SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) X of the Securities
__X__ Exchange Act of 1934.
For the quarterly period ended September 30, 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 01912
VACU-DRY COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 94-1069729
(State of incorporation) (IRS Employer
Identification #)
100 STONY POINT ROAD, SUITE 200, SANTA ROSA, CALIFORNIA 95401
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 707/535-4000
- --------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES: __X__ NO:
As of November 11, 1999, there were 1,520,087 shares of common stock, no par
value, outstanding.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Vacu-dry Company (the "Company") is including the following cautionary statement
in this Form 10-Q to make applicable and take advantage of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 for any
forward looking statements made by, or on behalf of, the Company. Forward
looking statements include statements concerning plans, objectives, goals,
strategies, future events or performance and underlying assumptions, and other
statements which are other than statements of historical facts. Certain
statements contained herein are forward looking statements and, accordingly,
involve risks and uncertainties which could cause actual results or outcomes to
differ materially from those expressed in the forward looking statements. In
addition to other factors and matters discussed elsewhere herein, these risks
and uncertainties include, but are not limited to, uncertainties affecting the
food processing industry, risks associated with fluctuations in the price and
availability of raw materials, management of growth, adverse publicity affecting
organic foods or the Company's products, and product recalls. The Company's
expectations, beliefs and projections are expressed in good faith and are
believed by the Company to have a reasonable basis, including without
limitation, management's examination of historical operating trends, data
contained in the Company's records and other data available from third parties,
but there can be no assurance that management's expectations, beliefs or
projections will result or be achieved or accomplished. The Company disclaims
any obligation to update any forward-looking statements to reflect events or
circumstances after the date hereof.
The financial statements herein presented for the quarters ended September 30,
1999 and 1998 reflect all the adjustments that in the opinion of management are
necessary for the fair presentation of the financial position and results of
operations for the period then ended. All adjustments during the periods
presented are of a normal recurring nature unless otherwise stated.
OVERVIEW
Since the Company acquired certain of the assets and liabilities of Made in
Nature, Inc. on June 11, 1998, Vacu-dry has operated in three business segments:
industrial dried fruit ingredients, organic packaged foods and real estate. The
Company commenced a strategic reorientation upon the announcement of the
proposed sale of the bulk of its apple-based industrial ingredients product line
in June, 1999. In August, 1999 the decision was made to sell or discontinue all
product lines in the Company's industrial dried fruit ingredients business
segment. As a result of these decisions, the ingredients business is considered
a discontinued operation and its operating results, results of cash flows and
net assets are reflected outside of the Company's continuing operations.
DISCONTINUED OPERATIONS
In June, 1999 the Company announced an agreement, subject to shareholder
approval (received July 26), to sell the bulk of its apple-based industrial
ingredients product line to Tree Top, Inc., of Selah, Washington. This product
line represented 55% and 81% of the Company's sales for the years ended June 30,
1999 and 1998, respectively. At the same time, the Company also decided to close
its only apple processing plant in Sebastopol, California. This sale, which was
recorded in the first quarter of fiscal 2000, is an important element in
Vacu-dry's strategic plan to increase the return on its investments and increase
shareholder value by exiting businesses with low returns and high capital
requirements. The transactions will provide financial resources to support the
Company's real estate and other business opportunities.
The terms of the sale included the payment of $12 million cash to Vacu-dry upon
closing the transaction on July 30, 1999. Tree Top also purchased related
product line inventories of $1.9 million in September and October 1999. The
after-tax gain on the sale was $3.2 million. The net gain is based upon the
disposal value of assets not acquired by Tree Top, severance and relocation
costs, wind-down costs, transaction costs and identified liabilities directly
related to the decision to discontinue the business segment. These costs may be
adjusted in the future depending upon the final wind-down of the business which
is expected to run through June 30, 2000.
Following completion of the sale, the Company determined in August, 1999 that
the remaining product lines in the Company's vacuum ingredients segment of its
business would be discontinued and held for sale. These product lines include
the Company's vacuum dried ingredients, Perma-Pak long-term food storage, and
drink mix businesses. As a result of these decisions, the Company has classified
this business segment as a discontinued business. Accordingly, the Company has
segregated the net assets of the discontinued operations in the Consolidated
Balance Sheets at September 30 and June 30, 1999, the operating results of the
discontinued operations in the Consolidated Statements of Operations for three
months ended September 30,1999 and 1998, and the cash flows from discontinued
operations in the Consolidated Statements of Cash Flows for the three months
ended September 30, 1999 and 1998.
