SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K/A1
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 4, 1998
RICHFOOD HOLDINGS, INC.
(Exact name of registrant as specified in charter)
Virginia 0-16900 54-1438602
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
4860 Cox Road, Suite 300
Glen Allen, Virginia 23060
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 915-6000
Not Applicable
(former name or former address if changed since last report)
Page 1 of 10 pages.
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INFORMATION TO BE INCLUDED IN REPORT
EXPLANATORY NOTE: This Current Report on Form 8-K/A1 amends Item 7 of the
Registrant's Current Report on Form 8-K, filed on March 19,
1998, to provide the pro forma financial information
required by Item 7. The remaining Items have not been
amended herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
a) Financial Statements of Business Acquired
Previously filed.
b) Pro Forma Financial Information
Unaudited Pro Forma Combined Condensed Statement of Earnings for
the Thirty-Six Weeks Ended January 10, 1998;
Unaudited Pro Forma Combined Condensed Statement of Earnings for
the Fiscal Year Ended May 3, 1997;
Unaudited Pro Forma Combined Condensed Balance Sheet as of January
10, 1998; and
Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
c) Exhibits
Number Exhibit
------ -------
2.1 Asset Purchase Agreement, dated as of
November 26, 1997, by and among Farm Fresh,
Inc., Richfood Holdings, Inc. and FF
Acquisition, L.L.C. (incorporated herein by
reference to Exhibit 2.1 to the Registrant's
Quarterly Report on Form 10-Q for the
quarterly period ended October 18, 1997).
2.2 Letter Agreement, dated as of March 4, 1998,
by and among Farm Fresh, Inc., Richfood
Holdings, Inc. and FF Acquisition, L.L.C.
(previously filed).
10.1 Credit Agreement, dated as of February 27,
1998, by and among Richfood Holdings, Inc.,
First Union National Bank, as administrative
agent, Crestar Bank, as syndication agent,
and Suntrust Bank, Atlanta, as documentation
agent (previously filed).
10.2 Credit Agreement, dated as of February 27,
1998, by and among Richfood Holdings, Inc.,
First Union National Bank, as administrative
agent, Crestar Bank, as syndication agent,
and Suntrust Bank, Atlanta, as documentation
agent (previously filed).
23.1 Consent of KPMG Peat Marwick LLP (previously
filed).
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<PAGE>
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following pro forma combined condensed financial statements give effect to
the acquisition by Richfood Holdings, Inc. ("Richfood") of substantially all the
assets and assumption of certain liabilities of Farm Fresh, Inc. ("Farm Fresh")
on March 4, 1998 (the "Farm Fresh Acquisition"). The transaction was effected
through a "prepackaged" Chapter 11 bankruptcy proceeding. The Company did not
assume Farm Fresh's indebtedness for money borrowed or Farm Fresh's lease
obligations for previously closed stores or stores that will be closed in
connection with the transaction. The purchase price consisted of approximately
$221.7 million cash, plus capital leases assumed, plus 1.5 million warrants for
the purchase of Richfood's common stock at an exercise price equal to $25 per
share with a term of five years following issuance. The final amount of cash
consideration is subject to adjustment based on the amount of Farm Fresh's
working capital at the time of closing, which adjustment has not been finalized
as of the date hereof. The transaction will be accounted for using the purchase
method of accounting.
The pro forma combined condensed financial statements are based upon the
respective historical consolidated financial statements of Richfood and Farm
Fresh and should be read in conjunction with Richfood's historical financial
statements and the notes thereto, contained in its Annual Report on Form 10-K
for the fiscal year ended May 3, 1997 and in its Quarterly Report on Form 10-Q
for the quarter ended January 10, 1998, and the historical financial statements
of Farm Fresh contained in Richfood's Current Report on Form 8-K, which was
filed on March 19, 1998. The unaudited pro forma combined condensed balance
sheet combines Richfood's historical condensed consolidated balance sheet as of
January 10, 1998, with Farm Fresh's historical condensed consolidated balance
sheet as of January 3, 1998. The pro forma combined condensed statements of
earnings combine Richfood's historical condensed consolidated statements of
earnings for the thirty-six week period ended January 10, 1998, and the fiscal
year ended May 3, 1997, with Farm Fresh's corresponding historical condensed
consolidated statements of operations for the thirty-six week period ended
January 3, 1998, and the fifty-two week period ended March 23, 1997. The
historical results of operations for Farm Fresh for the thirty-six week period
ended January 3, 1998 were derived by adjusting Farm Fresh's forty-one week
period from March 23, 1997 to January 3, 1998 to thirty-six weeks by removing an
estimate of five weeks of operating results. Sales and net loss of Farm Fresh
for the five weeks from March 23, 1997 to April 26, 1997, not included in the
pro forma combined condensed financial statements, were approximately $67,400
and $950, respectively. The unaudited pro forma combined condensed balance sheet
data are presented as if the Farm Fresh Acquisition occurred on the date
thereof. The unaudited pro forma combined condensed statements of earnings data
are presented as if the Farm Fresh Acquisition had occurred at the beginning of
the earliest period presented.
