-----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, H6f+yglvKJLnYAAsaAWsSq2krfaWz9tpBFmC3Ty9aUS24TkyDjIBwtbB3X08FLg9 NB9uKTsXyfd/BKpN55thqw== 0000891020-99-000660.txt : 19990413 0000891020-99-000660.hdr.sgml : 19990413 ACCESSION NUMBER: 0000891020-99-000660 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990228 FILED AS OF DATE: 19990412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENFORD CORP CENTRAL INDEX KEY: 0000739608 STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [2040] IRS NUMBER: 911221360 STATE OF INCORPORATION: WA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-11488 FILM NUMBER: 99591884 BUSINESS ADDRESS: STREET 1: 777 108TH N E STE 2390 CITY: BELLEVUE STATE: WA ZIP: 98004-5193 BUSINESS PHONE: 4254626000 MAIL ADDRESS: STREET 1: 777 108TH N E STE 2390 CITY: BELLEVUE STATE: WA ZIP: 98009 FORMER COMPANY: FORMER CONFORMED NAME: PENWEST LTD DATE OF NAME CHANGE: 19920703 10-Q 1 FORM 10-Q FOR THE QUARTER ENDED FEBRUARY 28, 1999 1 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 quarterly period ended February 28, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________________ to _______________________ Commission File No. 0-11488 PENFORD CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Washington 91-1221360 ------------------------ ------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 777-108th Avenue N.E., Suite 2390, Bellevue, WA 98004-5193 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (425) 462-6000 Indicate by a 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 (or for such shorter period that the registrant was required to file such reports), 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 April 7, 1999. Class Outstanding ----------------------------- ----------- Common stock, par value $1.00 7,441,754 2 PENFORD CORPORATION AND SUBSIDIARIES INDEX
Page No. -------- PART I - FINANCIAL INFORMATION Item 1 - Financial Statements Condensed Consolidated Balance Sheets February 28, 1999 and August 31, 1998 3 Condensed Consolidated Statements of Income Three and Six Months Ended February 28, 1999 and February 28, 1998 4 Condensed Consolidated Statements of Cash Flow Six Months Ended February 28, 1999 and February 28, 1998 5 Notes to Condensed Consolidated Financial Statements 6-7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 8-11 Item 3 - Quantitative and Qualitative Disclosures About Market Risk 12 PART II - OTHER INFORMATION Item 1 - Legal Proceedings 13 Item 2 - Changes in Securities 13 Item 3 - Defaults Upon Senior Securities 13 Item 4 - Submission of Matters to a Vote of Security Holders 13 Item 5 - Other Information 13 Item 6 - Exhibits and Reports on Form 8-K 14-16 SIGNATURES 17
2 3 PART I - FINANCIAL INFORMATION Item 1 Financial Statements PENFORD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) A S S E T S
February 28, 1999 August 31, 1998 ----------------- --------------- Current assets: Cash and cash equivalents $1,172 $3,200 Trade accounts receivable 19,901 20,957 Inventories: Raw materials and other 5,236 7,161 Work in progress 665 900 Finished goods 7,766 8,091 -------- -------- 13,667 16,152 Prepaid expenses and other 4,359 5,424 -------- -------- Total current assets 39,099 45,733 Net property, plant and equipment 110,364 107,049 Deferred income taxes 13,814 13,781 Restricted cash value of life insurance 11,392 11,371 Other assets 5,367 5,274 -------- -------- Total assets $180,036 $183,208 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $9,481 $8,509 Accrued liabilities 6,877 5,596 Current portion of long-term debt 3,697 13,697 Accrued liabilities, discontinued operations -- 1,761 -------- -------- Total current liabilities 20,055 29,563 Long-term debt 62,571 60,199 Other postretirement benefits 10,474 10,383 Deferred income taxes 21,698 21,882 Other liabilities 7,660 7,186 Shareholders' equity: Common stock 9,131 9,130 Additional paid-in capital 20,058 20,223 Retained earnings 57,462 54,644 Treasury stock (28,860) (29,647) Note receivable from Savings and Stock Ownership Plan (213) (355) -------- -------- Total shareholders' equity 57,578 53,995 -------- -------- Total liabilities and shareholders' equity $180,036 $183,208 ======== ========
See accompanying notes to condensed consolidated financial statements. 3 4 PENFORD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands except share and per share data)
