-----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, Ek9GKvOdPXoAU9sTfqYTXmXuPtfEay34J1zEiJmbQFiF24hni420oO2iC5hu8ZB+ cxfpNEqejo9BHsZqGhmafg== 0000912057-97-023737.txt : 19970710 0000912057-97-023737.hdr.sgml : 19970710 ACCESSION NUMBER: 0000912057-97-023737 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970531 FILED AS OF DATE: 19970709 SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN CRYSTAL SUGAR CO /MN/ CENTRAL INDEX KEY: 0000004828 STANDARD INDUSTRIAL CLASSIFICATION: SUGAR & CONFECTIONERY PRODUCTS [2060] IRS NUMBER: 840004720 STATE OF INCORPORATION: MN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-83868 FILM NUMBER: 97638061 BUSINESS ADDRESS: STREET 1: 101 N 3RD ST CITY: MOORHEAD STATE: MN ZIP: 56560 BUSINESS PHONE: 6122028110 MAIL ADDRESS: STREET 1: 101 NORTH THIRD STREET CITY: MOORHEAD STATE: MN ZIP: 56560 10-Q 1 FORM 10-Q - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 10-Q ---------- [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR THE PERIOD ENDED MAY 31, 1997 COMMISSION FILE NUMBER: 33-83868 AMERICAN CRYSTAL SUGAR COMPANY (Exact name of registrant as specified in its charter) MINNESOTA 84-0004720 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 101 NORTH THIRD STREET MOORHEAD, MINNESOTA 56560 (Address of principal executive offices) TELEPHONE NUMBER (218) 236-4400 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 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 --------- ------ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. OUTSTANDING AT CLASS OF COMMON STOCK JULY 2, 1997 --------------------- ------------ $10 PAR VALUE 2,586 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- AMERICAN CRYSTAL SUGAR COMPANY FORM 10-Q INDEX PAGE NO. PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS BALANCE SHEETS 1 STATEMENTS OF OPERATIONS 3 STATEMENT OF CASH FLOWS 4 NOTES TO THE FINANCIAL STATEMENTS 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION 7 PART II OTHER INFORMATION 10 SIGNATURES 12 AMERICAN CRYSTAL SUGAR COMPANY Balance Sheets (Unaudited) (Dollars in Thousands) ASSETS May 31 -------------- August 31, 1997 1996 1996 ---- ---- ---- Current Assets: * Cash and Cash Equivalents $ 43 $ 4,073 $ 3,807 Accounts Receivable: Trade 52,685 47,945 50,915 Members 3,242 4,127 3,845 Other 3,811 3,321 1,399 Advances to Related Parties 18,892 19,730 10,308 Inventories (Note 2) 302,156 216,191 72,677 Prepaid Expenses 2,861 3,017 3,088 --------- --------- --------- Total Current Assets 383,690 298,404 146,039 --------- --------- --------- Property and Equipment: Land 12,170 11,875 12,059 Buildings and Equipment 612,527 535,587 572,446 Construction-in-Progress 35,087 57,765 41,098 Less: Accumulated Depreciation (412,198) (392,780) (391,665) --------- --------- --------- Net Property and Equipment 247,586 212,447 233,938 --------- --------- --------- Other Assets: Investments in Banks for Cooperatives 15,795 15,044 15,177 Investments in Marketing Cooperatives 17,490 8,704 15,468 Investment in ProGold LLC 45,844 48,194 51,330 Other Assets 2,963 3,830 3,184 --------- --------- --------- Total Other Assets 82,092 75,772 85,159 --------- --------- --------- Total Assets $ 713,368 $ 586,623 $ 465,136 --------- --------- --------- --------- --------- --------- * Derived from audited financial statements. The Accompanying Notes are an Integral Part of These Financial Statements. 1 AMERICAN CRYSTAL SUGAR COMPANY Balance Sheets (Unaudited) (Dollars in Thousands) LIABILITIES AND MEMBERS' INVESTMENTS May 31 -------------- August 31, 1997 1996 1996 ---- ---- ---- Current Liabilities: * Short-Term Debt $ 184,056 $ 134,761 $ 13,643 Current Maturities of Long-Term Debt 14,300 14,300 13,525 Accounts Payable: Trade 8,068 2,224 17,060 Other 2,701 7,124 7,490 Accrued Continuing Costs (Note 3) 72,723 50,122 - Other Current Liabilities 17,815 15,224 15,132 Amounts Due Members 63,733 57,406 47,118 --------- --------- --------- Total Current Liabilities 363,396 281,161 113,968 Long-Term Debt, Excluding Current Maturities 160,300 145,519 177,394 Deferred Income Taxes - 1,029 - Other Liabilities 23,638 26,519 21,638 Commitments and Contingencies - - - --------- --------- --------- Total Liabilities 547,334 454,228 313,000 --------- --------- --------- Members' Investments (Note 4): Preferred Stock 33,542 31,879 31,879 Common Stock 26 24 24 Additional Paid-in Capital 63,752 32,417 33,041 Unit Retains 88,954 81,278 97,191 Pension Liability Adjustment (4,519) (5,674) (4,518) Retained Earnings (15,721) (7,529) (5,481) --------- --------- --------- Total Members' Investments 166,034 132,395 152,136 --------- --------- --------- Total Liabilities and Members' Investments $ 713,368 $ 586,623 $ 465,136 --------- --------- --------- --------- --------- --------- * Derived from audited financial statements. The Accompanying Notes are an Integral Part of These Financial Statements. 