--------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 2, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________________ to_________________
Commission file number: 333-78625-11
------------
SNAPPLE BEVERAGE GROUP, INC.
--------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 65-0748978
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
709 Westchester Avenue,
White Plains, New York 10604
---------------------- -----
(Address of principal executive offices) (Zip Code)
(914) 397-9200
---------------------------------------------
(Registrant's telephone number, including area code)
Triarc Beverage Holdings Corp.
-------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes (X) No ( )
There were 850,500 shares of the registrant's common stock outstanding
as of August 11, 2000.
--------------------------------------------------------------------------------
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
<CAPTION>
SNAPPLE BEVERAGE GROUP, INC. AND SUBSIDIARIES
(Formerly TRIARC BEVERAGE HOLDINGS CORP.)
CONDENSED CONSOLIDATED BALANCE SHEETS
January 2, July 2,
2000 (A) 2000
-------- ----
(In thousands)
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents...................................................................$ 22,108 $ 17,781
Receivables................................................................................. 50,579 88,454
Inventories................................................................................. 55,848 80,039
Deferred income tax benefit................................................................. 11,276 11,276
Prepaid expenses and other current assets................................................... 2,816 3,023
------------ ------------
Total current assets................................................................... 142,627 200,573
Properties...................................................................................... 17,839 24,463
Unamortized costs in excess of net assets of acquired companies................................. 119,356 116,635
Trademarks...................................................................................... 244,181 239,102
Other intangible assets......................................................................... 31,122 32,898
Deferred costs and other assets................................................................. 15,780 14,570
------------ ------------
$ 570,905 $ 628,241
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt...........................................................$ 32,301 $ 31,907
Accounts payable ........................................................................... 28,063 48,013
Accrued expenses ........................................................................... 54,978 61,697
Due to Triarc Companies, Inc. and affiliates ............................................... 30,064 63,664
------------ ------------
Total current liabilities.............................................................. 145,406 205,281
Long-term debt.................................................................................. 646,009 635,276
Deferred income taxes........................................................................... 61,337 61,337
Other liabilities............................................................................... 5,615 5,859
Redeemable preferred stock...................................................................... 96,320 100,962
Stockholders' deficit:
Common stock................................................................................ 850 850
Additional paid-in capital.................................................................. -- 1,319
Accumulated deficit......................................................................... (72,197) (70,702)
Receivable from parent...................................................................... (312,417) (311,832)
Accumulated other comprehensive deficit..................................................... (18) (109)
------------ ------------
Total stockholders' deficit........................................................... (383,782) (380,474)
------------ ------------
$ 570,905 $ 628,241
============ ============
(A) Derived from the audited consolidated financial statements as of January 2, 2000.
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SNAPPLE BEVERAGE GROUP, INC. AND SUBSIDIARIES
(Formerly TRIARC BEVERAGE HOLDINGS CORP.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Six months ended
----------------------------- ---------------------------
July 4, July 2, July 4, July 2,
1999 2000 1999 2000
---- ---- ---- ----
(In thousands)
(Unaudited)
<S> <C> <C> <C> <C>
Net revenues............................................$ 196,370 $ 208,780 $ 325,532 $ 349,411
------------ ------------ ----------- ------------
Costs and expenses:
Cost of sales, excluding depreciation and
amortization related to sales of $396,000,
$448,000, $763,000 and $853,000................... 112,881 120,278 187,639 202,744
Advertising, selling and distribution............... 49,714 50,480 83,277 83,069
General and administrative ......................... 10,301 12,026 19,986 23,547
Depreciation and amortization, excluding
amortization of deferred financing costs.......... 5,662 6,459 11,047 12,743
Capital structure reorganization related
charges........................................... 750 204 3,000 408
------------ ------------ ----------- ------------
179,308 189,447 304,949 322,511
------------ ------------ ----------- ------------
Operating profit ................................. 17,062 19,333 20,583 26,900
Interest expense........................................ (8,899) (10,518) (16,656) (20,478)
Other income, net....................................... 298 275 696 423
------------ ------------ ----------- ------------
Income before income taxes and
extraordinary charge........................... 8,461 9,090 4,623 6,845
Provision for income taxes.............................. (3,485) (4,090) (2,080) (3,080)
------------ ------------ ----------- ------------
Income before extraordinary charge................ 4,976 5,000 2,543 3,765
Extraordinary charge.................................... -- -- (4,876) --
------------ ------------ ----------- -----------
Net income (loss).................................$ 4,976 $ 5,000 $ (2,333) $ 3,765
============ ============ =========== ============
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SNAPPLE BEVERAGE GROUP, INC. AND SUBSIDIARIES
(Formerly TRIARC BEVERAGE HOLDINGS CORP.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
---------------------------
July 4, July 2,
1999 2000
---- ----
(In thousands)
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) . . .................................................................$ (2,333) $ 3,765
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization of costs in excess of net assets of acquired companies,
trademarks and certain other items............................................. 8,092 9,579
Depreciation and amortization of properties....................................... 2,955 3,164
Amortization of deferred financing costs.......................................... 1,034 1,026
Write-off of unamortized deferred financing costs and interest rate cap
agreement costs................................................................ 7,990 --
Capital structure reorganization related charges.................................. 3,000 408
Provision for doubtful accounts................................................... 927 289
Provision for deferred income taxes............................................... 1,592 --
Other, net........................................................................ 308 111
Changes in operating assets and liabilities:
Increase in receivables........................................................ (41,363) (37,954)
Increase in inventories........................................................ (21,845) (24,001)
Increase in prepaid expenses and other current assets.......................... (174) (124)
Increase in accounts payable and accrued expenses.............................. 19,530 27,023
Increase in due to Triarc Companies, Inc. and affiliates....................... 14,996 1,470
---------- ----------
Net cash used in operating activities..................................... (5,291) (15,244)
---------- ----------
Cash flows from investing activities:
Capital expenditures................................................................... (3,078) (9,630)
Business acquisitions.................................................................. (17,376) (177)
Other ................................................................................. 121 (274)
---------- ----------
Net cash used in investing activities..................................... (20,333) (10,081)
---------- ----------
Cash flows from financing activities:
Repayments of long-term debt........................................................... (287,395) (33,451)
Proceeds from long-term debt........................................................... 378,700 22,324
Advances from affiliate................................................................ -- 32,125
Dividends ............................................................................. (82,837) --
Deferred financing costs............................................................... (16,822) --
Reimbursement of estimated deferred financing costs from affiliate..................... 3,410 --
---------- ----------
Net cash provided by (used in) financing activities....................... (4,944) 20,998
---------- ----------
Net decrease in cash and cash equivalents................................................. (30,568) (4,327)
Cash and cash equivalents at beginning of period.......................................... 39,578 22,108
---------- ----------
Cash and cash equivalents at end of period................................................$ 9,010 $ 17,781
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
SNAPPLE BEVERAGE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 2, 2000
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of
Snapple Beverage Group, Inc. ("Snapple Beverage Group," and, together with its
subsidiaries, the "Company"), formerly Triarc Beverage Holdings Corp., a 99.9%
owned subsidiary of Triarc Consumer Products Group, LLC ("Triarc Consumer
Products Group") and an indirect 99.9% owned subsidiary of Triarc Companies,
Inc. ("Triarc"), have been prepared in accordance with Rule 10-01 of Regulation
S-X promulgated by the Securities and Exchange Commission (the "SEC") and,
therefore, do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations and cash flows in
conformity with generally accepted accounting principles. In the opinion of the
Company, however, the accompanying condensed consolidated financial statements
contain all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the Company's financial position as of January 2,
2000 and July 2, 2000, its results of operations for the three-month and
six-month periods ended July 4, 1999 and July 2, 2000 and its cash flows for the
six-month periods ended July 4, 1999 and July 2, 2000 (see below). This
information should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the fiscal year ended January 2, 2000 (the "Form 10-K"). Certain
statements in these notes to condensed consolidated financial statements
constitute "forward-looking statements" under the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. See Part II - "Other Information."
Effective May 17, 1999 Triarc Consumer Products Group contributed the stock
of Stewart's Beverages, Inc. ("Stewart's") to Snapple Beverage Group. The
consolidated results of operations and cash flows of Stewart's and its
subsidiaries have been consolidated with Snapple Beverage Group since Stewart's
was under the common control of Triarc, and, accordingly, are presented on an
"as if pooling" basis prior to the capital contribution of Stewart's capital
stock to Snapple Beverage Group.
The Company reports on a fiscal year basis consisting of 52 or 53 weeks
ending on the Sunday closest to December 31. In accordance therewith, the
Company's first half of 1999 commenced on January 4, 1999 and ended on July 4,
1999, with its second quarter commencing on April 5, 1999 and the Company's
first half of 2000 commenced on January 3, 2000 and ended on July 2, 2000, with
its second quarter commencing on April 3, 2000. For purposes of these condensed
consolidated financial statements, the periods (1) from January 4, 1999 to July
4, 1999 and April 5, 1999 to July 4, 1999 are referred to below as the six-month
and three-month periods ended July 4, 1999, respectively, and (2) from January
3, 2000 to July 2, 2000 and April 3, 2000 to July 2, 2000 are referred to below
as the six-month and three-month periods ended July 2, 2000, respectively.
