SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A (No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 19, 1997
FAIRFIELD COMMUNITIES, INC.
(Exact name of registrant as specified in its Charter)
Delaware 1-8096 71-0390438
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
11001 Executive Center Drive, Little Rock, Arkansas 72211
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (501) 228-2700
<PAGE>
The Registrant hereby amends the following item of its Current Report
on Form 8-K dated January 5, 1998, as set forth in the pages attached hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired:
------------------------------------------
The following consolidated financial statements and
Report of Coopers and Lybrand L.L.P., independent
accountants, included in the Company's Prospectus dated
November 10, 1997, filed pursuant to Rule 424(b) under the
Securities Act of 1933, as amended, are incorporated herein
by reference:
Consolidated Balance Sheets - December 31, 1996 and 1995
Consolidated Statements of Operations - Years Ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Stockholders' Equity -
Years Ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows - Years Ended
December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements -
December 31, 1996
(b) Pro Forma Financial Information:
-------------------------------
The following unaudited pro forma condensed combined
financial statements are filed with this report:
Pro Forma Condensed Combined Balance Sheet - December 31,
1997
Pro Forma Condensed Combined Statements of Earnings:
Year Ended December 31, 1997
Year Ended December 31, 1996
Year Ended December 31, 1995
The unaudited pro forma condensed combined balance
sheet as of December 31, 1997 and unaudited pro forma
condensed combined statements of earnings for the three
years ended December 31, 1997 give effect to the Merger
between Fairfield Communities, Inc. and Vacation Break
U.S.A., Inc., using (i) the pooling-of-interests method of
accounting, (ii) the Company's two-for-one common stock
split, in the form of a stock dividend effective January 30,
1998 to shareholders of record on January 15, 1998 and (iii)
the Company's three-for-two common stock split in the form
of a stock dividend effective July 15, 1997 to shareholders
of record on July 1, 1997 (the "Stock Splits"). The
unaudited pro forma condensed combined financial statements
have been prepared from, and should be read in conjunction
with, and are qualified in their entirety by reference to
the historical consolidated financial statements and notes
thereto of Fairfield Communities, Inc. and Vacation Break
U.S.A., Inc.
The unaudited pro forma condensed combined financial
information gives effect to the Merger and the Stock Splits
as if they had been consummated, with respect to statement
of earnings data, at the beginning of the periods presented,
or, with respect to balance sheet data, as of the date
presented. The unaudited pro forma condensed
<PAGE>
combined financial information has been included for
illustrative purposes only and is not necessarily indicative
of the results of operations or financial position that
would have occurred had the Merger and the Stock Splits been
consummated at the dates indicated, nor is it necessarily
indicative of future results of operations or financial
position of the merged companies.
<PAGE>
FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED BALANCE SHEET
DECEMBER 31, 1997
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
Vacation
Fairfield Break Pro Forma Pro Forma
Historical Historical Adjustments Consolidated
---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 2,232 $ 842 $ 3,074
Loans receivable, net 192,727 98,482 291,209
Real estate inventories 53,028 40,111 93,139
Property and equipment, net 18,580 5,790 24,370
Restricted cash and
escrow accounts 7,280 18,327 25,607
Intercompany 104,408 (104,408) 0
Other assets 13,615 12,918 26,533
-------- --------- -------- --------
$391,870 $ 72,062 $463,932
======== ========= ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Financing arrangements $168,086 $ 1,995 $170,081
Deferred revenue 20,032 9,737 29,769
Accounts payable 7,386 13,012 20,398
Other liabilities 35,606 20,896 56,502
-------- --------- -------- --------
231,110 45,640 276,750
-------- --------- -------- --------
Stockholders' Equity:
Common stock 407 88 495
Paid-in-capital 93,918 14,002 107,920
Retained earnings 66,751 12,332 79,083
Unamortized restricted stock (316) 0 (316)
Treasury stock, at cost 0 0 0
-------- --------- -------- --------
160,760 26,422 187,182
-------- --------- -------- --------
$391,870 $ 72,062 $463,932
======== ========= ======== ========
</TABLE>
<PAGE>
FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
Vacation
Fairfield Break Pro Forma Pro Forma
Historical Historical Adjustments Consolidated
---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
REVENUES
Vacation ownership, net $161,097 $ 95,044 $256,141
Resort management 17,146 11,091 28,237
Interest 24,142 13,037 37,179
Other 24,664 22 24,686
-------- -------- -------- --------
227,049 119,194 346,243
-------- -------- -------- --------
EXPENSES
Vacation ownership 40,946 26,900 67,846
Provision for loan losses 7,426 4,695 12,121
Selling 80,621 42,501 123,122
Resort management 14,629 11,316 25,945
General and administrative 18,080 14,303 32,383
Interest, net 5,988 4,365 10,353
Other 15,990 2,076 18,066
Cost associated with merger 2,107 11,201 13,308
-------- -------- -------- --------
185,787 117,357 303,144
-------- -------- -------- --------
Earnings before provision for
income taxes and
extraordinary loss 41,262 1,837 43,099
Provision for income taxes 17,179 2,548 19,727
-------- -------- -------- --------
Earnings (loss) before
extraordinary loss 24,083 (711) 23,372
Extraordinary loss, net of income
tax benefit of $1,375 - 2,195 2,195
-------- -------- -------- --------
Net earnings $ 24,083 $ (2,906) $ 21,177
======== ======== ======== ========
NET EARNINGS PER SHARE (a):
Basic $.71 $(.34) $.48
==== ===== ====
Diluted $.68 $(.33) $.46
==== ===== ====
WEIGHTED AVERAGE SHARES
OUTSTANDING (a):
Basic 33,715 8,629 44,200
====== ===== ======
Diluted 35,577 8,811 46,282
====== ===== ======
</TABLE>
(a)Reflects (i) the issuance of Fairfield Common Stock in connection with the
Merger, which calculation is based on an exchange rate of .6075 of Fairfield
Common Stock for each weighted average share of Vacation Break common stock
outstanding, (ii) a two-for-one common stock split of Fairfield's Common
Stock, in the form of a stock dividend effective January 30, 1998 to
shareholders of record on January 15, 1998 and (iii) a three-for-two common
stock split of Fairfield's Common Stock, in the form of a stock dividend
effective July 15, 1997 to shareholders of record on July 1, 1997.
