File No. 0-7277
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________________________________________________
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL QUARTER ENDED AUGUST 9, 1996
__________________________________________________
WSMP, INC.
Incorporated in North Carolina
CLAREMONT, NORTH CAROLINA 28610 56-0945643
(704) 459 - 7626 (I.R.S. Employer Identification No.)
__________________________________________________
WSMP, Inc. 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 has been
subject to such filing requirements for the past 90 days.
The number of shares of WSMP, Inc. Common Stock outstanding as of September 23,
1996 was 2,760,338.
===============================================================================
WSMP, INC. AND SUBSIDIARIES
INDEX
Part I. Financial Information:
-------------------------------------------------
Page No.
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
August 9, 1996 and February 23, 1996................................ 1-2
Consolidated Condensed Statements of
Operations and Retained Earnings -
Three Months Ended August 9, 1996
and August 11, 1995 and Six Months Ended
August 9, 1996 and August 11, 1995.................................. 3-4
Consolidated Condensed Statements of Cash
Flows - Six Months Ended August 9, 1996 and
August 11, 1995..................................................... 5
Notes to Consolidated Condensed Financial
Statements.......................................................... 6-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations.................... 8-10
Part II. Other Information:
---------------------------------------------------
Item 4. Submission of Matters of a Vote of Security Holders......... 11
Item 6. Exhibits and Reports on Form 8-K............................ 11
Signatures.......................................................... 12
Index to Exhibits................................................... 13
Exhibit 11 - Computation of Earnings (Loss) per
Common and Common Equivalent Share................................ 14
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WSMP, INC. AND SUBSIDIARIES
----------------------------------------------------
Consolidated Condensed Balance Sheets
(Unaudited)
August 9, February 23,
ASSETS 1996 1996
- ------ --------- ------------
Current assets:
Cash and cash equivalents $ 640,437 $ 430,311
Marketable equity securities 149,184 148,997
Accounts receivable and current
portion of notes receivable, net:
Trade and other 4,031,750 3,981,563
Related party 1,085,184 1,257,280
Inventories 6,545,556 5,553,641
Income taxes refundable 147,387 369,728
Prepaid expenses and other 250,013 116,400
Deferred income taxes 550,698 518,490
----------- -----------
Total current assets 13,400,209 12,376,410
----------- -----------
Property, plant and equipment, net 25,626,061 25,288,033
----------- -----------
Other assets:
Properties held for sale 1,244,516 1,569,752
Excess of cost over fair value of net
assets of businesses acquired, net 646,567 662,321
Noncurrent notes receivable 200,549 204,941
Noncurrent related party notes receivable 357,871 515,944
Investment in affiliates 297,033 381,533
Investment in restricted equity securities 242,050 242,050
Other 391,056 393,390
----------- -----------
Total other assets 3,379,642 3,969,931
----------- -----------
Total assets $42,405,912 $41,634,374
=========== ===========
See accompanying notes to unaudited consolidated condensed financial statements.
