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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
(Amendment No. 1)
FRENCH FRAGRANCES, INC.
(Name of Issuer)
FRENCH FRAGRANCES, INC.
(Name of Person(s) Filing Statement)
SERIES A PREFERRED STOCK, $.01 PAR VALUE
(Title of Class of Securities)
NOT APPLICABLE
(CUSIP Number of Class of Securities)
OSCAR E. MARINA
14100 N.W. 60TH STREET
MIAMI LAKES, FL 33014
(305) 620-9090
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of the Person(s) Filing Statement)
JUNE 10, 1996
(Date Tender Offer First Published, Sent or Given to Security Holders)
Calculation of Filing Fee
Transaction Valuation* Amount of Filing Fee
$2,000,000 $400
*The transaction value has been calculated by multiplying the 2,000 shares of
Series A Preferred Stock to which the tender offer relates by the $100
liquidation value of each share of Series A Preferred Stock
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee
was previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
Amount Previously Paid: $400
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Form or Registration No.: Schedule 13E-4 (File No. 5-17825)
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Filing Party: French Fragrances, Inc.
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Date Filed: June 10, 1996
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ITEM 1. SECURITY AND ISSUER.
(a) The issuer's name is French Fragrances, Inc. (the "Company"), and
its principal executive offices are currently located at 15595 N.W. 15th Avenue,
Miami, Florida 33169.
(b) The title and amount of securities being sought by the Company is
the Series A Preferred Stock, $.01 par value per share ("Series A Preferred"),
of which 20,000 shares are outstanding. The Company is offering to exchange (the
"Exchange Offer") the 20,000 shares of Series A Preferred which are outstanding
along with $3,460,000 aggregate principal amount of 12.5% Secured Subordinated
Debentures Due 2002 (the "12.5% Debentures") for $5,460,000 aggregate principal
amount of newly-issued 7.5% Subordinated Convertible Debentures Due 2006 (the
"7.5% Convertible Debentures"). For purposes of the Exchange Offer, each share
of Series A Preferred is being valued at its liquidation preference of $100.
Accordingly, each share of Series A Preferred will be exchanged for $100
principal amount of 7.5% Convertible Debentures. In addition, each outstanding
12.5% Debenture will be exchanged for the equivalent principal amount of a 7.5%
Convertible Debenture. The Exchange Offer will terminate at 12:00 midnight,
Miami time, on July 8, 1996, unless the Exchange Offer is extended by the
Company (as extended, the "Expiration Date").
The 7.5% Convertible Debentures are anticipated to be issued and the
Exchange Offer consummated on or about July 9, 1996. On July 3, 1996 the public
offering (the "Offering") by the Company of 3,250,000 shares of Common Stock
$.01 par value per share ("Common Stock"), (3,733,000 shares if the
underwriter's over-allotment option is exercised), and by certain shareholders
of the Company of 1,750,000 shares of Common Stock (2,017,000 shares if the
underwriter's over-allotment option is exercised) closed. Rafael Kravec, the
President and Chief Executive Officer of the Company, sold 500,000 shares of
Common Stock in the Offering. No other director, officer or affiliate sold
shares of Common Stock in the Offering. The Company filed a Registration
Statement on Form S-1 (the "Registration Statement") with the Securities and
Exchange Commission (Registration No. 333-4588) in connection with the shares of
Common Stock to be issued by the Company and by certain shareholders of the
Company in connection with the Offering. The 7.5% Convertible Debentures will be
convertible at any time into shares of Common Stock based on a conversion price
of 120% of the price to the public of the Common Stock in the Offering (the
"Conversion Price").
All of the 20,000 shares of Series A Preferred which are outstanding
are to be solicited in the Exchange Offer from officers, directors and
affiliates of the Company, including (i) 10,000 which are being solicited from
Bedford Capital Corporation ("Bedford") (which beneficially owns over 50% of the
Common Stock) or its assigns, (ii) 4,950 shares which are being solicited from
Mr. Kravec, (iii) 3,050 shares which are being solicited from National Trading
Manufacturing, Inc. ("National Trading"), a company which is wholly-owned by Mr.
