<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 1998
Commission file No. 0-15320
The Fresh Juice Company, Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 11-2771046
- ---------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
280 Wilson Avenue,
Newark, New Jersey 07105
- ---------------------------------------- ------------------------------------
(Address of principal Executive offices) (Zip Code)
Registrant's telephone number, including area code (973) 465-7100
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 July 15,
1998 was 6,467,731.
<PAGE> 2
PART I
ITEM 1. FINANCIAL STATEMENTS
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MAY 31, 1998 AND NOVEMBER 30, 1997
<TABLE>
<CAPTION>
1998 1997
----------- ----------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 570,750 453,344
Trade accounts receivable................................. 3,739,362 3,156,893
Inventories............................................... 3,485,446 2,638,083
Current portion of notes receivable....................... 93,764 131,101
Prepaid income tax........................................ 8,000 8,000
Deferred income taxes..................................... 147,783 145,615
Prepaid and other current assets.......................... 263,392 201,069
----------- ----------
Total current assets............................... 8,308,497 6,734,105
----------- ----------
Property, plant and equipment, at cost:
Land...................................................... 30,000 30,000
Building and improvements................................. 2,954,403 2,839,823
Equipment................................................. 5,486,724 5,260,058
Molds..................................................... 264,333 264,333
Automobiles............................................... 300,456 266,255
----------- ----------
9,035,916 8,660,469
Less accumulated depreciation............................. 2,171,573 1,741,718
----------- ----------
Net property, plant and equipment.................. 6,864,343 6,918,751
Notes receivable, net of current portion.................... 377,972 365,621
Excess of cost over estimated fair values of net assets
acquired, net of accumulated amortization of $681,179 and
$496,379 in 1998 and 1997, respectively................... 6,711,151 6,895,951
Trademarks, patents, and other intangibles, net of
accumulated amortization of $214,738 and $112,156 in 1998
and 1997, respectively.................................... 1,037,202 1,075,820
Other assets................................................ 105,732 103,096
----------- ----------
Total assets....................................... 23,404,897 22,093,344
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Note payable.............................................. 1,320,000 800,000
Current installments of long-term debt.................... 1,071,661 1,202,074
Accounts payable and accrued expenses..................... 3,757,284 3,149,102
Income taxes payable...................................... 148,049 263,606
----------- ----------
Total current liabilities.......................... 6,296,994 5,414,782
Long-term debt and obligations under capital lease, net of
current installments...................................... 3,330,283 3,597,151
Deferred rent............................................... 137,224 144,254
Deferred income taxes....................................... 802,933 773,900
----------- ----------
Total liabilities.................................. 10,567,434 9,930,087
----------- ----------
Shareholders' equity:
Series preferred stock par value $10. Authorized 7,000,000
shares; none issued..................................... -- --
Common stock, par value $.01. Authorized 30,000,000
shares; issued 6,679,669 in 1998 and 1997,
respectively............................................ 66,797 66,797
Additional paid-in capital................................ 9,453,958 9,453,958
Retained earnings......................................... 3,601,970 2,927,764
----------- ----------
13,122,725 12,448,519
Less cost of common shares held in treasury:
212,938 shares 285,262 285,262
----------- ----------
Total shareholders' equity......................... 12,837,463 12,163,257
Commitments and contingencies
----------- ----------
Total liabilities and shareholders' equity......... $23,404,897 22,093,344
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 3
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net Sales $19,510,716 $20,836,509
