- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 25, 1997
TRIARC COMPANIES, INC.
----------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-2207 38-0471180
--------------- ----------- ------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
280 Park Avenue
New York, New York 10017
-------------------------------------- --------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 451-3000
-----------------------------
(Former Name or Former Address, if
Changed Since Last Report)
- -------------------------------------------------------------------------------
<PAGE>
This Form 8-K/A of Triarc Companies, Inc. ("Triarc" and, together with
its subsidiaries, the "Company") constitutes Amendment No. 1 to Triarc's Current
Report on Form 8-K (the "Original Form 8-K") which was filed with the Securities
and Exchange Commission (the "SEC") on December 10, 1997. This amendment sets
forth the information required by Items 7(a) and 7(b) omitted from the Original
Form 8-K and includes Item 2, as amended, from the Original Form 8-K.
The statements in this Current Report on Form 8-K/A that are not
historical facts, including, most importantly, those statements preceded by,
followed by, or that include the words "may," "believes," "expects,"
"anticipates," or the negation thereof, or similar expressions, constitute
"forward-looking statements" that involve risks, uncertainties and other factors
which may cause actual results, performance or achievements to be materially
different from any outcomes expressed or implied by such forward-looking
statements. For those statements, Triarc claims the protection of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Such factors include, but are not limited to, the
following: success of operating initiatives; development and operating costs;
advertising and promotional efforts; brand awareness; the existence or absence
of adverse publicity; market acceptance of new product offerings; changing
trends in consumer tastes; 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; the costs and
other effects of legal and administrative proceedings; pricing pressures
resulting from competitive discounting; general economic, business and political
conditions in the countries and territories where the Company operates and the
impact of such conditions on consumer spending; and other risks and
uncertainties detailed in Triarc's other current and periodic filings with the
SEC. 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 anticipated or unanticipated
events.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 25, 1997 Triarc acquired (the "Cable Car Acquisition")
Cable Car Beverage Corporation ("Cable Car"), a marketer of premium soft drinks
and waters in the United States and Canada, primarily under the Stewart's (R)
brand. Pursuant to the Cable Car Acquisition, each share of Cable Car was
converted into 0.1722 shares of Triarc's Class A Common Stock (the "Common
Stock"), representing an aggregate 1,566,731 shares of Common Stock issued by
Triarc.
A copy of the Agreement and Plan of Merger relating to the Cable Car
Acquisition was previously filed by the Registrant in its Current Report on Form
8-K filed June 26, 1997. A copy of the press release with respect to the closing
of the Cable Car Acquisition was previously filed by the Registrant in its
Current Report on Form 8-K filed December 10, 1997.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired
The financial statements, together with the notes thereto, of the
business acquired, reflecting the historical results of Cable Car required by
this part, are set forth below.
(i) Audited consolidated financial statements of Cable Car
as of December 31, 1996 and 1995 and for each of the
years in the three-year period ended December 31, 1996.
(ii) Unaudited consolidated financial statements of Cable
Car for the nine months ended September 30, 1997.
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
PAGE
Report of Independent Accountants...................................
Consolidated Balance Sheet at December 31, 1996 and 1995............
Consolidated Statement of Operations for the years ended
December 31, 1996, 1995 and 1994...............................
Consolidated Statement of Cash Flows for the years ended
December 31, 1996, 1995 and 1994...............................
Consolidated Statement of Changes in Stockholders' Equity
for the years ended December 31, 1996, 1995 and 1994...........
Notes to Consolidated Financial Statements..........................
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholders of Cable
Car Beverage Corporation
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of cash flows and of changes in
stockholders' equity present fairly, in all material respects, the financial
position of Cable Car Beverage Corporation and its subsidiaries ("Cable Car") at
December 31, 1996 and 1995, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of Cable Car management; our responsibility is
to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Denver, Colorado
March 14, 1997
<PAGE>
<TABLE>
<CAPTION>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31,
---------------------------------
1996 1995
------------- --------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents...............................................$ 1,408,729 $ 576,191
Short term investments.................................................. 195,042 --
Accounts receivable, net of allowance for
doubtful accounts of $100,743 at December
31, 1996 and $55,949 at December 31, 1995............................. 1,336,094 1,063,040
Inventories............................................................. 2,430,896 1,808,257
Prepaid expenses and other current assets............................... 23,582 40,394
Deferred income tax assets.............................................. 394,029 340,389
------------- -------------
Total current assets............................................ 5,788,372 3,828,271
Property and equipment, net:
Property and equipment, less accumulated
depreciation of $144,441 at December 31,
1996 and $99,231 at December 31, 1995................................. 130,778 116,466
Other assets:
Goodwill and other intangibles, less accumulated
amortization of $387,168 at December 31, 1996
and $347,007 at December 31, 1995..................................... 591,265 631,426
Investment in AMCON Distributing Company................................ 99,185 99,185
Other assets............................................................ 58,603 72,498
Deferred income tax assets.............................................. 473,579 612,854
------------- -------------
$ 7,141,782 $ 5,360,700
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities................................$ 231,408 $ 380,198
Accrued income taxes.................................................... 146,140 29,142
Other current liabilities............................................... 782,188 542,979
Current portion of long-term debt....................................... -- 5,960
------------- -------------
Total current liabilities....................................... 1,159,736 958,279
------------- -------------
Commitments (Note 8)
Stockholders' equity:
Common stock, $.01 par value; 25,000,000 shares authorized; 8,981,681 issued
at December 31, 1996 and 8,658,349 shares issued at December
31, 1995.............................................................. 89,817 86,584
Additional paid-in capital.............................................. 9,822,137 9,502,877
Accumulated deficit..................................................... (3,901,273) (5,158,405)
Less - 76,357 common shares in treasury................................. (28,635) (28,635)
------------- -------------
5,982,046 4,402,421
------------- -------------
$ 7,141,782 $ 5,360,700
============= =============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1996 1995 1994
-------------- -------------- ------------
<S> <C> <C> <C>
Revenue:
Sales......................................................$ 18,872,556 $ 12,843,620 $ 8,322,301
Costs and expenses:
Cost of goods sold......................................... 13,670,934 9,619,160 6,030,547
General and administrative................................. 1,108,329 811,108 710,920
Selling and distribution................................... 1,993,580 1,400,222 804,687
Depreciation and amortization.............................. 88,460 66,388 57,485
-------------- -------------- ------------
16,861,303 11,896,878 7,603,639
-------------- -------------- ------------
Income from operations................................ 2,011,253 946,742 718,662
-------------- -------------- ------------
Other income and (expenses):
Interest income and other.................................. 52,775 51,405 20,479
Interest expense........................................... (350) (1,114) (2,346)
Loss on AMCON stock........................................ -- (848,342) --
-------------- -------------- -----------
Income before income taxes............................ 2,063,678 148,691 736,795
Provision (benefit) for
income taxes............................................... 806,546 (733,909) 15,100
