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
December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from
_____________ To _____________
<TABLE>
Commission File Numbers 333-23893; 333-23893-01; 333-23893-02; 333-23893-03
--------------------------------------
<CAPTION>
CFP HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)
<S> <C> <C>
Delaware 2013 95-4413619
(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 Industrial (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)
</TABLE>
------------------------------------
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
<TABLE>
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<CAPTION>
Class Outstanding at January 31, 1998
----- -------------------------------
<S> <C>
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 3,059
</TABLE>
<PAGE>
CFP Group, Inc. and Subsidiaries
FORM 10-Q
<TABLE>
INDEX
<CAPTION>
Part I Financial Information Page #
------
<S> <C>
Item 1. Financial Statements
Consolidated balance sheets - 1
March 31, 1997 and December 31, 1997
Consolidated statements of operations Three months & nine 2
months ended December 31, 1997 & 1996
Consolidated statements of cash flows - 3
Nine months ended December 31, 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
</TABLE>
<PAGE>
Part I Financial Information
Item 1. Financial Statements
<TABLE>
CFP GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
ASSETS
March 31, December 31,
1997 1997
--------- ---------
(in thousands)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,139 $ 2,794
Accounts receivable, net of allowance for doubtful accounts of $93,000 and
$265,000 at March 31, 1997 and December 31, 1997, respectively 10,719 12,304
Inventories 11,340 18,802
Prepaid expenses and other current assets 2,526 1,834
--------- ---------
Total current assets 26,724 35,734
Property and equipment, net 25,402 26,563
Costs in excess of net assets acquired, net 72,021 69,461
Intangible and other assets, net 8,675 8,018
--------- ---------
Total $ 132,822 $ 139,776
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Current portion of long-term liabilities $ 1,991 $ 2,345
Accounts payable 4,964 9,375
Accrued expenses and other current liabilities 5,067 8,884
--------- ---------
Total current liabilities 12,022 20,604
--------- ---------
Long term liabilities 137,864 139,732
--------- ---------
Commitments and contingencies
Redeemable common stock 2,319 2,319
--------- ---------
Stockholders' 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 shares issued and outstanding (inclusive of
3,011 shares classified as redeemable common stock) 2,204 2,204
Nonvoting common stock - Class B, $.01 par value; 25,000 shares
authorized, 3,321 shares issued and outstanding at March 31, 1997
and 3,059 at December 31, 1997 (inclusive of 2,162 shares classified
as redeemable common stock) 805 623
Stockholders' notes receivable (337) (203)
Accumulated deficit (25,251) (28,699)
--------- ---------
Total stockholders' deficiency (19,383) (22,879)
--------- ---------
Total $ 132,822 $ 139,776
========= =========
<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 Nine Months Ended
--------------------------------- -----------------------------
December 31, December 31, December 31, December 31,
1996 1997 1996 1997
--------- --------- --------- ---------
(in thousands)
<S> <C> <C> <C> <C>
Sales $ 20,624 $ 47,335 $ 56,285 $ 138,683
Cost of sales 18,063 40,660 48,115 116,448
--------- --------- --------- ---------
Gross profit 2,561 6,675 8,170 22,235
Selling, general and administrative expenses 1,536 4,503 4,105 12,789
--------- --------- --------- ---------
Income from operations 1,025 2,172 4,065 9,446
Interest expense 823 4,332 2,543 12,894
--------- --------- --------- ---------
Income (loss) before income taxes 202 (2,160) 1,522 (3,448)
Provision for income taxes 252 -- 505 --
--------- --------- --------- ---------
Net income (loss) $ (50) $ (2,160) $ 1,017 $ (3,448)
========= ========= ========= =========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
2
<PAGE>
<TABLE>
CFP GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
(unaudited)
<CAPTION>
Nine Months Ended
----------------------------
Dec. 31, Dec. 31,
1996 1997
-------- --------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,017 $ (3,448)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 1,608 4,943
Amortization of deferred financing costs and original issue discount 471 962
Deferred income taxes 83 --
Loss on sale of equipment -- 15
Changes in assets and liabilities:
Accounts receivable (1,509) (1,585)
Inventories (979) (7,462)
Prepaid expenses and other current liabilities (511) 697
Income taxes receivables/payable 716 --
Accounts payable (103) 4,411
Accrued expenses and other current liabilities (30) 3,811
-------- --------
Net cash provided by operating activities 763 2,344
-------- --------
Cash flows from investing activities:
Acquisition of property and equipment (1,146) (4,258)
Proceeds from sale of property and equipment -- 1,137
Other assets 693 (435)
-------- --------
Net cash used in investing activities (453) (3,556)
-------- --------
Cash flows from financing activities:
Borrowings under revolving loan facility 9,860 15,000
Repayment of revolving loan facilities (5,525) (12,500)
Proceeds from issuance of long-term debt -- 992
Repayment of long-term debt and capitalized lease obligations (1,884) (1,270)
Deferred financing costs -- (308)
Proceeds from sale of common stock -- 15
Collection of shareholder notes receivable -- 1
Exercise of stock options 101 --
Purchase of common stock (101) (63)
-------- --------
Net cash provided by financing activities 2,451 1,867
-------- --------
Net increase in cash 2,761 655
Cash, beginning of period 847 2,139
-------- --------
Cash, end of period $ 3,608 $ 2,794
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 2,408 8,328
Income taxes -- --
<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
December 31, 1997 and 1996 were 13 week periods. For simplicity of presentation,
the Company has described the interim periods herein as ending on December 31.
