-----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, LWJxGUPfdsdkjnMXljwxLp5Lv9KgkB0BeZxpSftb9BTKkXgptiXrNSfIgmKrf3Dw g1/V4FgBlRDtxWdtKbVD6g== 0000902595-96-000046.txt : 19960514 0000902595-96-000046.hdr.sgml : 19960514 ACCESSION NUMBER: 0000902595-96-000046 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960513 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL FOOD & BEVERAGE INC /DE/ CENTRAL INDEX KEY: 0000880584 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FOOD PREPARATIONS & KINDRED PRODUCTS [2090] IRS NUMBER: 330307734 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-43621 FILM NUMBER: 96561384 BUSINESS ADDRESS: STREET 1: 30152 AVENTURA STREET 2: PO BOX 80609 CITY: RANCHO SANTA MARGARI STATE: CA ZIP: 92668 BUSINESS PHONE: 7148588800 MAIL ADDRESS: STREET 1: 30152 AVENTURA STREET 2: PO BOX 80609 CITY: RANCHO SANTA MARGARI STATE: CA ZIP: 92688 10-Q 1 FORM 10Q UNITED STATES 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 March 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 33-43621 INTERNATIONAL FOOD AND BEVERAGE, INC. (Exact name of registrant as specified in its charter) Delaware 33-0307734 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 30152 Aventura, Rancho Santa Margarita, California 92688 (Address of principal executive offices) (Zip Code) (714) 858-8800 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____ The number of shares of Common Stock outstanding as of March 31, 1996 was: 154,033,569 INTERNATIONAL FOOD AND BEVERAGE, INC. FINANCIAL STATEMENTS AND OTHER INFORMATION INDEX PAGE NUMBER PART I - FINANCIAL INFORMATION Item 1. Financial Statements Statements of Operations for the three months and nine months ended March 30, 1996 and April 1, 1995 1 Balance Sheets as of March 30, 1996 and July 1, 1995 2 Statements of Cash Flows for the nine months ended March 30, 1996 and April 1, 1995 3 Notes to Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 6 SIGNATURES 6 INTERNATIONAL FOOD AND BEVERAGE, INC. PART I - FINANCIAL INFORMATION Item 1 - Financial Statements STATEMENTS OF OPERATIONS
Nine Months Six Months Three Months Ended Ended Ended March 30, April 1, March 30, December 31, 1996 1995 1996 1994 ----------- ----------- ----------- ------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Predecessor-Note 2) REVENUES $ 1,375,000 $ 1,712,000 $ 4,384,000 $ 3,580,000 COST OF SALES 1,179,000 1,325,000 3,623,000 3,279,000 ----------- ------------ ------------ ------------ GROSS PROFIT 196,000 387,000 761,000 301,000 OPERATING EXPENSES: Selling and distribution 214,000 417,000 720,000 1,412,000 General and administrative 120,000 182,000 396,000 361,000 Interest expense 14,000 0 26,000 111,000 ----------- ------------ ------------ ------------ 348,000 599,000 1,142,000 1,884,000 ----------- ------------ ------------ ------------ NET LOSS $ (152,000) $ (212,000) $ (381,000) $ (1,583,000) =========== ============ ============ ============ NET LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.00) $ (.01) =========== ============= ============ ============= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 154,033,569 153,923,569 154,027,854 153,923,569 =========== ============ ============ ============ See accompanying notes.
INTERNATIONAL FOOD AND BEVERAGE, INC. BALANCE SHEETS
March 30, July 1, 1996 1995 ----------- ------------- (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 35,000 $ 192,000 Accounts receivable 258,000 186,000 Inventories 461,000 504,000 Prepaid expenses 9,000 40,000 ---------- ---------- Total current assets 763,000 922,000 FIXED ASSETS 942,000 $1,053,000 ---------- ---------- $1,705,000 $1,975,000 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY) CURRENT LIABILITIES: Notes payable and current maturities of long-term debt $ 226,000 $ 240,000 Accounts payable 632,000 502,000 Accrued wages and benefits 335,000 413,000 Accrued commissions and marketing 119,000 446,000 Other accrued expenses 114,000 110,000 ---------- ---------- Total current liabilities 1,426,000 1,711,000 LONG-TERM DEBT 769,000 373,000 SHAREHOLDERS' EQUITY (DEFICIENCY) (490,000) (109,000) ---------- --------- $1,705,000 $1,975,000 ========== ========== See accompanying notes.
