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 March 31, 1995
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: 1-2207
TRIARC COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 38-0471180
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
900 Third Avenue, New York, New York 10022
(Address of principal executive offices) (zip code)
(212) 230-3000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if it 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 23,917,188 shares of the registrant's Class A Common Stock and
5,997,622 shares of the registrant's Class B Common Stock outstanding as of
April 28, 1995.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
December 31, March 31,
1994 1995
(In thousands)
ASSETS (A) (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 80,064 $ 25,292
Marketable securities 9,453 9,395
Receivables, net 141,377 163,928
Inventories 105,662 105,594
Deferred income tax benefit 6,023 5,260
Prepaid expenses and other current assets 16,570 13,929
--------- ---------
Total current assets 359,149 323,398
--------- ---------
Properties, net 306,293 319,330
Unamortized costs in excess of net assets of
acquired companies 202,797 201,028
Deferred costs and other assets 53,928 60,340
--------- ---------
$ 922,167 $ 904,096
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt $ 52,061 $ 39,863
Accounts payable 59,152 56,946
Accrued facilities relocation and corporate
restructuring costs 22,773 8,705
Other accrued expenses 89,019 76,617
--------- ---------
Total current liabilities 223,005 182,131
--------- ---------
Long-term debt 612,118 614,374
Insurance loss reserves 10,827 10,739
Deferred income taxes 22,701 23,205
Deferred income and other liabilities 13,505 12,623
Redeemable preferred stock 71,794 --
Stockholders' equity (deficit):
Common stock 2,798 3,398
Additional paid-in capital 79,497 162,710
Accumulated deficit (60,929) (54,210)
Treasury stock (45,473) (45,946)
Other (7,676) (4,928)
--------- ---------
Total stockholders' equity (deficit) (31,783) 61,024
--------- ---------
$ 922,167 $ 904,096
========= =========
<FN>
(A) Derived from the audited consolidated financial statements as of
December 31, 1994.
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Three months ended
March 31,
----------------------
1994 1995
(In thousands except
per share amounts)
(Unaudited)
<S> <C> <C>
Revenues:
Net sales $258,693 $ 285,811
Royalties, franchise fees and other revenues 11,366 12,182
--------- ---------
270,059 297,993
--------- ---------
Costs and expenses:
Cost of sales 186,396 212,947
Advertising, selling and distribution 21,318 27,962
General and administrative 30,862 32,343
--------- ---------
238,576 273,252
--------- ---------
Operating profit 31,483 24,741
Interest expense (17,035) (18,757)
Other income, net 2,654 6,814
--------- ---------
Income from continuing operations before
income taxes and minority interests 17,102 12,798
Provision for income taxes (7,025) (6,079)
--------- ---------
10,077 6,719
Minority interests in income of consolidated
subsidiary (1,292) --
--------- ---------
Net income $ 8,785 $ 6,719
========= =========
Income per share:
Primary $ .34 $ .23
========= =========
Fully diluted $ .33 $ .22
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Three months ended
March 31,
-----------------------
1994 1995
(In thousands)
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,785 $ 6,719
Adjustments to reconcile net income to net
cash and cash equivalents used in
operating activities
Depreciation and amortization of
properties 8,406 9,099
Amortization of costs in excess of net
assets of acquired companies 1,456 1,841
Amortization of original issue discount,
deferred financing costs and unearned
compensation 2,641 4,336
Provision for (reversal of) doubtful
accounts (96) 784
Payments on facilities relocation and
corporate restructuring (5,673) (1,075)
Gain on sales of non-core businesses
and properties (43) (2,230)
Deferred income tax provision 3,176 1,267
Interest expense to be capitalized and
not paid 801 889
Minority interests 1,292 --
Other, net (2,686) (1,066)
Changes in operating assets and
liabilities:
Decrease (increase) in:
Receivables (19,237) (23,335)
Inventories (1,061) 778
Prepaid expenses and other current
assets 3,797 1,682
Decrease in accounts payable and accrued
expenses (33,078) (14,228)
-------- --------
Net cash and cash equivalents used in
operating activities (31,520) (14,539)
-------- --------
Cash flows from investing activities:
Acquisitions:
Net current assets -- (426)
Properties, net (7,547) (4,905)
Trademarks, favorable lease acquisition costs,
non-compete agreement and other assets (882) (6,403)
Capitalized leases assumed and note
payable issued 2,966 2,382
Costs in excess of net assets acquired (4,037) --
-------- --------
(9,500) (9,352)
Proceeds from sales of non-core businesses
and properties 232 2,969
Capital expenditures (11,260) (15,969)
Purchase of marketable securities (5,927) (2,289)
Proceeds from sales of marketable securities 4,022 2,449
-------- --------
Net cash and cash equivalents used in
investing activities (22,433) (22,192)
-------- --------
Cash flows from financing activities:
Proceeds from long-term debt 8,630 --
Repayments of long-term debt (21,460) (15,483)
Deferred financing costs -- (830)
Acquisition of treasury stock -- (489)
Payment of preferred dividends (2,917) --
-------- --------
Net cash and cash equivalents used in
financing activities (15,747) (16,802)
-------- --------
Net cash used in continuing operations (69,700) (53,533)
Net cash provided by (used in) discontinued
operations 376 (1,239)
-------- --------
Net decrease in cash and cash equivalents (69,324) (54,772)
Cash and cash equivalents at beginning of period 118,801 80,064
-------- --------
Cash and cash equivalents at end of period $ 49,477 $ 25,292
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 1995
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
of Triarc Companies, Inc. ("Triarc" and, together with its subsidiaries, the
"Company") have been prepared in accordance with Rule 10-01 of Regulation S-X
promulgated by the Securities and Exchange Commission 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 December 31, 1994
and March 31, 1995 and its results of operations and cash flows for the
three-month periods ended March 31, 1994 and 1995. 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 year
ended December 31, 1994 ("Form 10-K").
Certain amounts included in the prior period's condensed consolidated
financial statements have been reclassified to conform with the current
period's presentation.
(2) Inventories
The following is a summary of the components of inventories:
<TABLE>
<CAPTION>
December 31, March 31,
1994 1995
---- ----
(In thousands)
<S> <C> <C>
Raw materials $ 26,490 $ 29,990
Work in process 7,803 7,773
Finished goods 71,369 67,831
--------- ---------
$105,662 $ 105,594
========= =========
</TABLE>
(3) Properties
The following is a summary of the components of properties, net:
<TABLE>
<CAPTION>
December 31, March 31,
1994 1995
---- ----
(In thousands)
<S> <C> <C>
Properties, at cost $515,109 $ 537,143
Less accumulated depreciation
and amortization 208,816 217,813
--------- ---------
$306,293 $ 319,330
========= =========
</TABLE>
(4) Posner Settlement
On January 9, 1995 the Company entered into a settlement agreement (the
"Settlement Agreement") with Victor Posner and certain entities controlled by
him (collectively, the "Posner Entities"). Pursuant to the Settlement
Agreement all of the 5,982,866 shares of redeemable preferred stock, with an
aggregate book value of $71,794,000 and which were owned by the Posner
Entities, were converted into 4,985,722 shares of the Company's Class B
Common Stock (the "Conversion"). Further, an additional 1,011,900 shares of
Class B Common Stock (valued at an aggregate $12,016,000) were issued to the
Posner Entities (the "Issuance") in consideration for, among other matters,
(i) the settlement of all amounts due to the Posner Entities in connection
with termination of the lease for the Company's former headquarters
($12,326,000) and (ii) an indemnification by certain of the Posner Entities
of any claims or expenses incurred after December 1, 1994 involving certain
litigation and potential litigation relating to the Company and certain
former affiliates. As a result of the Conversion and the Issuance, "Common
stock" and "Additional paid-in capital" increased by $600,000 and
$83,211,000, respectively, during the first quarter of 1995.
