SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended February 29, 2000
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 AND 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________to ________
Commission File Number 0-16130
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NORTHLAND CRANBERRIES, INC.
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(Exact name of registrant as specified in its charter)
Wisconsin 39-1583759
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
800 First Avenue South
P.O. Box 8020
Wisconsin Rapids, Wisconsin 54495-8020
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code (715) 424-4444
----------------
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Former name, former address and former fiscal year, if changed since last
report.
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 __
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
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 ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date:
Class A Common Stock April 13, 2000 19,702,221
Class B Common Stock April 13, 2000 636,202
<PAGE>
NORTHLAND CRANBERRIES, INC.
FORM 10-Q INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Condensed Consolidated Balance Sheets.............................3
Condensed Consolidated Statements of Operations...................4
Condensed Consolidated Statements of Cash Flows..................5
Notes to Condensed Consolidated Financial Statements..............6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 7-9
Item 3. Quantitative and Qualitative Disclosure About
Market Risk...................................................10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders..............11
Item 6. Exhibits and Reports on Form 8-K.................................12
SIGNATURE.................................................................13
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
NORTHLAND CRANBERRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
ASSETS
(Unaudited)
February 29, August 31,
2000 1999
------------ -----------
Current assets:
Cash and cash equivalents $ 62 $ 769
Accounts and notes receivable 28,772 35,453
Inventories 107,150 97,060
Prepaid expenses 6,384 3,870
Deferred income taxes 2,313 4,332
---------- ----------
Total current assets 144,681 141,484
Property and equipment - at cost 212,276 207,071
Less accumulated depreciation 42,137 37,651
---------- ----------
Property and equipment, net 170,139 169,420
Trademarks, tradenames and goodwill, net 40,073 41,074
Other assets 2,763 2,943
---------- ----------
Total assets $ 357,656 $ 354,921
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 33,887 $ 18,637
Accrued liabilities 12,307 9,925
Current portion of long-term debt 2,540 2,354
---------- ----------
Total current liabilities 48,734 30,916
Long-term debt 170,495 147,797
Deferred income taxes -- 15,655
Shareholders' equity:
Common stock - Class A, $.01 par value,
19,702,221 and 19,655,621 shares issued
and outstanding, respectively 197 196
Common stock - Class B, $.01 par value, 636,202
shares issued and outstanding 6 6
Additional paid-in capital 148,977 148,769
Retained earnings (accumulated deficit) (10,753) 11,582
---------- ----------
Total shareholders' equity 138,427 160,553
---------- ----------
Total liabilities and shareholders' equity $ 357,656 $ 354,921
========== ==========
See accompanying notes to the condensed financial statements.
3
<PAGE>
NORTHLAND CRANBERRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(Unaudited)
<TABLE>
<CAPTION>
For the three For the six
months ended months ended
February 29, February 28, February 29, February 28,
2000 1999 2000 1999
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenues $68,621 $54,955 $143,588 $89,337
Cost of sales 73,041 34,730 124,596 55,234
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Gross profit (loss) (4,420) 20,225 18,992 34,103
------- ------- -------- -------
Costs and expenses:
Selling, general and administrative 26,600 18,108 46,547 30,470
Interest 3,492 1,987 6,403 3,290
------- ------- -------- -------
Total costs and expenses 30,092 20,095 52,950 33,760
------- ------- -------- -------
Income (loss) before income taxes (34,512) 130 (33,958) 343
Income taxes (benefit) (13,476) 63 (13,244) 155
------- ------- -------- -------
Net income (loss) $(21,036) $ 67 $(20,714) $ 188
======= ======= ======== =======
Net income (loss) per share:
Basic $ (1.04) $ 0.00 $ (1.02) $ 0.01
======= ======= ======== =======
Diluted $ (1.04) $ 0.00 $ (1.02) $ 0.01
======= ======= ======== =======
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
4
<PAGE>
NORTHLAND CRANBERRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
For the six months ended
February February
29, 2000 28, 1999
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Operating activities:
<S> <C> <C>
Net income(loss) $ (20,714) $ 188
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization of property and equipment 4,487 3,681
Amortization of tradenames, trademarks and goodwill 1,252 493
Provision (benefit) for deferred income taxes (13,636) 187
Inventory lower of cost or market adjustment 27,000 --
Changes in assets and liabilities
(net of effects of business acquisition):
Receivables and prepaid expenses 4,166 (9,835)
Inventories (38,046) (28,397)
Accounts payable and accrued liabilities 19,140 1,821
---------- ----------
Net cash used in operating activities (16,351) (31,862)
---------- ----------
Investing activities:
Acquisition of business -- (29,281)
Property and equipment purchases (4,471) (3,737)
Other (546) (518)
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Net cash used in investing activities (5,017) (33,536)
---------- ----------
Financing activities:
Net increase in borrowings under revolving credit facilities 23,300 68,450
Payments on long-term debt (1,227) (1,460)
Dividends paid (1,621) (1,577)
Proceeds from exercise of stock options 209 359
Other -- (35)
---------- ----------
Net cash provided by financing activities 20,661 65,737
---------- ----------
Net (decrease) increase in cash and cash equivalents (707) 339
Cash and cash equivalents
Beginning of period 769 633
---------- ----------
End of period $ 62 $ 972
========== ==========
Supplemental cash flow information:
Cash paid for:
Interest (net of amounts capitalized) $ 6,067 $ 3,178
Income taxes, net $ 846 $ 12
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
5
<PAGE>
NORTHLAND CRANBERRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 BASIS OF PRESENTATION
- ------------------------------
The condensed consolidated financial statements included herein have been
prepared by the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. In the opinion of the Company, the
foregoing statements contain all adjustments necessary to present fairly the
financial position of the Company as of February 29, 2000, the results of its
operations for the three-month and six-month periods ended February 29, 2000 and
February 28, 1999, respectively, and its cash flows for the six-month periods
ended February 29, 2000 and February 28, 1999, respectively. The Company's
consolidated balance sheet as of August 31, 1999 included herein has been taken
from the Company's audited financial statements of that date included in the
Company's latest annual report.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed financial statements can be
read in conjunction with the financial statements and the notes thereto included
in the Company's latest annual report.
