-----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, QueQU+5O80F1hjrsJB33xzbI0M+aklXtPIakXj8eABk5L7eqnKHBdn7o2cqtiI9J GlsTv75+yg+ykHqpNKt29Q== 0000919463-96-000003.txt : 19960515 0000919463-96-000003.hdr.sgml : 19960515 ACCESSION NUMBER: 0000919463-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960514 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-75706 FILM NUMBER: 96562270 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 10-Q 1 United States Securities and Exchange Commission Washington, D.C. 20549 Form 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 30, 1996 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from______________to______________ Commission File Number 33-75706; 01, 02, 03 BPC Holding Corporation Berry Plastics Corporation Berry Iowa Corporation Berry Tri-Plas Corporation (Exact name of registrant as specified in its charter) Delaware 35-1814673 (State or other jurisdiction of incorporation or organization) (I.R.S. employer 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 None (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Number of Shares Outstanding Common Stock as of March 30, 1996 Class A - $.00005 Par Value 1,326,220 Class B - $.00005 Par Value 355,940 BPC Holding Corporation and Subsidiaries Form 10-Q Index For Quarterly Period Ended March 30, 1996 Page No. Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets _______________ 3 Consolidated Statements of Operations _____ 5 Consolidated Statements of Cash Flows ______ 6 Notes to Consolidated Financial Statements____ 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations__ 10 Part II Other Information Item 6. Exhibits and Reports on Form 8-K _____________ 12 Signature ____________________________________________________ 13 Part 1. Financial Information Item 1. Financial Statements BPC Holding Corporation and Subsidiaries Consolidated Balance Sheets (In Thousands of Dollars)
March 30, December 30, 1996 1995 (Unaudited) Assets Current assets: Cash and cash equivalents $ 5,047 $ 8,035 Accounts receivable (less allowance for doubtful accounts of $749 and $737) 18,334 15,944 Inventories: Finished goods 10,234 7,743 Raw materials and supplies 3,228 3,897 Custom molds 490 257 13,952 11,897 Prepaid expenses and other receivables 1,200 1,593 Income taxes recoverable 537 411 Total current assets 39,070 37,880 Property and equipment: Land 4,285 3,882 Buildings and improvements 15,748 15,712 Machinery, equipment and tooling 72,477 68,801 Automobiles and trucks 515 496 Construction in progress 3,081 4,094 96,106 92,985 Less accumulated depreciation 42,986 40,544 53,120 52,441 Intangible assets: Deferred financing and origination fees (net of accumulated amortization of $1,765 and $1,555) 5,752 5,962 Patents (net of accumulated amortization of $2 and $0) 137 139 Excess of cost over net assets acquired (net of accumulated amortization of $513 and $425) 4,813 4,782 Covenants not to compete (net of accumulated amortization of $35 and $27) 65 73 10,767 10,956 Deferred income taxes 2,113 2,056 Other 166 132 Total assets $105,236 $103,465 BPC Holding Corporation and Subsidiaries Consolidated Balance Sheets (continued) (In Thousands of Dollars) March 30, December 30, 1996 1995 (Unaudited) Liabilities and stockholders' equity (deficit) Current liabilities: Accounts payable $ 11,550 $ 14,074 Accrued expenses and other liabilities 2,790 2,807 Accrued interest 5,705 2,652 Employee compensation and payroll taxes 4,505 4,618 Current portion of long-term debt 722 717 Total current liabilities 25,272 24,868 Long-term debt, less current portion 110,924 110,959 Deferred compensation 1,569 122 Total liabilities 137,765 135,949 Stockholders' equity (deficit): Preferred stock; $.001 par value; authorized - 100,000 shares; none issued _ _ Class A Common Stock; $.00005 par value: Authorized: 3,000,000 shares Issued: 1,331,432 shares 1 1 Class B Common Stock; $.00005 par value: Authorized: 1,000,000 shares Issued: 355,940 shares _ _ Class A treasury stock: 5,212 shares (58) (58) Additional paid-in capital - 959 Warrants 13,433 4,034 Retained earnings (deficit) (45,905) (37,420) Total stockholders' equity (deficit) (32,529) (32,484) Total liabilities and stockholders' equity (deficit) $105,236 $103,465 See notes to consolidated financial statements.