(2) Inventories
The following is a summary of the components of inventories (in thousands):
January 2, July 2,
2000 2000
---- ----
Raw materials...........................$ 17,540 $ 25,090
Finished goods.......................... 38,308 54,949
---------- ----------
$ 55,848 $ 80,039
========== ==========
(3) Capital Structure Reorganization Related Charges
The capital structure reorganization related charges of $750,000 and
$3,000,000 recognized during the three-month and six-month periods ended July 4,
1999, respectively, and $204,000 and $408,000 recognized during the three-month
and six-month periods ended July 2, 2000, respectively, resulted from equitable
adjustments made in 1999 to the terms of then outstanding options under the
Company's stock option plan (the "Snapple Beverage Plan") to adjust for the
effects of net distributions of $91,342,000, principally consisting of transfers
of cash and deferred tax assets, from Snapple Beverage Group to Triarc,
partially offset by the effect of the contribution of Stewart's to Snapple
Beverage Group effective May 17, 1999.
The Snapple Beverage Plan provides for an equitable adjustment of options
in the event of a recapitalization or similar event. As a result of these net
distributions and the terms of the Snapple Beverage Plan, the exercise prices of
the options granted in 1997 and 1998 were equitably adjusted in 1999 from
$147.30 and $191.00 per share, respectively, to $107.05 and $138.83 per share,
respectively, and a cash payment (the "Cash Payment") of $51.34 and $39.40 per
share, respectively, is due to the option holder following the exercise of the
stock options and either (1) the sale by the option holder to the Company of
shares of the Company's common stock received upon the exercise of the stock
options or (2) the consummation of an initial public offering of the Company's
common stock (see Note 7). The Company is responsible for the Cash Payment to
its employees who are option holders and Triarc is responsible for the Cash
Payment to its employees who are option holders either directly or through
reimbursement to the Company. The Company has accounted for the equitable
adjustment in accordance with the intrinsic value method. Compensation expense
is being recognized for the cash to be paid by the Company to its option holders
in connection with the exercise of the stock options ratably over the vesting
period of the stock options. No compensation expense has been or will be
recognized for the changes in the exercise prices of the outstanding options
because such modifications to the options did not create a new measurement date
under the intrinsic value method.
(4) Comprehensive Income (Loss)
The following is a summary of the components of comprehensive income
(loss) (in thousands):
<TABLE>
<CAPTION>
Three months ended Six months ended
------------------------- -------------------------
July 4, July 2, July 4, July 2,
1999 2000 1999 2000
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) .......................................$ 4,976 $ 5,000 $ (2,333) $ 3,765
Net change in currency translation adjustment............ (13) (77) (81) (91)
---------- ---------- ----------- ----------
Comprehensive income (loss)...........................$ 4,963 $ 4,923 $ (2,414) $ 3,674
========== ========== =========== ==========
</TABLE>
(5) Transactions with Related Parties
On March 31, 2000 Triarc acquired certain assets, principally distribution
rights, of California Beverage Company ("California Beverage"), a distributor of
the Company's premium beverage products in the City and County of San Francisco,
California, for cash of $1,620,000 including expenses of $20,000. On April 19,
2000 Triarc acquired certain inventories of California Beverage for cash of
$146,000. Triarc contributed the assets of California Beverage it acquired as a
capital contribution to Triarc Consumer Products Group, which in turn
contributed them to the Company.
On May 16, 2000 Triarc acquired certain assets, principally distribution
rights, of Northern Glacier Ltd. ("Northern Glacier"), a distributor of the
Company's Mistic premium beverage products in five counties in New Jersey, who
will continue as the Company's sub-distributor in two of those counties, for an
aggregate purchase price of $2,200,000, subject to post-closing adjustments. Of
the purchase price, $1,870,000 was paid through offset of accounts receivable
and a note receivable otherwise owed to the Company by the seller, which were
reimbursed to the Company by Triarc, $275,000 is to be paid by Triarc or the
Company to the seller following the conclusion of the seller's
sub-distributorship arrangement and $55,000 was paid by Triarc in cash. Triarc
contributed the acquired assets of Northern Glacier, to the extent paid for by
Triarc, as a capital contribution to Triarc Consumer Products Group, which in
turn contributed them to the Company. Such assets paid for by Triarc excluded
those related to the $275,000 deferred payment, the liability for which was
recognized by the Company.
During the six months ended July 2, 2000 the Company was advanced an
aggregate $32,125,000 on a non-interest bearing basis by RC/Arby's Corporation
("RC/Arby's"), a wholly-owned subsidiary of Triarc Consumer Products Group. Such
amount is included in "Due to Triarc Companies, Inc. and affiliates" at July 2,
2000. Subsequent to July 2, 2000, the Company repaid $7,800,000 of such
advances.
The Company continues to have certain related party transactions with
Triarc of the same nature and general magnitude as those described in Note 17 to
the consolidated financial statements in the Form 10-K. In addition, see Note 3
above for discussion of another related party transaction.
(6) Legal Matters
The Company is involved in litigation and claims incidental to its
business. The Company has reserves for legal matters aggregating $375,000 as of
July 2, 2000. Although the outcome of such matters cannot be predicted with
certainty and some of these may be disposed of unfavorably to the Company, based
on currently available information and given the Company's aforementioned
reserves, the Company does not believe that such legal matters will have a
material adverse effect on its consolidated financial position or results of
operations.
(7) Snapple Beverage Group Initial Public Offering
Snapple Beverage Group, as restructured (see below), currently intends to
issue an estimated $100,000,000 of its common stock in an initial public
offering (the "Offering"). These shares will be registered pursuant to a
registration statement on Form S-1 that has been filed with the SEC but which
has not yet been declared effective (see Part II. Item 5. "Other Information").
Assuming the successful completion of the Offering, the Company will be
restructured (the "Restructuring"). In accordance with the restructuring
transactions, Snapple Beverage Group will be transferred to RC/Arby's, RC/Arby's
(parent company) and the restaurant franchising business will then be
effectively distributed from Triarc Consumer Products Group to Triarc and, as a
result of a series of transactions, Triarc Consumer Products Group will then
effectively merge into Snapple Beverage Group.
Also assuming the successful completion of the Offering, Snapple Beverage
Group will receive an estimated $178,000,000 capital contribution from
RC/Arby's, representing the net proceeds of a financing of its restaurant
business. Snapple Beverage Group, as restructured, is also expected to enter
into a new credit facility consisting of up to $195,000,000 of term loans and a
$50,000,000 revolving credit facility. No borrowings under the new revolving
credit facility are expected to occur at the time of the completion of the
Offering. The net proceeds of the Offering and the term loan borrowings under
the new credit facility, together with all of the cash and cash equivalents of
RC/Arby's and the restaurant business and all but $2,000,000 of the cash and
cash equivalents of Snapple Beverage Group, as restructured, are expected to be
used to (1) repay prior to maturity all outstanding borrowings under the
existing credit facility of Snapple, Mistic and Stewart's, as well as two other
subsidiaries of Triarc Consumer Products Group and accrued interest thereon and
(2) pay (a) prepayment penalties resulting from the prepayment of certain of the
outstanding term loans and (b) fees and expenses relating to the Offering and
the consummation of the new credit facility. The early extinguishment of the
borrowings under the existing credit facility will result in an extraordinary
charge at the time the borrowings under the existing credit facility are repaid
prior to maturity for the write-off of previously unamortized deferred financing
costs and the payment of the aforementioned prepayment penalties, less income
tax benefit. The Company's portion of the extraordinary charge as of July 2,
2000, would have amounted to $9,141,000.
(8) Condensed Consolidating Financial Information
The following condensed consolidating financial statements of the Company
depict, in separate columns, Snapple Beverage Group as the parent company and a
co-issuer of the 10 1/4% senior subordinated notes due 2009, those subsidiaries
which are guarantors, those subsidiaries which are non-guarantors, elimination
adjustments and the consolidated total.
