<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 30, 1999
Favorite Brands International, Inc.
and the Guarantors identified in Footnote (1) below
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 333-67221 75-2608980
- --------------------------------------------------------------------------------------------------------------------
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
Incorporation)
</TABLE>
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 June 30, 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 May 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: July 7, 1999 By: /s/ Steven F. Kaplan
--------------------------------------
President, Chief Operating Officer
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
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<CAPTION>
Exhibit No. Description of Exhibit
- --------------------------------------------------------------------------------
<S> <C>
99.2 Monthly Operating Report
</TABLE>
<PAGE>
TRANSMITTAL OF FINANCIAL REPORTS AND
CERTIFICATION OF COMPLIANCE WITH
UNITED STATES TRUSTEE OPERATING REQUIREMENTS
FOR THE PERIOD ENDED May 22, 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: /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, Except Per Share Data)
<TABLE>
<CAPTION>
May 22,
ASSETS 1999
------ -----------
(Unaudited)
<S> <C>
Current Assets:
Cash and cash equivalents...................................... $ 35,236
Accounts receivable, less allowance of $18,100................. 52,147
Inventories.................................................... 67,691
Deferred income taxes.......................................... 15,343
Prepaid expenses and other current assets...................... 8,140
--------
Total current assets......................................... 178,557
--------
Property, Plant and Equipment, at Cost:
Land........................................................... 5,200
Buildings...................................................... 67,726
Machinery and equipment........................................ 201,131
Construction in progress....................................... 52,158
--------
326,215
74,357
--------
Less accumulated depreciation.................................. 251,858
--------
Other Assets:
Intangible assets, net......................................... 335,849
Prepaid expenses and other assets.............................. 1,564
Deferred income taxes.......................................... 48,024
--------
385,437
--------
$815,852
========
</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)
<TABLE>
<CAPTION>
May 22,
LIABILITIES AND STOCKHOLDER'S EQUITY 1999
------------------------------------ -----------
(Unaudited)
<S> <C>
Current Liabilities:
Accounts payable and accrued liabilities.................. $ 70,234
Current portion of long-term debt......................... -
Other current liabilities................................. 1,572
---------
Total current liabilities.............................. 71,806
---------
Noncurrent Liabilities:
Long-term debt............................................ -
Other long-term liabilities............................... 2,169
---------
Total noncurrent liabilities........................... 2,169
---------
Prepetition Secured Debt......................................... 200,500
Liabilities subject to compromise................................ 471,917
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........................................ (126,291)
---------
Total stockholder's equity............................... 69,460
---------
$ 815,852
=========
</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
-----------
May 22,
1999
-----------
(Unaudited)
<S> <C>
Net sales........................................................ $ 60,600
Costs and expenses:
Cost of sales............................................. 35,808
Selling, marketing and administrative..................... 21,897
Amortization of intangible assets......................... 1,736
Restructuring and business integration costs.............. 5
---------
59,446
Income from operations........................................... 1,154
Interest expense.......................................... 1,243
Reorganization charges under Chapter 11................... 2,276
---------
Loss before income taxes......................................... (2,365)
Benefit for income taxes....................................... -
---------
Net loss......................................................... $ (2,365)
=========
Reconciliation to EBITDA:
Net loss....................................................... $ (2,365)
Interest expense............................................ 1,243
Benefit for income taxes.................................... -
Cumulative effect/Extraordinary Charge...................... -
---------
EBIT........................................................... (1,122)
Depreciation................................................ 2,326
Amortization................................................ 1,736
---------
Reported EBITDA................................................ 2,940
Reorganization charges under Chapter 11..................... 2,276
Restructuring and business integration costs................ 5
---------
Adjusted EBITDA................................................ $ 5,221
=========
</TABLE>
<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
May 22, 1999
------------
(Unaudited)
<S> <C>
Cash Flows from Operating Activities:
Net loss................................................ $ (2,365)
Adjustments:
Depreciation and amortization....................... 4,062
Loss on disposition of property, plant & equipment.. --
Deferred income taxes............................... --
Cumulative effect of change in accounting principle. --
Changes in operating assets and liabilities:
Accounts receivable.............................. (2,889)
Inventories...................................... 1,282
Prepaid expenses and other assets................ (2,046)
Accounts payable, accrued liabilities and
liabilities subject to compromise.............. 6,156
Income taxes payable............................. --
Other liabilities................................ 937
------------
Net cash provided by operating activities...... 5,137
------------
Cash Flows from Investing Activities:
Proceeds on the sale of assets........................... --
Capital expenditures..................................... (1,552)
------------
Net cash used in investing activities........... (1,552)
------------
Cash Flows from Financing Activities:
Net borrowings on revolving credit loans................. --
Proceeds from loans...................................... --
Repayments of term loan.................................. --
Payments for debt issuance costs......................... (175)
Repayment of other long-term debt........................ --
Proceeds from capital contributions...................... --
------------
Net cash used in financing activities........... (175)
------------
Increase in cash and cash equivalents.......................... 3,410
Cash and cash equivalents, beginning of period................ $ 31,826
------------
Cash and cash equivalents, end of period...................... $ 35,236
============
Supplemental Cash Flow Information:
Income taxes paid........................................ $ --
============
Interest paid............................................ $ 1,391
============
</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):
<TABLE>
<CAPTION>
<S> <C>
Favorite Brands Holding Corp. $ -
Favorite Brands International, Inc. $109,004
Trolli Inc. $ 7,156
Sather Trucking Corporation $ 1,733
--------
Total $117,893
========
</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 FBI
1st National Bank of Bank of Campbell & Chase/ Kidd Petty Cash
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> <C>
Beginning Bank Ledger Balance $21 $27,036 $26 $33 $ - $ - $ -
Receipts for Period 49,495 1 7 150,790
Disbursements for Period 74,033 121,215
--- ------- --- --- -------- --- ---
Ending Bank Ledger Balance $21 $ 2,498 $27 $40 $ 29,575 $ - $ -
=== ======= === === ======== === ===
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $21 $ 2,498 $27 $40 $ 29,575 $ - $ -
Outstanding Checks 1,130 6
Deposits in Transit
Other Reconciling Items 2,029 6 1,687 12 10
--- ------- --- --- ------- --- ---
Total Cash $21 $ 3,397 $27 $46 $31,262 $ 6 $10
=== ======= === === ======= === ===
<CAPTION>
Favorite Brands International, Inc.
