<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1998
Commission File Number 1-12599
VITA FOOD PRODUCTS, INC.
-----------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
NEVADA #36-3171548
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2222 WEST LAKE STREET
CHICAGO, ILLINOIS 60612 (312) 738-4500
- ----------------------- -------------------------
(Address of principal Issuer's telephone number
executive offices)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
----- -----
Number of shares outstanding of Issuer's common stock, par value $.01 per
share, as of August 7, 1998 is 3,702,036.
Transitional Small Business Disclosure Format: Yes No X
----- -----
<PAGE> 2
VITA FOOD PRODUCTS, INC.
REPORT ON FORM 10-QSB FOR THE THREE MONTHS ENDED JUNE 30, 1998
INDEX
<TABLE>
<CAPTION>
I. FINANCIAL INFORMATION:
<S> <C>
Item 1. Financial Statements (unaudited)
Balance Sheets ........................................... 3
Statements of Operations.................................. 5
Statements of Shareholders' Equity........................ 6
Statements of Cash Flows ................................. 7
Notes to Financial Statements ............................ 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ...................... 8
II. OTHER INFORMATION ............................................... 10
</TABLE>
2
<PAGE> 3
VITA FOOD PRODUCTS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
=========================================================================================================
JUNE 30, DECEMBER 31,
1998 1997
(UNAUDITED) (AUDITED)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $49,453 $107,933
Accounts receivable-trade, net of allowance for discounts,
returns, and doubtful accounts of $225,904 in 1998 and 1,907,451 3,560,519
$322,000 in 1997
Federal income tax receivable 250,000 250,000
Inventories
Raw material and supplies 2,483,467 2,650,805
Work in process 26,614 135,157
Finished goods 1,752,273 1,516,246
Prepaid expenses and other current assets 296,629 262,533
Deferred income taxes 438,426 200,000
- ---------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 7,204,313 8,683,193
- ---------------------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Building and Improvements 1,399,077 1,399,077
Machinery and Office Equipment 4,570,577 4,473,138
- ---------------------------------------------------------------------------------------------------------
5,969,654 5,872,215
Less accumulated depreciation and amortization (3,825,958) (3,657,788)
- ---------------------------------------------------------------------------------------------------------
2,143,696 2,214,427
Land 35,000 35,000
- ---------------------------------------------------------------------------------------------------------
NET PROPERTY, PLANT & EQUIPMENT 2,178,696 2,249,427
- ---------------------------------------------------------------------------------------------------------
OTHER ASSETS 331,390 215,444
- ---------------------------------------------------------------------------------------------------------
$9,714,399 $11,148,064
- ---------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 4
VITA FOOD PRODUCTS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
======================================================================================================
JUNE 30, DECEMBER 31,
1998 1997
(UNAUDITED) (AUDITED)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term obligations $342,858 $322,076
Accounts payable 1,047,585 1,488,241
Accrued other expenses 1,239,024 1,566,182
TOTAL CURRENT LIABILITIES 2,629,467 3,376,499
- ------------------------------------------------------------------------------------------------------
LONG-TERM OBLIGATIONS, LESS CURRENT MATURITIES 4,815,995 4,953,242
- ------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value, authorized 1,000,000
shares; none issued
Common stock, $.01 par value; authorized 10,000,000 shares;
issued and outstanding 3,702,036 shares in 1998 and 37,020 37,000
3,700,000 shares in 1997
Additional paid in capital 3,351,610 3,348,273
Retained Earnings (1,119,693) (566,950)
- ------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 2,268,937 2,818,323
- ------------------------------------------------------------------------------------------------------
$9,714,399 $11,148,064
- ------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 5
VITA FOOD PRODUCTS, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
=====================================================================================================================
FOR THREE MONTHS ENDED FOR SIX MONTHS ENDED
--------------------------------------------------------
JUNE 30, JUNE 30,
1998 1997 1998 1997
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES 4,075,332 4,012,988 9,564,198 8,734,564
COST OF GOODS SOLD 3,141,252 2,885,065 7,158,802 6,373,023
- ---------------------------------------------------------------------------------------------------------------------
Gross Margin 934,080 1,127,923 2,435,396 2,361,541
- ---------------------------------------------------------------------------------------------------------------------
SELLING, MARKETING AND
ADMINISTRATIVE EXPENSES
Selling and Marketing 992,154 964,417 2,080,685 2,015,016
Administrative 489,987 469,859 948,996 891,496
- ---------------------------------------------------------------------------------------------------------------------
1,482,141 1,434,276 3,029,681 2,906,512
- ---------------------------------------------------------------------------------------------------------------------
Operating Profit (Loss) (548,061) (306,353) (594,285) (544,971)
- ---------------------------------------------------------------------------------------------------------------------
OTHER (INCOME) EXPENSE
