<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 (Date of earliest event reported): October 20, 1998
-----------------------------
BROTHERS GOURMET COFFEES, INC.
- -------------------------------------------------------------------------------
(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
- -------------------------------------------------------------------------------
(Address of Principal (Zip Code)
Executive Offices)
(561) 995-2600
- -------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Not Applicable
- -------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS
On October 15, 1998, the Registrant filed a request with the Securities and
Exchange Commission (the "Commission") seeking confirmation from the Staff that
it would not recommend any enforcement action to the Commission if, in lieu of
filing the quarterly and annual reports on Forms 10-Q and 10-K, respectively,
that the Registrant would otherwise be required to file while it is in
reorganization proceedings pursuant to Chapter 11 of the Bankruptcy Code, the
Registrant implements modified reporting procedures. Such modified reporting
procedures consist of filing each of the Registrant's Monthly Operating Reports
under cover of Form 8-K within 15 days after such Monthly Operating Report is
due to be filed with the Bankruptcy Court and U.S. Trustee's Office. The
Commission has not yet issued its decision on the Registrant's request; however,
pending such decision, the Registrant will implement the proposed modified
reporting procedures. Accordingly, a copy of the Registrant's Monthly Operating
Report, filed with the Bankruptcy Court and the U.S. Trustee's Office on October
20, 1998, is attached hereto as Exhibit 99.9 and is incorporated herein by
reference. The attached Monthly Operating Report presents certain financial
information of the Registrant and its subsidiaries for the period ended
September 25, 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Copy of the Registrant's Monthly Operating Report, for the period
ended September 25, 1998, filed with the Bankruptcy Court and U.S.
Trustee's Office on October 20, 1998.
<PAGE>
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
------------------------------------------------
Date: November 4, 1998 By: Barry Bilmes
Title: Vice President Finance and Administration
<PAGE>
DEBTOR: BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS ACCRUAL BASIS-1
CASE NO.: 98-1970, 98-1971, 98-1973, 98-1974
OFFICE OF THE UNITED STATES TRUSTEE - REGION 3
MONTHLY OPERATING REPORT
FOR THE MONTH ENDING SEPTEMBER 25, 1998
<TABLE>
<CAPTION>
==========================================================================================
Document Previously Explanation
Required attachments Attached Submitted Attached
<S> <C> <C> <C>
1. Tax Receipts ( ) ( ) ( X )
2. Bank Statements ( X ) ( ) ( )
3. Most recently filed ( ) ( X ) ( )
Income Tax Return
4. Most recent Annual Financial ( ) ( X ) ( )
Statements prepared by accountant
</TABLE>
IN ACCORDANCE WITH TITLE 28, SECTION 1746, OF THE UNITED STATES CODE, I DECLARE
UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING MONTHLY OPERATING
REPORT (ACCRUAL BASIS-1 THROUGH ACCRUAL BASIS-9) AND THE ACCOMPANYING
ATTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE DOCUMENTS ARE TRUE, CORRECT
AND COMPLETE. DECLARATION OF THE PREPARER (OTHER THAN RESPONSIBLE PARTY) IS
BASED ON ALL INFORMATION OF WHICH PREPARER HAS ANY KNOWLEDGE.
RESPONSIBLE PARTY:
Vice President Finance and
/s/ Barry Bilmes Administration
- --------------------------------------- ------------------------------
ORIGINAL SIGNATURE OF RESPONSIBLE PARTY TITLE
Barry Bilmes 10/20/98
- --------------------------------------- ------------------------------
PRINTED NAME OF RESPONSIBLE PARTY DATE
PREPARER:
- --------------------------------------- ------------------------------
ORIGINAL SIGNATURE OF PREPARER TITLE
- --------------------------------------- ------------------------------
PRINTED NAME OF PREPARER DATE
All Chapter 11 debtors must file this report with the Court and serve a copy on
the United States Trustee no later than the 15th day of the month following the
end of the month covered by the report.
