SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
[ X ] Annual report pursuant to section 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ending December 31, 1998.
OR
[ ] Transition report pursuant to section 15(d) of the Securities Exchange
Act of 1934.
Commission file number 0-19867
A. Full title of the Plan:
ESKIMO PIE CORPORATION SAVINGS PLAN
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principle executive office:
ESKIMO PIE CORPORATION
901 MOORFIELD PARK DRIVE
RICHMOND, VIRGINIA 23236
(804) 560-8400
<PAGE>
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
ESKIMO PIE CORPORATION
SAVINGS PLAN
DECEMBER 31, 1998 AND 1997
AND YEAR ENDED DECEMBER 31, 1998
WITH REPORT OF INDEPENDENT AUDITORS
<PAGE>
Eskimo Pie Corporation
Savings Plan
Financial Statements
and Supplemental Schedules
December 31, 1998 and 1997 and year ended December 31, 1998
TABLE OF CONTENTS
Report of Independent Auditors..............................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits.............................2
Statement of Changes in Net Assets Available for Benefits...................3
Notes to Financial Statements...............................................4
Supplemental Schedules
Line 27a-Schedule of Assets Held for Investment Purposes....................8
Line 27d-Schedule of Reportable Transactions................................9
<PAGE>
Report of Independent Auditors
Plan Administrator
Eskimo Pie Corporation Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the Eskimo Pie Corporation Savings Plan as of December 31, 1998 and 1997, and
the related statement of changes in net assets available for benefits for the
year ended December 31, 1998. These financial statements are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended, are presented for purpose of additional
analysis and are not a required part of the financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The Fund Information in the statement of net assets available
for benefits and the statement of changes in net assets available for benefits
is presented for purpose of additional analysis rather than to present the net
assets available for benefits and the changes in net assets available for
benefits of each fund. The supplemental schedules and Fund Information have been
subjected to auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Richmond, Virginia
June 22, 1999
<PAGE>
Eskimo Pie Corporation
Savings Plan
Statements of Net Assets Available for Benefits, With Fund Information
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
--------------------------------------------------------------------------------------------
FIRST UNION FIRST UNION EVERGREEN FIDELITY
STABLE ENHANCED SHORT- FIDELITY ADVISOR GROWTH COMPANY
GROUP TRUST STOCK MARKET INTERMEDIATE PURITAN OPPORTUNITIES STOCK
PORTFOLIO FUND BOND FUND FUND FUND FUND
---------------- -------------- --------------- ------------- ------------------ -----------
<S> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1998
ASSETS
Investments, at fair value:
Common trust funds $ 516,896 $ 905,463 $ - $ - $ - $ -
Shares of registered
investment companies - - 191,478 887,950 1,330,238 -
Common stock - - - - - 122,856
Participant loans - - - - - -
---------------- -------------- --------------- ------------- ------------------ -----------
Net assets available for benefits $ 516,896 $ 905,463 $ 191,478 $ 887,950 $ 1,330,238 $ 122,856
================ ============== =============== ============= ================== ===========
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT- NON-PARTICIPANT
DIRECTED DIRECTED
--------------- --------------
COMPANY
LOANS TO STOCK
PARTICIPANTS FUND TOTAL
-------------- -------------- -------------
<S> <C>
DECEMBER 31, 1998
ASSETS
Investments, at fair value:
Common trust funds $ - $ - $ 1,422,359
Shares of registered
investment companies - - 2,409,666
Common stock - 253,828 376,684
Participant loans 79,709 - 79,709
-------------- ------------- -------------
Net assets available for benefits $ 79,709 $ 253,828 $ 4,288,418
============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
------------------------------------------------------------------------------------------------
FIRST UNION FIRST UNION EVERGREEN FIDELITY
STABLE ENHANCED SHORT- FIDELITY ADVISOR GROWTH COMPANY
GROUP TRUST STOCK MARKET INTERMEDIATE PURITAN OPPORTUNITIES STOCK
DECEMBER 31, 1997 PORTFOLIO FUND BOND FUND FUND FUND FUND
---------------- -------------- ----------------- -------------- ----------------- ------------
<S> <C>
ASSETS
Investments, at fair value:
Common trust funds $ 511,316 $ 697,156 $ - $ - $ - $ -
Shares of registered
investment companies 160,728 838,273 1,104,655 -
Common stock - - - - - 67,846
Participant loans - - - - - -
---------------- -------------- ----------------- -------------- ----------------- ------------
Total investments 511,316 697,156 160,728 838,273 1,104,655 67,846
Receivables
Due from employer - - - - - -
Due from employees 3,497 5,162 1,826 7,749 9,706 736
LIABILITIES
Contribution refunds payable - 5,308 335 4,808 8,173 -
---------------- -------------- ----------------- -------------- ----------------- ------------
Net assets available for benefits $ 514,813 $ 697,010 $ 162,219 $ 841,214 $ 1,106,188 $ 68,582
================ ============== ================= ============== ================= ============
