10-Q 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 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 Number 33-75706 BERRY PLASTICS CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 35-1813706 (State or other jurisdiction (IRS employer of incorporation or organization) identification number) BPC HOLDING CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 35-1814673 (State or other jurisdiction (IRS employer of incorporation or organization) identification number) BERRY IOWA CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 42-1382173 (State or other jurisdiction (IRS employer of incorporation or organization) identification number) BERRY TRI-PLAS CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 56-1949250 (State or other jurisdiction (IRS employer of incorporation or organization) identification number) BERRY STERLING CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 54-1749681 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) AEROCON, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 35-1948748 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) PACKERWARE CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 48-0759852 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1 BERRY PLASTICS DESIGN CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 62-1689708 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) VENTURE PACKAGING, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 51-0368479 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) VENTURE PACKAGING MIDWEST, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 34-1809003 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) BERRY PLASTICS TECHNICAL SERVICES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 57-1029638 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) NIM HOLDINGS LIMITED (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) England and Wales N/A (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) BERRY PLASTICS U.K. LIMITED (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) England and Wales N/A (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) KNIGHT PLASTICS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 35-2056610 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) CPI HOLDING CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 34-1820303 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) CARDINAL PACKAGING, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Ohio 34-1396561 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) NORWICH ACQUISITION LIMITED (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) England and Wales N/A (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) BERRY PLASTICS ACQUISITION CORPORATION II (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware N/A (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
2 POLY-SEAL CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 52-0892112 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) BERRY PLASTICS ACQUISITION CORPORATION III (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware N/A (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) CBP HOLDINGS, S.R.L. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Italy N/A (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) CAPSOL S.P.A. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Italy N/A (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) OCIESSE S.R.L. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Italy N/A (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 101 OAKLEY STREET 47710 EVANSVILLE, INDIANA (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANTS' TELEPHONE NUMBER, INCLUDING AREA CODE: (812) 424-2904 NONE (Former name, former address and former fiscal year, if changed since last report) 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.[X] Yes [ ] No 3 Indicate the number of shares outstanding of each of issuers' classes of common stock, as of the latest practicable date: As of October 1, 2000, the following shares of capital stock of BPC Holding Corporation were outstanding: 91,000 shares of Class A Voting Common Stock; 259,000 shares of Class A Nonvoting Common Stock; 144,546 shares of Class B Voting Common Stock; 56,509 shares of Class B Nonvoting Common Stock; and 16,833 shares of Class C Nonvoting Common Stock. As of October 1, 2000, there were outstanding 100 shares of the Common Stock, $.01 par value, of Berry Plastics Corporation, 100 shares of the Common Stock, $.01 par value, of Berry Iowa Corporation, 100 shares of the Common Stock, $.01 par value, of Berry Tri-Plas Corporation, 100 shares of the Common Stock, $.01 par value, of Berry Sterling Corporation, 100 shares of the Common Stock, $.01 par value, of Aerocon, Inc., 100 shares of the Common Stock, $.01 par value, of PackerWare Corporation, 100 shares of the Common Stock, $.01 par value, of Berry Plastics Design Corporation, 100 shares of the Common Stock, $.01 par value, of Venture Packaging, Inc., 100 shares of the Common Stock, $.01 par value, of Venture Packaging Midwest, Inc., 100 shares of the Common Stock, $.01 par value, of Berry Plastics Technical Services, Inc., 4,000,000 Ordinary Shares of 1 par value, of NIM Holdings Limited, 5,850 Ordinary Shares of 1 par value, of Berry Plastics U.K. Limited, 100 shares of the Common Stock, $.01 par value, of Knight Plastics, Inc., 100 shares of the Common Stock, $.01 par value, of CPI Holding Corporation, 100 shares of the Common Stock, $.01 par value, of Cardinal Packaging, Inc., 2 Ordinary Shares of 1 par value, of Norwich Acquisition Limited, 100 shares of the Common Stock, $.01 par value, of Berry Plastics Acquisition Corporation II, 100 shares of the Common Stock, $.01 par value, of Poly-Seal Corporation, 100 shares of the Common Stock, $.01 par value, of Berry Plastics Acquisition Corporation III., quota capital of EURO 10,400 of CBP Holdings S.r.l., 100,000 Ordinary Shares of ITL 10,000 par value, of Capsol S.p.a. and quota capital of ITL 40,000,000 of Ociesse S.r.l. 4 BPC HOLDING CORPORATION AND SUBSIDIARIES FORM 10-Q INDEX FOR QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000 PAGE NO. Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets 6 Consolidated Statements of Operations 8 Consolidated Statements of Cash Flows 9 Notes to Consolidated Financial Statements 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 16 PART II. OTHER INFORMATION Item 1. Legal Proceedings 21 Item 6. Exhibits and Reports on Form 8-K 21 SIGNATURE 22 5 PART 1. FINANCIAL INFORMATION Item 1. Financial Statements BPC Holding Corporation and Subsidiaries Consolidated Balance Sheets (In Thousands of Dollars)
SEPTEMBER 30, JANUARY 1, 2000 2000 (UNAUDITED) Assets Current assets: Cash and cash equivalents $ 9,792 $ 2,546 Accounts receivable (less allowance for doubtful accounts of $1,740 at September 30, 2000 and $1,386 at January 1, 2000) 50,321 37,507 Inventories: Finished goods 38,822 31,676 Raw materials and supplies 13,320 15,016 ---------- ---------- 52,142 46,692 Prepaid expenses and other receivables 7,492 2,082 Income taxes recoverable 1,148 45 ---------- ---------- Total current assets 120,895 88,872 Property and equipment: Land 8,827 8,556 Buildings and improvements 54,871 48,080 Machinery, equipment and tooling 200,446 172,082 Construction in progress 33,017 18,170 ---------- ---------- 297,161 246,888 Less accumulated depreciation 118,028 100,096 ---------- ---------- 179,133 146,792 Intangible assets: Deferred financing and origination fees, net 11,150 11,571 Covenants not to compete, net 3,466 3,723 Excess of cost over net assets acquired, net 102,689 87,614 ---------- ---------- 117,305 102,908 Other 918 2,235 ---------- ---------- Total assets $ 418,251 $ 340,807 ========== ==========
6 Consolidated Balance Sheets (continued) (In Thousands of Dollars)
SEPTEMBER 30, JANUARY 1, 2000 2000 (UNAUDITED) LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 24,199 $ 25,798 Accrued expenses and other liabilities 16,832 9,590 Accrued interest 13,807 8,108 Employee compensation and payroll taxes 14,228 13,461 Income taxes 130 279 Current portion of long-term debt 22,195 21,109 ---------- ---------- Total current liabilities 91,391 78,345 Long-term debt, less current portion 439,099 382,880 Accrued dividends on preferred stock 15,587 11,001 Deferred income taxes 447 503 Other liabilities 1,413 1,549 ---------- ---------- 547,937 474,278 Stockholders' equity (deficit): Series A Preferred Stock; 600,000 shares authorized; issued and outstanding (net of discount of $2,258 at September 30, 2000 and $2,478 at January 1, 2000) 12,313 12,093 Series A-1 Preferred Stock, 1,400,000 shares authorized; 1,000,000 issued and outstanding (net of discount of $5,584 at September 30, 2000) 19,416 - Series B Preferred Stock; 200,000 shares authorized, issued and outstanding 5,000 5,000 Class A Common Stock; $.01 par value: Voting; 500,000 shares authorized; 91,000 shares issued and outstanding 1 1 Nonvoting; 500,000 shares authorized; 259,000 shares issued and outstanding 3 3 Class B Common Stock; $.01 par value: Voting; 500,000 shares authorized; 145,058 shares issued and 144,546 shares outstanding 1 1 Nonvoting; 500,000 shares authorized; 58,612 shares issued and 56,509 shares outstanding 1 1 Class C Common Stock; $.01 par value: Nonvoting; 500,000 shares authorized; 17,000 shares issued and 16,833 shares outstanding - - Treasury stock: 512 shares Class B Voting Common Stock; 2,103 shares Class B Nonvoting Common Stock; and 167 shares Class C Nonvoting Common Stock (369) (256) Additional paid-in capital 36,468 41,559 Warrants 9,386 3,511 Retained earnings (deficit) (210,987) (195,061) Accumulated other comprehensive loss (919) (323) ---------- ---------- Total stockholders' equity (deficit) (129,686) (133,471) ---------- ---------- Total liabilities and stockholders' equity (deficit) $ 418,251 $ 340,807 ========== ==========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 7 BPC Holding Corporation and Subsidiaries Consolidated Statements of Operations (In Thousands of Dollars)
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED SEPTEMBER 30, OCTOBER 2, SEPTEMBER 30, OCTOBER 2, 2000 1999 2000 1999 (UNAUDITED) (UNAUDITED) Net sales $ 105,645 $ 90,105 $ 310,014 $ 249,956 Cost of goods sold 80,603 68,458 237,508 181,240 ---------- ---------- ---------- ---------- Gross margin 25,042 21,647 72,506 68,716 Operating expenses: Selling 5,822 4,630 16,573 13,183 General and administrative 5,541 5,336 18,233 17,220 Research and development 584 537 2,146 1,712 Amortization of intangibles 3,025 2,432 7,503 4,981 Other expenses 632 1,224 4,907 2,890 ---------- ---------- ---------- ---------- Operating income 9,438 7,488 23,144 28,730 Other expenses: (Gain) loss on disposal of property and equipment (62) 372 553 1,150 ---------- ---------- ---------- ---------- Income before interest, taxes, and extraordinary item 9,500 7,116 22,591 27,580 Interest: Expense (13,470) (11,516) (37,516) (29,539) Income 23 41 76 204 ---------- ---------- ---------- ---------- Loss before income taxes and extraordinary item (3,947) (4,359) (14,849) (1,755) Income taxes 30 175 55 659 ---------- ---------- ---------- ---------- Net loss before extraordinary item (3,977) (4,534) (14,904) (2,414) Extraordinary item (less applicable income taxes of $0) - - 1,022 - ---------- ---------- ---------- ---------- Net loss (3,977) (4,534) (15,926) (2,414) Preferred stock dividends (1,970) (1,034) (4,586) (2,996) Amortization of preferred stock discount (292) (73) (511) (219) ---------- ---------- ---------- ---------- Net loss attributable to common stockholders $ (6,239) $ (5,641) $ (21,023) $ (5,629) ========== ========== ========== ==========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 8 BPC Holding Corporation and Subsidiaries Consolidated Statements of Cash Flows (In Thousands of Dollars)
THIRTY-NINE WEEKS ENDED SEPTEMBER 30, OCTOBER 2, 2000 1999 (UNAUDITED) OPERATING ACTIVITIES Net loss $ (15,926) $ (2,414) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 22,743 18,085 Non-cash interest expense 13,113 11,654 Amortization 7,503 4,981 Write-off deferred financing and origination fees 1,022 - Loss on sale of property and equipment 553 1,150 Changes in operating assets and liabilities: Accounts receivable, net (7,337) (7,079) Inventories 3,567 706 Prepaid expenses and other receivables (6,779) (1,391) Other assets 1,317 (4,757) Payables and accrued expenses (173) 11,462 ---------- ---------- Net cash provided by operating activities 19,603 32,397 INVESTING ACTIVITIES Additions to property and equipment (23,662) (25,580) Proceeds from disposal of property and equipment 1,197 455 Acquisitions of businesses, net of cash acquired (64,348) (71,293) ---------- ---------- Net cash used for investing activities (86,813) (96,418) FINANCING ACTIVITIES Proceeds from long-term borrowings 64,974 81,333 Payments on long-term borrowings (14,411) (14,520) Debt origination costs (1,245) (3,000) Proceeds from issuance of common stock - 56 Issuance of preferred stock and warrants 25,000 - Purchase of treasury stock (112) (16) ---------- ---------- Net cash provided by financing activities 74,206 63,853 Effect of exchange rate changes on cash 250 (61) ---------- ---------- Net increase in cash and cash equivalents 7,246 (229) Cash and cash equivalents at beginning of period 2,546 2,318 ---------- ---------- Cash and cash equivalents at end of period $ 9,792 $ 2,089 ========== ==========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 9 BPC Holding Corporation and Subsidiaries Notes to Consolidated Financial Statements (In thousands of dollars, except as otherwise noted) (Unaudited) 1. Basis of Presentation THE ACCOMPANYING UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF BPC HOLDING CORPORATION AND ITS SUBSIDIARIES (THE "COMPANY") HAVE BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR INTERIM FINANCIAL INFORMATION AND WITH THE INSTRUCTIONS FOR FORM 10-Q AND ARTICLE 10 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 HAVE BEEN INCLUDED. OPERATING RESULTS FOR THE PERIODS PRESENTED ARE NOT NECESSARILY INDICATIVE OF THE RESULTS THAT MAY BE EXPECTED FOR THE FULL FISCAL YEAR. THE ACCOMPANYING FINANCIAL STATEMENTS INCLUDE THE RESULTS OF BPC HOLDING CORPORATION ("HOLDING") AND ITS WHOLLY- OWNED SUBSIDIARY, BERRY PLASTICS CORPORATION ("BERRY"), AND ITS WHOLLY-OWNED SUBSIDIARIES: BERRY IOWA CORPORATION, BERRY TRI-PLAS CORPORATION, BERRY STERLING CORPORATION, AEROCON, INC., PACKERWARE CORPORATION, BERRY PLASTICS DESIGN CORPORATION, VENTURE PACKAGING, INC., VENTURE PACKAGING MIDWEST, INC., BERRY PLASTICS TECHNICAL SERVICES, INC., NIM HOLDINGS LIMITED, BERRY PLASTICS U.K. LIMITED, KNIGHT PLASTICS, INC., CPI HOLDING CORPORATION, CARDINAL PACKAGING, INC., NORWICH ACQUISITION LIMITED, BERRY PLASTICS ACQUISITION CORPORATION II, BERRY PLASTICS ACQUISITION CORPORATION III, AND POLY-SEAL CORPORATION. FOR FURTHER INFORMATION, REFER TO THE CONSOLIDATED FINANCIAL STATEMENTS AND FOOTNOTES THERETO INCLUDED IN HOLDING'S AND BERRY'S FORM 10-K'S FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED JANUARY 1, 2000. CERTAIN AMOUNTS ON THE 1999 FINANCIAL STATEMENTS HAVE BEEN RECLASSIFIED TO CONFORM WITH THE 2000 PRESENTATION. 1. Acquisitions On May 9, 2000, Berry acquired all of the outstanding capital stock of Poly- Seal Corporation ("Poly-Seal") for aggregate consideration of approximately $58.0 million. The purchase price and allocation of such to the purchased assets and liabilities is preliminary and subject to completion of Poly- Seal's working capital accounts. The purchase was financed through the issuance by Holding of $25.0 million of 14% preferred stock (see Note 7) and additional borrowings under the Credit Facility (See Note 3). The operations of Poly-Seal are included in Berry's operations since the acquisition date using the purchase method of accounting. On July 6, 1999, Berry acquired all of the outstanding capital stock of CPI Holding Corporation ("Cardinal"), the parent company of Cardinal Packaging, Inc. for aggregate consideration of approximately $72.0 million. The purchase was financed through the issuance by Berry of $75.0 million of 11% Senior Subordinated Notes. The operations of Cardinal are included in Berry's operations since the acquisition date using the purchase method of accounting. 10 THE PRO FORMA RESULTS LISTED BELOW ARE UNAUDITED AND REFLECT PURCHASE ACCOUNTING ADJUSTMENTS ASSUMING THE CARDINAL AND POLY-SEAL ACQUISITIONS OCCURRED ON JANUARY 3, 1999.