Cost of Goods Sold 13,803,993 14,696,150
----------- -----------
Gross Profit 5,706,723 6,140,359
Selling, General and Administrative Expenses 4,286,988 4,397,520
----------- -----------
Earnings From Operations 1,419,735 1,742,839
Interest Income 29,724 14,123
Interest Expense (237,878) (275,351)
Other Income (Expense) 25,733 31,679
----------- -----------
Earnings Before Income Taxes 1,237,314 1,513,290
Income Taxes 563,108 280,475
----------- -----------
Net Earnings 674,206 1,232,815
Retained Earnings, Beginning of Period 2,927,764 1,560,441
----------- -----------
Retained Earnings, End of Period 3,601,970 $ 2,793,256
=========== ===========
Weighted Average Shares Outstanding 6,467,731 6,467,731
Basic and Diluted Earnings per Share .10 .19
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MAY 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net Sales $10,106,672 $11,458,916
Cost of Goods Sold 7,417,255 8,000,214
----------- -----------
Gross Profit 2,689,417 3,458,702
Selling, General and Administrative Expenses 2,217,927 2,354,390
----------- -----------
Earnings From Operations 471,490 1,104,312
Interest Income 17,368 8,952
Interest Expense (120,119) (136,927)
Other Income (Expense) 15,964 22,698
----------- -----------
Earnings Before Income Taxes 384,703 999,035
Income Taxes 192,724 278,875
----------- -----------
Net Earnings 191,979 720,160
Retained Earnings, Beginning of Period 3,409,991 2,073,096
----------- -----------
Retained Earnings, End of Period $ 3,601,970 $ 2,793,256
=========== ===========
Weighted Average Shares Outstanding, 6,467,731 6,467,731
Basic and Diluted Earnings Per Share .03 .11
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 5
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MAY 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 674,206 $ 1,232,815
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 679,743 723,951
Deferred income taxes 26,865 51,261
Deferred building rent (7,030) 2,876
Changes in assets and liabilities, net of assets acquired
and liabilities assumed:
Trade accounts receivable (582,469) (821,396)
Inventories (847,363) (1,007,799)
Prepaid and other current assets (62,323) 186,968
Other assets 22,350 126,356
Accounts payable and accrued expenses 608,182 (594,501)
Income taxes payable (115,557) 246,214
-------- -----------
Net Cash Provided By Operating Activities 396,604 146,745
Cash Flows From Investing Activities:
Acquisition of distribution route (7,328) --
Increase in notes receivable (7,983)
Acquisitions of property, plant and equipment (394,589) (170,241)
Acquisition of Hansen's Juices, Inc., net of cash acquired -- (37,756)
-------- -----------
Net Cash Used In Investing Activities (401,917) (215,980)
Cash Flows From Financing Activities:
Proceeds from notes payable to bank 520,000 586,000
Repayment of long-term debt (397,281) (406,707)
-------- -----------
Net Cash Provided By Financing Activities 122,719 179,293
-------- -----------
Net Increase in Cash and Cash Equivalents 117,406 110,058
Cash and Cash Equivalents at Beginning of Period 453,344 133,768
-------- -----------
Cash and Cash Equivalents at End of Period $570,750 $ 243,826
======== ===========
SUPPLEMENTAL CASH FLOW AND NONCASH INVESTING AND FINANCING ACTIVITIES
INFORMATION:
Income taxes paid $ 651,800 $ 3,757
Interest paid $ 237,878 $ 265,677
Fair value of assets acquired -- $ 6,139,034
Debt and liabilities assumed -- 5,382,308
-------- -----------
Fair value of common stock issued -- $ 756,726
======== ===========
</TABLE>
<PAGE> 6
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 1998 AND NOVEMBER 30, 1997
(UNAUDITED)
(1) The consolidated financial information of The Fresh Juice Company, Inc. and
Subsidiaries (the Company), included herein has been prepared by the
Company and is unaudited; however, such information reflects all
adjustments (consisting solely of normal recurring adjustments) which are,
in the opinion of management, necessary for a fair statement of the
financial position, results of operations, and cash flows for the interim
periods to which the report relates. The results of operations for the
periods ended May 31, 1998 are not necessarily indicative of the operating
results which may be achieved for the full year. All material intercompany
accounts and transactions have been eliminated in consolidation.
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, 1997 consolidated financial statements.
