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, 2000
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,
2000 1999
Common Stock
$0.30 Par Value 518,977 Shares 519,170 Shares
Page 1
PARADISE, INC. COMMISSION FILE NO. 0-3026
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) (1) CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30,
2000 1999 *
ASSETS
63: CURRENT ASSETS:
Cash and Equivalents $ 345,096$ 61,956
Accounts Receivable, Less
Allowances Of $0 8,034,288 7,649,520
Inventories:
Raw Materials 1,907,788 1,682,325
Work in Process 351,140 531,213
Finished Goods 8,277,190 8,362,173
Deferred Tax Asset 436,616 517,085
Tax Refund Receivable 52,455 290,988
Prepaid Expenses 575,589 348,000
TOTAL CURRENT
ASSETS 19,980,162 19,443,260
Property, Plant and
Equipment, Less
Accumulated Depreciation
of $14,634,065 (2000) and
$13,986,907(1999) 5,794,980 5,911,394
Other Assets 689,566 676,349
TOTAL ASSETS $ 26,464,708$ 26,031,003
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable $ 8,089,012 $ 8,303,556
Current Portion of
Long Term Debt 229,398 1,114,776
Accounts Payable 2,671,574 2,461,288
Accrued Expenses 1,148,572 934,847
Income Taxes Payable 472,235 262,000
TOTAL CURRENT
LIABILITIES 12,610,791 13,076,467
100: LONG-TERM DEBT,
NET OF CURRENT 693,888 944,864
DEFERRED TAXES 411,370 451,689
105: STOCKHOLDERS' EQUITY:
Common Stock: Auth;
2,000,000 shs. @ $.30
Par Value; Issued
582,721 Shares 174,926 174,926
Paid In Capital 1,288,793 1,288,793
Retained Earnings 11,561,859 10,368,469
Less 63,744 (2000)
and 63,551 (1999)
shares at cost held
in Treasury ( 276,919) ( 274,205)
Total Stockholders'
Equity 12,748,659 11,557,983
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY $ 26,464,708 $ 26,031,003
* Restated for Comparative Purposes
Page 2
PARADISE, INC. COMMISSION FILE NO. 0-3026
Item 1. Financial Statements (Continued)
(a) (1) CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED
SEPTEMBER 30
2000 1999
Net Sales $ 10,115,365 $ 9,439,028
Costs and Expenses:
Cost of Goods Sold 6,244,200 5,566,483
Selling, General and Admin 1,214,345 1,243,844
Depreciation and Amortization 178,920 206,258
Interest Expense - Long Term 22,395 47,172
Interest Expense - Short Term 205,856 151,696
Total Expenses 7,865,716 7,215,453
Earnings from Operations 2,249,649 2,223,675
Other Income (Expense) 12,900 ( 3,111)
Earnings Before Income Taxes 2,262,549 2,220,464
Provision for Income Taxes 472,235 262,000
Net Earnings $ 1,790,314 $ 1,958,464
Earnings per Common Share $ 3.45 $ 3.77
Page 3
PARADISE, INC. COMMISSION FILE NO. 0-3026
Item 1. Financial Statements (Continued)
(a) (1) CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED
SEPTEMBER 30
2000 1999 *
Net Sales $ 13,221,391 $ 12,318,955
Costs and Expenses:
Cost of Goods Sold 8,640,226 8,084,621
Selling, General and Admin 2,530,801 2,518,963
Depreciation and Amortization 515,352 587,914
Interest Expense - Long Term 74,562 139,354
Interest Expense - Short Term 268,539 192,032
Total Expenses 12,029,480 11,522,884
Earnings from Operations 1,191,911 796,071
Other Income 50,814 34,803
Earnings Before Income Taxes 1,242,725 830,874
Provision for Income Taxes 472,235 262,000
Net Earnings $ 770,490 $ 568,874
Earnings per Common Share $ 1.48 $ 1.11
* Restated for Comparative Purposes
Page 4
PARADISE, INC. COMMISSION FILE NO. 0-3026
Item1. Financial Statements (Continued)
(a) (1) CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30,
2000 1999 *
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Earnings $ 770,490 $ 568,874
Adjustments to Reconcile Net Earnings to Net
Cash Used in Operating Activities:
Depreciation, Amortization 515,352 587,914
Decrease (Increase) in:
Accounts Receivable ( 5,353,506 ) ( 6,896,048 )
Inventories ( 4,819,905 ) ( 4,910,806 )
Prepaid Expenses ( 259,515 ) ( 69,513 )
Income Taxes Receivable 51,136
Increase (Decrease) in:
Accounts Payable 2,205,543 1,584,828
Accrued Expense ( 462,648 ) ( 803,703 )
Income Taxes Payable 335,705 262,000
Net Cash Used in
Operating Activities ( 7,017,348 ) ( 9,676,454 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures ( 513,778 ) ( 1,058,749 )
Net Cash Used in
Investing Activities ( 513,778 ) ( 1,058,749 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of Notes Payable 7,888,552 8,090,979
Proceeds Long-term Debt 825,000
Payments Long-term Debt ( 986,065 ) ( 573,869 )
Dividends Paid ( 181,840 ) ( 233,794 )
Increase Other Assets ( 41,372 ) ( 39,803 )
Treasury Stock Purchase ( 2,714 )
Net Cash Provided by
Financing Activities 6,676,561 8,068,513
Net Decrease in Cash ( 854,565 ) ( 2,666,690 )
CASH, BEGINNING 1,199,661 2,728,646
CASH, END $ 345,096 $ 61,956
* Restated for Comparative Purposes
Page 5
PARADISE, INC. COMMISSION FILE NO. 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: 518,977
(2000) and 519,170 (1999).
