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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 8, 1997
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TRAK AUTO CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-12202 52-1281465
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
3300 75th Avenue, Landover, Maryland 20785
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (301) 226-1200
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(Former name or former address, if changed since last report).
There are no exhibits to this Current Report on Form 8-K.
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Item 2. Acquisition or Disposition of Assets
On December 8, 1997, Trak Auto Corporation ("Trak"), a
majority owned subsidiary of Dart Group Corporation ("Dart"), and certain of
Trak's affiliates closed the transactions contemplated in the Purchase
Agreement (the "Purchase Agreement") with CSK Auto, Inc. ("CSK") pursuant to
which Trak had agreed to convey to CSK the assets (including Inventory, Store
Fixtures and assignment of store leases as described in the Purchase
Agreement)) relating to the business (the "Business") conducted by Trak
in its retail discount auto parts stores in the Los Angeles, California
metropolitan area (the "Transaction"). Trak Auto and CSK closed the
Transaction, subject to subsequent adjustment, for an aggregate purchase price
of approximately $33.6 million. Ninety percent (90%) of the aggregate purchase
price, or $30.2 million, was paid in cash at closing. The remaining ten percent
(10%) will be paid pending finalization of any purchase price adjustments and
audits. Trak retains all existing liabilities related to the assets and
Business. In connection with the Transaction, Trak recorded an estimated
pre-tax loss of approximately $10.5 million from the sale of its California
operations to CSK for both of the 13 and 39 week periods ended November 1, 1997.
Reference is made to the Purchase Agreement, a copy of which is
attached as an Exhibit to the Current Report on Form 8-K filed by Trak with the
Commission on October 22, 1997.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial statements
The following pro forma balance sheet as of November
1, 1997 and statements of operations for the 39 weeks ended November 1, 1997
and 52 weeks ended February 1, 1997 are provided, on a preliminary basis, to
present the effects of the transactions pursuant to which Trak sold its
California operations to CSK pursuant to the Purchase Agreement. These pro
forma financial statements should be read in conjunction with the historical
annual and quarterly financial statements of Trak previously filed on Forms
10-K and 10-Q and the other information contained in this Form 8-K.
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TRAK AUTO CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
39 Weeks Ended November 1, 1997
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ProForma
Historical Adjustments ProForma
---------- ----------- ---------
<S> <C> <C> <C>
Sales $ 257,800 $ (73,143) (a) $ 184,657
Interest and other income 773 375 (b) 1,148
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258,573 (72,768) 185,805
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Expenses:
Cost of sales, store
occupancy and
warehousing 198,068 (55,643) (a) 142,425
Selling and
administrative 53,361 (17,207) (a) 36,154
Provision for loss on sale
of California operations 10,493 (10,493) (c) -
Depreciation and
amortization 5,785 (721) (a) 5,064
Interest expense 2,791 - 2,791
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270,498 (84,064) 186,434
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Loss before income
taxes (11,925) 11,296 (629)
Income taxes(benefit) (3,824) (3,375) (d) (449)
--------- --------- ---------
Net Loss $ (8,101) $ 7,921 $ (180)
========= ========= =========
Net loss per share $ (1.37) $ 1.34 $ (.03)
Weighted average shares
outstanding 5,909 5,909 5,909
<CAPTION>
52 Weeks Ended February 1, 1997
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ProForma
Historical Adjustments ProForma
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<S> <C> <C> <C>
Sales $ 345,984 $(105,332) (a) $ 240,652
Interest and other income 1,586 500 (b) 2,086
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347,570 (104,832) 242,738
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Expenses:
Cost of sales, store
occupancy and
warehousing 262,472 (79,912) (a) 182,560
Selling and
administrative 72,452 (24,535) (a) 47,917
Depreciation and
amortization 7,495 (859) (a) 6,636
Interest expense 3,705 - 3,705
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346,124 (105,306) 240,818
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Income before income
taxes 1,446 474 1,920
Income taxes 362 157 (d) 519
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Net income $ 1,084 $ 317 $ 1,401
========= ========= =========
Net income per share $ .18 $ .06 $ .24
Weighted average shares
outstanding 5,942 5,942 5,942
</TABLE>
(a) Record reduction in sales and expenses related to California
operations.
(b) Record interest income on net proceeds.
(c) Reverse loss reserve recorded as a result of the transaction.
(d) Record income tax effect on above.
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TRAK AUTO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
As of November 1, 1997
ProForma
ASSETS Historical Adjustments ProForma
---------- ----------- ----------
<S> <C> <C> <C>
Current Assets:
Cash and short term instruments $ 17,354 $ 31,850 (a) $ 49,204
Marketable debt securities 690 690
Accounts receivable 7,778 7,778
Merchandise inventories 106,495 (30,300)(a) 76,195
Deferred income taxes 6,900 43 (b) 6,943
Other current assets 3,211 1,964 (a) 5,175
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Total Current Assets 142,428 3,557 145,985
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Property and Equipment, at cost:
Furniture, fixtures and equipment 64,667 (9,923)(a) 54,744
Leasehold improvements 11,791 (4,293)(a) 7,498
Property under capital leases 22,032 22,032
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98,490 (14,216) 84,274
Accumulated Depreciation and Amortization 55,097 (7,473)(a) 47,624
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43,393 (6,743) 36,650
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Other Assets 10,745 (4,484)(b) 6,261
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Total Assets $196,566 $ (7,670) $188,896
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 51,018 $ $ 51,018
Income taxes payable 1,557 (1,557)(b) -
Accrued expenses
Salaries and benefits 13,044 - 13,044
Taxes other than income 6,428 - 6,428
Other 21,279 (7,493)(a) 13,786
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Total Current Liabilities 93,326 (9,050) 84,276
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Long-term liabilities 27,919 - 27,919
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Total Liabilities 121,245 (9,050) 112,195
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Stockholders' Equity:
Common stock 64 64
Paid-in capital 46,481 46,481
Retained earnings 37,496 1,380 (a) 38,876
Treasury stock (8,720) - (8,720)
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Total Stockholders' Equity 75,321 1,380 76,701
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Total Liabilities and Stockholders'
Equity $196,566 (7,670) $188,896
======== ======== ========
</TABLE>
(a) To record sale proceeds of approximately $33.6 million less
transaction costs of approximately $1.8 million and reduce
value of assets sold as of November 1, 1997.
(b) Record income tax effect on transaction.
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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.
TRAK AUTO CORPORATION
By: David B. MacGlashan
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Name: David B. MacGlashan
Title: Chief Financial Officer and
Senior Vice President
Date: December 23, 1997
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