SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
AMENDMENT NO. 1
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996 Commission file number 0-15584
Alpine Lace Brands, Inc.
(Exact name of registrant as specified in its charter)
Delaware 22-2717823
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
111 Dunnell Road, Maplewood, NJ 07040
(Address of principal executive office) (Zip Code)
(Registrant's telephone number, including area code) 201-378-8600
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x
State the aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 11, 1997:
Common stock, $.01 par value: $18,646,451
Indicate the number of shares outstanding of each of registrant's classes of
common stock, as of the close of the period covered by this report:
5,106,536 shares
DOCUMENTS INCORPORATED BY REFERENCE:
None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information Regarding Directors
A description of each of the Directors of the Company is provided below:
Carl T. Wolf, 53, is Chairman of the Board, President and Chief Executive
Officer of the Company. Mr. Wolf founded the Company and its predecessors and
has been the chief executive officer of each of them since its inception,
beginning in 1983. He became a Director of the Company shortly after its
incorporation in February, 1986. From 1977 through 1985, he was also the
President and sole stockholder of Market Finders Brokerage, Inc., a food
brokerage firm which he founded with Marion F. Wolf, his wife. Prior to forming
Market Finders Brokerage, Inc., Mr. Wolf was Manager-Specialty Foods Division of
Standard Brands Inc. in 1977, was Vice President, General Manager Cheese
Division and a director of Brooke Bond Foods, Inc., a food manufacturing and
distributing company, from 1974 through 1976 and had been employed in other
positions in that company since 1971. Mr. Wolf is a Phi Beta Kappa graduate of
Rutgers University and received his M.B.A. with Honors (Beta Gamma Sigma) from
the University of Pittsburgh.
Marion F. Wolf, 54, became a Director of the Company in March, 1986. In
January, 1991, Mrs. Wolf became Vice President-Food Service of the Company. She
was President and sole stockholder of Market Finders Brokerage, Inc. from 1985
to 1990. In May, 1990 Market Finders Brokerage, Inc. sold its commission
brokerage business to an unrelated party, but Mrs. Wolf continued to serve as
President of this business until December, 1990. See "Item 13. Certain
Relationship and Related Transactions - Market Finders Brokerage, Inc."
Richard Cheney, 75, became a Director of the Company in August, 1994. Mr.
Cheney is the former Chairman of Hill & Knowlton, an international public
relations and public affairs company, where he had been employed since 1988. Mr.
Cheney is on the Board of Directors of Chattem, Inc., Rowe Furniture Corporation
and Stoneridge, Inc.
Richard S. Hickok, 71, became a Director of the Company in March, 1988.
Since January, 1990, Mr. Hickok has been the Chairman of Hickok Associates,
Inc., a financial services consulting firm. Mr. Hickok is the retired Chairman
of KMG Main Hurdman, Certified Public Accountants (now part of KPMG Peat
Marwick). He retired in 1983 following 35 years in public accounting with KMG
Main Hurdman serving progressively as partner, Managing Partner and Chairman.
Since 1983, Mr. Hickok has been a consultant and director of numerous public and
private companies. He is a director of Comstock Resources, Inc., Marcam
Corporation, Marsh McLennan Companies, Inc., and ProjectaVision, Inc.
Howard M. Lorber, 48, became a Director of the Company in September, 1993.
He is the Chairman and Chief Executive Officer of Hallman & Lorber Associates,
Inc., a consulting and actuarial firm for pension and profit sharing plans. Mr.
Lorber is also President and Chief Operating Officer and a member of the board
of Directors of New Valley Corporation (formerly Western Union Corporation), as
well as Chairman of the Board of Directors and CEO of Nathans Famous, Inc. He is
also a member of the Board of Directors of United Capital Corp., and Prime
Hospitality Corp., and a Trustee of the Board of Long Island University.
Joseph R. Rosetti, 63, became a Director of the Company in August, 1992.
Mr. Rosetti has been since May, 1991 the Vice Chairman of Kroll Associates, a
private investigative and consulting organization. Prior to joining Kroll
Associates in April 1987, Mr. Rosetti was in charge of worldwide security for
International Business Machines Corporation.
<PAGE>
Prior to joining International Business Machines Corporation, Mr. Rosetti
held a number of government positions with the United States Departments of
Justice and Treasury. He is a member of the Board of Directors of Rapor-
Security Access Co. and Security Technology Inc.
Stephen Sadove, 45, became a Director of the Company in December, 1994.