(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
Overview
With little over 60% of estimated annual sales (based on 1999 totals) made
to date, it is appropriate to repeat the caveat made in every interim financial
statement. It is the opinion of management that only an analysis of a
full year's operation will yield a meaningful measure of the Company's
performance. That is because the sales in Paradise's core business,
glace' (candied) fruit, which represented 83% of total 1999 sales,
are extremely seasonal. These products are used primarily as
ingredients for Thanksgiving and Christmas holiday
confections, and approximately 80% of total annual sales in this segment of
business are concentrated between early September and mid-November each
year. Therefore, a material balance of the "selling season" remains for fiscal
2000.
However, in order to make timely deliveries during this short period of peak
demand, the Company must manufacture product throughout the year, and build
large inventories. This results in (i) the need for relatively large
borrowings to supply short-term working capital, and (ii) substantial
operating losses until well into the third quarter of the calendar year, even
during the most profitable years, as there is little income to offset
ongoing expenses.
Likewise, comparison of the current quarter with the quarter immediately
preceding yields little in the way of useful information, as operations are
materially different during each quarter, depending upon harvests, the timing
of customers orders, and other factors.
Therefore, discussion and comparison of the data contained in interim
reports is limited to the year to date as it relates to the similar period
during the prior year.
The First Nine Months
Compared to the prior year, sales during the period have increased in both
segments of business: glace' (candied) fruit by 7% and molded plastics by more
than 8%. As reported earlier, much of the fruit sales increase can be
attributed to a reduction of credits issued for returns and "reclamation
charges" for merchandise sold during 1999 and returned during the
current year. In addition, both segments recorded substantial
sales to new customers and increased sales to existing customers.
Page 6
PARADISE, INC. COMMISSION FILE NO. 0-3026
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
The First Nine Months (Continued)
Expressed as a percentage of sales, costs of goods remained fairly
consistent with the prior year. Total selling, general and administrative
expenses increased slightly, but by a lower percentage than the
increase in sales. While there were a number of both upward and
downward variations in specific line items, none
were greater than 2% of the total expenses in this classification.
Although total average borrowings were somewhat lower, interest expense
increased slightly as a reflection of increased rates. It should be noted
that total long-term debt has been reduced by more than $1,100,000
during the past twelve months, but short-term borrowings were
somewhat higher in order to finance the increases in sales.
Summary
While management is gratified by sales and profit trends to date, much of the
Company's year-end results will depend on supermarket sales of glace' fruit
products and consequent reorders during the fourth quarter. Therefore, it
is the opinion of management that it is too early to forecast year-end results
with any degree of confidence.
Our Independent Accountants have reviewed the foregoing interim financial
information, and their report, dated November 2, 2000 is included herewith on
Page 9.
PART II. OTHER INFORMATION
None of the item numbers on captions are applicable to this report and are,
therefore, omitted.
Page 7
PARADISE, INC. COMMISSION FILE NO. 0-3026
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 6, 2000 PARADISE, INC.
s/ Melvin S. Gordon
Melvin S. Gordon, President
s/ Eugene L. Weiner
Eugene L. Weiner, Executive Vice
President, Secretary-Treasurer
Page 8
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
We have reviewed the accompanying Consolidated Balance Sheets, Statements
of Income and Cash Flows of Paradise, Inc. and consolidated subsidiaries as of
September 30, 2000 and 1999, and for the three-month and nine-month periods
then ended. These financial statements are the responsibility of the Company's
management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective
of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
Respectfully submitted,
BELLA, HERMIDA, GILLMAN, HANCOCK & MUELLER
Certified Public Accountants
November 2, 2000
Plant City, Florida
Page 9
