SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended April 30, 1994 Commission File Number 1-4183
CHOCK FULL O' NUTS CORPORATION
(Exact Name of Registrant As Specified In Its Charter)
New York 13-0697025 _
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
370 Lexington Avenue, New York, N.Y. 10017
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (212) 532-0300
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 such shorter
period that the registrant was required to file such
reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
No. of Shares of Common Stock ($.25 par value) outstanding as of
June 10, 1994 - 10,119,032
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets -
April 30, 1994 and July 31, 1993 1 & 2 of 16
Unaudited Condensed Consolidated Statements of Operations-
Three Months Ended April 30, 1994 and 1993 3 of 16
Unaudited Condensed Consolidated Statements of Operations -
Nine Months Ended April 30, 1994 and 1993 4 of 16
Unaudited Condensed Consolidated Statements of Cash Flows -
Nine Months Ended April 30, 1994 and 1993 5 of 16
Unaudited Condensed Consolidated Statement of Stockholders' Equity -
April 30, 1994 6 & 7 of 16
Notes to Unaudited Condensed Consolidated Financial
Statements - April 30, 1994 8, 9, 10 & 11 of 16
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12, 13 & 14 of 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15 of 16
Item 6. Exhibits and Reports on Form 8-K 15 of 16
Signatures 16 of 16
PART I. FINANCIAL INFORMATION
CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
April 30, July 31,
1994 1993
(Unaudited) (Note)
ASSETS
Current assets:
Cash and cash equivalents $7,058,702 $ 5,469,159
Receivables, principally
trade, less allowances
for doubtful accounts and
discounts of $1,119,000
and $1,081,000 26,843,745 25,319,816
Inventories 41,133,581 38,385,397
Net assets of product line
held for sale 24,970,356
Marketable securities 25,153,984
Prepaid expenses and other 3,430,596 3,222,586
Total current assets 103,620,608 97,367,314
Property, plant and
equipment - at cost $94,765,048 $91,098,376
Less allowances for
depreciation and
amortization (40,219,273) 54,545,775 (35,502,700) 55,595,676
Real estate held for
sale or development, at cost 5,404,243 5,404,243
Other assets and deferred charges 29,966,887 31,040,452
Excess of cost over net
assets acquired 6,115,423 5,896,404
$199,652,936 $195,304,089
Note: The balance sheet at July 31, 1993 has been derived from the audited
financial statements at that date, restated for the adoption of FASB 109.
See notes to unaudited condensed consolidated financial statements.
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CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
April 30, July 31,
1994 1993
(Unaudited) (Note)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $12,510,189 $ 10,804,095
Accrued expenses 13,001,740 13,605,564
Income taxes 1,938,244 935,359
Total current liabilities 27,450,173 25,345,018
Long-term debt, excluding current
installments 107,166,268 108,092,174
Other noncurrent liabilities 2,095,412 5,003,738
Deferred income taxes 3,878,000 3,878,000
Stockholders' equity:
Common stock, par value $.25 per share;
Authorized 50,000,000 shares:
Issued 10,594,554 and 10,592,264
shares 2,648,639 2,648,066
Additional paid-in-capital 47,274,704 47,255,836
Retained earnings 17,937,907 10,457,264
Cost of 475,522 and 275,522 shares in treasury (6,573,719) (4,723,719)
Deferred compensation under stock bonus
plan and employees' stock ownership plan (1,799,448) (2,227,288)
Unfunded pension losses (425,000) (425,000)
Total stockholders' equity 59,063,083 52,985,159
$199,652,936 $195,304,089
Note: The balance sheet at July 31, 1993 has been derived from the audited
financial statements at that date, restated for the adoption of FASB 109.
See notes to unaudited condensed consolidated financial statements.