The unaudited pro forma financial information is presented for illustrative
purposes only and is not necessarily indicative of the operating results or
financial position that would have occurred if the Farm Fresh Acquisition had
been consummated at the beginning of the earliest period presented, with
respect to the unaudited pro forma combined condensed statements of earnings, or
at January 10, 1998, with respect to the unaudited pro forma combined condensed
balance sheet, nor is it necessarily indicative of the future operating
results or financial position of Richfood. The unaudited pro forma information
is presented based on preliminary estimates for values of net assets
acquired and may change as valuations are completed and more facts become
known. The unaudited pro forma financial information does not give effect to
any synergies that may occur due to the integration of Richfood's and Farm
Fresh's operations. Additionally, the unaudited pro forma financial information
includes the transaction costs of the Farm Fresh Acquisition, estimated to be
approximately $1.3 million for the financial advisors and regulatory filing
fees plus $1.2 million for legal and accounting fees, printing expenses and
other miscellaneous expenses, and excludes nonrecurring costs and expenses
associated with integrating the operations of the businesses.
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<TABLE>
RICHFOOD HOLDINGS, INC.
UNAUDITED PRO FORMA
COMBINED CONDENSED STATEMENT OF EARNINGS
For the Thirty-six Weeks Ended January 10, 1998
(Dollar amounts in thousands, except per share data)
<CAPTION>
Richfood
Holdings, Inc. Farm Fresh, Inc. Pro Forma Note Combined
Historical Historical Adjustments Number Pro Forma
---------- ---------- ----------- ------ ---------
<S> <C>
Sales $ 2,202,550 $ 464,126 $ (197,788) 1 $ 2,457,546
(11,342) 2
Costs and expenses, net:
Cost of goods sold 1,962,538 353,807 (197,788) 1 2,109,899
(8,658) 2
Operating and administrative expenses 163,484 95,819 2,924 3 256,657
(3,082) 2
(2,488) 4
Loss on disposition of assets - 1,849 - 1,849
Reorganization costs - 4,181 - 4,181
Write down of long-lived assets to - 150 - 150
be disposed of
Interest expense 2,559 23,077 (20,953) 5 12,434
7,751 6
Interest income (2,723) - - (2,723)
----------- --------- --------- -----------
Earnings (loss) before income taxes 76,692 (14,757) 13,164 75,099
Income taxes 29,596 - (615) 7 28,981
----------- --------- --------- -----------
Net earnings (loss) $ 47,096 $ (14,757) $ 13,779 $ 46,118
=========== ========= ========= ===========
Net earnings per common share $ 0.99 $ .97
=========== ===========
Net earnings per common share - $ 0.99 $ .97
=========== ===========
assuming dilution
Weighted average common shares:
Basic 47,492,269 8 47,492,269
========== ===========
Diluted 47,720,127 8 47,720,127
========== ===========
See accompanying notes to Unaudited Pro Forma Combined Condensed Financial Statements.
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RICHFOOD HOLDINGS, INC.
UNAUDITED PRO FORMA
COMBINED CONDENSED STATEMENT OF EARNINGS
For The Fiscal Year Ended May 3, 1997
(Dollar amounts in thousands, except per share data)
<CAPTION>
Richfood
Holdings, Inc. Farm Fresh, Inc.
