UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: Commission File Number:
March 30, 1996 0-13544
BEN & JERRY'S HOMEMADE, INC.
(Exact name of registrant as specified in its charter)
VERMONT 03-0267543
(State of incorporation) (I.R.S. Employer Identification No.)
30 Technology Drive
Suite # 1
South Burlington, Vermont 05403
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(802) 651-9600
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 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 classes of common
stock outstanding as of the latest practicable date. 6,274,666 shares of Class A
Common Stock and 910,589 shares of Class B Common Stock outstanding as of May 1,
1996.
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended March 30, 1996
INDEX
PART I: FINANCIAL INFORMATION PAGE NO.
Condensed Balance Sheets
March 30, 1996 and December 30, 1995 1-2
Condensed Statements of Income
Thirteen weeks ended March 30, 1996
and April 1, 1995 3
Condensed Statements of Cash Flows
Thirteen weeks ended March 30, 1996
and April 1, 1995 4
Notes to Condensed Financial Statements 5-6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-10
PART II: OTHER INFORMATION
Item 6-Exhibits and Reports on Form 8-K 11
SIGNATURES 12
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
CONDENSED BALANCE SHEETS
ASSETS
(In thousands)
(Unaudited)
<TABLE>
March 30, December
1996 30, 1995
----------------- -----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 31,639 $ 35,406
Accounts receivable
Trade (less allowance of $850 in 1996 and $802 in 1995
for doubtful accounts) 15,276 11,660
Other 584 854
Inventory 15,507 12,616
Deferred income taxes 3,261 3,599
Income taxes receivable 2,987 2,831
Prepaid expenses 2,362 1,097
----------------- -----------------
Total current assets 71,616 68,063
----------------- -----------------
Property, plant and equipment, net 61,106 59,600
Investments 1,000 1,000
Other assets 2,367 2,411
----------------- -----------------
Total assets $ 136,089 $ 131,074
================= =================
</TABLE>
See accompanying notes
1
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
CONDENSED BALANCE SHEETS
LIABILITIES & STOCKHOLDERS' EQUITY
(In thousands except share data)
(Unaudited)
<TABLE>
March 30, December
1996 30, 1995
----------------- -----------------
<S> <C> <C>
Current liabilities:
Accounts payable and accrued expenses $ 19,671 $ 16,592
Current portion of long-term debt and
obligations under capital leases 403 448
----------------- -----------------
Total current liabilities 20,074 17,040
----------------- -----------------
Long-term debt and obligations under capital leases 31,798 31,977
----------------- -----------------
Deferred income taxes 4,238 3,526
----------------- -----------------
Stockholders' equity:
$1.20 noncumulative Class A preferred stock - par value
$1.00 per share, redeemable at $12.00 per share;
900 shares authorized, issued and outstanding;
aggregate preference on voluntary or involuntary
liquidation - $9 1 1
Class A common stock - $.033 par value; authorized
20,000,000 shares; issued: 6,340,488 at March 30, 1996
and 6,330,302 at December 30, 1995 209 209
Class B common stock - $.033 par value; authorized
3,000,000 shares; issued: 912,245 at March 30, 1996 and
914,325 at December 30, 1995 30 30
Additional paid-in-capital 48,615 48,521
Retained earnings 32,628 31,264
Cumulative translation adjustment (124) (114)
Treasury stock, at cost: 67,032 Class A and 1,092 Class B
shares at March 30, 1996 and December 30, 1995 (1,380) (1,380)
----------------- -----------------
Total stockholders' equity 79,979 78,531
----------------- -----------------
$ 136,089 $ 131,074
================= =================
</TABLE>
See accompanying notes
2
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the Thirteen weeks ended
(Unaudited)
( In thousands except per share amounts)
<TABLE>
March 30, April 1,
1996 1995
----------------- ----------------
<S> <C> <C>
Net sales $ 37,889 $ 34,205
Cost of sales 25,924 24,503
----------------- ----------------
Gross profit 11,965 9,702
Selling, general and
administrative expenses 10,356 8,264
----------------- ----------------
Operating income 1,609 1,438
Interest income 359 357
Interest expense (517) (21)
Other income(expense) 750 (249)
----------------- ----------------
592 87
----------------- ----------------
Income before income taxes 2,201 1,525
Federal & state income taxes 837 614
----------------- ----------------
Net income $ 1,364 $ 911
================= ================
Weighted average common and common
equivalent shares outstanding 7,242 7,164
Net income per common share $ 0.19 $ 0.13
</TABLE>
See accompanying notes
3
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
STATEMENTS OF CASH FLOWS
For the Thirteen weeks ended
(In thousands)
(Unaudited)
<TABLE>
March 30, April 1,
1996 1995
-------------- ---------------
Operating activities:
<S> <C> <C>
Net income $ 1,364 $ 911
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,634 1,335
Deferred income taxes 1,050 56
Loss on disposition of assets 32 90
-------------- ---------------
4,080 2,392
Changes in assets and liabilities:
