- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 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 23,884,129 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
July 31, 1996.
- -------------------------------------------------------------------------------
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, June 30,
1995 (A) 1996
-------- ----
(In thousands)
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents........................... $ 64,205 $ 133,420
Restricted cash and cash equivalents................ 34,033 2,889
Marketable securities............................... 7,397 437
Receivables, net.................................... 168,534 87,588
Inventories......................................... 118,549 58,914
Deferred income tax benefit......................... 8,848 10,630
Prepaid expenses and other current assets .......... 11,262 9,042
---------- ---------
Total current assets.............................. 412,828 302,920
Properties, net...................................... 331,589 213,564
Unamortized costs in excess of net assets of
acquired companies.............................. 227,825 214,080
Unamortized trademarks............................... 57,146 55,176
Deferred costs and other assets...................... 56,578 50,733
---------- ---------
$1,085,966 $ 836,473
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt................... $ 83,531 $ 64,572
Accounts payable.................................... 61,908 44,097
Accrued expenses ................................... 109,119 106,345
---------- --------
Total current liabilities......................... 254,558 215,014
Long-term debt....................................... 763,346 564,566
Deferred income taxes................................ 24,013 23,721
Deferred income and other liabilities................ 23,399 22,975
Stockholders' equity (deficit):
Common stock........................................ 3,398 3,398
Additional paid-in capital.......................... 162,020 161,468
Accumulated deficit................................. (97,923) (108,259)
Treasury stock...................................... (45,931) (45,928)
Other ............................................. (914) (482)
---------- ---------
Total stockholders' equity ....................... 20,650 10,197
---------- ---------
$1,085,966 $ 836,473
========== =========
</TABLE>
(A) Derived from the audited consolidated financial statements as of
December 31, 1995.
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Six months ended
June 30, June 30,
------------------ ----------------
1995 1996 1995 1996
---- ---- ---- ----
(In thousands except per share amounts)
(Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Net sales..............................$265,907 $231,896 $551,718 $ 548,337
Royalties, franchise fees and other
revenues........................... 13,374 14,581 25,556 27,033
-------- -------- -------- ---------
279,281 246,477 577,274 575,370
-------- -------- -------- ---------
Costs and expenses:
Cost of sales...........................203,725 159,529 416,672 395,452
Advertising, selling and distribution... 31,006 39,592 58,968 72,100
General and administrative.............. 32,271 29,646 64,614 64,688
-------- -------- -------- ---------
267,002 228,767 540,254 532,240
-------- -------- -------- ---------
Operating profit ...................... 12,279 17,710 37,020 43,130
Interest expense.........................(20,374) (18,922) (39,131) (41,063)
Other income, net........................ 10,018 559 16,832 1,797
-------- -------- -------- ---------
Income (loss) before income taxes and
extraordinary charges............... 1,923 (653) 14,721 3,864
Provision for income taxes............... (913) (2,930) (6,992) (5,662)
-------- -------- -------- ---------
Income (loss) before extraordinary
charges........................... 1,010 (3,583) 7,729 (1,798)
Extraordinary charges.................... -- (7,151) -- (8,538)
-------- -------- -------- ---------
Net income (loss)......................$ 1,010 $(10,734) $ 7,729 $ (10,336)
======= ======== ======== =========
Income (loss) per share:
Income (loss) before extraordinary
charges............................ $ .03 $ (.12) $ .26 $ (.06)
Extraordinary charges.................. -- (.24) -- (.29)
------- -------- -------- ---------
Net income (loss)......................$ .03 $ (.36) $ .26 $ (.35)
======= ======== ======== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended
June 30,
------------------
1995 1996
---- ----
(In thousands)
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss).............................................$ 7,729 $(10,336)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization of properties................ 18,488 17,668
Amortization of costs in excess of net assets of
acquired companies....................................... 3,510 4,556
Amortization of original issue discount and
deferred financing costs ............................... 3,487 3,449
Amortization of trademarks, unearned compensation
and other................................................ 3,650 3,034
Write-off of deferred financing costs and
original issue discount.................................. -- 8,119
Provision for doubtful accounts............................ 962 2,154
Deferred income tax benefit................................ (110) (2,074)
Release of casualty insurance reserves credited
against note payable..................................... -- (3,000)
Loss on sale of textile business........................... -- 500
Gain on sales of timberland................................(11,901) --
Interest expense capitalized and not paid.................. 1,778 --
Other, net................................................. (1,864) (1,549)
Changes in operating assets and liabilities:
Decrease (increase) in:
Restricted cash and cash equivalents.................. (4,078) 31,144
Receivables........................................... (9,637) (12,343)
Inventories........................................... (4,063) (16,659)
Prepaid expenses and other current assets............. (789) 799
Increase (decrease) in accounts payable and
accrued expenses .................................. (9,533) 19,620
------- -------
Net cash provided by (used in) operating activities....... (2,371) 45,082
------- -------
Cash flows from investing activities:
Capital expenditures..........................................(35,469) (11,124)
Business acquisitions......................................... (9,861) (37)
Proceeds from sale of the textile business (net of
estimated post-closing adjustments and expenses
paid of $9,882,000)...................................... -- 247,387
Purchase of marketable securities............................. (7,033) (2,984)
Proceeds from sales of marketable securities.................. 8,781 10,014
Proceeds from sales of non-core businesses and properties..... 17,178 1,125
Other ...................................................... (1,000) (174)
------- -------
Net cash provided by (used in) investing activities........(27,404) 244,207
------- -------
Cash flows from financing activities:
Repayments of long-term debt (including $191,438,000 of
long-term debt repaid in connection with the sale
of the textile business).................................(24,022) (254,326)
Proceeds from long-term debt.................................. 43,917 37,427
Payment of deferred financing costs........................... (3,370) (1,745)
Other .................................................. (545) (1,193)
------- --------
Net cash provided by (used in) financing activities........ 15,980 (219,837)
------- --------
Net cash provided by (used in) continuing operations...........(13,795) 69,452
Net cash used in discontinued operations....................... (1,333) (237)
------- ---------
Net increase (decrease) in cash and cash equivalents...........(15,128) 69,215
Cash and cash equivalents at beginning of period............... 80,064 64,205
------- --------
Cash and cash equivalents at end of period.....................$64,936 $133,420
======= ========
See accompanying notes to condensed consolidated financial statements.
4
</TABLE>
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
June 30, 1996
(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, 1995 and June
30, 1996 and its results of operations for the three-month and six-month periods
ended June 30, 1995 and 1996 and its cash flows for the six-month periods ended
June 30, 1995 and 1996. 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, 1995 ("Form 10-K").
The accompanying condensed consolidated financial statements include the
results of operations and financial position of Mistic (see Note 9) subsequent
to its acquisition on August 9, 1995 and the results of operations and financial
position of the Textile Business (see Note 10) through its sale on April 29,
1996.
Certain amounts included in the prior periods' condensed consolidated
financial statements have been reclassified to conform with the current periods'
presentation.
(2) Inventories
The following is a summary of the components of inventories:
December 31, June 30,
1995 1996
---- ----
(In thousands)
Raw materials.................................... $ 40,195 $28,382
Work in process................................... 6,976 523
Finished goods.................................... 71,378 30,009
-------- -------
$118,549 $58,914
======== =======
(3) Properties
The following is a summary of the components of properties, net:
December 31, June 30,
1995 1996
---- ----
(In thousands)
Properties, at cost...................................$ 556,390 $375,779
Less accumulated depreciation and amortization......... 224,801 162,215
-------- --------
$331,589 $213,564
======== ========
(4) Long-Term Debt
On May 16, 1996 C.H. Patrick and Co., Inc. ("C.H. Patrick"), a wholly-owned
subsidiary of TXL Corp. (formerly Graniteville Company ("Graniteville")), a
wholly-owned subsidiary of the Company, entered into a $50,000,000 revolving
credit and term loan facility (the "Patrick Facility"). The Patrick Facility
consists of revolving loans (the "Revolving Loans") under a $15,000,000
revolving credit facility and two term loans (the "Term Loans") in initial
amounts aggregating $35,000,000 ($34,437,500 outstanding as of June 30, 1996).
The $36,000,000 initial borrowing under the Patrick Facility consisted of
$1,000,000 of Revolving Loans and $35,000,000 of the Term Loans (the proceeds of
the Term Loans were dividended to Triarc). Through July 29, 1996 borrowings
5
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
June 30, 1996
(Unaudited)
under the Patrick Facility bore interest at a base rate (the "Base Rate")
representing the higher of the prime rate or 1/2% over the Federal funds rate.
