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 December 31, 1996 Commission File Number 0-13943
----------------- -------
STOKELY USA, INC.
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(Exact name of registrant as specified in its charter)
WISCONSIN 39-0513230
- ---------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1230 Corporate Center Drive, Oconomowoc, WI 53066
- --------------------------------------------------
(Address of principal executive office)
Registrant's telephone number, including area code: (414) 569-1800
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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 February 13, 1997
- ------------------------ --------------------------------
Common Stock, 11,372,570 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 -
December 31, 1996, December 31, 1995
and March 31, 1996 3-4
Consolidated Condensed Statements of
Operations - Three and Nine Months Ended
December 31, 1996 and 1995 5-6
Consolidated Condensed Statements of
Cash Flows - Nine Months Ended
December 31, 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)
December 31, December 31, March 31,
1996 1995 1996
(unaudited) (unaudited) (note)
------------ ------------ ---------
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 1,430 $ 747 $ 777
Accounts receivable, less
allowance for losses of $508,
$541 and $570, respectively 13,596 23,033 16,975
Refundable income taxes 289 11
Inventories: Finished goods 86,721 112,340 78,922
Manufacturing supplies 3,176 7,186 6,482
Prepaid expenses 825 2,520 1,406
Property held for disposition 4,846 9,500
-------- -------- --------
Total Current Assets 110,594 146,115 114,073
OTHER ASSETS:
Property held for disposition 1,495 993
Other assets 2,231 3,184 3,154
-------- -------- --------
Total Other Assets 3,726 3,184 4,147
PROPERTY, PLANT & EQUIPMENT, at cost 71,987 114,073 91,142
Less accumulated depreciation 32,070 45,114 33,641
-------- -------- --------
39,917 68,959 57,501
-------- -------- --------
TOTAL ASSETS $154,237 $218,258 $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)
December 31, December 31, March 31,
1996 1995 1996
(unaudited) (unaudited) (note)
------------ ------------ ---------
LIABILITIES & STOCKHOLDERS' EQUITY
- ----------------------------------
CURRENT LIABILITIES:
Notes payable $ 19,533 $ 44,097 $ 19,887
Accounts payable 32,465 39,707 21,365
Current maturities on long-
term debt 5,650 2,334 15,150
Other current liabilities 2,975 4,595 9,253
--------- --------- ---------
60,623 90,733 65,655
Additional long-term debt
classified as current 23,245
--------- --------- ---------
Total Current Liabilities 83,868 90,733 65,655
LONG-TERM DEBT, less current
maturities 54,626 75,766 77,230
OTHER LIABILITIES 4,525 4,362 3,269
STOCKHOLDERS' EQUITY:
Capital stock 572 572 572
Additional paid-in capital 43,596 43,683 43,683
Retained earnings (32,555) 3,760 (14,070)
Cumulative translation adjustments (15)
Treasury stock at cost (380) (618) (618)
--------- --------- ---------
Total Stockholders' Equity 11,218 47,397 29,567
--------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $154,237 $218,258 $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
December 31,
1996 1995
---- ----
REVENUES:
- ---------
Net Sales $55,342 $65,463
Other 13 118
-------- --------
Total Revenues 55,355 65,581
COST AND EXPENSES:
- ------------------
Cost of products sold 44,147 54,891
Selling, general & administrative expenses 7,555 11,508
Interest 2,963 2,756
-------- --------
Total Cost and Expenses 54,665 69,155
INCOME (LOSS) BEFORE INCOME TAX 690 (3,574)
INCOME TAXES
-------- --------
NET INCOME (LOSS) $ 690 $(3,574)
======== ========
NET INCOME (LOSS) PER COMMON SHARE $ .06 $(.32)
====== ======
WEIGHTED AVERAGE SHARES OUTSTANDING 11,372,570 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)
Nine Months Ended
December 31,
1996 1995
---- ----
REVENUES:
- ---------
Net Sales $149,315 $157,457
Other 74 222
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Total Revenues 149,389 157,679
COST AND EXPENSES:
- ------------------
Cost of products sold 124,157 133,800
Selling, general & administrative expenses 22,014 27,579
Nonrecurring charges 13,529
Interest 8,174 7,290
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Total Cost and Expenses 167,874 168,669
LOSS BEFORE INCOME TAX (18,485) (10,990)
INCOME TAXES
-------- --------
NET LOSS $(18,485) $(10,990)
========= =========
NET LOSS PER COMMON SHARE $(1.63) $(.97)
======= ======
WEIGHTED AVERAGE SHARES OUTSTANDING 11,356,375 11,326,180
========== ==========
See accompanying notes to consolidated condensed financial statements
(unaudited).