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CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended April 30,
1994 1993
Revenues:
Net sales $61,467,118 $67,667,967
Rentals from real estate 507,263 477,957
61,974,381 68,145,924
Cost and expenses:
Cost of sales 41,307,351 41,901,973
Selling, general and
administrative expenses 18,838,018 22,230,682
Expenses of real estate 450,083 399,197
60,595,452 64,531,852
Operating profit 1,378,929 3,614,072
Interest and dividend income 464,077 81,332
Interest expense (2,206,533) (2,782,925)
Other income - net 27,731 23,585
(Loss)/income from continuing operations
before income taxes (335,796) 936,064
Income taxes (66,000) 448,500
(Loss)/income from continuing operations (269,796) 487,564
Discontinued operations - loss on disposition (535,116)
Net (loss) $(269,796) $(47,552)
Income/(loss) per share
Primary
Continuing operations $(.03) $ .05
Net (loss) $(.03) $(.01)
Fully diluted
Continuing operations $(.03) $ .05
Net (loss) $(.03) $(.01)
See notes to unaudited condensed consolidated financial statements.
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CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended April 30,
1994 1993
Revenues:
Net sales $194,511,125 $183,766,846
Rentals from real estate 1,564,199 1,393,210
196,075,324 185,160,056
Cost and expenses:
Cost of sales 128,184,432 116,128,167
Selling, general and
administrative expenses 59,956,235 56,672,703
Expenses of real estate 1,279,219 1,156,318
189,419,886 173,957,188
Operating profit 6,655,438 11,202,868
Interest and dividend income 820,207 741,843
Gain on sales of marketable securities 335,577
Gain on sale of product line 13,208,393
Interest expense (6,551,336) (7,441,756)
Other (deductions) - net (10,059) (6,253)
Income from continuing operations
before income taxes 14,122,643 4,832,279
Income taxes 6,642,000 2,017,500
Income from continuing operations 7,480,643 2,814,779
Discontinued operations:
Income from operations, net of income
taxes of $1,339,000 1,103,029
Loss on disposition (3,171,239)
(2,068,210)
Net income $7,480,643 $746,569
Income per share
Primary
Continuing operations $.73 $.28
Net income $.73 $.08
Fully diluted
Continuing operations $.51 $.28
Net income $.51 $.08
See notes to unaudited condensed consolidated financial statements.
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CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended April 30,
1994 1993
Operating Activities - Continuing Operations:
Income from continuing operations $7,480,643 $ 2,814,779
Adjustments to reconcile income from
continuing operations to net cash provided
by operating activities:
Depreciation and amortization of
property, plant and equipment 4,716,573 4,972,678
Amortization of deferred compensation
and deferred charges 3,308,321 3,323,122
Gain on sale of marketable securities (335,577)
Gain on sale of product line (13,208,393)
Other, net (696,433) (1,734,925)
Changes in operating assets and liabilities:
(Increase)/decrease in accounts receivable (1,204,455) 284,853
(Increase) in inventory (2,742,184) (5,277,705)
(Increase)/decrease in prepaid expenses (202,898) 1,062,438
(Decrease)/Increase in accounts payable,
accrued expenses and income taxes (923,025) 438,800
NET CASH (USED IN)/PROVIDED BY CONTINUING OPERATIONS (3,471,851) 5,548,463
Investing Activities - Continuing Operations:
Proceeds from sale and collection of principal
of marketable securities 1,846,828 20,648,985
Purchases of marketable securities (27,000,812)
Purchases of property, plant and equipment (3,520,816) (6,185,633)
Proceeds from sale of product line 38,109,205
Increase in assets held for sale (1,093,071)
Acquisition of businesses (467,288) (55,390,488)
NET CASH PROVIDED BY/(USED IN)
CONTINUING OPERATIONS 7,874,046 (40,927,136)
Financing Activities - Continuing Operations:
Proceeds from long-term debt 40,287,192
Principal payments on long-term debt (905,906) (1,287,925)
Purchase of treasury stock (1,850,000)
Other (56,746) (2,382,589)
NET CASH (USED IN)/PROVIDED BY CONTINUING
OPERATIONS (2,812,652) 36,616,678
Increase in Cash and
Cash Equivalents - Continuing Operations 1,589,543 1,238,005
Cash and cash equivalents at beginning
of period - continuing operations 5,469,159 2,529,123
Cash and Cash Equivalents at End of Period -
Continuing Operations $7,058,702 $ 3,767,128
See notes to unaudited condensed consolidated financial statements.