<PAGE>
DEBTOR: BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS ACCRUAL BASIS-2
COMPARATIVE BALANCE SHEET
CASE NO.: 98-1970, 98-1971, 98-1973, 98-1974 THIRD QUARTER
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ASSETS - SEE EXHIBIT 1 MONTH MONTH MONTH
---------------------------------------------
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
1. CASH
- --------------------------------------------------------------------------------
2. ACCOUNTS RECEIVABLE
- --------------------------------------------------------------------------------
3. INVENTORY
- --------------------------------------------------------------------------------
4. NOTES RECEIVABLE
- --------------------------------------------------------------------------------
5. PREPAID EXPENSES
- --------------------------------------------------------------------------------
6. OTHER (ATTACH LIST)
- --------------------------------------------------------------------------------
7. TOTAL CURRENT ASSETS
- --------------------------------------------------------------------------------
8. PROPERTY, PLANT & EQUIPMENT
- --------------------------------------------------------------------------------
9. LESS ACCUMULATED
DEPRECIATION/DEPLETION
- --------------------------------------------------------------------------------
10. NET PROPERTY, PLANT &
EQUIPMENT
- --------------------------------------------------------------------------------
11. DUE FROM AFFILIATES & INSIDERS
- --------------------------------------------------------------------------------
12. INTANGIBLES (ATTACH LIST)
- --------------------------------------------------------------------------------
13. OTHER (ATTACH LIST)
- --------------------------------------------------------------------------------
14. TOTAL ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
POSTPETITION LIABILITIES
- --------------------------------------------------------------------------------
15. ACCOUNTS PAYABLE
- --------------------------------------------------------------------------------
16. TAXES PAYABLE
- --------------------------------------------------------------------------------
17. NOTES PAYABLE
- --------------------------------------------------------------------------------
18. PROFESSIONAL FEES
- --------------------------------------------------------------------------------
19. SECURED DEBT
- --------------------------------------------------------------------------------
20. DUE TO AFFILIATES & INSIDERS
- --------------------------------------------------------------------------------
21. OTHER (ATTACH LIST)
- --------------------------------------------------------------------------------
22. TOTAL POSTPETITION
LIABILITIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PREPETITION LIABILITIES
- --------------------------------------------------------------------------------
23. SECURED DEBT
- --------------------------------------------------------------------------------
24. PRIORITY DEBT
- --------------------------------------------------------------------------------
25. UNSECURED DEBT
- --------------------------------------------------------------------------------
26. OTHER (ATTACH LIST)
- --------------------------------------------------------------------------------
27. TOTAL PREPETITION LIABILITIES
- --------------------------------------------------------------------------------
28. TOTAL LIABILITIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQUITY
- --------------------------------------------------------------------------------
29. PREPETITION OWNERS' EQUITY
- --------------------------------------------------------------------------------
30. POSTPETITION CUMULATIVE
PROFIT OR (LOSS)
- --------------------------------------------------------------------------------
31. TOTAL EQUITY (DEFECIT)
- --------------------------------------------------------------------------------
32. TOTAL LIABILITIES &
OWNERS' EQUITY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
DEBTOR: BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS ACCRUAL BASIS-3
INCOME STATEMENT
CASE NO.: 98-1970, 98-1971, 98-1973, 98-1974 THIRD QUARTER
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
REVENUES - SEE EXHIBIT 2 MONTH MONTH MONTH
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
1. GROSS REVENUES
- --------------------------------------------------------------------------------
2. LESS: RETURNS & DISCOUNTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. NET REVENUE
- --------------------------------------------------------------------------------
COST OF GOODS SOLD
- --------------------------------------------------------------------------------
4. BEGINNING INVENTORY
- --------------------------------------------------------------------------------
5. ADD: PURCHASES
- --------------------------------------------------------------------------------
6. LESS: ENDING INVENTORY
- --------------------------------------------------------------------------------
7. TOTAL COST OF GOODS SOLD
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. GROSS PROFIT
- --------------------------------------------------------------------------------
OPERATING EXPENSES
- --------------------------------------------------------------------------------
9. OFFICER/INSIDER COMPENSATION
- --------------------------------------------------------------------------------
10. DIRECT LABOR/SALARIES
- --------------------------------------------------------------------------------
11. PAYROLL TAXES
- --------------------------------------------------------------------------------
12. RENT & LEASE EXPENSE
- --------------------------------------------------------------------------------
13. INSURANCE
- --------------------------------------------------------------------------------
14. DEPRECIATION/DEPLETION/AMORTIZATION
- --------------------------------------------------------------------------------
15. GENERAL & ADMINISTRATIVE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
16. OTHER (ATTACH LIST)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
17. TOTAL OPERATING EXPENSE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
18. OPERATING INCOME
- --------------------------------------------------------------------------------
OTHER INCOME & EXPENSES
- --------------------------------------------------------------------------------
19. OTHER INCOME (ATTACH LIST)
- --------------------------------------------------------------------------------
20. OTHER EXPENSES (ATTACH LIST)
