<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM NOVEMBER 1, 1999 TO DECEMBER 31, 1999
Commission file number 0-23496
KFC National Purchasing Cooperative, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 61-0946155
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
950 BRECKENRIDGE LANE, LOUISVILLE, KY 40207
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(address of principal executive offices) (zip code)
Registrant's telephone number, including area code (502) 896-5900
------------------------------
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ].
Number of shares of common stock outstanding as of January 31, 2000
---------------------------
Membership Common Stock 571
Store Common Stock 5541
<PAGE> 2
INDEX
PART 1 - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE (s)
--------
<S> <C>
Item 1 Financial Statements
Condensed Consolidated Statements of Income
For the two months ended December 31,1999 and 1998 3
Condensed Consolidated Balance Sheets
December 31, 1999 and December 31, 1998 4
Condensed Consolidated Statements of Cash Flows
For the two months ended December 31, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6-7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-11
PART II - OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
- ---------------------------------------
Item 1. Financial Statements
KFC NATIONAL PURCHASING COOPERATIVE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
For the two months ended December 31, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
Net sales $ 1,556,001 $ 123,605,681
Cost of goods sold 1,432,162 120,558,830
------------- -------------
Gross profit 123,839 3,046,851
Share in earnings of UFPC 759,769 --
Selling, general and administrative expenses 64,354 2,222,825
Provision for losses on receivables (50,000) 28,595
Other income (expenses):
Service charges -- 63,821
Interest income 53,219 4,580
Interest expense (998) (91,068)
Other 8,908 22,724
------------- -------------
61,129 57
------------- -------------
Income before patronage
dividend and income taxes 930,383 795,488
Patronage dividend 728,893 631,502
------------- -------------
Income before income taxes 201,490 163,986
Provision for income taxes 80,288 57,467
------------- -------------
Net income $ 121,202 $ 106,519
============= =============
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
3
<PAGE> 4
KFC NATIONAL PURCHASING COOPERATIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
------
1999 1998
------------ ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 9,623,071 $ 919,856
Accounts and note receivable, less allowance for
losses of $676,141 in 1999 and $1,421,849 in 1998 633,161 52,897,459
Inventories -- 7,823,886
Prepaid expenses -- 105,361
Deferred income taxes 532,691 569,742
Note receivable from related party 50,000 50,000
------------ ------------
Total Current Assets 10,838,923 62,366,304
------------ ------------
Note receivable from UFPC 8,263,865 --
Investment in UFPC 3,767,462 --
Office equipment, at cost, less accumulated depreciation
of $3,275,314 in 1998 -- 818,682
Notes receivable from related party, excluding current portion 577,948 656,044
Deferred income taxes 9,603 263,252
Other assets 139,575 194,467
------------ ------------
Total Assets $ 23,597,376 $ 64,298,749
============ ============
LIABILITIES AND MEMBERS' EQUITY
-------------------------------
Current Liabilities:
Short-term borrowings $ 1,000 $ 9,235,814
Accounts payable 188,264 29,672,742
Accounts payable related party 23,946 --
Accrued expenses 825,683 3,806,387
Premium deposits -- 328,807
Patronage dividend payable 4,841,901 3,250,329
------------ ------------
Total Current Liabilities 5,880,794 46,294,079
------------ ------------
Commitments and Contingencies
Members' Equity:
Membership common stock 5,780 7,030
Store common stock 1,479,924 1,979,338
Accumulated other comprehensive income (68,255) (24,214)
Retained earnings 16,299,133 16,042,516
------------ ------------
17,716,582 18,004,670
------------ ------------
Total Liabilities and Members' Equity $ 23,597,376 $ 64,298,749
============ ============
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
4
<PAGE> 5
KFC NATIONAL PURCHASING COOPERATIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWO MONTHS ENDED DECEMBER 31, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 121,202 $ 52,261
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Depreciation and amortization -- 52,500
Provision from losses on receivables (50,000) 28,595
