<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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 0-27818
------------
DOANE PRODUCTS COMPANY
State of Incorporation--Delaware IRS Employer Identification No. 43-1350515
West 20th and Stateline Road
Joplin, Missouri 64804
417-624-6166
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 X NO
------- --------
Common Stock outstanding November 13, 1997 - 1,000 shares
------
<PAGE> 2
DOANE PRODUCTS COMPANY AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page
------
<S> <C>
PART I - Financial Information
Item 1:
Consolidated Balance Sheets - September 30, 1997 and December 31, 1996 2
Consolidated Statements of Operations - three months and nine months ended September 30, 1997 3
and September 30, 1996
Consolidated Statements of Cash Flows - nine months ended September 30, 1997 4
and September 30,1996
Notes to Consolidated Financial Statements 5-8
Item 2:
Management's Discussion and Analysis of Financial Condition and Results of Operations 9-10
PART II - Other Information
Item 5:
Personnel 11
Item 6:
Exhibits and Reports on Form 8-K 11
Signature 12
</TABLE>
<PAGE> 3
DOANE PRODUCTS COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1997 1996
---- ----
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Accounts receivable, less allowance for doubtful $ 56,721 $ 67,734
accounts; $89 and $-0- at September 30, 1997 and
December 31, 1996, respectively
Inventories 31,131 30,737
Prepaid expenses and other 3,136 7,408
-------- --------
Total current assets 90,988 105,879
Property, net of accumulated depreciation of $13,490 as of
September 30, 1997, and $8,112 as of December 31, 1996 100,525 93,083
Goodwill, net of amortization 124,230 126,613
Other assets 11,116 11,176
Investments - cash value of life insurance 1,606 1,582
--------- ---------
$ 328,465 $ 338,333
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt $ 11,354 10,417
Accounts payable 35,735 51,343
Accrued expenses
Salaries and commissions 3,959 3,223
Other 10,865 15,318
---------- ---------
Total current liabilities 61,913 80,301
Deferred compensation 4,113 4,030
Long-term debt 198,456 196,186
Deferred income taxes 2,346 409
Senior exchangeable preferred stock, 3,000 shares authorized,
1,200 shares issued 28,864 24,160
---------- ---------
Total liabilities 295,692 305,086
---------- ---------
Stockholder's equity:
Common stock, par value $.01.
Authorized and issued 1,000 shares - -
Additional paid in capital 41,675 40,825
Retained earnings (8,902) (7,578)
--------- ---------
32,773 33,247
--------- ---------
$ 328,465 $ 338,333
========= =========
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE> 4
DOANE PRODUCTS COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED NINE MONTH PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net sales $128,301 $124,672 $399,044 $355,957
Cost of goods sold 111,316 112,308 351,394 315,909
-------- -------- -------- --------
Gross profit 16,985 12,364 47,650 40,048
Operating expenses:
Selling 4,003 3,748 12,572 10,557
General and administrative 4,421 3,891 12,859 11,377
-------- -------- -------- --------
8,424 7,639 25,431 21,934
-------- -------- -------- --------
Income from operations 8,561 4,725 22,219 18,114
Other income (expense):
Interest income 56 61 117 206
Interest expense (5,628) (5,601) (17,090) (17,173)
Nonrecurring financing charge -- -- -- (4,815)
Miscellaneous (4) 3 52 10
-------- -------- -------- --------
(5,576) (5,537) (16,921) (21,772)
-------- -------- -------- --------
Income (loss) before income taxes 2,985 (812) 5,298 (3,658)
Provision (benefit) for income taxes 1,080 (203) 1,917 (1,163)
-------- -------- -------- --------
Net income (loss) $ 1,905 $ (609) $ 3,381 $ (2,495)
======== ======== ======== ========
Net income (loss) applicable $ 331 $ (2,066) $ (1,323) $ (6,705)
to common stock
Net income (loss) per common share $ 331 $ (2,066) $ (1,323) $ (6,705)
Weighted average shares outstanding 1,000 1,000 1,000 1,000
======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE> 5
DOANE PRODUCTS COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTH NINE MONTH
PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