Three Months Six Months Ended February 28 Ended February 28 --------------------------- --------------------------- 1999 1998 1999 1998 --------- --------- --------- --------- Sales $37,161 $40,723 $75,932 $82,541 Cost of sales 28,273 29,326 56,411 59,733 --------- --------- --------- --------- Gross margin 8,888 11,397 19,521 22,808 Operating expenses 5,635 6,500 11,309 13,293 --------- --------- --------- --------- Income from operations 3,253 4,897 8,212 9,515 Interest expense, net (1,316) (1,470) (2,744) (2,879) --------- --------- --------- --------- Income from continuing operations before income taxes 1,937 3,427 5,468 6,636 Income taxes 678 1,203 1,914 2,317 --------- --------- --------- --------- Income from continuing operations 1,259 2,224 3,554 4,319 Loss from discontinued operations -- (1,209) -- (2,807) --------- --------- --------- --------- Net income $1,259 $1,015 $3,554 $1,512 ========= ========= ========= ========= Weighted average common shares and equivalents outstanding 7,851,974 7,519,637 7,800,582 7,525,064 Earnings per common share from continuing operations; Basic $0.17 $0.30 $0.48 $0.59 ========= ========= ========= ========= Diluted $0.16 $0.30 $0.46 $0.57 ========= ========= ========= ========= Earnings per common share; Basic $0.17 $0.14 $0.48 $0.21 ========= ========= ========= ========= Diluted $0.16 $0.13 $0.46 $0.20 ========= ========= ========= ========= Dividends declared per common share $0.05 $0.05 $0.10 $0.10 ========= ========= ========= =========
See accompanying notes to condensed consolidated financial statements. 4 5 PENFORD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Dollars in thousands)
Six Months Ended February 28 ----------------------- 1999 1998 -------- -------- Operating Activities: Income from continuing operations $3,554 $4,319 Adjustments to reconcile net income from continuing operations to net cash from continuing operations: Depreciation 6,066 5,929 Deferred income taxes (217) 332 Change in operating assets and liabilities of continuing operations: Trade receivables 1,056 231 Inventories 2,485 (934) Accounts payable, prepaids and other 3,535 (1,222) -------- -------- Net cash flow from continuing operations 16,479 8,655 Net cash used by discontinued operations (1,017) (3,556) -------- -------- Net cash from operating activities 15,462 5,099 Investing Activities: Additions to property, plant and equipment, net (9,346) (5,766) Other 416 756 -------- -------- Net cash used by investing activities (8,930) (5,010) Financing Activities: Proceeds from unsecured line of credit 15,895 48,330 Payments on unsecured line of credit (20,246) (47,620) Proceeds of long-term debt 10,000 5,000 Payments on long-term debt (13,277) (5,536) Exercise of stock options -- 154 Purchase of treasury stock (196) -- Purchase of life insurance for officers' benefit plans -- (1,158) Payment of dividends (736) (729) -------- -------- Net cash used by financing activities (8,560) (1,559) -------- -------- Net decrease in cash and equivalents (2,028) (1,470) Cash and cash equivalents (bank overdrafts) at beginning of period 3,200 (1,019) -------- -------- Cash and cash equivalents (bank overdrafts) at end of period $1,172 ($2,489) ======== ========
See accompanying notes to condensed consolidated financial statements. 5 6 PENFORD CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation for the interim periods presented have been included. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and six month periods ended February 28, 1999 are not necessarily indicative of the results that may be expected for the year ending August 31, 1999. For further information, refer to the consolidated financial statements and footnotes thereto included in Penford Corporation's ("Penford" or the "Company") annual report on Form 10-K for the fiscal year ended August 31, 1998. Certain prior year amounts have been reclassified to conform with current year presentation, including the reclassifications necessary to present Penwest Pharmaceuticals Co. ("PPCO") as a discontinued operation. These reclassifications had no effect on previously reported net income. 