<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period
ended November 30, 1993; or
-----------------
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period
from __________ to __________.
Commission File Number: 33-12173
AMERICOLD CORPORATION
(Exact name of registrant as specified in its charter)
OREGON 93-0295215
(State of Incorporation) (I.R.S. Employer
Identification Number)
7007 S.W. Cardinal Lane, Suite 135
Portland, Oregon 97224
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (503) 624-8585
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 / /
Number of shares outstanding of the registrant's common stock, par
value $.01 per share, as of December 31, 1993: 4,863,999 shares.
<PAGE>
AMERICOLD CORPORATION
Form 10-Q
INDEX
-----
Page
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Operations 5
Consolidated Statements of Cash Flows 8
Notes to Consolidated Financial Statements 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 17
PART II OTHER INFORMATION
Item 1. Legal Proceedings 28
Item 6. Exhibits and Reports on Form 8-K 32
SIGNATURES 33
EXHIBIT INDEX 34
<PAGE>
Item 1. Financial Statements
PART I - Financial Information
AMERICOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
Last day of February 1993 and November 1993
(In thousands, except share data)
Last day of Last day of
February 1993 November 1993
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash $ 2,449 $ 7,943
Trade receivables, net 19,734 19,796
Other receivables, net
(note 5) 1,360 2,470
Prepaid expenses 2,905 2,235
Other current assets 2,177 460
----------- -------------
Total current assets 28,625 32,904
Property, plant and equipment,
less accumulated depreciation
of $115,088 and $141,232,
respectively (note 8) 359,629 384,731
Cost in excess of net assets
acquired, less accumulated
amortization of $14,699 and
$16,597, respectively 85,094 83,196
Other noncurrent assets (note 7) 16,803 35,571
--------- -------------
Total assets $ 490,151 $ 536,402
========== =============
LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 6,340 $ 7,189
Accrued interest 10,168 13,402
Accrued expenses 7,970 7,945
Deferred revenue 5,215 5,435
Current maturities of
long-term debt 10,950 2,423
Other current liabilities 4,038 5,243
---------- ----------
Total current liabilities 44,681 41,637
Long-term debt, less current
maturities (note 7) 443,003 469,127
Deferred income taxes (note 8) 14,433 105,492
Other noncurrent liabilities
(note 8) 8,436 14,380
---------- ----------
Total liabilities 510,553 630,636
---------- ----------
Preferred stock, $100 par value;
authorized 1,000,000 shares;
issued and outstanding 43,860
and 49,672 shares, respectively,
(notes 6 and 9) 4,773 5,399
---------- ----------
Common stockholders' deficit
(note 3): Common stock,
$.01 par value; authorized
10,000,000 shares; issued and
outstanding 4,850,666 and
4,863,999 shares,
respectively 49 49
Additional paid-in capital 48,762 49,081
Retained deficit (73,957) (148,734)
Equity adjustment to recognize
minimum pension liability (29) (29)
----------- -----------
Total common
stockholders' deficit (25,175) (99,633)
----------- -----------
Total liabilities,
preferred stock and
common stockholders'
deficit $ 490,151 $ 536,402
========== ===========
See accompanying notes to consolidated financial statements.
<PAGE>
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and nine months ended last day of November 1992 and 1993
(In thousands, except per share data)
Three Three Nine Nine
months months months months
ended ended ended ended
last day of last day of last day of last day of
November November November November
1992 1993 1992 1993
----------- ------------ ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales
(note 5) $ 51,384 $ 53,645 $ 148,735 $ 152,540
---------- ---------- ---------- ---------
Operating
expenses:
Cost of sales 32,432 33,234 90,098 94,960
Amortization of
cost in excess
of net assets
acquired 633 633 1,899 1,899
Selling and
administrative
expenses 6,611 6,970 20,414 20,573
---------- ---------- ---------- ---------
Total operat-
ing expenses 39,676 40,837 112,411 117,432
---------- ---------- ---------- ----------
Gross operating
margin 11,708 12,808 36,324 35,108
---------- ---------- ---------- ---------
Other (expense)
income:
Interest
expense (13,042) (13,868) (38,831) (41,535)
Other, net (68) 63 (273) (49)
----------- ---------- ----------- ----------
Total other
expense (13,110) (13,805) (39,104) (41,584)
----------- ----------- ----------- ----------
Loss before income
taxes, extra-
ordinary item
and cumulative
effect of
accounting
principle
changes (1,402) (997) (2,780) (6,476)
Provision (benefit)
for income
taxes (note 4) (35) (327) 2,412 (107)
---------- ----------- ---------- ----------
Net loss before
extraordinary
item and cumu-
lative effect
of accounting
principle
changes (1,367) (670) (5,192) (6,369)
Extraordinary item,
net of income tax
benefit of $1,192
(note 7) - - - (1,848)
Cumulative effect on
prior years of
accounting principle
changes for (note 8):
Income taxes - - - (63,533)
Postretirement
benefits other than
pensions, net of
income tax benefit
of $1,490 - - - (2,401)
---------- ----------- ----------- ----------
Net loss
$ (1,367) $ (670) $ (5,192) $ (74,151)
=========== =========== =========== ==========
Net loss per
common share
(note 6)
Net loss
before extra-
ordinary item
and cumulative
effect of
accounting
principle
changes $ (0.31) $ (0.17) $ (1.16) $ (1.40)
Extraordi-
nary item - - - (.38)
Cumulative
effect of
accounting
principle
changes:
Income taxes - - - (13.09)
Postretirement
benefits other
than pensions - - - (0.50)
---------- ----------- ----------- ---------
Net loss per
common share $ (0.31) $ (0.17) $ (1.16) $ (15.37)
=========== =========== =========== =========
Weighted average
number of shares
outstanding 4,837 4,853 4,835 4,852
========== ========== ========== =========
See accompanying notes to consolidated financial statements.
<PAGE>
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended last day of November 1992 and 1993
(In thousands)
Nine months Nine months
ended ended
last day of last day of
November 1992 November 1993
------------- -------------
(Unaudited) (Unaudited)
Cash flows from operating
activities:
Net loss $ (5,192) $ (74,151)
Adjustments to reconcile net
loss to net cash provided
by operating activities:
Depreciation 13,585 14,538
Amortization and other
noncash expenses 3,628 4,306
Changes in assets and
liabilities 8,868 9,657
Provision for deferred taxes 356 (3,334)
Cumulative effect of account-
ing principle changes - 65,934
Write-off of unamortized
issuance costs - 3,040
Employee stock ownership plan
expense 450 320
------------ -----------
Net cash provided by
operating activities 21,695 20,310
----------- -----------
Cash flows from investing
activities:
Net expenditures for property,
plant and equipment (3,104) (7,559)
Other items, net (729) (998)
------------ ------------
Net cash used by
investing activities (3,833) (8,557)
------------ ------------
Cash flows from financing
activities:
Net payments under
credit agreement (19,000) (8,583)
Principal payments under
capitalizedlease and other
debt obligations (1,560) (1,909)
Proceeds from financing lease 3,045 -
Net proceeds, excluding escrowed
amounts, from sale of mortgage
bonds - 150,000
Retirement of mortgage bonds - (150,000)
Purchase of stock (54) -
Release of escrowed funds - 4,233
----------- -----------
Net cash used by
financing activities (17,569) (6,259)
----------- ------------
Net increase in cash 293 5,494
Cash at beginning of period 1,340 2,449
----------- -----------
Cash at end of period $ 1,633 $ 7,943
=========== ===========
Supplemental disclosure of
cash flow information:
Cash paid year-to-date for
interest, net of amounts
capitalized $ 32,798 $ 37,419
=========== ==========
Capital lease obligations
incurred to lease new
equipment and new facility $ 889 $ 957
=========== ==========
Cash paid during the year
for income taxes $ 2,208 $ 139
=========== ==========
Financing lease proceeds
placed in escrow $ 12,050 $ -
=========== ==========
Bond proceeds placed in
escrow $ - $ 22,284
=========== ==========
See accompanying notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. PRINCIPLES OF CONSOLIDATION
The consolidated balance sheet as of the last day of November
1993; the related consolidated statements of operations for
the three and nine months ended the last day of November 1992
and November 1993; and the related consolidated statements of
cash flows for the nine months ended the last day of November
1992 and November 1993 are unaudited. In the opinion of
management, all adjustments necessary for a fair presentation
of such financial statements have been included. Except for
the extraordinary loss as described in Note 7, and the
cumulative effect of two accounting principle changes as
described in Note 8, such adjustments consisted of normal
recurring items. Interim results are not necessarily
indicative of results for a full year. The financial
information presented herein should be read in conjunction
with the financial statements included in the registrant's
Annual Report on Form 10-K for the year ended February 28,
1993.
2. RECLASSIFICATIONS
Certain prior year financial data have been reclassified to
conform with the current year presentation.
3. COMMON STOCKHOLDERS' DEFICIT
The Company has reserved 300,000 shares of common stock for
issuance under a stock option plan established in 1987. Under
the plan, options are granted by the compensation committee of
the Board of Directors to purchase common stock at a price not
less than 85% of the fair market value on the date the option
is granted.
