UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 2, 1994
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 0-7803
D O S K O C I L C O M P A N I E S I N C O R P O R A T E D
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-2535513
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2601 NW Expressway, Suite 1000W, Oklahoma City, Oklahoma 73112
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (405)879-5500
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13, or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
YES X NO
On August 5, 1994, the number of shares outstanding of the
registrant's common stock, $.01 par value, was 7,940,168.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollar amounts in thousands, except par value)
<CAPTION>
July 2, January 1,
ASSETS 1994 1994
________ __________
<S> <C> <C>
Current assets: (Unaudited)
Cash and cash equivalents $ 6,842 $ 6,203
Receivables 38,448 36,283
Inventories 69,194 39,984
Other current assets 5,703 2,101
________ ________
Total current assets 120,187 84,571
Property, plant and equipment, net of
accumulated depreciation and amortization
of $25,462 and $20,046 124,948 77,678
Intangible assets, net of accumulated
amortization of $3,614 and $2,837 94,795 22,163
Deferred charges and other assets 45,813 44,907
Reorganization value in excess of amounts
allocable to identifiable assets, net of
accumulated amortization of $13,557 and
and $11,090 85,095 87,562
________ ________
$470,838 $316,881
======== ========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Current maturities of long-term debt $ 20,104 $ 2,330
Accounts payable 17,223 10,357
Accrued liabilities 37,526 40,732
________ ________
Total current liabilities 74,853 53,419
Long-term debt 262,062 127,906
Other long-term liabilities 80,208 79,987
Stockholders' equity:
Common stock, $.01 par value, 20,000,000
shares authorized, 7,940,168 shares
issued and outstanding (7,918,342
shares at January 1, 1994) 79 79
Capital in excess of par value 112,465 112,315
Retained earnings (deficit) (57,155) (54,910)
Minimum pension liability adjustment (1,575) (1,575)
________ ________
53,814 55,909
Unearned compensation (99) (340)
________ ________
Total stockholders' equity 53,715 55,569
________ ________
$470,838 $316,881
======== ========
<FN>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - UNAUDITED
(Dollar amounts in thousands, except per share figures)
<CAPTION>
Three Months Ended Six Months Ended
___________________ __________________
July 2, July 3, July 2, July 3,
1994 1993 1994 1993
_______ _______ _______ _______
<S> <C> <C> <C> <C>
Net sales $166,702 $158,066 $322,925 $302,621
Cost of sales 136,036 132,214 265,518 252,686
________ ________ ________ ________
Gross profit 30,666 25,852 57,407 49,935
Operating expenses:
Selling 18,717 14,108 34,831 28,429
General and administrative 6,776 6,712 13,381 13,268
Amortization of intangible
assets 1,698 1,546 3,244 3,092
________ ________ ________ ________
Total 27,191 22,366 51,456 44,789
________ ________ ________ ________
Operating income 3,475 3,486 5,951 5,146
Other income (expense):
Interest and financing
costs (4,483) (3,270) (8,062) (6,287)
Other, net (155) 324 (312) 189
________ ________ ________ ________
Total (4,638) (2,946) (8,374) (6,098)
________ ________ ________ ________
Income (loss) before
income taxes (1,163) 540 (2,423) (952)
Income tax benefit 382 507 1,164 469
________ ________ ________ ________
Income (loss) before extra-
ordinary item and cumulative
effect of a change in
accounting principle (781) 1,047 (1,259) (483)
Extraordinary loss on early
extinguishment of debt, net
of income tax benefit of
$1,495 (986) - (986) -
Cumulative effect of a change
in accounting for post-
retirement benefits other
than pensions - - - (34,426)
________ ________ ________ ________
Net income (loss) $ (1,767) $ 1,047 $ (2,245) $(34,909)
======== ======== ======== ========
Continued
</TABLE>
<PAGE>
<TABLE>
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - UNAUDITED
(Dollar amounts in thousands, except per share figures)
<CAPTION>
Three Months Ended Six Months Ended
___________________ __________________
July 2, July 3, July 2, July 3,
1994 1993 1994 1993
_______ _______ _______ _______
<S> <C> <C> <C> <C>
Earnings (loss) per share-
primary and fully diluted:
Income (loss) before extra-
ordinary item and
cumulative effect of a