Since 1991, Mr. Sadove has been the President of Worldwide Clairol (a subsidiary
of Bristol-Meyers Squibb Company). Mr. Sadove is a member of the Board of
Directors of Hazelden and Saks Holdings and the Board of Trustees of several
non-profit institutions.
Dr. Marvin Schiller, 63, became a Director of the Company in August, 1994.
Dr. Schiller is the former Managing Director of A.T. Kearney, Inc., an
international management consulting firm, where he had been since 1959. Dr.
Schiller is the author of numerous articles in professional and business
journals and is an active public speaker. He is a member of the Board of
Directors of the Lepercq-Istel Fund, Inc., Reprise Capital Corporation, Salant
Corporation, and Strategic Agricultural Management Corporation. He is the former
Chairman of the Board and Chief Executive Officer of the American Society for
the Prevention of Cruelty to Animals (ASPCA), President of the Mental Illness
Foundation, and serves as a member of the Board of Visitors of the College
of Social Science at Michigan State University.
John M. Small, 49, became a Director of the Company in March, 1997. Mr.
Small has been a Senior Partner at CSC Weston Group, a business unit of Computer
Sciences Corporation, since 1995. Prior to joining CSC, Mr. Small was a
Principal of Weston Group, a management consulting firm specializing in Business
and Marketing Strategy within the Food, Beverage, Healthcare and Personal Care
industries, from 1988 to 1995. Prior to joining Weston Group, Mr. Small held
various management positions at General Foods Corporation, from 1972 to 1988,
and, most notably, was responsible for the development and introduction of
Jell-O Pudding Pops. Mr. Small has also been retained as an expert witness
regarding matters within the Dairy industry. Mr. Small received his B.A. from
New York University's University College of Arts and Sciences in 1969 and his
MBA from New York University's Graduate School of Business Administration (now
named the Leonard Stern School of Business Administration) in 1974.
Information Regarding Executive Officers
A description of each executive officer of the Company is provided below:
Carl T. Wolf, 53, is Chairman of the Board, President and Chief Executive
Officer of the Company. A description of Mr. Wolf appears on page 2.
Marion F. Wolf, 54, is Vice President - Food Service and a Director of the
Company. A description of Mrs. Wolf appears on page 2.
Kenneth E. Meyers, 37, is President of MCT Dairies, Inc., a subsidiary of
the Company, where he has been employed since July, 1985 and has also been
Secretary of the Company since February, 1986; from March, 1983 to July, 1985 he
directed the sales activities for PreMonde Alpine Lace Swiss Cheese and other
specialty products at the Company's predecessor First World Cheese Associates.
Prior to joining the Company, Mr. Meyers served as a sales agent for Dictaphone
Corporation, a division of Pitney-Bowes, Inc., following his graduation in 1982
from the University of Rhode Island.
George S. Wenger, 47, has been Vice President - General Manager Branded
Division Sales of the Company and its predecessor First World Cheese Associates
since October, 1985. Prior to joining the Company, Mr. Wenger was Executive Vice
President and principal of Wenger-Crates & Assoc., Inc., a retail food brokerage
<PAGE>
firm in Cleveland, Ohio, with which Mr. Wenger had been associated since 1972.
Mr. Wenger is a graduate of Ohio University.
Arthur Karmel, 39, has been Vice President - Finance of the Company since
January, 1995. Mr. Karmel was elected Vice President in May, 1992 and had been
the Controller since March, 1989. Mr. Karmel joined the Company in October, 1987
as a Senior Accountant. Prior to joining the Company, Mr. Karmel held various
accounting positions with the advertising agencies of Scali, McCabe, Sloves,
Inc. from 1986 to 1987 and Cunningham and Walsh, Inc. from 1983 to 1986. Mr.
Karmel graduated from Brooklyn College.
Dominick F. Gonnella, 28, has been Vice President-Operations of the Company
since July, 1994. In April, 1994, Mr. Gonnella was promoted to Director of
Operations. In October, 1992, Mr. Gonnella advanced to the Production Planning
and Purchasing position. Mr. Gonnella joined the Company in January, 1990, and
held the position of Inventory Control Manager through September, 1992. Mr.
Gonnella is a graduate of Kean College.
There are no family relationships between any Directors and executive
officers of the Company, except that Carl T. Wolf and Marion F. Wolf are husband
and wife.
