8-K 1 a2046938z8-k.txt 8-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K [X] Current Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 Date of Report (Date of earliest event reported) APRIL 12, 2001 NE RESTAURANT COMPANY, INC. (Exact name of registrant as specified in its charter) Commission File Number 333-62775 DELAWARE 06-1311266 -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 5 CLOCK TOWER PLACE, MAYNARD, MASSACHUSETTS 01754 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (978) 897-1400 -------------- N/A (Former Name or former address, if changed since last report) Item 5. Other Information On April 12, 2001, NE Restaurant Company, Inc. (Company) completed its sale of 40 Chili's and seven On The Border restaurants to the chains' franchisor Brinker International, Inc. of Dallas, Texas (Brinker) (the Brinker Sale). Total consideration, subject to closing adjustments, was $93.5 million. Brinker acquired the inventory, facilities, equipment, management teams associated with these restaurants, as well as the four Chili's restaurants currently under development by the Company. Further, Brinker assumed the mortgage debt on the Company's Chili's and On The Border restaurants. See Item 7. The statements contained herein that are not historical facts are forward-looking statements. These forward-looking statements involve risks and uncertainties and, consequently, could be affected by general business and economic conditions, the impact of competition, the seasonality of the company's business, governmental regulations, and inflation. Item 7. Financial Statements and Exhibits. (b) Pro forma financial information. The Proforma Consolidated Balance Sheet as of January 3, 2001 and the Proforma Consolidated Statement of Operations for the 53 Weeks Ended January 3, 2001 presented herein were derived from the Company's Form 10-K filed March 30, 2001. These proforma financial statements incorporate the appropriate adjustments required by Article 11 of Regulation S-X . [The balance of this page intentionally blank]. NE RESTAURANT COMPANY, INC. CONSOLIDATED PRO FORMA BALANCE SHEET (Dollars in thousands) As of January 3, 2001
As Brinker Sale Pro Forma Filed (Unaudited) (Unaudited) ------------------ ------------------ ----------------- ASSETS Current Assets: Cash $7,602 $52,172 $59,774 Credit card receivables 838 - 838 Inventories 1,885 (850) 1,035 Prepaid expenses and other current assets 2,617 (49) 2,568 Assets held for sale - short term 200 - 200 Prepaid and current deferred income taxes 5,433 (55) 5,378 ------------------ ------------------ ----------------- Total current assets 18,575 51,218 69,793 ------------------ ------------------ ----------------- Property and Equipment, at cost: Land and land right 7,858 (5,876) 1,982 Buildings 12,549 (5,953) 6,596 Leasehold improvements 83,973 (37,692) 46,281 Furniture and equipment 50,455 (25,201) 25,254 ------------------ ------------------ ----------------- 154,835 (74,722) 80,113 Less - Accumulated depreciation (40,196) 20,931 (19,265) ------------------ ------------------ ----------------- 114,639 (53,791) 60,848 Construction work in process 2,917 (338) 2,579 ------------------ ------------------ ----------------- Net property and equipment 117,556 (54,129) 63,427 Goodwill, net 28,404 - 28,404 Deferred Finance Costs, net 8,025 (2,115) 5,910 Liquor Licenses 3,015 (1,208) 1,807 Deferred Taxes, noncurrent 6,451 (4,853) 1,598 Other Assets, net 1,569 (1,244) 325 ------------------ ------------------ ----------------- TOTAL ASSETS $183,595 $ (12,331) $171,264 ================== ================== ================= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Mortgage loans payable - current portion $1,541 $ (1,541) $ - Accounts payable 14,510 978 15,488 Accrued expenses 18,817 (1,098) 17,719 Income taxes payable - 9,784 9,784 Capital lease obligation - current portion 37 (37) - ------------------ ------------------ ----------------- Total current liabiliites 34,905 8,086 42,991 Mortgage Loan Payable, net of current portion 39,737 (39,737) - Bonds Payable, net of current portion 100,000 - 100,000 Deferred Rent and Other Long-Term Liabilities 4,887 (2,633) 2,254 ------------------ ------------------ ----------------- Total liabilities 179,529 (34,284) 145,245 Commitments and Contingencies Stockholders' Equity: Common stock, $.01 par value 37 - 37 Less - Treasury shares (8,088) - (8,088) Additional paid-in capital 29,004 - 29,004 Retained earnings (Accumulated deficit) (16,887) 21,953 5,066 ------------------ ------------------ ----------------- Total stockholders' equity 4,066 21,953 26,019 ------------------ ------------------ ----------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $183,595 $ (12,331) $171,264 ================== ================== =================
