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, 1996 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, 1996
- ------------------------ --------------------------------
Common Stock, 11,357,472 Shares
$.05 par value per share
STOKELY USA, INC. AND SUBSIDIARIES
INDEX
PAGE NO.
--------
PART I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
September 30, 1996, September 30, 1995
and March 31, 1996 3-4
Consolidated Condensed Statements of
Operations - Three and Six Months Ended
September 30, 1996 and 1995 5-6
Consolidated Condensed Statements of
Cash Flows - Six Months Ended
September 30, 1996 and 1995 7
Notes to Consolidated Condensed Financial
Statements 8-9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 10-15
PART II. Other Information
Item 1. Legal Proceedings 16
Item 2. Changes in Securities 16
Item 3. Default Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of
Security Holders 17
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8-K 17
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,
1996 1995 1996
(unaudited) (unaudited) (note)
------------- ------------- ---------
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 1,880 $ 683 $ 777
Accounts receivable, less
allowance for losses of $558,
$507 and $570, respectively 16,078 24,790 16,975
Refundable income taxes 380 11
Inventories: Finished goods 105,846 133,565 78,922
Manufacturing supplies 3,933 6,361 6,482
Prepaid expenses 1,434 1,473 1,406
Property held for disposition 5,025 9,500
-------- -------- --------
Total Current Assets 134,196 167,252 114,073
OTHER ASSETS:
Property held for disposition 1,500 993
Other assets 2,001 3,810 3,154
-------- -------- --------
Total Other Assets 3,501 3,810 4,147
PROPERTY, PLANT & EQUIPMENT, at cost 71,018 113,381 91,142
Less accumulated depreciation 30,723 43,020 33,641
-------- -------- --------
40,295 70,361 57,501
-------- -------- --------
TOTAL ASSETS $177,992 $241,423 $175,721
======== ======== =========
See accompanying notes to consolidated condensed financial statements
(unaudited).
Note: The balance sheet at March 31, 1996 has been condensed from the
audited financial statements at that date.
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
(Dollars in thousands)
September 30, September 30, March 31,
1996 1995 1996
(unaudited) (unaudited) (note)
------------- ------------- ---------
LIABILITIES & STOCKHOLDER'S EQUITY
- ----------------------------------
CURRENT LIABILITIES:
Notes payable $ 19,541 $ 39,553 $ 19,887
Accounts payable 52,941 59,547 21,365
Current maturities on long-
term debt 9,650 2,086 15,150
Other current liabilities 5,776 6,869 9,253
--------- --------- ---------
87,908 108,055 65,655
Additional long-term debt
classified as current 19,245
--------- --------- ---------
Total Current Liabilities 107,153 108,055 65,655
LONG-TERM DEBT, less current
maturities 55,951 78,025 77,230
OTHER LIABILITIES 4,349 4,371 3,269
STOCKHOLDERS' EQUITY:
Capital stock 572 572 572
Additional paid-in capital 43,596 43,683 43,683
Retained earnings (33,245) 7,335 (14,070)
Cumulative translation adjustments (4)
Treasury stock at cost (380) (618) (618)
--------- --------- ---------
Total Stockholders' Equity 10,539 50,972 29,567
--------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $177,992 $241,423 $175,721
========= ========= =========
See accompanying notes to consolidated condensed financial statements
(unaudited).
Note: The balance sheet at March 31, 1996 has been condensed from the
audited financial statements at that date.
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Dollars in thousands except per share amounts)
(unaudited)
Three Months Ended
September 30,
1996 1995
---- ----
REVENUES:
- ---------
Net Sales $ 51,630 $ 51,294
Other 27 45
-------- --------
Total Revenues 51,657 51,339
COST AND EXPENSES:
- ------------------
Cost of products sold 42,845 43,415
Selling, general & administrative expenses 8,091 9,421
Nonrecurring charges 13,096
Interest 2,537 2,143
-------- --------
Total Cost and Expenses 66,569 54,979
LOSS BEFORE INCOME TAX (14,912) (3,640)
INCOME TAXES
-------- --------
NET LOSS $(14,912) $(3,640)
========= ========
NET LOSS PER COMMON SHARE $(1.31) $(.32)
======= ======
WEIGHTED AVERAGE SHARES OUTSTANDING 11,363,989 11,326,441
========== ==========
See accompanying notes to consolidated condensed financial statements
(unaudited).
