Boston Chicken Announces Agreement to Acquire Preferred Equity in Area Developers; Reports Fourth Quarter Results.GOLDEN, Colo.--(BUSINESS WIRE)--Feb. 18, 1998--Boston Chicken, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BOST BOST Boston National Historic Park (US National Park Service) BOST Built Off-Chip Self Test ) today announced that it has taken a significant step toward its objective of becoming a company-owned system. A special committee of the company's board of directors has reached an agreement in principle to acquire BC Equity Funding Equity funding An investment consisting of a life insurance policy and a mutual fund. The insurance policy is paid by the collateral value of fund shares, giving the investor the advantages of insurance protection with the growth potential of a mutual fund. , L.L.C. (BCEF BCEF Bay Catholic Educational Foundation (Bay County, Michigan) ) and Market Partners L.L.C. (Market Partners), funds that hold preferred equity interests in 11 of the company's 14 area developers. The agreement was reached with a committee elected to negotiate on behalf of the holders of the funds. The agreement in principle calls for Boston Chicken, Inc. to acquire BCEF and Market Partners in exchange for consideration of $126.8 million of PIK PIK See: Payment-in-kind bond PIK See payment-in-kind security (PIK). Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , 3,500,000 shares of common stock and $10 million in cash. The 10% dividend on the Preferred Stock is payable in additional shares of Preferred Stock for a period of three years and payable in cash thereafter. The Preferred Stock is optionally redeemable by the company at any time, in cash, at redemption prices which start at 50% and increase over time. The Preferred Stock is mandatorily redeemable in 2005 at a price of 110%. The agreement is subject to approval by Boston Chicken's board and final documentation. Because the negotiating committee is unable to bind the holders of the funds, the agreement will also require the approval of holders owning at least two-thirds of the units of each fund. Mark Stephens, vice-chairman and chief financial officer of Boston Chicken, said, "We are appreciative of the hard work of the committees that resulted in this agreement. As a company-owned system the business will be easier to manage, easier nd store cash flow margins for the Boston Market system improved over the third quarter of 1997. Saad Nadhir, co-chairman and chief executive officer, said, "The Boston Market system averaged net WPSA WPSA World's Poultry Science Association WPSA Wildlife Preservation Society of Australia WPSA Workers Party of South Africa WPSA Weekly Per Store Average sales of $18,904 in the fourth quanded concept store test in Charlotte, Nor th Carolina. We believe elements of the test could make a contribution to the existing store base as early as the end of 1998, and becoming a company-owned system facilitates our ability to move that initiative forward." The company reported net systemwide store revenue of $264.0 million for the fourth quarter of 1997 compared with $285.0 million foon for the fourth quarter of 1997 and $462.4 million for fiscal 1997. As previously disclosed, as a result a $128 million provision for potential loan losses and $123 million in asset write-downs and reserves associated with the company's strategic redirection and the moratcharges are not expected to have an impact on availability of the company's $85 million credit facility. proposed in the acquisition of BCEF and Market Partners, and evaluations regarding the cost and availabil as a result of becoming a company-owned system, Boston Chicken would expect to report positive consolidat98. If the agreement is not approved, it would adversely impact the company's ability to achieve its systemwide operational and financial objectives for 1998. T of 1933 and applicable state securities laws.here were 1166 Boston Market stores in 38 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , of which 307 were company-owned stores. Boston Chicken also owns a majority interest in lopers, franchisees, and licensees, and Bos ton Mhe company's f ilings with the Securities and Exchange Commission. All forward-looking statements relating to the proposed transition to a company-owned structure are subject to, among other things, various board, special committee and reg_______ Dec. 29, Dec. 28, Dec. 29, Dec. 28, 1996 17,627 12,979 65,048 83,434 ______ ______ ______ _______ Total revenue 78,290 118,182 264,508 462,368 Cost and Expenses: Cost of products sold 10,645 33,357 31,160 94,736 losses - 128,000 - 128,000 Losses of Boston Chicken, Inc.'s area developers - 49,352 - 49,352 ______ ______ ______ ______ Total cost and expenses 64,881 447,286 173,179 674,046 (179) 5 137 1,603 ______ ______ ______ ______ Total other income (expense) 18,898 rnings) Loss of Subsidiaries (2,216 ====== ====== ====== ====== Basic Earnings (Loss) Per Share $ 0.28 $ (3.83) $ 1.07 $ (3.32) =s) Per Share 64,110 71,383 Oct 5, Dec 28, 1997 1997 __________ _________ 5,753 16,132 Prepaid expenses and Total current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. 162,126 _______ _______ _______ Current Liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. : Accounts payable $ 8,419 $ 33,205 Accrued expenses 42,595 85,207 Other current lated lat·ed adj. Belated. [From late.] Debt - Boston Chicken, Inc. 417,020 417,020 Convertible Subordinated Debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". - Einstein/Noah Bagel Corp. 125,000 125,000 Liquid Yield Option Notes Liquid yield option note (LYON) Zero-coupon, callable, putable, convertible bond developed by Merrill Lynch & Co. 193,925 197,442 Senior Term Loan - Einstein/Noah Bagel Corp. - 30,000 Deferred Income Taxes 39,237 2,353 Other Noncurrent Liabilities 4,930 44,753 Minority Interests 189,016 253,630 Commitments and Contingencies Stockholders' Equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. : Preferred Stock--$.01 par value; authorized 20,000,000 shares; no shares issued and outstanding - - Common Stock--$.01 par value; au 157,237 (116,305) _______ _______ 1,074,646 802,675 Contact) |
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