-----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, BPdo9gaCMa8rWALWQLk0t0sxkvNyOAzKIcEmWCO0/IwbYYdmRlEzG/f2O0iAiFXY lhjTxjNoDDDlpfWWF+apdw== 0000897101-95-000469.txt : 19951215 0000897101-95-000469.hdr.sgml : 19951215 ACCESSION NUMBER: 0000897101-95-000469 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19951214 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ULTRA PAC INC CENTRAL INDEX KEY: 0000813134 STANDARD INDUSTRIAL CLASSIFICATION: CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670] IRS NUMBER: 411581031 STATE OF INCORPORATION: MN FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18252 FILM NUMBER: 95601628 BUSINESS ADDRESS: STREET 1: 21925 INDUSTRIAL BLVD CITY: ROGERS STATE: MN ZIP: 55374 BUSINESS PHONE: 6124288340 MAIL ADDRESS: STREET 1: 21925 INDUSTRIAL BLVD CITY: ROGERS STATE: MN ZIP: 55374 10-Q 1 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: October 31, 1995 ___ 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: 0-18252 ULTRA PAC, INC. (Exact name of Registrant as specified in its Charter) Minnesota 41-1581031 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification number) 21925 Industrial Boulevard, Rogers, Minnesota 55374 (Address of principal executive offices) Zip Code (612) 428-8340 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (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 ___ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock No Par Value 3,766,215 Class of Common Stock Shares outstanding as of December 1, 1995 ULTRA PAC, INC. INDEX PART I. FINANCIAL INFORMATION Item 1. Financial statements Balance Sheets as of October 31, 1995 and January 31, 1995 3 Statements of Operations for the three and nine months ended October 31, 1995 and 1994 5 Statements of Cash Flows for the nine months ended October 31, 1995 and 1994 6 Notes to Interim Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 22 Ultra Pac, Inc. BALANCE SHEETS ASSETS October 31, January 31, 1995 1995 (unaudited) CURRENT ASSETS Cash $ 500 $ 145,731 Accounts receivable - trade, less allowance for doubtful receivables of $283,000 at October 31, 1995 and $245,000 at January 31, 1995 4,577,571 4,386,376 Refundable sales and income taxes 1,371,531 731,576 Inventories Raw materials 3,164,157 3,318,590 Work in process 2,364,596 3,389,893 Finished goods 5,243,774 3,632,417 Deferred income taxes 239,572 1,094,833 Other current assets 331,781 170,607 ----------- ----------- Total current assets 17,293,482 16,870,023 PROPERTY, EQUIPMENT AND IMPROVEMENTS Building and improvements 3,302,872 2,476,582 Manufacturing equipment 22,334,792 18,523,467 Extrusion equipment 12,191,279 7,269,772 Other equipment and furnishings 1,835,391 1,647,035 Leasehold improvements 875,923 860,301 ----------- ----------- 40,540,257 30,777,157 Less accumulated depreciation 8,583,973 6,346,606 ----------- ----------- 31,956,284 24,430,551 Deposits on manufacturing equipment 153,288 1,409,005 Land 737,317 737,317 ----------- ----------- 32,846,889 26,576,873 OTHER Security deposits and leasehold costs 992,286 842,491 Investments in affiliates and other 183,900 32,400 ----------- ----------- 1,176,186 874,891 ----------- ----------- $51,316,557 $44,321,787 =========== =========== See accompanying notes to interim financial statements. Ultra Pac, Inc. BALANCE SHEETS - CONTINUED LIABILITIES AND SHAREHOLDERS' EQUITY October 31, January 31, 1995 1995 (unaudited) CURRENT LIABILITIES Bank overdraft $ 107,323 -- Current maturities of long-term obligations 3,899,745 2,525,272 Accounts payable - principally trade 8,715,148 5,887,564 Accrued liabilities Salaries and commissions 772,023 781,782 Interest and other 421,189 582,834 Income taxes payable -- 322,054 ----------- ----------- Total current liabilities 13,915,428 10,099,506 LONG-TERM OBLIGATIONS, less current maturities 25,580,618 20,227,316 DEFERRED INCOME TAXES 354,497 1,408,233 SHAREHOLDERS' EQUITY Common stock - authorized, 5,000,000 shares of no par value; issued and outstanding, 3,766,215 shares 7,631,572 7,631,572 Additional contributed capital 1,213,000 1,213,000 Retained earnings 2,621,442 3,742,160 ----------- ----------- 11,466,014 12,586,732 ----------- ----------- $51,316,557 $44,321,787 =========== =========== See accompanying notes to interim financial statements. Ultra Pac, Inc. STATEMENTS OF OPERATIONS (unaudited)
Three months ended October 31, Nine months ended October 31, 1995 1994 1995 1994 Net Sales $15,374,008 $14,450,291 $52,511,986 $43,805,517 Cost of products sold 13,479,547 10,546,649 41,563,203 31,160,041 ---------- ---------- ---------- ---------- Gross profit 1,894,461 3,903,642 10,948,783 12,645,476 Operating expenses Marketing and sales expense 2,775,201 2,606,343 8,754,784 7,709,714 Administrative expense 689,421 617,328 2,061,677 1,685,735 ---------- ---------- ---------- ----------- 3,464,622 3,223,671 10,816,461 9,395,449 ---------- ---------- ---------- ----------- Operating profit (loss) (1,570,161) 679,971 132,322 3,250,027 Interest expense and other 678,599 394,363 1,863,040 1,044,798 ---------- ---------- ---------- ----------- Earnings (loss) before income taxes (2,248,760) 285,608 (1,730,718) 2,205,229 Income tax provision (benefit) (805,000) 107,000 (610,000) 827,100 ---------- ---------- ---------- ---------- NET EARNINGS (LOSS) $(1,443,760) $ 178,608 $(1,120,718) $ 1,378,129 ========== =========== ========== =========== Earnings (loss) per common and common equivalent share $( .38) $ .05 $( .30) $ .37 ========== =========== =========== =========== Weighted average number of common and common equivalent shares outstanding 3,766,215 3,768,093 3,766,215 3,766,203 ========== ========== ========== ==========
