-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TsV2fp+DpSbOO1C8jE49JZPFS+v+orHzcg/Sr6D+Lwzk23r40Lg2pdS4pTj5gAGL kZ4UohKDeZiRRORJSTbilQ== 0000854873-96-000003.txt : 19961001 0000854873-96-000003.hdr.sgml : 19961001 ACCESSION NUMBER: 0000854873-96-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961229 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960930 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: RALLYS HAMBURGERS INC CENTRAL INDEX KEY: 0000854873 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 621210077 STATE OF INCORPORATION: DE FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-17980 FILM NUMBER: 96636937 BUSINESS ADDRESS: STREET 1: 10002 SHELBYVILLE RD STE 150 CITY: LOUISVILLE STATE: KY ZIP: 40223 BUSINESS PHONE: 5022458900 MAIL ADDRESS: STREET 1: 10002 SHELBYVILLE RD STREET 2: STE 150 CITY: LOUISVILLE STATE: KY ZIP: 40223 FORMER COMPANY: FORMER CONFORMED NAME: RALLYS INC DATE OF NAME CHANGE: 19920703 8-K 1 RALLY'S HAMBURGERS, INC. FORM 8-K 9/30/96 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) . . . . . . .September 20, 1996 RALLY'S HAMBURGERS, INC. ------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-17980 62-1210077 - ---------------- ---------------------- ---------------- (State or other (Commission File Number) (I.R.S. Employer jurisdiction of Identification incorporation) Number) 10002 Shelbyville Road, Suite 150 Louisville, Kentucky 40223 ------------------------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code . . . . . . . (502) 245-8900 Not applicable --------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events In April 1996, the NASDAQ Stock Market, Inc. informed Rally's Hamburgers, Inc., a Delaware Corporation (the "Company"), that it was reviewing the eligibility of the Company for continued quotation of its stock on the NASDAQ National Market System ("NNS"). Rule 4450 (a)(3) of the National Association of Securities Dealers, Inc., provides that an issuer of a NNS security must have net tangible assets (total assets minus liabilities and goodwill) of at least $4 million if the issuer has sustained losses from continuing operations and/or net losses in three of its four most recent fiscal years (the "Net Tangible Asset Test"). As of the end of the 1995 fiscal year, the Company had net tangible assets in the net negative amount of $4,598,000, and had incurred net losses in its last three fiscal years. On June 13, 1996, a NASDAQ Qualifications Hearing Panel (the "Panel") granted the Company a temporary waiver of the Net Asset Test through September 30, 1996. The Panel required that the Company make a public filing with the Securities and Exchange Commission on or before September 30, 1996, which filing must contain a pro forma balance sheet with a historical basis not older than 45 days and a corresponding statement of operations, and must further evidence compliance with the Net Tangible Asset Test. This report is filed in compliance with such requirement of the Panel. Attached hereto as Exhibit 99.1 is a pro forma balance sheet as of August 25, 1996, and a pro forma statement of operations for the eight periods ended August 25, 1996. Item 7. Financial Statements and Exhibits The following exhibit is filed as a part of this report. Exhibit Description 99.1 Pro forma balance sheet as of August 25, 1996, and pro forma statement of operations for the eight periods ended August 25, 1996 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 hereunto duly authorized. Date: September 30, 1996 RALLY'S HAMBURGERS, INC., a Delaware corporation by: /s/ Michael E. Foss ------------------------------------ Michael E. Foss Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) EX-99.1 2 PRO FORMA BALANCE SHEET AS OF AUGUST 25,1996, AND pro forma statement of operations for the eight periods ended August 25, 1996
EXHIBIT 99.1 RALLY'S HAMBURGERS, INC. UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET As of August 25, 1996 Pro Forma Adjustments Historical (Note 3) Pro Forma ---------------- -------------------- ----------------- Current assets $ 7,106,000 $ 10,308,000 A $ 15,314,000 (2,100,000) B Assets held for sale 2,445,000 2,445,000 Property and equipment, net 72,365,000 72,365,000 Other assets 31,249,000 31,249,000 ================ ==================== ================= Total assets $ 113,165,000 $ 8,208,000 $ 121,373,000 ================ ==================== ================= Accrued liabilities $ 15,230,000 $ (2,100,000) B $ 13,130,000 Other current liabilities 11,182,000 11,182,000 Senior Notes 62,502,000 62,502,000 Other long term debt 5,015,000 5,015,000 Obligations under capital leases 5,531,000 5,531,000 Other liabilities 6,695,000 6,695,000 ---------------- -------------------- ----------------- Total liabilities 106,155,000 (2,100,000) 104,055,000 Stockholders' equity 7,010,000 10,308,000 A 17,318,000 ================ ==================== ================= Total liabilities and stockholders' equity $ 113,165,000 $ 8,208,000 $ 121,373,000 ================ ==================== ================= The accompanying notes are an integral part of this pro forma balance sheet.