<PAGE>
In addition, as part of the transaction, the Company sold the Vacu-dry
trademark. Thus, the Company will be seeking shareholder approval prior to
December 31, 1999 to change its name.
In the first quarter of fiscal 2000, the Company recorded after-tax earnings
from discontinued operations of $431,000. The after-tax earnings resulted from
ingredients business sales of $7.7 million in fiscal 2000 versus $7.2 million in
fiscal 1999. The rise in sales was due to increased buying by customers due to
the liquidation of the apple ingredients business and sales to Tree Top of
$519,000. The ingredients business generated $718,000 of pre-tax income in
fiscal 2000 versus $607,000 in fiscal 1999. The Company is actively marketing
all of its discontinued product lines and has presented offering information to
interested parties. There can be no assurances that there will be a sale of all
or any of the remaining product lines.
RESULTS OF CONTINUING OPERATIONS
The Company's continuing lines of business consist of the sales and marketing of
organic packaged foods and beverages through the Company's subsidiary Made in
Nature Company, Inc. and the leasing and development of the Company's real
estate. The Company has been focusing on its Made In Nature operations
throughout fiscal 1999 and the first quarter of fiscal 2000 and has reduced the
selling, general and administrative staff from fourteen at July 1, 1998 to five
at September 30, 1999. Sales were $619,000 for the three months ended September
30, 1999, resulting in a gross margin of $143,000 (23% of sales).This compares
to sales of $791,000 for the three months ended September 30,1998 resulting in a
gross margin of $142,000(18% of sales) Unlike its discontinued ingredients
business, the Company does no processing of Made In Nature products. A
significant portion of the Company's future revenues will come from the
Company's second business segment, real estate. The Company intends to develop
its real estate largely for industrial rental.
RESULTS OF OPERATIONS
Net Sales, which relate entirely to Made In Nature products, decreased $172,000
or 21.2% from $791,000 in the first quarter of fiscal 1999 to $619,000 in the
first quarter of fiscal 2000. The decrease in sales was due to decreases in both
beverage and packaged dried fruit product line sales.
Rental Revenue represents the Company's leasing of warehouse space in several
buildings and a yard as well as excess space in its production facility. There
are leases with twelve tenants that have varying terms ranging from
month-to-month to eight years with options to extend. Substantially all
available space at September 30, 1999 was under lease. Fiscal 2000 rental
revenues in the first quarter increased 28% or $44,000 over fiscal 1999. This
increase was a result of higher market rental rates, CPI increases and the
leasing of some previously vacant space.
Other revenue primarily represents royalty income, which was higher than normal
quarterly rates due to an additional payment, which is calculated on annual
revenues of the licensee.
All Cost of Goods Sold are related to the sales of Made in Nature products. The
Company realized gross margins of $143,000 or 23% of sales in Fiscal 2000 versus
$142,000 or 18% of sales in fiscal 1999. The increase in gross margin was due to
lower distribution costs.
Selling, general and administrative expenses include only direct costs related
to continuing operations and all general corporate overhead costs. Only direct
selling, general and administrative costs related to the ingredients business
were allocated to discontinued operations in the Consolidated Statements of
Operations. In fiscal 2000, selling, general and administrative expenses related
to continuing operations decreased $569,000 or 48% from the prior year. The
change was primarily due to significant efforts to reduce expenses for Made In
Nature and reduced corporate costs due to the downsizing of the operation.
Interest expense for both fiscal 2000 and fiscal 1999 includes interest on three
loans to repurchase Company shares and the portion of interest expense on the
Company's revolving line of credit internally charged to Made In Nature based on
intercompany borrowings. Interest expense in fiscal 2000 also included interest
on mortgage debt. Interest costs of $54,000 in fiscal 2000 and $60,000 in fiscal
1999 related to the Company's revolving line of credit are included in
discontinued operations.
