-----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, OB4LhqFRz5Fcwo42nBJ64Uebgs9F+E6ml1h5Vc7h4rkoV7nbMIeDI9FqCf/B4tzk 6bGT4bP6lldrkthMgjTg8Q== 0000919463-97-000013.txt : 19971117 0000919463-97-000013.hdr.sgml : 19971117 ACCESSION NUMBER: 0000919463-97-000013 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970829 ITEM INFORMATION: FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERRY PLASTICS CORP CENTRAL INDEX KEY: 0000919463 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 351813706 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 033-75706 FILM NUMBER: 97720559 BUSINESS ADDRESS: STREET 1: 101 OAKLEY ST CITY: EVANSVILLE STATE: IN ZIP: 47710 BUSINESS PHONE: 8124242904 MAIL ADDRESS: STREET 1: PO BOX 959 CITY: EVANSVILLE STATE: IN ZIP: 47706-0959 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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) AUGUST 29, 1997 Berry Plastics Corporation (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) Delaware 33-75706 35-1813706 (STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.) 101 Oakley Street Evansville, Indiana 47710 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) Registrant's telephone number, including area code (812) 424-2904 (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) AMENDMENT NO. 1 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Current Report on Form 8-K, Date of Report August 29, 1997, and filed September 15, 1997, as set forth in the pages attached hereto: ITEM 7 (A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED Audited Consolidated Financial Statements of Venture Packaging, Inc. for the years ended September 30, 1996 and 1995: Independent Auditors' Report of Deloitte & Touche LLP Consolidated Balance Sheets Consolidated Statements of Operations and Retained Earnings Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Unaudited Consolidated Financial Statements of Venture Packaging, Inc. as of August 29, 1997 and for the period from October 1, 1996 to August 29, 1997: Consolidated Balance Sheet Consolidated Statement of Operations and Retained Earnings Consolidated Statement of Cash Flows Note to Consolidated Financial Statements ITEM 7 (B) PRO FORMA FINANCIAL INFORMATION Pro Forma Unaudited Condensed Consolidated Financial Statements of BPC Holding Corporation: Pro Forma Unaudited Condensed Consolidated Balance Sheet as of June 28, 1997 Notes to Pro Forma Unaudited Condensed Consolidated Balance Sheet as of June 28, 1997 Pro Forma Unaudited Condensed Consolidated Statement of Operations for the year ended December 28, 1996 Notes to Pro Forma Unaudited Condensed Consolidated Statement of Operations for the year ended December 28, 1996 Pro Forma Unaudited Condensed Consolidated Statement of Operations for the six months ended June 28, 1997 Notes to Pro Forma Unaudited Condensed Consolidated Statement of Operations for the six months ended June 28, 1997 Unaudited Pro Forma Financial Information of Berry Plastics Corporation SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. BERRY PLASTICS CORPORATION By: /S/ JAMES M. KRATOCHVIL James M. Kratochvil Vice President, Chief Financial Officer, Treasurer and Secretary Dated: November 14, 1997 VENTURE PACKAGING, INC. Consolidated Financial Statements for the Years Ended SEPTEMBER 30, 1996 AND 1995 AND INDEPENDENT AUDITORS' REPORT INDEPENDENT AUDITORS' REPORT To the Shareholders and Board of Directors Venture Packaging, Inc. Monroeville, Ohio We have audited the accompanying consolidated balance sheets of Venture Packaging, Inc. as of September 30, 1996 and 1995, and the related consolidated statements of operations and retained earnings, and of cash flows for the years then ended. 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 in accordance with generally accepted auditing standards. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 1996 and 1995, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. /S/ DELOITTE & TOUCHE LLP Cleveland, Ohio November 18, 1996 VENTURE PACKAGING, INC. CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 1996 AND 1995 - ----------------------------
ASSETS 1996 1995 ------------- ------------- CURRENT ASSETS: Cash $ 567,404 $ 184,317 Receivables - net 4,654,981 5,468,229 Inventories 8,693,353 6,613,464 Deferred income taxes 147,777 159,208 Other current assets 316,377 619,595 ------------- ------------- Total current assets 14,379,892 13,044,813 ------------- ------------- PROPERTY: Land and improvements 2,106,242 2,043,868 Buildings and improvements 5,301,226 5,273,751 Machinery and equipment 39,115,191 36,477,193 Office furniture and fixtures 1,391,506 1,183,548 Vehicles 325,202 331,461 ------------- ------------- Total 48,239,367 45,309,821 Less accumulated depreciation (27,990,408) (24,852,783) ------------- ------------- Property - net 20,248,959 20,457,038 ------------- ------------- RESTRICTED INVESTMENTS 1,244,996 2,223,603 DEPOSTIS AND OTHER ASSETS 505,042 619,720 ------------- ------------- TOTAL $36,378,889 $36,345,174 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term debt $8,955,400 $6,801,552 Current portion of long-term debt 892,148 892,148 Trade accounts payable 2,902,476 3,064,472 Accrued liabilities 868,103 1,189,192 ------------- ------------- Total current liabilities 13,618,127 11,947,364 LONG-TERM DEBT, LESS CURRENT PORTION 10,384,278 11,332,852 DEFERRED INCOME TAXES 2,126,654 1,843,734 DEFERRED REVENUE 822,468 875,000 ------------- ------------- Total liabilities 26,951,527 25,998,950 SHAREHOLDERS' EQUITY: Capital stock, stated value $100 per share: authorized - 1,000 shares; issued and outstanding - 227.715 and 227.965 shares,respectively 22,772 22,797 Additional paid-in capital 10,521 10,616 Retained earnings 9,394,069 10,312,811 ------------- ------------- Total shareholders' equity 9,427,362 10,346,224 ------------- ------------- TOTAL $36,378,889 $36,345,174 ============= =============
See notes to consolidated financial statements. VENTURE PACKAGING, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS YEARS ENDED SEPTEMBER 30, 1996 AND 1995 - ------------------------------------------------------------
1996 1995 ------------- ------------- REVENUES: Net sales $42,262,349 $41,800,788 Other 944,579 861,155 ------------- ------------- Total revenues 43,206,928 42,661,943 COST AND EXPENSES: Cost of sales 37,747,768 36,108,439 Selling, general and administrative 5,509,215 4,931,505 Interest 1,244,576 849,945 ------------- ------------- Total cost and expenses 44,501,559 41,889,889 ------------- ------------- INCOME (LOSS) BEFORE INCOME TAXES (1,294,631) 772,054 ------------- ------------- PROVISION (BENEFIT) FOR INCOME TAXES: Federal (447,619) 210,398 State and local 31,600 83,616 ------------- ------------- Total provision (benefit) for income taxes (416,019) 294,014 NET INCOME (LOSS) (878,612) 478,040 CASH DIVIDENDS (22,797) (22,846) CAPITAL STOCK PURCHASED AND RETIRED (17,333) (33,169) RETAINED EARNINGS, BEGINNING OF YEAR 10,312,811 9,890,786 ------------- ------------- RETAINED EARNINGS, END OF YEAR $ 9,394,069 $10,312,811 ============= ============= NET INCOME (LOSS) PER SHARE $ (3,857) $ 2,096 ============= =============
See notes to consolidated financial statements. VENTURE PACKAGING, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED SEPTEMBER 30, 1996 AND 1995 - ----------------------------------------
1996 1995 ------------- ------------- OPERATING ACTIVITIES: Net income (loss) $ (878,612) $ 478,040 Adjustments to reconcile net income (loss) to net cash provided from operating activities: Depreciation 3,168,730 2,545,363 Deferred income taxers 294,351 392,933 Loss on sale of machinery and equipment 31,541 Change in operating assets and liabilities: Receivables 813,248 (1,515,871) Inventories (2,079,889) (1,522,459) Other assets 311,590 (604,354) Trade accounts payable (161,996) 1,327,190 Accrued liablities (321,089) 148,627 Deferred revenue (52,532) 875,000 ------------- ------------- Total cash provided by operating activities 1,125,342 2,124,469 ------------- ------------- INVESTING ACTIVITIES: Capital expenditures (2,949,366) (11,394,621) Net proceeds from (purchases of) restricted investments 978,607 (2,223,603) Proceeds from sale of machinery and equipment 42,953 Other - net 20,526 (20,761) ------------- ------------- Total cash used in investing activities (1,907,280) (13,638,985) ------------- ------------- FINANCING ACTIVITIES: Net borrowings under line of credit agreement 2,153,848 3,954,585 Proceeds from long-term debt 8,325,000 Payments on long-term debt (948,574) (601,333) Dividends paid (22,797) (22,846) Purchase of capital stock (17,452) (33,409) ------------- ------------- Total cash provided by financing activities 1,165,025 11,621,997 ------------- ------------- NET INCREASE IN CASH 383,087 107,481 CASH, BEGINNING OF YEAR 184,317 76,836 ------------- ------------- CASH, END OF YEAR $ 567,404 $ 184,317 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ 989,996 $ 741,183 ------------- ------------- Income taxes $ 155,038 $ 192,889 ------------- ------------- NONCASH INVESTING AND FINANCING ACTIVITIES: Short-term borrowings refinanced as long-term debt $3,900,000 -------------
