R
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2012
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|
£
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from: __________ to __________
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Illinois
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36-3442829
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(State or other jurisdiction of
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(IRS Employer
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incorporation or organization)
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Identification No.)
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Title of Each Class
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Name of each exchange on which registered
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Common Stock, No Par Value
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Nasdaq Global Market
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Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer o
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Smaller reporting company þ
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PART I
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|||
Item 1.
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Business
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2 | |
Item 2.
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Properties
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12 | |
Item 3.
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Legal Proceedings
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13 | |
Item 4.
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Mine Safety Disclosures
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13 | |
PART II
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|||
Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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13 | |
Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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14 | |
Item 8.
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Financial Statements and Supplementary Data
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16 | |
Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
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35 | |
Item 9A.
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Controls and Procedures
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35 | |
Item 9B.
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Other Information
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36 | |
PART III
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|||
Item 10.
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Directors, Executive Officers and Corporate Governance
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37 | |
Item 11.
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Executive Compensation
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39 | |
Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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40 | |
Item 13.
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Certain Relationships and Related Transactions and Director Independence
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42 | |
Item 14.
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Principal Accountant Fees and Services
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42 | |
PART IV
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|||
Item 15.
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Exhibits, Financial Statement Schedules
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44 | |
Signatures
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46 | ||
Index of Exhibits
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47 |
Mark/Reg. No.
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Goods/Services
|
Date of
Registration
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Expiration of
Registration
|
Comments
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ProBug Design 1,
Reg. No. 3266378
![]() |
dairy-based beverages; dairy- based food beverages; kefir; soy- based food beverage used as milk substitute
|
July 17, 2007
|
July 17, 2017
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
ProBug Design 2,
Reg. No. 3263130
![]() |
dairy-based beverages; dairy- based food beverages; kefir; soy- based food beverage used as milk substitute
|
July 10, 2007
|
July 10, 2017
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
Penelope ProBug Design, Reg. No. 3408792
![]() |
dairy-based beverages; dairy- based food beverages; kefir; soy- based food beverage used as milk substitute
|
April 8, 2008
|
April 8, 2018
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
BA3APHBIII (a Stylized
presentation of “bazarny” in Cyrillic characters),
Reg. No. 3590660
|
cultured milk products, excluding ice cream, ice milk and frozen yogurt; cheeses and cottage cheese
|
March 17, 2009
|
March 17, 2019
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
BAMBINO,
Reg. No. 2770522
|
cheeses, cottage cheeses and other dairy products, excluding ice cream, ice milk, and frozen yogurt
|
October 7, 2003
|
October 7, 2013
|
An Affidavit of Continued Use was timely filed between the fifth and sixth anniversaries of the registration date. Registration is renewable between the ninth and tenth anniversaries of the registration date or the six-month grace period following the registration expiration date.
|
BAZARNY,
Reg. No. 3597883
|
cultured milk products, excluding ice cream, ice milk and frozen yogurt; cheeses and cottage cheese
|
March 31, 2009
|
March 31, 2019
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
BIO KEFIR,
Reg. No. 3886709
|
yogurt, cheeses, cottage cheeses and other milk products, excluding ice cream, ice milk and frozen yogurt
|
December 7, 2010
|
December 7, 2020
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
CHANGING THE WORLD, ONE MOUTHFUL AT A TIME. (Stylized),
Reg. No. 3541999
|
fruit juices
|
December 2, 2008
|
December 2, 2018
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
FRUIT JUICE (Stylized),
Reg. No. 3413276
|
fruit juices
|
April 15, 2008
|
April 15, 2018
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
Fruit Juice Logo,
Reg. No. 3432421
![]() |
fruit juices
|
May 20, 2008
|
May 20, 2018
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
GOO-BERRY PIE,
Reg. No. 3405134
|
dairy-based beverages; dairy- based food beverages; kefir; soy-based food beverages used as a milk substitute
|
April 1, 2008
|
April 1, 2018
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
HELIOS NUTRITION,
Reg. No. 2283716
|
health foods, functional foods and medical foods, namely, dairy products excluding ice cream, ice milk and frozen yogurt
|
October 5, 1999
|
October 5, 2019
|
Registration was timely renewed on April 2, 2010. Registration is renewable for ten year periods or during the six-month grace period following the registration expiration date or the six-month grace period following the sixth anniversary date.
|
KOROVKA,
Reg. No. 2504027
|
dairy-based spread
|
November 6, 2001
|
November 6, 2021
|
Registration was timely renewed on November 6, 2011. Registration is renewable for ten year periods or during the six-month grace period following the registration expiration date.
|
KPECTBRHCKNN (a Stylized presentation of “krestyanskiy” in Cyrillic characters-means “peasant”),
Reg. No. 2187363
|
cheeses, cottage cheeses and other milk products excluding ice cream, ice milk and frozen yogurt
|
September 8, 1998
|
September 8, 2018
|
Registration was timely renewed on August 23, 2008. Registration is renewable for ten year periods or during the six-month grace period following the registration expiration date.
|
KWASHENKA,
Reg. No. 2135974
|
kefir, yogurt, cheeses, cottage cheeses and other milk products, excluding ice cream, ice milk and frozen yogurt
|
February 10, 1998
|
February 10, 2018
|
Registration was timely renewed on May 23, 2008. Registration is renewable for ten year periods or during the six-month grace period following the registration expiration date.
|
LA FRUTA,
Reg. No. 2937061
|
cultured milk products, excluding ice cream, ice milk and frozen yogurt
|
March 29, 2005
|
March 29, 2015
|
An Affidavit of Continued Use was timely filed between the fifth and sixth anniversaries of the registration date. Registration is renewable between the ninth and tenth anniversaries of the registration date or the six-month grace period following the registration expiration date.
|
LIFEWAY,
Reg. No. 1571136
|
cheese and kefir
|
December 12, 1989
|
December 12, 2019
|
Registration was timely renewed on December 12, 2009. Registration is renewable for ten year periods or during the six-month grace period following the registration expiration date.
|
ORANGE CREAMY CRAWLER,
Reg. No. 3263128
|
dairy-based beverages; dairy- based food beverages; kefir; soy- based food beverage used as milk substitute
|
July 10, 2007
|
July 10, 2017
|
An Affidavit of Continued Use was timely filed between the fifth and sixth anniversaries of the registration date. Registration is renewable between the ninth and tenth anniversaries of the registration date or the six-month grace period following the registration expiration date.
|
PHYTOBOOST,
Reg. No. 3982487
|
dairy-based beverages; dairy- based food beverages; kefir; soy-based food beverage used as a milk substitute
|
June 21, 2011
|
June 21, 2021
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
PLAYGROUP PACK,
Reg. No. 3634999
|
fruit juices
|
June 9, 2009
|
June 9, 2019
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
PRIDE OF MAIN STREET, MN Reg. No. 12947
|
dairy product
|
November 9, 1987
|
November 9, 2017
|
Only for the State of Minnesota, not in US – Registration was renewed in 2007. Registration is renewable for ten years.
|
PRO2O,
Reg. No. 4226923
|
dairy-based beverages; dairy-based food beverages; kefir; soy-based food beverage used as a milk substitute beverages, namely, water and fruit and vegetable juices and fruit juices flavored with tea
|
October 16, 2012
|
October 16, 2022
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
PROBUGS,
Reg. No. 3263129
|
dairy-based beverages; dairy- based food beverages; kefir; soy- based food beverage used as milk substitute
|
July 10, 2007
|
July 10, 2017
|
An Affidavit of Continued Use was timely filed between the fifth and sixth anniversaries of the registration date. Registration is renewable between the ninth and tenth anniversaries of the registration date or the six-month grace period following the registration expiration date.
|
SOYTREAT,
Reg. No. 3530754
|
soy-based food beverage intended for use as cultured milk substitute
|
November 11, 2008
|
November 11, 2018
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
STARFRUIT,
Reg. No. 3513252
|
franchise services, namely, offering technical and business management assistance in the establishment and operation of restaurants
|
October 7, 2008
|
October 7, 2018
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
STARFRUIT,
Reg. No. 3454746
|
restaurant services
|
June 24, 2008
|
June 24, 2018
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
STARFRUIT (Stylized), Reg. No. 3879939
|
kefir
|
November 23, 2010
|
November 23, 2020
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
SUBLIME SLIME LIME,
Reg. No. 3263134
|
dairy-based beverages; dairy- based food beverages; kefir; soy- based food beverage used as milk substitute
|
July 10, 2007
|
July 10, 2017
|
An Affidavit of Continued Use was timely filed between the fifth and sixth anniversaries of the registration date. Registration is renewable between the ninth and tenth anniversaries of the registration date or the six-month grace period following the registration expiration date.
|
SWEET KISS,
Reg. No. 2135975
|
cheeses, cottage cheeses and other milk products, excluding ice cream, ice milk and frozen yogurt
|
February 10, 1998
|
February 10, 2018
|
Registration was timely renewed on May 23, 2008. Registration is renewable for ten year periods or during the six-month grace period following the registration expiration date.