- ---------------------------------------------------------------------------------------------------------------------
Interest 101,415 94,263 196,884 166,269
- ---------------------------------------------------------------------------------------------------------------------
101,415 94,263 196,884 166,269
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) before Income Tax Expense (benefit) (649,476) (400,616) (791,169) (711,240)
INCOME TAX BENEFIT (186,000) (181,728) (238,426) (330,159)
- ---------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) (463,476) ($218,888) ($552,743) (381,081)
- ---------------------------------------------------------------------------------------------------------------------
BASIC AND DILUTED EARNINGS (LOSS) PER (0.13) (0.06) (0.15) (0.10)
SHARE
- ---------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 3,700,000 3,700,000 3,700,000 3,633,700
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 6
VITA FOOD PRODUCTS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
==========================================================================================================================
COMMON STOCK ADDITIONAL
---------------------- PAID-IN RETAINED
AMOUNT SHARES AMOUNT CAPITAL EARNINGS TOTAL
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, at January 1, 1997 2,950,000 $29,500 $ 196,000 $360,635 $586,135
Net proceeds from initial public offering 750,000 $ 7,500 $3,152,273 - $3,159,773
Net income (loss) - - - ($381,081) ($381,081)
- --------------------------------------------------------------------------------------------------------------------------
Balance, at June 30, 1997 3,700,000 $37,000 $3,348,273 ($20,446) $3,364,827
- --------------------------------------------------------------------------------------------------------------------------
Balance, at January 1, 1998 3,700,000 $37,000 $3,348,273 ($566,950) $2,818,323
Proceeds from stock purchase and
stock option plans 2,036 $ 20 $ 3,337 $3,357
Net income (loss) ($552,743) ($552,743)
- --------------------------------------------------------------------------------------------------------------------------
Balance, at June 30, 1998 3,702,036 $37,020 $3,351,610 $1,119,693 $2,268,937
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 7
VITA FOOD PRODUCTS, INC.
Statements of Cash Flows
<TABLE>
<CAPTION>
==========================================================================================================
FOR SIX MONTHS ENDED
------------------------------
JUNE 30, JUNE 30,
1998 1997
(UNAUDITED) (UNAUDITED)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) (552,743) (381,081)
Adjustments to reconcile Net Income (Loss) to
net cash provided by (used in) operating activities
Depreciation and amortization 168,796 128,922
Deferred income taxes (238,426) (330,159)
Changes in assets and liabilities:
Decrease (increase) in accounts 1,653,068 1,537,452
receivable
Decrease (increase) in inventories 39,854 (761,758)
Decrease (increase) in prepaid expenses and (34,096) (44,512)
other current assets
Decrease (increase) in other assets (116,572) (124,918)
Increase (decrease) in accounts (440,656) (1,683,659)
payable
Increase (decrease) in accrued expenses (327,158) (234,975)
Increase (decrease) in income taxes payable 0 (249,482)
- ----------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 152,067 (2,144,170)
- ----------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Captial expenditures (97,439) (223,823)
- ----------------------------------------------------------------------------------------------------------
Net cash used in investing activities (97,439) (223,823)
- ----------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- ----------------------------------------------------------------------------------------------------------
Net proceeds from initial public offering 0 3,772,801
Proeeds from stock purchase and stock option plans 3,357 0
Proceeds from (payments on) bank and other debt obligations (116,465) (1,457,741)
- ----------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing
activities (113,108) 2,315,060
- ----------------------------------------------------------------------------------------------------------
Net Increase (decrease) in Cash (58,480) (52,933)
Cash, at beginning of period 107,933 88,221
- ----------------------------------------------------------------------------------------------------------
Cash, at end of Period 49,453 35,288
==========================================================================================================
</TABLE>
7
<PAGE> 8
VITA FOOD PRODUCTS, INC.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
The accompanying unaudited interim financial statements have been prepared in
accordance with the instructions for Form 10-QSB and do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements and should be read in conjunction with the
financial statements and related notes included in the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1997. In the opinion of
management, all adjustments necessary for a fair presentation of such interim
financial statements have been included. All such adjustments are of a normal
recurring nature.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This report contains forward-looking statements about the Company's future
growth, profitability and competitive position. Any such statements are subject
to risks and uncertainties, including changes in economic and market conditions,
industry competition, raw material prices, the success of new product
introductions, management of growth and other risks noted in the Company's
filings with the Securities and Exchange Commission. Readers are cautioned not
to place undue reliance on forward-looking statements, which reflect
management's analysis only as of the date hereof.
COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 1998 AND THE THREE MONTHS ENDED
JUNE 30, 1997
REVENUES. Net sales for the three months ended June 30, 1998 were $4,075,000
compared to $4,013,000 for the same period in 1997, an increase of $62,000 or
2%. This increase was attributable to a combination of a 9% decrease in sales of
herring products, a slight increase in sales of core salmon products, a 28%
increase in the sale of other specialty products, and a 212% increase in the
sale of newer products, which includes hommus, salmon burgers, and salmon
nuggets. The decrease in herring sales was in part attributable to the Passover
holiday which occurred earlier in 1998 than 1997, resulting in a portion of
Passover-related orders being placed in the first quarter of 1998 rather than
the second quarter. The large increase in newer products is primarily
attributable to the increasing acceptance of the newer products by Vita's
customers and end consumers.
GROSS MARGIN. Gross margin for the three months ended June 30, 1998 was
$935,000 compared to $1,128,000 for the same period in 1997, a decrease of
$193,000 or 17%. As a percentage of net sales, gross margin was 22.9% in the
three months versus 28.1% in the same period in 1997. The decrease in the gross
margin percentage was attributable in part to increased expenses to improve
product quality and safety, and in part to increased production expenses.
OPERATING EXPENSES. Selling, marketing and administrative expenses for the
three months ended June 30, 1998 were $1,483,000 compared to $1,434,000 for the
same period in 1997, an increase of $49,000 or 3%. As a percentage of net sales,
selling, marketing and administrative expenses increased to 36.4% from 35.7% for
the same period in 1997. The increase in the selling, marketing and
administrative expense margin was attributable to a combination of factors,
including slotting costs incurred to increase distribution of newer products,
offset to some extent by lower broker commissions and distribution costs as a
percentage of sales.
INTEREST EXPENSE. Interest and other expense, net, for the three months ended
June 30, 1998 was $101,000 compared to $94,000 for the same period in 1997, an
increase of $7,000 or 7%. This increase was attributable to the higher level of
bank debt outstanding. The higher level of debt was primarily a result of the
losses incurred in the prior twelve months.
8
<PAGE> 9
INCOME TAXES. The Company provided for an income tax benefit of $186,000 for
the three months ended June 30, 1998, compared to an income tax benefit of
$182,000 for the same period in 1997. The income tax benefits for each period
represents anticipated utilization of these tax benefits during the respective
fiscal years. The income tax benefit for the three months ended June 30, 1998
was lower as a percent of pretax income than the income tax benefit for the
three months ended June 30, 1997 because the Company expected higher pretax
income for the year ended December 31, 1997 and, accordingly, the ability to
take advantage of a more substantial income tax benefit, as compared to the
year ended December 31, 1998.
NET INCOME AND LOSS. Net loss for the three months ended June 30, 1998 was
$463,000 or $0.13 per share compared to net loss of $219,000 or $0.06 per share
for the same period in 1997, an increase in net loss of $244,000 or $0.07 per
share.
