<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549-1004
-----------------------
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 September 24, 1999
OR
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 1-09559
COLORADO PRIME CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 11-2826129
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
500 BI-COUNTY BLVD., FARMINGDALE, NEW YORK 11735
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516)-694-1111
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/ /
At November 5, 1999, 1,000 shares of the registrant's Common Stock were
outstanding.
<PAGE> 2
COLORADO PRIME CORPORATION
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
- ------- --------------------- --------
<S> <C> <C>
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets 1
September 24, 1999 and December 25, 1998
Statements of Consolidated Operations 2
Thirteen weeks ended September 24, 1999 and September 25, 1998
Statements of Consolidated Operations 3
Thirty-nine weeks ended September 24, 1999 and September 25,
1998
Statements of Consolidated Cash Flows 4
Thirty-nine weeks ended September 24, 1999 and September 25,
1998
Notes to Consolidated Financial Statements 5
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 7
RESULTS OF OPERATIONS
PART II. OTHER INFORMATION
Item 5. Other information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
</TABLE>
<PAGE> 3
COLORADO PRIME CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands except share data)
(Unaudited)
<TABLE>
<CAPTION>
September 24, December 25,
ASSETS 1999 1998
------------- ------------
<S> <C> <C>
Current Assets:
Cash $ 603 $ 994
Accounts receivable-net 51,906 54,237
Inventories 4,079 4,695
Prepaid expenses and other current assets 1,788 1,823
Refundable income tax 501 926
Deferred income tax benefit 10,488 12,419
--------- ---------
Total current assets 69,365 75,094
--------- ---------
Property, Plant and Equipment - Net 8,833 9,354
--------- ---------
Non-current accounts receivable-net 36,975 36,847
--------- ---------
Goodwill 44,392 45,609
--------- ---------
Other assets 6,768 8,055
--------- ---------
TOTAL ASSETS $ 166,333 $ 174,959
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable $ 4,026 $ 4,926
Accrued expenses 17,080 18,772
Income and other taxes payable 1,008 320
Current portion of capital lease obligations 148 147
--------- ---------
Total current liabilities 22,262 24,165
--------- ---------
Revolver 37,605 30,635
--------- ---------
Senior unsecured notes, net of discount 84,093 98,318
--------- ---------
Long-term portion of capital lease obligations 3,695 3,782
--------- ---------
Other liabilities 2,162 2,746
--------- ---------
STOCKHOLDER'S EQUITY
Common Stock - par value, $.01, per share; 1,000 shares
authorized issued and outstanding -- --
Paid-in capital 25,868 25,868
Accumulated deficit (9,352) (10,555)
--------- ---------
Total stockholder's equity 16,516 15,313
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 166,333 $ 174,959
========= =========
</TABLE>
1
<PAGE> 4
COLORADO PRIME CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Thirteen Weeks
Ended Ended
September 24, September 25,
1999 1998
-------------- --------------
<S> <C> <C>
PRODUCT SALES $ 32,346 $ 32,517
FINANCE INCOME EARNED 3,391 3,270
-------- --------
TOTAL REVENUE 35,737 35,787
COST OF GOODS SOLD 11,960 12,450
-------- --------
GROSS MARGIN 23,777 23,337
-------- --------
OTHER COST AND EXPENSES:
Selling, general and administrative 20,378 23,377
Severance-related costs -- 791
Amortization of goodwill 406 416
Interest expense 4,067 4,112
Other expense 150 143
-------- --------
Total cost and expenses 25,001 28,839
-------- --------
LOSS BEFORE BENEFIT FOR INCOME TAXES (1,224) (5,502)
BENEFIT FOR INCOME TAXES (278) (2,093)
-------- --------
NET LOSS $ (946) $ (3,409)
======== ========
</TABLE>
2
<PAGE> 5
COLORADO PRIME CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Thirty-nine Thirty-nine
Weeks Ended Weeks Ended
September 24, September 25,
1999 1998
------------- -------------
<S> <C> <C>
PRODUCT SALES $ 99,716 $ 103,348
FINANCE INCOME EARNED 10,262 10,321