|
TODDLER TASTEBUD TRAINING (Stylized), Reg. No. 3542008
|
fruit juices
|
December 2, 2008
|
December 2, 2018
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
TRAINING WHEELS FOR HEALTHY EATING (Stylized), Reg. No. 3412314
|
fruit juices
|
April 15, 2008
|
April 15, 2018
|
Registration is renewable at the time of expiration provided mandatory documents are filed with the USPTO between the fifth and sixth anniversaries of the registration date or the six-month grace period following the sixth anniversary date.
|
FIRST SMOOTHIE,
Ser. No. 85111072
|
fruit beverages, namely, smoothies
|
Pending – Application filed August 19, 2010
|
Notice of Allowance (NOA) issued September 20, 2011. Applicant must file a Statement of Use or first Extension Request by March 20, 2012.
|
Low Bid
|
High Bid
|
|
First Qtr. 2011
|
$ 8.42
|
$10.48
|
Second Qtr. 2011
|
$ 9.03
|
$11.24
|
Third Qtr. 2011
|
$ 9.45
|
$11.90
|
Fourth Qtr. 2011
|
$ 8.80
|
$11.20
|
First Qtr. 2012
|
$ 8.81
|
$ 9.91
|
Second Qtr. 2012
|
$ 8.03
|
$10.40
|
Third Qtr. 2012
|
$ 9.10
|
$11.10
|
Fourth Qtr. 2012
|
$ 7.90
|
$ 9.88
|
Period
|
(a) Total Numbers of Shares (or Units) Purchased
|
(b) Average Price Paid per
Share (or Unit)
|
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced
Plans or Programs
|
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased
Under the
Plans or Programs
|
||||
October 1 to October 31, 2012
|
0
|
$0
|
0
|
159,200
|
||||
November 1 to November 30, 2012
|
11,000
|
$8.45
|
11,000
|
148,200
|
||||
December 1 to December 31, 2012
|
2,000
|
$8.22
|
2,000
|
146,200
|
||||
Total
|
13,000
|
$8.34
|
13,000
|
146,200
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 2,286,226 | $ | 1,115,150 | ||||
Investments
|
1,869,888 | 1,695,044 | ||||||
Certificates of deposits in financial institutions
|
450,000 | 300,000 | ||||||
Inventories
|
5,939,186 | 4,954,475 | ||||||
Accounts receivable, net of allowance for doubtful
|
||||||||
accounts and discounts
|
8,723,737 | 7,950,276 | ||||||
Prepaid expenses and other current assets
|
97,138 | 79,630 | ||||||
Other receivables
|
8,825 | 224,204 | ||||||
Deferred income taxes
|
234,687 | 338,690 | ||||||
Refundable income taxes
|
84,828 | 41,316 | ||||||
Total current assets
|
$ | 19,694,515 | 16,698,785 | |||||
Property and equipment, net
|
14,986,776 | 15,198,822 | ||||||
Intangible assets
|
||||||||
Goodwill and other non-amortizable brand assets
|
14,068,091 | 14,068,091 | ||||||
Other intangible assets, net of accumulated amortization of
|
||||||||
$3,842,756 and 3,087,940 at December 31, 2012 and 2011,
|
||||||||
respectively
|
4,463,242 | 5,218,060 | ||||||
Total intangible assets
|
18,531,333 | 19,286,151 | ||||||
Other Assets
|
||||||||
Long-term accounts receivable net of current portion
|
294,000 | 289,550 | ||||||
Total assets
|
$ | 53,506,624 | $ | 51,473,308 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities
|
||||||||
Checks written in excess of bank balances
|
$ | 0 | $ | 592,040 | ||||
Current maturities of notes payable
|
542,981 | 1,540,716 | ||||||
Accounts payable
|
4,256,725 | 4,386,239 | ||||||
Accrued expenses
|
1,155,677 | 553,725 | ||||||
Accrued income taxes
|
254,311 | 0 | ||||||
Total current liabilities
|
6,209,694 | 7,072,720 | ||||||
Notes payable
|
4,955,945 | 5,539,836 | ||||||
Deferred income taxes
|
3,028,518 | 3,503,595 | ||||||
Total liabilities
|
14,194,157 | 16,116,151 | ||||||
Stockholders' equity
|
||||||||
Common stock, no par value; 20,000,000 shares authorized;
|
||||||||
17,273,776 shares issued; 16,346,017 shares outstanding at
|
||||||||
December 31, 2012; 17,273,776 shares issued; 16,409,317 shares
|
||||||||
outstanding at December 31, 2011
|
6,509,267 | 6,509,267 | ||||||
Paid-in-capital
|
2,032,516 | 2,032,516 | ||||||
Treasury stock, at cost
|
( 8,187,682 | ) | ( 7,606,974 | ) | ||||
Retained earnings
|
38,904,777 | 34,431,296 | ||||||
Accumulated other comprehensive income (loss), net of taxes
|
53,591 | ( 8,948 | ) | |||||
Total stockholders' equity
|
39,312,469 | 35,357,157 | ||||||
Total liabilities and stockholders' equity
|
$ | 53,506,626 | $ | 51,473,308 |
Years Ended
|
||||||||||||||||
December 31,
|
||||||||||||||||
2012
|
2011
|
|||||||||||||||
Sales
|
$ | 89,754,007 | $ | 77,122,999 | ||||||||||||
Less: discounts and allowances
|
(8,402,742 | ) | ( 7,152,590 | ) | ||||||||||||
Net sales
|
81,351,265 | 81,351,265 | 69,970,409 | 69,970,409 | ||||||||||||
Cost of goods sold
|
52,295,464 | 47,151,776 | ||||||||||||||
Depreciation expense
|
1,629,594 | 1,552,961 | ||||||||||||||
Total cost of goods sold
|
53,925,058 | 48,704,737 | ||||||||||||||
Gross profit
|
27,426,207 | 21,265,672 | ||||||||||||||
Selling expenses
|
11,506,707 | 10,114,902 | ||||||||||||||
General and administrative
|
6,319,972 | 5,290,446 | ||||||||||||||
Amortization expense
|
754,817 | 783,833 | ||||||||||||||
Total operating expenses
|
18,581,496 | 16,189,181 | ||||||||||||||
Income from operations
|
8,844,711 | 5,076,491 | ||||||||||||||
Other income (expense):
|
||||||||||||||||
Interest and dividend income
|
85,383 | 70,611 | ||||||||||||||
Rental income
|
12,285 | 7,150 | ||||||||||||||
Interest expense
|
(177,622 | ) | (247,342 | ) | ||||||||||||
Impairment of Investment
|
0 | (36,032 | ) | |||||||||||||
Gain (loss) on sale of investments, net
|
71,286 | (29,256 | ) | |||||||||||||
Other Expense
|
(11,169 | ) | (8,364 | ) | ||||||||||||
Total other income (expense)
|
(19,837 | ) | (243,233 | ) | ||||||||||||
Income before provision for
|
||||||||||||||||
income taxes
|
8,824,874 | 4,833,258 | ||||||||||||||
Provision for income taxes
|
3,205,076 | 1,977,837 | ||||||||||||||
Net income
|
$ | 5,619,798 | $ | 2,855,421 | ||||||||||||
Basic and diluted earnings
|
||||||||||||||||
per common share
|
.34 | 0.17 | ||||||||||||||
Weighted average number of
|
||||||||||||||||
shares outstanding
|
16,373,224 | 16,442,948 | ||||||||||||||
COMPREHENSIVE INCOME
|
||||||||||||||||
Net income
|
5,619,798 | $ | 2,855,421 | |||||||||||||
Other comprehensive income
|
||||||||||||||||
(loss), net of tax:
|
||||||||||||||||
Unrealized gains on
|
||||||||||||||||
investments (net of tax)
|
102,816 | 17,616 | ||||||||||||||
Less reclassification adjustment for (gains)
|
||||||||||||||||
losses included in
|
||||||||||||||||
net income (net of taxes)
|
( 40,277 | ) | 16,530 | |||||||||||||
Comprehensive income
|
$ | 5,682,337 | $ | 2,889,567 |
|
|
|||||||||||||||||||||||||||||||||||
Common Stock, No Par Value
20,000,000 Shares
|
# of Shares
|
Accumulated
Other |
||||||||||||||||||||||||||||||||||
Authorized
|
of
|
Comprehensive
|
||||||||||||||||||||||||||||||||||
# of Shares
|
# of Shares
|
Treasury
|
Common
|
Paid In
|
Treasury
|
Retained
|
Income (Loss),
|
|||||||||||||||||||||||||||||
Issued
|
Outstanding
|
Stock
|
Stock
|
Capital
|
Stock
|
Earnings
|
Net of Tax
|
Total
|
||||||||||||||||||||||||||||
Balances at December 31, 2010
|
17,273,776 | 16,536,657 | 737,119 | $ | 6,509,267 | $ | 2,032,516 | $ | (6,425,546 | ) | $ | 31,575,875 | $ | (43,094 | ) | $ | 33,649,018 | |||||||||||||||||||
Redemption of stock
|
0 | (127,340 | ) | 127,340 | 0 | 0 | (1,181,428 | ) | 0 | 0 | (1,181,428 | ) | ||||||||||||||||||||||||
Issuance of treasury stock for compensation
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||||||||||||||||||
Unrealized gains on securities, net of taxes
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 34,146 | 34,146 | |||||||||||||||||||||||||||
Net income for the year ended
|
||||||||||||||||||||||||||||||||||||
December 31, 2011
|
0 | 0 | 0 | 0 | 0 | 0 | 2,855,421 | 0 | 2,855,421 | |||||||||||||||||||||||||||
