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 May 31, 1997; 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)
(503) 624-8585
(Registrant's telephone number, including area code)
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 June 30, 1997: 4,999,005 shares.<PAGE>
AMERICOLD CORPORATION
Form 10-Q
TABLE OF CONTENTS
-----------------
Page
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II OTHER INFORMATION
Item 1. Legal Proceedings 17
Item 4. Submission of Matters to a Vote of
Security Holders 17
Item 6. Exhibits and Reports on Form 8-K 19
SIGNATURES 20
EXHIBIT INDEX 21
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
AMERICOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
Last day of February 1997 and May 1997
(In thousands, except share data)
<TABLE>
<CAPTION>
Last day of Last day of
February 1997 May 1997
------------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,702 $ 5,262
Trade receivables, net 27,560 24,379
Other receivables, net 3,138 3,943
Prepaid expenses 3,828 3,551
Tax refund receivable 2,636 2,651
Other current assets 891 1,165
----------- ----------
Total current assets 51,755 40,951
Property, plant and equipment, less accumulated depreciation
of $192,649 and $197,431, respectively 384,484 381,742
Cost in excess of net assets acquired, less accumulated
amortization of $24,644 and $25,271, respectively 74,749 74,122
Other noncurrent assets 20,046 19,624
----------- ----------
Total assets $ 531,034 $ 516,439
=========== ===========
LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 16,116 $ 11,345
Accrued interest 18,466 13,239
Accrued expenses 13,660 11,678
Deferred revenue 5,555 5,317
Current maturities of long-term debt 5,229 5,235
Other current liabilities 5,259 5,881
---------- ----------
Total current liabilities 64,285 52,695
Long-term debt, less current maturities 465,834 465,201
Deferred income taxes 98,524 97,875
Other noncurrent liabilities 10,347 10,256
---------- ----------
Total liabilities 638,990 626,027
---------- ----------
Preferred stock, $100 par value; authorized 1,000,000 shares;
issued and outstanding 52,936 shares 5,753 5,925
---------- ----------
Common stockholders' deficit:
Common stock, $.01 par value; authorized 10,000,000
shares; issued and outstanding 4,995,556 and 4,999,005
shares, respectively 50 50
Additional paid-in capital 51,182 51,182
Retained deficit (164,580) (166,384)
Equity adjustment to recognize minimum pension liability (361) (361)
---------- ----------
Total common stockholders' deficit (113,709) (115,513)
---------- ----------
Total liabilities, preferred stock and
common stockholders' deficit $ 531,034 $ 516,439
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended last day of May 1996 and 1997
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months Three months
ended last ended last
day of day of
May 1996 May 1997
------------ -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Net sales $ 79,396 $ 72,508
----------- -----------
Operating expenses:
Cost of sales 59,465 52,628
Amortization of cost in excess of
net assets acquired 627 627
Selling and administrative expenses 7,723 7,674
----------- -----------
Total operating expenses 67,815 60,929
----------- -----------
Gross operating margin 11,581 11,579
----------- -----------
Other (expense) income:
Interest expense (15,535) (13,923)
Other, net 514 63
----------- -----------
Total other expense (15,021) (13,860)
----------- -----------
Loss before income taxes (3,440) (2,281)
Benefit for income taxes 1,104 649
----------- -----------
Net loss $ (2,336) $ (1,632)
=========== ===========
Net loss per common share $ (0.51) $ (0.36)
=========== ===========
Weighted average number of shares
outstanding 4,931 4,997
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended last day of May 1996 and 1997
(In thousands)
<TABLE>
<CAPTION>
Three months Three months
ended last ended last
day of day of
May 1996 May 1997
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (2,336) $ (1,632)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation 5,010 5,111
Amortization and other noncash expenses 1,028 1,158
Changes in assets and liabilities (7,279) (9,358)
Provision for deferred taxes (1,103) (649)
----------- -----------
Net cash used by operating activities (4,680) (5,370)
----------- -----------
Cash flows from investing activities:
Net expenditures for property, plant
and equipment (6,053) (2,368)
Other items, net (424) (72)
----------- -----------
Net cash used by investing activities (6,477) (2,440)
----------- -----------
Cash flows from financing activities:
Principal payments under capitalized
lease and other debt obligations (696) (627)
Proceeds from sale of senior subordinated notes 120,000 -
Retirement of senior subordinated debentures (115,000) -
Debt issuance costs (5,035) (3)
Release of escrowed funds 52 -
----------- -----------
Net cash used by financing activities (679) (630)
----------- -----------
Net decrease in cash and cash equivalents (11,836) (8,440)
Cash and cash equivalents at beginning of period 20,857 13,702
----------- -----------
Cash and cash equivalents at end of period $ 9,021 $ 5,262
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid year-to-date for interest,
net of amounts capitalized $ 20,112 $ 19,150
=========== ===========
Capital lease obligations incurred to lease new equipment $ 248 $ -
=========== ===========
Cash paid for income taxes $ 24 $ 15
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements. <PAGE>
AMERICOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. PRINCIPLES OF CONSOLIDATION
---------------------------
The consolidated balance sheet as of the last day of May 1997;
the related consolidated statements of operations for the
three months ended the last day of May 1996 and May 1997; and
the related consolidated statements of cash flows for the
three months ended the last day of May 1996 and May 1997 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 1997.