Kravec, and (iv) 2,000 shares which are being solicited from Fred Berens, a
director of the Company. Bedford or its assigns, National Trading, Rafael Kravec
and Fred Berens are collectively referred to as the "Eligible Shareholders." The
officers, directors and affiliates of the Company have advised the Company that
they intend to tender their shares of Series A Preferred pursuant to the
Exchange Offer.
All of the $3,460,000 principal amount of 12.5% Debentures which are
outstanding are to be solicited from officers, directors and affiliates of the
Company, including (i) $1,730,000 which are being solicited from Bedford or its
assigns, (ii) $1,384,000 principal amount which are being solicited from
National Trading, and (iii) $346,000 principal amount which are being solicted
from Mr. Berens. The officers, directors and affiliates of the Company have
advised the Company that they intend to tender their 12.5% Debentures pursuant
to the Exchange Offer.
(c) There is currently no established trading market for the Series A
Preferred or 12.5% Debentures, and there will not be an established trading
market for the 7.5% Convertible Debentures.
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(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The source and total amount of funds for the purchase of the
20,000 outstanding shares of Series A Preferred is $2,000,000 aggregate
principal amount of newly-issued 7.5% Convertible Debentures. The source and
total amount of funds for the purchase of the $3,460,000 principal amount of
12.5% Debentures is the equivalent principal amount of newly-issued 7.5%
Convertible Debentures.
(b) The 7.5% Convertible Debentures will (i) be unsecured, (ii)
require interest only payments at 7.5% per annum, payable semi-annually until
maturity ten years from the date of issue, at which time the entire unpaid
principal amount and any unpaid accrued interest is to be due and payable, (iii)
be convertible at any time at the option of the holder at the Conversion Price,
and (iv) be redeemable, at the option of the Company, at their principal amount
commencing three years from the date of issue, but only in the event the Common
Stock, at the time the redemption notice is delivered by the Company, has been
trading at not less than 200% of the Conversion Price for 20 consecutive trading
days.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE
ISSUER OR AFFILIATE.
The purposes of the Exchange Offer are to simplify the capital
structure of the Company in connection with the Offering and to reduce interest
expense. The shares of Series A Preferred will be retired.
(a) Except with respect to the securities involved in the Exchange
Offer and the shares of Common Stock to be sold in connection with the Offering,
the Company is not aware of any other plans or proposals by any person to
acquire or dispose of additional securities of the Company.
(b) - (j) None.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
(a) None.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE ISSUER'S SECURITIES.
In connection with the Exchange Offer and the Offering, the Company
proposed to enter into an Agreement and Power of Attorney (the "Agreement") with
(i) the Eligible Shareholders, (ii) two officers of Bedford, as
Attorneys-in-Fact for the Eligible Shareholders, and (iii) Bedford, as custodian
for the securities of the Eligible Shareholders which are involved in the
Exchange Offer and the Offering, pursuant to which the Eligible Shareholders
after reviewing the Preliminary Prospectus relating to the Offering and this
Information Statement represented and covenanted, among other things, (a)
whether they elected to accept the Exchange Offer, acknowledging that they have
the right to withdraw their tender of shares of Series A Preferred and 12.5%
Debentures until the Expiration Date even if they agree to accept, (b) if they
desired to sell shares of Common Stock, and the amount of such shares they
desire to sell, in the Offering, (c) that they would not, without the prior
written consent of the representatives to the underwriters in the Offering,
offer or sell any shares of Common Stock or security convertible into Common
Stock for 180 days after the closing of the Offering (the "Lock-up Covenant"),
and
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(d) that they waived any first refusal rights they have to shares of
Common Stock owned by other Eligible Shareholders. The Company's officers,
directors and certain owners of the Common Stock also executed separate
agreements containing the Lock-Up Covenant. A copy of the Agreement is being
provided with this Statement.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
None.
