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Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K/A
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 21, 1996
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RENAISSANCE COSMETICS, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 33-87280 06-1396287
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(State or Other Juris- (Commission File (IRS Employer
diction of Incorporation) Number) Identification No.)
955 Massachusetts Avenue
Cambridge, Massachusetts 02139
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(Address of Principal (Zip Code)
Executive Offices)
(617) 497-5584
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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 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
See item 2. of Form 8-K filed on September 4, 1996 for a description
of the transaction and the entities involved.
1. Unaudited pro forma financial statements for the Company and Great
American Cosmetics, Inc. ("GAC"), for the year ended March 31, 1996.
2. Unaudited pro forma financial statements for the Company and GAC, for
the three months ended June 30, 1996.
2
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UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
COMPANY GAC(1) (A)
HISTORICAL HISTORICAL PRO FORMA (A)
MARCH 31, 1996 DEC. 31, 1995 ADJUSTMENTS PRO FORMA
-------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
NET SALES........................... $131,286 $7,886 $ -- $139,172
COST OF GOODS SOLD.................. 51,169 4,538 -- 55,707
-------- ------ -------- --------
GROSS PROFIT........................ 80,117 3,348 -- 83,465
OPERATING EXPENSES:
Selling............................. 52,781 848 -- 53,619
General and administrative.......... 13,679 617 -- 14,296
Amortization of intangible and
other assets....................... 5,207 224 $ 301 (a) 5,732
-------- ------ -------- --------
Total operating expenses........ 71,667 1,679 301 73,647
-------- ------ -------- --------
OPERATING INCOME.................... 8,450 1,669 (301) 9,818
INTEREST EXPENSE (INCOME):
Interest expense.................... 19,458 8 (738)(b) 18,728
Interest and other income........... (255) -- (255)
-------- ------ -------- --------
INCOME (LOSS) BEFORE INCOME TAXES... (10,753) 1,661 437 (8,655)
INCOME TAX PROVISION (BENEFIT)...... 1,304 609 -- 1,913
-------- ------ -------- --------
NET INCOME (LOSS)................... (12,057) 1,052 437 (10,568)
PREFERRED STOCK DIVIDENDS........... 1,333 -- 17,826 (c) 19,159
-------- ------ -------- --------
NET INCOME (LOSS) APPLICABLE TO
COMMON STOCKHOLDERS................ $(13,390) $1,052 $(17,389) $(29,727)
-------- ------ -------- --------
-------- ------ -------- --------
NET INCOME (LOSS) PER
COMMON SHARE....................... $ (18.62) $ (36.12)
-------- --------
-------- --------
WEIGHTED AVERAGE SHARES
OUTSTANDING........................ 719,138 823,056 (d)
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-------- --------
</TABLE>
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(1) GAC has a fiscal year end which ends on December 31.
3
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NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1996
(DOLLARS IN THOUSANDS)
(a) Reflects the amortization of approximately $525 of excess purchase costs
paid for the acquired assets and assumed liabilities of GAC, net of $224
of historical amortization. While the Company has yet to complete the
final allocation of this excess to specific assets acquired and liabilities
assumed or to make a final determination of the useful lives of the assets
acquired, based on its preliminary estimate, the Company believes that the
excess will be allocated principally to trademarks and goodwill which will
be amortized over 25 years.
(b) Reflects the elimination of $8 of GAC historical interest expense and
the elimination of $730 of historical interest expense on its existing
credit facility with Nomura Holding America, Inc. ("Existing Credit
Facility").
(c) Reflects dividends on the 14.0% Senior Redeemable Preferred Stock,
Series B, par value $0.01 per share (the "Series B Preferred Stock")
assuming such shares had been issued on April 1, 1995. The dividends on
the 14% Senior Redeemable Preferred Stock, Series C, par value $0.01 per
share (the "Series C Preferred Stock") will be the same as the dividends
on the Series B Preferred Stock.
(d) Includes 103,918 shares issued to purchasers in connection with the
commitment of CIBC WG Argosy Merchant Fund 2, L.L.C. to purchase $20.0
million of the Company's Senior Redeemable Exchangeable Preferred Stock,
Series A (the "CIBC Financing") and the sale of Common Stock (the "New
Common Stock Sale") in connection with the offering on August 15, 1996,
September 16, 1996 and September 27, 1996 of the Series B Preferred Stock
and warrants to purchase Common Stock of the Company (the "Series B
Offering").
