<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 August 31, 1995; 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 / /
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes /X/ No / /
Number of shares outstanding of the registrant's common stock, par
value $.01 per share, as of September 30, 1995: 4,860,934 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 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
PART II OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 20
EXHIBIT INDEX 21
2
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
AMERICOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
Last day of February 1995 and August 1995
(In thousands, except share data)
<TABLE>
<CAPTION>
Last day of Last day of
February 1995 August 1995
------------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents (note 6) $ 33,163 $ 6,938
Trade receivables, net 20,510 23,264
Other receivables, net 2,105 4,502
Prepaid expenses 5,240 3,703
Other current assets 974 1,328
----------- ----------
Total current assets 61,992 39,735
Property, plant and equipment, less accumulated depreciation
of $156,806 and $166,258, respectively 367,248 381,299
Cost in excess of net assets acquired, less accumulated
amortization of $19,765 and $20,885 respectively 80,028 78,509
Other noncurrent assets 35,327 21,291
----------- ----------
Total assets $ 544,595 $ 520,834
=========== ==========
LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 6,741 $ 8,389
Accrued interest 17,683 16,241
Accrued expenses 11,345 11,067
Deferred revenue 5,914 6,124
Current maturities of long-term debt (note 2) 31,315 2,675
Other current liabilities 3,912 2,478
----------- ----------
Total current liabilities 76,910 46,974
Long-term debt, less current maturities (note 2) 442,912 462,876
Deferred income taxes 106,098 101,282
Other noncurrent liabilities 10,633 10,639
----------- ----------
Total liabilities 636,553 621,771
----------- ----------
3
<PAGE>
Preferred stock, $100 par value; authorized 1,000,000 shares;
issued and outstanding 52,936 shares (note 5) 5,789 6,147
----------- ----------
Common stockholders' deficit (note 3):
Common stock, $.01 par value; authorized
10,000,000 shares; issued and outstanding 4,860,934 shares 49 49
Additional paid-in capital 49,022 49,022
Retained deficit (146,775) (156,112)
Equity adjustment to recognize minimum pension liability (43) (43)
----------- ----------
Total common stockholders' deficit (97,747) (107,084)
----------- ----------
Total liabilities, preferred stock and
common stockholders' deficit $ 544,595 $ 520,834
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and six months ended last day of August 1994 and 1995
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months Three months Six Months Six months
ended ended ended ended
last day of last day of last day of last day of
August 1994 August 1995 August 1994 August 1995
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $ 53,312 $ 59,862 $ 102,064 $ 113,045
---------- ---------- ---------- ----------
Operating expenses:
Cost of sales 34,901 40,123 66,833 73,697
Amortization of cost in excess of
net assets acquired 634 887 1,269 1,520
Selling and administrative expenses 6,379 7,163 13,033 14,072
--------- --------- --------- ---------
Total operating expenses 41,914 48,173 81,135 89,289
--------- --------- --------- ---------
Gross operating margin 11,398 11,689 20,929 23,756
--------- --------- --------- ---------
Other (expense) income:
Interest expense (13,814) (13,892) (27,558) (28,126)
Reorganization expenses (note 2) - (2,777) - (6,300)
Other, net 318 (513) 472 (176)
--------- --------- --------- ---------
Total other expense (13,496) (17,182) (27,086) (34,602)
--------- --------- --------- ---------
Loss before income taxes and extraordinary item (2,098) (5,493) (6,157) (10,846)
Benefit for income taxes (note 4) 634 1,807 1,977 3,658
--------- --------- --------- ---------
Net loss before extraordinary item (1,464) (3,686) (4,180) (7,188)
Extraordinary item, net of income tax
benefit of $1,157 (note 7) - (1,793) - (1,793)
--------- --------- --------- ---------
Net loss $ (1,464) $ (5,479) $ (4,180) $ (8,981)
========= ========= ========= =========
Loss per common share (note 5)
Loss before extraordinary item $ (0.33) $ (0.79) $ (0.92) $ (1.55)
Extraordinary item - (0.37) - (0.37)
--------- --------- --------- ---------
