-----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, DtoauBdHmlT27NksQg7FcHRG/oqm9PNJ8LqSXZ88+RHTqvD1Lbd6bIIuDBfqTn7X 0cL7t08+IW8qaFj2zSomXg== 0000950152-97-006025.txt : 19970815 0000950152-97-006025.hdr.sgml : 19970815 ACCESSION NUMBER: 0000950152-97-006025 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19970629 FILED AS OF DATE: 19970814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIGNATURE BRANDS USA INC CENTRAL INDEX KEY: 0000883327 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC HOUSEWARES & FANS [3634] IRS NUMBER: 363635286 STATE OF INCORPORATION: DE FISCAL YEAR END: 1002 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19912 FILM NUMBER: 97661665 BUSINESS ADDRESS: STREET 1: 7005 COCHRAN ROAD CITY: GLENWILLOW STATE: OH ZIP: 44139-4312 BUSINESS PHONE: 2165424200 MAIL ADDRESS: STREET 1: 7005 COCHRAN ROAD CITY: GLENWILLOW STATE: OH ZIP: 44139-4312 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH O METER PRODUCTS INC /DE DATE OF NAME CHANGE: 19930328 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIGNATURE BRANDS INC CENTRAL INDEX KEY: 0000925252 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 363330781 STATE OF INCORPORATION: DE FISCAL YEAR END: 1002 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-80000-01 FILM NUMBER: 97661666 BUSINESS ADDRESS: STREET 1: 7005 COCHRAN ROAD CITY: GLENWILLOW STATE: OH ZIP: 44139-4312 BUSINESS PHONE: 2165424200 MAIL ADDRESS: STREET 1: 7005 COCHRAN ROAD CITY: GLENWILLOW STATE: OH ZIP: 44139-4312 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH O METER INC DATE OF NAME CHANGE: 19940613 10-Q 1 SIGNATURE BRANDS USA/SIGNATURE BRANDS INC 10-Q 1 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 period ended June 29, 1997 ----------------------------------------------------------- or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________________ to ____________________ Commission File Number: 0-19912 --------------------------------------------------------- Signature Brands USA, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 36-3635286 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7005 Cochran Road, Glenwillow, Ohio 44139-4312 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (216) 542-4000; after August 16, 1997 (440) 542-4000 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) 24700 Miles Road, Bedford Heights, Ohio 44146-1399 - -------------------------------------------------------------------------------- (Former Address) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 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 ----- ----- As of July 31, 1997, the issuer had 9,080,534 shares of common stock outstanding. 2 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 period ended June 29, 1997 ----------------------------------------------------------- or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________________ to ____________________ Commission File Number: 33-80000 --------------------------------------------------------- Signature Brands, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Ohio 36-3330781 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7005 Cochran Road, Glenwillow, Ohio 44139-4312 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (216) 542-4000; after August 16, 1997 (440) 542-4000 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) 24700 Miles Road, Bedford Heights, Ohio 44146-1399 - -------------------------------------------------------------------------------- (Former Address) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 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 Registrant is a wholly-owned subsidiary of Signature Brands USA, Inc. Accordingly, none of its equity securities are owned by non-affiliates. 3 PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SIGNATURE BRANDS USA, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
June 29 September 29 1997 1996 ----------------------- ----------------------- (Unaudited) ASSETS Current assets Cash $ 1,270 736 Trade accounts receivable, net 45,843 57,960 Inventories 38,262 43,626 Deferred income taxes 5,206 5,206 Other current assets 992 1,479 ----------------------- ----------------------- Total current assets 91,573 109,007 Property, plant and equipment, net 17,101 18,522 Other assets Excess of cost over fair value of net assets acquired, net 136,878 139,830 Deferred financing costs, net 3,937 4,579 Other 1,496 1,552 ----------------------- ----------------------- Total other assets 142,311 145,961 ----------------------- ----------------------- Total assets $ 250,985 273,490 ======================= =======================
(Continued) 2 4 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
June 29 September 29 1997 1996 -------------- ----------- (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 7,500 6,000 Accounts payable 18,231 22,851 Accrued liabilities 19,805 19,542 --------- --------- Total current liabilities 45,536 48,393 Long-term debt Revolving credit facility 26,300 41,600 Term note 54,008 60,250 Senior subordinated notes 68,848 68,681 --------- --------- Total long-term debt 149,156 170,531 Product liability 3,270 3,516 Other 3,717 2,043 --------- --------- Total liabilities 201,679 224,483 Stockholders' equity Common stock, par value $.01 per share; authorized 20,000 shares; issued and outstanding 9,080 shares 91 91 Paid-in capital 51,772 51,772 Warrants 1,773 1,773 Accumulated deficit (4,330) (4,629) --------- --------- Total stockholders' equity 49,306 49,007 --------- --------- Total liabilities and stockholders' equity $ 250,985 273,490 ========= =========
See accompanying notes to consolidated financial statements. 3 5 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
Thirteen weeks ended Thirty-nine weeks ended ----------------------- ------------------------ June 29 June 30 June 29 June 30 1997 1996 1997 1996 -------- -------- -------- -------- Net sales $ 64,194 59,339 213,255 213,021 Operating costs and expenses Cost of goods sold 44,176 40,328 147,565 145,729 Selling, general and administrative expenses 14,453 14,041 48,298 44,929 Amortization of intangible assets 984 1,000 2,952 3,000 -------- -------- -------- -------- Total operating costs and expenses 59,613 55,369 198,815 193,658 -------- -------- -------- -------- Operating income 4,581 3,970 14,440 19,363 Interest expense 4,484 4,637 14,041 14,451 Other income (101) (94) (349) (260) -------- -------- -------- -------- Income (loss) before income taxes 198 (573) 748 5,172 Income tax (benefit) expense 123 (355) 449 3,403 -------- -------- -------- -------- Net income (loss) $ 75 (218) 299 1,769 ======== ======== ======== ======== Net income (loss) per share $ 0.01 (0.02) 0.03 0.20 ======== ======== ======== ======== Weighted average shares outstanding 9,080 9,071 9,080 9,071
See accompanying notes to consolidated financial statements. 4 6 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (AMOUNTS IN THOUSANDS)
