<PAGE>
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 December 31, 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 33-97752
VAN DE KAMP'S, INC.
(Exact Name of Registrant as Specified in Its Charter
DELAWARE 43-1721518
- ---------------------------------- ----------
(State or Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification No.)
1000 St. Louis Union Station
St. Louis, Missouri 63103
(Address of Principal Executive Office)
(314) 241-0303
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes No X
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
Shares Outstanding
December 31, 1996
Common stock, no par value 200
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VAN DE KAMP'S, INC.
BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
December 31, June 29,
1996 1996
------------- ----------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 166 $ 4,040
Accounts receivable - net of allowance
of $310 and $190, respectively 29,072 16,250
Accounts receivable - other 543 506
Inventories (Note 3) 49,718 30,202
Prepaid expenses 1,886 724
Net current deferred tax asset 4,089 3,230
-------- --------
Total current assets 85,474 54,952
Property, plant and equipment, net 87,036 35,943
Goodwill and other intangible assets, net 338,271 203,736
Other assets 15,651 10,725
-------- --------
Total Assets $526,432 $305,356
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current portion of long term debt $ 11,446 $ 5,000
Revolving credit facility 13,500 -
Senior secured convertible debt 20,000 -
Accounts payable 20,767 14,144
Accrued liabilities 28,159 15,789
-------- --------
Total current liabilities 93,872 34,933
Deferred tax liability 2,997 2,997
Senior secured term debt 207,012 83,750
Senior subordinated notes 100,000 100,000
-------- --------
Total liabilities 403,881 221,680
-------- --------
Stockholder's equity:
Common stock, no par value - -
Paid in capital 124,207 84,115
Accumulated deficit (1,656) (439)
-------- --------
Total stockholder's equity 122,551 83,676
-------- --------
Total Liabilities and Stockholder's Equity $526,432 $305,356
======== ========
</TABLE>
See accompanying notes to financial statements
<PAGE>
VAN DE KAMP'S, INC.
STATEMENTS OF OPERATIONS
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended December 31,
--------------------------------
1996 1995
---------------- --------------
<S> <C> <C>
Net sales $114,893 $38,829
Cost of goods sold 49,756 17,678
-------- -------
Gross profit 65,137 21,151
Selling, distribution and marketing expenses:
Selling and distribution 13,383 4,855
Trade promotions 27,197 7,182
Consumer marketing 6,105 1,398
-------- -------
Total selling, distribution and marketing expenses 46,685 13,435
Amortization of goodwill and other intangibles 3,385 1,209
General and administrative expenses 3,409 1,304
Other expenses - -
Transition related costs (Note 4) 503 -
-------- -------
Total operating expenses 53,982 15,948
-------- -------
Operating income 11,155 5,203
Interest income (347) -
Interest expense 8,608 3,802
Amortization of deferred financing expense 548 164
Other bank and financing expenses 106 -
-------- -------
Income before income taxes 2,240 1,237
Income tax provision 896 494
-------- -------
Net income $ 1,344 $ 743
======== =======
</TABLE>
See accompanying notes to financial statements
<PAGE>
VAN DE KAMP'S, INC.
STATEMENTS OF OPERATIONS
(dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended December 31, 1995
----------------------------------
The Company Predecessor
------------------------------------- ------------
Operating Period Period
Six Months September 19, 1995 July 1, 1995
Ended through through
December 31, 1996 December 31, 1995 September 18, 1995
------------------ ------------------- -------------------
(unaudited) (unaudited)
<S> <C> <C> <C>
Net sales $193,046 $43,384 $21,061
Cost of goods sold 83,581 19,674 10,267
-------- ------- -------
Gross profit 109,465 23,710 10,794
Selling, distribution and marketing expenses:
Selling and distribution 22,824 5,372 2,843
Trade promotions 47,045 7,973 3,699
Consumer marketing 10,040 1,595 1,919
-------- ------- -------
Total selling, distribution and marketing expenses 79,909 14,940 8,461
Amortization of goodwill and other intangibles 6,760 1,407 689
General and administrative expenses 6,033 1,474 1,370
Other expenses 48 - -
Transition related costs (Note 4) 1,593 - -
-------- ------- -------
Total operating expenses 94,343 17,821 10,520
-------- ------- -------
Operating income 15,122 5,889 274
Interest income (632) - -
Interest expense 16,603 4,314 -
Amortization of deferred financing expense 1,047 186 -
Other bank and financing expenses 132 - -
-------- ------- -------
(Loss) income before income taxes (2,028) 1,389 274
Income tax (benefit) provision (811) 555 396
-------- ------- -------
Net (loss) income $ (1,217) $ 834 $ (122)
======== ======= =======
</TABLE>
See accompanying notes to financial statements
<PAGE>
VAN DE KAMP'S, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Additional
Common Paid-in Accumulated
Shares Capital Deficit Total
------ ------- ------- -----
<S> <C> <C> <C> <C>
Balance at June 29, 1996 200 $ 84,115 $ (439) $ 83,676
Capital contribution - 40,092 - 40,092
Net loss - - (1,217) (1,217)
------ -------- ------- --------
Balance at December 31, 1996 200 $124,207 $(1,656) $122,551
====== ======== ======= ========
</TABLE>
See accompanying notes to financial statements
<PAGE>
VAN DE KAMP'S, INC.
STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Operating Period
Six Months September 19, 1995
Ended through
December 31, 1996 December 31, 1995
----------------- ------------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (1,217) $ 834
Adjustments to reconcile net (loss) income to cash
used in operating activities:
Depreciation and amortization 11,284 2,370
Deferred income taxes (859) 555
Change in assets and liabilities, net of effects of
businesses acquired:
(Increase) in accounts receivable (12,859) (16,900)
(Increase) in inventories (13,629) (1,351)
(Increase) in prepaid expenses (1,162) (641)
Increase in accounts payable 6,623 7,621
Increase in accrued expenses 10,370 7,510
(Increase) in other assets (942) -
--------- ---------
Net cash used in operating activities (2,391) (2)
--------- ---------
Cash flows from investing activities:
Additions to property, plant and equipment (9,101) (457)
Payment for acquisition of businesses (190,051) (193,703)
--------- ---------
Net cash used in investing activities (199,152) (194,160)
--------- ---------
Cash flows from financing activities:
Proceeds from short term borrowings 45,000 34,150
Proceeds from long term borrowings 135,000 100,000
Payment of borrowings (16,792) -
Capital contributions 40,092 69,420
Debt issuance costs (5,631) (8,601)
--------- ---------
Net cash provided by financing activities 197,669 194,969
--------- ---------
(Decrease) increase in cash and cash equivalents (3,874) 807
Cash and cash equivalents, beginning of period 4,040 355
--------- ---------
Cash and cash equivalents, end of period $ 166 $ 1,162
========= =========
</TABLE>
See accompanying notes to financial statements
<PAGE>
VAN DE KAMP'S, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY
Basis of Presentation
The interim financial statements of Van de Kamp's, Inc. (the "Company"),
included herein, have not been audited by independent accountants. The
statements include all adjustments, such as normal recurring accruals, which
management considers necessary for a fair presentation of the financial position
and operating results of the Company for the periods presented. Operating
results during the predecessor's prior year period include certain
reclassifications to conform with the Company's presentation. The statements
have been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information and
footnote disclosure normally included in financial statements prepared in
conformity with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. The operating results for
interim periods are not necessarily indicative of results to be expected for an
entire year.
The prior owners did not operate the Company's product lines as separate
divisions and accordingly, it is not practicable to present a statement of cash
flows during the predecessor period. The Company was granted a waiver by the
Securities and Exchange Commission with respect to the presentation of these
cash flows.
For further information, reference should be made to the financial statements
for the period ended June 29, 1996 and notes thereto included in the Company's
Annual Report on Form 10-K on file at the Securities and Exchange Commission.
NOTE 2 - ACQUISITIONS
On September 19, 1995 (commencement of operations), Van de Kamp's, Inc. acquired
the assets of the frozen seafood business (which operated as Van de Kamp's) and
the frozen dessert product lines, (together the "Businesses") from The Pillsbury
Company and Pet Incorporated. The Company acquired the inventories, property,
plant and equipment and intangible assets of the Businesses for a purchase price
of $190 million. The acquisition was accounted for by the purchase method of
accounting.
On May 6, 1996, substantially all the assets of the Mrs. Paul's frozen food
business were purchased from Campbell Soup Company ("CSC") for $73.2 million.