See accompanying notes to interim financial statements. Ultra Pac, Inc. STATEMENTS OF CASH FLOWS (unaudited) Nine months ended October 31, 1995 1994 Increase (Decrease) in Cash Cash flows provided by (used in) operating activities Net earnings (loss) $(1,120,718) $1,378,129 Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Depreciation of equipment, furnishings and improvements 2,605,649 1,921,416 Deferred income taxes (198,475) 351,638 Sale of equipment, net (8,297) 3,250 Change in assets and liabilities: Accounts receivable (191,195) (924,131) Refundable sales and income taxes (639,955) (139,824) Inventories (431,627) (2,407,711) Other current assets (161,174) 12,374 Accounts payable 2,827,584 1,359,140 Bank overdraft 107,323 561,076 Accrued liabilities (171,404) 92,376 Income taxes payable (322,054) 450,686 ---------- ---------- Net cash provided by operating activities 2,295,657 2,658,419 Cash flows from investing activities Capital expenditures (9,067,868) (6,731,158) Investments in affiliates and other (151,500) (4,800) Security deposits and leasehold costs (149,795) (59,924) Proceeds from sale of equipment 200,500 -- --------- ---------- Net cash used in investing activities (9,168,663) (6,795,882) Cash flows from financing activities Proceeds from long-term obligations 9,005,265 5,010,981 Principal payments under long-term obligations (2,277,490) (1,318,305) ---------- ---------- Net cash provided by financing activities 6,727,775 3,692,676 ---------- ---------- Net change in cash (145,231) (444,787) Cash at beginning of period 145,731 445,287 ---------- ---------- Cash at end of period $ 500 $ 500 ========== ========== See accompanying notes to interim financial statements. Ultra Pac, Inc. NOTES TO INTERIM FINANCIAL STATEMENTS October 31, 1995 (unaudited) (1) Basis of Presentation The interim financial statements presented herein are unaudited but, in the opinion of management reflect all adjustments necessary for a fair presentation of results for such periods. The results of operations for any interim period are not necessarily indicative of results for the full year. Information as of January 31, 1995 was taken from the Company's Annual Report to Shareholders on Form 10-K for the year ended January 31, 1995. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's Annual Report to Shareholders on Form 10-K for the year ended January 31, 1995. (2) Refundable Sales and Income Taxes Refundable sales and income taxes consist of the following: October 31, January 31, 1995 1995 --------- --------- Sales taxes $ 737,821 $731,576 Income taxes 633,710 -- $1,371,531 $731,576 Refundable sales taxes represent sales tax paid on certain manufacturing equipment used in Minnesota. The Company is allowed to file for this refund up to twice a year. (3) Investment in Affiliates The Company's investment in affiliates includes 49% and 40% interests in Ultra Pac SudAmerica, S.A. and Ultra Pac Middle East EC, respectively. Ultra Pac SudAmerica, S.A. was formed for the purpose of manufacturing, marketing and selling plastic packaging products in Chile and Ultra Pac Middle East EC was formed for the purpose of marketing and selling plastic packaging products in the Middle East. (3) Investment in Affiliates-continued: The Company's investments in affiliates are accounted for using the equity method. As of October 31, 1995, the Company had outstanding receivables from affiliates of $453,458. (4) Long-Term Obligations At January 31, 1995, the Company had an $8,000,000 revolving credit facility with a bank. This credit facility was amended in March, June and October 1995 to increase the amount available to $10,000,000 through December 15, 1995 and $9,500,000 through May 31, 1997. In addition, certain covenants relating to financial performance and capital expenditures were also amended. The Company is in the process of renegotiating its credit facility with this bank to: (i) increase the amounts available under the current credit facility; (ii) address the potential violation of the $9,500,000 credit facility limit which will be effected on December 15, 1995; and, (iii) re-write the covenants to address ongoing compliance. At October 31, 1995, the Company was in violation of certain covenants with its bank, related to certain financial performance ratios, which have subsequently been waived. In addition, the Company anticipates that, at January 31, 1996, it will be in violation of some of its lending covenants with its lenders. At January 31, 1993, 1994 and 1995, the Company was also in violation of lending covenants with its lenders related to certain financial performance ratios, who had issued waivers of such covenant violations. While there is no assurance that the Company's lenders will issue waivers of violations of the Company's covenants in the future, the Company intends to work with its lenders to achieve a status of ongoing compliance. In connection with the purchase of two extrusion lines, additional manufacturing equipment, and molds, the Company borrowed $7,073,666 on a non-revolving equipment loan agreement with interest at 2.5% above the LIBOR rate. The agreement provided for borrowings on specific equipment, subject to the following terms: Facility A: payable in monthly installments, including interest, over a seven year period ($5,987,327 advanced through October 31, 1995); Facility B: payable in monthly installments, including interest, over a three year period ($1,086,339 advanced through October 31, 1995). (5) Common Stock In July 1995, the Company's Board of Directors granted non-qualified stock options for 15,000 shares at an exercise price of $6.00 per share. These options were issued under the Company's 1991 Incentive Stock Option Plan and expire in July 2000. In July 1995, a non-qualified stock option for 50,000 shares at a purchase price of $8.88 expired. In July 1995, the Company's Board of Directors granted a non-qualified stock option for 20,000 shares to the Company's President and Chief Executive Officer. The option has an exercise price of $6.00 per share and expires in July 2000. In July 1995, the Company granted options for 6,500 shares under the Outside Directors' Option Plan at an exercise price of $5.75 per share. These options expire in July 2000. ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations: The following table sets forth, for the periods indicated, information derived from the Statements of Operations of the Company, expressed as a percentage of net sales.