- --------------------------------------------------------------------------------
21. INTEREST EXPENSE
- --------------------------------------------------------------------------------
22. OTHER (ATTACH LIST)
- --------------------------------------------------------------------------------
23. NET OTHER INCOME & EXPENSES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REORGANIZATION EXPENSES
- --------------------------------------------------------------------------------
24. PROFESSIONAL FEES
- --------------------------------------------------------------------------------
25. U.S. TRUSTEE FEES
- --------------------------------------------------------------------------------
26. OTHER (ATTACH LIST)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
27. TOTAL REORGANIZATION EXPENSES
- --------------------------------------------------------------------------------
28. INCOME TAX
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
29. NET PROFIT (LOSS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
DEBTOR: BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS ACCRUAL BASIS-4
<TABLE>
<CAPTION>
BANK:
CASE NO.: 98-1970, 98-1971, 98-1973, 98-1974 ACCOUNT NO.:
ACCOUNT TYPE:
- ------------------------------------------------------------------------------------------
CASH RECEIPTS AND MONTH MONTH MONTH
DISBURSEMENTS - SEE EXHIBIT 3 ---------------------------------------------------
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
1. CASH-BEGINNING OF MONTH
- ------------------------------------------------------------------------------------------
RECEIPTS
- ------------------------------------------------------------------------------------------
2. CASH SALES
- ------------------------------------------------------------------------------------------
3. COLLECTION OF ACCOUNTS RECEIVABLE
- ------------------------------------------------------------------------------------------
4. LOANS & ADVANCES (ATTACH LIST)
- ------------------------------------------------------------------------------------------
4. SALE OF ASSETS
- ------------------------------------------------------------------------------------------
6. OTHER (ATTACH LIST)
- ------------------------------------------------------------------------------------------
7. TOTAL RECEIPTS
- ------------------------------------------------------------------------------------------
8. TOTAL CASH AVAILABLE
- ------------------------------------------------------------------------------------------
CURRENT MONTH DISBURSEMENTS
- ------------------------------------------------------------------------------------------
CHECK
NUMBER DATE PAYEE PURPOSE AMOUNT
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
TOTAL DISBURSEMENTS FROM BANK ACCOUNT
----------------------------------------------------------------------
END OF MONTH BALANCE (SHOULD EQUAL ACCRUAL BASIS-6, LINE 5)
- ------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DEBTOR: BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS ACCRUAL BASIS-5
CASE NO.: 98-1970, 98-1971, 98-1973, 98-1974
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE AGING - SEE EXHIBIT 4
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
0 - 30 days old
--------------------------------------------------------------------------------------------------------
31 - 60 days old
--------------------------------------------------------------------------------------------------------
61 - 90 days old
--------------------------------------------------------------------------------------------------------
91+ days old
--------------------------------------------------------------------------------------------------------
TOTAL ACCOUNTS RECEIVABLE
--------------------------------------------------------------------------------------------------------
AMOUNTS CONSIDERED UNCOLLECTIBLE
--------------------------------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE (NET)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
AGING OF POST PETITION TAXES AND PAYABLES - SEE EXHIBIT 5
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
0-30 31-60 61-90 91+
DAYS DAYS DAYS DAYS TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
ACCOUNTS PAYABLE
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
STATUS OF POST PETITION TAXES - SEE EXHIBIT 6
- -----------------------------------------------------------------------------------------------------------------------------------
BEGINNING WITHHELD ENDING
TAX AND/OR AMOUNT TAX DELINQUENT
LIABILITY* ACCRUED PAID LIABILITY TAXES
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FEDERAL
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
WITHHOLDING**
- -----------------------------------------------------------------------------------------------------------------------------------
FICA-EMPLOYEE**
- -----------------------------------------------------------------------------------------------------------------------------------
FICA-EMPLOYER**
- -----------------------------------------------------------------------------------------------------------------------------------
UNEMPLOYMENT
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER (ATTACH LIST)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL FEDERAL TAXES
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
STATE AND LOCAL
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
WITHHOLDING
- -----------------------------------------------------------------------------------------------------------------------------------
SALES
- -----------------------------------------------------------------------------------------------------------------------------------
EXCISE
- -----------------------------------------------------------------------------------------------------------------------------------
UNEMPLOYMENT
- -----------------------------------------------------------------------------------------------------------------------------------
REAL PROPERTY
- -----------------------------------------------------------------------------------------------------------------------------------
PERSONAL PROPERTY
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER (ATTACH LIST)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL STATE AND LOCAL
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL TAXES
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The beginning tax liability should represent the liability from the prior
month or, if this is the first operating report, the amount should be zero.