2. DISCONTINUED OPERATIONS At the end of fiscal 1998, Penford completed a tax-free distribution to its shareholders of the Company's pharmaceuticals subsidiary, PPCO. On August 31, 1998, Penford shareholders of record on August 10, 1998 received PPCO shares on a basis of three shares of PPCO for every two shares of the Company. Prior to the spin-off, PPCO entered into a $15 million revolving credit facility which is guaranteed by Penford. As of February 28, 1999 there was $2.5 million owed by PPCO under the facility. The consolidated financial statements of the Company prior to fiscal 1999 have been restated to reflect the spin-off of PPCO. Accordingly, PPCO's operating results and cash flows for the quarter ended February 28, 1998 have been excluded from their respective captions in the accompanying financial statements. These items have been reported as Loss from Discontinued Operations and Net Cash Flows from Discontinued Operations. 6 7 3. INCOME TAXES The effective tax rate for the quarter and for the six months ended February 28, 1999 was 35%, which is the same as in the corresponding periods of the prior year. The effective rate in each fiscal year is higher than the federal statutory rate of 34.0% due primarily to the effects of state income taxes. 4. EARNINGS PER COMMON SHARE The following table presents the computation of basic and diluted earnings per share under SFAS No. 128 (In thousands, except share and per share data):
Three Months Ended Six Months Ended February 28 February 28 ----------------------- ----------------------- 1999 1998 1999 1998 --------- --------- --------- --------- Income from continuing operations $ 1,259 $ 2,224 $ 3,554 $ 4,319 ========= ========= ========= ========= Net income $ 1,259 $ 1,015 $ 3,554 $ 1,512 ========= ========= ========= ========= Weighted average common shares outstanding 7,396,069 7,292,632 7,376,475 7,280,334 Net effect of dilutive stock options 455,905 227,005 424,107 244,730 --------- --------- --------- --------- Weighted average common shares outstanding assuming dilution 7,851,974 7,519,637 7,800,582 7,525,064 ========= ========= ========= ========= Earnings (loss) per common share, basic Continuing operations $ 0.17 $ 0.30 $ 0.48 $ 0.59 Discontinued operations -- (0.16) -- (0.38) --------- --------- --------- --------- Net income $ 0.17 $ 0.14 $ 0.48 $ 0.21 ========= ========= ========= ========= Earnings (loss) per common share, diluted Continuing operations $ 0.16 $ 0.30 $ 0.46 $ 0.57 Discontinued operations -- (0.17) -- (0.37) --------- --------- --------- --------- Net income $ 0.16 $ 0.13 $ 0.46 $ 0.20 ========= ========= ========= =========
Basic earnings per share reflects only the weighted average common shares outstanding. Diluted earnings per share reflects weighted average common shares outstanding and the effect of any dilutive common stock equivalent shares. 7 8 Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SPIN-OFF OF PENWEST PHARMACEUTICALS CO. At the end of fiscal 1998, Penford effected a tax-free distribution to its shareholders of the Company's pharmaceuticals subsidiary, Penwest Pharmaceuticals Co. ("PPCO"). The distribution was completed on August 31, 1998 representing the culmination of the plan to foster the growth potential of the Company's specialty paper chemical and food ingredients businesses, and separately, the pharmaceuticals business. In fiscal 1998, the Company recorded certain restructuring costs consisting primarily of estimated costs associated with implementing the spin-off, severance costs and other facilities charges. The obligation related to the spin-off as of August 31, 1998 of approximately $1.8 million has been substantially paid as of February 28, 1999. Prior to the spin-off, PPCO entered into a $15 million revolving credit facility, which is guaranteed by Penford. As of February 28, 1999 there was $2.5 million owed by PPCO under the facility. The financial results discussed below are comprised of the Company's operations in the carbohydrate-based specialty paper chemical and food ingredients businesses. RESULTS OF OPERATIONS Net income for the quarter ended February 28, 1999 was $1.3 million, or $0.16 per share assuming dilution, compared to net income of $1.0 million, or $0.13 per share assuming dilution, for the corresponding period a year ago. The prior year's quarter included after-tax losses of $1.2 million, or $0.17 per share assuming dilution, related to the operations of PPCO. Net income for the six months ended February 28, 1999 was $3.6 million, or $0.46 per share assuming dilution, compared to $1.5 million, or $0.20 per share in the corresponding period in fiscal 1998. The prior year's six-month period included after-tax losses of $2.8 million, or $0.37 per share assuming dilution, related to the operations of PPCO. Total Company sales decreased in the second quarter and first six months of fiscal 1999 to $37.2 million and $75.9 million, respectively, representing