-----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, JyJf0XKHaXIJpTbnycNfSAIwcpRMfDiNPS8DjGYux2bDaitPCv0OOkGVudE/niTw 1OiWKGSOJFQwIfbonhygZw== 0000927016-00-000942.txt : 20000321 0000927016-00-000942.hdr.sgml : 20000321 ACCESSION NUMBER: 0000927016-00-000942 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000320 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPTA FOOD INGREDIENTS INC /DE CENTRAL INDEX KEY: 0000883326 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FOOD PREPARATIONS & KINDRED PRODUCTS [2090] IRS NUMBER: 043117634 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-19811 FILM NUMBER: 573803 BUSINESS ADDRESS: STREET 1: 25 WIGGINS AVE CITY: BEDFORD STATE: MA ZIP: 01730 BUSINESS PHONE: 6172765100 MAIL ADDRESS: STREET 1: 25 WIGGINS AVENUE CITY: BEDFORD STATE: MA ZIP: 01730 8-K/A 1 FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________ FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ______________ Date of Report (Date of earliest event reported): December 31, 1999 OPTA FOOD INGREDIENTS, INC. (Exact name of registrant as specified in its charter) Delaware 0-19811 04-3117634 - ------------------ --------------------- --------------------- (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 25 Wiggins Avenue Bedford, Massachusetts 01730 --------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (781) 276-5100 Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report: Not Applicable ___________________________________________________________ Page 1 of 12 Pages Item 2. Acquisition or Disposition of Assets. On December 31, 1999, Opta Food Ingredients, Inc. ("Opta") acquired all of the assets of privately held Canadian Harvest of Cambridge, Minnesota from DCV, Inc., a Delaware-based holding company ("DCV"), and all of the outstanding common stock of Canadian Harvest Process Ltd. ("CHPL"), a wholly owned subsidiary of DCV, in an arms length transaction. The assets of Canadian Harvest and CHPL include manufacturing facilities in Cambridge, Minnesota and St. Thomas, Ontario and related assets. Pursuant to the Purchase and Sale Agreement between DCV and Opta dated as of December 31, 1999, Opta paid DCV $12 million for the Canadian Harvest assets and the stock of CHPL based on the historical value of the assets (exclusive of net working capital) acquired. In addition, Opta paid approximately $1.6 million for the net working capital of the purchased entities, consisting of inventory plus accounts receivable less accounts payable, as of December 31, 1999. Opta paid for this acquisition out of available cash and cash equivalents. Opta will continue the purchased entities' business of manufacturing and supplying dietary oat fiber to the food industry and will integrate this business into its own. A copy of the Opta press release announcing the acquisition of Canadian Harvest which was issued on January 3, 2000 is filed herewith as Exhibit 99.1 and incorporated herein by reference. Item 7. Financial Statements and Exhibits. (a) Financial statements of businesses acquired. Page 2 of 12 Pages REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Opta Food Ingredients, Inc. In our opinion, the accompanying combined balance sheet and related combined statements of income and retained earnings and of cash flows present fairly, in all material respects, the financial position of Canadian Harvest, a division of DCV, Inc. and Canadian Harvest Process Ltd., a wholly owned subsidiary of DCV, Inc. (together "Canadian Harvest" or the "Company") at December 31, 1999 and the results of their operations and their cash flows for the year in conformity with accounting principles generally accepted in the United States. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP Boston, Massachusetts February 22, 2000 Page 3 of 12 Pages CANADIAN HARVEST COMBINED BALANCE SHEET DECEMBER 31, 1999 (In thousands, except per share data) Assets Current assets: Accounts receivable........................................ $ 1,029 Inventories................................................ 834 Prepaid expenses and other current assets.................. 36 ------- Total current assets................................... 1,899 Fixed assets, net.............................................. 7,946 Patents and trademarks......................................... 210 Other assets................................................... 3,197 ------- $13,252 ======= Liabilities and Stockholders' Equity Current liabilities: Accounts payable........................................... 467 Accrued expenses and other current liabilities............. 170 Intercompany payable - DCV................................. 4,419 ------- Total current liabilities.............................. 5,056 ------- Stockholders' equity: Parent's equity interest................................... 8,196 ------- $13,252 ======= The accompanying notes are an integral part of the financial statements. Page 4 of 12 Pages CANADIAN HARVEST COMBINED STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1999 (In thousands) Product revenue................................................... $7,776 Operating expenses: Cost of revenue............................................... 6,322 Selling, general and administrative........................... 358 Research and development...................................... 115 ------ 6,795 ------ Income from operations............................................ 981 Other income.................................................. 8 Interest expense.............................................. (216) ------ Income before income tax expense.................................. 773 Provision for income tax expense.................................. 307 ------ Net income........................................................ 