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 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 11 5/8% 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
11 5/8% 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 11 5/8% 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) is 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, and on February 5, 1998, retroactive to December 31, 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 December 31, 1997.
5
<PAGE>
NOTE 5: INVENTORIES
Inventories consisted of the following:
March 31, December 31,
1997 1997
------- -------
Raw materials $ 4,498 $ 5,729
Work-in-process 2,157 4,753
Finished goods 4,685 8,320
------- -------
Total $11,340 $18,802
======= =======
<TABLE>
NOTE 6: LONG-TERM OBLIGATIONS
<CAPTION>
March 31, December 31,
1997 1997
--------- ---------
<S> <C> <C>
Long-term obligations consisted of the following:
Senior notes payable, interest at 11 5/8% payable semiannually,
principal due January 2004 $ 115,000 $ 115,000
Term note payable to a bank, interest at a reference rate (8.5% at December
31, 1997) plus 2% or Eurodollar rate (5.8% at December 31, 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 10,000 9,333
Revolving loan payable to a bank, interest at a reference rate (8.5% at
December 31, 1997) plus 1.25% or Eurodollar rate (5.8% at December 31,
1997) plus 2.5% payable quarterly, expires June 2002 500 3,000
Debt assumed in connection with the acquisition of Quality Foods:
Revenue bond payable to a government financing authority, interest at a
reference rate (5.8% at December 31, 1997) not to exceed 18%
payable monthly, principal payable annually at $100,000 increasing
to $400,000 through December 2014 4,300 4,300
Notespayable to a government agency, interest at 2%, payable with
principal monthly through April 2012, collateralized in a second
position on the Company's Philadelphia facility 2,154 2,013
Note payable to a government agency, interest at 0.5% payable monthly
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 1,000 1,000
Notespayable to a government agency, interest at 5.25% payable monthly
with principal through February 2012, collateralized in a shared
third position on the company's Philadelphia facility 747 722
Capital lease obligations payable in varying monthly installments through
2019, collateralized by buildings and equipment with a net book value
of $6,042,000 and $6,473,000, at March 31, 1997, and December 31, 1997
respectively 6,154 6,709
--------- ---------
Total 139,855 142,077
Less current portion (1,991) (2,345)
--------- ---------
Long-term debt $ 137,864 $ 139,732
========= =========
</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 December 31, 1997 compared to three months ended December 31,
1996.
Net Sales. Net sales increased to $47.3 million for the three month period
ended December 31, 1997 from $20.6 million for the period ended December 31,
1996. Approximately $22.5 million of this $26.7 million increase was due to the
inclusion of Quality Foods' sales subsequent to the Acquisition. Sales of Custom
Foods' value-added products increased $2.5 million over the three months ended
December 31, 1996, principally as a result of increased sales to new and
existing customers. Further, net sales to Arby's increased $1.7 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 27.9 million pounds for the three
months ended December 31, 1997 from 16.3 million pounds for the three months
ended December 31, 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 fewer promotional
activities. The net sales price increased to $1.70 per pound from $1.26 per
pound primarily as a result of Quality Foods' sales which are sold at higher per
pound prices than sales to Custom Foods' customers.
