<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 20, 1997
------------------------------
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 0-12800
------------------------------
VIE DE FRANCE CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 52-0948383
------------- ------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
</TABLE>
85 S BRAGG STREET, SUITE 600, ALEXANDRIA, VA 22312
--------------------------------------------------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (703) 750-9600
--------------
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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of October 30, 1997.
<TABLE>
<S> <C>
COMMON STOCK 0.01 PAR VALUE NUMBER OF SHARES
--------------------------- ----------------
CLASS A 13,822,543
CLASS B NONE
</TABLE>
<PAGE> 2
VIE DE FRANCE CORPORATION
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited consolidated financial statements have been prepared
by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the Company, all adjustments necessary
for the fair presentation of the Company's results of operations, financial
position and changes therein for the periods presented have been included.
2
<PAGE> 3
VIE DE FRANCE CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
-----------------------------
Sep 20, June 28,
1997 1997
------------ -------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 631,000 $ 353,000
Investments, current 906,000 1,098,000
Accounts receivable, trade 1,895,000 2,357,000
Inventory 2,173,000 1,999,000
Prepaid expenses 194,000 330,000
Current portion of notes receivable, related party 462,000 603,000
Income Tax Receivable 804,000 753,000
Other current assets 359,000 374,000
------------ ------------
TOTAL CURRENT ASSETS 7,424,000 7,867,000
Investments, noncurrent 9,913,000 10,217,000
Fixed assets, net 4,142,000 4,269,000
Note receivable, related party, including accrued interest,
less current portion 56,000 56,000
Other assets 293,000 303,000
------------ ------------
TOTAL ASSETS $ 21,828,000 $ 22,712,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 846,000 $ 1,195,000
Accrued payroll and related liabilities 613,000 631,000
Current portion of long-term debt 761,000 807,000
Accrued store closings 72,000 72,000
Other accrued taxes 37,000 114,000
------------ ------------
Total current liabilities 2,329,000 2,819,000
Long-term debt, less current portion 1,711,000 1,768,000
------------ ------------
Total liabilities 4,040,000 4,587,000
------------ ------------
Stockholders' equity
Common stock - $.01 par value, 20,000,000 shares
authorized, 14,078,620 and 14,034,620 shares issued and
13,822,543 and 13,778,543 shares outstanding 141,000 141,000
Class B Stock - $.01 par value, 175,000 shares authorized,
none issued - -
Additional paid-in capital 21,352,000 21,352,000
Retained earnings 1,812,000 2,323,000
Cumulative translation adjustment (34,000) 13,000
Unrealized losses on debt and equity investments 182,000 11,000
Treasury stock, at cost (256,077 shares) (1,440,000) (1,440,000)
Notes receivable from majority shareholder, including accrued interest 4,225,000 (4,275,000)
------------ ------------
Total stockholders' equity 17,788,000 18,125,000
------------ ------------
Commitments and contingencies
------------ ------------
Total liabilities and stockholders' equity $ 21,828,000 $ 22,712,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
VIE DE FRANCE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
-----------------------------
FIRST QUARTER
-----------------------------
TWELVE WEEKS ENDED
-----------------------------
Sep 20, Sep 21,
1997 1996
------------- -------------
<S> <C>
NET SALES $ 3,064,000 $ 2,809,000
COST OF GOODS SOLD 2,654,000 2,565,000
-----------------------------
GROSS MARGIN 410,000 244,000
SELLING AND ADMINISTRATION 1,102,000 795,000
DEPRECIATION AND AMORTIZATION 26,000 24,000
OTHER INCOME - (7,000)
LOSS ON EQUITY METHOD INVESTMENT - -
-----------------------------
LOSS FROM OPERATIONS (718,000) (568,000)
-----------------------------
NONOPERATING INCOME (EXPENSE)
INVESTMENT INCOME 167,000 222,000
INTEREST EXPENSE (23,000) (43,000)
OTHER INCOME (EXPENSE) 11,000 (2,000)
-----------------------------
TOTAL NONOPERATING INCOME 155,000 177,000
-----------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES, DISCONTINUED OPERATIONS, AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE (563,000) (391,000)
PROVISION FOR INCOME TAX BENEFIT 52,000 -
-----------------------------