WSMP, INC. AND SUBSIDIARIES
----------------------------------------------------
(Unaudited)
August 9, February 23,
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1996
---------- ------------
Current liabilities:
Notes payable $ 4,000,000 $ 4,000,000
Current installments of long-term debt 2,597,693 2,030,953
Trade accounts payable 3,256,236 2,810,229
Income taxes payable 4,183 10,651
Other accrued liabilities 2,859,063 2,540,221
----------- -----------
Total current liabilities 12,717,175 11,392,054
Deferred income 5,000 5,000
Deferred income taxes 884,526 903,639
Long-term debt, excluding current
installments 12,110,199 12,890,060
----------- -----------
Total liabilities 25,716,900 25,190,753
----------- -----------
Commitments and Contingencies
Shareholders' Equity:
Preferred stock - par value $.10,
authorized 2,500,000 shares; no
shares issued
Common stock - par value $1, authorized
10,000,000 shares; issued 2,760,338
shares at August 9, 1996 and 2,760,338
shares at February 23, 1996 2,760,338 2,760,338
Capital in excess of par value 6,579,347 6,579,347
Unrealized gain/(loss) on securities
available for sale, net of deferred
income taxes of $(2,421) at August 9, 1996
and $(3,164) at February 23, 1996 4,039 5,278
Retained earnings 7,345,288 7,098,658
----------- -----------
Total shareholders' equity 16,689,012 16,443,621
----------- -----------
Total liabilities and shareholders'
equity $42,405,912 $41,634,374
=========== ===========
WSMP, INC. AND SUBSIDIARIES
----------------------------------------------------
Consolidated Condensed Statements of Operations and Retained Earnings
Three Months Ended August 9, 1996 and August 11, 1995
(Unaudited)
1996 1995
---- ----
Operating revenues:
Food sales $ 18,735,866 $ 18,440,895
Franchise, royalty and other fees (includes
related party transactions totaling
$216,288 in 1996 and $280,998 in 1995) 627,287 716,910
------------- -------------
Total operating revenues 19,363,153 19,157,805
------------- -------------
Costs and expenses:
Cost of goods sold (includes related party
transactions totaling $142,456 in 1996 and
$100,826 in 1995) 13,895,959 13,574,086
Operating expenses (includes related party
transactions totaling $235,601 in 1996 and
$158,824 in 1995) 2,845,243 3,085,970
Selling, general and administrative expenses
(includes related party transactions totaling
$444,945 in 1996 and $645,602 in 1995) 1,736,137 1,912,567
Depreciation and amortization 594,362 635,106
------------- -------------
Total costs and expenses 19,071,701 19,207,729
------------- -------------
Operating income (loss) 291,452 (49,924)
------------- -------------
Other income (expense):
Other income (including interest) (includes
related party transactions totaling $113,532
in 1996 and $45,145 in 1995) 411,320 166,751
Net loss on dispositions and write-downs of
assets (4,489) (51,046)
Equity in loss if affiates (50,500) (17,000)
Interest expense (416,304) (455,772)
Other expense (includes related party
transactions totaling $14,623 in 1996 and
$20,165 in 1995) (234,227) (234,603)
------------- -------------
Net other expense (294,200) (591,670)
------------- -------------
Loss before income tax benefit (2,748) (641,594)
Provision for income tax benefit (1,479) (277,706)
------------- -------------
Net loss $ (1,269) $ (363,888)
============= =============
Retained earnings:
Balance at beginning of period $ 7,346,557 $ 8,601,306
Net loss (1,269) (363,888)
------------- -------------
Balance at end of period $ 7,345,288 $ 8,237,418
============= =============
Net loss per common and common
equivalent share $ (.00) $ (.13)
============= =============
See accompanying notes to unaudited consolidated condensed financial statements.
WSMP, INC. AND SUBSIDIARIES
----------------------------------------------------
Consolidated Condensed Statements of Operations and Retained Earnings
Six Months Ended August 9, 1996 and August 11, 1995
(Unaudited)
1996 1995
---- ----
Operating revenues:
Food sales $ 38,465,071 $ 36,041,685
Franchise, royalty and other fees
(includes related party transactions
totaling $443,493 in 1996 and $551,980
in 1995) 1,277,437 1,428,679
------------- -------------
Total operating revenues 39,742,508 37,470,364
------------- -------------
Costs and expenses:
Cost of goods sold (includes related
party transactions totaling $270,703
in 1996 and $204,116 in 1995) 28,487,256 26,027,046
Operating expenses (includes related
party transactions totaling $403,964
in 1996 and $382,628 in 1995) 5,611,408 6,156,652
Selling, general and administrative
expenses (includes related party
transactions totaling $924,983 in 1996
and $1,150,643 in 1995) 3,396,903 3,689,808
Depreciation and amortization 1,183,835 1,259,334
------------- -------------
Total costs and expenses 38,679,402 37,132,840
------------- -------------
Operating income 1,063,106 337,524
------------- -------------
Other income (expense):
Other income (including interest)
(includes related party transactions
totaling $129,719 in 1996 and $94,955
in 1995) 641,491 406,661
Net gain (loss) on dispositions and
write-downs of assets 150 (51,506)
Equity in loss of affiliates (84,500)
Interest expense (833,627) (941,061)
Other expense (includes related party
transactions totaling $30,556 in 1996
and $41,347 in 1995) (382,309) (382,111)
------------- -------------
Net other expense (658,795) (968,017)
------------- -------------
Earnings (loss) before income taxes
and cumulative effect of a change in
accounting principle 404,311 (630,493)
Provision for income taxes (benefit) 157,681 (274,264)
------------- -------------
Net earnings (loss) $ 246,630 $ (356,229)
============= =============
Retained earnings:
Balance at beginning of period $ 7,098,658 $ 8,593,647
Net earnings (loss) 246,630 (356,229)
------------- -------------
Balance at end of period $ 7,345,288 $ 8,237,418
============= =============
Net earnings (loss) per common and common
equivalent share $ .08 $ (.13)
============= =============
See accompanying notes to unaudited consolidated condensed financial statements.