</TABLE>
<TABLE>
<CAPTION>
NON-PARTICIPANT
DIRECTED
-------------- -------------
COMPANY
LOANS TO STOCK
DECEMBER 31, 1997 PARTICIPANTS FUND TOTAL
------------- ------------- -------------
<S> <C>
ASSETS
Investments, at fair value:
Common trust funds $ - $ - $ 1,208,472
Shares of registered
investment companies - - 2,103,656
Common stock - $ 96,574 164,420
Participant loans 114,738 - 114,738
------------- ------------- -------------
Total investments 114,738 96,574 3,591,286
Receivables
Due from employer - 11,492 11,492
Due from employees - - 28,676
LIABILITIES
Contribution refunds payable - - 18,624
------------- ------------- -------------
Net assets available for benefits $ 114,738 $ 108,066 $ 3,612,830
============= ============= =============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
2
<PAGE>
Eskimo Pie Corporation
Savings Plan
Year ended December 31, 1998
Statement of Changes in Net Assets Available for Benefits, With Fund Information
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
--------------------------------------------------------------------------------------
FIRST UNION FIRST UNION EVERGREEN FIDELITY
STABLE ENHANCED SHORT- FIDELITY ADVISOR GROWTH
GROUP TRUST STOCK MARKET INTERMEDIATE PURITAN OPPORTUNITIES
PORTFOLIO FUND BOND FUND FUND FUND
--------------------------------------------------------------------------------------
<S> <C>
Employer contributions $ 489 $ 244 $ 244 $ 244 $ -
Employee contributions 44,624 82,292 25,982 86,172 114,560
Employee rollovers 1,951 5,186 - 7,137 17,336
Investment income - - - 272 -
--------------------------------------------------------------------------------------
47,064 87,722 26,226 93,825 131,896
Deductions and Transfers:
Withdrawals by participants (63,714) (52,443) (89,395) (169,858) (147,574)
Interfund transfers and loan originations (9,860) (24,664) 77,526 (3,015) (15,472)
Other (276) (177) (53) (188) (196)
--------------------------------------------------------------------------------------
Net appreciation in fair value
of investments 28,869 198,015 14,955 125,972 255,396
--------------------------------------------------------------------------------------
Net increase (decrease) 2,083 208,453 29,259 46,736 224,050
Net assets available for plan benefits
at beginning of year 514,813 697,010 162,219 841,214 1,106,188
--------------------------------------------------------------------------------------
Net assets available for plan benefits
at end of year $516,896 $ 905,463 $ 191,478 $ 887,950 $1,330,238
======================================================================================
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT- NON-PARTICIPANT
DIRECTED DIRECTED
------------------------------------- -----------------
COMPANY COMPANY
STOCK LOANS TO STOCK
FUND PARTICIPANTS FUND TOTAL
---------------------------------- -------------------------------
<S> <C>
Employer contributions $ - $ - $127,193 $ 128,414
Employee contributions 29,877 - - 383,507
Employee rollovers - - - 31,610
Investment income - 9,733 - 10,005
----------------------- ------------------------------------------
29,877 9,733 127,193 553,536
Deductions and Transfers:
Withdrawals by participants (107) (11,450) (12,619) (547,160)
Interfund transfers and loan originations 9,332 (33,312) (535) -
Other (33) - - (923)
----------------------- ------------------------------------------
9,192 (44,762) (13,154) (548,083)
Net appreciation in fair value
of investments 15,205 - 31,723 670,135
----------------------- ------------------------------------------
Net increase (decrease) 54,274 (35,029) 145,762 675,588
Net assets available for plan benefits
at beginning of year 68,582 114,738 108,066 3,612,830
------------------------------------------------------------------
Net assets available for plan benefits
at end of year $122,856 $ 79,709 $253,828 $ 4,288,418
==================================================================
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
Eskimo Pie Corporation
Savings Plan
Notes to Financial Statements
December 31, 1998
1. DESCRIPTION OF PLAN
The following description of the Eskimo Pie Corporation Savings Plan (the
"Plan") provides only general information. Participants should refer to the
Summary Plan Description for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a contributory defined contribution plan covering substantially all
full time employees of Eskimo Pie Corporation (the Company and Plan Sponsor),
Eskimo, Inc. and Sugar Creek Foods, Inc. who have completed one year of service
and are age twenty-one or older. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Participating employees may contribute up to 12% of their compensation as
defined in the Plan. Participant contributions can be made either pretax or
after tax. Participants may also contribute amounts representing distributions
from other qualified defined benefit or defined contribution plans. Participants
elect the investment options in which their contributions are invested. The Plan
Sponsor matches 50% of the employees' contributions for the first 6% of their
compensation and may make additional contributions to the Plan at the discretion
of the Board of Directors. The employer match is invested in the Company Stock
Fund. Other employer contributions are invested as directed by the participants.