Thirty-nine weeks ended ----------------------- June 29 June 30 1997 1996 -------- -------- Cash flows from operating activities Net income $ 299 1,769 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization of plant and equipment 5,189 4,418 Loss on asset write-offs and disposals - 106 Amortization of intangible assets 2,952 3,000 Amortization of deferred financing costs 642 643 Accretion of debt discount 168 168 Changes in Accounts receivable 12,117 8,530 Inventories 5,364 7,132 Other assets 543 1,050 Accounts payable (4,620) (11,564) Accrued liabilities 263 2,105 Noncurrent liabilities 1,428 (583) -------- -------- Net cash provided by operating activities 24,345 16,774 -------- -------- Cash flows from investing activities Capital expenditures (3,768) (2,910) -------- -------- Net cash used in investing activities (3,768) (2,910) -------- -------- Cash flows from financing activities Proceeds from revolving credit facility 46,700 52,800 Repayments of revolving credit facility (62,000) (62,600) Repayment of long-term debt (4,743) (3,750) -------- -------- Net cash used in financing activities (20,043) (13,550) -------- -------- Increase in cash 534 314 Cash at beginning of the period 736 835 -------- -------- Cash at end of the period $ 1,270 1,149 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for Interest $ 11,024 11,453 Income taxes 1,890 3,454
See accompanying notes to consolidated financial statements. 5 7 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (UNAUDITED) (1) Basis of Presentation --------------------- The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions are eliminated in consolidation. In the opinion of management, the information furnished herein includes all adjustments of a normal recurring nature that are necessary for a fair presentation of results for the interim periods shown in accordance with generally accepted accounting principles. The unaudited interim consolidated financial statements have been prepared using the same accounting principles that were used in preparation of the Company's annual report on Form 10-K for the year ended September 29, 1996, and should be read in conjunction with the consolidated financial statements and notes thereto. Because of the seasonal nature of the small appliance and consumer scale industries, the results of operations for the interim period are not necessarily indicative of results for the full fiscal year. (2) Inventories ----------- The components of inventories are as follows:
June 29 September 29 1997 1996 ----------- ----------- Inventories at FIFO cost Raw materials and purchased parts $12,940 13,446 Finished goods 24,733 29,591 ------- ------- 37,673 43,037 Excess of LIFO cost over FIFO 589 589 ------- ------- Inventories $38,262 43,626 ======= =======
Work-in-process inventories are not significant and are included with raw materials. Inventories accounted for under the last-in, first-out (LIFO) method represent 61 percent and 62 percent of inventories at June 29, 1997 and September 29, 1996, respectively. 6 8 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (UNAUDITED) (3) Condensed Consolidated Financial Information -------------------------------------------- Condensed consolidated financial information for Signature Brands, Inc. at June 29, 1997 and September 29, 1996, and for the thirteen-week and thirty-nine-week periods ended June 29, 1997 and June 30, 1996 is as follows:
June 29 September 29 1997 1996 ------------ ----------- Current assets $ 91,573 109,007 Noncurrent assets 159,412 164,483 --------- --------- Total assets $ 250,985 273,490 ========= ========= Current liabilities $ 45,536 48,393 Noncurrent liabilities 156,143 176,090 Intercompany payables 47,658 47,658 --------- --------- Total liabilities 249,337 272,141 Stockholder's equity Common stock - $1.00 stated value; authorized 850 shares; issued and outstanding 100 shares in 1997 and $.01 par value; authorized and outstanding 1,000,000 shares in 1996 - 10 Paid-in capital 2,811 2,821 Accumulated deficit (1,472) (1,173) --------- --------- Total stockholder's equity 1,349 1,648 --------- --------- Total liabilities and stockholder's equity $ 250,985 273,490 ========= =========
Thirteen-week period ended Thirty-nine-week period ended -------------------------------- ----------------------------------- June 29 June 30 June 29 June 30 1997 1996 1997 1996 ------------- ------------- -------------- -------------- Net sales $ 64,194 59,339 213,255 213,021 Gross profit 20,018 19,011 65,690 67,292 Net income (loss) 75 (218) 299 1,769
7 9 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (UNAUDITED) (4) Name Change ----------- On March 6, 1997, the stockholders of the Company approved an amendment to the Company's Certificate of Incorporation to change the name of the Company to "Signature Brands USA, Inc." In view of the Company's name change, on April 30, 1997, Health o meter, Inc. the Company's operating subsidiary, was merged with and into a wholly-owned subsidiary of the Company, Signature Brands, Inc., an Ohio corporation, formed by the Company solely for the purpose of changing the name of Health o meter, Inc. to "Signature Brands, Inc." 8 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPANY OVERVIEW - ---------------- Signature Brands USA, Inc. (the "Company") is a holding company which, through its wholly owned subsidiary, Signature Brands, Inc. ("Signature Brands"), designs, manufactures, markets, and distributes a comprehensive line of consumer and professional products. The Company's consumer products, marketed under the Mr. Coffee(R) and Health o meter(R) brand names include automatic drip coffeemakers, teamakers, filters, water filtration products, accessories, and other kitchen counter top appliances as well as bath, kitchen, and diet scales and therapeutic devices. Professional products include the Pelouze(R) and Health o meter(R) brands of office, food service and medical scales. RESULTS OF OPERATIONS - --------------------- THIRTEEN WEEKS ENDED JUNE 29, 1997 AND JUNE 30, 1996 Overview. Net sales in the third quarter of fiscal 1997 increased approximately 8.2 percent to $64.2 million, compared with $59.3 million for the same period in fiscal 1996. The Company's gross profit in the third quarter of fiscal 1997 was $20.0 million, or approximately 31.2 percent of net sales, compared with $19.0 million, or approximately 32.0 percent of net sales in the same period in fiscal 1996. Net Sales and Gross Profit Consumer Products Division. In the third quarter of 1997, the Consumer Products Division's net sales were $54.3 million compared with $50.3 million in 1996, an increase of 7.9 percent. The increase in net sales was primarily attributable to increased sales of coffeemakers, consumer scales and water filtration products somewhat offset by reduced filter and hot teamaker sales. The Consumer Products Division's gross profit in the third quarter of 1997 increased 5.1 percent to $16.8 million from $16.0 million in 1996. The gross profit margin was 30.9 percent of net sales in 1997, compared with 31.8 percent in 1996. The Consumer Products Division experienced reduced margins because the mix of teamaker sales shifted toward lower margin promotional products. Historically, gross profit margins on individual product lines have been greatest near the point of introduction, gradually decreasing as the product matures and becomes subject to pricing pressure. There continues to be intense pressure on retail prices and there can be no assurance as to the Company's ability to achieve price increases or maintain current price levels in the future. For these reasons, the Company continues its efforts to introduce new products and to reduce the cost of existing products as a means of protecting margins. 