<PAGE>
FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
Vacation
Fairfield Break Pro Forma Pro Forma
(As Reported) (As Reported) Adjustments Consolidated
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
REVENUES
Vacation ownership, net $114,592 $ 80,020 $194,612
Resort management 14,644 12,343 26,987
Interest 19,994 8,657 28,651
Other 23,248 1,884 25,132
-------- -------- -------- --------
172,478 102,904 275,382
-------- -------- -------- --------
EXPENSES
Vacation ownership 29,249 22,136 51,385
Provision for loan losses 5,390 2,437 7,827
Selling 63,243 37,436 100,679
Resort management 12,593 12,825 25,418
General and administrative 15,223 10,243 25,466
Interest, net 6,757 3,997 10,754
Other 15,529 2,881 18,410
-------- -------- -------- --------
147,984 91,955 239,939
-------- -------- -------- --------
Earnings before provision for
income taxes 24,494 10,949 35,443
Provision for income taxes 9,631 3,709 13,340
-------- -------- -------- --------
Net earnings $ 14,863 $ 7,240 $ 22,103
======== ======== ======== ========
NET EARNINGS PER SHARE (a):
Basic $.49 $.84 $.54
==== ==== ====
Diluted $.46 $.80 $.51
==== ==== ====
WEIGHTED AVERAGE SHARES
OUTSTANDING (a):
Basic 30,142 8,573 40,558
====== ===== ======
Diluted 32,302 9,023 43,265
====== ===== ======
</TABLE>
(a) Reflects (i) the issuance of Fairfield Common Stock in connection with the
Merger, which calculation is based on an exchange rate of .6075 of
Fairfield Common Stock for each weighted average share of Vacation Break
common stock outstanding, (ii) a two-for-one common stock split of
Fairfield's Common Stock, in the form of a stock dividend effective January
30, 1998 to shareholders of record on January 15, 1998 and (iii) a
three-for-two common stock split of Fairfield's Common Stock, in the form
of a stock dividend effective July 15, 1997 to shareholders of record on
July 1, 1997.
<PAGE>
FAIRFIELD COMMUNITIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
Vacation
Fairfield Break Pro Forma Pro Forma
(As Reported)(As Reported) Adjustments Consolidated
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
REVENUES
Vacation ownership, net $ 85,460 $40,291 $125,751
Resort management 13,178 9,086 22,264
Interest 19,111 4,704 23,815
Other 23,026 4,665 27,691
-------- ------- -------- --------
140,775 58,746 199,521
-------- ------- -------- --------
EXPENSES
Vacation ownership 23,838 9,500 33,338
Provision for loan losses 6,505 1,525 8,030
Selling 50,738 13,790 64,528
Resort management 11,730 9,645 21,375
General and administrative 11,844 9,766 21,610
Interest, net 8,562 1,959 10,521
Other 14,520 3,391 17,911
-------- ------- -------- --------
127,737 49,576 177,313
-------- ------- -------- --------
Earnings before provision for
income taxes 13,038 9,170 22,208
Provision for income taxes 5,009 3,325 8,334
-------- ------- -------- --------
Net earnings $ 8,029 $ 5,845 $ 13,874
======== ======= ======== ========
NET EARNINGS PER SHARE (a):
Basic $.27 $.90 $.37
==== ==== ====
Diluted $.25 $.90 $.35
==== ==== ====
WEIGHTED AVERAGE SHARES
OUTSTANDING (a):
Basic 29,794 6,500 37,691
====== ===== ======
Diluted 31,961 6,525 39,888
====== ===== ======
</TABLE>
(a) Reflects (i) the issuance of Fairfield Common Stock in connection with the
Merger, which calculation is based on an exchange rate of .6075 of
Fairfield Common Stock for each weighted average share of Vacation Break
common stock outstanding, (ii) a two-for-one common stock split of
Fairfield's Common Stock, in the form of a stock dividend effective January
30, 1998 to shareholders of record on January 15, 1998 and (iii) a
three-for-two common stock split of Fairfield's Common Stock, in the form
of a stock dividend effective July 15, 1997 to shareholders of record on
July 1, 1997.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, hereunto duly authorized.
FAIRFIELD COMMUNITIES, INC.
By: /s/William G. Sell
----------------------------
William G. Sell
Vice President and Controller
(Chief Accounting Officer)
Date: March 4, 1998
<PAGE>
INDEX TO EXHIBITS
- -----------------
EXHIBIT DESCRIPTION
-------------------
23.1 Consent of Coopers & Lybrand L.L.P. (attached)
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Form 8-K/A (No. 1) of
Fairfield Communities, Inc. of our report dated March 14, 1997, except for
Notes 22 and 24, as to which the date is October 9, 1997, on our audits of
the consolidated financial statements of Vacation Break U.S.A., Inc. as of
December 31, 1996 and for the two years in the period ended December 31,
1996, appearing in the registration statement on Form S-4 (SEC Registration
No. 333-39615) of Fairfield Communities, Inc. filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933.
Coopers & Lybrand L.L.P.
Miami, Florida
March 4, 1998