The Company periodically reviews long-lived assets to assess recoverability,
and impairments will be recognized in operating results if a permanent
diminution in value occurs.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
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CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
GENERAL
On March 8, 2000, after the end of our fiscal second quarter, we sold the
inventory, raw materials, contracts and intangible assets comprising our private
label juice business to Cliffstar Corporation in return for Cliffstar's
promissory note for $28 million, bearing interest at a rate of 10% per annum,
and approximately $6.3 million in cash related to inventory transferred to
Cliffstar on the closing date. We are also entitled to receive approximately $4
million in installment payments over the remainder of fiscal 2000 for cranberry
concentrate sold to Cliffstar. We may also receive additional amounts pursuant
to an earn out provision over a period of six years from the closing date. We
also entered into a co-packing agreement with Cliffstar pursuant to which we
will process certain juice products for Cliffstar, as well as a cranberry
purchase agreement pursuant to which Cliffstar will purchase cranberries from us
for use in its juice products. No plants or equipment were included in the sale.
Our private label juice business represented approximately $43 million of the
Company's $237 million in fiscal 1999 revenues and approximately $19 million of
the Company's $144 million in revenues for the first six months of fiscal 2000.
As a result of the sale, we expect to realize an after-tax gain of approximately
$1.2 million, or approximately $0.06 per share, in the third quarter of fiscal
2000.
On March 30, 2000, the Cranberry Marketing Committee forwarded a
recommendation to the U.S. Secretary of Agriculture to invoke a marketing order
that would limit the amount of fruit that could be harvested and delivered to
handlers during the domestic 2000 crop year. The recommendation consisted of a
maximum producer allotment of approximately 85% of a grower's average historical
harvest. The recommendation, if approved, would limit the total 2000 cranberry
crop to approximately 5.4 million barrels. We cannot determine whether or to
what extent this order, if adopted, would impact our results of operations.
RESULTS OF OPERATIONS
Total revenues for the three months ended February 29, 2000 were $68.6
million, a 24.9% increase over revenues of $55.0 million in the prior year's
second quarter. Revenues for the six-month period ended February 29, 2000
increased 60.7% to $143.6 million from $89.3 million during the same period in
fiscal 1999. The increased revenues were primarily due to the effects of a full
six months of sales of our Seneca branded products, as well as increases over
the prior year period in our co-packing sales and sales to the foodservice
channels. Trade industry data for the 12-week period ended February 27, 2000
showed that our Northland brand 100% juice products achieved an 11.1% market
share of the supermarket shelf-stable cranberry beverage category on a national
basis, down from a 12.8% market share for the 12-week period ended February 28,
1999. However, that decrease was offset by gains in market share as a result of
our successful launch of our Seneca brand cranberry juice product line,
resulting in a total combined market share of supermarket shelf-stable cranberry
beverages for our Northland and Seneca branded product lines of 13.6% for the
12-week period ended February 27, 2000.
In the second quarter of fiscal 2000, we took a $27.0 million pre-tax,
non-cash, lower of cost or market charge to cost of sales which resulted in
reducing the carrying value of our cranberry inventory to market value. The
charge amounted to an $0.81 per share loss on an after-tax basis. The write-down
was required under generally accepted accounting principles as a result of (i)
the rapid decline in per-barrel prices of cranberries from $85 only two years
ago to around $20 or less today caused by three straight industry record
cranberry crops; (ii) our historical fixed price cranberry crop purchase
contracts with other growers that locked in these higher prices to growers who
delivered their cranberries to us; and (iii) the increased levels of competitive
price discounting and selling activities necessary to sell product in the
marketplace. We have revised our cranberry crop purchase agreements so that our
cranberry crop purchase pricing now adjusts to correspond with then current
cranberry market prices. Additionally, the Cranberry Marketing Committee has
recently recommended a federal marketing order for adoption which, if adopted,
could reduce the industry-wide cranberry crop for the year 2000 from the levels
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
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CONDITION AND RESULTS OF OPERATIONS (CONT.)
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that would have otherwise existed. We cannot determine whether or to what extent
this marketing order, if adopted, would impact our results of operations. We
expect that the inventory write-down will reduce the cost of sales of our
branded cranberry juice products, positively impacting gross margins in the
future.
Cost of sales for the second quarter of fiscal 2000 was $73.0 million
compared to $34.7 million for the second quarter of fiscal 1999, resulting in
gross margins of (6.4)% and 36.8% in each respective period. Cost of sales for
the six-month period ended February 29, 2000 was $124.6 million compared to
$55.2 million in the same period in fiscal 1999, yielding gross margins of 13.2%
and 38.2%, respectively. Cost of sales without taking into account the effects
of the inventory write-down would have been $46.0 million and $97.6 million for
the three- and six-month periods ended February 29, 2000, which would have
resulted in gross margins of 32.9% and 32.0%, respectively. The decrease in
gross margin in fiscal 2000 was primarily due to the lower of cost or market
inventory write-down. We expect that our gross margins during the remainder of
fiscal 2000 should be higher due to lower cost of goods sold resulting from the
inventory write-down and the recent sale of our private label juice business.
However, our gross margins will continue to be dependent upon our relative
product mix and competitive market conditions.
Additionally, in the second quarter of fiscal 2000, we took a pre-tax $3.8
million charge to earnings (selling, general and administrative expense) in
order to provide for certain uncollectible accounts receivable related to
unauthorized customer deductions and discounts. The charge amounted to an
approximate $0.11 per share loss on an after-tax basis. We intend to continue to
pursue collection of these amounts where it is cost effective to do so.
Selling, general and administrative expenses were $26.6 million, or 38.8%
of total revenues, for the three-month period ended February 29, 2000 compared
to $18.1 million, or 33.0% of total revenues in the prior year's second fiscal
quarter. Selling, general and administrative expenses were $46.5 million, or
32.4% of total revenues, for the six-month period ended February 29, 2000,
compared to $30.5 million, or 34.1% of total revenues, during the same period in
the prior fiscal year. This increase in selling, general and administrative
expenses was primarily attributable to (i) the provision for uncollectible
accounts receivable discussed above; (ii) costs related to our aggressive
marketing campaign to support the development and growth of our Northland brand
100% juice products and Seneca brand juice products; (iii) expenses to support
our Seneca brand; (iv) one-time unanticipated expenses associated with the
national introduction of our new easy grip bottle; and (v) other increased
expenses and materials costs. We expect to continue to spend heavily on support
and development of our brand through the remainder of fiscal 2000 in light of
the expected continued heavy price discounting and promotional activity by our
competition.