See notes to consolidated financial statements. VENTURE PACKAGING, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30, 1996 AND 1995 1. BUSINESS DESCRIPTION Venture Packaging, Inc. (the "Company"), a Delaware corporation, is a manufacturer of molded plastic products, primarily food storage containers. The Company operates plants located in Monroeville, Ohio and Anderson, South Carolina, and a printing and distribution facility in Chesapeake, Virginia. The Company sells its products to customers nationwide, which operate primarily in food processing industries. To better align its corporate structure with its future growth plans, Venture Packaging, Inc., an Ohio corporation, reincorporated in the state of Delaware through an Agreement of Merger and Plan of Reorganization effective October 1, 1995. The objective of the reincorporation was to establish a Delaware holding company with two separate operating subsidiaries for the Midwest and Southeast divisions. To accomplish the corporate reorganization, Venture Packaging, Inc., an Ohio corporation, formed the following subsidiaries: Venture Packaging Southeast, Inc., a South Carolina corporation; Venture Packaging Midwest, Inc., an Ohio corporation; and Venture Packaging, Inc., a Delaware corporation. Effective October 1, 1995, substantially all of the Midwest division assets were assigned to Venture Packaging Midwest, Inc., and substantially all of the Southeast division assets were assigned to Venture Packaging Southeast, Inc. Subsequently, Venture Packaging, Inc., the Ohio corporation was merged with and into Venture Packaging, Inc., the Delaware corporation. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONSOLIDATION - The consolidated financial statements include the accounts of Venture Packaging, Inc. and its wholly-owned subsidiaries Venture Packaging Southeast, Inc. and Venture Packaging Midwest, Inc. All significant intercompany transactions and balances have been eliminated in consolidation. ESTIMATES - The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. INVENTORIES - Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. PROPERTY - Property is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Maintenance and repairs are charged to expense as incurred. RESTRICTED INVESTMENTS - Restricted investments represent proceeds from Industrial Development Bonds (see Note 5) invested in short-term repurchase agreements, the use of which is restricted to certain capital expenditures and related costs under the terms of the loan agreement. DEFERRED REVENUE - Deferred revenue relates to government grant revenues and is being amortized over ten years. NET INCOME PER SHARE - Net income per share has been computed by dividing net income by the weighted average number of shares of capital stock outstanding during the period. 3. RECEIVABLES Receivables consist of the following:
1996 1995 ------------- ------------- Customer accounts $3,626,580 $4,174,511 Affiliate 161,037 78,915 Refundable income taxes 985,364 415,803 Government grants 975,000 Allowances (118,000) (176,000) ------------- ------------- Total $4,654,981 $5,468,229 ============= =============
Sales to the affiliated company totaled approximately $918,000 in fiscal 1996 and $877,000 in fiscal 1995. 4. INVENTORIES Inventories consist of the following:
1996 1995 ------------- ------------- Raw Materials $2,841,583 $2,327,719 Finished product 5,545,807 4,072,232 Shipping supplies 305,963 213,513 ------------- ------------- Total $8,693,353 $6,613,464 ============= =============
5. DEBT Short-term debt of $8,955,400 and $6,801,552 at September 30, 1996 and 1995, respectively, consists of amounts outstanding under a $10,000,000 line of credit agreement which currently matures December 31, 1996. Interest is payable monthly at a rate which approximates the bank's prime lending rate. Long-term debt consists of:
1996 1995 ------------- ------------- Industrial Development Bonds $7,655,000 $8,325,000 Bank term loans 3,621,426 3,900,000 ------------- ------------- Total long-term debt 11,276,426 12,225,000 Less current maturities 892,148 892,148 ------------- ------------- Non-current portion $10,384,278 $11,332,852 ============= =============
The Industrial Development Bonds are to be repaid in semi-annual installments through April 1, 2010 with a final balloon payment of $945,000. Interest is payable quarterly. The bonds have a variable interest rate, which averaged 3.78% and 4.13% during fiscal 1996 and 1995, respectively. The interest rate can not exceed 10%. The Company can make an irrevocable election to convert the interest rate to a fixed rate. The bondholders may redeem the bonds at their option while the bonds bear interest at a variable rate; however, the bonds are classified as non- current due to a remarketing agreement and credit facilities, which permit the Company to extend the payment for several years. The Company also has the option to call the bonds. The bank term loans are to be repaid in equal monthly installments of principal plus interest. Interest is payable monthly at the bank's prime lending rate. The total aggregate principal payments applicable to all long-term debt at September 30, 1996 is due as follows:
1997 $ 892,148 1998 1,227,148 1999 1,227,148 2000 1,227,148 2001 1,227,148 Thereafter 5,475,686 ------------- Total $11,276,426 =============
