<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 12, 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
UNI-MARTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its Current
Report on Form 8-K filed on May 8, 2000.
Item 7. Consolidated Financial Statements and Pro Forma
Financial Information
Report of Independent Certified Public Accountants
Combined Financial Statements of The Orloski Group
Pro Forma Condensed Combined Financial Information
Exhibits
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<PAGE>
ITEM 7. COMBINED FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL
INFORMATION
PAGE(S)
(a) Combined Financial Statements of The Orloski Group
Report of Parente Randolph, P.C., independent
certified public accountants 5
Combined Balance Sheets - March 31, 2000 and
December 31, 1999 6
Combined Statement of Operations - Three Months
Ended March 31, 2000 and Year Ended December
31, 2000 7
Combined Statements of Cash Flows - Three Months
Ended March 31, 2000 and Year Ended December
31, 2000 8
Notes to Combined Financial Statements 9-22
(b) Pro Forma Condensed Consolidated Financial Information
of Uni-Marts, Inc.
Introductory Information 23
Pro Forma Condensed Consolidated Balance Sheet -
September 30, 1999 24
Pro Forma Condensed Consolidated Statements of
Operations - Two Quarters Ended March 31, 2000
And Year Ended September 30, 1999 25-26
Notes to Pro Forma Condensed Consolidated
Financial Information 27-29
(c) Exhibits:
EXHIBIT NUMBER
--------------
23 Consent of Parente Randolph, P.C. 31
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<PAGE>
The Orloski Group
________________________________
Combined Financial Statements
For The Three Months Ended March 31, 2000
&
Year Ended December 31, 1999
&
Independent Auditors' Report
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<PAGE>
Table of Contents
PAGE
Independent Auditors' Report 2
Combined Financial Statements:
Balance Sheet 3
Statement of Operations and Retained Earnings 4
Statement of Cash Flows 5
Notes to Financial Statements 6
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<PAGE>
PARENTE RANDOLPH
Independent Auditors' Report
To the Equity Members of
The Orloski Group:
We have audited the combined balance sheet of The Orloski Group (the
"Company") as of December 31, 1999, and the related combined
statements of operations and retained earnings and cash flows for the
year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted
accounting standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the financial position of
the Company as of December 31, 1999, and the results of their
operations and their cash flows for the year then ended in conformity
with generally accepted accounting principles.
/s/ Parente Randolph, PC
---------------------------
Wilkes-Barre, Pennsylvania
May 22, 2000
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<PAGE
<TABLE>
THE ORLOSKI GROUP
COMBINED BALANCE SHEET
MARCH 31, 2000 AND DECEMBER 31, 1999
<CAPTION>
(UNAUDITED)
(UNAUDITED)
MARCH 31, DECEMBER 31, MARCH 31, DECEMBER 31,
2000 1999 2000 1999
---- ---- ---- ----
ASSETS LIABILITIES
AND EQUITY
<S> <C> <C> <C>
<C> <C>
CURRENT ASSETS: CURRENT
LIABILITIES:
Cash and cash equivalents $ 5,012,767 $ 4,868,403 Current portion of:
Accounts receivable(net of Note payable $ 555,000 $ 550,000
allowance for uncorrectable Bonds payable 780,000 780,000
accounts of $33,000) 1,493,963 1,288,963 Accounts payable 3,793,941 4,084,909
Current portion of mortgages and Fuel and other 1,466,684 1,637,934
notes receivable 85,422 91,083 taxes payable
Other liabilities 477,935 552,406
Inventories 1,806,405 1,975,251 ------------ ------------
Prepaid and other current assets 491,933 441,021
----------- -----------
Total current assets 8,890,490 8,664,721 Total current liabilities 7,068,560 7,605,249
PROPERTY AND EQUIPMENT, NET 19,276,707 19,724,505 DEFERRED REVENUE 3,670,603 3,744,349
OTHER ASSETS 327,847 343,016 LONG-TERM DEBT,
Bonds payable 16,505,000 16,505,000
REAL ESTATE HELD FOR INVESTMENT 588,176 588,176
------------ ------------
Total liabilities 27,244,163 27,854,598
MORTAGE AND NOTES RECEIVABLE 177,210 189,198 ------------ ------------
EQUITY:
Common Stock 294,721 294,721
Retained earnings 1,721,546 1,360,297
------------ ------------