ITEM 7. FINANCIAL INFORMATION.
(a)(1) Reference is made to the Company's Annual Report on Form 10-K
for the Fiscal Year Ended January 31, 1996 (the "Form 10-K")
and the Company's Quarterly Report on Form 10-Q for the
Quarter Ended April 30, 1996 (the "Form 10-Q"). The
information required herein is incorporated by reference
from Item 8 of the Form 10-K and Item 1 of the Form 10-Q.
(2) Not applicable.
(3) Attached as Exhibit A to this Statement are the ratio of
earnings to fixed charges of the Company for the three months
ended April 30, 1996, fiscal year ended January 31, 1996,
the seven months ended January 31, 1995 and the fiscal year
ended June 30, 1994.
(4) Attached as Exhibit B to this Statement is the computation of
book value per share of the Company as of January 31, 1996
and April 30, 1996.
(b)(1) - (3) Pro forma data disclosing the effect of the Exchange Offer is
not material to the Company's balance sheet, statement of
income, earnings per share amounts, ratio of earnings to fixed
charges and book value per share.
ITEM 8. ADDITIONAL INFORMATION.
(a) - (e) Not applicable.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Information Statement Relating to the Exchange Offer.
* (2) Form of Agreement and Power of Attorney between the Company,
Bedford, J.W. Nevil Thomas, E. Scott Beattie and an Eligible
Shareholder.
*(b) Form of 7.5% Convertible Debenture.
(c) See (a)(2).
(d) None.
(e) - (f) Not applicable.
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*Previously Filed as part of this statement.
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 1 to Schedule 13E-4
is true, complete and correct.
FRENCH FRAGRANCES, INC.
JULY 8, 1996 /s/ OSCAR E. MARINA
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(Date) (Signature)
VICE PRESIDENT
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(Title)
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<TABLE>
FRENCH FRAGRANCES, INC.
EXHIBIT A
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<CAPTION>
Three Months Seven Months
Ended Years Ended Ended Year Ended
April 30, 1996 January 31, 1996 January 31, 1995 January 31, 1994
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<S> <C> <C> <C> <C>
Earnings, as defined:
Net income $ 292,345 $3,007,118 $2,491,895 $1,011,367
Income taxes 160,200 1,930,691 1,490,119 530,510
Fixed charges, as below 1,201,458 4,157,576 1,413,636 1,546,240
---------- --------- --------- ---------
Total earnings, as defined $1,654,003 $9,095,385 $5,395,650 $3,088,117
========== ========= ========= =========
Fixed charges, as defined:
Interest expense $1,201,458 $4,157,576 $1,413,636 $1,546,240
---------- --------- --------- ---------
Total fixed charges, as defined $1,201,458 $4,157,576 $1,413,636 $1,546,240
========== ========= ========= =========
Ratio of earnings to fixed charges 1.37 2.19 3.82 2.00
</TABLE>
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FRENCH FRAGRANCES, INC.
EXHIBIT B
COMPUTATION OF BOOK VALUE PER SHARE
April 30, 1996 January 31, 1996
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Total shareholders' equity $17,877,369 $17,539,310
Total shares issued: 9,641,290 9,641,290 9,641,290
Book value per share 1.85 1.82
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Item 9(a)(1)
INFORMATION STATEMENT RELATING TO TENDER OFFER
BY
FRENCH FRAGRANCES, INC.
FOR ITS OUTSTANDING SHARES OF SERIES A PREFERRED STOCK
AND OUTSTANDING 12.5% SECURED SUBORDINATED DEBENTURES
French Fragrances, Inc. (the "Company"), is conducting a tender offer
for all of its Series A Preferred Stock, $.01 par value per share ("Series A
Preferred"), and all of its 12.5% Secured Subordinated Debentures Due 2002
("12.5% Debentures"). The Company is offering to exchange (the "Exchange Offer")
the 20,000 shares of Series A Preferred which are outstanding along with the
$3,146,000 aggregate principal amount of 12.5% Debentures which are outstanding,
for $5,146,000 aggregate principal amount of newly-issued 7.5% Subordinated
Convertible Debentures Due 2006 ("7.5% Convertible Debentures"). For purposes of
the Exchange Offer, each share of Series A Preferred is being valued at its
liquidation preference of $100. There is currently no established trading market
for the Series A Preferred or 12.5% Debentures, and there will not be an
established trading market for the 7.5% Convertible Debentures.
