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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) October 25, 2000
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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
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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 October 25, 2000, Triarc Companies, Inc. ("Triarc" and, collectively
with its subsidiaries, the "Company") completed the sale (the "Snapple Beverage
Sale") of all of the outstanding capital stock of its subsidiaries Snapple
Beverage Group, Inc. ("Snapple Beverage Group"), the parent company of Snapple
Beverage Corp. ("Snapple"), Mistic Brands, Inc. ("Mistic") and Stewart's
Beverages, Inc. ("Stewart's"), and Royal Crown Company, Inc. ("Royal Crown") to
affiliates of Cadbury Schweppes plc (the "Purchaser") for $901,250,000 in cash,
subject to post-closing adjustment, plus the assumption of $425,112,000 of debt
and related accrued interest. A $426,594,000 portion of the cash received was
used to repay outstanding obligations under a related senior bank credit
facility. In addition, following the closing of the Snapple Beverage Sale
payments of approximately $123,638,000 were made by Snapple Beverage Group with
respect to Snapple Beverage Group employee stock options.
Cadbury Schweppes does not have any material relationship with the
Company or any of its affiliates, any director or any officer of the Company or
any associate of any such director or officer.
A copy of the Agreement and Plan of Merger relating to the sale of
Snapple Beverage Group and Royal Crown was previously filed by the Company as an
exhibit to its Current Report on Form 8-K filed on September 20, 2000. A copy of
the press release with respect to the closing of the transaction was previously
filed by the Company as an exhibit to its Current Report on Form 8-K filed on
October 30, 2000.
Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Information
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma (i) condensed consolidated balance
sheet of the Company as of July 2, 2000 and (ii) condensed consolidated
statements of operations of the Company for the year ended January 2, 2000 and
the six months ended July 2, 2000 have been prepared by adjusting such financial
statements, as derived from (i) the audited consolidated financial statements in
Triarc's Annual Report on Form 10-K for the fiscal year ended January 2, 2000
(the "Triarc Form 10-K") and (ii) the unaudited condensed consolidated financial
statements in Triarc's Quarterly Report on Form 10-Q for the fiscal quarter
ended July 2, 2000 (the "Triarc Form 10-Q"). Such adjustments are to reflect the
sale of Snapple Beverage Group (the Company's premium beverage business) and
Royal Crown (the Company's soft drink concentrate business) on October 25, 2000
and the related repayment or assumption of certain debt by the Purchaser, as if
such transactions had occurred as of July 2, 2000 for the condensed consolidated
balance sheet and as of January 4, 1999 for the 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 and (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. 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 the sale of
Snapple Beverage Group and Royal Crown and the related repayment or assumption
of certain debt actually been consummated on July 2, 2000 and January 4, 1999,
respectively, or of the future financial position or results of operations of
the Company.
