-----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, B6t+O9bTqdpfIFEVeTTUaTjuD9QjsJ2KuV14goy7dAZjoX7EUlyglkvOwZa+tAZN GNR+BNKTLQl/CR3zgBxOmg== 0000950144-98-002250.txt : 19980304 0000950144-98-002250.hdr.sgml : 19980304 ACCESSION NUMBER: 0000950144-98-002250 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971218 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980303 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/A SEC ACT: SEC FILE NUMBER: 000-17980 FILM NUMBER: 98556746 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/A 1 RALLY'S HAMBURGERS 8-K AMENDMENT 1 1 SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 8-K/A (Amendment No. 1) CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) December 18, 1997 RALLY'S HAMBURGERS, INC.. (Exact Name of Registrant as specified in Charter) Delaware 0-17980 62-1210077 - -------------------------------------------------------------------------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification incorporation) Number) 600 Cleveland Street, Eighth Floor, Clearwater, Florida 34615 (Address of principal executive offices) (Zip Code) (813) 441-3500 (Registrant's telephone number, including area code) 10002 Shelbyville Road, Louisville, Kentucky 40223 (Former name or former address, if changed since last report) 1 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On December 18, 1997, Rally's Hamburgers, Inc., a Delaware corporation ("Rally's"), acquired approximately 19 million shares (the "Checkers Shares") of the common stock, $.001 par value per share (the "Checkers Common Stock"), of Checkers Drive-In Restaurants, Inc., a Delaware corporation ("Checkers"), pursuant to that certain Exchange Agreement, dated as of December 8, 1997 (the "Exchange Agreement"), between Rally's, CKE Restaurants, Inc. ("CKE"), Fidelity National Financial, Inc. ("Fidelity"), GIANT GROUP, LTD. ("GIANT") and the other parties named in Exhibit A to the Exchange Agreement. CKE, Fidelity and GIANT beneficially owned approximately 5,280,000 shares, 2,760,000 shares and 3,140,000 shares, respectively, of Rally's Common Stock prior to the consummation of the Exchange Agreement, approximately 23.9%, 12.7% and 15.2% of the then outstanding shares of Rally's Common Stock. In addition, Terry Christensen, William Foley, II, David Gotterer, Andrew Puzder, Burt Sugarman and C. Thomas Thompson, who are Directors of Rally's, are parties to the Exchange Agreement. Mary Hart Sugarman, AJ Sugarman and Al Sugarman, who also participated in the exchange, are related to Burt Sugarman. The Exchange Agreement is being filed as Exhibit A to this Current Report on Form 8-K (the "Form 8-K") and is incorporated herein by this reference. In consideration of the acquisition of the Checkers Shares, Rally's issued 3,909,336 shares of its common stock, $.10 par value per share (the "Rally's Common Stock"), and 45,667 shares of its Series A Participating Preferred Stock, $.10 par value per share (the "Rally's Preferred Stock"), the terms of which are set forth in Exhibit B to the Exchange Agreement. The Rally's Preferred Stock will be converted into 4,566,700 shares of Rally's Common Stock upon approval of such conversion by Rally's stockholders. The exchange ratio used to determine the number of shares of Rally's Common Stock (including the shares to be issued upon conversion of the Rally's Preferred Stock) to be issued pursuant to the Exchange Agreement was based upon the average closing price of the Checkers Common Stock and the Rally's Common Stock for the five trading days preceding the public announcement of the proposed exchange on September 22, 1997. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Audited financial statements of Checkers for the years ended December 30, 1996 and unaudited financial statements for the period ended September 8, 1997 are attached hereto as Exhibit B and incorporated herein by this reference. (b) Pro forma financial information required to be filed pursuant hereto are attached hereto as Exhibit C and incorporated herein by this reference. (c) Exhibits. Exhibit A -- Exchange Agreement, dated as of December 8, 1997, between Rally's, 2 3 CKE, Fidelity, GIANT and the other parties named in Exhibit A thereto (incorporated by reference to Exhibit A to Rally's Statement on Schedule 13D, dated December 18, 1997, with respect to Checkers Common Stock). Exhibit B -- Audited financial statements of Checkers for the years ended December 30, 1996 and unaudited financial statements of Checkers for the period ended September 8, 1997 (incorporated by reference to pages F-1 through F-42 of Checkers Registration Statement on Form S-4 (File No. 333-3800), as amended on November 14, 1997). Exhibit C -- Pro forma financial information. Exhibit D -- Consent of KPMG Peat Marwick LLP 3 4 SIGNATURES 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. RALLY'S HAMBURGERS, INC. March 2, 1998 By: /s/ James T. Holder - ------------- ------------------------------ (Date) James T. Holder Vice President 4 5 EXHIBIT C PRO FORMA CONSOLIDATED FINANCIAL DATA The following Pro Forma Consolidated Financial Data sets forth certain unaudited pro forma financial information giving effect to the Exchange Agreement. The pro forma financial information is based on, and should be read in conjunction with, the historical consolidated financial statements of the Company and the notes related thereto. The pro forma financial information gives effect to the issuance of 3,909,336 shares of Rally's common stock and 45,677 shares of Rally's preferred stock in exchange for 19,100,960 shares of Checkers common stock, based upon the per share price of the Checkers common shares at $1.33125, assuming the exchange had occurred September 28,1997. RALLY'S HAMBURGERS, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) ASSETS
