SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 26, 1999
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VACU-DRY COMPANY
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(Exact Name of Registrant as Specified in Its Charter)
California
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(State or Other Jurisdiction of Incorporation)
01912 94-1069729
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(Commission File Number) (I.R.S. Employer Identification No.)
100 Stony Point Road, Suite 200, Santa Rosa, California 95401
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(Address of Principal Executive Offices) (Zip Code)
(707) 535-4000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2: Acquisition or Disposition of Assets
As previously reported, on June 21, 1999, Registrant entered into an
agreement with Tree Top, Inc. pursuant to which Registrant would sell
substantially all of the assets relating to its product lines of processed apple
products and products containing processed apple products. The agreement
required the approval of the Registrant's shareholders.
On July 26, 1999, a majority of Registrant's shareholders approved the
sale, and the parties closed the sale transaction. The assets to be sold include
specified equipment, related trade secrets and information, certain trademarks,
and goodwill related to those product lines for a purchase price of $12 million
in cash, plus inventory remaining unsold as of September 30, 1999, up to an
additional $2.75 million dollars. Assets not being sold include certain other
processed apple product lines, the Company's vacuum-dried apple product line,
its food storage business, and its Made In Nature line of organic natural foods
and chilled juices.
Item 7: Financial Statements and Exhibits
(b) Pro Forma Financial Information
PRO FORMA FINANCIAL INFORMATION
Pro Forma Condensed Consolidated Balance Sheet
The following unaudited pro forma condensed consolidated balance sheet
at March 31, 1999, has been prepared to reflect the proposed Sale of the
Company's apple product lines based on the assumption that the sale was
consummated at that date. The pro forma condensed consolidated balance sheet
should be read in conjunction with the Company's consolidated financial
statements and notes thereto included in the Company's 1998 Annual Report and
the condensed consolidated financial statements of the Company for the nine
months ended March 31, 1999 and 1998 included in the Company's March 1999
Quarterly Report.
<TABLE>
<CAPTION>
Actual Pro Forma Pro forma
adjustments(1)
In thousands, except per share amounts)
<S> <C> <C> <C>
Cash.................................. $172 - $172
Accounts Receivable................... 3,478 - 3,478
Other Receivables..................... 816 - 816
Income tax receivable................. - - -
Inventories........................... 14,892 - 14,892
Prepaid Expenses...................... 74 - 74
Current deferred taxes................ 360 - 360
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Total current assets.............. $19,792 - $19,792
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Property, Plant & Equipment........... 6,663 (1,465) 5,198
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Goodwill, net of amortization......... 2,682 - 2,682
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Total Assets...................... $29,137 ($1,465) $27,672
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Current maturities of long term debt.. 438 (438) -
Accounts payable...................... 5,938 - 5,938
Accrued payroll & related liabilities. 1,021 - 1,021
Accrued Expenses...................... 395 - 395
Income tax payable.................... 452 - 452
Total current liabilities........ $8,244 ($438) $7,806
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Borrowings under line of credit....... 5,000 (2,654) 2,346
Long term debt-net of current maturities 3,914 (3,914) -
Deferred Income taxes................. 865 - 865
Minority interest..................... 329 - 329
Capital Stock......................... 2,876 - 2,876
Warrants for common stock............. 456 456
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Retained Earnings..................... 7,453 5,541 12,994
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Total shareholders' equity....... $10,785 $5,541 16,326
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Total liabilities and shareholders' $29,137 ($1,465) $27,672
equity................................
Book value per common share outstanding $7.11 $10.76
Shares outstanding.................... 1,517,503 1,517,503
</TABLE>
(1) To give effect to the proposed sale as of March 31, 1999, including the
elimination of equipment to be sold to the buyer and the planned use of
cash proceeds from the sale. The pro forma gain applicable to the above
proposed sale is as follows:
Proceeds from the sale................. $12,000,000
Equipment sold......................... (1,465,000) (2)
Income tax payable by Company.......... (3,694,000)
Estimated Expenses related to the
sale.............................. (1,300,000) (3)
Pro forma gain......................... $5,541,000 (4)
(2) Included in the equipment sold is approximately $965,000 which
represents an excess of book value of the Transferred Assets over the
agreed upon purchase price of $500,000.
(3) Includes approximately $880,000 in severance payments to both unionized
and non-unionized employees, and $420,000 in professional fees in
connection with the Transaction.
(4) The pro forma gain does not take into account interest which may be
earned on the Transaction proceeds from investing in short-term
interest bearing instruments pending further use of the proceeds.