Three Months Ended Nine Months Ended October 31, October 31, ----------- ----------- 1995 1994 1995 1994 ---- ---- ---- ---- Net sales 100.0% 100.0% 100.0% 100.0% Cost of products sold 87.6 73.0 79.1 71.2 ---- ---- ---- ---- Gross profit 12.4 27.0 20.9 28.8 Operating expenses Marketing and sales 18.1 18.0 16.7 17.6 Administrative 4.5 4.3 3.9 3.8 ---- ---- ---- ---- 22.6 22.3 20.6 21.4 ---- ---- ---- ---- Operating profit (loss) (10.2) 4.7 0.3 7.4 Interest expense and other 4.4 2.7 3.5 2.4 ---- ---- ---- ---- Earnings (loss) before income taxes (14.6) 2.0 (3.2) 5.0 Income tax provision (benefit) (5.2) 0.8 (1.1) 1.9 ---- ---- ---- ---- NET EARNINGS (LOSS) (9.4)% 1.2% (2.1)% 3.1% ==== ==== ==== ====
Net Sales: Net sales increased 6.4% from $14,450,291 to $15,374,008 for the three months ended October 31, 1995 as compared to the three months ended October 31, 1994 and 19.9% from $43,805,517 to $52,511,986 for the nine months ended October 31, 1995 as compared to the nine months ended October 31, 1994. The growth rate in sales for both the three and nine month periods ended October 31, 1995 was significantly lower than historical growth rates. The increase in net sales during the three and nine month periods ended October 31, 1995 reflects increased sales of the Company's produce containers and line of Ultra Lite Bakeables(TM) (which the Company first introduced during the summer of 1994) in combination with several price increases the Company implemented between October 1994 and April 1995. While sales dollars have continued to grow in all product line categories, unit volume of bakery and deli containers during the three and nine month periods ended October 31, 1995 was less than during the same periods last year. The Company believes that the decline in unit volume of its bakery containers and selected deli containers which may be used in bakery applications primarily occurred due to the increasingly competitive nature of the marketplace that has been caused by aggressive pricing practices by competitors and an increase in the number of packaging manufacturers serving the bakery/deli market. To a lesser degree, the Company also believes that changing consumer buying habits, including a shift from high-fat to low or non-fat products, may have accounted for lower unit sales of certain bakery/deli containers. However, the Company believes that its line of bakery and deli containers can accommodate bakery products which satisfy such shifting consumer buying habits. Based on sales activity through November 1995, the Company anticipates that net sales in the fourth quarter will marginally exceed net sales recorded during the fourth quarter last year. In addition, the Company expects continuing growth in unit sales of its line of produce containers during the fiscal year ending January 31, 1997, and believes that such growth will reflect the produce industry's trend toward increasing use of plastic clamshell containers. The Company's expectation regarding sales of produce containers assumes no substantial, unforeseen weather conditions of the type that negatively affected the Company's sales of produce containers earlier this year. The Company also expects to see further increases in sales growth from its line of Ultra Lite Bakeables. Gross Profit: Gross profit margins decreased from 27.0% to 12.4% for the three months ended October 31, 1995 as compared to the three months ended October 31, 1994 and from 28.8% to 20.9% for the nine months ended October 31, 1995 as compared to the nine months ended October 31, 1994. The decrease in gross profit margins during the three months and nine months ended October 31, 1995 was primarily due to the following three factors: (i) higher raw material costs; (ii) higher fixed overhead costs that the Company incurred to support a significant increase in anticipated sales that did not materialize; and (iii) higher labor costs. The higher costs related to these three factors could not be offset by price increases to the Company's customers. The Company has experienced significant increases in raw material costs from its suppliers of virgin PETE resin and sources of recycled PETE material. Among other factors, these prices reflect increasing demand from the use of PETE resin by apparel manufacturers and soft drink bottlers, among other users, worldwide. The Company believes that the supply of PETE will increase, as refiners expand their capacity during the next 12 months, and that market prices should stabilize as a result. While the Company has increased its prices to customers, such increases have not offset these increases in raw material costs. Higher fixed overhead costs resulted primarily from the addition of thermoforming and extrusion equipment, molds, and leased facilities to increase manufacturing capacity based on anticipated sales. As described above, the Company experienced lower than anticipated sales of bakery and deli containers during the third quarter and nine months ended October 31, 1995 and, as described below, it experienced lower than anticipated sales of produce containers during the nine months ended October 31, 1995. At the beginning of the California berry season, the Company began expanding its capacity to meet an anticipated increase in demand for the Company's berry containers based on an anticipated increase in the overall berry harvest. Despite heavy rains in California earlier this year, indications were that, although berry production might be delayed, it would still meet the Company's earlier expectations. However, in mid-summer, berry growers also suffered an extended period of 100 degree-plus heat which compounded the effect of the prior excessive rainfall. These factors reduced the overall size of the berry crop and caused a higher than normal percentage of the berry crop to be used for frozen and other applications, rather than for fresh berry produce. This led to a reduction in the demand for the Company's packaging. As a result of this reduction in demand, management significantly reduced its temporary workforce. However, the Company incurred higher labor costs due to the combined effect of a wage increase plan the Company implemented and the fact that production efficiency did not increase at the same rate as the increase in wages. Because the Company had experienced an excessive level of employee turnover which it believes was related to low wage rates, it implemented the wage increase plan to become more competitive in the local labor market. Management continues to believe the long-term effect of this action will be an increase in productivity. The Company has taken a number of other actions which are intended to improve gross margins on a long-term basis. The most significant actions are the installation of a fifth extrusion line in May 1995 and a sixth extrusion line in September 1995. The cost of plastic sheet which is extruded by the Company has been significantly lower than the cost of plastic sheet purchased from outside sources. While the Company anticipates that its demand for PETE extruded sheet in the fourth quarter may be less than its capacity to extrude, it still anticipates having to purchase PETE extruded sheet from outside sources during fiscal 1997. Although the Company believes that the fifth and sixth extrusion lines will provide long-term cost