In fiscal 2000 net interest expense from continuing operations of $49,000
increased $11,000 from the prior year due to the mortgage debt which was not
outstanding in fiscal 1999.
<PAGE>
The effective tax rate for the first quarter ended September 30, 1999 was 40%
compared to an effective tax rate of 47% for the quarter ended September 30,
1998.
LIQUIDITY AND CAPITAL RESOURCES
Cash used in operating activities of continuing operations was $122,000 in
fiscal 2000 compared to $1,774,000 in fiscal 1999 primarily due to a significant
reduction in accounts payable in fiscal 1999.
The Company utilized the $12 million proceeds from the sale of its apple product
lines to reduce borrowings under the bank line of credit and to retire a
significant portion of its long-term debt. The proceeds will also be utilized to
fund severance ,income tax payments and future wind-down costs. The Company is
anticipating additional cash flow from the liquidation of its receivables and
the sale of the remaining plant equipment. The cash balance increased $3.9
million from $548,000 at June 30, 1999 to $4,482,000 at September 30, 1999.
Historically, the Company's operating capital has been obtained from a
combination of internal and external sources. The largest external source has
been a revolving line of credit provided by a bank at its prime rate of
interest, which is secured by the Company's assets. As of September 30, 1999,
the Company had no outstanding balance on a maximum available line of $2
million. This credit facility was initially scheduled to expire in November,
2000. However, as a result of the sale of the discontinued operations, the bank
amended the agreement in August , 1999, reducing the maximum line of credit to
$2 million with an expiration date of December 31, 1999. As of September 30,
1998, the Company had $4 million of debt outstanding on a maximum bank line of
$4.5 million.
As of September 30, 1999, the Company was in compliance with all of the
covenants and restrictions related to its outstanding debt. The Company's loan
agreement with its bank includes a negative covenant prohibiting the declaring
or paying of a dividend in cash, stock or any other property without the prior
approval by the bank.
In fiscal 1998, the Company had performed a review of its information technology
(IT) systems and determined that they were not year 2000 compliant. As a result,
a new computer system with related hardware was installed during fiscal 1999 at
a cost of $1.1 million. The related IT expenditures were partially financed
through capital lease arrangements of $840,000. These leases were divided into
two components: one for hardware for $246,000, and the other for software,
including installation by an outside consulting firm, for $594,000. The leases
are payable over three and four years, respectively, and include a buy-out
option. Management feels that upon the sale and closedown of the discontinued
operations, the new system may far exceed the Company's future requirements.
Consequently, the existing system has been written off in the quarter ended
September 30, 1999, and is included in the net gain on the sale of the
discontinued business. The Company is at present exploring the purchase of a
much simpler and less expensive system that is also year 2000 compliant.
Until recently, the Company's real estate activities had consisted of the
leasing of an idle production facility and rental of a small portion of space in
its operating facility. Most of the previously available space has been rented.
With the closure of the plant as a result of the sale of the processed apple
product lines, the Company intends to convert all of its former plant space to
industrial rentals by outside parties. The new space available for leasing
includes a mix of offices, production buildings and warehouses plus
approximately 55,000 square feet of cold storage. The Company is actively
seeking to attract wineries and food processors to occupy the space.