2. 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 May
1997 follows:
Weighted
Average
Exercise
Shares Price
------ --------
Outstanding at beginning of year 225,148 $11.63
Granted - -
Exercised (3,449) 10.00
Cancelled - -
Forfeited - -
------- -----
Outstanding 221,699 $11.66
======= =====
Options exercisable 93,699 $10.79
======= =====
3. 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, after adjusting for amortization of cost in excess of
net assets acquired.
4. 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 Regarding Computation of Per Share Earnings.
5. 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 $10.0 million
and $0.0 as of the last day of February 1997 and May 1997,
respectively.
6. LONG-TERM DEBT
--------------
On April 9, 1996, the Company sold $120.0 million aggregate
principal amount of the Company's 12.875% Senior Subordinated
Notes due 2008. The Company used $115.0 million of the
proceeds to redeem at par on May 9, 1996 the Company's 15%
Senior Subordinated Debentures due 2007. The remaining
proceeds were used to pay transaction costs. The interest
rate on the notes can be increased from 12.875% to 13.875% if
the notes are not rated "B- or higher" by Standard & Poor's
and "B3 or higher" by Moody's Investors Service by November 1,
1997. The notes have been rated "B-" by Standard and Poor's
since they were issued, and as of June 30, 1997, "Caa" by
Moody's Investors Service.
7. NEW ACCOUNTING STANDARD
-----------------------
The Company has not implemented the reporting requirements of
Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" ("SFAS No.
128"), although it will be required to do so during the fourth
quarter of fiscal 1998 and thereafter. This Statement
establishes a different method of computing net income per
share than is currently required under the provisions of
Accounting Principles Board Opinion No. 15. Under SFAS No.
128, the Company will be required to present both basic net
income per share and diluted net income per share. The
Company estimates that the adoption of SFAS No. 128 will not
have a material impact on its income per share.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
INTRODUCTION - Americold provides integrated logistics
services for the frozen food industry consisting of
warehousing and transportation management. These services are
provided through the Company's network of 48 refrigerated
warehouses and its refrigerated transportation management
unit. The Company's fiscal year ends on the last day of
February.
DEVELOPMENT OF TRANSPORTATION MANAGEMENT SERVICES - Over the
past several years, the Company has experienced increased
interest by customers in procuring transportation management
services from the Company. In this regard, the Company
entered into arrangements in the first half of fiscal 1996
pursuant to which it is providing such services to three
subsidiaries of one large customer. The Company has made
proposals to offer similar services to certain other potential
customers by emphasizing its full-service logistics expertise
and warehouse industry position which enable customers to
obtain services in support of distribution of frozen food
products from a single provider.
As the Company does not invest in or own transportation
equipment, the Company has entered into contracts with
independent carriers to provide freight transportation at
negotiated rates. Accordingly, the margins that the Company
earns in providing transportation management services are
lower than for its warehousing services.
DEVELOPMENT OF WAREHOUSE PROPERTIES - Although the Company
currently has no projects in progress, the Company continually
evaluates the need for warehouse space and intends to pursue
growth of its refrigerated warehouse business both by
expanding its network of warehouses and by expanding existing
facilities in response to customer requirements. The Company
did not renew the lease on its marginally profitable Kent,
Washington facility upon its expiration on March 31, 1997.