INTERNATIONAL FOOD AND BEVERAGE, INC. STATEMENTS OF CASH FLOWS
Nine Months Three Months Six Month Ended Ended Ended March 30, April 1, December 1996 1995 1994 ----------- ------------ --------------- (Unaudited) (Unaudited) (Unaudited) (Predecessor-Note2) CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (381,000) $ (212,000) $(1,583,000) Adjustments to reconcile net loss to net cash used by operating activities Depreciation and amortization 126,000 42,000 304,000 Deferred interest on short and long-term debt 111,000 Changes in assets and liabilities: Accounts receivable (72,000) 77,000 297,000 Inventories 43,000 51,000 (72,000) Prepaid expenses 31,000 8,000 23,000 Accounts payable 129,000 (39,000) 19,000 Accrued wages and benefits (77,000) (31,000) 31,000 Accrued commissions and marketing (327,000) (145,000) 125,000 Accrued expenses 4,000 (28,000) (305,000) ---------- ---------- ----------- Net cash used by operating activities (524,000) (277,000) (1,050,000) ---------- ---------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to fixed assets (15,000) (83,000) Cash used to satisfy net acquired liabilities of predecessor company (290,000) ---------- ---------- ----------- Net cash used by investing activities (15,000) (290,000) (83,000) ---------- ---------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of notes payable 456,000 700,000 Principal payments on notes payable (74,000) (24,000) (48,000) ---------- ---------- ----------- Net cash provided by (used in) financing activities 382,000 (24,000) 652,000 ---------- ---------- ----------- NET INCREASE (DECREASE) IN CASH (157,000) (591,000) (481,000) CASH AND CASH EQUIVALENTS, beginning of year 192,000 800,000 481,000 ---------- ---------- ----------- CASH AND CASH EQUIVALENTS, end of period $ 35,000 $ 209,000 $ 0 ========== =========== =========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period Interest $ 19,000 $ 5,000 $ 5,000 Income taxes 0 0 0 See accompanying notes. -3-
INTERNATIONAL FOOD AND BEVERAGE, INC. NOTES TO FINANCIAL STATEMENTS Note 1 - Financial Statements In the opinion of management, the accompanying financial statements, which have not been audited by independent public accountants, reflect all adjustments necessary to present fairly the data for the periods presented therein. The results of operations for the nine month period ended March 30, 1996 are not necessarily indicative of the results that may be expected for the entire fiscal year ending June 29, 1996. Note 2 - Change in Control A change in control transaction occurred December 31, 1994 and was recorded in conformity with Accounting Principles Board Opinion No. 16. Accordingly, assets and liabilities as of January 1, 1995 were restated and the results of operations since that time reflect the "push-down" of the new controlling shareholder's basis, minority interest at its historical basis, and the consideration received from the former controlling shareholder. See footnotes to the audited financial statements for a more detailed description of the transaction. INTERNATIONAL FOOD AND BEVERAGE, INC. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The change in control and utilization of purchase accounting as of January 1, 1995 has resulted in the accompanying statements for the nine months ended March 30, 1996 being non comparable versus the prior year corresponding period. Accordingly, the following discussion addresses historical results in periods since January 1, 1995. Given the current sales mix seasonality is not a material factor in the Company's revenue trends. Revenues for the three month period ended March 30, 1996 were roughly comparable to revenues for the immediately preceding quarter ended December 30, 1995 and had declined by $337,000 versus the prior year three month period ended April 1, 1995. Substantially all of the revenue decline versus the prior year period was due to the loss in May 1995 of a single division of the Company's largest retail customer. This division has recently reversed its pizza buying decision and resumed purchases from the Company beginning late in March 1996. The Company continues to market its pizzas and crusts nationally to retail supermarket service delicatessen customers and major foodservice accounts. The Company also contract manufactures for a customer who sells to both domestic retail chains and export customers. Beginning in May 1996 the Company will launch a private label program producing a line of pizzas to be sold in the frozen food section of a major national grocery