<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the sixteen weeks ended September 19, 1997 Commission file number 0-6566
Thorn Apple Valley, Inc.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Michigan 38-1964066
- ------------------------------------- -------------------------------------
(State of other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
26999 Central Park Blvd., Suite 300, Southfield, Michigan 48076
- --------------------------------------------------------- ----------
(Address of principal executive offices) (zip Code)
Registrant's telephone number, including area code (248) 213-1000
- -------------------------------------------------- --------------
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
--- ---
At September 19, 1997, there were 6,118,268 shares of Common Stock outstanding.
<PAGE> 2
THORN APPLE VALLEY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
September 19, May 30,
1997 1997
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,070,665 $ 6,028,698
Short-term investments 500,000 500,000
Accounts receivable, less allowance for doubtful accounts
(September 19, 1997, $897,800; May 30, 1997, $888,500) 56,769,029 44,888,327
Inventories (Note 2) 62,691,866 65,115,331
Refundable income taxes 716,331
Deferred income taxes (Note 7) 2,870,000 2,727,000
Prepaid expenses and other current assets 7,320,343 7,683,296
------------ ------------
Total current assets 137,938,234 126,942,652
Property, plant and equipment: ------------ ------------
Land 1,233,933 1,276,933
Buildings and improvements 65,835,972 67,692,480
Machinery and equipment 158,921,122 158,207,873
Transportation equipment 7,091,141 7,056,966
Property under capital leases 9,985,279 10,162,649
Construction in progress 5,073,522 3,245,764
------------ ------------
248,140,969 247,642,665
Less accumulated depreciation 116,569,600 111,762,145
------------ ------------
131,571,369 135,880,520
------------ ------------
Other assets:
Intangible assets, net of accumulated amortization of $1,936,846 and
$839,300 at September 19, 1997 and May 30, 1997, respectively 31,635,154 31,893,400
Other 7,806,820 8,069,885
------------ ------------
Total other assets 39,441,974 39,963,285
------------ ------------
$308,951,577 $302,786,457
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 40,490,830 $ 41,111,001
Accrued liabilities 27,643,831 23,661,536
Current portion of long-term debt 75,448,424 4,566,445
Income taxes 1,425,403
------------ ------------
Total current liabilities 143,583,085 70,764,385
------------ ------------
Other noncurrent liabilities 3,675,000 3,675,000
Long-term debt (Note 4) 86,229,498 150,128,541
Deferred income taxes (Note 7) 1,389,000 1,138,000
------------ ------------
Total noncurrent liabilities 91,293,498 154,941,541
------------ ------------
Shareholders' equity:
Preferred stock: $1 par value; authorized 200,000 shares; issued none
Common nonvoting stock: $.10 par value; authorized 20,000,000 shares;
issued none
Common voting stock: $.10 par value; authorized 20,000,000 shares;
issued 6,118,268 shares September 19, 1997 and 6,110,480 shares
May 30, 1997 611,827 611,048
Capital in excess of par value 10,592,446 10,500,213
Retained earnings 62,870,721 65,969,270
------------ ------------
74,074,994 77,080,531
------------ ------------
$308,951,577 $302,786,457
============ ============
</TABLE>
See notes to consolidated financial statements.
