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:
March 29, 1997
Commission File Number: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 Community Drive
South Burlington, Vermont 05403-6828
(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. 6,392,864 shares of
Class A Common Stock and 890,854 shares of Class B Common Stock outstanding as
of May 2, 1997.
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended March 29, 1997
INDEX
PART I: FINANCIAL INFORMATION PAGE NO.
Condensed Consolidated Balance Sheets
March 29, 1997 and December 28, 1996 .................................1-2
Condensed Consolidated Statements of Operations
Thirteen weeks ended March 29, 1997
and March 30, 1996 ......................................................3
Condensed Consolidated Statements of Cash Flows
Thirteen weeks ended March 29, 1997
and March 30, 1996 ......................................................4
Notes to Condensed Consolidated 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.
Form 10-Q for quarter ended March 29, 1997
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (All numbers in tables in thousands except
per share data)
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated 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 28, 1996.
2. INVENTORIES
March 29, December 28,
1997 1996
---- ----
Ice cream, frozen yogurt, sorbet and ingredients $13,947 $14,221
Paper goods 780 492
Food, beverage and gift items 484 652
--- ---
Total $15,211 $15,365
======= =======
3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
March 29, December 28,
1997 1996
---- ----
Trade accounts payable $5,030 $4,337
Accrued expenses 8,999 8,825
Accrued payroll and related costs 2,095 2,152
Accrued promotional costs 3,937 2,076
Other 53 8
-- -
Total $20,114 $17,398
====== =======
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
Form 10-Q for quarter ended March 29, 1997
ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute earnings per share and to restate all prior periods. Under the new
requirements for calculating primary earnings per share, the dilutive effect of
stock options will be excluded. The impact will not result in an increase in
primary earnings per share for the first quarters ended March 29, 1997 and March
30, 1996. The impact of Statement 128 on the calculation of fully diluted
earnings per share for these quarters is not expected to be material.
<PAGE>
BEN & JERRY=S HOMEMADE, INC.
Form 10-Q for quarter ended March 29, 1997
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 Operations and the percentage
increase (decrease) of such items as compared to the indicated prior period.
<TABLE>
Percentage of Net Sales Period-to-Period
Thirteen Weeks Increase (Decrease)
Ended
Thirteen Weeks
March March 1997 Compared
29, 1997 30, 1996 To 1996
-------- -------- -------
<S> <C> <C> <C>
Net Sales 100.0% 100.0% (4.6%)
Cost of Sales 72.3% 68.4% 0.9%
---- ---- ---
Gross Profit 27.7% 31.6% (16.4%)
Selling, general and
administrative expenses 31.5% 27.3% 10.1%
---- ---- ----
Operating income (loss) (3.9%) 4.3% (186.9%)
Other income (expense) (0.9%) 1.5% (152.2%)
------ ---- -------
Income (loss) before income taxes (4.7%) 5.8% (177.6%)
Income taxes (1.8%) 2.2% (177.5%)
----- ---- -------
Net Income (loss) (2.9%) 3.6% (177.6%)
==== === ======
</TABLE>
Thirteen Weeks Ended March 29, 1997 and March 30, 1996
Net Sales
Net sales of $36.1 million for the thirteen weeks ended March 29, 1997 were down
4.6% from the same period in 1996. This decrease resulted from a volume decrease
offset by a price increase of the Company's pint sales during this quarter as
compared to the prior year. Pint volume decreased 9.7%, which was offset by a
3.6% price increase on packaged pints effective in August, 1996. Both the
novelty and 2 2 gallon bulk container product categories had increases in unit
volume.
Pint sales represented 88% of total net sales in the first quarter of 1997 and
90% of total net sales in
<PAGE>
BEN & JERRY=S HOMEMADE, INC.
