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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 31, 2000
[VLASIC FOODS INTERNATIONAL INC. LOGO]
(Exact name of registrant as specified in its charter)
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NEW JERSEY 1-13933 52-2067518
(STATE OF INCORPORATION) (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
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VLASIC PLAZA
SIX EXECUTIVE CAMPUS
CHERRY HILL, NEW JERSEY 08002-4112
(PRINCIPAL EXECUTIVE OFFICES)
TELEPHONE NUMBER: 856-969-7100
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ITEM 5. OTHER INFORMATION
a. Vlasic announces completion of sale of mushroom business.
The information included in this item is set forth in a press release
issued by us dated February 1, 2000, announcing the completion of the sale of
the Vlasic Farms Mushroom business and is attached as Exhibit 99.1 and is
incorporated herein by reference.
b. Vlasic comments on Second Quarter 2000 Outlook and announces
reorganization.
The information included in this item is set forth in a press release
issued by us dated February 10, 2000, commenting on our Second Quarter 2000
Outlook, and announcing a reorganization of the Company and is attached as
Exhibit 99.2 and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
(99.1) Press Release dated February 1, 2000 announcing the completion
of the sale of the Vlasic Farms Mushroom business.
(99.2) Press Release dated February 10, 2000 commenting on Second
Quarter 2000 Outlook and announcing a reorganization of the
Company.
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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, hereunto duly authorized.
VLASIC FOODS INTERNATIONAL INC.
Date: February 14, 2000 By: /s/ Joseph Adler
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Joseph Adler
Vice President and Controller
(Principal Financial and Accounting Officer)
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EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
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(99.1) Press Release dated February 1, 2000 announcing the completion
of the sale of the Vlasic Farms Mushroom business.
(99.2) Press Release dated February 10, 2000 commenting on Second
Quarter 2000 Outlook and announcing a reorganization of the
Company.
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EXHIBIT 99.1
CONTACT: Kevin G. Lowery
(856) 969-7417
William J. Fasel (analysts)
(856) 969-7428
VLASIC FOODS COMPLETES SALE OF FRESH MUSHROOMS BUSINESS
CHERRY HILL, NJ -- February 1, 2000 -- Vlasic Foods International (NYSE: VL)
today announced it has completed the sale of its fresh mushrooms business to
British Columbia-based Money's Mushrooms Ltd., Canada's largest mushroom
company, for approximately $50 million in cash.
Vlasic announced in December that it would sell the mushroom business
because it was non-strategic and the sale would help further focus the Company
on its core "Vlasic" condiments and "Swanson" frozen foods businesses. Vlasic
Foods said it will use the net proceeds to pay down debt.
The business has annual production of approximately 100 million pounds
of mushrooms and net sales of approximately $120 million. The business has eight
farms located throughout the U.S. and employs approximately 2,000 people.
The sale of the mushroom business is the Company's third divestiture in
less than two years since its spin-off. The Company also has sold the
"Swift-Armour" Argentine beef business and the "Kattus" gourmet foods
distribution business in Germany.
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EXHIBIT 99.2
CONTACT: Kevin G. Lowery
(856) 969-7417
William J. Fasel
(856) 969-7428 (analysts)
o VLASIC ANNOUNCES RESTRUCTURING OF HEADQUARTERS, REDUCING STAFF BY 20%
o COMMENTS ON SECOND QUARTER 2000 OUTLOOK
o RETAINS MENIKOFF AS INTERIM CFO; REORGANIZES NORTH AMERICA MANAGEMENT
INTO SINGLE OPERATING UNIT
o TO HIRE INVESTMENT BANK TO HELP EXPLORE STRATEGIC DIRECTION
CHERRY HILL, NJ - February 10, 2000 - Vlasic Foods International (NYSE: VL)
today announced it will reduce its headquarters staff by 20 percent and that its
fiscal 2000 second quarter results, scheduled to be released on February 29,
will be impacted by three items: additional charges related to trade marketing
and customer deductions related primarily to fiscal 1999 and earlier; sales in
its frozen foods and pickle businesses, which are each up 3 percent in dollar
sales year to date, but not growing as much as expected; and various charges
including product manufacturing and inventory related costs.
Second Quarter Earnings
The company announced that it expects fiscal 2000 second quarter results from
continuing operations to be in the range of a loss of $0.32 to $0.36 per share.
The Company said that additional charges from trade marketing and customer
deductions, related primarily to fiscal 1999 and earlier, contributed
approximately $0.20 per share to the expected second quarter loss. These charges
result primarily from revised estimates based on new information that provided
better estimates and insight to the Company following the conversion to new
billing and trade marketing systems and processes after
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the conclusion of Vlasic's transition service agreement with Campbell Soup. The
Company is conducting a review of these systems and is continuing to implement
processes and procedures to properly capture and analyze trade marketing
spending and customer deductions. Generally accepted accounting principles
(GAAP) require management to make estimates and assumptions that affect assets
and liabilities, contingent assets and liabilities, and revenues and expenses.
