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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 28, 1998 Commission File No. 1-1790
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DI GIORGIO CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-0431833
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
380 Middlesex Avenue 07008
Carteret, New Jersey (Zip Code)
(Address of principal executive offices)
Registrant's telephone number including area code: (732) 541-5555
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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 ____
As of May 6, 1998, there were 78.1158 shares of Class A Common Stock and 76.8690
shares of Class B Common Stock, par value of each class $.01, outstanding.
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<PAGE>
DI GIORGIO CORPORATION AND SUBSIDIARIES
INDEX
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets,
December 27, 1997 and March 28, 1998 (Unaudited).................. 1
Consolidated Condensed Statements of Operations,
Thirteen Weeks Ended March 29, 1997
and March 28, 1998 (Unaudited) ................................... 2
Consolidated Condensed Statement of Stockholders' Deficiency,
Thirteen Weeks Ended March 28, 1998 (Unaudited) .................. 3
Consolidated Condensed Statements of Cash Flows,
Thirteen Weeks Ended March 29, 1997 and
March 28, 1998 (Unaudited) ...................................... 4
Notes to Consolidated Condensed Financial Statements (Unaudited)..... 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ......................................... 6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ............................. 9
Signatures ............................................................ 10
<PAGE>
DI GIORGIO CORPORATION and SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
December 27, March 28,
1997 1998
(Unaudited)
ASSETS
Current Assets:
Cash...................................... $2,426 $1,373
Accounts and notes receivable-net......... 71,715 71,364
Inventories............................... 56,121 58,760
Prepaid expenses.......................... 8,234 7,340
----- -----
Total current assets................ 138,496 138,837
------- -------
Property, Plant & Equipment
Cost...................................... 35,837 36,440
Accumulated depreciation.................. (13,693) (14,425)
------ ------
Net....................................... 22,144 22,015
------ ------
Long-term notes receivable.................. 7,428 8,085
Deferred taxes.............................. 12,266 12,266
Other assets................................ 15,341 14,600
Deferred financing costs.................... 5,657 5,477
Excess of costs over net assets acquired.... 78,629 78,014
------ ------
Total assets....................... $279,961 $279,294
======== ========
LIABILITIES & STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Notes payable-revolver.................... $19,669 $20,174
Accounts payable.......................... 58,899 62,653
Accrued expenses.......................... 21,098 24,287
Notes and leases payable within one year.. 15,465 8,019
------ -----
Total current liabilities........... 115,131 115,133
------- -------
Long-term debt.............................. 159,333 159,177
Capital lease liability..................... 2,499 2,448
Other long-term liabilities................. 6,079 5,898
Stockholders' Deficiency:
Common stock.............................. - -
Additional paid-in-capital................ 13,002 13,002
Accumulated deficit....................... (16,083) (16,364)
------ -----
Total stockholders' deficiency (3,081) (3,362)
------ ------
Total liabilities & stockholders'
deficiency........................ $279,961 $279,294
======== ========
See Notes to Consolidated Condensed Financial Statements
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DI GIORGIO CORPORATION and SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)
Thirteen weeks ended
-----------------------
March 29, March 28,
1997 1998
Revenue:
Net Sales..................................... $264,378 $279,720
Other Revenue................................. 1,595 1,836
----- -----
Total revenue........................... 265,973 281,556
Cost of products Sold........................... 237,180 252,804
------- -------
Gross Profit-exclusive of
warehouse expense shown below.................. 28,793 28,752
Warehouse expense............................. 10,609 11,421
Transportation expense........................ 5,422 6,161
Selling, general and
administrative expense........................ 5,524 5,888
Amortization-excess of cost
over net assets acquired...................... 669 615
------ -----
Operating Income................................ 6,569 4,667
Interest expense.............................. 5,709 4,776
Amortization-deferred financing costs......... 288 180
Other (income)-net............................ (1,043) (519)
----- -----
Income before income taxes and
extraordinary items............................ 1,615 230
Income taxes.................................... 886 310
----- -----
Income before extraordinary items............... 729 (80)
Extraordinary loss on extinguishment
of debt-net of tax............................. 0 (201)
----- -----
Net income (loss)............................... $729 $(281)
===== =====
See Notes to Consolidated Condensed Financial Statements
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DI GIORGIO CORPORATION and SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIENCY
(in thousands, except share data)
(unaudited)
Additional
Class A Class B Paid-In (Accumulated
Common Stock Common Stock Capital Deficit) Total
------------ ------------ ------- ------- ------