(unaudited) (unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 3,381 $ (2,495)
Items not requiring cash:
Depreciation and amortization 8,008 7,388
Nonrecurring financing charge expensed -- 4,815
Amortization of deferred debt issuance costs 872 736
Deferred income taxes 1,937 (18)
Deferred commodity credit -- (1,770)
Other 168 2
Changes in working capital components (4,436) (319)
--------- ---------
Net cash provided by operating activities 9,930 8,339
--------- ---------
Cash flows from investing activities:
Proceeds from sale of property and equipment 25 19
Purchase of property and equipment (12,933) (4,956)
Increase in debt issuance costs (468) (5,403)
Other (611) (3,961)
--------- ---------
Net cash used in investing activities (13,987) (14,301)
--------- ---------
Cash flows from financing activities:
Net borrowings under revolving credit agreement 6,100 7,000
Proceeds from issuance of long-term debt 4,919 160,000
Principal payments on long-term debt (7,812) (162,588)
Contributed Capital 850 --
--------- ---------
Net cash provided by financing activities 4,057 4,412
--------- ---------
Decrease in cash and cash equivalents -- (1,550)
Cash and cash equivalents, beginning of period -- 1,550
--------- ---------
Cash and cash equivalents, end of period $ -- $ --
========= =========
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE> 6
DOANE PRODUCTS COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(Unaudited)
1. Accounting policies
The unaudited interim financial information included herein reflects the
adjustments (consisting solely of normal recurring adjustments) which are, in
the opinion of management, necessary for a fair presentation of the results of
operations, financial position, and cash flows for the periods presented.
Such interim information should be read in conjunction with the financial
statements and notes thereto contained in the Company's Annual Report on Form
10K (and related exhibits) for the year ended December 31, 1996 and the
Company's Amendment No. 1 on Form S-3 to Form S-1 Registration Statement (File
No. 33-98110) relating to the issuance of $160,000 principal amount of the
Company's 10 5/8% Senior Notes due 2006 (the "Senior Notes"). The accounting
policies used in preparing these financial statements are the same as those
summarized in the Company's 1996 financial statements included in the Annual
Report on Form 10K.
The results of operations for the three months ended September 30, 1997 and
September 30, 1996 are not necessarily indicative of the results to be expected
for other interim periods or the full year.
Certain reclassifications have been made to the September 30, 1996 consolidated
financial statements to conform with the September 30, 1997 presentation.
2. Acquisition
On October 5, 1995, the Company was acquired (the "Acquisition") as a result of
the mergers of two wholly-owned subsidiaries of DPC Acquisition Corp. ("DPCAC")
and the Company's predecessor, Doane Products Company (the "Predecessor"), with
the Company being the surviving entity (sometimes referred to in the Company's
Annual Report on Form 10K as the "Successor"). The purchase price was $249,100
including existing indebtedness.
The Acquisition was financed in part through (i) a senior credit facility (the
"Senior Credit Facility") that provides term loan and revolving loan
borrowings, (ii) the proceeds of the issuance of the Senior Notes, and (iii)
$30,000 of 14.25% Senior Exchangeable Preferred Stock due 2007. As used
herein, the term "Acquisition" means the acquisition of the Company by DPCAC,
the refinancing of existing indebtedness of Predecessor and the payment of
related fees and expenses.
The cost of the Acquisition has been allocated on the basis of the estimated
fair value of the assets acquired and liabilities assumed. The allocation
resulted in goodwill of approximately $129,000. The goodwill is being
amortized over 40 years on a straight-line basis.
For financial statement purposes, the Acquisition and Merger were accounted for
as a purchase acquisition effective October 1, 1995. The effects of the
Acquisition have been reflected in the Company's assets and liabilities at that
date.
