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Carrols Corp – ‘10-K/A’ for 12/28/97

As of:  Tuesday, 11/10/98   ·   For:  12/28/97   ·   Accession #:  17927-98-9   ·   File #:  1-06553

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  As Of                Filer                Filing    For·On·As Docs:Size

11/10/98  Carrols Corp                      10-K/A     12/28/97    1:135K

Amendment to Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K/A      Amendment to Annual Report                            38    267K 


Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
2Item 1. Business
"Atlantic Acquisition
"Item 2. Properties
"Item 3. Legal Proceedings
3Item 4. Submission of Matters to A Vote of Security Holders
"Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
4Item 6. Selected Financial Data
5Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
"Ebitda
6Item 7A. Quantitative and Qualtitative Disclosures About Market Risks
"Item 8. Financial Statements and Supplementary Data
"Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
7Item 10. Directors and Executive Officers of the Registrant
8Item 11. Executive Compensation
10Vituli Employment Agreement
"Accordino Employment Agreement
"Item 12. Security Ownership of Certain Beneficial Owners and Management
"Item 13. Certain Relationships and Related Transactions
11Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8K
20Carrols
34Holdings
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KA Annual Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 FOR FISCAL YEAR ENDED DECEMBER 28, 1997 COMMISSION FILE NUMBER 1-6553 CARROLS CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE 16-0958146 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 968 JAMES STREET SYRACUSE, NEW YORK 13203 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (315) 424-0513 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: 11-1/2% SENIOR NOTES DUE 2003 (Title of Class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _ X No___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of the voting stock held by non-affiliates of the Registrant: NO VOTING STOCK IS HELD BY NON-AFFILIATES. The number of shares outstanding of each of the Registrant's classes of common stock, as of March 15, 1998: 10.
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THE COMPANY USES A 52-53 WEEK FISCAL YEAR ENDING ON THE SUNDAY CLOSEST TO DECEMBER 31. ALL REFERENCES HEREIN TO THE FISCAL YEARS ENDED DECEMBER 31, 1995, DECEMBER 29, 1996 AND DECEMBER 28, 1997 WILL HEREINAFTER BE REFERRED TO AS THE FISCAL YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997, RESPECTIVELY. PART I THIS 1997 ANNUAL REPORT ON FORM 10-K CONTAINS STATEMENTS WHICH CONSTITUTE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THOSE STATEMENTS INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF THE REGISTRANT AND ITS MANAGEMENT TEAM. INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD- LOOKING STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHER THINGS, COMPETITIVE, ECONOMIC AND REGULATORY FACTORS, GENERAL ECONOMIC CONDITIONS, THE ABILITY OF THE REGISTRANT TO MANAGE ITS GROWTH AND SUCCESSFULLY IMPLEMENT ITS BUSINESS STRATEGY AND OTHER RISKS AND UNCERTAINTIES THAT ARE DISCUSSED HEREIN. ITEM 1. BUSINESS HISTORICAL DEVELOPMENT Carrols Corporation ("Carrols" or the "Company") is the largest franchisee of Burger King restaurants in the United States. As of March 15, 1998 Carrols was operating 338 Burger King restaurants located in 13 Northeastern, Midwestern and Southeastern states. During the Company's most recent fiscal year, the Company increased the total number of restaurants that it operates by over 40% growing from 232 restaurants in 1996 to 335 restaurants at December 31, 1997. During 1997, Carrols opened 11 new restaurants, acquired 93 restaurants in 6 transactions, and closed one underperforming restaurant. Carrols was incorporated in 1968 and through 1976 its principal business was the operation of fast food hamburger restaurants under the name Carrols Restaurants and the operation of movie theaters under the name CinemaNational. In 1976, as a result of growing competition from larger and better recognized national fast food restaurant chains, Carrols became a franchisee of Burger King Corporation ("BKC") and began converting its restaurants into Burger King restaurants and ceased operating and franchising restaurants under the name of Carrols Restaurants. In order to facilitate the financing of the conversion of these restaurants, Carrols disposed of a substantial portion of its movie theater assets. In 1969, Carrols offered its common stock through an initial public offering. The Company's shares were listed for trading on the New York Stock Exchange in 1983. The Company was acquired in December 1986 (the "1986 Acquisition") by Carrols Holdings Corporation ("Holdings"), a corporation formed to effect the 1986 Acquisition by Mr. Vituli, the Company's current Chairman and CEO, and other members of the Company's then-current senior management, a private investor group and certain institutional investors. As a result of the 1986 Acquisition, Carrols became a wholly-owned subsidiary of Holdings. At the time of the 1986 Acquisition, the Company owned 138 Burger King restaurants and a food distribution business. In August 1990, the Company sold its food distribution business to Burger King Distribution Services ("BKDS"), a division of BKC. Carrols currently purchases substantially all of its requirements for foodstuffs and paper and packaging products from ProSource Services Corporation ("ProSource"), the successor to BKDS, pursuant to a five year supply agreement which expires on March 31, 1999. ATLANTIC ACQUISITION. On April 3, 1996, pursuant to the Securities Purchase Agreement (the "Atlantic Agreement"), dated as of March 6, 1996, among Carrols, Holdings, the stockholders of Holdings and Atlantic Restaurants, Inc. ("Atlantic"), Atlantic acquired Holdings, the owner of 100% of the outstanding capital stock of the Company (the "Atlantic Acquisition"). Pursuant to the Atlantic Agreement, Atlantic acquired all of the outstanding voting capital stock of Holdings for an aggregate purchase price of approximately $86.5 million in cash. Atlantic is an indirect wholly-owned subsidiary of Bahrain International Bank (E.C.), a Bahrain exempt joint stock company ("BIB"). RECENT DEVELOPMENTS Recapitalization. On February 20, 1997, the Certificate of Incorporation of Holdings was amended (the "Amendment") such that (i) the 3,146,110 shares of Common Stock held by Atlantic were converted into 850,000 shares of Common Stock, (ii) each of the classes consisting of (a) 882,353 shares of Non-Voting Common Stock of Holdings, (b) 750 shares of Class B 10% Cumulative Redeemable Preferred Stock (Series I) of Holdings, par value $0.01 per share, and (c) 750 shares of Class B 10% Cumulative Redeemable Preferred Stock (Series lI) of Holdings, par value $.01 per share, was canceled and (iii) the outstanding warrants to purchase 488,111 shares of Common Stock were converted into warrants to purchase 131,876 shares of Common Stock. After giving effect to the foregoing, Holdings had 850,000 shares of Common Stock outstanding, all of which were held by Atlantic, with no other voting capital stock outstanding. MADISON DEARBORN INVESTMENT. On March 27, 1997, pursuant to a Stock Purchase Agreement (the "MD Agreement") dated February 25, 1997, between and among Holdings, Atlantic, Madison Dearborn Capital Partners, L.P. and Madison Dearborn Capital Partners II, L.P. (together with Madison Dearborn Capital Partners, L.P., the "MD Investors"), the MD Investors acquired (the "MD Investment") (i) from Holdings 283,334 shares of Common Stock (the "Holdings Shares") and (ii) from Atlantic 283,333 of the outstanding shares of Common Stock (the "Atlantic Shares," and, together with the Holdings Shares, the "MD Shares"). Pursuant to the MD Agreement, certain members of senior management also purchased 10,810 shares of Common Stock for $1.1 million. The aggregate purchase price for the MD Shares was approximately $61 million in cash (the "MD Purchase Price"), of which approximately one-half was paid to Holdings. TCB CREDIT FACILITY. On May 12, 1997 the Company and Holdings entered into a new financing agreement (the "TCB Refinancing") pursuant to which Chase/Texas Commerce Bank National Association ("TCB"), as Administrative Agent for a syndicate of lenders (the "Lenders"), (i) established a $25 million Revolving Credit Facility that replaced the existing Senior Secured Credit Facility with Heller Financial, Inc. ("Heller") and (ii) established a $127 million Advance Term Loan ($5 million of which was used to replace an existing $5 million term loan with Heller). OMEGA ACQUISITION. On March 28, 1997, the Company acquired 23 Burger King restaurants (including one restaurant under construction) located in Greenville, North Carolina and Spartanburg, South Carolina, for an aggregate purchase price of $21.1 million in cash, pursuant to two separate Purchase and Sale Agreements, each dated as of January 15, 1997, by and between the Company, Omega Food Services, Inc. and Harold W. Hobgood as Omega's agent. BUFFALO ACQUISITION. On August 20, 1997 the Company acquired 63 Burger King restaurants located in Western New York, Pennsylvania, Indiana and Kentucky for an aggregate purchase price of approximately $52 million in cash, pursuant to a Purchase Agreement, dated as of July 7, 1997, among the Company and Richard D. Fors, Jr., Charles J. Mund, Charles J. Mund, Jr., Eric W. Mund, William J. O'Donnell, John T. Sweeney, William J. Reznicek and certain other individuals and entities signatory thereto. BUSINESS STRATEGY Carrols business strategy is to continue to increase revenues and improve operating efficiencies thus increasing restaurant profits and EBITDA (as defined). The Company's strategy is based on the following components: DEVELOP NEW BURGER KING RESTAURANTS IN EXISTING MARKETS. The Company looks to expand in its existing markets through the development of new Burger King restaurants where the demographics support the Company's ability to increase profitability and operating leverage. The Company believes that the number of markets that it operates in will continue to provide opportunities for the construction of new restaurants. Management believes that new restaurant development risk is significantly reduced due to the proven success of the Burger King concept. The Company's new restaurant development efforts are primarily managed by its own staff of real estate and construction professionals with input from BKC's development field personnel. Prior to developing a new restaurant, the Company conducts an extensive site selection and evaluation process including in-depth demographic, market and financial analysis. SELECTIVE ACQUISITION OF EXISTING BURGER KING RESTAURANTS. The Company believes that due to the number of Burger King restaurants and the number of franchisees within the Burger King system that there will continue to be opportunities for selective growth through acquisition in contiguous and new geographic markets. When evaluating acquisition opportunities the Company assesses the attractiveness of the market from a demographic perspective including the potential for the development of new restaurants. The Company believes that its restaurant operating controls, management training and administrative efficiencies generally enable it to realize greater profitability from acquired restaurants than the former owners realized. It believes that it achieves profit efficiencies from its ability to improve controls over restaurant food costs, more efficient labor usage, and by its ability to realize economies of scale by leveraging its corporate infrastructure. CONSISTENTLY PROVIDE HIGH QUALITY PRODUCTS AND SUPERIOR CUSTOMER SERVICE. As the number of restaurants that the Company owns in a particular market increases, the Company has a greater ability to ensure overall customer satisfaction in that market through consistency in food quality, service and restaurant appearance. Its stronger presence in a particular market also allows the Company to maximize the effectiveness of local Burger King advertising and promotional programs. ACHIEVE OPERATING EFFICIENCIES. The Company's large number of restaurants, centralized management structure and management information systems enable the Company to improve operating efficiencies for both existing and newly acquired restaurants. These factors enable the Company to tightly control restaurant and corporate level costs, to capture economies of scale by leveraging its existing corporate overhead structure, and to use its sophisticated management information and point-of-sale systems to more efficiently manage its restaurant operations. Due to its size, the Company also realizes benefits from its improved bargaining power with respect to its purchasing and cost management activities. BURGER KING CORPORATION Overview. The Company believes that it realizes significant benefits from its affiliation with BKC as a result of the widespread recognition of the Burger King name and products, the size and market penetration of BKC's media advertising, BKC's overall management of the Burger King brand, including new product development, and from the continued growth of the Burger King system. According to publicly available information, the Burger King brand is the second largest restaurant franchised in the world, with more than 9,400 Burger King restaurants worldwide and system-wide restaurant sales of $9.8 billion for its fiscal year ended September 30, 1997. BKC is an indirect wholly owned subsidiary of Diageo PLC (a United Kingdom food and spirits company formed from the merger of Grand Metropolitan and Guinness). MENU AND OPERATIONS. The Burger King system marketing strategy is characterized by its "Have It Your Way" service, flame-broiling, generous portions and competitive prices. Burger King restaurants feature flame-broiled hamburgers, the most popular of which is The Whopper{<reg-trade-mark>} sandwich. The Whopper<reg-trade-mark> is a large, flame-broiled hamburger on a toasted bun garnished with combinations of mayonnaise, lettuce, onions, pickles and tomatoes. The basic menu of all Burger King restaurants consists of hamburgers, cheeseburgers, chicken and fish sandwiches, breakfast items, french fried potatoes, salads, shakes, desserts, soft drinks, milk and coffee. In addition, promotional menu items are introduced periodically for limited periods. BKC continually seeks to develop new products as it endeavors to enhance the menu and service of Burger King restaurants. The Company's Burger King restaurants are typically open seven days per week with minimum operating hours from 7:00 AM to 11:00 PM. Burger King restaurants are fast food restaurants of distinctive design and are generally located in high-traffic areas throughout the United States. The Company believes that convenience of location, quality of food, price/value of food served, and speed of service are the primary competitive advantages of Burger King restaurants. Burger King restaurants appeal to a broad spectrum of consumers, with multiple day-part meal segments appealing to different groups of consumers. RESTAURANT CONFIGURATIONS. The Company's Burger King restaurants consist of one of several building types with various seating capacities. BKC's traditional restaurant contains approximately 2,800 to 3,200 square feet with seating capacity for 90 to 100 customers, has drive-thru service windows, and has adjacent parking areas. Of the Company's 338 restaurants, at March 15, 1998, 316 are free-standing and 22 are located in retail shopping centers. In Carrols' freestanding Burger King restaurants over 55% of sales are generated from its drive-thru service windows. FRANCHISE AGREEMENTS. Each of Carrols' Burger King restaurants operates under a separate Franchise Agreement entered into between the Company and BKC. The Franchise Agreements require, among other things, that all restaurants be of standardized design and be operated in a prescribed manner, including utilization of the standard Burger King menu. The Franchise Agreements generally provide for an initial term of 20 years and have an initial fee of $40,000. A Successor Franchise Agreement may be granted by Burger King for an additional 20 year term, provided the restaurant meets the then-current BKC operating standards and the Company is not in default under the relevant Franchise Agreement. Currently, the Successor Franchise Agreement fee is $40,000. The Franchise Agreements are non-cancelable except for failure to abide by the terms thereof. In addition to this fee, in order to obtain a Successor Franchise Agreement, a franchisee is typically required to make capital improvements to the subject restaurant to bring the restaurant up to BKC's then-current design standards. The amount of such capital expenditures will vary widely depending upon the magnitude of the required changes and the degree to which the Company has made interim changes to the restaurant. Although the Company estimates that a substantial remodeling can cost in excess of $250,000, the Company's average remodeling cost over the past five years has been approximately $135,000 per restaurant. Carrols believes that it enjoys a good relationship with BKC and that it will satisfy BKC's normal Successor Franchise Agreement policies and, accordingly, believes that Successor Franchise Agreements will be granted in due course by BKC at the expiration of its existing Franchise Agreements. Historically, BKC has granted each of the Company's requests for a Successor Franchise Agreement for its restaurants. In addition to