Interest expense was $3.5 million and $6.4 million for the three- and
six-month periods ended February 29, 2000 compared to $2.0 million and $3.3
million during the same periods in fiscal 1999. The increase in our interest
expense was largely due to increased debt levels during the three-and six-month
periods as a result of funding previous acquisitions and increased working
capital needs.
Net loss and per share loss for the three- and six-month periods ended
February 29, 2000 were $21,036,000, or $1.04 per share, and $20,714,000, or
$1.02 per share, respectively, compared to fiscal 1999 second quarter and first
six months' net income and per share earnings
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- -----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (CONT.)
------------------------------------------
of $67,000, or $0.00 per share, and $188,000, or $0.01 per share, respectively.
Approximately $16.5 million of the net after-tax loss was attributable to the
non-cash inventory market write-down. Approximately $2.3 million of the net
after-tax loss was attributable to the provision for uncollectible receivables
related to unauthorized customer deductions and discounts. Approximately $2.2
million and $1.9 million of the net loss was attributable to operations in the
three- and six-month periods ended February 29, 2000, respectively.
FINANCIAL CONDITION
Net cash used for operating activities was $16.4 million in the first six
months of fiscal 2000 compared to $31.9 million used for operating activities in
the same period in fiscal 1999. Net cash used for operating activities during
the first six months of fiscal 2000 was the result of increases in current
assets exceeding increases in current liabilities during the period. Inventory
increased $11.0 million, net of the $27.0 million non-cash lower of cost or
market adjustment, due primarily to the fall harvest of our crop, our purchase
of raw cranberries from other independent cranberry growers, our purchase of
Concord grapes from an independent growers' cooperative, and increased raw
materials and finished goods inventories to support our juice sales. Accounts
receivable and other current assets decreased $4.2 million primarily due to
changes in collection practices and reduced sales. Accounts payable and accrued
liabilities increased $19.1 million due primarily to increased inventory levels
and marketing spending. Working capital decreased $14.6 million to $95.9 million
at February 29, 2000 compared to working capital of $110.5 million at August 31,
1999. Our current ratio decreased to 3.0 to 1.0 from 4.6 to 1.0 at August 31,
1999.
Net cash used for investing activities decreased during the six-month
period ended February 29, 2000 to $5.0 million from $33.5 million during the
same period in the prior fiscal year. The decrease was principally the result of
the acquisition of the Seneca juice business in fiscal 1999.
Net cash provided by financing activities was $20.7 million in the
six-month period ended February 29, 2000, compared to $65.7 million during the
same period in the prior fiscal year. Our debt increased $22.1 million in the
first six months of fiscal 2000 primarily due to cash used in operations and
purchases of property and equipment. Our total debt (including current portion)
was $173.0 million at February 29, 2000 for a total debt-to-equity ratio of 1.25
to 1.00 compared to total debt of $150.2 million and a total debt-to-equity
ratio of 0.94 to 1.00 at August 31, 1999. We utilize our revolving bank credit
facility, together with cash generated from operations, to fund our working
capital requirements throughout the fiscal year. As of February 29, 2000, the
principal amount outstanding under our new revolving credit facility was $147.4
million, with an additional $7.6 million available under our credit facilities.
Effective in the second quarter of fiscal 2000, we obtained a waiver from our
syndicate of bsnks of certain covenant defaults under our credit facility that
resulted primarily from the write-down of inventory. Additionally, we agreed to
modification of certain covenants related to our performance in the third and
fourth quarters of this fiscal year. We believe we will likely need to continue
to renegotiate the terms of our credit facility prior to the end of this fiscal
year. We believe that our credit facilities, together with cash generated from
operations and our intended actions to reduce our near-term working capital
requirements, should be sufficient to fund our ongoing operational needs for the
upcoming third fiscal quarter.
9
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
-------------------------------------------------
We make certain "forward-looking statements," in this Form 10-Q, including
statements about our future plans, goals and other events that have not yet
occurred. We intend that these statements will qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
You can generally identify these forward-looking statements because the context
of such statements will include words such as "believes," "anticipates,"
"expects," or words of similar import. Whether or not these forward-looking
statements will be accurate in the future will depend on certain risks and
factors including risks associated with (i) development, market share growth,
and continued consumer acceptance of our branded juice products, (ii) strategic
actions of our competitors in pricing, marketing, and advertising, (iii)
aggressive spending to support our branded products; (iv) the results of the
sale of our private label business; (v) the ultimate adoption and implementation
of marketing orders of the Cranberry Marketing Committee of the United States
Department of Agriculture; and (vi) agricultural factors affecting our crop and
the crop of other North American growers. You should consider these risks and
factors and the impact they may have when you evaluate our forward-looking
statements. We make these statements based only on our management's knowledge
and expectations on the date of this Form 10-Q. We will not necessarily update
these statements or other information in this Form 10-Q based on future events
or circumstances.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
- ------------------------------------------------------------------
We have not experienced any material changes in our market risk since
August 31, 1999.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- -----------------------------------------------------------
At the Company's annual meeting of shareholders held on January 5, 2000,
John C. Seramur, Jeffrey J. Jones, John Swendrowski, Patrick F. Brennan, Robert
E. Hawk, LeRoy J. Miles and Pat Richter were elected as directors of the Company
for terms expiring at the 2001 annual meeting of shareholders and until their
successors are duly qualified and elected. As of the November 19, 1999 record
date for the annual meeting, 19,702,221 shares of Class A Common Stock and
636,202 shares of Class B Common Stock were outstanding and eligible to vote. Of
these, 17,753,177 shares of Class A Common Stock and all shares of Class B
Common Stock voted at the meeting in person or by proxy. Class A shares are
entitled to one vote each, while Class B shares are entitled to three votes
each. The following table sets forth certain information with respect to the
election of directors at the annual meeting:
Shares
Name of Nominee Shares Voted For Withholding Authority
--------------- ---------------- ---------------------
John C. Seramur 19,484,480 177,303
Jeffrey J. Jones 19,486,537 175,246
John Swendrowski 19,484,847 176,936
Patrick F. Brennan 19,485,300 176,483
Robert E. Hawk 19,480,558 181,225
LeRoy J. Miles 19,486,102 175,681
Pat Richter 19,477,815 183,968
11
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
- -----------------------------------------
A. Exhibits
Exhibits filed with this Form 10-Q report are incorporated herein by
reference to the Exhibit Index accompanying this report.
