<PAGE> 1
As Filed with the Securities and Exchange Commission on July 12, 1999
Registration No. 333-45811
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
Amendment No. 1
to
POST-EFFECTIVE AMENDMENT NO. 1 ON
FORM S-3
TO
REGISTRATION STATEMENT ON FORM S-1
UNDER THE
SECURITIES ACT OF 1933
----------------------------
Advantica Restaurant Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3487402
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
203 East Main Street
Spartanburg, South Carolina 29319-9966
(864) 597-8000
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
----------------------------
Rhonda J. Parish, Esq.
Executive Vice President and General Counsel
Advantica Restaurant Group, Inc.
203 East Main Street
Spartanburg, South Carolina 29319-9966
(864) 597-8000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
------------------------------
Copy to:
Gary C. Ivey, Esq.
Parker, Poe, Adams & Bernstein L.L.P.
2500 Charlotte Plaza
Charlotte, North Carolina 28244
(704) 372-9000
-------------------------------
Approximate date of commencement of proposed sale of the
securities to the public: From time to time after this
Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
9,301,820 Shares
of
Advantica Restaurant Group, Inc.
Common Stock
The selling security holder who is identified in this Prospectus may
offer and sell all of the shares of Common Stock of Advantica Restaurant Group,
Inc. that are offered hereby from time to time. The Company previously issued
shares under a Chapter 11 Joint Plan of Reorganization of the Company's
predecessors, Flagstar Companies, Inc. and Flagstar Corporation. That Plan of
Reorganization and the issuance of these shares became effective on January 7,
1998. The Company will not receive any proceeds from the sale of these shares
and does not know when the proposed sale of the shares by the selling security
holder will occur.
The Common Stock is currently listed for trading as a NASDAQ National
Market security on The NASDAQ Stock Market(R) under the trading symbol "DINE."
The closing NASDAQ sale price of the Common Stock on June 30, 1999 was $3-7/16
per share. You are urged to obtain current market data.
The selling security holder, directly, through agents designated from
time to time, or through dealers or underwriters to be designated, may sell some
or all of the Common Stock from time to time on terms determined at the time the
Common Stock is sold. To the extent required, we will issue a prospectus
supplement and/or post-effective amendment to the Registration Statement of
which this Prospectus is a part to explain the terms of the sales by the selling
security holder.
See "Risk Factors" beginning on page 3 for a discussion of certain
risks you should consider before purchasing any of the shares being offered.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
You should rely only on the information contained in this Prospectus or
to which we have referred you. We have not authorized anyone to provide you with
information that is different. This Prospectus is not an offer to sell the
shares and is not soliciting an offer to buy the shares in any state where the
offer or sale is not permitted. You should not assume that the information in
this Prospectus or any of its supplements is accurate as of any date other than
the date on the front of these documents.
The date of this Prospectus is July 12, 1999.
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WHERE YOU CAN FIND MORE INFORMATION ABOUT THE COMPANY
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. Such reports and
information relate to our business, financial condition and other matters. You
may read and copy these reports, proxy statements and other information at the
Commission's Public Reference Room at its principal office located at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at 7 World Trade Center, Suite 1300, New York, New York
10048, and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
You may obtain information in the operation of the Commission's Public Reference
Room in Washington, D.C. by calling the Commission at 1-800-SEC-0330. Copies may
be obtained from the Commission upon payment of the prescribed fees. The
Commission maintains an Internet Web site that contains reports, proxy and
information statements and other information regarding the Company and other
registrants that file electronically with the Commission. The address of that
site is http://www.sec.gov.
The Commission allows us to "incorporate by reference" the information
we file with them. This means that we can disclose important information to you
by referring to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and information that we file later
with the Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, until the selling security holder sells all of the shares
offered hereby or until we decide to terminate this offering earlier:
1. The Company's Annual Report on Form 10-K for its fiscal year
ended December 30, 1998.
2. The Company's Quarterly Report on Form 10-Q for its fiscal
quarter ended March 31, 1999.
3. The Company's Proxy Statement dated April 5, 1999 with respect
to its May 19, 1999 Annual Meeting of Stockholders, portions
of which have been incorporated by reference into the
Company's 1998 Annual Report on Form 10-K.
4. The Company's Registration Statement on Form 8-A dated January
7, 1998, registering its Common Stock.
5. The description of the Company's Common Stock, which is
contained in its Restated Certificate of Incorporation and
Bylaws (which were filed as Exhibits 3.1 and 3.2,
respectively, to the Company's Registration Statement on Form
8-A dated January 7, 1998, registering its Common Stock).