2 AMERICAN CRYSTAL SUGAR COMPANY Statement of Operations (Unaudited) (Dollars in Thousands) Nine Months Ended Three Months Ended May 31 May 31 -------------------- ------------------ 1997 1996 1997 1996 -------------------- ------------------ Net Revenue $489,557 $511,592 $189,092 $187,448 Cost of Product Sold (60,081) 41,833 22,041 46,518 -------- -------- -------- -------- Gross Proceeds 549,638 469,759 167,051 140,930 Selling, General & Administrative Expenses 108,242 110,009 43,078 38,934 Accrued Continuing Costs (Note 3) 72,723 50,122 27,056 22,958 -------- -------- -------- -------- Operating Proceeds 368,673 309,628 96,917 79,038 -------- -------- -------- -------- Other Income (Expenses) Interest Income 1,201 319 (12) 119 Interest Expense (13,025) (11,703) (5,393) (4,737) Other Income (Loss) 8,377 4,210 11,707 2,473 Other Expenses (9,669) (48) (11,937) (3) -------- -------- -------- -------- Other Income (Expense) (13,116) (7,222) (5,635) (2,148) -------- -------- -------- -------- Proceeds before Income Taxes 355,557 302,406 91,282 76,890 Income Taxes Provision/(Benefit) - - - - -------- -------- -------- -------- Net Proceeds Resulting from Member and Non-Member Business $355,557 $302,406 $ 91,282 $ 76,890 -------- -------- -------- -------- -------- -------- -------- -------- Distribution of Net Proceeds: Credited/(Charged) to Member's Investments: Member Tax Accounting Adjustment, Net $ - $ - $ - $ - Non-Member Business Income/(Loss) (10,240) (2,444) (5,709) (897) Unit Retains Declared to Members - - - - -------- -------- -------- -------- Net Credit/(Charge) to Members' Investments (10,240) (2,444) (5,709) (897) Payments to/due Members for Sugarbeets, Net of Unit Retains Declared 365,797 304,850 96,991 77,787 -------- -------- -------- -------- Total $355,557 $302,406 $ 91,282 $ 76,890 -------- -------- -------- -------- -------- -------- -------- -------- The Accompanying Notes are an Integral Part of These Financial Statements. 3 AMERICAN CRYSTAL SUGAR COMPANY Statements of Cash Flows (Unaudited) (Dollars In Thousands) Nine Months Ended May 31 -------------------- 1997 1996 Cash Provided by/(Used for) Operations: Net Proceeds Resulting from Member and Non- Member Business $ 355,557 $ 302,406 Payments to/due Members for Sugarbeets, Including Unit Retains (365,797) (304,850) Add/(Deduct) Noncash Items: Depreciation and Amortization 21,157 19,482 Loss on Investment Activities 9,204 - Deferred Income Taxes - - (Gain)/loss on the Disposition of Property and Equipment (146) (143) Noncash Portion of Patronage Dividend from Banks for Cooperatives (618) (1,884) Deferred Gain Recognition (142) (168) Changes in Certain Elements of Working Capital Accounts Receivable: Trade (1,770) 169 Members 603 79 Other (2,412) 1,594 Inventories (229,479) (112,900) Prepaid Expenses 227 1,098 Advances to Related Parties (8,584) (13,928) Accounts Payable: Trade (8,992) (18,806) Other (4,789) 2,260 Other Current Liabilities 72,842 51,428 Amount Due Growers 16,615 17,169 --------- -------- Net Cash Used In Operations (146,524) (56,994) --------- -------- Cash Used In Investing Activities: Purchases of Property and Equipment (34,181) (20,831) Proceeds from the Sale of Property and Equipment 146 143 Investment in Banks for Cooperatives (0) 773 Investment in Marketing Coops (1,880) (2,992) Investment in ProGold LLC (1,153) (35,742) Changes in Other Assets (399) 175 --------- -------- Net Cash Used In Investing Activities (37,467) (58,474) --------- -------- Cash Provided by/(Used In) Financing Activities: Net Proceeds (Payments) on Short-Term Debt 170,413 80,829 Proceeds from Long-Term Debt 12,866 52,900 Long-Term Debt Repayment (29,190) (12,115) Changes in Other Long-Term Liabilities 1,999 1,715 Changes in Preferred Stock 1,663 - Changes in Common Stock 2 1 Changes in Additional Paid-In Capital 30,711 - Payment of Unit Retains (8,237) (7,209) --------- -------- Net Cash Provided by Financing Activities 180,227 116,121 --------- -------- Decrease in Cash and Cash Equivalents (3,764) 653 Cash and Cash Equivalents Beginning of Period 3,807 3,420 --------- -------- Cash and Cash Equivalents End of Period $ 43 $ 4,073 --------- -------- --------- -------- The Accompanying Notes are an Integral Part of These Financial Statements. 