(2) Inventories at May 31, 1998 and November 30, 1997 consist of the following:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Raw Materials $ 807,798 $ 884,129
Finished Goods 2,677,648 1,753,954
---------- ----------
$3,485,446 $2,638,083
========== ==========
</TABLE>
(3) Hansen's Juices, Inc. (Hansen) which the Company acquired as of December 2,
1996, has been named as one of many defendants in a lawsuit filed by the
Franchise Holders of Southland Corporation (Southland), against Southland
and a large number of the purveyors to the Franchisees of Southland, i.e.,
7-Eleven stores. Hansen was one of the purveyors that has been named as a
defendant. However, there is only one cause of action which pertains to
Hansen's, and Hansen's is joined in that count with Southland, the
Coca-Cola Company and Pepsi-Cola Company. The basis of that cause of action
is that each of the named purveyors conspired to fix prices on soft drinks
by trying to set the Franchisees' retail price of their respective products
in order for the Franchisee(s) to obtain a discount off the wholesale
price. In the count in which Hansen's was named, the plaintiffs seek total
damages in excess of $50,000. The case is captioned 7-Eleven Owners For
Fair Franchising et al. v. The Southland Corporation, et al., is venued in
the Superior Court of the State of California for the County of Alameda and
bears case no. 722272-6. The case was filed in September, 1993. Hansen's
and the plaintiffs in this action have executed a settlement agreement
pursuant to which plaintiffs have agreed to dismiss their action against
Hansen's with prejudice, and Hansen's has agreed to bear its own costs
incurred in the litigation. The settlement is awaiting court approval. As a
result of the settlement and the impending final dismissal of the
proceedings, management of the Company believes that the ultimate
resolution of this matter will not have a material impact on the Company's
results of operations, liquidity or financial condition.
(4) As of February 28, 1998, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings Per Share". Basic earnings per
share is based on net income for the relevant period, divided by the
weighted average number of common shares outstanding during the period.
Diluted earnings per share is based on the net income for the relevant
period, divided by the weighted average number of common shares and common
share equivalents, outstanding during the period. Common share equivalents,
such as outstanding stock options and warrants, are not included in the
computation since the effect would be antidilutive. Earnings per share
amounts for all periods have been presented and where appropriate, restated
to conform to the presentation now required.
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" (SFAS 130) was issued in June 1997 and is effective
for fiscal years beginning after December 15, 1997. The Company believes
that the adoption of this accounting standard will not have a material
effect on the Company's consolidated financial position or results of
operations.
Statement of Financial Accounting Standards No. 131, "Disclosures About
Segments of an Enterprise and Related Information" was issued in June 1997
and is effective for periods beginning after December 15, 1997. This
statement established standards for the way that public business
enterprises report in information about operating segments in annual
financial statements and interim financial reports issued to stockholders.
The Company is currently evaluating the method of adoption it will utilize.
(5) The Company's provision for income taxes for the six months ended May 31,
1997 reflects the benefits of a reduction in its deferred tax asset
valuation account of approximately $357,000, resulting from the utilization
of net operating losses in effect as of November 30, 1996. As of November
30, 1996, these net operating loss carryforwards were fully offset by a
valuation allowance. The Company's remaining net operating losses of
$66,598 were utilized during the six month period ended May 31, 1998.
(6) The Company announced on March 31, 1998 that it had entered into a
letter agreement with Saratoga Beverage Group, Inc. ("Saratoga") regarding
a possible acquisition of the Company by Saratoga at a cash purchase price
of not less than $3.75 per share (the "Letter Agreement"). The proposed
transaction is subject to, among other things, due diligence, financial
contingencies and the negotiation and execution of a definitive agreement.
In the Letter Agreement the Company agreed to certain "No-shop" provisions,
subject to the fiduciary duties of the Company's board of directors,
through not later than April 25, 1998. The Letter Agreement further
provided for the payment to Saratoga by the Company of $750,000 in the
event the Company (i) enters into a definitive agreement and the
transaction is not consummated for reasons other than as a result of
Saratoga failing to obtain financing or complying with its obligations or
(ii) accepts a superior offer on or before a date not later than July 24,
1998. The Letter Agreement also provided for a payment, in lieu of the
$750,000 described above, of not more than $250,000 based upon documented,
out-of-pocket expenses of Saratoga, if the Company is unable to obtain a
fairness opinion from its investment banker with respect to the acquisition
by Saratoga at $3.75 per share and a superior offer is not accepted on or
before a date not later than July 24, 1998.
