<TABLE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from
------------ To ------------
<CAPTION>
Commission File Numbers 333-23893; 333-23893-01; 333-23893-02; 333-23893-03
--------------------------------------
CFP HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)
<S> <C> <C>
Delaware 2013 95-44413619
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
CFP GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 2013 95-4616486
(State or Other Jurisdiction of (Primary Standard Industria (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
CUSTOM FOOD PRODUCTS, INC.
(Exact Name of Registrant as Specified in Its Charter)
California 2013 95-3760291
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
QF ACQUISITION CORP.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 2013 22-3174301
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
-------------------------------
1117 West Olympic Blvd.
Montebello, CA 90640
(Address, Including Zip Code of Registrant's Principal Executive Offices)
213-727-0900
(Registrant's telephone number, including area code)
------------------------------------
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 shorter period that the registrant was required to file such reports),
and (2) has been subject to filing requirements for the past 90 days.
[x] YES [ ] NO
Indicate the number of shares outstanding of each of the issuer's classes of common stock,
as of the latest practicable date.
Class Outstanding at October 31, 1997
----- -------------------------------
Voting Common Stock - Class A, $.01 par value 14,705
Non-voting common Stock - Class A, $.01 par value 11,241
Non-voting common Stock - Class B $.01 par value 3,105
</TABLE>
<PAGE>
CFP Group, Inc. and Subsidiaries
FORM 10-Q
INDEX
Part I Financial Information Page #
Item 1. Financial Statements
Consolidated balance sheets - 1
March 31, 1997 and September 30, 1997
Consolidated statements of operations - 2
Three months & six months ended September 30, 1997
& 1996
Consolidated statements of cash flows - 3
Three months & six months ended September 30, 1997
& 1996
Notes to consolidated financial statements 4
Item 2. Management's Discussion and Analysis of 7
Financial Condition and Results of Operations
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K 10
Signatures
Exhibit Index
<PAGE>
<TABLE>
Part I Financial Information
Item 1. Financial Statements
CFP GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<CAPTION>
March 31, September 30,
1997 1997
--------- ---------
(in thousands)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,139 $ 525
Accounts receivable, net of allowance for doubtful accounts of $93,000
and $194,000 at March 31, 1997 and September 30, 1997, respectively 10,719 12,220
Inventories 11,340 20,544
Prepaid expenses and other current assets 2,526 3,138
--------- ---------
Total Current assets 26,724 36,427
Property and equipment, net 25,402 25,580
Costs in excess of net assets acquired, net 72,021 70,314
Intangible and other assets, net 8,675 8,276
--------- ---------
Total $ 132,822 $ 140,597
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities:
Current portion of long-term liabilities $ 1,991 $ 2,233
Accounts payable 4,964 8,413
Accrued expenses and other current liabilities 5,067 5,556
--------- ---------
Total current liabilities 12,022 16,202
--------- ---------
Long term liabilities 137,864 142,794
--------- ---------
Commitments and contingencies
Redeemable common stock 2,319 2,319
--------- ---------
Stockholders' equity (deficiency):
Preferred stock, $.01 par value; 6,472 shares authorized, none issued and
outstanding
Voting common stock - Class A, $.01 par value; 100,000 shares authorized,
14,705 shares issued and outstanding 3,196 3,196
Nonvoting common stock - Class A, $.01 par value; 25,000 shares authorized,
11,241 (inclusive of 3,011 shares classified as redeemable common stock
shares issued and outstanding 2,204 2,204
Nonvoting common stock - Class B, $.01 par value; 25,000 shares authorized,
3,321 shares (inclusive of 2,162 shares classified as redeemable common
stock) issued and outstanding at March 31, 1997 and 3,105 at September 30,
1997 805 655
Stockholders' notes receivable (337) (234)
Retained earnings (deficit) (25,251) (26,539)
--------- ---------
Total stockholders' equity (deficiency) (19,383) (20,718)
--------- ---------
Total $ 132,822 $ 140,597
========= =========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
1
<PAGE>
<TABLE>