RALLY'S HAMBURGERS, INC. UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS For the Eight Periods Ended August 25, 1996 Pro Forma Adjustments Historical (Note 3) Pro Forma ----------------- ---------------- ---------------- Revenues: Restaurant sales $ 109,881,000 $ $ 109,881,000 -- Franchise revenues and fees 3,907,000 -- 3,907,000 Other 140,000 -- 140,000 ----------------- ---------------- ---------------- Total revenues 113,928,000 -- 113,928,000 ----------------- ---------------- ---------------- Costs and expenses: Restaurant costs of sales 38,869,000 -- 38,869,000 Restaurant operating expenses exclusive of depreciation and amortization and other operating expenses shown separately below 51,095,000 -- 51,095,000 General and administrative expenses 10,278,000 -- 10,278,000 Advertising and promotion expenses 6,011,000 -- 6,011,000 Depreciation and amortization 7,061,000 -- 7,061,000 Other charges 754,000 -- 754,000 ----------------- ---------------- ---------------- Total costs and expenses 114,068,000 -- 114,068,000 ----------------- ---------------- ---------------- Loss from operations (140,000) -- (140,000) ----------------- ---------------- ---------------- Other income (expense): Interest expense (5,829,000) 100,000 C (5,729,000) Interest income 395,000 -- 395,000 Other (24,000) -- (24,000) ----------------- ---------------- ---------------- Total other (expense) (5,458,000) 100,000 (5,358,000) ----------------- ---------------- ---------------- Income (loss) before income taxes and extraordinary item (5,598,000) 100,000 C (5,498,000) Benefit for income taxes (1,386,000) -- (1,386,000) ----------------- ---------------- ---------------- Net income (loss) before extraordinary item $ (4,212,000) $ 100,000 $ (4,112,000) ================= ================ ================ Net loss per share before extraordinary item $ (.20) ================ Weighted average shares outstanding 20,598,000 ================ The accompanying notes are an integral part of this pro forma financial statement.