<PAGE>
VACU-DRY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
9/30/99 9/30/98
------------ ------------
<S> <C> <C>
REVENUES:
Net Sales $619,000 $791,000
Rental 201,000 157,000
Other 55,000 -
------ --------
Total revenue $875,000 $948,000
-------- --------
Costs & Expenses
Cost of sales 476,000 649,000
Selling, general & administrative 609,000 1,178,000
Interest, net 49,000 38,000
------ ------
Total costs and expenses 1,134,000 1,865,000
--------- ---------
Loss from continuing operations before minority
interest and provision for taxes (259,000) (917,000)
MINORITY INTEREST - 73,000
---------- ----------
Loss from continuing operations before benefit for income taxes (259,000) (844,000)
PROVISION (BENEFIT) FOR INCOME TAXES (104,000) (393,000)
--------- ---------
Net loss from continuing operations (155,000) (451,000)
--------- ---------
DISCONTINUED OPERATIONS:
Earnings from discontinued operations, net of income taxes 431,000 322,000
Gain on sale of discontinued business, net of income taxes 3,249,000 -
--------- -------
NET INCOME FROM DISCONTINUED OPERATIONS 3,680,000 322,000
--------- -------
NET EARNINGS (LOSS) $3,525,000 $(129,000)
========== ==========
WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS:
Basic 1,519,447 1,511,014
========= =========
Diluted 1,565,095 1,542,529
========= =========
EARNINGS (LOSS) PER COMMON SHARE
Continuing operations
Basic $(0.10) $ (0.30)
====== =======
Diluted $(0.10) $ (0.30)
====== =======
Discontinued operations:
Basic $ 2.42 $ 0.22
====== =======
Diluted $ 2.35 $ 0.22
====== =======
Net earnings (loss):
Basic $ 2.32 $(0.08)
====== =======
Diluted $ 2.25 $(0.08)
====== =======
</TABLE>
See Notes to Interim Financial Statements
<PAGE>
VACU-DRY COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
[Restubbed Table]
9/30/99 6/30/99
------- -------
CURRENT ASSETS:
Cash $ 4,482,000 $ 548,000
Accounts receivable, net 320,000 327,000
Prepaid income taxes 316,000 566,000
Inventories, net 1,320,000 1,513,000
Prepaid expenses 84,000 165,000
Current deferred taxes, net 1,183,000 2,032,000
Net current assets of discontinued operations 1,140,000 5,431,000
----------- -----------
Total current assets 8,845,000 10,582,000
Property, plant, equipment, net 2,957,000 3,135,000
Net assets of discontinued operations 3,613,000 4,449,000
Deferred income taxes, net 326,000 326,000
Total Assets $15,741,000 $18,492,000
=========== ===========
9/30/99 6/30/99
------- -------
CURRENT LIABILITIES:
Borrowings under line of credit $ -- $ 5,745,000
Current maturities of long term debt 50,000 1,416,000
Current portion of capital lease obligation 214,000 209,000
Accounts payable 211,000 542,000
Income taxes payable 1,500,000 --
Accrued payroll and related liabilities 184,000 437,000
Other accrued expenses 177,000 183,000
----------- -----------
Total current liabilities 2,336,000 8,532,000
----------- -----------
Long term capital lease obligation 516,000 590,000
----------- -----------
Long term debt-net of
current maturities 2,849,000 2,860,000
----------- -----------
SHAREHOLDERS' EQUITY:
Capital stock 2,894,000 2,890,000
Warrants for common stock 456,000 456,000
Retained earnings 6,690,000 3,164,000
----------- -----------
Total shareholders' equity 10,040,000 6,510,000
Total liabilities and shareholders' equity $15,741,000 $18,492,000
=========== ===========
See Notes to Interim Financial Statements
<PAGE>
VACU-DRY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES: 1999 1998
---- ----
<S> <C> <C>
Net earnings (loss) $ 3,525,000 $(129,000)
Adjustments to reconcile net earnings (loss)
to net cash used for operating
activities:
Earnings from discontinued operations, net (431,000) (322,000)
Gain on sale of discontinued business, net (3,249,000) -
Depreciation and amortization expense 92,000 107,000
Minority interest - (73,000)
Changes in assets & liabilities:
Accounts receivable, net 7,000 (78,000)
Income tax receivable 250,000 (109,000)
Inventories, net 193,000 (1,000)
Prepaid assets 81,000 179,000
Accounts payable (331,000) (1,304,000)
Accrued payroll & related liabilities (253,000) 51,000
Other accrued expenses (6,000) (95,000)
-------- --------
Net cash provided by
(used in) operating activities (122,000) (1,774,000)
Net cash provided by discontinued operations 11,250,000 568,000
---------- -----------
Net cash provided by (used) in operating activities 11,128,000 (1,206,000)
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (6,000) (301,000)
Investing activities of discontinued operations - (203,000)
------ ---------
Net cash provided by (used for) investing activities (6,000) (504,000)
------ ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under the line of credit 3,727,000 4,945,000
Payments on the line of credit (9,472,000) (3,276,000)
Principal payments of debt (1,377,000) (191,000)
Payments on capital lease (69,000) -
Issuance of common stock 3,000 13,000
----------- ---------
Net cash provided by (used for) financing activities (7,188,000) 1,491,000
----------- ---------
NET INCREASE (DECREASE) IN CASH 3,934,000 (219,000)
CASH AT THE BEGINNING OF THE YEAR 548,000 385,000
------- -------
TOTAL CASH AT THE END OF THE PERIOD $4,482,000 $166,000
========== ========
</TABLE>
See notes to Interim Financial Statement
<PAGE>
NOTES TO INTERIM FINANCIAL STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30, 1999
Note 1-
The accompanying fiscal 1999 and 1998 unaudited interim statements have been
prepared pursuant to the rules of the Securities and Exchange Commission.