the initial franchise fee, Carrols currently pays a monthly royalty of 3-1/2% of the gross revenues from its restaurants to BKC. Burger King franchisees currently also contribute 4% of gross revenues from their Burger King restaurants to fund BKC's national and regional advertising. BKC engages in substantial national advertising and promotional activities and other efforts to maintain and enhance the nationwide Burger King system. Carrols supplements BKC's marketing with local advertising and promotional campaigns. The cost of a new restaurant also includes the requisite equipment, furniture, signage and various other costs. The Company estimates that the average initial cost for a standard free-standing restaurant is approximately $265,000 (excluding the cost of the building, land and site improvements). The Company estimates that the aggregate cost of constructing a free-standing restaurant and the cost of land and site improvements varies considerably depending upon building type, land cost and site work, and generally ranges from $700,000 to $1,000,000. The BKC Franchise Agreements do not grant any franchisee exclusive rights to a defined territory. The Company believes that BKC generally seeks to ensure that newly granted franchises do not materially adversely affect the operations of existing Burger King restaurants. The Company is required to obtain BKC's consent prior to the acquisition or development of new Burger King restaurants. BKC also has the right of first refusal to purchase any Burger King restaurant which is the subject of a contract of sale. Since the Acquisition, BKC has granted its approval to all of the Company's acquisitions, except for one instance when it exercised its right of first refusal with respect to one proposed six restaurant acquisition that the Company attempted to make in 1997. COMPANY OPERATIONS MANAGEMENT STRUCTURE. Substantially all executive management, finance, marketing and operations support functions are conducted centrally at the Company's Syracuse, New York headquarters. The Company currently has six regional directors, five of whom are vice presidents of the Company, who are each responsible for the operations of the Carrols' Burger King restaurants in their assigned region. Three of the regional directors have been employed by Carrols for over 20 years. The regional directors are supported by 44 district supervisors that are responsible for the direct oversight of the day-to-day operations of an average of seven restaurants. Typically, district supervisors have previously served as restaurant managers at one of Carrols' restaurants or at an acquired restaurant. Both regional directors and district supervisors are compensated with a fixed salary plus an incentive bonus based upon the performance of the restaurants under their supervision. A typical Carrols' Burger King restaurant is staffed with hourly employees who are supervised by a salaried manager and two or three salaried assistant managers. TRAINING. The Company maintains a comprehensive training and development program for all of its personnel. This program emphasizes the Burger King system-wide operating procedures, food preparation methods and customer service standards. Carrols provides both classroom and in-restaurant training for its salaried and hourly personnel. In addition, BKC's training and development programs are also available to the Company. MANAGEMENT INFORMATION SYSTEMS. Financial and management control of Carrols' restaurants is facilitated by the use of an integrated computerized back office and point of sale system which electronically transmits data from each of the Company's restaurants to Corporate headquarters on a daily basis. These systems provide daily tracking and reporting of customer traffic counts, menu item sales, payroll data, food and labor cost analyses and other operating information for each restaurant. This information is available daily to the restaurant manager, who is expected to react quickly to trends or situations in his or her restaurant. The district supervisors also receive daily information for all restaurants under their respective control and have access to key operating data on a remote basis using a laptop computer. Key restaurant performance indicators are monitored at each management level from district supervisor through senior management. The Company's management information system, typically not utilized by smaller Burger King franchisees and other smaller quick-service restaurant chains, provides management with the ability to analyze sales and product mix data, to minimize shrinkage, and to control labor costs. Carrols believes that these systems materially enhance its ability to more efficiently control and manage its restaurant operations. FACTORS AFFECTING THE COMPANY'S OPERATIONS. Carrols' business is affected by various factors including weather, gasoline prices and road construction. Winter weather conditions can be particularly severe in the Northeast where the Company operates a large number of its Burger King restaurants. Historically, the Company's business has also been affected by changes in local and national economic conditions, demographic trends, consumer spending habits and tastes, and concerns about the nutritional quality of quick-serve food. SITE SELECTION. The Company believes that the location of its restaurants is very important to each restaurant's success. Potential new development sites are evaluated based upon accessibility, visibility, costs, surrounding traffic patterns, competition and demographic characteristics. The Company's senior management, based upon analyses prepared by its real estate professionals and its operations personnel, determines the acceptability of all acquisition and new development sites. RESTAURANT LOCATIONS The following table sets forth the locations of the 338 Burger King restaurants in the Carrols' system at March 15, 1998. [Download Table] Total STATE RESTAURANTS Connecticut 1 Indiana 5 Kentucky 6 Maine 4 Massachusetts 2 Michigan 23 New Jersey 2 New York 151 North Carolina 41 Ohio 72 Pennsylvania 11 South Carolina 19 Vermont 1 Total 338 ADVERTISING AND PROMOTION The Company believes that one of the major advantages of being a Burger King franchisee is the value of the extensive regional and national advertising and promotional programs conducted by BKC. In addition to the benefits derived from BKC's advertising spending, which according to information published by BKC was over $400 million for 1997, Carrols supplements BKC's advertising and promotional activities with local advertising and promotions, including the purchase of additional television, radio and print advertising. Carrols also utilizes promotional programs, such as combination meals and discounted prices, targeted to its customers, thereby enabling Carrols to create a flexible and directed marketing program. Burger King franchisees, as well as BKC-owned restaurants, are generally required to contribute 4% of gross revenues from restaurant operations to an advertising fund, utilized by BKC for its advertising, promotional programs and public relations activities. BKC's advertising programs consist of national campaigns supplemented by local advertising. BKC's advertising campaigns are generally carried on television, radio and in circulated print media (national and regional newspapers and magazines). SUPPLIES AND DISTRIBUTION The Company is a member of a national purchasing cooperative created for the Burger King system known as Restaurant Services, Inc. ("RSI"). RSI is a non- profit independent cooperative which acts as the purchasing agent for approved distributors to the system and serves to negotiate the lowest cost for the Burger King system. The Company uses its purchasing power to negotiate directly with certain other vendors, as well as its distributor, to obtain favorable pricing and terms for supplying its restaurants. As a Burger King franchisee, Carrols is required to purchase all of its foodstuffs, paper goods and packaging materials from BKC-approved suppliers. Other non-food items such as kitchen utensils, equipment maintenance tools and other supplies may be purchased from any suitable source provided that such items meet BKC product uniformity standards. Carrols currently obtains substantially all of its foodstuffs (other than bread products which it purchases from local bakeries), paper goods, promotional premiums and packaging materials from ProSource Distribution Services, Inc. ("Prosource") under a five-year supply agreement which expires on March 31, 1999. The Company believes that ProSource's services are competitive with alternatives available to the Company. There are other BKC-approved supplier/distributors which compete with ProSource. Carrols believes that reliable alternative sources for all restaurant supplies are readily available at competitive prices should the arrangements with ProSource or any other existing supplier or distributor change. All BKC-approved suppliers are required to purchase foodstuffs and supplies from BKC-approved manufacturers and purveyors. BKC is responsible for monitoring quality control and supervision of these manufacturers and conducts regular visits to observe the preparation of foodstuffs, and to run various tests to ensure that only high quality foodstuffs are sold to BKC-approved suppliers. In addition, BKC coordinates and supervises audits of approved suppliers and distributors to determine continuing product specification compliance and to ensure that manufacturing plant and distribution center standards are met. QUALITY ASSURANCE The Company's operations are focused on achieving a high level of customer satisfaction with speed, accuracy and quality of service closely monitored. The Company's senior management and restaurant management staff are principally responsible for ensuring compliance with the Company's and BKC's operating procedures. The Company and BKC have uniform operating standards and specifications relating to the quality, preparation and selection of menu items, maintenance and cleanliness of the premises and employee conduct. Detailed reports from the Company's own management information system and surveys conducted by the Company or BKC are tabulated and distributed to management on a regular basis to help maintain compliance. All Burger King franchisees operate subject to a comprehensive regimen of quality assurance and health standards set by BKC, as well as standards set by Federal, state and local governmental laws and regulations. These standards include food preparation rules regarding, among other things, minimum cooking times and temperatures, sanitation and cleanliness. The "conveyor belt" cooking system utilized in all Burger King restaurants, which is calibrated to carry hamburgers through the flame broiler at regulated speeds, is one of the safest cooking systems among major quick-service restaurants and helps to ensure that the standardized minimum times and temperatures for cooking are met. In addition, BKC has set maximum time standards for holding unsold prepared food. The Company closely supervises the operation of all of its restaurants to help ensure that standards and policies are followed and that product quality, customer service and cleanliness of the restaurants are maintained. In addition, BKC may conduct unscheduled inspections of Burger King restaurants throughout the nationwide system. GOVERNMENT REGULATION Carrols is subject to various Federal, state and local laws affecting its business, including various health, sanitation, fire and safety standards. Newly constructed or remodeled restaurants are subject to state and local building code and zoning requirements. In connection with the remodeling and alteration of the Company's restaurants, the Company may be required to expend funds to meet certain Federal, state and local regulations, including regulations promulgated by the Americans with Disabilities Act (the "ADA") which require that remodeled or altered restaurants be handicap accessible. The Company is also subject to Federal and state environmental regulations, although such regulations have not had, and are not expected to have, a material effect on the Company's operations. The Company is subject to the Fair Labor Standards Act and various state laws governing such matters as minimum wage requirements, overtime and other working conditions and citizenship requirements. In September 1997, the second phase of an increase in the minimum wage was implemented in accordance with the Federal Fair Labor Standards Act of 1996. A significant number of the Company's food service personnel are paid at rates related to the Federal minimum wage and, accordingly, increases in the minimum wage have increased labor costs at the Company's restaurants. The Company is also subject to various local, state and Federal laws regulating the discharge of pollutants into the environment. The Company believes that it conducts its operations in substantial compliance with applicable environmental laws and regulations. In an effort to prevent and, if necessary, to correct environmental problems, the Company conducts environmental audits of proposed restaurant sites in order to determine whether there is any evidence of contamination prior to purchasing or entering into a lease. The Company believes that it is operating in compliance with applicable Federal, state and local laws and regulations governing its operations. COMPETITION The quick-service restaurant industry is highly competitive with respect to price, service, location and food quality. In each of its markets, Carrols' restaurants compete with a large number of national and regional restaurant chains, as well as locally-owned restaurants, offering low-priced and medium-priced fare. Convenience stores, grocery store delicatessens and food counters, cafeterias and other purveyors of moderately priced and quickly prepared foods also compete with the Company. In the Company's markets, McDonald's, Wendy's and Hardee's provide the most significant competition. The Company's largest competitor is McDonald's. According to publicly available information, as of December 31, 1997, the McDonald's worldwide system comprised over 23,000 restaurants and total system-wide revenues for the year ended December 31, 1997 were $33.6 billion. The Company believes that product quality and taste, national brand recognition, convenience of location, speed of service, menu variety, price and ambiance are the most important competitive factors in the quick-service restaurant industry and that its Burger King restaurants effectively compete in each category. EMPLOYEES At December 31, 1997, Carrols employed approximately 11,700 persons of which approximately 200 were supervisory and administrative personnel and 11,500 were restaurant operating personnel. None of Carrols' employees are covered by collective bargaining agreements. Approximately 10,500 of the restaurant operating personnel at December 31, 1997 were part-time employees. Carrols believes that the dedication of its employees is critical to its success, and that its employee relations are good. ITEM 2. PROPERTIES The Company owns the approximately 20,000 square foot building at 968 James Street, Syracuse, New York, which houses its executive offices and all of the Company's administrative operations (except for those conducted at five small regional offices). In addition to the above, at December 31, 1997 the Company owned or leased the following properties: [Download Table] Owned Leased Leased Land; Land; Land; Owned Owned Leased BUILDING BUILDING BUILDING TOTAL Burger King restaurants 23 17 295 (a) 335 Burger King restaurants under construction 1 2 1 4 Excess properties: Leased to others -- -- 4 4 Available for sale or lease 4 -- -- 4 Total properties 28 19 300 347 (a) Includes 22 restaurants located in mall shopping centers. Most of the Company's leases are coterminous with the related Franchise Agreements. The Company believes that it generally will be able to renew, at commercially reasonable rates, the leases whose terms expire prior to the subject Franchise Agreements. Most leases require the Company, as lessee, to pay utility and water charges, premiums on insurance and real estate taxes. Certain leases also require contingent rentals based upon a percentage of gross sales that exceed specified minimums. ITEM 3. LEGAL PROCEEDINGS The Company is not a party to any pending legal proceeding which, in management's belief, will have a material adverse effect on the Company's results of operations or financial condition, nor to any other pending legal proceedings other than ordinary, routine litigation incidental to its business.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS There is no established trading market for the Company's capital stock. Carrols Holdings Corporation owns 10 shares of common stock of the Company (representing 100% of the capital stock of the Company). Cash dividends paid during 1996 and 1997 by Carrols to Holdings were as follows: [Download Table] PER SHARE TOTAL January 1996 $ 800.00 $ 8,000 March 1996 $ 41,480.00 $ 414,800 August 1996 $ 20,722.40 $ 207,224 October 1996 $ 37,000.38 $ 370,004 April 1997 $ 184,217.01 $ 1,842,170 May 1997 $ 37,087.78 $ 370,878 July 1997 $ 13,610.00 $ 136,100 October 1997 $ 13,610.00 $ 136,100 December 1997 $ 185,309.46 $ 1,853,095 The Company's loan agreements impose limitations on certain restricted payments, which include dividends and preferred stock redemptions. As a result of the 1997 investments by the MD Investors and senior management, the Company has sufficient unrestricted amounts to enable it to make the required payments to satisfy preferred stock dividend and redemption requirements.