WSMP, INC. AND SUBSIDIARIES
----------------------------------------------------
<TABLE>
<CAPTION>
Consolidated Condensed Statements of Cash Flows
Six Months Ended August 9, 1996 and August 11, 1995
(Unaudited)
1996 1995
<S> ---- ----
Cash flows from operating activities: <C> <C>
Net earnings (loss) $ 246,630 $ (356,229)
------------ -------------
Adjustments to reconcile net earnings
(loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization 1,183,835 1,232,913
Depreciation of properties leased to others 130,488 139,386
Provision for losses on receivables 143,206 21,107
Net (gain)/loss on disposition and writedowns
of assets (150) 51,506
Other non-cash adjustments to earnings 48,532 58,009
Changes in operating assets and liabilities
(net of effects from purchase of restaurant
companies) providing (using) cash:
Receivables (263,010) 118,748
Inventories (991,915) 377,871
Income taxes refundable, prepaid expenses and other 88,728 (598,940)
Trade accounts payable and other accrued liabilities 718,380 (705,380)
------------ -------------
Total adjustments 1,058,094 695,220
------------ -------------
Net cash provided by operating activities 1,304,724 338,991
------------ -------------
Cash flows from investing activities:
Increase in marketable equity securities (2,169) (4,599)
Proceeds from sales of assets 202,211 1,377,775
Decrease in related party notes receivables 176,460 285,675
Decrease in other notes receivable 144,416 352,146
Deposits, net of refunds (14,670) (169,829)
Capital expenditures to related parties (126,155) (159,822)
Capital expenditures-others (733,875) (344,739)
Other investing activities (383,972)
------------ -------------
Net cash provided by investing activities (353,782) 952,635
------------ -------------
Cash flows from financing activities:
Principal payments on long-term debt (740,816) (1,853,797)
Net proceeds under short-term borrowing agreements 1,000,000
Proceeds from exercise of stock options 145,000
------------ -------------
Net cash used in financing activities (740,816) (708,797)
------------ -------------
Net increase in cash and cash equivalents 210,126 582,829
Cash and cash equivalents at beginning of period 430,311 940,120
------------ -------------
Cash and cash equivalents at end of period $ 640,437 $ 1,522,949
============ =============
See accompanying notes to unaudited consolidated condensed financial statements.
</TABLE>
WSMP, INC. AND SUBSIDIARIES
----------------------------------------------------
Notes to Consolidated Condensed Financial Statements
(Unaudited)
1. In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial
position as of August 9, 1996 and February 23, 1996 and the results of
operations for the fiscal quarters and six months ended August 9, 1996 and
August 11, 1995 and the cash flows for the six months ended August 9, 1996
and August 11,1995.
2. The results of operations for the fiscal quarters and six months ended
August 9, 1996 and August 11, 1995 are not necessarily indicative of the
results to be expected for the full year.
3. Financial statements for fiscal 1996 periods have been reclassified, where
applicable, to conform to financial statement presentation used in fiscal
1997.
