UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): September 4, 2003
TRIARC COMPANIES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-2207 38-0471180
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(State or other (Commission (I.R.S. Employer
jurisdiction of File No.) Identification No.)
incorporation of
organization)
280 Park Avenue, New York, NY 10017
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (212) 451-3000
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(Former name or former address,
if changed since last report)
Item 12. Results of Operations and Financial Condition
The information in this report is being furnished and shall not be deemed
to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, or otherwise subject to the liabilities of that Section. In
addition, the information in this report shall not be incorporated by reference
into the filings of the Company under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, except as shall be expressly
set forth by specific reference in such filing.
On August 11, 2003, Triarc Companies, Inc. (the "Company") declared a
special stock distribution (the "Stock Distribution") of two shares of a newly
designated series of its previously authorized class B common stock with a par
value of $.10 per share (the "Class B Common Stock") for each outstanding share
of the Company's class A common stock with a par value of $.10 per share (the
"Class A Common Stock") held on August 21, 2003, with a distribution date of
September 4, 2003. The Class B Common Stock will be entitled to one-tenth of a
vote per share, will have a $.01 per share liquidation preference and will be
entitled to receive regular quarterly cash dividends per share of at least 110%
of any regular quarterly cash dividends per share when, as and if, declared on
the Class A Common Stock through September 4, 2006. Thereafter, the Class B
Common Stock will participate equally on a per share basis with the Class A
Common Stock in any cash dividends.
The Company is hereby providing summary consolidated operating data in the
table below to report the effect of the Stock Distribution on its previously
reported income (loss) per share. The income (loss) per share amounts in the
summary consolidated operating data have been set forth on both a historical
pre-distribution and a pro forma post-distribution basis, since the distribution
has been declared but has not yet been made. The summary consolidated operating
data for the years ended January 2, 2000 and December 31, 2000 also
retroactively reflect the effect of the adoption of Statement of Financial
Accounting Standards No. 145 ("SFAS 145") resulting in the reclassification of
charges related to the early extinguishment of debt previously reported as
extraordinary charges. The summary consolidated operating data (i) for each of
the fiscal years in the five-year period ended December 29, 2002 have been
derived and reclassified from the Company's audited consolidated income
statements contained in the Company's Annual Reports on Form 10-K for each of
the five fiscal years and (ii) for the six-month periods ended June 29, 2003 and
June 30, 2002 (the "Six-Month Periods") have been derived and reclassified from
the Company's unaudited condensed consolidated statements of operations included
in its Quarterly Report on Form 10-Q for the quarter ended June 29, 2003. In the
opinion of the Company, the unaudited summary consolidated operating data for
the Six-Month Periods contains all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the Company's
results for those periods. The Company's results for the Six-Month Periods are
not necessarily indicative of the results that may be expected for the Company's
entire fiscal year. The summary consolidated operating data should be read
together with the Company's consolidated financial statements and accompanying
notes, as well as management's discussion and analysis of financial condition
and results of operations, all of which can be found in the publicly available
documents referred to above.
SUMMARY CONSOLIDATED OPERATING DATA
Year Ended (1) (2) Six Months Ended (1) (2)
------------------------------------------------------------- ------------------------
January 3, January 2, December 31, December 30, December 29, June 30, June 29,
1999 (3) 2000 (3) 2000 (3) 2001 2002 (11) 2002 (11) 2003 (11)
---- ---- ---- ---- ---- ---- ----
(In thousands except per share amounts)
Revenues:
Net sales.................................$ -- $ -- $ -- $ -- $ -- $ -- $ 99,895
Royalties and franchise and related fees.. 78,429 81,658 87,450 92,823 97,782 47,218 44,639
-------- -------- -------- ------- ------- --------- --------
78,429 81,658 87,450 92,823 97,782 47,218 144,534
-------- -------- -------- ------- ------- --------- --------