Forfeited balances of terminated participants' nonvested accounts are used to
reduce future Company contributions. Each participant's account is credited with
the participant's contribution, the Company's contributions and a pro-rata share
of investment earnings thereon based upon the participant's elected options.
VESTING
Participants are immediately vested in their contributions and earnings thereon.
Participants are 100 percent vested in the remainder of their account after
three years of credited service.
4
<PAGE>
Eskimo Pie Corporation
Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
PAYMENT OF BENEFITS
Upon termination of service, retirement, death or hardship as defined by the
Plan, a participant may receive a lump-sum amount equal to the vested value of
his or her account, subject to Plan limitations.
INVESTMENT OPTIONS
Participants in the Plan have several investment options available to them with
respect to how their contributions are invested. A participant may direct their
contributions in 5% increments to any of the following fund options:
i.) The First Union Stable Group Trust Portfolio invests in government and
agency obligations, corporate bonds and insurance contracts.
ii.) The Evergreen Short-Intermediate Bond Fund invests in investment
grade debt securities.
iii.) The Fidelity Puritan Fund invests in bonds and U.S. and foreign
common and preferred stock.
iv.) The First Union Enhanced Stock Market Fund invests in common stocks
and futures contracts.
v.) The Fidelity Advisor Growth Opportunities Fund invests in a selection of
financial instruments, including common stocks and convertible securities.
vi.) The Company Stock Fund invests in common stock of Eskimo Pie Corporation.
Participants may change their investment options at any time.
LOANS TO PARTICIPANTS
Participants may borrow from their accounts a minimum of $1,000 up to a maximum
of $50,000 or 50% of their vested account balance, in accordance with the
Department of Labor's regulations on loans to participants. Loans bear interest
at 1% over prime and must be repaid over a period not to exceed 5 years unless
used to purchase the participant's primary residence, in which case the loan
must be repaid over a period not to exceed 10 years.
5
<PAGE>
Eskimo Pie Corporation
Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
Loans are secured by the participant's vested account balance. Loans are repaid
through payroll deduction including principal and interest. The principal
portion reduces the receivable from participants and both principal and interest
are transferred to the participant's investment options as repayments are
received.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of a Plan termination,
participants will become 100% vested in their accounts.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared under the accrual method
of accounting.
VALUATION OF INVESTMENTS
Except for participant loans, the Plan's investments are carried at fair value.
Investments in common trust funds, registered investment companies and common
stock, are reported at current unit value which is based on quoted market prices
on the last business day of the Plan year. Loans to participants are carried at
their outstanding balance, which approximates fair value. First Union National
Bank, custodian of the Plan, holds the Plan's investment assets and executes
transactions thereon.
Securities transactions are recorded as of the trade date. Interest is recorded
on the accrual basis. Dividends are recorded on the ex-dividend date.
6
<PAGE>
Eskimo Pie Corporation
Savings Plan
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
ADMINISTRATIVE EXPENSES
Administrative expenses of the Plan are paid by the Plan Sponsor.
3. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated January 27, 1994, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Sponsor has
indicated that it will take the necessary steps, if any, to maintain the Plan's
qualified status.
4. YEAR 2000 ISSUE (UNAUDITED)
The Plan Sponsor has developed a plan to modify its internal information
technology to be ready for the year 2000 and has substantially completed
converting its critical data processing systems. The project also included
determining whether third party service providers had reasonable plans in place
to become year 2000 compliant. The Plan Sponsor currently expects the remainder
of the project to be completed in 1999. The Plan Sponsor does not expect this
project to have a significant effect on Plan operations.
