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 January 31, 1996.
[ ] 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
(Address of Principal (Zip Code)
Executive Office)
(503) 256-3754
(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 (2) 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
January 31, 1996: 2,188,043 shares
<PAGE>
INTERNATIONAL YOGURT COMPANY
CONTENTS
Page
PART I FINANCIAL INFORMATION:
Item 1. Financial Statements 3 - 6
Balance Sheet as of January 31, 1996, 3
(unaudited) and October 31, 1995
Statements of Operations for the 4
Three Months ended January 31, 1996
(unaudited) and 1995 (unaudited)
Statements of Cash Flows for the 5
Three Months ended January 31,1996
(unaudited) and 1995 (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
SIGNATURES 10
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
INTERNATIONAL YOGURT COMPANY
BALANCE SHEET
January 31, October 31,
1996 1995
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 239,842 $ 318,535
Accounts receivable 650,683 873,191
Inventories 1,496,408 1,554,625
Equipment held for resale, net 23,815 28,220
Other current assets 120,220 102,012
Total current assets 2,530,968 2,876,583
Plant and equipment 1,801,195 1,839,860
Deferred tax asset 125,000 125,000
Intangible and other assets 192,771 195,273
$4,649,934 $5,036,716
LIABILITIES
Current liabilities:
Note payable to bank $ 1,051,024 $ 1,089,920
Current portion of long-term debt 69,058 68,879
Current portion capital lease 31,421 30,715
Accounts payable 535,061 813,309
Other accrued liabilities 128,257 75,952
Total current liabilities 1,814,821 2,078,775
Notes and contracts payable,
portion due after one year 127,052 144,385
Long term obligations under
capital lease 126,439 134,113
Total liabilities $ 2,068,312 $ 2,357,273
SHAREHOLDERS' EQUITY
Common stock, nor par value,
30,000,000 shares authorized;
2,188,043 and 2,192,043 shares
issued and outstanding 4,589,279 4,597,498
Accumulated deficit (2,007,657) (1,918,055)
2,581,622 2,679,443
Total liabilities and
stockholder's equity $ 4,649,934 $5,036,716
The accompanying notes are an integral part
of the financial statements.<PAGE>
INTERNATIONAL YOGURT COMPANY
STATEMENTS OF OPERATIONS
(unaudited)
THREE MONTHS ENDED
January 31,
1996 1995
Yogurt sales $1,423,621 $1,512,735
Costs of yogurt sales:
Manufacturing 754,679 813,529
Transportation and
warehousing 252,149 293,447
1,006,828 1,106,976
Gross Profit 416,793 405,759
Selling and marketing
expenses 253,783 232,601
General and administrative
expenses 224,982 214,836
Loss from operations $(61,972) $ (41,678)
Other income (expenses):
Interest income 3,298 2,378
Interest expense (30,928) (35,814)
(27,630) (33,436)
Net Loss $ (89,602) $ (75,114)
Net Loss per share $ (.04) $ (.03)
Weighted average number of shares
outstanding 2,191,374 2,167,043
The accompanying notes are an integral part
of the financial statements.
<PAGE>
INTERNATIONAL YOGURT COMPANY
STATEMENT OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED
Cash flows from operating activities: January 31, 1996 January 31,1995
Net Income (loss) $ (89,602) $ (75,114)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 60,809 62,397
Changes in current assets and liabilities, net 40,979 180,860
Net cash provided by (used for)
operating activities 12,186 168,143
Cash flows from investing activities:
Additions to plant and equipment (19,641) (29,122)
Proceeds from sale of equipment 0 0
Net cash provided by (used for)
investing activities (19,641) (29,122)
Cash flows from financing activities:
Net increase (decrease) in line of credit (38,896) (238,654)
Net proceeds from insurance/(payments) of
long term notes, debt, & capital leases, net (24,123) (31,203)
Payments for treasury stock purchases (8,219) 0
Net cash provided by (used for)
financing activities (71,238) (269,857)
Net Increase (Decrease) in cash (78,693) (130,836)
Cash and equivalents, beginning of period 318,535 336,894
Cash and equivalents, end of period $ 239,842 $ 206,058
The accompanying notes are an
integral part of the financial statement.<PAGE>
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 January 31, 1996 are not necessarily indicative
of the results that may be expected for the year ending October 31, 1996.
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, 1995.