-------------- -------------- ------------
Net income............................................$ 1,257,132 $ 882,600 $ 721,695
============== ============== ============
Net income per common share...................................$ 0.14 $ 0.10 $ 0.09
============== ============== ============
Weighted average common and
common equivalent shares................................... 9,255,479 8,915,666 8,318,909
============== ============== ============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1996 1995 1994
-------------- -------------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income...............................................$ 1,257,132 $ 882,600 $ 721,695
Adjustment to reconcile net income to net cash
from operating activities:
Loss on investment in AMCON.......................... -- 848,342 --
Depreciation and amortization........................ 88,460 66,388 57,486
Provision for loss on accounts receivable............ 44,794 (3,662) 32,111
Deferred income tax assets........................... 85,635 (953,243) --
Change in current assets and liabilities:
Accounts receivable................................ (317,848) (401,554) (163,477)
Inventories........................................ (622,639) (1,209,320) (99,703)
Prepaid expenses and other current assets.......... 16,812 (8,020) (21,359)
Other assets....................................... 13,895 (68,677) 10,246
Accounts payable and accrued liabilities........... (148,790) 276,714 (269,146)
Accrued income taxes............................... 116,998 26,042 3,100
Other current liabilities.......................... 239,209 160,266 69,316
------------- -------------- ------------
Net cash from (used in) operating activities......... 773,658 (384,124) 340,269
------------- -------------- ------------
Cash flows from investing activities:
Cash paid for short-term investments..................... (195,042) -- (151,876)
Proceeds from short-term investments..................... -- 151,876 --
Equipment acquisitions................................... (62,611) (97,872) (24,276)
Other ................................................... -- (40,000) (12,500)
------------- -------------- ------------
Net cash from (used in) investing activities......... (257,653) 14,004 (188,652)
------------- -------------- ------------
Cash flows from financing activities:
Principal payments on debt............................... (5,960) (8,796) (11,339)
Proceeds from issuance of stock.......................... 182,498 374,449 67,197
Tax benefit associated with stock options................ 139,995 -- --
------------- -------------- -----------
Net cash from financing activities................... 316,533 365,653 55,858
------------- -------------- ------------
Net increase (decrease) in cash and cash equivalents.......... 832,538 (4,467) 207,475
Cash and cash equivalents at beginning of period.............. 576,191 580,658 373,183
------------- -------------- ------------
Cash and cash equivalents at end of period....................$ 1,408,729 $ 576,191 $ 580,658
============= ============== ============
Supplemental disclosure of non-cash financing and
investing activities:
Property dividend of investment in AMCON stock...........$ -- $ 799,407 $ --
Conversion of debt to equity............................. -- -- 59,000
Capital lease obligations................................ -- -- 7,000
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
COMMON STOCK TREASURY STOCK
------------------------ ADDITIONAL ACCUMU- --------------------
NUMBER OF PAID-IN LATED NUMBER OF
SHARES AMOUNT CAPITAL DEFICIT SHARES AMOUNT
---------- ------ ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1993.......... 7,873,156 $ 78,732 $ 9,010,082 $ (5,963,293) 76,357 $ (28,635)
Exercise of stock options and
warrants, net.................... 131,462 1,315 65,882 -- -- --
Conversion of debt to equity........ 100,000 1,000 58,000 -- -- --
Issuance of stock to retire
warrants......................... 50,000 500 (500) -- -- --
Net income.......................... -- -- -- 721,695 -- --
------------- ----------- ------------ ------------ ---------- -----------
Balance, December 31, 1994.......... 8,154,618 81,547 9,133,464 (5,241,598) 76,357 (28,635)
Exercise of stock options and
warrants, net.................... 503,731 5,037 369,413 -- -- --
Dividend of AMCON stock............. -- -- -- (799,407) -- --
Net income.......................... -- -- -- 882,600 -- --
------------- ----------- ------------ ------------ ---------- -----------
Balance, December 31, 1995.......... 8,658,349 86,584 9,502,877 (5,158,405) 76,357 (28,635)
Exercise of stock options........... 323,332 3,233 179,265 -- -- --
Tax benefit associated with stock
options.......................... -- -- 139,995 -- -- --
Net income.......................... -- -- -- 1,257,132 -- --
------------- ----------- ------------ ------------ ---------- -----------
Balance, December 31, 1996.......... 8,981,681 $ 89,817 $ 9,822,137 $ (3,901,273) 76,357 $ (28,635)
============= =========== ============ ============ ========== ===========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ORGANIZATION AND OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND OPERATIONS
Cable Car Beverage Corporation ("Cable Car"), formerly Great Eastern
International, Inc., was incorporated under the laws of Delaware on April 1,
1968. Since 1987, Cable Car's primary business has been the marketing and
distribution of beverages and it has been engaged in the food and beverage
business since 1986.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
Cable Car's consolidated financial statements include the accounts of its
wholly-owned subsidiaries Old San Francisco Seltzer, Inc. ("SFS") and Fountain
Classics, Inc. ("FCI"). All significant intercompany accounts and transactions
have been eliminated.
Revenue Recognition
Revenue from beverage finished product and concentrate sales are recorded
at the time of receipt and acceptance by the customer.
Concentration of Credit Risk
Cable Car's customers consist primarily of beverage distributors. Financial
instruments which potentially subject Cable Car to concentrations of credit risk
are primarily accounts receivable, short-term investments and cash equivalents.
Cable Car performs ongoing credit evaluations of its customers' financial
condition and generally requires no collateral from its customers. Cable Car's
sales to major customers are discussed in Note 9.
Inventories
Inventories are recorded at the lower of cost or market. Cost is determined
using the first-in, first-out (FIFO) method.
Property and Equipment
Property and equipment, primarily consisting of furniture and office
equipment, is stated at cost and is generally depreciated on a straight-line
method over the estimated useful lives of the respective depreciable assets of
three to five years. Maintenance and repairs are expensed as incurred and
improvements are capitalized.
Goodwill
Goodwill is recorded for the excess of the purchase price over the fair
value of net tangible assets acquired. Goodwill is amortized on a straight-line
basis over a 25-year period. The recoverability of goodwill is assessed
quarterly, based on undiscounted projected cash flows. Impairment is recognized
when a permanent diminution in value occurs.
Net Income Per Common Share
Net income per common share is computed under the treasury stock method
using the weighted average number of common shares and dilutive common stock
equivalent shares outstanding during the year.
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Cash Equivalents
Generally, only highly liquid investments purchased with original
maturities of three months or less are considered to be cash equivalents. Cash
equivalents included in cash and cash equivalents at December 31, 1996 and 1995
are certificates of deposit which aggregated approximately $135,429 and
$318,694, respectively. Cash equivalents are carried at cost which approximates
fair value. Cable Car has a cash investment policy which generally restricts
investments to ensure preservation of principal and maintenance of liquidity.
Short-term Investments
Short-term investments are stated at an amortized cost of $195,042 which,
at December 31, 1996, approximates market value.
Significant Estimates
Certain estimates and assumptions that affect the reported amounts of
assets and liabilities, and the reported amounts of revenue and expenses are
made by management in the preparation of financial statements in conformity with
generally accepted accounting principles. Actual results could differ from these
estimates.
(2) MERGER OF SHEYA BROTHERS SPECIALTY BEVERAGES, INC. AND INVESTMENT IN AMCON
STOCK
On June 7, 1993, Cable Car merged its wholly-owned subsidiary, Sheya
Brothers Specialty Beverages, Inc. ("SBSB"), into AMCON Distributing Company
("AMCON"), a then privately held, Omaha-based wholesale distributor. In exchange
for the net assets of SBSB, Cable Car received 12.5% of the issued and
outstanding common stock of AMCON. As part of the transaction, Cable Car agreed
to distribute a minimum of two-thirds of the AMCON shares to its shareholders,
representing approximately an 8% ownership interest in AMCON.