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Dollars in thousands)
(Unaudited)
Nine Months Ended
December 31,
1996 1995
---- ----
Net cash from (used in) operating activities $ 3,400 $(16,407)
--------- ---------
Cash flows from investing activities:
Purchase of property, plant and equipment (2,023) (6,692)
Proceeds from disposal of property, plant
and equipment 9,394 1,660
(Increase) decrease in other assets - net 21 (112)
--------- ---------
Net cash provided by (used in) investing
activities 7,392 (5,144)
--------- ---------
Cash flows from financing activities:
Change in notes payable - net 2,146 24,806
Payments of long-term debt (11,359) (2,933)
Payment of deferred debt issuance costs (1,077) (762)
Capital stock transactions - net 151 10
--------- ---------
Net cash (used in) provided by financing
activities (10,139) 21,121
--------- ---------
Net increase (decrease) in cash and cash
equivalents 653 (430)
Cash and cash equivalents at beginning
of period 777 1,177
--------- ---------
Cash and cash equivalents at end of period $ 1,430 $ 747
========= =========
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 December 31, 1996 and 1995,
and March 31, 1996, the consolidated condensed statements of operations
for the three and nine month periods ended December 31, 1996 and 1995,
and the consolidated condensed statements of cash flow for the nine
month periods then ended.
The results of operations for the three and nine months ended
December 31, 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 $7,733,000 and $6,737,000 for the nine months ended December 31,
1996 and 1995, respectively. Net payments (refunds) of income taxes
were $29,000 and $(91,000) for the nine months ended December 31, 1996
and 1995, respectively.
3. A nonrecurring charge of $13,529,000 was recognized during the
first six months of fiscal 1997. 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 two plants which will be downsized. The
nonrecurring charge includes a writedown for the loss on the sale of the
Company's headquarters building which was completed during the fourth
quarter of fiscal 1997 at which time the Company relocated 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.
<PAGE>
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.
The Company utilized reserves of $719,000 for the three months ended
December 31, 1996 in connection with severance payments, costs incurred
to sell equipment and other miscellaneous costs.
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. These Industrial Development Revenue Bonds
have been classified as "Additional long-term debt classified as current"
on the December 31, 1996 balance sheet. The Company has obtained the
required consents from the bondholders of all affected issues to amend
the covenants such that the Company will be in compliance. The
amendments are currently in the documentation process.
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 $2,636,000 and $11,556,000
for the three and nine month periods ended December 31, 1996,
respectively. There were no significant reserve balances remaining nor
future charges anticipated in connection with this nonrecurring charge
as of December 31, 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 December 31, 1996 Compared to Three Months Ended
December 31, 1995
Net Sales
Net sales decreased $10.2 million, or 15.6%, to $55.3 million for the
quarter ended December 31, 1996 compared to $65.5 million for the
quarter ended December 31, 1995. The decrease in sales was due in part
to a $6.3 million decrease in frozen sales as a result of the continued
liquidation during the quarter ended December 31, 1996 of essentially
all the remaining frozen inventory as the Company proceeded with its
previously announced exit from the frozen vegetable business.
Total canned vegetable sales decreased $3.9 million, or 7.2%, to $50.4
million for the quarter ended December 31, 1996 compared to $54.3
million for the quarter ended December 31, 1995. The decrease in total
canned vegetable sales was the result of an $6.4 million decrease in
sales volume offset in part by a $2.5 million increase in average
selling prices. The increase in average selling prices is the result of
improved market pricing within the canned vegetable processing industry.
The decrease in canned sales volume appears to be the result of lower
trade promotion activity at the retail level and thus lower category
consumption than experienced historically. Trade promotion activity did
return to historical levels later in the third quarter. The decline in
promotion activity is likely the result of trade concerns regarding
lower available inventory and higher pricing caused by weather related
delays in last summer's production.