Information with regard to the plan as of the last day of
November 1993 follows:
Number of Shares Exercise Number of Shares Expiration
Subject to Option Price Exercisable Date
----------------- -------- ---------------- ----------
97,934 $10.00 97,934 May 1998
100,000 $18.95 60,000 June 2000
30,000 $21.88 0 May 2003
The Company has reserved 500,000 shares of common stock for
issuance under a Stock Incentive Plan effective March 1, 1991.
<PAGE>
AMERICOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Under the terms of the plan, officers and key management
employees can receive either common stock or cash in specified
amounts depending upon the financial performance of the
Company measured over a four-year period ending February 28,
1995. As of the last day of November 1993, no shares had been
issued. Since inception of the plan, the Board has approved
a total award of approximately 106,000 shares. Total expense
accrued under this plan for the nine months ended the last day
of November 1993 was approximately $.9 million, and
cumulatively since the beginning of the plan was $1.9 million.
In November 1993, the Company funded the fiscal 1993 Americold
Employee Stock Ownership Plan contribution of $750,000. The
contribution was in the form of 13,333 shares of the Company's
Common Stock and $430,008 in cash.
4. PROVISION FOR INCOME TAXES
The provision for income taxes was computed using an estimated
annual effective tax rate of 38.3% for the three and nine
months ended the last day of November 1992. The annual
effective tax rate was applied to loss before income taxes,
after the add back for depreciation differences and
amortization of cost in excess of net assets acquired.
As discussed in Note 8, the Company adopted Financial
Accounting Standards Board Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" as of the
beginning of fiscal 1994.
As a result of the Omnibus Budget Reconciliation Act of 1993,
the Company's estimated annual effective tax rate increased to
39.2%. The Company recognized a charge to earnings during the
second quarter of fiscal 1994 of approximately $2.6 million as
a result of the increase in tax rates.
5. CONTINGENCY
In the fourth quarter of fiscal 1992, a fire occurred at the
Company's Kansas City, Kansas underground warehouse facility.
The cause and origin investigations have been completed, and
the Company continues to believe the fire began in an area
leased to a tenant. The fire was confined to an
unrefrigerated area of the warehouse; however, a significant
<PAGE>
AMERICOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
amount of product in the facility at the time of the fire
received smoke damage. Lawsuits have been filed and
additional lawsuits may be filed in connection with the fire.
The lawsuits allege, among other things, that the Company was
negligent. The defense of existing lawsuits has been tendered
to the Company's insurance carriers. While the Company
carries substantial property, liability, warehouseman's legal
liability and business interruption insurance, the adequacy of
coverage will depend upon events the Company cannot currently
predict. Although the Company disputes that it has any
liability with respect to the Kansas City fire, and although
the Company does not believe that the ultimate property damage
or liability exposure will exceed insurance coverage, there
can be no assurance that the Company will not be found liable
for damages or that the total damages resulting from the fire
will not exceed its insurance coverage.
A number of tenants and customers discontinued payments on
storage of damaged products or lease space. As of the last
day of November 1992 and 1993, approximately $5.7 million and
$5.9 million, respectively, of billings had been disputed by
the Company's tenants and customers. These disputed billings
have been classified as "Other receivables." Also, as of the
last day of November 1992 and 1993, included in the amount of
"Other receivables" is approximately $5.1 million and $6.2
million, respectively, of expenses related to the fire and
approximately $.9 million and $1.0 million, respectively, for
personal property lost in the fire. Claims for these amounts
have been submitted to the Company's insurance company as part
of its overall insurance claim. The Company has reduced the
total fire-related receivables of $13.1 million as of the last
day of November 1993 by $7.2 million, the amount of the
insurance advances, and $4.1 million, the amount of allowance
established for possibility of non-collection of these
expenses and any disputed billings. The Company has business
interruption insurance which it believes will cover a
significant portion of the loss of business income through the
coverage period. The coverage period has not yet been agreed
upon between the Company and its insurance carrier.
See Management's Discussion and Analysis of Financial
Condition and Results of Operation - "Effect of Kansas City,
Kansas Warehouse Fire" and "Legal Proceedings".
<PAGE>
AMERICOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. LOSS PER COMMON SHARE
Loss per common share is computed by dividing net loss, less
preferred dividend requirements, by the weighted average
number of common shares outstanding. See Exhibit 11,
Statement Re Computation of Per Share Earnings.
7. EXTRAORDINARY LOSS
On March 9, 1993, the Company sold $176.25 million aggregate
principal amount of the Company's 11.5% First Mortgage Bonds,
Series B, due March 1, 2005. The Company also registered $150
million of its existing mortgage bonds, redesignated as Series
A First Mortgage Bonds. The Company used $150 million of the
proceeds from the sale of the Series B bonds to purchase $150
million of existing mortgage bonds. The remaining proceeds,
net of transaction costs, of approximately $22.3 million, were
placed in escrow with the mortgage bond trustee and will be
released to fund construction or acquisition of warehouse
properties. In conjunction with the retirement of the $150
million in bonds, unamortized issuance costs of approximately
$3.0 million were written off, resulting in an extraordinary
loss, net of taxes, of approximately $1.8 million.
8. CUMULATIVE EFFECT ON PRIOR YEARS OF ACCOUNTING PRINCIPLE
CHANGES
a. Postretirement Benefits Other Than Pensions
-------------------------------------------
Effective March 1, 1993, the Company adopted Financial
Accounting Standards Board Statement of Financial
Accounting Standards No. 106, "Employer's Accounting for
Postretirement Benefits Other Than Pensions." This
statement generally requires the recognition of a
liability for obligations for postretirement benefits
expected to be provided to or for an employee. The
Company previously expensed the cost of such benefits,
which are principally health care, as claims were
received.
The Company has elected to recognize this change in
accounting principle on the immediate recognition basis.
The cumulative effects as of March 1, 1993 of adopting
the standard were a decrease in deferred taxes of
approximately $1.5 million, an increase in accrued
postretirement benefits of approximately $3.9 million,
<PAGE>
AMERICOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
and a one-time, non-cash charge to first quarter fiscal
1994 earnings of approximately $2.4 million.
The accumulated postretirement benefit obligation (APBO)
as of March 1, 1993 was $3.9 million. This obligation,
included with "Other noncurrent liabilities" in the
consolidated balance sheet, was recorded in the first
quarter of fiscal 1994 on a cumulative basis as discussed
above. The detail of the APBO is as follows (dollars in
thousands):
March 1, 1993
-------------
Retirees $ 2,538
Active employees 1,353
-------
Total accumulated retirement
benefit obligation $ 3,891
=======
The components of net periodic postretirement expense for
the first nine months are as follows (dollars in
thousands):
Nine Months Ended
November 30, 1993
------------------
Service cost benefits
earned in period $ 68
Interest cost on accumulated
benefit obligation 246
-----
Net expense $ 314
=====
A discount rate of 9% was utilized in determining the
accumulated post-retirement benefit obligation, as well
as the interest cost component of the fiscal 1994 net
periodic expense.
For fiscal 1994, a 13% increase in the medical cost trend
rate was assumed. This rate decreases incrementally to
<PAGE>
AMERICOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
an annual rate of 6% after 7 years. A 1% increase in the
medical trend rate would increase the post-retirement
benefit obligation by $.1 million and increase the net
periodic expense by a negligible amount.
b. Income Taxes
------------
Effective March 1, 1993, the Company adopted Financial
Accounting Standards Board Statement of Financial
Accounting Standards No. 109, "Accounting for Income
Taxes." This statement generally requires the
recognition of a liability or asset for the tax effect of
the differences between the reported amounts of assets
and liabilities for financial statement purposes and
their tax bases. The Company previously accounted for
income taxes utilizing the deferral method.
The Company has elected to recognize this change in
accounting principle on the immediate recognition basis.
The cumulative effects as of March 1, 1993 of adopting
the standard were an increase in net fixed assets of
approximately $31.2 million (the amount of a previous
write-down of assets under APB 11, as a result of the
purchase of the Company in December 1986, net of
subsequent depreciation), an increase in deferred income
taxes of $94.7 million, and a one-time, non-cash charge
to first quarter fiscal 1994 earnings of approximately
$63.5 million. Application of the standard has reduced
earnings before cumulative effect of accounting principle
change by approximately $1.1 million as a result of
increased depreciation for the nine months ended the last
day of November 1993.
As a result of the Omnibus Budget Reconciliation Act of
1993, the Company's estimated annual effective tax rate
increased to 39.2%. The Company recognized a charge to
earnings during the second quarter of fiscal 1994 of
approximately $2.6 million as a result of the increase in
tax rates.
<PAGE>
AMERICOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. PREFERRED STOCK
In November 1993, the Company paid a preferred stock dividend
of 5,812 shares on its Series A Variable Rate Cumulative
Preferred Stock, $100 par value, payable July 1, 1993 to
shareholders of record on July 1, 1993. The preferred stock
is held by the Americold Employee Stock Ownership Plan.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
RESULTS OF OPERATIONS
- ---------------------
THIRD QUARTER RESULTS - Net sales for the third quarter of
fiscal 1994 were $53.6 million, an increase of 4.4% from $51.4
million for the same quarter last fiscal year. The increase
is primarily related to an increase in nonwarehousing sales.