During the third quarter of 1995, Cable Car wrote-down its investment in
the market price of AMCON common stock as reported by NASDAQ on August 4, 1995,
the date upon which the stock was initially included on NASDAQ, which resulted
in a charge of $848,342. Cable Car then distributed 266,469 shares of AMCON
common stock as a dividend to Cable Car's shareholders of record as of July 5,
1995. This distribution of 266,469 shares of AMCON represented 87% of Cable
Car's holdings in AMCON. At December 31, 1996, Cable Car continued to hold
39,674 shares of AMCON common stock.
(3) INVENTORIES
Inventories consist of the following:
DECEMBER 31,
------------------------------------
1996 1995
-------------- -------------
Finished goods..............$ 1,330,990 $ 1,009,223
Raw materials............... 1,099,906 799,034
------------- -------------
$ 2,430,896 $ 1,808,257
============= =============
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(4) OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
DECEMBER 31,
--------------------------------
1996 1995
-------------- ------------
Commitments for marketing and
promotional programs...................$ 397,474 $ 218,621
Unbilled inventory receipts.............. 64,521 106,808
Bonuses.................................. 141,800 75,000
Travel and entertainment................. 36,186 53,500
Other, individually not material......... 142,207 89,050
------------ ------------
$ 782,188 $ 542,979
============ ============
(5) LINE OF CREDIT
During 1996, Cable Car extended for one year its $500,000 revolving line of
credit collateralized by Cable Car's accounts receivable and inventory. No
borrowings were outstanding under the line as of December 31, 1996. Borrowings
made under the agreement bear interest at a variable rate of one point over
prime. The line of credit agreement also includes certain financial and other
covenants. The agreement is currently scheduled to expire in June 1997.
(6) INCOME TAXES
Cable Car's net deferred income tax asset consists of the following:
DECEMBER 31,
---------------------------------
1996 1995
----------- ------------
Net operating loss carryforwards...........$ 621,000 $ 742,000
Accrued liabilities and reserves........... 170,000 145,000
Other, net................................. 39,000 45,000
Allowance for doubtful accounts............ 38,000 21,000
----------- -----------
$ 868,000 $ 953,000
=========== ===========
The net operating loss carryforwards are subject to certain annual
utilization limits. Previously, Cable Car had recorded a valuation allowance
equal to the deferred income tax assets due to management's uncertainty about
the likelihood that Cable Car would fully utilize these benefits. However, it
was determined by Cable Car during 1995 that, based upon Cable Car's recent and
expected future operating results, it was then more likely than not that Cable
Car would realize its future income tax benefits. Based on this determination,
Cable Car released the valuation allowance and provided an income tax benefit of
$936,440 during 1995. As of December 31, 1996, Cable Car has net operating loss
carryforwards of approximately $1,634,000 which expire from 2000 through 2005.
Pursuant to Section 382 of the Internal Revenue Code, Cable Car is limited in
the amount of net operating loss carryforwards it may use each year to offset
taxable income. Cable Car's consolidated Section 382 annual limitation is
approximately $343,000.
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The provision (benefit) for income taxes is comprised of the following:
YEAR ENDED DECEMBER 31,
-------------------------------------------
1996 1995 1994
------------ ------------ ---------
Current................$ 721,000 $ 219,000 $ 15,100
Deferred............... 86,000 (953,000) --
------------ ------------ ----------
$ 807,000 $ (734,000) $ 15,100
============ ============ ==========
The provision for income taxes differs from the amount computed by applying
the U.S. federal income tax rate of 34% to pretax earnings as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1996 1995 1994
------------- ------------ ----------
<S> <C> <C> <C>
Income before income taxes.................................$ 2,063,678 $ 148,691 $ 737,000
============= ============ ===========
U.S. federal income tax at statutory rate..................$ 702,000 $ 50,600 $ 251,000
Differences:
State income taxes, net of federal
tax benefit......................................... 43,000 5,200 --
Loss on dividend of AMCON stock........................ -- 318,100 --
Increase (decrease) in unrecognized net
operating losses and future deductions.............. -- (1,139,000) (271,000)
Non-deductible items and other, net.................... 62,000 31,100 35,100
------------- ------------ -----------
Provision for income taxes.................................$ 807,000 $ (734,000) $ 15,100
============= ============ ===========
</TABLE>
(7) STOCK OPTIONS
Cable Car, on a discretionary basis, grants non-qualified stock options to
directors, key employees, and consultants to purchase common stock of Cable Car.
Stock options are granted at an exercise price not less than the fair market
value of the common stock on the date of grant and generally vest over four or
five years. The expiration period generally occurs between three to six years.
The following table summarizes stock option activity for 1994, 1995 and
1996:
WEIGHTED AVERAGE
SHARES EXERCISE PRICE
------ --------------
Outstanding at December 31, 1993......... 1,224,996 $ .85
Granted during 1994................... 100,000 .75
Exercised during 1994................. (110,000) .45
Forfeited during 1994................. (15,000) .75
------------ -------
Outstanding at December 31, 1994......... 1,199,996 .88
Granted during 1995................... 312,500 1.23
Exercised during 1995................. (101,666) .70
Forfeited during 1995................. (275,000) .75
------------ -------
Outstanding at December 31, 1995......... 1,135,830 1.02
Granted during 1996................... 190,000 2.00
Exercised during 1996................. (323,332) .56
Forfeited during 1996................. (99,998) 2.37
------------ -------
Outstanding at December 31, 1996......... 902,500 $ 1.24
============ =======
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The weighted average fair values of options granted during 1996 and 1995 were
$.448 and $.685, respectively.
The following table summarizes information about stock options as of December
31, 1996:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------- ---------------------------
WEIGHTED AVG. WEIGHTED
REMAINING AVERAGE
RANGE OF NUMBER CONTRACTUAL NUMBER EXERCISE
EXERCISE PRICES OUTSTANDING LIFE EXERCISABLE PRICE
--------------- ----------- ---- ----------- -----
$0.70 - 0.75 215,000 2.86 years 215,000 $ 0.70
$1.10 225,000 3.08 years 205,800 $ 1.10
$1.25 272,500 3.65 years 184,300 $ 1.25
$2.00 190,000 4.31 years -- --
------------- ---------- ------------ --------
902,500 3.46 years 605,100 $ 1.00
============= ========== ============ ========
Cable Car applies APB 25 in accounting for its stock compensation plans,
and no compensation expense has been recognized in the financial statements for
options granted to employees and directors. Had compensation expense for Cable
Car's stock option plan been determined based on the fair values at the grant
dates for awards under the plan consistent with the method of accounting
prescribed by FASB Statement 123, Cable Car's net income and income per share
would have been decreased to the pro forma amounts indicated below for the years
ended December 31:
1996 1995
------------ -----------
Net income:
As reported..........................$ 1,257,132 $ 882,600
Pro forma............................ 1,221,278 805,378
Net income per share:
As reported..........................$ 0.14 $ 0.10
Pro forma............................ 0.13 0.09
In accordance with the guidance provided under SFAS 123, the fair value of
each option grant is estimated using the Black- Scholes option-pricing model
with the following weighted-average assumptions: dividend yield of zero;
expected volatility of 47% in 1996 and 36% in 1995; risk-free interest rate of
5.83% in 1996 and 5.59% in 1995; and an expected term of five years. The
risk-free interest rate used in the calculation is the yield on the grant date
of the U.S. Treasury Strip with a maturity equal to the expected term of the
option.
(8) COMMITMENTS
Cable Car has commitments to lease office space through September 30, 1997.
