SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended January 31, 1999
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 33-99834
--------------------
DAKOTA GROWERS PASTA COMPANY
(Exact name of registrant as specified in its charter)
NORTH DAKOTA
(State or other jurisdiction of
incorporation or organization)
ONE PASTA AVENUE
CARRINGTON, NORTH DAKOTA
(Address of principal executive offices)
45-0423511
(IRS Employer Identification Number)
58421
(Zip Code)
(701) 652-2855
(Registrant's telephone number, including area code)
NOT APPLICABLE
(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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes /X/ No
The number of shares outstanding of the issuer's classes of common
stock was 1,111 shares of membership stock, par value $125.00, and 10,980,841
shares of equity stock, par value $2.50, outstanding as of March 17, 1999.
<PAGE>
FINANCIAL STATEMENTS
DAKOTA GROWERS PASTA COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
January 31, July 31,
1999 1998
----------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents ...................... $11,147 $ 182
Restricted cash ................................ 2,592
Trade accounts receivable, less allowance for
cash discounts and doubtful accounts of
$82 and $174.................................. 9,364 12,404
Other receivables .............................. 1,207 742
----------- -----------
Total receivables .............................. 10,571 13,146
Inventories .................................... 27,727 21,935
Prepaid expenses ............................... 3,560 3,915
----------- -----------
Total current assets ........................ 55,597 39,178
Property and equipment
In service ..................................... 95,951 89,030
Construction in process ........................ 7,495 5,463
Accumulated depreciation ....................... (16,744) (13,518)
----------- -----------
Net property and equipment .................. 86,702 80,975
Investment in St. Paul Bank for Cooperatives ...... 2,086 2,086
Other assets ...................................... 2,062 2,298
----------- -----------
Total assets ................................ $146,447 $124,537
=========== ===========
The accompanying notes are an integral part of these financial statements.
2<PAGE>
DAKOTA GROWERS PASTA COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
January 31, July 31,
1999 1998
----------- -----------
(unaudited)
LIABILITIES AND MEMBERS' INVESTMENT
Current liabilities:
Notes payable and current portion of long-term
debt ......................................... $ 3,768 $ 4,033
Accounts payable ............................... 8,669 5,748
Excess outstanding checks over cash on deposit . 2,336
Accrued grower payments ........................ 479 1,354
Accrued liabilities ............................ 6,848 2,894
----------- -----------
Total current liabilities ................... 19,764 16,365
Commitments and contingencies .....................
Long-term debt, net of current portion ............ 63,282 66,056
Deferred income taxes ............................. 4,900 4,900
Other long-term liabilities ....................... 88 88
----------- -----------
Total liabilities ........................... 68,270 87,409
----------- -----------
Preferred stock:
Redeemable preferred stock:
Series A, 6%, cumulative $100 par value,
issued 500 and 1,000 shares, respectively .. 50 100
Series B, 2% non-cumulative, $100 par value,
issued 525 and 1,525, respectively ......... 53 153
----------- -----------
Total preferred stock ....................... 103 253
----------- -----------
Members' investment:
Convertible preferred stock:
Series D, 6% non-cumulative, $100 par value,
issued 0 and 23,038 shares, respectively ..... 2,304
Membership stock, $125 par value, issued 1,109
and 1,101 shares, respectively ............... 139 137
Equity stock, $2.50 par value, issued 7,356,059
shares ...................................... 18,390 18,390
Additional paid in capital ..................... 3,813 4,101
Equity stock subscriptions received, net ....... 27,027
Accumulated allocated earnings ................. 4,895 2,914
Accumulated unallocated earnings ............... 4,046 9,029
----------- -----------
Total members' investment ................... 58,310 36,875
----------- -----------
Total liabilities and members' investment ... $146,447 $124,537
=========== ===========
The accompanying notes are an integral part of these financial statements.
3<PAGE>
DAKOTA GROWERS PASTA COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
Three Months Ended
January 31,
1999 1998
----------- -----------
(unaudited)
Net revenues (net of discounts and allowances of
$5,073 and $2,332 respectively) ................ $32,016 $28,085
Cost of product sold .............................. 26,044 23,567
----------- -----------
Gross proceeds .............................. 5,972 4,518
Marketing, general and administrative expenses .... 2,344 1,543
----------- -----------
Operating proceeds .......................... 3,628 2,975
Other income (expense):
Interest and other income ...................... 43 16
Interest expense, net .......................... ( 1,271) ( 641)
----------- -----------
Income before income taxes ........................ 2,400 2,350
Income taxes expense ..............................