Undistributed share of earnings in UFPC (422,615) --
Deferred income taxes (39,288) 27,727
Changes in operating assets and liabilities:
Accounts receivable 621,626 (1,821,533)
Inventories -- (755,398)
Prepaid expenses -- 112,324
Other assets (4,594) 67,929
Accounts payable (677,218) (3,881,482)
Accrued expenses (2,678) 310,340
Accounts payable to related party (125,766) --
Patronage dividend payable 728,893 631,415
----------- -----------
Net cash provided by (used in) operating activities 149,562 (5,175,322)
----------- -----------
Cash Flows from Investing Activities:
Note receivable from UFPC 3,885,677 --
----------- -----------
Net cash provided by investing activities 3,885,677 --
----------- -----------
Cash Flows from Financing Activities:
Short term borrowings -- 5,791,512
Increase in note payable to related party 23,946 --
Proceeds from sale of stock, net of costs 4,000 50,200
Retirement of stock (28,860) (21,610)
----------- -----------
Net cash (used in) provided by financing activities (914) 5,820,102
----------- -----------
Effect of exchange rate changes on cash and cash equivalents -- 3,223
----------- -----------
Net increase in cash and cash equivalents 4,034,325 648,003
Cash and cash equivalents - beginning of period 5,588,746 271,853
----------- -----------
Cash and cash equivalents - end of period $ 9,623,071 $ 919,856
=========== ===========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
5
<PAGE> 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-----------------------------------------------
1. BASIS OF PRESENTATION
The accompanying financial statements are presented in accordance with the
requirements of Form 10-Q and consequently do not include all of the disclosures
normally required by generally accepted accounting principles or those normally
made in the registrant's annual Form 10-K filing. Accordingly, the reader of
this Form 10-Q may wish to refer to the Registrant's Form 10-K for the year
ended October 31, 1999, for further information in this regard.
The accompanying financial statements for comparative purposes have been made to
conform to the format of the Registrant's Form 10-K for the year ended October
31, 1999, and have been prepared in accordance with the Registrant's customary
accounting practices and have not been audited. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary for
fair presentation of this information have been made.
The adoption of a change in accounting year to a calendar year end has resulted
in the filing of this report for the two months ended December 31, 1999 and
1998.
2. COMPREHENSIVE INCOME
The difference between net income and comprehensive income is not significant.
3. CONTINGENCIES
In April 1996, the KFC Co-op entered into a finance program for stockholder
members cosponsored by the National Cooperative Bank. The program initially
provided up to $20,000,000 in loans to KFC Co-op members which range from
$110,000 to an individual maximum of $2,000,000. The KFC Co-op has guaranteed
from 10% to 25% of the declining balance based on each loan's classification.
The National Cooperative Bank has agreed to maintain a reserve account which
will be applied to losses prior to the KFC Co-op incurring any loss. The reserve
account is funded pursuant to the program agreements. The National Cooperative
Bank's commitment to provide such loans terminated in June 1997. As of December
31, 1999, the National Cooperative Bank has funded approximately $8.4 million of
credit risk associated with their guarantees through credit and monitoring
procedures associated with their approval and periodic payments and reporting
from the primary lender, the National Cooperative Bank. Currently, no losses are
expected by the KFC Co-op under this program.
4. AMERISERVE FOOD DISTRIBUTION, INC.
On January 31, 2000, AmeriServe Food Distribution, Inc. ("AmeriServe") filed in
Delaware for protection under Chapter 11 of the U.S. bankruptcy code. AmeriServe
is the primary U.S. food and dry goods distributor for Tricon. The bankruptcy
court in Delaware has approved financing commitments to AmeriServe from Tricon
and Burger King Corp. In addition, to provide its suppliers confidence to
continue shipping to KFC, Taco Bell and Pizza Hut restaurants, Tricon has told
its suppliers that it would be responsible for payment of goods approved by and
purchased by Tricon through AmeriServe for use at any Tricon owned, franchised
or licensed restaurant from January 31, 2000 until further notice by Tricon.