See Notes to Unaudited Pro Forma Financial Statements. NE RESTAURANT COMPANY, INC. CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS (Dollars in thousands except share and per share data) 53 Weeks Ended January 3, 2001
As Brinker Sale Sal & Vinnie's Pro Forma Filed (Unaudited) Abandonment (Unaudited) ----------- ---------------- ---------------- --------------- Net sales $284,933 $ (138,410) $ (2,622) $ 143,901 ----------- ---------------- ---------------- --------------- Cost of sales and expenses Cost of sales 74,266 (38,150) (917) 35,199 Operating expenses 162,577 (75,893) (1,668) 85,016 General and administrative expenses 16,386 (4,338) - 12,048 Deferred rent, depreciation, amortization and preopening expenses 18,127 (6,290) (183) 11,654 Loss on abandonment of Sal & Vinnie's 2,031 - (2,031) - ----------- ---------------- ---------------- --------------- Total cost of sales and expenses 273,387 (124,671) (4,799) 143,917 ----------- ---------------- ---------------- --------------- Income (loss) from operations 11,546 (13,739) 2,177 (16) Interest expense, net 15,050 (6,471) - 8,579 ----------- ---------------- ---------------- --------------- Loss before income tax benefit (3,504) (7,268) 2,177 (8,595) Income tax benefit (115) (2,907) 871 (2,151) Gain on Brinker Sale, net of income tax - 21,953 - 21,953 ----------- ---------------- ---------------- --------------- Net income (loss) $ (3,389) $ 17,592 $ 1,306 $ 15,509 =========== ================ ================ =============== Basic income (loss) per share: Income (loss) per share before Brinker Sale $ (1.14) (1.46) $ 0.44 $ (2.16) Gain on Brinker Sale, net of income tax - 7.36 - 7.36 ----------- ---------------- ---------------- ---------------- Basic income (loss) per share $ (1.14) $ 5.90 $ 0.44 $ 5.20 =========== ================ ================ ================ Weighted Average Shares Outstanding 2,981,414 2,981,414 2,981,414 2,981,414 Diluted income (loss) per share: Income (loss) per share before Brinker Sale $ (1.14) $ (1.46) $ 0.42 $ (2.16) Gain on Brinker Sale, net of income tax - 7.11 - 7.11 ----------- ---------------- ---------------- ---------------- Diluted income (loss) per share $ (1.14) $ 5.65 $ 0.42 $ 4.95 =========== ================ ================ ================ Weighted Average Shares Outstanding 2,981,414 3,087,377 3,087,377 3,087,377
See Notes to Unaudited Pro Forma Financial Statements. NE RESTAURANT COMPANY, INC. NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS 1. The pro forma Consolidated Balance Sheet reflects the recognition of the Brinker Sale as of January 3, 2001. a. Cash reflects the $93.5 million total consideration less mortgage debt assumed of $41.3 million. b. Income tax payable and Deferred Taxes (noncurrent), reflect the tax liability associated with the gain on the transaction. This liability is less than the statutory rate of 35% due to the availability of net operating loss and tax credit carry forwards from prior years. c. The increase in Retained earnings reflects the gain on the transaction, net of income tax. d. The unamortized balances of Finance Costs and Development Fees, as well as Deferred Rent liability balances, are written off by the Company as a result of the Brinker Sale. e. All other adjustments are to reflect assets purchased and liabilities assumed by Brinker. 2. The abandonment of Sal & Vinnie's occurred in December 2000 and, accordingly, was previously reported in the Consolidated Balance Sheet as filed in Form 10-K on March 30, 2001. 3. The pro forma Consolidated Statement of Operations reflects (a) the recognition of the Brinker Sale; and (b) the abandonment of Sal & Vinnie's as if the dispositions occurred on December 30, 1999. a. Operating results of the Brinker restaurants and Sal & Vinnie's for the fiscal year ended January 3, 2001 are removed for the entire period. b. The Loss on abandonment of Sal & Vinnie's is removed for the fiscal year ended January 3, 2001. c. Gain on sale reflects the gain on the Brinker Sale, net of income tax. [The balance of this page intentionally blank] c) Exhibits (99) Press release, dated April 12, 2001. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NE RESTAURANT COMPANY, INC. -------------------------------------------- (Registrant) Date: April 27, 2001 By: /s/ Kurt J. Schnaubelt ---------------------------------------------- Kurt J. Schnaubelt Vice President - Finance and Chief Accounting Officer