Gross Profit. Gross profit increased to $6.7 million for the three months
ended December 31, 1997 from $2.6 million for the three months ended December
31, 1996. Approximately $3.1 million of this $4.1 million increase was due to
the inclusion of Quality Foods' results subsequent to the Acquisition, with the
remainder of the increase being due to increased sales of Custom Foods'
value-added products. The gross margin increased to 14.1% for the three months
ended December 31, 1997 from 12.4% for the three months ended December 31, 1996.
The increase in gross margin as a percent of sales was primarily due to the
Quality Foods' results being included as well as a change in mix at Custom Food
Products towards higher margin value-added products.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $4.5 million for the three months ended
December 31, 1997 from $1.5 million for the three months ended December 31,
1996. Approximately $2.1 million of this $3.0 million increase was due to the
inclusion of Quality Foods' results subsequent to the Acquisition. In addition,
approximately $800,000 of the increase is attributable to amortization of
goodwill related to the Acquisition.
Income from Operations. Income from operations increased to $2.2 million
for the three months ended December 31, 1997 from $1.0 million for the three
months ended December 31, 1996. The
7
<PAGE>`
increase of $1.2 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 $4.3 million for the three
months ended December 31, 1997 compared to $823,000 for the three months ended
December 31, 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 December 31, 1997 from $252,000 for the three months
ended December 31, 1996. For the three months ended December 31, 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 $2.2 million was incurred for the three months
ended December 31, 1997 versus a net loss of $50,000 for the three months ended
December 31 1996 due to the net impact of the foregoing items.
Nine months ended December 31, 1997 compared to nine months ended December 31,
1996.
Net Sales. Net sales increased to $138.7 million for the nine month period
ended December 31, 1997 from $56.3 million for the nine month period ended
December 31, 1996. Approximately $65.3 million of this $82.4 million increase
was due to the inclusion of Quality Foods' sales subsequent to the Acquisition.
Sales of Custom Foods' value-added products increased $9.7 million over the nine
months ended December 31 1996, principally as a result of increased sales to new
and existing customers. Further, net sales to Arby's increased $7.4 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 81.2 million pounds for the nine months ended December 31, 1997
from 44.1 million pounds for the nine months ended December 31, 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 $1.28 per pound primarily as a result of
Quality Foods' sales which are sold at higher per pound prices than sales to
Custom Foods' customers.
Gross Profit. Gross profit increased to $22.2 million for the nine months
ended December 31, 1997 from $8.2 million for the nine months ended December 31,
1996. Approximately $11.1 million of this $14.0 million increase was due to the
inclusion of Quality Foods' results subsequent to the Acquisition, with the
remainder of the increase being primarily due to increased sales of Custom
Foods' value-added products. The gross margin increased to 16.0% for the nine
months ended December 31, 1997 from 14.5% for the nine months ended December 31,
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 $12.8 million for the nine months ended
December 31, 1997 from $4.1 million for the nine months ended December 31, 1996.
Approximately $5.9 million of this $8.7 million increase was due to the
inclusion of Quality Foods' results subsequent to the Acquisition. In addition,
approximately $2.4
8
<PAGE>
million of the increase is attributable to amortization of goodwill related to
the Acquisition.
Income from Operations. Income from operations increased to $9.4 million
for the nine months ended December 31, 1997 from $4.1 million for the nine
months ended December 31, 1996. The increase of $5.3 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 $12.9 million for the nine
months ended December 31, 1997 compared to $2.5 million for the nine months
ended December 31, 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 nine months ended December 31, 1997 from $505,000 for the nine months
ended December 31, 1996. For the nine months ended December 31, 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 $3.4 million was incurred for the nine months ended
December 31, 1997 versus a net income of $1.0 million for the nine months ended
December 31, 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. The Company's total consolidated indebtedness was $142.1 million at
December 31, 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 $3.0 million outstanding at
December 31, 1997. Approximately $6.2 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 December 31, 1997
approximately $10.8 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.
As previously announced, the Company has signed a letter of intent to
acquire a value-added beef processing company for a proposed purchase price of
less than $15 million. The Company plans to
9
<PAGE>
finance the transaction with the proceeds from an equity offering. However,
there can be no assurance that such acquisition shall actually occur or that the
company will be able to secure financing for such transactions.
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
December 31, 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
- ----------- -----------
10.1 The Second Amendment and limited waiver to amended and
restated credit agreement dated as of February 5, 1998 among
CFP Holdings, Inc., CFP Group, Inc., the financial
institutions listed on the signature pages therein,
NationsBank of Texas, N.A., as administrative agent and Fleet
National Bank, as documentation agent.
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.
