-----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, JtfhMntLb4KwMbzQ7apTFL1upQTyW8y3liqyz2BuQ1znwRL5QkUOIlEhoKDCt895 MXy1ordtjL4WNgq2r48b9A== 0000910650-95-000039.txt : 19950928 0000910650-95-000039.hdr.sgml : 19950927 ACCESSION NUMBER: 0000910650-95-000039 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950811 FILED AS OF DATE: 19950925 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WSMP INC CENTRAL INDEX KEY: 0000067494 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 560945643 STATE OF INCORPORATION: NC FISCAL YEAR END: 0222 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07277 FILM NUMBER: 95575737 BUSINESS ADDRESS: STREET 1: PO BOX 399 STREET 2: WSMP DR CITY: CLAREMONT STATE: NC ZIP: 28610 BUSINESS PHONE: 7044597626 MAIL ADDRESS: STREET 1: PO BOX 399 CITY: CLAREMONT STATE: NC ZIP: 28610 FORMER COMPANY: FORMER CONFORMED NAME: WESTERN STEER MOM N POPS INC DATE OF NAME CHANGE: 19880719 FORMER COMPANY: FORMER CONFORMED NAME: MOM N POPS HAM HOUSE INC DATE OF NAME CHANGE: 19810827 0000910650-95-000039.txt : 19950927 0000910650-95-000039.hdr.sgml : 19950927 ACCESSION NUMBER: 0000910650-95-000039 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950811 FILED AS OF DATE: 19950925 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WSMP INC CENTRAL INDEX KEY: 0000067494 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 560945643 STATE OF INCORPORATION: NC FISCAL YEAR END: 0222 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07277 FILM NUMBER: 95575737 BUSINESS ADDRESS: STREET 1: PO BOX 399 STREET 2: WSMP DR CITY: CLAREMONT STATE: NC ZIP: 28610 BUSINESS PHONE: 7044597626 MAIL ADDRESS: STREET 1: PO BOX 399 CITY: CLAREMONT STATE: NC ZIP: 28610 FORMER COMPANY: FORMER CONFORMED NAME: WESTERN STEER MOM N POPS INC DATE OF NAME CHANGE: 19880719 FORMER COMPANY: FORMER CONFORMED NAME: MOM N POPS HAM HOUSE INC DATE OF NAME CHANGE: 19810827 10-Q 1 SECOND QUARTER 10-Q File No. 0-7277 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL QUARTER ENDED AUGUST 11, 1995 WSMP, INC. Incorporated in North Carolina CLAREMONT, NORTH CAROLINA 28610 56-0945643 (704) 459 - 7626 (I.R.S. Employer Identification No.) WSMP, Inc. 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 has been subject to such filing requirements for the past 90 days. The number of shares of WSMP, Inc. Common Stock outstanding as of September 20, 1995 was 2,760,338. WSMP, INC. AND SUBSIDIARIES INDEX Part I. Financial Information: ------------------------------------------------ Page No. --------- Item 1. Financial Statements Consolidated Condensed Balance Sheets - August 11, 1995 and February 24, 1995 ...............................1-2 Consolidated Condensed Statements of Operations and Retained Earnings - Three Months Ended August 11, 1995 and August 12, 1994 and Six Months Ended August 11, 1995 and August 12, 1994 .................................3-4 Consolidated Condensed Statements of Cash Flows - Six Months Ended August 11, 1995 and August 12, 1994 ......................................................5 Notes to Consolidated Condensed Financial Statements ...........................................................6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ..........................................................8-10 Part II. Other Information: -------------------------------------------------- Item 4. Submission of Matters of a Vote of Security Holders ...........11 Item 6. Exhibits and Reports on Form 8-K ..............................11 Signatures .............................................................12 Index to Exhibits ......................................................13 Exhibit 11 - Computation of Earnings (Loss) per Common and Common Equivalent Share ..................................14 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS WSMP, INC. AND SUBSIDIARIES --------------------------------------------------- Consolidated Condensed Balance Sheets (Unaudited) August 11, February 24, 1995 1995 ------------- ------------- ASSETS - ------- Current assets: Cash and cash equivalents $ 1,522,949 $ 940,120 Marketable equity securities 136,535 120,564 Accounts receivable and current portion of notes receivable, net: Trade and other 4,240,385 4,809,950 Related party 1,109,597 1,178,213 Inventories 4,748,464 5,126,335 Income taxes refundable, prepaid expenses and other 837,597 238,657 