The credit agreements require, among other things, the maintenance of minimum tangible net worth, a maximum debt to tangible net worth ratio, a minimum debt service coverage ratio, and a fixed charge coverage ratio. The agreements also limit other secured borrowings and the annual amount of capital expenditures and dividends. The credit agreements are secured by accounts receivable, inventories, and certain equipment, land and buildings. 6. INCOME TAXES The provision (benefit) for income taxes consist of the following:
1996 1995 ------------ ---------- Current provision (benefit) $(710,370) $(98,919) Deferred provision 294,351 392,933 ------------ ---------- Total $(416,019) $294,014 ============ ==========
A reconciliation between the federal statutory income tax rate and the Company's effective tax rate is as follows:
1996 1995 ------------ ---------- Statutory tax rate (34.0)% 34.0% Effects of: State and local income taxes 1.6 7.1 Other 0.3 (3.0) ------------ ---------- Effective tax rate (32.1)% 38.1% ============ ==========
The components of the net deferred income tax liability consist of the following:
1996 1995 ------------- ------------- Tax depreciation in excess of book $(2,262,352) $(1,943,974) Reserves and accruals not currently deductible 82,451 128,297 Net operating loss and credit carryforwards 537,156 95,237 Other - net 13,868 35,914 Valuation allowance (350,000) ------------- ------------- Net deferred tax liability $(1,978,877) $(1,684,526) ------------- -------------
7. LEASES The Company leases certain equipment and warehouse facilities under operating leases. Certain of the operating leases contain renewal options at the end of the initial lease term. Future minimum rental payments under leases with initial or remaining noncancellable lease terms in excess of one year consisted of the following at September 30, 1996:
FISCAL YEAR ENDING SEPTEMBER 30, AMOUNT 1997 $ 716,680 1998 714,920 1999 704,139 2000 587,594 2001 556,208 Thereafter 554,357 ------------- Total $3,833,898 =============
Total rent expense under operating leases was approximately $926,000 in fiscal 1996 and $533,000 in fiscal 1995. 8. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying value of cash, receivables, restricted investments, deposits, accounts payable, accrued expenses, short term debt and long term debt are reasonable estimates of their fair value. The fair value of the industrial development bonds was measured using a tax free interest rate. VENTURE PACKAGING, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED) AUGUST 29, 1997
ASSETS Current assets: Cash $ 656,944 Receivables, net 4,986,292 Inventories 9,116,879 Deferred income taxes 336,799 Other current assets 243,677 ------------- Total current assets 15,340,591 Property and equipment: Land and improvements 2,116,443 Buildings and improvements 5,420,296 Machinery and equipment 41,559,038 Office furniture and fixtures 1,456,660 Vehicles 325,887 ------------- 50,878,324 Less accumulated depreciation (31,190,092) ------------- Property, net 19,688,232 Restricted investments 805,950 Deposits and other assets 1,248,225 ------------- $37,082,998 =============
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $ 7,969,925 Current portion of long-term debt 1,640,302 Trade accounts payable 3,412,919 Accrued liabilities 1,103,949 ------------- Total current liabilities 14,127,095 Long-term debt, less current portion 11,423,059 Deferred income taxes 2,023,151 Deferred revenue 722,004 ------------- Total liabilities 28,295,309 Stockholders' equity: Capital stock, $100 stated value per share: Authorized: 1,000 shares Outstanding: 227.47 shares 22,747 Additional paid-in capital 10,426 Retained earnings 8,754,516 ------------- Total stockholders' equity 8,787,689 ------------- $ 37,082,998 =============
SEE ACCOMPANYING NOTE. VENTURE PACKAGING, INC. CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS (UNAUDITED) FOR THE PERIOD FROM OCTOBER 1, 1996 TO AUGUST 29, 1997
Revenue: Net sales $ 43,175,443 Other 859,032 ------------- Total revenues 44,034,475 Costs and expenses: Cost of sales 38,258,849 Selling, general and administrative 5,468,503 Interest 1,223,401 ------------- Total cost and expenses 44,950,753 Loss before income tax benefit (916,278) Income tax benefit (292,524) ------------- Net loss (623,754) Capital stock purchased and retired (15,799) Retained earnings, beginning of period 9,394,069 ------------- Retained earnings, end of period $ 8,754,516 =============
SEE ACCOMPANYING NOTE. VENTURE PACKAGING, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) FOR THE PERIOD FROM OCTOBER 1, 1996 TO AUGUST 29, 1997
