<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report: February 7, 2000
(Date of earliest event reported)
Sizzler International, Inc.
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(Exact name of Registrant as specified in its charter)
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Delaware 1-10711 95-4307254
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<S> <C> <C>
(State of Incorporation) (Commission File No.) (IRS Employer
Identification Number)
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6101 West Centinela Avenue, Suite 200, Culver City, CA 90230
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(Address of principal executive offices, including zip code)
(310) 568-0135
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
The Registrant incorporates herein the text of two News Bulletins, one
issued on February 7, 2000 and the other issued on February 14, 2000, copies
of which are attached hereto as Exhibits 99.1 and 99.2, respectively.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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Exhibit No. Description
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99.1 News Bulletin dated February 7, 2000.
99.2 News Bulletin dated February 14, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunder duly authorized.
Sizzler International, Inc.
By: /s/ Steven R. Selcer
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Name: Steven R. Selcer
Title: Vice President and
Chief Financial Officer
Dated: February 16, 2000
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EXHIBIT 99.1
SIZZLER INTERNATIONAL, INC.
6101 W. Centinela Ave., Suite 200
Culver City, CA 90230
(310) 568-0135
NYSE:SZ
FOR FURTHER INFORMATION:
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AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
<S> <C> <C> <C>
Steven Selcer Paul Goodson Moira Conlon Marjorie Ornston
Vice President and CFO General Information Investor/Analyst Contact Media Contact
(310) 568-0135 (310) 442-0599 (310) 442-0599 (310) 442-0599
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FOR IMMEDIATE RELEASE
Monday, February 7, 2000
SIZZLER UPDATES STOCK REPURCHASE ACTIVITY
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706,700 shares repurchased to date of 1.5 million authorized
CULVER CITY, CA--February 7, 2000--Sizzler International, Inc. (NYSE: SZ) today
announced that it has completed the repurchase of approximately half of the 1.5
million shares of common stock it has been authorized to repurchase by its Board
of Directors. Between Sizzler's November 11, 1999 announcement that its Board
of Directors had authorized the repurchase of up to 1.5 million shares, and
Feburary 4, 2000, the company had bought 706,700 shares of its common stock, all
in open market transactions.
"We continue to believe that Sizzler's stock is significantly undervalued, both
in terms of financial performance as well as our growth potential. The growth
in our revenues and net income, as well as very favorable valuation ratios when
compared to our restaurant industry peers, result in the conclusion that
Sizzler's stock price is strongly undervalued. Since we are undervalued on both
growth and value measures, we believe Sizzler's stock should be attractive both
to growth and value investors alike, and we intend to lead the way by continuing
to increase our investment in the company's future." said Charles Boppell,
President and CEO of Sizzler International.
Subject to applicable law and other factors, the company expects to continue its
previously announced stock repurchase program. The program will be conducted
from time to time on the open market or in negotiated transactions. Sizzler
currently has approximately 28 million shares of common stock outstanding.
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About Sizzler
Sizzler International, Inc. operates, franchises or joint ventures 347 Sizzler
restaurants worldwide, in addition to the 101 KFC restaurants in Queensland,
Australia.
Certain statements contained in this document may be deemed to be forward-
looking statements under federal securities laws, and Sizzler intends that such
forward-looking statements be subject to the safe-harbor created thereby. Such
forward-looking statements include, but are not limited to (i) Sizzler's ability
to continue producing growth in its sales and earnings, and (ii) the execution
of any further share repurchases. Sizzler cautions that these statements are
qualified by important factors that could cause actual results to differ
materially from those reflected by the forward-looking statements contained
herein. Such factors include, but are not limited to, (a) exchange rate
fluctuations and other financial market changes that could affect Sizzler's
revenues and earnings; (b) the failure of Sizzler's newly remodeled stores
and/or new food offerings to offer a commercially acceptable dining experience;
(c) decisions by Sizzler's management team to suspend, temporarily or on a
permanent basis, the repurchase of the shares remaining in the original 1.5
million share authorization by Sizzler's Board of Directors, and (d) other risks
as detailed from time to time in Sizzler's SEC reports, including Quarterly
Reports on Form 10Q, Current Reports on Form 8-K, and Annual Reports on Form 10-
K.
For more information on Sizzler International, Inc. via facsimile at no cost,
simply call 1-800-PRO-INFO and dial client code "SZ."
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EXHIBIT 99.2
SIZZLER INTERNATIONAL, INC.