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ITEM 6. SELECTED FINANCIAL DATA DOLLARS IN THOUSANDS EXCEPT RESTAURANT DATA [Enlarge/Download Table] 1997 1996 1995 1994 1993 (A) SUMMARY OF OPERATING RESULTS: Restaurant sales $295,436 $240,809 $226,257 $203,927 $ 171,137 Costs and expenses: Cost of sales 85,542 68,031 63,629 57,847 48,502 Restaurant wages and related expenses 89,447 70,894 65,932 59,934 51,739 Advertising expense 13,122 10,798 9,764 8,785 7,930 Other restaurant operating expenses 61,691 48,683 45,635 42,390 35,192 Administrative expenses 13,121 10,387 10,434 9,122 7,534 Depreciation and amortization 15,102 11,015 11,263 11,259 12,143 Unusual (b) -___ 509 -___ 1,800 -_ _ Total operating costs and expenses 278,025 220,317 206,657 191,137 163,040 Operating income 17,411 20,492 19,600 12,790 8,097 Interest income from income tax refund (983) - - - - Interest expense 15,581 14,209 14,500 14,456 12,505 Income (loss) before taxes 2,813 6,283 5,100 (1,666) (4,408) Provision for (benefit from) income taxes 655 3,100 (9,826) 165 -___ Net Income Before Extraordinary Loss 2,158 3,183 14,926 (1,831) (4,408) Extraordinary Loss on Extinguishment of Debt -___ -___ -___ -___ (4,883) Net Income (Loss) $ 2,158 $ 3,183 $ 14,926 $ (1,831) $ (9,291) OTHER FINANCIAL DATA: EBITDA (c) $ 32,513 $ 31,507 $ 30,863 $ 24,049 $ 20,240 Total assets 215,328 138,588 135,064 125,319 119,735 Long-term debt 154,649 118,180 116,375 120,680 114,197 Capital lease obligations, long-term 2,060 2,503 3,301 3,966 4,603 Total long-term debt and capital lease obligations 156,709 120,683 119,676 124,646 118,800 Stockholders' equity (deficit) 17,447 (11,662) (12,916) (27,208) (22,404) NUMBER OF BURGER KING RESTAURANTS: At end of period 335 232 219 219 195 Annual weighted average 280 225 219 207 185 (a) All years included 52 weeks except fiscal 1993 which had 53 weeks. (b) Includes $509 in 1996 for costs associated with a change of control; includes $1,800 in 1994 for charges related to closing restaurants. (c) EBITDA represents operating income plus depreciation and amortization. While EBITDA should not be construed as a substitute for operating income or a better indicator of liquidity than cash flow from operating activities, which are determined in accordance with generally accepted accounting principles, EBITDA is included herein to provide additional information with respect to the ability of the Company to meet its future debt service, capital expenditure and working capital requirements. In addition, management believes that certain investors and lenders find EBITDA to be a useful tool for measuring the ability of the Company to service its debt.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations The following table sets forth, for the periods indicated, select operating results as a percentage of restaurant sales. [Download Table] 1997 1996 1995 Restaurant sales 100.0% 100.0% 100.0% Costs and expenses: Cost of sales 29.0 28.3 28.1 Restaurant wages and related expenses 30.3 29.4 29.1 Other restaurant expenses including advertising 25.3 24.7 24.5 Administrative expenses 4.4 4.5 4.6 Depreciation and amortization 5.1 4.6 5.0 Operating income 5.9% 8.5% 8.7% EBITDA 11.0% 13.1% 13.6% RESTAURANT SALES. Restaurant sales for the year ended December 31, 1997, increased 22.7% to $295.4 million from $240.8 in 1996. The increase in sales was primarily the result of the growth in the number of Burger King restaurants operated by the Company which increased from 232 at the end of 1996 to 335 at the end of 1997. During 1997, the Company opened 11 new restaurants, acquired 93 restaurants in six transactions, and closed one underperforming restaurant. Sales at the Company's 214 comparable restaurants (those units operating for the entirety of the compared periods) decreased 1.4% during 1997. In general, the Company did not increase menu prices during 1997. Restaurant sales were $240.8 million and $226.3 million for 1996 and 1995, respectively, and increased 6.4% and 10.9% over the year-earlier periods. Comparable restaurant sales increased 3.2% in 1996 and 3.8% in 1995. The average number of restaurants operated by the Company was 280 in 1997, compared to 225 in 1996 and 219 in 1995. OPERATING COSTS AND EXPENSES. Cost of sales (food and paper costs), as a percentage of sales, were 29.0% in 1997 compared to 28.3% in 1996 and 28.1% in 1995. The increase in 1997, in part, reflected somewhat higher food costs including approximately a 2% increase in average beef prices from 1996 level. The increase in 1996 was due to the effect of higher discount promotional activity over 1995, offset in part by lower commodity costs. Restaurant wages and related expenses have increased as a percentage of sales during the past three years rising from 29.1% in 1995, to 29.4% in 1996, and to 30.3% in 1997. Wages have increased over this period due to higher labor rates including the effect of increases in the Federal minimum wage rates over the past two years. The Federal Fair Labor Standards Act of 1996 mandated an increase from $4.25 per hour to $4.75 per hour which took effect in October 1996, and a second increase in September 1997 to $5.15 per hour. Other restaurant operating expenses were 25.3% of sales in 1997, compared to 24.7% in 1996 and 24.5% in 1995. In part, the increase in 1997 is reflective of general inflationary increases without a corresponding increase in comparable restaurant sales. In addition, the Company added a significant number of restaurants through acquisition during 1997, and therefore, expense relationships have been somewhat higher as these new units become fully integrated into the business of the Company. Administrative expenses increased approximately $2.7 million, and as a percentage of sales, were 4.4% in 1997 compared to 4.3% and 4.6% in 1996 and 1995, respectively. This increase reflects the addition of field supervision and corporate support as a result of the 1997 addition of over 100 restaurants and to support the Company's plans for continued expansion. EBITDA. Earnings before interest, taxes, depreciation and amortization ("EBITDA") increased from $31.5 million in 1996 to $32.5 million in 1997. As a percentage of sales, EBITDA decreased from 13.1% in 1996 to 11.0% in 1997 as a result of the factors discussed above. EBITDA was $30.9 million in 1995. DEPRECIATION AND AMORTIZATION. Depreciation and amortization was $15.1 million in 1997, $11.0 million in 1996 and $11.3 million in 1995. These costs increased $4.1 million in 1997 which was due primarily to the increase in goodwill and purchased intangibles resulting from the purchase method of accounting for newly acquired restaurants. INTEREST EXPENSE. Interest expense was $15.6 million in 1997 compared to $14.2 million and $14.5 million in 1996 and 1995, respectively. The increase in 1997 was the result of higher average debt balances brought about by the funding of the restaurants that were acquired during the year. INCOME TAXES. The provision for income taxes of $655,000 in 1997 resulted in an effective income tax rate of 23.2%. The low effective rate was primarily attributable to the favorable settlement of a Federal income tax claim that the Company has had outstanding for several years. As a result of the settlement, the Company's tax provision was reduced by $806,000 and the Company recorded interest income of $983,000. The higher than anticipated effective tax rate in 1996 was principally the result of the $.5 million of costs associated with a change of control of the Company which are not deductible. The income tax benefit reflected in 1995 resulted from the reversal of a valuation allowance for the net deferred income tax asset associated with the Company's tax loss carryforwards. This was based on a review of expected future earnings which concluded that it was more likely than not that the Company would fully realize the benefits of the net operating loss carryforwards. LIQUIDITY AND CAPITAL RESOURCES The Company does not have significant receivables or inventory and receives trade credit based upon negotiated terms in purchasing food products and other supplies. The Company is able to operate with a substantial working capital deficit because (i) restaurant operations are conducted on a cash basis, (ii) rapid turnover allows a limited investment in inventories, and (iii) cash from sales is usually received before related accounts for food, supplies and payroll become due. The Company's cash requirements arise primarily from the need to finance the opening and equipping of new restaurants, for ongoing capital reinvestment in its existing restaurants, for the acquisition of existing Burger King restaurants, and for debt service. The Company's 1997 operations generated approximately $19.9 million in cash, compared to $14.3 million during 1996 and $16.7 million in 1995. Capital expenditures represent a major investment of cash for the Company, and totaled $96.7 million, $23.2 million and $8.5 million, 1997, 1996 and 1995, respectively. The 1997 capital expenditures included $78.5 million for the acquisition of 93 existing Burger King restaurants (including real estate for 3 of the restaurants), as well as $9.7 million for the construction of 15 new restaurants. The balance of the 1997 capital expenditures went toward restaurant capital maintenance and remodeling. During 1997, the Company completed 23 remodels in conjunction with the renewal of franchises that were scheduled to expire between 1997 and 1999. During the past three years, the Company has completed 68 remodels. In 1998, the Company anticipates capital expenditures of approximately $35 million not including the cost of any acquisitions that the Company may make. These amounts include approximately $15 million for construction of new units (including certain real estate) and $8 million for ongoing reinvestment and remodeling of its existing restaurants. The Company's 1998 reinvestment and remodeling spending is anticipated to be somewhat higher than historical levels as the Company invests in the 1997 acquired units to bring them up to the Company's operating standards. In 1998, the Company also plans to upgrade its restaurant point-of-sale and in-restaurant support systems, and has also undertaken an upgrade of its headquarters information and decision support systems. The total cost of these systems projects is estimated to be $11 to 12 million over the next 12 to 18 months. On March 27,1997, Madison Dearborn Capital Partners acquired 283,334 shares, and senior management acquired 10,810 shares, of Carrols Holdings which resulted in the Company receiving net proceeds of $30.4 million. On May 12, 1997 the Company also entered into a new credit agreement which established a $25 million Revolving Loan Facility and a $127 million Advance Loan Facility which is available to fund the cost of acquisitions. During 1997, the Company used the net proceeds from the sale of stock along with borrowings under its credit facility to fund the acquisition of 93 Burger King restaurants totaling $79.6 million. The sale and leaseback of 15 restaurant properties in December 1997 generated $13 million, the proceeds of which were used to reduce amounts which had been borrowed under the Company's credit agreement. In 1997, the Company also paid dividends to Holdings totaling $4.3 million for the payment by Holdings of dividends on its preferred stock and for the redemption of $3.6 million of the preferred stock. The balance of Holdings' preferred stock is scheduled for mandatory redemption with payments of $1.8 million in December 1998 and December 1999. At December 31, 1997, the Company had $21.5 million available under its Revolving Loan facility after reserving $1.0 million for a letter of credit guaranteed by the facility, and $64.3 million available under its Advance Loan Facility. While interest is accrued monthly, payments of approximately $6.2 million for interest on the Company's 11.50% Senior Notes are made each February 15th and August 15th thus creating semi-annual cash needs. The Company believes that its operations and capital resources will provide sufficient cash availability to cover its working capital, capital expenditures, planned development and debt service requirements for the foreseeable future. The Company's loan agreements impose limitations on certain restricted payments, which include dividends and preferred stock redemptions. As a result of the 1997 investments by Madison Dearborn and senior management, the Company has sufficient unrestricted amounts to enable it to make the required payments to satisfy preferred stock dividend and redemption requirements.
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INFLATION The inflationary factors which have historically affected the Company's results of operations include increases in food and paper costs, labor and other operating expenses. Wages paid in the Company' s restaurants are impacted by changes in the Federal or state minimum hourly wage rate. Accordingly, changes in the Federal or states minimum hourly wage rate directly affect the Company's labor cost. The Company and the restaurant industry typically attempt to offset the effect of inflation, at least in part, through periodic menu price increases and various cost reduction programs. However, no assurance can be given that the Company will be able to offset such inflationary cost increases in the future. YEAR 2000 The Company recognizes the need to ensure its operations will not be adversely impacted by Year 2000 software failures. The Company is addressing this risk to the availability and integrity of financial systems and the reliability of operational systems. As discussed above, the Company has projects underway for the installation of new point-of-sale systems in its restaurants and for the replacement of a substantial portion of its corporate financial and decision support systems. The primary purpose of these projects is designed to improve the efficiency of the Company's restaurant and support operations, however, they will also provide the additional benefit of making its systems Year 2000 compliant. The Company is installing commercially available point-of-sale hardware and software, and has purchased a suite of financial software applications, all of which are designed and warranted to be Year 2000 compliant. ITEM 7A. QUANTITATIVE AND QUALTITATIVE DISCLOSURES ABOUT MARKET RISKS Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Index to Financial Statements attached hereto is set forth in Item 14. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE On August 12, 1997 the registrant dismissed the accounting firm of Arthur Andersen LLP ("Arthur Andersen") as their principal audit accountant and has engaged the services of PricewaterhouseCoopers, L.L.P as their principal accountants. Arthur Andersen were the principal audit accountants during the year ended December 31, 1996 and their report on the financial statements for the period ended December 31, 1996 did not contain an adverse opinion or disclaimer of opinion nor were financial statement opinions qualified or modified as to uncertainty, as to audit scope or as to accounting principles. There have been no disagreements on any matters of accounting principles or practices, financial statement disclosure or auditing scope of procedure with the accounting firm of Arthur Andersen for the most recent year or any subsequent interim period.