We will provide without charge to each person to whom this Prospectus
is delivered, upon their written or oral request, a copy of any and all
documents incorporated by reference in this Prospectus (excluding exhibits to
such documents unless such exhibits are specifically incorporated by reference).
Written or telephone requests should be directed to Rhonda J. Parish, Executive
Vice President and General Counsel, 203 East Main Street, Spartanburg, South
Carolina 29319; telephone (864) 597-8000.
This Prospectus is a part of our Post-Effective Amendment No. 1 on Form
S-3 to our previously effective Registration Statement on Form S-1 (Registration
No. 333-45811) filed with the Commission. This Prospectus does not contain all
of the information set forth in the Registration Statement (including the
post-effective amendment) and the exhibits thereto. Statements about the
contents of contracts or other documents contained in this Prospectus or in any
other filing to which we refer you are not necessarily complete. You should
review the actual copy of such documents filed as exhibits to the Registration
Statement (including the post-effective amendment) or such other filing. Copies
of the Registration Statement (including the post-effective amendment) and these
exhibits may be obtained from the Commission as indicated above upon payment of
the fees prescribed by the Commission.
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
The forward-looking statements included in the "Risk Factors" section
and other sections in this Prospectus, together with forward-looking statements
in our other documents that have been incorporated by reference into this
Prospectus, reflect management's best judgment based on factors currently known,
but do involve risk and uncertainties. Words such as "expects", "anticipates",
"believes", "intends", and "hopes", variations of such words and similar
expressions are intended to identify these forward-looking statements. Actual
results could differ materially from those anticipated in these forward-looking
statements as a result of a number of factors which include but are not limited
to the factors discussed in those sections and those set forth in cautionary
statements contained in Exhibit 99 to this Post-Effective Amendment No. 1. We
are providing this forward-looking information pursuant to the safe harbor
established under the Private Securities Litigation Reform Act of 1995 which
should be evaluated in the context of these factors.
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THE COMPANY
The Company, through its wholly-owned subsidiaries, is one of the
largest restaurant companies in the United States, operating (directly and
through franchisees) approximately 2,600 moderately priced restaurants at
March 31, 1999. Advantica's operations are conducted through four restaurant
chains or concepts, three chains in the full-service mid-scale dining segment
and one in the quick-service segment. Although operating in two distinct
segments of the restaurant industry -- full-service and quick-service -- the
Company's restaurants benefit from a single management strategy that emphasizes
superior value and quality, friendly and attentive service and appealing
facilities.
Denny's, the Company's largest concept, is the nation's largest chain
of family-style full-service restaurants, with 1,752 units in 49 states, two
U.S. territories and three foreign countries. Denny's largest concentration is
in California and Florida, with more than 550 units in these two states. We
believe that Denny's has the leading share of the national market in the
family-style category. El Pollo Loco is a chain of 267 quick-service restaurants
featuring flame-broiled chicken and related Mexican food items. Coco's is a
regional bakery restaurant chain with 481 units in seven western states and
three foreign countries, offering a wide variety of fresh-baked goods and value
priced meals that capitalize on emerging food trends in the western United
States. The Carrows chain, consisting of 148 units in seven western states,
specializes in traditional American food, with emphasis on quality, homestyle
fare at an excellent value.
Our principal executive offices are located at 203 East Main Street,
Spartanburg, South Carolina 29319-9966; telephone (864) 597-8000.
RISK FACTORS
You should carefully consider and evaluate all of the information in
this Prospectus, including the risk factors set forth below, before investing in
the shares being offered.
We Continue to Be Highly Leveraged
Although consummation of our Chapter 11 Plan of Reorganization as of
January 7, 1998 significantly reduced our debt obligations, we still have
substantial indebtedness and debt service requirements, in absolute terms and in
relation to shareholders' equity. At December 30, 1998, the Company's aggregate
indebtedness totaled approximately $1,203.7 million and shareholders' equity was
$236.0 million. For a more detailed description of our Chapter 11 Plan of
Reorganization, see Note 1 to our 1998 audited financial statements incorporated
in this Prospectus by reference to our Annual Report on Form 10-K for our fiscal
year ended December 30, 1998.
Our highly leveraged position may limit our ability to obtain
additional financing in the future on acceptable terms and conditions. A
substantial portion of our cash flow from operations must be dedicated to the
payment of interest and principal on outstanding debt. The agreements governing
that debt impose significant operating and financial restrictions on us. We will
be required to refinance certain mortgage financings currently having an
outstanding principal amount of $160 million, scheduled to mature in the year
2000. Our highly leveraged position may limit our ability to do so on acceptable
terms.
