SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1995 Commission File Number 0-13943
------------------ -------
STOKELY USA, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
WISCONSIN 39-0513230
- ---------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1055 Corporate Center Drive, Oconomowoc, WI 53066
- --------------------------------------------------
(Address of principal executive office)
Registrant's telephone number, including area code: (414) 569-1800
--------------
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 such 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 issuer's
classes of common stock as of the latest practicable date.
Class Outstanding at November 13, 1995
- ------------------------ --------------------------------
Common Stock, 11,326,441 Shares
$.05 par value per share
Page 1<PAGE>
STOKELY USA, INC. AND SUBSIDIARIES
INDEX
PAGE NO.
--------
PART I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets - 3-4
September 30, 1995, September 30, 1994
and March 31, 1995
Consolidated Condensed Statements of 5-6
Operations - Three and Six Months Ended
September 30, 1995 and 1994
Consolidated Condensed Statements of 7
Cash Flow - Six Months Ended
September 30, 1995 and 1994
Notes to Consolidated Condensed Financial 8
Statements
Item 2. Management's Discussion and Analysis 9-16
of Financial Condition and Results
of Operations
PART II. Other Information
Item 1. Legal Proceedings 17
Item 2. Changes in Securities 17
Item 3. Default Upon Senior Securities 17
Item 4. Submission of Matters to a Vote of 18
Security Holders
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 18
Page 2<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
---------------------------------------
(Dollars in thousands)
September 30, September 30, March 31,
1995 1994 1995
(unaudited) (unaudited) (note)
------------- ------------- ---------
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 683 $ 1,178 $ 1,177
Accounts receivable, less
allowance for losses of $507,
$372 and $452, respectively 24,790 25,369 25,459
Refundable income taxes 380 380
Inventories: Finished Products 133,565 125,229 73,053
Production Supplies 6,361 4,698 6,336
Prepaid Expenses 1,473 1,354 1,825
-------- -------- --------
Total Current Assets 167,252 157,828 108,230
OTHER ASSETS 3,810 7,058 4,467
PROPERTY, PLANT & EQUIPMENT, at cost 113,381 101,720 107,381
Less accumulated depreciation 43,020 33,826 38,784
-------- -------- --------
70,361 67,894 68,597
-------- -------- --------
TOTAL ASSETS $241,423 $232,780 $181,294
======== ======== =========
See accompanying notes to consolidated condensed financial statements
(unaudited).
Note: The balance sheet at March 31, 1995 has been condensed from the
audited financial statements at that date.
Page 3<PAGE>
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
(Dollars in thousands)
September 30, September 30, March 31,
1995 1994 1995
(unaudited) (unaudited) (note)
------------- ------------- ---------
LIABILITIES & STOCKHOLDER'S EQUITY
- ----------------------------------
CURRENT LIABILITIES:
Notes payable $ 39,553 $ 35,875 $ 19,291
Accounts payable 59,547 66,701 13,454
Current maturities on long-
term debt 2,086 2,458 2,536
Other current liabilities 6,869 6,737 4,897
--------- --------- ---------
Total Current Liabilities 108,055 111,771 40,178
LONG-TERM DEBT, less current
maturities 78,025 79,871 78,497
OTHER LIABILITIES 4,371 4,740 4,241
STOCKHOLDER'S EQUITY:
Capital stock 572 422 572
Additional paid-in capital 43,683 18,665 43,683
Retained earnings 7,335 17,939 14,751
Treasury stock at cost (618) (628) (628)
--------- --------- ---------
Total Stockholder's Equity 50,972 36,398 58,378
--------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $241,423 $232,780 $181,294
========= ========= =========
See accompanying notes to consolidated condensed financial statements
(unaudited).
Note: The balance sheet at March 31, 1995 has been condensed from the
audited financial statements at that date.
Page 4<PAGE>
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Dollars in thousands except per share amounts)
(unaudited)
Three Months Ended
September 30,
1995 1994
---- ----
REVENUES:
- ---------
Net Sales $ 51,294 $ 58,313
Other 45 86
------- -------
Total Revenues 51,339 58,399
COST AND EXPENSES:
- ------------------
Cost of products sold 43,415 43,905
Selling, general & administrative expenses 9,421 7,766
Interest 2,143 2,539
------- -------
Total Cost and Expenses 54,979 54,210
EARNINGS (LOSS) BEFORE INCOME TAX (3,640) 4,189
INCOME TAXES 838
-------- -------
NET EARNINGS (LOSS) $(3,640) $ 3,351
======== =======
NET EARNINGS (LOSS) PER COMMON SHARE $ (.32) $ .40
======= =====
WEIGHTED AVERAGE SHARES OUTSTANDING 11,326,441 8,324,645
========== =========
See accompanying notes to consolidated condensed financial statements
(unaudited).