The Company acquired the inventories, certain manufacturing equipment and
intangible assets from CSC. On July 9, 1996, substantially all of the assets of
the frozen food division of The Quaker Oats Company ("Quaker") were purchased
for $188.0 million. The Company purchased the Celeste(R) trademark and was
granted an exclusive perpetual, transferable, royalty-free license of the Aunt
Jemima(R) trademark for use in the frozen breakfast products business. Also
included in the acquisition were inventories and the manufacturing facility
where the Company produces both product lines. The allocation of purchase price
for these acquisitions has not been finalized; however, any changes are not
expected to be material. The acquisitions have been accounted for using the
purchase method and, accordingly, the results of operations are included in the
Statements of Operations from the dates of acquisition. Assets acquired and
liabilities assumed were recorded at their estimated fair market value, and the
excess costs over net tangible assets are being amortized over the estimated
useful lives of the related intangible assets.
<PAGE>
Had the three acquisitions described in this Note 2 taken place July 1, 1995 the
unaudited pro forma net sales and income (loss) before income taxes would have
been $105,582,000 and $6,887,000 for the quarter ended December 31, 1995 and
$185,132,000 and $2,994,000 for the six months then ended. Results for the
quarter and six months ended December 31, 1996 would not have been significantly
different from those reflected in the Statement of Operations.
NOTE 3 - INVENTORIES
Inventories are stated at the lower of cost (determined by the first-in, first-
out method) or market. Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31, 1996 June 29, 1996
----------------- -------------
<S> <C> <C>
Raw materials $14,163 $ 6,856
Packaging 3,846 2,022
Finished goods 31,709 21,324
------- -------
$49,718 $30,202
======= =======
</TABLE>
NOTE 4 - TRANSITION RELATED COSTS
Transition related costs consist of what management believes are one-time costs
incurred to establish operations and integrate the businesses acquired,
including relocation expenses, recruiting fees, sales training, computer systems
conversion and other one-time transitional expenses.
NOTE 5 - SUBSEQUENT EVENT
On February 3, 1997, the Company sold substantially all of the assets of its
whipped topping product line including inventory, certain manufacturing
equipment and intangible assets, for approximately $7.0 million in cash. The
resulting gain or loss on the sale is not expected to be material, and the sale
will not significantly impact future results.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Reference is made to Notes to Financial Statements and Management's Discussion
and Analysis of Financial Condition and Results of Operations presented in the
Registrant's 1996 Form 10-K for the period ended June 29, 1996.
A. The following tables set forth for the periods indicated the percentage which
the items in the Statement of Operations bear to net sales. The Statement of
Operations column for the six months ended December 31, 1995 combines the
Company's operating period of September 19, 1995 through December 31, 1995
and the predecessor's period of July 1, 1995 through September 18, 1995,
without any pro forma adjustments.
COMPARATIVE RESULTS: QUARTER ENDED DECEMBER 31
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
December 31, 1996 December 31, 1995
----------------- -----------------
<S> <C> <C> <C> <C>
Net sales $114,893 100.0% $38,829 100.0%
Cost of goods sold 49,756 43.3 17,678 45.5
-------- ----- ------- -----
Gross profit 65,137 56.7 21,151 54.5
Selling, distribution and marketing
expenses:
Selling and distribution 13,383 11.6 4,855 12.5
Trade promotions 27,197 23.7 7,182 18.5
Consumer marketing 6,105 5.3 1,398 3.6
-------- ----- ------- -----
Total selling, distribution and
marketing expenses 46,685 40.6 13,435 34.6
Amortization of goodwill and other
intangibles 3,385 3.0 1,209 3.1
General and administrative expenses 3,409 3.0 1,304 3.4
Other expenses - - - -
Transition related costs 503 .4 - -
-------- ----- ------- -----
Total operating expenses 53,982 47.0 15,948 41.1
-------- ----- ------- -----
Operating income 11,155 9.7 5,203 13.4
Interest income (347) (.3) - -
Interest expense 8,608 7.4 3,802 9.8
Amortization of deferred financing
expense 548 .5 164 .4
Other bank and financing expenses 106 .1 - -
-------- ----- ------- -----
Income before income taxes 2,240 2.0 1,237 3.2
Income tax provision 896 .8 494 1.3
-------- ----- ------- -----
Net income $ 1,344 1.2% $ 743 1.9%
======== ===== ======= =====
</TABLE>
<PAGE>
RESULTS OF OPERATIONS
QUARTER ENDED DECEMBER 31, 1996 COMPARED TO QUARTER ENDED DECEMBER 31, 1995:
Net Sales. Net sales for the quarter were $114.9 million, an increase of $76.1
million versus the same quarter last year. The increase was due to (1) a $2.6
million increase in Van de Kamp's seafood sales, (2) a $2.2 million increase in
desserts sales and (3) the inclusion of $22.5 million in Mrs. Paul's branded
seafood sales, and $48.8 million of sales of Celeste(R) pizza and Aunt Jemima(R)
frozen breakfast products (together "Celeste/Aunt Jemima"), which were acquired
during May and July 1996, respectively.