Rental expense of $41,339, $39,139 and $37,901 has been recognized for the years
ended December 31, 1996, 1995 and 1994, respectively. At December 31, 1996, the
minimum annual rental commitments under noncancellable operating leases were
approximately $28,350 through September 1997.
Cable Car has outstanding commitments to purchase raw materials (primarily
glass) which aggregate approximately $2.6 million at December 31, 1996.
Cable Car has a licensing agreement with Stewart's Restaurants, Inc. which
provides for a sliding-scale royalty with a minimum annual royalty of $50,000.
<PAGE>
(9) MAJOR CUSTOMERS
Two customers accounted for approximately 18% and 14% individually of Cable
Car's net sales for the year ended December 31, 1996. Two customers each
accounted for approximately 20% of net sales for the years ended December 31,
1995 and 1994.
(10) QUARTERLY INFORMATION (UNAUDITED) (A)
The following interim financial information represents the 1996 and 1995
consolidated results of operations on a quarterly basis:
<TABLE>
<CAPTION>
PER
COMMON
PRETAX SHARE
GROSS INCOME NET NET
QUARTER ENDED REVENUE PROFIT (LOSS) INCOME INCOME
------------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
December 31, 1996.................$ 4,275,088 $ 1,153,903 $ 339,092 $ 208,610 $ .02
September 30, 1996................ 5,664,924 1,579,016 758,762 445,115 .05
June 30, 1996..................... 5,249,735 1,482,795 675,506 430,051 .05
March 31, 1996.................... 3,682,809 985,908 290,318 173,356 .02
December 31, 1995.................$ 3,214,852 $ 699,116 $ 120,515 $ 102,054 $ .01
September 30, 1995................ 4,286,294 1,060,199 (502,320) 355,763 .04
June 30, 1995..................... 3,453,111 957,094 397,313 322,001 .04
March 31, 1995.................... 1,889,363 508,051 133,182 102,782 .01
</TABLE>
(A) The Unaudited Quarterly Information for 1995 was not reviewed by Cable
Car's independent accountants in accordance with standards established
for such reviews.
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
PAGE
----
Consolidated Balance Sheet at September 30, 1997 and at
December 31, 1996 (Unaudited) .........................................
Consolidated Statement of Operations for the three-month and
nine-month periods ended September 30, 1997 and September 30,
1996 (Unaudited).......................................................
Consolidated Statement of Cash Flows for the nine-month periods ended
September 30, 1997 and September 30, 1996 (Unaudited)..................
Consolidated Statement of Changes in Stockholders' Equity (Unaudited)....
Notes to Unaudited Consolidated Financial Statements for the nine-month
period ended September 30, 1997 (Unaudited) ...........................
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, DECEMBER 31,
1997 1996
-------------- --------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents..............................................$ 1,351,698 $ 1,408,729
Short-term investments................................................. -- 195,042
Accounts receivable, net of allowance
for doubtful accounts of $160,461 and
$100,743, respectively............................................... 2,477,909 1,336,094
Inventories, net....................................................... 3,326,902 2,430,896
Prepaid expenses and other current assets.............................. 101,503 23,582
Deferred income tax assets............................................. 582,497 394,029
-------------- --------------
Total current assets.......................................... 7,840,509 5,788,372
Property and equipment, net
Property and equipment, less accumulated
depreciation of $187,173 and $144,441,
respectively ........................................................ 129,516 130,778
Other assets:
Goodwill and other intangibles, less accumulated
amortization of $446,145 and $387,168, respectively.................. 1,497,971 591,265
Investment in AMCON Distributing Company............................... 99,185 99,185
Other assets........................................................... 52,265 58,603
Deferred income tax assets............................................. 370,022 473,579
-------------- --------------
$ 9,989,468 $ 7,141,782
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities...............................$ 331,281 $ 231,408
Accrued income taxes................................................... 53,024 146,140
Other current liabilities.............................................. 1,571,379 782,188
Current portion of long-term debt...................................... 250,000 --
-------------- --------------
Total current liabilities..................................... 2,205,684 1,159,736
-------------- --------------
Long-term debt............................................................ 150,000 --
-------------- --------------
Stockholders' equity:
Common stock, $.01 par value; 25,000,000 shares authorized;
9,174,681 shares issued at September 30, 1997 and
8,981,681 issued at December 31, 1996................................ 91,747 89,817
Additional paid-in capital............................................. 10,262,812 9,822,137
Accumulated deficit.................................................... (2,692,140) (3,901,273)
Less - 76,357 common shares in treasury................................ (28,635) (28,635)
-------------- --------------
7,633,784 5,982,046
-------------- --------------
$ 9,989,468 $ 7,141,782
============== ==============
See notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
--------------------------------- -------------------------------
1997 1996 1997 1996
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Revenue:
Sales..............................................$ 7,762,071 $ 5,664,924 $ 20,508,767 $ 14,597,468
Costs and expenses:
Cost of goods sold................................. 5,544,692 4,085,908 14,668,250 10,549,749
General and administrative......................... 388,510 306,217 1,328,883 821,346
Selling and distribution........................... 864,659 503,836 2,250,434 1,469,167
Depreciation and amortization...................... 44,580 21,785 101,709 63,869
------------- ------------- -------------- -------------
6,842,441 4,917,746 18,349,276 12,904,131
------------- ------------- -------------- -------------
Income from operations....................... 919,630 747,178 2,159,491 1,693,337
Other income and (expenses):
Interest income and other
non-operating income............................ 21,091 11,626 52,435 31,519
Interest expense................................... -- (42) -- (270)
------------- ------------- -------------- -------------
Income before income taxes................... 940,721 758,762 2,211,926 1,724,586
Provision for income taxes............................ 424,586 313,647 1,002,793 676,064
------------- ------------- -------------- -------------
Net income...................................$ 516,135 $ 445,115 $ 1,209,133 $ 1,048,522
============= ============== ============ =============
Net income per common share...........................$ .05 $ .05 $ .13 $ .12
============= ============== ============ ============
Weighted average common and
common equivalent shares........................... 9,921,964 9,268,101 9,665,592 9,066,057
============= ============== ============ ============
See notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income..................................................................$ 1,209,133 $ 1,048,522
Adjustment to reconcile net income to net cash
from operating activities:
Other loss (gain)....................................................... -- 1,973
Depreciation and amortization........................................... 101,709 63,869
Provision for loss on accounts receivable............................... 59,718 43,292
Change in assets and liabilities:
Accounts receivable..................................................... (1,293,821) (865,841)
Inventories............................................................. (896,006) (691,184)
Prepaid expenses and other current assets............................... (77,921) (7,828)
Other assets............................................................ 6,338 (69,882)
Deferred income tax assets.............................................. (84,911) (16,942)
Accounts payable and accrued liabilities................................ 99,873 475,461
Accrued income taxes.................................................... (93,116) 229,088
Other current liabilities............................................... 789,191 429,593
------------ -------------
Net cash from (used in) operating activities.............................. (179,813) 640,121
------------ -------------
Cash flows from investing activities:
Proceeds from short-term investments.......................................... 195,042 --
Cash paid to reacquire certain distribution rights............................ (30,790) --
Property and equipment acquisitions........................................... (41,470) (52,493)
------------ -------------
Net cash from (used in) investing activities.............................. 122,782 (52,493)
------------ -------------
Cash flows from financing activities:
Principal payments on debt.................................................... -- (5,585)
Proceeds from issuance of stock............................................... -- 134,998
------------ -------------
Net cash from financing activities........................................ -- 129,413
------------ -------------
Net increase (decrease) in cash
and cash equivalents............................................................ (57,031) 717,041
Cash and cash equivalents at beginning of period................................... 1,408,729 576,191
------------ -------------
Cash and cash equivalents at end of period.........................................$ 1,351,698 $ 1,293,232
============ =============
Supplemental disclosure of non-cash financing and investing activities:
Issuance of stock to reacquire certain distribution rights......................$ 76,980 --
Forgiveness of accounts receivable to reacquire certain
distribution rights........................................................... 92,288 --
Consideration for amendments made to licensing agreement
with Stewart's Restaurants:
Common stock................................................................ 365,625 --
Note payable................................................................ 400,000 --
See notes to unaudited consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
COMMON STOCK TREASURY STOCK
----------------------- ADDITIONAL ACCUMU- -----------------------
NUMBER OF PAID-IN LATED NUMBER OF
SHARES AMOUNT CAPITAL DEFICIT SHARES AMOUNT
------ ------ ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996.............. 8,981,681 $ 89,817 $ 9,822,137 $ (3,901,273) 76,357 $ (28,635)
Stock issued to reacquire
certain distribution rights......... 43,000 430 76,550 -- -- --
Stock issued in consideration
for amendments made to
licensing agreement with
Stewart's Restaurants............... 150,000 1,500 364,125 -- -- --
Net income.............................. -- -- -- 1,209,133 -- --
------------- ----------- ------------- -------------- ---------- -----------
Balance, September 30, 1997............. 9,174,681 $ 91,747 $ 10,262,812 $ (2,692,140) 76,357 $ (28,635)
============= =========== ============= ============== ========== ===========
See notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
CABLE CAR BEVERAGE CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) FINANCIAL STATEMENTS PRESENTATION
The consolidated interim financial statements of Cable Car Beverage
Corporation ("Cable Car") at September 30, 1997, and for the nine-month and
three-month periods ended September 30, 1997 and September 30, 1996 are
unaudited. In the opinion of management, all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the consolidated
financial position, results of operations and cash flows for all periods
presented have been made.