Subsequent thereto, borrowings bear interest at rates based either on the 30,
60, 90 or 180-day London Interbank Offered Rate ("LIBOR") or the Base Rate, at
the option of C.H. Patrick. Revolving Loans and one of the two Term Loans in the
amount of $15,000,000 bear interest at 2 3/4% over LIBOR or 1 3/4% over the Base
Rate and the Term Loan in the amount of $20,000,000 bears interest at 3 1/4%
over LIBOR or 2 1/4% over the Base Rate. Revolving Loans mature in full in 2001
and the remaining $34,437,500 of Term Loans amortize in annual amounts
commencing at $1,125,000 in the remainder of 1996 increasing annually to
$10,437,500 in 2002 with a final payment of $3,062,500 due in March 2003. The
borrowing base for revolving credit loans is the excess of (i) 85% of eligible
accounts receivable, (ii) 75% of accounts receivable due from the buyer of the
Textile Business (see Note 10), (iii) the lesser of (a) 50% of eligible
inventory and (b) $10,000,000 and (iv) any amounts deposited with the lenders in
respect of letter of credit liabilities over $50,000. The Patrick Facility
agreement includes certain restrictive covenants including financial amount and
ratio tests and, except for the aforementioned $35,000,000 dividend paid to
Triarc, a restriction on the payment of dividends and advances. Borrowings under
the Patrick Facility are guaranteed by Triarc and are secured by the capital
stock and substantially all of the assets of C.H. Patrick. C.H. Patrick incurred
fees and costs of approximately $1,800,000 in connection with the Patrick
Facility which will be deferred and amortized using the interest rate method
over the term of the Patrick Facility borrowings.
(5) Extraordinary Charges
In connection with the February 22, 1996 and April 29, 1996 early
extinguishment of the Company's 11 7/8% senior subordinated debentures due
February 1, 1998 and all of the debt of Graniteville, including the Graniteville
credit facility, in connection with the sale of the Textile Business (see Note
10), respectively, the Company recognized extraordinary charges consisting of
the following:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, 1996 June 30, 1996
------------- -------------
(In thousands)
<S> <C> <C>
Write-off of unamortized deferred financing costs........$ 5,985 $ 6,343
Write-off of unamortized original issue discount......... -- 1,776
Prepayment penalties (including minimum commissions
through April 1999)................................. 5,519 5,519
-------- -------
11,504 13,638
Income tax benefit...................................... 4,353 5,100
-------- -------
$ 7,151 $ 8,538
======== =======
</TABLE>
(6) Income (Loss) Per Share
The number of common shares used in the calculations of income (loss) per
share were as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
----------------- -----------------
1995 1996 1995 1996
---- ---- ---- ----
(In thousands)
<S> <C> <C> <C> <C>
Weighted average number of common shares
outstanding...............................29,913 29,916 29,617 29,916
Common equivalent shares-effect of dilutive
stock options.............................. 335 -- 242 --
------ ------ ------ ------
Common and common equivalent shares .........30,248 29,916 29,859 29,916
====== ====== ====== ======
Fully diluted income (loss) per share is not applicable for any period since
contingent issuances of common shares would have been antidilutive or had no
effect on income (loss) per share.
</TABLE>
6
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
June 30, 1996
(Unaudited)
(7) Transactions with Related Parties
The Company continues to have related party transactions of the same nature
and general magnitude as those described in Note 29 to the consolidated
financial statements contained in the Form 10-K.
(8) Contingencies
The Company continues to have legal and environmental contingencies of the
same nature and general magnitude as those described in Note 26 to the
consolidated financial statements contained in the Form 10-K. After considering
amounts provided in previous periods, the Company does not believe that these
contingencies, as well as ordinary routine litigation, will have a material
adverse effect on its consolidated financial position or results of operations.
(9) Mistic Acquisition
On August 9, 1995 Mistic Brands, Inc. ("Mistic"), a wholly-owned subsidiary
of Triarc, acquired (the "Mistic Acquisition") substantially all of the assets
and operations, subject to related operating liabilities, as defined, of certain
companies (the "Acquired Business") which develop, market and sell carbonated
and non-carbonated fruit drinks, ready-to- drink brewed iced teas and naturally
flavored sparkling waters. See Note 28 to the consolidated financial statements
contained in the Form 10-K for a more complete discussion of the Mistic
Acquisition.
The results of operations of the Acquired Business have been included in the
accompanying condensed consolidated statements of operations from the date of
acquisition. The following unaudited supplemental pro forma information of the
Company for the six months ended June 30, 1995 gives effect to the Mistic
Acquisition and related financing as if the transactions had been consummated on
January 1, 1995. The unaudited supplemental pro forma condensed financial
information is presented for comparative purposes only and does not purport to
be indicative of the actual results of operations had the Mistic Acquisition
actually been consummated on January 1, 1995 or of the future results of
operations of the combined company and are as follows (in thousands except per
share amount):
Revenues..........................................................$641,030
Operating profit.................................................. 33,274
Net income........................................................ 2,418
Net income per share.............................................. 0.08
(10) Sale of Textile Business
On April 29, 1996, the Company completed the sale (the "Graniteville Sale")
of its textile business segment other than the specialty dyes and chemicals
business of C.H. Patrick and certain other excluded assets and liabilities (the
"Textile Business"), to Avondale Mills, Inc. ("Avondale"), for $257,269,000 in
cash, subject to certain post-closing adjustments (of which $5,000,000 was paid
in May 1996). Avondale assumed all liabilities relating to the Textile Business
other than income taxes, long-term debt of $191,438,000 which was repaid at the
closing and certain other specified liabilities. In connection with the
Graniteville Sale, Avondale and C.H. Patrick have entered into a 10-year supply
agreement pursuant to which C.H. Patrick is supplying textile dyes and chemicals
to the combined Graniteville/Avondale business. C.H. Patrick's right to supply
Avondale is conditioned upon certain bidding procedures which could result in
Avondale purchasing the products from another seller. As a result of the
Graniteville Sale, the Company recorded an estimated pre-tax loss of $500,000
(including an $8,367,000 write-off of unamortized goodwill which has no tax
benefit) and an income tax provision of $3,000,000 resulting in a loss of
$3,500,000 (exclusive of the extraordinary charge discussed in Note 5 above).
Such amounts are subject to certain post-closing adjustments as noted above. As
previously set forth, the results of operations of the Textile Business have
been included in the accompanying condensed consolidated statements of
operations through April 29, 1996. See Note 11 for supplemental pro forma
information for the six-month period ended June 30, 1996 giving effect to the
sale of the Textile Business.
7
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
June 30, 1996
(Unaudited)
The assets and liabilities of the Textile Business sold and a reconciliation
to the cash proceeds received to date from the sale of the Textile Business, net
of estimated post-closing adjustments and expenses paid to date of $9,882,000,
are as follows (in thousands):
Receivables, net................................................$ 91,135
Inventories...................................................... 76,294
Prepaid expenses and other current assets........................ 1,421
Accounts payable and accrued expenses............................(39,497)
Properties, net..................................................111,039
Unamortized costs in excess of net assets of acquired companies.. 8,367
Other non-current liabilities, net............................... (872)
--------
Net assets of the Textile Business..........................247,887
Pre-tax loss on sale of Textile Business......................... (500)
--------
Proceeds from sale of the Textile Business.................$247,387
========
(11) Subsequent Events
Propane Transactions
In July 1996 National Propane Partners, L.P. (the "Partnership"), a newly
formed limited partnership organized to acquire, own and operate the propane
business of National Propane Corporation ("National Propane"), a wholly-owned
subsidiary of the Company, consummated an initial public offering of an
aggregate 6,301,550 of its limited partner interest common units (the "Common
Units"), representing an approximate 55.8% interest in the Partnership, for an
offering price of $21.00 per Common Unit aggregating $132,333,000 before
underwriting discounts and commissions and other expenses related to the
offering. The sale of such limited partner interests is expected to result in an
after-tax gain to the Company of approximately $48,000,000, subject to
finalization, which will be recorded during the third quarter of 1996. The
Partnership concurrently issued to National Propane 4,533,638 subordinated
units, representing an approximate 40.2% subordinated general partner interest
in the Partnership, as well as a combined aggregate 4.0% unsubordinated general
partner interest in the Partnership and a subpartnership, National Propane, L.P.
(the "Operating Partnership"). In connection therewith, National Propane
transferred substantially all of its propane-related assets and liabilities
(principally other than a receivable from Triarc, deferred financing costs and
net income tax liabilities of $81,392,000, $4,102,000 and $19,970,000,
respectively) to the Operating Partnership. Further, on July 2, 1996 the
Operating Partnership issued $125,000,000 of 8.54% first mortgage notes due June
30, 2010, (the "First Mortgage Notes" - see below) to institutional investors
and repaid $128,469,000 of National Propane's long-term debt (including
$123,188,000 of outstanding borrowings under National Propane's existing bank
facility). The early extinguishment of National Propane's long-term debt on July
2, 1996 will result in an extraordinary charge for the write-off of unamortized
deferred financing costs and prepayment penalties, net of income tax benefit, in
the third quarter of 1996 of $2,616,000.