4 AMERICAN CRYSTAL SUGAR COMPANY NOTES TO THE FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED MAY 31, 1997 AND 1996 NOTE 1: BASIS OF PRESENTATION The unaudited financial statements contained herein have been prepared pursuant to the rules and regulations of the Security and Exchange Commission. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles. However, in the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. The operating results for the nine month period ended May 31, 1997 are not necessarily indicative of the results that may be expected for the year ended August 31, 1997. The amount paid to growers for sugarbeets (beet payment) depends on the future selling prices of sugar and by-products as well as processing and other costs to be incurred during the remainder of the fiscal year. For the purposes of this report, the amount of the beet payment, future revenues and costs have been estimated. Therefore, adjustments with respect to these estimates may be necessary in the future as additional information becomes available. These financial statements should be read in conjunction with the financial statements and notes included in the company's annual report for the year ended August 31, 1996. NOTE 2: INVENTORIES The major components of inventories are as follows (In Thousands): 5/31/97 5/31/96 8/31/96 ------- ------- ------- Refined Sugar, Pulp, Molasses, CSB and Beet Seed $279,870 $191,197 $ 46,155 Maintenance Parts & Supplies 22,286 24,994 26,522 -------- -------- -------- Total Inventories $302,156 $216,191 $ 72,677 -------- -------- -------- -------- -------- -------- Sugar, pulp, molasses and CSB inventories are valued at estimated net realizable value. Maintenance parts & supplies and beet seed inventories are valued the lower of average cost or market. NOTE 3: ACCRUED CONTINUING COSTS For interim reporting, the Net Proceeds from Member Business is determined based on the forecasted beet payment and the percentage of the tons of sugarbeets processed to the total estimated tons of sugarbeets to process for a given crop year. Accrued continuing costs represents the difference between the Net Proceeds from Member Business as determined above and actual member business crop year revenues realized and expenses incurred through the end of the reporting period. Accrued continuing costs are reflected in the Financial Statements as a cost on the Statements of Operations and as a current liability on the Balance Sheets. 5 NOTE 4: MEMBERS' INVESTMENTS Shares Shares Issued Par Value Authorized & Outstanding --------- ---------- ------------- Preferred Stock: July 2, 1997 $76.77 600,000 436,915 May 31, 1997 $76.77 600,000 436,915 August 31, 1996 $76.77 600,000 415,255 May 31, 1996 $76.77 600,000 415,255 Common Stock: July 2, 1997 $10.00 4,000 2,586 May 31, 1997 $10.00 4,000 2,562 August 31, 1996 $10.00 4,000 2,444 May 31, 1996 $10.00 4,000 2,428 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION FOR THE THREE AND NINE MONTHS ENDED MAY 31, 1997 AND 1996 RESULTS OF OPERATIONS COMPARISON OF THE NINE MONTHS ENDED MAY 31, 1997 AND 1996 Revenue for the nine months ended May 31, 1997, was $489.6 million, a decrease of $22 million from 1996. Revenue from total sugar sales decreased 5.2 percent reflecting a 10.6 percent decrease in hundredweight sold partially offset by a 6.1 percent increase in the average selling price per hundredweight. Revenue from pulp sales increased 22.3 percent due to a 16.1 percent increase in the volume of pulp sold and a 5.3 percent increase in the average selling price per ton. Revenue from molasses sales decreased 21.6 percent due to a 21.7 percent decrease in the volume of molasses sold partially offset by a .2 percent increase in the average selling price per ton. Revenue from the sales of Concentrated Separated By-Product (CSB), a by-product of the molasses desugarization process, increased 15.6 percent due to a 23.4 percent increase in the average selling price per ton partially offset by a 6.3 percent decrease in the volume of CSB sold. Cost of product sold, exclusive of payments for sugarbeets, decreased $101.9 million due to the amount of product sold compared to the prior year which was partially offset by increased direct processing costs. Fixed and committed expenses decreased 5.5 percent reflecting lower maintenance costs. Changes in product inventory levels between 1997 and 1996, decreased the cost of product sold by $125.0 million. The cost associated with sugar purchased to meet customer needs was up $13.4 million due to the short supply of inventory at the beginning of the 1997 fiscal year. Selling expenses decreased $3.3 million due primarily to the decreases in volumes of sugar and by-products sold. General