Simultaneously with the execution of the Letter Agreement, the Company and
Saratoga entered into a confidentiality agreement governing the
confidentiality of information exchanged by the Company and Saratoga in
pursuing the possible acquisition.
The Company subsequently extended the exclusivity period to May 20, 1998
while continuing its negotiations with Saratoga. As previously announced in
the Company's press release dated May 21, 1998, the Company and Saratoga
have allowed the exclusivity period to lapse, without further extension
while the Company and Saratoga continue their negotiations. The Company and
Saratoga have been exploring a restructuring of the per share consideration
to be paid to the Company's shareholders to include cash, in an amount less
than $3.75, plus Saratoga Common Stock as additional consideration, in
order to enable the Company shareholders to maintain a continuing ownership
interest in the combined entity as well as to assist Saratoga in obtaining
financing. At this time, these negotiations are still continuing.
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
For the six months ended May 31, 1998, the Company's net sales have
decreased by 6.3% to $19,510,716, as compared to $20,836,509 for the six months
ended May 31, 1997. For the quarter ended May 31, 1998, the Company's net sales
have decreased by 11.8% to $10,106,672, as compared to $11,458,916 for the
quarter ended May 31, 1997. This decrease in sales primarily resulted from the
Company's loss of a warehouse club, low margin, customer. For the six months
ended May 31, 1998, gross profit decreased by 7.1% to $5,706,723, as compared to
$6,140,359 for the six months ended May 31, 1997. For the quarter ended May 31,
1998, the Company's gross profit decreased by 22.2% to $2,689,417, as compared
to $3,458,702 for the quarter ended May 31, 1997. The decrease in gross profit
was primarily due to the decrease in sales and an increase of raw juice costs as
compared to last year.
The Company's selling, general and administrative expenses have
decreased by 2.5% to $4,286,988 for the six months ended May 31, 1998, as
compared to $4,397,520 for the six months ended May 31, 1997. The Company's
selling, general and administrative expenses have decreased by 5.8% to
$2,217,927 for the quarter ended May 31, 1998, as compared to $2,354,390 for the
quarter ended May 31, 1997. The Company's interest expense, which relates to the
financing obtained in connection with equipping the Florida Plant, the
assumption of debt from the Hansen's Merger, and the Company's existing
$2,500,000 line of credit for working capital, decreased to $237,878 for the six
months ended May 31, 1998, as compared to $275,351 for the six months ended May
31, 1997. Interest expense decreased to $120,119 for the quarter ended May 31,
1998, as compared to $136,927 for the quarter ended May 31, 1997.
Earnings before provision for income taxes have decreased to $1,237,314
for the six months ended May 31, 1998, as compared to $1,513,290 for the six
months ended May 31, 1997. Earnings before provision for income taxes have
decreased to $384,703 for the quarter ended May 31, 1998, as compared to
$999,035 for the quarter ended May 31, 1997. This decrease resulted from, among
other items, a reduction in net sales, an increase in raw juice costs and costs
of more than $100,000 relating to the proposed transaction with Saratoga
Beverage Group, Inc.
FINANCIAL CONDITION
The current and total assets of the Company have increased to
$8,308,497 and $23,404,897, respectively, at May 31, 1998, as compared to
$6,734,105 and $22,093,344, respectively, at November 30, 1997. The Company's
trade accounts receivable and inventories have increased to $3,739,362 and
$3,485,446, respectively, at May 31, 1998, as compared to $3,156,893 and
$2,638,083, respectively, at November 30, 1997. Accounts payable and accrued
expenses have increased to $3,757,283 at May 31, 1998 as compared to $3,149,102
at November 30, 1997. Current installments of long-term debt have decreased to
$1,071,661 at May 31, 1998 as compared to $1,202,074 at November 30, 1997.
Additional draws on the Company's credit line, used to pay the income taxes due
for the fiscal year ended November 30, 1997 and for the six months ended
May 31, 1998, have resulted in an increase in note payable to $1,320,000 at
May 31, 1998, as compared to $800,000 at November 30, 1997.