----------- -----------
Net income from patronage and non-patronage
business ....................................... 2,400 2,350
Dividends on preferred stock ...................... 3
----------- -----------
Earnings from patronage and non-patronage business
available for members ........................... $ 2,400 $ 2,347
=========== ===========
Average equity shares outstanding ................. 7,356 7,356
Fully diluted average equity shares outstanding ... 7,701 7,423
Earnings from patronage and non-patronage
business per average equity share outstanding:
Basic .......................................... $ .33 $ .32
=========== ===========
Fully Diluted .................................. $ .31 $ .32
=========== ===========
The accompanying notes are an integral part of these financial statements.
4<PAGE>
DAKOTA GROWERS PASTA COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
Six Months Ended
January 31,
1999 1998
----------- -----------
(unaudited)
Net revenues (net of discounts and allowances of
$9,523 and $4,366 respectively) ................ $63,524 $50,114
Cost of product sold .............................. 51,922 41,120
----------- -----------
Gross proceeds .............................. 11,602 8,994
Marketing, general and administrative expenses .... 4,711 1,462
----------- -----------
Operating proceeds .......................... 6,891 7,532
Other income (expense):
Interest and other income ...................... 45 52
Interest expense, net .......................... ( 2,535) ( 1,197)
----------- -----------
Income before income taxes ........................ 4,401 6,387
Income tax expense ................................
----------- -----------
Net income from patronage and non-patronage
business ....................................... 4,401 6,387
Dividends on preferred stock ...................... 65 8
----------- -----------
Earnings from patronage and non-patronage business
available for members ........................... $ 4,336 $ 6,379
=========== ===========
Average equity shares outstanding ................. 7,356 7,356
Fully diluted average equity shares outstanding ... 7,695 7,417
Earnings from patronage and non-patronage
business per average equity share outstanding:
Basic .......................................... $ .59 $ .87
=========== ===========
Fully Diluted .................................. $ .57 $ .86
=========== ===========
The accompanying notes are an integral part of these financial statements.
5<PAGE>
DAKOTA GROWERS PASTA COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six Months Ended
January 31,
1999 1998
----------- -----------
(unaudited)
Cash flows from operating activities:
Net income ..................................... $ 4,401 $ 6,387
Add (deduct) non-cash items:
Depreciation and amortization ................ 3,694 1,886
Non-cash portion of patronage dividend ....... ( 113) ( 128)
Interest capitalized ......................... ( 147) ( 92)
Loss on retirement of assets .................
Changes in assets and liabilities:
Trade receivables ............................ 3,040 (1,433)
Accounts receivable from growers ............. ( 149)
Other receivables ............................ ( 465) 26
Inventories .................................. (5,792) (6,670)
Prepaid expenses and other assets ............ 355 (2,198)
Accounts payable ............................. 2,921 1,385
Excess outstanding checks over cash on deposit (2,336) 886
Grower payables .............................. ( 875) ( 117)
Other accrued liabilities .................... 1,362 ( 342)
----------- -----------
Net cash from (used in) operating activities 6,045 ( 559)
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment ............ (8,806) (3,805)
Lease improvements, packaging development and
purchase of other assets ..................... ( 119) ( 191)
---------- -----------
Net cash used in investing activities ........ (8,925) (3,996)
Cash flows from financing activities:
Net issuance of short-term debt ................ 2,935
Issuance of long-term debt ..................... 6,500
Payments on long-term debt ..................... (3,039) ( 27)
Preferred stock retired ........................ ( 150) ( 100)
Dividends on preferred stock ................... ( 65) ( 8)
Membership stock issued (net)................... 2
Proceeds of stock offering ..................... 27,027
Preferred stock retirement commitment .......... (2,592)
Patronage distributions ........................ (7,338) (4,745)
----------- -----------
Net cash from financing activities .......... 13,845 4,555
----------- -----------
Net increase (decrease) in cash and cash
equivalents ..................................... 10,965
Cash and cash equivalents, beginning of period .... 182 5
----------- -----------
Cash and cash equivalents, end of period .......... $11,147 $ 5
=========== ===========
The accompanying notes are an integral part of these financial statements.
6<PAGE>
DAKOTA GROWERS PASTA COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
The following notes should be read in conjunction with the notes to financial
statements for the year ended July 31, 1998 as filed in the Company's Form 10-K.