<PAGE>
Triarc Companies, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Balance Sheet
July 2, 2000
<TABLE>
<CAPTION>
As Pro Forma
Reported Adjustments Pro Forma
-------- ----------- ---------
(In thousands)
ASSETS
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents....................................$ 153,294 $ 882,770 (a) $ 554,617
(467,619) (b)
(6,159) (d)
(2,160) (f)
(5,509) (i)
Short-term investments....................................... 94,552 -- 94,552
Receivables.................................................. 123,205 (113,588) (a) 9,617
Inventories.................................................. 85,011 (85,011) (a) --
Deferred income tax benefit.................................. 21,786 (12,703) (a) 9,083
Prepaid expenses and other current assets.................... 5,864 (4,867) (a) 997
----------- ---------- ----------
Total current assets..................................... 483,712 185,154 668,866
Investments..................................................... 14,256 -- 14,256
Properties...................................................... 69,341 (29,488) (a) 39,853
Unamortized costs in excess of net assets
of acquired companies........................................ 256,067 (236,882) (a) 19,185
Trademarks...................................................... 245,817 (239,722) (a) 6,095
Other intangible assets......................................... 33,327 (33,040) (a) 287
Deferred costs and other assets................................. 47,942 (7,217) (a) 11,359
(655) (f)
(28,711) (i)
----------- ---------- ----------
$ 1,150,462 $ (390,561) $ 759,901
=========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt............................$ 42,551 $ (1,737) (a) $ 2,973
(37,841) (b)
Accounts payable............................................. 75,942 (54,722) (a) 3,320
(17,900) (j)
Accrued expenses............................................. 128,406 (69,866) (a) 288,352
(9,329) (b)
251,792 (h)
(12,651) (i)
----------- ---------- ----------
Total current liabilities.............................. 246,899 47,746 294,645
Long-term debt.................................................. 855,912 (300,067) (a) 18,636
(116,760) (a)
(420,449) (b)
Intercompany payable (receivable)............................... -- (118,282) (a) --
100,382 (c)
17,900 (j)
Deferred income taxes........................................... 98,740 (61,669) (a) 56,895
19,824 (h)
Deferred income and other liabilities........................... 23,592 (2,667) (a) 16,284
1,476 (e)
(3,750) (a)
(2,367) (g)
Forward purchase obligation for common stock.................... 86,186 -- 86,186
Stockholders' equity (deficit):
Common stock................................................. 3,555 -- 3,555
Additional paid-in-capital................................... 204,336 -- 204,336
Retained earnings (accumulated deficit)...................... (83,370) 849,772 (a) 364,752
(100,382) (c)
(6,159) (d)
(1,476) (e)
(2,815) (f)
2,367 (g)
(271,616) (h)
(21,569) (i)
Treasury stock............................................... (198,735) -- (198,735)
Common stock to be acquired.................................. (86,186) -- (86,186)
Accumulated other comprehensive deficit...................... (467) -- (467)
----------- ---------- ----------
Total stockholders' equity (deficit)................... (160,867) 448,122 287,255
----------- ---------- ----------
$ 1,150,462 $ (390,561) $ 759,901
=========== ========== ==========
</TABLE>
(a) To reflect the Snapple Beverage Sale for estimated net proceeds
aggregating $1,311,362,000, net of estimated related expenses of
$15,000,000. Such net proceeds consist of (i) the assumption by the
Purchaser of certain debt consisting of (a) $300,000,000 of 10 1/4%
senior subordinated notes due 2009 (the "Senior Notes") co-issued by
Triarc Consumer Products Group, LLC ("TCPG"), the parent company of
Snapple Beverage Group and Royal Crown, and Snapple Beverage Group and
accrued interest thereon of $11,832,000 as of July 2, 2000 and (b)
Triarc's zero coupon convertible subordinated debentures due 2018 (the
"Debentures") of $116,760,000, net of unamortized original issue
discount of $243,240,000, as of July 2, 2000 and (ii) cash, which as
of July 2, 2000, would have been $882,770,000. The $846,022,000 excess
of proceeds over the net assets and liabilities of Snapple Beverage
Group and Royal Crown represents a component of the gain on the
Snapple Beverage Sale. The estimated net proceeds are subject to
finalization of post-closing purchase price adjustment provisions of
the Snapple Beverage Sale contract. Estimated related expenses are
subject to finalization of costs and expenses incurred in connection
with the Snapple Beverage Sale for investment banking advisory
services, legal and accounting services and other costs and expenses
of the transaction as well as transaction related incremental
compensation costs and expenses.
(b) To reflect the payment of outstanding borrowings and accrued interest
thereon aggregating $467,619,000 under a senior bank credit facility
(the "Beverage Credit Facility") maintained by Snapple, Mistic,
Stewart's, Royal Crown and RC/Arby's Corporation ("RC/Arby's"), the
parent company of Royal Crown and Arby's, Inc. and a subsidiary of
Triarc, repaid in connection with the Snapple Beverage Sale. Such
obligations as of July 2, 2000 consisted of $438,290,000 of
outstanding term loans, of which $17,841,000 were classified as
current and $420,449,000 were classified as non-current, $20,000,000
of outstanding borrowings under a revolving credit facility, all of
which were classified as current, and $9,329,000 of accrued interest
thereon.