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
-----------------------------------------------
(Dollars in thousands except per share amounts)
(unaudited)
Six Months Ended
September 30,
1996 1995
---- ----
REVENUES:
- ---------
Net Sales $ 93,973 $ 91,994
Other 62 104
------- -------
Total Revenues 94,035 92,098
COST AND EXPENSES:
- ------------------
Cost of products sold 80,011 78,909
Selling, general & administrative expenses 14,460 16,071
Nonrecurring charges 13,529
Interest 5,210 4,534
------- -------
Total Cost and Expenses 113,210 99,514
LOSS BEFORE INCOME TAX (19,175) (7,416)
INCOME TAXES
-------- --------
NET LOSS $(19,175) $(7,416)
========= ========
NET LOSS PER COMMON SHARE $(1.69) $(.65)
======= ======
WEIGHTED AVERAGE SHARES OUTSTANDING 11,348,233 11,326,048
========== ==========
See accompanying notes to consolidated condensed financial statements
(unaudited).
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Dollars in thousands)
(Unaudited)
Six Months Ended
September 30,
1996 1995
---- ----
Net cash from (used in) operating activities $ 1,322 $(14,011)
--------- ---------
Cash flows from investing activities:
Purchase of property, plant and equipment (1,047) (6,000)
Proceeds from disposal of property, plant
and equipment 9,215 772
Decrease (increase) in other assets - net 394 (605)
--------- ---------
Net cash provided by (used in) investing
activities 8,562 (5,833)
--------- ---------
Cash flows from financing activities:
Change in notes payable - net 2,154 20,262
Payments of long-term debt (10,034) (922)
Payment of deferred debt issuance costs (1,052)
Capital stock transactions - net 151 10
--------- ---------
Net cash (used in) provided by financing
activities (8,781) 19,350
--------- ---------
Net (increase) decrease in cash and cash
equivalents 1,103 (494)
Cash and cash equivalents at beginning
of period 777 1,177
--------- ---------
Cash and cash equivalents at end of period $ 1,880 $ 683
========= =========
See accompanying notes to consolidated condensed financial statements
(unaudited).
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, 1996 and 1995,
and March 31, 1996, the consolidated condensed statements of operations
for the three and six month periods ended September 30, 1996 and 1995,
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, 1996 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, 1996, 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 of the Company's Form 10-K for the year
ended March 31, 1996.
2. Supplemental cash flow disclosures: Cash payments for interest
were $5,236,000 and $4,019,000 for the six months ended September 30,
1996 and 1995, respectively. Net payments of income taxes were $28,000
for the six months ended September 30, 1996.
3. A nonrecurring charge of $13,529,000 was recognized during the
first six months of fiscal 1997 of which $13,096,000 was recorded during
the second quarter. The nonrecurring charge relates to the
restructuring of the Company's core canned vegetable business and the
write-off of deferred debt costs associated with the replacement of the
Company's revolving credit facility on May 21, 1996 and the amendments
made to the senior note agreements on July 25, 1996. The nonrecurring
charge includes a writedown of property, plant and equipment at two
plants which will be closed and one plant which will be downsized. The
nonrecurring charge includes a writedown for the loss on the sale of the
Company's headquarters building which is expected to be completed during
the fourth quarter of fiscal 1997 at which time the Company will
relocate its corporate headquarters to a new leased facility. The
nonrecurring charge also includes provisions for severance costs, a
writedown of certain discontinued inventory items to their estimated net
realizable values and the writedown of certain intangible assets.
An analysis of the 1997 nonrecurring charge is as follows (in
thousands):
Property, plant and equipment writedowns $9,550
Write-off of deferred debt issuance costs 829
Severance costs 1,250
Inventory writedowns 600
Write-off of intangible assets 640
Other costs 660
-------
$13,529
=======
Approximately $11,779,000 of the nonrecurring charge are non-cash
charges. Severance costs pertain to approximately 50 personnel. The
write-off of intangible assets pertains mainly to certain trademarks
which will no longer be actively marketed.