savings, it does not anticipate realizing significant savings since extrusion operations may run at less than full capacity during the remainder of the fiscal year ending January 31, 1996. Also, the Company is negotiating a three-year supply agreement for a major portion of its virgin resin needs with a major PETE resin supplier. This supply agreement will likely provide for minimum resin purchase quantities by the Company at a fixed price that is intended to be favorable to the Company under current market conditions. While the Company believes that such a supply agreement would have a positive impact on the Company's gross profit margins in the fiscal year ending January 31, 1997, the favorable pricing will not offset resin price increases that the Company has experienced during the past year. While the Company believes that the market price of PETE resin is expected to stabilize during the next 12 months, in the event of a price decline, the advantage derived from the fixed price arrangement will diminish and may even require the Company to pay a higher price for PETE resin than the market price then in effect. The Company believes that during the fourth quarter ending January 31, 1996 and during the fiscal year ending January 31, 1997, its fixed overhead costs will grow at a slower rate than during the fiscal years ended January 31, 1993, 1994, and 1995. Although the Company believes these actions will result in an improvement in gross profit margin performance in upcoming quarters, because of historical seasonality of sales and earnings, the Company does not expect to realize much impact from these actions until the second quarter ending July 31, 1996. Operating Expenses: Marketing and sales expense increased from $2,606,343, or 18.0% of net sales, to $2,7775,201 or 18.1% of net sales, during the three months ended October 31, 1995 as compared to the three months ended October 31, 1994 and increased from $7,709,714, or 17.6% of net sales to $8,754,784, or 16.7% of net sales, for the nine months ended October 31, 1995 as compared to the nine months ended October 31, 1994. The increase in marketing and sales expense for both periods was primarily due to the increase in net sales, resulting in an increase in freight and commission expense. During the nine months ended October 31, 1995, the decrease in marketing and sales expense as a percentage of net sales is primarily the result of sales growing at a faster rate than marketing and sales expense. Administrative expense increased from $617,328, or 4.3% of net sales, to $689,421, or 4.5% of net sales, for the three months ended October 31, 1995, as compared to the three months ended October 31, 1994 and increased from $1,685,735, or 3.8% of net sales, to $2,061,677, or 3.9% of net sales for the nine months ended October 31, 1995 as compared to the nine months ended October 31, 1994. The increase in administrative expense during the three and nine month periods ended October 31, 1995 was to support the increase in net sales. Interest Expense and Other: Interest expense and other increased from $394,363, or 2.7% of net sales, to $678,599, or 4.4% of net sales, for the three months ended October 31, 1995, as compared to the three months ended October 31, 1994 and increased from $1,044,798, or 2.4% of net sales, to $1,863,040, or 3.5% of net sales for the nine months ended October 31, 1995, as compared to the nine months ended October 31, 1994. The increase was primarily due to higher debt levels and increases in the average rate of interest paid by the Company. The increase in interest rates is primarily due to an increase in base rates and in increase in the differentials charged over the base rates. Income Taxes: The Company recognized an income tax benefit of $805,000 and $610,000 for operating losses incurred during the three and nine months ending October 31, 1995, respectively. As of October 31, 1995, the Company has approximately $2,930,000 of deferred tax liabilities offset by $2,576,000 of deferred tax assets netting to $354,000. The Company believes that these deferred tax assets are realizable based on future projected earnings and reversal of existing deferred tax liabilities. Extrusion Equipment Relocation Expense: In its April 30, 1995 Form 10-Q, the Company reported that it expected to incur expenses in connection with the relocation of four of its extrusion lines from their existing locations into the newly constructed 83,000 square foot leased facility completed in March 1995. Such extrusion equipment relocation expenses do not pertain to installation of the fifth or sixth extrusion lines which were installed in May and September 1995, respectively. The resulting consolidation of all extrusion activities into a single location specifically designed to optimize such operations is expected to improve efficiency, as well as to increase extrusion capacity. These relocation expenses, estimated at $600,000, will include dismantling the four extrusion lines, as well as moving, installing and connecting the extrusion lines at the new facility. While the Company had earlier anticipated the relocation of the four extrusion lines to take place during the third and fourth quarters of fiscal 1996, management has elected to delay the move until sometime in fiscal 1997. The decision to delay moving these extrusion lines is primarily the result of two factors: (1) management's desire to defer a significant one-time charge; and, (2) no immediate plans to purchase additional thermoforming lines which, if purchased, would be installed in the space to be vacated by the four extrusion lines. The relocation of the four extrusion lines will be scheduled based on the Company's demand for extruded plastic sheet and the desire to minimize the need to purchase sheet from outside sources. The moving expenses will be charged to earnings as they are incurred. Net Loss: As a result of the factors discussed above, the Company incurred a net loss of $1,443,760, or $.38 per share, for the three months ended October 31, 1995 compared to net earnings of $178,608, or $.05 per share for the three months ended October 31, 1994. For the nine months ended October 31, 1995, the Company incurred a net loss of $1,120,718, or $.30 per share, compared to net earnings of $1,378,129, or $.37 per share, for the nine months ended October 31, 1994. The Company has reported that it expects to report a net loss in the fourth quarter and for the fiscal year ending January 31, 1996. The Company also anticipates that the net loss in the fourth quarter ending January 31, 1996 will be substantially larger than the net loss of $327,245 incurred during the fourth quarter last year. The Company believes inflation has not significantly affected its results of operations. Liquidity and Capital Resources: Working capital decreased from $6,770,517 on January 31, 1995 to $3,378,054 on October 31, 1995. This decrease is primarily due to increases in accounts payable and current maturities of long term obligations and a decrease in deferred income taxes, offset in part by increases in accounts receivable, inventories, and refundable sales and income taxes. Accounts receivable increased from $4,386,376 on January 31, 1995 to $4,577,571 on October 31, 1995. This increase is primarily due to the increase in net sales. Inventories increased from $10,340,900 on January 31, 1995 to $10,772,527 on October 31, 1995. This increase was principally due to an increase in the level of finished goods, offset in part by a decrease in work in progress. The increase in finished goods is primarily due to the addition of inventories of products that were introduced during the past year. The decrease in work in progress was due to improved production planning. For the nine months ended October 31, 1995, $2,295,657 of cash was provided by operating activities. This reflects an increase in accounts payable and other funds generated through operations, offset in part by increases in accounts receivable, inventories, refundable sales and income taxes, and a decrease in income taxes payable. Property, equipment and improvements increased from $26,576,873 on January 31, 1995 to $32,846,889 on October 31, 1995. The Company purchased $9,067,868 of property and equipment during the nine months ended October 31, 1995. These equipment purchases included the Company's fifth and sixth extrusion lines, thermoforming equipment, molds, a building addition and other manufacturing equipment, as well as additional deposits of $153,288 on additional manufacturing equipment. As of October 31, 1995, the Company had borrowed $9,292,326 under its $10,000,000 credit facility, leaving $707,674 available. In addition, the Company borrowed all the available funds under its $7,073,666 non-revolving equipment loan agreement for the purchase of the fifth and sixth extrusion lines, additional thermoforming lines and molds. At October 31, 1995, the Company was in violation of certain covenants with its bank, related to certain financial performance ratios, which have subsequently been waived. In addition, the Company anticipates that, at January 31, 1996, it will be in violation of some of its lending covenants with its lenders. At January 31, 1993, 1994 and 1995, the Company was also in violation of lending covenants with its lenders related to certain financial performance ratios, who had issued waivers of such covenant violations. While there is no assurance that the Company's lenders will issue waivers of violations of the Company's covenants in the future, the Company intends to work with its lenders to achieve a status of ongoing compliance. Because the Company's business is highly capital-intensive, it will rely heavily on bank financing and other financing activities to fund its capital requirements. Furthermore, because of the Company's operating losses through October 31, 1995 and an increasing level of debt, the Company may find that financing may be more difficult to secure, may be more costly than its current credit facility, and may require covenants or restrictions more difficult to comply with than are currently in effect. As of October 31, 1995, the Company had outstanding capital expenditures of approximately $454,000 and was reviewing additional capital expenditures of approximately $274,000. On October 31, 1995, approximately $153,000 of cash deposits had been made in connection with these outstanding commitments. Most of the commitments and capital expenditures under review are for molds and other manufacturing equipment. The Company expects that throughout the fiscal year ending January 31, 1997, its anticipated capital expenditures will be substantially lower than the now-expected $9,700,000 in capital expenditures during the fiscal year ending January 31, 1996 due to no anticipated purchases of extrusion equipment and modest expenditures in thermoforming. In August 1995, the Company entered into a Shareholder's Joint Venture Agreement with Integrity Investrading S.A. (a company located in Chile). This joint venture will establish a Chilean corporation ("Ultra Pac SudAmerica S.A.") for the purpose of manufacturing, marketing and selling plastic packaging in Chile. The Company owns 49% and Integrity owns 51% of the newly formed corporation. During August 1995, the Company contributed $147,000 and Integrity contributed $153,000 to be used to equip the plant to begin manufacturing operations and as initial startup capital. The Company sold to Ultra Pac SudAmerica a thermoforming line and miscellaneous related equipment for $113,000. Although the Company realized a $65,000 gain from the sale of this equipment, such gain will be recognized over the depreciable life of the equipment. The Company intends to dispose of certain assets which are not meeting operational objectives. These include the tooling related to its line of floral packaging, which the Company has recently listed with a sales agent, as well as the machinery and equipment used in its resin recycling plant. During the past 12 months, the Company has experienced increasing difficulty in finding reliable sources of post-consumer PETE for reprocessing in its recycling plant. As a result, the Company shut down its recycling plant in August 1995. The Company is evaluating the disposition of its recycling equipment through the formation of a recycling joint venture with a party located in Mexico. As proposed, the Company would initially purchase post-consumer PETE from the Mexican joint venture for processing in its recycling plant. After the Company has had time to evaluate the process and the joint venture has secured steady and reliable sources of post-consumer material for reprocessing, the equipment would then be sold to the joint venture and moved to the Company's partner's facilities in Mexico. The Company believes the recycled material from this joint venture will be at a lower cost than it currently pays outside suppliers primarily because the joint venture partner has access to lower priced raw materials. The Company intends to finance its operations and anticipated capital expenditures through debt financing currently in place and being negotiated, as previously discussed, and from cash flows from operations. Seasonality of Sales and Earnings: The Company's product mix has become increasingly seasonal since fiscal 1994. From late in the fourth quarter through almost all of the second quarter, a higher percentage of the Company's production capacity has been dedicated to long production runs of berry containers for the produce-grower's market. In the third quarter, the Company gradually re-directs the greatest share of its production capacity toward bakery and deli containers. Because the Company's extensive line of bakery and deli containers includes numerous products with lower customer demand, production runs can be either long or short. As a result, the cost of manufacturing certain bakery and deli containers is higher due to shorter production runs and more frequent machine setup procedures, while other bakery and deli products have long production runs and lower manufacturing costs. Since 1994, the average gross profit margin for all bakery and deli containers produced during this period is lower than the gross profit margins on the Company's berry containers because, during the fourth quarter of recent years, the Company has been increasing fixed manufacturing overhead costs as it prepared to accommodate substantially higher customer demand anticipated in the next fiscal year. This has resulted in a loss in the fourth quarter in recent years. The Company does not anticipate substantial increases in fixed overhead costs during the