** Attach photocopies of IRS Form 6123 or your FTD coupon and payment receipt
to verify payment of deposit.
<PAGE>
DEBTOR: BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS ACCRUAL BASIS-6
CASE NO.: 98-1970, 98-1971, 98-1973, 98-1974
THE DEBTOR IN POSSESSION MUST COMPLETE THE RECONCILIATION BELOW FOR EACH BANK
ACCOUNT, INCLUDING ALL GENERAL, PAYROLL AND TAX ACCOUNTS, AS WELL AS ALL
SAVINGS AND INVESTMENT ACCOUNTS, MONEY MARKET ACCOUNTS, CERTIFICATES OF
DEPOSIT, GOVERNMENT OBLIGATIONS, ETC. ACCOUNTS WITH RESTRICTED FUNDS SHOULD
BE IDENTIFIED BY PLACING AN ASTERISK NEXT TO THE ACCOUNT NUMBER. ATTACH
ADDITIONAL SHEETS IF NECESSARY.
<TABLE>
<CAPTION>
MONTH:
- -----------------------------------
BANK RECONCILIATION - SEE EXHIBIT 7
ACCOUNT #1 ACCOUNT #2 ACCOUNT #3
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
A. BANK:
-----------------------------------------------------
B. ACCOUNT NUMBER: TOTAL
-----------------------------------------------------
C. PURPOSE (TYPE):
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
1. BALANCE PER BANK STATEMENT
- --------------------------------------------------------------------------------------------------------------------
2. ADD: TOTAL DEPOSITS NOT CREDITED
- --------------------------------------------------------------------------------------------------------------------
3. SUBTRACT: OUTSTANDING CHECKS
- --------------------------------------------------------------------------------------------------------------------
4. OTHER RECONCILING ITEMS (ATTACH LIST)
- --------------------------------------------------------------------------------------------------------------------
5. MONTH END BALANCE PER BOOKS
- --------------------------------------------------------------------------------------------------------------------
6. NUMBER OF LAST CHECK WRITTEN
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------
INVESTMENT ACCOUNTS
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
DATE OF TYPE OF PURCHASE CURRENT
BANK ACCOUNT NAME & NUMBER PURCHASE INSTRUMENT PRICE VALUE
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7.
- --------------------------------------------------------------------------------------------------------------------
8.
- --------------------------------------------------------------------------------------------------------------------
9.
- --------------------------------------------------------------------------------------------------------------------
10.
- --------------------------------------------------------------------------------------------------------------------
11. TOTAL INVESTMENTS
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------
CASH
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
12. CURRENCY ON HAND
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
13. TOTAL CASH-END OF MONTH (Total of lines 5, 11, & 12)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEBTOR: BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS ACCRUAL BASIS-7
CASE NO.: 98-1970, 98-1971, 98-1973, 98-1974
- -----------------------------------------------------------------------------------------------------
PAYMENTS TO INSIDERS AND PROFESSIONALS
- -----------------------------------------------------------------------------------------------------
OF THE TOTAL DISBURSEMENTS SHOWN FOR THE MONTH, LIST THE AMOUNT PAID
TO INSIDERS (AS DEFINED IN SECTION 101(31)(A)-(F) OF THE U.S. BANKRUPTCY CODE)
AND TO PROFESSIONALS. ALSO, FOR PAYMENTS TO INSIDERS, IDENTIFY THE TYPE OF
COMPENSATION PAID (e.g. SALARY, BONUS, COMMISSIONS, INSURANCE, HOUSING
ALLOWANCE TRAVEL, CAR ALLOWANCE, ETC.). ATTACH ADDITIONAL SHEETS IF NECESSARY.
