-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O+PXZ/iUG33OhFBYxyVB017fPLA57XU7ByaBtAIBZEliuMeQQtmHBY2bTQY27S+Q h1dILzPwMbGlBUOXOctrYg== 0001108890-04-000117.txt : 20040302 0001108890-04-000117.hdr.sgml : 20040302 20040302140727 ACCESSION NUMBER: 0001108890-04-000117 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040301 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPECTRUM ORGANIC PRODUCTS INC CENTRAL INDEX KEY: 0001034992 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FRUITS, VEG & PRESERVES, JAMS & JELLIES [2033] IRS NUMBER: 943076294 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22231 FILM NUMBER: 04642147 BUSINESS ADDRESS: STREET 1: 5341OLD REDWOOD HIGHWAY STREET 2: 4TH FLOOR CITY: PETALUMA STATE: CA ZIP: 94954 BUSINESS PHONE: 7077788900 MAIL ADDRESS: STREET 1: 5341 OLD REDWOOD HIGHWAY STREET 2: 4TH FLOOR CITY: PETALUMA STATE: CA ZIP: 94954 FORMER COMPANY: FORMER CONFORMED NAME: ORGANIC FOOD PRODUCTS INC DATE OF NAME CHANGE: 19970304 8-K 1 spectrum8k-030204.txt PERIOD ENDED 03-01-04 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): March 1, 2004 Spectrum Organic Products, Inc. ---------------------------------------------------- (Exact name of Registrant as specified in its charter) California 333-22997 94-3076294 ------------ ---------------------- ------------------- (State of (Commission File Number) (IRS Employer ID No.) Incorporation) 5341 Old Redwood Highway, Suite 400 Petaluma, CA 94954 -------------------------------------- (Address of Principal Executive Offices) (707) 778-8900 ----------------------------- (Registrant's telephone number) ITEM 7. Financial Statements and Exhibits (c) Exhibits: 99.07 Press release of the Company dated March 1, 2004 titled "Spectrum Organic Products Reports Record Sales and Profits for 2003". Item 12. Results of Operations and Financial Condition Spectrum Organic Products, Inc. (the "Company") issued a press release on March 1, 2004 announcing its final 2003 results of operations and financial condition. Included with that press release were the following financial statements: 1. Balance Sheets as of December 31, 2003 and 2002 2. Statements of Operations for the years ended December 31, 2003, 2002 and 2001 3. Statement of Stockholders' Equity for the years ended December 31, 2003, 2002 and 2001 4. Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001 A copy of the press release is included with this 8-K filing as Exhibit 99.07. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. Dated: March 2, 2004 Spectrum Organic Products, Inc. /s/ Robert B. Fowles ------------------------------- Robert B. Fowles Duly Authorized Officer & Chief Financial Officer
Spectrum Organic Products, Inc. Balance Sheets =========================================================================================== As of December 31, 2003 2002 ------------ ------------ Assets Current Assets: Cash $ 7,300 $ 12,700 Accounts receivable, net 4,163,200 3,075,200 Inventories, net 8,007,200 5,269,600 Deferred income taxes - current 514,200 -- Prepaid expenses and other current assets 297,500 79,600 ------------ ------------ Total Current Assets 12,989,400 8,437,100 Property and Equipment, net 4,338,700 3,447,400 Other Assets: Deferred income taxes - long-term 1,087,700 -- Intangible assets, net 586,800 42,000 Other assets 218,300 271,900 ------------ ------------ Total Assets $ 19,220,900 $ 12,198,400 ============ ============ Liabilities and Stockholders' Equity Current Liabilities: Bank overdraft $ 513,800 $ 601,000 Line of credit 4,833,000 2,479,800 Accounts payable, trade 4,168,000 3,176,300 Accrued expenses 1,307,700 876,200 Current maturities of notes payable & capital lease obligations 322,300 256,000 Current maturities of notes payable, related parties 275,200 275,100 Income taxes payable 9,900 176,000 ------------ ------------ Total Current Liabilities 11,429,900 7,840,400 Notes payable & capital lease obligations, less current maturities 1,104,200 278,900 Notes payable, related parties, less current maturities 549,200 805,200 Deferred rent 50,700 -- ------------ ------------ Total Liabilities 13,134,000 8,924,500 ------------ ------------ Stockholders' Equity: Preferred stock, 5,000,000 shares authorized, no shares issued or outstanding -- -- Common stock, without par value, 60,000,000 shares authorized, 46,254,777 and 45,705,571 issued and outstanding at December 31, 2003 and 2002, respectively 9,579,500 9,430,100 Accumulated deficit (3,492,600) (6,156,200) ------------ ------------ Total Stockholders' Equity 6,086,900 3,273,900 ------------ ------------ Total Liabilities and Stockholders' Equity $ 19,220,900 $ 12,198,400 ============ ============