OPERATING ACTIVITIES Net loss $ (623,754) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 3,247,875 Loss on sale of machinery and equipment 4,720 Deferred income taxes (292,525) Changes in operating assets and liabilities: Accounts receivable (331,311) Inventories (423,526) Other assets (670,483) Trade accounts payable 510,443 Accrued liabilities 235,846 Deferred revenue (100,464) ------------- Net cash provided by operating activities 1,556,821 INVESTING ACTIVITIES Capital expenditures (2,713,854) Net proceeds from restricted investments 439,046 Proceeds from sale of machinery and equipment 21,986 ------------- Net cash used by investing activities (2,252,822) FINANCING ACTIVITIES Net payments under line of credit agreement (985,475) Proceeds from long-term debt 2,702,000 Payments on long-term debt (915,065) Purchase of capital stock (15,919) ------------- Net cash provided by financing activities 785,541 ------------- Net increase in cash 89,540 Cash at beginning of period 567,404 ------------- Cash at end of period $ 656,944 =============
SEE ACCOMPANYING NOTE. VENTURE PACKAGING, INC. NOTE TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) AS OF AUGUST 29, 1997 AND FOR THE PERIOD FROM OCTOBER 1, 1996 TO AUGUST 29, 1997 The unaudited consolidated financial statements of Venture Packaging, Inc. as of August 29, 1997 and for the period from October 1, 1996 to August 29, 1997 have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the period presented are not necessarily indicative of the results that may be expected for the full fiscal year. These statements should be read in conjunction with the audited consolidated financial statements of Venture Packaging, Inc. for the years ended September 30, 1996 and 1995 included in this Form 8-K/A. Comparative consolidated financial statements as of August 29, 1996 and for the period from October 1, 1995 to August 29, 1996 have not been presented as these statements were not available. Venture Packaging, Inc. was purchased by Berry Plastics Corporation in a transaction which was consummated on August 29, 1997. BPC HOLDING CORPORATION PRO FORMA UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) The following unaudited pro forma condensed consolidated balance sheet and pro forma condensed consolidated statements of operations (collectively, the "Pro Forma Statements") give effect to the purchase of the outstanding common stock of Venture Packaging, Inc. ("Venture Packaging") and PackerWare Corporation ("PackerWare") by Berry Plastics Corporation ("Berry"). Berry is a wholly owned subsidiary of BPC Holding Corporation ("Holding"). The pro forma information is based on the historical consolidated financial statements of Holding, the historical financial statements of Venture Packaging and the historical financial statements of PackerWare, giving effect to the acquisitions using the purchase method of accounting and the assumptions and adjustments in the accompanying notes to the pro forma condensed consolidated financial statements. The pro forma condensed balance sheet gives effect to the acquisitions as if they had occurred on June 28, 1997 and the condensed statements of operations give effect to the acquisitions as if they had occurred on December 31, 1995. There are no pro forma condensed balance sheet adjustments as of June 28, 1997 for the acquisition of PackerWare as these adjustments are reflected in Holding's historical balances as of June 28, 1997. There are no pro forma condensed consolidated statement of operations adjustments for the six months ended June 28, 1997 for the acquisition of PackerWare as the operations of PackerWare are included in Holding's historical balances from January 22, 1997 through June 28, 1997. PackerWare's operations from December 29, 1996 through January 21, 1997 (the date of the PackerWare acquisition)have been determined to be immaterial by management. The Pro Forma Statements do not purport to represent what Holding's consolidated financial position or results of operations would actually have been if such transactions had in fact occurred on such dates or to project Holding's consolidated financial position or results of operations for any future date or period. The pro forma adjustments are based upon available information and upon assumptions that management believes to be reasonable. The Pro Forma Statements and accompanying notes should be read in conjunction with the historical consolidated financial statements and related notes of Holding included within its Annual Report on Form 10-K for the year ended December 28, 1996, with the unaudited historical consolidated financial statements and related notes of Holding included within its periodic reports on Form 10Q for the year ending December 27, 1997, with the audited consolidated financial statements and related notes of Venture Packaging for the years ended September 30, 1996 and 1995 and the unaudited consolidated financial statements as of August 29, 1997 and for the period from October 1, 1996 to August 29, 1997 included in this Form 8-K/A, and with Form 8-K/A filed on April 7, 1997 which provides similar information related to the acquisition of PackerWare. BPC HOLDING CORPORATION PRO FORMA UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (DOLLARS IN THOUSANDS)
