UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
April 16, 1999
Eskimo Pie Corporation
(Exact Name of Registrant as specified in its Charter)
Virginia 0-19867 54-0571720
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
901 Moorefield Park Drive
Richmond, Virginia 23236
(804) 560-8400
(Address, including zip code, and telephone number,
including area code, or registrant's
principal executive offices)
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Item 5. Other Events.
On April 16, 1999, Eskimo Pie Corporation (the "Company") issued
the press release attached hereto as Exhibit 99.1 and incorporated herein by
reference.
Item 7. Financial Statements and Exhibits.
(a) None
(b) Exhibits
Exhibit 99.1 Press Release dated April 16, 1999
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.
ESKIMO PIE CORPORATION
Date: April 16, 1999 By: /s/ Thomas M. Mishoe, Jr.
----------------------------------
Thomas M. Mishoe, Jr.
Chief Financial Officer,
Vice President, Secretary and
Treasurer
Exhibit 99.1
NEWS FROM:
ESKIMO PIE CORPORATION
901 Moorefield Park Drive Contact: William T. Berry, Jr.
Richmond, Virginia 23236 Telephone: (804)-560-8490
FOR IMMEDIATE RELEASE: APRIL 16, 1999
ESKIMO PIE CORPORATION REPORTS IMPROVED 1ST QUARTER RESULTS POSTPONES
ANNUAL MEETING
Richmond, Virginia (NASDAQ NNM: EPIE) - Eskimo Pie Corporation today
reported consolidated net income of $232,000 or $0.07 per share for the quarter
ended March 31, 1999 on sales of $16.1 million. The 1999 results compare with
net income of $201,000 or $0.06 per share for the comparable period in 1998 on
sales of $16.0 million.
The 1999 results include restructuring charges of approximately
$314,000 which, after related tax effects, reduced net income by $198,000 or
$0.06 per share. Approximately $104,000 of these charges relate to the
discontinuance of certain manufacturing operations in the Company's Packaging
division, the execution of which is consistent with the Company's recently
announced growth and restructuring plan. The remaining $210,000 of restructuring
costs, reflect expenses incurred to date in connection with the previously
announced consideration of strategic alternatives. Exclusive of the
restructuring charges, net income would have been $430,000 ($0.12 per share) or
double the 1998 results.
In response to the first quarter results, Arnold H. Dreyfuss, the
Company's Chairman of the Board, stated that "The Board is pleased to see the
continued improvement in operating results. Exclusive of the restructuring
charges, operating income almost doubled and sales increased for the third
quarter in a row. These most recent results reflect well on management's
abilities and support the Board's recent decision to implement an aggressive
corporate growth and restructuring plan focused on the core Eskimo Pie brand
within the Company's licensing and foodservice businesses."
David B. Kewer, the Company's President and Chief Executive Officer,
added "We are especially pleased to report that the sales of Eskimo Pie brand
products within the licensing and foodservice businesses increased by almost 10%
during the first quarter. These increases offset declines in other licensed
brand products and led to an overall improvement in the Company's consolidated
gross margin. The increased advertising and sales promotion expense reflects the
Company's previously announced plans to reinvest in the Company's core Eskimo
Pie brand products. Management's continued efforts to control spending led to
additional general and administrative savings as well."
Mr. Kewer continued, "The improved operating results are also
significant given management's involvement with the strategic planning process
completed during the first quarter. Now that a decision has been made regarding
the Company's future, management can now move forward to fully execute the
growth and restructuring program which was deferred during the strategic
planning process. We believe that the improvements seen in recent quarters
provide credible evidence that we can succeed with our focused growth plans."
The Company also announced that its Board of Directors has postponed
the Annual Meeting of Shareholders previously scheduled for May 12, 1999. Mr.
Dreyfuss stated that the postponement was the result of ongoing discussions with
Yogen Fruz World-Wide Incorporated concerning certain shareholder proposals it
was considering for the meeting. Dreyfuss added that the decision to delay the
meeting was one with which Yogen Fruz, the Company's largest single shareholder,
concurred. The postponement will provide both the Company and Yogen Fruz
additional time to discuss and evaluate mutually beneficial, joint strategic
opportunities.
Shareholders will be receiving a mailing concerning the postponement.
The Company plans to hold its rescheduled Annual Meeting of Shareholders on
September 8, 1999. Updated proxy materials will be distributed in connection
with the rescheduled meeting later in the summer.