The following unaudited supplemental pro forma condensed consolidated summary
operating data of the Company for the six-month period ended June 30, 1996 gives
effect to the sale of the Textile Business and the repayment of related debt
(see Note 10) and, in a second step, the initial public offering of the
Partnership and related transactions discussed above, as if such transactions
had been consummated as of January 1, 1996. Such pro forma information does not
purport to be indicative of the Company's actual results of operations had such
transactions actually been consummated on January 1, 1996 or of the Company's
future results of operations and are as follows (in thousands except per share
amount):
8
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Continued)
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma for
the Sale of the
Pro Forma Textile Business and
for the Sale of the Partnership
the Textile Initial Public
Business Offering
-------- --------
<S> <C> <C>
Revenues........................................$427,361 $427,361
Operating profit................................ 37,085 36,335
Loss before extraordinary charges............... (310) (1,578)
Loss before extraordinary charges per share..... (0.01) (0.05)
</TABLE>
The First Mortgage Notes issued on July 2, 1996 bear interest at a fixed
annual rate of 8.54% and are due in equal annual amounts of $15,625,000 from
June 2003 through June 2010. The agreement pursuant to which the First Mortgage
Notes were issued contains certain restrictive covenants limiting, among other
items, the incurrence of indebtedness, investments, asset dispositions and
affiliate transactions other than in the normal course of business and restricts
the payment of dividends. The First Mortgage Notes are secured by substantially
all of the assets of the Operating Partnership and are guaranteed by National
Propane.
On July 2, 1996, the Partnership also entered into a $55,000,000 bank credit
facility (the "Propane Bank Credit Facility") with a group of banks. The Bank
Credit Facility includes a $15,000,000 working capital facility (the "Working
Capital Facility") and a $40,000,000 acquisition facility (the "Acquisition
Facility"), the use of which is restricted to business acquisitions and capital
expenditures for growth. The Propane Bank Credit Facility bears interest, at the
Partnership's option, at either (i) LIBOR plus a margin generally ranging from
1% to 1 3/4% or (ii) the higher of (a) the prime rate and (b) the Federal funds
rate plus 1/2 of 1%, in either case, plus a margin of up to 1/4%. The Working
Capital Facility matures in full in July 1999. However, the Partnership must
reduce the borrowings under the Working Capital Facility to $0 for a period of
at least 30 consecutive days in each year between March 1 and August 31. The
Acquisition Facility converts to a term loan in July 1998 and amortizes
thereafter in equal quarterly installments through July 2001. The Propane Bank
Credit Facility agreement contains various covenants which (i) require meeting
certain financial amount and ratio tests and (ii) limit, among other items, the
incurrence of indebtedness, investments, asset dispositions and affiliate
transactions other than in the normal course of business. Obligations under the
Propane Bank Credit Facility are secured by substantially all of the assets of
the Operating Partnership equally and rateably with the First Mortgage Notes and
are guaranteed by National Propane.
National Union Note Repayment
On July 1, 1996 Triarc paid $27,250,000 to National Union Fire Insurance
Company of Pittsburgh, PA ("National Union") in full satisfaction of a 9 1/2%
promissory note payable to National Union (the "National Union Note") with an
outstanding balance of $36,487,000 (including accrued interest of $1,790,000).
As a result of this early extinguishment of debt at a discount from principal,
the Company will recognize an extraordinary gain in the third quarter of 1996 of
$5,752,000, net of related expenses of $250,000 and income taxes of $3,235,000.
The principal balance of the National Union Note is included in "Current portion
of long-term debt" in the accompanying condensed consolidated balance sheet at
June 30, 1996.
9
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
INTRODUCTION
This "Management's Discussion and Analysis of Financial Condition and
Results of Operations" should be read in conjunction with "Item 7. -
Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Annual Report on Form 10-K for the year ended December 31,
1995 ("Form 10-K") of Triarc Companies, Inc. ("Triarc" or, collectively with its
subsidiaries, the "Company"). The recent trends affecting the Company's business
segments are described therein. Certain statements under this caption constitute
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. See "Part II Other Information".
RESULTS OF OPERATIONS
Six Months Ended June 30, 1996 Compared with Six Months Ended June 30, 1995
<TABLE>
<CAPTION>
Revenues Operating Profit
Six months ended Six months ended
June 30, June 30,
---------------- -----------------
1995 1996 1995 1996
---- ---- ---- ----
(In thousands)
<S> <C> <C> <C> <C>
Beverages...........................$ 92,177 $162,334 $ 6,234 $ 12,347
Restaurants..........................125,524 139,719 6,453 7,806
Propane ............................. 76,725 88,298 9,184 10,281
Textiles.............................282,848 185,019 16,688 11,045
Unallocated general corporate
income (expenses) ............... -- -- (1,539)(a) 1,651 (b)
-------- -------- ------- --------
$577,274 $575,370 $37,020 $ 43,130
======== ======== ======= ========
</TABLE>
(a) Includes a $1,691,000 charge for accelerated vesting of restricted
stock of three directors who did not stand for re-election in 1995.
(b) Includes a $3,000,000 release of casualty insurance reserves.
Revenues decreased $1.9 millon to $575.4 million in the six months ended
June 30, 1996.
Beverages - Revenues increased $70.2 million (76.1%) due to (i) $67.9
million of revenues from Mistic Brands, Inc. ("Mistic"), the Company's
new age/premium beverage business acquired August 9, 1995 and (ii) a
$2.5 million increase in finished beverage product sales (as opposed
to concentrate).
Restaurants - Revenues increased $14.2 million (11.3%) due to (i) a
$12.8 million increase in net sales principally resulting from an
average net increase of 50 (15.7%) company-owned restaurants and (ii)
a $1.4 million increase in royalties, franchise fees and other
revenues primarily resulting from an average net increase of 77 (3.1%)
franchised restaurants and a 3.0% increase in average royalty rates
due to the declining significance of older franchise agreements with
lower rates.
Propane - Revenues increased $11.6 million (15.1%) due to higher
volume primarily resulting from the significantly colder winter in
1996 compared with 1995 in virtually all markets where the propane
segment has operations and niche business acquisitions and higher
selling prices resulting from higher propane costs.
Textiles (including specialty dyes and chemicals) - As discussed
further below in "Liquidity and Capital Resources", on April 29, 1996
the Company sold its textile business segment other than
10
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
its specialty dyes and chemical business and certain other excluded
assets and liabilities (the "Textile Business"). Principally as a
result of such sale, revenues of the Textile Business decreased $103.6
million (39.7%) to $157.5 million in the six months ended June 30,
1996 from $261.1 million in the six months ended June 30, 1995. In
addition, lower revenues ($16.2 million) of the Textile Business in
the four-month period ended April 1996 compared with the comparable
1995 period contributed to the decrease principally reflecting lower
volume due to weak demand for utility wear fabrics ($15.9 million).
Overall revenues of the specialty dyes and chemicals business
increased $0.2 million (0.6%) while revenues of this business reported
in consolidated "Net sales" in the accompanying condensed consolidated
statements of operations increased $5.8 million (26.7%) to $27.5
million in the six months ended June 30, 1996 as revenues from sales
of $5.6 million to the purchaser of the Textile Business subsequent to
the April 29 sale of the Textile Business were no longer eliminated in
consolidation as intercompany sales.
Gross profit (total revenues less cost of sales) increased $19.3 million to
$179.9 million in the six months ended June 30, 1996 principally due to the
inclusion of Mistic ($26.5 million) in the 1996 period partially offset by the
effect of the sale of the Textile Business ($9.7 million). In addition, gross
profit was positively impacted by overall higher revenues in the Company's other
businesses partially offset by lower overall gross margins in such businesses.
Beverages - Margins decreased to 53.3% from 66.0% due to the inclusion
in the 1996 period of the lower-margin finished product sales
principally associated with Mistic (39.0%).
Restaurants - Margins decreased to 31.9% from 34.7% due primarily to
(i) higher hardware lease and software amortization costs, (ii)
increased payroll costs as a percentage of net sales resulting from
(a) costs for training of personnel in connection with Roast Town and
multi-brand store conversions and (b) higher fringe benefit costs and
(iii) a slightly lower percentage of royalties, franchise fees and
other revenues to total revenues.
Propane - Margins decreased to 26.5% from 27.2% due to higher propane
costs that could not be fully passed through to customers and a shift
in customer mix toward lower-margin commercial accounts.