JUNE 28, 1997 -------------------------------------------------------------------------------- VENTURE HOLDING PACKAGING PRO FORMA CONSOLIDATED HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA ---------------- --------------- --------------- ------------- ASSETS (UNAUDITED) (UNAUDITED) Current assets Cash and cash equivalents $ 1,501 $ 657 $ - $ 2,158 Accounts receivable 30,870 4,986 (92) (a) 35,764 Inventories 21,482 9,117 (848) (a) 29,751 Other current assets 1,554 581 - 2,135 ----------- ---------- --------- ----------- Total current assets 55,407 15,341 (940) 69,808 Assets held in trust 24,729 - - 24,729 Property and equipment, net 81,852 19,688 6,280 (b) 107,820 Intangible assets, net 24,285 - 19,321 (b) 45,606 2,000 (c) Restricted investments - 806 - 806 Other assets 2,100 1,248 (403) (a) 3,546 601 (a) Total assets $188,373 $37,083 $26,859 $252,315 =========== ========== ========= =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $16,229 $ 3,413 $ - $ 19,642 Accrued expenses 14,159 1,039 238 (a) 17,836 2,000 (c) 400 (c) Accrued interest 3,336 65 (43) (d) 3,358 Short-term debt - 7,970 (7,970) (d) - Current portion of long-term debt 5,120 1,640 (970) (d) 6,978 1,188 (e) ----------- ---------- --------- ----------- Total current liabilities 38,844 14,127 (5,157) 47,814 Long-term debt: Holding 12.50% Senior Secured Notes 105,000 - - 105,000 Berry 12.25% Senior Subordinated Notes 100,000 - - 100,000 Term loans 26,859 4,773 27,112 (e) 53,971 (4,773) (d) Industrial Revenue Bonds 9,900 6,650 - 16,550 Revolving line of credit 8,827 - 10,975 (e) 19,802 Capital lease obligation 420 - - 420 Debt discount (595) - - (595) ----------- ---------- --------- ----------- Total long-term debt 250,411 11,423 33,314 295,148 Other liabilities 2,163 2,745 2,490 (b) 7,398 ----------- ---------- --------- ----------- Total liabilities 291,418 28,295 30,647 350,360 Stockholders' equity (deficit): Common stock and additional paid-in capital 50,639 33 (33) (f) 50,639 Preferred stock 11,362 - 5,000 (g) 16,362 Treasury stock (22) - - (22) Warrants 3,511 - - 3,511 Retained earnings (deficit) (168,535) 8,755 (8,755) (f) (168,535) ----------- ---------- --------- ----------- Total stockholders' equity (deficit) (103,045) 8,788 (3,788) (98,045) ----------- ---------- --------- ----------- Total liabilities and stockholders' equity (deficit) $188,373 $37,083 $26,859 $252,315 =========== ========== ========== ===========
SEE ACCOMPANYING NOTES. BPC HOLDING CORPORATION NOTES TO PRO FORMA UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (DOLLARS IN THOUSANDS)
The historical balance sheet presented for Holding is as of June 28, 1997, and the historical balance sheet presented for Venture Packaging is as of August 29, 1997 (the acquisition date). The following adjustments reflect the acquisition of the common stock of Venture Packaging and the repayment of the outstanding debt of Venture Packaging on a pro forma basis using proceeds from Berry's revolving credit facility. The pro forma allocations to the assets acquired and liabilities assumed have been made using estimates by management and may be adjusted to reflect fair values subsequently established as a result of appraisals by a qualified appraiser. The amount allocated to cost in excess of assets acquired may be subsequently adjusted to reflect such appraisals, but any such adjustment is not expected to be material. The cost in excess of net assets acquired will be amortized by the straight-line method over a period of 15 years. (a) Adjustments of certain assets and liabilities purchased: Increase of allowance for doubtful accounts $ (92) Increase in inventory reserves (848) Write-off of deposits (403) Reserve for income tax audits (238) Deferred income taxes on adjustments to certain assets and liabilities purchased 601 ---------- $ (980) ========== (b) Adjustments for assumed fair values of assets and liabilities of Venture Packaging: Increase of property and equipment to estimated fair value $ 6,280 Allocation of excess of purchase price over net assets acquired to intangible assets 19,321 Deferred income taxes on the step-up to estimated fair value of property and equipment (2,490) ---------- $ 23,111 ========== (c) Other assets and liabilities resulting from purchase: Intangible asset for not-to-compete agreement $ 2,000 Accrued liability for not-to-compete agreement (2,000) Accrued transaction costs (400) ---------- $ (400) ========== (d) Repayment of Venture Packaging debt: Short-term debt $7,970 Current portion of long-term debt 970 Term loans 4,773 Accrued interest 43 ---------- $ 13,756 ========== (e) Borrowings for payment of purchase price and transaction costs: Proceeds from term loans, net of current portion $(27,112) Proceeds from revolving line of credit (10,975) Current portion of term loan borrowing (1,188) ---------- $(39,275) ==========
