-----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, IGFF68Cuf01cAv9oQdskoGvmp7mP9I1uc5rYyREA6he+3z+OWImWUCAMspYJYZMZ WJCt84t7VgM031U38ImpFA== 0000950124-96-001894.txt : 19960502 0000950124-96-001894.hdr.sgml : 19960502 ACCESSION NUMBER: 0000950124-96-001894 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951208 FILED AS OF DATE: 19960501 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: THORN APPLE VALLEY INC CENTRAL INDEX KEY: 0000038851 STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011] IRS NUMBER: 381964066 STATE OF INCORPORATION: MI FISCAL YEAR END: 0530 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-06566 FILM NUMBER: 96554481 BUSINESS ADDRESS: STREET 1: 18700 W TEN MILE RD CITY: SOUTHFIELD STATE: MI ZIP: 48075 BUSINESS PHONE: 8105520700 MAIL ADDRESS: STREET 1: 18700 WEST TEN MILE ROAD STREET 2: 18700 WEST TEN MILE ROAD CITY: SOUTHFIELD STATE: MI ZIP: 48075 FORMER COMPANY: FORMER CONFORMED NAME: FREDERICK & HERRUD INC DATE OF NAME CHANGE: 19841104 10-Q/A 1 AMEND #1 TO 10-Q 1 FORM 10-Q/A AMENDMENT NO. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the twenty-eight weeks ended December 8, 1995 Commission file number 0-6566 Thorn Apple Valley, Inc. ---------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Michigan 38-1964066 ------------------------------- --------------------------------- (State of other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 26999 Central Park Blvd., Southfield, Michigan 48076 ---------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (810) 213-1000 -------------- Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section II or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No . ----- ----- At December 8, 1995 , there were 5,777,957 shares of Common stock outstanding. 2 THORN APPLE VALLEY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
ASSETS December 8, May 26, 1995 1995 ------------- -------------- Current assets: Cash and cash equivalents $7,136,080 $4,730,637 Short-term investments 627,560 531,064 Accounts receivable, less allowance for doubtful accounts (Dec. 8, 1995, $1,063,800; May 26, 1995, $789,100) 75,672,510 40,083,861 Inventories (Note 2) 57,672,658 44,800,792 Refundable income taxes 5,849,573 1,366,231 Deferred income taxes (Note 6) 2,523,000 2,499,000 Prepaid expenses and other current assets 5,799,666 4,073,817 ------------ ------------- Total current assets 155,281,047 98,085,402 ------------ ------------- Property, plant and equipment : Land 1,519,606 1,139,439 Buildings and improvements 70,082,936 37,694,988 Machinery and equipment 145,105,988 117,712,476 Transportation equipment 7,536,593 7,529,516 Property under capital leases 9,708,544 7,428,634 Construction in progress 7,893,690 22,206,233 ------------ ------------- 241,847,357 193,711,286 Less accumulated depreciation 100,506,585 95,643,621 ------------ ------------- 141,340,772 98,067,665 ------------ ------------- Other assets: Goodwill, net of accumulated amortization of $452,000 (Note 7) 33,120,069 Other 8,556,878 8,143,298 ------------ ------------- Total other assets 41,676,947 8,143,298 ------------ ------------- $338,298,766 $204,296,365 ============ ============= LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $44,154,003 $32,474,150 Notes payable, banks (Note 3) 5,960,000 Notes payable, officer 705,974 1,415,241 Accrued liabilities 31,610,745 23,378,430 Current portion of long-term debt 10,969,745 3,100,310 ------------ ------------- Total current liabilities 87,440,467 66,328,131 ------------ ------------- Long-term debt (Note 3) 154,734,974 35,464,669 ------------ ------------- Deferred income taxes (Note 6) 4,724,000 3,908,000 ------------ ------------- Shareholders' equity: Preferred stock: $1 par value; authorized 200,000 shares; issued none Common nonvoting stock: $.10 par value; authorized 20,000,000 shares; issued none Common voting stock: $.10 par value; authorized 20,000,000 shares; issued 5,777,957 shares Dec. 8, 1995 and 5,770,647 shares May 26, 1995 577,796 577,065 Capital in excess of par value 6,900,390 6,771,071 Retained earnings 83,921,139 91,247,429 ------------- ------------- 91,399,325 98,595,565 ------------- ------------- $338,298,766 $204,296,365 ============= =============
See notes to consolidated financial statements. 1 3 THORN APPLE VALLEY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 - The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles and reflect, in the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position as of December 8, 1995 and May 26, 1995, and the results of operations and cash flows for the periods presented. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in Thorn Apple Valley, Inc.'s Annual Report on Form 10-K for the fiscal year ended May 26, 1995. The results for the twenty-eight weeks ended December 8, 1995 are not necessarily indicative of the results to be expected for the fiscal year ending May 31, 1996. NOTE 2 - Inventories are stated at the lower of last-in, first-out (LIFO) cost or market. Inventories would have been approximately $2,950,000 higher at December 8, 1995 and May 26,1995 if they had been stated at the lower of first-in, first-out (FIFO) cost or market. The following is a breakdown of inventories by classifications:
December 8, May 26, 1995 1995 ---------------- --------------- Supplies $ 9,820,085 $ 6,824,152 Raw materials 12,181,180 11,389,564 Work in progress 3,972,566 4,914,163 Finished goods 34,648,827 24,622,913 -------------- -------------- 60,622,658 47,750,792 Less LIFO reserve 2,950,000 2,950,000 -------------- -------------- Inventory balance $57,672,658 $44,800,792 ============== ==============