The settlement of the lease termination resulted in a pretax gain to
the Company of $310,000. In addition, the Company released accruals for (i)
litigation expenses of $773,000 and (ii) interest on the lease termination
obligation of $638,000. Further, pursuant to the Settlement Agreement,
Posner paid the Company $6,000,000 in January 1995 in exchange for, among
other things, the release by the Company of the Posner Entities from certain
claims that it may have with respect to (i) certain legal fees related to
shareholder litigation settled in 1993, (ii) fees payable to the court-
appointed members of a special committee of the Company's Board of Directors
(the "Special Committee") and (iii) legal fees paid or payable with respect
to matters referred to in the Settlement Agreement, subject to the
satisfaction by the Posner Entities of certain obligations under the
Settlement Agreement. In accordance with an order issued by the United
States District Court for the Northern District of Ohio on February 7, 1995,
the Company used a portion of such funds to pay (i) $2,000,000 to the Special
Committee for services rendered in connection with the consummation of the
Settlement Agreement and related matters, (ii) attorney's fees of $850,000 in
connection with the aforementioned shareholder litigation and (iii) $300,000
in connection with the settlement of certain litigation and other expenses
related to the Settlement Agreement. Additionally, the Special Committee was
disbanded and the three court-appointed members of the Special Committee
decided not to stand for re-election as directors of the Company at the 1995
annual shareholders meeting. In connection therewith, the vesting of such
directors' restricted stock was accelerated resulting in the recognition of
previously unamortized deferred compensation of $1,690,000 during the first
quarter of 1995 included in "General and administrative". As a result of all
of the above, the Company recorded pretax income of $2,881,000 ($.06 per
share after taxes on a fully diluted basis), consisting of charges, net, to
"General and administrative" of $69,000 and credits to "Other income, net" of
$2,312,000 and to "Interest expense" of $638,000, during the first quarter of
1995.
(5) Income Per Share
The common shares used in the calculations of primary and fully diluted
income per share were as follows:
<TABLE>
<CAPTION>
Three months ended
March 31,
------------------
1994 1995
---- ----
(In thousands)
<S> <C> <C>
Weighted average number of common shares
outstanding 21,343 29,318
Common equivalent shares - effect of dilutive
stock options 324 149
------- -------
Common and common equivalent shares for
primary per share purposes 21,667 29,467
Contingent issuances of common shares:
Common shares which would have been issued
upon the assumed conversion of preferred
stock 4,986 --
Effect of common shares issued upon the
conversion of preferred stock (see
Note 4) assuming conversion as of the
beginning of the period -- 499
Additional effect of dilutive stock options -- 26
------- -------
Common, common equivalent and contingent
shares for fully diluted per share
purposes 26,653 29,992
======= =======
</TABLE>
The primary income per share has been computed by dividing the net
income applicable to common stockholders (reduced by preferred stock dividend
requirements of $1,458,000 for the three months ended March 31, 1994) by the
number of common and common equivalent shares above. Fully diluted income
per share has been computed by dividing the net income applicable to common
stockholders, adjusted for the three months ended March 31, 1994 to add back
the preferred stock dividend requirements noted above, by the number of
common, common equivalent and contingent shares above.
(6) Transactions with Related Parties
The Company continues to have related party transactions of the same
nature and general magnitude as those described in Note 28 to the
consolidated financial statements contained in the Form 10-K.
(7) Contingencies
The Company continues to have legal and environmental contingencies of
the same nature and general magnitude as those described in Note 25 to the
consolidated financial statements contained in the Form 10-K. In connection
with the Settlement Agreement (see Note 4) and as described in the Form 10-K,
the Company received an indemnification from the Posner Entities of any
claims or expenses incurred after December 1, 1994 involving certain
litigation relating to the Company and certain of its former affiliates.
After considering amounts provided in previous periods, the Company
does not believe that the contingencies referred to above, as well as
ordinary routine litigation, will have a material adverse effect on its
consolidated financial position or results of operations.
(8) Fire and Insurance Settlement
On February 3, 1995 the Company's textile segment suffered fire damage
to equipment in the weaving department at one of its manufacturing
facilities. During the three months ended March 31, 1995 the textile segment
received a settlement from its insurance company for the fire-damaged
equipment and, in accordance therewith, recognized a pretax gain net of
certain costs and expenses of $1,875,000 ($.04 per share after taxes on a
fully diluted basis) included in "Other income, net".
(9) Subsequent Event
Effective as of May 1, 1995 two newly-formed wholly-owned subsidiaries
of RC/Arby's Corporation ("RCAC" - a wholly-owned subsidiary of the Company),
borrowed an aggregate of $37,294,000 from a commercial lender pursuant to a
mortgage loan agreement. Borrowings consist of $34,384,000 of mortgage loans
(the "Mortgage Loans") and $2,910,000 of equipment loans (the "Equipment
Loans"), the proceeds of which will be used for capital expenditures,
principally in the restaurant segment, general corporate purposes and to pay
related fees and expenses. The Mortgage Loans and Equipment Loans (the
"Loans") are repayable in equal monthly installments over twenty years and
seven years, respectively, and bear interest at 11 1/2% plus, with respect to
the Mortgage Loans, participating interest to the extent gross sales of the
related restaurants exceed certain defined levels which are in excess of
current levels. The two newly-formed wholly owned subsidiaries of RCAC may,
at their option, eliminate the participating interest, if any, by effectively
increasing the interest by amounts representing approximately 4% of the
monthly principal and interest installments. The Loans are secured by
restaurants and equipment with a net book value of $32,618,000 as of May 1,
1995. In connection therewith, all of the equipment securing the Equipment
Loans, with a net book value of $2,747,000 as of May 1, 1995, has been
released as security for the payment of RCAC's 9 3/4% senior notes due 2000.