February 9, 1998 /s/ Eric W. Ek
------------------------------
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
- ----------- -----------
10.1 The Second Amendment and limited waiver to amended and
restated credit agreement dated as of February 5, 1998 among
CFP Holdings, Inc., CFP Group, Inc., the financial
institutions listed on the signature pages therein,
NationsBank of Texas, N.A., as administrative agent and Fleet
National Bank, as documentation agent.
27 Financial Data Schedule
EXHIBIT 10.1
EXECUTION
CFP GROUP, INC.
CFP HOLDINGS, INC.
SECOND AMENDMENT AND LIMITED WAIVER
TO AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDMENT AND LIMITED WAIVER TO AMENDED AND
RESTATED CREDIT AGREEMENT (this "Amendment") is dated as of February 5, 1998 and
entered into by and among CFP Holdings, Inc., a Delaware corporation
("Company"), CFP Group, Inc., a Delaware corporation ("Parent"), the financial
institutions listed on the signature pages hereof ("Lenders"), Nationsbank of
Texas, N.A., as administrative agent for Lenders (in such capacity
"Administrative Agent"), and Fleet National Bank, as documentation agent (in
such capacity, "Documentation Agent"), and, for purposes of Section 4 hereof,
the Credit Support Parties (as defined in Section 4 hereof) listed on the
signature pages hereof, and is made with reference to that certain Amended and
Restated Credit Agreement dated as of May 15, 1997, as amended (the "Credit
Agree ment"), by and among Company, Parent, Lenders, Administrative Agent, and
Documentation Agent. Capitalized terms used herein without definition shall have
the same meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, Company and Lenders desire to amend the Credit
Agreement to adjust the financial covenants set forth therein, and make certain
other amendments as set forth below;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
Section 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 Amendments to Section 1: Provisions Relating to Defined
Terms
Subsection 1.1 of the Credit Agreement is hereby amended by
adding the following defined term in its proper alphabetical position:
"Preferred Stock Issuance Date" means the date, on or prior to
March 31, 1998, on which Company issues its "Senior Cumulative Redeemable
Preferred Stock," substantially on the terms described in the private placement
memorandum delivered to the
1
<PAGE>
Lenders prior to February 5, 1998 and otherwise in accordance with Section 2 of
the Second Amendment and Limited Waiver to this Agreement dated as of February
5, 1998.
1.2 Amendments to Section 7: Company's Negative Covenants
A. Prior to the Preferred Stock Issuance Date (or if the
Preferred Stock Issuance Date does not occur on or prior to March 31, 1998), the
following amendments to Section 7 of the Credit Agreement shall apply; provided
that from and after the Preferred Stock Issuance Date the amendments set forth
in this subsection 1.2A shall be replace by the amendments set forth in
subsection 1.2B hereof:
1. Minimum Interest Coverage Ratio.
Subsection 7.6A of the Credit Agreement is hereby amended by
deleting the table set forth therein in its entirety and substituting
the following therefor:
Minimum Interest
Approximate Date Coverage Ratio
================================ ==============================
March 31, 1997 1.15:1.00
June 30, 1997 1.25:1.00
September 30, 1997 1.25:1.00
December 31, 1997 1.15:1.00
March 31, 1998 1.15:1.00
June 30, 1998 1.15:1.00
September 30, 1998 1.20:1.00
December 31, 1998 1.35:1.00
March 31, 1999 1.40:1.00
June 30, 1999 1.70:1.00
September 30, 1999 1.70:1.00
December 31, 1999 1.90:1.00
March 31, 2000 1.90:1.00
June 30, 2000 1.90:1.00
September 30, 2000 1.90:1.00
December 31, 2000 2.00:1.00
2
<PAGE>
Minimum Interest
Approximate Date Coverage Ratio
================================ ==============================
March 31, 2001 2.00:1.00
June 30, 2001 2.00:1.00
September 30, 2001 2.00:1.00
December 31, 2001
and each Fiscal Quarter's
end thereafter 2.00:1.00
================================ ==============================
2. Minimum Fixed Charge Coverage Ratio.
Subsection 7.6B of the Credit Agreement is hereby amended by
deleting the table set forth therein in its entirety and substituting
the following therefor:
Minimum Fixed
Charge Coverage
Approximate Date Ratio
================================ ==============================
March 31, 1997 N/A
June 30, 1997 1.00:1.00
September 30, 1997 1.00:1.00
December 31, 1997 0.75:1.00
March 31, 1998 0.75:1.00
June 30, 1998 0.75:1.00
September 30, 1998 0.75:1.00
December 31, 1998 0.80:1.00
March 31, 1999 1.00:1.00
June 30, 1999 1.20:1.00
September 30, 1999 1.30:1.00
December 31, 1999 1.30:1.00
March 31, 2000 1.30:1.00
June 30, 2000 1.30:1.00
September 30, 2000 1.30:1.00
3
<PAGE>
Minimum Fixed
Charge Coverage
Approximate Date Ratio
================================ ==============================
December 31, 2000 1.40:1.00
March 31, 2001 1.40:1.00
June 30, 2001 1.40:1.00
September 30, 2001 1.40:1.00
December 31, 2001
and each Fiscal Quarter's
end thereafter 1.40:1.00
================================ ==============================
3. Maximum Leverage Ratio.
Subsection 7.6C of the Credit Agreement is hereby amended by
deleting the table set forth therein in its entirety and substituting
the following therefor:
Maximum Leverage
Approximate Date Ratio
================================ ==============================
December 31, 1997 7.15:1.00
March 31, 1998 7.60:1.00
June 30, 1998 7.30:1.00
September 30, 1998 7.55:1.00
December 31, 1998 6.50:1.00
March 31, 1999 6.25:1.00
June 30, 1999 5.00:1.00
September 30, 1999 5.00:1.00
December 31, 1999 4.25:1.00
March 31, 2000 4.25:1.00
June 30, 2000 4.25:1.00
September 30, 2000 4.25:1.00
December 31, 2000 3.50:1.00
March 31, 2001 3.50:1.00
4
<PAGE>
Maximum Leverage
Approximate Date Ratio
================================ ==============================
June 30, 2001 3.50:1.00
September 30, 2001 3.50:1.00
December 31, 2001
and each Fiscal Quarter's
end thereafter 3.00:1.00
================================ ==============================
4. Minimum Consolidated Adjusted EBITDA.
Subsection 7.6D of the Credit Agreement is hereby amended by
deleting the table set forth therein in its entirety and substituting
the following therefor:
Minimum Consolidated
Approximate Date Adjusted EBITDA
================================ ==============================
March 31, 1997 $ 4,300,000
June 30, 1997 $ 9,000,000
September 30, 1997 $14,300,000
December 31, 1997 $19,100,000
March 31, 1998 $18,600,000
================================ ==============================
5. Consolidated Capital Expenditures. Subsection 7.8 of the
Credit Agreement is hereby amended by deleting the first clause thereto
and substituting therefor "Parent shall not permit its Subsidiaries to,
make or incur Consolidated Capital Expenditures in an aggregate amount
in excess of $4,700,000 for the Fiscal Year ending March 31, 1998,
$5,500,000 for the Fiscal Year ending March 31, 1999 and $5,000,000 for
any Fiscal Year thereafter;"
B. From and after the Preferred Stock Issuance Date, the
amendments set forth in subsection 1.2A hereof shall be deleted and the
following amendments to Section 7 of the Credit Agreement shall apply:
1. Minimum Interest Coverage Ratio.
Subsection 7.6A of the Credit Agreement shall be amended by
deleting the table set forth therein in its entirety and substituting
the following therefor:
5
<PAGE>
Minimum Interest
Approximate Date Coverage Ratio
================================ ==============================
March 31, 1997 1.15:1.00
June 30, 1997 1.25:1.00
September 30, 1997 1.25:1.00
December 31, 1997 1.15:1.00
March 31, 1998 1.15:1.00
June 30, 1998 1.20:1.00
September 30, 1998 1.25:1.00
December 31, 1998 1.40:1.00
March 31, 1999 1.50:1.00
June 30, 1999 1.70:1.00
September 30, 1999 1.70:1.00
December 31, 1999 1.90:1.00
March 31, 2000 1.90:1.00
June 30, 2000 1.90:1.00
September 30, 2000 1.90:1.00
December 31, 2000 2.00:1.00
March 31, 2001 2.00:1.00
June 30, 2001 2.00:1.00
September 30, 2001 2.00:1.00
December 31, 2001
and each Fiscal Quarter's
end thereafter 2.00:1.00
================================ ==============================
2. Minimum Fixed Charge Coverage Ratio.
Subsection 7.6B of the Credit Agreement shall be further
amended by deleting the table set forth therein in its entirety and
substituting the following therefor:
6
<PAGE>
Minimum Fixed
Charge Coverage
Approximate Date Ratio
================================ ==============================
March 31, 1997 N/A
June 30, 1997 1.00:1.00
September 30, 1997 1.00:1.00
December 31, 1997 0.75:1.00
March 31, 1998 0.75:1.00
June 30, 1998 0.75:1.00
September 30, 1998 0.80:1.00
December 31, 1998 0.95:1.00
March 31, 1999 1.00:1.00
June 30, 1999 1.20:1.00
September 30, 1999 1.20:1.00
December 31, 1999 1.30:1.00
March 31, 2000 1.30:1.00
June 30, 2000 1.30:1.00
September 30, 2000 1.30:1.00
December 31, 2000 1.40:1.00
March 31, 2001 1.40:1.00
June 30, 2001 1.40:1.00
September 30, 2001 1.40:1.00
December 31, 2001
and each Fiscal Quarter's
end thereafter 1.40:1.00
================================ ==============================
3. Maximum Leverage Ratio.
Subsection 7.6C of the Credit Agreement shall be amended by
deleting the table set forth therein in its entirety and substituting
the following therefor:
7
<PAGE>
Maximum Leverage
Approximate Date Ratio
================================ ==============================
December 31, 1997 7.15:1.00
March 31, 1998 7.40:1.00
June 30, 1998 7.00:1.00
September 30, 1998 7.00:1.00
December 31, 1998 6.00:1.00
March 31, 1999 5.50:1.00
June 30, 1999 5.00:1.00
September 30, 1999 5.00:1.00
December 31, 1999 4.25:1.00
March 31, 2000 4.25:1.00
June 30, 2000 4.25:1.00
September 30, 2000 4.25:1.00
December 31, 2000 3.50:1.00
March 31, 2001 3.50:1.00
June 30, 2001 3.50:1.00
September 30, 2001 3.50:1.00
December 31, 2001
and each Fiscal Quarter's
end thereafter 3.00:1.00
================================ ==============================
4. Minimum Consolidated Adjusted EBITDA.
Subsection 7.6D of Credit Agreement shall be amended by
deleting the table set forth therein in its entirety and substituting
the following therefor:
Minimum Consolidated
Approximate Date Adjusted EBITDA
================================ ==============================
March 31, 1997 $ 4,300,000
June 30, 1997 $ 9,000,000
8
<PAGE>
September 30, 1997 $14,300,000
December 31, 1997 $19,100,000
March 31, 1998 $18,600,000
================================ ==============================
5. Consolidated Capital Expenditures. Subsection 7.8 of the
Credit Agreement shall be amended by deleting the first clause thereto
and substituting therefor "Parent shall not permit its Subsidiaries to,
make or incur Consolidated Capital Expenditures in an aggregate amount
in excess of $4,700,000 for the Fiscal Year ending March 31, 1998,
$5,500,000 for the Fiscal Year ending March 31, 1999 and $5,000,000 for
any Fiscal Year thereafter;"
Section 2. LIMITED WAIVER
A. Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of Company and the Credit Support
Parties herein contained, Lenders hereby waive and modify compliance with the
provisions of subsection 2.4B(iii)(d) of the Credit Agreement to the extent that
such provisions require that the Net Securities Proceeds from the issuance of
the Company's "Senior Cumulative Redeemable Preferred Stock" be used to prepay
the Loans; provided that (x) such Senior Cumulative Redeemable Preferred Stock
is issued prior to March 31, 1998 substantially on the terms described in the
private placement memorandum delivered to the Lenders prior to the date hereof;
(y) the gross proceeds of such issuance does not exceed $15,000,000 and the Net
Securities Proceeds of such issuance are used, prior to March 31, 1998, for the
purposes described in such private placement memorandum; and (z) to the extent
any Person becomes a Subsidiary of Company upon application of the Net
Securities Proceeds in accordance with the foregoing, each of Company and the
other Credit Support Parties shall comply with the provisions of Section 6.8 of
the Credit Agreement and all other applicable provisions of the Loan Documents.
B. Without limiting the generality of the provisions of
subsection 10.6 of the Credit Agreement, the waiver set forth in this Section 2
hereof shall be limited precisely as written and relates solely to the
noncompliance by Company with the provisions of subsections 2.4B(iii)(d) in the
manner and to the extent described in this Section 2, and nothing in this
Amendment shall be deemed to (a) constitute a waiver of compliance by Borrowers
with respect to (i) subsection 2.4B(iii)(d) in any other instance or (ii) any
other term, provision or condition of the Credit Agreement or any other
instrument or agreement referred to therein or (b) prejudice any right or remedy
that Administrative Agent or any Lender may now have (except to the extent such
right or remedy was based upon existing defaults that will not exist after
giving effect to this Amendment) or may have in the future under or in
connection with the Credit Agreement or any other instrument or agreement
referred to herein.