NOTE 3 - Concurrent with the previously announced acquisition, on May 30, 1995, the Company replaced its existing lines of credit with an $80 million revolving credit agreement. (See Note 7 to the Notes to the Consolidated Financial Statements for further discussion related to the acquisition). The unsecured revolving credit agreement is with four financial institutions at variable interest rates no higher than the prime rate or its equivalent. The commitments under the revolving credit agreement expire on May 30, 1998, but may be extended annually for successive one-year periods with the consent of the financial institutions. The commitment fee on the unused portion of the facility is .25% per annum. The Company is required under the revolving credit agreement to maintain a minimum level of consolidated net worth. At December 8, 1995, the Company had $80 million in lines of credit, of which all was drawn. Borrowings under the three year revolving credit agreement are classified as long-term debt. The Company's various loan agreements contain restrictive covenants that include the maintenance of a minimum level of consolidated tangible net worth, as defined, and of certain financial ratios. At December 8, 1995, the Company was not in compliance with certain covenants contained in its industrial revenue bond and limited obligation revenue bond agreements. The lenders have granted the Company waivers of these covenant provisions through December 31, 1995 and May 31, 1996, respectively. The Company has classified these obligations as current liabilities, as a result of the waivers being less than one year in duration from the balance sheet date. The Company does not expect its industrial revenue bond or limited obligation revenue bond lenders to call the debt at the end of the waiver period and will seek to amend these agreements. At December 8, 1995 the Company was also not in compliance with the funded debt and fixed charge ratios on its various long-term fixed debt agreements. The Company has subsequently received amendments to its long-term agreements that both amended the covenants and unconditionally waived the compliance and defaults or events of defaults resulting from the failure to be in compliance with such covenants. 5 4 FINANCIAL CONDITION The Company's business is characterized by high unit sales volume and rapid turnover of inventories and accounts receivable. Because of the rapid turnover rate, the Company considers its inventories and accounts receivable to be highly liquid and readily convertible into cash. Borrowings under the revolving credit agreement are used when needed to finance increases in the levels of inventories and accounts receivable resulting from seasonal and other market-related fluctuations in raw material costs and quantities. The demand for seasonal borrowings usually peaks in early December when ham inventories and accounts receivable are at their highest levels, and these borrowings are generally repaid in January when the accounts receivable generated by the sales of these hams are collected. The Company has historically maintained lines of credit in excess of the cash needs of its business. At December 8, 1995, the Company had total lines of credit under its revolving credit agreement from four financial institutions aggregating $80.0 million, of which all was drawn. Subsequent to September 15, 1995, the Company had obtained an additional $25.0 million of temporary short-term lines of credit to be used for seasonal ham inventory buildup, the temporary lines expired on January 15, 1996. At December 8, 1995 all of the additional temporary short-term lines were unused. The Company's various loan agreements contain restrictive covenants that include the maintenance of a minimum level of consolidated net worth, as defined, and of certain financial ratios (see Note 3 to the Notes to the Consolidated Financial Statements for further discussion related to the Company's various debt covenant violations). In addition to the approximately $22 million of capital expenditures related to the Wilson acquisition, the Company anticipates capital expenditures during fiscal 1996 of approximately $37 million, primarily to complete the construction of its new manufacturing facility in Ponca City, Oklahoma, and to complete the planned modernization of its various manufacturing and slaughter facilities. The Company's Ponca City facility was fully completed in November, 1995. The Company began limited operations in mid October and have adopted a very aggressive schedule to bring production up to its planned capacity. With the opening of the Company's Ponca City plant during the second quarter, and some limited reconfiguring of some other facilities, the Company will be closing two of the former Wilson operating facilities. Notification of the plant closures was done in compliance with the federal Worker Adjustment and Retraining Notification ("WARN") Act. The Company is unable at this time to determine whether a charge will result from these plant closings. Management believes that funds provided from operations and borrowings under available lines of credit will permit it to continue to finance its current operations and to further develop its business in accordance with its operating strategies. EXHIBITS AND REPORTS ON FORM 8-K There were no reports filed on form 8-K for the period ending December 8, 1995. 10 5 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. THORN APPLE VALLEY, INC. ------------------------ (Registrant) Date: May 1, 1996 By: /s/ Louis Glazier ------------------------------------ Louis Glazier Executive Vice President of Finance and Administration Chief Financial Officer 11 6 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO. - ----------- ----------- -------- EX-27 Financial Data Schedule
EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) CONSOLIDATED BALANCE SHEET AT DECEMBER 8, 1995, CONSOLIDATED STATEMENTS OF INCOME FOR THE 28 WEEKS ENDED DECEMBER 8, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FORM 10Q, QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. 6-MOS MAY-31-1996 MAY-27-1995 DEC-08-1995 7,763,640 0 76,736,310 1,063,800 57,672,658 155,281,047 241,847,357 100,506,585 338,298,766 87,440,467 154,734,974 0 0 577,796 90,821,529 338,298,766 514,907,690 514,907,690 474,510,781 474,510,781 46,517,196 0 4,546,783 (10,486,116) (3,564,000) (6,922,116) 0 0 0 (6,922,116) (1.20) (1.20)
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