LIQUIDITY
The Company has working capital of $2,011,503 at May 31, 1997 as
compared to $1,319,323 at November 30, 1997. The change in the Company's working
capital results primarily from earnings from operations. The Company requires
capital to support its capital improvements and the level of inventory required
to meet current demand as well as expected future increases in demand for its
products. To provide additional liquidity, in August 1996, the Company obtained
a $2,500,000 line of credit with Fleet Bank, N.A.. At May 31, 1998, the amount
drawn on the line was $1,320,000, leaving $1,180,000 available as of such date.
As of July 15, 1998, approximately $1,180,000 of the line of credit is still
available, depending upon qualified levels of accounts receivable and
inventories as defined in the Loan Agreement. The Company typically invests
approximately $2.5 million from January through June to replenish its yearly
fresh-frozen juice inventory. The Company believes that it has sufficient
liquidity to conduct its business and to build its fresh-frozen inventory during
the remainder of the Florida harvest season to meet the Company's current
customers' demand for its fresh-frozen products. A lack of availability of
quality fruit and higher cost of citrus could adversely affect the Company's
operations. In connection with the Hansen's Merger, the Company assumed the debt
obligations of Hansen's. The Company believes that the results of its operations
(inclusive of Hansen's) will be sufficient to meet these additional debt
obligations.
On August 1, 1998, the Company has a balloon payment due on the
mortgage payable in connection with the Florida plant in the amount of $458,754.
In addition, the Company's $2,500,000 line of credit with its institutional
lender was scheduled to terminate on August 5, 1998. The Company has been
granted a 90-day extension on its line of credit. During the 90-day extension
period, the Company intends to refinance its line of credit. In addition, the
Company intends to negotiate a new instrument or utilize its existing line of
credit to payoff the balloon payment due August 1, 1998. Management believes
that the terms of the extension and new instrument will not have an adverse
effect on the Company's results of operations, financial condition or liquidity.
The Company was not in compliance with its debt to equity covenant at
May 31, 1998. Management has obtained a waiver of such non-compliance from its
bank.
Year 2000 Issue
Many existing computer programs use only two digits rather than four to
specify a year in the date field. These programs were designed and developed
without considering the impact of the upcoming change in the century. If not
corrected, many computer applications could fail or create erroneous results by
or at the Year 2000. The Company utilizes software and related computer
technologies essential to its operations that will be affected by the Year 2000
issue. The Company has undertaken a systems' readiness program, which is
designed to mitigate the risks associated with the Year 2000 issue. This
program involves an analysis of systems to determine those that are not
presently Year 2000 compliant, the establishment of a plan to either modify or
replace those systems and the modification and procurement of systems to make
them Year 2000 compliant. Although the Company is endeavoring to ensure that
the Year 2000 readiness program is comprehensive, it can make no assurance that
the program will address all Year 2000 compliance issues in a timely manner. If
such modifications and procurements are not completed or if problems are not
discovered and rectified on a timely basis, the Year 2000 issue may have a
material impact on the operations of the Company. The Company has identified,
replaced and modified some of these systems during fiscal year 1997 and is
scheduled, for reasons other than Year 2000 issues, to rebuild its network
systems for its Northeast and Florida operations during fiscal 1998.
<PAGE> 8
UPDATE OF STATUS OF NEGOTIATIONS WITH SARATOGA BEVERAGE GROUP, INC.
The Company announced on March 31, 1998 that it had entered into a letter
agreement with Saratoga Beverage Group, Inc. ("Saratoga") regarding a possible
acquisition of the Company by Saratoga at a cash purchase price of not less
than $3.75 per share (the "Letter Agreement"). The proposed transaction is
subject to, among other things, due diligence, financial contingencies and the
negotiation and execution of a definitive agreement.