Net loss per common share $ (0.33) $ (1.16) $ (0.92) $ (1.92)
========= ========= ========= =========
Weighted average number of shares
outstanding 4,864 4,861 4,864 4,861
========= ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
5<PAGE>
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended last day of August 1994 and 1995
(In thousands)
<TABLE>
<CAPTION>
Six months Six months
ended last ended last
day of day of
August 1994 August 1995
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (4,180) $ (8,981)
Adjustments to reconcile net loss to
net cash provided/(used) by operating activities:
Depreciation 10,159 9,589
Amortization and other noncash expenses 2,511 2,830
Changes in assets and liabilities (2,281) (4,673)
Provision for deferred taxes (1,977) (4,816)
Write-off of unamortized issuance costs - 962
Write-off of unamortized original issue discount - 1,988
--------- ---------
Net cash provided/(used) by operating activities 4,232 (3,101)
--------- ---------
Cash flows from investing activities:
Net expenditures for property, plant
and equipment (7,739) (23,471)
Proceeds from insurance policies and other items, net 23,873 423
--------- ---------
Net cash provided (used) by investing activities 16,134 (23,048)
--------- ---------
Cash flows from financing activities:
Principal payments under capitalized
lease and other debt obligations (889) (1,262)
Retirement of mortgage bonds - (10,000)
Release of escrowed funds 753 11,186)
--------- ---------
Net cash used by financing activities (136) (76)
--------- ---------
Net increase/(decrease) in cash and cash equivalents 20,230 (26,225)
Cash and cash equivalents at beginning of period 3,892 33,163
--------- ---------
Cash and cash equivalents at end of period $ 24,122 $ 6,938
========= =========
Supplemental disclosure of cash flow information:
Cash paid year-to-date for interest,
net of amounts capitalized $ 26,847 $ 29,138
========= =========
Capital lease obligations incurred to lease new equipment $ 269 $ 309
========= =========
Cash paid during the year for income taxes $ 28 $ 363
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
AMERICOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. PRINCIPLES OF CONSOLIDATION
The consolidated balance sheet as of the last day of August
1995; the related consolidated statements of operations for
the three and six months ended the last day of August 1994 and
August 1995; and the related consolidated statements of cash
flows for the six months ended the last day of August 1994 and
August 1995 are unaudited. In the opinion of management, all
adjustments necessary for a fair presentation of such
financial statements have been included. 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 the
last day of February 1995.
2. PLAN OF REORGANIZATION UNDER CHAPTER 11
On May 9, 1995, the Company filed a prepackaged plan of
reorganization (the "Plan") under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court
for the District of Oregon (the "Court"). The principal
purpose of the Plan was to reduce the Company's short-term
cash requirements with respect to payments due on its
subordinated indebtedness and to adjust certain restrictive
financial covenants and certain other provisions contained in
the Amended and Restated Investment Agreement, dated March 2,
1993, between the Company and Metropolitan Life Insurance
Company ("MetLife"). On the filing date, the Plan had been
approved by both of the classes of debtholders entitled to
vote on the Plan.
On June 19, 1995, the Court approved the Company's Disclosure
Statement dated April 14, 1995 and the Company's solicitation
of votes to accept or reject the Plan, and confirmed the Plan.
On June 30, 1995, the Company emerged from the Chapter 11
proceedings in accordance with the Plan, pursuant to which:
(i) each holder of the Company's 11% Senior Subordinated
Debentures due 1997 was entitled to receive a
corresponding amount of new 15% Senior Subordinated
Debentures due 2007, and an amount in cash equal to the
accrued but unpaid interest on the old Senior
Subordinated Debentures through June 29, 1995; and
7
<PAGE>
(ii) the Company repurchased on June 30, 1995 $10.0 million of
its 11.45% Series A First Mortgage Bonds due 2002 at par
and paid an agreement modification fee of $2.25 million
to MetLife in connection with amending the Amended and
Restated Investment Agreement, dated March 2, 1993,
between the Company and MetLife.
