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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
(Amendment No. 1)
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 6, 1997
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DART GROUP CORPORATION
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-1946 53-0242973
---------------------------- ----------- -------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
</TABLE>
3300 75th Avenue, Landover, Maryland 20785
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (301) 731-1200
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- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
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This Amendment No. 1 amends the registrant's Current Report on Form 8-K (the
"Form 8-K") that was filed with the Securities and Exchange Commission on
February 20, 1997. Each capitalized term not otherwise defined herein has the
meaning assigned to such term in the Form 8-K.
Item 7(b) of the Form 8-K is hereby deleted and replaced in its entirety with
the following:
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information.
The following unaudited pro forma financial statements of Dart for the year
ended January 31, 1996 and the nine months ended October 31, 1996, give effect
to the Acquisition, the sale of the Senior Notes, the Bridge Loan and the
use of existing Shoppers Food cash, cash equivalents and short-term investments
to repay the Bridge Loan and pay a cash dividend to Dart, as if such
transactions occurred on February 1, 1995 with respect to the pro forma
operating and other data for the year ended January 31, 1996 and the nine
months ended October 31, 1996 and as of October 31, 1996 with respect to pro
forma balance sheet data.
The Acquisition has been accounted for by Shoppers Food using the purchase
method of accounting. The pro forma adjustments include excess purchase price
over the net book value of assets acquired and deferred financing costs. The
adjustments have been determined based upon the fair market value of the assets
acquired.
The unaudited pro forma financial statements are not necessarily indicative of
either future results of operations or of results that might have been achieved
if the transactions had been consummated as of the indicated dates. The
unaudited pro forma financial statements should be read in conjunction with
Shopper Food's historical consolidated financial statements (and the notes
thereto) contained in this Form 8-K and Dart's historical consolidated financial
statements (and the notes thereto) contained in its Annual Report on Form 10-K
for the year ended January 31, 1996 and its Quarterly Report on Form 10-Q for
the quarter ended October 31, 1996, which reports are incorporated herein by
reference.
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DART GROUP CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands)
<TABLE>
<CAPTION>
Year Ended January 31, 1996
----------------------------------------------
Shoppers
Dart Food Adj. Pro Forma
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Sales $ 655,161 $ 829,626 $ - $1,484,787
Real Estate Revenue 13,155 - - 13,155
Interest and other income 9,820 12,075 (4,835)(a) 17,060
--------- --------- --------- ----------
678,136 841,701 (4,835) 1,515,002
--------- --------- --------- ----------
Cost of sales, warehousing
and occupancy 509,136 651,309 - 1,160,445
Selling and Administrative 146,209 156,188 (155)(c) 302,242
Depreciation and
Amortization 15,453 8,628 4,460 (b) 29,667
1,126 (c)
Interest expense 13,175 1,499 17,247 (d) 33,921
2,000 (d)
Write-down Cabot-Morgan
Real Estate joint
ventures 14,562 - - 14,562
Restructuring charge (2,051) - - (2,051)
Closed facility reserve (5,665) - - (5,665)
--------- --------- --------- ----------
690,819 817,624 24,678 1,533,121
--------- --------- --------- ----------
Income (loss) before income
taxes equity in affiliate
and minority interests (12,683) 24,077 (29,513) (18,119)
Income taxes 6,149 9,425 (3,700)(c) 1,852
(10,022)(e)
---------- -------- -------- ---------
Income (loss) before equity
in affiliate and minority
interests (18,832) 14,652 (15,791) (19,971)
Equity in affiliate 10,055 - (10,055)(c) -
Minority interest in
(income)loss of
consolidated subsidiaries
and partnerships (4,647) - - (4,647)
--------- --------- --------- ----------
Net income (loss) $ (13,424) $ 14,652 $ (25,846) $ (24,618)
========= ========= ========= ==========
</TABLE>
See notes to the pro forma consolidated statements of operations.
