SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 23, 1996
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(Date of earliest event reported)
STOKELY USA, INC.
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(Exact name of registrant as specified in its charter)
Commission File No. 0-13943
Wisconsin 39-0513230
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(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
1055 Corporate Center Drive
Oconomowoc, Wisconsin 53066
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(Address of principal executive offices) (Zip Code)
(414) 569-1800
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
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Stokely USA, Inc. issued a press release on May 23, 1996,
announcing that for the fiscal year ended March 31, 1996, the
Company reported a net loss of $28,821,000 ($2.54 per share)
versus net income of $570,000 ($.06 per share) the previous year.
The current year results include a previously announced fourth
quarter nonrecurring charge of $12,500,000 ($1.10 per share)
relating to the Company's February 1996 decision to exit the
frozen business and to concentrate on its core strength of canned
vegetables. Net sales for the year were $206,251,000 compared to
$231,422,000 last year. The decline in sales was due primarily
to a drop in frozen business sales, coupled with reduced canned
inventory availability due to reduced production in the Midwest
during the summer of 1995. The decline in net earnings was
primarily due to reduced margins and increased selling and
promotional expenses reflecting depressed market conditions.
Stokely reported a net loss of $17,831,000 ($1.57 per share)
for the fourth fiscal quarter ended March 31, 1996, including the
nonrecurring charge of $12,500,000 ($1.10 per share), compared to
a net loss of $4,139,000 ($.37 per share) in last year's fourth
quarter. Net sales for the fourth quarter were $48,794,000
versus $67,603,000 a year ago. While canned selling prices were
higher during the fourth quarter ended March 31, 1996 compared to
the fourth quarter a year ago, the decline in fourth quarter
sales is due primarily to the reduced canned inventory
availability. The decline in fourth quarter net earnings was
primarily due to lower sales volume and reduced frozen pricing.
Regarding the Company's decision to exit the frozen
business, Stokely recently announced it had reached an agreement
in principle with two third parties for the sale of two frozen
processing plants, located in the state of Washington, and
substantially all its' frozen business inventory. A third plant
representing less than 10% of total frozen capacity remains for
sale. The Company said the nonrecurring charge, the majority of
which is non-cash, will cover costs associated with the sale of
its three frozen processing plants and related inventories. As a
result of the charge relating to exiting the frozen business and
the recently completed fiscal year's operating loss, the Company
is in technical default of certain financial covenants in its two
long-term senior credit agreements and is working with those
lenders to amend the agreements.
The Company also announced that it has closed a new $70
million multi-year revolving credit facility with a commercial
lender. The new facility provides for more favorable financing
terms than the prior credit agreement and meets the Company's
current and projected seasonal working capital needs.
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Commenting on the results for fiscal 1996, Stokely USA, Inc.
President and Chief Executive Officer Stephen Theobald said,
"Operating results for fiscal 1996, while very disappointing, are
indicative of the difficult conditions that have prevailed in the
processed vegetable industry for the past two years. However,
the sale of our frozen vegetable business and the closing of a
new $70 million multi-year revolving credit facility are two very
positive recent actions we have taken. The new credit facility,
in combination with the frozen sale, will provide additional
liquidity and resources necessary to implement initiatives to
improve our core canned business. In this highly competitive
industry it is imperative that we identify every opportunity to
improve our effectiveness and efficiency. The Company believes
that continuing to aggressively focus on internal operating
improvements will strengthen our performance and competitiveness
while positioning us to better benefit from any improvement in
general market conditions within the industry."
The discussion in this Form 8-K includes certain forward-
looking statements based on current management expectations.
Factors which could cause future results to differ from these
expectations include the following: general economic conditions;
vegetable processing industry conditions and price and volume
fluctuations; competitive pressures and pricing pressures;
inventory risks; supply-related risks; demand-related risks;
third party lender actions; and results of Company-specific cost
containment and profit enhancement initiatives. Additional
factors are described in the Company's other reports filed with
the Securities and Exchange Commission.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
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Not Applicable
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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 hereunto duly authorized.
STOKELY USA, INC.
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Registrant
Date: May 30, 1996 /s/ Stephen W. Theobald
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Stephen W. Theobald
Vice Chairman
Date: May 30, 1996 /s/ Leslie J. Wilson
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Leslie J. Wilson
Vice President - Finance
(Principal Financial Officer)
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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 hereunto duly authorized.
STOKELY USA, INC.
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Registrant
Date: May 30, 1996
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Stephen W. Theobald
Vice Chairman
Date: May 30, 1996
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Leslie J. Wilson
Vice President - Finance
(Principal Financial Officer)
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