Total equity 2,016,267 1,655,018
----------- ----------- ------------ ------------
TOTAL $29,260,430 $29,509,616 TOTAL $29,260,430 $29,509,616
=========== =========== =========== ===========
</TABLE>
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<PAGE>
<TABLE>
THE ORLOSKI GROUP
COMBINED STATEMENT OF OPERATIONS
AND RETAINED EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
AND YEAR ENDED DECEMBER 31, 1999
<CAPTION>
(UNAUDITED)
MARCH 31, DECEMBER
31,
2000 1999
---- ----
<S> <C> <C>
SALES $ 21,443,626 $ 77,868,891
COST OF GOODS SOLD 16,852,213 59,554,068
------------ ------------
GROSS PROFIT 4,591,413 18,314,823
OPERATING EXPENSES 3,757,113 15,498,357
------------ ------------
INCOME FROM OPERATIONS 834,300 2,816,466
OTHER INCOME (EXPENSE) 38,740 (55,768)
------------ ------------
NET INCOME 873,040 2,760,698
RETAINED EARNINGS, BEGINNING 1,360,297 (340,163)
STOCKHOLDERS' DISTRIBUTIONS (511,791) (1,060,238)
------------ ------------
RETAINED EARNINGS, ENDING $ 1,721,546 $ 1,360,297
============ ============
</TABLE>
See Notes to Financial Statements
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<PAGE>
<TABLE>
THE ORLOSKI GROUP
COMBINED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
AND YEAR ENDED DECEMBER 31, 1999
<CAPTION>
(UNAUDITED)
MARCH 31, DECEMBER 31,
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
New income $ 873,040 $ 2,760,698
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 496,647 1,941,656
Loss from sale of equipment - 31,773
Write-off of notes and accounts receivable - 125,302
Changes in assets and liabilities:
Accounts receivable (205,000) (407,244)
Inventories 168,846 (412,104)
Prepaid and other current assets (50,912) 94,700
Other assets - (31,910)
Accounts payable (290,968) 1,072,701
Fuel and other taxes payable (171,250) 168,107
Other liabilities (74,471) 162,628
Deferred revenue (73,746) (330,569)
---------- -----------
Net cash provided by operating activities 672,186 5,175,738
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (33,680) (1,515,052)
Purchase of real estate held for investment - (588,176)
Repayment of mortgage and notes receivable 17,649 176,151
Proceeds from sale of equipment - 3,833
---------- -----------
Net cash used in investing activities (16,031) (1,923,244)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term dept - (1,487,492)
Stockholders' distributions (511,791) (1,060,238)
Proceeds from note payable - 550,000
---------- -----------
Net cash used in financing activities (511,791) (1,997,730)
---------- -----------
INCREASE IN CASH AND CASH EQUIVALENTS 144,364 1,254,764
CASH AND CASH EQUIVALENTS, BEGINNING 4,868,403 3,613,639
---------- -----------
CASH AND CASH EQUIVALENTS, ENDING $5,012,767 $ 4,868,403
========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION,
Interest paid $ 211,882 $ 1,010,805
========== ===========
</TABLE>
See Notes to Financial Statements
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
1. NAUTURE OF OPERATIONS AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Nature Of Operations
The Orloski Group (the "Company") is comprised of the following entities:
*Orloski Service Stations, Inc. ("OSS"), an S corporation
*Gracedale Properties, Inc ("GPI"), an S corporation
*Blakeslee Corner, Inc. ("BCI"), an S corporation
*Operating real estate assets and liabilities of Frank and Adeline
Orloski ("OREA"), transacting business as individuals, used in the
operations of OSS.
The Company is a wholesaler and retailer of petroleum products and
operator of convenience stores located in Northeastern Pennsylvania. OSS
is the operating company with all other entities being owners of real
estate utilized by OSS. All intercompany transactions and balances have
been eliminated in the accompanying combined financial statements.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
INVENTORIES
Inventories consisting of petroleum and consumer products are recorded at
the lower of cost or market using the first-in, first-out method.
PROPERTY AND EQUIPMENT AND DEPRECIATION
Property and equipment are recorded at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the
assets.
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments purchased
with an original maturity of three months or less to be cash equivalents.
