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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): May 5, 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>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 5, 1997, indirect subsidiaries of the Registrant (the "Sellers")
completed the sale of their 355 company-owned Arby's restaurants to RTM
Restaurant Group ("RTM"), the largest franchisee in the Arby's system, for
approximately $71 million, consisting primarily of the assumption of
approximately $69 million in mortgage indebtedness and capitalized lease
obligations, subject to certain post-closing adjustments.
As part of the transaction, the Sellers received options to purchase an
aggregate 20% interest in each of the RTM affiliates that own the restaurants.
Arby's, Inc., a subsidiary of the Registrant, will continue as the franchisor of
the 3,030-store Arby's restaurant system.
A copy of the Stock Purchase Agreement dated February 13, 1997 relating to
the transaction was previously filed and is incorporated herein by reference to
Exhibit 10.1 to the Current Report on Form 8-K dated February 13, 1997 filed by
RC/Arby's Corporation, a subsidiary of the Registrant (SEC File No. 0-20286). 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.
(a) Financial Statements of Businesses Acquired
Not Applicable.
(b) Pro Forma Financial Information
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated balance sheet of
Triarc Companies, Inc. and subsidiaries (the "Company") 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 the sale of the
Company's restaurants on May 5, 1997, as if such transaction 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
AS PRO FORMA
REPORTED ADJUSTMENTS PRO FORMA
-------- ----------- ---------
(IN THOUSANDS)
(UNAUDITED)
ASSETS
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents......................................$ 120,516 $ 50 (a) $ 116,370
(4,196) (b)
Short-term investments......................................... 58,460 -- 58,460
Receivables, net............................................... 85,088 2,977 (c) 88,065
Inventories.................................................... 55,914 (2,592) (c) 53,322
Assets held for sale .......................................... 71,116 (71,116) (a) --
Deferred income tax benefit.................................... 16,409 -- 16,409
Prepaid expenses and other current assets...................... 14,691 -- 14,691
--------- --------- ---------
Total current assets........................................ 422,194 (74,877) 347,317
Properties, net.................................................. 105,995 -- 105,995
Unamortized costs in excess of net assets of acquired companies.. 202,026 -- 202,026
Trademarks....................................................... 56,187 -- 56,187
Deferred costs, deposits and other assets........................ 58,155 1,329 (a) 56,149
(385) (c)
(2,950) (d)
--------- --------- ---------
$ 844,557 $ (76,883) $ 767,674
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt..............................$ 101,006 $ (69,517) (a) $ 31,489
Accounts payable............................................... 42,949 -- 42,949
Accrued expenses............................................... 110,162 (220) (a) 104,596
(4,196) (b)
(1,150) (d)
--------- --------- ---------
Total current liabilities................................... 254,117 (75,083) 179,034
Long-term debt................................................... 487,612 -- 487,612
Deferred income taxes............................................ 34,464 -- 34,464
Deferred income and other liabilities............................ 28,280 -- 28,280
Minority interests............................................... 34,316 -- 34,316
Stockholders' equity (deficit):
Common stock................................................... 3,398 -- 3,398
Additional paid-in capital..................................... 163,416 -- 163,416
Accumulated deficit............................................ (113,001) (1,800) (d) (114,801)
Treasury stock................................................. (45,760) -- (45,760)
Other ......................................................... (2,285) -- (2,285)
--------- --------- ---------
Total stockholders' equity.................................. 5,768 (1,800) 3,968
--------- --------- ---------
$ 844,557 $ (76,883) $ 767,674
========= ========= =========
</TABLE>
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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
(a)To reflect the sale of restaurants 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, net of related tax benefit of $1,150,000, relating to the
debt assumed by RTM.