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PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT DIRECTORS AND EXECUTIVE OFFICERS The Company's Directors and executive officers are: [Download Table] NAME AGE POSITION WITH THE COMPANY Alan Vituli 56 Chairman of the Board and Chief Executive Officer Daniel T. Accordino 47 President, Chief Operating Officer and Director Paul R. Flanders 41 Vice President-Finance and Treasurer Timothy J. LaLonde 41 Vice President-Controller Richard H. Liem 44 Vice President-Financial Operations Joseph A. Zirkman 37 Vice President, General Counsel and Secretary Steven Barnes 49 Vice President-Regional Director Michael A. Biviano 41 Vice President-Regional Director Joseph W. Hoffman 35 Regional Director David R. Smith 48 Vice President-Regional Director James E. Tunnessen 43 Vice President-Regional Director Richard L. Verity 41 Vice President-Regional Director Benjamin D. Chereskin 39 Director James M. Conlon 30 Director David J. Mathies, Jr. 50 Director C. Ronald Petty 52 Director Robin P. Selati 32 Director Clayton E. Wilhite 52 Director Certain biographical information regarding each current Director and executive officer of the Company is set forth below: Mr. Vituli has been Chairman of the Board of Carrols since 1986 and Chief Executive Officer since March 1992. He is also a director and Chairman of the Board of Holdings. Between 1983 and 1985, Mr. Vituli was employed by Smith Barney, Harris Upham & Co., Inc. as a senior vice president responsible for real estate transactions. From 1966 until joining Smith Barney, Mr. Vituli was associated with the accounting firm of Coopers & Lybrand, first as an employee and the last ten years as a partner. Among the positions held by Mr. Vituli at Coopers & Lybrand was national director of mergers and acquisitions. Prior to joining Coopers & Lybrand, Mr. Vituli was employed in a family owned restaurant business. Mr. Vituli also serves as a Director on the Board of Directors of Pollo Tropical, Inc. Mr. Accordino has been President, Chief Operating Officer and a Director of Carrols since February 1993. Prior thereto, he served as Executive Vice President-Operations of Carrols from December 1986 and as Senior Vice President from April 1984. From 1979 to April 1984 he was Vice President responsible for restaurant operations of the Company, having previously served as the Company's Assistant Director of Restaurant Operations. Mr. Accordino has been employed by the Company since 1973. Mr. Flanders has been Vice President-Finance and Treasurer since April 1997. Prior to joining Carrols he was Vice President-Corporate Controller of Fay's Incorporated from 1989 to 1997, and Vice President-Controller for Computer Consoles, Inc. from 1982 to 1989. Mr. Flanders was also associated with the accounting firm of Touche Ross & Co. from 1977 to 1982. Mr. LaLonde has been Vice President-Controller since July 1997. Prior to joining Carrols he was a Controller at Fay's Incorporated from 1992 to 1997. Prior to that he was a Senior Audit Manager with the accounting firm of Deloitte & Touche LLP having been associated with that firm beginning in 1978. Mr. Liem became Vice President-Financial Operations in May 1994. Prior to joining Carrols Mr. Liem was a Senior Audit Manager with the accounting firm of Price Waterhouse. Mr. Liem was with Price Waterhouse beginning in 1983. Mr. Zirkman became Vice President and General Counsel of Carrols in January 1993. He was appointed Secretary of the Company in February 1993. Prior to joining Carrols, Mr. Zirkman was an associate with the New York City law firm of Baer Marks & Upham beginning in 1986. Mr. Barnes is Vice President-Regional Director of Carrols. He has been a Vice President since February 1997 and a Regional Director of Operations since 1993. Prior to joining Carrols, Mr. Barnes was Vice President-Operations of Snapps Restaurants, Inc. from 1989 to 1993. Mr. Biviano is Vice President-Regional Director of Carrols. He has been Regional Director of Operations since October 1989, having served as District Supervisor from December 1983 to October 1989. Mr. Biviano has been employed by the Company since 1973. Mr. Hoffman has been Regional Director of Carrols since July 1997. Mr. Hoffman joined the Company in 1993 in connection with one of the Company's acquisitions and served in the capacity of District Supervisor from 1993 to 1997. Prior to 1993 he was in a similar capacity with Community Food Service, Inc. Mr. Smith is Vice President-Regional Director of Carrols. He has been Regional Director of Operations since 1984, having served as District Supervisor from 1975 to 1984. Mr. Smith has been employed by the Company since 1972. Mr. Tunnessen is Vice President-Regional Director of Carrols. He has been Regional Director of Operations since August 1988, having served as District Supervisor from 1979 to August 1988. Mr. Tunnessen has been employed by the Company since 1972. Mr. Verity has been Vice President-Regional Director since August 1997 when he joined the Company in conjunction with the Company's acquisition of a group of 63 restaurants. Mr. Verity was previously with Resser Management Corp. from 1986 to 1997 and held the position of Executive Vice President. Mr. Chereskin has served as a Director since March 1997. He has been a Vice President of Madison Dearborn Capital Partners since co-founding the firm in 1993. Prior to that Mr. Chereskin was with First Chicago Venture Capital for nine years. Mr. Chereskin also serves on the Board of Directors of Beverages & More, Inc., The Cornerstone Investments Group, Inc., Tuesday Morning Corporation and National Wholesale Liquidators, Inc. Mr. Conlon has served as a Director since February 1998. Since 1992, he has held the position of Managing Director-Merchant Banking, USA for Dilmun Investments, Inc. From 1989 to 1992 Mr. Conlon was a securities analyst for TIAA-CREF. Mr. Mathies has served as a Director of Carrols since April 1996. Since 1988, Mr. Mathies has been President of Dilmun Investments, Inc. From 1971 to 1988, he was employed by Mellon Bank, where he was Head of their Pension Management Group, providing investment management services to middle market clients. Mr. Petty has served as a Director of Carrols since July 1997. Mr. Petty has been the Chairman, Chief Executive and President of Peter Piper, Inc. since November 1996. Prior to joining Peter Piper, Mr. Petty was the Executive Vice President of Flagstar Companies, Inc. and President and Chief Executive Officer of Denny's. Before that he served as President and Chief Executive of Miami Subs Corporation and held a variety of senior positions with Burger King Corporation including President and Chief Operating Officer of its U.S. and International division. Mr. Selati has served as a Director since March 1997. Since 1993, he has been associated with Madison Dearborn Capital Partners. Prior to 1993 he was associated with Alex Brown & Sons Incorporated in the consumer/retail investment banking group. Mr. Selati also serves as a Director on the Board of Directors of Peter Piper, Inc., Tuesday Morning Corporation, and National Wholesale Liquidators, Inc. Mr. Wilhite has served as a Director since July 1997. Since 1996 he has been the Chairman of Thurloe Holdings, L.L.C.. Prior to 1996 he was with D'Arcy Masius Benton & Bowles, Inc. (DMB&B) having served as its Vice Chairman from 1995 to 1996, President of DMB&B/North America from 1988 to 1995, and as Chairman and Managing Director of DMB&B/St. Louis from 1985 to 1988. Mr. Wilhite also serves as a Director on the Board of Directors of Pollo Tropical, Inc. All Directors hold office until the next annual meeting of stockholders or until their successors have been elected and qualified. The executive officers of the Company are chosen by the Board and serve at its discretion. All Directors of Carrols Corporation also serve as Directors for Carrols Holdings Corporation.
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ITEM 11. EXECUTIVE COMPENSATION The following tables set forth certain information for the fiscal years ended December 31, 1997, 1996 and 1995 for the Chief Executive Officer and the next four most highly compensated executive officers of the Company who were serving as executive officers at December 31, 1997 and whose annual compensation exceeded $100,000. No other executive officers received total compensation in excess of $100,000 in 1997. Stock option data refers to the stock options of Carrols Holdings Corporation. SUMMARY COMPENSATION TABLE [Enlarge/Download Table] LONG-TERM COMPENSATION Annual Compensation Securities (a) Underlying NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS.(#) Alan Vituli 1997 $392,758 $ - 72,830 Chairman of the Board and 1996 363,160 128,210 - Chief Executive Officer 1995 352,632 245,000 20,000 Daniel T. Accordino 1997 288,386 - 31,479 President, Chief Operating 1996 258,943 91,778 - Officer and Director 1995 250,751 150,322 10,000 Joseph A. Zirkman 1997 120,436 - 1,118 Vice President, General 1996 115,288 40,934 - Counsel and Secretary 1995 105,249 41,995 3,000 Paul R. Flanders 1997 105,925 - 1,500 Vice-President, Finance 1996 - - - and Treasurer 1995 - - - Richard H. Liem 1997 103,160 - 500 Vice President, 1996 94,750 30,288 - Financial Operations 1995 93,092 37,153 3,000 (d) The Company provides bonus compensation to Executive Officers based on an individual's achievement of certain specified objectives and the Company's achievement of specified increases in shareholder value.
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OPTION GRANTS IN LAST FISCAL YEAR [Enlarge/Download Table] (c) Number of of Total Options Securities Granted to Potential Realizable Value at Underlying Employees Exercise Assumed Rates of Stock Options Price per Expiration APPRECIATION FOR OPTION TERM NAME GRANTED IN 1997 SHARE DATE 5% 10% Alan Vituli (a) 72,830 61.1% $101.76 3/26/2007 $5,429,590 $13,035,600 Daniel T. Accordino (a) 31,479 26.4% 101.76 3/26/2007 2,346,808 5,634,322 Joseph A. Zirkman (a) 368 .3% 101.76 3/26/2007 27,435 65,867 (b) 750 .6% 110.00 6/9/2007 51,884 131,484 Paul R. Flanders (b) 1,500 1.3% 110.00 6/9/2007 103,768 262,968 Richard H. Liem (b) 500 .4% 110.00 6/9/2007 34,589 87,656 (e) Stock option grants to Messrs. Vituli, Accordino and Zirkman include 29,480, 2,579 and 368 shares, respectively, granted at the time of the MD Investment under the Vituli Non-Plan Option Agreement, the Accordino Non-Plan Option Agreement and the Zirkman Non-Plan Option Agreement, respectively. At the time of the MD Investment, stock option grants under the 1996 Long-Term Incentive Plan were also made for 43,350 shares to the Vituli Family Trust in exchange for options that it was holding. Mr. Accordino was also granted options for 28,900 shares under the 1996 Long-Term Incentive Plan. These plans, as well as the terms of the aforementioned grants, are described in detail separately in this report. (f) Stock option grants to Messrs. Zirkman, Flanders and Liem include 750, 1,500, and 500 shares, respectively, granted under the 1996 Long-Term Incentive Plan. These options become exercisable at the rate of 25% per year beginning on December 31, 1997. (g) Potential realizable value is based on an assumption that the price of Holdings' common shares appreciate at 5% and 10% annually (compounded) from the date of grant until the end of the ten year option term. These calculations are based on requirements promulgated by the Securities and Exchange Commission and are not intended to forecast possible future appreciation of the stock price. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During the last fiscal year, no executive officer of the Company served as a director of or member of a compensation committee of any entity for which any of the persons serving on the Board of Directors of the Company or on the Compensation Committee of the Board of Directors (the "Compensation Committee") is an executive officer. The Compensation Committee is comprised of Messrs. Chereskin, Mathies and Wilhite. BOARD OF DIRECTORS DIRECTORS COMPENSATION. Directors who are Company employees do not receive any additional compensation for serving as directors. Directors who are not employees of the Company receive a fee of $15,000 per annum. All Directors are reimbursed for all reasonable expenses incurred by them in acting as Directors, including as members of any committee of the Board of Directors. LIABILITY LIMITATION. As permitted under the Delaware General Corporation Law, the Company's Restated Certificate of Incorporation provides that a Director of the Company will not be personally liable to the Company or its stockholders for monetary damages for breach of a fiduciary duty owed to the Company or its stockholders. By its terms and in accordance with the laws of the State of Delaware, however, this provision does not eliminate or limit the liability of a Director of the Company (i) for any breach of the Director's duty of loyalty to the Company or its stockholders, (ii) for an act or omission committed in bad faith or involving intentional misconduct or a knowing violation of law, (iii) for any transaction from which the Director derived an improper personal benefit or (iv) for an improper declaration of dividends or purchase of the Company's securities. INDEMNIFICATION. The Company's Restated Certificate of Incorporation provides that the Company shall indemnify its Directors and officers to the fullest extent permitted by Delaware law. DESCRIPTION OF PLANS EMPLOYEE SAVINGS PLAN. The Company offers its salaried employees the option to participate in the Carrols Corporation Corporate Employee Savings Plan (the "Savings Plan") which is qualified as a profit-sharing plan. In accordance with the Savings Plan, Carrols matches up to $1,060 of an employee's contributions by contributing $0.50 for each dollar contributed by the employee. Employees are fully vested in their own contributions; employees become vested in Carrols' contributions beginning in the fourth year of service, and are fully vested after seven years of service or upon retirement at age 65 with five years' service, death, permanent or total disability. Benefits may be paid out upon the occurrence of any of the foregoing events in a single cash lump sum, in periodic installments over not more than 15 years or in the form of an annuity. The employee's contributions may be withdrawn at any time, subject to restrictions on future contributions. Carrols' matching contributions may be withdrawn under certain conditions of financial necessity or hardship as defined in the Savings Plan. BONUS PLANS. Carrols has cash bonus plans designed to promote and reward excellent performance by providing employees with incentive compensation. Key senior management executives of each operating division can be eligible for bonuses equal to varying percentages of their respective annual salaries determined by the performance of the Company and the division. 1996 LONG-TERM INCENTIVE PLAN. In connection with the MD Closing, Holdings adopted the Carrols Holdings Corporation 1996 Long-Term Incentive Plan (the "1996 Plan") pursuant to which the Company may grant "Incentive Stock Options" (as defined under Section 422 of the Internal Revenue Code), nonqualified stock options, stock appreciation rights, restricted stock, performance shares and performance units and other stock-based awards (the foregoing collectively "Awards") to certain officers and employees of the Company and its subsidiaries. The 1996 Plan replaced a prior long-term incentive plan which was adopted December 26, 1996 (the "Prior Incentive Plan"). The 1996 Plan is designed to advance the interests of Holdings and the Company by providing an additional incentive to attract and retain qualified and competent persons through the encouragement of stock ownership or stock appreciation rights in Holdings. The 1996 Plan permits the Company's Compensation Committee to grant, from time to time, options to purchase an aggregate of up to 106,250 shares of Common Stock. The vesting periods for awards and the expiration dates for exercisability of Awards granted under the 1996 Plan are determined by the Compensation Committee; however, the exercise period for an option granted under the 1996 Plan may not exceed ten years from the date of the grant. The Compensation Committee is authorized to grant options under the 1996 Plan to all eligible employees of the Company and its subsidiaries, including executive officers and directors (other than outside Directors and members of the Compensation Committee). The option exercise price per share of any option granted under the 1996 Plan is determined by the Compensation Committee; however, in no event shall the option price per share of any option intended to qualify as an Incentive Stock Option be less than the fair market value of the Common Stock on the date such option is granted. Payment of such option exercise price shall be made (i) in cash, (ii) by delivering shares of Common Stock already owned by the holder of such options, (iii) by delivering a promissory note payable over a three year period and bearing interest at the rate provided under Section 1274(d) of the Internal Revenue Code of 1986, as amended from time to time or (iv) by a combination of any of the foregoing, in accordance with the terms of the 1996 Plan, the applicable stock option agreement and any applicable guidelines of the Compensation Committee in effect at the time. Pursuant to the 1996 Plan, in the event of a Change of Control (as defined in the 1996 Plan), any or all Stock Options (as defined in the 1996 Plan) and Stock Appreciation Rights (as defined in the 1996 Plan) still outstanding shall, notwithstanding any contrary terms of the Award Agreement (as defined in the 1996 Plan), accelerate and become exercisable in full at least ten days prior to (and shall expire on) the consummation of such Change of Control, on such conditions as the Compensation Committee shall determine, unless the successor corporation assumes the outstanding Stock Options or Stock Appreciation Rights or substitutes substantially equivalent options. Pursuant to the 1996 Plan, in the event that the holder of an option issued pursuant to the 1996 Plan elects to pay the exercise price of such option by delivering a promissory note, such promissory note may be either (i) unsecured and fully recourse against the holder of such option or (ii) nonrecourse but secured by the shares of Common Stock being purchased by such exercise and by other assets having a fair market value equal to not less than forty percent of the exercise price of such option and, in either event, such note shall mature on the fifth anniversary of the date thereof. In addition, pursuant to the 1996 Plan, in the event of a Change of Control (as defined in the 1996 Plan) during the term of employment with Carrols of a holder of an option issued under the 1996 Plan, the portion of any such option that is not vested shall vest and become exercisable in full on the date of such Change of Control. In addition, as soon as practicable but in no event later than thirty days prior to the occurrence of a Change of Control, the Compensation Committee shall notify any holder of an option granted under the 1996 Plan of such Change of Control. Further, upon a Change of Control that qualifies as an Approved Sale (as defined in the 1996 Plan) in which the outstanding Common Stock is converted or exchanged for or becomes a right to receive any cash, property or securities other than Illiquid Consideration (as defined in the 1996 Plan), (i) each option granted under the 1996 Plan shall become exercisable solely for the amount of such cash, property or securities that the holder of such option would have been entitled to had such option been exercised immediately prior to such event (ii) the holder of such option shall be given an opportunity to either (A) exercise such option prior to the consummation of the Approved Sale and participate in such sale as a holder of Common Stock or (B) upon consummation of the Approved Sale, receive in exchange for such option consideration equal to the amount determined by multiplying (1) the same amount of consideration per share of Common Stock received by the holders of Common Stock in connection with the Approved Sale less the exercise price per share of Common Stock of such option to acquire Common Stock by (2) the number of shares of Common Stock represented by such option; and (iii) to the extent such option is not exercised prior to or simultaneous with such Approved Sale, any such option shall be canceled.