BPC Holding Corporation and Subsidiaries Consolidated Statements of Operations (In Thousands of Dollars, Except Per Share Data)
Thirteen Weeks Ended March 30, April 1, 1996 1995 (Unaudited) Net sales $34,996 $32,694 Cost of goods sold 25,119 22,542 Gross margin 9,877 10,152 Operating expenses: Selling 1,672 1,370 General and administrative 4,634 2,356 Research and development 207 176 Amortization of intangibles 99 198 Operating income 3,265 6,052 Other expenses: Gain on disposal of property and equipment (42) (7) Other 336 422 Income before interest and income taxes 2,971 5,637 Interest: Expense (3,448) (3,545) Income 68 239 Income (loss) before income taxes (409) 2,331 Income taxes (credit) (178) 5 Net income (loss) $ (231) $ 2,326 Earnings per share: Earnings per common and common equivalent share: Net income (loss) $ (.11) $ 1.11 Earnings per common share - assuming full dilution: Net income (loss) $ (.11) $ 1.11 See notes to consolidated financial statements.
BPC Holding Corporation and Subsidiaries Consolidated Statements of Cash Flows (In Thousands of Dollars) Thirteen Weeks Ended March 30, April 1, 1996 1995 (Unaudited) Operating activities Net income (loss) $ (231) $ 2,326 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,589 2,185 Non-cash interest expense 232 223 Write-off of deferred acquisition costs _ 390 Non-cash compensation 1,447 5 Gain on sale of property and equipment (42) (7) Deferred income taxes (57) (229) Changes in operating assets and liabilities: Accounts receivable, net (2,408) (4,256) Inventories (2,055) (888) Prepaid expenses and other receivables 267 (327) Accounts payable and accrued expenses 273 2,969 Other assets (5) (10) Net cash provided by operating activities 10 2,381 Investing activities Additions to property and equipment (2,482) (1,893) Proceeds from disposal of property and equipment 42 11 Purchase of assets of Sterling Products, Inc., net of cash acquired - (7,246) Purchase of the Alpha drink cup product line (625) - Acquisition costs (66) (328) Net cash used for investing activities (3,131) (9,456) Financing activities Exercise of management stock options 185 _ Reclassification of cash held for acquisition - 12,000 Payments on capital lease (52) (46) Net cash provided by financing activities 133 11,954 Net increase (decrease) in cash and cash equivalents (2,988) 4,879 Cash and cash equivalents at beginning of period 8,035 9,327 Cash and cash equivalents at end of period $ 5,047 $ 14,206 See notes to consolidated financial statements.
BPC Holding Corporation and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) 1. Basis of Presentation The accompanying unaudited consolidated financial statements of BPC Holding Corporation and its subsidiaries (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. 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 (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full fiscal year. The accompanying financial statements include the results of the Company's wholly-owned subsidiary, Berry Plastics Corporation ("Berry"), and its wholly-owned subsidiaries: Berry Iowa Corporation; Berry Tri-Plas Corporation; and Berry Sterling Corporation. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Form 10-K filed with the Securities and Exchange Commission for the year ended December 30, 1995. 2. Acquisitions On March 10, 1995, the Company acquired (the "Sterling Acquisition") through its newly-formed subsidiary, Berry Sterling Corporation, substantially all of the assets and assumed certain liabilities of Sterling Products, Inc. for a purchase price of $7,300,000. The operations of Berry Sterling Corporation are included in the Company's operations since the acquisition date using the purchase method of accounting. On December 21, 1995, the Company acquired (the "Tri-Plas Acquisition") substantially all of the assets and assumed certain liabilities of Tri-Plas, Inc. through its subsidiary Berry Tri-Plas Corporation (formerly Berry-CPI Plastics Corp.) for $6,600,000. The operations of Berry Tri-Plas Corporation are included in the Company's operations since the acquisition date using the purchase method of accounting. On January 23, 1996, the Company purchased the assets relating to the plastic drink cup line and decorating equipment of Alpha Products, Inc., a subsidiary of Aladdin Industries, Inc. for $625,000. The addition of these assets compliments the drink cup product line acquired in the Sterling Acquisition. BPC