<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 August 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 October
15, 1998 was 6,466,731.
<PAGE> 2
PART I
ITEM 1. FINANCIAL STATEMENTS
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AUGUST 31, 1998 AND NOVEMBER 30, 1997
<TABLE>
<CAPTION>
1998 1997
----------- ----------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 82,892 453,344
Trade accounts receivable................................. 3,470,049 3,156,893
Inventories............................................... 3,454,698 2,638,083
Current portion of notes receivable....................... 100,538 131,101
Prepaid income tax........................................ 113,481 8,000
Deferred income taxes..................................... 185,720 145,615
Prepaid and other current assets.......................... 412,631 201,069
----------- ----------
Total current assets............................... 7,820,009 6,734,105
----------- ----------
Property, plant and equipment, at cost:
Land...................................................... 30,000 30,000
Building and improvements................................. 3,062,155 2,839,823
Equipment................................................. 5,605,204 5,260,058
Molds..................................................... 264,333 264,333
Automobiles............................................... 290,122 266,255
----------- ----------
9,251,814 8,660,469
Less accumulated depreciation............................. 2,357,783 1,741,718
----------- ----------
Net property, plant and equipment.................. 6,894,031 6,918,751
Notes receivable, net of current portion.................... 378,095 365,621
Excess of cost over estimated fair values of net assets
acquired, net of accumulated amortization of $773,579 and
$496,379 in 1998 and 1997, respectively................... 6,618,751 6,895,951
Trademarks, patents, and other intangibles, net of
accumulated amortization of $237,709 and $112,156 in 1998
and 1997, respectively.................................... 1,014,230 1,075,820
Other assets................................................ 113,405 103,096
----------- ----------
Total assets....................................... 22,838,521 22,093,344
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Note payable.............................................. 1,780,000 800,000
Current installments of long-term debt.................... 662,628 1,202,074
Accounts payable and accrued expenses..................... 3,546,381 3,149,102
Income taxes payable...................................... 15,084 263,606
----------- ----------
Total current liabilities.......................... 6,004,093 5,414,782
Long-term debt and obligations under capital lease, net of
current installments...................................... 3,197,095 3,597,151
Deferred rent............................................... 133,709 144,254
Deferred income taxes....................................... 824,004 773,900
----------- ----------
Total liabilities.................................. 10,158,901 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......................................... 3,444,127 2,927,764
----------- ----------
12,964,882 12,448,519
Less cost of common shares held in treasury:
212,938 shares 285,262 285,262
----------- ----------
Total shareholders' equity......................... 12,679,620 12,163,257
Commitments and contingencies
----------- ----------
Total liabilities and shareholders' equity......... $22,838,521 22,093,344
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 3
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED AUGUST 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net Sales $ 28,649,567 $ 31,491,349
Cost of Goods Sold 21,000,420 22,639,803
------------ ------------
Gross Profit 7,649,147 8,851,546
Selling, General and Administrative Expenses 6,429,154 6,481,003
------------ ------------
Earnings From Operations 1,219,993 2,370,543
Interest Income 40,159 20,611
Interest Expense (367,113) (401,345)
Other Income 37,881 19,267
------------ ------------
Earnings Before Income Taxes 930,920 2,009,076
Income Taxes 414,557 518,796
------------ ------------
Net Earnings 516,363 1,490,280
Retained Earnings, Beginning of Period 2,927,764 1,560,441
------------ ------------
Retained Earnings, End of Period $ 3,444,127 $ 3,050,721
============ ============
Weighted Average Shares Outstanding 6,466,731 6,466,731
Basic and Diluted Earnings per Share .08 .23
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED AUGUST 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net Sales $ 9,138,851 $ 10,654,840
Cost of Goods Sold 7,196,427 7,943,653
----------- ------------
Gross Profit 1,942,424 2,711,187
Selling, General and Administrative Expenses 2,142,166 2,083,483
----------- ------------
(Loss) Earnings From Operations (199,742) 627,704
Interest Income 10,435 6,488
Interest Expense (129,235) (125,994)
Other Income (Expense) 12,148 (12,412)
----------- ------------
(Loss) Earnings Before Income Taxes (306,394) 495,786
Income Taxes (148,551) 238,321
----------- ------------
Net (Loss) Earnings (157,843) 257,465
Retained Earnings, Beginning of Period 3,601,970 2,793,256
----------- ------------
Retained Earnings, End of Period $ 3,444,127 $ 3,050,721
=========== ============
Weighted Average Shares Outstanding, 6,466,731 6,466,731
Basic and Diluted Earnings Per Share (.02) .04