Spectrum Organic Products, Inc. Statements of Operations ============================================================================================== For the years ended December 31, 2003 2002 2001 ------------ ------------ ------------ Net sales $ 45,676,500 $ 40,579,300 $ 41,019,200 Cost of goods sold 33,806,800 29,823,000 30,009,700 ------------ ------------ ------------ Gross profit 11,869,700 10,756,300 11,009,500 ------------ ------------ ------------ Operating Expenses: Sales and marketing 6,204,600 5,987,500 5,791,300 General and administrative 3,729,100 2,949,500 3,194,900 Amortization of goodwill -- -- 520,700 Industrial accident expenses 410,200 254,100 -- (Gain) loss on sales of product lines -- (210,300) 4,803,200 Goodwill impairment writedown -- -- 950,000 ------------ ------------ ------------ Total operating expenses 10,343,900 8,980,800 15,260,100 ------------ ------------ ------------ Income (Loss) From Operations 1,525,800 1,775,500 (4,250,600) Other Income (Expense): Interest expense (404,200) (480,600) (912,800) Other, net (24,600) 14,900 (42,400) ------------ ------------ ------------ Income (Loss) Before Taxes 1,097,000 1,309,800 (5,205,800) Benefit (Provision) for income taxes 1,566,600 (189,800) -- ------------ ------------ ------------ Net Income (Loss) $ 2,663,600 $ 1,120,000 $ (5,205,800) ============ ============ ============ Basic and Fully Diluted Income (Loss) Per Share $ 0.06 $ 0.02 $ (0.12) ============ ============ ============ Weighted Average Shares Outstanding: Basic 45,845,140 45,699,627 45,278,517 Fully Diluted 47,839,765 46,306,077 45,278,517
Spectrum Organic Products, Inc. Statement of Stockholders' Equity For the Years Ended December 31, 2001, 2002 and 2003 ============================================================================================================= Retained Earnings Total Common Stock (Accumulated Stockholders' Shares Amount Deficit) Equity ----------- ----------- ----------- ----------- Balances, January 1, 2001 44,495,828 $ 8,920,400 $(2,070,400) $ 6,850,000 Restricted common shares issued to a non-executive Director of the Company, under a private sale 160,000 50,000 -- 50,000 Restricted common shares issued to non-executive Directors of the Company, in lieu of cash compensation for Board fees earned during 2000 64,000 20,000 -- 20,000 Restricted common shares issued to four note holders under the private placement conversion offer to convert the notes to equity 630,000 168,200 -- 168,200 Warrants net exercised by the note holders under the private placement 230,883 -- -- -- Warrants issued in connection with the private placement notes -- 96,100 -- 96,100 Options issued to Global Natural Brands, Ltd. in final settlement of litigation -- 25,300 -- 25,300 Shares issued to the Trustee for the Chapter 7 estate of Sunny Farms in final settlement of litigation 117,950 93,700 -- 93,700 Net loss for the year -- -- (5,205,800) (5,205,800) ----------- ----------- ----------- ----------- Balances, December 31, 2001 45,698,661 $ 9,373,700 $(7,276,200) $ 2,097,500 Warrants net exercised by the note holders under the private placement 6,910 -- -- -- Warrants issued in connection with the private placement notes -- 49,500 -- 49,500 Non-qualified stock options issued -- 6,900 -- 6,900 Net income for the year -- -- 1,120,000 1,120,000 ----------- ----------- ----------- ----------- Balances, December 31, 2002 45,705,571 $ 9,430,100 $(6,156,200) $ 3,273,900 Warrants exercised by the note holders under the private placement 405,456 90,000 -- 90,000 Exercise of common stock options 143,750 59,400 -- 59,400 Net income for the year -- -- 2,663,600 2,663,600 ----------- ----------- ----------- ----------- Balances, December 31, 2003 46,254,777 $ 9,579,500 $(3,492,600) $ 6,086,900 =========== =========== =========== ===========
Spectrum Organic Products, Inc. Statements of Cash Flows ============================================================================================================= For the years ended December 31, 2003 2002 2001 ------------ ------------ ------------ Cash Flows From Operating Activities: Net Income (Loss) $ 2,663,600 $ 1,120,000 $ (5,205,800) Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used in) Operating Activities: Provision for allowances against receivables 103,400 47,000 68,300 Provision for inventory obsolescence 210,800 262,200 300,500 Provision for industrial accident 410,200 254,100 -- Depreciation and amortization 524,700 454,300 418,800 Amortization of goodwill -- -- 520,700 Goodwill impairment writedown -- -- 950,000 (Gain) Loss on sales of product lines -- (210,300) 4,803,200 Loss on asset disposals 50,300 -- 84,100 Imputed interest on notes payable and warrants issued 19,000 71,300 107,600 Imputed expense on non-qualified stock