ITEM 11. EXECUTIVE COMPENSATION
Compensation of Executive Officers
The following table sets forth the cash and non-cash compensation for each
of the last three fiscal years awarded to, earned by or paid to the Chief
Executive Officer of the Company and the 4 other executive officers whose total
annual salary and bonus exceeded $100,000 for the year ended December 31, 1996.
<PAGE>
<TABLE>
Summary Compensation Table
Long-Term
Annual Compensation(1) Compensation
<S> <C> <C> <C> <C>
Name and Year Salary Bonus Options
Principal Position
Carl T. Wolf..................................... 1996 $288,500 - 23,400
President and Chief 1995 $275,000 - 61,600
Executive Officer 1994 $275,000 - 5,000
Kenneth E. Meyers................................ 1996 $802,400 - 15,000
President - MCT Dairies, Inc. 1995 $389,209 - 5,000
1994 $401,732 - 4,000
George S. Wenger................................. 1996 $166,000 $10,000 5,000
Vice President-General Manager 1995 $160,000 $20,000 5,000
Branded Division Sales 1994 $150,000 $18,000 4,000
Marion F. Wolf................................... 1996 $130,000 $15,000 10,000
Vice President - 1995 $100,000 $20,000 5,000
Food Service 1994 $85,000 $18,000 4,000
Arthur Karmel.................................... 1996 $105,000 $16,250 10,000
Vice President - 1995 $85,000 $17,000 8,500
Finance 1994 $72,500 $5,750 3,000
_______________
(1) Prerequisites and other personal benefits, securities
or property to each executive officer did not exceed the lesser of $50,000 or
10% of such executive officer's annual salary and bonus.
</TABLE>
<PAGE>
Stock Options
The following tables summarize (i) option grants during the year ended December
31, 1996 to the executive officers named in the Summary Compensation Table
above, and the potential realizable value of such options and (ii) the aggregate
value of all outstanding options held by such executive officers as of December
31, 1996.
<TABLE>
Options Granted in 1996
Individual Grants
<S> <C> <C> <C> <C> <C> <C>
% of Total Potential Realizable
Number of Options Value at Assumed
Securities Granted to Annual Rates of Stock
Underlying Employees Exercise Price Appreciation for
Options in Fiscal or Base Expiration Option Term(2)
Name Granted Year(1) Price Date 5% 10%
Carl T. Wolf............. 23,400(3) 18.4% $ 6.00 10/01/06 $88,297 $223,761
Kenneth E. Meyers........ 15,000(3) 11.8% $ 6.00 10/01/06 $56,601 $143,437
George S. Wenger......... 5,000(3) 3.9% $ 6.00 10/01/06 $18,867 $47,812
Marion F. Wolf........... 10,000(3) 7.9% $ 6.00 10/01/06 $37,734 $95,625
Arthur Karmel............ 10,000(3) 7.9% $ 6.00 10/01/06 $37,734 $95,625
_______________
(1) The Company granted options representing 126,900 shares of
Common Stock to employees in the year ended December 31, 1996.
(2) The potential realizable portion of the foregoing table illustrates value
that might be realized upon exercise of options immediately prior to the
expiration of their term, assuming the specified compounded rates of
appreciation on the Company's Common Stock over the term of the options. These
numbers do not take into account provisions of certain options providing for
termination of the option following termination of employment,
nontransferability or differences in vesting periods.
(3) These options are not exercisable for the first year after grant. On each of
the first, second and third anniversaries of the date of grant, each option will
become exercisable as to one-third of the shares of Common Stock subject to such
options. Consequently, after the third anniversary each option will be
exercisable for its full number of shares.
</TABLE>
<PAGE>
<TABLE>
Aggregate Option Values
at December 31, 1996
Number of Securities Underlying
Unexercised Options at Value of Unexercised In-the-Money
December 31, 1996 Options at December 31, 1996(1)
<S> <C> <C> <C> <C>
Name Exercisable Unexercisable Exercisable Unexercisable
Carl T. Wolf 33,868 66,132 $ 5,835 $ 2,916
Kenneth E. Meyers 66,084 19,666 $ 50,417 $ 2,333
George S. Wenger 66,084 9,666 $ 50,417 $ 2,333
Marion F. Wolf 10,834 14,666 $ 4,667 $ 2,333
Arthur Karmel 19,667 13,333 $11,188 $ 1,750
_________________
(1) On December 31, 1996, the last reported sales price of the
Company's Common Stock as reported on the NASDAQ Stock Market was $5.25 per
share.