4. Earnings (loss) per share are based on the weighted average number of
common shares and dilutive common equivalent shares outstanding during each
fiscal period. Common equivalent shares relate to outstanding stock
options. The weighted average number of shares used in the calculation are
2,973,523 and 2,699,214 for the six months ended in 1996 and 1995,
respectively. The weighted average number of shares used in the
calculation for the second fiscal quarter in 1996 and 1995, are 2,760,338
and 2,710,338, respectively.
5. The Company reports the results of its operations using a 52-53 week basis.
In line with this, reports for interim fiscal periods are prepared on the
basis of 12-12-12-16 week periods. The Company follows this policy
consistently.
6. A summary of inventories entering into cost of goods sold is:
<TABLE>
<CAPTION>
August 9, February 23, August 11, February 24,
1996 1996 1995 1995
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Hams in curing process $ 2,490,855 $ 1,326,420 $ 1,967,960 $ 1,748,375
Other food (includes cured hams) 2,549,074 2,818,418 1,467,272 2,104,940
Supplies 1,505,627 1,408,803 1,313,232 1,273,020
----------- ----------- ----------- -----------
Totals $ 6,545,556 $ 5,553,641 $ 4,748,464 $ 5,126,335
=========== =========== =========== ===========
</TABLE>
7. The Company has certain debt obligations that contain restrictive covenants
including a restriction on payment of cash dividends. The Company was
either in compliance with these covenants at August 9, 1996, or had
obtained necessary waivers for noncompliance. There are no consolidated
retained earnings available for payment of dividends as of August 11, 1996.
8. The Company has guaranteed a loan obligation of one of its franchisees in
an amount not to exceed $322,000. The loan is secured by certain
restaurant equipment purchased by the franchisee.
Effective December 1, 1993, the Company entered into a three year
endorsement with Richard Childress Racing Enterprises, Inc. and Dale
Earnhardt, Inc. The agreement calls for total payments of $1,200,000
over the three year period. As of August 9, 1996, remaining payments under
this agreement are $325,000.
9. Supplemental cash flow disclosures - cash paid during the period for:
Six Months Ended
------------------------------------
August 9, 1996 August 11, 1995
-------------- ---------------
Interest $ 812,598 $ 934,054
========== ==========
Income taxes $ 14,666 $ 155,000
========== ==========
Accounts receivable from franchisees totaling $84,762 and $22,488 in fiscal
1997 and 1996, respectively, were converted to notes receivable.
During fiscal 1997, the Company purchased a restaurant property by assuming
debt on the property totaling $527,645 and exchanging an existing piece of
property with a book value of $260,236.
The Company received notes receivable totaling $6,392 from the sale of
property, plant and equipment in fiscal 1996.
10. In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-
Based Compensation," which will be effective for the Company beginning
February 24, 1996. SFAS No. 123 requires expanded disclosures of stock-
based compensation arrangements with employees and encourages (but does not
require) compensation cost to be measured based on the fair value of the
equity instrument awarded. Companies are permitted, however, to continue
to apply APB Opinion No. 25, which recognizes compensation cost based on
the intrinsic value of the equity instrument awarded. The Company will
continue to apply APB Opinion No. 25 to its stock based compensation awards
to employees and will disclose the required pro forma effect on net income
and earnings per share.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following table sets forth for the periods indicated percentages which
certain items reflected in the financial data bear to operating revenue of the
Company:
<TABLE>
<CAPTION>
Relationship to Total Operating Revenue
-------------------------------------------------
Three Months Ended Six Months Ended
---------------------- ----------------------
August 9, August 11, August 9, August 11,
1996 1995 1996 1995
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Restaurant food sales 32.3% 33.8% 31.1% 34.8%
Manufacturing sales 64.5 62.5 65.7 61.4
Franchise, royalty and other fees 3.2 3.7 3.2 3.8
------ ------- ------ -------
Total operating revenue 100.0 100.0 100.0 100.0