Page 5<PAGE>
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Dollars in thousands except per share amounts)
(unaudited)
Six Months Ended
September 30,
1995 1994
---- ----
REVENUES:
- ---------
Net Sales $ 91,994 $ 97,131
Other 104 99
------- -------
Total Revenues 92,098 97,230
COST AND EXPENSES:
- ------------------
Cost of products sold 78,909 74,148
Selling, general & administrative expenses 16,071 13,464
Interest 4,534 4,914
------- -------
Total Cost and Expenses 99,514 92,526
EARNINGS(LOSS) BEFORE INCOME TAX (7,416) 4,704
INCOME TAXES 946
-------- -------
NET EARNINGS (LOSS) $(7,416) $ 3,758
======== =======
NET EARNINGS (LOSS) PER COMMON SHARE $ (.65) $ .45
======= =====
WEIGHTED AVERAGE SHARES OUTSTANDING 11,326,048 8,324,645
========== =========
See accompanying notes to consolidated condensed financial statements
(unaudited).
Page 6
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Six Months Ended
September 30,
1995 1994
---- ----
Net cash used in operating activities $(14,011) $(13,523)
--------- ---------
Cash flows from investing activities:
Purchase of property, plant and equipment (6,000) (4,292)
Proceeds from disposal of property, plant
and equipment 772 555
Increase in other assets - net (605) (366)
--------- ---------
Net cash used in investing activities (5,833) (4,103)
--------- ---------
Cash flows from financing activities:
Change in short-term debt - net 20,262 17,883
Payments of long-term debt (922) (1,977)
Capital stock transactions - net 10
--------- ---------
Net cash provided by financing activities 19,350 15,906
--------- ---------
Net decrease in cash and cash equivalents (494) (1,720)
Cash and cash equivalents at beginning
of period 1,177 2,898
--------- ---------
Cash and cash equivalents at end of period $ 683 $ 1,178
========= =========
See accompanying notes to consolidated condensed financial statements
(unaudited).
Page 7<PAGE>
STOKELY USA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
1. In the opinion of management, the accompanying unaudited
consolidated condensed financial statements contain all normal and
recurring adjustments necessary to present fairly Stokely USA, Inc.'s
consolidated condensed balance sheets as of September 30, 1995 and 1994,
and March 31, 1995, the consolidated condensed statements of operations
for the three and six month periods ended September 30, 1995 and 1994,
and the consolidated condensed statements of cash flow for the six month
periods then ended.
The results of operations for the three and six months ended
September 30, 1995 are not necessarily indicative of the results to be
expected for the full year. For interim reporting purposes, certain
expenses are based on estimates rather than expenses actually incurred.
The unaudited interim consolidated condensed financial statements should
be read in conjunction with the consolidated financial statements and
notes thereto for the fiscal year ended March 31, 1995, included in the
Company's Form 10-K filed with the Securities and Exchange Commission.
The accounting policies followed by the Company are described in Note A
of the financial statements, located on Page 49 of the Company's Form
10-K for the year ended March 31, 1995.
2. Supplemental cash flow disclosures: Cash payments for interest
were $4,019,000 and $4,420,000 for the six months ended September 30,
1995 and 1994, respectively. Net refunds of income taxes were
$1,770,000 for the six months ended September 30, 1994.
Page 8<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
---------------------
The following is management's discussion and analysis of certain
significant factors which have affected the Company's operations during
the periods included in the accompanying (unaudited) consolidated
condensed statements of operations and balance sheets.
General
- -------
The Company's financial performance and growth are directly related to
certain characteristics and trends in the vegetable processing industry.
The United States vegetable processing industry is a mature industry,
with relatively modest growth. Therefore, any significant sales growth
that may be experienced by the Company likely would come at the expense
of the loss of market share by another processor, but also may occur
through efforts designed to promote increased consumption, such as
through the introduction of new or improved products or through
increased sales internationally, where the processed vegetable market is
currently growing.