Cable Car's consolidated interim financial statements include the accounts
of its wholly-owned subsidiaries, Old San Francisco Seltzer, Inc. and Fountain
Classics, Inc.
Certain information and substantially all footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been omitted. It is suggested that these financial
statements be read in conjunction with the fiscal year end Company's
consolidated financial statements, filed in Form 10-K for December 31, 1996. The
results of operations for the period ended September 30, 1997 are not
necessarily indicative of the operating results for the full year.
Certain reclassifications have been reflected in the prior period financial
statements to conform to the current year presentations.
(2) NET INCOME PER COMMON SHARE
Net income per common share was computed under the treasury stock method
using the weighted average number of common shares and dilutive common stock
equivalent shares outstanding during the period. In February 1997, the FASB
issued SFAS No. 128, "Earnings per Share," which is effective for periods ending
after December 15, 1997 and requires changes in the computation, presentation
and disclosure of earnings per share. Earnings per share for all prior periods
must be restated to conform with computation provisions of SFAS No. 128. The
adoption of SFAS No. 128 for the year ended December 31, 1997 will not have any
impact on Cable Car's reported financial results.
(3) INVENTORIES
Inventories consisted of:
SEPTEMBER 30, DECEMBER 31,
1997 1996
-------------- ---------------
Finished goods...................$ 1,871,220 $ 1,330,990
Raw materials.................... 1,455,682 1,099,906
-------------- --------------
$ 3,326,902 $ 2,430,896
============== ==============
(4) MERGER WITH TRIARC COMPANIES, INC.
On June 24, 1997 Cable Car entered into a definitive merger agreement (the
"Merger Agreement") with Triarc Companies, Inc. ("Triarc") whereby Cable Car
will become a wholly-owned subsidiary of Triarc. The acquisition is currently
expected to close by the end of November 1997 and is subject to approval of
Cable Car's shareholders who are scheduled to vote on a proposal to approve the
Merger Agreement on November 25, 1997.
<PAGE>
(b) Pro Forma Financial Information
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma (i) condensed consolidated balance sheet
of the Company as of September 28, 1997 and (ii) condensed consolidated
statements of operations of the Company for the year ended December 31, 1996 and
for the nine months ended September 28, 1997 have been prepared by adjusting
such financial statements, as derived and condensed, as applicable, from (i) the
consolidated financial statements in Triarc's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 (the "Triarc Form 10-K"), audited by
Deloitte & Touche LLP and (ii) the unaudited condensed consolidated financial
statements in Triarc's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 28, 1997 (the "Triarc Form 10-Q"). Such adjustments to the
condensed consolidated balance sheet as of September 28, 1997 reflects, in a
first step, the December 23, 1997 sale (the "C.H. Patrick Sale") by Triarc of
all of the outstanding stock of C.H. Patrick & Co., Inc. ("C.H. Patrick"), its
dyes and specialty chemicals subsidiary, to The B.F. Goodrich Company, as
reported in Triarc's Current Report on Form 8-K/A filed on January 7, 1998, and,
in a second step, the Cable Car Acquisition. Such adjustments to the condensed
consolidated statements of operations for the year ended December 31, 1996 and
the nine months ended September 28, 1997 reflect, in a first step, certain
previously reported transactions (the "1997 Transactions" and collectively with
the Cable Car Acquisition, the "Transactions") consisting of (a) the Company's
sale of its 355 company-owned Arby's restaurants (the "Arby's Restaurants Sale")
to an affiliate of RTM, Inc. ("RTM") on May 5, 1997, as previously reported in
Triarc's Current Report on Form 8-K/A filed on August 4, 1997, (b) the Company's
sale of its rights to the C&C beverage line, including the C&C trademark (the
"C&C Sale"), as previously reported in Triarc's Current Report on Form 8-K filed
on August 4, 1997, (c) the Company's acquisition of Snapple Beverage Corp.
("Snapple") from The Quaker Oats Company ("Quaker") on May 22, 1997, as
previously reported in Triarc's Current Report on Form 8-K/A on August 5, 1997
and (d) the C.H. Patrick Sale and, in a second step, the Cable Car Acquisition.
The combined statements of certain revenues and operating expenses of
Snapple for the year ended December 31, 1996 and for the period from January 1,
1997 to the May 22, 1997 acquisition date included in the unaudited pro forma
condensed consolidated financial statements have been derived and condensed, as
applicable, from (i) the combined financial statements for the year ended
December 31, 1996 (the "Snapple 1996 Financial Statements") audited by Arthur
Andersen LLP and (ii) the combination of (a) unaudited combined financial
statements for the three months ended March 31, 1997 (collectively with the
Snapple 1996 Financial Statements, the "Snapple Financial Statements") and (b)
the Snapple unaudited combined statement of certain revenues and operating
expenses for the period from April 1, 1997 to May 22, 1997 (the "Snapple May 22,
1997 Financial Statements"). The Snapple Financial Statements are included in
Triarc's Current Report on Form 8-K/A filed on August 5, 1997. The Snapple May
22, 1997 Financial Statements were provided to the Company by Quaker.