Cost of goods sold 71.7 70.8 71.7 69.5
Operating expenses 14.7 16.1 14.1 16.4
Selling, general and administrative
expenses 9.0 10.0 8.5 9.8
Depreciation and amortization 3.1 3.3 3.0 3.3
------ ------- ------ -------
Total operating income (loss) 1.5 (.2) 2.7 .9
Net other income (expenses) (1.5) (3.1) (1.7) (2.6)
Earnings (loss) before income taxes .0 (3.3) 1.0 (1.7)
Provision for income taxes .0 (1.4) .4 (.7)
------ ------- ------ -------
Net earnings (loss) .0% (1.9%) .6% (1.0%)
====== ======= ====== =======
</TABLE>
The Company operates in three principal lines of business. Segment information
is presented as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------------ ---------------------------------
August 9, 1996 August 11, 1995 August 9, 1996 August 11, 1995
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Operating Revenues:
- -------------------
Food processing $ 12,480,872 $ 11,967,121 $ 26,104,433 $ 23,001,356
Restaurant operations 6,254,994 6,473,774 12,360,638 13,040,329
Restaurant franchising 627,287 716,910 1,277,437 1,428,679
------------- -------------- ------------- -------------
Total operating revenues $ 19,363,153 $ 19,157,805 $ 39,742,508 $ 37,470,364
============= ============== ============= =============
Operating Profits:
- ------------------
Food processing $ 283,213 $ 210,191 $ 896,237 $ 598,608
Restaurant operations 679,096 251,710 1,380,595 770,601
Restaurant franchising 365,178 521,588 754,267 977,209
------------- -------------- ------------- -------------
1,327,487 983,489 3,031,099 2,346,418
Corporate expenses (1,036,035) (1,033,413) (1,967,993) (2,008,894)
Other income (expense) 122,104 (135,898) 174,832 (26,956)
Interest expense (416,304) (455,772) (833,627) (941,061)
------------- -------------- ------------- -------------
Earnings (loss) before income taxes $ (2,748) $ (641,594) $ 404,311 $ (630,493)
============= ============== ============= =============
</TABLE>
RESULTS OF OPERATIONS
- ----------------------
Second Quarter Ended August 9, 1996 Compared with Second Quarter Ended
August 11, 1995
Consolidated food sales revenue increased from $18,441,000 in the second
quarter of fiscal 1996 to $18,736,000 in the second quarter of fiscal 1997.
This increase is the net result of an increase in revenues from the food
processing segment totaling $514,000, offset by a decrease in revenues from
restaurant operations. Revenues in the food processing segment continue to
increase as the bakery division's sales rebuild. As previously discussed, the
bakery division's sales during fiscal 1996 were negatively impacted due to its
largest customer discontinuing a line of product previously purchased from the
Company. Although actions to replace this business were put in place early in
fiscal 1996, benefits from these actions were realized at a slower pace than
originally expected, and significant improvements in bakery sales did not
occur until late in the fourth quarter of fiscal 1996. Sales in the bakery
division continue to improve during fiscal 1997, with second quarter sales
showing a $1.6 million increase over the corresponding period of fiscal 1996.
Despite the $1.6 million increase in bakery division sales, the food
processing segment showed a net increase of $514,000 due to a decrease in
sales in the ham curing division totaling $1.1 million. The majority of this
decrease reflects a management decision to build inventory levels during the
second quarter to better position that division for the upcoming holiday
season when higher margins can be realized.
The overall increase in sales from the food processing segment was offset by a
decline of $219,000 in restaurant segment sales between the two quarters.
The closing of three company owned restaurant units between the two periods
resulted in reductions in food sales totaling $600,000. This was partially
mitigated by increases in same store sales totaling approximately $165,000, or
2.8%, as well as the opening of a store during the second quarter of fiscal
1997.
Franchise, royalty and other fees in the second quarter of fiscal 1997
experienced a 12.5% decrease over the comparable period in fiscal 1996. This
is attributed to a net decline in the number of franchise units from seventy-
six at the beginning of the second quarter in fiscal 1996 to sixty-seven at
the end of the current year second quarter.
