<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT No. 1
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): JUNE 1, 2000
Horizon Organic Holding Corporation
-----------------------------------
(Exact name of registrant as specified in its charter)
Delaware 000-24337 84-1405007
----------------------------- ----------- -------------------
(State or other jurisdiction (Commission (IRS Employee
of incorporation) File Number) Identification No.)
6311 Horizon Lane, Longmont, Colorado 80503
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 530-2711
--------------------------------------------------------------
(Former name or former address, if changed since last report)
EXHIBIT INDEX APPEARS ON PAGE 4
<PAGE>
This Amendment No. 1 to Current Report on Form 8-K/A is filed for the
purpose of filing the financial statements of Meadow Farms Limited ("Meadow
Farms") required by Item 7(a) and the pro forma financial information required
by Item 7(b).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS AMENDMENT NO. 1 TO CURRENT
REPORT ON FORM 8-K/A.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The financial statements of
Meadow Farms required by this Item are included beginning on page F-1.
(b) PRO FORMA FINANCIAL INFORMATION. The pro forma financial information
required by this Item is included beginning on page F-1.
(c) EXHIBITS. See Exhibit Index on page 3.
2
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
HORIZON ORGANIC HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
ProForma Condensed Combined Consolidated Statements of Operations for the
year ended December 31, 1999...................................................F-3
ProForma Condensed Combined Consolidated Statements of Operations for the
six months ended June 30, 2000.................................................F-4
Notes to Pro Forma Condensed Combined Consolidated Statements of Operations......F-5
MEADOW FARMS LIMITED
HISTORICAL CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditors' Report.....................................................F-6
Consolidated Company Profit and Loss account for the years ended May 31,
2000 and 1999..................................................................F-7
Consolidated Balance Sheets as of May 31, 2000 and 1999..........................F-8
Cash Flow Statements for the year ended May 31, 2000 and 1999....................F-9
Notes to Consolidated Financial Statements......................................F-10
</TABLE>
F-1
<PAGE>
HORIZON ORGANIC HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
The following unaudited pro forma condensed combined consolidated statements
of operations have been prepared to give effect to the acquisition of Meadow
Farms Limited which is described below.
On June 1, 2000, Horizon Organic Holding Corporation ("Horizon" or
"Company"), through a wholly-owned subsidiary, acquired all of the
outstanding and issued stock of Meadow Farms Limited ("Meadow Farms")
(hereinafter, the "Acquisition"). Meadow Farms was a private company
incorporated in England and Wales, and is based in Devon, England. The
Acquisition includes Meadow Farms' wholly owned subsidiary, Organic Dairies
Limited ("ODL"), which operates a processing and packaging plant that
produces fluid milk in plastic bottles and paperboard cartons. ODL processes
all of the organic milk marketed and sold by Meadow Farms.
The transaction has been accounted for as a purchase and the results of
operations of Meadow Farms are included in the operations of the Company
beginning June 1, 2000. The pro forma condensed combined statements of
operations for the year ended December 31, 1999 and for the six months ended
June 30, 2000 assume the Acquisition was consummated on January 1, 1999.
In management's opinion, all material adjustments necessary to reflect the
transactions are presented in the pro forma adjustments for the year ended
December 31, 1999, and the six months ended June 30, 2000, which are based
upon available information. The pro forma statements do not purport to
present the Company's results of operations that would have resulted had the
acquisition been consummated as of the date or for the periods indicated and
do not purport to project the Company's results of operations at any future
date or for any future period, and should be read in conjunction with the
Company's condensed consolidated financial statements as of and for the three
and six months ended June 30, 2000 included in its Form 10-Q and the
Company's consolidated financial statements as of and for the year ended
December 31, 1999 included in its annual report on Form 10-K.