Section 3. CONDITIONS TO EFFECTIVENESS
9
<PAGE>
Sections 1 and 2 of this Amendment shall become effective upon
the date hereof (the "Second Amendment Effective Date"); provided that if the
following conditions subsequent are not satisfied on or before February 13,
1998, then Sections 1 and 2 shall be deemed to never have been effective:
A. Each of Company and Parent shall deliver to Lenders (or to
Administra tive Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following, each, unless
otherwise noted, dated the Second Amendment Effective Date:
(i) Copies of its Certificate of Incorporation,
certified as of the Second Amendment Effective Date by its corporate
secretary or an assistant secretary as being the true and complete copy
thereof, together with a good standing certificate from the Secretary
of State of the State of Delaware, dated a recent date prior to the
Second Amendment Effective Date;
(ii) Copies of its Bylaws, certified as of the Second
Amendment Effective Date by its corporate secretary or an assistant
secretary as being a true and complete copy thereof;
(iii) Resolutions of its Board of Directors approving
and authorizing the execution, delivery, and performance of this
Amendment and the performance of the Amended Agreement (as hereinafter
defined), certified as of the Second Amend ment Effective Date by its
corporate secretary or an assistant secretary as being in full force
and effect without modification or amendment; and
(iv) Signature and incumbency certificates of its
officers executing this Amendment.
B. Lenders and their respective counsel shall have received
originally executed copies of one or more favorable written opinions of
O'Sullivan, Graev & Karabell LLP, counsel for Company, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, dated as of the
Second Amendment Effective Date, with respect to the enforceability of this
Amendment and the Amended Agreement (as hereinafter defined) and as to such
other matters as Administrative Agent acting on behalf of Lenders may reasonably
request.
C. Company, Parent, Credit Support Parties and Lenders shall
have executed a counterpart of this Amendment and Administrative Agent and
Company shall have received written or telephonic notification of such execution
and authorization of delivery thereof.
D. All corporate and other proceedings taken or to be taken in
connection with the transactions contemplated hereby and all documents
incidental thereto not previously found acceptable by Administrative Agent,
acting on behalf of Lenders, and its counsel shall be satisfactory in form and
substance to Administrative Agent and such counsel, and
10
<PAGE>
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
Section 4. ACKNOWLEDGEMENT AND CONSENT
Company is a party to the Borrower Pledge Agreement, the
Borrower Security Agreement and the Collateral Account Agreement, in each case,
as amended through the Second Amendment Effective Date, pursuant to which
Company has created Liens in favor of Administrative Agent on certain Collateral
to secure the Obligations. Parent is a party to the Parent Guaranty, the Parent
Pledge Agreement and the Parent Security Agreement, in each case, as amended
through the Second Amendment Effective Date, pursuant to which Parent has (i)
guarantied the Obligations and (ii) created Liens in favor of Administrative
Agent on certain Collateral to secure the Obligations. Q.F. Acquisition is a
party to the Subsidiary Guaranty, the Subsidiary Pledge Agreement, the
Subsidiary Security Agreement, the Subsidiary Trademark Security Agreement, the
Subsidiary Patent Security Agreement, and the Mortgages in each case, as amended
through the Second Amendment Effective Date, pursuant to which Q.F. Acquisition
has (i) guarantied the Obligations and (ii) created Liens in favor of
Administrative Agent on certain Collateral to secure the Obligations. Custom
Foods is a party to the Subsidiary Guaranty, the Subsidiary Pledge Agreement,
the Subsidiary Security Agreement, the Subsidiary Trademark Security Agreement
and the Subsidiary Patent Security Agreement, in each case, as amended through
the Second Amendment Effective Date, pursuant to which Custom Foods has (i)
guarantied the Obligations and (ii) created Liens in favor of Administrative
Agent on certain Collateral to secure the Obligations. Company, Parent, Q.F.
