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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): June 11, 2001
SHONEY'S, INC.
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(Exact name of registrant as specified in its charter)
Tennessee 0-4377 62-0799798
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(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of incorporation) Identification No.)
1727 Elm Hill Pike, Nashville, Tennessee 37210
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (615) 391-5201
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
This Current Report on Form 8-K is being filed to report the completion
on June 11, 2001 of the sale by Shoney's, Inc. (the "Company") of its wholly
owned subsidiary, Commissary Operations, Inc. ("COI") to COI Acquisition
Company, a Tennessee corporation owned in part by members of COI's senior
management ("COI Acquisition"), pursuant to that certain Stock Purchase
Agreement, dated May 15, 2001, by and between the Company and COI Acquisition
(the "Purchase Agreement").
Under the transaction, all of the issued and outstanding common stock of
COI was sold for consideration of $9 million. The amount of such
consideration was paid in cash and was determined through arms-length
negotiations among the parties to the Purchase Agreement.
Haney A. Long, Jr., Lloyd W. Baldridge, Jr., and Daniel E. Staudt,
formerly the President and Chief Executive Officer - Manufacturing and
Distribution, the Vice President and Chief Financial Officer - Manufacturing
and Distribution, and the Vice President - Manufacturing and Distribution,
respectively, of the Company, are the part-owners of COI Acquisition.
The Company issued a Press Release in connection with the transaction
described herein. The Press Release is filed herewith as Exhibit 99 and is
incorporated herein by this reference as if copied verbatim. The Purchase
Agreement is filed herewith as Exhibit 2 and is incorporated herein by this
reference as if copied verbatim.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements. None.
(b) Pro Forma Financial Information. The following unaudited pro forma
financial information is set forth herein under the caption "Shoney's, Inc.
Unaudited Pro Forma Consolidated Condensed Financial Statements":
(1) Unaudited Pro Forma Consolidated Condensed Balance Sheet
at February 18, 2001
(2) Unaudited Pro Forma Consolidated Condensed Statement of
Operations for the Fiscal Year Ended October 29, 2000
(3) Unaudited Pro Forma Consolidated Condensed Statement of
Operations for the Sixteen Weeks Ended February 18, 2001
(4) Notes to Unaudited Pro Forma Consolidated Condensed Financial
Statements
(c) Exhibits. See Exhibit Index immediately following the signatures
hereto.
Shoney's, Inc.
Unaudited Pro Forma Consolidated Condensed Financial Statements
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The following unaudited pro forma consolidated condensed financial
statements give effect to the disposition by the Company of COI to COI
Acquisition pursuant to the Purchase Agreement, as described in Item 2 and
in Exhibit 2 to this Current Report on Form 8-K.
The unaudited pro forma consolidated condensed balance sheet presents the
financial condition of the Company at February 18, 2001 giving effect to the
disposition of COI as if it had occurred on such date. The unaudited pro
forma consolidated condensed statement of operations for the fiscal year ended
October 29, 2000 and the sixteen weeks ended February 18, 2001 give effect to
the disposition as if it had occurred as of October 31, 1999.
The unaudited pro forma financial information is presented for
informational purposes only and it is not necessarily indicative of the
financial position and results of operations that would have been achieved
had the disposition been completed as of the dates indicated and is not
necessarily indicative of the Company's future financial position or results
of operations.