The assets of Arby's Restaurant Development Corporation, one of the new
subsidiaries of RCAC, will not be available to pay creditors of Triarc, RCAC
or RCAC's wholly-owned subsidiary, Arby's, Inc. until the Loans to it have
been repaid in full. Triarc, the two new subsidiaries of RCAC and the
commercial lender also entered into a commitment letter whereby the two
subsidiaries will be able to borrow up to an additional $50,000,000 over the
twelve months ending April 30, 1996, on substantially the same terms as
described above to finance new restaurants. <PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
INTRODUCTION
The "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included herein should be read in conjunction with
"Item 7. - Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Annual Report on Form 10-K for the year ended
December 31, 1994 ("Form 10-K") of Triarc Companies, Inc. ("Triarc" or,
collectively with its subsidiaries, the "Company"). The recent trends
affecting the Company's four business segments are described therein.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1995 Compared with Three Months Ended March 31,
1994
<TABLE>
<CAPTION> Revenues Operating Profit
Three months ended Three months ended
March 31, March 31,
------------------ ---------------
1994 1995 1994 1995
---- ---- ---- ----
(In thousands)
<S> <C> <C> <C> <C>
Restaurants $ 48,836 $ 57,114 $ 3,625 $ 2,022
Soft Drink 35,252 45,516 7,591 4,681
Textiles 129,991 145,056 7,661 8,932
Liquefied Petroleum Gas 55,980 50,307 14,810 10,521
Other -- -- (246) (25)
Unallocated general
corporate expenses -- -- (1,958) (1,390)
-------- -------- -------- --------
$270,059 $297,993 $ 31,483 $ 24,741
======== ======== ======== ========
</TABLE>
Revenues increased $27.9 millon to $298.0 million in the three months
ended March 31, 1995.
Restaurants - Revenues increased $8.2 million (17.0%) due to (i)
an $8.7 million increase in net sales resulting from an average
net increase of 48 (18.8%) company-owned restaurants partially
offset by a $1.3 million (3.9%) decrease in company-owned same-
store sales due to a decline in customer traffic and increased
competitive discounting and (ii) a $0.8 million increase in
royalties and franchise fees resulting from an average net
increase of 74 (3.0%) franchised restaurants and a 1.0% increase
in franchised same-store sales.
Soft Drink - Revenues increased $10.3 million ($29.1%) reflecting
(i) $5.0 million of finished soft drink product sales of C&C and
the soft drink segment's branded products (as opposed to
concentrate) arising from the Company's January 1995 acquisition
of the trademark and distribution rights for C&C products and the
distribution rights for the soft drink segment's branded products
in the New York metropolitan area, (ii) a $3.2 million volume
increase in branded concentrate sales principally due to domestic
bottler forward buying in advance of an announced price increase
effective in the second quarter of 1995 as well as significant
sales to a new international customer and (iii) a $2.1 million
volume increase in private label concentrate sales resulting from
continued international expansion and domestic growth.
Textiles - Revenues increased $15.1 million (11.6%) reflecting
higher sales of indigo-dyed sportswear ($9.4 million) and utility
wear ($7.4 million). The increase in indigo-dyed sportswear
resulted from higher volume of $6.8 million due to improved
market conditions reflecting the continued turnaround in the
denim market which commenced in late 1994, higher selling prices
reflecting the partial pass-through of higher cotton costs and
improved product mix. The increase in utility wear resulted from
higher volume ($4.2 million) reflecting stronger demand and
higher selling prices reflecting the partial pass-through of
higher cotton and polyester costs.
Liquefied Petroleum Gas - Revenues decreased $5.7 million (10.1%)
due to lower volume resulting from the exceptionally warm winter
in virtually all markets where the liquefied petroleum ("LP") gas
segment has operations. The winter was reputed to be the second
warmest winter this century.
Gross profit increased $1.4 million to $85.0 million in the three
months ended March 31, 1995 while gross margin decreased to 28.5% compared to
31.0% for the comparable prior year period.
Restaurants - Margins decreased due primarily to (i) reduced
operating cost efficiencies as a result of start-up costs
associated with the opening of new restaurants and lower company-
owned same-store sales volume noted above and (ii) the
proportionately lower royalties and franchise fees (with no
associated cost of sales) as a percentage of total revenues.
Soft Drink - Margins decreased due to the inclusion in the 1995
period of the lower-margin finished product sales resulting from
the January 1995 acquisition noted above and, to a lesser extent,
a shift in sales mix toward international sales where selling
prices are lower.
Textiles - Margins decreased principally due to the higher cost
of cotton and polyester and other manufacturing costs in 1995
which could not be fully passed on to customers in the form of
higher selling prices.
Liquefied Petroleum Gas - Margins decreased due to higher propane
costs which could only be partially passed on in the form of
higher selling prices because of increased competition induced by
substantially warmer weather.
Advertising, selling and distribution expenses increased $6.6 million
to $28.0 million in the three months ended March 31, 1995. Such increase
principally consisted of (i) $4.9 million of higher expenses in the soft
drink segment reflecting increased media and promotional activity and
increased domestic and international key market development initiatives and
(ii) $1.1 million of higher expenses in the restaurant segment primarily
attributable to the increased number of company-owned restaurants and
increased promotional food costs charged to advertising, selling and
distribution expenses relating to the competitive discounting activity noted
above.
General and administrative expenses increased $1.5 million to $32.3
million in the three months ended March 31, 1995 principally due to costs
associated with building an infrastructure within each of the restaurant and
soft drink segments to facilitate expansion plans.
Consolidated operating profit decreased $6.7 million to $24.7 million
in the three months ended March 31, 1995 principally for the reasons
described above.
Interest expense increased $1.7 million to $18.8 million in the three
months ended March 31, 1995 due to higher average levels of debt and, to a
lesser extent, higher interest rates on the Company's floating-rate debt
partially offset by the release of an accrual for $0.6 million of interest on
a lease termination obligation which was settled in accordance with the
January 1995 settlement agreement with Victor Posner (see Note 4 to the
accompanying condensed consolidated financial statements).
Other income, net increased $4.2 million to $6.8 million in the three
months ended March 31, 1995. The major components of this increase were the
(i) $2.3 million related to the January 1995 settlement agreement with Victor
Posner (see Note 4 to the accompanying condensed consolidated financial
statements) and (ii) a $1.9 million gain on insurance recovery relating to
fire-damaged equipment.
The provisions for income taxes in the three months ended March 31,
1995 and 1994 represent effective tax rates of 47% and 41%, respectively,
which are higher than the Federal income tax statutory rate of 35%
principally due to the effects of state income taxes, net of Federal benefit,
and amortization of costs in excess of net assets of acquired companies which
is not deductible for income tax purposes. Such effects in the 1994 quarter
were partially offset by utilization of net operating loss carryforwards.
The minority interests in net income of consolidated subsidiary in the
1994 period of $1.3 million consists of minority interests in the earnings of
Southeastern Public Service Company ("SEPSCO"), a 71.1% owned subsidiary of
Triarc until the 28.9% minority ownership was acquired on April 14, 1994.
LIQUIDITY AND CAPITAL RESOURCES
Consolidated cash and cash equivalents declined $54.8 million during
the three months ended March 31, 1995 to $25.3 million at March 31, 1995.