Historical Historical Pro Forma Note Combined
(53 weeks) (52 weeks) Adjustments Number Pro Forma
---------- ---------- ----------- ------ ---------
Sales $ 3,411,625 $744,208 $(298,102) 1 $3,838,932
(18,799) 2
Costs and expenses, net:
Cost of goods sold 3,053,299 569,082 (298,102) 1 3,309,922
(14,357) 2
Operating and administrative 252,885 156,171 4,224 3 404,314
expenses (4,903) 2
(4,063) 4
Store closure and other charges - 1,497 - 1,497
Loss on disposition of assets - 8 - 8
Write down of long-lived assets to - 2,756 - 2,756
be disposed of
Interest expense 7,166 35,096 (32,029) 5 22,163
11,930 6
Interest income (3,672) - - (3,672)
----------- --------- --------- -----------
Earnings (loss) before income taxes 101,947 (20,402) 20,399 101,944
Income taxes 40,596 - (2) 7 40,594
----------- --------- --------- -----------
Net earnings (loss) $ 61,351 $ (20,402) $ 20,401 $ 61,350
=========== ========= ========= ===========
Net earnings per common share $ 1.30 $ 1.30
=========== ===========
Net earnings per common share -
assuming dilution $ 1.29 $ 1.29
=========== ===========
Weighted average common shares:
Basic 47,290,092 8 47,290,092
=========== ===========
Diluted 47,558,480 8 47,558,480
=========== ===========
See accompanying notes to Unaudited Pro Forma Combined Condensed Financial Statements.
<PAGE>
RICHFOOD HOLDINGS, INC.
UNAUDITED PRO FORMA
COMBINED CONDENSED BALANCE SHEET
January 10, 1998
(in thousands)
<CAPTION>
Richfood
Holdings, Inc. Farm Fresh, Inc. Pro Forma Note Combined
Historical Historical Adjustments Number Pro Forma
---------- ---------- ----------- ------ ---------
Assets
Current assets:
Cash and cash equivalents $ 36,010 $ 643 $(34,653) 9 $ 2,000
Accounts receivable less allowance for 109,926 14,882 (10,584) 10 114,224
doubtful accounts
Inventories 164,277 43,632 (1,475) 11 209,162
2,728 12
Other current assets 13,132 1,307 6,060 26 20,499
-------- --------- -------- ---------
Total current assets 323,345 60,464 (37,924) 345,885
-------- --------- -------- ---------
Notes receivable, less allowance for 33,072 - - 33,072
doubtful accounts
Property and equipment, net 123,256 100,737 (2,276) 11 223,613
1,896 22
Goodwill, net 85,094 5,955 168,969 13 254,063
(5,955) 14
Other assets 47,954 11,510 (7,590) 14 49,945
(1,929) 15
-------- --------- -------- ---------
Total assets $612,721 $ 178,666 $115,191 $906,578
======== ========= ======== ========
See accompanying notes to Unaudited Pro Forma Combined Condensed Financial Statements
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<PAGE>
RICHFOOD HOLDINGS, INC.
UNAUDITED PRO FORMA
COMBINED CONDENSED BALANCE SHEET
January 10, 1998
(in thousands)
Richfood
Holdings, Inc. Farm Fresh, Inc. Pro Forma Note Combined
Historical Historical Adjustments Number Pro Forma
---------- ---------- ----------- ------ ---------
Liabilities and Shareholders' Equity
Current liabilities:
Current installments of long term debt $ 10,259 $ 235,146 $ (231,778) 16 $ 14,289
and capital lease obligations (207) 11
869 24
Accounts Payable 197,734 22,683 (10,584) 10 209,833
Accrued expenses and other current 59,619 39,734 (1,565) 17 88,017
liabilities (19,029) 18
9,437 23
314 25
(493) 12
--------- --------- ---------- ---------
Total current liabilities 267,612 297,563 (253,036) 312,139
--------- --------- ---------- ---------
Long-term debt and capital lease 21,849 35,857 (130) 16 252,007
obligations (2,763) 11
10,188 24
221,659 19
(34,653) 9
Deferred credits and other 19,339 8,453 (6,110) 17 24,879
(1,929) 15
5,126 25
Shareholders' equity (deficit):
Preferred stock, without par value - -
- -
Common stock, without par value 74,235 29,382 (29,382) 20 88,650
14,415 21
Retained earnings (accumulated deficit) 229,686 (192,589) 192,589 20 228,903
(783) 12
--------- --------- ---------- ---------
Total shareholders' equity 303,921 (163,207) 176,839 317,553
(deficit) --------- --------- ---------- ---------
Total liabilities and $ 612,721 $ 178,666 $ 115,191 $ 906,578
shareholders' equity ========= ========= ========= =========
See accompanying notes to Unaudited Pro Forma Combined Condensed Financial Statements
</TABLE>
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<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(amounts in thousands)
1. Elimination of sales by the Company to Farm Fresh and related cost of
goods sold.