4
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UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1996
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
COMPANY GAC
HISTORICAL HISTORICAL (A)
QUARTER ENDED QUARTER ENDED PRO FORMA (A)
JUNE 30, 1996 JUNE 30, 1996 ADJUSTMENTS PRO FORMA
------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
NET SALES......................... $30,688 $4,648 $ -- $35,336
COST OF GOODS SOLD................ 11,506 2,686 -- 14,192
------- ------ ------- -------
GROSS PROFIT...................... 19,182 1,962 -- 21,144
OPERATING EXPENSES:
Selling.......................... 11,332 533 -- 11,865
General and administrative ...... 5,800 279 6,079
Amortization of intangible and
other assets.................... 1,368 56 75 (a) 1,499
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Total operating expenses.... 18,500 868 75 19,443
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OPERATING INCOME.................. 682 1,094 (75) 1,701
INTEREST EXPENSE (INCOME)
Interest expense.................. 5,201 10 (222)(b) 4,989
Interest and other income......... (170) (61) (231)
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INCOME (LOSS) BEFORE INCOME
TAXES............................ (4,349) 1,145 147 (3,057)
INCOME TAX PROVISION
(BENEFIT)........................ (156) 262 106
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NET INCOME (LOSS)................. (4,193) 883 147 (3,163)
PREFERRED STOCK DIVIDENDS......... 488 4,864 (c) 5,352
------- ------ ------- -------
NET INCOME (LOSS) APPLICABLE
TO COMMON STOCKHOLDERS........... $(4,681) $ 883 $(4,717) $(8,515)
------- ------ ------- -------
------- ------ ------- -------
NET INCOME (LOSS) PER
COMMON SHARE..................... $ (6.49) $(10.32)
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WEIGHTED AVERAGE SHARES
OUTSTANDING...................... 721,168 825,086 (d)
------- -------
------- -------
</TABLE>
5
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NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1996
(DOLLARS IN THOUSANDS)
(a) Reflects the amortization of approximately $131 of excess purchase costs
paid for the acquired assets and assumed liabilities of GAC, net of $56 of
historical amortization. While the Company has yet to complete the final
allocation of this excess to specific assets acquired and liabilities
assumed or to make a final determination of the useful lives of the assets
acquired, based on its preliminary estimate, the Company believes that the
excess will be allocated principally to trademarks and goodwill which will
be amortized over 25 years.
(b) Reflects the elimination of $10 of GAC historical interest expense and
elimination of historical interest expense of $212 on the Existing Credit
Facility.
(c) Reflects dividends on the Series B Preferred Stock assuming such shares
had been issued on April 1, 1995. The dividends on the Series C Preferred
Stock will be the same as the dividends on the Series B Preferred Stock.
(d) Includes 103,918 shares issued to purchasers in connection with the CIBC
Financing and the New Common Stock Sale.
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UNAUDITED PRO FORMA BALANCE SHEET
JUNE 30, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
COMPANY GAC
HISTORICAL HISTORICAL (A)
JUNE 30, JUNE 30, PRO FORMA (A)
1996 1996 ADJUSTMENTS PRO FORMA
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<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents........................ $ 7,573 $1,020 $ 76,095 (a) $ 84,688
Marketable securities............................ 78 -- -- 78
Accounts receivable-net.......................... 28,790 1,608 -- 30,398
Inventories...................................... 32,583 2,687 -- 35,270
Prepaid expenses and other current assets........ 13,735 9 (1,100)(j) 12,644
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Total current assets........................... 82,759 5,324 74,995 163,078
PROPERTY, PLANT AND EQUIPMENT-Net.................. 14,458 50 -- 14,508
DEFERRED FINANCING COSTS-Net....................... 7,907 -- -- 7,907
OTHER ASSETS-Net................................... 12,174 8 (600)(k) 11,582
INTANGIBLE ASSETS-Net.............................. 76,088 1,158 11,971 (b) 89,217
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TOTAL ASSETS................................... $193,386 $6,540 $ 86,366 $286,292
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CURRENT LIABILITIES:
Current maturities of long-term debt............. $ -- $ 220 $ (220)(c) $ --
Notes payable.................................... 59,000 (7,000)(h) 52,000
Accounts payable................................. 13,613 738 -- 14,351
Accrued expenses................................. 13,627 1,640 -- 15,267
Other current liabilities........................ 2,700 82 (82)(i) 2,700
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Total current liabilities...................... 88,940 2,680 (7,302) 84,318
LONG-TERM LIABILITIES:
Long-term debt................................... 67,404 592 (592)(c) 67,404
Other long-term liabilities...................... -- --
New Credit Facility.............................. -- -- -- --
