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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 18, 1997
TRIARC COMPANIES, INC.
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(Exact Name of Registrant as Specified in its Charter)
1-2207 38-0471180
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(Commission (IRS Employer
File Number) Identification No.)
280 Park Avenue
New York, New York 10017
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 451-3000
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(Former Name or Former Address, if
Changed Since Last Report)
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<PAGE>
Certain statements in this Report on Form 8-K and the exhibits attached
hereto that are not historical facts constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve risks, uncertainties and other factors which
may cause the actual results, performance or achievements of Triarc Companies,
Inc. ("Triarc") and its subsidiaries (collectively with Triarc, "the Company")
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; changes in business strategy or development plans; quality of
management; availability, terms and deployment of capital; business abilities
and judgment of personnel; labor and employee benefit costs; availability and
cost of raw materials and supplies; changes in, or failure to comply with,
government regulations; 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, 1996. Triarc will not undertake and
specifically declines any obligation to publicly release the result of any
revisions which may be made to any forward-looking statements to reflect events
or circumstances after the date of such statements or to reflect the occurrence
of any anticipated or unanticipated events.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 18, 1997, Royal Crown Company, Inc. ("Royal Crown") and TriBev
Corporation ("TriBev"), indirect subsidiaries of the Registrant, completed the
sale of their rights to the C&C beverage line, including the C&C trademark, to
Kelco Sales & Marketing Inc. ("Kelco"), a beverage distribution business based
in Cranford, New Jersey, which will do business under the name of C&C Beverages,
Inc. C&C is a line of mixers, colas and flavors. In connection with the sale,
Royal Crown also agreed to sell to Kelco concentrate for C&C products and to
provide Kelco certain technical services for seven years. In consideration for
the foregoing, Royal Crown and TriBev will receive an aggregate minimum of $9.4
million, payable over seven years.
A copy of the press release with respect to the closing of the
transaction is being filed herewith as an exhibit hereto.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information
(c) Exhibits
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated balance sheet of
Triarc Companies, Inc. and subsidiaries as of March 30, 1997 and condensed
consolidated statements of operations of the Company for the year ended December
31, 1996 and for the three months ended March 30, 1997 have been prepared by
adjusting such financial statements, as derived and condensed, as applicable,
from (i) the audited consolidated financial statements in its Form 10-K for the
year ended December 31, 1996 (the "Form 10-K") and (ii) the unaudited condensed
consolidated financial statements in its Form 10-Q for the three months ended
March 30, 1997 (the "Form 10-Q") to reflect first, the sale (the "RTM Sale") of
the Company's restaurants to RTM Restaurant Group ("RTM") as previously reported
in a Form 8-K filed on May 20, 1997 and as amended in a Form 8-K/A filed on
August 4, 1997 and second, the sale (the "C&C Sale") of the Company's rights to
the C&C beverage line, including the C&C trademark, on July 18, 1997, as if such
transactions had occurred as of March 30, 1997 for the pro forma condensed
consolidated balance sheet and as of January 1, 1996 for the pro forma condensed
consolidated statements of operations. Such pro forma adjustments are described
in the accompanying notes to the pro forma condensed consolidated balance sheet
and statements of operations which should be read in conjunction with such
statements. Such pro forma condensed consolidated financial statements should
also be read in conjunction with the Company's audited consolidated financial
statements appearing in the Form 10-K and the Company's unaudited condensed
consolidated financial statements appearing in the Form 10-Q. The pro forma
condensed consolidated financial statements do not purport to be indicative of
the actual financial position or results of operations of the Company had such
transactions actually been consummated on March 30, 1997 and January 1, 1996,
respectively, or of the future financial position or results of operations of
the Company.