--------- ---------
TOTAL REVENUE 109,978 113,669
COST OF GOODS SOLD 37,623 38,825
--------- ---------
GROSS MARGIN 72,355 74,844
--------- ---------
OTHER COST AND EXPENSES:
Selling, general and administrative 62,976 66,420
Severance-related costs 791
Amortization of goodwill 1,217 1,198
Interest expense 12,228 12,114
Other expense 391 346
--------- ---------
Total cost and expenses 76,812 80,869
--------- ---------
LOSS BEFORE EXTRAORDINARY ITEM
AND BENEFIT FOR INCOME TAXES (4,457) (6,025)
BENEFIT FOR INCOME TAXES (1,103) (2,001)
--------- ---------
NET LOSS BEFORE EXTRAORDINARY ITEM (3,354) (4,024)
EXTRAORDINARY ITEM - GAIN ON
EXTINGUISHMENT OF DEBT - NET OF TAX 4,556 --
--------- ---------
NET INCOME (LOSS) $ 1,202 $ (4,024)
========= =========
</TABLE>
3
<PAGE> 6
COLORADO PRIME CORPORATION
STATEMENTS OF CONSOLIDATED CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Thirty-nine Thirty-nine
Weeks Ended Weeks Ended
September 24, September 25,
1999 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 1,202 $(4,024)
------- -------
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization 2,388 2,416
Amortization of debt issuance costs 899 913
Extraordinary gain, net (4,556) --
Deferred income taxes (1,105) (2,365)
Provision for doubtful accounts 6,046 6,947
Change in operating assets and liabilities:
Accounts receivable (3,843) (2,053)
Inventories 616 (85)
Prepaid expenses and other 35 (291)
Refundable income taxes 425 1,557
Other assets 14 (343)
Accounts payable (900) 876
Accrued expenses (1,691) 3,435
Other liabilities (584) (466)
Income and other taxes payable 688 (1,393)
------- -------
Total adjustments (1,568) 9,148
------- -------
Net cash (used in) provided by operating activities (366) 5,124
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash used in investments of property, plant and equipment (650) (1,010)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under revolver 6,970 (3,654)
Repurchase of senior notes (6,259) --
Decrease in capital lease obligations (86) (191)
------- -------
Net cash provided by (used in) financing activities 625 (3,845)
------- -------
NET (DECREASE) INCREASE IN CASH (391) 269
CASH, BEGINNING OF PERIOD 994 444
------- -------
CASH, END OF PERIOD $ 603 $ 713
======= =======
</TABLE>
4
<PAGE> 7
COLORADO PRIME CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Colorado Prime Corporation (the "Company" or "CPC") is a Delaware
corporation and was incorporated in 1986. The Company is a wholly-owned
subsidiary of Colorado Prime Holdings Inc. ("CPH"), formerly KPC
Holdings Corporation ("Holdings"). On May 9, 1997, pursuant to a merger
agreement between Holdings and Thayer Equity Investors III, L.P., a
private equity investment limited partnership ("Thayer"), Colorado
Prime Acquisition Corp. ("CPAC"), a transitory acquisition company
established by Thayer prior to the consummation of the merger, merged
with and into Holdings (the "Merger") following which Holdings was the
surviving corporation and was renamed CPH.
2. Reference is made to the notes to consolidated financial statements
contained within the Company's audited financial statements for the
period ended September 25, 1998 included in the Company's Annual Report
on Form 10-K. In the opinion of management, the interim unaudited
financial statements included herein reflect all adjustments necessary,
consisting of normal recurring adjustments, for a fair presentation of
such data on a basis consistent with that of the audited data presented
therein. The results of operations for interim periods are not
necessarily indicative of the results to be expected for a full year.
Certain prior period balances have been reclassified to conform with
the current period presentation.
3. The Company has changed in its fiscal year from the last Friday in
September to a January through December period. The new 1999 fiscal
year began on December 26, 1998 and will end on December 24, 1999.
Fiscal 2000 will be a 53 week year and end on December 29, 2000.
4. The consolidated financial statements include the accounts of the
"Company" and its wholly-owned subsidiaries; Kal-Mar Properties Corp.