466 Parents' equity interest December 31, 1998........................ 7,730 ------ Parents' equity interest December 31, 1999........................ $8,196 ====== The accompanying notes are an integral part of the financial statements. Page 5 of 12 Pages CANADIAN HARVEST COMBINED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1999 (In thousands) Cash flows from operating activities: Net income............................................... $ 466 Adjustments to reconcile net income to net cash used by operating activities: Depreciation and amortization.................... 1,601 Changes in assets and liabilities: Accounts receivable.......................... (23) Inventories.................................. (61) Prepaid expenses............................. 38 Accounts payable............................. 138 Accrued expenses............................. 78 Intercompany payable - DCV................... (2,363) ------- Net cash used in operating activities... (126) ------- Cash flows from investing activities: Purchases of fixed assets................................ (126) ------- Net cash used in investing activities... (126) ------- Net decrease in cash and cash equivalents.................... (252) Cash and cash equivalents, beginning of year................. 252 ------- Cash and cash equivalents, end of year....................... $ -- ======= The accompanying notes are an integral part of the financial statements. Page 6 of 12 Pages CANADIAN HARVEST NOTES TO FINANCIAL STATEMENTS 1. Basis of Presentation Canadian Harvest, as presented in these financial statements, is the combination of Canadian Harvest, a division of DCV, Inc. and Canadian Harvest Process Ltd., a wholly owned subsidiary of DCV, Inc., which are both under common control. Effective December 31, 1999, Opta Food Ingredients, Inc. acquired the operating assets of the two Canadian Harvest entities, (together "Canadian Harvest"). Historically, combined financial statements were not prepared for the two Canadian Harvest entities. The accompanying financial statements were prepared to comply with the rules and regulations of the Securities and Exchange Commission. These combined financial statements are derived from the Canadian Harvest entities' historical accounting records. 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. Revenue Recognition Revenue from product sales is recorded upon shipment. Inventories Inventories are stated at the lower of cost or market, cost determined using the first-in, first-out method. Fixed Assets Fixed assets are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to fifteen years. Maintenance and repairs are charged to expense as incurred. Financial Instruments The carrying amount of Canadian Harvest's financial instruments, which include accounts receivable, accounts payable and accrued expenses, approximates their fair value at December 31, 1999. Research and Development Expenses Research and development costs are expensed as incurred. Income Taxes The Canadian Harvest entities have an informal tax sharing agreement with the former parent in which tax expense is allocated to the Canadian Harvest entities directly by the parent. Taxes payable is included in the intercompany - DCV account in the accompanying financial statements. Page 7 of 12 Pages 3. Inventories Inventories consist of the following (in thousands): Raw materials $ 123 Finished goods 711 ----- $ 834 ===== 4. Fixed Assets Fixed assets consist of the following (in thousands): Useful life in years ----------- Land and land improvements $ 462 Buildings 15 1,892 Autos 4 202 Machinery and equipment 5-7 9,570 Office equipment 3-7 135 ------ 12,261 Less accumulated depreciation and amortization 4,315 ------ $7,946 ====== Depreciation expense for the year ended December 31, 1999 was $1,601,000. 5. Acquisition by Opta Food Ingredients, Inc. On December 31, 1999, Opta Food Ingredients, Inc. ("Opta") purchased all of the assets of privately held Canadian Harvest of Cambridge, Minnesota from DCV, Inc., a Delaware-based holding company ("DCV"), and all of the outstanding common stock of Canadian Harvest Process Ltd. ("CHPL"), a wholly owned subsidiary of DCV. The assets of Canadian Harvest and CHPL include manufacturing facilities in Cambridge, Minnesota and St. Thomas, Ontario and related assets. Pursuant to the Purchase and Sale Agreement between DCV and Opta dated as of December 31, 1999, Opta paid DCV $12 million for the long term Canadian Harvest assets and the stock of CHPL based on the historical value of the assets acquired. In addition, Opta paid approximately $1.6 million for the net working capital of the purchased entities, consisting of inventory plus accounts receivable less accounts payable and accrued expenses, as of December 31, 1999. Page 8 of 12 Pages (b) Pro forma financial information. Unaudited Pro Forma Financial Information The accompanying unaudited proforma combined financial statements are presented as if Opta Food Ingredients and Canadian Harvest had been operating as a combined entity. The unaudited pro forma combined balance sheet as of December 31, 1999 presents the financial position of Opta Food Ingredients assuming the acquisition had occurred on December 31, 1999. The unaudited pro forma combined statement of income presents the results of operations of Opta Food Ingredients assuming the acquisition had occurred on January 1, 1999. All material adjustments to reflect the acquisition are set forth in the column "Pro Forma Adjustments." The pro forma data is for informational purposes only and may not necessarily reflect future results of operations and financial position or what the results of operations or financial position would have been had Opta Food Ingredients and Canadian Harvest been operating as a combined entity for the specified period. The unaudited proforma combined financial statements should be read in conjunction with the historical financial statements and notes thereto of Opta Food Ingredients. UNAUDITED PRO FORMA COMBINED BALANCE SHEET DECEMBER 31, 1999 (In thousands)