-5-
<PAGE> 7
3. Long-Term debt
Long-term Debt consisted of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997 DECEMBER 31, 1996
<S> <C> <C>
Senior Credit Facility
Term Loan 37,316 45,128
Revolving Loan 7,575 1,475
Industrial Development Revenue Bonds
(net of construction and reserve funds) 4,919 --
Senior Notes 160,000 160,000
--------- ---------
Total Long-term debt $ 209,810 $ 206,603
Less Current Maturities 11,354 10,417
--------- ---------
$ 198,456 $ 196,186
========= =========
</TABLE>
Senior Credit Facility
In connection with the Acquisition, the Company entered into a senior credit
facility effective October 5, 1995 (the "Senior Credit Facility") with several
lending institutions. The Senior Credit Facility provided for an aggregate
principal amount of loans of up to $115,000 consisting of $90,000 in aggregate
principal amount of term loans (the "Term Loan Facility"), of which $40,000 was
prepaid in connection with the issuance of the Senior Notes, and a $25,000
revolving credit facility (the "Revolving Credit Facility").
The Term Loan Facility matures on September 30, 2000 and is due in quarterly
installments in increasing amounts, ranging from $2,917 to $4,792. The
Revolving Credit Facility matures on September 30, 2000. The Company is
required to reduce borrowings under the Revolving Credit Facility to $10,000 or
less for 30 consecutive days during the fiscal years ended September 30, 1996
and 1997, and to $7,500 or less for 30 consecutive days during each fiscal year
ended September 30 thereafter.
Indebtedness under the Senior Credit Facility bears interest at a rate based,
at the Company's option, upon (i) the Base Rate plus 1.50% with respect to Base
Rate Loans and (ii) the LIBOR Rate for one, two, three or six months plus 2.75%
with respect to LIBOR Rate Loans; provided, however, the interest rates are
subject to reductions in the event the Company meets certain performance
targets. The Term Loan Facility and the Revolving Loan Facility bore interest
at an average rate of 8.59% and 9.03%, respectively for the period from July 1,
1997 to September 30, 1997.
The Senior Credit Facility is secured by substantially all of the assets of the
Company and a pledge of all of the Company's common stock held by DPCAC.
Senior Notes
The Senior Notes bear interest at the rate of 10.625% per annum, payable
semiannually on March 1 and September 1 of each year. The Senior Notes are
redeemable, at the Company's option, in whole or in part, from time to time, on
or after March 1, 2001, initially at 105.313% of their principal amount and
thereafter at prices declining to 100% at March 1, 2004 until maturity, in each
case together with accrued and unpaid interest to the redemption date. In
addition, at any time on or prior to March 1, 1999, the Company may redeem up
to 35% of the aggregate principal amount of the Senior Notes originally issued
with the net cash proceeds of one or more public equity offerings, at 109.625%
of their principal amount, together with accrued and unpaid interest, if any,
to the redemption date; provided that at least $104,000 in principal amount of
Senior Notes remain outstanding immediately after any such redemption.
-6-
<PAGE> 8
Industrial Development Revenue Bonds, Ottawa County, Oklahoma
On March 12, 1997 the Company issued $6,000 of industrial development revenue
bonds (the "Bonds") through the Ottawa County Finance Authority in Miami,
Oklahoma. The Bonds bear interest at the rate of 7.25% payable on each
December 1 and June 1, commencing December 1, 1997. The Bonds are subject to
mandatory redemption prior to maturity, in part, at a redemption price of 100%
of the principal amount thereof, plus accrued interest to the redemption date,
in varying principal amounts on June 1 of each year from 2007 through 2017.
The Bonds are general secured obligations of the Company, ranking senior to all
subordinated indebtedness of the Company and on a parity in right of payment
with all other senior indebtedness of the Company. The Bonds are additionally
secured by a Mortgage and Security Agreement.
4. Senior Exchangeable Preferred Stock
The Company has authorized 3,000,000 shares of Senior Exchangeable Preferred
Stock of which the Company issued 1,200,000 shares in connection with the
financing of the Acquisition.
The Senior Exchangeable Preferred Stock has an initial liquidation preference
of $25.00 per share (aggregate initial liquidation preference is $30,000). The
Senior Exchangeable Preferred Stock was recorded at the net proceeds of $17,075
after deducting $12,925 paid to DPCAC for warrants of DPCAC which were issued
in conjunction with the Senior Exchangeable Preferred Stock. The excess of the
liquidation preference over the carrying value is being accreted quarterly over
a twelve year period ended September 30, 2007 by a direct reduction to retained
earnings.