change in accounting
principle $(0.10) $0.13 $(0.16) $(0.07)
Extraordinary loss on
early extinguishment of
debt, net of tax benefit (0.12) - (0.12) -
Cumulative effect of a
change in accounting for
postretirement benefits
other than pensions - - - (4.93)
______ _____ ______ ______
Net income (loss) $(0.22) $0.13 $(0.28) $(5.00)
====== ===== ====== ======
Weighted average number
of common and common
equivalent shares
outstanding -
primary 7,921 8,007 7,921 6,977
fully diluted 7,921 8,016 7,921 6,977
<FN>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - UNAUDITED
Increase (Decrease) in Cash and Cash Equivalents
(Dollar amounts in thousands)
<CAPTION>
Six Months Ended
____________________
July 2, July 3,
1994 1993
_______ _______
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (2,245) $(34,909)
Adjustments to reconcile net income (loss)
to net cash provided (used) by operating
activities:
Depreciation and amortization 9,327 7,783
Income taxes (1,475) (544)
Postretirement medical benefits 27 667
Deferred compensation 493 530
Loss on early extinguishment of debt, net
of income taxes 986 -
Cumulative effect of a change in accounting
for postretirement benefits other
than pensions - 34,426
Changes in:
Receivables 6,936 (1,281)
Inventories (7,452) (8,103)
Other current assets (262) 389
Deferred charges and other assets (377) (300)
Accounts payable and accrued liabilities (7,233) (888)
Noncurrent liabilities (36) 16
Other 6 68
________ ________
Net cash provided (used) by operating
activities (1,305) (2,146)
________ ________
Cash flows from investing activities:
Purchase of property, plant and equipment (5,911) (7,710)
Acquisition of International Multifoods
Foodservice Corp., net of cash acquired (137,442) -
Payments received on notes receivable 205 353
Proceeds from sale of facilities 361 500
Net cash used by assets held for sale - (6,548)
________ ________
Net cash provided (used) by investing
activities (142,787) (13,405)
________ ________
Cash flows from financing activities:
Proceeds from debt obligations, net of
issuance costs 141,280 106,343
Borrowings under revolving working capital
facility 118,500 48,599
Payments on revolving working capital
facility (115,000) (98,011)
Proceeds from other debt obligations 2,155 -
Payments on capital lease and debt
obligations (1,116) (74,355)
Issuance of common stock - 26,883
Payment on early extinguishment of debt (1,088) -
________ ________
Net cash provided (used) by financing
activities 144,731 9,459
________ ________
Increase (decrease) in cash and cash
equivalents 639 (6,092)
Cash and cash equivalents at beginning of
period 6,203 9,312
________ ________
Cash and cash equivalents at end of period $ 6,842 $ 3,220
======== ========
<FN>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
</TABLE>
<PAGE>
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
NOTE 1 GENERAL
The accompanying condensed consolidated financial
statements include the accounts of Doskocil Companies
Incorporated ("Doskocil") and all majority-owned subsidiaries
(collectively, the "Company") and have been prepared without
audit. The Balance Sheet at January 1, 1994, has been derived
from financial statements which have been audited by Coopers &
Lybrand L.L.P., independent accountants.
In the opinion of the Company, the accompanying unaudited
condensed consolidated financial statements contain all
adjustments (adjustments are of a normal, recurring nature except
for entries to record the cumulative effect on years prior to
January 3, 1993 of a change in accounting for postretirement
benefits other than pensions) necessary for a fair presentation
of the financial position as of July 2, 1994 and January 1, 1994,
and the results of operations for the three months and six months
ended July 2, 1994 and July 3, 1993 and cash flows for the six
months ended July 2, 1994 and July 3, 1993. Results for the
three months and six months ended July 2, 1994 are not
necessarily indicative of the results which will be realized for
the year ending December 31, 1994. The financial statements
should be read in conjunction with the Company's Annual Report on
Form 10-K, as amended, for the year ended January 1, 1994.
NOTE 2 RECEIVABLES
Included in receivables of $38.4 million is a note
receivable from an officer due within one year without interest
in the approximate amount of $0.2 million.