Accounts receivable (3,346) (2,705)
Inventories (2,891) (1,019)
Prepaid expenses (1,265) (154)
Accounts payable and accrued expenses 3,079 3,755
Income taxes payable (156) 526
-------------- ---------------
Net cash (used for) provided by operating activities (499) 2,795
Investing activities:
Additions to property, plant and equipment (3,160) (3,412)
Proceeds from sale of assets 60
Changes in other assets (28) (1)
Decrease in investments 2,700
-------------- ---------------
Net cash used for investing activities (3,128) (713)
Financing activities:
Repayments of long-term debt and capital leases (224) (253)
Net proceeds from issuance of common stock 94 144
-------------- ---------------
Net cash used for financing activities (130) (109)
Effect of exchange rate changes on cash (10) 7
-------------- ---------------
(Decrease) Increase in cash and cash equivalents (3,767) 1,980
Cash and cash equivalents at beginning of period 35,406 20,778
-------------- ---------------
Cash and cash equivalents at end of period $ 31,639 $ 22,758
============== ===============
</TABLE>
See accompanying notes
4
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended March 30, 1996
NOTES TO CONDENSED FINANCIAL STATEMENTS
(All numbers in tables in thousands except per share data)
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
statements 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 have been
included. For further information, refer to the financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 30, 1995.
2. INVENTORIES
March 30, December 30,
1996 1995
--------- ------------
Ice cream, frozen yogurt, sorbet and ingredients $14,212 $11,480
Paper goods 810 674
Food, beverage and gift items 485 462
------- -------
Total $15,507 $12,616
======= =======
3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
March 30, December 30,
1996 1995
--------- ------------
Trade accounts payable $ 6,057 $ 7,283
Accrued expenses 8,080 5,889
Accrued payroll and related costs 1,832 1,749
Accrued promotional costs 2,369 1,313
Accrued marketing costs 1,120 182
Other 213 176
------- -------
Total $19,671 $16,592
======= =======
5
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended March 30, 1996
4. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS
Effective December 31, 1995, the Company has adopted Statement of Financial
Accounting Standards No. 121 ("SFAS 121"), Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of, which requires
impairment losses to be recorded on the long-lived assets used in operations
when indicators are present and the undiscounted cash flows estimated to be
generated by those assets are less than the assets' carrying amount. SFAS 121
also addresses the accounting for long-lived assets that are expected to be
disposed of. The adoption of SFAS 121 has no impact on the financial position or
results of operations of the Company as no indicators or impairment currently
exist.
The Company has adopted the disclosure provisions of Financial Accounting
Standards No. 123 ("SFAS 123"), Accounting and Disclosure of Stock-Based
Compensation. The Company will continue to account for its stock-based
compensation arrangements under the provisions of APB 25, Accounting for Stock
Issued to Employees.
6
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended March 30, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
The following table shows certain items as a percentage of net sales which are
included in the Company's Condensed Statement of Income and the percentage
increase (decrease) of such items as compared to the indicated prior period.
Percentage of Net Sales Period-to-Period
----------------------- ----------------
Thirteen Weeks Increase (Decrease)
Ended Thirteen Weeks
March April 1996 Compared
30, 1996 1, 1995 To 1995
-------- ------- -------
Net Sales 100.0% 100.0% 10.8%
Cost of Sales 68.4% 71.6% 5.8%
----- ----- --------
Gross Profit 31.6% 28.4% 23.3%
Selling, general and
administrative expenses 27.3% 24.4% 25.3%
----- ----- --------
Operating income 4.3% 4.0% 11.9%
Other income(expense) 1.5% 0.5% 580.5%
----- ---- ------
Income before income taxes 5.8% 4.5% 44.3%
Income taxes 2.2% 1.8% 36.3%
----- ----- ------
Net Income 3.6% 2.7% 49.7%
===== ====== =======
7
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended March 30, 1996
Thirteen Weeks Ended March 30, 1996 and April 1, 1995
- -----------------------------------------------------
NET SALES
Net sales of $37.9 million for the thirteen weeks ended March 30, 1996 were up
10.8% from the same period in 1995. This increase resulted from a combination of
both volume and price increases of the Company's pint sales during this quarter
as compared to the prior year. Pint volume increased 6.2% primarily due to sales
of the Company's new sorbet line which was introduced during March 1996. In
addition a 3.7% price increase on packaged pints effective in March, 1995
contributed to the increase in net sales in the first thirteen weeks of 1996
compared to the same period in 1995. Both the novelty and 2 1/2 gallon bulk
container product categories had modest increases in unit volume.