The consolidated balance sheet of Cable Car as of September 30, 1997 and
consolidated statements of operations of Cable Car for the year ended December
31, 1996 and for the nine months ended September 30, 1997 included in the
unaudited pro forma condensed consolidated financial statements have been
derived, condensed and reclassified, as applicable, from: (i) the consolidated
financial statements for the year ended December 31, 1996 (the "Cable Car 1996
Financial Statements") audited by Price Waterhouse L.L.P. and set forth herein
and (ii) the unaudited consolidated financial statements for the nine months
ended September 30, 1997 (collectively with the Cable Car 1996 Financial
Statements, the "Cable Car Financial Statements") as set forth herein.
The allocation of the purchase price of Snapple and the pro forma
adjustments for the allocation of the purchase price of Cable Car on the pro
forma condensed consolidated balance sheet and the effect thereof on pro forma
adjustments to the pro forma condensed consolidated statements of operations are
based on preliminary estimates and are subject to finalization. The pro forma
condensed consolidated financial statements have been prepared as if the C.H.
Patrick Sale and the Cable Car Acquisition had occurred as of September 28, 1997
for the pro forma condensed consolidated balance sheet and the Transactions had
occurred 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. The unaudited pro forma condensed consolidated financial statements
also should be read in conjunction with (i) the Company's audited consolidated
financial statements and management's discussion and analysis of financial
condition and results of operations appearing in the Triarc Form 10-K, (ii) the
Company's unaudited condensed consolidated financial statements and management's
discussion and analysis of financial condition and results of operations
appearing in the Triarc Form 10-Q, (iii) the Snapple Financial Statements and
(iv) the Cable Car Financial Statements. The unaudited 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, as applicable, actually been consummated on September 28, 1997 and
January 1, 1996, respectively, or of the future financial position or results of
operations of the Company.
<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 28, 1997
ADJUSTMENTS PRO FORMA ADJUSTMENTS
FOR THE FOR THE FOR THE
AS C.H. PATRICK C.H. PATRICK CABLE CAR CABLE CAR
REPORTED SALE SALE AS REPORTED ACQUISITION PRO FORMA
-------- ---- ---- ----------- ----------- ---------
(IN THOUSANDS)
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents...........$ 69,149 $ 72,000 (a) $ 104,476 $ 1,352 $ -- $ 105,828
(3,885) (a)
(32,788) (c)
Short-term investments.............. 57,246 -- 57,246 -- -- 57,246
Receivables, net.................... 117,063 (8,012) (a) 109,051 2,478 -- 111,529
Inventories......................... 93,570 (17,074) (a) 76,496 3,327 -- 79,823
Deferred income tax benefit......... 43,571 (12,170) (b) 31,937 582 -- 32,519
536 (c)
Prepaid expenses and other
current assets................... 10,449 -- 10,449 102 -- 10,551
--------- ------------ ---------- ------- ------- ----------
Total current assets.......... 391,048 (1,393) 389,655 7,841 -- 397,496
Investment in Cable Car................ -- -- -- -- 40,844 (d) --
(40,844) (e)
Properties, net........................ 119,992 (8,070) (a) 111,922 130 -- 112,052
Unamortized costs in excess of
net assets of acquired companies.... 288,767 (2,990) (a) 285,777 1,296 25,271 (e) 312,344
Trademarks............................. 260,525 -- 260,525 182 11,118 (e) 271,825
Deferred costs, deposits
and other assets.................... 76,027 (17) (a) 74,608 171 (20) (e) 74,759
(1,402) (c)
------------ ----------- ------------ -------- ------------ -----------
$ 1,136,359 $ (13,872) $ 1,122,487 $ 9,620 $ 36,369 $ 1,168,476
============ =========== ============ ======== ============ ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt...$ 16,696 $ (2,813) (c) $ 13,883 $ 250 $ -- $ 14,133
Accounts payable.................... 71,264 (1,518) (a) 69,746 325 -- 70,071
Accrued expenses and other current
liabilities 176,469 (130) (a) 177,444 1,631 1,300 (d) 180,375
(725) (c)
1,830 (b)
----------- ----------- ---------- --------- ----------- ------------
Total current liabilities........ 264,429 (3,356) 261,073 2,206 1,300 264,579
Long-term debt......................... 737,273 (29,250) (c) 708,023 150 -- 708,173
Deferred income taxes.................. 78,063 -- 78,063 (370) 3,159 (e) 80,852
Deferred income and other liabilities.. 49,441 -- 49,441 -- -- 49,441
Minority interests..................... 22,293 -- 22,293 -- -- 22,293
Stockholders' equity (deficit):
Common stock........................ 3,398 -- 3,398 92 157 (d) 3,555
(92) (e)
Additional paid-in capital.......... 165,146 -- 165,146 10,263 39,387 (d) 204,533
(10,263) (e)
Accumulated deficit................. (136,184) 33,600 (a) (117,450) (2,692) 2,692 (e) (117,450)
(14,000) (b)
(866) (c)
Treasury stock...................... (44,570) -- (44,570) (29) 29 (e) (44,570)
Other............................... (2,930) -- (2,930) -- -- (2,930)
----------- ------------ ----------- ---------- ----------- -----------
Total stockholders' equity
(deficit)...................... (15,140) 18,734 3,594 7,634 31,910 43,138
------------ ----------- ----------- ---------- ----------- -----------
$ 1,136,359 $ (13,872) $ 1,122,487 $ 9,620 $ 36,369 $ 1,168,476
============ =========== ============ ========== ============= ===========
</TABLE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
C.H. PATRICK SALE ADJUSTMENTS
(a) To reflect the C.H. Patrick Sale for estimated net proceeds of
$68,115,000 ($72,000,000 sale price less the payment of estimated
expenses related to the transaction) and the resulting pretax gain,
based on September 28, 1997 balances, of $33,600,000.
(b) To reflect a provision for income taxes of $14,000,000 at C.H.
Patrick's incremental Federal and state income tax rate of 38.25% on
the $33,600,000 pretax gain resulting from the C.H. Patrick Sale noted
in (a) above (of which $2,990,000 represents the write-off of Goodwill
which has no tax benefit). The offset to such provision for Federal
income taxes of $12,170,000 is reflected as a reduction to "Deferred
income tax benefit" since the Company is in a net operating loss
carryforward position and will not be required to pay any Federal
income taxes currently on such pretax gain while the state income tax
portion of $1,830,000 is an addition to "Accrued expenses and other
current liabilities."
(c) To reflect (i) the repayment of certain borrowings of C.H. Patrick
($32,063,000 as of September 28, 1997 consisting of $2,813,000
classified as current and $29,250,000 classified as noncurrent) and
accrued interest thereon of $725,000 and (ii) an extraordinary charge
of $866,000 for the write-off of unamortized deferred financing costs
of $1,402,000 less income tax benefit of $536,000.
CABLE CAR ACQUISITION PRO FORMA ADJUSTMENTS
(d) To reflect the Company's investment in Cable Car of $40,844,000
consisting of (i) $37,406,000 representing the value, as of November
25, 1997, of 1,566,731 shares of Common Stock, par value $.10 per
share, issued in the Cable Car Acquisition based upon the closing
share price of $23 7/8, which was the closing market price for the
Common Stock as reported in the consolidated transaction reporting
system as of November 25, 1997 (the "November 25, 1997 Market Price"),
(ii) $2,788,000 representing the value (based upon the November 25,
1997 Market Price) of 154,931 options to purchase an equal number of
shares of Common Stock with below market option prices issued in
exchange for all of the outstanding Cable Car options as of November
25, 1997 and (iii) $650,000 of an aggregate $1,300,000 of estimated
expenses, of which the remaining $650,000 was attributable to the
registration of the 1,566,731 shares of Common Stock under the
Securities Act and, accordingly, charged to "Additional paid-in
capital."