OTHER ASSETS
Included in other assets are the following:
Franchise fees and trademarks amortized using the straight-line method
between 5 and 15 years.
Prepaid rental agreement amortized using the straight-line
method over 20 years.
Deferred financing costs amortized using the straight-line
method over 15 years.
REAL ESTATE HELD FOR INVESTMENT
Real estate held for investment is recorded at cost which
approximates fair value.
ADVERTISING
Advertising costs are charged to expense when incurred and approximated
$31,000 in 2000 (unaudited) and $169,000 in 1999.
INCOME TAXES
The members of the Company are treated as pass-through entities for
income tax purposes. This treatment requires the members to reflect the
taxable income of the Company in their personal income tax returns. No
provision for income taxes is included in these financial statements
since such liabilities, if any, are the responsibility of the members.
INTERIM FINANCIAL STATEMENTS
The March 31, 2000 financial statements contain all the adjustments that
management considers necessary for a fair presentation of financial
position and results of operation. There were no adjustments other than
normal recurring accruals.
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
2. MORTGAGE AND NOTES RECEIVABLE
The Company periodically advances cash to its customers to assist them in
purchasing fixed assets or for renovations to customers' operations.
Repayment terms vary by customer but normally are based on a fixed
monthly payment or a rate per gallon for fuel purchases. The notes
include interest rates varying from 6% to 7.5% and are generally secured
by equipment. The current portion is based on the fixed repayment amounts
or an estimate of future sales to customers with repayment terms based on
gallons purchased. Mortgage and notes receivable at March 31, 2000 and
December 31, 1999 are as follows:
(UNAUDITED)
MARCH 31, DECEMBER 31,
2000 1999
---- ----
Mortgage and notes receivable $262,632 $280,281
Less current portion 85,422 91,083
-------- --------
Noncurrent portion $177,210 $189,198
======== ========
Management has not provided a reserve for un-collectible mortgages and
notes receivable. Consequently, it is reasonably possible that the net
realizable value of these amounts may change in the next year.
3. INVENTORIES
Inventories consist of the following at March 31, 2000 and December 31,
1999:
(UNAUDITED)
MARCH 31, DECEMBER 31,
2000 1999
---- ----
Consumer products $1,208,301 $1,290,029
Petroleum 598,104 685,222
---------- ----------
Total $1,806,405 $1,975,251
========== ==========
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
4. PROPERTY AND EQUIPMENT, NET
The composition of property and equipment is as follows at March 31, 2000
and December 31, 1999:
(UNAUDITED)
MARCH 31, DECEMBER 31,
2000 1999
---- ----
Land $ 4,116,460 $ 4,116,460
Buildings 11,510,568 11,510,568
Improvements 3,803,334 3,803,334
Equipment, furniture and fixtures 16,239,385 16,227,383
Vehicles 671,373 671,373
Construction in progress 358,721 358,721
----------- -----------
Total 36,699,841 36,687,839
Less accumulated depreciation 17,423,134 16,963,334
----------- -----------
Property and equipment, net $19,276,707 $19,724,505
=========== ===========
Depreciation was $481,478 (unaudited) in 2000 and $1,924,955 in 1999.
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
5. OTHER ASSETS
Other assets consist of the following at March 31, 2000 and December 31,
1999:
(UNAUDITED)
MARCH 31, DECEMBER 31,
2000 1999
---- ----
[S] [C] [C]
Franchise fees and trademarks $ 26,242 $ 26,242
Accumulated amortization (10,178) (9,366)
-------- --------
Franchise fees and trademarks, net 16,064 16,876
-------- --------
Prepaid rental agreement 157,500 157,500
Accumulated amortization (12,636) (1,313)
-------- --------
Prepaid rental agreement, net 144,864 156,187
-------- --------
Deferred financing costs 182,092 182,092
Accumulated amortization (15,173) (12,139)
-------- --------
Deferred financing costs, net 166,919 169,953
-------- --------
Total $327,847 $343,016
======== ========
Amortization was $15,169 (unaudited) in 2000 and $16,701 in 1999.
6. BONDS PAYABLE
In December 1998, the Company issued Taxable Variable Rate Demand/Fixed
Rate Revenue Bonds, Series of 1998 (the "Bonds") under the terms of a
Trust Indenture with The First National Bank of Maryland. The proceeds
were used to refinance existing indebtedness and reimburse the Company for
capital expenditures and the cost of issuance.