Nonwarehousing sales in the quarter have increased 37.7% from
the corresponding quarter in fiscal 1993 due to a 151.3%
increase in quarry sales and a 6.8% increase in sales from the
Americold Transportation Systems ("ATS") unit. Warehousing
sales in the quarter have increased 1.6% from the
corresponding quarter in fiscal 1993 primarily from handling
revenue. The Company's sales are seasonal. The third quarter
ending November 30 is typically the strongest sales quarter.
Net sales included amounts disputed by customers or tenants of
$1.3 million for the third quarter of fiscal 1993. See Effect
of Kansas City, Kansas Warehouse Fire, below.
Cost of sales for the third quarter of fiscal 1994 were $33.2
million, an increase of 2.5% from $32.4 million for the same
quarter last fiscal year. The increase is primarily related
to increased payroll costs and energy costs, which increased
approximately $1.7 million and $.3 million, respectively, as
a result of increased handling volume at existing facilities
including the quarry and to the acquisition of a warehouse
since the third quarter of fiscal 1993. In addition, cost of
sales increased approximately $.2 million as a result of the
increased activity at ATS. Depreciation increased
approximately $.4 million as a result of the adoption of
Financial Accounting Standards No. 109. Cost of sales
included approximately $2.6 million for an allowance for non-
collection of disputed billings and other expenses for the
third quarter of fiscal 1993. See Effect of Kansas City,
Kansas Warehouse Fire, below.
NINE MONTHS RESULTS - The Company's net sales for the first
three quarters of fiscal 1994 were $152.5 million, an increase
of 2.6% over $148.7 million for the corresponding period in
fiscal 1993.
Americold's net sales for the first nine months of fiscal 1993
and fiscal 1994 are detailed in the table below by activity:
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
NET SALES
(Dollars in Millions)
First Nine Months First Nine Months
Fiscal 1993 Fiscal 1994 % Change
----------- -----------
Amount % Amount % 1993 to 1994
------ --- ------ -- ------------
Storage $ 76.6 51.5% $ 75.0 49.2% (2.1%)
Handling 44.3 29.8% 49.5 32.4% 11.7%
Freezing 5.3 3.6% 5.5 3.6% 3.8%
Leasing 7.6 5.1% 5.6 3.7% (26.3%)
Other 3.2 2.1% 2.6 1.7% (18.8%)
------ ----- ------ ----- -------
Net ware-
housing
sales $137.0 92.1% $138.2 90.6% 0.9%
Net non-
warehousing
sales 11.7 7.9% 14.3 9.4% 22.2%
------ ------- ------ ----- -----
Total net
sales $148.7 100.0% $152.5 100.0% 2.6%
====== ====== ====== ====== =====
Warehousing sales were $138.2 million in the first nine of
fiscal 1994, an increase of .9% from $137.0 million in the
first nine months of fiscal 1993, primarily due to an 11.7%
increase in handling revenue. This increase was partially
offset by a 2.1% decline in storage revenue and a 26.3%
decline in leasing revenue. The decline in storage revenue
resulted from a 1.6% decrease in storage volume, in addition
to price changes and other factors. For the first nine months
of fiscal 1994, 13.7 billion pounds of product were stored
compared to 13.9 billion pounds in the comparable period in
fiscal 1993. Approximately .5 billion of the<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
13.7 billion pounds of product were stored at warehouses
acquired since the end of the third quarter of fiscal 1993.
Approximately $.1 million of the $1.6 million decline in
storage revenue is attributable to the reduced activity at the
Company's Kansas City, Kansas warehouse. An increase in
storage revenue of approximately $2.5 million is attributable
to warehouses acquired since the end of the third quarter of
fiscal 1993. Approximately 90% of the $2.0 million decline in
leasing revenue is attributable to Kansas City. Net sales
included amounts disputed by customers or tenants of $4.9
million for the first nine months of fiscal 1993. See Effect
of Kansas City, Kansas Warehouse Fire - Collectibility of
Amounts Owed, below.
The increase in handling revenue resulted from a 9.5% increase
in volume of product handled. For the first nine months of
fiscal 1994, 13.6 billion pounds were handled by the Company
compared with 12.4 billion in the comparable period in fiscal
1993. Approximately 1.0 billion of the 13.6 billion pounds
were handled at warehouses acquired since the end of the third
quarter of fiscal 1993. Approximately $.5 million of the $5.2
million increase in handling revenue is attributable to Kansas
City, while approximately $2.9 million is attributable to
warehouses acquired since the end of the third quarter of
fiscal 1993.
The Company believes the decreased storage volume is due to a
reduction in certain frozen vegetable stocks across several
production warehouses. The increase in handling volume
relative to storage volume is likely to continue as long as
the Company's customers are able to successfully operate with
lower inventories. The trend among customers is to increase
inventory turnover, and the Company is experiencing an
increase in turns from an annual turn of 5.3 in fiscal 1993 to
6.1 for the first three quarters of fiscal 1994.
Non-warehousing sales increased 22.2% to $14.3 million for the
first nine months of fiscal 1994 from $11.7 million in the
comparable period in fiscal 1993. The increase in sales
during the first three quarters of fiscal 1994 over the first
three quarters of fiscal 1993 from ATS of approximately $.8
million and the increase of quarry sales of approximately $2.2
million helped offset the loss of approximately $.4 million in
sales due to the closure of the records center. Due to the
fire in Kansas City, the records center ceased operations
during the first quarter of fiscal 1994. The closure is not
expected to significantly affect the results of operation of
the Company.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
COST OF SALES - Cost of sales for the first nine months of
fiscal 1994 were $95.0 million, an increase of 5.4% from $90.1
million for the first nine months of fiscal 1993. Excluding
the approximately $3.6 million allowance for non-collection of
disputed billings and other expenses related to the Kansas
City, Kansas warehouse fire, cost of sales for the first nine
months of fiscal 1993 would have been $86.5 million.
Approximately $.6 million of the increase in cost of sales was
due to increased activity at ATS and approximately $2.8
million relates to acquisitions of warehouses since the third
quarter of fiscal 1993. In addition, payroll costs and energy
costs increased approximately $1.5 million and $.5 million,
respectively, as a result of increased handling volume at
existing facilities including the quarry. Depreciation
increased approximately $1.1 million related to the adoption
of Financial Accounting Standards No. 109 and approximately
$.4 million related to the acquisition of new warehouses since
the third quarter of fiscal 1993.
Cost of sales as a percentage of net sales increased to 62.2%
in the first three quarters of fiscal 1994 from 60.6% in the
first three quarters of fiscal 1993, primarily due to
increased activity at ATS and increased handling activity
which carries lower operating margins.
SELLING AND ADMINISTRATIVE EXPENSES - Selling and
administrative expenses for the first three quarters of fiscal
1994 were $20.6 million, an increase of .8% from $20.4 million
for the first three quarters of last fiscal year. Excluding
the warehouses acquired since the third quarter of fiscal
1993, selling and administrative expenses for the first nine
months of fiscal 1994 were $20.2 million. This decrease
primarily reflects a decrease of approximately $.9 million in
salaries and related fringe benefits. Other expenses were
down, including office supplies and communications, while
professional fees, due primarily to one-time expenses for
consulting services related to third party logistics and
administrative expenses, and meeting and travel expenses
increased.
GROSS OPERATING MARGIN - Gross operating margin decreased 3.3%
to $35.1 million for the first nine months of fiscal 1994 from
$36.3 million for the same period in fiscal 1993. Excluding
the $4.9 million of disputed sales related to the Kansas City,
Kansas warehouse fire and the allowance for non-collection of
disputed billings and other expenses of $3.6 million, gross
operating margin for the first nine months of
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
fiscal 1993 would have been virtually unchanged at $35.0
million. Decreased volume and lease revenue at the Kansas
City, Kansas warehouse facility, as a result of the fire,
continues to adversely affect the Company's gross operating
margin.
INTEREST EXPENSE - Interest expense increased to $41.5 million
for the first three quarters of fiscal 1994 from $38.8 million
for the first three quarters of fiscal 1993, as a result of
the mortgage financed acquisition of the new facility in
fiscal 1993 and the increase in the principal amount of
mortgage bonds outstanding. See Financial Condition, below.
LOSS - The Company's loss before income taxes, extraordinary
item and cumulative effect of accounting changes for the first
nine months of fiscal 1994 was $6.5 million compared to a loss
of $2.8 million in the first nine months of fiscal 1993.
Excluding the $4.9 million of disputed sales related to the
Kansas City, Kansas warehouse fire and the allowance for non-
collection of disputed billings and other expenses of $3.6
million, the loss for the first nine months of fiscal 1993
would have been $4.1 million. The principal reasons for the
increased loss includes the increase in interest expense and
the decrease in gross operating margin, discussed above.
EXTRAORDINARY LOSS - During the first quarter of fiscal 1994,
the Company repurchased $150 million in face value of its
Series A Mortgage Bonds. The transaction resulted in an
extraordinary loss to the Company, net of taxes, of
approximately $1.8 million. See Financial Condition, below
and Part I, Item 1, Financial Information, Note 7 of Notes to
Consolidated Financial Statements.