As a result of the nonrecurring charge recorded by the Company during
the quarter ended September 30, 1996, the Company is in violation of
certain financial and other covenants in most of its Industrial
Development Revenue Bonds and is currently working to amend these
covenants. These Industrial Development Revenue Bonds have been
classified as "Additional long-term debt classified as current" on the
September 30, 1996 balance sheet.
4. A nonrecurring charge of $12,500,000 was recognized in the fourth
quarter of fiscal 1996 as discussed in the Company's Annual Report on
Form 10-K. The Company utilized reserves of $5,618,000 and $8,920,000
for the three and six month periods ended September 30, 1996,
respectively, leaving a balance of $2,636,000 at September 30, 1996.
Reserves were utilized in connection with the sale of inventory,
severance payments and other miscellaneous costs.
<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.
The discussion in this Form 10-Q includes 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.
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 a 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.
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.
<PAGE>
RESULTS OF OPERATIONS:
Three Months Ended September 30, 1996 Compared to Three Months Ended
September 30, 1995
Net Sales
Net sales increased $.3 million, or .6%, to $51.6 million for the
quarter ended September 30, 1996 compared to $51.3 million for the
quarter ended September 30, 1995. The increase in sales was due to a
$4.6 million increase in frozen sales as a result of the liquidation of
frozen inventory in conjunction with the Company's exit from the frozen
business. The remaining frozen inventory of approximately $5.5 million
at September 30, 1996 is scheduled to be sold during the third quarter
of fiscal 1997.
Total canned vegetable sales decreased $4.3 million, or 9.5%, to $41.0
million for the quarter ended September 30, 1996 compared to $45.3
million for the quarter ended September 30, 1995. The decrease in total
canned vegetable sales was the result of an $8.3 million decrease in
sales volume offset in part by a $4.0 million increase in average
selling prices. The increase in average selling prices is the result of
improved market pricing within the food processing industry. The
decline in sales volume was caused primarily by lower available
inventory caused by weather related delays in this summer's production.
Also contributing to the lower canned sales volume and improved average
selling prices were the Company's actions to increase prices in certain
markets and exit others to improve operating results.
Cost of Products Sold
Cost of products sold decreased $.6 million, or 1.4%, to $42.8 million
for the quarter ended September 30, 1996 compared to $43.4 million for
the quarter ended September 30, 1995. The decrease in cost of goods
sold was due primarily to lower sales volume. Cost of products sold as
a percent of sales was 82.9% for the quarter ended September 30, 1996
compared to 84.6% for the quarter ended September 30, 1995. The
decrease of 1.7% in cost of products sold as a percent of sales is due
primarily to the improved average selling prices for canned vegetable
sales.
Selling, General and Administrative Expense
Selling, general and administrative expense decreased $1.3 million to
$8.1 million for the quarter ended September 30, 1996 compared to $9.4
million for the quarter ended September 30, 1995. This decrease is
primarily the result of reduced selling expenses associated with the
decrease in canned vegetable sales and cost reduction initiatives taken
in fiscal 1996.
<PAGE>
Nonrecurring Charge
On September 10, 1996 the Company announced a major restructuring of its
core canned vegetable business. This action was designed to
substantially improve operating margins in the Company's core canned
vegetable business in order to achieve consistently profitable operating
results. The margin improvement initiatives will be implemented through
a combination of customer value analysis, production consolidation and
related reductions in general and administrative areas. Five of the
Company's nine processing facilities will be affected by the
consolidation moves with two being closed, two expanded and one down-
sized. The consolidation moves will increase efficiency while new
state-of-the-art equipment in the expanded facilities will further
enhance product quality.
The Company recorded a nonrecurring charge of $13.1 million in the
quarter ended September 30, 1996 in connection with this restructuring.
See Note 3 of Notes to Consolidated Financial Statements.
Interest Expense
Interest expense increased $0.4 million to $2.5 million for the quarter
ended September 30, 1996 from $2.1 million for the quarter ended
September 30, 1995 due to higher average borrowing levels and higher
interest rates on the Company's senior notes.
Net Loss
The net loss for the quarter ended September 30, 1996 was $14.9 million
compared to a net loss of $3.6 million for the quarter ended
September 30, 1995. The larger net loss was due to the nonrecurring
charge of $13.1 million. Excluding the nonrecurring charge, results for
the quarter ended September 30, 1996 improved $1.8 million compared to
the quarter ended September 30, 1995 due primarily to improved selling
prices for canned vegetable sales.