Such decrease reflects cash and cash equivalents used in (i) operating
activities of $14.6 million, (ii) investing activities of $22.2 million,
(iii) financing activities of $16.8 million and (iv) discontinued operations
of $1.2 million. The net cash used in operating activities reflects net
income of $6.7 million plus non-cash charges for depreciation and
amortization of $15.3 million offset by (i) changes in operating assets and
liabilities of $35.1 million and (ii) other items, net of $1.5 million. The
change in operating assets and liabilities principally reflects an increase
in receivables of $23.3 million and a decrease in accounts payable and
accrued expenses of $14.2 million. The increase in receivables was due to
(i) increased average daily sales, (ii) receivables resulting from the
January 1995 soft drink acquisition discussed below and (iii) a $2.1 million
insurance recovery receivable recorded during the three months ended March
31, 1995. The decrease in accounts payable and accrued expenses was due to
(i) interest payments made during the first quarter of 1995 and (ii) the
timing of payments for capital expenditures and trade payables. The cash
used in investing activities principally reflects (i) capital expenditures of
$16.0 million and (ii) cash paid for restaurant and soft drink acquisitions
(see below) of $9.4 million partially offset by proceeds from sales of non-
core businesses and properties of $3.0 million. The cash used in financing
activities principally consists of repayments of long-term debt of $15.5
million.
Total stockholders' equity improved to $61.0 million at March 31, 1995
from a deficit of $31.8 million at December 31, 1994. Such improvement was
due to (i) the $83.8 million effect of the Company's issuances of its Class B
Common Stock in connection with the settlement agreement described in Note 4
to the accompanying condensed consolidated financial statements, (ii) net
income of $6.7 million, (iii) the recognition of $1.7 million of previously
unamortized deferred compensation relating to the restricted stock of
directors who declined to stand for re-election at the 1995 annual
shareholders meeting and will provide no further service after the election
of new directors in June 1995 and (iv) $0.6 million of other net increases.
The Company's principal operating subsidiaries each have various credit
facilities, including term loans, or senior note issuances outstanding which
are described in detail in Note 13 to the consolidated financial statements
contained in the Form 10-K. At March 31, 1995 Graniteville Company
("Graniteville") had $10.5 million of unused availability under its credit
facility with an additional $8.0 million available at April 1, 1995 through
June 30, 1995. National Propane Corporation ("National Propane") had $17.5
million of unused availability under its credit facility for general
purposes, $14.5 million of availability for niche acquisitions and $30.0
million available conditioned upon completion of the intended merger of
Public Gas Company ("Public Gas") and National Propane during the second
quarter of 1995 and the redemption, in part, prior to December 31, 1995, of
the $45.0 million outstanding principal amount of SEPSCO's 11 7/8% senior
subordinated debentures due February 1, 1998 (the "11 7/8% Debentures").
Effective as of May 1, 1995 two newly-formed wholly-owned subsidiaries
of RC/Arby's Corporation ("RCAC"), a wholly-owned subsidiary of Triarc,
borrowed an aggregate of $37.3 million from a commercial lender pursuant to a
mortgage loan agreement (the "Mortgage Loan Agreement"). Borrowings under
the Mortgage Loan Agreement consist of $34.4 million of mortgage loans (the
"Mortgage Loans") and $2.9 million of equipment loans (the "Equipment
Loans"), the proceeds of which will be used for capital expenditures,
principally in the restaurant segment, general corporate purposes and to pay
related fees and expenses. The Mortgage Loans and Equipment Loans are
repayable in equal monthly installments over twenty years and seven years,
respectively, and bear interest at 11 1/2% plus, with respect to the Mortgage
Loans, participating interest to the extent gross sales of the related
restaurants exceed certain defined levels which are in excess of current
levels. The two newly-formed wholly-owned subsidiaries of RCAC may, at their
option, eliminate the participating interest, if any, by effectively
increasing the interest by amounts representing approximately 4% of the
monthly principal and interest installments. Triarc, the two new
subsidiaries of RCAC and the commercial lender also entered into a commitment
letter whereby the two subsidiaries will be able to borrow up to an
additional $50.0 million over the twelve months ending April 30, 1996, on
substantially the same terms as described above (the "Mortgage Loan
Commitment"). Borrowings under the Mortgage Loan Commitment are limited to
the financing of new restaurants. Principal repayments required under the
Mortgage and Equipment Loans aggregate $0.4 million during the remainder of
1995.
Under the Company's various debt agreements substantially all of the
Company's assets are pledged as security. In addition, RCAC's 9 3/4% senior
notes due 2000 (the "9 3/4% Senior Notes") have been guaranteed by RCAC's
wholly-owned subsidiaries, Royal Crown Company, Inc. ("Royal Crown") and
Arby's, Inc. ("Arby's") and the Graniteville Credit Facility and the Bank
Facility have been guaranteed by Triarc. As collateral for such guarantees,
all of the stock of Royal Crown, Arby's, Graniteville (50% of such stock is
subject to a pre-existing pledge of such stock in connection with a Triarc
intercompany note payable to SEPSCO in the principal amount of $26.5
million), National Propane and SEPSCO is pledged.
The Company's debt instruments require aggregate principal payments of
$23.4 million during the remainder of 1995, exclusive of requirements for the
planned early repayment of the 11 7/8% Debentures, consisting of $9.0 million
of payments of term loans under the Graniteville Credit Facility, $8.75
million of payments of term loans under the Bank Facility, $0.4 million of
payments of borrowings under the Mortgage Loan Agreement and $5.25 million of
payments of other debt. In connection with the merger of Public Gas and
National Propane (in order to consolidate the Company's two LP gas operations
within one entity) expected to occur later in the second quarter of 1995, the
Company presently intends to cause SEPSCO to repay the 11 7/8% Debentures
prior to maturity during 1995 with proceeds from a $30.0 million revolving
loan (due 2000) under the Bank Facility (as previously discussed) and the
remaining principal of $15.0 million from SEPSCO's existing cash and
marketable securities ($17.3 million as of March 31, 1995).
Consolidated capital expenditures, excluding properties of business
acquisitions and including capital leases of $2.0 million, amounted to $18.0
million for the three months ended March 31, 1995. The Company expects that
capital expenditures during the remainder of 1995 will approximate $64.0
million, subject to the availability of cash and other financing sources.
These actual and anticipated expenditures are principally those of the
restaurant segment in furtherance of its business strategies, principally for
construction of new restaurants and remodeling of older restaurants
(including the replacement of equipment). The Company anticipates it will
meet its capital expenditures with a portion of the proceeds received from
the Mortgage Loan Agreement, additional borrowings under the Mortgage Loan
Commitment and through leasing arrangements; however, additions to the
capitalized leases of RCAC (the parent of Arby's, the company which comprises
the restaurant segment) are limited to $15.0 million annually for the
aggregate of business acquisitions and capital expenditures, in accordance
with the indenture pursuant to which the 9 3/4% Senior Notes were issued (of
which approximately $4.4 million has been used through March 31, 1995). The
Company anticipates financing its capital expenditures for new restaurants
(expected to approximate $33.0 million) with $10.4 million of the remaining
proceeds from borrowings under the Mortgage Loan Agreement and borrowings
under the $50.0 Mortgage Loan Commitment and financing the remaining $19.0
million of planned capital expenditures of the restaurant segment with a
combination of cash flows from operations and/or capital leases to the extent
of their $10.6 million availability.
