SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Act of 1934 Date of
Report (Date of earliest event reported): December 13, 1995
Commission File Number: 1-9364
FLAGSTAR CORPORATION
(Exact name of Registrant as Specified in Charter)
Delaware 13-3027522
(State of Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
203 East Main Street 29319-9966
Spartanburg, South Carolina (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code:
(803) 597-8000
N/A
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
As of December 13, 1995, Flagstar Corporation ("Flagstar"),
a wholly-owned subsidiary of Flagstar Companies, Inc., closed the
sale of its recreation services operation as conducted through its TW
Recreational Services, Inc. subsidiary. The buyer in such transaction
was Amfac Parks, Inc., a wholly-owned subsidiary of Northbrook
Corporation, another major parks concessionaire. The sale, effected in
the form of a sale of the stock of IM Parks, Inc., an indirect
subsidiary of Flagstar and the parent company of TW Recreational
Services, Inc., was for a cash purchase price paid at closing of $104
million, subject to post-closing adjustment under certain circumstances.
Such purchase price was the result of arm's-length negotiations between
the parties. A copy of the press release issued on December 14, 1995 is
attached hereto as Exhibit 99.1.
As of December 21, 1995, Flagstar closed the sale of its concessions
operation as conducted through its Volume Services, Inc. subsidiary. The buyer
in such transaction was VSI Acquisition II Corp., a new company formed by the
core management group of Volume Services, Inc. and Blackstone Capital Partners
II, a New York based private investment bank. The sale, effected in the
form of a sale of stock of IM Stadium, Inc., an indirect subsidiary of
Flagstar and the parent of Volume Services, Inc., was for a cash purchase
price paid at closing of $75 million, subject to post-closing adjustment
under certain circumstances. Such purchase price was the result of arm's-length
negotiations between the parties. A copy of the press release issued on the
closing date for such transaction is attached hereto as Exhibit 99.2.
Under the terms of certain public indentures governing Flagstar's public
debt, Net Proceeds (as defined therein) of each such sale must be applied
within one year from each such closing date to one or more of the following
in such combination as Flagstar may choose: (i) an investment in other food
service businesses or assets related thereto, (ii) an offer, in accordance
with applicable law, to repurchase such public debt at a price not less than
100% of the principal amount thereof plus accrued and unpaid interest thereon,
or (iii) the purchase, redemption or other prepayment or repayment of
outstanding Senior Indebtedness (as defined in such indentures).
For certain pro forma financial information concerning these transactions,
see Item 7 below.
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Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
The following pro forma financial information is included herein:
Page
Number
in
Filing
(i) Pro Forma Condensed Consolidated Balance Sheet
(Unaudited) as of September 30, 1995, 5
(ii) Pro Forma Condensed Statement of Consolidated
Operations (Unaudited) for the Year Ended
December 31, 1994, and 6
(iii) Pro Forma Condensed Statement of Consolidated
Operations (Unaudited) for the Nine Months Ended
September 30, 1995. 6
(c) Exhibits.
Exhibit No. Description
99.1 Press Release of Flagstar dated
December 14, 1995.
99.2 Press Release of Flagstar dated
December 21, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly cause this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FLAGSTAR CORPORATION
Date: December 28, 1995 /s/ C. Robert Campbell
C. Robert Campbell,
Executive Vice President and
Chief Financial Officer
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PRO FORMA FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated balance sheet for
September 30, 1995 presented below is based upon the historical balance
sheet as of September 30, 1995 and includes pro forma adjustments as if the
sales of TW Recreational Services, Inc. ("TWRS") and Volume Services, Inc.
("VSI") had occurred on that date. The unaudited pro forma condensed statements
of consolidated operations on the following pages are based upon the historical
results of operations of the Company for the year ended December 31, 1994 and
the nine month period ended September 30, 1995. The pro forma condensed
consolidated balance sheet and pro forma condensed statements of consolidated
operations were derived by adjusting the historical financial statements of
the Company for certain pro forma transactions as described in the respective
notes thereto. The Company is currently reviewing its options as to how such
proceeds will be used.
Flagstar Corporation
Pro Forma Condensed Consolidated Balance Sheet
as of September 30, 1995
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
for sale of
Historical TWRS/VSI Pro Forma
<S> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 86,625 $179,000 (1) $ 265,625
Receivables, net 22,711 - 22,711
Merchandise and supply inventories 37,693 - 37,693
Net assets held for sale 71,029 (71,029)(1) -
Other 23,406 - 23,406
241,464 107,971 349,435
Property, net 1,144,471 - 1,144,471
Other Assets 127,257 - 127,257
Total Assets $ 1,513,192 $107,971 $1,621,163
Liabilities
Current Liabilities:
Current maturities of long-term
debt $ 29,545 $ - $ 29,545
Other Current Liabilities 312,429 17,215 (1) 329,644
341,974 17,215 359,189
Long-Term Liabilities:
Debt, less current maturities 2,012,193 - 2,012,193
Deferred income taxes 20,577 - 20,577
Other non-current liabilities and
deferred credits 235,482 - 235,482
2,268,252 - 2,268,252
Note Payable to FCI 150,000 - 150,000
Total Liabilities 2,760,226 17,215 2,777,441
Shareholders' Deficit (1,247,034) 90,756 (1) (1,156,278)
Total Liabilities and
Shareholders' Deficit $1,513,192 $107,971 $1,621,163
</TABLE>
(1) To reflect cash proceeds received of $104.0 million from the sale of
TWRS and $75.0 million from the sale of VSI and the estimated gains of
$90.8 million on such dispositions net of estimated income taxes
attributable to such gains of $17.2 million.