Deferred income taxes 255,372 259,821 ------------ ------------- Total current assets 12,850,899 12,673,660 ------------ ------------- Property, plant and equipment, net 25,547,325 27,157,884 ------------ ------------- Other assets: Properties held for sale 2,539,166 3,322,372 Excess of cost over fair value of net assets of businesses acquired, net 680,702 696,456 Noncurrent notes receivable 582,594 368,181 Noncurrent related party notes receivable 592,058 833,110 Investment in affiliates 1,126,606 742,633 Other 1,013,567 927,105 ------------ ------------- Total other assets 6,534,693 6,889,857 ------------ ------------- Total assets $ 44,932,917 $ 46,721,401 ============ ============= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities: Notes payable $ 4,000,000 $ 3,000,000 Current installments of long-term debt 2,711,879 2,939,844 Trade accounts payable 2,437,504 3,016,776 Income taxes payable 1,737 46,737 Other accrued liabilities 2,685,307 2,766,415 ------------ ------------- Total current liabilities 11,836,427 11,769,772 Deferred franchise fees 5,000 30,000 Deferred income taxes 1,749,957 1,749,957 Long-term debt, excluding current installments 13,907,722 15,533,554 ------------ ------------- Total liabilities 27,499,106 29,083,283 ------------ ------------- Commitments and contingencies Shareholders' equity: Preferred stock- par value $.10, authorized 2,500,000 shares; no shares issued Common stock - par value $1, authorized 10,000,000 shares; issued 2,710,338 shares at August 11, 1995 and 2,660,338 shares at February 24, 1995 2,710,338 2,660,338 Capital in excess of par value 6,484,347 6,389,347 Unrealized gain/(loss) on securities available for sale, net of deferred income taxes of $(1,098) at August 11, 1995 and $3,351 at February 24, 1995 1,708 (5,214) Retained earnings 8,237,418 8,593,647 ------------ ------------ Total shareholders' equity 17,433,811 17,638,118 ------------ ------------ Total liabilities and shareholders' equity $ 44,932,917 $ 46,721,401 ============ ============ WSMP, INC. AND SUBSIDIARIES --------------------------------------------------- Consolidated Condensed Statements of Operations and Retained Earnings Three Months Ended August 11, 1995 and August 12, 1994 (Unaudited)
1995 1994 ------ ------ Operating revenues: Food sales $ 18,440,896 $ 21,088,165 Franchise, royalty and other fees (includes related party transactions totaling $275,681 in 1995 and $242,378 in 1994) 716,910 732,961 ------------- ------------- Total operating revenues 19,157,806 21,821,126 ------------- ------------- Costs and expenses: Cost of goods sold (includes related party transactions totaling $100,826 in 1995 and $123,719 in 1994) 13,503,636 15,235,903 Operating expenses (includes related party transactions totaling $100,373 in 1995 and $170,656 in 1994) 3,085,970 3,353,755 Selling, general and administrative expenses (includes related party transactions totaling $645,602 in 1995 and $635,701 in 1994) 1,983,017 1,945,187 Depreciation and amortization 621,865 656,620 ------------- ------------- Total costs and expenses 19,194,488 21,191,465 ------------- ------------- Operating income (loss) (36,682) 629,661 ------------- ------------- Other income (expense): Net loss on dispositions and write-downs of assets (includes gain on sale of assets to related parties totaling $128,320 in 1994) (51,046) (31,447) Other income (including interest) (includes related party transactions totaling $45,145 in 1995 and $49,793 in 1994) 149,751 323,378 Interest expense (455,772) (446,168) Other expense (includes related party transactions totaling $19,246 in 1995 and $33,488 in 1994) (247,845) (172,423) -------------- ------------- Net other income (expense) (604,912) (326,660) -------------- ------------- Earnings (loss) before income taxes (641,594) 303,001 Provision for income taxes (benefit) (277,706) 97,001 -------------- ------------- Net earnings (loss) $ (363,888) $ 206,000 ============== ============= Retained earnings: Balance at beginning of period $ 8,601,306 $ 8,391,604 Net earnings (loss) (363,888) 206,000 ------------- ------------- Balance at end of period $ 8,237,418 $ 8,597,604 ============= ============= Net earnings (loss) per common and common equivalent share $ (.13) $ .07 ============= ============== See accompanying notes to unaudited consolidated condensed financial statements.