</TABLE>
Directors' Compensation
In 1996, the Company began paying each of the Directors of the Company, who is
not also an employee of the Company, an annual retainer of $2,500. This retainer
is paid in two installments of $1,250 on each of January 1 and July 1. A
director must be in office on the date an installment is paid in order to
receive such installments. The Company also pays each of its Directors who is
not also an employee of the Company a fee of $1,500 ($750 in the case of
participation by telephone) for each meeting of the Board of Directors or
committee of the Board of Directors attended, subject to a maximum of $2,250 for
attendance at more than one meeting on any one day. The Company's 1987 Stock
Option Plan (as amended) provides, among other things, that (i) each person (who
is not an employee of the Company or a subsidiary) who becomes a Director after
January 11, 1993 will automatically receive, upon becoming a Director, a grant
of an option to purchase 6,600 shares of the Company's Common Stock at the then
fair market value, and (ii) each such non-employee Director will automatically
receive, on November 1 of each year commencing November 1, 1995, an option to
purchase 6,600 shares of the Company's Common Stock at the then fair market
value. All such options vest over three years.
Employment Agreements
The Company entered into an employment agreement with Mr. Wolf in January, 1993.
Under the agreement he receives a base salary with bonuses at the discretion of
the Board of Directors. The employment agreement is for an initial term of three
years and is automatically renewed for successive three year terms unless prior
to the expiration of the original or any renewal term, Mr. Wolf gives the
Company 60 days' notice or the Company gives Mr. Wolf three years' notice. Upon
a change in control of the Company, Mr. Wolf's employment agreement will
automatically be renewed for three years from the date of such event.
The Company's employment agreement with Mr. Meyers was amended effective January
1, 1995 to extend its term to December 31, 1996. The employment agreement
<PAGE>
provides for annual compensation equal to the greater of $115,050 or the sum of:
(1) one-third of the gross profit from cheese commodity trading activities
directly conducted by him and (2) $.0075 per pound on all sales of branded
cheeses of the Company, whether or not he participates in such sales, up to a
maximum of $15,000 annually. The Company also agreed to grant Mr. Meyers a
non-qualified option to purchase from the Company up to 20% of the stock of the
Company's wholly-owned subsidiary MCT Dairies, Inc. In the event his employment
with the Company is terminated, Mr. Meyers will receive a maximum of $150,000.
In consideration for this payment, Mr. Meyers has agreed not to compete or
interfere with the business of the Company upon termination for a period of from
three to nine months thereafter depending on cause. The agreement is
automatically renewed for successive one year terms unless prior to the
expiration of the original or any renewal term, either party gives the other 90
days' notice. Upon a change in control of the Company, Mr. Meyers' employment
agreement will automatically be renewed for one year from the date of such
event.
In addition to the foregoing, Mr. Meyers has a separate agreement with the
Company whereby, in consideration of Mr. Meyers' management of the Company's
efforts to protect its proprietary rights, the Company will pay Mr. Meyers 5% of
the amounts, if any, received by the Company (after expenses including attorneys
fees and after certain other royalty payments) in connection with such rights.
The amount of such payment or payments, if any, cannot currently be predicted.
The Company entered into an employment agreement with Mr. Wenger commencing as
of January 4, 1993. Under the agreement, he receives a salary and a
non-accountable expense allowance of $140 per week for local travel and
entertainment expenses. The employment agreement is for an initial term of one
year and is automatically renewed for successive one year terms unless prior to
the expiration of the original or any renewal term, Mr. Wenger gives the Company
60 days' notice or the Company gives Mr. Wenger nine months' notice. Upon a
change in control of the Company, Mr. Wenger's employment agreement will
automatically be renewed for one year from the date of such event.
The Company entered into an employment agreement with Mrs. Wolf commencing as of
January 4, 1993. The agreement sets forth Mrs. Wolf's duties and salary. The
employment agreement is for an initial term of one year and is automatically
renewed for successive one year terms unless prior to the expiration of the
original or any renewal term, Mrs. Wolf gives the Company 60 days' notice or the
Company gives Mrs. Wolf six months' notice. Upon a change in control of the
Company, Mrs. Wolf's employment agreement will automatically be renewed for one
year from the date of such event.
The Company entered into an employment agreement with Mr. Karmel commencing as
of January 4, 1993. The agreement, sets forth Mr. Karmel's duties and salary.