The Company generated operating income totaling $291,000 during the quarter
ended August 9, 1996, compared to an operating loss of $50,000 in the second
quarter of fiscal 1996. This increase is the result of increases in operating
profits in the restaurant and food processing segments, offset by decreased
profitability in the restaurant franchising segment. Operating profits from
restaurant operations increased $427,000 over the comparable prior year
quarter despite an overall decline in operating revenue from this division.
This increase in profitability is attributed to the closing of several poorly
performing restaurants between the two quarters, as well as better management
of costs in existing restaurants and an increase in same stores sales during
the second quarter of fiscal 1997. In addition, total operating profits in
the food processing segment increased approximately $73,000 during the second
quarter of fiscal 1997 compared to the same period in fiscal 1996. This
increase is directly attributed to the increase in food sales described above
which this segment has experienced. These increases in operating profits were
partly offset by a reduction in profitability in the restaurant franchising
segment caused by the decline in franchise, royalty and other fees discussed
above.
Other income increased $245,000 during the quarter ended August 9, 1996 over
the corresponding quarter of fiscal 1996. Approximately $157,000 of this
increase relates to damages received in the settlement of a legal claim. In
addition, the increase also reflects $50,000 received from a franchisee due to
the early termination of two franchise agreements.
Six Months Ended August 9, 1996 Compared with Six Months Ended August 11, 1995
Consolidated food sales revenue increased $2.4 million, or 6.7%, to $38.5
million during the first six months of fiscal 1997, compared to the first six
months of fiscal 1996. The food processing segment generated an increase
totaling $3.1 million and was responsible for the overall consolidated
increase. As discussed above, revenues in the food processing segment have
continued to increase as the sales of the bakery division rebuild. Offsetting
the increase in sales from the food processing segment was a decrease in sales
in the restaurant segment totaling $680,000. A decrease in revenues totaling
$1,153,000 occurred due to the closing of three stores since the beginning of
fiscal 1996 and was offset by increases in same store sales of approximately
$257,000 and the opening of a store during the second quarter of fiscal 1997.
Franchise, royalty and other fees for the first half of fiscal 1997 declined
$151,000 from the corresponding period of fiscal 1996. As discussed above,
this is the result of the reduction in the overall number of franchisees.
Operating income increased from $338,000 in the first half of fiscal 1996 to
$1,063,000 in the first half of fiscal 1997. Approximately $610,000 of this
increase is attributed to the restaurant segment. Although total revenues in
this segment declined, operating income increased due to the closing of
several poorly performing units and better management of costs. In addition,
operating income in the food processing segment increased $298,000 between the
two periods being compared. This is directly attributed to that segment's
increase in revenues discussed above. Offsetting these increases was a
decrease in operating income from the franchising segment totaling $200,000.
The majority of this decrease is due to the reduction in existing franchise
units and the relating reduction in royalties.
LIQUIDITY AND CAPITAL RESOURCES
- --------------------------------
The Company had total working capital of $683,000 at August 9, 1996, down from
$ 984,000 at February 23, 1996. This decrease is attributed to the fact that
as of February 23, 1996, the semi-annual senior note principal payment due
April 1, 1996 had been prepaid from the proceeds received on the sale of
certain assets as required by the amended terms of the notes. Therefore,
current liabilities as of February 23, 1996 includes only one of the $769,000
semi-annual senior note payments. However, as of August 9, 1996 two of the
semi-annual payments are reflected in current liabilities. The effect of this
is partially offset by working capital generated through profitable operations
during the first half of fiscal 1997.
Total cash and cash equivalents increased $210,000 during the six months ended
August 9, 1996. Profitable operations during this period generated cash
totaling $1,305,000. In addition, sale of assets and collection of notes
receivable generated $202,000 and $321,000, respectively. Offsetting these
inflows of cash were capital expenditures and repayments of long-term debt
which totaled $860,000 and $741,000, respectively.
The Company continues to evaluate several possible financing solutions which
would allow it to refinance amounts outstanding under its senior notes and
short-term secured note on an intermediate to long-term basis. The senior
notes mature on October 1, 1997 with a balloon payment of $7.5 million, and as
such will become a current liability on October 1, 1996. However, management
is using its best efforts to effect a one year extension in the maturity of
the senior notes in order to allow for additional flexibility in selecting the
most appropriate refinancing strategy.