Textiles - Margins overall increased to 13.7% from 12.5% reflecting
the greater proportion of higher-margin revenues of specialty dyes and
chemicals to the total revenues of the textile segment. Margins of
specialty dyes and chemicals decreased to 31.1% from 41.0% due to weak
pricing reflecting competitive pressures currently being experienced
in the textile industry.
Advertising, selling and distribution expenses increased $13.1 million to
$72.1 million in the six months ended June 30, 1996 due to (i) $15.2 million of
expenses related to Mistic, (ii) $1.7 million of incremental advertising
expenses of which $1.3 million related to Royal Crown Premium Draft Cola ("Draft
Cola") which was launched in June 1995 and (iii) $1.3 million of higher
advertising costs in the restaurant segment primarily attributable to the
increased number of company-owned restaurants, all partially offset by $4.7
million of decreases reflecting (i) a net reduction in media spending for
branded beverage products and (ii) lower couponing costs reflecting reduced
bottler utilization.
General and administrative expenses increased $0.1 million to $64.7 million
in the six months ended June 30, 1996 as $7.6 million of expenses related to
Mistic was substantially offset by (i) a $3.6 million decrease in the expenses
of the textile segment primarily reflecting the sale of the Textile Business,
(ii) a $3.0 million release of reserves for casualty insurance in the 1996
period and (iii) other net decreases.
11
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
Interest expense increased $1.9 million to $41.1 million in the six months
ended June 30, 1996 due to higher average levels of debt reflecting borrowings
resulting from the Mistic acquisition and financing for capital spending at the
restaurant segment partially offset by repayments prior to maturity of (i)
$191.4 million of debt of the Textile Business in connection with its sale on
April 29, 1996 and (ii) the $36.0 million principal amount of the Company's 11
7/8% senior subordinated debentures due February 1, 1998 (the "11 7/8%
Debentures") on February 22, 1996.
Other income, net decreased $15.0 million to $1.8 million in the six months
ended June 30, 1996. Such decrease principally resulted from net non-recurring
income in the 1995 period including (i) an $11.9 million gain on the sale of
timberland, (ii) a $2.3 million gain related to a January 1995 settlement
agreement with Victor Posner and (iii) a $1.9 million gain on an insurance
recovery relating to fire-damaged equipment, all partially offset by $1.2
million of equity in losses of a Taiwanese joint venture.
The provision for income taxes on the income before income taxes and
extraordinary charges represent effective tax rates of 147% and 48% for the six
months ended June 30, 1996 and 1995, respectively. Such rates are higher than
the Federal income tax statutory rate of 35% principally due to (i) the effects
of amortization of nondeductible costs in excess of net assets of acquired
companies ("Goodwill"), the effect of which is greater in the 1996 period due to
the lower income before income taxes and extraordinary charges and, for the 1996
period, (ii) a $3.0 million income tax provision on a $0.5 million pre-tax loss
on the sale of the Textile Business of which $8.4 million represents the
write-off of unamortized non-deductible Goodwill.
The extraordinary charges in the 1996 period result from the early
extinguishment of all debt of the Textile Business in April 1996 and the 11 7/8%
Debentures in February 1996 and are comprised of the write-off of $6.3 million
of unamortized deferred financing costs and $1.8 million of unamortized original
issue discount, the payment of prepayment penalties and other costs of $5.5
million, net of income tax benefit of $5.1 million.
Three Months Ended June 30, 1996 Compared with Three Months Ended June 30, 1995
<TABLE>
<CAPTION>
Revenues Operating Profit
Three months ended Three months ended
June 30, June 30,
------------------ -----------------
1995 1996 1995 1996
---- ---- ---- ----
(In thousands)
<S> <C> <C> <C> <C>
Beverages................................$ 46,661 $ 92,012 $ 1,553 $ 6,873
Restaurants............................... 68,410 72,623 4,431 5,630
Propane................................... 26,418 28,317 (1,337) (1,943)
Textiles..................................137,792 53,525 7,756 5,501
Unallocated general corporate
income (expenses)..................... -- -- (124) 1,649 (a)
-------- -------- ------- -------
$279,281 $246,477 $12,279 $17,710
======== ======== ======= =======
</TABLE>
(a) Includes a $3,000,000 release of casualty insurance reserves.
Revenues decreased $32.8 million to $246.5 million in the three months ended
June 30, 1996.
Beverages - Revenues increased $45.4 million (97.2%) reflecting (i)
$42.0 million of revenues from Mistic, (ii) a $1.2 million volume
increase in branded concentrate sales reflecting the nonrecurring
effect on the 1995 second quarter of domestic forward buying in
advance of an April 1, 1995 price increase, (iii) a $1.1 million
volume increase in private label concentrate sales and (iv) a $1.0
million volume increase in finished soft drink sales principally
resulting from the timing of the Draft Cola launch.
12
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
Restaurants - Revenues increased $4.2 million (6.2%) due to (i) a $3.0
million increase in net sales resulting from an average net increase
of 28 (8.2%) company-owned restaurants, the effect of which was
partially offset by a 2.3% decline in company-owned same-store sales
and (ii) a $1.2 million increase in royalties, franchise fees and
other revenues due to an average net increase of 80 (3.2%) franchised
restaurants and a 3.6% increase in average royalty rates.
Propane - Revenues increased $1.9 million (7.2%) due to higher selling
prices resulting from higher propane costs and, to a lesser extent,
higher volume, primarily as a result of niche business acquisitions.
Textiles - Principally as a result of the sale of the Textile
Business, revenues decreased $90.3 million (71.2%) to $36.5 million in
April 1996 from $126.8 million in the three months ended June 30,
1995. Overall revenues of the specialty dyes and chemicals business
increased $0.4 million (2.0%) while revenues of this business included
in consolidated "Net sales" in the accompanying condensed consolidated
statements of operations increased $6.0 million (54.3%) to $17.0
million in the three months ended June 30, 1996 as revenues from $5.6
million of sales to the purchaser of the Textile Business subsequent
to the April 29 sale were no longer eliminated in consolidation as
intercompany sales.
Gross profit increased $11.4 million to $86.9 million in the three months
ended June 30, 1996 principally due to the inclusion of Mistic ($16.5 million)
in the 1996 period partially offset by the effect of the sale of the Textile
Business ($7.2 million). In addition, gross profit was positively impacted by
overall higher revenues in the Company's other businesses partially offset by
lower gross margins in such businesses.
Beverages - Margins decreased to 52.6% from 64.8% principally due to
the inclusion in the 1996 period of the lower-margin finished product
sales associated with Mistic (39.3%).
Restaurants - Margins declined to 33.3% from 35.4% due primarily to
higher hardware lease and software amortization costs and increased
payroll costs as a percentage of net sales resulting from (a) costs
for training of personnel in connection with Roast Town and
multi-brand store conversions and (b) higher fringe benefit costs.
Propane - Margins decreased to 16.3% from 16.8% due to higher propane
costs that could not be fully passed through to customers and a shift
in customer mix toward lower-margin commercial accounts.
Textiles - Margins overall increased to 18.2% from 12.1% reflecting
the greater proportion of higher-margin revenues of the specialty dyes
and chemicals business to the total revenues of the textile segment.
Margins of specialty dyes and chemicals decreased to 28.3% from 41.1%
due to weak pricing reflecting competitive pressures currently being
experienced in the textile industry.
Advertising, selling and distribution expenses increased $8.6 million to
$39.6 million in the three months ended June 30, 1996 principally due to $10.0
million of expenses related to Mistic partially offset by (i) $1.2 million of
lower expenses of the textile segment reflecting the sale of the Textile
Business and (ii) a $0.7 million decrease in the expenses of the beverage
segment due to a $1.2 million net reduction in media spending for branded
products partially offset by $0.5 million of incremental advertising expenses
principally related to Draft Cola.
General and administrative expenses decreased $2.6 million to $29.6 million
in the three months ended June 30, 1996 due to (i) a $3.5 million decrease in
the expenses of the textile segment primarily reflecting the sale of the Textile
Business and (ii) a $3.0 million release of reserves for casualty insurance in
the 1996 period, both partially offset by $3.7 million of
13
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
expenses related to Mistic.
Interest expense decreased $1.5 million to $18.9 million in the three months
ended June 30, 1996 due to lower average levels of debt reflecting repayments
prior to maturity of (i) $191.4 million of debt of the Textile Business in
connection with its sale on April 29, 1996 and (ii) the $36.0 million principal
amount of the 11 7/8% Debentures on February 22, 1996, partially offset by
borrowings resulting from the Mistic acquisition and financing for capital
spending at the restaurant segment.
Other income, net decreased $9.5 million to $0.6 million in the three months
ended June 30, 1996. Such decrease principally resulted from net non-recurring
income in the 1995 period including a $10.7 million gain on the sale of
timberland partially offset by $0.9 million of equity in losses of a Taiwanese
joint venture.