9 11 Professional Products Division. In the third quarter of 1997, the Professional Products Division's net sales increased 9.9 percent to $9.9 million compared with $9.0 million in 1996. The Company experienced increased sales across all of its distribution channels. The Professional Products Division's gross profit was $3.4 million, or 34.8 percent of net sales, in the third quarter of 1997, compared with $3.0 million, or 33.6 percent of net sales, in 1996. The margin improvement resulted from increased margins due to lower defective product rates primarily for office products, offset in part by reduced margins for commercial products. Selling, General and Administrative Expenses. Selling, general and administrative expenses ("SG&A") for the third quarter of fiscal 1997 totaled $14.5 million, or approximately 22.5 percent of net sales, compared with $14.0 million, or approximately 23.7 percent of net sales, for the third quarter of fiscal 1996. SG&A as a percent of net sales declined in the current period because fixed general and administrative costs are being measured against a larger net sales amount. Amortization of Intangible Assets. The amortization of intangible assets relates primarily to intangible assets associated with the acquisition by the Company of Mr. Coffee, inc. on August 17, 1994 ("the Acquisition"). Interest Expense. Net interest expense for the third quarter of fiscal 1997 was approximately $4.5 million, compared with $4.6 million for the same period in the prior year. The decrease in interest expense is attributable to lower overall borrowings offset in part by higher interest rates. Income Taxes. The effective tax rate was 62.1 percent for the third quarter of fiscal 1997, compared with an effective tax rate benefit of 62.0 percent in 1996. Expenses not deductible for tax purposes, primarily the amortization of intangible assets associated with the Acquisition, resulted in an effective tax rate significantly higher than the statutory tax rate in both periods. Net Income. Based on the foregoing, the Company experienced net income of $0.1 million in the third quarter of fiscal 1997 compared with a net loss of $0.2 million in 1996. THIRTY-NINE WEEKS ENDED JUNE 29, 1997 AND JUNE 30, 1996 Overview. Net sales in the first nine months of fiscal 1997 increased approximately 0.1 percent to $213.3 million, compared with $213.0 million for the same period in fiscal 1996. The Company's gross profit in the first nine months of fiscal 1997 was 65.7 million, or approximately 30.8 percent of net sales, compared with $67.3 million, or approximately 31.6 percent of net sales in the same period in fiscal 1996. Net Sales and Gross Profit Consumer Products Division. In the first nine months of 1997, the Consumer Products Division's net sales were $183.3 million compared with $186.2 million in 1996, a decrease of 1.5 percent. The decrease in net sales was primarily attributable to reduced teamaker and filter sales somewhat offset by increased sales of coffeemakers, therapeutic devices and 10 12 consumer scales. The Consumer Products Division's gross profit in the first nine months of 1997 decreased 4.2 percent to $55.3 million from $57.7 million in 1996. The gross profit margin was 30.1 percent of net sales in 1997, compared with 31.0 percent in 1996. The decrease in gross profit as a percent of sales was primarily the result of a reduction in high margin teamaker sales. Professional Products Division. In the first nine months of 1997, the Professional Products Division's net sales increased 11.6 percent to $29.9 million compared with $26.8 million in 1996. The Company experienced increased sales in the first nine months of 1997 across all distribution channels. The Professional Products Division's gross profit was $10.2 million, or 34.1 percent of net sales, in the first nine months of 1997, compared with $9.6 million, or 36.0 percent of net sales, in 1996. The decrease in gross margin as a percent of sales was primarily attributable to reduced margins in the international and commercial distribution channels. Selling, General and Administrative Expenses. Selling, general and administrative expenses ("SG&A") for the first nine months of fiscal 1997 totalled $48.3 million, or approximately 22.6 percent of net sales, compared with $44.9 million, or approximately 21.1 percent of net sales, for the first nine months of fiscal 1996. The increase in SG&A as a percentage of net sales is mainly attributable to increased national advertising expenditures primarily to support the marketing of teamaker and water filtration products. Amortization of Intangible Assets. The amortization of intangible assets relates primarily to intangible assets associated with the Acquisition. Interest Expense. During the first nine months of fiscal 1997 net interest expense was approximately $14.0 million, compared with $14.5 million in the same period of fiscal 1996. The decrease in interest expense is attributable to lower overall borrowings offset in part by higher interest rates. Income Taxes. In the first nine months of fiscal 1997 and 1996 the effective tax rate was 60.0 percent and 65.8 percent, respectively. Expenses not deductible for tax purposes, primarily the amortization of intangible assets associated with the Acquisition, resulted in an effective tax rate significantly higher than the statutory tax rate in both periods. Net Income. Based on the foregoing, the Company experienced net income of approximately $0.3 million and $1.8 million in the first nine months of fiscal 1997 and 1996, respectively. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Company's primary sources of liquidity are internally generated cash and borrowings under a Credit Agreement among Signature Brands and a group of Banks represented by Banque Nationale de Paris, New York Branch ("BNP") as agent and as issuer of letters of credit, ("the Bank Credit Agreement") entered into in connection with the Acquisition. 11 13 Cash flow activity for the first nine months of fiscal 1997 and 1996 is presented in the Consolidated Statements of Cash Flows. During the first nine months of fiscal 1997, the Company generated approximately $24.3 million in cash flow from operating activities. Net income plus non-cash charges provided approximately $9.3 million. Changes in working capital components generated approximately $15.0 million in fiscal 1997, compared with $6.7 million during the first nine months of fiscal 1996 as a result of improved working capital management. The decrease in accounts receivable and inventories, which generated approximately $17.5 million, was offset partially by a reduction in accounts payable, which required $4.6 million, and is attributable to seasonal factors. The Company's business is seasonal, with a large portion of its sales and earnings generated in the first fiscal quarter of the year. During fiscal 1996, the Company generated approximately 34 percent of its annual net sales in this quarter. The Company's aggregate capital expenditures during the first nine months of fiscal 1997 were approximately $3.8 million. The Company anticipates making $2.4 million of capital expenditures for the remainder of fiscal 1997. These capital expenditures relate primarily to new product tooling, information systems and production equipment. Management plans to fund these capital expenditures with available cash, cash flow from operations and, if necessary, borrowings under the revolving credit facility provided under the Bank Credit Agreement. Indebtedness incurred in connection with the Acquisition has significantly increased the Company's cash requirements and imposes various restrictions on its operations. The Acquisition and related transactions were financed with approximately $98 million in borrowings under the Bank Credit