(e) To reflect the preliminary estimated allocation of the purchase price
of Cable Car as follows (in thousands):
<TABLE>
<CAPTION>
DEBIT
(CREDIT)
--------
<S> <C>
Adjust "Trademarks" to write up the trademarks and tradenames ($7,000)
and distribution network ($4,118) to fair value in accordance with
an independent
appraisal.......................................................................................$ 11,118
Adjust "Deferred costs, deposits and other assets" to eliminate organization costs.................. (20)
Adjust "Deferred income taxes" for increases from the adjustments above less the
value ($2,788) of the Triarc options issued in exchange for the converted Cable
Car options in (d) above........................................................................ (3,159)
Eliminate the "Common stock" ($92), "Additional paid-in-capital" ($10,263),
"Accumulated deficit" ($2,692) and "Treasury stock" ($29) of Cable Car.......................... 7,634
Eliminate the Company's investment in Cable Car..................................................... (40,844)
Adjust "Unamortized costs in excess of net assets of acquired companies" ("Goodwill")
to eliminate the historical Goodwill of Cable Car and record the excess of the
Company's investment in Cable Car over the adjusted net assets of Cable Car..................... 25,271
-----------
$ --
===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
ADJUSTMENTS
ADJUSTMENTS PRO FORMA FOR THE
AS FOR THE 1997 FOR THE 1997 CABLE CAR CABLE CAR
REPORTED SNAPPLE TRANSACTIONS TRANSACTIONS AS REPORTED ACQUISITION PRO FORMA
-------- ------- ------------ ------------ ----------- ----------- ---------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Net sales .....................$ 931,920 $ 550,800 $ (228,031) (a) $ 1,182,462 $ 18,873 $ -- $ 1,201,335
444 (g)
(11,607) (h)
(61,064) (q)
Royalties, franchise fees
and other revenues........... 57,329 -- 9,121 (b) 66,510 -- -- 66,510
60 (g)
--------- ---------- ----------
989,249 550,800 (291,077) 1,248,972 18,873 -- 1,267,845
--------- ---------- ---------- ----------- --------- --------- -----------
Costs and expenses:
Cost of sales................ 652,109 352,900 (187,535) (a) 762,050 13,671 -- 775,721
178 (g)
(10,298) (h)
(45,304) (q)
Advertising, selling and
distribution.............. 139,662 188,400 (24,764) (a) 293,196 1,994 -- 295,190
(1,702) (h)
(6,826) (l)
(1,574) (q)
General and administrative... 131,357 93,900 (9,913) (a) 166,167 1,197 1,475 (r) 168,839
(434) (h)
(45,322) (m)
(3,421) (q)
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 16,600 (2,400) (a) 23,000 -- -- 23,000
--------- ---------- ---------- ----------- --------- --------- -----------
996,228 651,800 (398,215) 1,249,813 16,862 1,475 1,268,150
--------- ---------- ---------- ----------- --------- --------- -----------
Operating profit (loss). (6,979) (101,000) 107,138 (841) 2,011 (1,475) (305)
Interest expense.................. (73,379) -- 8,421 (c) (90,971) -- -- (90,971)
(273) (g)
(28,274) (o)
2,534 (q)
-------- --------- ---------- ---------- --------- --------- -----------
Gain on sale of businesses, net... 77,000 -- -- 77,000 -- -- 77,000
Investment income, net............ 8,239 -- -- 8,239 43 -- 8,282
Other income (expense), net....... (243) -- 16 (h) 182 10 -- 192
683 (j)
(274) (q)
-------- --------- ---------- ---------- --------- --------- -----------
Income (loss) before
income taxes and
minority interests... 4,638 (101,000) 89,971 (6,391) 2,064 (1,475) (5,802)
Provision for income taxes........ (11,294) -- (28,406) (f) (7,996) (807) 172 (s) (8,631)
(578) (k)
28,957 (p)
3,325 (q)
Minority interests in income
of consolidated subsidiary...... (1,829) -- -- (1,829) -- -- (1,829)
--------- ---------- ---------- ----------- --------- --------- -----------
Income (loss) before
extraordinary items.......$ (8,485) $ (101,000) $ 93,269 $ (16,216) $ 1,257 $ (1,303) $ (16,262)
========= ========== ========== =========== ========= ========= ===========
Loss before extraordinary
items per share...........$ (.28) $ (.54) $ (.52) (t)
========= =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRIARC COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 28, 1997
ADJUSTMENTS
PREACQUISITION ADJUSTMENTS PRO FORMA FOR THE
AS PERIOD OF FOR THE 1997 FOR THE 1997 CABLE CAR CABLE CAR
REPORTED SNAPPLE TRANSACTIONS TRANSACTIONS AS REPORTED ACQUISITION PRO FORMA
-------- ------- ------------ ------------ ----------- ----------- ---------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Net sales ........................$ 658,942 $ 172,400 $ (74,195) (a) $ 699,752 $ 20,509 $ -- $ 720,261
243 (g)
(7,119) (h)
(50,519) (q)
Royalties, franchise fees
and other revenues.............. 47,582 -- 2,968 (b) 50,583 -- -- 50,583
33 (g)
---------- ----------- ---------- ---------- --------- --------- ----------
706,524 172,400 (128,589) 750,335 20,509 -- 770,844
---------- ----------- ---------- ---------- --------- --------- ----------
Costs and expenses:
Cost of sales................... 402,813 100,600 (59,127) (a) 396,486 14,668 -- 411,154
96 (g)
(6,412) (h)
(41,484) (q)
Advertising, selling and
distribution.................. 141,058 58,700 (8,145) (a) 187,340 2,250 -- 189,590
(401) (h)
(3,007) (l)
(865) (q)
General and administrative...... 108,723 28,200 (3,319) (a) 120,803 1,431 1,077 (r) 123,311
(293) (h)
(9,955) (m)
(2,553) (q)
Facilities relocation and
corporate restructuring...... 7,350 -- (5,597) (a) 1,753 -- -- 1,753
Acquisition related............. 32,440 -- -- 32,440 -- -- 32,440
Reduction in carrying
value of long-lived
assets impaired or
to be disposed of............ -- 1,414,600 (1,414,600) (n) -- -- -- --
---------- ----------- ---------- ---------- --------- --------- ----------
692,384 1,602,100 (1,555,662) 738,822 18,349 1,077 758,248
---------- ----------- ---------- ---------- --------- --------- ----------
Operating profit (loss).... 14,140 (1,429,700) 1,427,073 11,513 2,160 (1,077) 12,596
Interest expense..................... (54,807) -- 2,756 (c) (60,585) -- -- (60,585)
(152) (g)
(10,969) (o)
2,587 (q)
--------- ----------- ---------- ---------- --------- --------- ---------
Gain on sale of businesses, net...... 261 -- 2,342 (d) 2,100 -- -- 2,100
(503) (i)
Investment income, net............... 10,927 -- -- 10,927 52 -- 10,979
Other income, net.................... 3,603 -- (544) (e) 3,478 -- -- 3,478
381 (j)
69 (h)
(31) (q)
--------- ----------- ---------- ---------- --------- --------- ---------
Income (loss) before
income taxes and
minority interests...... (25,876) (1,429,700) 1,423,009 (32,567) 2,212 (1,077) (31,432)
Benefit from (provision for)
income taxes....................... 5,693 -- (3,701) (f) 7,938 (1,003) 129 (s) 7,064
14 (k)
4,679 (p)
1,253 (q)
Minority interests in income
of consolidated subsidiary......... (1,223) -- -- (1,223) -- -- (1,223)
---------- ----------- ---------- ---------- --------- --------- --------
Income (loss) before
extraordinary items..........$ (21,406) $(1,429,700) $1,425,254 $ (25,852) $ 1,209 $ (948) $ (25,591)
========== =========== ========== ========== ========= ========= =========
Loss before extraordinary
items per share..............$ (.71) $ (.86) $ (.81)(t)
========== ========== =========
</TABLE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
ARBY'S RESTAURANTS 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 Arby's restaurants and the portion of the
facilities relocation and corporate restructuring charge associated
with restructuring the restaurant segment in connection with the
Arby's Restaurants 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 had 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 avoided as a result of the Company no longer operating
restaurants. Since the Company no longer owns any Arby's restaurants
but continues to operate as the Arby's franchisor, it undertook a
reorganization of its restaurant segment eliminating 65 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 nine months ended
September 28, 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 through May 5, 1997 on the sales of the
restaurants sold pursuant to the Arby's Restaurants Sale at the rate
of 4%.
