-----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, S7KDrudZOPzoEroUqwd+OTBgfmvFVmklrrFhE0AUMo1H6XnijQyVqAsvNoehwn4M 0EKwkxlJUCviKKm/M/2PAw== 0000916641-96-000366.txt : 19960515 0000916641-96-000366.hdr.sgml : 19960515 ACCESSION NUMBER: 0000916641-96-000366 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ESKIMO PIE CORP CENTRAL INDEX KEY: 0000787520 STANDARD INDUSTRIAL CLASSIFICATION: ICE CREAM & FROZEN DESSERTS [2024] IRS NUMBER: 540571720 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19867 FILM NUMBER: 96564398 BUSINESS ADDRESS: STREET 1: 901 MOOREFIELD PARK DR CITY: RICHMOND STATE: VA ZIP: 23236 BUSINESS PHONE: 8045608400 MAIL ADDRESS: STREET 1: 901 MOOREFIELD PARK DR CITY: RICHMOND STATE: VA ZIP: 23236 10-Q 1 ESKIMO PIE CORP. 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) 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 March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-19867 ESKIMO PIE CORPORATION (Exact name of registrant as specified in its charter) Delaware 54-0571720 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 901 Moorefield Park Drive, Richmond, VA 23236 (Address of Principal Executive Offices) Registrant's telephone number, including area code (804) 560-8400 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 (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 30, 1995. Class Outstanding at April 30, 1996 ----- ----------------------------- Common Stock, $1.00 Par Value 3,479,183 ESKIMO PIE CORPORATION Index Page Number Part I. Financial Information Item 1. Financial Statements Consolidated Condensed Balanced Sheets March 31, 1996 and December 31, 1995 1 Consolidated Condensed Statements of Income Three Months Ended March 31, 1996 and 1995 2 Consolidated Condensed Statements of Cash Flows Three Months Ended March 31, 1996 and 1995 3 Notes to Consolidated Condensed Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 8 Eskimo Pie Corporation Consolidated Condensed Balance Sheets ( Unaudited )
March 31, December 31, 1996 1995 (In thousands) ______ _______ ASSETS Current assets: Cash and cash equivalents $767 $717 Receivables 13,207 8,695 Inventories 6,939 5,323 Prepaid expenses 1,342 1,375 ----- ----- Total current assets 22,255 16,110 Property, plant and equipment - net 8,881 9,055 Goodwill and other intangibles 18,601 18,864 Other assets 1,740 1,843 ----- ----- $51,477 $45,872 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short term borrowings $3,900 $1,200 Accounts payable 4,591 3,592 Accrued advertising and promotion 1,466 975 Accrued compensation and related amounts 245 430 Other accrued expenses 342 542 Income taxes 975 178 --- --- Total current liabilities 11,519 6,917 Long term debt 6,000 6,000 Convertible subordinated notes 3,800 3,800 Postretirement benefits and other 3,520 3,468 Stockholders' equity: Common stock 3,478 3,475 Additional capital 4,671 4,620 Retained earnings 18,489 17,592 ------ ------ Total stockholders' equity 26,638 25,687 ------ ------ $51,477 $45,872 ======= =======
Eskimo Pie Corporation Consolidated Condensed Statements of Income ( Unaudited ) Three months ended March 31, 1996 1995 ------ ------- (In thousands, except share data) Net sales $19,769 $18,953 Cost of products sold 12,008 11,152 ------ ------ Gross profit 7,761 7,801 Advertising and sales promotion 3,270 3,581 General and administrative 2,595 2,356 ----- ----- Operating income 1,896 1,864 Interest income 29 61 Interest expense and other (182) (216) ---- ---- Income before income taxes 1,743 1,709 Income taxes 672 674 --- --- Net income $1,071 $1,035 ====== ====== Per common share Primary Weighted average number of common shares outstanding 3,476,221 3,474,585 --------- --------- Net income $0.31 $0.30 ===== ===== Fully diluted Weighted average number of common shares outstanding 3,638,788 3,637,152 Net income $0.30 $0.29 ===== ===== Cash dividend $0.05 $0.05 ===== ===== 2 Eskimo Pie Corporation Consolidated Condensed Statements of Cash Flows ( Unaudited )
Three months ended March 31, 1996 1995 ( In thousands ) Operating activities Net income $1,071 $1,035 Adjustments to reconcile net income to net cash provided by operating activities : Depreciation and amortization 615 600 Deferred income taxes and other (123) (49) Increase in receivables (4,512) (3,396) Increase in inventories (1,333) (1,389) Increase in accounts payable and accrued expenses 1,901 1,220 ----- ----- Net cash used in operating activities (2,381) (1,979) Investing activities Acquisition of business and intangible assets - net of cash acquired (78) (6,124) Capital expenditures (167) (274) Sale of short term investments -- 195 Other 150 (348) --- ---- Net cash used in investing activities (95) (6,551) Financing activities Payment of cash dividends (174) (173) Borrowings 2,700 5,425 Principal payment on long-term debt -- (44) ----- ------ Net cash provided by financing activities 2,526 5,208 ----- ----- Increase (decrease) in cash and cash equivalents 50 (3,322) Cash and cash equivalents at beginning of period 717 4,797 --- ----- Cash and cash equivalents at end of period $767 $1,475 ==== ======
