<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 29, 2000
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 No. 0-11488
Penford Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Washington 91-1221360
- --------------------------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
777-108th Avenue N.E., Suite 2390, Bellevue, WA 98004-5193
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (425) 462-6000
Indicate by a 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 March 31, 2000.
<TABLE>
<CAPTION>
Class Outstanding
----- -----------
<S> <C>
Common stock, par value $1.00 7,438,475
</TABLE>
<PAGE> 2
PENFORD CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets
February 29, 2000 and August 31, 1999 3
Condensed Consolidated Statements of Income
Three and Six Months Ended February 29, 2000
and February 28, 1999 4
Condensed Consolidated Statements of Cash Flow
Six Months Ended February 29, 2000 and
February 28, 1999 5
Notes to Condensed Consolidated Financial Statements 6-7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-10
Item 3 - Quantitative and Qualitative Disclosures
About Market Risk 10
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 11
Item 2 - Changes in Securities 11
Item 3 - Defaults Upon Senior Securities 11
Item 4 - Submission of Matters to a Vote of Security Holders 11
Item 5 - Other Information 11
Item 6 - Exhibits and Reports on Form 8-K 12-14
SIGNATURES 15
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
PENFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
February 29, August 31,
2000 1999
------------ ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 660 $ 15
Trade accounts receivable 20,092 18,418
Inventories:
Raw materials and other 3,160 3,423
Work in progress 329 438
Finished goods 7,198 6,260
--------- ---------
10,687 10,121
Prepaid expenses and other 5,708 4,384
--------- ---------
Total current assets 37,147 32,938
Net property, plant and equipment 112,933 111,072
Deferred income taxes 12,905 13,849
Restricted cash value of life insurance 12,030 11,896
Other assets 3,259 3,378
--------- ---------
Total assets $ 178,274 $ 173,133
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,641 $ 9,655
Accrued liabilities 11,252 9,185
Current portion of long-term debt 2,857 3,277
--------- ---------
Total current liabilities 24,750 22,117
Long-term debt 52,056 53,101
Other postretirement benefits 10,688 10,572
Deferred income taxes 20,496 21,769
Other liabilities 6,328 5,876
Shareholders' equity:
Common stock 9,312 9,267
Additional paid-in capital 21,880 21,459
Retained earnings 63,858 59,370
Treasury stock (31,094) (30,327)
Note receivable from Savings and
Stock Ownership Plan -- (71)
--------- ---------
Total shareholders' equity 63,956 59,698
--------- ---------
Total liabilities and shareholders' equity $ 178,274 $ 173,133
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
PENFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended February 29/28 Ended February 29/28
----------------------------- -----------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales $ 38,333 $ 37,161 $ 78,886 $ 75,932
Cost of sales 27,128 28,273 56,615 56,411
----------- ----------- ----------- -----------
Gross margin 11,205 8,888 22,271 19,521
Operating expenses 4,474 4,509 9,069 8,899
Research and development 1,295 1,126 2,667 2,410
----------- ----------- ----------- -----------
Income from operations 5,436 3,253 10,535 8,212
Interest expense (1,205) (1,316) (2,481) (2,744)
----------- ----------- ----------- -----------
Income before taxes 4,231 1,937 8,054 5,468
Income taxes 1,481 678 2,820 1,914
----------- ----------- ----------- -----------
Net income $ 2,750 $ 1,259 $ 5,234 $ 3,554
=========== =========== =========== ===========
Weighted average common shares and
equivalents outstanding 7,770,532 7,851,974 7,740,074 7,800,582
Earnings per common share:
Net income
Basic $ 0.37 $ 0.17 $ 0.71 $ 0.48
=========== =========== =========== ===========
Diluted $ 0.35 $ 0.16 $ 0.68 $ 0.46
=========== =========== =========== ===========
Dividends declared per common share $ 0.05 $ 0.05 $ 0.10 $ 0.10
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
PENFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months
Ended February 29/28
-----------------------
2000 1999
-------- --------
<S> <C> <C>
Operating Activities:
Net income $ 5,234 $ 3,554
Adjustments to reconcile net income
to net cash from operations:
Depreciation 6,709 6,066
Deferred income taxes (330) (217)
Change in operating assets and liabilities:
Trade receivables (1,674) 1,056
Inventories (566) 2,485
Accounts payable, prepaids and other 2,119 3,535
Net cash used in discontinued operations -- (1,017)
-------- --------
Net cash from operating activities 11,492 15,462
Investing Activities:
Additions to property, plant and equipment, net (8,529) (9,346)
Other 513 416
-------- --------
Net cash used by investing activities (8,016) (8,930)
Financing Activities:
Proceeds from unsecured line of credit 30,282 15,895
Payments on unsecured line of credit (28,470) (20,246)
Proceeds of long-term debt -- 10,000
Payments on long-term debt (3,277) (13,277)
Exercise of stock options 148 --
Purchase of treasury stock (767) (196)
Payment of dividends (747) (736)
-------- --------
Net cash used by financing activities (2,831) (8,560)
-------- --------
Net increase (decrease) in cash and equivalents 645 (2,028)
Cash and cash equivalents at
beginning of period 15 3,200
-------- --------
Cash and cash equivalents at
end of period $ 660 $ 1,172
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
PENFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS
Penford Corporation ("Penford" or the "Company") develops, manufactures
and markets specialty carbohydrate-based ingredient systems for various
applications, including papermaking, textiles and food products. The
Company utilizes its expertise in carbohydrate chemistry to develop
functional ingredient formulations using starch as a base for
value-added applications in the markets its products are sold.
The Company has extensive research and development capabilities, which
are used in understanding the complex chemistry of carbohydrate-based
materials and their application in a variety of commercial markets. In
addition, the Company has specialty processing capabilities for a
variety of modified starches, all of which have similar production
methods. Penford's core carbohydrate-based specialty starches possess
excellent binding and film-forming attributes in both industrial and
food applications.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Rule 10-01 of Regulation S-X. 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 management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation for the interim
periods presented have been included. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates. Operating results for
the three and six month periods ended February 29, 2000 are not
necessarily indicative of the results that may be expected for the year
ending August 31, 2000. For further information, refer to the
consolidated financial statements and footnotes thereto included in
Penford Corporation's annual report on Form 10-K for the fiscal year
ended August 31, 1999.
Certain prior year amounts have been reclassified to conform with
current year presentation, which had no effect on previously reported
net income.
6
<PAGE> 7
3. EARNINGS PER COMMON SHARE
The following table presents the computation of basic and diluted
earnings per share under SFAS No. 128 (Dollars in thousands except per
share data):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
February 29/28 February 29/28
-------------------------- --------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income $ 2,750 $ 1,259 $ 5,234 $ 3,554
========== ========== ========== ==========
Weighted average common
shares outstanding 7,417,890 7,396,069 7,421,301 7,376,475
Net effect of dilutive
stock options 352,642 455,905 318,773 424,107
---------- ---------- ---------- ----------
Weighted average common shares
outstanding assuming dilution 7,770,532 7,851,974 7,740,074 7,800,582
========== ========== ========== ==========
Earnings per common share:
Net income
Basic $ 0.37 $ 0.17 $ 0.71 $ 0.48
========== ========== ========== ==========
Diluted $ 0.35 $ 0.16 $ 0.68 $ 0.46
========== ========== ========== ==========
</TABLE>
Basic earnings per share reflects only the weighted average common
shares outstanding. Diluted earnings per share reflects weighted average
common shares outstanding and the effect of any dilutive common stock
equivalent shares.
4. RESTRUCTURE COSTS
On March 22, 1999, the Company announced a plan to reduce the
administrative workforce at Penford Products by 15% (20 employees) in an
effort to align operating costs with market conditions. The plan was
implemented through a combination of a voluntary retirement incentive
program and involuntary layoffs. As a result, restructuring costs
totaling $1.6 million were charged to continuing operations in the third
quarter of fiscal 1999.