HISTORICAL AT PRO FORMA PRO FORMA SEPT. 28, 1997 ADJUSTMENTS RESULTS ------------------------------------------------- CURRENT ASSETS: Cash and cash equivalents $ 3,180 $ (280) A) $ 2,900 ------------------------------------------------- Restricted cash 1,413 1,413 Investments 1,732 1,732 Accounts and notes receivable - net 1,862 1,862 Inventory 848 848 Property and equipment held for sale 244 244 Prepaid expenses and other current assets 1,096 1,096 ------------------------------------------------- Total current assets 10,375 (280) 10,095 ------------------------------------------------- Property and equipment, at cost, net of accumulated depreciation and amortization 68,861 68,861 Property and equipment held for sale 1,076 1,076 Notes receivable 1,018 1,018 Intangibles, net of accumulated amortization 27,499 27,499 Investment in affiliate -- 25,708 A) 25,708 Deposits and other noncurrent assets 2,688 2,688 ------------------------------------------------- $ 111,517 $ 25,428 $ 136,945 ================================================= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current installments of long-term debt 1,202 1,202 Accounts payable 5,842 5,842 Accrued liabilities 14,839 14,839 ------------------------------------------------- Total current liabilities 21,883 21,883 Senior notes - net 57,977 57,977 Long-term debt, less current maturities 4,201 4,201 Obligations under capital leases, less current ma 5,336 5,336 Other noncurrent liabilities 3,941 3,941 ------------------------------------------------- Total liabilities 93,338 0 93,338 ------------------------------------------------- STOCKHOLDERS' EQUITY: Preferred stock -- 5 B) 5 Common stock 2,085 391 B) 2,476 Additional paid-in capital 71,839 25,032 B) 96,871 Retained (deficit) earnings (53,637) (53,637) Treasury stock, at cost,273,000 shares (2,108) (2,108) ------------------------------------------------- Net stockholders' equity 18,179 25,428 43,607 ------------------------------------------------- $ 111,517 $ 25,428 $ 136,945 =================================================
A) Pro forma adjustment to record the purchase of 19,100,960 shares of Checkers common stock at $1.33125 and the payment of $280,000 in transaction costs. B) Pro forma adjustment to record the issuance of 3,909,336 shares of Rally's common stock, valued at $2.99965 per share and 45,677 shares of Rally's preferred stock, valued at $299.965 per share. 6 PRO FORMA CONSOLIDATED FINANCIAL DATA The following Pro Forma Consolidated Financial Data sets forth certain unaudited pro forma financial information giving effect to the Exchange Agreement. The pro forma financial information is based on, and should be read in conjunction with, the historical consolidated financial statements of the Company and the notes related thereto. The pro forma financial information gives effect to the issuance of 3,909,336 shares of Rally's common stock and 45,677 shares of Rally's preferred stock in exchange for 19,100,960 shares of Checkers common stock, based upon the per share price of the Checkers common shares at $1.33125, assuming the exchange had occurred December 30, 1996. RALLY'S HAMBURGERS, INC. AND SUBSIDIARIES UNAUDITED PROFORMA CONDENSED STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 28, 1997 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL NINE MONTHS ENDED PRO FORMA PRO FORMA SEPT. 28, 1997 ADJUSTMENTS RESULTS ------------------------------------------------- TOTAL REVENUES $ 109,207 $ 109,207 ------------------------------------------------- COSTS AND EXPENSES: Restaurant cost of sales 34,334 34,334 Restaurant operating expenses 44,688 44,688 General and administrative expenses 11,306 11,306 Advertising and promotion expenses 7,197 7,197 Depreciation and amortization 6,881 6,881 Other expenses 1,437 1,437 Loss on investment in affiliate -- 2,857 C) 2,857 ------------------------------------------------- Total costs and expenses 105,843 2,857 108,700 ------------------------------------------------- Operating (loss) income 3,364 (2,857) 507 ------------------------------------------------- Other income (expense): Interest expense (5,578) (5,578) Interest income 619 619 Other 2 2 ------------------------------------------------- Loss before minority interest, income tax expense (benefit) and extraordinary items (1,593) (2,857) (4,450) Minority interests in (losses) earnings -- -- ------------------------------------------------- Loss