SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): May 10, 2004
THE KRYSTAL COMPANY
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(Exact name of registrant as specified in its charter)
Tennessee 000-20040 62-0264140
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(State of (Commission File No.) (IRS Employer
incorporation) Identification No.)
One Union Square, Chattanooga, Tennessee 37402
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(Address of principal executive offices, including zip code)
(423) 757-1550
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(Registrant's telephone number, including area code)
Item 5. Other Events and Required FD Disclosure.
On May 10, 2004, The Krystal Company (the "Company"), an owner, operator
and franchisor of quick service restaurants featuring the KRYSTAL hamburger,
announced that it has made an offer to purchase any and all of its 10.25%
Senior Notes due 2007 (the "Notes"). The Company is also seeking consents to
make amendments to certain provisions of the indenture governing the Notes
related to certain covenants and events of default. The offer to purchase is
made pursuant to the offer to purchase and consent solicitation and related
letter of transmittal sent to all holders of the Notes. In addition, the
Company announced that it has given a notice of partial redemption of
$10,000,000 of the Notes. The partial redemption will be made on
June 14, 2004. A copy of the press release is attached to this Form
8-K as Exhibit 99.1 and is incorporated herein by reference.
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.
May 12, 2004 THE KRSTAL COMPANY
By: /s/Larry D. Bentley
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Larry D. Bentley
Chief Financial Officer
EXHIBIT INDEX
Number Description
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99.1 Press Release dated May 10, 2004
THE KRYSTAL COMPANY COMMENCES TENDER OFFER AND CONSENT
SOLICITATION FOR ITS 10.25% SENIOR NOTES DUE 2007
CHATTANOOGA, Tennessee - May 10, 2004 - The Krystal Company (the "Company")
announced today that it has commenced a cash tender offer and consent
solicitation (the "Offer") for any and all $60,980,000 outstanding principal
amount of its 10.25% Senior Notes due 2007, CUSIP Number 50114AC4
(the "Notes"). The Offer is scheduled to expire at 12:00 midnight, New York
City time, on Monday, June 7, 2004 unless extended or earlier terminated (the
"Expiration Date"). The consent solicitation will expire at 5:00 p.m.,
New York City time, on Friday, May 21, 2004 (the "Consent Date"), unless
extended or earlier terminated. Holders tendering their Notes will be
required to consent to certain proposed amendments (the "Proposed Amendments")
to the indenture governing the Notes. The Proposed Amendments will eliminate
substantially all of the restrictive covenants contained in the indenture.
Adoption of the Proposed Amendments requires the consent of holders of at
least a majority of the aggregate principal amount of the outstanding Notes.
Holders may not tender their Notes without delivering consents or deliver
consents without tendering their Notes.
Holders who validly tender their Notes on or prior to the Consent Date
will receive the total consideration of $1,017.08 consisting of (i) the
purchase price of $1,000.00 and (ii) the consent payment of $17.08 per
$1,000.00 principal amount of Notes (if such notes are accepted for purchase).
Holders who validly tender their Notes after the Consent Date but on or prior
to the Expiration Date will receive the purchase price of $1,000.00 per
$1,000.00 principal amount of Notes (if such notes are accepted for purchase).
In either case, Holders who validly tender their Notes will be paid accrued
and unpaid interest up to, but not including, the date of payment for the
Notes (if such notes are accepted for purchase).
The Offer is subject to the satisfaction of certain conditions, including
the Company's receipt of tenders from holders of Notes representing a majority
of the aggregate principal amount of the outstanding Notes, consummation of
the anticipated financing, and other customary conditions. The terms of the
Offer are described in the Company's Offer to Purchase and Consent
Solicitation Statement dated May 10, 2004, copies of which may be obtained
from Global Bondholder Services, the information agent and depositary for the
Offer. The Company has engaged Banc of America Securities LLC to act as
exclusive dealer manager and solicitation agent in connection with the Offer.
Questions regarding the Offer may be directed to Banc of America Securities
LLC, High Yield Special Products, at 888-292-0070 (US toll-free) and
704-388-9217 (collect). Requests for documentation may be directed to
Global Bondholder Services at (866) 470-3700 (US toll-free) and (212) 430-3774
(collect).
Call Notice for $10,000,000 Principal Amount of Outstanding Notes
The Company also announced today that it has called $10,000,000 principal
amount of the outstanding Notes at the current redemption price of 101.708%.
The call, which provides for redemption on Monday, June 14, 2004, will be used
for any Notes that are not tendered pursuant to the Offer. Information
regarding the call has been posted with the Depositary Trust Company.
This announcement is not an offer to purchase, a solicitation of an offer
to purchase or a solicitation of a consent with respect to any securities.
The Offer is being made solely by the Offer to Purchase and Consent
Solicitation Statement dated May 10, 2004.
About the Company
The Company develops, operates and franchises full-size Krystal and
smaller "double drive-thru" Krystal Kwik quick-service restaurants. The
Company has been in the quick service restaurant business since 1932, and
believes it is among the first fast food restaurant chains in the country.
The Company began to franchise Krystal Kwik restaurants in 1990 and Krystal
restaurants in 1991. In 1995, the Company began to develop and franchise
Krystal restaurants located in non-traditional locations such as convenience
stores. As of March 28, 2004, the Company operated 245 units in nine states in
the southeastern United States. Franchisees operated 177 units as of
March 28, 2004.
Statement Concerning Forward-Looking Information
Certain written and oral statements made by or on behalf of the Company
may constitute "forward-looking" statements as defined under the Private
Securities Litigation Reform Act of 1995 (the "PSLRA"). The PSLRA contains a
safe harbor in making such disclosures. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from the Company's historical experience and its present
expectations or projections. These risks and uncertainties include, but are
not limited to, unanticipated economic changes, interest rate movements,
changes in governmental policies, the impact of competition, changes in
consumer tastes, increases in costs for food and/or labor, the availability
and adequate supply of hourly-paid employees, the ability of the Company to
attract and retain suitable franchisees, the Company's ability to obtain
funding sufficient to meet operation requirements and capital expenditures
(including the consummation of the tender offer transaction and the
availability of a new senior credit facility), the impact of governmental
regulations and other risks and uncertainties described in the Company's
Securities and Exchange Commission filings. The Company cautions that such
factors are not exclusive. Caution should be taken not to place undue reliance
on any such forward-looking statements since such statements speak only as
of the date of the making of such statements and are based on certain
expectations and estimates of the Company which are subject to risks and
changes in circumstances that are not within the Company's control. The
Company does not undertake to update forward-looking statements.
CONTACT: Larry Bentley, (423) 757-5673, www.krystal.com