1
<PAGE> 3
THORN APPLE VALLEY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATION
(UNAUDITED)
<TABLE>
<CAPTION>
Sixteen Weeks Ended
-------------------
September 19, September 20,
1997 1996
------------ ------------
<S> <C> <C>
Net Sales $277,932,676 $286,882,228
------------ ------------
Operating costs and expenses:
Cost of goods sold, including delivery costs 257,180,988 261,583,402
Selling 8,923,217 9,878,581
General and administrative 8,115,768 9,217,228
Depreciation and amortization 5,784,819 5,358,581
------------ ------------
280,004,792 286,037,792
------------ ------------
Income (loss) from operations (2,072,116) 844,436
------------ ------------
Other expenses (income):
Interest 3,427,066 3,904,120
Other, net (673,633) (417,061)
------------ ------------
2,753,433 3,487,059
------------ ------------
Loss from operations before income taxes (4,825,549) (2,642,623)
Benefit for income taxes (Note 7) (1,727,000) (930,000)
------------ ------------
Net Loss ($3,098,549) ($1,712,623)
============ =============
Loss per share of common stock: (Note 5) ($0.51) ($0.29)
============ ============
Weighted average number of shares
outstanding (Note 5) 6,115,175 5,812,042
============ ============
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 4
THORN APPLE VALLEY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Common stock Capital in
---------------------- excess of Retained
Shares Amount par value earnings
--------- -------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, May 31, 1996 5,786,129 $578,613 $ 7,011,361 $69,135,511
Net loss (1,712,623)
Shares issued under employee stock purchase plan 4,675 468 44,227
Newly issued shares of common stock (Note 8) 279,883 27,988 2,972,358
--------- -------- ----------- -----------
Balance, September 20, 1996 6,070,687 $607,069 $10,027,946 $67,422,888
========= ======== =========== ===========
Balance, May 30, 1997 6,110,480 $611,048 $10,500,213 $65,969,270
Net loss (3,098,549)
Shares issued under employee stock purchase plan 2,788 279 41,483
Exercise of stock options 5,000 500 50,750
--------- -------- ----------- -----------
Balance, September 19, 1997 6,118,268 $611,827 $10,592,446 $62,870,721
========= ======== =========== ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 5
THORN APPLE VALLEY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Sixteen Weeks Ended
-------------------
September 19, September 20,
1997 1996
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($3,098,549) ($1,712,623)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation 5,526,573 5,100,335
Amortization of intangibles 258,246 258,246
Deferred income taxes 108,000 1,528,000
(Gain) loss on disposition of
property, plant and equipment (284,204) 148,751
Provision for losses on accounts
receivable 9,300 94,000
(Increase) decrease in assets:
Accounts receivable (11,890,002) (3,510,204)
Inventories 2,423,465 (9,506,961)
Refundable income taxes 626,018 9,910,431
Prepaid expenses and other assets (716,331) 561,301
Increase (decrease) in liabilities:
Accounts payable (620,171) 1,781,028
Accrued liabilities 3,982,295 5,950,717
Income taxes payable (1,425,403)
---------- ------------
Total adjustments (2,002,214) 12,315,644
---------- ------------
Net cash provided by (used in)
operating activities (5,100,763) 10,603,021
---------- ------------
Cash flows from investing activities:
Capital expenditures (2,951,388) (2,146,013)
Proceeds from sale of property,
plant and equipment 2,018,170 122,975
---------- ------------
Net cash used in investing
activities (933,218) (2,023,038)
---------- ------------
Cash flows from financing activities:
Proceeds from common stock sold to
company officer (Note 8) 3,000,346
Proceeds from long-term debt 8,100,000 4,400,000
Principal payments on long-term debt (1,117,064) (989,531)
Net payments under lines of credit (14,700,000)
Net payments to officers (96,180)
Proceeds from employee stock purchase
plan 41,762 44,695
Proceeds from stock options exercised 51,250
---------- ------------
Net cash provided by (used in)
financing activities 7,075,948 (8,340,670)
---------- ------------
Net increase in cash and cash
equivalents 1,041,967 239,313
Cash and cash equivalents at
beginning of quarter 6,028,698 5,809,559
---------- ------------
Cash and cash equivalents
at the end of the quarter $7,070,665 $ 6,048,872
========== ============
Supplemental disclosures of
cash flow information:
Cash paid during the quarter for:
Interest, net of amounts capitalized $ 3,146,898 $ 2,986,540
=========== ============
Income taxes paid (refunded), net $ 305,834 ($12,368,432)
=========== ============
Noncash investing activities:
Capital lease obligations $ 856,364
=========== ============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 6
THORN APPLE VALLEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - ACCOUNTING POLICIES:
The condensed consolidated financial statements have been prepared in
accordance with generally accepted accounting principles and reflect,
in the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of financial
position as of September 19, 1997 and May 30, 1997, and the results of
operations and cash flows for the periods presented. The condensed
consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes contained in Thorn
Apple Valley, Inc.'s Annual Report on Form 10-K for the fiscal year
ended May 30, 1997. Certain amounts from prior years have been
reclassified to conform with the current year presentation. The
results for the sixteen weeks ended September 19, 1997 are not
necessarily indicative of the results to be expected for the fiscal
year ending May 29, 1998.
