<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): November 22, 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 November 22, 1999 Favorite Brands International, Inc. (the "Company") filed
in the United States Bankruptcy Court for the District of Delaware the monthly
operating report for its October 1999 fiscal period which is attached hereto as
Exhibit 99.2.
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
<PAGE>
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: November 23, 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 October 23, 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: November 22, 1999 /s/ Steven F. Kaplan
-------------------- --------------------------------------
Debtors in Possession
Steven F. Kaplan
President, Chief Operating Officer,
and Chief Financial Officer
<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)
<TABLE>
<CAPTION>
October 23,
ASSETS 1999
------ ------------
(Unaudited)
<S> <C>
Current Assets:
Cash and cash equivalents.................................... $ 21,694
Accounts receivable, less allowance of $15,805............... 59,926
Inventories.................................................. 72,493
Deferred income taxes........................................ -
Prepaid expenses and other current assets.................... 11,139
--------
Total current assets....................................... 165,252
--------
Property, Plant and Equipment, at Cost:
Land......................................................... 5,200
Buildings.................................................... 75,224
Machinery and equipment...................................... 236,482
Construction in progress..................................... 10,131
--------
327,037
Less accumulated depreciation................................ 83,098
--------
243,939
--------
Other Assets:
Intangible assets, net....................................... 266,090
Prepaid expenses and other assets............................ 1,469
Deferred income taxes........................................ -
--------
267,559
--------
$676,750
========
</TABLE>
1
<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>
October 23,
LIABILITIES AND STOCKHOLDER'S EQUITY 1999
------------------------------------ -----------
(Unaudited)
<S> <C>
Current Liabilities:
Accounts payable and accrued liabilities...................... $ 61,402
Other current liabilities..................................... 1,040
---------
Total current liabilities................................... 62,442
---------
Noncurrent Liabilities:
Other long-term liabilities................................... 2,299
---------
Total noncurrent liabilities................................ 2,299
---------
Prepetition Secured Debt........................................... 200,500
Liabilities subject to compromise.................................. 463,837
Commitments and Contingencies...................................... -
---------
Total liabilities........................................... 729,078
---------
Stockholder's Equity:
Common Stock, $.01 par value; 1,000 shares authorized,
issued and outstanding..................................... -
Additional paid-in capital.................................... 195,751
Accumulated deficit........................................... (248,079)
---------
Total stockholder's equity.................................. (52,328)
---------
$ 676,750
=========
</TABLE>
2
<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
October 23, 1999
----------------
(Unaudited)
<S> <C>
Net sales............................................... $56,080
Costs and expenses:
Cost of sales........................................ 34,350
Selling, marketing and administrative................ 14,123
Amortization of intangible assets.................... 1,188
Restructuring and business integration costs......... -
-------
49,661
Income from operations.................................. 6,419
Interest expense..................................... 1,410
Reorganization charges under Chapter 11.............. 2,168
-------
Income before income taxes.............................. 2,841
Provision for income taxes............................. -
-------
Net Income.............................................. $ 2,841
=======
Reconciliation to Adjusted EBITDA:
Net Income............................................. $ 2,841
Interest expense..................................... 1,410
Provision for income taxes........................... -
-------
EBIT................................................... 4,251
Depreciation......................................... 2,365
Amortization......................................... 1,188
-------
Reported EBITDA........................................ 7,804
Reorganization charges under Chapter 11.............. 2,168
Restructuring and business integration costs......... -
-------
Adjusted EBITDA........................................ $ 9,972
=======
</TABLE>
3
<PAGE>
FAVORITE BRANDS INTERNATIONAL, INC.
AND SUBSIDIARIES
(A Wholly-Owned Subsidiary of Favorite Brands International Holding Corp.)