NOTE 1. ORGANIZATION - Dakota Growers Pasta Company ("the Company" or "the
Cooperative") is organized as a farmers' cooperative for purposes of
manufacturing food for human consumption from durum and other grain products.
Net proceeds are allocated to patrons who are members on the basis of their
participation in the cooperative.
The ownership of membership stock, which signifies membership in the
Cooperative, is restricted to producers of agricultural products. The ownership
of equity stock is restricted to members of the Cooperative. Preferred stock
may be held by persons who are not members of the Cooperative.
NOTE 2. FINANCIAL STATEMENT PRESENTATION - The financial information
included herein as at January 31, 1999, and for the six and three month periods
ended January 31, 1999 and 1998, is unaudited and, in the opinion of the
Company, reflects all adjustments (which include only normal recurring
accruals) necessary for a fair presentation of the financial position as of
those dates and the results of operations for those periods. The information in
the Balance Sheet at July 31, 1998, was derived from the Company's audited
annual report for 1999. Reclassifications may have been made consistent with
current presentation. Such reclassifications have no effect of the net result
of operations.
The financial information included herein as of January 31, 1999 and July 31,
1998 and for the six and three month periods ended January 31, 1999 include the
consolidated balances and results of operations of Dakota Growers and its
wholly-owned subsidiary, which was acquired on February 23, 1998 and disclosed
in NOTE 3. The Company has eliminated intercompany balances, and intercompany
sales and purchases, from the consolidated balances and results of operations.
NOTE 3. ACQUISITION - On February 23, 1998, Dakota Growers Pasta Company
acquired 100% of the outstanding stock of Primo Piatto, Inc., a Minnesota-based
pasta manufacturer, for cash, the assumption of debt and the issuance of
convertible preferred stock. The Company has accounted for this acquisition by
the purchase method, thus, the results of operations for the three and six month
periods ended January 31, 1998 do not include any of the results of Primo
Piatto, Inc. prior to the date of acquisition. The details of the acquisition
are more fully described in the Company's Form 10-K for the year ended July 31,
1998.
NOTE 4. INVENTORIES - Inventories of $27,727,000 at January 31, 1999 include
raw materials of $6,149,000 and finished goods and by-products $21,578,000. At
July 31, 1998, inventories of $21,935,000 included raw materials of $4,120,000
and finished goods and by-products of $17,815,000.
NOTE 5. PATRONAGE BUSINESS - The Company's business is conducted on a
cooperative basis. The Company calculates income from patronage sources based
on income derived from bushels of durum delivered by members. Non-patronage
income is derived from the resale of spring wheat flour purchased from non-
members and blended with other flours, the resale of pasta purchased from non-
members, the resale of semolina purchased from non-members, interest income on
invested funds and any income taxes assessed on non-member business. For the
7
six months ended January 31, 1999 and 1998, net income allocable to patronage
business was $4,336,000 and $6,790,000, respectively.
NOTE 6. INCOME TAXES - The Company is a non-exempt cooperative as defined by
Section 1381 (a)(2) of the Internal Revenue Code. Accordingly, net margins from
business transacted with member patrons which are allocated, qualified and paid
as prescribed in Section 1382 of the code will be taxable to the members and not
to the Company. Net margins and member allocations are determined on the basis
of accounting used for financial reporting purposes. To the extent that net
margins are not allocated and paid as stated above or arise from business done
with non-members, the Company shall have taxable income subject to corporate
income tax rates. Cooperative organizations have 8 1/2 months after their
fiscal year-end to make such allocations in the form of written notices of
allocation or cash.
The Company has not established any provision for income taxes for the six
months ended January 31, 1999.
NOTE 7. EARNINGS AND DIVIDENDS - The Company allocates its patronage earnings
and patronage distributions based on patronage business (bushels of durum
delivered, which approximates one bushel of durum per equity share). For
presentation purposes, it has calculated basic net income per share by dividing
earnings from patronage and non-patronage business available for members (net
income less preferred dividends) by the weighted average number of equity shares
effective and outstanding during the period.
The Company has outstanding convertible preferred stock and stock options for
convertible preferred stock. Fully diluted earnings per share have been
calculated for the assumed conversion of these dilutive securities. Because the
Company's stock is only traded in a small secondary market through private
transactions, the Company has assumed the proceeds from the exercise of stock
options would reduce debt and, thus, interest expense.