2. Elimination of sales and related cost of goods sold and operating and
administrative expenses of certain Farm Fresh stores not purchased as
part of the transaction.
3. Amortization of goodwill based on preliminary purchase price allocation
(see note 13). Goodwill is expected to be amortized over 40 years.
4. Elimination of the historical amortization of Farm Fresh's intangible
assets not acquired in the transaction.
5. Elimination of Farm Fresh's historical interest expense on indebtedness
for borrowed money.
6. Adjustment to record interest expense associated with net borrowings to
finance the cash portion of the purchase price (see notes 9 and 19) and
elimination of interest income of $897 and $113 earned on invested cash
for the fiscal year ended May 3, 1997, and the thirty-six week period
ended January 10, 1998 respectively.
7. Adjustment reflects income taxes on the net combined pro forma earnings
at the Company's historical effective tax rate of 39.8% and 38.6% for
the fiscal year ended May 3, 1997, and the thirty-six week period ended
January 10, 1998, respectively.
8. The Company's earnings per share for the thirty-six week period ended
January 10, 1998 and the fiscal year ended May 3, 1997 reflect the
adoption of Statement of Financial Accounting Standards No. 128, which
replaces the method previously used to compute earnings per share with
basic and diluted earnings per share. The 1.5 million warrants for the
purchase of the Company's Common Stock, at an exercise price equal to
$25 per share with a term of five years following issuance, issued in
conjunction with the transaction are anti-dilutive for the fiscal year
ended May 3, 1997, and the thirty-six week period ended January 10,
1998, and are not included in the weighted average shares
outstanding-assuming dilution.
9. The portion of the Company's cash balance assumed to be used to pay a
portion of the purchase price (see note 13).
10. Elimination of accounts receivable and payable between the Company and
Farm Fresh.
11. Elimination of inventory, capital lease assets and capital lease
obligations related to certain Farm Fresh stores not purchased as part
of the transaction.
12. Adjustment to record inventory at its estimated fair value and to
eliminate Richfood profit in Farm Fresh inventory of approximately
$1,276.
13. Preliminary estimate of the excess of the purchase price over the fair
value of net assets acquired (goodwill). For purposes of these Pro
Forma Combined Condensed Financial Statements, the purchase price was
allocated as follows:
<TABLE>
<S> <C>
Cash portion of purchase price (subject to working capital adjustment) $ 221,659
Estimated fair value of capital leases assumed 47,182
Estimated fair value of 1.5 million warrants 14,415
---------
Total estimated purchase price (subject to working capital adjustment) 283,256
Estimated fair value of working capital acquired (17,479)
Estimated fair value of property, plant and equipment (100,357)
Estimated fair value of other assets assumed (1,991)
Estimated fair value of other liabilities assumed 5,540
---------
Goodwill $ 168,969
=========
</TABLE>
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<PAGE>
14. Elimination of Farm Fresh's historical goodwill and other assets not
acquired in the transaction.
15. Elimination of amounts relating to the historical supply agreement
between the Company and Farm Fresh.
16. Elimination of Farm Fresh's indebtedness for borrowed money not assumed
in the transaction.
17. Elimination of Farm Fresh's liability for closed stores not assumed in
the transaction.
18. Elimination of Farm Fresh's liability for accrued interest on
indebtedness for borrowed money.
19. Borrowings under the Revolving Credit Facility to finance the cash
portion of the purchase price at an assumed interest rate of
approximately 6.0%. A 1/8% change in the assumed interest rate would
result in a $141 and $99 adjustment to earnings from continuing
operations for the fifty-three weeks ended May 3, 1997 and the
thirty-six weeks ended January 10, 1998, respectively.
20. Elimination of Farm Fresh historical amounts for common stock and
associated accumulated deficit.
21. Estimated fair value of the 1.5 million warrants to be issued in
conjunction with the transaction (see notes 8 and 13).
22. Adjustment to record property and equipment at its estimated fair
value.
23. Adjustment to record accrued expenses at estimated fair value, accrue
estimated transaction costs and recognize incremental acquisition
related liabilities.
24. Adjustment to record acquired capital lease obligations at estimated
fair value.
25. Adjustment to record unfavorable operating leases.
26. Adjustment to record deferred income taxes associated with temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes.
10
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SIGNATURE
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.
RICHFOOD HOLDINGS, INC.
Date: May 18, 1998 By: /s/ John C. Belknap
-----------------------
John C. Belknap
Executive Vice President,
Chief Financial Officer and
Secretary
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