The employment agreement is for an initial term of one year and is automatically
renewed for successive one year terms unless prior to the expiration of the
original or any renewal term, Mr. Karmel gives the Company 60 days' notice or
the Company gives Mr. Karmel six months' notice. Upon a change in control of the
Company, Mr. Karmel's employment agreement will automatically be renewed for one
year from the date of such event.
The Company entered into an employment agreement with Mr. Gonnella commencing as
of April 19, 1994. The agreement, sets forth Mr. Gonnella's duties and salary.
The employment agreement is for an initial term of one year and is automatically
renewed for successive one year terms unless prior to the expiration of the
original or any renewal term, Mr. Gonnella gives the Company 60 days' notice or
the Company gives Mr. Gonnella ninety days' notice. Upon a change in control of
the Company, Mr. Gonnella's employment agreement will automatically be renewed
for one year from the date of such event.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership
The following table sets forth information for Goldman, Sachs & Co., owner of
more than 5% of the Company's Common Stock, as reported in its Schedule 13G
dated February 14, 1997 and, as of April 9, 1997 for each of the Company's
Directors, for each of the Company's executive officers included in the Summary
Compensation Table set forth under the caption "Item 11. Executive
Compensation-Compensation of Executive Officers" and for all executive officers
and Directors of the Company as a group. Information with respect to beneficial
ownership is based upon information furnished to the Company by each security
holder. The warrants and options referred to in the footnotes to the table are
presently exercisable, except as otherwise noted.
<PAGE>
<TABLE>
<S> <C> <C>
Amount Percentage
and Nature of Outstanding
of Beneficial Common
Name and Address(1) Ownership(2) Stock
Carl T. Wolf ................................................................... 1,585,468(3)(4) 30.9%
Goldman, Sachs & Co. ........................................................... 471,400 9.2%
86 Broad Street
New York, NY 10004
Kenneth E. Meyers .............................................................. 102,101(5) 2.0%
George S. Wenger ............................................................... 89,082(5) 1.7%
Marion F. Wolf ................................................................. 90,834(3)(6) 1.8%
Arthur Karmel .................................................................. 38,167(7) (8)
Richard Cheney ................................................................. 13,200(9) (8)
Richard S. Hickok .............................................................. 22,202(10) (8)
Howard M. Lorber ............................................................... 12,700(11) (8)
Joseph R. Rosetti .............................................................. 17,800(12) (8)
Stephen Sadove ................................................................. 8,200(13) (8)
Marvin Schiller ................................................................ 12,200(9) (8)
John M. Small .................................................................. 0 -
All executive officers and Directors as
a group ...................................................................... 1,921,121(14) 35.7%
(1) Unless otherwise indicated, the address of each beneficial owner is c/o
Alpine Lace Brands, Inc., 111 Dunnell Road, Maplewood, New Jersey 07040.
(2) Unless otherwise indicated, the persons shown have sole voting and
investment power with respect to the shares listed.
(3) Includes 75,000 shares of Common Stock jointly owned by Carl T. Wolf and
Marion F. Wolf.
(4) Includes options to purchase 33,868 shares of Common Stock granted pursuant
to the Company's 1987 Stock Option Plan (the "Plan").
(5) Includes options to purchase 66,084 shares of Common Stock granted pursuant
to the Plan.
(6) Includes options to purchase 10,834 shares of Common Stock granted pursuant
to the Plan.
(7) Includes options to purchase 19,667 shares of Common Stock granted pursuant
to the Plan.
(8) Less than one percent.
(9) Includes options to purchase 8,200 shares of Common Stock granted pursuant
to the Plan.
(10) Includes 5,250 restricted special warrants to purchase 5,250 shares of
Common Stock and options to purchase 12,200 shares of Common Stock granted
pursuant to the Plan and includes 667 restricted special warrants to purchase
2,001 shares of Common Stock and 667 warrants, with such 667 warrants
exercisable to purchase an additional 1,000 shares of Common Stock.
(11) Consists of options to purchase 12,700 shares of Common Stock granted
pursuant to the Plan.
(12) Includes options to purchase 15,200 shares of Common Stock granted pursuant
to the Plan.
(13) Consists of options to purchase 8,200 shares of Common Stock granted
pursuant to the Plan.
(14) Includes (i) 667 restricted special warrants to purchase 2,001 shares of
Common Stock and 667 warrants, with such 667 warrants exercisable to purchase an
additional 1,000 shares of Common Stock, (ii) 5,250 restricted special warrants
to purchase 5,250 shares of Common Stock, and (iii) options to purchase 264,405
shares of Common Stock granted pursuant to the Plan and presently exercisable or
exercisable within 60 days after April 9, 1997.