Balances at December 31, 2011
|
17,273,776 | 16,409,317 | 864,459 | $ | 6,509,267 | $ | 2,032,516 | $ | (7,606,974 | ) | $ | 34,431,296 | $ | (8,948 | ) | $ | 35,357,157 | |||||||||||||||||||
Redemption of stock
|
0 | (63,300 | ) | 63,300 | 0 | 0 | (580,708 | ) | 0 | 0 | (580,708 | ) | ||||||||||||||||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||||||||||||||||||
Unrealized gains on securities, net of taxes
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 62,539 | 62,539 | |||||||||||||||||||||||||||
Net income for the year ended
|
||||||||||||||||||||||||||||||||||||
December 31, 2012
|
0 | 0 | 0 | 0 | 0 | 0 | 5,619,798 | 0 | 5,619,798 | |||||||||||||||||||||||||||
Dividends ($.07) per share
|
0 | 0 | 0 | 0 | 0 | 0 | (1,146,317 | ) | 0 | (1,146,317 | ) | |||||||||||||||||||||||||
Balances at December 31, 2012
|
17,273,776 | 16,346,017 | 927,759 | $ | 6,509,267 | $ | 2,032,516 | $ | (8,187,682 | ) | $ | 38,904,777 | $ | 53,591 | $ | 39,312,469 |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 5,619,798 | $ | 2,855,421 | ||||
Adjustments to reconcile net income to net
|
||||||||
cash flows from operating activities:
|
||||||||
Depreciation and amortization
|
2,384,411 | 2,336,794 | ||||||
Loss (gain) on sale of investments, net
|
(71,286 | ) | 29,256 | |||||
Loss on disposition of equipment
|
11,169 | 20,135 | ||||||
Impairment of Investment
|
0 | 36,032 | ||||||
Deferred income taxes
|
(434,896 | ) | 68,217 | |||||
Bad Debt Expense
|
435,344 | 48,240 | ||||||
(Increase) decrease in operating assets:
|
||||||||
Accounts receivable
|
(1,213,253 | ) | (1,494,790 | ) | ||||
Other receivables
|
215,379 | (119,524 | ) | |||||
Inventories
|
(984,711 | ) | (969,101 | ) | ||||
Refundable income taxes
|
(43,512 | ) | 865,432 | |||||
Prepaid expenses and other current assets
|
(17,508 | ) | 78,685 | |||||
Increase (decrease) in operating liabilities:
|
||||||||
Accounts payable
|
(129,514 | ) | 202,758 | |||||
Accrued expenses
|
601,952 | 84,466 | ||||||
Income taxes payable
|
254,311 | 0 | ||||||
Net cash provided by operating activities
|
6,627,684 | 4,042,021 | ||||||
Cash flows from investing activities:
|
||||||||
Purchases of investments
|
(1,452,672 | ) | (2,434,340 | ) | ||||
Proceeds from sale of investments
|
1,475,730 | 1,810,816 | ||||||
Investments in certificates of deposits
|
(150,255 | ) | (50,000 | ) | ||||
Purchases of property and equipment
|
(1,428,717 | ) | (1,439,133 | ) | ||||
Net cash used in investing activities
|
(1,555,914 | ) | (2,112,657 | ) | ||||
Cash flows from financing activities:
|
||||||||
Proceeds of note payable
|
250,000 | 2,000,000 | ||||||
Checks written in excess of bank balances
|
(592,040 | ) | (749,170 | ) | ||||
Purchases of treasury stock
|
(580,708 | ) | (1,181,428 | ) | ||||
Dividends paid
|
(1,146,317 | ) | — | |||||
Repayment of notes payable
|
(1,831,626 | ) | (4,113,555 | ) | ||||
Net cash used in financing activities
|
(3,900,691 | ) | (4,044,153 | ) | ||||
Net (decrease) increase in cash and cash equivalents
|
1,171,079 | (2,114,789 | ) | |||||
Cash and cash equivalents at the beginning of the period
|
1,115,150 | 3,229,939 | ||||||
Cash and cash equivalents at the end of the period
|
$ | 2,286,226 | $ | 1,115,150 |
Category
|
Years
|
|
Buildings and improvements
|
31 and 39
|
|
Machinery and equipment
|
5 – 12
|
|
Office equipment
|
5 – 7
|
|
Vehicles
|
5
|
Category
|
Years
|
|
Recipes
|
4
|
|
Customer lists and other customer related intangibles
|
7-10
|
|
Lease agreement
|
7
|
|
Trade names
|
15
|
|
Formula
|
10
|
|
Customer relationships
|
12
|
December 31, 2012
|
December 31, 2011
|
|||||||||||||||
Cost
|
Accumulated Amortization
|
Cost
|
Accumulated Amortization
|
|||||||||||||
Recipes
|
$ | 43,600 | $ | 43,600 | $ | 43,600 | $ | 43,600 | ||||||||
Customer lists and other customer related intangibles
|
4,504,200 | 2,025,736 | 4,504,200 | 1,546,671 | ||||||||||||
Lease acquisition
|
87,200 | 87,200 | 87,200 | 87,200 | ||||||||||||
Customer relationship
|
985,000 | 526,701 | 985,000 | 444,618 | ||||||||||||
Trade names
|
2,248,000 | 878,469 | 2,248,000 | 728,601 | ||||||||||||
Formula
|
438,000 | 281,050 | 438,000 | 237,250 | ||||||||||||
$ | 8,306,000 | $ | 3,842,756 | $ | 8,306,000 | $ | 3,087,940 |
2013
|
$ |
711,366
|
||
2014
|
711,366
|
|||
2015
|
711,367
|
|||
2016
|
693,117
|
|||
2017
|
667,566
|
|||
Thereafter
|
968,460
|
|||
$ |
4,463,242
|
December 31, 2012
|
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Equities
|
$ | 639,974 | $ | 90,875 | $ | ( 5,190 | ) | $ | 725,659 | |||||||
Corporate Bonds
|
1,135,064 | 16,212 | ( 7,047 | ) | 1,144,229 | |||||||||||
Total
|
$ | 1,775,038 | $ | 107,087 | $ | ( 12,237 | ) | $ | 1,869,888 |
December 31, 2011
|
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Equities
|
$ | 682,569 | $ | 55,244 | $ | ( 23,211 | ) | $ | 714,602 | |||||||
Mutual Funds
|
64,563 | 3,275 | ( 713 | ) | 67,125 | |||||||||||
Preferred Securities
|
64,452 | 0 | ( 17,702 | ) | 46,750 | |||||||||||
Corporate Bonds
|
899,298 | 1,019 | ( 33,750 | ) | 866,567 | |||||||||||
Total
|
$ | 1,710,882 | $ | 59,538 | $ | ( 75,376 | ) | $ | 1,695,044 |
Less Than 12 Months
|
12 Months or Greater
|
Total
|
||||||||||||||||||||||
December 31, 2012
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
||||||||||||||||||
Equities
|
$ | 63,620 | $ | ( 3,745 | ) | $ | 21,910 | $ | ( 1,445 | ) | $ | 85,530 | $ | ( 5,190 | ) | |||||||||
Corporate Bonds
|
301,229 | ( 2,721 | ) | 193,930 | ( 4,326 | ) | 495,159 | ( 7,047 | ) | |||||||||||||||
$ | 364,849 | $ | ( 6,466 | ) | $ | 215,840 | $ | ( 5,771 | ) | $ | 580,689 | $ | ( 12,237 | ) |
Less Than 12 Months
|
12 Months or Greater
|
Total
|
||||||||||||||||||||||
December 31, 2011
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
Fair Value
|
Unrealized Losses
|
||||||||||||||||||
Equities
|
$ | 176,966 | $ | ( 23,211 | ) | $ | 0 | $ | 0 | $ | 176,966 | $ | ( 23,211 | ) | ||||||||||
Mutual Funds
|
0 | 0 | 10,585 | ( 713 | ) | 10,585 | ( 713 | ) | ||||||||||||||||
Preferred Securities
|
0 | 0 | 46,750 | ( 17,702 | ) | 46,750 | ( 17,702 | ) | ||||||||||||||||
Corporate Bonds
|
626,292 | ( 24,000 | ) | 90,250 | ( 9,750 | ) | 716,542 | ( 33,750 | ) | |||||||||||||||
$ | 803,258 | $ | ( 47,211 | ) | $ | 147,585 | $ | ( 28,165 | ) | $ | 950,843 | $ | ( 75,376 | ) |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Finished goods
|
$ | 2,462,548 | $ | 1,976,050 | ||||
Production supplies
|
2,599,668 | 2,042,611 | ||||||
Raw materials
|
876,970 | 935,814 | ||||||
Total inventories
|
$ | 5,939,186 | $ | 4,954,475 |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Land
|
$ | 1,178,160 | $ | 1,178,160 | ||||
Buildings and improvements
|
11,904,919 | 11,633,077 | ||||||
Machinery and equipment
|
15,185,204 | 14,697,024 | ||||||
Vehicles
|
1,346,078 | 1,334,628 | ||||||
Office equipment
|
411,773 | 383,099 | ||||||
Construction in process
|
612,468 | 17,410 | ||||||
30,638,602 | 29,243,398 | |||||||
Less accumulated depreciation
|
15,651,826 | 14,044,576 | ||||||
Total property and equipment
|
$ | 14,986,776 | $ | 15,198,822 |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Accrued payroll and payroll taxes
|
$ | 356,280 | $ | 209,395 | ||||
Accrued property tax
|
302,573 | 323,885 | ||||||
Other
|
496,824 | 20,445 | ||||||
$ | 1,155,677 | $ | 553,725 |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Note payable to Private Bank in monthly installments of $42,222, plus variable interest rate, currently at 2.709%, with a balloon payment for the remaining balance due February 6, 2014. Collateralized by substantially all assets of the Company.