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED SEPTEMBER 30, OCTOBER 2, SEPTEMBER 30, OCTOBER 2, 2000 1999 2000 1999 Net sales $ 105,645 $ 102,557 $ 327,078 $316,561 Loss before income taxes and extraordinary item (3,947) (4,188) (18,104) (6,229) NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS (6,239) (6,506) (25,833) (13,212)
THE PRO FORMA FINANCIAL INFORMATION IS PRESENTED FOR INFORMATIONAL PURPOSES ONLY AND IS NOT NECESSARILY INDICATIVE OF THE OPERATING RESULTS THAT WOULD HAVE OCCURRED HAD THE ACQUISITIONS BEEN CONSUMMATED AT THE ABOVE DATE, NOR ARE THEY NECESSARILY INDICATIVE OF FUTURE OPERATING RESULTS. FURTHER, THE INFORMATION GATHERED ON THE ACQUIRED COMPANIES IS BASED UPON UNAUDITED INTERNAL FINANCIAL INFORMATION AND REFLECTS ONLY PRO FORMA ADJUSTMENTS FOR ADDITIONAL INTEREST EXPENSE AND AMORTIZATION OF THE EXCESS OF THE COST OVER THE UNDERLYING NET ASSETS ACQUIRED, NET OF THE APPLICABLE INCOME TAX EFFECTS. 3. LONG-TERM DEBT Long-term debt consists of the following:
SEPTEMBER 30, JANUARY 1, 2000 2000 Holding 12.50% Senior Secured Notes $119,373 $111,956 BERRY 12.25% SENIOR SUBORDINATED NOTES 125,000 125,000 BERRY 11% SENIOR SUBORDINATED NOTES 75,000 75,000 SECOND LIEN SENIOR CREDIT FACILITY 25,000 - Term loans 78,722 55,221 REVOLVING LINES OF CREDIT 33,801 31,649 NEVADA INDUSTRIAL REVENUE BONDS 3,500 4,000 CAPITAL LEASES 326 479 DEBT PREMIUM, NET 572 684 --------- --------- 461,294 403,989 LESS CURRENT PORTION OF LONG-TERM DEBT 22,195 21,109 --------- --------- $439,099 $382,880 ========= =========
THE CURRENT PORTION OF LONG-TERM DEBT CONSISTS OF $21.6 MILLION OF MONTHLY INSTALLMENTS ON THE TERM LOANS, A $0.5 MILLION REPAYMENT OF THE INDUSTRIAL BONDS AND THE MONTHLY PRINCIPAL PAYMENTS RELATED TO CAPITAL LEASE OBLIGATIONS. 11 IN CONNECTION WITH THE ACQUISITION OF POLY-SEAL, BERRY AMENDED ITS FINANCING AND SECURITY AGREEMENT WITH BANK OF AMERICA (THE "CREDIT FACILITY") TO INCREASE THE AMOUNT OF FUNDS AVAILABLE WITHIN THE FACILITY. AT SEPTEMBER 30, 2000, THE CREDIT FACILITY PROVIDED FOR AN AGGREGATE PRINCIPAL AMOUNT OF APPROXIMATELY $155.3 MILLION CONSISTING OF (I) A $70.0 MILLION REVOLVING LINE OF CREDIT, SUBJECT TO A BORROWING BASE FORMULA, (II) A $2.4 MILLION REVOLVING LINE OF CREDIT IN THE U.K. ("UK REVOLVER"), SUBJECT TO A BORROWING BASE FORMULA, (III) A $74.9 MILLION TERM LOAN FACILITY, (IV) A $3.8 MILLION TERM LOAN FACILITY IN THE U.K. ("UK TERM LOAN") AND (V) A $4.2 MILLION STANDBY LETTER OF CREDIT FACILITY TO SUPPORT THE COMPANY'S AND ITS SUBSIDIARIES' OBLIGATIONS UNDER THE NEVADA BONDS. AS A RESULT OF AMENDING THE CREDIT FACILITY, A PORTION OF THE DEFERRED FINANCING AND ORIGINATION FEES RELATED TO THE CREDIT FACILITY HAVE BEEN CHARGED TO EXPENSE AS AN EXTRAORDINARY ITEM. AT SEPTEMBER 30, 2000, THE COMPANY HAD UNUSED BORROWING CAPACITY UNDER THE CREDIT FACILITY'S REVOLVING LINE OF CREDIT OF APPROXIMATELY $34.7 MILLION. THE INDEBTEDNESS UNDER THE CREDIT FACILITY IS GUARANTEED BY HOLDING, BERRY, AND ALL OF BERRY'S SUBSIDIARIES. THE OBLIGATIONS OF THE COMPANY AND THE SUBSIDIARIES UNDER THE CREDIT FACILITY AND THE GUARANTEES THEREOF ARE SECURED PRIMARILY BY ALL OF THE ASSETS OF SUCH ENTITIES. ON JULY 17, 2000, BERRY OBTAINED A SECOND LIEN SENIOR CREDIT FACILITY FOR AN AGGREGATE PRINCIPAL AMOUNT OF $25.0 MILLION, RESULTING IN NET PROCEEDS OF $24.3 MILLION AFTER FEES AND EXPENSES. THE PROCEEDS WERE UTILIZED TO REDUCE THE COMPANY'S REVOLVING LINE OF CREDIT. THE $25.0 MILLION PRINCIPAL AMOUNT IS DUE UPON THE FACILITY'S MATURITY IN JULY 2002. 4. BERRY PLASTICS CORPORATION SUMMARY FINANCIAL INFORMATION The following summarizes financial information of Holding's wholly owned subsidiary, Berry Plastics Corporation, and its subsidiaries (in thousands of dollars.)
