FORM 10 - QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 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 the 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 September 30,
1995 1994
Common Stock
$0.30 Par Value 519,170 Shares 519,170 Shares
Page 1
PARADISE, INC. COMMISSION FILE NO. 0-3026
Instruction 4. Financial Statements (Continued)
(a) (1) CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30,
1995 1994
ASSETS
CURRENT ASSETS
Cash and Unrestricted Demand Deposits $ 365,066 $ 312,165
Accounts and Notes Receivable, Less
Allowances of $-0- (1995 and 1994) 7,564,018 6,769,137
Inventories:
Raw Materials 1,545,406 1,657,250
Work in Process 270,960 314,377
Finished Goods 6,661,468 6,131,952
Deferred Income Tax Asset 201,367 517,038
Income Tax Refund Receivable 99,914
Prepaid Expenses and Other Current Assets 723,026 567,169
TOTAL CURRENT ASSETS 17,431,225 16,269,088
Real Estate Investment, at Cost 261,849 261,849
Property, Plant and Equipment, Less
Accumulated Depreciation of $11,677,123
(1995) and $10,986,267 (1994) 5,407,285 5,796,981
Deferred Charges and Other Assets 238,059 152,521
TOTAL ASSETS $23,338,418 $22,480,439
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes and Trade Acceptances Payable $ 6,732,272 $ 9,472,425
Current Portion of Long-Term Debt 882,235 483,489
Accounts Payable 3,251,185 1,793,643
Accrued Liabilities 1,339,435 1,725,954
Federal and State Income Taxes Payable 316,792 147,155
TOTAL CURRENT LIABILITIES 12,521,919 13,622,666
LONG-TERM DEBT, NET OF CURRENT PORTION 3,310,042 1,906,923
DEFERRED INCOME TAX LIABILITY 605,862 655,183
STOCKHOLDERS' EQUITY
Common Stock: Auth; 2,000,000 shs. @ $.30
Par Value; Issued 582,721 (1995 and 1994) 174,926 174,916
Capital in Excess of Par Value 1,288,793 1,288,793
Retained Earnings 5,711,081 5,106,163
Less 63,551 (1995 and 1994) shares at cost
Held in Treasury ( 274,205) ( 274,205)
Total Stockholders' Equity 6,900,595 6,295,667
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $23,338,418 $22,480,439
Page 2
PARADISE, INC. COMMISSION FILE NO. 0-3026
Instruction 4. Financial Statements
(a) (1) CONSOLIDATED STATEMENT OF INCOME
FOR THE QUARTER ENDED
SEPTEMBER 30,
1995 1994
Net Sales $ 9,399,067 $ 9,587,673
Costs and Expenses:
Cost of Goods Sold 5,380,356 5,866,967
Selling, General and Admin. Expense 1,294,137 1,635,473
Depreciation and Amortization 188,396 211,717
Interest Expense - Long Term 31,666 61,245
Interest Expense - Short Term 260,940 238,198
Total Expenses 7,155,495 2,689,677
Other Income 19,146 3,945
Earnings (Loss) from Operations Before
Provision for Income Taxes 2,262,718 1,578,018
Provision for Income Taxes 316,792 147,155
Net Earnings (Loss) $1,945,926 $1,430,863
Earnings (Loss) per Common Share $3.75 $2.76
Page 3
PARADISE, INC. COMMISSION FILE NO. 0-3026
Instruction 4. Financial Statements (Continued)
(a) (1) CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
1995 1994
Net Sales $11,774,111 $13,812,377
Costs and Expenses:
Cost of Goods Sold 7,486,111 9,320,370
Selling, General and Admin. Expense 2,550,467 2,967,324
Depreciation and Amortization 515,517 627,155
Interest Expense - Long Term 154,797 160,353
Interest Expense - Short Term 421,030 416,182
Total Expenses 11,127,922 13,491,384
Other Income 145,792 46,894
Earnings (loss) from Operations Before
Provision for Income Taxes 791,981 367,887
Provision for Income Taxes 316,792 147,155
Net Earnings (Loss) $ 475,189 $ 220,732
Earnings (Loss) per Common Share $0.92 $0.43
Page 4
PARADISE, INC. COMMISSION FILE NO. 0-3026
Instruction 4. Financial Statements (Continued)
(a) (1) CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net Earnings $ 475,189 $ 220,732
Adjustments to Reconcile Net Earnings (Loss) to Net
Cash Used in Operating Activities
Depreciation and Amortization 515,517 627,155
Gain on Sale of Assets ( 102,500)
Decrease (Increase) in:
Accounts Receivable (5,652,576) (5,112,686)
Inventories (4,673,566) (3,053,955)
Prepaid Expenses ( 90,912) ( 16,975)
Increase (Decrease) in:
Accounts Payable 2,674,145 1,419,308
Accrued Expense ( 125,641) 819,065
Income Taxes Payable 316,792 285,669
Net Cash Used in Operating Activities (6,663,552) (4,811,687)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Property and Equipment ( 233,249) ( 199,417)
Proceeds on Sale of Property & Equipment 102,500
Net Cash Used in Investing Activities ( 130,749) ( 199,417)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Sale of Stock 100
Net Proceeds of Short-Term Debt 6,560,636 5,067,950
Proceeds from Issuance of Long-Term Debt 325,542
Principal Payments of Long-Term Debt ( 374,193) ( 428,230)
Loan Financing Costs ( 98,942) 9,595
Net Cash Provided by Financing Activities 6,413,043 4,649,415
