<PAGE>
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
Date of Report (Date of earliest event reported): June 1, 1999
Favorite Brands International, Inc.
and the Guarantors identified in Footnote (1) below
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 333-67221 75-2608980
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification No.)
2121 Waukegan Road, Bannockburn, Illinois 60015
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
1) The following domestic direct subsidiaries of Favorite Brands International,
Inc. are Guarantors of the Company's Senior Notes and are Co-Registrants, each
of which is incorporated in the jurisdiction and has the I.R.S. Employer
Identification Number indicated: Trolli Inc., a Delaware corporation (52-
1716800) and Sather Trucking Corp., a Delaware corporation (41-1849044).
Registrant's telephone number, including area code: (847) 405-5800
Item 5. Other Events
On March 30, 1999 Favorite Brands International, Inc. (the "Company") filed in
the United States Bankruptcy Court (the "Court") for the District of Delaware
voluntary petitions for relief under Chapter 11 of Title 11 of the United States
Code, case number 99-726 (PJW).
The Company did not file its report on Form 10-Q for the quarter ended March 27,
1999, as it has a No-Action letter pending with the Securities and Exchange
Commission (the "Commission") seeking relief from Form 10-Q and Form 10-K
filings as required by the Securities Exchange Act of 1934, as amended. The
Company's request was filed with the Commission on April 26, 1999 and as of June
15, 1999, the Company has not received a response regarding the No-Action letter
filed.
In lieu of filing Forms 10-Q and Forms 10-K, the Company is proposing to file
under cover of a Form 8-K, copies of monthly operating reports filed with the
United States Trustee's office and the United States Bankruptcy Court for the
District of Delaware within fifteen days after such filing. The Company filed
its April monthly operating report with the United States Trustee's office on
June 1, 1999.
<PAGE>
Accordingly, the Company is filing the financial information that was filed with
the United States Trustee's office for its April 1999 fiscal period on this Form
8-K.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired. Not applicable.
(b) Pro Forma Financial Information. Not applicable.
(c) Exhibits.
99.2 Monthly Operating Report
SIGNATURE
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.
Favorite Brands International, Inc.
Dated: June 15, 1999 By: /s/ Steven F. Kaplan
--------------------------------------------------
President, Chief Operating Officer and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
- --------------------------------------------------------------------------------
99.2 Monthly Operating Report
<PAGE>
TRANSMITTAL OF FINANCIAL REPORTS AND
CERTIFICATION OF COMPLIANCE WITH
UNITED STATES TRUSTEE OPERATING REQUIREMENTS
FOR THE PERIOD ENDED APRIL 27, 1999
Debtors: Favorite Brands International Holding Corp., Favorite Brands
International, Inc., Trolli Inc., and Sather Trucking Corporation (the
"Debtors")
Case Numbers: 99-726 (PJW) through 99-729 (PJW)
As President of the Debtors, I affirm to the best of my knowledge, information
and belief:
1) That I have reviewed the financial statements attached hereto, consisting
of:
[X] Consolidated Statement of Operations
[X] Consolidated Balance Sheet
[X] Consolidated Statement of Cash Flows
[X] Statement of Cash Receipts and Disbursements
[X] Accounts Receivable and Postpetition Accounts Payable Aging Statements
[X] Statement of Payments to Professionals
and that they have been prepared in accordance with normal and customary
accounting practices, and fairly and accurately reflect the debtors financial
activity for the period stated.
2) That the insurance as described in Section 3 of the Operating Instructions
and Reporting Requirements for Chapter 11 cases are current and have been
paid in the normal course of business.
3) That all postpetition taxes as described in Section 4 of the Operating
Instructions and Reporting Requirements for Chapter 11 cases are current
and have been paid in the normal course of business.
4) That no payments have been made to officers and directors of the Debtors
except as authorized pursuant to orders of the Bankruptcy Court including
the Order Under 11 U.S.C. (S)(S)105, 363 and 365 Authorizing (A)
Implementation of Key Employee Retention Program, (B) Implementation of
Severance Program, (C) Modification of Retirement Plans, (D) Assumption of
or Entry Into Certain Employment Agreements With Key Executives, and (E)
Granting Other Relief (approved on April 30, 1999).
