-----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, PTS1EXHMubtf2GnrMbO5I1FgbykBk1aWp3sM2dJExfi5zmVanluUgnAUyJVLd07t LdP2hrbmmkchwPzkAptt3w== 0001047469-98-001201.txt : 19980116 0001047469-98-001201.hdr.sgml : 19980116 ACCESSION NUMBER: 0001047469-98-001201 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971130 FILED AS OF DATE: 19980115 SROS: NONE 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: SEC FILE NUMBER: 033-83868 FILM NUMBER: 98507518 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 10Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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 NOVEMBER 30, 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 JANUARY 6, 1998 --------------------- --------------- $10 PAR VALUE 2,587 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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 9 SIGNATURES 10 AMERICAN CRYSTAL SUGAR COMPANY Balance Sheets (Unaudited) (Dollars in Thousands) ASSETS
November 30 -------------------------- August 31, 1997 1996 1997 ----------- ----------- ----------- Current Assets: * Cash and Cash Equivalents $ 587 $ 5,034 $ 11,551 Accounts Receivable: Trade 60,611 54,810 60,940 Members 827 965 2,857 Other 4,612 4,332 5,618 Advances to Related Parties 13,786 2,942 15,064 Inventories (Note 2) 421,412 405,877 140,057 Prepaid Expenses 2,418 2,256 2,892 ----------- ----------- ----------- Total Current Assets 504,253 476,216 238,979 ----------- ----------- ----------- Property and Equipment: Land 13,101 12,059 13,101 Buildings and Equipment 639,409 572,446 635,671 Construction-in-Progress 50,552 50,142 43,938 Less: Accumulated Depreciation (420,121) (400,419) (413,211) ----------- ----------- ----------- Net Property and Equipment 282,941 234,228 279,499 ----------- ----------- ----------- Other Assets: Investments in Banks for Cooperatives 14,546 15,707 14,568 Investments in Marketing Cooperatives 1,678 17,075 1,650 Investment in ProGold LLC 36,225 53,336 43,007 Other Assets 5,990 3,073 3,801 ----------- ----------- ----------- Total Other Assets 58,439 89,191 63,026 ----------- ----------- ----------- Total Assets $ 845,633 $ 799,635 $ 581,504 ----------- ----------- ----------- ----------- ----------- -----------
* 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 November 30 -------------------------- August 31, 1997 1996 1997 ----------- ----------- ----------- Current Liabilities: * Short-Term Debt $ 165,000 $ 158,000 $ 67,960 Current Maturities of Long-Term Debt 18,800 14,525 17,800 Accounts Payable: Trade 12,398 3,384 21,538 Other 18,384 23,247 4,359 Accrued Continuing Costs (Note 3) 15,721 25,743 - Other Current Liabilities 14,877 13,257 15,515 Amounts Due Members 181,629 189,949 66,155 ----------- ----------- ----------- Total Current Liabilities 426,809 428,105 193,327 Long-Term Debt, Excluding Current Maturities 185,800 176,394 186,800 Deferred Income Taxes 1,540 - 1,540 Other Liabilities 24,884 22,402 23,909 Commitments and Contingencies - - - ----------- ----------- ----------- Total Liabilities 639,033 626,901 405,576 ----------- ----------- ----------- Members' Investments (Note 4): Preferred Stock 37,747 33,369 33,542 Common Stock 26 24 26 Additional Paid-in Capital 104,849 60,655 64,596 Unit Retains 97,516 89,393 105,450 Pension Liability Adjustment (4,131) (4,518) (4,131) Retained Earnings (29,407) (6,189) (23,555) ----------- ----------- ----------- Total Members' Investments 206,600 172,734 175,928 ----------- ----------- ----------- Total Liabilities and Members' Investments $ 845,633 $ 799,635 $ 581,504 ----------- ----------- ----------- ----------- ----------- -----------
* 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) For the Three Months Ended November 30 -------------------------- 1997 1996 ----------- ----------- Net Revenue $ 179,169 $ 150,018 Cost of Product Sold 14,650 (28,529) ----------- ----------- Gross Proceeds 164,519 178,547 Selling, General & Administrative Expenses 39,584 30,836 Accrued Continuing Costs (Note 3) 15,721 25,743 ----------- ----------- Operating Proceeds 109,214 121,968 ----------- ----------- Other Income (Expenses) Interest Income 386 697 Interest Expense (2,991) (2,910) Other Income (Loss) 55 326 Other Expenses (5,538) (347) ----------- ----------- Other Income (Expense) (8,088) (2,234) ----------- ----------- Proceeds before Income Taxes 101,126 119,734 Income Taxes Provision/(Benefit) - - ----------- ----------- Net Proceeds Resulting from Member and Non-Member Business $ 101,126 $ 119,734 ----------- ----------- ----------- ----------- Distribution of Net Proceeds: Credited/(Charged) to Member's Investments: Non-Member Business Income/(Loss) $ (5,852) $ (708) Unit Retains Declared to Members - - ----------- ----------- Net Credit/(Charge) to Members' Investments (5,852) (708) Payments to/due Members for Sugarbeets, Net of Unit Retains Declared 106,978 120,442 ----------- ----------- Total $ 101,126 $ 119,734 ----------- ----------- ----------- ----------- The Accompanying Notes are an Integral Part of These Financial Statements. 