1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported) July 29, 1998
TRISTAR CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 0-13099 13-3129318
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(State or other jurisdiction (Commission) (I.R.S. Employer
of incorporation or File Number) Identification No.)
organization)
12500 SAN PEDRO AVENUE, SUITE 500, SAN ANTONIO, TEXAS 78216
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (210) 402-2200
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 1. Change in Control of Registrant
Not applicable
ITEM 2. Acquisition or Disposition of Assets
a(i) On July 14, 1998 the Registrant completed a transaction
whereby it sold all of the capital stock and distribution
rights of its Brazilian subsidiary, Tristar do Brasil
Cosmeticos, LTDA ("TBC") to Transvit Distribution Corporation
("TDC"), a wholly owned affiliate of the Core Sheth Family,
the majority stockholder of the Registrant, for $2,800,000.
Jay Sheth, director of the Registrant, and Viren Sheth,
director and chief executive officer of the Registrant, are
related by blood to members of the Core Sheth Family, but
disclaim beneficial ownership of the shares of the capital
stock of any of the Registrant, TDC and Nevell Investments,
S.A. ("Nevell"), another affiliate of the Core Sheth Family,
held by the Core Sheth Family. B.J. Harid, director of the
Registrant, also serves as a director of another Core Sheth
Family affiliate, but is not a director of TDC or Nevell.
(ii) The transaction was completed July 14, 1998 to be effective
May 30, 1998 and provides for a non-compete restriction and a
supply agreement whereby the Registrant agreed to continue
selling product to TBC through May 31, 2001. The Registrant
also received an option to repurchase the stock and
distribution rights from TDC at anytime prior to May 31,
2003. The Registrant currently has no plans to exercise such
option.
(iii) The $2,800,000 consideration which the Registrant received
was negotiated by the parties and related to the amount of
cash invested in developing TBC's distribution channel
coupled with the anticipated revenue stream of TBC. The
Registrant engaged a third party to review the transaction
and render an opinion on its fairness.
(iv) The Registrant received payment in the form of a reduction of
the subordinated debt to Nevell. The subordinated debt
reduction, net of the related write-down of warrant
valuation costs attributable to such debt, exceeded the
carrying value of the Registrant's Brazilian investment by
$1,506,000. Such amount was recorded as an increase in
additional paid-in-capital.
ITEM 3. Bankruptcy or Receivership
Not Applicable
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ITEM 4. Changes in Registrants Certifying Accountants
Not Applicable
ITEM 5. Other Events
Not Applicable
ITEM 6. Resignation of Registrant's Directors
Not Applicable
ITEM 7. Financial Statements and Exhibits
Pro forma Consolidated Statements of Operations for the
thirty-nine week period ended May 30, 1998 and for the fiscal year
ended August 30, 1997 are attached. The transaction was effective
May 30, 1998, and as such, it was reflected in Registrant's
reported Consolidated Balance Sheet at May 30, 1998, therefore,
the pro forma consolidated balance sheet is not presented.
ITEM 8. Change in Fiscal Year
Not Applicable
ITEM 9. Sales of Equity Securities Pursuant to Regulation S
Not Applicable
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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
under signed thereunto duly authorized.
TRISTAR CORPORATION
By /s/ ROBERT M. VIOLA
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Robert M. Viola, Vice President, Chief
Financial Officer, Assistant Secretary and
Principal Financial and Accounting Officer
Date: July 29, 1998
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TRISTAR CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
The unaudited pro forma consolidated statements of operations are provided to
demonstrate the effect of the sale of Tristar do Brasil Cosmeticos, LTDA to
Transvit Distribution Corporation on the consolidated results of operations of
Tristar Corporation for the thirty-nine week period ended May 30, 1998 and the
year ended August 30, 1997. Due to the common interest which exists between
Tristar Corporation and TDC, the Buyer, the Company recorded the excess of the
consideration received over the related carrying value of its Brazilian
subsidiary as an increase in additional paid-in-capital. Accordingly the only
adjustments necessary in the pro forma statements of operations are elimination
of TBC's operating losses and reduction of warrant amortization and interest
expense resulting from the decrease in subordinated debt.
THIRTY-NINE WEEKS ENDED
PROFORMA
MAY 30, ADJUSTMENTS MAY 30,
1998 (SEE NOTE a.) 1998
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Net Sales $52,893,000 $(1,728,000) $51,165,000
Cost of Sales 38,142,000 (1,078,000) 37,064,000
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Gross profit 14,751,000 (650,000) 14,101,000
Selling, general and administrative expenses 12,493,000 (1,075,000) 11,418,000
----------- ----------- -----------
Income (loss) from operations 2,258,000 425,000 2,683,000
Other income (expense):
Interest expense (1,396,000) 92,000 (1,304,000)
Other income (expense) (301,000) 56,000 (245,000)
----------- ----------- -----------
Income (loss) before provision for income taxes 561,000 573,000 1,134,000
Provision for income taxes 55,000 -- 55,000
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Net income (loss) 506,000 573,000 1,079,000
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Less:
Preferred stock dividendS (339,000) -- (339,000)
Effect of beneficial conversion feature -- -- --
Warrant valuation adjustment -- -- --
----------- ----------- -----------
Net income (loss) applicable to common stock $ 167,000 $ 573,000 $ 740,000
=========== =========== ===========
Earnings per common share:
Basic $ .01 $ .05
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Diluted $ .01 $ .04
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Weighted average shares outstanding
Basic 16,740,248 16,740,248
Diluted 18,283,933 18,283,933
Note a. The column represents the historical results of operations for the
Brazilian subsidiary for the thirty-nine week period ended May 30, 1998
and adjustments for warrant amortization and interest expense
associated with the reduction in debt as a result of the sale of the
subsidiary:
- Brazilian subsidiary operating loss $ 462,000
- Interest on subordinated debt 92,000
- Warrant amortization expense 19,000
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$ 573,000
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TRISTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Year Ended
Pro Forma Pro Forma
August 30, Adjustments August 30,
1997* (See note a.) 1997
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Net sales $ 68,959,000 $ (1,539,000) $ 67,420,000
Cost of sales 48,441,000 (1,299,000) 47,142,000
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Gross profit 20,518,000 (240,000) 20,278,000
Selling, general and administrative expenses 17,093,000 (1,318,000) 15,775,000
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Income (loss) from operations 3,425,000 1,078,000 4,503,000
Other income (expense):
Interest expense (1,940,000) 183,000 (1,757,000)
Other expense (324,000) 117,000 (207,000)
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Income (loss) before provision for income taxes 1,161,000 1,378,000 2,539,000
Provision for income taxes 78,000 -- 78,000
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Net income (loss) 1,083,000 1,378,000 2,461,000
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Less:
Preferred stock dividends (256,000) -- (256,000)
Effect of beneficial conversion feature (1,011,000) -- (1,011,000)
Warrant valuation adjustment (270,000) -- (270,000)
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Net income (loss) applicable to common stock $ (454,000) $ 1,378,000 924,000
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Earnings per common share
Basic $ (.03) $ .06
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Diluted $ (.03) $ .05
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Weighted average shares outstanding
Basic 16,729,074 16,729,074
Diluted 18,786,490 18,786,490
Note a. The column represents the historical results of operations for the
Brazilian subsidiary for the year ended August 30, 1997 and adjustments
for warrant amortization and interest expense associated with the
reduction in debt as a result of the sale of the subsidiary:
- Brazilian subsidiary operating loss $ 1,168,000
- Interest on subordinated debt 183,000
- Warrant amortization expense 27,000
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$ 1,378,000
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* Prepared from audited financial statements for the year ended August 30, 1997.