LOSS FROM CONTINUING OPERATIONS BEFORE DISCONTINUED OPERATIONS
AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE,
NET OF TAXES (511,000) (391,000)
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES
GAIN FROM SALE OF DISCONTINUED OPERATIONS, NET OF TAXES - 90,000
-----------------------------
NET LOSS $ (511,000) $ (301,000)
=============================
NET LOSS PER COMMON SHARE:
CONTINUING OPERATIONS AFTER INCOME TAXES, BEFORE DISCONTINUED
OPERATIONS AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET OF TAXES $ (.04) $ (0.03)
DISCONTINUED OPERATIONS $ - $ 0.01
-----------------------------
NET LOSS PER COMMON SHARE $ (.04) $ (0.02)
=============================
WEIGHTED AVERAGE SHARES OUTSTANDING 13,822,543 13,822,543
=============================
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
VIE de FRANCE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
---------------------------
Year-to-date
Twelve weeks ended
Sep 20, Sep 21,
1997 1996
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (428,000) $ (301,000)
Adjustments to reconcile net income (loss) to
net cash (used) provided by operating activities
Gain from sale of discontinued operations - (90,000)
Loss on equity method investment - (19,000)
Depreciation and amortization, including
discontinued operations 227,000 196,000
Change in cumulative translation adjustment (47,000) (100,000)
Changes in assets and liabilities, net of
effects of discontinued operations and non-cash transactions:
Decrease in accounts receivable trade, net 462,000 235,000
(Increase) decrease in inventory (174,000) 97,000
Decrease (increase) prepaid expenses 136,000 (59,000)
Decrease (increase) in notes receivable, related party 182,000 (110,000)
Increase in income tax receivable (51,000) -
Decrease (increase) in other assets 117,000 (37,000)
Decrease in accounts payable
and accrued expenses (349,000) (51,000)
Decrease in accrued payroll and related liabilities (18,000) (117,000)
Decrease in other accrued taxes (77,000) -
----------- -----------
Net cash used by operating activities (20,000) (356,000)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of investments 1,246,000 7,060,000
Purchase of investments (750,000) (7,016,000)
Change in notes receivable issued to majority shareholder - -
Proceeds on disposal of fixed assets - -
Capital expenditures (95,000) (42,000)
----------- -----------
Net cash provided by investing activities 401,000 2,000
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to debt - -
Reductions of debt (103,000) 300,000
----------- -----------
Net cash (used) provided by financing activities (103,000) 300,000
----------- -----------
Net increase (decrease) in cash and cash equivalents 278,000 (54,000)
Cash and cash equivalents, beginning of period 353,000 6,862,000
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 631,000 $ 6,808,000
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
VIE de FRANCE CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1) Financial Statements
The accompanying unaudited consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of the Company,
all adjustments necessary for the fair presentation of the Company's results of
operations, financial position and changes therein for the periods presented
have been included.
2) Fiscal Periods
The Company utilizes a 52/53 week fiscal year which ends on the last
Saturday in June. The first, second and fourth quarters, of fiscal years 1998
and 1997 contain 12 weeks, and the third quarter contains 16 weeks.
3) Inventory
The inventories are valued at the lower of cost, determined by the
first-in, first-out method (FIFO), or market. Included in inventory costs are
raw materials, labor and manufacturing overhead.
Inventory consist of:
<TABLE>
<CAPTION>
Sep 20, June 28,
1997 1997
- ------------------------------------------------------------------------
<S> <C> <C>
Raw materials $ 406,000 $ 413,000
Frozen product & other finished goods 1,611,000 1,438,000
Packing materials & supplies 237,000 246,000
---------------------------
2,254,000 2,097,000
Less obsolescence reserve (82,000) (98,000)
---------------------------
$2,172,000 $1,999,000
===========================
</TABLE>
4) Dividends - None.
5) Commitments and Contingencies
The Company is engaged in ordinary and routine litigation incidental to
its business. Management does not anticipate that any amounts which it may be
required to pay by reason thereof will have a material effect on the Company's
financial position or results of operations.