F-2
<PAGE>
HORIZON ORGANIC HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
HORIZON MEADOW FARMS ADJUSTMENTS COMBINED
-------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Net sales ......................................... $ 84,771 21,322 -- 106,093
Cost of sales ..................................... 56,591 18,633 (2,576)(a) 72,648
-------- ------- ------ --------
Gross profit ................................ 28,180 2,689 2,576 33,445
-------- ------- ------ --------
Operating expenses:
Selling ..................................... 18,399 1,095 -- 19,494
General and administrative .................. 7,400 485 1,846 (b) 9,731
-------- ------- ------ --------
Total operating expenses ................. 25,799 1,580 1,846 29,225
-------- ------- ------ --------
Operating income .................................. 2,381 1,109 730 4,220
-------- ------- ------ --------
Other income (expense):
Interest income (expense), net .............. 151 -- (2,229)(c) (2,078)
Other income (expense), net ................. (93) 95 -- 2
-------- ------- ------ --------
Total other income (expense) ............. 58 95 (2,229) (2,076)
-------- ------- ------ --------
Income before income taxes ............... 2,439 1,204 (1,499) 2,144
Income tax benefit (expense) ...................... (1,037) (361) 540 (d) (858)
-------- ------- ------ --------
Net income ........................................ $ 1,402 843 (959) 1,286
======== ======= ====== ========
Net income per basic and diluted share -
net income per share - basic ................ $ 0.15 0.13
======== ========
net income per share - diluted .............. $ 0.14 0.13
======== ========
Weighted average shares outstanding - basic . 9,668 9,668
======== ========
Weighted average shares outstanding - diluted 9,992 9,992
======== ========
</TABLE>
See notes to pro forma condensed combined consolidated
statements of operations.
F-3
<PAGE>
HORIZON ORGANIC HOLDING CORPORATION
PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
MEADOW FARMS
FIVE MONTHS
ENDED PRO FORMA PRO FORMA
HORIZON MAY 31, 2000 ADJUSTMENTS COMBINED
-------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Net sales ........................................ $ 56,027 11,760 -- 67,787
Cost of sales .................................... 37,397 9,628 (975)(a) 46,050
-------- ------- ---- -------
Gross profit ................................ 18,630 2,132 975 21,737
-------- ------- ---- -------
Operating expenses:
Selling ..................................... 11,813 1,027 -- 12,840
General and administrative .................. 4,921 1,688 752(b) 7,361
-------- ------- ---- -------
Total operating expenses ................. 16,734 2,715 752 20,201
-------- ------- ---- -------
Operating income ................................. 1,896 (583) 223 1,536
-------- ------- ---- -------
Other income (expense):
Interest income (expense), net .............. (491) -- (950)(c) (1,441)
Other income (expense), net ................. (25) 47 -- 22
-------- ------- ---- -------
Total other income (expense) ............. (516) 47 (950) (1,419)
-------- ------- ---- -------
Income before income taxes ............... 1,380 (536) (727) 117
Income tax benefit (expense) ..................... (559) -- 586(d) 27
-------- ------- ---- -------
Net income ....................................... $ 821 (536) (141) 144
======== ======= ==== =======
Net income per basic and diluted share -
net income per share - basic ................ $ 0.08 0.01
======== =======
net income per share - diluted .............. $ 0.08 0.01
======== =======
Weighted average shares outstanding - basic . 9,765 9,765
======== =======
Weighted average shares outstanding - diluted 10,037 10,037
======== =======
</TABLE>
See notes to pro forma condensed combined consolidated
statements of operations.
F-4
<PAGE>
HORIZON ORGANIC HOLDING CORPORATION
NOTES TO PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(1) BASIS OF PRESENTATION
On June 1, 2000, Horizon Organic Holding Corporation (the "Company") acquired
all of the outstanding and issued stock of Meadow Farms Limited ("Meadow
Farms"), a private company incorporated in England and Wales, for
approximately $23.9 million in cash plus Acquisition costs of $1.3 million.
The acquisition included Meadow Farm's wholly owned subsidiary, Organic
Dairies Limited, which operates a processing and packaging plant that
produces fluid milk which is marketed and sold by Meadow Farms. The
acquisition was accounted for as a purchase and the excess of cost over the
fair value of acquired net tangible assets of approximately $24.2 million was
recognized as intangible assets and is being amortized on a straight-line
basis generally over 15 years. The acquisition was financed with the proceeds
from a $25 million Senior Secured Term Note with an annual interest rate of
LIBOR plus a varying margin spread of 1.65% to 2.5% (9.15% at June 30, 2000).