THE EXCHANGE OFFER WILL TERMINATE AT 12:00 MIDNIGHT, MIAMI TIME,
ON JUlY 8, 1996, UNLESS THE EXCHANGE OFFER IS EXTENDED BY THE COMPANY (AS
EXTENDED, THE "EXPIRATION DATE"). PERSONS TENDERING SHARES OF SERIES A PREFERRED
AND 12.5% DEBENTURES WILL HAVE THE RIGHT TO WITHDRAW THEIR TENDER UNTIL THE
EXPIRATION DATE. ACCEPTANCE OF THE EXCHANGE OFFERS BY THE HOLDERS OF SERIES A
PREFERRED AND 12.5% DEBENTURES IS VOLUNTARY AND THE HOLDERS SHOULD CAREFULLY
CONSIDER THE INFORMATION SET FORTH HEREIN AND IN THE PRELIMINARY PROSPECTUS
CONTAINED IN THE REGISTRATION STATEMENT (AS DEFINED BELOW) BEFORE MAKING A
DECISION WHETHER TO TENDER PURSUANT TO THE EXCHANGE OFFER. HOLDERS OF SERIES A
PREFERRED AND 12.5% DEBENTURES WHO DO NOT ACCEPT THE EXCHANGE OFFER WILL RETAIN
SUCH SECURITIES AND WILL NOT BE ENTITLED TO APPRAISAL RIGHTS IN CONNECTION WITH
THE EXCHANGE OFFER.
The 7.5% Convertible Debentures are anticipated to be issued and the
Exchange Offer consummated on or about July 9, 1996. On July 3, 1996, a public
offering (the "Offering") by the Company of 3,250,000 shares of Common Stock
$.01 par value per share ("Common Stock"), (3,733,000 shares if the
underwriter's over-allotment option is exercised), and by certain shareholders
of the Company of 1,750,000 shares of Common Stock (2,017,000 shares if the
underwriter's over-allotment option is exercised) closed. Rafael Kravec, the
President and Chief Executive Officer of the Company, sold 500,000 shares of
Common Stock in the Offering. No other director, officer or affiliate sold
shares of Common Stock in the Offering. The Company has filed a Registration
Statement on Form S-1 (the "Registration Statement") with the Securities and
Exchange Commission (Registration No. 333-4588) in connection with the shares of
Common Stock to be issued by the Company and by certain shareholders of the
Company in connection with the Offering. Except with respect to the securities
involved in the Exchange Offer and the shares of Common Stock to be sold in
connection with the Offering, the Company is not aware of any other plans or
proposals by any
<PAGE>
person to acquire or dispose of additional securities of the Company.
The 7.5% Convertible Debentures will (i) be unsecured, (ii) require
interest only payments at 7.5% per annum, payable semi-annually until maturity
ten years from the date of issue, at which time the entire unpaid principal
amount and any accrued unpaid interest is to be due and payable, (iii) be
convertible at any time at the option of the holder at 120% of the price of the
Common Stock in the Offering (the "Conversion Price"), and (iv) be redeemable at
their principal amount after three years from the date of issue, but only in the
event the Common Stock, at the time the redemption notice is delivered by the
Company, has been trading at not less than 200% of the Conversion Price for 20
consecutive trading days.
The purposes of the Exchange Offer are to simplify the capital
structure of the Company in connection with the Offering and to reduce interest
expense.