B. Form 8-K
We did not file any reports on Form 8-K during the quarterly period to
which this Form 10-Q relates. We filed the following reports on Form 8-K
during the third quarter of fiscal 2000 through the date of this Quarterly
Report on Form 10-Q:
Date Filed Date of Report Item
---------- -------------- ----
March 8, 2000 March 7, 2000 Item 5 - Announcement of
Retention of Investment
Bankers, Earnings Charge and
Earnings Results
March 23, 2000 March 8, 2000 Item 2 - Disposition of Private
Label Juice Business
12
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned Chief Financial Officer thereunto duly authorized.
NORTHLAND CRANBERRIES, INC.
DATE: April 14, 2000 By: /s/ John Pazurek
--------------------
John Pazurek
Chief Financial Officer
13
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
4.1 Collateral Pledge Agreement, dated April 13, 2000.
4.2 Third Amendment to Credit Agreement and Limited
Waiver, dated effective February 29, 2000, by and among
Northland Cranberries, Inc., various financial institutions
and Firstar Bank, N.A., as agent.
27 Financial Data Schedule
14
COLLATERAL PLEDGE AGREEMENT
Date: April 13, 2000
BORROWER: NORTHLAND CRANBERRIES, INC.
800 First Avenue South
Wisconsin Rapids, Wisconsin 54495-8020
AGENT: FIRSTAR BANK, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Randy D. Olver, Senior Vice President
1. Security Interest and Collateral. To secure the payment and performance
of each and every debt, liability and obligation of every type and description
which Northland Cranberries, Inc., a Wisconsin corporation (the "Company"), may
now or at any time hereafter owe under or arising out of that certain Credit
Agreement dated as of March 15, 1999, as amended as of May 1, 1999, December 29,
1999 and on the date hereof (as so amended, the "Credit Agreement"), among the
Company, Firstar Bank, N.A., as agent (the "Agent") and certain financial
institutions (together with their respective successors and assigns, the
"Banks") enumerated in the Credit Agreement (whether such debt, liability or
obligation now exists or is hereafter created or incurred, and whether it is or
may be direct or indirect, due or to become due, absolute or contingent, primary
or secondary, liquidated or unliquidated, or joint, several or joint and
several; all such debts, liabilities and obligations being herein collectively
referred to as the "Obligations"), the Company hereby grants the Agent, as agent
for itself and the other Banks, a security interest (herein called the "Security
Interest") in and with respect to the entire right, title and interest of the
Company in that certain Promissory Note dated March 8, 2000 in the original
principal amount of $28,000,000 payable by Cliffstar Corporation ("Cliffstar")
to the Company (the "Cliffstar Note"), together with all rights in connection
with such property, including, without limitation, all principal and interest
payable on the Cliffstar Note (herein called the "Collateral"). Capitalized
terms used herein and not defined shall have the meanings assigned thereto in
the Credit Agreement.
2. Representations, Warranties and Covenants. The Company represents,
warrants and covenants that:
(a) The Company will duly endorse, in blank, each and every instrument
constituting Collateral by signing on said instrument or by signing a
separate document of assignment or transfer, if requested by the Agent.
(b) The Company is the owner of the Collateral free and clear of all
liens, encumbrances, security interests and restrictions, except the
Security Interest, any restrictive legend appearing on any instrument
constituting Collateral and any Permitted Liens.
<PAGE>
(c) The Company will keep the Collateral free and clear of all liens
encumbrances and security interests, except the Security Interest and
Permitted Liens.
(d) The Company will pay, when due, all taxes and other governmental
charges levied or assessed upon or against the Collateral.
(e) At any time, upon request by the Agent, the Company will deliver
to the Agent all notices, financial statements, reports or other
communications received by the Company as an owner or holder of the
Collateral.
3. Rights of the Agent. The Company agrees that the Agent may at any time
after the occurrence of a Default and without notice or demand of any kind to
the Company, (i) notify Cliffstar or the obligor on or issuer of any Collateral
to make payment to the Agent of any amounts due or distributable thereon for the
pro-rata accounts of the Banks; (ii) in the Company's name or the Agent's name
enforce collection of any Collateral by suit or otherwise, or surrender, release
or exchange all or any part of it, or compromise, extend or renew for any period
any obligation evidenced by the Collateral; (iii) receive all proceeds of the
Collateral; and (iv) hold any increase or profits received from the Collateral
as additional security for the Obligations, except that any money received from
the Collateral shall, at the Agent's option, be applied in reduction of the
Obligations for the pro-rata accounts of the Banks, in such order of application
as the Agent may determine, or be remitted to the Company.
4. Events of Default. Each of the following occurrences shall constitute an
event of default under this Agreement (herein called "Event of Default"): (i)
the Company shall fail to pay any or all of the Obligations when due after
giving effect to any grace or cure period or shall fail to observe or perform
any covenant or agreement herein binding on it contained herein; (ii) any
representation or warranty by the Company set forth in this Agreement or made to
the Agent in any financial statements or reports submitted to the Agent by or on
behalf of the Company shall prove materially false or misleading as of the date
when made; or (iii) an Event of Default shall occur under the Credit Agreement.
5. Remedies upon Event of Default. Upon the occurrence and during the
continuance of an Event of Default and in addition to any remedies the Agent may
have under Paragraph 3, above, the Agent may exercise, upon instruction of the
Required Banks, any one or more of the following rights or remedies on behalf of
the Banks: (i) declare all unmatured Obligations to be immediately due and
payable in accordance with the terms of the Credit Agreement, and the same shall
thereupon be immediately due and payable, without presentment or other notice or
demand; (ii) exercise and enforce any or all rights and remedies available upon
default to the Banks under the Uniform Commercial Code as in effect from time to
time in the State of Wisconsin, including the right, upon thirty (30) days prior
written notice to Company by the Agent of its intent to sell the Collateral, to
offer and sell the Collateral privately to purchasers who will agree to take the
Collateral for investment and not with a view to distribution and who will agree
to the imposition of restrictive legends on the instruments representing the
Collateral, and the right to arrange for a sale which would otherwise qualify as
exempt from registration under the Securities Act of 1933; and (iii) upon thirty
(30) days prior written notice to Company
2
<PAGE>
by the Agent exercise or enforce any or all other rights or remedies available
to the Agent by law or agreement against the Collateral or against the Company
or any other person with respect to the Collateral.