(f) Elimination of Venture Packaging's stockholders' equity: Common stock and additional paid-in capital $ 33 Retained earnings 8,755 ---------- $ 8,788 ========== (g) Issuance of equity for purchase price: Preferred stock $(5,000) ==========
BPC HOLDING CORPORATION PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (DOLLARS IN THOUSANDS)
FISCAL 1996 ---------------------------------------------------------------------------------------- VENTURE HOLDING PACKAGING PACKERWARE PRO FORMA CONSOLIDATED HISTORICAL HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA -------------- -------------- -------------- --------------- -------------- Net sales $ 151,058 $ 44,416 $ 42,818 $ (1,007) (e) $ 237,285 Cost of goods sold 110,110 38,691 36,521 (1,637) (a) 181,548 (1,564) (f) (573) (h) -------------- -------------- -------------- --------------- -------------- Gross margin 40,948 5,725 6,297 2,767 55,737 Operating expenses 23,679 5,619 4,773 1,760 (b) (166) (g) 196 (i) 35,861 -------------- -------------- -------------- --------------- -------------- Income from operations 17,269 106 1,524 977 19,876 Interest expense, net (20,075) (1,221) (1,469) (2,113) (c) (25,744) (866) (j) Other income (expense) (302) 61 426 - 185 -------------- -------------- -------------- --------------- -------------- Income (loss) before income taxes (3,108) (1,054) 481 (2,002) (5,683) Income tax expense (benefit) 239 (332) 243 332 (d) 239 (243) (k) -------------- -------------- -------------- --------------- -------------- Net income (loss) (3,347) (722) 238 (2,091) (5,922) Preferred stock dividends (1,116) - - - (1,116) -------------- -------------- -------------- --------------- -------------- Net income (loss)attributable to common shareholders $ (4,463) $ (722) $ 238 $ (2,091) $ (7,038) ============== ============== ============== =============== ==============
SEE ACCOMPANYING NOTES. BPC HOLDING CORPORATION NOTES TO PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (DOLLARS IN THOUSANDS) YEAR ENDED DECEMBER 28, 1996
The historical consolidated statement of operations presented for Holding is for its fiscal year ended December 28, 1996, the historical statement of operations presented for Venture Packaging is for the twelve months ended December 31, 1996, and the historical statement of operations presented for PackerWare (acquired January 21, 1997) is for its fiscal year ended October 31, 1996. VENTURE PACKAGING ADJUSTMENTS (a) Adjustments to cost of goods sold: Decrease in resin costs due to volume discounts available to Berry $(2,056) Increase in depreciation expense due to increase of property and equipment to estimated fair value 419 ---------- Net reduction in cost of goods sold $(1,637) ========== (b) Adjustments to operating expenses: Increase in amortization due to increase in cost in excess of net assets acquired $ 1,360 Increase in amortization due to increase in not-to-compete agreements 400 ---------- Net increase in operating expenses $ 1,760 ========== (c) Adjustments to interest expense: Elimination of interest expense on debt extinguished $ (989) Additional interest incurred on borrowing for Venture acquisition 3,102 ---------- Net change in interest expense $ 2,113 ========== (d) Adjustment to income tax expense: Elimination of Venture Packaging income tax benefit due to increase in Holding's net operating loss offset by a corresponding increase in the valuation allowance on deferred tax assets $ 332 ==========
PACKERWARE ADJUSTMENTS Adjustments of net sales, cost of goods sold and operating expenses due to the shut down of PackerWare's Nevada operations: (e) Adjustments to net sales: Elimination of total net sales of PackerWare's Nevada operations $ (4,707) Addition of net sales retained due to transfer to other PackerWare location or to existing Holding location 3,700 ---------- Net reduction in net sales $ (1,007) ========== (f) Adjustments to cost of goods sold: Elimination of total cost of goods sold of PackerWare's Nevada operations $ (4,672) Addition of cost of sales related to net sales retained 3,108 ---------- Net reduction in cost of goods sold $ (1,564) ========== (g) Adjustment to operating expense: Elimination of expenses incurred by PackerWare related to the sale of the company $ (166) ==========