The Company recorded a provision for income taxes of $2.9 million despite a
loss before income taxes and extraordinary charges of $0.7 million for the three
months ended June 30, 1996 while the provision for income taxes of $0.9 million
on pre-tax income for the three months ended June 30, 1995 represents an
effective tax rate of 47%. The provision for the 1996 period and the higher
effective tax rate for the 1995 period compared with the Federal income tax
statutory rate of 35% are due to the effect of amortization of Goodwill and, for
the 1996 period, the aforementioned $3.0 million income tax provision on the
$0.5 million pre-tax loss on the sale of the Textile Business.
The extraordinary charge in the 1996 period results from the early
extinguishment of all debt of the Textile Business in April 1996 and is
comprised of the write-off of $6.0 million of unamortized deferred financing
costs, the payment of prepayment penalties and other costs of $5.5 million, net
of income tax benefit of $4.3 million.
LIQUIDITY AND CAPITAL RESOURCES
Consolidated cash and cash equivalents (collectively, "cash") increased
$69.2 million during the six months ended June 30, 1996 to $133.4 million
primarily reflecting cash provided by (i) operating activities of $45.1 million
and (ii) investing activities of $244.2 million partially offset by cash used in
financing activities of $219.8 million. The net cash provided by operating
activities principally reflects cash provided by changes in operating assets and
liabilities of $22.6 million, non-cash charges for (i) depreciation and
amortization of $28.7 million and (ii) the write-off of deferred financing costs
and original issue discount of $8.1 million (see Note 5 to the accompanying
condensed consolidated financial statements) partially offset by a net loss of
$10.3 million. The cash provided by changes in operating assets and liabilities
reflected a decrease in restricted cash and cash equivalents of $31.1 million
including $30.0 million restricted to the repayment of the 11 7/8% Debentures
(see below) and a $19.6 million increase in accounts payable and accrued
expenses partially offset by increases in inventories of $16.7 million and
receivables of $12.3 million. The increase in accounts payable and accrued
expenses was principally due to a $17.1 million increase in accounts payable
reflecting the increase in inventories. The increase in inventories reflected
higher textile segment inventories prior to the sale of the Textile Business
resulting from lower sales of the Textile Business in the first quarter of 1996
compared with the last quarter of 1995 and higher beverage inventories in
anticipation of the peak selling season. The increase in receivables reflected
increased consolidated revenues, exclusive of those attributable to the Textile
Business sold on April 29, 1996, in the second quarter of 1996 compared with the
last quarter of 1995 and slower collections at Royal Crown Company, Inc. ("Royal
Crown"), a wholly-owned subsidiary of RC/Arby's Corporation ("RCAC"), a
wholly-owned subsidiary of Triarc, in the second quarter of 1996 versus the last
quarter of 1995. The Company expects continued positive cash flows from
operations during the remainder of 1996. The net cash provided by investing
activities principally reflected net proceeds from (i) the sale of the Textile
Business discussed below of $247.4 million and (ii) net sales of marketable
securities of $7.0 million (see below) partially offset by capital expenditures
of $11.1 million. The net cash used in financing activities consists of
long-term debt repayments of $254.3 million, including $191.4 million repaid in
connection with the sale of the Textile Business, partially offset by borrowings
of $37.4 million.
14
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
On February 22, 1996 the Company repaid the 11 7/8% Debentures which had
outstanding principal at that date of $36.0 million (carrying value of $34.2
million net of original issue discount of $1.8 million). The cash for such
redemption came from (i) $30.0 million of borrowings in December 1995 under the
bank facility of National Propane Corporation ("National Propane"), an indirect
wholly-owned subsidiary of Triarc, the proceeds of which had been classified as
restricted cash at December 31, 1995 as they were restricted to the redemption
of the 11 7/8% Debentures and (ii) liquidation of $7.0 million of marketable
securities.
On July 1, 1996 Triarc paid $27.3 million to National Union Fire Insurance
Company of Pittsburgh, PA ("National Union") in full satisfaction of a 9 1/2%
promissory note payable to National Union (the "National Union Note") with an
outstanding balance of $36.5 million (including accrued interest of $1.8
million). As a result of this extinguishment of debt, the Company will recognize
an extraordinary gain, net of related expenses and income taxes, in the third
quarter of 1996 of $5.8 million.
On May 16, 1996 C.H. Patrick & Co., Inc. ("C.H. Patrick"), a wholly-owned
subsidiary of TXL Corp. (formerly Graniteville Company ("Graniteville"), a
wholly-owned subsidiary of the Company, entered into a $50.0 million revolving
credit and term loan facility (the "Patrick Facility"). The Patrick Facility
consists of a $15.0 million revolving credit facility and two term loans in
initial aggregate amounts of $35.0 million ($34.4 million outstanding at June
30, 1996). The $36.0 million initial borrowing under the Patrick Facility
consisted of $1.0 million of revolving credit loans and $35.0 million of term
loans (the "Term Loans"), the $35.0 million proceeds of which were dividended to
Triarc. See Note 4 to the accompanying condensed consolidated financial
statements for further discussion of the Patrick Facility.
In July 1996 National Propane Partners, L.P. (the "Partnership"), a newly
formed limited partnership organized to acquire, own and operate the propane
business of National Propane Corporation ("National Propane"), a wholly-owned
subsidiary of the Company, consummated an initial public offering of an
aggregate 6.3 million of its limited partner interest common units (the "Common
Units"), representing an approximate 55.8% interest in the Partnership, for an
offering price of $21.00 per Common Unit aggregating $132.3 million before
underwriting discounts and commissions and other expenses related to the
offering. The sale of such limited partner interests is expected to result in an
after tax-gain to the Company of approximately $48.0 million, subject to
finalization, which will be recorded during the third quarter of 1996. The
Partnership concurrently issued approximately 4.5 million subordinated units
(the "Subordinated Units"), representing an approximate 40.2% subordinated
general partner interest in the Partnership, as well as a combined 4.0%
unsubordinated general partner interest (the "Unsubordinated General Partner
Interest") in the Partnership and a subpartnership, National Propane, L.P. (the
"Operating Partnership") to National Propane. In connection therewith, National
Propane transferred substantially all of its propane-related assets and
liabilities (principally other than a receivable from Triarc, deferred financing
costs and net income tax liabilities of $81.4 million, $4.1 million and $20.0
million, respectively) to the Operating Partnership. Further, on July 2, 1996
the Operating Partnership issued $125.0 million of 8.54% first mortgage notes
due June 30, 2010 (the "First Mortgage Notes") to institutional investors and
repaid $128.5 million of National Propane's long-term debt (including $123.2
million of outstanding borrowings under National Propane's existing bank
facility). The early prepayment of National Propane's long-term debt on July 2,
1996 will result in an extraordinary charge for the write-off of unamortized
deferred financing costs, net of income tax benefit, in the third quarter of
1996 of $2.6 million. The First Mortgage Notes bear interest at a fixed annual
rate of 8.54% and are due in equal annual amounts of $15.625 million from June
2003 through June 2010. On July 2, 1996, the Partnership also entered into a
$55.0 million bank credit facility (the "Propane Bank Credit Facility") with a
group of banks. The Propane Bank Credit Facility includes a $15.0 million
working capital facility and a $40.0 million acquisition facility (the
"Acquisition Facility") the use of which is restricted to business acquisitions
and capital expenditures for growth. As of July 2, 1996 there were no borrowings
under the Propane Bank Credit Facility. See Note 11 to the accompanying
condensed consolidated financial statements for further discussion of the First
Mortgage Notes and the Propane Bank Credit Facility.
On April 29, 1996, the Company completed the sale (the "Graniteville Sale")
of the Textile Business to Avondale Mills, Inc. ("Avondale") for $257.3 million
in cash, before expenses and certain post-closing adjustments (of which $5.0
million
15
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
was paid in May 1996). Avondale assumed all liabilities relating to the Textile
Business other than income taxes, long-term debt of $191.4 million which was
repaid at the closing and certain other specified liabilities. The Graniteville
Sale has resulted in net cash proceeds of $55.9 million after estimated
post-closing adjustments and expenses paid to date and is subject to the payment
of remaining expenses, including income taxes to be paid in cash, currently
estimated to be approximately $12.0 million and the finalization of post-closing
adjustments. The discussion below sets forth the liquidity and capital resources
of the remaining operations of the Company excluding the Textile Business.