The Company's net sales are affected by product availability and market
pricing. In the vegetable processing industry, product availability and
market prices tend to have an inverse relationship: market prices tend
to decrease as more product is available, whereas if less product is
available, market prices tend to increase. Product availability is a
direct result of plantings, growing conditions, crop yields and
inventories, all of which may vary from year to year. In addition,
price can be affected by the planting, inventory level and individual
pricing decisions of the three or four largest processors in the
industry. Generally, the market prices in the vegetable processing
industry tend to adjust more quickly to variations in product
availability than an individual processor can adjust its cost structure;
thus, in an oversupply situation, a processor's margins likely will
weaken, as suppliers generally are not able to adjust their cost
structure as rapidly as market prices adjust for the oversupply. The
Company typically has experienced lower margins during times of industry
oversupply. There can be no assurance the Company's margins will
improve in response to favorable market conditions or that the Company
will be able to operate profitably during depressed market conditions.
Net sales and profit margins for the three months and six months ended
September 30, 1995 were adversely affected by the depressed market
conditions which prevailed in the vegetable processing industry for most
of that period. The Company believes these market conditions were the
result of excessive industry inventories due to record crop yields from
the summer of 1994, distribution imbalances, and extremely competitive
market conditions, including aggressive pricing strategies of some
Page 9<PAGE>
industry participants. However, it appears that a combination of
reduced acreage and weather extremes during this summer's growing season
has resulted in a decline in industry production from year-ago levels as
well as a decline from planned levels. Due to reduced industry
production, the Company believes inventories should return to more
normal levels, and assuming the absence of other events such as those
which negatively impacted the market in late fiscal 1995 and earlier
fiscal 1996, should result in some improvement in market conditions and
pricing in the second half of fiscal 1996.
Page 10
RESULTS OF OPERATIONS:
Three Months Ended September 30, 1995 Compared to Three Months Ended
September 30, 1994
- ------------------
Net Sales
- ---------
Net sales decreased $7.0 million, or 12.0%, to $51.3 million for the
quarter ended September 30, 1995 compared to $58.3 million for the
quarter ended September 30, 1994. The decrease in sales is primarily
attributable to the decline in frozen vegetable sales volume.
Total canned vegetable sales increased $4.6 million, or 11.3%, to $45.3
million for the quarter ended September 30, 1995 compared to $40.7
million for the quarter ended September 30, 1994. The increase in total
canned vegetable sales was primarily the result of a $5.6 million
increase in sales volume due to higher inventory availability during the
quarter ended September 30, 1995 from a much improved growing and
harvesting season in the summer of 1994. The volume increase was
partially offset by a $1.0 million decrease in sales due to lower
average selling prices.
The decline in selling prices reflects depressed market conditions which
prevailed in the vegetable processing industry for most of the quarter
ended September 30, 1995. The Company believes these market conditions
were the result of excessive industry inventories due to record crop
yields from the summer of 1994, distribution imbalances, and extremely
competitive market conditions, including aggressive pricing strategies
of some industry participants. However, it appears that a combination
of reduced acreage and weather extremes during this summer's growing
season has resulted in a decline in industry production from year-ago
levels as well as a decline from planned levels. Due to reduced industry
production, the Company believes inventories should return to more
normal levels, and assuming the absence of other events such as those
which negatively impacted the market in late fiscal 1995 and earlier in
fiscal 1996, should result in some improvement in market conditions and
pricing in the second half of fiscal 1996.
Sales of canned private label products increased $4.2 million or 14.9%
to $32.3 million for the quarter ended September 30, 1995, compared to
$28.1 million for the quarter ended September 30, 1994. The increase in
private label sales was the result of a $5.6 million increase in sales
from higher sales volume primarily due to higher available inventory
levels, partially offset by a $1.4 million decrease in sales due to
lower average selling prices. Sales of canned brand products increased
$400,000 or 3.2%, to $13.0 million for the quarter ended September 30,
1995 compared to $12.6 million for the quarter ended September 30, 1994.
The increase in brand sales was primarily the result of a change in the
mix of sales volume toward items with a higher average selling price.
Page 11
Frozen vegetable sales declined $11.6 million, or 65.9%, to $6.0 million
for the quarter ended September 30, 1995 compared to $17.6 million for
the quarter ended September 30, 1994. The reduction in frozen sales was
due to a $10.5 million decrease in sales volume and a $1.1 million
decrease in sales due to lower average selling prices. The decline in
volume is attributable to year-ago frozen vegetable sales being heavily
weighted toward the first half of the fiscal year due to low customer
inventory levels in that period. While the timing of customer shipment
requests is always uncertain, it appears deliveries against current
frozen sales contracts will be weighted toward the fourth quarter and
perhaps the first quarter of fiscal year 1997.