5) That no professional fees (attorney, accountant, etc.) have been paid
except as provided in the (1) Order Authorizing Retention of Professionals
by Debtors in the Ordinary Course of Business (entered on March 31, 1999)
or (2) Administrative Order 11 U.S.C. (S)(S)105(a) and 331 Establishing
Procedures for Interim Compensation and Reimbursement of Expenses of
Professionals (entered on March 31, 1999).
The attached monthly report was prepared by the Debtors under my direction and
supervision. The Debtors verify that to the best of its knowledge, the
information provided herein is true and correct.
Dated: 6/1/99 /s/ Steven F. Kaplan
- ---------------- -------------------------
Debtors in Possession
Steven F. Kaplan
President, Chief Operating Officer, & Chief Financial
Officer
(847) 405-5800
<PAGE>
FAVORITE BRANDS INTERNATIONAL, INC.
AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of Favorite Brands International Holding Corp.)
(Debtor-In-Possession)
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
April 24,
ASSETS 1999
------ ----------
(Unaudited)
<S> <C>
Current Assets:
Cash and cash equivalents ................................................... $ 31,826
Accounts receivable, less allowance of $16,900 .............................. 49,258
Inventories ................................................................. 68,973
Deferred income taxes ....................................................... 15,343
Prepaid expenses and other current assets ................................... 6,464
----------
Total current assets ................................................. 171,864
----------
Property, Plant and Equipment, at Cost:
Land ........................................................................ 5,200
Buildings ................................................................... 67,606
Machinery and equipment ..................................................... 201,021
Construction in progress .................................................... 50,836
----------
324,663
Less accumulated depreciation ............................................... 71,990
----------
252,673
----------
Other Assets:
Intangible assets, net ...................................................... 337,002
Prepaid expenses and other assets ........................................... 1,564
Deferred income taxes ....................................................... 48,024
----------
386,590
----------
$ 811,127
==========
</TABLE>
<PAGE>
FAVORITE BRANDS INTERNATIONAL, INC.
AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of Favorite Brands International Holding Corp.)
(Debtor-in-Possession)
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
April 24,
LIABILITIES AND STOCKHOLDER'S EQUITY 1999
------------------------------------ ----------
(Unaudited)
<S> <C>
Current Liabilities:
Accounts payable and accrued liabilities .................. $ 69,587
Current portion of long-term debt ......................... -
Other current liabilities ................................. 1,598
---------
Total current liabilities ............................ 71,185
---------
Noncurrent Liabilities:
Long-term debt............................................. -
Other long-term liabilities ............................... 1,556
---------
Total noncurrent liabilities ......................... 1,556
---------
Prepetition Secured Debt ....................................... 200,500
Liabilities subject to compromise .............................. 466,061
Commitments and Contingencies .................................. -
Stockholder's Equity:
Common Stock, $.01 par value; 1,000 shares authorized,
issued and outstanding ............................... -
Additional paid-in capital ................................ 195,751
Accumulated deficit ....................................... (123,926)
---------
Total stockholder's equity ........................... 71,825
---------
$ 811,127
---------
</TABLE>
<PAGE>
FAVORITE BRANDS INTERNATIONAL, INC.
AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of Favorite Brands International Holding Corp.)
(Debtor-in-Possession)
CONSOLIDATED STATEMENT
OF OPERATIONS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Four
Weeks Ended
-----------
April 24,
1999
-----------
(Unaudited)
<S> <C>
Net sales ................................................................. $ 51,647
Costs and expenses:
Cost of sales ................................................... 32,121
Selling, marketing and administrative ........................... 19,780
Amortization of intangible assets ............................... 1,437
Restructuring and business integration costs .................... (469)
-----------
52,869
Loss from operations ...................................................... (1,222)
Interest expense ................................................ 2,312
Reorganization charges under Chapter 11 ......................... 1,375
-----------
Loss before income taxes, extraordinary charge and cumulative
effect of change in accounting principle ........................ (4,909)
Benefit for income taxes ........................................ 0
-----------
Loss before extraordinary charge and cumulative effect of change in
accounting principle ............................................ (4,909)
Extraordinary charge - early debt extinguishment,
net of income tax benefit .................................. --
Cumulative effect of change in accounting principle,
net of income tax benefit .................................. --
-----------
Net loss .................................................................. $ (4,909)
===========
Reconciliation to EBITDA:
Net loss ........................................................ $ (4,909)
Interest expense ........................................... 2,312
-----------
EBIT ............................................................ (2,597)
Depreciation ............................................... 2,257
Amortization ............................................... 1,437
-----------
Reported EBITDA ................................................. 1,097
Reorganization charges under Chapter 11 .................... 1,375
Restructuring and business integration costs ............... (469)
-----------
Adjusted EBITDA ................................................. $ 2,003
===========
</TABLE>
<PAGE>
FAVORITE BRANDS INTERNATIONAL, INC.
AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of Favorite Brands International Holding Corp.)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars In Thousands)
<TABLE>
<CAPTION> Four Weeks Ended
April 24, 1999
----------------
(Unaudited)
<S> <C>
Cash Flows from Operating Activities:
Net loss....................................................................... $ (4,909)
Adjustments:
Depreciation and amortization........................................... 3,694
Gain on disposition of property, plant & equipment...................... (106)
Deferred income taxes................................................... 1,300
Changes in operating assets and liabilities:
Accounts receivable............................................... 9,993
Inventories....................................................... 2,817
Prepaid expenses and other assets................................. (2,640)
Accounts payable, accrued liabilities and
liabilities subject to compromise................................ 15,835
Income taxes payable.............................................. -
Other liabilities................................................. (398)
------------
Net cash provided by operating activities...................... 25,586
------------
Cash Flows from Investing Activities:
Purchase of confections businesses, net of cash
acquired..................................................................... -
Proceeds on the sale of assets................................................. -
Capital expenditures........................................................... (2,693)
------------
Net cash used in investing activities.......................... (2,693)
------------
Cash Flows from Financing Activities:
Net borrowings on revolving credit loans....................................... -
Proceeds from loans............................................................ -
Repayments of term loan........................................................ (500)
Payments for debt issuance costs............................................... (758)
Repayment of other long-term debt.............................................. -
Proceeds from capital contributions............................................ -
------------
Net cash used in financing activities.......................... (1,258)
------------
Increase in cash and cash equivalents................................................ 21,635
Cash and cash equivalents, beginning of period....................................... 10,191
------------
Cash and cash equivalents, end of period............................................. $ 31,826
============
Supplemental Cash Flow Information:
Income taxes paid.............................................................. $ -
============
Interest paid.................................................................. $ 1,348
============
</TABLE>
<PAGE>
FAVORITE BRANDS INTERNATIONAL HOLDING CORP.
Statement of Cash Disbursements
For the Period
(Thousands of Dollars)
Debtors: Favorite Brands International Holding Corp., Favorite Brands
International, Inc., Trolli Inc., and Sather Trucking Corporation
(the "Debtors")
Case Numbers: 99-726PJW through 99-729PJW
DISBURSEMENTS DURING PERIOD
(deconsolidated and excluding intradebtor transfers):
Favorite Brands Holding Corp. $ -
Favorite Brands International, Inc. $ 78,655
Trolli Inc. $ 7,899
Sather Trucking Corporation $ 1,735
----------
Total $ 88,289
==========
<PAGE>
FAVORITE BRANDS INTERNATIONAL HOLDING CORP.
Statement of Cash Receipts and Disbursements
For the Period
(Thousands of Dollars)
Debtors: Favorite Brands International Holding Corp., Favorite Brands
International, Inc., Trolli Inc., and Sather Trucking Corporation
(the "Debtors")
Case Number: 99-726PJW through 99-729PJW
Cash Receipts and Disbursements Detail
(consolidated)
<TABLE>
<CAPTION>
Favorite Brands International, Inc.
----------------------------------------------
Holdings FBI FBI FBI FBI
1st National Bank of Bank of Campbell & Kidd
BANK NAME: Bank of Chicago America America Fetter
ACCOUNT #: 55-61787 81887-00953 58552174 50742-6
-------- ----------- -------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ 21 $ 8,181 $ 23 $ - $ -
Receipts for Period 55,947 10
Disbursements for Period 37,093
------------ --------- ------- ------- ------
Ending Bank Ledger Balance $ 21 $ 27,035 $ 33 $ -
============ ========= ======= ======= ======
RECONCILIATION TO GENERAL LEDGER
Ending Bank Ledger Balance $ 21 $ 27,035 $ 33 $ - $ -
Outstanding Checks 2,784 6
Deposits in Transit
Other Reconciling Items 6,959 8 26 2
Marketable Securities
------------ --------- ------- ------- ------
Total Cash $ 21 $ 31,210 $ 41 $ 26 $ (4)
============ ========= ======= ======= ======
<CAPTION>
Favorite Brands International, Inc.