NOTE 2 - INVENTORIES:
Inventories are stated at the lower of last-in, first-out (LIFO) cost or
market. No provision has been made during the current year for
last-in, first-out (LIFO) reserve adjustments. Inventories would have
been approximately $11,789,000 higher at September 19, 1997 and May
30,1997 if they had been stated at the lower of first-in, first-out
(FIFO) cost or market. The following is a breakdown of inventories by
classifications:
<TABLE>
<CAPTION>
September 19, May 30,
1997 1997
------------- ----------
<S> <C> <C>
Supplies $10,396,141 $9,447,180
Raw Materials 24,441,253 21,911,451
Work in progress 3,938,855 4,016,547
Finished goods 35,704,617 41,529,153
----------- -----------
74,480,866 76,904,331
Less LIFO reserve 11,789,000 11,789,000
----------- -----------
Inventory balance $62,691,866 $65,115,331
=========== ============
</TABLE>
NOTE 3 - LINE OF CREDIT:
In August 1997, the Company obtained a temporary $15.0 million seasonal
line of credit, with its existing four participating banks, that
expires on February 6, 1998, and bears interest at an interest rate
equal to the prime rate. The seasonal line of credit is secured by a
first lien on substantially all of the Company's assets. The temporary
seasonal line of credit will be used to help finance the Company's
traditional holiday inventory buildup. At September 19, 1997, none of
the seasonal line of credit was drawn upon.
NOTE 4 - LONG-TERM DEBT:
At September 19, 1997, the Company has a revolving credit agreement with
four participating banks, whereby it could borrow, in the aggregate, up
to $81.6 million, bearing interest at variable rates ranging from below
prime rate to the prime rate charged by major banks. Unused lines of
credit of $9.4 million were available at September 19, 1997. The
revolving credit agreement expires on May 30, 1998, accordingly, the
Company has classified borrowings under the revolving credit agreement
as current debt at September 19, 1997.
The Company has various agreements between parties involved in the
revolving credit agreement, the private placement lenders and the
limited obligation revenue bond lender, whereby it has granted on a
pro-rata basis, a first lien on substantially all of the Company's
assets. These agreements contain financial covenants with respect to
consolidated net worth and consolidated earnings available for interest
expense (as defined therein). In addition, among other things, the
agreements limit borrowings, capital expenditures and investments, and
do not allow the payment of cash dividends or repurchase of the
Company's common stock.
The Company's industrial revenue and economic revenue bond agreements
contain restrictive covenants that include the maintenance of a minimum
level of consolidated net worth (as defined therein) and of certain
financial ratios.
5
<PAGE> 7
NOTE 5 - EARNINGS PER SHARE OF COMMON STOCK:
Earnings per share of common stock are based on the weighted average number
of common shares outstanding during each quarter. The potential
dilution from shares issuable under employee stock option plans and
convertible subordinated debentures are excluded from the computation
of the weighted average number of common shares outstanding since they
are either not material or antidilutive.
Statement of Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings
per Share," was issued in February 1997. Adoption of SFAS 128,
effective for reporting periods ending after December 15, 1997, is not
expected to have a material effect in reported earnings per share.
NOTE 6 - STOCK OPTION PLANS:
The Company's 1996 Employee Stock Option Plan authorized the Company's
Stock Option Committee to grant options for up to 600,000 shares of the
Company's common stock to present or prospective employees. At
September 19, 1997, there were 54,500 options granted but not exercised
at $10.25 per share and 545,500 shares remained to be granted under the
1996 Plan.
At September 19, 1997, there were 669,800 options granted but not
exercised at prices of $10.25, $17.00, $23.00 and $26.00 per share and
141,000 options granted but not exercised at prices of $2.56 and $19.67
per share under the 1990 and 1982 Employee Stock Option Plans,
respectively. Under the 1990 and 1982 plans no shares remain to be
granted.
The Company's Stock Option Committee may designate any requirements
regarding option price, waiting period or an exercise date for options
granted under the plans, except that incentive stock options may not be
exercised at less than the fair market value of the stock on the date
of grant, and no option may remain outstanding for more than 10 years.