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING BALANCE SHEETS
January 2, 2000
---------------------------------------------------------------------
Parent Non-
Company Guarantors Guarantors Eliminations Consolidated
------- ---------- ---------- ------------ ------------
(In thousands)
ASSETS
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents.................... $ 92 $ 21,597 $ 419 $ -- $ 22,108
Receivables.................................. -- 49,671 908 -- 50,579
Inventories.................................. -- 55,267 581 -- 55,848
Deferred income tax benefit.................. -- 11,276 -- -- 11,276
Prepaid expenses and other
current assets............................. -- 2,806 10 -- 2,816
----------- ----------- ---------- ----------- -----------
Total current assets.................... 92 140,617 1,918 -- 142,627
Investment in subsidiaries....................... 24,900 2,013 -- (26,913) --
Intercompany receivables......................... 7,546 7,666 -- (15,215) --
Properties....................................... -- 17,101 738 -- 17,839
Unamortized costs in excess of net
assets of acquired companies................. -- 119,356 -- -- 119,356
Trademarks....................................... -- 244,181 -- -- 244,181
Other intangible assets.......................... -- 31,122 -- -- 31,122
Deferred costs and other assets.................. -- 15,780 -- -- 15,780
----------- ----------- ---------- ----------- -----------
$ 32,541 $ 577,836 $ 2,656 $ (42,128) $ 570,905
=========== =========== ========== =========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt............ $ -- $ 32,301 $ -- $ -- $ 32,301
Accounts payable............................. -- 27,699 364 -- 28,063
Accrued expenses............................. 12,417 42,361 200 -- 54,978
Due to Triarc Companies, Inc. and
affiliates................................. -- 30,064 -- -- 30,064
----------- ----------- ---------- ----------- -----------
Total current liabilities............... 12,417 132,425 564 -- 145,406
Long-term debt................................... 300,000 346,009 -- -- 646,009
Intercompany payables............................ 7,587 7,550 79 (15,215) --
Deferred income taxes............................ -- 61,337 -- -- 61,337
Other liabilities................................ -- 5,615 -- -- 5,615
Redeemable preferred stock....................... 96,320 -- -- -- 96,320
Stockholders' equity (deficit):
Common stock................................. 850 3 -- (3) 850
Additional paid-in capital................... -- 43,744 2,185 (45,929) --
Accumulated deficit.......................... (72,197) (18,829) (154) 18,983 (72,197)
Receivable from Parent....................... (312,417) -- -- -- (312,417)
Accumulated other comprehensive
deficit.................................... (18) (18) (18) 36 (18)
----------- ----------- ---------- ----------- -----------
Total stockholders' equity (deficit).... (383,782) 24,900 2,013 (26,913) (383,782)
----------- ----------- ---------- ----------- -----------
$ 32,541 $ 577,836 $ 2,656 $ (42,128) $ 570,905
=========== =========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
July 2, 2000
---------------------------------------------------------------------
Parent Non-
Company Guarantors Guarantors Eliminations Consolidated
------- ---------- ---------- ------------ ------------
(In thousands)
ASSETS
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents.................... $ 92 $ 17,159 $ 530 $ -- $ 17,781
Receivables.................................. -- 86,782 1,672 -- 88,454
Inventories.................................. -- 79,477 562 -- 80,039
Deferred income tax benefit.................. -- 11,276 -- -- 11,276
Prepaid expenses and other
current assets............................. -- 2,897 126 -- 3,023
----------- ----------- ---------- ----------- -----------
Total current assets.................... 92 197,591 2,890 -- 200,573
Investment in subsidiaries....................... 32,264 1,787 -- (34,051) --
Intercompany receivables......................... 3,337 233 -- (3,570) --
Properties....................................... -- 23,713 750 -- 24,463
Unamortized costs in excess of net
assets of acquired companies................. -- 116,635 -- -- 116,635
Trademarks....................................... -- 239,102 -- -- 239,102
Other intangible assets.......................... -- 32,898 -- -- 32,898
Deferred costs and other assets.................. -- 14,570 -- -- 14,570
----------- ----------- ---------- ----------- -----------
$ 35,693 $ 626,529 $ 3,640 $ (37,621) $ 628,241
=========== =========== ========== =========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt............ $ -- $ 31,907 $ -- $ -- $ 31,907
Accounts payable............................. -- 46,835 1,178 -- 48,013
Accrued expenses............................. 11,832 49,423 442 -- 61,697
Due to Triarc Companies, Inc. and
affiliates................................. 3,373 60,291 -- -- 63,664
----------- ----------- ---------- ----------- -----------
Total current liabilities............... 15,205 188,456 1,620 -- 205,281
Long-term debt................................... 300,000 335,276 -- -- 635,276
Intercompany payables............................ -- 3,337 233 (3,570) --
Deferred income taxes............................ -- 61,337 -- -- 61,337
Other liabilities................................ -- 5,859 -- -- 5,859
Redeemable preferred stock....................... 100,962 -- -- -- 100,962
Stockholders' equity (deficit):
Common stock................................. 850 3 -- (3) 850
Additional paid-in capital................... 1,319 47,434 2,185 (49,619) 1,319
Accumulated deficit.......................... (70,702) (15,064) (289) 15,353 (70,702)
Receivable from Parent....................... (311,832) -- -- -- (311,832)
Accumulated other comprehensive
deficit.................................... (109) (109) (109) 218 (109)
----------- ----------- ---------- ----------- -----------
Total stockholders' equity (deficit).... (380,474) 32,264 1,787 (34,051) (380,474)
----------- ----------- ---------- ----------- -----------
$ 35,693 $ 626,529 $ 3,640 $ (37,621) $ 628,241
=========== =========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
Six Months Ended July 4, 1999
---------------------------------------------------------------------
Parent Non-
Company Guarantors Guarantors Eliminations Consolidated
------- ---------- ---------- ------------ ------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Net revenues..................................... $ -- $ 323,003 $ 2,529 $ -- $ 325,532
----------- ----------- ---------- ----------- -----------
Costs and expenses:
Cost of sales, excluding depreciation
and amortization related to sales.......... -- 185,896 1,743 -- 187,639
Advertising, selling and distribution........ -- 82,863 414 -- 83,277
General and administrative................... -- 19,850 136 -- 19,986
Depreciation and amortization,
excluding amortization of deferred
financing costs............................ -- 11,029 18 -- 11,047
Capital structure reorganization related
charges.................................... -- 3,000 -- -- 3,000
----------- ----------- ---------- ----------- -----------
-- 302,638 2,311 -- 304,949
----------- ----------- ---------- ----------- -----------
Operating profit ....................... -- 20,365 218 -- 20,583
Interest expense................................. -- (16,656) -- -- (16,656)
Other income, net................................ -- 692 4 -- 696
Equity in net earnings of subsidiaries before
extraordinary charge......................... 2,543 222 -- (2,765) --
----------- ----------- ---------- ----------- ----------
Income before income taxes
and extraordinary charge............ 2,543 4,623 222 (2,765) 4,623
Provision for income taxes....................... -- (2,080) -- -- (2,080)
----------- ----------- ---------- ----------- -----------
Income before extraordinary
charge.............................. 2,543 2,543 222 (2,765) 2,543
Extraordinary charge............................. (4,876) (4,876) -- 4,876 (4,876)
----------- ----------- ---------- ----------- -----------
Net income (loss)....................... $ (2,333) $ (2,333) $ 222 $ 2,111 $ (2,333)
=========== =========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended July 2, 2000
---------------------------------------------------------------------
Parent Non-
Company Guarantors Guarantors Eliminations Consolidated
------- ---------- ---------- ------------ ------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Net revenues..................................... $ -- $ 346,940 $ 2,471 $ -- $ 349,411
----------- ----------- ---------- ----------- -----------
Costs and expenses:
Cost of sales, excluding depreciation
and amortization related to sales.......... -- 200,909 1,835 -- 202,744
Advertising, selling and distribution........ -- 82,553 516 -- 83,069
General and administrative................... -- 23,419 128 -- 23,547
Depreciation and amortization,
excluding amortization of deferred
financing costs............................ -- 12,742 1 -- 12,743
Capital structure reorganization related
charges.................................... -- 408 -- -- 408
----------- ----------- ---------- ----------- -----------
-- 320,031 2,480 -- 322,511
----------- ----------- ---------- ----------- -----------
Operating profit (loss) ................ -- 26,909 (9) -- 26,900
Interest expense................................. -- (20,478) -- -- (20,478)
Other income (expense), net...................... -- 549 (126) -- 423
Equity in net earnings (losses) of subsidiaries 3,765 (135) -- (3,630) --
----------- -------- -------- ----------- -----------
Income (loss) before income taxes....... 3,765 6,845 (135) (3,630) 6,845
Provision for income taxes....................... -- (3,080) -- -- (3,080)
----------- ----------- ---------- ----------- -----------
Net income (loss)....................... $ 3,765 $ 3,765 $ (135) $ (3,630) $ 3,765
=========== =========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Six Months Ended July 4, 1999
--------------------------------------------------------------------
Parent Non-
Company Guarantors Guarantors Eliminations Consolidated
------- ---------- ---------- ------------ ------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Net cash used in operating activities............ $ -- $ (4,763) $ (528) $ -- $ (5,291)
----------- ----------- ---------- ----------- -----------
Cash flows from investing activities:
Business acquisitions........................ -- (17,376) -- -- (17,376)
Capital expenditures......................... -- (3,076) (2) -- (3,078)
Other........................................ -- 121 -- -- 121
----------- ----------- ---------- ----------- -----------
Net cash used in investing activities............ -- (20,331) (2) -- (20,333)
----------- ----------- ---------- ----------- -----------
Cash flows from financing activities:
Repayments of long-term debt................. -- (287,395) -- -- (287,395)
Proceeds from long-term debt................. -- 378,700 -- -- 378,700
Dividends.................................... -- (82,837) -- -- (82,837)
Deferred financing costs..................... -- (16,822) -- -- (16,822)
Reimbursement of estimated deferred
financing costs from affiliate............. -- 3,410 -- -- 3,410
----------- ----------- ---------- ----------- -----------
Net cash used in financing activities............ -- (4,944) -- -- (4,944)
----------- ----------- ---------- ----------- -----------
Net decrease in cash and cash
equivalents.................................. -- (30,038) (530) -- (30,568)
Cash and cash equivalents at beginning
of period.................................... 1 39,046 531 -- 39,578
----------- ----------- ---------- ----------- -----------
Cash and cash equivalents at end of period....... $ 1 $ 9,008 $ 1 $ -- $ 9,010
=========== =========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended July 2, 2000
-------------------------------------------------------------------
Parent Non-
Company Guarantors Guarantors Eliminations Consolidated
------- ---------- ---------- ------------ ------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in) operating
activities..................................... $ -- $ (15,367) $ 123 $ -- $ (15,244)
----------- ----------- ---------- ----------- -----------
Cash flows from investing activities:
Capital expenditures......................... -- (9,618) (12) -- (9,630)
Business acquisitions........................ -- (177) -- -- (177)
Other........................................ -- (274) -- -- (274)
----------- ----------- ---------- ----------- -----------
Net cash used in investing activities............ -- (10,069) (12) -- (10,081)
----------- ----------- ---------- ----------- -----------
Cash flows from financing activities:
Repayments of long-term debt................. -- (33,451) -- -- (33,451)
Proceeds from long-term debt................. -- 22,324 -- -- 22,324
Advances from affiliate...................... -- 32,125 -- -- 32,125
----------- ----------- ---------- ----------- -----------
Net cash provided by financing activities........ -- 20,998 -- -- 20,998
----------- ----------- ---------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents.................................. -- (4,438) 111 -- (4,327)
Cash and cash equivalents at beginning
of period.................................... 92 21,597 419 -- 22,108
----------- ----------- ---------- ----------- -----------
Cash and cash equivalents at end of period....... $ 92 $ 17,159 $ 530 $ -- $ 17,781
=========== =========== ========== =========== ===========
</TABLE>
<PAGE>
SNAPPLE BEVERAGE GROUP, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Introduction
This "Management's Discussion and Analysis of Financial Condition and
Results of Operations" should be read in conjunction with the accompanying
condensed consolidated financial statements and "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the Annual
Report on Form 10-K for the fiscal year ended January 2, 2000 of Snapple
Beverage Group, Inc. (formerly Triarc Beverage Holdings Corp.), a 99.9% owned
subsidiary of Triarc Consumer Products Group, LLC and an indirect 99.9% owned
subsidiary of Triarc Companies, Inc. When we refer to "Triarc," we mean Triarc
Companies, Inc. Effective May 17, 1999 Triarc Consumer Products Group
contributed the stock of Stewart's Beverages, Inc. to Snapple Beverage Group.