ACCOUNTING STANDARDS - Effective March 1, 1993, the Company
implemented Financial Accounting Standards Board Statement of
Financial Accounting Standard No. 106, "Employer's Accounting
for Postretirement Benefits Other Than Pensions", and
Statement No. 109, "Accounting for Income Taxes". See Part I,
Item 1, Financial Information, Note 8 of Notes to Consolidated
Financial Statements.<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company relies primarily upon cash generated by operations
to service debt and fund capital expenditures. For the first
three quarters of fiscal 1994, net cash flow from operating
activities as reported in the Company's consolidated financial
statements decreased to $20.3 million from $21.7 million for
the first three quarters of fiscal 1993. The decrease is due
primarily to the decrease in deferred income taxes after
adjusting for the effects of the accounting principle change.
Cash provided by operations and the release of escrowed funds
were, together with other items, sufficient to reduce bank
borrowings by $8.6 million, provide for $7.6 million in
expenditures for property, plant and equipment, and increase
the Company's cash balance to $7.9 million at the end of the
third quarter of fiscal 1994 compared to the $1.6 million at
the end of the same quarter of fiscal 1993.
On March 9, 1993, the Company sold $176.25 million aggregate
principal amount of the Company's 11.5% First Mortgage Bonds,
Series B, due March 1, 2005. The Company used $150 million of
the proceeds from the sale of the Series B Bonds to purchase
at par $150 million of outstanding 11.45% First Mortgage
Bonds, due 2002. The remaining $150 million of such First
Mortgage Bonds have been redesignated Series A First Mortgage
Bonds (together with the Series B First Mortgage Bonds, the
"First Mortgage Bonds"). The remaining net proceeds of
approximately $22.3 million were placed in escrow with the
Mortgage Bond Trustee and will be released to fund
construction or acquisition of warehouse properties.
On May 15, 1992, the Company entered into a sale/leaseback
transaction with respect to its Ontario, Oregon warehouse
facility. The transaction generated approximately $15 million
in cash. The Company received approximately $3 million at
closing and the remainder was placed in escrow with the
Mortgage Bond Trustee under the Mortgage Bond Indenture
related to the First Mortgage Bonds. In February 1993, in
anticipation of substituting additional collateral, the
Company received $7.0 million of escrowed funds which the
Company used to reduce its borrowings under the revolving
credit agreement to a level where remaining borrowings were
refinanced with borrowings under its new bank credit agreement
(see Annual Report on Form 10-K for the fiscal year ended
February 28, 1993, Management's Discussion and Analysis of
Financial Condition and Results of Operation - Liquidity and
Capital Resources, page 23). During May 1993, the Company
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
contributed its Tomah, Wisconsin facility, valued at $7.0
million, to the collateral pool for the First Mortgage Bonds.
The remaining approximately $5.0 million of the funds from the
sale/leaseback transaction is being held in escrow pending
substitution of collateral. The Trustee released
approximately $4.2 million as reimbursement to the Company for
construction costs associated with the new addition at the
Fogelsville, Pennsylvania facility. Subsequent to the end of
the quarter, on December 6, 1993, the Trustee released an
additional $1.6 million in anticipation of the contribution of
the new Fogelsville, Pennsylvania facility to the collateral
pool.
Excluding accrued employee stock ownership plan expense, the
Company's working capital position as of the last day of
November 1993 was a negative $8.7 million. This compares to
a negative $15.3 million at fiscal 1993 year end. The
increase in working capital was due primarily to an increase
in cash of $5.5 million and a decrease in current maturities
of long-term debt of $8.5 million which were partially offset
by an increase in accrued interest of $3.2 million and a
decrease of other current assets of $1.7 million. The
Company's historical negative working capital position has not
affected, and is not expected to affect, the Company's ability
to meet its operating commitments. Rather than accumulating
and investing excess cash, the Company pays down the balance
owing on its bank credit agreement on a daily basis when cash
flow from operations exceeds current needs.
The unused and available amount under the bank credit
agreement as of the last day of February 1993 and November
1993 was approximately $5.8 million and $14.3 million,
respectively. The Company borrows under the bank credit
agreement primarily to fund operating expenditures and to make
interest payments.
The commitment level at November 30, 1993 under the bank
credit agreement, as amended on October 1, 1993, was $27.5
million with a maximum of $20 million available for cash
borrowing and a maximum of $10 million available for letter of
credit borrowing. Any amount by which the letter of credit
borrowings exceeds $7.5 million reduces the available cash
amount under the agreement by a like amount. Based on
eligible accounts receivable as of November 30, 1993, the
Company had an available credit line of $14.3 million, of
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
which no amount was borrowed. The Company had approximately
$8.3 million of outstanding letters of credit, principally
related to workers' compensation reserves, against the
available $10.0 million.
As a result of the offering of the Mortgage Bonds and the bank
refinancing, as discussed above, significant long-term debt
repayment requirements after fiscal 1994 have been deferred.
However, the Company continues to recognize the need to
increase operating cash flow and, as circumstances allow, to
obtain alternative sources of financing. Management expects
to continue to use current available excess operating cash
flow as well as additional outside borrowings and escrowed
funds to invest in new or expanded warehouse properties.
Management expects to continue this policy as long as
investment opportunities appear to add to the Company's long-
term value.
The Company's present level of cash flow from operations and
escrowed funds is sufficient to cover all interest payments
and planned capital expenditures for fiscal 1994 and fiscal
1995.
CAPITAL RESOURCES - Expenditures for property, plant and
equipment for the first nine months of fiscal 1994 totaled
$9.3 million. Budgeted fiscal 1994 capital expenditures total
approximately $13.4 million, including approximately $5.3
million for property expansions, and approximately $8.1
million for revenue enhancement or cost reduction expenditures
and routine replacement or betterments. A portion, related
primarily to material handling equipment, is expected to be
leased on an operating or capital lease basis. Expenditures
for the first nine months of fiscal 1994 included
approximately $4.7 million for expansion of the Fogelsville,
Pennsylvania facility, and approximately $4.6 million for
revenue enhancement or cost reductions and routine replacement
or betterments. The Company does not anticipate spending the
total amount of its budgeted fiscal 1994 capital expenditures.
The Company's capital expenditures are substantially
discretionary.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
EFFECT OF KANSAS CITY, KANSAS WAREHOUSE FIRE
- --------------------------------------------
In December 1991, a fire began at the Company's Kansas City,
Kansas underground warehouse facility. As a result of the
fire, the Company's warehousing activities in Kansas City have
operated at a substantially reduced level. The Company
continues to be unable to predict its ability to return the
Kansas City facility to normal operating volume, to attract
new tenants, or the ultimate resolution of liability issues.
The Kansas City warehouse represented approximately 19% of
Americold's total storage capacity and accounted for
approximately 8% of consolidated warehouse sales and
approximately 8% of earnings before interest, taxes,
depreciation and amortization in fiscal 1991. The Company
estimates that as of November 30, 1993, approximately 85% of
the usable refrigerated warehouse space at the facility had
been restored to pre-fire conditions.
IMPACT ON OPERATING EARNINGS - As a result of the fire,
operating earnings at the Kansas City facility have been
adversely affected. The Company has business interruption
insurance which it believes will cover a significant portion
of the loss of business income through the coverage period.
The coverage period has not yet been agreed upon between the
Company and its insurance carrier. There can be no assurance,
however, that business interruption insurance proceeds will be
collected, when such insurance proceeds may be collected or
the amount of such proceeds. Under its insurance policies,
the Company has received advances of $7.2 million as of
November 30, 1993, against pending claims. See
"Collectability of Amounts Owed," below.
POSSIBLE THIRD PARTY LIABILITY FOR STORED PRODUCT - Lawsuits
have been filed in connection with the Kansas City fire. The
lawsuits allege, among other things, various acts of
negligence on the part of the Company. The defense of
existing lawsuits has been tendered to the Company's insurance
carriers. At this stage, the Company is not able to evaluate
the theories upon which the claims and suits are based or the
likelihood of an unfavorable outcome, or to estimate the
amount or range of potential loss, if any. See "Part II,
Item 1. - Legal Proceedings."
COLLECTABILITY OF AMOUNTS OWED - Disputed receivables
associated with the revenues recorded for product stored as
well as expenses related to the fire at the Kansas City
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
facility have been recorded as "Other receivables" since the
fourth quarter of fiscal 1992. The amount of such receivables
included in "Other receivables" at the end of the third
quarter of fiscal 1994 was $1.8 million, net of a $4.1 million
allowance and $7.2 million in insurance advances. The
components of "Other receivables" that relate to the fire are
shown below:
November 30, 1993
-----------------
(Dollars in Millions)
Disputed billings $ 5.9<1>
Fire-related expenses submitted to the
insurance carrier and personal property
lost 7.2
Advances received from insurance carriers (7.2)
Allowance for non-collection of disputed
billings and other expenses (4.1)
---------
Other receivables $ 1.8
========
_________
<1> $5.9 million represents total disputed billings related
to the fire; of this amount, $0.8 million reflects revenues
recorded in the fourth quarter fiscal 1992 and $5.1 million
reflects revenues recorded in fiscal 1993. No disputed
billings have been recorded since third quarter of fiscal
1993.