Subject to the successful refinancing of the mortgage financings noted
above, we believe, based on our forecasts, that we will have sufficient
operating cash flow from operations (together with funds available under
existing credit facilities) to pay interest and scheduled amortization on all of
our outstanding indebtedness and to fund anticipated capital expenditures
through 2000. Our ability to meet our debt service obligations will depend on a
number of factors, including our ability to maintain operating cash flow, and we
cannot be sure that targeted levels of operating cash flow will actually be
achieved. Our ability to maintain or increase operating cash flow will depend
upon consumer tastes, the success of our marketing initiatives and other efforts
to increase customer traffic in our restaurants, our success in obtaining
advantageous commercial real estate sites suitable for restaurants, prevailing
economic conditions and other factors, many of which are beyond our control.
The Restaurant Business Is Highly Competitive
The restaurant business generally is highly competitive and the
competition can be expected to increase. Price, restaurant location, food
quality, quality and speed of service and attractiveness of facilities are
important aspects of competition as are the effectiveness of marketing and
advertising programs. The competitive environment is also often affected by
factors beyond our control. Our restaurants compete with a wide variety of
restaurants ranging from national and regional restaurant chains, some of which
have substantially greater financial resources than we do, to locally-owned
restaurants. There is also active competition for advantageous commercial real
estate sites suitable for restaurants.
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We May Need Additional Capital to Implement Our Operating Strategies and Compete
Successfully
Our businesses are expected to have substantial capital expenditure
needs. We cannot be sure of our ability to gain access to additional capital, if
needed, particularly in view of our continuing highly leveraged condition, our
recent emergence from Bankruptcy Court protection, competitive factors and
industry conditions.
We Are Subject to Significant Restrictions on Our Ability to Pay Dividends
We have never paid dividends on our common equity securities.
Furthermore, restrictions on both the Company and its subsidiaries contained in
the instruments governing our outstanding indebtedness restrict our ability to
pay dividends on the Common Stock in the future.
Our Historical Financial Information for Periods Since We Emerged from
Bankruptcy Is Not Comparable to Financial Information for Periods Prior to Our
Bankruptcy
As a result of the consummation of our Plan of Reorganization and
related transactions, the Company's financial condition and results of
operations from and after January 7, 1998, as reflected in the documents
referred to above which have been incorporated by reference into this
Prospectus, are not comparable to the financial condition or results of
operations reflected in the historical financial statements of the Company's
predecessors also contained in those documents.
Our Business Operations and Performance Are Subject to Seasonal Variations
Our business is moderately seasonal. Restaurant sales are generally
greater in the second and third calendar quarters -- April through September --
than in the first and fourth calendar quarters -- October through March.
Occupancy and other operating costs, which remain relatively constant, have a
disproportionately greater negative effect on operating results during quarters
with lower restaurant sales.
Our Success May Be Dependent on the Continued Employment of Our Senior
Management Team
One of our primary assets, particularly following our emergence from
bankruptcy, is the group of highly skilled professionals that comprise our
senior management team and who have the ability to leave the Company and so
deprive us of valuable skills and knowledge that increase the profitability of
our business operations. Although we have taken steps to retain our key
management personnel, we cannot be sure that we will ultimately be able to do so
and, if not, that we will be able to replace such personnel and achieve
comparable results.
Our Operations Are Significantly Affected by General Economic, Market and Other
Conditions
Food service businesses are often affected by changes in consumer
tastes, national, regional and local economic conditions and demographic trends.
The performance of individual restaurants may be adversely affected by factors
such as traffic patterns, demographic considerations and the type, number and
location of competing restaurants. Multi-unit food service chains such as ours
can also be adversely affected by publicity resulting from food quality,
illness, injury or other health concerns or operating issues stemming from one
restaurant or a limited number of restaurants. Dependence on frequent deliveries
of fresh produce and groceries subjects food service businesses to the risk that
shortages or interruptions in supply, caused by adverse weather or other
conditions, could adversely affect the availability, quality and cost of
ingredients. In addition, unfavorable trends or developments concerning factors
such as inflation, increased food, labor and employee benefit costs (including
increases in hourly wage and minimum unemployment tax rates), regional weather
conditions and the availability of experienced management and hourly employees
may also adversely affect the food service industry in general and our results
of operations and financial condition in particular.
The Success of Our Restaurants Depends on the Continuing Quality of Our
Restaurant Locations
The success of our Company-owned and franchised restaurants is
significantly influenced by location. We cannot be sure that current locations
will continue to be attractive as demographic patterns change. It is possible
the neighborhood or economic conditions where restaurants are located could
decline in the future, resulting in potentially reduced sales in those
locations.