Snapple Beverage Group is the parent of Snapple Beverage Corp., Mistic Brands,
Inc. and, effective May 17, 1999, Stewart's. When we refer to "Snapple," we mean
Snapple Beverage Corp. This "Management's Discussion and Analysis of Financial
Condition and Results of Operations" reflects the consolidated results of
operations of Stewart's and its subsidiaries consolidated with Snapple Beverage
Group since these companies were under the common control of Triarc and,
accordingly, are presented on an "as-if pooling" basis prior to the contribution
of Stewart's stock to Snapple Beverage Group.
The recent trends affecting our business are described in Item 7 of our
Form 10-K.
Certain statements under this caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" constitute
"forward-looking statements" under the Private Securities Litigation Reform Act.
Such forward-looking statements involve risks, uncertainties and other factors
which may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. For these statements, we claim the
protection of the safe harbor for forward-looking statements contained in the
Reform Act. See "Part II - Other Information."
Our fiscal year consists of 52 or 53 weeks ending on the Sunday closest to
December 31. Our first half of fiscal 1999 commenced on January 4, 1999 and
ended on July 4, 1999, with our second quarter commencing on April 5, 1999 and
our first half of fiscal 2000 commenced on January 3, 2000 and ended on July 2,
2000, with our second quarter commencing on April 3, 2000. When we refer to the
"six months ended July 4, 1999," or the "1999 first half," and the "three months
ended July 4, 1999," or the "1999 second quarter," we mean the periods from
January 4, 1999 to July 4, 1999 and April 5, 1999 to July 4, 1999; and when we
refer to the "six months ended July 2, 2000," or the "2000 first half," and the
"three months ended July 2, 2000," or the "2000 second quarter," we mean the
periods from January 3, 2000 to July 2, 2000 and April 3, 2000 to July 2, 2000.
Results of Operations
Six Months Ended July 2, 2000 Compared with Six Months Ended July 4, 1999
Revenues
Our revenues increased $23.9 million, or 7.3%, to $349.4 million for the
six months ended July 2, 2000 from $325.5 million for the six months ended July
4, 1999. The increase, which relates entirely to sales of finished product,
reflects higher volume and, to a lesser extent, higher average selling prices in
the first half of 2000. The increase in volume principally reflects (1) higher
sales in the 2000 first half of Snapple Elements(TM), a new product platform of
herbally enhanced drinks introduced in April 1999, (2) 2000 sales of Mistic
Zotics(TM) and Stewart's "S"(TM) line of diet premium beverages introduced in
April 2000 and March 2000, respectively, (3) higher sales of diet teas and other
diet beverages and juice drinks, (4) higher sales of Stewart's products as a
result of increased distribution in existing and new markets and (5) increased
cases sold to retailers through Snapple Distributors of Long Island, Inc. and
Millrose Distributors, Inc. principally reflecting the effect of an increased
focus on our products as a result of our ownership of these distributors since
their acquisitions on January 2, 2000 and February 25, 1999, respectively. The
effect with respect to Millrose was for the full first half in 2000 compared
with only the period from February 26 to July 4 in the 1999 first half. Those
increases were partially offset by lower sales of WhipperSnapple(TM) in the 2000
first half. The higher average selling prices principally reflect (1) the effect
of the Long Island Snapple and Millrose acquisitions whereby we now sell product
at higher prices directly to retailers subsequent to these acquisitions compared
with sales at lower prices to distributors such as Long Island Snapple and
Millrose and, to a much lesser extent, (2) the full period effect in the 2000
first half of selective price increases in April 1999.
Gross Profit
We calculate gross profit as total revenues less (1) costs of sales,
excluding depreciation and amortization and (2) that portion of depreciation and
amortization related to sales. Our gross profit increased $8.7 million, or 6.3%,
to $145.8 million for the six months ended July 2, 2000 from $137.1 million for
the six months ended July 4, 1999. This increase was principally due to the
effect of the higher sales volumes discussed above, with our gross margins,
which we compute as gross profit divided by total revenues, unchanged at 42%
during both the 2000 and 1999 first halves. The positive effect on gross margins
from (1) the effect of the higher selling prices resulting from the Millrose
acquisition for the full 2000 first half compared with only a portion of the
1999 first half and the Long Island Snapple acquisition and (2) the selective
price increases, both as referred to above, were fully offset by the negative
effects of (1) a shift in product mix to lower-margin products in the 2000 first
half, (2) increased freight and handling costs in the 2000 first half as a
result of beginning the use of warehousing for our finished products during the
second half of 1999, (3) $1.1 million of increased provisions for obsolete
inventory resulting from higher levels of raw materials and finished goods
inventories that passed their shelf lives during the 2000 first half and that
were not timely used and (4) increased production costs in the 2000 first half
resulting from higher fees charged to us by our co-packers.
Advertising, Selling and Distribution Expenses
Our advertising, selling and distribution expenses decreased $0.2 million,
or 0.2%, to $83.1 million for the six months ended July 2, 2000 from $83.3
million for the six months ended July 4, 1999. The decrease in advertising,
selling and distribution expenses was principally due to an overall decrease in
promotional spending principally reflecting a decrease in discounts offered to
distributors participating in our cold drink equipment purchasing program and a
shift to shorter, less costly radio advertising as well as a shift from more
expensive network to less costly cable television advertising, partially offset
by (1) higher employee compensation and related benefit costs reflecting an
increase in the number of sales and distribution employees and (2) higher costs
resulting from our acquisition of certain assets, principally distribution
rights, of California Beverage Company, a distributor of our premium beverage
products in the city and county of San Francisco, California, in March 2000.
General and Administrative Expenses
Our general and administrative expenses increased $3.6 million, or 17.8%,
to $23.6 million for the six months ended July 2, 2000 from $20.0 million for
the six months ended July 4, 1999. The increase in general and administrative
expenses reflects (1) increased expenses as a result of the full effect in the
2000 first half of the Millrose acquisition and the effect of the Long Island
Snapple acquisition and (2) increases in compensation and related benefit costs
primarily due to an increased number of administrative employees.
Depreciation and Amortization, Excluding Amortization of Deferred Financing
Costs
Our depreciation and amortization, excluding amortization of deferred
financing costs, increased $1.7 million, or 15.4%, to $12.7 million for the six
months ended July 2, 2000 from $11.0 million for the six months ended July 4,
1999. The increase in depreciation and amortization principally reflects an
increase in amortization of costs in excess of net assets acquired, which we
refer to as goodwill, trademarks and other intangibles, as a result of the full
effect in the 2000 half of the Millrose acquisition, the effect of the Long
Island Snapple acquisition and, to a much lesser extent, the California Beverage
acquisition.