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DESCRIPTION OF EMPLOYMENT AGREEMENTS Vituli Employment Agreement. On March 27, 1997 in connection with the MD Closing, the Company entered into a Second Amended and Restated Employment Agreement (the "Vituli Employment Agreement") with Alan Vituli, which amended and restated that certain Amended and Restated Employment Agreement dated April 3, 1996 between the Company and Mr. Vituli. Pursuant to the Vituli Employment Agreement, Mr. Vituli will continue to serve as Chairman of the Board and Chief Executive Officer of the Company. The Vituli Employment Agreement shall be for an initial term of four years, commencing on March 27, 1997 and will be subject to automatic renewals for successive one-year terms unless either the Company or Mr. Vituli elects not to renew by giving written notice to the other at least 90 days before a scheduled expiration date. Pursuant to the Vituli Employment Agreement, Mr. Vituli will receive a base salary of $400,000 for the first year of the term, which amount increases annually by at least $25,000 subject to additional increases that may be authorized by the Compensation Committee. Pursuant to the Vituli Employment Agreement, Mr. Vituli will participate in the Executive Bonus Plan of the Company and any stock option plan of the Company applicable to executive employees. The Vituli Employment Agreement also will require that the Company is responsible for maintaining the premium payments on a split- dollar life insurance policy on the life of Mr. Vituli providing a death benefit of $1.5 million payable to an irrevocable trust designated by Mr. Vituli. ACCORDINO EMPLOYMENT AGREEMENT. On March 27, 1997 in connection with the MD Closing, the Company entered into a Second Amended and Restated Employment Agreement (the "Accordino Employment Agreement") with Daniel T. Accordino, which amended and restated that certain Amended and Restated Employment Agreement dated April 3, 1996 between the Company and Mr. Accordino. Pursuant to the Accordino Employment Agreement, Mr. Accordino will continue to serve as President and Chief Operating Officer of the company. The Accordino Employment Agreement shall be for an initial term of four years, commencing on March 27, 1997 and will be subject to automatic renewal for successive one-year terms unless either the Company or Mr. Accordino elects not to renew by giving written notice to the other at least 90 days before a scheduled expiration date. Pursuant to the Accordino Employment Agreement, Mr. Accordino will receive a base salary of $300,000 for the first year of the term, which amount increases annually by at least $20,000 subject to additional increases that may be authorized by the Compensation Committee. Pursuant to the Accordino Employment Agreement, Mr. Accordino will participate in the Executive Bonus Plan of the Company and any stock option plan of the Company applicable to executive employees. The Accordino Employment Agreement also will require that the Company is responsible for maintaining the premium payments on a split-dollar life insurance policy on the life of Mr. Accordino providing a death benefit of $1 million payable to an irrevocable trust designated by Mr. Accordino. OPTION AGREEMENTS PURSUANT TO HOLDINGS STOCK OPTION PLANS VITULI PLAN OPTION AGREEMENT. On December 30, 1996 (during the Company's 1997 fiscal year), pursuant to the Atlantic Transaction, Holdings granted to Alan Vituli, under the 1996 Plan, an option (the "Vituli Option") to purchase 43,350 shares of Common Stock. The Vituli Option (i) was immediately exercisable with regard to 15,300 shares of Common Stock at an exercise price of $110.00 per share and (ii) was to become exercisable on June 1, 1997 with regard to (a) 15,300 shares of Common Stock at an exercise price of $130.00 per share and (b) 12,750 shares of Common Stock at an exercise price of $140.00 per share. On January 22, 1997, Mr. Vituli contributed these options to the Vituli Family Trust for the benefit of his children. In connection with the MD Closing, Holdings granted an option to purchase 43,350 shares of Common Stock under the 1996 Plan in exchange for the options held by the Vituli Family Trust (the "New Vituli Plan Option"). The Vituli Family Trust agreed to reduce the exercise price to $101.7646 per share. The New Vituli Plan Option shall (i) have a term of ten years from the date of grant, shall (ii) become exercisable on the date of grant with regard to 15,300 shares of Common Stock and (iii) shall become exercisable (a) on December 31, 1997 with regard to 5,610 shares of Common Stock, (b) on December 31, 1998 with regard to 5,610 shares of Common Stock, (c) on December 31, 1999 with regard to 5,610 shares of Common Stock and (d) on December 31, 2000 with regard to 11,220 shares of Common Stock. ACCORDINO PLAN OPTION AGREEMENT. On December 30, 1996 (during the Company's 1997 fiscal year), pursuant to the Atlantic Transaction, Holdings granted to Daniel T. Accordino, under the 1996 Plan, an option (the "Accordino Option") to purchase 28,900 shares of Common Stock. The Accordino Option (i) was immediately exercisable with regard to 10,200 shares of Common Stock at an exercise price of $110.00 per share and (ii) was to becomes exercisable on December 31, 1997 with regard to (a) 10,200 shares of Common Stock at an exercise price of $130.00 per share and (b) 8,500 shares of Common Stock at an exercise price of $140.00 per share. In connection with the MD Closing, the Accordino Option was canceled and Holdings granted to Mr. Accordino, under the 1996 Plan, an option (the "New Accordino Plan Option") to purchase 28,900 shares of Common Stock at an exercise price of $101.7646 per share. The New Accordino Plan Option shall (i) have a term of ten years from the date of grant and shall (ii) become exercisable on the date of grant with regard to 10,200 shares of Common Stock and (iii) become exercisable (a) on December 31, 1997 with regard to 3,740 shares of Common Stock, (b) on December 31, 1998 with regard to 3,740 shares of Common Stock, (c) on December 31, 1999 with regard to 3,740 shares of Common Stock and (d) on December 31, 2000 with regard to 7,480 shares of Common Stock. OTHER OPTION AGREEMENTS VITULI NON-PLAN OPTION AGREEMENT. In connection with the MD Closing, Holdings granted to Mr. Vituli a nonqualified stock option (the "Vituli Non-Plan Option") to purchase 29,480 shares of Common Stock at an exercise price of $101.7646. The Vituli Non-Plan Option shall have a term of ten years from the date of grant and shall become exercisable in five equal parts on the five consecutive anniversaries of the date of grant. The Vituli Non-Plan Option will have substantially the same terms as options issued under the 1996 Plan with respect to (i) the method of payment of the exercise price of the Vituli Non-Plan Option and (ii) the effect of a Change in Control (as defined in the New 1996 Plan) on the Vituli Non-Plan Option. ACCORDINO NON-PLAN OPTION AGREEMENT. In connection with the MD Closing, Holdings granted to Mr. Accordino a nonqualified stock option (the "Accordino Non-Plan Option") to purchase 2,579 shares of Common Stock at an exercise price of $101.7646. The Accordino Non-Plan Option shall have a term of ten years from the date of grant and shall become exercisable in five equal parts on the five consecutive anniversaries of the date of grant. The Accordino Non-Plan Option will have substantially the same terms as the Vituli Non-Plan Option. ZIRKMAN NON-PLAN OPTION AGREEMENT. In connection with the MD Closing, Holdings granted to Joseph A. Zirkman a nonqualified stock option (the "Zirkman Non-Plan Option") to purchase 368 shares of Common Stock at an exercise price of $101.7646. The Zirkman Non-Plan Option shall have a term of ten years from the date of grant and shall become exercisable in five substantially equal parts on the five consecutive anniversaries of the date of grant. The Zirkman Non-Plan Option will have substantially the same terms as the Vituli Non-Plan Option. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT PRINCIPAL STOCKHOLDERS The following tables set forth the number and percentage of shares of voting common stock of the Company and of Holdings beneficially owned, as of March 15, 1998, by (i) all persons known by the Company to be the beneficial owners of more than 5% of the shares of such voting common stock, (ii) each Director of the Company who owns shares of such voting common stock, (iii) each executive officer of the Company included in the Summary Compensation Table above and (iv) all executive officers and Directors of the Company as a group. SHARES BENEFICIALLY OWNED (a) [Enlarge/Download Table] NUMBER PERCENTAGE STOCKHOLDERS OF CARROLS CORPORATION: Carrols Holdings Corporation 968 James Street 10 100% Syracuse, New York 13203 STOCKHOLDERS OF CARROLS HOLDINGS CORPORATION: Atlantic Restaurants, Inc. 566,667 47.8% Madison Dearborn Capital Partners, L.P. 283,333 23.9% Madison Dearborn Capital Partners, L.P. II 283,334 23.9% EXECUTIVE OFFICERS AND DIRECTORS: Alan Vituli (b) 36,633 3.1% Daniel T. Accordino 15,316 1.3% Joseph A. Zirkman 385 - -- Paul R. Flanders 375 - -- Richard H. Liem 125 - -- Directors and executive officers of Carrols as a group 52,959 4.5% (12 persons) (h) As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security. For purposes of this table, a person is deemed as of any date to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date. The number of shares shown in the table includes stock options which are currently exercisable or exercisable within 60 days to purchase: 26,806 shares held by Mr. Vituli; 14,456 shares held by Mr. Accordino; 262 shares held by Mr. Zirkman; 375 shares held by Mr. Flanders; and, 125 shares held by Mr. Liem. (i) Includes 20,910 vested stock options contributed to and held by the Vituli Family Trust. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. None
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8K CARROLS CORPORATION AND SUBSIDIARIES: [Download Table] (a) (a) FINANCIAL STATEMENTS PAGE Opinion of Independent Certified Public Accountants F-1 to F-2 Financial Statements: Consolidated Balance Sheets F-3 to F-4 Consolidated Statements of Operations F-5 Consolidated Statements of Stockholders' Equity (Deficit) F-6 Consolidated Statements of Cash Flows F-7 to F-8 Notes to Consolidated Financial Statements F-9 to F-18 (b) FINANCIAL STATEMENT SCHEDULES SCHEDULE DESCRIPTION PAGE II Valuation and Qualifying Accounts F-19 Schedules other than those listed are omitted for the reason that they are not required, not applicable, or the required information is shown in the financial statements or notes thereto. Separate financial statements of the Company are not filed for the reasons that (1) consolidated statements of the Company and its consolidated subsidiaries are filed and (2) the Company is primarily an operating Company and all subsidiaries included in the consolidated financial statements filed are wholly-owned, and indebtedness of all subsidiaries included in the consolidated financial statements to any person other than the Company does not exceed 5% of the total assets as shown by the Consolidated Balance Sheet at December 31, 1997.