|
$ | 5,365,556 | $ | 5,914,445 | ||||
Line of credit with Private Bank at variable interest rate, currently at 3.25%. The agreement has been extended with terms allowing borrowings up to $2.0 million, maturing on May 31, 2013. Collateralized by substantially all assets of the Company.
|
0 | 1,000,000 | ||||||
Notes payable to Ford Credit Corp. payable in monthly installments of $1,778.23 at 5.99%, due July 2015, secured by transportation equipment.
|
50,871 | 68,509 | ||||||
Note payable to Fletcher Jones of Chicago, Ltd LLC in monthly installments of $1,768.57 at 6.653%, due May 24, 2017, secured by transportation equipment.
|
82,499 | 97,598 | ||||||
Total notes payable
|
5,498,926 | 7,080,552 | ||||||
Less current maturities
|
542,981 | 1,540,716 | ||||||
Total long-term portion
|
$ | 4,955,945 | $ | 5,539,836 |
For the Period Ended December 31,
|
||||
2013
|
$ | 542,981 | ||
2014
|
4,896,199 | |||
2015
|
30,787 | |||
2016
|
19,875 | |||
2017
|
9,084 | |||
Total
|
$ | 5,498,926 |
2013
|
$ | 147,318 | ||
2014
|
69,106 | |||
2015
|
45,461 | |||
2016
|
46,825 | |||
2017
|
48,229 | |||
Thereafter
|
49,676 | |||
Total
|
$ | 406,615 |
For the Years Ended
|
||||||||
December 31,
|
||||||||
2012
|
2011
|
|||||||
Current:
|
||||||||
Federal
|
$ | 2,757,332 | $ | 1,059,336 | ||||
State and local
|
882,640 | 850,284 | ||||||
Total current
|
3,639,972 | 1,909,620 | ||||||
Deferred
|
( 434,896 | ) | 68,217 | |||||
Provision for income taxes
|
$ | 3,205,076 | $ | 1,977,837 |
For the Years Ended
|
||||||||||||||||
December 31,
|
||||||||||||||||
2012
|
2011
|
|||||||||||||||
Amount
|
Percentage
|
Amount
|
Percentage
|
|||||||||||||
Federal income tax expense
computed at the statutory rate
|
$ | 3,000,457 | 34.0 | % | $ | 1,643,308 | 34.0 | % | ||||||||
State and local tax expense, net
|
838,363 | 9.5 | % | 561,187 | 11.6 | % | ||||||||||
U.S. domestic manufacturers’ deduction
& other permanent differences
|
( 427,525 | ) | (4.9 | )% | (122,837 | ) | (2.5 | )% | ||||||||
Change in tax estimate
|
( 206,219 | ) | (2.2 | )% | (103,821 | ) | (2.2 | )% | ||||||||
Provision for income taxes
|
$ | 3,205,076 | 36.4 | % | $ | 1,977,837 | 40.9 | % |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Non-current deferred tax assets (liabilities)
arising from:
Temporary differences -
|
||||||||
Accumulated depreciation and amortization
|
||||||||
from purchase accounting adjustments
|
$ | ( 3,164,716 | ) | $ | ( 3,671,285 | ) | ||
Capital loss carry-forwards
|
136,198 | 167,690 | ||||||
Total non-current net deferred tax liabilities
|
( 3,028,518 | ) | ( 3,503,595 | ) | ||||
Current deferred tax assets arising from:
|
||||||||
Unrealized losses (gain) on investments
|
( 41,260 | ) | 6,890 | |||||
Impairment of investments
|
0 | 15,673 | ||||||
Inventory
|
265,072 | 220,408 | ||||||
Allowance for doubtful accounts and discounts
|
10,875 | 4,350 | ||||||
Capital loss carry-back
|
0 | 91,369 | ||||||
Total current deferred tax assets
|
234,687 | 338,690 | ||||||
Net deferred tax liability
|
$ | ( 2,793,831 | ) | $ | ( 3,164,905 | ) |
For the Years Ended
|
||||||||
December 31,
|
||||||||
2012
|
2011
|
|||||||
Interest
|
$ | 191,277 | $ | 232,429 | ||||
Income taxes
|
$ | 3,413,687 | $ | 1,169,334 |
● |
Quoted prices for similar assets or liabilities in active markets;
|
●
|
Quoted prices for identical or similar assets or liabilities in inactive markets;
|
●
|
Inputs other than quoted prices that are observable for the asset or liability;
|
●
|
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
Assets and Liabilities at Fair Value as of December 31, 2012
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Cash
|
$ | 2,286,226 | $ | 0 | $ | 0 | $ | 2,286,226 | ||||||||
Certificate of Deposits
|
0 | 439,982 | 0 | 439,982 | ||||||||||||
Stocks
|
725,670 | 0 | 0 | 725,670 | ||||||||||||
Corporate Bonds
|
0 | 1,144,229 | 0 | 1,144,229 | ||||||||||||
Notes Payable
|
0 | 5,498,926 | 0 | 5,498,926 |
Assets and Liabilities at Fair Value as of December 31, 2011
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Cash
|
$ | 1,115,150 | $ | 0 | $ | 0 | $ | 1,115,150 | ||||||||
Mutual Funds:
|
||||||||||||||||
Equity Income
|
64,075 | 0 | 0 | 64,075 | ||||||||||||
Bonds
|
3,050 | 0 | 0 | 3,050 | ||||||||||||
Certificate of Deposits
|
0 | 277,363 | 0 | 277,363 | ||||||||||||
Stocks
|
714,602 | 0 | 0 | 714,602 | ||||||||||||
Preferred Stock
|
46,750 | 0 | 0 | 46,750 | ||||||||||||
Corporate Bonds
|
0 | 866,566 | 0 | 866,566 | ||||||||||||
Notes Payable
|
0 | 7,080,552 | 0 | 7,080,552 |
(Unaudited)
Three Months Ended
March 31, 2012 |
(Unaudited)
Six Months Ended
June 30, 2012 |
(Unaudited)
Nine Months Ended
September 30, 2012 |
||||||||||||||||||||||||||||||||||
As Previously Reported
|
Adjustment
|
As Restated
|
As Previously Reported
|
Adjustment
|
As Restated
|
As Previously Reported
|
Adjustment
|
As Restated
|
||||||||||||||||||||||||||||
Income Statement
|
||||||||||||||||||||||||||||||||||||
Net Sales
|
$ | 19,397,197 | $ | — | $ | 19,397,197 | $ | 39,950,578 | $ | — | $ | 39,950,578 | $ | 60,570,311 | $ | — | $ | 60,570,311 | ||||||||||||||||||
COGS
|
$ | 12,637,386 | $ | 668,381 | $ | 13,305,767 | $ | 25,153,336 | $ | 1,088,149 | $ | 26,241,485 | $ | 38,299,212 | $ | 1,692,406 | $ | 39,991,618 | ||||||||||||||||||
Gross Profit
|
$ | 6,759,811 | $ | (668,381 | ) | $ | 6,091,430 | $ | 14,797,242 | $ | (1,088,149 | ) | $ | 13,709,093 | $ | 22,271,099 | $ | (1,692,406 | ) | $ | 20,578,693 | |||||||||||||||
Operating Expenses
|
$ | 4,887,281 | $ | (668,381 | ) | $ | 4,218,900 | $ | 9,797,959 | $ | (1,088,149 | ) | $ | 8,709,810 | $ | 15,194,607 | $ | (1,692,406 | ) | $ | 13,502,201 | |||||||||||||||
Income from Operations
|
$ | 1,872,530 | $ | — | $ | 1,872,530 | $ | 4,999,283 | $ | — | $ | 4,999,283 | $ | 7,076,492 | $ | — | $ | 7,076,492 |
(Unaudited)
Three Months Ended
March 31, 2011 |
(Unaudited)
Six Months Ended
June 30, 2011 |
(Unaudited)
Nine Months Ended
September 30, 2011 |
||||||||||||||||||||||||||||||||||
As Previously Reported
|
Adjustment
|
As Restated
|
As Previously Reported
|
Adjustment
|
As Restated
|
As Previously Reported
|
Adjustment
|
As Restated
|
||||||||||||||||||||||||||||
Income Statement
|
||||||||||||||||||||||||||||||||||||
Net Sales
|
$ | 17,303,903 | $ | — | $ | 17,303,903 | $ | 35,501,821 | $ | — | $ | 35,501,821 | $ | 53,203,425 | $ | — | $ | 53,203,425 | ||||||||||||||||||
COGS
|