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CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Common Stock
Issued In Treasury
Shares Amount Shares Amount
In Thousands
Balance at July 31, 1993 - as reported 10,592 $2,648 276 $4,724
Restatement due to adoption of FASB 109
Balance at July 31, 1993 - as restated 10,592 2,648 276 4,724
Net income
Conversion of subordinated debentures 3 1
Purchase of treasury stock 200 1,850
Deferred compensation under stock
bonus plan and employees' stock
ownership plan:
Amortization
Balance at April 30, 1994 10,595 $2,649 476 $6,574
See notes to unaudited condensed consolidated financial statements.
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CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Deferred
Compensation
Under Stock
Bonus Plan and Unfunded Additional
Employees' Stock Pension Paid-In Retained
Ownership Plan Losses Capital Earnings
In Thousands
Balance at July 31, 1993 -
as reported $2,227 $ 425 $47,256 $11,809
Restatement due to adoption
of FASB 109 (1,352)
Balance at July 31, 1993
as restated 2,227 425 47,256 10,457
Net income 7,481
Purchase of treasury stock
Conversion of subordinated debentures 19
Deferred compensation under stock
bonus plan and employees' stock
ownership plan:
Amortization (428)
Balance at April 30, 1994 $1,799 $ 425 $47,275 $ 17,938
See notes to unaudited condensed consolidated financial statements.
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CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1994
(A) The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
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 three and
nine months ended April 30, 1994 and 1993 are not necessarily indicative of
the results that may be expected for a full fiscal year. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year
ended July 31, 1993.
(B) In April 1993, the Company and Jimbo's Jumbos, Incorporated ("JJI") entered
into an agreement to merge JJI with and into a company controlled by John W.
Kluge and his affiliates. Pursuant to the merger, which was consummated on
July 8, 1993, the Company, as well as all other stockholders of JJI received
$6.93 per share for each share owned. The proceeds ($32,917,500) were used
to reduce outstanding bank debt incurred for the acquisition of Cain's Coffee
Co. (see Note E). A loss of $3,171,000 was incurred in connection with the
sale and was charged to discontinued operations, of which $2,636,000 had been
provided for in the three months ended January 31, 1993. The Company has
restated its financial statements to present the operating results of JJI for
the three and nine months ended April 30, 1993 as a discontinued operation.
(C) Primary per share data are based on the weighted average number of common
shares outstanding of 10,119,000 and 10,288,000, respectively, for the three
months ended April 30, 1994 and 1993 and 10,198,000 and 10,240,000,
respectively, for the nine months ended April 30, 1994 and 1993. The three
and nine month periods ended April 30, 1993 have been retroactively adjusted
for a 3% stock dividend distributed in July 1993. Fully diluted earnings per
share assumes conversion of outstanding debentures.
(D) Inventories are stated at the lower of cost (first-in,first-out) or market.
The components of inventory consist of the following:
April 30, July 31,
1994 1993
Finished goods $25,031,289 $24,657,182
Raw materials 11,743,403 9,139,425
Supplies 4,358,889 4,588,790
$41,133,581 $38,385,397
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(E) In December 1992, the Company acquired the stock of Cain's Coffee Co.
("Cains") and certain trademarks related to that business from Nestle'
Beverage Company and an affiliate for approximately $52,000,000 in cash.