<PAGE>
<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 30, 1997
ADJUSTMENTS PRO FORMA ADJUSTMENTS
AS FOR FOR FOR
REPORTED RTM SALE RTM SALE C&C SALE PRO FORMA
-------- -------- -------- -------- ---------
(IN THOUSANDS)
(UNAUDITED)
ASSETS
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents......................$ 120,516 $ 50 (a) $ 116,370 $ 750 (1) $ 117,120
(4,196)(b)
Short-term investments......................... 58,460 -- 58,460 -- 58,460
Receivables, net............................... 85,088 2,977 (c) 88,065 703 (1) 88,768
Inventories.................................... 55,914 (2,592)(c) 53,322 -- 53,322
Assets held for sale .......................... 71,116 (71,116)(a) -- -- --
Deferred income tax benefit.................... 16,409 -- 16,409 -- 16,409
Prepaid expenses and other current assets...... 14,691 -- 14,691 -- 14,691
----------- ----------- ----------- ---------- -----------
Total current assets...................... 422,194 (74,877) 347,317 1,453 348,770
Properties, net................................... 105,995 -- 105,995 (2) (1) 105,993
Unamortized costs in excess of net assets of
acquired companies............................. 202,026 -- 202,026 -- 202,026
Trademarks........................................ 56,187 -- 56,187 (1,575) (1) 54,612
Deferred costs, deposits and other assets......... 58,155 1,329 (a) 56,149 5,300 (1) 61,449
(385)(c)
(2,950)(d)
----------- ----------- ----------- ---------- -----------
$ 844,557 $ (76,883) $ 767,674 $ 5,176 $ 772,850
=========== =========== =========== ========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term debt..............$ 101,006 $ (69,517)(a) $ 31,489 $ -- $ 31,489
Accounts payable............................... 42,949 -- 42,949 -- 42,949
Accrued expenses............................... 110,162 (220)(a) 104,596 681 (1) 105,453
(4,196)(b) 176 (1)
(1,150)(d)
----------- ----------- ----------- --------- ----------
Total current liabilities................. 254,117 (75,083) 179,034 857 179,891
Long-term debt.................................... 487,612 -- 487,612 -- 487,612
Deferred income taxes............................. 34,464 -- 34,464 -- 34,464
Deferred income and other liabilities............. 28,280 -- 28,280 4,015 (1) 32,295
Minority interests................................ 34,316 -- 34,316 -- 34,316
Stockholders' equity (deficit):...................
Common stock................................... 3,398 -- 3,398 -- 3,398
Additional paid-in capital..................... 163,416 -- 163,416 -- 163,416
Accumulated deficit............................ (113,001) (1,800)(d) (114,801) 304 (1) (114,497)
Treasury stock................................. (45,760) -- (45,760) -- (45,760)
Other ...................................... (2,285) -- (2,285) -- (2,285)
----------- ----------- ----------- ---------- -----------
Total stockholders' equity................ 5,768 (1,800) 3,968 304 4,272
----------- ----------- ----------- ---------- -----------
$ 844,557 $ (76,883) $ 767,674 $ 5,176 $ 772,850
=========== =========== =========== ========== ===========
</TABLE>
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
RTM Sale Pro Forma Adjustments
(a) To reflect the RTM Sale consisting of restaurants sold to RTM for (i)
the proceeds of $50,000 in cash, a $1,950,000 note due 2000 with a
discounted value of $1,329,000 and the assumption by RTM of $54,642,000
of mortgage and equipment notes and $14,875,000 of capitalized lease
obligations, (ii) the elimination of the assets held for sale of
$71,116,000 and (iii) the recording of the $220,000 net difference
against amounts previously accrued.
(b) To reflect the payment of $3,252,000 of previously accrued transaction
costs, including real estate transfer taxes, mortgage recording costs,
fairness opinions and valuations, legal and accounting, and the payment
to RTM of $944,000 of reserves for employee benefits.
(c) To reflect a receivable from RTM for the value of inventories of
$2,592,000 and restaurant lease and utility deposits of $385,000
transferred to RTM with settlement due within 30 days.
(d) To reflect the write-off of previously unamortized deferred financing
costs of $2,950,000, less related tax benefit of $1,150,000 relating to
the debt assumed by RTM.
C & C Sale Pro Forma Adjustments
(1) To reflect the C&C Sale consisting of the C&C trademark and equipment
related to the operation of the C&C beverage line to Kelco for the
proceeds of $750,000 in cash and an $8,650,000 note (the "Note") with a
discounted value of $6,003,000 consisting of $4,373,000 relating to the
C&C Sale and $2,380,000 relating to future revenues. The Note is
classified $703,000 as current receivables and $5,300,000 as non-current
deferred costs, deposits and other assets. The $2,380,000 of deferred
revenues consists of (i) $2,096,000 relating to minimum take-or-pay
commitments for sales of concentrate for C&C products to Kelco and (ii)
$284,000 relating to future technical services to be performed for Kelco
by the Company, both under a contract with Kelco. Such deferred revenues
are classified $231,000 as current accrued expenses and $2,149,000 as
non-current deferred income and other liabilities. The excess of the
proceeds of $4,373,000 over the carrying value of the C&C trademark of
$1,575,000 and the related equipment of $2,000 resulted in a pre-tax
gain of $2,796,000 which is being recognized pro-rata between the gain
on sale and the carrying value of the assets sold based on the cash
proceeds and collections under the note since realization of the Note is
not yet fully assured. As such, $480,000 of such pre-tax gain has been
recognized currently which, less taxes of $176,000 at the incremental
income tax rate of 36.6%, results in a net gain of $304,000. The
remaining $2,316,000 has been deferred, of which $450,000 is classified
as current accrued expenses and $1,866,000 is classified as non-current
deferred income and other liabilities.