$ | 9,722,230 | $ | 532,856 | $ | 10,255,086 | $ | 22,478,463 | $ | 990,620 | $ | 23,469,083 | $ | 34,047,699 | $ | 1,581,339 | $ | 35,629,038 | ||||||||||||||||||
Gross Profit
|
$ | 7,581,673 | $ | (532,856 | ) | $ | 7,048,817 | $ | 13,023,358 | $ | (990,620 | ) | $ | 12,032,738 | $ | 19,155,726 | $ | (1,581,339 | ) | $ | 17,574,387 | |||||||||||||||
Operating Expenses
|
$ | 4,316,051 | $ | (532,856 | ) | $ | 3,783,195 | $ | 9,057,522 | $ | (990,620 | ) | $ | 8,066,902 | $ | 13,622,185 | $ | (1,581,339 | ) | $ | 12,040,846 | |||||||||||||||
Income from Operations
|
$ | 3,265,622 | $ | — | $ | 3,265,622 | $ | 3,965,836 | $ | — | $ | 3,965,836 | $ | 5,533,541 | $ | — | $ | 5,533,541 |
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
●
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;
|
●
|
provide reasonable assurance that our transactions are recorded as necessary to permit preparation of our financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures of the company are being made only in accordance with authorizations of our management and our directors; and
|
●
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.
|
Name
|
Year
|
Salary
|
Bonus
|
All other Comp.
|
Total
|
Julie Smolyansky, CEO and President(1)
|
2012
|
$890,903
|
$125,000
|
$14,280
|
$1,030,183
|
2011
|
$585,874
|
$ 75,000
|
$27,126
|
$ 688,000
|
|
(5)
|
|||||
Edward P. Smolyansky,
|
2012
|
$928,403
|
$150,000
|
$31,280
|
$1,109,683
|
CFO, Chief Accounting Officer, Treasurer, Chief
|
2011
|
$571,318
|
$100,000
|
$29,832
|
$ 701,150
|
Operating Officer and Secretary (2)
|
(6)
|
||||
Valeriy Nikolenko, Vice President of Operations
|
2012
|
$153,800
|
$ 60,000
|
$29,210
|
$ 243,010
|
and Secretary (4)(8)
|
2011
|
$ 91,800
|
$ 40,000
|
$18,500
|
$ 150,300
|
(7)
|
|||||
(1)
|
The Board appointed Julie Smolyansky as the CEO, CFO, President and Treasurer of the Company on June 10, 2002. From September 21, 1998 until such appointments, she had been Director of Sales and Marketing of the Company. Since November 2004, Ms. Smolyansky has served solely as CEO and President.
|
(2)
|
The Board appointed Edward Smolyansky as the CFO, Chief Accounting Officer and Treasurer of the Company in November 2004.
|
(3)
|
The Company approves, on an annual basis, the payment to Ludmila Smolyansky of salary and bonus as other compensation for continuing advisory services to the Company and in light of her extensive experience. Ludmila Smolyansky devotes as much time as necessary to the business of the Company.
|
(4)
|
The Board appointed Valeriy Nikolenko as the Vice President of Operations and Secretary of the Company in December 1993.
|
(5)
|
Represents (i) the Company’s portion of the matching contributions to the Company’s 401(k) plan on behalf of the following named executive officer, Julie Smolyansky: $0.00 for 2012; and (ii) the following amounts related to personal usage of automobiles leased by the Company, and related insurance and fuel, for 2012: $8,400 for of lease payments, $4,740 for insurance premiums and $1,140 for fuel.
|
(6)
|
Represents (i) the Company’s portion of the matching contributions to the Company’s 401(k) plan on behalf of the following named executive officer, Edward Smolyansky: $17,000 for 2012; and (ii) the following amounts related to personal usage of automobiles leased by the Company, and related insurance and fuel, for 2012: $8,400 for lease payments, $4,740 for insurance premiums and $1,140 for fuel.
|
(7)
|
Represents (i) the Company’s portion of the matching contributions to the Company’s 401(k) plan on behalf of the following named executive officer, Val Nikolenko: $18,500 for 2012; and (ii) the following amounts related to personal usage of automobiles leased by the Company, and related insurance and fuel, for 2012: $7,290 for lease payments, $2,570 for insurance premiums and $900 for fuel.
|
Name
|
Fees Earned or
Paid in Cash
|
All Other
Compensation
|
Total
|
|||||||||
Ludmila Smolyansky
|
$ | 591,626 | $ | 13,052 | (1) | $ | 604,678 | (2) | ||||
Pol Sikar
|
$ | 2,000 | — | $ | 2,000 | |||||||
Renzo Bernardi
|
$ | 2,000 | — | $ | 2,000 | |||||||
Gustavo Carlos Valle
|
— | — | — | |||||||||
Eugene Katz
|
$ | 1,000 | — | $ | 1,000 | |||||||
Paul Lee
|
$ | 500 | — | $ | 500 | |||||||
Jason Sher
|
— | — | — |
(1)
|
Of the Fees Paid in Cash, $591,626 represents the annual fees paid to Ms. Smolyansky for her services as a consultant to the Company. Ms. Smolyansky did not receive any additional retainer fees or other meeting attendance fees in her capacity as a director.
|
(2)
|
Represents (i) the Company’s portion of the matching contributions to the Company’s 401(k) plan on behalf of Ludmila Smolyansky: $11,332 for 2012; and (ii) $0.00 for insurance premiums and $1,720 for fuel.
|
Name and Address of Beneficial Owner(1)
|
Amount and Nature of Beneficial Ownership
|
Percent
of Class(2)
|
Ludmila Smolyansky(3,6)
|
7,410,484
|
45.3%
|
Julie Smolyansky(3,7)
|
548,265
|
3.4%
|
Edward Smolyansky(3)
|
307,546
|
1.9%
|
Pol Sikar(3)
|
3,000
|
*
|
Renzo Bernardi(3)
|
14,900
|
*
|
Gustavo Carlos Valle (3,4)
|
0
|
*
|
Paul Lee(3)
|
0
|
*
|
Jason Scher(3)
|
0
|
*
|
Val Nikolenko
|
0
|
*
|
All Directors and Officers of the Company as a Group
(Seven persons in total)
|
8,284,195
|
50.7%
|
Danone Foods, Inc.
|
3,454,756
|
21.1%
|
Mario J. Gabelli(5)
|
831,805
|
5.1%
|
_________________ | ||
*Less than .01%.
|
||
(1)
|
With the exception of Gustavo Carlos Valle and Danone Foods, Inc., the address for all Directors and shareholders listed in this table is 6431 Oakton St., Morton Grove, IL 60053. The address of Gustavo Carlos Valle and Danone Foods, Inc. is 100 Hillside Avenue, White Plains, NY 10603-2861.
|
(2)
|
Based upon 16,346,017 shares of Common Stock outstanding as of March 9, 2013.
|
(3)
|
A director or officer of the Company.
|
(4)
|
Mr. Valle is also an officer of the Dannon Company, Inc., which is an affiliate of Danone Foods, Inc.
|
(5)
|
Mr. Gabelli directly or indirectly controls or acts as the chief investment officer of Gabelli funds, LLC, GAMCO Asset Management, Inc. and Teton Advisors, Inc. The 831,805 shares of the Company's common stock that Mr. Gabelli may be deemed to beneficially own, include (i) 5,500 shares held directly by Mr. Gabelli, (ii) 326 shares held by Gabelli Funds, LLC, (iii) 286,305 shares held by GAMCO Asset Management, Inc., and (iv) 213,000 shares held by Teton Advisors, Inc.