While the Company believes that a significant portion of these
disputed amounts should be recovered from its business
interruption insurance carrier, there can be no assurance as
to the certainty of collection or the timing thereof.
The Company's establishment of an allowance of $4.1 million is
in consideration of the possibility of noncollection of
disputed billings and other expenses incurred at the Kansas
City facility. In addition, if a portion of the insurance
advances ultimately is not applied to business interruption
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
losses, the Company may be required to reduce operating income
for the period in which the final allocation of such advances
is determined. The Company cannot predict the ultimate
allocation of such advances at this time.<PAGE>
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company is named as a defendant in actions
arising out of the normal course of its business. As of December
31, 1993, the Company was not a party to any pending legal
proceeding that it believes to be material other than lawsuits
filed in connection with the Kansas City fire. See Item 1, "Legal
Proceedings", Form 10-Q, dated October 14, 1993 for the quarter
ended August 31, 1993. See also Part I, Item 2, "Management's
Discussion and Analysis of Financial Condition and Results of
Operation - Effects of Kansas City, Kansas Warehouse Fire".
Five additional suits have been filed in connection with the Kansas
City fire in state or federal court in Kansas subsequent to the
third quarter of 1994: (1) Principal Mutual Life Insurance Company
versus Americold Corporation and Americold Services Corporation
(filed in the United States District Court for the District of
Kansas, December 17, 1993); (2) Glenn Falls Insurance Company and
Metmor Financial, Inc. versus Americold Corporation and Americold
Services Corporation (filed in the United States District Court for
the District of Kansas, December 17, 1993); (3) Marcus Phillips
D/B/A Phillips Confections and Hanover Kansas City, Inc. versus
Americold Corporation and Americold Services Corporation (filed in
the United States District Court for the District of Kansas,
December 28, 1993); (4) Commerce Bank of Kansas City, N.A. versus
Americold Corporation and Americold Services Corporation (filed in
the United States District Court for the District of Kansas,
December 28, 1993); and (5) Fidelity and Deposit Company of
Maryland versus Americold Corporation and Americold Services
Corporation (filed in the District Court of Wyandotte County,
Kansas, December 29, 1993). These suits have been tendered to the
Company's insurance carriers. The suits described in this
paragraph assert claims based upon, among other things, aggravated
and ordinary negligence, breach of contract and bailment
obligations and violations of the Uniform Commercial Code in
connection with the fire.
In addition, two previously described suits related to the fire
have been settled for immaterial amounts subsequent to the end of
the third quarter of 1994: (1) Waddell & Reed, Inc. and Waddell &
Reed Services Company versus Americold Corporation and Americold
Services Corporation (filed in the District Court of Wyandotte
County, Kansas, December 22, 1992); and (2) Real Foods Marketing
Company, Inc. versus Americold Corporation and Americold Services
Corporation, et al. (filed in the District Court of Wyandotte
County, Kansas, April 29, 1993).
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS (cont.)
A total of twenty-one suits arising from the fire are pending in
state and federal courts in Kansas by warehouse and record center
customers, tenants and insurers seeking aggregate specified damages
in excess of $1.1 million and unspecified damages to be proven at
trial. See Item 1, "Legal Proceedings," Form 10-Q dated October
14, 1993 for quarter ended August 31, 1993. Additional lawsuits
may be filed in connection with the fire. The Company and its
insurers are vigorously contesting all actions.
The Company is not able to evaluate the theories upon which the
claims and suits are based or the likelihood of an unfavorable
outcome, or to estimate the amount or range of potential loss, if
any. While the Company carries substantial property, liability,
warehouseman's legal liability and business interruption insurance,
the adequacy of coverage will depend upon events the Company cannot
predict.
The warehouse receipts issued to the public warehouse customers
provide a $.50 per pound limit on the Company's liability for loss
or damage for product stored. As discussed below, two courts have
upheld that provision contained in the Company's warehouse receipts
which limited the amount of damages for which the Company could be
liable upon a finding of ordinary negligence. Of product in
storage in the public warehousing space at the time of the fire,
the Company believes approximately 112 million pounds may have
received smoke damage. Of this amount, approximately 46 million
pounds were stored under warehouse receipts and therefore the
Company may be able to limit its maximum exposure related to these
pounds to approximately $23 million. The remaining approximately
66 million pounds were stored under a warehouse contract with no
express limitation on the Company's liability for loss or damage
for product stored. The Company does not know the aggregate amount
or value of product stored under the contract and therefore cannot
reliably estimate its maximum exposure.
On September 9, 1993 and September 20, 1993, the United States
District Court for the District of Kansas (the "Court") issued
orders in Butler Manufacturing Company et al. versus Americold
Corporation, et al., and the cases consolidated therewith. The
orders were issued in response to motions for partial summary
judgment concerning the enforceability of certain limitation of
liability provisions in the Company's warehouse receipts and
contracts with customers at the Kansas City facility.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS (cont.)
The Court upheld the provision contained in the Company's
warehouse receipts that limited to $.50 per pound the amount of
damages for which the Company could be liable upon a finding of
ordinary negligence. The Court also ruled, however, that the
limitation provisions would not apply to any liability of the
Company for willful or wanton conduct. In addition, the Court held
the limitation of liability provisions contained in the Company's
record storage contracts to be unenforceable. The invalidated
provisions would have excused the Company from any liability for
ordinary negligence and would have limited the total amount of
damages which could be collected from the Company. The Court
denied the Company's request that the Court reconsider its ruling
with respect to the records storage contracts.
On November 19, 1993 and November 23, 1993, the District Court of
Wyandotte County, Kansas, issued an order in Associated Grocers et
al. versus Americold Corporation et al., and cases consolidated
therewith, that reached the same result concerning the
enforceability of the limitation of liability provisions described
above. The Company has requested that the District Court of
Wyandotte County reconsider its ruling with respect to the records
storage contracts.
The Company is unable at this time to assess the effect of these
orders upon the ultimate potential liability of the Company with
respect to the Kansas City fire.
With regard to tenants, the Company does not know the aggregate
amount or value of product stored and therefore cannot reliably
estimate its maximum exposure to tenants.
The Company filed a petition for a declaratory judgment, Americold
Corporation and Americold Services Corporation versus National
Union Fire Insurance Company (filed in the United States District
Court for the District of Kansas, May 27, 1993), requesting the
court to declare the rights and duties of the parties under the
policy of primary general liability insurance and to determine that
there is coverage.
While the Company carries substantial property, liability,
warehouseman's legal liability and business interruption insurance,
the adequacy of coverage will depend upon events the Company cannot
currently predict. One of the Company's principal liability
insurance policies contains an aggregate coverage limit for loss
related to property damage, business interruption and
warehouseman's legal liability. Although the Company disputes that
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS (cont.)
it has any liability with respect to the Kansas City fire, and
although the Company does not believe that the ultimate property
damage or liability exposure will exceed insurance coverage, there
can be no assurance that the Company will not be found liable for
damage or that the total damages resulting from the fire will not
exceed its insurance coverage.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10 Material Contracts
10.1 Nonstatutory Stock Option Agreement
dated May 19, 1993 between the
Company and John P. LeNeveu
10.2 First Amendment, dated October 1,
1993, to the Credit Agreement
between the Company and United
States National Bank of Oregon dated
February 3, 1993
10.3 Employment Agreement dated
December 6, 1993, between the
Company and J. Roy Coxe
11 Statement re Computation of Per Share Earnings
(b) Reports on Form 8-K
A Current Report on Form 8-K, dated September 24,
1993, was filed disclosing two court rulings
related to the enforceability of certain limitation
of liability provisions in the Company's warehouse
receipts and contracts with customers in litigation
in connection with a December 1991 fire at its
Kansas City, Kansas facility.
<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.
AMERICOLD CORPORATION
/s/Joel M. Smith
------------------------------------
JOEL M. SMITH, Senior Vice President
and Chief Financial Officer
Date: January 13, 1994
<PAGE>
AMERICOLD CORPORATION
FORM 10-Q
Exhibit Index
Exhibit Page
- ------- ----
10.1 Nonstatutory Stock Option Agreement
dated May 19, 1993 between the Company
and John P. LeNeveu
10.2 First Amendment, dated October 1, 1993,
to the Credit Agreement between the Company
and United States National Bank of Oregon
dated February 3, 1993
10.3 Employment Agreement dated December 6, 1993,
between the Company and J. Roy Coxe
11 Statement re Computation of
Per Share Earnings
<PAGE> Exhibit 10.1
AMERICOLD CORPORATION
KEY EMPLOYEE STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is effective as of the 19th day of May,
1993 between AMERICOLD CORPORATION (the "Company"), and JOHN P.
LeNEVEU (the "Optionee").
To attract and retain able, experienced and trained
people and to provide additional incentives to key employees, the
Board of Directors adopted and the shareholders of the Company
approved the Company's Key Employee Stock Option Plan (the "Plan").