6
<PAGE> 7
6) Transaction with Related Party
During the first quarter of fiscal year 1998 the loan in the amount of
$516,000 due July 1, 1997 from Food Research Corporation, its majority
shareholder was paid in full including accrued interest.
During the first quarter of fiscal year 1998 the Company issued an
employee loan in the amount of $375,000. At the end of fiscal year 1997 this
employee had a loan outstanding in the amount of $45,000. Subsequent to the
end of the first quarter of fiscal year 1998 these two loans were combined.
The revised loan amount of $420,000 bears interest of at 8.5% per annum and is
payable on October 1, 2002. Interest payments are negotiable at such place as
the Company may designate in writing. Payments on the loan will be derived
from the equity proceeds from the sale of the employees first residence, a
portion of future annual bonuses to be paid to the employee by the Company as
negotiated and all outstanding balances of the note, including principle and
interest accrued thereon, shall become payable in full on October 1, 2002.
The loans from Food Research Corporation (FRC) the Company's majority
shareholder are shown as of September 20, 1997 as a separate component of
stockholders' equity in the accompanying balance sheet due to the extension of
the previous short term notes maturity, the nature of the collateral securing
the 1997 notes, and the terms of the notes. Management believes that all notes
receivable from FRC will be paid in full upon maturity if not sooner.
7) Discontinued Operations
The Company did not recognized any income or expense related to
discontinued operations during the first quarter of fiscal year 1998.
8) New Accounting Standards
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings per Share ("Statement
128"), and No. 129, Disclosure of Information About Capital Structure
("Statement 129"). Statement 128 was issued to simplify the computations of
earnings per share and to make the U.S. standard more compatible with the
standards of other countries and that of the International Accounting Standards
Committee. Statement 128 replaces primary and fully diluted earnings per share
with basic earnings and diluted earnings per share. Statement 129 will change
some of the required disclosures about capital structure. It is not expected
that these statement will have a material effect on the Company's financial
statements. The Statements are effective for the year ended June 27, 1998.
The Company has implemented Statement 128 during fiscal year 1998.
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, Reporting Comprehensive Income
("Statement 130"). Statement 130 establishes standards for the reporting and
display of comprehensive income and its components in the financial statements.
The Company is required to adopt the provisions of the statements, during
fiscal year 1999. The Company believes that the disclosure of comprehensive
income in accordance with the provisions of Statement 130 will impact the
manner of presentation of its financial statements as currently and previously
reported earnings include amounts from cumulative translation adjustments and
unrealized gains and losses on debt and equity instruments.
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 131, Disclosure about Segments of an
Enterprise and Related Information ("Statement 131"). Statement 131 applies to
all public business enterprises and establishes standards for the reporting and
display of financial data of operating segments in the financial statements.
Statement 131 replaces the "industry segment" concept of Statement 14 with a
"management approach" concept as the basis for
7
<PAGE> 8
identifying reportable segments. The Company is required to adopt the
provisions of the statement during fiscal year 1999. Adoption of this
statement will require additional disclosure.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Private Securities Litigation Reform Act of 1995 (the "Act") was
recently passed by Congress. The Company desires to take advantage of the new
"safe harbor" provisions of the Act. Therefore, the Company wishes to caution
readers that various factors have affected, and in the future could affect, the
Company's actual results and could cause the Company's actual results for 1998
and beyond to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company.
RESULTS OF OPERATIONS
Vie de France Corporation reported a net loss of $511,000 for first
quarter 1998. The net loss for the 1998 first quarter resulted from low sales
volumes and an increase in marketing investments to support the Company's new
strategic focus on service to banquet providers. Gross margins improved to 13%
in the fiscal 1998 first quarter compared with 9% in the first quarter of
fiscal year 1997. This improvement in gross margins is due to cost containment
program begun in fiscal year 1996, which helped to reduce operating costs for
both US and Norwegian facilities.
During the fiscal year 1997, the Company announced its new marketing
focus on the banquet business, which consists of the lodging and transportation
segments. The lodging segment consists of hotels, convention centers, casinos
and similar facilities. The transportation segment consists airlines,
railroads, cruise ships and other similar facilities.