Capital Structure Reorganization Related Charges
The capital structure reorganization related charges of $0.4 million for
the six months ended July 2, 2000 and $3.0 million for the six months ended July
4, 1999 reflect equitable adjustments that were made to the terms of outstanding
options under our stock option plan.
The stock option plan provides for an equitable adjustment of options in
the event of a recapitalization or similar event. The exercise prices of then
outstanding options under our stock option plan were equitably adjusted in 1999
to adjust for the effects of net distributions of $91.3 million, principally
consisting of transfers of cash and deferred tax assets from us to Triarc
partially offset by the effect of the contribution of Stewart's to us effective
May 17, 1999.
The exercise prices of the options granted in 1997 were equitably adjusted
in 1999 from $147.30 per share to $107.05 per share and the exercise prices of
the options granted in 1998 were equitably adjusted in 1999 from $191.00 per
share to $138.83 per share. A cash payment of $51.34 per share for the options
granted in 1997 and $39.40 per share for the options granted in 1998 is due to
the option holder following the exercise of the stock options and either (1) the
sale by the option holder to us of shares of our common stock received upon the
exercise of the stock options or (2) the consummation of an initial public
offering of our common stock (see below under "Initial Public Offering"). We are
responsible for the cash payment to our employees who are option holders and
Triarc is responsible for the cash payment to its employees who are option
holders either directly or through reimbursement to us.
We have accounted for the equitable adjustment in accordance with the
intrinsic value method. Commencing with the first quarter of 1999 we are
recognizing compensation expense for the aggregate maximum $4.1 million of cash
to be paid by us in connection with the exercise of the stock options, net of
credits for forfeitures of non-vested stock options of terminated employees,
assuming all remaining stock options held by our employees either have vested or
will become vested, ratably over the vesting period.
The initial charge relating to these equitable adjustments was recorded in
the 1999 first quarter and, therefore, the charge of $3.0 million recognized for
the six months ended July 4, 1999 includes the portion of the aggregate cash to
be paid by us to the extent of the vesting of the options held by our employees
through July 4, 1999. The $0.4 million charge recognized for the six months
ended July 2, 2000 represents the portion of the cash to be paid by us in
connection with the exercise of the stock options to the extent of the vesting
of the options held by our employees during that period.
We expect to recognize additional pre-tax charges relating to this
equitable adjustment of $0.2 million during the second half of 2000 and $0.2
million in 2001 as the affected stock options held by our employees continue to
vest. No compensation expense has been or will be recognized for the changes in
the exercise prices of the outstanding options because those modifications to
the options did not create a new measurement date under the intrinsic value
method.
Interest Expense
Interest expense increased $3.8 million, or 22.9%, to $20.5 million for
the six months ended July 2, 2000 from $16.7 million for the six months ended
July 4, 1999. This increase reflects higher average interest rates in the 2000
period and, to a lesser extent, higher average levels of debt during the 2000
first half due to the full six month effect of increases from a February 25,
1999 debt refinancing. Such refinancing consisted of $378.7 million, net of
$96.3 million transferred to Royal Crown Company, Inc., an affiliate of ours,
borrowed under a senior bank credit facility and the repayment of $284.3 million
under our former credit facility.
Other Income, Net
Other income, net decreased $0.3 million, or 39.2%, to $0.4 million for the
six months ended July 2, 2000 from $0.7 million for the six months ended July 4,
1999. This decrease was principally due to a $0.2 million decrease in interest
income on cash equivalents in the 2000 first half as a result of lower average
amounts of cash equivalents in the 2000 first half compared with the 1999 first
half.
Income Taxes
Our provision for income taxes represented rates of 45% for both the six
months ended July 2, 2000 and the six months ended July 4, 1999. These effective
rates are higher than the statutory rate principally due to the effect of the
amortization of non-deductible goodwill and the provision for state income
taxes.
Extraordinary Charge
Our extraordinary charge of $4.9 million for the six months ended July 4,
1999 resulted from the early extinguishment of borrowings under our former
credit facility and consisted of the write-off of previously unamortized (1)
deferred financing costs of $7.9 million and (2) interest rate cap agreement
costs of $0.1 million, less income tax benefit of $3.1 million.
Three Months Ended July 2, 2000 Compared with Three Months Ended July 4, 1999
Revenues
Our revenues increased $12.4 million, or 6.3%, to $208.8 million for the
three months ended July 2, 2000 from $196.4 million for the three months ended
July 4, 1999. The increase, which relates entirely to sales of finished product,
reflects higher volume and, to a lesser extent, higher average selling prices in
the second quarter of 2000. The increase in volume principally reflects (1)
higher sales of Snapple Elements which was introduced in April 1999, (2) 2000
sales of Mistic Zotics and Stewart's "S" line of diet premium beverages,
introduced in April and March 2000, respectively, (3) higher sales of diet teas
and other diet beverages and juice drinks and (4) increased cases sold to
retailers through Long Island Snapple principally reflecting an increased focus
on our products as a result of our ownership of this distributor since January
2, 2000. Those increases were partially offset by lower sales of WhipperSnapple
in the 2000 second quarter. The higher average selling prices reflect the effect
of the higher selling prices in connection with the Long Island Snapple
acquisition whereby we now sell directly to retailers rather than to Long Island
Snapple as a distributor.
Gross Profit
Our gross profit increased $5.0 million, or 6.0%, to $88.1 million for the
three months ended July 2, 2000 from $83.1 million for the three months ended
July 4, 1999 principally due to the effect of higher sales volumes discussed
above with our gross margins unchanged at 42%. The positive effect on gross
margins from the higher selling prices resulting from the Long Island Snapple
acquisition, as referred to above, was fully offset by the negative effects of
(1) a shift in product mix to lower-margin products in the 2000 second quarter,
(2) increased freight and handling costs in the 2000 second quarter, (3) $0.4
million of increased provisions for obsolete inventory resulting from higher
levels of raw materials and finished goods inventories that passed their shelf
lives during the 2000 second quarter and (4) increased production costs in the
2000 second quarter resulting from higher fees charged to us by our co-packers.
Advertising, Selling and Distribution Expenses
Our advertising, selling and distribution expenses increased $0.8 million,
or 1.5%, to $50.5 million for the three months ended July 2, 2000 from $49.7
million for the three months ended July 4, 1999. The increase in advertising,
selling and distribution expenses was principally due to (1) higher employee
compensation and related benefit costs and (2) higher costs resulting from our
California Beverage acquisition in March 2000, partially offset by an overall
decrease in promotional spending, all as previously discussed in the comparison
of the six-month periods.
General and Administrative Expenses
Our general and administrative expenses increased $1.7 million, or 16.7%,
to $12.0 million for the three months ended July 2, 2000 from $10.3 million for
the three months ended July 4, 1999. The increase in general and administrative
expenses reflects (1) increased expenses as a result of the effect of the Long
Island Snapple acquisition and (2) increases in compensation and related benefit
costs primarily due to an increased number of employees.
Depreciation and Amortization, Excluding Amortization of Deferred Financing
Costs
Our depreciation and amortization, excluding amortization of deferred
financing costs, increased $0.8 million, or 14.1%, to $6.5 million for the three
months ended July 2, 2000 from $5.7 million for the three months ended July 4,
1999. The increase in depreciation and amortization principally reflects an
increase in amortization of goodwill, trademarks and other intangibles as a
result of the effect of the Long Island Snapple acquisition and, to a much
lesser extent, the acquisition of California Beverage in March 2000.
Capital Structure Reorganization Related Charges
The capital structure reorganization related charges of $0.2 million for
the three months ended July 2, 2000 and $0.8 million for the three months ended
July 4, 1999 reflect the effect of equitable adjustments that were made to the
terms of outstanding options under our stock option plan, as discussed above in
the comparison of the six-month periods, as the affected stock options continue
to vest. The decrease in the capital structure reorganization related charge is
a result of a portion of the options becoming fully vested in July 1999. We will
continue to incur additional charges through 2001, also as previously discussed.
Interest Expense
Interest expense increased $1.6 million, or 18.2%, to $10.5 million for the
three months ended July 2, 2000 from $8.9 million for the three months ended
July 4, 1999 primarily reflecting higher average interest rates in the 2000
second quarter.
Other Income, Net
Other income, net was unchanged at $0.3 million for both the three months
ended July 2, 2000 and the three months ended July 4, 1999.
Income Taxes
The provision for income taxes represented effective rates of 45% for the
three months ended July 2, 2000 and 41% for the three months ended July 4, 1999.
The effective rate is higher in the 2000 second quarter than in 1999 principally
due to the catch up effect of a year-to-date decrease in the 1999 estimated
full-year effective tax rate which decreased to 45%.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows From Operations
Our consolidated operating activities used cash and cash equivalents,
which we refer to in this discussion as cash, of $15.2 million during the six
months ended July 2, 2000 reflecting cash used by changes in operating assets
and liabilities of $33.6 million partially offset by (1) net income of $3.8
million and (2) non-cash charges, principally depreciation and amortization, of
$14.6 million.