NOTE 3 INVENTORIES
Inventories at July 2, 1994 and January 1, 1994 are
summarized as follows (in thousands):
July 2, January 1,
1994 1994
_______ __________
Raw materials and supplies $22,658 $ 8,176
Work in process 4,953 6,254
Finished goods 41,583 25,554
_______ _______
$69,194 $39,984
======= =======
NOTE 4 ACQUISITION
On June 1, 1994, the Company purchased all of the
outstanding stock of International Multifoods Foodservice Corp.,
a division of International Multifoods Corporation, for
approximately $135.8 million. The business, which has been
renamed Doskocil Specialty Brands Company ("Specialty Brands"),
operates as the fourth operating division of Doskocil. Specialty
Brands manufactures frozen food products, including ethnic foods
in the Mexican and Italian segments, as well as appetizers,
entrees and portioned meats. The acquisition has been accounted
for by the purchase method of accounting. The excess of the
aggregate purchase price over fair value of net assets acquired
of approximately $63.7 million was recognized as an intangible
asset and is being amortized over 40 years.
The operating results of Specialty Brands are included in
the Company's consolidated results of operations from the date of
acquisition. The following pro forma financial information
assumes the acquisition occurred at the beginning of 1993. These
results have been prepared for comparative purposes only and do
not purport to be indicative of what would have occurred had the
acquisition been made at the beginning of 1993, or of the results
which may occur in the future.
Six Months Ended
____________________
July 2, July 3,
1994 1993
________ ________
Net sales $401,839 $392,118
Operating income $ 10,202 $ 10,974
Income (loss) before extraordinary
item and cumulative effect of a
change in accounting principle $ (963) $ 228
Net income (loss) $ (1,949) $(34,198)
Earnings per share
Primary and fully diluted $ (.25) $ (4.90)
NOTE 5 LONG-TERM DEBT
On May 25, 1994, the Company consummated a $146.0 million
term loan (the "1994 Term Loan") and a $40.0 million revolving
credit loan (the "1994 Revolving Credit Loan") provided by a bank
group. The proceeds of these transactions were net of $4.7
million of debt issuance costs. The 1994 Term Loan was used to
finance the purchase of Specialty Brands including all fees and
expenses associated with the acquisition, to repay amounts
outstanding under the credit agreement dated April 28, 1993 (the
"1993 Credit Agreement") and to terminate the related interest
rate swap agreement. The proceeds of the 1994 Revolving Credit
Loan were used to repay additional amounts outstanding under the
1993 Credit Agreement. The 1994 Revolving Credit Loan includes a
$5.0 million subfacility for standby and commercial letters of
credit. The 1994 Term Loan and the 1994 Revolving Credit Loan
rank senior to all existing indebtedness and are secured by
essentially all the assets of the Company including accounts
receivable, inventory, general intangibles and mortgaged
properties.
Borrowings under the 1994 Term Loan and the 1994 Revolving
Credit Loan bear interest at an annual rate equal to, at the
Company's option, either (i) Chemical Bank's Base Rate (as
defined in the agreement) plus 1 1/2% or (ii) the LIBOR Option
Rate (as defined in the agreement) plus 2 1/2%. On July 2, 1994,
the weighted average interest rate on the borrowings was 7.19%.
Interest on the borrowings is payable periodically in arrears.
Repayment of the 1994 Term Loan begins December 1994 with
payments at six-month intervals through December 1999. The 1994
Revolving Credit Loan is due January 15, 2000. On July 2, 1994,
the balance outstanding on the 1994 Revolving Credit Loan was
$11.5 million.
In connection with the repayment of the 1993 Credit
Agreement and termination of the above mentioned interest rate
swap agreement, the Company incurred an extraordinary loss in the
amount of $2.5 million before income tax benefit of $1.4 million.