PART II. OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
The annual meeting of Shareholders of WSMP, Inc. was held on June 27, 1996.
The following directors were elected at the annual meeting:
James C. Richardson, Jr. Richard F. Hendrickson
Bobby G. Holman
The following directors continued in office after this meeting:
Richard F. Howard William R. McDonald III
James M. Templeton Miles M. Aldridge
Lewis C. Lanier E. Edwin Bradford
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8 - K
- -------------------------------------------
(a) Exhibits
See Index to Exhibits
(b) Reports on Form 8-K
A Current Report on Form 8-K was filed during the quarter ended August 9, 1996.
This report, dated June 27, 1996, announced the appointment of David R. Clark
as President and Chief Operating Officer of the Company. In addition, it was
announced that Jimmy Richardson, who formally held these positions, was named
as Vice-Chairman of the Board of Directors and will continue as the Chief
Executive Officer of the Company.
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.
WSMP, INC.
----------
Date:September 26, 1996 By: JAMES C. RICHARDSON, JR.
------------------ ------------------------
James C. Richardson, Jr.
(Chief Executive Officer)
Date:September 26, 1996 By: MATTHEW V. HOLLIFIELD
------------------ ------------------------
Matthew V. Hollifield
(Vice President of Accounting and
Chief Accounting Officer)
INDEX TO EXHIBITS
For inclusion in Quarterly Report on Form 10-Q Quarter Ended August 9, 1996
Exhibit No. Page No.
- ----------- --------
11 Computation of Earnings (Loss) Per Common and
Common Equivalent Share 14
Exhibit 11
WSMP, INC. AND SUBSIDIARIES
----------------------------------------------------
Computation of Earnings (Loss) Per Common and Common Equivalent Share
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------- ----------------------
August 9, August 11, August 9, August 11,
1996 1995 1996 1995
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Earnings (loss) computations:
Net earnings (loss) $ (1,269) $ (363,888) $ 246,630 $ (356,229)
============ ============ ============ ============
Weighted average shares computation:
Actual outstanding shares at
beginning of period 2,760,338 2,710,338 2,760,338 2,660,338
Add (deduct) weighted average
shares applicable to:
Common stock issued 38,876
Common stock options
outstanding 213,185
------------ ------------ ------------ ------------
Weighted average shares as
adjusted 2,760,338 2,710,338 2,973,523 2,699,214
============ ============ ============ ============
Earnings (loss) per common and
common equivalent share $ (.00) $ (.13) $ .08 $ (.13)
============ ============ ============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the 1996 2nd
quarter 10-Q for WSMP, Inc. and is qualified in its entirety by reference to
such 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-START> FEB-24-1996
<PERIOD-END> AUG-09-1996
<CASH> 640,437
<SECURITIES> 149,184
<RECEIVABLES> 3,409,616
<ALLOWANCES> 35,000
<INVENTORY> 6,545,556
<CURRENT-ASSETS> 13,400,209
<PP&E> 47,243,251
<DEPRECIATION> 21,617,190
<TOTAL-ASSETS> 42,405,912
<CURRENT-LIABILITIES> 12,717,175
<BONDS> 14,707,892
<COMMON> 2,760,338
0
0
<OTHER-SE> 13,928,674
<TOTAL-LIABILITY-AND-EQUITY> 42,405,912
<SALES> 38,465,071
<TOTAL-REVENUES> 39,742,508
<CGS> 28,487,256
<TOTAL-COSTS> 28,487,256
<OTHER-EXPENSES> 5,611,408
<LOSS-PROVISION> 143,206
<INTEREST-EXPENSE> 833,627
<INCOME-PRETAX> 404,311
<INCOME-TAX> 157,681
<INCOME-CONTINUING> 246,630
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 246,630
<EPS-PRIMARY> .08
<EPS-DILUTED> 0
</TABLE>