--------------------------------------------------------------------------------------
FBI Farley Farley Farley Farley Farley
Petty Cash Bank of Bank of Bank of Merrill Lynch
America America America Petty
8188-4-00945 8765-7-60790 8765-0-60789 626-95S Cash
---------- ------------ ------------ ------------ ------- ----
<S> <C> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ - $ - $ - $ 143 $ 225 $ 6
Receipts for Period 37,865 2,041 3,185
Disbursements for Period 37,865 2,041 3,328
-------- ----------- ----------- ----------- --------- ------
Ending Bank Ledger Balance $ - $ - $ - $ - $ 225 $ 6
======== =========== =========== =========== ========= ======
RECONCILIATION TO GENERAL LEDGER
Ending Bank Ledger Balance $ - $ - $ - $ - $ 225 $ 6
Outstanding Checks
Deposits in Transit
Other Reconciling Items 9
Marketable Securities
-------- ----------- ----------- ----------- --------- ------
Total Cash $ 9 $ - $ - $ - $ 225 $ 6
======== =========== =========== =========== ========= ======
</TABLE>
(1) Amounts are held in individual bank accounts specific for each
owner/operators' deposit to Sather Trucking.
(2) Amount does not agree to cash per the April 24, 1999 balance sheet due
to reclassifications of book overdrafts to paybles in accordance with
Generally Accepted Accounting Principles. Additionally, Favorite
Brands International Holding Corp's cash is not included on the
attached balance sheet.
<PAGE>
FAVORITE BRANDS INTERNATIONAL HOLDINGS CORP.
Statement of Cash Receipts and Disbursements
For the Period
(Thousands of Dollars)
Debtors: Favorite Brands International Holding Corp., Favorite Brands
International, Inc., Trolli Inc., and Sather Trucking Corporation (the
"Debtors")
Case Number: 99-726PJW through 99-729JW
Cash Receipts and Disbursements Detail
(consolidated)
<TABLE>
<CAPTION>
Favorite Brands International, Inc. Sather Trucking Corporation
---------------------------------------------- -------------------------------
Sathers Sathers Sathers STC STC
United Prairie United Prairie Norwest United Prairie United Prairie
BANK NAME: Bank Bank Bank Bank
ACCOUNT #: 40619 40897 273-0015886 040037 Various(1)
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ 52 $ 28 $ - $ 53 $ 201
Receipts for Period 5,135 509 1,377 1,704
Disbursements for Period 5,162 505 1,377 1,735
-------------- -------------- -------------- -------------- --------------
Ending Bank Ledger Balance $ 25 $ 31 $ - $ 22 $ 201
============== ============== ============== ============== ==============
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $ 25 $ 31 $ - $ 22 $ 201
Outstanding Checks 1,106 130 138
Deposits in Transit (1) (99)
Other Reconciling Items 1
Marketable Securities
-------------- -------------- -------------- -------------- --------------
Total Cash $ (1,081) $ (197) $ - $ (116) $ 201
============== ============== ============== ============== ==============
<CAPTION>
Trolli Inc.