Form 10-Q for quarter ended March 29, 1997
the first quarter of 1996. Net sales of 2 2 gallon bulk containers represented
approximately 6% of total net sales in the first quarter of 1997 and 5% in the
first quarter of 1996. Net sales of novelty products accounted for approximately
5% of total net sales in this period in 1997 and 4% of total net sales in 1996.
Net sales from the Company's retail stores represented 1% of total net sales in
the first quarters of 1997 and 1996.
Cost of Sales and Gross Profit
Cost of sales in the first quarter of 1997 increased approximately $221,000 or
0.9% over the same period in 1996 and overall gross profit as a percentage of
net sales decreased from 31.6% in 1996 to 27.7% in 1997. The lower gross profit
as a percentage of net sales primarily resulted from planned lower production
volumes designed to lower the Company's finished goods inventory, increased
commodity costs and also reflects lower sales volume offset by the effect of the
price increase effective in August 1996. In addition, due to higher than
anticipated levels of inventory as a result of lower than anticipated sales
volume, the Company has provided additional reserves for potential product
obsolescence.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased 10.1% from $10.4 million
in the first quarter of 1996 to $11.4 million in 1997. Selling, general and
administrative expenses as a percentage of net sales increased from 27.3% in
1996 to 31.5% in 1997. This primarily reflects increased promotional and sales
expenses in part related to new product entries, combined with increased
international costs primarily for France market entry. In addition, these
expenses as a percentage of net sales are calculated on a lower net sales basis.
Other Income (Expense)
Other income (expense) decreased $901,000 during the first quarter of 1997 as
compared to 1996 primarily reflecting proceeds recorded in the first quarter of
1996 of $884,000 from an insurance claim settlement related to inventory damaged
in 1995. In the first quarter of 1997, other income primarily consists of
interest and dividend income of approximately $405,000, offset by interest
expense of $550,000. Interest and dividend income and interest expense were
$359,000 and $517,000 respectively in the first quarter of 1996.
Income Taxes
The Company recorded an income tax benefit of $649,000 in the first quarter of
1997. The Company anticipates an effective tax rate of 38% in 1997 which is
comparable to the effective rate in the prior year.
<PAGE>
BEN & JERRY=S HOMEMADE, INC.
Form 10-Q for quarter ended March 29, 1997
Net Income (loss)
As a result of the foregoing, the net loss for the first quarter of 1997 was
$2.4 million less than the net income for the first quarter of 1996. The net
loss as a percentage of net sales was 2.9% in the first quarter of 1997 compared
to net income of 3.6% of net sales in 1996. Net loss per share was $.15 per
share for the first quarter of 1997 compared to net income of $.19 per share in
1996. Although financial results are disappointing, the Company anticipates a
return to profitability for the remainder of 1997.
Liquidity and Capital Resources
As of March 29, 1997 the Company had $ 31.1 million of cash and cash
equivalents, a decrease of $5.0 million since December 28, 1996. Net cash used
by operations in the first quarter of 1997 was approximately $3.9 million. In
addition, $867,000 was used for net additions to property, plant and equipment,
primarily for equipment upgrades at the Company's manufacturing facilities.
Trade accounts receivable have increased since December 1996 from $8.7 million
to $15.5 million. This increase reflects seasonally higher sales as compared to
the fourth quarter, as well as a lower December, 1996 receivable balance as
compared to December 1995 as a result of the timing of sales in the fourth
quarter of 1996. Inventories have remained level at $15.4 million and $15.2
million as of December 28, 1996 and March 29, 1997 respectively. The components
of inventory have changed reflecting a decrease of finished goods inventory
compared to December 1996 due to planned lower production offset by seasonally
higher raw material inventories.
The Company anticipates capital expenditures in the remainder of 1997 of
approximately $7.0 million. Most of these additional projected capital
expenditures relate to equipment upgrades at the Company's manufacturing
facilities, and computer related expenditures.