Holding Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) The pro forma results listed below are unaudited and reflect purchase accounting adjustments assuming the Sterling Acquisition and Tri-Plas Acquisition occurred on December 31, 1994. April 1, 1995 (In thousands) Net sales $ 37,622 Income before income taxes 1,767 Net income 1,762 Earnings per common share: Primary .84 Fully diluted .84 The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the operating results that would have occurred had the acquisitions been consummated at the above date, nor are they necessarily indicative of future operating results. Further, the information gathered on the acquired companies is based upon unaudited internal financial information and reflects only pro forma adjustments for additional interest expense and amortization of the excess of the cost over the underlying net assets acquired, net of the applicable income tax effect. 3. Long-Term Debt Long-term debt consists of the following: March 30, December 30, 1996 1995 (In thousands) 12.25% Senior Subordinated Notes $100,000 $100,000 Nevada Industrial Revenue Bonds 6,000 6,000 Iowa Industrial Revenue Bonds 5,400 5,400 Capital lease obligation 950 1,002 Debt discount (704) (726) 111,646 111,676 Less current portion of long-term debt 722 717 $110,924 $110,959 As a result of the issuance of $100 million of Senior Subordinated Notes (the "Notes") on April 21, 1994, the current portion of long term debt is limited to a $.5 million repayment of the industrial revenue bonds and the monthly principal payments related to a capital lease obligation. The BPC Holding Corporation and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) Company also maintains a $28 million revolving line of credit with Fleet Capital Corporation (by assignment from Shawmut Capital Corporation, by assignment from Barclays Business Credit, Inc.). As of March 30, 1996 approximately $12 million of this credit line was used to provide a letter of credit for the outstanding industrial revenue bonds. Based on the borrowing formula as of March 30, 1996, the Company had approximately $16 million of additional available credit under the Fleet Capital credit line. 4. Stock Option Valuation During the quarter, the Company recorded a non-cash charge of $1.4 million to reflect a change in value of the vested portion of outstanding qualified incentive stock options. The methodology used to determine an estimated value of $35.43 per share of Class A Common Stock of the Company is consistent with the methodology historically employed by the Company to estimate the value of its capital stock. 5. Subsequent Event On April 25, 1996, in connection with the patent infringement lawsuit filed by Berry Sterling Corporation against Pescor Plastics, Inc., the United States District Court for the Eastern District of Virginia entered an order that held that Berry Sterling's patent for the design of a drink cup was not valid. The Company is currently consulting with its advisors concerning an appeal of the order. Item 2. BPC Holding Corporation and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations 13 Weeks Ended March 30, 1996 (the "Quarter") Compared to 13 Weeks Ended April 1, 1995 (the "Prior Quarter") Net Sales. Net sales increased $2.3 million, or 7%, to $35.0 million for the Quarter from $32.7 million for the Prior Quarter, notwithstanding an approximate 10% decrease in net selling price due mainly to the impact of cyclical adjustments in the price of plastic resin. The increase in net sales was attributed to a combination of higher drink cup sales of $1.3 million and higher container sales of $1.4 million (including the introduction of polypropylene containers from the Tri-Plas Acquisition). Sales of custom manufactured tools decreased $0.4 million. Gross Margin. Gross margin decreased by $0.3 million to $9.9 million for the Quarter from $10.2 million for the Prior Quarter. This decrease of 2.8% included the impact of negative inventory valuation (due principally to changing raw material costs) and start-up expenses associated with the transfer of the business previously conducted by Tri-Plas, Inc. in its Ontario, California facility to the Henderson plant. Operation Expenses. Selling expenses increased by $0.3 million to $1.8 million for the Quarter from $1.5 million for the Prior Quarter principally as a result of the addition of the drink cup business and the Tri-Plas