(Debtor-In-Possession)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Four Weeks
Ended
October 23, 1999
----------------
(Unaudited)
<S> <C>
Cash Flows from Operating Activities:
Net income............................................... $ 2,841
Adjustments:
Depreciation and amortization....................... 3,553
Gain on disposition of property, plant & equipment.. (195)
Deferred income taxes............................... -
Changes in operating assets and liabilities:
Accounts receivable............................ 1,661
Inventories.................................... 4,010
Prepaid expenses and other assets.............. 3,753
Accounts payable, accrued liabilities and
liabilities subject to compromise............. (7,085)
Income taxes payable........................... -
Other liabilities.............................. (52)
-------
Net cash provided by operating activities.... 8,486
-------
Cash Flows from Investing Activities:
Proceeds on the sale of assets........................... -
Capital expenditures..................................... (1,542)
-------
Net cash used in investing activities........ (1,542)
-------
Cash Flows from Financing Activities:
Net borrowings (repayments) on revolving credit loans.... -
Proceeds from loans...................................... -
Repayments of term loan.................................. -
Payments for debt issuance costs......................... -
Repayment of other long-term debt........................ -
Proceeds from capital contributions...................... -
-------
Net cash provided by financing activities.... -
-------
Increase in cash and cash equivalents......................... 6,944
Cash and cash equivalents, beginning of period................ 14,750
-------
Cash and cash equivalents, end of period...................... $21,694
=======
Supplemental Cash Flow Information:
Income taxes paid........................................ $ -
=======
Interest paid............................................ $ 902
=======
</TABLE>
4
<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: 99-762PJW through 99-729PJW
DISBURSEMENTS DURING PERIOD
(deconsolidated and excluding intradebtor transfers):
<TABLE>
<S> <C>
Favorite Brands Holding Corp. $ -
Favorite Brands International, Inc. $88,727
Trolli Inc. $ 7,222
Sather Trucking Corporation $ 1,368
-------
Total $97,317
=======
</TABLE>
<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 Numbers: 99-726PJW through 99-729PJW
Cash Receipts and Disbursements Detail
(consolidated)
<TABLE>
<CAPTION>
Favorite Brands International, Inc.
-------------------------------------------------------
Holdings FBI FBI FBI FBI FBI
1st National Bank of Bank of Campbell & Chase/ Kidd
BANK NAME: Bank of Chicago America America Fetter Investment
ACCOUNT #: 55-61787 81887-00953 58552174 50742-6 323-845851
--------------- ----------- -------- ---------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $21 $ 3,770 $ - $149 $ 11,773 $ -
Receipts for Period 54,745 101 302,721
Disbursements for Period 55,520 100 292,792
--- ------- ------ ---- -------- -----
Ending Bank Ledger Balance $21 $ 2,995 $ - $150 $ 21,702 $ -
=== ======= ====== ==== ======== =====
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $21 $ 2,995 $ - $150 $ 21,702 $ -
Outstanding Checks 4,128
Deposits in Transit (6)
Other Reconciling Items 1,375 (83) (726)
--- ------- ------ ---- -------- -----
Total Cash $21 $ 242 $ - $ 67 $ 20,976 $ (6)
=== ======= ====== ==== ======== =====
</TABLE>
<TABLE>
<CAPTION>
Favorite Brands International, Inc.
--------------------------------------------------------------------------------
FBI Farley Farley Farley Farley Farley
Petty Cash Bank of Bank of Bank of Merrill Lynch
BANK NAME: America America America Petty
ACCOUNT #: 8188-4-00945 8765-7-60790 8765-0-60789 626-95S Cash
---------- ------------ ------------ ------------ ------------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ - $ - $ - $ - $225 $4
Receipts for Period 33,419 2,178 5,309
Disbursements for Period 33,419 2,178 5,309
--- ------- ------ ------- ---- --
Ending Bank Ledger Balance $ - $ - $ - $ - $225 $4
=== ======= ====== ======= ==== ==
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $ - $ - $ - $ - $225 $4
Outstanding Checks 498 3,461
Deposits in Transit
Other Reconciling Items 17 498
--- ------- ------ ------- ---- --
Total Cash $17 $ - $ - $(3,461) $225 $4
=== ======= ====== ======= ==== ==
</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 October 23, 1999 balance sheet due to
reclassifications of book overdrafts to payables 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.