|
(6)
|
Includes 7,410,484 shares held by the Ludmila Smolyansky Trust 2/1/05, of which Ms. Smolyansky is the trustee.
|
(7)
|
Includes 5,000 shares held by Ms. Smolyansky on behalf of minor children.
|
Plan category
|
(a)
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
|
(b)
Weighted-average exercise
price of outstanding options,
warrants and rights
|
(c)
Number of securities
remaining available for
future issuance under equity
compensation plans
(excluding securities reflected
in column (a))
|
Equity compensation plans approved by
|
|||
security holders
|
0
|
$0
|
940,000
|
Equity compensation plans not approved by security holders
|
0
|
$0
|
—
|
Total
|
0
|
$0
|
—
|
3.1
|
Amended and Restated Bylaws (incorporated by reference to Exhibit No. 3.5 of Lifeway’s Current Report on Form 8-K dated and filed on December 10, 2002 (File No. 000-17363)).
|
3.2
|
Articles of Incorporation, as amended and currently in effect (incorporated by reference to Exhibit 3.5 of Lifeway’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000 and filed on August 8, 2000 (File No. 000- 17363)).
|
4.1
|
Revolving Note dated February 6, 2009 (incorporated by reference to Exhibit 10.2 on Lifeway’s Current Report on Form 8-K dated February 6, 2009 and filed on February 13, 2009 (File No. 000- 17363)).
|
4.2
|
Term Note dated February 6, 2009 (incorporated by reference to Exhibit 10.3 on Lifeway’s Current Report on Form 8-K dated February 6, 2009 and filed on February 13, 2009 (File No. 000-17363)).
|
10.1
|
Lifeway Foods, Inc. Consulting and Services Compensation Plan, dated June 5, 1995 (incorporated by reference to Lifeway’s Registration Statement on Form S-8, (File No. 333-93306)).
|
10.2
|
Stock Purchase Agreement dated October 1, 1999 by and among Danone Foods, Inc., Lifeway Foods, Inc., Michael Smolyansky and certain other parties (incorporated by reference to Exhibit 10.10 of Lifeway’s Current Report on Form 8-K dated October 1, 1999, and filed October 12, 1999 (File No. 000-17363)).
|
10.3
|
Stockholders’ Agreement dated October 1, 1999 by and among Danone Foods, Inc., Lifeway Foods, Inc., Michael Smolyansky and certain other parties (incorporated by reference to Exhibit 10.11 of Lifeway’s Current Report on Form 8-K dated October 1, 1999, and filed October 12, 1999 (File No. 000-17363)).
|
10.4
|
Letter Agreement dated December 24, 1999 (amending original Stockholders’ Agreement with Danone Foods, Inc.) (incorporated by reference to Exhibit 10.12 of Lifeway’s Current Report on Form 8-K dated December 24, 1999, and filed January 12, 2000 (File No. 000-17363)).
|
10.5
|
Employment Agreement, dated September 12, 2002, between Lifeway Foods, Inc. and Julie Smolyansky (incorporated by reference to Exhibit 10.14 of Amendment No. 2 filed April 30, 2003 to Lifeway’s Quarterly Report on Form 10- QSB/A for the quarter ended September 30, 2002 (File No. 000-17363)).
|
10.6
|
Loan and Security Agreement dated February 6, 2009 by and among Lifeway Foods, Inc., Fresh Made, Inc., LFI Enterprises, Inc., Helios Nutrition Limited, Pride Main Street Dairy, LLC and Starfruit, LLC and The Private Bank and Trust Company (incorporated by reference to Exhibit 10.1 of Lifeway’s Current Report on Form 8-K dated February 6, 2009 and filed on February 13, 2009 (File No. 000- 17363)).
|
10.7
|
First Modification Agreement dated August 13, 2009 by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC (incorporated by reference to Exhibit 10.15 of Lifeway’s Annual Report on Form 10-K dated December 31, 2009 and filed on March 31, 2010 (File No. 000- 17363)).
|
10.8
|
Second Modification Agreement dated November 12, 2009 by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC (incorporated by reference to Exhibit 10.16 of Lifeway’s Annual Report on Form 10-K dated December 31, 2009 and filed on March 31, 2010 (File No. 000- 17363)).
|
10.9
|
Third Modification Agreement dated February 6, 2010 by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC (incorporated by reference to Exhibit 10.17 of Lifeway’s Annual Report on Form 10-K dated December 31, 2009 and filed on March 31, 2010 (File No. 000- 17363)).
|
10.10
|
Fourth Modification Agreement dated March 31, 2011 by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC (incorporated by reference to Exhibit 10.10 of Lifeway’s Annual Report on Form 10-K dated December 31, 2010 and filed on March 31, 2011 (File No. 000- 17363)).
|
10.11
|
Fifth Modification Agreement dated June 20, 2011 by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC.
|
10.12
|
Sixth Modification Agreement dated June 13, 2012, effective as of May 31, 2012, by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC.
|
14
|
Code of Ethics (incorporated by reference to Exhibit 14 on Lifeway’s Annual Report on Form 10-KSB for the year ended December 31, 2007 and filed on March 31, 2008 (File No. 000-17363)).
|
21
|
List of Subsidiaries of the Registrant
|
23.1
|
Consent of Independent Registered Public Accounting Firm
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Julie Smolyansky
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Edward P. Smolyansky
|
32.1
|
Section 1350 Certification of Julie Smolyansky
|
32.2
|
Section 1350 Certification of Edward P. Smolyansky
|
101
|
Interactive Data Files
|
LIFEWAY FOODS, INC.
|
|||
Date: April 1, 2013
|
By:
|
/s/ Julie Smolyansky
|
|
Julie Smolyansky
|
|||
Chief Executive Officer, President, and Director
|
Date: April 1, 2013
|
By:
|
/s/ Edward P. Smolyansky
|
|
Edward P. Smolyansky
|
|||
Chief Financial and Accounting Officer, Treasurer, Chief Operating Officer and Secretary
|
Date: April 1, 2013
|
/s/ Julie Smolyansky
|
||
Julie Smolyansky
|
|||
Chief Executive Officer, President, and Director
|
Date: April 1, 2013
|
/s/ Ludmila Smolyansky
|
||
Ludmila Smolyansky
|
|||
Chairperson of the Board of Directors
|
Date: April 1, 2013
|
/s/ Pol Sikar
|
||
Pol Sikar
|
|||
Director
|
Date:
|
|||
Gustavo Carlos Valle
|
|||
|
Director
|
Date: April 1, 2013
|
/s/ Renzo Bernardi
|
||
Renzo Bernardi
|
|||
Director
|
Date: April 1, 2013
|
/s/ Paul Lee | ||
Paul Lee
|
|||
Director
|
|||
Date: April 1, 2013 | /s/ Jason Scher | ||
Jason Scher | |||
Director
|
3.1
|
Amended and Restated Bylaws (incorporated by reference to Exhibit No. 3.5 of Lifeway’s Current Report on Form 8-K dated and filed on December 10, 2002 (File No. 000-17363)).
|
3.2
|
Articles of Incorporation, as amended and currently in effect (incorporated by reference to Exhibit 3.5 of Lifeway’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000 and filed on August 8, 2000 (File No. 000- 17363)).
|
4.1
|
Revolving Note dated February 6, 2009 (incorporated by reference to Exhibit 10.2 on Lifeway’s Current Report on Form 8-K dated February 6, 2009 and filed on February 13, 2009 (File No. 000- 17363)).
|
4.2
|
Term Note dated February 6, 2009 (incorporated by reference to Exhibit 10.3 on Lifeway’s Current Report on Form 8-K dated February 6, 2009 and filed on February 13, 2009 (File No. 000-17363)).
|
10.1
|
Lifeway Foods, Inc. Consulting and Services Compensation Plan, dated June 5, 1995 (incorporated by reference to Lifeway’s Registration Statement on Form S-8, (File No. 333-93306)).
|
10.2
|
Stock Purchase Agreement dated October 1, 1999 by and among Danone Foods, Inc., Lifeway Foods, Inc., Michael Smolyansky and certain other parties (incorporated by reference to Exhibit 10.10 of Lifeway’s Current Report on Form 8-K dated October 1, 1999, and filed October 12, 1999 (File No. 000-17363)).
|
10.3
|
Stockholders’ Agreement dated October 1, 1999 by and among Danone Foods, Inc., Lifeway Foods, Inc., Michael Smolyansky and certain other parties (incorporated by reference to Exhibit 10.11 of Lifeway’s Current Report on Form 8-K dated October 1, 1999, and filed October 12, 1999 (File No. 000-17363)).