=========== ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 5
THE FRESH JUICE COMPANY, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED AUGUST 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 516,363 $ 1,490,280
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization 992,365 1,086,638
Deferred income taxes 9,999 51,261
Deferred building rent (10,545) 4,314
Changes in assets and liabilities, net of assets acquired
and liabilities assumed:
Trade accounts receivable (313,156) (400,427)
Inventories (816,615) (1,042,593)
Prepaid and other current assets (317,043) 2,694
Note receivables and other assets 7,780 175,909
Accounts payable and accrued expenses 397,279 (676,848)
Income taxes payable (248,522) 457,868
--------- -----------
Net Cash Provided By Operating Activities 217,905 1,149,096
Cash Flows From Investing Activities:
Acquisition of distribution route (7,328) --
Acquisitions of property, plant and equipment (621,527) (292,170)
Acquisition of Hansen's Juices, Inc., net of cash acquired -- (37,756)
--------- -----------
Net Cash Used In Investing Activities (628,855) (329,926)
Cash Flows From Financing Activities:
Proceeds from notes payable to bank 980,000 586,000
Repayment of long-term debt (939,502) (672,847)
--------- -----------
Net Cash Provided By (Used In) Financing Activities 40,498 (86,847)
--------- -----------
Net Increase (Decrease) in Cash and Cash Equivalents (370,452) 732,323
Cash and Cash Equivalents at Beginning of Period 453,344 133,768
--------- -----------
Cash and Cash Equivalents at End of Period $ 82,892 $ 866,091
========= ===========
SUPPLEMENTAL CASH FLOW AND NONCASH INVESTING AND FINANCING ACTIVITIES
INFORMATION:
Income taxes paid $ 720,541 $ 174,753
Interest paid $ 238,080 $ 399,828
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
AUGUST 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. Certain items from the prior year have
been reclassified to conform to the current year presentation. The results
of operations for the period ended August 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 August 31, 1998 and November 30, 1997 consist of the
following:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Raw Materials $1,200,514 $ 884,129
Finished Goods 2,254,184 1,753,954
---------- ----------
$3,454,698 $2,638,083
========== ==========
</TABLE>
(3) Hansen's Juices, Inc. (Hansen's) 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's is one of the purveyors that was 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
obtained summary judgement dismissing the case against it and plaintiffs
filed a timely notice of appeal. Hansen's and the plaintiffs in this action
have executed a settlement agreement pursuant to which plaintiffs have
agreed to dismiss their appeal, and Hansen's has agreed to bear its own
costs incurred in the litigation. The settlement was approved by the court,
however an appeal of that order has been taken by certain plaintiffs.
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.
<PAGE> 7
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 nine months ended August
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
$72,692 were utilized during the nine month period ended August 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 was subject to, among other things, due diligence, financial
contingencies and the negotiation and execution of a definitive agreement.
The Company, Saratoga and Rowale Corp., a wholly owned subsidiary of
Saratoga, entered into an Agreement and Plan of Merger dated as of August
14, 1998 which provided for the merger of Rowale with and into the Company,
with the Company being the surviving corporation (the "Merger"). In the
Merger, the Company's stockholders were to receive $3.35 in cash per share,
without interest, in exchange for their shares of common stock of the
Company.
On October 14, 1998, Saratoga and the Company announced by a joint news
release that the financial terms of the Merger have been restated. Under
the restated Merger terms, Saratoga will purchase the shares of the
Company's common stock for a purchase price per share of $2.244 in cash and
0.33 shares of Saratoga Class A common stock. By way of example, a holder
of 1,000 shares of the Company's common stock will receive $2,244.00 in
cash and 330 shares of Saratoga Class A common stock. The Merger is subject
to several material conditions, including, among other things, the
consummation of Saratoga's financing of the cash portion of the Merger
consideration, approval of the Merger by the Company's stockholders and
approval of the issuance of Saratoga stock in the Merger by Saratoga's
stockholders. Although there can be no assurance that the Merger will be
completed, it is expected that, subject to satisfaction of all conditions,
the Merger will be consummated late in the fourth quarter of this year.
Under certain conditions, if the Merger is not consummated or the
transaction is terminated, either Saratoga or the Company, depending on the
circumstances, may be entitled to a termination fee.
(7) 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. The Company presently plans to
further extend the termination date of its line of credit when the
extension expires. Management believes that the terms of the extension
will not have an adverse effect on the Company's results of operations,
financial condition or liquidity.