A qualified patronage allocation of $7,338,000, $1.00 per bushel delivered by
members, was authorized by the Board of Directors in October 1998 and
distributed in November 1998. Additionally, $1,981,000, $.27 per bushel, was
allocated to the members but neither distributed nor qualified for income tax
purposes.
NOTE 8. STOCK OFFERING - As of January 31, 1999, the Company has received
subscriptions under Pools 1 and 2 of its offering for 3,621,782 equity shares.
The Company has recorded the proceeds from these subscriptions, less $136,000 of
costs of the offering, as Equity Stock Subscriptions Received, in the Members'
investment section of its Balance Sheet. The shares will be effective to
participate in the Company's patronage business on April 1, 1999.
NOTE 9. CONVERTIBLE PREFERRED STOCK - As of January 31, 1999 the Company has
recorded the conversion of its Series D preferred stock into equity stock, and
recorded an accrued liability in the amount of $2,592,000 for the payment of the
proceeds from the stock offering due the selling shareholders. Such liability
was paid on March 1, 1999. See the Company's Form S-1/A dated November 19,
1998, filed with the Securities and Exchange Commission, for details of the
agreement with the selling shareholders.
8<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Forward-Looking Statements
The following discussion contains forward-looking statements. Such
statements are based on assumptions by the Company's management, as of the date
of this Quarterly Report, and are subject to risks and uncertainties, including
those discussed in the Company's 1998 Form 10-K under "Risk Factors", that could
cause actual results to differ materially from those anticipated. The Company
cautions readers not to place undue reliance on such forward-looking statements.
The Company will not update any forward-looking statements in this Quarterly
Report to reflect future events or developments.
Results of Operations
Comparison of the Three Months ended January 31, 1999 and 1998
REVENUES - Total revenues increased $3.9 million, or 14%, to $32.0 million for
the quarter ended January 31, 1999. Pasta sales volumes increased by 60%. Most
of the sales volume increase was due to new private label retail customers, a
segment where the Company estimates it now has an industry-leading market share
of 37%. Additional volume increases were the result of volume expansions and
acquisitions by several of the Company's existing private label retail and
foodservice customers. Lower average prices for pasta due to the pass through
of lower durum prices limited the impact of the volume increase. The Company
anticipates continued volume growth, although at a lesser pace, in all segments.
The Company will continue to aggressively pursue new opportunities in the
retail, foodservice and ingredient segments, and anticipates pursuing
opportunities in the government bid segment to fill short-term capacity
availabilities. Average prices are anticipated to continue to decline due to
the impact of lower durum prices.
Revenues from milling by-products sales declined as the Company utilized
almost 100% of its semolina production for its internal use. Reduced demand in
the livestock feeding industry and increased competition from other sources of
feed also had a negative impact on the comparative quarterly revenues.
COST OF PRODUCT SOLD - Cost of product sold increased 11% to $26.0 million.
The $2.5 million increase in cost of product sold was due to the significant
increase in pasta volumes sold, toll milling a portion of the Company's members'
durum to meet current semolina requirements for pasta manufacturing, and
increased depreciation and fixed operating costs associated with the operation
of the Minnesota facilities acquired in February 1998. These increases were
partially offset by a significant reduction in outside purchases of pasta and
durum costs which were on average 28% per bushel lower than last year. Gross
margin as a percentage of revenues increaased to 19% from 16%.
MARKETING, GENERAL AND ADMINISTRATIVE EXPENSE (MG&A) - MG&A expense increased
$0.8 million, or 52%, over last year. Most of the increase was due to the
enhancement of the Company's sales and sales support efforts. The enhancement
of the Company's information technology department and infrastructure to focus
on the Year 2000 issue, electronic data interchange and the increasing business
requirements also added to the change. As a percentage of sales, MG&A increased
from 5.5% last year to 7.3% this year.
INTEREST EXPENSE - Interest expense increased $0.6 million, primarily due to
the debt issued for the acquisition of the Minnesota facilities. Debt
restructuring in July and August 1998 have reduced the overall average
9
interest rates.
NET INCOME - Net income for the quarter was up $46,000, essentially unchanged
from last year.
Comparison of the Six Months ended January 31, 1999 and 1998
REVENUES - Total revenues increased $12.6 million, or 25%. Pasta sales
volumes increased by 54% due to the addition of new private label retail
customers and volume expansions and acquisitions by several of the Company's
existing private label retail and foodservice customers. The impact of the
sales increase was partially offset by lower prices for pasta due to the pass
through of lower durum prices, especially beginning the second quarter of fiscal
year 1999.