Tricon anticipates that AmeriServe will continue the administrative functions of
ordering and invoicing, in AmeriServe's name, of Tricon purchased goods. The
impact of AmeriServe's bankruptcy on the business of the KFC Co-op remains
uncertain. The KFC Co-op's share of earnings from UFPC was reduced by
approximately $475,000 arising from the KFC Co-op's portion of UFPC's write-off
of receivables related to the bankruptcies of AmeriServe and one of its
subsidiaries.
6
<PAGE> 7
5 INVESTMENT IN UNIFIED FOODSERVICE PURCHASING CO-OP, LLC (UFPC)
Investment in Unified Foodservice Purchasing Co-op, LLC (UFPC) UFPC is
owned by its members, consisting of the KFC Co-op, Taco Bell Co-op, and
Pizza Hut Co-op. The Cooperative accounts for its investment in UFPC based
on the Cooperative's share of earnings net of distributions of UFPC in
accordance with the Purchasing Program Management Agreement. Earnings of
UFPC are divided between the Concept Co-ops primarily on the basis of
patronage. During the two months ended December 31, 1999 the KFC Co-op
received cash distributions from UFPC of $337,156. Summarized financial
information of UFPC as of and for the two months ended December 31, 1999 is
as follows:
<TABLE>
<CAPTION>
Two Months ended 12/31/99 KFC Co-op Taco Bell Co-op Pizza Hut Co-op Kenco Total UFPC
------------------------- --------- --------------- --------------- ----- ----------
<S> <C> <C> <C> <C> <C>
Sales $58,707,244 $21,134,861 $4,637,195 $135,539 $84,614,839
Sourcing Fee 1,157,884 3,279,351 1,826,944 -- 6,266,179
Gross profit 2,698,251 3,855,713 1,912,053 135,539 8,601,556
Net income 759,769 2,004,946 803,635 4,735 3,573,085
Current assets $52,185,448
Non-current assets 1,437,864
Current liabilities 31,943,000
Non-current liabilities 8,597,034
Members' Equity 13,083,278
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
The KFC Co-op is a purchasing cooperative which focuses on the purchase of the
food, packaging, supplies, equipment and related services used by owners and
operators of KFC restaurants, including Tricon Global Restaurants, Inc.
("Tricon"). Along with cooperatives representing owners and operators of Taco
Bell and Pizza Hut restaurants, we are a member of the Unified Foodservice
Purchasing Co-op, LLC, ("UFPC") which administers our purchasing program.
Tricon, together with its subsidiaries, is the franchisor and licensor of the
KFC, Taco Bell and Pizza Hut concepts, the developer of products used and sold
by the Tricon concepts, and an operator of many KFC, Taco Bell and Pizza Hut
retail outlets.
The following discussion and analysis of financial condition and results of
operations should be read in conjunction with management's discussion and
analysis of financial condition and results of operations in the KFC Co-op's
October 31, 1999, Form 10-K. The results of operations for the two months ended
December 31, 1999, are not necessarily indicative of the operating results for
the entire year.
RESULTS OF OPERATIONS
TWO MONTHS OF FISCAL 1999 COMPARED TO THE TWO MONTHS OF FISCAL 1998.
The adoption of a change in accounting year to a calendar year end has resulted
in the filing of this report for the two months ended December 31, 1999 and
1998. The KFC Co-op's Corporate Reorganization has materially affected the
presentation of its results of operations. As a result of the Corporate
Reorganization, the KFC Co-op's primary source of revenues effective March 1,
1999 has been earnings pursuant to the KFC Co-op's Purchasing Program Management
Agreement with UFPC. Because net sales previously recorded by the KFC Co-op
became net sales of UFPC effective March 1, 1999, the KFC Co-op's net sales for
the two months ended December 31, 1999, decreased significantly from the same
period ended December 31, 1998. Net sales for the KFC Co-op for the period
ending December 31,1999 are attributable to sales from its international
subsidiary. Set forth below is comparative information concerning net sales of
the KFC Co-op and UFPC for the relevant periods.