Consolidated capital expenditures, including capital leases, amounted to
$11.4 million for the first six months of 1996. The Company expects that capital
expenditures during the remainder of 1996 will approximate $21.0 million. These
anticipated expenditures are principally in the restaurant segment in
furtherance of its business strategies, principally for the conversion of
existing company-owned restaurants to Roast Town and multi-brand concept
restaurants, and, to a lesser extent, construction of new restaurants and
replacement of equipment. As of June 30, 1996 there were approximately $8.0
million of outstanding commitments for capital expenditures. The Company
anticipates that it will meet its capital expenditure requirements through
existing cash, cash flows from operations, leasing arrangements and, to the
extent such capital expenditures relate to the restaurant segment, also through
borrowings under mortgage and equipment note financing agreements (the "FFCA
Loan Agreements") entered into by Arby's Restaurant Development Corporation
("ARDC") and Arby's Restaurant Holding Company ("ARHC"), wholly-owned
subsidiaries of RCAC.
Under the Company's various credit arrangements, which are described in
detail in Note 15 to the consolidated financial statements contained in the Form
10-K as supplemented herein by the disclosure in Notes 4 and 11 to the
accompanying condensed consolidated financial statements relating to the Patrick
Facility and the Propane Bank Credit Facility, the Company has availability as
of June 30, 1996 (July 2, 1996 with respect to the Propane Bank Credit Facility)
as follows: $14.0 million available under the Patrick Facility and $55.0 million
available under the Propane Bank Credit Facility of which $40.0 million was
limited to business acquisitions and capital expenditures for growth. In
addition, under the FFCA Loan Agreements, proceeds of which are limited to
financing new company-owned restaurants, ARDC and ARHC expect to utilize $3.2
million during the remainder of 1996.
Under the Company's various debt agreements, substantially all of Triarc's
and its subsidiaries' assets are pledged as security. In addition, obligations
under RCAC's 9 3/4% senior secured notes due 2000 have been guaranteed by RCAC's
wholly-owned subsidiaries, Royal Crown and Arby's, Inc. ("Arby's"), obligations
under the First Mortgage Notes and the Propane Bank Credit Facility have been
guaranteed by National Propane and obligations under the Patrick Facility,
Mistic's bank facility and $23.4 million of borrowings under the FFCA Loan
Agreements have been guaranteed by Triarc. As collateral for such guarantees,
all of the stock of Royal Crown, Arby's, and Mistic is pledged as well as
approximately 1% of the Unsubordinated General Partner Interest. (The stock of
C.H. Patrick secures the Patrick Facility and the stock of National Propane is
pledged in connection with the Partnership Loan - see below).
As discussed above, $128.5 million of National Propane's long-term debt and
$36.5 million of the National Union Note were repaid subsequent to June 30,
1996. The Company's remaining debt instruments require aggregate principal
payments of $19.9 million (including $15.0 million of Mistic's revolving loans
which must be paid down for thirty consecutive days by March 31, 1997) during
the remainder of 1996.
In furtherance of the Company's growth strategy, the Company will consider
selective acquisitions, as appropriate, to grow strategically and explore other
alternatives to the extent it has available resources to do so. In connection
therewith, in January 1996 Arby's and T.J. Cinnamons, Inc., an operator and
franchisor of retail bakeries specializing in gourmet cinnamon rolls and related
products, reached an agreement in principle through which Arby's will purchase
the trademarks, service marks, recipes and secret formulas of T.J. Cinnamons for
a purchase price of $3.5 million, consisting of an initial cash outlay of
approximately $1.8 million and the balance in the form of a note. The closing is
expected to occur later during the third quarter of 1996, subject to
satisfaction of customary closing conditions. There can be no assurance,
however, that the closing will be consummated. In July 1996 the Operating
Partnership acquired the assets of two propane businesses for cash of $1.0
16
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
million.
The Federal income tax returns of the Company have been examined by the
Internal Revenue Service ("IRS") for the tax years 1985 through 1988. The
Company has resolved all issues related to such audit and in connection
therewith expects to pay approximately $3.5 million in 1996. The IRS is
currently finalizing its examination of the Company's Federal income tax returns
for the tax years from 1989 through 1992 and has issued notices of proposed
adjustments increasing taxable income by approximately $145.0 million, the tax
effect of which has not yet been determined. The Company is contesting the
majority of the proposed adjustments and, accordingly, the amount and timing of
any payments required as a result thereof cannot presently be determined.
However, management of the Company does not believe the resolution of the 1989
through 1992 examination will be finalized in 1996 and, accordingly, no tax
payments will be required in 1996.
Under a program announced in July 1996, management of the Company has been
authorized, when and if market conditions warrant, to repurchase until July
1997, up to $20.0 million of its Class A Common Stock.
As of June 30, 1996 the Company's principal cash requirements, exclusive of
operations, for the remainder of 1996 consist principally of capital
expenditures of approximately $21.0 million, debt principal payments aggregating
$19.9 million (excluding the repayments of (i) National Propane's long-term debt
in connection with the Partnership's initial public offering and (ii) the
National Union Note), distributions to holders of the Common Units (see below),
$1.8 million for the acquisition of T.J. Cinnamons, $1.0 million for the
acquisition of two propane businesses, funding for additional acquisitions if
any, and treasury stock purchases. The Company anticipates meeting such
requirements through existing cash ($133.4 million at June 30, 1996), net cash
proceeds from the Partnership's initial public offering, cash flows from
operations, availability under the Propane Bank Credit Facility and the Patrick
Facility, anticipated borrowings of approximately $3.2 million under the FFCA
Loan Agreements to finance new company-owned restaurants and financing a portion
of its capital expenditures through capital lease arrangements.
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 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.
In connection with the issuance of the First Mortgage Notes and the
Partnership's initial public offering discussed above, on July 2, 1996 Triarc
received an aggregate of $112.2 million. Such amount consisted of a dividend of
$59.3 million (from the proceeds of the First Mortgage Notes), a loan from the
Partnership of $40.7 million (the "Partnership Loan") and payment of previously
unpaid management fees, tax sharing payments and certain other intercompany
indebtedness aggregating $12.2 million. The Partnership Loan bears interest at
13 1/2% payable in cash semi-annually and is due in equal annual amounts of
approximately $5.1 million from June 2003 through June 2010. Concurrently with
the above transactions, an $81.4 million non-interest bearing advance payable to
National Propane was reduced to $30.0 million and converted to a note payable on
demand which bears interest at 13 1/2% payable in cash semi-annually. Triarc
does not anticipate it will be required to make any principal payments on the
$30.0 million note payable during the remainder of 1996; however, if it should
be required to do so, Triarc believes it has adequate cash on hand to make such
payments.
Aside from the aforementioned $59.3 million dividend paid on July 2, 1996
and quarterly distributions, if any, from the Partnership on the Subordinated
Units, Triarc's principal subsidiaries are unable to pay any dividends or make
any loans or advances to Triarc during the remainder of 1996 under the terms of
the various indentures and credit arrangements.
Triarc's indebtedness to subsidiaries has been significantly reduced to
$72.4 million as of July 2, 1996 compared with $229.3 million as of December 31,
1995 principally as a result of dividends or cancellations of such indebtedness
in connection with the Graniteville Sale and the Partnership's initial public
offering. Such $72.4 million of indebtedness
17
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
principally consisted of the $40.7 million Partnership Loan and the remaining
$30.0 million note payable to National Propane and requires no significant
principal payments during the remainder of 1996.
As a result of the Graniteville Sale and subsequent to the Partnership's
initial public offering discussed above, payments received under tax sharing
agreements and the reimbursement of general corporate expenses by the Textile
Business have been eliminated and payments from National Propane and the
Partnership will be limited. Management fees and tax-sharing payments from C.H.
Patrick (which heretofore were a component of the payments from the Textile
Business) and distributions, if any, from the Partnership will partially offset
such decreases. As a result, Triarc will probably experience negative cash flows
from operations for its general corporate expenses for the remainder of 1996.
Triarc's sources of cash consist principally of cash on hand ($108.9 million
as of June 30, 1996), reimbursement of general corporate expenses from
subsidiaries in connection with management services agreements, distributions,
if any, from the Partnership on the Subordinated Units and net payments received
under tax sharing agreements with certain subsidiaries. Such sources will be
sufficient to enable it to meet its short-term cash needs including general
corporate expenses, any required advances to RCAC (see below), up to $3.9
million of remaining commitments for advances to affiliates under loan
agreements and capital expenditures estimated to be $4.7 million.
RCAC
As of June 30, 1996, RCAC's cash requirements for the remainder of 1996
consist principally of capital expenditures of approximately $13.0 million, $1.8
million for the acquisition of certain assets of T.J. Cinnamons noted above,
funding for additional acquisitions, if any, and debt (including capitalized
leases and affiliated notes) principal payments of $12.5 million, subject to
Triarc's requirement for RCAC to repay any or all of the outstanding balance
under the $10.2 million demand promissory note (the "Demand Note") included in
the $12.5 million. RCAC anticipates meeting such requirements through existing
cash and/or cash flows from operations, borrowings under the FFCA Loan
Agreements, capital lease arrangements and, to the extent cash is required other
than for repayments to Triarc under the Demand Note, borrowings from Triarc, to
the extent available. RCAC may seek additional borrowings in the event that cash
generated from the above sources is not sufficient to fund its capital
expenditure requirements.