(c) To reflect a reduction to interest expense relating to the debt
assumed by RTM.
(d) To reflect the elimination of the $2,342,000 loss on sale of
restaurants recorded in the nine months ended September 28, 1997.
(e) To reflect the elimination of a $544,000 gain (only the portion
related to the restaurant headquarters) on termination of a portion of
the Fort Lauderdale, Florida headquarters lease for space no longer
required by the restaurant segment as a result of the Arby's
Restaurants Sale recorded in the nine months ended September 28, 1997.
(f) To reflect the income tax effects of the Arby's Restaurants Sale at
the 38.9% incremental Federal and state income tax rate of Arby's,
Inc., a wholly-owned subsidiary of Triarc.
C&C SALE PRO FORMA ADJUSTMENTS
(g) To reflect through the date of the C&C Sale (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 the buyer of
the C&C business to be fulfilled and fees related to the technical
services to be performed, both under the contract with the buyer, (ii)
imputation of interest expense on the deferred revenues and (iii)
recognition of the estimated cost of the concentrate to be sold.
(h) 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.
(i) To reflect the elimination of the $503,000 gain on the C&C Sale
recorded in the nine months ended September 28, 1997.
(j) To reflect accretion of the discount on the portion of the note
received in the C&C Sale.
(k) To reflect the income tax effects of the C&C Sale at the 36.6%
incremental Federal and state income tax rate of Royal Crown Company,
Inc., a wholly-owned subsidiary of Triarc and the owner of the C&C
beverage line prior to its sale.
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(CONTINUED)
SNAPPLE ACQUISITION PRO FORMA ADJUSTMENTS
<TABLE>
<CAPTION>
(l) Represents adjustments to "Advertising, selling and distribution" expenses as follows (in thousands):
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1996 SEPTEMBER 28, 1997
----------------- ------------------
<S> <C> <C>
To record (reverse) net purchases (depreciation) of
refrigerated display cases expensed when
purchased and placed in service................................$ 3,174 $ (879)
To reverse reported take-or-pay expense for obligations
associated with long-term production contracts
as a result of adjustment to fair value........................ (10,000) (2,128)
------------ -------------
$ (6,826) $ (3,007)
============ =============
(m) Represents adjustments to "General and administrative" expenses as follows (in thousands):
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1996 SEPTEMBER 28, 1997
----------------- ------------------
To record amortization of trademarks and tradenames
of $210,000 over an estimated life of 35 years.................$ 6,000 $ 2,334
To record amortization of Goodwill of $88,942 over an
estimated life of 35 years..................................... 2,541 989
To reverse reported amortization of intangibles for which
no amortization was recorded subsequent to March
31, 1997 when they were written down to their
estimated fair values.......................................... (54,200) (13,400)
To record amortization relating to the excess of fair value
of an equity investment over the underlying book value
over an estimated life of 35 years............................. 337 122
------------ -------------
$ (45,322) $ (9,955)
============ =============
(n) To reverse the historical reduction in carrying value of long-lived
assets impaired or to be disposed of for the nine months ended
September 28, 1997 in connection with the sale of Snapple to Triarc.
(o) Represents adjustments to "Interest expense" as follows (in thousands):
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1996 SEPTEMBER 28, 1997
----------------- ------------------
To record interest expense at a weighted average rate of 10.2%
on the $330,000 of borrowings under a $380,000 credit
agreement (the "Credit Agreement") made in connection with
the acquisition of Snapple........................................$ (33,424) $ (12,811)
To record amortization on $11,200 of deferred financing
costs associated with the Credit Agreement........................ (1,889) (713)
To reverse reported interest expense on the refinanced
bank facility..................................................... 6,086 2,231
To reverse reported amortization of deferred financing costs
associated with the refinanced bank facility...................... 953 324
---------- -----------
$ (28,274) $ (10,969)
========== ===========
</TABLE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(CONTINUED)
<TABLE>
<CAPTION>
(p) Represents adjustments to "Benefit from (provision for) income taxes" (in thousands):
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1996 SEPTEMBER 28, 1997
----------------- ------------------
<S> <C> <C>
To reflect an income tax benefit on the adjusted
historical pretax loss at Snapple's incremental
Federal and state income tax rate of 39% (exclusive
of nondeductible Goodwill write-off and/or
amortization) since no income tax benefit is
reflected in the reported historical results of
operations........................................................$ 26,286 $ 65,208
To reflect the estimated income tax effect of the
above adjustments (exclusive of nondeductible
Goodwill write-off and/or amortization) at 39%.................... 2,671 (60,529)
---------- -----------
$ 28,957 $ 4,679
========== ===========
C.H. PATRICK SALE PRO FORMA ADJUSTMENTS
(q) To reflect the elimination of the sales, cost of sales, advertising,
selling and distribution expenses, general and administrative
expenses, interest expense, other income and provision for income
taxes related to the operations sold in the C.H. Patrick Sale.
CABLE CAR ACQUISITION PRO FORMA ADJUSTMENTS
(r) Represents adjustments to "General and administrative" expenses as
follows (in thousands):
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1996 SEPTEMBER 28, 1997
----------------- ------------------
To record amortization of Goodwill of $26,567 over an
estimated useful life of 25 years.................................$ 1,063 $ 797
To record amortization of trademarks and tradenames and
distribution network of $11,300 over an estimated
useful life of 25 years........................................... 452 339
To reverse reported amortization of intangibles....................... (40) (59)
---------- -----------
$ 1,475 $ 1,077
========== ===========
</TABLE>
(s) To reflect income tax benefit of the amortization of trademarks and
tradenames and distribution network contained in the above adjustment
at Cable Car's incremental Federal and state income tax rate of 38%.
(t) The loss before extraordinary items per share has been determined by
dividing the loss before extraordinary items by the weighted average
shares outstanding (29,898,000 and 29,959,000 for the year ended
December 31, 1996 and the nine-month period ended September 28, 1997,
respectively) plus the 1,566,731 shares issued in connection with the
Cable Car Acquisition.
<PAGE>
(c) Exhibits
None
<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: February 4, 1998 By: /s/ JOHN L. BARNES, JR.
-----------------------
John L. Barnes, Jr.
Senior Vice President
and Chief Financial Officer