Agreement, approximately $70 million in proceeds from a unit offering of 13% senior subordinated notes due 2002, (the "Notes") and warrants to purchase shares of Common Stock at a price of $6.25 per share, and approximately $17.2 million in net proceeds received from the exercise of certain transferable rights to purchase 3,543,433 shares of Common Stock issued to the stockholders of the Company. The Notes are generally not redeemable at the option of the Company until August 15, 1999. For more detailed information, see the Company's Annual Report on Form 10-K for the year ended September 29, 1996. The Bank Credit Agreement includes a $75.0 million term loan facility, which is subject to amortization on a quarterly basis in aggregate annual amounts of $6.0 million, $8.75 million, $17.5 million, $15.0 million and $19.0 million during fiscal 1997 through fiscal 2001, respectively, and a $60.0 million revolving credit facility. Signature Brands is required to make prepayments on the term loan and revolving credit facility with a percentage of Excess Cash Flow (as defined) and 100% of the proceeds from certain asset sales, issuances of debt and equity securities and extraordinary items outside the ordinary course of business. The required term loan repayment of $1.0 million for fiscal 1997 was paid in the second quarter. Signature Brands may also make optional prepayments, in full or in part, on the term loan. The Bank Credit Agreement and the indenture governing the Notes contain various customary covenants which the Company was in compliance with at June 29, 1997. Borrowing availability under the revolving credit facility at June 29, 1997 was $15.8 million after considering outstanding letters of credit of $1.0 million, actual borrowings of 12 14 $26.3 million, and sufficiency of collateral. Signature Brands' obligations under the Bank Credit Agreement are secured by substantially all of Signature Brands' assets and a pledge of all of its issued and outstanding common stock. Signature Brands' obligations under the Bank Credit Agreement and the Notes are guaranteed by the Company. Based upon current levels of operations, anticipated sales growth and plans for expansion, management believes that the Company's cash flow from operations (including favorable cost savings estimated to be achieved in the future), combined with borrowings available under the Bank Credit Agreement, will be sufficient to enable the Company to meet all of its cash operating requirements over both the short term and the longer term, including scheduled interest and principal payments, capital expenditures and working capital needs. This expectation is predicated upon continued growth in revenues in the Company's core businesses consistent with historical experience, achievement of operating cash flow margins consistent with historical experience, and the absence of significant increases in interest rates. INFLATION Increases in interest rates, the costs of materials and labor, and Federal, state and local tax rates can significantly affect the Company's operations. Management believes that the current practices of maintaining adequate operating margins through a combination of new product introductions, product differentiation, cost reduction, outsourcing, manufacturing and overhead expense control and careful management of working capital are its most effective tools for coping with inflation. NEW ACCOUNTING PRONOUNCEMENTS During 1995, the Financial Accounting Standards Board ("FASB") issued two pronouncements which are effective for financial statements for years beginning after December 15, 1995. The Company has considered the requirements of Statement of Financial Accounting Standards ("SFAS") No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and has determined that it will not require recognition of any impairment losses. The Company has also determined to remain within the accounting prescribed by APB Opinion No. 25, Accounting for Stock Issued to Employees, and accordingly the implementation of SFAS No. 123, Accounting for Stock-Based Compensation will result in additional disclosures without any impact on the statements of operations or financial condition. During 1997, the FASB issued SFAS No. 128 Earnings per Share, which changes the computation and presentation of earnings per share information. SFAS No. 128 is effective for financial statements issued for periods ending after December 15, 1997 and, accordingly, will be adopted by the Company in the first quarter of the fiscal year beginning October 1998. Adoption of this statement will not materially impact the current computation and presentation of earnings per share. During 1997, the FASB also issued SFAS No. 129, Disclosure of Information about Capital Structure, with an effective date for periods ending after December 15, 1997; SFAS No. 130 Reporting Comprehensive Income, and SFAS No. 131, Disclosures about 13 15 Segments of an Enterprise and Related Information: SFAS No. 130 and 131 are effective for periods beginning after December 15, 1997. The disclosure requirements of these standards will, accordingly, be included in the financial statements of the Company for the appropriate periods relating to fiscal 1998. ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K - -------------------------------------------- (a) See the Exhibit Index at page 15 of this Form 10-Q. (b) No reports on Form 8-K were filed during the quarter for which this report is filed. 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 thereunto duly authorized. SIGNATURE BRANDS USA, INC. SIGNATURE BRANDS, INC. Date: August 13, 1997 /s/ Steven M. Billick ---------------------------------- Steven M. Billick Senior Vice President, Treasurer and Chief Financial Officer 14 16 Exhibit Index ------------- Exhibit Number Description of Document - -------------- ----------------------- 3.2 Articles of Incorporation of Signature Brands, Inc. 3.4 Code of Regulations of Signature Brands, Inc. 4.4 First Supplemental Indenture Dated as of April 30, 1997 Between Signature Brands, Inc. and Firstar Bank of Minnesota as Trustee 27 Financial Data Schedule 15 EX-3.2 2 EXHIBIT 3.2 1 Exhibit 3.2 05729-0106 Approved ARTICLES OF INCORPORATION By LO --------- OF Date 1-29-97 --------- SIGNATURE BRANDS, INC. Amount $85 --------- * * * * * 97012918801 The undersigned, a citizen of the United States, desiring to form a corporation, FOR PROFIT, does hereby CERTIFY: ARTICLE I --------- The name of the corporation is Signature Brands, Inc. ARTICLE II ---------- The principal office of the corporation shall be located in Cleveland, Cuyahoga County, Ohio. ARTICLE III ----------- The purpose or purposes for which, or for any of which, it is formed are to enter into, promote or conduct any kind of business, contract or undertaking permitted to corporations for profit organized under the General Corporation Laws of the State of Ohio, to engage in any lawful act or activity for which corporations may be formed under Sections 1701.01 to 1701.98, inclusive, of the Revised Code of Ohio, and, in connection therewith, to exercise all express and incidental powers normally permitted such corporations. ARTICLE IV ---------- The authorized number of shares of capital stock of the corporation shall consist of Eight Hundred Fifty (850) shares, all of which shall be common shares, without par value. ARTICLE V --------- The corporation may purchase, from time to time, and to the extent permitted by the laws of Ohio, shares of any class