SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
20549
FORM 1O-Q/A
AMENDMENT 1
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended December 2, 1995 as amended on of April 23, 1996
Commission File No. 0-15696
PIEMONTE FOODS, INC.
(Exact name of registrant as specified in its charter)
South Carolina 57-0626121
(State of other jurisdiction of I.R.S. Employer
incorporation of organization) Identification
400 Auqusta Street, Greenville, South Carolina 29604
(Address of principal executive offices)
Registrant's telephone number, including area code: (803) 242-0424
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No ____
The number of shares of common stock outstanding as of December 31, 1995
was 1,449,803.
<PAGE>
PIEMONTE FOODS, INC.
INDEX TO FORM 1O-Q/A
Part I. Financial Information (Amended)
Item 1. Financial Statements
Consolidated Balance Sheets - December 2, 1995 and June 3,
1995.
Consolidated Statements of Income for the second quarters
ended December 2, 1995 and November 26, 1994 and the six
months then ended.
Consolidated Statements of Cash Flows for the second
quarters ended December 2, 1995 and November 26, 1994 and
the six months then ended.
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
PIEMONTE FOODS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS December 2, 1995 June 3, 1995
- ---------------------------------------------------------------------------
CURRENT ASSETS
Cash & cash equivalents 352,827 885,967
Accounts receivable, net 2,301,697 1,778,773
Inventories 2,032,409 1,909,104
Prepaid expenses 355,587 299,059
-------------------------------
TOTAL CURRENT ASSETS 5,042,520 4,872,903
-------------------------------
PROPERTY, PLANT & EQUIPMENT 5,366,252 5,373,892
DEFERRED CHARGES, INTANGIBLE AND OTHER ASSETS
Excess of cost over fair value of net
assets acquired 786,834 803,310
Investment in joint venture 50,000 50,000
Loan to joint venture 308,532 0
Other assets 179,015 126,118
------------------------------
Total 1,324,381 979,428
------------------------------
TOTAL ASSETS 11,733,153 11,226,223
==============================
LIABILITIES AND STOCKHOLDER'S EQUITY
- --------------------------------------------------------------------------
CURRENT LIABILITIES
Current portion of long-term debt 609,131 609,131
Short term borrowings 500,000 0
Accounts payable, trade 1,902,119 1,379,088
Accrued promotional allowances 95,521 78,069
Accrued compensation and payroll taxes 149,004 184,842
Accrued property taxes 86,845 76,762
Other accrued Expenses 45,532 99,458
-----------------------------
TOTAL CURRENT LIABILITIES 3,388,152 2,427,350
-----------------------------
LONG-TERM DEBT 1,052,658 1,357,224
DEFERRED INCOME TAXES 420,728 420,728
STOCKHOLDER'S EQUITY
Common stock 14,498 14,481
Capital in excess of stated value of
common stock 2,752,829 2,744,938
Retained earnings 4,104,288 4,261,502
-----------------------------
TOTAL STOCKHOLDER'S EQUITY 6,871,615 7,020,921
-----------------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY 11,733,153 11,226,223
=============================
See accompanying notes to Financial Statements
<PAGE>
PIEMONTE FOODS, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the three and six months ended December 2, 1995 and November 26, 1994
<TABLE>
<CAPTION>
Three Months Six Months
1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales 7,984,259 8,533,001 14,626,213 15,101,771
Operating Expenses
Cost of Goods Sold 6,152,109 6,275,347 11,628,158 11,333,110
Selling, general and administrative 1,692,774 1,986,339 3,197,025 3,493,300
- -----------------------------------------------------------------------------------------------------------------
7,844,883 8,261,686 14,825,183 14,826,410
- -----------------------------------------------------------------------------------------------------------------
Operating Income 139,376 271,315 (198,970) 275,361
Other Expenses
Interest expense 45,357 34,805 84,567 68,084
Other expense (income) (13,758) (14,293) (15,308) (31,531)
Sale of assets 1,024 0 4,781 0
Interest income (8,315) (5,332) (19,440) (14,812)
- -----------------------------------------------------------------------------------------------------------------
24,308 15,180 54,600 21,741
Income Before Income Taxes 115,068 256,135 (253,570) 253,620
Provision for Income Taxes 43,726 125,506 (96,356) 124,274
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Net Income (Loss) 71,342 130,629 (157,214) 129,346
- -----------------------------------------------------------------------------------------------------------------
Average Number of Shares Outstanding 1,529,803 1,542,192 1,529,803 1,542,192
Net Income Per Share 0.05 0.08 (0.10) 0.08
</TABLE>
See accompanying notes to Financial Statements.