See "--Liquidity and Capital Resources--Capital Resources" and
"--Capital Resources --Capital Expenditures."
FORWARD-LOOKING STATEMENTS - This document includes "forward-
looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without
limitation, statements as to expectations, beliefs and future
financial performance that are based on current expectations
and are subject to a number of risks and uncertainties.
Actual results or outcomes could differ materially from
current expectations due to a number of factors (such as the
Company's substantial leverage and history of losses;
restrictions imposed by the Company's debt agreements; the
Company's dependence on significant customers; competition;
and the Company's dependence on agricultural markets)
described in Exhibit 99 to the Company's Annual Report on Form
10-K for the year ended the last day of February 1997.
COMPARISON OF THREE-MONTH PERIODS ENDED MAY 31, 1996 AND 1997
--------------------------------------------------------------
NET SALES - Americold's net sales for the first three months
of fiscal 1997 and the first three months of fiscal 1998 are
detailed in the table below, by activity:
NET SALES
(Dollars in Millions)
Three Months Ended Three Months Ended
May 31, 1996 May 31, 1997
------------ ------------ % Change
Amount % Amount % FY97 to FY98
------ --- ------ --- ------------
Logistics
Warehousing
Storage $ 24.7 31.1% $ 25.3 34.9% 2.4 %
Handling 19.7 24.8% 20.0 27.6% 1.5 %
Leasing 1.8 2.3% 1.3 1.8% (27.8)%
Freezing
and other 2.3 2.9% 2.5 3.4% 8.7 %
------ ----- ------ ----- ------
48.5 61.1% 49.1 67.7% 1.2 %
Transportation
management
services 29.6 37.3% 22.1 30.5% (25.3)%
----- ----- ----- ----- -----
Total logistics 78.1 98.4% 71.2 98.2% (8.8)%
Other 1.3 1.6% 1.3 1.8% 0.1 %
----- ----- ----- ----- -----
Total net sales $ 79.4 100.0% $ 72.5 100.0% (8.7)%
====== ===== ====== ===== =====
The Company's net sales decreased 8.7% from $79.4 million for
the first three months of fiscal 1997 to $72.5 million for the
first three months of fiscal 1998, reflecting a substantial
decrease in transportation management sales.
Warehousing sales increased from $48.5 million for the first
three months of fiscal 1997 to $49.1 million for the first
three months of fiscal 1998, principally due to a 2.4%
increase in storage revenue. Storage revenue increased as
storage volume increased slightly from 1.37 billion pounds
stored on average per month in the first three months of
fiscal 1997 to 1.39 billion pounds stored on average per month
in the same period in fiscal 1998.
The 1.5% increase in handling revenue resulted primarily from
price increases and changes in product mix as there was a 0.3%
decrease in volume of product handled. For the first three
months of fiscal 1997, 5.4 billion pounds of product were
handled by the Company compared with 5.3 billion pounds during
the same period in fiscal 1998.
The Company anticipates that vegetable processors will
continue to maintain lower inventories during early fiscal
1998. Storage levels for potatoes was higher during the first
quarter of fiscal 1998, but the Company is unable to forecast
the levels for the balance of fiscal 1998.
Transportation management sales decreased 25.3% from $29.6
million for the first three months of fiscal 1997 to $22.1
million for the first three months of fiscal 1998, due to
significant decreases in sales of frozen food products by two
of the Company's customers.
Other sales (quarry sales) remained unchanged at $1.3 million
for both periods.
COST OF SALES - Cost of sales decreased 11.5% from $59.5
million for the first three months of fiscal 1997 to $52.6
million for the first three months of fiscal 1998. The
decreased volume of transportation management services, which
required decreases in transportation capacity purchased from
carriers, resulted in an approximate $8.1 million decrease in
cost of sales. Offsetting this decrease, cost of sales
increased by approximately $0.5 million principally due to
increased operating lease payments on facilities financed
through the Lease Line (as defined below). See "Liquidity and
Capital Resources". Cost of sales also increased due to the
operational difficulties at one of the Company's warehouse
facilities. Efforts are continuing to be made to resolve the
difficulties.