The Company's old retail segment is included in a new segment, new
business development, including sales to restaurants, military installations,
and home meal replacement and other retail customers.
TWELVE WEEKS ENDED SEPTEMBER 20, 1997 COMPARED TO TWELVE WEEKS ENDED SEPTEMBER
21, 1996
NET SALES
First quarter 1998 sales totaled $3,064,000, up 9% from first quarter
1997 sales of $2,809,000. Lodging sales fell $240,000, or 20%, because of lower
volume for banquets and other special events. Sales to transportation
customers increased by $77,000, or 7%, while new business development sales
increased $209,000, or 53%. International sales decreased by $19,000, or 59% ,
from the first quarter 1997. European sales of fish packed by the Company's
Norwegian plant totaled $312,000 during the first quarter of fiscal 1998,
compared with $84,000 in the year-ago quarter.
During the first quarter of 1998, sales to hotels and other lodging
customers, transportation, new business development and international customers
represented 32%, 38%, 20% and 10%, respectively compared to 43%, 39%, 14% and
4%, respectively a year ago.
Operating costs for the fiscal year 1998 first quarter totaled
$3,782,000, up 12% from $3,377,000 during the same quarter in fiscal 1997.
Inventories increased to $2,173,000 from $1,999,000 at the end fiscal year
1997, mainly due to the addition of new warehouses to support the new strategic
focus in establishing improved relationships with distributors and brokers by
having our products readily available. These new warehouses are strategically
located to supply our customers needs on continuing and expedient basis.
A comparison of net sales, gross margin percentages and losses from
operations follows:
9
<PAGE> 10
<TABLE>
<CAPTION>
QUARTER ENDED
------------------------
SEP. 20, SEP. 21,
1997 1996
---- ----
(dollars in thousands)
<S> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . $ 3,064 $ 2,809
Gross margin percentage . . . . . . . . . . . . . . 13% 9%
Loss from operations . . . . . . . . . . . . . . . $ (718) (568)
</TABLE>
Fiscal year 1998's first quarter sales increased by 10% from the fiscal
year 1997 quarter to $3,064,000 from $2,809,000.
First quarter 1998 gross margin as a percentage of total net sales increased
to 13% from 9% in the year-ago quarter. The increase in gross margin for first
quarter fiscal year 1998 primarily results from cost containment programs put
into place in fiscal year 1996.
SELLING AND ADMINISTRATIVE EXPENSES
A comparison of selling and general administrative costs follows:
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------
SEP. 20, SEP. 21,
1997 1996
---- ----
(dollars in thousands)
<S> <C> <C>
Selling and administrative costs . . . . . . . . . . $ 1,102 $ 795
</TABLE>
Selling and administrative costs increased 38% during the fiscal 1998
first quarter, to $1,102,000 from $795,000 in same quarter of fiscal 1997. The
increase resulted from sales and marketing investments at the corporate
facility to support the strategic focus. Selling and administrative costs
constituted 38% of net sales during the quarter due to low sales volumes,
compared with 28% during the fiscal 1997 first quarter.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization increased $2,000 to $26,000 for the
third quarter of fiscal year 1998, compared with $24,000 for the same period a
year ago.
NONOPERATING INCOME AND EXPENSE
Investment income consists of returns earned on funds received from
the sale of the Restaurant Division.
Interest expense relates to the borrowings, including a capital lease,
associated with the Company's Norwegian subsidiary. At September 20, 1997, the
Company, had borrowings of approximately $2,472,000, bearing interest at rates
ranging from 4.85% to 10.0%. The majority of these borrowings of $2,442,00
were through its Norwegian facility. It is anticipated that these borrowings
will remain outstanding during the fiscal year.
10
<PAGE> 11
PROVISION FOR TAXES
During the first quarter of fiscal year 1998 the Company recognized
$52,000 of income tax benefit from continuing operations.