-10-
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
Security for the Bonds is an Irrevocable Letter of Credit (the "Letter of
Credit") issued by First Union National Bank, N.A. Substantially all
assets of the Company and the personal guarantee of the majority
stockholder of OSS and his spouse secure the Letter of Credit. To
maintain the Letter of Credit, the Company must pay an annual fee, in
advance, equal to .7% of the outstanding balance of the Bonds plus forty-
six days of accrued interest. The Letter of Credit has an initial term of
seven years with an optional annual renewal.
The Bonds are subject to a demand provision whereby bondholders may submit
bonds for repayment at face value at any time. Bonds so submitted are
subject to the terms of a Re-marketing Agreement (the "Agreement") with
First Union Capital Markets ("First Union"). Under the terms of the
Agreement, First Union, in the event of a demand for repayment by a
bondholder, will immediately re-market the bonds under substantially the
same variable rate terms. The Bonds are also subject to annual
redemptions, with a final redemption in November 2013.
The Bonds bear interest at a floating rate (maximum of 17%), adjusted
weekly, that is approximately equal to 120% of the interest rate per annum
of high quality thirty-day commercial paper as reported by The Wall Street
Journal.
(UNAUDITED)
MARCH 31, DECEMBER 31,
2000 1999
---- ----
Bonds payable $17,285,000 $17,285,000
Less current portion 780,000 780,000
----------- -----------
Long-term debt $16,505,000 $16,505,000
=========== ===========
Scheduled repayments on the Bonds are as follows:
YEAR ENDING DECEMBER 31:
------------------------
2000 $ 780,000
2001 835,000
2002 890,000
2003 955,000
2004 1,010,000
Thereafter 12,815,000
-----------
Total $17,285,000
===========
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
7. NOTE PAYABLE
The note payable consists of amounts borrowed under a line of credit
agreement with a bank. The amounts are due on demand and bear interest at
the prime rate.
8. DEFERRED REVENUE
The Company has an agreement with its major fuel supplier to purchase
550,000,000 gallons of fuel over a ten-year period that expires December
31, 2008. In exchange, the supplier provided $5,340,000 in incentives to
rebrand its stores and for use in its operations. The Company is required
to repay the unused portion of this incentive if the terms of the agreement
are not met. The portion of the incentive which was not used for capital
expenditures has been deferred and is being amortized over the life of the
agreement based on the annual gallons used by the Company over the total
requirement of 550,000,000.
(UNAUDITED)
MARCH 31, DECEMBER 31,
2000 1999
---- ----
Original balance $4,387,602 $4,387,602
Accumulated amortization 716,999 643,253
---------- ----------
Balance $3,670,603 $3,744,349
========== ==========
Amortization was $73,746 (unaudited) in 2000 and $330,560 in 1999.
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<PAGE>
<TABLE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
9. EQUITY
Equity at March 31, 2000 and December 31, 1999 consists of the following:
<CAPTION>
(UNAUDITED)
MARCH 31, DECEMBER 31,
2000 1999
---- ----
<S> <C> <C>
COMMON STOCK:
Orloski's Service Stations, Inc.,
Common stock, 10,000 shares authorized,
2,500 shares of $10 par value issued
and outstanding $ 25,000 $ 25,000
Gracedale Properties, Inc.,
Common stock, 10,000 shares authorized,
600 shares of no par value issued and
outstanding 269,121 269,121
Blakeslee Corner, Inc.,
Common stock, 10,000 shares authorized,
600 shares of no par value issued and
outstanding 600 600
---------- ----------
Total common stock 294,721 294,721
---------- ----------
RETAINED EARNINGS (DEFICIT):
Orloski's Service Stations, Inc. 2,977,926 2,527,852
Gracedale Properties, Inc. 264,304 283,258
Blakeslee Corner, Inc. (11,592) (23,862)
OREA (1,509,092) (1,426,951)
---------- ----------
Total retained earnings 1,721,546 1,360,297
---------- ----------
EQUITY $2,016,267 $1,655,018
========== ==========
</TABLE>
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
10. PENSION PLAN
The Company sponsors a qualified pension plan for its employees. The
following tables provide a reconciliation of the changes in the plan's
benefit obligations and fair value of plan assets for the year ended
December 31, 1999:
Change in benefit obligation:
Benefit obligation, January 1 $ 1,675,284
Service cost 160,442
Interest cost 111,478
Participant contributions -
Plan amendments -
Actuarial (gain) loss (55,255)
Benefit payments (54,973)
----------
Benefit obligation, December 31 $1,836,976
==========
Change in fair value of plan assets:
Fair value of plan assets, January 1 $2,342,714
Actual return on plan assets 531,084
Employer contributions 131,659
Participant contributions -
Benefit payments (54,973)
----------
Fair value of plan assets, December 31 $2,950,484
==========
Funded status:
Funded status $1,113,508
Unrecognized transition (asset) obligation (88,148)
Unrecognized prior-service cost -
Unrecognized (gain) loss (641,203)
----------
Net amount recognized $ 384,157
==========
Prepaid pension cost recognized in the balance sheet at March 31, 2000 and
December 31, 1999 was $384,157, and is included in prepaid and other
current assets.