(c) To reflect non-cash capital contributions to Snapple Beverage Group
and Royal Crown, net of a non-cash dividend from Royal Crown,
amounting to $100,382,000 made in connection with the Snapple Beverage
Sale which increased the investment in Snapple Beverage Group and
Royal Crown and thus reduced the pre-tax gain from the Snapple
Beverage Sale. Such capital contributions and dividend related to
intercompany balances with Snapple Beverage Group and Royal Crown.
(d) To reflect a $6,159,000 cash payment made in connection with the
Snapple Beverage Sale to certain holders of Triarc stock options as a
reduction of the pre-tax gain from the Snapple Beverage Sale. Such
payment was to employees of Snapple Beverage Group and Royal Crown who
were holders of an aggregate of 912,169 Triarc stock options and who
chose to give up their Triarc stock options in connection with the
Snapple Beverage Sale in consideration for the payment of an amount
per option equal to the excess of the closing price of Triarc's common
stock on October 20, 2000 over the respective exercise prices of the
underlying options.
(e) To reflect Triarc's obligation to issue its common shares issuable
upon any conversion of the Debentures which were assumed by the
Purchaser as part of the Snapple Beverage Sale as a reduction of the
pre-tax gain from the Snapple Beverage Sale. Such obligation will be
accounted for as a written call option (the "Written Call Option").
This adjustment reflects the $1,476,000 estimated fair value of the
Written Call Option as determined by independent third party
consultants utilizing the Black-Scholes option pricing model. Should
Triarc be required to issue any such common shares upon any
conversion, Triarc would receive compensation equal to the accreted
value of each of the Debentures converted as of that date.
(f) To reflect the cost associated with certain transactions which will no
longer be consummated as a result of the Snapple Beverage Sale,
principally a planned initial public offering of Snapple Beverage
Group common stock as a reduction of the pre-tax gain from the Snapple
Beverage Sale. Such amounts include the write-off of $655,000 of
deferred costs as of July 2, 2000 and estimated additional unpaid
costs as of July 2, 2000 of $2,160,000.
(g) To reflect the reversal of previously accrued liabilities at Triarc no
longer required as a result of the Snapple Beverage Sale as an
increase to the pre-tax gain from the Snapple Beverage Sale.
(h) To reflect a provision for income taxes of $271,616,000 on the
estimated $741,307,000 net pre-tax gain determined as of July 2, 2000
resulting from the Snapple Beverage Sale resulting from the
adjustments above. Such provision consists of (i) a current income tax
liability of $251,792,000 resulting from the pre-tax gain for income
tax purposes on the Snapple Beverage Sale as of July 2, 2000 and (ii)
the utilization of $19,824,000 of non-current deferred income tax
assets included as a component of "Deferred income taxes." The tax
provision does not reflect an election to treat the transaction as an
asset sale in lieu of a stock sale under section 338(h)(10) of the
Internal Revenue Code or any payment by the Purchaser with respect
thereto. The determination of such gain based on account balances as
of July 2, 2000, is preliminary, is subject to changes in the balances
of the investments in Snapple Beverage Group and Royal Crown between
July 2, 2000 and the October 25, 2000 sale date and is subject to
finalization of post-closing purchase price adjustment provisions of
the Snapple Beverage Sale contract, finalization of estimated related
expenses incurred in connection with the Snapple Beverage Sale as
discussed in (a) above, and, as such, such gain is not necessarily
indicative of the gain that will actually be recognized for the
Snapple Beverage Sale.