7
<PAGE>
SUPPLEMENTAL SCHEDULES
<PAGE>
Eskimo Pie Corporation
Savings Plan
Line 27a-Schedule of Assets Held for Investment Purposes
Employer Identification Number 54-0571720, Plan Number 001
December 31, 1998
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF CURRENT
IDENTITY OF ISSUE, BORROWER, LESSOR OR SIMILAR PARTY INTEREST, PAR OR MATURITY VALUE COST VALUE
- ------------------------------------------------------------- -------------------------------------------------- ----------------
<S> <C>
COMMON TRUST FUNDS:
* First Union Stable Group Trust Portfolio 10,046 units $ 436,054 $ 516,896
* First Union Enhanced Stock Market Fund 12,638 units 496,965 905,463
---------------- ----------------
Total Common Trust Funds 933,019 1,422,359
REGISTERED INVESTMENT COMPANIES:
* Evergreen Short-Intermediate Bond Fund 15,656 units 162,943 191,478
Fidelity Puritan Fund 28,870 units 592,068 887,950
Fidelity Advisor Growth Opportunities Fund 20,600 units 781,752 1,330,238
---------------- ----------------
Total Registered Investment Companies 1,536,763 2,409,666
COMMON STOCK:
* Company Stock Fund 30,312 units 338,177 376,684
PARTICIPANT LOANS:
Interest rates range from 8.25% to
10%; maturity dates vary with
* Loans to participants remaining terms of 1 to 10 years. - 79,709
---------------- ----------------
Total investments $2,807,959 $4,288,418
================ ================
</TABLE>
* Party-in-interest.
8
<PAGE>
Eskimo Pie Corporation
Savings Plan
Line 27d-Schedule of Reportable Transactions
Employer Identification Number 54-0571720, Plan Number 001
Year Ended December 31, 1998
<TABLE>
<CAPTION>
(A) IDENTITY OF (B) DESCRIPTION OF ASSET INCLUDING INTEREST (C) PURCHASE (D) SELLING (G) COST OF
PARTY INVOLVED RATE AND MATURITY IN CASE OF A LOAN PRICE PRICE ASSET
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Category (iii) Series of transactions in excess of 5% of plan assets
FIRST UNION NATIONAL BANK *First Union Stable Group Trust Portfolio $144,081 $ - $144,081
*First Union Stable Group Trust Portfolio - 167,370 155,865
*Evergreen Short- Intermediate Bond Fund 116,307 - 116,307
*Evergreen Short- Intermediate Bond Fund - 100,511 96,071
*First Union Enhanced Stock Market Fund 104,644 - 104,644
*First Union Enhanced Stock Market Fund - 94,353 59,853
FIDELITY INVESTMENTS Fidelity Puritan Fund 127,609 - 127,609
Fidelity Puritan Fund - 203,904 138,268
Fidelity Advisor Growth Opportunities Fund 170,070 - 170,070
Fidelity Advisor Growth Opportunities Fund - 199,937 122,055
ESKIMO PIE CORPORATION *Company Stock Fund 186,646 - 186,646
*Company Stock Fund - 21,310 23,325
</TABLE>
<TABLE>
<CAPTION>
(H) CURRENT VALUE OF
(A) IDENTITY OF ASSET ON TRANSACTION (I) NET
PARTY INVOLVED DATE GAIN/(LOSS)
- ---------------------------------------------------------------------------
<S> <C>
Category (iii) Series of
transactions in excess of 5%
of plan assets
FIRST UNION NATIONAL BANK $144,081 $ -
167,370 11,505
116,307 -
100,511 4,440
104,644 -
94,353 34,500
FIDELITY INVESTMENTS 127,609 -
203,904 65,636
170,070 -
199,937 77,882
ESKIMO PIE CORPORATION 186,646 -
21,310 (2,015)
</TABLE>
There were no category (i), (ii), or (iv) reportable transactions during 1998.
Columns (e) and (f) have not been presented as this information is not
applicable.
*Party in interest
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
ESKIMO PIE CORPORATION
SAVINGS PLAN
DATE: June 22, 1999 /s/ Thomas M. Mishoe, Jr.
---------------- ------------------------------------
Thomas M. Mishoe, Jr.
Vice President and
Chief Financial Officer
Eskimo Pie Corporation
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-24893) pertaining to the Eskimo Pie Corporation 1996 Incentive Stock
Plan, the Eskimo Pie Corporation Savings Plan and the Eskimo Pie Corporation
Employee Stock Purchase Plan of our report dated June 22, 1999, with respect to
the financial statements and schedules of the Eskimo Pie Corporation Savings
Plan included in this Annual Report (Form 11-K) for the year ended December 31,
1998.
/s/ ERNST & YOUNG LLP
-------------------------
Richmond, Virginia
June 22, 1999