Cost of Products Sold
Cost of products sold decreased $10.8 million, or 19.7%, to $44.1
million for the quarter ended December 31, 1996 compared to $54.9
million for the quarter ended December 31, 1995. The decrease in cost
of products sold was due primarily to lower sales volume. Cost of
products sold as a percent of sales was 79.8% for the quarter ended
December 31, 1996 compared to 83.8% for the quarter ended December 31,
1995. The decrease of 4.0% in cost of products sold as a percent of
sales is due primarily to the improved average selling prices for canned
vegetable sales. Lower selling prices associated with the liquidation
of the frozen vegetable inventory partially offset the improved average
selling prices for canned vegetable sales.
Selling, General and Administrative Expense
Selling, general and administrative expense decreased $3.9 million to
$7.6 million for the quarter ended December 31, 1996 compared to $11.5
million for the quarter ended December 31, 1995. This decrease is
primarily the result of reduced selling expenses associated with the
decrease in canned vegetable sales and cost reduction initiatives taken
as part of the Company's restructurings in fiscal 1996 and fiscal 1997.
Interest Expense
Interest expense increased $0.2 million to $3.0 million for the quarter
ended December 31, 1996 from $2.8 million for the quarter ended
December 31, 1995 due to slightly higher interest rates on the Company's
revolving credit facility.
Net Income
Net income for the quarter ended December 31, 1996 was $.7 million
compared to a net loss of $3.6 million for the quarter ended
December 31, 1995. Results for the quarter ended December 31, 1996
improved $4.3 million compared to the quarter ended December 31, 1995
due primarily to improved selling prices for canned vegetable sales and
to a lesser extent, cost reduction initiatives taken as part of the
Company's restructurings in fiscal 1996 and fiscal 1997.
As the Company continues to implement its restructuring initiatives, it
will continue to be vulnerable to adverse changes in the processed
vegetable markets. Selling prices for canned vegetable sales declined
in the later part of the third quarter.<PAGE>
RESULTS OF OPERATIONS:
Nine Months Ended December 31, 1996 Compared to Nine Months Ended
December 31, 1995
Net Sales
Net sales decreased $8.2 million, or 5.2%, to $149.3 million for the
nine months ended December 31, 1996 compared to $157.5 million for the
nine months ended December 31, 1995. Frozen sales increased $2.2
million due to the liquidation of the majority of the frozen inventory
prior to the quarter ended December 31, 1996 in conjunction with the
Company's exit from the frozen vegetable business.
Total canned vegetable sales decreased $10.4 million, or 7.8%, to $122.5
million for the nine months ended December 31, 1996 compared to $132.9
million for the nine months ended December 31, 1995. The decrease in
total canned vegetable sales was the result of a $18.2 million decrease
in sales volume, offset in part by a $7.8 million increase in average
selling prices. The increase in average selling prices is the result of
improved market pricing within the canned vegetable processing industry.
Prior to the Company's third quarter, the decline in sales volume was
caused primarily by lower available inventory caused by weather related
delays in last summer's production. In the quarter ended December 31,
1996 the decrease in canned sales volume appears to be the result of
lower trade promotion activity at the retail level and thus lower
category consumption than experienced historically. Trade promotion
activity did return to historical levels later in the third quarter.
The decline in promotion activity is likely the result of concerns
regarding lower available inventory and higher pricing caused by weather
related delays in last 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 $9.6 million, or 7.2%, to $124.2 million
for the nine months ended December 31, 1996 from $133.8 million for the
nine months ended December 31, 1995. The decrease in cost of products
sold was due primarily to lower sales volume. Cost of products sold as
a percent of sales decreased to 83.2% for the nine months ended
December 31, 1996 compared to 85.0% for the nine months ended
December 31, 1995. The decrease of 1.8% 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. Lower selling prices
associated with the liquidation of the frozen vegetable inventory
partially offset the improved selling prices for canned vegetable sales.
<PAGE>
Selling, General and Administrative Expense
Selling, general and administrative expense decreased $5.6 million to
$22.0 million for the nine months ended December 31, 1996 from $27.6
million for the nine months ended December 31, 1995. This decrease is
primarily the result of reduced selling expenses associated with the
decrease in canned vegetable sales and cost reduction initiatives taken
as part of the Company's restructurings in fiscal 1996 and fiscal 1997.