Under all plans, the exercise price of each option equals the market
price of the Company's common stock on the date of grant. Under all
plans, the options granted are immediately exercisable.
NOTE 7 - INCOME TAXES:
Deferred income taxes, on a SFAS No. 109 basis, reflect the estimated future
tax effect of temporary differences between the amount of assets and
liabilities for financial reporting purposes and such amounts as
measured by tax laws and regulations.
The Company's effective tax benefit rate, was (35.8) percent and (35.2)
percent for the sixteen weeks ended September 19, 1997 and September
20, 1996, respectively.
NOTE 8 - COMMON STOCK ISSUED:
During fiscal 1997, the Company sold to its Chairman of the Board of
Directors, who is also a significant shareholder of the Company,
279,883 newly issued shares of the Company's common stock for an
approximate purchase price of $3.0 million. This sale was in
accordance with the long-term debt agreements entered into on September
11, 1996.
6
<PAGE> 8
THORN APPLE VALLEY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
Thorn Apple Valley, Inc., referred to hereinafter collectively with
its predecessors and subsidiaries as the ("Company") is a major producer of
processed meat and poultry products and is one of the largest slaughterers
of hogs and sellers of related fresh pork products in the United States.
The Company is engaged in a single segment business with two principal
product categories; processed meat and poultry products and fresh pork. The
Company's processed meat products operations engages in the production and
sale of consumer-brand labeled, packaged meat and poultry products, such as
bacon, hot dogs and lunch meats, hams, smoked sausages and turkey products.
The Company markets its processed meat products under premium and other
proprietary brand labels including "Thorn Apple Valley," "Colonial", "Corn
King", "Wilson Certified" and "Cavanaugh Lakeview Farms", as well as under
customer-owned private labels with major supermarket chains and other
customers. The Company sells its products principally to wholesalers,
supermarkets and other manufacturers throughout the United States and in
selected international markets. The Company's fresh pork operation is
engaged in the slaughtering and cutting of hogs and the related sale of
primal cuts of fresh pork products. The Company is the largest purchaser of
hogs in the Michigan, Indiana and Ohio markets.
The Company was originally incorporated in 1959 as a Michigan
corporation. It reincorporated in Delaware in 1971 and reincorporated in
Michigan in 1977.
The Company's business strategy is to increase revenue and enhance
profitability by (i) increasing the sales of the Company's higher margin
premium brand processed meats products while reducing the Company's
reliance on sales of lower margin private label products, (ii) continuing to
improve production efficiencies in the Company's fresh pork and processed
meats production facilities, (iii) developing and marketing new processed
meat products, including products targeted to health-conscious consumers,
and (iv) increasing overall sales volume through additional marketing
strategies with an emphasis on sales to international markets, including
Russia, Korea and Mexico.
The Company's principal executive offices are located at 26999 Central
Park Blvd., Suite 300, Southfield, Michigan 48076 (telephone number: (248)
213-1000).
RESULTS OF OPERATIONS
As consumers have become more health conscious, hog slaughterers and
meat and poultry processors have focused on providing healthier and more
convenient fresh pork and processed meat products to successfully compete
against other protein sources, particularly poultry and seafood. In
addition, increased amounts of poultry are being used in processed meat
products which were traditionally made with only beef and pork. Per capita
pork consumption has remained relatively stable in the United States in
recent years.
Profitability in the hog slaughter industry is affected by the cost and
supply of hogs and fresh pork product selling prices. The slaughtering
industry has generally been characterized by relatively narrow profit
margins and a trend toward larger, higher volume plants in order to reduce
per unit costs. Consumer packaged meat and poultry processors generally
receive higher profit margins on premium labeled items than on fresh pork
and by-products.
Hog prices represent the principal production cost of pork slaughterers
and are an important element in the cost of certain processed meat products
as well. Hog prices and hog supply are determined by constantly changing
market forces of supply and demand. The ability of hog slaughterers and
processors to maintain satisfactory margins may be affected by a multitude
of market factors over which such industry participants have limited
control, including industry-wide slaughter levels, competition, the relative
price of substitute products, overall domestic retail demand and the level
of exports.
The first quarter of each fiscal year consists of sixteen weeks, and
each subsequent quarter consists of twelve weeks, except that the fourth
quarter consists of thirteen weeks in the case of a 53-week fiscal year.