<PAGE>
RESULTS OF OPERATIONS:
Six Months Ended September 30, 1996 Compared to Six Months Ended
September 30, 1995
Net Sales
Net sales increased $2.0 million, or 2.2%, to $94.0 million for the six
months ended September 30, 1996 compared to $92.0 million for the six
months ended September 30, 1995. The increase in sales was due to a
$8.5 million increase in frozen sales as a result of the liquidation of
frozen inventory in conjunction with the Company's exit from the frozen
business. The remaining frozen inventory of approximately $5.5 million
at September 30, 1996 is scheduled to be sold during the third quarter
of fiscal 1997.
Total canned vegetable sales decreased $6.5 million, or 8.3%, to $72.1
million for the six months ended September 30, 1996 compared to $78.6
million for the six months ended September 30, 1995. The decrease in
total canned vegetable sales was the result of a $11.9 million decrease
in sales volume, offset in part by a $5.4 million increase in average
selling prices. The increase in average selling prices is the result of
improved market pricing within the food processing industry. The
decline in sales volume was caused primarily by lower available
inventory caused by weather related delays in this summer's production.
Also contributing to the lower canned sales volume and improved average
selling prices were the Company's actions to increase prices in certain
markets and exit others to improve operating results.
Cost of Products Sold
Cost of products sold increased $1.1 million, or 1.4%, to $80.0 million
for the six months ended September 30, 1996 from $78.9 million for the
six months ended September 30, 1995. The increase in cost of goods sold
was due primarily to higher frozen sales volume. Cost of products sold
as a percent of sales decreased to 85.1% for the six months ended
September 30, 1996 compared to 85.8% for the six months ended
September 30, 1995. The decrease of .7% in cost of products sold as a
percent of sales is due primarily to the improvement in average selling
prices associated with canned vegetable sales.
Selling, General and Administrative Expense
Selling, general and administrative expense decreased $1.6 million to
$14.5 million for the six months ended September 30, 1996 from $16.1
million for the six months ended September 30, 1995. This decrease is
primarily the result of reduced selling expenses associated with the
decrease in canned vegetable sales and cost reduction initiatives taken
in fiscal 1996.
<PAGE>
Nonrecurring Charge
On September 10, 1996 the Company announced a major restructuring of its
core canned vegetable business. This action was designed to
substantially improve operating margins in the Company's core canned
vegetable business in order to achieve consistently profitable operating
results. The margin improvement initiatives will be implemented through
a combination of customer value analysis, production consolidation and
related reductions in general and administrative areas. Five of the
Company's nine processing facilities will be affected by the
consolidation moves with two being closed, two expanded and one down-
sized. The consolidation moves will increase efficiency while new
state-of-the-art equipment in the expanded facilities will further
enhance product quality.
The Company recorded a nonrecurring charge of $13.1 million in the
quarter ended September 30, 1996 in connection with this restructuring.
See Note 3 of Notes to Consolidated Financial Statements.
Interest Expense
Interest expense increased $.7 million to $5.2 million for the six
months ended September 30, 1996 from $4.5 million for the six months
ended September 30, 1995 due to higher average borrowing levels and
higher interest rates on the Company's senior notes.
Net Loss
The net loss for the six months ended September 30, 1996 was $19.2
million compared to a net loss of $7.4 million for the six months ended
September 30, 1995. The larger net loss was due to the nonrecurring
charge of $13.5 million. Excluding the nonrecurring charge, results for
the six months ended September 30, 1996 improved $1.7 million compared
to the six months ended September 30, 1995 due primarily to improved
selling prices for canned vegetable sales.
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.
<PAGE>
Cash Flows from Operating Activities
Cash flow provided from operations during the six months ended
September 30, 1996 totaled $1.3 million. Of the total cash provided,
changes in operating assets and liabilities provided cash of $5.7
million, primarily due to increases in accounts payable of $31.6 million
partially offset by increases in inventories of $24.4 million. The
increases in accounts payable and inventories reflect the seasonal
increases resulting from the current year growing and harvesting season.
