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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): OCTOBER 29, 1999
EXCEL LEGACY CORPORATION
(Exact name of Registrant as specified in its charter)
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DELAWARE 0-23503 33-0781747
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer Identification No.)
of Incorporation)
16955 VIA DEL CAMPO, SUITE 100
SAN DIEGO, CALIFORNIA 92127
(Address of Principal Executive Offices) (Zip Code)
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Registrant's telephone number, including area code: (858) 675-9400
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This Current Report on Form 8-K is filed by Excel Legacy Corporation, a
Delaware corporation (the "Company"), in connection with the matters described
herein.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 29, 1999, the Company closed the sale of substantially all of
the assets of Millennia Car Wash, LLC, a majority owned subsidiary of the
Company ("Millennia"), to American Wash Services, Inc. ("AWS") pursuant to a
Real Estate and Asset Purchase Agreement, dated March 23, 1999 (as amended, the
"Asset Purchase Agreement"), in consideration for 3,500,000 shares of common
stock of the parent of AWS, Mace Security International, Inc. ("Mace"), a
warrant to acquire an additional 62,500 shares of Mace common stock at an
exercise price of $4.00 per share, and the assumption by AWS of certain
liabilities of Millennia. The common stock of Mace is traded on the Nasdaq
National Market under the symbol "MACE."
Millennia is a full-service car wash company which owns or leases 19 car
wash properties in and around Phoenix, Arizona and San Antonio, Texas. In
assessing the disposition of Millennia, the Company considered, among other
factors, the consideration negotiated with AWS and Mace, the relationship of
Millennia's business to the principal focus of the Company, the competition in
the car wash market, and the location of Millennia's properties. The Company
also assessed the potential expenses associated with owning, operating and
leasing the car wash properties in the future, including, among other factors,
estimated maintenance expenses, capital improvements, expenses associated with
possible redevelopment and other operating expenses.
The foregoing description of the Asset Purchase Agreement is qualified
in its entirety by reference to the Asset Purchase Agreement and Amendment No. 1
thereto, copies of which were filed as Exhibits 10.1 and 10.2, respectively, to
the Company's Current Report on Form 8-K filed with the Commission on June 16,
1999, and are incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Pro Forma Condensed Consolidated Balance Sheet of Excel Legacy
Corporation and Subsidiaries as of September 30, 1999, and Pro Forma
Condensed Consolidated Statements of Income of Excel Legacy Corporation
and Subsidiaries for the twelve months ended December 31, 1998 and for
the nine months ended September 30, 1999.
(c) Exhibits. The following exhibits are filed as part of this report:
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10.1 Real Estate and Asset Purchase Agreement, dated March
23, 1999, by and among American Wash Services, Inc.,
Millennia Car Wash, LLC, Excel Legacy Corporation and
G II Ventures, Inc. (incorporated by reference to the
Company's Current Report on Form 8-K (File No.
0-23503) filed with the Commission on June 16, 1999).
10.2 Amendment No. 1 to Real Estate and Asset Purchase
Agreement, dated March 30, 1999, by and among
American Wash Services, Inc., Millennia Car Wash,
LLC, Excel Legacy Corporation and G II Ventures, Inc.
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(incorporated by reference to the Company's Current
Report on Form 8-K (File No. 0-23503) filed with the
Commission on June 16, 1999).
99.01 Pro Forma Condensed Consolidated Balance Sheet of
Excel Legacy Corporation and Subsidiaries as of
September 30, 1999.
99.02 Pro Forma Condensed Statements of Income of Excel
Legacy Corporation and Subsidiaries for the twelve
months ended December 31, 1998 and for the nine
months ended September 30, 1999.
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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: November 15, 1999 Excel Legacy Corporation
By: /s/ RICHARD B. MUIR
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Richard B. Muir
Executive Vice President and
Secretary
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EXHIBIT INDEX
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Exhibit
Number Description
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10.1 Real Estate and Asset Purchase Agreement, dated March 23,
1999, by and among American Wash Services, Inc., Millennia
Car Wash, LLC, Excel Legacy Corporation and G II Ventures,
Inc. (incorporated by reference to the Company's Current
Report on Form 8-K (File No. 0-23503) filed with the
Commission on June 16, 1999).
10.2 Amendment No. 1 to Real Estate and Asset Purchase Agreement,
dated March 30, 1999, by and among American Wash Services,
Inc., Millennia Car Wash, LLC, Excel Legacy Corporation and G
II Ventures, Inc. (incorporated by reference to the Company's
Current Report on Form 8-K (File No. 0-23503) filed with the
Commission on June 16, 1999).
