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SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): December 17, 1997
Terrace Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-27132 65-0594270
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4100 North Hills Drive, Hollywood, FL 33021
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(Address of principal executive offices)
Registrant's telephone number, including area code: 954-894-6000
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On December 17, 1997, Terrace Holdings, Inc. (the "Registrant") consummated
an Asset Purchase Agreement ("Agreement") with Deering Acquisition Inc., ("DAI")
a wholly-owned subsidiary of Fieldbrook Farms, Inc. ("Fieldbrook"), in which the
Registrant sold substantially all of the assets and related liabilities of its
wholly-owned subsidiary Deering Ice Cream, Inc. ("Deering") to DAI. DAI is a
Dunkirk, New York based ice cream and frozen dessert manufacturer and co-packer,
unaffiliated with the Registrant, that produces and distributes ice cream and
frozen desserts to supermarkets and other businesses along the eastern seaboard.
The consideration given by DAI to the Registrant for the acquisition of the
above assets, arrived at through arms-length negotiations between the parties,
consisted of an aggregate purchase price of $1,000,000, subject to later
adjustment. Under the agreement with Fieldbrook, $200,000 of the purchase price
was placed in escrow for 60 days pending receipt by the parties of an
independent post-closing audit of Deering, any third party claims against
Deering relating to matters prior to the closing, and certain other matters.
There was a downward adjustment of the purchase price made at closing of
$387,142 as a result of working capital deterioration at Deering from September
30, 1997 to closing. The Registrant will receive annual royalties from
Fieldbrook for four years at the rates of 2%, 2%, 1% and 1%, respectively, of
net sales by Fieldbrook of products under the Howard Johnsons and Deering
labels.
In connection with the sale of the Deering business, Milton Namiot, the
Registrant's Chief Executive Officer and Deering's President, entered into an
employment agreement with DAI and resigned from his positions with the
Registrant.
Item 7(c). Exhibits.
A copy of a Press Release dated November 24, 1997.
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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.
TERRACE HOLDINGS, INC.
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(Registrant)
Date: January 15, 1998
By: /s/ Samuel H. Lasko
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Samuel H. Lasko
President
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Exhibit 99
PRESS RELEASE
TERRACE TO FOCUS ON FOOD DISTRIBUTION AND PROCESSING
- TO SELL ICE CREAM, FOOD SERVICE AND TRAVEL UNITS -
- ACQUIRES PRODUCE PROCESSOR AND PERISHABLE FOOD DISTRIBUTOR -
FORT LAUDERDALE, FL, November 24, 1997 -Terrace Holdings, Inc. (NASDAQ: THIS)
announced that it will divest its ice cream, food service and travel units, and
focus on higher-growth commodity markets, including food distribution and
"value-added" produce processing.
"The board of directors have formulated a strategic business plan that
recognizes emerging industry trends, and heads the company toward stronger
expansion internally and through acquisition," said Steven Shulman, Terrace's
chairman of the board. "The divestiture of our non-essential subsidiaries will
allow management to focus its energies on growing the core business."
Along these lines, the company will immediately sell its Deering Ice Cream
subsidiary to Fieldbrook Farms, a privately-held producer of frozen desserts in
Dunkirk, New York for an undisclosed amount.
Terrace will also spin off its food services subsidiaries, The Lasko
Companies, Inc. and A&E Management, Inc., as well as its travel unit, Lasko
Family Kosher Tours. Terrace President, Samuel H. Lasko, has formally informed
the board of directors of his intent to exercise his option to purchase these
subsidiaries, and will resign his position as president upon completion of the
transaction.
These divestitures will free the company to pursue acquisitions in the food
distribution market, and build upon the success of recently acquired A One A
Produce, a distributor of fruits and vegetables based in Pompano Beach, Fla.
"The South Florida area is ripe for a consolidation of perishable product
distributors and Terrace is taking the lead," said Terrace COO, Jonathan Lasko.
"Terrace is committed to becoming a major force in the distribution and
processing of produce, dairy, frozen and other perishable commodities, while
maintaining the strongest dedication to customer service and reliability."
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The company has already begun to fulfill its acquisition agenda, as
demonstrated today by agreeing to purchase Fresh Inc., a local producer and
distributor of "value added" processed produce, and the finalization of the
purchase of Bay Purveyors, a Miami-based food distributor. Terrace has targeted
a number of additional enterprises to complement its product line.
Including the new acquisitions, Terrace expects its existing base to
produce revenues of more than $28 million next year, as compared to
approximately $5.5 million for Terrace's fiscal year 1996.
Terrace Holdings is a South Florida leader in distribution and processing
of produce, dairy, frozen and other perishable commodities. Its subsidiaries, A
One A Produce & Provisions and Fresh Inc., are dedicated to quality, customer
service, and reliability. A One A maintains one of the few fully refrigerated
loading facilities in Florida, which keeps produce and perishable foods fresher
and of better quality during the distribution process. Fresh, Inc., provides
"value added" produce to restaurants, hotels, institutions and wholesalers, with
custom cuts, mixes, and packaging of a large variety of fresh fruits and
vegetables. Fresh's customers experience improved efficiency and significant
reduction in labor costs when buying their produce ready for use.
Company Contacts: Jonathan S. Lasko, Chief Operating Officer, (954) 917-7272,
Investor Relations: Geoffrey C. Plank, GFC Communications Corp. (561) 655-7575.
Except for historical information, this press release may contain certain
forward-looking statements that involve risk and uncertainties which may cause
actual results to differ materially from the statements made. Such factors
include, but are not limited to, changing market conditions, the establishment
of new corporate alliances, the impact of competitive products and pricing and
other risks detailed from time to time by the Company or in its filings with the
U.S. Securities and Exchange Commission.