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DART GROUP CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands)
<TABLE>
<CAPTION>
Nine Months Ended October 31, 1996
-----------------------------------------------
Shoppers
Dart Food Adj. Pro Forma
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
Sales $ 478,271 $ 625,123 $ - $ 1,103,394
Interest and other income 3,659 8,797 (3,706)(a) 8,750
--------- --------- --------- -----------
481,930 633,920 (3,706) 1,112,144
--------- --------- --------- -----------
Cost of sales, warehousing
and occupancy 375,956 482,905 - 858,861
Selling and administrative 105,802 118,676 - 224,478
Depreciation and
amortization 10,316 6,934 3,345 (b) 21,440
845 (c)
Interest expense 5,593 1,445 12,935 (d) 21,473
1,500 (d)
Restructuring charge (1,052) - - (1,052)
Closed facility reserve (3,865) - - (3,865)
--------- --------- --------- -----------
492,750 609,960 18,625 1,121,335
--------- --------- --------- -----------
Income (loss) before income
taxes equity in affiliate
and minority interests (10,820) 23,960 (22,331) (9,191)
Income tax (benefit) (965) 8,234 (8,325)(e) (1,056)
--------- --------- --------- -----------
Income (loss) before equity
in affiliate and minority
interests (9,855) 15,726 (14,006) (8,135)
Equity in affiliate 7,018 - (7,018)(c) -
Minority interests in
(income) loss of
consolidated subsidiaries
and partnerships 908 - - 908
--------- --------- --------- -----------
Net income (loss) $ (1,929) $ 15,726 $ (21,024) $ (7,227)
========= ========= ========= ===========
</TABLE>
See notes to the pro forma consolidated statements of operations.
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(a) Reflects the decrease of interest income attributable to the reduction
of cash, cash equivalents and short-term investments by $72,800,000 to
repay the Bridge Loan and approximately $7,200,00 to pay financing and
acquisitions costs.
(b) Reflects the amortization of excess purchase price over the book value
acquired arising from the Acquisition, on a straight-line basis over a
40-year period and the amortization of lease rights on a straight-line
basis over the life of the individual leases.
(c) Reflects the consolidation of Shoppers Food.
(d) Based upon an initial rate of interest on the Senior Notes of 10.0% and
increasing by 50 basis points on a quarterly basis commencing on August
1, 1997. Pro forma interest expense has been computed from the date the
Senior Notes were issued (February 6, 1997) through the maturity date
of the Senior Notes (February 6, 2000) and recorded on a straight line
basis. Deferred financing costs are amortized over three years on a
straight-line basis.
<TABLE>
<CAPTION>
Year Ended Nine Months Ended
January 31, 1996 October 31, 1996
---------------- ----------------
(dollars in thousands)
<S> <C> <C>
Historical interest expense $ 14,674 $ 7,038
Add: Interest on Senior Notes 17,247 12,935
-------- --------
Pro Forma interest expense 31,921 19,973
======== ========
Historical amortization of
deferred financing $ - $ -
Add: Amortization of new
financing costs 2,000 1,500
-------- --------
$ 2,000 $ 1,500
======== ========
</TABLE>
(e) Reflects adjustment to Shoppers Food income taxes net of the tax effect
of non-deductible amortization.
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DART GROUP CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(dollars in thousands)
<TABLE>
<CAPTION>
As Of October 31, 1996
-----------------------------------------------
Shoppers
ASSETS Dart Food Adjustments Pro Forma
--------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Current Assets:
Cash $ 12,796 $ 629 $ - $ 13,425
Short-term instruments 15,141 105,075 (80,000)(a) 40,216
Marketable debt securities 12,413 - - 12,413
Accounts receivable 12,823 7,736 - 20,559
Income taxes refundable 8,250 - - 8,250
Merchandise inventory 249,257 27,011 - 276,268
Deferred income tax benefit 7,754 1,550 - 9,304
Prepaid income taxes - 930 - 930
Other current assets 6,679 1,433 - 8,112
--------- --------- --------- ---------
325,113 144,364 (80,000) 389,477
--------- --------- --------- ---------
Property and Equipment,
at cost:
Furniture, fixtures and
equipment 100,499 83,103 (70,590)(d) 113,012
Buildings and leasehold
improvements 30,652 2,655 (2,255)(d) 31,052
Land 1,034 - - 1,034
Property under capital lease 24,472 8,663 - 33,135
--------- --------- --------- ---------
156,657 94,421 (72,845) 178,233
Accumulated Depreciation and
Amortization 78,161 72,845 (72,845)(d) 78,161
--------- --------- --------- ---------
78,496 21,576 - 100,072
--------- --------- --------- ---------
Other Assets: 4,202 358 - 4,560
Share of Equity in Shoppers
Food Warehouse Corp. 48,415 - (48,415)(d) -
Excess of Purchase Price over
Net Assets Acquired net of
Accumulated amortization of 1,947 - 1,876 (b)
$325,000 149,606 (d) 153,429
Deferred Financing Costs - - 6,000 (c) 6,000
Lease rights - - 17,436 (d) 17,436
Deferred Income Tax Benefit 12,729 3,147 (6,974)(d) 8,902
--------- --------- --------- ---------
Total Assets $ 470,902 $ 169,445 $ 39,529 $ 679,876
========= ========= ========= =========
</TABLE>
See notes to the pro forma consolidated balance sheets.