6. Miscellaneous. Any disposition of the Collateral in the manner provided
in Paragraph 5 shall be deemed commercially reasonable. This Agreement can be
waived, modified, amended, terminated or discharged, and the Security Interest
can be released, only explicitly in a writing made in accordance with the Credit
Agreement. Any modification or amendment to this Agreement must be in writing
signed by the Company, the Agent, and the Required Banks. A waiver signed by the
Agent and the Required Banks shall be effective only in the specific instance
and for the specific purpose given. Mere delay or failure to act shall not
preclude the exercise or enforcement of any of the rights or remedies of the
Banks. All rights and remedies of the Banks shall be cumulative and may be
exercised singularly or concurrently, at the option of the Required Banks, and
the exercise or enforcement of any one such right or remedy shall neither be a
condition to nor bar the exercise or enforcement of any other. All notices
hereunder shall be deemed sufficiently given if delivered or mailed in
accordance with the applicable notice provisions of the Credit Agreement. The
Agent's duty of care with respect to Collateral in its possession (as imposed by
law) shall be deemed fulfilled if the Agent exercises reasonable care in
physically safekeeping such Collateral or, in the case of Collateral in the
custody or possession of a bailee or other third person, exercises reasonable
care in the selection of the bailee or other third person, and the Agent need
not otherwise preserve, protect, insure or care for any Collateral. The Agent
shall not be obligated to preserve any rights the Company may have against prior
parties, to exercise at all or in any particular manner any voting rights which
may be available with respect to any Collateral, to realize on the Collateral at
all or in any particular manner or order, or to apply any cash proceeds of
Collateral in any particular order of application. The Company will reimburse
the Agent for all expenses (including reasonable attorneys' fees and legal
expenses) incurred by the Agent in the protection, defense or enforcement of the
Security Interest, including expenses incurred in any litigation or bankruptcy
or insolvency proceedings. This Agreement shall be binding upon and inure to the
benefit of the Company and the Banks and their respective heirs,
representatives, successors and assigns and shall take effect when signed by the
Company and delivered to the Agent, and the Company waives notice of the Agent's
or the Banks' acceptance hereof. If any provision or application of this
Agreement is held unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect other provisions or applications which can be
given effect, and this Agreement shall be construed as if the unlawful or
unenforceable provision or application had never been contained herein or
prescribed hereby. All representations and warranties contained in this
Agreement shall survive the execution, delivery and performance of this
Agreement and the creation and payment of the Obligations. This Agreement shall
be governed by the internal laws (other than conflict laws) of the State of
Wisconsin. Each party consents to the personal jurisdiction of the state and
federal courts located in the Milwaukee, Wisconsin, in connection with any
controversy related to this Agreement.
3
<PAGE>
THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BASED ON OR PERTAINING TO THIS AGREEMENT.
NORTHLAND CRANBERRIES, INC.
By: /s/ John Swendrowski
------------------------------------
Chairman and Chief Executive Officer
4
EXECUTION COPY
THIRD AMENDMENT TO CREDIT AGREEMENT
AND LIMITED WAIVER
FIRSTAR BANK, N. A., as Agent
(formerly known as Firstar Bank Milwaukee, N. A.)
Milwaukee, Wisconsin
and The Financial Institutions Identified Herein
Ladies and Gentlemen:
The undersigned, NORTHLAND CRANBERRIES, INC., a Wisconsin corporation (the
"Company") hereby requests that the undersigned financial institutions (together
with their respective successors and assigns, collectively, the "Banks") agree
to further amend the Credit Agreement dated as of March 15, 1999, as amended as
of May 1, 1999 and December 29, 1999 (the "Credit Agreement"), among the
Company, certain of the Banks and Firstar Bank, N. A., as agent, and to waive
certain defaults, all on the terms and conditions set forth below. Capitalized
terms used herein and not defined shall have the meanings assigned thereto in
the Credit Agreement.
1. Amendment to Section 1.1. Section 1.1 of the Credit Agreement shall be
amended to read as follows:
Section 1.1. The Revolving Credit. Subject to all of the terms and
conditions hereof, each Bank, severally and for itself alone, agrees to
extend such Bank's Percentage of a revolving credit facility to the Company
which may be availed of by the Company in its discretion from time to time,
be repaid and used again, during the period from the date hereof to and
including the Revolving Credit Termination Date. The revolving credit
facility may be utilized by the Company in the form of (i) revolving credit
loans (individually a "Revolving Credit Loan" and collectively the
"Revolving Credit Loans") from the Banks according to their respective
Percentages, (ii) swing line loans (individually a "Swing Line Loan" and
collectively, the "Swing Line Loans") from the Swing Line Lender, pursuant
to Section 1.2 hereof, and (iii) L/Cs issued by the Issuer upon request of
the Company and in which each Bank shall have purchased a participation,
provided that the aggregate amount of the Revolving Credit Loans, Swing
Line Loans, Reimbursement Obligations and the maximum amount available to
be drawn under all L/Cs outstanding at any one time shall not exceed One
Hundred Fifty Five Million Dollars ($155,000,000), which amount shall be
reduced by Five Million Dollars ($5,000,000) on the last day of each of the
first and third fiscal quarters of the Company commencing with the fiscal
quarters ending November 30, 2000 and May 31, 2001 and continuing
thereafter until the Revolving Credit Termination Date (as so reduced at
any time, the "Revolving Credit Commitment"). All Revolving Credit Loans
shall be evidenced by Revolving Credit Notes of the Company (the "Revolving
Credit Notes") payable to the order of each of the Banks in the amounts of
their respective Percentages
<PAGE>
of the Revolving Credit Commitment (prior to giving any effect to any
reduction in the amount thereof), such Revolving Credit Notes to be in
substantially the form attached hereto as Exhibit 1.1. Without regard to
the face principal amounts of each of the Revolving Credit Notes, the
actual principal amount at any time outstanding and owing by the Company on
account thereof during the period ending on the Revolving Credit
Termination Date shall be the sum of all Revolving Credit Loans then or
theretofore made thereon less all principal payments actually received
thereon during such period.