Our Operations Are Subject to Significant Government Regulations
The Company and its franchisees are subject to federal, state and local
laws and regulations governing health, sanitation, environmental matters,
safety, the sale of alcoholic beverages and hiring and employment practices.
Restaurant operations are also subject to federal and state laws that prohibit
discrimination and laws regulating the design and operation of facilities, such
as the
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Americans with Disabilities Act of 1990. The operation of our franchisee system
is also subject to regulations enacted by a number of states and rules
promulgated by the Federal Trade Commission. We cannot predict the effect on our
operations, particularly on our relationship with franchisees, caused by the
future enactment of additional legislation regulating the franchise
relationship.
The Company's Common Stock Is Thinly Traded
The Common Stock, originally issued as of January 7, 1998, the
effective date of our Chapter 11 Plan of Reorganization, is listed for trading
as a NASDAQ National Market security on The NASDAQ Stock Market(R) under the
trading symbol "DINE." While the NASDAQ listing generally facilitates the
trading of the Common Stock, the Common Stock is somewhat thinly traded as
compared with other NASDAQ National Market companies, and we cannot be sure that
an active trading market will be sustained. In addition, we cannot be sure about
the degree of price volatility in the market for the Common Stock from time to
time. Accordingly, you cannot be sure that you will be able to sell your Common
Stock in the future or as to the price at which any sale may occur. The price at
which the Common Stock may trade from time to time will depend upon many
factors, including prevailing interest rates, markets for similar securities,
industry conditions, and the performance of, and investor expectations for, the
Company.
A Significant Portion of Our Software Applications Need to Be Modified for Year
2000 Compliance
We recognize the need to ensure that our operations will not be
adversely affected by Year 2000 software failures and have completed an
assessment of our operations in this regard. As a result of that assessment, we
determined that a significant portion of our software applications needed to be
modified or replaced so that our systems will properly utilize dates beyond
December 31, 1999. For the most part, we have replaced or are in the process of
replacing existing systems and will have spent approximately $20 million in 1999
addressing our information systems issues, excluding the costs associated with
the potential impact of the Year 2000 issue on third parties. Systems that are
critical to our operations are targeted to be Year 2000 compliant by the summer
of 1999.
The nature of our business makes us very dependent on critical
suppliers and service providers, and the failure of such third parties to
adequately address the Year 2000 issue could have a material impact on our
ability to conduct business. We are in the process of making inquiries to all
third parties on which we depend. We cannot be sure, however, that the systems
of other companies on which we rely will be timely converted, or that a failure
to convert by another company would not have a material adverse effect on our
operations.
We believe, based on available information, that we will be able
to manage our Year 2000 transition without any material adverse effect on our
business operations. As the Year 2000 project progresses, we will establish
contingency plans addressing business critical processes for operations and
other critical corporate functions. However, the costs of the project and our
ability to complete the Year 2000 transition on a timely basis are based on our
best estimates, which were derived based on numerous assumptions of future
events including the availability of certain resources, third party modification
plans and other factors. As a result, we cannot be sure that these
forward-looking estimates will be achieved. Actual results may differ materially
from those plans, resulting in material financial risk to the Company.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares of
Common Stock offered hereby, all of which will be received by the selling
security holder.
SELLING SECURITY HOLDER
When its Plan of Reorganization became effective on January 7,
1998, the Company entered into a Registration Rights Agreement with the selling
security holder. It entered into this agreement with the selling security holder
because the selling security holder was then the only holder having more than
10% of the Common Stock and because under current law, the selling security
holder would be unable freely to resell its shares without an effective
registration statement covering those resales. The Company, therefore, agreed to
file and use its best efforts to cause to become effective the previously filed
shelf Registration Statement, which has been amended by the Post-Effective
Amendment No. 1 thereto of which this Prospectus is a part, covering resales by
the selling security holder from time to time, and use its best efforts to cause
this Registration Statement to remain effective until January 7, 2001 (or until
January 7, 2003 if the Company is entitled to use a registration statement on
Form S-3 under the Securities Act). In addition, the selling security holder may
make three written demands on the Company for registration under the Securities
Act of all or a part of the Common Stock issued to it pursuant to the Plan of
Reorganization, and may make unlimited demands for registrations so long as such
registrations may be effected on Form S-3 registration statements. In addition,
the selling security holder has customary "piggyback" registration rights to
include its shares of Common Stock, subject to certain limitations, in other
registration statements filed by the Company under the Securities Act.