(2) PRO FORMA ADJUSTMENTS
The following pro forma adjustments give effect to the Acquisition of
Meadow Farms as of January 1, 1999.
(a) Reflects the elimination of discretionary bonuses paid to the former
owners and related parties of Meadow Farms. These bonuses will not
be paid after the Acquisition.
(b) Reflects the amortization of intangible assets recorded as a result of
the Acquisition. The excess of cost over the fair value of acquired
net tangible assets of approximately $24.2 million is being
amortized on a straight-line basis generally over 15 years.
(c) Reflects the increase in interest expense due to the $25 million
Senior Secured Term Note obtained to finance the Meadow Farms
acquisition at an assumed interest rate of 9.15%.
(d) Reflects the adjustment for income tax expense. This adjustment
assumes a tax deduction in the United Kingdom for interest relating
to the $18 million of intercompany debt due from Meadow Farms to
the Company computed at an annual rate of 9.15%. This adjustment
also assumes that the tax benefit computed will be realized by
Meadow Farms for the six months ended June 30, 2000.
F-5
<PAGE>
kpmg
Marlborough House
Fitzalan Court
Fitzalan Road
Cardiff CF24 0TE
United Kingdom
REPORT OF THE AUDITORS TO THE MEMBERS OF MEADOW FARMS LIMITED
We have audited the financial statements on pages 5 to 15.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The directors are responsible for preparing the directors' report and the
financial statements in accordance with applicable United Kingdom law and
accounting standards. Our responsibilities, as independent auditors, are
established in the United Kingdom by statute, the Auditing Practices Board
and by our profession's ethical guidance.
We report to you our opinion as to whether the financial statements give a true
and fair view and are properly prepared in accordance with the Companies Act. We
also report to you if, in our opinion, the directors' report is not consistent
with the financial statements, if the company has not kept proper accounting
records, if we have not received all the information and explanations we require
for our audit, or if information specified by law regarding directors'
remuneration and transactions with the company is not disclosed.
We read the other information accompanying the financial statements and consider
whether it is consistent with those statements. We consider the implications for
our report if we become aware of any apparent misstatements or material
inconsistencies with the financial statements.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the state
of the company's affairs as at 31 May 2000 and of its profit for the year then
ended and have been properly prepared in accordance with the Companies Act 1985.
10 August 2000
CHARTERED ACCOUNTANTS
REGISTERED AUDITORS
F-6
<PAGE>
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2000
<TABLE>
<CAPTION>
2000 1999
NOTE L L
<S> <C> <C> <C>
TURNOVER 16,017,383 9,391,569
Cost of sales (14,222,741) (8,793,235)
----------- ----------
GROSS PROFIT 1,794,642 598,334
Administrative expenses (1,427,937) (338,210)
Other operating income 52,039 37,023
----------- ----------
OPERATING PROFIT 418,744 297,147
Income from investments 3 18,639 215
Other interest receivable and similar income 4 6,552 7,418
Interest payable and similar charges 5 (1,120) (368)
----------- ----------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2-5 442,815 304,412
Tax on profit on ordinary activities 6 (129,494) (62,453)
----------- ----------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 313,321 241,959
Dividends on equity shares 7 (72,000) (144,000)
----------- ----------
RETAINED PROFIT FOR THE YEAR 241,321 97,959
=========== ==========
</TABLE>
All of the company's operations are classed as continuing.
The profit and loss account includes all the gains and losses recognized by
the group in both financial years.