Pursuant to the Plan, the Compensation Committee of the Board of
Directors (the "Committee") has approved the grant to the Optionee
of an option to purchase shares of the Company's Common Stock, $.01
par value (the "Common Stock"), in the amount indicated below.
This option is a nonstatutory stock option and is not an Incentive
Stock Option as defined in Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, the Company and the Optionee agree as
follows:
1. The Company grants to the Optionee, upon the terms
and conditions set forth below and in the Plan, the right and
option (the "Option") to purchase up to 30,000 shares (the "Option
Shares") of the Company's authorized, but unissued or reacquired,
Common Stock at a purchase price of $21.88 per share.<PAGE>
(a) Subject to reductions in the Option term as
provided in subsection (d) of this Section, the Option shall
continue in effect until and including May 18, 2003 (the
"Expiration Date"); provided, however, that in the event of
the liquidation or dissolution of the Company other than in
connection with a transaction described in subsection (f) of
this Section, the Option, to the extent unexercised, shall
automatically terminate. Except as provided in subsection (d)
of this Section, the Option may be exercised from time to time
over the term of the Option by the purchase of Option Shares
in the following amounts:
(i) During the first year following the grant of
the Option -- none;
(ii) May 19, 1994 -- one-fifth of the Option
Shares;
(iii) May 19, 1995 -- an additional one-fifth of the
Option Shares;
(iv) May 19, 1996 -- an additional one-fifth of the
Option Shares;
(v) May 19, 1997 --an additional one-fifth of the
Option Shares; and
(vi) May 19, 1998 -- the remaining one-fifth of the
Option Shares;
provided, however, if the Optionee does not purchase in any
one year the full number of Option Shares to which the
Optionee is then entitled, the Optionee's rights shall be
cumulative, and the Optionee may purchase those Option Shares
in any subsequent year during the term of the Option.
(b) Except as provided in subsection (d) of this
Section, the Option may not be exercised unless the Optionee
is then employed by the Company or a subsidiary (as defined in
Section 424(f) of the Code) of the Company ("Subsidiary") and
has been so employed continuously since the date the Option
was granted. However, a leave of absence under rules
established by the Board of Directors shall not be deemed an
interruption of employment for purposes of this Agreement.
(c) The Option shall not be transferable except by
will or by the laws of descent and distribution of the state
or country of the Optionee's domicile at the time of the
Optionee's death. Any such transfer of the Option or Option
Shares shall be subject to the terms and conditions of the
Stockholders' Agreement dated as of December 24, 1986, as
currently amended and as amended hereafter (the "Stockholders'
<PAGE>
Agreement"), among the Company, Kelso Equity Partners, L.P.,
Kelso & Company, L.P., Kelso Investment Associates II, L.P.,
KIA III-Americold Inc., L.P., The Northwestern Mutual Life
Insurance Company, New York Life Insurance Company, New York
Life Insurance and Annuity Corporation and various other
shareholders of the Company. The Option shall be exercisable
during the Optionee's lifetime only by the Optionee or the
Optionee's guardian or legal representative.
(d) If the employment of the Optionee by the
Company or a Subsidiary terminates before the Expiration Date,
the following shall apply:
(i) If the employment of the Optionee by the
Company or a Subsidiary terminates for any reason other
than for cause or as a result of voluntary termination
(as described in Section 7 of the Employment Agreement
dated as of May 29, 1992 between the Company and
Optionee), and such termination of employment occurs
before May 19, 1998, the then-unexercised portion of the
Option may be exercised, to the extent that the Optionee
was entitled to do so on the date of termination, at any
time prior to the earlier of (A) the Expiration Date of
the Option, or (B) the expiration of three months after
the date of termination.
(ii) If the employment of the Optionee by the
Company or a Subsidiary terminates for cause or as a
result of voluntary termination (as described in Section
7 of the Employment Agreement dated May 29, 1992 between
the Company and Optionee), and such termination of
employment occurs before May 19, 1998, the then-
unexercised portion of the Option shall expire, and
Optionee shall have no further right or interest in the
Option.
(iii) If the employment of the Optionee by the
Company or a Subsidiary terminates for any reason other
than death or permanent and total disability (as defined
in the Plan), and such termination of employment does not
occur before May 19, 1998, the then-unexercised portion
of the Option may be exercised, to the extent that the
Optionee was entitled to do so on the date of
termination, at any time prior to the earlier of (A) the
Expiration Date of the Option, or (B) the expiration of
three months after the date of termination.
<PAGE>
(iv) If the employment of the Optionee by the
Company or a Subsidiary is terminated because of
permanent and total disability (as defined in the Plan),
and such termination of employment does not occur before
May 19, 1998, the then-unexercised portion of the Option
may be exercised, to the extent that the Optionee was
entitled to do so on the date of termination, at any time
prior to the earlier of (A) the Expiration Date of the
Option, or (B) the expiration of one year after the date
of termination.
(v) If the Optionee dies while employed by the
Company or a Subsidiary, and the date of death does not
occur before May 19, 1998, the then-unexercised portion
of the Option may be exercised, to the extent that the
Optionee was entitled to do so on the date of the
Optionee's death, at any time prior to the earlier of
(A) the Expiration Date of the Option, or (B) the
expiration of one year after the date of the Optionee's
death. However, in the event of the Optionee's death,
the Option may be exercised only as permitted under, and
subject to the terms and conditions of, the Stockholders'
Agreement.
(e) Option Shares may be purchased only upon
receipt by the Company of written notice from the Optionee
specifying the number of Option Shares the Optionee desires to
purchase, accompanied by full payment in cash for the Option
Shares being purchased plus any required withholding tax. In
addition, the written notice shall contain a representation
that the Optionee intends to acquire the Option Shares for
investment and not for resale. Any required withholding tax
shall be paid in cash or, when applicable, through a payroll
deduction no later than the next payroll cycle. No Option
Shares shall be issued until full payment has been made. The
Optionee shall have none of the rights of a shareholder with
respect to any Option Shares until the Optionee becomes the
holder of record of such Option Shares.
(f) If the outstanding shares of Common Stock are
changed into or exchanged for a different number or kind of
shares of the Company or other securities of the Company by
reason of any merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend or
combination of shares, the Committee shall make an appropriate
and equitable adjustment in the number and kind of shares as
to which the unexercised portion of the Option shall be
exercisable, to the end that after such event the Optionee's
right to a proportionate interest in the Company shall be
<PAGE>
maintained as if the Option had already been exercised and the
Option Shares were subject to such change or exchange. Such
adjustment shall be made without change in the total price
applicable to the unexercised portion of the Option and with
a corresponding adjustment in the exercise price per Option
Share. Any such adjustment made by the Committee shall be
final and binding upon the Company, the Optionee and all other
interested persons.
(g) In the event of (i) dissolution or liquidation
of the Company, (ii) a merger in which the Company is not the
surviving corporation, or (iii) a share exchange pursuant to
which the outstanding shares of common Stock of the Company
are acquired by another corporation, then either (i) the
Committee, upon authorization of the Board, shall make an
appropriate and equitable adjustment in the number and kinds
of securities covered by outstanding options, and such options
shall be expressly assumed by the successor corporation, if
any; or (ii) in lieu of such an adjustment, the Board shall
provide a 30-day period prior to such event during which each
Optionee shall have the right to exercise the Optionee's
outstanding options, in whole or in part, without regard to
the time the options have been outstanding and without regard
to any vesting schedule provided for in any option agreement
entered into pursuant to the Plan. If the Board provides for
such a 30-day period, options not exercised shall expire at
the end of such 30-day period.
2. The obligations of the Company under this Agreement
shall be subject to the approval of such state or federal
authorities or agencies as may have jurisdiction in the matter.
The Company shall use its best efforts to take such steps as may be
required by state or federal law or applicable regulations,
including rules and regulations of the Securities and Exchange
Commission and any stock exchange on which the Company's shares may
then be listed, in connection with the issuance of any Option
Shares, the listing of such shares on any such exchange, or the
sale of any Option Shares. The Company shall not be obligated to
issue or deliver any Option Shares if, upon advice of its
legal<PAGE>
counsel, such issuance or delivery would violate state or federal
law.
3. Nothing in the Plan or in this Agreement shall
confer upon the Optionee any right to continued employment with the
Company or any Subsidiary or shall interfere in any way with the
right of the Company or any Subsidiary by whom such Optionee is
employed to terminate the Optionee's employment at any time, either
with or without cause.
4. This Agreement shall be binding upon and shall inure
to the benefit of any successor or successors of the Company, but,
except as provided above, the Option shall not be assigned or
otherwise disposed of by the Optionee.
5. The Option is subject to the terms and conditions of
the Plan. In the event of any inconsistency between this Agreement
and the Plan, the Plan shall control.
IN WITNESS WHEREOF, the parties have executed this
Agreement in duplicate.
COMPANY: AMERICOLD CORPORATION
By: /s/ Ronald H. Dykehouse
-------------------------
Ronald H. Dykehouse, Chairman
and Chief Executive Officer
OPTIONEE:
/s/ John P. LeNeveu
----------------------
John P. LeNeveu
Address:
4655 S.W. Chunut Court
Tualatin, Oregon 97062
<PAGE> Exhibit 10.2
FIRST AMENDMENT TO CREDIT AGREEMENT
BETWEEN
AMERICOLD CORPORATION
AND
UNITED STATES NATIONAL BANK OF OREGON
Dated as of October 1, 1993.