The obligations of the Company to effect and maintain the
effectiveness of any registration required by this Registration Rights Agreement
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terminate upon the earliest of (a) the sale of all shares of the Common Stock
subject to the Registration Rights Agreement that are held by the selling
security holder; (b) upon notice from the selling security holder that it no
longer needs the benefits of the Registration Rights Agreement; and (c) when the
selling security holder owns or holds (on a fully-diluted basis) less than 10%
of the shares of Common Stock then outstanding (on a fully-diluted basis) and
the Company has delivered to the selling security holder an opinion of
recognized securities counsel to the effect that the Common Stock held by it may
be freely resold by it without registration and without restriction or
limitation under the Securities Act.
The following table sets forth certain information with respect to
the Common Stock held by the selling security holder. The selling security
holder originally received the 9,301,820 shares offered hereunder as a
distribution under the Company's Chapter 11 Plan of Reorganization in respect of
approximately $206,771,000 in principal amount of debt securities of a Company
predecessor that were previously owned by the selling security holder on behalf
of certain investment advisory accounts managed by the selling security holder
prior to consummation of the Plan of Reorganization. In addition, the selling
security holder owned shares of the preferred stock of a Company predecessor on
behalf of its managed accounts prior to consummation of the Plan of
Reorganization, and received no distribution in respect thereof. The obligations
of the Company in respect of these debt securities and shares of preferred stock
were discharged upon the consummation of the Plan of Reorganization. Other than
the ownership of these securities and certain of the Company's 11 1/4% Senior
Notes and except as otherwise noted elsewhere in this Prospectus or in the
previously filed Registration Statement, the selling security holder has not
held any position, office, or other material relationship with the Company or
any of its predecessors or affiliates within the past three years other than as
a result of the ownership of the Common Stock. The Common Stock may be offered
from time to time by the selling security holder named below:
Number of Shares
Owned and Registered
Selling Security Holder Hereunder
- ----------------------- --------------------
Loomis Sayles & Company, L.P. (1).. 9,301,820
One Financial Center
Boston, MA 02111
(1) According to its latest Schedule 13D filing, Loomis Sayles & Company, L.P.
is an investment adviser to certain managed accounts, each of which is entitled
to the pecuniary interest (including, without limitation, the sole right to
receive dividends, proceeds and profits from sale) in the Common Stock being
sold which are allocated to these accounts. According to that Schedule 13D, (i)
as investment adviser to these accounts, Loomis retains the right to dispose of,
and either retains or shares with the accounts the right to vote, such shares of
Common Stock, and (ii) no account holds more than 5% of the outstanding shares
of Common Stock.
(2) Loomis Sayles & Company, L.P. reported to the Company that it and certain
related entities held 8,769,027 shares of Common Stock as of July 8, 1999.
Because the selling security holder may sell all, some or none of the
shares of Common Stock to be sold hereunder from time to time, the number of
shares and percentage of the class held by the selling security holder after the
offering cannot be determined at this time.
PLAN OF DISTRIBUTION
The shares of Common Stock registered hereunder may be sold from time
to time to purchasers in privately negotiated transactions or in open market
transactions. The selling security holder may from time to time offer the shares
directly or through underwriters, brokers, dealers or agents, pursuant to (a) a
block trade in which a broker or dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction; (b) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; or (c)
ordinary brokerage transactions and transactions in which the broker or dealer
solicits purchasers. In effecting such sales, underwriters, brokers or dealers
engaged by the selling security holder may arrange for other brokers or dealers
to participate in the resales. Such sales may be effected at market prices and
on terms prevailing at the time of sale, at prices related to market prices, at
negotiated prices or at fixed prices. In addition, the selling security holder
may engage in hedging or other similar transactions, and may pledge the shares
being offered, and, upon default, the pledgee may effect sales of the pledged
shares pursuant to this Prospectus. In connection with any hedging transactions,
broker-dealers may engage in short sales of the shares registered hereunder in
the course of hedging the positions they assume with the selling security
holder. The selling security holder may also sell Common Stock short and
redeliver the shares to close out such short positions. The selling security
holder may also enter into option or other transactions with broker-dealers
which require the delivery to the broker-dealer of the shares registered
hereunder. Underwriters, brokers, dealers and agents may receive compensation in
the form of underwriting discounts, concessions or commissions from the selling
security holder or the purchasers of shares for whom they may act as agent.
The selling security holder and any underwriters, dealers or agents
that participate in any distribution of shares may be deemed to be
"underwriters" within the meaning of the Securities Act and any profit on the
sale of shares by them and any discounts,
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commissions or concessions received by any such underwriters, dealers or agents
might be deemed to be underwriting discounts and commissions under the
Securities Act.