F-7
<PAGE>
CONSOLIDATED BALANCE SHEET
AT 31 MAY 2000
<TABLE>
<CAPTION>
2000 1999
NOTE L L L L
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Goodwill 8 683,804 --
Tangible assets 10 1,005,852 228,442
CURRENT ASSETS
Stocks 11 206,960 129,600
Debtors 12 2,537,695 1,749,603
Investments 13 -- 501
Cash at bank and in hand 15,612 150,760
---------- ----------
2,760,267 2,030,464
CREDITORS: amounts falling due within one year 14 (4,010,267) (2,039,871)
---------- ----------
(1,250,000) (9,407)
---------- ---------
TOTAL ASSETS LESS CURRENT LIABILITIES 439,656 219,035
CREDITORS: amounts falling due after more
than one year 15 -- (20,700)
---------- ---------
NET ASSETS 439,656 198,335
========== =========
Capital and reserves
Called up share capital 16 144 144
Profit and loss account 17 439,512 198,191
---------- ---------
SHAREHOLDERS' FUNDS 439,656 198,335
========== =========
</TABLE>
F-8
<PAGE>
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MAY 2000
<TABLE>
<CAPTION>
Note 2000 1999
L L
<S> <C> <C> <C>
Net cash flow (outflow)/inflow from operating activities 18 (95,762) 327,053
Returns on investments and servicing of finance 20 (66,568) (136,950)
Capital expenditure and financial investment 20 (19,365) (97,310)
Taxation 70,599 (58,755)
-------- ------
(Decrease)/increase in cash (111,096) 34,038
======== ======
</TABLE>
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS (NOTE 19)
<TABLE>
<CAPTION>
2000 1999
L L
<S> <C> <C>
(Decrease)/increase in net funds in the year (111,096) 34,038
Net funds at 1 June 1999 126,708 92,670
-------- -------
Net funds at 31 May 2000 15,612 126,708
======== =======
</TABLE>
PURCHASE OF SUBSIDIARY UNDERTAKINGS
<TABLE>
<CAPTION>
L
<S> <C>
NET ASSETS ACQUIRED
Tangible fixed assets 905,660
Stocks 15,040
Taxation payable (53,724)
Creditors (167,846)
---------
699,130
GOODWILL 683,804
---------
1,382,934
=========
SATISFIED BY
Cash 132,934
Consideration unpaid at 31 May 2000 1,250,000
---------
1,382,934
=========
</TABLE>
F-9
<PAGE>
NOTES
(FORMING PART OF THE FINANCIAL STATEMENTS)
1 ACCOUNTING POLICIES
The following accounting policies have been applied consistently in dealing with
items which are considered material in relation to the company's financial
statements.
BASIS OF PREPARATION
The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost accounting rules.
GOODWILL
Purchased goodwill (representing the excess of the fair value of the
consideration given over the fair value of the separable net assets acquired)
arising on business combinations in respect of acquisitions since 1 January 1998
is capitalised. Positive goodwill is amortised to nil by equal annual
instalments over its estimated useful life of 15 years.
FIXED ASSETS AND DEPRECIATION
Depreciation is provided to write off the cost less the estimated residual value
of tangible fixed assets by equal instalments over their estimated useful
economic lives as follows:
Plant and machinery - 25% reducing balance basis
Processing equipment - 25% reducing balance basis
GOVERNMENT GRANTS
Capital based government grants are included within accruals and deferred income
in the balance sheet and credited to operating profit over the estimated useful
economic lives of the assets to which they relate.
STOCKS
Stocks are stated at the lower of cost and net realisable value. In determining
the cost of raw materials, consumables and goods purchased for resale, the
weighted average purchase price is used. For work in progress and finished goods
cost is taken as production cost, which includes an appropriate proportion of
attributable overheads.
F-10
<PAGE>
NOTES (CONTINUED)
TAXATION
The charge for taxation is based on the profit for the year and takes into
account taxation deferred because of timing differences between the treatment of
certain items for taxation and accounting purposes. Provision is made for
deferred tax only to the extent that it is probable that an actual liability
will crystallise.
Advance corporation tax recoverable by deduction from future corporation tax is
carried forward within deferred taxation or as ACT recoverable within debtors as
appropriate.
TURNOVER
Turnover represents the amounts (excluding value added tax) derived from the
provision of goods and services to customers.
