UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 16, 2002
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Commission File Number: 000-17962
Applebee's International, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 43-1461763
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4551 W. 107th Street, Suite 100, Overland Park, Kansas 66207
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(Address of principal executive offices and zip code)
(913) 967-4000
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(Registrant's telephone number, including area code)
None
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On July 16, 2002, Applebee's International, Inc. (the "Company") issued a
press release entitled " Applebee's International Enters Into Agreement to
Acquire 21 Franchise Restaurants." The press release contained the following
information.
FOR IMMEDIATE RELEASE
Contact: Carol DiRaimo,
Director of Investor Relations
(913) 967-4109
APPLEBEE'S INTERNATIONAL ENTERS INTO AGREEMENT
TO ACQUIRE 21 FRANCHISE RESTAURANTS
OVERLAND PARK, KAN., July 16--Applebee's International, Inc. (Nasdaq:APPB)
announced today that it has reached an agreement with Apple Capitol Group, LLC,
an existing Applebee's franchisee, to acquire the assets of 21 Applebee's
restaurants located in the Washington, D.C. area for $32.8 million in cash at
closing, subject to adjustment. The agreement also provides for additional
payments if the restaurants achieve cash flow in excess of historical levels.
The 21 restaurants are located in Maryland, Virginia, Delaware, Pennsylvania and
West Virginia.
Lloyd L. Hill, chairman and chief executive officer, said, "As we announced in
May, part of our growth strategy is to use our strong balance sheet and
substantial free cash flow for franchise acquisitions. We believe the territory
in which the Apple Capitol restaurants are located will ultimately support a
total of approximately 40 Applebee's restaurants. These restaurants are
contiguous to the Virginia market that we acquired in 1998. Year-to date
comparable sales for these restaurants are positive and average weekly sales are
in excess of $41,000. We look forward to welcoming this team of associates to
Applebee's International. The addition of these restaurants will complement and
provide increased depth to our company operations and will bring our company
ownership to approximately 24% of the system total."
As a condition of this agreement, Apple Capitol has filed a voluntary Chapter 11
petition in the United States Bankruptcy Court for the Southern District of
Florida. The acquisition of the restaurants is anticipated to close in the
fourth quarter of 2002, subject to normal bankruptcy court bidding procedures,
obtaining operating licenses and other third-party consents. Depending upon the
ultimate closing date, the company expects the addition of these restaurants to
have a neutral impact on fiscal year 2002 earnings and to be accretive to fiscal
year 2003 earnings.
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July 16, 2002
Page 2
Apple Capitol acquired these restaurants from Avado Brands, Inc. (formerly Apple
South, Inc.) in May 1999 in the final transaction relating to that franchisee's
exit from the Applebee's system. Applebee's International has been working in
coordination with Apple Capitol and its lender for several months to facilitate
the sale of these restaurants through a voluntary bankruptcy process. The
agreement commits Apple Capitol to operate the restaurants in accordance with
historical operating standards until they are sold. Upon completion of the sale,
Apple Capitol will cease to be an Applebee's franchisee.
Applebee's International, Inc., headquartered in Overland Park, Kan., develops,
franchises and operates restaurants under the Applebee's Neighborhood Grill and
Bar brand, the largest casual dining concept in the world. There are currently
1,427 Applebee's restaurants operating system-wide in 49 states and seven
international countries. Additional information on Applebee's International can
be found at the company's website (www.applebees.com).
Certain statements contained in this release are forward looking and based on
current expectations. There are several risks and uncertainties that could cause
actual results to differ materially from those described, including but not
limited to the ability of the company and its franchisees to open and operate
additional restaurants profitably, the continued growth of its franchisees and
its ability to attract and retain qualified franchisees, the impact of intense
competition in the casual dining segment of the restaurant industry and its
ability to control restaurant operating costs which are impacted by market
changes, minimum wage and other employment laws, food costs and inflation. For
additional discussion of the principal factors that could cause actual results
to be materially different, the reader is referred to the company's current
report on Form 8-K filed with the Securities and Exchange Commission on July 16,
2002. The company disclaims any obligation to update these forward-looking
statements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
APPLEBEE'S INTERNATIONAL, INC.
(Registrant)
Date: July 16, 2002 By: /s/ Steven K. Lumpkin
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Steven K. Lumpkin
Executive Vice President and
Chief Financial Officer
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