- -----------------------------------------------------------------------------------------------------
INSIDERS - SEE EXHIBIT 8
- --------------------------------------------------------------------------- CUMULATIVE
TYPE OF AMOUNT UNPAID
NAME POSITION PAYMENT PAID BALANCE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1.
- -----------------------------------------------------------------------------------------------------
2.
- -----------------------------------------------------------------------------------------------------
3.
- -----------------------------------------------------------------------------------------------------
4.
- -----------------------------------------------------------------------------------------------------
5.
- -----------------------------------------------------------------------------------------------------
6. TOTAL PAYMENTS TO INSIDERS
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
PROFESSIONALS - SEE EXHIBIT 9
- -----------------------------------------------------------------------------------------------------
TYPE DATE OF COURT
OF ORDER AUTHORIZING AMOUNT AMOUNT TOTAL PAID
NAME PROFESSIONAL PAYMENT APPROVED PAID TO DATE
- -----------------------------------------------------------------------------------------------------
1.
- -----------------------------------------------------------------------------------------------------
2.
- -----------------------------------------------------------------------------------------------------
3.
- -----------------------------------------------------------------------------------------------------
4.
- -----------------------------------------------------------------------------------------------------
5.
- -----------------------------------------------------------------------------------------------------
6. TOTAL PAYMENTS TO PROFESSIONALS
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
ADEQUATE PROTECTION PAYMENTS
- -----------------------------------------------------------------------------------------------------
SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID
NAME OF CREDITOR DUE MONTH POSTPETITION
- -----------------------------------------------------------------------------------------------------
THE DEBTOR MADE NO ADEQUATE PROTECTION
PAYMENTS IN SEPTEMBER 1998.
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEBTOR: BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS ACCRUAL BASIS-8
CASE NO.: 98-1970, 98-1971, 98-1973, 98-1974
- ------------------------------------------------------------------------------------------------------------------
QUESTIONNAIRE YES NO
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
1. HAVE ANY ASSETS BEEN SOLD OR TRANSFERRED OUTSIDE THE NORMAL COURSE OF BUSINESS
THIS REPORTING PERIOD? X
- ------------------------------------------------------------------------------------------------------------------
2. HAVE ANY FUNDS BEEN DISBURSED FROM ANY ACCOUNT OTHER THAN A DEBTOR IN POSSESSION
ACCOUNT? X
- ------------------------------------------------------------------------------------------------------------------
3. ARE ANY POSTPETITION RECEIVABLES (ACCOUNTS, NOTES, OR LOANS) DUE FROM RELATED PARTIES? X
- ------------------------------------------------------------------------------------------------------------------
4. HAVE ANY PAYMENTS BEEN MADE ON PREPETITION LIABILITIES THIS REPORTING PERIOD? X(a)
- ------------------------------------------------------------------------------------------------------------------
5. HAVE ANY POSTPETITION LOANS BEEN RECEIVED BY THE DEBTOR FROM ANY PARTY? X(b)
- ------------------------------------------------------------------------------------------------------------------
6. ARE ANY POSTPETITION PAYROLL TAXES PAST DUE? X
- ------------------------------------------------------------------------------------------------------------------
7. ARE ANY POSTPETITION STATE OR FEDERAL INCOME TAXES PAST DUE? X
- ------------------------------------------------------------------------------------------------------------------
8. ARE ANY POSTPETITION REAL ESTATE TAXES PAST DUE? X
- ------------------------------------------------------------------------------------------------------------------
9. ARE ANY OTHER POSTPETITION TAXES PAST DUE? X
- ------------------------------------------------------------------------------------------------------------------
10. ARE ANY AMOUNTS OWED TO POSTPETITION CREDITORS DELINQUENT? X
- ------------------------------------------------------------------------------------------------------------------
11. HAVE ANY PREPETITION TAXES BEEN PAID DURING THE REPORTING PERIOD? X(c)
- ------------------------------------------------------------------------------------------------------------------
12. ARE ANY WAGE PAYMENTS PAST DUE? X
- ------------------------------------------------------------------------------------------------------------------
IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS "YES," PROVIDE A DETAILED
EXPLANATION OF EACH ITEM. ATTACH ADDITIONAL SHEETS IF NECESSARY.
(a) The Debtors are authorized to pay certain pre-petition liabilities under "First Day" Orders. Only
pre-petition payments so authorized have been made and reported in accordance
with such orders.