Mistic
As of June 30, 1996, Mistic's principal cash requirements for the remainder
of 1996 consist principally of $2.5 million of term loan payments under its bank
facility and $0.2 million of capital expenditures. Further, Mistic must reduce
its revolving credit loans under its bank facility ($20.0 million outstanding as
of June 30, 1996) to $5.0 million for thirty consecutive days prior to March 31,
1997. Mistic anticipates meeting such requirements through cash flows from
operations. Should Mistic be unable to meet all of such requirements through
cash flows from operations it can defer the paydown of the revolving loans to
1997.
The Partnership
As of June 30, 1996, the Partnership's principal cash requirements for the
remainder of 1996 consist principally of capital expenditures for replacement of
equipment of approximately $2.4 million, $1.0 million for the acquisition of two
propane businesses noted above and funding for additional acquisitions, if any.
To the extent of such acquisitions, the Partnership has $40.0 million of
availability under its Acquisition Facility as of July 2, 1996. The Partnership
expects its cash flows from operations will be more than sufficient to meet its
replacement capital expenditure requirements. To the extent the Partnership has
net positive cash flows, it must make quarterly distributions of its cash
balances in excess of reserve requirements, as defined, to holders of the Common
Units and the Subordinated Units within 45 days after the end of each fiscal
quarter commencing in November 1996.
18
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
C.H. Patrick
As of June 30, 1996, C.H. Patrick's principal cash requirements for the
remainder of 1996 consist principally of principal payments under its Term Loans
of $1.1 million and capital expenditures of $0.6 million. C.H. Patrick
anticipates meeting such requirements through cash flows from operations. Should
C.H. Patrick need to supplement its cash flows, it has $14.0 million of
availability under the revolving credit portion of the Patrick Facility.
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. After considering amounts provided in prior periods,
the Company does not believe that such contingencies, as well as ordinary
routine litigation, will have a material adverse effect on its consolidated
financial position or results of operations.
19
<PAGE>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
Part II. Other Information
The statements in this Quarterly Report on Form 10-Q (this "Form 10-Q") that
are not historical facts constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform
Act"), that involve risks, uncertainties and other factors which may cause the
actual results, performance or achievements of Triarc and its subsidiaries to be
materially different from any future results, performance or achievements
express or implied by such forward-looking statements. Such factors include, but
are not limited to, the following: general economic and business conditions;
competition; success of operating initiatives; development and operating costs;
advertising and promotional efforts; brand awareness; the existence or absence
of adverse publicity; acceptance of new product offerings; changing trends in
customer tastes; the success of multi-branding; availability, locations and
terms of sites for restaurant development; changes in business strategy or
development plans; quality of management; availability, terms and deployment of
capital; business abilities and judgment of personnel; availability of qualified
personnel; labor and employee benefit costs; availability and cost of raw
materials and supplies; changes in, or failure to comply with, government
regulations; regional weather conditions; construction schedules; trends in and
strength of the textile industry; the costs and other effects of legal and
administrative proceedings; and other risks and uncertainties detailed in
Triarc's Annual Report on Form 10-K for the year ended December 31, 1995 (the
"1995 Form 10-K").
Item 1. Legal Proceedings
Legal Proceedings
In November, 1995, Triarc commenced an action in New York State court
alleging that three former court-appointed directors violated the
release/agreements they executed in March 1995 by seeking additional fees of
$3.0 million. The action has been removed to federal court in New York, and
Triarc has moved for summary judgement. The motion is pending. The defendants
have filed a third-party complaint against Nelson Peltz, a Director and Chairman
and Chief Executive Officer of Triarc, seeking judgement against him for any
amounts received by Triarc against them.
On June 27, 1996, the three former court-appointed directors commenced an
action against Nelson Peltz, Victor Posner, and Steven Posner in the United
States District Court for the Northern District of Ohio seeking an order
returning the plaintiffs to Triarc's Board of Directors, a declaration that the
defendants bear continuing obligations to refrain from certain financial
transactions under a February 9, 1993 undertaking given by DWG Acquisition
Group, L.P., and a declaration that Mr. Peltz must honor all provisions of the
undertaking. Defendants have not yet responded to the complaint.
As reported in the 1995 Form 10-K, on December 11, 1995, Triarc and
Chesapeake Insurance Company Limited ("Chesapeake") commenced a proceeding in
the United States Bankruptcy Court for the Southern District of Florida (the
"Bankruptcy Court") under section 1144 of the Bankruptcy Code, naming Victor
Posner, Security Management Corporation ("SMC") and APL Corporation ("APL") as
defendants, and naming the official committee of unsecured creditors of APL as a
nominal defendant (the "1144 Proceeding"). On January 25, 1996, SMC and APL
filed a motion to dismiss the 1144 Proceeding on the grounds that (i) the
Bankruptcy Court is unable to grant effective relief since the APL Creditors
Committee's First Amended Plan of Reorganization has been substantially
consummated, (ii) Triarc and Chesapeake are estopped from seeking relief under
section 1144 and (iii) the complaint in the 1144 Proceeding fails to state a
claim upon which relief can be granted. On April 15, 1996, the court granted the
motion and dismissed the 1144 Proceeding. The Company has appealed from the
dismissal and its appeal is pending.
As reported in the 1995 Form 10-K, in April 1993, the United States District
Court for the Northern District of Ohio (the "Ohio Court") entered a final order
approving a Modification of a Stipulation of Settlement (the "Modification")
which (i) modified the terms of a previously approved stipulation of settlement
(the "Original Stipulation") in an action captioned Granada Investments, Inc. v.
DWG Corporation et al.,
20
<PAGE>
an action commenced in 1989 ("Granada"), and (ii) settled two additional
lawsuits pending before the Ohio Court captioned Brilliant et al. v. DWG
Corporation, et al., an action commenced in July 1992 ("Brilliant"), and DWG
Corporation by and through Irving Cameon et al. v. Victor Posner et al., an
action commenced in June 1992 ("Cameon"). Each of the Granada, Brilliant and
Cameon cases were derivative actions brought against Triarc's predecessor, DWG,
and each of its then current directors (other than Triarc's court-appointed
directors, in the Brilliant and Cameon cases) which alleged various instances of
corporate abuse, waste and self-dealing by Victor Posner, Triarc's then current
Chairman of the Board and Chief Executive Officer, and certain breaches of
fiduciary duties and violations of proxy rules. The Modification continued the
requirement contained in the Original Stipulation that the Triarc Board include
three court appointed directors and that such directors, along with two other
directors who are neither Triarc employees nor relatives of Posner, form a
special committee of the Triarc Board (the "Triarc Special Committee") with
authority to review and approve any newly undertaken transaction between Triarc
and its subsidiaries, on the one hand, and entities or persons affiliated with
Posner on the other hand, other than those transactions specifically approved in
the Modification. Pursuant to the order of the Ohio Court dated February 7,
1995, the effective period under the Modification is deemed to have expired and,
as of such date, the Modification was terminated. As a result, the Triarc
Special Committee has been disbanded. On March 21, 1995, Triarc paid a final fee
of $2.0 million to the three court-appointed members of the Triarc Special
Committee and each of them delivered a release/agreement to Triarc agreeing,
among other things, not to seek additional fees. See "Executive Officers --
Compensation of Directors" in Triarc's 1995 Proxy Statement. In the fall of
1995, Granada Investments, Victor Posner and the three former court-appointed
members of the Triarc Special Committee asserted claims against Triarc for money
damages and declaratory relief, and, in the case of the former court-appointed
directors, additional fees. On January 30, 1996 the court held that it had no
jurisdiction and dismissed all proceedings in this matter. Posner filed a notice
of appeal, but subsequently withdrew the appeal voluntarily.
Environmental Matters
As a result of certain environmental audits in 1991, SEPSCO became aware of
possible contamination by hydrocarbons and metals at certain sites of SEPSCO's
ice and cold storage operations of the refrigeration business and has filed
appropriate notifications with state environmental authorities and in 1994
completed a study of remediation at such sites. SEPSCO has removed certain
underground storage and other tanks at certain facilities of its refrigeration
operations and has engaged in certain remediation in connection therewith. Such
removal and environmental remediation involved a variety of remediation actions
at various facilities of SEPSCO located in a number of jurisdictions. Such
remediation varied from site to site, ranging from testing of soil and ground
water for contamination, development of remediation plans and removal in certain
instances of certain contaminated soils. Remediation is required at thirteen
sites which were sold to or leased for the purchaser of the ice operations.
