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): June 30, 1995
The Marcus Corporation
(Exact name of registrant as specified in its charter)
Wisconsin
(State or other jurisdiction of incorporation)
1-12604 39-1139844
(Commission File Number) (IRS Employer Identification No.)
250 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 272-6020
ITEM 2. DISPOSITION OF ASSETS.
Pursuant to an Asset Purchase Agreement, dated as of April 12,
1995, as amended, with Apple South, Inc., a Georgia corporation ("Buyer"),
on June 30, 1995, The Marcus Corporation, a Wisconsin corporation through
its subsidiaries (collectively, "Company"), completed the sale to Buyer of
18 of the Company's existing franchised Applebee's Neighborhood Grill &
Bar restaurants, along with two Applebee's restaurants under construction,
five Applebee's restaurants under development and the Company's
development rights in the Chicago metropolitan area and a significant
portion of Wisconsin, including Milwaukee, Madison, Green Bay, La Crosse,
Eau Claire and Wausau ("Sold Assets"). The sale price for the Sold Assets
was approximately $48.3 million in cash and was negotiated at arm's length
between the Buyer and the Company. The 18 existing Applebee's restaurants
sold had aggregate annualized sales of approximately $40 million or about
$2.2 million per existing restaurant.
The description in this Form 8-K of the terms and provisions of
the Asset Purchase Agreement is a summary only and is qualified in its
entirety by reference to the text thereof, which is attached as an exhibit
to this Form 8-K and incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
b. Pro Forma Financial Statements.
The Marcus Corporation
Unaudited Pro Forma Consolidated Financial Statements
Basis of Presentation
The pro forma consolidated statements of earnings for the year ended May
26, 1994, and for the thirty-six weeks ended February 2, 1995, present the
operating results of The Marcus Corporation (the Company), excluding the
operations of its' Applebee's restaurants, as if such operations had been
disposed of at the beginning of the respective periods. The pro forma
consolidated balance sheet has been prepared assuming the Applebee's
restaurants disposition took place as of February 2, 1995.
The unaudited pro forma consolidated statements of earnings, balance sheet
and notes thereto should be read in conjunction with the consolidated
financial statements and notes thereto of the Company, incorporated by
reference from the Company's Annual Report on Form 10-K for the audited
fiscal year ended May 26, 1994, and the Company's Quarterly Report on Form
10-Q for the unaudited fiscal quarter ended February 2, 1995.
The unaudited pro forma information is not necessarily indicative of the
consolidated results of operations or consolidated financial position that
would have resulted had the Applebee's restaurants disposition occurred as
described above, nor is it necessarily indicative of the results of
operations of future periods or future consolidated financial position.
THE MARCUS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF EARNINGS
Year Ended May 26, 1994
(in thousands, except for per share data)
Historical
Year Ended Pro Forma
May 26,1994 Adjustments Pro Forma
Revenues:
Rooms and telephone $100,691 $100,691
Food and beverage 81,948 ($24,438)(B) 57,510
Theatre operations 50,263 50,263
Other income 13,413 1,193(C) 14,606
--------- --------- ---------
Total revenues 246,315 (23,245) 223,070
Costs and expenses:
Room and telephone 37,100 37,100
Food and beverage 64,241 (7,206)(B) 57,035
Theatre operations 30,212 30,212
Administrative and
selling 36,056 (13,025)(B) 23,031
Depreciation and
amortization 20,385 (672)(B) 19,713
Rent 3,572 (725)(B) 2,847
Property taxes 8,873 (347)(B) 8,526
Other operating
expenses 4,291 (1,480)(B) 2,811
Interest 6,931 (1,020)(C) 5,911
------- --------- ---------
Total costs and expenses 211,661 (24,475) 187,186
Earnings before income
taxes 34,654 1,230 35,884
Income taxes 13,607 486(D) 14,093
--------- --------- ---------
Net earnings $21,047(1) $744 $21,791
======= ===== =======
Net earnings per share $1.60(1) $1.66
===== =====
Weighted average shares
outstanding 13,107 13,107
====== =======
See accompanying notes
(1) Excludes cumulative effect of change in accounting for income
taxes
THE MARCUS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF EARNINGS
Thirty-Six Weeks Ended February 2, 1995
(in thousands, except for per share data)
Historical
Thirty-Six
Weeks Ended
February 2, Pro Forma
1995 Adjustments Pro Forma
Revenues:
Rooms and telephone $83,206 $83,206
Food and beverage 66,224 ($24,136)(B) 42,088
Theatre operations 40,670 40,670
Other income 11,945 826(C) 12,771
-------- ------- ---------
Total revenues 202,045 (23,310) 178,735
Costs and expenses:
Room and telephone 30,804 30,804
Food and beverage 50,461 (7,161)(B) 43,300
Theatre operations 24,497 24,497
Administrative and selling 28,049 (12,118)(B) 15,931
Depreciation and
amortization 16,353 (616)(B) 15,737
Rent 4,101 (586)(B) 3,515
Property taxes 6,433 (329)(B) 6,104
Other operating expenses 5,832 (1,560)(B) 4,272
Interest 6,379 (706)(C) 5,673
--------- --------- ---------
Total costs and expenses 172,909 (23,076) 149,833
Earnings before income taxes 29,136 (234) 28,902
Income taxes 11,993 (92)(D) 11,901
-------- --------- --------
Net earnings $17,143 ($142) $17,001
======= ======== =======
Net earnings per share $1.31 $1.29
==== ======