Cash paid for business acquisitions amounted to $9.4 million during the
three months ended March 31, 1995 almost entirely due to acquisitions of the
Company's restaurant and soft drink segments. In February 1995 the Company's
restaurant segment acquired an additional thirty-five previously franchised
restaurants for cash of $6.4 million and the assumption of $2.4 million of
capitalized lease obligations. In January 1995 the Company's soft drink
segment acquired the trademark and distribution rights for C&C products and
distribution rights for the soft drink segment's branded products in the New
York metropolitan area and existing inventory for cash of $2.9 million. In
furtherance of the Company's growth strategy, the Company will consider
additional selective acquisitions, as appropriate, to build and strengthen
its existing businesses. In connection therewith, the Company's restaurant
segment signed a letter of intent to purchase sixteen franchised restaurants
in Canada (expected to be consummated later in the second quarter of 1995)
for cash of approximately $3.8 million and the assumption of approximately
$2.0 million of capitalized leases.
Under a program announced in late 1994, management of the Company has
been authorized, when and if market conditions warrant, to repurchase, until
June 1995, up to $20.0 million of its Class A Common Stock. Under this
program, the Company repurchased 42,200 shares of Class A Common Stock during
the first quarter of 1995 for an aggregate cost of $0.5 million. As of March
31, 1995 $18.5 million remains under the $20.0 million authorization. Such
repurchases may continue through June 30, 1995 based on market conditions and
the availability of funds for such purchases.
As of March 31, 1995 the Company's principal cash requirements for the
remainder of 1995 consist principally of capital expenditures of
approximately $64.0 million to the extent not leased, debt principal payments
aggregating $68.4 million (including the intended repayment prior to maturity
of the 11 7/8% Debentures), $3.8 million for the acquisitions noted above and
funding for additional acquisitions, if any, and funding for any requirements
related to the stock repurchase program. The Company anticipates meeting
such requirements through existing cash and cash equivalents and marketable
securities, cash flows from operations, proceeds from borrowings under the
Mortgage Loan Agreement, additional borrowings under the Mortgage Loan
Commitment, borrowings available under Graniteville's and National Propane's
credit facilities, and financing a portion of its capital expenditures
through capital leases and operating lease arrangements. The ability of the
Company to meet its long-term cash requirements is dependent upon its ability
to obtain and sustain sufficient cash flows from operations supplemented as
necessary by potential financings to the extent obtainable.
Triarc
Triarc is a holding company whose ability to meet its cash requirements
is primarily dependent upon cash flows from its subsidiaries including loans
and cash dividends to Triarc by subsidiaries and reimbursement by
subsidiaries to Triarc in connection with the providing of certain management
services and payments under certain tax sharing agreements with certain
subsidiaries.
Under the terms of the various indentures, Triarc's principal
subsidiaries are unable to pay any dividends or make any loans or advances to
Triarc for the remainder of 1995, except for the following. Under the terms
of its Bank Facility National Propane has $5.0 million available for the
payment of dividends with an additional $30.0 million available which would
be restricted to the redemption of SEPSCO's 11 7/8% Debentures which Triarc
presently intends to cause SEPSCO to repay if and when the merger of Public
Gas and National Propane is consummated. Under the indenture related to the
11 7/8% Debentures, SEPSCO was unable to pay any cash dividends to Triarc as
of March 31, 1995, but may make loans or advances to Triarc and its
subsidiaries. If and when the merger of Public Gas with National Propane is
consummated and the 11 7/8% Debentures are repaid, the restriction on
SEPSCO's ability to pay cash dividends to Triarc would be removed.
As of March 31, 1995, Triarc had outstanding external indebtedness
consisting of a $37.4 million note (including interest capitalized as
additional principal of $3.2 million) issued in connection with the
commutation of certain insurance obligations. In addition, Triarc owed
subsidiaries an aggregate principal amount of $233.1 million, consisting of
notes in the principal amounts of $49.3 million and $72.4 million owed to CFC
Holdings and Graniteville, respectively (which bear interest at 9.5%),
balances of $81.4 million of advances owed to National Propane (which bear
interest at prime plus 1%) and $26.5 million and $3.5 million of notes
payable to SEPSCO (which bear interest at 13% and 10.25%, respectively). Of
the above indebtedness to subsidiaries, only the note payable to Graniteville
requires the payment of cash interest (20% of the interest payment of April
15, 1995 and 40% of the payments of October 15, 1995 and thereafter). As of
March 31, 1995 Triarc had notes receivable from RCAC and its subsidiaries in
the aggregate amount of $25.5 million (of which $22.7 million bears an
interest rate of 11.875% and $2.8 million bears a rate of 9.5%).
Triarc expects its significant cash requirements for the remainder of
1995 will be limited to general corporate expenses including cash used in
operations, loans or advances to the restaurant segment, as necessary, to
enable it to meet its capital expenditure requirements, cash requirements for
its facilities relocation and corporate restructuring accruals of $2.3
million and required interest payments of $2.1 million on its note payable to
Graniteville (see above). Triarc believes that its expected sources of cash,
including $6.0 million of repayments on notes receivable and $6.75 million of
loans from RCAC or its subsidiaries received in May 1995, reimbursement of
general corporate expenses from subsidiaries in connection with management
services agreements to the extent such subsidiaries are able to pay and net
payments received under tax sharing agreements with certain subsidiaries,
which the Company does not anticipate having to remit to the IRS due to the
availability of operating loss, depletion and tax credit carryforwards, will
be sufficient to enable it to meet its short-term cash needs.
RCAC
As of March 31, 1995, RCAC's principal cash requirements for the
remainder of 1995, exclusive of operating cash flows, consist principally of
capital expenditures of approximately $52.0 million to the extent not leased,
$3.8 million for the pending acquisition noted above, funding for additional
acquisitions, if any, and debt (including borrowings under the Mortgage Loan
Agreement) and affiliated note principal repayments of $17.6 million, of
which $9.5 million of such affiliated note repayments were made from the
proceeds of borrowings under the Mortgage Loan Agreement. RCAC anticipates
meeting such requirements through cash flows from operations, borrowings
under the Mortgage Loan Agreement, additional borrowings under the Mortgage
Loan Commitment for new restaurants, borrowings and capital contributions to
the extent available from Triarc and its subsidiaries, and financing a
portion of its capital expenditures through capital leases and operating
lease arrangements. The ability of the Company to meet its long-term cash
requirements is dependent upon its ability to obtain and sustain sufficient
cash flows from operations supplemented as necessary by potential financings
to the extent obtainable.
Graniteville and National Propane
The Company expects that the continuing positive operating cash flows
of Graniteville and National Propane and available borrowings, if required,
under the Graniteville Credit Facility and the Bank Facility will be
sufficient to enable those subsidiaries to meet their 1995 cash requirements.
SEPSCO
The Company expects that SEPSCO's existing cash and cash equivalents
and marketable securities of $17.3 million at March 31, 1995, supplemented by
collection of a $9.5 million note receivable from RCAC in connection with the
Mortgage Loan Agreement financing will be more than adequate to meet its
contractual cash requirements.
Discontinued Operations
As of March 31, 1995 the Company has completed the sale of
substantially all of its discontinued operations but there remain certain
liabilities to be liquidated (the estimates of which have been accrued) as
well as certain contingent assets (principally two notes from the sale of the
refrigeration business) which may be collected, the benefits of which,
however, have not been recorded.