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DART GROUP CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET, CONTINUED
(dollars in thousands)
<TABLE>
<CAPTION>
As of October 31, 1996
---------------------------------------------
LIABILITIES AND Shoppers
STOCKHOLDERS' EQUITY Dart Food Adj Pro Forma
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Current Liabilities:
Current portion mortgages
payable $ 1,083 $ - $ (781)(b) $ 302
Crown Books' credit facility 9,368 - - 9,368
Accounts payable, trade 125,898 39,279 - 165,177
Income taxes payable 3,008 - - 3,008
Accrued salaries and benefits 19,921 4,116 - 24,037
Accrued taxes other than
income 8,337 2,290 - 10,627
Other accrued liabilities 37,981 7,802 3,723 (b) 49,506
Current portion of reserve
for closed facilities and
restructuring 5,462 400 - 5,862
Current portion of
obligations under
capital lease 101 - - 101
--------- --------- --------- ---------
211,159 53,887 2,942 267,988
--------- --------- --------- ---------
Mortgages Payable 435 - - 435
--------- --------- --------- ---------
Senior Notes - - 140,000 (e) 140,000
--------- --------- --------- ---------
Obligations Under Capital
Lease 30,421 10,158 - 40,579
--------- --------- --------- ---------
Reserve for Closed Facilities
and Restructuring 28,710 1,033 - 29,743
--------- --------- --------- ---------
Other Liabilities - 5,404 (4,450)(d) 954
--------- --------- --------- ---------
Minority Interests 66,913 - - 66,913
--------- --------- --------- ---------
Stockholders' Equity
Class A common stock 1,962 117 (58)(b) 1,962
(59)(d)
Class B common stock 500 50 (25)(b) 500
(25)(d)
Paid-in-capital 78,833 - - 78,833
Notes receivable-shareholder (65,130) - - (65,130)
Unrealized gains on short-
term investments 71 - - 71
Retained earnings 119,065 98,796 (49,398)(b) 119,065
(49,398)(d)
</TABLE>
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DART GROUP CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET, CONTINUED
(dollars in thousands)
<TABLE>
<CAPTION>
As of October 31, 1996
---------------------------------------------
LIABILITIES AND Shoppers
STOCKHOLDERS' EQUITY, Dart Food Adj Pro Forma
CONTINUED --------- --------- --------- ---------
<S> <C> <C> <C> <C>
Treasury stock, Class A (1,749) - - (1,749)
Treasury stock, Class B (288) - - (288)
--------- --------- --------- ---------
Total Stockholders' Equity 133,264 98,963 (98,963) 133,264
--------- --------- --------- ---------
Total Liabilities and
Stockholders' Equity $ 470,902 $ 169,445 $ 39,529 $ 679,876
========= ========= ========= =========
</TABLE>
See notes to the pro forma consolidated balance sheets.
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DART GROUP CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
(a) Reflects repayment of the $72.8 million Bridge Loan, the $3.2 million
payment of the balance of the deferred financing costs and the $4.0
million payment of the direct acquisition costs.
(b) Reflects the consolidation of Shoppers Food.
(c) Reflects the fees and expenses of Senior Note financing costs of $6.0
million.
(d) Reflects the effect of consummation of the Acquisition, the calculation
of the excess purchase price over the net book value of assets acquired
and the allocation of purchase price to lease rights.
<TABLE>
<S> <C>
Purchase price (dollars in thousands):
Purchase of shares pursuant to Acquisition $ 210,000
Direct acquisition costs 4,000
---------
Adjusted purchase price 214,000
Less: Net book value of assets acquired 49,482
---------
Excess purchase price to be allocated $ 164,518
=========
--Goodwill 149,606
--Deferred rent 4,450
--Deferred taxes on lease rights (6,974)
--Lease rights 17,436
(e) Reflects the following pro forma adjustments (dollars in thousands):
Issuance of Senior Notes $ 140,000
Commissions to initial purchaser (2,800)
---------
Senior Notes, net of commissions 137,200
Borrowing under Bridge Loan 72,800
Purchase of shares pursuant to Acquisition (210,000)
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DART GROUP CORPORATION
By: MARK A. FLINT
-------------------------
Mark A. Flint
Senior Vice President and
Chief Financial Officer
Date: April 21, 1997
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