CFP GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<CAPTION>
Three Months Ended Six Months Ended
--------------------------- ---------------------------
September 30, September 30, September 30, September 30,
1996 1997 1996 1997
-------- -------- -------- --------
(in thousands)
<S> <C> <C> <C> <C>
Sales $ 19,954 $ 46,593 $ 35,661 $ 91,348
Cost of Sales 17,132 38,505 30,052 75,788
-------- -------- -------- --------
Gross Profit 2,822 8,088 5,609 15,560
Selling, general and administrative
expenses 1,254 4,160 2,569 8,286
-------- -------- -------- --------
Income from operations 1,568 3,928 3,040 7,274
Interest expense 881 4,412 1,720 8,562
-------- -------- -------- --------
Income (loss) before income taxes 687 (484) 1,320 (1,288)
Provision for income taxes 132 -- 253 --
-------- -------- -------- --------
Net income (loss) $ 555 $ (484) $ 1,067 $ (1,288)
======== ======== ======== ========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
2
<PAGE>
<TABLE>
CFP GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<CAPTION>
Three Months Ended Six Months Ended
--------------------- ---------------------
Sept. 30, Sept. 30, Sept. 30, Sept 30,
1996 1997 1996 1997
-------- -------- -------- --------
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 555 (484) $ 1,067 (1,288)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization 537 1,634 1,054 3,273
Amortization of deferred financing costs and original issue discount 156 310 314 618
Deferred income taxes 101 -- 64 --
Loss on sale of equipment -- 15 -- 15
Changes in assets and liabilities:
Accounts receivable (963) (1,462) (976) (1,501)
Inventories 2,148 (6,291) (294) (9,204)
Prepaid expenses and other current liabilities 32 (1,029) (103) (610)
Income taxes receivables/payable 343 -- 501 --
Accounts payable 57 1,528 (279) 3,448
Accrued expenses and other current liabilities (253) (3,223) (111) 488
-------- -------- -------- --------
Net cash provided by (used in ) operating activities 2,713 (9,002) 1,237 (4,761)
-------- -------- -------- --------
Cash flows from investing activities:
Acquisition of property and equipment (417) (1,991) (964) (2,604)
Proceeds from sale of property and equipment -- 1,137 -- 1,137
Other assets 1,270 (258) 1,074 (503)
-------- -------- -------- --------
Net cash used in investing activities 853 (1,112) 110 (1,970)
-------- -------- -------- --------
Cash flows from financing activities:
Borrowings under revolving loan facility 1,300 10,500 4,425 10,500
Repayment of revolving loan facilities (3,500) (5,000) (4,375) (5,500)
Proceeds from issuance of long-term debt -- 992 -- 992
Repayment of long-term debt and capitalized lease obligations (874) (676) (1,751) (820)
Deferred financing costs -- (6) -- (8)
Proceeds from sale of common stock -- 15 -- 15
Collection of shareholder notes receivable -- 1 -- 1
Purchase of common stock -- (63) -- (63)
-------- -------- -------- --------
Net cash (used in) provided by financing activities (3,074) 5,763 (1,701) 5,117
-------- -------- -------- --------
Net increase (decrease) in cash 492 (4,351) (354) (1,614)
Cash, beginning of period 1 4,876 847 2,139
-------- -------- -------- --------
Cash, end of period $ 493 $ 525 $ 493 $ 525
======== ======== ======== ========
Supplemental disclosures of cash flow information:
Cash paid (received) during the period for:
Interest $ 699 6,760 1,350 7,372
Income taxes -- 41 -- 41
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
3
<PAGE>
CFP GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of CFP
Group, Inc. and its wholly-owned subsidiaries (the "Company") have been prepared
in accordance with generally accepted accounting principles ("GAAP") for interim
financial information and with the instructions for Form 10- Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by GAAP for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
period are not necessarily indicative of the results that may be expected for
the full fiscal year. The accompanying financial statements include the results
of CFP Group, Inc. ("CFP Group") and its wholly-owned subsidiary CFP Holdings,
Inc. ("CFP Holdings"), and CFP Holdings' wholly-owned subsidiaries Custom Food
Products, Inc. ("Custom Foods") and QF Acquisition Corp. ("Quality Foods"). For
further information, refer to the information included in the Company's
Registration Statement on Form S-4 (the "Registration Statement") filed with the
Securities and Exchange Commission on June 27, 1997.