(i) To reflect an extraordinary charge of $21,569,000 determined as of
July 2, 2000 for the early assumption or extinguishment, as
applicable, of the Senior Notes (see (a) above), the Debentures (see
(a) above) and the obligations under the Beverage Credit Facility (see
(b) above). Such charges consisted of (i) the write-off of previously
unamortized deferred financing costs of $28,711,000 and (ii) the
payment of prepayment penalties of $5,509,000, net of income tax
benefit of $12,651,000.
(j) To reverse current liabilities related to raw materials purchased from
third party vendors by Triarc on behalf of Snapple Beverage Group and
Royal Crown and Triarc's corresponding intercompany receivable since
such liabilities were assumed by Snapple Beverage Group and Royal
Crown upon the Snapple Beverage Sale.
<PAGE>
Triarc Companies, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Year Ended January 2, 2000
<TABLE>
<CAPTION>
As Pro Forma
Reported Adjustments Pro Forma
-------- ----------- ---------
(In thousands, except per share amounts)
<S> <C> <C> <C>
Revenues:
Net sales............................................$ 770,943 $ (770,943) (a) $ --
Royalties, franchise fees and other revenues......... 83,029 (1,243) (a) 81,786
------------- ------------- -----------
853,972 (772,186) 81,786
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Costs and expenses:
Costs of sales, excluding depreciation and
amortization related to sales...................... 407,708 (407,708) (a) --
Advertising, selling and distribution................ 201,451 (200,990) (a) 461
General and administrative........................... 121,779 (60,194) (a) 61,585
Depreciation and amortization, excluding
amortization of deferred financing costs........... 35,315 (29,892) (a) 5,423
Capital structure reorganization related charges..... 5,474 (3,348) (a) 2,126
Credit related to post-acquisition transition,
integration and changes to business strategies..... (549) 549 (a) --
Facilities relocation and corporate restructuring
credits............................................ (461) 158 (a) (303)
------------- ------------- -----------
770,717 (701,425) 69,292
------------- ------------- -----------
Operating profit................................... 83,255 (70,761) 12,494
Interest expense........................................ (84,257) 55,168 (a) (6,260)
7,102 (b)
15,727 (c)
Investment income, net.................................. 18,468 (1,564) (a) 16,904
Gain on sale of businesses, net......................... 655 533 (a) 1,188
Other income, net....................................... 3,559 (1,276) (a) 2,283
------------- -------------- -----------
Income from continuing operations before
income taxes..................................... 21,680 4,929 26,609
Provision for income taxes.............................. (12,945) 13,173 (a) (7,834)
(8,062) (d)
------------- ------------- -----------
Income from continuing operations..................$ 8,735 $ 10,040 $ 18,775
============= ============= ===========
Income from continuing operations per share:
Basic..............................................$ .34 (e) $ .72 (e)
============ ===========
Diluted............................................$ .32 (e) $ .70 (e)
============ ===========
</TABLE>
<PAGE>
Triarc Companies, Inc. and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Six Months Ended July 2, 2000
<TABLE>
<CAPTION>
As Pro Forma
Reported Adjustments Pro Forma
-------- ----------- ---------
(In thousands, except per share amounts)
<S> <C> <C> <C>
Revenues:
Net sales...............................................$ 414,867 $ (414,867) (a) $ --
Royalties, franchise fees and other revenues............ 41,320 (642) (a) 40,678
------------ ------------ ----------
456,187 (415,509) 40,678
------------ ------------ ----------
Costs and expenses:
Cost of sales, excluding depreciation and
amortization related to sales......................... 217,567 (217,567) (a) --
Advertising, selling and distribution................... 114,618 (114,443) (a) 175
General and administrative.............................. 64,447 (32,270) (a) 32,177
Depreciation and amortization, excluding
amortization of deferred financing costs.............. 18,465 (15,751) (a) 2,714
Capital structure reorganization related charges........ 649 (408) (a) 241
------------ ------------ ----------
415,746 (380,439) 35,307
------------ ------------ ----------