decreases of 8.7% and 8.0%, respectively, from the corresponding periods in the prior year. The change in sales was primarily due to lower sales volumes at Penford Products Co., the Company's specialty paper chemicals business, which decreased approximately 4.4% and 5.2%, respectively, from the same prior year periods. The Company's second quarter continued to be negatively impacted by the conditions of the North American paper industry. Increased imports of coated and uncoated printing and writing papers primarily from Asia and South America resulted in lower production rates at the North American paper customers served by Penford Products Co. Partially offsetting the volume decline at Penford Products Co. was the continued strong progress at Penford Food Ingredients Co. Sales volumes of specialty potato-based food starches increased by 42.2% in the first half of fiscal 1999 over the same period a year ago. 8 9 Increased sales volume of specialty starches for whole and processed meats and a strong market for coating products are attributed to the volume growth. Gross margin in the second quarter of fiscal 1999 declined to 23.9% from 28.0% in the corresponding quarter a year earlier due to the decreased manufacturing efficiency of specialty carbohydrate-based paper chemicals resulting from lower production volumes. The decrease in gross margin percentage is also due to increased margin pressures attributed to competitive pricing arising from the adverse conditions in the North American paper industry. Increased sales and production volumes of higher margin, specialty food-grade starches partially offset the decrease in gross margin. Gross margin for the six months ended February 28, 1999 decreased to 25.7% from 27.6% in the same period a year earlier primarily as a result of the factors noted above. Operating expenses for the second fiscal quarter declined by $865,000, or 13.3%, compared to the prior year period. For the six months ended February 28, 1999, operating expenses decreased $2.0 million, or 14.9%. The decrease in operating expense is due to reductions in corporate office expenses and the company-wide emphasis on cost containment. On March 22, 1999, the Company announced a plan to reduce the administrative workforce at Penford Products Co. by approximately 15% in an effort to align operating costs with current market conditions. The workforce reduction will be implemented through the combination of a voluntary retirement incentive program and involuntary layoffs. The voluntary retirement incentive program is expected to minimize the number of involuntary layoffs, and will be funded primarily through the Company's defined benefit retirement plan. Although the number of employees accepting early retirement will not be known until the end of the third fiscal quarter, the reduction in workforce could result in a pre-tax earnings charge as high as $2.1 million. Net interest expense for the second quarter and first half of fiscal 1999 was $1.3 million and $2.7 million, respectively, compared to $1.5 million and $2.9 million in the corresponding periods a year ago. The decreases reflect lower outstanding debt balances. The effective tax rate for the second quarter and first half of fiscal 1999 was 35%, compared to 35% in the corresponding periods a year ago. The effective tax rate is higher than the federal statutory rate of 34% due to the impact of state income taxes. LIQUIDITY AND CAPITAL RESOURCES At February 28, 1999, Penford had working capital of $19.0 million, an unsecured credit agreement of $75.0 million under which there was $44.0 million outstanding, and several uncommitted lines of credit aggregating $10.0 million under which there was no amount outstanding. The Company used available cash and operating cash flow primarily to pay down $7.6 million of debt and to finance capital expenditures of $8.9 million during the first six months of fiscal 1999. Cash flow from continuing operations for the six months ended February 28, 1999 was $16.5 million compared to $8.7 million in the corresponding period of the prior year. The 9 10 increase in operating cash flow is due to decreases in inventory and fluctuations in the other components of working capital. The Company began paying a quarterly cash dividend of $0.05 per share in 1992 and has paid such dividends each quarter since. In November of 1998, the Board of Directors authorized a stock repurchase program for the purchase of up to 500,000 shares of the outstanding