SEPTEMBER 30, JANUARY 1, 2000 2000 CONSOLIDATED BALANCE SHEETS Current assets $ 120,570 $ 88,163 PROPERTY AND EQUIPMENT - NET OF ACCUMULATED DEPRECIATION 179,135 146,792 OTHER NONCURRENT ASSETS 112,391 93,889 CURRENT LIABILITIES 86,495 77,308 NONCURRENT LIABILITIES 321,586 272,977 EQUITY (DEFICIT) 4,015 (21,441) THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED SEPTEMBER 30, OCTOBER 2, SEPTEMBER 30, OCTOBER 2, 2000 1999 2000 1999 CONSOLIDATED STATEMENT OF OPERATIONS Net sales $ 105,645 $ 90,105 $ 310,014 $ 249,956 COST OF GOODS SOLD 80,603 68,458 237,508 181,240 INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEM 199 (749) (2,883) 8,716 NET INCOME (LOSS) 171 (924) (3,946) 8,064
12 THE FOLLOWING SUMMARIZES PARENT COMPANY ONLY FINANCIAL INFORMATION OF BERRY:
SEPTEMBER 30, JANUARY 1, 2000 2000 BALANCE SHEET Current assets $ 44,244 $ 37,296 Property and equipment, net of accumulated depreciation 57,221 53,452 Investment in/due from subsidiaries 258,821 191,258 Other noncurrent assets 13,416 13,398 Current liabilities 54,075 50,983 Noncurrent liabilities 315,612 265,862 Equity (deficit) 4,015 (21,441) THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED SEPTEMBER 30, OCTOBER 2, SEPTEMBER 30, OCTOBER 2, 2000 1999 2000 1999 CONSOLIDATED STATEMENTS OF OPERATIONS Net sales $ 39,437 $ 40,415 $ 122,324 $ 116,623 Cost of goods sold 27,267 28,033 84,154 76,675 Income before income taxes 2,831 1,896 7,931 10,406 Net income 2,821 1,781 7,911 9,987
1. Segment Reporting THE COMPANY HAS TWO REPORTABLE SEGMENTS: PACKAGING PRODUCTS AND HOUSEWARES PRODUCTS. THE COMPANY'S PACKAGING BUSINESS CONSISTS OF THREE PRIMARY MARKET GROUPS: OVERCAPS AND CLOSURES, CONTAINERS, AND DRINK CUPS. THE COMPANY'S HOUSEWARES BUSINESS CONSISTS OF SEMI-DISPOSABLE PLASTIC HOUSEWARES AND PLASTIC LAWN AND GARDEN PRODUCTS, SOLD PRIMARILY THROUGH MAJOR NATIONAL RETAIL MARKETERS AND NATIONAL CHAIN STORES. 13 The Company evaluates performance and allocates resources based on operating income before depreciation and amortization of intangibles adjusted to exclude (i) market value adjustment related to stock options, (ii) other non-recurring or "one-time" expenses, and (iii) management fees and reimbursed expenses paid to First Atlantic ("Adjusted EBITDA"). The Company's reportable segments are business units that offer different products to different markets.
Thirteen Weeks Ended Thirty-nine Weeks Ended SEPTEMBER 30, OCTOBER 2, SEPTEMBER 30, OCTOBER 2, 2000 1999 2000 1999 Net sales: Packaging products $ 101,558 $ 87,329 $ 287,138 $ 227,771 HOUSEWARES PRODUCTS 4,087 2,776 22,876 22,185 ADJUSTED EBITDA: PACKAGING PRODUCTS 21,481 17,496 56,025 51,411 HOUSEWARES PRODUCTS 267 414 3,183 4,155 RECONCILIATION OF ADJUSTED EBITDA TO LOSS BEFORE INCOME TAXES: ADJUSTED EBITDA FOR REPORTABLE SEGMENTS $ 21,748 $ 17,910 $ 59,208 $ 55,566 NET INTEREST EXPENSE (13,447) (11,475) (37,440) (29,335) DEPRECIATION (8,356) (6,525) (22,743) (18,085) AMORTIZATION (3,025) (2,432) (7,503) (4,981) GAIN (LOSS) ON DISPOSAL OF PROPERTY AND EQUIPMENT 62 (372) (553) (1,150) ONE-TIME EXPENSES (711) (1,224) (5,060) (2,890) STOCK OPTION MARKET VALUE ADJUSTMENT - (23) (104) (225) MANAGEMENT FEES (218) (218) (654) (655) ---------- ---------- ---------- ---------- LOSS BEFORE INCOME TAXES AND EXTRAORDINARY ITEM $ (3,947) $ (4,359) $(14,849) $ (1,755) ========== ========== ========== ==========
One time-expenses represent non-recurring expenses that relate to recently acquired businesses, plant consolidations, and litigation associated with a drink cup patent. 6. COMPREHENSIVE INCOME (LOSS) Comprehensive income (losses) were $(4.1) million and $4.6 million for the thirteen weeks ended September 30, 2000 and October 2, 1999, respectively and $(16.8) million and $2.5 million for the thirty-nine weeks ended September 30, 2000 and October 2, 1999, respectively. 14 7. CHANGES IN OWNERS EQUITY In connection with the Poly-Seal acquisition on May 9, 2000, Holding issued 1,000,000 shares of Series A-1 Preferred Stock to Chase Venture Capital Associates, LLC and The Northwestern Mutual Life Insurance Company (collectively, the "Purchasers"). The Series A-1 Preferred Stock has a stated value of $25 per share, and dividends accrue at a rate of 14% per annum and will accumulate until declared and paid. The Series A-1 Preferred Stock ranks pari-passu to the Series A Preferred Stock and prior to all other capital stock of Holding. In addition, Warrants to purchase an aggregate of 25,997 shares of Class B Non-Voting Common Stock at $0.01 per share were issued to the Purchasers. 2. SUBSEQUENT EVENTS ON OCTOBER 4, 2000, BERRY, THROUGH ITS ITALIAN SUBSIDIARY CBP HOLDINGS S.R.1., ACQUIRED ALL OF THE OUTSTANDING CAPITAL STOCK OF CAPSOL S.P.A., HEADQUARTERED IN CORNATE D'ADDA, NEAR MILAN, ITALY AND THE WHOLE QUOTA CAPITAL OF A RELATED COMPANY, OCIESSE S.R.L., FOR AGGREGATE CONSIDERATION OF APPROXIMATELY $14.0 MILLION. THE PURCHASE WAS FINANCED THROUGH BORROWINGS UNDER THE CREDIT FACILITY. 