fourth quarter ending January 31, 1996, primarily because it will not be increasing extrusion or thermoforming capacity substantially during the quarter. Although the Company expects to incur a loss in the fourth quarter ending January 31, 1996, the loss will be primarily attributable to higher raw material prices, higher fixed overhead costs, and higher labor costs, as previously discussed, which resulted in a net loss for the third quarter and nine months ended October 31, 1995, rather than the seasonality of sales and earnings discussed above. Future changes in these sales and earnings patterns will depend on the Company's ability to increase sales in the fourth quarter of: (1) higher margin products; or (2) existing products that would give the Company additional ability to improve production output relative to cost. PART II OTHER INFORMATION ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) List of Exhibits: 10.1 Amendment dated October 18, 1995 to the Credit and Security Agreement with Norwest Bank, Minnesota N.A., dated June 13, 1994 10.2 Waiver dated December 12, 1995 related to Credit and Security Agreement with Norwest Bank, Minnesota N.A. dated June 13, 1994 (b) Reports on Form 8-K: None 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. DATED: December 13, 1995 ULTRA PAC, INC. --------------- (Registrant) /s/Calvin Krupa Calvin Krupa, President and Chief Executive Officer /s/Bradley Yopp Bradley Yopp, Chief Financial Officer EX-10.1 2 FIFTH AMENDMENT OF LOAN DOCUMENTS THIS AMENDMENT, made as of the l8 day of October, 1995, by and between ULTRA PAC, INC., a Minnesota corporation (the "Borrower"), WEST ONE BANK, IDAHO, an Idaho banking corporation ("West One") and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association ("Norwest") (West One and Norwest, respectively and collectively, together with any lender who subsequently becomes a party hereto, the "Lenders"). WITNESSETH: WHEREAS, the Borrower and the Lenders entered into that certain Credit and Security Agreement dated June 13, 1994, by and between the Borrower and the Lenders, as amended by that certain First Amendment of Loan Documents, dated July 1, 1994 (the "First Amendment") and that certain Second Amendment of Loan Documents, dated March 7, 1995 (the "Second Amendment") and that certain Third Amendment of Loan Documents, dated June 1, 1995 (the "Third Amendment") and that certain Fourth Amendment of Loan Documents, dated June 30, 1995 (the "Fourth Amendment") (such agreement, as so amended, the "Credit Agreement"), pursuant to which the Lenders agreed to extend an $9,500,000 line of credit (the "Revolving Loan") and additional term loans in the aggregate amount of $6,000,000 (the "Term Loans") to the Borrower; and WHEREAS, the Revolving Loan is evidenced by that certain $5,225,000 revolving note originally dated June 13, 1994, executed by the Borrower and payable to the order of Norwest, as heretofore and hereinafter amended, (the "$5,225,000 Revolving Note") and that certain $4,275,000 revolving note originally dated June 13, 1994, executed by the Borrower and payable to the order of West One, as heretofore and hereinafter amended, (the "$4,275,000 Revolving Note") (the $5,225,000 Revolving Note and the $4,275,000 Revolving Note are hereinafter collectively referred to as the "Revolving Notes"); and WHEREAS, the Term Loan is evidenced by that certain $3,300,000 Term Note originally dated June 13, 1994, executed by the Borrower and payable to the order of Norwest, as heretofore and hereinafter amended, (the "$3,300,000 Note") and that certain $2,700,000 Term Note originally dated June 13, 1994, executed by the Borrower and payable to the order of West One (the "$2,700,000 Note") (the $3,300,000 Note and the $2,700,000 Note are hereinafter collectively referred to as the "Term Notes"); and WHEREAS, the Borrower has requested the Lenders (i) extend an additional $500,000 to be evidenced by the promissory notes in the form attached hereto as Exhibit A-1 and Exhibit A-2 (collectively, the "Temporary Notes"), which will temporarily increase the amount of the Revolving Loan through December 15, 1995; and (ii) amend the definition of the "Borrowing Base" (as that term is defined in the Credit Agreement); and WHEREAS, the Lenders are willing to agree to the foregoing subject to the terms and conditions contained herein. NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Amendments of Credit Agreement. A. Section 1.1 of the Credit Agreement entitled "Borrowing Base" shall be deleted in its entirety and the following substituted therefor: "Borrowing Base" means, at any time and subject to change from time to time in the Lenders' sole discretion, the lesser of (a) $10,000,000 or (b) the sum of (i) 80% of Eligible Accounts, plus (ii) 50% of Eligible Inventory. B. The Credit Agreement and the "Loan Documents" (as defined in the Credit Agreement) are hereby amended to incorporate the terms of the Temporary Notes. Accordingly, all references therein to "Note," "Notes," "Revolving Note," "Revolving Notes," "Amount of the Commitment," "Revolving Loan," "Indebtedness" and other similar definitions hereby incorporate and include the Temporary Notes and this amendment . 2. Amendment of Loan Documents. The Credit Agreement, the Revolving Notes, the Term Notes, and the "Loan Documents" (as defined in the Credit Agreement) are each hereby amended to incorporate the foregoing amendments. 3. Representations. Except for the Borrower's temporary noncompliance with its Borrowing Base Requirements and Maximum Debt to Tangible Net Worth covenant as of August 31, 1995 (the "Existing Defaults"), the Borrower hereby warrants and represents to the Lenders that (a) each and all of the representations and warranties set forth and contained in the Credit Agreement, the Loan Documents and the documents related thereto are true, correct and complete in all respects as of the date hereof, and (b) no Event of Default (as that term is defined in the Credit Agreement), and no event, circumstance or condition which with the giving of notice or the passage of time or both would constitute an Event of Default, has occurred or is continuing as of the date hereof, unless specifically waived in writing by the Lenders. The Lenders' agreement to waive the specific covenants set forth herein should not be construed an express or implied agreement of the Lenders to waive any future violations of the Credit Agreement. 4. No Set-Off. The Borrower hereby acknowledges and agrees with the Lenders that (i) the Note, the Credit Agreement, and any and all other documents related thereto, executed by it and delivered to the Lenders remain in full force and effect in accordance with its original terms, except as previously amended in writing or as amended herein, and (ii) no events, conditions or circumstances have arisen or exist as of the date hereof which would give the Borrower the right to assert a defense, counterclaim and/or setoff to any claim by the Lenders for payment of amount owing under the Revolving Notes, the Credit Agreement, the Loan Documents or any of the documents related thereto. 