Eskimo Pie Corporation, headquartered in Richmond, Virginia, created
the frozen novelty industry in 1921 with the invention of the Eskimo Pie ice
cream bar. Today, the Company markets a broad range of frozen novelties, ice
cream and sorbet products under the Eskimo Pie, Real Fruit, Welch's, Weight
Watchers Smart Ones, SnackWell's and OREO brand names. These nationally branded
products are generally manufactured by a select group of licensed dairies who
purchase the necessary flavors ingredients and packaging directly from the
Company. Eskimo Pie Corporation also manufactures soft serve yogurt and premium
ice cream products for sale to the commercial foodservice industry. The Company
also sells a full line of quality flavors and ingredients for use in private
label dairy products in addition to the brands it licenses.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995:
Information in this release relating to the Company's future plans and
performance are "forward looking statements" and, as such, involve certain risks
and uncertainties that could cause actual results to vary materially. Potential
risks and uncertainties include, but are not limited to: (1) the highly
competitive nature of the frozen dessert market and the level of consumer
interest in the Company's products, (2) product costing, (3) the weather, (4)
the performance of management including management's ability to implement its
plans as contemplated, (5) the Company's relationships with its licensees and
licensors, (6) the impact of Year 2000 matters and (7) government regulation.
***** Financial Statements Follow This Release *****
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<TABLE>
ESKIMO PIE CORPORATION
Condensed Consolidated Statements of Income (Unaudited)
<CAPTION>
For the three months ended March 31, 1999 1998
------------------------------------------------------------------------------------------------------------------------------
(In thousands, except Per Share Data)
<S> <C> <C>
Net sales $ 16,129 $ 16,031
Cost of products sold 9,283 9,501
------------------------------------
Gross profit 6,846 6,530
Advertising and sales promotion expenses 3,881 3,662
Selling, general and administrative expenses 2,143 2,418
Expense from restructuring activities 314 -
------------------------------------
Operating income 508 450
Interest income 19 61
Interest expense and other - net 159 192
------------------------------------
Income before income taxes 368 319
Income tax expense 136 118
------------------------------------
Net income $ 232 $ 201
====================================
Per Share Data
Basic:
Weighted average number of common shares outstanding 3,462,796 3,458,002
Net income $ 0.07 $ 0.06
====================================
Assuming dilution:
Weighted average number of common shares outstanding 3,469,385 3,463,107
Net income $ 0.07 $ 0.06
====================================
Cash dividend $ 0.05 $ 0.05
====================================
</TABLE>
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<TABLE>
ESKIMO PIE CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)
March 31, December 31, March 31,
As of 1999 1998 1998
- ---------------------------------------------------------------------------------------------------------------------------------
(In thousands, except share data)
Assets
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 1,008 $ 530 $ 1,830
Receivables 8,888 6,817 8,880
Inventories 5,418 4,897 4,762
Prepaid expenses 611 889 712
-----------------------------------------------------
Total current assets 15,925 13,133 16,184
Property, plant and equipment - net 7,070 7,665 7,901
Goodwill and other intangibles 17,395 17,645 17,433
Other assets 1,636 1,645 1,998
-----------------------------------------------------
Total assets $ 42,026 $ 40,088 $ 43,516
=====================================================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 3,876 $ 2,875 $ 4,087
Accrued advertising and promotion 2,740 1,728 2,784
Accrued compensation and related amounts 293 211 442
Other accrued expenses 889 657 932
Current portion of long term debt 1,317 1,317 1,317
-----------------------------------------------------
Total current liabilities 9,115 6,788 9,562
Long term debt 7,371 3,901 4,889
Convertible subordinated notes - 3,800 3,800
Postretirement benefits and other liabilities 3,201 3,373 3,146
Shareholders' equity:
Preferred stock, $1.00 par value; 1,000,000 shares
authorized, none issued and outstanding - - -
Common stock, $1.00 par value; 10,000,000 shares
authorized, 3,462,796 issued and outstanding in 1999,
3,458,597 at December 31,1997 and 3,458,002 at
March 31, 1998 3,463 3,459 3,458
Additional capital 4,443 4,393 4,361
Retained earnings 14,433 14,374 14,300
-----------------------------------------------------
Total shareholders' equity 22,339 22,226 22,119
Total liabilities and shareholders' equity $ 42,026 $ 40,088 $ 43,516
=====================================================
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