WHEREAS, Americold Corporation ("Americold") and United
States National Bank of Oregon ("U. S. Bank") entered into a credit
agreement dated as of February 3, 1993 (the "Agreement") and
WHEREAS, the parties thereto desire to amend certain of
the terms of the Agreement,
NOW, THEREFORE, for valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, it is agreed as
follows:
1. The definition of "Fixed Charges" in the Agreement
is amended to read as follows:
"Fixed Charges" for any period means, with respect
to Americold and its subsidiaries, (a) the consolidated
interest expense (excluding consolidated interest expense
attributable to original issue discount amortization) of
Americold and its subsidiaries for such period
(calculated without regard to any limitation on the
payment thereof); (b) all obligations with respect to
operating leases of any property (whether real, personal,
or mixed) which is not a capital lease, net of any rent
received with respect to such operating leases; (c)
rental payments with respect to capital leases which
reduce the obligations with respect to capital leases
properly classified as liabilities on the consolidated
balance sheet of Americold and its Subsidiaries in
conformity with generally accepted accounting principles;
(d) cash taxes payable on consolidated net income for
such period; and (e) the principal payments on all
Indebtedness of Americold and its Subsidiaries which by
its terms or by the terms of any instrument or agreement
relating thereto matures more than one year from, or is
directly renewable or extendable at the option of the
debtor to a date more than one year (including an option
of the debtor under a revolving credit or similar
agreement obligating the lender or lenders to extend
credit over a period of one year or more) from the
date<PAGE>
of the creation thereof, but (f) excluding Indebtedness
incurred hereunder."
2. The definition of "Net Worth" in the Agreement is
amended to read as follows:
"Net Worth" of Americold will mean at any time the
sum of (a) stockholder's equity plus (b) Subordinated
Debt, without giving effect to any one-time or cumulative
charges associated with the implementation of SFAS 106
and 109."
3. Section 2.1 is amended to read as follows:
"2.1 Commitment. Subject to and upon the terms and
conditions herein set forth, U. S. Bank agrees to make a
loan or loans (each a "Loan" and collectively the
"Loans") to Americold from time to time on or after the
Closing Date and prior to the Termination Date, which
Loans (a) will, at the option of Americold, be either
Prime Rate loans or Eurodollar Loans, or any combination
thereof, (b) may be repaid and, subject to the terms and
conditions specified herein, may be reborrowed in
accordance with the provisions hereof, and (c) will not
exceed (including the amount of Letters of Credit
Outstanding) at any time the Commitment. Loans (other
than to repay Unpaid Drawings pursuant to Section 3.4)
shall not exceed the lesser of (i) $20,000,000 minus
Americold's Letter of Credit usage in excess of
$7,500,000 or (ii) the Borrowing Base minus Americold's
Letter of Credit usage in excess of $7,500,000, except
that Loans may exceed the Borrowing Base during the
period from July 1, 1993, through October 31, 1993, by
not more than $4,000,000, without causing a Default or
Agreement violation. If at any other time the limitation
in the foregoing sentence is exceeded, Americold shall
promptly pay the amount necessary to reduce outstanding
Loans so as not to exceed such limitation."
4. Section 3.1(a) is amended to read as follows:
"(a) Subject to and upon the terms and conditions
herein set forth, U. S. Bank will issue, upon written
request of Americold, at any time and from time to time
on or after the Closing Date and prior to the Termination
Date, for the account of Americold and for the benefit of
any holder of payment obligations of Americold or any
Subsidiary, one or more irrevocable letters of credit
which will not exceed $10,000,000 in the aggregate at any
time in such form as may be approved by U. S. Bank in
support of said payment obligations (each a "Letter of
Credit")."
<PAGE>
5. Section 8.12 is amended to read as follow:
"8.12 ASC Stock. U. S. Bank agrees to release the
pledge of ASC stock if commitment reduction occurs,
facility usage changes, or Borrowing Base capacity grows
to permanently, separately, and adequately support actual
and potential Letters of Credit Outstanding."
6. The Agreement is amended by deleting the definition
of "Mortgage" and all references to Mortgage Mortgages,
specifically the references to such terms in definitions of
"Collateral" and "Credit Documents" and Sections 2.5(a), 6.1(h),
7.3, 7.8, 8.9, 10.7, and 10.9 Agreement.
7. Section 8.13 is amended to read as follow
"8.13 Release of Escrowed Funds. By December 31,
1993, Americold shall have received distribution of the
remaining $5,050,000 of the original $12,050,000 in
proceeds from the sale-leaseback of its Ontario, Oregon,
facility, which funds are currently being held in escrow,
or otherwise demonstrated to the satisfaction of U. S.
Bank its ability to service projected cash flow
requirements without exceeding the advance limitations in
Section 2.1 of this Agreement."
8. Section 9.9(b) is amended to read as follows:
"(b) After the Bond Refinancing Date, Americold will
not permit the ratio of (x) Available Cash Flow plus Net
Cash plus the unutilized portion of the Commitment to (y)
Pro Forma Debt Service for any period of four consecutive
fiscal quarters (taken as one accounting period) to be
less than 1.01:1."
<PAGE>
9. Undefined terms used herein which are de] the
Agreement shall have the meaning set forth in the Ac Except as
herein modified, the terms and conditions of Agreement are
reaffirmed and ratified as though fully set herein.
IN WITNESS WHEREOF, the parties hereto have caused their
duly authorized officers to execute and deliver this Agreement,
effective as of the 1st day of October, 1993.
AMERICOLD CORPORATION
By: /s/ Lon V. Leneve
-------------------
Title: Vice President & Treasurer
UNITED STATES NATIONAL BANK OF
OREGON
By: /s/ Alex Sember
---------------------
Title: Vice President
<PAGE> Exhibit 10.3
EMPLOYMENT AGREEMENT
--------------------
This Employment Agreement (the "Agreement"), dated as of
December 6, 1993, is between Americold Corporation, an Oregon
corporation ("Employer" or "Americold"), and J. Roy Coxe
("Employee").
RECITALS
--------
Employer is engaged in the public refrigerated warehouse
business. Employer desires to employ Employee on a full-time basis
as a Senior Vice president and to perform the duties set forth in
this Agreement. Employee desires to accept the employment.
NOW, THEREFORE, in consideration of the mutual promises,
agreements and conditions hereinafter set forth, it is agreed as
follows:
1. Employment. Employer agrees to employ Employee and
Employee agrees to accept employment upon the terms and conditions
hereinafter set forth. Employee represents and warrants that he
knows of no reason why he is not physically capable of performing
his obligations under this Agreement in accordance with its terms.
2. Term. Subject to the termination provisions in this
Agreement, the term of this Agreement will begin December 20, 1993
and will terminate on December 19, 1996.
3. Duties. Employee will perform the duties of the Senior
Vice President, Logistics, of Employer. Such duties shall include
those associated with the Americold's Third-Party Logistics
Strategy, and those duties as may be assigned to him from time to
time by the President or the Board of Directors of Employer.
Employee agrees to use his best efforts to promote the interests of
Employer and to devote his entire working time, attention and
energies to performance of his duties under this Agreement.
Employee shall at all times faithfully and to the best of his
ability perform the duties that may be required of him by Employer.
During the term of this Agreement, Employee agrees not to be
engaged in any other business activity, whether or not such
business activity is pursued for gain, profit or other pecuniary
advantage. However, this Agreement shall not prevent Employee from
attending to his personal investment matters, provided that such
matters do not significantly affect the performance of Employee's
responsibilities under the Agreement or violate the provisions of
Section 8 below. The duties of Employee shall be rendered at such
places and times as the needs of Employer shall require.
<PAGE>
Initially, Employee agrees to move to the Portland, Oregon area
by June 6, 1994, or as otherwise agreed to by Employer, and to
continue to reside there during the term of this Agreement unless
otherwise agreed to by Employer.
4. Base Compensation. Subject to Section 7 of this
Agreement, employee shall receive base compensation of $12,500 per
month, payable in accordance with Employer's standard payroll
procedures for management employees. The base compensation shall
be subject to adjustment on an annual basis in accordance with
Employer's normal compensation practices.
5. Management Incentive Plan. Employee shall be a
participant in the Americold Management Incentive Plan during his
employment, and in any other senior management incentive programs
offered to general management as approved by the Compensation
Committee of the Board of Directors.
Specific plan standards are to be developed around
targets outlined in the A. T. Kearney study dated September 16,
1993. Current levels of bonus award range will be maintained as
minimum percentages of base salary potentially available.
Current percentages range from 0% to 62% maximum, with a 37%
target. Subject to the termination provisions provided below, a
bonus of $23,250 will be awarded March 1, 1994, and a minimum bonus
of $55,500 awarded March 1, 1995.
