FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1995 Commission File No. 0-3026
PARADISE, INC.
INCORPORATED IN FLORIDA IRS IDENTIFICATION NO. 59-1007583
1200 DR. MARTIN LUTHER KING, JR. BLVD., PLANT CITY, FLORIDA 33566
(813) 752-1155
"Indicate by check mark whether the registrant has filed all annual, quarterly
and other reports required to be filed with he Commission within the past 90
days and in addition has filed the most recent annual report required to be
filed. Yes X No ___."
"Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the last practicable date."
Class
Outstanding as of March 31,
1995
1994
Common Stock
$0.30 Par Value
519,170 Shares
519,170 Shares
THIS DOCUMENT IS A COPY OF THE 10-QSB PREVIOUSLY FILED ON MAY 15, 1995 PURSUANT
TO A TEMPORARY HARDSHIP EXEMPTION
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31,
ASSETS
1995
1994
CURRENT ASSETS
Cash and Unrestricted Demand Deposits
$ 130,436
$ 498,019
Accounts and Notes Receivable, Less
Allowances of $-0- (1995 & 1994)
804,086
1,012,085
Inventories
Raw Materials
2,110,516
2,267,780
Work in Process
11,454
12,546
Finished Goods
3,760,100
4,843,729
Prepaid Expenses and Other Current Assets
431,869
336,457
Deferred Income Tax Asset
201,367
517,038
Income Tax Refund Receivable
99,914
0
TOTAL CURRENT ASSETS
7,549,742
9,487,653
Real Estate Investment, at Cost
261,848
261,848
Property, Accumulated Depreciation of
$11,489,704 (1995) and $10,785,199 (1994)
5,604,473
6,067,305
Deferred Charges and Other Assets
160,494
169,242
TOTAL ASSETS
$ 13,576,558
$ 15,986,049
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Notes and Trade Acceptances Payable
$ 2,492,752
$ 5,478,733
Current Portion of Long-Term Debt
2,058,227
537,204
Accounts Payable
1,551,882
912,038
Accrued Liabilities
694,406
646,843
Federal and State Income Taxes Payable
0
0
TOTAL CURRENT LIABILITIES
6,797,267
7,574,818
ITEM 1 - Financial Statements (Continued)
LONG TERM DEBT, NET OF CURRENT PORTION
64,901
2,119,714
DEFERRED INCOME TAX LIABILITY
605,862
655,182
TOTAL LIABILITIES
7,468,030
10,349,714
STOCKHOLDER'S EQUITY
Common Stock: Auth; 2,000,000 shs. @ $.30
Par Val; Issued 582,721 (1995 & 1994)
174,926
174,916
Capital in Excess of Par Value
1,288,793
1,288,793
Retained Earnings
4,919,013
4,446,831
Less: 63,551 shares (1995 & 1994) at Cost, Held in Treasury
(274,205)
(274,205)
TOTAL STOCKHOLDER'S EQUITY
6,108,528
5,636,335
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 13,576,558
$ 15,986,049
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS
ENDED MARCH 31,
1995
1994
Net Sales
1,256,491
2,328,496
Costs and Expenses
Cost of Goods Sold
791,889
1,811,588
Selling, General and Admin. Expense
497,220
657,186
Depreciation and Amortization
193,873
206,593
Interest Expense - Long Term
59,620
64,074
Interest Expense - Short Term
40,363
48,666
Total Expenses
1,582,965
2,788,106
Other Income
9,595
21,010
Earnings (Loss) from Operations
Before Provision for Income Taxes
(316,880)
(438,600)
Provision for Income Taxes
0
0
Net Earnings (Loss)
(316,880)
(438,600)
Earnings (Loss) per Common Share
(0.61)
(0.84)
ITEM 1 - Financial Statements (Continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS
ENDED MARCH 31,
1995
1994
CASH FLOWS FROM OPERATING ACTIVIES:
Net Earnings (Loss)
$ (316,880)
$ (438,600)
Adjustments to Reconcile Net Earning (Loss) to Net Cash
Provided by (Used in) Operating Activities:
Increase in Net Deferred Income Tax Liaiblity
672
Depreciation and Amortization
193,873
206,023
Decrease (Increase) in:
Accounts Receivable
1,107,356
644,366
Inventories
(2,077,802)
(1,936,687)
Prepaid Expenses
200,245
213,737
Increase (Decrease) in:
Accounts Payable
974,842
537,702
Accrued Expense
(766,015)
(260,746)
Net Cash (Used in) Operating Activities
(684,381)
(1,032,833)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment
(147,081)
(69,421)
Net Cash Used in Investing Activities
(147,081)
(69,421)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Proceeds (Repayments) of Short-term Debt
321,116
1,074,257
Principal Payments of Long-term Debt
(117,800)
(161,725)
Decrease (Increase) in Other Assets
16,803
13,887
Increase in Common Stock
110
Decrease in Dividends Payable
(4,655)
Net Cash Used in Financing Activities
215,574
926,419
Net Increase (Decrease) in Cash
(615,888)
(175,835)
CASH at Beginning of Period
746,324
673,854
CASH at End of Period
$ 130,436
$ 498,019
Item 1- Financial Statements (Continued)
(g) Earnings per common share, assuming no dilution, are based on the weighted
average number of shares outstanding during the period:519,170 (1995 and 1994).