In the Letter Agreement the Company agreed to certain "No-shop" provisions,
subject to the fiduciary duties of the Company's board of directors, through not
later than April 25, 1998. The Letter Agreement further provided for the payment
to Saratoga by the Company of $750,000 in the event the Company (i) enters into
a definitive agreement and the transaction is not consummated for reasons other
than as a result of Saratoga failing to obtain financing or complying with its
obligations or (ii) accepts a superior offer on or before a date not later than
July 24, 1998. The Letter Agreement also provided for a payment, in lieu of the
$750,000 described above, of not more than $250,000 based upon documented,
out-of-pocket expenses of Saratoga, if the Company is unable to obtain a
fairness opinion from its investment banker with respect to the acquisition by
Saratoga at $3.75 per share and a superior offer is not accepted on or before a
date not later than July 24, 1998.
Simultaneously with the execution of the Letter Agreement, the Company and
Saratoga entered into a confidentiality agreement governing the confidentiality
of information exchanged by the Company and Saratoga in pursuing the possible
acquisition.
The Company subsequently extended the exclusivity period to May 20, 1998
while continuing its negotiations with Saratoga. As previously announced in the
Company's press release dated May 21, 1998, the Company and Saratoga have
allowed the exclusivity period to lapse without further extension while the
Company and Saratoga continue their negotiations. The Company and Saratoga have
been exploring a restructuring of the per share consideration to be paid to the
Company's shareholders to include cash, in an amount less than $3.75, plus
Saratoga Common Stock as additional consideration, in order to enable the
Company shareholders to maintain a continuing ownership interest in the combined
entity as well as to assist Saratoga in obtaining financing. At this time, these
negotiations are still continuing.
<PAGE> 9
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
On April 3, 1998, the Company filed a current report on
Form 8-K which reported on, among other items, that on March 31, 1998 the
Company announced that
(i) it had entered into a letter agreement with Saratoga Beverage Group,
Inc. ("Saratoga") regarding a possible acquisition of the Company by Saratoga
at a cash purchase price of not less than $3.75 per share (the "Letter
Agreement"). The proposed transaction was subject to, among other things, due
diligence, financial contingencies and the negotiation and execution of a
definitive agreement;
(ii) simultaneously with the execution of the Letter Agreement, the
Company and Saratoga entered into a confidentiality agreement governing the
confidentiality of information exchanged by the Company and Saratoga in
pursuing the possible acquisition; and
(iii) the Company had also been advised that Saratoga and Steven Smith, a
director, President and shareholder of the Company, have entered into an Option
Agreement dated March 16, 1998 and executed by Mr. Smith on March 18, 1998 (the
"Option Agreement") whereby Mr. Smith had granted to Saratoga the option to
purchase 825,000 shares of his common stock in the Company at $3.00 per share.
The Option Agreement provides for the consideration to be paid to Mr. Smith to
be increased under certain circumstances involving an acquisition of the
Company at a price in excess of $3.00 per share.
No financial statements were filed with the above-referenced current report.
<PAGE> 10
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.
Dated: July 15, 1998 By: /s/ Steven M. Bogen
---------------------------
Steven M. Bogen
Co-Chairman of the Board and
Chief Executive Officer
(principal executive officer)
Dated: July 15, 1998 By: /s/ Mark Feldman
---------------------------
Mark Feldman, Chief Financial
Officer (principal financial officer and
principal accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> MAY-31-1998
<CASH> 570,750
<SECURITIES> 0
<RECEIVABLES> 4,028,399
<ALLOWANCES> 289,037
<INVENTORY> 3,485,446
<CURRENT-ASSETS> 8,308,497
<PP&E> 9,035,916
<DEPRECIATION> 2,171,573
<TOTAL-ASSETS> 23,404,897
<CURRENT-LIABILITIES> 6,296,994
<BONDS> 0
0
0
<COMMON> 66,797
<OTHER-SE> 12,770,666
<TOTAL-LIABILITY-AND-EQUITY> 23,404,897
<SALES> 19,510,716
<TOTAL-REVENUES> 19,566,173
<CGS> 13,803,993
<TOTAL-COSTS> 18,090,981
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 237,878
<INCOME-PRETAX> 1,237,314
<INCOME-TAX> 563,108
<INCOME-CONTINUING> 674,206
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 674,206
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