Cash Flows from Investing Activities
Net cash provided by investing activities during the six months ended
September 30, 1996 was $8.6 million. The sale of assets formerly used
in the frozen business provided proceeds of $9.2 million. Purchases of
property, plant and equipment totalled $1.0 million during the six
months ended September 30, 1996.
Cash Flows from Financing Activities
Cash used in financing activities during the six months ended
September 30, 1996 totaled $8.8 million, and represents primarily
decreases in the Company's senior notes as proceeds from the sale of
assets formerly used in the frozen business were applied to the senior
notes. At September 30, 1996 the Company had $55.0 million of
borrowings under its revolving credit facility, of which $35.5 million
was classified as long term and $19.5 million was classified as short
term. As a result of the nonrecurring charge recorded by the Company
during the quarter ended September 30, 1996, the Company is in violation
of certain financial and other covenants in most of its Industrial
Development Revenue Bonds and is currently working to amend these
covenants. These Industrial Development Revenue Bonds have been
classified as "Additional long-term debt classified as current" on the
September 30, 1996 balance sheet.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
A class action 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
alleged that 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. 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. The second
lawsuit made similar claims against the Company and certain officers
arising from the same facts and events. 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 plaintiff in the second lawsuit has
since elected to withdraw as a plaintiff in the consolidated lawsuit.
On March 31, 1996, the United States District Court issued a decision
dismissing the consolidated lawsuit. The plaintiff has filed a motion
to alter or amend the judgment of dismissal which is pending a decision.
The Company has opposed this motion and believes that the dismissal was
proper.
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>
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of the Company was held on
September 12, 1996 for the purpose of electing two directors. Proxies
for the meeting were solicited pursuant to Section 14(a) of the
Securities Exchange Act of 1934, as amended, and there was no
solicitation in opposition to the Board of Directors' solicitation.
Both of the Company's nominees were elected, each receiving the vote
indicated below:
Charles J. Carey
For 9,038,561
Withheld 811,118
Abstain 0
Broker Non Vote 0
Frank J. Pelisek
For 9,549,762
Withheld 299,917
Abstain 0
Broker Non Vote 0
The terms of office for directors Bradley, DeWees, Knox and Mount expire
in 1997 and the terms of office for directors Britt, Fish and Theobald
expire in 1998.
Item 5. Other Information
As a result of the nonrecurring charge recorded by the Company during
the quarter ended September 30, 1996, the Company is in violation of
certain financial and other covenants in most of its Industrial
Development Revenue Bonds and is currently working to amend these
covenants. As of the date of the filing of this Form 10-Q, however, the
Company was not in default under the terms of the governing documents
for the Industrial Development Revenue Bonds.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27.1 - Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a report on Form 8-K dated July 25, 1996
regarding the completion of the sale of substantially all of the
Company's frozen business assets.
The Company filed a report on Form 8-K dated September 10, 1996
regarding an announcement to undertake a major restructuring of its
core canned vegetable business.
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 13, 1996 /s/ Stephen W. Theobald
Stephen W. Theobald
President and Chief Executive Officer
Date November 13, 1996 /s/ Leslie J. Wilson
Leslie J. Wilson
Vice President - Finance
(Principal Financial Officer)
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 13, 1996
Stephen W. Theobald
President and Chief Executive Officer
Date November 13, 1996
Leslie J. Wilson
Vice President - Finance
(Principal Financial Officer)
<PAGE>
Exhibit 27.1
Period Type 6 Months
Period Year End March 31, 1997
Period End September 30, 1996
Cash 1,880
Securities 0
Receivables 17,336
Allowances 1,258
Inventory 109,779
Current Assets 134,196
PP&E 71,018
Depreciation 30,723
Total Assets 177,992
Current Liabilities 107,153
Bonds 78,025
Common 572
Preferred Mandatory 0
Preferred 0
Other Stockholders Equity 9,967
Total Liability and Equity 177,992
Sales 93,973
Total Revenues 94,035
Cost of Goods Sold 80,011
Total Costs 80,011
Other Expenses 13,529
Loss Provision 0
Interest Expense 5,210
Income Pretax (19,175)
Income Tax Expense 0
Incoming Continuing Operations (19,175)
Discontinued Operation 0
Extraordinary Items 0
Changes 0
Net Income (19,175)
EPS - Primary (1.69)
EPS - Diluted (1.69)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
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