2 PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
<TABLE>
<CAPTION>
2000 1999
L L
PROFIT/[LOSS] ON ORDINARY ACTIVITIES BEFORE TAXATION IS STATED AFTER CHARGING:
<S> <C> <C>
Auditors' remuneration:
Audit 2,400 2,400
Depreciation 33,820 42,188
====== ======
Directors' emoluments and other benefits -- --
====== ======
</TABLE>
3 INCOME FROM INVESTMENTS
<TABLE>
<CAPTION>
2000 1999
L L
<S> <C> <C>
Dividends received 18,639 215
====== ======
</TABLE>
4 OTHER INTEREST RECEIVABLE AND SIMILAR INCOME
<TABLE>
<CAPTION>
2000 1999
L L
<S> <C> <C>
Bank interest 6,552 7,418
====== ======
</TABLE>
F-11
<PAGE>
NOTES (CONTINUED)
5 INTEREST PAYABLE AND SIMILAR CHARGES
<TABLE>
<CAPTION>
2000 1999
L L
<S> <C> <C>
On bank loans and overdrafts 1,120 331
On all other loans -- 37
------- -------
1,120 368
======= =======
</TABLE>
6 TAXATION
<TABLE>
<CAPTION>
2000 1999
L000 L000
<S> <C> <C>
UK CORPORATION TAX
Current tax on income for the period 129,494 62,453
Adjustments in respect of prior periods -- --
------- -------
129,494 62,453
======= =======
</TABLE>
7 DIVIDENDS AND OTHER APPROPRIATIONS
<TABLE>
<CAPTION>
2000 1999
L L
<S> <C> <C>
Equity shares:
Dividends paid 72,000 144,000
======= =======
</TABLE>
8 CONSOLIDATED INTANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
Goodwill
L
<S> <C>
COST AND NET BOOK VALUE
At beginning of year --
Additions 683,804
-------
At end of year 683,804
=======
</TABLE>
F-12
<PAGE>
NOTES (CONTINUED)
9 COMPANY TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
LEASEHOLD PLANT AND MOTOR TOTAL
PROPERTY MACHINERY VEHICLES
L L L L
<S> <C> <C> <C> <C>
COST
At beginning of year 87,830 237,338 45,501 370,669
Additions -- -- -- --
Disposals (87,830) (9,208) (20,750) (117,788)
------- ------- ------ --------
At end of year -- 228,130 24,751 252,881
======= ======= ====== ========
DEPRECIATION
At beginning of year -- 129,658 12,569 142,227
Charge for year -- 22,777 11,043 33,820
Released on disposal -- (7,640) (15,718) (23,358)
------- ------- ------ --------
At end of year -- 144,795 7,894 152,689
======= ======= ====== ========
NET BOOK VALUE
AT 31 MAY 2000 -- 83,335 16,857 100,192
------- ------- ------ --------
At 31 May 1999 87,830 107,680 32,932 228,442
======= ======= ====== ========
</TABLE>
F-13
<PAGE>
NOTES (CONTINUED)
10 Group tangible assets
<TABLE>
<CAPTION>
LEASEHOLD PLANT AND MOTOR
PROPERTY MACHINERY VEHICLES TOTAL
L L L L
<S> <C> <C> <C> <C>
COST
At beginning of year 87,830 237,338 45,501 370,669
Additions on purchase of subsidiary -- 1,069,585 2,345 1,071,930
Disposals (87,830) (9,208) (20,750) (117,788)
------- --------- ------- ---------
At end of year -- 1,297,715 27,096 1,324,811
======= ========= ======= =========
DEPRECIATION
At beginning of year -- 129,658 12,569 142,227
Charge for year -- 22,777 11,043 33,820
Disposals -- (7,640) (15,718) (23,358)
Accumulated depreciation on assets acquired -- 166,270 -- 166,270
------- --------- ------- ---------
At end of year -- 311,065 7,894 318,959
======= ========= ======= =========
NET BOOK VALUE
AT 31 MAY 2000 -- 986,650 19,202 1,005,852
------- --------- ------- ---------
At 31 May 1999 87,830 107,680 32,932 228,442
======= ========= ======= =========
</TABLE>
F-14
<PAGE>
NOTES (CONTINUED)
11 STOCKS
<TABLE>
<CAPTION>
GROUP
2000 1999
L L
<S> <C> <C>
Stock 206,960 129,600
========= =========
</TABLE>
12 DEBTORS
<TABLE>
<CAPTION>
GROUP
2000 1999
L L
<S> <C> <C>
Trade debtors 2,132,957 1,449,785
Other debtors 399,859 195,478
Prepayments and accrued income 4,879 3,642
Taxation -- 100,698
--------- ---------
2,537,695 1,749,603
========= =========
</TABLE>
13 FIXED ASSET INVESTMENTS
<TABLE>