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
For the nine months ended August 31, 1998, the Company's net sales have
decreased by 9.0% to $28,649,567, as compared to $31,491,349 for the nine
months ended August 31, 1997. For the quarter ended August 31, 1998, the
Company's net sales have decreased by 14.2% to $9,138,851, as compared to
$10,654,840 for the quarter ended August 31, 1997. This decrease in sales
primarily resulted from the Company's loss of a warehouse club, low margin,
customer. For the nine months ended August 31, 1998, gross profit decreased by
13.6% to $7,649,147, as compared to $8,851,546 for the nine months ended August
31, 1997. For the quarter ended August 31, 1998, the Company's gross profit
decreased by 28.4% to $1,942,424, as compared to $2,711,187 for the quarter
ended August 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 0.8% to $6,429,154 for the nine months ended August 31, 1998, as
compared to $6,481,003 for the nine months ended August 31, 1997. The Company's
selling, general and administrative expenses have increased by 2.8% to
$2,142,166 for the quarter ended August 31, 1998, as compared to $2,083,483 for
the quarter ended August 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 $367,113 for the
nine months ended August 31, 1998, as compared to $401,345 for the nine months
ended August 31, 1997. Interest expense increased to $129,235 for the quarter
ended August 31, 1998, as compared to $125,994 for the quarter ended August 31,
1997.
Earnings before income taxes have decreased to $930,920 for the nine
months ended August 31, 1998, as compared to $2,009,070 for the nine months
ended August 31, 1997. The Company incurred a loss before income taxes of
$306,394 for the quarter ended August 31, 1998, as compared to earnings before
income taxes of $495,786 for the quarter ended August 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 $250,000 relating to the proposed transaction
with Saratoga Beverage Group, Inc.
FINANCIAL CONDITION
The current and total assets of the Company have increased to
$7,820,009 and $22,838,521, respectively, at August 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 $3,470,049 and
$3,454,698, respectively, at August 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 $3,546,381 at August 31, 1998 as compared to
$3,149,102 at November 30, 1997. Current installments of long-term debt have
decreased to $662,628 at August 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 nine months
ended May 31, 1998 and the payoff of the mortgage in connection with the Florida
plant, have resulted in an increase in note payable to $1,780,000 at August 31,
1998, as compared to $800,000 at November 30, 1997.
LIQUIDITY
The Company has working capital of $1,815,916 at August 31, 1998 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 August 31, 1998, the
amount drawn on the line was $1,780,000, leaving $720,000 available as of such
date. As of October 15, 1998, approximately $720,000 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 has substantially completed building
its fresh-frozen inventory for this year and believes that it presently has
sufficient liquidity to conduct its business and to maintain sufficient levels
of inventory to meet 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.
<PAGE> 9
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. The Company presently plans to further
extend the termination date of its line of credit when the extension expires.
Management believes that the terms of the extension will not have an adverse
effect on the Company's results of operations, financial condition or
liquidity.
Year 2000
Background
In the past, many computers, software programs, and other information
technology ("IT systems"), as well as other equipment relying on microprocessors
or similar circuitry ("non-IT systems"), were written or designed using two
digits, rather than four, to define the applicable year. As a result,
date-sensitive systems (both IT systems and non-IT systems) may recognize a
date identified with "00" as the year 1900, rather than year 2000. This is
generally described as the Year 2000 issue. If this situation occurs, the
potential exists for system failures or miscalculations, which could impact
business operations.
State of Readiness
The Company began a concerted effort to address its Year 2000 issues in
fiscal year 1997 as part of its system's readiness program. A team of
individuals from the Company, as well as outside professionals, (Y2K Team)
report to the Chief Financial Officer.
Under the auspices of the Y2K Team, the Company believes that it has
identified all significant IT systems and non-IT systems that require
modification in connection with Year 2000 issues. Internal and external
resources have been used and are continuing to be used, to make the required
modifications and test Year 2000 readiness. The required modifications of most
significant systems are under way. The Company plans on completing the
modifications and testing of all significant systems by the end of fiscal 1999.
In addition, through its Y2K Team, the Company is conducting on going
communications with companies with which it does significant business
(collectively, its "business partners") to determine their Year 2000 readiness
and the extent to which the Company is vulnerable to any other organization's
Year 2000 issues. Based on these on going communications and related responses,
the Company will be monitoring the Year 2000 preparations and state of
readiness of its business partners. Although the Company is not aware of any
significant Year 2000 problems with its business partners, there can be no
guarantee that the systems of other organizations on which the Company's
systems rely will be converted in a timely manner, or that a failure to convert
by another organization, or a conversion that is incompatible with the
Company's systems, would not have a material adverse effect on the Company.