6. Employee Benefits. Employer agrees to provide to
Employee all employee benefits, including insurance benefits,
vacation time and expense reimbursements, as are generally
available to executive officers of Employer. Employer agrees to
pay Employee's reasonable relocation expenses, including reasonable
and customary closing expenses on a new home in the Portland,
Oregon area and reasonable expenses of moving normal household
goods from current residence to the Portland, Oregon area.
Employee will be responsible for the sale of his existing residence
and for all expenses related to such sale.
7. Termination.
(a) For Cause. Employer may terminate Employee's
employment at any time for cause with immediate effect, upon
delivering written notice thereof to Employee. For purposes of
this Agreement, "for cause" shall include: (i) negligence,
recklessness, willful misconduct or incompetence in the performance
of Employee's duties; (ii) embezzlement, theft, larceny, material
fraud or other acts of dishonesty (including the unauthorized
disclosure of confidential information); (iii) the continued
failure of Employee to render services in accordance with
this<PAGE>
Agreement; (iv) conviction of or entrance of a plea of guilty or
nolo contendere to a felony or other crime that has or may have a
material adverse effect on Employee's ability to carry out his
duties under this Agreement or upon the reputation of Employer; (v)
conduct involving moral turpitude; or (vi) material insubordination
or repeated insubordination after warning by Employer. Upon
termination for cause, Employer's sole and exclusive obligation
will be to pay Employee his base compensation earned through the
date of termination, plus any employee benefits earned through the
date of termination in accordance with the applicable plans.
Employee shall not be entitled to any compensation after the date
of such termination.
(b) Without Cause. Employer may terminate Employee's
employment at any time without cause upon written notice. Upon
termination without cause, Employer's sole and exclusive obligation
will be to pay Employee as severance pay a gross sum equal to one
year's base compensation, as provided in Section 4 of this
Agreement, or the balance of the salary, plus bonus, provided for
through the then remaining term of this Agreement, whichever is
greater, plus any employee benefits earned through the date of
termination in accordance with the applicable plans. Employee shall
not be entitled to any other compensation or benefits after the
date of such termination, except as provided under any applicable
management incentive plans or stock option agreements.
(c) Upon Death. In the event of Employee's death during
the term of this Agreement, Employer's sole and exclusive
obligation under this Agreement will be to pay Employee's widow, or
to his estate, if he is not survived by his wife, Employee's base
compensation through the last day of the month in which his death
occurs, plus any employee benefits to which Employee was entitled
in accordance with the applicable plans.
(d) Upon Disability. This Agreement shall terminate, at
Employer's option, upon Employee's total disability. Employee's
total disability means his inability to perform his duties under
this Agreement by reason of illness or accident for a period of
three consecutive months. Upon termination by reason of Employee's
disability, Employer's sole and exclusive obligation will be to pay
Employee his base compensation, plus any employee benefits earned
through the date of termination in accordance with applicable
plans.
(e) Voluntarily by Employee. If Employee voluntarily
terminates his employment, Employer's sole and exclusive obligation
will be to pay to Employee his base compensation earned through the
date of termination, plus any employee benefits earned through the
date of termination in accordance with the applicable plans.
Employee shall not be entitled to any other compensation or
benefits after the date of such voluntary termination.
<PAGE>
8. Confidentiality; Noncompetition.
(a) Confidentiality. Employee acknowledges that during
the course of his employment by Employer, he will be exposed to,
have disclosed to him and may develop information that is
proprietary to Employer (the "Confidential Information"). The
Confidential Information includes, but is not limited to, financial
data, budgets and projections, trade secrets, information
concerning the operation, design and marketing of services and
processes, business and strategic plans, business procedures,
customer lists, files, analyses, data, manuals, specifications,
performance standards, instructions and any other proprietary
material or information related to Employer, its business or
operations, and the ideas and information relating thereto.
Employee will at no time use or permit any non-Americold person or
entity to examine, use or derive benefit from the Confidential
Information except in the course of performing his duties under
this Agreement. Employee shall maintain all Confidential
Information in the strictest confidence, and shall take all
necessary precautions needed to preserve its confidentiality. All
documents and materials evidencing the Confidential Information,
and copies thereof, shall at all times remain the property of
Employer. Upon demand, Employee will deliver to Employer all
documents and other materials which contain or pertain to the
Confidential Information. The provisions of Section 8(a) shall
remain in full force and effect following termination of this
Agreement for any reason.
(b) Noncompetition. Employee agrees that during the
term of this Agreement and for a period of 12 months following
termination of his employment for any reason, other than
termination by Employer without cause, Employee will not:
(i) Directly or indirectly own (as a
proprietor, general or limited partner, shareholder, trust
beneficiary or otherwise), manage, operate, participate in (as an
employee, agent, manager, director, officer, consultant or
otherwise), perform services or consult for, or otherwise carry on
in any capacity whatsoever for, a business engaged in competition
with Employer or any of its subsidiaries or affiliates within any
jurisdiction or marketing area in which Employer or any of its
subsidiaries of affiliates is doing business; or
(ii) Directly or indirectly induce or attempt
to persuade any current or future employee, agent, manager,
partner, consultant, director of, or other participant in, the
business of Employer to terminate such employment or other
relationship.
<PAGE>
9. Breach. Upon a breach by Employee of any of the terms or
conditions of the confidentiality or noncompetition covenants in
Section 8, Employer shall have the right to:
(a) Recover from Employee its actual damages
incurred by reason of such breach, including attorney fees and
costs;
(b) Obtain injunctive relief to prevent the breach
or continued breach of the covenants without proof of actual
damages; and
(c) Pursue any other remedy available at law or in
equity.
It is the desire and intent of the parties that the provisions
of Section 8 shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in
which enforcement is sought. If any particular provisions or
portion of Section 8 shall be adjudicated to be invalid or
unenforceable, this Agreement shall be deemed amended to delete
those provisions or scope to the extent unenforceable. Such
amendment shall apply only with respect to the operation of Section
8 in the particular jurisdiction in which such adjudication was
made.
10. Assignment. This Agreement is a personal contract and,
except as specifically set forth herein, the rights and interests
of Employee herein may not be sold, transferred or assigned. The
rights and obligations of Employer shall be binding upon and run in
favor of the successors and assigns of Employer. In the event of
any attempted assignment or transfer of rights hereunder contrary
to the provisions hereof, Employer shall have no further liability
for payments thereunder.
11. Waiver. The waiver by Employer of the breach of any
provision of this Agreement by Employee shall not operate or be
construed as a waiver of any subsequent breach by Employee.
12. Modification. No amendment, modification or discharge of
this Agreement shall be valid unless it is in writing and duly
executed by the parties.
13. Construction. This Agreement shall be construed in
accordance with and governed by the laws of the state of Oregon.
14. Entire Agreement. The entire agreement between the
parties is contained herein. This Agreement supersedes any and all
prior agreements and understandings between the parties. There are
no promises or representations made on behalf of Employer to induce
<PAGE>
Employee to enter into this Agreement which are not set forth
herein.
15. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be given in
writing and shall be sufficient if personally delivered or mailed,
postage pre-paid by same-day or overnight mail as follows:
If to Employer: President
Americold Corporation
7007 S. W. Cardinal Lane, Suite 135
Portland, Oregon 97224
With a copy to: Brian G. Booth
Tonkon, Torp, Galen, Marmaduke & Booth
1600 Pioneer Tower
888 S. W. Fifth Avenue
Portland, Oregon 97204-2099
If to Employee: J. Roy Coxe
Americold Corporation
7007 S. W. Cardinal Lane, Suite 135
Portland, Oregon 97224
16. Severability. The invalidity or unenforceability of any
provision hereof shall in no way effect the validity or
enforceability of any other provision.
IN WITNESS WHEREOF, this Agreement has been signed by Employer
and Employee.
EMPLOYER
AMERICOLD CORPORATION
By: /s/ Ronald H. Dykehouse
-------------------------
Ronald H. Dykehouse
President
EMPLOYEE
/s/ J. Roy Coxe
---------------------
J. Roy Coxe
<PAGE>
Exhibit 11
AMERICOLD CORPORATION
STATEMENT RE COMPUTATION OF
PER SHARE EARNINGS
(In thousands, except per share data)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Last Last Last Last
Day of Day of Day of Day of
November November November November
1992 1993 1992 1993
-------- -------- -------- --------
(unaudited)(unaudited)(unaudited)(unaudited)
Net loss $ (1,367) $ (670) $ (5,192) $(74,151)
Less: total
accrued preferred
dividend
(4,386 shares x
13.25% x 3/12 yr) (145) - - -
(4,967 shares x
11.50% x 3/12 yr) - (143) - -
(3,839 shares x
14.25% x 4/12 yr) - - (182) -
(4,386 shares x
13.25% x 5/12 yr) - - (242) -
(4,386 shares x
13.25% x 4/12 yr) - - - (194)
(4,967 shares x
11.50% x 5/12 yr) - - - (238)
--------- --------- --------- ---------
Net loss for per
share calculation $ (1,512) $ (813) $ (5,616) $(74,583)
--------- --------- --------- ---------
Weighted average
number of shares
outstanding 4,837 4,853 4,835 4,852
--------- --------- --------- ---------
Net loss
per share $ (0.31) $ (0.17) $ (0.16) $ (15.37)
--------- --------- --------- ---------