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(c) EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K [Enlarge/Download Table] EXHIBIT NUMBER INCORPORATED BY DESCRIPTION REFERENCE 2.1 Purchase and Sale Agreement dated Exhibit 2.1 to the Company's 1994 Annual February 10, 1994 between Carrols Corporation, as Purchase, Report on Form 10-K and KIN Restaurant, Inc., as Seller 2.2 Purchase and Sale Agreement dated April 18, 1994 among Exhibit 2.2 to the Company's 1994 Annual Carrols Corporation, as Purchaser, and Riva Development Report on Form 10-K Corporation and John Riva, as Seller 2.3 Purchase and Sale Agreement dated May 31, 1994 among Exhibit 2.3 to the Company's 1994 Annual Carrols Corporation, as Purchaser, and Michael P. Jones and Report on Form 10-K Donald M. Cepiel, Sr., and the corporations listed therein 2.4 Securities Purchase Agreement dated as of March 6, 1996, by Exhibit 2.1 to the Company's current report on and among Atlantic Restaurants, Inc., Carrols Holdings Form 8-K filed March 21, 1996 Corporation, Carrols Corporation and certain Selling Shareholders 2.5 Deferred Securities Purchase Agreement dated as of March 6, Exhibit 2.2 to the Company's current report on 1996 by and among Atlantic Restaurants, Inc., Alan Vituli Form 8-K filed March 21, 1996 and Pryor, Cashman, Sherman & Flynn 3.1 Restated Certificate of Incorporation Exhibit 3.(3)(a) to the Company's 1987 Annual Report on Form 10-K 3.2 Certificate of Amendment of the Restated Certificate of Exhibit 3.2 to the Company's 1996 Annual Incorporation Report on Form 10-K 3.3 Restated By-laws Exhibit 3.(3)(b) to the Company's 1987 Annual Report on Form 10-K 4.1 Indenture dated as of August 17, 1993 among Holdings, the Exhibit 4.1 to Amendment No. 3 to the Company and Marine Midland Bank, N.A. Company's Registration Statement on Form S-1 (Number 3365100) filed August 10, 1993
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10.1 First Amended and Restated Loan Security and Preferred Exhibit 10.1 to the Company's 1987 Annual Stock Purchase Agreement by and among Carrols Merger Report on Form 10-K Corporation, Carrols Holdings Corporation and Heller Financial, Inc. dated as of December 22, 1986
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[Enlarge/Download Table] EXHIBIT NUMBER INCORPORATED BY DESCRIPTION REFERENCE 10.2 Second Amended and Restated Loan and Security Agreement by Exhibit 10.15 to the Company's 1992 Annual and among Carrols Corporation, Carrols Holdings Corporation Report on Form 10-K and Heller Financial, Inc. dated as of September 15, 1992 10.3 Senior Subordinated Credit Agreement dated as of September Exhibit 10.17 to the Company's 1992 Annual 15, 1992 between Carrols Corporation, Carrols Holdings Report on Form 10-K Corporation and World Subordinated Debt Partners, L.P. 10.4 Third Amended and Restated Loan and Security Agreement by, Exhibit 10.19 to Amendment No. 2 to the and among Carrols Corporation, Carrols Holdings Corporation Company's Form S-1 Registration Statement and Heller Financial, Inc. dated as of August 9, 1993 filed August 4, 1993 10.5 First Amendment to Third Amended and Restated Loan and The Company's 1993 Annual Report on Form 10-K Security Agreement by and among Carrols Corporation, Carrols Holdings Corporation and Heller Financial, Inc. dated as of October 27, 1993 10.6 Second Amendment to Third Amended and Restated Loan and The Company's 1993 Annual Report on Form 10-K Security Agreement by and among Carrols Corporation, Carrols Holdings Corporation and Heller Financial, Inc. dated as of March 11, 1994 10.7 Third Amendment to Third Amended and Restated Loan and Exhibit 10.9 to the Company's 1994 Annual Security Agreement among Carrols Holdings Corporation, Report on Form 10-K Carrols Corporation and Heller Financial, Inc. dated as of May 2, 1994 10.8 Fourth Amendment to Third Amended and Restated Loan and Exhibit 10.10 to the Company's 1994 Annual Security Agreement among Carrols Holdings Corporation, Report on Form 10-K Carrols Corporation and Heller Financial, Inc. dated as of December 20, 1994 10.9 Supply Agreement between ProSource Services Corporation and Exhibit 10.11 to the Company's 1994 Annual Carrols Corporation dated April 1, 1994 Report on Form 10-K 10.10 Fifth Amendment to Third Amended and Restated Loan and Exhibit 10.10 to the Company's 1996 Annual Security Agreement among Carrols Holdings Corporation, Report on Form 10-K Carrols Corporation and Heller Financing, Inc. dated as of February 22, 1995
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[Enlarge/Download Table] EXHIBIT NUMBER INCORPORATED BY DESCRIPTION REFERENCE 10.11 Sixth Amendment to Third Amended and Restated Loan and Exhibit 10.11 to the Company's 1996 Annual Security Agreement among Carrols Holdings Corporation, Report on Form 10-K Carrols Corporation and Heller Financing, Inc. dated as of February 14, 1996 10.12 Stock Purchase Agreement dated as of February 25, 1997 by Exhibit 10.12 to the Company's 1996 Annual and among Madison Dearborn Capital Partners, L.P., Madison Report on Dearborn Capital Partners II, L.P., Atlantic Restaurants, Form 10-K Inc. and Carrols Holdings Corporation 10.13 1994 Regional Directors Bonus Plan Exhibit 10.19 to the Company's 1994 Annual Report on Form 10-K 10.14 Carrols Corporation Corporate Employee's Savings Plan dated Exhibit 10.21 to the Company's 1994 Annual December 31, 1994 Report on Form 10-K 10.15 Commitment Letter from Texas Commerce Bank National Exhibit 10.15 to the Company's 1996 Annual Association and Chase Securities Inc. and accepted and Report on Form 10-K agreed to by Carrols Corporation as of January 8, 1997 10.16 Escrow Agreement dated as of March 6, 1996 by and among Exhibit 2.3 to the Company's Current Report on Atlantic Restaurants, Inc., Bahrain International Bank Form 8-K filed March 21, 1996 (E.C.), Carrols Holdings Corporation, Carrols Corporation, certain selling shareholders and Baer Marks & Upham L.L.P. 10.17 Seventh Amendment to Third Amended and Restated Loan and Exhibit 10.27 to the Company's current report Security Agreement by and among Heller Financial, Inc., on Form 8-K filed April 10, 1996 Carrols Holdings Corporation and Carrols Corporation dated as of April 3, 1996 10.18 Amended and Restated Employment Agreement dated as of Exhibit 10.23 to the Company's Current Report April 3, 1996 by and between Carrols Corporation and Alan on Form 8-K filed on April 10, 1996 Vituli 10.19 Amended and Restated Employment Agreement dated as of Exhibit 10.24 to the Company's Current Report April 3, 1996 by and between Carrols Corporation and Daniel on Form 8-K filed on April 10, 1996 T. Accordino 10.20 Carrols Corporation 1996 Long-Term Incentive Plan Exhibit 10.20 to the Company's 1996 Annual Report on Form 10-K 10.21 Stock Option Agreement dated as of December 30, 1996 by and Exhibit 10.21 to the Company's 1996 Annual between Carrols Corporation and Alan Vituli Report on Form 10-K
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EXHIBIT NUMBER INCORPORATED BY DESCRIPTION REFERENCE
10.22 Stock Option Agreement dated as of December 30, 1996 by and Exhibit 10.22 to the Company's 1996 Annual between Carrols Corporation and Daniel T. Accordino Report on Form 10-K 10.23 Form of Stockholders Agreement by and among Carrols Exhibit 10.23 to the Company's 1996 Annual Holdings Corporation, Madison Dearborn Capital Partners, Report on Form 10-K L.P., Madison Dearborn Capital Partners II, L.P., Atlantic Restaurants, Inc., Alan Vituli, Daniel T. Accordino and Joseph A. Zirkman 10.24 Form of Registration Agreement by and among Carrols Exhibit 10.24 to the Company's 1996 Annual Holdings Corporation, Atlantic Restaurants, Inc., Madison Report on Form 10-K Dearborn Capital Partners, L.P., Madison Dearborn Capital Partners II, L.P., Alan Vituli, Daniel T. Accordino and Joseph A. Zirkman 10.25 Form of Second Amended and Restated Employment Agreement by Exhibit 10.25 to the Company's 1996 Annual and between Carrols Corporation and Alan Vituli Report on Form 10-K 10.26 Form of Second Amended and Restated Employment Agreement by Exhibit 10.26 to the Company's 1996 Annual and between Carrols Corporation and Daniel T. Accordino Report on Form 10-K 10.27 Form of Carrols Holdings Corporation 1996 Long-Term Exhibit 10.27 to the Company's 1996 Annual Incentive Plan Report on Form 10-K 10.28 Form of Stock Option Agreement by and between Carrols Exhibit 10.28 to the Company's 1996 Annual Holdings Corporation and Alan Vituli Report on Form 10-K 10.29 Form of Stock Option Agreement by and between Carrols Exhibit 10.29 to the Company's 1996 Annual Holdings Corporation and Daniel T. Accordino Report on Form 10-K 10.30 Form of Unvested Stock Option Agreement by and between Exhibit 10.30 to the Company's 1996 Annual Carrols Holdings Corporation and Alan Vituli Report on Form 10-K 10.31 Form of Unvested Stock Option Agreement by and between Exhibit 10.31 to the Company's 1996 Annual Carrols Holdings Corporation and Daniel T. Accordino Report on Form 10-K 10.32 Form of Unvested Stock Option Agreement by and between Exhibit 10.32 to the Company's 1996 Annual Carrols Holdings Corporation and Joseph A. Zirkman Report on Form 10-K
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EXHIBIT NUMBER INCORPORATED BY DESCRIPTION REFERENCE
10.33 First Amendment to the Stock Purchase Agreement Exhibit 10.38 to the Company's current report on Form 8- dated March 27, 1997 by and among Carrols K filed March 27, 1997 Holdings Corporation, Atlantic Restaurants, Inc., Madison Dearborn Capital Partners, L.P. and Madison Dearborn Capital Partners II, L.P. 10.34 Purchase and Sale Agreement dated as of January Exhibit 10.39 to the Company's current report on Form 8- 15, 1997 by and between Carrols Corporation, as K filed March 27, 1997 Purchaser, Omega Services, Inc. as Seller and Mr. Harold W. Hobgood as Omega's Agent. 10.35 Purchase and Sale Agreement dated as of January Exhibit 10.40 to the Company's current report on Form 8- 15, 1997 by and between Carrols Corporation, as K filed March 27, 1997 Purchaser, Omega Services, Inc. as Seller and Mr. Harold W. Hobgood as Omega's Agent. 10.36 Purchase Agreement dated as of July 7, 1997 among Exhibit 10.41 to the Company's current report on Form 8- Carrols Corporation, as Purchaser, and the K filed August 20, 1997 individuals and trusts listed on Exhibit A attached thereto, as Sellers, the individuals and entities listed on Exhibit B attached thereto, as Affiliated Real Property Owners, and Richard D. Fors, Jr. And Charles J. Mund, as the Seller's representatives 16.1 Letter re: change in certifying accountant Exhibit 16.1 to the Company's 1996 Annual Report on Form 10-K 16.2 Letter re: change in certifying accountant Exhibit 16.1 to the Company's current report on Form 8-K filed August 15, 1997 22.1 Subsidiaries of the Registrant: Carrols J.G. Corp., Carrols Realty Holdings Corp., Carrols Realty I Corp., Carrols Realty II Corp., CDC Theater Properties, Inc., H.N.S. Equipment & Leasing Corp., Quanta Advertising Corp., Confectionery Square Corp., Jo-Ann Enterprises, Inc. 27 Financial Data Schedule
REPORTS ON FORM 8-K - No current reports on Form 8-K were filed during the quarter ended December 28, 1997.
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SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the 25th day of March, 1998. CARROLS CORPORATION BY: /S/ ALAN VITULI Alan Vituli, Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. SIGNATURE TITLE DATE [Download Table] /s/ Alan Vituli Director, Chairman and Chief November 9, 1998 (Alan Vituli) Executive Officer /s/ Daniel T. Accordino Director, President and Chief November 9, 1998 (Daniel T. Accordino) Operating Officer /s/ Benjamin D. Chereskin Director November 9, 1998 (Benjamin D. Chereskin) /s/ James M. Conlon Director November 9, 1998 (James M. Conlon) /s/ David J. Mathies, Jr. Director November 9, 1998 (David J. Mathies, Jr.) /s/ C. Ronald Petty Director November 9, 1998 (C. Ronald Petty) /s/ Robin P. Selati Director November 9, 1998 (Robin P. Selati) /s/ Clayton E. Wilhite Director November 9, 1998 (Clayton E. Wilhite) /s/ Paul R. Flanders Vice President - Finance November 9, 1998 (Paul R. Flanders) and Treasurer /s/ Timothy J. LaLonde Vice President - Controller November 9, 1998 (Timothy J. LaLonde)
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Board of Directors of Carrols Corporation We have audited the consolidated balance sheet of Carrols Corporation (a wholly owned subsidiary of Carrols Holdings Corporation) and Subsidiaries as of December 31, 1997 and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for the years ended December 31, 1997 and December 31, 1995. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Carrols Corporation and Subsidiaries as of December 31, 1997, and the consolidated results of their operations and their cash flows for the years ended December 31, 1997 and December 31, 1995, in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The accompanying schedule for the years ended December 31, 1997 and 1995 as listed in Item 14 of the Form 10-K is presented for purposes of additional analysis and is not a required part of the basic consolidated financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole. /s/ PricewaterhouseCoopers L.L.P. Syracuse, New York February 27, 1998
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Carrols Corporation: We have audited the accompanying consolidated balance sheet of Carrols Corporation (a wholly-owned subsidiary of Carrols Holdings Corporation) and subsidiaries as of December 29, 1996, and the related consolidated statements of operations, stockholder's deficit, and cash flows for the year then ended. These consolidated financial statements and the schedule referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Carrols Corporation and subsidiaries as of December 29, 1996, and the results of their operations and their cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule for the year ended December 29, 1996 listed in the index at Item 14 is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. /s/Arthur Andersen LLP Rochester, New York, March 7, 1997
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CARROLS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1997 AND 1996 ___________ [Download Table] ASSETS 1997 1996 Current assets: Cash and cash equivalents $ 2,252,000 $ 1,314,000 Trade and other receivables, net of reserves of $130,000 and $310,000 at 1997 and 1996, respectively 748,000 793,000 Inventories (Note 2) 3,355,000 2,163,000 Prepaid real estate taxes 939,000 725,000 Prepaid expenses and other current assets 1,388,000 932,000 Refundable income taxes (Note 5) 2,141,000 - Deferred income taxes (Note 5) 2,605,000 3,264,000 Total current assets 13,428,000 9,191,000 Property and equipment, at cost (Notes 3 and 4): Land 7,280,000 9,066,000 Buildings and improvements 12,487,000 16,175,000 Leasehold improvements 43,146,000 38,816,000 Equipment 61,331,000 46,834,000 Capital leases 14,548,000 14,548,000 138,792,000 125,439,000 Less accumulated depreciation and amortization (67,908,000) (63,356,000) Net property and equipment 70,884,000 62,083,000 Franchise rights, at cost less accumulated amortization of $25,047,000 and $21,787,000 at 1997 and 1996, respectively 108,938,000 46,203,000 Intangible assets, at cost less accumulated amortization of $8,900,000 and $8,326,000 at 1997 and 1996, respectively 7,864,000 8,640,000 Other assets 7,778,000 5,834,000 Deferred income taxes (Note 5) 6,436,000 6,637,000 $215,328,000 $138,588,000 The accompanying notes are an integral part of these financial statements.
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CARROLS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) DECEMBER 31, 1997 AND 1996 ___________ [Download Table] LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1996 Current liabilities: Accounts payable $ 11,950,000 $ 9,319,000 Accrued interest 4,770,000 4,741,000 Accrued payroll, related taxes and benefits 6,299,000 4,620,000 Accrued income taxes - 1,058,000 Other liabilities 5,104,000 3,875,000 Current portion of long-term debt (Note 4) 3,137,000 8,000 Current portion of capital lease obligations (Note 3) 441,000 574,000 Total current liabilities 31,701,000 24,195,000 Long-term debt, net of current portion (Note 4) 154,649,000 118,180,000 Capital lease obligations, net of current portion (Note 3) 2,060,000 2,503,000 Deferred income - sale/leaseback of real estate (Note 3) 4,555,000 2,154,000 Accrued postretirement benefits (Note 9) 1,627,000 1,522,000 Other liabilities 3,289,000 1,696,000 Total liabilities 197,881,000 150,250,000 Commitments and contingencies Stockholders' equity (deficit) (Note 6): Common stock, par value $1; authorized 1,000 shares, issued and outstanding - 10 shares 10 10 Additional paid-in capital 28,362,990 1,411,990 Accumulated deficit (10,916,000) (10,574,000) Less: note receivable - redemption of warrants -___ (2,500,000) Total stockholders' equity (deficit) 17,447,000 (11,662,000) $215,328,000 $138,588,000 The accompanying notes are an integral part of these financial statements.