Shares Amount Shares Amount
Balance at
December 27,
1997 101.62 $ -- 100.00 $ -- $13,002 ($16,083) ($3,081)
Net loss -- -- -- -- -- (281) (281)
------ ---- ------ ---- ------- ------- ------
Balance at
March 28,
1998 101.62 $ -- 100.00 $ -- $13,002 ($16,364) ($3,362)
====== ==== ====== ==== ======= ======= ======
See Notes to Consolidated Condensed Financial Statements
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DI GIORGIO CORPORATION and SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Thirteen weeks ended
March 29, March 28,
1997 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................... $729 ($281)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities
Extraordinary loss on extinguishment
of debt-net of tax.......................... 0 201
Depreciation and amortization................ 1,147 733
Amortization................................. 1,088 1,300
Provision for bad debts...................... 375 375
Increase in prepaid pension cost............. (75) (75)
Noncash interest expense..................... 1,544 0
Changes in assets and liabilities:
(Increase) decrease in:
Accounts & notes receivable.................. (4,291) (24)
Inventory.................................... (2,431) (2,639)
Prepaid expenses............................. 579 894
Long-term receivables........................ (1,322) (657)
Others assets................................ (143) 46
(Decrease) increase in:
Accounts payable, accrued expenses and
other liabilities........................... 2,462 6,896
------ ------
Net cash provided by (used in)
operating activities........................... (338) 6,769
----- -----
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant, & equipment....... (413) (339)
----- ---
Net cash used in investing activities........... (413) (339)
----- -----
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under revolving line-of-credit... 1,633 505
Capital lease payments.......................... (579) (7,497)
Premiums paid on redemption of 12% notes........ 0 (335)
Long-term debt payments......................... (318) (156)
----- -----
Net cash provided by (used in)
financing activities........................... 736 (7,483)
----- -----
Decrease in cash................................ (15) (1,053)
Cash at beginning of period..................... 1,749 2,426
----- -----
Cash at end of period........................... $1,734 $1,373
===== =====
Supplemental Disclosure of Cash Flow Information
Cash paid during the period:
Interest.................................... $7,043 $1,180
===== =====
Income Taxes (Refunds)...................... $72 ($29)
===== =====
See Notes to Consolidated Condensed Financial Statements
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DI GIORGIO CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (UNAUDITED)
1. BASIS OF PRESENTATION
The consolidated condensed balance sheet as of March 28, 1998, the consolidated
condensed statements of operations for the thirteen weeks ended, the
consolidated condensed statements of cash flows for the thirteen weeks ended
March 29, 1997 and March 28, 1998, and stockholders' deficiency for the thirteen
weeks ended March 28, 1998, and related notes are unaudited and have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted
pursuant to such rules and regulations. The accompanying unaudited interim
consolidated condensed financial statements and related notes should be read in
conjunction with the financial statements and related notes included in the Form
10-K for the fiscal year ended December 27, 1997 filed with the Securities and
Exchange Commission. The information furnished reflects, in the opinion of the
management of the Company, all adjustments, consisting of normal recurring
accruals, which are necessary to present a fair statement of the results for the
interim periods presented.
The interim figures are not necessarily indicative of the results to be expected
for the full fiscal year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In February 1998, the FASB issued Statement of Financial Accounting Standards
No. 132 Employers' Disclosures about Pensions and Other Postretirement Benefits
("SFAS No. 132"), which will be effective for financial statements beginning
after December 15, 1997. SFAS No. 132 revises employers' disclosure about
pension and other postretirement benefit plans. It does not change the
measurement or recognition of those plans. The Company will adopt SFAS No. 132
in Fiscal 1998 and believes it will impact the financial statements to the
extent that it is necessary to provide additional disclosure about the Company's
pensions and other postretirement benefits.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward- Looking Statements
Forward-looking statements in this Form 10-Q include, without limitation,
statements relating to the Company's plans, strategies, objectives,
expectations, intentions and adequacy of resources and are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or achievement
of the Company to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. These
factors include, among others, the following: general economic and business
conditions and those in particular in the New York City metropolitan area;
restrictions imposed by the documents governing the Company's indebtedness;
competition; the Company's reliance on several significant customers; potential
losses from loans to its retailers; potential environmental liabilities which
the Company may have; the Company's labor relations; dependence on key
personnel; changes in business regulation; business abilities and judgment of
personnel; and changes in, or failure to comply with government regulations.
