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 April 30, 1995.
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _____ to _____.
Commission File Number: 0-16787
INTERNATIONAL YOGURT COMPANY
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Oregon 91-0989395
- ------------------------------ --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5858 N.E. 87th Avenue
Portland, Oregon 97220
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(Address of Principal (Zip Code)
Executive Office)
(503) 256-3754
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(Registrant's telephone number, including area code.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and 92) has
been subject to such filing requirements for the past 90 days.
YES X NO
--------- ---------
The number of shares outstanding of the registrant's common stock,
as of the latest practicable date is:
Class: Common stock outstanding at
June 7, 1995: 2,167,043 shares
INTERNATIONAL YOGURT COMPANY
CONTENTS
Page
PART I FINANCIAL INFORMATION:
Item 1. Financial Statements 3 - 6
Balance Sheets as of April 30, 1995, 3
(unaudited) and October 31, 1994
Statement of Operations for the 4
Three Months and Six Months ended
April 30, 1995 (unaudited) and
1994(unaudited)
Statements of Cash Flows for the 5
Three Months and Six Months ended
April 30,1995 (unaudited)and
1994(unaudited)
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of 7 - 8
Financial Condition and Results of
Operations
PART II OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults upon Senior Securities 9
Item 4. Submission of Matters to a Vote of 9
Security Holders
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 10
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statement
INTERNATIONAL YOGURT COMPANY
BALANCE SHEET
ASSETS April 30, October 31,
1995 1994
(unaudited)
Current assets:
Cash and cash equivalents $ 206,441 $ 336,894
Accounts receivable, net 851,068 908,303
Inventories 1,420,811 1,434,334
Equipment held for resale 37,030 45,840
Other current assets 245,162 198,704
---------- ---------
Total current assets 2,760,512 2,924,075
=========== ==========
Plant and equipment, net 1,780,212 1,810,475
Intangible assets 188,340 218,637
---------- ------------
$ 4,729,064 $ 4,953,187
============ =============
LIABILITIES
Current liabilities:
Note payable to bank $ 1,002,242 $ 1,146,537
Current portion of long term debt 74,283 84,149
Current portion capital leases 62,205 58,835
Accounts payable 939,292 934,039
Other accrued liabilities 96,447 119,730
---------- ----------
Total Current Liabilities 2,174,469 2,343,290
============ ==========
Long term notes and contracts
payable 173,819 187,900
Long term capital lease 94,599 106,922
----------- ---------
Total liabilities 2,442,887 2,638,112
========= ==========
SHAREHOLDERS' EQUITY
Common stock, no par value,
30,000,000 shares authorized;
2,167,043 shares issued and
outstanding at April 30, 1995
and October 31, 1993 4,538,014 4,538,014
Accumulated deficit (2,251,837) (2,222,939)
------------ -----------
Net Shareholder's equity 2,286,177 2,315,075
---------- ---------
$ 4,729,064 $ 4,953,187
=========== ===========
The accompanying notes are an
integral part of this statement
INTERNATIONAL YOGURT COMPANY
STATEMENT OF OPERATIONS
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
April 30, April 30,
1995 1994 1995 1994
Yogurt sales $ 1,712,740 $ 1,677,309 $ 3,225,475 $ 3,085,926
----------- ----------- ----------- -----------
Cost of yogurt sales:
Manufacturing 880,651 839,049 1,694,180 1,509,728
Transportation and
warehousing 275,613 240,834 569,060 488,893
---------- --------- --------- ---------
1,156,264 1,079,883 2,263,240 1,995,621
---------- --------- ---------- ---------
Gross profit 556,476 597,426 962,235 1,087,305
Selling and marketing
expenses 188,022 201,629 420,623 440,818
General and
administrative expense 292,410 261,058 507,246 529,062
---------- ---------- --------- ----------
Income from operations $ 76,044 $ 134,739 $ 34,366 $ 117,425
========= ========== ======== =======
Other income (expenses):
Interest income 2,005 1,583 4,383 3,496
Interest expense (31,834) (19,402) (67,648) (48,126)
--------- -------- -------- --------
(29,829) (17,819) (63,265) (44,630)
Net Income (Loss) $ 46,215 $ 116,920 $ (28,899) $ 72,795
========== ========== ========== ========
Net Income (Loss)
per share $ .02 $ .05 $ (.01) $ .04
========== =========== ========= ==========
Weighted average number
of shares outstanding 2,167,043 2,112,663 2,167,043 2,112,663
========= ========= ========= ==========
The accompanying notes are an integral
part of the financial statements
INTERNATIONAL YOGURT COMPANY
STATEMENT OF CASH FLOWS
(Unaudited)
FOR THE SIX MONTHS ENDED
Apr. 30, 1995 Apr. 30, 1994
Cash flows from operating activities:
Net income (loss) $ (28,899) $ 72,795
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 130,120 125,570
Changes in current assets and liabilities, net 32,085 (469,588)
------- ---------
Cash provided(used) by operating activities 133,306 (271,223)
------- ---------
Cash flows from investing activities:
Additions to plant and equipment (86,563) (232,387)
-------- -----------
Cash flows from financing activities:
Payments on long-term notes, debt &
capital leases (177,196) 122,979
Stock options exercised 0 263,886
-------- ---------
Net cash provided (used) in financing activities (177,196) 386,975
---------- ---------
Net increase (decrease) in cash (130,454) (116,635)
Cash and cash equivalents, beginning of period 336,894 291,458
--------- --------
Cash and cash equivalents, end of period $ 206,441 $ 174,823
========== ==========
The accompanying notes are an
integral part of the financial statements
INTERNATIONAL YOGURT COMPANY
NOTES TO FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments, which consist of normal recurring accruals, considered necessary
for a fair presentation have been included. Operating results for the three
months ended April 30, 1995 are not necessarily indicative of the results
that may be expected for the year ending October 31, 1995. For further
information, refer to the financial statements, and footnotes thereto,
included in the Corporation's annual report on Form 10-K for the year ended
October 31, 1994.
