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
February 16, 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 February 16, 1996,
announcing that it has decided to sell its frozen vegetable
business operations and exit the frozen vegetable business.
Stokely has engaged Goldsmith, Agio, Helms and Company to assist
in the divestiture. Stokely has three frozen vegetable
processing plants located in Grandview, Washington; Walla Walla,
Washington; and Green Bay, Wisconsin. The Company does not
intend to be the operator of the facilities during the upcoming
processing season. Over the last four years Stokely had already
downsized its frozen vegetable operations following a period of
rapid expansion. However, as a result of the Company's ongoing
cost reduction and profit improvement initiatives and due to the
continuing depressed vegetable market conditions, it has now
decided to entirely exit the frozen vegetable side of its
business.
Commenting on the plant closures, Stokely President and CEO Vern
Wiersma stated, "Our decision to sell the frozen operation is a
result of our ongoing critical review of our business in light of
the continuing depressed nature of the processed vegetable
market. While frozen vegetable sales accounted for approximately
20% of sales during the most recent fiscal quarter, our sales are
primarily through industrial channels of distribution and we
believe the near-term pricing prospects for those channels are
poor. Market prospects, working capital needs of the frozen line
of business, and cost considerations all pointed toward the
ultimate exit decision. In eliminating the frozen business, our
future working capital needs will decrease by approximately
$40,000,000 and our overall profit margins should improve."
The Company anticipates it will incur a non-recurring
restructuring charge during the three months ending March 31,
1996, the extent of which has not yet been determined, relating
to costs associated with exiting the frozen operation.
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.
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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: February 23, 1996 /s/ Stephen W. Theobald
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Stephen W. Theobald
Vice Chairman
Date: February 23, 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: February 23, 1996
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Stephen W. Theobald
Vice Chairman
Date: February 23, 1996
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Leslie J. Wilson
Vice President - Finance
(Principal Financial Officer)
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