Acquisition. General and administrative expenses increased by $2.3 million to $4.6 million for the Quarter from $2.3 million for the Prior Quarter. Included in the increase was a $1.4 million non-cash adjustment to the estimated value of vested incentive stock options. The Tri-Plas Acquisition and the Sterling Products Acquisition resulted in additional expenses of $0.3 million, and patent and other litigation expenses were $0.5 million. Interest Expense. Interest expense decreased $0.1 million to $3.4 million for the Quarter compared to $3.5 million for the Prior Quarter. Income Tax. For the Quarter, the Company had an income tax benefit of $0.2 million which was determined using Federal and state statutory income tax rates. There was minimal income tax for the Prior Quarter due to the availability of loss carryforwards. Net Income (Loss) and EBITDA. Net loss for the Quarter of $0.2 million decreased $2.5 million from net income of $2.3 million for the Prior Quarter for the reasons discussed above. EBITDA, defined as income before taxes, interest, depreciation, amortization, loss (gain) on disposal of property and equipment, write-off of deferred acquisition costs, valuation changes in management stock options, and one-time transition expenses related to the Sterling Products Acquisition and the Tri-Plas Acquisition, was $7.3 for the Quarter compared to $8.2 million for the Prior Quarter. Liquidity and Sources of Capital Net cash provided from operating activities was $0.0 million through the thirteen week period ended March 30, 1996, a decrease of $2.4 million from the $2.4 million for the comparable prior year period. Increased sales volume, a reduction of overdue accounts payable assumed in connection with the Tri-Plas Acquisition and the build-up of drink cup inventory for the peak summer season all contributed to increasing working capital (defined as accounts receivable, inventories, prepaid expenses, other receivables, accounts payable and accrued expenses) by $3.9 million since 1995 year end. Working capital increased $2.5 million for the same period in 1995. Capital spending of $2.5 million included $1.0 million for molds and molding machines, $0.5 for printing-related equipment, and $1.0 million for building and accessory equipment. Additionally, the Company purchased the drink cup product line of Alpha Products, Inc. (see Note 2). The Company currently intends to finance capital spending through cash flow from operations, existing cash balances and cash available under the Fleet revolving credit agreement. At March 30, 1996, the Company's cash balance was $5.0 million, and the Company had unused borrowing capacity under the Revolving Credit Facility's borrowing base of approximately $16 million. Part II. Other Information Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 11.01 Computation of Per Share Earnings (b) Reports on Form 8-K: No reports on Form 8-K were filed by the Company during the quarter ended March 30, 1996. 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. BPC Holding Corporation Berry Plastics Corporation Berry Iowa Corporation Berry Tri-Plas Corporation May 13, 1996 James M. Kratochvil Vice President, Chief Financial Officer and Secretary of BPC Holding Corporation and its Subsidiaries (Principal Financial Officer) Exhibit 11.01. COMPUTATION OF PER SHARE EARNINGS
Thirteen Weeks Ended March 30, April 1, 1996 1995 Net income (loss) $ (231,598) $2,325,992 Primary earnings per share: Average number of common shares outstanding at quarter-end 1,663,408 1,659,408 Net additional common shares in respect to common stock equivalents based on the Modified Treasury Stock method using average market price 435,808 437,709 Total primary shares and equivalents 2,099,216 2,097,117 Net income (loss) per per primary share $ (.11) 1.11 Fully-diluted earnings per share: Average number of common share outstanding at quarter-end 1,663,408 1,659,408 Net additional common shares in respect to common stock equivalents based on the Modified Treasury Stock method using higher of average market or last price 487,274 437,709 Total shares and equivalents 2,150,683 2,097,117 Net income (loss) per fully- diluted shares $ (.11) $ 1.11
EX-27 2
5 1,000 3-MOS DEC-28-1996 MAR-30-1996 5047 0 19083 (749) 13952 39070 96106 (42986) 105236 25272 111400 0 0 (57) (32472) 105236 34996 0 25119 31731 0 147 3448 (409) (178) (231) 0 0 0 (231) (.11) (.11)
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