<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 18, 1999
PREMIUM RESTAURANT COMPANY
(Exact name of registrant as specified in its charter)
MINNESOTA 0-16348 41-1564262
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
5555 West 78th Street
Edina, MN 55439
(Address of principal executive offices and zip code)
(612) 941-0108
(Registrant's telephone number, including area code)
Not applicable
(Former name of former address, if changed since last report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 18, 1999, the Company sold its remaining full-service restaurant to the
Company's president for $400,000.
In July 1998, the Company closed one of its full-service restaurants; in
September 1998, the Company sold one of its full-service restaurants; and in
November 1998, the Company sold an additional full-service restaurant. The
restaurant that was closed in July 1998 is located in Madison, Wisconsin; the
restaurant sold in September 1998 is located in Eden Prairie, Minnesota; the
restaurant sold in November 1998 is located in Edina, Minnesota; and the
restaurant sold in March 1999 is located in St. Paul, Minnesota.
The historical consolidated financial statements reflect the completed
transactions for the closure of the restaurant in July 1998, the sale of the
restaurant sold in September 1998 and the sale of the restaurant in November
1998. The unaudited pro forma condensed consolidated financial statements
reflect the completed transaction for the sale of the restaurant sold in March
1999. On a pro forma basis, the sale of the restaurant sold in March 1999
generated cash proceeds of $400,000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Not applicable
(b) PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial statements
are filed with this report:
<TABLE>
<S> <C>
Pro Forma Condensed Consolidated Balance Sheet as at December 27, 1998.............. Page F-1
Pro Forma Condensed Consolidated Statements of Operations:
Fifty-two weeks ended June 28, 1998.............................................. Page F-2
Twenty-six weeks ended December 27, 1998......................................... Page F-3
</TABLE>
The unaudited pro forma condensed consolidated financial statements set forth,
for the periods and at the dates indicated, summarized unaudited pro forma
condensed consolidated financial information for Premium Restaurant Company.
This information is derived from the historical consolidated financial
statements and notes thereto and reflects (a) the condensed consolidated balance
sheet as of December 27, 1998 as if the sale had occurred on December 27, 1998,
(b) the condensed consolidated results of operations for the fifty-two weeks
ended June 28, 1998 as if the sale had occurred on June 29, 1997 and (c) the
condensed consolidated results of operations for the twenty-six weeks ended
December 27, 1998 as if the sale had occurred on June 28, 1998.
The pro forma condensed consolidated financial statements reflect the
recognition of the estimated effect of the closure of the full-service
restaurant in July 1998, the sale of the full-service restaurant sold in
September 1998, the sale of the full-service restaurant sold in November 1998,
and the sale of the last full-service restaurant in March 1999. The net gain on
the sale of certain assets related to these restaurants is not reflected in the
unaudited pro forma condensed consolidated statement of operations for the
twenty-six weeks ended December 27, 1998 and for the fifty-two weeks ended June
28, 1998. In addition, in accordance with the rules and regulations of the
Securities and Exchange Commission, interest income on the cash
<PAGE>
proceeds from the sale of the full-service restaurants has not been reflected in
the unaudited pro forma condensed consolidated statement of operations for the
twenty-six weeks ended December 27, 1998 and for the fifty-two weeks ended June
28, 1998.
Assumptions underlying the pro forma adjustments are described in the
accompanying notes which should be read in conjunction with the unaudited pro
forma condensed consolidated financial statements. These financial statements
should also be read in conjunction with the historical financial statements of
Premium Restaurant Company and notes thereto. Actual adjustments may differ from
the pro forma adjustments presented herein. The pro forma financial statements
do not purport to be indicative of the actual results of operations which would
have occurred had the four full-service restaurants been closed or sold as of
June 28, 1998 or as of June 29, 1997 or the future results of operations which
may be obtained.