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
The components of net periodic pension cost for the year ended December
31, 1999, are as follow:
Service cost $160,442
Interest cost 111,478
Expected return on plan assets (167,301)
Amortization of transition asset (6,296)
Amortization of prior-service cost (2,877)
--------
Net periodic pension cost $ 95,446
========
Prior-service costs are amortized on a straight-line basis over the
average remaining service period of active participants. Gains and losses
in excess of 10% of the greater of the benefit obligation and the market-
related value of assets are amortized over the average remaining service
period of active participants.
Assumptions used in the measurement of the Company's benefit obligations
at December 31, 1999 are as follows:
Weighted-average assumptions:
Discount rate 7.0%
Expected return on plan assets 7.0
Rate of compensation increase 6.0
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<PAGE>
<TABLE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
11. OPERATING LEASES
The Company leases land and premises from unrelated third parties, which
are classified as operating leases. Rent expense approximated $29,000
(unaudited) in 2000 and $117,000 in 1999.
Future minimum lease payments are as follows:
<CAPTION>
YEAR ENDING DECEMBER 31:
------------------------
<S> <C>
2000 $ 112,000
2001 112,000
2002 106,000
2003 87,000
2004 92,000
Thereafter 1,422,000
----------
Total $1,931,000
==========
12. OTHER INCOME (EXPENSE)
Other income (expense) consists of the following in 2000 and 1999:
<CAPTION>
(UNAUDITED)
MARCH 31, DECEMBER 31,
2000 1999
---- ----
<S> <C> <C>
Commissions $136,765 $ 579,788
Interest income 53,271 197,305
Other 23,101 283,871
Interest expense (174,397) (1,084,959)
Loss from sale of equipment - (31,773)
-------- ----------
Total $ 38,740 $ (55,768)
======== ==========
</TABLE>
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
13. CONCENTRATION OF CREDIT RISK
The Federal Deposit Insurance Corporation insures deposits wit any one
financial institution to $100,000. The Company periodically has cash
balances with financial institutions in excess of the insured amount.
14. DERIVATIVE FINANCIAL INSTRUMENTS
The Company entered into an interest rate swap agreement, which is
considered a derivative financial instrument, to hedge its variable rate
interest rate payment on the $17,285,000 bonds payable (Note 6). That
agreement is used to reduce the potential impact of increases in interest
rates on the Company's floating-rate long-term note. The agreement
entitles the Company to receive from counterparties, on a monthly basis,
the amount of any interest paid by the Company in excess of 6.7%. The
derivative is not used for trading purposes and involves little
complexity. The notional amount of the interest rate swap agreement is
$17,285,000.
The interest rate swap agreement is secured by the guarantee of the
majority stockholder of OSS and his spouse.
The Company is exposed to credit losses if the counterparties to its
interest rate swap agreement fail to perform. However, there is no
significant off-balance-sheet credit risk relating to the agreements.
The Company monitors the credit standing of the counterparties but does
not obtain collateral or other security to ensure performance.