The Company anticipates approximately $2 to $3 million may be used to repurchase
up to 200,000 shares of the Company's Class A common stock as announced May 8,
1997 for use in connection with stock option awards under the 1995 Equity
Incentive Plan.
The Company also has two lines of credit for an aggregate of $20,000,000 with
the 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 2,
1997, there have been no borrowings under these line of credit agreements.
Management intends to renew these lines of credit.
Management believes that internally generated funds, cash currently on hand,
<PAGE>
BEN & JERRY=S HOMEMADE, INC.
Form 10-Q for quarter ended March 29, 1997
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.
"Forward-Looking Statements"
This section, as well as other portions of this document, includes certain
forward-looking statements about the Company's business and new products, sales,
expenditures and cost savings, effective tax rate, operating and capital
requirements and refinancings. Any such statements are subject to risks that
could cause the actual results or needs to vary materially. These risks are
discussed in "Risk Factors" in the Company's Annual Report on Form 10-K for the
year 1996.
<PAGE>
BEN & JERRY=S HOMEMADE, INC.
Form 10-Q for quarter ended March 29, 1997
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit (11) Statement Re: Computation of Per Share Earnings
Exhibit (27) Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended
March 29, 1997, for which this report is filed.
<PAGE>
BEN & JERRY=S HOMEMADE, INC.
Form 10-Q for quarter ended March 29, 1997
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, Chief Financial Officer
and Secretary
DATE: May 13, 1997
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands)
<TABLE>
March 29, December
1997 28, 1996
------------------ ------------------
(Unaudited) (Note)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 31,124 $ 36,104
Investments 484 466
Accounts receivable:
Trade (less allowance of $737 in 1997
and $695 in 1996 for doubtful accounts) 15,475 8,684
Other 382 275
Inventories 15,211 15,365
Deferred income taxes 5,438 4,099
Income taxes receivable 2,462 2,920
Prepaid expenses 319 200
------------------ ------------------
Total current assets 70,895 68,113
------------------ ------------------
Property, plant and equipment, net 64,064 65,104
Investments 1,000 1,000
Other assets 2,450 2,448
------------------ ------------------
Total assets $ 138,409 $ 136,665
================== ==================
</TABLE>
Note: The balance sheet at December 28, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed consolidated financial statements.
- 1 -
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES & STOCKHOLDERS' EQUITY
(In thousands except share data)
<TABLE>
March 29, December
1997 28, 1996
------------------ ------------------
(Unaudited) (Note)
<S> <C> <C>
Current liabilities:
Accounts payable and accrued expenses $ 20,114 $ 17,398
Current portion of long-term debt and
obligations under capital leases 611 660
------------------ ------------------
Total current liabilities 20,725 18,058
Long-term debt and obligations under capital leases 30,943 31,087
Deferred income taxes 5,029 4,835
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;
aggregated preference on liquidation - $9 1 1
Class A common stock - $.033 par value; authorized
20,000,000 shares; issued: 6,378,764 at March 29, 1997
and 6,364,733 at December 28, 1996 210 210
Class B common stock - $.033 par value; authorized
3,000,000 shares; issued: 893,078 at March 29, 1997
and 897,664 at December 28, 1996 29 29
Additional paid-in-capital 48,838 48,753
Retained earnings 34,131 35,190
Cumulative translation adjustment (117) (118)
Treasury stock, at cost: 67,032 Class A and 1,092 Class B
shares at March 29, 1997 and December 28, 1996 (1,380) (1,380)
------------------ ------------------
Total stockholders' equity 81,712 82,685
------------------ ------------------
$ 138,409 $ 136,665
================== ==================
</TABLE>
Note: The balance sheet at December 28, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed consolidated financial statements.