Results of Operations
Thirteen weeks ended March 28, 1998 and March 29, 1997
Net sales for the thirteen weeks ended March 28, 1998 were $279.7 million as
compared to $264.4 million for the thirteen weeks ended March 29, 1997. This
5.8% increase in net sales reflects increased sales of frozen food products to
an additional division of an existing customer which began in August 1997,
partially offset by the absence of sales related to a temporary supplemental
third party supply arrangement that took place in the prior period.
Other revenue, consisting of recurring customer related services, increased to
$1.8 million for the thirteen weeks ended March 28, 1998 as compared to $1.6
million in the prior period.
Gross margin (excluding warehouse expense) decreased to 10.3% of net sales or
$28.8 million for the thirteen weeks ended March 28, 1998 as compared to 10.9%
of net sales or $28.8 million for the prior period, as a result of a change in
mix of both customers and products sold. The Company has, and will continue to,
take steps to maintain and improve its margins; however, as indicated by the
comparative decrease in gross margin, factors such as the decrease in
promotional activities, changes in product mix, additions of high volume, low
margin customers, or competitive pricing pressures may continue to have an
effect on gross margin.
Warehouse expense increased as a percentage of net sales to 4.1% of net sales or
$11.4 million for the thirteen weeks ended March 28, 1998 as compared to 4.0% of
net sales or $10.6 million for the prior period strictly because of the amended
grocery facility lease. In November 1997, the Company amended its grocery
facility lease, adding additional leased property, extending the term, and
increasing the annual obligations. The changes in the provisions of the lease
resulted in the amended lease being treated as a new lease and accounted for as
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<PAGE>
an operating lease. Had the terms of the lease not changed, warehouse expense as
a percentage of sales would have decreased to 3.9% of sales in the current
period.
Transportation expense increased to 2.2% of net sales or $6.2 million for the
thirteen weeks ended March 28, 1998 as compared to 2.1% of net sales or $5.4
million in the prior period.
Selling, general and administrative expense remained constant at 2.1% of net
sales or $5.9 million for the thirteen weeks ended March 28, 1998 as compared to
2.1% of net sales or $5.5 million for the prior period.
Other income, net of other expenses, decreased to $519,000 for the thirteen
weeks ended March 28, 1998 as compared to $1.0 million for the prior period. The
decline reflects (i) a lower level of interest income as a result of the
repayment of the Rose Partner note receivable (repaid in June 1997) which
accounted for $262,000 of interest income in the prior period and (ii)
approximately $235,000 of rental income relating to the Farmingdale facility in
the prior period. The Farmingdale facility was sold in August 1997.
Interest expense decreased to $4.8 million for the thirteen weeks ended March
28, 1998 from $5.7 million for the prior period. The comparative decrease is a
result of lower average outstanding levels of the Company's funded debt and
lower average interest rates as a result of the Company's refinancing in June
1997.
The Company recorded an income tax provision of $310,000, resulting in an
effective income tax rate of 135% for the thirteen weeks ended March 28, 1998 as
compared to a provision of $886,000 resulting in an effective rate of 55% in the
prior period. The Company's estimated effective tax rate is higher than the
statutory tax rate primarily because of the nondeductibility of certain of the
Company's amortization of the excess of cost over net assets acquired; however,
due to net operating losses carryforwards for tax purposes, the Company does not
expect to pay federal income tax for the current year with the exception of an
alternative minimum tax.
The Company recorded a net loss for the thirteen weeks ended March 28, 1998 of
$281,000 including an extraordinary loss on the extinguishment of debt of
$201,000 net of tax, as compared to net income of $729,000 for the prior period.
Liquidity and Capital Resources
Cash flows from operations and amounts available under the Company's bank credit
facility are the Company's principal sources of liquidity. The Company's bank
credit facility will mature on June 30, 2000 and bears interest at a rate per
annum equal to (at the Company's option): (i) the Euro Dollar Offering Rate plus
2.25% or (ii) Bankers Trust Company's prime rate plus 0.75%. Borrowings under
the Company's revolving bank credit facility were $20.2 million at March 28,
1998. Additional borrowing capacity of $58.0 million was available at that time
under the Company's borrowing base formula. The Company believes that these
sources will be adequate to meet its anticipated working capital needs, capital
expenditures, and debt service requirements during fiscal 1998.