of stock issued by it. Such purchases may be made either in the open market or at private or public sale, and in such manner and amounts, from such holder or 2 05729-0107 holders of outstanding shares of the corporation and at such prices as the Board of Directors of the corporation shall from time to time determine, and the Board of Directors is hereby empowered to authorize such purchases from time to time without any vote of the holders of any class of shares now or hereafter authorized and outstanding at the time of any such purchase. ARTICLE VI ---------- Notwithstanding any provision of the laws of the State of Ohio now or hereafter in force requiring, for any purpose, the vote of the holders of greater than a majority but less than all of the voting power of the corporation or of any class or classes of shares thereof, such action (unless otherwise expressly prohibited by statute) may be taken by vote of the holders of shares entitling them to exercise a majority of the voting power of the corporation or of such class or classes. ARTICLE VII ----------- The preemptive right to purchase additional shares or any other securities of the corporation is expressly denied to all shareholders of all classes. ARTICLE VIII ------------ Section 1701.831 of the Revised Code of Ohio shall not apply to any control share acquisition (as defined in Section 1701.01(Z)(1) of the Revised Code of Ohio, as the same may be amended from time to time, or in any successor thereto, however denominated) of shares of any class of capital stock of the corporation. ARTICLE IX ---------- Chapter 1704 of the Revised Code of Ohio shall not apply to the corporation or to any transaction between the corporation and any holder of shares of any class of capital stock of the corporation. 3 05729-0108 IN WITNESS WHEREOF, I have subscribed my name to these Articles of Incorporation on January 28, 1997. /s/ Gregory J. Dziak ----------------------------- Gregory J. Dziak (Sole Incorporator) EX-3.4 3 EXHIBIT 3.4 1 Exhibit 3.4 CODE OF REGULATIONS OF SIGNATURE BRANDS, INC. Adopted April 25, 1997 ARTICLE I --------- Fiscal Year ----------- The fiscal year of the Corporation shall be such period as the Board of Directors may designate by resolution from time to time. ARTICLE II ---------- Shareholders ------------ Section 1. Meetings of Shareholders. ------------------------ (a) ANNUAL MEETING. The annual meeting of the Shareholders of this Corporation, for the election of Directors, the consideration of financial statements for the most recently concluded fiscal year and other reports, and the transaction of such other business as may properly be brought before such meeting, shall be held at such date after the annual financial statements for the fiscal year of the Corporation have been prepared as the Board of Directors shall determine from time to time. Upon due notice there may also be considered and acted upon at an annual meeting any matter which could properly be considered and acted upon at a special meeting, in which case and for which purpose the annual meeting shall also be considered as, and shall be, a special meeting. In the event that the annual meeting is not held or if Directors are not elected thereat, a special meeting may be called and held for that purpose. (b) SPECIAL MEETING. Special meetings of the Shareholders may be held on any business day when called by any person or persons who may be authorized by law to do so. Calls for special meetings shall specify the purpose or purposes thereof, and no business shall be considered at any such meeting other than that specified in the call therefor. (c) PLACE OF MEETINGS. Any meeting of Shareholders may be held at such place within or without the State of Ohio as may be designated in the Notice of said meeting. 2 (d) NOTICE OF MEETING AND WAIVER OF NOTICE. (1) NOTICE. Written notice of the time, place and purposes of any meeting of Shareholders shall be given to each Shareholder entitled to vote on a matter to come before the meeting not less than seven (7) days nor more than sixty (60) days before the date fixed for the meeting and as prescribed by law. Such notice shall be given either by personal delivery or by mail. If such notice is mailed, it shall be directed, postage prepaid, to the Shareholders at their respective addresses as they appear upon the records of the Corporation, and notice shall be deemed to have been given on the day so mailed. If any meeting is adjourned to another time or place, no notice as to such adjourned meeting need be given other than by announcement at the meeting at which such an adjournment is taken. No business shall be transacted at any such adjourned meeting except as might have been lawfully transacted at the meeting at which such adjournment was taken. (2) NOTICE TO JOINT OWNERS. All notices with respect to any shares to which persons are entitled by joint or common ownership may be given to that one of such persons who is named first upon the books of this Corporation, and notice so given shall be sufficient notice to all the holders of such shares. (3) WAIVER. Notice of any meeting, however, may be waived in writing by any Shareholder either before or after any meeting of Shareholders, or by attendance at such meeting without protest prior to the commencement thereof. (e) RECORD DATE. If a record date shall not be fixed or the books of the Corporation shall not be closed against transfers of shares pursuant to statutory authority, the record date for the determination of Shareholders entitled to vote at any meeting of Shareholders shall be the date next preceding the day on which notice is given or the date next preceding the day on which the meeting is held, as the case may be, and only Shareholders of record as of the close of business on such record date shall be entitled to vote at such meeting. Such record date shall continue to be the record date for all adjournments of such meeting unless a new record date shall be fixed and notice thereof and of the date of the adjourned meeting be given to all Shareholders entitled to notice in accordance with the new record date so fixed. (f) QUORUM. At any meeting of Shareholders, the holders of shares entitling them to exercise a majority of the voting power of the Corporation, present in person or by proxy, shall constitute a quorum for such meeting; provided, however, that no action required by law, the Articles, or these Regulations to be authorized or taken by the holders of a designated proportion of the shares of the Corporation may be authorized or taken by a lesser proportion. The Shareholders present in person or by proxy, whether or not a quorum be present, may adjourn the meeting from time to time without notice other than by announcement at the meeting. 