- ------------------------------------------------------------------------------------------------------------------
(b) Loans received in accordance with Debtor-In-Possession Financing Agreement. Approved by the Court.
- ------------------------------------------------------------------------------------------------------------------
(c) Various de minimus pre-petition business license and franchise fees paid. Such license and franchise
fees were necessary to continue to conduct business in certain jurisdictions
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
INSURANCE YES NO
- ------------------------------------------------------------------------------------------------------------------
1. ARE WORKERS COMPENSATION, GENERAL LIABILITY AND OTHER NECESSARY
INSURANCE COVERAGES IN EFFECT? X
- ------------------------------------------------------------------------------------------------------------------
2. ARE ALL PREMIUM PAYMENTS PAID CURRENT? X
- ------------------------------------------------------------------------------------------------------------------
3. PLEASE ITEMIZE POLICIES BELOW.
- ------------------------------------------------------------------------------------------------------------------
IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS "NO," OR IF ANY POLICIES HAVE
BEEN CANCELLED OR NOT RENEWED DURING THIS REPORTING PERIOD, PROVIDE AN
EXPLANATION BELOW. ATTACH ADDITIONAL SHEETS IF NECESSARY.
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
INSURANCE POLICIES - SEE EXHIBIT 10
- ------------------------------------------------------------------------------------------------------------------
TYPE OF PAYMENT AMOUNT
POLICY CARRIER PERIOD COVERED & FREQUENCY
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DEBTOR: BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS ACCRUAL BASIS-9
CASE NO.: 98-1970, 98-1971, 98-1973, 98-1974
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
PERSONNEL
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
FULL/PART TIME
- -----------------------------------------------------------------------------------------------
<S> <C>
1. Total number of employees at beginning of period 251
- -----------------------------------------------------------------------------------------------
2. Number of employees hired during the period 3
- -----------------------------------------------------------------------------------------------
3. Number of employees terminated or resigned during the period 12
- -----------------------------------------------------------------------------------------------
4. Total number of employees on payroll at end of period 242
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
CHANGE OF ADDRESS
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
If your mailing address has changed and you have not previously notified the
United States Trustee of the change, list your new address below:
DATE OF CHANGE:__________________________
NEW ADDRESS:
<PAGE>
BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 25, 1998
($000'S)
<TABLE>
<S> <C>
Current Assets:
Petty cash $ 2
Cash in bank 950
Accounts receivable 4,468
Inventories 6,496
Prepaid expenses and other assets 504
---------
Current assets 12,420
Plant and Equipment, net 12,677
Other Assets:
Debt acquisition costs 1,748
Debt restructuring costs 440
Prepaid promotional expenses 3,079
Other assets 602
---------
---------
Total assets $ 30,966
---------
---------
Current Liabilities:
Term loan note $ 15,493
Revolving loan 2,332
Current maturities of long term debt and capital lease 34
Accounts payable (pre-petition) 6,104
Accounts payable (post-petition) (1,281)(a)
Accrued expenses 6,697
Accrued loss on future purchase commitments 638
Allowance for operating losses of discontinued segment 1,643
Accrued restructuring expenses -
---------
Current liabilities 31,660
Long Term Liabilities:
Long-term debt (pre-petition) 12,199
Minority interests 97
Shareholders' Equity:
Common stock 1
Additional paid-in capital 151,693
Accumulated deficit in earnings (164,234)
Treasury stock (450)
---------
Total Shareholders Equity (12,990)
---------
Total Liabilities and Shareholders Equity $ 30,966
---------
---------
</TABLE>
NOTES:
(a) Post-petition accounts payable debit balance results from prepayments
for inventory/materials not yet received.