Contingencies
The Company continues to have legal and environmental contingencies of
the same nature and general magnitude as those described in "Item 7. -
Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the Form 10-K. In connection with the Settlement
Agreement (see Note 4 to the accompanying condensed consolidated financial
statements) and as described in the Form 10-K, the Company received an
indemnification from the Posner Entities of any claims or expenses incurred
after December 1, 1994 involving certain litigation relating to the Company
and certain of its former affiliates.
After considering amounts provided in previous periods, the Company
does not believe that the contingencies referred to above, as well as
ordinary routine litigation, will have a material adverse effect on its
consolidated financial position or results of operations.
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 5. Other Information
Effective as of May 1, 1995, RC/Arby's Corporation ("RCAC") and its
affiliates entered into a series of transactions pursuant to which two new
wholly-owned subsidiaries of RCAC, Arby's Restaurant Development Corporation
("ARDC") and Arby's Restaurant Holding Company ("ARHC"), obtained ownership
of approximately 53 Arby's restaurants, in the aggregate, from RCAC and
Arby's, Inc. ("Arby's"). In connection therewith, among other things, RCAC
entered into contribution agreements with each of ARDC and ARHC to convey the
real property and improvements relating to 37 and two Arby's restaurants to
ARDC and ARHC, respectively. Arby's also entered into a purchase and sale
agreement with each of ARDC and ARHC pursuant to which ARDC and ARHC
purchased from Arby's ten and four restaurants, respectively, as well as the
personal property and equipment from the 37 and two Arby's restaurants,
respectively, being conveyed through the contribution agreements. ARDC
entered into leases with a new wholly-owned subsidiary of RCAC, Arby's
Restaurant Operations Company ("AROC") for each of the 47 restaurants
acquired by it pursuant to which AROC will operate such restaurants. Triarc
has, under certain circumstances, guaranteed payments by AROC under such
leases. In addition, Arby's entered into license agreements with each of
AROC and ARHC pursuant to which AROC and ARHC will operate the restaurants
with Arby's as franchisor and AROC and ARHC as franchisees. Triarc has,
under certain circumstances, guaranteed the payment by AROC of royalty
payments under AROC's license agreements. Arby's also entered into
management agreements with each of AROC, ARDC and ARHC pursuant to which
Arby's will provide certain management services, as well as financial and
accounting services to such companies.
In connection with the foregoing transactions, ARDC entered into a loan
agreement with FFCA Acquisition Corporation ("FFCA") pursuant to which ARDC
borrowed an aggregate of approximately $29.4 million, of which approximately
$27.7 million is a 20-year loan (the "ARDC Loan") secured by substantially
all of the assets of ARDC, including the 47 Arby's restaurants and equipment
acquired by ARDC as described above, and approximately $1.7 million is a
seven-year loan secured by such equipment (the "ARDC Equipment Loan"). The
ARDC Loan is repayable in equal monthly installments over the 20-year term of
the loan and bears interest at the rate of 11.5% per annum, subject to
adjustment, on a note by note basis, if the gross sales of the related Arby's
restaurant exceeds a specified amount (participating interest). ARDC may, at
its option, convert all or a portion of the ARDC Loan from a participating
rate of interest to the payment of "additional interest," pursuant to which
interest on each note would increase bi-annually by an amount equal to
approximately 4% of the then applicable monthly loan repayment amount. The
ARDC Loan matures on May 1, 2015. The ARDC Equipment Loan is repayable in
equal monthly installments over the seven year term of the loan and bears
interest at the rate of 11.5% per annum. The ARDC Equipment Loan matures on
May 1, 2002. The assets of ARDC, which secure the ARDC Loan and the ARDC
Equipment Loan, will not be available to pay creditors of Triarc, RCAC or
Arby's until the ARDC Loan has been repaid in full.
ARHC also entered into a financing transaction with FFCA pursuant to
which it borrowed an aggregate of approximately $7.9 million, of which
approximately $6.7 million is a 20-year loan (the "ARHC Loan") secured by
substantially all of the assets of ARHC, including the six Arby's restaurants
and equipment acquired by ARHC as described above and approximately $1.2
million is a seven-year loan secured by such equipment (the "ARHC Equipment
Loan"). The ARHC Loan bears interest at the same annual interest rate as the
ARDC Loan, provides for the payment of participating and additional interest,
as described above, and is repayable in equal monthly installments. The ARHC
Loan matures on May 1, 2015. The ARHC Equipment Loan is repayable in equal
monthly installments over the seven-year term of the loan and bears interest
at the rate of 11.5% per annum. The ARHC Equipment Loan matures on May 1,
2002. Triarc has guaranteed repayment by ARHC of the ARHC Loan and the ARHC
Equipment Loan.
The Company, ARDC, ARHC and FFCA also executed a commitment letter
pursuant to which, in order to facilitate the building of new Arby's
restaurants, ARDC and ARHC will be able to borrow an additional $50 million,
in the aggregate, over the next twelve months on substantially the same terms
as described above.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.1 - Third Amendment dated as of March 31, 1995 to the
Revolving Credit and Term Loan Agreement, dated as of
October 7, 1994, among National Propane Corporation,
The Bank of New York, as agent, The First National
Bank of Boston and Internationale Nederlanden (U.S.)
Capital Corporation, as co-agents, and the lenders
party thereto.
4.2 - Loan Agreement dated as of May 1, 1995 by and between
FFCA Acquisition Corporation and Arby's Restaurant
Development Corporation, incorporated herein by
reference to Exhibit 4.1 to RC/Arby's Corporation
Quarterly Report on Form 10-Q dated March 31, 1995
(SEC File No. 0-20286).
27.1- Financial Data Schedule for the fiscal quarter ended
March 31, 1995, submitted to the Securities and
Exchange Commission in electronic format.
(b) Reports on Form 8-K
The registrant filed a report on Form 8-K on January
11, 1995 with respect to the closing of the
Settlement Agreement among the registrant, Security
Management Corp., Victor Posner Trust No. 6 and
Victor Posner.
The registrant filed a report on Form 8-K on March
29, 1995 pursuant to which the registrant filed
certain exhibits required to be filed in connection
with its Annual Report on Form 10-K for the year
ended December 31, 1994.
<PAGE>
TRIARC COMPANIES, 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.
TRIARC COMPANIES, INC.
Date: May 15, 1995 By: /S/ JOSEPH A. LEVATO
____________________________________
Joseph A. Levato
Executive Vice President and
Chief Financial Officer
(On behalf of the Company)
By: /S/ FRED H. SCHAEFER
___________________________________
Fred H. Schaefer
Vice President and
Chief Accounting Officer
(Principal accounting officer)
<PAGE>
CONFORMED COPY
THIRD AMENDMENT, dated as of March 31, 1995 (this "Amendment"),
to the REVOLVING CREDIT AND TERM LOAN AGREEMENT, dated as of October 7, 1994
(as amended and as the same may be further amended, supplemented, modified or
extended from time to time, the "Agreement"), among NATIONAL PROPANE
CORPORATION, a Delaware corporation (the "Borrower"), each of the several
lenders from time to time parties thereto (each a "Lender" and, collectively,
the "Lenders"), THE BANK OF NEW YORK, as Administrative Agent for the Lenders
(the "Administrative Agent") and THE FIRST NATIONAL BANK OF BOSTON and
INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL CORPORATION, as Co-Agents.