The following discussion analyzes material changes in the financial
information on a period to period basis.
7
<PAGE> 9
Sixteen weeks ended September 19, 1997 compared to sixteen weeks ended
September 20, 1996.
The Company's net loss for the first quarter ended September 19, 1997,
was $3.1 million compared with a net loss of $1.7 million for the comparable
period of the prior year. The increase in net loss is primarily
attributable to lower margins in both the processed meat and fresh pork
operations. Although the processed meats division experienced an increase
in sales volume the product mix was not satisfactory resulting in more
lower-margin sales which negatively impacted operating results. Higher
losses in the fresh pork division was primarily attributable to lower
industry-wide hog gross margins.
Margins in the processed meat division were lower primarily as a result
of the loss of a large, higher-margin contract, which is bid on annually and
primarily impacts first-quarter results, and the lead-time associated with
the Company's reorganization of its processed meat sales function. In the
fourth quarter of fiscal 1997, the Company disclosed that it had reorganized
its sales efforts and was implementing a rigorous training program designed
to optimize individual sales performance. This reorganization was in
response to the Company's efforts to shift sales away from lower-margin
commodity items in favor of premium processed and proprietary branded
products. Fresh pork profit margins remained under pressure during the
first quarter as a result of an industry-wide market hog shortage and
continuing high prices for hogs. Based upon recent market hog projections
the Company is optimistic that hog production is now expanding. The
September 1, USDA Hogs and Pigs Inventory Report showed a 3% increase in
year-ago breeding herd levels. In addition, the report indicates a 7%
increase in farrowings during the projected upcoming December to February
sow farrowing period, over the prior-year levels.
Net sales in the first quarter of fiscal 1998 were down slightly to
$277.9 million from $286.9 million reported a year ago. The decrease in net
sales dollars was the result of a decrease in processed meat sales of 5.2%;
fresh pork sales remained relatively unchanged from year-ago levels. The
decrease in processed meat product sales was primarily attributable to an
overall decrease in average selling prices of 7.1%, primarily the result of
the change in product mix, offset in part by a increase in units shipped of
2.1%. The slight increase in fresh pork sales of .4% was principally due to
an increase in sales volume of 4% offset in part by a decrease in average
selling prices of 3.5%. The decrease in average selling prices was the
result of increased competitive pressures combined with a 1.9 % decrease in
the cost of live hogs, the Company's primary raw material.
Cost of goods sold (including delivery costs) decreased by $4.4
million, or 1.7%, as a result of the lower net sales dollars, along with the
slight decrease in the cost of live hogs referred to above. As a percentage
of net sales, cost of goods sold increased to 92.5% from 91.3%, primarily as
a result of decreased average selling prices in both the Company's processed
meat and fresh pork divisions.
Selling expenses decreased approximately $1.0 million, or 9.7%. As a
percentage of net sales, selling expenses decreased to 3.2% from 3.4%.
General and administrative expenses decreased $1.1 million, or 12.0%.
This decrease is attributable to several factors including a reduction in
the Company's provision for the Michigan Single Business Tax (SBT) (a non
corporate income tax expense) as a result of mandated state changes, lower
professional fees and cost reductions throughout the organization. As a
percentage of net sales, general and administrative expenses decreased to
2.9% from 3.1%.
Interest expense decreased approximately $.5 million, or 12.2%. The
decrease is attributable to lower long-term borrowings and lower average
interest rates under the Company's revolving credit agreement and lower
average interest rates under the Company's long-term private placement note
agreements.
The benefit for income taxes, as a result of the net loss, increased by
$.8 million, primarily due to the increase in pre-tax loss from operations
from a loss of $2.6 million in the first quarter of fiscal 1997 to a loss of
$4.8 million in the first quarter of fiscal 1998, resulting from the
factors discussed above. The Company's effective tax benefit rate increased
to (35.8%) from (35.2%).
Loss per share of common stock increased to a net loss of $.51 per
share from a net loss of $.29 per share in the comparable year-ago period,
due to decreased profitability resulting from the factors discussed above.
The results for the sixteen weeks ended September 19, 1997 are not
necessarily indicative of the results to be expected for fiscal 1998.