Other adjustments to cost of goods sold, operating expenses, interest expense and income tax expense are comprised of the following: (h) Adjustments to cost of goods sold: Decrease in resin costs due to volume discounts available to Berry $ (1,000) Net increase in depreciation expense due to a change in the remaining useful lives of the related assets 427 ---------- Net reduction in cost of goods sold $ (573) ========== (i) Adjustments to operating expense: Elimination of former employee salaries $ (241) Increase in amortization of cost in excess of net assets acquired 437 ---------- Net increase in operating expenses $ 196 ========== (j) Adjustments to interest expense: Elimination of interest expense on debt extinguished $ (1,485) Additional interest incurred on borrowing for the PackerWare acquisition 2,351 ---------- Net change in interest expense $ 866 ========== (k) Adjustment to income tax expense: Elimination of PackerWare income tax expenses due to a decrease in Holding's net operating loss offset by a corresponding decrease in the valuation allowance on deferred tax assets $ (243) ==========
BPC HOLDING CORPORATION PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (DOLLARS IN THOUSANDS)
SIX MONTHS ENDED JUNE 28, 1997 ---------------------------------------------------------------------------------------- VENTURE HOLDING PACKAGING PRO FORMA CONSOLIDATED HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA ------------- ------------- ------------- -------------- Net sales $ 105,936 $ 23,871 $ - $ 129,807 Cost of goods sold 82,167 20,324 (1,030) (a) 101,461 ------------- ------------- ------------- -------------- Gross margin 23,769 3,547 1,030 28,346 Operating expenses 13,786 3,012 880 (b) 17,678 ------------- ------------- ------------- -------------- Income from operations 9,983 535 150 10,668 Interest expense, net (14,394) (672) (1,056) (c) (16,122) Other income (expense) (90) 24 - (66) ------------- ------------- ------------- -------------- Loss before income taxes (4,501) (113) (906) (5,520) Income tax expense (benefit) 92 (24) 24 (d) 92 ------------- ------------- ------------- -------------- Net loss (4,593) (89) (930) (5,612) Preferred stock dividends (1,048) - - (1,048) ------------- ------------- ------------- -------------- Net loss attributable to common shareholders $ (5,641) $ (89) $ (930) $ (6,660) ============= ============= ============= ==============
SEE ACCOMPANYING NOTES. BPC Holding Corporation Notes to Pro Forma Unaudited Condensed Consolidated Statement of Operations (Dollars in thousands) SIX MONTHS ENDED JUNE 28, 1997
The historical consolidated statement of operations presented for Holding is for its six months ended June 28, 1997 and the historical statement of operations presented for Venture Packaging is for the six months ended June 30, 1997. (a) Adjustments to cost of goods sold: Decrease in resin costs due to volume discounts available to Berry $(1,239) Increase in depreciation expense due to increase of property and equipment to estimated fair value 209 ---------- Net reduction in cost of goods sold $(1,030) ========== (b) Adjustments to operating expenses: Increase in amortization due to increase in cost in excess of net assets acquired $ 680 Increase in amortization due to increase in not-to-compete agreements 200 ---------- Net increase in operating expenses $ 880 ========== (c) Adjustments to interest expense: Elimination of interest expense on debt extinguished $ (495) Additional interest incurred on borrowing for Venture acquisition 1,551 ---------- Net change in interest expense $ 1,056 ========== (d) Adjustment to income tax expense: Elimination of income tax benefit due to increase in Holding's net operating loss offset by a corresponding increase in the valuation allowance on deferred tax assets $ 24 ==========
UNAUDITED PRO FORMA FINANCIAL INFORMATION OF BERRY PLASTICS CORPORATION (DOLLARS IN THOUSANDS) The following summarizes pro forma unaudited financial information of Holding's wholly owned subsidiary, Berry. The pro forma information is based on the historical consolidated financial statements of Berry, the historical financial statements of Venture Packaging, and the historical financial statements of PackerWare, giving effect to the acquisitions using the purchase method of accounting and the assumptions and adjustments in the accompanying notes to the pro forma condensed consolidated financial statements. The pro forma condensed balance sheet gives effect to the acquisitions as if they had occurred on June 28, 1997 and the pro forma statements of operations give effect to the acquisitions as if they had occurred on December 31, 1995.
CONSOLIDATED PRO FORMA BALANCE SHEET Current assets $ 69,430 Property and equipment, net of accumulated depreciation 107,820 Other noncurrent assets 46,203 Current liabilities 49,859 Noncurrent liabilities 195,383 CONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 28, 1996: Net sales $ 237,285 Cost of goods sold 181,548 Income before income taxes 3,915 Net income 3,414 Six months ended June 28, 1997: Net sales $ 129,807 Cost of goods sold 101,461 Income before income taxes 394 Net income 297
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