During the thirteen weeks ended March 28, 1998, cash flows provided by operating
activities were $6.8 million, consisting primarily of (i) cash generated from
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income before extraordinary items and non-cash expenses and (ii) an increase in
accounts payable, accrued expenses and other liabilities of $6.9 million, offset
by an increase in inventory of $2.6 million.
Cash flows used in investing activities during the thirteen weeks ended March
28, 1998 were approximately $339,000, which was used exclusively for capital
expenditures. Net cash used in financing activities of approximately $7.5
million was utilized to redeem the balance of the Company's 12% senior notes on
March 26, 1998. The redemption included a mandatory 4.5% premium ($335,000)
which resulted in a $201,000 extraordinary loss net of tax. As a result of this
redemption, the Company expects to save approximately $250,000 in interest
expense annually given the current difference in interest rates between the
notes redeemed and the Company's bank credit facility.
Earnings before interest expense, income taxes, depreciation and amortization,
and non-recurring charges such as extraordinary gains or losses ("EBITDA"), was
$7.0 million during the thirteen weeks ended March 28, 1998 as compared to $9.3
million in the prior period. This decrease in EBITDA reflected a combination of
decreased gross margins, the sale of the Farmingdale property in August 1997
which contributed approximately $400,000 to the prior period's EBITDA and the
treatment of the grocery facility lease which contributed $720,000 of the
difference.
The consolidated indebtedness of the Company decreased to $189.8 million at
March 28, 1998 as compared to $197.0 million at December 27, 1997. Stockholders'
deficiency was $3.4 million on March 28, 1998 as compared to a deficiency of
$3.1 million on December 27, 1997.
Under the terms of the Company's revolving bank credit facility, the Company is
required to meet certain financial tests, including minimum interest coverage
ratios and minimum net worth. The Company and its banks amended the interest
coverage ratio test for the remaining term of the bank credit facility in March
1998. As of March 28, 1998, the Company was in compliance with its covenants.
From time to time when the Company considered market conditions attractive, the
Company has purchased on the open market a portion of its public debt and may in
the future purchase and retire a portion of its outstanding 10% Notes.
Subsequent events
On April 1, 1998, the Company sold its Garden City facility for $14.5 million.
The Company utilized a portion of the proceeds to repay a $ 7.2 million note on
the building and $1.7 million was used to acquire the land for resale at the
closing. After expenses the Company used the remaining approximate $5.0 million
to repay a portion of its bank credit facility. As part of the transaction, the
Company will lease the Garden City facility for a minimum of two years. The
Company intends to increase its cold storage business at that facility, as well
as use it as a secondary frozen food distribution center.
In April 1998, the Company began shipping frozen food product from its new
frozen food facility in Carteret, NJ.
In May 1998, the Company repurchased and retired into treasury $5 million of its
outstanding common stock on a prorata basis.
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II-OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Amendment No. 11, dated as of March 25, 1998 to Credit
Agreement dated as of February 10, 1993 among Di Giorgio
Corporation, as Borrower, the financial institutions parties
thereto as Lenders, BT Commercial Corporation, as Agent for
the Lenders, and Bankers Trust Company, as Issuing Bank.
(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 has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
DI GIORGIO CORPORATION
By: /s/ Arthur M. Goldberg
Arthur M. Goldberg
Chairman, President and Chief
Executive Officer
By: /s/ Richard B. Neff
Richard B. Neff
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: May 6, 1998
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AMENDMENT NO. 11, dated as of March 25, 1998 ("Amendment No. 11")
to CREDIT AGREEMENT dated as of February 10, 1993 (as amended through the date
hereof, the "Credit Agreement") among DI GIORGIO CORPORATION, as Borrower, the
financial institutions parties thereto as LENDERS, BT COMMERCIAL CORPORATION, as
Agent for the Lenders, and BANKERS TRUST COMPANY, as Issuing Bank. Terms which
are capitalized herein and not otherwise defined shall have the meanings given
to such terms in the Credit Agreement.
WHEREAS, the Borrower has requested that the Lenders modify
certain covenants contained in the Credit Agreement; and
WHEREAS, the Lenders have agreed to the foregoing on the terms
and subject to the fulfillment of the conditions set forth in this Amendment No.
