-----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, QxMnVGn3WQavoChGdh+u+GZAdvUsB+IeGgk7QK4gFfy6qVN8+ynLk/dzOqW0hGA7 S4zeVClUGOJT64p15JX4kA== 0000897069-98-000006.txt : 19980115 0000897069-98-000006.hdr.sgml : 19980115 ACCESSION NUMBER: 0000897069-98-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971130 FILED AS OF DATE: 19980114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHLAND CRANBERRIES INC /WI/ CENTRAL INDEX KEY: 0000818010 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 391583759 STATE OF INCORPORATION: WI FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16130 FILM NUMBER: 98506644 BUSINESS ADDRESS: STREET 1: 800 FIRST AVE SO STREET 2: P O BOX 8020 CITY: WISCONSIN RAPIDS STATE: WI ZIP: 54494 BUSINESS PHONE: 7154244444 10-Q 1 NORTHLAND CRANBERRIES, INC. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number 0-16130 NORTHLAND CRANBERRIES, INC. (Exact name of registrant as specified in its charter) Wisconsin 39-1583759 (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 800 First Avenue South P.O. Box 8020 Wisconsin Rapids, Wisconsin 54495-8020 (Address of principal executive offices) Registrant's telephone number, including area code (715)-424-4444 Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ____X____ No ________ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes _________ No __________ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Class A Common Stock December 31, 1997 13,155,300 Class B Common Stock December 31, 1997 636,202 NORTHLAND CRANBERRIES, INC. FORM 10-Q INDEX PART I. FINANCIAL INFORMATION Page Item 1. Financial Statements Condensed Consolidated Balance Sheets . . . . . . . . . . 3 Condensed Consolidated Statements of Operations . . . . . 4 Condensed Consolidated Statements of Cash Flow . . . . . . 5 Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . 7-9 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 10 SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . 11 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS NORTHLAND CRANBERRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEET (DOLLARS IN THOUSANDS) ASSETS (Unaudited) November 30, August 31, 1997 1997 Current assets: Cash and cash equivalents $ 311 $ 231 Accounts and notes receivable 10,607 6,996 Investments 1,260 1,260 Inventories 38,790 26,454 Other 2,127 1,715 Deferred income taxes 3,035 3,035 --------- --------- Total current assets 56,130 39,691 --------- --------- Property and equipment - at cost 164,413 161,865 Less accumulated depreciation 25,028 23,592 --------- --------- Net property and equipment 139,385 138,273 Leasehold interests, net 1,000 1,039 Other 2,099 1,929 -------- --------- Total assets $ 198,614 $ 180,932 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,829 $ 3,806 Accrued liabilities 9,035 4,092 Current portion of long-term obligations 3,797 3,647 --------- --------- Total current liabilities 17,661 11,545 Long-term obligations 95,084 83,130 Deferred income taxes 9,504 9,446 --------- --------- Total liabilities 122,249 104,121 --------- --------- Shareholders' equity: Common stock - Class A 132 132 Common stock - Class B 6 6 Additional paid-in capital 67,893 67,889 Retained earnings 8,334 8,784 --------- --------- Total shareholders' equity 76,365 76,811 --------- --------- Total liabilities and shareholders' equity $ 198,614 $ 180,932 ========= ========= See accompanying notes to condensed consolidated financial statements NORTHLAND CRANBERRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) (Unaudited) For the 3 months ended November 30, 1997 1996 Revenues $ 18,431 $10,920 Cost of sales 8,814 4,675 --------- --------- Gross profit 9,617 6,245 Costs and expenses: Selling, general and administrative 8,004 2,965 Interest 1,432 795 --------- --------- Total costs and expenses 9,436 3,760 --------- --------- Income before income taxes 181 2,485 Income taxes 79 983 --------- --------- Net income $ 102 $ 1,502 ========= ========= Net income per common share (based on 14,357,702 and 14,196,028 weighted average common shares outstanding, respectively): $ 0.01 $ 0.11 ========= ========= See accompanying notes to condensed consolidated financial statements NORTHLAND CRANBERRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) (Unaudited) For the 3 months ended November 30, 1997 1996 Cash flows from operating activities: Net income $ 102 $ 1,502 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 1,542 1,146 Changes in assets and liabilities: Receivables and other current assets (4,023) (5,055) Inventories (12,336) (7,813) Accounts payable and accrued liabilities 5,966 2,928 Deferred income taxes 58 801 --------- --------- Net cash used for operating activities (8,691) (6,491) --------- --------- Investing activities: Acquisitions of cranberry operations 0 (4,850) Property and equipment additions, net (2,555) (3,305) Other (80) (131) --------- --------- Net cash used for investing activities (2,635) (8,286) --------- --------- Financing activities: Increase in debt 12,104 14,704 Dividends paid (551) (539) Exercise of stock options 3 721 Other (150) (170) --------- --------- Net cash provided by financing activities 11,406 14,716 --------- --------- Net decrease in cash and cash equivalents 80 (61) Cash and cash equivalents: Beginning of period 231 266 --------- --------- End of period $ 311 $ 205 ========= ========= Supplemental disclosures of cash flow information: Cash paid for: Interest (net of amount capitalized) $ 997 $ 269 ========= ========= See accompanying notes to condensed consolidated financial statements NORTHLAND CRANBERRIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 BASIS OF PRESENTATION The condensed consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of the Company, the foregoing statements contain all adjustments necessary to present fairly the financial position of the Company as of November 30, 1997, and its results of operations and cash flows for the three-month periods ended November 30, 1997 and 1996, respectively. The Company's consolidated balance sheet as of August 31, 1997 included herein has been taken from the Company's audited financial statements of that date included in the Company's latest annual report. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements can be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report. The Company periodically reviews long-lived assets to assess recoverability and impairments will be recognized in operating results if a permanent diminution in value were to occur. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Total revenues for the three months ended November 30, 1997 were $18.4 million, compared to $10.9 million in the prior year's quarter. The 68.8% increase in first quarter revenues was wholly attributable to increased sales of Northland branded 100% juice products. Trade industry data for the most recent 12-week period ended December 7, 1997, indicated Northland juice products achieved an 8.6% market share of supermarket shelf-stable cranberry beverages on a national basis, up from a 5.8% market share for the previous 12-week period ended September 14, 1997. The Company believes its increased revenues and resulting increased market share were primarily due to its aggressive marketing campaign, which included over $5 million in media and trade spending during the quarter. The Company plans to continue to aggressively market its juice products throughout the fiscal year. First quarter revenues also included seasonal fresh fruit sales for the Thanksgiving holiday. The Company continues to experience intense competition in its efforts to develop initial private label accounts and sales of concentrate and bulk frozen fruit. Cost of sales for the first quarter of fiscal 1998 was $8.8 million compared to $4.7 million for the first quarter of fiscal 1997, resulting in gross margins of 52.2% and 57.2%, in each respective period. The decrease in gross margin in fiscal 1998 was primarily due to the Company's changing product mix, with fiscal 1997 revenues more heavily weighted toward higher margin fresh fruit sales as compared to the majority of fiscal 1998 revenues being generated by the Company's branded juice sales. The Company's gross margins during the remainder of fiscal 1998 will be dependent upon its product mix and existing market conditions. Selling, general and administrative expenses were $8.0 million, or 43.4% of total revenues, for the three-month period ended November 30, 1997. For the three months ended November 30, 1996, selling, general and administrative expenses were $3.0 million, or 27.2% of total revenues for that quarter. This planned increase in selling, general and administrative expenses was primarily attributable to costs related to the Company's aggressive marketing campaign to support the development and growth of its Northland branded 100% juice products. The Company plans to continue to aggressively promote its juice products throughout the fiscal year. Interest expense was $1.4 million for the three-month period ended November 30, 1997 compared to $795,000 during the same period in fiscal 1997. The increase in interest expense was due to increased debt levels, which resulted from funding marsh acquisitions, property and equipment additions and seasonal operating activities. As expected, fiscal 1998 first quarter net income and per share earnings decreased to $102,000 and $0.01 per share respectively from fiscal 1997 first quarter net income of $1.5 million, or $0.11 per share. FINANCIAL CONDITION Net cash used for operating activities was $8.7 million in the first three months of fiscal 1998 compared to $6.5 million used for operating activities in the same period in fiscal 1997. First quarter net cash used for operating activities was the result of increases in current assets and liabilities in the ordinary course of business during the period. Accounts receivable increased $4.0 million as a result of seasonal fresh fruit sales for the Thanksgiving holiday and increased branded juice sales. Inventory increased $12.3 million due to the fall harvest of the Company's crop, the purchase of 104,000 barrels of fruit from other independent cranberry growers and increased raw materials and finished goods inventories to support increased branded juice sales. Accounts payable increased $6.0 million primarily due to contract installment payments due independent cranberry growers for the purchase of their fruit. Working capital increased $10.3 million to $38.5 million at November 30, 1997 compared to working capital of $28.1 million at August 31, 1997. Net cash used for investing activities decreased during the three-month period ended November 30, 1997 to $2.6 million from $8.3 million during the same period in the prior fiscal year. The decrease was principally the result of reduced property and equipment additions. First quarter fiscal 1998 property and equipment additions were $2.6 million compared to total property and equipment additions of $8.2 million in the first quarter of the prior year. Fiscal 1997 first quarter property and equipment additions included the $4.9 million acquisition of a 108-acre cranberry property. Net cash provided by financing activities was $11.4 million in the three-month period ended November 30, 1997, compared to $14.7 million during the same period in the prior fiscal year. The Company's debt increased $12.1 million in the first quarter of fiscal 1998 primarily due to financing a $10.3 million increase in seasonal and growth working capital and $2.6 million for property and equipment additions. Working capital was $38.5 million at November 30, 1997 compared to working capital of $28.1 million at August 31, 1997. The Company's total debt (including current portion) was $98.9 million at November 30, 1997 for a total debt- to-equity ratio of 1.29 to 1 compared to total debt of $86.8 million and a total debt-to-equity ratio of 1.13 to 1 at August 31, 1997. The Company utilizes its revolving bank credit facility, together with cash generated from operations, to fund its working capital requirements throughout its fiscal year. As of November 30, 1997, the principal amount outstanding under the Company's revolving credit facility was $60.8 million, with an additional $14.2 million available under its credit facilities with a syndicate of regional banks until December 2000. The Company believes its credit facilities, together with cash generated from operations, are sufficient to fund its ongoing operational needs over the remainder of fiscal 1998. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain matters discussed in this Management's Discussion and Analysis of Financial Condition and Results of Operations are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include such words as the Company "believes," "anticipates," "expects," or words of similar import. Similarly, statements that describe the company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those currently anticipated. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward- looking statements and are cautioned not to place undo reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this Form 10-Q and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits Exhibit 27 - Financial Data Schedule b. Form 8-K No reports on Form 8-K were filed by the Company during the quarterly period to which this Form 10-Q relates. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned Chief Financial Officer thereunto duly authorized. NORTHLAND CRANBERRIES, INC. DATE: January 13, 1998 By: /s/ John Pazurek John Pazurek Chief Financial Officer EXHIBIT INDEX Exhibit No. Description 27 Financial Data Schedule EX-27 2
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF NORTHLAND CRANBERRIES, INC. AS OF AND FOR THE 3 MONTHS ENDED NOVEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS AUG-31-1997 SEP-01-1997 NOV-30-1997 311 1,260 10,607 0 38,790 55,099 164,413 25,028 198,614 17,661 95,084 0 0 138 67,893 198,614 18,356 18,431 9,008 9,242 0 0 1,432 181 79 102 0 0 0 102 0.01 0.01
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