NOTE 6 INCOME TAXES
The provision (benefit) for income taxes consists of the
following components (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
__________________ __________________
July 2, July 3, July 2, July 3,
1994 1993 1994 1993
_____ _____ ______ _____
<S> <C> <C> <C> <C>
Current:
Federal $ (6) $(544) $ 11 $(544)
State 150 37 300 75
_____ _____ _______ _____
$ 144 $ 507 $ 311 $(469)
===== ===== ======= =====
Deferred:
Federal $(295) $ - $(1,244) $ -
State (231) - (231) -
_____ _____ _______ _____
$(526) $ - $(1,475) $ -
===== ===== ======= =====
</TABLE>
The deferred benefit has been recognized in the first half of
1994 based on the Company's projected realization of the benefit
in the current year. The effective tax rate differs from the
statutory rate due primarily to amortization of certain
intangible assets which are not deductible for tax purposes. The
effective tax rate was calculated based on the projected taxable
income for the full fiscal year and the anticipated changes for
fiscal 1994 in the deferred tax assets and related valuation
allowance and the deferred tax liabilities.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Doskocil Companies Incorporated
We have reviewed the condensed consolidated balance sheet
of Doskocil Companies Incorporated and subsidiaries as of July 2,
1994, and the related condensed consolidated statements of
operations for the three month and six month periods ended July
2, 1994, and July 3, 1993, and the condensed consolidated
statementS of cash flows for the six month periods ended July 2,
1994 and July 3, 1993. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data
and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the condensed consolidated
financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally
accepted auditing standards, the consolidated balance sheet as of
January 1, 1994, and the related consolidated statements of
operations, stockholders' equity and cash flows for the period
ended January 1, 1994 (not presented herein), and in our report
dated March 1, 1994, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated
balance sheet as of January 1, 1994, is fairly stated in all
material respects in relation to the consolidated balance sheet
from which it has been derived.
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
August 5, 1994
<PAGE>
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.
DOSKOCIL COMPANIES INCORPORATED
Dated: August 18, 1994 By:/s/ William L. Brady
________________________
William L. Brady
Vice President and
Controller
EXHIBIT 11.1
<TABLE>
DOSKOCIL COMPANIES INCORPORATED AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE - UNAUDITED
(Dollar amounts in thousands, except per share figures)
<CAPTION>
Three Months Ended Six Months Ended
__________________ ________________
July 2, July 3, July 2, July 3,
1994 1993 1994 1993
_______ _______ _______ _______
<S> <C> <C> <C> <C>
Income (loss) before cumulative
effect of a change in accounting
principal $ (781) $1,047 $(1,259) $ (483)
Extraordinary loss on early
extinguishment of debt, net of tax (986) - (986) -
Cumulative effect of a change in
accounting for postretirement
benefits other than pensions - - - (34,426)
_______ ______ _______ ________
Net income (loss) $(1,767) $1,047 $(2,245) $(34,909)
======= ====== ======= =======
Primary earnings per share:
Weighted average number of
common shares outstanding 7,921 7,839 7,921 6,977
Common stock equivalents:
Dilutive options and warrants - 168 - -
______ ______ ______ ______
Weighted average number of
common and common equivalent
shares outstanding 7,921 8,007 7,921 6,977
====== ====== ====== ======
Income (loss) before cumulative
effect of a change in
accounting principal $(0.10) $0.13 $(0.16) $(0.07)
Extraordinary loss on early
extinguishment of debt, net of
tax (0.12) - (0.12) -
Cumulative effect of a change in
accounting for postretirement
benefits other than pensions - - - (4.93)
______ _____ ______ ______
Net income (loss) per share $(0.22) $0.13 $(0.28) $(5.00)
====== ===== ====== ======
Fully diluted earnings per share:
Weighted average number of
common shares outstanding 7,921 7,839 7,921 6,977
Common stock equivalents:
Dilutive options and warrants - 177 - -
______ ______ ______ ______
Weighted average number of
common and common equivalent
shares outstanding 7,921 8,016 7,921 6,977
====== ====== ====== ======
Income (loss) before cumulative
effect of a change in
accounting principal $(0.10) $0.13 $(0.16) $(0.07)
Extraordinary loss on early
extinguishment of debt, net of
tax (0.12) - (0.12) -
Cumulative effect of a change in
accounting for postretirement
benefits other than pensions - - - (4.93)
______ _____ ______ ______
Net income (loss) per share $(0.22) $0.13 $(0.28) $(5.00)
====== ===== ====== ======
</TABLE>
EXHIBIT 15.1
August 17, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Doskocil Companies Incorporated
Registration on Form S-8
We are aware that our report dated August 5, 1994 on our review
of interim financial information of Doskocil Companies
Incorporated for the periods ended July 2, 1994, and July 3,
1993, and included in the Company's amended quarterly report on
Form 10-Q/A for the quarter ended July 2, 1994, is incorporated
by reference in the Registration Statement on Form S-8 (File No.
33-45974) of Doskocil Companies Incorporated. Pursuant to Rule
436(c) under the Securities Act of 1933, this report should not
be considered a part of the Registration Statement prepared or
certified by us within the meaning of Sections 7 and 11 of that
Act.
COOPERS & LYBRAND L.L.P.