<PAGE>
PIEMONTE FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and six months ended December 2, 1995 and November 26, 1994
<TABLE>
<CAPTION>
Three Months Six Months
1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income 71,342 130,629 (157,214) 129,346
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 186,138 187,962 379,706 358,937
Decrease (increase) in:
Receivables (362,033) (257,805) (522,924) (23,650)
Inventories (246,613) (114,815) (123,305) (407,849)
Prepaid expenses 191,533 236,938 (56,528) (27,750)
Other assets (40,174) 12,393 (36,421) 35,920
Investment in joint venture 0 (50,000) 0 (50,000)
Increase (decrease) in:
Accounts payable 229,973 (89,329) 523,031 352,113
Accrued liabilities (41,213) 89,849 (62,229) (74,430)
- -----------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities (11,047) 145,822 (55,884) 292,637
- -----------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities
Purchases of property, plant and equipment (168,947) (298,333) (372,066) (817,683)
Loan to joint venture 0 0 (308,532) 0
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Net cash used in investing activities (168,947) (298,333) (680,598) (817,683)
- -----------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities
Proceeds from issuance of common stock (3,751) 15,331 7,908 28,689
Advances (repayments) of credit line 0 250,000 500,000 250,000
Addition (Repayment) of long-term debt (152,283) (111,390) (304,566) (222,780)
- -----------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (156,034) 153,941 203,342 55,909
- -----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash (336,028) 1,430 (533,140) (469,137)
Cash, beginning of period 688,855 560,416 885,967 1,030,983
- -----------------------------------------------------------------------------------------------------------------
Cash, end of period 352,827 561,846 352,827 561,846
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements
<PAGE>
PIEMONTE FOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 2, 1995
1. Principles of Consolidation
The accompanying financial statements include the accounts of Piemonte
Foods, Inc. and its wholly-owned subsidiaries, Piemonte Foods of
Indiana, Inc. and Origena, Inc. The consolidated balance sheet as of
December 2, 1995 and the related statements of income and cash flows for
the six month period then ended are unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of such
financial statements have been included. Such adjustments consisted only
of normal recurring items.
The financial statements and notes are presented as permitted by Form
10-Q, and do not contain certain information included in the company's
annual financial statements and notes.
Note 1 - Reclassification
Sales related costs assigned to cost of goods sold have been reclassified
to selling, general, and administrative. The impact is:
2Q YTD
96 $274K $478K
95 $318K $413K
Note 2 - Restatement of Financial Statements
Restatements as detailed in the amended 10-K for June 3, 1995 impacted
this quarter as well as its previous year's quarter as follows
<TABLE>
<CAPTION>
2Q YTD 2Q YTD
Net income increase (decrease) 1996 1996 1995 1995
<S> <C> <C> <C> <C>
Expensing previously capitalized costs 101,213 122,044 44,454 105,792
Origena acquisition - purchase versus pooling (18,416) (36,832) (18,416) (36,832)
Net income tax of (31,463) (32,381) (9,894) (26,204)
Net income 51,334 52,831 16,143 42,755
Net income per share 0.04 0.04 0.01 0.03
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Working capital decreased $108 thousand to $1,653 thousand for the
three months ending December 2, 1995 compared with the prior period;
this is $792K less than the beginning of the fiscal year. Accounts
receivable rose $112 thousand due partially to a higher level of
business with the United States military. Inventories increased $197
thousand as a result of new product development.
During the second quarter of fiscal 1996, capital utilization totals
$169 thousand versus $312 thousand a year ago. For the year-to-date
period, capital was $681 thousand compared with $831 thousand the prior
year. The largest single capital commitment in fiscal 1996 has been a
loan to the company's joint venture in Holland, which is expected to
begin start-up operations in late February, 1996. Cash levels are at a
satisfactory level.
The Company is in compliance with all restrictive covenants contained in
its debt agreements.
RESULTS OF OPERATIONS
Quarter Ended December 2, 1995 Compared to
Quarter Ended November 26, 1994
Net sales for the second quarter of fiscal 1996 were $8.0 million
versus $8.5 million last year. Cost of goods sold rose to 77.0% of
net sales from 73.5% a year ago. This represents improvement over the
first quarter level, partially benefiting from higher volumes. Results
for the most recent quarter were impacted by higher flour prices which
began last June and continued pressure on packaging costs. The improved
gross margin in the second quarter includes a price increase initiated
in September, 1995.
Gross margins continue to be impacted by the loss of a high margin
product packed specifically for a national customer. A change in the
customer's strategic direction eliminated the need for the product.
Continued emphasis on cost restraint and reduction resulted in a $209
thousand reduction in selling, general and administrative (SG&A)
expenses for the second quarter of fiscal 1996 versus prior year. SG&A
expenses were 21.2% of net sales the the three months ended December 2,
1995, versus 23.3% a year ago.
The improved gross margin for the second quarter versus the prior
quarter combined with lower selling, general and administrative expenses
contributed to net income of $71 thousand for the quarter.
<PAGE>
Six Months Ended December 2, 1995 Compared to
Six Months Ended November 26, 1994
Net sales for the six months ended December 2, 1995 declined 3% to $14.6
million from $15.1 million the prior year. Higher flour prices and
packaging costs throughout the first half of fiscal 1996 contributed to
a increase of $673 thousand in the cost of goods on an equivalent basis;
due to lower net sales in 1996 the actual increase is $295K. As a
result, gross margin was 20.5% for the first two quarters of fiscal 1996
versus 25.0% last year.
Selling, general and administrative expenses were $3.2 million or 8.5%
lower than the comparable period a year ago. Year-to-date 1996
results include a net loss of $157 thousand compared with net income of
$129 thousand the prior year. A weakness that was previously reported in
the company's Foodservice Division was not fully absorbed in the first
six months of fiscal 1996. The company penetration in Deli and
Industrial channels of distribution continues to improve.
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
None
b) Reports on Form 8-K
No reports on Form 8-K were filed by the
Company during the quarter ended December 2, 1995.
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 hereunto duly authorized.
PIEMONTE FOODS, INC.
Date By _________________________
Virgil L. Clark
President and CEO
__________________________
Roy E. Gogel
Vice President/CFO