2 3 (g) ORGANIZATION OF MEETINGS (1) PRESIDING OFFICER. The Chairman of the Board, or, in his absence, the President, or in the absence of both of them, a Vice President of the Corporation shall call all meetings of the Shareholders to order and shall act as Chairman thereof. If all are absent, the Shareholders shall select a Chairman. (2) MINUTES. The Secretary of the Corporation, or, in his absence, an Assistant Secretary, or, in the absence of both, a person appointed by the Chairman of the meeting, shall act as Secretary of the meeting and shall keep and make a record of the proceedings thereat. (h) ORDER OF BUSINESS. The order of business at all meetings of the Shareholders, shall be as determined by the Chairman of the meeting. (i) VOTING. Except as provided by law or in the Articles, every Shareholder entitled to vote shall be entitled to cast one vote on each proposal submitted to the meeting for each share held of record by him on the record date for the determination of the Shareholders entitled to vote at the meeting. At any meeting at which a quorum is present, all questions and business which may come before the meeting shall be determined by a majority of votes cast, except when a greater proportion is required by law, the Articles, or these Regulations. (j) PROXIES. A person who is entitled to attend a Shareholders' meeting, to vote thereat, or to execute consents, waivers and releases, may be represented at such meeting or vote thereat, and execute consents, waivers, and releases, and exercise any of his rights, by proxy or proxies appointed by a writing signed by such person, or by his duly authorized attorney, as provided by the laws of the State of Ohio. (k) LIST OF SHAREHOLDERS. At any meeting of Shareholders a list of Shareholders, alphabetically arranged, showing the number and classes of shares held by each on the record date applicable to such meeting shall be produced on the request of any Shareholder. Section 2. ACTION OF SHAREHOLDERS WITHOUT A MEETING. Any action which may be taken at a meeting of Shareholders may be taken without a meeting if authorized by a writing or writings signed by all of the holders of shares who would be entitled to notice of a meeting for such purpose, which writing or writings shall be filed or entered upon the records of the Corporation. 3 4 ARTICLE III ----------- Directors --------- Section 1. GENERAL POWERS. The business, power and authority of this Corporation shall be exercised, conducted and controlled by a Board of Directors, except where the law, the Articles or these Regulations require action to be authorized or taken by the Shareholders. Section 2. ELECTION, NUMBER AND QUALIFICATION OF DIRECTORS. (a) ELECTION. The Directors shall be elected at the annual meeting of Shareholders, or if not so elected, at a special meeting of Shareholders called for that purpose. At any meeting of Shareholders at which Directors are to be elected, only persons nominated as candidates shall be eligible for election. (b) NUMBER. The number of Directors, which shall not be less than the lesser of three or the number of shareholders of record, may be fixed or changed at a meeting of the Shareholders called for the purpose of electing Directors at which a quorum is present, by the affirmative vote of the holders of a majority of the shares represented at the meeting and entitled to vote on such proposal. The number of Directors elected shall be deemed to be the number of Directors fixed unless otherwise fixed by resolution adopted at the meeting at which such Directors are elected. (c) QUALIFICATION. Directors need not be Shareholders of the Corporation. Section 3. TERM OF OFFICE OF DIRECTORS. (a) TERM. Each Director shall hold office until the next annual meeting of the Shareholders and until his successor has been elected or until his earlier resignation, removal from office, or death. Directors shall be subject to removal as provided by statute or by other lawful procedures and nothing herein shall be construed to prevent the removal of any or all Directors in accordance therewith. (b) RESIGNATION. A resignation from the Board of Directors shall be deemed to take effect immediately upon its being received by any incumbent corporate officer other than an officer who is also the resigning Director, unless some other time is specified therein. (c) VACANCY. In the event of any vacancy in the Board of Directors for any cause, the remaining Directors, though less than a majority of the whole Board, may fill any such vacancy for the unexpired term. 4 5 Section 4. MEETINGS OF DIRECTORS. (a) REGULAR MEETINGS. A regular meeting of the Board of Directors shall be held immediately following the adjournment of the annual meeting of the Shareholders or a special meeting of the Shareholders at which Directors are elected. The holding of such Shareholders' meeting shall constitute notice of such Directors' meeting and such meeting may be held without further notice. Other regular meetings shall be held at such other times and places as may be fixed by the Directors. (b) SPECIAL MEETINGS. Special meetings of the Board of Directors may be held at any time upon call of the Chairman of the Board, the President, any Vice President, or any two Directors. (c) PLACE OF MEETING. Any meeting of Directors may be held at any place within or without the State of Ohio in person and/or through any communications equipment if all persons participating in the meeting can hear each other. (d) NOTICE OF MEETING AND WAIVER OF NOTICE. Notice of the time and place of any regular or special meeting of the Board of Directors (other than the regular meeting of Directors following the adjournment of the annual meeting of the Shareholders or following any special meeting of the Shareholders at which Directors are elected) shall be given to each Director by personal delivery, telephone, mail, telegram or cablegram at least two (2) days before the meeting, which notice need not specify the purpose of the meeting. Such notice, however, may be waived in writing by any Director either before or after any such meeting, or by attendance at such meeting (including attendance (presence) by means of participation through any communications equipment as above provided) without protest prior to the commencement thereof. Section 5. QUORUM AND VOTING. At any meeting of Directors, no fewer than one-half of the whole authorized number of Directors must be present, in person and/or through any communications equipment, to constitute a quorum for such meeting, except that a majority of the remaining Directors in office constitutes a quorum for filling a vacancy in the Board. At any meeting at which a quorum is present, all acts, questions and business which may come before the meeting shall be determined by a majority of votes cast by the Directors present at such meeting, unless the vote of a greater number is required by the Articles, Regulations or bylaws. Section 6. COMMITTEES. (a) APPOINTMENT. The Board of Directors may from time to time appoint certain of its members (but in no event less than three (3)) to act as a committee or committees in the intervals between meetings of the Board and may delegate to such committee or committees powers to be exercised under the control and direction of the Board. Each such committee and each member thereof shall serve at the pleasure of the Board. 