UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 15, 2008
Fog Cutter Capital Group Inc.
(Exact Name of Registrant as Specified in Charter)
Maryland |
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0-23911 |
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52-2081138 |
(State or Other Jurisdiction |
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(Commission |
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(IRS Employer |
of Incorporation) |
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File Number) |
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Identification No.) |
1410 SW Jefferson Street, Portland, OR 97201
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (503) 721-6500
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 203.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On May 15, 2008, Fog Cutter Capital Group Inc. (OTCBB: FCCG) issued an earnings release announcing the results of operations and financial condition for the three months ended March 31, 2008.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibit is filed as part of this report:
99 Press Release Dated May 15, 2008 — “Fog Cutter Capital Group Inc. Reports First Quarter 2008 Operating Results”
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Fog Cutter Capital Group Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 16, 2008
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FOG CUTTER CAPITAL GROUP INC. |
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By: |
/s/ R. Scott Stevenson |
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R. Scott Stevenson |
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Senior Vice President and Chief |
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Financial Officer |
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Exhibit Index
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Exhibit Number |
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Description |
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99 |
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Press Release Dated May 15, 2008 — “Fog Cutter Capital Group Inc. Reports First Quarter 2008 Operating Results” |
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EXHIBIT 99
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FOR: |
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FOG CUTTER CAPITAL GROUP INC. |
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CONTACT: |
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Fog Cutter Capital Group Inc. |
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(503) 721-6500 |
Andrew A. Wiederhorn, Chairman and CEO |
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(503) 721-6500 |
R. Scott Stevenson, Chief Financial Officer |
PORTLAND, Ore. — May 15, 2008 — Fog Cutter Capital Group Inc. (OTCBB: FCCG.OB) reported a net loss of $0.4 million or $0.05 per share for the three months ended March 31, 2008. These results compare to a net loss of $3.7 million or $0.46 per share for the first quarter of 2007.
The Company’s Fatburger business segment continues to operate in a growth stage, which is anticipated will yield long term value. Thus far during 2008, Fatburger has opened five new franchise locations and acquired ownership of two existing franchise restaurants.
The Company is continuing its strategy to dispose of its non-core businesses in order to focus on the Fatburger expansion. On February 15, 2008, the Company sold its interest in Fog Cap Retail Investors LLC, a wholly owned subsidiary that owned a portfolio of leased real estate consisting of 72 freestanding retail locations throughout the United States. The Company recorded a $4.2 million gain on the sale.
Fatburger Operations
Fatburger, “The Last Great Hamburger Stand”®, opened its first restaurant in Los Angeles in 1952. At March 31, 2008, there were 96 Fatburger restaurants located in 15 states, Canada, and the Company’s first store in China. Since that date, one more franchise restaurant has opened, bringing the total number of restaurants to 97. Fatburger also caters local events with its “Fatmobile” facility. The Company expects to open an additional 10 to 20 franchise and company owned restaurants during the rest of 2008. Fatburger specializes in fresh, made to order hamburgers and other specialty sandwiches. French fries, homemade onion rings, hand-scooped ice cream shakes and soft drinks round out the menu.
In September 2007, the Company opened its first Fatburger restaurant in China, located in the Venetian® Macao-Resort-Hotel. Fatburger plans to open additional locations in China, including locations in Hong Kong, Macao, Shenzhen, Beijing and Shanghai. Fatburger also recently signed its first development agreement to open locations this year in Dubai and elsewhere in the United Arab Emirates.
Fatburger
plans to open additional restaurants throughout the United States and
internationally through a combination of company owned restaurants and franchised
locations. Franchisees currently own and
operate 55 of the Fatburger locations and the company has agreements for 245
new franchise locations.
For the three months ended March 31, 2008, company-owned
restaurant sales increased 4.0% to $7.9 million compared to the same period in
2007.
Other Operations
In addition to restaurant operations through Fatburger, the Company currently conducts operations in three other business segments: (1) manufacturing activities conducted through its DAC International subsidiary; (2) real estate operations; and (3) software development and sales conducted through its Centrisoft Corporation subsidiary.
Manufacturing Operations
The Company’s manufacturing activities are conducted through DAC International, a supplier of computer controlled lathes and milling machinery for the production of eyeglass, contact, and intraocular lenses.
Real Estate Operations
As of March 31, 2008 the Company owned two apartment buildings through equity participating loans to special purpose Spanish corporations. The properties consist of 33 residential and commercial units located in Barcelona, Spain. The two buildings were acquired subject to below market leases and the Company has relocated most of these tenants and is now selling the properties for redevelopment. These properties are classified as Held for Sale.
Software Development and Sales
The Company’s Centrisoft subsidiary develops and sells software that controls and enhances the productivity of enterprise networks and provides first level security against unauthorized applications and users. Centrisoft is marketing its software to potential customers primarily through re-seller relationships.
Forward Looking Statements
Certain statements contained herein and certain statements contained in future filings by the Company with the SEC may not be based on historical facts and are “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. Forward-Looking Statements are based on various assumptions and events (some of which are beyond the Company’s control) and may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Actual results could differ materially from those set forth in Forward-Looking Statements due to a variety of factors, including, but not limited to the Risk Factors identified herein and the following:
· economic factors, particularly in the market areas in which the Company operates;
· the financial and securities markets and the availability of and costs associated with sources of liquidity;
· competitive products and pricing;
· the real estate market, including the residential real estate market in Barcelona, Spain;
· the ability to sell assets to maintain liquidity;
· fiscal and monetary policies of the U.S. Government;
· changes in prevailing interest rates;
· changes in currency exchange rates;
· acquisitions and the integration of acquired businesses;
· performance of retail/consumer markets, including consumer preferences and concerns about diet;
· effective expansion of the Company’s restaurants in new and existing markets;
· profitability and success of franchisee restaurants;
· availability of quality real estate locations for restaurant expansion;
· the market for Centrisoft’s software products;
· credit risk management; and
· asset/liability management
Except as may be required by law, the Company does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions which may be made to any Forward-Looking Statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. The following financial results should be read in conjunction with the Form 10-Q filed with the Securities and Exchange Commission on May 15, 2008.
