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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
(Check One): [X] Form 10-K [ ] Form 11-K [ ] Form 20-F
[ ] Form 10-Q [ ] Form N-SAR
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SEC FILE NUMBER
For Period Ended: June 30, 1999 333-37081
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[ ] Transition Report on Form 10-K -----------------
[ ] Transition Report on Form 20-F CUSIP NUMBER
[ ] Transition Report on Form 11-K -----------------
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended:
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Read Instruction (on last page) Before Preparing Form. Please Print or Type.
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
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If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
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PART I. REGISTRANT INFORMATION
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Full Name of Registrant: Doskocil Manufacturing Company, Inc.
Former Name if Applicable: N/A
Address of Principal Executive Office (Street and Number): 4209 Barnett
Boulevard
City, State and Zip Code: Arlington, Texas 76017
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PART II. RULES 12b-25 (b) AND (c)
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If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following
should be completed. (Check box if appropriate.)
[X] (a) The reasons described in reasonable detail in Part III of this form
could not be eliminated without unreasonable effort or expense;
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[X] (b) The subject annual report, semi-annual report, transition report on
Form 10-K, 20-F, 11-K or Form N-SAR, or portion thereof will be filed
on or before the fifteenth calendar day following the prescribed due
date; or the subject quarterly report or transition report on Form
10-Q, or portion thereof will be filed on or before the fifth
calendar day following the prescribed due date; and
[ ] (c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
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PART III. NARRATIVE
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State below in reasonable detail the reasons why Form 10-K, 11-K, 20-F, 10-Q,
N-SAR, or the transition report or portion thereof could not be filed within
the prescribed time period. (Attach Extra Sheets if Needed.)
On September 17, 1997, the Company entered into a credit facility (the
"Existing Credit Agreement") with a syndicate of lending institutions party
thereto (the "Lenders"), which provides for an aggregate principal amount of
loans of up to $110 million consisting of a $27.5 million revolving credit
facility and term loans in an initial aggregate principal amount of $82.5
million ($ 78.1 million after giving effect to principal payments thereon). The
Existing Credit Agreement was amended in February 1999, May 1999 and August
1999 and, as part of the amendments in February and May, waivers of certain
covenant defaults were granted.
On September 10, 1999, the Company gave notice to the Lenders that the Company
may not be in compliance with the interest coverage ratio, fixed charge
coverage ratio, and the minimum EBITDA requirements of the Existing Credit
Agreement. The Company has obtained a forbearance from the Lenders pursuant to
which the Lenders have agreed not to accelerate the repayment of the
indebtedness or take any other remedies against the Company prior to October
15, 1999, absent a new event of default after the effective date of
forbearance. The Company is in discussions with the Lenders to amend further
the Existing Credit Agreement and to obtain a waiver of the June 30, 1999
defaults. The Company has just recently received a report from the independent
financial advisor to the Lenders which the Lenders requested in connection with
their discussions with the Company concerning the Existing Credit Agreement.
The Company has not been able to complete its Report on Form 10-K primarily due
to ongoing bank negotiations and the implementation of new computer and
information systems following the end of the Company's fiscal year.
The Company currently anticipates the filing of its annual report on Form 10-K
to occur no later than 15 calendar days following the prescribed due date in
accordance with Rule 12b-25.
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PART IV. OTHER INFORMATION
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(1) Name and telephone number of person to contact in regard to this
notification
John Casey (817) 467-5116 x1169
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(Name) (Area Code)(Telephone Number)
(2) Have all other periodic reports required under section 13 or 15(d) of the
Securities Exchange Act of 1934 or section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period that
the registrant was required to file such report(s) been filed? If the
answer is no, identify report(s).
[X] Yes [ ] No
(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected
by the earnings statements to be included in the subject report or portion
thereof?
[X] Yes [ ] No
If so: attach an explanation of the anticipated change, both narratively and
quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
SEE ATTACHED "EXHIBIT A."
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Doskocil Manufacturing Company, Inc.
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(Name of Registrant as specified in charter)
has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: 9-29-99 By: /s/ JOHN CASEY
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Name: John Casey
Title: Chief Financial Officer
INSTRUCTION: The form may be signed by an executive officer of the registrant
or by any other duly authorized representative. The name and title of the
person signing the form shall be typed or printed beneath the signature. If the
statement is signed on behalf of the registrant by an authorized representative
(other than an executive officer), evidence of the representative's authority
to sign on behalf of the registrant shall be filed with the form.
ATTENTION
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C 1001).
GENERAL INSTRUCTIONS
1. This form is required by Rule 12b-25 (17 CFR 240.12b-25) of the General
Rules and Regulations under the Securities Exchange Act of 1934.