In addition, the Company has:
(a) Amended on June 30, 1995 the existing credit agreement
with its primary bank, which provides an aggregate
availability of $27.5 million, to be used for any
combination of letters of credit (up to $10.0 million)
and revolving cash borrowings, subject to borrowing base
limitations. The new credit agreement is secured by the
Company's trade receivables and, at the Company's option,
mortgages on certain of the Company's warehouse
properties.
(b) Rejected certain lease agreements relating to four
warehouse facilities at Watsonville, Oakland and San
Francisco, California; and Chicago, Illinois.
In November 1990, the American Institute of Certified Public
Accountants issued Statement of Position 90-7, "Financial
Reporting by Entities in Reorganization Under the Bankruptcy
Code" ("SOP 90-7"). Under SOP 90-7, the financial statements
for periods including and subsequent to filing a Chapter 11
petition are structured to distinguish transactions and events
that are directly associated with the reorganization from the
ongoing operations of the Company. Since the Company was in
Chapter 11 proceedings for less than two months, and since the
Plan did not differentiate between prepetition and post-
petition liabilities and did not include any forgiveness of
liabilities, the Company has elected not to follow the
presentation proposed by SOP 90-7. The Company has expensed
all professional fees and similar types of expenditures
incurred through the last day of August 1995 directly relating
to the Chapter 11 proceedings as "reorganization expenses."
The Company also has not recorded the effects of any possible
damage claims as a result of the rejection of certain lease
agreements in the financial statements for the first six
months of fiscal 1996.
8
<PAGE>
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
August 1995 follows:
Number of Shares Exercise Number of Shares Expiration
Subject to Option Price Exercisable Date
----------------- -------- ---------------- ----------
93,795 $10.00 93,795 May 1998
100,000 $18.95 100,000 June 2000
30,000 $21.88 12,000 May 2003
30,000 $20.40 6,000 December 2003
4. PROVISION FOR INCOME TAXES
The provision for income taxes was computed using a tax rate
of 39.2%. The tax rate was applied to loss before income
taxes and extraordinary item, after adjusting for amortization
of cost in excess of net assets acquired.
5. 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.
6. CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes highly liquid instruments,
with original maturities of three months or less when
purchased. There were cash equivalents totaling approximately
$25.2 million and $4.0 million as of the last day of February
1995 and August 1995, respectively.
9
<PAGE>
7. EXTRAORDINARY ITEM
In conjunction with the exchange of the senior subordinated
debentures and the repurchase of the $10.0 million of first
mortgage bonds, as discussed in note 2, unamortized original
issue discount of approximately $2.0 million and unamortized
issuance costs of approximately $1.0 million were written off,
resulting in an extraordinary loss, net of taxes, of
approximately $1.8 million.
10
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
INTRODUCTION - During the first quarter of fiscal 1996, the
Company solicited acceptance of a prepackaged plan of
reorganization (the "Plan) under Chapter 11 of the United
States Bankruptcy Code from certain debtholders as a means of
implementing the Company's plan for restructuring a portion of
its outstanding indebtedness. On May 8, 1995, the Company
received approval from the classes of debtholders entitled to
vote on the Plan, and on May 9, 1995, filed the Plan as
approved with the United States Bankruptcy Court for the
District of Oregon (the "Court"). The Company was debtor-in-
possession during the proceedings. On June 19, 1995, the
Court approved the Company's Plan, and on June 30, 1995, the
Company emerged from the Chapter 11 proceedings. See " -
Liquidity and Capital Resources" and Note 2 to the Quarterly
Consolidated Financial Statements.
SECOND QUARTER RESULTS - Net sales increased 12.3% from $53.3
million for the second quarter of fiscal 1995 to $59.9 million
for the same quarter in fiscal 1996. The increase is
primarily related to an increase in nonwarehousing sales.
Nonwarehousing sales in the quarter have increased 157% from
the corresponding quarter in fiscal 1995 due to increased
transportation management services revenue. Warehousing sales
have increased 3.4% from the corresponding quarter in fiscal
1995.
Cost of sales increased 15.0% from $34.9 million for the
second quarter of fiscal 1995 to $40.1 million for the same
quarter in fiscal 1996. The increase is primarily related to
increased expenses of providing transportation services which
result in lower operating margins.