Cost of sales as a percentage of net sales decreased from
74.9% for the first three months of fiscal 1997 to 72.6% for
the first three months of fiscal 1998, as transportation
management sales, which has high variable cost requirements,
decreased from 37.3% of net sales in the prior period to 30.5%
in the more recent period.
SELLING AND ADMINISTRATIVE EXPENSES - Selling and
administrative expenses remained unchanged at $7.7 million for
both periods. Selling and administrative expenses as a
percentage of net sales increased from 9.7% in the first three
months of fiscal 1997 to 10.6% in the first three months of
fiscal 1998 due to the decrease in transportation management
sales.
GROSS OPERATING MARGIN - Gross operating margin remained
unchanged at $11.6 million for both periods principally due to
the increased gross operating margin on the transportation
management services business in the more recent period as a
result of improved operating efficiencies in such business.
INTEREST EXPENSE - Interest expense decreased from $15.5
million for the first three months of fiscal 1997 to $13.9
million for the first three months of fiscal 1998 as a result
of a non-recurring increase in interest expense in the prior
period due to the defeasance requirements in fiscal 1997 on
the redemption in May 1996 of $115.0 million of the Company's
15% Senior Subordinated Debentures due 2007 which were
replaced by the Company's $120.0 million of 12.875% Senior
Subordinated Notes due 2008. As a result of the defeasance
requirements, both issuances were outstanding for the period
April 9, 1996 to May 8, 1996.
In addition, interest expense in the prior period was also
affected by the higher average interest rate on the debt
outstanding at that time.
INCOME (LOSS) - The Company's income before income taxes
improved as the first three months of fiscal 1997 reflected a
loss of $3.4 million, as compared to a loss of $2.3 million in
the first three months of fiscal 1998. The reduced loss in
the more recent period was due primarily to the increased
gross operating margin from transportation management services
and from the reduced interest expense incurred on the
Company's outstanding debt as compared to the corresponding
prior period.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company believes it has sufficient liquidity and capital
resources to meet its needs related to the payment of interest
expense, the continued operation and maintenance of its
warehouses, the continued operation and planned expansion of
its transportation management business and the funding of
limited growth in warehouse capacity. Any anticipated growth
in the volume of transportation management services is not
expected to consume significant capital resources. Although
the Company's internal resources for new warehouse acquisition
or construction are limited, the Company has arranged for up
to $25.0 million in lease financing for new warehouse capacity
from a finance company (the "Lease Line"). See "--Capital
Resources." While the Company currently has no projects in
progress, the Company plans to finance its warehouse expansion
program principally through lease financing, and the Company
believes it has the ability to finance any fiscal 1998
expansion projects from the Lease Line, similar lease
financing or mortgage financing. In light of the significant
debt obligations due between fiscal 2000 and fiscal 2008, the
Company continues to need to increase operating cash flow and
seek external sources for refinancing. To the extent such
operating cash flow growth will result from warehouse capacity
growth, the Company will also be required to obtain additional
sources of interim financing.
LIQUIDITY
---------
OPERATING CASH FLOW - Net cash flow from operating
activities, representing cash provided from operations, is
used to fund capital expenditures and meet debt service
requirements. Operating cash flow reported for any one period
is sensitive to the timing of the collection of receivables
and the payment of payables.
Net cash flow from operating activities as reported in the
Company's consolidated financial statements decreased from a
negative $4.7 million for the first three months of fiscal
1997 to a negative $5.4 million for the first three months of
fiscal 1998. The decrease is due principally to the changes
in certain working capital items such as trade receivables,
trade payables and accrued expenses. Net cash flow from
operating activities in fiscal years 1995, 1996 and 1997 was
$12.7 million, $12.6 million and $18.9 million, respectively.
Funds provided from operations (gross operating margin plus
depreciation, amortization and employee stock ownership plan
expense) was $17.4 million for the first three months of
fiscal 1997 and $17.5 million for the first three months of
fiscal 1998. Funds provided from operations in fiscal years
1995, 1996 and 1997 were $71.6 million, $76.6 million and
$72.1 million, respectively.