------------------------------------------------------------------
Farley Farley Farley Farley Farley
Bank of Bank of Bank of Merrill Lynch
America America America Petty
8188-4-00945 8765-7-60790 8765-0-60789 626-955 Cash
------------ ----------- ------------ ------------ -----
<S> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ - $ - $ - $225
Receipts for Period 33,832 1,926 4,786
Disbursements for Period 33,832 1,926 4,786
------- ------ ------- ---- ---
Ending Bank Ledger Balance $ - $ - $ - $225 $ -
======= ====== ======= ==== ===
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $ - $ - $ - $225 $ -
Outstanding Checks -
Deposits in Transit 334 609 2,325
Other Reconciling Items (334) (609) (2,325) 6
------- ------ ------- ---- ---
Total Cash $ - $ - $ - $225 $ 6
======= ====== ======= ==== ===
</TABLE>
(1) Amounts are held in individual bank accounts specifically for each owner
operators' deposit to Sather Trucking.
(2) Amount does not agree to cash per the May 22, 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 in 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 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 $ 25 $ 31 $ -- $ 22 $ 210
Receipts for Period 10,284 503 1,339 1,769
Disbursements for Period 10,195 502 1,339 1,733
-------------- -------------- -------------- -------------- --------------
Ending Bank Ledger Balance $ 114 $ 32 $ -- $ 58 $ 210
============== ============== ============== ============== ==============
RECONCILIATION TO GENERAL LEDGER
Ending Bank Ledger Balance $ 114 $ 32 $ -- $ 58 $ 210
Outstanding Checks 724 124 54
Deposits in Transit 1 92
Other Reconciling Items
-------------- -------------- -------------- -------------- --------------
Total Cash $ (609) $ 0 $ -- $ 4 $ 210
============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Trolli Inc.
----------------------------------------------------------------------------------------
Trolli Trolli Trolli Trolli Trolli
BANK NAME Bank of Bank of Bank of First Union 1st National
ACCOUNT # America America America Bank in Creston
8765-7-62355 8765-9-62354 8765-5-61583 2651901387172 375162
-------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ -- $ -- $ -- $ 4 $ --
Receipts for Period 6,477 602 16
Disbursements for Period 6,477 602 16 1
-------------- -------------- -------------- -------------- ---------------
Ending Bank Ledger Balance $ -- $ -- $ -- $ 3 $ --
============== ============== ============== ============== ===============
RECONCILIATION TO GENERAL LEDGER
Ending Bank Ledger Balance $ -- $ -- $ -- $ 3 $ --
Outstanding Checks 563 7 16
Deposits in Transit
Other Reconciling Items (7) (9)
-------------- -------------- -------------- -------------- ---------------
Total Cash $ (563) $ (14) $ (25) $ 3 $ --
============== ============== ============== ============== ===============
</TABLE>
<TABLE>
<CAPTION>
Trolli Inc.
------------------------------------------------------------------------
Trolli Trolli Trolli Trolli
BANK NAME 1st National 1st National Nova Scotia Total/2/
ACCOUNT # Bank in Creston Bank in Creston Petty Cash Bank
2025443 2025450 1113212
--------------- ---------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ 83 $ 7 $ $ 17 $ 27,740
Receipts for Period 261,827
Disbursements for Period 59 1 256,717
--------------- ---------------- -------------- -------------- -------------
Ending Bank Ledger Balance $ 24 $ 6 $ -- $ 17 $ 32,850
=============== ================ ============== ============== =============
RECONCILIATION TO GENERAL LEDGER
Ending Bank Ledger Balance $ 24 $ 6 $ -- $ 17 $ 32,850
Outstanding Checks 8 1 2,633
Deposits in Transit 3,361
Other Reconciling Items 1 467
--------------- ---------------- -------------- -------------- -------------
Total Cash $ 16 $ 5 $ 1 $ 17 $ 34,045
=============== ================ ============== ============== =============
</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 May 22, 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 in 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>
<S> <C>
AGING OF ACCOUNTS RECEIVABLE
----------------------------
0 - 30 days old $47,142
31 - 60 days old 4,795
61 - 90 days old 1,216
+ 91 days old 155
Other A/R 16,957
------
Total Accounts Receivable 70,265
Allowance for doubtful accounts 18,118
------
Accounts Receivable (Net) $52,147
=======
AGING OF POSTPETITION ACCOUNTS PAYABLE
--------------------------------------
0 - 30 days old $ 9,458
31 - 60 days old 5,710
61 - 90 days old --
+ 91 days old --
-------
Total Post Petition Accounts Payable 15,168
Unapplied Payments (1) 6,778
------
Accounts Payable $ 8,390
=======
</TABLE>
(1) Amount relates to wire transfers payments made at the corporate level as of
May 22, 1999, but not yet applied at the subsidiary level as of the balance
sheet date.
12
<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 $ - $ 200
Wasserstein Perella & Co. debtor financial advisors N/A N/A - 163
-------- ------ ---------
Total Payments to Professionals $ - $ - $ 363
======== ====== =========
</TABLE>
13