The restructuring costs included an increase to the actuarial liability
of the Company's retirement pension plan, severance and other expenses
related to the overall workforce reduction plan. The Company's
retirement plan will fund approximately 60% of the total charge with
existing assets. The remaining costs were paid out in the first half of
fiscal 2000.
7
<PAGE> 8
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Consolidated sales increased to $38.3 million from $37.2 million, or 3.2%, in
the second quarter of fiscal 2000 compared to the same prior year period. Sales
for the first six months of fiscal 2000 increased to $78.9 million from $75.9
million, or 3.9%, versus last year's same six-month period. The increases in
sales for the quarter and six month period were primarily due to higher sales
volume of the Company's specialty starches for industrial and food product
applications. Sales volumes of industrial related specialty products, primarily
for paper customers, increased approximately 8% over the same two prior year
periods. Higher volumes of paper production by Penford's North American paper
customers, and to a lesser extent, new business development efforts caused the
volume growth. Lower corn costs, a key pricing component generally passed
through to customers, and some pricing pressure for paper related business
moderated the impact of volume growth on the increase in sales.
Sales volumes of specialty food starches in the second quarter and first six
months of fiscal 2000 increased 40% and 23%, respectively, over the same quarter
and six month period in the prior year. The continued strong demand for
food-grade, starch-based systems for coatings and processed meat applications
contributed to the overall increase in consolidated sales.
Gross margin improved to $11.2 million, or 29.2%, in the second quarter, from
$8.9 million, or 23.9%, in the corresponding prior year period. The gross margin
improvement is the result of higher sales volume and manufacturing efficiency
gains across all of the Company's product lines. Cost savings achieved in
manufacturing and raw material purchasing for specialty starches for papermaking
applications more than offset the price pressure noted above. Gross margin for
the six months ended February 29, 2000 increased to $22.3 million, or 28.2%,
from $19.5 million, or 25.7%, for the same six-month period in the prior year.
The improvement is also attributed to the volume increases, efficiency gains and
cost savings.
Operating expenses in the second quarter of $4.5 million were consistent with
the same period in the prior year. For the six months ended February 29, 2000,
operating expense rose slightly to $9.1 million from $8.9 million, or 1.9%.
Research and development expenses increased in the second quarter and first six
months of fiscal 2000 to $1.3 million and $1.1 million, respectively,
representing increases of 15% and 11% from the corresponding periods in the
prior year. The increased spending on research and development is mostly due to
commercialization efforts of specialty carbohydrate-based ingredient systems for
industrial applications.
Net interest expense for the second quarter and first six months of fiscal 2000
was $1.2 million and $2.5 million, respectively, compared to $1.3 million and
$2.7 million, respectively, in the corresponding periods in the prior year. The
decreases reflect lower outstanding debt balances.
8
<PAGE> 9
The effective tax rate for the second quarter and first six months of fiscal
2000 was 35%, the same as in the corresponding periods a year ago. The effective
rate for fiscal 2000 is expected to be similar.
Net income for the quarter ended February 29, 2000 was $2.7 million, or $0.35
per share, compared to net income of $1.3 million, or $0.16 per share in the
corresponding prior year period. Net income for the six months ended February
29, 2000 was $5.2 million, or $0.68 per share, compared to $3.6 million, or
$0.46 per share, for the same period in the prior year. All per share amounts
above assume dilution.
LIQUIDITY AND CAPITAL RESOURCES
At February 29, 2000, Penford had working capital of $12.4 million, an unsecured
credit agreement of $75.0 million under which there was $34.0 million
outstanding, and several uncommitted lines of credit aggregating $10.0 million
under which there was $2.3 million outstanding. The Company used operating cash
flow primarily to pay down $1.5 million of debt and to finance capital
expenditures of $8.5 million during the first six months of fiscal 2000.
Cash flow from operations for the six months ended February 29, 2000 was $11.5
million compared to $15.5 million in the corresponding period of the prior year.
The decrease in operating cash flow is due to fluctuations in the components of
working capital, primarily increases in trade accounts receivable on higher
sales volume and increases in inventory resulting from anticipated shipping
requirements.