5. Release. The Borrower hereby releases the Lenders and each of its officers, directors, agents, employees, legal counsel and other representatives from any and all claims, demands, causes of action, liability, damage, loss, cost and expense which it has paid, incurred or sustained or believe it has paid, incurred or sustained, known or unknown, absolute or contingent, liquidated or unliquidated, as a result of or related to their past or present relationship with the Lenders, including, but not limited to (a) the transactions evidenced by or related to the Credit Agreement, the Revolving Notes, the Loan Documents and any and all other documents, agreements or instruments related thereto, or (b) any acts or omissions of the Lenders or any of its officers, directors, agents, employees, legal counsel or other representatives in connection therewith or related thereto, or (c) the extension or denial of credit. 6. No Other Amendments. Except as expressly amended hereby, the Credit Agreement, the Revolving Notes, the Loan Documents, and the documents related thereto shall remain in full force and effect in accordance with the original terms, and no course of dealing or other action or statement of the Lenders or any of its officers, directors, agents, employees, legal counsel or other representative shall amend, or be deemed an amendment of, the Loan Documents, the Revolving Notes, the Credit Agreement or any of the documents related thereto. 7. Costs and Expenses. In accordance with the Credit Agreement, the Borrower shall pay on demand all costs and expenses, including attorneys' fees, incurred by the Lenders in connection with the preparation of this Agreement and the documents related hereto. In addition, the Borrower has on this day paid a facility fee of $1,000 in connection with this Agreement. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written. BORROWER: ULTRA PAC, INC. By: /s/ Brad Yopp Its CFO And: _______________________ Its ___________________ LENDERS: WEST ONE BANK, IDAHO By: /s/ [SIGNATURE UNREADABLE] Its VICE PRESIDENT NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION By: /s/ [SIGNATURE UNREADABLE] Its VICE PRESIDENT EXHIBIT A-1 TO FIFTH AMENDMENT AGREEMENT REVOLVING NOTE $275,000.00 Minneapolis, Minnesota October __, 1995 For value received, the undersigned, ULTRA PAC, INC., a Minnesota corporation (the "Borrower"), hereby promises to pay in accordance with the terms of the Credit Agreement (defined below), to the order of NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association (the "Lender"), at its main office in Minneapolis, Minnesota, or at any other place designated at any time by the holder hereof, in lawful money of the United States of America and in immediately available funds, the principal sum of TWO HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($275,000.00) or, if less, the aggregate unpaid principal amount of all advances made by the Lender to the Borrower hereunder, together with interest on the principal amount hereunder remaining unpaid from time to time, computed on the basis of the actual number of days elapsed and a 360-day year, from the date hereof until this Note is fully paid at a rate of interest at all times equal to 3/4% in excess of the Base Rate of Interest of the Lender (as hereinafter defined). Accrued interest hereunder shall be due and payable on the first day of each month. The principal hereof and accrued interest thereon shall be payable on demand but, in any event on or before December 15, 1995. This Note is issued pursuant, and is subject, to the Credit Agreement dated June 13, 1994, by and between the Lender and the Borrower, as heretofore and hereinafter amended, which provides, among other things, for acceleration hereof. The term "Base Rate of Interest" shall mean the base rate of interest set and announced from time to time by the Lender as the basis for determining the rate of interest on commercial borrowing, whether or not the Lender makes loans at, above or below said base rate of interest. The rate of interest due hereunder shall initially be determined as of the date hereof and shall thereafter be adjusted on each day that the Base Rate of Interest changes (each such day hereinafter being referred to as an "Adjustment Date"). All such adjustments to said rate shall be made and become effective as of the Adjustment Date and said rate as adjusted shall remain in effect until and including the day immediately preceding the next Adjustment Date. Interest hereunder shall be computed on the basis of a year of three hundred sixty (360) days but charged for actual days principal is unpaid. Upon the occurrence of an Event of Default, and at any time thereafter, the Lender shall have the right to set off any and all amounts due hereunder by the Borrower to the Lender against any indebtedness or obligation of the Lender to the Borrower. As used herein, the term "Event of Default" shall mean and include any one or more of the events listed in ArticIe VIII of the Credit Agreement. Upon the occurrence of an Event of Default, and at any time thereafter, the unpaid principal balance hereof plus accrued interest hereon plus all other amounts due hereunder shall, at the option of the Lender, be immediately due and payable, without notice or demand. Demand, presentment, protest and notice of nonpayment and dishonor of this Note are hereby waived. This Note shall be governed by and construed in accordance with the internal laws of the State of Minnesota. This Note is secured, among other things, pursuant to the Credit Agreement and the Loan Documents as therein defined, and may now or hereafter be secured by one or more other security agreements, mortgages, deeds of trust, assignments or other instruments or agreements. The Borrower hereby agrees to pay all costs of collection, including attorneys' fees and legal expenses, in the event this Note is not paid when due, whether or not legal proceedings are commenced. Presentment or other demand for payment, notice of dishonor and protest are expressly waived. ULTRA PAC, INC. By: ______________________________ Its: ________________________ By: ______________________________ Its: ________________________ EXHIBIT A-2 TO FIFTH AMENDMENT AGREEMENT REVOLVING NOTE $225,000.00 Minneapolis, Minnesota October __, 1995 For value received, the undersigned, ULTRA PAC, INC., a Minnesota corporation (the "Borrower"), hereby promises to pay in accordance with the terms of the Credit Agreement (defined below), to the order of WEST ONE BANK, IDAHO, an Idaho banking corporation (the "Lender"), at the office of the Agent, Norwest Bank Minnesota, National Association, in Minneapolis, Minnesota, or at any other place designated at any time by the holder hereof, in lawful money of the United States of America and in immediately available funds, the principal sum of TWO HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($225,000.00) or, if less, the aggregate unpaid principal amount of all advances made by the Lender to the Borrower hereunder, together with interest on the principal amount hereunder remaining unpaid from time to time, computed on the basis of the actual number of days elapsed and a 360-day year, from the date hereof until this Note is fully paid at a rate of interest at all times equal to 3/4% in excess of the Base Rate of Interest of Norwest Bank Minnesota, National Association ("Norwest") (as hereinafter defined). Accrued interest hereunder shall be due and payable on the first day of each month. The principal hereof