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Flagstar Corporation
Pro Forma Condensed Statement of Consolidated Operations
for the Year Ended December 31, 1994
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
for sale of
Historical TWRS/VSI Pro Forma
<S> <C> <C> <C>
Operating revenues $ 2,665,966 $ - $ 2,665,966
Operating expenses 2,454,839 - 2,454,839
Operating income 211,127 - 211,127
Other charges:
Interest and debt expense 241,234 18,121 (1) 259,355
Other--net 3,110 - 3,110
Loss before income taxes from
continuing operations (33,217) (18,121) (51,338)
Benefit from income taxes (2,213) - (2,213)
Loss from continuing operations $ (31,004) $(18,121) $ (49,125)
</TABLE>
Flagstar Corporation
Pro Forma Condensed Statement of Consolidated Operations
for the Nine Months Ended September 30, 1995
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
for sale of
Historical TWRS/VSI Pro Forma
<S> <C> <C> <C>
Operating revenues $ 1,994,826 - $ 1,994,826
Operating expenses 1,851,066 - 1,851,066
Operating income 143,760 - 143,760
Interest and debt expense 184,600 $ 13,591 (1) 198,191
Other--net 914 - 914
Loss before income taxes from
continuing operations (41,754) (13,591) (55,345)
Provision for (benefit from) income taxes 400 (85)(2) 315
Loss from continuing operations $ (42,154) $(13,506) $ (55,660)
</TABLE>
(1) To reflect for the year ended December 31, 1994 and nine month period
ended September 30, 1995 additional interest and debt expense of $18.1
million and $13.6 million, respectively, attributable to TWRS and VSI. Such
amounts were previously included as an allocation of interest and debt
expense to discontinued operations.
(2) To record the estimated income tax effects of additional interest and debt
expense.
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Media Contact: Karen Randall
803-597-8440
Debbie Atkins
803-597-8361
Investor Contact: Larry Gosnell
803-597-8658
FOR IMMEDIATE RELEASE
FLAGSTAR REPORTS SALE OF TWRS SUBSIDIARY COMPLETE
SPARTANBURG, S.C., Dec. 14 -- The previously announced sale of
TW Recreational Services by Flagstar Companies, Inc. (NASDAQ: FLST) to
Amfac Parks, Inc., a wholly-owned subsidiary of Northbrook Corporation,
has been completed for a purchase price of $104 million.
TW Recreational Services provides lodging, food and guest services for
national and state parks, resorts and conference centers across the United
States. Accounts include Yellowstone National Park, Mount Rushmore
National Memorial, Florida Everglades National Park, Bryce Canyon National
Park, North Rim of the Grand Canyon, Zion National Park, the Gideon Putnam
Hotel and Conference Center in New York and Ohio's state parks.
Based in Chicago, privately-held Northbrook Corporation is the parent company
of Amfac Resorts, Inc., the major concessionaire at the South Rim of the Grand
Canyon National Park and at Death Valley National Park.
As part of its strategic decision to focus on the growth of its restaurant
businesses, Flagstar also entered into an agreement in November for the sale
of its Volume Services subsidiary. That transaction is scheduled to be
completed by the end of the year.
Flagstar, one of the nations's largest restaurant companies, owns and
operates Denny's, Quincy's Family Steakhouse and El Pollo Loco restaurants
and is the largest franchisee of Hardee's restaurants. The company reported
1994 revenues of $2.7 billion.
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Media Contact: Karen Randall
803-597-8440
Debbie Atkins
803-597-8361
Investor Contact: Larry Gosnell
803-597-8658
FOR IMMEDIATE RELEASE
FLAGSTAR COMPLETES SALE OF VOLUME SERVICES
SPARTANBURG, S.C., Dec. 21 -- Flagstar Companies, Inc. (NASDAQ: FLST),
one of the nation's largest restaurant companies, today announced the sale
of its Volume Services subsidiary to VSI Acquisition II Corp. was completed
for a purchase price of $75 million.
VSI Acquisition II Corp. is a new company formed by the core management
group of Volume Services and Blackstone Capital Partners II, a New York-based
private investment bank.
Volume Services is a leading provider of food and merchandise at sports
and entertainment facilities. Its accounts include more than 80 stadiums,
arenas, amphitheaters, convention centers and theme parks throughout the
United States. Volume is the largest provider of food service and team
merchandise to the National Football League and serves five Major League
Baseball teams and numerous minor league baseball parks.
The sale of Volume Services is part of Flagstar's strategic decision to
focus on the growth of its restaurant businesses. Flagstar completed the sale
of its TW Recreational Services subsidiary last week and sold its distribution
subsidiary, Proficient Food Company, in September.
Flagstar owns and operates Denny's, El Pollo Loco and Quincy's Family
Steakhouse restaurants and is the largest franchisee of Hardee's restaurants.
The company reported 1994 revenues of $2.7 billion.
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