WSMP, INC. AND SUBSIDIARIES --------------------------------------------------- Consolidated Condensed Statements of Operations and Retained Earnings Six Months Ended August 11, 1995 and August 12, 1994 (Unaudited)
1995 1994 ------- ------- Operating revenues: Food sales $ 36,041,660 $ 41,507,461 Franchise, royalty and other fees (includes related party transactions totaling $531,080 in 1995 and $486,362 in 1994) 1,428,679 1,413,449 ------------- ------------- Total operating revenues 37,470,339 42,920,910 ------------- ------------- Costs and expenses: Cost of goods sold (includes related party transactions totaling $204,116 in 1995 and $247,677 in 1994) 25,878,907 29,759,090 Operating expenses (includes related party transactions totaling $302,782 in 1995 and $395,690 in 1994) 6,156,652 6,837,278 Selling, general and administrative expenses (includes related party transactions totaling $1,150,643 in 1995 and $1,219,042 in 1994) 3,837,947 3,912,576 Depreciation and amortization 1,232,914 1,353,407 ------------- ------------- Total costs and expenses 37,106,420 41,862,351 ------------- ------------- Operating income 363,919 1,058,559 ------------- ------------- Other income (expense): Net gain (loss) on dispositions and write-downs of assets (includes gain on sale of assets to related parties totaling $128,320 in 1994) (51,506) 536,064 Other income (including interest) (includes related party transactions totaling $94,955 in 1995 and $104,552 in 1994) 406,686 608,931 Interest expense (941,061) (905,126) Other expense (includes related party transactions totaling $43,427 in 1995 and $68,737 in 1994) (408,531) (368,919) ------------- ------------- Net other income (expense) (994,412) (129,050) ------------- -------------- Earnings (loss) before income taxes (630,493) 929,509 Provision for income taxes (benefit) (274,264) 362,509 ------------- -------------- Net earnings (loss) $ (356,229) $ 567,000 ============= ============== Retained earnings: Balance at beginning of period $ 8,593,647 $ 8,030,604 Net earnings (loss) (356,229) 567,000 ------------ -------------- Balance at end of period $ 8,237,418 $ 8,597,604 ============ ============== Net earnings (loss) per common and common equivalent share $ (.13) $ .20 ============ ============== See accompanying notes to unaudited consolidated condensed financial statements.