11;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and the Lenders
hereby agree as follows:
Section One. Amendment. Upon the fulfillment of the conditions
precedent set forth in Section Three hereof, the Credit Agreement is hereby
amended, effective as of March 25, 1998, as follows:
(a) Section 8.2 of the Credit Agreement is amended by deleting
subsections (u) through (dd) thereof, and substituting in lieu thereof
subsections (u) through (dd) set forth below, so that such subsections (u)
through (dd) thereof, together with the introductory portion of Section 8.2,
shall read as follows:
"8.2 Interest Coverage Ratio. The Borrower shall not permit its
ratio of EBITDA to Interest Expense as of the end of each of the following
periods to be less than the applicable ratio set forth below opposite each such
period in the applicable column:
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Minimum Interest Minimum Interest
Coverage Ratio Coverage Ratio
Prior to the New On and After the
Senior Note New Senior Note
Period Issuance Date Issuance Date
(u) the fiscal quarter ending in 2.00 to 1.00
March, 1998, and each fiscal quarter
thereafter, in each case together with
the three preceding fiscal quarters
(v) the fiscal quarter ending, in 1.50 to 1.00
March, 1998, together with the three
preceding fiscal quarters
(w) the fiscal quarter ending in June, 1.50 to 1.00
1998, together with the three
preceding fiscal quarters
(x) the fiscal quarter ending in 1.50 to 1.00
September, 1998, together with the
three preceding fiscal quarters
(y) the fiscal quarter ending in 1.50 to 1.00
December, 1998, together with the
three preceding fiscal quarters
(z) the fiscal quarter ending in 1.55 to 1.00
March, 1999, together with the three
preceding fiscal quarters
(aa) the fiscal quarter ending in June, 1.60 to 1.00
1999, together with the three
preceding fiscal quarters
(bb) the fiscal quarter ending in 1.65 to 1.00
September, 1999, together with the
three preceding fiscal quarters
(cc) the fiscal quarter ending in 1.70 to 1.00
December, 1999, together with the
three preceding fiscal quarters
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Minimum Interest Minimum Interest
Coverage Ratio Coverage Ratio
Prior to the New On and After the
Senior Note New Senior Note
Period Issuance Date Issuance Date
(dd) the fiscal quarter ending in 1.75 to 1.00
March, 2000, together with the three
preceding fiscal quarters
(b) Section 8.11 of the Credit Agreement is amended by deleting
subsection (a) thereof in its entirety and by substituting the following in lieu
thereof:
"(a) Advances or loans evidenced by the Customer Notes,
provided that the sum of (i) the aggregate unpaid principal
balance of such Customer Notes outstanding at any one time,
plus (ii) the aggregate amount of the Borrower's contingent
liabilities in respect of the guarantees permitted under
Section 8.9(f) hereof, plus (iii) the aggregate amount of
all repurchase obligations or other contingent liabilities
of the Borrower in respect of such Customer Notes
outstanding at any one time, may not exceed $25,000,000 at
any one time, and provided further that the aggregate amount
of any such advances or loans outstanding at any one time to
any obligor on such Customer Notes, plus the amount of the
Borrower's contingent liabilities in respect of its
guarantees of such obligor's indebtedness, liabilities or
other obligations, may not exceed $3,000,000;"
Section Two. Representations and Warranties. To induce the
Lenders to enter into this Amendment No. 11, the Borrower warrants and
represents to the Lenders as follows:
(a) the recitals contained in this Amendment No. 11 are true and
correct in all respects;
(b) after giving effect to this Amendment No. 11, all of the
representations and warranties contained in the Credit Agreement and each other
Credit Document to which the Borrower is a party continue to be true and correct
in all material respects as of the date hereof, as if repeated as of the date
hereof, except for such representations and warranties which, by their terms,
are only made as of a previous date;
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(c) the execution, delivery and performance of this Amendment No.
11 by the Borrower is within its corporate powers, has been duly authorized by
all necessary corporate action, the Borrower has received all necessary consents
to and approvals for the execution, delivery and performance of this Amendment
No. 11 (if any shall be required) and this Amendment No. 11 does not and will
not contravene or conflict with any provision of law or of the charter or
by-laws of the Borrower or with the terms or provisions of any other document or
agreement to which the Borrower is a party or by which the Borrower or its
property may be bound; and
(d) upon its execution, this Amendment No. 11 shall be a legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms.