99.01 Pro Forma Condensed Consolidated Balance Sheet of Excel
Legacy Corporation and Subsidiaries as of September 30, 1999.
99.02 Pro Forma Condensed Consolidated Statements of Income of
Excel Legacy Corporation and Subsidiaries for the twelve
months ended December 31, 1998 and for the nine months ended
September 30, 1999.
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EXHIBIT 99.01
EXCEL LEGACY CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1999
(DOLLARS IN THOUSANDS)
(UNAUDITED)
The following unaudited Pro Forma Condensed Consolidated Balance Sheet has been
presented as if the sale of Millennia assets had occurred on September 30, 1999.
The unaudited Pro Forma Condensed Consolidated Balance Sheet should be read in
conjunction with the consolidated financial statements of the Company filed in
the Annual Report on Form 10-K for the fiscal year ended July 31, 1998, as
amended, the Transition Report on Form 10-Q for the five months ended December
31, 1998, and the Quarterly Report on Form 10-Q for the quarter ended September
30, 1999. In management's opinion, all pro forma adjustments have been made that
are necessary to reflect this transaction. The unaudited Pro Forma Condensed
Balance Sheet is not necessarily indicative of what the actual financial
position would have been at September 30, 1999, does not include other
transactions occurring after September 30, 1999, nor does it purport to present
the future financial position of the Company.
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HISTORICAL PRO FORMA COMPANY
ASSETS COMPANY ADJUSTMENTS PRO FORMA
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Real estate, net $137,738 $(30,038) $107,700
Other assets 108,540 16,830 125,370
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Total assets $246,278 $(13,208) $233,070
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages and notes payable $ 75,217 $(15,108) $ 60,109
Other liabilities 2,520 - 2,520
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Total liabilities 77,737 (15,108) 62,629
Minority interest 850 - 850
Stockholders' equity 167,691 1,900 169,591
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Total liabilities and stockholders' equity $246,278 $(13,208) $233,070
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EXHIBIT 99.02
EXCEL LEGACY CORPORATION
PRO FORMA CONDENCED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998 AND THE NINE MONTHS ENDED
SEPTEMBER 30, 1999
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
The following unaudited Pro Forma Condensed Consolidated Statements of
Income have been presented as if the sale of Millennia assets had occured on
January 1, 1998. The unaudited Pro Forma Condensed Consolidated Statements of
Income should be read in conjunction with the consolidated financial statements
of the Company filed in the Annual Report on Form 10-K for the fiscal year ended
July 31, 1998, as amended, the Transition Report on Form 10-Q for the five
months ended Decmeber 31, 1998, and the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999. In management's opinion, all adjustments
necessary to reflect this transaction have been made. The unaudited Pro Forma
Condensed Consolidated Statements of Income are not necessarily indicative of
what actual results of operations of the Company would have been had this
transation actually occurred as of January 1, 1998, does not include other
transactions occuring after the periods presented, nor do they purport to
represent the results of operations of the Company for future periods.
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FOR THE TWELVE MONTHS ENDED FOR THE NINE MONTHS ENDED
DECEMBER 31, 1998 SEPTEMBER 30, 1999
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Pro Forma Company Pro Forma Company
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
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Revenue: $ 23,155 $ (7,771) $ 15,384 $ 20,859 $ (4,313) $ 16,546
Operating expenses:
Interest 4,163 (348) 3,815 5,671 (419) 5,252
Depreciation and amortization 2,975 (551) 2,424 2,715 (327) 2,388
Operating expenses 8,344 (2,452) 5,892 6,638 (2,052) 4,586
General and administrative 3,539 (4,276) (737) 4,472 (1,809) 2,663
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Total operating expenses 19,021 (7,627) 11,394 19,496 (4,607) 14,889
Net operating income: 4,134 (144) 3,990 1,363 294 1,657
Equity investment in MACE - (225) (225) - (863) (863)
Real estate sales and other items - - 0 481 - 481
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Income before income taxes 4,134 (369) 3,765 1,844 (569) 1,276
Provision for income taxes 1,678 - 1,678 823 - 1,678
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Net income 2,456 (369) 2,087 1,021 (569) (403)
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Basic net income per share $ 0.10 $ 0.08 $ 0.03 $ (0.01)
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Diluted net income per share $ 0.06 $ 0.05 $ 0.02 $ (0.01)
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Basic Weighted Average Shares Outstanding 25,205 25,205 33,458 33,458
Diluted Weighted Average Shares Outstanding 41,312 41,312 54,786 54,786
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