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1998 AND THE SIX MONTHS ENDED
JUNE 30, 1997
REVENUES. Net sales for the six months ended June 30, 1998 were $9,594,000
compared to $8,735,000 for the same period in 1997, an increase of $859,000 or
10%. This increase was attributable to a combination of a 1% increase in sales
of herring products, a 10% increase in sales of core salmon products, an 18%
increase in the sale of other specialty products, and a 152% increase in the
sale of newer products, which includes hommus, salmon burgers, and salmon
nuggets. The overall increase was partially attributable to the timing of
certain customers' orders. Two customers which placed lower than normal
purchase orders in the first quarter of 1997 resumed their normal purchasing
pattern.
GROSS MARGIN. Gross margin for the six months ended June 30, 1998 was
$2,436,000 compared to $2,361,000 for the same period in 1997, an increase of
$75,000 or 3%. As a percentage of net sales, gross margin was 25.4% in the
three months versus 27.0% in the same period in 1997. The decrease in the gross
margin percentage was attributable in part to increased expenses to improve
product quality and safety, and in part to increased production expenses.
OPERATING EXPENSES. Selling, marketing and administrative expenses for the six
months ended June 30, 1998 were $3,030,000 compared to $2,907,000 for the same
period in 1997, an increase of $127,000 or 4%. As a percentage of net sales,
selling, marketing and administrative expenses decreased to 31.6% from 33.3%
for the same period in 1997. The decrease in the selling, marketing and
administrative expense margin was attributable to a combination of factors,
including lower promotional and advertising costs, broker commissions, and
distribution costs as a percentage of sales.
INTEREST EXPENSE. Interest and other expense, net, for the six months ended
June 30, 1998 was $197,000 compared to $166,000 for the same period in 1997, an
increase of $31,000 or 19%. This increase was attributable to the higher level
of bank debt outstanding. The higher level of debt was primarily a result of
the losses incurred in the prior twelve months.
INCOME TAXES. The Company provided for an income tax benefit of $238,000 for
the six months ended June 30, 1998, compared to an income tax benefit of
$330,000 for the same period in 1997. The income tax benefits for each period
represents anticipated utilization of these tax benefits during the respective
fiscal years. The income tax benefit for the six months ended June 30, 1998 was
lower as a percent of pretax income than the income tax benefit for the six
months ended June 30, 1997 because the Company expected higher pretax income
for the year ended December 31, 1997 and, accordingly, the ability to take
advantage of a more substantial income tax benefit, as compared to the year
ended December 31, 1998.
NET INCOME AND LOSS. Net loss for the six months ended June 30, 1998 was
$553,000 or $0.15 per share compared to net loss of $381,000 or $0.10 per share
for the same period in 1997, an increase in net loss of $172,000 or $0.05 per
share.
FINANCIAL CONDITION
- -------------------
Since December 31, 1997, the Company's current ratio increased to 2.7 from 2.6.
Its ratio of long-term debt-to-total capitalization increased to 68% from 64%.
9
<PAGE> 10
CASH FLOWS FROM OPERATING ACTIVITIES. Net cash provided by operating activities
was $152,000 for the six months ended June 30, 1998, compared to net cash used
in operating activities of $2,144,000 for the same period in 1997. This
difference was primarily attributable to a decrease in inventory levels in 1998,
compared to an increase in the same period in 1997, offset by decreased payments
of the Company's accounts payable in 1998, compared to 1997. The decrease in
inventory levels was primarily attributable to improved inventory management.
The decreased payments of the Company's accounts payable was primarily due to
the payments of expenses in 1997 related to the Company's initial public
offering.
CASH FLOWS FROM INVESTING ACTIVITIES. Net cash used in investing activities was
$97,000 for the six months ended June 30, 1998, compared to $224,000 for the
same period in 1997. The decrease was primarily due to lower capital spending
on equipment in part due to an increase in equipment leasing rather than direct
purchasing.