Cain's business consists primarily of sales of coffee and related products to
food service customers in parts of the Midwest and Southwest. In connection
with the acquisition, which has been accounted for as a purchase transaction,
the Company acquired assets with a fair value of approximately $55,750,000
(including trademarks, covenant not to compete and customer list of
$20,900,000, included in other assets and deferred charges on the consolidated
balance sheets) and assumed liabilities of approximately $3,750,000. The
Company used the proceeds (approximately $20,500,000) from the sale of a
substantial portion of its marketable securities to finance a portion of the
purchase price and financed the remainder through additional borrowings from
its Banks.
The following pro forma unaudited results of operations assume the acquisition
of Cains occurred at August 1, 1992, and give effect to certain adjustments,
including depreciation of property, plant and equipment, amortization of a
covenant not to compete, trademarks and customer lists and interest expense
resulting from the acquisition and related financing.
Nine Months
Ended
April 30,
1993
Net sales $207,126,000
Income from continuing operations $ 3,022,000
Income from continuing operations
per share $ .30
Net income $ 954,000
Net income per share $ .09
(F) Under the Company's amended and restated revolving credit and term loan
agreements (collectively the "Loan Agreements") with National Westminster Bank
USA and Chemical Bank (the "Banks"), the Company may, from time to time, borrow
funds from the Banks, provided that the total principal amount of all such
loans outstanding at any time may not exceed $40,000,000. Interest (7.5% at
April 30, 1994) on all such loans is equal to prime rate plus three quarters of
a percent, subject to adjustment based on the level of loans outstanding.
Outstanding borrowings under the Loan Agreements may not exceed certain
percentages of and are collateralized by, among other things, the trade
accounts receivable and inventories, and substantially all of the machinery and
equipment and real estate of the Company and its subsidiaries. All loans made
under the term loan agreement ($10,000,000 at April 30, 1994) are to be repaid
in December 1997. Pursuant to the terms of the Loan Agreements, the Company
and its subsidiaries, among other things, must maintain a minimum net worth and
meet ratio tests for liabilities to net worth and coverage of fixed charges and
interest, all as defined. The Loan Agreements also provide, among other
things, for restrictions on dividends (except for stock dividends) and require
repayment of outstanding loans with excess cash flow, as defined.
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(G) In November 1992, the Company acquired a controlling interest in a
partnership which owns Dana Brown Private Brands, Inc., a company which
markets and sells coffee and tea products, servicing food retailers and
distributors located primarily in the Midwest. The purchase price was
$2,000,000, plus approximately $2,500,000 for the cost of inventory.
The pro forma effects on the Company's operations as if this business had
been acquired on August 1, 1992 are not material.
(H) Prepaid expenses and other on the unaudited condensed consolidated balance
sheets includes deferred income taxes of $1,442,000.
(I) On October 8, 1993, the Company and Gourmet Coffees of America, Inc.("GCA")
entered into an agreement to sell Hillside Coffee of California, Inc.
("Hillside") to GCA. Pursuant to the agreement, which was consummated on
November 19, 1993, the Company received (a) $38,500,000 in cash and (b) 75,000
shares of stock representing approximately one-half of one percent of the
equity of GCA. The operating profits of Hillside, before intercompany
charges, for the period August 1, 1993 to November 19, 1993 and the nine
months ended April 30, 1993, included in the results of operations are as
follows:
Period from
August 1, 1993 to Nine months ended
November 19, 1993 April 30, 1993
Net sales $9,557,000 $21,011,000
Cost and expenses:
Cost of sales 4,169,000 8,594,000
Selling, general and
administrative expenses 3,566,000 8,533,000
7,735,000 17,127,000
Operating profit $1,822,000 $3,884,000
(J) In February 1992, the Financial Accounting Standards Board issued Statement
No. 109, "Accounting for Income Taxes." The Company adopted the provisions of
the standard in its financial statements as of and for the three months ended
October 31, 1993 and restated its fiscal 1993, 1992, 1991 and 1990 financial
statements. The effect of adopting Statement 109 was to increase income from
continuing operations by $147,000 in 1993 and 1992 and $12,000 in 1991 and
1990. The cumulative effect of adopting Statement 109 as of July 31, 1990,
decreased the beginning balance of retained earnings by $1,670,000.