2. Amendment to Section 3.3. Section 3.3 of the Credit Agreement shall be
amended to add the following sentence at the end of such Section:
In the event Cliffstar Corporation ("Cliffstar") shall at any time prepay
in the case of clause (a) or pay in the case of clause (b) (a "Cliffstar
Prepayment") all or any portion of (a) that certain Promissory Note dated
March 8, 2000 in the original principal amount of $28,000,000 payable by
Cliffstar to the Company (the "Cliffstar Note"), or (b) the "Earnout
Termination Payment" (as defined in that certain Asset Purchase Agreement
dated January 5, 2000 by and between Cliffstar and the Company, as amended
by that certain First Amendment to Asset Purchase Agreement dated as of
March 8, 2000 (as so amended, the "Asset Purchase Agreement")), in each
case other than in connection with regularly scheduled payments of
principal and/or interest, as the case may be, and in the case of clause
(a) regular payments of the "Earnout Amount" (as defined in the Asset
Purchase Agreement) that are applied against the principal due under the
Cliffstar Note, the Company shall, not later than 5:00 p.m. (Milwaukee
time) on the Business Day following a Cliffstar Prepayment, pay to the
Agent for the pro rata account of the Banks as and for a mandatory
prepayment on the Revolving Credit Notes, the amount of the Cliffstar
Prepayment.
3. Amendment to Section 3.4. Section 3.4 of the Credit Agreement shall be
amended to add the following sentence at the end of such Section:
In the event of any Cliffstar Prepayment, the Revolving Credit Commitment
shall be reduced, without any action by or notice on the part of the
Company, to the difference between (a) the Revolving Credit Commitment and
(b) the sum of the aggregate amount of any partial terminations of the
Revolving Credit Commitment pursuant to this Section prior to the date
hereof and the amount of the Cliffstar Prepayment.
4. Amendment to Section 7.4. Section 7.4 of the Credit Agreement shall be
amended to read as follows:
Section 7.4. Financial Reports. The Company will maintain a standard
and modern system of accounting in accordance with sound accounting
practice and will furnish with reasonable promptness to the Agent and its
duly authorized representatives such information respecting the business
and financial condition of the Company and its Subsidiaries as may be
reasonably requested and, without any request, will furnish to the Agent:
2
<PAGE>
(a) as soon as available, and in any event within thirty (30)
days after the close of each monthly fiscal period of the Company, an
unaudited, consolidated balance sheet and consolidated statements of
income of the Company as at the end of and for such month and for the
year-to-date period then ended, in reasonable detail and, in the case
of the quarterly financial statements, stating in comparative form the
figures for the corresponding date and periods in the previous fiscal
year, all prepared in accordance with general accepted accounting
principles, subject to year-end audit adjustments and the absence of
footnotes; and
(b) as soon as available, and in any event within forty five (45)
days after the close of each quarterly fiscal period of the Company, a
copy of the Quarterly Report on Form 10-Q filed with the Securities
and Exchange Commission (the "SEC"); and
(c) as soon as available, and in any event within ninety (90)
days after the close of each fiscal year, a copy of the audit report
for such year and accompanying consolidated financial statements,
including balance sheet, reconciliation of change in stockholders'
equity, profit and loss statement and statement of source and
application of funds for the Company and its Subsidiaries showing in
comparative form the figures for the previous fiscal year of the
Company, all in reasonable detail, prepared and certified by Deloitte
& Touche or other independent public accountants of nationally
recognized standing selected by the Company and reasonably acceptable
to the Agent; and
(d) each of the consolidated financial statements furnished to
the Agent pursuant to paragraphs (a), (b) and (c) above shall be
accompanied by a Compliance Certificate in the form of Exhibit 7.4
attached hereto signed by its Vice President-Finance; and
(e) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which
the Company shall have filed with the SEC or any governmental agency
substituted therefor, or any national securities exchange, including
copies of the Company's Annual Report on Form 10-K, including
financial statements audited by Deloitte & Touche or other independent
public accountants of nationally recognized standing selected by the
Company and reasonably acceptable to the Agent; and
(f) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all consolidated financial statements,
reports (including the Company's Annual Report to Shareholders) and
proxy statements so mailed; and
(g) as soon as available, and in any event within thirty (30)
days prior to the end of each fiscal year of the Company, a copy of
the Company's consolidated business plan and operating projections for
the following fiscal year,
3
<PAGE>
such plan to be in reasonable detail prepared by the Company and in
form reasonably satisfactory to the Agent.
5. Amendment to Section 7.6. Section 7.6 of the Credit Agreement shall be
amended to read as follows:
Section 7.6 Consolidation and Merger. Neither the Company nor any
Subsidiary will consolidate with or merge into or sell all or substantially
all of their respective assets to any Person, without the prior written
consent of the Banks.
6. Amendment to Section 7.8. Section 7.8 of the Credit Agreement shall be
amended to read as follows:
Section 7.8. Minimum Tangible Net Worth. The Company will continuously
maintain Tangible Net Worth (i) as of March 31, 2000 and through August 30,
2000 of not less than One Hundred Twenty Million Dollars ($120,000,000),
and (ii) as of August 31, 2000 and thereafter of not less than One Hundred
Twenty Five Million Dollars ($125,000,000).