("Kal-Mar"), Concord Financial Services, Inc. ("Concord") and Prime
Foods Development Corporation ("Prime"). In connection with the Merger
discussed in Note 1, the Company issued $100.0 million of Senior
Unsecured Notes (the "Notes"), which bear interest at 12.5% per annum
and mature in 2004. (See the Company's Annual Report on Form 10-K for a
further discussion of the Notes). In January 1999, the Company
repurchased in aggregate $14.7 million (face value) of the then
outstanding notes. The Notes are guaranteed on a senior unsecured basis
by all existing subsidiaries (there are no non-guarantor subsidiaries)
and any future U.S. subsidiaries of the Company. The guarantees of the
subsidiaries are full, unconditional, joint and several. Summary
financial data for Kal-Mar, Concord and Prime are as follows:
5
<PAGE> 8
<TABLE>
<CAPTION>
September 24, 1999
(Dollars in Thousands)
Kal-Mar Concord Prime
-------- -------- --------
<S> <C> <C> <C>
Current assets $ 17 $ 56,941 $ 12
Non-current assets 1,005 35,935 --
Current liabilities -- (2,781) (711)
Non-current liabilities -- (42,055) --
-------- -------- --------
Net assets (liabilities) 1,022 48,040 (699)
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
For the Thirty-nine Weeks Ended
September 24, 1999
(Dollars in Thousands)
Kal-Mar Concord Prime
------- ------- -----
<S> <C> <C> <C>
Net revenues $ 120 $14,391 $--
Gross profit 120 14,391 --
Income before provision for income tax 41 5,300 --
</TABLE>
Separate financial statements of the Company's subsidiaries are not presented as
the Company's management has determined that (i) the data presented above
provides meaningful information and (ii) the data in separate financial
statements other than that presented above would not be material to investors in
the Notes.
5. During the period ended December 25, 1998, management authorized and
committed the Company to undertake three significant restructurings and
recorded a combined restructuring charge of $5.3 million. The
restructuring plan involves (i) outsourcing the production and
fulfillment of its food products to a third party and the closing of
its Farmingdale, New York processing plant, (ii) the consolidation of
certain of its leased facilities and (iii) the involuntary termination
of certain employees at its Farmingdale, New York corporate
headquarters. During the quarter ended September 24, 1999, there have
been no significant changes to the restructuring plan authorized by
management.
6. During January 1999, the Company repurchased in aggregate $14.7 million
(face value) of its Notes at a cost of $6.3 million. Additionally, the
Company wrote-off approximately $0.8 million of unamortized debt
issuance cost related to the repurchased Notes. The Company realized an
extraordinary gain of $4.6 million which was net of a tax provision of
$3.0 million.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Certain information set forth herein contains forward-looking statements, as
such term is defined in Section 27A of the Securities Act of 1933, as amended
and Section 21 E of the Securities Exchange Act of 1934. Such statements are
subject to certain risks and uncertainties discussed herein, which could cause
actual results to differ materially from those in the forward-looking
statements.
OVERVIEW
The Company is a leading direct marketer of high quality, value-added food
programs and products related to in-home dining and entertainment. Using a
combination of telemarketing and in-home selling, Colorado Prime Corporation
believes that it is the only company to offer this type of in-home shopping
service on a broad scale, currently serving 32 states through 74 sales offices.
The Company sells individually packaged, top quality meats and poultry, seafood,
assorted pasta dishes and a wide selection of prepared entrees for direct
delivery to consumer households. The Company's food products are of a quality
generally found only in specialty gourmet shops and high-end restaurants and
require simple preparation using a microwave, conventional oven or grill. As a
complement to its food products, the Company also sells food-related and home
entertainment appliances and accessories with unique features not generally
available in traditional retail channels. The purchase of non-food items enables
customers to earn a lifetime discount on food purchases.
RESULTS OF OPERATIONS
THIRTEEN WEEKS ENDED SEPTEMBER 24, 1999 COMPARED TO THIRTEEN WEEKS ENDED
SEPTEMBER 25, 1998.
Total revenue for the thirteen weeks ended September 24, 1999 and September 25,
1998 was $35.8 million. Food revenue for the thirteen weeks ended September 24,
1999 decreased by $0.6 million, or 3.0%, to $19.7 million from $20.3 million
for the thirteen weeks ended and September 25, 1998. Non-food revenue for the
thirteen weeks ended September 24, 1999 increased by $0.5 million, or 3.5%, to
$12.7 million from $12.2 million for the thirteen weeks ended September 25,
1998. The reduction in food revenue was due to lower average order size for
both new and existing customers, partially offset by an increase in sales
volume. The increase in non-food revenue was due to higher sales to existing
customers partially offset by lower sales to new customers. Finance income for
the thirteen weeks ended September 24, 1999 increased by $0.1 million or 3.7%
to $3.4 from $3.3 million for the thirteen weeks ended September 25, 1998.