8
<PAGE> 10
FINANCIAL CONDITION
The Company's business is characterized by high unit sales volume and
rapid turnover of inventories and accounts receivable. Because of the rapid
turnover rate, the Company considers its inventories and accounts receivable
to be highly liquid and readily convertible into cash. Borrowings under the
revolving credit agreement are used when needed to finance increases in the
levels of inventories and accounts receivable resulting from seasonal and
other market-related fluctuations in raw material costs and quantities. The
demand for seasonal borrowings usually peaks in early December when ham
inventories and accounts receivable are at their highest levels, and these
borrowings are generally repaid in January when the accounts receivable
generated by the sales of these hams are collected.
The Company has historically maintained lines of credit in excess of
the cash needs of its business. At September 19, 1997, the Company had a
revolving credit agreement with four participating financial institutions
whereby it could borrow in the aggregate up to $81.6 million, of which $71.0
million was drawn upon and $1.25 million was used to support letters of
credit. The revolving credit agreement expires on May 30, 1998. Management
is currently seeking alternative financing arrangements with various
financial institutions to replace the revolving credit agreement upon its
expiration. Additionally, in August 1997, the Company obtained a temporary
$15.0 million seasonal line of credit with the same four participating
institutions which will be used to help finance the Company's traditional
holiday inventory buildup. This temporary seasonal line of credit expires
on February 6, 1998.
At September 19, 1997, the Company had approximately $7.0 million in
cash. Cash used in operations during the sixteen weeks ended September 19,
1997 was approximately $5.1 million. Cash available at the beginning of the
quarter less cash used in operations plus cash acquired from financing
activities was used principally to pay down borrowings of other long-term
debt of approximately $1.1 million and to fund net capital expenditures of
$.9 million.
The Company's debt is secured by substantially all of the Company's
assets. In addition, the various loan agreements contain financial
covenants with respect to consolidated net worth and interest coverage ratio
(as defined therein). In addition, the agreements limit borrowings, capital
expenditures and investments, and do not allow the payment of cash dividends
or repurchase of the Company's common stock.
The Company's two other revenue bond agreements contain restrictive
covenants that include the maintenance of a minimum level of consolidated
net worth (as defined therein) and of certain financial ratios.
Management believes that funds provided from operations and borrowings
under available lines of credit will permit it to continue to finance its
current operations and to further develop its business in accordance with
its operating strategies.
EXHIBITS AND REPORTS ON FORM 8-K
There were no reports filed on form 8-K for the period ending September
19, 1997.
9
<PAGE> 11
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 thereunto duly authorized.
THORN APPLE VALLEY, INC.
------------------------
(Registrant)
Date: October 30, 1997 By: \s\Louis Glazier
---------------- ---------------------------
Louis Glazier
Executive Vice President of
Finance and Administration
Chief Financial Officer
10
<PAGE> 12
EXHIBIT INDEX
EXHIBIT NO. DESCRIPITION
- ----------- ------------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A)
CONSOLIDATED BALANCE SHEET AT SEPTEMBER 19, 1997, CONSOLIDATED STATEMENTS OF
OPERATION FOR THE 16 WEEKS ENDED SEPTEMBER 19, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH (B) FORM 10Q, QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-29-1998
<PERIOD-START> JUN-01-1997
<PERIOD-END> SEP-19-1997
<CASH> 7,570,665
<SECURITIES> 0
<RECEIVABLES> 57,666,829
<ALLOWANCES> 897,800
<INVENTORY> 62,691,866
<CURRENT-ASSETS> 137,938,234
<PP&E> 248,140,969
<DEPRECIATION> 116,569,600
<TOTAL-ASSETS> 308,951,577
<CURRENT-LIABILITIES> 143,583,085
<BONDS> 86,229,498
0
0
<COMMON> 611,827
<OTHER-SE> 73,463,167
<TOTAL-LIABILITY-AND-EQUITY> 308,951,577
<SALES> 277,932,676
<TOTAL-REVENUES> 277,932,676
<CGS> 257,180,988
<TOTAL-COSTS> 257,180,988
<OTHER-EXPENSES> 22,823,804
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,427,066
<INCOME-PRETAX> (4,825,549)
<INCOME-TAX> (1,727,000)
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