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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 9, 1999
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CHECKERS DRIVE-IN RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-19649 58-1654960
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
14255 49th Street North, Building I, Clearwater, Florida 33762
(Address of Principal Executive Offices) (Zip Code)
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(727) 519-2000
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(Registrant's telephone number, including area code)
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(Former Name or Former Address, if Changed Since Last Report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 9, 1999, Checkers Drive-In Restaurants, Inc., a Delaware
corporation ("Checkers"), consummated its acquisition of Rally's Hamburgers,
Inc., a Delaware corporation ("Rally's"), pursuant to that certain Agreement
and Plan of Merger, dated as of January 28, 1999 (the "Merger Agreement"), by
and among Checkers and Rally's. Checkers' acquisition of Rally's was effected
by merging Rally's with and into Checkers (the "Merger"), with Checkers
continuing as the surviving corporation. As consideration for the Merger and
pursuant to the terms of the Merger Agreement, Checkers issued to Rally's
stockholders 1.99 shares (the "Conversion Ratio") of its common stock for each
share of Rally's common stock held. Immediately prior to the Merger, the
number of authorized shares of Checkers' common stock was increased from 150
million shares to 175 million shares, and immediately after the Merger,
Checkers effected a one-for-12 reverse stock split. After giving effect to the
Merger and the reverse stock split, the number of outstanding shares of
Checkers' common stock is approximately 9.4 million. In addition, each
outstanding option and warrant to purchase Rally's common stock became an
option to purchase Checkers' common stock, based upon the Conversion Ratio and
the reverse stock split.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
The audited financial statements of Rally's for the three previous
fiscal years, and the accountant's report related thereto, as set forth in
Item 8., the Consolidated Financial Statements and Supplementary Data in
Rally's Annual Report on Form 10-K/A for the year ended December 28, 1998,
the unaudited financial statements for the period ended June 14, 1999, as set
forth in Item 1., and the Financial Statements in Rally's Quarterly Report on
Form 10-Q for the period ended June 14, 1999, are incorporated herein by
reference.
(b) Pro forma financial information.
The required pro forma financial information relating to the Company's
acquisition of Rally's for the twenty-four weeks ended June 14, 1999 and the
year ended December 28, 1998, as set forth in Checkers Quarterly Report on
Form 10-Q for the period ended June 14, 1999, are incorporated herein by
reference.
(c) Exhibits
2.1 Agreement and Plan of Merger, dated as of January 28, 1999, by
and among Checkers Drive-In Restaurants, Inc., and Rally's Hamburgers, Inc.
(incorporated by reference as Exhibit A to the Company's Joint Proxy
Statement/Prospectus included in the Company's Registration Statement on Form
S-4 (File No. 333-81295)).
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of KPMG LLP.
23.3 Consent of KPMG LLP.
99.1 Text of Press Release, dated August 10, 1999, of the Registrant.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Checkers Drive-In Restaurants, Inc.
Date: August 24, 1999 By: /s/ Richard A. Peabody
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Name: Richard A. Peabody
Title: Senior Vice-President and Chief
Financial Officer
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Form 8-K of our reports dated February 27, 1998,
included in Registration Statement File No. 333-81295. It should be noted
that we have not audited any financial statements of the Company subsequent
to December 29, 1997 or performed any audit procedures subsequent to the date
of our report.
Louisville, Kentucky ARTHUR ANDERSEN LLP
August 24, 1999
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ACCOUNTANTS' CONSENT
The Board of Directors
Checkers Drive-In Restaurants, Inc.:
We consent to the inclusion of our report dated February 26, 1999, with
respect to the consolidated balance sheet of Rally's Hamburgers, Inc. and
subsidiaries as of December 28, 1998, and the related consolidated statements
of operations and comprehensive income, stockholders' equity, and cash flows
for the year ended December 28, 1998, which report is incorporated by
reference in the Form 8-K of Checkers Drive-In Restaurants, Inc. dated August
24, 1999.
KPMG LLP
Tampa, Florida
August 24, 1999
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ACCOUNTANTS' CONSENT
The Board of Directors
Checkers Drive-In Restaurants, Inc.:
We consent to the inclusion of our report dated February 26, 1999, except as
to Note 2, which is as of March 24, 1999, with respect to the consolidated
balance sheets of Checkers Drive-In Restaurants, Inc. and subsidiaries as of
December 28, 1998 and December 29, 1997, and the related consolidated
statements of operations and comprehensive income, stockholders' equity, and
cash flows for each of the years in the three year period ended December 28,
1998, which report is incorporated by reference in the Form 8-K of Checkers
Drive-In Restaurants, Inc. dated August 24, 1999.
KPMG LLP
Tampa, Florida
August 24, 1999
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NEWS RELEASE
Contact: Richard A. Peabody, Chief Financial Officer
(727) 519-2000
FOR IMMEDIATE RELEASE
CHECKERS ANNOUNCES COMPLETION OF MERGER WITH RALLY'S
AND 1-FOR-12 REVERSE STOCK SPLIT
CLEARWATER, FL - AUGUST 10, 1999 - CHECKERS DRIVE-IN RESTAURANTS, INC.
(NASDAQ:CHKR) announced today that its merger with RALLY'S HAMBURGERS, INC.
(NASDAQ:RLLY) is effective as of Monday, August 9, 1999.
Shareholders of Rally's received 1.99 shares of Checkers common stock in
exchange for each share of Rally's common stock owned. The 1-for-12 reverse
stock split that was approved by Checkers' shareholders at the stockholders'
meeting on August 5, 1999 was effected prior to the opening of the market
today. Shareholders will receive cash compensation in exchange for fractional
shares that resulted from the merger and reverse split.
Jay Gillespie, chief executive officer commented, "We are pleased to have
this transaction completed and we are proceeding with other strategic
initiatives that have the potential to strengthen our company financially.
Included in these initiatives is the testing of a limited breakfast menu with
the goal of providing incremental sales during that day-part and the sale of
stores in company-owned markets to new or existing franchisees, the proceeds
of which could be used to reduce existing debt".
Statements in this release which are not historical facts are "forward
looking" statements and "Safe Harbor" statements under the Private Securities
Litigation Reform Act of 1995 that involve risks and/or uncertainties,
including but not limited to the impact of continued discounting by the
company's substantial competitors, success of the company's strategic
initiatives and promotion programs including the breakfast menu test, ability
of the company to reduce debt by selling stores, consumer acceptance of the
company's products, increases in operating costs, availability of adequate
numbers of hourly paid employees, decreases in the availability of affordable
capital resources and other risks documented in the company's filing on Form
10-K/A dated May 28, 1999 with the Securities and Exchange Commission.
Checkers Drive-In Restaurants, Inc. and its franchisees own approximately 468
Checkers operating primarily in the Southeastern United States and
approximately 468 Rally's operating primarily in the Midwestern United States.