SIX MONTH RESULTS - The Company's net sales increased 10.8%
from $102.1 million for the first six months of fiscal 1995 to
$113.0 million for the same period in fiscal 1996.
Americold's net sales for the first six months of fiscal 1995
and the first six months of fiscal 1996 are detailed in the
table below by activity:
11
<PAGE>
NET SALES
(Dollars in Millions)
First Six Months First Six Months
Fiscal 1995 Fiscal 1996
----------- ----------- % Change
Amount % Amount % 1995 to 1996
------ --- ------ --- ------------
Storage $ 48.1 47.1% $ 50.0 44.2% 4.0 %
Handling 33.9 33.2% 36.0 31.9% 6.2 %
Freezing 4.6 4.5% 4.2 3.7% (8.7)%
Leasing 3.5 3.4% 3.3 2.9% (5.7)%
Other 1.3 1.3% 1.3 1.2% - %
------ ----- ------ ----- -------
Net ware-
housing
sales $ 91.4 89.5% $ 94.8 83.9% 3.7 %
Quarry sales 2.7 2.6% 2.1 1.9% (22.2)%
Transportation
management
services 8.0 7.9% 16.1 14.2% 101.3 %
------ ------- ------ ----- -----
Total net
sales $102.1 100.0% $113.0 100.0% 10.8 %
====== ====== ====== ====== =====
Warehousing sales increased 3.7% from $91.4 million for the
first six months of fiscal 1995 to $94.8 million for the same
period in fiscal 1996, primarily due to a 4.0% increase in
storage revenue and a 6.2% increase in handling revenue. The
increase in warehousing sales was due to an increase in
storage volume due primarily to the continued increased
storage of vegetables and potatoes, which is attributable to
a strong vegetable harvest in the Midwest in calendar 1994 and
1995.
The increase in handling revenue resulted primarily from a
2.6% increase in volume of product handled. For the first six
months of fiscal 1995, 9.7 billion pounds of product were
handled by the Company compared with 9.9 billion pounds during
the same period in fiscal 1996. While handling volume
increased 2.6%, handling revenue increased 6.2% due to price
increases, increased processing and special services revenue
(classified by the Company as handling revenue), and changes
in product mix.
Nonwarehousing sales increased 70.1% from $10.7 million for
the first six months of fiscal 1995 to $18.2 million in the
comparable period in fiscal 1996, due to increased sales from
12
<PAGE>
the Americold Transportation Systems ("ATS") unit, which
offset the decrease in quarry sales. The Company
believes that growth will continue in its logistics
business.
COST OF SALES - Cost of sales increased a net $6.9 million or
10.2% from $66.8 million for the first six months of fiscal
1995 to $73.7 million for the first six months of fiscal 1996.
Increased volume at ATS, which requires corresponding
increases in transportation capacity purchased from carriers,
resulted in an approximate $8.0 million increase in cost of
goods sold.
Cost of sales as a percentage of net sales decreased from
65.5% in the first six months of fiscal 1995 to 65.2% in the
first six months of fiscal 1996, even as handling and ATS
sales, which each have high variable cost requirements,
increased from 40.6% of net sales in the prior period to 46.0%
in the more recent period.
SELLING AND ADMINISTRATIVE EXPENSES - Selling and
administrative expenses for the first six months of fiscal
1995 were $13.0 million, as compared to $14.1 million for the
first six months of fiscal 1996, an increase of 8.0%. The
increase primarily reflects an increase of approximately $0.8
million in salaries and related fringe benefits, partially
related to the increase in ATS activity.
INTEREST EXPENSE - Interest expense increased 2.1% from $27.6
million for the first six months of fiscal 1995 to $28.1
million for the first six months of fiscal 1996 as a result of
incurring slightly higher overall interest rates offset
partially by slightly lower overall borrowings. The increase
in interest rates resulted from the exchange in the bankruptcy
proceedings of the Company's 11% Senior Subordinated
Debentures due 1997 for the new 15% Senior Subordinated
Debentures due 2007.
REORGANIZATION EXPENSES - Reorganization expenses of
approximately $6.3 million reflect the expenses related to the
Chapter 11 proceedings incurred for professional services
including investment banking, accounting and legal fees
through the second quarter of fiscal 1996.