SHONEY'S, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
Pro Forma
(in thousands) Historical Pro Forma Historical
2/18/01 Adjustments 2/18/01
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ASSETS
Current assets:
Cash and cash equivalents $ 8,970 $ (3) (a)
8,575 (b) $ 17,542
Accounts and notes
receivable, net 10,998 (5,924)(a) 5,074
Inventories 26,552 (22,225)(a) 4,327
Prepaid expenses 5,643 (1,343)(a) 4,300
Net current assets held
for sale 21,584 (2,948)(a) 18,636
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Total current assets 73,747 (23,868) 49,879
Net Property Plant & Equipment 223,613 (5,349)(a) 218,264
Other assets:
Goodwill, net 12,708 12,708
Deferred charges and other
intangible assets 12,624 (555)(a) 12,069
Other 3,693 (249)(a) 3,444
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$ 326,385 $ (30,021) $ 296,364
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LIABILITIES AND COMMON
STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 27,085 $ (11,227)(a) $ 15,858
Other accrued liabilities 54,689 (1,717)(a) 52,972
Debt and capital leases due
within one year 141,923 (11,221)(a) 130,702
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Total current liabilities 223,697 (24,165) 199,532
Long-term debt and capital
lease obligations 145,537 145,537
Other liabilities 52,793 (2,132)(a) 50,661
Shareholders' deficit:
Common stock 51,694 51,694
Additional paid-in capital 136,922 136,922
Other accumulated
comprehensive loss (998) (998)
Accumulated deficit (283,260) (3,724)(b) (286,984)
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Total shareholders' deficit (95,642) (3,724) (99,366)
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$ 326,385 $ (30,021) $ 296,364
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SHONEY'S, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 29, 2000
(In thousands, except per share data)
Pro Forma
Historical Pro Forma Historical
10/29/00 Adjustments 10/29/00
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Total Revenues $ 835,845 $ (117,769)(a) $ 718,076
Costs and expenses
Cost of sales 739,625 (108,397)(a) 631,228
General and administrative
expenses 64,910 (6,456)(a)
1,590 (b) 60,044
Impairment of long-lived assets 17,120 (1,898)(a) 15,222
Interest expense 36,659 (230)(a) 36,429
Restructuring expenses 1,031 1,031
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Total costs and expenses 859,345 (115,391) 743,954
Loss on continuing operations
before income taxes (23,500) (2,378) (25,878)
Benefit from income taxes (504) 999 (c) (1,503)
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Net loss from continuing
operations $ (22,996) $ (1,379) $ (24,375)
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Earnings per common share
Basic:
Net loss $ (0.46) $ (0.48)
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Diluted:
Net loss $ (0.46) $ (0.48)
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Weighted average shares
outstanding
Basic 50,427,186 50,427,186
Diluted 50,427,186 50,427,186
SHONEY'S, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
FOR THE SIXTEEN WEEKS ENDED FEBRUARY 18, 2001
(In thousands, except per share data)
Pro Forma
Historical Pro Forma Historical
2/18/01 Adjustments 2/18/01
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Total Revenues $ 226,529 $ (28,756)(a) $ 197,773
Costs and expenses
Cost of sales 205,511 (28,196)(a) 177,315
General and administrative
expenses 18,991 (2,043)(a)
489 (b) 17,437
Interest expense 11,047 (458)(a) 10,589
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Total costs and expenses 235,549 (30,208) 205,341
Income (loss) from continuing
operations before income taxes (9,020) 1,452 (a) (7,568)
Provision for income taxes 72 0 (d) 72
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Net income (loss) from continuing
operations $ (9,092) $ 1,452 $ (7,640)
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Earnings per common share
Basic:
Net income (loss) from
continuing operations $ (0.18) $ (0.15)
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Diluted:
Net income (loss) from
continuing operations $ (0.18) $ (0.15)
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Weighted average shares
outstanding
Basic 51,196,068 51,196,068
Diluted 51,196,068 51,196,068
SHONEY'S, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1. Balance Sheet
The pro forma balance sheet has been prepared to reflect the disposition
of COI as if it had occurred on February 18, 2001. Pro forma adjustments are
made as follows:
(a) To eliminate the net assets of COI included in the historical balance
sheet.
(b) Represents the net cash proceeds from the sale of COI adjusted for
closing and other costs.
Note 2. Statements of Operations
The pro forma statements of operations have been prepared to reflect the
following pro forma adjustments necessary to reflect the disposition of COI
as if it had occurred at October 31, 1999 prior to the period of operations
presented in the pro forma statements of operations. Pro forma adjustments
are made as follows:
(a) To eliminate the historical operations of COI.
(b) Represents continuing general and administrative costs that will not
be reduced after the disposition.
(c) Reflects income tax provision applied to the adjusted income before
income taxes using 42% effective tax rate for the year ended October
29, 2000.
(d) Reflects no income tax benefit applied to the adjusted loss before
income taxes due to an increase in the valuation allowance for
deferred tax assets during the sixteen weeks ended February 18, 2001.
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.
SHONEY'S, INC.
Dated: June 26, 2001 By: /s/ V. Michael Payne
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V. Michael Payne
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description Page No.
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2 Stock Purchase Agreement, dated May 15, 2001,
by and between COI Acquisition Company and
Shoney's, Inc.
99 Press Release, dated June 12, 2001