At the time a particular offering of shares is made, a prospectus
supplement or a post-effective amendment to the Registration Statement which has
been amended by the Post-Effective Amendment No. 1 thereto of which this
Prospectus is a part, if required, will be distributed which will set forth the
number of shares being offered and the terms of the offering, including the name
or names of any underwriters, dealers or agents, any discounts, commissions and
other terms constituting compensation from the selling security holder and any
discounts, commissions or concessions allowed or reallowed or paid to dealers.
The selling security holder may or may not sell any of the shares. In
addition, the selling security holder may sell any shares covered by this
Prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
or Section 1145 of the Bankruptcy Code pursuant to Rule 144 or Section 1145
rather than pursuant to this Prospectus.
The Common Stock is currently listed for trading as a NASDAQ National
Market security on The NASDAQ Stock Market(R), and its trading symbol is "DINE."
There can be no assurance that an active trading market will be sustained for
the Common Stock.
The Company agreed to pay all expenses in connection with the
performance of the obligations to effect the shelf, demand and piggyback
registrations under the Securities Act of the Common Stock covered by the
Registration Rights Agreement, other than (a) underwriting fees, discounts,
commissions or other similar selling expenses attributable to the sale of Common
Stock under the Registration Rights Agreement; and (b) any expenses (other than
internal expenses of its own officers and employees) in connection with any
additional demand registration on Form S-3 after the three designated demand
registrations. The Company agreed to indemnify and hold harmless, to the fullest
extent permitted by law, the selling security holder against certain securities
law liabilities (including, under certain circumstances, liabilities unrelated
to the participation of the selling security holder in a registered offering or
sale of the Common Stock) and, in lieu thereof, to contribute to payments
required to be made by such selling security holder.
MATERIAL CHANGES
No material changes in the Company's affairs have occurred since the
end of the latest fiscal year for which certified financial statements were
included in the latest annual report to security holders which have not been
described in a subsequent report on Form 10-Q under the Securities Exchange Act
of 1934, except as follows:
-- On May 14, 1999, FRD Acquisition Co., a wholly owned
subsidiary of the Company, and certain of its operating
subsidiaries entered into a new credit agreement with The
Chase Manhattan Bank and Credit Lyonnais New York Branch and
other lenders named therein establishing a $70 million senior
secured credit facility to replace the bank facility
previously in effect for the Company's Coco's and Carrows
operations. That prior facility had been scheduled to mature
in August 1999. The new facility, which is guaranteed by the
Company, consists of a $30 million term loan and a $40 million
revolving credit facility and matures in May 2003.
-- On June 7, 1999, the Company announced that it had retained
the investment banking firm of Donaldson, Lufkin & Jenrette to
explore the possible sale of El Pollo Loco, the Company's only
quick-service restaurant brand. This is consistent with our
overall strategy to focus on our family dining portfolio,
which is our core business.
LEGAL MATTERS
Certain legal matters in connection with the Common Stock offered
hereby will be passed upon for the Company by Parker, Poe, Adams & Bernstein
L.L.P., 2500 Charlotte Plaza, Charlotte, North Carolina 28244.
EXPERTS
The consolidated balance sheets as of December 31, 1997 and December
30, 1998 and the statements of consolidated operations and cash flows for the
years ended December 31, 1996 and 1997, the one week period ended January
7, 1998 and the 51 week period ended December 30, 1998 of Advantica Restaurant
Group, Inc. incorporated by reference into this Prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report appearing
therein, and have been so incorporated herein in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.
7
<PAGE> 9
You should rely only on the information contained in this document or that we
have referred you to. We have not authorized anyone to provide you with
information that is different. This Prospectus is not an offer to sell Common
Stock and it is not soliciting an offer to buy Common Stock in any state where
the offer or sale is not permitted. The delivery of this Prospectus at any time
does not imply that the information contained herein is correct as of any time
subsequent to its date.
------------
TABLE OF CONTENTS
Page
Where You Can Find More Information about
the Company.......................................... 2
Cautionary Notice Regarding Forward-Looking
Statements........................................... 2
The Company.............................................. 3
Risk Factors............................................. 3
Use of Proceeds.......................................... 5
Selling Security Holder.................................. 5
Plan of Distribution..................................... 6
Material Changes......................................... 7
Legal Matters............................................ 7
Experts.................................................. 7
Advantica Restaurant
Group, Inc.
9,301,820 Shares
of
Common Stock
------------
PROSPECTUS
------------
July 12, 1999
<PAGE> 10
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth an estimate of the expenses that will be
incurred by the registrant in connection with the distribution of the securities
being registered hereby:
SEC registration fee................$ -0-
Legal fees and expenses............. 10,000
Accounting fees and expenses........ 10,000
Printing costs...................... 5,000
Miscellaneous....................... 10,000
Total...............................$35,000
Item 15. Indemnification and Limitation of Liability of Directors and Officers.