Acquisition and Custom Foods are collectively referred to herein as the "Credit
Support Parties", and the Subsidiary Guaranty, the Subsidiary Pledge Agreement,
the Subsidiary Security Agreement, the Subsidiary Trademark Security Agreement,
the Subsidiary Patent Security Agreement, the Parent Guaranty, the Parent Pledge
Agreement, the Parent Security Agreement, the Collateral Account Agreement, the
Mortgages, the Borrower Security Agreement and the Borrower Pledge Agreement are
collectively referred to herein as the "Credit Support Documents".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Amendment. Each Credit Support Party hereby confirms that each Credit Support
Document to which it is a party or otherwise bound and all Collateral encumbered
thereby will continue to guaranty or secure, as the case may be, to the fullest
extent possible the payment and performance of all "Obligations," "Guarantied
Obligations" and "Secured Obligations," as the case may be (in each case as such
terms are defined in the applicable Credit Support Document), including without
limitation the payment and performance of all such "Obligations," "Guarantied
Obligations" or "Secured Obligations," as the case may be, in respect of the
Obligations of Company now or hereafter existing under or in respect of the
Amended Agreement and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be
11
<PAGE>
impaired or limited by the execution or effectiveness of this Amendment. Each
Credit Support Party represents and warrants that all representations and
warranties contained in the Amended Agreement and the Credit Support Documents
to which it is a party or otherwise bound are true, correct and complete in all
material respects on and as of the Second Amendment Effective Date to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date.
Each Credit Support Party (other than Company) acknowledges and
agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Amendment, such Credit Support Party is not required by the terms of the
Credit Agreement or any other Loan Document to consent to the amendments to the
Credit Agreement effected pursuant to this Amendment and (ii) nothing in the
Credit Agreement, this Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
Section 5. COMPANY'S AND PARENT'S
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Company and Parent
represent and warrant to each Lender that the following statements are true,
correct and complete:
A. Corporate Power and Authority. Company and Parent have all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform their respective
obligations under, the Credit Agreement as amended by this Amendment (the
"Amended Agreement").
B. Authorization of Agreements. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of Company and Parent.
C. No Conflict. The execution and delivery by Company and
Parent of this Amendment and the performance by Company and Parent of the
Amended Agreement do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to Parent or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Parent
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Parent or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Parent or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of Parent or any of its Subsidiaries, or
(iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Parent or any of its Subsidiaries.
D. Governmental Consents. The execution and delivery by Company
and Parent of this Amendment and the performance by Company and Parent of the
Amended
12
<PAGE>
Agreement do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
E. Binding Obligation. This Amendment and the Amended Agreement
have been duly executed and delivered by Company and Parent and are the legally
valid and binding obligations of each of Company and Parent, enforceable against
each of Company and Parent in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Second Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
G. Absence of Default. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
Section 6. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the
Other Loan Documents.
(i) On and after the Second Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy
of Administrative Agent or any Lender under, the Credit Agreement or
any of the other Loan Documents.
B. Fees and Expenses. Company acknowledges that all costs, fees
and expenses as described in subsection 10.2 of the Credit Agreement incurred by
Administrative
13
<PAGE>
Agent and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of Company.
C. Headings. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
CFP HOLDINGS, INC.
By:_________________________________________
Name:
Title:
CFP GROUP, INC.
By:_________________________________________
Name:
Title:
Q.F. ACQUISITION CORP. (for purposes of
Section 4 only), as a Credit Support Party
By:_________________________________________
Name:
Title:
CUSTOM FOOD PRODUCTS, INC. (for
purposes of Section 4 only), as a Credit Support
Party
By:_________________________________________
Name:
Title:
S-1
<PAGE>
NATIONSBANK OF TEXAS, N.A., individually
and as Administrative Agent
By:_________________________________________
Name:
Title:
FLEET NATIONAL BANK, individually and
as Documentation Agent
By:_________________________________________
Name:
Title:
S-2
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001030776
<NAME> CFP Holdings, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,794
<SECURITIES> 0
<RECEIVABLES> 12,569
<ALLOWANCES> 265
<INVENTORY> 18,802
<CURRENT-ASSETS> 35,734
<PP&E> 32,821
<DEPRECIATION> 6,258
<TOTAL-ASSETS> 139,776
<CURRENT-LIABILITIES> 20,604
<BONDS> 115,000
0
0
<COMMON> 8,342
<OTHER-SE> (28,902)
<TOTAL-LIABILITY-AND-EQUITY> 139,776
<SALES> 138,683
<TOTAL-REVENUES> 138,683
<CGS> 116,448
<TOTAL-COSTS> 116,448
<OTHER-EXPENSES> 12,789
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,894
<INCOME-PRETAX> (3,448)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,448)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,448)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