W I T N E S S E T H:
WHEREAS, under the Agreement there are currently outstanding
certain term loans (referred to therein as the "Tranche A Term Loans" and the
"Tranche B Term Loans") in the principal amounts of $60,000,000 and
$30,000,000, respectively, and there is available to the Borrower a revolving
credit facility (referred to therein as the "Revolving Credit Commitment") in
the amount of $40,000,000 a portion of which (referred to therein as the
"Letter of Credit Sublimit") may be utilized by the issuance of letters of
credit for the account of the Borrower, the outstanding balance of a portion
of which (the "Acquisition Sublimit") is to be converted to term loans
(referred to therein as the "Tranche D Term Loans") on the third anniversary
of the Closing Date (as defined in the Agreement), and there is available an
additional term loan (referred to therein as the "Tranche C Term Loan") in
the amount of $20,000,000, subject, among other things, to (i) the prior or
simultaneous merger of Public Gas Company into the Borrower and (ii) the
prior or simultaneous repayment by Southeastern Public Service Company
("SEPSCO") of certain outstanding bonds (the "SEPSCO Bonds"); and
WHEREAS, it is in the best interests of the Borrower, SEPSCO and
Guarantor to consummate the Public Gas Merger (as defined in the Agreement)
during the second quarter of 1995 and to postpone redemption by SEPSCO of the
SEPSCO Bonds until no later than December 31, 1995; and
WHEREAS, the Borrower desires to borrow the Tranche C Term Loan
and to use the proceeds to prepay the Tranche A Term Loan in part, to obtain
an increase in the Revolving Credit Commitment by $20,000,000 and to obtain a
letter of credit the proceeds of which are to be used to make a Restricted
Payment (as defined in the Agreement) previously contemplated to be made from
the proceeds of the Tranche C Term Loan; and
WHEREAS, under the Agreement, various financial covenants are
measured against the Borrower's "Consolidated EBITDA", and for the purpose of
calculating Consolidated EBITDA, as defined in the Agreement, management fees
paid from the Borrower to Triarc Companies, Inc., a Delaware corporation (the
"Guarantor"), are treated as an expense whether they are paid in cash or
accrued; and
WHEREAS, the Borrower and the Guarantor desire to postpone, from
time to time, the payment of all or a portion of the management fees payable
by Borrower to the Guarantor without affecting any of the Borrower's
financial covenants; and
WHEREAS, the parties desire to amend the Agreement to reflect the
foregoing.
NOW, THEREFORE, the parties hereby agree as follows:
Section 1. Definitions; References. Unless otherwise
specifically defined herein, each term used herein which is defined in the
Agreement shall have the meaning assigned to such term in the Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference contained in the Agreement shall, from and after the date
hereof, refer to the Agreement as amended hereby.
Section 2. Revolving Credit Commitment Increase. Effective as
of the date on which the Tranche A Term Loan shall have been prepaid by
$20,000,000 from the proceeds of the Tranche C Term Loan, the Total Revolving
Credit Commitment shall be increased from $40,000,000 to $60,000,000 and
Schedule 1 to the Agreement shall be replaced by Schedule 1 attached hereto.
The Borrower shall execute and deliver to the Revolving Credit Lenders, in
exchange for the Revolving Credit Notes held by them, new Revolving Credit
Notes reflecting the increase in the Total Revolving Credit Commitment.
Section 3. Amendment of Section 1.01(b) of the Agreement.
Section 1.01(b) of the Agreement is hereby amended as follows:
(a) The definition of "Consolidated EBITDA" is hereby amended
to read in its entirety as follows:
"'Consolidated EBITDA' means, for the Borrower for any
period, the sum (without duplication) of (a) the
consolidated net income of the Borrower and its
Subsidiaries for such period, determined in accordance with
GAAP, adjusted to exclude non-recurring gains and losses on
unusual items (including without limitation, Asset Sales);
and (b) income taxes, Consolidated Interest Expense,
depreciation, and amortization (including without
limitation, amortization associated with goodwill, deferred
debt expenses, restricted stock and option costs and non-
competition agreements) and all accrued but unpaid
management fees payable to the Guarantor (including all
such management fees which were previously paid to
Guarantor but have been returned by Guarantor and thus are
owing by Borrower to Guarantor) for such period."
(b) The definition of the term "General Purposes Sublimit" is
amended in its entirety to read as follows:
"'General Purposes Sublimit' means, the $45 million portion
of the Total Revolving Credit Commitment which may, at any
one time, be borrowed for general corporate purposes or
issued as a Letter of Credit or Letters of Credit pursuant
to Section 2.08 hereof, and which is not a part of the
`Acquisition Sublimit'."
(c) The definition of the term "Letter of Credit Sublimit" is
amended in its entirety to read as follows:
"`Letter of Credit Sublimit' means, the $35 million portion
of the General Purposes Sublimit which may at any one time
be outstanding in the form of a Letter or Letters of
Credit."
Section 4. Amendment to Section 2.05(b)(i) of the Agreement.
Section 2.05(b)(i) of the Agreement is hereby amended to read in its entirety
as follows:
"(i) The General Purposes Sublimit, and the Total Revolving
Credit Commitment, shall be reduced by $30,000,000 at the close
of business on December 31, 1995 if the letter of credit
referred to in Section 7.02(a) shall not have been drawn on in
accordance with its terms on or prior to that date. On the
third anniversary of the Closing Date, the Acquisition Sublimit
will terminate, and the Total Revolving Credit Commitment will
be reduced by the amount of the Acquisition Sublimit then in
effect. The Total Revolving Credit Commitment will
automatically reduce by $1,416,666.66 on June 30, 1995,
$1,416,666.67 on December 31, 1995, $1,500,000.00 on June 30,
1996, $1,500,000.00 on December 31, 1996, $1,541,666.67 on
June 30, 1997, $1,541,666.67 on December 31, 1997,
$1,979,166.67 on June 30, 1998, $1,979,166.67 on December 31,
1998, $2,020,833.33 on June 30, 1999 and $2,020,833.33 on
December 31, 1999 (37.5% of each such reduction to be applied
to a reduction of the Acquisition Sublimit as long as the same
shall be in effect and the balance thereof to be applied to a
reduction of the General Purposes Sublimit). The Revolving
Credit Commitment shall be reduced to $0 pursuant to the
mandatory prepayment described in Section 3.08. All such
reductions shall be permanent.
Section 5. Amendment to Section 3.09(a) of the Agreement.