<PAGE>
<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
ADJUSTMENTS PRO FORMA ADJUSTMENTS
AS FOR FOR FOR
REPORTED RTM SALE RTM SALE C&C SALE PRO FORMA
-------- -------- -------- -------- ---------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Net sales..........................................$ 931,920 $ (228,031)(a) $ 703,889 $ 444 (1) $ 692,726
(11,607)(2)
Royalties, franchise fees and other revenues....... 57,329 9,121 (b) 66,450 60 (1) 66,510
---------- ------------ ----------- ----------- -----------
989,249 (218,910) 770,339 (11,103) 759,236
---------- ------------ ----------- ----------- -----------
Costs and expenses:
Cost of sales...................................... 652,109 (187,535)(a) 464,574 178 (1) 454,454
(10,298)(2)
Advertising, selling and distribution.............. 139,662 (24,764)(a) 114,898 (1,702)(2) 113,196
General and administrative......................... 131,357 (9,913)(a) 121,444 (434)(2) 121,010
Reduction in carrying value of long-lived .........
assets impaired or to be disposed of............. 64,300 (58,900)(a) 5,400 -- 5,400
Facilities relocation and corporate
restructuring.................................... 8,800 (2,400)(a) 6,400 -- 6,400
---------- ------------ ----------- ----------- -----------
996,228 (283,512) 712,716 (12,256) 700,460
---------- ------------ ----------- ----------- -----------
Operating profit (loss)....................... (6,979) 64,602 57,623 1,153 58,776
Interest expense................................... (73,379) 8,421 (c) (64,958) (273)(1) (65,231)
Gain on sale of businesses, net....................... 77,000 -- 77,000 -- 77,000
Other income, net....................................... 7,996 -- 7,996 16 (2) 8,695
683 (3)
---------- ------------ ----------- ----------- -----------
Income before income taxes and
minority interests.......................... 4,638 73,023 77,661 1,579 79,240
Provision for income taxes............................ (11,294) (28,406)(d) (39,700) (578)(4) (40,278)
Minority interests in income of consolidated
subsidiaries....................................... (1,829) -- (1,829) -- (1,829)
----------- ------------ ----------- ----------- ------------
Income (loss) before extraordinary
items......................................$ (8,485) $ 44,617 $ 36,132 $ 1,001 $ 37,133
=========== ============ =========== =========== ===========
Income (loss) before extraordinary
items per share............................$ (.28) $ 1.21 $ 1.24
=========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 30, 1997
ADJUSTMENTS PRO FORMA ADJUSTMENTS
AS FOR FOR FOR
REPORTED RTM SALE RTM SALE C&C SALE PRO FORMA
-------- -------- -------- -------- ---------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Net sales.......................................$ 192,086 $ (52,134) (a) $ 139,952 $ 111 (1) $ 136,832
(3,231)(2)
Royalties, franchise fees and other revenues.... 13,315 2,085 (b) 15,400 15 (1) 15,415
------------ ----------- ------------ ------------ ------------
205,401 (50,049) 155,352 (3,105) 152,247
------------ ----------- ------------ ------------ ------------
Costs and expenses:
Cost of sales................................... 125,883 (40,962) (a) 84,921 44 (1) 82,081
(2,884)(2)
Advertising, selling and distribution........... 29,345 (5,597) (a) 23,748 (215)(2) 23,533
General and administrative...................... 30,714 (2,366) (a) 28,348 (117)(2) 28,231
Facilities relocation and corporate
restructuring................................. 1,883 (1,706) (a) 177 -- 177
------------ ----------- ------------ ------------ ------------
187,825 (50,631) 137,194 (3,172) 134,022
------------ ----------- ------------ ------------ ------------
Operating profit........................... 17,576 582 18,158 67 18,225
Interest expense................................... (15,702) 2,020 (c) (13,682) (70)(1) (13,752)
Other income, net.................................. 4,111 -- 4,111 33 (2) 4,323
179 (3)
----------- ----------- ------------ ------------ -----------
Income before income taxes and
minority interests......................... 5,985 2,602 8,587 209 8,796
Provision for income taxes........................... (3,052) (1,012) (d) (4,064) (77)(4) (4,141)
Minority interests in income of consolidated
subsidiaries...................................... (4,110) -- (4,110) -- (4,110)
----------- ----------- ------------ ------------ ------------
Loss before extraordinary items..............$ (1,177) $ 1,590 $ 413 $ 132 $ 545
========== =========== ============ ============ ============
Loss before extraordinary items
per share..................................$ (.04) $ .01 $ .02
========== ============ ============
</TABLE>
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
RTM Sale Pro Forma Adjustments
(a) To reflect the elimination of the sales, cost of sales, advertising,
selling and distribution expenses and allocated general and administrative
expenses, the reduction in carrying value of long-lived assets impaired or
to be disposed of for the year ended December 31, 1996 related to the sold
restaurants and the portion of the facilities relocation and corporate
restructuring charge associated with restructuring the restaurant segment
in connection with the RTM sale. The allocated general and administrative
expenses reflect the portion of the Company's total general and
administrative expenses allocable to the operating results associated with
the restaurants sold as determined by management of the Company. Such
allocated amounts consist of (i) salaries, bonuses, travel and
entertainment expenses, supplies, training and other expenses related to
area managers who have responsibility for the day-to-day operation of the
sold restaurants and (ii) the portion of general corporate overhead (e.g.