15 Item 2. BPC HOLDING CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS UNLESS THE CONTEXT DISCLOSES OTHERWISE, THE "COMPANY" AS USED IN THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SHALL INCLUDE HOLDING AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS. THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED FINANCIAL STATEMENTS OF HOLDING AND ITS SUBSIDIARIES AND THE ACCOMPANYING NOTES THERETO, WHICH INFORMATION IS INCLUDED ELSEWHERE HEREIN. THE FOLLOWING DISCUSSION INCLUDES CERTAIN FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE REFLECTED BY THE FORWARD- LOOKING STATEMENTS IN THE DISCUSSION, AND A NUMBER OF FACTORS COULD ADVERSELY AFFECT FUTURE RESULTS, LIQUIDITY AND CAPITAL RESOURCES. THESE FACTORS INCLUDE, AMONG OTHER THINGS, THE COMPANY'S ABILITY TO PASS THROUGH RAW MATERIAL PRICE INCREASES TO ITS CUSTOMERS, ITS ABILITY TO SERVICE DEBT, THE AVAILABILITY OF PLASTIC RESIN, THE IMPACT OF CHANGING ENVIRONMENTAL LAWS AND CHANGES IN THE LEVEL OF THE COMPANY'S CAPITAL INVESTMENT. ALTHOUGH MANAGEMENT BELIEVES IT HAS THE BUSINESS STRATEGY AND RESOURCES NEEDED FOR IMPROVED OPERATIONS, FUTURE REVENUE AND MARGIN TRENDS CANNOT BE RELIABLY PREDICTED. The Company is highly leveraged. The high degree of leverage could have important consequences, including, but not limited to, the following: (i) a substantial portion of the Company's cash flow from operations must be dedicated to the payment of principal and interest on its indebtedness, thereby reducing the funds available to the Company for other purposes; (ii) the Company's ability to obtain additional debt financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes may be impaired; (iii) certain of the Company's borrowings will be at variable rates of interest, which will expose the Company to the risk of higher interest rates; (iv) the Company is substantially more leveraged than certain of its competitors, which may place the Company at a competitive disadvantage, particularly in light of its acquisition strategy; and (v) the Company's degree of leverage may hinder its ability to adjust rapidly to changing market conditions and could make it more vulnerable in the event of a downturn in general economic conditions or its business. 16 RESULTS OF OPERATIONS 13 WEEKS ENDED SEPTEMBER 30, 2000 (THE "QUARTER") COMPARED TO 13 WEEKS ENDED OCTOBER 2, 1999 (THE "PRIOR QUARTER") NET SALES. Net sales increased $15.5 million, or 17%, to $105.6 million for the Quarter from $90.1 million for the Prior Quarter with an approximate 7% increase in net selling price due primarily to increased raw material costs. Packaging product net sales increased $14.2 million from the Prior Quarter. Within this segment, the addition of Poly-Seal provided Quarter net sales of approximately $12.0 million. Excluding Poly-Seal, overcaps and closures sales decreased $0.4 million from the Prior Quarter. Drink cup sales for the Quarter increased $1.1 million compared to the Prior Quarter. Container sales increased $6.0 million from the Prior Quarter due primarily to increased selling prices as noted above. Custom sales decreased $4.4 million from the Prior Quarter because of a large promotion in the Prior Quarter. Housewares product sales for the Quarter were up $1.3 million from the Prior Quarter. GROSS MARGIN. Gross margin increased by $3.4 million to $25.0 million (24% of net sales) for the Quarter from $21.6 million (24% of net sales) for the Prior Quarter. This increase of 16% includes the combined impact of the added Poly-Seal sales volume, acquisition integration, productivity improvement initiatives, and the cyclical impact of higher raw material costs compared to the Prior Quarter. The cost of the Company's primary raw material, resin, was more than 15% higher than the Prior Quarter. A major focus continues to be the consolidation of products and business of recent acquisitions to the most efficient tooling, providing customers with improved products and customer service. As part of the integration, the Company has announced the closing of its York, Pennsylvania and Minneapolis, Minnesota (acquired in the Cardinal acquisition) facilities to take place by the end of 2000. The Company also closed its Ontario, California facility (acquired in the Cardinal acquisition) in the third quarter of 1999. In addition, the Company made two configuration changes that were completed in the fourth quarter of 1999 with the Minneapolis, Minnesota and Iowa Falls, Iowa locations closing their molding operations. The business from these locations is distributed throughout Berry's facilities. Also, significant productivity improvements were made during the year, including the addition of state-of-the-art injection molding equipment, molds and printing equipment at several of the Company's facilities. OPERATING EXPENSES. Selling expenses increased by $1.2 million to $5.8 million for the Quarter from $4.6 million for the Prior Quarter principally as a result of the Poly-Seal acquisition. General and administrative expenses increased from $5.3 million for the Prior Quarter to $5.5 million for the Quarter. The increase of $0.2 million is primarily attributable to the Poly-Seal acquisition partially offset by decreased accrued bonus expenses. During the Quarter, one-time transition expenses were $0.4 million related to the shutdown and reorganization of facilities and $0.2 million related to acquisitions. In the Prior Quarter, one-time transition expenses were $0.8 million related to acquisitions and $0.4 million related to facility reorganizations. INTEREST EXPENSE. Interest expense increased $2.0 million to $13.5 million for the Quarter compared to $11.5 million for the Prior Quarter primarily due to the increase in borrowings under the Credit Facility to fund the Poly-Seal acquisition. 