Minimum royalty obligation....................... 4,735 -- -- 4,735
Deferred tax liability........................... 141 -- -- 141
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Total long-term liabilities.................... 72,280 592 (592) 72,280
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TOTAL LIABILITIES.............................. $161,220 $3,272 $ (7,894) $156,598
INTERIM PREFERRED FACILITY......................... 19,092 -- (19,092)(l) --
REDEEMABLE PREFERRED STOCK, SERIES B............... -- -- 75,003 (d) 75,003
REDEEMABLE PREFERRED STOCK......................... 12,049 -- -- 12,049
COMMON STOCKHOLDERS' EQUITY:
Common stock..................................... 7 2 327 (e) 336
Note receivable from sale of common stock........ (518) -- -- (518)
Additional paid-in capital....................... 26,787 -- 42,288 (f) 69,075
Treasury stock, at cost.......................... (210) -- -- (210)
Retained earnings (deficit)...................... (24,245) 3,266 (4,266)(e)(g) (25,245)
Cumulative translation adjustment................ (796) -- -- (796)
-------- ------ -------- --------
Total common stockholders' equity.............. 1,025 3,268 38,349 42,642
-------- ------ -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..... $193,386 $6,540 $ 86,366 $286,292
-------- ------ -------- --------
-------- ------ -------- --------
</TABLE>
7
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NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
(DOLLARS IN THOUSANDS)
(a) The adjustment to cash is as follows:
<TABLE>
<S> <C>
Gross proceeds from the CIBC Financing, New Common Stock Sale
and Series B Offering ........................................... $126,100
Repayment of interim preferred facility(1) ........................ (20,092)
Purchase Price of GAC including estimated expenses of $71, net of
prepaid deposit of $600 ......................................... (14,721)
Repayment of GAC debt(2) .......................................... (812)
Repayment of portion of Existing Credit Facility .................. (7,000)
Estimated transaction fees and expenses ........................... (7,380)
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Adjustment to cash .............................................. $ 76,095
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</TABLE>
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(1) The amount actually required to redeem the interim preferred facility
was $20,440, including $440 of accrued dividends.
(2) Repayment of debt of $812 is based upon debt outstanding at June 30,
1996. The actual debt repaid at closing was $796.
(b) Reflects the preliminary allocation of the excess of cost over net
assets acquired of GAC as follows:
<TABLE>
<S> <C>
Purchase price of GAC including estimated expenses of $71.......... $ 15,321
Less: pro forma value of assets acquired........................... (2,192)
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Unallocated excess of purchase price over net assets acquired...... 13,129
Less: historical intangible assets of GAC.......................... (1,158)
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Total ........................................................... $ 11,971
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</TABLE>
The Company has yet to complete its allocation of this excess to specific
assets acquired and liabilities assumed or to make a final determination of
the useful lives of assets acquired. Based on its preliminary estimate, the
Company believes this excess will be allocated to goodwill and trademarks,
which will be amortized over 25 years.
(c) Reflects the repayment of GAC debt outstanding at June 30, 1996.
(d) Reflects the gross proceeds of the Series B Preferred Stock issued
($115,000), less estimated transaction fees and expenses of $7,130, less
an allocation of proceeds to the warrants issued in the Series B Offering
assuming a market value price of $96.23 per share of Common Stock based on
341,550 shares issuable for the 115,000 Warrants issued.
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NOTES TO UNAUDITED PRO FORMA BALANCE SHEET (- Continued)
(DOLLARS IN THOUSANDS)
(e) Reflects the elimination of historical GAC equity.
(f) Reflects the proceeds of the issuance of Common Stock, less estimated
transaction fees of $250.
(g) Represents the write-off of a non-refundable fee on the interim
preferred facility of $1,000.
(h) Reflects the repayment of a portion of the Existing Credit Facility.
(i) Reflects amounts due to shareholders to be repaid by GAC in connection
with the acquisition of GAC.
(j) Reflects the refund of $1,100 fee relating to the interim preferred
facility.
(k) Reflects the application of the $600 prepaid deposit (included in other
assets at June 30, 1996), toward the purchase of GAC.
(l) Reflects the repayment and retirement of the interim preferred facility.
9
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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.
RENAISSANCE COSMETICS, INC.
(Registrant)
/s/ John R. Jackson
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Date: November 1, 1996 By: John R. Jackson
Title: Vice President and General Counsel