FOG CUTTER CAPITAL GROUP INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except share data)
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March 31, 2008 |
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December 31, |
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Assets |
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Current Assets: |
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Cash and cash equivalents |
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$ |
954 |
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$ |
1,131 |
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Accounts receivable |
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1,217 |
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1,491 |
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Notes receivable, current portion |
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578 |
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566 |
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Loans to senior executives |
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— |
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1,147 |
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Inventories |
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3,105 |
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2,505 |
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Investments in real estate, held for sale, net |
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9,005 |
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19,658 |
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Current assets held for sale |
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— |
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66 |
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Other current assets |
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398 |
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536 |
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Total current assets |
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15,257 |
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27,100 |
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Notes receivable |
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42 |
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46 |
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Property, plant and equipment, net |
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9,979 |
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10,203 |
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Investment in equity investee |
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200 |
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— |
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Intangible assets, net |
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4,917 |
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4,986 |
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Goodwill |
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9,526 |
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9,526 |
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Other assets held for sale |
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— |
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21 |
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Other assets |
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1,804 |
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1,887 |
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Total assets |
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$ |
41,725 |
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$ |
53,769 |
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Liabilities and Stockholders’ Equity |
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Liabilities: |
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Accounts payable and accrued liabilities |
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$ |
16,348 |
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$ |
13,260 |
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Current liabilities associated with assets held for sale |
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— |
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1,232 |
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Obligations under capital leases on real estate held for sale |
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— |
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9,994 |
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Borrowings and notes payable, current portion |
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9,009 |
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12,914 |
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Obligations under capital leases, current portion |
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140 |
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141 |
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Total current liabilities |
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25,497 |
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37,541 |
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Borrowings and notes payable |
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6,235 |
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6,355 |
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Obligations under capital leases |
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1,917 |
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1,929 |
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Deferred income |
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5,186 |
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5,247 |
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Total liabilities |
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38,835 |
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51,072 |
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Commitments and contingencies |
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Minority interests in consolidated subsidiaries |
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1,001 |
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701 |
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Stockholders’ Equity: |
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Preferred stock, $.0001 par value; 25,000,000 shares authorized; no shares issued and outstanding |
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— |
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— |
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Common stock, $.0001 par value; 200,000,000 shares authorized; 11,757,073 shares issued as of March 31, 2008 and December 31, 2007; 7,954,928 shares outstanding as of March 31, 2008 and December 31, 2007 |
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171,286 |
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170,956 |
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Accumulated deficit |
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(157,386 |
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(156,949 |
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Treasury stock, 3,802,145 common shares as of March 31, 2008 and December 31, 2007, at cost |
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(12,011 |
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(12,011 |
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Total stockholders’ equity |
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1,889 |
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1,996 |
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Total liabilities and stockholders’ equity |
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$ |
41,725 |
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$ |
53,769 |
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FOG CUTTER CAPITAL GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(dollars in thousands, except share data)
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Quarter Ended |
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March 31, |
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2008 |
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2007 |
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Revenue: |
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Restaurant and manufacturing sales |
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$ |
10,268 |
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$ |
9,919 |
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Restaurant franchise and royalty fees |
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645 |
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539 |
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Total revenue |
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10,913 |
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10,458 |
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Operating costs and expenses: |
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Restaurant and manufacturing cost of sales |
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6,014 |
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5,786 |
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Engineering and development |
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361 |
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386 |
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Depreciation and amortization |
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480 |
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476 |
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Total operating costs and expenses |
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6,855 |
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6,648 |
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General and administrative expenses: |
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Compensation and employee benefits |
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4,102 |
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5,034 |
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Professional fees |
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885 |
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654 |
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Other |
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3,986 |
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4,006 |
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Total general and administrative expenses |
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8,973 |
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9,694 |
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Non-operating income (expense): |
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Interest income |
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37 |
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43 |
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Interest expense |
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(733 |
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(639 |
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Other income, net |
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447 |
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81 |
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Total non-operating income (expense) |
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(249 |
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(515 |
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Loss before provision for income taxes, minority interests, and equity in income of equity investees |
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(5,164 |
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(6,399 |
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Minority interest in earnings |
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83 |
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35 |
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Equity in income of equity investee |
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200 |
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— |
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Income tax benefit |
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52 |
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— |
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Loss from continuing operations |
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(4,829 |
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(6,364 |
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Income from discontinued operations (including gain on sale of $4,217 in 2008 and $2,492 in 2007) |
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4,392 |
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2,713 |
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Net loss |
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$ |
(437 |
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$ |
(3,651 |
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Basic loss per share from continuing operations |
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$ |
(0.60 |
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$ |
(0.80 |
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Basic earnings per share from discontinued operations |
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$ |
0.55 |
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$ |
0.34 |
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Basic loss per share |
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$ |
(0.05 |
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$ |
(0.46 |
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Basic weighted average shares outstanding |
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7,954,928 |
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7,957,428 |
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Dividends declared per share |
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$ |
— |
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$ |
— |
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