<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 1995
Commission file No. 0-15320
The Fresh Juice Company, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 11-2771046
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
350 Northern Boulevard
Great Neck, New York 11021
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(Address of principal (Zip Code)
Executive offices)
Registrant's telephone number, including area code (516) 482-5190
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 / /
The number of shares of $.01 par value Common Stock outstanding as of October
13, 1995 was 3,550,062.
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THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 1995 AND NOVEMBER 30, 1994
(FORM 10 - Q)
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THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
August 31, 1995 and November 30, 1994
(Unaudited)
Assets 1995 1994
------ ---- ----
Current assets:
Cash and cash equivalents $ 1,001,267 1,739,584
Investments - available for sale 59,090 592,116
Trade accounts receivable 703,173 679,392
Inventories 2,408,095 1,373,712
Note receivable 30,000 120,000
Income taxes receivable -- 70,494
Other 8,919 16,521
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Total current assets 4,210,544 4,591,819
Property, building and equipment, at cost:
Land 30,000 --
Building 597,155 --
Equipment 435,660 307,226
Molds 182,553 169,048
Automobiles 103,058 81,065
Construction in progress 600,000 --
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1,948,426 557,339
Less accumulated depreciation 493,430 433,429
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1,454,996 123,910
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Investments - available for sale 92,313 --
Note receivable 140,000 140,000
Trademark and patent, net of accumulated
amortization of $45,107 at August 31,
1995 and $43,781 at November 30, 1994 1,744 3,070
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$ 5,899,597 4,858,799
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----------- ---------
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable 445,307 13,546
Accrued expenses 140,520 457,654
Income taxes payable 162,375 --
Other 5,312 8,408
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Total current liabilities 753,514 479,608
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Note payable 475,000 --
Shareholders' equity:
Series preferred stock, par value $10.
Authorized 200,000 shares; none
issued -- --
Common stock, par value $.01.
Authorized 5,000,000 shares;
issued 3,762,000 shares;
outstanding 3,550,062 shares at
August 31, 1995 and 3,554,862
shares at November 30, 1994 37,620 37,620
Additional paid-in capital 2,396,490 2,396,490
Retained earnings 2,520,266 2,218,441
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4,954,376 4,652,551
Less cost of common shares held in
treasury:
211,938 shares at August 31, 1995
and 207,138 shares at
November 30, 1994 283,293 273,360
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Total shareholders' equity 4,671,083 4,379,191
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$ 5,899,597 4,858,799
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See accompanying notes to consolidated financial statements.
<PAGE>
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
Consolidated Statements of Earnings and Retained Earnings
Nine months ended August 31, 1995 and 1994
(Unaudited)
1995 1994
---- ----
Net sales $ 7,423,025 5,921,129
Cost of goods sold 4,777,568 3,436,690
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2,645,457 2,484,439
Selling, general and administrative
expenses 2,234,608 1,695,923
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Earnings from operations 410,849 788,516
Interest income 93,264 63,487
Other 36,581 (1,691)
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Earnings before income taxes 540,694 850,312
Income taxes 238,869 311,471
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Net earnings 301,825 538,841
Retained earnings, beginning of period 2,218,441 1,829,603
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Retained earnings, end of period $ 2,520,266 2,368,444
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Net earnings per common share $ .08 .15
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Weighted average number of shares
outstanding $ 3,612,287 3,619,900
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See accompanying notes to consolidated financial statements.
<PAGE>
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
Consolidated Statements of Earnings and Retained Earnings
Three months ended August 31, 1995 and 1994
(Unaudited)
1995 1994
---- ----
Net sales $ 2,279,190 2,095,488
Cost of goods sold 1,400,921 1,278,449
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878,269 817,039
Selling, general and administrative
expenses 773,785 523,435
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Earnings from operations 104,484 293,604
Interest income 39,778 19,296
Other 11,468 1,459
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Earnings before income taxes 155,730 314,359
Income taxes 79,025 111,135
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Net earnings 76,705 203,224
Retained earnings, beginning of
period 2,443,561 2,165,220
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Retained earnings, end of period $ 2,520,266 2,368,444
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----------- ---------
Net earnings per common share $ .02 .06
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Weighted average number of shares
outstanding $ 3,622,416 3,616,391
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See accompanying notes to consolidated financial statements.
<PAGE>
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine months ended August 31, 1995 and 1994
(Unaudited)
1995 1994
---- ----
Cash flows from operating activities:
Net earnings $ 301,825 538,841
Adjustments to reconcile net earnings to
net cash used in operating activities:
Depreciation and amortization 60,001 36,648
(Gain) loss on sale of investments (14,680) 3,150
Changes in assets and liabilities:
Decrease (increase) in trade
accounts receivable (23,781) 57,829
Increase in inventories (1,034,383) (1,039,110)
Decrease (increase) in other
current assets 8,928 (44,813)
Increase in other assets -- (307,000)
Increase in accounts payable 431,761 76,931
Decrease in accrued expenses (317,134) (160,352)
Increase (decrease) in income
taxes payable 232,869 (305,929)
(Decrease) increase in other
current liabilities (3,096) 3,588
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Net cash used in operating
activities (357,690) (1,140,217)
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Cash flows from investing activities:
Installments from note receivable 90,000 --
Decrease in investments 455,393 400,268
Acquisitions of property, building and
equipment (916,087) (16,978)
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Net cash provided by (used in)
investing activities (370,694) 383,290
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Cash flows from financing activities:
Purchase of Treasury Stock (9,933) --
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Net cash used in financing
activities (9,933) --
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Net decrease in cash (738,317) (756,927)
Cash at beginning of period 1,739,584 1,740,639
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Cash at end of period $ 1,001,267 983,712
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Supplemental Schedule of Noncash Financing Activities:
The Company purchased a building for $625,000 of which $150,000 was paid in cash
and $475,000 is payable pursuant to a secured mortgage held by the seller.