The Company's fiscal year is the 52 or 53 week period ending on the
Saturday nearest to March 31. The Company's three month periods ended nearest
September 30, 1997 and 1996 were 13 week periods. For simplicity of
presentation, the Company has described the interim periods herein as ending on
September 30.
NOTE 2: ACQUISITION
CFP Group was incorporated on November 26, 1996 and was formed to
recapitalize CFP Holdings. CFP Group and CFP Holdings are companies which have
no operations or assets separate from their investments in their respective
subsidiaries.
On December 31, 1996, pursuant to a securities purchase agreement, the
Company acquired all of the equity of the equity interests in Quality Foods (the
"Acquisition") for a total purchase price of $67.1 million which was composed of
(i) cash payments to the sellers of $64.0 million, less a purchase price
adjustment refund received from sellers of $354,000, (ii) the issuance of 2,162
shares of nonvoting common stock-Class B valued at $1.5 million, plus (iii)
acquisition costs of $2.6 million less cash assumed of $600,000. Funds for the
Acquisition, the repayment of certain existing indebtedness, and for working
capital were primarily provided by $76.0 million in term loans, a $20.0 million
revolving credit facility and $25.0 million of subordinated bridge loans. The
fair value of the assets acquired was $95.4 million, the cash paid was $65.6
million, the fair value of Common Stock issued was $1.5 million and liabilities
assumed or paid upon the Acquisition were $28.3 million.
NOTE 3: ISSUANCE OF SENIOR GUARANTEED NOTES
In connection with the Acquisition, CFP Holdings completed a 144A
private placement (the
4
<PAGE>
"Offering") of $115.0 million of 115/8 % Senior Guaranteed Notes due 2004 (the
"Old Notes"). On July 7, 1997, CFP Holdings initiated an exchange offer (the
"Exchange Offer") whereby all of the Old Notes were subsequently exchanged for
115/8% Series B Senior Guaranteed Notes due 2004 (the "Notes"). The terms of the
Notes are identical in all material respects to the Old Notes, except that the
notes have been registered under the Securities Act of 1933, as amended, and
therefore do not bear legends restricting their transfer and do not contain
certain provisions providing for the payment of liquidated damages to the
holders of the Old Notes under certain circumstances relating to the
registration of the Old Notes, which provisions terminated upon the initiation
of the exchange of the Old Notes for the Notes. The Notes bear interest at a
rate of 115/8% and mature on January 15, 2004. The Notes are unconditionally
guaranteed on a senior basis by Quality Foods, Custom Foods and CFP Group.
Interest on the Notes is payable semi-annually on January 15 and July 15,
effective July 15, 1997.
Proceeds from the sale of the Old Notes were used (i) to repay $66.0
million principal amount of term loans, (ii) to repay $25 million of bridge
notes, (iii) to fund the payment of a $16 million cash distribution to holders
of CFP Group's Class A Voting and Nonvoting Common Stock and (iv) to repay $2.8
million of borrowings under a revolving credit facility.
NOTE 4: THE BANK CREDIT AGREEMENT
Concurrent with the Acquisition, CFP Group and CFP Holdings entered
into a Credit Agreement (the "Bank Credit Agreement") with NationsBank of Texas,
N.A. and certain other lenders, which provided the Company with (i) a new 5 1/2
year revolving credit facility (the "Revolving Credit Facility") under which up
to an aggregate of $20.0 million (subject to borrowing base) are available for
borrowing, (ii) a 5 1/2 year $10.0 million term loan, (iii) a 5 1/2 year $41.0
million term loan and (iv) a 7 year $25.0 million term loan. Upon the
consummation of the Offering and the application of the net proceeds thereof,
the $41.0 million term loan and the $25.0 million term loan were repaid in full.
Borrowings and other obligations under the Bank Credit Agreement are guaranteed
on a senior secured basis by CFP Group and by Custom Foods and Quality Foods and
are collateralized by substantially all of the assets of the Company.
The Revolving Credit Facility matures in June 2002. Loans under the
Revolving Credit Facility initially bear interest at a rate equal to 1.25% per
annum over the Agent's Base Rate or 2.50% per annum over the Eurodollar Rate.