options -- 6,900 -- Directors fees paid via issuance of common stock -- -- 20,000 Changes in Assets and Liabilities: Accounts receivable (1,191,400) 430,400 (524,500) Inventories (2,948,400) (1,057,700) (420,600) Deferred income taxes (1,601,900) -- -- Prepaid expenses and other assets (224,300) (54,300) 35,000 Accounts payable 871,700 (500,300) (2,203,900) Accrued expenses (104,000) (282,200) 188,900 Income taxes payable 9,900 176,000 -- ------------ ------------ ------------ Net Cash Provided by (Used in) Operating Activities (1,206,400) 717,400 (857,700) ------------ ------------ ------------ Cash Flows From Investing Activities: Purchase of property and equipment (1,281,100) (719,300) (522,700) Purchase of intellectual property (550,000) -- -- Proceeds from sales of product lines and related inventories -- 3,215,200 2,953,100 Transaction fees on sales of product lines -- (152,000) (139,700) Proceeds from sale of assets -- -- 3,000 ------------ ------------ ------------ Net Cash Provided by (Used in) Investing Activities (1,831,100) 2,343,900 2,293,700 ------------ ------------ ------------ Cash Flows From Financing Activities: Increase (decrease) in bank overdraft (87,200) 29,300 24,900 Proceeds from lines of credit 36,210,000 43,931,000 43,677,700 Repayment of lines of credit (33,856,600) (46,050,000) (44,511,000) Repayment of notes payable, related parties (275,300) (371,200) (426,400) Proceeds of notes payable 1,495,200 -- 132,700 Repayment of notes payable (553,800) (545,200) (287,500) Repayment of capitalized lease obligations (49,600) (69,000) (78,600) Restricted shares purchased by board member -- -- 50,000 Proceeds from exercise of common stock warrants 90,000 -- -- Proceeds from exercise of common stock options 59,400 -- -- ------------ ------------ ------------ Net Cash Provided by (Used in) Financing Activities 3,032,100 (3,075,100) (1,418,200) ------------ ------------ ------------ Net Increase (Decrease) in Cash (5,400) (13,800) 17,800 Cash, beginning of the year 12,700 26,500 8,700 ------------ ------------ ------------ Cash, end of the year $ 7,300 $ 12,700 $ 26,500 ============ ============ ============ Supplemental Disclosure of Cash Flow Information: Cash paid for income taxes $ 323,500 $ 13,800 $ 800 Cash paid for interest $ 384,400 $ 446,300 $ 805,200 Non-Cash Financing Activities: Conversion of notes payable to common stock $ -- $ -- $ 168,200 - ----------------------
EX-99.07 3 spectrumexhib9907-030204.txt PRESS RELEASE DATED 03-01-04 Exhibit 99.07 Spectrum Organic Products, Inc. Press Release March 1, 2004 Spectrum Organic Products Reports Record Sales and Profits for 2003 Spectrum Organic Products, Inc. (OTCBB--SPOP) today reported its fourth quarter and full year results for calendar year 2003. Net income for the year was a record of $2,663,600 or $0.06 per share on a fully-diluted basis versus net income for the prior year of $1,120,000 or $0.02 per fully-diluted share. The improved results were primarily attributable to the reversal of the valuation reserve previously maintained against the Company's deferred tax assets, which resulted in the Company recording a net benefit from income taxes of $1,566,600. Also contributing to the improved results was impressive sales growth in all three of the Company's primary business lines. For the fourth quarter ended December 31, 2003 the Company reported net income of $1,386,700 or $0.03 per fully-diluted share versus net income of $265,000 ($0.00 per share) for the prior year. Again, the majority of the improvement was attributable to the reversal of the reserve against the Company's deferred tax assets. The Company reported that total net sales for the year ended December 31, 2003 were also a record of $45,676,500 compared to $40,579,300 for 2002, an increase of 13%. Comparable net sales (after eliminating sales of disposed or discontinued product lines from both periods) increased by 22% for 2003.(i) Leading the way was the Spectrum Ingredients Division, whose net sales increased by 31% versus the prior year. The SI Division benefited from the additional mass media focus on the dangers of hydrogenated oils with respect to obesity and cardiovascular disease. During 2003 several major food companies issued press releases featuring a commitment to reduce or eliminate hydrogenated oils from their packaged consumer products, which plays directly to the SI Division product lines. This same trend toward healthy oils also benefited the Spectrum Naturals(R) line of packaged culinary oils, dressings and butter substitutes, which delivered net sales growth of 19% versus the prior year. Finally, the Spectrum Essentials(R) sales of essential fatty acid nutritional supplements increased 15% over the prior year primarily as a result of increased demand for flax oil as a nutritionally-rich vegetarian source of Omega-3 and Omega-6 essential fatty acids. For the fourth quarter, comparable net sales increased by 25%, led by Spectrum Ingredients sales of industrial culinary oils and Spectrum Essentials(R) nutritional supplement sales, both of which increased by 35%, and a 15% increase in sales of Spectrum Naturals(R) culinary products. Management believes that the Company's earnings before interest, taxes, depreciation, amortization, the industrial accident expenses and gains on the sale of product lines, ("EBITDA, as adjusted") is a relevant measure of the Company's financial performance.