-17-
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
15. FINANCIAL INSTRUMENTS
The carrying amount and estimated fair value of the Company's financial
instruments at March 31, 2000 and December 31, 1999 are as follows:
<TABLE>
<CAPTION>
(UNAUDITED)
MARCH 31, 2000 DECEMBER 31, 1999
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
------ ----- ------ -----
<S> <C> <C> <C> <C>
ASSET:
Cash and cash
Equivalents $5,012,767 $5,012,767 $4,868,403 $4,868,403
Mortgage and notes
Receivable 262,632 262,632 280,281 280,281
LIABILITIES:
Bonds payable 17,285,000 17,285,000 17,285,000 17,285,000
Notes payable 550,000 550,000 550,000 550,000
</TABLE>
Fair values were determined as follows:
Cash and cash equivalents, mortgage and notes receivable, bonds and
note payable: the carrying amounts approximate fair value.
16. CONTINGENCIES
The Company is subject to a variety of environmental and pollution
control laws and regulations. It has been named a potentially
responsible party at one location. Due to evolving remediation
technology, changing regulations, possible third party contributions, the
inherent shortcomings of the estimation process and other factors, it is
not possible to estimate a meaningful range of possible exposure. The
Company is also subject to other legal proceedings and claims, which
arise, in the ordinary course of business Management believes that these
environmental and other legal matters individually or in the aggregate
will not have a material adverse effect on financial position or results
of operations.
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<PAGE>
THE ORLOSKI GROUP
NOTE TO COMBINED FINANCIAL STATEMENTS
17. SUBSEQUENT EVENT
On April 21, 2000, the Company sold substantially all of its operating
assets to Uni-Marts, Inc. for cash, the assumption of the fuel supplier
obligation (Note 8) and other consideration.
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<PAGE>
UNI-MARTS, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
The following unaudited pro forma condensed consolidated balance sheet
dated September 30, 1999 assumes that the April 2000 purchase of operating
assets from Orloski Service Station, Inc. and its owners (collectively
"OSSI") by Uni-Marts, Inc. and certain wholly owned affiliates (collectively
"Uni-Marts" or the "Company") occurred on September 30, 1999. The allocation
of the purchase price to individual assets and liabilities is preliminary
pending the finalization of fair value information.
In addition, unaudited pro forma consolidated statements of operations for
the fiscal year ended September 30, 1999 and the two quarters ended March
30, 2000 are included, which assumes that the purchase occurred on October
1, 1998, the beginning of Uni-Marts' fiscal year.
The unaudited pro forma results do not purport to be indicative of the
results of operations that would have been obtained if the purchase
occurred on October 1, 1998 nor are they necessarily indicative of the
future results of operations of Uni-Marts. These statements should be read
in conjunction with Uni-Marts' historical financial statements and related
notes thereto.
-23-
<PAGE>
<TABLE>
UNI-MARTS, INC
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED, AMOUNTS IN THOUSANDS)
SEPTEMBER 30, 1999
<CAPTION>
Uni-Marts OSSI Pro Forma Uni-Marts
Historical Historical Adjustments ProForma
---------- ---------- ----------- ---------
ASSETS
------
<S> <C> <C> <C> <C>
Current assets $20,856 $ 8,665 (a)($ 9,798) $ 19,723
Property, equipment and
improvements, net 61,713 20,313 (a) 19,262 101,288
Intangible assets 3,943 (a) 4,011 7,954
Other assets 1,963 532 (a)( 532) 1,963
------- ------- --------
TOTAL ASSETS $88,475 $29,510 $130,928
======= ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities $21,396 $ 7,605 (a) 4,922 $ 24,079
Long-term debt, less
current maturities 33,265 16,505 (a)( 20,765) 70,535
Obligations under capital
leases, less current
obligations 876 876
Deferred income and other
Liabilities 4,992 3,744 (a) 1,244 7,492
Stockholders' Equity:
Common stock 733 295 (a) 295 733
Other stockholders'
Equity 27,213 1,361 (a) 1,361 27,213
------- ------- ------- --------
27,946 1,656 1,656 27,946
------- ------- ------- --------
TOTAL LIABILITIES AND $88,475 $29,510 $ 0 $130,928
STOCKHOLDERS' EQUITY ======= ======= ======= ========
</TABLE>
See notes to pro forma condensed consolidated financial information
-24-
<PAGE>
<TABLE>
UNI-MARTS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED SEPTEMBER 30, 1999
<CAPTION>
Uni-Marts OSSI Pro Forma Uni-Marts
Historical Historical Adjustments ProForma
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues $252,305 $77,813 (1) ($ 100) $330,218
Costs and Expenses:
Cost of sales 185,285 56,854 (2) ( 417) 241,722
Selling 52,568 12,472 (3) 1,037 66,077
General and administrative 7,509 2,700 (4) ( 1,975) 8,234
Depreciation and
amortization 5,968 1,941 (5) 144 8,053
Interest 3,950 1,085 (6) 2,910 7,945
Asset impairment provision 208 208
-------- ------- ------ --------
Total costs and expenses 255,488 75,052 1,699 332,239
-------- ------- ------ --------
Earnings (loss) before
income taxes ( 3,183) 2,761 ( 1,599) ( 2,021)
Income tax provision
(benefit) ( 948) (7) 140 ( 808)
-------- ------- ------ --------
Net earnings (loss) ($ 2,235) $ 2,761 ($ 1,739) ( $1,213)
======== ======= ======= ========
Earnings (loss) per share ($ 0.32) ($ 0.18)
======== ========
Weighted average number
of common shares
outstanding 6,887 6,887
======== ========
</TABLE>
-------------
The pro forma adjustments above do not include anticipated revenue
increases of $380,000 related to pricing of tobacco products, reductions of
$403,000 in the cost of merchandise purchases and anticipated operating
cost reductions of $746,000.