Historical -------------------------- Opta Food Canadian Pro Forma Pro Forma Ingredeints Harvest Adjustments Combined ----------- -------- ----------- --------- Assets Current assets: Cash and cash equivalents........................... $16,237 $ -- $(13,659) (b) $ 2,578 Short term investments.............................. 10,004 -- -- 10,004 Accounts receivable, net............................ 2,831 1,029 67 (b) 3,927 Inventories, net.................................... 3,744 834 100 (b) 4,678 Prepaid expenses and other current assets........... 546 36 (36) (a) 546 ------- ------- -------- -------- Total current assets...................... 33,362 1,899 (13,528) 21,733 Fixed assets, net........................................ 12,030 7,946 3,844 (b) 23,820 Goodwill, net............................................ 1,549 -- -- 1,549 Patents and trademarks, net.............................. 482 210 (100) (b) 592 Other assets............................................. 45 3,197 (3,197) (a) 121 76 (b) ------- ------- -------- -------- $47,468 $13,252 $(12,905) $ 47,815 ======= ======= ======== ======== Liabilities and Stockholders' Equity Current liabilities: Current portion of long term debt................... 394 -- -- 394 Accounts payable.................................... 1,608 467 (203) (a) 1,872 Accrued expenses.................................... 1,197 170 (87) (a) 1,280 Intercompany payables............................... -- 4,419 (4,419) (a) -- ------- ------- -------- -------- Total current liabilities................. 3,199 5,056 (4,709) 3,546 ------- ------- -------- -------- Long term debt........................................... 2,733 -- -- 2,733 Stockholders' equity: Common stock........................................ 111 -- -- 111 Additional paid in capital.......................... 79,807 -- -- 79,807 Retained earnings (deficit)......................... (37,938) 8,196 (8,196) (a) (37,938) Treasury stock...................................... (444) -- -- (444) ------- ------- -------- -------- 41,536 8,196 (8,196) 41,536 $47,468 $13,252 $(12,905) $ 47,815 ======= ======= ======== ========
Page 9 of 12 Pages UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1999 (In thousands, except per share amounts)
Historical ------------------------- Opta Food Canadian Pro Forma Pro Forma Ingredeints Harvest Adjustments Combined ----------- -------- ----------- --------- Product revenue........................................... $19,289 $ 7,776 $ -- $27,065 Operating expenses: Cost of revenue...................................... 12,408 6,322 -- 18,730 Selling, general and administrative.................. 4,553 358 -- 4,911 Research and development............................. 3,275 115 -- 3,390 Restructuring........................................ 350 -- -- 350 ------- ------- ------- ------- 20,586 6,795 -- 27,381 ------- ------- ------- ------- Income (loss) from operations............................. (1,297) 981 -- (316) Interest income........................................... 1,344 -- (642) (c) 702 Interest expense.......................................... (262) (216) -- (478) Other income, net......................................... 58 8 -- 66 ------- ------- ------- ------- Income (loss) before income tax expense................... (157) 773 (642) (26) Provision for income tax expense.......................... -- 307 (307) (d) -- ------- ------- ------- ------- Net income (loss)......................................... $ (157) $ 466 $ (335) $ (26) ======= ======= ======= ======= Basic and diluted loss per share.......................... $ (0.01) $ (0.00) Weighted average shares outstanding - basic and diluted................................... 11,031 11,031
Pro Forma Adjustments (a) To eliminate the Canadian Harvest entities' assets, liabilities and equity not relating to the business acquired in the acquisition of Canadian Harvest. (b) To reflect the tentative purchase price as if the acquisition had occurred on January 1, 1999. The company intends to have an independent appraisal completed on the assets acquired. The purchase price was allocated based on the estimated fair values at the date of the acquisition, as follows: Property, plant and equipment $11,790 Intangibles 110 Accounts receivable 1,096 Inventory 934 Accounts payable 263 Accrued expenses 83 Transaction costs 75 ------- Total $13,659 ======= (c) To reflect adjustment of interest income for cash used as if the purchase had occurred on January 1, 1999 with out regard to the positive cash flow generated from the operations of Canadian Harvest during 1999. (d) To decrease provision for income tax expense based on Opta Food Ingredients' net operating loss carryforwards. Page 10 of 12 Pages (c) Exhibits. 2.1 Purchase and Sale Agreement Between DCV, Inc., as Seller, and Opta Food Ingredients, Inc., as Buyer, Dated as of December 30, 1999.* 99.1 Press Release of the Registrant, dated January 3, 2000.* Page 11 of 12 Pages * Filed as an exhibit to Opta's Form 8-K filed with the Securities and Exchange Commission on Janury 18, 2000. 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 hereunto duly authorized. OPTA FOOD INGREDIENTS, INC. (Registrant) Date: March 17, 2000 /s/ Scott A. Kumf ---------------------------------- Scott A. Kumf, Chief Financial Officer, Vice President Administration and Treasurer Page 12 of 12 Pages -----END PRIVACY-ENHANCED MESSAGE-----