Costs and expenses:
Cost of sales, excluding depreciation and
amortization............................ -- -- -- -- -- -- 73,844
Selling, general and administrative....... 62,998 68,498 80,212 (8) 77,355 (9) 75,893 38,837 54,422
Depreciation and amortization, excluding
amortization of deferred financing
costs................................... 4,916 5,423 5,313 6,506 6,550 3,255 6,797
Capital market transaction related
compensation............................ -- -- 26,010 (8) -- -- -- --
Capital structure reorganization related
charge.................................. -- 2,126 (7) 306 -- -- -- --
-------- -------- -------- ------- ------- --------- --------
67,914 76,047 111,841 83,861 82,443 42,092 135,063
-------- -------- -------- ------- ------- --------- --------
Operating profit (loss)............... 10,515 5,611 (7) (24,391)(8) 8,962 (9) 15,339 5,126 9,471
Interest expense............................. (13,031) (1,260)(7) (4,804) (30,447) (26,210) (13,163) (17,825)
Insurance expense related to long-term debt.. -- -- (550) (4,805) (4,516) (2,305) (2,138)
Early extinguishment of debt................. -- (2,351)(7) -- -- -- -- --
Investment income, net....................... 9,863 16,904 30,715 33,632 851 1,147 6,870
Costs of proposed business acquisitions not
consummated................................ (900) (416) -- (623) (2,238) (132) (930)
Gain (loss) on sale of businesses, net....... -- 1,188 -- 500 (1,218) (1,218) --
Other income (expense), net.................. 1,572 2,827 1,241 10,191 1,358 (228) 975
-------- --------- -------- ------- ------- --------- -------
Income (loss) from continuing
operations before income taxes
and minority interests.............. 8,019 22,503 (7) 2,211 (8) 17,410 (9) (16,634) (10,773) (3,577)
(Provision for) benefit from income taxes.... (4,832) (6,328)(7) (12,368)(8) (8,696)(9) 3,329 970 67
Minority interests in loss of a consolidated
subsidiary................................. -- -- -- 252 3,548 1,246 112
-------- -------- -------- ------- ------- --------- --------
Income (loss) from continuing
operations.......................... 3,187 16,175 (7) (10,157)(8) 8,966 (9) (9,757) (8,557) (3,398)
Income (loss) from discontinued operations... 11,449 (6) (6,051)(7) 451,398 (8) 43,450 (9) 11,100 (10) -- --
-------- -------- -------- ------- ------- --------- --------
Net income (loss).....................$ 14,636 (6)$ 10,124 (7) $441,241 (8) $52,416 (9) $ 1,343 (10)$ (8,557) $ (3,398)
======== ======== ======== ======= ======= ========= ========
Basic income (loss) per share (4):
Continuing operations ....................$ .11 $ .62 $ (.44) $ .42 $ (.48) $ (.42) $ (.17)
Discontinued operations .................. .37 (.23) 19.43 2.02 .54 -- --
-------- -------- -------- ------- ------- --------- --------
Net income (loss).........................$ .48 $ .39 $ 18.99 $ 2.44 $ .06 $ (.42) $ (.17)
======== ======== ======== ======= ======= ========= ========
Diluted income (loss) per share (4):
Continuing operations ....................$ .10 $ .60 $ (.44) $ .40 $ (.48) $ (.42) $ (.17)
Discontinued operations .................. .36 (.23) 19.43 1.91 .54 -- --
-------- --------- -------- ------- ------- --------- --------
Net income (loss).........................$ .46 $ .37 $ 18.99 $ 2.31 $ .06 $ (.42) $ (.17)
======== ======== ======== ======= ======= ========= ========
Pro forma basic income (loss) per share (5):
Continuing operations ....................$ .03 $ .21 $ (.15) $ .14 $ (.16) $ (.14) $ (.06)
Discontinued operations .................. .13 (.08) 6.48 .67 .18 -- --
-------- -------- -------- ------- ------- --------- --------
Net income (loss).........................$ .16 $ .13 $ 6.33 $ .81 $ .02 $ (.14) $ (.06)
======== ======== ======== ======= ======= ========= ========
Pro forma diluted income (loss)per share (5):
Continuing operations ....................$ .03 $ .20 $ (.15) $ .13 $ (.16) $ (.14) $ (.06)
Discontinued operations .................. .12 (.07) 6.48 .64 .18 -- --
-------- -------- -------- ------- ------- --------- --------
Net income (loss).........................$ .15 $ .13 $ 6.33 $ .77 $ .02 $ (.14) $ (.06)
======== ======== ======== ======= ======= ========= ========
Weighted average common shares outstanding:
Historical pre-distribution............... 30,306 26,015 23,232 21,532 20,446 20,454 20,294
Pro forma post-distribution............... 90,918 78,045 69,696 64,596 61,338 61,362 60,882
Notes to Summary Consolidated Operating Data
(1) The Company reports on a fiscal year basis consisting of 52 or 53 weeks
ending on the Sunday closest to December 31. In accordance with this
method, the Company's 1998 fiscal year contained 53 weeks and each of the
Company's 1999, 2000, 2001 and 2002 fiscal years contained 52 weeks. Each
of the Company's Six-Month Periods contained 26 weeks.