3 AMERICAN CRYSTAL SUGAR COMPANY Statements of Cash Flows (Unaudited) (Dollars In Thousands) Three Months Ended November 30 -------------------------- 1997 1996 ----------- ----------- Cash Used for Operations: Net Proceeds Resulting from Member and Non-Member Business $ 101,126 $ 119,734 Payments to/due Members for Sugarbeets, Including Unit Retains (106,978) (120,442) Add/(Deduct) Noncash Items: Depreciation and Amortization 6,929 8,871 Loss on Investment Activities 5,494 40 (Gain)/loss on the Disposition of Property and Equipment (4) (59) Noncash Portion of Patronage Dividend from Banks for Cooperatives - (551) Deferred Gain Recognition (52) (53) Changes in Certain Elements of Working Capital Accounts Receivable: Trade 329 (3,895) Members 2,030 2,880 Other 1,006 (2,933) Inventories (281,355) (333,200) Prepaid Expenses 474 832 Advances to Related Parties 1,278 7,366 Accounts Payable: Trade (9,140) (13,676) Other 14,025 15,757 Other Current Liabilities 15,081 23,868 Amount Due Growers 115,474 142,831 ----------- ----------- Net Cash Used In Operations (134,283) (152,630) ----------- ----------- Cash Used In Investing Activities: Purchases of Property and Equipment (10,352) (9,044) Proceeds from the Sale of Property and Equipment 4 59 Investment in Banks for Cooperatives 22 20 Investment in Marketing Coops 24 (1,554) Investment in ProGold LLC 1,288 (2,046) Changes in Other Assets (2,207) (6) ----------- ----------- Net Cash Used In Investing Activities (11,221) (12,571) ----------- ----------- Cash Provided by Financing Activities: Net Proceeds (Payments) on Short-Term Debt 97,040 144,357 Proceeds from Long-Term Debt - - Long-Term Debt Repayment - - Changes in Other Long-Term Liabilities 976 765 Changes in Preferred Stock 4,205 1,490 Changes in Common Stock - - Changes in Additional Paid-In Capital 40,253 27,614 Payment of Unit Retains (7,934) (7,798) ----------- ----------- Net Cash Provided by Financing Activities 134,540 166,428 ----------- ----------- Decrease in Cash and Cash Equivalents (10,964) 1,227 Cash and Cash Equivalents Beginning of Period 11,551 3,807 ----------- ----------- Cash and Cash Equivalents End of Period $ 587 $ 5,034 ----------- ----------- ----------- ----------- The Accompanying Notes are an Integral Part of These Financial Statements. 4 AMERICAN CRYSTAL SUGAR COMPANY NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED NOVEMBER 30, 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 three month period ended November 30, 1997 are not necessarily indicative of the results that may be expected for the year ended August 31, 1998. 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, 1997. NOTE 2: INVENTORIES The major components of inventories are as follows (In Thousands): 11/30/97 11/30/96 8/31/97 -------- -------- -------- Refined Sugar, Pulp, Molasses, CSB and Beet Seed $149,433 $137,702 $115,026 Corn - - 3,758 Unprocessed Sugarbeets 251,415 245,343 - Maintenance Parts & Supplies 20,564 22,832 21,273 -------- -------- -------- Total Inventories $421,412 $405,877 $140,057 -------- -------- -------- -------- -------- -------- Sugar, pulp, molasses and CSB inventories are valued at estimated net realizable value. Unprocessed sugarbeets are valued at the estimated net beet payment plus estimated unit retains to be withheld. Maintenance parts & supplies and beet seed inventories are valued the lower of average cost or market. 5 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. NOTE 4: MEMBERS' INVESTMENTS Shares Shares Issued Par Value Authorized & Outstanding --------- ---------- ------------- Preferred Stock: January 5, 1998 $76.77 600,000 497,990 November 30, 1997 $76.77 600,000 491,689 August 31, 1997 $76.77 600,000 436,915 November 30, 1996 $76.77 600,000 434,665 Common Stock: January 5, 1998 $10.00 4,000 2,587 November 30, 1997 $10.00 4,000 2,585 August 31, 1997 $10.00 4,000 2,585 November 30, 1996 $10.00 4,000 2,443 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION FOR THE THREE AND THREE MONTHS ENDED NOVEMBER 30, 1997 AND 1996 RESULTS OF OPERATIONS COMPARISON OF THE THREE MONTHS ENDED NOVEMBER 30, 1997 AND 1996 Revenue for the three months ended November 30, 1997, was $179.2 million, an increase of $29.2 million from 1996. Revenue from total sugar sales increased 18.7 percent reflecting an 19.4 percent increase in hundredweight sold partially offset by a .6 percent decrease in the average selling price per hundredweight. Revenue from pulp sales increased 57.6 percent due to a 58.9 percent increase in the volume of pulp sold partially offset by a .8 percent decrease in the average selling price per ton. Revenue from molasses sales decreased 5.6 percent due to a 12.3 percent decrease in the average selling price per ton partially offset by a 7.7 percent increase