stock of the company. The Company repurchased 14,500 shares of its common stock in the first six months of fiscal 1999 for approximately $196,000. Net additions to property, plant and equipment during the six months ended February 28, 1999 were $9.3 million. Second quarter additions of $4.2 million were primarily for various improvements to the Penford Products Co. manufacturing facility in Cedar Rapids, Iowa and equipment additions at the Penford Food Ingredients Co. facility in Plover, Wisconsin. Capital expenditures for the Company's specialty paper chemicals and food ingredients businesses for fiscal 1999 are expected to be approximately $12 to $14 million. See "Forward-looking Statements." YEAR 2000 The Company has undergone an assessment of its information systems for compliance with the Year 2000 issue. The assessment and resulting remediation efforts are addressing all facets of the Company including plant automation software including embedded controllers and process control devices, materials management, engineering, laboratory, business systems and general user software. In connection with the Company's ongoing capital program, and as part of the Year 2000 remediation, a series of technology related expenditures are planned, many of which have been, or are currently being implemented. The Company anticipates that internal Year 2000 compliance issues will be substantially remediated in the first half of calendar 1999. See "Forward-looking Statements." It is anticipated that total expenses for Year 2000 remediation efforts may range from $500,000 to $700,000, approximately 75% of which had been expended as of February 28, 1999. See "Forward-looking Statements." The Company does not anticipate significant delays in finalizing internal Year 2000 remediation efforts. See "Forward-looking Statements." However, third parties having a material relationship with the Company may be a potential risk based on their Year 2000 preparedness, which is not within the Company's control. The Company has identified and evaluated the Year 2000 preparedness of critical customers, suppliers and service providers. Based on the results of the review, no alternative courses of action to the initial remediation plan were warranted. Management of the Company believes it has an effective program in place to resolve the Year 2000 issue in a timely manner. As noted above, the Company has not yet fully completed all necessary phases of the Year 2000 program. The failure to correct a material Year 2000 problem could result in an interruption in, or a failure of certain normal business activities. Such failures could adversely affect the Company's results of operations, liquidity 10 11 and financial condition. In addition, disruptions in the economy generally resulting from Year 2000 issues could also materially adversely affect the Company. Although there is uncertainty inherent in the Year 2000 problem, resulting in part from the uncertainty of the full extent of the readiness of critical third-parties, and the Company is unable to determine all of the consequences of Year 2000 failures, the impact on the Company is not expected to be material. The Company has contingency plans for its critical applications. These contingency plans involve, among other actions, manual workarounds, increasing inventories, and adjusting staffing strategies. FORWARD-LOOKING STATEMENTS This report contains forward-looking statements concerning the estimated capital expenditures, estimated expenses related to year 2000 issues and year 2000 preparedness, the information in Item 3 of this report and the anticipated results of the Company. Certain forward-looking statements are identified with a cross-reference to this section. There are a variety of factors which could cause actual events or results to differ materially from those projected in the forward-looking statements, including without limitation, competition; the possibility of interruption of business activities due to equipment problems, accidents, strikes, weather or other factors; product development risk; changes in corn and other raw material prices; changes in general economic conditions or developments with respect to specific industries or customers affecting demand for the Company's products; unanticipated costs, expenses or third party claims; the risk that results may be effected by construction delays, cost overruns, technical difficulties, nonperformance by contractors or changes in capital improvement project requirements or specifications; the possibility of technical difficulties or cost overruns in the Company's Year 2000 compliance program; or other unforeseen developments in the industries in which the Company operates. Accordingly, there can be no assurance that future activities or results will be as anticipated. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. The Company assumes no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change. Additional information which could affect the Company's financial results is included in the Company's 1998 Annual Report to Shareholders and its Form 10-K for the fiscal year ended August 31, 1998 on file with the Securities and Exchange Commission. 11 12 Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES About Market Risk MARKET RISK SENSITIVE INSTRUMENTS AND POSITIONS The market risk associated with the Company's market risk sensitive instruments is the potential loss from adverse changes in interest rates and commodities prices. The Company is unaware of any material changes to the market risk disclosures referred to in the Company's Report on Form 10-K for the year ended August 31, 1998. 12 13 PART II - OTHER INFORMATION Item 1 Legal Proceedings The registrant is unaware of any material developments in the legal proceedings referred to in the Registrant's Report on Form 10-K for the year ended August 31, 1998. Item 2 Changes in Securities Not applicable Item 3 Defaults Upon Senior Securities Not applicable Item 4 Submission of Matters to a Vote of Security Holders (a) The annual meeting of shareholders of Penford Corporation was held on January 25, 1999. (b) The following directors were elected to serve a term of three years: William G. Parzybok, Jr., William K. Street, and John C. Hunter III. Jeffrey T. Cook was elected to serve until the annual meeting of shareholders to be held in 2001. The board is comprised of those elected this year and the following directors completing their terms: Paul H. Hatfield, Sally G. Narodick, and N. Stewart Rogers. (c) The following matters were voted upon at the meeting: 1. For the election of directors:
% of % of For Voted Withheld Voted --------- ------ -------- ----- Jeffrey T. Cook 6,210,710 99.84% 10,158 0.16% John C. Hunter III 6,212,133 99.86% 8,735 0.14% William G. Parzybok, Jr. 6,203,468 99.72% 17,400 0.28% William K. Street 6,208,967 99.81% 11,901 0.19%
2. Ratification of selection of Ernst & Young LLP as independent auditors of the Company:
For Against Abstain --------- ------- ------- 6,208,023 7,297 5,548
(d) Not applicable Item 5 Other Information Not applicable
13 14 Item 6 Exhibits and Reports on Form 8-K.
(a) Exhibits: (3.1) Restated Articles of Incorporation of Registrant (filed as an Exhibit to Registrant's Form 10-K for fiscal year ended August 31, 1995) (3.2) Articles of Amendment to Restated Articles of Incorporation of Registrant (filed as an exhibit to Registrant's Form 10-K for fiscal year ended August 31, 1997) (3.3) Bylaws of Registrant as amended and restated as of October 20, 1997 (filed as an exhibit to Registrant's Form 10-K for fiscal year ended August 31, 1997) (4.1) Amended and Restated Rights Agreement dated as of April 30, 1997 (filed as an Exhibit to Registrant's Amendment to Registration Statement on Form 8-A/A dated May 5, 1997) (10.1) Senior Note Agreement among Penford Corporation as Borrower and Mutual of Omaha and Affiliates as lenders, dated November 1, 1992 (filed as an Exhibit to Registrant's Form 10-Q for the quarter ended February 28, 1993) (10.2) Loan Agreement among Penford Corporation as Borrower and Seattle-First National Bank as Lender, dated December 1, 1989 (Registrant agrees to furnish a copy of this instrument to the Commission on request) (10.3) Penford Corporation Supplemental Executive Retirement Plan, dated March 19, 1990 (filed as an Exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.4) Penford Corporation Supplemental Survivor Benefit Plan, dated January 15, 1991 (filed as an Exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.5) Penford Corporation Deferred Compensation Plan, dated January 15, 1991 (filed as an Exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.6) Change of Control Agreements between Penford Corporation and Messrs. Cook, Widmaier, Talley, Horn, and Rydzewski (a representative copy of these agreements is filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1995) (10.7) Penford Corporation 1993 Non-Employee Director Restricted Stock Plan (filed as an Exhibit to Registrant's Form 10-Q for the quarter ended November 30, 1993) (10.8) Note Agreement dated as of October 1, 1994 among Penford Corporation, Principal Mutual Life Insurance Company and TMG Life Insurance Company (filed as an Exhibit to Registrant's Form 10-Q for the quarter ended February 28, 1995) (10.9) Penford Corporation 1994 Stock Option Plan as amended and restated as of January 21, 1997 (filed on Form S-8 dated March 17, 1997)