accounting, human resources, marketing, etc.) estimated to be attributable
to the restaurants. Since the Company no longer owns Arby's restaurants but
continues to operate as an Arby's franchisor, it is undertaking a
reorganization of its restaurant segment eliminating approximately 60
positions in its corporate and field administrative offices and
significantly reducing leased office space. The effect of the elimination
of income and expenses of the sold restaurants is significantly greater in
the year ended December 31, 1996 as compared with the three months ended
March 30, 1997 principally due to two 1996 eliminations which did not recur
in the 1997 period for (i) the $58,900,000 reduction in carrying value of
long-lived assets associated with the restaurants sold and (ii)
depreciation and amortization on the long-lived restaurant assets sold,
which had been written down to their estimated fair values as of December
31, 1996 and were no longer depreciated or amortized while they were held
for sale.
(b) To reflect royalties on the sales of the sold restaurants at the rate of
4%.
(c) To reflect a reduction to interest expense relating to the debt assumed by
RTM.
(d) To reflect the income tax effects of the above at the incremental income
tax rate of 38.9%.
C&C Sale Pro Forma Adjustments
(1) To reflect (i) realization of deferred revenues based on the portion of the
minimum take or pay commitment for sales of concentrate for C&C products to
Kelco to be fulfilled and fees related to the technical services to be
performed, both under the contract with Kelco, (ii) amortization of the
discount on the deferred revenues and (iii) recognition of the estimated
cost of the concentrate to be sold.
(2) To reflect the elimination of sales, cost of sales, advertising, selling
and distribution expenses, general and administrative expenses and other
expense related to the C&C beverage line.
(3) To reflect amortization of the discount on the Note.
(4) To reflect the income tax effects of the above at the incremental income
tax rate of 36.6%.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRIARC COMPANIES, INC.
(Registrant)
Date: August 4, 1997 By: /s/ JOHN L. BARNES, JR.
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John L. Barnes, Jr.
Senior Vice President
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
99.1 Press release dated July 22, 1997
<PAGE>
PRESS RELEASE
CONTACT: MARTIN M. SHEA FOR IMMEDIATE RELEASE
TRIARC BEVERAGE GROUP
212/451-3030
TRIARC BEVERAGE GROUP ANNOUNCES SALE OF C&C
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NEW YORK, New York - July 22, 1997 -- Triarc Beverage Group, part of Triarc
Companies, Inc. (NYSE:TRY), announced today that its subsidiary, Royal Crown
Company, Inc., has completed the sale of its rights to the C&C beverage line,
including the C&C trademark, to Kelco Sales & Marketing Inc., a beverage
distribution business based in Cranford, New Jersey, which will do business
under the name of C&C Beverages, Inc. C&C is a line of mixers, colas and
flavors. In connection with the sale, Royal Crown agreed to sell to Kelco
concentrate for C&C products and to provide Kelco certain technical services.
Terms of the transaction were not disclosed.
Mike Weinstein, chief executive officer of the Triarc Beverage Group stated "The
sale of C&C is yet another example of Triarc Beverage Group continuing to focus
on our core brands and to work to the strength of our stronger bottlers who
handle Royal Crown, Snapple Beverages and Mistic Brands, Inc."
Triarc is expected to have 1997 annual sales of nearly $1 billion through its
consumer brands in beverages (Snapple, Mistic and Royal Crown) and restaurants
(Arby's). In addition, Triarc has annual sales of approximately $70 million in
specialty dyes and chemicals (C.H. Patrick) and an equity interest in liquefied
petroleum gas (National Propane) which has annual sales of approximately $175
million.
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