|
10.4
|
Letter Agreement dated December 24, 1999 (amending original Stockholders’ Agreement with Danone Foods, Inc.) (incorporated by reference to Exhibit 10.12 of Lifeway’s Current Report on Form 8-K dated December 24, 1999, and filed January 12, 2000 (File No. 000-17363)).
|
10.5
|
Employment Agreement, dated September 12, 2002, between Lifeway Foods, Inc. and Julie Smolyansky (incorporated by reference to Exhibit 10.14 of Amendment No. 2 filed April 30, 2003 to Lifeway’s Quarterly Report on Form 10- QSB/A for the quarter ended September 30, 2002 (File No. 000-17363)).
|
10.6
|
Loan and Security Agreement dated February 6, 2009 by and among Lifeway Foods, Inc., Fresh Made, Inc., LFI Enterprises, Inc., Helios Nutrition Limited, Pride Main Street Dairy, LLC and Starfruit, LLC and The Private Bank and Trust Company (incorporated by reference to Exhibit 10.1 of Lifeway’s Current Report on Form 8-K dated February 6, 2009 and filed on February 13, 2009 (File No. 000- 17363)).
|
10.7
|
First Modification Agreement dated August 13, 2009 by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC (incorporated by reference to Exhibit 10.15 of Lifeway’s Annual Report on Form 10-K dated December 31, 2009 and filed on March 31, 2010 (File No. 000- 17363)).
|
10.8
|
Second Modification Agreement dated November 12, 2009 by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC (incorporated by reference to Exhibit 10.16 of Lifeway’s Annual Report on Form 10-K dated December 31, 2009 and filed on March 31, 2010 (File No. 000- 17363)).
|
10.9
|
Third Modification Agreement dated February 6, 2010 by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC (incorporated by reference to Exhibit 10.17 of Lifeway’s Annual Report on Form 10-K dated December 31, 2009 and filed on March 31, 2010 (File No. 000- 17363)).
|
10.10
|
Fourth Modification Agreement dated March 31, 2011 by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC (incorporated by reference to Exhibit 10.10 of Lifeway’s Annual Report on Form 10-K dated December 31, 2010 and filed on March 31, 2011 (File No. 000- 17363)).
|
10.11
|
Fifth Modification Agreement dated June 20, 2011 by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC.
|
10.12
|
Sixth Modification Agreement dated June 13, 2012, effective as of May 31, 2012, by and among The PrivateBank and Trust Company, Lifeway Foods, Inc., Fresh Made, Inc., Helios Nutrition Limited, Pride of Main Street Dairy, LLC and Starfruit, LLC.
|
14
|
Code of Ethics (incorporated by reference to Exhibit 14 on Lifeway’s Annual Report on Form 10-KSB for the year ended December 31, 2007 and filed on March 31, 2008 (File No. 000-17363)).
|
21
|
List of Subsidiaries of the Registrant
|
23.1
|
Consent of Independent Registered Public Accounting Firm
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Julie Smolyansky
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Edward P. Smolyansky
|
32.1
|
Section 1350 Certification of Julie Smolyansky
|
32.2
|
Section 1350 Certification of Edward P. Smolyansky
|
101
|
Interactive Data Files
|
|
1.
|
The Certificate of the Secretary of the Company dated on or about April 20, 2011 and delivered to The PrivateBank and Trust Company in connection with the Loan and Security Agreement dated February 6, 2009, as amended, is hereby reaffirmed as true and correct as of the date hereof; and
|
|
2.
|
Attached hereto as Exhibit A is a true and complete copy of the Certificate of Good Standing of the Company issued by the Pennsylvania Secretary of State and remains in full force and effect as of the date hereof.
|
|
1.
|
The Certificate of the Secretary of the Company dated on or about April 20, 2011 and delivered to The PrivateBank and Trust Company in connection with the Loan and Security Agreement dated February 6, 2009, as amended, is hereby reaffirmed as true and correct as of the date hereof; and
|
|
2.
|
Attached hereto as Exhibit A is a true and complete copy of the Certificate of Good Standing of the Company issued by the Illinois Secretary of State and remains in full force and effect as of the date hereof.
|
|
1.
|
The Certificate of the Manager of the Company dated on or about April 20, 2011 and delivered to The PrivateBank and Trust Company in connection with the Loan and Security Agreement dated February 6, 2009, as amended, is hereby reaffirmed as true and correct as of the date hereof; and
|
|
2.
|
Attached hereto as Exhibit A is a true and complete copy of the Certificate of Good Standing of the Company issued by the Illinois Secretary of State and remains in full force and effect as of the date hereof.
|
|
1.
|
The Certificate of the Secretary of the Company dated on or about April 20, 2011 and delivered to The PrivateBank and Trust Company in connection with the Loan and Security Agreement dated February 6, 2009, as amended, is hereby reaffirmed as true and correct as of the date hereof; and
|
|
2.
|
Attached hereto as Exhibit A is a true and complete copy of the Certificate of Good Standing of the Company issued by the Minnesota Secretary of State and remains in full force and effect as of the date hereof.
|
|
1.
|
The Certificate of the Chief Manager of the Company dated on or about April 20, 2011 and delivered to The PrivateBank and Trust Company in connection with the Loan and Security Agreement dated February 6, 2009, as amended, is hereby reaffirmed as true and correct as of the date hereof; and
|
|
2.
|
Attached hereto as Exhibit A is a true and complete copy of the Certificate of Good Standing of the Company issued by the Minnesota Secretary of State and remains in full force and effect as of the date hereof.
|
1.
|
I have reviewed this annual report on Form 10-K of Lifeway Foods, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 1, 2013
|
By:
|
/s/ Julie Smolyansky
|
||
Julie Smolyansky
Chief Executive Officer, President and Director
|
1.
|
I have reviewed this annual report on Form 10-K of Lifeway Foods, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 1, 2013
|
By:
|
/s/ Edward P. Smolyansky
|
||
Edward P. Smolyansky
Chief Financial and Accounting Officer, Treasurer, Chief Operating Officer and Secretary
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
|
Date:
|
April 1, 2013
|
By:
|
/s/ Julie Smolyansky
|
||
Julie Smolyansky
Chief Executive Officer, President and Director
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
|
Date:
|
April 1, 2013
|
By:
|
/s/ Edward P. Smolyansky
|
||
Edward P. Smolyansky
Chief Financial and Accounting Officer, Treasurer, Chief Operating Officer and Secretary
|
Summary Of Significant Accounting Policies (Schedule Of Intangible Assets Useful Lives) (Details)
|
12 Months Ended |
---|---|
Dec. 31, 2012
|
|
Recipes [Member]
|
|
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful lives | 4 years |
Lease Agreements [Member]
|
|
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful lives | 7 years |
Trade Names [Member]
|
|
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful lives | 15 years |
Formula [Member]
|
|
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful lives | 10 years |
Customer Relationships [Member]
|
|
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful lives | 12 years |
Maximum [Member] | Customer Lists And Other Customer Related Intangibles [Member]
|
|
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful lives | 10 years |
Minimum [Member] | Customer Lists And Other Customer Related Intangibles [Member]
|
|
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful lives | 7 years |
Provision For Income Taxes (Schedule Of Deferred Tax Assets And Liabilities) (Details) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Provision For Income Taxes [Abstract] | ||
Accumulated depreciation and amortization from purchase accounting adjustments | $ (3,164,716) | $ (3,671,285) |
Capital loss carry-forwards | 136,198 | 167,690 |
Total non-current net deferred tax liabilities | (3,028,518) | (3,503,595) |
Unrealized (gains) losses on investments | (41,260) | 6,890 |
Impairment of investments | 0 | 15,673 |
Inventory | 265,072 | 220,408 |
Allowance for doubtful accounts and discounts | 10,875 | 4,350 |
Capital loss carry-back | 0 | 91,369 |
Total current deferred tax assets | 234,687 | 338,690 |
Total current deferred tax assets | $ (2,793,831) | $ (3,164,905) |
Supplemental Cash Flow Information (Summary Of Cash Paid For Interest And Income Taxes) (Details) (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Supplemental Cash Flow Information [Abstract] | ||
Interest | $ 191,277 | $ 232,429 |
Income taxes | $ 3,413,687 | $ 1,169,334 |
Provision For Income Taxes (Tables)
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Dec. 31, 2012
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Provision For Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of The Provision For Income Taxes |
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Reconciliation Of The Provision For Income Taxes At Statutory Rate |
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Schedule Of Deferred Tax Assets And Liabilities |
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Summary Of Significant Accounting Policies (Tables)
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12 Months Ended | |||||||||||||||||||||
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Dec. 31, 2012
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Summary Of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||
Schedule Of Property And Equipment, Estimated Useful Lives |
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Schedule Of Intangible Assets Useful Lives |
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Comitments And Contingencies (Narrative) (Details) (USD $)
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Dec. 31, 2012
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Dec. 31, 2011
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Commitments and Contingencies Disclosure [Abstract] | ||
Total expenses on leases | $ 379,348 | $ 240,723 |
Investments (Narrative) (Details) (USD $)
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12 Months Ended | |
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Dec. 31, 2012
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Dec. 31, 2011
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Schedule of Available-for-sale Securities [Line Items] | ||
Proceeds from sale of investments | $ 1,475,730 | $ 1,810,816 |
Gross realized gains | 88,713 | 33,278 |
Gross realized losses | $ 17,427 | $ 62,534 |
Equities [Member]
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Schedule of Available-for-sale Securities [Line Items] | ||
Number Of Investment Securities | 2 | |
Corporate Bonds [Member]
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Schedule of Available-for-sale Securities [Line Items] | ||
Number Of Investment Securities | 4 | |
Option on Equity Securities [Member]
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Schedule of Available-for-sale Securities [Line Items] | ||
Number Of Investment Securities | 1 |
Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