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. Six of the
Company's nine processing facilities will be affected by the
consolidation moves with two being closed, two expanded and two 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 $13.5 million in the nine
months ended December 31, 1996 in connection with this restructuring.
See Note 3 of Notes to Consolidated Condensed Financial Statements.
Interest Expense
Interest expense increased $.9 million to $8.2 million for the nine
months ended December 31, 1996 from $7.3 million for the nine months
ended December 31, 1995 due to higher average borrowing levels and
higher interest rates on the Company's senior notes.
Net Loss
The net loss for the nine months ended December 31, 1996 was $18.5
million compared to a net loss of $11.0 million for the nine months
ended December 31, 1995. The larger net loss was due to the
nonrecurring charge of $13.5 million. Excluding the nonrecurring
charge, results for the nine months ended December 31, 1996 improved
$6.0 million compared to the nine months ended December 31, 1995 due
primarily to improved selling prices for canned vegetable sales and to a
lesser extent, cost reduction initiatives taken as part of the Company's
restructurings in fiscal 1996 and fiscal 1997.
As the Company continues to implement its restructuring initiatives, it
will continue to be vulnerable to adverse changes in the processed
vegetable markets. Selling prices for canned vegetables declined in the
later part of the third quarter.
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.
Cash Flows from Operating Activities
Cash flow provided from operations during the nine months ended
December 31, 1996 totaled $3.4 million. Of the total cash provided,
changes in operating assets and liabilities provided cash of $5.5
million, primarily due to increases in accounts payable of $11.1 million
partially offset by increases in inventories of $4.5 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 nine months ended
December 31, 1996 was $7.4 million. The sale of assets formerly used in
the frozen business provided proceeds of $9.4 million. Purchases of
property, plant and equipment totalled $2.0 million during the nine
months ended December 31, 1996.
Cash Flows from Financing Activities
Cash used in financing activities during the nine months ended
December 31, 1996 totaled $10.1 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 pay down the
principal balance on these senior notes. At December 31, 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.
Accordingly, these Industrial Development Revenue Bonds have been
classified as "Additional long-term debt classified as current" on the
December 31, 1996 balance sheet. The Company has obtained the required
consents from the bondholders of all affected issues to amend the
covenants such that the Company will be in compliance. The amendments
are currently in the documentation process.<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
None
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. The Company has obtained the required
consents from the bondholders of all affected issues to amend the
covenants such that the Company will be in compliance. The amendments
are currently in the documentation process. 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.
In December 1996, Peter P. Caputa, who has been the Company's controller
since January 1996, assumed additional responsibilities as the Company's
Chief Financial Officer.
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>
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 February 13, 1997 /s/ Stephen W. Theobald
Stephen W. Theobald
President and Chief Executive Officer
Date February 13, 1997 /s/ Peter P. Caputa
Peter P. Caputa
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 February 13, 1997
Stephen W. Theobald
President and Chief Executive Officer
Date February 13, 1997
Peter P. Caputa
Vice President - Finance
(Principal Financial Officer)
<PAGE>
Exhibit 27.1
Period Type 9 Months
Period Year End March 31, 1997
Period End December 31, 1996
Cash 1,430
Securities 0
Receivables 14,104
Allowances 508
Inventory 89,897
Current Assets 110,594
PP&E 71,987
Depreciation 32,070
Total Assets 154,237
Current Liabilities 83,868
Bonds 54,626
Common 572
Preferred Mandatory 0
Preferred 0
Other Stockholders Equity 10,646
Total Liability and Equity 154,237
Sales 149,315
Total Revenues 149,389
Cost of Goods Sold 124,157
Total Costs 124,157
Other Expenses 13,529
Loss Provision 0
Interest Expense 8,174
Income Pretax (18,485)
Income Tax Expense 0
Incoming Continuing Operations (18,485)
Discontinued Operation 0
Extraordinary Items 0
Changes 0
Net Income (18,485)
EPS - Primary (1.63)
EPS - Diluted (1.63)
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<ARTICLE> 5
<S> <C>
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