Operating profit...................................... 40,441 (35,070) 5,371
Interest expense........................................... (46,618) 29,439 (a) (1,243)
3,729 (b)
12,207 (c)
Investment income, net..................................... 21,488 (416) (a) 21,072
Other income, net.......................................... 934 (699) (a) 235
------------ ------------ ----------
Income from continuing operations before
income taxes........................................ 16,245 9,190 25,435
Provision for income taxes................................. (8,935) 4,037 (a) (10,513)
(5,615) (d)
------------ ------------ ----------
Income from continuing operations.....................$ 7,310 $ 7,612 $ 14,922
============ ============ ==========
Income from continuing operations per share:
Basic.................................................$ .31 (e) $ .62 (e)
=========== ==========
Diluted...............................................$ .29 (e) $ .59 (e)
=========== ==========
</TABLE>
<PAGE>
(a) To eliminate the results of operations of the premium beverage
business and the soft drink concentrate business aggregating
$4,727,000 and $2,709,000 for the year ended January 2, 2000 and the
six months ended July 2, 2000, respectively, since it is assumed the
Snapple Beverage Sale occurred on January 4, 1999.
(b) To eliminate interest expense, consisting of amortization of original
issue discount and deferred financing costs, accounted for by Triarc
on the Debentures which are being assumed by the Purchaser since it is
assumed the Debentures were assumed on January 4, 1999.
(c) To eliminate interest expense, including amortization of deferred
financing costs, accounted for by TCPG on the Senior Notes which are
being assumed by the Purchaser since it is assumed the Senior Notes
were assumed on January 4, 1999. Such elimination of interest expense
on the Senior Notes has been reduced by intercompany interest expense
on related intercompany debt to TCPG aggregating $11,002,000 and
$3,915,000 for the year ended January 2, 2000 and the six months ended
July 2, 2000, respectively. For the year ended January 2, 2000 such
elimination of interest expense has also been reduced by $1,350,000 of
interest expense on the Senior Notes which was allocated to the
restaurant franchising business in the historical financial statements
of the restaurant franchising business.
(d) To eliminate the income tax benefit related to adjustments in (b) and
(c) above, as applicable, at the incremental weighted average Federal
and State income tax rates of 35.3% and 35.2% for the year ended
January 2, 2000 and the six months ended July 2, 2000, respectively,
based on the entities to which the adjustments related.
(e) As reported and pro forma basic and diluted income from continuing
operations per share has been computed by dividing the as reported and
pro forma income from continuing operations by the shares as follows
(in thousands):
Six Months
Year Ended Ended
January 2, July 2,
2000 2000
---- ----
Basic:
Weighted average common shares
outstanding............................ 26,015 23,880
====== ======
Diluted:
Common shares for basic income
per share.............................. 26,015 23,880
Additional common shares from
(1) the effect of dilutive stock
options computed using the
treasury stock method and........... 818 873
(2) the effect of a dilutive forward
purchase obligation for common
stock............................... 110 363
-------- -------
26,943 25,116
======== =======
The Written Call Option for common stock recorded in connection with
the Snapple Beverage Sale was not used in the calculation of diluted
income per share since the inclusion of such shares would have had an
antidilutive effect.
<PAGE>
Note: Income from continuing operations excludes $469,691,000 of estimated
gain on the Snapple Beverage Sale, net of income taxes and a $21,569,000
extraordinary charge for the early extinguishment of debt, net of taxes
determined as of July 2, 2000. Such amounts, as determined as of the
October 25, 2000 sales date, will be recognized during the Company's
fiscal quarter ended December 31, 2000 as income from discontinued
operations.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRIARC COMPANIES, INC.
Date: November 9, 2000 By: /s/ Fred H. Schaefer
---------------------
Fred H. Schaefer
Vice President and
Chief Accounting Officer