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CARROLS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 ___________ [Download Table] 1997 1996 1995 Restaurant sales $295,436,000 $240,809,000 $226,257,000 Costs and expenses: Cost of sales 85,542,000 68,031,000 63,629,000 Restaurant wages and related Expenses 89,447,000 70,894,000 65,932,000 Advertising expense 13,122,000 10,798,000 9,764,000 Other restaurant operating expenses 61,691,000 48,683,000 45,635,000 Administrative expenses 13,121,000 10,387,000 10,434,000 Depreciation and amortization 15,102,000 11,015,000 11,263,000 Costs associated with change of control - 509,000 - Total operating expenses 278,025,000 220,317,000 206,657,000 Operating income 17,411,000 20,492,000 19,600,000 Interest income (Note 5) (983,000) - - Interest expense 15,581,000 14,209,000 14,500,000 Income before income taxes 2,813,000 6,283,000 5,100,000 Provision (benefit) for income taxes (Note 5) 655,000 3,100,000 (9,826,000) Net Income $ 2,158,000 $ 3,183,000 $ 14,926,000 The accompanying notes are an integral part of these financial statements.
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CARROLS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 ___________ [Enlarge/Download Table] TOTAL ADDITIONAL STOCKHOLDERS' COMMON Paid-in ACCUMULATED Notes EQUITY STOCK CAPITAL DEFICIT RECEIVABLE (DEFICIT) Balance at December 31, 1994 $ 10 $ 1,474,990 $(28,683,000) $ - $(27,208,000) Net income 14,926,000 14,926,000 Dividends declared (636,000) (636,000) Exercise of stock options 2,000 2,000 Balance at December 31, 1995 10 840,990 (13,757,000) - (12,916,000) Net income 3,183,000 3,183,000 Dividends declared (1,000,000) (1,000,000) Exercise of stock options 12,000 12,000 Tax benefit from sale of stock options due to change of control 1,559,000 1,559,000 Loan to purchase warrants (2,500,000) (2,500,000) Balance at December 31, 1996 10 1,411,990 (10,574,000) (2,500,000) (11,662,000) Net income 2,158,000 2,158,000 Dividends declared (4,338,000) (4,338,000) Capital contribution 30,382,000 30,382,000 Tax benefit from sale of stock options due to change of control 907,000 907,000 Redemption of warrants (2,500,000) 2,500,000 Balance at December 31, 1997 $ 10 $28,362,990 $(10,916,000) $ - $ 17,447,000 The accompanying notes are an integral part of these financial statements.
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CARROLS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 ___________ [Enlarge/Download Table] 1997 1996 1995 Cash Flows From Operating Activities: Net income $ 2,158,000 $ 3,183,000 $ 14,926,000 Adjustments to reconcile net income To net cash provided by operating activities: (Gain) loss on disposal of property equipment (344,000) (314,000) 156,000 Depreciation and amortization 15,102,000 11,015,000 11,263,000 Deferred income taxes 860,000 160,000 (10,061,000) Changes in operating assets and liabilities: Refundable income taxes (2,141,000) - - Trade and other receivables 45,000 (105,000) (156,000) Inventories (588,000) 129,000 (38,000) Prepaid real estate tax expenses and other current assets (731,000) (174,000) (45,000) Other assets (149,000) (611,000) (80,000) Accounts payable 2,631,000 410,000 1,363,000 Accrued payroll, related tax and benefits 1,286,000 (256,000) 297,000 Accrued income taxes (1,058,000) 983,000 48,000 Other liabilities - current 1,229,000 266,000 (893,000) Accrued interest 29,000 (68,000) (90,000) Other liabilities - long-term 1,593,000 (231,000) 84,000 Other 18,000 (65,000) (92,000) Net cash provided from operating activities 19,940,000 14,322,000 16,682,000 Cash Flows For Investing Activities: Capital expenditures: New restaurant development (9,732,000) 5,280,000) (2,767,000) Remodels (3,807,000) (6,656,000) (2,524,000) Other capital expenditures (4,671,000) (3,319,000) (2,731,000) Acquisition of restaurants (78,485,000) (7,945,000) (516,000) Notes and mortgages issued - (749,000) (2,503,000) Payments received on notes and mortgages 88,000 39,000 32,000 Disposal of property, equipment And franchise rights 1,224,000 2,342,000 17,000 Other investments - 1,330,000 (1,356,000) Net cash used for investing activities (95,383,000) (20,238,000) (12,348,000) The accompanying notes are an integral part of these financial statements.
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CARROLS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS, (Continued) YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 ___________ [Enlarge/Download Table] 1997 1996 1995 Cash Flows From Financing Activities: Proceeds from long-term debt, net $ 62,614,000 $ 2,997,000 $ 4,376,000 Principal payments and retirements of long-term obligations (26,184,000) (2,047,000) (9,184,000) Proceeds from sale-leaseback transactions 13,000,000 4,246,000 861,000 Dividends paid (4,338,000) (1,000,000) (636,000) Exercise of employee stock options and related tax benefits 907,000 1,571,000 2,000 Capital contribution 30,382,000 - - Net cash provided from (used for) financing activities 76,381,000 5,767,000 (4,581,000) Net increase (decrease) in cash and cash equivalents 938,000 (149,000) (247,000) Cash and cash equivalents, beginning of year 1,314,000 1,463,000 1,710,000 Cash and cash equivalents, end of year $ 2,252,000 $ 1,314,000 $ 1,463,000 Supplemental disclosures: Interest paid on debt $ 15,552,000 $14,277,000 $ 14,590,000 Income taxes paid $ 1,456,000 $ 393,000 $ 153,000 The accompanying notes are an integral part of these financial statements.
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CARROLS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 ________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF CONSOLIDATION - The consolidated financial statements include the accounts of Carrols Corporation and its subsidiaries (the "Company"). All significant intercompany transactions have been eliminated in consolidation. The Company is a wholly-owned subsidiary of Carrols Holdings Corporation ("Holdings"). At December 31, 1997 the Company operated, as franchisee, 335 fast food restaurants under the trade name "Burger King" in seven Northeastern, four Midwestern and two Southeastern states. According to publicly available information the Burger King brand is the second largest franchised restaurant system in the world. The Company is the largest independent Burger King franchisee in the United States. Cash and Cash Equivalents - The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. INVENTORIES - Inventories are stated at the lower of cost (first-in, first-out) or market. PROPERTY AND EQUIPMENT - Property and equipment are recorded at cost. Depreciation and amortization is provided using the straight-line method over the following estimated useful lives: [Enlarge/Download Table] Buildings and improvements 5 to 20 years Leasehold improvements Remaining life of lease including renewal options or life of asset whichever is shorter Equipment 3 to 10 years Capital leases Remaining life of lease Depreciation expense for the years ended December 31, 1997, 1996 and 1995 was $9,718,000, $7,300,000 and $7,594,000, respectively. FRANCHISE RIGHTS - Fees for initial franchises and renewals paid to Burger King Corporation are amortized using the straight-line method over the term of the agreement, generally twenty years. Acquisition costs allocated to franchise rights are amortized using the straight-line method, principally over the remaining lives of the acquired leases including renewal options, but not in excess of 40 years. INTANGIBLE ASSETS - Intangible assets consist primarily of beneficial leases which are amortized using the straight-line method over the lives of the leases including renewal options, but not in excess of 40 years. LONG-LIVED ASSETS - The Company assesses the recoverability of property and equipment, franchise rights and intangible assets by determining whether the amortization of these assets, over their respective remaining lives, can be recovered through undiscounted future operating cash flows. Impairment is reviewed whenever events or changes in circumstances indicate the carrying amounts of these assets may not be fully recoverable. DEFERRED FINANCING COSTS - Financing costs incurred in obtaining long-term debt are capitalized and amortized over the life of the related debt on an effective interest basis for costs associated with the Company's unsecured senior notes and on a straight-line basis for costs associated with the Company's advance loan facility.
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INCOME TAXES - The Company and its subsidiaries were included in the consolidated federal income tax return of Holdings through the date of the change of control at April 3, 1996. The Company and its subsidiaries have filed separate federal income tax returns for the period April 4, 1996 to December 31, 1996 and the year ended December 31, 1997. ADVERTISING COSTS - All advertising costs are expensed as incurred. USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. FAIR VALUE OF FINANCIAL INSTRUMENTS - The following methods were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that fair value: Current Assets and Liabilities - The carrying value of cash and cash equivalents and accrued liabilities approximates fair value because of the short maturity of those instruments. Senior Notes - The fair value of senior notes is based on quoted market prices. The fair value at December 31, 1997 is approximately $113,557,000. Revolving and Advance Loan Facilities - Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate fair value. The recorded amount, as of December 31, 1997, approximates fair value. Stock-Based Compensation - On January 1, 1996, the Company adopted Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation," (SFAS 123) which permitted entities to recognize as an expense over the vesting period the fair value of all stock-based awards on the date of grant. Alternatively, SFAS 123 also allowed entities to continue to apply the provisions of APB 25 and provide pro forma net income disclosures for employee stock option grants as if the fair-value-based method defined in SFAS 123 has been applied. The Company has elected to continue to apply the provisions of APB 25 and provide the pro forma disclosure provisions of SFAS 123. Fiscal Year - The Company uses a 52-53 week fiscal year ending on the Sunday closest to December 31. The financial statements included herein are as of December 28, 1997 (52 weeks), December 29, 1996 (52 weeks), and December 31, 1995 (52 weeks). RECLASSIFICATIONS - Certain amounts for prior years have been reclassified to conform to the current year presentation. 2. INVENTORIES Inventories at December 31, consisted of: [Download Table] 1997 1996 Raw materials (food and paper products) $ 2,111,000 $ 1,386,000 Supplies 1,244,000 777,000 $ 3,355,000 $ 2,163,000
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3. LEASES The Company utilizes land and buildings in its operations under various lease agreements. These leases are generally for initial terms of twenty years and, in most cases, contain renewal options for two to four additional five year periods. The rent payable under such leases is generally a percentage of sales with a provision for minimum rent. In addition, most leases require payment of property taxes, insurance and utilities. Deferred gains have been recorded as a result of sale/leaseback transactions and are being amortized over the lives of the leases. These leases are operating leases, with a twenty year primary term with four five-year renewal options and provide for additional rent based on a percentage of sales in excess of predetermined levels. The net deferred gain is $4,555,000 and $2,154,000 at December 31, 1997 and 1996, respectively. Accumulated amortization pertaining to capital leases for the years ended December 31, 1997 and 1996 was $9,951,000 and $9,151,000, respectively. Minimum rent commitments under noncancelable leases at December 31, 1997 were as follows: [Download Table] CAPITAL OPERATING Years Ending: 1998 $ 758,000 $ 18,807,000 1999 541,000 17,884,000 2000 480,000 17,470,000 2001 469,000 16,889,000 2002 429,000 16,069,000 2003 and thereafter 1,329,000 123,819,000 Total minimum lease payments 4,006,000 $210,938,000 Less amount representing interest 1,505,000 Total obligations under capital leases 2,501,000 Less current portion 441,000 Long term obligations under capital leases $ 2,060,000 Total rent expense on operating leases, including percentage rent on both operating and capital leases, for the past three years was as follows: [Download Table] 1997 1996 1995 Minimum rent on real property $ 15,303,000 $ 11,590,000 $ 11,108,000 Additional rent based on a percentage of sales 3,099,000 2,700,000 2,548,000 Equipment rent 162,000 167,000 164,000 $ 18,564,000 $ 14,457,000 $ 13,820,000
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4. LONG-TERM DEBT Long-term debt at December 31 consisted of: [Download Table] 1997 1996 Collateralized: Revolving loan facility $ 2,500,000 $ 4,669,000 Acquisition loan - 5,000,000 Advance term loan facility 46,786,000 - Other notes payable with interest rates to 10% 863,000 857,000 Unsecured 11.5% senior notes 107,637,000 107,662,000 157,786,000 118,188,000 Less current portion 3,137,000 8,000 $154,649,000 $118,180,000 The Company issued $110 million of unsecured senior notes in August 1993. The senior notes bear interest at a rate of 11.5%, payable semi-annually on each February 15 and August 15, and are due August 15, 2003. The notes are redeemable at the option of the Company in whole or in part on or after August 15, 1998 at a price of 104.31% of the principal amount if redeemed before August 15, 1999 and 102.88% of the principal amount if redeemed before August 15, 2000, with other specified redemption prices thereafter. Provisions of the revolving line of credit facility place limitations on the redemption or repurchase of the notes so long as the facility remains in effect. On March 27, 1997, the Company entered into a loan agreement (the "Loan Agreement") among the Company, Texas Commerce Bank National Association, as Agent, and other lenders (collectively the "Lenders") who are parties thereto. The Loan Agreement provides for: (i) $127,000,000 Advance Term Loan Facility under which the Company may borrow, through December 31, 1999, up to 75% of the purchase costs incurred in connection with the acquisition of restaurants and; (ii) a $25,000,000 Revolving Loan Facility which replaced the Company's previous revolving credit facility. The Revolving Loan Facility is available to finance restaurant acquisitions and new restaurant development by the Company, and for other working capital and general corporate purposes. At December 31, 1997, $21,525,000 was available for use under the Revolving Loan Facility after reserving $975,000 for a letter of credit guaranteed by the facility. The Loan Agreement provides for interest rate options of: (i) the greater of the prime rate (or the Federal Funds Rate plus .50%) plus a variable margin between 0% and 1% (1% at December 31, 1997); or (ii) the London Interbank offering rate plus a variable margin between 1.5% and 2.5% (2.5% of December 31, 1997), based upon debt to cash flow ratios. Commitment fees on the unused balances of the Advance Term Loan Facility and the Revolving Loan Facility are payable quarterly at the annual rates of 0.25% and 0.375%, respectively. The Revolving Loan Facility has a maturity date of December 31, 2001 while the Advance Term Loan Facility requires quarterly principal repayments at an annual rate of 6% beginning with the end of the second quarter after each advance loan and increasing 2% per year through the sixth year, with the remainder repayable on June 30, 2003. The $5 million acquisition loan was collateralized by twenty-two restaurants acquired during 1994. This loan was paid in full in 1997 and refinanced under the Company's Advance Term Loan Facility. Substantially all assets of the Company are or will be pledged to the lender as collateral under the loans made pursuant to the Loan Agreement.