Gross profit for the thirteen weeks ended September 24, 1999 increased by $0.5
million, or 1.9%, to $23.8 million from $23.3 million for the thirteen weeks
ended September 25, 1998. The gross profit margin for the thirteen weeks ended
September 24, 1999 increased to 66.5% from 65.2% for the thirteen weeks ended
September 25, 1998. The increase in the gross profit margin
7
<PAGE> 10
was primarily due to the shift in production of certain of its food products
from the Company owned facility to an outside processor in connection with the
December 1998 restructuring plan.
SG&A expenses are principally comprised of selling, telemarketing, delivery and
general and administrative expenses. For the thirteen weeks ended September 24,
1999, these expenses decreased by $3.0 million, or 12.8%, to $20.4 million from
$23.4 million for the thirteen weeks ended September 25, 1998. The decrease was
due to cost reductions primarily related to payroll and bad debt expense,
certain of which are not expected to recur.
During the thirteen weeks ended September 25, 1998 the Company incurred
approximately $0.8 million of severance-related costs to the former Chief
Executive Officer in accordance with the terms of his employment agreement.
There were no such cost incurred during the thirteen weeks ended September 24,
1999.
Interest expense for the thirteen weeks ended September 24, 1999 and September
25, 1998 was $4.1 million. The Company had a greater level of borrowing at a
higher rate of interest under the amended revolving credit agreement and
incurred interest in connection with the new corporate headquarters capital
lease which was offset by reduced indebtedness under the Senior Notes resulting
from the Senior Note repurchase.
Other expense for the thirteen weeks ended September 24, 1999 and September 25,
1998 was $0.2 million.
Benefit for income taxes for the thirteen weeks ended September 24, 1999
decreased by $1.8 million to a benefit of $0.3 million from a benefit of $2.1
million for the thirteen weeks ended September 25, 1998. The decrease was due to
a lower pre-tax loss.
Net loss for the thirteen weeks ended September 24, 1999 decreased to $0.9
million from a loss of $3.4 million for the thirteen weeks ended September 25,
1998 for the reasons discussed above.
THIRTY-NINE WEEKS ENDED SEPTEMBER 24, 1999 COMPARED TO THIRTY-NINE WEEKS ENDED
SEPTEMBER 25, 1998.
Total revenue for the thirty-nine weeks ended September 24, 1999 decreased by
$3.7 million, or 3.2% to $110.0 million from $113.7 million for the thirty-nine
weeks ended September 25, 1998. Food revenue for the thirty-nine weeks ended
September 24, 1999 decreased by $3.3 million, or 5.3%, to $60.1 million from
$63.4 million for thirty-nine weeks ended and September 25, 1998. Non-food
revenue for the thirty-nine weeks ended September 24, 1999 decreased by $0.2
million, or 0.7%, to $39.7 million from $39.9 million for the thirty-nine weeks
ended September 25, 1998. The reduction in food revenue was due to lower food
sales to new and existing customers caused in part by two less food delivery
days during the thirty-nine weeks ended September 24, 1999 as compared to 1998.
The reduction in non-food revenue was due to lower sales to new and existing
customers. Finance income for the thirty-nine weeks ended September 24, 1999 and
September 25, 1998 was $10.3 million.
Gross Profit for the thirty-nine weeks ended September 24, 1999 decreased by
$2.4 million, or 3.3%, to $72.4 million from $74.8 million for the thirty-nine
weeks ended September 25, 1998.
8
<PAGE> 11
The gross profit margin for the thirty-nine weeks ended September 24, 1999 and
September 24, 1998 was 65.8%.
SG&A expenses are principally comprised of selling, telemarketing, delivery and
general and administrative expenses. For the thirty-nine weeks ended September
24, 1999, these expenses decreased by $3.4 million, or 5.2%, to $63.0 million
from $66.4 million for the thirty-nine weeks ended September 25, 1998. The
decrease was primarily due to certain cost reductions primarily related to
payroll and bad debt expense, certain of which are not expected to recur.