See accompanying notes to consolidated financial statements.
<PAGE>
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
August 31, 1995 and November 30, 1994
(Unaudited)
(1) The accompanying consolidated financial statements include the accounts of
The Fresh Juice Company, Inc. and its subsidiaries (the Company) and
have been prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position,
results of earnings and cash flows at August 31, 1995, and for all
periods presented have been made. All material intercompany accounts
and transactions have been eliminated. From October 1994 through
August 1995, the Company sold and distributed organic produce through
its wholly-owned subsidiary, Fresh Pik't Natural Foods, Inc. As of
December 1, 1994, the Company adopted Statement of Financial Accounting
Standards No.115, "Accounting for Certain Investments in Debt and
Equity Securities".
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these consolidated financial statements be read in conjunction
with the consolidated financial statements and notes thereto included
in the Company's November 30, 1994 consolidated financial statements
and the Company's February 28, 1995 Form 10-Q. The results of
operations for the period ended August 31, 1995 are not necessarily
indicative of the operating results which may be achieved for the
full year.
Certain reclassifications were made to conform the prior years
consolidated financial statements to the 1995 presentation.
(2) Inventories
Inventories at August 31, 1995 and November 30, 1994 consist of the
following:
1995 1994
---- ----
Packaging materials $ 150,562 50,755
Finished goods 2,257,533 1,322,957
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$ 2,408,095 1,373,712
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<PAGE>
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of
Results of Operations and Financial Conditions
Three months ended August 31, 1995 compared to
three months ended August 31, 1994
Results of Operations
Net sales for the quarter ended August 31, 1995 increased to $2,279,190, or 9%
more than the corresponding quarter of the preceding year primarily as a result
of the distribution of organic produce by the Company beginning in October 1994.
Gross profit for the quarter ended August 31, 1995 increased to $878,269 from
$817,039 in the corresponding quarter of the preceding year due to the
distribution of organic produce by the Company beginning in October 1994.
Selling, general and administrative expenses for the quarter ended August 31,
1995 increased 48% to $773,785 over the corresponding quarter of the preceding
year due to the increased sales of organic produce by the Company beginning in
October 1994, as well as expenses associated with the start-up of its
manufacturing operations based in Florida.
Nine months ended August 31, 1995 compared to
nine months ended August 31, 1994
Results of Operations
Net sales for the nine months ended August 31, 1995 increased to $7,423,025, or
25% more than the corresponding nine months of the preceding year primarily as a
result of the distribution of organic produce by the Company beginning in
October 1994.
Gross profit for the nine months ended August 31, 1995 increased to $2,645,457
from $2,484,439 in the corresponding nine months of the preceding year due to
the distribution of organic produce by the Company beginning in October 1994.
The decrease in gross margin from 42% in 1994 to 36% in 1995 was primarily the
result of an increase in the cost of juice products.
Selling, general and administrative expenses for the nine months ended August
31, 1995 increased 32% to $2,234,608 over the corresponding nine months of the
preceding year due to the increased sales of organic produce by the Company
beginning in October 1994, as well as expenses associated with the start-up of
its manufacturing operations based in Florida.
Liquidity
The Company had working capital of $3,457,030 at August 31, 1995 compared to
$4,112,211 at November 30, 1994. The Company requires capital to support the
level of inventory required to meet current demand as well as expected future
increases in demand for its product. During the 1995 harvesting season, which
ends in August 1995, the Company believes it is processing sufficient product to
meet its current demand. Additional financing may be required to support levels
of inventory required to meet future demand. A lack of availability of quality
fruit and higher cost of citrus would hamper the Company's ability to maintain
its rate of growth and its gross margin.
In August 1995, the Company purchased land and a building in the amount of
$625,000 for the purpose of manufacturing juice products. The Company financed
$475,000 of the purchase through a secured mortgage
2
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THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
Management's Discussion and Analysis of
Results of Operations and Financial Conditions, Continued
held by the seller, the remaining $150,000 was paid from available working
capital. The Company has begun refurbishment of the building with total
contract costs estimated at $2,500,000 of which $600,000 has been expended as of
August 31, 1995. The Company expects to finance the balance of these costs
through the use of working capital and a term loan with a financial institution.
Inflation
The Company believes that its business is not affected by inflation to any
extent greater than that of the general economy.
<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.
THE FRESH JUICE COMPANY, INC.
Date: October 16, 1995 By: /s/ Steven Smith
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Steven Smith
Chairman of the Board, President
and Chief Executive Officer
Date: October 16, 1995 By: /s/ Kathy Siegel
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Kathy Siegel
Treasurer (principal financial
officer and principal accounting
officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
consolidated financial statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> AUG-31-1995
<CASH> 1,001,267
<SECURITIES> 59,090
<RECEIVABLES> 703,173
<ALLOWANCES> 0
<INVENTORY> 2,408,095
<CURRENT-ASSETS> 4,210,544
<PP&E> 1,948,426
<DEPRECIATION> 493,430
<TOTAL-ASSETS> 5,899,597
<CURRENT-LIABILITIES> 753,514
<BONDS> 475,000
<COMMON> 37,620
0
0
<OTHER-SE> 4,916,756
<TOTAL-LIABILITY-AND-EQUITY> 5,899,597
<SALES> 7,423,025
<TOTAL-REVENUES> 7,423,025
<CGS> 4,777,568
<TOTAL-COSTS> 7,012,176
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 540,694
<INCOME-TAX> 238,869
<INCOME-CONTINUING> 301,825
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 301,825
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0
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