RALLY'S HAMBURGERS, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies--Basis of Presentation - The accompanying historical financial statements have been prepared by Rally's Hamburgers, Inc. without audit pursuant to a request from a Nasdaq Qualifications Hearing Panel of The NASDAQ Stock Market, Inc. ("NASDAQ"). The request was for pro forma information with a historical basis not older than 45 days indicating compliance with the continuing listing requirements promulgated by that body for continued listing on the National Market System ("NNM"). Although generally consistent with the rules and regulations of the Securities and Exchange Commission ("SEC") regarding pro forma financial information, the statements have been prepared intra-quarter based on the latest available historical balance sheet (as of August 25, 1996) and the year to date statement of operations (through August 25, 1996) to satisfy the age parameter specified by NASDAQ. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principals have been condensed or omitted pursuant to SEC rules and regulations, although the Company believes the disclosures made are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the historical financial statements and notes thereto contained in the Company's annual and quarterly filings on Forms 10-K and 10-Q, respectively. Forward looking statements contained herein should be read in conjunction with the cautionary statements contained in the 10-K. On January 29, 1996, the Company repurchased, in two transactions, at a price of $678.75 per $1,000 principal amount, $22 million face value of its 9 7/8% Senior Notes due in the year 2000 from GIANT GROUP, LTD. ("GIANT"). The repurchase resulted in an extraordinary gain, net of taxes of $1.8 million, of $4.5 million or $.29 per share. This gain enabled the Company to utilize net operating loss carry forwards and record a tax benefit during the period of $1.8 million, which is included in Net loss before extraordinary item. The extraordinary gain has been appropriately excluded from the accompanying unaudited pro forma condensed statement of operations. 2. Introduction to Pro Forma Information - In April 1996, NASDAQ informed the Company that it was reviewing the eligibility of the Company for continued quotation of its stock on the NNM. There are five criteria that must be substantially met for continued quotation on the NNM. While the Company then exceeded the requirements on four of the five tests, it did not meet the test for net tangible assets, which excludes goodwill. Rule 4450(a)(3) of the National Association of Securities Dealers, Inc. ("NASD") provides that an issuer of a NNM security must have net tangible assets (total assets minus liabilities and goodwill) of at least $4 million if the issuer has sustained losses from continuing operations and/or net losses in three of its four most recent fiscal years (the "Net Tangible Asset Test"). The Company has incurred net losses in its last three fiscal years. As of the end of the 1995 fiscal year, the Company had net tangible assets in the net negative amount of approximately $4,598,000. On June 6, 1996 the Company had a hearing before a Nasdaq Qualifications Hearing panel (the "Panel") with regard to the Company's request for an exception to the Net Tangible Asset Test. On June 13, 1996, the Panel granted the Company a conditional exception to the Net Tangible Assets Test based upon its finding that the Company presented a plan of compliance that was then in progress, which had a high likelihood of successful completion, and which could be completed in a reasonable period of time. The Panel determined that the Company must make a public filing with the SEC and NASDAQ on or before September 30, 1996, which filing must contain a pro forma balance sheet with a historical basis not older than 45 days and a corresponding statement of operations and must further evidence compliance with the Net Tangible Asset Test, and with all other requirements for listing on the NNM. The Company's plan RALLY'S HAMBURGERS, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS--CONTINUED for remedying the net tangible asset deficiency, as well as providing additional working capital for new store construction, refurbishment of some existing restaurants as well as for other general corporate purposes, including the reduction of outstanding indebtedness, included completion of a Shareholders' Rights Offering (the "Rights Offering"). The Rights Offering contemplated in the Plan was sold only via the Company's Prospectus dated September 5, 1996, such sale expiring on September 20, 1996. The Offering raised gross proceeds of $10.8 million. The expected net proceeds of the Offering and the expected liquidation of existing debt of approximately $2 million have been included in the accompanying unaudited pro forma consolidated condensed balance sheet and statement of operations. The Company believes that the pro forma consolidated condensed financial statements herein demonstrate compliance with the Net Tangible Asset Test. 3. Explanation of Pro Forma Adjustments - The Pro Forma adjustments to the accompanying historical financial statements are described below:
Adjustment Description Debit (Credit) - ---------- ----------- -------------- A. Issuance of shares of Common Stock sold in the Rights Offering: Proceeds from issuance of Common Stock at a price of $2.25 per share, net of estimated offering expenses of $550,000 $10,308,000 Common stock (482,000) Additional paid-in capital (9,826,000) B. Uses of cash: Payment of debt 2,100,000 Uses of cash (2,100,000) C. To eliminate interest expense on debt retired with the proceeds from the issuance of Common Stock in the Rights Offering. - ----------------
The Company anticipates that the remaining net proceeds from the Rights Offering will be used to build new restaurants, refurbish certain existing restaurants and for other general corporate purposes. However, no adjustments have been made in these pro forma statements to reflect any anticipated uses of the proceeds other than the planned payment of debt. -----END PRIVACY-ENHANCED MESSAGE-----