- 2 -
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
( In thousands except per share amounts)
<TABLE>
For the Thirteen weeks ended
March 29, March 30,
1997 1996
------------------ -----------------
<S> <C> <C>
Net sales $ 36,148 $ 37,889
Cost of sales 26,145 25,924
------------------ -----------------
Gross profit 10,003 11,965
Selling, general and
administrative expenses 11,402 10,356
------------------ -----------------
Operating income (loss) (1,399) 1,609
Interest income 405 359
Interest expense (550) (517)
Other income (expense) (164) 750
------------------ -----------------
(309) 592
------------------ -----------------
Income (loss) before income taxes (1,708) 2,201
Income taxes (benefit) (649) 837
------------------ -----------------
Net income (loss) $ (1,059) $ 1,364
================== =================
Weighted average common
shares outstanding 7,264 7,242
Net income (loss) per common share $ (0.15) $ 0.19
</TABLE>
See notes to condensed consolidated financial statements
- 3 -
<PAGE>
BEN & JERRY'S HOMEMADE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
For the Thirteen weeks ended
March 29, March 30,
1997 1996
------------------- -------------------
<S> <C> <C>
Operating activities:
Net income (loss) $ (1,059) $ 1,364
Adjustments to reconcile net income (loss) to net
cash provided by (used for) operating activities:
Depreciation and amortization 1,939 1,634
Allowance for bad debts 53
Deferred income taxes (1,145) 1,050
Loss on disposition of assets 37 32
Changes in operating assets and liabilities:
Accounts receivable (6,951) (3,346)
Inventories 154 (2,891)
Prepaid expenses (119) (1,265)
Accounts payable and accrued expenses 2,716 3,079
Income taxes receivable 458 (156)
------------------- -----------------
Net cash used for operating activities (3,917) (499)
Investing activities:
Additions to property, plant and equipment (867) (3,160)
Proceeds from sale of assets 60
Changes in other assets (71) (28)
Increase in investments (18)
------------------- -----------------
Net cash used for investing activities (956) (3,128)
Financing activities:
Repayments of long-term debt and capital leases (193) (224)
Net proceeds from issuance of common stock 85 94
------------------- -----------------
Net cash used for financing activities (108) (130)
Effect of exchange rate changes on cash 1 (10)
------------------- -----------------
Decrease in cash and cash equivalents (4,980) (3,767)
Cash and cash equivalents at beginning of period 36,104 35,406
------------------- -----------------
Cash and cash equivalents at end of period $ 31,124 $ 31,639
=================== =================
</TABLE>
See notes to condensed consolidated financial statements
- 4 -
<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-27-1997
<PERIOD-START> DEC-29-1996
<PERIOD-END> MAR-29-1997
<CASH> 31124
<SECURITIES> 0
<RECEIVABLES> 15475
<ALLOWANCES> 0
<INVENTORY> 15211
<CURRENT-ASSETS> 70411
<PP&E> 64064
<DEPRECIATION> 0
<TOTAL-ASSETS> 138409
<CURRENT-LIABILITIES> 20725
<BONDS> 0
0
1
<COMMON> 240
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 138409
<SALES> 36148
<TOTAL-REVENUES> 0
<CGS> 26145
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 164
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 550
<INCOME-PRETAX> (1708)
<INCOME-TAX> (649)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1059)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> (.14)
</TABLE>
BEN & JERRY'S HOMEMADE, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
(In thousands except per share amounts)
Thirteen weeks ended
3/29/97 3/30/96
------------ ------------
Primary:
Average shares outstanding 7,198 7,184
Net effect of dilutive stock options -
based on the treasury stock
method using average
market price 66 58
------------ ------------
7,264 7,242
============ ============
Net Income (loss) ($1,059) $1,364
============ ============
Per share amount ($0.15) $0.19
============ ============
Fully diluted:
Average shares outstanding 7,198 7,184
Net effect of dilutive stock options -
based on the treasury stock
method using quarter-end
market price which is greater
than average price 108 69
------------ ------------
7,306 7,253
============ ============
Net Income (loss) ($1,059) $1,364
============ ============
Per share amount ($0.14) $0.19
============ ============