WSMP, INC. AND SUBSIDIARIES ---------------------------------------------------- Consolidated Condensed Statements of Cash Flows Six Months Ended August 11, 1995 and August 12, 1994 (Unaudited)
1995 1994 --------- --------- Cash flows from operating activities: Net earnings (loss) $ (356,229) $ 567,000 ------------- -------------- Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 1,232,913 1,353,407 Depreciation of properties leased to others 139,386 191,711 Provision for losses on receivables 21,107 140,000 Net (gain)/loss on disposition and writedowns of assets 51,506 (536,064) Other non-cash items 58,009 (353,658) Changes in operating assets and liabilities (net of effects from purchase of restaurant companies) providing (using) cash: Receivables 118,748 (389,801) Inventories 377,871 (1,098,899) Income taxes refundable, prepaid expenses and other (598,940) 136,365 Trade accounts payable and other accrued liabilities (705,380) (316,147) ------------- -------------- Total adjustments 695,220 (873,086) ------------- -------------- Net cash provided by (used in) operating activities 338,991 (306,086) ------------- -------------- Cash flows from investing activities: Decrease (increase) in marketable equity securities (4,599) 3,199 Proceeds from sales of assets to related parties 623,734 Proceeds from sales of assets to others 1,377,775 1,849,188 Decrease in related party notes receivables 285,675 269,576 Decrease in other notes receivable 352,146 17,646 Deposits, net of refunds (169,829) (61,892) Capital expenditures to related parties (159,822) (65,749) Capital expenditures-others (344,739) (318,949) Other investing activities (383,972) (50,500) ------------- -------------- Net cash provided by investing activities 952,635 2,266,253 ------------- -------------- Cash flows from financing activities: Principal payments on long-term debt (1,853,797) (1,801,606) Proceeds from exercise of stock options 145,000 Net proceeds (repayments) under short-term borrowing agreements 1,000,000 (375,000) ------------- -------------- Net cash used in financing activities (708,797) (2,176,606) ------------- -------------- Net increase (decrease) in cash and cash equivalents 582,829 (216,439) Cash and cash equivalents at beginning of period 940,120 1,235,089 ------------- -------------- Cash and cash equivalents at end of period $ 1,522,949 $ 1,018,650 ============= ============== See accompanying notes to unaudited consolidated condensed financial statements.
WSMP, INC. AND SUBSIDIARIES -------------------------------------------------- Notes to Consolidated Condensed Financial Statements (Unaudited) 1.In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of August 11, 1995 and February 24, 1995 and the results of operations and the cash flows for the interim periods ended August 11, 1995 and August 12, 1994. 2.The results of operations for the interim periods ended August 11, 1995 and August 12, 1994 are not necessarily indicative of the results to be expected for the full year. 3.Financial statements for fiscal 1995 periods have been reclassified, where applicable, to conform to financial statement presentation used in fiscal 1996 periods. 4.Earnings per share are based on the weighted average number of common shares and dilutive common equivalent shares outstanding during each fiscal period. Common equivalent shares relate to outstanding stock options. The weighted average number of shares used in the calculation are 2,699,214 and 2,834,635 for the six months ended in 1995 and 1994, respectively. The weighted average number of shares used in the calculation for the second fiscal quarter in 1996 and 1995, are 2,710,338 and 2,829,459, respectively. Per share amounts for fiscal 1995 periods retroactively reflect a five-for-four stock split, effected in the form of a stock dividend declared on February 22, 1995. 5.The Company reports the results of its operations using a 52-53 week basis. In line with this, reports for interim fiscal periods are prepared on the basis of 12-12-12-16 week periods. The Company follows this policy consistently. 6.A summary of inventories entering into cost of goods sold is:
August 11, February 24, August 12, February 25, 1995 1995 1994 1994 ------------ ------------ ------------ ------------ Hams in curing process $ 1,967,960 $ 1,748,375 $ 1,813,832 $ 1,729,997 Other food (includes cured hams) 1,467,272 2,104,940 2,482,142 1,357,837 Supplies 1,313,232 1,273,020 1,292,378 1,401,619 ------------ ------------ ------------ ------------ Totals $ 4,748,464 $ 5,126,335 $ 5,588,352 $ 4,489,453 ============ ============ ============ ============