in the volume of molasses sold. Revenue from the sales of Concentrated Separated By-Produce (CSB), a by-product of the molasses desugarization process, increased 46.2 percent due to a 33 percent increase in sales volume and a 9.9 percent increase in the average selling price per ton. Cost of product sold, exclusive of payments for sugarbeets, increased $43.2 million. Direct processing costs for sugar and pulp decreased .9 percent. Fixed and committed expenses decreased 9.6 percent reflecting lower maintenance costs. Changes in product inventory levels between 1997 and 1996 affected the cost of product sold unfavorably by $61.1 million. The cost associated with sugar purchased to meet customer needs was up $1.9 million due to the increase in purchased sugar activity in distant geographic markets. Selling expenses increased $8 million due primarily to the increase in the volume of products sold. General and Administrative expenses increased $.6 million also due to the increased software amortization and depreciation expense. The decrease in accrued continuing costs was due primarily to changes in sugar sales and production and the differences in the timing of incurring processing costs. Interest expense increased slightly due to higher average borrowing levels for short and long-term debt this year. Non-member activities resulted in a loss of $5.9 million for the three months ended November 30, 1997 as compared to a loss of $.75 million for the same period last year. The majority of this loss is related to American Crystal's investment in ProGold Limited Liability Company. 7 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 November 30, 1997, American Crystal was in compliance with its loan agreements. The primary factor for the changes in American Crystal's financial condition for the three months ended November 30, 1997 was due to the 1997/1998 sugarbeet processing campaign. The cash used in operations of $134.3 million and investing activities of $11.2 million, was funded through the cash provided by financing activities. The net cash provided by financing activities was primarily comprised of the net proceeds from short-term debt of $97 million and proceeds from sale of stock of $44.5 million, partially offset by the payment of the unit retains of $7.9 million. Working capital has increased $31.8 million from $45.7 million at the beginning of the year to $77.4 million as of November 30, 1997 primarily due to increased inventories, partially offset by increased short term and current maturities of long term debt. Working capital for the three months ended November 30, 1997 was $77.4 million, an increase of $29.3 million compared to $48.1 million in the same period in 1996. Capital expenditures for the three months ended November 30, 1997 were $10.4 million. American Crystal anticipates that the funds necessary for the Bank's working capital requirements and future capital expenditures will be derived from depreciation, unit retains and long-term borrowing. 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. 8 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 10, 1997, an election of a Board of Director was held. Francis Kritzberger who sought re-election received 98 of the 98 votes cast. His three year term expires in December, 2000. At the Drayton Factory District Meeting on November 11, 1997, an election of a Board of Director was held. Wayne Langen who sought re-election received 235 of the 235 votes cast. His three year term expires in December, 2000. At the East Grand Forks Factory District Meeting on November 11, 1997, an election of a Board of Director was held. Aime Dufault who sought re-election received 137 of the 137 votes cast. His three year term expires in December, 2000. At the Crookston Factory District Meeting on November 12, 1997, an election of a Board of Director was held. Lonn Kiel who sought re-election received 153 of the 153 votes cast. His three year term expires in December, 2000. At the Moorhead Factory District Meeting on November 14, 1997, an election of a Board of Director was held. Jay Nord received 96 votes and Richard Borgen received 104 of the 200 votes cast. Richard Borgen's three year term expires in December, 2000. Mr. Borgen replaces Paul Borgen 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 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 three months ended November 30, 1997. 9 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: JANUARY 3, 1997 /s/ Samuel S. M. Wai ------------------------------ ------------------------- SAMUEL S. M. WAI CORPORATE CONTROLLER DULY AUTHORIZED OFFICER 10 EX-27 2 EXHIBIT 27 (FDS)
5 1,000 3-MOS AUG-31-1998 SEP-01-1997 NOV-30-1997 587 0 79,836 0 421,412 504,253 703,062 420,121 845,633 426,809 185,800 0 37,747 26 168,827 845,633 179,169 179,169 14,650 14,650 5,097 0 2,991 101,126 0 101,126 0 0 0 101,126 0 0
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