Pint sales represented 90% of total net sales in the first quarter of 1996 and
1995. Net sales of 2 1/2 gallon bulk containers represented approximately 5% of
total net sales in the first quarter of 1996 and 1995. Net sales of novelty
products accounted for approximately 4% of total net sales during this period in
1996 and 1995. Net sales from the Company's retail stores represented 1% of
total net sales in the first quarters of 1996 and 1995.
COST OF SALES AND GROSS PROFIT
Cost of sales in the first quarter of 1996 increased approximately $1.4 million
or 5.8% over the same period in 1995 and overall gross profit as a percentage of
net sales increased from 28.4% in 1995 to 31.6% in 1996. The higher gross profit
as a percentage of net sales resulted from the effect of the price increase for
a full quarter (increase was effective in March 1995), combined with
improvements in manufacturing efficiencies, production planning and inventory
management. The improved gross profit also reflects the fact that no product was
manufactured for the Company under a copacking agreement, by Edy's Grand Ice
Cream, a subsidiary of Dreyer's Grand Ice Cream, at its plant in Fort Wayne,
Indiana. In the first quarter of 1995 approximately 27% of the packaged pints
manufactured were manufactured at the Edy's plant. This agreement expired in
September 1995.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased 25.3% from $8.3 million
in the first quarter of 1995 to $10.4 million in 1996. Selling, general and
administrative expenses as a percentage of net sales increased from 24.4% in
1995 to 27.3% in 1996. This primarily reflects increased marketing and sales
expenses related to the launch of a new sorbet line in February 1996, combined
with increased international operations, and expenses related to strengthening
of the management in the production planning and inventory management areas.
8
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended March 30, 1996
OTHER INCOME (EXPENSE)
Other income (expense) increased $504,000 during the first quarter of 1996 as
compared to 1995. Other income includes interest and dividend income of
approximately $360,000 in 1995 and 1996. Interest expense increased from $21,000
in 1995 to $517,000 in 1996 due to the capitalization of interest in the prior
year as part of the cost of the plant in St. Albans, Vermont. This increase in
interest expense was more than offset by net proceeds of $884,000 from an
insurance claim settlement related to inventory damaged in 1995.
INCOME TAXES
Income taxes increased approximately $223,000 reflecting the increase in income
offset by an effective rate of 38% in 1996 compared to an effective annual rate
of 36.8% in the prior year. The increase in the effective tax rate reflects
lower income tax credits in 1996.
NET INCOME
As a result of the foregoing, net income for the first quarter of 1996 increased
49.7% or $453,000 over the first quarter of 1995. Net income increased to 3.6%
of net sales in the first quarter of 1996 from 2.7% in 1995. Net income per
share was $.19 per share for the first quarter of 1996 compared to $.13 per
share in 1995.
The Board of Directors of the Company, at its meeting in April, 1996, has
clarified the Company's policy on Ben & Jerry's philanthropy as follows: Cash
donations to the Ben & Jerry's Foundation and directly to other charitable
organizations by the Company, are approximately 7.5% of income before income
taxes. In addition, the Company may make cash contributions out of the proceeds
of its incidental non-core business operations and cash contributions for
corporate sponsorships that further Ben & Jerry's marketing objectives.
Liquidity And Capital Resources
- -------------------------------
The Company's working capital at March 30, 1996 was approximately $51.5 million
as compared to $51.0 million at December 30, 1995. This $500,000 increase was
due primarily to increases in accounts receivable, inventories and prepaid
expenses partially offset by decreases in income taxes receivable and increases
in accounts payable and accrued expenses.
Net cash used by operations in the first quarter of 1996 was approximately
$500,000. In addition, approximately $3.2 million was used for net additions to
property, plant and equipment, primarily for equipment upgrades in Waterbury and
Springfield, and for the new plant in St. Albans, Vermont. Funds were provided
by cash and investments existing at December 30, 1995. All of this resulted in a
decrease to cash and cash equivalents of $3.8 million since December 30, 1995.