7.The Company has certain debt obligations that contain restrictive covenants including a restriction on payment of cash dividends. The Company was either in compliance with these covenants at August 11, 1995, or had obtained necessary waivers for noncompliance. There are no consolidated retained earnings available for payment of dividends. 8.The Company has guaranteed a loan obligation of one of its franchisees in an amount not to exceed $322,000. The loan is secured by certain restaurant equipment purchased by the franchisee. Effective December 1, 1993, the Company entered into a three year endorsement with Richard Childress Racing Enterprises, Inc. and Dale Earnhardt, Inc. The agreement calls for total payments of $1,200,000 over the three year period. As of August 11, 1995, remaining payments under this agreement are $612,500. 9. Supplemental cash flow disclosures - cash paid during the period for: Six Months Ended ---------------------------- August 11, August 12, 1995 1994 ------------ ------------ Interest $ 934,054 $ 927,420 ============ ============ Income taxes $ 155,000 $ 175,500 ============ ============ 10. Stock options for 50,000 shares were exercised during the six month period ended August 11, 1995 and resulted in cash proceeds totaling $145,000 during the period. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, percentages of operating revenue represented by certain items reflected in the financial statements:
Relationship to Total Operating Revenue ------------------------------------------------------- Three Months Ended Six Months Ended ------------------------ ------------------------- August 11, August 12, August 11, August 12, 1995 1994 1995 1994 ---------- ---------- ---------- ---------- Food processing sales 62.5 65.1 61.4 64.0 Restaurant food sales 33.8% 31.5% 34.8% 32.7% Franchise and royalty fees 3.7 3.4 3.8 3.3 ---------- ---------- ---------- ---------- Total operating revenue 100.0 100.0 100.0 100.0 Cost of goods sold 70.5 69.8 69.1 69.3 Operating expenses 16.1 15.4 16.4 15.9 Selling, general and administrative expenses 10.3 8.9 10.2 9.1 Depreciation and amortization 3.3 3.0 3.3 3.2 ---------- ---------- ---------- ---------- Total operating income (loss) (.2) 2.9 1.0 2.5 Other income (expenses) (3.2) (1.5) (2.7) (.3) ---------- ---------- ---------- ---------- Earnings (loss) before income taxes (3.4) 1.4 (1.7) 2.2 Provision for income taxes (benefit) (1.5) (.4) (.7) .9 ---------- ---------- ---------- ---------- Net earnings (loss) (1.9%) 1.0% (1.0%) 1.3% ========== ========== ========== ==========
The Company operates in three principal lines of business. Segment information is presented as follows:
Three Months Ended Six Months Ended -------------------------------- -------------------------------- August 11, 1995 August 12, 1994 August 11, 1995 August 12, 1994 --------------- --------------- --------------- --------------- Operating Revenues: Food processing $ 11,967,121 $ 14,195,139 $ 23,001,356 $ 27,482,988 Restaurant operations 6,473,775 6,893,026 13,040,304 14,024,473 Restaurant franchising 716,910 732,961 1,428,679 1,413,449 ------------- ------------- ------------- ------------- Total operating revenues $ 19,157,806 $ 21,821,126 $ 37,470,339 $ 42,920,910 ============= ============= ============= ============= Operating Profits: Food processing $ 210,191 $ 844,750 $ 598,608 $ 1,640,388 Restaurant operations 264,952 534,349 796,996 835,889 Restaurant franchising 521,588 380,644 977,209 759,541 ------------- ------------- -------------- ------------- 996,731 1,759,743 2,372,813 3,235,818 Corporate expenses (1,033,413) (1,130,082) (2,008,894) (2,177,259) Other income (expense) (149,140) 119,508 (53,351) 776,076 Interest expense (455,772) (446,168) (941,061) (905,126) ------------- ------------- -------------- ------------- Earnings (loss) before income taxes $ (641,594) $ 303,001 $ (630,493) $ 929,509 ============= ============= ============== =============
RESULTS OF OPERATIONS - --------------------- Second Quarter Ended August 11, 1995 Compared With Second Quarter Ended August 12, 1994 Consolidated food sales revenue decreased from $21,088,165 in the second quarter of fiscal 1995 to $18,440,896 in the second quarter of fiscal 1996. Approximately $2.2 million of the decrease occurred in the food processing segment and reflects a $2.7 million decrease in sales in the bakery division offset by a $500,000 increase in sales of the ham curing division. As previously discussed in the first quarter, sales in the bakery division have declined due to the largest customer of the bakery repositioning itself in certain of its own markets in late fiscal 1995 and, as a result, discontinuing a line of product previously purchased from the Company. Although