The Company began paying a quarterly cash dividend of $0.05 per share in 1992
and has paid such dividends each quarter since. On April 3, 2000, the Board of
Directors approved an increase in the quarterly cash dividend to $0.06 per
share.
In November of 1998, the Board of Directors authorized a stock repurchase
program for the purchase of up to 500,000 shares of the outstanding stock of the
company. The Company repurchased 49,200 shares of its common stock in the first
six months of fiscal 2000 for approximately $770,000. To date, the Company has
repurchased 189,400 shares of its common stock for $2.7 million.
Net additions to property, plant and equipment during the six months ended
February 29, 2000 were $8.5 million. Second quarter additions of $4.8 million
were primarily for various improvements at the Company's industrial facility in
Cedar Rapids, Iowa and equipment additions at the Company's food-grade
manufacturing facilities.
Effective March 15, 2000, Penwest Pharmaceuticals Co. ("PPCO") paid off all
outstanding amounts on its $15 million revolving credit facility, which was
guaranteed by Penford in connection with the spin-off of PPCO in August 1998. As
a result, Penford's guaranty agreement was cancelled, releasing Penford of any
obligation under PPCO's $15 million credit facility.
9
<PAGE> 10
YEAR 2000
The Company has taken the actions deemed necessary to render mission critical
systems capable of recognizing certain dates including those after December 31,
1999, including identifying and evaluating the Year 2000 preparedness of
critical customers, suppliers and service providers. There has been no impact on
the Company to date, and further remediation is not required at this time.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements concerning long-term debt
maturities, Year 2000 readiness and the anticipated results of the Company.
There are a variety of factors which could cause actual events or results to
differ materially from those projected in the forward-looking statements,
including, without limitation, competition; the possibility of interruption of
business activities due to equipment problems, accidents, strikes, weather or
other factors; product development risk; changes in corn and other raw material
prices; changes in general economic conditions or developments with respect to
specific industries or customers affecting demand for the Company's products
including unfavorable shifts in product mix; unanticipated costs, expenses or
third party claims; the risk that results may be affected by construction
delays, cost overruns, technical difficulties, nonperformance by contractors or
changes in capital improvement project requirements or specifications; or other
unforeseen developments in the industries in which the Company operates.
Accordingly, there can be no assurance that future activities or results will be
as anticipated.
Forward-looking statements are based on the estimates and opinions of management
on the date the statements are made. The Company assumes no obligation to update
any forward-looking statements if circumstances or management's estimates or
opinions should change.
Additional information which could affect the Company's financial results is
included in the Company's 1999 Annual Report to Shareholders and its Form 10-K
for the fiscal year ended August 31, 1999 on file with the Securities and
Exchange Commission.
Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
MARKET RISK SENSITIVE INSTRUMENTS AND POSITIONS
The market risk associated with the Company's market risk sensitive instruments
is the potential loss from adverse changes in interest rates and commodities
prices.
The Company is unaware of any material changes to the market risk disclosures
referred to in the Company's Report on Form 10-K for the year ended August 31,
1999.
10
<PAGE> 11
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
A complaint was filed in late November 1999 against Penford in the
United States District Court for the District of Idaho, alleging
various violations of the federal Clean Air Act, as well as claims
for trespass and nuisance by alleged emissions from Penford's Idaho
Falls starch processing plant. The subject of the complaint involves
alleged excessive starch emissions that occurred in 1996 and 1997,
which were previously disclosed by the Company, and certain other
alleged violations relating to the plant. The complaint seeks civil
penalties, together with private damages. The case is in the early
stages, but Penford disputes the claims and will vigorously defend
the claims.
Item 2 Changes in Securities
Not applicable
Item 3 Defaults Upon Senior Securities
Not applicable
Item 4 Submission of Matters to a Vote of Security Holders
(a) The annual meeting of shareholders of Penford Corporation was held
on January 24, 2000.
(b) The following directors were elected to serve a term of three years:
Paul H. Hatfield and N. Stewart Rogers. The board is comprised of
those elected this year and the following directors completing their
terms: Jeffrey T. Cook, John C. Hunter III, Sally G. Narodick,
William G. Parzybok, Jr. and William K. Street.