During the thirty-nine weeks ended September 25, 1998 the Company incurred
approximately $0.8 million of severance-related costs to the former Chief
Executive Officer in accordance with the terms of his employment agreement.
There were no such cost incurred during the thirty nine weeks ended September
24, 1999.
Interest expense for the thirty-nine weeks ended September 24, 1999 increased to
$12.2 million from $12.1 million for the thirty-nine weeks ended September 25,
1998. The increase was attributable to a greater level of borrowing at a higher
rate of interest under the amended revolving credit agreement, fees incurred in
connection with the amended revolving credit agreement and interest incurred in
connection with the new corporate headquarters capital lease which was partially
offset by reduced indebtedness under the Senior Notes resulting from the Senior
Note repurchase.
Other expense for the thirty-nine weeks ended September 24, 1999 and September
25, 1998 was $0.4 million.
Benefit for income taxes for the thirty-nine weeks ended September 24, 1999
decreased by $0.9 million to $1.1 million from a benefit of $2.0 million for the
thirty-nine weeks ended September 25, 1998. The decrease was due to a lower
pre-tax loss.
Extraordinary gain for the thirty-nine weeks ended September 24, 1999 resulted
from the repurchase of $14.7 million of Senior Notes at a cost of $6.3 million.
Additionally, the Company incurred $0.8 million of non-cash charges related to
the repurchase. The Company realized an extraordinary gain of $4.6 million which
was net of a tax provision of $3.0 million
Net income for the thirty-nine weeks ended September 24, 1999 increased to $1.2
million from a loss of $4.0 million for the thirty-nine weeks ended September
25, 1998 for the reasons discussed above.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities for the thirty-nine weeks ended September
24, 1999 was $0.4 million, primarily comprised of a net income of $1.2 million,
non cash charges of $3.7 million and a decrease in inventory of $0.6 million
offset by an increase in accounts receivable of $3.8 million and a decrease in
current liabilities of $1.9 million.
Net cash used in investing activities for the thirty-nine weeks ended September
24, 1999 of $0.7 million was for capital expenditures.
9
<PAGE> 12
Net cash provided by financing activities for the thirty-nine weeks ended
September 25, 1999 was $0.6 million, comprised of additional borrowings under
the revolver to fund the Senior Note repurchase.
The Company had working capital of $47.1 million as of September 24, 1999
compared to $50.9 million as of December 25, 1998.
The Company has a $50.0 million working capital revolver, with $9.3 million of
unused availability as of September 24, 1999. The working capital revolver
contains certain covenants requiring the Company to meet certain financial tests
including a minimum fixed charge coverage ratio, a maximum leverage ratio, and a
limitation on capital expenditures. The working capital revolver and the senior
unsecured notes impose certain other restrictions on the Company, including
restrictions on its ability to incur indebtedness, pay dividends, make
investments, grant liens, sell its assets and engage in certain other
activities. In addition, the indebtedness of the Company under its working
capital revolver is secured by all of the assets of the Company, including the
Company's real and personal property, inventory, accounts receivable,
intellectual property and other intangibles.
Management believes that cash flow from operations, together with other
available sources of funds including enhanced borrowing capacity from
refinancing the current working capital revolver will be adequate for at least
the next twelve months to make required payments of principal and interest on
the Company's indebtedness and to fund anticipated capital expenditures and
working capital requirements. The ability of the Company to meet its debt
service obligations and reduce its total debt will be dependent, however, upon
the future performance of the Company which, in turn, will be subject to general
economic conditions and to financial, business and other factors, including
factors beyond the Company's control. Debt outstanding under the working capital
revolver will bear interest at floating rates; therefore, the Company's
financial condition is and will continue to be affected by changes in prevailing
interest rates.
During January 1999, the Company repurchased in aggregate $14.7 million (face
value) of its Senior Notes at a cost of $6.3 million. The purchase was funded by
additional borrowings under its working capital revolver and will generate
approximately $1.4 million in annual cash interest savings.
The Company is subject to certain market risk factors related to its fixed rate
senior unsecured notes and its variable rate working capital revolver. The
Company does not believe the interest rate risk to be material and has disclosed
the factors in its Annual Report on Form 10-K for the year ended September 25,
1998.