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Restrictive covenants of the senior notes and the revolving loan facility include limitations with respect to the issuance of additional debt and redeemable preferred stock; the sale of assets; dividend payments and capital stock redemption; transactions with affiliates; investments; consolidations, mergers and transfers of assets and minimum interest and fixed charge coverage ratios. At December 31, 1997, principal payments required on all long-term debt are as follows: [Download Table] 1998 $ 3,137,000 1999 4,274,000 2000 5,153,000 2001 8,486,000 2002 6,438,000 2003 and thereafter 129,798,000 $157,286,000 5. INCOME TAXES The income tax provision (benefit) was comprised of the following at December 31: [Download Table] 1997 1996 1995 Current: Federal $ 887,000 $ 981,000 $ 35,000 State 628,000 400,000 200,000 1,515,000 1,381,000 235,000 Deferred: Federal (672,000) 1,199,000 (8,552,000) State (188,000) 520,000 (1,509,000) (860,000) 1,719,000 10,061,000) $ 655,000 $3,100,000 $ (9,826,000) The components of deferred income tax assets and liabilities at December 31, are as follows: [Download Table] 1997 1996 Deferred tax assets: Accounts receivable and other reserves $ 408,000 $ 503,000 Accrued vacation benefits 508,000 427,000 Other accruals 168,000 - Deferred gain on sale of real estate 1,710,000 853,000 Postretirement benefits 650,000 602,000 Capital leases 464,000 463,000 Property and equipment depreciation 549,000 671,000 Alternative minimum tax credit carryforward 21,000 - Net operating loss carryforwards 10,459,000 12,348,000 14,937,000 15,867,000 Deferred tax liabilities: Amortization of franchise rights 5,896,000 5,966,000 Net deferred income tax assets $ 9,041,000 $ 9,901,000
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The Company has net operating loss carryforwards for income tax purposes of approximately $27 million. The net operating loss carryforwards expire in varying amounts beginning in 2003 through 2010. Due to a change in ownership the Company is limited, for Federal tax purposes, to a $4,354,000 utilization of net operating losses annually. Realization of the deferred income tax assets relating to these net operating losses is dependent on generating sufficient taxable income prior to the expiration of the loss carryforwards. Based upon results of operations, management believes it is more likely than not that the Company will generate sufficient future taxable income to fully realize the benefit of the net operating loss carryforwards and existing temporary differences, although there can be no assurance of this. Accordingly, during 1995, the previously provided valuation allowance was eliminated and the net deferred tax assets were recognized as a deferred income tax benefit. A reconciliation of the statutory federal income tax rate to the effective tax rates for the years ended December 31, is as follows: [Download Table] 1997 1996 Statutory federal income tax rate $ 957,000 34.0% $2,136,000 34.0% State income taxes, net of federal benefit 266,000 9.5% 607,000 9.7% Nondeductible expenses 197,000 7.0% 197,000 3.1% Tax appeals settlement (806,000) (28.7)% - - Miscellaneous 41,000 1.4 % 160,000 2.5% $655,000 23.2% $3,100,000 49.3% Included in refundable income taxes at December 31, 1997 is $983,000 of interest income associated with a Federal tax appeals claim settlement. 6. STOCKHOLDERS' EQUITY (DEFICIT) THE COMPANY The Company has 1,000 shares of common stock authorized of which 10 shares are issued and outstanding. Dividends on the Company's common stock are restricted to amounts permitted by various loan agreements. HOLDINGS The sole activity of Holdings is the ownership of 100% of the stock of Carrols Corporation. In February 1997, a 1 for 3.701 reverse stock split was effected to reduce the outstanding shares of common stock of Holdings to 850,000 shares. As a result of a recapitalization in February 1997, the capital structure of Holdings was as follows at December 31, 1997: [Download Table] Class A, preferred stock 10% cumulative redeemable, par value $.01, authorized, issued and outstanding 3,633 shares at liquidation preference and redemption price $3,633,000 Voting common stock, par value $.01, authorized 3,000,000 shares issued and outstanding 1,144,144 shares 11,000
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The Class A preferred stock is subject to two remaining equal mandatory redemptions, scheduled for December 23, 1998 and 1999. In addition, subject to the redemption restrictions of various loan agreements, all preferred stock may be redeemed at the option of Holdings, at a price of $1,000 per share, plus accrued dividends. In the event that the scheduled redemptions are not made timely, the annual dividend rate on the amount of Class A Preferred Stock not redeemed is automatically increased to 14%. Holders of the Preferred Stock are entitled to cumulative dividends payable quarterly at the rate of 10% per annum. In the event that Holdings fails to pay four consecutive quarterly dividends on the Class A preferred stock, the subsequent dividend rate increases to 11.5%; if eight consecutive quarterly dividends are missed, the rate increases to 13% per annum until such dividends are paid. Warrants outstanding at December 31, 1996 to purchase 131,886 shares of Holdings Common Stock at exercise prices of $3.59 to $3.70 per share were owned by an independent third party. To facilitate the sale and purchase of the warrants, Holdings loaned $2,500,000 to the purchaser of the warrants which loan was secured by a collateral pledge of the shares of the purchaser and of the warrants. The receivable was reclassified to increase stockholders' deficit as of December 31, 1996. In 1997, Holdings exercised its option to purchase the warrants at an aggregate price of $2,510,000 from the third party in exchange for payment on the related loan. CHANGE OF CONTROL TRANSACTIONS On April 3, 1996, Holdings, Carrols Corporation and certain selling shareholders of Holdings sold approximately 97 percent of the issued common stock and common stock equivalents (the Class B Convertible Preferred stock, warrants to buy common stock and options to buy common stock) exclusive of the warrants referred to above to Atlantic Restaurants, Inc. ("Atlantic"). This change in control resulted in the Company incurring a one-time charge of $509,000 in fiscal 1996. On March 27, 1997, Holdings and Atlantic, its then sole stockholder, entered into an agreement whereby they agreed to sell 283,334 shares of common stock of Holdings to Madison Dearborn Capital Partners ("Madison Dearborn"), an independent third party, resulting in approximately $30.4 million of new equity for the Company. Atlantic also sold 283,333 of its shares of Holdings to Madison Dearborn resulting in both Atlantic and Madison Dearborn having an equal interest in the Company. Both transactions constituted a "change of control" under the Indenture governing the Senior Notes Due 2003 ("Notes"). Accordingly, each holder of the Notes had the right to require the Company to repurchase all or any part of such holder's Notes at a repurchase price in cash equal to 101% of the principal amount of the Notes being repurchased plus accrued and unpaid interest in both 1996 and in 1997. Such redemptions totaled $25,000 in 1997 and $838,000 in 1996. STOCK OPTIONS Holdings adopted an Employee Stock Option and Award Plan on December 14, 1993 ("The 1993 Plan"). Effective April 1, 1994, Holdings also adopted a Stock Option Plan for non-employee directors ("Directors Plan"). The Plans allowed for the granting of non-qualified stock options, stock appreciation rights and incentive stock options to directors, officers and certain other Company employees. The Company was authorized to grant options for up to 229,700 shares, 27,000 shares for non-employee directors and 202,700 shares for employees. Options were generally exercisable over 5 years with 25,600 options exerciseable as of December 31, 1995. As of December 31, 1995, non- employee directors were granted options totaling 4,900 shares. Under the Directors Plan, no options were exercised or canceled during 1995. During 1996, 57,000 options (36,600 at $14.80 and 20,400 at $22.65) were canceled by the sale of such options in conjunction with the sale to Atlantic and the plans were canceled. The remaining 32,426 options were subject to a deferred purchase agreement whereby the sale and cancellation occurred in January, 1997. A summary of all option activity in the 1993 Plan and the Directors Plan for the years ended December 31, 1997, 1996 and 1995 is as follows: [Download Table] Options at Options at $14.80 $22.65 Balance at December 31, 1994 69,441 - Granted - 26,777 Exercised (162) - Canceled (3,350) (621) Balance at December 31, 1995 65,929 26,156 Exercised (810) - Canceled (38,098) (20,751) Balance at December 31, 1996 27,021 5,405 Canceled (27,021) (5,405) Balance at December 31, 1997 - - Holdings adopted a stock option plan in 1996 entitled the 1996 Long- Term Incentive Plan ("1996 Plan") and authorized a total of 106,250 shares to be granted at prices ranging from $101.77 to $140.00 per share. Options under this plan generally vest over a four year period There were no outstanding options in fiscal 1996 under this plan. In 1997, options were granted at prices ranging from $101.77 to $110.00 per share. A summary of all option activity in the 1996 Plan for the year ended December 31, 1997 was as follows: [Download Table] OPTIONS AT OPTIONS AT $101.77 $110.00 Balance at December 31, 1996 - - Granted 72,250 14,460 Canceled -___ (570) Balance at December 31, 1997 72,250 13,890 Exercisable at December 31, 1997 34,850 -___ In addition, in conjunction with the 1997 sale of Holdings common stock to Madison Dearborn, additional options not part of the 1996 Plan for 32,427 shares at a price of $101.77 were granted with vesting over a five year period. None of these options were exercisable at December 31, 1997. Had compensation cost been determined based upon the fair value of the stock options at grant date consistent with the method of SFAS 123, the Company's pro-forma net income for the year ended December 31, 1997 would have been $1,527,000 as compared with $2,158,000, as reported. The fair value of each option grant was estimated using the minimum value option pricing model with the following weighted-average assumptions for the year ended December 31, 1997: [Download Table] Risk-free interest rate 6.53% Annual dividend yield 0% Expected life 5 years
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7. LITIGATION The Company is a party to various legal proceedings arising from the normal course of business. Management believes adverse decisions relating to litigation and contingencies in the aggregate would not materially effect the Company's results of operations or financial condition. 8. EMPLOYEE SAVINGS PLAN The Company offers a savings plan for salaried employees. Under the plan, participating employees may contribute up to 10% of their salary annually. The Company's contributions, which begin to vest after three years and fully vest after seven years of service, are equal to 50% of the employee's contributions to a maximum Company contribution of $530 annually. The employees have various investment options available under a trust established by the plan. The plan expense was $208,000, $164,000 and $125,000 for the years ended December 31, 1997, 1996 and 1995, respectively. 9. POSTRETIREMENT BENEFITS While the Company reserves the right to change its policy, the Company provides postretirement medical and life insurance benefits covering substantially all salaried employees. The following is the plan status and accumulated postretirement benefit obligation (APBO) at December 31: [Download Table] 1997 1996 Accumulated benefit obligation: Retirees $ 519,000 $ 518,000 Fully eligible active participants 28,000 26,000 Other active plan participants not fully eligible 814,000 697,000 Total APBO 1,361,000 1,241,000 Unrecognized prior service cost 286,000 315,000 Unrecognized net actuarial losses (20,000) (34,000) Accrued postretirement benefit obligation $ 1,627,000 $ 1,522,000 Net periodic postretirement benefit cost for 1997, 1996 and 1995 included the following components: [Download Table] 1997 1996 1995 Service cost - benefits earned during the year $ 69,000 $ 64,000 $ 47,000 Interest cost on accumulated benefit obligation 85,000 77,000 76,000 Net amortization of actuarial gains and losses and prior service costs (25,000) (25,000) (29,000) $129,000 $116,000 $ 94,000 A 6.50% annual rate of increase in the per capita costs of covered health care benefits was assumed for 1997, gradually decreasing to 5.5% by the year 2001. Increasing the assumed health care cost trend rates by one percentage point in each future year would increase the accumulated postretirement benefit obligation as of December 31, 1997 by $137,000 and increase the sum of the service cost and interest cost components by $26,000 in 1997.
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For 1997, 1996 and 1995, a discount rate of 7% was used to determine the accumulated postretirement benefit obligation. Actual benefit costs paid on behalf of retirees in 1997, 1996 and 1995 was $24,000 in each year. 10. ACQUISITIONS On March 28, 1997, the Company purchased certain assets and franchise rights of twenty-three Burger King restaurants in North and South Carolina for a cash price of approximately $21 million. On August 20, 1997, the Company purchased certain assets and franchise rights of sixty-three Burger King restaurants, primarily in Western New York State, Indiana and Kentucky for a cash price of approximately $52 million. The following unaudited proforma results of operations assume these acquisitions occurred as of the beginning of the respective periods: (Unaudited) YEAR ENDED DECEMBER 31, [Download Table] 1997 1996 Revenues $341,889,000 $329,927,000 Operating Income $ 21,129,000 $ 28,652,000 Net income $ 2,829,000 $ 5,603,000 The unaudited results of operations are not necessarily indicative of the actual operating results that would have occurred had the acquisitions been consummated on January 1 of each fiscal year, or of future operating results of the combined companies. During the year ended December 31, 1997, the Company acquired a total of 93 restaurants. Assets acquired and liabilities assumed in these transactions were as follows: [Download Table] Inventory $ 604,000 Land 1,025,000 Buildings and improvements 1,532,000 Equipment 10,221,000 Franchise rights 65,496,000 Accrued payroll, related taxes and benefits (393,000) $78,485,000
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CARROLS CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 ___________ [Enlarge/Download Table] COL. A COL. B COL. C COL. D COL E Additions Balance at Charged to Balance at Beginning Costs and End DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS OF PERIOD Year ended December 31, 1997: Reserve for doubtful trade accounts receivable 310,000 - (180,000)(b) 130,000 Other reserves (a) 753,000 133,000 - 886,000 Year ended December 31, 1996: Reserve for doubtful trade accounts receivable 419,000 16,000 (125,000)(b) 310,000 Other reserves (a) 788,000 (35,000)(b) 753,000 Year ended December 31, 1995: Reserve for doubtful trade accounts receivable 424,000 12,000 (17,000)(b) 419,000 Other reserves (a) 542,000 388,000 (142,000)(b) 788,000 (a) Included principally in other assets (b) Represents write-offs of accounts.

Dates Referenced Herein   and   Documents Incorporated by Reference

Referenced-On Page
This ‘10-K/A’ Filing    Date First  Last      Other Filings
8/15/0332
6/30/033210-Q
12/31/013210-K405
12/31/001010-K,  NT 10-K
8/15/0032
12/31/991032
12/23/9935
8/15/9932
3/31/99210-Q
12/31/981015-12B
12/23/9835
Filed on:11/10/98
11/9/9820
8/15/9832
3/15/98110
2/27/9821
12/31/9723810-K
For Period End:12/28/97130
9/30/97210-Q
8/20/97237
8/12/976
7/7/97219
6/1/9710
5/12/9725
3/28/97237
3/27/9723510-K,  8-K,  8-K/A
3/7/9722
2/25/97215
2/20/972
1/22/9710
1/15/972
12/31/96238
12/30/961017
12/29/9623010-K,  10-K/A
12/26/969
4/10/961510-K/A,  8-K
4/4/9630
4/3/962358-K
3/21/9612158-K
3/6/962158-K
1/1/9630
12/31/9523810-K,  10-K/A
2/22/9514
12/31/94152610-K
5/31/9412
4/18/9412
4/1/941435
2/10/9412
12/14/9335
8/17/9312
8/10/9312
8/9/9314
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