<CAPTION>
COUNTRY OF PRINCIPAL CLASS AND
INCORPORATION ACTIVITY PERCENTAGE
OF SHARES
HELD
<S> <C> <C> <C>
SUBSIDIARY UNDERTAKINGS United Kingdom Processing of milk Ordinary share
Organic Dairies Limited capital - 100%
</TABLE>
14 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
GROUP
2000 1999
L L
<S> <C> <C>
Bank loans and overdrafts -- 24,052
Trade creditors 1,709,579 1,062,835
Amounts owed to group undertakings -- --
Corporation tax 197,571 44,452
Amount due on acquisition of subsidiary 1,250,000 --
Other creditors and accruals 844,481 904,392
Accruals and deferred income 8,636 4,140
--------- ---------
4,010,267 2,039,871
========= =========
</TABLE>
F-15
<PAGE>
NOTES (CONTINUED)
15 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
2000
L
<S> <C>
Balance at beginning of year 20,700
Released to profit during year (20,700)
-------
Balance at end of year --
=======
</TABLE>
16 CALLED UP SHARE CAPITAL
<TABLE>
<CAPTION>
1999 2000
L L
<S> <C> <C>
Authorised
Equity: Ordinary shares of L 1 each 100,000 31,000
-----
-------- --------
ALLOTTED, CALLED UP AND FULLY PAID
Equity: Ordinary shares of L1 each 144 144
======== ========
</TABLE>
17 RESERVES
<TABLE>
<CAPTION>
PROFIT
AND LOSS
ACCOUNT
L
<S> <C>
At beginning of year 198,191
Retained profit for the year 241,321
-------
At end of year 439,512
=======
</TABLE>
F-16
<PAGE>
18. RECONCILIATION OF OPERATING PROFIT TO NET CASH (OUTFLOW)/INFLOW FROM
OPERATING ACTIVITIES
<TABLE>
<CAPTION>
1999 2000
L L
<S> <C> <C>
Operating profit 418,744 297,147
Depreciation on tangible fixed assets 33,820 42,188
Increase in stocks (62,320) (66,669)
Increase in debtors (888,789) (767,840)
Increase in creditors 402,783 822,227
-------- --------
Net cash (outflow)/inflow from operating activities (95,762) 327,053
======== ========
</TABLE>
19. ANALYSIS OF NET FUNDS
<TABLE>
<CAPTION>
At 1 June Cash At 31 May
1999 Flows 2000
L L L
<S> <C> <C> <C>
Cash in hand, at bank 150,760 (135,148) 15,612
Overdraft (24,052) 24,052 --
------- -------- ------
Total 126,708 (111,096) 15,612
======= ======== ======
</TABLE>
20. ANALYSIS OF CASH FLOW FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
<TABLE>
<CAPTION>
1999 2000
L L
<S> <C> <C>
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 6,552 7,418
Interest paid (1,120) (368)
Dividends paid (72,000) (144,000)
-------- --------
(66,568) (136,950)
======== ========
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Acquisition of subsidiary (132,934) --
Other investments 19,139 (286)
Purchase of tangible fixed assets -- (172,221)
Receipts from sale of tangible fixed assets 94,430 75,197
-------- --------
(19,365) (97,310)
======== ========
</TABLE>
21. RELATED PARTY DISCLOSURES
The company was controlled during the current, and throughout the previous
period by its directors, who between them owned 54% of the ordinary shares of
the company; and members of their close family who owned the remaining 46% of
the shares.
During the year, the company was supplied with organic milk by three
directors, Mr G Persey, Mr H Persey and Mr R Persey, who all operate farms
where the milk is produced. The transactions in the year for Mr G Persey were
L1,039,940 (1999: L1,067,800) and the sum of L74,510 was unpaid at the
balance sheet date. The transactions in the year for Mr R Persey were
L986,288 (1999: L1,072,856) and the sum of L63,751 was unpaid at the balance
sheet date. The transactions in the year for Mr H Persey were L1,109,717
(1999: L1,094,042), and the sum of L67,986 was unpaid at the balance sheet
date.
See "debtors" and "creditors" for details of amounts owed to and from Organic
Dairies Limited.