CASH FLOWS FROM FINANCING ACTIVITIES. Net cash used in financing activities was
$113,000 for the six months ended June 30, 1998, compared to net cash provided
of $2,315,000 for the same period in 1997. The increase in net cash used in
financing activities was attributable to the net proceeds from the Company's
initial public offering in 1997, offset by payments under the Company's bank
credit facilities.
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(d) The effective date of the Company's Registration Statement on Form
SB-2 (Commission File No. 333-5738) filed with the Securities and
Exchange Commission with respect to the Company's initial public
offering of common stock, par value $.01 per share, and Redeemable
Common Stock Purchase Warrants (the "Offering") was January 16, 1997.
The Offering commenced on January 17, 1997 and terminated on January
23, 1997, following the sale of all securities registered with the
exception of securities subject to the underwriters' over-allotment
option. The managing underwriters of the Offering were National
Securities Corporation and Access Financial Group, Inc. An aggregate
of 750,000 shares of common stock and 750,000 Warrants were registered
and sold in the Offering at an aggregate price of $4,575,000. The
Company incurred $457,500 in selling agent commission and underwriting
discounts in connection with the Offering and approximately $957,727 in
other expenses ("Total Expenses"), none of which was paid to directors
or officers of the Company or to their associates, to persons owning
10% or more of any class of equity securities of the Company or to any
affiliate of the Company. The net proceeds to the Company from the
Offering, after deducting Total Expenses, was approximately $3,159,773,
all of which was initially used by the Company for repayment of
outstanding indebtedness. None of the net proceeds from the Offering
was paid to directors or officers of the Company or to their
associates, to persons owning 10% or more of any class of equity
securities of the Company or to any affiliate of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The date of the Company's Annual Meeting of Stockholders was June 18,
1998.
(b) At the Annual Meeting of Stockholders, the following matters were
submitted to a vote of the stockholders with the stated results:
(1) The election of the following persons as directors of the Company:
<TABLE>
<CAPTION>
Director Votes For Votes Withheld
-------- --------- --------------
<S> <C> <C>
Stephen D. Rubin 2,960,564 11,173
Clark L. Feldman 2,961,064 10,673
Sam Gorenstein 2,961,064 10,673
Jeffrey C. Rubenstein 2,961,064 10,673
Neal Jansen 2,961,064 10,673
Michael Horn 2,961,064 10,673
Steven A. Rothstein 2,961,064 10,673
</TABLE>
(2) The ratification of the appointment of BDO Seidman, LLP as the
Company's independent accountants for the year ending December 31,
1998.
<TABLE>
<S> <C>
Votes For Votes Against
--------- -------------
2,961,020 10,717
</TABLE>
10
<PAGE> 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
(1) 3.1 Articles of Incorporation of the Company (Ex. 3.1)
(1) 3.2 By-laws of the Company (Ex. 3.2)
(1) 4.1 Form of Common Stock Certificate (Ex. 4.1)
(1) 4.2 Form of Representatives' Warrant Agreement between the
Company and National Securities Corporation and Access
Financial Group, Inc., as representative of the several
Underwriters (the "Representatives"), including Form of
Representatives' Warrant (Ex. 4.2)
(2) 4.3 Form of Warrant Agreement between the Company and American
Stock Transfer & Trust Company and the Representative,
including form of Warrant Certificate (Ex. 4.3)
(1) 10.1 Loan and Security Agreement dated as of March 20, 1995 by
and between the Company and NBD Bank, as amended (Ex. 10.3)
(3) 10.1.1 Second Amendment to Loan and Security Agreement (Ex. 10.1.1)
(3) 10.1.2 Third Amendment to Loan and Security Agreement (Ex. 10.1.2)
(3) 10.1.3 Form of Fourth Amendment to Loan and Security Agreement
(Ex. 10.1.3)
* 10.1.4 Fifth Amendment to Loan and Security Agreement (Ex. 10.1.3)
(1) 10.2 Form of 1996 Employee Stock Option Plan (Ex. 10.4)(x)
(1) 10.3 Form of 1996 Stock Option Plan for Non-Employee Directors
(Ex. 10.5)(x)
(1) 10.4 Form of Employment Agreement between the Company and Stephen
D. Rubin(Ex. 10.7)(x)
(1) 10.5 Form of Employment Agreement between the Company and Clark L.