7. Amendment to Section 7.9. Section 7.9 of the Credit Agreement shall be
amended to read as follows:
Section 7.9. Fixed Charge Coverage Ratio. The Company will not, as of
the last day of each fiscal quarter during the term hereof, permit its
Fixed Charge Coverage Ratio to be less than the following ratios:
Minimum Fixed Charge
--------------------
Period Coverage Ratio
------ --------------
April 1, 2000 to August 31, 2000 1.25 : 1.0
September 1, 2000 to February 27, 2001 1.50 : 1.0
February 28, 2001 and thereafter 1.75 : 1.0
8. Amendment to Section 7.10. Section 7.10 of the Credit Agreement shall be
amended to read as follows:
Section 7.10. Funded Debt to Capitalization. The Company will not, as
of the last day of each fiscal quarter during the term hereof, permit the
ratio of its (i) Funded Debt to (ii) the sum of Funded Debt plus Net Worth,
to exceed the following:
Maximum Funded Debt to
Period Capitalization Ratio
------ --------------------
April 1, 2000 to August 31, 2000 .55 : 1.0
September 1, 2000 and thereafter .50 : 1.0
4
<PAGE>
9. Amendment to Section 8.1. Section 8.1 of the Credit Agreement shall be
amended by deleting the word "or" at the end of subsection (g) and the period at
the end of subsection (h) and inserting in lieu thereof "; or" and adding the
following subsection (i):
(i) There shall occur a "Change in Control" with respect to the
Company. For this purpose, a "Change in Control" means any one of the
following:
(A) Any person or group of persons (as defined in Rule
13d-5 under the Securities Exchange Act of 1934),
together with its affiliates become the beneficial
owner, directly or indirectly, of more than 50% of the
then outstanding Common Stock of the Company or more
than 50% of the then outstanding securities of the
Company entitled generally to vote for the election of
directors ("Voting Securities");
(B) The Company merges with or into any Person, or any
Person merges with or into the Company in a transaction
in which the outstanding Voting Securities are
converted into or exchanged for cash, securities or
other property other than a transaction where the
Voting Securities outstanding immediately prior to such
transaction are converted into or exchanged for voting
stock of the surviving or transferee Person and such
voting stock constitutes a majority of the outstanding
shares of voting stock of such surviving or transferee
Person (immediately after giving effect to such
issuance); or
(C) All or substantially all of the assets of the Company
and its Subsidiaries, on a consolidated basis, are sold
or disposed of.
10. Amendment to Section 8.2. The first clause of Section 8.2 shall be
amended to read as follows:
When any Event of Default, other than an Event of Default described in
subsections (g), (h) or (i) of Section 8.1 hereof, has occurred and is
continuing, the Agent upon instruction of the Required Banks shall, by
notice to the Company, take either or both of the following actions:...
11. Amendment to Section 8.3. The first clause of Section 8.3 shall be
amended to read as follows:
When any Event of Default described in subsections 8.1(g), 8.1.(h) or
8.1(i) has occurred and is continuing,...
5
<PAGE>
12. Amendment to Section 9. Section 9 of the Credit Agreement shall be
amended by amending the definition of "Net Income" to read as follows:
"Net Income" shall mean consolidated net income determined in
accordance with generally accepted accounting principles, consistently
applied; provided, however, that for purposes of Section 7.9 of this
Agreement, Net Income will be calculated without giving effect to the
Company's February 29, 2000 $30,000,000 pre-tax extraordinary charge.
13. Defaults and Limited Waiver. The Company hereby acknowledges and agrees
that prior to giving any effect to the amendments to the Credit Agreement
contained herein, certain Events of Default have occurred under the Credit
Agreement on account of the Borrower's failure to comply with the provisions of
Sections 7.8, 7.9 and 7.10 for the fiscal period ending February 29, 2000. Upon
the effectiveness of this Amendment in accordance with Paragraph 13, below, the
Banks agree to waive the Events of Default described above as of February 29,
2000. This waiver shall not apply to any other Events of Default under the
Credit Agreement whether now existing or occurring after the date hereof.
14. Consent to Sale of Private Label Juice Business. Pursuant to Paragraph
8 of the Second Amendment to Credit Agreement and Consent dated as of December
29, 1999, the Banks consented to the sale of the Company's "private label" juice
business substantially on the terms outlined on Exhibit A to that Amendment.
Subsequent to the date of such Amendment, and in the process of finalizing the
terms of the sale, certain terms outlined in such Exhibit A were changed and the
sale was consummated on the terms set forth on Exhibit A hereto. The Company has
delivered the original Cliffstar Note to the Agent and concurrently with the
execution hereof will enter into a Collateral Pledge Agreement in favor of the
Agent with respect to the Cliffstar Note. The definition of "Loan Documents" in
the Credit Agreement shall be amended to include the Collateral Pledge Agreement
as one of the Loan Documents. Subject to the terms and conditions of this
Amendment the undersigned Banks hereby ratify and confirm their consent to the
sale by the Company of those assets comprising the Company's private label juice
business on the revised terms.
15. Field Exam. The Banks hereby reserve the right to require the Agent, on
their behalf, to conduct a field exam of the Company and the Company hereby
acknowledges such reservation and agrees to cooperate with the Agent in its
conduct of such an exam. The Company further agrees that such an exam would be
at the expense of the Company.
16. Fees.
(a) Amendment and Waiver Fee. In consideration of the Banks entering
into this Amendment and providing the waivers set forth herein, the Company
shall pay to the Agent for the pro rata account of the Banks a fully
earned, non-refundable fee in the amount of Three Hundred Eighty Seven
Thousand Five Hundred Dollars ($387,500), which fee shall be payable upon
execution of this Amendment.
6
<PAGE>
(b) Change of Control Fee. In the event of a sale of substantially all
of the assets of the Company or a majority of the outstanding stock of the
Company in one transaction or a series of related transactions, the Company
agrees to pay to the Agent, for the pro-rata account of the Banks a fully
non-refundable fee in an amount equal to three fourths percent (.75%) of
the Revolving Credit Commitment. The provision in this Amendment for
payment of such fees shall not constitute consent to such an action where
required pursuant to the Credit Agreement.
17. Effectiveness. This Amendment shall become effective as of April 13,
2000 upon the Agent's receipt of a copy of this Amendment duly executed by the
Company and the Banks, together with the following:
(a) a Collateral Pledge Agreement executed by the Company with respect
to the Note to the Company from the Buyer of its private label juice
business;
(b) a certificate of the Secretary of the Company as to the continued
effectiveness, without amendment, of the Articles of Incorporation and
Bylaws of the Company delivered to the Agent on March 14, 1999, the
signatures of officers of the Company authorized to execute this Amendment
and the attached resolutions authorizing the transactions contemplated by
this Amendment; and
(c) Payment of the amendment and waiver fee described in Paragraph
16(a), above.