Sales of desserts and Van de Kamp's seafood increased $4.8 million versus prior
year. Sales of new products and line extensions in seafood and desserts were
$3.4 million and $2.1 million, respectively, during the quarter. The seafood new
products sales increase was partially offset by (1) a decline in sales of value
priced items due to increased competitive activity and (2) a national decline in
frozen shrimp consumption. Branded desserts exhibited strong growth, with cream
pies, cobblers and Oronoque Orchards(R) pie shells increasing 73%, 17% and 32%,
respectively, versus the same period in the prior year. Whipped toppings sales,
which were predominantly private label, declined $1.9 million due to greater
competition in the category.
Gross Profit. Gross profit increased from 54.5% of sales in fiscal 1996 to 56.7%
in fiscal 1997. The increase was caused by four primary factors: (1) favorable
mix of business resulting from increased branded sales versus lower margin
private label dessert sales, (2) lower seafood manufacturing costs stemming from
the integration of Mrs. Paul's seafood production in the Erie, PA facility, (3)
higher gross profit margins of the Celeste/Aunt Jemima products and (4) a price
increase in the Van de Kamp's seafood business effective January 1996.
Selling, Distribution and Marketing Expenses. Selling, distribution and
marketing expenses increased from 34.6% of sales in the prior year to 40.6% of
sales in the current year. The increase in trade promotion spending was caused
by (1) higher spending levels to support new product introductions under the Van
de Kamp's and Mrs. Paul's brands, and (2) the inclusion in fiscal 1997 of the
Celeste pizza business, which has a higher rate of trade spending than the
seafood product lines. Selling and distribution expenses declined as a
percentage of sales due to (1) the development of a lower cost distribution
network than the Predecessor Company and (2) distribution efficiencies resulting
from the Mrs. Paul's and Celeste/Aunt Jemima acquisitions. Consumer marketing
increased from 3.6% to 5.3% of sales to support the introduction of new seafood
and dessert products during 1996.
Amortization of Goodwill and Other Intangibles. Amortization of goodwill and
intangibles increased $2.2 million due to the increase in intangibles resulting
from the acquisitions of Mrs. Paul's in the fourth quarter of fiscal 1996 and
Celeste/Aunt Jemima in the first quarter of fiscal 1997.
General and Administrative Expenses. General and administrative expenses
increased $2.1 million to facilitate the management of the businesses acquired
during calendar 1996. General and administrative expenses decreased from 3.4% of
sales to 3.0% of sales during this period due to efficiencies related to the
increased scale of the business.
Transition Related Costs. Transition related costs consist of what management
believes to be one-time costs incurred to establish operations and integrate
acquired businesses, including relocation expenses, recruiting fees, sales
training, broker conversions and orientations, computer systems conversion and
other unique transitional expenses.
<PAGE>
Operating Income. Operating income increased $6.0 million as a result of the
increased size of the Company and the operating efficiencies described
previously.
Interest Expense. Interest expense increased due to the additional financing
required to complete the acquisitions of Mrs. Paul's and Celeste/Aunt Jemima.
Provision for Income Taxes. The Company anticipates a combined federal and state
tax rate of 40%.