Feldman (Ex. 10.8)(x)
(1) 10.6 Long Term Supply/Purchase Agreement dated as of September 1,
1992 by and between the Company and Barry's Limited
(Ex. 10.9)
</TABLE>
- ---------------
(1) Incorporated by reference to Form SB-2 Registration Statement (File No.
333-5738), filed with the Securities and Exchange Commission on September 23,
1996. Form SB-2 Exhibit Number is included in parenthesis following the title
of the Exhibit.
(2) Incorporated by reference to Form SB-2 Registration Statement (File No.
333-5738), filed with the Securities and Exchange Commission on November 14,
1996. Form SB-2 Exhibit Number is included in parenthesis following the title
of the Exhibit.
(3) Incorporated by reference to Form 10-KSB for the fiscal year ended December
31, 1997, filed with the Securities and Exchange Commission on March 30, 1998.
* Filed herewith
x Indicates an employee benefit plan, management contract or compensatory plan
or arrangement in which a named executive officer participates.
11
<PAGE> 12
<TABLE>
<S> <C>
(1) 10.7 Exclusive Distributorship Agreement dated as of December 1, 1994
by and between the Company and Brookside Products, Ltd.
(Ex. 10.10)
(3) 10.8 Employment Agreement between the Company and Jay H. Dembsky (x)
(Ex. 10.8)
(2) 10.9 Gorenstein Agreement dated September 20, 1996 by and among the
Company, Stephen D. Rubin, Clark L. Feldman, Sam Gorenstein,
David Gorenstein and J.B.F. Enterprises (Ex. 10.26)
*27.1 Financial Data Schedule.
</TABLE>
(b) No reports on Form 8-K were filed during the quarter for which this
report is filed.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
VITA FOOD PRODUCTS, INC.
Date: August 7, 1998 By: /s/ Stephen D. Rubin
--------------------
Stephen D. Rubin
President
Date: August 7, 1998 By: /s/ Jay H. Dembsky
--------------------
Jay H. Dembsky
Vice President and Chief Financial
Officer (Principal Financial and
Accounting Officer)
12
<PAGE> 1
Exhibit 10.1.4
FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
----------------------------------------------
This Fifth Amendment to Loan and Security Agreement, dated as of June 4,
1998, (this "Fifth Amendment") by and between Vita Food Products, Inc., a Nevada
corporation, (herein the "Borrower"), and American National Bank and Trust
Company of Chicago, a national banking association, and successor to NBD Bank
(the "Bank");
WITNESSETH
WHEREAS, the Borrower and the Bank have heretofore entered into a Loan and
Security Agreement dated as of March 20, 1995 (as amended, extended, modified
or supplemented from time to time the "Credit Agreement"), pursuant to which
the Bank has agreed to consider making certain loans to the Borrower pursuant
to the terms and on the conditions set forth therein;
WHEREAS, the Borrower and the Bank mutually desire to further amend the
Credit Agreement to revise certain provisions thereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows;
1. (a) Section 2.1 of the Credit Agreement is amended by deleting the
number "$5,250,000" on the twelfth line thereof and inserting in its place the
number "$4,750,000."
(b) Section 2.3 of the Credit Agreement is amended by deleting the
number "$5,250,000" contained on the fourth line thereof and inserting in its
place the number "$4,750,000."
(c) Section 10 of the Credit Agreement is amended by adding the
following covenant as Section 10.6 thereof;
"Year 2000 Compliance The Borrower will take all action reasonably necessary
to assure that the "Year 2000 Problem" (defined as the risk that computer
applications or embedded systems used by the Borrower or its customers may
be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999) will
not have a material adverse effect on the business, operations or financial
condition of the Borrower. The Borrower has reviewed the areas within its
business and operations that could be adversely affected by, and has
developed and is implementing a plan to address on a timely basis, the Year
2000 Problem. Upon the Bank's request, the Borrower will provide the Bank
with a description of its plan to address the Year 2000 Problem, including
updates and progress reports. The Borrower will promptly advise the Bank,
in writing, of any material adverse effect on its business, operations or
financial condition which has occurred or is reasonably anticipated to
occur arising from the Year 2000 Problem and its impact on the Borrower or
its customers."