(2) Certain amounts included in the prior periods' Summary Consolidated
Operating Data have been reclassified to (a) retroactively reflect the
adoption on December 30, 2002 of SFAS 145 and (b) otherwise conform with
the current period's presentation. The adoption of SFAS 145 resulted in the
reclassification of charges for early extinguishment of debt in fiscal 2000
and 2001 previously reported as extraordinary charges to either early
extinguishment of debt on a pre-tax basis or income (loss) from
discontinued operations, as applicable.
(3) Summary Consolidated Operating Data for the fiscal years ended on or prior
to the fiscal year ended December 31, 2000 reflect the discontinuance of
the Company's beverage businesses sold in October 2000 and for the years
ended on or prior to the fiscal year ended January 2, 2000 reflect the
discontinuance of the Company's propane business sold in July 1999.
(4) Basic and diluted income (loss) per share are the same for the fiscal years
2000 and 2002 and for the Six-Month Periods since all potentially dilutive
securities would have had an antidilutive effect based on the loss from
continuing operations for each of those periods. The shares used in the
calculation of diluted income (loss) per share for the fiscal years 1998
(31,527,000), 1999 (26,943,000) and 2001 (22,692,000) consist of the
weighted average number of common shares outstanding and potential common
shares reflecting the effect of dilutive stock options of 1,221,000,
818,000 and 1,160,000, respectively, and for the fiscal year 1999 the
effect of a dilutive forward purchase obligation for common stock of
110,000 shares.
(5) Pro forma basic income (loss) per share has been computed by dividing the
net income (loss) attributable to the Class A Common Shares and Class B
Common Shares by the weighted average number of shares of each class
assuming the Stock Distribution had occurred at the beginning of each
period presented. Pro forma diluted income (loss) per share has been
computed by dividing the net income (loss) attributable to the Class A
Common Shares and Class B Common Shares by the weighted average number of
commons shares and potential common shares of each class assuming the Stock
Distribution had occurred at the beginning of each period presented. Pro
forma basic and diluted income (loss) per share are the same for the fiscal
years 2000 and 2002 and for the Six-Month Periods since all potentially
dilutive securities would have had an antidilutive effect based on the loss
from continuing operations for each of those periods. The shares used in
the calculation of pro forma diluted income (loss) per share for the fiscal
years 1998 (94,581,000), 1999 (80,829,000) and 2001 (68,076,000) consist of
the weighted average number of common shares outstanding and potential
common shares reflecting the effect of dilutive stock options of 3,663,000,
2,454,000 and 3,480,000, respectively, and for the fiscal year 1999 the
effect of a dilutive forward purchase obligation for common stock of
330,000 shares. Since there were no dividends declared or contractually
payable in any of the periods presented, the net income (loss) was
allocated one-third to the Class A Common Shares and two-thirds to the
Class B Common Shares based on how each class would have shared in the net
income (loss) in accordance with the Stock Distribution. Pro forma basic
and diluted income (loss) per share is the same for each of the two classes
of common stock since there were no dividends declared or contractually
payable during any of the periods presented.
(6) Reflects certain significant credits recorded during fiscal 1998 as
follows: $7,074,000 credited to net income representing (1) $3,067,000
included in the income from operations of the discontinued businesses
consisting of $5,016,000 of gain on sale of businesses less $1,949,000 of
related income taxes and (2) $4,007,000 of gain on disposal of discontinued
operations.