Under Statement 109, the liability method is used in accounting for income
taxes. Under this method, deferred tax assets and liabilities are determined
based on differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse. Prior to the adoption
of Statement 109, income tax expense was determined using the deferred method.
Deferred tax expense was based on items of income and expense that were
reported in different years in the financial statements and tax returns and
were measured at the tax rate in effect in the year the differences
originated.
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(K) On March 11, 1994, the Company acquired for approximately $467,000 all the
operating assets and liabilities of a company engaged in the commercial
franchising and operation of drive through food service establishments
primarily engaged in the sale of gourmet coffee complimented by fresh bakery
goods, sandwiches and ancillary products. The acquisition is being accounted
for as purchase. Based on a preliminary allocation of the purchase price,
the excess of cost over not assets acquired (approximately $360,000) is being
amortized over a period of 15 years using the straight-line method. The pro
forma effects on the Companys operations as if this business had been
acquired on August 1, 1992 are not material.
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CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Operations
The following is Management's discussion and analysis of certain
significant factors that have affected the Company's operations during the
periods included in the accompanying unaudited condensed consolidated
statements of operations.
In December 1992, the Company acquired the stock of Cain's Coffee Co.
("Cains") and certain trademarks related to that business from Nestle' Beverage
Co. and an affiliate for $52,000,000 in cash. The business of Cains consists
primarily of sales of coffee and related products to food service customers in
parts of the Midwest and Southwest. See Note E to the Company's unaudited
condensed consolidated financial statements as of and for the three and nine
months ended April 30, 1994.
In November 1992, the Company acquired a controlling interest in a
partnership which owns Dana Brown Private Brands, Inc. ("Dana Brown"), a
company which markets and sells coffee and tea products, servicing food
retailers and distributors located primarily in the Midwest. The purchase
price was $2,000,000, plus approximately $2,500,000 for the cost of inventory.
See Note G to the Company's unaudited condensed consolidated financial
statements as of and for the three and nine months ended April 30, 1994.
In April 1993, the Company and Jimbo's Jumbos, Incorporated ("JJI")
entered into an agreement to merge JJI with and into a company controlled by
John W. Kluge and his affiliates. Pursuant to the merger, which was
consummated on July 8, 1993, the Company, as well as all other stockholders of
JJI, received $6.93 per share for each share owned (see Note B to the Company's
unaudited condensed consolidated financial statements as of and for the three
and nine months ended April 30, 1994). A loss of $3,171,000 was incurred in
connection with the sale and was charged to discontinued operations. The
proceeds ($32,917,500) were used to reduce outstanding bank debt incurred for
the acquisition of Cain's. The business of JJI consisted primarily of (1)
shelling farmers' stock peanuts into commercial and seed grades of raw peanuts
for sale to commercial processors of peanuts, seed dealers and farmers and (2)
processing and packaging of in-shell peanuts and nuts, shelled peanuts and
nuts, for sale to supermarkets.
On October 8, 1993, the Company and Gourmet Coffees of America, Inc.
("GCA") entered into an agreement to sell Hillside Coffee of California, Inc.
("Hillside") to GCA. Pursuant to the agreement, which was consummated on
November 19, 1993, the Company received (a) $38,500,000 in cash and (b) 75,000
shares of stock representing approximately one-half of one percent of the
equity of GCA. See Note I to the Companys unaudited condensed consolidated
financial statements as of and for the three months ended April 30, 1994. A
pre-tax gain of approximately $13,200,000 was recorded on the sale and
approximately $25,000,000 of the proceeds have been invested in short term
marketable securities. Hillside's business consisted of roasting, packing,
distributing and marketing specialty coffee to supermarkets.