and Administrative expenses increased $1.5 million reflecting higher personnel costs and other general cost increases. The increase in accrued continuing costs was due primarily to changes in the volume of sugar sales and production, differences in the timing of incurring processing costs and the amount of unsold inventory on hand. Interest expense increased $1.3 million due to higher average borrowing levels for short and long-term debt. Non-member activities resulted in the loss of $10.2 million for the nine months ended May 31, 1997 as compared to a loss of $2.4 million for the same period last year. The majority of this loss is related to American Crystal's investment in ProGold Limited Liability Company (ProGold). American Crystal has invested $52.1 million as a 46% partner in ProGold. ProGold is operating a corn wet milling plant, which produces high-fructose corn syrup (HFCS) sweetener. Initial operation of the plant started October 25, 1996. The company originally anticipated ProGold would incur a $28 million loss during its initial year of operation. The current anticipated loss is in the range of $28 million to $32 million. American Crystal's share of the current projected loss is in the range of $12.9 million to $14.7 million. The additional loss is attributable to significantly lower market prices of HFCS, which is partially offset by lower than expected operating expenses. Future changes in the market price of corn sweetener will significantly affect the future earnings of ProGold. 7 Due to the unpredictable nature of the HFCS market, the future impact of the investment in ProGold on American Crystal's financial condition and results of operations is uncertain, although that impact could be adverse. The remainder of the loss from non-member activities was primarily attributable to lower profits from the sale of beet seed. Net payments to/due members for sugarbeets increased by $60.9 million from $304.9 million for the first nine months in 1996, to $365.8 million for the first nine months in 1997. This increase is due to a higher projected per ton beet payment this year and more tons harvested. COMPARISON OF THE THREE MONTHS ENDED MAY 31, 1997 AND 1996 Revenue for the three months ended May 31, 1997, was $189.1 million, an increase of $1.6 million from 1996. Revenue from total sugar sales decreased .4 percent reflecting a 7.2 percent increase in the average selling price per hundredweight mostly offset by a 7.1 percent decrease in hundredweight sold. Revenue from pulp sales increased 66.1 percent due to a 70.4 percent increase in the volume of pulp sold partially offset by a 2.5 percent decrease in the average selling price per ton. Revenue from molasses sales decreased 23.9 percent due to a 2.8 percent decrease in the average selling price per ton and a 21.8 percent decrease in the volume of molasses sold. Revenue from the sales of Concentrated Separated By-Product (CSB), a by-product of the molasses desugarization process, decreased 42.3 percent due to a 50.6 percent decrease in the volume of CSB sold partially offset by a 17 percent increase in the average selling price per ton. Cost of product sold, exclusive of payments for sugarbeets, decreased $24.5 million due to the amount of product sold compared to the prior year which was partially offset by increased direct processing costs. Fixed and committed expenses decreased 18.3 percent due to lower maintenance costs. Changes in product inventory levels between 1997 and 1996, decreased the cost of product sold by $29 million. The cost associated with sugar purchased to meet customer needs was up $2.0 million due to increased sales volume of purchased sugar during this quarter. Selling expenses increased $2.2 million due primarily to the increased personnel costs and increased sales volume of purchased sugar and by-products. General and Administrative expenses increased $2.0 million due to higher personnel costs and other general cost increases. The increase in accrued continuing costs was due primarily to changes in the volume of sugar sales and production, differences in the timing of incurring processing costs and the amount of unsold inventory on hand. Interest expense increased slightly due to higher average borrowing levels for short and long-term debt. Non-member activities resulted in the loss of $5.7 million for the three months ended May, 31, 1997 as compared to a loss of $.9 million for the same period last year. The majority of this loss is related to American Crystal's investment in ProGold according to the terms of the financial investment as described above. The remainder of the loss from non-member activities was primarily attributable to lower profits from the sale of beet seed. Net payments to/due members for sugarbeets increased by $19.2 million from $77.8 million for the third quarter of 1996, to $97.0 million for the same period in 1997. This increase is due to higher projected per ton beet payment this year and more tons harvested. 