Remediation has been completed on five of these sites and is ongoing at the
others. Such remediation is being made in conjunction with the purchaser who is
responsible for payments of up to $1,000,000 of such remediation costs,
consisting of the first and third payments of $500,000. Remediation is also
required at seven cold storage sites which were sold to the purchaser of the
cold storage operations. Remediation has been completed at one site, and is
ongoing at three other sites. Remediation is expected to commence on the
remaining three sites in 1996 and 1997. Such remediation is being made in
conjunction with such purchaser who is responsible for the first $1,250,000 of
such costs. In addition, there are fifteen additional inactive properties of the
former refrigeration business where remediation has been completed or is ongoing
and which have either been sold or are held for sale separate from the sales of
the ice and cold storage operation. Of these, nine have been remediated through
June 30, 1996 at an aggregate cost of approximately $950,000. Remediation has
not yet commenced at the remaining six sites. In addition, during the
environmental remediation efforts on idle properties, SEPSCO became aware of two
sites which may in the future require demolition. Based on consultations with,
and certain reports of, environmental consultants and others, SEPSCO presently
estimates that its cost of all such remediation and/or removal and demolition
will approximate $5,350,000, of which $1,500,000, $2,700,000 (including a 1994
reclassification of $500,000) and $1,150,000 were provided prior to Fiscal 1993,
in Fiscal 1993 and in 1994, respectively. In connection therewith, SEPSCO has
incurred actual costs of [$4,166,000] through June 30, 1996 and has a remaining
accrual of [$1,184,000]. Based on currently available information and the
current reserve levels, Triarc does not believe that the ultimate outcome of the
remediation and/or removal and demolition will have a material adverse effect on
its consolidated financial position or results of operations. See "Part I, Item
2. Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
In 1993 Royal Crown Company, Inc. ("Royal Crown") became aware of possible
contamination from hydrocarbons in groundwater at two abandoned bottling
facilities. In 1994, as a result of tests necessitated by the removal of four
underground storage tanks at Royal Crown's no longer used distribution site in
Miami, Florida, hydrocarbons were discovered in the groundwater. Assessment is
proceeding under the direction of the Dade County Department of Environmental
Resources Management ("DERM") to determine the extent of the contamination. The
necessary testing
21
<PAGE>
to determine the extent of the contamination is still underway, but the early
estimate of total remediation costs (in excess of amounts incurred through
December 31, 1995) given by the environmental consultant retained by Royal Crown
is between $150,000 and $230,000, depending on the actual extent of the
contamination. In June 1996 DERM approved a remediation plan submitted by Royal
Crown and remediation has commenced at the site. Additionally, in 1994 the Texas
Natural Resources Conservation Commission approved the remediation of
hydrocarbons in the groundwater by Royal Crown at its former distribution site
in San Antonio, Texas. Remediation has commenced at this site. The environmental
remediation firm retained by Royal Crown estimates the total cost of remediation
to be approximately $210,000 (in excess of amounts incurred through December 31,
1995), of which 60-70% is expected to be reimbursed by the State of Texas
Petroleum Storage Tank Remediation Fund. Royal Crown has incurred actual costs
of $293,000, in the aggregate, through December 31, 1995 for these matters.
Triarc does not believe that the outcome of these matters will have a material
adverse effect on Triarc's consolidated results of operations or financial
position. See "Part I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources." Item 4.
Submission of Matters to a Vote of Security-Holders
On June 6, 1996, Triarc held its Annual Meeting of Stockholders. At the
Annual Meeting, Nelson Peltz, Peter W. May, Hugh L. Carey, Clive Chajet, Stanley
R. Jaffe, Joseph A. Levato, M.L. Lowenkron, David E. Schwab II, Raymond S.
Troubh and Gerald Tsai, Jr. were elected to serve as Directors. At the Annual
Meeting, the stockholders also approved proposal 2, ratifying the appointment of
Deloitte & Touche, LLP as Triarc's independent certified public accountants.
The voting on the above matters is set forth below:
Election of Directors
Nominee Votes For Votes Withheld
------- --------- --------------
Nelson Peltz 21,275,052 185,890
Peter W. May 21,275,780 185,162
Hugh L. Carey 21,254,509 206,443
Clive Chajet 21,269,865 191,077
Stanley R. Jaffe 21,258,863 202,079
Joseph A. Levato 21,275,808 185,134
M.L. Lowenkron 21,257,859 203,083
David E. Schwab II 21,276,211 184,731
Raymond S. Troubh 21,273,245 187,692
Gerald Tsai, Jr. 21,271,872 189,070
Proposal 2 - There were 21,347,639 votes for, 64,218 votes against and
49,085 abstentions.
Item 5. Other Information
Formation of Master Limited Partnership
As previously reported, on July 2, 1996, National Propane Partners, L.P.,
a newly formed Delaware limited partnership (the "Partnership"), completed its
initial public offering of 6,190,476 Common Units representing limited partner
interests (the "IPO") at a price of $21.00 per Common Unit. On July 22, 1996 the
Partnership issued an additional 111,074 Common Units in connection with the
underwriters' over-allotment option being exercised in part. For additional
information regarding the IPO, see the Partnership's Registration Statement on
Form S-1 (No. 333-2768).
Immediately preceding the closing of the IPO, National Propane
Corporation, a Delaware corporation ("National Propane") and National Propane
SGP, Inc., a Delaware corporation ("National Propane SGP"), each an indirect
wholly owned subsidiary of Triarc, (i) contributed substantially all of their
assets and liabilities to National Propane, L.P. (the "Operating Partnership")
and (ii) conveyed substantially all of their limited partner interests in the
Operating Partnership to
22
<PAGE>
the Partnership. National Propane and National Propane SGP are the sole
general partners of the Partnership and the Operating Partnership.
In connection with the IPO, the Partnership made a $40.7 million loan to
Triarc (the "Partnership Loan") which bears interest at an annual rate of 13.5%
and is payable in eight equal annual installments beginning in July 2003. In
addition, (i) National Propane issued $125 million of 8.54% First Mortgage Notes
due 2010 to certain institutional investors in a private placement and (ii) the
Operating Partnership entered into a bank credit facility (the "Bank Credit
Facility") which consists of a $15 million working capital facility and a $40
million acquisition facility.
Repayment of Debt
As previously reported, in July 1996, Triarc paid $27.2 million to
National Union Fire Insurance Company of Pittsburgh, Pennsylvania in return for
the cancellation of a 9 1/2% promissory note payable in the principal amount of
$36.5 million. The principal amount of such note had previously been reduced by
$3 million.
Stock Repurchase Program
On July 8, 1996, Triarc announced that its management was authorized, when
and if market conditions warranted, to purchase from time to time during the 12
month period commencing July 8, 1996 up to $20 million of its outstanding Class
A Common Stock. As of August 14, 1996, Triarc repurchased 34,300 shares at an
aggregate cost of approximately $390,000.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2.1 -Asset Purchase Agreement dated as of March 31, 1996 by and among
Avondale Mills, Inc., Avondale Incorporated, Graniteville Company
and Triarc Companies, Inc., incorporated herein by reference to
Exhibit 2 to Triarc's report on Form 8-K dated April 18, 1996 (SEC
File No. 1-2207).
10.1 - Supply Agreement dated as of March 31, 1996 by and between
Avondale Mills, Inc. and C.H. Patrick & Co., Inc. --
Confidential treatment has been requested for portions of the
Supply Agreement -- is incorporated herein by reference to
Exhibit 10 to Triarc's report on Form 8-K/A dated June 25, 1996
(SEC File No. 1-2207).
27.1 -Financial Data Schedule for the six-month period ended June 30,
1996, 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 April 18, 1996 which
contained an executed copy of the Asset Purchase Agreement dated as of
March 31, 1996 by and among the Registrant, Avondale Mills, Inc.,
Avondale Incorporated and Graniteville Company in connection with the
sale by the Registrant of the textile business of Graniteville Company.
The Registrant filed a report on Form 8-K on May 14, 1996 with respect
to the consummation of the sale of substantially all of its subsidiary
Graniteville Company's textile business (excluding C.H. Patrick & Co.,
Inc. and certain other non-textile related assets) to Avondale Mills,
Inc. for $255 million in cash, subject to certain post-closing
adjustments.
The Registrant filed a report on Form 8-K/A on June 25, 1996 with respect to the
Supply Agreement by and between C.H. Patrick & Co., Inc. and Avondale Mills,
Inc. pursuant to which C.H. Patrick & Co., Inc. will supply dyes and chemicals
to the combined Graniteville/Avondale textile operations subject to certain
bidding procedures.
23
<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: August 14, 1996 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)
24
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<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 six-month period ended
June 30, 1996 and is qualified in its entirety by reference to such
Form 10-Q.
</LEGEND>
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<NAME> Triarc Companies, Inc.
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