(c) EXHIBITS. Not applicable
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
PREMIUM RESTAURANT COMPANY
Date: April 1, 1999 /s/Phillip R. Danford
---------------------
Phillip R. Danford
President
/s/Scott P. McGuire
---------------------
Scott P. McGuire
Vice President of Finance
<PAGE>
PREMIUM RESTAURANT COMPANY AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
DECEMBER 27, 1998
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------
Sale of One
ASSETS Full-Service
Historical Restaurant (a) Other (b) Pro Forma
------------- -------------------- ------------ -------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash $ 472,378 $ - $ 400,000 $ 872,378
Receivables 22,415 - - 22,415
Current portion of notes receivable 37,936 - - 37,936
Inventories 47,267 16,606 - 30,661
Prepaid expenses and other current assets 182,407 11,815 - 170,592
------------ ---------- --------- -----------
Total current assets 762,403 28,421 400,000 1,133,982
PROPERTY AND EQUIPMENT, net 2,039,836 5,068 - 2,034,768
NOTES RECEIVABLE, less current portion 92,731 - - 92,731
DEFERRED FINANCING COSTS 80,443 - - 80,443
------------ ---------- --------- -----------
$ 2,975,413 $ 33,489 $ 400,000 $ 3,341,924
------------ ---------- --------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Current maturities of long-term
Obligations $ 938,366 $ - $ - $ 938,366
Accounts payable 865,221 - - 865,221
Accrued liabilities 713,936 - - 713,936
------------ ---------- --------- -----------
Total current liabilities 2,517,523 - - 2,517,523
LONG-TERM OBLIGATIONS, less current
maturities 651,606 - - 651,606
OTHER LONG-TERM LIABILITIES 140,785 - - 140,785
SHAREHOLDER'S EQUITY (DEFICIT)
Common stock 18,502 - - 18,502
Additional paid-in capital 5,537,344 - - 5,537,344
Accumulated deficit (5,890,347) 33,489 400,000 (5,523,836)
------------ ---------- --------- -----------
(334,501) 33,489 400,000 32,010
------------ ---------- --------- -----------
$ 2,975,413 $ 33,489 $ 400,000 $ 3,341,924
------------ ---------- --------- -----------
------------ ---------- --------- -----------
</TABLE>
Notes:
(a) To eliminate certain assets related to the full-service restaurant
sold in March 1999 and included in the consolidated balance sheet of
Premium Restaurant Company as of December 27, 1998.
(b) To reflect the cash proceeds received from the sale of the
full-service restaurant sold in March 1999.
F-1
<PAGE>
PREMIUM RESTAURANT COMPANY AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE FIFTY-TWO WEEKS ENDED JUNE 28, 1998
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------
Sale/Closure of Sale of One
Three Full-Service Full-Service
Historical Restaurants(a) Restaurant(b) Pro Forma
---------- -------------- ------------- ---------
<S> <C> <C> <C> <C>
Sales
Full-service restaurants $ 9,677,065 $ 4,414,014 $ 2,064,883 $ 3,198,168
Bagel bakeries 2,780,917 - - 2,780,917
------------ ------------ ------------ ------------
Total sales 12,457,982 4,414,014 2,064,883 5,979,085
Cost of food and beverage 3,971,327 1,395,337 626,808 1,949,182
------------ ------------ ------------ ------------
Gross profit 8,486,655 3,018,677 1,438,075 4,029,903
Operating expenses (income)
Labor and benefits 4,553,493 1,561,851 716,247 2,275,395
Direct and occupancy 5,226,403 1,438,381 566,603 3,221,419
General and administrative 1,190,857 54,510 9,300 1,127,047
Write-down of impaired assets 90,732 - - 90,732
Gain on sale of restaurants (1,076,342) - - (1,076,342)
Loss on closure of bagel bakery 63,039 - - 63,039
------------ ------------ ------------ ------------
10,048,182 3,054,742 1,292,150 5,701,290
------------ ------------ ------------ ------------
Earnings (loss) from operations (1,561,527) (36,065) 145,925 (1,671,387)
Other income (expense)
Interest expense (241,759) (55,662) - (186,097)
Investment income 23,880 - - 23,880
Other, net 6,534 1,721 - 4,813
------------ ------------ ------------ ------------
(211,345) (53,941) - (157,404)
------------ ------------ ------------ ------------
Earnings (loss) before income taxes (1,772,872) (90,006) 145,925 (1,828,791)
Income taxes (7,349) - - (7,349)
------------ ------------ ------------ ------------
Net earnings (loss) $ (1,780,221) $ (90,006) $ 145,925 $ (1,836,140)
------------ ------------ ------------ ------------
Net earnings (loss) per share-basic and diluted $ (1.81) $ (0.09) $ 0.15 $ (1.86)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Weighted average number of shares outstanding
during the period-basic and diluted 985,771 985,771 985,771 985,771
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
Notes:
(a) To reflect the decrease in sales and costs and expenses for the
fifty-two weeks ended June 28, 1998 related to the operations of the
full-service restaurant closed in July 1998, the full-service
restaurant sold in September 1998 and the full-service restaurant sold
in November 1998.