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3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
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Mar. 31, 2012
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Mar. 31, 2011
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Jun. 30, 2012
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Jun. 30, 2011
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Sep. 30, 2012
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Sep. 30, 2011
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Dec. 31, 2012
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Dec. 31, 2011
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Percentage of gross sales | 31.00% | 29.00% | ||||||
Percentage Of Accounts Receivable | 30.00% | 20.00% | ||||||
Total advertising expenses | $ 2,679,798 | $ 3,156,096 | ||||||
Cost of goods sold | 13,305,767 | 10,255,086 | 26,241,485 | 23,469,083 | 39,991,618 | 35,629,038 | 52,295,464 | 47,151,776 |
General and administrative | 6,319,972 | 5,290,446 | ||||||
Scenario, Previously Reported [Member]
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Cost of goods sold | 12,637,386 | 9,722,230 | 25,153,336 | 22,478,463 | 38,299,212 | 34,047,699 | ||
Restatement Adjustment [Member]
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Cost of goods sold | 668,381 | 532,856 | 1,088,149 | 990,620 | 1,692,406 | 1,581,339 | 1,285,000 | |
General and administrative | $ (1,285,000) |
Provision For Income Taxes (Summary Of The Provision For Income Taxes) (Details) (USD $)
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12 Months Ended | |
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Dec. 31, 2012
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Dec. 31, 2011
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Provision For Income Taxes [Abstract] | ||
Federal | $ 2,757,332 | $ 1,059,336 |
State and local | 882,640 | 850,284 |
Total current | 3,639,972 | 1,909,620 |
Deferred | (434,896) | 68,217 |
Provision for income taxes | $ 3,205,076 | $ 1,977,837 |
Accrued Expenses (Schedule Of Accrued Expenses) (Details) (USD $)
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Dec. 31, 2012
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Dec. 31, 2011
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Accrued Expenses [Abstract] | ||
Accrued payroll and payroll taxes | $ 356,280 | $ 209,395 |
Accrued property tax | 302,573 | 323,885 |
Other | 496,824 | 20,445 |
Total accrued expenses | $ 1,155,677 | $ 553,725 |
Summary Of Significant Accounting Policies
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12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Summary Of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
Summary Of Significant Accounting Policies | Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows:
Principles of consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Helios Nutrition, Ltd., Pride of Main Street, L.L.C., Starfruit, L.L.C., Fresh Made, Inc. and Starfruit Franchisor, L.L.C. All significant intercompany accounts and transactions have been eliminated. Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made in preparing the consolidated financial statements include the allowance for doubtful accounts, the valuation of investment securities, the valuation of goodwill, intangible assets, and deferred taxes. Revenue Recognition
Sales of Company produced dairy products are recorded at the time of shipment and the following four criteria have been met: (i) The product has been shipped and the Company has no significant remaining obligations; (ii) Persuasive evidence of an agreement exists; (iii) The price to the buyer is fixed or determinable and (iv) Collection is probable. In addition, shipping costs invoiced to the customers are included in net sales and the related cost in cost of sales. Discounts and allowances are reported as a reduction of gross sales unless the allowance is attributable to an identifiable benefit separable from the purchase of the product, the value of which can be reasonably estimated, which would be charged to the appropriate expense account. Customer Concentration
Sales are predominately to companies in the retail food industry, located within the United States of America. Two major customers accounted for approximately 31% percent and 29% percent of gross sales for the years ended December 31, 2012 and 2011, respectively. These customers accounted for approximately 30% percent and 20% percent of accounts receivable as of December 31, 2012 and December 31, 2011, respectively. Cash and cash equivalents
All highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents.
The Company maintains cash deposits at several institutions located in the greater Chicago, Illinois and Philadelphia, Pennsylvania metropolitan areas. Investments
All investment securities are classified as available-for-sale and are carried at fair value. Unrealized gains and losses on available-for-sale securities are reported as a separate component of stockholders' equity. Amortization, accretion, interest and dividends, realized gains and losses, and declines in value judged to be other-than-temporary on available-for-sale securities are recorded in other income. All of the Company's securities are subject to a periodic impairment evaluation. This evaluation depends on the specific facts and circumstances. Factors that we consider in determining whether an other-than-temporary decline in value has occurred include: the market value of the security in relation to its cost basis; the financial condition of the investee; and the intent and ability to retain the investment for a sufficient period of time to allow for possible recovery in the market value of the investment. Accounts receivable
Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial condition and generally requires no collateral. Balances expected to be paid beyond one year are classified as long-term.
Accounts receivable are recorded at invoice amounts, and reduced to their estimated net realizable value by recognition of an allowance for doubtful accounts and anticipated discounts. The Company's estimate of the allowances for doubtful accounts and anticipated discounts are based upon historical experience, its evaluation of the current status and contract terms of specific receivables, and unusual circumstances, if any. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company's credit terms. Accounts considered uncollectible are charged against the allowance. Inventories
Inventories are stated at the lower of cost or market, cost being determined by the first-in, first-out method. Property and equipment
Property and equipment is stated at depreciated cost or fair value where depreciated cost is not recoverable. Depreciation is computed using the straight-line method. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the period. The cost of maintenance and repairs is charged to income as incurred; significant renewals and betterments are capitalized.
Property and equipment is being depreciated over the following useful lives:
Intangible assets acquired in business combinations
The Company accounts for intangible assets at historical cost. Intangible assets acquired in a business combination are recorded under the purchase method of accounting at their estimated fair values at the date of acquisition. Goodwill represents the excess purchase price over the fair value of the net tangible and other identifiable intangible assets acquired. Goodwill is not amortized, but is reviewed for impairment at least annually. Brand assets represent the fair value of brands acquired. Brand assets have an indefinite life and therefore are not amortized, rather are reviewed periodically for impairment. The Company amortizes other intangible assets over their estimated useful lives, as disclosed in the table below.
The Company reviews intangible assets and their related useful lives at least once per year to determine if any adverse conditions exist that would indicate the carrying value of these assets may not be recoverable. The Company conducts more frequent impairment assessments if certain conditions exist, including: a change in the competitive landscape, any internal decisions to pursue new or different strategies, a loss of a significant customer, or a significant change in the market place including changes in the prices paid for the Company's products or changes in the size of the market for the Company's products.
If the estimate of an intangible asset's remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life.
Intangible assets are being amortized over the following useful lives:
Income taxes
Deferred income taxes are the result of temporary differences that arise from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of the assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.
The principal sources of temporary differences are different depreciation and amortization methods for financial statement and tax purposes, unrealized gains or losses related to investments, capitalization of indirect costs for tax purposes, purchase price adjustments, and the recognition of an allowance for doubtful accounts for financial statement purposes.
The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The only periods subject to examination for the Company's federal returns are the 2010 and 2011 tax years. The Company believes that its income tax filing positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded. Treasury stock
Treasury stock is recorded using the cost method. Advertising and promotional costs
The Company expenses advertising costs as incurred. For the years ended December 31, 2012 and 2011 total advertising expenses were $2,679,798 and $3,156,096, respectively. Earnings per common share
Earnings per common share were computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. For the years ended December 31, 2012 and 2011, diluted and basic earnings per share were the same, as the effect of dilutive securities options outstanding was not significant. Correction of Prior Year Amounts
Management has revised the consolidated statement of income and comprehensive income for the year ended December 31, 2011 to correct an immaterial error. During 2011, amounts related to production of inventory were not presented as part of cost of goods sold at December 31, 2011 and were erroneously included as general and administrative operating expenses in our previously issued financial statements. This revision resulted in a $1.285 million increase in cost of goods sold and a corresponding decrease in the general and administrative operating expenses.
Additionally, Management has restated the unaudited statements of income and comprehensive income for interim periods during the years ended December 31, 2012 and 2011 for similar errors in our presentation of cost of goods sold and general and administrative operating expenses. (see Note 14).
There was no impact on previously reported net income, consolidated balance sheets or consolidated statements of cash flows. |