CHANGE IN ACCOUNTING
Effective June 25, 1995, the Company changed its overhead absorption
policy with regard to finished goods inventories. Prior to this change, the
Company had valued its inventories using partial absorption of certain-plant
level indirect manufacturing overhead costs. Additional costs, such as
material handling, purchasing and receiving, plant administration and factory
and equipment depreciation, were expensed as period costs. These costs will
now be treated as product costs under the method adopted by the Company in
order to better match costs with related revenues and to better conform to
prevailing manufacturing industry practice.
NEW ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per Share
("Statement 128"), and No. 129, Disclosure of Information About Capital
Structure ("Statement 129"). Statement 128 was issued to simplify the
computations of earnings per share and to make the U.S. standard more
compatible with the standards of other countries and that of the International
Accounting Standards Committee. Statement 128 replaces primary and fully
diluted earnings per share with basic earnings and diluted earnings per share.
Statement 129 will change some of the required disclosures about capital
structure. It is not expected that these statement will have a material effect
on the Company's financial statements. The Statements are effective for the
year ended June 27, 1998. The Company has implemented Statement 128 during
fiscal year 1998.
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, Reporting Comprehensive Income
("Statement 130"). Statement 130 establishes standards for the reporting and
display of comprehensive income and its components in the financial statements.
The Company is required to adopt the provisions of the statements, during the
first quarter of fiscal year 1999. The Company believes that the disclosure of
comprehensive income in accordance with the provisions of Statement 130 will
impact the manner of presentation of its financial statements as currently and
previously reported earnings include amounts from cumulative translation
adjustments and unrealized gains and losses on debt and equity instruments.
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 131, Disclosure about Segments of an
Enterprise and Related Information ("Statement 131"). Statement 131 applies to
all public business enterprises and establishes standards for the reporting and
display of financial data of operating segments in the financial statements.
Statement 131 replaces the "industry segment" concept of Statement 14 with a
"management approach" concept as the basis for identifying reportable segments.
The Company is required to adopt the provisions of the statement during fiscal
year 1999. Adoption of this statement will require additional disclosure.
IMPACT OF INFLATION AND THE ECONOMY
Variations in labor and ingredient costs can significantly affect the
Company's operations. Many of the Company's employees are paid hourly rates
related to, but generally higher than the federal minimum rates.
The Company's sales pricing structure allows for the fluctuation of raw
material prices. As a result, market price variations do not significantly
affect the gross margin realized on product sales. Customer sensitivity to
price changes can influence the overall sales of individual products.
11
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
At September 20, 1997, the Company's combined total of cash and
short-term investment balances was $1,537,000, compared with $1,451,000 at June
28, 1997. Additionally, the Company held investments of $9,913,000 and
$10,217,000 at September 20, 1997 and June 28, 1997, respectively, with
maturities greater than one year. This decrease in liquidity is a direct result
of the increased working capital requirements for the Company and the loan of
$375,000 issued to one of its employees.
Net cash used by operations amounted to $20,000 for the first
quarter of 1998, compared to cash used of $356,000 for the first quarter of
1996. Cash in the amount of $401,0000 was provided by investing activities to
finance the loan of $375,000 to one of the Company's employees. Cash in the
amount of $103,000 was mainly used by financing activities, against the loans
outstanding for the Norwegian operations.
During the first quarter of fiscal year 1998, the Company obtained
approval for $8.2 million of financing in the form of industrial revenue bonds
from the Industrial Development Authority of Loudoun County, Virginia for an
envisioned new plant and corporate headquarters in the Greenway Industrial
Center near Leesburg, Virginia. As of September 20, 1997 no amounts have been
drawn. The site is well situated in an attractive industrial area with a good
supply of labor and lower cost structure. The County's Board of Supervisors
approved issuance of up to $8.2 million in bonds to finance a 70,000
square-foot food manufacturing plant and corporate office on 7.74 acres of the
industrial park near the Dulles Airport and U.S. Postal Service facility. The
new facility would replace the Company's existing 40,000 square-foot
manufacturing plant in Alexandria, Virginia as well as the corporate offices
the Company leases nearby. The $8.2 million includes the cost of the land,
building and equipment. The new production facility would provide increased
efficiencies and modern space for future growth. As of September 20, 1997 the
Company had not officially determined whether it would pursue plans to
construct this facility, and has not drawn any funds. In September 1997 the
Company purchased the parcel of land through financing with a banking
institution, for approximately $700,000 plus applicable fees.