(b) To reflect the decrease in sales and costs and expenses for the
fifty-two weeks ended June 28, 1998 related to the operations of the
full-service restaurant sold in March 1999.
F-2
<PAGE>
PREMIUM RESTAURANT COMPANY AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE THIRTEEN WEEKS ENDED DECEMBER 27, 1998
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------
Sale/Closure Sale of
Of Three Full One Full-
Service Service Other(c) Pro Forma
Historical Restaurants(a) Restaurant(b) -------- ---------
---------- -------------- -------------
<S> <C> <C> <C> <C>
Sales
Full-service restaurants $ 1,956,577 $ 963,883 $ 992,694 $ -- $ --
Bagel bakeries 1,347,759 -- -- -- 1,347,759
---------- ---------- ---------- ---------- ----------
Total sales 3,304,336 963,883 992,694 -- 1,347,759
Cost of food and beverage 1,116,762 314,413 303,465 -- 498,884
---------- ---------- ---------- ---------- ----------
Gross profit 2,187,574 649,470 689,229 -- 848,875
Operating expenses (income)
Labor and benefits 1,232,614 361,919 353,203 -- 517,492
Direct and occupancy 1,568,807 310,213 246,539 -- 1,012,055
General and administrative 531,523 8,300 2,500 -- 520,723
Gain on sale of restaurants (521,563) -- -- 521,563 --
---------- ---------- ---------- ---------- ----------
2,811,381 680,432 602,242 521,563 2,050,270
---------- ---------- ---------- ---------- ----------
Earnings (loss) from operations (623,807) (30,962) 86,987 (521,563) (1,201,395)
Other income (expense)
Interest expense (102,669) (5,681) -- -- (96,988)
Investment income 14,868 -- -- -- 14,868
Other, net 317 254 -- -- 63
---------- ---------- ---------- ---------- ----------
(87,484) (5,427) -- -- (82,057)
---------- ---------- ---------- ---------- ----------
Earnings (loss) before inc. taxes and extra items (711,291) (36,389) 86,987 (521,563) (1,283,452)
Income taxes 2,550 -- -- -- 2,550
---------- ---------- ---------- ---------- ----------
Loss before extraordinary items (713,841) (36,389) 86,987 (521,563) (1,286,002)
Extra. gain from the early extinguishment of debt (340,248) -- -- 340,248 --
---------- ---------- ---------- ---------- ----------
Net earnings (loss) $ (373,593) $ (36,389) $ 86,987 $ (861,811) $(1,286,002)
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Net earnings (loss) per share-basic and diluted $ (0.20) $ (0.02) $ 0.05 $ (0.47) $ (0.70)
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Weighted average number of shares outstanding
during the period-basic and diluted 1,848,064 1,848,064 1,848,064 1,848,064 1,848,064
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>
Notes:
(a) To reflect the decrease in sales and costs and expenses for the
twenty-six weeks ended December 27, 1998 related to the operations of
the full-service restaurant closed in July 1998, the full-service
restaurant sold in September 1998 and the full-service restaurant sold
in November 1998.
(b) To reflect the decrease in sales and costs and expenses for the
twenty-six weeks ended December 27, 1998 related to the operations of
the full-service restaurant sold in March 1999.
(c) To reflect the elimination of the extraordinary gain from the early
extinguishment of debt on the full-service restaurant closed in July
1998 and to reflect the elimination of the gain on sale of the
full-service restaurant sold in September 1998 and the full-service
restaurant sold in November 1998.
F-3