3 ESKIMO PIE CORPORATION Notes to Consolidated Condensed financial statements NOTE A - SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION In the opinion of management, the accompanying unaudited consolidated condensed financial statements reflect all adjustments (consisting of only normal recurring accruals) necessary for a fair presentation of the Company's financial position as of March 31, 1996, and its results of operations for the three months ended March 31, 1996 and 1995. The results of operations for any interim period are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's 1995 Annual Report to Stockholders. NOTE B-INVENTORIES Classifications of inventories are as follows: March 31, December 31, 1996 1995 (In thousands) Finished goods $4,403 $3,802 Raw materials and packaging supplies 3,757 2,631 ------- ------- Total FIFO inventories 8,160 6,433 LIFO reserves (1,221) (1,110) ------- ------- $6,939 $5,323 4 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION The Company markets, primarily through a national network of licensed manufacturers, a broad range of frozen novelty, frozen yogurt, ice cream and sorbet products under the ESKIMO PIE, Welch's, Weight Watchers, SnackWell's, OREO and RealFruit brand names. The Company also manufactures and markets ingredients and packaging to the dairy industry. RESULTS OF OPERATIONS The following table sets forth the composition of the consolidated statements of income as a percentage of net sales: Three Months Ended March 31, 1996 1995 Net sales 100.0% 100.0% Cost of sales 60.7 58.8 ----- ----- Gross profit 39.3 41.2 Advertising and sales promotion 16.6 18.9 General & administrative 13.1 12.4 ----- ----- Operating income 9.6 9.9 Interest and other-net (.8) (.8) Income before income taxes 8.8 9.1 Income taxes 3.4 3.6 ----- ----- Net income 5.4% 5.5% ===== ===== 5 NET SALES AND GROSS PROFIT Net sales by brand or item consisted of the following: Three Months Ended March 31, ------------------------------------------ Brand or Item 1996 1995 ------------- --------------- --------------------- Company owned brands $ 7,855 39.7% $11,551 60.9% Sublicensed brands 8,847 44.8 4,449 23.5 Flavors, packaging and other 3,067 15.5 2,953 15.6 ------- ----- ------- ----- $19,769 100.0% $18,953 100.0% ======= ===== ======= ===== According to Information Resources, Inc., sales in the frozen desert market were down 3% to 5% due to the severe winter weather during the quarter. Also contributing to the decline in the sale of Company owned brands were the continuing formulation changes and equipment installations relating to the Reduced Fat Eskimo Pie line. Sales of sublicensed brands almost doubled for the quarter reflecting the introduction of the SnackWell's and OREO products and the inclusion of the RealFruit line of products. This increase more than offset the decline in Company owned brands, resulting in an overall increase of 4% in the sale of branded products. Flavors, packaging and other sales increased 3.9% during the first quarter. As a result of the above, total sales increased 4.3% for the first quarter. As a percent of sales, gross profit decreased to 39.3% for the quarter from 41.2% for the same period in 1995. The change in the gross profit margin resulted from a change in product mix due to the aforementioned increase in sales of sublicensed brands. The lower gross profit margins on sublicensed brands reflect the costs associated with the the rights to utilize these brand names. EXPENSES AND OTHER INCOME Contributing to the decrease in advertising and sales promotion expense is the strength of the Nabisco brand name which has required, on a relative basis, lower fixed introductory costs as well as a change to volume based promotional commitments during the year. General and administrative expenses increased from 12.4% to 13.1% of sales for the quarter partially due to start-up costs incurred in conjunction with the introduction and expansion of the Nabisco and Reduced Fat Eskimo Pie lines of products. 6 OPERATING OUTLOOK Licensing sales should benefit from the introduction and expansion of the aforementioned new products, however, the Company also anticipates a corresponding increase in expenses. Management believes that new product introductions, as well as recently implemented package redesigns and new promotional activity, should stimulate sales and provide for a more favorable mix of sales between sublicensed and Company owned brands. LIQUIDITY AND CAPITAL RESOURCES The following is a summary of the cash flows of the Company: Three Months Ended March 31, 1996 1995 Cash used in operations ($2,381) ($1,979) Acquisition of business and intangible assets (78) (6,124) Capital expenditures (167) (274) Borrowings 2,700 5,425 Cash dividends paid (174) (173) Proceeds from sale of stock and short term investments -- 229 Principal payments and other 150 (426) ------- ------- Increase (decrease) in cash and cash equivalents $ 50 ($3,322) ======= ======= The use of cash in operations is attributable to seasonal working capital requirements. The Company believes that the existing equity, cash generated from operations and funds available under its borrowing arrangements provide sufficient funds and financial flexibility to support its on going business, strategic objectives and debt repayment requirements. On May 1, 1996, the Board of Directors declared the Company's 14th consecutive quarterly cash dividend of $.05 per share payable on July 3, 1996 to shareholders of record on June 14, 1996. While the Company anticipates that a regular quarterly dividend will continue, the amount and timing of any future dividend will depend on the general business conditions encountered by the Company, as well as the financial condition, earnings and capital requirements of the Company and other factors deemed relevant by the Board of Directors. 7 PART II, OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a. Exhibits: Exhibit 27. Financial data schedule. b. Reports on Form 8-K: None 8 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. ESKIMO PIE CORPORATION Date: _________________________ 1996 By ____________________________ David V. Clark Chairman, of the Board, President and Chief Executive Officer Date: _________________________ 1996 By _____________________________ Thomas M. Mishoe, Jr. Chief Financial Officer Date: _________________________ 1996 By _____________________________ Larry F. English Controller 9 EX-27 2 FINANCIAL
5 1,000 3-MOS DEC-31-1996 MAR-31-1996 767 0 13,207 0 6,939 22,255 21,172 12,291 51,477 11,519 9,800 0 0 3,478 23,160 51,477 19,769 19,769 12,008 17,873 0 0 195 1,743 672 1,071 0 0 0 1,071 .31 .30
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