Dividends on the Senior Exchangeable Preferred Stock are payable quarterly at
the rate of 14.25% per annum. Dividends on the Senior Exchangeable Preferred
Stock accrete to the liquidation value of the Senior Exchangeable Preferred
Stock and, at the option of the holders of a majority of the shares of Senior
Exchangeable Preferred Stock, may be paid through the issuance of additional
shares of Senior Exchangeable Preferred Stock on each dividend payment date
through September 30, 2000. The Company does not expect to pay dividends on
the Senior Exchangeable Preferred Stock in cash for any period prior to
September 30, 2000. Cumulative dividends on Senior Exchangeable Preferred
Stock that have not been paid at September 30, 1997 and 1996 are $9,635 and
$4,509, respectively and are included in the carrying amount of the Senior
Exchangeable Preferred Stock.
The Senior Exchangeable Preferred Stock will be exchangeable, in whole or in
part, at the option of the Company on any dividend payment date for 14.25%
Junior Subordinated Exchange Debentures.
The terms of the Senior Exchangeable Preferred Stock prohibit (i) the payment
of dividends on securities ranking on a parity with or junior to the Senior
Exchangeable Preferred Stock and (ii) redemption, repurchase or acquisition of
any Junior Securities with certain exceptions, in each case, unless full
cumulative dividends have been paid on the Senior Exchangeable Preferred Stock.
5. Contributed Capital
The Company received capital contributions of $850 from DPC Acquisition Corp.
during the nine month period ended September 30, 1997.
6. Income (Loss) Per Common Share
Income (loss) per common share is computed based upon the weighted average
number of common shares outstanding during each period. The income (loss) is
decreased (increased) by preferred stock dividends and the accretion of
preferred stock in calculating net income (loss) attributable to the common
shareholder.
-7-
<PAGE> 9
7. Inventories
The composition of inventories at the balance sheet dates was as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997 DECEMBER 31, 1996
<S> <C> <C>
Raw materials $ 8,144 $ 8,831
Packaging materials 10,602 10,608
Finished goods 12,385 11,298
------ ------
$ 31,131 $ 30,737
======== ========
</TABLE>
8. Commodity Hedges
The availability and price of agricultural commodities are subject to price
fluctuations which create price risk. It is the Company's intent to manage the
price risk created by market fluctuations by hedging portions of its primary
commodity products purchases, principally through exchange traded futures and
options contracts which are designated as hedges. The terms of such contracts
are generally less than one year. Settlement of positions are either through
financial settlement with the exchanges or via exchange for the physical
commodity in which case the Company delivers the contract against the
acquisition of the physical commodity.
The Company's policy does not permit speculative commodity trading. Futures and
options contracts are accounted for as hedges, and gains and losses are
recognized in the period realized as part of the cost of products sold and in
the cash flows. The deferred net futures and options position is reported on
the balance sheet as a current asset for net loss positions and as a deferred
credit for net gain positions. In addition to futures and options, the Company
also contracts for future physical procurement, in which case unrealized gains
and losses are deferred to the applicable accounting period. Typically,
maturities vary and do not exceed twelve months.
9. Commitments and Contingencies
The Company is party, in the ordinary course of business, to certain claims and
litigation. In management's opinion, the resolution of such matters is not
expected to have a material impact on the financial condition or results of
operations of the Company.
-8-
<PAGE> 10
DOANE PRODUCTS COMPANY AND SUBSIDIARY
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
On October 5, 1995, the Company was acquired as a result of the mergers of two
wholly-owned subsidiaries of DPC Acquisition Corp. and the Company's
predecessor, Doane Products Company, with the Company being the surviving
entity.
The Acquisition was financed in part through (i) the Senior Credit Facility
that provides term loan and revolving loan borrowings, (ii) the proceeds of the
issuance of the Senior Notes, and (iii) $30.0 million of 14.25% Senior
Exchangeable Preferred Stock due 2007.
The Acquisition has been accounted for using the purchase method of accounting.