Section 3.09(a) of the Agreement is hereby amended to read in its entirety as
follows:
"Section 3.09. Additional Prepayment Provisions. (a) Pro
Rata Reduction. Each prepayment (other than prepayments of
Revolving Credit Loans required by mandatory reductions and
terminations of the Total Revolving Credit Commitment pursuant
to Section 2.05(b)(i)) (i) shall reduce pro rata each of the
Tranche A Term Loans, Tranche B Term Loans and Tranche D Term
Loans (to the extent they exist) and thereafter shall reduce
pro rata the Tranche C Loans and thereafter shall reduce pro
rata the Total Revolving Credit Commitment and (ii) shall
reduce the installments of each such Loan pro rata among their
maturities; provided that any such reduction in the Total
Revolving Credit Commitment (other than a mandatory reduction
pursuant to Section 2.05((b)(i)) shall first be applied to the
Acquisition Sublimit and thereafter to the General Purposes
Sublimit; and provided, further, that the prepayment from
proceeds of the Tranche C Term Loan shall reduce only the
Tranche A Term Loans. At the time of each such reduction of
the Total Revolving Credit Commitment, the Borrower shall be
required to prepay Revolving Credit Loans to the extent that
the aggregate outstanding principal amount of Revolving Credit
Loans and outstanding Letter of Credit Obligations would
otherwise exceed the reduced Total Revolving Credit
Commitment."
Section 6. Amendment to Section 4.06 of the Agreement.
Section 4.06 of the Agreement is hereby amended to read in its entirety as
follows:
"Section 4.06 Use of Proceeds. It is understood that funds
provided by (a) Revolving Credit Loans made and Letters of
Credit issued under the General Purposes Sublimit may be used
for general corporate purposes of the Borrower (b) Revolving
Credit Loans made under the Acquisition Sublimit may be used
only for the purpose of making Permitted Acquisitions, (c)
Tranche A Term Loans and Tranche B Term Loans may be used for
the purpose of repaying the Subordinated Debt in full, (d)
Revolving Credit Loans, Tranche A Term Loans and Tranche B Term
Loans may be used for the purpose of making all or part of a
Restricted Payment or Payments to the Guarantor or its
Affiliates and (e) Tranche C Term Loans may be used only to
prepay $20,000,000 of the Tranche A Term Loan."
Section 7. Amendment of Section 7.02 of the Agreement. Section
7.02(a) of the Agreement is hereby deleted in its entirety and replaced with
the following:
"(a) At the request of the Borrower the Administrative Agent
shall have issued a letter or letters of credit pursuant to
Section 2.08 not to exceed the aggregate amount of $30,000,000
expiring on December 31, 1995, pursuant to which a drawing may
be made only for the payment of dividends to the Guarantor
which the Guarantor will use for the partial repayment of
intercompany indebtedness of the Guarantor to SEPSCO and/or the
payment of dividends to SEPSCO, provided that, (i) Guarantor
shall have caused SEPSCO to give the trustee for the SEPSCO
Bonds irrevocable notice of redemption of all of the SEPSCO
Bonds then outstanding and (ii) Administrative Agent shall have
received such assurances from the Guarantor as it may
reasonably require that sufficient funds to redeem the portion
of such SEPSCO Bonds in excess of the amount of such letter of
credit drawing will be available to SEPSCO."
The obligations of the Tranche C Term Lenders to make the
Tranche C Term Loans will not be subject to the conditions precedent referred
to in paragraphs (b) and (c) of Section 7.02, but a drawing under the letter
of credit referred to in Section 7.02(a), as amended hereby, will be subject
to the prior satisfaction of those conditions precedent. The issuance of and
payment under such letter of credit will be deemed to constitute the
$30,000,000 Restricted Payment referred to in Section 8.02(e)(i)(B) of the
Agreement.
Section 8. Amendment of Section 8.02(b)(i) of the Agreement.
The proviso in Section 8.02(b)(i) of the Agreement is hereby deleted in its
entirety.
Section 9. Representations and Warranties. The Borrower
represents and warrants to the Administrative Agent and the Lenders (a) that
the execution and delivery of this Amendment by it has been duly authorized
by all necessary corporate action, (b) that this Amendment constitutes the
valid and legally binding obligation of the Borrower enforceable in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally and to general equity principles and (c) the
execution, delivery and performance of this Amendment does not violate or
contravene the terms of the Borrower's charter documents, by-laws or any
agreement or instrument binding on the Borrower or its property.
Section 10. Governing Law. This Amendment shall be governed
by and construed in accordance with the internal laws of the State of New
York.
Section 11. Counterparts. This Amendment may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
Section 12. Effectiveness. The amendment in Section 3(a)
hereof shall become effective upon the execution of this Amendment by the
Borrower, the Guarantor and the Required Banks (as defined in the Agreement).
All other amendments effected hereby shall become effective upon the
execution of this Amendment by the Borrower, the Guarantor and all of the
Lenders.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
NATIONAL PROPANE CORPORATION
By: /s/ Terry D. Weikel
Name: Terry D. Weikel
Title: Senior Vice President & CFO
THE BANK OF NEW YORK, as
Administrative Agent and as a Lender
By: /s/ Robert W. Towns
Name: Robert W. Towns
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Michael Kane
Name: Michael Kane
Title: Managing Director
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Nathan L. Bloch
Name: Nathan L. Bloch
Title: Vice President
INTERNATIONALE NEDERLANDEN
(U.S.) CAPITAL CORPORATION
By: /s/ Robert L. Fellows
Name: Robert L. Fellows
Title: Vice President
USL CAPITAL CORPORATION
By: /s/ Craig F. Bruzzone
Name: Craig F. Bruzzone
Title: Vice President, Municipal
and Corporate Finance
PILGRIM PRIME RATE TRUST
By: /s/ Kathleen Lenarcic
Name: Kathleen Lenarcic
Title: Assistant Portfolio Manager
VAN KAMPEN MERRITT
PRIME RATE INCOME TRUST
By: /s/ Jeffrey W. Maillet
Name: Jeffrey W. Maillet
Title: Vice Pres. & Portfolio Mgr.
Triarc Companies Inc., as Guarantor, hereby consents to the foregoing Third
Amendment
TRIARC COMPANIES, INC.
By: /s/ T. E. Shultz
Vice President & Asst. Treasurer
<PAGE>
SCHEDULE 1
Revolving Credit Commitments
Commitment As
Lender of Effective Date
The Bank of New York $25,384,615.38
Internationale Nederlanden (U.S.) 10,615,384.62
Capital Corporation
The First National Bank of Chicago 9,000,000.00
The First National Bank of Boston 15,000,000.00
$60,000,000.00
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated financial statements included in the accompanying
Form 10-Q of Triarc Companies, Inc. for the three-month period ended March
31, 1995 and is qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<CIK> 0000030697
<NAME> TRIARC COMPANIES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 25,292
<SECURITIES> 9,395
<RECEIVABLES> 163,928
<ALLOWANCES> 0
<INVENTORY> 105,594
<CURRENT-ASSETS> 323,398
<PP&E> 537,143
<DEPRECIATION> 217,813
<TOTAL-ASSETS> 904,096
<CURRENT-LIABILITIES> 182,131
<BONDS> 614,374
<COMMON> 3,398
0
0
<OTHER-SE> 57,626
<TOTAL-LIABILITY-AND-EQUITY> 904,096
<SALES> 285,811
<TOTAL-REVENUES> 297,993
<CGS> 212,947
<TOTAL-COSTS> 212,947
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,757
<INCOME-PRETAX> 12,798
<INCOME-TAX> 6,079
<INCOME-CONTINUING> 6,719
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,719
<EPS-PRIMARY> .23
<EPS-DILUTED> .22
</TABLE>