5 6 (b) EXECUTIVE COMMITTEE. In particular, the Board of Directors may create from its membership and define the powers and duties of an Executive Committee. During the intervals between meetings of the Board of Directors the Executive Committee shall possess and may exercise all of the powers of the Board of Directors in the management and control of the business of the Corporation to the extent permitted by law. All action taken by the Executive Committee shall be reported to the Board of Directors at its first meeting thereafter. (c) COMMITTEE ACTION. Unless otherwise provided by the Board of Directors, a majority of the members of any committee appointed by the Board of Directors pursuant to this Section shall constitute a quorum at any meeting thereof and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of such committee. Action may be taken by any such committee without a meeting by a writing signed by all its members. Any such committee shall prescribe its own rules for calling and holding meetings and its method of procedure, subject to any rules prescribed by the Board of Directors, and shall keep a written record of all action taken by it. Section 7. ACTION OF DIRECTORS WITHOUT A MEETING. Any action which may be taken at a meeting of Directors may be taken without a meeting if authorized by a writing or writings signed by all the Directors, which writing or writings shall be filed or entered upon the records of the Corporation. Section 8. COMPENSATION OF DIRECTORS. The Board of Directors may allow compensation for attendance at meetings or for any special services, may allow compensation to members of any committee, and may reimburse any Director for his expenses in connection with attending any Board or committee meeting. Section 9. ATTENDANCE AT MEETINGS OF PERSONS WHO ARE NOT DIRECTORS. Unless waived by a majority of Directors in attendance, not less than twenty-four (24) hours before any regular or special meeting of the Board of Directors any Director who desires the presence at such meeting of not more than one person who is not a Director shall so notify all other Directors, request the presence of such person at the meeting, and state the reason in writing. Such person will not be permitted to attend the Directors' meeting unless a majority of the Directors in attendance vote to admit such person to the meeting. Such vote shall constitute the first order of business for any such meeting of the Board of Directors. Such right to attend, whether granted by waiver or vote, may be revoked at any time during any such meeting by the vote of a majority of the Directors in attendance. 6 7 ARTICLE IV ---------- Officers -------- Section 1. GENERAL PROVISIONS. The Board of Directors shall elect a President, a Secretary and a Treasurer, and may elect a Chairman of the Board, one or more Vice-Presidents, and such other officers and assistant officers as the Board may from time to time deem necessary. The Chairman of the Board shall be a Director, but no one of the other officers need be a Director. Any two or more offices may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity if such instrument is required to be executed, acknowledged or verified by two or more officers. Section 2. POWERS AND DUTIES. All officers, as between themselves and the Corporation, shall respectively have such authority and perform such duties as are customarily incident to their respective offices, and as may be specified from time to time by the Board of Directors, regardless of whether such authority and duties are customarily incident to such office. In the absence of any officer of the Corporation, or for any other reason the Board of Directors may deem sufficient, the Board of Directors may delegate for the time being, the powers or duties of such officer, or any of them, to any other officer or to any Director. The Board of Directors may from time to time delegate to any officer authority to appoint and remove subordinate officers and to prescribe their authority and duties. Since the lawful purposes of this Corporation include the acquisition and ownership of real property, personal property and property in the nature of patents, copyrights, and trademarks and the protection of the Corporation's property rights in its patents, copyrights and trademarks, each of the officers of this Corporation is empowered to execute any power of attorney necessary to protect, secure, or vest the Corporation's interest in and to real property, personal property and its property protectable by patents, trademarks and copyright registration and to secure such patents, copyrights and trademark registrations. Section 3. TERM OF OFFICE AND REMOVAL. (a) TERM. Each officer of the Corporation shall hold office at the pleasure of the Board of Directors until his successor has been elected or until his earlier resignation, removal from office or death. It shall not be necessary for the officers of the corporation to be elected annually. The election or appointment of an officer for a given term, or a general provision in the Articles, the Regulations or the bylaws with respect to term of office, shall not be deemed to create contract rights. (b) REMOVAL. Any officer may be removed, with or without cause, by the Board of Directors without prejudice to the contract rights, if any, of such officer. 7 8 (c) VACANCIES. The Board of Directors may fill any such vacancy in any office occurring for whatever reason. Section 4. COMPENSATION OF OFFICERS. Unless compensation is otherwise determined by a majority of the Directors at a regular or special meeting of the Board of Directors, or unless such determination is delegated by the Board of Directors to another officer or officers, the President of the Corporation from time to time shall determine the compensation to be paid to all officers and other employees for services rendered to the Corporation. ARTICLE V --------- Indemnification of Directors and Officers ----------------------------------------- (a) RIGHT OF INDEMNIFICATION. The Corporation shall indemnify any Director or officer to the fullest extent provided by, or permissible under, Section 1701.13(E), Ohio Revised Code; and the Corporation is hereby specifically authorized to take any and all further action to effectuate any indemnification of any Director or officer which any Ohio corporation may have power to take, by any vote of the Shareholders, vote of disinterested Directors, any Agreement, or otherwise. This Section of the Code of Regulations of the Corporation shall be interpreted in all respects to expand such power to indemnify to the maximum extent permissible to any Ohio corporation with regard to the particular facts of each case, and not in any way to limit any statutory or other power to indemnify, or right of any individual to indemnification. (b) INSURANCE FOR INDEMNIFICATION. The Corporation may purchase and maintain insurance for protection of the Corporation and for protection of any Director, officer, employee and/or any other person for whose protection, and to the fullest extent, such insurance may be purchased and maintained under Section 1701.13(E)(7), Ohio Revised Code, or otherwise. Such policy or policies of insurance may provide such coverage and be upon such terms and conditions as shall be authorized or approved from time to time by the Board of Directors or the Shareholders of the Corporation. ARTICLE VI ---------- Securities Held by the Corporation ---------------------------------- Section 1. TRANSFER OF SECURITIES OWNED BY THE CORPORATION. All endorsements, assignments, transfers, stock powers, share powers or other instruments of transfer of securities standing in the name of the Corporation shall be executed for and in the name of the Corporation by the President, by a Vice President, by the Secretary or by the 8 9 Treasurer or by any other person or persons as may be thereunto authorized by the Board of Directors. Section 2. VOTING SECURITIES HELD BY THE CORPORATION. The Chairman of the Board, President, any Vice President, Secretary or Treasurer, in person or by another person thereunto authorized by the Board of Directors, in person or by proxy or proxies appointed by him, shall have full power and authority on behalf of the Corporation to vote, act and consent with respect to any securities issued by other corporations which the Corporation