Weighted average shares
outstanding 13,132 13,132
======= =======
See accompanying notes
THE MARCUS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
February 2, 1995
(in thousands)
Historical
February 2, Pro forma
1995 Adjustments Pro forma
ASSETS
Current Assets:
Cash and cash equivalents $9,506 $30,696(A) $40,202
Accounts and notes
receivable 7,149 7,149
Receivables from joint
ventures 6,485 6,485
Other current assets 3,996 (735)(A) 3,261
-------- ------- -------
Total current assets 27,136 29,961 57,097
Property and equipment, net 354,799 (18,019)(A) 336,780
Other assets 10,171 (1,370)(A) 8,801
-------- -------- ---------
$392,106 $10,572 $402,678
======== ======= ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $4,683 $4,683
Accounts payable 12,581 12,581
Income taxes 4,771 10,866(A) 15,637
Taxes other than income
taxes 7,707 (25)(A) 7,682
Accrued compensation 2,886 2,886
Other accrued liabilities 8,999 89(A) 9,088
Current maturities on
long-term debt 4,546 4,546
-------- -------- --------
Total current liabilities 46,173 10,930 57,103
Long-term debt 118,419 (17,000)(A) 101,419
Deferred income taxes 16,840 16,840
Deferred compensation and
other 3,690 3,690
--------- --------- --------
Total liabilities 185,122 (6,070) 179,052
Shareholders' equity:
Preferred stock, $1 par;
authorized 1,000,000
shares; none issued --- ---
Common stock, $1 par;
authorized 30,000,000
shares; issued
7,521,968 shares 7,522 7,522
Class B common stock, $1
par; authorized
20,000,000 shares; issued
6,069,352 shares 6,069 6,069
Capital in excess of par 44,746 44,746
Retained earnings 152,689 16,642(A) 169,331
-------- -------- ---------
211,026 16,642 227,668
Less cost of treasury stock
Common stock, 546,823
shares 4,042 4,042
--------- --------- ---------
Total shareholders'
equity 206,984 16,642 223,626
--------- ---------- ----------
$392,106 $10,572 $402,678
======== ======= =======
See accompanying notes
The Marcus Corporation
Notes to Unaudited Pro Forma
Consolidated Financial Statements
Note A Pursuant to an Asset Purchase Agreement (the "Agreement"),
effective June 30, 1995 the Company completed the sale of its Applebee's
restaurants along with the Company's development rights for additional
Applebee's restaurants. The Company received approximately $48 million
in cash proceeds pursuant to the Agreement, resulting in a gain on sale
before tax effect of $27.5 million ($16.6 million gain after tax effect).
The pro forma adjustment to cash and cash equivalents and long term debt
reflects the assumption that the proceeds would have been used to pay down
long term debt of $17 million, with the remaining proceeds maintained as
cash and cash equivalents.
The pro forma adjustment to the income tax liability reflects the tax
liability relating to the gain on sale using a 39.5% effective rate.
The pro forma adjustments to other current assets, property and equipment,
other assets, taxes other than income taxes, and other accrued liabilities
reflect the sale of certain assets or adjustment to certain liabilities
related to the Company's Applebee's restaurants pursuant to the Agreement.
Note B The pro forma adjustment removes the direct revenues and direct
operating expenses related to Company's Applebee's restaurant operations.
Note C The pro forma adjustment to interest expense reflects the
decrease in interest expense resulting from the assumed use of sales
proceeds to reduce long-term debt by $17 million. The long-term debt to
be paid with the proceeds had an average interest rate of 6%.
The increase in other income results from the assumed investment of the
remaining sales proceeds in various short-term investments with average
yields of 6%.
Note D The pro forma adjustment of income taxes reflects the income tax
effect of the above adjustments assuming a 39.5% effective rate.
c. Exhibits.
99.1* Asset Purchase Agreement, dated as of April 12, 1995.
99.2 First Amendment to Asset Purchase Agreement, dated as of
June 5, 1995.
* The schedules and exhibits to the Asset Purchase Agreement are not
being filed herewith because the Company believes that the information
contained in such schedules and exhibits should not be considered
material to an investment decision in the Company or such information
is otherwise adequately disclosed in this Form 8-K. The Asset Purchase
Agreement identifies internally the contents of all omitted schedules
and exhibits. The Company agrees to furnish supplementally (but not to
"file") a copy of any such schedule or exhibit to the Commission upon
request.
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June 30, 1995 THE MARCUS CORPORATION
By: /s/ Thomas F. Kissinger
Thomas F. Kissinger
Secretary and General Counsel
EXHIBIT INDEX
Sequential
Exhibit Page
Number Description Number
99.1* Asset Purchase Agreement, dated as of
April 12, 1995.
99.2 First Amendment to Asset Purchase
Agreement dated June 5, 1995.
* The schedules and exhibits to the Asset Purchase Agreement are not
being filed herewith because the Company believes that the information
contained in such schedules and exhibits should not be considered
material to an investment decision in the Company or such information
is otherwise adequately disclosed in this Form 8-K. The Asset Purchase
Agreement identifies internally the contents of all omitted schedules
and exhibits. The Company agrees to furnish supplementally (but not to
"file") a copy of any such schedule or exhibit to the Commission upon
request.