<TABLE>
<CAPTION>
SALES ($000)
--------------------------------------------------------------
Two Months Ended 12/31/99 Two Months Ended 12/31/98
------------------------- -------------------------
<S> <C> <C>
KFC Co-op $ 1,556 $123,606
UFPC 84,615 N/A
--------- --------
$ 86,171 $123,606
========= ========
</TABLE>
Aggregate sales of the KFC Co-op and UFPC decreased by $37,435,000 or 30.3% for
the two months ended December 31, 1999 compared to the same period in 1998. Food
and packaging sales decreased by approximately $42,688,000. Sales for
KFC-Canada, Dairy Queen, Long John Silvers and Fazoli's decreased by $16,975,000
resulting from the termination of those programs at the time of the formation of
UFPC and the focus solely on the three Tricon brands (KFC, Taco Bell and Pizza
Hut). KFC-U.S., Taco Bell and Pizza Hut food and packaging sales decreased by
$11,080,000, $8,784,000 and $5,849,000 respectively for the two months ended
December 31, 1999, compared to the same two month period in 1998. These
reductions are
8
<PAGE> 9
indicative of the movement to "non-title" for certain distributors for all three
brands. Aggregate equipment sales for the two months of 1999 increased
$5,253,000 over 1998. KFC-U.S and Pizza Hut equipment sales increased by
$4,209,000 and $243,000, respectively. Taco Bell equipment sales decreased
approximately $31,000 when compared to the same two months in 1998.
International equipment sales for the two months increased by $867,000. These
increases were mitigated by the decrease in volumes of approximately $35,000 as
a result of the termination of purchasing programs related to the non-Tricon
brands, similar to food and packaging, as discussed previously.
On January 31, 2000, AmeriServe Food Distribution, Inc. ("AmeriServe") filed in
Delaware for protection under Chapter 11 of the U.S. bankruptcy code. AmeriServe
is the primary U.S. food and dry goods distributor for Tricon. The bankruptcy
court in Delaware has approved financing commitments to AmeriServe from Tricon
and Burger King Corp. In addition, to provide its suppliers confidence to
continue shipping to KFC, Taco Bell and Pizza Hut restaurants, Tricon has told
its suppliers that it would be responsible for payment of goods approved by and
purchased by Tricon through AmeriServe for use at any Tricon owned, franchised
or licensed restaurant from January 31, 2000 until further notice by Tricon.
Tricon anticipates that AmeriServe will continue the administrative functions of
ordering and invoicing, in AmeriServe's name, of Tricon purchased goods. The
impact of AmeriServe's bankruptcy on the business of the KFC Co-op remains
uncertain.
Starting on March 1, 1999, for the period ended December 31, 1999 and future
calendar quarters, the KFC Co-op will generally recognize its portion of the
income (loss) generated through UFPC in accordance with the Purchasing Program
Management Agreement. Included in the income statement for the two months ending
December 31, 1999, is $759,769 which represents the KFC Co-op's share of the
profit generated from UFPC. The KFC Co-op's share of earnings from UFPC was
reduced by approximately $475,000 arising from the KFC Co-op's portion of UFPC's
write-off of receivables related to the bankruptcies of AmeriServe and one of
its subsidiaries. In accordance with the operating agreement of UFPC, the
operations of the three ConceptCo-ops were assigned to UFPC and the synergies in
purchasing, in addition to the sharing of expenses, are expected to result in an
overall savings to the three brands. Future quarters for the KFC Co-op will
primarily reflect its share of earnings from UFPC. For the two months ended
December 31, 1999, Taco Bell Co-op's and Pizza Hut Co-op's equity in earnings of
UFPC were $2,004,946 and $803,635, respectively.
