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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities and Exchange Act of 1934
Date of Report:
FEBRUARY 15, 2001
(Date of Earliest Event Reported)
CYRK, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-21878 04-3081657
(Commission File Number) (I.R.S. Employer Identification No.)
101 EDGEWATER DRIVE, WAKEFIELD, MA 01880
(Address of Principal Executive Offices)
(Zip Code)
(781) 876-5800
(Registrant's Telephone Number, Including Area Code)
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ITEM 2. DISPOSITION OF ASSETS.
On February 15, 2001, the registrant ("Cyrk") sold its Corporate
Promotions Group business ("CPG") to Cyrk Holdings, Inc., formerly known as
Rockridge Partners, Inc. ("Rockridge"), an investor group led by Gemini
Investors LLC, a Wellesley, Massachusetts-based private equity investment firm,
pursuant to a Purchase Agreement entered into as of January 20, 2001 (the
"Purchase Agreement"). CPG is engaged in the corporate catalog and specialty
advertising segment of the promotion industry. The group was formed as a result
of Cyrk's acquisitions of Marketing Incentives, Inc. and Tonkin, Inc. in 1996
and 1997, respectively. CPG's revenues for the nine months ended September 30,
2000 were approximately $106 million, or 18% of Cyrk's total sales. The purchase
price for the CPG business was approximately $14 million, which was determined
as the result of arm's length negotiation and included the assumption of
approximately $3.7 million of Cyrk debt. Approximately $2.3 million of the
purchase price was paid with a five-year subordinated note from Rockridge, with
the balance being paid in cash.
Pursuant to the Purchase Agreement, Rockridge purchased from Cyrk (i)
all of the outstanding capital stock of Marketing Incentives, Inc. and Tonkin,
Inc., each a wholly-owned subsidiary of the registrant and (ii) other certain
assets of Cyrk, including substantially all warehouse equipment, fulfillment
equipment, telephone systems, computers and computer systems, fax machines, copy
machines, office furniture and equipment, production equipment and all other
personal property and fixtures located at 125 Water Street in Danvers,
Massachusetts, as well as the telephone system, computers and computer systems,
fax machines, copy machines, office furniture and equipment and all other
personal property and fixtures located at 21300 Victory Blvd. in Woodland Hills,
California. Rockridge also purchased substantially all the computers and
computer-
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related equipment, personal property, fixtures, and all other equipment
associated with the individuals on Cyrk's Wakefield, Massachusetts payroll and
all other items necessary for the operation of the CPG business, in addition to
all Intellectual Property and Assumed Liabilities of CPG as specified in the
Purchase Agreement.
Rockridge extended employment offers to former Cyrk employees who had
performed various support activities, including Accounting, Information
Technology, Human Resources, Legal and other various management functions.
There is no material relationship between Rockridge and Cyrk or any of
its affiliates, directors or officers, or any associate thereof, other than the
relationship created by the Purchase Agreement and related documents.
Allan I. Brown, Cyrk's co-chief executive officer, said, "Historically
our Company has been challenged by a complex business model comprised of several
autonomous business units. We view the divestiture of the CPG business as a
logical and necessary step toward enhancing the Company's ability to generate
more consistent revenue and earnings growth over time. This transaction will
allow us to focus on our core promotion competencies and our most profitable
business, and to better support our key clients. CS First Boston remains engaged
and will continue to explore further strategic alternatives while management
continues to seek operating improvements and rationalize the cost structure of
the post-transaction organization."
The sale of CPG effectively terminates the restructuring effort
announced by Cyrk in May of 2000 with respect to the CPG business.
This Form 8-K contains forward-looking statements (within the meaning
of the Private Securities Litigation Reform Act of 1995). These statements
include statements regarding intent, belief or current expectations of Cyrk and
its management. You are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and
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uncertainties that may cause the Company's actual results to differ materially
from the Company's expectations. Factors that could cause actual results to
differ materially are discussed in Exhibit 99.1 to the Company's Second Quarter
2000 Report on Form 10-Q. Reference to this Cautionary Statement or Exhibit 99.1
in the context of a forward-looking statement or statements shall be deemed to
be a statement that any one or more of these factors may cause actual results to
differ materially from those anticipated in such forward-looking statement or
statements.
ITEM 7. EXHIBITS.
EXHIBIT 2.1 Purchase Agreement between Cyrk and Rockridge Partners,
Inc., dated January 20, 2001, as amended by Amendment No. 1 to
the Purchase Agreement, dated February 15, 2001 (the "Purchase
Agreement"), including EXHIBIT 1.2(a)(iv) thereto (the
"Subordinated Note").
EXHIBIT 99.1 Pro-forma financial statements.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned and hereunto duly authorized.
CYRK, INC.
Date: March 2, 2001 By: /s/ Dominic F. Mammola
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Dominic F. Mammola,
Executive Vice President and
Chief Financial Officer