The cash used by changes in operating assets and liabilities of $33.6
million principally reflects increases in receivables of $38.0 million and
inventories of $24.0 million, both partially offset by increases in accounts
payable and accrued expenses of $27.0 million and due to Triarc and affiliates
of $1.4 million. The increase in receivables resulted from seasonally higher
sales in June 2000 compared with December 1999. The increase in inventories was
due to seasonal buildups in anticipation of our peak summer selling season. The
increase in accounts payable and accrued expenses principally reflects (1) the
increased inventory purchases, (2) $3.9 million of seasonally higher accruals
for advertising and promotions and (3) a $3.1 million increase in accrued income
taxes resulting from our provision for income taxes, with no related payments,
all partially offset by a $4.8 million reduction in accrued compensation and
related benefits due to the first quarter payment of previously accrued
incentive compensation.
Despite the $15.2 million of cash used in operating activities in the 2000
first half, we expect positive cash flows from operations during the remainder
of 2000 due to (1) the expectation of profitable operations for the remainder of
the year due to the seasonality of our business with the summer months as the
peak season and (2) the significant seasonal factors impacting the cash used in
the 2000 first half for operating assets which should not recur during the
second half of 2000 and should substantially reverse.
Working Capital and Capitalization
Working capital, which equals current assets less current liabilities, was
a deficit of $4.7 million at July 2, 2000, reflecting a current ratio, which
equals current assets divided by current liabilities, of 1.0:1. Our working
capital deficit increased $1.9 million from a deficit of $2.8 million at January
2, 2000 principally due to capital expenditures and reclassifications of
long-term debt to current liabilities, both partially offset by working capital
provided by operations.
Our capitalization at July 2, 2000 aggregated $387.7 million consisting of
$667.2 million of long-term debt, including current portion, and $101.0 million
of redeemable preferred stock less $380.5 million of stockholders' deficit. Our
total capitalization decreased $3.1 million from $390.8 million at January 2,
2000 principally due to net repayments of long-term debt of $11.1 million
partially offset by (1) the $3.7 million of capital contributions to us from
Triarc through Triarc Consumer Products Group of certain assets Triarc acquired
of California Beverage Company and Northern Glacier Ltd. discussed below under
"Acquisitions" and (2) our net income of $3.8 million.
Both we and Triarc Consumer Products Group are co-issuers of the 10 1/4%
notes and both we and Triarc Consumer Products Group have recorded our related
obligations consisting of $300.0 million principal amount as long-term debt and
$12.4 million and $11.8 million of related accrued but unpaid interest as of
January 2, 2000 and July 2, 2000, respectively, in "Accrued expenses." Since it
is intended that Triarc Consumer Products Group will make all principal and
interest payments under the 10 1/4% notes, we have reported a corresponding
charge of $312.4 million and $311.8 million as of January 2, 2000 and July 2,
2000, respectively, in "Receivable from parent" included as a component of
stockholders' deficit. These amounts are increased for interest accrued and
reduced to the extent that Triarc Consumer Products Group makes interest and
principal payments on the 10 1/4% notes.
Debt Agreements
We participate in a $535.0 million senior bank credit facility entered into
by Snapple, Mistic and Stewart's as well as RC/Arby's Corporation, a
wholly-owned subsidiary of Triarc Consumer Products Group, and Royal Crown
Company, Inc., a wholly-owned subsidiary of RC/Arby's. The credit facility
consists of a $475.0 million term facility under which we had $349.4 million and
Royal Crown had $88.9 million of term loans outstanding as of July 2, 2000 and a
$60.0 million revolving credit facility under which we had $15.9 million and
Royal Crown had $4.1 million of revolving credit loans outstanding as of July 2,
2000. At July 2, 2000 there was $39.9 million of borrowing availability to the
participants in the revolving credit facility which would be available to us to
the extent not utilized by RC/Arby's or Royal Crown.
Revolving loans will be due in full in 2005. Maturities of our term loans
are $3.0 million for the second half of 2000 representing two quarterly
installments, increasing annually through 2006 with a final payment in 2007. In
addition to scheduled maturities of the term loans, the participants in the
revolving credit facility are also required to make mandatory annual prepayments
in an amount, if any, currently equal to 75% of excess cash flow as defined in
the credit agreement. The mandatory prepayments will be applied on a pro rata
basis to the remaining outstanding balances of each of the three classes of the
term loans except that any lender that has term B or term C loans outstanding
may elect not to have its pro rata share of the loans repaid. Any amount prepaid
and not applied to term B loans or term C loans as a result of the election
would be applied first to the outstanding balance of term A loans and second to
any outstanding balance of revolving loans, with any remaining amount being
returned to us. In that connection, we made a $28.3 million prepayment on May 4,
2000 in respect of the year ended January 2, 2000, of which $22.6 million was
applicable to our portion of the outstanding term loans and $5.7 million was
applicable to Royal Crown's portion of the term loans which we recorded as a
receivable from Royal Crown. The pro rata share applicable to our term B and
term C loans was $20.5 million. Certain lenders of our term B and term C loans
elected not to accept an aggregate $7.0 million of the prepayment applicable to
us and, accordingly, this amount was applied to our term A loans. The
application of the excess cash flow prepayment had the effect of reducing the
scheduled maturities of our term loans during the second half of 2000 by $0.6
million to $3.0 million. We currently expect that an additional prepayment will
be required to be made in the second quarter of 2001 in respect of the year
ending December 31, 2000, the amount of which we currently estimate at $10.0
million of which $8.0 million would be applicable to our portion of the term
loans.
Under the credit agreement, we can make voluntary prepayments of the term
loans, although as of July 2, 2000, we have not made any voluntary prepayments.
However, if we make voluntary prepayments of our term B and term C loans, which
have $94.7 million and $230.4 million outstanding as of July 2, 2000, we will
incur prepayment penalties of 1.0% and 1.5%, respectively, of any future amounts
of those term loans prepaid through February 25, 2001.
The $300.0 million of 10 1/4% senior subordinated notes due 2009 under
which both we and Triarc Consumer Products Group are co-issuers do not require
any amortization of principal prior to their maturity in 2009.
We have a note payable to a beverage co-packer with $1.7 million
outstanding as of July 2, 2000 which is due during the second half of 2000.
Our scheduled long-term debt repayments during the second half of 2000
are $4.7 million, consisting of $3.0 million under the term loans and $1.7
million under the note payable to a beverage co-packer, both as discussed above.
In addition, we expect to repay our $15.9 million portion of outstanding
revolving loans during the second half of 2000; however any such payment would
increase the borrowing availability under the revolving credit facility.
Debt Agreement Restrictions and Guarantees
Under the credit facility substantially all of our assets along with
those of the other subsidiaries of Triarc Consumer Products Group, other than
cash and cash equivalents, are pledged as security. In addition, our obligations
relating to (1) the 10 1/4% notes are guaranteed by, among other subsidiaries of
Triarc Consumer Products Group, Snapple, Mistic and Stewart's and all of their
domestic subsidiaries and (2) the credit facility are guaranteed by Triarc
Consumer Products Group and, among other of its subsidiaries, Snapple Beverage
Group and substantially all of the domestic subsidiaries of Snapple, Mistic and
Stewart's. As collateral for the guarantees under the credit facility, all of
the stock of Snapple, Mistic and Stewart's, among other subsidiaries of Triarc
Consumer Products Group, and all of their domestic subsidiaries and 65% of the
stock of each of their directly-owned foreign subsidiaries is pledged. The
guarantees under the 10 1/4% notes are full and unconditional, are on a joint
and several basis and are unsecured.
Our debt agreements contain various covenants which (1) require periodic
financial reporting, (2) require meeting financial amount and ratio tests, (3)
limit, among other matters, (a) the incurrence of indebtedness, (b) the
retirement of debt prior to maturity, with exceptions, (c) investments, (d)
asset dispositions and (e) affiliate transactions other than on an arms-length
basis and (4) restrict the payment of dividends by the subsidiaries of Snapple
Beverage Group to Snapple Beverage Group. Under the most restrictive of these
covenants, as of July 2, 2000 Snapple, Mistic and Stewart's are unable to pay
any dividends or make any loans or advances to Snapple Beverage Group other than
dividends or advances to Snapple Beverage Group to the extent necessary to
enable Triarc Consumer Products Group or Snapple Beverage Group to make interest
payments under the 10 1/4% notes and to pay up to $0.2 million of general
corporate expenses per year, less any amounts paid to them by Royal Crown or
RC/Arby's for those purposes. While there are no restrictions applicable to
Snapple Beverage Group to pay dividends to Triarc Consumer Products Group,
Snapple Beverage Group is dependent upon cash flows from its subsidiaries to pay
dividends. We were in compliance with all of these covenants as of July 2, 2000.
Advances from Affiliate
During the 2000 first half we received non-interest bearing cash advances
of $32.1 million from RC/Arby's to provide working capital for us. Subsequent to
July 2, 2000, we repaid $7.8 million of those advances and may also repay some
or all of the remainder during the second half of 2000 depending on our cash
availability.