17 INCOME TAX. For the Quarter, the Company recorded income tax expense of $30,000 compared to $175,000 for the Prior Quarter. The Company continues to operate in a net operating loss carryforward position for Federal income tax purposes. NET LOSS. The Company recorded a net loss of $4.0 million for the Quarter compared to a net loss of $4.5 million for the Prior Quarter for the reasons discussed above. 39 WEEKS ENDED SEPTEMBER 30, 2000 ("YTD") COMPARED TO 39 WEEKS ENDED OCTOBER 2, 1999 ("PRIOR YTD") NET SALES. Net sales increased $60.0 million, or 24%, to $310.0 million for the YTD from $250.0 million for the Prior YTD with an approximate 7% increase in net selling price due primarily to increased raw material costs. Packaging product net sales increased $59.4 million from the Prior YTD. Within this segment, the addition of Cardinal and Poly-Seal provided net sales for the YTD of approximately $32.0 million and $18.7 million, respectively. Excluding Poly-Seal, overcaps and closures sales decreased $0.7 million. Drink cup sales for the YTD were $2.6 million higher than the Prior YTD with the addition of a significant new product. Excluding Cardinal, container sales increased $15.0 million from the Prior YTD, primarily due to increased selling prices as noted above. Custom sales decreased $8.2 million from the Prior YTD with a large promotion in the Prior YTD. Housewares sales for the YTD increased $0.7 million from the Prior YTD despite the Company's decision to exit a low margin account. Within this segment, Cardinal provided sales for the YTD of $1.8 million. GROSS MARGIN. Gross margin increased by $3.8 million to $72.5 million (23% of net sales) for the YTD from $68.7 million (27% of net sales) for the Prior YTD. This increase of 6% includes the combined impact of the added Cardinal and Poly-Seal sales volume, acquisition integration, productivity improvement initiatives, and the cyclical impact of higher raw material costs compared to the Prior YTD. The cost of the Company's primary raw material, resin, has increased over 34% from the Prior YTD. A major focus continues to be the consolidation of products and business of recent acquisitions to the most efficient tooling, providing customers with improved products and customer service. As part of the integration, the Company has announced the closing of its York, Pennsylvania and Minneapolis, Minnesota (acquired in the Cardinal acquisition) facilities to take place by the end of 2000. Additionally, the Company closed its Arlington Heights, Illinois (acquired in the Knight acquisition) facility in the first quarter of 1999 and its Ontario, California facility (acquired in the Cardinal acquisition) in the third quarter of 1999. In addition, the Company made two configuration changes that were completed in the fourth quarter of 1999 with the Minneapolis, Minnesota and Iowa Falls, Iowa locations closing their molding operations. The business from these locations are distributed throughout Berry's facilities. Also, significant productivity improvements were made during the year, including the addition of state-of-the-art injection molding equipment, molds and printing equipment at several of the Company's facilities. OPERATING EXPENSES. Selling expenses increased by $3.4 million to $16.6 million for the YTD from $13.2 million for the Prior YTD principally as a result of the Cardinal and Poly-Seal acquisitions. General and administrative expenses increased by $1.0 million to $18.2 million for the YTD from $17.2 million for the Prior YTD. The increase is primarily attributable to the Cardinal and Poly-Seal acquisitions partially offset by decreased accrued bonus expenses. YTD one-time transition expenses include $3.7 million related to the shutdown and reorganization of facilities and $1.2 million related to acquisitions. One-time transition expenses for Prior YTD were $1.0 million related to facility reorganizations and $1.9 million related to acquisitions. 