The Company is also pursuing managing a production facility in Europe
to support its strategic intent to be the leading banquet solution Company in
the world. The European plant which is built under European quality
standards, will give the company immediate access to that market.
The Company's Norwegian subsidiary has secured a working capital
commitment for its liquidity needs in Norway in the form of an overdraft
facility. As of September 20, 1997, $755,000 was outstanding under this
overdraft facility. The subsidiary can borrow up to $800,000 under this
commitment.
FUTURE PROSPECTS
In fiscal year 1998, the Company intends to build upon the broader
sales base established in fiscal 1997 and 1996, and provide a high level of
service to its customers. Because of the banquet industry buying cycles, the
Company does not expect significant improvement in results until the second
half of fiscal year 1998. The Company will continue to explore and develop its
emerging markets and formats that show promise of generating significant sous
vide sales. Although the course of the European business is difficult to
forecast, it is management's expectation that its Norwegian operations will
reduce its losses in fiscal year 1998.
The Company is confident that it has taken the right steps to reshape
the Company and its strategy. During fiscal year 1998, the Company must
execute that strategy, build sales and move the Company towards consistent
profitability.
12
<PAGE> 13
VIE DE FRANCE CORPORATION
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is engaged in ordinary and routine litigation incidental
to its business. Management does not anticipate that any amounts, which it may
be required to pay by reason thereof, will have a material effect on the
Company's financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company's 14th annual meeting of shareholders was held on October
30, 1997 in Las Vegas, Nevada at the MGM Grand Hotel conference center. The
following individuals were re-elected to serve as Directors for a period of one
year and until their successors are elected and qualify: Jean-Louis Vilgrain
(Chairman), Stanislas Vilgrain (President & CEO), Bruno Goussault, Alexandre
Vilgrain, Carl Youngman (CFO & Treasurer) and James Hackney. Mr. Charles
McGettigan of Proactive Partners was also elected as a first time member of the
board of directors. George Naddaff a former director chose not to stand for
re-election. The Company's amendment to change its name to Cuisine Solutions,
Incorporated was also approved. The Company's amendment to increase the number
shares in its 1992 stock option plan from 300,000 to 1,753,000 was also
approved.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits -
None
(b) Reports on Form 8-K -
None
13
<PAGE> 14
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.
VIE DE FRANCE CORPORATION
-------------------------
Date: November 5, 1997 By: /s/Stanislas Vilgrain
----------------------------- ---------------------
Stanislas Vilgrain
President and CEO
By: /s/Carl M. Youngman
-------------------
Carl M. Youngman
Chief Financial Officer
and Treasurer
By: /s/Michael C. McCloud
---------------------
Michael C. McCloud
Executive Vice President
By: /s/Leara L. Dory
----------------
Leara L. Dory
Vice President of Finance
(Financial Officer - Secretary)
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-27-1998
<PERIOD-START> JUN-29-1997
<PERIOD-END> SEP-20-1997
<CASH> 631,000
<SECURITIES> 10,819,000
<RECEIVABLES> 3,217,000
<ALLOWANCES> 0
<INVENTORY> 2,173,000
<CURRENT-ASSETS> 7,424,000
<PP&E> 10,468,000
<DEPRECIATION> (6,326,000)
<TOTAL-ASSETS> 21,828,000
<CURRENT-LIABILITIES> 2,329,000
<BONDS> 1,711,000
0
0
<COMMON> 141,000
<OTHER-SE> 17,647,000
<TOTAL-LIABILITY-AND-EQUITY> 17,788,000
<SALES> 3,064,000
<TOTAL-REVENUES> 3,064,000
<CGS> 2,654,000
<TOTAL-COSTS> 2,654,000
<OTHER-EXPENSES> 1,128,000
<LOSS-PROVISION> (718,000)
<INTEREST-EXPENSE> 155,000
<INCOME-PRETAX> (563,000)
<INCOME-TAX> 52,000
<INCOME-CONTINUING> (511,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (511,000)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> 0
</TABLE>