The Credit Agreement was amended on August 4, 1997, retroactive to June
30, 1997, in order to adjust certain financial covenants and limitations
included in the Agreement. The Company was in compliance with these covenants
and limitations, as amended, at September 30, 1997.
5
<PAGE>
NOTE 5: INVENTORIES
Inventories consisted of the following:
March 31, September 30,
------- -------
1997 1997
------- -------
Raw materials $ 4,498 $ 6,182
Work-in-process 2,157 6,633
Finished goods 4,685 7,729
------- -------
Total $11,340 $20,544
======= =======
<TABLE>
NOTE 6: LONG-TERM OBLIGATIONS
<CAPTION>
March 31, September 30,
--------- ---------
1997 1997
--------- ---------
<S> <C> <C>
Long-term obligations consisted of the following:
Senior notes payable, interest at 115/8% payable semiannually, $ 115,000 $ 115,000
principal due January 2004
Term note payable to a bank, interest at a reference rate (8.5% at September 30, 10,000 9,667
1997) plus 2% or Eurodollar rate (5.9% at September 30, 1997) plus 3%
payable semiannually, principal payable quarterly at $1.0 million
increasing to $2.2 million with the remaining balance due in June 2002
Revolving loan payable to a bank, interest at a reference rate (8.5% at 500 5,500
September 30, 1997) plus 1.25% or Eurodollar rate (5.9% at September 30,
1997) plus 2.5% payable quarterly, expires June 2002
Debt assumed in connection with the acquisition of Quality Foods:
Revenue bond payable to a government financing authority, interest at a 4,300 4,300
reference rate (5.9% at September 30, 1997) not to exceed 18% payable
monthly, principal payable annually at $100,000 increasing to $400,000
through December 2014
Notes Payable to a government agency, interest at 2%, payable with 2,154 2,055
principal monthly through April 2012, collateralized in a second
position on the Company's Philadelphia facility
Note payable to a government agency, interest at 0.5% payable monthly 1,000 1,000
beginning April 1999 through October 2005, principal and interest
payable inequal monthly installments from November 2005 through April
2010, collateralized in a shared third position on the Company's
Philadelphia facility
Notes payable to a government agency, interest at 5.25% payable monthly 747 731
with principal through February 2012, collateralized in a shared third
position on the company's Philadelphia facility
Capital lease obligations payable in varying monthly installments through 2019, 6,154 6,774
collateralized by buildings and equipment with a net book value of
$6,042,000 and $6,819,161, at March 31, 1997, and September 30, 1997
respectively
--------- ---------
Total 139,855 145,027
Less current portion (1,991) (2,233)
--------- ---------
Long-term debt $ 137,864 $ 142,794
========= =========
</TABLE>
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
General
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial position and
operating results during the periods included in the accompanying consolidated
financial statements.
Results of Operations
Three months ended September 30, 1997 compared to three months ended September
30, 1996.
Net Sales. Net sales increased to $46.6 million for the three month
period ended September 30, 1997 from $20.0 million for the period ended
September 30, 1996. Approximately $21.4 million of this $26.6 million increase
was due to the inclusion of Quality Foods' sales subsequent to the Acquisition.
Sales of Custom Foods' value-added products increased $4.2 million over the
three months ended September 30, 1996, principally as a result of increased
sales to new and existing customers. Further, net sales to Arby's increased $1.0
million during this period as a result of formula pricing during a period of
rising meat costs. Total pounds sold by the company increased to 27.4 million
pounds for the three months ended September 30, 1997 from 15.6 million pounds
for the three months ended September 30, 1996. Pounds sold increased primarily
due to the Quality Foods' results being included and the increased sales of
Custom Foods' value-added products. Pounds sold to Arby's decreased during the
period due to a decrease in demand from, Arby's, partially as a result of
promotional activities. The net sales price increased to $1.70 per pound from
$1.28 per pound primarily as a result of Quality Foods' sales which are at
higher per pound prices than sales to Custom Foods' customers.