The Company's Bylaws effectively provide that the Company shall, to the
full extent permitted by Section 145 of the General Corporation Law of the State
of Delaware, as amended from time to time ("Section 145"), indemnify all persons
whom it may indemnify pursuant thereto. In addition, the Company's Restated
Certificate of Incorporation eliminates personal liability of its directors to
the full extent permitted by Section 102(b)(7) of the General Corporation Law of
the State of Delaware, as amended from time to time ("Section 102(b)(7)").
Section 145 permits a corporation to indemnify its directors and
officers against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by them in
connection with such action, suit or proceeding brought by a third party if such
officer, director, employee or agent acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best interests
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe that his conduct was unlawful. In a derivative action,
indemnification may be made only for expenses actually and reasonably incurred
by directors and officers in connection with the defense or settlement of an
action or suit and only with respect to a matter as to which they shall have
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interest of the corporation, except that no indemnification
shall be made if such person shall have been adjudged liable to the corporation,
unless and only to the extent that the court in which the action or suit was
brought shall determine upon application that the defendant officers or
directors are reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Section 102(b)(7) provided that a corporation may eliminate or limit
the personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of the law, (iii) for willful or negligent
conduct in paying dividends or repurchasing stock out of other than lawfully
available funds or (iv) for any transaction from which the director derived an
improper personal benefit. No provision shall eliminate or limit the liability
of a director for any act or omission occurring prior to the date when such
provision becomes effective.
Item 16. Exhibits.
The Exhibits to this Post-Effective Amendment No.1 are listed in the
Exhibit Index attached hereto.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions in Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than payment by the
registrant of expenses incurred or paid by a director or officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in such Act and will
be governed by the final adjudication of such issue.
II-1
<PAGE> 11
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the Plan of
Distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Spartanburg, State of South Carolina,
on July 12, 1999.
ADVANTICA RESTAURANT GROUP, INC.
By: /s/ RHONDA J. PARISH
-----------------------------------------
Rhonda J. Parish
Executive Vice President, General Counsel
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Director, Chairman, President and Chief July 12, 1999
- -------------------------------------------------- Executive Officer
(James B. Adamson) (Principal Executive Officer)
/s/ RONALD B. HUTCHISON Executive Vice President and Chief July 12, 1999
- -------------------------------------------------- Financial Officer (Principal Financial
(Ronald B. Hutchison) Officer)
/s/ ANDREW F. GREEN Senior Vice President, Planning July 12, 1999
- -------------------------------------------------- and Corporate Controller
(Andrew F. Green) (Principal Accounting Officer)
* Director July 12, 1999
- --------------------------------------------------
(Ronald E. Blaylock)
* Director July 12, 1999
- --------------------------------------------------
(Vera King Farris)
* Director July 12, 1999
- --------------------------------------------------
(James J. Gaffney)
* Director July 12, 1999
- --------------------------------------------------
(Irwin N. Gold)
* Director July 12, 1999
- --------------------------------------------------
(Robert E. Marks)
* Director July 12, 1999
- --------------------------------------------------
(Charles F. Moran)
* Director July 12, 1999
- --------------------------------------------------
(Elizabeth A. Sanders)
* Director July 12, 1999
- --------------------------------------------------
(Donald R. Shepherd)
*By: /s/ RHONDA J. PARISH
- --------------------------------------------------
(Rhonda J. Parish)
(attorney-in-fact for each of the persons indicated)
</TABLE>
II-3
<PAGE> 13
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
*2.1 Joint Plan of Reorganization of Flagstar Companies, Inc.
("FCI") and Flagstar Corporation ("Flagstar"), the Company's
predecessors, as amended November 7, 1997 and as confirmed by
order of the United States Bankruptcy Court for the District
of South Carolina entered November 12, 1997 (incorporated by
reference to Exhibit 2.1 to FCI's Form 8-K, filed November 21,
1997).
**4.1 Specimen certificate of Common Stock of the Company.
*4.2 Registration Rights Agreement (incorporated by reference to
Exhibit 10.1 to the Company's Form 8-A with respect to the
Common Stock filed January 7, 1998).
*4.3 Indenture of Mortgage, Deed of Trust, Security Agreement,
Financing Statement, Fixture Filing, and Assignment of Leases
and Rents, from Denny's Realty, Inc. to State Street Bank and
Trust Company, dated July 12, 1990 (incorporated by reference
to Exhibit 4.9 to Post-Effective Amendment No. 1 to the
Registration Statement on Form S-1 (No. 33-29769) of FCI (the
"Form S-l Amendment")).