13
<PAGE>
INCOME - The Company's loss before income taxes and
extraordinary item for the first six months of fiscal 1995 was
$6.2 million, compared to $10.8 million in the first six
months of fiscal 1996. The increased loss is due to the
approximately $6.3 million of reorganization expenses incurred
during the period offset in part by improved earnings from
operations.
EXTRAORDINARY ITEM -In conjunction with the exchange of the
senior subordinated debentures and the repurchase of the $10.0
million of first mortgage bonds, as discussed in note 2 to the
Quarterly Consolidated Financial Statements, unamortized
original issue discount of approximately $2.0 million and
unamortized issuance costs of approximately $1.0 million were
written off, resulting in an extraordinary loss, net of taxes,
of approximately $1.8 million.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
LIQUIDITY
---------
OPERATING CASH FLOW - The Company relies primarily upon cash
generated by operations to service debt and fund capital
expenditures. Net cash flow from operating activities as
reported in the Company's consolidated financial statements
decreased from $4.2 million for the first six months of fiscal
1995 to a negative $3.1 million for the first six months of
fiscal 1996. The decrease is due primarily to a decrease in
the overall net income of the Company as a result of the
reorganization expenses associated with its prepackaged
bankruptcy proceedings.
The Company's working capital position as of the last day of
the six-month period ended August 31, 1995 was a negative $7.2
million. This position compares to a negative $14.9 million
at fiscal 1995 year end. The increase in working capital is
due primarily to the effects of the bankruptcy proceedings.
Under the Plan, approximately $28.8 million of senior
subordinated debt payments were postponed from May 1995 until
the fiscal year 2008. In addition, $10.0 million of first
mortgage bonds were repurchased. Working capital also
decreased due to the decrease in net cash flow from operations
discussed above.
14
<PAGE>
CAPITAL RESOURCES - On June 30, 1995, the Company amended its
credit agreement with the U. S. National Bank of Oregon (the
"Bank") (the "New Credit Agreement"). The New Credit
Agreement provides an aggregate availability of $27.5 million,
which may be used for any combination of letters of credit (up
to $10.0 million) and revolving cash borrowings, subject to
borrowing base limitations. The borrowing base for both cash
borrowings and letter of credit amounts will equal 85% of
eligible accounts receivable, plus 70% of the value of
all real property mortgaged to the Bank, up to a maximum
of $27.5 million. The New Credit Agreement is secured by
the Company's trade receivables and, at the Company's
option, mortgages on certain of the Company's warehouse
properties. The Company has not mortgaged any properties
to the Bank under the New Credit Agreement. Borrowings
under the New Credit Agreement will mature on February
28, 1999. The New Credit Agreement eliminates the 30-day
resting period (during which there may be no outstanding
borrowings) for fiscal 1996 and requires only one such
period for fiscal 1997. Two such periods will be
required during fiscal 1998 and fiscal 1999. The New
Credit Agreement also contains amendments of certain
financial covenants contained in the existing credit
agreement in light of the restructuring.
Based on eligible accounts receivable as of August 31, 1995,
the Company had an available credit line of $19.6 million, of
which $8.8 million was used for letters of credit, principally
related to leasing commitments and worker's compensation
reserves. No cash borrowings were outstanding. The Company
borrows under the credit agreement primarily to fund operating
expenditures and for interest payments.
EFFECTS OF BANKRUPTCY PROCEEDINGS - The Plan, as approved by
the Court on June 19, 1995 and executed on June 30, 1995,
provided, among other things, that:
(i) each holder of the Company's 11% Senior Subordinated
Debentures due 1997 is entitled to receive a
corresponding amount of the new 15% Senior
Subordinated Debentures due 2007, and an amount in
cash equal to the accrued but unpaid interest on the
old Senior Subordinated Debentures through June 29,
1995. The new 15% Subordinated Debentures were issued
subject to an indenture which contained financial and
other covenants similar to those contained in the
existing indenture for the Company's first mortgage
bonds.