---------------------------------------------------------------------------------
Trolli Trolli Trolli Trolli Trolli
Bank of Bank of Bank of First Union 1st National
BANK NAME: America America America Bank in Creston
ACCOUNT #: 8765-7-62355 8765-9-62354 8765-5-61583 2651901387172 375162
-------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ - $ - $ - $ 4 $ 76
Receipts for Period 7,113 598 115 - -
Disbursements for Period 7,113 598 115 - -
-------------- -------------- -------------- -------------- --------------
Ending Bank Ledger Balance $ - $ - $ - $ 4 $ 76
============== ============== ============== ============== ==============
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $ - $ - $ - $ 4 $ 76
Outstanding Checks $ 769 7 16
Deposits in Transit
Other Reconciling Items 11 (114) 106 2
Marketable Securities
-------------- -------------- -------------- -------------- ---------------
$ (758) $ (121) $ 90 $ 6 $ 76
============== ============== ============== ============== ==============
<CAPTION>
-------------------------------------------------
Trolli Trolli Trolli
1st National 1st National Nova Scotia Total(2)
BANK NAME: Bank in Creston Bank in Creston Bank
ACCOUNT #: 2025443 2025450 1113212
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ 90 $ 5 $ 17 $ 9,125
Receipts for Period - 5 - 115,603
Disbursements for Period 70 3 - 97,005
-------------- -------------- -------------- --------------
Ending Bank Ledger Balance $ 20 $ 7 $ 17 $ 27,724
============== ============== ============== ==============
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance
Outstanding Checks $ 20 $ 7 $ 17 $ 27,724
Deposits in Transit 13 2 4,970
Other Reconciling Items (100)
Marketable Securities 7,010
-------------- -------------- -------------- --------------
Total Cash $ 7 $ 5 $ 17 $ 29,663
============== ============== ============== ==============
</TABLE>
(1) Amounts are held in individual bank accounts specific for each
owner/operators' deposit to Sather Trucking.
(2) Amount does not agree to cash per the April 24, 1999 balance sheet due to
reclassifications of book overdrafts to paybles in accordance with
Generally Accepted Accounting Principles. Additionally, Favorite Brands
International Holding Corp's cash is not included on the attached balance
sheet.
<PAGE>
FAVORITE BRANDS INTERNATIONAL HOLDING CORP.
Aging of Accounts Receivable and Postpetition Accounts Payable
For the Period
(Thousands of Dollars)
Debtors: Favorite Brands International Holding Corp., Favorite Brands
International, Inc., Trolli Inc., and Sather Trucking Corporation (the
"Debtors")
Case Numbers: 99-726PJW through 99-729PJW
AGING OF ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE
<TABLE>
<CAPTION>
AGING OF ACCOUNTS RECEIVABLE
----------------------------
<S> <C>
0 - 30 days old $ 43,134
31 - 60 days old 6,165.7
61 - 90 days old 873.1
+ 91 days old (10.3)
Other A/R 16,042.0
----------
Total Accounts Receivable $ 66,204
----------
Allowance for doubtful accounts 16,946.4
----------
Accounts Receivable (Net) $ 49,258
==========
</TABLE>
<TABLE>
<CAPTION>
AGING OF POSTPETITION ACCOUNTS PAYABLE
--------------------------------------
<S> <C>
0 - 30 days old $ 7,124.2
31 - 60 days old -
61 - 90 days old -
+ 91 days old -
----------
Total Post Petition Accounts Payable $ 7,124.2
==========
</TABLE>
<PAGE>
FAVORITE BRANDS INTERNATIONAL HOLDING CORP.
Statement of Payments to Professionals
For the Period
(Thousands of Dollars)
Debtors: Favorite Brands International Holding Corp., Favorite Brands
International, Inc., Trolli Inc., and Sather Trucking Corporation (the
"Debtors")
Case Numbers: 99-726PJW through 99-729PJW
<TABLE>
<CAPTION>
Date of Court
Type of Order Authorizing Amount
Professional Payment Approved
- ------------------------------------------------- --------------------------- ----------------------- --------------
<S> <C> <C> <C>
Skadden, Arps, Slate, Meagher & Flom debtor attorney N/A/(1)/ N/A/(1)/
Wasserstein Perella & Co. debtor financial advisors N/A/(1)/ N/A/(1)/
==============
Total Payment to Professionals $ -
==============
<CAPTION>
Amount Total Paid
Paid to Date
--------------- ---------------
<S> <C> <C>
Skadden, Arps, Slate, Meagher & Flom $ 200.00 $ 200.00
Wasserstein Perella & Co. 162.76 162.76
=============== ===============
Total Payment to Professionals $ 362.76 $ 362.76
=============== ===============
</TABLE>
(1) Debtors' April fiscal period began March 28, 1999 and therefore includes
two business days pre-petition activity as the bankruptcy filing was made
on March 30, 1999. Amounts were paid on March 30, 1999 prior to the
filing.