6101 W. Centinela Ave., Suite 200
Culver City, CA 90230
(310) 568-0135
NYSE:SZ
FOR FURTHER INFORMATION:
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AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
<S> <C> <C> <C>
Steven Selcer Paul Goodson Moira Conlon Marjorie Ornston
Vice President and CFO General Information Investor/Analyst Contact Media Contact
(310) 568-0135 (310) 442-0599 (310) 442-0599 (310) 442-0599
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FOR IMMEDIATE RELEASE
Monday, February 14, 2000
SIZZLER PREVIEWS QUARTER; GAINS IN SAME STORE SALES AND REVENUES; ANNOUNCES
ACCOUNTING ADJUSTMENTS
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HIGHLIGHTS:
. Gains expected in third quarter comparable store sales
. Third quarter revenues will increase in year-over-year comparisons
. Early success with remodeled stores
. Majority of Sale-Leaseback transactions to be completed this fiscal
year
. One-time charge to earnings will arise from the Sale-Leaseback; gains
to be deferred
. Income tax benefit relating to profitable operations to be recognized
in the amount of $5.9 million
. Final charge of $6.6 million will complete 1996 reorganization
accounting
CULVER CITY, CA--February 14, 2000--Sizzler International, Inc. (NYSE: SZ) today
announced certain preliminary operating results for the third quarter of fiscal
2000 as well as the outcome of a number of strategic moves undertaken to
position the company for continued growth. As a result of these actions and its
previously announced strategic growth plan, Sizzler anticipates achieving
additional positive results for the remainder of the year.
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Third Quarter Outlook
When Sizzler reports its third quarter earnings on March 8, 2000, the company
expects to announce increases in its U.S. Sizzler and Australian KFC comparable
store sales and guest counts. The increase in the U.S. Sizzler guest counts
represents the first increase reported in over two years. Similarly, the
company expects to report third quarter increases in revenues over fiscal 1999's
third quarter. These successes reflect Sizzler's ongoing emphasis on restaurant
operations including cost controls, positive customer response to the enhanced
food quality and cooking methods, and early success Sizzler has achieved with
its store remodeling program.
The company plans to continue with the implementation of its previously
announced strategic growth plan. Among the primary goals of this plan are the
remodeling and repositioning of domestic restaurants, which has yielded positive
results since its initiation in the Fall of 1999, the acquisition of a proven
restaurant concept, the expansion and repositioning of Asian stores, and the co-
branding of its Australian KFC restaurants.
As previously reported, the company has also completed the repurchase of
approximately half of the 1.5 million shares of common stock it has been
authorized to repurchase by its Board of Directors. Between Sizzler's November
11, 1999 announcement that its Board of Directors had authorized the repurchase
of up to 1.5 million shares, and February 4, 2000, the company had bought
706,700 shares of its common stock, all in open market transactions. Subject to
applicable law and other factors, the company expects to continue its previously
announced stock repurchase program.
1996 Chapter 11 Reorganization
The company also announced the final financial adjustments related to its 1996
Chapter 11 reorganization, including a $6.6 million charge to third quarter
earnings. The charge resulted from the completion of an extensive review of the
complex financial issues that resulted from the reorganization.
"As a new management team, we have devoted most of the last year to re-
positioning the company to achieve excellent results going forward. Part of
this task involved the closure of any open items remaining from the 1996 Chapter
11 reorganization," remarked Charles Boppell, President and CEO of Sizzler
International. "Operationally, we have not been affected by the reorganization
for quite some time. However, we recognized that certain financial matters
remained outstanding which required a thorough evaluation. After our extensive
review of the numerous claims filed during the reorganization and other related
costs, management believes that there will be no further financial costs or
impacts from the reorganization, and is therefore comfortable in finalizing the
reorganization accounting with this $6.6 million charge."
Following the filing of its Chapter 11 reorganization in 1996, Sizzler was
presented with claims from approximately 10,000 creditors. At that time, in
estimating the expected costs the company would incur from the reorganization,
the company evaluated the costs for claims, legal services, losses on property
sales, the write-down of balance sheet items, and other items. Sizzler
estimated the sum total of the reorganization and restructuring costs to be
$108.9 million, and took a reserve in that amount in consultation with its
outside advisors. Sizzler anticipates that all allowed claims of its creditors
will be paid in full plus interest.