Capital Expenditures
Cash capital expenditures amounted to $9.6 million during the 2000 first
half. We expect that cash capital expenditures will approximate $4.7 million for
the second half of 2000 for which there were $0.9 million of outstanding
commitments as of July 2, 2000. Our planned capital expenditures include amounts
for remaining expenditures for a premium beverage packing line at one of our
company-owned distributors and co-packing equipment.
Acquisitions
On March 31, 2000 Triarc acquired, and through Triarc Consumer Products
Group contributed to us, certain assets, principally distribution rights, of
California Beverage Company, a distributor of our premium beverage products in
the City and County of San Francisco, California, for cash of $1.6 million. On
April 19, 2000 Triarc acquired, and through Triarc Consumer Products Group
contributed to us, certain inventories of California Beverage for cash of $0.1
million.
On May 16, 2000 Triarc acquired, and through Triarc Consumer Products Group
contributed to us, certain assets, principally distribution rights, of Northern
Glacier Ltd., a distributor of our Mistic premium beverage products in five
counties in New Jersey and who will continue as our sub-distributor in two of
those counties, for an aggregate purchase price of $2.2 million, subject to
post-closing adjustment. The purchase price principally consisted of $1.9
million paid through offset of accounts receivable and a note receivable
otherwise owed to us by the seller, which were reimbursed to us by Triarc, and
$0.3 million to be paid by Triarc or us to the seller following the conclusion
of the seller's sub-distributorship arrangement.
To further our growth strategy, we will consider additional selective
business acquisitions, as appropriate, to grow strategically and explore other
alternatives to the extent we have available resources to do so.
Management Services Fees
We receive from Triarc various management services, including legal,
accounting, tax, insurance and financial services, under a management services
agreement between Triarc and its combined beverage businesses, which includes
us. Under this agreement we pay Triarc fixed fees on a quarterly basis in
arrears, including annual cost of living adjustments. Our portion of the total
with respect to fiscal year 2000 will be $3.6 million, of which we expect to pay
$1.8 million during the second half of 2000.
Income Taxes
We are included in the consolidated Federal income tax return and some
combined state income tax returns of Triarc. Under a tax-sharing arrangement
with Triarc Consumer Products Group which, in turn, has a tax-sharing agreement
with Triarc, we expect to be required to pay amounts relating to income taxes to
Triarc through Triarc Consumer Products Group based on our consolidated taxable
income on a stand-alone basis. While no tax-sharing payments were made during
the 2000 first half, we expect tax-sharing payments will be required during the
second half of 2000 pursuant to the tax-sharing arrangement.
Cash Requirements
As of July 2, 2000, our consolidated cash requirements for the second half
of 2000, exclusive of operating cash flow requirements which include tax-sharing
payments and management services fees to Triarc as discussed above, consist
principally of (1) scheduled debt principal repayments aggregating $4.7 million,
(2) capital expenditures of approximately $4.7 million, (3) the $7.8 million
repaid subsequent to July 2, 2000 and any additional repayments of the cash
advances from RC/Arby's and (4) business acquisitions by us, if any. We
anticipate meeting all of these requirements through (1) $17.8 million of
existing cash and cash equivalents, (2) cash flows from operations and (3) the
$39.9 million of availability as of July 2, 2000 under the $60.0 million
revolving credit facility to the extent not utilized by Royal Crown or
RC/Arby's. We expect to repay our $15.9 million portion of outstanding revolving
loans during the second half of 2000; however any such payment would increase
the borrowing availability under the revolving credit facility.
Snapple Beverage Group
Snapple Beverage Group is a holding company which, other than its
investments in subsidiaries and intercompany receivables, has no significant
assets and whose primary liability consists of the $300.0 million principal
amount of 10 1/4% notes co-issued with Triarc Consumer Products Group, which is
the principal obligor. This liability is offset by an equal amount of receivable
from Triarc Consumer Products Group, which is classified in our stockholders'
deficit.
As discussed above, Snapple Beverage Group's subsidiaries are currently
unable to pay any dividends or make any additional loans or advances to Snapple
Beverage Group under the terms of the credit facility described above except to
enable Triarc Consumer Products Group or Snapple Beverage Group to make interest
payments under the 10 1/4% notes and to pay up to $0.2 million of general
corporate expenses per year. Snapple Beverage Group does not anticipate any
significant cash requirements for the second half of 2000.
Initial Public Offering
We currently intend to issue an estimated $100.0 million of our common
stock in an initial public offering. These shares will be registered pursuant to
a registration statement on Form S-1 that has been filed with the Securities and
Exchange Commission but which has not yet been declared effective.
Assuming the successful completion of this initial public offering, we will
be restructured. In accordance with the restructuring transactions, we will be
transferred to RC/Arby's, RC/Arby's (parent company) and the restaurant
franchising business will then be effectively distributed from Triarc Consumer
Products Group to Triarc and, as a result of a series of transactions, Triarc
Consumer Products Group will then effectively merge into us.
Also assuming the successful completion of the initial public offering, we
will receive an estimated $178.0 million capital contribution from RC/Arby's,
representing the net proceeds of a financing of its restaurant business. We are
also expected to enter into a new credit facility consisting of up to $195.0
million of term loans and a $50.0 million revolving credit facility. No
borrowings under the new revolving credit facility are expected to occur at the
time of the completion of the initial public offering.
The net proceeds of the initial public offering and the term loan
borrowings under the new credit facility, together with all of the cash and cash
equivalents of RC/Arby's and the restaurant business and all but $2.0 million of
our cash and cash equivalents, on a restructured basis, are expected to be used
to (1) repay prior to maturity all outstanding borrowings under the existing
credit facility and accrued interest thereon and (2) pay (a) prepayment
penalties resulting from the prepayment of certain of the outstanding term loans
and (b) fees and expenses relating to the initial public offering and the
consummation of the new credit facility.
The early extinguishment of the borrowings under the existing credit
facility will result in an extraordinary charge at the time the borrowings under
the existing credit facility are repaid prior to maturity for the write-off of
previously unamortized deferred financing costs and the payment of the
aforementioned prepayment penalties, less income tax benefit. The Company's
portion of the extraordinary charge as of July 2, 2000 would have amounted to
$9.1 million.
Legal Matters
We are involved in litigation and claims incidental to our business. We
have reserves for legal matters of $0.4 million as of July 2, 2000. Although the
outcome of these matters cannot be predicted with certainty and some of these
matters may be disposed of unfavorably to us, based on currently available
information and given our reserves, we do not believe that these legal matters
will have a material adverse effect on our consolidated financial position or
results of operations.
Seasonality
Our business is seasonal. Our highest revenues occur during the spring and
summer, between April and September and, accordingly, our second and third
quarters reflect the highest revenues and our first and fourth quarters have
lower revenues. Our earnings before interest, taxes, depreciation and
amortization and operating profit are also highest during the second and third
fiscal quarters of each year and lowest in the first fiscal quarter. This
principally results from the higher revenues in the second and third fiscal
quarters while general and administrative expenses and depreciation and
amortization, excluding amortization of deferred financing costs, are generally
recorded ratably in each quarter either as incurred or allocated to quarters
based on time expired.
Recently Issued Accounting Pronouncements
In June 1998 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." Statement 133 provides a comprehensive standard for the
recognition and measurement of derivatives and hedging activities. The standard
requires derivatives be recorded on the balance sheet at fair value and
establishes more restrictive criteria for hedge accounting. Statement 133, as
amended by Statements of Financial Accounting Standards Nos. 137 and 138, is
effective for our fiscal year beginning January 1, 2001. Although we have not
yet completed the process of identifying all of our derivative instruments, the
only derivative which we have currently identified is an interest rate cap
agreement on some of our long-term debt. We historically have not had
transactions to which hedge accounting applied and, accordingly, the more
restrictive criteria for hedge accounting in Statement 133 should have no effect
on our consolidated financial position or results of operations. However, the
provisions of Statement 133 are complex and, accordingly, we are unable to
determine at this time the impact it will have on our consolidated financial
position and results of operations.
In December 1999 the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements."
Bulletin 101 states that revenues generally are realized when (1) persuasive
evidence of an arrangement exists, (2) delivery has occurred or services have
been rendered, (3) the seller's price to the buyer is fixed or determinable, and
(4) collectibility is reasonably assured. Bulletin 101, as amended, must be
implemented no later than our fourth fiscal quarter of 2000. We believe that we
have historically recognized revenues in accordance with the criteria set forth
in Bulletin 101. As disclosed in the notes to consolidated financial statements
included in our Form 10-K, we record sales when inventory is shipped or
delivered and sales terms generally do not allow a right of return. Accordingly,
we do not expect that the implementation of Bulletin 101 will have a material
impact on our consolidated financial position or results of operations.
<PAGE>
SNAPPLE BEVERAGE GROUP, INC. AND SUBSIDIARIES
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to the impact of interest rate changes and, to a much lesser
extent, foreign currency fluctuations.
Policies and Procedures -- In the normal course of business, we employ
established policies and procedures to manage our exposure to changes in
interest rates and fluctuations in the value of foreign currencies using
financial instruments we deem appropriate.