Gross Profit. Gross profit increased to $8.1 million for the three
months ended September 30, 1997 from $2.8 million for the three months ended
September 30, 1996. Approximately $4.3 million of this $5.3 million increase was
due to the inclusion of Quality Foods' results subsequent to the Acquisition,
with the remainder of the increase being due to Custom Foods' value-added
products. The gross margin increased to 17.4% for the three months ended
September 30, 1997 from 14.1% for the three months ended September 30, 1996. The
increase in gross margin as a percent of sales was primarily due to the Quality
Foods' results being included.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $4.2 million for the three months ended
September 30, 1997 from $1.3 million for the three months ended September 30,
1996. Approximately $2.0 million of this $2.9 million increase was due to the
inclusion of Quality Foods' results subsequent to the Acquisition. In addition,
$800,000 of the increase is attributable to amortization of goodwill related to
the Acquisition.
Income from Operations. Income from operations increased to $3.9
million for the three months ended September 30, 1997 from $1.6 million for the
three months ended September 30, 1996. The
7
<PAGE>
increase of $2.3 million is primarily due to the inclusion of Quality Foods'
results subsequent to the Acquisition as well as the other items discussed
above.
Interest Expense. Interest expense increased to $4.4 million for the
three months ended September 30, 1997 compared to $881,000 for the three months
ended September 30, 1996, primarily attributable to the Offering and
indebtedness incurred to finance the Acquisition.
Provision for Income Taxes. Provision for income taxes decreased to
zero for the three months ended September 30, 1997 from $132,000 for the three
months ended September 30, 1996. For the three months ended September 30, 1997,
the expected income tax benefit based on the statutory rate was reduced to zero
because the company provided a valuation allowance related to its' net operating
loss carryforwards.
Net Loss. A net loss of $484,000 was incurred for the three months
ended September 30, 1997 versus a net income of $555,000 for the three months
ended September 30, 1996 due to the net impact of the foregoing items.
Six months ended September 30, 1997 compared to six months ended September 30,
1996.
Net Sales. Net sales increased to $91.4 million for the six month
period ended September 30, 1997 from $35.7 million for the six month period
ended September 30, 1996. Approximately $42.7 million of this $55.7 million
increase was due to the inclusion of Quality Foods' sales subsequent to the
Acquisition. Sales of Custom Foods' value-added products increased $7.2 million
over the six months ended September 30, 1996, principally as a result of
increased sales to new and existing customers. Further, net sales to Arby's
increased $5.8 million during this period as a result of increases in sales to
several Eastern U.S. markets pursuant to the new three-year contract, and also
as a result of formula based pricing in a period of rising meat costs. Total
pounds sold by the company increased to 53.4 million pounds for the six months
ended September 30, 1997 from 27.7 million pounds for the six months ended
September 30, 1996. Pounds sold increased primarily due to the Quality Foods'
results being included and the increased sales of Custom Foods' value-added
products. The net sales price increased to $1.71 per pound from $1.29 per pound
primarily as a result of Quality Foods' sales which are at higher per pound
prices than sales to Custom Foods' customers.
Gross Profit. Gross profit increased to $15.6 million for the six
months ended September 30, 1997 from $5.6 million for the six months ended
September 30, 1996. Approximately $8.0 million of this $10.0 million increase
was due to the inclusion of Quality Foods' results subsequent to the
Acquisition, with the remainder of the increase being due to Custom Foods'
value-added products. The gross margin increased to 17.0% for the six months
ended September 30, 1997 from 15.7% for the six months ended September 30, 1996.
The increase in gross margin as a percent of sales was primarily due to the
Quality Foods' results being included.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $8.3 million for the six months ended
September 30, 1997 from $2.6 million for the six months ended September 30,
1996. Approximately $3.8 million of this $5.7 million increase was due to the
inclusion of Quality Foods' results subsequent to the Acquisition. In addition,
$1.6 million of the
8
<PAGE>
increase is attributable to amortization of goodwill related to the Acquisition.
Income from Operations. Income from operations increased to $7.3
million for the six months ended September 30, 1997 from $3.1 million for the
six months ended September 30, 1996. The increase of $4.2 million is exclusively
due to the inclusion of Quality Foods' results subsequent to the Acquisition as
well as the other items discussed above.