*4.4 Lease between Denny's Realty, Inc. and Denny's, Inc., dated as
of December 29, 1989, as amended and restated as of July 12,
1990 (incorporated by reference to Exhibit 4.10 to the
Form S-l Amendment).
*4.5 Indenture dated as of July 12, 1990 between Denny's Realty,
Inc. and State Street Bank and Trust Company relating to
certain mortgage notes (incorporated by reference to Exhibit
4.11 to the Form S-l Amendment).
*4.6 Mortgage Note in the amount of $10,000,000 of Denny's Realty,
Inc., dated as of July 12, 1990 (incorporated by reference to
Exhibit 4.15 to the Registration Statement on Form S-4 (No.
33-48923) of Flagstar (the "Form S-4")).
*4.7 Mortgage Note in the amount of $52,000,000 of Denny's Realty,
Inc., dated as of July 12, 1990 (incorporated by reference to
Exhibit 4.16 to the Form S-4).
*4.8 Mortgage Note in the amount of $98,000,000 of Denny's Realty,
Inc., dated as of July 12, 1990 (incorporated by reference to
Exhibit 4.17 to the Form S-4).
*4.9 Indenture between Secured Restaurants Trust and The Citizens
and Southern National Bank of South Carolina, dated as of
November 1, 1990, relating to certain secured bonds
(incorporated by reference to Exhibit 4.18 to the Form S-4).
*4.10 Amended and Restated Trust Agreement between Spartan Holdings,
Inc., as Depositor for Secured Restaurants Trust, and
Wilmington Trust Company, dated as of October 15, 1990
(incorporated by reference to Exhibit 3.3 to the Registration
Statement on Form S-11 (No. 33-36345) of Secured Restaurants
Trust).
*4.11 Indenture dated as of May 23, 1996 between FRD Acquisition Co
("FRD") and The Bank of New York, as Trustee (the "FRD
Indenture") (incorporated by reference to Exhibit 4.1 to the
Registration Statement on Forms S-1 and S-4 (No. 333-07601)
(the "FRD Form S-1/S-4") of FRD).
*4.12 Form of First Supplemental Indenture to the FRD Indenture
dated as of August 23, 1996 (incorporated by reference to
Exhibit 4.1.1 to the FRD Form S-l/S-4).
*4.13 Indenture relating to the Company's 11.25% Senior Notes due
2008 (including the form of security) dated as of January 7,
1998, between the Company and First Trust National
Association, as Trustee (incorporated by reference to Exhibit
4.1 to the Company's Form 8-K filed January 15, 1998).
*4.14 Warrant Agreement (including the form of Warrant)
(incorporated by reference to Exhibit 10.1 to the Company's
Form 8-A with respect to its Common Stock Warrants filed
January 7, 1998).
*4.15 Rights Agreement, dated as of December 15, 1998, between the
Company and Continental Stock Transfer and Trust Company, as
Rights Agent (including Form of Rights Certificate)
(incorporated by reference to Exhibit 1 to the Company's Form
8-A with respect to its Preferred Stock Purchase Rights filed
December 15, 1998).
**5.1 Opinion of Parker, Poe, Adams & Bernstein L.L.P.
regarding the legality of securities to be issued.
*12 Computation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12 to the Company's 1998
Form 10-K (the "1998 Form 10-K")).
**23.1 Consent of Parker, Poe, Adams & Bernstein L.L.P. (included in
Exhibit 5.1 hereto).
23.2 Consent of Deloitte & Touche.
**24.1 Power of Attorney (included on signature page of Registration
Statement as previously filed).
*99 Safe Harbor Under the Private Securities Litigation Reform Act
of 1995 (incorporated by reference to Exhibit 99 to the 1998
Form 10-K).
- -----------------
*Certain of the exhibits to this Post-Effective Amendment No. 1 on Form S-3,
indicated by an asterisk, are hereby incorporated by reference to other
documents on file with the Commission with which they are physically filed, to
be a part hereof as of their respective dates.
**Previously filed as a part of the Registration Statement on Form S-1
(Registration No. 33-45811) amended hereby.
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Post-Effective Amendment No. 1 on Form S-3 of Advantica Restaurant Group, Inc.
of our report dated February 16, 1999, appearing in the Annual Report on Form
10-K of Advantica Restaurant Group, Inc. for the year ended December 30, 1998.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ DELOITTE & TOUCHE LLP
Greenville, South Carolina
July 12, 1999