Certain information and disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes these disclosures are adequate to make the information not
misleading. In the opinion of management, all adjustments necessary for a fair
presentation for the periods presented have been reflected and are of a normal
recurring nature except as discussed below. These interim financial statements
should be read in conjunction with the financial statements and notes thereto
for each of the three years in the period ended June 30, 1999. The results of
operations for the three month period ended September 30, 1999 are not
indicative of the results that will be achieved for the entire year ending June
30, 2000.
Reclassification - Certain 1998 amounts were reclassified to conform to the 1999
presentation with respect to discontinued operations.
Note 2-
In July 1999, the Company consummated an asset purchase agreement (the Purchase
Agreement) with Tree Top, Inc. The Purchase Agreement governs the sale of all
intangible assets (primarily trademarks, know how and customer lists) and
certain of the equipment relating to the Company's processed apple products
line. Although the Purchase Agreement excludes other product lines within the
Company's ingredient segment, the Company is actively seeking buyers for the
remaining product lines of the ingredients segment and plans to discontinue
production of all ingredients segment products by June 30, 2000. Consequently,
the ingredients segment has been presented as a discontinued operation in the
accompanying consolidated financial statements. The purchase price for the sale
of the processed apple product line of $12,000,000 was paid in cash at the
closing date of the sale on July 30, 1999. In addition, apple products
inventories at a net book of $ 1.7 million were purchased by Tree Top, Inc. at a
price of $1.9 million through October, 1999 ($519,000 of which was recorded as
of September 30, 1999). Tree Top, Inc. is not assuming any of the Company's
liabilities. In connection with the Purchase Agreement, the Company and certain
shareholders, directors, and management will agree not to compete with Tree Top,
Inc. in processed apple product lines for a period of three to ten years. In
addition, as part of the transaction, the Company sold the Vacu-dry trademark.
Thus, the Company will be seeking shareholder approval prior to December 31,
1999 of a new name.
During the first quarter of fiscal 2000, the Company recorded a net after-tax
gain of $3.2 million from the sale of the processed apple product line and the
disposal of the remaining product lines of the ingredients segment. The net
after-tax gain included $12,000,000 of proceeds from the sale offset by a) the
write-down of assets related to the ingredients segment to their estimated net
realizable value (assets which were impaired as a direct result of the decision
to discontinue the segment and sell the apple product lines), b) costs to be
incurred in closing the discontinued segment (consisting primarily of severance
costs, professional fees, relocation costs and lease buy-outs), c) estimated
operating losses to be incurred during the wind-down period and d) estimated
loss on sale of equipment at auction, e) transaction costs, and f) the cost of
equipment sold to TreeTop as a part of the sale of the Apple Products Line.
Summarized historical information of the discontinued operations is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
--------------------------------
1999 1998
---- ----
<S> <C> <C>
Income statement data:
Revenues $7,726,000 $7,230,000
Costs and expenses (7,008,000) (6,623,000)
---------- -----------
Operating income 718,000 607,000
Income tax expense (287,000) (285,000)
--------- ---------
Income from discontinued operations, net of income taxes $ 431,000 $322,000
========= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEPTEMBER 30,1999 JUNE 30,1999
<S> <C> <C>
Balance sheet data:
Accounts receivable, net of reserves of $172,000 $4,084,000 $2,287,000
Inventories, net of reserves of $3,487,000 and $3,968,000 2,801,000 7,202,000
Prepaid expense 85,000 323,000
------ -------
Total current assets of discontinued operations 6,970,000 9,812,000
Property, plant and equipment, net 3,614,000 4,448,000
--------- ---------
Total assets of discontinued operations 10,584,000 14,260,000
Accounts payable 504,000 3,388,000
Accrued payroll and related liabilities 233,000 812,000
Other accrued expenses 142,000 180,000
Provision for severance ,transaction costs, wind-down costs and other
liabilities related to the decision to discontinue the ingredients segment 4,952,000 --
--------- -------
Total liabilities of discontinued operations 5,831,000 4,380,000
Net assets of discontinued operations $4,753,000 $9,880,000
========== ==========
</TABLE>
The inventories included above have been adjusted to net realizable value.