9
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended March 30, 1996
Trade accounts receivable have increased since December 1995 from $11.7 million
to $15.3 million. This increase reflects seasonally higher sales. Inventories
have increased since December 1995 from $12.6 million to $15.5 million at March
30, 1996. This buildup of inventory is primarily caused by the new sorbet line
combined with the regular seasonal fluctuation.
In October 1992, the Company began construction of a new third plant in St.
Albans, Vermont. At March 30, 1996, the Company has spent approximately $39.1
million to date, net of the 1994 $6.8 million write-down of certain assets, on
building and equipping the new plant ($900,000 in the first quarter of 1996) and
anticipates additional capital costs for the St. Albans plant of approximately
$1.0 million in the remainder of 1996. The cost of building and equipping the
new plant, net of the 1994 $6.8 million write-down of certain assets, is
currently estimated to be approximately $40.1 million.
In addition to $1.0 million of capital expenditures to complete the new plant at
St. Albans, the Company anticipates other capital expenditures in the remainder
of 1996 of approximately $9.8 million. $2.3 million was spent in the first
quarter of 1996. Most of these additional projected capital expenditures relate
to equipment upgrades in Waterbury and Springfield, leasehold improvements at
the Company's headquarter offices in South Burlington, Vermont, and computer
related expenditures, with a small proportion for equipment enhancements at the
St. Albans plant, and approximately $1.5 million relating to the installation of
a third manufacturing line at the St.
Albans plant.
Management believes that internally generated funds, cash currently on hand,
investments held in marketable securities (pending their use in the business),
and equipment lease financing will be adequate to meet anticipated operating and
capital requirements.
The Company also has two lines of credit for an aggregate of $20,000,000 with
The First National Bank of Boston and Key Bank of Vermont. These are unsecured
agreements providing for borrowings from time to time, expiring at September 29,
1998 and December 29, 1998, respectively. The agreements specify interest at
either banks' Base Rate or the Eurodollar rate plus a maximum of 1.25%. As of
May 3, 1996, there have been no borrowings under these line of credit
agreements.
10
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended March 30, 1996
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - Exhibit (11) Statement Re: Computation of Per Share Earnings
(b) No reports on Form 8-K were filed during the quarter ended March 30,
1996, for which this report is filed.
11
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended March 30, 1996
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be duly signed on its behalf by the
undersigned thereunto duly authorized, being also its principal financial
officer.
BEN & JERRY'S HOMEMADE, INC.
BY: /s/Frances Rathke
Frances Rathke, Treasurer
and Principal Financial Officer
DATE: May 3, 1996
12
<PAGE>
Exhibit 11
BEN & JERRY'S HOMEMADE, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
(In thousands except per share amounts)
<TABLE>
Thirteen weeks ended
3/30/96 4/1/95
---------------- --------------
<S> <C> <C>
Primary:
Average shares outstanding 7,184 7,164
Net effect of dilutive stock options -
based on the treasury stock
method using average
market price 58 13
---------------- --------------
7,242 7,177
================ ==============
Net Income $1,364 $911
================ ==============
Per share amount $0.19 $0.13
================ ==============
Fully diluted:
Average shares outstanding 7,184 7,164
Net effect of dilutive stock options -
based on the treasury stock
method using quarter-end
market price which is greater
than average market price 69 17
---------------- --------------
7,253 7,181
================ ==============
Net Income $1,364 $911
================ ==============
Per share amount $0.19 $0.13
================ ==============
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
See accompanying notes.
$ in thousands, except per share data.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-START> DEC-31-1996
<PERIOD-END> MAR-30-1996
<CASH> 31639
<SECURITIES> 0
<RECEIVABLES> 15860
<ALLOWANCES> 0
<INVENTORY> 15507
<CURRENT-ASSETS> 71616
<PP&E> 61106
<DEPRECIATION> 0
<TOTAL-ASSETS> 136089
<CURRENT-LIABILITIES> 20074
<BONDS> 0
0
1
<COMMON> 239
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 136089
<SALES> 37889
<TOTAL-REVENUES> 0
<CGS> 25924
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (750)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 517
<INCOME-PRETAX> 2201
<INCOME-TAX> 837
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1364
<EPS-PRIMARY> .19
<EPS-DILUTED> .19
</TABLE>