F-17
<PAGE>
During the year, the company was provided with management services by
Dunsford Management Consultants, a business of which the director, Mr P
Dunsford is a partner. The value of these services for the year amounted to
L1,177,416 (1999: L178,745). At 31 May 2000 the sum of L289,646 was unpaid.
During the year, the company was provided with administration services by
Lear Browne and Dunsford Limited, a company of which the director, Mr P
Dunsford is a director and shareholder. The value of these services for the
year amounted to L28,039 (1999: L57,668). At 31 May 2000 there were no
amounts owed to or from the company.
During the year, the company was charged for processing, packaging and other
sundry charges by Organic Dairies Limited, a company registered in the UK, of
which Meadow Farms Limited was a 50% shareholder before acquisition. The value
of these charges for the year amounted to L3,766,159 (1999: L1,137,328).
During the year, the company paid rent to a director, Mr G Persey, for its
leaseholder premises at Willand, Devon. These premises are then sub-let to
Meadow Farms Eggs Limited, a company registered in the UK, of which Meadow
Farms Limited was a 50% shareholder. Also, two directors of Meadow Farms
Limited, Mr R Persey and Mr P Dunsford, are also directors of Meadow Farms
Eggs Limited. The amount of rent paid in the year amounted to L18,750 (1999:
L24,253). The amount of rent received in the year amounted to L27,200 (1999:
L32,883). At 31 May 2000, there were no amounts owed to or from the company.
During the year the company made purchases of L8,604 from Meadow Farms Eggs
Limited.
22. POST BALANCE SHEET EVENTS
On 1 June 2000 Horizon Organic Holdings Corporation (a company registered in
the United States of America) through a wholly owned subsidiary (registered in
England and Wales) acquired the entire share capital of the company.
23. ULTIMATE PARENT UNDERTAKING OF LARGER GROUP OF WHICH THE COMPANY IS A
MEMBER
The company is a wholly owned subsidiary undertaking of Horizon Organic
Dairies Limited, a company incorporated in the United Kingdom.
24. DIFFERENCES FROM UNITED STATES ACCOUNTING PRINCIPLES
The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United Kingdom ("U.K. GAAP"),
which differ in certain respects from those principles and practices
generally accepted in the United States ("U.S. GAAP"). Except as noted below,
none of these differences have a material effect on the consolidated
financial statements of the Company.
Under U.S. GAAP, the Company would have been required to reduce the capital
profit and loss account for dividends declared; these dividends of L72,000
and L144,000 during 2000 and 1999, respectively, were expensed under U.K.
GAAP.
<TABLE>
<CAPTION>
2000 U.K. GAAP U.S. GAAP
<S> <C> <C>
CONSOLIDATED PROFIT AND LOSS ACCOUNT
RETAINED PROFIT FOR THE YEAR 226,966 298,966
1999 U.K. GAAP U.S. GAAP
Consolidated profit and loss account
Retained profit for the year 97,959 241,959
</TABLE>
F-18
<PAGE>
SIGNATURE
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, thereto duly authorized.
HORIZON ORGANIC HOLDING CORPORATION
Dated: August 14, 2000 By: /s/ Thomas P. Briggs
--------------------------------------
Thomas P. Briggs
Vice President, Finance and
Administration, Chief Financial
Officer, Treasurer and Assistant
Secretary (principal financial and
accounting officer of the Company)
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
2.1 Share Sale Agreement Dated May 31, 2000 (the "Agreement")
(previously filed as Exhibit 2.1 to the Registrant's Current
Report on Form 8-K dated June 1, 2000 and filed on June 15,
2000). As allowed in Item 601 of Regulation S-K, some of the
schedules to the Agreement have not been filed. A list of the
schedules to the Agreement is contained in the table of contents
of the Agreement. A list of the omitted schedules to the
Agreement is set forth as Exhibit 99.1. The Registrant hereby
agrees to furnish a copy to the Commission of any omitted
schedule upon request.
23.1 Consent of KPMG.
99.1 Omitted Schedule List (previously filed as Exhibit 99.1 to the
Registrant's Current Report on Form 8-K dated June 1, 2000 and
filed on June 15, 2000).
</TABLE>
4