Exhibit 1 Page 1 of 1
<PAGE>
BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS
CONSOLIDATED INCOME STATEMENT
FOR THE MONTH ENDED SEPTEMBER 25, 1998
($000'S)
<TABLE>
<CAPTION>
MONTH ENDED
SEPTEMBER 25, 1998
------------------
<S> <C>
Sales $ 5,161
Cost of goods sold 2,893
-------
Gross profit 2,268
Operating expenses
Customer 862
Sales 234
Distribution 428
Marketing 102
General administrative 335
MIS administrative 86
Purchases commit. losses (50)
-------
Total operating expenses 1,997
Operating income (loss) 271
Interest expense 189
Debt restructuring costs 508
Other (income) expense 28
-------
Net income (loss) before reorganization expenses (454)
Reorganization expenses 620
-------
Net income (loss) $(1,074)
-------
-------
</TABLE>
Exhibit 2 Page 1 of 1
<PAGE>
BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS
AGING OF ACCOUNTS RECEIVABLE
AS OF SEPTEMBER 25, 1998
($000'S)
<TABLE>
<CAPTION>
Past Due
------------------------------- Total Accounts Allowance for Returns Net Accounts
Current 30 Days 60 Days Over 60 Receivable and Bad Debts Receivable
- ------- ------- ------- ------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 4,160 $ 499 $ 273 $ 577 $ 5,509 $ (1,041) $ 4,468
</TABLE>
Exhibit 4 Page 1 of 1
<PAGE>
BROTHERS GOURMET COFFEES, INC AND AFFILIATED DEBTORS
AGING OF ACCOUNTS PAYABLE
AS OF SEPTEMBER 25, 1998
($ 000'S)
<TABLE>
<CAPTION>
TOTAL
ACCOUNTS
0-30 DAYS 31-60 DAYS 61-90 DAYS 91+ DAYS PAYABLE
- --------- ---------- ---------- -------- -------
<S> <C> <C> <C> <C>
$ (1,281) $ - $ - $ - $ (1,281) (a)
</TABLE>
NOTES:
(a) Post-petition accounts payable debit balance results from prepayments
for inventory/materials not yet received.
Exhibit 5 Page 1 of 1
<PAGE>
BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS
AS OF SEPTEMBER 25, 1998
($000'S)
<TABLE>
<CAPTION>
AMOUNT
BEGINNING WITHHELD OR AMOUNT ENDING TAX DELINQUENT
TAX LIABILITY ACCRUED PAID LIABILITY TAXES
------------- ------- ---- --------- -----
<S> <C> <C> <C> <C> <C>
FEDERAL
Withholding (a) $ 41.0 $ 76.5 $ 41.0 $ 76.5 $ -
Unemployment (a) 0.1 0.2 0.2 0.2 -
---------------------------------------------------------------------
TOTAL FEDERAL 41.1 76.7 41.2 76.7 -
STATE
Withholding (a) 2.1 2.9 2.0 3.0 -
Unemployment (a) (0.5) 0.8 0.6 (0.2) -
Income 3.1 - - 3.1 -
Property 194.6 29.7 3.4 221.0 -
Sales 50.9 5.3 - 56.2 -
Franchise (b) 52.9 12.0 11.7 53.2 -
---------------------------------------------------------------------
TOTAL STATE AND LOCAL 303.3 50.8 17.7 336.3 -
---------------------------------------------------------------------
TOTAL TAXES $344.4 $127.5 $ 58.9 $413.0 $ -
---------------------------------------------------------------------
---------------------------------------------------------------------
</TABLE>
NOTES:
(a) The Debtors are authorized to pay certain pre-petition employee related
taxes under "First Day" orders.
(b) Various de minimus pre-petition business license and franchise fees paid.
Such license and franchise fees were necessary to continue to conduct
business in certain jurisdictions.