Inflation
The Company believes that inflation has not had a material impact on its results
of operations for the thirteen weeks ended September 24, 1999.
10
<PAGE> 13
Other -Year 2000
The Company has developed a comprehensive plan to address Year 2000 issues. The
plan addresses three main areas: (a) information systems; (b) embedded chips;
and (c) supply chain readiness. To oversee the process, the Company has
established an oversight committee which reports to the Board of Directors and
the Audit Committee.
The Company has identified potential deficiencies related to Year 2000 in its
information systems, both hardware and software, and is in the process of
addressing them through upgrades and other remediation. The Company expects to
complete remediation and testing of its internal systems by the end of the
fourth quarter. With respect to other equipment with date-sensitive operating
controls such as manufacturing equipment, HVAC, security and other similar
systems, the Company has completed the process of identifying those items which
may require remediation or replacement. The Company has completed remediation or
replacement and testing of these systems. As for the third parties, the Company
has identified and contacted both inventory and non-inventory suppliers for Year
2000 readiness. For the critical vendors for which an appropriate response has
not been received, the Company has begun to identify potential alternative
suppliers.
Based upon the Company's current estimates, incremental out-of-pocket costs of
its Year 2000 program are not expected to be material.
At this stage of the process, the Company believes that it is difficult to
specifically identify the cause of the most reasonable worst case Year 2000
scenario. As with all manufacturers and distributors of products such as those
sold by the Company, a reasonable worst case scenario would be the result of
failures of third parties (including, without limitation, governmental entities
and entities with which the Company has no direct involvement) that continue for
more than several days in various geographic areas where the Company's products
are produced or sold or in areas from which the Company's raw materials and
products are sourced. In connection with the production of products and
suppliers of raw materials the Company is considering various contingency plans.
Continuing failures that limit consumers' ability to purchase would most likely
have a material adverse effect on the Company's results of operations. The
extent of such lost revenue cannot be estimated at this time; however, the
Company is considering contingency plans to limit, to the extent possible, the
effect of such lost revenue on the Company's results of operations. Any such
plans would necessarily be limited to matters over which the Company can
reasonably control.
The Company's Year 2000 efforts are ongoing and its overall plan, as well as the
consideration of contingency plans, will continue to evolve, as new information
becomes available. While the Company anticipates continuity of its business
activities, that continuity will be dependent upon its ability, and the ability
of third parties with whom the company relies on directly, or indirectly, to be
Year 2000 compliant.
11
<PAGE> 14
PART II OTHER INFORMATION
Item 5. Other Information
Matthew Burris tendered his resignation as Director, Vice President and Chief
Financial Officer on October 9, 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) There were no Exhibits filed during the period
(b) There were no Forms 8-K filed during the period
12
<PAGE> 15
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 daily authorized.
COLORADO PRIME CORPORATION
(Registrant)
Dated: November 5, 1999 By: /s/ Steven Lachenmeyer
-----------------------
Vice President Finance
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-24-1999
<PERIOD-START> DEC-26-1999
<PERIOD-END> SEP-24-1999
<CASH> 603
<SECURITIES> 0
<RECEIVABLES> 97,304
<ALLOWANCES> 8,423
<INVENTORY> 4,079
<CURRENT-ASSETS> 69,365
<PP&E> 16,325
<DEPRECIATION> 7,492
<TOTAL-ASSETS> 166,333
<CURRENT-LIABILITIES> 22,262
<BONDS> 84,093
0
0
<COMMON> 0
<OTHER-SE> 25,868
<TOTAL-LIABILITY-AND-EQUITY> 166,333
<SALES> 99,716
<TOTAL-REVENUES> 10,262
<CGS> 37,623
<TOTAL-COSTS> 100,599
<OTHER-EXPENSES> 1,608
<LOSS-PROVISION> 6,046
<INTEREST-EXPENSE> 12,228
<INCOME-PRETAX> (4,457)
<INCOME-TAX> (1,103)
<INCOME-CONTINUING> (3,354)
<DISCONTINUED> 0
<EXTRAORDINARY> 4,556
<CHANGES> 0
<NET-INCOME> 1,202
<EPS-BASIC> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>The Company does not report EPS as there is no public market for its equity.
</FN>
</TABLE>