2. One signed original and four conformed copies of this form and amendments
thereto must be completed and filed with the Securities and Exchange
Commission, Washington, D.C. 20549, in accordance with Rule 0-3 of the
General Rules and Regulations under the Act. The information contained in
or filed with the form will be made a matter of public record in the
Commission files.
3. A manually signed copy of the form and amendments thereto shall be filed
with each national securities exchange on which any class of securities of
the registrant is registered.
4. Amendments to the notifications must also be filed on form 12b-25 but need
not restate information that has been correctly furnished. The form shall
be clearly identified as an amended notification.
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5. Electronic Filers. This form shall not be used by electronic filers unable
to timely file a report solely due to electronic difficulties. Filers
unable to submit a report within the time period prescribed due to
difficulties in electronic filing should comply with either Rule 201 or
Rule 202 of Regulation S-T ((S)232.201 or (S)232.202 of this chapter) or
apply for an adjustment in filing date pursuant to Rule 13(b) of
Regulation S-T ((S)232.13(b) of this chapter.
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EXHIBIT A
Doskocil Manufacturing Company, Inc.
Statements of Operations
<TABLE>
<CAPTION>
Twelve Months Ended
($ in thousands)
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June 30, June 30,
1999 1998
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<S> <C> <C>
Net sales $ 169,932 $ 147,156
Cost of goods sold 121,120 99,562
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Gross profit 48,812 47,594
Selling, general and administrative expense 43,135 31,540
Impairment of long-lived assets 4,633 --
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Operating income 1,044 16,054
Other (income) expense:
Interest expense and other financing costs 17,719 17,461
Interest income (34) (124)
Other, net 89 (232)
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Total other expense 17,774 17,105
Income (loss) before income taxes (16,730) (1,051)
Provision of income taxes -- 1,869
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Net (loss) income (16,730) (2,920)
Preferred stock dividends 916 1,184
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Net (loss) income attributable to common shareholders $ (17,646) $ (4,104)
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Net (loss) per common share (basic and diluted) $ (5.68) $ (1.50)
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Weighted average common shares outstanding 3,105 2,740
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</TABLE>
The Company estimates the above results for the year ended June 30, 1999. The
year end audit is not complete and the above results are, therefore,
preliminary and subject to change.
NET SALES increased to $169.9 million in fiscal 1999 from $147.2 million in
fiscal 1998, an increase of $22.7 million, or 15.4%. The increase was due to
the inclusion of Dogloo net sales for the entire year, increased pet sales and
higher outside resin sales. Sporting goods sales decreased primarily due to the
loss of two customers and management's decision in the third quarter to divest
the Company of certain non-core sporting good assets.
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GROSS PROFIT increased to $48.8 million for fiscal 1999, up from $47.6 million
in the period of the prior year, an increase of $1.2 million. As a percentage
of sales, gross margin decreased to 28.7% for fiscal 1999 from 32.3% in the
comparable period of the prior year. The Company's gross profit in fiscal 1999
was unfavorably affected by a failure to manufacture sufficient inventory in
fiscal year 1998 and the inability to accurately forecast demand in the first
part of the fiscal year compounded operational problems. In addition, during
the first half of the fiscal year, the Company experienced a failed software
system conversion that hampered the Company's ability to manufacture, ship and
invoice during its second fiscal quarter. Margins for the year reflect the
higher associated costs including $1.4 million for outside storage, $1.6
million of inbound freight and higher expenses for outside molders. The Company
also experienced higher costs for direct labor in manufacturing and higher
distribution center and fulfillment costs due to inefficiencies.
SELLING, GENERAL AND ADMINISTRATIVE expenses increased to $43.1 million for
fiscal 1999 from $31.5 million in fiscal 1998, an increase of $11.6 million or
36.8%. The increase was the result of several factors including higher
expenses as a result of the merger, higher freight, amortization of goodwill,
advertising and promotion expenses and bad debt expenses.
Impairment of long-lived assets in fiscal 1999 was $4.6 million. This includes
a $1.3 million charge due to the decision to divest the Company of certain
non-core business assets, $2.3 million charge due to a failed system conversion
and management's assessment that the implementation costs have minimal future
benefit and a $1.0 million charge reflecting management's ongoing review of
recoverability of assets.
For the combined company of Doskocil and Dogloo, sales for the twelve months
ended June 30, 1999 and 1998 were $169.9 million and $159.1 million,
respectively. EBITDA for fiscal year 1999 is expected to approximate $16.0
million. This compares to a combined Doskocil and Dogloo EBITDA for the fiscal
year ending June 30, 1998 of $29.0 million, a decrease of $13.0 million or 45%.
This decrease is primarily due to the factors discussed above which include
increased costs due to difficulties in accurately forecasting customer demand,
production scheduling difficulties, warehousing and shipping constraints,
computer system problems, higher advertising and promotion expenses and the
failure to build sufficient inventory in the fourth quarter of fiscal year 1998.
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