Revenues from milling by-products sales declined as the Company utilized
almost 100% of its semolina production for its internal use, while lower prices
for by-products due to reduced demand in the livestock feeding industry and
increased competition from other sources of feed also reduced revenues for the
period.
COST OF PRODUCT SOLD - Cost of product sold increased $10.8 million, or 26%,
to $51.9 million. The impact of the increase in volumes sold was $10.8
million. Additional increases due to the depreciation, administration and fixed
operating costs associated with the Minnesota facilities were offset by a
reduction inaverage durum costs per bushel. Gross margin as a percentage of
revenues declined from 19% last year to 18% for the six months ended January 31,
1999 due to the extraordinarily good first quarter of fiscal year 1998.
MARKETING, GENERAL AND ADMINISTRATIVE EXPENSE (MG&A) - MG&A expense increased
$2.4 million, more that double last year. Most of the increase was due to the
enhancement of the Company's sales and sales support efforts. The enhancement
of the Company's information technology department and infrastructure to focus
on the Year 2000 issue, electronic data interchange and the increasing business
requirements also added to the change. As a percentage of sales, MG&A increased
from 4.5% last year to 7.4% this year.
INTEREST EXPENSE - Interest expense increased $1.3 million, primarily due to
the debt issued for the acquisition of the Minnesota facilities. Debt
restructuring in July and August 1998 have reducedd the overall average interest
rates.
NET INCOME - Net income for the six months ended January 31, 1999 declined
$2.0 million, with all of the variance due to the results achieved in the
quarter ended October 31, 1997.
Liquidity and Capital Resources
The opening line in Dakota Growers' Mission Statement reads "Dakota Growers
Pasta Company was founded on the dream to provide farmers with the means to
secure a future for themselves and their families." In keeping true to this
statement, the Company attempts to return as much of its earnings as possible
to its members annually, balanced with financial responsibility for ongoing
obligations and future growth opportunities. The Company's liquidity
requirements include the construction or acquisition of manufacturing
facilities and equipment and the expansion of working capital to meet its
growth requirements, as well as providing a fair return to its members. The
Company meets these liquidity requirements from operations, short-term
borrowings under its line of credit, sales of equities and outside debt
financing.
10
The Company utilizes outside financing on a short-term basis to fund
operations and expansion projects until permanent financing is issued. The
Company's short-term line of credit is $15.0 million, none of which is
outstanding as of January 31, 1999.
The Company's long-term financing is provided through various secured term
loans and secured notes. As of January 31, 1999, the Company is in compliance
with the covenants of these agreements.
Operations generated $6.0 million in cash for the six months ended January
31, 1999, up from the $0.6 million cash used in operations for the same period
last year. While net income declined by $2.0 million, earnings before
interest, taxes, depreciation and amortization (EBITDA), increased from $9.4
million to $10.6 million. Working capital, excluding cash, was essentially
unchanged for the six month period, while it increased significantly last year
as inventories, receivables and prepaids all rose with the increased sales.
Cash used in investing activities totaled $8.9 million for the six months
ended January 31, 1999. This is an increase of $4.9 million from last year,
primarily due to expenditures for the Company's mill expansion project.
Cash from financing activities totaled $13.8 million. As of January 31,
1999, the Company has received $24.4 million in subscriptions for new equity
stock, net of expenses of the offering and proceeds due the selling
shareholders. The proceeds from this offering will be used to complete the
mill expansion and capital projects to reduce operating costs. The balance of
the proceeds will be used to reduce short term debt and to enhance the
Company's working capital position. In November 1998, the Company paid its
members $7.3 million in patronage distributions.
The Company has current commitments for $6.2 million in raw material
purchcases, primarily durum purchase commitments from its members. The
Company anticipates capital expenditures of $6.0 million through the end of
the fiscal year and into the early months of fiscal year 2000 for projects
currently scheduled, primarily for the mill expansion. The mill is
anticipated to be operating by early April 1999. The Company currently has no
other material commitments.
Management believes that net cash currently available and to be provided by
operating activities, along with its available line of credit, will be
sufficient to meet the Company's expected capital and liquidity requirements
for the forseeable future.