The purchase price has been allocated to the assets and liabilities acquired
based upon their respective fair values. The results of operations of the
Company have been significantly affected by the impact of the financing of the
Acquisition, including interest expense on the indebtedness incurred under the
Senior Credit Facility and the Senior Notes.
Results of Operations
Net Sales. Doane Products Company derives substantially all of its revenue
from the sale of private label pet food products. Net sales in the three month
period ended September 30, 1997 increased 2.9% to $128.3 million from $124.7
million for the same period ended in 1996. Pet food net sales increased 1.0%
to $117.1 million in the three month period ended September 30, 1997 from
$115.9 million in the same period of 1996. This increase was principally
impacted by price increases implemented in late 1996 to mitigate increases in
raw material costs that occurred throughout 1996. Net sales of
non-manufactured products increased in the three month period ended September
30, 1997 to $8.7 million from $6.3 million for the same period ended in 1996
due to distribution of additional items. Engineering net sales decreased in
the three month period ended September 30, 1997 to $1.9 million from $2.4
million for the same period ended in 1996. Net sales for the nine month period
ended September 30, 1997 increased 12.1% to $399.0 million from $356.0 million
during the same period ended in 1996. Of this amount, 3.4% is attributable to
increased pet food volume, 5.7% due to price increases, and 3.0% results from
increased sales of non-manufactured items and engineering products.
Gross Profit. Gross profit for the three month period ended September 30,
1997 increased 37.4% to $17.0 million from $12.4 million for the same period in
1996. Gross profit as a percent of net sales for the three month period ended
September 30, 1997 increased to 13.2% from 9.9% for the same period in 1996.
Certain raw materials have decreased relative to 1996 sufficiently, which when
combined with the aforementioned price increases, has enabled the Company to
return to historical gross margin levels. In addition, sales of new products
and additional non-manufactured products represents 14.1% of the gross profit
gain. Gross profit for the nine month period ended September 30, 1997
increased 19.0% to $47.7 million from $40.0 million during the same period in
1996 for the reasons noted above.
Operating Expenses. Operating expenses increased to $8.4 million in the
three month period ended September 30, 1997 from $7.6 million for the same
period of 1996. This increase was primarily attributable to increases in
salaries and related fringe benefits. Operating expenses as a percent of net
sales increased to 6.6% from 6.1% for the same period in 1996. Operating
expenses increased to $25.4 million in the nine month period ended September
30, 1997 from $22.0 million for the same period in 1996 due to (i) increases in
salaries and related fringe benefits, and (ii) increases in sales promotions,
volume incentive discounts, and brokerage costs resulting from increased pet
food tons sold.
Income From Operations. Income from operations increased $3.9 million to $8.6
million in the three month period ended September 30, 1997 from $4.7 million in
the same period in 1996. This increase was primarily due to increased pet food
and new product/non-manufactured product margins. Income from operations
increased 22.7% to $22.2 million from $18.1 million for the same period in 1996
for the reasons noted above.
-9-
<PAGE> 11
Interest Expense. Interest expense remained constant at $5.6 million in the
three month periods ended September 30, 1997 and September 30, 1996 due
primarily to an increased usage of the Revolving Credit Facility which was
mitigated in part by a reduction of the Term Loan Facility. Interest expenses
in the nine month period ended September 30, 1997 decreased to $17.1 million
from $17.2 million for the same period in 1996.
Income Taxes. Income taxes for the three month period ended September 30, 1997
were $1.1 million compared to a tax benefit of $.2 million for the same period
in 1996 which is a direct result of the $3.9 million increase in operating
income. For the nine month period ended September 30, 1997 income tax expense
was $1.9 million compared to a $1.2 million tax benefit for the same period in
1996 primarily due to the write off of the $4.8 million nonrecurring finance
costs in 1996.
Liquidity and Capital Resources
The Company had working capital of $29.1 million at September 30, 1997. For
the nine month period ended September 30, 1997, net cash provided by operating
activities increased to $9.9 million from $8.3 million for the same period
during 1996, which was caused by an increase in operating profit (net of the
effective tax rate) of $1.8 million. An increase of $4.1 million in cash used
for working capital in 1997 vs.1996 was offset by cash provided from non-cash
charges, including depreciation, amortization, and deferred taxes and credits.