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 Numbers: 99-726PJW through 99-729PJW
Cash Receipts and Disbursements Detail
(consolidated)
<TABLE>
<CAPTION>
Favorite Brands International, Inc. Sather Trucking Corporation
---------------------------------------------------- --------------------------------
Sathers Sathers Sathers STC STC
United Prairie Bank of Norwest United Prairie United Prairie
BANK NAME: Bank America Bank Bank
ACCOUNT #: 40619 8765-9-02114 273-0015886 040037 Various/(1)/
-------------- ------------ ----------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ 70 $ - $ - $ 35 $ 213
Receipts for Period 5,123 1,314 442 1,374
Disbursements for Period 5,144 1,314 442 1,368
--------- --------- ------ --------- ------
Ending Bank Ledger Balance $ 49 $ - $ - $ 40 $ 213
========= ========= ====== ========= ======
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $ 49 $ - $ - $ 40 $ 213
Outstanding Checks 1,296 143 171
Deposits in Transit
Other Reconciling Items 4 (3)
--------- --------- ------ --------- ------
Total Cash $ (1,243) $ (146) $ - $ (131) $ 213
========= ========= ====== ========= ======
</TABLE>
<TABLE>
<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> <C>
Beginning Bank Ledger Balance $ - $ - $ - $ 2 Account Closed
Receipts for Period 6,629 592 As of 4/30/99
Disbursements for Period 6,629 592
--------- --------- ------ --------- ------
Ending Bank Ledger Balance $ - $ - $ - $ 2 $ -
========= ========= ====== ========= ======
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $ - $ - $ - $ 2 $ -
Outstanding Checks 1,074 6 7
Deposits in Transit
Other Reconciling Items 7
--------- --------- ------ --------- ------
Total Cash $ (1,074) $ (6) $ - $ 2 $ -
========= ========= ====== ========= ======
</TABLE>
<TABLE>
<CAPTION>
Trolli Inc.
------------------------------------------------------------------
Trolli Trolli Trolli Trolli
1st National 1st National Nova Scotia Total/2)/
BANK NAME: Bank in Creston Bank in Creston Petty Cash Bank
ACCOUNT #: 2025443 2025450 1113212
--------------- --------------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance Account Closed $ 5 $ - $ 17 $ 16,283
Receipts for Period As of 6/30/99 413,945
Disbursements for Period 1 404,807
--------- --------- ------ --------- --------
Ending Bank Ledger Balance $ - $ 4 $ - $ 17 $ 25,422
========= ========= ====== ========= ========
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $ - $ 4 $ - $ 17 $ 25,422
Outstanding Checks 10,784
Deposits in Transit (6)
Other Reconciling Items 1 1,090
--------- --------- ------ --------- --------
Total Cash $ - $ 4 $ 1 $ 17 $ 15,722
========= ========= ====== ========= ========
</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 October 23, 1999 balance sheet due to
reclassifications of book overdrafts to payables 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.
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 Amount Total Paid
Professional Payment Approved Paid to Date
- ---------------------------------- --------------------------- ----------------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C>
Skadden, Arps, Slate, Meagher & Flom debtor attorney N/A N/A $ - $ 707
Wasserstein Perella & Co. debtor financial advisors N/A N/A - 523
Paul, Weiss, Rifkind, Wharton & Garrison creditor committee attorney N/A N/A 38 195
Houlihan & Lokey financial advisors N/A N/A - 292
Arthur Andersen debtor accountants N/A N/A - 873
---- ------- ------
Total Payments to Professionals $ - $ 38 $2,590
==== ======= ======
</TABLE>
<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>
AGING OF ACCOUNTS RECEIVABLE
----------------------------
<S> <C>
0 - 30 days old $54,435
31 - 60 days old 3,938
61 - 90 days old 975
+ 91 days old 1,176
Other A/R 15,207
-------
Total Accounts Receivable 75,731
Allowance for doubtful accounts 15,805
-------
Accounts Receivable (Net) $59,926
=======
</TABLE>
<TABLE>
AGING OF POSTPETITION ACCOUNTS PAYABLE
--------------------------------------
<S> <C>
0 - 30 days old $11,741
31 - 60 days old 289
61 - 90 days old 106
+ 91 days old 314
-------
Total Post Petition Accounts Payable $12,450
=======
</TABLE>