Section Three. Conditions Precedent. This Amendment No. 11 shall
become effective when the last of the following events shall have occurred:
(a) the Agent shall have received a fully executed counterpart of
this Amendment No. 11;
(b) no Default shall have occurred and be continuing which
constitutes an Event of Default or would constitute an Event of Default upon the
giving of notice or lapse of time or both, and no event or development which has
had or is reasonably likely to have a Material Adverse Effect shall have
occurred, in each case since the date of delivery to the Agent and the Lenders
of the Borrower's most recent financial statement, and the Agent and the Lenders
shall have received a certificate from the Borrower, executed by its Chief
Financial Officer, as to the truth and accuracy of this paragraph (b);
(c) the Agent and the Lenders shall have received such additional
documents to further effectuate the purpose of this Amendment No. 11 as any of
them or their respective counsel may reasonably request.
Section Four. General Provisions.
(a) Except as herein expressly amended, the Credit Agreement and
all other agreements, documents, instruments and certificates executed in
connection therewith are ratified and confirmed in all respects and shall remain
in full force and effect in accordance with their respective terms.
(b) All references to the Credit Agreement shall mean the Credit
Agreement as amended as of the effective date hereof, and as amended hereby and
as hereafter amended, supplemented and modified from time to time.
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(c) This Amendment No. 11 may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which shall
be an original and all which shall constitute one and the same agreement.
(d) This Amendment No. 11 shall be governed by, construed and
interpreted in accordance with the internal laws of the State of New York,
without regard to the conflicts of law principles thereof.
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IN WITNESS WHEREOF, each of the Borrower, the Lenders, the
Issuing Bank and the Agent has signed below to indicate its agreement with the
foregoing and its intent to be bound thereby.
DI GIORGIO CORPORATION
By: /s/ Robert A. Zorn
Name: Robert A. Zorn
Title: Senior Vice President
BT COMMERCIAL CORPORATION, as
Agent and as a Lender
By: /s/ Frank A. Chiavari
Name: Frank A. Chiavari
Title: Vice President
LASALLE NATIONAL BANK, as a Lender
By: /s/ Christopher G. Clifford
Name: Christopher G. Clifford
Title: Sr. Vice President
IBJ SCHRODER BANK & TRUST
COMPANY, as a Lender
By: /s/ Wing C. Louie
Name: Wing C. Louie
Title: Vice President
CONGRESS FINANCIAL
CORPORATION, as a Lender
By: /s/ Thomas McGregor
Name: Thomas McGregor
Title: Assistant Vice President
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PNC BANK, as a Lender
By: /s/ Michael Richards
Name: Michael Richards
Title: Assistant Vice President
SUMMIT COMMERCIAL/GIBRALTAR
CORP., as a Lender
By: /s/ Peter J. Hollitscher
Name: Peter J. Hollitscher
Title: Vice President
BANKERS TRUST COMPANY, as Issuing
Bank
By: /s/ Frank A. Chiavari
Name: Frank A. Chiavari
Title: Vice President
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEETS, STATEMENTS OF OPERATIONS, STATEMENT OF
STOCKHOLDERS' DEFICIENCY AND STATEMENT OF CASH FLOWS FROM FORM 10Q FOR THE
PERIOD ENDED MARCH 28, 1998
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-2-1999
<PERIOD-START> DEC-28-1997
<PERIOD-END> MAR-28-1998
<CASH> 1,373
<SECURITIES> 0
<RECEIVABLES> 75,806
<ALLOWANCES> 4,442
<INVENTORY> 58,760
<CURRENT-ASSETS> 138,837
<PP&E> 36,440
<DEPRECIATION> 14,425
<TOTAL-ASSETS> 279,294
<CURRENT-LIABILITIES> 115,133
<BONDS> 155,000
0
0
<COMMON> 0
<OTHER-SE> (3,362)
<TOTAL-LIABILITY-AND-EQUITY> 279,294
<SALES> 279,720
<TOTAL-REVENUES> 281,556
<CGS> 252,804
<TOTAL-COSTS> 276,274
<OTHER-EXPENSES> 276
<LOSS-PROVISION> 375
<INTEREST-EXPENSE> 4,776
<INCOME-PRETAX> 230
<INCOME-TAX> 310
<INCOME-CONTINUING> (80)
<DISCONTINUED> 0
<EXTRAORDINARY> (201)
<CHANGES> 0
<NET-INCOME> (281)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