See notes to pro forma condensed consolidated financial information
-25-
<PAGE>
<TABLE>
UNI-MARTS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
TWO QUARTERS ENDED MARCH 30, 2000
<CAPTION>
Uni-Marts OSSI Pro Forma Uni-Marts
Historical Historical Adjustments ProForma
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues $138,876 $43,801 (8) ($ 50) $182,727
Costs and Expenses:
Cost of sales 107,090 34,429 (9) ( 209) 141,310
Selling 24,423 6,082 (10) 519 31,024
General and administrative 3,162 1,027 (11) ( 987) 3,202
Depreciation and
amortization 2,879 803 (12) 240 3,922
Interest 1,912 455 (13) 1,542 3,909
-------- ------- ------- --------
Total costs and expenses 139,466 42,796 1,105 183,367
-------- ------- ------- --------
Earnings (loss) before
income taxes ( 590) 1,005 ( 1,055) ( 640)
Income tax provision
(benefit) ( 177) (14) ( 79) ( 256)
-------- ------- ------- --------
Net earnings (loss) ($ 413) $ 1,005 ($ 976) ($ 384)
======== ======= ======= ========
Earnings (loss) per share ($ 0.06) ($ 0.05)
======== ========
Weighted average number
of common shares
outstanding 6,982 6,982
======== ========
</TABLE>
-------------
The pro forma adjustments above do not include anticipated revenue
increases of $190,000 related to pricing of tobacco products, reductions of
$222,000 in the cost of merchandise purchases and anticipated operating
coast reductions of $373,000.
See notes to pro forma condensed consolidated financial information
-26-
<PAGE>
UNI-MARTS, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
(a) On April 21, 2000, pursuant to an asset purchase agreement dated February
23, 2000, Uni-Marts purchased the operating assets of OSSI for approximately
$43.1 million in cash, including professional fees of $1.3 million, and the
assumption of $2.5 million of OSSI debt. The funds utilized to acquire the OSSI
assets were provided by four loans from affiliates of Franchise Finance
Corporation of America ("FFCA") aggregating $39.7 million less $1.3 million in
debt costs and from $2.9 million of the Company's cash and a deferred payment of
$1.5 million for inventory.
The pro forma entries below present the effect of the asset purchase on the
consolidated balance sheet of Uni-Marts at September 30, 1999.
