
other restructuring transactions in a timely fashion or on terms and conditions
that are acceptable to the Company. Other risks and uncertainties include, but
are not limited to, (i) the risks and uncertainties reflected and set forth in
the text of this press release, (ii) the fact that Precision Auto Care Inc. and
the companies it acquired on and subsequent to the date of its initial public
offering have only recently conducted operations as a combined company, (iii)
the seasonal nature of portions of the business, (iv) the highly competitive
markets in which Precision Auto Care Inc. operations, (v) difficulties in
Integrating all of the businesses Precision Auto Care Inc. has acquired, (vi)
risks associated with Precision Auto Care Inc.'s ability to continue its
strategy of growth through acquisitions and (vii) risks associated with
Company's ability to make or effect acquisitions in the future and to
successfully integrate newly-acquired businesses into existing operations and
the risks associated with such newly-acquired businesses. For a discussion of
such other risks and uncertainties which could cause actual results, performance
or achievements to differ from those contained in the forward-looking
statements, see "Risk Factors" in the Company's most recently filed Annual
Report on Form 10-K.
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