Cost of Products Sold
- ---------------------
Cost of products sold decreased $500,000, or 1.1%, to $43.4 million for
the quarter ended September 30, 1995 from $43.9 million for the quarter
ended September 30, 1994. The decrease in cost of goods sold was due to
lower sales volume. Cost of products sold as a percent of sales
increased to 84.6% for the quarter ended September 30, 1995 compared to
75.3% for the quarter ended September 30, 1994. The increase of 9.3% in
cost of products sold as a percent of sales is due primarily to the
decline in selling prices. Increases in certain cost components,
including containers and corrugated packaging, also contributed to the
increase in the ratio of cost and products sold to sales.
Selling, General and Administrative Expense
- -------------------------------------------
Selling, general and administrative expense increased $1.7 million to
$9.4 million for the quarter ended September 30, 1995 from $7.7 million
for the quarter ended September 30, 1994. This increase resulted
primarily from a $2.1 million increase in selling and promotion expenses
due to the depressed market conditions prevailing in the second quarter
of fiscal 1996.
Interest Expense
- ----------------
Interest expense decreased $400,000 to $2.1 million for the quarter
ended September 30, 1995 from $2.5 million for the quarter ended
September 30, 1994. Interest expense decreased because increases in net
working capital, primarily inventories, were funded in part by the
proceeds from a November 1994 common stock offering. In addition,
interest expense was reduced by lower borrowing rates under a new
revolving credit agreement.
Net Earnings (Loss)
- -------------------
Net loss for the quarter ended September 30, 1995 was $3,640,000
compared to net income of $3,351,0000 for the quarter ended
September 30, 1994. The decline in net earnings was due primarily to
reduced margins caused by depressed selling prices.
Page 12<PAGE>
RESULTS OF OPERATIONS:
Six Months Ended September 30, 1995 Compared to Six Months Ended
September 30, 1994
- ------------------
Net Sales
- ---------
Net sales decreased $5.1 million, or 5.3%, to $92.0 million for the six
months ended September 30, 1995 compared to $97.1 million for the six
months ended September 30, 1994. The decrease in sales is primarily due
to a decline in frozen vegetable sales volume.
Total canned vegetable sales increased $9.1 million, or 13.1%, to $78.6
million for the six months ended September 30, 1995 compared to $69.5
million for the six months ended September 30, 1994. The increase in
total canned vegetable sales was primarily the result of a $13.8 million
increase in sales volume due to higher inventory availability during the
six months ended September 30, 1995 from a much improved growing and
harvesting season in the summer of 1994. The volume increase was
partially offset by a $4.7 million decrease in sales due to lower
average selling prices.
The decline in selling prices reflects the continuing depressed market
conditions which prevailed in the industry for most of the first half of
fiscal 1996. The Company believes these market conditions were the
result of excessive industry inventories due to record crop yields from
the summer of 1994, distribution imbalances, and extremely competitive
market conditions, including aggressive pricing strategies of some
industry participants. However, it appears that a combination of
reduced acreage and weather extremes during this summer's growing season
appears to have resulted in a decline in industry production from year-ago
levels as well as a decline from planned levels. Due to
industry production, the Company believes inventories should return to
more normal levels, and assuming the absence of other events such as
those which negatively impacted the market in late fiscal 1995 and
earlier fiscal 1996, should result in some improvement in market
conditions and pricing in the second half of fiscal 1996.
Sales of canned private label products increased $9.5 million or 19.2%
to $59.1 million for the six months ended September 30, 1995, compared
to $49.6 million for the six months ended September 30, 1994. The
increase in private label sales was the result of a $14.1 million
increase in sales from higher sales volume primarily due to higher
available inventory, partially offset by a $4.6 million decrease in
sales due to lower average selling prices. Sales of canned brand
products decreased $400,000 or 2.0%, to $19.5 million for the six months
ended September 30, 1995 compared to $19.9 million for the six months
ended September 30, 1994. The decrease in brand sales was primarily the
result of lower sales volume.