Note 3 -
INVENTORIES - Inventories are stated at FIFO cost.
Inventories at September 30, 1999 and June 30, 1999, consisted of the following:
<TABLE>
<CAPTION>
9/30/99 6/30/99
------- -------
<S> <C> <C>
Finished goods $248,000 $195,000
Raw materials, & supplies 1,434,000 1,696,000
Reserve for obsolete inventory (362,000) (378,000)
--------- ---------
$1,320,000 $1,513,000
</TABLE>
Note 4 -
STATEMENT OF CASH FLOWS - Interest and income tax payments reflected in the
Consolidated Statement of Cash Flows were as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Interest paid $160,000 $ 90,000
Income taxes paid $ - $ -
</TABLE>
Note 5-
CONTINGENCIES
The Company is continuing to bargain in good faith with Teamsters Local 624
regarding the effects on union employees of the discontinuance of the Company's
apple-based ingredients product lines. Such bargaining is expected to continue
until either a mutually agreed upon settlement is reached or until the point of
impasse. Management believes that it has adequately provided for any potential
settlement, however, there can be no assurances that the actual settlement will
not exceed the amount provided.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
There are no legal proceedings pending.
Item 2. Changes in Securities
The Company's revolving line of credit agreement with its Bank dated April 20,
1999, includes a convenant which prohibits the declaring or paying of any
dividend or distribution in either cash, stock or any other property on the
Company's stock now or hereafter outstanding, nor redeem, retire, repurchase or
otherwise acquire shares of any class of the Company's stock now or hereafter
outstanding, without the prior approval by the Bank.
Item 4. Submission of Matters to a Vote of Security Holders.
On July 26, 1999 holders of a majority of the Company's outstanding common stock
approved by written consent the sale of certain of the intangible assets and
some of the equipment related to the Company's processed apple product line.
Shareholders holding 929,304 shares voted for the transaction and shareholders
holding 16,856 shares voted against the transaction.
Item 6. Exhibits & Reports on Form 8-K
a. Exhibits
(27) Financial Data Schedule (by electronic filing only)
Reports on Form 8-K -
On August 5, 1999 the Company filed a Form 8-K relating to the approval of the
transaction described in Item 4 above.
<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.
Date: November 11, 1999
/s/ Gary L. Hess
- ------------------------------------
Gary L. Hess,
Chief Executive Officer, President and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-Q FOR
THE QUARTER ENDED SEPTEMBER 30, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> SEP-30-1999
<CASH> 4,482,000
<SECURITIES> 0
<RECEIVABLES> 623,000
<ALLOWANCES> 303,000
<INVENTORY> 1,320,000<F1>
<CURRENT-ASSETS> 8,245,000
<PP&E> 7,208,000
<DEPRECIATION> 4,251,000
<TOTAL-ASSETS> 15,741,000
<CURRENT-LIABILITIES> 2,336,000
<BONDS> 0
0
0
<COMMON> 2,894,000<F2>
<OTHER-SE> 7,146,000
<TOTAL-LIABILITY-AND-EQUITY> 15,741,000
<SALES> 619,000
<TOTAL-REVENUES> 875,000
<CGS> 476,000
<TOTAL-COSTS> 1,085,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49,000
<INCOME-PRETAX> (259,000)<F3>
<INCOME-TAX> (104,000)
<INCOME-CONTINUING> (155,000)
<DISCONTINUED> 3,610,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,525,000
<EPS-BASIC> 2.32
<EPS-DILUTED> 2.25
<FN>
<F1> NET OF RESERVE OF $362,000
<F2> 1,520,087 TOTAL COMMON SHARES OUTSTANDING
<F3>
</FN>
</TABLE>