8 LIQUIDITY AND CAPITAL RESOURCES Because American Crystal operates as a cooperative, payments for member delivered sugarbeets, the principal raw material used in producing the sugar and agri-products it sells, are subordinated to all member business expenses. In addition, actual cash payments to members are spread over a period of approximately one year following delivery of their sugarbeet crops to American Crystal and are net of unit retains allocated to them, both of which remain available to meet American Crystal's capital requirements. This member financing arrangement may result in an additional source of liquidity and reduced outside financing requirements in comparison to a similar business operated on a non-cooperative basis. However, because sugar is sold throughout the year (while sugarbeets are processed primarily in the fall and winter) and because substantial amounts of equipment are required for its operations, American Crystal has utilized substantial outside financing on both a seasonal and long-term basis to fund such operations. The majority of such financing has been provided by the St. Paul Bank for Cooperatives ("Bank"). American Crystal has a short-term line of credit with the Bank in 1997 of $240 million. The various loan agreements between the Bank and American Crystal obligate American Crystal to maintain or achieve certain amounts of working capital and certain financial ratios and impose restrictions on American Crystal. As of May 31, 1997, American Crystal was in compliance with its loan agreements. American Crystal anticipates that the funds required to maintain compliance with the banks working capital requirements will be derived from depreciation and unit retains. The primary factor for the changes in American Crystal's financial condition for the nine months ended May 31, 1997 was due to financing higher inventory levels, reducing investing activities and proceeds from stock sales. The cash used in operations of $146.5 million and investing activities of $37.5 million was funded through the cash provided by financing activities and reduction in cash. The net cash provided by financing activities was primarily comprised of the net proceeds from short-term debt of $170.4 million and proceeds from long-term debt of $12.9 million, partially offset by the repayment on long-term debt of $29.2 million and the payment of the unit retains of $8.2 million. Working capital has decreased $11.8 million from $32.1 million at the beginning of the year to $20.3 million as of May 31, 1997 primarily due to increased short-term debt, and higher amounts due growers, partially offset by increased inventories. Capital expenditures for the nine months ended May 31, 1997 were $34.2 million. These capital expenditures are a continuation of American Crystal's strategy of expanding capacity and improving operating efficiencies. American Crystal expects to obtain funds for future capital expenditures derived from depreciation, unit retains and long-term borrowing. American Crystal does not guarantee the debt for United Sugars Corporation or ProGold Limited Liability Company. Under the terms of the ProGold Member Control Agreement, the ProGold Board of Governors can require American Crystal to provide additional capital contributions not to exceed $2.3 million per year. Any additional capital contributions can only be obtained by written consent of American Crystal. American Crystal guarantees debt totaling $3.2 million as of May 31, 1997 for Midwest Agri-Commodities. 9 The growth in the market for refined sugar in the late 1980's and the mid 1990's is a reversal of trends in the 1970's and early 1980's which resulted in a reduced market for refined sugar. During the 1970's and early 1980's, high fructose corn syrup was increasingly used as a replacement for refined sugar in certain food products. (The prime example of this trend was the use of high fructose corn syrup in beverages such as soft drinks.) In addition, non-nutritive sweeteners such as aspartame were developed and used in food products. While high fructose corn syrup and non-nutritive sweeteners constitute a large portion of the overall sweetener market, the Company believes that the recent trend of increased use of refined sugar results from population growth and, more importantly, increased acceptance of the use of sugar as a desirable natural ingredient in a normal diet. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS American Crystal is subject to various lawsuits and claims which arise in the ordinary course of its business. While the results of such litigation and claims cannot be predicted with certainty, management believes the disposition of all such proceedings, individually or in the aggregate, should not have a material adverse effect on the Company's financial position, results of operations or cash flows. Management is not aware of any threatened claims which could result in the commencement of legal proceedings. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the Hillsboro Factory District Meeting on November 12, 1996, an election of two (2) members of the Board of Directors was held. Jerry Bitker received 150 of the 248 votes cast. His three year term expires in December, 1999. Mr. Bitker replaces Thomas Bryl who received 93 of the 248 votes cast for the three-year term. Francis Kritzberger received 102 of the 248 votes cast to replace Michael Warner who resigned in August, 1996, after serving eight (8) years. Mr. Kritzberger's term expires in one year, December, 1997, as he fills a vacant one-year unexpired term. At the Crookston Factory District Meeting on November 12, 1996, an election of a member of the Board of Directors was held. Ronald Reitmeier received 96 of the 182 votes cast. His three year term expires in December, 1999. Mr. Reitmeier replaces Duane Lien whose term expired on December 5, 1996. Mr. Lien was not eligible to stand for re-election due to the provisions of the company By-Laws which prohibit any person from serving more than four (4) consecutive terms. At the Drayton Factory District Meeting on November 11, 1996, an election of a member of the Board of Directors was held. Patrick Mahar who sought re-election received 190 of the 198 votes cast. His three year term expires in December, 1999. At the East Grand Forks Factory District Meeting on November 11, 1996, an election of a member of the Board of Directors was held. G. Terry Stadstad who sought re-election was unanimously re-elected. His three year term expires in December, 1999. 10 At the Moorhead Factory District Meeting on November 13, 1996, an election of a member of the Board of Directors was held. Michael Astrup received 113 of the 214 votes cast. His three year term expires in December, 1999. Mr. Astrup replaces Robert Nyquist who was unable to stand for re-election due to the provisions of the Company By-Laws which prohibit a person from serving more than four (4) consecutive terms as a Director. ITEM 5. OTHER INFORMATION American Crystal has invested $52.1 million as a 46% partner in ProGold Limited Liability Company (ProGold). ProGold operates a corn wet milling plant which produces high-fructose corn syrup (HFCS) sweetener. The plant started operation on October 25, 1996 with saleable product being produced on January 1, 1997. The company originally anticipated ProGold would incur a $28 million loss during its initial year of operation. The current anticipated loss is in the range of $28 million to $32 million. American Crystal's share of the current projected loss is in the range of $12.9 million to $14.7 million. The additional loss is attributable to significantly lower market prices of HFCS, which is partially offset by lower than expected operating expenses. Future changes in the market price of HFCS will significantly affect the future earnings of ProGold. Due to the unpredictable nature of the HFCS market, the future impact of the investment in ProGold on American Crystal's financial condition and results of operations is uncertain although that impact could be adverse. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K No exhibits are included herein. The Company did not file any reports on Form 8-K during the nine months ended May 31, 1997. 11 SIGNATURES Pursuant to the requirement 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. AMERICAN CRYSTAL SUGAR COMPANY ------------------------------ (Registrant) Date: July , 1997 ------------------------------- ---------------------- Samuel S. M. Wai Corporate Controller Duly Authorized Officer and Principal Financial Officer 12 EX-27 2 FDS
5 1,000 9-MOS AUG-31-1997 SEP-01-1996 MAY-31-1997 43 0 78,630 0 302,156 383,690 648,204 412,198 713,368 363,396 160,300 0 33,542 26 132,466 713,368 489,557 489,557 (60,081) 120,884 13,116 0 13,025 355,557 0 355,557 0 0 0 355,557 0 0
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