(7) Reflects certain significant charges and credits recorded during fiscal
1999 as follows: $2,126,000 charged to operating profit representing a
capital structure reorganization related charge related to equitable
adjustments made to the terms of outstanding stock options for stock of a
former subsidiary held by corporate employees; $1,425,000 charged to income
from continuing operations before income taxes and minority interests
representing (1) the aforementioned $2,126,000 charged to operating profit
and (2) a $2,351,000 charge from the early extinguishment of debt, both
less $3,052,000 of reversal of excess interest expense accruals for
interest due the Internal Revenue Service ( the "IRS") in connection with
the completion of their examinations of the Company's Federal income tax
returns for prior years; $4,262,000 credited to income from continuing
operations representing $5,127,000 of release of excess reserves for income
taxes in connection with the completion of IRS examinations of the
Company's Federal income tax returns less the aforementioned $1,425,000
charged to income from continuing operations before income taxes and
minority interests plus $560,000 of related income tax benefit; and
$3,897,000 credited to net income representing (1) the aforementioned
$4,262,000 credited to income from continuing operations and (2)
$15,102,000 of gain on disposal of discontinued operations, both less
$15,467,000 of charges reported in loss from operations of the discontinued
businesses consisting of (a) a $16,757,000 charge from the early
extinguishment of debt, (b) a $3,348,000 capital structure reorganization
related charge, similar to the charge in continuing operations, relating to
option holders who were employees of the sold businesses, (c) $411,000 of
provision for interest due the IRS in connection with the completion of
their examination of the Company's Federal income tax returns, all less
$7,651,000 of related income tax benefit and (d) $2,602,000 of provision
for income taxes in connection with the completion of IRS examinations of
the Company's Federal income tax returns.
(8) Reflects certain significant charges and credits recorded during fiscal
2000 as follows: $36,432,000 charged to operating loss and income from
continuing operations before income taxes and minority interests
representing (1) a $26,010,000 charge for capital market transaction
related compensation and (2) a $10,422,000 charge resulting from the
Company's repurchase of 1,045,834 shares of its Class A Common Stock from
certain of our officers and a director within six months after exercise of
the related stock options by the officers and director included in selling,
general and administrative; $32,914,000 charged to loss from continuing
operations representing the aforementioned $36,432,000 less $3,518,000 of
related income tax benefit; and $427,352,000 credited to net income
representing $460,266,000 of the then estimated gain on disposal of the
Company's former beverage businesses credited to income from discontinued
operations, net of a $20,680,000 after-tax charge from the early
extinguishment of debt relating to the former beverage businesses, less the
aforementioned $32,914,000 charged to loss from continuing operations.
(9) Reflects certain significant credits recorded during fiscal 2001 as
follows: $5,000,000 credited to selling, general and administrative,
operating profit and income from continuing operations before income taxes
and minority interests representing the receipt of a $5,000,000 note
receivable from the Company's Chairman and Chief Executive Officer and
President and Chief Operating Officer received in connection with the
settlement of a class action lawsuit involving certain awards of
compensation to those executives; $3,200,000 credited to income from
continuing operations representing the aforementioned $5,000,000 less
$1,800,000 of related income tax expense; and $46,650,000 credited to net
income representing the aforementioned $3,200,000 credited to income from
continuing operations and $43,450,000 of additional gain on disposal of the
Company's former beverage businesses.
(10) Reflects a significant credit recorded during fiscal 2002 as follows:
$11,100,000 credited to net income representing adjustments to the
previously recognized gain on disposal of the Company's former beverage
businesses due to the release of reserves for income taxes associated with
the discontinued beverage operations in connection with the receipt of
related income tax refunds.
(11) The Company completed the acquisition of all of the voting equity interests
of Sybra, Inc. ("Sybra") on December 27, 2002. Sybra owned and operated 239
Arby's restaurants as of the date of the acquisition of Sybra and, prior to
the acquisition, was the second largest franchisee of Arby's restaurants.
The Summary Consolidated Operating Data for the year ended December 29,
2002 includes the results of Sybra from it's acquisition on December 27,
2002 through December, 29 2002 with the results of operations before income
taxes reported in other income (expense), net for convenience. The Summary
Consolidated Operating Data for the six-month period ended June 29, 2003
includes the results of Sybra but the consolidated operating data for the
six-month period ended June 30, 2002 does not include the results of Sybra.
However, the Summary Consolidated Operating Data for the six-month period
ended June 30, 2002 includes royalties from Sybra of $3,601,000 whereas the
royalties from Sybra of $3,450,000 for the six-month period ended June 29,
2003 were eliminated in consolidation.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on behalf by the undersigned
hereunto duly authorized.
TRIARC COMPANIES, INC.
By: /s/ FRANCIS T. MCCARRON
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Francis T. McCarron
Senior Vice President and
Chief Financial Officer
Dated: September 4, 2003