the customer has developed a well defined marketing program to replace this volume, it now appears that the replacement of this volume will continue into the fourth quarter of the current fiscal year. Additionally, the restaurant segment accounted for approximately $419,000 of the decrease in consolidated food sales. Approximately $161,000 of this decrease resulted from the closing of a store during the third quarter of fiscal 1995. The remaining decrease of $258,000 reflects a decrease in same store sales between the quarters ended August 11, 1995 and August 12, 1994. Franchise, royalty and other fees in the second quarter of fiscal 1996 remained consistent with the comparable quarter in fiscal 1995. Although nine franchised Western Steer restaurants closed between August 12, 1994 and August 11, 1995, the impact was offset by the opening of two Bennett's Smokehouse and Saloon franchises, two Prime Sirloin franchises, and one Western Steer franchise during the same period. The Company experienced an operating loss of $36,682 during the quarter ended August 11, 1995, compared to operating income of $629,661 in the second quarter of fiscal 1995. This decrease is the result of declines in operating profits in the food processing and the restaurant operations segments, offset by increased profitability in restaurant franchising and reductions in corporate expenses. Total operating profit in the food processing segment decreased $634,559 during the second quarter of fiscal 1996 compared to the same period in fiscal 1995. Approximately $335,000 of the decrease is due to the decline in sales in the bakery division. The remaining decrease of $300,000 occurred in the ham curing division as a result of overall decreases in margins. The restaurant segment also experienced a decrease in operating profits from $534,349 for the quarter ended August 12, 1994 to $264,952 for the quarter ended August 11, 1995. This decline is attributed primarily to the decrease in same store sales discussed above as well as additional advertising costs of approximately $189,000 incurred during the current quarter. Operating profits in the restaurant franchising segment increased $140,944 due to improved management of operating costs as well as improvements in collections of royalties. Six Months Ended August 11, 1995 Compared With Six Months Ended August 12, 1994 Consolidated food sales revenue decreased $5.5 million, or 13.2%, to $36.0 million during the first six months of fiscal 1996, compared to the first six months of fiscal 1995. The food processing segment showed a decrease of $4.5 million compared with the first half of fiscal 1995. This decrease is the result of a decrease of approximately $5 million in the bakery division due to the same factors discussed in the quarter comparison above. Offsetting the decrease in sales from the bakery division was an increase of approximately $500,000 in sales in the ham curing division. The remaining decrease in food sales relates to the restaurant segment which experienced a decline in revenues totaling $1.0 million. Approximately $598,000 of the decrease resulted from the closing of four stores since the beginning of the prior year. The remaining decrease of $402,000 is attributable to decreases in same store sales. Franchise, royalty and other fees for the first half of fiscal 1996 showed little change from the corresponding period of fiscal 1995. As discussed in the quarter comparison above, decreases in royalty and other fees brought about by the closing of franchised restaurants have been offset by new franchise restaurants opened during the same period. Operating income decreased from $1,058,559 in the first half of fiscal 1995 to $363,919 in the first half of fiscal 1996. This decrease is the result of a decline in operating income in the food processing segment, offset by increased profitability in the franchising segment and by reductions in corporate costs. The food processing segment experienced a total decrease in operating profit of $1 million during the six month period. Approximately $610,000 of this decrease relates to the bakery division and corresponds with a decline in food sales during the six months ended August 11, 1995 compared to the corresponding period of the preceding year. The remaining decrease of $390,000 occurred in the ham curing division as a result of lower margins. Offsetting this decrease is an increase of $217,000 in operating income from restaurant franchising, which is the result of the factors discussed above in the quarter comparison. LIQUIDITY AND CAPITAL RESOURCES - -------------------------------- The Company had total working capital of $1,014,000 at