<TABLE>
<CAPTION>
DR (CR)
<S> <C>
Current Assets - OSSI assets not purchased
(cash and prepaid expenses) ($ 6,942)
- Use of Uni-Marts cash ( 2,856)
--------
($ 9,798)
========
Property, Equipment and Improvements, Net
- Eliminate net book value of OSSI fixed assets ($ 20,313)
- Add Uni-Marts cost of acquired fixed assets 39,575
--------
$ 19,262
========
Intangible Assets - Goodwill $ 4,011
========
Other Assets - OSSI assets not purchased ($ 532)
========
Current Liabilities - OSSI liabilities not assumed $ 7,605
- Amount due OSSI for inventory purchased ( 1,567)
- Current portion of borrowings from FFCA ( 1,116)
--------
$ 4,922
========
Long-Term Debt - Eliminate OSSI debt not assumed $ 16,505
- Add balance of borrowings from FFCA ( 37,270)
--------
($ 20,765)
========
Deferred Income and Other Liabilities - Eliminate part
of deferred income $ 1,244
========
Common Stock - Eliminate OSSI common stock $ 295
========
Other Stockholders' Equity - Eliminate balance of OSSI
stockholder equity $ 1,361
========
</TABLE>
-27-
<PAGE>
UNI-MARTS, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
(b) The following adjustments present the effect of the asset purchase on Uni-
Marts' statements of operations for the year ended September 30, 1999 and the
two quarters ended March 30, 2000 assuming the purchase was consummated on
October 1, 1998. The historical information for OSSI for the year ended
September 30, 1999 is the historical information for the year ended December 31,
1999. The historical information for OSSI for the two quarters ended March 30,
2000 is the information for that period. The information for the quarter ended
December 31, 1999 is therefore included in the statements of operations for both
periods presented.
<TABLE>
<CAPTION>
DR
(CR)
<S> <C>
(1) Revenues:
Increased rental income on leased properties ( 100)
=====
(2) Cost of Sales:
Lower priced supply contracts for acquired stores ( 67)
Reclass shortages to selling expense ( 350)
-----
( 417)
=====
(3) Selling Expenses:
Reclass shortages from Cost of Sales 350
Reclass regional expenses from general and
administrative expense 752
Eliminate amortization expense for intangible asset
not purchased ( 65)
-----
1,037
=====
(4) General and Administrative Expense:
Reclass regional expenses to Selling Expenses ( 752)
Reduce OSSI general office expenses (1,000)
Eliminate pension and capital stock tax expenses ( 223)
-----
(1,975)
=====
(5) Depreciation and Amortization Expense:
Eliminate existing depreciation and amortization (1,941)
Add depreciation of fixed assets at new cost 1,872
Add amortization of intangible assets over 15 years 213
-----
144
=====
(6) Interest Expense:
Eliminate OSSI interest expense (1,085)
Add interest on new borrowing 3,995
-----
2,910
=====
(7) Income Tax Provision:
Adjust income tax rate to 40% 140
=====
</TABLE>
-28-
<PAGE>
<TABLE>
UNI-MARTS, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
<CAPTION>
<S> <C>
(8) Revenues:
Increased rental income on leased properties ( 50)
=====
(9) Cost of Sales:
Lower priced supply contracts ( 34)
Reclass shortages to selling expense ( 175)
-----
( 209)
=====
(10) Selling Expenses:
Reclass shortages from cost of sales 175
Reclass regional expenses from general and administrative
expense 376
Eliminate amortization expense for intangible asset not
purchased ( 32)
-----
519
=====
(11) General and Administrative Expense:
Reclass regional expenses to selling expenses ( 376)
Reduce OSSI general office expenses ( 500)
Eliminate pension and capital stock tax expenses ( 111)
-----
( 987)
=====
(12) Depreciation and Amortization Expense:
Eliminate existing depreciation and amortization ( 803)
Add depreciation of fixed assets at new cost 936
Add amortization of intangible assets over 15 years 107
-----
240
=====
(13) Interest Expense:
Eliminate OSSI interest expense ( 455)
Add interest on new borrowing 1,997
-----
1,542
=====
(14) Income Tax Provision:
Adjust income tax rate to 40% ( 79)
=====
</TABLE>
-29-
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
UNI-MARTS, INC.
(Registrant)
Date: July 05, 2000 By:/s/ N. Gregory Petrick
----------------------------
N. Gregory Petrick
Senior Vice President and
Chief Financial Officer
-30-
<PAGE>
EXHIBIT 23 - CONSENT OF PARENTE RANDOLPH, P.C.
Independent Auditors' Consent
Board of Directors and
Stockholders of Uni-Marts, Inc.
State College, Pennsylvania
We consent to the incorporation by reference in Registration Statements No.
333-69136, No. 333-07697 and No. 333-24903 of Uni-Marts, Inc. on Form S-8
of our report dated May 22, 2000 of The Orloski Group for the year ended
December 31, 1999.
/s/ Parente Randolph, P.C.
---------------------------
Wilkes-Barre, Pennsylvania
June 30, 2000
-31-