WORKING CAPITAL - The Company's working capital position as of
the last day of the three-month period ended May 31, 1997 was
a negative $11.7 million. This position compares to negative
$12.5 million at fiscal 1997 year end. Working capital
increased in the more recent period principally due to timing
differences in the collection of receivables and payment of
payables.
The Company's historically negative working capital position
generally has not affected its ability to meet its cash
operating needs.
CAPITAL RESOURCES
-----------------
The credit agreement with the Company's primary bank provides
an aggregate availability of $27.5 million, which may be used
for any combination of letters of credit and revolving cash
borrowings for general working capital purposes, subject to
borrowing base limitations. The borrowing base for both cash
borrowings and letters of credit equals 85% of eligible
accounts receivable pledged to the bank plus, at the option of
the Company, 70% of the value of all real property mortgaged
to the bank. The Company has not mortgaged any properties
under the credit agreement. The credit agreement, which
matures on February 28, 1999, requires two 30-day resting
periods (during which there may be no outstanding borrowings)
during each of fiscal 1998 and fiscal 1999. Subsequent to the
end of the quarter, on June 5, 1997, the Company satisfied the
resting periods required for fiscal 1998. The credit
agreement also contains certain restrictive covenants,
including financial covenants.
Based on eligible accounts receivable as of May 31, 1997, the
Company had an available credit line of $19.9 million, of
which $6.4 million was used for letters of credit, principally
related to leasing commitments and worker's compensation
reserves. No cash borrowings were outstanding.
The Lease Line is used to finance, subject to meeting certain
conditions, the construction or acquisition of new warehouses
or the expansion of existing warehouses which are not pledged
as collateral security for senior debt. While the Lease Line
commitment was originally for a total of $25.0 million and was
intended to expire December 31, 1996, based on discussions
with the lender, the expiration date is expected to be
extended and the total commitment is expected to be increased
by approximately $10.0 million, to an available total of $17.3
million, in order to allow for the contemplated sale/leaseback
of an existing facility.
LONG-TERM DEBT - On April 9, 1996, the Company sold $120.0
million aggregate principal amount of the Company's 12.875%
Senior Subordinated Notes due 2008. The Company used $115.0
million of the proceeds to redeem at par on May 9, 1996 the
Company's 15% Senior Subordinated Debentures due 2007. The
remaining proceeds were used to pay transaction costs. The
interest rate on the notes can be increased from 12.875% to
13.875% if the notes are not rated "B- or higher" by Standard
& Poor's and "B3 or higher" by Moody's Investors Service by
November 1, 1997. The notes have been rated "B-" by Standard
and Poor's since they were issued, and as of June 30, 1997,
"Caa" by Moody's Investors Service.
CAPITAL EXPENDITURES - Budgeted fiscal 1998 capital
expenditures total approximately $16.1 million, including
approximately $1.4 million for warehouse expansion.
Expenditures for property, plant and equipment for the first
three months of fiscal 1998 totaled $2.4 million, of which
approximately $0.3 million related to warehouse expansions,
and the remainder related to routine replacements or
betterments, or revenue enhancements or cost reduction items.
JOINT VENTURE - The Company is finalizing an agreement in
which the Company's Park Rapids, Minnesota warehouse facility
will be sold to a joint venture. The Company will own 50% of
the joint venture and will operate the facility for a
management fee.
NEW ACCOUNTING STANDARD - The Company has not implemented the
reporting requirements of Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" ("SFAS No. 128"), although it will be required to
do so during the fourth quarter of fiscal 1998 and thereafter.
This Statement establishes a different method of computing net
income per share than is currently required under the
provisions of Accounting Principles Board Opinion No. 15.
Under SFAS No. 128, the Company will be required to present
both basic net income per share and diluted net income per
share. The Company estimates that the adoption of SFAS No.
128 will not have a material impact on its income per share.
SUBSEQUENT EVENT - Subsequent to the end of the first quarter
of fiscal 1998, on June 30, 1997, the previously announced
sale by H. J. Heinz Company to McCain Foods, Inc. of several
Ore-Ida Foods processing plants was completed. The Company
provides logistical services at all of these plants pursuant
to operating agreements. The Company is working with the two
companies on the assignment to McCain Foods, Inc. of certain
operating agreements, leases and other agreements.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
In a declaratory judgment action brought against Non-Stop
Logistics Corporation ("Non-Stop") by the Company, the Company
sought certain rights to software pursuant to a letter
agreement with Non-Stop, and Non-Stop asserted various claims
for damages to its business, lost business opportunities and
lost profits, and asserted breaches of the letter agreement
and a confidentiality agreement. On February 27, 1997, the
Bankruptcy Judge (the "Judge") filed an order deciding certain
of the claims at issue.
