UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Date of Report
(Date of earliest
event reported): March 7, 2000
Northland Cranberries, Inc.
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(Exact name of registrant as specified in its charter)
Wisconsin 0-16130 39-1583759
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
800 First Avenue South, P.O. Box 8020
Wisconsin Rapids, Wisconsin 54495-8020
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(Address of principal executive offices including zip code)
(715) 424-4444
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(Registrant's telephone number)
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Item 5. Other Events.
On March 7, 2000, Northland Cranberries, Inc. (the "Company")
announced (i) that it has retained investment bankers to help explore strategic
alternatives; (ii) an $18 million one-time after-tax inventory and receivables
charge; and (iii) expected reduced earnings per share from operations for its
fiscal second quarter. Certain information regarding the foregoing is contained
in a press release, dated March 7, 2000, which is attached hereto as an exhibit
and incorporated herein by reference.
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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.
NORTHLAND CRANBERRIES, INC.
Date: March 8, 2000 By: /s/ John Swendrowski
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John Swendrowski
Chairman and Chief Executive Officer
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NORTHLAND CRANBERRIES, INC.
EXHIBIT INDEX TO FORM 8-K
Report Dated March 7, 2000
Exhibit No. Description
(99) Press Release, dated March 7, 2000.
FOR MORE INFORMATION CONTACT
John Swendrowski, CHMN & CEO
Northland Cranberries, Inc.
800 First Avenue South
P.O. Box 8020
Wisconsin Rapids, WI 54495-8020
(715) 424-4444
www.northlandcran.com
NEWS RELEASE
FOR IMMEDIATE RELEASE (March 7, 2000)
NORTHLAND CRANBERRIES RETAINS INVESTMENT BANKERS TO HELP EXPLORE STRATEGIC
ALTERNATIVES; ANNOUNCES $18.0 MILLION ONE-TIME, AFTER-TAX INVENTORY AND
RECEIVABLES CHARGE; EXPECTS REDUCED EARNINGS FROM OPERATIONS FOR FISCAL SECOND
QUARTER
Wisconsin Rapids, WI -- Northland Cranberries, Inc. (Nasdaq: CBRYA),
manufacturer and marketer of Northland brand 100% juice cranberry blends and
Seneca brand fruit beverages, announced that it has retained two prominent
investment banking firms, Deutsche Banc Alex Brown and U.S. Bancorp Piper
Jaffray, Inc., to assist it in exploring various potential strategic
alternatives to facilitate the long-term growth of its branded juice business
and increase shareholder value. It is expected that these potential alternatives
will include, among other possibilities, a potential strategic alliance with, or
the potential sale of all or a portion of Northland to, a major food or beverage
industry company or other partner.
Northland also announced that it will record a one-time, after-tax
charge of approximately $18.0 million, or approximately $0.89 on a fully diluted
per share basis, in its fiscal second quarter ended February 29, 2000. The
charge is comprised of an estimated $16.2 million after-tax, non-cash write-down
of its cranberry inventory value to prevailing market levels and an estimated
$1.8 million after-tax write-off of certain uncollectible trade receivables. The
charges will not result in a restatement of Northland's first or second quarter
operating results and will be effective from and after the end of Northland's
second fiscal quarter.
Additionally, although its results for its second quarter are still
very preliminary and are subject to change and finalization, Northland announced
that it expects to report lower than anticipated earnings per share for its
second fiscal quarter. Before the estimated $0.89 per share charge described
above, Northland believes it might report an after-tax loss for its second
fiscal quarter of as much as approximately $1.8 million, or as much as
approximately $0.09 per fully diluted share. Northland said that its quarterly
results were adversely impacted by the ongoing unusually heavy promotional
activities of its major competitor, Ocean Spray, expenses associated with
Northland's national introduction of its new easy grip bottle and other
increased expenses and materials costs. Northland stressed that these estimated
quarterly results are very preliminary and are subject to change and
finalization.
<PAGE>
In discussing Northland's retention of investment bankers to explore
potential strategic alternatives, John Swendrowski, Chairman and Chief Executive
Officer of Northland, said "Our Board of Directors believes that it is time to
more aggressively pursue potential actions that could accelerate the growth
potential of our branded juice business and, as a result, increase the value of
the company for our shareholders. Given the current oversupply condition in the
cranberry marketplace and the prospect that Ocean Spray will continue its
unusually heavy promotional activity in its ongoing efforts to recapture market
share lost to Northland and others, our Board and management decided that there
exists an opportunity to take some bold actions now to more effectively combat
these circumstances."
"We believe that the addition to our team of two highly respected
investment banking firms will help us explore the availability of a potential
strategic alliance or other business combination with a well capitalized partner
in the food or beverage or similar industry that will both allow our
shareholders to realize increased value and provide our company with
significantly more capital and marketing resources to go after our competition
with even more strength," said Swendrowski.
Swendrowski said that Northland's inventory charge was made necessary
under generally accepted accounting principles as a result of 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 combined
with Northland's historical fixed price cranberry crop purchase contracts with
other growers that locked in these higher prices to growers who delivered their
cranberries to Northland. Swendrowski explained that the prospects for any
future similar inventory writedowns should be minimized because Northland has
now revised its cranberry crop purchase agreements so that its cranberry crop
purchase pricing now adjusts to correspond with then current cranberry market
prices.
"We believe that our inventory write-down, while required by the
accounting rules, will greatly help us become even more competitive with Ocean
Spray's ongoing heavy product price discounting and allow us to increase our
gross margins and achieve more acceptable levels of profitability," said
Swendrowski.
"Additionally, the reduction of our inventory carrying costs should
help to further position our entire company to remain focused on protecting,
building and enhancing our Northland and Seneca cranberry brands," said
Swendrowski.
Northland does not intend to update the information contained herein
with respect to Northland's exploration of potential strategic alternatives for
any future developments or circumstances unless and until there is a definitive
transaction agreement entered into between Northland and any third party or
until its exploration of potential alternatives is definitely terminated. There
can be no assurance whatsoever that any transaction between Northland and any
third party will take place or, even if one does occur, about the nature and
extent of any terms and conditions of any such potential transaction.
Northland manufactures and markets Northland brand 100% juice
cranberry blend products and other juice products under the Seneca, TreeSweet
and Awake! brand names,
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which are sold nationwide through major retail grocery chains, wholesale
grocers, convenience stores and mass merchandisers. The Company also produces
cranberry products and other fruit juice products for the foodservice and
ingredients industries. Northland also produces and markets the Northland brand
of fresh cranberries to produce distributors and retailers throughout the United
States, Canada and selected European markets.
Northland is the largest grower of cranberries in the world, with 25
growing properties owned or operated in Wisconsin and Massachusetts. It is the
only publicly-owned, regularly-traded cranberry company in the United States,
with shares traded on the Nasdaq Stock Market under the listing symbol CBRYA.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this release are "forward-looking
statements," including statements about the Company's future plans, goals and
other events which have not yet occurred. These statements are intended to
qualify for the safe harbors from liability provided by the Private Securities
Litigation Reform Act of 1995. They can generally be identified because the
context of such statements will include words such as "believes," "anticipates,"
"expects" or words of similar import. These forward-looking statements also
include statements regarding the possible results of the Company's exploration
of strategic alternatives, including potential transactions arising from that
process. 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 the
Company's branded juice products; (ii) strategic actions of Northland's
competitors in pricing, marketing and advertising; and (iii) agricultural
factors affecting Northland's crop. These statements are based only on
management's knowledge and expectations on the date of this release. The Company
will not necessarily update these statements or other information in this
release based on future events or circumstances.
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