August 11, 1995, up slightly from $904,000 at February 24, 1995. Management anticipates an increase in the amount of working capital generated by operations during the coming two quarters as bakery sales continue to rebuild. In addition, the sale of excess real estate is expected to generate approximately $3 million during the third and fourth quarters. Total cash and cash equivalents increased $583,000 during the six month period ended August 11, 1995. Sales of excess assets generated $1.4 million of cash proceeds during the period and contributed to this increase. The Company is currently seeking to refinance amounts outstanding under its Senior Notes and short-term secured note on an intermediate to long-term basis through a private placement of debt. The Company has $10.6 million in Senior Note obligations with two major life insurance companies. The agreements provide for monthly interest payments and semi-annual principal payments of $769,230 on October 1 and April 1. The Senior Notes mature on October 1, 1996 with a balloon payment of $9.1 million, and as such will become a current liability on October 1, 1995. Management is using its best efforts to effect a one year extension in the maturity of the Senior Notes. However, management expects to accomplish the refinancing prior to the original October 1, 1996 maturity date. PART II. OTHER INFORMATION ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The annual meeting of Shareholders of WSMP, Inc. was held on June 22, 1995. The two matters submitted to the vote of the shareholders were the election of directors and a proposal to approve a renewal and extension of the Management Services Agreement with HERTH Management, Inc. The following directors were elected at the annual meeting: Richard F. Howard E. Edwin Bradford James M. Templeton The following directors continued in office after this meeting: James C. Richardson, Jr. William R. McDonald III Bobby G. Holman Miles M. Aldridge Richard F. Hendrickson Lewis C. Lanier The Board of Directors, unanimously approved and voted to recommend to the Shareholders the ratification of a renewal and extension of the Management Services Agreement with HERTH Management, Inc. The Agreement was approved by the Shareholders of WSMP, Inc. at this annual meeting. ITEM 6 - EXHIBITS AND REPORTS ON FORM 8 - K (a) Exhibits See Index to Exhibits (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended August 11, 1995. 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. WSMP, INC. Date: 9/21/95 By: James C. Richardson, Jr. ---------- -------------------------------------------- James C. Richardson, Jr. (President and Chief Executive Officer) Date: 9/21/95 By: Matthew V. Hollifield ---------- -------------------------------------------- Matthew V. Hollifield (Vice President of Accounting and Chief Accounting Officer) INDEX TO EXHIBITS For inclusion in Quarterly Report on Form 10-Q Quarter Ended August 11, 1995 Exhibit No. Page No. - ----------- ---------- 11 Computation of Earnings (Loss) Per Common and Common Equivalent Share 14 EX-11 2 EARNINGS PER SHARE Exhibit 11 ----------- WSMP, INC. AND SUBSIDIARIES ---------------------------------------------------- Computation of Earnings (Loss) Per Common and Common Equivalent Share
Three Months Ended Six Months Ended ----------------------------- --------------------------- August 11, August 12, August 11, August 12, 1995 1994 1995 1994 ---------- ----------- ---------- ----------- Earnings (loss) computations: Net earnings (loss) $ (363,888) $ 206,000 $ (356,229) $ 567,000 ============ ============ =========== =========== Weighted average shares computation: Actual outstanding shares at beginning of period 2,710,338 2,666,861 2,660,338 2,666,861 Add (deduct) weighted average shares applicable to: Common stock issued 38,876 Common stock options outstanding 162,598 167,774 ------------ ------------ ----------- ----------- Weighted average shares as adjusted 2,710,338 2,829,459 2,699,214 2,834,635 ============ ============ =========== =========== Earnings (loss) per common and common equivalent share $(.13) $ .07 $ (.13) $ .20 ============ =========== =========== ===========
EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the 1995 2nd quarter 10-Q for WSMP, Inc. and is qualified in its entirety by reference to such 10-Q. 6-MOS FEB-23-1996 FEB-25-1995 AUG-11-1995 1,522,949 136,535 3,345,179 15,000 4,748,464 12,850,899 45,437,553 19,890,228 44,932,917 11,836,427 16,619,601 2,710,338 0 0 14,723,473 44,932,917 36,041,660 37,470,339 25,878,907 25,878,907 6,156,652 21,107 941,061 (630,493) (274,264) (356,229) 0 0 0 (356,229) (.13) 0
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