On February 6, 1997 the Company purchased a pet food manufacturing and
warehouse facility at Everson, Pennsylvania for a total cost of $1.7 million,
which includes the cost for renovation and additional equipment. In addition,
the Company has financed a new manufacturing and warehouse facility through the
issuance on March 12, 1997 of $6.0 million of industrial development revenue
bonds, which are secured by a mortgage lien and security interest on certain
real and personal property. The revenue bonds have been recorded at $4.9
million at September 30, 1997, which is net of undrawn amounts, and
construction and reserve funds. This facility commenced operations August 12,
1997.
As part of the Senior Credit Facility, the Company maintains a $25.0 million
revolving credit facility with banks which provides adequate liquidity to meet
the Company's operational needs. At September 30, 1997 the Company had
borrowing capacity in the amount of $16.6 million under the Revolving Credit
Facility, which is net of $.8 million for outstanding letters of credit.
Long term debt outstanding at September 30, 1997 consisted primarily of $160.0
million Senior Notes, the Term Loan Facility in the amount of $37.3 million,
the Revolving Credit Facility in the amount of $7.6 million and industrial
development revenue bonds in the net amount of $4.9 million.
It is expected that existing manufacturing facilities, notwithstanding the
recent capital expenditures on new and existing facilities, will not be
sufficient to meet the Company's anticipated volume growth for the next several
years. Accordingly, the Company anticipates that additional facilities will be
necessary in order to support continued growth of the Company's business. The
Company has continued to examine alternatives for expanding its business either
through construction of additional manufacturing capacity or acquisition of
manufacturing assets. Such potential acquisitions could include acquisitions
of operating companies. The Company intends to finance such expansions or
acquisitions with borrowings under existing credit facilities, or expanded
credit facilities, or the issuance of additional equity, depending on the size
of the proposed expansions or acquisitions.
As a result of the Acquisition and the sale of the Senior Notes, the Company is
highly leveraged and has significantly increased cash requirements for debt
service relating to the Senior Credit Facility and the Senior Notes. The
Company's ability to borrow is limited by the Senior Credit Facility and the
limitations on the incurrence of indebtedness under the Senior Note Indenture.
The Company anticipates that its operating cash flow, together with amounts
available to it under the Senior Credit Facility and new industrial development
revenue bonds, will be sufficient to finance working capital requirements, debt
service requirements and anticipated capital expenditures during the 1997
calendar year.
-10-
<PAGE> 12
DOANE PRODUCTS COMPANY AND SUBSIDIARY
PART II
Item 5. Personnel
Douglas J. Cahill joined the Company on September 2, 1997 as Chief
Operating Officer. Prior to joining the Company, Mr. Cahill served as
President of the Winchester Division of Olin Corporation.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Index
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
-11-
<PAGE> 13
DOANE PRODUCTS COMPANY AND SUBSIDIARY
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.
DOANE PRODUCTS COMPANY
November 13, 1997 By
------------------------------------
Thomas R. Heidenthal
Senior Vice President and
Chief Financial Officer
-12-
<PAGE> 14
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Doane
Products Company's unaudited financial statements for the nine months ended
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 56,721
<ALLOWANCES> 0
<INVENTORY> 31,131
<CURRENT-ASSETS> 90,988
<PP&E> 114,015
<DEPRECIATION> 13,490
<TOTAL-ASSETS> 328,465
<CURRENT-LIABILITIES> 61,913
<BONDS> 160,000
0
28,864
<COMMON> 0
<OTHER-SE> 41,675
<TOTAL-LIABILITY-AND-EQUITY> 328,465
<SALES> 399,044
<TOTAL-REVENUES> 399,044
<CGS> 351,394
<TOTAL-COSTS> 376,825
<OTHER-EXPENSES> 25,431
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,090
<INCOME-PRETAX> 5,298
<INCOME-TAX> 1,917
<INCOME-CONTINUING> 3,381
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,381
<EPS-PRIMARY> (1,323)
<EPS-DILUTED> 0
</TABLE>