COMPARATIVE RESULTS: SIX MONTHS ENDED DECEMBER 31
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
December 31, 1996 December 31, 1995
----------------- -----------------
<S> <C> <C> <C> <C>
Net sales $193,046 100.0% $64,445 100.0%
Cost of goods sold 83,581 43.3 29,941 46.5
-------- ----- ------- -----
Gross profit 109,465 56.7 34,504 53.5
Selling, distribution and marketing expenses:
Selling and distribution 22,824 11.8 8,215 12.7
Trade promotions 47,045 24.4 11,672 18.1
Consumer marketing 10,040 5.2 3,514 5.5
-------- ----- ------- -----
Total selling, distribution and marketing expenses 79,909 41.4 23,401 36.3
Amortization of goodwill and other intangibles 6,760 3.5 2,096 3.3
General and administrative expenses 6,033 3.1 2,844 4.4
Other expenses 48 .1 - -
Transition related costs 1,593 .8 - -
-------- ----- ------- -----
Total operating expenses 94,343 48.9 28,341 44.0
-------- ----- ------- -----
Operating income 15,122 7.8 6,163 9.5
Interest income (632) (.4) - -
Interest expense 16,603 8.6 4,314 6.7
Amortization of deferred financing expense 1,047 .5 186 .3
Other bank and financing expenses 132 .1 - -
-------- ----- ------- -----
(Loss) income before income taxes (2,028) (1.0) 1,663 2.5
Income tax (benefit) provision (811) (.4) 951 1.4
-------- ----- ------- -----
Net (loss) income $ (1,217) (.6)% $ 712 1.1%
======== ===== ======= =====
</TABLE>
<PAGE>
SIX MONTHS ENDED DECEMBER 31, 1996 COMPARED TO SIX MONTHS ENDED DECEMBER 31,
1995:
Net Sales. Net sales for the period increased $128.6 million versus prior year,
to $193.0 million. Van de Kamp's seafood and desserts sales increased $4.9
million and $1.8 million, respectively, during the period. Mrs. Paul's seafood
and Celeste/Aunt Jemima added $36.6 million and $85.6 million, respectively.
The growth in Van de Kamp's seafood sales was driven by new products and line
extensions which generated sales of $5.2 million during the period. Such sales
were offset by a slight decline in the base business due to competitive activity
on budget priced items and a decline in frozen shrimp consumption. All of the
branded dessert products exhibited strong growth versus prior year, with Mrs.
Paul's pie shells, a new product this year, generating sales of $2.4 million.
Whipped topping sales, which are predominantly private label, decreased $3.3
million versus prior year due to greater competitive activity.
Gross Profit. Gross profit increased from 53.5% of sales in fiscal 1996 to 56.7%
in fiscal 1997. The increase was caused by five primary factors: (1) favorable
mix of business resulting from increased branded sales versus lower margin
private label dessert sales, (2) lower seafood manufacturing costs stemming from
the integration of Mrs. Paul's seafood production in the Erie, PA facility, (3)
lower manufacturing costs versus the Predecessor Company, (4) higher gross
margins of the Celeste/Aunt Jemima products and (5) a price increase in the Van
de Kamp's seafood business effective January 1996.
Selling, Distribution and Marketing Expenses. Selling, distribution and
marketing expenses increased from 36.3% of sales in the prior year to 41.4% of
sales in the current year. The increase in trade promotion spending was caused
by (1) higher spending levels to support new product introductions under the Van
de Kamp's and Mrs. Paul's brands and (2) the inclusion in fiscal 1997 of the
Celeste pizza business, which has a higher rate of trade spending than the
seafood product lines. Selling and distribution expenses declined as a
percentage of sales due to (1) the development of a lower cost distribution
network than the Predecessor Company and (2) distribution efficiencies resulting
from the Mrs. Paul's and Celeste/Aunt Jemima acquisitions. Consumer marketing
decreased as a percentage of sales because the spending rate as a percentage of
sales is lower for the Celeste pizza and Aunt Jemima breakfast products than for
the Company's other product lines. The lower spending rate was offset by
increased spending to support the introduction of new products during 1996.
Amortization of Goodwill and Other Intangibles. Amortization of goodwill and
intangibles increased $4.7 million due to the increase in intangibles resulting
from the acquisitions of Van de Kamp's in the first quarter of fiscal 1996, Mrs.
Paul's in the fourth quarter of fiscal 1996 and Celeste/Aunt Jemima in the first
quarter of fiscal 1997.
General and Administrative Expenses. General and administrative expenses
increased $3.2 million to facilitate the management of the businesses acquired
during calendar 1996. General and administrative expenses decreased from 4.4% of
sales to 3.1% of sales during this period due to (1) efficiencies related to the
increased scale of the business and (2) lower overhead spending associated with
the Company's stand-alone structure as compared to amounts allocated to the
businesses during the Predecessor ownership period.