(c) The following matters were voted upon at the meeting:
1. For the election of directors:
<TABLE>
<CAPTION>
% of % of
For Voted Withheld Voted
--- ----- -------- -----
<S> <C> <C> <C> <C>
Paul H. Hatfield 6,145,727 99.05% 59,077 0.95%
N. Stewart Rogers 6,147,534 99.08% 57,270 0.92%
</TABLE>
2. Ratification of selection of Ernst & Young LLP as independent
auditors of the Company:
For Against Abstain
--- ------- -------
6,171,535 25,868 7,401
(d) Not applicable
Item 5 Other Information
Not applicable
11
<PAGE> 12
Item 6 Exhibits and Reports on Form 8-K.
(a) Exhibits:
<TABLE>
<S> <C>
(3.1) Restated Articles of Incorporation of Registrant (filed as
an Exhibit to Registrant's Form 10-K for fiscal year ended
August 31, 1995)
(3.2) Articles of Amendment to Restated Articles of
Incorporation of Registrant (filed as an exhibit to
Registrant's Form 10-K for fiscal year ended August 31,
1997)
(3.3) Bylaws of Registrant as amended and restated as of October
20, 1997 (filed as an exhibit to Registrant's Form 10-K
for fiscal year ended August 31, 1997)
(4.1) Amended and Restated Rights Agreement dated as of April
30, 1997 (filed as an Exhibit to Registrant's Amendment to
Registration Statement on Form 8-A/A dated May 5, 1997)
(10.1) Senior Note Agreement among Penford Corporation as
Borrower and Mutual of Omaha and Affiliates as lenders,
dated November 1, 1992 (filed as an Exhibit to
Registrant's Form 10-Q for the quarter ended February 28,
1993)
(10.2) Penford Corporation Supplemental Executive Retirement
Plan, dated March 19, 1990 (filed as an Exhibit to
Registrant's Form 10-K for the fiscal year ended August
31, 1991)
(10.3) Penford Corporation Supplemental Survivor Benefit Plan,
dated January 15, 1991 (filed as an Exhibit to
Registrant's Form 10-K for the fiscal year ended August
31, 1991)
(10.4) Penford Corporation Deferred Compensation Plan, dated
January 15, 1991 (filed as an Exhibit to Registrant's Form
10-K for the fiscal year ended August 31, 1991)
(10.5) Change of Control Agreements between Penford Corporation
and Messrs. Cook and Horn (a representative copy of these
agreements is filed as an exhibit to Registrant's Form
10-K for the fiscal year ended August 31, 1995)
(10.6) Penford Corporation 1993 Non-Employee Director Restricted
Stock Plan (filed as an Exhibit to Registrant's Form 10-Q
for the quarter ended November 30, 1993)
(10.7) Senior Note Agreement dated as of October 1, 1994 among
Penford Corporation, Principal Mutual Life Insurance
Company and TMG Life Insurance Company (filed as an
Exhibit to Registrant's Form 10-Q for the quarter ended
February 28, 1995)
(10.8) Penford Corporation 1994 Stock Option Plan as amended and
restated as of January 21, 1997 (filed on Form S-8 dated
March 17, 1997)
(10.9) Penford Corporation Stock Option Plan for Non-Employee
Directors (filed as an exhibit to the Registrant's Form
10-Q for the quarter ended May 31, 1996)
</TABLE>
12
<PAGE> 13
(10.10) Separation Agreement dated as of July 31, 1998 between
Registrant and Penwest Pharmaceuticals Co. (filed as an
exhibit to Registrant's Form 8-K dated August 31, 1998)
(10.11) Services Agreement dated as of July 31, 1998 between
Registrant and Penwest Pharmaceuticals Co. (filed as an
exhibit to Registrant's Form 8-K dated August 31, 1998)
(10.12) Employee Benefits Agreement dated as of July 31, 1998
between Registrant and Penwest Pharmaceuticals Co. (filed
as an exhibit to Registrant's Form 8-K dated August 31,
1998)
(10.13) Tax Allocation Agreement dated as of July 31, 1998 between
Registrant and Penwest Pharmaceuticals Co. (filed as an