15
<PAGE>
(ii) the legal, equitable and contractual rights of each
holder of the Company's 11.45% First Mortgage Bonds,
Series A due 2002 (the "Series A Bonds") and 11 1/2%
First Mortgage Bonds, Series B due 2005 (the "Series
B Bonds") (collectively, the "First Mortgage Bonds"),
under the Amended and Restated Indenture, dated as of
March 9, 1993, were left unaltered; and
(iii) the Old Investment Agreement between the Company and
MetLife was superseded by the Second Amended and
Restated Investment Agreement (the "New Investment
Agreement"), which contains certain financial and
operating covenants that in some cases are less
restrictive than those contained in the Old Investment
Agreement, and pursuant to which (x) the Company
redeemed $10.0 million in principal amount of the
Company's Series A Bonds held by MetLife, and (y) the
Company has the right, under certain circumstances, to
redeem prior to scheduled maturity additional Series
A Bonds without payment of any prepayment premium.
The Company also paid an agreement modification fee of
$2.25 million to MetLife.
Also, the Company has rejected certain lease agreements
relating to four warehouse facilities at Watsonville, Oakland
and San Francisco, California; and Chicago, Illinois.
Subsequent to the end of the quarter, on October 1, 1995, the
Company returned the three California warehouses to the
lessor, and on September 18, 1995, the Company returned the
Illinois facility. Properties subject to the leases accounted
for approximately $11.7 million of sales and a minimal amount
of gross operating margin in fiscal 1995. The outcome of any
damage claims resulting from the rejections cannot be
predicted at this time.
The Company believes that implementation of the Plan has
mitigated the Company's near-term financial vulnerability by
postponing the maturity of its subordinated debt and increased
the likelihood that the Company will realize the benefits of
capital expenditures from its funds held in escrow pursuant to
the indenture related to its first mortgage bonds and the
anticipated expansion of its refrigerated transportation
management business. The Company's present level of cash flow
available from operations and escrowed funds are expected to
be sufficient to cover all interest payments and planned
capital expenditures for fiscal 1996. The Company remains
highly leveraged, however, and will continue to be subject to
substantial principal and interest obligations with respect to
its indebtedness.
16
<PAGE>
CAPITAL EXPENDITURES - Expenditures for property, plant and
equipment for the first six months of fiscal 1996 totaled
$23.5 million, of which approximately $20.4 million relates to
warehouse expansions currently underway. The Company has
completed construction of two new warehouse facilities in
Pasco, Washington and Rochelle, Illinois, and is currently
constructing a facility in Grand Island, Nebraska. The two
completed warehouse facilities will be funded with escrow
funds. For the third property, the Company is currently
negotiating for secured funding from an outside source. Upon
completion of construction of these properties, the Company
will have expended all of the escrowed funds, except for the
$4.8 million of the insurance proceeds from the Kansas City
fire which has been deposited with the trustee under the
indenture related to the Company's First Mortgage Bonds. The
Company is working with the trustee to define its options with
respect to the $4.8 million.
Budgeted fiscal 1996 capital expenditures total approximately
$35.4 million, including approximately $25.6 million for
property development. As of August 31, 1995, the Company has
committed to spend approximately $32.2 million of its fiscal
1996 budget. A portion of such capital expenditures, related
primarily to material handling equipment, is expected to be
leased on an operating or capital lease basis.
The Company, as part of its Kansas City, Kansas location,
operates a limestone quarry. Subject to the completion of
certain remaining due diligence items, the Company expects to
dispose of this business during fiscal 1996. Net proceeds of
the sale must, in accordance with the Company's existing
indenture under its first mortgage bonds, be reinvested in
warehouse properties or used to satisfy, in part, the mortgage
obligation on the property.
17
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On May 9, 1995, the Company filed the Plan under Chapter 11 of
the United States Bankruptcy Code in the Court (Case No.
395-33058elp11). The principal purpose of the Plan was to
reduce the Company's short-term cash requirements with respect
to payments due on its subordinated indebtedness and to adjust
certain restrictive financial covenants and certain other
provisions contained in the Amended and Restated Investment
Agreement, dated March 2, 1993, between the Company and
Metropolitan Life Insurance Company. On the filing date, the
Plan had received approval from both of the classes of
debtholders entitled to vote on the Plan.
