<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 SECURITIRES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 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 (Commission File Number) (I.R.S. Employer
Jurisdiction of 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
<PAGE>
Item 5. Other Events
On November 1, 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 September 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 3, 1999 By: /s/ Steven F. Kaplan
-----------------------------------------------
President, Chief Operating Officer and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- --------------------------------------------------------------------------------
<S> <C>
99.2 Monthly Operating Report
</TABLE>
<PAGE>
Exhibit 99.2
TRANSMITTAL OF FINANCIAL REPORTS AND
CERTIFICATION OF COMPLIANCE WITH
UNITED STATES TRUSTEE OPERATING REQUIREMENTS
FOR THE PERIOD ENDED September 25, 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. (SS)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. (SS)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.
/s/ Steven F. Kaplan
Dated: ____________ ______________________
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>
September 25,
Assets 1999
------ -------------
(Unaudited)
<S> <C>
Current Assets:
Cash and cash equivalents.................................. $ 14,750
Accounts receivable, less allowance of $17,268............. 61,587
Inventories................................................ 76,503
Deferred income taxes...................................... -
Prepaid expenses and other current assets.................. 15,319
----------
Total current assets.................................... 168,159
----------
Property, Plant and Equipment, at Cost:
Land....................................................... 5,200
Buildings.................................................. 75,148
Machinery and equipment.................................... 235,601
Construction in progress................................... 9,457
----------
325,406
Less accumulated depreciation.............................. 80,844
----------
244,562
----------
Other Assets:
Intagible assets, net...................................... 266,851
Prepaid expenses and other assets.......................... 1,474
Deferred income taxes...................................... -
----------
268,325
----------
$ 681,046
==========
</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>
September 25,
LIABILITIES AND STOCKHOLDER'S EQUITY 1999
------------------------------------ -------------
(Unaudited)
<S> <C>
Current Liabilities:
Accounts payable and accrued liabilities.................... $ 68,265
Other current liabilities................................... 1,458
---------
Total current liabilities................................ 69,723
---------
Noncurrent Liabilities:
Other long-term liabilities................................. 1,933
---------
Total noncurrent liabilities............................. 1,933
---------
Prepetition Secured Debt......................................... 200,500
Liabilities subject to compromise................................ 464,059
Commitments and Contingencies.................................... -
---------
Total liabilities........................................ 736,215
---------
Stockholder's Equity:
Common Stock, $.01 par value; 1,000 shares authorized,
issued and outstanding................................... -
Additional paid-in capital.................................. 195,751
Accumulated deficit......................................... (250,920)
---------
Total stockholder's equity............................... (55,169)
---------
$ 681,046
=========
</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>
Five Weeks
Ended
September 25, 1999
------------------
(Unaudited)
<S> <C>
Net sales................................................ $71,655
Costs and expenses:
Cost of sales....................................... 43,694
Selling, marketing and administrative............... 19,396
Amortization of intangible assets................... 1,670
Restructuring and business integration costs........ -
-------
64,760
Income from operations................................... 6,895
Interest expense.................................... 1,619
Reorganization charges under Chapter 11............. 1,116
-------
Income before income taxes............................... 4,160
Provision for income taxes............................. -
-------
Net income............................................... $ 4,160
=======
Reconciliation to Adjusted EBITDA:
Net income............................................. $ 4,160
Interest expense.................................... 1,619
Provision for income taxes.......................... -
-------
EBIT................................................... 5,779
Depreciation........................................ 2,533
Amortization........................................ 1,670
-------
Reported EBITDA........................................ 9,982
Reorganization charges under Chapter 11............. 1,116
Restructuring and business integration costs........ -
-------
Adjusted EBITDA........................................ $11,098
=======
</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>
Five Weeks
Ended
September 25, 1999
------------------
(Unaudited)
<S> <C>
Cash Flows from Operating Activities:
Net income............................................... $ 4,160
Adjustments:
Depreciation and amortization....................... 4,203
Gain on disposition of property, plant & equipment.. (141)
Deferred income taxes............................... -
Changes in operating assets and liabilities:
Accounts receivable............................ (11,852)
Inventories.................................... 3,003
Prepaid expenses and other assets.............. 3,134
Accounts payable, accrued liabilities and
liabilities subject to compromise............. (7,300)
Income taxes payable........................... -