(h) The foregoing information is unaudited but, in the opinion of management,
includes all adjustments consisting of normal accruals, necessary for a fair
presentation of the results for the period reported.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
All interim Management Discussions begin with he caveat that only a full year's
accounting offers a reasonable basis for judging operating results. That is
because of the extremely seasonal nature of the Company's core business, glace'
glace fruit in which approximately 80% of annual sales are concentrated between
the second week of September and the first week in November each year.
However, in order to make timely deliveries of this holiday confection, the
Company must manufacture and build inventories of about 10 months out of the
year. During these months, there is relatively little income to offset
expenses, and growing losses on operations are common until the late third or
early fourth quarters.
The seasonal nature of sales, together with annual variations in the timing of
the harvest of fruit raw materials, result in differing intensities of
operations from one quarter to the next. Therefore, it is the opinion of
management that analysis of the relationship between quarters is not
productive, so this discussion is limited to a comparison of the current
reporting period with the like period during the preceding year.
Briefly stated, the Company operated four segments of business during 1994
(with the percentage of total 1994 sales given in parentheses): candied fruit
(75%), molded plastics (15%), edible nuts (3%), and fresh and frozen
strawberry products (7%). Total net sales aggregated nearly $22 million for
the year.
Sales declined by over $1 million, or 46%, for the first quarter, as compared to
the same period during 1994. While at first glance this development seems
dramatic, closer examination as to the reasons illustrates that this decline
was an expected further consequence of operations during the year ended
December 31, 1994, when total sales increased by nearly $4.4 million, or 25%,
over the prior year.
As noted in independently certified annual financial statements, it is trade
practice and normal sales policy to allow some customers to return unsold,
retail-packed candied fruit products after the holiday season. The increase
in 1994 sales, most of which was in retail-packed candied fruit, would
normally lead to an increase in returned merchandise during the ensuing year.
These returns are deducted from the net sales,reported herein.
However it is also company policy to set aside a provision for the unrealized
profits on estimated returns when calculating operating results at year-end.
Therefore, the reduction in sales during early 1995 did not negatively impact
net profit (loss) for the period,as is demonstrated by the improved operating
results for the quarter.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Cont)
Two other segments of business reported reduced sales during the period:
plastics, which continued its withdrawal from the currently unprofitable
market for one-pint baskets for the marketing of fresh strawberries; and
processed strawberry operations, which, during early 1995, had very little
carryover inventory available for sale (the processing and freezing of Florida
strawberry crops normally begins in April, when prices for fresh strawberries
decline).
Expressed as a percentage of sales, costs of goods sold were reduced materially,
and gross profits increased proportionately. Total selling, general and
administrative expenses also declined significantly (21%). Some of the
decline in selling expenses were due to credits against accrued 1994 expenses,
for brokers' commissions and royalties, and arising from the aforementioned
returns, interest expense was lower (11%), despite higher rates, due to a much
smaller financed inventory at the beginning of the year.
Other income, mostly derived from the leasing to others of assets currently not
required for Company operations, was reduced by more than half, but the dollar
amount ($11,000) is negligible in the overall scheme of things.
As to the March 31, 1995 Balance Sheet, it will be noted that the Current
Portion of Long-Term Debt is reported to be in excess of $2 million. Most of
this is a "balloon" on a five-year loan, maturing in July, 1995. Subsequent
to the end of the first quarter, the Company and its lender have signed a
letter of commitment, which provides for a refinancing of this "balloon",
together with some additional term financing.
In conclusion, management is satisfied with the apparent improvement in
operations, but again expresses its considered opinion that, with merely 12%
of the prior year's sales having been made, it is far too early to project or
anticipate year-end results.
PART II. OTHER INFORMATION
None of the item numbers on captions are applicable to this report and are,
therefore, omitted.
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.
Date: May 15, 1995 PARADISE, INC.
s/Melvin S. Gordon
Melvin S. Gordon, President
s/Eugene L. Weiner
Eugene L. Weiner, Executive Vice
President, Secretary-Treasurer