and accrued interest thereon shall be payable on demand but, in any event on or before December 15, 1995. This Note is issued pursuant, and is subject, to the Credit Agreement dated June 13, 1994, by and between the Lender and the Borrower, as heretofore and hereinafter amended, which provides, among other things, for acceleration hereof. The term "Base Rate of Interest" shall mean the base rate of interest set and announced from time to time by Norwest as the basis for determining the rate of interest on commercial borrowing, whether or not the Lender or Norwest makes loans at, above or below said base rate of interest. The rate of interest due hereunder shall initially be determined as of the date hereof and shall thereafter be adjusted on each day that the Base Rate of Interest changes (each such day hereinafter being referred to as an "Adjustment Date"). All such adjustments to said rate shall be made and become effective as of the Adjustment Date and said rate as adjusted shall remain in effect until and including the day immediately preceding the next Adjustment Date. Interest hereunder shall be computed on the basis of a year of three hundred sixty (360) days but charged for actual days principal is unpaid. Upon the occurrence of an Event of Default, and at any time thereafter, the Lender shall have the right to set off any and all amounts due hereunder by the Borrower to the Lender against any indebtedness or obligation of the Lender to the Borrower. As used herein, the term "Event of Default" shall mean and include any one or more of the events listed in Article VIII of the Credit Agreement. Upon the occurrence of an Event of Default, and at any time thereafter, the unpaid principal balance hereof plus accrued interest hereon plus all other amounts due hereunder shall, at the option of the Lender, be immediately due and payable, without notice or demand. Demand, presentment, protest and notice of nonpayment and dishonor of this Note are hereby waived. This Note shall be governed by and construed in accordance with the internal laws of the State of Minnesota. This Note is secured, among other things, pursuant to the Credit Agreement and the Loan Documents as therein defined, and may now or hereafter be secured by one or more other security agreements, mortgages, deeds of trust, assignments or other instruments or agreements. The Borrower hereby agrees to pay all costs of collection, including attorneys' fees and legal expenses, in the event this Note is not paid when due, whether or not legal proceedings are commenced. Presentment or other demand for payment, notice of dishonor and protest are expressly waived. ULTRA PAC, INC. By: ______________________________ Its: ________________________ By: ______________________________ Its: ________________________ EX-10.1 3 LAURA SCHMALTZ OBERST Vice President Commercial Banking Norwest Bank Minnesota, N.A. Norwest Center Sixth and Marquette Minneapolis, Minnesota 55479-0091 612/667/5714 Fax: 612/667-4144 December 12, 1995 Ultra Pac, Inc. 21925 Industrial Boulevard Rogers, Minnesota 55374-9474 ATTENTION: Brad C. Yopp, CFO RE: Credit and Security Agreement dated June 13, 1994 and amended on June 30, 1995 and October 18, 1995 made by and among Ultra Pac, Inc. (the "Borrower"), West One Bank, Idaho ("West One"), Norwest Bank Minnesota, National Association, in its capacity as lender ("Norwest"), and Norwest Bank Minnesota, National Association, in its capacity as agent. Dear Mr. Yopp: This letter responds to your letter dated December 6, 1995 addressed to Ms. Laura Oberst of Norwest. Your letter cited two anticipated covenant breaches by the Borrower relative to Sections 6.12(d) and 6.12(e) of the above-referenced Credit And Security Agreement (the "Agreement"). Your letter requested waivers by West One and Norwest of such covenant breaches for the period ending October 31, 1995. Please be advised that the undersigned hereby grant the Borrower's request for a waiver of the covenant breaches relative to Section 6.12(d) and 6.12(e) of the Agreement, but only as such breaches relate to Borrower's fiscal quarter which ended on October 31, 1995. The waivers contained in the immediately preceding sentence shall not be deemed a waiver of any other covenants or conditions set forth in the Agreement, nor should they be deemed a waiver of future breaches of Sections 6.12(d) and 6.12(e) of the Agreement. This letter may be executed in any number of counterparts. Very truly yours, NORWEST BANK MINNESOTA, NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, Agent NATIONAL ASSOCIATION, Lender By: /s/ Laura Oberst By: /s/ Laura Oberst Laura Oberst, Laura Oberst, Vice President Vice President WEST ONE BANK, IDAHO, Lender By: /s/ Jim Henken Its Vice President EX-10.2 4 [LOGO] NORWEST BANK MINNESOTA, N.A. NORWEST CENTER SIXTH AND MARQUETTE MINNEAPOLIS, MINNESOTA 55479-0091 612/667-5714 FAX: 612/667-4144 December 12, 1995 Ultra Pac, Inc. 21925 Industrial Boulevard Rogers, Minnesota 55374-9474 Attention: Brad C. Yopp, CFO RE: Credit And Security Agreement dated June 13, 1994 and amended on June 30, 1995 and October 18, 1995 made by and among Ultra Pac, Inc. (the "Borrower"), West One Bank, Idaho ("West One"), Norwest Bank Minnesota, National Association, in its capacity as lender ("Norwesta"), and Norwest Bank Minnesota, National Association, in its capacity as agent. Dear Mr. Yopp: This letter responds to your letter dated December 6, 1995 addressed to Ms. Laura Oberst of Norwest. Your letter cited two anticipated covenant breaches by the Borrower relative to Sections 6.12(d) and 6.12(c) of the above-referenced Credit And Security Agreement (the "Agreement"). Your letter requested waivers by West One and Norwest of such covenant breaches for the period ending October 31, 1995. Please be advised that the undersigned hereby grant the Borrower's request for a waiver of the covenant breaches relative to Section 6.12(d) and 6.12(e) of the Agreement, but only as such breaches relate to Borrower's fiscal quarter which ended on October 31, 1995. The waivers contained in the immediately preceding sentence shall not be deemed a waiver of any other covenants or conditions set forth in the Agreement, nor should they be deemed a waiver of future breaches of Sections 6.12(d) and 6.12(c) of the Agreement. This letter may be executed in any number of counterparts. Very truly yours, NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, Agent By: /s/ Laura Oberst Laura Oberst, Vice President NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, Lender By: /s/ Laura Oberst Laura Oberst, Vice President WEST ONE BANK, IDAHO, Lender By: _________________________ Its: ________________________ EX-27 5
5 9-MOS JAN-31-1996 OCT-31-1995 500 0 4,876,392 283,000 10,772,527 17,293,482 41,430,862 8,583,973 51,316,557 13,915,428 25,580,618 7,613,572 0 0 1,213,000 11,466,014 52,511,986 52,511,986 41,563,203 41,563,203 0 78,000 1,863,040 (1,730,718) (610,000) (1,120,718) 0 0 0 (1,120,718) (.30) (.30)
EX-27 6
5 6-MOS JAN-31-1996 JUL-31-1995 136,185 0 4,707,343 264,000 10,665,307 16,943,889 39,990,564 7,615,101 50,333,635 11,659,096 25,071,765 7,631,572 0 0 1,213,000 50,333,635 37,137,978 37,137,978 28,083,656 28,083,656 0 48,000 1,184,441 518,042 195,000 323,042 0 0 0 323,042 .09 .09
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