(ii) For the year ended December 31, 2003 the Company reported EBITDA, as adjusted of $2,436,100 compared to $2,288,500 for the previous year, an increase of 6%. The increase was primarily attributable to increased gross profit (+10%) as a result of the net sales growth, partially offset by increased operating expenses (+11%), the expenses associated with the industrial accident (+61%) and the gain recorded in the prior year on the sale of the Organic Ingredients Division. The Company incurred $410,200 of expenses during 2003 in connection with the industrial accident in April 2002. Included in that amount was an accrual to cover the plea entered by the Company on February 4, 2004 of no contest to two misdemeanor counts of violations of CAL-OSHA regulations. For the fourth quarter ended December 31, 2003 the Company reported EBITDA, as adjusted of $410,600 compared to $595,900 for the corresponding period of the prior year, a decrease of 31%. The decrease was primarily attributable to gross margin pressure and increased operating expenses.
Spectrum President and Chief Executive Officer Neil G. Blomquist said, "Our 2003 financial results were a mixture of both good and bad. On the positive side, the year featured double-digit sales growth in each of our three major product lines and record net income. On the negative side, EBITDA, as adjusted increased only 6% versus the prior year as we suffered some gross margin erosion as a result of higher raw material costs due to organic commodity prices and the weak dollar, especially versus the euro." Spectrum Founder and Chairman of the Board, Jethren P. Phillips, also commented, "While we will forever mourn the loss of our two employees, Javier Del Rio and Francisco Estrella Galvan, we put the financial uncertainty of the industrial accident behind us by entering the no contest plea with the DA. That will enable us to focus on our core position in healthy culinary oils and essential fatty acid nutrition, which continues to be a key strategic advantage as consumer awareness of the health problems associated with hydrogenated oils and trans fats escalates." Spectrum Organic Products, Inc. is a leading manufacturer and marketer of organic culinary oils, vinegars, condiments and butter substitutes under the Spectrum Naturals(R) brand and essential fatty acid nutritional supplements under the Spectrum Essentials(R) brand. The Company also produces and sells a wide range of industrial oils and vinegars to other manufacturers through its Spectrum Ingredients Division. "Safe Harbor" statements under the Private Securities Act of 1995: The statements contained in this press release, which are not historical facts, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by the forward-looking statements. These risks and uncertainties are described in the Company's Securities and Exchange Commission filings under the symbol "SPOP". - END - i The following table reconciles comparable net sales to total net sales for the years ended December 31, 2003 and 2002: 2003 2002 % Change ---- ---- -------- Spectrum Naturals(R) Culinary Products $20,606,100 $17,268,200 +19% Spectrum Essentials(R) Nutritional Supplements 10,353,900 9,030,400 +15% Spectrum Ingredients/Private Label Products 14,443,400 11,065,900 +31% ---------- ---------- ---- Comparable Net Sales $45,403,400 $37,364,500 +22% Disposed/Discontinued Product Lines 273,100 3,214,800 -92% ------- --------- ---- Total Net Sales $45,676,500 $40,579,300 +13% =========== =========== ==== ii The following table reconciles net income to EBITDA, as adjusted for the years ended December 31, 2003 and 2002: 2003 2002 ---- ---- Net income $2,663,600 $1,120,000 Provision (benefit) from income taxes (1,566,600) 189,800 Interest expense 404,200 480,600 Depreciation and amortization 524,700 454,300 Gain on sales of product lines -- (210,300) Industrial accident expenses 410,200 254,100 ------- ------- EBITDA, as adjusted $2,436,100 $2,288,500 ========== ==========
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