In May 1997, Non-Stop's claim for damages for the Company's
breach of the confidentiality agreement was tried. On July 7,
1997, the Court filed an order denying Non-Stop's claims for
damages and attorney fees and costs for the Company's breach
of the confidentiality agreement.
Non-Stop's counterclaim for intentional interference with
prospective business relations has been severed and reserved
for a later jury trial in District Court. Non-Stop has not
yet specified what damages it will seek on this claim. In
earlier phases of the dispute, however, Non-Stop has claimed
damages to its business ranging from $6.0 million to $33.0
million. Non-Stop withdrew a specific claim for damages of
more than $4.0 million from the damages trial related to the
confidentiality agreement, asserting that it would bring a
claim in connection with the trial on its interference claim.
Trial on Non-Stop's claim for intentional interference will
not take place before the fall of calendar 1997. The Company
believes the interference claim is without merit and will
vigorously defend that claim.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
Subsequent to the end of the fiscal quarter, on June 24, 1997,
the Company held its annual meeting of shareholders. The
Company did not solicit proxies. At the meeting, the
following actions were approved by the shareholders:
(a) Election of a Board of Directors for the ensuing
year consisting of Ronald H. Dykehouse, Frank
Edelstein, William A. Marquard, George E. Matelich,
James C. Pigott and Joel M. Smith.
(b) The selection of KPMG Peat Marwick LLP as the
Company's auditors for fiscal 1998.
With respect to the election of directors, there were
2,710,700 shares voted for the election of each of the
nominees for director and no votes withheld.
With respect to the selection of auditors, there were
2,710,700 shares voted for approval and no shares voted
against or abstaining.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
(11) Statement Regarding Computation of Per Share
Earnings
(27) Financial Data Schedule
(b) Reports on Form 8-K
No Reports on Form 8-K were filed during the quarter for
which this report is filed.
<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: July 11, 1997
<PAGE>
FORM 10-Q
Exhibit Index
Exhibit Page
- ------- ----
(a) Exhibits
(11) Statement Regarding Computation of Per Share
Earnings 23
(27) Financial Data Schedule 25
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<PAGE>
Exhibit (11)
AMERICOLD CORPORATION
STATEMENT REGARDING COMPUTATION OF
PER SHARE EARNINGS
(In thousands, except per share data)
Three months Three months
ended the ended the
last day of last day of
May 1996 May 1997
------------- -------------
(Unaudited) (Unaudited)
Net loss $ (2,336) $ (1,632)
Less: total accrued
preferred dividend
(52.936 shares x 13.50% x 3/12 yr) (179) -
(52.936 shares x 13.00% x 3/12 yr) - (172)
-------- --------
Net loss for per
share calculation $ (2,515) $ (1,804)
========= ========
Weighted average number
of shares outstanding 4,931 4,997
========= ========
Net loss per share $ (0.51) $ (0.36)
========= ========
<TABLE> <S> <C>
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<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 MAY
31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-END> MAY-31-1997
<CASH> 5,262
<SECURITIES> 0
<RECEIVABLES> 24,379
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 40,951
<PP&E> 579,173
<DEPRECIATION> 197,431
<TOTAL-ASSETS> 516,439
<CURRENT-LIABILITIES> 52,695
<BONDS> 465,201
<COMMON> 50
5,925
0
<OTHER-SE> (115,563)
<TOTAL-LIABILITY-AND-EQUITY> 516,439
<SALES> 72,508
<TOTAL-REVENUES> 72,508
<CGS> 52,628
<TOTAL-COSTS> 60,929
<OTHER-EXPENSES> (63)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,923
<INCOME-PRETAX> (2,281)
<INCOME-TAX> (649)
<INCOME-CONTINUING> (1,632)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,632)
<EPS-PRIMARY> (0.36)
<EPS-DILUTED> (0.36)
</TABLE>