Interest Expense. Interest expense increased to $8.6 million for the
six months ended September 30, 1997 compared to $1.7 million for the six months
ended September 30, 1996, primarily attributable to the Offering and
indebtedness incurred to finance the Acquisition.
Provision for Income Taxes. Provision for income taxes decreased to
zero for the six months ended September 30, 1997 from $253,000 for the six
months ended September 30, 1996. For the six months ended September 30, 1997,
the expected income tax benefit based on the statutory rate was reduced to zero
because the company provided a valuation allowance related to its' net operating
loss carryforwards.
Net Loss. A net loss of $1.3 million was incurred for the six months
ended September 30, 1997 versus a net income of $1.1 million for the six months
ended September 30, 1996 due to the net impact of the foregoing items.
Liquidity and Financial Resources
The Acquisition has had a major impact on the Company's financial
condition. After giving effect to the Acquisition, the Offering and the
Recapitalization and the application of the net proceeds therefrom, the
Company's total consolidated indebtedness was $145.0 million at September 30,
1997. Interest payments on the Notes and anticipated interest and principal
payments under the Bank Credit Agreement represent significantly increased
obligations of the Company. The Notes require semi-annual interest payments
which commenced July 1997. Borrowings under the Bank Credit Agreement bear
interest at floating rates and require quarterly interest payments. The Bank
Credit Agreement provides the Company with (i) a $10.0 million Term Loan, which
requires a $1.4 million principal repayment in fiscal year 1998 and increasing
principal repayments in later years, and matures in 2002, and (ii) a Revolving
Credit Facility of $20.0 million with $5.5 million outstanding at September 30,
1997. Approximately $5.6 million of the Revolving Credit Facility is reserved to
provide letters of credit supporting the industrial revenue bond issue with
respect to Quality Foods' Philadelphia facility and other obligations.
The Company's primary sources of liquidity are cash flows from
operations and borrowings under the Revolving Credit Facility. At September 30,
1997 approximately $9.0 million was available to the Company for borrowings
under the Revolving Credit Facility, subject to inventory and accounts
receivable levels. The Company anticipates that its working capital
requirements, capital expenditures and debt service requirements for the next
twelve months will be satisfied through a combination of cash flow from
operations and funds available under the Revolving Credit Facility.
9
<PAGE>
Forward Looking Statements
This report includes "forward looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and section 21E of the Securities
Exchange Act of 1934, as amended. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from the
Company's expectations ("Cautionary Statements") are disclosed in the Company's
Registration Statement filed with the Securities and Exchange Commission, and
incorporated herein by reference, in this filing. All subsequent written and
oral forward-looking statements attributable to the Company or persons acting on
its behalf are expressly qualified in their entirety by the Cautionary
Statements.
10
<PAGE>
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter ended
September 30, 1997. Reference is made to the Company's
Registration Statement and the exhibits filed therewith.
The exhibits filed as part of this form are listed below:
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
11
<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.
CFP Group, Inc.
CFP Holdings, Inc.
Custom Food Products, Inc.
QF Acquisition Corp.
/s/ Eric W. Ek
-------------------------------
November 7, 1997 Eric W. Ek
Vice President,
Chief Financial Officer and
Secretary of CFP Group, Inc.
And CFP Holdings, Inc. and
its subsidiaries
<PAGE>
Exhibit Index
The following Exhibits are filed as part of this report:
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001030776
<NAME> CFP Holdings, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 525
<SECURITIES> 0
<RECEIVABLES> 12,414
<ALLOWANCES> 194
<INVENTORY> 20,544
<CURRENT-ASSETS> 36,427
<PP&E> 31,167
<DEPRECIATION> 5,587
<TOTAL-ASSETS> 140,597
<CURRENT-LIABILITIES> 16,202
<BONDS> 115,000
0
0
<COMMON> 6,055
<OTHER-SE> (26,773)
<TOTAL-LIABILITY-AND-EQUITY> 140,597
<SALES> 91,348
<TOTAL-REVENUES> 91,348
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<TOTAL-COSTS> 75,788
<OTHER-EXPENSES> 8,286
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,562
<INCOME-PRETAX> (1,288)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,288)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,288)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