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After an assessment of all of the costs associated with the reorganization,
Sizzler's management has determined that the original $108.9 million estimate
may be lower than the final expected cost by $6.6 million. As such, Sizzler
will recognize a $6.6 million charge against earnings on its third quarter 2000
income statement, which will be released March 8, 2000. Importantly, because
the final payment was made to the trustee in January 2000, the company does not
anticipate any further cash outlay. The company has now settled substantially
all of the original claims and does not anticipate any further charges relating
to the reorganization.
Sale-Leaseback Accounting
To date, Sizzler has closed sale-leaseback transactions for 43 of the 67 KFC and
Sizzler Australian restaurants included in the sale-leaseback program the
company announced in November 1999. Sizzler expects to close sale-leaseback
transactions for 16 properties during the fourth quarter of its fiscal 2000,
which will end on April 30, 2000. The company expects to realize approximately
US $34 million in cash once the sale-leaseback program is complete. Of this
amount, Sizzler has already received approximately US $25 million from the
transactions that have closed. The company will utilize the proceeds of the
sale-leaseback to finance the capital expenditures made as part of its strategic
growth plan, including the aforementioned restaurant remodeling and
repositioning.
The sale-leaseback transactions are being conducted on a property-by-property
basis. Overall, the transactions are expected to generate a net gain of
approximately US $3.3 million. Those that are sold for more than the book value
are expected to produce a net gain of approximately US $8.8 million. Those that
are sold at less than the book value are expected to generate a net loss of
approximately US $5.5 million.
The company is required under Generally Accepted Accounting Principles to
recognize all losses immediately and defer any gains over the life of the
leases. As such, the company expects to make a non-cash charge of $5.5 million
in its third quarter earnings and defer the $8.8 million gain over the life of
the leases, which average 8 years. The net effect of the sale-leasebacks is
expected to affect Sizzler's fiscal 2001 earnings by less than $0.01 per share.
The company does not anticipate the recognition of any further losses in
connection with the anticipated sale-leaseback of its Australian properties.
"Although the accounting treatment of our Australian sale-leaseback transactions
forces us to record a non-cash charge and defer our gains, we remain convinced
that this event will create a significant amount of shareholder value, and give
us the primary financial means for implementing our growth strategy, " commented
Steven Selcer, Sizzler's CFO.
Income Tax Benefit
A net operating loss (NOL) carry-forward of approximately $134 million is
available to Sizzler to offset future taxable earnings for purposes of reducing
the company's income tax payments. However, the benefit of this NOL could not
be recognized until Sizzler demonstrated that it was "more likely than not"
capable of realizing the benefits through profitable operations. As a result of
Sizzler's 12 consecutive quarters of profitability, as well as the $8.8 million
of deferred gain to be recognized from
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the sale-leasebacks, the company believes that it has sufficiently demonstrated
that it is "more likely than not" capable of recognizing a benefit from the NOL.
Accordingly, Sizzler will record an income tax benefit on its third quarter 2000
income statement amounting to $5.9 million.
About Sizzler
Sizzler International, Inc. operates, franchises or joint ventures 347 Sizzler
restaurants worldwide, in addition to the 101 KFC restaurants in Queensland,
Australia.
Certain statements contained in this document may be deemed to be forward-
looking statements under federal securities laws, and Sizzler intends that such
forward-looking statements be subject to the safe-harbor created thereby. Such
forward-looking statements include, but are not limited to (i) Sizzler's ability
to close additional sale-leaseback transactions, (ii) the gain or loss to be
realized from such sale-leaseback transactions, (iii) the company's ability to
continue its record of profitable quarters, and (iv) Sizzler's ability to create
shareholder value through the execution of its strategy. Sizzler cautions that
these statements are qualified by important factors that could cause actual
results to differ materially from those reflected by the forward-looking
statements contained herein. Such factors include, but are not limited to, (a)
the market for the company's properties, which may affect the values realized in
the sale-leaseback transactions or the closing of such transactions; (b) the
ability of Sizzler's management or advisors to estimate the remaining costs
associated with the Chapter 11 reorganization or to accurately gauge the tax or
other financial outcome of the sale-leaseback transactions; (c) the failure of
Sizzler's newly remodeled stores and/or new food offerings to continue to appeal
to customers; (d) other risks as detailed from time to time in Sizzler's SEC
reports, including Quarterly Reports on Form 10Q, Current Reports on Form 8-K,
and Annual Reports on Form 10-K.
For more information on Sizzler International, Inc. via facsimile at no cost,
simply call 1-800-PRO-INFO and dial client code "SZ."
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