retailer. The gross profit margin of 14.2% for the three months ended March 30, 1996 was roughly comparable to the profit margin of 15.2% reported for the immediately preceding quarter ended December 30, 1995. This compares with a gross profit of 22.6% for the prior year comparable three month period. Gross profit for the nine month period ended March 30, 1996 was 17.4%. The decline versus the prior year is due primarily to the loss of the retail division previously mentioned. Current year margins in the past nine months reflect cost reduction improvements combined with gains in operating efficiencies, offset by higher material costs (principally in cheese) that have occurred over the past six months. Fixed overhead per unit sold remains high at the company's low level of production. The Company projects an increase in its gross profit contribution rate assuming the Company is able to achieve increased production volume and would be further benefited if cheese prices return to historical price levels. Selling, general and administrative expenses for the Company's first, second and third fiscal quarters ended March 30, 1996 were substantially constant in dollars and as a percent of sales. These operating expense levels reflect an improvement in fixed overhead of approximately $75,000 per month resulting from restructuring and cost containment efforts initiated early in calendar 1995. The Company does not anticipate having to add back these fixed overhead costs in support of revenue growth approaching double its current level assuming a similar mix of products and customers. The resulting loss for the three month period ended March 30, 1996 of $153,000 versus reported losses of $176,000 for the immediately preceding quarter ended December 30, 1995 and $212,000 for the three month period ended April 1, 1995. Liquidity and Capital Resources Net cash used by operating activities was $524,000 for the nine month period ended March 30, 1996. Management believes that the Company becomes cash positive from operations at a monthly revenue rate between $650,000 and $750,000 at current sales prices and product mix. In the period since July 1, 1995 the Company's principal shareholder provided to the Company debt financing totaling $355,000 the proceeds of which have been used for working capital. In March 1996 the Company entered into a one year $500,000 revolving line of credit agreement collateralized by eligible accounts receivables and inventories. As of April 27, 1996 the outstanding borrowings under this credit facility was $195,000. The Company believes that this credit facility will be adequate to fund the Company's short term working capital requirements. In future periods the Company may require additional debt or equity capital to finance its operations. There can be no assurance that the Company will be successful in obtaining the necessary financing. The Company's primary emphasis remains revenue generation through increased sales to existing and new customers. It is also aggressively evaluating opportunities ranging from contract manufacturing for others to the acquisition of a synergistic product line or company. The foregoing Management's Discussion and Analysis contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, regarding management's expectations concerning gross profit contribution, cheese prices, volume and working capital requirements. The Company cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward looking statements, including, among others, the following: reduced or lack of increase in demand for the Company's products, competitive pricing pressures, changes in the market prices of ingredients used in the Company's products and the level of expenses incurred in the Company's operations. PART II - OTHER INFORMATION Item 6. - Exhibits and Reports on Form 8-K (a) None. (b) No reports on Form 8-K were filed during the three months ended March 30, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: May 10, 1996 INTERNATIONAL FOOD AND BEVERAGE, INC. /s/ Michael W. Hogarty Michael W. Hogarty President and Chief Executive Officer /s/ Ann M. Gooch Ann M. Gooch Vice President of Finance (Principal Financial and Accounting Officer) EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MAR-30-1996 10Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JUL-01-1995 JUL-02-1995 MAR-30-1996 35 0 328 70 461 763 1,152 210 1,705 1,426 0 0 0 388 (878) 1,705 4,384 4,384 3,623 1,116 0 0 26 (381) 0 (381) 0 0 0 (381) (.00) (.00)
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