Other liabilities.............................. 25
--------
Net cash used in operating activities....... (4,768)
--------
Cash Flows from Investing Activities:
Proceeds on the sale of assets........................... -
Capital expenditures..................................... (361)
--------
Net cash used in investing activities....... (361)
--------
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... -
--------
Decrease in cash and cash equivalents......................... (5,129)
Cash and cash equivalents, beginning of period................ 19,879
--------
Cash and cash equivalents, end of period...................... $ 14,750
========
Supplemental Cash Flow Information:
Income taxes paid........................................ $ 38
========
Interest paid............................................ $ 2,253
========
</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. $ 91,207
Trolli Inc. $ 12,401
Sather Trucking Corporation $ 1,524
--------
Total $105,132
========
<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 $ 3,322 $ -- $ 149 $ 4,773 $ --
Receipts for Period 60,522 194,549
Disbursements for Period 60,074 -- 187,549
------------ --------- --------- -------- --------- --------
Ending Bank Ledger Balance $ 21 $ 3,770 $ -- $ 149 $ 11,773 $ --
=========== ========= ======== ======= ========= ========
RECONCILIATION TO GENERAL LEDGER
Ending Bank Ledger Balance $ 21 $ 3,770 $ -- $ 149 $ 11,773 $ --
Outstanding Checks 4,106 --
Deposits in Transit -- (6)
Other Reconciling Items 1,724 2 926
----------- --------- -------- ------- --------- -------
Total Cash $ 21 $ 1,388 $ 2 $ 149 $ 12,699 $ (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 $ 6
Receipts for Period 32,667 2,792 6,648
Disbursements for Period 32,667 2,792 6,648
--------- ------------- ----------- ------------ ----------- --------
Ending Bank Ledger Balance $ -- $ -- $ -- $ -- $ 225 $ 6
========= ========== ========= =========== ========== ========
RECONCILIATION TO GENERAL LEDGER
Ending Bank Ledger Balance $ -- $ -- $ -- $ -- $ 225 $ 6
Outstanding Checks 480 3,817
Deposits in Transit
Other Reconciling Items 41 480 --
--------- ---------- --------- ----------- ---------- --------
Total Cash $ 41 $ -- $ -- $ (3,817) $ 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 September 25, 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 United Prairie Norwest United Prairie United Prairie
BANK NAME: B Bank Bank Bank Bank
ACCOUNT #: 40619 40897 273-0015886 040037 Various/1/
--------------- -------------- ------------ ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ 179 $ 1 $ (0) $ 63 $ 213
Receipts for Period 8,077 -- 410 1,495
Disbursements for Period 8,187 1 410 1,524
--------------- -------------- ------------ ---------------- ---------------
Ending Bank Ledger Balance $ 70 $ -- $ (0) $ 35 $ 213
=============== ============== ============ ================ ===============
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $ 70 $ -- $ (0) $ 35 $ 213
Outstanding Checks 989 -- 226
Deposits in Transit -- -- --
Other Reconciling Items 2 -- 0
--------------- -------------- ------------ ---------------- ---------------
Total Cash $ (918) $ -- $ 0 $ (192) $ 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 2851901387172 375162
--------------- -------------- ------------ ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Beginning Bank Ledger Balance $ (15) $ 4 Account Closed
Receipts for Period 11,576 830 (1) As of 4/30/99
Disbursements for Period 11,576 830 (9) 2
--------------- -------------- ------------ ---------------- ---------------
Ending Bank Ledger Balance $ -- $ -- $ (7) $ 2 $ --
=============== ============== ============ ================ ===============
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $ -- $ -- $ (7) $ 2 $ --
Outstanding Checks 435 9
Deposits in Transit
Other Reconciling Items 1
--------------- -------------- ------------ ---------------- ---------------
Total Cash $ (435) $ (8) $ (7) $ 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>
Beginning Bank Ledger Balance Account Closed $ 2 $ -- $ 17 $ 8,960
Receipts for Period As of 6/30/99 5 319,571
Disbursements for Period 2 312,253
--------------- -------------- ------------ ---------------- ---------------
Ending Bank Ledger Balance $ -- $ 5 $ -- $ 17 $ 16,278
=============== ============== ============ ================ ===============
RECONCILIATION TO GENERAL LEDGER
- --------------------------------
Ending Bank Ledger Balance $ -- $ 5 $ -- $ 17 $ 16,278
Outstanding Checks 10,063
Deposits in Transit (6)
Other Reconciling Items 1 3,177
--------------- -------------- ------------ ---------------- ---------------
Total Cash $ -- $ 5 $ 1 $ 17 $ 9,387
=============== ============== ============ ================ ===============
</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 September 25, 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.
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 $ 55,773
31 - 60 days old 3,512
61 - 90 days old 711
+ 91 days old 1,202
Other A/R 17,657
-------------
Total Accounts Receivable 78,855
Allowance for doubtful accounts 17,268
-------------
Accounts Receivable (Net) $ 61,587
=============
</TABLE>
<TABLE>
<CAPTION>
AGING OF POSTPETITION ACCOUNTS PAYABLE
--------------------------------------
<S> <C>
0 - 30 days old $ 9,729
31 - 60 days old 877
61 - 90 days old 51
+ 91 days old 291
-------------
Total Post Petition Accounts Payable $ 10,948
=============
</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 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 $ 106 $ 707
Wasserstein Perella & Co. debtor financial advisors N/A N/A 240 523
Paul, Weiss, Rifkind, Wharton & Garrison creditor committee attorney N/A N/A 37 156
Houlihan & Lokey financial advisors N/A N/A 169 292
Arthur Andersen debtor accountants N/A N/A 199 199
--------- -------- ------------
Total Payments to Professionals $ - $ 751 $ 1,877
========= ======== ============
</TABLE>