Year 2000
Many computer and other software and hardware systems currently are not, or
will not be, able to read, calculate or output correctly using dates after
1999, and such systems will require significant modification in order to be
year 2000 compliant. This issue may have a material adverse effect on the
Company's operations and financial performance because computer and other
systems are integral parts of the Company's, and the Company's suppliers' and
customers', manufacturing and distribution activities, as well as the
Company's accounting, sales and other information systems. In the event of
failure or miscalculation, the Company will have to divert financial resources
and personnel to address this issue.
The Company is in the process of reviewing its computer and other hardware
and software systems, and has begun upgrading systems that are identified as
not being year 2000 compliant. The ERP system (software and hardware), along
with the critical pasta production equipment has been tested, and either
replaced or modified to be year 2000 compliant at this time. The Company
anticipates all existing critical information and processing systems will be
11
year 2000 compliant by the end of its fiscal year ending July 1999. The
Company has alternate plans in the event any critical system upgrading that is
necessary is not completed on time. The Company believes these alternate
plans are sufficient to meet our internal needs.
Although the Company is not aware of any material operational impediments
associated with making any necessary upgrades to its computer and other
hardware and software systems to be year 2000 compliant, it cannot make any
assurance that the upgrade of its computer systems will be free of defects or
that its alternate plans will be sufficient to meet its needs. If such risks
materialize, the Company could experience material adverse consequences to its
operations and financial performance, substantial costs, or both.
The Company has contacted its significant suppliers and customers as part
of its year 2000 compliance action plan, to identify any potential year 2000
compliance issues with them. The Company is currently unable to anticipate
the magnitude of the operational or financial impact or year 2000 compliance
issues with its suppliers and customers.
The Company expects to incur up to $500,000 during calendar year 1999 to
resolve its year 2000 compliance issues. All expenses incurred in connection
with becoming year 2000 compliant will be expensed as incurred, other than
acquisitions of new software or hardware, which will be capitalized.
12<PAGE>
Part II
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Members' Meeting was held January 9, 1999. At Annual
District Meetings held in December 1998, Mr. Allyn K. Hart, Mr. Michael E.
Warner and Mr. Curtis R. Trulson were reelected to their positions as members
of the Company's Board of Directors.
The terms of office of the remaining members of the Board of Directors
continue for the terms for which they were elected in prior years as follows:
Mr. John S. Dalrymple III, Mr. James F. Link and Mr. John D. Rice Jr. - one
year remaining; Mr. Jeffrey O. Topp, Mr. Eugene J. Nicholas and Mr. Roger A.
Kenner - two years remaining.
Item 6. Exhibits and Reports on Form 10-Q
(a) Exhibits
EXHIBIT
NO. DESCRIPTION
------- -----------
27 Financial Data Schedule, which is submitted electronically
to the Securities and Exchange Commission for information
only and not filed.
(b) Reports on Form 8-K
None
13<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.
Dakota Growers Pasta Company
Date: March 17, 1999 /s/ Timothy J. Dodd
---------------- ----------------------------------
Timothy J. Dodd (President and
General Manager, and Principal
Executive Officer)
Date: March 17, 1999 /s/ Thomas P. Friezen
---------------- ----------------------------------
Thomas P. Friezen (Vice President,
Finance and Principal Financial
and Accounting Officer)
14<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet and statements of income filed as part of the quarterly report on form
10-q and is qualified in its entirety by reference to such quarterly report on
form 10-q
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> JUL-31-1999 JUL-31-1999
<PERIOD-END> JAN-31-1999 JAN-31-1999
<CASH> 13,739 13,739
<SECURITIES> 0 0
<RECEIVABLES> 10,571 10,571
<ALLOWANCES> 82 82
<INVENTORY> 27,727 27,727
<CURRENT-ASSETS> 55,597 55,597
<PP&E> 103,446 103,446
<DEPRECIATION> 16,744 16,744
<TOTAL-ASSETS> 146,447 146,447
<CURRENT-LIABILITIES> 19,764 19,764
<BONDS> 63,282 63,282
50 50
53 53
<COMMON> 18,390 18,390
<OTHER-SE> 39,920 39,920
<TOTAL-LIABILITY-AND-EQUITY> 146,447 146,477
<SALES> 32,016 63,524
<TOTAL-REVENUES> 32,016 63,524
<CGS> 26,044 51,922
<TOTAL-COSTS> 26,044 51,922
<OTHER-EXPENSES> 2,344 4,711
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,271 2,535
<INCOME-PRETAX> 2,400 4,401
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 2,400 4,401
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,400 4,401
<EPS-PRIMARY> .33 .59
<EPS-DILUTED> .31 .57
</TABLE>
