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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 (Date of earliest event reported): AUGUST 28, 1998
BROTHERS GOURMET COFFEES, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-23024 52-1681708
(State or Other Juris- (Commission File (IRS Employer
diction of Incorporation) Number) Identification No.)
2255 Glades Road
Suite 100E
Boca Raton, Florida 33431
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(Address of Principal (Zip Code)
Executive Offices)
(561) 995-2600
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
On August 28, 1998, the Registrant issued the press release attached hereto
as Exhibit 99.1, which is incorporated herein by reference. The press
releases announces that, on Thursday, August 27, 1998, Brothers Gourmet
Coffees, Inc., and its three subsidiaries, Brothers Coffee Bars, Inc.,
Brothers Retail Corp., and Maryland Club Foods, Inc., filed voluntary
petitions for relief under Chapter 11 of the Federal Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press release issued Friday, August 28, 1998, by the Registrant
describing the filing, by the Registrant and its three
subsidiaries, of voluntary petitions for relief under Chapter 11
of the Federal Bankruptcy Code in the United States Bankruptcy
Court for the District of Delaware.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BROTHERS GOURMET COFFEES, INC.
(Registrant)
/s/ Barry Bilmes
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Date: August 28, 1998 By: Barry Bilmes
Title: Vice President Finance and
Administration
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EXHIBIT 99.1
BROTHERS GOURMET COFFEES, INC.
FOR IMMEDIATE RELEASE
CONTACT: BARRY BILMES
VICE PRESIDENT FINANCE AND ADMINISTRATION
BROTHERS GOURMET COFFEES, INC.
561-995-2600
BROTHERS GOURMET COFFEES, INC.,
ANNOUNCES VOLUNTARY CHAPTER 11 FILING
BOCA RATON, FLORIDA, FRIDAY, AUGUST 28, 1998: Brothers Gourmet Coffees,
Inc. (NASDAQ:BEAN), one of the leading wholesale distributors of gourmet coffee
products in the United States, announced today that on Thursday, August 27,
1998, it and its three subsidiaries, Brothers Coffee Bars, Inc., Brothers Retail
Corp. and Maryland Club Foods, Inc., filed voluntary petitions for relief under
Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy Court
for the District of Delaware. The cases are being jointly administered.
Under Chapter 11, the Company will continue to operate its business in the
ordinary course under the protection of the bankruptcy court while seeking to
work out a plan of reorganization to provide for the payment of its creditors.
Goldman Sachs Credit Partners, L.P., the Company's senior secured lender, has
agreed to provide approximately $18 million of debtor-in-possession financing to
the Company, consisting of $3.425 million of new revolving credit to fund the
Company's ongoing operations and approximately $14.6 million of new term loan
debt to repay in full Goldman's prepetition debt.
In its Quarterly Report on Form 10-Q for the fiscal quarter ended June 26,
1998, the Company stated that it was involved in ongoing negotiations with
Goldman and Dilmun Financial Services to restructure its institutional debt and
further stated that, if such negotiations were not successful, it would be
forced to consider other alternatives, including filing a petition under Chapter
11.
Mr. Breen, the President and Chief Executive Officer of the Company,
stated: "The Board of Directors believes that reorganizing the Company under
Chapter 11 is the best way to maximize the value of the Company. Subject to
bankruptcy court approval, the Company has retained PricewaterhouseCoopers LLP
in the role of financial advisor to assist the Company in connection with the
formulation of a plan of reorganization which may include the restructuring of
existing liabilities, a sale of all or substantially all of the Company's assets
or a sale to, or merger of the Company with, a strategic partner or investors."
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Mr. Breen continued: "Our relationships with our vendors and customers are
good. Our product continues to be well received in the marketplace. The price
trend for green coffee is moving in our favor. And, the gourmet coffee category
continues to grow. The decision to file for protection under Chapter 11, and
our new revolving credit facility, will permit us to fund ongoing operations
and continue uninterrupted service to our customers."
Brothers Gourmet Coffees, Inc., is an integrated sourcer, roaster and
wholesaler of high quality gourmet coffee products. The Company is one of the
leading wholesale suppliers of gourmet coffees in the United States. The
Company distributes its products principally through grocery stores,
supermarkets, mass merchandisers, drug stores, military commissaries, warehouse
stores and specialty stores.
STATEMENTS CONTAINED IN THIS NEWS RELEASE, IF NOT HISTORICAL, ARE FORWARD
LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF
1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, WHICH INVOLVE RISKS
AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE
RESULTS DESCRIBED IN THE FORWARD LOOKING STATEMENTS. SUCH RISKS AND
UNCERTAINTIES INCLUDE THE COMPANY'S HIGH LEVEL OF DEBT AND LEVERAGE, THE EFFECT
ON VENDORS AND CUSTOMERS OF THE COMPANY'S DECISION TO VOLUNTARILY FILE FOR
PROTECTION UNDER CHAPTER 11 OF THE FEDERAL BANKRUPTCY LAWS, THE COMPANY'S
DEPENDENCE ON KEY PERSONNEL, COMPETITION IN THE COMPANY'S MARKETS, COMPETITIVE
CHANGES IN THE WHOLESALE DISTRIBUTION SEGMENT OF THE GOURMET COFFEE MARKET, THE
EFFECTS OF SEASONALITY ON THE COMPANY'S BUSINESS, THE STRUCTURE AND TERMS OF THE
COMPANY'S PLAN OF REORGANIZATION. A FURTHER DISCUSSION OF FACTORS THAT COULD
AFFECT THE COMPANY'S BUSINESS AND RESULTS OF OPERATIONS IS INCLUDED IN THE
COMPANY'S REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