The discussion and analysis that follows relates solely to the continuing
operations of the Company.
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CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Operations - Continued
Net sales decreased $6,201,000 or 9.2% and increased $10,744,000 or 5.8%
for the three and nine months ended April 30, 1994, respectively, compared to
the comparable periods of the prior year. The decrease in net sales for the
quarter was primarily due to the loss of sales from Hillside due to its
disposition on November 19, 1993. The increase in net sales for the nine months
was primarily due to sales of Cains and Dana Brown (both acquired in the second
quarter of the prior fiscal year) partially offset by the loss of sales from
Hillside. Cain's and Dana Brown were accounted for as purchases, and,
therefore, were not included prior to their respective dates of acquisition.
Operating profits from food products were $1,322,000 and $6,370,000
decreases of 63% and 42% for the three and nine months ended April 30, 1994,
respectively, compared to $3,535,000 and $10,966,000 for the comparable periods
of the prior year. The decrease in operating profits for the quarter resulted
primarily from decreased gross margins and reduced operating profits from
Hillside (due to its disposition), partially offset by reduced selling, general
and administrative expenses. The reduced gross margins were attributable to
the inability to increase selling prices (due to competition) commensurate with
the increased costs of coffee. Selling, general and administrative expenses
decreased in the quarter primarily due to reduced payroll, brokerage, promotion
and bad debt expenses. The decrease in operating profits for the nine months
resulted primarily from decreased gross margins and reduced operating profits
from Hillside (due to its disposition), partially offset by the operations of
Cains (included for the entire period for the current nine months) and reduced
selling, general and administrative expenses for operations included in both
the current and prior year. The reduced gross margins were attributable to the
inability to increase selling prices (due to competition) commensurate with the
increased costs of coffee. Selling, general and administrative expenses
decreased in the nine months period due to reduced advertising and payroll
costs, partially offset by increased coupon costs.
(Loss)/income from continuing operations was $(270,000) and $7,481,000 or
$(.03) and $.73 per share for the three and nine months ended April 30, 1994,
respectively, compared to $488,000 and $2,815,000 or $.05 and $.28 per share
for the comparable periods of the prior year. The difference for the quarter
was primarily due to decreased operating profits from food products, partially
offset by decreased interest expense, increased investment income and decreased
income taxes. The difference for the nine months was primarily due to the gain
on sale of Hillside Coffee of California, Inc. (the Company's specialty coffee
product line) of $7,068,000 or $.69 per share, partially offset by decreased
operating profits from food products, decreased interest expense and decreased
income taxes.
Liquidity and Capital Resources
As of April 30, 1994, working capital was approximately $76,000,000 and
the ratio of current assets to current liabilities was approximately 3.8 to 1.
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CHOCK FULL O' NUTS CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources - Continued
On November 19, 1993, the Company consummated the sale of Hillside Coffee
of California, Inc. and received, among other consideration, $38,500,000 in
cash which has substantially been invested in short-term marketable securities.
See Note I to the Company's unaudited consolidated financial statements as of
and for the three and nine months ended April 30, 1994.
The Company believes that its cash flow from operations, its amended
agreements with its Banks and its short-term investments provide sufficient
liquidity to meet its working capital and capital requirements.
The recent significant price rise in the cost of coffee in May and June
has caused the Company to increase its selling prices for coffee. The Company
is unable to estimate the impact of the recent selling price increases and
possible further increases in the cost of coffee on future operating results.
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Part 2. Other Information
Item 1. Legal Proceedings
None
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits - none
b) Reports on Form 8-K - none
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this Report of Form 10-Q to be signed on its behalf
by the undersigned, thereunto duly authorized.
CHOCK FULL O' NUTS CORPORATION
(Registrant)
June 14, 1994
Marvin I. Haas
Vice Chairman of the Board and
Chief Executive Officer
June 14, 1994
Howard M. Leitner
President and Chief Financial and
Accounting Officer
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