Costs
The total cost of the Company's Year 2000 activities has not been and is
not anticipated to be material to its financial position or results of
operations in any given year. As of the end of the third quarter of fiscal 1998,
the Company had spent approximately $75,000 on Year 2000 issues. Many of these
costs were to be incurred as the Company, for reasons other than Year 2000
issues, rebuilds its network systems for its Northeast and Florida operations.
The total costs to the Company of addressing Year 2000 issues is estimated to be
less than $250,000. These total costs, as well as the date on which the Company
plans to complete the Year 2000 modification and testing processes, are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events, including the continued availability of certain resources,
third-party modification plans and other factors. However, there can be no
guarantee that these estimates will be achieved, and actual results differ from
those estimates.
Risks
The Company utilizes IT systems and non-IT systems in many aspects of
its business. Year 2000 problems in some of the Company's systems could possibly
disrupt some operations, but the Company does not expect that any such
disruption would have a material adverse impact on the Company's operating
results.
The Company is also exposed to the risk that one or more of its
suppliers or vendors could experience Year 2000 problems that could impact the
ability of such suppliers or vendors to provide goods and services. Although
this risk is lessened by the availability of alternative suppliers, the
disruption of certain services, such as utilities, could, depending upon the
extent of the disruption, potentially have a material adverse impact on the
Company's operations.
Contingeny Plans
The Y2K Team is in the process of developing contingency plans for the
Company's significant IT systems and non-IT systems requiring Year 2000
modification. These contingency plans will include the identification,
acquisitions and/or preparation of backup systems, suppliers and vendors.
<PAGE> 10
UPDATE OF STATUS OF PROPOSED MERGER TRANSACTION 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 was
subject to, among other things, due diligence, financial contingencies and the
negotiation and execution of a definitive agreement.
The Company, Saratoga and Rowale Corp., a wholly owned subsidiary of
Saratoga, entered into an Agreement and Plan of Merger dated as of August 14,
1998 which provided for the merger of Rowale with and into the Company, with the
Company being the surviving corporation (the "Merger"). In the Merger, the
Company's stockholders were to receive $3.35 in cash per share, without
interest, in exchange for their shares of common stock of the Company.
On October 14, 1998, Saratoga and the Company announced by a joint news
release that the financial terms of the Merger have been restated. Under the
restated Merger terms, Saratoga will purchase the shares of the Company's common
stock for a purchase price per share of $2.244 in cash and 0.33 shares of
Saratoga Class A common stock. By way of example, a holder of 1,000 shares of
the Company's common stock will receive $2,244.00 in cash and 330 shares of
Saratoga Class A common stock. The Merger is subject to several material
conditions, including, among other things, the consummation of Saratoga's
financing of the cash portion of the Merger consideration, approval of the
Merger by the Company's stockholders and approval of the issuance of Saratoga
stock in the Merger by Saratoga's stockholders. Although there can be no
assurance that the Merger will be completed, it is expected that, subject to
satisfaction of all conditions, the Merger will be consummated late in the
fourth quarter of this year. Under certain conditions, if the Merger is not
consummated or the transaction is terminated, either Saratoga or the Company,
depending on the circumstances, may be entitled to a termination fee.
<PAGE> 11
PART II - OTHER INFORMATION
Item 5. Other Information
Michael Brown, a member of the Board of Directors of the
Company, resigned as a Director of the Company effective October 8, 1998 citing
personal reasons.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
On August 20, 1998, the Company filed a current report on
Form 8-K which reported on, among other items, that on August 14, 1998 the
Company announced that it had entered into an Agreement and Plan of Merger dated
as of August 14, 1998 (the "Merger Agreement") with Saratoga Beverage Group,
Inc. ("Saratoga") and a wholly owned subsidiary of Saratoga, Rowale Corp.
("Rowale") pursuant to which Rowale will be merged with and into the Company
(the "Merger"). Pursuant to the terms of the Merger Agreement, Saratoga agreed
to purchase the Company's common stock, par value $.01 per share, for $3.35 per
share in cash.
No financial statements were filed with the above-referenced current report.
<PAGE> 12
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: October 15, 1998 By: /s/ Steven M. Bogen
---------------------------
Steven M. Bogen
Co-Chairman of the Board and
Chief Executive Officer
(principal executive officer)
Dated: October 15, 1998 By: /s/ Mark Feldman
---------------------------
Mark Feldman, Chief Financial
Officer (principal financial officer and
principal accounting officer)
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