<PAGE>
<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
AS PRO FORMA
REPORTED ADJUSTMENTS PRO FORMA
-------- ----------- ---------
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C>
Revenues:
Net sales....................................................$ 931,920 $(228,031)(a) $ 703,889
Royalties, franchise fees and other revenues................. 57,329 9,121 (b) 66,450
--------- -------- ---------
989,249 (218,910) 770,339
--------- -------- ---------
Costs and expenses:
Cost of sales................................................ 652,109 (187,535)(a) 464,574
Advertising, selling and distribution........................ 139,662 (24,764)(a) 114,898
General and administrative................................... 131,357 (9,913)(a) 121,444
Reduction in carrying value of long-lived assets impaired
or to be disposed of...................................... 64,300 (58,900)(a) 5,400
Facilities relocation and corporate restructuring ........... 8,800 -- 8,800
--------- -------- ---------
996,228 (281,112) 715,116
--------- -------- ---------
Operating profit (loss).................................. (6,979) 62,202 55,223
Interest expense.............................................. (73,379) 8,421 (c) (64,958)
Gain on sale of businesses, net............................... 77,000 -- 77,000
Other income, net ............................................ 7,996 -- 7,996
--------- -------- ---------
Income before income taxes and minority interests ....... 4,638 70,623 75,261
Provision for income taxes.................................... (11,294) (27,472)(d) (38,766)
Minority interests in income of consolidated subsidiaries..... (1,829) -- (1,829)
------ -------- ---------
Income (loss) before extraordinary items................. $ (8,485) $ 43,151 $ 34,666
========= ======== =========
Income (loss) before extraordinary items per share....... $ (.28) $ 1.16
========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 30, 1997
AS PRO FORMA
REPORTED ADJUSTMENTS PRO FORMA
-------- ----------- ---------
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C>
Revenues:
Net sales....................................................$ 192,086 $(52,134)(a) $ 139,952
Royalties, franchise fees and other revenues................. 13,315 2,085 (b) 15,400
--------- -------- ---------
205,401 (50,049) 155,352
--------- -------- ---------
Costs and expenses:
Cost of sales................................................ 125,883 (40,962)(a) 84,921
Advertising, selling and distribution........................ 29,345 (5,597)(a) 23,748
General and administrative................................... 30,714 (2,366)(a) 28,348
Facilities relocation and corporate restructuring ........... 1,883 -- 1,883
--------- -------- ---------
187,825 (48,925) 138,900
--------- -------- ---------
Operating profit.......................................... 17,576 (1,124) 16,452
Interest expense............................................... (15,702) 2,020 (c) (13,682)
Other income, net.............................................. 4,111 -- 4,111
--------- -------- ---------
Income before income taxes and minority interests......... 5,985 896 6,881
Provision for income taxes..................................... (3,052) (349)(d) (3,401)
Minority interests in income of consolidated subsidiaries...... (4,110) -- (4,110)
--------- -------- ---------
Loss before extraordinary items ..........................$ (1,177) $ 547 $ (630)
========= ======== =========
Loss before extraordinary items per share.................$ (.04) $ (.02)
========= =========
</TABLE>
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (CONTINUED)
(a) To reflect the elimination of the sales, cost of sales, advertising,
selling and distribution expenses and allocated general and administrative
expenses and, for the year ended December 31, 1996, the reduction in
carrying value of long-lived assets impaired or to be disposed of related
to the sold restaurants. 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 will no longer own Arby's restaurants but
will continue 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 from 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%.
<PAGE>
(c) Exhibits
99.1 Press release dated May 6, 1997
<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: May 20, 1997 By: /s/ JOHN L. BARNES, JR.
-----------------------
John L. Barnes, Jr.
Senior Vice President
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
99.1 Press release dated May 6, 1997
<PAGE>
EXHIBIT 99.1
PRESS RELEASE
CONTACT: MARTIN M. SHEA FOR IMMEDIATE RELEASE
TRIARC COMPANIES, INC.
212/451-3030
TRIARC SELLS ARBY'S(R) RESTAURANTS TO FRANCHISEE RTM
NEW YORK, New York -- May 6, 1997 -- Triarc Companies, Inc. (NYSE:TRY) announced
today that the Triarc Restaurant Group has completed the sale of its 355
company-owned Arby's stores to RTM Restaurant Group, the largest franchisee in
the Arby's system, for approximately $71 million, subject to certain
post-closing adjustments. A substantial portion of the consideration consists of
the assumption of existing mortgage and capitalized lease obligations.
As part of this transaction, Triarc stated it received an option to purchase a
20% interest in the RTM affiliates that purchased the stores. This option
reflects Triarc's continuing commitment to the Arby's brand. The Triarc
Restaurant Group will continue as the franchisor of the 3,030 Arby's store
system and will test and develop new concepts, products, menus, training
programs and other initiatives in selected Arby's restaurants operated by RTM,
and will also continue to develop new and existing concepts as dual-brands for
the Arby's system and as stand-alone brands.
<PAGE>
"With the transfer of the company-owned units to RTM complete, the Triarc
Restaurant Group can focus on the development of business growth strategies for
the Arby's system and on the further development of our other restaurant
brands," said Nelson Peltz, chairman and chief executive officer of Triarc. "We
also expect that by being a franchisor rather than an operator, we can create
more value for our shareholders by creating profits at the bottom line."
Atlanta-based RTM now operates 670 Arby's Restaurants in 47 markets and 20
states. RTM has signed agreements to build an additional 400 Arby's units over
the next 14 years.
Triarc Companies, Inc. is comprised of four business: beverages (Royal
Crown Company and Mistic), restaurants (Arby's), dyes and specialty chemicals
(C.H. Patrick) and liquefied petroleum gas (National Propane).
# # #
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