may own. ARTICLE VII ----------- Share Certificates ------------------ Section 1. TRANSFER AND REGISTRATION OF CERTIFICATES. The Board of Directors shall have authority to make such rules and regulations, not inconsistent with law, the Articles or these Regulations, as it deems expedient concerning the issuance, transfer and registration of certificates for shares and the shares represented thereby and may appoint transfer agents and registrars thereof. Section 2. SUBSTITUTED CERTIFICATES. Any person claiming that a certificate for shares has been lost, stolen or destroyed, shall make an affidavit or affirmation of that fact and, if required, shall give the Corporation (and its registrar or registrars and its transfer agent or agents, if any) a bond of indemnity, in such form and with one or more sureties satisfactory to the Board, and, if required by the Board of Directors, shall advertise the same in such manner as the Board of Directors may require, whereupon a new certificate may be executed and delivered of the same tenor and for the same number of shares as the one alleged to have been lost, stolen or destroyed. ARTICLE VIII ------------ Seal ---- The Directors may adopt a seal for the Corporation which shall be in such form and of such style as is determined by the Directors. Failure to affix any such corporate seal shall not affect the validity of any instrument. 9 10 ARTICLE IX ---------- Consistency with Articles of Incorporation ------------------------------------------ If any provision of these Regulations shall be inconsistent with the Corporation's Articles of Incorporation (and as they may be amended from time to time), the Articles of Incorporation (as so amended at the time) shall govern. ARTICLE X --------- Section Headings ---------------- The headings contained in this Code of Regulations are for reference purposes only and shall not be construed to be part of and shall not affect in any way the meaning or interpretation of this Code of Regulations. ARTICLE XI ---------- Amendments ---------- This Code of Regulations of the Corporation (and as it may be amended from time to time) may be amended or added to by the affirmative vote or the written consent of the Shareholders of record entitled to exercise a majority of the voting power on such proposal; provided, however, that if an amendment or addition is adopted by written consent without a meeting of the Shareholders, it shall be the duty of the Secretary to enter the amendment or addition in the records of the Corporation, and to mail a copy of such amendment or addition to each Shareholder of record who would be entitled to vote thereon and did not participate in the adoption thereof 10 EX-4.4 4 EXHIBIT 4.4 1 Exhibit 4.4 SIGNATURE BRANDS, INC. 13% SENIOR SUBORDINATED NOTES DUE 2002 ----------------------------------------- FIRST SUPPLEMENTAL INDENTURE Dated as of April 30, 1997 ----------------------------------------- FIRSTAR BANK OF MINNESOTA Trustee (successor in interest to American Bank National Association) (First supplement to the Indenture dated as of August 17, 1994 and related Notes) 2 This First Supplemental Indenture (the "Supplemental Indenture") dated as of the 30th day of April, 1997, is between Signature Brands, Inc., an Ohio corporation ("Signature"), and Firstar Bank of Minnesota as Trustee (successor in interest to American Bank National Association). W I T N E S S E T H: WHEREAS, Health o meter, Inc., a Delaware corporation (the "Company"), has executed and delivered to the Trustee that certain Indenture dated as of August 17, 1994 among the Company, Health o meter Products, Inc., a Delaware corporation (the "Parent"), Java Acquisition Corporation, a Delaware corporation, and American Bank National Association (the "Indenture"). WHEREAS, Signature and the Company desire to enter into a merger wherein Signature will be the surviving corporation (the "Merger"); WHEREAS, Article Five of the Indenture permits the merger of the Company with or into another entity provided that certain conditions are satisfied; WHEREAS, Section 5.01 of the Indenture provides, among other things, that if the Company enters into a merger in which the Company is not the surviving corporation, the corporation surviving the merger shall assume all obligations of the Company pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee; and WHEREAS, Section 9.01(c) of the Indenture provides that the Indenture may be supplemented without the consent of any Holder of a Note to provide for the assumption of the Company's obligations to the Holders of the Notes. NOW, THEREFORE, Signature, the Parent and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the holders of the 13% Senior Subordinated Notes due 2002 (the "Notes") issued pursuant to the Indenture (the "Holders"). Section 1. Assumption of the Company's obligations. --------------------------------------- Signature agrees to assume all of the obligations of the Company to the Holders of the Notes and to the Trustee under the Indenture and the Notes immediately upon the effectiveness of the Merger (the "Effective Time"). Section 2. Substitution of Signature for the Company under the Indenture. ------------------------------------------------------------- After the Effective Time, the provisions of the Indenture referring to the Company shall refer instead to Signature, and Signature may exercise every right and power of the Company under the Indenture with the same effect as if Signature had been named as the Company in the Indenture. 3 Section 3. Notices. ------- Any notice or communication made under the Indenture to Signature or the Parent after the Effective Time shall be delivered to the address set forth below: Signature Brands, Inc. 24700 Miles Road Bedford Heights, OH 44146-1399 Attention: Chief Financial Officer with a copy to: Calfee, Halter & Griswold LLP 1400 McDonald Investment Center 800 Superior Avenue Cleveland, OH 44114 Attention: Thomas F. McKee Section 4. Miscellaneous. ------------- 4.1 GOVERNING LAW. This Supplemental Indenture is to be governed by and construed under the internal laws of the State of New York. 4.2 SUCCESSORS. All agreements of Signature and the Trustee in this Supplemental Indenture shall bind their respective successors. 4.3 COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 4.4 EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof. 2 4 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written. SIGNATURE BRANDS, INC. By: /s/ Steven M. Billick --------------------------- Name: Steven M. Billick Title: Senior Vice President and Chief Financial Officer FIRSTAR BANK OF MINNESOTA as Trustee By: /s/ Frank P. Leslie --------------------------- Name: Frank P. Leslie Title: Vice President Acknowledgment: HEALTH O METER, INC. By: /s/ Peter C. McC. Howell ---------------------------------- Name: Peter C. McC. Howell Title: Chairman of the Board and Chief Executive Officer 3 EX-27.1 5 EXHIBIT 27.1
5 0000883327 SIGNATURE BRANDS USA, INC. 1,000 9-MOS SEP-28-1997 SEP-30-1996 JUN-29-1997 1,270 0 45,843 0 38,262 91,573 17,101 0 250,985 45,536 149,156 91 0 0 49,215 250,985 213,255 213,255 147,565 198,815 (349) 0 14,041 748 449 299 0 0 0 299 .03 .03
EX-27.2 6 EXHIBIT 27.2
5 0000925252 SIGNATURE BRANDS, INC. 1,000 9-MOS SEP-28-1997 SEP-30-1996 JUN-29-1997 1,270 0 45,843 0 38,262 91,573 17,101 0 250,985 45,536 149,156 0 0 0 1,648 250,985 213,255 213,255 147,565 198,815 (349) 0 14,041 748 449 299 0 0 0 299 0 0
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