14 15 (10.10) Penford Corporation Stock Option Plan for Non-Employee Directors (filed as an exhibit to the Registrant's Form 10-Q for the quarter ended May 31, 1996) (10.11) Separation Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.12) Services Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.13) Employee Benefits Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.14) Tax Allocation Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.15) Excipient Supply Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.16) Restatement and Exchange Agreement amending the Senior Note Agreement among Penford Corporation as Borrower and Mutual of Omaha and Affiliates as lenders, dated as of August 1, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.17) Guaranty Agreement dated as of August 1, 1998 by Penford Products Co., a wholly-owned subsidiary of Registrant, of the Restatement and Exchange Agreement among Registrant and Mutual of Omaha and Affiliates (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998). (10.18) Intercreditor Agreement dated as of August 1, 1998 among the parties to the Credit Agreement dated July 2, 1998 and the parties to the Senior Note Agreements dated as of August 1, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998). (10.19) Restatement and Exchange Agreement amending the Note Agreement among Penford Corporation as Borrower, and Principal Mutual Life Insurance Company and TMG Life Insurance Company as lenders, dated as of August 1, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998). (10.20) Guaranty Agreement dated as of August 1, 1998 by Penford Products Co., a wholly-owned subsidiary of Registrant, of the Restatement and Exchange Agreement among Registrant, Principal Mutual Life Insurance Company, and TMG Life Insurance Company (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.21) Credit Agreement dated as of July 2, 1998 among Penford Corporation and Penford Products Co. as borrowers, and certain commercial lending institutions as the lenders, and The Bank of Nova Scotia, as agent for the lenders (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998)
15 16 (10.22) Specific Guarantee made by Penford Corporation in favor of The Bank of Nova Scotia (the "Bank") in respect to the indebtedness and liability of Penwest Pharmaceuticals Co. to the Bank under a letter loan agreement dated as of July 2, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.23) Specific Guarantee made by Penford Products Co. in favor of The Bank of Nova Scotia (the "Bank") in respect to the indebtedness and liability of Penwest Pharmaceuticals Co. to the Bank under a letter loan agreement dated as of July 2, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.24) Revolving Term Credit Facility in Favor of Penwest Pharmaceuticals Co. as borrowers and The Bank of Nova Scotia as lender dated as of July 2, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) 27 Financial Data Schedule
(b) There were no filings on Form 8-K in the quarter ended February 28, 1999. 16 17 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. Penford Corporation ------------------- (Registrant) February 12, 1999 /s/ JEFFREY T. COOK - ----------------- ------------------------------------ Date Jeffrey T. Cook President and Chief Executive Officer (Principal Executive Officer) February 12, 1999 /s/ KEITH T. FUJINAGA - ----------------- ------------------------------------ Date Keith T. Fujinaga Corporate Controller (Chief Accounting Officer) 17 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEET AT FEBRUARY 28, 1999, THE CONDENSED CONSOLIDATED STATEMENT OF INCOME AT FEBRUARY 28, 1999, AND THE CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW AT FEBRUARY 28, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS AUG-31-1999 DEC-01-1998 FEB-28-1999 1,172 0 19,901 0 13,667 39,099 110,364 0 180,036 20,055 0 0 0 9,131 48,447 180,036 37,161 37,161 28,273 28,273 5,635 0 1,316 1,937 678 1,259 0 0 0 1,259 0.17 0.16
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