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) February 14, 1997
The AppleTree Companies, Inc.
-----------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-23020 65-0205933
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
5732 Curlew Drive Norfolk, Virginia 23502
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (757) 466-9200
Item 2. Acquisition and Disposition of Assets
As part of its ongoing efforts to reduce operating expenses and achieve
profitability, effective at the close of business on February 14, 1997, the
Registrant ceased its manufacturing operations in Salt Lake City, Utah and
eliminated routes emanating from that location. The Registrant is seeking a
buyer for this manufacturing facility.
Also, effective at the close of business on that date, Paul Mitchell,
the Registrant's vice president of sales resigned, and, through MICCIO
Enterprises, Inc., an entity he created, took over the Registrant's Phoenix,
Arizona manufacturing and distribution operations. The Registrant acquired
those operations, together with the Sandwich Maker name, in October 1995 from
entities owned by Mr. Mitchell. This transaction is the subject of a letter of
intent dated February 14, 1997 and the terms of this transaction have not been
finalized and are subject to the Board of Directors and a lender's approval.
The Registrant will continue production under the Sandwich Maker name and will
enter into a license agreement with MICCIO Enterprises, Inc. relating to the
Sandwich Maker name.
Pro forma results of operations for the year ended September 1, 1996 and
the three-month period ended December 1, 1996 reflect the results of
operations without those operations as though the transaction occurred on
September 4, 1995. The net book value of assets held for sale is approximately
$669,000; and net assets being sold to MICCIO Enterprises, Inc. are
approximately $59,000 (net of estimated liabilities of $155,000).
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.
THE APPLETREE COMPANIES, INC.
By: /s/ John W. Donlevy
--------------------------
John W. Donlevy
CEO and President
Dated: March 3, 1997
THE APPLETREE COMPANIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 1, 1996
(Unaudited)
Salt Lake City
and Phoenix
AppleTree Operations Pro Forma
----------- --------------- -------------
Sales $28,666,000 $13,381,000 $15,285,000
Cost of sales 19,082,000 8,656,000 10,426,000
----------- ----------- -----------
Gross profit 9,584,000 4,725,000 4,859,000
----------- ----------- -----------
Operating expenses:
Selling, general and
administrative 18,120,000 7,023,000 11,097,000
Impairment of intangible
and other assets 1,738,000 1,290,000 448,000
Professional fees 742,000 - 742,000
----------- ----------- -----------
Total operating
expenses 20,600,000 8,313,000 12,287,000
----------- ----------- -----------
Loss from operations (11,016,000) (3,588,000) (7,428,000)
----------- ----------- -----------
Other expense:
Interest expense 843,000 - 843,000
Other (7,000) 2,000 (9,000)
----------- ----------- -----------
Total other expense 836,000 2,000 834,000
----------- ----------- -----------
Net loss $(11,852,000) $(3,590,000) $(8,262,000)
============ =========== ===========
Net loss attributable
to common stockholders $(12,030,000) $(3,590,000) $(8,440,000)
============ =========== ===========
Weighted average number
of common shares
outstanding 54,193,000 433,000 54,626,000
============ =========== ==========
Net loss per common
share $(.22) $(.15)
===== =====
See accompanying notes to pro forma consolidated statement of operations.
THE APPLETREE COMPANIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED DECEMBER 1, 1996
(Unaudited)
Salt Lake City
and Phoenix
AppleTree Operations Pro Forma
----------- --------------- -------------
Sales $ 5,338,000 $ 2,552,000 $ 2,786,000
Cost of sales 3,407,000 1,675,000 1,732,000
----------- ----------- -----------
Gross profit 1,931,000 877,000 1,054,000
----------- ----------- -----------
Operating expenses:
Selling, general and
administrative 3,411,000 1,572,000 1,839,000
Professional fees 75,000 1,000 74,000
----------- ----------- -----------
Total operating
expenses 3,486,000 1,573,000 1,913,000
----------- ----------- -----------
Loss from operations ( 1,555,000) ( 696,000) ( 859,000)
----------- ----------- -----------
Other expense:
Interest expense 160,000 (5,000) 165,000
Other 2,000 (4,000) 6,000
----------- ----------- -----------
Total other expense 162,000 (9,000) 171,000
----------- ----------- -----------
Net loss $( 1,717,000) $( 687,000) $(1,030,000)
============ =========== ===========
Net loss attributable
to common stockholders $( 1,798,000) $( 687,000) $(1,111,000)
============ =========== ===========
Weighted average number
of common shares
outstanding 118,151,000 169,000 118,320,000
============ =========== ==========
Net loss per common
share $(.02) $(.01)
===== =====
See accompanying notes to pro forma consolidated statement of operations.
THE APPLETREE COMPANIES, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
SEPTEMBER 1, 1996
(Unaudited)
1. Basis of Presentation
The pro forma consolidated statement of operations presents The AppleTree
Companies, Inc.'s (the "Registrant") results of operations for the year ended
September 1, 1996 and the three-month period ended December 1, 1996 as though
the event, described in Note 2, had occurred on September 4, 1995 or the date
of acquisition for Sandwich Makers of Arizona, Inc. and Sandwich Makers of
California, Inc. The pro forma statement includes the results of operations
of the Registrant for the year ended September 1, 1996 and the results of
operations of its Salt Lake City, Utah and Phoenix, Arizona operations
facilities and related routes for the year ended September 1, 1996 and the
three-month period ended December 1, 1996. The impact of these events on the
Registrant's financial position was not material.
The pro forma data are presented for informational purposes only and are not
necessarily indicative of the operating results that would have occurred had
the transaction been consummated at the dates indicated, nor are they
necessarily indicative of future operating results.
2. Description of Events
On February 14, 1997, the Registrant, as part of its ongoing efforts to reduce
operating expenses and achieve profitability, ceased its manufacturing
operations in Salt Lake City, Utah and eliminated routes emanating from that
location. Also, effective at the close of business on that date, Paul
Mitchell, the Registrant's vice president of sales resigned, and, through
MICCIO Enterprises, Inc., an entity he created, took over the Registrant's
Phoenix, Arizona manufacturing and distribution operations. Details of the
transaction have not been finalized, but are not expected to have a material
impact on the Registrant's financial position.
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