Note B - Inventories
Inventories consist of: April 30, October 31,
1995 1994
Finished Goods $ 954,695 $ 1,037,977
Raw Materials 195,303 150,339
Packaging Materials & Supplies 270,813 246,018
--------- ----------
$ 1,420,811 $ 1,434,334
Note C - Dividends
None.
Note D - Earnings per share
Earnings per share are based on the number of shares of common stock
outstanding during the period presented.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations.
The Company's revenues from yogurt sales were $1,712,740 and
3,225,475 for the tree monthes and six months ended April 30, 1995, an increase
of 2.1% and 4.5%, respectively, compared to the Company's revenues during the
same periods in 1994 which were $1,677,309 and $3,085,926, respectively.
The sales growth is primarily the result of increased sales from copacking
and private label business, and the Company's re-entry into the retail
grocery sector with the Western Family / Yo Cream co-branded hard pack
products. Mangement is executing an agressive plan for continued growth and
expects significant sales increases for the remaining fiscal reporting periods.
Cost of yogurt sales were $1,156,264 and $2,263,240 for the three months
and six months ended April 30, 1995 compared to $1,079,884 and $1,995,622
for the same periods in 1994. The Company's gross margin on yogurt sales
decreased to 32.5% and 29.8% respectively during the three months and six
months ended April 30, 1995, compared to 35.6% and 35.2% respectively for
the previous year. This was the result of cost increases that were incurred
for raw materials, transportation and warehousing. Furthermore, average selling
prices were lower due to competitive contract pricing for certain national
accounts. As a result of the above, net income during the three months ended
April 30, 1995 was $46,215 compared to net income of $116,920 during the same
period in 1994, a decrease of 60.5%. A net loss of $28,899 was incurred for
the six months ended April 30, 1995 compared to net income of $72,795 at April
30, 1994. Management believes, however, that the prospetive economies of scale
from the national account business obtained will compensate for the reduced
margins in the near future.
Selling and marketing expenses were $188,022 and $420,623 for the three
months and six months ended April 30, 1995 compared to $201,629 and $440,818
for the same periods in 1994, a decrease of 6.7% and 4.6% respectively. This
improvement is the result of copacking, which does not entail the marketing
support required by direct sales. Furthermore, in cooperation with Norpac,
the Company's sales agent for the domestic food service sector, commissions
on sales have been reduced in recognition of the reduced margins resulting
from contracted national account business.
General and administrative expenses were $292,410 and $507,246 for the
three months and six months ended April 30, 1995 compared to $261,058 and
$529,062 for the same periods in 1994, representing an increase of 12.0% for
the three months and a 4.1% decrease for the six months. The variances are
primarily due to timing differences in the realization of expenses and
non-recurring payroll taxes resulting from the excersize of employee stock
options in the first quarter of 1994.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations, continued
Liquidity and Capital Resources.
The Company has financed its operations and expansion from bank loans,
capital leases, capital investment by its founders, private and public
securities offerings and internally generated funds. As of April 30, 1995,
the Company's total borrowings under its bank line of credit were $1,002,242
at an interest rate of .75 percent over that bank's prime rate. Total
borrowings under this line were payable upon demand and limited to 70 percent
of eligible accounts receivable and 50 percent of eligible inventory up to
an aggregate maximum of $1,500,000. As of April 30, 1995, the maximum amount
available under the terms of the line credit was $1,079,510. On October 31,
1994 total borrowings were $1,146,537.
Accounts receivable at April 30, 1995 were $851,068 a 6.3% decrease over
the accounts receivable of $908,303 at October 31, 1994. Management
considers the small difference to be in the normal course of business.
Inventory decreased to $1,420,811 at April 30, 1995 from $1,434,334 at
October 31, 1994, despite increased sales. This decrease is primarily due to
managements efforts to reduce consigned and warehoused finished goods in the
face of rising freight and warehousing costs.
The Company believes its existing assets, bank lines, and revenues from
operations will be sufficient to fund the Company's operatons for at least
the next 12 months. The Company's bank lines extend to September 30, 1995.
The Company exects its bank lines to be renewed or replaced. In the event
that the Company's bank lines were not renewed or replaced, the Compnay would
need to curtail operations substantially, seek additional capital, or both.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not involved in any material pending legal
proceedings, other than non-material legal proceedings occurring in
the ordinary course ofbusiness.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its 1995 Annual Meeting of Shareholders on
March 29, 1995. At that meeting of shareholders 2,167,043 shares of common
stock were entitled to notice of and to vote at that meeting or any
adjournment jor adjourments thereof. Of that number, 1,895,567 share were
present in person or represented by proxy.
John N. Hanna, David J. Hanna, James S. Hanna, William J. Rush,
Arthur P. Christiansen, Lawrence S. Black, Charles E. Carlbom and
Carl G. Behnke were nomiatied for election as directors and were elected to
hold office for the ensuing year and until the next annual meeting of
shareholders or until their successors are duly elected and qualified.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
SIGNATURERS
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Registrant:
INTERNATIONAL YOGURT COMPANY
Date: June 9, 1995
By: John N. Hanna
-------------------------------------------
John N. Hanna, Chairman of the Board and
Chief Executive Officer
Date: June 9, 1995
By: Roger H.Olson
----------------------------------------
R. H. Olson
Controller
(Principal Financial Officer)
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