Exhibit 6 Page 1 of 1
<PAGE>
BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS
BANK RECONCILIATION
AS OF SEPTEMBER 25, 1998
($000's)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
ACCOUNT #1 ACCOUNT #2 ACCOUNT #3 ACCOUNT #4 ACCOUNT #5
------------------------------------------------------------------------------
A. BANK: FUNB FUNB FUNB FUNB FUNB
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
B. ACCOUNT NUMBER: 2000000482626 2079900003505 2155300194336 2090000011463 2090000011450
------------------------------------------------------------------------------
C. PURPOSE (TYPE): DEPOSITORY CHECKING PAYROLL DEPOSITORY DEPOSITORY
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
1. BALANCE PER BANK STATEMENT $ 1,156.4 $ 183.7 $ 79.1 $ 20.3 $ 16.1
- -----------------------------------------------------------------------------------------------------------------------
2. ADD: TOTAL DEPOSITS NOT CREDITED 0.0 0.0 0.0 0.0 0.0
- -----------------------------------------------------------------------------------------------------------------------
3. SUBTRACT: OUTSTANDING CHECKS 0.0 (492.8) (26.0) 0.0 0.0
- -----------------------------------------------------------------------------------------------------------------------
4. OTHER RECONCILING ITEMS (ATTACH LIST) (28.9) 36.1 0.2 0.0 0.0
- -----------------------------------------------------------------------------------------------------------------------
5. MONTH END BALANCE PER BOOKS $ 1,127.5 $ (273.0) $ 53.3 $ 20.3 $ 16.1
- -----------------------------------------------------------------------------------------------------------------------
6. NUMBER OF LAST CHECK WRITTEN 88445 8580
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------
ACCOUNT #6
- -----------------------------------------------------------------------
A. BANK: FUNB
---------------------------------------------
<S> <C> <C>
B. ACCOUNT NUMBER: 2090000802410 TOTAL
---------------------------------------------
C. PURPOSE (TYPE): CHECKING
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
1. BALANCE PER BANK STATEMENT $ 4.2 $ 1,459.7
- -----------------------------------------------------------------------
2. ADD: TOTAL DEPOSITS NOT CREDITED 2.0 2.0
- -----------------------------------------------------------------------
3. SUBTRACT: OUTSTANDING CHECKS (0.5) (519.3)
- -----------------------------------------------------------------------
4. OTHER RECONCILING ITEMS (ATTACH LIST) 0.0 7.4
- -----------------------------------------------------------------------
5. MONTH END BALANCE PER BOOKS $ 5.7 $ 949.9
- -----------------------------------------------------------------------
6. NUMBER OF LAST CHECK WRITTEN
- -----------------------------------------------------------------------
</TABLE>
NOTES:
FUNB - First Union National Bank
Exhibit 7
<PAGE>
BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS
DISTRIBUTION TO INSIDERS
SEPTEMBER 1998
<TABLE>
<CAPTION>
Other Total
Salary (a) Bonus Severance Expense (b) Auto 401(K) Payments
---------- ----- ---------- ----------- ---- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
DIRECTORS:
Aburdene, Elias $ - $ - $ - $ - $ - $ - $ -
Bolduc, J.P. - - - - - - -
Moore, James - - - - - - -
Rudy, Ray - - - - - - -
OFFICERS:
Breen, Donald 19,385 - - 728 612 192 20,917
Bilmes, Barry 9,738 - - - - 144 9,882
Olson, Terry (c) 14,754 - - 114 - 110 14,978
Pennington, Linda 8,144 - - - 400 - 8,544
Davis, Eric 7,037 - - - - 87 7,124
Brownstein, Hyatt, Farber
& Strickland P.C. - - - - - - -
Schoonover, Randy 1,846 - - - - 277 2,123
--------------------------------------------------------------------------------
$ 60,904 $ - $ - $ 842 $ 1,012 $ 810 $ 63,568
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
NOTES:
(a) Includes employer payments for medical, dental, basic life insurance
premiums, accidental dealth and dismemberment and basic long-term
disability.
(b) Meals, travel expenses, etc.
(c) Voluntarily terminated employment after commencement of Chapter 11 case.
Exhibit 8
<PAGE>
BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS
PAYMENTS TO PROFESSIONALS
SEPTEMBER 1998
The Debtor made no payments to professionals in September 1998.
Exhibit 9
<PAGE>
BROTHERS GOURMET COFFEES, INC. AND AFFILIATED DEBTORS
INSURANCE POLICIES
AS OF SEPTEMBER 25, 1998
<TABLE>
<CAPTION>
TYPE OF POLICY TERM CARRIER PAYMENTS FREQUENCY
-------------- ---- ------- -------- ---------
<S> <C> <C> <C> <C>
Package 7/1/98-6/30/99 Royal & Sun Alliance $ 158,445 Monthly
TX Auto 7/1/98-6/30/99 Royal & Sun Alliance $ 19,166 Monthly
Foreign Liability 7/1/98-6/30/99 Royal & Sun Alliance $ 2,500 Monthly
Workers' Compensation 7/1/98-6/30/99 Royal & Sun Alliance $ 199,875 Monthly
CA Worker's Compensation 7/1/98-6/30/99 Royal & Sun Alliance $ 24,673 Monthly
Umbrella - $10 million 7/1/98-6/30/99 Royal & Sun Alliance $ 20,042 Monthly
Umbrella - $15 million 7/1/98-6/30/99 Royal & Sun Alliance $ 15,500 Annually
Directors and Offficers 2/25/98-2/25/99 National Union $ 120,000 Annually
</TABLE>
Exhibit 10