<PAGE>
Transition Related Costs. Transition related costs consist of what management
believes to be one-time costs incurred to establish operations and integrate
acquired businesses, including relocation expenses, recruiting fees, sales
training, broker conversions and orientations, computer systems conversion and
other unique transitional expenses.
Operating Income. Operating income increased $6.0 million as a result of the
increased size of the Company and the operating efficiencies described
previously.
Interest Expense. Interest expense increased versus the prior period due to
additional financing required to complete the acquisitions of Van de Kamp's,
Mrs. Paul's and Celeste/Aunt Jemima.
Provision for Income Taxes. The Company anticipates a combined federal and state
tax rate of 40%. This rate is lower than the rate experienced by the prior
owners, primarily because the Company's amortization of goodwill is deductible
for income tax purposes.
LIQUIDITY AND CAPITAL RESOURCES
On July 9, 1996 the Company acquired substantially all of the assets of the
frozen foods division of The Quaker Oats Company ("Quaker Oats") for
approximately $188 million. These assets included the Celeste frozen pizza
business and the Aunt Jemima frozen breakfast products business of Quaker Oats.
The acquisition was financed by (i) an equity capital contribution of $40
million from VDK Holdings, Inc. (the Company's parent), (ii) $135 million of
additional borrowings through the Company's existing senior bank facility and
(iii) a $20 million senior secured convertible loan which is secured by cash
collateral posted by VDK Holdings, Inc. Total sources of financing of $195
million were used to fund the acquisition and pay transaction fees and expenses.
For the six months ended December 31, 1996, cash used in operations was $2.4
million. Net income before depreciation and amortization provided $8.3 million
of operating cash flow which was offset by a use of cash of $14.0 million to
fund working capital requirements. Current assets, excluding cash, increased
$27.7 million primarily due (1) to the acquisition of the Quaker frozen food
businesses, which resulted in increased accounts receivable and inventory
balances, and (2) a build up of seafood inventory preceding the Company's peak
seafood sales period. The increases in current assets were partially offset by a
$17.0 million increase in accounts payable and accrued expenses.
The Company spent $9.1 million on property, plant and equipment during the six
months, the majority of which was expended to (1) relocate and install
production lines purchased from CSC into the Company's Erie, PA facility and (2)
upgrade refrigeration capacity and building layout to accommodate the
installation of the lines.
At December 31, 1996, the Company had $0.2 million of cash and cash equivalents
and an unused commitment of $11.3 million on its $25 million revolving debt
facility, net of reduction for previously issued letters of credit. Cash
provided by operations and borrowings under the revolving credit facility are
the primary sources of liquidity. The available borrowing capacity under the
revolving credit facility, combined with cash provided by operations, should
continue to provide the Company with the flexibility to fund future operations
as well as to meet existing obligations.
<PAGE>
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT
NUMBER EXHIBIT
- ------ -------
3.1 Certificate of Incorporation of Van de Kamp's, Inc. with amendments
thereto (incorporated by reference to Exhibit 3.1 of Van de Kamp's Inc.
Form S-4 filed October 4, 1995 (the "S-4")).
3.2 Amended and Restated By-Laws of Van de Kamp's, Inc. (incorporated by
reference to Exhibit 3.2 to the S-4).
27.1 Financial Data Schedule.
<PAGE>
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
VAN DE KAMP'S, INC.
Dated: February 14, 1997 By: /s/ Timothy B. Andersen
________________________________
Timothy B. Andersen
Chief Financial Officer and
Vice President, Administration
and duly authorized officer
<PAGE>
INDEX TO EXHIBITS
EXHIBIT SEQUENTIALLY
NUMBER EXHIBIT NUMBERED PAGE
- ------ ------- -------------
3.1 Certificate of Incorporation of Van de Kamp's, Inc. with amendments
thereto (incorporated by reference to Exhibit 3.1 of Van de Kamp's
Inc. Form S-4 filed on October 4, 1995 (the "S-4")).
3.2 Amended and Restated By-Laws of Van de Kamp's, Inc. (incorporated by
reference to Exhibit 3.2 to the S-4).
banks and other financial institutions named as parties thereto and
The Chase Manhattan Bank, N.A., as Agent (incorporated by reference to
Exhibit 10.21 of the 10-K).
27.1 Financial Data Schedule.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUN-30-1996
<PERIOD-END> DEC-31-1997
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<COMMON> 0
0
0
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<LOSS-PROVISION> 60
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<INCOME-TAX> (811)
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</TABLE>