Page 13
Frozen vegetable sales declined $14.2 million, or 51.4%, to $13.4
million for the six months ended September 30, 1995 compared to $27.6
million for the six months ended September 30, 1994. The reduction in
frozen sales was due to a $12.1 million decrease in sales volume and a
$2.1 million decrease in sales due to lower average selling prices. The
decline in volume is attributable to year-ago frozen vegetable sales
being heavily weighted toward the first half of the fiscal year due to
low customer inventory levels in that period. While the timing of
customer shipment requests is always uncertain, it appears deliveries
against current frozen sales contracts will be weighted toward the
fourth quarter and perhaps the first quarter of fiscal year 1997.
Cost of Products Sold
- ---------------------
Cost of products sold increased $4.8 million, or 6.5%, to $78.9 million
for the six months ended September 30, 1995 from $74.1 million for the
six months ended September 30, 1994. The increase in cost of goods sold
was due to a higher mix of canned sales volume and increases in certain
cost components. Cost of products sold as a percent of sales increased
to 85.8% for the six months ended September 30, 1995 compared to 76.3%
for the six months ended September 30, 1994. The increase of 9.5% in
cost of products sold as a percent of sales is due primarily to the
decline in selling prices. Increases in certain cost components,
including containers and corrugated packaging, also contributed to the
increase in the ratio of cost of products sold to sales.
Selling, General and Administrative Expense
- -------------------------------------------
Selling, general and administrative expense increased $2.6 million to
$16.1 million for the six months ended September 30, 1995 from $13.5
million for the six months ended September 30, 1994. This increase
resulted from a $2.5 million increase in selling expense due to the
depressed market conditions prevailing in the first half of fiscal 1996.
Interest Expense
- ----------------
Interest expense decreased $400,000 to $4.5 million for the six months
ended September 30, 1995 compared to $4.9 million for the six months
ended September 30, 1994. Interest expense declined because the
increases in net working capital, primarily inventories, were funded in
part by the proceeds from a November 1994 common stock offering. In
addition, interest expense was reduced by lower borrowing rates under a
new revolving credit agreement.
Net Earnings (Loss)
- -------------------
Net loss for the six months ended September 30, 1995 was $7.4 million
compared to net income of $3.8 million for the six months ended
September 30, 1994. The decline in net earnings was due primarily to
reduced margins caused by depressed selling prices.
Page 14
FINANCIAL CONDITION AND LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------------------------------
General
- -------
Due to the seasonal production nature of the canned and frozen vegetable
processing business, the Company must maintain substantial inventories
of processed vegetables throughout the year. The working capital
requirements associated with producing and maintaining such inventories
are financed primarily through short-term borrowings and deferred
payment terms with major raw product and container suppliers.
Effective May 31, 1995, the Company entered into a new revolving credit
agreement with various lenders. The new credit facility provides for
borrowings up to $65 million. The Company believes that the new
revolving credit facility should be adequate to meet the Company's
seasonal borrowing needs. The new revolving credit agreement provides
for a lower interest rate and less restrictive financial and operating
covenants than the former agreement. Borrowings under the new revolving
credit facility were $57.6 million at September 30, 1995.
In addition to the revolving credit facility, the Company has various
long-term debt obligations, which aggregated $78.0 million at
September 30, 1995, excluding current maturities of $2.1 million.
Included in the total long-term debt obligations are two senior notes
totaling $35.4 million, various Industrial Development Revenue Bonds
totaling $26.7 million, and $18.0 million of the revolving credit notes
which are not expected to be repaid within twelve months and are
therefore classified as long-term.
Cash Flows from Operating Activities
- ------------------------------------
Cash used in operations during the six months ended September 30, 1995
totaled $14.0 million. Of the total cash used, changes in operating
assets and liabilities used cash of $11.5 million, primarily due to an
increase in inventory of $60.5 million and increases in accounts payable
and notes payable of $46.1 million and $20.3 million, respectively. The
increase of $60.5 million in inventory levels primarily reflects the
seasonal increase in inventories from the current year growing and
harvesting season. The increase in accounts payable of $46.1 million is
due to expected seasonal increases related to the summer processing
season while the increase of $20.3 million in notes payable relates to
the increase in inventories. The remaining $2.5 million of cash used in
operations reflects the net loss of $7.4 million offset by non-cash
charges to operations of $4.9 million primarily for depreciation of
property, plant and equipment.
