| Friendly Ice Cream Corporation | |||
| Ticker: | FRND | 1855 Boston Road | |
| Exchange: | NASDAQ-National Market | Wilbraham, MA 01095 | |
| Industry: | Retail (SIC Code 5812) | (413) 543-2400 | |
| # of Employees: | 28000 | ||
| Type of Shares: | Common Shares | Filing Date: | 8/29/97 | |
| U.S. Shares: | 5,000,000 | Offer Date: | 11/13/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $19.00 - $21.00 | |
| Primary Shares: | 5,000,000 | Offer Price: | $18.00 | |
| Secondary Shares: | 0 | Gross Spread: | $1.26 | |
| Offering Amount: | $100,000,000 | Selling: | $0.70 | |
| Expenses: | - | Reallowance: | $0.10 | |
| Shares Out After: | - |
| Manager | Tier | Phone |
| Montgomery Securities | Lead Manager | (415) 627-2100 |
| Issuer's Law Firm: | Mayer, Brown & Platt |
| Bank's Law Firm: | Simpson, Thacher & Bartlett |
| Auditor: | Arthur Andersen |
| Registrar/Transfer Agent: | Bank of New York |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/29/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $650.81 | $322.83 | $308.78 | Assets: | $358.37 |
| Net Income: | -$7.77 | -$2.40 | -$8.03 | Curr Assets: | $51.70 |
| EPS: | -$1.04 | -$0.32 | -$1.07 | Liabilities: | $531.53 |
| Prior EPS: | $9.63 | $14.90 | Curr Liabilities: | $70.83 | |
| Cash Flow/Oper: | $26.16 | -$3.10 | -$2.90 | Equity: | -$173.16 |
| Cash Flow/Fin: | -$11.00 | -$8.25 | -$11.93 | Cash: | $7.47 |
| Cash Flow/Inv: | -$20.31 | -$8.25 | Working Cap: | -$19.13 | |
| Business Description |
| The company is the leading full service restaurant operator and has a leading position in premium frozen dessert sales in the Northeast. The company owns and operates 666 and franchises 34 full-service restaurants. The company manufactures a complete line of packaged frozen desserts distributed through more than 5,000 supermarkets and other retail locations in 15 states. The company's offers its customers a unique dining experience by serving a variety of high-quality, reasonably-priced breakfast, lunch and dinner items, as well as its signature frozen desserts, in a fun and casual neighborhood setting. For the twelve-month period ended June 29, 1997, the company's generated $664.9 million in total revenues and $71.0 million in EBITDA (as defined herein). During the same period, management estimates that over $225 million of total revenues were from the sale of approximately 20 million gallons of frozen desserts. The company's restaurants target families with children and adults who desire a reasonably-priced meal in a full-service setting. The Company's menu offers a broad selection of freshly-prepared foods which appeal to customers throughout all day-parts. |
| Competition |
| The restaurant business is highly competitive and is affected by changes in the public's eating habits and preferences, population trends and traffic patterns, as well as by local and national economic conditions affecting consumer spending habits, many of which are beyond the Company's control. Key competitive factors in the industry are the quality and value of the food products offered, quality and speed of service, attractiveness of facilities, advertising, name brand awareness and image and restaurant location. Each of the Company's restaurants competes directly or indirectly with locally-owned restaurants as well as restaurants with national or regional images, and to a limited extent, restaurants operated by its franchisees. A number of the Company's significant competitors are larger or more diversified and have substantially greater resources than the Company. The Company's retail operations compete with national and regional manufacturers of frozen desserts, many of which have greater financial resources and more established channels of distribution than the Company. Key competitive factors in the retail food business include brand awareness, access to retail locations, price and quality. |
| Business Plan |
| The company is implementing a franchising strategy to further develop the company's brand and grow both revenue and cash flow without the substantial capital required to build new restaurants. This strategy seeks to (I) expand its restaurant presence in under-pentrated markets, (ii) accelerate effeciencies and (iv) preempt the company's competition from acquiring certain prim real estate sites. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to refinance indebtedness and thereby lengthen the average maturates of the company's outstanding indebtedness, reduce interest expense and increase liquidity and operating and financial flexibility. |
| Officer Name | Title | Age |
| Donald N. Smith | Chairman, Chef Executive Officer and President | 56 |
| Larry W. Browne | Executive Vice President, Corporate Finance, General Counsel and Secretary | 51 |
| Gerald E. Sinsigalli | President, Food Service Division | 58 |
| Joseph A. O'Shaughnessy | Senior Executive Vice President | 61 |
| Paul J. McDonald | Senior Executive Vice Presiident, Chief Administrative Officer and Assistant Secretary | 53 |
| Dennis J. Roberts | Senior Vice President, Restaurant Operations | 48 |
| George G. Roller | Vice President, Finance, Chief Financial Officer and Treasurer | 49 |
| Henry V. Pettis III | Vice President, Franchising and Operations Services | 52 |
| Garrett J. Ulrich | Vice President, Human Resources | 46 |
| Scott D. Colwell | Vice President, Marketing | 39 |