before income tax expense (benefit) and extraordinary items (1,593) (2,857) (4,450) Income tax expense (benefit) 415 415 ------------------------------------------------- Loss before extraordinary items (2,008) (2,857) (4,865) Extraordinary items -- -- ------------------------------------------------- Net (loss) earnings $ (2,008) $ (2,857) $ (4,865) ================================================= Earnings (loss) per common share: Before extraordinary item $ (0.10) $ (0.57) $ (0.19) Extraordinary item $ (0.00 $ (0.00 $ (0.00 ------------------------------------------------- Net loss per common share $ (0.10) $ (0.57) $ (0.19) ================================================= Weighted average number of common shares outstanding 20,552 5,051 D) 25,603 =================================================
C) Pro forma adjustment to record Rally's 26.3% share of Checkers year to date net losses of $9.084 million as of September 29, 1997 and amortize $468,000 of investment goodwill associated with the exchange, assuming the exchange had occurred on December 30, 1996. D) Additional weighted average number of common shares assumes a June 28, 1997 conversion of the 45,677 shares of preferred stock to common stock. 7 PRO FORMA CONSOLIDATED FINANCIAL DATA The following Pro Forma Consolidated Financial Data sets forth certain unaudited pro forma financial information giving effect to the Exchange Agreement. The pro forma financial information is based on, and should be read in conjunction with, the historical consolidated financial statements of the Company and the notes related thereto. The pro forma financial information gives effect to the issuance of 3,909,336 shares of Rally's common stock and 45,677 shares of Rally's preferred stock in exchange for 19,100,960 shares of Checkers common stock, based upon the per share price of the Checkers common shares at $1.33125, assuming the exchange had occurred January 1, 1996. RALLY'S HAMBURGERS, INC. AND SUBSIDIARIES UNAUDITED PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 29, 1996 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL YEAR ENDED PRO FORMA PRO FORMA DEC. 29, 1996 ADJUSTMENTS RESULTS ------------------------------------------------- TOTAL REVENUES $ 162,752 $ 162,752 ------------------------------------------------- COSTS AND EXPENSES: Restaurant cost of sales 53,712 53,712 Restaurant operating expenses 71,155 71,155 General and administrative expenses 15,426 15,426 Advertising and promotion expenses 7,767 7,767 Depreciation and amortization 9,838 9,838 Other expenses 764 764 Loss on investment in affiliate -- 12,830 E) 12,830 ------------------------------------------------- Total costs and expenses 158,662 12,830 171,492 ------------------------------------------------- Operating (loss) income 4,090 (12,830) (8,740) ------------------------------------------------- Other income (expense): Interest expense (8,622) (8,622) Interest income 614 614 Other (49) (49) ------------------------------------------------- Loss before minority interest, income tax expense (benefit) and extraordinary items (3,967) (12,830) (16,797) Minority interests in (losses) earnings -- -- ------------------------------------------------- Loss before income tax expense (benefit) and extraordinary items (3,967) (12,830) (16,797) Income tax expense (benefit) (675) (675) ------------------------------------------------- Loss before extraordinary items (3,292) (12,830) (16,122) Extraordinary items 5,280 5,280 ------------------------------------------------- Net (loss) earnings $ 1,988 $(12,830) $ (10,842) ================================================= Earnings (loss) per common share: Before extraordinary item $ (0.19) $ (2.07) $ (0.69) Extraordinary item $ 0.31 $ 0.00 $ 0.23 ------------------------------------------------- Net loss per common share $ 0.12 $ (2.07) $ (0.47) ================================================= Weighted average number of common shares outstanding 17,007 6,193 F) 23,200 =================================================
E) Pro forma adjustment to record Rally's 26.3% share of Checkers 1996 net losses of $46.409 million and amortize $624,000 of investment goodwill associated with the exchange, assuming the exchange had occurred on January 1, 1996. F) Additional weighted average number of common shares assumes a June 30, 1996 conversion of the 45,677 shares of preferred stock to common stock. 8 EXHIBIT D ACCOUNTANTS' CONSENT The Board of Directors Checkers Drive-In Restaurants, Inc.: We consent to incorporation by reference in the current report on Form 8-K/A of Rally's Hamburgers, Inc. of our report dated March 3, 1997, with respect to the consolidated balance sheets of Checkers Drive-In Restaurants, Inc. and subsidiaries as of December 30, 1996 and January 1, 1996, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the three-year period ended December 30, 1996, which report appears in the registration statement on Form S-4 (No. 333-3800) as amended, of Checkers Drive-In Restaurants, Inc. /s/ KPMG PEAT MARWICK LLP Tampa, Florida March 3, 1998 -----END PRIVACY-ENHANCED MESSAGE-----