18. Representations and Warranties of the Company. In order to induce the
Banks to enter into this Amendment and in recognition of the fact that the Banks
are acting in reliance thereupon, the Company represents and warrants to the
Banks as follows:
(a) The Company has the corporate power and authority to enter into,
deliver and issue this Amendment and to continue to borrow under the Credit
Agreement, as amended hereby. Each of the Credit Agreement, as amended
hereby, and this Amendment when duly executed on behalf of the Company,
constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms; and
(b) The execution and delivery of this Amendment and the prospective
borrowing and performance by the Company of its obligations under the
Credit Agreement, as amended hereby, have been authorized by all necessary
action on the part of the Company; and
(c) The representations and warranties of the Company contained in the
Credit Agreement, as amended hereby, are true and correct in all material
respects as of the date of this Amendment as though made on and as of the
date of this Amendment; and
(d) Except as provided in Paragraph 13, above, as of the date of this
Amendment no Event of Default, or default which with the passage of time
would
7
<PAGE>
constitute an Event of Default under the Credit Agreement, has occurred and
is continuing; and
(e) The Company is liable, without offset, counterclaim or other
defense, for all obligations of the Company to the Banks; and
(f) No information, financial statement, exhibit or report furnished
by the Company to the Agent in connection with the negotiation of, or
pursuant to, this Amendment, contains any material misstatement of fact, or
omits to state a material fact, or omits any fact necessary to make the
statements contained therein, in light of the circumstances in which they
were made, not misleading as of the date when made.
19. Counterparts. This Amendment may be executed in any number of
counterparts, and by different parties hereto on separate counterparts, and all
such counterparts taken together shall be deemed to constitute one and the same
instrument.
20. Miscellaneous.
(a) Each reference in the Credit Agreement to "this Agreement" shall
be deemed a reference to the Credit Agreement as amended by this Amendment.
(b) In accordance with Section 10.4 of the Credit Agreement, the
Company shall pay or reimburse the Agent for all of its expenses, including
reasonable attorneys' fees and expenses, incurred in connection with this
Amendment, for the preparation, examination and approval of documents in
connection herewith, the preparation hereof and expenses incurred in
connection herewith.
(c) This Amendment is being delivered and is intended to be performed
in the State of Wisconsin and shall be construed and enforced in accordance
with the laws of that state without regard for the principals of conflicts
of laws.
(d) Except as expressly modified or amended herein, the Credit
Agreement shall continue in effect and shall continue to bind the parties
hereto. This Amendment is limited to the terms and conditions hereof and
shall not constitute a modification, acceptance or waiver of any other
provision of the Credit Agreement.
[Signatures on next page]
8
<PAGE>
If this Third Amendment to Credit Agreement and Limited Waiver is
satisfactory to you, please sign the form of acceptance below. Dated and
effective as of the 13th day of April, 2000.
Very truly yours,
NORTHLAND CRANBERRIES, INC.
By: /s/ John Swendrowski
------------------------------------
Chairman and Chief Executive Officer
Accepted and agreed to as of the day and year last above written.
FIRSTAR BANK, N. A.
By: /s/ Randy D. Olver
-----------------------------------
Address:
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Randy D. Olver, Senior Vice
President
NORWEST BANK MINNESOTA, N. A.
By:____________________________________
Its:___________________________________
Address:
Sixth Street and Marquette Avenue
MAC N9305-114
Minneapolis, Minnesota 55479
Attention: Kenneth E. LaChance,
Assistant Vice President
9
<PAGE>
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Michael Fordney
-----------------------------------
Address:
201 West Wisconsin Avenue
Milwaukee, Wisconsin 53259-0911
Attention: Michael Fordney, Senior
Vice President
BANK OF AMERICA, NATIONAL
ASSOCIATION
By: /s/ Edward L. Cooper III
-----------------------------------
Address:
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Edward L. Cooper III, Senior
Vice President
ST. FRANCIS BANK, F.S.B.
By: /s/ John Tans
-----------------------------------
Address:
13400 Bishops Lane, Suite 190
Brookfield, Wisconsin 53005-6203
Attention: John Tans, Vice President/
Commercial Banking
10
<PAGE>
M&I MARSHALL & ILSLEY BANK
By: /s/
-----------------------------------
and
By: /s/ Robert A. Nielsen
-----------------------------------
Address:
770 North Water Street
Milwaukee, Wisconsin 53202
Attention: Dennis D. Finnigan, Vice
President
FLEET CAPITAL CORPORATION
By: /s/ Edward M. Bartkowski
-----------------------------------
Address:
20800 Swenson Drive, Suite 350
Post Office Box 1641
Waukesha, Wisconsin 53187
Attention: Edward M. Bartkowski, Vice
President
BANK ONE, NA
By: /s/ Anthony F. Maggiore
-----------------------------------
Address:
111 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Anthony F. Maggiore,
Managing Director
11
<PAGE>
LaSALLE BANK NATIONAL ASSOCIATION
By: /s/ James A. Meyer
-----------------------------------
Address:
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: James A. Meyer, First Vice
President
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF NORTHLAND CRANBERRIES, INC.
AS OF AND FOR THE SIX MONTHS ENDED FEBRUARY 29, 2000 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-2000
<PERIOD-START> SEP-01-1999
<PERIOD-END> FEB-29-2000
<CASH> 62
<SECURITIES> 0
<RECEIVABLES> 29,501
<ALLOWANCES> (729)
<INVENTORY> 107,150
<CURRENT-ASSETS> 144,681
<PP&E> 212,276
<DEPRECIATION> (42,137)
<TOTAL-ASSETS> 357,656
<CURRENT-LIABILITIES> (48,734)
<BONDS> (170,495)
0
0
<COMMON> (203)
<OTHER-SE> (138,224)
<TOTAL-LIABILITY-AND-EQUITY> (357,656)
<SALES> 143,588
<TOTAL-REVENUES> 143,588
<CGS> 124,596
<TOTAL-COSTS> 46,547
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,403
<INCOME-PRETAX> (33,958)
<INCOME-TAX> (13,244)
<INCOME-CONTINUING> (20,714)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,714)
<EPS-BASIC> (1.02)
<EPS-DILUTED> (1.02)
</TABLE>