Pro Forma Condensed Consolidated Statements Of Operations
The following unaudited pro forma condensed consolidated statements of
operations for the year ended June 30, 1998 and for the nine months ended March
31, 1999, have been prepared to reflect the proposed Sale of the apple product
lines of the Company and assuming that such sale took place on July 1, 1998. The
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the period ending June 30, 1998 (the "1998 Annual Report") and the
condensed consolidated financial statements for the six months ended March 31,
1999 and 1998 in the Company's Quarterly Report on Form 10-Q for the quarter
ending March 31, 1999 (the "March 1999 Quarterly Report"). The pro forma
condensed consolidated statements of operations are not necessarily indicative
of the results of operations of the Company as they may be in the future or as
they might have been had the Sale been effective July 1, 1998.
<PAGE>
<TABLE>
<CAPTION>
Year Ended June 30, 1998
Actual Pro Forma Adjustments Pro Forma
(In thousands, exept per share amounts)
<S> <C> <C> <C>
(a)
Net Sales........................... $26,094 ($21,181) $4,913
Other Income........................ 586 - 586
Cost of sales....................... 21,565 (17,241) 4,324
Selling, general and administrative 3,384 (2,078) 1,306
expenses............................
Interest expense.................... 310 310
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Income (loss) from continuing $1,421 ($1,862) ($441)
operations..........................
Income (loss) from continuing operations per common share
Basic......................... $0.90 ($0.28)
Diluted....................... $0.89 ($0.28)
Weighted average shares
Basic......................... 1,581,014 1,581,014
Diluted....................... 1,600,327 1,581,014
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended March 31, 1999
Actual Pro Forma Adjustments Pro Forma
(In thousands, exept per share amounts)
<S> <C> <C> <C>
Net Sales........................... $29,929 ($14,886) $15,043
Other Income........................ 523 - 523
Cost of sales....................... 23,315 (12,593) 10,722
Selling, general and administrative 4,859 (1,852) 3,007
expenses............................
Interest expense.................... 375 375
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Income (loss) from continuing $1,903 ($441) $1,462
operations..........................
Income (loss) from continuing operations per common share
Basic......................... $1.26 $0.97
Diluted....................... $1.23 $0.94
Weighted average shares
Basic......................... 1,513,411 1,513,411
Diluted....................... 1,547,902 1,547,902
</TABLE>
(a) To eliminate the operations of the apple product lines
(c) Exhibits
Exhibit Description
2* Asset Purchase Agreement dated June 21, 1999 between Vacu-dry Company
and Tree Top, Inc.
99 Press Release issued July 28, 1999 concerning the sale of
Vacu-dry Company's apple-based industrial ingredients product
line to Tree Top, Inc.
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* Incorporated by reference to Annex A to the Registrant's
Consent Statement on Schedule 14A filed with the Securities
and Exchange Commission on July 14, 1999.
<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 hereunto duly authorized.
VACU-DRY COMPANY
Date: August 5, 1999 By: /s/ Gary L. Hess
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Gary L. Hess
Its: President & Chief Executive Officer
<PAGE>
EXHIBIT 99
PRESS RELEASE
Contact: Gary L. Hess, President - 707/535-4000
Bill Burgess, Vice President - 707/535-4000
SANTA ROSA, CALIFORNIA VACU-DRY COMPANY
(NASDAQ: VDRY) announced today that it has successfully closed the sale of its
apple-based industrial ingredients product line to Tree Top, Inc. of Selah,
Washington. The purchase price received by the Company for the divestiture,
which excluded inventory, real estate and most of the apple processing
equipment, was $12 million in cash. Shareholder approval was received on July
26th.
The Tree Top sale is an important element in Vacu-dry's strategic plan to
transform itself from an industrial ingredients supplier to a major participant
in the retail natural foods industry. It builds upon last year's acquisition of
Made In Nature, a leading brand of organic fruit and vegetable products.
Gary Hess, CEO of Vacu-dry, stated that "The Tree Top and related transactions
are significant initiatives designed to increase shareholder value by exiting
seasonal businesses with low returns and high capital requirements. We now have
significant resources available to support the repositioning of our company as a
participant in the value-added, branded natural foods industry." Vacu-dry also
intends to develop and lease out the current approximately 70-acre Sonoma
County, California production facility to provide an additional and more
predictable income stream.
As part of the Tree Top transaction, the Company sold the Vacu-dry trademark. It
expects shareholder approval of a new company name and ticker symbol prior to
December 31, 1999.