A comparison of selling, general and administrative expenses for the periods
ended December 31, 1999 and 1998 reflects a significant decrease. On March 1,
1999, with the formation of UFPC, the employees of the KFC Co-op and Tricon's
Supply Chain Management became employees of UFPC. UFPC now provides purchasing
services for the KFC Co-op through the Purchasing Program Management Agreement.
As part of the formation of UFPC, Kenco Insurance Agency, (Kenco) a subsidiary
of the KFC Co-op, was transferred to UFPC. Before the transfer, Kenco paid a
dividend to the KFC Co-op in the amount of $902,669, representing earnings
before March 1, 1999, the effective transfer date. Kenco's earnings in the two
month period of 1998 were $27,013.
Income before patronage dividend and income taxes for the two months increased
by $134,895 or 17% which is attributable to the higher sales volumes for
KFC-U.S., as a result of the participation of all KFC restaurants, franchisees
and corporate members in UFPC's program. Prior to March 1, 1999, the stores
owned by Tricon, the franchisor of KFC restaurants had not participated
significantly in the purchase of goods and equipment from the KFC Co-op since
approximately the early 1990's.
Management believes the current provision for losses on uncollectible accounts
to be adequate.
9
<PAGE> 10
The provision for patronage dividend for 1999 has been calculated and accrued on
a formula approved by the Board of Directors. For the two months of 1999, the
provision was $728,893 an increase of $97,391 over the same period last year.
The increase is primarily associated with the income from UFPC based on the
allocation to the KFC Co-op.
FINANCIAL CONDITION AT DECEMBER 31, 1999 COMPARED TO FINANCIAL CONDITION AT
DECEMBER 31, 1998.
Net working capital at December 31, 1999 was $11,140,096, a decrease of
$11,064,096 since December 31, 1998. Cash and cash equivalents increased by
$8,703,215. Accounts payable, short term borrowings, accrued expenses, and
premium deposits decreased by $29,484,478, $9,234,814, $2,980,704, and $328,807,
respectively. These working capital items were offset by decreases in accounts
receivable, inventories, prepaid expense, and deferred income taxes of
$52,264,298, $7,823,886, $105,361, and $37,051, respectively. Patronage dividend
payable increased by $1,591,572.
The balance sheet is indicative of the transactions associated with the
formation of UFPC. The KFC Co-op, on March 1, 1999, contributed certain assets,
primarily office equipment, to UFPC as part of the capital contribution. In
addition, as of December 31, 1999 the KFC Co-op had invested $2,000,000 in UFPC.
The other two members also contributed capital of equal amounts which provided
UFPC capital in the amount of $6,000,000 to fund its operations and start up.
Based on the formulas to determine working capital requirements by concept (KFC,
Taco Bell, and Pizza Hut) each member of UFPC is required to provide
individually their funds. Each concept co-op has its own line of credit and
borrows or funds out of its own working capital the needs required to support
its own programs with UFPC. As of December 31, 1999, KFC Co-op had provided UFPC
with $8,263,849 in working capital loans in addition to its capital
contribution.
Since UFPC provides the operational support for the concept co-ops, the balance
sheet of the KFC Co-op has substantially changed. After March 1, 1999
receivables and inventory are assets of UFPC, so the KFC Co-op is winding down
the collection of its receivables and has transferred substantially all
inventories to UFPC. Once this is accomplished the balance sheet of the KFC
Co-op will primarily consist of cash, investments in and loans to UFPC, and
members' equity.
Beginning in August, 1999, various distribution centers, which currently place
their orders directly with UFPC and generate sales dollars, began transitioning
to a "non-title" status in which they purchase directly from suppliers under
terms arranged by UFPC. The KFC business for Tricon-owned restaurants is
currently non-title business. The collection of the sourcing fee will be the
revenue recognized from non-title distributors in the future. Sales volumes for
succeeding years will be affected by this transition. The sourcing fee collected
has replaced a portion of the current margin structure and principally provided
the funds to fund the operations of UFPC.