On June 19, 1995, the Court approved the motion of the Company
requesting the Court (1) to approve the Company's Disclosure
Statement dated April 14, 1995 and the Company's procedure for
solicitation of votes to accept or reject the Plan, and (2) to
confirm the Plan. The Company emerged from the Chapter 11
proceedings on June 30, 1995.
The Company has rejected certain lease agreements relating to
four warehouse facilities. The outcome of any damage claims
resulting from the rejected leases cannot be predicted at this
time.
For additional information with respect to the Plan, see Part
I, Item 2. - "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and
Capital Resources," and Part I, Item 1 - Note 2 to
Consolidated Financial Statements.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(11) Statement re Computation of Per Share Earnings
(27) Financial Data Schedule
18
<PAGE>
(b) Reports on Form 8-K
A Current Report on Form 8-K, dated June 19, 1995,
was filed on June 22, 1995 disclosing that the
Company's restructuring plan had been confirmed by
the United States Bankruptcy Court for the District
of Oregon on June 19, 1995.
19
<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: October 12, 1995
20
<PAGE>
AMERICOLD CORPORATION
FORM 10-Q
Exhibit Index
Exhibit Page
- ------- ----
(11) Statement re Computation of Per Share
Earnings 21
(27) Financial Data Schedule 23
21
<PAGE>
Exhibit (11)
AMERICOLD CORPORATION
STATEMENT RE COMPUTATION OF
PER SHARE EARNINGS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months Three months Six Months Six months
ended ended ended ended
last day of last day of last day of last day of
August 1994 August 1995 August 1994 August 1995
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<C> <C> <C> <C>
Net loss $ (1,464) $ (5,479) $ (4,180) $ (8,981)
Less: total accrued preferred dividend
(49.672 shares x 11.50% x 1/12 yr) (48) - - -
(49.672 shares x 13.50% x 2/12 yr) (112) - (112) -
(49.672 shares x 11.50% x 4/12 yr) - - (190) -
(52.936 shares x 13.50% x 3/12 yr) - (179) - -
(52.936 shares x 13.50% x 6/12 yr) - - - (357)
------- ------- ------- -------
Net loss for per share calculation $ (1,624) $ (5,658) $ (4,482) $ (9,338)
======= ======= ======= =======
Weighted average number of shares
outstanding 4,864 4,861 4,864 4,861
======= ======= ======= =======
Net loss per share $ (0.33) $ (1.16) $ (0.92) $ (1.92)
======= ======= ======= =======
</TABLE>
23
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM AMERICOLD CORPORATION'S FINANCIAL STATEMENTS CONTAINED IN
ITS QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDING AUGUST
31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1996
<PERIOD-END> AUG-31-1995
<CASH> 6,938<F3>
<SECURITIES> 0
<RECEIVABLES> 23,264
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 39,735
<PP&E> 547,557
<DEPRECIATION> 166,258
<TOTAL-ASSETS> 520,834
<CURRENT-LIABILITIES> 46,974
<BONDS> 462,876
<COMMON> 49<F2>
6,147<F1>
0
<OTHER-SE> (107,084)<F2>
<TOTAL-LIABILITY-AND-EQUITY> 520,834
<SALES> 113,045
<TOTAL-REVENUES> 113,045
<CGS> 73,697
<TOTAL-COSTS> 89,289
<OTHER-EXPENSES> 176
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,126
<INCOME-PRETAX> (10,846)
<INCOME-TAX> (3,658)<F4>
<INCOME-CONTINUING> (7,188)
<DISCONTINUED> 0
<EXTRAORDINARY> (1,793)
<CHANGES> 0
<NET-INCOME> (8,981)
<EPS-PRIMARY> (1.92)<F3>
<EPS-DILUTED> (1.92)<F3>
<FN>
<F1>See Note 5 to Notes to Consolidated Financial Statements
<F2>See Note 3 to Notes to Consolidated Financial Statements
<F3>See Note 6 to Notes to Consolidated Financial Statements
<F4>See Note 4 to Notes to Consolidated Financial Statements
</FN>
</TABLE>