Net Decrease in Cash ( 381,258) ( 361,689)
CASH AT BEGINNING OF PERIOD 746,324 673,854
CASH AT END OF PERIOD $ 365,066 $ 312,165
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
PROCEEDS OF LONG TERM DEBT USED TO:
Pay Down Short-Term Debt $2,000,000
Pay Off Existing Long-Term Debt 2,063,068
$4,063,068
Page 5
PARADISE, INC. COMMISSION FILE 0-3026
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
Paradise, Inc. concludes the third quarter of 1995 with the best balance
sheet position and highest profits that have been recorded for the nine
month period in a number of years. While it remains the opinion of
management that only a full year's reporting can accurately reflect the
Company's financial position, progress to date gives cause for an
optimistic outlook regarding year-end results.
With the restructuring of debt, accomplished earlier in the year,
current ratios have been improved and working capital was materially
augmented. And, increased profitability plus diligent management of
inventories and capital expenditures has enhanced cash flow.
As repeated in every interim report, the extreme seasonality in the
Company's primary segment of business, candied fruit, renders
comparisons of the current quarter with the quarter immediately
preceding virtually valueless. Therefore, this discussion is limited
to a comparison of the first nine months of 1995 with the similar
period during the preceding year.
Those who have followed the Company's history will recall that
approximately 80% of the total annual sales in the candied fruit
segment, which accounted for 75% of all sales during 1994, take place
from the second week in September to the first week in November each
year. As such, management anticipates that a significantly large
proportion of sales for the current year have yet to be made.
While sales to date have declined by about $2 Million, it will be noted
that none of this reduction occured in the core business. Nearly
one-half of the decline resulted from withdrawal from certain injection
molded plastics markets that had become unprofitable, due to changes in
demand, and to foreign competition.
The other relatively large sales decline was in the fresh and frozen
strawberry segment of business. Contrary to the prior year, there was
no carryover of frozen product available for sale in early 1995. In
addition, 1995 production was limited to only those quantities for which
sales contracts existed. And, the third, relatively small reduction was
in edible nuts, a business segment in which the Company sustained
substantial losses during 1993, and which has been very stringently
limited since that time.
Expressed as a percentage of sales, costs of goods sold declined,
primarily due to reductions in almost every factory expense except
insurance, and because of small purchases of raw materials for the lower
profit segments of business in which sales declined, as outlined above.
Page 6
PARADISE, INC. COMMISSION FILE 0-3026
Selling, general and administrative expenses were also reduced, mostly
because of lower royalty expenses accrued on the rights to sell a former
competitor's line of candied fruit at the supermarket level. These
rights were acquired during 1994, and the reduction in the percentage of
royalties payable during the second and subsequent years was stipulated
in the contract covering the acquisition.
Depreciation and amortization expenses were also reduced, as management
has limited capital expenditures during the past several years, in order
to preserve cash flows, and existing depreciation schedules were fully
amortized.
Total interest expenses have remained fairly constant, although the
recent lowering of rates and smaller outstanding loan balances should
result in interest expense savings by year end.
Higher other income made a significant contribution to increased profit
by virtue of selling some fully depreciated and outdated plastics
equipment.
After-tax profits have increased to over $475,000, or $0.95 per share,
from nearly $221,000, or $0.44 per share.
Management is greatly encouraged by the improved operating performance
during the first nine months, but, with some 40% of the year's
anticipated sales yet to be made, is of the opinion that it is still too
early to forecast year-end results with any degree of certainty.
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: November 10, 1995 PARADISE, INC.
s/ Melvin S. Gordon
Melvin S. Gordon, President
s/ Eugene L. Weiner
Eugene L. Weiner, Executive Vice
President, Secretary-Treasurer
Page 7
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-END> SEP-30-1995 SEP-30-1994
<CASH> 335,066 312,165
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