Management continues to believe its estimates are reasonable, but results could
differ from those estimates.
Furthermore, the Company said that sales of its "Swanson" and "Vlasic"
lines, while up three percent year to date, were lower than expected in its
second quarter. Vlasic Foods President and Chief Executive Officer, Robert F.
Bernstock commented, "While we continue to see increases in our frozen food and
condiments businesses, particularly in our pickles, pot pies and dinners
businesses, we had expected more robust overall growth. These lower than
expected levels of sales are likely to continue and impact our earnings for the
remainder of the year."
Consumption dollar sales for both the `Vlasic' and `Swanson' businesses
have grown 6 and 3 percent, respectively this fiscal year.
The Company also expects to recognize second quarter charges for
various items related to inventories and product manufacturing costs throughout
all of its businesses. These charges are expected to account for approximately
$0.15 per share of the loss in the quarter. These charges also include
approximately $0.01 per share for the cost to clean and repair a frozen foods
manufacturing facility in Omaha, Nebraska that was damaged by a boiler explosion
in late December. Costs associated with the explosion are expected to be covered
by the Company's insurance policy, and will have a negligible impact for the
year.
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The Company also said it has resolved certain contingencies relating to
the divested Kattus gourmet foods distribution business and will reverse an
accrual that will favorably impact second quarter earnings by approximately
$0.02 per share.
Reorganization of Company
The Company also announced that it plans to eliminate 45 positions, or 20
percent of its headquarters staff, to reduce costs. The reduction includes
eliminating current and open positions throughout its headquarters.
Bernstock commented, "This difficult decision to streamline the
organization is in no way a reflection on our employees, because they have done
an outstanding job. Rather, it reflects the need for a smaller infrastructure
moving forward. With the sale of the fresh mushroom business, and the sale of
our Argentine and German businesses last year, we have divested three
lower-margin businesses with approximately $400 million in revenues, or
approximately 30 percent of our total sales. Our reduced size now requires a
smaller organizational structure." Affected employees will receive severance
pay, benefits continuation and outplacement services, consistent with the
Company's policies. To cover these costs, the Company will record a second
quarter restructuring charge of $0.02 per share.
The Company also has retained Peter Menikoff to serve as its interim
Chief Financial Officer. Menikoff, formerly senior vice president and treasurer
at Tenneco, brings more than 30 years of disciplined, financial leadership to
the Company. "Peter has a wealth of experience in implementing thorough and
rigid financial controls. We look forward to utilizing his constructive
perspectives to strengthen our Company," said Bernstock.
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In another move to strengthen the Company, Vlasic Foods today created a
single North America business unit combining the operations of its powerful
"Vlasic," "Swanson," and "Open Pit" brands. The new division will be led by Mark
I. McCallum, corporate Vice President and President - North America, who has led
the turnaround of the Vlasic condiments business. "Mark is a strong leader who
together with his team has overseen the reversal of consumption trends on our
`Vlasic,' `Open Pit' and Canadian businesses," said Bernstock.
The Company said it would retain an investment bank to help it explore
strategic opportunities. While the Company has no preconceived ideas, these
opportunities may include potential divestitures, joint manufacturing or
marketing ventures, acquisitions, a merger, a recapitalization or other actions.
The Company noted that there could be no assurance that any action will be
pursued or that a transaction will be consummated. "As always, we will continue
to explore the numerous ways in which we can build long-term shareowner wealth,"
said Bernstock.
The Company previously received from its lenders a waiver of certain
covenants of its senior credit facility until February 29, 2000 and is currently
in discussion with its lenders to extend the waiver period. Management will also
be working toward having an amended senior credit agreement, although no
assurances can be given that the amendment will be completed. The Company is
current on all interest payments and has no debt scheduled to mature or other
principal payments due until 2003.
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FORWARD LOOKING STATEMENT
This release contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section21E of the
Securities Exchange Act of 1934, as amended. The Company believes the
assumptions underlying the forward-looking statements, including, among other
things, those relating to accounting estimates developed in connection with the
application of generally accepted accounting principles, accounting policies and
practices, marketing costs, future sales, inventories, insurance claims,
consumption patterns, manufacturing costs, restructuring and agricultural
operations are reasonable. However, any of the assumptions could be inaccurate,
and therefore there can be no assurance that the forward-looking statements
contained in this release will prove to be accurate. Additional information that
could cause actual results to vary materially from the results anticipated may
be found in the Company's most recent Form 10-K and other reports filed with the
Securities Exchange Commission. Furthermore, the Company disclaims any
obligation or intent to update any such factors or forward-looking statements to
disclaim future events and developments.