All of the 20,000 shares of Series A Preferred which are outstanding
are to be solicited in the Exchange Offer from officers, directors and
affiliates of the Company, including (i) 10,000 which are being solicited from
Bedford Capital Corporation ("Bedford") (which beneficially owns over 50% of the
Common Stock) or its assigns; (ii) 4,950 shares which are being solicited from
Mr. Kravec, (iii) 3,050 shares which are being solicited from National Trading
Manufacturing, Inc. ("National Trading"), a company which is wholly-owned by Mr.
Kravec, and (iv) 2,000 shares which are being solicited from Fred Berens, a
director of the Company. Bedford or its assigns, National Trading, Rafael Kravec
and Fred Berens are collectively referred to as the "Eligible Shareholders." The
officers, directors and affiliates of the Company have advised the Company that
they intend to tender their shares of Series A Preferred pursuant to the
Exchange Offer.
All of the $3,460,000 principal amount of 12.5% Debentures which are
outstanding are to be solicited from officers, directors and affiliates of the
Company, including (i) $1,730,000 which are being solicited from Bedford, (ii)
$1,384,000 principal amount which are being solicited from National Trading, and
(iii) $346,000 principal amount which are being solicted from Mr. Berens. The
officers, directors and affiliates of the Company have advised the Company that
they intend to tender their 12.5% Debentures pursuant to the Exchange Offer.
In connection with the Exchange Offer and the Offering, the Company
is proposing to enter into an Agreement and Power of Attorney (the "Agreement")
with (i) the Eligible Shareholders, (ii) two officers of Bedford, as
Attorneys-in-Fact for the Eligible Shareholders, and (iii) Bedford, as custodian
for the securities of the Eligible Shareholders which are involved in the
Exchange Offer and the Offering, pursuant to which the Eligible Shareholders
after reviewing the Preliminary Prospectus relating to the Offering and this
Information Statement represented and covenanted, among other things, (a)
whether they elected to accept the Exchange Offer, acknowledging that they have
the right to withdraw their tender of shares of Series A Preferred and 12.5%
Debentures until the Expiration Date even if they agree to accept, (b) if they
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desired to sell shares of Common Stock, and the amount of such shares they
desire to sell, in the Offering, (c) that they would not, without the prior
written consent of the representatives to the underwriters in the Offering,
offer or sell any shares of Common Stock or security convertible into Common
Stock for 180 days after the closing of the Offering (the "Lock-up Covenant"),
and (d) that they waived any first refusal rights they have to shares of Common
Stock owned by other Eligible Shareholders. The Company's officers, directors
and certain owners of the Common Stock also executed separate agreements
containing the Lock-Up Covenant.
EACH HOLDER OF SERIES A PREFERRED AND 12.5% DEBENTURES WHO ELECTS TO
ACCEPT THE EXCHANGE OFFER MUST NOTE ITS ACCEPTANCE IN THE AGREEMENT AND EXECUTE
AND DELIVER THE AGREEMENT TO THE COMPANY, THE ATTORNEYS-IN-FACT OR BEDFORD PRIOR
TO THE EXPIRATION DATE.
Attached to this Information Statement are the financial statements
of the Company as filed with the Commission in the Preliminary Prospectus
contained in the Registration Statement.
The Company's principal executive offices are currently located at
15595 N.W. 15th Avenue, Miami, Florida 33169, and its telephone number is (305)
620-9090. Questions and requests for assistance should be directed to Oscar
Marina, Secretary of the Company, or to Bedford Capital Corporation, as
custodian for the shares of Series A Preferred and 12.5% Debentures tendered in
the Exchange Offer, at 40 King Street West, Suite 4712, Toronto, Ontario M5H
3Y2, Canada, Attention: J.W. Nevil Thomas (Tel. No. (406) 366-6130).
No person is being paid a commission or compensation in connection
with the Exchange Offer, provided that the Attorneys in fact and Bedford will be
entitled to reimbursement for reasonable out-of-pocket expenses incurred in
performing their duties under the Agreement.
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