YEAR 2000
The KFC Co-op and UFPC have not incurred any interruption or unexpected business
problems in their normal business activities or operations associated with the
roll over to the year 2000, at this time. At the time of this filing the KFC
Co-op and UFPC had not experienced any disruption in operations with its
customers or third-party suppliers. However, UFPC is continuing to develop
contingency plans as part of its compliance management to further mitigate risk.
10
<PAGE> 11
SAFE-HARBOR
This report contains forward-looking statements under the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties. Although the
KFC Co-op believes that the forward-looking statements are based upon reasonable
assumptions, there can be no assurance that the forward-looking statements will
prove to be accurate. Factors that could cause actual results to differ from the
results anticipated in the forward-looking statements include, but are not
limited to: economic conditions (both generally and more specifically in the
markets in which the KFC Co-op and its customers operate); competition for the
KFC Co-op's customers from other distributors; material unforeseen changes in
the liquidity, results of operations, or financial condition of the KFC Co-op's
customers and UFPC's suppliers and distributors; material unforeseen
complications related to addressing the Year 2000 Problem experienced by the KFC
Co-op, its suppliers, customers and governmental agencies; and other risks
detailed in the KFC Co-op's filings with the Securities and Exchange Commission,
all of which are difficult to predict and any of which are beyond the control of
the KFC Co-op. The KFC Co-op undertakes no obligation to republish
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
TRADEMARKS
"Fazoli's," "Long John Silver's," "Dairy Queen," "Pizza Hut," "Taco Bell," and
"KFC," are registered trademarks of Seed Restaurant Group Inc., Long John
Silver's Inc., American Dairy Queen Corporation, Pizza Hut Corporation, Taco
Bell Corporation and KFC Corporation, respectively, and are used in these
materials for identification purposes only. KFC National Purchasing Cooperative,
Inc. is not affiliated with the Seed Restaurant Group Inc., Long John Silver's
Inc., American Dairy Queen Corporation, Pizza Hut Corporation, Taco Bell
Corporation or KFC Corporation, except that KFC Corporation is a stockholder
member of the Registrant. Pizza Hut," "Taco Bell," and "KFC," are registered
trademarks of Pizza Hut Corporation, Taco Bell Corporation and KFC Corporation,
respectively, and are used in these materials for identification purposes only.
11
<PAGE> 12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - Exhibit 27.1 Financial Data Schedule (for SEC use only)
(b) Report on Form 8-K - During the two-month transition period ending
December 31,1999, the Registrant filed a Current Report on Form
8-K dated December 8, 1999 reporting an Item 8, change in fiscal
year end from October 31 to December 31. No financial statements
were filed with this Form 8-K.
12
<PAGE> 13
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<CAPTION>
<S> <C>
Date: February 14, 2000 KFC National Purchasing Cooperative, Inc.
-------------------------------
By: /s/ Daniel E. Woodside
--------------------------------------------
Daniel E. Woodside, President
Date: February 14, 2000 By: /s/ William L. Bickley
------------------------------ ---------------------------------------------
William L. Bickley,
Sr. Vice President/Chief Financial Officer
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> NOV-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 9,623,071
<SECURITIES> 0
<RECEIVABLES> 1,309,302
<ALLOWANCES> 676,141
<INVENTORY> 0
<CURRENT-ASSETS> 10,838,923
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 23,597,376
<CURRENT-LIABILITIES> 5,880,794
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 17,716,582
<TOTAL-LIABILITY-AND-EQUITY> 23,597,376
<SALES> 1,556,001
<TOTAL-REVENUES> 1,556,001
<CGS> 1,432,162
<TOTAL-COSTS> 1,432,162
<OTHER-EXPENSES> 64,354
<LOSS-PROVISION> (50,000)
<INTEREST-EXPENSE> 998
<INCOME-PRETAX> 201,490
<INCOME-TAX> 80,288
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 121,202
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