Page 15
<PAGE>
Cash Flows from Investing Activities
- ------------------------------------
Net cash used in investing activities during the six months ended
September 30, 1995 was $5.8 million. Purchase of property, plant and
equipment was $6.0 million during the six months ended September 30,
1995 and primarily related to investment in product quality control
equipment at several processing plants and the development and
implementation of a new management information system.
Cash Flows from Financing Activities
- ------------------------------------
Cash provided by financing activities during the six months ended
September 30, 1995 totaled $19.4 million and represents primarily
increases in revolving credit obligations used to finance the seasonal
increase in inventories. At September 30, 1995 the Company had $57.6
million of borrowings under a revolving credit facility, of which $18.0
million was classified as long term and $39.6 million was classified as
short term.
Page 16<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
- ---------------------------
A lawsuit was filed on January 3, 1995, in the United States District
Court for the Eastern District of Wisconsin, against the Company, all of
the individual members of the Board of Directors of the Company, William
Blair & Company and Dain Bosworth, Inc. The plaintiff alleges he
sustained losses in connection with his purchase of shares of Common
Stock of the Company during the period from October 17, 1994, to
December 19, 1994, as a result of defendants' alleged misleading
statements and omissions to state material facts. The Company believes
the allegations are without merit or substance, and is defending the
action vigorously. Motions for dismissal have been filed by all
defendants. Such motions have been fully briefed and a decision from
the court is pending.
A second lawsuit seeking to represent class members who purchased shares
of Common Stock of the Company during the period from October 17, 1994,
to December 19, 1994, was filed on May 10, 1995, in the United States
District Court for the Eastern District of Wisconsin. This second
lawsuit makes similar claims against the Company and certain officers
arising from the same facts and events. As with the first lawsuit, the
Company believes the allegations are without merit or substance and is
defending the action vigorously.
These lawsuits were consolidated on September 22, 1995 and the complaint
filed in the first lawsuit was deemed the operative complaint
superseding the complaint filed in the second lawsuit. The motions for
dismissal remain pending in the consolidated lawsuit as does plaintiff's
motion for class certification.
In addition to the above cases, the Company also is involved in various
other legal actions and claims primarily arising in the normal course of
its business. In the opinion of management of the Company, the
liability, if any, would not have a material effect on the Company's
financial condition or results of operations.
Item 2. Changes in Securities
- -------------------------------
None.
Item 3. Defaults Upon Senior Securities
- -----------------------------------------
None.
Page 17
Item 4. Submission of Matters to a vote of Security Holders
- -------------------------------------------------------------
None
Item 5. Other Information
- ---------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
- ------------------------------------------
(a) Exhibits: Exhibit 27.1 - Financial Data Schedule
(b) Reports on Form 8-K: None
Page 18
STOKELY USA, INC.
SIGNATURES
----------
Pursuant to the requirement 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.
STOKELY USA, INC.
-------------------------
Registrant
Date November 14, 1995 /s/ Stephen W. Theobald
----------------- -------------------------
Stephen W. Theobald
Vice Chairman
Date November 14, 1995 /s/ Leslie J. Wilson
----------------- -------------------------
Leslie J. Wilson
Vice President - Finance
(Principal Financial Officer)
Page 19<PAGE>
STOKELY USA, INC.
SIGNATURES
----------
Pursuant to the requirement 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.
STOKELY USA, INC.
-------------------------
Registrant
Date November 14, 1995
----------------- -------------------------
Stephen W. Theobald
Vice Chairman
Date November 14, 1995
----------------- -------------------------
Leslie J. Wilson
Vice President - Finance
(Principal Financial Officer)
Page 20
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> SEP-30-1995
<CASH> 683
<SECURITIES> 0
<RECEIVABLES> 25297
<ALLOWANCES> 507
<INVENTORY> 139926
<CURRENT-ASSETS> 167252
<PP&E> 113381
<DEPRECIATION> 43020
<TOTAL-ASSETS> 241423
<CURRENT-LIABILITIES> 108055
<BONDS> 78025
<COMMON> 572
0
0
<OTHER-SE> 43683
<TOTAL-LIABILITY-AND-EQUITY> 241423
<SALES> 91994
<TOTAL-REVENUES> 92098
<CGS> 78909
<TOTAL-COSTS> 99514
<OTHER-EXPENSES> 16071
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4534
<INCOME-PRETAX> (7416)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7416)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7416)
<EPS-PRIMARY> (.65)
<EPS-DILUTED> (.65)
</TABLE>