18 INTEREST EXPENSE. Interest expense increased $8.0 million to $37.5 million for the YTD compared to $29.5 million for the Prior YTD primarily due to the issuance of $75.0 million of 11% Senior Subordinated Notes to support the Cardinal acquisition and an increase in borrowings under the Credit Facility to support the Poly-Seal acquisition. INCOME TAX. The Company's income tax expense was $55,000 for the YTD compared to $204,000 for the Prior YTD. The Company continues to operate in a net operating loss carryforward position for Federal income tax purposes. EXTRAORDINARY ITEM. As a result of amending the Credit Facility, $1.0 million of deferred financing and origination fees related to the Credit Facility have been charged to expense for the YTD as an extraordinary item. NET LOSS. Net loss for the YTD of $15.9 million was a decrease of $13.5 million from a net loss of $2.4 million for the Prior YTD for the reasons discussed above. LIQUIDITY AND SOURCES OF CAPITAL Net cash provided by operating activities was $19.6 million for the YTD, a decrease of $12.8 million from the Prior YTD. The decrease is primarily the result of timing of working capital as the changes in operating assets and liabilities decreased $12.2 million from the Prior YTD. Net cash used for investing activities decreased from $96.4 million in the Prior YTD to $86.8 million for the YTD principally as a result of the difference in the acquisition price of Cardinal versus Poly-Seal. YTD capital spending of $23.6 million included $12.6 million for molds, $3.4 million for molding and printing machines, $5.8 million for buildings and systems, and $1.8 million for accessory equipment and systems. Net cash provided by financing activities was $74.2 million for the YTD compared to net cash provided by financing activities of $63.9 million for the Prior YTD. The increase of $10.3 million can be primarily attributed to the issuance of the Series A-1 Preferred Stock to finance the Poly-Seal acquisition. The Company anticipates that its cash interest, working capital and capital expenditure requirements for 2000 will be satisfied through a combination of funds generated from operating activities and cash on hand, together with funds available under the Credit Facility. Management bases such belief on historical experience and the funds available under the Credit Facility. However, the Company cannot predict its future results of operations. At September 30, 2000, the Company's cash balance was $9.8 million, and Berry had unused borrowing capacity under the Credit Facility's borrowing base of approximately $34.7 million. 19 The 1994 Indenture, 1998 Indenture, and 1999 Indenture restrict, and the Credit Facility prohibits, Berry's ability to pay any dividend or make any distribution of funds to Holding to satisfy interest and other obligations on the 1996 Notes. Based upon historical operating results, without a substantial increase in the operating results of Berry, management anticipates that it will be unable to generate sufficient cash flow to permit a dividend or payment under the tax sharing agreement to Holding in an amount sufficient to meet Holding's interest payment obligations under the 1996 Notes. Interest on the 1996 Notes is payable semi-annually on June 15 and December 15 of each year. However, from December 15, 1999 until June 15, 2001, Holding may, at its option, pay interest, at an increased rate of 0.75% per annum, in additional 1996 notes valued at 100% of the principal amount thereof. On June 15, 2000, Holding issued approximately $7.4 million aggregate principal amount of additional 1996 Notes in satisfaction of its interest obligation. After June 15, 2001 or in the event that Holding does not pay interest in additional notes, management anticipates that such interest obligations will only be met by refinancing the 1996 Notes or raising capital through equity offerings. We cannot assure you that then-current market conditions would permit Holding to consummate a refinancing or equity offering. 20 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is party to various legal proceedings involving routine claims which are incidental to its business. Although the Company's legal and financial liability with respect to such proceedings cannot be estimated with certainty, the Company believes that any ultimate liability would not be material to its financial condition. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: None (b) Reports on Form 8-K: None. 21 SIGNATURE 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. Berry Plastics Corporation BPC Holding Corporation Berry Iowa Corporation Berry Tri-Plas Corporation Berry Sterling Corporation Aerocon, Inc. PackerWare Corporation Berry Plastics Design Corporation Venture Packaging, Inc. Venture Packaging Midwest, Inc. Berry Plastics Technical Services, Inc. Knight Plastics, Inc. CPI Holding Corporation Cardinal Packaging, Inc. Berry Plastics Acquisition Corporation II Poly-Seal Corporation Berry Plastics Acquisition Corporation III November 14, 2000 By: _/S/ JAMES M. KRATOCHVIL James M. Kratochvil Executive Vice President, Chief Financial Officer, Treasurer and Secretary of the entities listed above (Principal Financial and Accounting Officer) NIM Holdings Limited Norwich Acquisition Limited Berry Plastics U.K. Limited By: /S/ JAMES M. KRATOCHVIL James M. Kratochvil Director of the entities listed above (Principal Financial and Accounting Officer) CBP Holdings S.r.l. Capsol S.p.a. Ociesse S.r.l. By: /S/ JAMES M. KRATOCHVIL James M. Kratochvil Director of the entities listed above (Attorney-in-fact for all Financial and Accounting Matters) 22