Interest Rate Risk
Our objective in managing our exposure to interest rate changes is to limit
the impact of interest rate changes on earnings and cash flows. To achieve our
objectives, we assess the relative proportions of our debt under fixed versus
variable rates. We generally use purchased interest rate caps on a portion of
our variable-rate debt to limit our exposure to increases in short-term interest
rates. These cap agreements usually are at significantly higher than market
interest rates prevailing at the time the cap agreements are entered into and
are intended to protect against very significant increases in short-term
interest rates. We currently have one interest rate cap agreement relating to
interest on $185.9 million of our aggregate $349.4 million of variable-rate term
loans under our senior bank credit facility which provides for a cap which was
approximately 1% higher than the prevailing interest rate at July 2, 2000.
Foreign Currency Risk
Our objective in managing our exposure to foreign currency fluctuations is
also to limit the impact of such fluctuations on earnings and cash flows. We
have a relatively limited amount of exposure to (1) export sales revenues and
related receivables denominated in foreign currencies and (2) investments in
foreign subsidiaries which are subject to foreign currency fluctuations. Our
primary export sales exposures relate to sales in Canada, the Caribbean and
Europe. We monitor these exposures and periodically determine our need for use
of strategies intended to lessen or limit our exposure to these fluctuations.
However, foreign export sales and foreign operations for our most recent full
fiscal year ended January 2, 2000 represented only 4% of our revenues and an
immediate 10% change in foreign currency exchange rates versus the United States
dollar from their levels at January 2, 2000 would not have had a material effect
on our consolidated financial position or results of operations. At the present
time, we do not hedge our foreign currency exposures as we do not believe this
exposure to be material.
Overall Market Risk
With regard to overall market risk, we attempt to mitigate our exposure to
such risks by assessing the relative proportion of our investments in cash and
cash equivalents and the relatively stable and risk-minimized returns available
on such investments. At July 2, 2000, our excess cash was primarily invested in
commercial paper with maturities of less than 90 days and money market funds
which, due to their short-term nature, minimizes our overall market risk.
Sensitivity Analysis
All of our market risk sensitive instruments are instruments entered into
for purposes other than trading. Our measure of market risk exposure represents
an estimate of the potential change in fair value of our financial instruments.
Market risk exposure is presented for each class of financial instruments held
by us at July 2, 2000 for which an immediate adverse market movement represents
a potential material impact on our financial position or results of operations.
We believe that the rates of adverse market movements described below represent
the hypothetical loss to future earnings and do not represent the maximum
possible loss nor any expected actual loss, even under adverse conditions,
because actual adverse fluctuations would likely differ.
The following table reflects the estimated effects on the market value of
our financial instruments as of July 2, 2000 based upon assumed immediate
adverse effects as noted below (in thousands):
July 2, 2000
---------------------
Carrying Interest
Value Rate Risk
----- ---------
Cash equivalents...........................$ 14,283 $ --
Long-term debt............................. 667,183 (3,654)
The cash equivalents are short-term in nature with a maturity of three
months or less when acquired and, as such, a change in interest rates of one
percentage point would not have a material impact on our consolidated financial
position or results of operations.
The sensitivity analysis of long-term debt assumes an instantaneous
increase in market interest rates of one percentage point from their levels at
July 2, 2000, with all other variables held constant. The increase of one
percentage point with respect to our long-term debt (1) represents an assumed
average 10% decline in earnings as the weighted average interest rate of our
variable-rate debt at July 2, 2000 approximated 10% and (2) relates only to our
variable-rate debt since a change in interest rates would not affect interest
expense on our fixed-rate debt. Our variable-rate debt consists of $349.4
million of our term loans and $15.9 million of revolving loans. The interest
rate risk presented with respect to long-term debt represents the potential
impact the indicated change in interest rates would have on our consolidated
results of operations and not our consolidated financial position.
<PAGE>
Part II. Other Information
This Quarterly Report on Form 10-Q contains or incorporates by reference
certain statements that are not historical facts, including, most importantly,
information concerning possible or assumed future results of operations of
Snapple Beverage Group, Inc. (f/k/a Triarc Beverage Holdings Corp.) and its
subsidiaries (collectively, "SBG" or "the Company") and statements preceded by,
followed by or that include the words "may," "believes," "expects,"
"anticipates," or the negation thereof, or similar expressions, which constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). All statements which address
operating performance, events or developments that are expected or anticipated
to occur in the future, including statements relating to volume and revenue
growth or statements expressing general optimism about future operating results,
are forward-looking statements within the meaning of the Reform Act. These
forward-looking statements are based on our expectations and are susceptible to
a number of risks, uncertainties and other factors and our actual results,
performance or achievements may differ materially from any future results,
performance or achievements expressed or implied by such forward-looking
statements. For those statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Reform Act. Many important factors
could affect our future results and could cause those results to differ
materially from those expressed in the forward-looking statements contained
herein. Such factors include, but are not limited to, the following:
competition, including product and pricing pressures; success of operating
initiatives; the ability to attract and retain customers; development and
operating costs; advertising and promotional efforts; brand awareness; the
existence or absence of positive or adverse publicity; market acceptance of new
product offerings; new product and concept development by competitors; changing
trends in consumer tastes and demographic patterns; the performance by material
customers of their obligations under their purchase agreements; changes in
business strategy or development plans; quality of management; availability,
terms and deployment of capital; business abilities and judgment of personnel;
availability of qualified personnel; labor and employee benefit costs;
availability and cost of raw materials, ingredients and supplies; general
economic, business and political conditions in the countries and territories
where the Company operates, including the ability to form successful strategic
business alliances with local participants; changes in, or failure to comply
with, government regulations, including accounting standards, environmental laws
and taxation requirements; the costs, uncertainties and other effects of legal
and administrative proceedings; the impact of general economic conditions on
consumer spending; and other risks and uncertainties affecting the Company and
its subsidiaries detailed in our other current and periodic reports filed with
the Securities and Exchange Commission, all of which are difficult or impossible
to predict accurately and many of which are beyond our control. We will not
undertake and specifically decline any obligation to publicly release the
results of any revisions which may be made to any forward-looking statements to
reflect events or circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events. In addition, it is our
policy generally not to make any specific projections as to future earnings, and
we do not endorse any projections regarding future performance that may be made
by third parties.
Item 5. Other Information
On June 27, 2000 the Company filed with the Securities and Exchange
Commission a registration statement for an initial public offering ("IPO") of
its common stock. The Company will own its premium beverage business
(Snapple(R), Mistic(R), and Stewart's(R)) and Royal Crown Company, Inc.'s soft
drink concentrates business (Royal Crown(R), Diet Rite(R), RC Edge(TM), and
Nehi(R)). The Company plans to list its shares on the New York Stock Exchange
under the symbol "SNP" and expects to complete the offering during the third
quarter of 2000, subject to market conditions and other factors. Net proceeds
from the offering are expected to be used to repay debt under an existing credit
facility.
The offering which will be made only by a prospectus, will be underwritten
by a syndicate to be lead-managed by Morgan Stanley Dean Witter and co-managed
by Donaldson, Lufkin & Jenrette, ING Barings and Lehman Brothers.
A registration statement relating to these securities has been filed with
the Securities and Exchange Commission, but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This Quarterly Report on Form 10-Q
shall not constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
There can be no assurance that the Securities and Exchange Commission will
declare the registration statement effective or that the proposed IPO will be
consummated.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 - Amendment No. 2 to Triarc Beverage Holdings Corp. 1997 Stock Option
Plan, incorporated herein by reference to Exhibit 10.1 to Triarc
Consumer Product Group, LLC's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 2, 2000 (SEC file no. 333-78625-11).
27.1 - Financial Data Schedule for the six-month period ended July 2,
2000, submitted to the Securities and Exchange Commission in
electronic format.
27.2 - Financial Data Schedule for the six-month period ended July 4, 1999,
on a restated basis, submitted to the Securities and Exchange
Commission in electronic format.
(b) Reports on Form 8-K
None
<PAGE>
SNAPPLE BEVERAGE GROUP, INC. AND SUBSIDIARIES
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 thereunto duly authorized.
SNAPPLE BEVERAGE GROUP, INC.
(Registrant)
Date: August 21, 2000 By: /S/ JOHN L. BARNES, JR.
---------------------------
John L. Barnes, Jr.
Executive Vice President
(On behalf of the Company)
By: /S/ FRED H. SCHAEFER
--------------------------
Fred H. Schaefer
Vice President and
Chief Accounting Officer
(Principal accounting officer)
<PAGE>
Exhibit Index
Exhibit
No. Description Page No.
-------- ----------- --------
10.1 - Amendment No. 2 to Triarc Beverage Holdings
Corp. 1997 Stock Option Plan, incorporated
herein by reference to Exhibit 10.1 to Triarc
Consumer Product Group, LLC's Quarterly Report
on Form 10-Q for the fiscal quarter ended
July 2, 2000 (SEC file no. 333-78625-11).
27.1 - Financial Data Schedule for the six-month
period ended July 2, 2000, submitted to the
Securities and Exchange Commission in electronic
format.
27.2 - Financial Data Schedule for the six-month period
ended July 4, 1999, on a restated basis, submitted
to the Securities and Exchange Commission in
electronic format.