exhibit to Registrant's Form 8-K dated August 31, 1998)
(10.14) Excipient Supply Agreement dated as of July 31, 1998
between Registrant and Penwest Pharmaceuticals Co. (filed
as an exhibit to Registrant's Form 8-K dated August 31,
1998)
(10.15) Restatement and Exchange Agreement amending the Senior
Note Agreement among Penford Corporation as Borrower and
Mutual of Omaha and Affiliates as lenders, dated as of
August 1, 1998 (filed as an exhibit to Registrant's Form
10-K for the fiscal year ended August 31, 1998)
(10.16) Guaranty Agreement dated as of August 1, 1998 by Penford
Products Co., a wholly-owned subsidiary of Registrant, of
the Restatement and Exchange Agreement among Registrant
and Mutual of Omaha and Affiliates (filed as an exhibit to
Registrant's Form 10-K for the fiscal year ended August
31, 1998)
(10.17) Intercreditor Agreement dated as of August 1, 1998 among
the parties to the Credit Agreement dated July 2, 1998 and
the parties to the Senior Note Agreements dated as of
August 1, 1998 (filed as an exhibit to Registrant's Form
10-K for the fiscal year ended August 31, 1998)
(10.18) Restatement and Exchange Agreement amending the Senior
Note Agreement among Penford Corporation as Borrower, and
Principal Mutual Life Insurance Company and TMG Life
Insurance Company as lenders, dated as of August 1, 1998
(filed as an exhibit to Registrant's Form 10-K for the
fiscal year ended August 31, 1998)
(10.19) Guaranty Agreement dated as of August 1, 1998 by Penford
Products Co., a wholly-owned subsidiary of Registrant, of
the Restatement and Exchange Agreement among Registrant,
Principal Mutual Life Insurance Company, and TMG Life
Insurance Company (filed as an exhibit to Registrant's
Form 10-K for the fiscal year ended August 31, 1998)
(10.20) Credit Agreement dated as of July 2, 1998 among Penford
Corporation and Penford Products Co. as borrowers, and
certain commercial lending institutions as the lenders,
and The Bank of Nova Scotia, as agent for the lenders
(filed as an exhibit to Registrant's Form 10-K for the
fiscal year ended August 31, 1998)
13
<PAGE> 14
27 Financial Data Schedule
(b) There were no filings on Form 8-K in the quarter ended February 29, 2000.
14
<PAGE> 15
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.
Penford Corporation
------------------------------------
(Registrant)
April 10, 2000 /s/ Jeffrey T. Cook
- -------------- ------------------------------------
Date Jeffrey T. Cook
President and
Chief Executive Officer (Principal
Executive Officer)
April 10, 2000 /s/ Keith T. Fujinaga
- -------------- ------------------------------------
Date Keith T. Fujinaga
Corporate Controller
(Chief Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT FEBRUARY 29, 2000, THE CONDENSED
CONSOLIDATED STATEMENT OF INCOME AT FEBRUARY 29, 2000, AND THE CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOW AT FEBRUARY 29, 2000, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-2000
<PERIOD-START> DEC-01-1999
<PERIOD-END> FEB-29-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 20,092
<ALLOWANCES> 0
<INVENTORY> 10,687
<CURRENT-ASSETS> 37,147
<PP&E> 112,933
<DEPRECIATION> 0
<TOTAL-ASSETS> 178,274
<CURRENT-LIABILITIES> 24,750
<BONDS> 0
0
0
<COMMON> 9,312
<OTHER-SE> 54,644
<TOTAL-LIABILITY-AND-EQUITY> 178,274
<SALES> 38,333
<TOTAL-REVENUES> 38,333
<CGS> 27,128
<TOTAL-COSTS> 27,128
<OTHER-EXPENSES> 5,769
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,205
<INCOME-PRETAX> 4,231
<INCOME-TAX> 1,481
<INCOME-CONTINUING> 2,750
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,750
<EPS-BASIC> 0.37
<EPS-DILUTED> 0.35
</TABLE>