(d) Exhibit L of the Credit Agreement is amended and restated in its
entirely by
<PAGE> 2
the Amended and Restated Revolving Note appearing as Schedule 1 hereto and all
references to the Revolving Note contained in the Credit Agreement shall mean
and be references to said Amended and Restated Revolving Note.
2. Borrower agrees that it shall further execute and deliver to the Bank a
replacement Revolving Note in the form of Schedule 1 hereto together with
additional or further documents, including without limitation, any amended or
replacement notes, necessary to further effectuate the intent and purpose of
the Credit Agreement and this Fifth Amendment.
3. Borrower represents and warrants that:
(a) The execution, delivery and performance of this Fifth Amendment and
the replacement Revolving Note by the Borrower is within its corporate powers,
has been duly authorized, and is not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, or order or award of an
arbitrator, court or governmental authority, or of the terms of its Article of
Incorporation or By-Laws or of any contract to which it or its property may be
bound or affected.
(b) The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada, and is duly qualified to do
business, and is in good standing, in all additional jurisdictions where such
qualification is necessary under applicable law. Borrower has all requisite
corporate power to execute and deliver this Fifth Amendment. The Credit
Agreement, as amended by this Fifth Amendment, and the replacement Revolving
Note are each valid and binding obligations of the Borrower, enforceable against
the Borrower in accordance with their terms.
(c) The most recent financial statements delivered to the Bank in
accordance with the Credit Agreement are complete and accurate in all material
respects and present fairly the financial condition of the Borrower as of such
date and the results of its operations for the periods covered thereby, in
accordance with generally accepted accounting principles. There has been no
material adverse change in the condition of the Borrower, financial or
otherwise, since the date of such statements.
(d) After giving effect to the amendments contained herein, the
representations and warranties contained in the Credit Agreement are true on and
as of the date hereof with the same force and effect as if made on and as of the
date hereof.
4. This Fifth Amendment shall be governed by and construed in accordance
with the laws of the State of Illinois without reference to conflict of laws
principles.
5. Except as specifically amended hereby, the Credit Agreement, and any and
all certificates, instruments and other documents executed pursuant thereto
shall in all respects continue in full force and effect. Except as otherwise
expressly defined herein, all terms used in this Fifth Amendment shall have the
respective meanings set forth in the Credit Agreement.
2
<PAGE> 3
Witness the due execution hereof as of this 4 day of June, 1998, which shall be
the effective date of this Fifth Amendment, notwithstanding the day and year
first above written.
American National Bank Vita Food Products, Inc.
and Trust Company of Chicago
By: By:
-------------------------- -------------------------
Its: Loan Officer Its: Vice President & CFO
------------------------ -----------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 49,453
<SECURITIES> 0
<RECEIVABLES> 2,133,355
<ALLOWANCES> 225,904
<INVENTORY> 4,262,354
<CURRENT-ASSETS> 7,204,313
<PP&E> 6,004,654
<DEPRECIATION> 3,825,958
<TOTAL-ASSETS> 9,714,399
<CURRENT-LIABILITIES> 2,629,467
<BONDS> 4,815,995
0
0
<COMMON> 37,020
<OTHER-SE> 2,231,917
<TOTAL-LIABILITY-AND-EQUITY> 9,714,399
<SALES> 4,075,332
<TOTAL-REVENUES> 4,075,332
<CGS> 3,141,252
<TOTAL-COSTS> 3,141,252
<OTHER-EXPENSES> 1,482,141
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 101,415
<INCOME-PRETAX> (649,476)
<INCOME-TAX> (186,000)
<INCOME-CONTINUING> (463,476)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (463,476)
<EPS-PRIMARY> (0.13)
<EPS-DILUTED> (0.13)
</TABLE>