Note B - Inventories
Inventories consist of January 31, October 31,
1996 1995
Finished Goods $1,159,427 $ 1,169,073
Raw Materials 114,181 149,823
Packaging Materials & Supplies 222,800 235,729
$ 1,496,408 $ 1,554,625
Note C - Dividends
None.
Note D - Earnings per share
Earnings per share are based on the weighted average number of shares of
common stock outstanding during the period presented.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations.
The Company's revenues from yogurt sales decreased 5.9% to $1,423,621 for
the three month period ending January 31, 1996 from $1,512,735 for the same
period ending January 31, 1995. This decrease was primarily due to
unusually severe weather conditions experienced throughout most of the
United States resulting in a temporary decrease in demand for frozen yogurt
products.
Cost of yogurt sales during the first quarter of 1996 was $1,006,828
compared to $1,106,976 during the same period in 1995. The company's gross
margin on yogurt sales increased to 29.2% during the three months ended
January 31, 1996 compared to 26.8% for the first quarter of 1995.
The improvement was due primarily to inventory control and contributions
from co-packing.
General and administrative expenses were $224,892 and $214,836 for the
first three months of fiscal 1996 and 1995, respectively. This $10,056
increase from 1995 (4.7%) is due primarily to inflationary factors. As a
percentage of sales, these amounts represented 15.8% and 14.2% for those
periods, respectively. The Company's general and administrative expenses
are predominately fixed in nature and do not vary in direct relation to
sales levels. With the decreased sales mentioned above, general and
administrative expenses as a percent of sales rose accordingly.
Selling and marketing expenses were $253,783 and $232,601 for the first
three months of fiscal 1996 and 1995, respectively. As a percentage of
sales, these amounts represented 17.8% and 15.4% respectively. This
increase reflects the Company's expanded marketing efforts in several key
market sectors which management believes will yield positive results.
The net loss for the first fiscal quarter was $89,602 compared to a loss
of $75,114 for the same fiscal quarter the previous year. The company has
historically experienced seasonal sales declines and corresponding losses
for the first three months ending January 31. Management believes that
operating results will follow the same trend as last year with increased
sales for the last three fiscal quarters more than compensating for the
seasonal decline.
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 January 31,
1996, the Company's total borrowings under its bank line of credit were
$1,051,024 at an interest rate of 1% over the basic commercial lending
rate. On October 31, 1995, total borrowings were $1,089,920. Borrowings
under this line were payable upon demand and limited to 65 percent of
eligible accounts receivable and 30 percent of eligible inventory up to an
aggregate maximum of $1,500,000.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
results of operations, continued
Accounts receivable at January 31, 1996 were $650,683, a 25.5 percent
decrease over accounts receivable of $873,191 on October 31, 1995. The
decrease is attributable to a decrease in sales normally experienced during
the Company's first fiscal quarter. Inventory decreased 3.7 percent to
$1,496,408 at January 31, 1996 from $1,554,625 at October 31, 1995 which
management considers a normal seasonal adjustment.
The Company believes its existing assets, bank lines, and revenues from
operations will be sufficient to fund the Company's operations for at least
the next twelve months. The bank line of credit is due on June 1, 1996. The
Company expects its bank line to be renewed or replaced. In the event that
the Company's bank lines were not renewed or replaced, the Company would
need to curtail operations substantially, seek additional capital, or both. <PAGE>
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 of business.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to Vote of Security Holders
None.
Item 5. Other Information
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Registrant:
INTERNATIONAL YOGURT COMPANY
Date: _________________________ By _________________________________
John N. Hanna, Chairman of the
Board and Chief Executive Officer
Date: _________________________ By__________________________________
Roger Olson,
Principal Financial Officer<PAGE>
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<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JAN-31-1996
<CASH> 239,842
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<ALLOWANCES> 0
<INVENTORY> 1,496,408
<CURRENT-ASSETS> 2,530,968
<PP&E> 1,801,195
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<TOTAL-ASSETS> 4,649,934
<CURRENT-LIABILITIES> 1,814,821
<BONDS> 0
0
0
<COMMON> 4,589,279
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,649,934
<SALES> 1,423,621
<TOTAL-REVENUES> 1,423,621
<CGS> 1,006,828
<TOTAL-COSTS> 1,485,493
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,928
<INCOME-PRETAX> (89,602)
<INCOME-TAX> 0
<INCOME-CONTINUING> (89,602)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (89,602)
<EPS-PRIMARY> (.04)
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