</TABLE>
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Market Finders Brokerage, Inc.
Market Finders Brokerage, Inc. ("Market Finders") is a food brokerage company
organized in 1977 by Mr. and Mrs. Wolf. Mr. Wolf served as the President and was
sole stockholder of Market Finders from 1977 until December 1985, at which time
he resigned his position and transferred his stock in Market Finders to Mrs.
Wolf, who succeeded him as President. In May, 1990 Market Finders sold the
commission brokerage portion of its business to an unrelated party, but the sale
provided for Mrs. Wolf to receive a percentage royalty (subject to a specified
minimum and maximum) based on commissions generated by Market Finders. Effective
April 1, 1993 and again in 1995, the commission brokerage business was resold to
new owners, and Mrs. Wolf's percentage royalty arrangements were renegotiated,
including a new provision for reduction of Mrs. Wolf's royalty in the event the
Company ceases doing business with the new purchaser.
The Company continues to use the services of the purchasers of Market Finders'
commission brokerage business. During 1996 sales agency fees and commissions
paid by the Company to the purchaser aggregated $215,951.
Market Finders, which is still owned by Mrs. Wolf, continues to engage in
certain import quota transactions with the Company. During 1996, purchases by
the Company from Market Finders aggregated $539,181.
Herbloc, Inc.
In December, 1991, MCT Dairies, Inc., a wholly owned subsidiary of the Company,
made an unsecured loan to Kenneth E. Meyers, the President of MCT, in the amount
of $65,000 in order to finance the purchase by Mr. Meyers of all of the
outstanding stock of Herbloc, Inc. ("Herbloc"), a California corporation. The
loan bore interest at the rate of 11% per annum, compounded quarterly, and was
repayable over five years in 20 equal installments of principal, plus accrued
interest. The loan was repaid in full on December 31, 1996.
At the time of Mr. Meyers' purchase of the stock of Herbloc in December, 1991,
the Company entered into a five-year supply agreement with Herbloc, which was
renewed at the Company's option, in December 1996 for an additional five years,
pursuant to which Herbloc has agreed to sell to the Company all cheese and
cheese products imported by Herbloc pursuant to its import quotas. The Company
has agreed to pay Herbloc (a) the cost of the imported cheese and cheese
products plus all direct costs related to the importation of quota cheese, (b) a
mark-up during the initial term of $0.0984 per pound of quota cheese imported
under Herbloc's historical and non-historical import quotas, plus $0.015 per
pound of quota cheese imported by Herbloc under any supplementary import quotas,
but not less than $18,000 per year of mark-ups during the initial term, and
during the renewal term a mark-up of $0.035 per pound of quota cheese imported
by Herbloc under any quotas, and (c) the amount paid by Herbloc to the U.S.
Department of Agriculture each year for license fees. The supply agreement
guarantees that each year the Company will either purchase at least 86% of
Herbloc's "quota share" for cheese and cheese products, or the Company will
notify Herbloc by September 15 of such year of the amount of each "quota share"
which the Company does not plan to purchase during the remainder of such year.
During 1996, the Company had aggregate purchases from Herbloc of $716,415 and
the Company had aggregate sales to Herbloc of $43,723.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALPINE LACE BRANDS, INC.
By: /s/Carl T. Wolf
Carl T. Wolf, President and Chairman of the Board
Dated: April 29, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 393,173
<SECURITIES> 0
<RECEIVABLES> 13,455,965
<ALLOWANCES> 24,324
<INVENTORY> 8,502,197
<CURRENT-ASSETS> 23,045,979
<PP&E> 4,141,082
<DEPRECIATION> 1,890,996
<TOTAL-ASSETS> 28,571,335
<CURRENT-LIABILITIES> 13,368,157
<BONDS> 7,903,878
<COMMON> 51,767
0
2,250,000
<OTHER-SE> 4,997,533
<TOTAL-LIABILITY-AND-EQUITY> 28,571,335
<SALES> 161,896,522
<TOTAL-REVENUES> 161,896,522
<CGS> 126,673,081
<TOTAL-COSTS> 158,004,330
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 840,572
<INCOME-PRETAX> 3,051,620
<INCOME-TAX> 1,149,616
<INCOME-CONTINUING> 1,902,004
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,902,004
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
</TABLE>
